Regional Morning Notes Summary
Core Content Overview
This document provides an analysis of market updates and stock performance for key companies and regions on Wednesday, 04 February 2015. It includes updates on 4G development in China, marketing sales in Indonesia, banking sector performance in Malaysia, and results from Singapore. Additionally, it features key financial indices, top picks, and corporate events.
Main Points by Region
China
- China Mobile (941 HK):
- 4G development is on a fast track, with 90.1 million subscribers and over 700,000 TD-LTE base stations in 2014.
- Management targets 250 million 4G subscribers and 1 million TD-LTE base stations by 2015.
- Capex is expected to decline from Rmb225.2b in 2014 to Rmb160b in 2015 and Rmb140b in 2016.
- Earnings are expected to rebound in 2H15 due to strong 4G user growth and cost reductions.
- Valuation has improved with a target price of HK$118.00 (up from HK$110.00), reflecting strong growth prospects.
- Maintain BUY recommendation.
Indonesia
- Bumi Serpong Damai (BSDE IJ):
- Expected to achieve Rp7.5t in 2015 marketing sales, up 15% yoy, driven by higher ASP and new project launches.
- Four new projects will be launched in 2015, contributing to Rp1.5t in marketing sales.
- Potential recurring revenue from ICE (Rp270b) and AEON Mall (Rp216b).
- Valuation is undemanding at 9.6x 2015F PE and 2.1x 2015F P/B, with a target price of Rp2,500.
- Maintain BUY recommendation.
Key Financial Indices
| Index |
Previous Close |
1D % |
1W % |
1M % |
YTD % |
| DJIA |
17666.4 |
1.8 |
1.6 |
-0.9 |
-0.9 |
| S&P 500 |
2050.0 |
1.4 |
1.0 |
-0.4 |
-0.4 |
| FTSE 100 |
6871.8 |
1.3 |
0.9 |
4.9 |
4.7 |
| AS30 |
5666.2 |
1.4 |
2.8 |
4.6 |
5.2 |
| CSI 300 |
3437.4 |
2.5 |
-3.8 |
-2.7 |
-2.7 |
| FSSTI |
3408.0 |
-0.4 |
-0.1 |
1.1 |
1.3 |
| HSCEI |
11768.6 |
1.6 |
-2.2 |
-3.9 |
-1.8 |
| HSI |
24554.8 |
0.3 |
-1.0 |
2.9 |
4.0 |
| JCI |
5291.7 |
0.3 |
0.3 |
0.9 |
1.2 |
| KLCI |
1781.3 |
-0.1 |
-0.8 |
1.6 |
1.1 |
| KOSPI |
1952.0 |
-0.0 |
-0.0 |
1.3 |
1.9 |
| Nikkei 225 |
17335.9 |
-1.3 |
-2.4 |
-0.7 |
-0.7 |
| SET |
1602.5 |
1.3 |
0.8 |
7.0 |
7.0 |
| TWSE |
9448.7 |
0.7 |
-0.8 |
1.5 |
1.5 |
| BDI |
577 |
-2.2 |
-16.1 |
-25.2 |
-26.2 |
| CPO (RM/mt) |
2126 |
-2.6 |
-5.6 |
-7.7 |
-7.5 |
| Nymex Crude |
52 |
4.2 |
11.7 |
-2.0 |
-3.0 |
Top Picks
BUY
- Sunac China (1918 HK): Target price HK$9.29, potential upside +33.9%
- ICBC (1398 HK): Target price HK$6.90, potential upside +23.7%
- Bank Mandiri (BMRI LJ): Target price Rp12,500, potential upside +10.1%
- Ijm Corp (IJM MK): Target price Rp7.60, potential upside +10.1%
- DBS (DBS SP): Target price S$22.68, potential upside +16.1%
- Pacific Radiance (PACRA SP): Target price S$1.00, potential upside +27.4%
- Krong Thai Bank (KTB TB): Target price Bt29.00, potential upside +25.0%
- Sino Thai Engr (STEC TB): Target price Bt30.25, potential upside +17.5%
SELL
- UMWH Holdings (UMWH MK): Target price Rp10.00, potential downside -8.3%
Key Assumptions
| Region |
GDP (% yoy) |
2013 |
2014 |
2015F |
| US |
3.2 |
1.9 |
2.7 |
3.2 |
| Euro Zone |
1.4 |
-0.4 |
0.9 |
1.4 |
| Japan |
2.0 |
1.5 |
1.5 |
2.0 |
| Singapore |
3.3 |
3.9 |
3.2 |
3.3 |
| Malaysia |
5.2 |
4.7 |
5.9 |
5.2 |
| Thailand |
3.9 |
2.9 |
1.5 |
3.9 |
| Indonesia |
5.8 |
5.8 |
5.2 |
5.8 |
| Hong Kong |
