20160905-大华银行-Regional_Morning_Notes_30页_1mb

报告摘要

Regional Morning Notes Summary - 05 September 2016

Core Content Overview

This document provides a detailed analysis of economic and market trends in key Asian regions including China, Indonesia, Malaysia, Singapore, and Thailand. It also highlights company updates and investment recommendations for specific firms. The analysis is based on economic data, company performance, and future outlooks, with a focus on growth, earnings, and valuation metrics.

Main Points by Region

China

Economic Data Preview:
- FAI (Fixed Asset Investment): Expected to continue slowing down, with a forecast of 7.8% yoy in August 2016, down from 8.1% in July.
- IP (Industrial Production): Rebounded to 6.3% yoy in August, driven by recovery in power generation and steel output.
- Retail Sales: Projected to grow by 10.4% yoy, supported by strong car and property sales.
- CPI & PPI: CPI inflation is expected to remain flat at 1.8% yoy, while PPI deflation is projected to decline to -1.2% yoy.
- M2 Growth: Rebounded to 10.7% yoy in August, with increased liquidity injection and bond issuance.
- Economic Outlook: Economic data might weaken in September due to the G20 summit and overcapacity reduction measures. Supportive policies are expected in the fourth quarter.
Company Update: China TCM (570 HK)
- Performance: Net income increased significantly in 2017, with strong growth in the EPC (Engineering, Procurement, and Construction) segment.
- Key Drivers:
  - Recovery in the finished drug segment in 2017.
  - Potential asset injections from the parent company (CNPGC).
  - Expansion into new hospitals and inclusion of TCM granules in the National Reimbursement Drug List.
- Valuation: Maintained BUY recommendation with a target price of HK$5.14 (up from HK$4.80). Current valuation is at a 24% discount to peers.
- Financials:
  - 2016F net profit: Rmb1,023.6m
  - 2017F net profit: Rmb1,267.6m
  - 2018F net profit: Rmb1,435.7m
  - EBITDA margin: Expected to improve in 2017.
  - Net margin: 15.3% in 2016F, projected to rise to 16.1% in 2017F.
Key Assumptions:
- GDP Growth: China is forecasted to grow at 6.2% in 2017, down from 6.5% in 2016.
- Brent Crude: Expected to average at 54 US$/bbl in 2017, up from 42 in 2016.
- CPO (Crude Palm Oil): Projected to reach 2,600 RM/mt in 2017, up from 2,500 in 2016.

Indonesia

Company Update: Pembangunan Perumahan (PTPP IJ)
- Performance: Net income surged 121% yoy in 1H16 to Rp355b, driven by EPC projects.
- Earnings Guidance: Raised 2016/2017 earnings estimates by 8.2% due to increased EPC contribution.
- Segment Performance:
  - EPC segment revenue: Rp829b (up 789% yoy).
  - EBIT: Rp134b (up 50x yoy).
  - EBIT margin: 16.1% (vs 5.4% for construction).
- Target Price: Rp5,500, up from Rp4,310.

Malaysia

Alpha Picks: Highlighted companies with strong growth prospects include BIMB, Bumi Armada, Kerjaya Prospek, MRCB-Quill REIT, and Tenaga Nasional.
Sector Update: Banking
- Sector Earnings: 10.1% contraction in 2Q16, with rising impairments as the key drag.
Company Update: VS Industry (VSI MK)
- Impairment Guidance: Guided for a RM9.8m impairment in FY16 due to investment in a solar power plant in Mongolia.
- Target Price: RM1.70, up from RM1.42.

Singapore

Alpha Picks: Highlighted key picks with share price catalysts include Bumitama, CAO, FLT, and SOG. SELL on Starhub.
Company Update: Singapore Telecommunications (ST SP)
- Performance: Facing challenges from Bharti Airtel, particularly from Reliance Jio.
- Target Price: S$4.53, up from S$3.87.

Thailand

Company Update: Samart Corp (SAMART TB)
- Performance: Expected to move ahead to next year, with a BUY recommendation.
- Target Price: Bt19.10, up from Bt15.30.

