20150115-大华继显-Regional_Morning_Notes_27页_1mb

报告摘要

Regional Morning Notes Summary - 15 January 2015

Core Content Overview

This document provides a comprehensive summary of market updates and investment recommendations for various regions, focusing on China, Hong Kong, Indonesia, Malaysia, Singapore, and Thailand. It includes sector analysis, company updates, key indices, top picks, and financial data for selected firms.

Main Points by Region

China

Sector Update: City Gas Distribution
- Oil price drop is negatively impacting natural gas (NG) demand.
- NG price cuts are expected to be delayed and smaller than anticipated.
- NG is now only 5-20% cheaper than gasoline and diesel, reducing its competitiveness.
- Long-term supply increases may help improve the bargaining power of city gas companies.
- Downgrade: City Gas sector to MARKET WEIGHT.
- Top Picks:
  - CR Gas (1193 HK): BUY, Target: HK$23.50
  - BEHL (392 HK): BUY, Target: HK$73.00
  - ENN Energy (2688 HK): HOLD, Target: HK$52.00
  - Kunlun Energy (135 HK): HOLD, Target: HK$8.60
  - Towngas China (1083 HK): HOLD, Target: HK$7.50

Hong Kong

Company Update: Luk Fook (590 HK)
- Downgraded to HOLD due to weak December performance.
- Target price: HK$32.00
- Previous price: HK$29.20

Indonesia

Strategy Update
- Consumer sector: Decline in raw material prices may offset transport cost increases.
- Raw material cost accounts for 40% of sales, while distribution cost is 3%.
- Companies like MYOR, ICBP, and AISA are more sensitive to price changes.
- LPPF and ACES are more stable.

Malaysia

Company Updates
- Barakah Offshore Petroleum (BARAKAH MK): BUY, Target: RM1.28
  - Cheapest proxy to domestic T&I sector, offering 69.4% upside.
- Deleum (DLUM MK): BUY, Target: RM1.90
  - Resilient business in challenging times, with high dividend yields.

Singapore

Strategy Update
- Watch for the reversal of yield compression.
- Highlighted stocks: StarHub, M1, SIA Engineering.
- Recommendations: BUY SingTel and Venture.

Thailand

Company Updates
- Khon Kaen Sugar Industry Plc (KSL TB): BUY, Target: Bt13.90
  - Earnings jumped YoY in 4QFY14 but declined QoQ.
- TISCO Financial Group (TISCO TB): HOLD, Target: Bt48.00
  - Flat earnings in 2014 due to weak top-line and higher provisions.

Key Indices Performance (as of 15 January 2015)

Index	Previous Close	1D %	1W %	1M %	YTD %
DJIA	17427.1	-1.1	-0.9	0.8	-2.2
S&P 500	2011.3	-0.6	-0.7	0.4	-2.3
FTSE 100	6388.5	-2.3	-0.5	1.4	-2.7
AS30	5332.2	-0.9	0.0	3.2	-1.0
CSI 300	3502.4	-0.3	-3.9	8.9	-0.9
FSSTI	3326.2	-0.4	0.8	1.0	-1.2
HSCEI	12008.4	-0.5	0.1	7.1	2.5
HSI	24112.6	-0.4	1.8	4.7	2.2
JCI	5159.7	-1.0	-0.9	1.0	-1.3
KLCI	1742.0	-0.4	1.9	2.6	-1.1
KOSPI	1913.7	-0.2	1.6	-0.3	-0.1
Nikkei 225	16796.0	-1.7	-0.5	-1.8	-3.8
SET	1523.2	-0.8	1.5	3.0	1.7
TWSE	9180.2	-0.6	1.1	2.2	-1.4
BDI	757	-0.7	1.7	-12.3	-3.2
CPO (RM/mt)	2355	0.5	2.1	7.7	2.5
Nymex Crude	48	5.6	-0.3	-16.1	-9.0

