HSBC Daily 20130617

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  • 7/27/2019 HSBC Daily 20130617

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    abcGlobal Research

    First Light Asia, ,

    Whats Changed, Research Focus, Todays EventsTicker Company Rating was Currency Target was EPS '13e EPS '14e Price Price At Close

    Down 8046 TT Nanya PCB UW N TWD 21.00 41.00 -1.02 -0.47 41.20 14 Jun

    COAL IN Coal India Limited OW INR 400.00 410.00 27.47(a) 29.27 298.90 13 JunSource: Bloomberg, HSBC estimates

    Click on title to open reports Research Focus

    Nanya PCB (8046 TT) - Downgrade to UW: Intels supply chain getting crowded Tse-yong Yao* Leading European PCB supplier AT&S entering Intels IC substrate supply chain

    suggests Nanya PCB is not a part of Intels long-term plans Downgrade to UW from N; 2013 are estimates unchanged but we lower our target price to TWD21 (from TWD41), whichis now based on net working capital minus long-term debt

    S-Oil (010950 KS) - UW: Potential for a de-rating; need a breakthrough Dennis H C Yoo* Concerns on PX oversupply risk and disadvantages in crude cost weigh on investor sentiment Ex-growth and lower dividend yield could lead to a de-rating Retain Underweight and TP at KRW60,000

    Coal India Limited (COAL IN) - OW: Continues to provide stable earnings growth Arun Kumar Singh* We conservatively forecast a stable 10% CAGR earnings growth outlook along with good dividend yield (5%) Expect sales volume and e-auction outlook to remain stable despite approvals issue and softer international prices

    We cut our estimates and target marginally from INR410 to INR400, accounting for FY13 shortfall, but maintain our OW

    17 June 2013

    Ticker Event Rating Target Price Ticker Event NI Bbg

    L'Occitane International SA 973 HK Y UW 22.00 22.7 Empire Manufacturing US Jun -Singapore Non-Oil DomesticExports

    May 4.2% NAHB Housing Market Index US Jun 45

    India Repo Rate 17-Jun 7%India Cash Reserve Ratio 17-Jun 4%Philippines Overseas Remittances Apr 7%

    Source: Bloomberg, HSBC estimates

    Colin Davis* Head of Research Marketing Asia +852 2996 6635 [email protected]

    *Employed by a non-US affiliate of HSBC Securities (USA) Inc, and is not registered/qualified pursuant to FINRA regulations

    Issuer of report: The Hongkong and Shanghai Banking Corporation Limited View HSBC Global Research at: http://www.research.hsbc.com

    Disclaimer & DisclosuresThis report must be read with the disclosures in the Disclosure appendix, and the Disclaimer, which forms part of itDisclosures for companies can be accessed via the hyperlinks to the original published research, which can befound in the title

    https://www.research.hsbc.com/R/20/fLTZhwAhttps://www.research.hsbc.com/R/20/Q0WpnTYhttps://www.research.hsbc.com/R/20/885L6Nshttp://www.research.hsbc.com/https://www.research.hsbc.com/R/20/885L6Nshttps://www.research.hsbc.com/R/20/Q0WpnTYhttps://www.research.hsbc.com/R/20/fLTZhwAhttp://www.research.hsbc.com/
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    First Light Asia17 June 2013

    ab c

    RegionalMine & Dime - POSCO: Impact of power-shortage warning to be limited Simon Francis*

    Korea issued a preliminary power-shortage warning after a corruption scandal forced the suspension of two nuclear reactors. In response, the nations major steel mills have agreed to participate in the governments move to save electricity bycurtailing usage during the peak season.

    The Korea Iron & Steel Association announced on 9 June that its members will reduce their daily electricity consumption by 1.1m KW in August when the demand for electricity tends to spike due to air conditioning usage.

