Asia Pacific Daily Summary - 12 July 2016
Core Content Overview
The document provides a summary of stock ratings, financial forecasts, and market updates for various companies in the Asia Pacific region, as well as regional index performance and upcoming company roadshows. The focus is on key financial metrics, changes in analyst recommendations, and macroeconomic factors influencing the market.
Key Company Ratings and Target Prices
| Company |
Analyst |
Rating |
Target Price (HKD) |
Page |
| Man Wah Holdings (1999 HK) |
Carlton Lai |
Buy → Hold |
11.30 |
P.3 |
| BYD (1211 HK) |
Kelvin Lau |
Outperform → Buy |
65.00 |
P.7 |
| Advanced Info Service (ADVANC TB) |
Sarachada |
Hold → Buy |
190.00 |
P.10 |
| Texhong Textile (2678 HK) |
John Choi |
Buy |
10.50 |
P.11 |
| General Interface Solution (6456 TT) |
Kylie Huang |
Buy |
- |
P.14 |
| Anta Sports Products (2020 HK) |
Adrian Chan |
Buy |
- |
P.19 |
| Feng Tay Enterprise (9910 TT) |
Helen Chien |
Hold |
- |
P.23 |
| DiGi.Com (DIGI MK) |
Lim Tee Yang |
Hold |
- |
P.27 |
| SapuraKencana (SAKP MK) |
Tan Kee Hoong |
Hold |
- |
P.28 |
| Indonesia Gold sector |
Arandi Aiantara |
Neutral |
- |
P.29 |
| China Property |
Cynthia Chan |
- |
- |
P.32 |
| Beijing Capital International Airport (694 HK) |
Kelvin Lau |
- |
- |
P.35 |
| China State Construction International (3311 HK) |
Kelvin Lau |
- |
- |
P.37 |
| Hon Hai (2317 TT) |
Kylie Huang |
- |
- |
P.39 |
Major Changes in Ratings
- Man Wah Holdings (1999 HK): Downgraded from Buy to Hold due to global macro uncertainty and signs of possible slowdown in overseas furniture demand. Target price reduced to HKD11.30.
- BYD (1211 HK): Upgraded from Outperform to Buy, with a target price increased by 30% to HKD65.00.
- Advanced Info Service (ADVANC TB): Upgraded from Hold to Buy, with a target price increased by 15.2% to Bt190.00.
Key Financial Highlights for Man Wah Holdings (1999 HK)
- Share Price: Currently trading at 2SD above its mean trading PER since 2013.
- Dividend Yield: Expected to increase from 3.4% to 4.0% by 2019.
- EPS (Fully Diluted): Projected to increase by 20.0% in FY17, 11.4% in FY18, and 9.0% in FY19.
- Gross Margin: Expected to be 41.2% in FY17, with a gradual decline to 39.8% in FY19.
- Net Profit Margin: Expected to increase from 16.8% to 18.0% by FY19.
- ROE: Expected to decrease from 28.9% to 26.3% by FY19.
- Free Cash Flow Yield: Expected to rise from 6.0% to 6.4% by FY19.
Financial Forecast Revisions
| Metric |
FY17E |
FY18E |
FY19E |
| Revenue Change (%) |
-4.0 |
-4.9 |
-5.3 |
| Net Profit Change (%) |
-4.0 |
-4.9 |
-5.3 |
| Core EPS (FD) Change (%) |
-4.0 |
-4.9 |
-5.3 |
Regional Indices Performance (as of 12 July 2016)
| Market |
1D (%) |
1M (%) |
YTD (%) |
EPS Growth 16E (%) |
EPS Growth 17E (%) |
PER 16E (x) |
PER 17E (x) |
| TPX |
3.8 |
-5.6 |
-18.8 |
15.2 |
9.4 |
12.6 |
11.5 |
| HSCEI |
2.0 |
-1.5 |
-9.9 |
-3.5 |
5.8 |
6.2 |
5.9 |
| HSI |
1.5 |
-0.8 |
-4.7 |
-1.0 |
9.4 |
10.9 |
9.9 |
| KOSPI |
1.3 |
-1.4 |
1.4 |
23.9 |
9.2 |
10.7 |
9.8 |
| TWSE |
1.7 |
0.8 |
5.4 |
-0.3 |
10.5 |
13.5 |
12.4 |
| SENSEX* |
1.8 |
3.7 |
5.8 |
13.4 |
18.0 |
18.0** |
15.3** |
| FSSTI |
1.0 |
1.9 |
-0.2 |
-2.0 |
4.9 |
12.6 |
12.0 |
| FBMKLCI* |
0.6 |
0.8 |
-2.3 |
-1.5 |
8.3 |
16.3** |
15.0** |
| SET* |
0.9 |
2.7 |
14.0 |
7.5 |
13.7 |
15.2** |
13.4** |
| PCOMP* |
1.2 |
4.7 |
13.1 |
6.9 |
9.8 |
20.0** |
18.2** |
| JCI* |
2.0 |
4.4 |
10.4 |
7.5 |
13.5 |
16.4** |
14.4** |
| AS51 |
2.0 |
0.5 |
0.8 |
-11.1 |
6.2 |
16.3 |
15.4 |
Note: *Valuation based on MSCI Universe; *MSCI index priced as of 8 Jul.
