20120705-Barclays-Asia Ex-japan Morning Research Summary

7/30/2019 20120705-Barclays-Asia Ex-japan Morning Research Summary

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EQUITY RESEARCH Hong Kong Open | 5 July 2012

ASIA EX-JAPAN MORNING RESEARCH SUMMARY

Highlights

Television Broadcasts Ltd. (0511.HK)1-Overweight/1-Positive

Television Broadcasts Ltd.: A compelling storyline; initiate at 1-OW

Summary of Changes

Rating Price Target EPS FY1 (E) EPS FY2 (E)

Rating Changes Old New Old New Old New Old New

Television Broadcasts Ltd. 0511.HK 0-NR 1-OW N/A 63.00 N/A 3.86 N/A 4.16

Target Price Changes

Compal Communications Inc. 8078.TW 3-UW 3-UW 42.00 30.00 3.56 3.21 3.41 2.50

Source & Legend

Company Research

Compal Communications Inc.: More risks on Windows Phone transition

Foxconn Technology Co., Ltd.: Expect flattish June, but improvement in Apple components due to Macs ramping


Zoomlion Heavy Industry Science and Technology Co., Ltd.: Too good to be true? Not exactly

This summary is compiled from research reports previously published by Barclays Equity Research. A full list of all publications is available on Barclays.Live

Barclays Capital Inc. and/or one of its affiliates does and seeks to do business with companies covered in its research reports. As a result, investorsshould 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.

One or more of the research reports referenced herein has been prepared in whole or in part by equity research analysts based outside the US whoare not registered/qualified as research analysts with FINRA. For disclosures associated with each report, please refer to the full report on Barclays

.Live

FOR ANALYST CERTIFICATIONS AND IMPORTANT DISCLOSURES, PLEASE CLICK HERE
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2/16

Industry Research

Asia ex-Japan Oil & Gas: Asia Oil Services & Rig-builders: Withstanding oil price volatility

India Capital Goods Sector: Feedback from APAC trip: Cautious cycle but reforms play gaining attention

India Metals & Mining: Assessing commodity price risks

Taiwan Banks: Cross-Strait RMB developments

Macro Research

Australia: Commodity-based model estimate for Q2 GDP supports RBA inaction, but it is premature to expect a sustained rise in AU yields

China: Postcard from Beijing

Global Macro Daily (Sydney Open): An ECB cut - bad for the EUR, good for risk

Malaysia: Trade surplus at decade lows on higher imports


3/16

Publications Summary

Basic Industries

India Metals & Mining: Assessing commodity price risks

Sector View 1-Positive

Asia ex-Japan Metals & Mining

Chirag Shah

+91 22 6719 6081

[email protected]

BSIPL, Mumbai

Faisal Memon

+91 22 6719 6267

[email protected]

BSIPL, Mumbai

4 July 2012

We have run a sensitivity analysis across our Indian Metals & Mining coverage to

gauge what the impact of current spot commodity prices and currency exchange

rates would be on our earnings estimates if these levels were to be sustained. Our

scenario analysis suggests downside risk to Nalco (33% potential downside to

FY13E earnings), Tata Steel (22%) and SAIL (11%) if commodity prices and forexrates remain at current levels. The downside risk for Tata Steel would largely be

from translational losses. On the other hand, the EPS impact on Hindalco would

likely be neutral due to translational gains. However, we maintain estimates as our

economists expect a rebound in China's economy resulting in key variables reverting

to our base case assumptions. Coal India followed by JSPL remain our top picks,

and we see valuation comfort in Hindalco and Tata Steel.

The correction in global steel prices (cUS$60/t) in the past quarter has been greater

than our assumption of a US$30/t correction. Domestic steel prices in India,

however, have been protected by the rupee's depreciation. However, spot coking

coal prices have been on an uptrend. Thus, the impact on EPS at spot commodity

prices and current currency exchanges rates would vary significantly from our

base-case estimates depending on the level of backward integration for steel

companies. Non-ferrous prices on the other hand have corrected by only 9-14% in

the past quarter.

