Saturday, December 28, 2013


文: 李廷伟 (译:杨佳文) 2013年12月26日 企业摘要

在一定程度上,这些分析师的看法并没错。中国有许多厂商生产以Android作业系统运行的智能手机,而且价格低廉。相比之下,一台iPhone 5C就要价735美元,价格的差异相当大。

Westports - Extension of Port Concession (Kenanga)

Westports Holdings Bhd -
Price: RM2.54
Target Price: RM2.85
Extension of Port Concession

News  The Government of Malaysia (“GOM”) and Port Klang Authority (“PKA”) has agreed to extend the concession period of the privatisation agreement dated 25 July 1994 in which WPRTS has the right to develop and operate Westports for a period of 30 years until 31 Aug 2054.

 The extension is subject to the fulfilment of certain conditions :1) completion and reclamation of the land and incidental works for container terminal CT6 to CT9 on or before 1 Jan 2014 and 2) completion of construction works for CT6 to be fully operational on or before 1 Jan 2014.

Top Glove - Trying Times In China

Top Glove -
Target Price: MYR6.34
Price: MYR5.80
 Trying Times In China

Top Glove (TOPG)’s 1QFY14 net profit of MYR50.3m came in largely in line with our and consensus expectations,  making up 21.8% and 22.0% of  FY14  estimates  respectively.  The  global  shift  in  demand  towards nitrile gloves puts TOPG in a more challenging environment given that its capacity mix is skewed towards  the NR glove segment  (80:20). We reiterate our NEUTRAL call, with our FV unchanged at MYR6.34.

Hai-O - Strategy Shift To Take Time (RHB)

Hai-O -
Target Price: MYR2.70
Price: MYR2.62
Strategy Shift To Take Time

Hai-O’s 1HFY14 results were below consensus and our estimates. Sales and  net  earnings  softened  due  to  weaker  numbers  across  the  board. The group declared a 4 sen interim dividend for the quarter. We cut our FV to MYR2.70  (from MYR3.28) as we  lower  our earnings forecasts  on slowing  sales.  Downgrade  to  NEUTRAL  (from  Buy),  as  we  expect  flat performance going forward due to stiff competition.

AirAsia X - Staying Ahead Of The Pack

AirAsia X -
Target Price: MYR1.31
Price: MYR1.01
Staying Ahead Of The Pack

AAX has signed its single largest Airbus order of 25 aircraft, which will be  delivered  starting  2015.  Including  the  existing  firm  orders,  the purchase will boost  its  fleet  to  57  aircraft  by  2019.  The fleet  expansion will  support  AAX’s  ambition  to  become  the  region’s leading  long  haul low  cost  carrier.  We  keep  our  valuations  unchanged  and  maintain  our BUY recommendation and MYR1.31 FV.

Karex - Strengthening Its Lead (RHB)

Karex Bhd -
Target Price: MYR4.43
Price: MYR3.86
Strengthening Its Lead

After  our  recent  meeting  with  management,  we  raise  our  FY14F-15F earnings  forecasts  by  12-26%  as  we  become  more  upbeat  on  the company’s outlook. We continue to like Karex for its lead in the condom manufacturing  industry  and  strong  earnings  growth  spurred  by capacity  expansion.  Maintain  BUY, with  our FV  lifted  to  MYR4.43  (from MYR3.51).

Friday, December 27, 2013


Created 12/27/2013 - 18:02


八成內銀股價殘 低於每股資產淨值 短期難改善

八成內銀股價殘 低於每股資產淨值 短期難改善



XMH Holdings -Growth Slows As Indonesians Hold Their Breath (DMG)

XMH Holdings
Target Price: SGD0.50
Price: SGD0.35
Growth Slows As Indonesians Hold Their Breath

XMH posted weaker 2Q14 results as its Indonesian customers delayed their receipt of orders as the IDR depreciated. Margins and overheads  growth were in line, but the topline was flat, leading to a 44% y-o-y fall in profits. The consolidation of MPG Group will bolster earnings growth, although the actual pickup should come in FY15F. As XMH remains a fundamentally strong company, we maintain our BUY call, with a lower SGD0.50 TP.

