BNP Daily 20131011

11 October 2013 **************************************************************************************
UPGRADE
Japan:
BNP Paribas Events

CONFERENCE / CORPORATE DAY 17 Oct 13 Taiwan October Corporate Day 21&22 Nov 13 Asia Pacific Industrials Conf. COMPANY ROADSHOWS (By Location) Hong Kong/China Emperor International Holdings (163 HK) NDR Industry Expert Roadshow Formosa Petrochemical Corp (6505 TT) Singapore Industry Expert Roadshow Ping An (2318 HK) Ascendas India Trust (AIT SP) Europe Makalot (1477 TT) Shinsei Bank (8303 JP) Chunghwa Telecom (2412 TT)
Tokyo Electron: Merger hopes (Yoshitsugu Yamamoto) 8035 JP; U/g to HOLD from Reduce; CP: JPY5,230; TP: JPY5,500 (from JPY3,000) High expectations about benefits of AMAT merger 2014E: P/E 110.3x, P/B 1.5x, Yield 1.0% Click here for full story PAGE 3
25 Oct 13 6 Nov 13 14-15 Nov 13
**************************************************************************************
MACRO-ECONOMICS & EQUITY STRATEGY

Asian Instant Insights South Korea: BoK Decision - Oct 2013 (Mark Walton) Click here for full story Asian Instant Insights Australia: Labour Market - Sep 2013 (Mark Walton) Click here for full story Asian Desknote: Malaysia Shuffling the deck chairs (Philip McNicholas) Click here for full story Emerging Market Strategy: Quality improvers monthly review (Martial Godet) Small EM outperformance in Q313 Slightly better profitability Momentum of cyclical sectors is still weak PAGE 7 PAGE 6 PAGE 5 PAGE 4
10-11, 25 Oct 13 28 Oct 13 30 Oct 13
28 Oct 1 Nov 13 4-8 Nov 13 13-15 Nov 13 15, 18-19 Nov 13 25-29 Nov Week of 2 Dec
Lion Air SMIC (981 HK ) Advanced Semiconductor Engineering ASE (2311 TT) US Sanrio (8136 JP) Shinsei Bank (8303 JP) Japan Samsung Life (032830 KS)
18-22 Nov 13 18-22 Nov 13 15-17 Nov 13
Click here for full story
**************************************************************************************
COMPANY RESEARCH (N. ASIA, ASEAN, JAPAN, INDIA, TURKEY & SOUTH AFRICA)
HK/China:
Agile Property Sales set to speed up (Ronney Cheung) 3383 HK; BUY (unchanged); CP: HKD9.35; TP: HKD11.55 September sales improved to RMB3.48b 2013E: P/E 4.8x, P/B 0.8x, Yield 5.2% Click here for full story Biostime International: Another solid quarter (Charlie Y Chen) 1112 HK; BUY (unchanged); CP: HKD64.50; TP: HKD70.50 Active customer figure up 37.8%, keeping momentum 2013E: P/E 28.3x, P/B 11.8x, Yield 2.0% Click here for full story
. Japan:
PAGE 8
PAGE 9
Advantest Corp: Rebound not until new year? (Yoshitsugu Yamamoto) 6857 JP; HOLD (unchanged); CP: JPY1,118; TP: JPY1,150 (from JPY1,700) Tester orders unexpectedly weak recently 2014E: P/E (35.9)x, P/B 1.5x, Yield 1.8% Click here for full story PAGE 10
PREPARED BY NON-US BROKER-DEALER(S): BNP PARIBAS SECURITIES (ASIA) CO LTD THIS MATERIAL HAS BEEN APPROVED FOR U.S DISTRIBUTION. ANALYST CERTIFICATION AND IMPORTANT DISCLOSURES CAN BE FOUND AT APPENDIX ON PAGE 18.
SALES MORNING MEETING IDEAS
11 OCTOBER 2013
**************************************************************************************
COMPANY RESEARCH (N. ASIA, ASEAN, JAPAN, INDIA, TURKEY & SOUTH AFRICA) (CONTD)
Dainippon Screen: Ready for industry reshuffle? (Yoshitsugu Yamamoto) 7735 JP; HOLD (unchanged); CP: JPY528; TP: JPY550 Tweaking estimates on growth in Jul-Sep SPE orders 2014E: P/E 22.4x, P/B 1.5x, Yield 0.6% Click here for full story JSR Corp: Emergence of catalysts (Yoshitsugu Yamamoto) 4185 JP; BUY (unchanged); CP: JPY1,716; TP: JPY2,300 FY3/15 earnings drivers to emerge from 4QFY3/14 2014E: P/E 14.1x, P/B 1.2x, Yield 2.2% Click here for full story Shin-Etsu Chemical: Modest slowdown in 2H (Yoshitsugu Yamamoto) 4063 JP; BUY (unchanged); CP: JPY5,680; TP: JPY8,000 PVC upbeat, limited wafer downside, tweaking estimates 2014E: P/E 18.5x, P/B 1.4x, Yield 1.8% Click here for full story Sumitomo Metal Mining: Risk of underperformance (Toshiyuki Johno) 5713 JP; REDUCE (unchanged); CP: JPY1,336.00; TP: JPY1,100.00 Maintain JPY1,100 TP, REDUCE rating 2014E: P/E 11.2x, P/B 0.9x, Yield 2.4% Click here for full story
. Thailand:
BNP Paribas Events

COMPANY ROADSHOWS (By Date) 10-11, 25 Oct 13 Industry Expert Roadshow 15-17 Oct 13 Samsung Life (032830 KS) 25 Oct 13 Emperor International Holdings (163 HK) NDR 28 Oct 13 Ping An (2318 HK) 28 Oct 1 Nov 13 Makalot (1477 TT) 30 OCT 13 Ascendas India Trust (AIT SP) 4-8 Nov 13 Chunghwa Telecom (2412 TT) 6 Nov 13 Industry Expert Roadshow 13-15 Nov 13 Shinsei Bank (8303 JP) 14-15 Nov 13 Formosa Petrochemical Corp (6505 TT) 15, 18-19 Nov 13 Lion Air 18-22 Nov 13 Sanrio (8136 JP) Shinsei Bank (8303 JP) 25-29 Nov 13 SMIC (981 HK ) Week of 2 Dec Advanced Semiconductor Engineering ASE (2311 TT)
SG JP HK SG EU SG EU HK EU HK EU US US EU EU
PAGE 11
PAGE 12
PAGE 13
PAGE 14
Siam Cement: 3Q13 earnings preview: Still solid (Somkij Oranchatchawan) SCC TB; BUY (unchanged); CP: THB432.00; TP: THB480.00 Booking a non-recurring gain of THB1.5b in 3Q13 2013E: P/E 15.0x, P/B 3.2x, Yield 3.9% Click here for full story
. India:
PAGE 15
Bharat Heavy Electricals: Expecting another weak quarter (Girish Nair) BHEL IN; REDUCE (unchanged); CP: INR147.65; TP: INR95.00 We expect another weak quarter 2014E: P/E 10.0x, P/B 1.1x, Yield 3.2% Click here for full story IRB Infrastructure: Uneventful 2Q, but catalysts ahead (Vishal Sharma) IRB IN; BUY (unchanged); CP: INR79.50; TP: INR152.00 2QFY14 results likely to be uneventful 2014E: P/E 5.7x, P/B 0.7x, Yield 4.4% Click here for full story PAGE 17 PAGE 16
BNP PARIBAS
Our research is available on Thomson One, Bloomberg, TheMarkets.com, Factset and on http://eqresearch.bnpparibas.com/index. Please contact your salesperson for authorisation. Please see the important notice on the back page.
CHANGE IN RECOMMENDATION
COMPANY REPORT
EQUITIES RESEARCH 8035 JP
THE STREET HOW WE DIFFER FROM T

BNPP Target Price (JPY) EPS 2014 (JPY) TARGET PRIOR TP CLOSE UP/DOWNSIDE JPY5,500 JPY3,000 JPY5,230 +5.2% Market Recs EPS 2015 (JPY) 5,500 47 102 Positive 12 Consensus 5,059 87 220 Neutral 6 % Diff 8.7 (46.0) (53.6) Negative 3
TOKYO ELECTRON
JAPAN / SEMICONDUCTORS
HOLD
FROM REDUCE INDUSTRY OUTLOOK
KEY STOCK DATA

YE Mar (JPY b) Revenue Op profit Prior op profit Recurring profit Net profit EPS (JPY) P/E (x) Dividend yield (%) 2014 2014E 552.0 10.0 10.0 13.6 8.5 47 110.3 1.0 17.6 1.5 (7.1) 1.4
Jan-13 Apr-13
Merger hopes
UPGRADE TO HOLD
High expectations about benefits of AMAT merger Our earnings estimates are unchanged: We forecast 1HFY3/14 OP of JPY6.5b (guidance the same) and FY3/14 OP of JPY10b (JPY18b). We think the risk of missing full-year year guidance is high, but that shortfall will have a limited impact on the share price, given high expectations on the announcement of the merger with Applied Materials (AMAT US).
2014C 562.0 18.0 13.0 73 71.6 1.0 -
2015E 582.0 25.0 25.0 28.6 18.3 102 51.2 1.0 13.9 1.5 (8.6) 3.0
2016E 508.0 5.0 5.0 8.6 5.3 30 176.8 1.0 24.5 1.5 (14.1) 0.9
Oct-13 36 26
CATALYST
AMAT share price a greater factor than order trends short With the announcement of the AMAT merger, we believe short-term fundamentals are less likely to be a share price catalyst. In real terms, the share swap ratio will be 3.25:1, where TEL shareholders receive 3.25 shares while AMAT shareholders receive one share. are. In the near term, we expect TEL stock to head for 3.25x the AMAT share price.
EV/EBITDA (x) Price/book (x) Net debt/equity (%) ROE (%)

Oct-12 6,050 5,050 4,050 3,050 2,050 1,050 (JPY)
Jul-13
16 6 (4) (14) (24) Tokyo Electron Rel to TOPIX Index (%)
VALUATION
Our TP is JPY5,500, based on the merger ratio Based on AMATs October 8 close of USD17.50, we expect TEL to head toward JPY5,500 (17.5 x 3.25 x JPY/USD rate te of 97.3 = JPY5,533). Our JPY5,500 TP equals a P/BV of 1.5x FY3/14E, , a similar valuation to Advantest (6857 JP), , which also has low profit margins. We upgrade TEL to HOLD from Reduce. Risks include failure to gain merger approval.
Share price performance Absolute (%) Relative to country (%) Next results
1 Month 3 Month 12 Month 21.8 22.3 6.5 9.0 60.2 (0.2)
October 2013 9,628 71.9 94 Master Trust Bank of Japan (11%) 5,980/3,265 45.3 0.179
KEY CHART
Quarterly SPE and FPD orders
(JPY b) 250 200 150 100 50 0 SPE FPD
Mkt cap (USD m) 3m avg daily turnover (USD m) Free float (%) Major shareholder 12m high/low (JPY) 3m historic vol. (%) ADR ticker ADR closing price (USD) )
3/99 9/99 3/00 9/00 3/01 9/01 3/02 9/02 3/03 9/03 3/04 9/04 3/05 9/05 3/06 9/06 3/07 9/07 3/08 9/08 3/09 9/09 3/10 9/10 3/11 9/11 3/12 9/12 3/13 9/13E
Issued shares (b)
Sources: Tokyo Electron; BNP Paribas estimates
Sources: Bloomberg; Company estimates (C); BNP Paribas estimates
Yoshitsugu Yamamoto
yoshitsugu.yamamoto@japan.bnpparibas.com +81 3 6377 2259
11 OCTOBER 2013
Market Economics
11 October 2013
Asian Instant Insight
South Korea: BoK Decision (Oct 2013)

