20160427-大华继显-Regional_Morning_Notes_44页_2mb

Regional Morning Notes Summary

Core Content

This document provides a summary of financial results and market analysis for several companies in China, Indonesia, Malaysia, and Thailand, along with key indices and valuation information for the period ending on 27 April 2016. It includes insights into earnings performance, stock impact, corporate events, and financial metrics for each region.

Main Points by Region

China

• Bank of China (3988 HK)
  • 1Q16 Results: Earnings slightly above expectations, driven mainly by cost-cutting and easing asset quality pressures.
  • Stock Impact: Maintain HOLD recommendation with target price unchanged at HK$3.40. Earnings growth is expected to decline in 2016 due to potential deterioration in asset quality as monetary policy normalizes.
  • Key Financials:
    • Net interest income: Rmb328,650m in 2015, projected to be Rmb333,882m in 2016.
    • Net profit (adj.): Rmb170,845m in 2015, projected to be Rmb164,658m in 2016.
    • NIM narrowed by 8bp qoq to 1.97%.
    • Cost/income ratio improved by 1.4ppt yoy to 36.0%.
    • Loan loss coverage declined to 149.1%.
  • Valuation: P/BV at 0.6x, P/NTA at 0.6x, and adjusted P/E at 4.6x.

Indonesia

• Bank Danamon (BDMN IJ)
  • 1Q16 Results: Net profit up 18% yoy, but the analysts caution that it is too early to get excited.
  • Stock Impact: SELL recommendation with target price at Rp2,800.
• Matahari Department Store (LPPF IJ)
  • 1Q16 Results: Net income up 31.8% yoy, exceeding expectations.
  • Stock Impact: BUY recommendation with target price at Rp22,100.

Malaysia

• NTP 2015 Annual Report: Progress continues, but structural challenges remain. The equity market is expected to correct before mid-year.
• British American Tobacco (ROTH MK)
  • 1Q16 Results: Missed expectations; net profit down 27.9% yoy due to a 34% yoy drop in domestic volume and operating de-leveraging.
  • Stock Impact: SELL recommendation with target price at RM48.00.
• Nestle Malaysia (NESZ MK)
  • 1Q16 Results: Core net profit in line with expectations.
  • Stock Impact: HOLD recommendation with higher DCF-based target price at RM77.00.
• Westports Holdings (WPRTS MK)
  • 1Q16 Preview: Expected above expectation container growth, but future trends are uncertain despite a tariff hike.
  • Stock Impact: SELL recommendation with target price at RM3.30.

Singapore

• REITs: MIT and Parkway Life REIT results were above and in line with expectations, respectively.
• Singapore Airlines (SIA SP)
  • 4QFY16 Preview: Expected to report a 603% yoy increase in earnings.
  • Stock Impact: BUY recommendation with target price at S$13.90.

Thailand

• Delta Electronics (DELTA TB)
  • 1Q16 Preview: Muted data centre market may hamper sales growth; downgraded to SELL.
  • Stock Impact: Target price at Bt72.00.
• Home Product Center (HMPRO TB)
  • 1Q16 Results: Net profit up 18% yoy due to better SSS growth and strong rental income.
  • Stock Impact: HOLD recommendation with target price at Bt8.30.
• Central Plaza Hotel (CENTEL TB)
  • 1Q16 Preview: Earnings hiccup expected.
  • Stock Impact: BUY recommendation with target price at Bt47.00.
• PTT Global Chemical (PTTGC TB)
  • 1Q16 Preview: Solid earnings despite a plant shutdown.
  • Stock Impact: BUY recommendation with target price at Bt70.00.

Key Indices

Top Picks

Key Assumptions

Corporate Events

Analysts

• Edmond Law: +852 2826 4837, edmond.law@uobkayhian.com.hk
• Jasmine Duan: +852 2826 1351, jasmine.duan@uobkayhian.com.hk