3.7 |
2.9 |
3.5 |
3.7 |
| China |
7.0 |
7.7 |
7.2 |
7.0 |
| Indicator |
2014 |
2015F |
2016F |
| Brent (US$/bbl) |
99.45 |
65 |
70 |
| CPO (US$/mt) |
722 |
765 |
788 |
| BDI |
1,101 |
1,300 |
1,400 |
Corporate Events
- United Overseas Bank Economists Group Luncheon: Singapore, 4 Feb
- Singapore and Indonesia Telecommunications Sectors Analyst Presentation: Singapore, 4 Feb and 6 Feb
- Oil & Gas Sector Analyst Presentation: Hong Kong, 5 Feb - 6 Feb
- PTT Global Chemical Corporate Roadshow: Kuala Lumpur, 23 Feb - 24 Feb
- ASEAN Conference: Taipei, 17 Mar - 18 Mar
Summary of Key Financial Highlights for China Mobile
| Metric |
2014F |
2015F |
2016F |
| Net turnover (Rmbm) |
645,114 |
673,524 |
705,504 |
| EBITDA (Rmbm) |
230,168 |
240,219 |
255,152 |
| Operating profit (Rmbm) |
116,312 |
119,527 |
131,958 |
| Net profit (Rmbm) |
108,455 |
112,874 |
124,886 |
| EPS (fen) |
539.4 |
561.3 |
621.0 |
| PE (x) |
15.4 |
14.8 |
13.4 |
| P/B (x) |
2.0 |
1.8 |
1.7 |
| EV/EBITDA (x) |
7.2 |
6.9 |
6.5 |
| Net margin (%) |
16.8 |
16.8 |
17.7 |
| Net debt/(cash) to equity (%) |
-4.7 |
-4.3 |
-7.0 |
| ROE (%) |
13.3 |
12.9 |
13.7 |
Summary of Key Financial Highlights for Bumi Serpong Damai
| Metric |
2014F |
2015F |
2016F |
| Net turnover (Rpb) |
6,614 |
7,417 |
7,843 |
| EBITDA (Rpb) |
2,921 |
3,284 |
3,441 |
| Operating profit (Rpb) |
2,755 |
3,144 |
3,296 |
| Net profit (Rpb) |
3,796 |
2,690 |
2,804 |
| EPS (Rp) |
216.9 |
153.7 |
160.2 |
| PE (x) |
13.6 |
9.6 |
13.1 |
| P/B (x) |
3.6 |
2.4 |
1.8 |
| EV/EBITDA (x) |
13.6 |
12.9 |
11.1 |
| Net margin (%) |
57.4 |
36.3 |
35.7 |
| Net debt/(cash) to equity (%) |
-2.3 |
-27.8 |
-13.4 |
| ROE (%) |
34.3 |
21.9 |
20.7 |
Summary of Key Financial Highlights for Bumi Serpong Damai (Marketing Sales)
| Project |
2013 |
2014 |
2015F |
| BSD City |
2,827 |
1,377 |
2,000 |
| Nava Park |
- |
600 |
600 |
| Balikpapan - Gran City |
- |
368 |
300 |
| Taman Permata Buana |
162 |
74 |
93.5 |
| Taman Banjar Wijaya |
139 |
105 |
150 |
| Grand Wisata |
300 |
382 |
400 |
| Kota Wisata |
362 |
337 |
340 |
| Legenda Wisata |
79 |
117 |
200 |
| Grand City Samarinda |
- |
- |
100 |
| Total Residential |
3,870 |
3,361 |
4,184 |
| Total Commercial |
1,528 |
2,887 |
3,318 |
| Land Plot Sales to JV |
1,944 |
260 |
- |
| Total Marketing Sales |
7,343 |
6,508 |
7,501 |
Summary of Key Financial Metrics
China Mobile
- Profitability:
- EBITDA margin: 35.7%
- Pre-tax margin: 21.8%
- Net margin: 16.8%
- ROE: 12.9%
- Growth:
- Turnover: 4.4%
- EBITDA: 4.4%
- Pre-tax profit: 4.1%
- Net profit: 4.1%
- Leverage:
- Debt to total capital: 0.7
- Net debt/(cash) to equity: -4.3%
Bumi Serpong Damai
- Profitability:
- EBITDA margin: 35.7%
- Pre-tax margin: 21.8%
- Net margin: 36.3%
- ROE: 21.9%
- Growth:
- Turnover: 4.4%
- EBITDA: 6.2%
- Pre-tax profit: 10.6%
- Net profit: 10.6%
- Leverage:
- Debt to total capital: 0.7
- Net debt/(cash) to equity: -15.7%
Summary of Key Financial Impact
- China Mobile: Earnings rebound expected in 2H15, with improved free cash flow in 2016. Target price lifted to HK$118.00 due to lower future capex assumptions.
- Bumi Serpong Damai: 2015 marketing sales expected to hit Rp7.5t, with potential recurring revenue from ICE and AEON Mall. Valuation remains undemanding, and target price is Rp2,500.
Analyst Contacts
