20170209-大华继显-Regional_Morning_Notes_20页_1mb

报告摘要

Regional Morning Notes Summary - 09 February 2017

Core Content Overview

This document provides a detailed analysis of economic and market developments across several Asian regions, including China, Indonesia, Singapore, and Thailand, along with stock insights and company updates. It includes key financial metrics, policy changes, and investment recommendations.

China

Economic Policy

The People's Bank of China (PBOC) implemented marginal tightening by increasing the interest rates of reverse repos and SLF after Chinese New Year.
The benchmark lending and deposit rates were kept unchanged, maintaining policy flexibility.
The PBOC's actions aim to control money market leverage and guide liquidity into the real economy, while preventing the growth of systemic risks.

Key Views

Tightening measures are primarily for risk control, targeting the rising leverage in the money market.
The impact of higher money market rates will spread to the real economy, potentially leading to a rise in average lending rates by 50-100bp in 1Q17.
Property market pressure is expected to increase due to reduced discount lending and existing market controls.

Company Update: China Merchants Bank (3968 HK)

Maintained BUY recommendation with a target price of HK$23.10.
Positive signs in corporate loans and SME asset quality.
High Net Interest Margin (NIM) of 2.59% and low cost-to-income ratio of 28%, contributing to an above-industry ROE of 16.3% for 2017.
Stabilisation of NIM and asset quality is a key catalyst.
Retail banking is a major strength, with 44.7% of total loans and a low retail deposit cost of 0.96%.
Mobile banking is progressing with a 5.0 app and 38 million active users.
Fee income is tightly linked to wealth management products (WMPs), which contribute 33.4% of total income.

Indonesia

Company Update: Siloam International Hospitals (SILO IJ)

Maintained BUY recommendation with a higher target price of Rp15,800.
Accelerates expansion through acquisitions, planning to add up to 10 hospitals in 2017 and 12 new Siloam Medica centres.
Acquisition strategy is driven by the need to increase capacity to serve BPJS Kesehatan patients, as many small hospitals lack working capital.
Siloam Medica centres are expected to have a similar ROI to traditional hospitals, with a US$3m investment for 40 beds.

Singapore

Company Update: Singapore Airlines (SIA SP)

HOLD recommendation with a target price of S$10.40.
3QFY17 analyst briefing indicates that it's too early for optimism.
The airline faces challenges with operational performance and market conditions, but the outlook remains cautious.

Thailand

Company Update

Dynasty Ceramic (DCC TB): HOLD recommendation, with a target price of Bt4.40.
- Expected good performance for the year priced in.
The Erawan Group (ERW TB): BUY recommendation, with a target price of Bt6.25.
- Strong growth potential due to market conditions and strategic positioning.

Key Indices

DJIA: 20054.3 (Previous close), -0.2% (1D), +0.8% (1W), +0.5% (1M), +1.5% (YTD).
S&P 500: 2294.7, +0.1% (1D), +0.7% (1W), +0.8% (1M), +2.5% (YTD).
FTSE 100: 7188.8, 0.0% (1D), +1.1% (1W), -0.3% (1M), +0.6% (YTD).
AS30: 5703.4, +0.5% (1D), -0.0% (1W), -2.6% (1M), -0.3% (YTD).
CSI 300: 3383.3, +0.5% (1D), +0.2% (1W), +0.6% (1M), +2.2% (YTD).
FSSTI: 3066.5, -0.2% (1D), -0.0% (1W), +2.9% (1M), +6.4% (YTD).
HSCEI: 9955.3, +1.1% (1D), +2.0% (1W), +3.7% (1M), +6.0% (YTD).
HSI: 23485.1, +0.7% (1D), +0.7% (1W), +4.1% (1M), +6.7% (YTD).
JCI: 5361.1, -0.4% (1D), +0.6% (1W), +0.8% (1M), +1.2% (YTD).
KLCI: 1688.5, 0.0% (1D), +1.0% (1W), +1.2% (1M), +2.8% (YTD).
KOSPI: 2065.1, -0.5% (1D), -0.7% (1W), +0.8% (1M), +1.9% (YTD).
Nikkei 225: 19007.6, +0.5% (1D), -0.7% (1W), -2.3% (1M), -0.6% (YTD).
SET: 1589.3, +0.4% (1D), +0.8% (1W), +1.6% (1M), +3.0% (YTD).
TWSE: 9543.3, -0.1% (1D), +1.0% (1W), +2.1% (1M), +3.1% (YTD).
BDI: 714, -2.9% (1D), -9.2% (1W), -25.9% (1M), -25.7% (YTD).
CPO (RM/ml): 3316, +0.5% (1D), +1.5% (1W), +3.2% (1M), +3.7% (YTD).
Brent Crude (US$/bbl): 55, +0.2% (1D), -2.9% (1W), -3.4% (1M), -2.9% (YTD).

