廉价的资金更好的收益还有多少上涨空间

1、Global Research6 August 2020Equity StrategyAPAC Equity StrategyAsia PacificCheap money, better earnings. How much upside?We lift our MSCI Asia ex Japan target to 670 but struggle to see much upside We were bullish at the end of March but the extent of the rally has surprised us. Cheap money and reco

2、vering earnings are instinctively a positive backdrop. However, despite a desire to be upbeat, were struggling to use historic precedent to make a bull case now after a 40% rally from March lows. Our valuation models, sentiment and earnings analysis point to some downside by year end.Earnings not as

3、 bad as we feared we now expect -10% EPS growth this year In early April, we cut our earnings forecasts for this year to -25%, with a high degree of uncertainty. Our models, macro and micro data, signals from the early reporters in the 2Q earnings season and a weaker US dollar now suggest that earni

4、ngs are not likely to be as bad as we feared. We now project -10% EPS growth this year (consensus at -2%) and 36% growth for next year. The rise in our 2021 EPS estimate (in line with consensus) drives the increase in our index target from 625 to 670.Better earnings appear priced-in. Our index targe

5、t is 4% below current levels Equities are trading at 15.6x forward earnings, 1 standard deviation above mean and just shy of their levels in the early stages of recovery in 2009. The difference then was a near 40% peak-to-trough earnings decline, and a bigger rebound to come. Thats not the case toda

6、y. We have sympathy with the view that low rates will support higher valuations, partly on an asset allocation switch for yield. However, there is little evidence of this high yield stocks with stable dividends have underperformed since early April suggesting limited demand (so far) for equity incom

7、e in a zero rate world.Calibrating the (non earnings) upside scenarios another 13% to come?This could be an abnormal environment with both a cyclical improvement and yield curve control limiting any back-up discount rates. As a scenario analysis, if 1. cyclicals rebounded in line with their multiple

8、s in past recoveries (we are overweight Korea and Japan to play this theme), 2. higher yield stocks re-rated in line with their yield gaps to government bonds, and 3. growth stocks re-rated in line with lower discount rates, combined this could push the market up 13.3% from current levels leaving th

9、e market on an eye-watering 12m forward P/E of 17.8x today. Thats not our base case, but a credible upside-risk scenario. We think equities are fully priced for now, and investors are better paid to play relative returns with our core call being to overweight Korea and Japan where we still think val

10、uations and recovery interact well together.Niall MacLeodStrategist HYPERLINK mailto:niall.macleod niall.macleod+852-2971 6186Matthew GilmanStrategist HYPERLINK mailto:matthew.gilman matthew.gilman+852-2971 8173Jiamin Shen Associate Strategist HYPERLINK mailto:jiamin.shen jiamin.shen+852-3712 3126 H

11、YPERLINK /investmentresearch /investmentresearchThis report has been prepared by UBS Securities Asia Limited. ANALYST CERTIFICATION AND REQUIRED DISCLOSURES BEGIN ON PAGE 21. UBS does and seeks to do business with companies covered in its research reports. As a result, investors should be aware that

12、 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.Asia-Pacific Equity Strategy OutlookUBS Research THESIS MAPMOST FAVOREDLEAST FAVOREDKorea, Japan, SingaporeChi

13、na, Taiwan, Hong Kong, ThailandPIVOTAL QUESTIONSQ. How much do earnings fall?The outlook is still highly uncertain, but we expect Asia ex Japan earnings to fall c.10% in 2020. We expect a 30%+ rebound in earnings in 2021 to bring the earnings level back up to its prior peak. This would be in- line w

14、ith previous recoveries that typically see earnings back at peak 12 months after they trough, but a slightly earlier trough would also suggest some upside risk to our 2021 forecast.Q. Whats fair valuation?Assuming an economic rebound in H2 2020, we see Asia ex Japan equities re-rating back slightly

