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报告摘要

Regional Morning Notes Summary - 14 July 2017

Core Content Overview

This document provides a summary of key updates and analysis for various Asian markets and companies, including China, Indonesia, Malaysia, Singapore, and Thailand. It includes company updates, financial performance, investment recommendations, and market outlooks.

China

Alibaba Group (BABA US/BUY/US $149.52/Target: US$ 173.00)

New Retail Strategy: Alibaba is leading the transformation of the traditional retail industry in China with its "New Retail" initiative, which includes the Taobao Maker Festival and unmanned stores like Taocafe.
Festival Highlights: The event attracted 108 millennial merchants and over 10,000 visitors, showcasing innovations and new consumer engagement strategies.
Unmanned Stores: Taocafe is a self-serviced store that uses IoT, image recognition, and sensors. It offers FMCG products 20-30% cheaper than street prices and reduces staff costs by ~20%.
Market Position: Alibaba has an 11% market share in China's retail sales, and the online retail market is still underpenetrated at 15%.
Growth Outlook: The company expects to lead the market in penetrating the remaining 85% of offline retail.
Key Financials:
- Net Turnover: Rmbm 158,273 (2017), expected to grow to Rmbm 387,363 (2020).
- EBITDA: Rmbm 59,980 (2017), expected to reach Rmbm 151,413 (2020).
- Net Profit (adj.): Rmbm 60,264 (2017), expected to reach Rmbm 149,626 (2020).
- PE (x): 39.1 (2017), projected to decrease to 16.2 (2020).
- P/B (x): 8.7 (2017), projected to decrease to 4.2 (2020).
- EV/EBITDA (x): 38.9 (2017), projected to decrease to 15.4 (2020).
Recommendation: Maintain BUY with a target price of US$173.00, offering a 15.7% upside.
Stock Performance: 52-week high/low: US$142.34/US$74.23. 1mth: 15.9%, 3mth: 34.9%, 6mth: 50.8%, 1yr: 83.7%, YTD: 58.8%.
Catalysts: Faster-than-expected global expansion, better-than-expected advertising revenue, breakeven at Youku and Koubei, and potential listing of Ant Financial.
Analyst: Julia Pan Meng Yao

Anta Sports (2020 HK/BUY/HK$27.25/Target: HK$31.00)

Investor Day Highlights: Strong growth guidance through 2020, with a 15-20% CAGR for group retail sales.
Growth Drivers: Anta Kids and e-commerce channel are expected to drive growth acceleration.
Anta Kids: Target to become China's No.1 children's sportswear brand with over 3,000 stores and 30%+ CAGR by 2020.
E-commerce: Expected to contribute 20%+ sales by 2020.
Non-Core Brands: FILA and Descente are positioned in the high-end market, with FILA targeting 30%+ CAGR and Descente aiming for Rmb2.5b retail sales by 2020.
Key Financials:
- Net Turnover: Rmbm 13,346 (2016), expected to grow to Rmbm 21,647 (2020).
- EBITDA: Rmbm 3,429 (2016), expected to grow to Rmbm 5,442 (2020).
- Net Profit (adj.): Rmbm 2,386 (2016), expected to grow to Rmbm 3,909 (2020).
- PE (x): 24.9 (2016), projected to decrease to 16.2 (2020).
- P/B (x): 6.2 (2016), projected to decrease to 4.0 (2020).
- EV/EBITDA (x): 16.0 (2016), projected to decrease to 10.1 (2020).
- Dividend Yield (%): 2.8 (2016), projected to increase to 4.3 (2020).
Recommendation: Maintain BUY with a target price of HK$31.00, offering a 13.8% upside.
Stock Performance: 52-week high/low: HK$27.25/HK$16.02. 1mth: 19.3%, 3mth: 23.0%, 6mth: 18.9%, 1yr: 70.3%, YTD: 18.2%.
Analyst: Mark Chen

Indonesia

Indocement TP (INTP IJ/SELL/Rp17,600/Target: Rp14,000)

2Q17 Preview: Flat qoq earnings but weak yoy performance.
Recommendation: SELL with a target price of Rp14,000.

