20170727-大华继显-Regional_Morning_Notes_21页_1mb

报告摘要

Regional Morning Notes Summary - 27 July 2017

Core Content Overview

This document provides a summary of regional market insights and stock analysis for China, Indonesia, Malaysia, and Singapore. It highlights key financial data, sector performance, earnings forecasts, and corporate events. The focus is on consumer discretionary and construction sectors, with a particular emphasis on Waskita Beton Precast (WSBP) in Indonesia and Anta Sports and China Mengniu in China.

Key Indices Performance

Index	Previous Close	1 Day %	1 Week %	1 Month %	YTD %
DJIA	21711.0	0.5	0.3	1.9	9.9
S&P 500	2477.8	0.0	0.2	2.4	10.7
FTSE 100	7452.3	0.2	0.3	0.2	4.3
AS30	5823.3	0.8	0.8	1.2	1.8
CSI 300	3705.4	-0.4	-0.7	0.8	11.9
FSSTI	3336.7	0.3	0.4	3.6	15.8
HSCEI	10831.5	0.5	-0.3	3.2	15.3
HSI	26941.0	0.3	1.0	4.3	22.5
JCI	5800.2	-0.2	-0.1	-0.5	9.5
KLCI	1766.0	0.2	0.5	-0.8	7.6
KOSPI	2434.5	-0.2	0.2	1.8	20.1
Nikkei 225	20050.2	0.5	0.1	-0.9	4.9
SET	1583.2	0.1	0.5	-0.2	2.6
TWSE	10419.1	-0.4	-0.8	-0.9	12.6
BDI	980	0.3	3.4	10.9	2.0
CPO (RM/ml)	2605	1.1	0.1	-0.6	-18.6
Brent Crude	51	1.5	2.6	11.2	-10.3

Top Picks

BUY

Alibaba (BABA US): Current price $155.79, Target $173.00, Potential upside 11.0%
Beijing Ent. Water (371 HK): Current price HK$6.53, Target HK$7.60, Potential upside 16.4%
Ace Hardware (ACES IJ): Current price Rp1,115.00, Target Rp1,300.00, Potential upside 16.6%
Waskita Karya (WSKT IJ): Current price Rp2,230.00, Target Rp3,350.00, Potential upside 50.2%
V.S. Industrv (VSI MK): Current price RM2.17, Target RM2.40, Potential upside 10.6%
OCBC (OCBC SP): Current price S$11.25, Target S$13.00, Potential upside 15.6%
Siam Cement (SCC TB): Current price Bt500.00, Target Bt600.00, Potential upside 20.0%

SELL

Great Wall Motor (2333 HK): Current price HK$9.78, Target HK$5.50, Potential downside 43.8%
Hartalega (HART MK): Current price HK$7.10, Target HK$4.07, Potential downside 42.7%

Key Assumptions

Country/Region	2016 GDP % yoy	2017F GDP % yoy	2018F GDP % yoy
US	1.6	2.5	2.5
Euro Zone	1.7	1.8	1.6
Japan	1.0	0.9	1.2
Singapore	2.0	2.4	2.5
Malaysia	4.2	5.0	4.9
Thailand	3.2	3.3	3.3
Indonesia	5.0	5.2	5.5
Hong Kong	1.9	2.0	2.0
China	6.7	6.6	6.3
Brent (Average)	45	55	58
CPO	2,653	2,600	2,400

Sector Update - China

Consumer

Consumer discretionary has outperformed consumer staples by 41% ytd.
Top picks: Anta Sports (2020 HK/BUY) and China Mengniu (2219 HK/BUY).
Key companies:
- China Mengniu: Revenue growth of 7% yoy, GPM of 33.5%, net profit down 1% yoy.
- Anta: Revenue growth of 18% yoy, net profit growth of 18% yoy, strong 2Q17 performance.
- Li Ning: Expected to have weak 1H17 results due to sales cannibalisation.
- Xtep: Expected to see yoy declines in sales and earnings due to high base and higher A&P costs.

Cinema

Market weight; Wanda Film (002739 CH) remains a preferred pick.
IMAX China (1970 HK): Expected to see an 8% yoy decline in box office, which pressures margins.
Government restrictions on Wanda's M&A and fundraising may affect Wanda Film's stock performance.

Corporate Events

Roadshow with Jacobson Pharma: Shanghai, 28 Jul
Roadshow with Tonly Electronics Holdings: Hong Kong, 1 Aug
Visit to Sarawak Corridor of Renewable Energy: Sarawak, 1-3 Aug
Luncheon with Plover Bay Technologies: Hong Kong, 3 Aug
Luncheon with Singapore Post: Singapore, 4 Aug
Analyst Marketing on Singapore Small & Mid Caps: Malaysia, 14-15 Aug
Analyst Marketing on Greater China Strategy: Singapore, 16 Aug; Malaysia, 17 Aug
Analyst Presentation on Malaysia Technology Sector: Taipei, 22-23 Aug
Analyst Marketing on Semiconductor: Taipei, 24-25 Aug
Roadshow with Globetronics Technology: Taipei, 24-25 Aug
Roadshow with Top Glove Corporation: US/Canada, 5-12 Sep
Analyst Marketing on Singapore Technologies Engineering Ltd: Canada, 9-11 Oct
Asian Gems Conference 2017: Singapore, 10-11 Oct

Stock Impact

China Mengniu (2319 HK): Strong growth in core profit, potential upside to earnings estimates.
Hengan (1044 HK): Expected to deliver disappointing 1H17 results due to poor sales and recent sales channel reform.
F&B: Unexciting results expected due to flattish top-line and rising raw material costs.
Anta (2020 HK): Expected to deliver better-than-expected 1H17 results with strong 2Q17 sales and product mix upgrades.
Wanda Film (002739 CH): Strong fundamentals but affected by government restrictions.
IMAX China (1970 HK): Suffering from declining box office and Wanda incident impact.

Valuation Highlights

Chinese Liquor: Trading at 26x 2017F PE, lower PEG compared to global peers.
Home Appliances: Still trading at 30% discount to staples, with an average PE of 26.1x for 2017F.
Waskita Beton Precast (WSBP IJ): Trading at 11.0x 2017F PE, significantly discounted compared to peers at 37%.
WSBP's financials: Revenue of Rp2.67t (+42.8% yoy), net income of Rp436b (+28% yoy).
WSBP's target: Achieve 64% revenue and 78% net profit growth in 2017.
Net cash flow: Expected to turn positive in 2018 with payments from major toll road projects.
Share buyback: Rp1t budget over 18 months to boost sentiment and stabilize share price.

Risks

WSBP: Expected to face slower orderbook growth in 2018 due to WSKT's reduced new contract target (Rp60t vs. Rp70t in 2016).
WSBP's new projects: Limited visibility for 2017F due to focus on existing projects.