20170629-大华继显-Regional_Morning_Notes_14页_827kb

报告摘要

Regional Morning Notes Summary - 29 June 2017

Core Content Overview

This document provides a detailed market analysis for the regional financial and agricultural sectors, with a focus on China, Malaysia, and Singapore. It includes insights into sector trends, key indices, investment recommendations, corporate events, and risk factors.

Main Points and Key Information

Plantation Sector

Soybean Market Dynamics: China's increasing meat consumption drives soybean demand, leading to higher soymeal demand. This negatively impacts palm oil prices due to the abundant soybean supply, but is positive for Wilmar, a major soymeal supplier.
China's Role: China is the largest importer of soybeans, with over 80% of its imports used for soymeal production. The demand for soymeal is expected to rise significantly, which could help Wilmar's earnings.
Soybean Crushing Margin: The sector faces negative margins in Q2 2017 due to high soybean imports, but Wilmar's strategic expansion and raw material procurement are expected to keep margins positive.
Market Weighting: The Singapore plantation sector is rated MARKET WEIGHT, while the Malaysia plantation sector is UNDERWEIGHT.
Key Players: Wilmar International is highlighted as a top BUY, with a target price of S$4.40. Other companies like Kim Loong Resources, Bumitama Agri, and Sampoerna Agro are also noted for their performance and potential.

Banking Sector - China

Deleveraging Initiatives: Chinese authorities are prioritizing financial risk prevention, leading to liquidity tightening and deleveraging in the banking sector.
Case Studies:
- China Everbright Bank (CEB): Raised capital through convertible bonds and new H-shares, improving its capital adequacy ratio (CET-1 CAR) and reducing net interbank lending.
- Shanghai Pudong Development Bank (SPDB): Restructured its balance sheet, reducing interbank loans and re-balancing its asset mix to support the real economy.
Market Weighting: Maintained MARKET WEIGHT for the sector.
Top Buys: CCB, ICBC, and CMB are highlighted as top BUYs due to strong CASA ratios and CET-1 CAR.

Corporate Events

Upcoming Events:
- Group meeting with IGG Inc in Shanghai (29 Jun).
- Roadshow with Jacobson Pharma in Hong Kong (29 Jun).
- Analyst Marketing on Thai Strategy and Telco in Hong Kong, Singapore, and Malaysia (3–7 Jul).
- New Economy Conference in Kuala Lumpur (11 Jul).
- Roadshow with Citic Envirotech Ltd in Taipei (18–19 Jul).
- Visit to Sarawak Corridor of Renewable Energy (1 Aug).

Key Indices

Index	Prev Close	1D %	1W %	1M %	YTD %
DJIA	21454.6	0.7	0.2	1.8	8.6
S&P 500	2440.7	0.9	0.2	1.0	9.0
FTSE 100	7387.8	-0.6	-0.8	-2.1	3.4
AS30	5796.1	0.8	1.6	0.8	1.3
CSI 300	3646.2	-0.8	1.6	4.8	10.2
HSI	25683.5	-0.6	-0.0	-0.1	16.7
KLCI	1771.2	-0.5	-1.0	0.4	7.9
KOSPI	2382.6	-0.4	1.1	1.3	17.6
Nikkei 225	20130.4	-0.5	-0.0	2.3	5.3
SET	1582.6	-0.2	0.4	0.9	2.6
TWSE	10390.6	-1.2	0.4	2.9	12.3
BDI	903	2.1	7.0	-1.0	-6.0
CPO (RM/mt)	2619	1.3	-3.0	-9.9	-18.1
Brent Crude (US$/bbl)	47	1.4	5.6	-9.3	-16.7

