20170331-大华继显-Regional_Morning_Notes_29页_2mb

报告摘要

Regional Morning Notes Summary - 31 March 2017

Core Content Overview

This document provides an analysis of financial results and market performance for several companies and regions, with a focus on China, Singapore, Malaysia, and Indonesia. It includes company-specific results, key financial metrics, valuation analysis, and investment recommendations.

Key Stories by Region

Singapore

Thai Beverage (THBEV SP/BUY/S$0.935/Target: S$1.09)
- Described as "The awakening giant."
- Expected to see solid core business growth, though possible earnings dilution from CMD.
- Initiate coverage with a BUY rating and a target price of S$1.09.

China

Beijing Enterprises Water Group (371 HK/BUY/HK$5.70/Target: HK$7.60)
- 2016 net profit rose 31% yoy to HK$3,227m, exceeding consensus but below management guidance.
- Recurring earnings increased by 42% yoy after excluding VAT and RMB depreciation.
- Management guided for 30% earnings growth in 2017, driven by business expansion and prudent management.
- Maintain BUY rating with a target price of HK$7.60.
China Construction Bank (939 HK/BUY/HK$6.33/Target: HK$7.28)
- 4Q16 saw a 2.8% yoy net profit growth, supported by a 5.4% yoy increase in fee income and a 12.3% yoy drop in operating expenses.
- NPL ratio improved to 1.52% in 4Q16, with a significant 19.3% yoy reduction in overdue loans.
- Maintain BUY rating with a target price of HK$7.28.
China Mengniu (2319 HK/BUY/HK$15.94/Target: HK$17.60)
- 2016 core earnings were in line with expectations.
- Expected solid growth in the core business, but possible earnings dilution from CMD.
Huaneng Renewables Corp (958 HK/BUY/HK$2.65/Target: HK$3.50)
- 2016 net profit increased by 43% yoy.

Indonesia

Cement Sector
- 1Q17 performance may deteriorate due to sluggish demand, falling ASP, and higher coal prices.

Malaysia

Yinson Holdings (YNS MK/BUY/RM3.21/Target: RM3.75)
- FY17 results exceeded estimates due to variation orders and low tax/finance costs.
- Expected earnings growth in 2HFY18 with first oil from Ghana.
RHBank (RHBBANK MK/SELL/RM5.27/Target: RM4.50)
- Downgraded to SELL due to low O&G loan loss coverage ratio (30%), the lowest in the industry.

Key Indices Performance

Index	Previous Close	1D %	1W %	1M %	YTD %
DJIA	20728.5	0.3	0.3	-0.4	4.9
S&P 500	2368.1	0.3	0.9	0.2	5.8
FTSE 100	7369.5	-0.1	0.4	1.5	3.2
AS30	5931.8	0.4	3.1	3.0	3.7
CSI 300	3436.8	-0.8	-0.7	-0.5	3.8
FSSTI	3173.2	-0.4	1.5	2.5	10.2
HSCEI	10355.7	-0.8	-1.3	0.6	10.2
HSI	24301.1	-0.4	-0.1	2.4	10.5
JCI	5593.0	0.0	1.1	3.8	5.6
KLCI	1749.3	-0.1	0.1	3.3	6.5
KOSPI	2164.6	-0.1	-0.4	3.5	6.8
Nikkei 225	19063.2	-0.8	-0.1	-0.3	-0.3
BDI	1324	-1.0	10.7	54.1	37.8
CPO (RM/mt)	2887	0.0	-3.4	-2.0	-9.7
Brent Crude	53	1.0	4.7	-4.7	-6.8

Top Picks

Ticker	Rating	Price (Icy)	Target Price (Icy)	Upside (%)
Alibaba	BUY	108.85	130.00	19.4
Beijing	BUY	5.70	7.60	33.3
Indosat	BUY	6,975.00	7,900.00	13.3
Tiga Pilar	BUY	2,130.00	2,550.00	19.7
Inari Amertron	BUY	2.05	2.15	4.9
V.S. Industrv	BUY	1.72	2.20	27.9
OCBC	BUY	9.71	10.75	10.7
Venture Corp	BUY	11.50	12.40	7.8
Bangkok Dusit	BUY	21.30	27.00	26.8
Siam Cement	BUY	542.00	600.00	10.7
Great Wall Motor	SELL	2333 HK	6.00	-32.1
MGM China	SELL	2282 HK	13.20	-18.1

