20140507-大华继显-Regional_Morning_Notes_41页_1mb

报告摘要

Regional Morning Notes Summary - 07 May 2014

Core Content

This document provides a comprehensive overview of regional market updates, focusing on China, Hong Kong, Malaysia, and Singapore. It includes company-specific updates, sector performance, key indices, top picks, and financial data for Guangzhou R&F Properties.

Main Points by Region

China

Property Sector Update:
- Property sales in major cities were flat during the May Day holidays, with only 14 new projects launched.
- Sales are expected to improve in June and July with more project launches, but the recovery is delayed.
- The 288-city pricing index saw its first monthly drop in 21 months, indicating a downturn in the property market.
- The government's anti-corruption and shanty town development initiatives are expected to impact property sales.
- Key factors to watch include policy loosening, sales recovery, and pricing strategies.
Guangzhou R&F Properties (2777 HK):
- Sales in April dropped 58% month-on-month but were up 3% year-on-year.
- The company set an ambitious sales target of Rmb70b for the year, up 66% yoy.
- Sales performance is expected to improve from June onwards with 17 new launches scheduled for Jun-Sep 14.
- The company is willing to cut prices for slow-selling projects to meet its sales target.
- Upgraded to HOLD with a target price of HK$10.70.
Other Companies:
- Sinopharm Group (1099 HK): Expects sustainable growth.
- Shimao (813 HK), COLI (688 HK), and KWG (1813 HK) are top picks for BUY.
- Poly Property (119 HK) and Sino-Ocean Land (3377 HK) are recommended for SELL.
- Vanke's vice CEO indicated that anti-corruption measures have impacted sales in Beijing.

Hong Kong

Giordano (709 HK): Downgraded to SELL due to a weak start to 2014 and expected continued challenges.

Malaysia

Hartalega Holdings (HART MK): Downgraded to SELL due to contraction in EBIT margin and downward price pressures.
RHB Capital (RHBC MK): Expected to report 1Q14 results on 26 May, with a qoq decline in earnings anticipated.

Singapore

Halcyon Agri Corp (HACL SP): Weak 1Q14 results, but potential for M&A and improved performance.
Sembcorp Industries (SCI SP): Utilities capacity expansion is on track.
SIA Engineering (SIE SP): Flat FY14 results, but increased hangar capacity in the Philippines may lead to better FY15 performance.
Top Picks:
- Halcyon Agri Corp (HACL SP): BUY with a target of S$0.92.
- Sembcorp Industries (SCI SP): BUY with a target of S$5.95.
- SIA Engineering (SIE SP): HOLD with a target of S$4.72.

Key Indices Performance

Index	Previous Close	1D %	1W %	1M %	YTD %
DJIA	16401.0	(0.8)	(0.8)	(0.1)	(1.1)
S&P 500	1867.7	(0.9)	(0.6)	0.1	1.0
FTSE 100	6798.6	(0.3)	1.5	1.5	0.7
AS30	5462.7	0.4	(0.1)	0.9	2.0
CSI 300	2157.3	0.0	(0.5)	(1.3)	(7.4)
FSSTI	3245.6	0.1	0.1	1.6	2.5
HSCEI	9743.3	(0.6)	(0.6)	(3.6)	(9.9)
HSI	21976.3	(1.3)	(1.1)	(2.4)	(5.7)
JCI	4834.5	(0.2)	0.3	(1.8)	13.1
KLCI	1860.4	(0.0)	0.3	(0.1)	(0.3)
KOSPI	1959.4	(0.1)	(1.9)	(1.4)	(2.6)
Nikkei 225	14457.5	(0.2)	0.4	(4.0)	(11.3)
SET	1404.0	(1.2)	(0.3)	0.9	8.1
TWSE	8912.4	0.5	1.2	0.4	3.5
BDI	1022	0.5	6.3	(15.2)	(55.1)
CPO (RM/mt)	2646	(0.3)	(2.6)	(1.7)	2.9
Nymex Crude (US$/bbl)	100	0.0	(1.8)	(1.6)	1.1

Key Assumptions

Indicator	2012	2013F	2014F
GDP (% yoy)	2.8	1.9*	3.0
US
Euro Zone	-0.7	-0.4*	1.0
Japan	2.0	1.5*	2.5
Singapore	1.9	4.1*	4.3
Malaysia	5.6	4.7*	5.2
Thailand	6.4	2.9*	3.0
Indonesia	6.2	5.8*	5.5
Hong Kong	1.5	3.0	3.5
China	7.8	7.7*	6.9
Brent (US$/bbl)	(US$/bbl)	110	110
Aluminium (US$/mt)	(US$/mt)	1,886	1,713
Copper (US$/mt)	(US$/mt)	7,354	6,850
Gold (US$/ounce)	(US$/ounce)	1,407	1,200
Iron Ore (US$/mt)	(US$/mt)	135	120
CPO (US$/mt)	(US$/mt)	736	858
BDI		1,219	1,500

Corporate Events

Comba Telecom Corporate Roadshow: London/Vienna (7 May), London (8-9 May)
Macau Gaming and China Telecommunications: Kuala Lumpur (14-15 May), Singapore (16 May)
Luncheon Presentation with Mr. Tristan Gerra: Hong Kong (23 May)

Key Financials (Guangzhou R&F)

Metric	2013	2014F	2015F	2016F
Net turnover (Rmbm)	36,271.3	46,240.7	51,951.0	60,076.5
EBITDA (Rmbm)	12,171.5	15,442.2	17,714.5	20,075.2
Net profit (Rmbm)	7,633.9	6,584.1	7,586.5	8,463.2
Net profit (adj.) (Rmbm)	5,820.0	6,584.1	7,586.5	8,463.2
EPS (cent)	182.2	206.1	237.5	265.0
PE (x)	4.4	3.9	3.4	3.0
P/B (x)	0.8	0.7	0.6	0.5
EV/EBITDA (x)	5.9	4.6	4.0	3.6
Dividend yield (%)	7.7	7.7	7.7	7.7
Gross margin (%)	39.2	39.6	40.1	39.3
Core net margin (%)	16.0	14.2	14.6	14.1
Net debt/(cash) to equity (%)	110.8	95.8	92.3	89.0
Interest cover (x)	6.8	6.2	6.3	6.4
ROE (%)	25.6	18.5	18.4	19.0
Net gearing (%)	107%	96%	92.3%	89.0%

Key Takeaways

Property Sales: Weak in April due to high base in March, but expected to improve in June and July with new project launches.
Market Outlook: Sales recovery is delayed to June, with cautious buyer sentiment.
Company Strategy: Guangzhou R&F is prepared to cut prices if necessary to meet its sales targets.
Valuation: The company is currently trading at a 49% discount to NAV and 0.8x P/B, which is below its historical average.
Risks: Continued tight liquidity and potential price cuts could affect margins.