Regional Morning Notes
Tuesday, October 30, 2012
KEY STORY
Regional
Container Shipping Sector Page 3
Turnaround becoming clearer. Upgrade to OVERWEIGHT.
Key Indices
REGIONAL Sector
Container Shipping Sector Page 3
Turnaround becoming clearer. Upgrade to OVERWEIGHT.
CHINA Sector
Property Page 5
China Property Weekly – Last week’s sales appear to be stabilising.
Results
China Merchants Bank (3968 HK/SELL/HK$14.92/Target: HK$14.00) Page 7
| | Prev Close | 1D % | 1W % | 1M % | YTD % |
DJIA | 13107.2 | 0.0 | (1.8) | (2.5) | 7.3 |
S&P 500 | 1411.9 | (0.1) | (1.5) | (2.0) | 12.3 |
FTSE 100 | 5795.1 | (0.2) | (1.5) | 0.9 | 4.0 |
AS30 | 4499.4 | 0.1 | (1.4) | 2.1 | 9.4 |
CSI 300 | 2235.9 | (0.5) | (4.5) | (2.5) | (4.7) |
FSSTI | 3029.6 | (0.9) | (0.6) | (1.0) | 14.5 |
HSCEI | 10546.2 | 0.9 | (1.3) | 7.3 | 6.1 |
HSI | 21511.1 | (0.2) | (0.2) | 3.2 | 16.7 |
JCI | 4331.4 | (0.2) | 0.0 | 1.6 | 13.3 |
KLCI | 1672.6 | 0.0 | 0.6 | 2.2 | 9.3 |
KOSPI | 1891.5 | 0.0 | (2.6) | (5.2) | 3.6 |
Nikkei 225 | 8929.3 | (0.0) | (0.9) | 0.7 | 5.6 |
SET | 1279.6 | (0.2) | (2.2) | (1.5) | 24.8 |
TWSE | 7091.7 | (0.6) | (3.8) | (8.1) | 0.3 |
BDI | 1048 | (0.1) | 1.1 | 36.8 | (39.7) |
| CPO (RM/mt) Nymex Crude (US$/bbl) | 2392 85 | 1.0 (0.3) | 3.0 (1.6) | (1.7) (7.5) | (24.3) (13.7) |
Source: Bloomberg
Top BUYs/SELLs
Current Target Pot
3Q12: Weakening fundamentals despite earnings beating estimate.
China Southern Airlines (1055 HK/BUY/HK$3.67/Target: HK$4.71) Page 10
3Q12: Net profit soars 1,600% qoq, while operating margin remains stable.
China Telecom (728 HK/HOLD/HK$4.57/Target: HK$5.10) Page 13
3Q12: Results in line; iPhone5 launch could pressure 4Q12 earnings.
Dongfang Electric Corporation Limited Page 16
(1072 HK/HOLD/HK$12.54/Target: HK$15.00)
3Q12: Earnings at risk. Downgrade to HOLD.
Zhaojin Mining (1818 HK/HOLD/HK$13.08/HK$14.70) Page 19
3Q12: Taking profit on the back of in-line 3Q12 results.
INDONESIA R
Company Ticker Price Price +/- (lcy) (lcy) (%)
Top BUYs
China Mobile 941 HK 85.90 100.00 16.4
Kunlun Energy 135 HK 13.92 16.80 20.7
Sinopharm 1099 HK 25.00 28.20 12.8
Multi-Purpose Hldgs MPU MK 3.64 4.20 15.4
DBS | DBS SP | 13.90 | 19.45 | 39.9 |
Krung Thai Bank | KTB TB | 18.00 | 24.00 | 33.3 |
PTT | PTT TB | 316.00 | 405.00 | 28.2 |
Top SELLs | | | | |
China Merchants Hldgs 144 HK | 25.45 | 19.60 | (23.0) |
Tiger Airways TGR SP | 0.74 | 0.51 | (30.6) |
Key Assumptions
2011 2012F 2013F GDP (% yoy)
esults US | 1.7 | 1.5 | 1.5 |
Euro Zone | 1.4 | (0.5) | 0.4 |
Astra Agro Lestari (AALI IJ/BUY/Rp20,650/Target: Rp23,500) Page 22 Japan | (0.8) | 2.0 | 1.5 |
9M12: Net profit drops 10% | yoy | but | grows | 23% | qoq. | Expect | CPO | Singapore Malaysia | 4.9 5.1 | 2.0 5.0 | 3.0 4.7 |
production to peak in 4Q12. | | | | | | | | Thailand Indonesia | 0.1 6.5 | 6.0 6.1 | 3.4 6.3 |
Bank Central Asia (BBCA IJ/BUY/Rp8,100/Target: Rp9,400) Page 25
3Q12: Gradual qoq improvement in NIM on robust loan growth. Maintain
BUY.
MALAYSIA Sector
Consumer Page 28
Competitors will eventually follow BAT in raising prices by 20 sen/pack, which should positively impact JTI (M)’s bottom-line.
SINGAPORE Sector
Property Page 30
Demand side industrial measures ahead?
Results
Eu Yan Sang International (EYSAN SP/SELL/S$0.64/Target: S$0.49) Page 32
1QFY13: No positive catalyst in sight.
Starhill Global REIT (SGREIT SP/BUY/S$0.79/Target: S$0.92) Page 35
3Q12: Wisma Atria continues to sparkle.
Hong Kong 5.0 1.5 3.5
China 9.3 7.6 8.0
2011 2012F 2013F
WTI (US$/bbl) 97.5 102 111
Aluminium (US$/mt) 2,420 1,993 1,963
Copper (US$/mt) 8,851 7,865 8,225
Gold Price London (US$/ounce) 1,568 1,645 1,775
Iron Ore (USc/dmtu) 168 126 128
CPO (US$/mt) 1,025 1,030 1,110
BDI 1,548 1,700 1,800
Source: Bloomberg, UOB Kay Hian
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