20161101-大华继显-Regional_Morning_Notes_30页_1mb

报告摘要

Regional Morning Notes Summary - 01 November 2016

Core Content

This document provides a summary of the financial performance and outlook for various markets and companies in the Asia-Pacific region. It includes banking results, company-specific updates, key indices, corporate events, and valuation analysis for selected stocks.

Main Points by Region

China

Banking Sector:
- 3Q16 results showed lacklustre top-line growth but improved asset quality.
- Net interest income (NII) fell due to net interest margin (NIM) compression, but NIM is expected to stabilise in the coming quarters.
- Banks have reported a slight improvement in NPL ratios, attributed to government measures and commodity price rebounds.
- ICBC and CCB are highlighted as top picks due to better asset quality and capital ratios.
- Overall, the banking sector remains cautious due to ongoing NPL concerns, despite near trough valuations.

Indonesia

Bumi Serpong Damai (BSDE):
- 3Q16 net income increased by 7.2% yoy, driven by stronger recurring income.
- Recommended as BUY with a target price of Rp2,790.
Semen Indonesia (SMGR):
- 9M16 net profit declined by 8.4% yoy, slightly below expectations.
- Recommended as HOLD with a target price of Rp10,200.

Malaysia

Banking Sector:
- September 2016 banking stats indicate a moderating growth environment with declining loan approvals and applications.
Deleum (DLUM):
- Downgraded to SELL due to a 60% cut in profit forecast and weaker dividend visibility.

Singapore

Banking Sector:
- 3Q16 results show that most banks have already recognised bulk of vulnerable and lumpy exposures as NPLs.
DBS Group Holdings (DBS SP):
- Recommended as BUY with a target price of S$18.98.
- Trimmed costs while maintaining a strong CET-1 CAR.

Thailand

Dynasty Ceramic (DCC TB):
- 3Q16 results were decent, with good performance expected to continue in 2017.
- Recommended as HOLD with a target price of Bt4.80.
PTT (PTT TB):
- 3Q16 results show unexpected lower gas costs positively impacting earnings.
- Recommended as BUY with a target price of Bt405.

Key Indices

Index	Previous Close	1 Day %	1 Week %	1 Month %	YTD %
DJIA	18142.4	(0.1)	(0.4)	(0.9)	4.1
S&P 500	2126.2	(0.0)	(1.2)	(1.9)	4.0
FTSE 100	6954.2	(0.6)	(0.5)	0.8	11.4
AS30	5368.4	(0.6)	(2.8)	(2.8)	0.4
CSI 300	3336.3	(0.1)	(0.9)	2.6	(10.6)
FSSTI	2813.9	(0.1)	(1.5)	(1.9)	(2.4)
HSCEI	9559.4	0.5	(3.0)	(0.2)	(1.1)
HSI	22934.5	(0.1)	(2.8)	(1.6)	4.7
JCI	5422.5	0.2	0.0	1.1	18.1
KLCI	1672.5	0.1	(0.3)	1.2	(1.2)
KOSPI	2008.2	(0.6)	(1.9)	(1.7)	2.4
Nikkei 225	17425.0	(0.1)	1.1	5.9	(8.5)
SET	1495.7	0.1	(0.3)	0.8	16.1
TWSE	9290.1	(0.2)	(0.3)	1.3	11.4
BDI	857	2.8	3.1	(2.1)	79.3
CPO (RM/ml)	2804	(0.4)	2.4	0.3	27.5
Brent Crude	49	(4.1)	(5.5)	(0.9)	30.4

Top Picks

BUY

Air China (753 HK): Target price HK$7.00, current price HK$5.10, upside 37.3%
Ping An Insurance (2318 HK): Target price HK$47.00, current price HK$40.95, upside 14.8%
Ciputra Property (CTRP LJ): Target price HK$960.00, current price HK$760.00, upside 26.3%
Indosat (ISAT LJ): Target price HK$9,500.00, current price HK$6,600.00, upside 43.9%
Genting Bhd (GENT MK): Target price HK$9.90, current price HK$7.84, upside 26.3%
City Dev (CIT SP): Target price HK$10.36, current price HK$8.49, upside 22.0%
OCBC (OCBC SP): Target price HK$10.45, current price HK$8.48, upside 23.2%
Bangkok Dusit (BDMS TB): Target price HK$31.20, current price HK$22.80, upside 36.8%
Siam Cement (SCC TB): Target price HK$645.00, current price HK$500.00, upside 29.0%

