Asia Pacific Daily Summary
Core Content Overview
The document outlines key financial updates and market insights from Daiwa Capital Markets for the Asia Pacific region, focusing on company ratings, earnings forecasts, and upcoming events. It also provides a detailed analysis of Indo Tambangraya Megah (ITMG IJ) and Doosan Corp (000150 KS), along with information on other companies and regional market indices.
Major Changes
| Company |
Analyst |
Rating |
Page |
| Indo Tambangraya Megah (ITMG IJ) |
Arandi Arientara |
Buy (from Reduce) |
P.3 |
| Doosan Corp (000150 KS) |
Mike Oh |
Outperform |
P.4 |
Key Insights on Indo Tambangraya Megah (ITMG IJ)
Coal Upcycle Beneficiary
- Expected higher coal sales and average selling price (ASP) in 2H16 to improve revenue and earnings.
- 2Q16 coal sales: 6.2m mt, down 11% q-q.
- 1H16 coal sales: 13.1m mt, down 7% y-y.
- China accounted for 25% of coal sales, up 37% q-q.
- Japan and India sales declined by 53% and 10% q-q, respectively.
Production and Cost
- Strip ratio in 2H16 expected to be 8.5x, down 6% q-q.
- Total cost per mt: USD41.8/mt in 2Q16, USD42.1/mt in 1H16.
- Production for 1H16: 12.7m mt, down 11% y-y due to La Nina rainfall.
- Revised 2016 production target: 26.6m mt (from 26.9m mt).
Outlook
- China's coal imports up 6.7% y-y to 129.2m mt.
- Coal inventories down 29% y-y to 228m mt.
- Coal prices expected to hover around USD58/mt in 2H16, up 14% from 1H16.
Rating Upgrade
- Upgraded to BUY due to better outlook in 2H16.
- Revised 2016-17F earnings by 67–440%.
- Target price: IDR13,100 (from IDR4,000), reflecting 2017F P/E of 9.3x.
- 13% upside potential to new TP.
Doosan Corp (000150 KS)
Dividend Yield
- Strong in-house businesses expected to generate over 4% dividend yield for 2016E.
- Dividend per share (DPS): KRW5,000 (up 10% YoY from KRW4,550 in 2015).
Rating and Target Price
- Reiterated Outperform (2) rating.
- Raised 12-month target price to KRW130,000 (from KRW100,000).
- Raised standalone 2016E EBITDA by 3.7% to KRW240bn.
- Applied an EV/EBITDA multiple of 11.5x (from 9.2x).
Forecast Revisions
| Metric |
2016E (New) |
2016E (Previous) |
Change (%) |
| Sales |
19,380 |
19,356 |
0.1% |
| Operating Profit |
1,016 |
1,006 |
1.0% |
| Net Profit |
412 |
109 |
279% |
| EPS (fully-diluted) |
15,467 |
13,728 |
13% |
Other Research Highlights
| Company |
Analyst |
Rating |
Page |
| China Resources Beer (291 HK) |
Anson Chan |
Hold |
P.9 |
| SITC International (1308 HK) |
Kelvin Lau |
Buy |
P.13 |
| China Overseas Grand Oceans Group (81 HK) |
Jonas Kan |
Buy |
P.17 |
| Sinbon Electronics (3023 TT) |
Helen Chien |
No Rating |
P.21 |
| CapitaLand Retail China Trust (CRCT SP) |
David Lum |
Underperform |
P.23 |
| Dialog Group (DLG MK) |
Ong Keng Wee |
Hold |
P.27 |
| Amcorp Properties (APRO MK) |
Kevin Low |
Hold |
P.28 |
| IRPC Public Co Ltd (IRPC TB) |
Chak |
Buy |
P.29 |
| Metawater (9551 JP) |
Syusaku Nishikawa |
Neutral |
P.30 |
| Softbank Group (9984 JP) |
Yoshio Ando |
Outperform (from 3) |
P.31 |
Company Roadshows (22-26 August 2016)
| Date |
Company |
Event |
Venue |
| 22 Aug |
Mega Financial Holding (2886 TT) |
NDR |
Tokyo |
| 22-24 Aug |
Swire Properties (1972 HK) |
NDR |
EU |
| 23 Aug |
SITC (1308 HK) |
NDR |
HK |
| 23 Aug |
Shenzhen International (2313 HK) |
NDR |
HK |
| 23 Aug |
Shopping Centres Australasia (SCP AU) |
NDR |
SG |
| 23-24 Aug |
CIMC Enric (3899 HK) |
NDR |
HK |
| 24 Aug |
OOIL (316 HK) |
NDR |
Tokyo |
| 24 Aug |
China Resources Gas (1193 HK) |
NDR |
HK |
| 24 Aug |
Commonwealth Bank of Australia (CBA AU) |
Telecon. |
Global |
| 24-25 Aug |
