20160311-大华继显-Regional_Morning_Notes_25页_1mb

报告摘要

Regional Morning Notes Summary

Core Content Overview

This document provides a comprehensive market analysis for the week of 11 March 2016, focusing on key economic indicators, sector updates, company-specific insights, and investment recommendations across China, Indonesia, Malaysia, Singapore, and Thailand.

China: Economic and Sector Highlights

Inflation

Consumer inflation (CPI) increased to 2.3% yoy in February 2016, 0.5ppt higher than the consensus estimate of 1.8% yoy, driven by seasonal factors (Chinese New Year) and cold weather.
Core CPI rose 1.3% yoy, lower than 1.5% yoy in January 2015, indicating temporary inflationary pressure.
Food prices surged by 7.3% yoy, contributing significantly to the CPI increase, with vegetables and pork seeing 30.6% and 25.4% yoy increases respectively.
Producer Price Index (PPI) deflation eased to -4.9% yoy in February 2016, in line with market expectations, due to rising global commodity prices.
PPI deflation for producer goods was -6.5% yoy, with mining and quarrying at -18.2% yoy, and raw materials at -8.9% yoy.
Purchasing Price Index improved to -5.8% yoy, showing moderate easing in fuel and power and ferrous metal materials.
Inflation expectations are rising, supported by rising commodity prices and increased money supply.
The PBOC is expected to continue monetary easing, potentially leading to inflationary pressures in Q4 2016, which may increase RMB devaluation pressure and property/stock market bubbles.

Power Sector

Hong Kong-listed IPPs are expected to report decent core earnings growth in 2015, with 10-28% yoy growth due to lower coal prices offsetting tariff cuts.
Huaneng Power is highlighted for strongest core earnings growth, with a target price of HK$9.40 and core earnings forecast of Rmb16,053m, up 26% yoy.
Huadian Power is expected to report core earnings of Rmb8,967m, with a Rmb1.5b impairment leading to a core earnings of Rmb7,850m, up 28% yoy.
Datang Power is projected to see 50% yoy earnings growth, primarily due to low base effect from write-offs in its coal-chemical segment.
CR Power is expected to have 10% yoy earnings growth, with a target price of HK$19.10 and revenue growth of 2.5% yoy.
The power sector is expected to see stable earnings in the medium term due to:
- Delayed power price bidding to avoid power outages.
- Reduced overcapacity starting from 2017.
- SOE reforms and parent asset injections to offset earnings declines.

Company Updates

MicroPort Scientific Corporation (853 HK)

The company is expected to cut losses and deliver steady earnings growth from 2016 onwards due to cost-cutting and efficiency improvements.
OrthoRecon business is recovering, with revenue growth in all major markets in Feb 2016.
Firehawk product is expected to contribute 10% of total revenue in 2016.
Net profit is forecasted to improve from -US$59.5m in 2014 to -US$9m in 2015, with a positive outlook for 2016 onwards.
Target price is HK$4.50, with an upside of +31.2% from current price HK$3.43.
Key financials show improving EBITDA, operating profit, and net profit in 2016, with P/B at 1.8x and dividend yield at 0.0%.

Investment Picks

BUY Recommendations

Beijing Capital (694 HK): Target price HK$11.40, potential upside +52.8%.
ICBC (1398 HK): Target price HK$5.05, potential upside +22.6%.
Bank BJB (BJBR IJ): Target price HK$1,140.00, potential upside +22.6%.
WCT Holdings (WCTHG MK): Target price HK$2.05, potential upside +26.5%.
City Developments (CIT SP): Target price HK$6.10, potential upside +44.0%.
Huaneng Power (902 HK): Target price HK$9.40, potential upside +22.6%.
Huadian Power (1071 HK): Target price HK$7.50, potential upside +8.8%.
CPI (2380 HK): Target price HK$6.10, potential upside +44.0%.
DBS (DBS SP): Target price HK$17.48, potential upside +15.4%.
Charoen (CPF TB): Target price HK$30.00, potential upside +40.8%.
Siam (SCC TB): Target price HK$630.00, potential upside +35.8%.

SELL Recommendations

Spurakencana (SAKP MK): Target price HK$1.43, potential downside -32.2%.
Sembcorp (SMM SP): Target price HK$0.88, potential downside -49.3%.

Key Assumptions

Region	GDP (yoy)	2014	2015F	2016F
US	2.9	2.4	2.5	2.5
Euro Zone	2.0	0.9	1.5	1.7
Japan	2.7	-0.1	0.5	1.0
Singapore	2.0	2.9	2.0	2.7
Malaysia	2.7	6.0	4.9	4.8
Thailand	3.2	0.9	2.7	3.2
Indonesia	5.4	5.0	4.8	5.4
Hong Kong	1.5	2.5	1.8	1.5
China	6.7	7.3	6.5	6.7

Brent Crude is forecasted to rise to US$54/bbl in 2016, up from US$42/bbl in 2015.
CPO (Crude Palm Oil) is expected to reach RM2,500/mt in 2016, up from RM2,168/mt in 2015.

Corporate Events

Event Name	Venue	Start Date	End Date
China Economy and China Financial Sector Analyst Presentation	Kuala Lumpur	10 Mar	11 Mar
TCL Display Technology Roadshow	Hong Kong	14 Mar	14 Mar
TCL Display Technology Holdings Roadshow	Taipei	21 Mar	22 Mar
ASEAN Conference	Taiwan	22 Mar	23 Mar
Country Garden Roadshow	Kuala Lumpur	24 Mar	24 Mar
Wenzhou Kangning Hospital Roadshow	Shanghai	31 Mar	31 Mar

Key Indices Performance

Index	Previous Close	1D %	1W %	1M %	YTD %
DJIA	16995.1	0.0	0.3	6.8	-2.5
S&P 500	1989.6	0.0	-0.2	7.4	-2.7
FTSE 100	6036.7	-1.8	-1.5	6.4	-3.3
AS30	5210.9	-0.1	1.3	7.0	-2.5
CSI 300	3013.1	-1.9	-1.5	1.7	-19.2
FSSTI	2809.1	0.0	0.8	10.7	-2.6
HSCEI	8420.1	-0.3	-0.3	10.0	-12.8
HSI	19984.4	-0.1	-0.2	7.8	-8.8
JCI	4793.2	-0.4	-0.9	0.4	4.4
KLCI	1690.9	0.3	0.2	2.9	-0.1
KOSPI	1969.3	0.8	0.6	5.8	0.4
Nikkei 225	16852.4	1.3	-0.6	7.2	-11.5
SET	1379.1	-0.8	-0.0	7.7	7.1
TWSE	8660.7	0.3	0.6	7.4	3.9
BDI	384	2.1	12.3	32.4	-19.7
CPO (RM/mt)	2477	0.7	1.6	2.3	12.6
Brent Crude (US$/bbl)	40	-2.4	8.2	30.0	7.6

Conclusion

The report highlights a mixed economic outlook across the region, with China showing signs of inflationary pressure and stable earnings for power sector companies. MicroPort Scientific Corporation is noted for its recovery and steady earnings growth. The BUY recommendations include several key stocks, while SELL recommendations are made for Spurakencana and Sembcorp. The PBOC is expected to continue monetary easing to support growth, and structural reforms are highlighted as critical for long-term stability.