20170124-大华继显-Regional_Morning_Notes_26页_1mb

报告摘要

Regional Morning Notes Summary - 24 January 2017

Core Content Overview

The document provides a comprehensive market update for the Asia-Pacific region, focusing on China, Indonesia, Malaysia, Singapore, and Thailand. It includes insights on sector performance, company updates, key indices, corporate events, and analyst recommendations.

Main Points by Country

China

Healthcare Sector: Tightening drug price regulations are expected due to the release of new NRDL payment standards and promotion of the DRG system. This will likely lead to price pressure on drug manufacturers, especially those in the adjuvant drug list. Investors are advised to avoid chasing stocks based on recent rallies and wait for a market correction before buying CSPC (1093 HK). Top picks include CTCM (570 HK) and UMFT (2666 HK) due to their attractive valuations.
Property Sector: Home sales in sample cities continued to decline, with a further wow drop of 5.1% in January 2017. Sales in tier-1 cities fell by 20.4% wow, while tier-3 cities like Shantou and Xiangyang showed some growth. Tightening mortgage conditions and policy control on refinancing are expected to continue pressuring the sector. Maintain UNDERWEIGHT on the sector. Top picks include CRL (1109 HK), Longfor (960 HK), and COLI (688 HK).
Corporate Events: Includes meetings with various companies such as ST Engineering, Gas Malaysia, PTT Exploration and Production, and others in Singapore and Malaysia.

Indonesia

Indofood CBP (ICBP IJ): Price and input cost movements suggest a HOLD recommendation. Target price is Rp9,250.

Malaysia

DiGi.Com (DIGI MK): 4Q6 results were in line with expectations, but management guides for a pedestrian 2017. Suggest waiting for a better entry point close to RM4.75.

Singapore

REITs: Industrial REITs showed mixed results, with MLT in line and Cache below expectations.

Thailand

CH Karnchang (CK TB): Earnings continue to grow due to the company's diversified business model and upcoming mega projects. Target price is Bt37.00.
Charoen Pokphand Foods (CPF TB): 4Q16 results are expected to show a decline in earnings, both yoy and qoq.

Key Indices

Index	Prev Close	1D %	1W %	1M %	YTD %
DJIA	19799.9	(0.1)	(0.4)	(0.7)	0.2
S&P 500	2265.2	(0.3)	(0.4)	0.1	1.2
FTSE 100	7151.2	(0.7)	(2.4)	1.2	0.1
AS30	5668.0	(0.7)	(2.3)	(0.1)	(0.9)
CSI 300	3364.1	0.3	1.3	1.7	1.6
FSSTI	3025.5	0.5	0.4	5.4	5.0
HSCEI	9726.8	0.1	0.6	5.9	3.5
HSI	22898.5	0.1	0.8	6.1	4.1
JCI	5251.0	(0.1)	(0.4)	4.4	(0.9)
KLCI	1671.3	0.4	0.8	3.3	1.8
KOSPI	2066.0	0.0	0.1	1.5	2.0
Nikkei 225	18891.0	(1.3)	(1.1)	(2.8)	(1.2)
SET	1570.8	0.5	(0.1)	4.0	1.8
TWSE	9424.1	1.0	1.4	3.8	1.8
BDI	925	(1.8)	0.0	(3.7)	(3.7)
CPO (RM/mt)	3298	(0.1)	0.7	1.8	3.1
Brent Crude (US$/bbl)	55	(0.3)	(0.9)	0.3	(2.6)

Key Assumptions

GDP Growth (yoy): China (6.2%), Indonesia (5.2%), Thailand (3.3%), Malaysia (4.5%), Singapore (1.8%), Hong Kong (1.8%), Japan (0.9%), US (2.7%), Euro Zone (1.1%)
Brent Crude (US$/bbl): 2016 Average: 45, 2017F: 56, 2018F: 61
CPO (RM/mt): 2016: 2,653, 2017F: 2,600, 2018F: 2,500

Top Picks

BUY

China TCM (570 HK): Target price HK$5.00
UMFT (2666 HK): Target price HK$10.26
Ciputra Property (CTRP J): Target price HK$960.00
Indosat (ISAT J): Target price HK$8,015.00
Genting Bhd (GENT MK): Target price HK$10.15
China Resources Land (1109 HK): Target price HK$29.03
Longfor (960 HK): Target price HK$14.69
CIFI (884 HK): Target price HK$2.76
Kwangju Property (535 HK): Target price HK$0.65
Guangzhou R&F (2777 HK): Target price HK$12.03
Poly Real Estate (600048 CH): Target price HK$11.80

SELL

Sunac (1918 HK): Target price HK$4.34
Agile (3383 HK): Target price HK$3.49

HOLD

Nine Dragons Paper (2689 HK): Target price HK$13.00
Indofood CBP (ICBP IJ): Target price Rp9,250
DiGi.Com (DIGI MK): Target price RM5.30
Charoen Pokphand Foods (CPF TB): Target price Bt35.75
China Overseas Land (688 HK): Target price HK$30.22
Sino-Ocean Land (3377 HK): Target price HK$3.70
Yuexiu Property (123 HK): Target price HK$0.94

Analysts

Alex Jiang: +852 2236 6749, alex.jiang@uobkayhian.com.hk
Fu Jun Wei: +8621 54047225 ext 817, jwfu@uobkayhian.com

Key Insights and Recommendations

Healthcare: The tightening of drug price regulations and promotion of DRG payments will likely reduce prices for some drugs. Investors should be cautious and wait for a market correction before buying. Sino Biopharm (1177 HK) and CSPC (1093 HK) are recommended due to strong R&D pipelines.
Property: Continued policy control and mortgage tightening are expected to pressure the sector. A short rebound is likely in March, but long-term outperformance requires policy loosening. SELL Sunac and Agile due to weak fundamentals.
Nine Dragons Paper (2689 HK): Core net profit rose 45% yoy in 1HFY17, beating expectations. Recommend BUY with a higher target price of HK$13.00.

Market Sentiment and Valuation

The healthcare sector is trading at a 30.7% discount to its peers.
The property sector is at a 44.5% discount to RNAV.
A-share healthcare stocks dropped 4.5% in January, while Hong Kong-listed pharma stocks increased by 6.5%.
Drug supply chain operators like UMFT (2666 HK) are expected to benefit from policy changes.

Conclusion

The document highlights continued regulatory pressure in China's healthcare and property sectors, with a cautious outlook on property due to tightening mortgage conditions and policy controls. Healthcare stocks are recommended for long-term re-rating, with emphasis on companies with strong R&D and attractive valuations. In Indonesia and Malaysia, the outlook is mixed with some companies advised to hold or sell based on their performance and market conditions.

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