20180827-大华继显-Regional_Morning_Notes_33页_2mb

报告摘要

Regional Morning Notes Summary

Core Content Overview

This document provides a summary of stock performance and analysis for several Asian markets, focusing on company results, stock recommendations, key financials, and upcoming corporate events. It covers companies in China, Indonesia, Malaysia, Singapore, and Thailand, along with key indices and market outlooks.

Main Points and Key Information

China

Brilliance Auto (1114 HK):
- 1H18 net profit surged 54% yoy to Rmb3.57b, beating estimates.
- The earnings beat was driven by higher margins in BMW Brilliance (BBA) and the new 5-series launch.
- BMW is in talks to take a majority stake in BBA, which is not viewed negatively.
- Maintain BUY with a target price of HK$15.00.
- 2018-20 EPS estimates are Rmb1.37/Rmb1.66/Rmb1.82.
- Sales volume growth for BBA is expected at 14%/12%/9% yoy.
- Net margin is expected to rise to 10.7% in 2018 and 11.2% in 2019.
- Potential upside from new model launches, such as X3 and X5.
- Downside risk from continued weakness in the mini-bus segment.

Indonesia

Indocement TP (INTP IJ):
- Earnings performance is expected to bottom in 2Q18, with margin improvement and recovery expected in the next two quarters.
- Upgraded to BUY with a new target price of Rp18,200.
- Sales volume declined 11.7% qoq in 2Q18 due to seasonally weak demand and cost overruns.
- Sales volume rebounded in 2H18, with a 7% yoy increase to 9.7m tonnes.
- Company plans to raise selling prices in Java and outer Java regions to offset rising costs.
- 2018-20 net profit estimates are Rpb1,525/Rpb1,912/Rpb2,362.
- The company has 12 plants with a total annual cement production capacity of 25m tonnes.
- Key shareholders include Birchwood Omnia Ltd (51%).

Malaysia

Axiata (AXIATA MK):
- 2Q18 results were within expectations.
- Deconsolidation of Idea losses from 2H18 onwards.
- Reiterates a 85% dividend payout commitment.
- Maintains HOLD with a target of RM4.85.
Magnum (MAG MK):
- 2Q18 earnings were impacted by the FIFA World Cup and high prize payout ratio.
- Expected to trade sideways before gaming tax hike confirmation.
- Maintains BUY with a target of RM2.26.
Malaysian Resources Corporation (MRC MK):
- Upgraded to BUY with a target of RM1.01.
- Plans to strengthen core business through transformation and monetise non-core assets.
Sapura Energy (SAPE MK):
- Downgraded to SELL due to dilution from recapitalisation.
- Long-term earnings recovery remains possible.

Singapore

Synagie Corporation (SCL SP):
- Upgraded to BUY with a target of S$0.45.
- Focus on e-commerce growth.

Thailand

Electricity Generating PCL (EGCO TB):
- Maintains HOLD with a target of Bt246.00.
- Attractive yield from extra payment.
Ratchaburi Electricity Generating Hldg PCL (RATCH TB):
- Upgraded to BUY with a target of Bt62.00.
- Healthy outlook with earnings risk already factored into valuations.

Key Indices

Index	Previous Close	1D %	1W %	1M %	YTD %
DJIA	25790.4	0.5	0.5	1.3	4.3
S&P 500	2874.7	0.6	0.9	2.0	7.5
FTSE 100	7577.5	0.2	0.3	-1.6	-1.4
AS30	6357.9	0.0	-1.1	-0.5	3.1
CSI 300	3325.3	0.2	3.0	-5.6	-17.5
FSSTI	3213.0	-1.1	0.0	-3.4	-5.6
HSI	27671.9	-0.4	1.7	-3.9	-7.5
KLCI	1808.6	-0.1	1.8	2.2	0.7
Nikkei 225	22601.8	0.9	1.5	-0.5	-0.7
BDI	1697	-0.7	-1.5	1.3	24.2
CPO (RM/ml)	2194	0.0	1.1	1.5	-8.2
Brent Crude	76	-0.2	4.8	1.8	13.1

Top Picks (BUY)