P/L impact of spot commodity price/currency rate: With costs denominated in local

currencies, currency depreciation would mean an upside risk to our estimates for

mining companies (Coal India, NMDC, Sesa Goa). JSPL would stand to gain the

most from currency depreciation amongst steel names, in our view. On an

operational basis, the impact on Tata Steel would likely be marginal. However, a

significant translational loss on its European subsidiary would lead to a sharp 22%

cut in FY13E EPS. Conversely, Hindalco should benefit from translational gains on

Novelis's consolidation. Nalco would have the highest r isk (33% potential downside

to FY13E EPS) at current spot commodity prices .

Balance sheet issues: The mark-to-market impact on forex debt and higher cash

outflow on dollar-denominated current liabilities are the two key risks that we see on

balance sheet. JSW Steel has c31% of its debt exposed to forex rates, which was

not hedged as of March 2012. Although the forex debt of Tata Steel (of US$4.4bn)

and Hindalco (US$4.3bn) through their overseas subsidiaries have natural hedges,

the translational impact would result in increase in reported consolidated debt at spot

currency levels.

Our sector view remains unchanged: Coal India followed by JSPL remain our top

picks in the Indian Metals & Mining space. We argue that volume growth higher than

the consensus estimate for Coal India is feasible. We also see significant valuation

comfort in Hindalco and Tata Steel. In Hindalco, we highlight that about two-thirds ofits EBITDA is not tied to LME-linked commodity prices and that recent concerns of

debt increases was likely largely on account of translational losses. Notwithstanding,

the volumes and margin risk for the European operations of Tata Steel, the stock's

valuations provide significant cushion, in our view. We maintain our 3-UW ratings on

Nalco, Sesa Goa and SAIL.

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4/16

Energy

Asia ex-Japan Oil & Gas: Asia Oil Services & Rig-builders: Withstanding oil price

volatility


Asia ex-Japan Oil & Gas

Clement Chen

+852 2903 2498

[email protected]

Barclays Bank, Hong Kong

Scott Darling

+852 2903 3998

[email protected]


4 July 2012

Preferred way to benefit from the global oil capex cycle: We continue to view

Sembcorp Marine (1-OW; PT S$7.0) and Keppel Corp (2-EW; PT S$13.30) as the

best way to gain indirect leverage to the current oil capex cycle. With oil prices

having remained reasonably robust, the industry is likely to continue to spend, which

is partly reflected in the number of drilling contracts awarded (Figure 1). Thesustained level of awards has encouraged rig-owners to add to their fleets -

supportive for rig builders.

Attractive entry point for deep-value, long-term investors: The rig-builders have

sustainably delivered better margins, returns and yield than their peers, and we see

current valuations (trading below 10-year historical averages) offering a significant

value opportunity. See our Asia Ex-Japan Oil Services initiation report published on

.2 May 2012

Positive catalysts on the horizon: Apart from Petrobras providing further clarity last

week on the likely timing of contract awards, we see further likely contracts in the

upcoming months, with Chevron (1-OW; PT US$133), Husky (2-EW; PT C$28) and

Ukraine's state-owned company, Naftohaz all reported (Upstreamonline) to be indiscussions with rig-owners and shipyards. The Singapore yards remain well

positioned to benefit from these tenders, with both yards as likely venues for new rig

orders.

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5/16

Financial Services

Taiwan Banks: Cross-Strait RMB developments

Sector View 2-Neutral

Asia ex-Japan Banks

Noel Chan

+886 2 663 84693

[email protected]

BCSTW, Taiwan

Tom Quarmby

+852 2903 3053

[email protected]


5 July 2012

Increasing news flow on the development of an offshore RMB market and the

opening of more RMB-related business opportunities in Taiwan will likely buoy

financial shares in the short term. In reality, we see limited opportunities for material

earnings impact. Over the medium to long term, we believe Mega FHC (1-OW) is

best positioned to benefit from potential reforms given its stronger balance sheet and

deposit franchise, extensive overseas network, and market-leading FX business.