15、above their long-run average fwd P/E multiples of 13.2x by year end. Easy money and recovering earnings are a beguiling combination, but the market hasnt sustained multiples much in excess from current levels for long. Upside risk to multiples mainly comes from equities relative attractiveness versu

16、s bond yields.UBS VIEWEnd-2020 index target of 670 for MSCI Asia ex Japan, and 1,690 for the TOPIX. We see equities remaining volatile in the near-term until there is greater clarity on the earnings/economic outlook. We expect economic activity to improve in H2 and expect equities to be pricing in 2

17、021s earnings rebound at the end of this year.RISKSCOVID-19 is the biggest uncertainty today and the degree to which the virus spreads and the economic disruption is highly uncertain. Oil prices, US-China trade war, remain other sources of risk.We estimate that Asia ex Japan equities are pricing in

18、a substantial earnings recovery in 2021.WHATS PRICED IN?UPSIDE/DOWNSIDE SPECTRUMEarnings adjustment lifting our forecasts from -25% to -10%In early April, we cut our earnings growth forecasts to -25% for this calendar year. Since weve been trying to tighten our calibration of this estimate.On the ne

19、gative side, 1., our higher frequency data points continue to suggest downside risk to earnings in the short-term (see our Earnomitor below which makes predictions about the direction of estimates two-three months out).Aggregated implied earnings revision Earnomitor projection22 sectors earnings 3m

20、revision AxJ earnings 3m revisionFigure 1: Earnomitor suggests estimates are likely to fall in the short-term15%10%5%0%-5%-10%-15%Oct-10 Oct-11 Oct-12 Oct-13 Oct-14 Oct-15 Oct-16 Oct-17 Oct-18 Oct-19Source: CEIC, Datastream, UBS2. Our earnings prediction models still point to double digit earnings c

21、ontraction this year. At the very least, -0.2% year on year nominal GDP growth is inconsistent with revenues expanding, meaning that margins would need to be slightly up for earnings to be flat (see our note on June 24th for more details).On the other hand, 3., we know that rising PMIs generally mea

22、n revisions getting less bad over time with a lag. If PMIs keep advancing into next year, wed expect some updrift in EPS in the second half or first half of 2021.Figure 2: AxJ 3m EPS revisions vs US+China PMIs3m chg to FY1 EPSUS+China PMI new orders706560555045403530050709111315171920%15%10%5%0%-5%-

23、10%-15%-20%-25%-30%Source: Refinitiv, UBSFinally, despite recession, 4. EPS estimates are hardly falling. Its early in the reporting season, a net 11.7% of companies missing expected earnings, but estimates for 2020 and 2021 EPS are largely unchanged.Figure 3: Consensus growth rates for Asia ex Japa

24、n EPSFigure 4: Consensus EPS level rebased to 100 at start year2020 Consensus EPS growth Asia ex Japan%2021 Consensus EPS growth Asia ex Japan%Jan 20%Feb 20Mar 20Apr 20May 20Jun 20Jul 2030%2520151050-51202020 Consensus EPS level rebased to 100 2021 Consensus EPS level rebased to 10011511010510095908

25、580Apr 20May 20Jun 20Jul 20Source: UBS, RefinitivSource: UBS, RefinitivDespite a majority of companies missing estimates, Figure 5 shows that our sample is not seeing significant earnings downgrades on a weighted basis, either for 2020 or 2021 consensus EPS.Figure 5: Change in Consensus estimates ov

26、er the last four weeksChange inChange inChange inChange inChange in Change in2020 EPS2021 EPS2020 EPS2021 EPS2020 EPS2021 EPSLG Display18.0%165.8%Bharti Infratel0.1%0.8%Samsung Electronics1.8%-2.4%Mediatek13.3%23.1%Kweichow Moutai A0.1%0.6%Siam Cement-4.3%-2.6%Delta Electronics23.6%22.2%Tata Consult

