20170906-大华继显-Regional_Morning_Notes_21页_1mb
报告摘要
Regional Morning Notes Summary
Core Content Overview
This document provides an analysis of the performance and outlook for key sectors in various Asian markets, including Indonesia, China, Malaysia, Singapore, and Thailand. It includes sector-specific updates, company-specific recommendations, and market indices. The overall tone suggests a positive outlook for certain sectors, particularly the healthcare and construction industries, with a focus on potential recovery and growth opportunities.
Main Points and Key Information
Indonesia: Construction Sector
- Sector Performance: The construction sector has underperformed the JCI index by 30% year-to-date and 31.7% year-over-year due to concerns over funding capabilities, poor orderbook execution, and government budget cuts.
- Valuation: The sector is currently trading at a forward PE of 10.4x, which is at its five-year historical low and -2.2 SD from the historical mean, indicating significant undervaluation.
- Outlook: The document suggests that the sector is poised for a strong recovery in 2H17, with a 42% earnings growth expected for 2017-18.
- Recommendation: The construction sector is reiterated as OVERWEIGHT. The top picks are Adhi Karya (ADHI IJ), Wika Beton (WTON IJ), and Waskita Karya (WSKT IJ).
- Risks: Lower-than-expected government revenue, rising political tension ahead of the 2019 election, changing industry regulations, write-offs on orderbooks and receivables, and severe rupiah depreciation.
China: Healthcare Sector
- Sector Performance: The healthcare sector experienced weaker-than-expected 1H17 results due to the two-invoice policy and tender-induced price cuts.
- Outlook: The sector is expected to recover strongly in 2H17 due to the fading of negative policy impacts, the rollout of new National Reimbursement Drug Lists (NRDL) starting from September 17, and fast-track drug approvals.
- Recommendation: The sector is maintained as OVERWEIGHT. Top picks include CSPC (1093 HK), Microport (853 HK), and UMFT (2666 HK).
- Key Companies:
- CSPC: Expected to benefit from the NRDL rollout and has a strong product line with clear clinical efficacy.
- Sino Biopharm: Fast-track approvals will help accelerate its sales growth in 2H17.
- HEC Pharma: Expected to see a surge in sales due to fast-track approvals.
- Valuation: The healthcare sector is trading at a discount to historical averages and has not priced in the potential recovery.
Malaysia: Strategy and Sector Update
- 2Q17 Results: The results could not sustain the previous quarters' core earnings upgrades and highlighted a subdued domestic consumption trend.
- REITs Performance: REITs core earnings (excluding MRCB-Quill) grew at a decent rate of 1.4% YoY, down from 0.9% in 1Q17. MRCB-Quill is downgraded to HOLD.
- Company Update: Globetronics Technology (GTB MK/BUY/RM6.40/Target: RM7.50) is highlighted for its strong earnings prospects and potential upside from new products in 2018-19.
Singapore: Re-initiate Coverage
- Wheelock Properties (WP SP/BUY/S$1.84/Target: S$2.33) is recommended for its strong fundamentals and potential for growth.
Thailand: Update
- SVI (SVI TB/HOLD/Bt5.20/Target: Bt5.30) is noted, but the market is deemed too early to be optimistic about its performance.
Key Indices
| Index | Previous Close | 1D % | 1W % | 1M % | YTD % |
|---|---|---|---|---|---|
| DJIA | 21753.3 | -1.1 | -0.3 | -1.5 | 10.1 |
| S&P 500 | 2457.9 | -0.8 | 0.6 | -0.8 | 9.8 |
| FTSE 100 | 7372.9 | -0.5 | 0.5 | -1.8 | 3.2 |
| AS30 | 5767.8 | 0.1 | 0.6 | -0.1 | 0.9 |
| CSI 300 | 3857.0 | 0.3 | 0.6 | 4.0 | 16.5 |
| FSSTI | 3251.3 | 0.6 | -0.5 | -2.3 | 12.9 |
| HSCEI | 11191.6 | 0.1 | -0.9 | 1.7 | 19.1 |
| HSI | 27741.4 | 0.0 | -0.1 | 0.6 | 26.1 |
| JCI | 5830.0 | 0.3 | -1.2 | 0.9 | 10.1 |
| KLCI | 1769.6 | -0.2 | 0.0 | -0.3 | 7.8 |
| KOSPI | 2326.6 | -0.1 | -1.6 | -2.9 | 14.8 |
| Nikkei 225 | 19385.8 | -0.6 | 0.1 | -2.8 | 1.4 |
| SET | 1620.4 | 0.1 | 0.4 | 2.7 | 5.0 |
| TWSE | 10617.8 | 0.5 | 1.2 | 1.1 | 14.7 |
| BDI | 1187 | 0.3 | -1.3 | 15.0 | 23.5 |
| CPO (RM/mt) | 2680 | -1.1 | -0.5 | 1.4 | -16.2 |
| Brent Crude (US$/bbl) | 53 | 2.0 | 2.7 | 1.8 | -6.1 |
Top Picks and Recommendations
Healthcare Sector (China)
| Company | Ticker | Recommendation | Price (HK$) | Target Price (HK$) |
|---|---|---|---|---|
| CSPC | 1093 HK | BUY | 12.80 | 15.24 |
| Microport | 853 HK | BUY | 7.35 | 7.87 |
| UMFT | 2666 HK | BUY | 6.42 | 9.30 |
| 3SBio | 1530 HK | BUY | 11.34 | 15.24 |
| Sino Biopharmaceutical | 1177 HK | BUY | 7.57 | 15.24 |
| HEC ChangJiang | 1558 HK | BUY | 19.42 | 15.24 |
Construction Sector (Indonesia)
| Company | Ticker | Recommendation | Price (Rp) | Target Price (Rp) |
|---|---|---|---|---|
| Adhi Karya | ADHI IJ | BUY | 1,995 | 3,200 |
| Wika Beton | WTON IJ | BUY | 540 | 1,000 |
| Waskita Karya | WSKT IJ | BUY | 2,140 | 3,000 |
Key Assumptions
| Country | GDP (YoY) 2016 | GDP (YoY) 2017F | GDP (YoY) 2018F |
|---|---|---|---|
| US | 1.6 | 2.5 | 2.5 |
| Euro Zone | 1.7 | 1.8 | 1.6 |
| Japan | 1.0 | 0.9 | 1.2 |
| Singapore | 2.0 | 2.4 | 2.5 |
| Malaysia | 4.2 | 5.0 | 4.9 |
| Thailand | 3.2 | 3.3 | 3.3 |
| Indonesia | 5.0 | 5.2 | 5.5 |
| Hong Kong | 1.9 | 2.0 | 2.0 |
| China | 6.7 | 6.6 | 6.3 |
| Brent (Average) | 45 | 52 | 55 |
| CPO | 2,653 | 2,600 | 2,400 |
Analyst Contact
-
Alex Jiang
+852 2236 6749
alex.jiang@uobkayhian.com.hk -
Adrianus Bias Prasuryo
+6221 2993 3999
adrianusbias@uobkayhian.com
Summary of Recommendations
- Indonesia Construction Sector: Reiterated as OVERWEIGHT with strong potential for recovery.
- China Healthcare Sector: Maintained as OVERWEIGHT, with a focus on new NRDL rollouts and fast-track approvals.
- Malaysia: Continued focus on identifying winners in a lull market.
- Singapore: Re-initiated coverage for Wheelock Properties with a BUY recommendation.
- Thailand: Caution advised with SVI due to early stage and uncertainty.
The document highlights the importance of monitoring policy impacts, market dynamics, and company-specific factors to identify investment opportunities.
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