Top Picks

BUY

Air China (753 HK): Target price HK$6.50, +16.9% upside.
Ping An Insurance (2318 HK): Target price HK$47.00, +14.4% upside.
Ciputra Property (CTRP IJ): Target price IJ$960.00, +39.1% upside.
Indosat (ISAT IJ): Target price IJ$8,015.00, +23.3% upside.
Genting Bhd (GENT MK): Target price MK$10.15, +19.3% upside.
Inari Amertron (INRI MK): Target price MK$2.00, +9.3% upside.
City Dev (CIT SP): Target price SP$10.36, +8.5% upside.
OCBC (OCBC SP): Target price SP$10.65, +9.9% upside.
Bangkok Dusit (BDMS TB): Target price TB$31.20, +47.9% upside.
Siam Cement (SCC TB): Target price TB$600.00, +15.8% upside.

SELL

Hartalega (HART MK): Target price MK$3.67, -22.7% downside.

Key Assumptions

GDP growth forecasts for 2017:
- China: 6.2%
- Indonesia: 5.2%
- Thailand: 3.3%
- Malaysia: 4.5%
- Singapore: 1.8%
- Japan: 0.9%
- US: 2.7%
- Euro Zone: 1.1%
Brent Crude average prices:
- 2016: 45 US$/bbl
- 2017F: 56 US$/bbl
- 2018F: 61 US$/bbl
CPO prices:
- 2016: 2,653 RM/mt
- 2017F: 2,600 RM/mt
- 2018F: 2,500 RM/mt

Corporate Events

Luncheon with Keppel T&T: Singapore, 10 Feb
Luncheon with Kim Loong Resources: Malaysia, 13 Feb
Tea Session with Valuetronics: Singapore, 13 Feb
Tea Session with Duty Free International: Singapore, 17 Feb
SGX-UOB Kay Hian Corporate Day: Taipei, 21 Feb
UOB Kay Hian ASEAN Conference: Taipei, 22 Feb
Group Meeting with Bumilama Agri: Singapore, 27 Feb
Annual Plantation Outlook Seminar: Malaysia, 6 Mar
Roadshow with Guotai Junan: Singapore, 7 Mar

Analysts

Zhu Chaoping: +8621 5404 7225 ext. 822, chaoping@uobkayhian.com
Xu Ye: +8621 5404 7225 ext. 820, xuye@uobkayhian.com
Jonathan Koh, CFA: +65 6590 6620, jonathankoh@uobkayhian.com
Jasmine Duan: +852 2826 1351, jasmine.duan@uobkayhian.com.hk

Summary of Key Financial Metrics for China Merchants Bank

Net interest income:
- 2014: Rmb117,202m
- 2015: Rmb136,729m
- 2016F: Rmb138,877m
- 2017F: Rmb149,275m
- 2018F: Rmb160,660m
Non-interest income:
- 2014: Rmb49,165m
- 2015: Rmb65,437m
- 2016F: Rmb74,359m
- 2017F: Rmb79,781m
- 2018F: Rmb85,970m
Net profit:
- 2014: Rmb55,911m
- 2015: Rmb57,696m
- 2016F: Rmb60,503m
- 2017F: Rmb70,015m
- 2018F: Rmb78,053m
Earnings Growth (2017F): 15.7%
Key Ratios:
- NIM: 2.59%
- Cost/income ratio: 28%
- ROE: 16.3%
- CASA ratio: 62.3%
- Dividend yield: 4.8%
- P/BV: 1.0x
- P/NTA: 1.0x
- Adjusted P/E: 6.2x

Conclusion

The document outlines the economic and market dynamics in key Asian regions, highlighting policy adjustments, corporate performance, and investment opportunities. It underscores the PBOC's tightening policy and its impact on the financial sector, particularly on China Merchants Bank, which is seen as a strong performer with a positive outlook. Indonesian healthcare sector is also highlighted as a potential growth area through acquisitions. The stock recommendations and target prices are provided, with BUY for several companies and SELL for others.