Key Facts Key Chart: Soft inflation
6 (% y /y ) H e a d lin e C P I 5
The policy rate was again left unchanged at 2.50%, as expected. BoK sounds i ncrementally more re laxed with each meeting. China uptick and currency stabilisation likely supplying succour. Inflation outlook remains unlikely to drive policy. benign but
4 B o K ta rg e t ra n g e
C ore C P I
00
01
02
03
04
05
06
07
08
09
10
11
12
13
The BoK le ft its policy rate unchanged at 2.50% at the October meeting. The Banks assessment of both the external and domestic growth outlooks is predominantly positive, with special mention given to an uptick in China. Inflation is expected to be low, a view carried over from previous meetings, but not sufficiently so to s uggest further policy action is likely. Though we have misgivings about the sustainability of Chinas recent growth spurt, the BoKs macro view is broadly similar to our own. We expect the policy rate to be on hold during 2014.
With each successive decision since the 7-day repo rate was last cut ( by 25bp) i n May, the Bank of Kore a has sounded incrementally more relaxed about the policy backdrop. This continued in O ctober. In the accompanying statement, the B oKs Monetary Policy Committee retained its view that the global economy will sustain its modest recovery going forward while its assessment of current external conditions was markedly more upbeat than in earlier months. In particular, China was noted as having shown signs of recovery; by comparison, the August statement singled China out as a pot ential policy concern. The BoK also sounded more optimistic about Europe (or, at least, less pessimistic). The Banks catalogue of external risks has also evolved somewhat. Octobers statement dropped mention of the issue of fiscal consolidation in major countries, instead specifically noting the heightening of uncertainties surrounding the US government budget bill and debt ceiling increase. These risks are neither mutually exclusive nor directly comparable but wed judge the BoKs overall worry level hasnt lifted appreciably compared to previous months. China is the one possible blind spot in t he BoKs external risk assessment, in our view. As w eve pointed o ut previously, the recent lift in Chinas activity data was largely infrastructure-driven and credit-fuelled, serving only to delay the needed rebalancing of the Chinese economy to m ore sustainable growth drivers. This transition will inevitably mean lower Chinese overall growth, with the potential to be a major drag on Asian trading partners.
4
Source: BNP Paribas, Reuters EcoWin Pro
On the d omestic front, BoK seems as comfortable with Korean as with global prospects. It now judges exports to be showing buoyancy, an upgrade from the language used in September. Overall, the Committee appraises the moderate economic growth to be continuing. The tone is only incrementally different from in September but is clearly more positive than an earlier assessment that Korean growth was weak and driven exclusively by exports. BoKs outlook of inflation is that it w ill remain low for the time being, a view essentially unchanged from earlier. This is despite a sharp drop in headline inflation to 0.8% y/y in September which the B ank attributes to falling commodity prices. This is a fair assessment, but it will make it that much harder for the headline rate to climb back to the 2.53.5% target range, especially given the BoKs acknowledgement that commodity prices are likely to continue to compress headline inflation going forward. At the same time, core inflation will also be under pressure, courtesy of a negative output gap. BoK notes that the output gap will narrow but remain negative for a considerable time going forward. This is broadly in line with our view that the output gap will swing into positive territory only late next year. This means headline inflation wont return to the target range until well into 2015 in our view. Overall, the BoKs assessment of current and likely future economic conditions is similar to our own. Koreas growth prospects are l ooking up, with demand for manufactured exports set to increase next year in line with improvement in advanced economies. If th ere is a particular motivation to cut rates again, it is the extremely soft inflation outlook. But BoK has held expectations of low inflation for some time without feeling compelled to ease further. Furthermore, the central bank shares our v iew that inflati on will increase, albeit slowly and belatedly. This suggests that rates will be on hold for some time, though with risk skewed toward another cut.
Mark Walton 852 2108 5105 mark.walton@asia.bnpparibas.com
Market Economics
11 October 2013
Asian Instant Insight
Australia: Labour Market (Sep 2013)

Key Facts Key Chart: Poor participation
Employment rose by Augusts decline.
9.1k,
reversing but
8 .0 7 .5 7 .0 6 .5 6 .0 5 .5 5 .0 4 .5 4 .0 3 .5 P a r tic ip a tio n R a te ( % , R H S )
6 6 .5 6 6 .0 6 5 .5 6 5 .0 6 4 .5 6 4 .0 6 3 .5 6 3 .0 6 2 .5 6 2 .0
Full-time employment edged up continues to trend lower.
Unemployment drops t o 5.6%, driven by another clear fall in participation. Soft undertones are unlikely to alter RBAs view.
Total employment increased 9.1k in September, roughly in line with expectations, and effectively countered a similarly-sized fall the previous month. That helped the unemployment rate lower, to 5.6%. But the biggest driver of officially-measured joblessness is falling participation, which declined to a 7-year low, itself an indication of falling job prospects. Hours worked fell slightly from a month earlier but a positive trend suggests GDP growth will remain around 0.6% QoQ in Q3. Ov erall the report portrays a st ill-weakening labour market, in our view, but will not prompt a f orward-looking RBA to ease further.
Septembers Australian labour report was a mixed bag. The two key data points were good: total employment increased 9.1k, due to roughly equal gains in full- and part-time jobs, while the unemployment rate dropped to 5.6%, a four-month low. The latter w as better than market expectation for unemployment to remain unchanged at 5.8%. Beyond these headlines, however, the bulk of Septembers figures portrayed a still-soft labour market. Trend employment, a bett er barometer of the un derlying state of the labour market than the inherently noisy headline figure, fell for th e fourth consecutive month. This is the l ongest string of mo nthly trend em ployment declines since the global financial crisis, and is driven entirely by falls i n the number of full-time jobs. The substitution of part-time for fulltime positions suggests businesses are uncertain about their prospects, something also borne out by weak readings in surveyed capex intentions. The drop in t he unemployment rate similarly disguised worsening fundamentals. Though helped by Septembers employment increase, easily the bigg est influence on the unemployment rate w as a drop in the rate of la bour force participation to 64.9, its lowest level since the end of 2006. Falling participation effectively means fewer people to count as unemployed and, having looked to have stabilised in early 2013, participation has fallen sharply since June. Numerically, the c alculation of the u nemployment rate is highly sensitive to changes in participation. We estimate that without the 0.1 percentage point fall in participation in September, for instance, the unemployment rate would have remained unchanged from Augusts 5.8%. Longer term, if t he labour force participation rate were now at its
U n e m p lo y m e n t R a te ( % ) 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13
Key Chart: but working harder

5 4 3 2 1 0 -1 -2 H o u rs w o rk e d (% y /y , 3 m m a ) -3 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 E m p lo y m e n t ( % y /y , 3 m m a )
mid-2011 level of 65.6 j ust 0.7 percentage points higher than at present we calculate that the unemployment rate would be around 6 .7%, not the 5.6% a s recorded. Falling participation is a lso a s ign of a w eak labour market in its own right, how ever, implying potential job seekers are so discouraged about employment prospects that they withdraw from the job-hunt all together. Against these weak fundamentals, aggregate hours worked provided a slightly more positive tone. Though down slightly month-on-month, hours worked for th e three months to September increased 0.6%, the fastest three-month pace since the e nd of 2 011. This suggests Q3 GDP growth is likely hold at around its Q2 pace of 2 .6% YoY. From th e perspective of households, longer hours will also be helping to offset the hit to incomes from lower participation, falling employment and slower wage growth. Overall, Septembers employment report was not as go od as initial headlines suggested. Markets seemed to share this assessment; AUD rallied briefly following the data release before being caught in a w ider sell-off. From a policy perspective, however, the fi gures are u nlikely to make much difference to the view of the RBA which already expected the labour market to remain weak. More important for the policy outlook are nascent signs that the wider Australian economy is improving. We retain our view that rates will be on hold for the duration. Mark Walton 852 2108 5105 mark.walton@asia.bnpparibas.com
5
Malaysia: Shuffling the deck chairs
Rumours are circling the government may remove housing loans made to civil servants from its balance sheet and transfer them to the DFIs and commercial banks. If removed, the l oans lower Federal g overnment debt by 4.4pp of G DP, suggesting additional headroom from the governments self-imposed debt ceiling at 55% of GDP. This should not be v iewed as fiscal consolidation but rather a de sperate effort t o avoid breaking the debt ceiling that risks further straining fiscal credibility. While the government is well within its rights to take such action, it appears politically motivated and, in our view, makes negative rating action more likely, not less.
Government may sell mortgage loans to banks
Malaysian media has reported that a local analyst, in their 2014 Budget preview, flagged the government may remove civil servant housing loans currently on its balance sheet and transfer them to government-owned Development Financial Institutions (DFIs). Rumours are also beginning to circulate that some commercial banks may be asked to take on some of the loans. If implemented, this is the latest effort by the Malaysian government to avoid breaking of its selfimposed debt ceiling at 55% of GDP. The previous effort, an MYR0.2 increase in domestic fuel prices, was announced on the first business day after the release of Q2 fiscal data showing the debt stock rose to 54.6% of GDP from 53.8% in Q1 (see Malaysia: Missing the Forest for the Trees). Thus, it is hard to see this move as being fundamentally positive. While acting within its rights, the government would be flouting the spirit of its own fiscal rules. Moreover, the m otivations for the transfer appear political rather than economic. As such, comments invoking a desire to be fiscally responsible will become harder to believe. In our view, an act such as this makes negative action, be it a negative outlook or an outright downgrade, by one or more of the rating agencies more likely, not less. These housing loans are estimated to be worth MYR42bn (4.4% of GDP or 8% of public debt). If all are sold to the banks, public debt would fall to 50.2% of GDP. However, as a portion of the loans have been securitised, the g overnment may only be able to transfer 50%-75% of the stock. In t he absence of further fiscal reform to b roaden the rev enue base and reduce allocations to non-discretionary spending items such as fuel subsidies, this merely provides a one-time downshift rather than reverse the upward grind of the public debt/GDP ratio (Chart 1). Admittedly, a range of Malaysias other fiscal metrics would improve. The debt/revenues ratio would fall from 254% to 233%. Moreover, the government would be more assured that interest payments, currently equivalent to 9.9% of revenues, are kept below the 15% limit established under their existing fiscal rules. Stopping the governments mortgage lending to c ivil servants could also help arrest the escalation in off-budget borrowing of recent years and improve fiscal transparency over the longer-term (Chart 2). Chart 2: Going off-budget - I
1.5 % of G DP C hange in net debt stck less fiscal deficit (LHS ) P ublic D ebt (RH S) 60
Avoiding a break of the debt ceiling is the goal
but this goes against the spirit of having one!
Public debt drops but would still grind higher
Admittedly, there are some positives to be found
Chart 1: Debt trajectory

