20170411-大华继显-Regional_Morning_Notes_19页_1001kb
报告摘要
Regional Morning Notes Summary - 11 April 2017
Core Content Overview
This document provides a comprehensive summary of regional market insights, focusing on Malaysia, China, Indonesia, and Thailand. It includes company updates, economic policy analysis, key indices, and valuation data for selected stocks. The analysis also covers potential impacts of geopolitical and trade-related risks on specific industries and companies.
Key Stories
Malaysia
- Globetronics Technology (GTB MK/BUY/RM5.29/Target: RM6.08): Expected to report strong recovery in 2017 and record-high earnings in 2018-19 due to new sensor products. The yield is attractive at 6.1%.
- Plantation Sector: Malaysia's palm oil inventory increased slightly to 1.55m tonnes in March 2017 due to higher production and imports, despite strong exports. Plantation companies are likely to report weaker quarter-on-quarter results but stronger year-on-year performance for 1Q17.
China
- Economic Policy: A positive and fruitful summit between Chinese and US Presidents is expected to ease trade tensions. A new mechanism of Comprehensive Dialogue is established, which includes diplomatic, economic, law enforcement, and social dialogues.
- Geopolitical Risk: Tensions in Northeast Asia are rising as the US escalates operations against North Korea, while China is seen as a potential partner in diplomatic efforts.
Indonesia
- AKR Corporindo (AKRA IJ/BUY/Rp6,350/Target:Rp7,400): Brighter outlook for the oil distribution business in 2017, with 27.5% year-on-year EPS growth expected. Key drivers include increased petroleum sales volume, land sales from Surabaya industrial estate, and improved gross margins.
Thailand
- Siam Cement (SCC TB/BUY/Bt550.00/Target: Bt600.00): Share price supported by the gradual commencement of mega infrastructure projects.
Key Indices
| Index | Previous Close | 1D % | 1W % | 1M % | YTD % |
|---|---|---|---|---|---|
| DJIA | 20658.0 | 0.0 | 0.0 | -1.2 | 4.5 |
| S&P 500 | 2357.2 | 0.1 | -0.1 | -0.7 | 5.3 |
| FTSE 100 | 7348.9 | -0.0 | 0.9 | 0.1 | 2.9 |
| AS30 | 5948.9 | 0.8 | 0.7 | 2.4 | 4.0 |
| CSI 300 | 3505.6 | -0.3 | 2.0 | 2.3 | 5.9 |
| FSSTI | 3181.5 | 0.1 | -0.2 | 1.5 | 10.4 |
| HSI | 24262.2 | -0.0 | 0.6 | 2.9 | 10.3 |
| KLCI | 1739.5 | -0.1 | -0.3 | 1.3 | 6.0 |
| KOSPI | 2133.3 | -0.9 | -1.6 | 1.7 | 5.3 |
| Nikkei 225 | 18797.9 | 0.7 | -1.0 | -4.1 | -1.7 |
| BDI | 1231 | 0.7 | -4.0 | 13.4 | 28.1 |
| CPO (RM/ml) | 2877 | -1.3 | 1.7 | -3.6 | -10.1 |
| Brent Crude | 56 | 1.3 | 5.4 | 9.0 | -1.5 |
Top Picks
Buy Recommendations
- Alibaba (BABA US): Target price of $130.00, potential upside of 16.4%
- Beijing Ent. Water (371 HK): Target price of HK$7.60, potential upside of 20.4%
- Indosat (ISAT IJ): Target price of Rp7,900, potential upside of 10.5%
- Tiga Pilar (AISA IJ): Target price of Rp2,550, potential upside of 15.9%
- V.S. Industry (VSI MK): Target price of RM2.20, potential upside of 14.6%
- OCBC (OCBC SP): Target price of S$10.75, potential upside of 11.4%
- Venture Corp (VMS SP): Target price of S$12.40, potential upside of 7.5%
- Siam Cement (SCC TB): Target price of Bt27.00, potential upside of 9.1%
Sell Recommendations
- Great Wall Motor (2333 HK): Potential downside of 33.1%
- MGM China (2282 HK): Potential downside of 25.5%
- Hartalega (HART MK): Potential downside of 25.9%
Key Assumptions
| Metric | 2016 | 2017F | 2018F |
|---|---|---|---|
| GDP (yoy) | 6.7 | 6.3 | 6.3 |
| Brent (US$/bbl) | 45 | 55 | 60 |
| CPO (RM/mt) | 2,653 | 2,600 | 2,500 |
Corporate Events
| Event | Venue | Date |
|---|---|---|
| Luncheon with Dynagreen Environmental Protection Group | Hong Kong | 11 Apr |
| Plant Visit with Hume Industries | Perak | 11 Apr |
| Roadshow with Universal Medical Financial and Technology | Hong Kong | 12 Apr |
| Roadshow with Singamas Container | Shanghai | 12 Apr |