Key Indices Overview

Index	Previous Close	1D %	1W %	1M %	YTD %
DJIA	18492.0	0.4	0.5	-0.3	6.1
S&P 500	2180.0	0.4	0.5	-0.1	6.7
FTSE 100	6894.6	2.2	1.1	1.5	10.4
AS30	5470.6	-0.7	-2.4	-2.1	2.4
CSI 300	3314.1	0.4	0.2	3.4	-11.2
FSSTI	2803.9	-0.4	-1.9	-0.9	-2.7
HSCEI	9686.9	0.8	1.4	6.1	0.3
HSI	23266.7	0.5	1.6	5.1	6.2
JCI	5353.5	0.4	-1.6	-1.2	16.6
KLCI	1671.8	0.1	-0.5	0.5	-1.2
KOSPI	2038.3	0.3	0.0	1.0	3.9
Nikkei 225	16925.7	-0.0	3.5	4.1	-11.1
SET	1521.5	-1.2	-1.8	0.2	18.1
TWSE	8987.6	-0.2	-1.6	-1.2	7.8
BDI	720	1.1	0.3	13.2	50.6
CPO (RM/mt)	2777	-1.7	-1.2	16.1	26.2
Brent Crude	47	3.0	-6.2	12.0	25.6

Top Picks and Sell Recommendations

BUY Recommendations

Air China (753 HK): Target price HK$8.40, upside +46.1%.
Ping An Insurance (2318 HK): Target price HK$47.00, upside +13.0%.
Ciputra Property (CTRP LJ): Target price HK$960.00, upside +61.3%.
Indosat (ISAT LJ): Target price HK$9,500.00, upside +63.8%.
Genting Bhd (GENT MK): Target price HK$9.75, upside +23.1%.
City Dev (CIT SP): Target price S$10.36, upside +20.7%.
OCBC (OCBC SP): Target price S$10.30, upside +19.9%.
Bumitama (Bumitama): Target price S$15.30, upside +23.9%.
CAO (CAO): Target price S$11.90, upside +11.9%.
FLT (FLT): Target price S$0.50, upside +23.9%.
SOG (SOG): Target price S$0.50, upside +11.9%.
Samart Corp (SAMART TB): Target price Bt19.10, upside +32.7%.
Siam Cement (SCC TB): Target price Bt630.00, upside +17.1%.

SELL Recommendation

Hartalega (HART MK): Target price HK$3.10, downside -31.1%.

Corporate Events

Inari Amerton: Corporate Roadshow in Taipei (6 Sep)
China Power International: Roadshow in Shanghai (7 Sep)
Frasers Logistics & Industrial Trust: Luncheon in Hong Kong (7 Sep)
O-Net Technologies: Luncheon in Hong Kong (8 Sep)
Sihuan Pharmaceutical Holdings Group: Roadshow in Taipei (8-9 Sep)
China Resources Gas: Roadshow in Canada (12-13 Sep)
Skyworth Digital Holdings: Group Meeting in Hong Kong (21 Sep)
Sembcorp Industries Corp: Roadshow in Canada (26-27 Sep)
Regional Financial and Telco Sector Analyst Presentation: UK/Europe (26-30 Sep)
Xstep International Holdings: Roadshow in Taipei (7 Oct)
Metro Pacific Investments: Roadshow in Canada (26-28 Oct)
Xstep Roadshow: Kuala Lumpur (15 Nov)

Key Financial Metrics for China TCM (570 HK)

EPS (Fen): 16.6 in 2015, 22.9 in 2016F, 28.4 in 2017F, 32.1 in 2018F.
PE (x): 20.5 in 2015, 14.8 in 2016F, 12.0 in 2017F, 10.6 in 2018F.
P/B (x): 2.7 in 2015, 1.3 in 2016F, 1.2 in 2017F, 1.1 in 2018F.
EV/EBITDA (x): 23.5 in 2015, 9.4 in 2016F, 7.8 in 2017F, 7.0 in 2018F.
Net Profit (Rmbm): 633.1 in 2016F, 1,267.6 in 2017F, 1,435.7 in 2018F.
EPS Growth: 18.4% CAGR (2016-2018F).
Valuation Discount: 24% below peers based on 12-month forward PE.

Summary of Key Financial Highlights

Earnings Recovery: Expected for the finished drug segment in 2017.
Asset Injection: Parent company (CNPGC) may inject valuable TCM assets into CTCM.
EPC Growth: Strong performance in EPC segment is a key driver for PTPP's growth.
Market Conditions: Positive outlook for TCM granules, with limited competition expected for 2-3 years.
Valuation: China TCM remains undervalued relative to peers.
Economic Outlook: China's economic data may weaken in September due to G20-related shutdowns and overcapacity policies.