Near-term sentiment likely to improve: According to an FSC announcement on 2 July

2012, Taiwan is close to finalising an RMB trade settlement scheme with China

which will further open the offshore RMB market. Possible developments include 1)

allowing local enterprises to issue RMB bonds (Formosa bond market); 2) allowing

domestic banks to take RMB deposits and invest in RMB-related securities; and 3)

approval for Taiwan banks to operate RMB business on the Mainland. Based on the

experience in Hong Kong, we see a potential for a short-term rally on the back of the

positive news flow.

Not a game changer yet: While offshore RMB business may very well lead to

long-term benefits for Taiwan's economy as a whole, we advise a cautious approach

in the initial stages and see no immediate earnings contribution from offshore RMBbusiness. We believe 1) initial demand for RMB deposits will surpass loan demand;

2) there are limited channels for banks to invest RMB liabilities, creating a drag on

profitability; and 3) many RMB products/services will simply replace existing foreign

currency offerings.



6/16

Industrials

Zoomlion Heavy Industry Science and Technology Co., Ltd.: Too good to be true?

Not exactly

Stock Rating 1-Overweight

Sector View 3-Negative

Price Target HKD 13.27

Price (04 Jul 2012) HKD 9.62

EPS FY1 (E) 1.18

EPS FY2 (E) 1.13

Market Cap (HKD bn) 74.1492

Ticker 1157 HK / 1157.HK

China Machinery

Victoria Li

+852 2903 3456

[email protected]


Vincent Sun

+852 2903 [email protected]


5 July 2012

We reiterate our belief that Zoomlion's strong concrete machine sales will be

sustained throughout 2012 given our continued assumptions that Zoomlion will be

capable of gaining market share; the strong concrete pump rental business; and

China's increasing demand for commercially produced concrete. Moreover, we

expect its results for 1H12 to exceed the consensus forecasts, and we estimate thatthe stock's valuations should remain attractive even if our worst-case scenario were

to occur. Therefore, we reiterate our 1-Overweight rating based on our 12-month

price target of HK$13.27.

The strong growth in Zoomlion's concrete machine sales for the first five months of

2012 was reasonable, in our view: Growth in commercially produced concrete was

strong at 17% for the first five months of 2012 with the penetration rate rising.

Zoomlion has gained market share within the sector from competitors by funding

customers more aggressively and upgrading product quality with CIFA technology.

Buying a concrete pump still looks to be a profitable prospect: The utilisation rate for

Zoomlion's concrete pumps sold was 91 hours/month in May, down 50% y/y.

However, we estimate that a customer could still make a profit even if the rate wereto fall to 65 hours. Moreover, with demand for commercially produced concrete

growing in Central China and Northwest China, we believe many customers would

still like to buy pumps.

Results for 1H12 could exceed consensus: We forecast at least a low-teen profit

growth rate for 1H12, possibility exceeding the Bloomberg consensus growth rate

forecast of 14% y/y for 2012. However, we estimate that the results of the other

non-rail machinery companies for 1H12 could miss market expectations.

Valuation attractive: With the recent stock price correction, we view Zoomlion's

valuation as attractive. The current price indicates a P/E of 6.7x on our estimate for

2012. If our worst-case scenario were to occur, we estimate the P/E would still be

9.6x for 2012, which we believe would still not be expensive compared with itshistorical average of 9.9x for the past 18 months and compared with 10.9x for its

global peers.

