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Regional Morning Notes Summary - 29 July 2016

Core Content Overview

This document provides a summary of stock performance and company results for various markets, including China, Indonesia, Malaysia, and Singapore, along with key financial metrics and analyst recommendations.

Main Points and Key Information

China

• Great Wall Motor (2333 HK):
  • 2Q16: Net profit up 16% yoy to Rmb2,532m, but expected to drop in 3Q16 due to price cuts.
  • 1H16: Net profit grew 4% yoy to Rmb4,928m, which was higher than both the analyst's and consensus estimates.
  • Earnings surprise from unexpected qoq margin improvement.
  • Raised 2016 net profit forecast by 12% to Rmb7.76b.
  • Maintained SELL rating with a target price of HK$5.80.
  • Key factors: Price cuts on major models (e.g., Haval H6), expected margin pressure in 2016-18, and potential for further earnings downgrades.

Indonesia

• Bank Jabar (BJBR IJ):

  • 1H16: Net profit up 56% yoy, but missed consensus estimate.
  • Downgraded to HOLD with a target price of Rp1,330.

• Matahari Department Store (LPPF IJ):

  • 1H16: Net income up 78.6% yoy, ahead of consensus expectations.
  • Maintained BUY rating with a target price of Rp23,700.

Malaysia

• Malaysia Airports Holdings (MAHB MK):

  • 2Q16: Improved PSC and good cost control, but slowdown in Turkish operations remains a key risk.
  • Maintained SELL rating with a target price of RM5.10.

• Pavilion REIT (PREIT MK):

  • 1H16: Retail environment remains challenging.
  • Maintained HOLD rating with a target price of RM1.78.

• Public Bank (PBK MK):

  • 2Q16: Earnings in line with expectations, supported by solid credit cost but partially offset by operating cost pressure and weak fee income.
  • Maintained HOLD rating with a target price of RM20.00.

• Tenaga Nasional (TNB MK):

  • 3QFY16: EBTIDA margin expanded to 35% due to robust commercial electricity demand.
  • Maintained BUY rating with a target price of RM16.00.

• Westports Holdings (WPRTS MK):

  • 2Q16: Core profit in line with expectations, driven by above-industry container volume growth (+11%).
  • Maintained SELL rating with a target price of RM3.30.

Singapore

• Oversea-Chinese Banking Corp (OCBC SP):

  • 2Q16: Strong performance, with a BUY rating and a target price of S$10.48.

• Singapore Airlines (SIA SP):

  • 1QFY17: Below expectations due to steep cargo and associate losses.
  • Maintained HOLD rating with a target price of S$11.50.

• Sembcorp Marine (SMM SP):

  • 2Q16: Net profit down 90% due to one-offs; RM260m contract wins are VOs.
  • Maintained HOLD rating with a target price of S$1.27.

• United Overseas Bank (UOB SP):

  • 2Q16: Strong non-interest income saved the day.
  • Not rated, but maintained HOLD.

• China Aviation Oil Singapore Corp (CAO SP):

  • 2Q16: Strong results from associate SPIA's performance.
  • Maintained BUY rating with a target price of S$1.90.

Key Indices Performance

Top Picks (BUY)

Key Assumptions

Corporate Events

Summary of Key Financials and Metrics

Great Wall Motor (2333 HK)

• Share Price: HK$7.84
• Target Price: HK$5.80
• Upside: -26.0%
• Market Cap (HK$m): 24,300
• 3-Month Avg Daily Turnover (US$m): 21.3
• Net Profit (1H16): Rmb4,928m (up 4% yoy)
• Net Margin (1H16): 11.8%
• EPS (1H16): 85.0 fen
• PE (1H16): 8.0x
• P/B (1H16): 1.6x
• EV/EBITDA (1H16): 5.9x
• Dividend Yield: 3.3%
• Net Debt/Cash to Equity: -10.1%
• ROE (2016F): 18.9%

Longfor Properties (960 HK)

• Share Price: HK$10.76
• Target Price: HK$13.56
• Upside: +26.0%
• Market Cap (HK$m): 62,800.3
• 3-Month Avg Daily Turnover (US$m): 4.7
• Net Profit (1H16): Rmb8,369.7m
• Core Net Profit (1H16): Rmb8,369.7m
• Core Net Margin (1H16): 15.0%
• PE (1H16): 6.4x
• P/B (1H16): 1.0x
• EV/EBITDA (1H16): 7.1x
• Dividend Yield: 3.4%
• Net Debt/Cash to Equity: 62.4%
• ROE (2016F): 14.3%

Analysts

• Ken Lee: +852 2236 6760 | ken.lee@uobkayhian.com.hk
• Sophie Yu: +852 2826 1392 | sophie.yu@uobkayhian.com.hk