20150821-大华银行_中国_-Regional_Morning_Notes_41页_2mb

Regional Morning Notes Summary - 21 August 2015

Core Content Overview

This document provides a summary of stock performance and company results for several Asian markets, including China, Indonesia, Malaysia, Singapore, and Thailand. It includes key financial data, analyst recommendations, and market outlook for the listed companies.

Main Points by Region

China

• China TCM (570 HK)
  • Performance: 1H15 revenue rose 14.7% yoy to Rmb1,422.1m, net profit increased 24.3% yoy to Rmb234.6m, exceeding expectations.
  • Key Drivers: Improved operating efficiency, strong performance of exclusive NEDL products, and the acquisition of Tianjiang Pharma.
  • Recommendation: Maintain BUY, with a target price of HK$8.80.
  • Upside: +69.2% from current price.
  • Outlook: Expected 15% yoy revenue growth in 2H15, driven by continued expansion and integration of Tianjiang Pharma.

Indonesia

• Strategy: Focus on share buybacks and the trough of the market cycle.
• Key Question: Identifying the trough and the companies likely to conduct buybacks.

Malaysia

• Axiata (AXIATA MK)
  • Performance: 2Q15 earnings in line with expectations, with Celcom showing positive net adds but core net profit contraction due to GST confusion.
  • Recommendation: HOLD, with a target price of RM6.25.
• Dialog Group (DLG MK)
  • Performance: FY15 core profit exceeded street estimates, with positive surprises from storage terminals, upstream production, and fabrication projects.
  • Recommendation: BUY, with a target price of RM1.80.
• Kossan Rubber (KRI MK)
  • Performance: 2Q15 earnings increased 4.4% qoq due to capacity contributions from new plants and seasonal recovery in TRP.
  • Recommendation: HOLD, with a target price of RM6.59.

Singapore

• Ezion Holdings (EZI SP)
  • Performance: Positive progress on new liftboats in Vietnam, with two scheduled for delivery in 4Q15.
  • Recommendation: BUY, with a target price of S$1.40.
• Triyards Holdings (ETL SP)
  • Performance: All projects on track, with no impact on operations despite recent stock weakness.
  • Recommendation: BUY, with a target price of S$0.87.

Thailand

• CH Karnchang (CK TB)
  • Performance: Sales and earnings are expected to improve due to its unique holding company structure.
  • Recommendation: BUY, with a target price of Bt32.00.

Key Indices Performance

Top Picks (BUY)

Sell Recommendations

Key Assumptions

Corporate Events

Key Financial Highlights (China TCM)

• Revenue: Rmb1,422.1m (1H15), up 14.7% yoy.
• Net Profit: Rmb234.6m (1H15), up 24.3% yoy.
• Gross Margin: 60.2%, down 1.1ppt yoy.
• Net Margin: 16.5%, up 1.3ppt yoy.
• EPS: 7.78 fen, up 4.4% yoy.
• Net Debt/Equity: 5.7% (2015F), expected to decline.
• Interest Cover: 14.5x (2015F), up from 10.6x (2014).
• ROE: 9.6% (2015F), up from 13.9% (2014).

Key Financial Highlights (CIFI Holdings)

• Revenue: Rmb4,860m (1H15), down 3.2% yoy.
• Net Profit: Rmb802m (1H15), up 7.2% yoy.
• Core Net Profit: Rmb623m (1H15), down 3.6% yoy.
• Gross Margin: 21.5%, down 4.8ppt yoy.
• EPS: 0.13 HK$, up 4.8% yoy.
• Dividend Yield: 25.7% (1H15), up from 0% (1H14).
• Net Gearing Ratio: 77.8% (Jun 15), up 11.8ppt from 66.0% (end-14).
• Market Cap: HK$10,149.3m, with 6,766.2m shares issued.

Valuation Metrics

Risks

• China TCM: Continued policy uncertainties, lower drug prices, intensifying competition, and risks in integrating Tianjiang Pharma.
• CIFI Holdings: Risks in market expansion, new product launches, and integration of new projects.

Analysts Contact

• Carol Dou Xiao Qin: +8621 5404 7225 x 811, caroldou@uobkayhian.com
• Serena Shao: +8621-5404 7225 x 820, serenashao@uobkayhian.com
• Edison Bian: +852 2236 6761, edison.bian@uobkayhian.com.hk
• David Yang: (8621) 5404 7225 ext 801, davidyang@uobkayhian.com