20150805-大华继显-Regional_Morning_Notes_34页_2mb

Regional Morning Notes Summary - 05 August 2015

Core Content Overview

This document provides a summary of market insights and stock analysis for several Asian markets, including China, Indonesia, Malaysia, Singapore, and Thailand. It includes updates on specific companies, sector performance, and key financial metrics. The report highlights investment recommendations, valuation analysis, and market expectations.

Main Points by Region

China

• Property Sector:

  • Shanghai residential market remains strong, with some projects planning to raise prices during the peak season (Sep/Oct).
  • Home sales are recovering after a short break in the low season (Jul/Aug), but growth may slow due to a high base in 4Q14.
  • Strong mortgage environment and limited premium project supply support price growth, but a surge like Shenzhen is unlikely due to high prices and property tax.
  • Recommendation: Maintain market weight; prefer large-cap stocks, SOE names (e.g., CRL, Vanke), and non-SOE stocks with decent growth and dividend yield (e.g., KWG, CIFI).

• Air China (753 HK):

  • Upgraded to BUY with a target price of HK$11.40.
  • Rmb12b capital injection and explicit state support mandate a re-rating.
  • Book value per share is expected to rise by 36% post-dilution.
  • Fair value P/B multiple raised from 1.2x to 1.5x based on 2016F ROE (13%), COE (9.4%), and a sustainable growth rate of 2%.
  • The company is valued using the Gordon Growth Model with an upside of +34.6%.

Indonesia

• Indofood Sukses Makmur (INDF IJ):

  • BUY recommended with a target price of Rp9,200.
  • 1H15 results are attractive, and the company is buying Bogasari and distribution for free.

• Kalbe Farma (KLBF IJ):

  • HOLD recommended with a target price of Rp1,665.
  • 1H15 results in line with expectations, up 7.1% yoy.

• Telekomunikasi Indonesia (TLKM IJ):

  • BUY recommended with a target price of Rp3,320.
  • 2Q15: Defensive strength shines.

Malaysia

• Hartalega Holdings (HART MK):

  • SELL recommended with a target price of RM6.76.
  • 1QFY16: Sequential sales volume increased by 5% due to the commissioning of five new NGC lines.

• MISC (MISC MK):

  • HOLD recommended with a target price of RM8.45.
  • 2Q15: Core 1H15 earnings ahead of estimates due to a turnaround in petroleum tankers.

Singapore

• Sembcorp Industries (SCI SP):
  • BUY recommended with a target price of S$5.00.
  • 2Q15: Utilities segment posts good earnings; overseas expansion is on track.

Thailand

• IRPC (IRPC TB):

  • BUY recommended with a target price of Bt6.50.
  • 2Q15: Results in line, achieving an all-time high net profit.

• E for L Aim (EFORL TB):

  • BUY recommended with a target price of Bt2.10.
  • Expect soft 2Q15 qoq results due to low-season impact.

Key Indices Performance (as of 05 August 2015)

Top Picks (BUY)

Sell Recommendations

Key Assumptions

Corporate Events

Air China (753 HK) - Summary

• Company Description: China's flag carrier, based in Beijing, with over 95 domestic and 46 international/region destinations.
• Stock Data:
  • GICS Sector: Industrials
  • Bloomberg Ticker: 753 HK
  • Shares Issued (m): 4,562.7
  • Market Cap (HK$m): 110,827.8
  • Market Cap (US$m): 14,293.7
  • 3-Month Avg Daily Turnover (US$m): 12.9
• Price Performance:
  • 52-Week High/Low: HK$10.02/HK$4.56
  • 1Mth: -3.3%
  • 3Mth: -12.3%
  • 6Mth: 25.9%
  • 1Yr: 67.7%
  • YTD: 35.1%
• Major Shareholders:
  • China National Aviation: 50.2%
  • Cathay Pacific Airways: 19.0%
• Valuation:
  • Previous Target Price: HK$7.90
  • New Target Price: HK$11.40
  • Upside: +34.6%
  • Risk Premia Reduced: 50bp to 5.0%

Key Financials (2014–2017F)

Analysts

• Edison Bian: +852 2236 6761 | edison.bian@uobkayhian.com.hk
• David Yang: +8621 5404 7225 ext 801 | davidyang@uobkayhian.com

Summary of Key Insights

• Air China's capital injection and state support are key drivers for its re-rating.
• The property sector in Shanghai shows resilience with a strong market and potential for price increases during peak season.
• While home sales are recovering, the growth may slow due to a high base from 4Q14.
• The property market is expected to benefit from continued credit easing and new project launches.
• Several companies are highlighted for investment based on their financial performance and growth prospects.
• The report also includes market indices, corporate events, and detailed financial data for each company.