    China & Hong KongFrom the horses mouth - The latest on local government debt in China Qu Hongbin

    In its latest report, the State Audit Office estimates local debt has grown 6% pa since 2011, implying the local governmentdebt-GDP ratio has fallen from 26% to 23%

    HSBC estimates that total local government debt topped RMB12trn, of which 78% are bank loans Issuing municipal bonds and selling assets could be feasible ways to mitigate the liquidity risk

    IndiaIndia - Still moderating: May WPI inflation eased to 4.7% y-o-y Leif Eskesen

    May WPI inflation eased to 43-month low of 4.7% y-o-y (vs. 4.9% in April) led by energy, minerals and manufactured goods. However, food inflation picked up and inflation rose slightly on a sequential basis. Inflation is likely to remain relatively benign in coming months as commodity prices remain low and domestic demandremains soft.

    Shunning India and Indonesia bonds - Foreign flows compass Andr de Silva EM bond funds recorded weekly outflows of USD2.5bn, the largest amount since September 2011 India and Indonesia countries, which run a current account deficit observed the largest foreign selling of bonds in Asia

    GlobalHSBC Steel Weekly - EU to the rescue Thorsten Zimmermann*

    EU has published its Steel Action Plan Interest and support is positive but the political process will likely take time that the industry might not have

    Platinum Group Metals Outlook - Supply squeezes to drive rallies James Steel We lower our 2013 and 2014 platinum price forecasts, but expect a growing supply squeeze to be price supportive We expect the platinum supply/demand deficit to reach record levels on static supply and rising ETF and physical demand We maintain our 2013 palladium price forecast; eroding Russian stockpiles and weak production are price supportive

    Market dataMarkets HSBC Last 5d % Forecast GDP (%Yr) Int Rate USD vs CCY HSBC Last 5d % Commodities HSBC Last 5d %

    HSI 24,000 20,969 -3.98 US 1.7 0-0.25 EUR 1.35 1.33 0.93 Oil 106.6 97.9 1.92

    SHCOMP 2,500 2,162 -4.86 China 8.6 6.00 CNY 6.18 6.13 0.04 Gold 1,700 1389 0.41

    TAIEX 8,300 7,938 -1.96 Taiw an 4.2 2.375 TWD 29.2 29.86 -0.33 Coal (Thermal) 90 86 -0.46

    KOSPI 2,300 1,889 -1.80 Korea 3.8 3.25 KRW 1,090.0 1126 -0.84 Steel (HRC Asia) 711TOPIX 780 1,056 -0.05 Japan 1.2 0-0.10 JPY 78.0 94.5 3.25 Aluminium 2,150 1813 -5.94

    BSE 30 21,700 19,178 -1.29 India 5.5 7.25 INR 52.0 57.53 -0.81 Copper 7,500 7058 -3.47

    Source: Bloomberg

    https://www.research.hsbc.com/midas/Res/RDV?p=pdf&key=1tPRaII20K&n=375409.PDFhttps://www.research.hsbc.com/midas/Res/RDV?p=pdf&key=Mv2WYqd7yt&n=375435.PDFhttps://www.research.hsbc.com/midas/Res/RDV?p=pdf&key=tsMnGKuYB9&n=375473.PDFhttps://www.research.hsbc.com/midas/Res/RDV?p=pdf&key=8CS0VFLpsb&n=375430.PDFhttps://www.research.hsbc.com/midas/Res/RDV?p=pdf&key=nVpsvm0YWY&n=375236.PDFhttps://www.research.hsbc.com/midas/Res/RDV?p=pdf&key=WnxAg5bwIw&n=375128.PDFhttps://www.research.hsbc.com/midas/Res/RDV?p=pdf&key=WnxAg5bwIw&n=375128.PDFhttps://www.research.hsbc.com/midas/Res/RDV?p=pdf&key=nVpsvm0YWY&n=375236.PDFhttps://www.research.hsbc.com/midas/Res/RDV?p=pdf&key=8CS0VFLpsb&n=375430.PDFhttps://www.research.hsbc.com/midas/Res/RDV?p=pdf&key=tsMnGKuYB9&n=375473.PDFhttps://www.research.hsbc.com/midas/Res/RDV?p=pdf&key=Mv2WYqd7yt&n=375435.PDFhttps://www.research.hsbc.com/midas/Res/RDV?p=pdf&key=1tPRaII20K&n=375409.PDF
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    Nanya PCB (8046 TT)Electronic Equipment17 June 2013

