20161123-大华银行-Regional_Morning_Notes_26页_2mb

报告摘要

Regional Morning Notes Summary

Core Content

This document provides a detailed market update and analysis for various regions and specific companies as of Wednesday, 23 November 2016. It includes insights on stock performance, corporate updates, financial metrics, and market outlooks.

Key Stories by Region

Singapore

Global Logistic Properties (GLP SP/BUY/S$2.04/Target: S$2.40)
- The company is undergoing a metamorphosis into a global fund manager, indicating a strategic shift in its business model.

China

China Minsheng Bank (1988 HK/HOLD/HK$8.76/Target: HK$8.65)
- The bank has made a tactical shift from small and micro enterprises to SOEs and mortgages due to stresses on asset quality.
- NPLs/90 days overdue loans are at 61.5%, which is less conservative than industry peers.
- The balance sheet is stretched with TA/TCE at 16x (compared to ICBC at 12.1x and CCB at 12.6x).
- Bancassurance has seen strong growth, with fees & commissions rising 11.6% yoy in 1H16.
- Investment portfolio has expanded significantly, with Rmb1.6t in investment securities (29.8% of total assets) as of 1H16.
- New board installation is expected in early 2017, which will determine the future strategy.
- Valuation is maintained at HK$8.65, based on 0.92x 2017F P/B from the Gordon Growth Model.
- Entry price is HK$7.70, with an upside of -1.3%.

Indonesia

Cement Sector: Cautiously Positive About 2017
- Domestic cement sales in October 2016 were 6.1mt, down 4.5% yoy.
- 10M16 sales were 50.5mt, growing only 3.3% yoy, the slowest in 2016.
- SMGR is highlighted as attractive, trading at -2SD historical PE mean.
- Price war remains intense, with ASP declining due to weak demand.
- 2017 growth is expected at 6% yoy, driven by higher commodity prices and stronger property sales.
- Java region is expected to see stronger demand due to loosened LTV regulation and competitive mortgage rates.
- Market Weight is maintained, with SMGR being the preferred stock due to its lower valuation.

Malaysia

Dialog Group (DLG MK/HOLD/RM1.54/Target: RM1.60)
- 1QFY17 core profit is in line with expectations.
- Downgrade to HOLD due to diminishing contango play and escalating costs.
Hong Leong Bank (HLBK MK/HOLD/RM13.12/Target: RM12.20)
- 1QFY17 earnings are broadly in line with estimates.
- Premium valuations to ROE have already priced in the bank's solid liquidity position.
Kossan Rubber (KRI MK/HOLD/RM6.89/Target: RM6.72)
- 3Q16 earnings fell 38% qoq due to productivity losses from ongoing line refurbishments.
- Near-term outlook is affected by the absence of capacity growth.
WCT Holdings (WCTHG MK/HOLD/RM1.91/Target: RM2.05)
- Downgrade to HOLD after a 19% ytd share price surge.
- Asset monetisation is still under consideration, but the stock is fully valued.

Thailand

Somboon Advance Technology (SAT TB/HOLD/Bt13.30/Target: Bt14.80)
- An uphill struggle is noted, with uncertain prospects.

Key Indices Performance

Index	Previous Close	1 Day %	1 Week %	1 Month %	YTD %
DJIA	19023.9	0.4	0.5	4.8	9.2
S&P 500	2202.9	0.2	1.0	2.9	7.8
FTSE 100	6819.7	0.6	0.4	-2.9	9.2
AS30	5480.6	1.1	1.5	-0.6	2.5
CSI 300	3468.4	0.8	1.1	4.2	-7.0
FSSTI	2822.2	0.2	0.9	-0.3	-2.1
HSI	22678.1	1.4	1.6	-3.0	3.5
KLCI	1629.3	0.1	-0.1	-2.4	-3.7
Nikkei 225	18162.9	0.3	2.8	5.7	-4.6
BDI	1232	-0.6	13.7	46.3	157.7
CPO (RM/mt)	2950	1.5	2.7	7.7	34.1
Brent Crude	49	0.4	4.6	-5.2	31.7

