20150609-大华继显-地区研究报告_13页_1mb

报告摘要

Regional Morning Notes Summary - 09 June 2015

Core Content Overview

This document provides a summary of regional market insights and investment recommendations for various countries, including Singapore, China, Indonesia, Malaysia, and Thailand, focusing on economic data, sector updates, and stock performance.

Key Stories

Singapore

Harvest Time (Page 8): A selective approach is advised due to limited upside potential for stocks relative to the year-end FSSTI target of 3,660. The market is expected to experience more volatility and rising interest rates.

China

Economics - Trade (Page 2): Exports improved slightly in May 15, with a 2.5% yoy decline, better than the market expectation of 4.4%. Imports fell sharply by 17.6% yoy, significantly below the forecast of 10.0%, leading to a surge in trade surplus to USD 59.5b.
Key Market Exports:
- US: USD 35.82b (+7.8% yoy)
- EU: USD 28.87b (-6.9% yoy)
- Japan: USD 11.01b (-8.1% yoy)
Import Trends:
- Iron Ores: -53.3% yoy
- Crude Oil: -50.3% yoy
- Import prices rose slightly for crude oil (USD 429.20/tonne vs USD 400.60/tonne), but total import value still fell due to volume decline.

Investment Recommendations

Top Picks

Company	Ticker	Recommendation	Target Price	Pot. +/-
Beijing Capital	694 HK	BUY	12.30	39.8
ICBC	1398 HK	BUY	7.80	16.6
Bank BJB	BJBR J	BUY	1,300.00	46.9
Maybank	MAY MK	BUY	10.30	11.6
DBS	DBS SP	BUY	25.08	24.9
Pacific Radiance	PACRA SP	BUY	0.99	85.0
Krong Thai Bank	KTB TB	BUY	27.00	49.2
Sino Thai Engr	STEC TB	BUY	25.00	9.6

Sell Recommendation

Company	Ticker	Recommendation	Target Price	Pot. +/-
UMWH Holdings	UMWH MK	SELL	9.00	-14.0

Key Assumptions

Country/Region	GDP (yoy) 2013	GDP (yoy) 2014	GDP (yoy) 2015F
US	2.2	2.4	2.9
Euro Zone	-0.5	0.9	1.3
Japan	1.6	-0.1	1.0
Singapore	4.4	2.9	2.9
Malaysia	4.7	6.0	5.0
Thailand	2.8	0.9	2.7
Indonesia	5.6	5.0	5.0
Hong Kong	2.9	3.5	3.7
China	7.7	7.2	7.0

Indicator	2014 Value	2015F Value	2016F Value
Brent (US$/bbl)	99.45	65	70
CPO (US$/mt)	722	765	788
BDI	1,101	1,300	1,400

Indonesia: Total Bangun Persada (TOTL IJ)

Key Highlights

Performance: Outperformed in new order bookings, with a 51% realisation rate in May 15, which is among the highest in the construction sector.
New Contracts:
- 2Q15: Rp1.25t (4.5x more than 1Q15)
- 2015 target: Rp3.0t
Valuation: Attractively valued at 13.3x 2016E PE, lower than historical 19.3x PE and industry average 15.2x PE.
Profitability:
- Gross margin: 10%
- Net margin: 5%
Key Clients: Repeat orders from RALS, APLN, DILD, ASRI, BSDE, and Kompas Group.
Project Pipeline: Focused on premium high-rise buildings, with a revenue recognition rate expected to be 5–10% lower than regular buildings (35%) in 2015, rising to 75–80% in the second year.

Malaysia: Construction Sector

Sector Update

Mega Projects: Expected to see RM110b worth of projects up for bidding in 2H15–16, including MRT Line 2, LRT Line 3, WCE, and Pan Borneo Highway.
Newsflow: Intensification of project announcements is expected, especially with the 11th Malaysia Plan and the listing of Sunway Construction Group in July 15.
Top Pick: IJM Corporation (IJM MK) is recommended as OVERWEIGHT with a target price of RM7.90.
Valuation: Slightly above 5-year historical average, but still considered fair with ample liquidity.

Key Metrics

Indonesia - TOTL

PE (2016E): 13.3x
P/B (2014): 3.9x
Net Debt/(Cash) to Equity (2014): -80.8%
Interest Cover (2014): NA
ROE (2014): 21.1%

Malaysia - Construction Sector

Average Orderbook: RM1.6b–7.0b, representing 1.2–3.2x of 2014 revenues.
Earnings Visibility: Expected to remain strong for the next two years due to healthy orderbooks.
Sector Valuation: At 16.2x 2015 PE and 14.5x 2016 PE for IJM Corporation.

Analysts

Singapore: Chaoping Zhu
Email: chaoping@uobkayhian.com
Phone: +8621 5404 7225 ext. 822
Indonesia: Maria Renata
Email: mariarenata@uobkayhian.com
Phone: +6221 2993 3917
Malaysia: Malaysia Research Team
Email: research@uobkayhian.com
Phone: +603 2147 1988

Summary of Insights

China: Trade data shows improved exports and a sharp decline in imports, leading to a large trade surplus. This could support the RMB and reduce the need for RRR cuts. Fiscal expansion is expected to support domestic demand.
Singapore: A selective strategy is recommended, with anticipation of volatility and rising interest rates.
Indonesia: TOTL is highlighted for strong order bookings and attractive valuation. Its focus on high-quality projects provides a competitive edge.
Malaysia: Construction activity is expected to intensify with several mega projects and the listing of Sunway Construction Group. IJM Corporation is the top pick due to its exposure to major projects and strategic assets.
Thailand: The automobile sector is recovering but remains fragile.

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