20141024-大华继显-Regional_Morning_Notes_35页_1mb

Regional Morning Notes Summary

Core Content Overview

This document provides a summary of company results and market updates for various regions including China, Hong Kong, Indonesia, Malaysia, Singapore, and Thailand, along with key indices, top picks, and valuation metrics. It includes detailed financial data, performance analysis, and analyst recommendations for specific companies such as China Construction Bank (CCB), China Unicom (CU), Bank Mandiri, and others. The report also outlines corporate events and key assumptions for future performance.

Main Points by Region

China

• China Construction Bank (939 HK)
  • 3Q14 Results: Solid results with mild NIM expansion, sector-leading capital ratio, and good asset quality. However, earnings growth slowed to 5% yoy due to weaker loans and fees growth.
  • Key Metrics:
    • Net interest income: 12.8% yoy growth (9M14)
    • Net fees and comms: 4.6% yoy growth (9M14), but 15.8% qoq decline (3Q14)
    • Net profit: 7.8% yoy growth (9M14), 4.9% yoy growth (3Q14), but 3% below consensus
  • Valuation: Trading at 0.9x 2014F P/B with a 6.2% dividend yield.
  • Recommendation: Maintain BUY with a target price of HK$6.65.
  • Outlook: Expect continued earnings growth pressure due to economic slowdown and increasing NPLs.

Hong Kong

• L'Occitane (973 HK)
  • Update: Slight sequential sales improvement, but ongoing store refurbishment program limits margin growth.
  • Recommendation: Maintain HOLD with a target price of HK$18.50.

Indonesia

• Bank Mandiri (BMRI IJ)
  • 3Q14 Results: Stable NPL but lower NIM.
  • Recommendation: Maintain BUY with a target price of Rp12,500.

Malaysia

• Public Bank (PBK MK)
  • 9M14 Results: Earnings in line with expectations.
  • Comment: The group's execution track record has been largely factored into its valuations.
  • Recommendation: Maintain HOLD with a target price of RM19.30.

Singapore

• Ascendas REIT (AREIT SP)
  • 2QFY15 Results: Occupancies bottoming out.
  • Recommendation: Maintain BUY with a target price of S$2.73.

Thailand

• Banking Sector
  • 3Q14 Results: Earnings continued to grow by 6% yoy and 3% qoq, driven by resilient NIM and better fee growth.
• Krung Thai Bank (KTB TB)
  • 3Q14 Results: Earnings rose 3% yoy, mainly due to falling provisions.
  • Recommendation: Maintain BUY with a target price of Bt30.00.
• Total Access Communication (DTAC TB)
  • 3Q14 Results: Results below expectations.
  • Recommendation: Maintain BUY with a target price of Bt118.00.
• Ticon Industrial Connection (TICON TB)
  • Update: Expect strong outlook for 4Q14 and 2015, supported by asset sales and increased rental demand.
  • Recommendation: Maintain HOLD with a target price of Bt19.20.

Key Indices

Top Picks

Key Assumptions

Corporate Events

• ENN Energy Holdings Luncheon: Hong Kong, 29 Oct
• Raffles Medical Group Luncheon: Singapore, 30 Oct
• China Aviation Sector Analyst Presentation:
  • Singapore, 31 Oct
  • Kuala Lumpur, 3–4 Nov
  • Hong Kong, 5 Nov
  • Taipei, 6–7 Nov
• Alarm Sutera Realty Corporate Roadshow: Taipei, 10–11 Nov

China Construction Bank (CCB) Summary

• Company Description: Second-largest bank in China, offering full range of commercial banking services.
• Stock Data:
  • GICS Sector: Financials
  • Bloomberg Ticker: 939 HK
  • Shares Issued (m): 240,417
  • Market Cap (HK$m): 1,402,936.7
  • Market Cap (US$m): 180,851.4
  • 3-mth Avg Daily Turnover (US$m): 149.1
• Price Performance:
  • 52-week high/low: HK$6.29 / HK$4.92
  • 1mth: 0.2%
  • 3mth: -1.9%
  • 6mth: 5.4%
  • 1yr: -4.1%
  • YTD: -3.8%
• Valuation:
  • P/BV: 1.0x (2013), 0.9x (2014F), 0.8x (2015F), 0.7x (2016F)
  • Dividend Yield: 6.8% (2013), 6.2% (2014F), 6.6% (2015F), 7.0% (2016F)
  • Adjusted P/E: 5.2x (2013), 4.9x (2014F), 4.6x (2015F), 4.3x (2016F)
• Recommendation: Maintain BUY with a target price of HK$6.65.
• Analysts: Edmond Law, Terrance Liu

China Unicom (762 HK) Summary

• Company Description: Provides telecommunications services in PRC.
• Stock Data:
  • GICS Sector: Telecommunication Services
  • Bloomberg Ticker: 762 HK
  • Shares Issued (m): 23,912.2
  • Market Cap (HK$m): 261,121.1
  • Market Cap (US$m): 33,660.9
  • 3-mth Avg Daily Turnover (US$m): 56.1
• Price Performance:
  • 52-week high/low: HK$14.14 / HK$9.17
  • 1mth: -11.5%
  • 3mth: -14.2%
  • 6mth: 9.2%
  • 1yr: -9.2%
  • YTD: -5.9%
• 3Q14 Results:
  • Turnover: Rmb65,770m, down 13.3% yoy and 10.0% qoq
  • EBITDA: Rmb24,315m, up 2.6% qoq and 11.5% yoy
  • Net Profit: Rmb3,874m, up 26.7% yoy
• Key Financials:
  • Net turnover: 295,038m (2013), 283,322m (2014F), 297,336m (2015F), 315,135m (2016F)
  • EBITDA: 72,659m (2013), 83,963m (2014F), 95,947m (2015F), 102,565m (2016F)
  • Net profit: Rmb7,096m (2013), Rmb10,408m (2014F), Rmb13,600m (2015F), Rmb16,189m (2016F)
• Valuation:
  • P/B: 1.0x (2013), 0.9x (2014F), 0.9x (2015F), 0.8x (2016F)
  • EV/EBITDA: 4.5x (2013), 3.9x (2014F), 3.4x (2015F), 3.2x (2016F)
• Recommendation: Maintain HOLD with a target price of HK$12.30.
• Analyst: Victor Yip

Summary of Concerns and Outlook

• China Unicom: Concerns over weak mobile trends and slow 4G network development. Risk of losing competitiveness to China Mobile.
• China Construction Bank: Expected to maintain strong asset quality and capital position, but earnings growth may remain limited due to economic slowdown and NPLs.
• Overall Outlook: While some companies like CCB and Bank Mandiri show resilience, others like Great Wall Motor underperformed. The report emphasizes the importance of cost control and NPL management for long-term performance.