20170201-大华继显-Regional_Morning_Notes_14页_863kb

报告摘要

Regional Morning Notes Summary

Core Content Overview

This document provides a comprehensive update on financial market outlooks and investment recommendations for various regions and sectors, focusing on China, Indonesia, and Singapore. It includes analysis of stock performance, key indices, corporate events, sector updates, and company-specific financials.

Key Regions & Sectors

China

Automobile Sector:
- Market Outlook: Earnings momentum for China's automakers is expected to slow in 2017 due to declining automobile sales and the rollback of tax concessions.
- Top Picks: Geely and GAC are recommended for their strong product pipelines in SUVs and premium cars.
- Sell Recommendations: GWM and BYD are advised to be sold due to vulnerability to competition and subsidy cuts affecting electric vehicle (EV) sales.
- Market Drivers: Auto financing is a key growth driver, with the penetration rate expected to rise to 40% by 2018.
- EV Segment: EV sales growth is expected to drop significantly from over 50% in 2016 to 10% in 2017 due to subsidy cuts.

Indonesia

Bank Rakyat Indonesia (BBRI):
- Performance: 2016 results were in line with expectations, with a 3% yoy increase in net profit and no significant EPS upgrade for 2017.
- Valuation: Target price is Rp12,400, implying 2x 2017F P/B.
- Key Metrics:
  - Net interest income increased by 8.1% yoy in 4Q16.
  - Fee & commission income grew by 22.7% yoy.
  - Net profit for 2016 was Rp25,827 billion, with a 3% yoy increase.
  - NPL ratio improved to 2.1% in 2016, down from 2.2%.
  - Credit cost in 4Q16 was 2.2%, significantly lower than previous quarters.
- Risks: Regulatory risks and profitability pressures could persist. Loan growth is expected to slow in 2017.

Singapore

Wilmar International (WIL SP):
- Performance: 4Q16 results show a core net profit of US$430m-460m, up 32% yoy and 20% qoq.
- Recommendation: Sell recommendation with a target price of S$3.50.
- Supporting Factors: Sugar and oilseeds/grains operations are expected to drive profit growth. ADM's stake increase boosts investor confidence.

Key Indices

Index	Prev Close	1D %	1W %	1M %	YTD %
DJIA	19864.1	-0.5	-0.2	0.5	0.5
S&P 500	2278.9	-0.1	-0.1	1.8	1.8
FTSE 100	7099.2	-0.3	-0.7	-0.6	-0.6
AS30	5675.0	-0.7	0.1	-0.8	-0.8
CSI 300	3388.0	0.4	1.8	2.2	2.4
FSSTI	3046.8	-0.6	0.7	5.8	5.8
HSCEI	9804.1	-0.5	0.9	4.4	4.4
HSI	23360.8	-0.1	2.1	6.2	6.2
JCI	5294.1	-0.2	0.0	-0.0	-0.0
KLCI	1671.5	-0.9	0.0	1.8	1.8
KOSPI	2067.6	-0.8	0.1	2.0	2.0
Nikkei 225	19041.3	-1.7	1.3	-0.4	-0.4
SET	1577.3	-0.8	-0.1	2.2	2.2
BDI	816	-1.3	-7.9	-15.1	-15.1
CPO (RM/ml)	3300	-0.1	0.1	2.3	3.2
Brent Crude	56	0.9	0.5	-2.0	-2.0

Top Picks and Sell Recommendations

BUY Recommendations

Geely (175 HK): Target price HK$10.50, based on 10x 2017F PE. Strong product pipeline, including new SUV models and market share gains.
GAC (2238 HK): Target price HK$13.00, based on 9x 2017F PE. Strong sales of new SUV models under Trumpchi and joint ventures.
BAIC (1958 HK): Target price HK$12.50, based on 11x 2017F PE. Strong sales growth from Beijing Benz and narrowing losses in its self-owned brand.

SELL Recommendations

GWM (2333 HK): Target price HK$6.00, based on 7x 2017F PE. Vulnerable to competition in the mass-market SUV segment.
BYD (1211 HK): Target price HK$38.00, based on 22x 2017F PE. Diminished earnings outlook due to subsidy cuts affecting electric buses and PHEVs.

Key Assumptions

Region	GDP %yoy (2015)	GDP %yoy (2016F)	GDP %yoy (2017F)
US	2.6	1.7	2.7
Euro Zone	2.0	1.6	1.1
Japan	1.2	0.8	0.9
Singapore	2.0	1.4	1.8
Malaysia	5.0	4.2	4.5
Thailand	2.8	3.2	3.3
Indonesia	4.8	5.0	5.2
China	6.9	6.5	6.2

Corporate Events

PTT Exploration and Production Roadshow: Singapore, 6-7 Feb
Luncheon with Keppel T&T: Singapore, 10 Feb
Luncheon with Kim Loong Resources: Malaysia, 13 Feb
Tea Session with Valuetronics: Singapore, 13 Feb
SGX-UOB Kay Hian Corporate Day: Taipei, 21 Feb
UOB Kay Hian ASEAN Conference: Taipei, 22 Feb
Annual Plantation Outlook Seminar: Malaysia, 6 Mar

Sector Catalysts and Risks

Catalysts: Strong monthly automobile sales will positively impact stock prices.
Risks: Macro risks, including economic slowdowns and regulatory changes, could affect projections. EV segment is vulnerable to subsidy cuts.

Summary of Key Financials and Metrics

BBRI (Indonesia):
- Net Interest Income: Increased to Rp66,160 billion in 2016.
- Non-Interest Income: Grew to Rp16,166 billion in 2016.
- Net Profit (2016F): Rp25,827 billion, with a 3% yoy increase.
- EPS (2016F): 1,046.9 Rp.
- PE (2016F): 11.2x.
- P/B (2016F): 2.2x.
- Dividend Yield (2016F): 2.6%.
- ROE Tier 1 (2016F): 17.7%.
- NPL Ratio (2016F): 2.2%.
- Loan Loss Coverage (2016F): 165.5x.

Investment Strategy

BUY Geely for its strong product pipeline and secular growth potential.
BUY GAC for its growing SUV market share and joint venture performance.
BUY BAIC for its premium segment growth and high-margin product development.
SELL GWM due to its lack of core technological competitiveness.
SELL BYD due to the negative impact of subsidy cuts on its EV business.

Conclusion

The report highlights the mixed outlook for the automobile sector in China, with continued growth in SUV and premium segments despite overall slowing PV sales. BBRI in Indonesia is expected to maintain its performance with a stable NPL ratio and strong net interest income. Wilmar International in Singapore faces a sell recommendation due to potential overvaluation. The market remains cautious, with macroeconomic risks and regulatory changes as key concerns.

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