Upcoming Company Roadshows
| Date |
Company |
Event |
Venue |
| 18-21 Jul |
Gamuda Berhad (GAM MK) |
NDR |
EU |
| 26 Jul |
Incitec Pivot (IPL AU) |
NDR |
Tokyo |
| 26-28 Jul |
M1 Ltd (M1 SP) |
NDR |
US |
| 27 Jul |
HKEI (2638 HK) |
NDR |
HK |
| 28-29 Jul |
China Water Affairs (855 HK) |
NDR |
Tokyo |
| 1 Aug |
CKI / Power Assets (1038 HK/6 HK) |
NDR |
HK |
| 1-5 Aug |
Samsung Electronics Co. (005930 KS) |
NDR |
US |
| 3-5 Aug |
Delta Electronics (DELTA TB) |
NDR |
EU |
| 4 Aug |
Nine Dragons Paper (2689 HK) |
Group Luncheon |
HK |
| 4 Aug |
Nine Dragons Paper (2689 HK) |
Group Luncheon (VC) |
SG |
| 4 Aug |
Nine Dragons Paper (2689 HK) |
VC |
Tokyo |
| 5 Aug |
Xinyi Solar (968 HK) |
NDR |
HK |
| 17 Aug |
China State Construction International (3311 HK) |
NDR |
HK |
| 17 Aug |
China State Construction International (3311 HK) |
Group Luncheon (VC) |
SG |
| 17 Aug |
China Suntien (956 HK) |
NDR |
HK |
| 18 Aug |
Fufeng Group (546 HK) |
NDR |
HK |
| 22 Aug |
Mega Financial Holding (2886 TT) |
NDR |
Tokyo |
| 23 Aug |
SITC (1308 HK) |
NDR |
HK |
| 23-24 Aug |
CIMC Enric (3899 HK) |
NDR |
HK |
| 25 Aug |
Canvest Environmental (1381 HK) |
NDR |
HK |
Daiwa Asian Events
| Date |
Event |
Venue |
| 19-Aug |
Daiwa ASEAN Conference - The 8th HOSE-Daiwa Vietnam Corporate Day 2016 |
SG |
| 6-9 Sep |
Daiwa Pan-Asia Innovative Companies Conference |
NY, Toronto, San Francisco |
| 8-9 Sep |
Daiwa Pan Asia REIT Day Tokyo 2016 |
Tokyo |
| 8-11 Nov |
Daiwa Investment Conference Hong Kong 2016 |
HK |
| 27 Feb-3 Mar 2017 |
Daiwa Investment Conference Tokyo 2017 |
Tokyo |
Financial Summary Highlights
Revenue and Profit Trends
| Year |
Revenue (HKDm) |
Net Profit (HKDm) |
Core EPS (HKD) |
| 2016 |
7,930 |
1,471 |
0.753 |
| 2017E |
8,783 |
1,639 |
0.839 |
| 2018E |
9,919 |
1,787 |
0.915 |
Key Ratios
| Ratio |
2016 |
2017E |
2018E |
2019E |
| Gross Margin |
39.5% |
41.2% |
40.7% |
39.8% |
| Core Operating Margin |
20.4% |
21.0% |
21.3% |
20.5% |
| Net Profit Margin |
16.8% |
18.6% |
18.7% |
18.0% |
| ROE |
27.0% |
28.9% |
27.7% |
26.3% |
| Free Cash Flow Yield |
6.0% |
4.8% |
5.7% |
6.4% |
Summary of Analyst Views
- Man Wah Holdings (1999 HK): Analyst recommends taking profit due to macroeconomic uncertainty and potential revenue/earnings cuts. Target price lowered to HKD11.30.
- BYD (1211 HK): Analyst upgraded the rating to Buy due to strong sales growth from the Tang SUV and K9 electric bus. Target price increased by 30% to HKD65.00.
- China Property: Tightening policies in more cities are expected to impact the sector.
- China Telecoms Sector: Positive outlook with potential for growth.
- Indonesia Market: Political and economic updates, with the gold sector rated Neutral due to the Brexit boost and weak prepaid market tone.
Key Takeaways
- Analysts are adjusting their views on various stocks, including downgrading Man Wah and upgrading BYD.
- Macroeconomic factors such as Brexit and currency depreciation are influencing company valuations and forecasts.
- Regional indices show mixed performance with some showing positive growth and others declining.
- Upcoming roadshows and events are highlighted for investor engagement.
- Financial metrics indicate improving gross margins for BYD and stable earnings growth for Man Wah.
