20150806-大华继显-Regiona_l_Morning_Notes_30页_1mb

Regional Morning Notes Summary

Date: Thursday, 06 August 2015

Core Content Overview

This document provides a summary of stock performance and analysis for several companies in Asia, focusing on China, Indonesia, Malaysia, and Singapore. It includes results, key financial metrics, stock data, and recommendations for each region.

Key Regions and Companies

China

• Company: MGM China (2282 HK)
  • 2Q15 Results: In line with expectations; better revenue mix and cost control led to improved EBITDA margin.
  • Dividend Policy: Maintained at 35% with an interim dividend of HK$0.156/share.
  • Valuation: Target price raised to HK$18.00, based on SOTP valuation, implying 11x 2015F EV/EBITDA.
  • Growth Drivers: Table yield enhancement and cost control will be key for near-term growth. Long-term growth will depend on the opening of MGM Cotai in 4Q16.
  • Financials: EBITDA margin improved to 26.6%, net profit decreased by 34.6% yoy, but slightly beat expectations. Net debt-to-equity increased significantly due to Capex.
  • Stock Data: Market cap of HK$61,560 million, shares issued of 3,800 million, and a 3-month average daily turnover of US$14 million.
  • Recommendation: Maintain BUY with an upside of +11.1%.

Indonesia

• Company: Bank Mandiri (BMRI IJ)
  • 1H15 Results: In-line with expectations; little exposure to micro loans.
  • Valuation: Current P/B of 1.9x is considered deep value. Upgrade to BUY with a target price of Rp12,400.
  • Financials: Net profit increased 3.5% yoy to Rp9,924 billion, NIM expanded to 5.8% but declined 10bp yoy. NPL increased to 2.43% due to small corporates and commercial segments.
  • Loan Growth: Target lowered to 12-14% yoy from 15-17% previously.
  • Stock Data: Market cap of Rp228,666.7 billion, shares issued of 23,333.3 million, and a 3-month average daily turnover of US$20.4 million.
  • Recommendation: Upgrade to BUY with an upside of +26.5%.

Malaysia

• Company: VS Industry (VSI MK)
  • 2Q15 Results: Positive feedback from recent roadshow with senior management.
  • Valuation: Target price of RM7.10, current price of RM6.01.
  • Stock Data: GICS sector: Consumer Discretionary, Bloomberg ticker: VSI MK, shares issued of 1,000 million.
  • Recommendation: Maintain BUY.

Singapore

• Company: CapitaLand (CAPL SP)

  • 2Q15 Results: Fair value gains, fair game.
  • Valuation: Target price of S$4.08, current price of S$3.17.
  • Stock Data: GICS sector: Real Estate, Bloomberg ticker: CAPL SP, shares issued of 2,000 million.
  • Recommendation: Maintain BUY.

• Company: StarHub (STH SP)

  • 2Q15 Results: Less aggressive on customer acquisitions.
  • Valuation: Target price of S$3.57, current price of S$3.75.
  • Stock Data: GICS sector: Communication Services, Bloomberg ticker: STH SP, shares issued of 1,200 million.
  • Recommendation: SELL.

• Company: Venture Corporation (VMS SP)

  • 2Q15 Results: Pick-up after a slow start.
  • Valuation: Target price of S$9.00, current price of S$8.03.
  • Stock Data: GICS sector: Consumer Discretionary, Bloomberg ticker: VMS SP, shares issued of 500 million.
  • Recommendation: Maintain BUY.

• Company: Wilmar International (WIL SP)

  • 2Q15 Results: Net profit of US$194 million, below expectations, due to weaker performance in tropical oils and oilseeds & grains divisions.
  • Valuation: Target price of S$3.65, current price of S$3.17.
  • Stock Data: GICS sector: Consumer Staples, Bloomberg ticker: WIL SP, shares issued of 1,000 million.
  • Recommendation: Maintain BUY.

Key Indices Performance

Key Assumptions

Corporate Events

• Halcyon Breakfast: Singapore, 6 Aug
• QL Resources Berhad Roadshow: Taipei, 6-7 Aug
• Agensi Inovasi Malaysia Luncheon: Kuala Lumpur, 12 Aug
• Phoenix Healthcare Group Roadshow: Singapore, 17-18 Aug
• Yoma Strategic Group Meeting: Singapore, 18 Aug
• Overseas Education New Campus Site Visit: Singapore, 28 Aug

Summary of Key Financial Metrics and Performance

MGM China

• EBITDA Margin: Improved to 26.6% in 2Q15.
• VIP GGR: Decreased 20.7% qoq to HK$2.9 billion.
• Mass GGR: Declined 4.6% qoq to HK$1.9 billion.
• Slots GGR: Increased 4.4% qoq to HK$427 million.
• Dividend Yield: Expected to be over 4% in the next three years.
• Valuation: EV/EBITDA of 11x 2015F, with upside of +11.1%.

Bank Mandiri

• Net Profit: Increased 3.5% yoy to Rp9,924 billion.
• NPL: Increased to 2.43% in 1H15, with a significant rise in cost of credit.
• Loan Growth: Target lowered to 12-14% yoy.
• Valuation: P/B of 1.9x, with upside of +26.5%.

Analysts

• China: Vincent Khoo, CFA (vincentkhoo@uobkayhian.com)
• Indonesia: Indonesia Research Team (stevanusjuanda@uobkayhian.com)

Conclusion

The document outlines the performance and outlook for several companies in different Asian markets, with a focus on financial results, valuation metrics, and growth drivers. MGM China and Bank Mandiri are highlighted as top picks with BUY recommendations, while StarHub is advised to SELL. The analysis also includes key financial indicators, corporate events, and market assumptions, providing a comprehensive view of the regional investment landscape.