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7/16

Industrials

India Capital Goods Sector: Feedback from APAC trip: Cautious cycle but reforms

play gaining attention


India Capital Goods

Venugopal Garre

+91 22 6719 6291

[email protected]

BSIPL, Mumbai

Hitesh Das

+91 22 6719 6213

[email protected]

BSIPL, Mumbai

Saurabh Mishra

+91 22 6719 6386

[email protected]

BSIPL, Mumbai

4 July 2012

Investor questions on our recent APAC trip largely centred on the state of the capex

cycle. From a stock point of view, the debate was largely on L&T's ability to meet

order inflow targets and likely return ratios for BHEL in FY15 and beyond. Overall

though, investors remained cautious on the capex cycle with a neutral/underweight

stance on the sector (vs. our 2-Neutral sector view). Corrections in valuations,however, are increasing interest in asset owners/beneficiaries of policy changes.

Risks to infra-cycle revival: On questions on risks to infra cycle revival, our view is

that the potential uptick is not driven by policy/macro moves but is a reflection of

bunching-up of orders, as most new tenders announced are from a pool of orders

conceptualised several years earlier. With most of the projects under bid having

completed various milestones (land, funding etc) risk of conversion of tenders into

orders is low.

Timing of power equipment cycle recovery: The debate was not on near-term

earnings/orders but on the timing of a recovery. We highlight that: 1) coal supply will

fail to meet demand, meaning cash flows from new power plants will be weak,

impacting equity creation for new projects; 2) with over 125GW of equipment alreadyordered, we see limited reasons for more equipment to be ordered (getting coal to

operate these plants at an 85% plant load factor (PLF) is required); and 3) with

excess equipment manufacturing capacity, pricing will remain under pressure. The

downturn may hence be a prolonged one, in our view.

On L&T inflows: On L&T, investors were concerned about its ability to achieve

15-20% order inflow growth guidance in FY13. We also observed that some

investors were even concerned about 1Q order booking. However, we note that with

L&T already announcing Rs170bn of wins in 1Q (higher than our estimates), risk to

1Q orders is low. Furthermore, with infra cycle reviving, some orders won in FY12

being booked in FY13 (due to delay in award) and low base support in

power/industrial sectors, we expect FY13 inflows to track closer to guidance. (We

expect 12% inflow growth)

View on BHEL: On BHEL, the debate is largely on earnings/returns post execution of

current order book and on its weakening competitive advantage, as observed from

our recent visit to the subcontracting chain. (Please see note dated 20 June, Face to

). We continueFace: Visit to BHEL's subcontracting chain - an uneasy calm prevails

to believe that BHEL is unlikely to be able to sustain the current 20% EBITDA

margins given stiff competition on new orders and a slower order run rate could

impact revenue growths in future years. Near-term, though, we believe that the

current order book should support earnings. We expect BHEL (3-UW) to

underperform relative to L&T (1-OW).

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8/16

Internet & Media




Price Target HKD 63.00

Price (04 Jul 2012) HKD 54.00

EPS FY1 (E) 3.86

EPS FY2 (E) 4.16

Market Cap (HKD bn) 23.652

Ticker 511 HK / 0511.HK

Asia ex-Japan Internet

Joyce Zhou

+852 2903 2512

[email protected]


Anand Ramachandran, CFA

+852 2903 4360

[email protected]


Alicia Yap, CFA

+852 2903 4593

[email protected]


Seyon Park

+82 2 2126 2936

[email protected]

BCSL, Seoul

5 July 2012

We see a good combination of stability and growth potential in Television Broadcasts

(TVB). We view its leading position in the Hong Kong free-TV market as sustainable

in the medium term, providing stable cash flow (6.2% FCF yield in 2012E) for its

dividend distributions. In addition, we see significant potential in its new media

business and China business going forward. With Providence as a major

shareholder since Mar 2011, we see increasing potential for capital returns beyondthe 4.3% yield as well. Our DCF-driven HK$63 price target implies a P/E of 16.3x

and TSR of 20%.

Sustainable cash flow from HK advertising market: We view TVB's dominant position

in the HK free-TV market as sustainable given its strong branding, diversified

programme offering, and accumulated know-how in this business, helping it

generate stable cash flow to support its dividend. We see no immediate threat from

different advertising platforms in Hong Kong either (e.g. pay-TV, newspapers,

outdoor), based on our detailed analysis.

