20141211-大华继显-Regional_Morning_Notes_23页_1mb

报告摘要

Regional Morning Notes Summary

Core Content

This document provides an overview of market conditions and investment recommendations for various regions and sectors, with a focus on the plantation sector in Malaysia and Indonesia, China's inflation and monetary policy, and specific stock recommendations for companies such as Nexteer Automotive, Xinchen China Power, Jasa Marga, and Malayan Banking.

Main Points

Plantation Sector Update

Malaysia:
- CPO production declined by 7.5% month-on-month in November 2014, mainly due to seasonal factors and dry weather in 2014.
- Inventory reached a 21-month high at 2.28m tonnes, driven by higher palm oil imports (up 19.2% mom), weaker exports (down 6.1% mom), and slower domestic consumption (down 22.0% mom).
- Despite lower production, the inventory level for 2014 is expected to be 2.2m-2.3m tonnes, higher than the forecast of 2.0m tonnes.
- CPO production for 2015 is expected to decline slightly due to the lingering impact of the earlier drought in 2014.
Indonesia:
- Inventory increased by 7.1% mom to 2.25m tonnes, driven by higher production and weaker exports.
- 2014 CPO production is forecasted at 30.8m tonnes, in line with expectations.
- 2015 production is expected to grow by 6.0% yoy to 32.6m tonnes, but the lagged effects of dry weather in 2014 may affect productivity.
Overall:
- The plantation sector is expected to remain in a de-stocking cycle and face weak demand from exports and domestic consumption.
- The real interest rate is rising, which supports the potential for monetary easing.

Key Investment Recommendations

China

Nexteer Automotive (1316 HK):
- Recommendation: Buy
- Current Price: HK$6.55
- Target Price: HK$9.00
- Upside: +37.4%
- Reason: Expected 29% CAGR in net profit from 2013 to 2016 due to the shift to electric power steering and customer base expansion.
- Key Markets: China is expected to become a new growth driver, increasing its revenue share from 11% in 2013 to 20% in 2016.
Xinchen China Power (1148 HK):
- Recommendation: Buy
- Current Price: HK$3.20
- Target Price: HK$4.50
- Reason: Strong earnings outlook due to BMW engines driving demand.
Belle (1880 HK):
- Recommendation: Buy
- Current Price: HK$8.52
- Target Price: HK$11.74
- Note: Slower sales in 3QFY15 may be reflected in price.

Indonesia

Jasa Marga (JSMR IJ):
- Recommendation: Buy
- Current Price: Rp6,950
- Target Price: Rp8,300
- Reason: Bright earnings outlook supported by the government's plan to build 1,000km of toll roads in the next five years.

Malaysia

Malayan Banking (MAY MK):
- Recommendation: Buy
- Current Price: RM8.90
- Target Price: RM10.30
- Reason: Undemanding valuation (implied 11.5x 2014F PE), strong CET1 buffer (>10%), and highest dividend yield (6.1%).

Key Indices and Market Trends

Index	Prev Close	1D %	1W %	1M %	YTD %
DJIA	17533.2	-1.5	-2.1	-0.5	+5.8
S&P 500	2026.1	-1.6	-2.3	-0.6	+9.6
FTSE 100	6500.0	-0.5	-3.2	-1.7	-3.7
AS30	5237.1	-0.4	-2.0	-4.7	-2.2
CSI 300	3221.5	+3.7	+8.6	+25.9	+38.3
FSSTI	3325.8	+0.2	+0.7	+1.0	+5.0
HSCEI	11372.5	+0.3	+2.8	+6.8	+5.1
HSI	23524.5	+0.2	+0.4	-1.2	+0.9
JCI	5165.4	+0.8	-0.0	+2.6	+20.9
KLCI	1765.5	+1.6	+0.4	-3.3	-5.4
KOSPI	1945.6	-1.3	-1.2	-0.9	-3.3
Nikkei 225	17412.6	-2.2	-1.7	+1.7	+6.9
SET	1559.6	-1.0	-2.1	-0.5	+20.1
TWSE	9032.2	-1.1	-1.6	-0.0	+4.9

CPO Prices:
- RM2,219 in November 2014, with weak demand and high inventory pressuring prices.
- Target price for 2014 is RM2,400, with RM2,525 for 2015 and RM2,600 for 2016.
CPI and PPI:
- CPI in November 2014 at 1.4% yoy, lower than consensus expectations of 1.7%.
- PPI declined to -2.7% yoy, indicating deflationary risk.
- Consumer inflation is expected to remain below policy targets, and the PBOC may implement monetary easing in 2015.

Sector Catalysts

Weather disruption could lead to inventory drawdown and oversupply resolution.
Drought in Kalimantan may affect palm oil productivity in 2015.
Weak crude oil prices may reduce bioenergy demand.
China's CPO demand is expected to increase due to inventory replenishment and preparations for Chinese New Year.

Risks

Soybean glut could undermine palm oil demand.
Weakening crude oil prices may reduce bioenergy demand.
Slower economic growth in key markets may affect demand for CPO.

Summary of Key Assumptions

Indicator	2013	2014F	2015F
GDP (yoy)	2.9	3.5	3.7
CPO Price (RM/mt)	736	725	765
BDI	1,219	1,200	1,300

Sector Call

Regional: Maintain Market Weight
Malaysia: Maintain Market Weight
Singapore: Maintain Market Weight
Indonesia: Maintain Market Weight

Top Picks

Company	Rec	Price (Icl)	Target Price (Icl)	Pot. +/-
First Resources	BUY	S$2.80	S$1.40	10.2
Bumitama Agri	BUY	S$1.03	S$1.40	13.8
Sarawak Oil Palm	BUY	RM5.41	RM6.75	10.2

Analyst Contact

Regional Research Team:
- Email: research@uobkayhian.com
- Phone: +65 6535 6868
Chaoping Zhu:
- Email: chaoping@uobkayhian.com
- Phone: +8621 5404 7225 ext. 822
Ken Lee:
- Email: ken.lee@uobkayhian.com.hk
- Phone: +852 2236 6760