20170718-大华继显-Regional_Morning_Notes_17页_1mb

报告摘要

Regional Morning Notes Summary

Core Content

This document is a summary of regional financial insights for the week of 18 July 2017, covering China, Indonesia, Malaysia, Singapore, and Thailand. It includes economic data, stock updates, corporate events, key assumptions, and valuation information for selected companies.

Key Regions and Their Insights

China

Economic Activity:
- June GDP growth reached 6.9% yoy, exceeding market expectations.
- Fixed asset investment (FAI) growth for 6M17 was 8.6% yoy, with a rebound in June to 8.8% yoy.
- Industrial production (IP) growth jumped to 7.6% yoy in June, driven by the automobile and high-tech sectors.
- Retail sales increased 11.0% yoy, supported by property-related consumption and e-commerce growth.
- Economic Forecast: Revised full-year GDP forecast to 6.6% yoy from 6.3% yoy due to strong property markets and economic recovery in developed economies.
- Key Metrics:
  - Real GDP: 6.9% (2016), 6.6% (2017F), 6.3% (2018F)
  - Fixed Asset Investment: 8.1% (2016), 8.6% (2017F), 8.7% (2018F)
  - Retail Sales: 10.4% (2016), 10.5% (2017F), 10.4% (2018F)
  - Industrial Production: 6.0% (2016), 6.8% (2017F), 6.4% (2018F)
  - M2: 11.3% (2016), 10.5% (2017F), 10.5% (2018F)
  - CPI: 2.0% (2016), 2.0% (2017F), 1.9% (2018F)
  - PPI: -1.4% (2016), 3.0% (2017F), 4.5% (2018F)
  - Exchange Rate (Rmb/US$): 6.95 (2016), 7.0 (2017F), 6.99 (2018F)

Indonesia

Astra Agro Lestari (AALI IJ):
- Re-initiated coverage with HOLD due to strong production recovery in 2017.
- Target Price: Rp16,400 (upside of +8.1% from current price of Rp15,175).
- Performance:
  - FFB output grew 27.4% yoy in 5M17, contributing to 38% of the full-year target.
  - Earnings are expected to stabilise in 2017, with a 16% yoy growth in output and 6-9% yoy in production from 2018 onwards.
  - Challenges:
    - Bearish CPO market remains a concern.
    - Soft ASP (average selling price) could drag on earnings.
  - Valuation:
    - Trading at 0.3SD below 5-year historical mean of 17.2x.
    - PE (x): 12.9 (2016), 16.1 (2017F), 15.9 (2018F), 15.1 (2019F)
    - P/B (x): 1.6 (2016), 1.6 (2017F), 1.5 (2018F), 1.4 (2019F)
    - Dividend Yield (%): 0.7 (2016), 3.1 (2017F), 2.8 (2018F), 2.9 (2019F)
    - Net Debt/Equity (%): 20.8 (2017F), 8.3 (2018F), 2.1 (2019F)
    - Interest Cover (x): 30.7 (2017F), 56.5 (2018F), 207.2 (2019F)
    - ROE (%): 14.6 (2016), 10.3 (2017F), 9.9 (2018F), 9.9 (2019F)
    - Key Financials:
      - Net Profit (rep./act.): 2,071 (2016), 1,811 (2017F), 1,833 (2018F), 1,940 (2019F)
      - EBITDA: 3,660 (2016), 3,618 (2017F), 3,733 (2018F), 3,922 (2019F)
      - Operating Profit: 2,659 (2016), 2,579 (2017F), 2,594 (2018F), 2,708 (2019F)
      - Net Interest Income: 848 (2016), 848 (2017), 852 (2018F), 899 (2019F)
      - Net Profit (adj.): 2,071 (2016), 1,811 (2017F), 1,833 (2018F), 1,940 (2019F)
      - EPS (Rp): 1,171.9 (2016), 940.9 (2017F), 952.4 (2018F), 1,007.9 (2019F)

Malaysia

Alliance Financial Group (AFG MK):
- Maintained HOLD with a revised target price of RM4.10.
- Earnings Growth:
  - Upfront investment costs will cap earnings growth in FY18.
  - Earnings growth is expected to be 1% yoy in FY18, due to increased operating costs.
  - Dividend Yield: Above-sector at 4.1%, providing support to share price.
  - Valuation:
    - P/B (x): 1.2 (2017), 1.1 (2018F), 1.0 (2019F)
    - ROE: 10.0%
    - Entry Price: RM3.65