60 55 50 45
-0.5
G eneral G overnm ent D ebt, % of G DP W ith housing loans
1.0
55
0.5
W ithout housing loans
50 0.0 45
40 35
-1.0
40
07
08
09
10
11
12
13
14
15
-1.5
06
07
08
09
10
11
12
13
35
Source: CEIC, BNP Paribas Philip McNicholas Asian Desknote
Source: CEIC, BNP Paribas
11 October 2013
1 OCTOBER 2013
EQUITIES RESEARCH
EMERGING MARKET STRATEGY
Quality improvers monthly review

Small EM outperformance in Q313 The rebound of cyclical sectors (led by Energy) and North Asian markets helped global emerging markets to slightly outperform in Q3. The surprise of the Fed not tapering quantitative easing helped current account deficit countries offset a portion of their YTD underperformance in September. Slightly better profitability The downward trend in profitability observed in Emerging Markets since 2011 seems to have weakened over the past three months and EM ROE even improved slightly. A strong earnings season in China and the absence of tapering gave some relief to Emerging Markets. EM Competitiveness has been boosted by lower currencies, and still elevated energy and commodity prices also helped EM resource stocks. Nonetheless, it is too early to call a reversal of the past three-year trend, as most of the improvement came from higher leverage. Momentum of cyclical sectors is still weak Although the profitability picture is somewhat more balanced than three months ago, our quality improvers screening for October indicates that Materials, Industrials and Energy are still unconvincing compared to domestic growth sectors. Financials continue to top the ranking while Consumer Staples stocks slightly declined and are now ranked below Consumer Discretionary stocks. IT profitability trends continue to lag, confirming the recent relative deterioration. Country-wise, China has improved to top the ranking for the third month in a row. Other noticeable changes are concentrated on Russia (positive) and Korea and Turkey (negative). Mixed performances of our profitability-based portfolios, strong performance of the long/short approach Performances of our portfolios based on quality improvement ranking were mixed in Q3 The quarterly rebalanced portfolio of the top-50 large cap quality improvers (with constrained turnover) underperformed MSCI Emerging Markets by 3.1% in Q3. The monthly rebalanced top-100 all-cap portfolio outperformed by 1.70% in Q3. The long30/short30 portfolio made of the three best and three worst ranked stocks in each sector (monthly rebalancing) outperformed by 4% in Q3 and continues to show a remarkable ability to generate alpha.
Martial Godet
martial.godet@uk.bnpparibas.com +44 (0) 20 7595 8132
NEWS FLASH
EQUITIES RESEARCH 3383 HK
HOW WE DIFFER FROM THE STREET
BNPP Target Price (HKD) EPS 2013 (RMB) TARGET CLOSE UP/DOWNSIDE HKD11.55 HKD9.35 +23.5% Market Recs EPS 2014 (RMB) 11.55 1.54 1.73 Positive 22 Consensus 10.63 1.39 1.54 Neutral 12 % Diff 9% 11% 12% Negative 1
AGILE PROPERTY
CHINA / REAL ESTATE
BUY
INDUSTRY OUTLOOK
KEY STOCK DATA

YE Dec (RMB m) Revenue 2013E 34,094 5,309 1.54 9.1 55.5 4.8 5.2 4.4 0.8 65.9 17.5
Jan-13 Apr-13 Jul-13
Sales set to speed up

EVENT
September sales improved to RMB3.48b Agiles September sales improved to RMB3.48b, up 6% m-m and 62% y-y, with a sales volume of 323k sqm or an implied ASP of RMB10,760/sqm (down 12% m-m but up 43% y-y). Ytd, total sales value is still relatively low at RMB25.5b, implying only 61% of its target (RMB42b) has been achieved. This, however, already looks to us priced in.
2014E 39,414 5,956 1.73 12.2 4.3 5.8 4.2 0.7 69.1 16.9
2015E 45,425 7,008 2.03 17.7 NA 3.6 6.9 3.7 0.6 69.3 17.2
Oct-13 33 23 13 3 (7) (17)
Rec. net profit Recurring EPS (RMB) EPS growth (%) Disc/(Prem) to NAV (%) Recurring P/E (x) Dividend yield (%) EV/EBITDA (x)
SUMMARY
Significant sales pick-up likely; inventory gradually clearing We expect a sequential improvement in sales in the coming months, with new launches on the way and adoption of a more flexible pricing strategy. We believe October sales could reach as high as RMB4-5b, narrowing the gap in sales target shortfall. Inventory for projects in Nanjing and Chengdu is also starting to show signs of clearance.
Price/book (x) Net debt/Equity (%) ROE (%)

Oct-12 13 12 11 10 9 8 7 6 (HKD) Agile Property
VALUATION
Deep NAV discount of 55%; Buy with TP of HKD11.55 With the adoption of a flexible pricing strategy and a refocus back on mid-end product development with smaller-sized units, we believe Agiles sales are set to speed up. Despite the share price having risen slightly over the past few days, it still looks inexpensive, trading at a 55% NAV discount and 4.8x 2013E P/E when comparable players such as Guangzhou R&F (2777 HK; BUY; CP: HKD13.36)and KWG Property (1813 HK; HOLD; CP: HKD5.1) are trading at 35-42% NAV discounts and 5.7-6.3x 2013E P/E. Key risk is a hard landing in the property sector.
Rel to MSCI China
(%)
Share price performance Absolute (%) Relative to country (%) Mkt cap (USD m)
1 Month 3 Month 12 Month 4.6 5.2 24.3 9.7 10.0 0.1 4,159 7.5 36 Chen Zhuolin (64%) 12.68/7.31 35.2 3,449
3m avg daily turnover (USD m) Free float (%) Major shareholder 12m high/low (HKD) 3m historic vol. (%) ADR ticker ADR closing price (USD) Issued shares (m) Sources: Bloomberg consensus; BNP Paribas estimates
Ronney Cheung
ronney.cheung@asia.bnpparibas.com +852 2825 1812
Wee Liat Lee

weeliat.lee@asia.bnpparibas.com +852 2825 1105
11 OCTOBER 2013
11 OCTOBER 2013
NEW INFORMATION KONG / FOOD BEVERAGE & 8HONG CHINA TOBACCO
BIOSTIME INTERNATIONAL
TARGET PRICE HKD70.50 HKD64.50 +9.3% HKD70.50 UNCHANGED
1112 HK
HOW WE DIFFER FROM CONSENSUS TARGET PRICE (%) EPS 2013 (%) EPS 2014 (%) 32.6 17.6 8.4 MARKET RECS POSITIVE NEUTRAL NEGATIVE 10 3 0
BUY
UNCHANGED
CLOSE UP/DOWNSIDE PRIOR TP CHANGE IN TP
Another solid quarter

Active customer figure up 37.8%, keeping momentum Biostime released its 3Q operational data, with the number of active Mama100 members reaching 1.85m as of 30 September, growing 37.8% y-y. This was better than our forecast. With this nine-month data in hand, managements official guidance of 30% growth in revenue in 2013 seems conservative and we believe our FY13 revenue forecast of RMB4.77b (or 41% y-y growth) is achievable. POS increased 25.5%, drug stores catching up Biostime is also keeping up its retail network expansion, with the total number of points-of-sales increasing to 17,358 at the end of 3Q, from 13,832 a year ago. Notably, the number of drug stores with Mama100 Members Zones increased 35.5%, the fastest among all three channels. Major risk: government policy likely to be announced in October We expect the Chinese government to announce some pro-SOE policies in October that would allow large SOEs to consolidate the dairy market. As a result, Biostime may face more challenges and increased operating costs in the new environment. Valuation: TP of HKD70.50 and BUY rating maintained Our TP of HKD70.50 is unchanged, based on 25x FY14E P/E with 47.2% and 22.2% recurring EPS growth in 2013E and 2014E. The main risk is that government policy changes may increase Biostimes operating expenses and hurt earnings accordingly.
KEY STOCK DATA

YE Dec (RMB m) Revenue Rec. net profit Recurring EPS (RMB) Prior rec. EPS (RMB) Chg. In EPS est. (%) EPS growth (%) Recurring P/E (x) Dividend yield (%) EV/EBITDA (x) Price/book (x) Net debt/Equity (%) ROE (%)
Oct-12
68 58 48 38 28 18 (HKD) 193 143 93 43
2012A 3,382 748 1.22 1.22 0.0 52.9 41.6 1.7 28.5 13.2 (60.2) 34.8
2013E 4,769 1,096 1.80 1.80 0.0 47.2 28.3 2.0 20.3 11.8 (59.8) 44.4
Jul-13
2014E 6,106 1,345 2.20 2.20 0.0 22.2 23.1 2.8 15.7 9.5 (66.8) 45.8
2015E 7,510 1,631 2.66 2.66 0.0 20.8 19.2 3.4 12.7 7.9 (71.9) 45.3
Oct-13
Jan-13
Apr-13
Biostime International
Rel to MSCI China
(7) (%)
Share price performance Absolute (%) Relative to country (%) Next results Mkt cap (USD m)
1 Month 31.8 32.4
3 Month 95.5 80.8
12 Month 230.4 220.5 March 2014 5,031 8.5 25
Key chart: 3Q Mama100 members already exceed our full year forecast
('000 people) 2,000 1,500 1,000 500 825 633 685 770 1,667 1,730 1,3451,401 1,180 1,045 1,855 1,810
3m avg daily turnover (USD m) Free float (%) Major shareholder 12m high/low (HKD) 3m historic vol. (%) ADR ticker ADR closing price (USD)
Biostime Pharmaceutical (75%) 64.20/19.28 64.6 605
1Q11
2Q11
3Q11
4Q11
1Q12
2Q12
3Q12
4Q12
1Q13
2Q13
3Q13
4Q13E*
Issued shares (m)
Sources: Bloomberg consensus; BNP Paribas estimates
* BNPP forecasts Sources: Bloomberg consensus; BNP Paribas estimates
Charlie Y Chen
charlie.y.chen@asia.bnpparibas.com +852 2825 1109
CHANGE IN NUMBERS
COMPANY REPORT

BNPP Target Price (JPY) EPS 2014 (JPY) TARGET PRIOR TP CLOSE UP/DOWNSIDE JPY1,150 JPY1,700 JPY1,118 +2.9% Market Recs EPS 2015 (JPY) 1,150 (31) 27 Positive 1 Consensus 1,208 27 37 Neutral 9 % Diff (4.8) nm (27.0) Negative 7
ADVANTEST CORP
HOLD
UNCHANGED INDUSTRY OUTLOOK
KEY STOCK DATA

YE Mar (JPY b) Revenue Op profit Prior op profit Pretax profit Net profit EPS (JPY) P/E (x) Dividend yield (%) 2014E 125.8 (3.4) 11.2 (2.9) (5.4) (31) (35.9) 1.8 36.0 1.5 (21.1) (4.1)
Jan-13 Apr-13
Rebound not until new year?

