20151203-大华继显-Regional_Morning_Notes_18页_1mb
报告摘要
Regional Morning Notes Summary - 03 December 2015
Core Content Overview
This document provides a summary of market insights and analysis for various regions, with a focus on China's property sector and ENN Energy Holdings. It includes updates on company performance, sector trends, key indices, and financial metrics, along with analyst recommendations and market outlooks.
Main Points
China Property Sector
- Market Performance: Property stocks had a strong week, led by Vanke-A and Poly-A, with a 20% increase each, driven by market speculation about new policy easing measures.
- Policy Expectations: There are expectations for further credit and policy easing, especially tax credit grants for home loan repayments, following Chairman Xi's call for de-stocking and sector-specific development on 10 November.
- Historical Context: A similar tax deduction policy was implemented in 1998 in Shanghai to boost home sales, and it is expected to be effective again.
- 2015-2016 Outlook: The slow growth in property investment and new starts suggest the need for stronger supportive measures in 2016, including subsidies and lower deed tax.
- 1H16 Forecast: Sales growth in the first quarter of 2016 is expected to be strong due to a weak base from 2015.
- Sector Weighted Average: The sector's weighted average PE is 7.8x for 2015 and 6.5x for 2016, with a 31.3% upside potential for some stocks.
- Peer Comparison: Several companies, such as China Vanke and China Resources Land, are recommended as BUYs due to their strong fundamentals and growth potential.
- Analyst Preference: Analysts favor underdogs in low-tier cities, as well as companies like Vanke, COLI, and CR Land, and expect alpha plays from SOE reform.
ENN Energy Holdings (2688 HK)
- Performance Update: The company reported solid core earnings growth, with management indicating a rebound in natural gas (NG) sales volume and positive impact from the NG price cut starting in 2016.
- Recommendation: Maintain BUY with a new target price of HK$60.00, reflecting a 46.7% upside from the current price of HK$40.90.
- Earnings Forecast: The core earnings forecast for 2015 was trimmed by 3% due to slower-than-expected NG price cuts and potential forex losses. The core earnings CAGR is expected to be 18% for 2015-2017.
- LNG Development: ENN Energy is the second-largest LNG operator in China and is expected to see earnings contributions from its LNG business in 2016-2017, with a projected net profit of Rmb50m to Rmb200m.
- Debt Management: The company has reduced its US dollar debt exposure and is in talks with a local bank to repay the remaining debt in RMB, minimizing forex risk.
Key Indices
| Index | Previous Close | 1D % | 1W % | 1M % | YTD % |
|---|---|---|---|---|---|
| DJIA | 17729.7 | -0.9 | -0.5 | -0.6 | -0.5 |
| S&P 500 | 2079.5 | -1.1 | -0.5 | 1.2 | 1.0 |
| FTSE 100 | 6420.9 | 0.4 | 1.3 | 0.9 | -2.2 |
| AS30 | 5304.7 | -0.1 | 1.1 | 0.3 | -1.6 |
| CSI 300 | 3722.0 | 3.6 | -1.6 | 7.4 | 5.3 |
| FSSTI | 2883.6 | 0.5 | -0.3 | -3.9 | -14.3 |
| HSCEI | 10050.4 | 1.0 | -0.8 | -2.3 | -16.1 |
| HSI | 22479.7 | 0.4 | -0.1 | -0.4 | 4.8 |
| JCI | 4545.9 | -0.3 | -0.9 | 0.3 | -13.0 |
| KLCI | 1676.8 | -0.3 | -0.5 | 0.0 | -4.8 |
| KOSPI | 2009.3 | -0.7 | 0.0 | 1.9 | 4.9 |
| Nikkei 225 | 19938.1 | -0.4 | 0.5 | 6.7 | 14.3 |
| SET | 1339.5 | -1.3 | -3.0 | -5.2 | -10.6 |
| TWSE | 8457.4 | -0.1 | 0.8 | -2.9 | -9.1 |
| BDI | 590 | -1.3 | 8.1 | -16.4 | -24.6 |
| CPO (RM/mt) | 2124 | 1.6 | 2.4 | -0.9 | -7.6 |
| Brent Crude | 43 | -4.1 | -7.6 | -12.6 | -25.6 |
Corporate Events
- Red Star Macalline Roadshow: Shanghai, 7 Dec
- Singapore O&G Corporate Roadshow: Taipei, 8-9 Dec
- Singapore Strategy 2H15 Analyst Presentation: Taipei, 10-11 Dec
Key Financials (ENN Energy Holdings)
| Metric | 2015F (Rmbm) | 2016F (Rmbm) | 2017F (Rmbm) |
|---|---|---|---|
| Net turnover | 31,855 | 35,697 | 40,728 |
| EBITDA | 4,868 | 5,692 | 6,490 |
| Net profit (rep./act.) | 2,648 | 3,263 | 3,847 |
| Net profit (adj.) | 2,738 | 3,263 | 3,847 |
| EPS (fen) | 252.9 | 301.3 | 355.2 |
| PE (x) | 13.4 | 11.2 | 9.5 |
| P/B (x) | 2.6 | 2.2 | 1.9 |
| EV/EBITDA (x) | 6.8 | 5.8 | 5.1 |
| Dividend yield (%) | 2.2 | 2.7 | 3.2 |
| Net margin (%) | 8.3 | 9.1 | 9.4 |
| ROE (%) | 18.9 | 19.8 | 19.9 |
Analysts
- Edison Bian: +852 2236 6761, edison.bian@uobkayhian.com.hk
- Yan Shi: +8621 5404 7225 ext 804, yan.shi@uobkayhian.com
- Tang Ying Ying: +8621 5404 7225 ext 819, yingying@uobkayhian.com
Summary of Key Insights
- Property Sector in China: A "warm" winter for property stocks, with expectations of further policy easing, particularly in the form of tax credits for home loan repayments. Analysts maintain a MARKET WEIGHT rating, with a focus on large-cap picks like China Vanke and China Resources Land.
- ENN Energy Holdings: Maintains a BUY recommendation with a target price of HK$60.00, reflecting a 46.7% upside. The company is expected to benefit from the NG price cut and LNG development, with a focus on reducing forex risk through debt restructuring.
- Earnings and Growth Outlook: The core earnings are expected to grow at 17% in 2016, supported by stronger connection income and the impact of the NG price cut. The company is projected to have a 18% CAGR for core earnings from 2015 to 2017.
- Valuation: The company is currently trading at 11.2x 2016 PE, lower than historical averages, and is expected to trade at 16.3x 2016F PE with the new target price.
Conclusion
The document highlights the potential for policy-driven growth in China's property sector and the positive outlook for ENN Energy Holdings, emphasizing the importance of tax deductions, NG price cuts, and LNG development in supporting earnings and growth. Analysts recommend maintaining a BUY stance on ENN Energy due to its strong fundamentals and expected improvements in core earnings and debt management.
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