27、ancy Svs.-1.2%0.4%Siam Cement-4.3%-2.6%LG Chem34.2%13.5%Unilever Indonesia-0.6%0.1%Digi.Com-3.4%-2.7%Lite-On Technology12.7%12.6%Maxis0.0%0.0%Home Product Center-1.8%-3.2%Asian Paints-8.7%10.9%Taiwan Semiconductor-0.2%0.0%LG Hhld.& Hlth.Care-3.0%-3.6%Hyundai Motor8.5%9.5%Shai.Ljz.Fn&T.Zone Dev.-2.6%

28、-0.2%Nan Ya Plastics-3.1%-4.5%Infosys8.1%8.1%Samsung SDI-7.2%-0.2%Largan Precision-5.8%-5.0%Ambuja Cements11.7%7.5%Taishin Financial Hldg.2.1%-0.2%Astra International-3.8%-5.0%ACC9.7%6.0%Samsung C&T-0.4%-0.3%Formosa Plastics-11.7%-5.4%Kia Motors3.2%5.6%Yum China Holdings2.7%-0.4%Formosa Petchemical-

29、2.4%-6.2%Marico3.5%4.1%Nestle India-0.4%-0.4%Bangkok Bank-6.6%-6.9%LG Innotek1.8%3.9%Wghtd Ave Change-0.2%-0.5%Formosa Chem.& Fibre-19.5%-7.4%Charoen Pokphand Indo.5.6%3.0%Korea Zinc-4.5%-0.6%Keppel-50.0%-7.7%Samsung Card8.7%3.0%Hindustan Unilever-1.8%-0.7%S-Oil23.6%-8.1%Tech Mahindra4.0%2.7%Bajaj A

30、uto-4.6%-0.8%Jardine Cyc.& Carr.-17.8%-8.3%Wipro6.0%2.4%Hyundai Mobis-7.0%-0.9%SK Hynix-5.7%-9.0%KB Financial Group4.2%2.1%Hyundai Engr.& Con.-9.4%-0.9%SK Innovation36.3%-9.1%Shinhan Finl.Group1.8%1.9%United Tractors-3.5%-1.0%Krung Thai Bank-9.5%-9.6%Samsung SDI2.6%1.8%Hyundai Glovis-1.5%-1.2%BDO Un

31、ibank-11.8%-9.6%JSW Steel31.0%1.8%Jiangsu Hengrui Med-0.8%-1.2%Siam Com. Bank-7.2%-9.9%Far Eastone Telecom.0.0%1.8%Larsen & Toubro-6.3%-1.5%TMB Bank-13.3%-10.0%Kalbe Farma0.8%1.7%Gudang Garam-1.0%-1.9%POSCO-20.3%-10.2%Hangzhou Hikvision2.8%1.5%PTT E&P6.6%-1.9%Amorepacific-23.0%-11.0%Samsung Elto.Mec

32、hanics-0.3%1.4%President Chain Store-2.5%-1.9%Kasikornbank-22.4%-20.3%Advantech0.2%1.0%Indl Bank Of Korea-3.5%-2.4%AU Optronics-20.0%-53.8%Naver-1.9%0.8%Capitaland Mall Trust-6.6%-2.4%Source: Refinitiv, UBSWhile there is a broad mix of companies seeing large downgrades, the weighted result is a mode

33、st 0.2% downgrade to this years numbers and 0.5% downgrade to 2020, during what we think is likely the weakest quarter for growth this year.It takes time for results to feed into consensus EPS estimates and there are some large markets (such as China) and sectors (for example Energy and Banks) that

34、are not fully represented in this data. But were not seeing the sort of patterns that are consistent with our -25% EPS contraction that wed previously expected.Taking all of this into account, we still think earnings are likely to be cut, but we raise our 2020 EPS forecast from -25% to -10%. This is

35、 still 8% below the current consensus forecast for calendar 2020 EPS.2021 EPS is the integer that really matters nowWhat matters for our index target however is the estimate for calendar 2021. This is what we base our 12 month forward PE on at year end. We had been expecting earnings in 2021 to larg

