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报告摘要

Regional Morning Notes Summary - 20 July 2015

Core Content Overview

This document provides a detailed analysis of financial markets and specific companies across different regions, focusing on their performance, valuation, and potential for growth or decline. It includes updates on the banking sector in China, SKP Resources in Malaysia, Neptune Orient Lines (NOL) in Singapore, and the food sector in Thailand. Additionally, it outlines key indices, corporate events, and analyst recommendations.

Main Regions & Sectors

China

Banking Sector:
- The A-share market correction had limited impact on banks due to lower exposure and supportive policies.
- Policies such as the removal of LDR, granting of securities licences, and municipal bond swaps are expected to benefit banks.
- Banks are trading at attractive valuations (0.9x 2015F P/B).
- ICBC is highlighted as a top pick with a strong dividend yield and attractive valuation.
- Key Companies:
  - ICBC (694 HK): BUY, Target Price: HK$7.80, Potential Upside: 36.7%
  - CCB (939 HK): BUY, Target Price: HK$8.90, Potential Upside: 37.1%
  - Bank BJB (BJBR J): HOLD, Target Price: JPY1,300.00, Potential Upside: 55.7%
  - Minsheng (1988 HK): BUY, Target Price: HK$13.30, Potential Upside: 22.8%

Malaysia

SKP Resources (SKP MK):
- Downgraded to HOLD due to most positive news being priced in.
- Trial production of handheld cordless vacuum cleaners began in early-July.
- The company has a new plant and is expected to benefit from Dyson's new product launches.
- Key Financials:
  - FY15 Net Profit: RM42.0m
  - FY16 Net Profit: RM92.3m
  - FY17 Net Profit: RM134.7m
  - Target Price: RM1.30
  - Dividend Yield: 4.3-4.6%
- Key Risks: Loss of Dyson orders, weak global macroeconomic environment.

Singapore

Neptune Orient Lines (NOL SP):
- Possibly up for sale, as Temasek is looking to divest non-strategic assets.
- Recent M&A transactions in the shipping sector suggest a valuation range of 4.4x to 10.9x EV/EBITDA.
- Implied valuation at 11.9x EV/EBITDA is S$0.89 per share.
- Key Financials:
  - FY15 Net Turnover: S$7,363m
  - FY16 Net Turnover: S$6,793m
  - FY17 Net Turnover: S$6,880m
  - FY15 EBITDA: S$450m
  - FY16 EBITDA: S$567m
  - FY17 EBITDA: S$679m
  - Target Price: S$1.08
  - Analyst Note: The sale is highly probable, and the company is being compared to Hapag-Lloyd's IPO valuation.

Key Indices

Index	Prev Close	1D %	1W %	1M %	YTD %
DJIA	18086.5	(0.2)	1.8	0.4	1.5
S&P 500	2126.6	0.1	2.4	0.8	3.3
FTSE 100	6775.1	(0.3)	1.5	1.0	3.2
AS30	5652.5	0.0	3.2	1.1	4.9
CSI 300	4151.5	3.9	1.1	(10.5)	17.5
FSSTI	3353.5	0.4	2.6	0.8	(0.3)
HSCEI	11850.1	0.9	(0.1)	(10.1)	(1.1)
HSI	25415.3	1.0	2.1	(5.0)	7.7
JCI	4869.8	(0.7)	(0.0)	(0.1)	(6.8)
KLCI	1726.7	(0.0)	1.5	(0.0)	(2.0)
KOSPI	2076.8	(0.5)	2.2	1.5	8.4
Nikkei 225	20650.9	0.2	4.4	2.4	18.3
SET	1479.3	(0.1)	(0.4)	(0.8)	(1.2)
TWSE	9046.0	0.0	1.5	(1.9)	(2.8)
BDI	1048	3.9	19.9	34.5	34.0
CPO (RM/mt)	2178	(1.4)	1.2	(3.4)	(5.2)
Nymex Crude (US$/bbl)	51	0.1	(2.4)	(14.5)	(4.4)