Key Assumptions

Region	2016 GDP (yoy)	2017F GDP (yoy)	2018F GDP (yoy)
US	1.6	2.7	2.5
Euro Zone	1.7	1.6	1.5
Japan	1.0	0.9	1.2
Singapore	2.0	2.4	2.8
Malaysia	4.2	4.5	4.7
Thailand	3.2	3.3	3.1
Indonesia	5.0	5.2	5.5
Hong Kong	1.9	2.0	2.0
China	6.7	6.3	6.3
Brent (Avg)	45	55	60
CPO (Avg)	2,653	2,600	2,500

Corporate Events

Roadshow with China Traditional Chinese Medicine (5 Apr, Shanghai)
Group Meeting with Yihai Int'l Holdings (5 Apr, Hong Kong)
Roadshow with Ann Joo Resources (5 Apr, Singapore)
Roadshow with Sihuan Pharmaceutical Holdings (7 Apr, Shanghai; 12 Apr, Taiwan)
Roadshow with Singamas Container (12 Apr, Shanghai)
Roadshow with BB Life Science Corp (10 Apr, Hong Kong)
Luncheon with Dynagreen Environmental Protection Group (11 Apr, Hong Kong)
Plant Visit with Hume Industries (11 Apr, Perak)
Roadshow with Universal Medical Financial and Technology (12 Apr, Hong Kong)
Group Luncheon with U-Mobile (19 Apr, Kuala Lumpur)
Group Luncheon with Singamas Container Holdings (20 Apr, Hong Kong)
Roadshow with Singtel (26 May, Canada)
Roadshow with PT Siloam Int'l Hospital (5 Jun, Canada)
Luncheon with United Overseas Bank (3 Jul, Singapore)
Roadshow with Top Glove Corporation (5 Sep, US/Canada)

Company Highlights: Beijing Enterprises Water Group (371 HK)

2016 Performance

Net profit increased by 31% yoy to HK$3,227m.
Recurring earnings increased by 42% yoy after excluding VAT and RMB depreciation.
Revenue increased by 28.5% yoy, but slower than net profit growth.
Gross margin declined 3.5ppt to 33% due to VAT recognition changes.

Stock Impact

Sustainable capacity expansion: added 3.7m tonnes of daily designed capacity in 2016, total capacity reached 27.2m tons.
Management guided for 3m tons of daily treatment capacity in 2017, representing 11% growth.
Expected to achieve 40m tons of daily treatment capacity by 2018.
Focus on quality over quantity in 2017.

PPP Projects

Secured Rmb42b in PPP contracts in 2016.
Management expects continued growth in PPP projects, aided by cooperation with funding companies.
Aims to achieve an asset-light model through these projects.

Earnings and Dividends

2017 guidance: 30% yoy earnings growth, driven by construction services.
Final dividend of HK$0.119/share, payout ratio of 32%.

Valuation and Recommendation

Maintain BUY rating.
Target price: HK$7.60, based on 11.8x 2017F P/B.
Expectations of a breakthrough in PPP projects leading to explosive earnings growth.

Company Highlights: China Construction Bank (939 HK)

2016 Performance

Net profit of Rmb231.5b, in line with expectations.
NPL ratio improved by 4bp qoq to 1.52%.
Loans overdue for 90 days or more reduced by 19.3% hoh.
NIM declined 10bp qoq to 2.04%.
Operating expenses declined 12.3% yoy.

Stock Impact

Forecast for 8.7% loan growth in 2017.
Focus on corporate loans, especially for infrastructure, hi-tech, and SMEs.
Expectation of continued growth in fee income, driven by retail and corporate segments.

Valuation and Recommendation

Maintain BUY rating.
Target price: HK$7.28, based on 1.18x 2017F P/B.
Expectation of continued ROE and CET-1 CAR above industry levels.

Summary of Key Points

Beijing Enterprises Water Group showed strong net profit growth in 2016, with a focus on capacity expansion and PPP projects.
China Construction Bank improved asset quality, with a significant drop in overdue loans and a stable NIM.
Thai Beverage is viewed as a growing entity with potential for core business expansion.
Yinson Holdings exceeded estimates in FY17, with expectations for growth in 2018.
RHBank was downgraded to SELL due to poor loan loss coverage.
Key Indices showed mixed performance, with China and Hong Kong experiencing positive YTD growth.
Top Picks include several BUY-rated stocks with potential upside, while a few are SELL-rated due to underperformance or risk factors.
Corporate events are planned for the upcoming months, including roadshows and meetings with various companies.