Company	Ticker	Current Price	Target Price	Upside (%)
Baoshan Iron & Steel	600019 CH	8.07	9.53	18.1
Gudang Garam	GGRM LJ	74,000.00	85,000.00	14.9
PP Persero	PTPP LJ	1,875.00	3,700.00	97.3
Bumi Armada	BAB MK	0.69	1.06	53.6
OCBC	OCBC SP	11.16	13.68	22.6
SingTel	ST SP	3.20	3.98	24.4
Siam Cement	SCC TB	454.00	530.00	16.7

SELL Recommendation

Company	Ticker	Current Price	Target Price	Downside (%)
Hartalega	HART MK	7.05	4.02	-43.0

Key Assumptions

Region	2017 GDP	2018F GDP	2019F GDP
US	2.3	2.5	2.3
Euro Zone	2.4	2.3	1.9
Japan	1.7	1.8	1.9
Singapore	3.6	2.8	3.0
Malaysia	5.9	5.0	5.3
Thailand	3.9	4.2	4.2
Indonesia	5.1	5.3	5.4
Hong Kong	3.8	3.8	2.8
China	6.9	6.4	6.2
CPO (RM/mt)	2,783	2,400	2,500
Brent (US$/bbl)	55.00	67.00	66.50

Corporate Events

Event	Venue	Dates
Group Meeting with YiChang HEC	Hong Kong	28 Aug
Roadshow with China Traditional Chinese Medicine Holdings (570 HK)	Shanghai	30 Aug - 31 Aug
Roadshow with Bright Scholar Education Holdings Limited (BEDU US)	Singapore	3 Sep
Roadshow with Bright Scholar Education Holdings Limited (BEDU US)	Kuala Lumpur	4 Sep
Group Luncheon with Nexteer Automotive Group (1316 HK)	Hong Kong	11 Sep
UOB Kay Hian Asian Gems Conference	Singapore	9 Oct
UOB Kay Hian Annual Regional 1H2019 Strategy Conference	Kuala Lumpur	13 Nov

Summary of Key Financials and Metrics

Brilliance Auto (1114 HK)

Share Price: HK$10.90
Target Price: HK$15.00
Upside: +37.6%
Key Financials:
- 1H18 net profit: Rmb3.57b (+54% yoy)
- BBA profit contribution: Rmb3.74b (+38% yoy)
- Mini-bus segment loss: Rmb238m (-64% qoq)
PE Band: 6.6x (2018F), 5.5x (2019F), 5.0x (2020F)
Dividend Yield: 2.0% (2018F), 2.5% (2019F), 2.7% (2020F)
Net Debt/Equity: -3.7% (2018F), -3.4% (2019F), -2.7% (2020F)
Interest Cover: -1.4x (2018F), -0.6x (2019F), -0.1x (2020F)
ROE: 23.3% (2018F), 23.0% (2019F), 21.0% (2020F)

Indocement TP (INTP IJ)

Share Price: Rp16,500
Target Price: Rp18,200
Upside: +10.3%
Key Financials:
- 1H18 net profit: Rpb1,235 (+24.3% cut from previous estimate)
- 2018-20 net profit estimates: Rpb1,525/Rpb1,912/Rpb2,362
- PE (2019F): 49.2x
- Net margin: 7.9% (2018F), 11.2% (2019F), 13.2% (2020F)
- Dividend Yield: 1.2% (2018F), 1.9% (2019F), 2.6% (2020F)

Summary of Stock Impact and Risks

Brilliance Auto

Sales growth for BBA expected at 14% in 2018, 12% in 2019, and 9% in 2020.
Net margin is expected to rise to 10.7% in 2018 and 11.2% in 2019.
Risks: Larger-than-expected loss in mini-bus segment.
Upside: Stronger-than-expected sales of new models like X3 and X5.

Indocement TP

Earnings performance should bottom in 2Q18 with recovery expected in 3Q18 and 2H18.
Sales volume rebounded in 2H18, with a 7% yoy increase.
Margin improvement is expected due to higher demand and ASP hikes.
Risk: Continued losses in the mini-van segment.