20180914-大华继显-Regional_Morning_Notes_23页_1mb

报告摘要

Regional Morning Notes Summary

Core Content Overview

This document provides a comprehensive analysis of regional market trends and investment strategies for the period ending 14 September 2018, focusing on China, Hong Kong, Indonesia, Malaysia, Singapore, and Thailand. It includes sector updates, stock picks, sensitivity analyses, and corporate events, with an emphasis on consumption slowdown, aviation, and Macau gaming.

Main Points

China

Consumption Slowdown: Expected to impact air travel and Macau gaming. Management in airlines, travel agencies, and casinos hasn't seen signs of weakness in July and August, but a slowdown is anticipated.
CTRIP (CTRP US):
- Strong 2Q18 performance with higher-than-expected margin improvement.
- Guided for 13-18% revenue growth in 3Q18 and non-GAAP OPM of 20-21%.
- Cautious outlook for 4Q18 and 2019 due to macroeconomic uncertainties and renminbi depreciation.
- Sensitivity analysis shows a 5% revenue growth decline would result in a 2ppt drop in non-GAAP operating margin and a 16% EPS downside.
- Forecasted 19% yoy growth for 2H18 vs 12% for 1H18, with non-GAAP margin estimated at 22% for 2H18.
Aviation Sector:
- Stress tests for 2ppt and 4ppt revenue declines in 2019 for all three Chinese carriers.
- Lowered valuation multiples for airlines and Macau gaming due to a more risk-off environment.
- Stock Picks:
  - CSA (1055 HK): BUY, target price HK$6.20, potential upside of 31.6%.
  - Air China (753 HK): BUY, target price HK$7.60, potential upside of 10.0%.
  - CEA (670 HK): HOLD, target price HK$4.70, potential downside of 13.1%.
Macau Gaming:
- Short-term indicators remain positive, with Sands and Galaxy reporting strong traffic and visitations.
- Long-term concerns include slowing VIP revenue and increased credit constraints in China.
- Stock Picks:
  - Sands China (1928 HK): BUY, target price HK$39.00, potential upside of 15.4%.
  - Galaxy Entertainment (0027 HK): BUY, target price HK$56.00, potential upside of 16.7%.
  - MGM China (2282 HK): HOLD, target price HK$11.00, potential downside of 6.3%.
  - Wynn Macau (1128 HK): HOLD, target price HK$18.00, potential downside of 4.0%.
  - SJM Holdings (880 HK): BUY, target price HK$7.10, potential upside of 1.0%.

Key Market Indices

Index	Previous Close	1D %	1W %	1M %	YTD %
DJIA	26146.0	0.6	0.6	3.3	5.8
S&P 500	2904.2	0.5	0.9	2.3	8.6
FTSE 100	7281.6	-0.4	-0.5	-4.3	-5.3
AS30	6239.9	-0.7	-0.4	-2.3	1.2
CSI 300	3236.6	1.1	-0.8	-4.0	-19.7
FSSTI	3131.8	0.2	-0.5	-3.4	-8.0
HSCEI	10503.0	2.6	-0.7	-2.2	-10.3
HSI	27014.5	2.5	0.1	-2.7	-9.7
JCI	5858.3	1.0	3.1	1.5	-7.8
KLCI	1792.6	0.4	-0.2	0.5	-0.2
KOSPI	2286.2	0.1	-0.1	1.2	-7.3
Nikkei 225	22821.3	1.0	1.5	2.1	0.2
SET	1718.0	2.3	1.4	1.3	-2.0
TWSE	10727.2	0.0	-1.8	-0.9	0.8
BDI	1411	-1.9	-4.9	-18.2	3.3
CPO (RM/ml)	2210	-0.1	-0.6	0.1	-7.6
Brent Crude	78	-2.0	2.2	7.7	16.9

Corporate Events

Roadshow with VS Industry (VSI MK): 17 Sep in Singapore.
Roadshow with China Traditional Chinese Medicine Holdings (570 HK): 20-21 Sep in Taipei.
Roadshow with PT. Sarimelali Kencana (PZZA LJ): 25-26 Sep in Taipei.
Corporate Roadshow with BBI Life Sciences Corporation (1035 HK): 26 Sep in Hong Kong.
Analyst Presentation on 2H18 Malaysia Strategy & Outlook: 27-28 Sep in Taipei.
Analyst Presentation on ASEAN Plantation: 4 Oct in Singapore.
Roadshow with CSE Global (CSE SP): 4 Oct in Kuala Lumpur.
Roadshow with Manulife US REIT (MUST SP): 9 Oct in Canada.
UOB Kay Hian Asian Gems Conference: 9 Oct in Singapore.
Roadshow with DiGi.com (DIGI MK): 30 Oct - 2 Nov in Canada.
UOB Kay Hian Annual Regional 1H2019 Strategy Conference: 13 Nov in Kuala Lumpur.

Key Assumptions

Country/Region	GDP (yoy) 2017	GDP (yoy) 2018F	GDP (yoy) 2019F
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	71.60	71.00

Sector Update: Consumer Discretionary - China

Catering:
- Expected to be negatively impacted by the consumption slowdown but less than other discretionary sectors due to inelastic demand and prevalence of dining out.
- Large-scale players in the mass and mid-end segments (XCM and Yihai) are more resilient.
- Chain restaurants are gaining market share at a higher CAGR than standalone restaurants (11.7% vs 10.5% from 2013-17).
- XCM and Yihai are expected to continue their market share gains.
- Maintain OVERWEIGHT rating for the sector.