瑞信-全球-股票策略-不确定时期的主题股票篮子-2019.5-52页.pdf

Thematic baskets Stocks for uncertain times Credit Suisse(Hong Kong)Limited Manish Nigam +852 2101 7067 manish.nigamcredit- Vaibhav Jain +852 2101 7061 vaibhav.jaincredit- May 2019 DISCLOSURE APPENDIX AT THE BACK OF THIS REPORT CONTAINS IMPORTANT DISCLOSURES,ANALYST CERTIFICATIONS,LEGAL ENTITY DISCLOSURE AND THE STATUS OF NON-US ANALYSTS.US Disclosure:Credit Suisse does and seeks to do business with companies covered in its research reports.As a result,investors should be aware that the Firm may have a conflict of interest that could affect the objectivity of this report.Investors should consider this report as only a single factor in making their investment decision.A basket of quality-growth stocks,less exposed to macro uncertainties 2 Revisiting our January basket of high-quality stocks:While markets have done well YTD,recent developments on China-US trade front have reignited concerns.In January,we had recommended a basket of large cap,liquid,high-quality stocks,which were likely to perform well despite concerns around economic growth in US and China(two largest economies)and ongoing trade issues.We had chosen these stocks from CS coverage universe of 1,300 stocks based on size,liquidity,ROE,EPS growth,HOLT CFROI and analyst inputs(on macro and valuations).We revisit this list and make changes.CS analysts inputs on five parameters:Our analysts specifically provide their scores for the companies on the following parameters:(1)sensitivity to US economic growth;(2)China economic growth;(3)exposure to the US-China tariff dispute;(4)fundamental strength of the companies business;and(5)valuations relative to history.(See next slide for details)We apply a HOLT filter too:In addition to using analysts inputs,we also apply a minimum Credit Suisse HOLT CFROI threshold to arrive at our revised final list of 31 stocks.This final basket of stocks scores highly on HOLTs quality and momentum scorecard too.May 2019 A hybrid approach to identifying quality-growth stocks Analyst inputs and HOLT threshold yielded our final basket 3 Analyst inputs:We asked our analysts to score the companies on the below parameters and then shortlisted companies with a score of 18+(out of a maximum of 25).#1:US revenue contribution:CS analysts provided scores from 5(best placed)to 1(most impacted)based on sensitivity to the US market.For example,a score of 5 implies 0-10%revenue exposure to US;a score of 1 implies 70-100%contribution.#2:Chinese economic growth:For non-China/HK stocks,an exposure of 70-100%to China revenues led to a score of 1,while 0-10%revenue exposure earned a score of 5.In the case of Chinese stocks,analysts provided their judgement on revenue sensitivity to Chinese economic growth(rather than contribution of China revenues).#3:US-China trade dispute:Companies exposed to the tariff dispute(for example,tech exports)scored low,while those which would not be impacted,scored higher.#4:Fundamental strength of the business:Companies/sectors which are structural growth stories(early growth stage;strong economic moat)scored high,while those with weak sector dynamics(high competition,low entry barriers,etc.)scored low.#5:Valuation relative to history:Stocks trading at a significant premium to historical valuations scored lower,while those which have corrected sharply scored higher.HOLT threshold:We chose stocks that sported at least a 10%CS HOLT CFROI for FY1(or at least 8%CFROI,if the two-year EPS CAGR was over 15%,except for couple of exceptions,where we felt that the companies are going through a cyclical turn).May 2019 A hybrid approach to identifying quality-growth stocks Our final list offers high returns,scores well on HOLT,avoids extreme cases 4 Companies with score