20141204-大华继显-Regional_Morning_Notes_19页_1mb

报告摘要

Regional Morning Notes Summary

Core Content Overview

This document provides an analysis of the Automobile and Renewable Energy sectors in China, along with updates on Charoen Pokphand (CPIN IJ) in Indonesia, IOI Corporation (IOI MK) in Malaysia, M1 (M1 SP) in Singapore, and Charoen Pokphand Foods (CPF TB) in Thailand. It includes market indices, sector-specific insights, company valuations, recommendations, and risk factors.

Main Points by Region

China

Automobile Sector

BYD is facing significant challenges due to the phase-out of pure electric buses by local governments.
- High maintenance and recharging costs are leading to financial losses for electric bus fleets in major cities.
- BYD's stock price dropped 10% due to concerns over the impact on its electric bus sales, which are its only profitable segment.
- BYD is expected to miss its 2014-15 profit targets and may not achieve Rmb1.9b to Rmb2.7b in net profit.
- Zhengzhou Yutong is preferred over BYD due to its focus on plug-in hybrid electric buses, which are more cost-effective and have a 40% market share in China.
- Plug-in hybrid buses are expected to increase market share from 80% in 2014 to 100% in the future as local governments shift away from pure electric buses.

Renewable Energy Sector

The decline in oil prices has minimal impact on the renewable energy sector in China.
The sector is driven by policy support and environmental goals, not oil prices.
Renewable energy surcharges are a key funding mechanism, and the government has not shown signs of reducing them.
Top Picks include Singyes Solar (750 HK), Huaneng Renewables (958 HK), and Longyuan Power (916 HK) due to their attractive valuations and strong fundamentals.
The 13th Five-Year-Plan will continue to prioritize renewable energy, with targets of 200GW for wind and 100GW for solar by end-2020.
Profitability remains strong, with IRR of 17.9% for solar operators and net profit margins over 15% for wind and solar operators in 2014-15.

Key Companies and Updates

Charoen Pokphand (CPIN IJ) - Indonesia

Main beneficiary of processed chicken exports to Japan, with market leadership and high margins.
Export value to Japan could reach US$1b annually, with CPIN expected to benefit the most due to its 66% market share.
Feed segment is projected to contribute 75% of CPIN's revenue in 2015.
New feedmills are planned for Cirebon and Semarang to boost production capacity.
Acquired a DOC breeding farm in Lebak-Banten, enhancing production capabilities.
Secured a syndicated loan of US$400m, supporting capex and working capital needs.

Market Indices

Index	Previous Close	1D %	1W %	1M %	YTD %
DJIA	17912.6	0.2	0.5	3.1	8.1
S&P 500	2074.3	0.4	0.4	2.8	12.2
FTSE 100	6716.6	-0.4	-0.2	3.5	-0.5
AS30	5301.2	0.8	-1.5	-3.6	-1.0
CSI 300	2967.5	1.5	9.0	18.1	27.4
FSSTI	3303.4	-0.6	-1.4	0.7	4.3
HSCEI	11060.2	-0.6	0.1	3.1	2.3
HSI	23428.6	-1.0	-2.8	-1.7	0.5
JCI	5166.0	-0.2	0.6	1.9	20.9
KLCI	1758.2	-1.6	-4.6	-4.8	-5.8
KOSPI	1969.9	0.2	-0.6	1.8	-2.1
Nikkei 225	17720.4	0.3	1.9	5.1	8.8
SET	1594.6	0.0	0.2	0.6	22.8
TWSE	9175.3	1.6	0.6	2.1	6.5
BDI	1079	-3.6	-12.9	-25.9	-52.6
CPO (RM/mt)	2135	1.6	-2.4	-5.9	-17.0
Nymex Crude (US$/bbl)	67	0.6	-9.2	-14.6	-31.6

Key Recommendations

China

Sell BYD (1211 HK): Due to overvaluation and weak earnings growth.
Buy Zhengzhou Yutong (600066 CH): As the leading plug-in hybrid bus manufacturer, with strong earnings growth and attractive valuations.
Overweight Renewable Energy sector: Top picks include Singyes Solar (750 HK), Huaneng Renewables (958 HK), and Longyuan Power (916 HK).

Indonesia

Buy CPIN IJ: Due to strong export potential, healthy balance sheet, and attractive valuation (20.9x 2015F PE).

Key Assumptions

Country	GDP (% YoY) 2013	GDP (% YoY) 2014	GDP (% YoY) 2015F
US	1.9	2.7	3.2
Euro Zone	-0.4	0.9	1.4
Japan	1.5	1.5	2.0
Singapore	3.9	3.2	3.3
Malaysia	4.7	5.9	5.2
Thailand	2.9	1.5	3.9
Indonesia	5.8	5.2	5.8
Hong Kong	2.9	3.5	3.7
China	7.7	7.2	7.0

Key Risks

Subsidy policy changes: Any reduction in subsidies could impact the profitability of EV manufacturers.
Market volatility: The recent pullback in stock prices may be due to liquidity issues and investment style shifts, not sector fundamentals.
Competition and valuation: BYD may struggle to maintain market dominance due to intensifying competition and lack of technological edge.

Conclusion

The document highlights structural shifts in the automobile sector in China, where plug-in hybrid buses are becoming more favorable than pure electric buses. It also underscores the resilience of the renewable energy sector, which is not directly affected by oil price declines. CPIN IJ in Indonesia is positioned as a strong performer due to its market leadership in chicken exports and expansion plans. Analysts maintain overweight on renewable energy and buy on CPIN, while selling BYD due to overvaluation and uncertain future prospects.