20141008-大华继显-Regional_Morning_Notes_19页_1019kb

报告摘要

Regional Morning Notes Summary - 08 October 2014

Core Content Overview

This document provides a summary of market updates and investment recommendations for several Asian markets, including China, Indonesia, Malaysia, Singapore, and Thailand. It includes evaluations of specific sectors, company updates, financial metrics, and market outlooks. The key focus areas are the automotive sector in China, the cement industry in Indonesia, and the banking sector in Malaysia.

Key Sectors and Updates

China - Automotive Sector

Evaluation Focus: Foreign currency debts of auto dealers.
Trend: Auto dealers have increasingly used USD loans to reduce interest costs and benefit from RMB appreciation.
Impact: A 1% RMB appreciation leads to a 1.5–2% increase in net profit.
Top Picks:
- Zhengtong (1728 HK): Preferred due to lower debt levels, higher ROIC, and better valuation (8.6x 2014F PE vs peers’ 9–11x). Target price: HK$6.50.
- Baoxin (1293 HK): Maintained as a BUY, with target price: HK$7.00.
- Zhongsheng (881 HK): Maintained as a BUY, with target price: HK$10.50.
Debt Analysis (as of 30 Jun 14):
- Zhengtong: Total USD debt of US$335m (36% of total debt).
- Baoxin: Total USD debt of US$274m (22% of total debt).
- Zhongsheng: HK$2.257b in CBs (16% of total debt).
ROIC vs Interest Cost: The spread has stabilized at 2–3% after dropping from over 10% in 2011.
Market Impact: The RMB appreciation and depreciation trends have led to forex gains and losses, respectively, for auto dealers.
Catalysts: Further breakdown of OEMs' control over dealerships could trigger stock price rallies.
Risks: Severe credit tightening could hurt auto sales, particularly for companies with long bill receivable days.

Indonesia - Indocement Tunggal Prakarsa (INTP)

Update: 9M14 sales volume expected to reach 13mt, with 4Q14 projected at 1.7mt/month, leading to 2014 sales of 18mt.
Key Projects:
- Giant Seawall Project in Jakarta, set to start on 9 Oct 14, with a total cost of US$40b and expected completion by 2030.
- Expansion plans for new cement plants in Pati (Central Java) and Langkat (North Sumatra).
Financial Highlights (2014F):
- Net profit forecasted at Rp5.891b.
- PE ratio at 15.5x (2014F), below its 3-year average of 17.2x.
- Target price: Rp30,275, based on DCF analysis.
Valuation: Trading at 13.7x 2015 PE, still undervalued relative to historical averages.
Market Share: Dominant in Jakarta, benefiting most from the Giant Seawall Project.
Share Price: Rp22,500 (current), with a target price of Rp30,275 (+34.6% upside).

Malaysia - Banking Sector

Sector Outlook: Institutional investors share the view of domestic challenges.
Top Picks:
- Maybank: Preferred due to high dividend yield and strong CASA base, positioning it well in a rising rate environment.
- HLBank: Slightly more positive outlook due to industry-low LDR, offering greater NIM defense.
Negative Outlook: CIMB and AMMB remain underperforming.
Maintain MARKET WEIGHT for the sector.

Singapore - Super Group (SUPER)

Update: Price retracement offers entry opportunities for long-term investors.
Recommendation: Upgraded to BUY.
Target Price: S$1.55.
Valuation: Trading at a discount to intrinsic value.

Thailand - GFPT

Update: 3Q14 earnings could be flat qoq but down yoy.
Recommendation: BUY.
Target Price: Bt24.50.
Valuation: Current price at Bt20.40, with potential for growth.

