20151208-大华继显-Regional_Morning_Notes_16页_799kb

Regional Morning Notes Summary

Core Content Overview

This document provides a regional market update for the morning of Tuesday, 08 December 2015, focusing on China, Malaysia, Singapore, and Thailand. It includes company updates, market indices, financial metrics, and investment recommendations for key players in these markets.

China

Key Company: Sunac China Holdings (1918 HK)

• Market Update: Market concerns eased after unexpected acquisitions, particularly in core second-tier cities.
• Performance: Contracted sales for the year reached 90.5% of the full-year target, with strong performance in November (Rmb7.6b in sales and 406,000 sqm in sales area).
• Landbanking: Acquired seven projects in key cities (Jinan, Nanjing, Chengdu) at a total GFA of 4.4m sqm and Rmb5.8b. Increased stake in Shanghai Huafeng to 48.6%, with plans to acquire more properties.
• Debt Management: Redeemed US $400m senior notes and issued domestic bonds, reducing overall funding costs and improving financial stability.
• Valuation: Maintained HOLD rating with a target price of HK$6.19, representing a 5.8% upside. Revised 2016 RNAV to HK$17.69 and narrowed the discount to RNAV to 65%.
• Financials:
  • Earnings: 2015F EPS is 109.8 Fen, with a 2.8% revision due to finance cost savings.
  • Margins: EBITDA margin increased to 26.1% in 2015F, while net margin improved to 18.7%.
  • Leverage: Net debt to equity increased to 82.3% in 2015F, with interest cover at 3.1x.
• Catalysts: Further mortgage easing, policy relaxation in tier-1 and core tier-2 cities, and strong sales performance in newly entered cities.

Malaysia

Sector: M-REITs

• 3Q15 Results: Results were in line with estimates, with stable net property income (NPI) margin and occupancy rates.
• Performance: Axis REIT and CMMT led the results with 29% and 11% yoy growth, respectively, driven by new property acquisitions.
• Occupancy Rates: Sunway REIT and KLCCSS experienced a downward trend in occupancy rates, but the impact on earnings is minimal due to their low contribution from the office and hotel segments.
• Investment Recommendations:
  • Sunway REIT: Maintained BUY rating with a target price of RM1.70.
  • Pavilion REIT: Maintained HOLD rating with a target price of RM1.52.
• Market Outlook: Investors remain UNDERWEIGHT on SET due to fears of further valuation de-rating.
• Key Metrics:
  • Dividend Yield: 6.5% for 2015F.
  • Net Gearing: 32% for Sunway REIT.
  • Yield Spread: Narrowed from 1.68ppt in 2014 to 0.94ppt in 2015 due to rising MGS rates.

Singapore

Key Company: Neptune Orient Lines (NOL SP)

• Corporate Update: CMA-CGM made a pre-conditional offer of S$1.30 per share, which is 92% premium to Hapag-Lloyd's IPO valuation.
• Offer Details: Offer is subject to anti-trust approval, and Temasek will fully divest its 66.8% stake.
• Valuation: Maintain HOLD with a revised target price of S$1.30, representing a 0.96x multiple of 9M15 book value.
• Catalysts: No better deals on the horizon, suggesting shareholders should consider accepting the offer.

Thailand

Key Company: Bangkok Chain Hospital (BCH TB)

• Update: Raised target price to Bt9.70 due to faster-than-expected recovery at WMC and strong performances at existing hospitals.
• Market Outlook: Investors remain cautious about the SET index, fearing further valuation de-rating.

Key Indices

Key Assumptions

Top Picks

Corporate Events

• Singapore O&G Corporate Roadshow: Held in Taipei from 8 Dec to 9 Dec.
• Singapore Strategy 2H15 Analyst Presentation: Held in Taipei from 10 Dec to 11 Dec.

Summary of Key Points

Main Points

• China: Sunac China is progressing with land acquisitions in core second-tier cities and has improved its contracted sales performance.
• Malaysia: M-REITs reported results in line with expectations, with Axis REIT and CMMT leading the performance.
• Singapore: Neptune Orient Lines received a pre-conditional offer from CMA-CGM, suggesting a potential takeover.
• Thailand: Bangkok Chain Hospital received a target price increase due to improved performance.

Main Viewpoints

• Sunac China is stabilizing after a period of market concerns due to its acquisitions.
• M-REITs in Malaysia are showing resilience with stable NPI margins and occupancy rates.
• The offer from CMA-CGM for Neptune Orient Lines is a significant catalyst for potential takeover.
• Investors are cautious about the SET index in Thailand due to valuation concerns.

Key Information

• Sunac China's target price is HK$6.19, with a 5.8% upside.
• Malaysia's M-REITs have a narrowing yield spread due to rising MGS rates.
• Neptune Orient Lines is under a pre-conditional offer of S$1.30 per share.
• Bangkok Chain Hospital's target price was raised to Bt9.70 due to improved performance.