| Roadshow with Siluan Pharmaceutical Holdings | Taiwan | 12 Apr |
| Analyst Presentation on China Economics | Taiwan | 17 Apr |
| Group Luncheon with U-Mobile | Kuala Lumpur | 19 Apr |
| Group Luncheon with Singamas Container Holdings | Hong Kong | 20 Apr |
| Analyst Presentation on Malaysia Outlook and Strategy | Singapore | 20 Apr |
| Roadshow with China Display Optoelectronics Technology Holdings | Taipei | 21 Apr |
| Group Luncheon with ZTE Corp | Hong Kong | 25 Apr |
| Group Luncheon with CAT Telecom | Thailand | 28 Apr |
| Roadshow with Singtel | Canada | 26 May |
| Roadshow with PT Siloam Int'l Hospital | Canada | 5 Jun |
| Luncheon with United Overseas Bank | Singapore | 3 Jul |
| Roadshow with Top Glove Corporation | US/Canada | 5 Sep |
Company Update: AKR Corporindo (AKRA IJ)
- Stock Performance: Current price at Rp6,350, target price at Rp7,400, with an upside of +16.5%.
- Business Outlook: Brighter outlook for 2017 due to improved petroleum sales volume, land sales, and chemicals distribution.
- Key Drivers:
- 15% year-on-year increase in petroleum sales volume.
- US$6m from land sales in the East Java industrial estate.
- 15% growth in chemicals distribution.
- Expected 15% increase in Brent oil prices to US$52/bbl in 2017.
- Financial Highlights:
- 2017F net profit: Rp1.3t (up 27.5% yoy).
- Revenue expected to reach Rp19.9t in 2017.
- Gross margin to improve slightly to 12.4%.
- Net margin to remain stable at 6.6%.
Valuation & Risk
- Valuation Metrics:
- 2017F PE: 25.5x (current), target PE: 23.0x.
- 2017F P/B: 3.3x.
- 2017F EV/EBITDA: 15.1x.
- Key Financials:
- Net turnover: Expected to grow by 30.8% in 2017.
- EBITDA margin: Expected to increase to 9.6%.
- Net profit growth: 27.5% yoy in 2017.
- Leverage Metrics:
- Debt to equity: Expected to decrease from 59.1% to 38.3%.
- Net debt/(cash) to equity: Expected to decrease from 39.0% to 28.8%.
- Interest cover: Expected to drop to 19.8x.
Impact of 20% Border Tax
| Company | Impact on 2017 Earnings | Comments |
|---|---|---|
| Nexteer (1316 HK) | 2% | 20% of revenue from US, 10% cut in ASP |
| ZTE (763 HK) | 5% | 7% revenue from US, 10% cut in ASP |
| AAC (2018 HK) | 3% | 20-25% revenue from Apple |
| Sunny Optical (2382 HK) | 0% | Only 3.5% revenue from US market |
Analyst Insights
- Chaoping Zhu (China) and Yasmin Soulisa (Indonesia) are the key analysts.
- The US-China Comprehensive Dialogue is a new framework aimed at improving trade and geopolitical relations.
- China's potential concessions in trade and market openness are expected to reduce US trade tensions.
- Geopolitical risks in Northeast Asia are rising, especially with US actions against North Korea.
- The border tax could impact companies with significant US exposure, such as Li & Fung and Regina Miracle.
Summary of Key Points
- Trade Tensions: Expected to ease due to the US-China summit, but geopolitical risks are rising.
- AKR Corporindo: Strong outlook for 2017 with higher target price and potential upside.
- Globetronics Technology: Strong recovery expected in 2017, with record earnings in 2018-19.
- Siam Cement: Share price supported by infrastructure projects.
- Valuation: Key metrics show improvement in profitability and leverage.
- Border Tax Impact: Companies with significant US exposure could face earnings pressure.
Conclusion
The document highlights positive market outlooks for several companies and sectors, particularly in Malaysia and Indonesia. It also discusses the evolving trade and geopolitical landscape between China and the US, emphasizing the importance of the Comprehensive Dialogue. The analysis provides detailed financial forecasts, valuation metrics, and potential impacts of external factors like the border tax. Overall, the report maintains a BUY rating for AKR Corporindo and other selected companies, with clear upside potential.
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