ESTIMATE CHANGES
Tester orders unexpectedly weak recently We lower our estimates due to weak tester orders from Taiwans OSAT. Orders: Apr-Jun JPY39.5b, Jul-Sep JPY27b, Oct-Dec JPY26b, Jan-Mar 2014 JPY34.8b. Revised numbers: FY3/14 orders JPY127.3b (from JPY162.5b), sales JPY125.8b (JPY157b), OP JPY3.4b (JPY11.2b); FY3/15 orders JPY140.7b (JPY173.9b), sales JPY140.7b (JPY174.9b), OP JPY7.6b (JPY18.7b).
2014C 143.0 0 13.0 0.5 (2.5) (14) (78.6) Jul-13
2015E 140.7 7.6 18.7 7.6 4.6 27 42.1 1.8 10.6 1.5 (21.2) 3.4
2016E 135.9 4.0 16.9 4.0 2.6 15 74.5 1.8 13.6 1.5 (22.9) 2.0
Oct-13 53 43 33 23 13 3 (7) (17) (27) (37) (%)
OUTLOOK
Orders may rise after foundry production recovers; maintain HOLD Quarterly orders are a potential catalyst for Advantests share price. We had previously envisioned higher orders for low-end smartphones in OctDec, but the picture is now less clear. Foundry production cuts may be a factor. We expect foundry production to recover in Oct-Dec and for orders from Taiwans OSAT to climb from Jan-Mar. Hence, our HOLD rating.

Oct-12 1,839 1,639 1,439 1,239 1,039 839 639 439 239 (JPY)
VALUATION
Lower TP to JPY1,150 (FY3/14E P/BV 1.5x), from JPY1,700 (2.0x) Back-end testers market growth potential looks lower than that of the front-end, where 3D-tech could boost demand. Advantest may post a loss again in FY3/14, reducing prospects of a rise in its P/BV to 3x. We see 2x P/BV seen in May-Jun 2013 as the upper limit and lower our target P/BV to 1.5x (1-2x mid-point), from 2.0x (1-3x mid-point), to derive our TP.
Advantest Corp
Rel to TOPIX Index
1 Month 3 Month 12 Month (12.8) (12.3) (32.5) (30.0) 28.1 (32.3)
October 2013 2,000 38.5 76 Mitsubishi UFJ Financial Group (13%) 1,839/846 43.4 ATE US 11.64 0.173
KEY CHART
Advantest: OP trend
(JPY b) 100 80 60 40 20 0 (20) (40) (60)
Mkt cap (USD m) 3m avg daily turnover (USD m) Free float (%) Major shareholder 12m high/low (JPY) 3m historic vol. (%) ADR ticker ADR closing price (USD; 9 Oct 2013) Issued shares (b)
3/90 3/91 3/92 3/93 3/94 3/95 3/96 3/97 3/98 3/99 3/00 3/01 3/02 3/03 3/04 3/05 3/06 3/07 3/08 3/09 3/10 3/11 3/12 3/13 3/14E 3/15E 3/16E
Sources: Company; BNP Paribas estimates
Yoshitsugu Yamamoto
10
11 OCTOBER 2013
CHANGE IN NUMBERS
COMPANY REPORT

BNPP Target Price (JPY) EPS 2014 (JPY) TARGET PRIOR TP CLOSE UP/DOWNSIDE JPY550 JPY550 JPY528 +4.2% Market Recs EPS 2015 (JPY) 550 24 40 Positive 8 Consensus 579 21 38 Neutral 7 % Diff (5.0) 14.3 5.3 Negative 1
DAINIPPON SCREEN
HOLD
KEY STOCK DATA

YE Mar (JPY b) Revenue Op profit Prior op profit Recurring profit Net profit EPS (JPY) P/E (x) Dividend yield (%) 2014E 216.5 8.6 7.9 7.6 5.6 24 22.4 0.6 11.0 1.5 21.8 6.5
Jan-13 Apr-13
Ready for industry reshuffle?

CHANGE
Tweaking estimates on growth in Jul-Sep SPE orders We raise our Jul-Sep SPE orders estimate to JPY37b after the recent uptick in foundry orders. We estimate JPY34b in Oct-Dec and JPY35b in Jan-Mar and have tweaked our earnings forecasts accordingly. We expect 1H and full year FY3/14 OP to beat guidance. We estimate 1H OP at JPY4b (guidance: JPY2.5b) and full-year OP at JPY8.6b (guidance: JPY6.5b).
2014C 211.0 6.5 5.5 4.0 17 31.1 0.6 Jul-13
2015E 217.5 13.1 13.2 12.1 9.6 40 13.1 1.9 7.8 1.3 12.7 10.3
2016E 193.0 5.1 4.3 4.1 2.5 11 50.1 0.9 13.8 1.3 7.5 2.6
CATALYST
Orders steady but CEO decision on industry realignment vital We expect foundries capex to remain high in 2014, but because y-y growth will be small, we do not expect on-going increases in quarterly orders. We expect quarterly SPE orders to hover around JPY35b. In view of the TEL-AMAT merger announcement, the DNS CEOs decision on how to respond to industry realignment will likely be more important.

Oct-12 660 610 560 510 460 410 360 310 260 210 (JPY)
Oct-13 53 43 33 23 13 3 (7) (17) (27) (37)
VALUATION
We maintain our target price at JPY550: HOLD Our JPY550 target price is based on a FY3/14E P/BV of 1.5x. This is the midpoint of their 1-2x P/BV range since 2010. On-going frontloading of foundry orders is an upside risk to our view. The main downside risk is that planned initiatives to improve earnings in 2H do not bear fruit.
Dainippon Screen
Rel to TOPIX Index
(%)
1 Month 3 Month 12 Month 7.1 7.6 (5.6) (3.0) 40.8 (19.6)
November 2013 1,288 20.0 83 Japan Trustee Services Bank (9%) 635/375 38.9 0.237
KEY CHART
SPE orders
(JPY b) 60 50 40 30 20 10 0
Mkt cap (USD m) 3m avg daily turnover (USD m) Free float (%) Major shareholder 12m high/low (JPY) 3m historic vol. (%) ADR ticker
1Q
2Q
3Q
4Q
1Q
2Q
3Q
4Q
1Q
2Q
3Q
4Q
1Q
2Q
3Q
4Q
2QE
3QE
1QA
4QE
ADR closing price (USD) Issued shares (b)
FY3/10
FY3/11
FY3/12
FY3/13
FY3/14
Source: Company; BNP Paribas estimates
Yoshitsugu Yamamoto
11
11 OCTOBER 2013
CHANGE IN NUMBERS
COMPANY REPORT

BNPP Target Price (JPY) EPS 2014 (JPY) JPY2,300 JPY2,300 JPY1,716 +34.0% Market Recs EPS 2015 (JPY) 2,300 122 144 Positive 11 Consensus 2,111 132 149 Neutral 8 % Diff 9.0 (7.6) (3.4) Negative 2
JSR CORP
JAPAN / TECHNOLOGY HARDWARE & EQUIPMENT
BUY
TARGET PRIOR TP CLOSE UP/DOWNSIDE
KEY STOCK DATA

YE Mar (JPY b) Revenue Op profit Prior op profit Recurring profit Net profit EPS (JPY) P/E (x) Dividend yield (%) 2014E 390.0 40.0 45.5 44.0 28.6 122 14.1 2.2 6.5 1.2 (3.1) 8.7
Jan-13 Apr-13
Emergence of catalysts
OUTLOOK
FY3/15 earnings drivers to emerge from 4QFY3/14 Our positive view on JSR is intact, but the share price may trade lower in the near term as investors factor in weak conditions for tech materials prior to the emergence of catalysts. JSR could lower its FY3/14 guidance. But, we believe FY3/15 earnings drivers (tyre materials, semi-materials for TMSCs 20nm) emerging from 4QFY3/14 will drive up JSRs share price.
2014C 415.0 43.0 47.0 31.5 133 12.9 2.2 Jul-13
2015E 413.0 47.0 53.0 51.0 33.2 144 11.9 2.4 5.7 1.1 (4.0) 9.6
2016E 429.0 53.0 57.0 57.0 37.1 163 10.5 2.9 5.1 1.1 (5.8) 10.1
Oct-13 33 23 13 3 (7) (17)
ESTIMATE CHANGES
Bullish medium-term view intact, though tech materials weak now While JSRs petrochemical business is healthy, momentum is weak for fine chemicals and other business. We expect 1HFY3/14 to meet guidance but see a chance of shortfalls in FY3/14. We had expected semiconductor and LCD to drive JSRs 2H results, but markets are sluggish. Our OP estimates: 1H JPY19b, FY3/14 JPY40b vs JSRs guidance of JPY18.5b and JPY43b.

Oct-12 2,477 2,277 2,077 1,877 1,677 1,477 1,277 1,077 877 677 (JPY) JSR Corp
VALUATION
The stock has traded in the 10-16x P/E range since 2010 We lower our estimates but keep our TP of JPY2,300, using unchanged P/E of 16x but on FY3/15E EPS (previously FY3/14E). We expect the shares to trade at the top end of their P/E range, driven by emerging catalysts towards FY3/15. Risks: petrochemicals slump on lower tyre demand, prolonged LCD inventory adjustment, delay in TSMCs mass production.
Rel to TOPIX Index
(%)
October 2013 4,154 19.0 77 Bridgestone Corp (16%) 2,329/1,235 36.0 0.24
KEY CHART
Share price and quarterly OP trend
(JPY) 3,500 3,000 2,500 2,000 1,500 1,000 500 0 Share price (LHS) Quarterly OP (RHS) (JPY b) 16 14 12 10 8 6 4 2
Mkt cap (USD m) 3m avg daily turnover (USD m) Free float (%) Major shareholder 12m high/low (JPY) 3m historic vol. (%) ADR ticker ADR closing price (USD) Issued shares (b)
Oct-06
Oct-07
Oct-08
Oct-09
Oct-10
Oct-11
Oct-12
Apr-06
Apr-07
Apr-08
Apr-09
Apr-10
Apr-11
Apr-12
Apr-13
Oct-13
Apr-14E
Oct-14E
Sources: Bloomberg; BNP Paribas estimates
Yoshitsugu Yamamoto
12
11 OCTOBER 2013
CHANGE IN NUMBERS
COMPANY REPORT

BNPP Target Price (JPY) EPS 2014 (JPY) JPY8,000 JPY8,000 JPY5,680 +40.8% Market Recs EPS 2015 (JPY) 8,000 307 327 Positive 15 Consensus 7,091 306 339 Neutral 8 % Diff 12.8 0.3 (3.5) Negative 1
SHIN-ETSU CHEMICAL
JAPAN / TECHNOLOGY HARDWARE & EQUIPMENT
BUY
TARGET PRIOR TP CLOSE UP/DOWNSIDE
KEY STOCK DATA

