s, Bloomberg and other vendors. Data is sourced from Deutsche Bank and subject companies. Deutsche Bank does and seeks to do business with companies covered in its research reports. Thus, 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. DISCLOSURES AND ANALYST CERTIFICATIONS ARE LOCATED IN APPENDIX 1. MICA(P) 007/05/2010
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ADDITIONAL RESEARCH China TMT Daily
DB CORPORATE ACCESS DB Access Indonesia Conference 2010 - Jakarta 11/30 12/2 DB Access China Conference 2011 - Beijing 1/10 - 13 DB Access India Conference 2011 - Mumbai 3/7 - 9 DB Access Asia Conference 2011 - Singapore 5/23 - 26
Baidu, Taobao & e-commerce; also 0941, 0763, 0700, GOOG Page 22 China & the Ghosts of Japan's Heisei Bubble Page 23
The Asia Investor Letter
CRE (0291.HK),HKD33.05 Buy Price Target HKD34.28 COLI (0688.HK) HKD17.00 Buy Price Target HKD18.68 Conglomerates
CR Vanguard may acquire Homecity: Local media Page 24 Strong sales paving the way for faster acquisition growth Page 25 Canton Fair - not a surprise to see moderate growth Page 26 Expect better growth in 2011 3Q10 - Revenue slightly misses, EPS inline AION gamer revolt Page 27 Page 28 Page 29
NDRs Alibaba.com Ltd (1688 HK) - HK 11/12 Principal Financial Group Inc (PFG UN) - PEK 11/15, HK 11/17, SG 11/18 SK Networks Co Ltd (1740 KS) - SG 11/23 - 24, hk 11/25 26 SJM Holdings Ltd (880HK) - SG 11/25 - 26
DB ANALYST/SALES ROADSHOWS Nora Hou: Taiwan Banking & Finance - HK 11/10 - 11 Jessica Chang: Taiwan Semiconductor & Semiconductor Equipment - SG 11/15 - 16, HK 11/17 - 19 SC Bae: Korea Technology - SG 11/15 - 16, HK 11/17 - 18 John Kim: Korean Telecommunications - HK 11/16 - 17, SG 11/18 - 19 Karen Tang: Asia Gaming & Hotels - HK 11/22 - 23, SG 11/24 - 26 Jihyun Song: Korean Consumer - HK 11/22 - 23, SG 11/24 - 25 Tony Tsang: China and HK property 2011 - PEK 11/23 - 24 Zuben Mathews (Head of the Vendor Coverage Group at DB): Indian IT Services - SG 11/26 - 27, HK 11/28, MUM 11/29 Michael Chou: Taiwan Technology Semiconductor & Semiconductor Equipment - HK 11/22 - 23, SG 11/24, TYO 11/29 Sanghi Han: Korea Construction and LS Corp./ Utilities HK 11/29 - 30, SG 12/1 - 2 Sanjeev Rana: Korea Autos & Shipbuilding - SG 11/29 30, HK 12/1 - 2 KC Kao & Kyle Su: Taiwan Technology Hardware - SG 11/30 - 12/1, HK 12/2 - 3
Mindray Medical (MR.N),USD29.83 Buy Price Target USD32.00 Mindray Medical (MR.N),USD29.83 Buy Price Target USD32.00 Shanda Games Limited (GAME.OQ),USD6.33 Hold Price Target USD5.53 Yuexiu Property (0123.HK) HKD2.14 Buy Price Target HKD3.22 KEB (004940.KS) KRW13,300 Hold Price Target KRW14,000 Korea Life (088350.KS) KRW8,420.00 Buy Price Target KRW11,000.00 Korea Life (088350.KS),KRW8,420.00 Buy Price Target KRW11,000.00 Fraser & Neave Ltd. (FRNM.SI),SGD6.80 Buy Price Target SGD6.90 Property
Strong sales continued despite new measures in Guangzhou Page 30 Solid asset quality, but priced in; maintaining Hold Page 31 Good signs; strong earnings and interest hikes Page 32 Key takeaway from DB Korea Access: strong SepQ expected Page 33 FNN, Far East and Sekisui JV top bidder for Serangoon site Page 34 Residential land prices continue to moderate 50% q/q rise in net profit Strong balance sheet growth, spreads contract Page 37 Disatisfaction over RSPO Page 38 Page 35 Page 36
