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1、S Oil,China please Gold Mining,textE&C,-,-,1 February 2013,abcGlobal Research,First Light AsiaProduction:Infrastructure,change headlineKorea colour to WHITE,change headline row height to 1pt exactly before publishWhats Changed,Research Focus,Todays Events,New,Ticker525 HK047040 KS,CompanyGuangshen R
2、ailwayDaewoo E&C,RatingOWN,was,CurrencyHKDKRW,Target4.5010,600,was,EPS 12e0.20322.88,EPS 13e0.25627.21,Price3.379570,Price At Close30 Jan30 Jan,Up,1766 HK,CSR Corp,OW(V),HKD,8.00,7.60,0.31(RMB)0.37(RMB),6.45,30 Jan,Down AEM US3037 TT,Agnico-EagleUnimicron,UW(V)UW(V),N(V)N(V),USDTWD,4622.90,5633.30,2
3、.282.25,2.451.85,45.8829.25,25 Jan30 Jan,1186 HK1800 HK,China Railway ConstructionChina Comm.Construction,N(V)N(V),OW(V)OW(V),HKDHKD,98.50,109.40,0.64(RMB)0.67(RMB)0.70(RMB)0.83(RMB),8.447.87,30 Jan30 Jan,010950 KS,S-Oil,UW,KRW,60,000,85,000,5,199.46,6,746.45,99,800,30 Jan,Source:Bloomberg,HSBC esti
4、matesClick on title to open reportsResearch Focus,S-Oil(010950 KS)-UW:Earnings miss the prelude to a tough 2013,Dennis Yoo*,Disappointing 4Q12 results not an earnings blip,but a symptom of feedstock procurement challengesS-Oil faces tight crude supplies from the Middle East and this margin headwind
5、will likely persist through 2013-14eReiterate UW,cutting TP to KRW60,000 from KRW85,000 after revising down 2013-14e EPS by 28-31%,China Infrastructure-Construction blues,so take the train,Anderson Chow*,Turning cautious on construction due to rising project financing costsUrbanisation and rail refo
6、rm will likely benefit rail operators and equipment makers but is negative for contractorsInitiate OW on Guangshen Railway;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 mixed,Patrick Chidley,Slightly higher
7、 Q4 gold prices should support a modest q-on-q improvement in EPS,but conservative 2013 guidance maybe disappointingSouth African miners hit by strikes,but radical restructuring now getting underway,led by the Sibanye spin-outReduction in our gold price outlook results in significant cuts in target
8、prices across our coverage;we downgrade Agnico Eagle toUnderweight(V)from Neutral(V)and Royal Gold to Neutral from Overweight,but continue to see upside at other gold miners,Korea E&C-No home improvementsMeaningful housing market recovery in Korea unlikely before 2H14But Korean E&C firms have signif
9、icantly cut property exposure in last five yearsHyundai Dev(UW(V)and Daewoo E&C(initiate N)have most exposure to domestic property,Brian Cho*,Ticker,Event,Rating,Target,Price,Ticker,Event,NI Bbg,Bharti Airtel,BHARTI IN,Q3,OW,380.00,342.9,Exxon Mobil,XOM US,Q4,89.5,China HSBC Manufacturing PMIKorea H
10、SBC Manufacturing PMIThailand CPI(YoY),JanJanJan,LyondellBasellFranklin ResourceMcKesson,LYB USBEN USMCK US,Q4Q1Q3,61.3135.6102.4,Source:Bloomberg,HSBC estimates,Sunayana Daga*,Research Marketing,+852 2822 4393,.hk,*Employed by a non-US affiliate of HSBC Securities(USA)Inc,and is not registered/qual
11、ified pursuant to FINRA regulations,Issuer of report:The Hongkong and Shanghai Banking Corporation Limited,View HSBC Global Research at:http:/,Disclaimer&DisclosuresThis report must be read with the disclosures in the Disclosure appendix,and the Disclaimer,which forms part of itDisclosures for compa
12、nies can be accessed via the hyperlinks to the original published research,which can befound in the title,First Light Asia1 February 2013RegionalAsian FX-Is EUR strength harmful?,abcPaul Mackel,With global tail risks coming down and Asian growth turning for the better,Asian currencies should be trad