Malaysia

2H17 Outlook

Market Outlook: Expect a more subdued 2H17, favoring a more defensive strategy.
Investment Themes: Good returns expected for selected investment themes including mega infrastructure, China's FDI, and E&E plays.

Singapore

CapitaLand Commercial Trust (CCT SP/BUY/S$1.67/Target: S$1.90)

Redevelopment: The Golden Shoe Car Park is undergoing redevelopment.
Recommendation: BUY with a target price of S$1.90.

Oversea-Chinese Banking Corporation (OCBC SP/BUY/S$10.89/Target: S$13.00)

2Q17 Preview: Broad-based growth with resilient asset quality.
Recommendation: BUY with a target price of S$13.00.

Small/Mid Cap Highlights

Duty Free International (DFIL SP/HOLD/S$0.315/Target: S$0.37):
- Downgraded to HOLD due to uncertainty around the impact of GST.

Thailand

Total Access Communication (DTAC TB/BUY/Bt55.50/Target: Bt64.00)

2Q17 Results: Earnings beat estimates due to effective cost control.
Recommendation: BUY with a target price of Bt64.00.

Key Indices (as of 14 July 2017)

Index	Prev Close	1D %	1W %	1M %	YTD %
DJIA	21553.1	0.1	1.1	0.8	9.1
S&P 500	2447.8	0.2	1.6	0.4	9.3
FTSE 100	7413.4	0.0	1.0	-0.8	3.8
AS30	5779.1	1.1	-0.3	-1.4	1.0
CSI 300	3686.9	0.8	0.7	4.3	11.4
FSSTI	3235.7	0.8	0.3	-0.5	12.3
HSCEI	10677.4	1.5	3.2	1.5	13.7
HSI	26346.2	1.2	3.5	1.8	19.8
JCI	5830.0	0.2	-0.3	0.6	10.1
KLCI	1753.8	-0.2	-0.9	-2.2	6.8
KOSPI	2409.5	0.7	0.9	1.6	18.9
Nikkei 225	20099.8	0.0	0.5	1.1	5.2
SET	1579.4	0.3	0.3	0.2	2.4
TWSE	10460.2	0.4	0.9	3.8	13.0
BDI	859	3.5	3.6	-1.3	-10.6
CPO (RM/ml)	2658	0.8	-0.3	-1.3	-16.9
Brent Crude (US$/bbl)	48	1.4	0.6	-0.6	-14.8

Key Assumptions

Metric	2016	2017F	2018F
GDP (yoy)	6.7	6.3	6.3
Brent (Average) (US$/bbl)	45	55	58
CPO (RM/mt)	2,653	2,600	2,500

Corporate Events

Lunaroon with United Overseas Bank: Thailand, 18 Jul
Roadshow with Citic Envirotech Ltd: Taipei, 18 Jul
Analyst Marketing on Singapore Strategy & Small & Mid Caps: Taipei, 19 Jul - 21 Jul
Roadshow with Jacobson Pharma: Shanghai, 28 Jul
Visit to Sarawak Corridor of Renewable Energy: Sarawak, 1 Aug - 3 Aug
Roadshow with Top Glove Corporation: US/Canada, 5 Sep - 12 Sep

Summary of Key Investment Themes

Alibaba: New retail strategy, O2O integration, global expansion, and potential listing of Ant Financial.
Anta Sports: Multi-brand and omni-channel strategy, growth in Anta Kids and e-commerce, and expansion into high-end markets.
Thailand: DTAC's strong performance due to cost control.
Singapore: CapitaLand's redevelopment and OCBC's resilient asset quality.
Malaysia: Focus on defensive strategies but good returns expected from selected themes.
Indonesia: Weak performance expected in 2Q17.

Conclusion

The report highlights the strong growth prospects for Alibaba and Anta Sports, emphasizing their strategic initiatives and market positioning. It also notes the subdued outlook for Malaysia and Indonesia, suggesting a more defensive approach. The summary includes key financial metrics, valuation ratios, and investment catalysts for each company.

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