Great opportunity in the China market but monetization is the key: We see great

potential in the sizeable China market despite the limited contribution for now (c5%

of revenue). Our survey of cable TV and online video platforms in China suggests astable market share for TVB dramas. We believe TVB's TV content exports will

continue to drive its China growth, while the online video market may become

another driver beyond 2013, based on the recently proposed JV with Shanghai

Media Group (SMG). China-based production and direct broadcasting also have the

potential to contribute in the longer term.

Online platform monetization on the way: We see an increasing effort from TVB to

capture the growth potential from the internet and mobile data, and gradually

monetize these segments through advertising and other means. The plan to

leverage its substantial content library to build an online video database is another

monetization opportunity.

Key risks: 1) Worse-than-expected Hong Kong economy; 2) stronger competitionfrom new free-TV players; 3) regulatory risks in overseas markets; and 4) pay-TV

performance.



9/16

Technology

Compal Communications Inc.: More risks on Windows Phone transition

Stock Rating 3-Underweight


Price Target TWD 30.00

Price (04 Jul 2012) TWD 32.25

EPS FY1 (E) 3.21

EPS FY2 (E) 2.50

Market Cap (TWD bn) 19.5993

Ticker 8078 TT / 8078.TW

Asia ex-Japan Wireless Equipment & Products

Dale Gai

+886 2 663 84697

[email protected]

BCSTW, Taiwan

Derrick Yang

+886 2 663 84686

[email protected]

BCSTW, Taiwan

Kirk Yang

+852 2903 4635

[email protected]


4 July 2012

We maintain our 3-UW rating and lower our PT to NT$30. We see further downside

risks to CCI despite its recent share price weakness. We cut our 2012/13E EPS by

10%/27% to reflect Nokia's uncertain future given the Windows Phone (WP)

transition, intensifying competition in Android smartphones and declining industry

ASP. We lower our PT by nearly 30% to NT$30 based on 12x 2013E EPS; it

remains our top 3-UW stock (along with HTC) in the Asia ex-Japan wireless sector.

WP transition leads to lower Lumia orders into 2H12: While we were excited about

MSFT's announcement of WP8 in June with significant hardware improvements, we

expect CCI's 2H12 sales to decline (-18%/-4% q/q in 3Q/4Q12E) as we believe that

the restriction in upgrading (from WP7.5 to WP8) will make consumers reluctant to

buy the existing WP, leading to inventory adjustment from Nokia in 2H12. This is

consistent with our house view on Nokia (2-EW; covered by Jeff Kvaal and Andrew

Gardiner; click for their report published 21 Jun 2012). Also, our checkshere

suggest Lumia 610 (ODM by CCI) sales are lacklustre, e.g. accounting for


10/16

Technology

Foxconn Technology Co., Ltd.: Expect flattish June, but improvement in Apple

components due to Macs ramping



Price Target TWD 138.00

Price (04 Jul 2012) TWD 112.50

EPS FY1 (E) 6.67

EPS FY2 (E) 9.87

Market Cap (TWD bn) 131.931

Ticker 2354 TT / 2354.TW

Asia ex-Japan IT Hardware

Jerry Wu

+886 2 663 84685

[email protected]

BCSTW, Taiwan

Kirk Yang

+852 2903 [email protected]


4 July 2012

Expect flattish June sales: For June, our latest checks suggest FTC's sales should

remain flattish to NT$5.61bn (up 0.5% m/m but down 14.6% y/y), implying a total of

NT$16.2bn (down 22.9% q/q and 33.1% y/y) for 2Q12 consolidated sales, which

would be slightly below our expectation of NT$16.9bn. However, FTC's June sales

might identify the improvement over other Apple component suppliers on the back ofMacBook refresh ramping, as we note the iPhone/iPad supply chain paused in June

due to product transitions.

