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Indocement Tunggal Prakarsa (INTP IJ) - Buying Opportunity On 13.1% Price Decline And 43.5% 2021F EPS Growth
For 2021, we expect Indocement sales volume to grow 7.6% yoy to 17.5m tons on the back of a recovery in the bag and bulk segments. The latter would be driven by a 47.3% jump in the infrastructure budget to Rp414t for 2021. Higher sales volume and a 2% rise in ASP should lead to a higher operating leverage and 43.5% 2021F EPS growth. Coupled with a 13.1% share price decline, maintain BUY with a lower target price of Rp16,200, based on 19.1x 2021F EV/EBITDA.
Indonesia Daily - Wednesday, September 23, 2020
Indocement Tunggal Prakarsa (INTP IJ/BUY/Rp10,775/Target: Rp16,200): Buying opportunity on 13.1% price decline and 43.5% 2021F EPS growth. TRADERS’ CORNER Siloam International Hospital (SILO IJ): Technical BUY Astra Agro Lestari (AALI IJ): Technical BUY
Shandong Gold Mining (1787 HK) : Strategic plans for 14th five-year period.
The group announced its strategic plans for the upcoming 14th five-year period (2021- 25) on 22 September during its strategic development conference in Beijing: mined gold production of 80 tonnes, gold reserve of about 3,300 tonnes, and total profit to reach Rmb8b-10b. The group will actively conduct M&As overseas. Note that the company has just raised its offer price for Cardinal Resources, implying that its aggressive global expansion is on track. Maintain BUY. Target price: HK$27.00.
Beijing Capital International Airport (694 HK) : Ongoing concerns remain but negatives likely to be priced in.
BCIA’s share price has declined 15.5% and underperformed the HSI by 8.7ppt since its 1H20 results announcement. While we are still not optimistic of a quick recovery, we believe the negatives have been mostly priced in as share price has derated and is currently trading close to our target price (at 0.8x 2021F P/B). Upgrade to HOLD but keep target price unchanged at HK$4.50. Entry price is HK$4.00, which implies 0.71x 2021F P/B, near the low that was last seen in 2011.
China Economics: US-China trade war escalation piles further pressure on weak Renminbi.
Trade tensions between the US and China reached a new high on 23 Aug 19 as retaliations from China were swiftly met with further tariff hikes and threats from the US. The higher tariffs will bring further pressure on China’s external balance; hence we are lowering our USDCNY forecast to Rmb7.20 at end-19 and Rmb7.60 at end-20.
Indocement Tunggal Prakarsa (INTP IJ) - Buying Opportunity On 13.1% Price Decline And 43.5% 2021F EPS Growth
For 2021, we expect Indocement sales volume to grow 7.6% yoy to 17.5m tons on the back of a recovery in the bag and bulk segments. The latter would be driven by a 47.3% jump in the infrastructure budget to Rp414t for 2021. Higher sales volume and a 2% rise in ASP should lead to a higher operating leverage and 43.5% 2021F EPS growth. Coupled with a 13.1% share price decline, maintain BUY with a lower target price of Rp16,200, based on 19.1x 2021F EV/EBITDA.
Indonesia Daily - Wednesday, September 23, 2020
Indocement Tunggal Prakarsa (INTP IJ/BUY/Rp10,775/Target: Rp16,200): Buying opportunity on 13.1% price decline and 43.5% 2021F EPS growth. TRADERS’ CORNER Siloam International Hospital (SILO IJ): Technical BUY Astra Agro Lestari (AALI IJ): Technical BUY
Shandong Gold Mining (1787 HK) : Strategic plans for 14th five-year period.
The group announced its strategic plans for the upcoming 14th five-year period (2021- 25) on 22 September during its strategic development conference in Beijing: mined gold production of 80 tonnes, gold reserve of about 3,300 tonnes, and total profit to reach Rmb8b-10b. The group will actively conduct M&As overseas. Note that the company has just raised its offer price for Cardinal Resources, implying that its aggressive global expansion is on track. Maintain BUY. Target price: HK$27.00.
Beijing Capital International Airport (694 HK) : Ongoing concerns remain but negatives likely to be priced in.
