20180814-大华继显-Regional_Morning_Notes_32页_1mb

报告摘要

Regional Morning Notes Summary - 14 August 2018

Core Content Overview

This document provides a summary of financial results and market insights for several Asian markets including China, Indonesia, Malaysia, Singapore, and Thailand, along with key financial metrics and stock recommendations. It also includes corporate events and a detailed analysis of Li Ning's performance and strategy for 2018.

Main Points

China

Li Ning (2331 HK):
- 1H18 revenue grew by 17.9% yoy, driven by the growth of its kids business (LN Young) and higher replenishment rates.
- E-commerce continued to outperform with a 30% yoy growth.
- Gross profit margin expanded by 1.0ppt, EBIT margin by 1.2ppt, and net profit margin by 1.0ppt.
- The company is on track to meet its FY18 margin guidance.
- Maintain a HOLD rating with a target price of HK$8.50 (down from HK$8.80), based on a DCF valuation.
- The CFO mentioned the possibility of restarting dividend payments in Mar 2019, with a potential significant net cash balance of Rmb3.5b.
- Li Ning Young's store count increased from 173 at end-2017 to 631 at 1H18, with management aiming for 750 by end-2018.

Indonesia

JCI (Jakarta Composite Index):
- 1H18 earnings were below expectations, with a 12.1% yoy growth.
- Large caps and small caps underperformed, while small caps showed the highest yoy EPS growth.
- The retail, poultry, and energy sectors outperformed.
- The JCI index target for 2018 was reduced to 6,600 from 7,100.
- Top picks include MAPI, LPPF, GGRM, ASII, and JPFA.

Malaysia

Alliance Bank Malaysia (AFG MK):
- Stronger-than-expected loan growth was offset by higher provisions due to the continued impact of the commercial property GIL.
- Maintain a HOLD rating with a target price of RM4.30.

Singapore

First Resources (FR SP):
- 2Q18 net profit reached US$32m, up 29% qoq and 36% yoy, due to better-than-expected downstream operations.
- Maintain a HOLD rating with a target price of S$1.60.
Wilmar International (WIL SP):
- 2Q18 core net profit reached US$352m, up 92% qoq and >100% yoy, due to better PBT margins from tropical oils and oilseeds & grains.
- Recommend BUY with a target price of S$3.90.

Thailand

Banpu (BANPU TB):
- 2Q18 core profit was above expectations, with positive momentum expected into 2H18.
- Recommend BUY with a target price of Bt30.00.
PTT (PTT TB):
- 2Q18 results were in line with forecasts.
- Recommend BUY with a target price of Bt65.00, as valuation is expected to re-rate on PTTOR listing.
Sino-Thai Engineering & Construction (STEC TB):
- Good results from high-margin power plant projects.
- Recommend BUY with a target price of Bt26.50.
Pruksa Holding (PSH TB):
- New strategy is starting to bear fruit.
- Recommend BUY with a target price of Bt24.00.

Key Financial Metrics (Li Ning)

Metric	2017	2018F	2019F	2020F
Revenue	8,874	10,401	11,683	12,967
Gross Profit	515	703	903	1,115
EBIT	446	788	1,088	1,400
Net Profit	515	703	903	1,115
EPS (Fen)	29.0	29.3	37.6	46.5
PE (x)	34.7	25.4	19.8	16.0
P/B (x)	3.5	3.1	2.7	2.3
EV/EBITDA (x)	16.2	11.2	8.8	7.2
Net Margin (%)	5.8	6.8	7.7	8.6
ROE (%)	11.4	13.0	14.5	15.4

Key Indices Performance

Index	Prev Close	1D %	1W %	1M %	YTD %
DJIA	25187.7	(0.5)	(1.2)	0.7	1.9
S&P 500	2821.9	(0.4)	(1.0)	0.7	5.5
FTSE 100	7642.5	(0.3)	(0.3)	(0.3)	(0.6)
AS30	6341.3	(0.4)	(0.3)	(0.2)	2.8
CSI 300	3390.3	(0.4)	3.6	(2.9)	(15.9)
FSSTI	3245.3	(1.2)	(0.6)	(0.5)	(4.6)
HSI	27936.6	(1.5)	0.4	(2.1)	(6.6)
JCI	5861.2	(3.6)	(3.9)	(1.4)	(7.8)
KLCI	1783.3	(1.2)	0.2	3.6	(0.7)
KOSPI	2248.5	(1.5)	(1.7)	(2.7)	(8.9)
Nikkei 225	21857.4	(2.0)	(2.9)	(3.3)	(4.0)
SET	1706.0	(1.0)	(0.4)	3.8	(2.7)
TWSE	10748.9	(2.1)	(2.5)	(1.1)	1.0
BDI	1691	(0.2)	(4.6)	1.5	23.8
CPO (RM/ml)	2207	0.1	2.2	(1.6)	(7.7)
Brent Crude (US$/bbl)	73	(0.3)	(1.5)	(3.6)	8.6

Corporate Events

Analyst Presentation on Greater China 2H18 Strategy and Outlook: 15-16 Aug (Kuala Lumpur/Bangkok)
Group Dinner Meeting with China Traditional Chinese Medicine Holdings (570 HK): 17 Aug (Hong Kong)
Group Meeting with Xstep International Holdings (1368 HK): 24 Aug (Hong Kong)
Group Meeting with YiChang HEC ChangJiang Pharmaceutical (1558 HK): 28 Aug (Hong Kong)
UOB Kay Hian Asian Gems Conference: 9-10 Oct (Singapore)
UOB Kay Hian Annual Regional 1H2019 Strategy Conference: 13 Nov (Kuala Lumpur)

Strategy and Recommendations

Top Buys in Indonesia: MAPI, LPPF, GGRM, ASII, JPFA
Key Sector Recommendations: Consumer, construction, poultry, telecommunications, and banking (BBNI)
Potential Upside (%):
- MAPI: 19.05%
- LPPF: 110.20%
- GGRM: 13.33%
- ASII: 29.58%
- PTPP: 91.71%
- ACST: 44.00%
- ADHI: 75.55%
- WIKA: 18.38%
- JPFA: 43.28%
- TOWR: 62.96%
- MAIN: -33.46%
- CPIN: 1.12%
- BBNI: 33.11%

Summary of Key Insights

Li Ning's 1H18 performance was strong, driven by LN Young and e-commerce growth.
The JCI underperformed with 1H18 earnings growth at 12.1% yoy, leading to a revised target of 6,600.
Wilmar International and First Resources showed strong earnings in 2Q18.
Malaysia's Alliance Bank faces upside risks from provisions due to commercial property issues.
Key sectors in Indonesia include consumer, construction, poultry, and telecommunications.
The report highlights the importance of e-commerce, brand image, and strategic expansion in driving growth and performance.

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