20170511-大华继显-Regional_Morning_Notes_25页_1mb

报告摘要

Regional Morning Notes Summary

Core Content Overview

This document provides a comprehensive summary of economic trends, company results, and market insights for the Asia-Pacific region, with a focus on China, Hong Kong, Malaysia, and Singapore. It includes inflation data, corporate performance, key indices, analyst recommendations, and upcoming corporate events.

Main Points

China: Inflation Trends

CPI Inflation:
- Rose slightly to 1.2% yoy in April 2017, driven by higher service prices, while food prices dropped 3.5% yoy.
- The weak CPI inflation is attributed to a sharp decline in food prices, especially vegetables and pork, due to increased supply and strong pork imports.
Core CPI Inflation:
- Remained stable at 2.1% yoy, supported by steady growth in service prices (2.9% yoy), including healthcare (5.6% yoy), education (3.4% yoy), and travel services (4.2% yoy).
PPI Inflation:
- Decelerated to 6.4% yoy in April 2017 from 7.6% yoy in March 2017, indicating a slowdown in price growth.
- The decline in PPI is due to the fading low-base effect of raw materials, lower commodity prices, and reduced pricing power for downstream manufacturers.
- Consumer goods prices increased only 0.7% yoy, with deflation in durable consumer goods (-0.1% yoy).
Economic Outlook:
- CPI inflation is expected to remain weak in the coming months, impacting downstream investment.
- PPI inflation may continue to decline in Q2 2017, but government infrastructure investment could support construction materials and steel prices.

Key Indices

Index	Prev Close	1D %	1W %	1M %	YTD %
DJIA	20943.1	(0.2)	(0.1)	1.4	6.0
S&P 500	2399.6	0.1	0.5	1.9	7.2
FTSE 100	7385.2	0.6	2.1	0.3	3.4
AS30	5911.1	0.6	(0.1)	(0.9)	3.4
CSI 300	3337.7	(0.4)	(2.2)	(5.1)	0.8
FSSTI	3250.0	0.4	1.2	2.2	12.8
HSI	25015.4	0.5	1.3	3.8	13.7
KLCI	1766.6	(0.1)	(0.7)	1.6	7.6
KOSPI	2270.1	(1.0)	2.7	6.9	12.0
Nikkei 225	19900.1	0.3	3.7	6.1	4.1
SET	1560.3	(0.5)	(0.2)	(1.3)	1.1
TWSE	9968.3	0.5	0.1	1.4	7.7
BDI	1005	(0.2)	(2.8)	(18.4)	4.6
CPO	2777	2.1	5.6	(3.4)	(13.2)
Brent Crude	50	3.1	(1.1)	(10.3)	(11.6)

Top Picks

Company	Ticker	Current Price	Target Price	% Change
BUY	Alibaba	BABA US	119.98	130.00
Beijing Ent. Water	371 HK	5.99	7.60	26.9
Indosat	ISAT LJ	7,175.00	7,900.00	10.1
Tiga Pilar	AISL LJ	2,180.00	2,550.00	17.0
V.S. Industry	VSI MK	2.01	2.20	9.5
OCBC	OCBC SP	10.46	10.75	2.8
Bangkok Dusit	BDMS TB	20.50	27.00	31.7
Siam Cement	SCC TB	520.00	600.00	15.4
SELL	Great Wall Motor	2333 HK	8.10	6.00
MGM China	2282 HK	16.90	15.00	(11.2)
Hartalega	HART MK	RM5.39	RM4.07	(24.5)

Company Results

Hong Kong Exchanges & Clearing (388 HK)

1Q17 Earnings:
- Net profit rose to HK$1.72b, up 20% yoy, beating estimates.
- Net investment income surged 96% yoy due to fair value gains and one-off interest.
Performance:
- Trading fees and tariffs dropped 5% yoy, while stock exchange listing fees rose 10.9%.
- Operating expenses decreased 27% yoy, mainly due to one-off insurance recovery.
Recommendation:
- Upgraded to HOLD with a new target price of HK$174.00.
- Concerns include unattractive valuation at 34x 2017F P/B and potential overpricing of the stock.
- Bond Connect announcement expected before 1 July, which could provide short-term support.