YE Mar (JPY b) Revenue 2014E 1,089.0 192.0 195.0 202.0 130.3 307 18.5 1.8 7.3 1.4 (17.5) 7.6
Jan-13 Apr-13
Modest slowdown in 2H
CHANGE
PVC upbeat, limited wafer downside, tweaking estimates We continue to expect Shin-Etsu to report 1H OP of JPY97b, exceeding guidance (JPY88b). The PVC business is upbeat, and wafers have not significantly eroded yet. However, we expect lower h-h wafer profit in 2H, due to the SK Hynix (000660 KS) fire impact and other factors. Revised OP estimate: FY3/14 JPY192b (from JPY195b), FY3/15 JPY205b (from JPY213b).
2014C 1,060.0 170.0 180.0 110.0 259 21.9 1.8 Jul-13
2015E 1,135.0 205.0 213.0 215.0 138.8 327 17.4 2.1 6.5 1.3 (19.0) 7.7
2016E 1,167.0 220.0 229.0 230.0 148.7 350 16.2 2.1 5.9 1.3 (19.1) 7.8
Oct-13 25 15 5 (5) (15) (25)
Op profit Prior op profit Recurring profit Net profit EPS (JPY) P/E (x) Dividend yield (%)
CATALYST
PVC and wafers are OP variable factors US Shintech is performing well, and has sold available output through Oct (Shin-Etsu books Shintechs Apr-Jun results in its July-Sept statement). We therefore expect stronger 1H results than at SUMCO (3436 JP), also on differences in customer composition. 300mm business: high memory sales ratio sustains full-production, low exposure to TSMC (2330 TT).

Oct-12 7,320 6,320 5,320
VALUATION
Maintaining our JPY8,000 target price and BUY rating We maintain our JPY8,000 target price, despite slight revisions to our estimates, due to shifting the base year to FY3/15 from FY3/14, with an unchanged 25x P/E multiple. Primary risks are a drop in PVC prices and wafer inventory adjustments.
4,320 3,320 2,320 1,320 (JPY) Shin-Etsu Chemical Rel to TOPIX Index
(%)
October 2013 24,795 93.1 96 Japan Trustee Services Bank (9%) 7,250/4,315 32.3 SHECY US 14.66 0.42
KEY CHART
Segment OP
(JPYb ) 60 40 20 0 PVC/Chlor-Alkali Semi silicon Elec. & functional materials Silicones Specialty chemicals Others
Mkt cap (USD m) 3m avg daily turnover (USD m) Free float (%) Major shareholder 12m high/low (JPY) 3m historic vol. (%) ADR ticker
6/09 9/09 12/09 3/10 6/10 9/10 12/10 3/11 6/11 9/11 12/11 3/12 6/12 9/12 12/12 3/13 6/13 9/13E 12/13E 3/14E 6/14E 9/14E 12/14E 3/15E
ADR closing price (USD; 9 Oct 2013) Issued shares (b)
Sources: Shin-Etsu Chemical; BNP Paribas estimates
Yoshitsugu Yamamoto
13
11 OCTOBER 2013
CHANGE IN NUMBERS
COMPANY REPORT

BNPP Target Price (JPY) EPS 2014 (JPY) TARGET PRIOR TP CLOSE UP/DOWNSIDE JPY1,100.00 JPY1,100.00 JPY1,336.00 -17.7% Market Recs EPS 2015 (JPY) 1,100.00 120 120 Positive 4 Consensus 1,305.56 119 132 Neutral 10 % Diff (15.7) 0.1 (9.7) Negative 1
SUMITOMO METAL MINING

JAPAN / METALS & MINING
REDUCE
KEY STOCK DATA

YE Mar (JPY b) Revenue Op profit Prior op profit Recurring profit Net profit EPS (JPY) P/E (x) Dividend yield (%) EV/EBITDA (x) Price/book (x) Net debt/equity (%) ROE (%)
Oct-12 1,754 1,554 1,354 1,154 954 754 554 (JPY) Sumitomo Metal Mining Rel to TOPIX Index Jan-13
Risk of underperformance
CHANGE
Maintain JPY1,100 TP, REDUCE rating We lift our forecasts ahead of 8 Nov results. Mgmt. is likely to cut FY guidance with 1H results, as it left FY unchanged when cutting 1H targets at 1Q. We maintain our REDUCE rating. Non-ferrous prices are stabilizing with the lull in USD appreciation; we maintain our view that prices will weaken into 2014. We believe SMM remains overvalued.
2014E 843.0 72.0 75.0 95.0 66.0 120 11.2 2.4 6.8 0.9 8.1 8.2
Apr-13
2015E 862.0 80.0 72.0 95.0 66.0 120 11.2 2.4 6.6 0.8 8.9 7.7
Jul-13
2016E 871.0 85.0 77.0 100.0 69.0 125 10.7 2.4 6.5 0.8 9.3 7.6
Oct-13 53 43 33 23 13 3 (7) (17) (27) (37) (%)
CATALYST
Likely to cut FY guidance even if 1H outperforms 1H RP is likely to recover to JPY55b versus guidance of JPY47b as prices were higher in Aug-Sep. We revise up our price assumption for copper from USD6,800/t to USD7,200/t, but maintain nickel at USD6.2/lb, gold at USD1,300/oz, JPY100/USD and increase our FY3/14 RP estimate from JPY90b to JPY95b, this is below the guidance target of JPY106b.
VALUATION
JPY1,100 TP is FY3/14E 9x, BPS 0.7x We lower our target P/E from 10x to 9x, P/B is unchanged. Non-ferrous prices rose in September but supply-demand is unlikely to improve and prices are unlikely to rise from here, so we do not think expectations of profit expansion will increase. The shares, at a P/E of over 10x, have more downside risk than upside potential, in our view.
Share price performance Absolute (%) Relative to country (%) Next results Mkt cap (USD m)
1 Month 3 Month 12 Month (2.8) (2.3) 11.0 13.5 27.2 (33.1)
KEY CHART
Nickel and copper prices remain lacklustre
(USD/m tonnes) 50,000 40,000 30,000 20,000 10,000 0 2000 2002 2004 2006 2008 2010 2012 1,000 0 LME Nickel spot SMM (JPY) 4,000 3,000 2,000
November 2013 7,579 66.8 90 Japan Trustee (6%) 1,607.00/1,013.00 40.6 552.2
3m avg daily turnover (USD m) Free float (%) Major shareholder 12m high/low (JPY) 3m historic vol. (%) ADR ticker ADR closing price (USD) Issued shares (m)
Sources: Bloomberg; BNP Paribas
Toshiyuki Johno
toshiyuki.johno@japan.bnpparibas.com +81 3 6377 2236
14
11 OCTOBER 2013
PREPARED BY THE INTERNATIONAL INVESTMENT ADVISORY TEAM OF FINANSIA SYRUS SECURITIES PUBLIC COMPANY LIMITED, A NONUS BROKER-DEALER. CO-DISTRIBUTED WITH BNP PARIBAS. PLEASE REFER TO FIRST PARAGRAPH OF GENERAL DISCLAIMER FOR DETAIL.
11 OCTOBER 2013
EARNINGS/ PREVIEW THAILAND CONSTRUCTION 8THAILAND
SIAM CEMENT
TARGET PRICE
SCC TB
THB480.00 THB432.00 +11.1% THB480.00 UNCHANGED EPS 2013 (%) EPS 2014 (%) 0.3 (6.7) NEUTRAL NEGATIVE 1 4 HOW WE DIFFER FROM CONSENSUS TARGET PRICE (%) (7.7) MARKET RECS POSITIVE 25
BUY
UNCHANGED
3Q13 earnings preview: Still solid

Booking a non-recurring gain of THB1.5b in 3Q13 We have a BUY call on SCC with a DCF-based TP of THB480. We estimate 3Q13 net profit rose 42% y-y to THB9.1b (BBG consensus: THB9.2b) driven by a THB1.5b non-recurring gain from the fair value adjustment of investments in Siam Sanitary Ware (not listed) and Siam Fitting (not listed). We maintain our full year forecasts We estimate 9M13 recurring net profit of THB26.3b to account for 76% of our full year forecast of THB34.6b (BBG consensus: THB34.5b). We expect 4Q13 net profit to remain solid due dividend income from investments especially in automotive business, which are generally booked in the second and fourth quarters. Recurring profit to drop 23% q-q, but rise 18.6% y-y We estimate 3Q13 recurring net profit fell 23% q-q to THB7.6b due to seasonality and soft domestic demand in its cement and paper businesses caused by floods and slow exports. However, this would be a 18.6% y-y increase because of improved earnings contribution from the chemical business. Chemical earnings to fall 10% q-q, but rise 30% y-y We expect 3Q13 chemical business earnings fell 10% q-q, because of rising ethylene and propylene costs (due to PTTs GSP#5 accident) and slightly declining product spreads. However, this would be a 30% y-y increase as spreads have improved significantly y-y.
KEY STOCK DATA

YE Dec (THB m) Revenue Rec. net profit Recurring EPS (THB) Prior rec. EPS (THB) Chg. In EPS est. (%) EPS growth (%) Recurring P/E (x) Dividend yield (%) EV/EBITDA (x) Price/book (x) Net debt/Equity (%) ROE (%)
Oct-12 549
499 20 449 399 349 (THB) 10 0 (%)
2012A 407,601 23,580 19.65 19.65 0.0 (13.2) 22.0 2.5 15.5 3.6 88.6 16.6
Jan-13 Apr-13
2013E 409,204 34,574 28.81 28.81 0.0 46.6 15.0 3.9 10.9 3.2 92.8 22.5
Jul-13
2014E 454,795 37,296 31.08 31.08 0.0 7.9 13.9 4.2 10.7 2.8 96.1 21.4
2015E 467,784 38,804 32.34 32.34 0.0 4.0 13.4 4.4 10.5 2.6 97.3 20.1
Oct-13
30
Siam Cement
Rel to MSCI Thailand
Share price performance Absolute (%) Relative to country (%) Next results Mkt cap (USD m) 3m avg daily turnover (USD m)
1 Month 2.4 1.2
3 Month 0.9 (1.2)
12 Month 22.4 16.6
October 2013 16,486 20.7 68 Crown Property of Bureau (30%) 500.00/349.00 36.0 1,200
Results announcement: 30 October 2013