13、ing strongerversus the USDBut the recent price action begs to differApart from the INR and the PHP,most Asian currencies have struggled versus the USD,Mine&Dime-China Gold Mining:Reduce,but do not eliminate gold exposure,Simon Francis*,HSBC global asset allocation team has made changes to both the s
14、trategic and tactical asset allocationSpecifically,they almost halved the weight of gold to 7%in the total portfolio,driven by receding systematic riskHSBC commodities analysts have updated the gold and copper price forecasts cutting gold price forecasts by 5%China&Hong Kong,China Gold Mining-Reduce
15、,but not eliminate gold exposure,Thomas Zhu*,HSBC global asset allocation team recommends reducing,but not eliminating gold exposureWe think Zijin is the stock that serves the purpose with exposure to both gold and copperZijin is our preferred pick(OW(V),TP of HKD3.82 from HKD3.85);reiterate OW(V)on
16、 Zhaojin(TP of HKD14.94 fromHKD16.5)primarily on valuation,Guangshen Railway(525 HK)-Initiate OW:Get on board,Anderson Chow*,2013e earnings recovery is driven by organic growth from increased operating frequency for the companys rail servicesThe company should benefit from railway industry reform,wh
17、ich would improve network connection and non-fare revenue,and,potentially,passenger tariff reformWe initiate coverage with an Overweight rating and set a target price at HKD4.5 using a DCF approach,CNOOC Ltd(883 HK)-OW:Disappoints again;darkest before the dawn,Thomas Hilboldt*,CNOOCs disappointing 2
18、013e production target is flat YoYBut management reiterated the 2011-15e production growth target of 6-10%CAGR,of which 4-5%will come fromoffshore 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
19、price in 2013;wehave a HKD18.4 target price,and CNOOC is our sole OW among the China oil majors,Hang Lung Properties(101 HK)-OW:Moving ahead with pre-leasing and inventory salesSolid FY12 results with good progress made with Center 66s pre-leasingPotential rejuvenation of HK property sales could ser
20、ve as a funding source and a potential catalystMaintain OW rating with a price target of HKD32.5(up from HKD30)on a higher NAV estimate,Perveen Wong*,Tingyi(322 HK)-OW:Beverage recovery key to earnings,Christopher K Leung*,We see mild headwinds from higher input costs,but believe beverage sales and
21、margin are on track for a 2013 recovery,thanks to market share gain and turnaround in Pepsi businessWe lower our 2013-14e earnings by 4-6%to reflect higher wheat flour and palm oil cost assumptionsReiterate Overweight but cut TP to HKD26.40(from HKD29.00)to reflect lower earnings,higher beta due to
22、higheruncertainty on input cost and DCF rollover,Uni-President China(220 HK)-UW:Rising margin and capital raising risks,Christopher K Leung*,Aggressive capacity expansion could drive top-line growth,but this is likely to be complemented by higher A&P spendingand there is also risk of inventory build
23、-upCapex is likely to be more than RMB4bn this year,and UPC might require capital raising given the cash flow pressureReiterate Underweight and cut TP to HKD6.70(from HKD7.00)on the back of lower earnings estimates and EPS rollover,First Light Asia1 February 2013KoreaKorea Non-life Insurance-Weak De
24、cember:More than seasonality,abcSinyoung Park*,Weak Q3 earning due to unusually severe auto loss ratio deterioration and new business expense burdenDecember earnings appear to be at rock-bottom,but earnings momentum is likely to remain weak in the near termSet to miss FY12 profit targets;we remain s
25、elective 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 10%growth in service revenuesExpect margins to recover as LTE subscriber migration normalisesOverweight:DCF derived TP unchanged at KRW10,600TaiwanTaiwan