Hartalega Holdings (HART MK)

4QFY17 Results:
- Top-line growth of 15% qoq due to increased utilisation rates and three new production lines.
- Margins expanded qoq due to higher glove ASPs.
Outlook:
- Structural recovery in ASPs and improved operating landscape suggest a stronger year ahead.
- However, the stock is overvalued, and we maintain a SELL recommendation.
- Target price: RM4.07.

Key Assumptions

Country	GDP (yoy) 2016	GDP (yoy) 2017F	GDP (yoy) 2018F
US	1.6	2.7	2.5
Euro Zone	1.7	1.6	1.5
Japan	1.0	0.9	1.2
Singapore	2.0	2.4	2.8
Malaysia	4.2	4.5	4.7
Thailand	3.2	3.3	3.1
Indonesia	5.0	5.2	5.5
Hong Kong	1.9	2.0	2.0
China	6.7	6.3	6.3
Brent (Average)	45	55	60
CPO	2,653	2,600	2,500

Corporate Events

Tea Session with Health Mgm Int'l: Singapore, 12 May
Roadshow with Q Technology Group: Hong Kong, 12 May
Analyst Presentation on M'sia Outlook and Strategy and Regional Gaming: Hong Kong, 17 May
Roadshow with IGG Inc: Taipei, 18 May
Site visit to Fosun Pharma Group and Shanghai Pharma Holding Mircoport Scientific Corp: Shanghai, 18–19 May
Roadshow with Petronas Dagangan Bhd: Hong Kong, 23 May
Analyst Marketing on China Internet Sector: Hong Kong, Singapore, Kuala Lumpur, 22–25 May
Roadshow with Singtel: Canada, 26 May
Roadshow with Tongda Group Holdings: Hong Kong, 1 Jun
Roadshow with PT Siloam Int'l Hospital: Canada, 5–16 Jun
Luncheon with United Overseas Bank: Singapore, 3 Jul
Roadshow with Top Glove Corporation: US/Canada, 5–12 Sep

Analysts

Zhu Chaoping (China):
- Contact: +8621 5404 7225 ext. 822
- Email: chaoping@uobkayhian.com
Jasmine Duan (Hong Kong):
- Contact: +852 2826 1351
- Email: jasmine.duan@uobkayhian.com.hk

Summary of Key Financials (Hong Kong Exchanges & Clearing)

Earnings:
- 1Q17 net profit: HK$1.72b, up 20% yoy.
- 1Q17 earnings account for 25% of full-year estimate.
Revenue:
- 1Q17 total revenue: HK$3.048b, up 10.8%.
Expenses:
- Operating expenses decreased by 3.3% yoy.
Valuation:
- Trading at 34x 2017F P/B, which is above the historical mean.
Target Price:
- HK$174.00 (upgraded from HOLD to HOLD, with an upside of -10.4%).

Summary of Key Financials (Hartalega Holdings)

Turnover:
- 4QFY17: RM527m, up 15.5% qoq.
Profit:
- 4QFY17 pre-tax profit: RM118.5m, up 51.3% qoq.
Costs:
- COGS: RM410.6m, up 17.8% qoq.
Valuation:
- Current price: RM5.39, with a target price of RM4.07.
- SELL recommendation due to overvaluation.

Conclusion

The document highlights the mixed performance of the region's economies and stock markets, with China and Hong Kong showing signs of slowing inflation and mixed earnings, while Malaysia and Singapore report positive growth and sectoral improvements. Analysts provide recommendations and insights based on valuations, earnings performance, and macroeconomic factors, with a focus on the potential impact of policy changes and market sentiment.

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