20150123-大华继显-Regional_Morning_Notes_31页_1mb

Regional Morning Notes Summary

Core Content Overview

This document provides a summary of market updates and company analyses for the week of 23 January 2015, covering China, Malaysia, Singapore, and Thailand. It includes stock performance, financial updates, key assumptions, corporate events, and investment recommendations.

China

Company Updates

• Daphne (210 HK)

  • Overview: Inventory depletion is on track, but at the expense of margins.
  • Performance: Same-store sales (SSS) fell 7.5% yoy in 4Q14 and 3.4% yoy in 2014.
  • Forecast: 2H14 net profit is expected to be flat yoy at best.
  • Recommendation: Maintain BUY.
  • Target Price: HK$3.65.
  • Upside: +29.0% from current price (HK$2.83).
  • Key Risks: Faster recovery in SSS, further rental cost reductions, and stronger competition.

• Lijun International (2005 HK)

  • Overview: Growth remains strong, and the company is undervalued.
  • Performance: Strong revenue growth in 4Q14, with potential for improved margins due to better product mix and lower oil prices.
  • Forecast: Net profit growth is expected to be 48.5% yoy in 2014 and 20% yoy in the coming years.
  • Recommendation: Reiterate BUY.
  • Target Price: HK$5.00.
  • Upside: +38.9% from current price (HK$3.60).
  • Key Opportunities: New drug tenders and potential M&A with Hebei Hanlin Biotechnology.
  • Key Risks: Delays in tenders, lower-than-expected tendering prices, policy risks, and competition.

Malaysia

Strategy Update

• MOF Meeting: The ministry is confident in achieving the revised Budget 2015 projection, but oil price declines will continue to affect sentiment.

Company Updates

• Tenaga Nasional (TNB MK)
  • Performance: 1QFY15 core net profit rose 16% yoy to RM2.1b, beating estimates.
  • Forecast: FY15-17 EPS increased by 8%.
  • Recommendation: Maintain BUY.
  • Target Price: RM17.00.

Singapore

Company Updates

• Ascott Residence Trust (ART SP)

  • Performance: Recent acquisitions are expected to yield results in 2015.
  • Recommendation: Maintain BUY.
  • Target Price: S$1.42.

• Keppel Corp (KEP SP)

  • Performance: Better-than-expected performance due to exceptional gains.
  • Forecast: 2015-16 earnings cut by 5-10%.
  • Recommendation: HOLD.
  • Target Price: S$8.80.

• Suntec REIT (SUN SP)

  • Performance: Office sector shows promise, but retail sector is a threat.
  • Recommendation: Downgrade to HOLD.
  • Target Price: S$2.08.

Thailand

Sector Update

• Banking: Resilient growth supported by wider net interest margin (NIM), resilient fee income, and declining provisions.

Company Update

• Bangkok Expressway (BECL TB)

  • Performance: Amalgamation with BMCL is expected to benefit both companies in the long term.
  • Recommendation: Maintain BUY.
  • Target Price: Bt50.00.

• Thai Union Frozen Products (TUF TB)

  • Performance: 4Q14 earnings may decline qoq.
  • Recommendation: Maintain BUY.
  • Target Price: Bt27.00.

Key Indices

Key Assumptions

Corporate Events

Top Picks

BUY

• Sunac China: HK$1918, CP: HK$7.18, TP: HK$9.29, Upside: 29.4%
• ICBC: HK$1398, CP: HK$5.75, TP: HK$6.90, Upside: 20.0%
• Bank Mandiri: BMRI IJ, CP: HK$11,000.00, TP: HK$12,500.00, Upside: 13.6%
• Gamuda: GAM MK, CP: HK$5.05, TP: HK$5.50, Upside: 8.9%
• DBS: DBS SP, CP: HK$20.00, TP: HK$22.68, Upside: 13.4%
• Pacific Radiance: PACRA SP, CP: HK$0.77, TP: HK$1.00, Upside: 30.7%
• Bangkok Bank: BBL TB, CP: HK$188.00, TP: HK$230.00, Upside: 22.3%
• Advanced Info: ADVANC, CP: HK$251.00, TP: HK$270.00, Upside: 7.6%

SELL

• UMWH Holdings: UMWH MK, CP: HK$10.68, TP: HK$10.00, Pot. +/-: (6.4%)

Conclusion

The summary highlights the mixed performance across the region, with some companies showing strong growth and others facing margin pressures. Daphne and Lijun International are the focus in China, with both companies facing challenges and opportunities in the coming quarters. In Malaysia, Tenaga Nasional is performing well, while in Singapore, the market shows varied outcomes. Thailand's banking sector is resilient, and the country is expected to see continued growth. The document also outlines key corporate events and investment recommendations for the region.