Regional Morning Notes Summary
Core Content Overview
This document provides a detailed summary of market updates and analysis for various Asian regions, including China, Hong Kong, Indonesia, Malaysia, Singapore, and Thailand, focusing on economic indicators, corporate updates, and investment recommendations. It also includes key assumptions, corporate events, and financial metrics for selected companies.
Main Points by Region
China
- Economic Focus: The central government is pushing for efficient fiscal spending and infrastructure projects, with local governments under pressure to execute plans or face fund recalls.
- Liquidity Conditions: Short-term interbank rates rose slightly due to bond issuances and IPOs. The yield curve steepened, raising concerns about liquidity.
- Key Companies:
- China Resources Land (1109 HK): Maintained a BUY rating with a target price of HK$30.78. The company plans to open six new MIXC malls this year and increase its investment property GFA to 5m sqm.
- China Longyuan Power (916 HK): Expected to see strong earnings recovery due to improved wind conditions and capacity expansion. Maintained BUY with a target price of HK$11.00.
Hong Kong
- Cathay Pacific Airways (293 HK): SELL rating with a target price of HK$17.10. Analysts are optimistic but expect lower yields.
Indonesia
- United Tractors (UNTR IJ): HOLD rating with a target price of Rp21,200. Entry price is Rp18,500.
Malaysia
- Top Glove (TOPG MK): BUY rating with a target price of RM6.92. Expected to exceed Street estimates in Q3FY15 due to stronger sales.
- Macro Outlook: The 1MDB default risk is manageable, but macro headwinds and funding cost pressure are more concerning.
Singapore
- M1 (M1 SP): HOLD rating with a target price of S$3.60. The upgrade to HOLD suggests a cautious outlook.
Thailand
- Sector Focus: Preference for downstream in the Oil & Gas sector, with PTT as the top pick. Upgraded to BUY with a target price of Bt410.00.
- Macro Outlook: The oil and gas sector is expected to benefit from continued government support and improved conditions.
Key Indices
| Index |
Prev Close |
1D % |
1W % |
1M % |
YTD % |
| DJIA |
17898.8 |
-0.8 |
0.3 |
-2.0 |
0.4 |
| S&P 500 |
2094.1 |
-0.7 |
0.1 |
-1.3 |
1.7 |
| FTSE 100 |
6784.9 |
-0.9 |
-0.3 |
-2.5 |
3.3 |
| AS30 |
5552.1 |
-0.2 |
0.7 |
-3.1 |
3.0 |
| CSI 300 |
5335.1 |
0.5 |
2.0 |
15.5 |
51.0 |
| FSSTI |
3353.9 |
0.2 |
0.6 |
-3.2 |
-0.3 |
| HSCEI |
13984.0 |
1.8 |
0.5 |
-0.2 |
16.7 |
| HSI |
27280.5 |
1.4 |
0.1 |
-1.9 |
15.6 |
| JCI |
4935.8 |
0.1 |
-3.2 |
-5.6 |
-5.6 |
| KLCI |
1734.4 |
-0.0 |
-0.6 |
-4.3 |
-1.5 |
| KOSPI |
2052.2 |
-0.2 |
-0.8 |
-2.6 |
7.1 |
| Nikkei 225 |
20407.1 |
0.1 |
-0.3 |
3.4 |
16.9 |
| SET |
1508.2 |
-0.4 |
0.1 |
-0.3 |
0.7 |
Key Assumptions
| Indicator |
2014 |
2015F |
2016F |
| GDP (yoy) |
7.7 |
7.2 |
7.0 |
| Brent (US$/bbl) |
99.45 |
65 |
70 |
| CPO (US$/mt) |
722 |
765 |
788 |
| BDI |
1,101 |
1,300 |
1,400 |
Corporate Events