Key Indices Performance (as of 08 October 2014)

Index	Prev Close	1D %	1W %	1M %	YTD %
DJIA	16719.4	-1.6	-1.9	-2.4	0.9
S&P 500	1935.1	-1.5	-1.9	-3.6	4.7
FTSE 100	6495.6	-1.0	-1.9	-5.2	-3.8
AS30	5284.8	-0.1	-0.2	-5.3	-1.3
CSI 300	2451.0	0.1	2.1	4.1	5.2
FSSTI	3244.0	-0.3	-1.4	-2.7	2.4
HSI	23422.5	0.5	-1.1	-7.0	0.5
KLCI	1833.5	-0.4	-0.7	-2.0	-1.8
KOSPI	1972.9	0.2	-2.6	-3.7	-1.9
Nikkei 225	15783.8	-0.7	-2.4	0.5	-3.1
SET	1539.4	-0.2	-2.9	-2.9	18.5
TWSE	9040.8	-0.6	0.8	-3.9	5.0
BDI	1015	-1.4	-4.5	-12.1	-55.4
CPO (RM/mt)	2177	-1.0	-0.4	9.8	-15.4
Nymex Crude	88	-0.4	-2.5	-4.5	-10.1

Top Picks Summary

Company	Ticker	Recommendation	Target Price	Pot. +/-
Sunac China	1918 HK	BUY	HK$8.45	+33.1%
ICBC	1398 HK	BUY	HK$6.15	+24.0%
Bank Mandiri	BMRI J	BUY	Rp12,500	+28.2%
Gamuda	GAM MK	BUY	S$5.50	+14.3%
DBS	DBS SP	BUY	S$22.68	+23.3%
Pacific Radiance	PACRA SP	BUY	S$1.76	+31.3%
Bangkok Bank	BBL TB	BUY	Bt276.00	+40.1%
Advanced Info	ADVANC	BUY	Bt270.00	+22.7%
UMWH Holdings	UMWH MK	SELL	UMWH MK	-16.7%

Key Assumptions

Indicator	2012	2013	2014F
GDP (yoy)	1.9	3.0	3.0
US	1.9	3.0	3.0
Euro Zone	-0.4	1.0	1.4
Japan	1.5	2.1	2.0
Singapore	3.9	4.2	4.2
Malaysia	4.7	5.6	5.2
Thailand	2.9	1.5	5.1
Indonesia	5.8	5.5	6.0
Hong Kong	2.9	3.5	3.7
China	7.7	7.2	7.0
Brent (US$/bbl)	110	110	110
Aluminium (US$/mt)	1,886	1,713	1,650
Copper (US$/mt)	7,349	6,866	6,850
Gold (US$/ounce)	1,411	1,321	1,400
Iron Ore (US$/mt)	135	103	95
CPO (US$/mt)	736	788	848
BDI	1,219	1,500	1,800

Key Financials (INTP)

Metric	2013	2014F	2015F	2016F
Net turnover (Rpb)	18,691	22,151	24,986	28,192
EBITDA (Rpb)	6,784	8,908	10,192	11,404
Net profit (Rpb)	5,012	5,891	6,669	7,652
EPS (Rp)	1,361.3	1,600.5	1,811.9	2,078.2
PE (x)	18.2	15.5	13.7	11.9
P/B (x)	3.6	3.3	2.8	2.4
EV/EBITDA (x)	11.6	8.9	7.8	6.7
Dividend Yield (%)	1.6	1.7	1.9	2.2
Net margin (%)	26.8	26.6	26.7	27.1
Net debt/(cash) to equity (%)	-54.5	-41.9	-36.3	-39.6

Conclusion

The report highlights the strategic advantages of Chinese auto dealers leveraging foreign currency loans to reduce interest costs and benefit from RMB appreciation. It recommends Zhengtong as the top pick due to its strong financials and lower debt. In Indonesia, INTP is expected to benefit significantly from the Giant Seawall project and is recommended as a BUY. In Malaysia, the banking sector is seen as having challenges, with Maybank and HLBank as top picks. The report also provides insights into market indices, key financial metrics, and corporate events that could influence stock performance.

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