20160830-大华继显-Regional_Morning_Notes_42页_2mb

Regional Morning Notes Summary

Core Content Overview

This document provides a summary of stock performance and company results for various markets and firms, focusing on China, Indonesia, Malaysia, Singapore, and Thailand. It includes key financial data, analyst recommendations, and updates on corporate events and earnings revisions.

Main Points by Region

China

• BYD Company (1211 HK)
  • 1H16 Results: Net profit rose 384% yoy, in line with guidance. EV sales surged 131% to 49,000 units, contributing significantly to revenue and gross profit.
  • 2Q16 Results: Net profit increased 300% yoy, as expected.
  • 3Q16 Outlook: Net profit is expected to drop by 1–12% yoy due to policy uncertainty on electric bus subsidies.
  • Company Description: Produces automobiles, rechargeable batteries, and handset components.
  • Stock Data:
    • Current price: HK$52.25
    • Target price: HK$54.00
    • Upside: +3.3%
  • Analyst Recommendation: Maintain HOLD.
  • Key Financials:
    • Revenue: Rmb43,745m (1H16)
    • Net profit: Rmb2,260m (1H16)
    • EBITDA margin: 12.2% (2016F)
    • Net margin: 3.9% (2016F)
    • ROE: 11.2% (2016F)
    • Dividend yield: 1.5% (2016F)
  • Earnings Revision: Net profit forecasts for 2016–18 remain at Rmb4,658m, Rmb4,845m, and Rmb6,302m, respectively.
  • Valuation: Traded at 27x 2016F PE, fairly priced relative to target.
  • EV Sales: Expected to reach 120,000 units in 2016, with PHEV accounting for 75% of EV sales.

Indonesia

• Bank Rakyat Indonesia (BBRI IJ)
  • Update: Profitability is still burdened by high operating expenses and provisioning.
  • Stock Data:
    • Current price: Rp11,500
    • Target price: Rp12,200
  • Analyst Recommendation: Maintain HOLD.

Malaysia

• AirAsia (AIRAMK)

  • 2Q16 Results: Core net profit increased 43% yoy, and gearing fell to 1.64x.
  • Analyst Recommendation: Maintain SELL.
  • Target Price: RM2.60.

• CIMB Group (CIMB MK)

  • 2Q16 Results: Earnings 4.5% below estimate, 7% below consensus.
  • Analyst Recommendation: Maintain HOLD.
  • Target Price: RM4.25.

• Hong Leong Bank (HLBK MK)

  • 4QFY16 Results: Earnings 8% above estimate, PPOP 6% below estimate.
  • Analyst Recommendation: Upgrade to HOLD.
  • Target Price: RM12.20.

• Hong Leong Financial Group (HLFG MK)

  • 4QFY16 Results: Results in line with estimates. Strong performance from subsidiary HLBank offset by weaker insurance unit.
  • Analyst Recommendation: Maintain HOLD.
  • Target Price: RM17.50.

• Kerjaya Prospek Group (KPG MK)

  • 2Q16 Results: No surprises.
  • Analyst Recommendation: Maintain BUY.
  • Target Price: RM2.56.

• Sunway (SWB MK)

  • 2Q16 Results: Expect additional boost to earnings in 2H16.
  • Analyst Recommendation: Maintain BUY.
  • Target Price: RM3.60.

Singapore

• Banking Sector:
  • Conducting stress tests to identify breaking points.

Thailand

• Indorama Ventures (IVL TB)
  • Update: Solid long-term earnings growth remains intact.
  • Analyst Recommendation: Maintain BUY.
  • Target Price: Bt40.00.

Key Indices

Top Picks (BUY)

Sell Recommendations

Key Assumptions

Corporate Events

Risk Factors

• Weaker-than-expected PHEV sales due to recent fire incidents and customer complaints.
• Uncertainty around e-bus subsidy cuts may impact 3Q16 net profit.

Conclusion

The summary highlights the performance of key companies in the region, particularly in China, with a focus on BYD's strong EV performance in 1H16 and its upcoming challenges due to policy uncertainty. Other firms in Malaysia and Indonesia show mixed results, with some upgrades and others maintaining their ratings. The document also provides key financial metrics, stock valuations, and upcoming corporate events.