20130808-大和证券-Asia_Pacific_Daily_41页_1mb

报告摘要

Asia Pacific Daily Summary - 8 August 2013

Core Content Overview

The Asia Pacific Daily report from Daiwa covers key updates on Nexen Tire, Taiwan Economy, India Economy, and other research and events. It also includes regional index performance and financial data for various companies.

Major Changes

Nexen Tire (002350 KS):
- Rating changed from Outperform to Hold
- Target price reduced from KRW19,000 to KRW16,000
- Downside of 2.4%
- 7 August price: KRW16,400
- Downgraded due to weaker-than-expected 2Q13 earnings, sales decline of 11% YoY, and rising US competition from Chinese economy tyres
- Concerns about depressed ASP and sales volume in the US market, which is Nexen's largest revenue contributor (25-30% of total revenue)
- Adjusted EPS forecasts for 2013E, 2014E, and 2015E by 21%, 20%, and 14%, respectively
- Recommended Hankook Tire over Nexen due to its higher price point and less exposure to US competition

Looming Concerns

Nexen's 2Q13 operating profit was KRW45.8bn, below both Daiwa and Bloomberg forecasts
FX-related losses impacted net profit, which was KRW25.2bn or 34% below forecast
Soft 2Q13 earnings and lower-than-expected performance raised concerns about 2H13 earnings growth
Lower ASP and higher marketing costs are expected to continue impacting performance

Macro Research

Taiwan Economy

July exports grew by 1.6% YoY, below the Bloomberg consensus of 4.9% YoY and Daiwa's forecast of 2.4% YoY
Imports declined by 7.6% YoY, driven by a sharp dip in capital-goods imports (-17.9% YoY)
Seasonally-adjusted exports fell 4.3% MoM, while imports dropped 6.6% MoM
Exports to China fell 0.9% YoY, compared to a 6% YoY gain in June
Exports to ASEAN, Japan, and EU slowed significantly
Market outlook is modest growth, with liquidity not an issue, but global demand recovery is not expected to offset China's slowdown
Daiwa's 2013E and 2014E export growth forecasts are 2.5% YoY and 3% YoY, respectively

India Economy

New RBI governor Raghuram Rajan is expected to prioritize structural reforms, consumption management, and deficit control
Not a Keynesian-style stimulus advocate, which may dissappoint market expectations
His approach focuses on improving workforce competitiveness and fiscal austerity
Supply-side reforms are likely to be a key policy direction

Other Research

BOC Hong Kong (2388 HK):
- Rating: Buy
- Analyst: Grace Wu
- Positive surprises likely
China Auto Sector:
- Rating: Positive
- Analyst: Jeff Chung
- More rerating triggers expected
KEPCO (015760 KS):
- Rating: Outperform
- Analyst: Mike Oh
- Should benefit from revised tariff mechanism
Crompton Greaves (CRG IN):
- Rating: Hold
- Analyst: Saurabh Mehta

International Business Weights on 1Q FY14

International business activities had an impact on 1Q FY14 performance

Company Roadshows

12-13 Aug: Texhong Textile Group Ltd (2678 HK) – NDR in Tokyo
15 Aug: Dah Chong Hong (1828 HK) – Luncheon in HK and Global
15 Aug: Dah Chong Hong (1828 HK) – Luncheon (VC) in Tokyo and SG
20-21 Aug: Charoen Pokphand Foods PCL (CPF TB) – NDR in HK
21 Aug: AMVIG (2300 HK) – NDR in HK
22 Aug: AMVIG (2300 HK) – NDR in SG
22-23 Aug: CSCI (3311 HK) – NDR in Tokyo
22-23 Aug: Thai Beverage (THBEV SP) – NDR in HK
27 Aug: Skyworth Digital (751 HK) – Discovery Lunch in HK
27 Aug: West China Cement (2233 HK) – NDR in SG
27-28 Aug: Chaowei (951 HK) – NDR in HK

Daiwa Asian Events

23-Aug: Daiwa ASEAN Conference - HOSE-Daiwa Vietnam Corporate Day 2013 – SG
3-6 Sep: Daiwa Internet, E-Commerce, Mobile Gaming Conference – NY, SF, Toronto, HK
17-18 Sep: Daiwa Property & REIT Conference 2013 – HK
19-20 Sep: Daiwa India Corporate Day – Tokyo
19-25 Sep: Daiwa Australia Corporate Event – Tokyo
21-22 Oct: Daiwa ASEAN Conference - Best of Indonesia 2013 – Tokyo
23-25 Oct: Daiwa ASEAN Conference - Best of Indonesia 2013 – Toronto, New York

Regional Indices Performance

Market	1D Chg (%)	1M Chg (%)	YTD Chg (%)	13E EPS Growth (%)	14E EPS Growth (%)	13E PER	14E PER
HSI	-1.5	3.5	-4.7	10.0	7.8	10.3	9.6
HSCEI	-2.1	2.6	-17.4	8.5	8.7	6.4	5.9
SENSEX*	-0.4	-4.3	-3.9	9.8	16.1	14.1**	12.1**
KOSPI	-1.5	2.5	-5.9	22.6	20.4	10.1	8.4
TWSE	-1.5	-1.0	2.9	37.4	13.1	15.2	13.5
FSSTI	0.2	1.9	2.0	0.3	9.8	14.7	13.4
ASX 200	-1.8	3.5	7.8	6.3	10.4	14.3	13.0
TOPIX	-3.2	-2.8	34.4	59.6	10.2	14.4	13.1

*Valuation based on MSCI India
**MSCI India price as of 6 Aug

Financial Summary - Nexen Tire (002350 KS)

Metric	2013E	2014E	2015E
Revenue (bn KRW)	1,817	2,006	2,172
Operating profit (bn KRW)	208	232	284
Net profit (bn KRW)	144	169	203
Core EPS (fully-diluted)	1,521	1,783	2,140
Net profit margin (%)	7.9	8.4	9.4
ROE (%)	19.6	19.1	19.0
PER (x)	10.8	9.2	7.7
PBR (x)	1.9	1.6	1.3
EV/EBITDA (x)	8.0	7.3	6.0
Target price (KRW)	16,000	-	-

Key Financial Assumptions

Metric	2013E	2014E	2015E
ASP (W)	54,727	53,965	55,411
Volume (000 units)	33,200	37,175	39,200
Natural rubber price (USD/tonne)	2,904	2,419	2,554
Synthetic rubber price (USD/tonne)	2,793	2,312	2,455
Production capacity (000 unit/year)	35,000	38,000	41,000
KRW/USD	1,053.4	1,020.0	1,020.0
Net debt to equity (%)	112.4	91.5	70.9

Summary of Key Points

Nexen Tire's 2Q13 earnings were weaker than expected, leading to a rating downgrade to Hold
Concerns over US competition from Chinese economy tyres, which are now tariff-free
Lower ASP and higher marketing costs are expected to continue affecting earnings
Hankook Tire is recommended as a better alternative due to less exposure to US competition
Taiwan's economy is showing weaker export performance, with capital-goods imports down by 7.6% YoY
India's new RBI governor is expected to focus on structural reforms and fiscal austerity, not stimulus
Regional indices showed mixed performance, with TOPIX up 34.4% YTD and HSCEI down 17.4% YTD
Nexen's financials suggest modest growth in revenue and profit, with lower-than-expected EPS and PER for 2013E
Free cash flow is expected to improve in 2015E
Company roadshows are scheduled across Asia and global markets for August 2013