FIRSTLIGHTASIA：WHAT’SCHANGEDRESEARCHFOCUSTODAY’SEVENTS0201

1、s oil, china please gold mining, texte downgrade crcc and ccc to n(v); prefer csr corp, csci and crg gold mining - reducing our gold price assumptions, but staying bullish; q4 earnings mixedpatrick chidley slightly higher q4 gold prices should support a modest q-on-q improvement in eps, but conserva

2、tive 2013 guidance may be disappointing south african miners hit by strikes, but radical restructuring now getting underway, led by the sibanye spin-out reduction in our gold price outlook results in significant cuts in target prices across our coverage; we downgrade agnico eagle to underweight (v)

3、from neutral (v) and royal gold to neutral from overweight, but continue to see upside at other gold miners korea e reiterate ow(v) on zhaojin (tp of hkd14.94 from hkd16.5) primarily on valuation guangshen railway (525 hk) - initiate ow: get on boardanderson chow* 2013e earnings recovery is driven b

4、y organic growth from increased operating frequency for the companys rail services the company should benefit from railway industry reform, which would improve network connection and non-fare revenue, and, potentially, passenger tariff reform we initiate coverage with an overweight rating and set a

5、target price at hkd4.5 using a dcf approach cnooc ltd (883 hk) - ow: disappoints again; darkest before the dawnthomas hilboldt* cnoocs disappointing 2013e production target is flat yoy but management reiterated the 2011-15e production growth target of 6-10% cagr, of which 4-5% will come from offshor

6、e china. nexen may start to contribute in 2q 2013. production miss should be offset by nexen production and earnings accretion, and a strong start to the oil price in 2013; we have a hkd18.4 target price, and cnooc is our sole ow among the china oil majors hang lung properties (101 hk) - ow: moving

7、ahead with pre-leasing and inventory sales solid fy12 results with good progress made with center 66s pre-leasing potential rejuvenation of hk property sales could serve as a funding source and a potential catalyst maintain ow rating with a price target of hkd32.5 (up from hkd30) on a higher nav est

8、imate perveen wong* tingyi (322 hk) - ow: beverage recovery key to earningschristopher k leung* we see mild headwinds from higher input costs, but believe beverage sales and margin are on track for a 2013 recovery, thanks to market share gain and turnaround in pepsi business we lower our 2013-14e ea

9、rnings by 4-6% to reflect higher wheat flour and palm oil cost assumptions reiterate overweight but cut tp to hkd26.40 (from hkd29.00) to reflect lower earnings, higher beta due to higher uncertainty on input cost and dcf rollover uni-president china (220 hk) - uw: rising margin and capital raising

10、riskschristopher k leung* aggressive capacity expansion could drive top-line growth, but this is likely to be complemented by higher a we remain selective on the sector lg uplus corp. (032640 ks) - ow: to consolidate lte gains in 2013 lg uplus targets 75% of subscribers on lte by end-2013, driving 1

11、0% growth in service revenues expect margins to recover as lte subscriber migration normalises overweight: dcf derived tp unchanged at krw10,600 taiwan taiwan - 4q 2012 gdp expands at fastest rate in over a year unimicron (3037 tt) - downgrade to uw(v): the capex sinkhole siliconware precision (2325

12、 tt) - downgrade to n: deeper 1q13 trough mediatek (2454 tt) - ow: 1q13 likely the trough novatek (3034 tt) - ow: increasing confidence on resolution upgrade largan precision (3008 tt) - uw(v): upbeat results but uncertainties ahead asean japan - slow awakening: december ip expands malaysia - bnm st

13、ands pat but sees external improvements rbnz observer update - on hold, but expect inflation to rise the philippines - ending on a high note: 4q gdp exceeds expectations the rba observer - on hold next week: easing phase may be done grounded in realty - asean real estate fortnightly bank of the phil

14、ippine islands (bpi pm) - uw: more sustainable earnings ahead neale anderson* donna kwok tse-yong yao* steven c. pelayo yolanda wang* jerry tsai* yolanda wang* izumi devalier su sian lim paul bloxham trinh nguyen paul bloxham pratik burman ray* xiushi cai* bank rakyat indonesia (bbri ij) - uw: 2012

15、earnings were solely driven by lower credit costs india india: managing resource stress - twelfth five year plan targets resource pinch points colgate-palmolive (clgt in) - ow: earnings miss led by a q4 earnings mixed summary of rating and target price changes abc global research slightly higher q4