Key Assumptions

Country	GDP (% yoy) 2013	GDP (% yoy) 2014	GDP (% yoy) 2015F
US	2.2	2.4	2.9
Euro Zone	-0.5	0.9	1.3
Japan	1.6	-0.1	1.0
Singapore	4.4	2.9	2.9
Malaysia	4.7	6.0	5.0
Thailand	2.8	0.9	2.7
Indonesia	5.6	5.0	5.0
Hong Kong	2.9	3.5	3.7
China	7.7	7.2	7.0

Indicator	2014	2015F	2016F
Brent (US$/bbl)	99.45	61	72
CPO (US$/mt)	722	765	788

Corporate Events

Concord New Energy Teleconference: 16 July 2015

Key Financial Highlights

SKP Resources (SKP MK)

Stock Performance: RM1.45, Target Price: RM1.30
Upside: -10.3% (from previous target price RM1.20)
Earnings Forecast:
- FY16 Net Profit: RM92.3m
- FY17 Net Profit: RM134.7m
- FY18 Net Profit: RM143.3m
Valuation Metrics:
- PE (2015F): 53.4x
- PE (2016F): 37.3x
- P/B (2015F): 10.3x
- P/B (2016F): 6.3x
- EV/EBITDA (2015F): 22.8x
- EV/EBITDA (2016F): 10.5x
- EV/EBITDA (2017F): 7.4x
- EV/EBITDA (2018F): 6.8x
Dividend Yield: 4.3-4.6% (FY17-18)
Net Margin: 6.8% (FY15), 7.0% (FY16), 7.1% (FY17), 7.0% (FY18)

Analyst Recommendations

China Banking Sector

ICBC (1398 HK): BUY, Target Price: HK$7.80, Potential Upside: 36.7%
CCB (939 HK): BUY, Target Price: HK$8.90, Potential Upside: 37.1%
ABC (1288 HK): HOLD, Target Price: HK$4.50, Potential Upside: 12.0%
BOC (3988 HK): HOLD, Target Price: HK$5.50, Potential Upside: 12.0%
BoCom (3328 HK): HOLD, Target Price: HK$8.10, Potential Upside: 17.3%
CMB (3968 HK): HOLD, Target Price: HK$25.50, Potential Upside: 22.8%
Minsheng (1988 HK): BUY, Target Price: HK$13.30, Potential Upside: 22.8%

Malaysia

SKP Resources (SKP MK): Downgraded to HOLD due to overpricing and positive news already reflected in the stock.

Singapore

NOL (SP): Maintained BUY recommendation with a revised target price of S$1.08, implying a valuation of 11.9x EV/EBITDA.

Key Metrics

Metric	2015 (%)	2016F (%)	2017F (%)	2018F (%)
EBITDA margin	10.6	10.8	10.5	10.6
Pre-tax margin	9.3	9.4	9.4	9.3
Net margin	6.8	7.0	7.1	7.0
ROA	9.5	13.5	14.8	13.2
ROE	22.6	41.8	42.3	38.1
Debt to total capital	0.0	19.4	16.8	14.7
Debt to equity	0.0	24.1	20.2	17.2
Net debt/(cash) to equity	(52.4)	(51.9)	(66.6)	(75.0)
Interest cover (x)	n.a.	4,073.4	121.4	154.6

Summary

The document provides insights into the financial landscape of China, Malaysia, and Singapore, with a focus on the banking and manufacturing sectors. It highlights the potential for growth in banks due to supportive policies and the limited impact of the A-share market correction. SKP Resources is noted for its strong ties with Dyson, although it has been downgraded due to overvaluation. NOL is under consideration for sale, with its valuation estimated based on sector M&A trends. The overall sentiment is cautiously optimistic, with a focus on quality banks and potential re-rating catalysts for SKP.

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