Yangzijiang : Capitalising On Shipbuilding Recovery (DMG)

Target Price: SGD1.50
Price: SGD1.16
Capitalising On Shipbuilding Recovery

YZJ is one of the leading private shipbuilders in China, specialising in dry bulk carriers and container ships. The company is well-positioned to grow its orderbook as global shipbuilding orders are recovering. We like YZJ for its strong execution record and balance sheet. Management is also seeking to diversify its earnings, which is positive over the longer term. Maintain BUY on YZJ, with a SOP-based TP of SGD1.50.

Midas -2014 Outlook An Optimistic One (DMG)

Target Price: SGD0.75
Price: SGD0.49
2014 Outlook An Optimistic One

China’s plan to keep rolling out tenders for high speed trains bodes well for Midas as it commands a 60% share in China’s railway train car market. Margins going forward are likely to be lower for FY13 as the company took on more lower-margin orders during the year, but are expected to improve as it secures more orders over the next few quarters. Maintain BUY, with TP of SGD0.75.

Lian Beng -Profitability Set To Improve (DMG)

Lian Beng
Target Price: SGD0.70
Price: SGD0.53
Profitability Set To Improve

LBG’s 1Q14 PATAMI fell y-o-y in spite of stronger y-o-y revenue growth. It is expected to achieve stronger PATAMI in the next few quarters, fuelled by its strong orderbook and earnings contribution from M-Space after the latter obtains temporary occupation permit (TOP). With  LBG’s expertise and experience, it should benefit from the pipeline of public projects. Maintain BUY and SGD0.70 TP, based on a 6x FY14F P/E.

曾淵滄專欄 27.12.13:滙控有望拆港業務



King Wan -10.5% Yield Sustainable (DMG)

King Wan Corp
Target Price: SGD0.43
Price: SGD0.29
10.5% Yield Sustainable

KWAN is the largest mechanical & electrical (M&E) player in Singapore with an orderbook stretching to CY16. It pays a core 5.3% yield, with KTIS potentially listing in Feb 2014. This will allow the company to double as well as maintain its dividend going forward. Management has shown investment acumen and willingness to pay dividends. Maintain BUY, with SGD0.43 TP, based on 7% yield.

Thursday, December 26, 2013

Keppel REIT -REIT That Offers Grade-A Offices At a Bargain (DMG)

Keppel REIT
Target Price: SGD1.66
Price: SGD1.16
REIT That Offers Grade-A Offices At a Bargain

KREIT’s latest Australian acquisition (Melbourne) reinforces management’s progressiveness in extending its portfolio’s revenue tenure with fixed annual rental escalation and high portfolio occupancy. Besides its Grade-A offices, we see the lengthening of its portfolio’s WALE further mitigating the specific risks associated with commercial landlords. Maintain BUY, on the stock’s high 7.4% DPU yield.

¨ Strong income stream. With a weighted average lease to expiry (WALE) of 6.4 years and long-term leases (>five years) accounting for 40% of its portfolio, coupled with a revenue hedge for its Australian exposure, KREIT’s earnings downside risks appear limited.

First Resources -Plantation Sector Top Pick (DMG)

First Resources
Target Price: SGD2.70
Price: SGD2.03
Plantation Sector Top Pick

We upgrade the plantation sector to OVERWEIGHT, with First Resources (FR) still being our Top Sector Pick given its compelling valuation, favourable age profile and strong management. Following a sector-wide CPO price upgrade, we raise our earnings projections for FY14 by 2% and introduce our FY15 earnings forecast at USD272m. We lift our FV to SGD2.70 (from SGD2.65), based on a 16x CY14 P/E.

Eu Yan Sang -Quarterly Growth Set To Roll Macro (DMG)

Eu Yan Sang
Target Price: SGD0.92
Price: SGD0.82
Quarterly Growth Set To Roll Macro

EYSAN is Asia’s leading family-controlled traditional Chinese medicine (TCM) retailer. Operationally, we believe the company is back on a quarterly growth momentum after posting strong 1QFY14 sales at its Hong Kong and Australia operations. We also expect FY14F/15F earnings to jump 27%/50% to SGD18.7m/28.0m respectively. Maintain BUY and SGD0.92 TP.

