20140516-大华继显-Regional_Morning_Notes_54页_2mb

Regional Morning Notes Summary - 16 May 2014

Core Content

This document is a summary of regional market insights and company performance updates for May 16, 2014, focusing on Singapore, China, and Malaysia. It includes analysis of company results, stock recommendations, key assumptions, and corporate events.

Key Stories

Singapore

• Banking Sector: Highlighted the unsung success of overseas expansion.
• Property Sector: Home sales increased by 55% due to new launches and price discounts.
• Company Results:
  • Parkson Retail (3368 HK):
    • 1Q14 net profit fell 34% yoy to Rmb149m.
    • Weak same-store sales and new store losses will continue to drag margins.
    • Maintained SELL rating with a target price of HK$1.23.
    • Key financials show declining net profit and EBITDA margins.
    • Expected to face continued sales weakness due to competition and rising costs.
  • Nam Cheong (NCL SP): Solid start to the year with 1Q14 results.
  • Noble Group (NOBL SP): Results above expectations due to higher margins in energy and MMO divisions, but agricultural segment reported a loss.
  • Pacific Radiance (PACRA SP): Strong 1Q14 performance.
  • Keppel REIT (KREIT SP): Expected to see a prelude to MBFC acquisition with a sale of Prudential Tower.

China

• Strategy: Despite official statements, the government is expected to provide incremental policy support due to weak economic data.
• Key Assumptions:
  • GDP growth forecast for 2014 is 4.3%.
  • Commodity prices (Brent, CPO, etc.) show mixed trends.
• Top Picks:
  • Anhui Conch, China Galaxy Securities, Bank Mandiri, Gamuda, DBS, PTT, etc., with BUY recommendations.
• Key Risks:
  • Continued weakness in consumer discretionary due to anti-corruption drive.
  • Uncertainty in manufacturing and real estate sectors.
• Corporate Events:
  • Analyst presentations and investor events in Singapore and Malaysia.

Malaysia

• Perisai Petroleum (PPT MK):
  • 1Q14 reported a net loss due to non-charter of derrick pipelay barge and mobile offshore production unit.
  • BUY recommendation due to expected weakness and potential for recovery.

Main Points

Singapore

• Parkson Retail: Poor performance in 1Q14, with new stores contributing to losses and declining concessionaire rates.
• Noble Group: Strong performance in energy and MMO divisions, but agricultural segment reported a loss.
• Pacific Radiance: Strong results in 1Q14, with a BUY recommendation.
• Keppel REIT: Expected to be involved in an MBFC acquisition, with a sale of Prudential Tower.

China

• Economic Outlook: Weak macroeconomic data and policy uncertainty.
• Consumer Discretionary: Likely to be negatively impacted by anti-corruption efforts.
• Real Estate and Infrastructure: Expected to benefit from incremental policy support and improved liquidity.
• Top Picks: Focus on sectors like healthcare, clean energy, railway, and infrastructure.

Malaysia

• Perisai Petroleum: Net loss due to operational factors, but BUY recommendation based on expected recovery.

Key Financials and Metrics

• Parkson Retail:
  • Net profit in 1Q14: Rmb149m.
  • EBITDA margin: 57.3%.
  • Net margin: 36.0%.
  • Target price: HK$1.23.
• Zhejiang Expressway (576 HK):
  • 1Q14 net profit up 18.2% yoy to Rmb512m.
  • Revenue increased by 15.9% yoy to Rmb2,018m.
  • Maintained BUY rating with a target price of HK$8.84.
  • EBITDA margin: 13.1%.
  • Net margin: 23.2%.
  • Share price: HK$7.27.

Key Indices

Corporate Events

Analysts

• Tham Mun Hon: +852 2236-6799 | munhon.tham@uobkayhian.com.hk
• Benjamin Ho: +852 2236-6798 | benjamin.ho@uobkayhian.com.hk
• Renee Tai: +852 2826-1324 | renee.tai@uobkayhian.com.hk
• Lawrence Li: +8621 5404 7225 ext 813 | lawrenceli@uobkayhian.com
• Angela Zhou: +8621 5404 7225 ext 858 | angelazhou@uobkayhian.com

Top Picks

SELL

• Parkson Retail (3368 HK):
  • Share price: HK$2.22
  • Target price: HK$1.23
  • Upside: -44.6%

BUY

• Zhejiang Expressway (576 HK):
  • Share price: HK$7.27
  • Target price: HK$8.84
  • Upside: +21.6%

Summary

The document provides a detailed overview of regional market conditions, with a focus on the performance of companies in Singapore and China. Key themes include the expected support for real estate and infrastructure, the impact of anti-corruption on consumer discretionary, and the challenges faced by Parkson Retail due to weak sales and rising costs. Zhejiang Expressway reported better-than-expected results, supported by the acquisition of new toll roads and steady traffic growth. The overall sentiment leans towards cautious optimism, with a preference for sectors with stronger earnings visibility and a focus on policy support and market recovery.