20150429-杰富瑞-Today_At_A_Glance_21页_454kb_454kb

Asia Research Summary

Core Content Overview

This document provides an analysis of several Asian companies, focusing on their recent financial performance, market outlook, and investment ratings. The key areas covered include the China property sector, automotive and auto parts industry, financial institutions, and specific Japanese companies. The summary highlights the performance of each company, key takeaways from their earnings, and the analysts' recommendations.

Key Takeaways

China Property Sector

• Company: Anhui Conch Cement Co. (914 HK, 600585 CH)
• Rating: HOLD
• Price Target: HK$33.00
• Key Points:
  • 1Q15 earnings were down 31% YoY.
  • Weak seasonal recovery in cement prices is expected to lead to a 30% YoY decline in 2Q15 earnings.
  • Share price has rallied 20% in a month, but the current valuation (13x 2016E PE) suggests the potential cement price rebound has already been priced in.
  • Analysts are selective due to uneven recovery across cities and developers.

China Telecom Corp Ltd. (728 HK, CHA)

• Rating: HOLD
• Price Target: HK$6.00 (for 914 HK), $77.42 (for CHA)
• Key Points:
  • 1Q15 service revenue was down 0.4% YoY, and net profit down 9% YoY due to VAT reform.
  • 4G subs net adds are on track from 2G/3G migration.
  • The stock is trading close to historical peaks, leading to a downgrade to Hold.

Digital China Holdings Ltd. (861 HK)

• Rating: HOLD
• Price Target: HK$13.00
• Key Points:
  • Earnings were down due to structural challenges.
  • The market has overlooked the decline in new infrastructure contracts.
  • Analysts raise PT to HK$13.00 but maintain a HOLD rating due to 5% upside.

Shenzhen Investment Ltd. (604 HK)

• Rating: BUY
• Price Target: HK$4.90
• Key Points:
  • Strong potential to capitalize on the growth plan in Shenzhen.
  • Land shortage is expected to benefit SZI.
  • Analysts maintain BUY with a revised PT.

Haitong Securities (6837 HK)

• Rating: BUY
• Price Target: HK$28.00
• Key Points:
  • 1Q15 earnings surged 239% YoY, driven by rising brokerage and investment income.
  • Strong market sentiment is expected to continue supporting earnings.
  • Analysts maintain BUY with a revised PT.

China Galaxy Securities (6881 HK)

• Rating: BUY
• Price Target: HK$14.00
• Key Points:
  • Announced a HK$24bn H-share placement, with a placing price at a discount.
  • Analysts maintain BUY with a PT of HK$14.00.

China Life Insurance (2628 HK)

• Rating: HOLD
• Price Target: HK$37.50
• Key Points:
  • 1Q15 earnings showed strong investment results, with a 70% YoY increase.
  • However, the surrender rate spiked to 13% (annualized), affecting profitability.
  • Analysts maintain HOLD with a PT of HK$37.50.

TAL Education (XRS)

• Rating: BUY
• Price Target: $41.50
• Key Points:
  • 4Q15 results beat the Street.
  • Robust topline growth from a 44% increase in enrollment.
  • 25% capacity expansion in FY16 is expected to reduce margin impact.
  • Analysts reiterate BUY with a revised PT.

Financials Overview

• Key Points:
  • MUFG reported net profit above ¥1tr for the first time in Japanese banking history.
  • Daiwa, Tokai Tokyo, and JPX previewed results, with Daiwa showing strong performance.
  • Mizuho is buying additional loans from RBS.
  • Union Bank reported a QoQ decline.

Japanese Companies

Daiwa Securities Group (8601 JP)

• Rating: BUY
• Price Target: ¥1,130
• Key Points:
  • FY3/15 results beat estimates and consensus.
  • ROE was 12.7%.
  • Analysts maintain BUY with a PT of ¥1,130.

TS Tech (7313 JP)

• Rating: BUY
• Price Target: ¥3,800
• Key Points:
  • 4Q results were in-line with estimates.
  • FY3/16 guidance showed strong OP growth.
  • Analysts reiterate BUY.

Honda Motor (7267 JP, HMC)

• Rating: BUY
• Price Target: ¥4,300 (JP), $39.18 (US)
• Key Points:
  • 4Q results were negative due to uncertainty in Takata recall costs.
  • Despite conservative guidance, the stock is seen as an attractive Buy opportunity.
  • Analysts reiterate BUY with a PT.

