20171013-大华继显-Regional_Morning_Notes_23页_1mb

报告摘要

Regional Morning Notes Summary - 13 October 2017

Core Content Overview

This document provides a comprehensive market update for the Asia-Pacific region, focusing on key sectors and companies in China, Indonesia, Malaysia, and Singapore. It includes insights on corporate performance, earnings revisions, market valuations, and upcoming events.

Main Points

China

Airlines Sector:
- Capacity growth is expected to undermine yield recovery in the second half of 2017 (2H17).
- Air China, China Eastern Airlines (CEA), and China Southern Airlines (CSA) have all experienced share price declines since July due to rising jet fuel prices, RMB depreciation, and concerns over passenger yields.
- International yields are expected to be pressured by accelerated capacity additions, with Air China likely to be most impacted as its international capacity growth will almost triple that of the first half of 2017.
- Domestic yields could be affected in Q4 2017 due to new OTP measures at BCIA, which may require reductions in prime time slots.
- Earnings estimates for the big three carriers have been cut, with target prices revised downward. CEA and CSA have been downgraded from BUY to HOLD.
- Jet fuel prices increased by 16% from July 2017, affecting the operating environment.
- NIM for the big three carriers has declined, with projections of further reduction in 2018.

Indonesia

Bank Negara Indonesia (BBNI):
- 3Q17 results were the slowest quarter so far, with net profit up 12% yoy and 17.5% qoq.
- Loan growth momentum has slowed, as most infrastructure loans were disbursed in 1H17.
- The bank is expected to maintain mid-double-digit earnings growth in 2017.
- Maintain BUY rating with a target price of Rp8,200, implying an upside of 9.3% from the current price of Rp7,500.
- NPL ratio improved slightly, and credit costs are expected to remain below 2% by year-end.

Malaysia

2018 Budget Preview:
- An "election" budget is expected to be tabled on 27 October 2017, likely to be market neutral.
Corporate Highlights:
- Dialog Group (DLG MK): Maintained BUY rating with a target price of RM2.52, despite a 44% ytd share price gain.
- VS Industry (VSI MK): Maintained BUY rating with a target price of RM3.50, as the stock has risen 115% ytd.
- Choo Bee Metal Industries (CBEE MK): Maintained BUY rating with a target price of RM3.00, expected to benefit from rising steel ASP and lower input costs.

Singapore

Asian Gems Corporate Highlights:
- United Overseas Bank (UOB SP): Not rated, with a share price of S$24.07.
Key Indices:
- The document lists various indices including DJIA, S&P 500, FTSE 100, and others, with their performance metrics for the last 1 day, 1 week, 1 month, and year-to-date (YTD).

Key Financial Highlights

Earnings Revisions

Earnings forecasts for Air China, CEA, and CSA have been cut by 15%, 28%, and 33% respectively due to lower pax yields and higher fuel prices.
BBNI's net profit for 3Q17 was Rp3.7t, up 12% yoy, with net interest income rising only 2% yoy, the weakest quarter for NII so far.

Valuation Metrics

BBNI is trading at 1.2x P/B, with a target price of 1.4x 2018F P/B.
Air China, CEA, and CSA have all had their target prices lowered, with the new target prices being HK$7.20, HK$4.30, and HK$5.70 respectively.
The document outlines financial ratios and operating assumptions for the big three carriers, including changes in NPL ratios and P/B.

Upcoming Events

Analyst Presentation on Indonesia: 16 October 2017 in Brunei.
Consumer Piece and Strategy: 17–18 October 2017 in Hong Kong.
Luncheon with O-Net Technologies: 17 October 2017 in Hong Kong.
Fintech Seminar 2017: 19 October 2017 in Kuala Lumpur.
UOB Kay Hian Annual Regional Strategy Conference: 13 November 2017 in Kuala Lumpur.

Key Analysts

K Ajith: +65 6590 6627, ajith@uobkayhian.com
Sophie Yu: +852 2826 1392, sophie.yu@uobkayhian.com.hk
Alexander Margaronis: +6221 2993 3876, alexandermargaronis@uobkayhian.com

Summary Table

Company	Ticker	Recommendation	Target Price (HK$)	Upside (%)
Air China	753 HK	HOLD	7.20	-
CEA	670 HK	HOLD	4.30	-
CSA	1055 HK	HOLD	5.70	-
BBNI	BBNI IJ	BUY	8,200	+9.3

Additional Information

BBNI Financial Ratios:
- ROE: 15.9% (3Q17), expected to be maintained at year-end.
- NPL Ratio: 2.8% (3Q17), expected to continue decreasing.
- Tier-1 CAR: 19.0% (3Q17), projected to decrease to 17.6% in 2018.
BBNI Loan Growth:
- 3Q17 loan growth was 13.3% yoy.
- The bank has disbursed Rp90t in infrastructure loans, with an overall target of Rp111t for 2017.
BBNI Market Position:
- BBNI is undervalued, trading at a 40% discount to BMRI and BBRI.
- The bank's share price performance has been positive, with a 35.7% YTD return.

