Regional Morning Notes Summary
Core Content
This document provides a comprehensive overview of market updates, company performance, and investment recommendations for various markets and firms on 12 February 2015. It includes key financial metrics, stock price analysis, and strategic developments for selected companies across Hong Kong, China, Indonesia, Malaysia, Singapore, and Thailand.
Key Stories
Hong Kong
- Dalian Wanda Commercial Properties (3699 HK): Initiated coverage with a BUY recommendation. Target price: HK$57.15. The company is noted for its turnaround strategy, asset-light model, and strong brand presence in China.
- Brilliance Auto (1114 HK): Maintained a BUY recommendation. Target price: HK$17.50. January 2015 sales increased by 24% year-on-year, driven by strong performance in the 5-series and X1 models.
China
- Brilliance Auto: January 2015 sales reached 29,792 units, surpassing the 15% growth forecast. Sales growth was attributed to dealer restocking before the Chinese New Year and the company's ability to manage its margin despite dealer rebate issues.
Indonesia
- Wijaya Karya Beton (WTON IJ): Strategy update highlights alignment with infrastructure growth.
Malaysia
- Tropicana Corp (TRCB MK): 2014 earnings were boosted by higher progress billings, but the stock was rated HOLD.
- Tenaga Nasional (TNB MK): An Update indicates a 5.8% tariff reduction for Mar-Jun 15, with neutral earnings impact.
Singapore
- ComfortDelGro Corporation (CD SP): Downgraded to HOLD due to stretched valuations after a recent price rally.
- Oversea-Chinese Banking Corp (OCBC SP): Update mentions revenue synergies and cost efficiency initiatives in 4Q14.
Thailand
- Thaicom (THCOM TB): 4Q14 results exceeded consensus estimates.
- Banpu (BANPU TB): Expected poor 4Q15 results are already priced in, with Hong Sa startup as a key focus.
- Bumrungrad Hospital (BH TB): Expected strong 4Q14 and 2015 results, but these are already reflected in the stock price.
- MCOT (MCOT TB): Downgraded to SELL due to potential earnings decline in 4Q14.
- Somboon Advance Technology (SAT TB): Upgraded to BUY as the "last man standing".
Key Indices
| Index |
Prev Close |
1D % |
1W % |
1M % |
YTD % |
| DJIA |
17862.1 |
(0.0) |
1.1 |
0.7 |
0.2 |
| S&P 500 |
2068.5 |
(0.0) |
1.3 |
1.2 |
0.5 |
| FTSE 100 |
6818.2 |
(0.2) |
(0.6) |
4.9 |
3.8 |
| AS30 |
5731.7 |
(0.4) |
(0.0) |
6.2 |
6.4 |
| CSI 300 |
3434.1 |
0.8 |
1.0 |
(2.3) |
(2.8) |
| FSSTI |
3444.6 |
0.3 |
0.8 |
3.0 |
2.4 |
| HSCEI |
11651.0 |
(0.4) |
(1.0) |
(3.0) |
(2.8) |
| HSI |
24315.0 |
(0.9) |
(1.5) |
1.2 |
3.0 |
| JCI |
5336.5 |
0.3 |
0.4 |
2.9 |
2.1 |
| KLCI |
1799.0 |
(0.7) |
(0.2) |
3.7 |
2.1 |
| KOSPI |
1945.7 |
0.5 |
(0.9) |
1.3 |
1.6 |
| Nikkei 225 |
17652.7 |
(0.3) |
1.8 |
2.6 |
1.2 |
| SET |
1605.1 |
0.6 |
0.3 |
4.8 |
7.2 |
| TWSE |
9462.2 |
0.7 |
(0.5) |
3.1 |
1.7 |
| BDI |
553 |
(0.5) |
(2.8) |
(22.0) |
(29.3) |
| CPO (RM/mt) |
2306 |
(0.6) |
8.5 |
(1.5) |
0.4 |
| Nymex Crude (US$/bbl) |
49 |
(2.4) |
0.8 |
1.0 |
(8.3) |
Top Picks (BUY)
| Company |
Ticker |
Current Price (Icy) |
Target Price (Icy) |
Upside (%) |
| Sunac China |
1918 HK |
6.85 |
9.29 |
35.6 |
| ICBC |
1398 HK |
5.51 |
6.90 |
25.2 |
| Bank Mandiri |
BMRI IJ |
11,750.00 |
12,500.00 |
6.4 |
| Ijm Corp |
IJM MK |
7.00 |
7.60 |
8.6 |
