20170523-大华继显-Regional_Morning_Notes_25页_1mb

报告摘要

Regional Morning Notes Summary - 23 May 2017

Core Content Overview

This document provides a regional market analysis and investment insights for China, Indonesia, Malaysia, Singapore, and Thailand, focusing on economic policies, stock valuations, corporate events, and market indices. It also includes top picks and key assumptions for investors.

China

Economic Policy

Regulatory tightening continues to impact liquidity, with the PBOC (People's Bank of China) attempting to inject liquidity but facing persistent pressure from forced de-leveraging.
"Channel businesses" are under stricter scrutiny by the CSRC (China Securities Regulatory Commission), which has banned asset managers from acting merely as intermediaries for off-balance-sheet lending.
These businesses include bill financing, entrusted loans, trust loans, and inter-bank deposits, and they are seen as a source of financial risk.
Bond Connect, a mechanism allowing foreign investors to access China's bond market, has not had an immediate impact due to uncertainty in the timeline and lack of detailed rules.
Financing costs are expected to rise due to regulatory pressure, with 10-year treasury bond yields and 1-year SHIBOR forecasted to remain at 3.8% and 4.3% respectively by the end of 2017.
Property developers and LGFVs (Local Government Financing Vehicles) are most affected by tighter regulations and reduced bond issuance.

Indonesia

Stock Picks and Valuation

Top picks for investment include ASII, BBNI, CTRA, AISA, WSKT, BSDE, ERAA, PTPP, WSBP, and ROTI.
AISA and ROTI are highlighted for attractive valuations and improving fundamentals.
Construction names such as WSBP and WSKT are particularly appealing due to their low valuations and strong growth potential.
BBNI continues to trade at single-digit PE and below historical P/B, making it a value play.
CTRA is recommended due to good governance and strong fundamentals.

Market Outlook

JCI (Jakarta Composite Index) is expected to reach 6,200 by year-end, based on 14.2x 2018F EPS.
Earnings growth is accelerating, with net income growth of 25% in 1Q17.
Ratings upgrades are expected to bring US$2b-3b into the market, with Japanese investors likely to increase their positions.

Malaysia

Corporate Results

Tune Protect Malaysia (TIH): 1Q17 results were weaker than expected, but collaborations with AirAsia are expected to drive a strong recovery in 2018.
KLCC Property Holdings (KLCCSS): Two anchor segments are experiencing temporary hiccups, but better performance is anticipated in 2H17.
Kuala Lumpur Kepong (KLKM): 2QFY17 core net profit rose by 39.8% yoy, above expectations, due to stronger-than-expected production recovery.
Dividend yield for KLCCSS in 1Q17 was 8.6 sen, representing a $87.9% payout ratio.

Singapore

Market Update

IHHealthcare (IHHSPO): Trading at S1.92, with a target of S1.80, the company is experiencing cost pressure that is dampening its performance.

Thailand

Stock Picks and Valuation

Banpu (BANPU TB): Expected to hit a quarterly peak in 2Q17, with a target of Bt24.00.
PTT (PTT TB): Strong earnings growth outlook, supported by its subsidiaries.

Key Indices

Index	Prev Close	1D %	1W %	1M %	YTD %
DJIA	20894.8	0.4	-0.4	1.7	5.7
S&P 500	2394.0	0.5	-0.3	1.9	6.9
FTSE 100	7496.3	0.3	0.6	5.4	4.9
AS30	5811.2	0.7	-1.0	-1.3	1.6
CSI 300	3411.2	0.2	0.4	-1.6	3.1
FSSTI	3213.6	-0.1	-1.6	2.3	11.6
HSCEI	10374.3	1.0	-0.7	3.2	10.4
HSI	25391.3	0.9	0.1	5.6	15.4
JCI	5749.4	-0.7	1.1	1.5	8.5
KLCI	1775.0	0.4	-0.2	1.1	8.1
KOSPI	2304.0	0.7	0.6	6.4	13.7
Nikkei 225	19678.3	0.4	-1.0	5.7	3.0
SET	1557.7	0.5	1.3	-0.8	1.0
TWSE	9997.3	0.5	-0.4	2.9	8.0
BDI	954	-0.2	-4.0	-20.2	-0.7
CPO (RM/ml)	2878	-0.4	2.1	10.1	-10.0
Brent Crude (US$/bbl)	54	0.5	4.0	3.7	-5.2

Top Buys

Company	Recommendation	Target Price (Rp)	Current Price (Rp)	Potential Upside (%)
AISA	BUY	2,500	2,150	16.3
ASII	BUY	9,600	8,775	9.4
BBNI	BUY	7,100	6,825	4.0
BSDE	BUY	2,290	1,800	27.2
CTRA	BUY	1,410	1,170	20.5
PTPP	BUY	5,100	3,080	65.6
WSBP	NR	n.a.	n.a.	n.m.
WSKT	BUY	3,350	2,420	38.4

Key Assumptions

Country/Region	2016 GDP (yoy)	2017F GDP (yoy)	2018F GDP (yoy)
US	1.6	2.7	2.5
Euro Zone	1.7	1.6	1.5
Japan	1.0	0.9	1.2
Singapore	2.0	2.4	2.8
Malaysia	4.2	4.5	4.7
Thailand	3.2	3.3	3.1
Indonesia	5.0	5.2	5.5
Hong Kong	1.9	2.0	2.0
China	6.7	6.3	6.3
Brent (Average)	45	55	60
CPO	2,653	2,600	2,500

Corporate Events

Roadshow with Petronas Dagangan Bhd: Hong Kong, 22-23 May
Analyst Marketing on China Internet Sector: Hong Kong, Singapore, Kuala Lumpur, 22-23 May
Roadshow with Singtel: Canada, 26 May
Roadshow with Tongda Group Holdings: Hong Kong, 1 June
Roadshow with United Overseas Bank: Canada, 2 June
Group meeting with Fortune REIT: Hong Kong, 7 June
Roadshow with PT Siloam Int'l Hospital: Canada, 5-16 June
Analyst Presentation on SIN Strategy: Kuala Lumpur, 15-16 June
Luncheon with United Overseas Bank: Singapore, 3 July
Roadshow with Top Glove Corporation: US/Canada, 5-12 September