DB INTERNATIONAL PRODUCT ROADSHOWS Thermo Fisher Scientific Inc (TMO US) - SEL 11/10, SG 11/11, HK 11/12 Principal Financial Group Inc (PFG UN) - PEK 11/15, HK 11/17, SG 11/18 Colgate Palmolive (CL.N) - HK 12/6, PEK 12/7 Joshua Shanker: U.S. Property & Casualty Insurance PEK 12/8, HK 12/9, SG 12/10
Singapore Airlines (SIAL.SI),SGD16.32 Buy Price Target SGD19.90 IDFC (IDFC.BO) INR207.35 Hold Price Target INR190.00 Agriculture
Banking/Finance
DB Indo Banking : Minimal impact from administered policies Page 39 3Q10 Earnings below consensus by 25% 3Q10 result was in line with forecast Page 40 Page 41
Quality Houses Pcl. (QH.BK),THB2.26 Buy Price Target THB2.80 Sino-Thai Engineering (STEC.BK),THB13.30 Buy Price Target THB17.70 Ayala Land (ALI.PS),PHP17.18 Hold Price Target PHP17.33
9M10 net profit rises 35%, robust sales and better margins Page 42
Page 2
Deutsche Bank AG/Hong Kong
GLOBAL RESEARCH Maritime Matters (Vol.23)
Asia-to-Europe volume dropped 10.5% MoM in September Page 43 FY3/11 guidance raised on higher-than-expected 1H earnings; QoQ growth rate to slow Page 43 Strong fixed-line operations reconfirmed Page 45
SMC (6273.T),¥12,960 Hold Price Target ¥13,000 NTT (9432.T) ),¥ 3,750 Hold Price Target ¥4,460 9
The notes and reports contained in this Daily are all excerpts of previously published documents. Please refer to the published notes on our web site for details on risks, valuations and earnings changes
10 November 2010 Strategy Asia Equities Daily Focus
DAILY REVISIONS: RATING CHANGES Company Gujarat State Petronet Limited Lee & Man Paper Oil India Limited Petronet LNG Limited PixArt Imaging TARGET PRICE CHANGES Company Alibaba.com Limited [Buy] Dah Sing Banking [Buy] Fraser & Neave Ltd. [Buy] Gujarat State Petronet Limited [Buy] HSBC Holdings [Buy] Hang Lung Properties [Buy] Lee & Man Paper [Hold] Oil India Limited [Buy] Petronet LNG Limited [Buy] PixArt Imaging [Sell] ST Engineering [Buy] Sembcorp Industries Ltd [Buy] Starhub [Buy] State Bank of India [Hold] Suntec REIT [Buy] Tata Motors Ltd [Buy] Telkom [Buy] XL Axiata [Buy] EPS REVISIONS Company Alibaba.com Limited [Buy] Ticker 1688.HK Date 08-Nov Dec 10 Dec 11 Dec 12 Dec 10 Dec 11 Dec 12 Sep 12 Mar 10 Mar 11 Mar 12 Mar 13 Jun 11 Jun 12 Jun 13 Mar 11 Mar 12 Mar 13 Dec 09 Dec 10 Dec 11 Dec 12 Mar 11 Mar 12 Mar 13 Mar 11 Mar 12 Mar 13 FY ¨‹ ¨‹ ¨‹ ¨‹ ¡ø ¡ø ¡ø New 0.28 0.39 0.56 0.99 1.21 1.48 0.65 7.36 6.64 7.62 7.85 1.75 1.99 1.26 9.47 11.02 13.66 0.00 0.00 0.00 0.00 773.77 916.57 1,017.43 0.40 0.47 0.60 Previous 0.29 0.39 0.64 1.02 1.19 1.39 0.65 Chg (%) -3.2 0.0 -12.9 -3.2 2.3 6.0 0.7 Ticker 1688.HK 2356.HK FRNM.SI GSPT.BO 0005.HK 0101.HK 2314.HK OILI.BO PLNG.BO 3227.TWO STEG.SI SCIL.SI STAR.SI SBI.BO SUNT.SI TAMO.BO TLKM.JK EXCL.JK Date 08-Nov 09-Nov 09-Nov 09-Nov 08-Nov 08-Nov 08-Nov 09-Nov 09-Nov 09-Nov 09-Nov 08-Nov 09-Nov 08-Nov 08-Nov 09-Nov 09-Nov 08-Nov ¨‹ ¡ø ¡ø ¡ø ¡ø ¨‹ New 19.44 16.80 6.90 130.00 97.50 41.87 6.90 1,600.00 150.00 90.00 3.95 6.60 2.95 2,880.00 1.66 1,465.00 9,000.00 7,750.00 Previous 20.39 13.10 6.75 96.33 35.10 7.40 Chg (%) -4.7 28.2 2.2 1.2 19.3 -6.8 Ticker GSPT.BO 2314.HK OILI.BO PLNG.BO 3227.TWO Date 09-Nov 08-Nov 09-Nov 09-Nov 09-Nov ¨‹ ¨‹ New Buy Hold Buy Buy Sell Previous NR Buy NR NR Hold
¨‹ ¡ø ¡ø ¡ø ¡ø ¡ø ¡ø ¨‹ ¡ø
132.00 3.65 5.65 2.62 2,625.00 1.65 1,120.00 9,500.00 6,000.00
-31.8 8.2 16.8 12.6 9.7 0.6 30.8 -5.3 29.2
Dah Sing Banking [Buy]
2356.HK
09-Nov