SPT Energy (1251 HK) |
NDR |
HK |
| 25 Aug |
Canvest Environmental (1381 HK) |
NDR |
HK |
| 25-26 Aug |
Shopping Centres Australasia (SCP AU) |
NDR |
Tokyo |
| 25-26 Aug |
China State Construction International (3311 HK) |
NDR |
TW |
| 26 Aug |
AMVIG (2300 HK) |
NDR |
HK |
| 26 Aug |
China Aircraft Leasing Group (1848 HK) |
NDR |
HK |
| 26 Aug |
China Aircraft Leasing Group (1848 HK) |
Group Luncheon (VC) |
SG |
| 26 Aug |
Dah Chong Hong (1828 HK) |
NDR |
HK |
| 26 Aug |
Dah Chong Hong (1828 HK) |
Group Luncheon (VC) |
SG |
| 26 Aug |
Swire Properties (1972 HK) |
NDR |
SG |
Daiwa Asian Events
| Date |
Event |
Venue |
| 23-24 Aug |
Daiwa Korea Corporate Day 2016 |
HK |
| 25 Aug |
Daiwa Korea Corporate Day 2016 |
SG |
| 29 Aug |
Daiwa Asia Water Day 2016 |
Zurich |
| 6-8 Sep |
Daiwa Pan-Asia Innovative Companies Conference |
NY, Toronto |
| 8-9 Sep |
Daiwa Pan Asia REIT Day Tokyo 2016 |
Tokyo |
| 12-13 Sep |
The Seventh Daiwa REIT Day 2016 |
HK |
| 26-27 Sep |
Daiwa ASEAN Conference - Daiwa-Affin Hwang Malaysia Corporate Day Tokyo 2016 |
Tokyo |
| 8-11 Nov |
Daiwa Investment Conference Hong Kong 2016 |
HK |
Regional Indices (as of 18 August 2016)
| Market |
1D (%) |
1M (%) |
YTD (%) |
16E (%) |
17E (%) |
PER (x) |
PER (x) |
| TPX |
0.4 |
(2.7) |
(16.3) |
11.0 |
10.2 |
13.9 |
12.6 |
| HSCEI |
(0.5) |
6.9 |
(0.6) |
(3.4) |
5.2 |
6.8 |
6.4 |
| HSI |
(0.4) |
5.8 |
4.7 |
(1.3) |
8.6 |
12.2 |
11.2 |
| KOSPI |
0.0 |
2.0 |
4.8 |
27.7 |
9.1 |
11.0 |
10.1 |
| TWSE |
(1.0) |
(0.0) |
8.3 |
(1.3) |
11.6 |
14.9 |
13.6 |
| SENSEX* |
(0.2) |
1.0 |
7.5 |
12.6 |
18.3 |
19.5** |
16.5** |
| FSSTI |
0.2 |
(2.6) |
(1.3) |
(5.6) |
4.9 |
13.6 |
12.9 |
| FBMKLCI* |
(0.4) |
1.0 |
(0.3) |
(2.4) |
8.3 |
16.8** |
15.5** |
| SET* |
(0.5) |
3.1 |
19.5 |
9.6 |
13.0 |
16.3** |
14.5** |
| PCOMP* |
(0.3) |
(1.3) |
14.1 |
7.6 |
9.3 |
21.0** |
19.3** |
| JCI* |
(0.8) |
4.7 |
17.9 |
7.0 |
14.8 |
18.7** |
16.3** |
| AS51 |
0.3 |
1.4 |
4.4 |
7.9 |
7.8 |
16.8 |
15.6 |
*Valuation based on MSCI Universe
**MSCI index priced as of 18 Aug
Financial Summary (Doosan Corp)
| Metric |
2016E |
2017E |
2018E |
| Revenue (bn) |
19,380 |
20,225 |
21,208 |
| Operating Profit (bn) |
1,016 |
1,060 |
1,111 |
| Net Profit (bn) |
412 |
331 |
403 |
| Core EPS (fully-diluted) |
15,467 |
12,426 |
15,106 |
| DPS |
5,000 |
5,500 |
6,000 |
| Dividend Yield (%) |
4.3 |
4.7 |
5.1 |
| PER (x) |
7.6 |
9.4 |
7.7 |
| EV/EBITDA (x) |
11.9 |
11.3 |
10.7 |
Key Forecast Revisions (Doosan Corp)
| Metric |
2016E (New) |
2016E (Previous) |
Change (%) |
| Sales |
19,380 |
19,356 |
0.1% |
| Operating Profit |
1,016 |
1,006 |
1.0% |
| Net Profit |
412 |
109 |
279% |
| EPS (fully-diluted) |
15,467 |
13,728 |
13% |
Outlook and Risks
- Outlook: Strong in-house businesses, particularly in electro-materials and industrial vehicles, are expected to drive performance.
- Risks: Sharp decline in subsidiary earnings and weaker coal prices could impact the outlook.
Summary of Key Highlights
- ITMG is upgraded to BUY with a target price of IDR13,100, reflecting strong performance in 2H16.
- Doosan Corp is rated Outperform with a target price of KRW130,000, based on improved in-house earnings and reduced balance sheet risk.
- Regional Indices show mixed performance with some markets seeing positive growth while others experience declines.
- Company Roadshows and Daiwa Events are scheduled in the coming weeks, providing opportunities for engagement with key firms.
- Market Outlook suggests continued improvement in certain sectors, supported by favorable coal prices and operational efficiency.