26、-4Q 2012 GDP expands at fastest rate in over a yearUnimicron(3037 TT)-Downgrade to UW(V):The capex sinkholeSiliconware Precision(2325 TT)-Downgrade to N:Deeper 1Q13 troughMediaTek(2454 TT)-OW:1Q13 likely the troughNovatek(3034 TT)-OW:Increasing confidence on resolution upgradeLargan Precision(3008 T
27、T)-UW(V):Upbeat results but uncertainties aheadASEANJapan-Slow awakening:December IP expandsMalaysia-BNM stands pat but sees external improvementsRBNZ Observer Update-On hold,but expect inflation to riseThe Philippines-Ending on a high note:4Q GDP exceeds expectationsThe RBA Observer-On hold next we
28、ek:easing phase may be doneGrounded in realty-ASEAN real estate fortnightlyBank of the Philippine Islands(BPI PM)-UW:More sustainable earnings ahead,Neale Anderson*Donna KwokTse-yong Yao*Steven C.PelayoYolanda Wang*Jerry Tsai*Yolanda Wang*Izumi DevalierSu Sian LimPaul BloxhamTrinh NguyenPaul Bloxham
29、Pratik Burman Ray*Xiushi Cai*,Bank Rakyat Indonesia(BBRI IJ)-UW:2012 earnings were solely driven by lower credit costsIndiaIndia:Managing resource stress-Twelfth five year plan targets resource pinch pointsColgate-Palmolive(CLGT IN)-OW:Earnings miss led by A&P,growth to reboundLupin(LPC IN)-OW:US bl
30、azes in 3QFY13Titan Industries(TTAN IN)-OW:Impressive revenue growth led by jewellerySiemens India(SIEM IN)-UW:Orders disappoint,earnings in lineKEC International(KECI IN)-UW:Our margin worries have proved correctMarket data,LOO Kar Weng*Charanjit Singh*Amit Sachdeva*Girish Bakhru*Amit Sachdeva*Rahu
31、l Garg*Rahul Garg*,Markets,HSBC,Last,5d%,Forecast GDP(%Yr)Int Rate USD vs CCY,HSBC,Last,5d%,Commodities,HSBC,Last,5d%,HSI,24,000,23,730,0.55,US,1.7,0-0.25 EUR,1.35,1.36,1.48,Oil,90.0,97.3,2.26,SHCOMPTAIEXKOSPITOPIXBSE 30,2,5008,3002,30078021,700,2,3857,8501,96294019,895,3.602.00-0.134.75-0.14,ChinaT
32、aiw anKoreaJapanIndia,8.64.23.80.26.2,6.002.3753.250.057.50,CNYTWDKRWJPYINR,6.1828.61,030.074.050.0,6.2229.55108991.453.23,0.02-1.73-1.81-1.150.86,GoldCoal(Thermal)Steel(HRC Asia)AluminiumCopper,1,850907112,1507,500,166191N/A20478176,0.14-0.11N/A-0.050.74,Source:Bloomberg,Currencies31 January 2013As
33、ian FXIs EUR strength harmful?With global tail risks coming down and Asian growth turning for the better,Asian currencies should be tradingstronger versus the USD.But the recent price action begs to differ.Apart from the INR and the PHP,most Asiancurrencies have struggled versus the USD.Selling USD-
34、Asia was meant to be easier this year.So what we are missing?We entered the year being cautiously optimistic on Asian currencies(see Asian FX Focus,2013:Start your engines,16January 2013).The fear in the Eurozone has subsided and Chinas economy is gaining traction.Both conditions should helpsupport
35、inflows into local markets and in turn support local currencies.Also,in an environment where market conditions areimproving,there should be greater room for USD-Asia to behave more independently of EUR-USD.Indeed we have started tosee the correlations between EUR-USD and USD-Asia breaking down.But d
36、espite what is meant to be a half glass full storyfor Asian currencies,this correlation break down has not put the regions currencies on a stronger footing.We can pick apart some reasons for individual currency sluggishness.The factors range from pending regulatory andgeopolitical risks for KRW,to M
37、YRs sensitivity to a looming election.Meanwhile we subscribe to the idea that in anenvironment where there is less fear in markets compared to last year,then low yielding Asian currencies such as the SGD andTWD will be regional laggards.But is there a common thread binding Asian currency underperfor
38、mance together?We could put some of the blame on excessive JPY weakening,which seems to be emboldening the currency war issue,and inturn leading the market to believe that Asian policy markers could be more reluctant to allow local currency strength.This isa fair point.Currency wars are a hot theme