Fraser & Neave Ltd. [Buy] Gujarat State Petronet Limited [Buy]
FRNM.SI GSPT.BO
09-Nov 09-Nov
Hang Lung Properties [Buy]
0101.HK
08-Nov
IDFC [Hold]
IDFC.BO
09-Nov
¡ø ¡ø ¡ø ¡ø ¡ø ¡ø
1.65 1.88 1.23 8.29 9.78 12.32
KEB [Hold]
004940.KS
09-Nov
Korea Life [Buy]
088350.KS
09-Nov
Lee & Man Paper [Hold]
2314.HK
08-Nov
¡ø ¡ø ¡ø ¨‹ ¨‹ ¨‹
625.31 716.76 816.25 0.50 0.57 0.62
6.4 5.7 2.1 14.2 12.6 10.9 nm nm nm nm 23.7 27.9 24.6 -20.2 -18.0 -3.4
Page 4
Deutsche Bank AG/Hong Kong
10 November 2010 Strategy Asia Equities Daily Focus
DAILY REVISIONS: Company Oil India Limited [Buy] Ticker OILI.BO Date 09-Nov Mar 10 Mar 11 Mar 12 Mar 13 Mar 10 Mar 11 Mar 12 Mar 13 Dec 09 Dec 10 Dec 11 Dec 12 Dec 10 Dec 11 Dec 12 Dec 10 Dec 11 Dec 12 Dec 10 Dec 11 Dec 12 Mar 11 Mar 12 Mar 13 Dec 10 Dec 11 Dec 12 Mar 11 Mar 12 Mar 13 Dec 10 Dec 11 Dec 12 Dec 10 Dec 11 Dec 12 New 113.78 120.33 136.33 149.01 5.39 6.56 7.11 7.79 6.75 6.33 5.29 7.17 0.16 0.18 0.22 0.40 0.39 0.41 0.15 0.19 0.20 236.76 287.49 350.98 0.07 0.07 0.08 153.42 187.36 212.18 605.60 646.54 713.35 376.77 432.31 505.13 Previous Chg (%)
Petronet LNG Limited [Buy]
PLNG.BO
09-Nov
PixArt Imaging [Sell]
3227.TWO
09-Nov
ST Engineering [Buy]
STEG.SI
09-Nov
Sembcorp Industries Ltd [Buy]
SCIL.SI
08-Nov
Starhub [Buy]
STAR.SI
09-Nov
State Bank of India [Hold]
SBI.BO
08-Nov
Suntec REIT [Buy]
SUNT.SI
08-Nov
Tata Motors Ltd [Buy]
TAMO.BO
09-Nov
Telkom [Buy]
TLKM.JK
09-Nov
¨‹ ¡ø ¨‹ ¨‹ ¨‹ ¨‹ ¨‹ ¨‹ ¡ø ¡ø ¡ø ¡ø ¡ø ¡ø ¨‹ ¡ø ¡ø ¨‹ ¡ø ¡ø ¨‹ ¨‹ ¡ø ¡ø ¡ø ¡ø ¨‹ ¨‹ ¡ø ¡ø ¡ø
5.39 6.52 8.16 9.36 6.85 7.00 7.74 10.07 0.16 0.18 0.21 0.35 0.35 0.37 0.17 0.18 0.19 237.78 285.67 349.95 0.08 0.07 0.08 130.15 157.54 174.46 624.93 672.55 352.69 414.85 478.17
0.0 0.5 -12.8 -16.8 -1.4 -9.6 -31.7 -28.8 1.6 1.7 2.4 14.0 11.1 10.2 -7.4 7.8 5.5 -0.4 0.6 0.3 -13.9 -2.0 0.0 17.9 18.9 21.6 -3.1 -3.9 6.8 4.2 5.6
XL Axiata [Buy]
EXCL.JK
08-Nov
Source: Deutsche Bank
Deutsche Bank AG/Hong Kong
Page 5
10 November 2010 Strategy Asia Equities Daily Focus
Asia India Energy Oil & Gas
10 Nov 2010 - 12:09:41 AM IST
COMPANY ALERT Gujarat State Petronet Initiate Coverage with a Buy Price (INR) Price target (INR) 52-week range (INR) Market cap (USDm) Shares outstanding (m) Net debt/equity (%) Book value/share (INR) Price/book (x) 119.50 130.00 125.10 82.45 1,513 562.4 52.3 33.27 3.6
Coverage Change Buy Reuters:GSPT.BO Exchange:BSE Ticker:GSPT
Initiate coverage with a Buy We initiate coverage on GSPL with a Buy rating and target price of INR130. Our target price implies 9% upside from the current market price. We expect a gas transmission volume CAGR of 12% over FY10-13E and tariffs for its existing pipelines to range around INR750/tscm (12% lower than FY10) after PNGRB's tariff order, expected shortly. As GSPL tries to put more volume through its network, we forecast ROE between 18% and 21% over FY11-13. We expect the award of cross-country pipelines to continue to drive capex-led growth. DCF-based value of INR130; delay in pipeline execution the key risk We value GSPL at INR130 based on DCF with a WACC of 10.3%. Our WACC is based on Deutsche Bank's cost of equity assumptions for India (risk-free rate 6.4% and risk premium 7.2%) and a three-year average beta of 0.92. We await further clarity on the cross-country pipelines and have not yet valued the cross-country pipelines likely to be awarded to the GSPL consortium. Key downside risks are lowe