20150616-大华继显-Regional_Morning_Notes_21页_1mb

报告摘要

Regional Morning Notes Summary - 16 June 2015

Core Content Overview

This document provides a detailed analysis of financial performance and market outlook for several companies and regions, focusing on earnings, stock performance, and investment recommendations. It includes updates on Brilliance Auto and Huaneng Renewables Corporation, along with broader economic and sectoral insights.

Key Stories

Thailand: Banking Sector

Downgrade to MARKET WEIGHT: Due to lower earnings forecasts and a more challenging macroeconomic outlook.

China: Brilliance Auto (1114 HK)

Company Update:
- 2015 earnings decline has been priced in.
- The stock has fallen by 30% since the downgrade from BUY to SELL in April.
- Earnings are expected to recover in 2016 with the launch of three new models.
Investment Recommendation:
- Upgraded from SELL to HOLD.
- Target Price: HK$12.00.
- Upside: +9%.
Sales Performance:
- May 2015 sales down 8.6% yoy, with continued negative growth for the 5-series and X1.
- Retail sales growth slowed from 17% yoy in Jan-Feb 2015 to 0% yoy in May 2015.
- Channel Inventory: Reduced from 31 days to 23 days due to deep discounts and weak demand.
Financial Assumptions:
- 2015 net profit cut by 14% to Rmb4.6b (-15% yoy).
- 2016 and 2017 sales assumptions remain at 370,000 and 430,000 units respectively.
- Net Margin: Cut from 10.7% to 9.8% for 2015, but expected to return to 10.3% and 10.6% in 2016 and 2017.
Stock Impact:
- Price Performance: HK$11.04 (current), with a 10x 2015F PE ratio and 7x 2016F PE ratio.
- Valuation: The stock is undervalued, leading to an upgrade from SELL to HOLD.

Huaneng Renewables Corporation (958 HK)

Company Update:
- Strong earnings recovery due to increased utilisation rates and capacity growth.
- Government support is expected to continue, improving returns and cash flow.
Investment Recommendation:
- Maintained BUY.
- Target Price: HK$3.90.
- Upside: +17.5%.
Capacity Expansion:
- 2014: 1.5GW of new capacity added, total capacity reached 8GW.
- 2015: Target to add about 2GW, representing 25% yoy growth.
- Wind Capacity: 1.8GW of the 2GW added in 2015.
- Solar Capacity: 0.2GW, making up 10% of the total.
Utilisation Recovery:
- Wind utilisation hours expected to increase significantly in 2015 due to better wind conditions.
- Power Curtailment: Maintained at 12% in 5M15, similar to 5M14.
- Expected Full-Year Utilisation: 2,000 hours, up 6.7% yoy.

Key Indices (as of 16 June 2015)

Index	Prev Close	1D %	1W %	1M %	YTD %
DJIA	17791.2	-0.6	0.1	-2.6	-0.2
S&P 500	2084.4	-0.5	0.2	-1.8	1.2
FTSE 100	6710.5	-1.1	-1.2	-3.6	2.2
AS30	5541.5	-0.2	0.6	-3.3	2.8
CSI 300	5222.0	-2.1	-2.5	13.1	47.8
FSSTI	3323.1	-0.9	0.1	-4.0	-1.2
HSCEI	13622.8	-2.6	-3.5	-2.8	13.7
HSI	26861.8	-1.5	-1.7	-3.5	13.8
JCI	4837.8	-2.0	-3.5	-7.4	-7.4
KLCI	1722.2	-0.7	-1.0	-5.0	-2.2
KOSPI	2042.3	-0.5	-1.1	-3.0	6.6
Nikkei 225	20387.8	-0.1	-0.3	3.3	16.8
SET	1501.9	-0.4	-0.4	-0.7	0.3
TWSE	9259.5	-0.5	-1.2	-3.3	-0.5
BDI	656	2.2	7.5	3.5	-16.1
CPO (RM/mt)	2250	-1.8	-2.1	2.6	-2.1
Nymex Crude	60	0.1	-0.9	-0.2	11.8

Indonesia: Infrastructure Strategy

MOF's Expectation: Infrastructure realisation expected in 2H15.
Budget Realisation: Historically, 40% of the government's infrastructure budget is realised in Q4.
Tax Policy: Lower corporate and income taxes require parliamentary approval.
Buy Recommendations: WSKT, PTPP, INTP, BBNI, INDF, ROTI, and TELE.