DBS -Still The Best Bet (DMG)

Target Price: SGD19.40
Price: SGD16.74
Still The Best Bet

Despite moderating loan and non-interest income growth, we expect DBS to sustain its 7% net profit growth in FY14F. Stable NIMs and credit cost, as well as positive jaws are expected to help cushion the weaker topline growth. DBS offers strong leverage to the interest rate upcycle. While rate hikes are only expected in 2015, the stock cannot be ignored, in our view. Maintain BUY, with a SGD19.40 FV.

Cambridge Industrial Trust - Proposed acquisition (CIMB)

Cambridge Industrial Trust -
Current S$0.68
Target S$0.80
Proposed acquisition

CIT has proposed to acquire 11 Chang Charn Road for S$32m. We view this acquisition positively as we see room for CIT to maximise the return from this property via raising occupancy and rental rates.

We believe the proposed acquisition of 11 Chang Charn Road, expected to be completed in 1Q14, will add c.0.8% to CIT’s FY14 dividend. In view of the slightly stronger dividend yield, we tweak our DPS estimates up by 0.8% for FY14 and 1.1% for FY15. We maintain our Add call, with a higher DDM-based (discount rate: 8.3%) target price of S$0.80.

S-REITS -Time To Accumulate S-REITs (DMG)

S-REITS -Time To Accumulate S-REITs

Since late May 2013 when fears of global interest rate tightening spooked capital markets worldwide, the S-REITs sector has collapsed by over 20%, underperforming the wider FSSTI index (down by 10%). We think the selldown has overly discounted both the macro and  REITspecific fundamentals, hence we believe it is an opportune time to buy ahead of consensus upgrades. Maintain BUYs on Keppel-REIT, AIMS AMP, Cambridge and Cache Logistics.

¨ The SREITs under our coverage are currently trading at 6.5% FY14F DPU yields, with almost 3.5% spread over Singapore’s 10-year bond yield (historical average 4.6%). This is on the back of a 20% correction in the SREITs since May, against the wider FSSTI index which retraced by only 10%.

Wednesday, December 25, 2013


Created 12/24/2013 - 17:30
(吉隆坡24日訊)全球經濟復甦料為明年保健領域迎來更多企業活動,除香港屈臣氏(Watson)和科士威(Cosway)料在明年趕搭上市列車,綜合保健(IHH,5225,主板貿服組)也可能與哥倫比亞亞洲(Columbia Asia)合併,以與柔佛醫藥保健(KPJ,5878,主板貿服組)較勁。


Hai-O - Weaker Sales and Currency Woes (Kenanga)

Hai-O Enterprise Bhd -
Price: RM2.62
Target Price: RM2.95
Weaker Sales and Currency Woes

Period  2Q14/1H14

Actual vs. Expectations Below expectations. Hai-O reported 2Q14 net profit of RM10.5m (+20% QoQ, -35% YoY), bringing its 1H14 NP to RM19.3m (-27% YoY) which made up 37% and 38% of our and the consensus full year estimates, respectively. The key culprits were: (i) lower-than-expected sales growth and (ii) margins erosion due to the weakening of Ringgit against USD.

Sunway - Penang Expansion (Kenanga)

Sunway Berhad -
Price: RM2.64
Target Price: RM3.08
Penang Expansion

News  SUNWAY’s wholly-owned subsidiary, Sunway City (Penang), has proposed to acquire 24.5ac, comprising of 4 pieces of freehold land in Paya Terubong, Pulau Penang, for a total consideration of RM267m or RM251 psf. The purchase consideration is derived from a successful bidding in an open tender, which the minimum reserve price was fixed at RM200 psf (which is 20% lower than the purchase price). The project has a potential GDV of c. RM1.5b.

M'sia Aviation - The Great Malaysian Fare is Ending (MKE)

The Great Malaysian Fare is Ending

Value has emerged. The Malaysian aviation sector has had a turbulent 2013 due to price war and overcapacity that decimated yields and profitability. The industry is gradually improving and we are more optimistic on the balanced capacity planning and deployment in 2014. We forecast sector earnings growth of 312% YoY in 2014, primarily driven by narrowing losses at MAS. Excluding MAS, the industry‟s earnings will grow by 4.9% YoY. With values having emerged, this underpins our Overweight stance on the sector. Our top BUY pick is AirAsia X, followed by AirAsia. We maintain our HOLD call on MAHB as we think all the good news has been priced in. MAS is now a HOLD as its share price has closed in to our target price since our SELL call.