Summary Table (Financial Ratios)

Metric	3Q17	2017F	2018F	2019F
NPL Ratio (%)	2.8	2.8	2.7	2.5
Tier-1 CAR (%)	19.0	18.0	17.6	17.0
P/B (x)	1.2	1.1	1.0	-
ROE (%)	15.9	15.9	15.9	-
Net Interest Income (Rpb)	29,995	33,333	36,855	40,384

Summary Table (Earnings)

Metric	2016	2017F	2018F	2019F
Net Profit (Rpb)	11,339	13,225	15,308	17,169
EPS (cents)	180	201	220	240
P/E (x)	12.3	10.6	9.1	8.1

Summary Table (Operating Assumptions)

Metric	Air China	CEA	CSA
Domestic Pax Traffic Growth	6.1%	9.6%	10.4%
International Pax Traffic Growth	6.5%	8.7%	11.9%
Domestic Pax Yield Growth	1.0%	0.9%	-0.3%
International Pax Yield Growth	-3.6%	-4.2%	-8.1%
Overall Pax Yield Growth	-0.5%	-0.9%	-2.3%

Summary Table (Capacity Growth)

Carrier	1H17 (%)	2H17 (%)
Air China	4.8	12.0
CEA	11.1	11.0
CSA	10.6	11.2

Summary Table (Share Price Performance)

Company	Ytd Returns (%)	Ytd Performance vs HSI (%)	Returns Since 1 Jul 17 (%)
Air China	31.9	+3.5	-17.8
CEA	9.8	-18.5	-18.3
CSA	34.1	+5.7	-16.1
HSI Index	28.3	n.a.	+10.1

Summary Table (Peer Comparison)

Company	Price (HK$)	Target Price (HK$)	P/B (x)	P/B (2018F)	PE (2017F)	PE (2018F)	EV/EBITDA (2017F)	EV/EBITDA (2018F)	ROE (2017F)	Net Gearing (2017F)
Air China	6.63	7.20	0.96	0.92	13.2	15.8	7.0	6.9	7.7	105.5
CEA	3.90	4.30	0.89	0.83	13.7	11.8	7.7	7.2	9.5	223.0
CSA	5.45	5.70	0.91	0.85	14.7	9.6	7.4	6.0	7.2	146.0

Summary Table (Key Indices)

Index	Prev Close	1D %	1W %	1M %	YTD %
DJIA	22841.0	-0.1	0.3	3.1	15.6
S&P 500	2550.9	-0.2	-0.0	2.1	13.9
FTSE 100	7556.2	0.3	0.6	2.4	5.8
AS30	5864.1	0.4	2.5	1.0	2.5
CSI 300	3913.0	0.3	2.4	1.8	18.2
FSSTI	3303.1	0.7	1.3	2.3	14.7
HSCEI	11500.3	0.8	0.9	2.8	22.4
HSI	28459.0	0.2	0.3	2.0	29.4
JCI	5926.2	0.7	0.4	1.4	11.9
KLCI	1754.0	-0.2	-0.3	-1.8	6.8
KOSPI	2474.8	0.7	4.3	4.9	22.1
Nikkei 225	20954.7	0.4	1.6	5.5	9.6
SET	1712.5	-0.1	1.3	4.2	11.0
TWSE	10711.4	0.7	2.4	1.7	15.8
BDI	1433	1.1	3.7	6.6	49.1
CPO (RM/mt)	2692	-1.1	-1.1	-3.6	-15.8
Brent Crude (US$/bbl)	56	-1.2	-1.3	3.6	-1.0

Summary Table (Corporate Events)

Event	Venue	Start Date	End Date
Analyst Presentation on Indonesia	Brunei	16 Oct	16 Oct
Consumer Piece and Strategy	Hong Kong	17 Oct	18 Oct
Luncheon with O-Net Technologies	Hong Kong	17 Oct	17 Oct
Fintech Seminar 2017	Kuala Lumpur	19 Oct	19 Oct
UOB Kay Hian Annual Regional Strategy Conference	Kuala Lumpur	13 Nov	13 Nov

Summary Table (Earnings and Revenue)

Metric	3Q17 (Rpb)	3Q16 (Rpb)	YoY %
Net Interest Income	8,107	7,963	+1.8
Non-Interest Income	3,257	2,879	+13.1
Operating Income	11,364	10,842	+4.8
Operating Expenses	4,976	4,741	+5.0
Net Profit	3,744	3,346	+11.9

Summary Table (Capital Adequacy)

Metric	3Q17 (%)	2017F (%)	2018F (%)	2019F (%)
Tier-1 CAR	18.04	18.0	17.6	17.0
Total CAR	19.0	18.9	18.4	17.8

Summary Table (Liquidity)

Metric	3Q17 (%)	2017F (%)	2018F (%)	2019F (%)
Loan/Deposit Ratio	87.9	89.6	90.0	90.7
Liquid Assets/Short-term Liabilities	31.3	26.7	23.5	20.9
Liquid Assets/Total Assets	22.1	19.3	17.2	15.5

Summary Table (Balance Sheet)

Metric	2016 (Rpb)	2017F (Rpb)	2018F (Rpb)	2019F (Rpb)
Total Assets	603,032	692,544	798,856	919,101
Customer Deposits	415,453	488,522	572,819	669,812
Shareholders' Funds	108,234	118,421	130,612	143,859
Total Equity & Liabilities	603,032	692,544	798,856	919,101