Top Picks

BUY

Air China (753 HK) – Target Price: HK$7.00, Potential Upside: 38.1%
Ping An Insurance (2318 HK) – Target Price: HK$47.00, Potential Upside: 10.2%
Ciputra Property (CTRP IJ) – Target Price: Bt960.00, Potential Upside: 33.3%
Indosat (ISAT IJ) – Target Price: Bt8,015.00, Potential Upside: 30.3%
Genting Bhd (GENT MK) – Target Price: RM10.10, Potential Upside: 23.8%
City Dev (CIT SP) – Target Price: S$10.36, Potential Upside: 21.3%
OCBC (OCBC SP) – Target Price: S$10.45, Potential Upside: 19.6%
Bangkok Dusit (BDMS TB) – Target Price: Bt31.20, Potential Upside: 36.2%
Siam Cement (SCC TB) – Target Price: Bt645.00, Potential Upside: 36.1%

SELL

Hartalega (HART MK) – Target Price: HK$3.33, Potential Downside: 32.0%

Key Assumptions

Region	2015 GDP (%)	2016F GDP (%)	2017F GDP (%)
US	2.6	2.0	2.7
Euro Zone	2.0	1.4	1.0
Japan	0.5	0.6	0.8
Singapore	2.0	1.4	1.7
Malaysia	5.0	4.2	4.5
Thailand	2.8	3.2	3.5
Indonesia	4.8	5.0	5.2
Hong Kong	2.4	2.1	1.8
China	6.9	6.5	6.2

Metric	2015	2016F	2017F	2018F
Brent (Average)	53.60	42	54	54
CPO (RM/mt)	2,168	2,500	2,600	2,600

Corporate Events

Event	Venue	Begin Date	End Date
Concord New Energy Roadshow	UK/Europe	21 Nov	24 Nov
Indo Strategy Analyst Marketing	Taipei	23 Nov	23 Nov
China TCM Group Luncheon	Hong Kong	24 Nov	24 Nov
KL 1H2017 Strategy Conference	Kuala Lumpur	24 Nov	24 Nov
Metro Pacific Investments Roadshow	Canada	24 Nov	25 Nov
Oriental Watch Holdings Group Meeting	Hong Kong	28 Nov	28 Nov
Sa Sa International Group Meeting	Singapore	29 Nov	29 Nov
Thai Oil Corporate Roadshow	Singapore	29 Nov	30 Nov

Stock Impact & Valuation

CMBC's CET-1 CAR is 9.3%, slightly above the minimum requirement of 8.5%.
CMBC's TA/TCE is 16x, higher than peers (ICBC: 12.1x, CCB: 12.6x).
Valuation is based on 0.92x 2017F P/B.
Target price is HK$8.65, with an entry price of HK$7.70.
Earnings are expected to grow 6.6% in 2016, 7.5% in 2017, and 6.5% in 2018.

Action & Recommendation

Maintain MARKET WEIGHT for the cement sector in Indonesia.
SMGR is attractive, trading at -2SD historical PE mean.
Hartalega is least preferred, with negative growth and low upside.
Monitor catalysts such as demand pick-up, cost pressure, industry consolidation, and earnings growth.

Analysts

Jonathan Koh, CFA
- Contact: +65 6590 6620
- Email: jonathankoh@uobkayhian.com
Jasmine Duan
- Contact: +852 2826 1351
- Email: jasmine.duan@uobkayhian.com.hk
Adrianus Bias Prasuryo
- Contact: +6221 2993 3990
- Email: adrianusbias@uobkayhian.com

Conclusion

The document outlines the current market sentiment and investment recommendations for various regions, with a focus on China and Indonesia. It highlights strategic shifts, financial performance, and valuation insights for key companies, while also providing economic assumptions and corporate event schedules. The cement sector in Indonesia is cautiously positive for 2017, with SMGR being the preferred name.