20140805-杰富瑞-PrimeTime_Asia_16页_428kb

Asia Research Summary

Core Content Overview

This document provides an analysis of various Asian companies, focusing on their recent financial performance, market outlook, and investment ratings. The analysis includes insights from Jefferies Research across multiple sectors such as Property, Telecom, Basic Materials, and Financials, with a specific emphasis on companies in India, China, and Japan.

Key Companies and Their Analysis

China Property

• Longfor Properties (960 HK):

  • Rating: Buy
  • Price Target: HK$12.00 to HK$12.30
  • Key Takeaway: Longfor is on the right track with an asset-light model, improved debt structure, and better product offerings. It is one of the few mid-cap developers that may re-rate positively in the future.

• Greentown China Holdings (3900 HK):

  • Rating: Hold
  • Price Target: HK$8.80
  • Key Takeaway: Interim earnings plummeted 65% YoY due to margin decline and impairment losses. Recovery is expected but will take time, and the future strategy remains unclear.

• Godrej Properties Ltd. (GPL IN):

  • Rating: Hold
  • Price Target: INR207.00
  • Key Takeaway: Mixed Q1FY15 results with strong pre-sales but weak incremental revenue. Concerns remain over project approvals and older commercial project liquidation.

• Marico Limited (MRCO IN):

  • Rating: Hold
  • Price Target: INR225.00 to INR253.00
  • Key Takeaway: Q1FY15 showed better margins than expected, but domestic margin pressures and input cost issues may limit future growth.

Telecom Services

• China Telecom Corp Ltd. (728 HK):

  • Rating: Buy
  • Price Target: HK$14.00 to HK$15.60
  • Key Takeaway: 1QFY15 results showed a 9.9% YoY profit decline. The sector is expected to see revenue growth decelerate in 2H14, but long-term potential remains.

• China Unicom Ltd. (762 HK):

  • Rating: Buy
  • Price Target: HK$14.00 to HK$15.60
  • Key Takeaway: Profit declined YoY, but the company is expected to benefit from policy and credit loosening. Earnings growth is anticipated in the future.

• SK Telecom (017670 KS):

  • Rating: Buy
  • Price Target: KRW330,000
  • Key Takeaway: Q214 results showed strong operating profit growth, but revenue fell slightly short of consensus. The company is expected to maintain operational stability.

Basic Materials

• NMDC Ltd. (NMDC IN):

  • Rating: Buy
  • Price Target: INR186.00
  • Key Takeaway: July volume growth continued, and the company is on track to meet FY15 guidance. Attractive dividend yield and low valuations support the Buy rating.

• Grasim Industries Limited (GRASIM IN):

  • Rating: Buy
  • Price Target: INR4,021.00
  • Key Takeaway: Q1FY15 results were impacted by weak VSF margins. However, the chemical business improved, and earnings are expected to recover with capacity additions.

• Coal India Limited (COAL IN):

  • Rating: Hold
  • Price Target: INR320.00
  • Key Takeaway: July production and dispatch were weak, leading to a downward revision in growth expectations. The company is unlikely to meet FY15 offtake guidance.

• Cummins India Limited (KKC IN):

  • Rating: Buy
  • Price Target: INR670.00
  • Key Takeaway: Q1FY15 results showed margin expansion despite flat sales. The company is expected to benefit from sales recovery and leverage.

Financials

• Fosun Pharma (2196 HK):

  • Rating: Buy
  • Price Target: HK$33.00
  • Key Takeaway: The company is building a Class III hospital and a rehabilitation center, strengthening its position in the health services market. Buy rating is reiterated.

• DGB Financial Group (139130 KS):

  • Rating: Buy
  • Price Target: KRW20,000
  • Key Takeaway: Q214 net profit exceeded expectations, with core income remaining strong. Despite some uncertainty, the Buy rating is maintained.

• Woori Finance Holdings (053000 KS):

  • Rating: Buy
  • Price Target: KRW16,000
  • Key Takeaway: Q214 results beat expectations, and credit cost down-cycle is confirmed. The company is a Buy due to its strong performance and potential.

Japan

• Teijin Limited (3401 JP):

  • Rating: Underperform
  • Price Target: ¥185.00
  • Key Takeaway: Q1FY15 results showed improved performance due to cost-cutting, but the new target still implies significant downside. Underperform rating is maintained.

• Tokyo Ohka Kogyo Co., Ltd. (4186 JP):

  • Rating: Underperform
  • Price Target: ¥1,600
  • Key Takeaway: OP forecast revised up due to higher photo resist consumption, but the bearish view remains. Underperform rating is maintained.

• Isuzu Motors (7202 JP):

  • Rating: Hold
  • Price Target: ¥700
  • Key Takeaway: Q1FY15 OP slightly lower than Nikkei preview, mainly due to weak sales in Thailand. Hold rating is maintained.

• IHI (7013 JP):

  • Rating: Hold
  • Price Target: ¥450
  • Key Takeaway: Q1FY15 results showed strong profit growth in the aero engine segment, but NP declined YoY. Hold rating is maintained.

• DMG Mori Seiki (6141 JP):

  • Rating: Buy
  • Price Target: ¥1,800
  • Key Takeaway: Q1FY15 results were in line with expectations, but the company is expected to show profit growth from 2Q onwards. Buy rating is maintained.

• The Japan Steel Works Ltd. (5631 JP):

  • Rating: Buy
  • Price Target: ¥1,000
  • Key Takeaway: Q1FY15 results showed positive impressions, but short-term earnings could face headwinds if plant utilization doesn't improve. Buy rating is maintained.

Market Outlook

• China Property Market: Financial subsidies are being introduced to stimulate residential and land markets, which may benefit developers such as Longfor and others.
• Telecom Services: Revenue growth is expected to decelerate in 2H14, but long-term potential remains. Buy ratings are given to China Telecom and China Unicom.
• Basic Materials: Growth momentum is expected to continue for NMDC, with potential for improvement in Grasim and Cummins due to better pricing and capacity additions.
• Financial Sector: DGB Financial Group and Woori Finance Holdings showed strong performance, with Buy ratings. However, uncertainty remains in some cases.

Conclusion

The document outlines a mixed outlook for the Asian markets, with some companies showing positive momentum and others facing challenges. The Buy ratings are primarily assigned to companies that are on track for recovery and have strong fundamentals, while the Hold and Underperform ratings reflect uncertainty or underperformance in the short term. The overall sentiment suggests that investors should focus on companies with clear growth strategies and improved financial positions.