20150925-大华继显-Regional_Morning_Notes_16页_808kb

报告摘要

Regional Morning Notes Summary - 25 September 2015

Core Content Overview

This document provides a comprehensive analysis of the regional financial markets, focusing on China, Malaysia, and Thailand, with insights into key sectors such as healthcare and securities, as well as company-specific updates and investment recommendations.

Key Sectors and Updates

China - Healthcare Sector

Business Environment: Expected to become tougher in 2016 due to increased pressure on drug and medical consumables prices.
Drug Tenders: More provinces have launched tenders to reduce drug sales to less than 30% of total hospital revenue. The 3Q15 tenders are expected to result in average price cuts of 15–20%.
Medical Consumables: Under pressure due to centralised tenders. Anhui province has cut prices for 1,213 types of medical consumables, with orthopaedic products seeing a 13% average price cut.
Tender Policies: Only generic drugs with high procurement value and limited formulations will be included in tenders. Price negotiations will determine drugs with less than three producers.
Social Insurance Fund: Deficit continues to rise, with 32% of regions/cities recording annual deficits in 2015 and more expected in 2017.
Stock Picks:
- Phoenix Healthcare (1515 HK): BUY, with a target price of HK$21.80.
- China TCM (570 HK): BUY, with a target price of HK$8.80.
Sector Catalysts:
- Continued government support for healthcare development.
- Strong demand for medical products and services.
- Industry consolidation and M&A opportunities.
Risks:
- Lower tendering prices.
- Anti-corruption campaigns and regulatory changes.
- Intensifying competition.
- Policy implementation delays.

China - Securities Sector

Off-market Financing Clean-up: Nearly complete, with outstanding balances at Rmb187b.
Margin Balances: Declined to 2.0% of A-share market cap, similar to the US level.
Market Outlook: The worst of forced selling is likely over. Capital market reform and internationalisation are expected to continue.
Top Pick: CGS (6881 HK), with a target price of HK$10.80.
Recommendation: Maintain OVERWEIGHT. Avoid CITICS until more clarity on investigations is provided.
Peer Comparison:
- CITICS (6030 HK): Unconsolidated monthly net profit down 60% from peak, but still shows strong year-on-year growth.
- HTS (6837 HK): HOLD, with stable earnings and market share.

Malaysia - Company Updates

Scientex (SCI MK)

Company Profile: One of the largest industrial packaging companies globally and a niche property developer in Southern Malaysia.
Stock Recommendation: Maintain BUY with a target price of RM8.80.
Recent Developments:
- Consumer Packaging Expansion: A 3-year expansion plan aims to quadruple consumer packaging capacity to 120,000MT p.a. by end-2016.
- New Production Facilities: CPP film plant started production by end-2015, and BOPP lines are expected to come online by mid-2016.
- Property Segment: Focus on affordable housing has helped maintain resilience in a weak property market.
Financial Highlights:
- Net Profit (Adj.): RM158m (FY16F), RM192m (FY17F).
- PE (2016F): 8.4x (FY16F), 7.1x (FY17F).
- P/B (2016F): 1.7x.
- Dividend Yield: 3.6% (FY16), 4.2% (FY17).
Pipeline and Landbank:
- Total GDV over the next 8 years: RM4b.
- Current landbank: 870 acres, with 60% allocated to affordable housing.
Valuation: SOTP-based target price of RM8.80 (9.7x 2016F PE).

Thailand - Company Update

Advanced Info Service (ADVANC TB)

Stock Recommendation: BUY, with a target price of Bt260.00.
Performance: Weaker QoQ 3Q15 results due to the handset subsidy programme.
Market Conditions: The company's depressed valuation has already factored in lack of clarity in capital management.

Key Indices and Market Data

Index	Prev Close	1D %	1W %	1M %	YTD %
DJIA	16201.3	-0.5	-2.8	2.1	-9.1
S&P 500	1932.2	-0.3	-2.9	2.1	-6.2
FTSE 100	5961.5	-1.2	-3.6	1.1	-9.2
AS30	5102.3	1.4	-1.3	-0.8	-5.3
CSI 300	3285.0	0.7	1.5	8.0	-7.0
FSSTI	2845.7	-0.8	-0.8	0.1	-15.4
HSCEI	9469.8	-1.0	-5.0	-0.5	-21.0
HSI	21096.0	-1.0	-3.5	-1.4	-10.6
JCI	4244.4	-2.3	-2.0	1.9	-18.8
KLCI	1613.2	-1.4	-2.1	5.3	-8.4
KOSPI	1947.1	0.1	-1.5	5.4	1.6
Nikkei 225	17571.8	-2.8	-2.2	-1.3	0.7
SET	1372.4	-0.2	-1.2	3.7	-8.4
TWSE	8123.1	-0.9	-3.8	5.8	-12.7
BDI	922	0.5	4.4	-4.8	17.9
CPO (RM/mt)	2051	1.2	-0.5	6.6	-10.7
Brent Crude	48	1.2	-1.5	13.2	-15.7

Corporate Events

Indonesia Market Strategy & Consumer Sector Analyst Presentation: 8–9 October, Kuala Lumpur.
Asian Gems Conference: 12–13 October, Singapore.

Key Assumptions

Country	GDP (% yoy) 2014	GDP (% yoy) 2015F	GDP (% yoy) 2016F
US	2.4	2.5	2.5
Euro Zone	0.9	1.5	1.7
Japan	-0.1	0.5	1.5
Singapore	2.9	2.5	2.9
Malaysia	6.0	4.8	4.8
Thailand	0.9	2.7	4.0
Indonesia	5.0	4.8	5.4
Hong Kong	2.5	1.8	1.5
China	7.3	6.5	6.7

Investment Recommendations

BUY Recommendations:
- Phoenix Healthcare (1515 HK)
- China TCM (570 HK)
- Scientex (SCI MK)
- CGS (6881 HK)
- TUL (3933 HK)
SELL Recommendations:
- SIA Engineering (SIE SP)
- UMWH Holdings (UMWH MK)
- SSY (2005 HK)
- China Shineway (2877 HK)

Summary of Key Points

Healthcare Sector in China: Expected to face continued price pressure in 2016, with more provinces launching tenders and focusing on generic drugs.
Securities Sector in China: Clean-up of off-market financing is nearing completion; the worst is likely over, and reform is expected to continue.
Scientex (Malaysia): Maintained BUY recommendation due to expansion plans and strong growth potential in consumer packaging.
Advanced Info Service (Thailand): Maintained BUY due to depressed valuation and potential rerating catalysts.
Market Outlook: Overall market sentiment remains cautious, but long-term growth is anticipated from ongoing reforms and sector-specific opportunities.

Risks

Healthcare: Lower tendering prices, anti-corruption campaigns, intensified competition, and possible policy delays.
Securities: Continued uncertainty around regulatory changes and market stability.
Scientex: Currency exposure, potential forex losses, and competition in the packaging and property sectors.