20141202-大华继显-Regional_Morning_Notes_17页_2mb

Regional Morning Notes Summary

Core Content Overview

This document provides a regional market analysis for the period ending 02 December 2014, focusing on Hong Kong, Indonesia, and Malaysia. It includes updates on key companies, sector performance, market indices, corporate events, and investment strategies, with a particular emphasis on technical and fundamental analysis.

Hong Kong

Key Points

• Company Update: Bank of East Asia (BEA)
  • BEA's 2H14 operations are expected to maintain stable loan growth and net interest margin (NIM), with a focus on cross-border loans.
  • NPL formation in China has increased, but the bank's asset quality is deemed manageable.
  • The bank has initiated a share placement with SMBC, which is expected to lift its tier-1 capital adequacy ratio (CAR) to 13.1% on a pro-forma basis.
  • Maintain BUY recommendation with a target price of HK$36.50.

Financial Highlights

• Net Interest Income (HK$m): 12,167 (2013), 13,284 (2014F), 14,318 (2015F), 15,025 (2016F)
• Non-Interest Income (HK$m): 5,086 (2013), 5,792 (2014F), 6,201 (2015F), 6,674 (2016F)
• Net Profit (HK$m): 6,613 (2013), 7,077 (2014F), 7,567 (2015F), 7,944 (2016F)
• EPS (HK$ cents): 292.4 (2013), 308.3 (2014F), 329.5 (2015F), 345.9 (2016F)
• PE (x): 10.8 (2013), 10.2 (2014F), 9.6 (2015F), 9.1 (2016F)
• P/BV (x): 1.1 (2013), 1.1 (2014F), 1.0 (2015F), 0.9 (2016F)
• Dividend Yield (%): 3.5 (2013), 3.7 (2014F), 4.0 (2015F), 4.2 (2016F)

Market Indices

• DJIA: Previous Close: 17776.8, 1D %: (0.3), 1W %: (0.2), 1M %: 2.2, YTD %: 7.2
• S&P 500: Previous Close: 2053.4, 1D %: (0.7), 1W %: (0.5), 1M %: 1.8, YTD %: 11.1
• FTSE 100: Previous Close: 6656.4, 1D %: (1.0), 1W %: (1.1), 1M %: 1.7, YTD %: (1.4)
• AS30: Previous Close: 5190.7, 1D %: (2.0), 1W %: (3.0), 1M %: (5.7), YTD %: (3.0)
• CSI 300: Previous Close: 2819.8, 1D %: 0.4, 1W %: 6.4, 1M %: 12.4, YTD %: 21.0
• FSSTI: Previous Close: 3305.6, 1D %: (1.3), 1W %: (1.0), 1M %: 1.0, YTD %: 4.4
• HSCEI: Previous Close: 10818.2, 1D %: (2.9), 1W %: (0.2), 1M %: 0.6, YTD %: 0.0
• HSI: Previous Close: 23367.5, 1D %: (2.6), 1W %: (2.2), 1M %: (2.6), YTD %: 0.3
• JCI: Previous Close: 5164.3, 1D %: 0.3, 1W %: 0.4, 1M %: 1.5, YTD %: 20.8
• KLCI: Previous Close: 1778.3, 1D %: (2.3), 1W %: (3.0), 1M %: (4.1), YTD %: (4.8)
• KOSPI: Previous Close: 1965.2, 1D %: (0.8), 1W %: (0.7), 1M %: 0.0, YTD %: (2.3)
• Nikkei 225: Previous Close: 17590.1, 1D %: 0.7, 1W %: 1.3, 1M %: 7.2, YTD %: 8.0
• SET: Previous Close: 1593.8, 1D %: (0.0), 1W %: 0.2, 1M %: 0.6, YTD %: 22.7
• TWSE: Previous Close: 9117.7, 1D %: (0.8), 1W %: (0.1), 1M %: 1.6, YTD %: 5.9
• BDI: Previous Close: 1137, 1D %: (1.4), 1W %: (13.7), 1M %: (20.4), YTD %: (50.1)
• CPO (RM/mt): Previous Close: 2137, 1D %: (2.4), 1W %: (3.4), 1M %: (2.6), YTD %: (17.0)
• Nymex Crude (US$/bbl): Previous Close: 69, 1D %: 4.6, 1W %: (9.5), 1M %: (14.1), YTD %: (29.7)

Indonesia

Key Points

• Technical Analysis:

  • The Agriculture Sector Index (JAKAGRI) is showing a bullish trend, with a seasonal pattern indicating a potential upside in December.
  • Key stocks to watch: AALI, LSIP, and SGRO.
  • AALI is expected to find support at Rp22,275 and Rp22,000.
  • LSIP is showing a potential entry at Rp1,900.
  • SGRO is showing a bullish trend with support at Rp2,200.

• Sector Analysis:

  • The Agriculture Sector is highlighted as a buying opportunity due to the seasonal pattern and technical indicators.

Malaysia

Key Points

• 3Q14 Results Review:

  • Earnings disappointments outweighed positive surprises, leading to a cut in 2014-15 earnings forecasts.
  • The FBMKLCI target was revised to 1,840, with a 16x 2015F PE.
  • The market is considered oversold, with a good buying opportunity for the short term.

• Sector Strategy:

  • OVERWEIGHT the utility, construction, gaming, media (Astro), and REITs sectors.
  • Tactically OVERWEIGHT the Oil & Gas (O&G) sector, which is grossly oversold and expected to benefit from oil price recovery.

• Stock Picks:

  • Large Caps:
    • AirAsia (BUY, RM2.79 to RM3.20)
    • UM Corp (BUY, RM6.45 to RM7.60)
    • Genting Malaysia (BUY, RM4.10 to RM4.47)
    • Maybank (BUY, RM9.14 to RM10.30)
    • Tenaga (BUY, RM14.06 to RM14.55)
  • Small/Mid Caps:
    • Barakah (BUY, RM0.975 to RM1.45)
    • MRCB (BUY, RM1.37 to RM2.05)
    • MPHB Capital (BUY, RM2.15 to RM2.80)
    • SKP Resources (BUY, RM0.74 to RM0.83)

Top Picks Summary

Key Assumptions

Risk Factors

• BEA: Key risks include worse-than-expected deterioration in asset quality and unexpected monetary tightening from the PBOC.
• Overall: Macroeconomic challenges and lack of external and domestic catalysts may lead to a flattish year for the FBMKLCI in 2015.

Conclusion

The document outlines a BUY recommendation for BEA, highlighting the potential for recovery in the Chinese economy and the bank's strong capital adequacy and asset quality. In Indonesia, the Agriculture Sector is seen as a promising opportunity due to its seasonal performance and technical indicators. In Malaysia, despite a challenging 3Q14, the market is considered oversold and presents a buying opportunity, with a defensive strategy advised for 2015. Key sectors to focus on include utility, construction, gaming, media, and REITs, while Oil & Gas remains a tactically OVERWEIGHT choice.