What’s Changed,Research Focus,Today’s Events

First Light Asia Asia Equity Insights Quarterly | India IT Services | Indian Autos (4W)| AEON[Production: please change headline text colour to WHITE, change headline row height to 1pt exactly before publish] What’s Changed, Research Focus, Today’s Events Ticker Company Rating was Currency Target was EPS '13a EPS '14e Price Price At Close Up TECHM IN Tech Mahindra OW N INR 3,040 2,760 127.20(a) 2593.55 31 Dec AEON MK AEON N UW MYR 3.33 0.16 0.15 3.15 31 Dec APNT IN Asian Paints OW INR 920 760 12.81(a) 775.05 05 Jan INDF IJ Indofood Sukses Makmur OW IDR 8,500 8,200 293.58 432.40 6750 01 Jan INFO IN Infosys Limited OW INR 2,240 2,087 93.17(a) 1972.55 31 De MSIL IN Maruti Suzuki India Ltd OW INR 4,000 3,750 92.00(a) 3359.60 02 Jan Down TCS IN TCS N OW INR 2,750 2,965 98.20(a) 2558.25 31 Dec HCLT IN HCL Technologies N INR 1,810 1,830 90.03(a) 1596.90 31 Dec MM IN Mahindra & Mahindra N INR 1,350 1,400 63.42(a) 1224.65 02 Jan WPRO IN Wipro N INR 630 645 31.67(a) 555.20 31 Dec Source: Bloomberg, HSBC estimates Click on title to open reports Research Focus Asia Equity Insights Quarterly - Scattered showers and sunny spells Herald van der Linde*  Asian equities will need to absorb the spill-over effect from EM weakness and expected higher interest rates in the US  This will offer opportunities, but in the near term we see continued weakness as PE multiples are likely to fall  We are overweight on India, China and Indonesia equities; by sector we are overweight on utilities, financials and energy India IT Services - 2015: The push-pull continues Yogesh Aggarwal*  Our long-term revenue growth outlook remains unchanged at c12% CAGR  However, in the near term, the stocks may benefit from INR depreciation and recent valuation correction  Downgrade TCS to N, upgrade TechM to OW (from N) and stay OW on Infosys Indian Autos (4W) - 2014 to 2015 – from Hope to Hope Yogesh Aggarwal*  Even 2015 may not see a sharp jump in demand as 2009/10. However, a gradual pick-up is likely with multiple demand tailwinds going into 2015  Robust margin performance should keep the sentiments buoyant in the meantime on MSIL  We continue to prefer MSIL over MM despite the valuation gap AEON (AEON MK) - Upgrade to Neutral: Weak performance in the price Ananita Kusumaningsih*  The stock price corrected by 36% as consumers are increasingly concerned about rising prices  AEON’s weak earnings performance is already in the price  Upgrade to Neutral (from Underweight) with an unchanged TP of MYR3.33 6 January 2015 Colin Davis* Head of Research Marketing Asia +852 2996 6635colindavis@hsbc.com.hk*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.comDisclaimer & Disclosures This 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 be found in the title THIS CONTENT MAY NOT BE DISTRIBUTED IN THE PEOPLE'S REPUBLIC OF CHINA (THE "PRC") (EXCLUDING SPECIAL ADMINISTRATIVE REGIONS OF HONG KONG AND MACAO) First Light Asia 6 January 2015 abcRegional Commodity prices snapshot - Sharp fall in December ends weakest year since 2008 Paul Bloxham  Global commodity prices fell sharply in December, led by another large decline in oil prices  Our indicator suggests the IMF commodity price index is likely to have fallen by a very sharp -14% in December  This would take the full-year decline in commodity prices to -30%, the largest fall since 2008. No lift from oil - What the latest PMIs mean for Asia Frederic Neumann  You might have thought that the drop in oil prices would have jolted manufacturing into life. Not quite  True, there are a few bright spots, including India, Japan and Vietnam  But, on the whole, the sector is still losing momentum. HSBC's China PMI fell below 50, while Taiwan and Indonesia slipped as well. A fragile increase - Asian Electronics Tracker update (Jan 2015) Ronald Man China & Hong Kong Macau Gaming - December market share review Charlene Liu* Korea Memory sector - Strong NAND price versus temporary DRAM price hiccup Ricky Seo* Taiwan Taiwan: HSBC Manufacturing