Key points to watch Bloomberg spot HDPE and PP prices in 3Q13 rose slightly q-q, but spreads fell slightly. Ethylene and propylene costs have risen due to PTTs GSP#5 accident. We expect 3Q13 cement sales volume fell q-q due to seasonality, while ex-factory prices were flat or up slightly q-q to THB1,8501,900/tonne. Impact/Action We expect SCC booked little inventory gain in 3Q13, but that its chemical business recurring earnings fell 10% q-q . However, that would be a 30% y-y rise as spreads have improved significantly y-y. We expect cement earnings to have fallen a slight 4% q-q.
Free float (%) Major shareholder 12m high/low (THB) 3m historic vol. (%) ADR ticker ADR closing price (USD) Issued shares (m)
Sources: Bloomberg consensus; BNP Paribas/FSS estimates
Sources: Bloomberg consensus; BNP Paribas/FSS estimates
Somkij Oranchatchawan
somkij.ora@fssia.com +66 2 611 3535
15
11 OCTOBER 2013
EARNINGS PREVIEW / CAPITAL INDIA GOODS 7INDIA
BHARAT HEAVY ELECTRICALS

TARGET PRICE INR95.00 INR147.65 -35.7% INR95.00 UNCHANGED EPS 2014 (%) EPS 2015 (%)
BHEL IN
MARKET RECS POSITIVE NEUTRAL NEGATIVE 6 15 37 (29.2) (21.5) (33.7)
HOW WE DIFFER FROM CONSENSUS TARGET PRICE (%)
REDUCE
UNCHANGED
Expecting another weak quarter

We expect another weak quarter We expect BHELs 2Q results to remain weak as the execution issues which surfaced in 1Q due to stalled projects have continued, with the exception of Bajaj Hindusthans Lalithpur project where BHEL has resumed work. We estimate 2Q revenues to fall 12.3% y-y but to rise 43.5% q-q as 1Q is typically a lean quarter. We are below consensus on lower margins While we are 5% above the Bloomberg consensus on sales, our recurring EPS estimate of INR2.89 is 22% below consensus as we assume lower margins due to sluggish execution and higher employee expenses related to the BHPV amalgamation. We estimate a one-time INR1.08/share charge related to the amalgamation. Zero power segment orders in 2Q Despite continued weak orders in 2Q, the stock rebounded on tendering for setting up two UMPPs worth INR400b.While developers may be selected in 4QFY14, equipment orders wont come before 3QFY15, as land acquisition for the projects will take time. We reiterate our REDUCE rating and INR95 TP We reiterate our REDUCE on BHEL given our concerns of stretched working capital, potential bad debt and potential order cancellations. Our DCF-based TP of INR95 is based on free cash flows for the next 10 years discounted at a cost of equity of 15.1%. We assume a terminal growth rate of 3%.
KEY STOCK DATA

YE Mar (INR m) Revenue Rec. net profit Recurring EPS (INR) Prior rec. EPS (INR) Chg. In EPS est. (%) EPS growth (%) Recurring P/E (x) Dividend yield (%) EV/EBITDA (x) Price/book (x) Net debt/Equity (%) ROE (%)
Oct-12 275 225 175 125 75 (INR) Jan-13
2013A 476,177 66,147 27.03 27.03 0.0 (6.0) 5.5 4.6 2.8 1.2 (20.7) 23.7
Apr-13
2014E 366,412 35,987 14.70 14.70 0.0 (45.6) 10.0 3.2 5.6 1.1 (2.7) 11.4
Jul-13
2015E 300,638 24,064 9.83 9.83 0.0 (33.1) 15.0 2.3 7.4 1.1 (12.2) 7.2
2016E 306,446 18,618 7.61 7.61 0.0 (22.6) 19.4 1.8 8.3 1.0 (9.0) 5.4
Oct-13 8 (12) (32) (52) (72) (%)
Bharat Heavy Electricals
Rel to MSCI India
Share price performance Absolute (%) Relative to country (%) Next results Mkt cap (USD m) 3m avg daily turnover (USD m)
1 Month 3.3 1.4
3 Month (19.8) (24.1)
12 Month (39.8) (48.0)
Novermber 2013 5,835 21.8 32 Government of India (68%) 251.65/101.35 71.0 2,448
Results announcement: date TBC

Key points to watch Impact/action
Order in-take/order pipeline There were no major orders in 1HFY14. We would look for management comments on the new UMPP tendering and SDB norms. Outstanding receivables Liquidated damages BHPV Amalgamation Update on the recent legal action taken by the company against few customers to recover outstanding dues. Execution remains poor. We would look for provisions made for liquidated damages on delays in executing orders. We are interested in how confident management is about a turnaround of BHPV by FY16.
Free float (%) Major shareholder 12m high/low (INR) 3m historic vol. (%) ADR ticker ADR closing price (USD) Issued shares (m)
Source: BNP Paribas estimates
Girish Nair
girish.nair@asia.bnpparibas.com +91 22 33704380
Shailendra Kumar Jain

shailendrakumar.jain@asia.bnpparibas.com +91 22 33704381
16
11 OCTOBER 2013
EARNINGS PREVIEW / CAPITAL INDIA GOODS 6INDIA
IRB INFRASTRUCTURE
TARGET PRICE INR152.00 INR79.50 +91.2% INR152.00 UNCHANGED
IRB IN
HOW WE DIFFER FROM CONSENSUS TARGET PRICE (%) EPS 2014 (%) EPS 2015 (%) 11.8 (14.7) (16.1) MARKET RECS POSITIVE NEUTRAL NEGATIVE 31 3 1
BUY
UNCHANGED
Uneventful 2Q, but catalysts ahead

2QFY14 results likely to be uneventful Seasonally the weakest period for both toll and construction business, 2QFY14 is unlikely to have witnessed material growth. We forecast 18% top line growth brought about by the addition of new roads, but a 3% earnings decline on additional fixed costs (depreciation + interest). Looking for details on toll rate hikes, refinancing options During 2QFY14, a couple of projects underwent a toll-rate hike that we assume was around 6-8%. We expect more details on IRBs refinancing and take-out financing options that IRB was looking to explore at the end of 1QFY14. Catalysts: Restructuring of premium and resumption of awards We see two potential positive catalysts in the next two quarters restructuring of premium by NHAI and resumption of award activity. Recently, the CCEA has also in-principle approved the proposal for restructuring of premium by NHAI for certain projects. A couple of IRBs projects could benefit from this development. We maintain our TP of INR152 We make no changes to our target price; BOT contributes INR113/share and the construction business INR39. Companyspecific downside risks include lower-than-expected traffic or toll increases, slower execution, higher-than-expected capex, continued negative publicity, and an adverse outcome from the CBI investigation. We adjust our FY14/15 estimates by +7%/-3% after incorporation of 1QFY14 toll collections.
KEY STOCK DATA

YE Mar (INR m) Revenue Rec. net profit Recurring EPS (INR) Prior rec. EPS (INR) Chg. In EPS est. (%) EPS growth (%) Recurring P/E (x) Dividend yield (%) EV/EBITDA (x) Price/book (x) Net debt/Equity (%) ROE (%)
Oct-12 Jan-13
2013A 38,174 5,567 16.75 16.75 12.2 4.7 4.4 5.1 0.8 217.1 18.2
Apr-13
2014E 40,385 4,601 13.85 12.95 6.9 (17.4) 5.7 4.4 5.7 0.7 232.1 13.4
Jul-13
2015E 44,267 4,448 13.39 13.85 (3.3) (3.3) 5.9 4.4 5.9 0.7 250.6 11.8
2016E 43,067 4,410 13.27 N/A (0.9) 6.0 6.3 5.2 0.6 236.5 10.8
Oct-13 (2)
139 (22) 89 (42) (62) 39 (INR) (82) (%)
IRB Infrastructure
Rel to MSCI India
Share price performance Absolute (%) Relative to country (%) Next results Mkt cap (USD m) 3m avg daily turnover (USD m) Free float (%)
1 Month 16.7 14.9
3 Month (16.7) (21.0)
12 Month (46.6) (54.8)
November 2013 427 3.6 40 Promoter group (63%) 155.70/54.35 83.7 332
Result announcement: November 2013

Key points to watch Expecting 13% increase in net toll revenue y-y Expecting 13% increase in construction revenue y-y Expecting 30% construction EBITDA margin Impact/Action A 5% change in toll revenue growth impacts consolidated 2Q profits by 7% A 5% change in construction revenue growth impacts consolidated 2Q profits by 6.5% A 100bp change in margin impacts consolidated Q2 profits by 4.4%
Major shareholder 12m high/low (INR) 3m historic vol. (%) ADR ticker ADR closing price (USD) Issued shares (m)
Source: BNP Paribas estimates
Vishal Sharma, CFA

vishal.sharma@asia.bnpparibas.com +91 22 33704377
17
SPOTLIGHT ON ASIA
11 OCTOBER 2013
Disclaimers and Disclosures

APPENDIX DISCLAIMERS AND DISCLOSURES APPLICABLE TO NON-US BROKER-DEALER(S) (BNP Paribas Securities (Asia) Ltd)
The analyst(s) or strategist(s) herein each referred to as analyst(s) named in this report certify(ies) that (i) all views expressed in this report accurately reflect the personal view of the analyst(s) with regard to any and all of the subject securities, companies or issuers mentioned in this report; and (ii) no part of the compensation of the analyst(s) was, is, or will be, directly or indirectly, related to the specific recommendations or views expressed by the research analyst herein. Analysts mentioned in this disclaimer are employed by a non-US affiliate of BNP Paribas Securities Corp., and are not registered/ qualified pursuant to NYSE and/or FINRA regulations.
IMPORTANT DISCLOSURES REQUIRED IN THE UNITED STATES BY FINRA RULES AND OTHER JURISDICTIONS
"BNP Paribas is the marketing name for the global banking and markets business of BNP Paribas Group. No portion of this report was prepared by BNP Paribas Securities Corp (US) personnel, and it is considered Third-Party Affiliate research under NASD Rule 2711. The following disclosures relate to relationships between companies covered in this research report and the BNP entity identified on the cover of this report, BNP Securities Corp., and other entities within the BNP Paribas Group (collectively, "BNP Paribas"). The disclosure column in the following table lists the important disclosures applicable to each company that has been rated and/or recommended in this report:
Company N/A Ticker N/A Disclosure (as applicable) N/A
BNP Paribas represents that: 1. Within the past year, it has managed or co-managed a public offering for this company, for which it received fees. 2. It had an investment banking relationship with this company in the last 12 months. 3. It received compensation for investment banking services from this company in the last 12 months. 4. It expects to receive or intends to seek compensation for investment banking services from the subject company/ies in the next 3 months. 5. It beneficially owns 1% or more of any class of common equity securities of the subject company. 6. It makes a market in securities in respect of this company. 7. The analyst(s) or an individual who assisted in the preparation of this report (or a member of his/her household) has a financial interest position in securities issued by this company. The financial interest is in the common stock of the subject company, unless otherwise noted. 8. The analyst (or a member of his/her household) is an officer, director, or advisory board member of this company or has received compensation from the company.
IMPORTANT DISCLOSURES REQUIRED IN KOREA