Maintain positive view on backend loaded 2H12: We expect FTC's sales to start to

pick up materially from July on the following catalysts: 1) new Nintendo game

consoles may be launched in late July; 2) MacBook Pro should recover in July after

the delay in the last quarter; 3) overflow orders from Hon Hai should see a significant

increase in late 3Q12 as its CNC capacity is taken up by iPhone 5 at the moment;

and 4) next-generation ultrabooks should prompt growth in metal casing demand

from August, along with the availability of Windows 8 RTM (release to

manufacturing).

Product cycle and Apple allocation gains to drive shares: We not only expect Applecomponents to remain more resilient than other supply chains, but we also do not

see it staying with the current weakness in product transition, and therefore we are

comfortable with our 2H12 forecasts. As such, we continue to view FTC's resilience

in 2H12 as strong, as it remains geared to new product cycles and is likely to gain

incremental Apple allocation. This should, we believe, lead the shares to appreciate

toward our NT$138 target which is based on 13x FY13E EPS.


Macro Research

Australia: Commodity-based model estimate for Q2 GDP supports RBA inaction,

but it is premature to expect a sustained rise in AU yields

5 July 2012

Gavin Stacey

Our commodity-based modelling approach estimates real growth of about 0.7-0.8% q/q in Q2 12. This supports yesterday's RBA

inaction. Nonetheless, we remain wary that a move higher in AU yields can be prolonged, given the near-term outlook for the GMPMI

and S&P 500. Accordingly, we believe investors should be looking to square up short positions or add duration in any post-ECB meeting

risk extension and rise in yields. Only on a sustained turn in the GMPMI would we reassess this recommendation.

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11/16

Macro Research

China: Postcard from Beijing

4 July 2012

Yiping Huang, Jian Chang, Lingxiu Yang

In early January, we published a report arguing that consumption's share of GDP had rebounded since the 2008 crisis and a rebalancing

of the Chinese economy was happening. Many commentators were sceptical about our findings. Last week, former PBoC advisor David

Li presented a paper at a conference held at Peking University that provided new evidence supporting our view of a pickup in

consumption's share of GDP since 2007.


Macro Research

Global Macro Daily (Sydney Open): An ECB cut - bad for the EUR, good for risk

5 July 2012

Paul Robinson, Laurent Fransolet

The main event today will be the ECB's interest rate decision and press conference. Our baseline is for the 'refi' rate to be lowered by

50bp to 0.50%, a larger cut than the consensus expectation. We also look for a cut in the deposit rate from 0.25% to zero, thoughconcerns about the possible ramifications of doing so may mean that it is not reduced (in which case the 'refi' rate would probably be

lowered by only 25bp), or is lowered to 0.05% or 0.10%.


Macro Research

Malaysia: Trade surplus at decade lows on higher imports

4 July 2012

Rahul Bajoria, Wai Ho Leong

Exports rose 6.7% y/y in May, higher than market expectations of a 4.5% rise (Barclays +3.4%). This compares with -0.1% in April.

Imports rose a large 16.2%, up from a 7.4% increase in April. As a result, the trade surplus contracted further, to MYR4.6bn in May, the

lowest level since July 2002. Import growth was driven by strong demand for intermediate and capital goods. In particular, capital

imports may have included delivery of the first A380 aircraft to Malaysian Airlines, which was handed over on 30 May. Malaysia-based

Air Asia, a leading carrier in the region, has also been buying smaller aircraft at a rapid pace. We think similar import spikes should be

expected in next 2-3 months, as more such deliveries take place. Despite the upside surprise in May, export momentum has been on

the softer side in the past few months. Our view remains that external headwinds are likely to remain, but domestic demand gives the

Malaysian economy a strong buffer. We maintain our 2012 GDP forecast of 4.7% growth. Despite today's fall in the trade surplus, we

think our current account surplus forecast of USD31.3bn remains on track, though downside risks have risen.

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12/16

Explanation of Summary of Changes table

Source: Barclays Research. Share prices and target prices are shown in the primary listing currency and EPS estimates are shown in reportingcurrency.

FY1 (E): Current fiscal year estimates by Barclays Research.

