20150128-大和证券-Asia_Pacific_Daily_39页_3mb

2015 Asia Investment Summary

Core Content

This document outlines Daiwa Securities' 2015 Asia investment strategy, highlighting key macroeconomic drivers, stock and thematic recommendations, and regional market outlooks. The report also includes specific analysis on two stocks: Blue Bird (BIRD IJ) and Shriram Transport Finance (SHTF IN), as well as details on upcoming events and market indices.

Main Points

Macro Drivers and Market Outlook

• Macro drivers are expected to be the main factor affecting stock performance in 2015 due to the potential Fed tightening.
• ASEAN markets are likely to be most affected by the drying up of US liquidity, with China and Taiwan recommended as overweight.
• Asia ex Japan EPS growth is projected at 10.4% YoY, with the MSCI Asia ex Japan index priced at 13x 12-month forward earnings.
• USD strengthening is expected to put downward pressure on Asian currencies and markets.

Investment Strategy and Recommendations

• Daiwa highlights 11 thematic and stock ideas that are expected to outperform in 2015, regardless of market conditions.
• These include:
  • Big Data
  • China Exporters
  • China Internet
  • China Telecoms
  • Daum Kakao
  • Hyundai Mobis
  • Industrial Automation
  • Macau Gaming
  • Retail S-REITs
  • Thailand Property Sector
  • Bank Rakyat Indonesia (BBRI IJ)

Stock Analysis: Blue Bird (BIRD IJ)

• Sector: Transportation
• Recommendation: Underweight
• Key Risks: Policy risks affecting taxi growth, limited taxi licenses in Jakarta, and potential reduction in operations.
• Valuation:
  • 2015F PE at 27.4x, which is a 27% premium to its peers.
  • Target price at IDR8,700, which is 76% below the current price.
• Utilization rates: Falling in recent months, expected to reach 76% in 2014, with potential for further decline.
• Fleet expansion: Expected to slow from 4,300 additions in 2014 to 7,500 in 2015-16.
• Margin pressure: Expected due to higher depreciation costs.
• Key Metrics:
  • Market Cap: IDR27.5bn/USD2.2bn
  • Shareholders: Pusaka Citra Djoksoetono (37.2%), Prawiro H Purnomo (9.6%), Other family members (38.2%), Free float (15.0%)
  • Revenue: Expected to grow from IDR3,921bn in 2013 to IDR7,140bn in 2016
  • Net Profit: Expected to grow from IDR708bn in 2013 to IDR1,208bn in 2016
  • EBIT: Expected to grow from IDR990bn in 2013 to IDR1,546bn in 2016
  • ROAE: Expected to grow from 62.2% in 2014 to 24.0% in 2016

Stock Analysis: Shirram Transport Finance (SHTF IN)

• Sector: Financial Services
• Recommendation: Buy
• Target Price: INR1,263, up from INR780
• Key Highlights:
  • Loan disbursement growth of 40% YoY in 3Q FY15
  • Strong performance in the second-hand commercial vehicle (CV) segment
  • NIM (Net Interest Margin) improved slightly to 6.64%
  • Asset quality improved, with NPL ratios decreasing
• Outlook:
  • Net profit growth is expected to increase significantly in FY16 and FY17
  • AUM growth is expected to increase from 29.2% in 3Q FY15 to 15.7% in FY17
  • The company is expected to benefit from interest rate easing and a recovery in the economy
• Key Metrics:
  • Market Cap: USD4.06bn
  • 3M avg daily turnover: USD13.69m
  • Shares outstanding: 227m
  • Major shareholder: Shriram Capital (26.1%)
  • Net Interest Income: Expected to grow from INR36,479m in 2014 to INR55,327m in 2017
  • Net Profit: Expected to grow from INR12,642m in 2014 to INR19,901m in 2017
  • EPS (Fully Diluted): Expected to grow from INR55.717 in 2014 to INR87.704 in 2017
  • Dividend Yield: Expected to remain at 1.1%
  • PBR: Expected to decrease from 2.7x in 2014 to 2.0x in 2017

Key Information

Upcoming Events

• Daiwa Investment Conference Tokyo 2015: 2nd-6th March at The Prince Park Tower Tokyo
• Daiwa Asian Events:
  • 4 Feb: Daiwa ASEAN One-Day Series in Singapore
  • 21-23 Apr: Daiwa Consumer and Gaming Conference 2015 in Hong Kong
  • 26-27 May: Daiwa Investment Conference New York 2015
  • 29 May: Daiwa Investment Conference San Francisco 2015
  • 1-2 Jun: Daiwa Investment Conference London 2015

Regional Indices

• TPX (KOSPI): Performance change (1D: -0.1%, 1M: -1.8%, YTD: -0.4%), EPS growth (13E: 2.2%, 14E: 30.1%), PER (13E: 15.2x, 14E: 12.8x)
• HSCEI (HSI): Performance change (1D: -0.3%, 1M: 5.8%, YTD: 2.0%), EPS growth (13E: 8.2%, 14E: 6.2%), PER (13E: 7.2x, 14E: 6.8x)
• SENSEX: Performance change (1D: 0.9%, 1M: 7.5%, YTD: 6.5%), EPS growth (13E: 12.0%, 14E: 16.3%), PER (13E: 18.6x, 14E: 16.0x)

Summary

Daiwa Securities' 2015 Asia strategy emphasizes the impact of Fed tightening on market performance, particularly in ASEAN countries. Despite strong earnings growth and valuations, macroeconomic factors are likely to dominate stock performance. The report highlights 11 thematic and stock ideas, including China Exporters, China Internet, and Macau Gaming, as key areas for investment. It also provides detailed analysis on Blue Bird (BIRD IJ) and Shriram Transport Finance (SHTF IN), with Blue Bird recommended as Underweight and SHTF as Buy. The report includes upcoming events and regional indices, with a focus on market performance and earnings growth.