20130823-大和证券-Daiwa_Asia_Pacific_Daily_44页_1mb

Asia Pacific Daily Summary - 23 August 2013

Core Content

This document is a financial report from Daiwa, summarizing key market updates, company performance, and analyst ratings for the Asia Pacific region. It includes insights on stock market movements, company earnings, and macroeconomic indicators, with a focus on the cement, financial, and real estate sectors.

Key Company Updates

West China Cement (2233 HK)

• Rating Change: Upgraded from Underperform to Hold
• Earnings: 1H13 net income rose 13% YoY to CNY168m, below forecast
• Capacity Expansion: Plans to add two production lines over the next two years, increasing total capacity to 27m tpa by 2015
• Financials:
  • Net profit for 2013E is expected at CNY479m
  • EPS for 2013E is forecasted at 0.105 (down 7% from previous forecast)
  • Target price increased to HKD1.28 (from HKD1.25), based on a 0.9x 2013E PBR
  • Gearing improved, with net debt-to-equity at 71% at end of 1H13
  • Gross margin fell to 17.6% (below expectations), attributed to lower production utilisation and higher energy costs
  • Effective tax rate rose to 21.2% in 1H13

Other Research Highlights

PetroChina (857 HK)

• Rating: Outperform

Geely Automobile (175 HK)

• Rating: Buy
• Earnings: 1H13 core earnings up 137% YoY

AviChina Industry & Technology (2357 HK)

• Rating: Buy
• Earnings: More good news expected in 2H13

Korea Banks Sector

• Rating: Positive
• Reason: Defensive play against the likely Fed tapering

E.Sun Financial (2884 TT)

• Rating: Buy

Financial Summary

Revenue and Profit Projections

EPS Forecast Revisions

Valuation Metrics

• PER: 8.9 (2013E), 8.4 (2014E), 7.9 (2015E)
• PBR: 0.8 (2013E), 0.8 (2014E), 0.7 (2015E)
• EV/EBITDA: 5.4 (2013E), 4.7 (2014E), 4.0 (2015E)
• ROE: 9.7 (2013E), 9.4 (2014E), 9.3 (2015E)
• Net Debt-to-Equity: 62.0% (2013E), 45.7% (2014E), 28.8% (2015E)

Market Analysis

Tokyo Stock Market

• Trend: Technical analysis suggests a near-term trend reversal
• Key Events:
  • G20 summit (5-6 September)
  • Expected rebound in stock prices after the summit
  • 6 September could be a turning point due to job data and monetary policy discussions

US Market

• Focus: Jackson Hole Summit for Fed tapering clues
• Expectations:
  • Possible impact of QE3 wind-down on markets
  • US job data to be released on 6 September
  • Fed expected to purchase $2.75-3.5bn of 7-10Y USTs

Euro Area

• PMI Trends:
  • Euro area composite PMI rose to 51.7 (26-month high)
  • German manufacturing PMI at 52.0, services PMI at 52.4
  • French services PMI slipped below 50, while manufacturing PMI remained unchanged

Events and Roadshows

Upcoming Events

Daiwa Asian Events

Summary of Key Points

• West China Cement reported 1H13 earnings below expectations, but its balance sheet and valuation are seen as improving, leading to a rating upgrade from Underperform to Hold.
• Macro Research highlights the strengthening of PMIs in the Euro area, suggesting a recovery, while French services PMI fell below the 50 threshold.
• Technical Analysis indicates a potential trend reversal in the Tokyo stock market, with 6 September being a critical date.
• Financials show that WCC's net profit and EPS are expected to grow modestly, with a focus on improving cash flow and reducing gearing.
• Market Events include the G20 summit, Jackson Hole Summit, and key economic data releases that could influence market sentiment.
• Valuation Metrics suggest that WCC's PBR is more relevant than EV/tonne, given the structural downcycle in the cement sector.