Top Picks

Company	Ticker	Current Price	Target Price	Upside (%)
Sunac China	1918 HK	HK$7.04	HK$9.29	32.0
ICBC	1398 HK	HK$5.68	HK$6.90	21.5
Bank Mandiri	BMRI J	10,725.00	12,500.00	16.6
Gamuda	GAM MK	HK$5.02	HK$5.50	9.6
DBS	DBS SP	HK$19.98	HK$22.68	13.5
Pacific Radiance	PACRA SP	HK$0.74	HK$1.57	112.2
Bangkok Bank	BBL TB	HK$186.50	HK$276.00	48.0
Advanced Info	ADVANC	HK$244.00	HK$270.00	10.7

Key Assumptions

Indicator	2013	2014	2015F
GDP Growth (%yoy)	2.9	1.5	3.9
Brent (US$/bbl)	110	100	85
CPO (US$/ml)	736	725	765
BDI	1,219	1,200	1,300

Corporate Events

Meeting with Malaysia Ministry of Finance: 15 Jan, Kuala Lumpur
Singapore and Indonesia Telecom Analyst Presentation: 26-27 Jan, Kuala Lumpur

Company Update: Sunny Optical (2382 HK)

Stock Performance: Share price fell 16.5% over the last two weeks.
Reasons for Decline: Concerns over declining domestic handset demand and increased competition from AAC Technologies.
Positive Factors:
- Strong HCM (Handset Camera Module) shipments in 11M14 reached 172.8m units, exceeding expectations.
- Increased demand from major Chinese handset makers (Huawei, Xiaomi, etc.).
- Diversification into automobile lenses and 3D imaging applications.
Recommendation: Maintain BUY, Target: HK$13.20.
Upside: +18.7% from current price.
Key Financials (Rmbm):
- Net Profit (2014F-2016F): 588.0, 765.4, 931.1
- EPS (2014F-2016F): 54.2, 70.5, 85.8
- PE (2014F-2016F): 16.4, 12.6, 10.4
- P/B (2014F-2016F): 3.0, 2.5, 2.2
Risks: Potential weak demand, forex fluctuations.

Analysts

Yan Shi: +8621 54047225 (804), yank.shi@uobkayhian.com
Terry Zhou: +8621 54047225 (819), terryzhou@uobkayhian.com
Victor Yip: +852 2826 1392, victor.yip@uobkayhian.com.hk

Summary of Key Financials

Net Turnover (Rmbm): 5,812.8 (2013), 8,763.6 (2014F), 11,204.9 (2015F), 13,896.0 (2016F)
EBITDA: 646.8 (2013), 876.2 (2014F), 1,127.0 (2015F), 1,360.6 (2016F)
Net Profit (Rmbm): 440.5 (2013), 588.0 (2014F), 765.4 (2015F), 931.1 (2016F)
Net Profit (Adj.): 440.5, 588.0, 765.4, 931.1
ROE (%): 19.3 (2013), 19.2 (2014F), 21.7 (2015F), 24.2 (2016F)

Summary of Key Metrics

Metric	2013	2014F	2015F	2016F
EBITDA Margin (%)	11.1	10.0	10.1	9.8
Pre-Tax Margin (%)	8.7	7.9	8.0	7.9
Net Margin (%)	8.7	7.6	6.7	6.8
Net Debt/Cash to Equity (%)	-7.3	2.0	-11.8	-11.0
Interest Cover (x)	165.0	60.4	77.6	93.7
Net Profit Growth (%)	-	-2.4	-4.7	-3.8

Conclusion

The report highlights the impact of declining oil prices on the natural gas sector in China, leading to a downgrade to MARKET WEIGHT. It also discusses the resilience of companies like Sunny Optical in the face of market challenges, with continued strong performance in HCM shipments and diversification into new markets. Key indices show mixed performance, with some regions experiencing growth while others face declines. The top picks include a mix of BUY and HOLD recommendations, reflecting the analysts' view on growth potential and risks.

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