20170303-大华继显-Regional_Morning_Notes_19页_1mb

Regional Morning Notes Summary

Core Content Overview

This document provides an analysis of stock performance and company updates for several Asian markets and specific companies on 03 March 2017. It includes updates on Jacobson Pharma Corporation, Astra Agro Lestari, and other market participants, along with key financial metrics, valuations, and market indices.

Main Points by Region

Hong Kong

• Jacobson Pharma Corporation (2633 HK/BUY/HK$1.70/Target: HK$2.29)
  • Key Takeaways:
    • Expected to gain 30% market share in the non-hospital authority segment (currently ~20%) by leveraging the exit of unqualified players without PIC/S certification.
    • Generic versions of Crestor and Abilify are expected to be launched in 1H17.
    • The company has a strong pipeline of 98 generic drugs.
    • Net profit growth forecast maintained at 32.8% for FY17 and 46.1% for FY18.
    • Maintained BUY recommendation with an upside of +34.7%.
  • Financial Highlights:
    • Revenue from generic drugs accounted for 88.0% of total revenue in 1HFY17.
    • EPS is expected to grow from 8.0 (FY16) to 10.7 (FY17F), 15.6 (FY18F), and 18.7 (FY19F).
    • Target price based on SOTP methodology: 18.0x 2017F PE for proprietary medicine and 15.0x 2017F PE for generic drugs.
    • Company is trading at 11.9x 2017F PE, representing a PEG of 0.37.
    • Net margin is expected to increase from 13.4% (FY16) to 21.4% (FY19F).
    • Net debt/(cash) to equity is projected to decrease from 39.3% (FY16) to -7.1% (FY19F).
    • Dividend yield is expected to rise from 9.0% (FY16) to 2.8% (FY19F).
    • Current market cap is HK$3,086.6 million.

Indonesia

• Astra Agro Lestari (AALI IJ/BUY/Rp15,325/Target: Rp19,045)
  • 4Q16 Results:
    • Net profit increased by 82% yoy to Rp861.6 billion, supported by Rp200.6 billion forex gains.
    • Full-year net profit of Rp2.007 trillion, up 224% yoy.
    • FFB production in 4Q16 reached 1.67 million tonnes (+14.8% yoy), contributing to 34% of 2016's total production.
    • CPO sales in 4Q16 reached 510,200 tonnes (+12.1% yoy), with a 15.6% yoy increase in global CPO prices.
  • Financial Highlights:
    • Net profit (adj.) is expected to grow from 1,872 billion (2017F) to 2,752 billion (2019F).
    • EPS is projected to rise from 972.8 (2017F) to 1,429.7 (2019F).
    • Maintain BUY recommendation with an upside of +24.3%.
    • Dividend yield is expected to decrease from 0.5% (2016) to 1.5% (2019F).
    • EV/EBITDA is projected to decline from 9.2 (2016) to 7.1 (2019F).
    • Company is trading at 13.5x PE (2016) and 10.7x PE (2019F).

Market Indices

Top Picks

Key Assumptions

Upcoming Global Off-Patent Blockbusters

Corporate Events

Key Financials Summary

Jacobson Pharma Corporation

Conclusion

• Jacobson Pharma is a leading generic drug manufacturer in Hong Kong with strong growth expectations driven by the off-patent trend of blockbuster drugs, expansion into the mainland market, and a growing market share in the non-hospital authority segment.
• Astra Agro Lestari reported strong 4Q16 results, with net profit up 82% yoy, supported by forex gains and higher CPO prices. The company is expected to maintain a BUY rating with a target price increase.
• The document highlights various market indices and their performance, showing mixed trends with some indices like the DJIA and S&P 500 showing positive growth, while others like the AS30 and KLCI showed declines.
• A list of upcoming off-patent drugs and corporate events is provided, offering insights into future earnings and market activities.