20180810-大华继显-Regional_Morning_Notes_42页_2mb
报告摘要
Regional Morning Notes Summary
Date: Friday, 10 August 2018
Core Content Overview
This document provides a summary of stock performance and financial results for various companies in Asia, including China, Hong Kong, Indonesia, Malaysia, Singapore, and Thailand. It also includes key indices, corporate events, and analyst recommendations.
Main Points
China
- NetEase (NTES US):
- 2Q18 Results: Revenue increased 22% YoY to Rmb16.3b, in line with consensus. Non-GAAP net income dropped 22% YoY to Rmb2.7b, but beat consensus by 13%. Gross margin improved 2.5ppt qoq to 44.5%, and non-GAAP operating margin improved 2.5ppt to 18.1% due to stabilizing S&M and R&D costs.
- Stock Impact: Maintain HOLD with a target price of US$270.00. Entry price is US$235.00.
- Earnings Revision: Estimates are largely unchanged.
- Valuation: SOTP valuation indicates potential upside due to the e-commerce business listing.
- Company Description: Leading internet company with diversified business segments.
- Key Metrics: Net margin decreased to 8.9% in 2018F. ROE improved to 21.4% in 2020F. EV/EBITDA increased to 27.9x in 2018F.
Hong Kong
- IGG (799 HK):
- 1H18 Results: Revenue increased 42% YoY to US$388.5m, 5% below consensus. Net profit rose 29% YoY to US$79m, 3% below consensus. LM revenue increased 64% YoY and 31% hoh to US$311m.
- Stock Impact: Maintain HOLD with a target price of HK$10.50. Entry price is HK$8.00.
- Earnings Revision: Estimates are largely unchanged.
- Valuation: Based on 9x 2018F PE and 1x PEG.
- Company Description: Online games developer and operator offering multi-language browser games, client-based games, and mobile games globally.
- Key Metrics: Gross margin was 70% in 1H18, up 2ppt YoY. Net margin was 25% in 1H18, in line with estimates. ROE improved to 50.4% in 2018F.
Key Indices
| Index | Prev Close | 1D % | 1W % | 1M % | YTD % |
|---|---|---|---|---|---|
| DJIA | 25509.2 | (0.3) | 0.7 | 2.4 | 3.2 |
| S&P 500 | 2853.6 | (0.1) | 0.9 | 2.1 | 6.7 |
| FTSE 100 | 7741.8 | (0.4) | 2.2 | 0.6 | 0.7 |
| AS30 | 6383.6 | 0.5 | 0.9 | 0.6 | 3.5 |
| CSI 300 | 3397.5 | 2.5 | 0.8 | (2.0) | (15.7) |
| FSSTI | 3326.7 | (0.4) | (0.1) | 3.0 | (2.2) |
| HSCEI | 11019.9 | 1.1 | 2.7 | 1.8 | (5.9) |
| HSI | 28607.3 | 0.9 | 3.2 | (0.3) | (4.4) |
| JCI | 6065.3 | (0.5) | 0.9 | 3.1 | (4.6) |
| KLCI | 1805.0 | 0.0 | 1.5 | 7.0 | 0.5 |
| KOSPI | 2303.7 | 0.1 | 1.5 | 0.4 | (6.6) |
| Nikkei 225 | 22598.4 | (0.2) | 0.4 | 1.8 | (0.7) |
| SET | 1722.5 | 0.0 | 0.8 | 4.8 | (1.8) |
| TWSE | 11028.1 | (0.4) | 0.9 | 2.5 | 3.6 |
| BDI | 1704 | (1.6) | (3.0) | 5.9 | 24.7 |
| CPO (RM/ml) | 2198 | 0.6 | 1.1 | (3.4) | (8.1) |
| Brent Crude (US$/bbl) | 72 | (0.3) | (1.9) | (7.7) | 7.8 |
Top Picks
| Company | Ticker | Current Price (Icy) | Target Price (Icy) | Pot. +/- (%) |
|---|---|---|---|---|
| BUY | - | - | - | - |
| Baoshan Iron & Steel | 600019 CH | 8.67 | 9.53 | 9.9 |
| Gudang Garam | GGRM IJ | 76,000.00 | 85,000.00 | 11.8 |
| PP Persero | PTPP IJ | 1,990.00 | 3,700.00 | 85.9 |
| Bumi Armada | BAB MK | 0.73 | 1.06 | 45.2 |
| OCBC | OCBC SP | 12.00 | 13.68 | 14.0 |
| SingTel | ST SP | 3.20 | 4.22 | 31.9 |
| Siam Cement | SCC TB | 454.00 | 530.00 | 16.7 |
| SELL | - | - | - | - |
| Hartalega | HART MK | 6.38 | 4.02 | (37.0) |
Corporate Events
- Group luncheon with OCK Group: Kuala Lumpur, 13 Aug
- Analyst Presentation on Greater China 2H18 Strategy and Outlook:
- Singapore, 13 Aug
- Kuala Lumpur, 15–16 Aug
- Bangkok, 20–22 Aug
- Group Dinner Meeting with China Traditional Chinese Medicine Holdings: Hong Kong, 17 Aug
- Group Meeting with Xlep International Holdings: Hong Kong, 24 Aug
- Group Meeting with YiChang HEC ChangJiang Pharmaceutical: Hong Kong, 28 Aug
- UOB Kay Hian Asian Gems Conference: Singapore, 9 Oct
- UOB Kay Hian Annual Regional 1H2019 Strategy Conference: Kuala Lumpur, 13 Nov
Summary of Key Financials and Performance
NetEase (NTES US)
- Revenue: Rmb16.3b in 2Q18, up 22% YoY.
