20150922-大和证券-Asia_Pacific_Daily_29页_2mb

Asia Pacific Daily Summary - Daiwa Capital Markets

Core Content

This document provides a comprehensive overview of Daiwa Capital Markets' investment analysis and research updates for various sectors and companies in the Asia-Pacific region, with a focus on the Singapore Oil Services Sector and other relevant financial data. It outlines sector performance, company-specific insights, valuation analysis, and investment recommendations.

Main Sectors and Key Points

Singapore Oil Services Sector

• Sector Outlook: The sector is not yet indicating a bottom, with oil prices and E&P spending still weak. Oversupply is a key issue that needs to be resolved for a sustainable earnings recovery.
• Investment Recommendations:
  • Ezion Holdings (EZI SP): Buy rating, with a revised 12-month target price of SGD0.940 (previously SGD1.240), showing an upside of 31.5%.
  • Pacific Radiance (PACRA SP): Hold rating, with a revised target price of SGD0.320 (previously SGD0.400), showing a downside of 4.5%.
  • Ezra Holdings (EZRA SP): Underperform rating, with a revised target price of SGD0.116 (previously SGD0.140), showing a downside of 6.5%.
• Catalysts:
  • Decline in demand for offshore support vessels (OSVs) due to accelerated MODU scrapping.
  • Subsea construction faces intense competition with a book-to-bill ratio expected below 1.0x in 2015.
  • Ezion's liftboat market remains strong due to its 100% contracted fleet and oil companies' commitment to opex spending.

Key Stock Calls

Other Research Highlights

• Goodbaby International (1086 HK):
  • Rating: Buy
  • Analyst: Carlton Lai
  • Key Points: Strong integration of CYBEX and Evenflo brands, expected to drive revenue and cost synergies. EPS growth forecasted at 254% YoY in 2015E and 28-47% in 2016-17E.
  • New Target Price: HKD4.10 (from HKD3.90), based on revised 2016E EPS and a 15x PER (previously 16x PER).
• Lafarge Malaysia (LMC MK):
  • Rating: Hold
  • Analyst: Sharifah Farah
  • Key Points: Merging with Holcim, with a Hold rating.
• Indonesia Retail:
  • Analyst: Bagus Adi Yoga Prawira
  • Key Points: General retail sector analysis, with Hero Supermarket (HERO IJ) receiving a Reduce rating.
• Korea Cosmetics Sector:
  • Analyst: Iris Park
  • Key Points: Positive news is flooding in.

Macro Research

• US Data Review:
  • Analyst: Michael Moran
  • Focus: Existing home sales.
• Asia Tech Sector:
  • Analyst: Rick Hsu
  • Focus: Rumors of Dialog Semi acquiring Atmel, with no near-term impact but long-term concerns.
• Regional Indices:
  • Performance: Declines in TPX, HSCEI, HSI, TWSE, and others, with positive EPS growth expected in some regions.
  • PER and EPS Growth:
    • TPX: PER 13.9x, EPS growth 20.4% (15E), 8.1% (16E)
    • HSCEI: PER 6.2x, EPS growth 3.1% (15E), 5.2% (16E)
    • HSI: PER 10.3x, EPS growth (1.5)% (15E), 7.0% (16E)
    • KOSPI: PER 10.8x, EPS growth 33.0% (15E), 7.7% (16E)
    • TWSE: PER 12.4x, EPS growth 4.7% (15E), 5.9% (16E)
    • SENSEX: PER 18.8x, EPS growth 11.4% (15E), 19.8% (16E)
    • FBMKLCI: PER 16.0x, EPS growth (2.5)% (15E), 9.7% (16E)
    • SET: PER 13.9x, EPS growth 8.6% (15E), 12.7% (16E)
    • PCOMP: PER 19.5x, EPS growth 8.4% (15E), 11.9% (16E)
    • JCI: PER 13.9x, EPS growth (3.5)% (15E), 12.6% (16E)

Investment Conference and Events

• Daiwa Investment Conference:
  • Date: 10-13 November 2015, Venue: Hong Kong
• Daiwa Asian Events:
  • 28-29 Sep: Daiwa ASEAN Conference - Daiwa-AffinHwang: Best of Malaysia Tokyo 2015
  • 30 Sep: Daiwa ASEAN Conference - Daiwa-AffinHwang: Malaysia Corporate Day
  • 6 Oct: Daiwa ASEAN Conference - Daiwa-Bahana-IDX: Best of Indonesia 2015
  • 8-9 Oct: Daiwa ASEAN Conference - Daiwa-Bahana-IDX: Best of Indonesia 2015
  • 21-22 Oct: SM Group Corporate Day Tokyo 2015
  • 10-13 Nov: Daiwa Investment Conference Hong Kong 2015
  • 29 Feb-4 Mar 2016: Daiwa Investment Conference Tokyo 2016

Company Roadshows

• 21-25 Sep: L’Arc Macau (Not Listed), Stella International (1836 HK)
• 22-23 Sep: Thai Union Frozen Products Pcl (TUF TB)
• 24-25 Sep: CITIC Telecom (1883 HK)
• 25 Sep: NagaCorp (3918 HK)
• 29-30 Sep: Central Plaza Hotel PCL (CENTEL TB)
• 7-8 Oct: PTT PCL (PTT TB)
• 13-14 Oct: CITIC Telecom (1883 HK), CALC (1368 HK), Yongda Auto (3669 HK), Xstep (1368 HK)
• 21-22 Oct: SM Investments/SM Prime (SM PM/SMPH PM)
• 4-6 Nov: CITIC Telecom (1883 HK)
• 9 Nov: HKEx (388 HK)

Financial Highlights

Ezon Holdings (EZI SP)

• 12-month range: 0.550–1.910 SGD
• Market Cap: USD0.80bn
• 3m Avg Daily Turnover: USD10.22m
• Shares Outstanding: 1,579m
• Major Shareholder: Chew Thiam Keng (14.2%)
• EPS Forecast Revisions:
  • 2015E: Core EPS (FD) change of -10.3%
  • 2016E: Core EPS (FD) change of -3.2%
  • 2017E: Core EPS (FD) change of -29.7%
• Valuation Method: Changed from PER to SOTP, with a revised 12-month target price of SGD0.940.
• Key Risks: Further delays in asset deployment, which could impact utilisation and margins.

Financial Summary (USD)

Key Ratios (USD)

Summary of Key Assumptions

• Contract Wins (USDm): Expected to be 0 for 2015E-2017E, due to no new contracts anticipated.
• LiftBoats/Service Rigs Additions: Expected to be 9 in 2015E, 6 in 2016E, and 0 in 2017E.
• Utilisation Rates:
  • Bareboat: 90.0%
  • Time Charter: 75.0%
• EPS Forecast Revisions:
  • 2015E: -12.3% YoY
  • 2016E: +63.1% YoY
  • 2017E: -19.9% YoY
• Key Risks: Delayed asset deployment, continued low utilisation, and macroeconomic uncertainty.

Conclusion

The report highlights the ongoing challenges in the Singapore Oil Services Sector, emphasizing the need for addressing oversupply before a sustainable recovery. Ezion Holdings is positioned as the most resilient player with a Buy rating and revised target price, while Pacific Radiance and Ezra Holdings are viewed as Hold and Underperform, respectively. Goodbaby International is highlighted as a Buy with strong potential for growth due to its recent acquisitions and brand repositioning. Overall, the report underscores the importance of sector fundamentals and macroeconomic trends in shaping investment decisions.