20150114-大华继显-Regional_Morning_Notes_24页_2mb

Regional Morning Notes Summary - 14 January 2015

Core Content Overview

This document provides a summary of market insights and company updates for various Asian markets, including Thailand, China, Indonesia, Malaysia, and Singapore. It highlights key economic indicators, monetary policy changes, stock performance, and company-specific developments.

Key Stories by Region

Thailand

• SET Index's Target Revision: The strategy suggests buying stocks that benefit from government stimulus programmes or offer high yields.
• Recommended Stocks: ADVANC, KBANK, KTB, STEC, AMATA, and GFPT are highlighted as potential buys.

China

• Monetary Policy Transition: The PBOC is transitioning from a framework based on monetary aggregates to one based on short-term interest rates.
• Policy Goals: Four goals were reconfirmed, including stable economic growth, full employment, stable price levels, and balance of external payments.
• Key Financial Indicators:
  • GDP growth is expected to remain stable in 2015 at 7.0%.
  • Brent crude oil price is forecasted to decline from US$110 in 2013 to US$85 in 2015.
  • CPO (Crude Palm Oil) is expected to rise from US$736 in 2013 to US$765 in 2015.
  • BDI (Baltic Dry Index) is projected to increase from 1,219 in 2013 to 1,300 in 2015.

Top Picks

Key Assumptions

Company Updates

Baoxin Auto Group (1293 HK)

• Stock Performance: The stock price fell by 30% over the past six months due to fears of weak margins in 2H14.
• New-car Sales: Margins are expected to decline from 6% in 2013 to 4.6% in 2014 and further to 4.4% in 2015.
• Used-car Sales: Becoming a new growth driver, with gross margins of 10% vs 3-5% for new-car sales.
• Earnings Forecast: EPS forecasts for 2014-16 were cut by 8-14%.
• Valuation: Current valuation at 7.8x 2015F PE is considered attractive.
• Recommendation: Maintain BUY with a revised target price of HK$5.70.

China Shipping Development (1138 HK)

• VLCC Market Recovery: VLCC average daily earnings reached US$43,948/day in 4Q14, up 26.3% yoy.
• Oil Price Impact: Declining oil prices and low bunker fuel costs have improved CSD's gross margin.
• Stock Impact: Upgrade to BUY with a target price of HK$7.50.

Key Financials and Metrics for Baoxin Auto Group

Analyst Insights

• Chaoping Zhu: Highlights the transition in monetary policy and the importance of the stock market in supporting economic reforms.
• Ken Lee: Provides an update on Baoxin Auto Group, noting the challenges in new-car sales margins and the potential for growth in used-car sales.

Summary of Key Points

• The PBOC is transitioning to a new monetary policy framework based on interest rates rather than monetary aggregates.
• The stock market is seen as a key driver in facilitating economic reforms and improving the effectiveness of monetary policy.
• Baoxin Auto Group faces margin pressures from new-car sales but is expected to benefit from the used-car sales business.
• China Shipping Development is expected to benefit from the recovery in the VLCC market and declining oil prices.
• The document outlines the expected performance of various indices and highlights the potential for growth in specific sectors and companies.