20141203-大华继显-Regional_Morning_Notes_23页_1mb
报告摘要
Regional Morning Notes Summary - 03 December 2014
Core Content
This document provides a detailed market analysis for the Asia-Pacific region, focusing on China, Indonesia, Malaysia, Singapore, and Thailand. It includes sector updates, stock recommendations, key indices, and corporate events, with an emphasis on the consumer and railway sectors.
Main Points
China
-
Consumer Sector:
- There is a preference for mass market discretionary companies over staples in 1H15.
- Retailers are working to reduce inventories and adjust strategies due to the anti-corruption campaign.
- The market is expected to improve in 2015, with China outperforming Hong Kong.
- Key Recommendations:
- BUY on Belle, Chow Tai Fook, Luk Fook, and Mengniu.
- SELL on China Modern Dairy (CMD) due to falling raw milk prices, rising competition, and brand reputation risks.
- Target price for CMD is HK$2.00, which is 11.9x 2015F PE.
-
Railway Sector:
- Railway investment is expected to remain high in 2015 but may decline in 2016 due to a high base in 2015 and the start of the 13th Five-Year Plan.
- The CSR-CNR merger is expected to resume in early 2015, with Zhuzhou CSR being the primary beneficiary.
- Key Recommendations:
- Maintain OVERWEIGHT on the sector.
- Expect incremental earnings of 3%, 5%, and 5% for CRCC, CRG, and CCC respectively due to the interest rate cut.
- Daqin Railway may see a 15–25% increase in 2015 earnings due to a potential tariff hike.
Indonesia
- Industri Jamu dan Farmasi Sido Muncul (SIDOIJ):
- Attractively valued at 1SD below its historical mean PE.
- Target price is Rp800, implying a 19.4% upside.
- BUY recommendation due to strong sales and earnings growth.
Malaysia
- Banking Sector:
- Disappointing 3Q14 earnings due to contraction in non-interest income and weak corporate banking loans growth.
- Maintain MARKET WEIGHT.
Singapore
- Shipyard Sector:
- Target prices are cut by 12–25%.
- Back to basics strategy expected.
Thailand
- Oil & Gas Sector:
- Reiterate UNDERWEIGHT due to consensus cut in earnings estimates.
- PTTGC and BCP are preferred.
Key Indices (as of 03 December 2014)
| Index | Prev Close | 1D % | 1W % | 1M % | YTD % |
|---|---|---|---|---|---|
| DJIA | 17879.6 | 0.6 | 0.3 | 2.8 | 7.9 |
| S&P 500 | 2066.6 | 0.6 | -0.1 | 2.4 | 11.8 |
| FTSE 100 | 6742.1 | 1.3 | 0.2 | 3.0 | -0.1 |
| AS30 | 5260.0 | 1.3 | -1.1 | -4.1 | -1.7 |
| CSI 300 | 2923.9 | 3.7 | 8.9 | 16.4 | 25.5 |
| FSSTI | 3322.3 | 0.5 | -0.7 | 1.0 | 4.9 |
| HSCEI | 11125.8 | 2.8 | 3.2 | 4.4 | 2.9 |
| HSI | 23654.3 | 1.2 | -0.8 | -1.1 | 1.5 |
| JCI | 5175.8 | 0.2 | 1.1 | 1.8 | 21.1 |
| KLCI | 1786.0 | 0.4 | -2.9 | -3.6 | -4.3 |
| KOSPI | 1965.8 | 0.0 | -0.7 | 0.7 | -2.3 |
| BDI | 1119 | -1.6 | -14.8 | -21.6 | -50.9 |
| CPO (RM/mt) | 2102 | -1.6 | -4.1 | -7.4 | -18.3 |
| Nymex Crude | 68 | -2.0 | -10.7 | -16.0 | -31.3 |
Top Picks (BUY)
| Company | Stock Code | Current Price (HK$) | Target Price (HK$) | 2014F PE (x) |
|---|---|---|---|---|
| Belle | 1880 HK | 8.73 | 12.40 | 14.1 |
| Chow Tai Fook | 1929 HK | 10.42 | 12.09 | 15.2 |
| Daphne | 210 HK | 3.55 | 4.60 | 14.4 |
| Luk Fook | 590 HK | 22.90 | 28.85 | 8.4 |
Key Assumptions
| Metric | 2013 | 2014 | 2015F |
|---|---|---|---|
| GDP (% yoy) | 7.7 | 7.2 | 7.0 |
| Raw Milk Price | 110 | 100 | 85 |
| CPO (US$/mt) | 736 | 725 | 765 |
| BDI | 1,219 | 1,200 | 1,300 |
Corporate Events
| Event | Venue | Date |
|---|---|---|
| Regional 1H15 Strategy Forum | Kuala Lumpur | 3 Dec |
| Greater China 1H15 Strategy Analyst Presentation | Singapore | 4 Dec |
Analyst Notes
-
Renee Tai and Lawrence Li are the analysts.
-
Top Recommendations:
- Chow Tai Fook is the top pick due to its mass-market focus and self-owned store network.
- Luk Fook is also recommended for its margin growth and reduced reliance on Hong Kong sales.
- Belle is highlighted as a good buying opportunity after recent share price weakness.
- Daphne is also recommended due to its restructuring and reduced fixed costs.
-
Key Risks:
- For CMD, risks include falling raw milk prices, competition in downstream, and brand reputation issues.
- For railway stocks, risks include geopolitical and financial uncertainties in overseas projects.
Sector Catalysts
- Strong pick-up in railway investment in 4Q14.
- More overseas contracts expected to boost construction contractors' share prices.
Summary of Recommendations
- Consumer Sector: OVERWEIGHT on discretionary names, UNDERWEIGHT on staples.
- Railway Sector: OVERWEIGHT maintained due to strong investment outlook and potential overseas contracts.
- CMD: SELL initiated due to weak fundamentals and over-optimism in the market.
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