20150831-大华继显-Regional_Morning_Notes_33页_1mb

报告摘要

Regional Morning Notes Summary - 31 August 2015

Core Content Overview

This summary provides an analysis of stock market performance and company results for key firms in China, Singapore, and Thailand, as well as highlights key financial metrics and investment recommendations for Air China (753 HK) and Beijing Capital International Airport (694 HK). It also includes key assumptions on GDP growth and corporate events for the region.

Main Points

China

Air China (753 HK):
- 1H15: Net profit beat guidance (Rmb3.8b-4.0b) and showed strong cost control.
- Revenue increased by 3.9% yoy, driven by higher traffic growth despite yield declines.
- Operating profit rose 183% yoy due to a 39% decrease in fuel costs.
- Plans to hedge jet fuel and Brent, which can indirectly hedge US dollar-denominated debt.
- Target price reduced to HK$10.40 due to expected 4% RMB depreciation, maintaining a BUY rating.
- Earnings revisions for 2015-2017 are down by 16-24% due to the depreciation assumption.
- Valuation remains at 1.5x 2016 book value.
Beijing Capital International Airport (694 HK):
- 1H15: Earnings were in line with expectations, slightly below due to higher concession fees.
- Plans to build a fourth runway, funded by parent company, to support long-term aeronautical growth.
- Non-aeronautical revenue grew 20.6% yoy, driven by a 31% increase in concession revenue.
- Maintain BUY rating with a target price of HK$11.40.
- Earnings revisions for 2015 and 2016 are adjusted downward by 5.4% and 4.3%, respectively, due to concession fee assumptions.

Singapore

Olam International (OLAM SP):
- Upgraded to BUY due to positive outlook on Mitsubishi Corp's 20% stake purchase at a premium.
- The stake is seen as a confidence boost and provides a unique advantage in processing and consumer bases.

Thailand

Bumrungrad Hospital (BH TB):
- Upgrade to HOLD as expansion plans are already priced in.
- Earnings growth and capacity expansion are expected, but the good news is already reflected in the market.

Key Indices and Market Trends

Index	Previous Close	1D %	1W %	1M %	YTD %
DJIA	16643.0	(0.1)	1.1	(5.9)	(6.6)
S&P 500	1988.9	0.1	0.9	(5.5)	(3.4)
FTSE 100	6247.9	0.9	1.0	(6.7)	(4.8)
AS30	5274.7	0.6	1.0	(7.2)	(2.1)
CSI 300	3342.3	4.3	(6.9)	(12.4)	(5.4)
FSSTI	2955.9	0.4	(0.5)	(7.7)	(12.2)
HSCEI	9750.7	(1.1)	(4.4)	(12.4)	(18.6)
HSI	21612.4	(1.0)	(3.6)	(12.3)	(8.4)
JCI	4446.2	0.4	2.5	(7.4)	(14.9)
KLCI	1612.7	0.7	2.4	(6.4)	(8.4)
KOSPI	1937.7	1.6	3.3	(4.6)	1.2
Nikkei 225	19136.3	3.0	(1.5)	(7.0)	9.7
SET	1365.9	0.6	0.0	(5.2)	(8.8)
TWSE	8019.2	2.5	3.0	(7.5)	(13.8)
BDI	903	(0.2)	(9.2)	(20.2)	15.5
CPO (RM/mt)	1806	(0.3)	(5.8)	(15.8)	(21.4)
Brent Crude (US$/bbl)	49	(1.3)	15.7	(5.4)	(13.8)

Top Picks

BUY

Beijing Capital International Airport (694 HK): Target price HK$11.40, upside +36.7%
ICBC (1398 HK): Target price HK$7.60, upside +68.1%
Bank BJB (BJBR IJ): Target price HK$980.00, upside +41.0%
DiGi.Com (DIGI MK): Target price HK$6.30, upside +20.5%
Maybank (MAY MK): Target price HK$10.00, upside +14.2%
CapitaLand (CAPL SP): Target price HK$4.08, upside +43.2%
DBS (DBS SP): Target price HK$23.75, upside +31.9%
Kasikornbank (KBANK TB): Target price HK$232.00, upside +30.3%
PTT (PTT TB): Target price HK$410.00, upside +52.4%

SELL

SIA Engineering (SIE SP): Target price HK$3.00, downside -15.5%
UMWH: Target price HK$7.00, downside -17.6%

Key Assumptions

Region	GDP (% yoy) 2013	GDP (% yoy) 2014	GDP (% yoy) 2015F
US	2.2	2.4	2.9
Euro Zone	-0.5	0.9	1.3
Japan	1.6	-0.1	1.0
Singapore	4.4	2.9	2.9
Malaysia	4.7	6.0	5.0
Thailand	2.8	0.9	2.7
Indonesia	5.6	5.0	5.0
Hong Kong	2.9	3.5	3.7
China	7.7	7.2	7.0

Item	2014 Average	2015F	2016F
Brent (US$/bbl)	99.45	61	72
CPO (US$/mt)	722	765	788

Corporate Events

Event	Venue	Dates
China Traditional Chinese Medicine Roadshow	Taipei	31 Aug
The United Laboratories Roadshow	Shanghai	1 Sep - 2 Sep
Kuantan Port Site Visit	Malaysia	3 Sep
Phoenix Healthcare Group Roadshow	Shanghai	8 Sep - 9 Sep
Evergrande Real Estate Roadshow	Singapore	11 Sep
KWG Property Roadshow	Shanghai	15 Sep
Asian Gems Conference	Singapore	12 Oct - 13 Oct

Valuation Metrics (Air China)

Metric	2014	2015F	2016F	2017F
EBITDA margin (%)	17.6	25.4	21.3	20.8
Pre-tax margin (%)	4.8	10.1	9.6	10.3
Net margin (%)	3.6	7.2	7.1	7.7
ROA (%)	1.8	3.7	3.9	4.6
ROE (%)	7.1	12.4	11.3	12.4
Net debt/(cash) to equity (%)	193.9	118.8	102.7	83.8
Interest cover (x)	6.9	10.6	11.4	13.1

Financial Highlights (Air China)

Net Profit: Increased by 721.1% yoy to Rmb4.191b.
Net Profit (excl forex): Rmb4.314b, reflecting effective cost control.
Operating Profit: Surged 927% yoy to Rmb5.749b, mainly due to fuel cost savings.
EBITDA: Rose 927.0% yoy to Rmb11,020m.
EPS (Fen): Increased to 10.2, with a target of 83.3 for 2015F.
Dividend Yield: Increased to 1.1%.
Net Debt/Equity: Reduced from 193.9% to 118.8% due to improved performance and debt management.

Summary of Key Insights

Air China and Beijing Capital International Airport both delivered strong results in 1H15.
Air China's hedging strategy for jet fuel and Brent is a key differentiator, reducing exposure to USD debt.
Beijing Capital International Airport's runway expansion and non-aeronautical growth are positive developments.
Market indices across the region showed mixed performance, with some seeing significant gains and others declines.
Investment recommendations were made for a mix of BUY and SELL, depending on the company's performance and outlook.
The report highlights the importance of corporate events and economic indicators in shaping investment decisions.

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