M'sia REITs - It’s All About The Fed (MKE)

M'sia REITs-It’s All About The Fed

All eyes on the west. US Fed‟s QE tapering has came in earlier than expected. Market will continue to interpret the implications of US economic data (i.e. inflation) to gauge the momentum and quantum of QE tapering over the next months. While interest-sensitive M-REITs are likely to be laggards in 1H14 against a volatile yield environment, a large portion of the taper-related selloff is already factored in their unit prices, we believe, hence, we maintain our NEUTRAL stance on the sector. Our top pick is CMMT.

M'sia Property - Hard Times Ahead (MKE)

M'sia Property - Hard Times Ahead

Uncertainties prevail. We remain UNDERWEIGHT on the property sector (developers). We expect the property market to be hard hit by the new property cooling measures of Budget 2014 and by some state governments. Stricter mortgage lending by the banks will also slow new transactions. Already, developers have expressed caution on the property market outlook over the next six months and are switching their product focus to affordable housing where demand is still resilient supported by a young demographic. Our pick for the sector is Glomac.

M'sia 2014 Outlook & Lookouts - Defensiveness Returns (MKE)

2014 Outlook & Lookouts - Defensiveness Returns
Current KLCI: 1,851 (17 Dec 2013)
YE KLCI target: 1,940 (unchanged)

We expect a faster global economic growth of 3.5% in 2014 from an estimated 3.1% in 2013 as major advanced economies – US, Europe, Japan – simultaneously expand for the first time since 2011. In contrast, ASEAN‟s growth trends are expected to be mixed on factors ranging from favourable impact of external demand rebound on Singapore and Malaysia, to transitory effects of domestic macroeconomic turbulence, political uncertainties and natural disasters on Indonesia, Thailand and the Philippines. This is amid the continued sub-8% expansion in China.

Tuesday, December 24, 2013

Are China bank stocks cheap or just crummy?

China banks are trading at bargain basement valuations, but analysts can't agree on whether they're cheap or just crummy.

The sector just got even cheaper, with Hong Kong and China listed bank shares falling around 5.5-7.3 percent over the past two weeks as interbank rates spiked higher on a seasonal liquidity squeeze, before posting a slight recovery Tuesday as rates eased.

The performance of the China bank stocks can sway the entire market, with the financial sector taking a more than 34 percent weight in the MSCI All China index.

Plantation Sector - 2014 a Year Of Plenty (DMG)

Plantation Sector - 2014 a Year Of Plenty

We are OVERWEIGHT on the plantation sector, which we believe will have a good year ahead with most companies seeing stronger profitability. This will be driven by stronger demand for palm oil from the food and fuel sectors, higher ASPs due to lacklustre production growth in Indonesia as well as lower fertiliser costs. Our average CPO price assumptions are raised to MYR2,700/MYR2,900 for CY14/15.

¨ Biodiesel push. Malaysia is raising its mandatory biodiesel blend to 7% from 5% currently as early as Dec 2013, while Indonesia is pushing for a 3m tonnes of biodiesel (B100) consumption next year. We believe the moves by the governments of the world’s two biggest biodiesel producing countries will have a significant impact on palm oil demand. Note that never before has palm biodiesel received such a strong mandate.

S'pore Construction - Strong Pipeline Of Projects Ahead (DMG)

Engineering & Construction -Strong Pipeline Of Projects Ahead

The construction sector in Singapore is poised for growth, supported by a healthy pipeline of government projects over the next few years. We are OVERWEIGHT on the sector. Competition is likely to remain keen (from both local and overseas players) and margins should remain under pressure. Our Top Pick is Lian Beng Group (LBG), in view of its good track record and ability to maintain margins.

¨ Growth driven by government projects. Construction demand in 2014 is expected to remain strong, supported by government projects to enhance overall infrastructure. Pipeline projects include Changi Airport expansion, increased rail network and an increase in HDB estates. Given that most of these are billion-dollar projects spanning a few years, the main contract is usually awarded to large foreign players. Nonetheless, local listed construction and related companies, especially those with a good track record, stand a chance of securing parcels of work in these major projects (either to build a section of the entire project or to supply materials/equipment).

