20150120-大华继显-Regional_Morning_Notes_29页_1mb

报告摘要

Regional Morning Notes Summary

Core Content

This document provides an analysis of key market updates and investment recommendations for several Asian markets, including China, Indonesia, Malaysia, and Singapore, as of Tuesday, 20 January 2015. It includes company results, stock performance, financial metrics, and sector updates.

Main Points

China

Zhongsheng Group Holdings (881 HK):
- The stock price fell by 30% over six months due to concerns about weakened margins and spare parts price cuts.
- EPS forecasts for 2014–2016 were cut by 10–16%.
- Despite the price cuts, the stock is considered a buy due to its 9.3x 2015F PE (2 SD below historical mean) and promising after-market and used car sales businesses.
- Target price cut to HK$9.00 from HK$10.50, with an upside of 17.1%.
- Used car sales are expected to grow rapidly, with a gross margin of 5–10% vs 3–4% for new car sales.
- Auto finance is also a key growth driver, contributing to commission income growth of 25% / 20% / 18% for 2014–2016.
- Dealers are gaining stronger bargaining power against OEMs, which may help stabilize margins in the long run.

Indonesia

Cement Sector:
- Jokowi unexpectedly cut cement prices by Rp3,000 per 50-kg-bag, which may be offset by higher sales volumes.
- Indocement (INTP) remains the top pick due to:
  - Minimal earnings impact from lower selling prices.
  - Superior margins to buffer price cuts.
  - A strong balance sheet for capacity expansion.
- Cement prices are expected to remain flattish in 2015, with sales volume growth of 7–8%.
- Capacity constraints may push ASP up again in 2016, especially with infrastructure projects reaching peak levels.
- Indocement is expected to benefit most from infrastructure growth, with 4.4mt capacity expansion planned.

Key Financials and Metrics

Zhongsheng Group Holdings (881 HK)

EPS (fully diluted): 39.1 (2013), 48.7 (2014F), 59.3 (2015F), 70.5 (2016F).
PE (x): 14.6 (2013), 11.4 (2014F), 9.2 (2015F), 7.8 (2016F).
Net profit (Rmbm): 750 (2012), 1,010 (2013), 1,140 (2014F), 1,415 (2015F), 1,681 (2016F).
Net debt to equity (%): 143.2 (2013), 90.1 (2014F), 70.6 (2015F), 69.7 (2016F).
ROE (%): 12.7 (2013), 11.5 (2014F), 11.8 (2015F), 12.4 (2016F).

Market Indices

Index	Previous Close	1D %	1W %	1M %	YTD %
DJIA	17511.6	1.1	-1.3	-1.6	-1.7
S&P 500	2019.4	1.3	-1.2	-2.5	-1.9
FTSE 100	6585.5	0.5	1.3	0.6	0.3
AS30	5289.0	0.2	-2.0	-0.4	-1.8
CSI 300	3355.2	-7.7	-4.5	-0.8	-5.1
FSSTI	3307.7	0.2	-1.1	0.9	-1.7
HSCEI	11475.9	-5.0	-4.5	0.7	-4.2
HSI	23738.5	-1.5	-1.2	2.7	0.6
JCI	5152.1	0.1	-0.7	0.1	-1.4
KLCI	1753.3	0.6	1.1	2.2	-0.5
KOSPI	1902.6	0.8	-1.0	-1.4	-0.7
Nikkei 225	17014.3	0.9	-1.1	-3.4	-2.5
SET	1535.4	1.2	0.3	1.4	2.5
BDI	739	-0.3	2.2	-8.0	-5.5
CPO (RM/mt)	2320	-2.2	-0.9	9.2	1.0
Nymex Crude (US$/bbl)	48	-2.4	3.1	-15.9	-10.8

Top Picks

Company	Ticker	Current Price (HK$)	Target Price (HK$)	Upside (%)
Sunac China	1918 HK	6.57	9.29	41.4
ICBC	1398 HK	5.45	6.90	26.6
Bank Mandiri	BMRI J	10,725.00	12,500.00	16.6
Gamuda	GAM MK	5.02	5.50	9.6
DBS	DBS SP	19.70	22.68	15.1
Pacific Radiance	PACRA SP	0.72	1.57	118.1
Bangkok Bank	BBL TB	184.00	276.00	50.0
Advanced Info	ADVANC	247.00	270.00	9.3

Key Assumptions

Country/Region	2013 (%)	2014 (%)	2015F (%)
US	1.9	2.7	3.2
Euro Zone	-0.4	0.9	1.4
Japan	1.5	1.5	2.0
Singapore	3.9	3.2	3.3
Malaysia	4.7	5.9	5.2
Thailand	2.9	1.5	3.9
Indonesia	5.8	5.2	5.8
Hong Kong	2.9	3.5	3.7
China	7.7	7.2	7.0

Commodity	2014 (US$/mt)	2015F (US$/mt)	2016F (US$/mt)
CPO	722	765	788
BDI	1,101	1,300	1,400

Corporate Events

Indosat Corporate Roadshow: Scheduled for Toronto (19–20 Jan), Montreal (21 Jan), New York (22–23 Jan).
Singapore and Indonesia Telecom Analyst Presentation: Kuala Lumpur (26–27 Jan).
Malaysia TH15 Strategy Analyst Presentation: Singapore (29–30 Jan).

Valuation & Outlook

Zhongsheng Group Holdings: Maintained BUY with a target price of HK$9.00 and an upside of 17.1%.
Indocement (INTP): Maintained BUY as the top pick in the cement sector, with a target price of Rp26,900 and a current price of Rp21,825.
Cement sector: Despite price cuts, sales volume growth is expected to offset the impact, and capacity constraints may push ASP up again in 2016.
Government intervention in cement pricing may discourage future capacity investments, but existing players like Indocement are well-positioned to benefit from infrastructure growth.

Risk and Earnings Revisions

Zhongsheng Group Holdings: Earnings forecasts cut by 10–16% for 2014–2016 due to lower margins and spare parts price cuts.
Indocement: May be forced to lower ASPs to maintain market share, but net profit decline is minimal due to strong margins and capacity expansion.
Semen Indonesia (SMGR): Suffered a direct negative impact from the price cut, with net profit declining by 2.4% per 1% drop in ASP.

Conclusion

The report highlights investment opportunities in used car sales and auto finance in China, and Indocement in Indonesia due to its resilient margins, market share, and capacity expansion. It also notes the potential for price recovery in the cement sector due to capacity constraints and infrastructure growth.