20170314-大华继显-Regional_Morning_Notes_19页_1mb

报告摘要

Regional Morning Notes Summary - 14 March 2017

Core Content Overview

This document provides an analysis of stock performance and market outlook for various regions and companies, with a focus on China and Hong Kong. It includes updates on key companies, market indices, corporate events, and valuation metrics.

China: Beijing Capital International Airport (694 HK)

Company Update

Performance: Surprised with a strong 7.6% throughput growth in Jan-Feb 2017.
Traffic Growth: Domestic throughput rose by 7.5%, while international throughput grew by 4.4%.
Aircraft Movements: Domestic increased by 0.5%, international by 1.2%, and total by 1.7%.
Earnings Expectations: Net profit expected to rise by 10% in 2016 and 16% in 2017.
Upcoming Results: BCIA is set to report full-year results on 22 March 2017, with a consensus net profit of Rmb1.8b.

Key Financials (Rmbm)

Metric	2014	2015	2016F	2017F	2018F
Net turnover	7,557	8,387	8,654	8,919	9,113
EBITDA	3,839	4,378	4,612	4,775	4,849
Operating profit	2,385	2,784	3,008	3,169	3,242
Net profit (rep./act.)	1,391	1,642	1,808	2,090	2,275
EPS (Fen)	32.1	37.9	41.7	48.2	52.5
PE (x)	25.1	21.3	19.3	16.7	15.4
P/B (x)	2.0	1.9	1.8	1.7	1.6
EV/EBITDA (x)	10.4	9.1	8.7	8.4	8.2
Dividend yield (%)	1.6	1.9	2.1	2.4	2.6
Net margin (%)	18.4	19.6	20.9	23.4	25.0

Valuation & Recommendation

Current Price: HK$9.07
Target Price: HK$10.20
Upside: +12.5%
Recommendation: Maintain BUY
Reasoning: BCIA is undervalued on a PE basis relative to peers, with strong cash flow and a potential for earnings growth. It is considered a safe-haven play in a weak earnings environment.

Hong Kong: IGG Inc (799 HK)

Company Update

2H16 Results Preview: Strong R&D capabilities proven by the new game Lords Mobile.
Dividend Expectations: Special dividend is expected to be maintained with a yield of about 4% in 2017.
Revenue Growth: Expected to grow by 64% in 2016 and 43% in 2017, driven by Lords Mobile.

Key Financials (US$m)

Metric	2014	2015	2016F	2017F	2018F
Net turnover	205	203	333	477	548
EBITDA	71	54	79	119	124
Operating profit	69	50	73	110	116
Net profit (rep./act.)	66	41	68	103	108
EPS (US$ cent)	4.6	2.9	4.8	7.3	7.7
PE (x)	19.6	31.3	18.8	12.4	11.7
P/B (x)	6.6	6.6	5.6	4.2	3.3
EV/EBITDA (x)	13.1	17.2	11.8	7.8	7.5
Dividend yield (%)	1.0	2.9	3.0	2.1	2.3
Net margin (%)	32.4	20.5	20.3	21.6	19.8

Valuation & Recommendation

Current Price: HK$7.04
Target Price: HK$8.20
Upside: +16.5%
Recommendation: Maintain BUY
Reasoning: IGG is undervalued on a PE basis and has a strong balance sheet, enabling potential dividend payouts and M&A activity. It is also a beneficiary of the Shenzhen-Hong Kong Stock Connect.

Key Indices (as of 14 March 2017)

Index	Prev Close	1D %	1W %	1M %	YTD %
DJIA	20881.5	(0.1)	(0.3)	1.8	5.7
S&P 500	2373.5	0.0	(0.1)	1.5	6.0
FTSE 100	7367.1	0.3	0.2	1.4	3.1
AS30	5794.6	(0.3)	0.1	(0.3)	1.3
CSI 300	3458.1	0.9	0.3	0.6	4.5
FSSTI	3147.2	0.4	0.8	2.4	9.2
HSCEI	10258.7	1.9	0.9	0.0	9.2
HSI	23829.7	1.1	1.0	0.5	8.3
JCI	5409.4	0.3	(0.0)	0.5	2.1
KLCI	1721.9	0.3	(0.3)	0.8	4.9
KOSPI	2117.6	1.0	1.7	2.1	4.5
Nikkei 225	19633.8	0.1	1.3	2.1	2.7
SET	1535.5	(0.3)	(1.2)	(2.3)	(0.5)
TWSE	9697.3	0.7	0.2	(0.2)	4.8
BDI	1099	1.2	12.3	59.7	14.4
CPO (RM/mt)	2946	(1.5)	(1.0)	(12.0)	(7.9)
Brent Crude (US$/bbl)	51	(0.0)	(8.3)	(7.6)	(9.6)