39、and will continue to be as we move closer to the G20 finance ministers meeting on15-16 February 2013.But while some Asian policy markers have highlighted concern about the pace of the JPYs weakness,we cannot sense to anynoticeable degree that it is causing USD-Asia to be supported.That is,we have no
40、t seen a meaningful change in Asian FXpolicy to be more resistant towards local currency strength because of a weak JPY or a change in BoJ policy(see our Asian FXPolicy Dashboard from both December 2012 and January 2013).That said,we will monitor whether Asian central banks arechanging FX interventi
41、on patterns and are appearing more defensive.The market can debate the impact of the JPYs weakness on Asian currencies but it may actually be more about the EUR.Thesingle currency has outperformed every Asian currency bar the INR in 2013,in stark contrast to the regions uniformly positiveperformance
42、 versus the JPY.EUR-Asia strength clearly reflects investors having renewed faith in the paper value of the singlecurrency and some of its underlying assets.Some have posed the question-why invest in Asia when the Eurozone is lookingmore stable and some of its assets offer higher yields?We have argu
43、ed that in the current climate of a pronounced EUR recovery,we would favour funding long Asian currencypositions out of other currencies like USD,GBP or JPY.But the USD side of this equation is also proving challenging for thetime being.If EUR-Asia is very well supported,it will be harder for USD-As
44、ia to head lower,unless of course independentUSD weakness were to emerge.This,however,does not appear to be the case.We are currently short USD-KRW 1m NDF,and we will continue to hold this position,but it is proving to be a bumpy ride.,Paul Mackel|+85229966565|PAULMACKELHSBC.COM.HKJu Wang|+852282243
45、40|JUWANGHSBC.COM.HKPerry Kojodjojo|+85229966568|PERRYKOJODJOJOHSBC.COM.HKDominic Bunning|+85228221672|DOMINIC.BUNNINGHSBC.COMView HSBC Global Research at:http:/,Issuer of report:The Hongkong and Shanghai BankingCorporation Limited,HSBC Global ResearchCurrencies,31 January 2013,Should an even strong
46、er EUR-USD occur,this would run the risk of indirectly pulling USD-Asia higher still.Ultimately webelieve a rally in USD-Asia will provide better selling opportunities.But for now we will place more emphasis on looking tobe selective with our long Asia positions,whilst funding out of currencies like
47、 the GBP,in particular,and the low yieldingSGD within the region.,Asian FX Focus:2013.start your engines,https:/,Asian FX Policy Dashboard December 2012,https:/,Asian FX Policy Dashboard January 2013,https:/,2,Natural Resources and EnergyGlobal Metals and MiningGold MiningReducing our gold price ass
48、umptions,but staying bullish;Q4 earnings mixedSummary of rating and target price changes,abcGlobal Research Slightly higher Q4 gold prices shouldsupport a modest q-on-q improvement inEPS,but conservative 2013 guidancemay be disappointing South African miners hit by strikes,butradical restructuring n
49、ow gettingunderway,led by the Sibanye spin-out,_ Target price _New Old,_ Rating _New Old,Reduction in our gold price outlook,African BarrickAgnico-EagleAnglogold AshantiBarrickCenterra GoldEldoradoGoldcorpGold FieldsHarmony GoldHochschildIamgoldKinrossNewmontPetropavlovskPolymetalRandgold,55546.0052
50、.0047.7014.6015.5045.0016.5012.405.0013.7015.2059.005401,480125.00,67056.0061.0062.7017.9019.0057.0022.0015.805.9017.8017.9084.007601,590146.00,OW(V)UW(V)OWOWOW(V)OW(V)OWOWOW(V)OWOW(V)OW(V)OWOW(V)OWOW,OW(V)N(V)OWOWOW(V)OW(V)OWOWOW(V)OW(V)OW(V)OW(V)OWOW(V)OW(V)OW,results in significant cuts in target
