20160823-大华继显-Regional_Morning_Notes_29页_1mb

Regional Morning Notes Summary - 23 August 2016

Core Content

This document provides a detailed summary of stock market performance and company results for various regions, including China, Malaysia, and Singapore, along with key indices, corporate events, and analyst insights. It highlights the financial performance of Anhui Conch Cement (914 HK) and China Overseas Land (688 HK) for the first half of 2016 (1H16), and includes strategic and operational updates, valuation metrics, and stock price analysis.

Main Points

China

• Anhui Conch Cement (914 HK):

  • 1H16: Core earnings slightly beat expectations, driven by a lower-than-expected production cost and a rebound in cement prices, particularly in eastern China.
  • Gross margin increased to 30.0% in 1H16, higher than the full-year estimate of 28.0%, due to a 14% decline in production cost.
  • Earnings growth is expected to be supported by the strong rebound in cement prices and the expansion of production capacity.
  • Maintain BUY rating with a target price of HK$26.90, reflecting a 27.5% upside from the current price of HK$21.10.

• China Overseas Land (688 HK):

  • 1H16: Core earnings were slightly below expectations, but the company remained a resilient leader in the sector.
  • Revenue and gross profit increased by 20.5% and 5.4% respectively, but core net profit only rose by 1.7% due to a lower gross margin.
  • The company raised its interim dividend and expects a 25% payout ratio for 2016.
  • After acquiring land parcels from CITIC, its landbank grew to 36.5m sqm (attributable basis), and with CITIC's land, it could reach 68.1m sqm.
  • Maintain BUY rating with a target price of HK$33.41, reflecting a 24.4% upside.

Malaysia

• Alliance Financial Group (AFG MK):

  • 1QFY17: Net profit met expectations, driven by strong cost discipline and fee growth in wealth management, despite weaker loan growth.

• AMMB Holdings (AMMK):

  • 1QFY17: Earnings exceeded expectations due to a lumpy provision write-back, which cushioned the sharp contraction in pre-provision operating profit.

• Nestle Malaysia (NESZ MK):

  • 2Q16: Results exceeded expectations, supported by strong top-line growth, improved efficiency, and a significantly lower effective tax rate.

Singapore

• Wing Tai Holdings (WINGTSP):
  • FY16: Awaiting acquisition-led growth.

Thailand

• 2Q16 Results:
  • 40% of companies reported earnings above forecasts.
  • The SET index target for 2016 was raised to 1,628.

Key Indices

Top Picks (BUY)

• Air China: Target Price HK$9.00, Upside 53.3%
• Ping An Insurance: Target Price HK$47.00, Upside 15.2%
• Ciputra Property: Target Price IJ 960.00, Upside 54.8%
• Indosat: Target Price IJ 9,500.00, Upside 52.0%
• Genting Bhd: Target Price MK 10.40, Upside 27.6%
• City Dev: Target Price SP 10.36, Upside 20.7%
• OCBC: Target Price SP 10.48, Upside 23.9%
• Bangkok Dusit: Target Price TB 25.75, Upside 12.0%
• Siam Cement: Target Price TB 630.00, Upside 22.6%

Sell

• Hartalega: Target Price MK 3.10, Potential Downside 27.9%

Key Assumptions

Corporate Events

• Geely Auto Group Meeting: Hong Kong, 23 Aug
• GCL New Energy Group Meeting: Hong Kong, 25 Aug
• Kingdee International Group Meeting: Hong Kong, 25 Aug
• Q Technology Group Luncheon: Hong Kong, 26 Aug
• China TCM Roadshow: Shanghai, 1 Sep
• Dawnrays Pharma Roadshow: Shanghai, 1 Sep
• Q Technology Group Roadshow: Shanghai, 2 Sep
• Inari Amerton Corporate Roadshow: Taipei, 6 Sep
• China Power International Roadshow: Shanghai, 7 Sep
• Frasers Logistics & Industrial Trust Luncheon: Singapore, 7 Sep
• O-Net Technologies Luncheon: Hong Kong, 8 Sep
• Sihuan Pharmaceutical Holdings Group Corporate Roadshow: Taipei, 8-9 Sep
• China Resources Gas Roadshow: Canada, 12-16 Sep
• Skyworth Digital Holdings Group Meeting: Hong Kong, 21 Sep
• Sembcorp Industries Corp Roadshow: Canada, 26-27 Sep
• Regional Financial and Telco Sector Analyst Presentation: UK/Europe, 26-30 Sep
• Xstep International Holdings Roadshow: Taipei, 7 Oct
• Metro Pacific Investments Corporate Roadshow: Canada, 26-28 Oct
• Xstep Roadshow: Kuala Lumpur, 15 Nov

Valuation and Financial Metrics (Anhui Conch Cement)

Earnings Revision

Summary of Key Insights

• Anhui Conch Cement and China Overseas Land are both highlighted as BUY recommendations with positive outlooks.
• Anhui Conch Cement is expected to benefit from a rebound in cement prices and lower production costs.
• China Overseas Land's core earnings were slightly below expectations, but its strong landbank and dividend strategy remain positive.
• The document includes detailed financial metrics, valuation ratios, and corporate events for the region.
• The target price for Anhui Conch Cement was raised to HK$26.90, and for China Overseas Land to HK$33.41.