- Non-GAAP Net Income: Rmb2.7b, down 22% YoY but beat consensus.
- Gross Margin: Improved to 44.5% in 2Q18.
- Operating Margin: Improved to 18.1% in 2Q18.
- Target Price: US$270.00, with an upside of +6.7%.
- Dividend Yield: 1.3% in 2018F.
- Market Cap: US$33,222.2m.
IGG (799 HK)
- Revenue: US$388.5m in 1H18, 5% below consensus.
- Net Profit: US$79m, 3% below consensus.
- LM Revenue: US$311m, up 64% YoY.
- Gross Margin: 70% in 1H18, up 2ppt YoY.
- Operating Margin: 33%, flattish YoY.
- Target Price: HK$10.50, with an upside of +5.6%.
- Dividend Yield: 1.4% in 2018F.
- Market Cap: HK$13,008.1m.
Summary of Key Assumptions
| Region | GDP (yoy) | 2017 | 2018F | 2019F |
|---|---|---|---|---|
| US | 2.3 | 2.3 | 2.5 | 2.3 |
| Euro Zone | 2.4 | 2.4 | 2.3 | 1.9 |
| Japan | 1.7 | 1.7 | 1.8 | 1.9 |
| Singapore | 3.6 | 3.6 | 2.8 | 3.0 |
| Malaysia | 5.9 | 5.9 | 5.0 | 5.3 |
| Thailand | 3.9 | 3.9 | 4.2 | 4.2 |
| Indonesia | 5.1 | 5.1 | 5.3 | 5.4 |
| Hong Kong | 3.8 | 3.8 | 3.8 | 2.8 |
| China | 6.9 | 6.9 | 6.4 | 6.2 |
| CPO | (RM/mt) | 2,783 | 2,400 | 2,500 |
| Brent (Average) | (US$/bbl) | 55.00 | 67.00 | 66.50 |
Summary of Key Risks and Earnings Revisions
- NetEase: No significant changes to estimates.
- IGG: No significant changes to estimates.
Summary of Valuation and Recommendations
- NetEase: Maintain HOLD with a target price of US$270.00.
- IGG: Maintain HOLD with a target price of HK$10.50.
Summary of Market Impact and Catalysts
- NetEase: Potential listing of e-commerce business, better-than-expected engagement in pipeline mobile games, strong e-commerce growth, and breakeven at Yanxuan and Kaola.
- IGG: Better-than-expected player penetration for Castle Clash and launch of new games.
Summary of Financial Performance
- NetEase: Net profit (adj.) is forecasted at Rmb9,388.2m in 2018F.
- IGG: Net profit (adj.) is forecasted at US$194.1m in 2018F.
Summary of Key Metrics
| Metric | NetEase | IGG |
|---|---|---|
| Gross Margin | 44.5% (2Q18) | 70% (1H18) |
| Net Margin | 8.9% (2018F) | 25% (1H18) |
| ROE | 21.4% (2020F) | 50.4% (2018F) |
| EV/EBITDA | 27.9x (2018F) | 4.4x (2018F) |
Summary of Stock Performance
- NetEase: Share price US$252.97, upside +6.7%.
- IGG: Share price HK$9.94, upside +5.6%.
Summary of Dividend and Cash Flow
- NetEase: Interim dividend not mentioned, but net margin is expected to stabilize at ~10% in 2018.
- IGG: Interim dividend of US$29.5m in 1H18, or US$2.30/17.7 HK cents per share.
Summary of Balance Sheet
- NetEase: Net debt/(cash) to equity is expected to be -6.4% in 2020F.
- IGG: Net debt/(cash) to equity is expected to be -99.5% in 2020F.
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