FY2 (E): Next fiscal year estimates by Barclays Research.

Stock Rating: 1-OW: 1-Overweight 2-EW: 2-Equal Weight 3-UW: 3-Underweight RS: RS-Rating Suspended

Sector View: 1-Pos: 1-Positive 2-Neu: 2-Neutral 3-Neg: 3-Negative

Back to Summary of Changes


13/16

Back to Top

Analyst Certification:

Each research report excerpted herein was certified under Reg AC by the analyst primarily responsible for such report as follows: I hereby certify

that: 1) the views expressed in this research report accurately reflect my personal views about any or all of the subject securities referred to in this

report and; 2) no part of my compensation was, is or will be directly or indirectly related to the specific recommendations or views expressed in this

report.

Important Disclosures:

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Guide to the Barclays Fundamental Equity Research Rating System:

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In addition to the stock rating, we provide sector views which rate the outlook for the sector coverage universe as 1-Positive, 2-Neutral or 3-Negative

(see definitions below). A rating system using terms such as buy, hold and sell is not the equivalent of our rating system. Investors should carefullyread the entire research report including the definitions of all ratings and not infer its contents from ratings alone.

Stock Rating

- The stock is expected to outperform the unweighted expected total return of the sector coverage universe over a 12-month1-Overweight

investment horizon.

- The stock is expected to perform in line with the unweighted expected total return of the sector coverage universe over a 12-month2-Equal Weight

investment horizon.

- The stock is expected to underperform the unweighted expected total return of the sector coverage universe over a 12-month3-Underweight

investment horizon.

- The rating and target price have been suspended temporarily due to market events that made coverage impracticable or toRS-Rating Suspended

comply with applicable regulations and/or firm policies in certain circumstances including where the Corporate and Investment Banking Division of

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Sector View

- sector coverage universe fundamentals/valuations are improving.1-Positive

- sector coverage universe fundamentals/valuations are steady, neither improving nor deteriorating.2-Neutral

- sector coverage universe fundamentals/valuations are deteriorating.3-Negative

Distribution of Ratings:

Barclays Equity Research has 2356 companies under coverage.

43% have been assigned a 1-Overweight rating which, for purposes of mandatory regulatory disclosures, is classified as a Buy rating; 53% of

companies with this rating are investment banking clients of the Firm.

42% have been assigned a 2-Equal Weight rating which, for purposes of mandatory regulatory disclosures, is classified as a Hold rating; 47% of



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13% have been assigned a 3-Underweight rating which, for purposes of mandatory regulatory disclosures, is classified as a Sell rating; 39% of


Guide to the Barclays Research Price Target:

Each analyst has a single price target on the stocks that they cover. The price target represents that analyst's expectation of where the stock will

trade in the next 12 months. Upside/downside scenarios, where provided, represent potential upside/potential downside to each analyst's price target

over the same 12-month period.

Barclays offices involved in the production of equity research:

LondonBarclays Bank PLC (Barclays, London)

New York

Barclays Capital Inc. (BCI, New York)

Tokyo

Barclays Securities Japan Limited (BSJL, Tokyo)

So Paulo

Banco Barclays S.A. (BBSA, So Paulo)

Hong Kong

Barclays Bank PLC, Hong Kong branch (Barclays Bank, Hong Kong)

Toronto

Barclays Capital Canada Inc. (BCCI, Toronto)

Johannesburg

Absa Capital, a division of Absa Bank Limited (Absa Capital, Johannesburg)

Mexico City

Barclays Bank Mexico, S.A. (BBMX, Mexico City)

Taiwan

Barclays Capital Securities Taiwan Limited (BCSTW, Taiwan)

Seoul

Barclays Capital Securities Limited (BCSL, Seoul)

Mumbai

Barclays Securities (India) Private Limited (BSIPL, Mumbai)

Singapore

Barclays Bank PLC, Singapore branch (Barclays Bank, Singapore)

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20120705-Barclays-Asia Ex-japan Morning Research Summary

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