Top Picks (BUY)

Company	Ticker	Current Price	Target Price	Potential Upside (%)
Ping An Insurance	2318 HK	HK$41.75	HK$47.00	12.6
Bank Negara Indonesia	BBNI IJ	HK$6,350.00	HK$7,100.00	11.8
Indosat	ISAT IJ	HK$7,000.00	HK$8,015.00	14.5
Tiga Pilar	AISI IJ	HK$2,200.00	HK$2,550.00	15.9
Inari Amertron	INRI MK	MK$1.94	MK$2.15	10.8
V.S. Industries	VSI MK	MK$1.72	MK$2.00	16.3
OCBC	OCBC SP	SP$9.61	SP$10.75	11.9
Venture Corp	VMS SP	SP$11.15	SP$12.40	11.2
Bangkok Dusit	BDMS TB	TB$20.10	TB$27.00	34.3
Siam Cement	SCC TB	TB$534.00	TB$600.00	12.4

Key Assumptions

Metric	2015	2016F	2017F
GDP (% yoy)	2.6	1.7	2.7
US	2.6	1.7	2.7
Euro Zone	2.0	1.6	1.1
Japan	1.2	0.8	0.9
Singapore	2.0	1.4	1.8
Malaysia	5.0	4.2	4.5
Thailand	2.8	3.2	3.3
Indonesia	4.8	5.0	5.2
Hong Kong	2.4	2.1	1.8
China*	6.9	6.7*	6.3
Brent (Average)	45	56	61
CPO	2,653	2,600	2,500

Corporate Events

Event	Venue	Date
Luncheon with China Gas Holdings	Hong Kong	15 Mar
Luncheon with Chin Hin Group	Malaysia	15 Mar
Luncheon with Ten Pao Group Holdings	Hong Kong	21 Mar
Roadshow with Globetronics Technology	Singapore	23 Mar
Roadshow with China Display Optoelectronics Technology	Hong Kong	23 Mar
Roadshow with China TCM	Hong Kong	23 Mar
Roadshow with Meidong Auto	Hong Kong	24 Mar
Roadshow with TCM	Shanghai	5 Apr
Roadshow with Singtel	Canada	26 May

Main Points and Key Insights

Beijing Capital International Airport (BCIA):
- Strong traffic growth in Jan-Feb 2017, with domestic and international performance exceeding expectations.
- Undervalued compared to peers, with a target price of HK$10.20.
- Earnings growth is expected to be 10% in 2016 and 16% in 2017.
- Strong cash flow and low risk profile make it a safe-haven play.
IGG Inc (799 HK):
- Proven R&D capabilities with the success of Lords Mobile.
- Strong balance sheet allows for potential dividends and M&A.
- Expected revenue growth of 64% in 2016 and 43% in 2017.
- Target price of HK$8.20, with an upside of +16.5%.
Regional Outlook:
- China's GDP growth is expected to remain stable at 6.3% in 2017.
- Indonesia and Malaysia are expected to see continued earnings growth.
- Thailand's property sector is expected to improve in 2017 due to the launch of postponed projects.
- Singapore's banking sector saw an unexpected boost from real estate.
- Malaysia's steel subsector is expected to deliver strong earnings in 2017.
Market Indices:
- The S&P 500 and FTSE 100 have shown positive performance, while the SET and TWSE have seen some decline.
- The CSI 300 and HSI have had strong YTD growth.
Valuation Highlights:
- BCIA trades at 17x 2017F PE, a 31% discount to peer valuations.
- IGG is undervalued on a PE basis and has a strong dividend yield potential.

Conclusion

The report highlights strong performance in key sectors such as airports and mobile gaming, with BCIA and IGG being top picks due to their earnings growth potential and undervaluation. It also outlines corporate events, key financials, and market indices to provide a comprehensive view of the regional market landscape.

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