S'pore Consumer -Powered By Regional Growth

 Consumer -Powered By Regional Growth

We are positive on Singapore’s consumer companies in 2014 as they will likely benefit from the region’s growing consumption. Given the > 30% returns YTD November, we continue to like specialty retailers Eu Yan Sang and OSIM for their North Asia exposure. We also like Parkson Retail Asia, Sheng Siong and Super Group following their recent share price declines, which have made their risk-reward profiles appealing.

¨ Mixed returns YTD. For 11M2013, our coverage returned an average of +6%, led by strong performances of +37% and +31% from specialty retailers Eu Yan Sang (EYSAN SP, BUY, FV: SGD0.92) and OSIM (OSIM SP, BUY, FV: SGD2.60) respectively. On the other hand, consumer discretionary players underperformed, with the share prices of FJ Benjamin (FJB SP, NEUTRAL, FV: SGD0.27) and Parkson Retail Asia (PRA SP, BUY, FV: SGD1.28) declining by 29% and 23% respectively.

Singapore 2014 -Themes Pro-growth policy (DMG)

Singapore 2014 Themes
Pro-growth policy
We believe that there will be a shift away from the yield stocks in 2014. Last year, we were negative to neutral on most sectors, which seemed prescient considering the market’s flattish performance over the past year. We have since upgraded a few sectors including Consumer, Offshore & Marine, Plantation and Technology.

Correspondingly, our view on the overall market has turned positive.

On the property side, we still favour the REITs for now, but we do not expect it to outperform through the year. At some point, property developers should start to catch up, but it would not be too soon, as property prices will have to fall first. This should be evident in the first half of 2014.

曾淵滄專欄 24.12.13:熱錢泊港炒風續強


Singapore Strategy: Time To Roar Again (DMG)

Singapore Strategy
Time To Roar Again

Singapore, a boring market? This may have been so for the past few years, but things are set to change in 2014. We believe that the conditions are ripe for the market to outperform its regional peers. In particular, we expect the small caps to spring back to life following a rout in 4Q13. Our STI target of 3,480 is based on a 15x FY14 P/E.

•Worst-performing market to regain lustre. Singapore seemed to have lost its shine over the past few years, no thanks to domestic restructuring as well as its neighbouring countries’ rapid growth. Compared to the US and Asean markets, the country’s stock market was the worst performing by a mile over the last three years. However, things are about to change next year as we expect Singapore to make a comeback.

Monday, December 23, 2013

喜庆45周年 森德勇闯下一个高峰

喜庆45周年 森德勇闯下一个高峰
Created 12/23/2013 - 12:44



麥嘉華(Marc Faber)筆記:何時減磅有路可捉


對不少投資者來說,要承認自己在投資上押錯注,並且要果斷地止蝕,的確需要很大的決心和遵守投資紀律。不過,正如費桑德(William Feather)所言,如果我們自己不遵守紀律,市場終會迫使你去做。


COSCO : Poised For A Comeback In 2014? (UOBKH)

Share Price S$0.73
Target Price S$0.85
Poised For A Comeback In 2014?

We estimate ytd contract wins at US$3b, surpassing our projection of US$2.5b. We raise our 2014-15 net profit forecasts by 7-13% on higher contract win assumptions of US$3.0b each for 2013 and 2014 (previously US$2.5b). Improved dry-bulk shipping sentiments, if they continue throughout 2014, could spark a new dry-bulk shipbuilding cycle. Poor earnings (as a result of cost provisions) are currently dampening share price upside. Maintain HOLD. Target price: S$0.85. Entry price: S$0.70.

RH Petrogas - Exploration VP Steps Up To CEO Role (DMG)

RH Petrogas -
Exploration VP Steps Up To CEO Role
December 19, 2013
RHP announced that current CEO Dr Tony Tan is retiring on 31 Dec, but will continue to serve as an advisor to the board. Francis Chang, currently VP exploration & production (E&P), will step into the CEO role. Chang has a strong background in E&P and we expect a smooth transition, as he has been with RHP since June 2010. Maintain BUY with SGD1.38 TP. The stock trades at 37% discount to its production assets.