36、ely be back to their end 2019 levels, in line with past recession recoveries. See Figures 6-8 below.Figure 6: Trailing AxJ EPS trends during historical recessions and current cons. bottom-up estimates 199920092020 20012016150Figure 7: Global real GDP (US$) trends during historical recessions 1999200

37、9202020012016115Figure 8: AxJ real GDP trends (US$) during historical recessions 200920201999200120161251001051055095850-36-24-120122436Months from trough trailing EPS85-12-8-404812Quarters from trough trailing EPS65-12-8-404812Quarters from trough trailing EPSSource: Datastream, UBS. Note: the peak

38、s before recessions are rebased to 100.Source: Datastream, UBS. Note: global real GDP is in USD and the peaks before recessions are rebased to 100Source: Datastream, UBS. Note: AxJ real GDP is in USD and the peaks before recessions are rebased to 100While 2020 earnings might not be as bad as feared,

39、 this means that earnings dont have as much scope to bounce back in 2021 in a cyclical sense. We do see some scope however to increase our estimates a little for 2021.Figure 9: Historic and Forecast EBIT Margins, Asia ex Japan14%13%12%11%10%9%8%7%6%Q4 2006Q4 2007Q4 2008Q4 2009Q4 2010Q4 2011Q4 2012Q4

40、 2013Q4 2014Q4 2015Q4 2016Q4 2017Q4 2018Q4 2019Q4 2020Q4 20215%Source: UBSRecognising that 1. 2020 EPS may not be as bad as feared, 2. Rising leading indicators, with a lag, are likely to boost revisions in to next year, 3. The USD dollar has weakened (on a translation effect since late March, this

41、adds 3.1% to earnings), we think the 2021 consensus estimate (currently 49.8 index points) now looks achievable and this becomes our new forecast.Figure 10: Asian currencies have appreciated versus the USD since March 2314%12%10%8%6%4%2%0%Source: UBS, Bloomberg, Refinitiv. Note: Asia FX is a market

42、cap weighted change in FX.Wed emphasise that there is considerable uncertainty around this still both on the downside (worse recovery and rolling lockdowns; much higher credit losses for banks) and on the upside if demand is much stronger. But we are now using the consensus 2021 earnings integer as

43、our base case.What this does to our index target?For our index target multiple, wed previously been using a long-run average forward P/E for our index calibration (this is 13.2x).Figure 11: Forward P/E multiples coming out of previous growth troughstrough19909/28/1990136.539.559.558.569.159.4310.221

44、0.2211.3511.9512.0912.5519989/1/1998136.8212.7415.2815.2820.1721.1620.7822.6429.6829.6823.6020.5620019/21/2001149.0612.6312.6113.3914.1114.6914.6714.8114.9113.3011.5410.0720034/25/2003161.659.0410.0110.6211.3011.8712.0712.2911.7812.1613.2411.81200810/27/2008230.937.029.3710.9110.6011.4813.5514.0115.

45、5115.4015.4114.54201110/5/2011416.138.9610.8310.7610.2711.1811.3611.1410.959.7610.3911.1520161/21/2016435.3810.5111.1812.3112.4011.5712.2412.7512.8613.1612.9712.4803 08 11 16 Ave8.8810.3511.1511.1411.5312.3012.5512.7812.6213.0012.49Max10.5111.1812.3112.4011.8713.5514.0115.5115.4015.4114.54Min7.029.3

46、710.6210.2711.1811.3611.1410.959.7610.3911.15Source: Refinitiv. UBSfwd PEDateMarketfwd PE1m after 2m after3m after 4m after 5m after 6m after 7m after 8m after 9m after1y afterThis was based on the historical evidence that ex 2008 and 1998, the two deep earnings recessions, the forward P/E generally

47、 didnt re-rate much above trend, nine months after the trough. Generally however, markets do trade higher than their averages of a cycle, in the early stages of that cycle.Taking into account 1. Earnings havent fallen as much as a normal downturn, so theres less scope for a significant earnings reco

