20160314-大华继显-Regional_Morning_Notes_31页_1mb

报告摘要

Regional Morning Notes Summary

Core Content Overview

This document provides a comprehensive summary of economic and sectoral updates for various Asian markets, including China, Indonesia, Malaysia, Singapore, and Thailand, as of Monday, 14 March 2016. It also includes key indices, top picks, key assumptions, and corporate events. The focus is on economic activity, sector performance, and investment recommendations.

Main Points

China

Economic Activity

Fixed Asset Investment (FAI) increased by 10.2% yoy in 2M16, better than the market expectation of 9.3%.
Industrial Production (IP) growth declined to 5.4% yoy, below the consensus of 5.6%, indicating weak demand and overcapacity.
Retail Sales growth slowed to 10.2% yoy, compared to 11.1% yoy in Dec 15, with automobile sales declining sharply to 5.4% yoy.
Infrastructure investment (excluding power) grew by 15% yoy, though the growth was slower than 2015's 17.2%.
Property investment rose by 3% yoy, improving from 1% yoy in 2015, signaling a gradual recovery in demand.

Banking Sector

New loans and aggregate financing in February 2016 were lower than expectations, at Rmb727b and Rmb781b respectively.
Despite this, credit growth remained healthy at 30.0% yoy and 23.6% yoy, with M2 growth at 13.3%, in line with the government’s target.
The loan mix was still favorable, with a majority of long-term loans in both household and corporate segments.
Non-bank financing contributed minimally, with bank acceptances declining due to recent fraud cases.

Cement Sector

Cement output declined by 8.2% yoy in 2M16, partly due to a high base from the previous year.
Property new starts saw a 13.7% yoy increase, suggesting a gradual improvement in downstream demand.
Cement prices may rebound in Q2 2016, supported by government stimulus and a stronger sales season.
CR Cement (1313 HK) reported a 75.9% yoy drop in net profit, primarily due to lower ASP and forex losses. The company is expected to report weak results, but Anhui Conch (914 HK) and BBMG (2009 HK) are recommended for their resilience and strategic exposure.

Company Results

Guangzhou R&F (2777 HK) had no significant improvement in fundamentals in 2015, with a decline in gross margin and high net gearing ratio. The company is recommended to be Sold, with a target price of HK$6.02.

Key Indices

Index	Prev Close	1D %	1W %	1M %	YTD %
DJIA	17213.3	1.3	1.2	7.8	-1.2
S&P 500	2022.2	1.6	1.1	8.4	-1.1
FTSE 100	6139.8	1.7	-1.0	7.6	-1.6
AS30	5224.8	0.3	1.4	8.5	-2.2
CSI 300	3018.3	0.2	-2.4	1.8	-19.1
FSSTI	2828.9	0.7	-0.3	11.4	-1.9
HSCEI	8561.4	1.7	0.0	14.1	-11.4
HSI	20199.6	1.1	0.1	10.3	-7.8
JCI	4813.8	0.4	-0.6	2.1	4.8
KLCI	1696.5	0.3	0.2	3.2	0.2
KOSPI	1971.4	0.1	0.8	7.4	0.5
Nikkei 225	16938.9	0.5	-0.4	13.3	-11.0
SET	1393.4	1.0	1.0	9.2	8.2
TWSE	8706.1	0.5	0.7	8.0	4.4
BDI	388	1.0	11.2	33.3	-18.8
CPO (RM/mt)	2479	-0.2	2.1	1.9	12.7
Brent Crude (US$/bbl)	40	-0.2	-1.3	20.9	8.2

Top Picks

BUY: Beijing Capital (694 HK), ICBC (1398 HK), Bank BJB (BJBR IJ), WCT Holdings (WCTHG MK), City Developments (CIT SP), DBS (DBS SP)
SELL: Sapurakencana (SAKP MK), Sembcorp (SMM SP)

Key Assumptions

GDP Growth (yoy):
- US: 2.4 (2014), 2.5 (2015F), 2.5 (2016F)
- Euro Zone: 0.9 (2014), 1.5 (2015F), 1.7 (2016F)
- Japan: -0.1 (2014), 0.5 (2015F), 1.0 (2016F)
- Singapore: 2.9 (2014), 2.0 (2015F), 2.7 (2016F)
- Malaysia: 6.0 (2014), 4.9 (2015F), 4.8 (2016F)
- Thailand: 0.9 (2014), 2.7 (2015F), 3.2 (2016F)
- Indonesia: 5.0 (2014), 4.8 (2015F), 5.4 (2016F)
- Hong Kong: 2.5 (2014), 1.8 (2015F), 1.5 (2016F)
- China: 7.3 (2014), 6.5 (2015F), 6.7 (2016F)
Brent Crude (US$/bbl): 53.60 (2015), 42 (2016F), 54 (2017F)
CPO (RM/mt): 2,168 (2015), 2,500 (2016F), 2,600 (2017F)

Other Markets

Indonesia

Wijaya Karya (WIKA IJ): Earnings grew flat by 3% yoy in 2015, with waiting for more HSR project details.

Malaysia

A New Twist To The Central Bank Governorship?: MoF director general Mohd Irwan is expected to be the next BNM governor, a major surprise to the investment community.
Property: Recently hosted the management of TRX City at a group luncheon.
Rubber Gloves: Earnings improved 17% qoq due to the ringgit depreciation and softer raw material prices.

Singapore

Offshore & Marine: Global oil-service bellwethers; when the going gets tough, the tough get going.
Keppel Corp (KEP SP): Earnings update highlights the impact of Transocean's and Golar's deferrals.

Thailand

Banpu (BANPU TB): Capital raising is positive; recommend investors to take up rights and warrants.

Corporate Events

Event	Venue	Begin	Close
TCL Display Technology Roadshow	Hong Kong	14 Mar	14 Mar
TCL Display Technology Holdings Roadshow	Taipei	21 Mar	22 Mar
ASEAN Conference	Taiwan	22 Mar	23 Mar
Country Garden Roadshow	Kuala Lumpur	24 Mar	24 Mar
Wenzhou Kangning Hospital Roadshow	Shanghai	31 Mar	31 Mar

Analysts and Contacts

Chaoping Zhu:
- Email: chaoping@uobkayhian.com
- Phone: +8621 5404 7225 ext. 822
Edmond Law:
- Email: edmond.law@uobkayhian.com.hk
- Phone: +852 2826 4837
Jasmine Duan:
- Email: jasmine.duan@uobkayhian.com.hk
- Phone: +852 2826 1351
Johnson Hu, CFA:
- Email: johnsonhu@uobkayhian.com
- Phone: +86 21 5404 7225 ext 809

Summary of Key Recommendations

China:
- BUY: Anhui Conch (914 HK), BBMG (2009 HK)
- HOLD: CR Cement (1313 HK), Bank BJB (BJBR IJ), BoCom (3328 HK), etc.
- SELL: Guangzhou R&F (2777 HK)
Indonesia:
- HOLD: Wijaya Karya (WIKA IJ)
Malaysia:
- BUY: Banpu (BANPU TB)
Singapore:
- BUY: Keppel Corp (KEP SP)
Thailand:
- BUY: Banpu (BANPU TB)

Investment Outlook

Economic growth may face pressure due to ongoing overcapacity elimination and weak downstream demand, but fiscal and monetary stimulus are expected to continue.
Property and infrastructure are key drivers of demand recovery in China.
Cement sector is expected to consolidate in the short term but may see moderate price improvements in Q2.
Currency depreciation and lower raw material costs support earnings growth in certain sectors.
Investment community is closely watching for further policy support and project details in various sectors.