16、gold prices should support a modest q-on-q improvement in eps, but conservative 2013 guidance may be disappointing south african miners hit by strikes, but radical restructuring now getting underway, led by the sibanye spin-out _ target price _ new old _ rating _ new old reduction in our gold price

17、outlook african barrick agnico-eagle anglogold ashanti barrick centerra gold eldorado goldcorp gold fields harmony gold hochschild iamgold kinross newmont petropavlovsk polymetal randgold 555 46.00 52.00 47.70 14.60 15.50 45.00 16.50 12.40 5.00 13.70 15.20 59.00 540 1,480 125.00 670 56.00 61.00 62.7

18、0 17.90 19.00 57.00 22.00 15.80 5.90 17.80 17.90 84.00 760 1,590 146.00 ow(v) uw(v) ow ow ow(v) ow(v) ow ow ow(v) ow ow(v) ow(v) ow ow(v) ow ow ow(v) n(v) ow ow ow(v) ow(v) ow ow ow(v) ow(v) ow(v) ow(v) ow ow(v) ow(v) ow results in significant cuts in target prices across our coverage; we downgrade

19、agnico eagle to underweight (v) from neutral (v) and royal gold to neutral from overweight, but continue to see upside at other gold miners the gold price in q4 rose from q3, but despite what we viewed as strong macro fundamentals, it peaked at usd1,792/oz, and the price only managed to average usd1

20、,718/oz for the quarter. royal gold 84.30 98.50 n ow yamana 17.00 18.80 uw uw target prices in usd except african barrick, polymetal, petropovlosk and hochschild which is in gbp, and centerra, in cad. hsbc ratings: ow = overweight, n = neutral, uw = underweight, v = volatile source: hsbc 31 january

21、2013 patrick chidley, cfa analyst hsbc securities (usa) inc. although better than the prior quarter, we find the average price disappointing. gold stocks had a tough time in q4 and the ftse gold mines index ended down 15% for the quarter, continuing the de-rating of the sector and as gold itself end

22、ed the year on a down note. just as cost trends were beginning to show some signs of getting back under control, the quarter was unfortunately marked by +1 (212) 525 severe strike activity in south africa, which has dashed hopes botir sharipov, cfa analyst hsbc securities (usa) inc. +1 (212) 525 515

23、0 view hsbc global research at: http:/ issuer of report: hsbc securities (usa) inc disclaimer despite south african strikes, gold fields ground-breaking spin-off deal may be copied elsewhere and help to break the de-rating trend reduced gold price forecasts result in significantly lower target price

24、s, although we remain moderately bullish on gold and most companies still offer good upside abc summary and industry view the momentum gained by gold prices during the end of q3 2012 faded in october, remained relatively stable in november, but lost some ground towards the end of december. thus, gol

25、d prices averaged 4% higher as compared to q3 but, in our opinion, were disappointing, given continued rapid increase in the monetary supply, combined with weak economic activity in the us and europe and rising debt levels. however, the increase in the average gold price in q4, though fairly small,

26、should positively affect gold companies results, relative to q3 results. in 2012, the gold price continued its bull run as it gained c6% but, despite this, market continued to 2 sell gold stocks as ftse gold miners index (ftmigmi) was down c15% during 2012. on the cost front, the impact of a lower a

27、verage oil price in the current quarter should filter through in q1 2013 for many gold companies. no impact should be visible in the q4 quarter as oil prices were flat in q3 2012 as compared to q2 2012, with the assumption of a three month lag. however, slightly higher base metals average prices sho

28、uld positively affect producers with higher dependence on by-product revenues, such as goldcorp, yamana, royal gold, newmont, and barrick. for producers that are exposed to fx fluctuations, the impact should be muted for the fourth quarter, as currencies except zar and eur, were flat relative to q3

29、2012. natural resources and energy global metals and mining 31 january 2013 with the exception of strike-hit south african producers, we expect a slightly stronger q4 operating performance in most cases due to modest improvements in grades and throughput at many mines in the final quarter, as expect

30、ed. looking forward into 2013, the year should begin to show some of the benefits of the large capital expenditures, which the industry has been making for a few years. many companies, including the larger cap players, will bring new mines online in 2013. barrick and goldcorp have declared commercia

31、l production at pueblo viejo in the dominican republic, and this mine should produce some 1moz/year for over 25 years. by the end of the year, newmont should be commissioning its akyem mine in ghana, set to be a c400koz/year operation. also towards the back end of the year, anglogold and randgold sh

