2021-07-26-未知机构-Catalysts_to_watch_as_Q2_results_continue_23页_190kb

ASEAN Equity Strategy Summary

Core Content Overview

This document outlines the equity strategy and key financial outlook for several ASEAN companies and markets, focusing on Q2 2021 results and broader economic and political factors. It includes investment ratings, price targets, and analysis of performance expectations based on various drivers such as consumer behavior, cost management, and industry trends.

Key Points and Analysis

Q2 Results and Market Consensus

• Sabeco (SAB): Expected 15% YoY revenue growth and 20% YoY net profit growth, driven by off-trade consumption and cost savings. However, still 2% and 5% below consensus, respectively.
• Bursa Malaysia: Net profit estimate is 4% below consensus, with ADTV normalising faster than expected. Q221 ADTV was RM3.7bn, -1% YoY and -27% QoQ.
• CapitaLand Integrated Commercial Trust (CICT): DPU estimates are ahead of consensus. Retail performance in Beijing is expected to improve, while Guangzhou's tightened control measures may affect results.
• Keppel REIT: DPU estimates are in line with consensus. Leasing activity is expected to slow, but rent reversion remains positive. Management may discuss capital redeployment.
• Starhill Global REIT: DPU estimates are in line with consensus. Retail operations are expected to deteriorate QoQ due to heightened alert measures. Rent reversion may surprise on the downside.
• Maxis Berhad: Revenue and EPS estimates are 5% above consensus. Focus will be on enterprise and home broadband development, response to Celcom-Digi merger, and involvement in 5G rollout.
• Westports Holdings: Expected 14% YoY EBITDA growth driven by higher container volumes. Market focus will be on 2H2021 volume guidance and concession negotiations with the Malaysian government.
• BDO: Net profit is expected to increase 132% YoY due to lower credit costs. NIM is projected to improve, while loans contract 9% YoY. Net profit estimate is 19% above VA consensus.
• OCBC: Net profit is expected to rise 50% YoY due to lower credit costs and stronger top-line. NII is expected to decline 2% YoY. Net profit estimate is 6% above VA consensus.
• UOB: Net profit is expected to increase 31% YoY due to stronger top-line and lower credit costs. NIM is stable QoQ but up YoY. NII is expected to improve 7% YoY.

Political and Economic Factors

• Philippines: President Duterte is set to outline his agenda ahead of May 2021 elections. He may run for Vice President or endorse an ally. Budget 2021 details will be released in the coming weeks, with potential for additional stimulus.
• Indosat (ISAT): Results of the 5th annual UBS Evidence Lab survey indicate share gains, especially in Java. However, the company's share price has re-rated and outperformed peers, raising concerns about relative valuations.
• Astra International (ASTRA): Expected Q221 net profit of Rp4.2tn, driven by automotive, financing, and United Tractors. However, lower margins and assumptions about a second lockdown in Indonesia may lead to estimates below consensus.
• United Tractors: Net profit is expected to grow 29% QoQ and 8% YoY, driven by improved mining contractor volumes and pricing structures. However, lower margins are anticipated due to lockdown assumptions.
• Kalbe Farma (KLBF) and HM Sampaerna (HMSP): Expected subdued performance due to excise tax increases. Sales revenue growth is likely to decline slightly, with earnings expected to rise YoY due to a low base in Q220.
• Advanced Info Service (AIS): Mobile revenues may be affected by lockdowns and competition from unlimited plans. EBITDA margin could decline slightly due to higher marketing spend. 5G adoption is gaining momentum with 700k subs as of Q121.

Sector-Specific Insights

• Banks: In Singapore, incremental asset quality stress is expected to be manageable due to conservative provisioning. In the Philippines, focus is more on loan growth and NIM than asset quality.
• REITs: Management guidance on capital redeployment, acquisitions, and science park redevelopment is anticipated. Retail performance varies based on regional lockdown measures and control policies.
• Packaging and Chemicals: SCG Packaging is expected to benefit from higher margins and demand, while Siam Cement Group (SCG) may see improved chemical EBITDA due to high polyolefin margins and robust regional demand.

Investment Ratings and Price Targets

Key Risks and Considerations

• Covid-19 Impact: Continued mobility restrictions and low vaccination rates in ASEAN countries may affect credit costs and asset quality in the banking sector.
• Market Sentiment: Indosat's re-rating and strong performance may not be sustainable due to potential network disruption from mergers.
• Regulatory and Structural Changes: Attention is on restructuring initiatives, such as Jardine Matheson Holdings' merger with Zung Fu and Keppel's potential exit from the O&M division.
• Valuation Concerns: Some stocks, like Indosat and Kalbe Farma, are viewed as overvalued relative to sector averages.

Conclusion

The ASEAN equity strategy highlights both opportunities and risks across various sectors, with a focus on how Q2 results and broader macroeconomic factors may impact performance and valuations. Investors are advised to closely monitor company-specific guidance, industry consolidation, and regulatory changes as key drivers of future performance.