20140718-大华继显-Regional_Morning_Notes_37页_1mb

Regional Morning Notes Summary

Core Content Overview

This document is a summary of regional market insights and company performance analysis for the week of 18 July 2014, focusing on Hong Kong, Indonesia, Malaysia, and Thailand. It includes company results, sector updates, key indices, top picks, corporate events, and financial metrics such as valuations and leverage.

Key Regions & Sectors

Hong Kong

• Sands China (1928 HK):
  • 2Q14 Performance: EBITDA rose 21.9% yoy, but below expectations due to staff bonuses and weak VIP segment.
  • Outlook: Strong summer season may lead to a rebound in 3Q14, supported by underutilized hotel inventory.
  • Recommendation: Maintain BUY with a target price of HK$63.90.
  • Financials: EBITDA margin improved to 34.0%, net profit (adj.) rose to HK$3,193.6m in 2Q14.
  • Valuation: Price-to-earnings (PE) ratio is 26.2x, with a strong upside potential of +14.6%.

Indonesia

• Banking Sector:
  • 3Q14 Outlook: Better outlook on loan growth due to resilient domestic economy and post-election optimism.
  • Loan Growth Forecast: Expected to grow 5.7% qoq and 12.6% ytd in 3Q14, with working capital, mortgages, and trading as top loan segments.
  • Top Picks: BMRI, BBRI, and BBNI.
  • Loan Disbursement: Banks were more selective, with a 12.9% rejection rate in 2Q14.
  • LTV Regulation: Lowered to 70% for housing size over 70 sqm, affecting mortgage lending.

Malaysia

• Bursa Malaysia (BURSA MK):
  • 2Q14 Performance: Revenue rose 0.3% qoq, but net profit dropped 15% yoy due to high base from GE13.
  • Special DPS: Declared a 20 sen special net DPS.
  • Recommendation: Maintain HOLD with a target price of RM8.25.
• CapitaMalls Malaysia Trust (CMMT MK):
  • 2Q14 Performance: Results within expectations.
  • Recommendation: BUY with a target price of RM1.61.
• DiGi.Com (DIGI MK):
  • 2Q14 Performance: Another good quarter.
  • Recommendation: BUY with a target price of RM5.95.

Thailand

• Hotel Sector:
  • Political Impact: Negative impact of political disturbances priced in.
  • Valuation Update: Valuation rolled over to 2015, with ERW upgraded to BUY.
  • Maintain OVERWEIGHT.
• Banking Sector:
  • Bangkok Bank (BBL TB):
    • 2Q14 Performance: Net profit down 12% yoy due to weak top-line and fee income.
    • Recommendation: BUY with a target price of Bt237.00.
  • Kasikorn Bank (KBANK TB):
    • 2Q14 Performance: Reasonably resilient earnings supported by NIM and fee income growth.
    • Recommendation: BUY with a target price of Bt225.00.
  • Siam Commercial Bank (SCB TB):
    • 2Q14 Performance: Strong results due to NIM improvement and tight opex.
    • Recommendation: BUY with a target price of Bt200.00.

Key Indices

• DJIA: Previous close: 16976.8, 1D: -0.9%, 1W: +1.0%, 1M: +1.0%, YTD: +2.4%.
• S&P 500: Previous close: 1958.1, 1D: -1.2%, 1W: -0.3%, 1M: +0.8%, YTD: +5.9%.
• FTSE 100: Previous close: 6738.3, 1D: -0.7%, 1W: +1.0%, 1M: -0.4%, YTD: -0.2%.
• AS30: Previous close: 5509.9, 1D: +0.1%, 1W: +1.0%, 1M: +2.7%, YTD: +2.9%.
• CSI 300: Previous close: 2157.1, 1D: -0.6%, 1W: +0.7%, 1M: -0.1%, YTD: -7.4%.
• FSSTI: Previous close: 3306.9, 1D: +0.1%, 1W: +1.1%, 1M: +0.9%, YTD: +4.4%.
• HSCEI: Previous close: 10467.1, 1D: -0.1%, 1W: +1.0%, 1M: +0.2%, YTD: -3.2%.
• HSI: Previous close: 23520.9, 1D: 0.0%, 1W: +1.2%, 1M: +1.5%, YTD: +0.9%.
• JCI: Previous close: 1883.1, 1D: -0.2%, 1W: -0.5%, 1M: +0.3%, YTD: +0.9%.
• KLCI: Previous close: 1883.1, 1D: -0.2%, 1W: -0.5%, 1M: +0.3%, YTD: +0.9%.
• KOSPI: Previous close: 2020.9, 1D: +0.4%, 1W: +0.9%, 1M: +1.6%, YTD: +0.5%.
• Nikkei 225: Previous close: 15370.3, 1D: -0.1%, 1W: +1.0%, 1M: +1.7%, YTD: -5.7%.
• SET: Previous close: 1535.7, 1D: +0.3%, 1W: +1.8%, 1M: +5.8%, YTD: +18.2%.
• TWSE: Previous close: 9408.2, 1D: -0.8%, 1W: -1.6%, 1M: +1.4%, YTD: +9.3%.
• BDI: Previous close: 738, 1D: -2.3%, 1W: -11.7%, 1M: -14.0%, YTD: -67.6%.
• CPO: Previous close: 2384, 1D: +0.2%, 1W: -2.4%, 1M: -2.2%, YTD: -7.4%.
• Nymex Crude: Previous close: 104, 1D: +0.7%, 1W: +3.0%, 1M: -2.0%, YTD: +5.5%.

Top Picks (BUY)

Key Assumptions

Key Financials (Sands China)

Corporate Events

Earnings & Risk Outlook

• Sands China's 2Q14 EBITDA growth of 21.9% yoy was below expectations due to bonus accruals and poor luck in the premium mass segment.
• VIP revenue declined 16.5% yoy, but mass gaming performance improved due to better yields and increased table count.
• Ramp-up of Dragon Palace is expected to drive growth in the next 2-3 quarters.
• New projects (Parisian, St. Regis) are on track, and the group is likely to increase its hotel room inventory to 12,652 rooms by late 2015.

Conclusion

The report highlights the resilience and growth potential of key companies and sectors in the region. Sands China is seen as a top pick due to its balanced business mix and strong position in the gaming and hotel industry. In Indonesia, the banking sector is expected to benefit from improved loan growth and a resilient economy. Malaysia's Bursa and Thailand's banking and hotel sectors also show promising developments. Investors are advised to maintain their positions and look for opportunities in the medium- to long-term growth prospects.