20170814-大华继显-Regional_Morning_Notes_31页_1mb

报告摘要

Regional Morning Notes Summary

Core Content Overview

This document provides a detailed analysis of financial market updates and sector performance across several Asian regions, focusing on China, Indonesia, Malaysia, and Singapore. It includes insights on stock performance, corporate events, and key sector trends such as automotive, coal, and healthcare.

Main Points and Key Information

China: Automobile Sector

1H17 Results Preview: Auto companies are expected to meet market expectations, with Brilliance and Geely likely to report better-than-expected profits due to strong margins, while BAIC and GAC may disappoint due to lower-than-expected margins from price cuts.
Top Picks: Brilliance (1114 HK) and Geely (175 HK) are recommended with a BUY rating. GWM (2333 HK) is SELL due to expected earnings decline.
Key Drivers: Brilliance's sales are growing faster than expected, driven by both existing and new BMW models, and improved pricing. Geely's sales volume is expected to grow by 89% yoy, with net profit growth of 120% yoy to Rmb4.2b.
Risks: Macro risks such as a hard-landing scenario and credit tightening could hurt auto sales.
Peer Comparison: Brilliance and Geely are highlighted with strong price-to-earnings (PE) and price-to-book (P/B) ratios, while BAIC and GAC are underperforming in terms of profit expectations.

China: Coal Sector

Thermal Coal: Prices are expected to stabilize due to increased supply, though a slight decline is anticipated. Price drops will be limited due to safety checks and occasional production disruptions.
Coking Coal: Prices remain strong due to low inventory and robust demand, especially in the steel sector. Mine-mouth prices are expected to rise further due to producers' optimism.
Market Impact: Coal stocks experienced a sharp decline due to policy concerns. Shenhua, China Coal, and Yanzhou Coal were among the hardest hit.
Supply and Demand Indicators: Thermal coal prices fell slightly, while coking coal prices rose. Inventory levels at key ports and IPPs are fluctuating, with demand expected to peak in July and decline in August.
Import Trends: Coal imports hit a 5-month low in July due to government restrictions on low-quality coal, but year-to-date (YTD) imports are up 18.2%.

China: Healthcare Sector

Henan Province: The execution of the 2017 New Reimbursement Drug List (NRDL) is set to begin earlier than expected on 17 September 2017, which could accelerate sales for newly-added drugs.
Key Beneficiaries: Companies like CSPC (1093 HK) and 3Sbio (1530 HK) are expected to benefit significantly from the NRDL rollout.
New Drug Inclusions:
- CSPC: NBP injections and Jinyouli are included in the NRDL. NBP is expected to surpass adjuvant drugs in market share with peak sales reaching Rmb5.0b.
- 3Sbio: Yisaipu and TPO are included. Yisaipu is expected to have peak sales of Rmb4.0b, while TPO could reach Rmb3.0b.
Sector Outlook: Maintain OVERWEIGHT on the healthcare sector due to the positive impact of the NRDL.

Indonesia: Results Summary

Sumber Alfaria Trijaya (AMRT IJ): Net profit declined by 16.4% yoy. Downgraded to HOLD with a lower target price of Rp635. Re-entry price is Rp570.

Malaysia: Building Materials Sector

Steel Prices: Steel prices rebounded in July 2017 in line with China's steel price surge. Expect strong earnings growth in 3Q17.
Sector Rating: Maintain MARKET WEIGHT.

Singapore: Results Summary

City Developments (CIT SP): 2Q17 results were below expectations, but a better second half is anticipated.
ComfortDelGro (CD SP): 1H17 results were in-line, with weakness in the taxi segment offset by lower minority interest and taxes.
ST Engineering (STE SP): In transition phase; troubles at the marine division are likely to have peaked.

Key Indices Overview

Index	Prev Close	1D %	1W %	1M %	YTD %
DJIA	21858.3	0.1	-1.1	1.0	10.6
S&P 500	2441.3	0.1	-1.4	-0.7	9.0
FTSE 100	7310.0	-1.1	-2.7	-0.9	2.3
AS30	5743.5	-1.2	-0.5	-1.1	0.4
CSI 300	3647.4	-1.8	-1.6	-1.5	10.2
FSSTI	3279.7	-1.3	-1.9	-0.2	13.8
HSCEI	10573.0	-1.9	-3.9	-1.4	12.5
HSI	26883.5	-2.0	-2.5	1.9	22.2
JCI	5766.1	-1.0	-0.2	-1.1	8.9
KLCI	1767.0	-0.6	-0.4	0.7	7.6
KOSPI	2319.7	-1.7	-3.2	-3.9	14.5
Nikkei 225	19729.7	-0.0	-1.5	-2.3	3.2
SET	1561.3	-0.7	-1.1	-1.0	1.2
TWSE	10329.6	-0.0	-1.7	-1.1	11.6
BDI	1138	4.2	9.8	26.4	18.4
CPO	2633	0.6	1.4	-1.2	-17.7
Brent Crude	52	-0.2	-0.7	6.3	-8.5

Top Picks

Company	Ticker	Current Price	Target Price	Pot. +/- (%)
Alibaba	BABA US	151.70	173.00	14.0
Beijing Ent. Water	371 HK	6.24	7.60	21.8
Ace Hardware	ACES IJ	1,065.00	1,300.00	22.1
Waskita Karya	WSKT IJ	2,340.00	3,350.00	43.2
Ekovest	EKO MK	1.08	1.55	43.5
OCBC	OCBC SP	11.20	13.38	19.5
Siam Cement	SCC TB	484.00	600.00	24.0

Corporate Events

Analyst Marketing: Events in Brunei, Malaysia, and Singapore (14–15 Aug).
Roadshows: With Star Petroleum Refining, Logan Property Holdings, and others (5–28 Sep).
Analyst Presentation: On Malaysia Technology Sector (22–23 Aug).

Key Assumptions

Country/Region	2016 GDP (%)	2017F GDP (%)	2018F GDP (%)
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 (Average)	45	55	58
CPO	2,653	2,600	2,400

Analyst Contact

Ken Lee: +852 2236 6760 | ken.lee@uobkayhian.com.hk
Sophie Yu: +852 2236 6392 | sophie.yue@uobkayhian.com.hk
Sandra Huang: +8621 5404 7225 ext.804 | sandrahuang@uobkayhian.com

Conclusion

The document highlights the performance and outlook of key sectors and stocks across China, Indonesia, Malaysia, and Singapore. It provides detailed forecasts, market sentiments, and recommendations, emphasizing the potential for growth in the automobile and healthcare sectors, while cautioning against risks in the coal sector due to policy and market conditions.

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