BCIA’s share price has declined 15.5% and underperformed the HSI by 8.7ppt since its 1H20 results announcement. While we are still not optimistic of a quick recovery, we believe the negatives have been mostly priced in as share price has derated and is currently trading close to our target price (at 0.8x 2021F P/B). Upgrade to HOLD but keep target price unchanged at HK$4.50. Entry price is HK$4.00, which implies 0.71x 2021F P/B, near the low that was last seen in 2011.
China Economic Activity - FAI picking up pace.
FAI growth re-accelerated in Aug 20 to 8.8% yoy, bringing 8M20 growth to -0.3% yoy. Industrial production growth hit 5.6% yoy and retail sales growth rebounded to 0.5% yoy in Aug 20. Although all three indicators came in above Bloomberg consensus forecast, retail sales recovery remains weak. We expect FAI to play a critical role in the months ahead, supported by the recent surge in government bond issuance.
Money Supply : TSF boosted by government bond issuance
China’s M1 growth rebounded further to 8.0% yoy in Aug 20, beating Bloomberg consensus of 7.0% yoy. But M2 growth slowed to 10.4% yoy, missing Bloomberg consensus of 10.7% yoy. New bank loans were in line with the expectations, with household loans still the main driver. But new TSF more than doubled, driven by robust issuance of government bonds.
China Economics: Inflation - Falling food prices driving CPI inflation down.
China’s CPI inflation declined 0.3ppt to 2.4% yoy in Aug 20, in line with Bloomberg consensus. PPI inflation continued to rise by 0.4ppt to -2.0% yoy, slightly missing Bloomberg consensus of -1.9 yoy. The decline in CPI inflation was driven by falling food prices while the decline in PPI inflation narrowed. That said, deflationary pressure persists due to weak domestic demand.
China Economics PMI: Sustainable improvement?
China’s official manufacturing PMI fell slightly to 51.0% in Aug 20, below Bloomberg consensus estimate of 51.2%. Non-manufacturing PMI recovered to 55.2% after a slight decrease last month, beating Bloomberg consensus forecast of 54.2%. As the recovery still relies upon domestic demand amid anaemic new export orders, we expect any economic improvement to be at a measured pace.
Ivy Xu Da ...
- Joyce Chan Pui Lai
- Julia Pan Mengyao
- Nick Liu Sunliang
- Oscar Jiang
- Robin Yuen
- Shaun Tan
Greater China Daily: Wednesday, October 9, 2019
KEY HIGHLIGHTS Sector Consumer Observations from National Day Golden Week. Internet Volume growth slowing down, tourism spending increasing. Property Housing sales volume exceeds expectations. TRADERS’ CORNER China Res Beer (291 HK): Trading Buy Range China Res Gas (1193 HK): Trading Buy Range
Greater China Daily: Friday, October 4, 2019
KEY HIGHLIGHTS Sector Automobile BMW may skip special rebates to dealers for 3Q19, pressuring dealers’ new car sales margins. REITs & Landlords Office & retail: Uncertainties may linger; downgrade to MARKET WEIGHT. Sportswear Channel checks suggest a healthy 3Q19. TRADERS’ CORNER Haidilao (6862 HK): Trading Buy Range Café de Coral (341 HK): Trading Buy Range
Strategy - Alpha Picks: Greater China October Conviction List
As we continue to expect market volatility, we maintain exposure to names that have resilient earnings or are expected to enjoy an earnings growth recovery, such as Ausnutria Dairy (1717 HK), CSPC (1093 HK) and Dongfeng Motor (489 HK), and add PICC P&C (2328 HK) to our BUY list.
Carol Dou Xiao Qin ...
- Greater China Research Team
- Johnny Yum Chung Man
- Joyce Chan Pui Lai
- Ken Lee
- Michael Cheung Ho Bun
- Tham Mun Hon
Greater China Daily: Thursday, October 3, 2019
KEY HIGHLIGHTS Strategy Alpha Picks: Greater China October Conviction List No change in strategy; adding PICC P&C to our BUY list. Initiate Coverage Shenzhen Mindray Bio-Medical Electronics Co (300760 CH/BUY/Rmb184.46/Target: Rmb235.00) Becoming a global medtech giant. Update China Yongda Auto Services Holdings (3669 HK/BUY/HK$6.59/Target: HK$9.00) Acquires a niche dealer of Porsche, Mercedes-Benz and Lexus at attractive valuation. TRADERS’ CORNER Conch Venture (586 HK): Trading Buy Range Lenovo Group (992 HK): Trading Buy Range