20160608-大华继显-Regional_Morning_Notes_20页_1mb

Regional Morning Notes Summary

Core Content Overview

This document provides a comprehensive update on key companies and market indices across China, Indonesia, Malaysia, Singapore, and Thailand as of Wednesday, 08 June 2016. It includes company performance updates, financial metrics, stock data, and investment recommendations, along with insights into market trends and corporate events.

Main Points

China

BYD Company (1211 HK)

• Sales Momentum: BYD raised its 2016 EV sales target to 130,000 units, up from 120,000 units, with strong order flows supporting this growth.
• Product Segments:
  • Electric buses (e-buses): Targeted sales of 10,000–13,000 units, up 100–160% yoy.
  • Plug-in hybrid electric vehicles (PHEVs): Expected to grow by 100% yoy to 90,000–100,000 units.
  • Pure electric vehicles (BEVs): Targeted sales of 25,000–30,000 units, up 250–330% yoy.
• Subsidy Cuts and Cost Savings: Management is confident that the 20% cut in EV subsidies by 2017 will be offset by cost reductions, particularly in battery and component costs.
• Financial Forecast: Raised 2017–18 EPS forecasts by 18–19%. Maintained a BUY rating with a target price of HK$54.00.
• Key Financials:
  • 2016F Net profit: Rmb4,658m
  • 2017F Net profit: Rmb4,845m
  • 2018F Net profit: Rmb6,302m
  • EBITDA margin: 12.2% (2016F)
  • Net margin: 3.9% (2016F)
  • EV/EBITDA: 5.0x (2016F)
• Market Performance: Shares trade at HK$46.95, with an upside of +15% to target price of HK$54.00.

China Railway Group (390 HK)

• Reverse Road Show Insights: URT (Urban Rail Transit) and PPP (Public-Private Partnership) are key growth drivers.
• URT Growth: Eryuan Engineering Group reported increased URT revenue, with a Rmb1.1b contract signed in May 16. Management expects URT new orders to increase by over 30% in 2016.
• PPP Projects: CRG has a Rmb170b order backlog for PPP projects, with a target IRR of ~8% and total investment returns of ~12%. Management is managing operational risks effectively.
• Financial Forecast:
  • 2016F Net profit: Rmb12,045m
  • 2017F Net profit: Rmb12,743m
  • 2018F Net profit: Rmb13,749m
  • EBITDA margin: 10.5% (2016F)
  • Net margin: 1.9% (2016F)
  • EV/EBITDA: 9.8x (2016F)
• Stock Performance: Shares trade at HK$6.14, with a target price of HK$7.20 and an upside of +17.3%.

Indonesia

Bumi Serpong Damai (BSDE 1J)

• Commercial Segment: Expected to drive 2016 marketing sales.
• Investment Recommendation: Resume coverage with a BUY rating and target price of Rp2,390.

Malaysia

• Rubber Gloves Sector:
  • 1Q16 aggregate sector earnings declined by 15% qoq due to the appreciation of the ringgit and a time lag in passing on industrial gas price hikes.

Singapore

• Property Sector:
  • The document refers to "taking the first bite of the bullet," suggesting potential challenges or changes in the sector, though specific details are not elaborated.

Thailand

Pruksa Real Estate (PS TB)

• Presales Performance: May 2016 presales reached Bt4.1b, showing a 7.7% qoq increase but a 2.0% yoy decrease.
• Property Stimulus: Despite the recent end of property stimulus in April, the presales are considered healthy.

Key Indices

Key Assumptions

• GDP Growth:

  • US: 2.4% (2015), 2.5% (2016F), 3.0% (2017F)
  • Euro Zone: 1.6% (2015), 1.7% (2016F), 1.7% (2017F)
  • Japan: 0.5% (2015), 0.6% (2016F), 1.0% (2017F)
  • Singapore: 2.0% (2015), 2.7% (2016F), 3.0% (2017F)
  • Malaysia: 5.0% (2015), 4.2% (2016F), 5.0% (2017F)
  • Thailand: 2.8% (2015), 3.2% (2016F), 3.6% (2017F)
  • Indonesia: 4.8% (2015), 5.0% (2016F), 5.5% (2017F)
  • Hong Kong: 2.4% (2015), 2.1% (2016F), 1.8% (2017F)
  • China: 6.9% (2015), 6.5% (2016F), 6.2% (2017F)

• Brent Crude: Rmb42 (2016F), Rmb54 (2017F)

• CPO: RM2,500 (2016F), RM2,600 (2017F)

Top Picks

Sell Recommendations

Corporate Events

Conclusion

The document highlights the growth potential of BYD and China Railway Group, particularly in the EV and URT sectors, respectively. It also outlines the current market conditions and performance of other regions, including Indonesia, Malaysia, and Singapore. The key financial metrics and valuation ratios are provided for each company, along with investment recommendations and key assumptions for future growth.