20141009-大华继显-Regional_Morning_Notes_29页_1mb
报告摘要
Regional Morning Notes Summary - 09 October 2014
Core Content
This document provides a regional market analysis for the Asia-Pacific region, focusing on the Aviation and Plantation sectors, as well as updates on China's Consumer and Property markets. It also includes insights on Hong Kong and Malaysia, along with Thailand, and highlights key indices, top picks, and sector catalysts.
Main Sectors and Key Points
Aviation Sector
- Chinese Airlines are most leveraged to benefit from lower fuel prices due to not hedging their fuel costs.
- Air China, China Southern Airlines, and Cathay Pacific Airways are recommended as BUY.
- Garuda Indonesia and Malaysian Airline System are not recommended due to higher hedging and weak performance.
- Thai Airways is recommended as SELL due to weak performance and high hedging.
- AirAsia is recommended as BUY despite some hedging, due to potential cost savings from lower fuel prices.
- Fuel price decline is attributed to weak global demand and excess supply, not solely due to USD strength.
- Fuel cost savings for Chinese airlines could be significant, with a $5/bbl decline translating into Rmb0.6b in savings.
Plantation Sector
- The palm oil market is expected to be bottoming, but key bearish factors remain:
- Ample oilseed supplies
- Anticipated strong US soybean crop
- Weak biodiesel demand from Indonesia
- CPO prices are under pressure and may remain so until 4Q14.
- Key catalysts for a potential recovery:
- Weather disruptions leading to lower oilseed production
- Rising crude oil prices making bioenergy more attractive
- Peer comparison shows mixed performance, with some companies like Sime Darby and Kuala Lumpur Kepong recommended as HOLD, while others like IOI Corporation and Genting Plantations are SELL.
Key Indices (as of 8 Oct 2014)
| Index | Previous Close | 1D % | 1W % | 1M % | YTD % |
|---|---|---|---|---|---|
| DJIA | 16994.2 | 1.6 | 1.1 | -0.7 | 2.5 |
| S&P 500 | 1968.9 | 1.7 | 1.2 | 1.6 | 6.5 |
| FTSE 100 | 6482.2 | -0.2 | -1.1 | -5.2 | -4.0 |
| AS30 | 5241.6 | -1.0 | -1.7 | -6.5 | -2.1 |
| CSI 300 | 2478.4 | 1.1 | 1.5 | 1.4 | 6.4 |
| FSSTI | 3226.7 | -0.5 | -1.5 | -3.5 | 1.9 |
| HSCEI | 10395.4 | -0.7 | -0.4 | -8.9 | -3.9 |
| HSI | 23263.3 | -0.7 | 0.1 | -7.7 | -0.2 |
| JCI | 4958.5 | -1.5 | -3.5 | -4.6 | 16.0 |
| KLCI | 1824.3 | -0.5 | -1.2 | -2.7 | -2.3 |
| KOSPI | 1965.3 | -0.4 | -2.7 | -4.1 | -2.3 |
| Nikkei 225 | 15596.0 | -1.2 | -3.0 | -1.0 | -4.3 |
| SET | 1543.4 | 0.3 | -2.8 | -2.5 | 18.8 |
| TWSE | 8955.2 | -0.9 | -0.4 | -5.1 | 4.0 |
| BDI | 991 | -2.4 | -6.1 | -15.0 | -56.5 |
| CPO (RM/mt) | 2195 | 0.8 | 1.0 | 8.0 | -14.7 |
| Nymex Crude | 88 | 0.6 | -3.5 | -5.3 | -10.7 |
Top Picks
| Company | Recommendation | Current Price | Target Price |
|---|---|---|---|
| Air China | BUY | HK$6.60 | HK$8.45 |
| China Southern | BUY | HK$3.20 | HK$5.50 |
| Cathay Pacific | BUY | HK$14.54 | HK$18.10 |
| Air Asia | BUY | RM$3.20 | RM$5.50 |
Key Assumptions
| Indicator | 2013 | 2014F | 2015F |
|---|---|---|---|
| GDP (yoy) | 7.7 | 7.3 | 7.3 |
| Brent (US$/bbl) | 110 | 110 | 110 |
| CPO (US$/mt) | 736 | 788 | 848 |
| BDI | 1219 | 1500 | 1800 |
Corporate Events
| Event | Venue | Dates |
|---|---|---|
| Asian Gems Conference | Singapore | 8 Oct - 9 Oct |
| Tea Tasting Session | Petaling Jaya | 17 Oct |
| TICON Industrial Connection | Kuala Lumpur | 17 Oct |
| ASEAN Plantation Sector Analyst Presentation | Taipei | 20 Oct - 21 Oct |
Risks
- Global economic slowdown may reduce passenger and cargo traffic.
- Soybean glut could continue if South America achieves record-high planting.
- Weakening crude oil prices could reduce bioenergy demand.
- Unfavourable weather may impact oilseed production and recovery.
Market Weight (Maintained)
- The overall market weight for the sectors covered is maintained.
- The Consumer and Plantation sectors are recommended to be MARKET WEIGHT.
Analysts
-
K Ajith – Aviation Sector
- Contact: +65 6590 6627
- Email: ajith@uobkayhian.com
-
Regional Research Team – Plantation Sector
- Contact: +603 2147 1988
- Email: research@uobkayhian.com
-
Renee Tai & Herbert Chan – China Consumer Sector
- Contact: +852 2826 1324 & +852 2826 1330
- Email: renee.tai@uobkayhian.com.hk & herbert.chan@uobkayhian.com.hk
Summary of Sector Catalysts
-
Positive Catalysts:
- Weather disruptions reducing oilseed supply
- Rising crude oil prices increasing bioenergy demand
- Lower palm oil production due to non-EI Nino dryness
-
Negative Catalysts:
- High US soybean crushing volume reducing soy oil prices
- Strong South American soybean planting leading to supply increase
- Continued weak demand for biodiesel in Indonesia
- Lower CPO prices due to pricing pressure from soy oil
Earnings and Target Price Sensitivity
| Company | 2015 EPS | % Change in EPS | Target Price (RM) |
|---|---|---|---|
| IJMP | 19.1 | -25.2 | 2.14 |
| SOP | 50.3 | -20.1 | 5.62 |
| GENP | 56.3 | -20.1 | 6.75 |
| KLK | 125.9 | -14.7 | 18.26 |
| IOI | 28.7 | -10.0 | 3.85 |
| SIME | 56.4 | -10.0 | 7.42 |
| KAGR | 2.4 | -36.6 | 0.15 |
| BAL | 8.7 | -19.0 | 1.06 |
| FR | 17.8 | -16.3 | 2.23 |
| GGR | 3.1 | -9.0 | 0.43 |
| WIL | 28.3 | -5.6 | 3.51 |
| SGRO | 212 | -12.6 | 2,040 |
| BWPT | 101 | -10.2 | 300 |
| LSIP | 165 | -8.6 | 1,670 |
| AALI | 1,888 | -8.1 | 24,275 |
Conclusion
The report suggests that the aviation sector will benefit from lower fuel prices, especially for Chinese airlines, while plantation and consumer sectors remain cautiously optimistic. The palm oil market is expected to stabilize but may still face pressure from soybean supply and soy oil demand. The consumer sector in China continues to show strength in mass market segments, with a focus on Belle, Daphne, Tingyi, and China Mengniu. The market weight is maintained across the sectors, with a focus on BUY and HOLD recommendations.
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