The disclosure column in the following table lists the important disclosures applicable to each Korea listed company that has been rated and/or recommended in this report:
1. 2. 3. 4. 5. 6. 7. 8. 9.
The performance of obligations of the Company is directly or indirectly guaranteed by BNP Paribas Securities Korea Co. Ltd (BNPPSK) by means of payment guarantees, endorsements, and provision of collaterals and/or taking over the obligations. BNPPSK owns 1/100 or more of the total outstanding shares issued by the Company. The Company is an affiliate of BNPPSK as prescribed by Item 3, Article 2 of the Monopoly Regulation and Fair Trade Act. BNPPSK is the financial advisory agent of the Company for the Merger and Acquisition transaction or of the Target Company whereby the size of the transaction does not exceed 5/100 of the total asset of the Company or the total number of outstanding shares. BNPPSK has taken financial advisory service regarding listing to the Company within the past 1 year. With regards to the tender offer initiated by the Company based on Item 2, Article 133 of the Financial Investment Services and Capital Market Act, BNPPSK acts in the capacity of the agent for the tender offer designated either by the Company or by the target company, provided that this provision shall apply only where tender offer has not expired. the listed company which issued the stocks in question in case where 40 days has not passed since the new shares were listed from the date of entering into arrangement for public offering or underwriting-related agreement for issuance of stocks The Company is recognized as having considerable interests with BNPPSK. The analyst or his/her spouse owns (including delivery claims of marketable securities based on legal regulations and trading and misc. contracts) the following securities or rights (hereinafter referred to as Securities, etc. in this Article) regardless of whose name is used in the trading. 1) Stocks, bond with stock certificate, and certificate of pre-emptive rights issued by the Company whose securities dealings are being solicited. 2) Stock options of the Company whose securities dealings are being solicited. 3) Individual stock future, stock option, and warrants that use the stocks specified in Item 1) as underlying.
18
BNP PARIBAS
SPOTLIGHT ON ASIA GENERAL DISCLAIMER
11 OCTOBER 2013
This report was produced by BNP Paribas Securities (Asia) Ltd, member company(ies) of the BNP Paribas Group. This report is for the use of intended recipients only and may not be reproduced (in whole or in part) or delivered or transmitted to any other person without our prior written consent. By accepting this report, the recipient agrees to be bound by the terms and limitations set forth herein. This report does not constitute a personal recommendation or take into account the particular investment objectives, financial situations, or needs of individual clients. Customers are advised to use the information contained herein as just one of many inputs and considerations prior to engaging in any trading activity. This report does not constitute a prospectus or other offering document or an offer or solicitation to buy or sell any securities or other investments. This report is not intended to provide the sole basis of any evaluation of the subject securities and companies mentioned in this report. Information and opinions contained in this report are published for reference of the recipients and are not to be relied upon as authoritative or without the recipients own independent verification, or taken in substitution for the exercise of judgment by the recipient. Additionally, the products mentioned in this report may not be available for sale in certain jurisdictions. As an investment bank with a wide range of activities, BNP Paribas may face conflicts of interest, which are resolved under applicable legal provisions and internal guidelines. You should be aware, however, that BNP Paribas may engage in transactions in a manner inconsistent with the views expressed in this document, either for its own account or for the account of its clients. Australia: This report is being distributed in Australia by BNP Paribas Sydney Branch, registered in Australia as ABN 23 000 000 117 at 60 Castlereagh Street Sydney NSW 2000. BNP Paribas Sydney Branch is licensed under the Banking Act 1959 and the holder of Australian Financial Services Licence no. 238043 and therefore subject to regulation by the Australian Securities & Investments Commission in relation to delivery of financial services. By accepting this document you agree to be bound by the foregoing limitations, and acknowledge that information and opinions in this document relate to financial products or financial services which are delivered solely to wholesale clients (in terms of the Corporations Act 2001, sections 761G and 761GA; Corporations Regulations 2001, division 2, reg. 7.1.18 & 7.1.19) and/or professional investors (as defined in section 9 of the Corporations Act 2001). Canada: The information contained herein is not, and under no circumstances is to be construed as, a prospectus, an advertisement, a public offering, an offer to sell securities described herein, or solicitation of an offer to buy securities described herein, in Canada or any province or territory thereof. Any offer or sale of the securities described herein in Canada will be made only under an exemption from the requirements to file a prospectus with the relevant Canadian securities regulators and only by a dealer properly registered under applicable securities laws or, alternatively, pursuant to an exemption from the dealer registration requirement in the relevant province or territory of Canada in which such offer or sale is made. The information contained herein is under no circumstances to be construed as investment advice in any province or territory of Canada and is not tailored to the needs of the recipient. To the extent that the information contained herein references securities of an issuer incorporated, formed or created under the laws of Canada or a province or territory of Canada, any trades in such securities must be conducted through a dealer registered in Canada. No securities commission or similar regulatory authority in Canada has reviewed or in any way passed judgment upon these materials, the information contained herein or the merits of the securities described herein, and any representation to the contrary is an offence. Hong Kong: This report is prepared for professional investors and is being distributed in Hong Kong by BNP Paribas Securities (Asia) Limited to persons whose business involves the acquisition, disposal or holding of securities, whether as principal or agent. BNP Paribas Securities (Asia) Limited, a subsidiary of BNP Paribas, is regulated by the Securities and Futures Commission for the conduct of dealing in securities, advising on securities, providing automated trading services, dealing in futures contacts and advising on corporate finance. For professional investors in Hong Kong, please contact BNP Paribas Securities (Asia) Limited for all matters and queries relating to this report. India: In India, this document is being distributed by BNP Paribas Securities India Pvt. Ltd. ("BNPPSIPL"), having its registered office at 5th floor, BNP Paribas House, 1 North Avenue, Maker Maxity, Bandra Kurla Complex, Bandra (East), Mumbai 400 051 (Tel. no. +91 22 3370 4000 / 6196 4000). BNPPSIPL is registered with the Securities and Exchange Board of India (SEBI) as a stockbroker in the Equities and the Futures & Options segments of National Stock Exchange of India Ltd. and Bombay Stock Exchange Ltd. (SEBI regn. nos. INB/INF231474835, INB/INF011474831). Indonesia: This report is being distributed by PT BNP Paribas Securities Indonesia and is delivered by licensed employee(s) to its clients. PT BNP Paribas Securities Indonesia, having its registered office at Menara BCA, 35th Floor, Grand Indonesia, Jl. M.H.Thamrin No.1, Jakarta, 10310, Indonesia, is a fully subsidiaries company of BNP Paribas SA and is licensed under Capital Market Law No. 8 of 1995 and the holder of broker-dealer and underwriter licenses issued by the Capital Market and Financial Institutions Supervisory Agency (BAPEPAM-LK). PT BNP Paribas Securities Indonesia is also a member of Indonesia Stock Exchange. Neither this research publication nor any copy hereof may be distributed in Indonesia or to any Indonesian citizens except in compliance with applicable Indonesian capital market laws and regulations. This research publication is not an offer of securities in Indonesia. Some of the securities referred to in this research publication have not been registered with the Capital Market and Financial Institutions Supervisory Agency (BAPEPAM-LK) pursuant to relevant capital market laws and regulations, and may not be offered or sold within the territory of the Republic of Indonesia or to Indonesian citizens through a public offering or in circumstance which constitute an offer within the meaning of Indonesian capital market laws and regulations. Japan: This report is being distributed to Japanese based firms by BNP Paribas Securities (Japan) Limited or by a subsidiary or affiliate of BNP Paribas not registered as a financial instruments firm in Japan, to certain financial institutions defined by article 17-3, item 1 of the Financial Instruments and Exchange Law Enforcement Order. BNP Paribas Securities (Japan) Limited is a financial instruments firm registered according to the Financial Instruments and Exchange Law of Japan and a member of the Japan Securities Dealers Association, the Financial Futures Association of Japan and the Type II Financial Instruments Firms Association. BNP Paribas Securities (Japan) Limited accepts responsibility for the content of a report prepared by another non-Japan affiliate only when distributed to Japanese based firms by BNP Paribas Securities (Japan) Limited. Some of the foreign securities stated on this report are not disclosed according to the Financial Instruments and Exchange Law of Japan. Malaysia: This report is issued and distributed by BNP Paribas Capital (Malaysia) Sdn Bhd. The views and opinions in this research report are our own as of the date hereof and are subject to change. BNP Paribas Capital (Malaysia) Sdn Bhd has no obligation to update its opinion or the information in this research report. This publication is strictly confidential and is for private circulation only to clients of BNP Paribas Capital (Malaysia) Sdn Bhd. This publication is being provided to you strictly on the basis that it will remain confidential. No part of this material may be (i) copied, photocopied, duplicated, stored or reproduced in any form by any means or (ii) redistributed or passed on, directly or indirectly, to any other person in whole or in part, for any purpose without the prior written consent of BNP Paribas Capital (Malaysia) Sdn Bhd. Philippines: This report is being distributed in the Philippines by BNP Paribas Manila Branch, an Offshore Banking Unit (OBU) of BNP Paribas whose head office is in Paris, France. BNP Paribas Manila OBU is registered as an offshore banking unit under Presidential Decree No. 1034 (PD 1034), and regulated by the Bangko Sentral ng Pilipinas. This report is being distributed in the Philippines to qualified clients of OBUs as allowed under PD 1034, and is qualified in its entirety to the products and services allowed under PD 1034. Singapore: This report is distributed in Singapore by BNP Paribas Securities (Singapore) Pte Ltd ("BNPPSSL") and may be distributed in Singapore only to an Accredited or Institutional Investor, each as defined under the Financial Advisers Regulations ("FAR") and the Securities and Futures Act (Chapter 289) of Singapore, as amended from time to time. In relation to the distribution to such categories of investors, BNPPSSL and its representatives are exempted under Regulation 35 of the FAR from the requirements in Section 36 of the Financial Advisers Act of Singapore, regarding the disclosure of certain interests in, or certain interests in the acquisition or disposal of, securities referred to in this report. For Institutional and Accredited Investors in Singapore, please contact BNP Paribas Securities (Singapore) Ptd Ltd for all matters and queries relating to this report. South Africa: In South Africa, BNP Paribas Cadiz Securities (Pty) Ltd and BNP Paribas Cadiz Stock Broking (Pty) Ltd (hereinafter referred to as BNPP Cadiz) are licensed members of Johannesburg Stock Exchange and are authorised Financial Services Providers and subject to regulation by the Financial Services Board. BNPP Cadiz does not expressly or by implication represent, recommend or propose that the financial products referred to in this report are appropriate to the particular investment objectives, financial situation or particular needs of the recipient.
19
BNP PARIBAS
SPOTLIGHT ON ASIA
11 OCTOBER 2013
Switzerland: This report is intended solely for customers who are Qualified Investors as defined in article 10 paragraphs 3 and 4 of the Swiss Federal Act on Collective Investment Schemes of 23 June 2006 (CISA) and the relevant provisions of the Swiss Federal Ordinance on Collective Investment Schemes of 22 November 2006 (CISO). Qualified Investors includes, among others, regulated financial intermediaries such as banks, securities dealers, fund management companies and asset managers of collective investment schemes, regulated insurance companies as well as pension funds and companies with professional treasury operations. This document may not be suitable for customers who are not Qualified Investors and should only be used and passed on to Qualified Investors. For specification purposes, a Swiss Corporate Customer is a Client which is a corporate entity, incorporated and existing under the laws of Switzerland and which qualifies as Qualified Investor as defined above." BNP Paribas (Suisse) SA is authorised as bank and as securities dealer by the Swiss Federal Market Supervisory Authority FINMA. BNP Paribas (Suisse) SA is registered at the Geneva commercial register under No. CH-270-3000542-1. BNP Paribas (Suisse) SA is incorporated in Switzerland with limited liability. Registered Office: 2 place de Hollande, CH-1204 Geneva. Taiwan: Information on securities that trade in Taiwan is distributed by BNP Paribas Securities (Taiwan) Co., Ltd. Such information is for your reference only. The reader should independently evaluate the investment risks and is solely responsible for their investment decision. Information on securities that do not trade in Taiwan is for informational purposes only and is not to be construed as a recommendation or a solicitation to trade in such securities. BNP Paribas Securities (Taiwan) Co., Ltd. may not execute transactions for clients in these securities. This publication may not be distributed to the public media or quoted or used by the public media without the express written consent of BNP Paribas. Thailand: Research relating to Thailand and Thailand based issuers is produced pursuant to an arrangement between BNP PARIBAS (BNPP) and Finansia Syrus Securities Public Company Limited (FSS). The International Investment Advisory Team at FSS prepares and distributes research under the brand name BNP PARIBAS/FSS. FSS is not an affiliate of BNPP. FSS also publishes a different research product under the brand name FINANSIA SYRUS, which is prepared by research analysts who are not part of the International Investment Advisory Team and who may cover the same securities, issuers, or industries that are the subject of this report. The ratings, recommendations, and views expressed in this report may differ from the ratings, recommendations, and views expressed by other research analysts or research teams employed by FSS. This report is being distributed outside Thailand by members of BNP Paribas. Turkey: This report is being distributed in Turkey by TEB Investment and outside Turkey jointly by TEB Investment and BNP Paribas. Notice Published in accordance with Communiqu Regarding the Principles on Investment Consultancy Activities and the Investment Consultancy Institutions Series: V, No: 55 issued by the Capital Markets Board. The investment related information, commentary and recommendations contained herein do not constitute investment consultancy services. Investment consultancy services are provided in accordance with investment consultancy agreements executed between investors and brokerage companies or portfolio management companies or non-deposit accepting banks. The commentary and recommendations contained herein are based on the personal views of the persons who have made such commentary and recommendations. These views may not conform to your financial standing or to your risk and return preferences. Therefore, investment decisions based solely on the information provided herein may fail to produce results in accordance with your expectations. United States: This report may be distributed in the United States only to U.S. Persons who are major U.S. institutional investors (as such term is defined in Rule 15a-6 under the Securities Exchange Act of 1934, as amended) and is not intended for the use of any person or entity that is not a major U.S. institutional investor. U.S persons who wish to effect transactions in securities discussed herein must do so through BNP Paribas Securities Corp., a USregistered broker dealer and member of FINRA, SIPC, NFA, NYSE and other principal exchanges. Certain countries within the European Economic Area: This document may only be distributed in the United Kingdom to eligible counterparties and professional clients and is not intended for, and should not be circulated to, retail clients (as such terms are defined in the Markets in Financial Instruments Directive 2004/39/EC (MiFID)). This document will have been approved for publication and distribution in the United Kingdom by BNP Paribas London Branch, a branch of BNP Paribas SA whose head office is in Paris, France. BNP Paribas SA is incorporated in France with limited liability with its registered office at 16 boulevard des Italiens, 75009 Paris. BNP Paribas London Branch (registered office: 10 Harewood Avenue, London NW1 6AA; tel: [44 20] 7595 2000; fax: [44 20] 7595 2555) is authorised by the Autorit de Contrle Prudentiel and the Prudential Regulation Authority and subject to limited regulation by the Financial Conduct Authority and Prudential Regulation Authority. Details about the extent of our authorisation and regulation by the Prudential Regulation Authority, and regulation by the Financial Conduct Authority are available from us on request. This report has been approved for publication in France by BNP Paribas, a credit institution licensed as an investment services provider by the Autorit de Contrle Prudentiel whose head office is 16, Boulevard des Italiens 75009 Paris, France. This report is being distributed in Germany either by BNP Paribas London Branch or by BNP Paribas Niederlassung Frankfurt am Main, regulated by the Bundesanstalt fr Finanzdienstleistungsaufsicht (BaFin). Other Jurisdictions: The distribution of this report in other jurisdictions or to residents of other jurisdictions may also be restricted by law, and persons into whose possession this report comes should inform themselves about, and observe, any such restrictions. By accepting this report you agree to be bound by the foregoing instructions. This report is not directed to, or intended for distribution to or use by, any person or entity that is a citizen or resident of or located in any locality, state, country, or other jurisdiction where such distribution, publication, availability or use would be contrary to law or regulation. All research reports are disseminated and available to all clients simultaneously through our internal client websites. For all research available on a particular stock, please contact the relevant BNP Paribas research team or the author(s) of this report. Additional Disclosures Target price history, stock price charts, valuation and risk details, and equity rating histories applicable to each company rated in this report is available in our most recently published reports available on our website: http://eqresearch.bnpparibas.com, or you can contact the analyst named on the front of this note or your BNP Paribas representative. All share prices are as at market close on 10 October 2013 unless otherwise stated.
20
BNP PARIBAS
SPOTLIGHT ON ASIA RECOMMENDATION STRUCTURE
11 OCTOBER 2013
Stock Ratings Stock ratings are based on absolute upside or downside, which we define as (target price* - current price) / current price. BUY (B). The upside is 10% or more. HOLD (H). The upside or downside is less than 10%. REDUCE (R). The downside is 10% or more. Unless otherwise specified, these recommendations are set with a 12-month horizon. Thus, it is possible that future price volatility may cause a temporary mismatch between upside/downside for a stock based on market price and the formal recommendation.
* In most cases, the target price will equal the analyst's assessment of the current fair value of the stock. However, if the analyst doesn't think the market will reassess the stock over the specified time horizon due to a lack of events or catalysts, then the target price may differ from fair value. In most cases, therefore, our recommendation is an assessment of the mismatch between current market price and our assessment of current fair value.
Industry Recommendations Improving ( ): The analyst expects the fundamental conditions of the sector to be positive over the next 12 months. Stable (previously known as Neutral) ( ): The analyst expects the fundamental conditions of the sector to be maintained over the next 12 months. Deteriorating ( ): The analyst expects the fundamental conditions of the sector to be negative over the next 12 months. Country (Strategy) Recommendations Overweight (O). Over the next 12 months, the analyst expects the market to score positively on two or more of the criteria used to determine market recommendations: index returns relative to the regional benchmark, index sharpe ratio relative to the regional benchmark and index returns relative to the market cost of equity. Neutral (N). Over the next 12 months, the analyst expects the market to score positively on one of the criteria used to determine market recommendations: index returns relative to the regional benchmark, index sharpe ratio relative to the regional benchmark and index returns relative to the market cost of equity. Underweight (U). Over the next 12 months, the analyst does not expect the market to score positively on any of the criteria used to determine market recommendations: index returns relative to the regional benchmark, index sharpe ratio relative to the regional benchmark and index returns relative to the market cost of equity.
RATING DISTRIBUTION (as at 10 October 2013)