- Pacific Radiance Luncheon: Singapore, 19 Jun
- M3 Marine Group Luncheon: Singapore, 25 Jun
- QL Resources Berhad Roadshow: Singapore, 30 Jun
Top Picks
| Company |
Ticker |
Current Price |
Target Price |
Potential % Change |
| Beijing Capital |
694 HK |
8.73 |
12.30 |
+40.9% |
| ICBC |
1398 HK |
6.68 |
7.80 |
+16.8% |
| Bank BJB |
BJR IJ |
900.00 |
1,300.00 |
+44.4% |
| Maybank |
MAY MK |
9.14 |
10.30 |
+12.7% |
| DBS |
DBS SP |
20.98 |
25.08 |
+19.5% |
| Pacific Radiance |
PACRA SP |
0.53 |
0.99 |
+86.8% |
| Krung Thai Bank |
KTB TB |
17.90 |
27.00 |
+50.8% |
| Sino Thai Engr |
STEC TB |
23.30 |
25.00 |
+7.3% |
Sell Recommendation:
- UMWH Holdings (UMWH MK): Target price HK$9.00, potential % change -13.6%
Summary of China Resources Land (1109 HK)
Project Highlights
| Project |
Location |
Stake (%) |
GFA (sqm) |
Type |
ASP (Rmb) |
Competitor |
Utilisation (hours) |
Start of Operations |
| Shanghai MIXC |
Minhang District, Shanghai |
50 |
530,000 |
Commercial, office, hotel |
29,000-33,000 |
Takashimaya |
1,980 |
2017F |
| Nanxiang Hi5 |
Jiading District, Shanghai |
100 |
40,070 |
Commercial |
Rent only |
Zhongye City Plaza |
- |
Oct 14 |
| Wuxi MIXC |
Taihu New City, Wuxi |
60 |
263,000 |
Commercial |
Rent only |
Coast City |
- |
Dec 14 |
Financial Highlights
| Metric |
2014 (HK$m) |
2015F (HK$m) |
2016F (HK$m) |
2017F (HK$m) |
| Net turnover |
71,389 |
104,274 |
121,834 |
140,253 |
| EBITDA |
17,281 |
26,339 |
30,929 |
35,764 |
| Net profit (rep./act.) |
14,696 |
14,339 |
17,061 |
19,455 |
| Net profit (adj.) |
19,948 |
17,615 |
17,061 |
19,455 |
| EPS (cent) |
342.7 |
219.6 |
261.2 |
297.9 |
| PE (x) |
15.7 |
11.5 |
9.7 |
8.5 |
| P/B (x) |
1.7 |
1.4 |
1.3 |
1.1 |
| EV/EBITDA (x) |
12.2 |
8.0 |
6.8 |
5.9 |
| Dividend Yield (%) |
1.7 |
2.2 |
2.6 |
2.9 |
| Net margin (%) |
20.6 |
13.8 |
14.0 |
13.9 |
Summary of China Longyuan Power (916 HK)
Key Financials
| Metric |
2013 (Rmbm) |
2014 (Rmbm) |
2015F (Rmbm) |
2016F (Rmbm) |
2017F (Rmbm) |
| Net turnover |
19,122.6 |
18,207.2 |
22,221.5 |
23,975.6 |
26,770.2 |
| EBITDA |
10,396.3 |
11, |
- |
- |
- |
Utilisation and Capacity
- Utilisation Hours: 1,980 hours in 2014, expected to increase significantly this year.
- Capacity Growth: 16% yoy to 15.7GW by 2015, with 70% of new capacity in southern China (category IV regions) where power curtailment is less of an issue.
Analysts
Conclusion
The document highlights a mix of economic and corporate updates across several Asian markets, emphasizing the central government's push for fiscal spending and infrastructure development in China, the impact of 1MDB on Malaysia's banking sector, and the continued support for the wind power industry. Investment recommendations are provided, with several companies being highlighted as top picks. The analysis also includes detailed financial data and key metrics for China Resources Land and China Longyuan Power, offering insights into their performance and future growth prospects.
