20170322-大华继显-Regional_Morning_Notes_29页_2mb

报告摘要

Regional Morning Notes Summary - 22 March 2017

Core Content Overview

This document provides a comprehensive summary of economic policies, company results, and stock market insights for various Asian regions, including China, Indonesia, Malaysia, Singapore, and Thailand. It also outlines key investment recommendations and market assumptions.

Main Points

China

Economic Policy Focus:
- Prioritization of deleveraging to prevent asset bubbles, particularly in real estate and financial markets.
- Risk control remains central, with a policy combination of rising interbank rates, stricter MPA rules, and tighter capital controls.
- China-US Trade Relations: Expected to ease with potential compromises and the introduction of voluntary export restraints in certain sectors.
- SOE Reforms: Marketization reforms will remain slow, while restructuring and M&As are expected to be pushed forward.

Company Highlights

Hengan International Group Co (1044 HK)

2016 Results: Net profit increased by 10.3% year-on-year, in line with market expectations.
2017 Outlook: Expected margin contraction due to rising costs (pulp, raw materials, transportation).
Key Segments:
- Sanitary Napkins: Steady growth.
- Tissue: Solid growth, but diapers saw a decline due to sales channel shift and competition.
Recommendation: Maintain HOLD.
Target Price: HK$57.00.
Entry Price: HK$54.00.
Valuation: Trading at 22x 2017F PE, slightly above historical average of 20x.

Poly Property (119 HK)

2016 Results: Earnings bottomed out.
Valuation: High valuation is seen as unjustified.
Recommendation: SELL.

Wasion Group Holdings (3393 HK)

2016 Results: Profit tumbled by 27.5% due to reduced orders from State Grid.
Recommendation: SELL.
Target Price: HK$2.90.

Indonesia

Indosat (ISAT IJ):
- Recommendation: BUY.
- Target Price: Rp7,900.
- Key Points: Cheapest among peers, sustained profitability, and potential return to dividends.

Malaysia

Bumi Armada (BAB MK):
- Recommendation: BUY.
- Key Points: Positive statements from clients suggest project execution is derisked.
Chin Hin Group (CHIN MK):
- A small building material player growing through capacity expansion and targeting autoclaved aerated concrete.

Singapore

Keppel Corp (KEP SP):
- Recommendation: HOLD.
- Target Price: S$6.98.
- Key Points: Deal with Borr is a masterwork, assuming a forfeit by Transocean.

Thailand

Advanced Info Service (ADVANC TB):
- Recommendation: BUY.
- Target Price: Bt210.00.
- Key Points: Well-positioned to secure market share in 1Q17.

Key Indices Performance

Index	Previous Close	1D %	1W %	1M %	YTD %
DJIA	20668.0	-1.1	-0.8	-0.5	4.6
S&P 500	2344.0	-1.2	-0.9	-0.8	4.7
FTSE 100	7378.3	-0.7	0.3	1.0	3.3
AS30	5819.5	0.0	0.4	-0.5	1.8
CSI 300	3466.3	0.5	0.3	-0.7	4.7
FSSTI	3158.6	-0.2	0.5	1.2	9.6
HSI	24593.1	0.4	3.2	1.6	11.8
KLCI	1754.7	0.3	1.9	2.7	6.9
KOSPI	2178.4	1.0	2.1	3.4	7.5
Nikkei 225	19455.9	-0.3	-0.9	0.4	1.8
BDI	1205	0.8	8.4	54.9	25.4
CPO (RM/mt)	2979	-0.7	0.1	-6.8	-6.9
Brent Crude (US$/bbl)	51	-1.3	0.1	-10.1	-10.3

Top Picks (BUY)

Company	Ticker	Current Price	Target Price	20% +/- (%)
Ping An Insurance	2318 HK	44.20	47.00	6.3
Bank Negara Indonesia	BBNI IJ	6,575.00	7,100.00	8.0
Indosat	ISAT IJ	7,000.00	8,015.00	14.5
Tiga Pilar	AISI IJ	2,190.00	2,550.00	16.4
Inari Amertron	INRI MK	1.97	2.15	9.1
V.S. Industries	VSI MK	1.70	2.20	29.4
OCBC	OCBC SP	9.62	10.75	11.7
Venture Corp	VMS SP	11.20	12.40	10.7
Bangkok Dusit	BDMS TB	20.60	27.00	31.1
Siam Cement	SCC TB	534.00	600.00	12.4