Soilbuild Business Space REIT : New Kids on the Block (DBSV)

Soilbuild Business Space REIT
BUY S$0.75
STI : 3,067.57
Price Target: 12-Month S$0.87
New Kids on the Block

 Minimal lease expiry in 2013; organic growth a main driver in 2014
 Low gearing of 29.4%, with strong balance sheet metrics
 BUY, TP S$0.87

Mapletree Logistics Trust : Strength in diversity (DBSV)

Mapletree Logistics Trust
BUY S$1.015
STI : 3,067.57
Price Target: 12-Month S$1.16
Strength in diversity

• Steady earnings growth from an expanding portfolio
• Ready acquisition opportunities from sponsor
• BUY, TP S$1.16

Mapletree Industrial Trust : Low Risk, High Returns (DBSV)

Mapletree Industrial Trust
BUY S$1.285
STI : 3,067.57
Price Target: 12-Month S$1.44
Low Risk, High Returns

• Organic growth uptrend remains intact
• Completions of development projects to contribute positively over FY14F-16F
• BUY, TP S$1.44 maintained

Cambridge Industrial Trust : One to watch(DBSV)

Cambridge Industrial Trust
HOLD S$0.68
STI : 3,067.57
Price Target: 12-Month S$0.74
One to watch

 AEIs and planned acquisitions to drive earnings
 Further hikes in distributions from interest savings
 HOLD maintained, TPS$0.74

Cache Logistics Trust : Clean transparent yields (DBSV)

Cache Logistics Trust
BUY S$1.07
STI : 3,067.57
Price Target: 12-Month S$1.33
Clean transparent yields

• Transparent earnings with minimal downside
• Acquisitions to re-rate earnings and stock
• BUY, TPS$1.33

曾淵滄專欄 23.12.13:錢荒締造低吸機會



Ascendas REIT : Progressing steadily (DBSV)

Ascendas REIT
BUY S$2.17
STI : 3,067.57
Price Target: 12-Month S$2.44 (Prev S$2.37)
Progressing steadily

 Steady earnings growth stream over coming two years
 Investment in Aperia to bear fruit from 2H14
 BUY maintained, TP raised to S$2.44

Industrial REITs - Navigating through murky times (DBSV)

Industrial REITs - Navigating through murky times

■ Industrial landlords to ride out operational challenges well
■ Reversions to remain positive, buffered by low expiring rent levels; retention rates expected to remain high
■ We pick MINT for superior growth profile; Cache for high yields

Challenges ahead given significant supply outlook
The industrial sector performed better than expected in 2013, as demand growth kept up with supply completions. As a result, rental and capital values inched up, albeit at a more moderate rate of 5-7%. Looking ahead, we see outlook turning modest, owing to a significant supply pipeline of 51.8m sqft (+12% supply expansion) of industrial space currently under construction/planning, which is projected to be completed over 4Q2013-2015.

Sunday, December 22, 2013

Money Mind Young Investors Ep 2

Bank of China : A dark horse (MKE)

Bank of China
Buy (Initiation)
Share price: HKD3.74 (27 Nov 2013)
Target price: HKD4.30
A dark horse

A key beneficiary of QE tapering. Bank of China (BOC)’s net interest margin (NIM) remained below its peers at 2.21% in 3Q13 (2.22% for 9M13). This was mainly due to the low-margin domestic foreign currency business (NIM: 0.94% in 1H13) and overseas business (NIM: 1.25% in 1H13). The HK dollar and US dollar average interest earnings assets accounted for 20% of group total in 1H13. We expect the QE tapering will result in a steepening US dollar yield curve with minimal interest rate volatility. This should provide opportunities for BOC to enhance its NIM through lengthening the duration of its HK dollar and US dollar assets. We estimate that for every 10bps increase in the yield of these assets, BOC’s NIM will widen by 2bps. Overall, we forecast the group NIM of BOC to stay at about 2.2% during 2013-15.

Giordano International : Recovery ahead in China (CIMB)

Giordano International
Current HK$6.76
Target HK$8.14
Recovery ahead in China

Giordano is a high-yield stock which offers steady earnings growth, courtesy of robust sales in Asia Pacific and the Middle East. It is set return to growth in China in FY14, fuelled by new stores and store upgrade/relocation.

