20160317-大华继显-Regional_Morning_Notes_24页_1mb

Regional Morning Notes Summary - 17 March 2016

Core Content Overview

This document provides a summary of stock performance and analysis for key companies in Asia, including China, Indonesia, Malaysia, Singapore, and Thailand. It includes results, updates, and key financial metrics for the companies, along with market indices and analyst recommendations.

Main Points

China

Ping An Insurance (2318 HK)

• Company Description: A leading integrated financial group in China, providing insurance, banking, and investment services.
• Results:
  • 4Q15 earnings were in line with expectations, driven by strong life insurance business growth.
  • Weaker investment outlook expected for 1H16.
  • 2015 net profit reached Rmb54.2b (+38.0% yoy), slightly below the analyst's estimate.
  • Final dividend for 2H15 was Rmb0.35 (vs Rmb0.25 for 2H14).
• Stock Impact:
  • Life insurance business remained robust, with first-year premiums up 38.2% yoy.
  • P&C segment showed 42.2% yoy growth in earnings, but combined ratio increased slightly to 95.6%.
  • Banking operations are expected to drag earnings in 2016 due to higher NPL balances and provisioning charges.
• Analyst Recommendation: Maintain BUY. Target price is HK$45.00.
• Key Metrics:
  • 2015 net profit: Rmb54.2b.
  • EPS: 298.1 Fen.
  • P/EV: 1.0x.
  • Dividend Yield: 1.8%.
  • ROE: 17.4%.
• Valuation:
  • SOTP valuation for 2016: Rmb673,350m.
  • Rmb per share: 36.8.
  • HK$ per share: 45.0.

Indonesia

AKR Corporindo (AKRA IJ)

• Results:
  • 2015 net profit increased by 27.6% yoy, slightly below consensus.
• Analyst Recommendation: Maintain HOLD. Target price reduced to Rp6,850 from Rp7,000.
• Entry Price: Rp6,000.

Malaysia

Top Glove (TOPG MK)

• Results:
  • 2QFY16 net profit declined 18.5% qoq, due to a 11% qoq downward revision in ASPs and favorable forex impact.
• Analyst Recommendation: HOLD.
• Target Price: RM5.47.

Thailand

Khon Kaen Sugar Industry (KSL TB)

• Results:
  • 1QFY16 earnings dropped 12% yoy.
• Analyst Recommendation: BUY. Target price: Bt4.40.

PTT Global Chemical (PTTGC TB)

• Update:
  • Positive feedback from NDR.
  • New key catalyst from the Productivity Improvement Programme expected to drive earnings from 2H16 onwards.
• Analyst Recommendation: BUY. Target price: Bt70.00.

Key Indices

Top Picks

BUY Recommendations

• Beijing Capital: HK$7.72 (CP), HK$11.40 (TP), +47.7% upside.
• ICBC: HK$4.23 (CP), HK$5.05 (TP), +19.4% upside.
• Bank BJB: Rp925.00 (CP), Rp1,140.00 (TP), +23.2% upside.
• WCT Holdings: HK$1.63 (CP), HK$2.05 (TP), +25.8% upside.
• Maybank: RM8.82 (CP), RM9.55 (TP), +8.3% upside.
• City Developments: HK$7.58 (CP), HK$10.86 (TP), +43.3% upside.
• DBS: HK$15.37 (CP), HK$17.48 (TP), +13.7% upside.
• Charoen: HK$21.10 (CP), HK$30.00 (TP), +42.2% upside.
• Siam: HK$460.00 (CP), HK$630.00 (TP), +37.0% upside.

SELL Recommendations

• Spurakencana: HK$2.12 (CP), HK$1.43 (TP), -32.5% upside.
• Sembcorp: HK$1.68 (CP), HK$0.88 (TP), -47.6% upside.

Key Assumptions

Corporate Events

Brilliance Auto (1114 HK)

• Results:
  • 4Q15 net profit likely to have grown by 50% yoy.
  • Sales volume increased 11% yoy.
• Stock Impact:
  • 4Q15 results eased market concerns.
  • Net profit growth expected at 6% yoy in 2016 due to new model launches.
  • 1Q16 may see lower growth due to a 16% yoy decline in wholesale shipment and increased overheads.
• Analyst Recommendation: Maintain BUY. Target price: HK$8.50.
• Key Metrics:
  • 2015 net profit: Rmb3,360m.
  • EPS: 66.8 Fen.
  • P/B: 1.3x.
  • Dividend Yield: 1.7%.
  • ROE: 18.3%.
• Earnings Revision:
  • 2016F net profit estimate: Rmb3,576m (+6% yoy).
  • 2017F net profit estimate: Rmb4,480m (+25% yoy).
• Risks:
  • Downside risks from weak sales of new models and a weaker Chinese economy.
  • Upside risks from accelerated new model launches.

Conclusion

The report highlights strong performance in Ping An Insurance's life business, while caution is advised regarding its banking and investment segments. Brilliance Auto is expected to benefit from new model launches and a recovery in sales, with a continued BUY recommendation. The key indices show mixed performance, with some regions experiencing positive growth and others facing challenges. Overall, the report emphasizes the importance of valuation, earnings growth, and strategic initiatives in shaping investment decisions.