SELL Recommendations

Company	Ticker	Current Price	Target Price	20% +/- (%)
Hartalega	HART MK	4.90	3.67	-25.1

Key Assumptions

Economy	2015	2016F	2017F
US	2.6	1.7	2.7
Euro Zone	2.0	1.6	1.1
Japan	1.2	0.8	0.9
Singapore	2.0	1.4	1.8
Malaysia	5.0	4.2	4.5
Thailand	2.8	3.2	3.3
Indonesia	4.8	5.0	5.2
Hong Kong	2.4	2.1	1.8
China (Actual)	6.9	6.7*	6.3

Brent Crude (Average):

Year	(US$/bbl)
2016	45
2017	56
2018	61

CPO (RM/mt):

Year	(RM/mt)
2016	2,653
2017	2,600
2018	2,500

Corporate Events

Roadshow with Globetronics Technology – Singapore, 23 Mar
Roadshow with China Display Optoelectronics Technology – Hong Kong, 23 Mar
Analyst Marketing on Malaysia Technology Sector – Singapore, 24 Mar
Roadshow with China Traditional Chinese Medicine – Hong Kong & Shanghai, 24 Mar & 5 Apr
Roadshow with Meidong Auto Holdings – Hong Kong, 27 Mar
Group Luncheon with Yitai Coal Co – Hong Kong, 28 Mar
Luncheon with China Resources Gas – Hong Kong, 29 Mar
Group Meeting with IGG Inc – Shanghai, 30 Mar
Group Meeting with Yihai Int'l Holdings – Hong Kong, 5 Apr
Roadshow with Ann Joo Resources – Singapore, 5 Apr
Roadshow with Sihuan Pharmaceutical Holdings – Shanghai & Taiwan, 7 Apr & 12 Apr
Roadshow with BBI Life Science Corp – Hong Kong, 10 Apr
Luncheon with Dynagreen Environmental Protection Group – Hong Kong, 11 Apr
Roadshow with Universal Medical Financial and Technology – Hong Kong, 12 Apr
Roadshow with Singtel – Canada, 26 May
Roadshow with PT Siloam International Hospital – Canada, 5 Jun

Analysts

Zhu Chaoping: +8621 5404 7225 ext. 822, chaoping@uobkayhian.com
Mark Chen: +8621 5404 7225 ext 825, markchen@uobkayhian.com
Johnson Hu, CFA: +8621 5404 7225 ext 809, johnsonhu@uobkayhian.com

Summary of Hengan International Group Co (1044 HK)

Company Description: Leading manufacturer of personal care and hygiene products in China.
Stock Data:
- GICS Sector: Consumer Staples
- Bloomberg Ticker: 1044 HK
- Shares Issued: 1,204.9 million
- Market Cap (HK$): 75,968.2 million
- Market Cap (US$): 9,783.4 million
- 3-Month Avg Daily Turnover (US$): 22.5 million
Price Performance:
- 1-Month: -4.5%
- 3-Month: 13.3%
- 6-Month: -3.8%
- 1-Year: -1.9%
- YTD: 10.7%
Valuation:
- PE (2017F): 22x
- Target Price: HK$57.00
- Entry Price: HK$54.00
Key Financials:
- Net Profit (2016): Rmb3.6b
- EBITDA (2016): Rmb4.8b
- Net Profit (Adj. 2016): Rmb3.88b
Sales and Gross Margin Estimates:
- Tissue: Revenue growth of 4.3% in 2016; Gross Margin 37.9%
- Sanitary Napkin: Revenue growth of 6.2% in 2016; Gross Margin 72.6%
- Diapers: Revenue decline of 12.3% in 2016; Gross Margin 50.8%
- Blended Margin: 48.8% in 2016, expected to drop to 47.4% in 2017
Earnings Revision:
- 2017F EPS: 284.4 fen
- 2018F EPS: 300.9 fen
- Earnings CAGR: 2% (2016-2019)

Conclusion

The document outlines a cautious outlook for China's economy, emphasizing risk control and deleveraging, with mixed results from key companies like Hengan International Group Co. It also highlights positive outlooks for other regions such as Indonesia and Malaysia, and provides detailed financial data and market assumptions for various indices and sectors. The recommendations are based on the company's performance, market position, and macroeconomic trends.

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