20170731-大华继显-Regional_Morning_Notes_31页_2mb

报告摘要

Regional Morning Notes Summary

Core Content

This document provides a comprehensive overview of the regional financial market, focusing on China, Indonesia, Malaysia, Singapore, and Thailand. It includes updates on specific companies, sector performance, key indices, corporate events, and analyst recommendations.

Main Points

China - Healthcare Sector

1H17 Results Preview: The healthcare sector is facing challenges due to policy impacts, such as the two-invoice policy and drug tenders. Investors are advised to seek companies with strong growth certainty.
Top Picks: CSPC (1093 HK), Microport (853 HK), and Luye (2186 HK) are recommended with BUY ratings, while Sinopharm (1099 HK) and Sino Biopharm (1177 HK) are downgraded to SELL.
Key Financials:
- CSPC is expected to have a 33.3% net profit growth in 2017, outperforming market expectations.
- Microport is projected to triple its net profit in 2017, driven by strong growth in its Firehawk stent.
- Luye Pharma is undervalued with a 11.2x 2017F PE, and the market is overly concerned about its inclusion in the provincial reimbursement drug list.
Company Update - Sihuan Pharmaceutical (460 HK):
- Downgraded to HOLD due to disappointing hospital end sales data.
- The company faces challenges from the two-invoice policy and adjuvant drug list.
- Its new cosmetic surgery business and Roxatidine are still in early stages and cannot offset the decline in cardiovascular sales.
- Target price is HK$3.07, with an upside of -8.1%.

Indonesia - Bank Central Asia (BBCA IJ)

2Q17 Results: Earnings are in line with expectations, but the share price has appreciated 21% year-to-date.
Recommendation: Maintain HOLD.

Malaysia - YTL Power International (YTLP MK)

Update: Despite a dim near-term dividend outlook, the company is recommended as BUY due to two new projects expected to increase 5-year earnings by 65%.

Singapore - REITs

2QFY17 Results: CDREIT and FLT results exceeded expectations.
Key Indices: The FTSE 100 and HSCEI have shown positive year-to-date growth, while the Nikkei 225 and KOSPI have seen declines.

Thailand - Advanced Info Service (ADVANC TB)

2Q17 Results: In line with estimates, and earnings are expected to have bottomed out in 2Q17.
PTT Exploration & Production (PTTEP TB): Disappointing earnings, and the report suggests focusing on downstream plays like IRPC, PTTGC, and TOP.

Key Indices

Index	Previous Close	1D %	1W %	1M %	YTD %
DJIA	21830.3	0.2	1.2	2.3	10.5
S&P 500	2472.1	-0.1	-0.0	2.0	10.4
FTSE 100	7368.4	-1.0	-1.1	0.8	3.2
AS30	5755.2	-1.3	-0.3	-0.2	0.6
CSI 300	3721.9	0.3	-0.2	1.5	12.4
FSSTI	3330.8	-0.7	0.5	3.2	15.6
HSCEI	10756.1	-0.9	-0.3	3.8	14.5
HSI	26979.4	-0.6	1.0	4.7	22.6
JCI	5831.0	0.2	1.1	0.0	10.1
KLCI	1767.1	-0.2	0.5	0.2	7.6
KOSPI	2401.0	-1.7	-2.0	0.4	18.5
Nikkei 225	19959.8	-0.6	-0.7	-0.4	4.4
SET	1581.1	-0.1	0.4	-0.1	2.5
TWSE	10423.1	-0.8	-0.1	0.3	12.6
BDI	933	-1.0	-4.5	3.6	-2.9
CPO (RM/ml)	2666	1.8	2.7	1.8	-16.7
Brent Crude (US$/bbl)	53	0.4	8.5	10.0	-7.2

Top Picks

BUY

Alibaba (BABA US)
Beijing Ent. Water (371 HK)
Ace Hardware (ACES IJ)
Waskita Karya (WSKT IJ)
V.S. Industrv (VSI MK)
OCBC (OCBC SP)

SELL

Great Wall Motor (2333 HK)
Hartalega (HART MK)

Key Assumptions

Region	GDP (% yoy) 2016	GDP (% yoy) 2017F	GDP (% yoy) 2018F
US	1.6	2.5	2.5
Euro Zone	1.7	1.8	1.6
Japan	1.0	0.9	1.2
Singapore	2.0	2.4	2.5
Malaysia	4.2	5.0	4.9
Thailand	3.2	3.3	3.3
Indonesia	5.0	5.2	5.5
Hong Kong	1.9	2.0	2.0
China	6.7	6.6	6.3
Brent	(US$/bbl)	45	55
CPO	(RM/mt)	2,653	2,600

Corporate Events

Roadshow with Tonly Electronics Hldgs: Hong Kong, 1 Aug
Visit to Sarawak Corridor of Renewable Energy: Sarawak, 1-3 Aug
Luncheon with Plover Bay Technologies: Hong Kong, 3 Aug
Luncheon with Singapore Post: Singapore, 4 Aug
Analyst Marketing on Chinese and Singapore Banking: Brunei, 14 Aug
Analyst Marketing on Singapore Small & Mid Caps: Malaysia, 14-15 Aug
Analyst Presentation on Malaysia Technology Sector: Taipei, 22 Aug
Roadshow with China TCM Hldgs: Hong Kong, 24 Aug; Shanghai, 28 Aug
Roadshow with Globetronics Technology: Taipei, 24-25 Aug
Roadshow with Top Glove Corporation: US/Canada, 5-12 Sep
Analyst Presentation on Singapore Technologies Engineering: Canada, 9-11 Oct
Asian Gems Conference 2017: Singapore, 10-11 Oct

Company Update - Sihuan Pharmaceutical (460 HK)

1H17 Results: Disappointing hospital end sales data, leading to a downgrade to HOLD.
Sales Growth: Deceleration in sales growth of key drugs since 4Q16 due to policy impacts.
Target Price: HK$3.07 (downgraded from HK$3.50).
Entry Price: HK$2.55.
Upside: -8.1%.
Potential Catalysts: Expansion into lower-tier cities and potential sales boost from Roxatidine replacing proton pump inhibitors.

Summary of Key Financials

Metric	2017F	2018F	2019F
Net Profit (adj.)	1,841.1	2,025.1	2,274.7
EPS (Fen)	19.4	21.6	24.4
PE (x)	14.8	13.3	11.8
P/B (x)	2.2	1.9	1.7
EV/EBITDA (x)	10.1	9.5	8.7
Net Margin (%)	56.4	58.4	60.1
Net Debt/Cash to Equity (%)	-30.8	-36.5	-40.8
ROE (%)	15.9	15.3	15.1

Analyst Recommendations

Alex Jiang: Lead analyst with contact details provided.
Recommendations:
- BUY for CSPC (1093 HK), Microport (853 HK), and others.
- SELL for Sino Biopharm (1177 HK) and others.
- HOLD for Sihuan Pharmaceutical (460 HK) and others.

Conclusion

The document emphasizes the importance of selecting companies with strong growth certainty amid ongoing policy impacts. It highlights the performance of key sectors and companies across different regions and provides insights into potential catalysts and risks for each. The recommendations and financial data are crucial for investors looking to navigate the current market landscape.

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