20170808-大华继显-Regional_Morning_Notes_18页_857kb

Regional Morning Notes Summary

Core Content

This document provides an overview of stock performance and company updates for several Asian markets and key companies, including Geely Auto (China), Astra Agro Lestari (Indonesia), and others. It also includes key indices, top picks, corporate events, and financial metrics for Geely Auto.

Main Points

China

• Geely Auto (175 HK):
  • Sales Performance:
    • July 17 sales increased by 88% yoy and 3% mom, reaching 91,104 units.
    • 7M17 sales surged 89% yoy to 621,731 units, on track to meet the 2017 estimate of 1.2m units.
  • Product Launches:
    • Four new models launched from March to September 2016 contributed significantly to sales growth.
    • The mini-SUV Vision X1 saw increased sales in July 2017.
  • Capacity Constraints:
    • Capacity bottlenecks at Boyue and Emgrand GS/GL were easing.
    • Geely plans to increase production capacity for these models to 25,000 and 30,000 units by the end of August 2017, and to 30,000 and 40,000 units by December 2017.
  • Earnings Growth:
    • Net profit is expected to grow significantly in 2017-2019, with a 109% yoy increase in 2017.
    • Net margin is projected to rise from 8.4% in 2016 to 10.3% in 2017, and to 10.8% in 2019.
  • Valuation:
    • Maintained BUY rating with a target price of HK$22.00, implying an 18.7% upside from the current price of HK$18.54.
    • The target price is based on a 14x 2018F PE multiple, which is above the historical average.
  • Key Metrics:
    • EBITDA margin increased from 13.5% in 2016 to 14.7% in 2017.
    • ROE is expected to rise from 20.4% in 2016 to 32.8% in 2017.
    • Net debt/(cash) to equity increased from (60.9)% in 2017 to (87.2)% in 2019.

Indonesia

• Astra Agro Lestari (AALI IJ):
  • Sales and Earnings:
    • 1H17 results were in line with estimates, with net income growing 91.9% yoy to Rp1.02t.
    • However, earnings are expected to decline in 2H17 due to lower ASP.
  • Market Response:
    • Maintain HOLD rating with a target price of Rp16,400, based on a 5-year mean PE of 17x.
  • Financials:
    • Revenue increased 34.7% yoy in 1H17 to Rp8.546b.
    • Net profit (rep./act.) in 1H17 was Rp1.811b, while core net income was Rp1.022b.
    • EPS rose to Rp542, but only by 10.2% yoy due to dilution from a rights issue.
  • Operational Highlights:
    • AALI harvested 2.47m tonnes of fresh fruit bunch (FFB) in 1H17, up 23.1% yoy.
    • Expected to maintain this momentum in 2H17 due to favorable weather and seasonally higher output.
  • Stock Data:
    • Market cap (Rpb): 28,966.6
    • Shares issued (m): 1,924.7
    • 3-mth avg daily turnover (US$m): 1.3

Malaysia

• DiGi.Com (DIGI MK):
  • Challenges:
    • The migrant prepaid market remains a key challenge.
  • Long-term Strategy:
    • Expected to leverage its strong parentage and focus on digital services to grow earnings.

Singapore

• Alpha Picks:
  • Refreshed list of alpha picks includes SATS, Thai Bev, and newly-initiated Tianjin ZhongXin Pharmaceutical.

Thailand

• Thai Union Group (TU TB):
  • Earnings:
    • 2Q17 earnings were in line with expectations due to cost savings.

Key Indices

Corporate Events

Top Picks

Key Assumptions