20180627-大华继显-Regional_Morning_Notes_24页_1mb
报告摘要
Regional Morning Notes Summary - 27 June 2018
Core Content Overview
This document provides a comprehensive analysis of stock performance and market outlook for various Asian markets, focusing on Indonesia, China, Malaysia, Singapore, and Thailand. It includes key company updates, valuation insights, and recommendations for specific stocks. The analysis also covers sector-specific updates, particularly for the steel industry in China, and highlights upcoming corporate events and financial metrics for Jacobson Pharma.
Key Stories and Market Updates
Indonesia
- Acset Indonusa (ACST IJ/BUY/Rp2,500/Target: Rp3,600)
- Initiating coverage with a BUY rating.
- The company is entering a phase of rapid earnings growth.
- Target price is set at Rp3,600 with a potential upside of 44%.
China
- Steel Sector
- Expected to deliver solid 1H18 results due to strong year-to-date (YTD) steel product spreads.
- Environmental inspections will continue to suppress supply in 2H18.
- The rainy season may cause a slowdown in downstream demand and pressure spot steel prices.
- Maintain OVERWEIGHT rating due to attractive valuations and potential ROE improvements.
- Valuation analysis shows current P/B is still below historical levels, indicating upside potential.
Malaysia
-
JCY International (JCYH MK/SELL/RM0.285/Target: RM0.26)
- Ceasing coverage with a SELL call.
- Challenging operating environment expected to persist.
- No catalysts except for a weaker ringgit.
-
Tenaga Nasional (TNB MK/BUY/RM13.86/Target: RM17.70)
- Expected to re-rate due to the government's commitment to IBR and ICPT in tariff reviews.
- Strong earnings visibility and a dividend yield of 5% support the BUY rating.
Singapore
- Jumbo Group (JUMBO SP/HOLD/S$0.52/Target: S$0.53)
- Maintained HOLD rating.
- Tsui Wah opening was successful.
Thailand
- Advanced Info Service (ADVANC TB/BUY/Bt187.50/Target: Bt220.00)
- Expected to show good earnings momentum in 2Q18.
Key Indices Performance
| Index | Prev Close | 1D % | 1W % | 1M % | YTD % |
|---|---|---|---|---|---|
| DJIA | 24283.1 | 0.1 | -1.7 | -1.9 | -1.8 |
| S&P 500 | 2723.1 | 0.2 | -1.4 | 0.1 | 1.8 |
| FTSE 100 | 7537.9 | 0.4 | -0.9 | -2.5 | -1.9 |
| AS30 | 6292.1 | -0.3 | 1.3 | 2.5 | 2.0 |
| CSI 300 | 3531.1 | -0.8 | -2.5 | -7.5 | -12.4 |
| FSSTI | 3280.9 | 0.6 | -0.6 | -6.6 | -3.6 |
| HSCEI | 11118.9 | -0.8 | -3.3 | -7.7 | -5.0 |
| HSI | 28881.4 | -0.3 | -2.0 | -5.6 | -3.5 |
| JCI | 5825.6 | -0.6 | -2.8 | -2.5 | -8.3 |
| KLCI | 1675.9 | -0.1 | -2.3 | -6.8 | -6.7 |
| KOSPI | 2350.9 | -0.3 | 0.5 | -4.5 | -4.7 |
| Nikkei 225 | 22342.0 | 0.0 | 0.3 | -0.5 | -1.9 |
| SET | 1624.0 | 0.1 | -0.9 | -6.7 | -7.4 |
| TWSE | 10742.2 | -0.4 | -1.5 | -1.8 | 0.9 |
| BDI | 1333 | -0.6 | -6.1 | 23.8 | 2.4 |
| CPO (RM/ml) | 2251 | -0.8 | -2.5 | -6.9 | -5.8 |
| Brent Crude (US$/bbl) | 76 | 2.1 | 1.6 | -0.2 | 14.1 |
Top Picks and Sell Recommendations
BUY Recommendations
- Baoshan Iron & Steel (600019 CH): Target price Rmb11.25, potential upside 39.1%
- Gudang Garam (GGRM LJ): Target price Rp83,000, potential upside 17.9%
- PP Persero (PTPP LJ): Target price Rp3,700, potential upside 65.9%
- V.S. Industry (VSI MK): Target price RM2.30, potential upside 54.4%
- OCBC (OCBC SP): Target price S$14.28, potential upside 22.3%
- SingTel (ST SP): Target price S$4.22, potential upside 35.3%
- Siam Cement (SCC TB): Target price Bt610, potential upside 48.8%
SELL Recommendation
- Hartalega (HART MK): Target price RM4.02, potential downside 30.8%
Key Assumptions
| Region | GDP (yoy) | 2017 | 2018F | 2019F |
|---|---|---|---|---|
| US | 2.3 | 2.3 | 2.5 | 2.3 |
| Euro Zone | 2.4 | 2.4 | 2.3 | 1.9 |
| Japan | 1.7 | 1.7 | 1.8 | 1.9 |
| Singapore | 3.6 | 3.6 | 2.8 | 3.0 |
| Malaysia | 5.9 | 5.9 | 5.0 | 5.3 |
| Thailand | 3.9 | 3.9 | 4.2 | 4.2 |
| Indonesia | 5.1 | 5.1 | 5.3 | 5.4 |
| Hong Kong | 3.8 | 3.8 | 3.8 | 2.8 |
| China | 6.9 | 6.9 | 6.4 | 6.2 |
| CPO (RM/mt) | 2,783 | 2,783 | 2,400 | 2,500 |
| Brent (US$/bbl) | 55.00 | 55.00 | 67.00 | 66.50 |
Corporate Events
| Event | Venue | Date |
|---|---|---|
| Analyst Presentation on Singapore and China Banks | Kuala Lumpur | 27 Jun - 28 Jun |
| Roadshow with Jacobson Pharma Corp (2633 HK) | Hong Kong | 28 Jun |
| Luncheon Talk with UOB Thailand (LOB SP) | Bangkok | 29 Jun |
| Roadshow with United Overseas Bank (LOB SP) | Taipei | 2 Jul - 3 Jul |
| Luncheon with Luk Fook Holdings International (590 HK) | Hong Kong | 5 Jul |
| Roadshow with Jacobson Pharma Corp (2633 HK) | Shanghai | 10 Jul |
| Industry 4.0 Conference | Kuala Lumpur | 26 Jul |
Sector Update - Steel (China)
- Strong YTD results due to high steel product spreads.
- Environmental inspections will continue to limit supply in 2H18.
- Rainy season may slow downstream demand and affect spot prices.
- Valuation analysis suggests current P/B is below historical levels, indicating upside potential.
- Maintain OVERWEIGHT rating with potential for re-rating.
Jacobson Pharma (2633 HK)
Company Highlights
- BUY Rating Maintained with a target price of HK$2.69 (+43.8% upside).
- FY18 net profit missed due to high finance expense.
- Expect growth recovery in 1HFY19 due to price hikes and new product launches.
- Introduction of Tenofovir, Quetiapine, and injectable drugs is expected to boost earnings in FY19 and FY20.
Financial Highlights (FY18)
| Metric | Value (HK$m) |
|---|---|
| Revenue | 1,549 |
| Generic drugs revenue | 637 |
| Proprietary medicines revenue | 71 |
| Operating profit | 297 |
| Net profit (rep./act.) | 202 |
| Net profit (adj.) | 202 |
Earnings Revisions
- Revised down FY19/20 earnings forecasts by 12.9% and 12.5% due to lower generic sales and higher finance costs.
Valuation and Recommendation
- Target price of HK$2.69 based on SOTP methodology.
- Valuation includes:
- Proprietary medicine: 13.0x 2019F PE → HK$0.38
- Generic drugs: 14.0x FY19F PE → HK$1.83
- Anti-Her2 biosimilar: DCF-derived value → HK$0.49
- Total: HK$2.69
Key Risks
- Lower-than-expected steel product ASP.
- Higher-than-expected iron ore and coking coal costs.
- Escalating US-China trade war.
- Weakness in domestic property and auto sectors.
Analysts
-
Sandra Huang, Jie Qiong
- Contact: +8621 5404 7225 ext.804
- Email: sandrahuang@uobkayhian.com
-
Alex Jiang, Michael Cheung
- Contact: +852 2236 6749 / +852 2236 6857
- Email: alex.jiang@uobkayhian.com.hk / michael.cheung@uobkayhian.com.hk
Conclusion
The report highlights strong performance expectations for the Chinese steel sector and several stocks in Indonesia, Malaysia, and Singapore, with BUY recommendations for companies showing potential for growth and re-rating. Jacobson Pharma is noted for its recovery in FY19 due to price hikes and new product launches, despite missing FY18 net profit due to high finance costs. The report also outlines key corporate events and risks to consider in the coming months.
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