Total BNP Paribas coverage universe Buy Hold Reduce 662 342 204 116 Investment Banking Relationship Buy Hold Reduce (%) 5.6 1.5 3.4
Should you require additional information concerning this report please contact the relevant BNP Paribas research team or the author(s) of this report. 2013 BNP Paribas Group
21
BNP PARIBAS

BNP Daily 20131011

Transféré par

Informations du document

Titre original

Copyright

Formats disponibles

Partager ce document

Partager ou intégrer le document

Options de partage

Avez-vous trouvé ce document utile ?

Ce contenu est-il inapproprié ?

Droits d'auteur :

Formats disponibles

BNP Daily 20131011

Transféré par

Droits d'auteur :

Formats disponibles

11 October 2013 **************************************************************************************

BNP Paribas Events

25 Oct 13 6 Nov 13 14-15 Nov 13

MACRO-ECONOMICS & EQUITY STRATEGY

10-11, 25 Oct 13 28 Oct 13 30 Oct 13

18-22 Nov 13 18-22 Nov 13 15-17 Nov 13

Click here for full story

SALES MORNING MEETING IDEAS

BNP Paribas Events

EQUITIES RESEARCH 8035 JP

THE STREET HOW WE DIFFER FROM T

KEY STOCK DATA

2014C 562.0 18.0 13.0 73 71.6 1.0 -

EV/EBITDA (x) Price/book (x) Net debt/equity (%) ROE (%)

16 6 (4) (14) (24) Tokyo Electron Rel to TOPIX Index (%)

1 Month 3 Month 12 Month 21.8 22.3 6.5 9.0 60.2 (0.2)

Issued shares (b)

Sources: Tokyo Electron; BNP Paribas estimates

Sources: Bloomberg; Company estimates (C); BNP Paribas estimates

Asian Instant Insight

South Korea: BoK Decision (Oct 2013)

Source: BNP Paribas, Reuters EcoWin Pro

Mark Walton 852 2108 5105 mark.walton@asia.bnpparibas.com

Asian Instant Insight

Australia: Labour Market (Sep 2013)

Employment rose by Augusts decline.

Full-time employment edged up continues to trend lower.

Source: BNP Paribas, Reuters EcoWin Pro

Key Chart: but working harder

Source: BNP Paribas, Reuters EcoWin Pro

Malaysia: Shuffling the deck chairs

Government may sell mortgage loans to banks

Avoiding a break of the debt ceiling is the goal

but this goes against the spirit of having one!

Public debt drops but would still grind higher

Admittedly, there are some positives to be found

Chart 1: Debt trajectory

G eneral G overnm ent D ebt, % of G DP W ith housing loans

W ithout housing loans

Source: CEIC, BNP Paribas Philip McNicholas Asian Desknote

Source: CEIC, BNP Paribas

EMERGING MARKET STRATEGY

Quality improvers monthly review

KEY STOCK DATA

Sales set to speed up

Price/book (x) Net debt/Equity (%) ROE (%)

Rel to MSCI China

Wee Liat Lee

CLOSE UP/DOWNSIDE PRIOR TP CHANGE IN TP

Another solid quarter

KEY STOCK DATA

Rel to MSCI China

1 Month 31.8 32.4

3 Month 95.5 80.8

12 Month 230.4 220.5 March 2014 5,031 8.5 25

Biostime Pharmaceutical (75%) 64.20/19.28 64.6 605

Issued shares (m)

Sources: Bloomberg consensus; BNP Paribas estimates

* BNPP forecasts Sources: Bloomberg consensus; BNP Paribas estimates

EQUITIES RESEARCH 6857 JP

HOW WE DIFFER FROM THE STREET

KEY STOCK DATA

Rebound not until new year?