over 18(out of 25)while avoiding extreme cases:Among the high-quality companies,we look for stocks,which score at least 18(out of 25)based on analysts scorecard.Among these,for this periods exercise,we avoid stocks,where analysts have given a rating of 1(least)on any of the parameters.This implies that we are avoiding extreme cases(high valuations,high sensitivity/exposure to the US or Chinese economic growth and trade issues).A final basket of 31 stocks.Applying all the above filters,we arrive at our final list of 31 stocks(versus 33 stocks in our January basket)covering the APAC region.The revised basket retains 26 stocks from our original basket and adds five new names.Healthy RoE companies:Average RoE of final basket is 23%,with most companies having RoE above 15%except two(financials trading at 1.2x-1.3x book).High-EPS-CAGR companies with decent HOLT CFROI:Three-fourths of our basket have 2018-20E EPS CAGR of over 15%.For remaining 25%,we note that RoE levels are pretty healthy,and hence we chose to include them in the list,even through earnings CAGR ranges between 10%and 15%.All companies have HOLT CFROI of above 8%.May 2019 Performance of basket since launch The basket outperformed regional indices 5 May 2019 The basket outperformed regional indices by 400 bp since launch(end-January)Kweichow,China Resources and Haitan led performance Astra,Dabur and Motherson were weakest Note:Priced as at 13-May-2019 close.Source:Company data,Credit Suisse 6 Stocks for uncertain times Valuation table May 2019 Note:Priced as at 13-May-2019 close.Source:Company data,Credit Suisse estimates Mkt cap6M ADTOUpsideEPS CAGRP/EP/EP/BP/BEV/EBITDAEV/EBITDARoEDYHOLT CFROINameTickerCountrySectorCurr.US$bn US$mn Price(LC)TP(LC)(%)Rat2018-20E20192020201920202019202020192019FY1Aristocrat LeisureALL.AXAustraliaConsumer Disc.AUD11 40 26 30 16%O14.7 18.9 16.9 7.6 6.2 12.2 10.9 44.4 2.1 35.3 BramblesBXB.AXAustraliaIndustrialsAUD14 30 12 14 10%O14.3 19.2 16.5 8.4 6.5 10.4 9.2 29.7 2.6 10.3 James Hardie JHX.AXAustraliaMaterialsAUD6 25 18 22 19%O11.7 16.4 14.6 6.8 5.8 11.7 10.5 45.5 3.6 12.5 Kweichow Moutai 600519.SS ChinaConsumer StaplesCNY163 470 892 850 -5%O16.0 28.5 24.6 8.4 7.1 18.5 15.7 32.2 1.8 25.7 China Resources 0291.HKChinaConsumer StaplesHKD15 26 36 40 11%O29.1 33.7 26.1 5.0 4.5 19.5 15.4 15.4 0.6 7.9 Ping An2318.HKChinaFinancialsHKD208 374 89 112 26%O17.8 10.4 9.3 2.2 1.9 8.2 6.5 22.1 2.7 16.6 AIA Group1299.HKChinaFinancialsHKD120 189 78 90 15%O68.0 18.0 16.3 2.7 2.5 17.2 15.2 16.1 1.7 13.3 TAL Education TAL.NChinaGlobal ServicesUSD19 31 34 47 39%O35.8 34.9 24.6 6.4 5.1 30.2 19.3 20.3 -14.7 Nari Technology600406.SS ChinaIndustrialsCNY12 66 18 24 28%O22.5 16.2 13.2 2.7 2.4 12.1 9.7 17.9 2.5 14.4 Tencent Holdings0700.HKChinaTechHKD463 828 382 428 12%O30.4 33.6 24.3 7.8 6.0 24.6 18.6 26.1 -20.0 NetENTES.OQChinaTechUSD33 74 255 302 19%O25.1 21.8 16.9 3.7 3.2 21.6 14.9 18.1 1.2 11.2 China Gas Holdings 0384.HKChinaUtilitiesHKD17 27 25 39 57%O23.0 12.4 10.2 3.0 2.5 10.0 8.4 26.8 2.3 12.1 ENN Energy 2688.HKChinaUtilitiesHKD11 21 75 89 19%O55.8 13.2 10.6 2.9 2.4 9.0 7.5 23.5 2.3 11.0 Bosch Ltd.BOSH.BOIndiaConsumer Disc.INR7 6 17,164 23,000 34%O27.5 24.4 19.2 4.1 3.5 15.0 11.0 18.0 0.6 9.2 Motherson Sumi MOSS.BOIndiaConsumer Disc.INR5 17 122 190 55%O27.7 15.0 12.6 2.9 2.5 5.4 4.2 21.0 1.2 7.7 ITC LtdITC.BOIndiaConsumer StaplesINR50 49 290 370 28%O13.3 25.1 22.1 4.5 3.8 17.4 15.0 19.9 2.2 15.2 HDFC BankHDBK.BOIndiaFinancialsINR88 98 2,289 2,700 18%O22.3 24.0 19.8 3.7 3.2 13.8 11.2 16.4 0.9 11.8 Astra InternationalASII.JKIndonesiaConsumer Disc.IDR20 21 7,025 8,800 25%O11.7 11.4 10.5 1.9 1.7 8.3 7.7 18.0 3.5 8.4 Bank Negara Indo.BBNI.JKIndonesiaFinancialsIDR11 13 8,500 10,800 27%O15.6 9.2 7.9 1.3 1.2 6.4 5.6 15.3 3.8 10.3 