First Light Asia
Disclaimer & Disclosures This report must be read with the disclosures in the Disclosure appendix, and with the Disclaimer, which forms part of it. Disclosures for companies can be accessed via the hyperlinks to the original published research, which can be found in the title Issuer of report: The Hongkong and Shanghai Banking Corporation Limited View HSBC Global Research at: https://www.research.hsbc.com THIS CONTENT MAY NOT BE DISTRIBUTED TO THE PEOPLE’S REPUBLIC OF CHINA (THE “PRC”) (EXCLUDING SPECIAL ADMINISTRATIVE REGIONS OF HONG KONG AND MACAO) What’s Changed, Research Focus, Today’s Events Ticker Company Rating was CurrencyTarget was EPS '15e EPS '16e Price Price At Close Up HUVR IN Hindustan Unilever BuyHold INR 950.00900.00 17.92(a) 19.25 804.2515 JanDown M1 SP M1 Buy SGD 2.913.06 0.190.19 2.60 15 Jan 813 HK Shimao Property Buy HKD 14.8019.30 2.502.80 11.1015 Jan WPRO IN Wipro Hold INR 600.00610.00 35.10(a) 36.80 543.1015 Jan Source: Bloomberg, HSBC estimates Research Focus Taiwan Strategy - Election results well expected; back to fundamentals John Chung* Landslide victory for DPP in presidential and legislative elections on 16 January were anticipated Market focus likely to switch back to fundamentals, given uncertainties about new policies Focus on niche players with positive fundamental outlook; we remain underweight on Taiwan equities Shimao Property (813 HK) - Buy: Subdued sales rekindle concern on operational bottleneck Michelle Kwok* 2015 contracted sales missed target, representing a 5% y-o-y decline, weakest among stocks we cover Concern on operational bottleneck and margin pressure are likely to be key concerns heading into the earnings season Reiterate Buy but cutting the TP by 23% to HKD14.80, based on widened target discount Amorepacific (090430 KS) - Buy: What China slowdown? The boom continues Karen Choi* 4Q15 earnings (due early Feb) should highlight Chinese travellers are returning to Korea Again, ‘Chinese’ continue to have a bigger influence; sales contribution should reach 45% by 2017 (from 28% in 2014) Maintain Buy with an unchanged target price of KRW500k; Amorepacific is an Asia Super Ten portfolio constituent Hindustan Unilever (HUVR IN) - Upgrade to Buy: 3Q in line, but growth set for lift-off Amit Sachdeva* Volume grew by a respectable 6% y-o-y in 3Q despite weak rural demand and a delayed winter Expect a material improvement in earnings growth now that various one-off earnings drags are out of the way Valuation compelling; upgrade to Buy (from Hold) with a revised DCF-based TP of INR950 (from INR900) 19 January 2016 First Light Asia RESEARCH MARKETING ASIA Ticker Event Rating Target Price Ticker Event NI Bbg Reliance Industries RIL IN Q3Hold 948.001,061.7Bank of America BAC US Q415.0HCL Technologies HCLT IN Q2Buy 985.00828.9International BuIBM US Q4132.9Siam Cement SCC TB Y Reduce 344.00414.0UnitedHealthUNH US Q4110.8China Industrial Production Dec 6%Morgan StanleyMS US Q427.2China Retail Sales Dec 11%Charles SchwabSCHW US Q428.1Source: Bloomberg, HSBC estimates Alfred Chin* Research Marketing +852 2996 6753alfred.k.y.chin@hsbc.com.hk *Employed by a non-US affiliate of HSBC Securities (USA) Inc, and is not registered/qualified pursuant to FINRA regulationsTaiwan Strategy | Shimao Property | Amorepacific | Hindustan Unilever abc RESEARCH MARKETING ASIA 19 January 2016 Regional Asian FX Comment: RMB - PBoC applies RRR on offshore yuan deposits Paul Mackel China's central bank will impose normal reserve requirements (of 15.5-17.5%, from 0% currently) to offshore RMB deposits in the Mainland. This will have a tightening effect on CNH funding, and follows reported intervention last week and other measures in recent months. From a medium-term perspective, this will also allow PBoC to have greater control of CNH money creation. Australia in 2016 - Doing quite well, considering Paul Bloxham Australia’s economy is showing considerable resilience in
