《FIRST_LIGHT_ASIA：WHAT’S_CHANGED_RESEARCH_FOCUS_TODAY’S_EVENTS-2013-03-13.pdf》由会员分享，可在线阅读，更多相关《FIRST_LIGHT_ASIA：WHAT’S_CHANGED_RESEARCH_FOCUS_TODAY’S_EVENTS-2013-03-13.pdf（188页珍藏版）》请在三一文库上搜索。
1、 abc Global Research First Light Asia Macau Gaming, Swire Pacific, E.Sun Financial Production: please change headline text colour to WHITE, change headline row height to 1pt exactly before publish Whats Changed, Research Focus, Todays Events Ticker Company Rating was Currency Target was EPS 12e EPS
2、13e Price Price At Close Up 3336 HK Ju Teng Intl Holdings OW(V) HKD 5.20 4.20 0.50 0.65 3.86 12 Mar 2884 TT E.Sun Financial OW TWD 23 20 1.34 1.29 17.80 11 Mar 2308 TT Delta Electronics OW TWD 122 121 7.49(a) 7.75 111.50 12 Mar 6883 HK Melco Crown Entertainment OW HKD 71.29 66.70 0.32(a) 0.37 51.90
3、8 Mar 036490 KS OCI Materials N(V) KRW 38,000 33,000 3022.36 2634.23 35,150 12 Mar Down 19 HK Swire Pacific N OW HKD 106 102 5.29 6.52 101.70 11 Mar 44 HK HK Aircraft Engineering UW N HKD 111 112 5.50(a) 5.03 115.50 11 Mar Source: Bloomberg, HSBC estimates Click on title to open reports Research Foc
4、us Macau Gaming - Returning to normalised growth in mid-2013 Sean Monaghan The year has started well for Macau casinos with an improving Chinese economy providing the backdrop for sector growth. However, headwinds from the political transition, coupled with Chinas broad crackdown on corruption, have
5、 caused a pause in VIP growth; mass gaming continues to grow strongly We believe Macaus GGR growth will normalise mid-year and investor focus will shift back to the overall market restructure story USD30bn in new resort development and accelerating casino earnings on the back of growth in high- marg
6、in mass gaming On a regional basis, we continue to prefer Macau stocks over the Genting Group, especially Galaxy Entertainment and Melco Crown, both rated OW. We reiterate our OW on five of the six Macau stocks and remain N on Sands China Swire Pacific (19 HK) - Down to N: Preview 2012e recurring pr
7、ofit HKD8.0bn Mark Webb* HSBC 2012e profit of HKD8.0bn, which excludes property revaluation surplus and property investment disposals Performance of offshore marine and beverage businesses and potential expansion plans key areas of interest Although target raised to HKD106 from HKD102, we downgrade
8、to Neutral from OW E.Sun Financial (2884 TT) - OW: Confident in 2013 growth Bruce B. Warden* 4Q12 analyst meeting highlighted strong gains in E.Suns fee-based business model Raising net profit forecasts 2% for 2013e/14e We reiterate our Overweight rating and raise our target price to TWD23 (from TWD
9、20), implying a 31% potential return 13 March 2013 Ticker Event Rating Target Price Ticker Event NI Bbg Cathay Pacific Airways 293 HK Y OW 17.50 14.5 Import Price Index (MoM) US Feb 0.50% China Resources Gas Group 1193 HK Y UW 15.20 18.8 Advance retail sales US Feb 0.50% Trinity 891 HK Y OW (V) 7.30
10、 4.4 Business inventories US Jan 0.30% China Lilang 1234 HK Y OW (V) 5.00 4.7 Korea unemployment rate (sa) Feb 3.2% Source: Bloomberg, HSBC estimates Sunayana Daga* Research Marketing +852 2822 .hk *Employed by a non-US affiliate of HSBC Securities (USA) Inc, and is not registered/qualified pursuant
11、 to FINRA regulations Issuer of report: The Hongkong and Shanghai Banking Corporation Limited View HSBC Global Research at: http:/ Disclaimer mass gaming continues to grow strongly We believe Macaus GGR growth will normalise mid-year and investor focus will shift back to the overall market restructu
12、re story USD30bn in new resort development and accelerating casino earnings on the back of growth in high-margin mass gaming On a regional basis, we continue to prefer Macau stocks over the Genting Group, especially Galaxy Entertainment and Melco Crown, both rated OW. We reiterate our OW on five of
13、the six Macau stocks and remain N on Sands China Disclosures and Disclaimer This report must be read with the disclosures and analyst certifications in the Disclosure appendix, and with the Disclaimer, which forms part of it Equity AsiaMarch 2013 Macau Gaming Returning to normalised growth in mid-20
14、13 Consumer Priced as of 8 March 2013 6 Consumer therefore, increasing market penetration should offset any fluctuation in economic activity. Our sensitivity analysis shows that: A 1% change in mass GGR in 2013 has a 0.3% impact on total market GGR and a 0.9% impact on market EBITDA. Sands China has
15、 the greatest leverage to the mass segment and a 1% change in GGR has a 1.1% impact to 2013 EBITDA and a 1.3% impact to our DCF valuation. Figure 6: Macau GGR vs. China GDP growth 6% 8% 10% 12% 14% 16% 1Q07 1Q08 1Q09 1Q10 1Q11 1Q12 1Q13e -50% 0% 50% 100% 150% China GDP growth HSBC (LHS) Macau VIP GG
16、R growth (RHS) Macau mass GGR growth (RHS) Source: Macau DICJ, HSBC estimates Figure 7: Macau GGR growth vs. HSBC PMI 40 45 50 55 60 Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12 Jan-13 -50% 0% 50% 100% 150% HSBC PMI Mfg. (RHS) Macau VIP GGR growth (RHS) Macau Mass GGR growth (RHS) Source: Macau DICJ, H
17、SBC estimates 12 Consumer larger junkets help improve the efficiency of VIP gaming generally. 13 Consumer they could likely involve project investments of USD5-6bn. We forecast the peak year for project investment will be 2015 when USD7.4bn will be collectively invested, which is almost twice the pe
18、ak of the last development wave. Galaxy is now the largest investor in new resorts in Macau with a total of 18.5m sqft of additional casino resort space on its existing Cotai land bank by the end of 2017 and a total development cost of USD8.7bn (HKD67.5bn) Macau casino resort projects All Macau casi
19、no companies will be building in 2013 Almost USD30bn in new resort investments Galaxy is the largest builder of new casino resorts Figure 56: Capital investment in new Macau casino resorts by concessionaire 0 1000 2000 3000 4000 5000 6000 7000 8000 200220042006200820102012e2014e2016e2018e2020e SJMSC
20、LGalaxyWMLMCEMGMC USD18bnUSD26.2bn Sites 7 therefore, we are reiterating our Overweight rating. Potential return equals the percentage difference between the current share price and the target price, including the forecast dividend yield when indicated. We remove the volatility (V) indicator as the
21、stocks average volatility (defined as the past months average of the daily 365-day moving average volatilities) is below the 40% volatility threshold as defined by our research model. Risks to our rating and estimates Generic risks for Macau casino concessionaires include unexpected changes in gover
22、nment gaming policy, or economic changes in China that could impair customer visitation and expenditure. Business concentration risk also exists, given that all of the companys operations are largely centred in Macau. Specific risks for GEG relate to the companys ability to continue to develop addit
23、ional resorts as required. The company is developing resorts that may or may not be granted additional gaming tables when the casino components open. We believe the company is also looking at integrated resort opportunities in markets outside of Macau, including non-gaming investment opportunities o
24、n Hengqin Island. Such opportunities may involve specific risks that are different to those of Macau. 56 Consumer Altira is also located on Taipa in the middle of mass residential, which is a very strange location for a niche high-end asset. Target price Our target price of HKD71.29 remains based on
25、 a weighted average of SOTP (EV/EBITDA multiples) and DCF (WACC 13%, TG 2%) valuations. Given the relative uncertainty surrounding long- term forecasts in Macau (e.g., licence expiry), we give a 30% weight to our DCF value of HKD71.98/share (previously HKD69.53/share) and a 70% weight to our SOTP va
26、lue of HKD70.99/share (previously HKD65.49/share) At our target price, the stock would trade at c24x 2013e earnings. JV with Belle Corp MCE is investing USD600m in a casino resort in the Philippines which is scheduled to open in mid- 2014. We value this investment at USD791m which forms 5% of our SO
27、TP valuation. We do note the recent news articles relating Kazuo Okada, Universal Entertainment Corp and potential inappropriate payments made in the Philippines. An investigative report from Reuters, published on 16 November 2012 said that a Universal Figure 93: Melco Crown Entertainment SOTP and D
28、CF valuation (USDm) SOTP DCF EBITDA (x) Value ShareValueShare Altira 157 12.0x 1887 11%DCF value COD 1014 14.0x 14195 86%Cash flows675643% Mocha 39 8.0x 310 2%Terminal value989063% Studio City 1275 8%Total16646107% Philippines 791 5%License renewal-1063-7% Total 1210 15.3x 18458 112%Total Gross valu
29、e15582100% Corporate -144 14.0x -2019 -12% Total 16439 100%Net debt-491 Less: License renewal -1063 Net Assets15092 Land payments 0 Gross asset value 15376 Shares in issue (m)1631 Less: Borrowings 2406 Value per share Cash at bank 1915 USD9.25 Net assets 14885 HKD71.98 Shares in issue 1631 Value per
30、 share USD 9.13 HKD 70.99 Source: HSBC estimates 60 Consumer therefore, we are reiterating our Overweight rating. Potential return equals the percentage difference between the current share price and the target price, including the forecast dividend yield when indicated. We remove the volatility (V)
31、 indicator as the stocks average volatility (defined as the past months average of the daily 365-day moving average volatilities) is below the 40% volatility threshold as defined by our research model. Projects Melco Crown has a number of substantial new projects planned in the near term. The Studio
32、 City project and the City of Dreams expansion initiatives were outlined on pages 10 therefore, we are reiterating our Overweight rating. Potential return equals the percentage difference between the current share price and the target price, including the forecast dividend yield when indicated. We r
33、emove the volatility (V) indicator as the stocks average volatility (defined as the past months average of the daily 365-day moving average volatilities) is below the 40% volatility threshold as defined by our research model. Risks to our rating and estimates Generic risks for Macau casino concessio
34、naires include unexpected changes in government gaming policy, or economic changes in China that could impair customer visitation and expenditure. Business concentration risk also exists, given that all of the companys operations are largely centred in Macau. Specific risks for MGM relate to the com
35、panys ability to continue to develop additional resorts as required. The company is developing a new resort on Cotai that may or may not be granted additional gaming tables when the casino components open. We believe the company may also look at integrated resort opportunities in markets outside of
36、Macau, including Taiwan. Such opportunities may involve specific risks that are different to those of Macau. Figure 95: MGM China DCF valuation (HKDm) Value Cash flows 28,658 Terminal value88,536 Total117,194 License renewal fee-6,543 Royalty payments-4,531 Less:0 Borrowings4,146 Cash7,374 Net3,227
37、Net Assets109,348 Shares in issue (m)3,800 Value per share28.78 Source: HSBC estimates Figure 96: MGM China SOTP valuation (HKDm) Value Existing assets Gaming84,156 Corp in FY11, it was 2.88%. VIP tables number increased in FY12 compared to FY11, following movement of tables from Venetian and Sands
38、Macau to this property. Mass table gaming drop was up 13% and slot wins was up 7%. Sands Cotai Central (SCC) Sands Cotai Central reported EBITDA for FY12 of USD214m. The 4Q12 EBITDA came in at USD108m versus USD54m in 3Q12 and USD52m in the 2Q12 period. The growth in quarterly EBITDA was driven by a
39、 combination of new room openings coupled with enhanced performance across the main gaming areas. VIP roll was reported at USD26bn and VIP win rate was reported at 2.83%. Mass table revenues and slot wins were USD388m and USD105m, respectively. The Sands Cotai Central property is showing operational
40、 improvement, driven by the opening of new gaming and non-gaming areas. Sands Macau Sands Macau FY12 EBITDA was USD351m, flat compared to FY11. VIP roll was down 20%, but VIP win was a milder 10% because of higher VIP win rate of 3.14% versus a theoretical rate of 2.85%; last year, it was at 2.79%.
41、Figure 98: Sands China SOTP and DCF valuation (USDm) SOTP Value Share DCF ValueShare Venetian 19036 45% Cash flows 2174344% Sands 4384 10% Terminal value2809756% Plaza Macau 5942 14% Total49840100% SCC(1) 10758 26% License renewal fee-1767 Site 3 2109 5% Less: Other incl Ferries -197 0% Borrowings34
42、09 Total 42032 100% Cash350 Net-3059 Less: Net Assets45015 License renewal -1767 Shares in issue (m)8048 Gross asset value 40265 Value per share Less: 0 USD5.59 Completion works HKD43.52 Borrowings 3409 Cash at bank 350 Net assets 37206 Shares in issue 8048 Value per share USD 4.62 HKD 35.97 Source:
43、 HSBC estimates 68 Consumer therefore, we are reiterating our Neutral rating. Potential return equals the percentage difference between the current share price and the target price, including the forecast dividend yield when indicated. We remove the volatility (V) indicator as the stocks average vol
44、atility (defined as the past months average of the daily 365-day moving average volatilities) is below the 40% volatility threshold as defined by our research model. Risks to our rating and estimates Generic risks for Macau casino concessionaires include unexpected changes in government gaming polic
45、y, or economic changes in China that could impair customer visitation and expenditure. Business concentration risk also exists, given that all of the companys operations are largely centred in Macau. FCPA-related events On 2 March 2013, The New York Times released an article focusing on possible bre
46、aches by Las Vegas Sands (and its subsidiary Sands China) of the Foreign Corrupt Practices Act (FCPA). The news article referenced the Form 10-K stock exchange filing by Las Vegas Sands released to the market on 1 March 2013. Subsequent to The New York Times article Las Vegas Sands responded to the
47、news articles stated that it did not report any violations of the anti- bribery provisions of the FCPA and it said news reports stating otherwise, such as the headline in The New York Times, which described the matter by saying “Casino Says it Likely Cheated,” are both inflammatory and defamatory. T
48、he company said it will vigorously defend itself against that type of uninformed and misleading reporting. The following includes the passage with the Form 10-K issued by Las Vegas Sands on 1 March 2013. “On February 9, 2011, LVSC received a subpoena from the Securities and Exchange Commission (the
49、“SEC”) requesting that the Company produce documents relating to its compliance with the Foreign Corrupt Practices Act (the “FCPA”). The Company has also been advised by the Department of Justice (the “DOJ”) that it is conducting a similar investigation. It is the Companys belief that the subpoena may have emanated from the lawsuit filed by Steven C. Jacobs described above.” “After the Companys receipt of the subpoena from the SE