Nidec6594.TJapanTechJPY40 132 14,880 19,000 28%O29.4 26.5 21.3 3.8 3.4 14.9 12.1 15.3 0.9 8.4 DBS Group DBSM.SISingaporeFinancialsSGD49 68 26 32 23%O11.3 10.5 9.6 1.3 1.2 6.4 6.1 12.9 4.6 12.1 ST EngineeringSTEG.SISingaporeMulti IndustrySGD9 10 4.0 4.6 14%O16.6 20.8 18.7 5.3 5.0 15.0 13.2 26.3 3.7 10.6 Coway021240.KS South Korea Consumer Disc.KRW5 12 78,300 100,000 28%O10.6 14.4 13.2 4.4 3.8 7.4 6.9 32.3 4.1 15.5 LG H&H051900.KS South Korea Consumer StaplesKRW17 33 1,297,000 1,670,000 29%O17.3 24.0 21.6 5.2 4.4 14.6 13.0 20.6 0.8 18.1 NCSOFT036570.KS South Korea TechKRW9 38 511,000 670,000 31%O50.0 23.4 11.9 4.4 3.4 16.9 8.4 20.4 1.4 13.9 CTBC Holding2891.TWTaiwanFinancialsTWD13 20 21 24 14%O10.8 10.5 9.3 1.2 1.1 5.0 4.5 12.0 4.7 8.8 Largan Precision3008.TWTaiwanTechTWD18 93 4,250 5,400 27%O15.0 20.5 17.7 4.5 3.9 13.1 10.6 23.8 1.8 18.3 Advantech 2395.TWTaiwanTechTWD6 6 248 275 11%O17.7 23.5 19.8 5.4 4.8 17.3 14.4 23.9 3.0 15.3 C.P.ALL PCLCPALL.BKThailandConsumer StaplesTHB22 57 76 90 18%O15.3 29.2 25.3 8.6 7.4 17.1 15.5 33.0 2.1 16.2 Thai BeverageTBEV.SIThailandConsumer StaplesSGD14 12 0.77 0.91 19%O14.7 16.8 16.0 3.3 3.0 19.4 18.3 20.6 2.8 15.0 Muangthai CapitalMTC.BKThailandFinancialsTHB3 16 49 55 12%O27.1 22.2 17.1 6.3 4.8 17.5 13.5 32.4 0.7 29.6 7 Stocks for uncertain times Analysts scores on five parameters and price performance May 2019 Note:Priced as at 13-May-2019 close.Source:Company data,Credit Suisse estimates Mkt cap6M ADTOCompanyTickerCountrySectorCurr.US$bnUS$mnUS growthChina growthTariff disputeFund.strengthValn v/s historyTotal score1M3M12MAristocrat LeisureALL.AXAustraliaConsumer Disc.AUD11 40 2553419.0 1.1 3.7 (8.5)BramblesBXB.AXAustraliaIndustrialsAUD14 30 4554422.0 3.6 10.5 26.0 James Hardie JHX.AXAustraliaMaterialsAUD6 25 2524518.0 (0.6)7.3 (22.2)Kweichow Moutai 600519.SS ChinaConsumer StaplesCNY163 470 5455221.0 (2.4)24.2 24.2 China Resources 0291.HKChinaConsumer StaplesHKD15 26 5355220.0 5.6 19.6 1.3 Ping An2318.HKChinaFinancialsHKD208 374 5554322.0 (4.1)14.7 14.4 AIA Group1299.HKChinaFinancialsHKD120 189 5355321.0 (1.7)6.8 7.1 TAL Education TAL.NChinaGlobal ServicesUSD19 31 5454220.0 (9.6)2.0 (18.3)Nari Technology600406.SS ChinaIndustrialsCNY12 66 5544321.0 (14.9)(7.0)0.2 Tencent Holdings0700.HKChinaTechHKD463 828 5354219.0 (3.0)8.7 (6.5)NetENTES.OQChinaTechUSD33 74 5353218.0 (7.2)4.2 (4.9)China Gas Holdings 0384.HKChinaUtilitiesHKD17 27 5455423.0 (2.0)(3.5)(15.5)ENN Energy 2688.HKChinaUtilitiesHKD11 21 5454422.0 (2.9)(4.3)(0.4)Bosch Ltd.BOSH.BOIndiaConsumer Disc.INR7 6 5552421.0 (4.3)(7.8)(7.7)Motherson Sumi MOSS.BOIndiaConsumer Disc.INR5 17 4543420.0 (18.1)(5.2)(45.9)ITC LtdITC.BOIndiaConsumer StaplesINR50 49 5553321.0 (5.2)5.2 2.1 HDFC BankHDBK.BOIndiaFinancialsINR88 98 5555323.0 1.1 7.5 13.9 Astra InternationalASII.JKIndonesiaConsumer Disc.IDR20 21 5554423.0 (6.0)(8.2)(0.4)Bank Negara Indo.BBNI.JKIndonesiaFinancialsIDR11 13 5544422.0 (11.9)(4.5)2.7 Nidec6594.TJapanTechJPY40 132 3345318.0 (3.4)11.8 (14.2)DBS Group DBSM.SISingaporeFinancialsSGD49 68 5443.5420.5 (3.6)6.8 (11.8)ST EngineeringSTEG.SISingaporeMulti IndustrySGD9 10 3545421.0 5.8 8.0 19.2 Coway021240.KS South Korea Consumer Disc.KRW5 12 5553422.0 (16.0)(5.9)(14.7)LG H&H051900.KS South Korea Consumer StaplesKRW17 33 4355320.0 (9.4)7.2 (1.2)NCSOFT036570.KS South Korea TechKRW9 38 5544422.0 1.0 17.9 53.7 CTBC Holding2891.TWTaiwanFinancialsTWD13 20 3534419.0 2.4 2.4 (4.1)Largan Precision3008.TWTaiwanTechTWD18 93 4434.5419.5 (7.6)6.3 4.3 Advantech 2395.TWTaiwanTechTWD6 6 4435420.0 (0.2)10.2 18.9 C.P.ALL PCLCPALL.BKThailandConsumer StaplesTHB22 57 5554423.0 (1.0)(1.6)(10.8)Thai BeverageTBEV.SIThailandConsumer StaplesSGD14 12 5543320.0 (5.6)6.3 (5.6)Muangthai CapitalMTC.BKThailandFinancialsTHB3 16 5554423.0 (2.0)0.5 20.5 Analysts scores(5 implies best placed)Stock performance(%)8 HOLT Review May 2019 HOLT Review CFROI is more than twice that of the market 9 May 2019 Aggregate CFROI Profile(Research Basket HOLT net asset weighted)Aggregate CFROI Profile(Asia Pacific ex Japan HOLT net asset weighted)CFROI well above cost of capital:An aggregate view of the basket suggests that on a bottom-up basis,the analyst team has identified a group of companies with a CFROI that is well above that of the market and cost of capital.These companies have done so,while also generating above average asset growth,indicative of strong value creation over time.Note:We compare the Equity Research Basket to HOLT APAC ex Japan universe(excluding China A shares and Japan).Source:Credit Suisse HOLT LensTM HOLT Review Favourable profile on the HOLT Scorecard 10 May 2019 The HOLT Scorecard uses three composite alpha factors to discern the Operational Quality of a firm,the market sentiment of its stock(Momentum),and the relative attractiveness of the current stock price(Valuation).A comparison of the basket to the market suggests that on a bottom-up basis the research team has identified stocks with Operational Quality that are well ahead of the market.The Momentum characteristics of the basket are in line with the overall market,and while Valuation appears to be more expensive,this is generally the price one pays for stocks with these strong Quality characteristics.Note:Portfolio:Research Basket equal weighted.Benchmark:MSCI Asia Pacific ex Japan stocks are weighted by market cap.The decision to use MSCI APxJ as the benchmark is because there is only one Japanese company in the basket.Furthermore,the observations are not materially different if we compare the basket to MSCI Asia Pacific.HOLT has also excluded China A-shares from the benchmark constituents.Source:Credit Suisse HOLT LensTM HOLT Review Valuation premium over broader market has narrowed significantly 11 May 2019 HOLT P/E(x)The chart on the left further compares the HOLT P/E multiple of the basket to the broader market.Both have risen sharply since 4Q 2018,with the basket outpacing broader market P/E.Relatively,the valuation premium of the basket now stands at 31%,still narrower than its 10-year median of 37%and peak Jan-2018 premium of 53%.This suggests that the group of companies still trades more attractively than is typical.HOLT P/E Premium(%)Note:HOLT P/E multiples are net asset weighted.Source:Credit Suisse HOLT LensTM HOLT Review Quality at any Price and eCAP companies remain prevalent in the basket 12 May 2019 Classifying the companies along our HOLT investment styles,Quality at any Price and Quality Traps are well represented in the basket.Both groups of companies have high CFROI,with the former also exhibiting stronger earnings revisions compared to peers.Similar to the last edition,almost one-third of the portfolio is eCAP companies;these are companies that have the best track record of maintaining high and persistent economic returns over time.Recent HOLT APAC Style Watch,also indicates that Quality as a factor generated higher long/short returns in April and over the last 12 months.Note:eCAP is a HOLT acronym for empirical competitive advantage period.To earn an eCAP award,a firm must generate CFROI equal to or above 8%for five years,have low CFROI volatility,and show low decay(or mean-reversion)in profitability.Across the HOLT database of over 20,000 companies,only around 6-8%of our companies are classified as eCAP or Quality at any Price.The list is sorted in market cap order.Source:Credit Suisse HOLT LensTM HOLT Review Basket names ranked by HOLT Overall Scorecard Score 13 May 2019 The basket has above-average characteristics on the HOLT Scorecar