Key Indices

Index	Prev Close	1D %	1W %	1M %	YTD %
DJIA	21629.7	(0.0)	1.0	1.1	9.4
S&P 500	2459.1	(0.0)	1.3	1.1	9.8
FTSE 100	7404.1	0.3	0.5	(0.8)	3.7
AS30	5800.8	(0.1)	0.7	(0.1)	1.4
CSI 300	3663.6	(1.1)	0.3	4.1	10.7
FSSTI	3298.2	0.3	1.6	2.1	14.5
HSCEI	10783.2	0.5	5.6	3.8	14.8
HSI	26470.6	0.3	3.8	3.3	20.3
JCI	5841.3	0.2	1.2	2.1	10.3
KLCI	1755.2	0.0	(0.1)	(2.0)	6.9
KOSPI	2425.1	0.4	1.8	2.7	19.7
TWSE	10457.5	0.1	1.6	3.0	13.0
BDI	900	1.4	9.8	5.8	(6.3)
CPO (RM/ml)	2612	(0.7)	(1.1)	(2.3)	(18.4)
Brent Crude (US$/bbl)	48	(1.0)	3.3	2.2	(14.8)

Top Picks and Sell Recommendations

BUY

Alibaba (BABA US): CP = 151.23, TP = 173.00, Pot. +/- = +14.4%
Beijing Ent. Water (371 HK): CP = 6.27, TP = 7.60, Pot. +/- = +21.2%
Telekomunikasi Indo (TLKM J): CP = 4,650.00, TP = 5,000.00, Pot. +/- = +7.5%
V.S. Industry (VSI MK): CP = 2.01, TP = 2.40, Pot. +/- = +19.4%
OCBC (OCBC SP): CP = 11.09, TP = 13.00, Pot. +/- = +17.2%
Siam Cement (SCC TB): CP = 506.00, TP = 600.00, Pot. +/- = +18.6%

SELL

Great Wall Motor (2333 HK): CP = 10.16, TP = 6.00, Pot. +/- = -40.9%
Hartalega (HART MK): CP = 6.87, TP = 4.07, Pot. +/- = -40.8%

Key Assumptions

GDP (yoy)	2016	2017F	2018F
US	1.6	2.5	2.5
Euro Zone	1.7	1.8	1.6
Japan	1.0	0.9	1.2
Singapore	2.0	2.4	2.5
Malaysia	4.2	5.0	4.9
Thailand	3.2	3.3	3.3
Indonesia	5.0	5.2	5.5
Hong Kong	1.9	2.0	2.0
China	6.7	6.6	6.3
Brent (Average) (US$/bbl)	45	55	58
CPO (RM/mt)	2,653	2,600	2,400

Corporate Events

Event	Venue	Begin	Close
Luncheon with United Overseas Bank	Thailand	18 Jul	18 Jul
Roadshow with Citic Envirotech Ltd	Taipei	18 Jul	19 Jul
Analyst Marketing on Singapore Strategy & Small & Mid Caps	Taipei	19 Jul	21 Jul
Roadshow with Jacobson Pharma	Shanghai	28 Jul	28 Jul
Visit to Sarawak Corridor of Renewable Energy	Sarawak	1 Aug	3 Aug
Luncheon with Singapore Post	Singapore	4 Aug	4 Aug
Roadshow with Top Glove Corporation	US/Canada	5 Sep	12 Sep

Summary of Key Points

China's economy showed strong performance in Q2 2017 with GDP growth of 6.9% yoy, exceeding expectations.
Astra Agro Lestari (AALI IJ) is re-initiated with a HOLD due to strong production recovery, but faces challenges from the bearish CPO market.
Alliance Financial Group (AFG MK) is maintained with a HOLD, as upfront investment costs will cap earnings growth in FY18.
Stock valuations are based on historical data and future projections, with the focus on dividend yield and P/B ratios.
Key assumptions for economic growth and commodity prices are outlined, showing a general trend of moderate growth across regions.
Corporate events are scheduled to highlight strategic initiatives and market engagement.