| DBS |
DBS SP |
19.51 |
23.55 |
20.7 |
| Pacific Radiance |
PACRA SP |
0.74 |
1.00 |
35.1 |
| Krung Thai Bank |
KTB TB |
23.10 |
29.00 |
25.5 |
| Sino Thai Engr |
STEC TB |
25.25 |
30.25 |
19.8 |
Sell
| Company |
Ticker |
Current Price |
Target Price |
Upside (%) |
| MCOT |
MCOT TB |
Bt15.90 |
Bt11.60 |
(9.9) |
Key Assumptions
| Indicator |
2013 |
2014F |
2015F |
| GDP (% yoy) |
2.9 |
3.5 |
3.7 |
| Brent (US$/bbl) |
99.45 |
65 |
70 |
| CPO (US$/mt) |
722 |
765 |
788 |
| BDI |
1,101 |
1,300 |
1,400 |
Corporate Events
| Event |
Venue |
Begin |
Close |
| Oil & Gas / Shipping Market Outlook Luncheon Talk |
Kuala Lumpur |
12 Feb |
12 Feb |
| Singapore REITs Analyst Presentation |
Singapore |
16 Feb |
16 Feb |
| PTT Global Chemical Corporate Roadshow |
Kuala Lumpur |
23 Feb |
24 Feb |
| Plantation Outlook Seminar 2015 |
Kuala Lumpur |
2 Mar |
2 Mar |
| First Resources Luncheon |
Kuala Lumpur |
4 Mar |
4 Mar |
| CIFI Holdings Roadshow |
Singapore |
16 Mar |
16 Mar |
| ASEAN Conference |
Taipei |
17 Mar |
18 Mar |
Brilliance Auto (1114 HK)
Highlights
- January 2015 Sales: Up 24% yoy to 29,792 units, exceeding expectations.
- Sales Breakdown:
- 5-series: +36% yoy to 16,686 units
- X1: +26% yoy to 4,481 units
- 3-series: +5% yoy to 8,625 units
- Channel Inventory: Remained at a healthy level of 30-40 days, despite dealer rebate concerns.
- Margin: Maintained strong net margins, with 2014 net margin expected to beat 2013.
- Stock Impact: Strong sales data is expected to remove market concerns and trigger a re-rating.
- Valuation:
- Target price: HK$17.50
- Upside: +27.4%
- Key Financials:
- Net profit (2015F): Rmb5.68b
- EPS (2015F): 112.9 fen
- PE (2015F): 9.6x
- P/B (2015F): 2.4x
Dalian Wanda Commercial Properties (3699 HK)
Highlights
- Initiate Coverage: With a BUY recommendation and a target price of HK$57.15.
- Market Cap: HK$207,578.9m (US$26,770.2m).
- Business Model:
- Asset-light strategy: Collaborates with investors to manage Wanda Plaza.
- Unique landbanking approach: Strong relationships with local governments.
- Projects:
- 109 commercial projects across China.
- 61 cities with shopping centers or hotels in operation.
- 50 cities with projects under development or held for future development.
- 6 cities with Wanda Cities.
- Financials:
- 2015F Net turnover: Rmb132.148b
- 2015F EBITDA: Rmb62.225b
- 2015F Operating profit: Rmb62.225b
- 2015F Net profit: Rmb31.425b
- 2015F EPS: 438.3 fen
- 2015F PE: 8.4x
- 2015F P/B: 0.9x
- RNAV: HK$76.20/share, with a 25% discount applied to the target price.
- Risks:
- Weaker-than-expected property sales.
- Increasing land costs.
- Tightening commercial property measures.
- Weak tenant performance.
- Potential delays in project completion.
- Rising debt levels.
- Possible inclusion in the HKEx short selling list.
Conclusion
The document highlights positive performance and growth potential in several key sectors, with a focus on Brilliance Auto and Dalian Wanda Commercial Properties. It provides investment recommendations, financial forecasts, and key drivers for stock performance, including dividend payouts, MSCI index inclusion, and mortgage easing. The analysis also emphasizes strategic moves and market dynamics, offering insights into risk factors and valuation metrics for each company.