Top Picks

BUY Recommendations

Alibaba (BABA US): Target price RM173.00, potential gain of 20.2%.
Beijing Ent. Water (371 HK): Target price HK$7.60, potential gain of 23.6%.
Telekomunikasi Indo (TLKM J): Target price RM5,000.00, potential gain of 10.6%.
V.S. Industry (VSI MK): Target price RM2.40, potential gain of 15.4%.
OCBC (OCBC SP): Target price S$11.70, potential gain of 8.8%.
Siam Cement (SCC TB): Target price TB$600.00, potential gain of 19.0%.
Wilmar International (WIL SP): Target price S$4.40, potential gain of 20.2%.
Bumitama Agri (BAL SP): Target price S$1.03, potential gain of 23.6%.
Sampoerna Agro (SGRO IJ): Target price IJ$2,300, potential gain of 23.6%.
Astra Agro (AALI IJ): Target price IJ$19,045, potential gain of 23.6%.
London Sumatra (LSIP IJ): Target price IJ$1,780, potential gain of 23.6%.

SELL Recommendations

Great Wall Motor (2333 HK): Target price HK$6.00, potential loss of 38.8%.
MGM China (2282 HK): Target price HK$15.00, potential loss of 13.4%.
Hartalega (HART MK): Target price MK$4.07, potential loss of 43.4%.
Genting Plantations (GENP MK): SELL.
IJM Plantations (IJMP MK): SELL.
IOI Corporation (IOI MK): SELL.
Sime Darby (SIME MK): SELL.
Sarawak Oil Palms (SOP MK): SELL.
Kuala Lumpur Kepong (KLK MK): HOLD.
Golden Agri (GGR SP): HOLD.

Key Assumptions

Item	2017F	2018F
GDP (China)	6.3%	6.3%
CPO Price (RM/mt)	2,600	2,400
Brent Crude (US$/bbl)	55	60

Sector Catalysts

Plantation Sector:
- Higher biodiesel consumption.
- Potential development of El Nino in 2H17.
- Worse-than-expected labour shortage.
Banking Sector:
- Stabilisation in asset quality and NIM.
- Continued deleveraging and regulatory focus on financial risk prevention.

Risks

Plantation Sector:
- Backtracking of biodiesel mandates in Indonesia and Malaysia.
- Continued pressure on palm oil prices due to abundant soybean supply.
Banking Sector:
- Moderation in earnings growth due to tighter credit controls and reduced interbank activities.

Investment Portfolio and Ratios

China Everbright Bank (CEB)

Key Ratios:
- Interbank Loans: Rmb376.7b (1Q17)
- Interbank Borrowings: Rmb717.2b (1Q17)
- Net Interbank Position: -Rmb340.5b (1Q17)
- Total Assets: Rmb4,127b (1Q17)
- Net Interbank Position/Total Assets: -8.3%
- Tangible Assets/Tangible Common Equity: 15.8x
Investment Portfolio:
- Available-For-Sale Financial Investments: Rmb441.6b (1Q17)
- Held-To-Maturity Investments: Rmb287.3b (1Q17)
- Investments Classified As Receivables: Rmb641.6b (1Q17)

Shanghai Pudong Development Bank (SPDB)

Key Ratios:
- Interbank Loans: Rmb229.8b (1Q17)
- Interbank Borrowings: Rmb1,412.6b (1Q17)
- Net Interbank Position: -Rmb1,182.7b (1Q17)
- Total Assets: Rmb5,889.7b (1Q17)
- Net Interbank Position/Total Assets: -20.1%
- Tangible Assets/Tangible Common Equity: 15.9x
Investment Portfolio:
- Available-For-Sale Financial Investments: Rmb592.8b (1Q17)
- Held-To-Maturity Investments: Rmb330.7b (1Q17)
- Investments Classified As Receivables: Rmb968.7b (1Q17)

Conclusion

The document highlights the growing importance of the soybean market in Asia, particularly in China, and its impact on the plantation and oilseed sectors. Wilmar International is seen as a beneficiary of increased soymeal demand, while other plantation firms face challenges due to soybean oversupply. In the banking sector, the focus is on deleveraging and regulatory compliance, with CEB and SPDB as key examples. Investment recommendations are based on financial performance, market positioning, and future growth potential, with a clear distinction between BUY and SELL calls.

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