Malaysia: Corporate Results

SapuraKencana (SAKP MK):
- Recommendation: BUY.
- Price: RM2.42.
- Target: RM2.80.
- Reason: Modest upside as share price is equivalent to the US$50/bbl Brent range.
SP Setia (SPSB MK):
- Recommendation: HOLD.
- Price: RM3.38.
- Target: RM3.50.
- Reason: Earnings boosted by higher-than-expected margin from Melbourne project in 2QFY15.

Singapore: Property Sector

Regulatory Relaxation: All signs indicate potential regulatory easing in the property sector.

Top Picks (BUY)

Beijing Capital: Target HK$12.30, Potential upside +41.1%.
ICBC: Target HK$7.80, Potential upside +19.6%.
Bank BJB: Target HK$1,300.00, Potential upside +45.3%.
Maybank: Target HK$10.30, Potential upside +12.3%.
DBS: Target HK$25.08, Potential upside +20.9%.
Pacific Radiance: Target HK$0.99, Potential upside +90.4%.
Krung Thai Bank: Target HK$21.50, Potential upside +20.8%.
Sino Thai Engr: Target HK$25.00, Potential upside +5.5%.

Stock Impact and Earnings Revisions

Brilliance Auto:
- Cut 2015 sales growth assumption from 6% to 0.5%.
- Cut 2015 net profit forecast by 14%.
- Earnings estimates for 2016 and 2017 remain at Rmb6.25b and Rmb7.5b.
Huaneng Renewables:
- No earnings revision.
- Maintained BUY recommendation.

Risks

Downside Risk: Economic slowdown or credit tightening in China could impact sales.
Upside Risk: Improved premium car market and higher profit contribution from BMW Auto Finance.

Valuation and Recommendation

Brilliance Auto:
- Upgrade: From SELL to HOLD.
- Target Price: HK$12.00.
- Valuation: 10x 2015F PE and 7x 2016F PE are attractive compared to historical averages.
Huaneng Renewables:
- Maintained BUY.
- Target Price: HK$3.90.
- Upside: +17.5%.
- Valuation: 14x 2016F PE and 10.7x 2015F PE.

Key Financials (Brilliance Auto)

Metric	2014	2015F	2016F	2017F
Net Turnover (Rmbm)	5,515	5,779	5,779	5,779
EBITDA (Rmbm)	(181)	(129)	(117)	(114)
Operating Profit	(320)	(279)	(267)	(264)
Net Profit (Rmbm)	5,403	4,600	6,250	7,500
EPS (fen)	107.5	91.5	124.4	149.2
PE (x)	8.2	9.6	7.1	5.9
P/B (x)	2.6	2.1	1.7	1.3
Dividend Yield (%)	1.0	1.2	1.7	2.0

Key Financials (Huaneng Renewables)

Metric	2014	2015F	2016F	2017F
Net Turnover (Rmbm)	6,318.7	8,911.3	10,454.8	12,090.9
EBITDA (Rmbm)	5,616.1	7,403.6	8,698.2	10,174.7
Operating Profit (Rmbm)	3,345.8	4,797.1	6,185.7	7,744.5
Net Profit (Rmbm)	1,121.0	1,853.4	2,415.9	3,173.2
EPS (fen)	12.4	19.0	24.8	32.5
PE (x)	21.5	14.0	10.7	8.2
P/B (x)	1.6	1.5	1.3	1.2
EV/EBITDA (x)	13.3	10.1	8.6	7.3
Net Margin (%)	17.7	20.8	23.1	26.2

Analysts

Ken Lee (Brilliance Auto)
- Contact: +852 2236 6760, ken.lee@uobkayhian.com.hk
Yan Shi, Ying Ying Tang (Huaneng Renewables)
- Contact: +8621 5404 7225 ext 804 / 819

Conclusion

The report highlights the mixed performance across different regions and sectors, with particular focus on China's automotive and renewable energy industries. While Brilliance Auto faces short-term challenges due to declining sales and margin pressures, the company is expected to recover in 2016 with new model launches. Huaneng Renewables, on the other hand, shows strong earnings recovery and is recommended as a BUY with a positive outlook on long-term growth and policy support. The document also notes potential opportunities in Indonesia's infrastructure development and Malaysia's corporate performance.

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