20141028-杰富瑞-PrimeTime_Asia_16页_362kb

Asia Research Summary

Core Content

This document provides a detailed analysis of various Asian companies across different sectors, including Property, Transport & Logistics, Metals & Mining, and Banks. It includes key takeaways, ratings, price targets, and earnings expectations for each company, highlighting investment opportunities and challenges.

Main Points

Hong Kong Property

• Key Takeaway: Hong Kong property performance is uninspiring, with low volatility expected to continue.
• Companies Mentioned:
  • Agung Podomoro Land (APLN IJ): Earnings lowered due to slow 9M14 performance. Maintain Buy with revised price target.
  • Ourgame (6899 HK): Strong MAU and ARPPU growth. Maintain Buy with price target of HK$5.30.
  • Digital China (861 HK): Valuation remains attractive. Maintain Buy with price target of HK$9.
  • China Intl Marine Containers (2039 HK): Strong 3Q14 performance. Maintain Buy with price target of HK$20.50.
  • CSPC (1093 HK): Maintain Buy with price target of HK$7.70.

Transport & Logistics

• Key Takeaway: Capesize rates rebounded sharply, but smaller-class rates remained subdued. Tanker rates were seasonally strong. SCFI index was flat.
• Companies Mentioned:
  • SUMCO (3436 JP): Upgraded to Buy, expecting price hikes in 2016. Price target increased.
  • Shin-Etsu Chemical (4063 JP): Raised FY3/17 forecasts due to expected wafer price hikes. Maintain Buy with price target of ¥8,600.
  • GS Yuasa (6674 JP): Maintain Buy rating. Expect lithium-ion battery business to become profitable.
  • DMG Mori Seiki (6141 JP): Maintain Buy with price target of ¥1,800. Positive outlook on orders and synergies.
  • Canon Inc. (7751 JP): Maintain Hold. Weak SLR sales are structural, and the stock underperformed.

Metals & Mining

Coal

• Key Takeaway: Coal prices have fallen and are unlikely to recover due to demand collapse and flattening cost curves.
• Companies Mentioned:
  • Yanzhou Coal Mining (1171 HK): Earnings inflated through accounting maneuvers. Maintain UNDERPERFORM with price target of HK$2.50.

Other Metals & Mining

• Key Takeaway: Price hikes and margin improvements are expected for some companies.
• Companies Mentioned:
  • Lotte Chemical (011170 KS): Strong 3Q14 results. Maintain Buy with price target of KRW200,000.
  • Kia Motors (000270 KS): New car effect is expected to drive earnings. Maintain Buy with price target of KRW73,000.
  • SK C&C (034730 KS): Price target increased due to growing confidence in core IT services. Maintain Buy with price target of KRW335,000.
  • Hyundai Mobis (012330 KS): Solid 3Q14 results, expect a rebound in 4Q14. Maintain Buy with price target of KRW330,000.
  • Hyundai Wia (011210 KS): Operating profit fell short, but expected to rise in 4Q14. Maintain Buy with price target of KRW270,000.
  • Hana Financial Group (086790 KS): Net profit in line with estimates. Maintain Buy with price target of KRW51,000.
  • KB Financial Group (105560 KS): Strong 3Q14 results. Maintain Buy with price target of KRW46,500.

India

Diversified Industrials

• Key Takeaway: Economic recovery is broadening with project announcements. Activity Index growth at c5%.
• Companies Mentioned:
  • Ashok Leyland (AL IN): Best way to play the recovery in the Indian heavy truck market. Maintain Buy with price target of INR53.70.

Asian Paints (APNT IN)

• Key Takeaway: 2QFY15 results below expectations due to poor margins. Decorative paint demand is steady. Maintain UNDERPERFORM with price target of INR540.00.

Banks

• Key Takeaway: Expect a lacklustre quarter for banks, with net profit decline QoQ and YoY growth. Focus on trade finance, wealth management, and asset quality.
• Companies Mentioned:
  • DBS & UOB: Maintain Buy.
  • Mapletree Commercial Trust (MCT SP): Growth from office portfolio and small asset enhancement. Maintain Hold with price target of SGD1.31.

Key Information

Earnings Highlights

• Yanzhou Coal Mining: Earnings inflated via accounting.
• SUMCO: Expected price hike in 2016.
• Shin-Etsu Chemical: Raised forecasts due to wafer price hikes.
• Lotte Chemical: 3Q14 operating profit exceeded expectations.
• Kia Motors: New car effect expected to improve earnings in 2015.
• Hyundai Mobis: Solid 3Q14 results, expect rebound in 4Q14.
• Hana Financial Group: Net profit in line with estimates.
• KB Financial Group: Strong 3Q14 results, new chairman selected.

Valuation & Outlook

• Ourgame: Strong MAU and ARPPU growth, but price target revised.
• Digital China: Attractive valuation with growth potential.
• CSPC: At a slight premium to peers.
• GS Yuasa: High multiple in the Auto Parts sector.
• DMG Mori Seiki: Preferred over Okuma in the machine tool subsector.
• Mapletree Commercial Trust: Slowing growth and premium valuation.

Market Dynamics

• HK Property: Weak demand and rising supply threaten performance.
• HK Interest Rates: Expected to be clearer following FOMC meeting.
• Yen Depreciation: Benefited SUMCO and Shin-Etsu Chemical.
• Macro Concerns: May lead to share price weakness but provide investment opportunities.

Summary of Ratings and Price Targets

Conclusion

The document outlines a mixed outlook across Asian markets, with some companies showing strong performance and others facing challenges. Investors are advised to focus on companies with strong fundamentals, improving margins, and positive outlooks, such as Ourgame, Digital China, and Kia Motors. Conversely, caution is recommended for companies like Yanzhou Coal Mining and Nestle (M) Berhad, which face structural issues and overvaluation.