20160923-大华继显-REGIONAL_MORNING_NOTES_22页_1mb
报告摘要
Regional Morning Notes Summary
Date: Friday, 23 September 2016
Core Content Overview
This document provides an analysis of regional stock markets and company updates, focusing on Malaysia, China, Indonesia, and Singapore. It highlights key stocks, market indices, corporate events, and financial metrics for Nine Dragons Paper Holdings (2689 HK) and TUL (3933 HK).
Key Stories
Nine Dragons Paper Holdings (2689 HK)
- Action: Re-initiate coverage with a BUY recommendation and a target price of HK$9.00.
- Reason: The company benefits from industry consolidation in China, leading to margin recovery and improved profitability.
- Performance:
- FY16 core net profit more than doubled to Rmb2.83b, despite a Rmb1.77b forex loss.
- Gross margin rose to 18.3% in FY16, and EBIT margin increased to 13.5%.
- Future Outlook:
- Expect further price increases in 4Q16 to support margins.
- Sales are projected to grow at 3–5% annually in FY17–19, driven by consumption and e-commerce growth.
- Capacity utilisation is expected to rise from 77% in 2015 to over 85% by 2018.
- Financial Metrics:
- Net profit (adj.) for FY16 is Rmb2.83b.
- EBITDA for FY16 is Rmb6.26b.
- Net profit is expected to grow to Rmb3.08b, Rmb3.40b, and Rmb3.69b in FY17–19.
- Dividend yield is projected to reach around 3% in the next couple of years.
- Net debt-to-equity is forecast to decrease from 84% in FY16 to 53% in FY19.
- Valuation:
- Trading at 10x FY17 PE, which is 20% below its five-year historical average.
- Based on 12x FY17F PE, the target price of HK$9.00 is justified.
TUL (3933 HK)
- Action: Maintain BUY recommendation with a target price of HK$5.00.
- Reason: The company is expected to launch third-generation insulin glargine soon, following CFDA's re-launch of the innovative drug approval process.
- Performance:
- FY16 net profit (rep./act.) is HK$103.7m, with a net margin of 1.4%.
- FY16 net profit (adj.) is HK$183.8m.
- Future Outlook:
- Management expects sales to grow in FY17–19, driven by further tender wins and hospital penetration.
- The insulin glargine market is projected to reach Rmb10b in 2018, with TUL potentially capturing Rmb1.5b–2.0b in sales, at a net margin of 25–30%.
- Financial Metrics:
- Net profit (adj.) for FY16 is HK$183.8m.
- EBITDA for FY16 is HK$1.42b.
- Net profit is expected to grow to HK$323.5m, HK$483.4m in FY17–18.
- Net debt-to-equity is projected to decrease from 58.2% in FY16 to 40.4% in FY19.
- Valuation:
- Trading at HK$4.28, with an upside of +16.8% to the target price of HK$5.00.
- Based on 21.5x FY17F PE, which is in line with its historical valuation.
Key Indices
| Index | Prev Close | 1D % | 1W % | 1M % | YTD % |
|---|---|---|---|---|---|
| DJIA | 18392.5 | 0.5 | 1.0 | (0.7) | 5.6 |
| S&P 500 | 2177.2 | 0.6 | 1.4 | (0.3) | 6.5 |
| FTSE 100 | 6911.4 | 1.1 | 2.7 | 1.2 | 10.7 |
| AS30 | 5466.3 | 0.7 | 2.4 | (3.2) | 2.3 |
| CSI 300 | 3291.1 | 0.7 | 0.9 | (1.5) | (11.8) |
| FSSTI | 2846.1 | (0.2) | 1.4 | (0.2) | (1.3) |
| HSCEI | 9893.8 | 0.5 | 3.7 | 3.2 | 2.4 |
| HSI | 23759.8 | 0.4 | 2.5 | 3.3 | 8.4 |
| JCI | 5380.3 | 0.7 | 2.2 | (0.7) | 17.1 |
| KLCI | 1669.7 | 0.7 | 0.5 | (0.8) | (1.4) |
| KOSPI | 2049.7 | 0.7 | 2.9 | (0.0) | 4.5 |
| Nikkei 225 | 16807.6 | 1.9 | 0.5 | 1.3 | (11.7) |
| SET | 1506.0 | 1.3 | 2.9 | (2.2) | 16.9 |
| TWSE | 9235.3 | 0.1 | 3.3 | 2.3 | 10.8 |
| BDI | 937 | 3.8 | 22.6 | 36.4 | 96.0 |
| CPO (RM/ml) | 2907 | (0.2) | 3.2 | 1.6 | 32.1 |
| Brent Crude | 48 | 1.8 | 2.3 | (3.1) | 27.8 |
Corporate Events
- Sembcorp Industries Corp Roadshow: Canada, 26–27 Sep
- Regional Financial and Telco Sector Analyst Presentation: UK/Europe, 26–30 Sep
- Xingda In'l Group Meeting: Hong Kong, 29 Sep
- Cityneon Corporate Roadshow: Taipei, 29–30 Sep
- Ricoh Site Visit: Kuala Lumpur, 5 Oct
- Xstep International Holdings Roadshow: Taipei (7 Oct), Kuala Lumpur (15 Nov)
- Metro Pacific Investments Roadshow: Canada, 24–25 Nov
Key Assumptions
| Metric | 2015 | 2016F | 2017F | 2018F | 2019F |
|---|---|---|---|---|---|
| GDP (% yoy) | 2.4 | 2.1 | 1.8 | 2.7 | 3.2 |
| Brent (Average) | 53.60 | 42 | 54 | 54 | 54 |
| CPO (RM/mt) | 2,168 | 2,500 | 2,600 | 2,600 | 2,600 |
Key Metrics
| Metric | 2016 | 2017F | 2018F | 2019F |
|---|---|---|---|---|
| EBITDA margin | 19.5 | 21.2 | 21.4 | 21.4 |
| Pre-tax margin | 5.2 | 12.3 | 13.0 | 13.5 |
| Net margin | 8.8 | 9.0 | 9.5 | 9.9 |
| ROE | 11.0 | 11.3 | 11.4 | 11.4 |
| Net debt-to-equity | 83.8 | 79.0 | 59.7 | 53.0 |
| Interest cover | 2.2 | 4.7 | 5.3 | 6.0 |
Summary
- Nine Dragons Paper Holdings (2689 HK): Strong margin recovery due to industry consolidation and product price increases, leading to a BUY recommendation with a target price of HK$9.00. Expected to benefit from improved supply-demand balance and continued cost control.
- TUL (3933 HK): Expected to launch insulin glargine soon, with a BUY recommendation and a target price of HK$5.00. The company has a strong position in the antibiotics market and is projected to see sales growth in the coming years.
- Market Outlook: Regional markets show mixed performance, with some indices showing positive growth while others are flat or declining. The document suggests that re-rating is expected for stocks that are showing earnings recovery.
- Valuation: Nine Dragons Paper is undervalued relative to its historical average, offering an attractive dividend yield. TUL is also undervalued with an upside of +16.8%.
- Financial Health: Both companies are showing signs of improved profitability and are on a path to reduced leverage and increased cash flow.
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