20180531-兴业金融证券-Regional_Morning_Cuppa_7页_343kb

Summary of Regional Morning Cuppa

Core Content

The Regional Morning Cuppa report provides investment insights and recommendations for stocks across several Asian markets, including Hong Kong, Malaysia, Indonesia, Thailand, and Singapore. It highlights key financial and market developments, evaluates company fundamentals, and offers buy, sell, or neutral ratings based on potential price movements and underlying business catalysts.

Main Recommendations

Hong Kong

• Sector Recommendation: OVERWEIGHT
• Top Picks: ABC and BOC
• Key Concerns: Rising bond market defaults and yields are causing investor concerns about a potential credit crunch.
• Impact of IFRS9: Higher volatility in banks' income statements due to increased provisions and mark-to-market losses.
• Sensitivity Analysis: A 50bps increase in yield curve would lower FY18F earnings by 0.9% and reduce CET1 ratio by 14bps.

Malaysia

• Top Picks: CIMB (BUY), BIMB Holdings (BUY), Allianz Malaysia (BUY), MMC Corp (BUY), POS Malaysia (BUY)
• CIMB: Maintained BUY with MYR8.20 target price, offering 39% upside. Earnings growth of 11% YoY due to international cash equities sale and lower provisions.
• BIMB Holdings: Continuing outperformance expected.
• Allianz Malaysia: Defensive pick with USD9.53 target price.
• MMC Corp: Spooked by negative sentiment but worth a relook.
• POS Malaysia: Courier margin continues to deteriorate.
• Felda Global Ventures: BUY despite 1Q18 setback.
• Genting Malaysia: Anticipated strong 2018 with theme park openings expected to boost earnings.
• Malayan Banking: Asset quality risk abating, core earnings forecast to grow 14% in FY18, ROE to reach 10.4%.

Indonesia

• Nippon Indosari Corpindo: NEUTRAL, with recovery expected.
• Indofood Sukses Maksur: BUY, with IDR10,300 target price. Expected to benefit from government stimulus and higher flour prices.
• Sansiri: BUY, with IDR2,210 target price. Presales recovery anticipated.
• BSD City: BUY, with IDR2,210 target price. Potential for higher marketing sales due to lower interest rates.
• LPN Development: SELL, still struggling for its future.
• CB Industrial Product: NEUTRAL, with new contract targets aiming for reduction.

Key Market Insights

• Credit Risk and Yields: Concerns over rising yields and credit crunch in the financial sector.
• Valuation and Fundamentals: Some stocks are undervalued (e.g., CIMB at 1.08x FY18F P/BV).
• Earnings Growth: Sustained earnings growth is expected for several companies, especially in the banking and consumer sectors.
• Government Policies: Impact of government stimulus initiatives on consumer spending and related sectors.
• Corporate Strategy: Companies are adjusting pricing and marketing strategies to reclaim market share and improve performance.

Investment Ratings Overview

Key Regional Reports

• Shariah-Compliant Securities Semi-Annual Review (21 May 2018)
• TH_EEC Thematic: New Titans Of The East (20 Apr 2018)
• REG_Stocks Immune From a Trade War: US And China Trade Tariffs (13 Apr 2018)
• Regional Thematic - Impact On Equities From Tariffs: US And China Trade Tariffs (23 Mar 2018)
• Regional Diamonds the 3rd: Our Best Investment Ideas (9 Mar 2018)
• REG_Focus On The Stocks:Our Updated Outlook In The Region (6 Feb 2018)
• Regional Strategy: Looking West – As The US Sneezes (5 Feb 2018)
• Regional Thematic : Against The Grain - Our Contrarian Calls (15 Jan 2018)
• Regional Halal Thematic: Halal – An Earnings Boost Strategy (3 Oct 2017)
• Retail, Hospitality, Healthcare and Property: Bright Skies Ahead For The Fantastic Four (2 Oct 2017)
• Regional Oil & Gas: Keep An Eye On OPEC Meeting And Iran Sanctions (21 Sep 2017)
• RHB Planet Series: Cambodia Land Of Opportunities (11 Sept 2017)
• Regional Thematic - Financial Technology : Embracing The Disruptor (9 Aug 2017)
• Regional Thematic - One Belt One Road (20 Jun 2017)
• Regional Thematic Research: The Dawn Of E-Mobility (29 May 2017)
• Regional Thematic - Finding More Diamonds In The Rough (13 Feb 2017)

Disclaimer and Restrictions

• The report is for informational purposes only and should not be construed as investment advice.
• All opinions are subject to change without prior notice.
• RHB and its affiliates may have interests in the securities discussed.
• The report is confidential and not intended for public distribution.
• Certain restrictions apply to distribution in different jurisdictions, including Malaysia, Thailand, Indonesia, Singapore, and Hong Kong.
• Access to the report is limited to accredited or institutional investors in Singapore and Malaysia.
• In the U.S., the report is distributed only to major institutional investors and is not registered as a broker-dealer.
• RHB does not accept liability for any reliance on the report or for any errors or omissions.

Conflict of Interest

• RHB may have business relationships with the companies covered.
• Analysts are not allowed to trade in the securities referenced.
• Ownership and material conflicts of interest are disclosed where applicable.

Conclusion

The Regional Morning Cuppa report offers a comprehensive analysis of key stocks across multiple Asian markets, highlighting both opportunities and risks. It emphasizes the impact of macroeconomic factors, regulatory changes, and company-specific strategies on investment potential. Investors are advised to consider the report as one of many factors in their decision-making process and to seek independent financial advice.