20140822-大华继显-Regional_Morning_Notes_40页_2mb

Regional Morning Notes Summary - 22 August 2014

Core Content Overview

This document provides a summary of stock performance and company results for various regions including China, Hong Kong, Indonesia, Malaysia, Singapore, and Thailand. It includes key financial metrics, analyst recommendations, and market outlooks for listed companies and indices.

Main Points

China

• Bank of Communications (3328 HK)

  • 1H14 Results: Net profit growth of 5.6% yoy, slightly ahead of expectations. Operations improved sequentially, but lagged behind peers in terms of NIM and asset growth.
  • Recommendation: Maintain SELL with a new target price of HK$5.35.
  • Key Metrics:
    • Net interest income: 67,211 Rmbm (1H14)
    • NPL ratio: 1.13% (up 4bp qoq)
    • Cost-to-income ratio: 36.9% (up 5.3pt qoq)
    • T1 CAR: 10.70% (up 56bp qoq)
    • Net profit (adj.): 36,773 Rmbm (1H14)
  • Valuation: P/BV at 0.9x, P/NTA at 0.9x, Adjusted P/E at 5.8x
  • Outlook: Mixed ownership scheme may have limited impact in the short term; fundamentals remain weak due to high LDR and credit costs.

• China Dongxiang (3818 HK)

  • 1H14 Results: Underlying sportswear business remains weak.
  • Recommendation: Maintain HOLD with a target price of HK$1.61.
  • Share Price: HK$1.71

• Poly Property (119 HK)

  • 1H14 Results: Lower earnings within expectations; high gearing could increase further.
  • Recommendation: Maintain SELL with a target price of HK$2.90.
  • Share Price: HK$3.53

• Singamas Container Holdings (716 HK)

  • 1H14 Results: Net profit plunged, but better 2H14 expected.
  • Recommendation: Maintain BUY with a target price of HK$2.23.
  • Share Price: HK$1.58

• Sinofert Holdings (297 HK)

  • 1H14 Results: Results in line with expectations. Sales volume beat estimates, but ASP pressure continues into 2H14.
  • Recommendation: Maintain HOLD with a target price of HK$1.00.
  • Share Price: HK$1.26

• Xstep International Holdings (1368 HK)

  • 1H14 Results: Dragged by higher advertising spending while sales remain flat.
  • Recommendation: Upgraded to HOLD with a target price of HK$3.43.
  • Share Price: HK$3.34

Hong Kong

• Li & Fung (494 HK)
  • 1H14 Results: Decent performance against a tough economic backdrop, but 2H14 remains challenging.
  • Recommendation: Maintain HOLD with a target price of HK$10.50.
  • Share Price: HK$10.48

Indonesia

• XL Axiata (EXCL IJ)
  • 2Q14 Results: Successfully assimilated Axis.
  • Recommendation: Upgraded to BUY with a target price of Rp6,100.
  • Share Price: Rp5,700

Malaysia

• Magnum (MAG MK)
  • 2Q14 Results: Expecting flattish ticket sales ahead.
  • Recommendation: Maintain BUY with a target price of RM3.33.
  • Share Price: RM3.05

Singapore

• Property & REITs: 2Q14 results review.

Thailand

• Somboon Advance Technology (SAT TB)
  • Update: "When a crisis comes, opportunity arises."
  • Recommendation: Maintain HOLD with a target price of Bt20.00.
  • Share Price: Bt17.90

Key Indices Performance

Top Picks (BUY)

Sell Recommendations

Key Assumptions

Corporate Events

Summary of Key Insights

• Bank of Communications: Improved NIM sequentially but still lags behind peers. Strong fundamentals not evident; mixed ownership scheme unlikely to have a major impact in the short term.
• Beijing Capital International Airport: Net profit growth of 12% yoy excluding forex losses. FCF yield is attractive at 15.7%. Maintain BUY with a target of HK$7.00.
• Regional Outlook: Mixed results across the board with some companies showing improved performance while others face challenges in earnings and asset quality.
• Valuation and Recommendations: Emphasis on DCF valuation for BCIA. Analysts highlight the potential of FCF and the need for careful monitoring of credit costs and LDR for BoCom.
• Market Conditions: Economic challenges persist, particularly in the aviation and banking sectors, with some companies expected to see improvement in the second half of the year.