20170915-大华继显-Regional_Morning_Notes_26页_1mb

Regional Morning Notes Summary

Core Content Overview

This document is a Regional Morning Notes report dated Friday, 15 September 2017, summarizing key economic and company-related updates across several Asian markets, including China, Hong Kong, Indonesia, Malaysia, Singapore, and Thailand. It includes analysis on economic activity, company results, valuations, and corporate events, providing insights into market trends and investment opportunities.

Key Markets Analysis

China

• Economic Activity:

  • Economic growth slowed in August 2017, with all three major indicators (Industrial Production, Fixed Asset Investment, and Retail Sales) registering lower-than-expected performance.
  • Fixed Asset Investment (FAI) growth dropped to 3.8% yoy in August, down from 6.9% yoy in July.
  • Industrial production growth fell to 6.0% from 6.4% in July.
  • Retail sales growth declined to 10.1% yoy from 10.4% yoy in July, due to weaker property-related consumption.
  • GDP growth: Expected to remain at 6.6% for 2017 and 6.3% for 2018.

• Corporate Events:

  • Sun Hung Kai Properties (16 HK): FY17 results showed HK$41,782m net profit, up 27.9% yoy. Management raised the sales target to HK$36b for FY18.
  • China Maple Leaf Educational Systems (1317 HK): Better policy clarity and higher-than-expected student enrolment led to an upward revision in earnings estimates. Maintained BUY with a target price of HK$10.00.
  • Key Financials:
    • Net profit increased to HK$41,782m in FY17.
    • Core earnings rose 7.4% yoy.
    • Gearing ratio improved to 7.2%.
    • NAV per share is HK$183.8, with RNAV at HK$148.87, representing a 19% discount to NAV.
  • Market Impact:
    • Strong performance in residential sales, especially in Hong Kong.
    • Management is optimistic about the Hong Kong property market and expects continued growth in the office and retail segments in China.
    • Upcoming residential launches and a HK$5b sales target for China in FY18.

Hong Kong

• Economic Activity:

  • Residential sales momentum continued, with HK$44.7b contracted sales in FY17, exceeding the HK$33b full-year target.
  • Property sales in Hong Kong contributed significantly to profit, with HK$9,936m in FY17.
  • Management is focused on farmland conversion and expects a HK$30.8b value from its agricultural landbank.
  • Gearing ratio improved to 7.2%.

• Corporate Events:

  • Sun Hung Kai Properties (16 HK): Maintained BUY with an unchanged target of HK$148.87.
  • China Maple Leaf Educational Systems (1317 HK): Maintained BUY with a target of HK$10.00.

Malaysia

• Company Results:

  • Astro Malaysia (ASTRO MK): 2QFY18 results were above expectations, driven by higher adex contribution and lower content costs from renegotiations.
  • Eco World Development (ECW MK): 3QFY17 results were below expectations due to high tax rates and unexpected losses at its JVs.

• Corporate Events:

  • Globetronics Technology (GTB MK): Share price weakness presents a BUY opportunity, with bright growth prospects from production ramp-up.

Indonesia

• Sector Analysis:
  • Construction sector showed key takeaways from marketing trips in Malaysia and Singapore, indicating potential for growth.

Singapore

• Sector Analysis:
  • Shipyard sector saw orders everywhere but few contract wins, suggesting a strong order book but weak execution.

Thailand

• Strategy Update:
  • Balance of Risk turned more positive, with the SET target raised to 1,700 due to declining risk.
  • Key Indices:
    • DJIA: 22203.5 (up 0.2% in 1D)
    • S&P 500: 2495.6 (down 0.1% in 1D)
    • SET: 1659.1 (up 1.0% in 1D)
    • HSI: 27777.2 (down 0.4% in 1D)
    • KLCI: 1781.4 (down 0.3% in 1D)
    • Nikkei 225: 19807.4 (down 0.3% in 1D)

Key Financial Highlights

Top Picks

Corporate Events Calendar

Conclusion

The report highlights a mixed economic environment with moderation in China and positive momentum in Hong Kong, particularly for Sun Hung Kai Properties, which is expected to benefit from residential sales and farmland conversion. China Maple Leaf Educational Systems also showed improved performance due to policy clarity and strong student enrolment. In Malaysia, Astro Malaysia and Globetronics Technology performed well, while Eco World Development faced challenges. Singapore's shipyard sector had a strong order book but limited contract wins. Thailand showed a positive risk balance, with the SET index seeing an upward revision. Overall, the report suggests BUY opportunities in select stocks, especially those with strong growth prospects and improved valuations.