Under our revised rating structure, our call changes from Outperform to Add. We retain our target price as we continue to value the stock at 13.5x CY15 P/E, a 10% discount to its 10-year average. Share catalysts are a sales recovery in China and sustainable gross margin expansion.

Fufeng Group : Tough year is over (CIMB)

Fufeng Group
Current HK$3.06
Target HK$4.00
Tough year is over

We expect Fufeng’s net profit to rise 51.7% yoy in FY14 due to higher MSG prices and stable contribution from the xanthan gum segment. We believe the MSG industry’s consolidation is coming to an end as no smaller players re-entered the market in 2H13.

Under our new rating structure, we change our Outperform rating to Add. We see catalysts from a recovery in margins. Our DCF-based target price is HK$4.0 (WACC 12.1%).

Industrial and Commercial Bank of China: More challenges ahead (MKE)

Industrial and Commercial Bank of China
Hold (Initiation)
Share price: HKD5.55
Target price: HKD5.40
More challenges ahead
Minimal NIM pressure, albeit moderate loan growth. Industrial & Commercial Bank of China (ICBC)’s net interest margin (NIM) remained at 2.56% in 3Q13 (2.57% for 9M13). ICBC may lengthen the duration of its investments and adjust its asset mix in 2014 to minimize the impact of price competition for loans and deposits. We forecast its NIM to be 2.54% in 2014. Loan growth was lower than the market average at 9.6% for 9M13 as ICBC has tight approval control over LGFV loans and lending to industries with over-capacity. We forecast its loan growth to remain moderate at 10-11% p.a. during 2013-14.

China Construction Bank :Solid capital base; disciplined operations (MKE)

China Construction Bank
Buy (Initiation)
Share price: HKD6.25 (27 Nov 2013)
Target price: HKD7.25
Solid capital base; disciplined operations

Selective loan growth and slight NIM pressure. China Construction Bank (CCB)’s loan growth remained healthy at 11.5% 9M13. Key drivers were SME loans, residential mortgages and overseas lending. CCB also shifted its loan growth towards less risky Central and Western China. CCB maintained its net interest margin (NIM) at 2.71% in each quarter during 9M13. However, its loan-to-deposit ratio rose to 69.1% in Sep 2013 (66.2% in Dec 2012). To regain market share in deposits and factor in potential price competition stemming from interest rate deregulation, we forecast CCB’s NIM to narrow to 2.66% in 2014.

Agricultural Bank of China: Expect ROE to remain above peers (MKE)

Agricultural Bank of China
Buy (Initiation)
Share price: HKD3.98 (27 Nov 2013)
Target price: HKD4.60
Expect ROE to remain above peers

Making efforts to reduce NIM pressure. Net interest margin (NIM) of Agricultural Bank of China (ABC) revived from 2.7% in 2Q13 to 2.77% in 3Q13, mainly due to the reduction in interbank borrowing and the increase in investment in long-term bond securities. Besides, ABC has maintained the loan-to-deposit (L/D) ratio at 60.2% and the proportion of demand deposits at 52.2% of total deposits in Sep 2013. We believe ABC will continue to improve its asset and liability management to minimize its NIM pressure under interest rate deregulation. We forecast its NIM to be 2.73-2.74% in 2013-14. We estimate that for every 1ppt increase in its L/D ratio, its NIM will widen by 1-2bps.

曾渊沧博士-股市资讯专栏 20.12.2013 - 告别2013年,2014年有何展望?



Warren E. Buffett(沃伦•巴菲特)
Be fearful when others are greedy, and be greedy when others are fearful
别人贪婪时我恐惧, 别人恐惧时我贪婪
投资只需学好两门课: 一,是如何给企业估值,二,是如何看待股市波动
吉姆·罗杰斯(Jim Rogers)

乔治·索罗斯(George Soros)



高估期间, 卖对, 不卖也对, 买是错的。
低估期间, 买对, 不买也是对, 卖是错的。

Tan Teng Boo

There’s no such thing as defensive stocks.Every stock can be defensive depending on what price you pay for it and what value you get,
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