32、ould complete construction at kibali which should grow into a 600koz/year mine. also, q4 2012 commodity update metals prices were volatile in q4 2012. the upward momentum gained towards the end of q3 2012 faded in first month of q4 2012. however, metals prices were able to sustain the levels as most

33、 of them averaged higher as compared to previous quarter. the gold price averaged usd1,718/oz in q4 2012, 4% above q3 2012 average price. silver outperformed gold, as the average price for the quarter was 9% above the q3 2012 price. the base metals also recorded higher average prices as compared to

34、previous quarter as well as the same quarter in the previous year. slightly higher base metals prices should positively affect the performance of the gold miners with higher dependence on by-product revenues, such as goldcorp, yamana, royal gold, newmont, and barrick. table 1. metals, oil, and produ

35、cer currency performance in q4 2012 (average) abc anglogold should be commissioning itsq4 2012 q3 2012 % change q4 2011 % change tropicana mine by the end of the year, a potential 470koz/year operation. in addition, goldcorp should add new production at its cerro negro mine in argentina, which shoul

36、d add up to 600koz/year and gold fields should turn the corner on the ramp up in production at its south deep mine. all these, of course, may experience further delays or start up issues, and will no doubt be partly offset by declining production at more gold silver copper zinc lead nickel wti oil u

37、sdcad usdeur usdaud usdbrl usdgbp usdclp usdzar 1,718 32.61 3.59 0.88 1.00 7.70 88 0.99 0.77 0.96 2.06 1.61 477.70 8.69 1,653 29.82 3.50 0.86 0.90 7.41 92 1.00 0.80 0.96 2.03 1.58 482.24 8.26 4% 9% 3% 3% 11% 4% -5% 0% -4% 0% 1% 2% -1% 5% 1,682 31.8 3.41 0.86 0.90 8.34 94 1.02 0.74 0.99 1.80 1.57 511

38、.91 8.11 2% 3% 5% 2% 10% -8% -7% -3% 4% -3% 14% 2% -7% 7% mature mines. however, this year will mark the turning point in production declines for many of the larger producers, we believe, all else equal. however, we do see potential for the larger producers to slim down and believe asset sales and/o

39、r further spin-out deals of certain mines could be more frequent as companies seek to upgrade portfolios to become more investor friendly due to investor fears regarding the sustainability of rising gold prices combined with source: datastream the average oil price was down 5% in q4 2012, compared t

40、o previous quarter. oil is one of the biggest cost drivers in the industry. we believe that bulk of impact of lower oil prices should be reflected in q1 2013 earnings instead of q4 earnings as there is typically a lag due to inventory accounting and average oil price was down only 1% q-o-q in q3 201

41、2. fears of continued cost increases in the sector. 3 company (%) natural resources and energy global metals and mining 31 january 2013 currency roundup producer currency performance was muted except for eur and zar. thus, we expect the impact on gold companies that are exposed to these currencies t

42、o have been minimal in the q4 2012. the zar depreciated 5% vs q3 2012, and that should be mildly positive for south african producers. randgold resources has significant eur cost exposure, so a 4% strengthening of the eur against the usd should have a negative impact on costs (in usd/oz). yamana gol

43、d (clp, ars, and brl) and kinross gold (clp and brl) have significant currency hedging, so might not be affected at all. q4 2012 stock performance during q4 2012, gold prices were not able to sustain the momentum gained towards the end of q3 2012. the gold price hovered around usd1,700/oz until the

44、middle of december. at the end of q4 2012, gold price was down c6% from the start of the quarter. the fall in gold price weighed on gold miners as well and most of the stocks lost ground in q4 2012. the ftse gold miners index (ftmigmi) was down 15% in the quarter (table 2), underperforming both gold

45、 price and the broader market (e.g. s q2 2013 estimates for royal gold and harmony 12-month price performance calculated as of 25 january 2013. pog, nem, iag, hoc, auy, gg, cg, abg and ego have reported their q4 operating results source: hsbc, datastream, company data 4 natural resources and energy

46、global metals and mining 31 january 2013 table 3. gold miners: rating and target price changes valuation summary abc _ target price _ new old _ rating _ new old for the gold companies in our coverage universe, african barrick agnico-eagle anglogold ashanti barrick centerra gold eldorado goldcorp gol