SELL

Hartalega (HART MK): Target price HK$3.10, current price HK$4.90, downside 36.7%

Key Assumptions

Region	2015 GDP % yoy	2016F GDP % yoy	2017F GDP % yoy
US	2.6	2.0	2.7
Euro Zone	2.0	1.4	1.0
Japan	0.5	0.6	0.8
Singapore	2.0	1.4	1.7
Malaysia	5.0	4.2	4.5
Thailand	2.8	3.2	3.5
Indonesia	4.8	5.0	5.2
Hong Kong	2.4	2.1	1.8
China	6.9	6.5	6.2

Corporate Events

Event	Venue	Start Date	End Date
Ekovest Bhd Corporate Roadshow	Singapore	3 Nov	3 Nov
Valuetronics Tea Session	Singapore	7 Nov	7 Nov
Cityneon Roadshow	Hong Kong	9 Nov	9 Nov
Xstep International Holdings Roadshow	Kuala Lumpur	15 Nov	15 Nov
Ministry of Finance Indonesia	Taipei	21 Nov	22 Nov
Indo Strategy Analyst Marketing	Taipei	23 Nov	23 Nov
Metro Pacific Investments Roadshow	Canada	24 Nov	25 Nov

Company Results - BYD Company (1211 HK)

3Q16 net profit: Rmb1.4b, down 6% yoy, flat qoq.
Core net profit: Rmb1.397b, up 316% yoy.
9M16 net profit: Rmb3.664b, up 87% yoy.
2016 full-year net profit estimate: Rmb5.05b, up 8%.
2017 full-year net profit estimate: Rmb5.32b, up 10%.
2018 full-year net profit estimate: Rmb6.92b, up 10%.
EV sales: Declining since June 2016, with 92% yoy growth in 3Q16.
EV sales assumptions: 132,000 units in 2016, 228,000 in 2017, 288,000 in 2018.
Monorail projects: Two projects in Shenzhen and Shantou, but profit details are not yet disclosed.
EV subsidies: Expected to be cut by 20% in 2017, potentially affecting earnings.
Recommendation: Maintain HOLD, target price HK$54.00.

Valuation Summary

Company	Price (HK$)	Target Price (HK$)	Upside (%)	Rec	PE (2016F)	PE (2017F)	P/B (2016F)	P/B (2017F)	ROE (2016F)	ROE (2017F)	ROA (2016F)	ROA (2017F)
ICBC	4.67	5.50	18.4	BUY	5.4	5.2	0.7	0.7	14.4	13.4	1.2	1.1
CCB	5.68	6.30	11.0	BUY	5.5	5.4	0.8	0.7	14.8	13.7	1.2	1.1
ABC	3.27	3.00	-5.9	HOLD	5.3	5.3	0.7	0.6	13.8	12.6	0.9	0.8
BOC	3.48	3.40	-2.9	HOLD	5.4	5.2	0.6	0.6	12.1	11.5	0.9	0.9
BoCom	5.91	5.35	-10.2	HOLD	6.2	6.2	0.7	0.6	11.3	10.5	0.8	0.7
CMB	18.92	20.75	9.2	BUY	6.8	6.4	1.2	1.1	5.6	5.8	1.2	1.1
Minsheng	8.85	7.70	-12.9	HOLD	6.3	5.9	0.9	0.9	14.1	13.2	0.9	0.9

Analysts

Jonathan Koh, CFA: +65 6590 6620, jonathankoh@uobkayhian.com
Jasmine Duan: +852 2826 1351, jasmine.duan@uobkayhian.com.hk
Ken Lee: +852 2236 6760, ken.lee@uobkayhian.com.hk
Sophie Yu: +852 2236 6392, sophie.yu@uobkayhian.com.hk

Summary

The report outlines a mixed outlook across the Asia-Pacific region. In China, banks showed improved asset quality but weak top-line growth, with ICBC and CCB highlighted as top picks. BYD's 3Q16 results were in line with guidance, but slowing EV sales and uncertain subsidies pose risks. In Indonesia, BSDE saw a 7.2% yoy increase in net income, while Semen Indonesia reported lower-than-expected profits. Malaysia's banking sector showed signs of moderation, and Deleum was downgraded. Singapore's DBS Group maintained strong capital ratios. Thailand's PTT saw a positive impact from lower gas costs, while Dynasty Ceramic showed good performance. Key indices indicate moderate to weak performance across the region, with some showing positive YTD growth. The report also highlights upcoming corporate events and reiterates the valuation and recommendation for selected stocks.

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