20160902-法国巴黎银行-Spotlight_On_Asia_11页_978kb_978kb

Summary of Document Content

Core Content Overview

This document is a research summary from BNP Paribas, covering sector and company analyses in Asia, with a focus on gas utilities, IT services, and healthcare. It includes price recommendations, financial forecasts, and insights into regulatory and market trends.

Sector Research Highlights

China Gas Utilities

• Key Insight: Gas price regulations are becoming a certainty, with the NDRC planning to review and lower overall gas prices across the supply chain.
• Price Regulation: The move is in line with expectations and aims to reduce manufacturing costs and stimulate gas demand. However, the results have been mixed, with domestic demand growth slowing despite price cuts.
• Impact on Companies:
  • Beijing Enterprises (392 HK): Expected to be the least impacted due to highly regulated prices in Beijing.
  • China Resources Gas (1193 HK): Likely to be the most impacted due to a significant portion of revenue from C&I gas sales.
• Recommendation: BNP Paribas maintains a Hold rating for Beijing Enterprises and a Hold for China Resources Gas. A Reduce rating is given to Kunlun Energy (135 HK).
• Valuation:
  • BEHL (Beijing Enterprises) has a P/E of 7.9x and a P/B of 0.8x for 2016.
  • CR Gas has a P/E of 7.9x and a P/B of 0.8x for 2016.
  • The target price for BEHL is HKD42.09, with a +2.7% upside.

India IT Services

• Key Insight: The current slowdown in revenue growth is attributed to temporary issues rather than structural.
• Temporary Factors:
  • Uncertain macro environment affecting short-term project renewals.
  • Clients cutting legacy work, but not yet fully adopting automation and digital solutions.
• Positive Outlook: Early adopter accounts have seen growth in automation and digital offerings, suggesting improvement in the next few quarters (by FY18).
• Recommendation:
  • Buy ratings for Infosys (INFO IN) and HCL Technologies (HCLT IN).
  • Reduce rating for Persistent Systems (PSYS IN).
• Valuation:
  • Target prices range from +12.8% to +20.7% upside.
  • FY17-19 revenue estimates have been conservatively trimmed.
  • DCF-based target prices are provided for each company.

Company Research Highlights

Phoenix Healthcare (1515 HK)

• Key Insight: Significant progress has been made on the CRH deal, with it entering accelerated approval and expected to close by end-October.
• Deal Impact: CRH management has been introduced to investors, highlighting potential for growth through synergies.
• Strategic Growth: Phoenix plans to double its bed count to 24,000 by 2018.
• Recommendation: Buy rating, with a HKD15.98 target price (+17.7% upside).
• Valuation:
  • Recurring P/E of 33.7x for 2016.
  • Target price is based on strong M&A appeal and de-risked joint-ownership model.

Korea: Samsung SDI (006400 KS)

• Key Insight: Despite the Galaxy Note7 fire incident, BNP Paribas remains optimistic and maintains a Buy rating.
• Fire Investigation:
  • The fire is under investigation, with ITM Semiconductor potentially liable.
  • SDI is not expected to bear significant costs.
• China EV Market: Regulatory delays may prevent SDI from entering the EV market in 2016, but the company remains a key beneficiary of car electrification.
• Recommendation: Buy rating, with a KRW142,000 target price (+30.9% upside).
• Valuation:
  • Recurring P/E of 22.8x for 2015.
  • EV/EBITDA of 11.3x for 2015.
  • Despite negative earnings in 2016, the company is expected to recover.

Key Risks and Considerations

• Gas Sector: Uncertainty around gas transmission tariff cuts and potential margin compression.
• IT Services: Risk of continued legacy demand pressure and currency fluctuations.
• Healthcare Sector: Reliance on CRH deal and potential integration challenges.
• Korea Market: Risk of regulatory delays and potential recall costs from the Galaxy Note7 incident.

Summary of Recommendations

Disclosures and Applicability

• The report includes important disclosures for U.S. and Korean markets, indicating potential conflicts of interest due to BNP Paribas' investment banking relationships and financial interests in the companies.
• BNP Paribas Securities (Asia) Ltd is the non-U.S. affiliate involved in these recommendations.