    ab c

    Financials & valuationFinancial statements

    Year to 12/2012a 12/2013e 12/2014e 12/2015e

    Profit & loss summary (TWDm)

    Revenue 29,723 31,294 33,574 33,375EBITDA 543 1,524 1,745 2,633Depreciation & amortisation -3,388 -3,147 -2,882 -2,807Operating profit/EBIT -2,845 -1,623 -1,137 -174Net interest 550 844 772 768PBT -2,295 -779 -365 594HSBC PBT -2,295 -779 -365 594Taxation 231 114 55 -89Net profit -2,064 -665 -310 505HSBC net profit -2,064 -665 -310 505

    Cash flow summary (TWDm)

    Cash flow from operations 2,948 -46 2,450 3,690Capex -2,279 -1,668 -1,700 -1,600Cash flow from investment -1,605 -2,037 -1,700 -1,600Dividends -1,299 0 0 0Change in net debt 1,889 1,711 -1,044 -1,937FCF equity 456 405 834 1,906

    Balance sheet summary (TWDm)

    Tangible fixed assets 17,951 19,154 17,988 16,777Current assets 20,320 19,510 20,659 22,531Cash & others 9,802 8,110 9,154 11,316Total assets 38,930 39,354 39,365 40,055Operating liabilities 5,057 3,853 4,134 4,279Gross debt 2,946 2,965 2,965 3,190Net debt -6,856 -5,146 -6,189 -8,127Shareholders funds 30,927 32,392 32,081 32,586Invested capital 23,412 26,701 25,358 23,712

    Ratio, growth and per share analysis

    Year to 12/2012a 12/2013e 12/2014e 12/2015e

    Y-o-y % change

    Revenue -23.4 5.3 7.3 -0.6EBITDA -91.1 180.7 14.5 50.9Operating profit -196.0 - - -PBT -156.2 - - -

    HSBC EPS -164.9 - - -Ratios (%)

    Revenue/IC (x) 1.2 1.2 1.3 1.4ROIC -10.5 -5.5 -3.7 -0.6ROE -6.3 -2.1 -1.0 1.6ROA -6.1 -3.5 -2.5 -0.4EBITDA margin 1.8 4.9 5.2 7.9Operating profit margin -9.6 -5.2 -3.4 -0.5Net debt/equity -22.2 -15.9 -19.3 -24.9Net debt/EBITDA (x) -12.6 -3.4 -3.5 -3.1Per share data (TWD)

    EPS reported (fully diluted) -3.19 -1.02 -0.47 0.77HSBC EPS (fully diluted) -3.19 -1.02 -0.47 0.77DPS 2.01 0.00 0.00 0.00

    Book value 47.78 49.79 49.07 49.59

    Valuation data

    Year to 12/2012a 12/2013e 12/2014e 12/2015e

    EV/sales 0.6 0.7 0.6 0.5EV/EBITDA 35.2 13.6 11.3 6.7EV/IC 0.8 0.8 0.8 0.7PE* NM NM NM 53.6P/Book value 0.9 0.8 0.8 0.8FCF yield (%) 1.8 1.6 3.2 7.4Dividend yield (%) 4.9 0.0 0.0 0.0

    Note: * = Based on HSBC EPS (fully diluted)

    Price relative

    18

    38

    58

    78

    98

    118

    138

    2011 2012 2013 2014

    18

    38

    58

    78

    98

    118

    138

    Nanya PCB Rel to TAIWAN WEIGHTED INDEX

    Source: