20170922-大华继显-Regional_Morning_Notes_15页_1mb

Regional Morning Notes Summary

Core Content

This document provides an overview of key financial results and market updates for several companies in China, Indonesia, and Singapore, along with key indices, analyst recommendations, and corporate events. It also includes detailed financials and valuations for New World Development (NWD) and Chandra Asri Petrochemical (TPIA), highlighting their performance, growth prospects, and strategic initiatives.

Main Points

New World Development (17 HK)

• Key Performance: FY17 results were in line with expectations. Net profit declined by 11.4% yoy to HK$7,676m, while underlying profit rose by 26.5% yoy to HK$7,133.3m due to the removal of one-off gains.
• Dividend: Final dividend of HK$0.33 was declared, with full-year dividend at HK$0.46/share, up 4.5% yoy.
• Outlook: Management is cautiously optimistic about the housing market in Hong Kong and China, with no changes to FY18 sales targets.
• Residential Sales: Contracted sales in FY17 reached HK$15.6b, exceeding the target of HK$10b. The group is set to launch several residential projects in FY18, including The Artisan House and The Parkville.
• Landbanking: NWD has a significant landbank in the New Territories, with 69% located in Yuen Long and Tuen Mun. It plans to convert 700,000–1m sqm of farmland into residential properties in FY18.
• Valuation: The stock is trading at a 40% discount to NAV (HK$21.90/share), with a target price of HK$13.14. The upside potential is 19.0%.
• Financials: FY17 turnover was HK$56,629m, down 4.9% yoy. Operating profit fell by 36.2% to HK$10,388m, and net profit declined by 11.4% to HK$7,676m. EBITDA margin dropped to 16.2% from 24.1%.
• Leverage: Gearing ratio improved to 34.8% in FY17, with net debt to equity at 42.8%. Interest cover was 16.4x.
• Capital Allocation: NWD is looking to expand its landbank and maintain its focus on residential development, with a strong presence in Hong Kong and China.

Chandra Asri Petrochemical (TPIA IJ)

• Company Overview: TPIA is the largest petrochemical company in Indonesia, with integrated production from upstream to downstream.
• Capacity Expansion: TPIA is expanding its butadiene plant and polypropylene plant, with both expected to be fully operational in 1H18.
• Utilisation Rates: Utilisation rates have increased significantly, reaching 90–93% in 1Q17 and expected to reach 94–95% in 2017–18.
• Revenue and EBITDA: TPIA aims for 9% yoy revenue growth and 26% EBITDA margin in 2017. It completed a US$378m rights issue in September 2017 to comply with free float regulations.
• Valuation: Based on consensus forecasts, TPIA is trading at an average EV/EBITDA of 11.2x for 2017–18.
• Financials: FY17 revenue was US$632.7m, up 76.6% yoy. EBITDA margin was 26.8%, and net margin was 17.0%.
• Share Price: TPIA's share price rose 15% ytd and 75% yoy, mainly due to lower oil and naphtha prices.
• Market Cap: TPIA has a market cap of Rp83,015m (US$6,253m), with a 3-mth avg daily turnover of US$4.2m.

Key Indices

• DJIA: Previous close: 22359.2, 1D: -0.2%, 1W: 0.7%, 1M: 2.1%, YTD: 13.1%
• S&P 500: Previous close: 2500.6, 1D: -0.3%, 1W: 0.2%, 1M: 2.0%, YTD: 11.7%
• FTSE 100: Previous close: 7263.9, 1D: -0.1%, 1W: -0.4%, 1M: -1.6%, YTD: 1.7%
• AS30: Previous close: 5716.7, 1D: -0.9%, 1W: -1.4%, 1M: -1.5%, YTD: -0.0%
• CSI 300: Previous close: 3837.8, 1D: -0.1%, 1W: 0.2%, 1M: 2.3%, YTD: 15.9%
• FSSTI: Previous close: 3213.8, 1D: -0.1%, 1W: -0.2%, 1M: -1.5%, YTD: 11.6%
• HSCEI: Previous close: 11198.3, 1D: 0.2%, 1W: 0.9%, 1M: 2.2%, YTD: 19.2%
• HSI: Previous close: 28110.3, 1D: -0.1%, 1W: 1.2%, 1M: 2.6%, YTD: 27.8%
• JCI: Previous close: 5906.6, 1D: 0.1%, 1W: 1.0%, 1M: 0.8%, YTD: 11.5%
• KLCI: Previous close: 1771.0, 1D: -0.1%, 1W: -0.6%, 1M: -0.0%, YTD: 7.9%
• KOSPI: Previous close: 2406.5, 1D: -0.2%, 1W: 1.2%, 1M: 1.7%, YTD: 18.8%
• Nikkei 225: Previous close: 20347.5, 1D: 0.2%, 1W: 2.4%, 1M: 5.0%, YTD: 6.5%
• SET: Previous close: 1670.5, 1D: -0.0%, 1W: 0.7%, 1M: 6.2%, YTD: 8.3%
• TWSE: Previous close: 10578.4, 1D: 0.6%, 1W: 0.2%, 1M: 1.8%, YTD: 14.3%
• BDI: Previous close: 1449, 1D: 2.4%, 1W: 6.5%, 1M: 14.5%, YTD: 50.8%
• CPO (RM/mt): Previous close: 2785, 1D: -1.3%, 1W: -2.0%, 1M: 5.5%, YTD: -12.9%
• Brent Crude (US$/bbl): Previous close: 56, 1D: 0.2%, 1W: 1.7%, 1M: 9.2%, YTD: -0.7%

Corporate Events

• Roadshow with China Yongda: 25–29 Sep, Canada/US
• Roadshow with Xin Point Holdings: 27 Sep, Huizhou
• Roadshow with BBI Life Science Corp: 27–28 Sep, Hong Kong
• Conference Call with Thai Union Group: 29 Sep, Bangkok
• Asian Gems Conference 2017: 10–11 Oct, Singapore
• UOB Kay Hian Annual Regional Strategy Conference: 13 Nov, Kuala Lumpur

Analysts

• New World Development: Vikrant Pandey (vikrant@uobkayhian.com, +65 6590 6623)
• Chandra Asri Petrochemical: Andre Suntono (andresuntono@uobkayhian.com, +6221 2993 3979)

Summary of Key Financials

Summary of Key Risks

• Higher oil and naphtha prices could negatively impact margins.
• Low utilisation rates due to maintenance could affect profitability.
• Market regulation in China may continue to influence housing development strategies.