20171012-大华继显-Regional_Morning_Notes_23页_1mb

报告摘要

Regional Morning Notes Summary

Core Content Overview

This document provides a comprehensive market analysis for the week of 12 October 2017, focusing on key stories, investment highlights, financial metrics, and corporate events across different regions, particularly Hong Kong, China, Indonesia, Malaysia, Singapore, and Thailand. It also includes sector updates and recommendations from UOB Kay Hian analysts.

Key Stories

Hong Kong

Property Sector: The policy address lacks implementation details but hints at developers' involvement in providing starter homes. This is expected to benefit developers with large agricultural landbanks.
BBI Life Sciences Corporation (1035 HK): Initiated coverage with a BUY rating. BBI is a leading company in DNA synthesis and gene sequencing in China, with a strong position in the DNA value chain and a high growth potential. The company is expected to benefit from the trend of personalized cancer treatment and prenatal diagnosis. The current valuation is seen as undervalued compared to peers.

China

BBI Life Sciences Corporation (1035 HK): Initiates coverage with a BUY rating. The company is a top player in DNA synthesis and gene sequencing, with a 2016-18 sales CAGR of 27%. It is currently trading at 11.7x 2018F PE, significantly lower than its peers.

Indonesia

Mitra Pinasthika Mustika (MPMX IJ): Highlighted for efficiency and profitability improvements in 2018. The company's net profit grew 79.5% yoy in 1H17 due to one-off gains, and it plans to adjust its business segments to enhance performance.

Malaysia

Tune Protect Group (TIH MK): Highlighted as a BUY. The company's travel insurance business is gaining traction with increasing take-up rates. A dynamic pricing strategy is expected to drive further growth.

Singapore

StarHub (STH SP): Highlighted as a HOLD. The company is expanding its capabilities.
Singapore Press Holdings (SPH SP): Downgraded to SELL due to weak 4QFY17 results and lower dividends.

Thailand

BTS Group Holdings (BTS TB): Initiated coverage with a BUY rating. It is a leading conglomerate in rail mass transit with high core profit growth potential of over 40% in the next two years.

Key Indices Performance

Index	Prev Close	1D %	1W %	1M %	YTD %
DJIA	22872.9	0.2	0.9	3.4	15.7
S&P 500	2555.2	0.2	0.7	2.4	14.1
FTSE 100	7533.8	-0.1	0.9	1.8	5.5
AS30	5840.8	0.6	2.1	0.6	2.1
CSI 300	3902.7	0.3	2.1	1.7	17.9
FSSTI	3280.3	-0.3	1.3	1.4	13.9
HSCEI	11411.4	-0.1	0.9	1.5	21.5
HSI	28389.6	-0.4	0.8	1.5	29.0
JCI	5882.8	-0.4	-1.2	0.2	11.1
KLCI	1757.2	-0.2	-0.3	-1.8	7.0
KOSPI	2458.2	1.0	3.5	3.9	21.3
Nikkei 225	20881.3	0.3	1.3	5.6	9.2
SET	1714.1	0.4	1.6	4.3	11.1
TWSE	10641.2	1.0	2.5	0.3	15.0
BDI	1418	0.5	7.4	4.6	47.6
CPO (RM/mt)	2719	-0.8	0.7	-1.5	-15.0
Brent Crude	57	0.6	2.0	5.8	0.2

Top Picks

BUY Recommendations

BBI Life Sciences Corporation (1035 HK): Target price HK$3.69, with an upside of +69.3%.
Waskita Karya (WSKT J): Target price RM3,000.00, with an upside of +65.3%.
Ekovest (EKO MK): Target price RM1.45, with an upside of +34.3%.
Gabungan AQRS (AQRS MK): Target price RM2.22, with an upside of +23.3%.
OCBC (OCBC SP): Target price RM13.38, with an upside of +18.0%.
Siam Cement (SCC TB): Target price RM600.00, with an upside of +19.5%.

SELL Recommendations

Great Wall Motor (2333 HK): Target price HK$5.50, with a downside of -51.3%.
UMW Holdings (UMWH MK): Target price HK$4.80, with a downside of -13.5%.

Key Assumptions

Region	GDP (yoy)	2016	2017F	2018F
US	2.5	1.6	2.5	2.5
Euro Zone	1.6	1.7	1.8	1.6
Japan	1.2	1.0	0.9	1.2
Singapore	2.5	2.0	2.4	2.5
Malaysia	4.9	4.2	5.0	4.9
Thailand	3.3	3.2	3.3	3.3
Indonesia	5.5	5.0	5.2	5.5
Hong Kong	2.0	1.9	2.0	2.0
China	6.3	6.7	6.6	6.3
Brent (Avg)	55	45	52	55
CPO (RM/mt)	2,400	2,653	2,600	2,400

Corporate Events

Event	Venue	Date
Post Conference Marketing on Indonesia Strategy	Singapore	12 Oct
Analyst Presentation on Indonesia	Brunei	16 Oct
Consumer Piece and Strategy	Hong Kong	17-18 Oct
Luncheon with O-Net Technologies	Hong Kong	17 Oct
Fintech Seminar 2017	Kuala Lumpur	19 Oct
UOB Kay Hian Annual Regional Strategy Conference	Kuala Lumpur	13 Nov

BBI Life Sciences Corporation (1035 HK) Highlights

Investment Highlights

Market Position: No. 1 in DNA synthesis and No. 6 in gene sequencing in China.
Growth Drivers: Personalized cancer treatment, non-invasive prenatal testing, and biological drug development.
New Markets: Expansion into Korea, Singapore, and Europe.
Future Plans: Building a GMP-certificated production line for DNA synthesis in 2H18.

Financial Performance

Sales Growth: 2017-18 DNA synthesis revenue expected to grow at 20.5% CAGR.
Profitability: EBITDA margin of 24.0% in 2016, expected to remain stable.
Valuation: Current 2018F PE is 11.7x, significantly lower than peers.

Recommendation

Rating: BUY
Target Price: HK$3.69
Upside: +69.3%

Property Sector Update (Hong Kong)

Sector Upgrade: Upgraded to MARKET WEIGHT.
Policy Implications: Subtle mention of developers providing starter homes benefits those with large agricultural landbanks.
Key Recommendations:
- BUY: New World Devt (17 HK), Sun Hung Kai (16 HK)
- SELL: Wharf Hldgs (4 HK)

Peer Comparison (Hong Kong Property Developers)

Company	Ticker	Rec	Price (HK$)	Target Price (HK$)	Upside (%)	Market Cap (US$m)	Curr PE	Fwd PE	Fwd ROE (%)	Discount to RNAV (%)
Cheung Kong Property	1113 HK	BUY	64.3	80.32	24.9	30,458	12.9	12.3	6.8	-36
Kerry Properties	683 HK	HOLD	33.15	35.02	5.7	6,134	9.8	11.5	4.6	-39
New World Devt	17 HK	BUY	11.92	15.33	28.6	15,016	16.4	14.5	4.1	-46
Sun Hung Kai	16 HK	BUY	129.5	167.25	29.1	48,057	14.7	13.7	7.4	-30
Wharf Hldgs Ltd	4 HK	SELL	70.75	65.80	-7.0	27,520	15.3	14.5	4.5	-25

Conclusion

The document highlights key investment opportunities in the life sciences and property sectors, with a focus on BBI Life Sciences Corporation and select property developers. It outlines the growth potential of BBI in DNA synthesis and gene sequencing, and notes the potential benefits for developers in Hong Kong from the government's starter home policy. The analysis also covers financial metrics, valuation ratios, and upcoming corporate events.

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