20160329-大华继显-Regional_Morning_Notes_38页_2mb
报告摘要
Regional Morning Notes Summary - 29 March 2016
Core Content
The document provides a detailed summary of market insights and analysis for various regions, including China, Indonesia, Malaysia, Singapore, and Thailand, with a focus on the power sector in China and the results of several listed companies.
Main Points
China - Power Sector
- Policy Impact: The National Energy Administration (NEA) issued policies to slow down new coal-fired power plant construction and promote direct supply to the industry. These measures aim to reduce overcapacity and transition the electricity sector to a more market-driven system.
- Market Weight: Maintain MARKET WEIGHT on the power sector due to attractive dividend yields and stable returns.
- Direct Supply: Direct supply is expected to increase, forming 15% of total power output in 2015 and potentially reaching 85% by 2020. This strategy is considered safer for industry players compared to price bidding, which could lead to significant earnings deterioration.
- Utilisation Hours: Average thermal equipment utilisation hours dropped to 4,329 in 2015, expected to fall further to near 4,000 hours in 2016, indicating a severe overcapacity issue.
- Sector Picks:
- Huaneng Power (902 HK): BUY with a target price of HK$9.40, offering a higher yield.
- Dongfang Electric (1072 HK): SELL with a target price of HK$4.00.
- Shanghai Electric (2727 HK): SELL with a target price of HK$2.50.
- Great Wall Motor (2333 HK): SELL with a target price of HK$5.00.
Company Results - Brilliance Auto (1114 HK)
- 2015 Performance: Net profit declined 35% yoy to Rmb3,495m, but recovered in 4Q15. Sales growth in 4Q15 reached 11% yoy, driven by a low base and recovery in sales.
- 4Q15 Earnings: BBA, the sole profit contributor, saw a 50% yoy increase in net profit to Rmb680m.
- 2016 Outlook: Management expects high-single-digit sales growth, and Brilliance maintains a BUY rating with a target price of HK$8.50.
- New Models: The 2-series and all-new X1 are expected to be launched in 2016, with the 1-series and 5-series in 2017 and X3 in 2018.
- Earnings Forecast: Net profit is forecasted to increase to Rmb3.58b in 2016 and Rmb5.42b in 2018, with a 20% upside to the current price.
Key Financials
- Net Profit: Rmb3,495m in 2015, Rmb3,578m in 2016, Rmb4,483m in 2017, and Rmb5,419m in 2018.
- EPS: Rmb0.695 in 2015, Rmb0.712 in 2016, Rmb0.892 in 2017, and Rmb1.078 in 2018.
- PE Ratio: 8.3x in 2015, 8.7x in 2016, 7.0x in 2017, and 5.8x in 2018.
- P/B Ratio: 1.5x in 2015, 1.4x in 2016, 1.2x in 2017, and 1.0x in 2018.
- Dividend Yield: 1.6% in 2016, expected to rise to 2.5% in 2018.
Other Regions
- Indonesia: Indosat (ISAT IJ) is recommended to BUY with a target price of Rp7,380.
- Malaysia: VS Industry (VSI MK) is recommended to BUY with a target price of RM1.60. The recent stake in SML could be a catalyst for its stock.
- Singapore: Innovalues (IP SP) is recommended to BUY with a target price of S$1.06. Positive feedback from a recent marketing trip supports this recommendation.
- Thailand: National broadband policy boosts sentiment for network contractors.
Key Indices
| Index | Prev Close | 1D % | 1W % | 1M % | YTD % |
|---|---|---|---|---|---|
| DJIA | 17535.4 | 0.1 | (0.4) | 5.0 | 0.6 |
| S&P 500 | 2037.1 | 0.1 | (0.6) | 4.4 | (0.3) |
| FTSE 100 | 6106.5 | (1.5) | (1.5) | 1.6 | (2.2) |
| AS30 | 5151.6 | (1.0) | (1.4) | 4.2 | (3.6) |
| CSI 300 | 3169.7 | (0.9) | (2.5) | 10.2 | (15.0) |
| FSSTI | 2830.3 | (0.6) | (2.6) | 6.1 | (1.8) |
| HSCEI | 8701.1 | (1.9) | (0.8) | 10.5 | (9.9) |
| HSI | 20345.6 | (1.3) | (0.8) | 7.7 | (7.2) |
| JCI | 4773.6 | (1.1) | (2.3) | 0.1 | 3.9 |
| KLCI | 1702.4 | (0.1) | (0.9) | 2.9 | 0.6 |
| KOSPI | 1982.5 | (0.1) | (0.4) | 3.4 | 1.1 |
| Nikkei 225 | 17134.4 | 0.8 | 2.4 | 6.9 | (10.0) |
| SET | 1389.0 | (0.4) | (0.3) | 4.3 | 7.8 |
| TWSE | 8690.5 | (0.2) | (1.4) | 3.3 | 4.2 |
Key Assumptions
| Region | GDP (yoy) | 2015F | 2016F | 2017F |
|---|---|---|---|---|
| US | 2.4 | 2.4 | 2.5 | - |
| Euro Zone | 0.9 | 1.6 | 1.7 | - |
| Japan | 0.0 | 0.5 | 1.0 | - |
| Singapore | 3.3 | 2.0 | 2.7 | - |
| Malaysia | 6.0 | 5.0 | 4.2 | - |
| Thailand | 0.8 | 2.8 | 3.2 | - |
| Indonesia | 5.0 | 4.8 | 5.0 | - |
| China | 7.3 | 6.5 | 6.7 | - |
Corporate Events
- Hup Seng Industries Berhad Luncheon: Kuala Lumpur, 29 Mar
- Coolpad Group Corporate Roadshow: Hong Kong, 30 Mar
- Wenzhou Kangning Hospital Roadshow: Shanghai, 31 Mar
- Concord New Energy Roadshow: Hong Kong, 31 Mar
- Red Star Macalline Roadshow: Shanghai, 31 Mar
- China Resources Gas Luncheon: Hong Kong, 1 Apr
- Nirvana Asia Corporate Roadshow: Singapore, 5 Apr
- TCL Multimedia Roadshow: Hong Kong, 5 Apr
- MicroPort Scientific Corporation Roadshow: Hong Kong, 7 Apr
- Shenzhen Investment Corporate Roadshow: Taipei, 19 Apr - 20 Apr
Analysts
- Yan Shi: +8621 5404 7225 ext. 804, yan.shi@uobkayhian.com
- Daniel Yang: +852 2236 6706, daniel.yang@uobkayhian.com.hk
- Ken Lee: +852 2236 6760, ken.lee@uobkayhian.com.hk
- Sophie Yu: +852 2826 1392, sophie.yu@uobkayhian.com.hk
Summary
The report highlights the Chinese government's efforts to manage coal-fired power capacity and promote direct supply to ensure a healthier and more market-driven power sector. These policies are expected to reduce overcapacity and improve long-term profitability. Brilliance Auto's 2015 results were in line with expectations, with a recovery in 4Q15, and the company is recommended to BUY with a target price of HK$8.50. Other companies such as Huaneng Power are highlighted for their strong dividend yields and potential for recovery. The report also includes key financials and market indices for various regions, providing a comprehensive overview of the current market situation.
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