20160331-大华继显-Regional_Morning_Notes_36页_1mb

Regional Morning Notes Summary

Core Content Overview

This document provides a summary of financial results and market analysis for various companies and sectors across China, Malaysia, Singapore, and Thailand, as well as key indices and investment recommendations. It also includes details on corporate events and valuation data.

Main Points by Region

China

• Banking Sector:

  • 2015 results were broadly in line with expectations.
  • Dividend cuts were a slight negative for large banks.
  • NPL (Non-Performing Loan) pressures and NIM (Net Interest Margin) contraction are expected to continue into 2016.
  • ICBC and CCB are the only BUY recommendations due to better asset quality and capital ratios.
  • The banking sector remains cautious, with a potential debt-to-equity swap programme that could negatively impact valuation.

• China Railway Group (390 HK):

  • 2015 net profit increased by 13.8% yoy, slightly beating expectations.
  • Revenue growth was modest, driven by infrastructure construction and lower interest costs.
  • Improved balance sheet and cash position supported earnings growth.
  • OBOR (One Belt One Road) and URT (Urban Rail Transit) are expected to be key growth drivers in 2016.
  • Maintain BUY recommendation with a target price of HK$7.20.

• China Resources Gas (1193 HK):

  • Net profit up 14% yoy, core earnings up 23% yoy.
  • Expect fundamental improvements in 2016.
  • Target price increased to HK$28.00.

• China Pioneer Pharma (1345 HK):

  • Net profit declined 33% yoy.
  • Upgrade to HOLD, expecting growth recovery in 2016.

• Dongfeng Motor (489 HK):

  • Results in line with expectations.
  • Core profit increased 8.6% yoy.
  • Sales target for 2016 to grow 6.1% yoy.
  • Target price cut to HK$13.00.

• Evergrande Real Estate Group (3333 HK):

  • Shenzhen and Hainan projects are expected to drive earnings growth in 2016.
  • Maintain HOLD recommendation.

• Phoenix Healthcare (1515 HK):

  • Net profit declined by 27.4% yoy, less than expected.
  • Maintain SELL recommendation.

• Sino Biopharmaceutical (1177 HK):

  • Revenue and net profit below estimates.
  • Downgraded to SELL.

Malaysia

• Property Sector:
  • Highlights from Johor property tour.
  • Yinson (YNS MK) reported core profit in line with expectations.
  • A special dividend is expected to increase yield to 5%.
  • Maintain HOLD recommendation due to high termination risk from FPSO Allan.

Singapore

• Plantation Sector:
  • Share prices reacted to rising CPO (Crude Palm Oil) prices.
  • Target prices upgraded based on 2017 projections.
  • Expect earnings potential from higher CPO prices.

Thailand

• Banking Sector:
  • Investors remain neutral on Thai banks.
  • Feedback from Taipei indicates cautious outlook.

Key Indices Performance (as of 31 Mar 2016)

Top Picks

BUY Recommendations

• Beijing Capital (694 HK): Target Price HK$11.60, Potential Upside 42.9%
• ICBC (1398 HK): Target Price HK$5.05, Potential Upside 15.3%
• Bank BJB (BJBR J): Target Price HK$1,140.00, Potential Upside 18.8%
• Gamuda (GAM MK): Target Price HK$5.55, Potential Upside 13.7%
• WCT (WCTHG MK): Target Price HK$2.05, Potential Upside 21.3%
• Citiv Developments (CIT SP): Target Price HK$10.86, Potential Upside 32.1%
• DBS (DBS SP): Target Price HK$17.48, Potential Upside 12.8%
• Charoen (CPF TB): Target Price HK$30.00, Potential Upside 24.5%
• Siam (SCC TB): Target Price HK$630.00, Potential Upside 35.8%

SELL Recommendations

• Spurakencana (SAKP MK): Target Price HK$1.43, Potential Downside 22.3%
• Sembcorp (SMM SP): Target Price HK$0.88, Potential Downside 47.6%

Key Assumptions

• Brent Crude (Average): 2015: RM53.60, 2016F: RM42, 2017F: RM54
• CPO (Crude Palm Oil): 2015: RM2,168, 2016F: RM2,500, 2017F: RM2,600

Corporate Events (31 Mar - 15 Apr 2016)

Conclusion

The document highlights the performance of key companies and sectors in the Asia-Pacific region, focusing on China's banking and railway sectors, Malaysia's property, Singapore's plantation, and Thailand's banking. While some companies showed improved results, others faced challenges. The BUY recommendations are mainly for companies with strong fundamentals and growth potential, while SELLs are for those with declining performance and higher risk. Valuation data and market assumptions are also provided to support investment decisions.