48、very (unlike 1998 and 2008). 2. The uncertainty about the pace of this recovery than perhaps past recoveries, giventhe nature of the pandemic 3. There is more fiscal support than normal and rates are low. 4. Monetary support is unprecedented; we think a forward P/E at or slightly above average on ba

49、lance seems appropriate for the market overall. 2009 EPS level rebased to 100 in the nine months up to mid March 2009 (weeks from trough on X axis)2020 EPS level rebased to 100 in the nine months up to mid July 2020Figure 12: Earnings havent fallen all that much relative to past cycles11010090807060

50、50403020393633302724211815129630Source: UBS, RefinitivFigure 13 sets out the range of outcomes though based various metrics.Figure 13: How the index changes under various assumptionsPE methodologyOld 2021 EPSNew 2021 EPS (consensus)Average forward P/E, nine months after trough616643Long run average

51、forward P/E626652Typical cyclical pick-up, forward P/E slightly above trend (13.5x)652670Highest forward P/E, nine months post trough in recovery730761Source: UBS, RefinitivTaking our new EPS into account, and acknowledging the risk of a slightly higher multiples than past recoveries, we think the r

52、ange for our 12 month target should be somewhere between 643 and 670 on the index by year end. Our new index target is 670 on MSCI Asia ex Japan slightly above long-term average multiples at the end of this year.Cheap money, recovering economy. Why not more positive?So why are we not more constructi

53、ve with PMIs rising and easy monetary policy in line with our earlier expectations? There are a few reasons:Firstly, sentiment has already hit high levels, as evidenced by excessive retail flow.Figure 14: Net retail flow relative to market cap in standard deviation6JapanThailandKoreaMalaysia543210-1

54、-2-3-40708091011121314151617181920Source: CEIC, Datastream, UBSGenerally, returns have been negative when retail investors have been this aggressively positive.Figure 15: Summary of market performance when retail flow exceeds 1.5x s.d.JapanThailandKoreaMalaysiaNumber of cases since Jan 2007111399Ave

55、rage market return after 1m-8.9%-10.4%-4.6%-2.3%Average market return after 3m-7.4%-9.7%-2.9%-6.5%Average market return after 6m-6.0%-5.7%-5.6%-7.0%Source: CEIC, Datastream, UBSSecondly, and valuations are already very rich and at levels from which positive returns have been more hard to come by. As

56、ia ex Japan equities are trading at 15.6x forward earnings, one standard deviation above trend, and at levels rarely seen outside bubbles. Basically earnings need to deliver to maintain these valuations.Asia ex Japan F/PE average+1 st dev-1 st devFigure 16: Long run average forward P/E3530252015105-

57、Jan 90Jan 93Jan 96Jan 99Jan 02Jan 05Jan 08Jan 11Jan 14Jan 17Jan 20Source: UBS, RefinitivSince 2006, returns have generally been negative from these levels on a six month view. 2009 is an exception, but as we showed earlier, this was largely due to the drop in margins/earnings that set up a substanti

58、al recovery in EPS. Its extremely unlikely that earnings will grow at anything like the same degree in 2021.Figure 17: Six month returns from various forward P/E levels, since 2006 (vertical line = current forward P/E)1011121314151617186m forward returns from various forward P/E levels80%60%40%20%0%

59、-20%-40%-60%Figure 18: Returns are generally negative from current levels. Though 2009 shows positive returns are possible.Monthly EpisodeFPE6 m return12 month return10/31/200717.5-16.3%-59.1%9/28/200716.1-14.2%-40.3%5/29/200915.819.6%17.0%12/31/200715.8-22.1%-53.6%11/30/200715.6-11.8%-58.0%7/31/200

60、915.64.7%11.9%Average-6.7%-30.4%Source: UBS, RefinitivSource: UBS, RefinitivInvestor push-back: low yields are spurring equitiesWhat If we are in a new paradigm, where historical valuations dont matter? For sure, relative valuations look attractive. This case been made for most of the last 10 years