20160204-大华继显-Regional_Morning_Notes_35页_2mb

报告摘要

Regional Morning Notes Summary - 04 February 2016

Core Content

This document provides a summary of stock analysis for various companies in China, Indonesia, Malaysia, and Singapore, including earnings updates, valuation changes, and key financial metrics. It also includes insights into market indices and corporate events for the region.

Key Regions and Companies

China

Daqin Railway (601006 CH)
- Recommendation: Downgraded to SELL
- Target Price: Rmb6.00
- Reasons:
  - A 16% drop in 2016 earnings due to a Rmb0.01/tonne-km reduction in coal transport tariff.
  - 6% decline in total cargo volume for 2016, driven by weak coal demand and policy shifts.
  - Despite a 5.5% dividend yield, the stock is considered less defensive due to ongoing coal demand challenges.
- Financials:
  - Net profit expected to fall from Rmb14,485m in 2015 to Rmb10,909m in 2016 and Rmb10,526m in 2017.
  - EBITDA margin drops from 41.1% in 2015 to 36.0% in 2016.
  - Operating profit expected to decline from Rmb16,670m in 2015 to Rmb12,175m in 2016.
- Valuation:
  - PE ratio increases to 9.2x in 2016, up from 6.9x in 2015.
  - P/B ratio drops to 1.1x in 2016, down from 1.2x in 2015.
  - EV/EBITDA ratio rises to 5.0x in 2016, up from 4.0x in 2015.
Poly Real Estate (600048 CH)
- Recommendation: BUY
- Target Price: Rmb11.72
- Reasons:
  - Solid fundamentals support valuation recovery amid policy stimulus.
  - Strong net margin and good cash flow position.
Geely Auto (175 HK)
- Recommendation: BUY (Maintained)
- Target Price: HK$4.10
- Reasons:
  - A brief sales slowdown in January 2016 due to the expiry of purchase subsidies and New Emgrand's performance.
  - New models like New Vision, GC9, and New King Kong showed strong sales growth.
  - Expect sales momentum to improve after the Boyu SUV model launch in March 2016.
- Financials:
  - Net profit expected to rise from Rmb2,431m in 2015 to Rmb3,046m in 2016 and Rmb3,305m in 2017.
  - Net margin declines from 9.3% in 2015 to 8.5% in 2016.
  - EPS is projected to increase from Rmb27.6 in 2015 to Rmb34.6 in 2016 and Rmb37.6 in 2017.
- Valuation:
  - PE ratio drops to 7.3x in 2016, below the historical mean of 11x.

Indonesia

Bank Rakyat Indonesia (BBRI IJ)
- Recommendation: HOLD
- Target Price: Rp12,000
- Reasons:
  - 4Q15 earnings met expectations.
  - Challenging year ahead due to micro strategy shift to KUR.

Malaysia

Malaysia Marine and Heavy Engineering Holdings (MMHE MK)
- Recommendation: Upgraded to HOLD
- Reasons:
  - Core profit above expectations, excluding impairments.
  - Lean balance sheet and share price has factored in most risks.
Public Bank (PBK MK)
- Recommendation: HOLD
- Reasons:
  - Earnings lifted by revaluation gains and writebacks.
  - Core pre-provision operating profit grew 1.2% yoy.
Westports Holdings (WPORTS MK)
- Recommendation: SELL
- Target Price: RM3.30
- Reasons:
  - Profit in line with expectations.
  - Gateway contraction offset some gains from transshipment.

Singapore

Valuetronics Holdings (VALUE SP)
- Recommendation: BUY
- Target Price: S$0.52
- Reasons:
  - 95% of market cap backed by net cash and AFS financial assets.

Key Indices

Index	Prev Close	1D %	1W %	1M %	YTD %
DJIA	16336.7	1.1	2.5	-6.2	-6.2
S&P 500	1912.5	0.5	1.6	-6.4	-6.4
FTSE 100	5837.1	-1.4	-2.6	-6.5	-6.5
AS30	4930.8	-2.2	-1.4	-7.4	-7.7
CSI 300	2948.6	-0.4	0.6	-15.0	-21.0
FSSTI	2550.7	-1.1	0.2	-10.1	-11.5
HSI	18991.6	-2.3	-0.3	-11.0	-13.3
KLCI	1633.3	-1.2	0.1	-1.2	-3.5
Nikkei 225	17191.3	-3.2	0.2	-6.8	-9.7
BDI	303	-2.3	-10.1	-36.6	-36.6
CPO (RM/mt)	2368	0.7	2.8	7.6	7.6
Brent Crude	35	8.4	7.2	-4.8	-4.8

Top Picks

BUY

Beijing Capital (694 HK): 6.62 → 11.40 (72.2% upside)
ICBC (1398 HK): 3.88 → 7.60 (95.9% upside)
Bank BJB (BJBR IJ): 895.00 → 1,140.00 (27.4% upside)
DiGi.Com (DIGI MK): 4.91 → 5.95 (21.2% upside)
Maybank (MAY MK): 8.44 → 10.00 (18.5% upside)
City Developments (CIT SP): 6.88 → 10.86 (57.8% upside)
DBS (DBS SP): 13.27 → 17.80 (34.1% upside)
Kasikornbank (KBANK TB): 164.00 → 192.00 (17.1% upside)
PTT (PTT TB): 234.00 → 340.00 (45.3% upside)

SELL

SIA Engineering (SIE SP): 3.45 → 3.36 (-2.6% upside)
UMWH Holdings (UMWH MK): 6.57 → 6.00 (-8.7% upside)
Sembcorp Marine (SMM SP): 1.44 → 0.88 (-38.9% upside)

Key Assumptions

Metric	2014	2015F	2016F	2017F
GDP (yoy)	2.4	2.5	2.5	2.5
China	7.3	6.5	6.7	6.7
Brent (Average)	53.60	54	62	62
CPO	2,168	2,500	2,600	2,600

Corporate Events

Singapore Airlines Luncheon: 5 Feb
Indo Telcos Analyst Presentation: 18 Feb
Asean Property and REITs Analyst Presentation: 18-19 Feb (Kuala Lumpur)
Greater China Strategy & the Auto Parts Sector Analyst Presentation: 22-23 Feb (Taipei)
Raffles Medical Group Luncheon: 23 Feb
Beijing Urban Construction Design & Development Roadshow: 23-24 Feb (Shanghai)

Key Risks and Opportunities

Daqin Railway:
- Sales and earnings are expected to remain weak due to coal demand and tariff cuts.
- Potential for valuation recovery if coal demand stabilizes.
Geely Auto:
- Sales may be affected by the expiry of purchase subsidies.
- New model launches in 2016 are expected to boost sales momentum.
Westports Holdings:
- Gateway contraction may limit growth potential despite transshipment gains.
Market Trends:
- Fear factor has brought valuations close to GFC troughs in Singapore.
- Policy stimulus in China may support real estate and infrastructure sectors.

Summary of Financial Highlights

Daqin Railway experienced a 16% decline in earnings due to tariff cuts and lower cargo volume.
Geely Auto saw a 2% yoy sales increase in January 2016, with a 12% mom growth, despite a -8% yoy decline in New Emgrand sales.
Poly Real Estate is viewed positively due to strong fundamentals and policy support.
Market indices across the region showed mixed performance, with some declining significantly from the previous year.
Corporate events are scheduled to provide insights into business strategies and market trends.