47、d fields harmony gold hochschild iamgold kinross newmont petropavlovsk polymetal randgold royal gold yamana 555 46.00 52.00 47.70 14.60 15.50 45.00 16.50 12.40 5.00 13.70 15.20 59.00 540 1480 125.00 84.30 17.00 670 56.00 61.00 62.70 17.90 19.00 57.00 22.00 15.80 5.90 17.80 17.90 84.00 760 1590 146.0

48、0 98.50 18.80 ow(v) uw(v) ow ow ow(v) ow(v) ow ow ow(v) ow ow(v) ow(v) ow ow(v) ow ow n uw ow(v) n(v) ow ow ow(v) ow(v) ow ow ow(v) ow(v) ow(v) ow(v) ow ow(v) ow(v) ow ow uw we base our sum-of-the-parts valuation on a dcf- led approach, and we have built detailed dcf models for each companys major a

49、ssets, with base-case assumptions of a flat gold price of usd1,675/oz, zero long term inflation, and discounting our forecast cash flows at our estimate of the companys real weighted average cost of capital (wacc). we calculate our target prices as equal to the valuation we would expect using a usd1

50、,760/oz gold price. the target price, therefore, reflects both target prices in usd except african barrick, polymetal, petropovlosk and hochschild which is in gbp, and centerra, in cad. hsbc ratings: ow = overweight, n = neutral, uw = underweight, v = volatile source: hsbc decreasing our long-term b

51、ase price for gold to usd1,675/oz from usd1,750/oz; the new long term base price is the rounded average for the past month, and, thus, essentially reflects the current spot pricing environment. in terms of generating target prices for stocks in our universe, we continue to use the average gold price

52、 of the next four-quarters forecast. this is currently usd1,760/oz (previously usd1,850/oz). hence, our new target prices for the equities represent the valuation we would derive if gold prices reached and sustained usd1,760/oz within the next 12 months. broadly speaking, this has resulted in a sign

53、ificant reduction of our target prices across the sector. our view of the rerating effect the change in the stock price we would forecast without a change in the base assumption of the gold price and a gold- price effect, our view that the market will also revalue the stock as gold prices change. po

54、tential return equals the percentage difference between the current share price and the target price, including the forecast dividend yield, when indicated. changes to our ratings and estimates we are making numerous changes to our target prices, mainly as a result of the decrease in gold price assu

55、mptions, as well as changes to our expectations for production and costs at various mines in future and also other model changes. as a result, although we still see considerable upside in many stocks in the sector, we have downgraded the shares of royal gold from overweight to neutral and agnico eag

56、le from neutral (v) to underweight (v). 5 natural resources and energy global metals and mining 31 january 2013 table 4. gold miners: earnings calendar abc reporting dateconference call date cc timecc dial-in number polymetal royal gold randgold harmony african barrick kinross agnico eagle barrick 4

57、q12 production results 2q13 results 4q12 results 2q13 results 2012 fy results 4q12 results 4q12 results 4q12 results 30-jan-13 31-jan-13 4-feb-13 4-feb-13 13-feb-13 13-feb-13 13-feb-13 14-feb-13 31-jan-13 4-feb-13 4-feb-13 13-feb-13 14-feb-13 14-feb-13 14-feb-13 12:00 pm est 11:00 am est 03:00 pm sa

58、 time (08:00 am est) 13:30 uk time (08:30 am est) 8:00 am est 11:00 am est 9:30 am est 800-603-2779; id: 85826820 1-866-966-5335 1-800-860-2442 1 866-966-5335 1-800-319-4610 / 1-604-638-5340 1-800-814-4859 / 416-644-3414 800-745-9830 / 212-231-2929 gold fields4q12 results14-feb-13 goldcorp yamana 4q

59、12 results 4q12 results 14-feb-13 20-feb-13 15-feb-13 21-feb-13 10: am pt (01:00 pm est) 11:00 am est 800-355-4959 / 416-695-6617 1-800-355-4959 / 416-695-6616 anglogold4q12 results20-feb-13 iamgold newmont 4q12 results 4q12 results 20-feb-13 21-feb-13 21-feb-13 22-feb-13 8:30 am (est) 10:00 am (est) 1-646-216-7111/ 1-866-206-0240 888-566-1822 / 312-470-7116 petropavlovsk polymetal 2012 fy results 2012 fy results 27-mar-13 8-apr-13 eldorado centerra gold 4q12 results 4q12 results 22-feb-13 20-feb-13 22-feb-13 21-feb-13 8:30 am (est) 10:00 am (est) 416-340-8530/ 1-888-340-9642 212-231-2900/ 1-