20170713-大华继显-Regional_Morning_Notes_21页_1mb

报告摘要

Regional Morning Notes Summary - 13 July 2017

Core Content Overview

This document provides a summary of financial insights and market updates for several Asian countries, including China, Indonesia, Malaysia, Singapore, Thailand, and others. It includes key financial events, sector updates, company-specific highlights, and investment recommendations.

Main Points by Region

China

National Financial Work Conference (5th):
- Scheduled for 14 July 2017, the conference is expected to focus on preventing financial risks and enhancing regulatory coordination.
- A new office for coordinating financial policies will be established under the PBOC, increasing its authority over CBRC, CIRC, and CSRC.
- The MPA framework will likely be strengthened to control off-balance sheet assets and cross-sector risks.
- Top Buys: CCB (China Construction Bank) and ICBC (Industrial and Commercial Bank of China) due to their strong CASA ratios and CET-1 CARs.
- Market Weight: Maintained.

Indonesia

Tunas Ridean (TURI IJ):
- 2017 is expected to be mediocre, but 2018 will be promising.
- The financial services division faces high NPLs, which will lead to one-off charges and lower earnings in 2017.
- The company is trading at 11x 2016 PE, which is 50%+ discount to ASII's valuation.
- Outlook: Unit sales are improving, and the company may expand into property.
- Risks: Continued heavy discounting, larger-than-expected write-downs, and lower insurance commission income.
- Stock Data: Market cap is Rp6,110.1, with 5,580.0 million shares issued.
- Analyst: Stevanus Juanda.

Malaysia

Technology Sector:
- The Edge For Tomorrow conference was well-attended, featuring 8 speakers, 8 corporates, and 5 exhibitors.
DiGi.Com (DIGI MK):
- 2Q17: Intense competition in the prepaid segment and higher depreciation and interest costs dragged down earnings.
- Recommendation: HOLD.
- Target Price: RM5.15.
- Share Price: RM4.90.

Singapore

Sembcorp Industries (SCI SP):
- 2Q17: Improved plant performance in India is expected to boost earnings.
- Recommendation: BUY.
- Target Price: S$3.66.
- Share Price: S$3.09.

Thailand

TISCO Financial Group (TISCO TB):
- 2Q17: Earnings up 25% yoy due to moderate top-line growth and a sharp drop in provisions.
- Recommendation: BUY.
- Target Price: Bt79.00.
- Share Price: Bt73.00.

Key Indices

Index	Previous Close	1D %	1W %	1M %	YTD %
DJIA	21532.1	0.6	0.3	1.0	9.0
S&P 500	2443.3	0.7	0.4	0.1	9.1
FTSE 100	7416.9	1.2	0.7	(1.1)	3.8
AS30	5717.7	(0.9)	(1.4)	(1.5)	(0.0)
CSI 300	3658.8	(0.3)	(0.0)	2.1	10.5
FSSTI	3208.9	(0.3)	(1.2)	(1.5)	11.4
HSCEI	10517.4	1.0	1.3	(0.1)	11.9
HSI	26043.6	0.6	2.0	0.7	18.4
JCI	5819.1	0.8	(0.1)	2.0	9.9
KLCI	1757.2	0.1	(0.6)	(1.5)	7.0
KOSPI	2391.8	(0.2)	0.1	0.7	18.0
Nikkei 225	20098.4	(0.5)	0.1	1.0	5.1
SET	1574.9	0.4	0.1	0.2	2.1
TWSE	10420.7	0.0	0.2	2.9	12.6
BDI	830	1.2	(2.0)	(4.6)	(13.6)
CPO (RM/mt)	2636	(1.1)	0.1	(2.1)	(17.6)
Brent Crude	48	0.5	(0.1)	(1.1)	(16.0)

Top Picks

BUY

Alibaba (BABA US):
- Current price: $149.00
- Target price: $173.00
- Potential gain: 16.1%
Beijing Ent. Water (371 HK):
- Current price: HK$6.07
- Target price: HK$7.60
- Potential gain: 25.2%
Telekomunikasi Indo (TLKM IJ):
- Current price: Rp4,620.00
- Target price: Rp5,000.00
- Potential gain: 8.2%
V.S. Industry (VSI MK):
- Current price: RM1.97
- Target price: RM2.40
- Potential gain: 21.8%
OCBC (OCBC SP):
- Current price: S$10.83
- Target price: S$13.00
- Potential gain: 20.0%
Siam Cement (SCC TB):
- Current price: Bt496.00
- Target price: Bt600.00
- Potential gain: 21.0%

SELL

Great Wall Motor (2333 HK):
- Current price: HK$10.30
- Target price: HK$6.00
- Potential decline: 41.7%
BoCom (3328 HK):
- Current price: HK$5.67
- Target price: HK$5.25
- Potential decline: 41.4%

Key Assumptions

Country/Region	2016 GDP (yoy)	2017F GDP (yoy)	2018F GDP (yoy)
US	1.6	2.5	2.5
Euro Zone	1.7	1.8	1.6
Japan	1.0	0.9	1.2
Singapore	2.0	2.4	2.5
Malaysia	4.2	5.0	4.9
Thailand	3.2	3.3	3.3
Indonesia	5.0	5.2	5.5
Hong Kong	1.9	2.0	2.0
China	6.7	6.3	6.3
Brent Crude	45	55	58
CPO (RM/mt)	2,653	2,600	2,500

Corporate Events

Lunaroon with United Overseas Bank:
- Location: Thailand
- Dates: 18 Jul
Roadshow with Citic Envirotech Ltd:
- Location: Taipei
- Dates: 18 Jul - 19 Jul
Analyst Marketing on Singapore Strategy & Small & Mid Caps:
- Location: Taipei
- Dates: 20 Jul - 21 Jul
Roadshow with Jacobson Pharma:
- Location: Shanghai
- Dates: 28 Jul
Visit to Sarawak Corridor of Renewable Energy:
- Companies Involved: Cahaya Mata Sarawak Holdings Bhd, Press Metal Bhd
- Dates: 1 Aug - 3 Aug
Roadshow with Top Glove Corporation:
- Location: US/Canada
- Dates: 5 Sep - 12 Sep

Sector Catalysts

China:
- Stabilisation in asset quality and NIM.
- Regulatory Focus: Preventing financial risks, enhancing coordination, and strengthening MPA.
Indonesia:
- TURI: Recovery in financial services in 2018, improving unit sales, and potential expansion into property.
- Competition: Intense in the auto segment, with Honda offering larger discounts than Toyota.
- Risks: Heavy discounting, NPL write-downs, and lower insurance commission income.

Valuation

TURI: Trading at 11x 2016 PE, which is 50%+ discount to ASII's 23.3x 2016 PE.
The discount is attributed to TURI's smaller market cap and ASII's greater diversification.

Analysts

Jonathan Koh, CFA:
- Contact: +65 6590 6620
- Email: jonathankoh@uobkayhian.com
Jasmine Duan:
- Contact: +852 2826 1351
- Email: jasmine.duan@uobkayhian.com.hk
Stevanus Juanda:
- Contact: +6221 2993 3845
- Email: stevanusjuanda@uobkayhian.com

Conclusion

The document outlines financial sector developments, investment recommendations, corporate events, and key indices for several Asian countries. It emphasizes the importance of regulatory reforms and market performance in shaping the financial landscape. TURI is highlighted as a value opportunity with potential for improvement in 2018, while Chinese SOE banks are recommended for their resilience and international potential.

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