Aisin Seiki (7259 JP)

• Rating: HOLD
• Price Target: ¥4,400
• Key Points:
  • FY3/16 guidance showed strong OP growth.
  • The company admits a risk in production increase and cost controls.
  • Analysts maintain HOLD.

Denso (6902 JP)

• Rating: BUY
• Price Target: ¥6,300
• Key Points:
  • Raised shareholder return to above 40% total return ratio.
  • Expected earnings recovery from Toyota's new Prius Hybrid launch.
  • Analysts reiterate BUY.

Nippon Steel & Sumitomo Metal (5401 JP, NSSMY)

• Rating: HOLD
• Price Target: ¥300 (JP), $28.00 (US)
• Key Points:
  • Cutting production to balance steel demand and supply.
  • Analysts maintain HOLD with a PT.

Kobe Steel (5406 JP, KBSTY)

• Rating: BUY
• Price Target: ¥270 (JP), $11.25 (US)
• Key Points:
  • FY3/16 guidance included a contingency buffer and conservative forecasts.
  • Analysts reiterate BUY with a PT.

Nissin Steel (5413 JP)

• Rating: BUY
• Price Target: ¥2,000
• Key Points:
  • FY3/15 earnings were in-line with guidance.
  • Expected earnings growth in FY3/16-17.
  • Analysts reiterate BUY.

Sharp (6753 JP)

• Rating: UNDERPERFORM
• Price Target: ¥230
• Key Points:
  • Net losses expected for FY3/15 and FY3/16.
  • Book value is expected to decline to record lows.
  • Analysts maintain UNDERPERFORM.

SCSK (9719 JP)

• Rating: BUY
• Price Target: ¥4,400
• Key Points:
  • Disclosed a 5-year mid-term grand scale plan.
  • Analysts raise PT to ¥4,400 and maintain BUY.

MonotaRO (3064 JP)

• Rating: HOLD
• Price Target: ¥4,000
• Key Points:
  • Strong Q1 performance, with OP 15.4% above estimates.
  • New catalogs with price adjustments corrected yen depreciation impact.
  • Analysts maintain HOLD.

Otsuka (4768 JP)

• Rating: BUY
• Price Target: ¥6,100
• Key Points:
  • Q1 earnings showed no surprises.
  • B2B sales were positive despite consumption tax hike.
  • Analysts maintain BUY.

ASKUL Corp. (2678 JP)

• Rating: BUY
• Price Target: ¥3,150
• Key Points:
  • April sales showed a positive trend.
  • B2B sales were up 4.7% YoY.
  • Analysts maintain BUY.

Okuma Corp. (6103 JP)

• Rating: HOLD
• Price Target: ¥1,000
• Key Points:
  • FY3/15 results were in-line with guidance and consensus.
  • Incremental margins are expected to improve in FY3/16.
  • Analysts maintain HOLD.

IHI (7013 JP)

• Rating: HOLD
• Price Target: ¥530
• Key Points:
  • FY3/15 guidance was revised downward due to losses from EAS projects.
  • Negative factors from Brazil drillship project are now fully factored in.
  • Analysts maintain HOLD.

Japan Exchange Group (8697 JP)

• Rating: Not specified
• Key Points:
  • Mentioned in the context of financial updates, but no detailed analysis provided.

Summary of Investment Ratings

Company	Rating	Price Target
Anhui Conch Cement Co.	HOLD	HK$33.00
China Telecom Corp Ltd.	HOLD	HK$6.00 / $77.42
Digital China	HOLD	HK$13.00
Shenzhen Investment Ltd.	BUY	HK$4.90
Haitong Securities	BUY	HK$28.00
China Galaxy Securities	BUY	HK$14.00
China Life Insurance	HOLD	HK$37.50
TAL Education	BUY	$41.50
Daiwa Securities Group	BUY	¥1,130
TS Tech	BUY	¥3,800
Honda Motor	BUY	¥4,300 / $39.18
SCSK	BUY	¥4,400
MonotaRO	HOLD	¥4,000
Otsuka	BUY	¥6,100
ASKUL Corp.	BUY	¥3,150
Okuma Corp.	HOLD	¥1,000
IHI	HOLD	¥530

Conclusion

The document outlines a mix of investment ratings for Asian companies, with a focus on the China property and financial sectors, and several Japanese firms. While some companies like Shenzhen Investment Ltd. and TAL Education are recommended as Buys due to strong performance and growth potential, others like Anhui Conch Cement and China Telecom are downgraded to Hold due to weak earnings and overvaluation. The analysis also highlights the impact of macroeconomic factors, sector-specific challenges, and corporate strategies on stock performance.