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AUSTRALIA
TRANSPORT
LONG TERM
Conviction|
The Transport sector has benefitted from the recent rally in the equity markets, with only VAH underperforming the S&P/ASX 200 over the previous month. In our view, the rally has not been predicated by improvement in underlying fundamentals across the sector, and we therefore see risks through reporting season as earnings and outlook commentary may fail to meet market expectations.
Figure 1: Transport sector summary
Current share Upside to price target price $1.50 $4.84 $4.00 $1.77 $0.43 $8.13 $5.27 21% 16% 9% 2% 2% -5% -7%
SOURCE: CIMB
Mark Williams
T +61 2 8259 6921 E mark.williams@cimb.com
Recommendation Prev Outperform Outperform Outperform Outperform Neutral Neutral Neutral New Outperform Outperform Outperform Neutral Neutral Underperform Underperform
Target Price Prev $1.46 $5.15 $4.09 $1.75 $0.44 $6.70 $4.61 New $1.81 $5.61 $4.34 $1.81 $0.44 $7.75 $4.92
Killian Murphy
T +61 2 9694 6098 E killian.murphy@cimb.com
The growth of means of transport has created a world market and an opportunity for division of labor embracing all the developed and most of the undeveloped states.
- Christian Lous Lange (Nobel Laureate)
We have adjusted our recommendations to reflect CIMB Australias new recommendation structure based on expected relative performance compared with other stocks in the sector. We maintain QAN, AIO and AZJ as our key picks in the transport sector over the next 12 months, but we downgrade BXB and TOL to Underperform due to valuation concerns.
Asciano (AIO.AX)
We believe there is significant valuation support for AIO as earnings continue to grow at mid-double-digit rates. In our view, AIOs P/E de-rating over the past three years has now passed and the share price will reflect earnings growth.
Aurizon (AZJ.AX)
AZJ may not be cheap on FY14F EV/EBITDA of 7.9x and P/E of 16.8x, but coal export markets are improving and AZJ retains the capacity for further capital management.
Our house view assumes the Australian economy will see a pick-up in consumer spending over 2013 as factors such as low unemployment, income growth, re-balanced household balance sheets and additional interest rate cuts create a more conducive spending environment. This would naturally benefit the transport sector, but indications early in the year suggest that not much has changed yet. We believe the impact on the sector will depend on where discretionary dollars are spent, with TOL, BXB, AIO and QUB leveraged to product spending, while QAN and VAH are
Logistics to underperform
We have downgraded our recommendations for the logistics operators (BXB, TOL and QUB) as we believe valuations have become too stretched relative to the underlying fundamentals of the economy, which we regard as still quite soft. A cyclical recovery would justify the re-ratings, but at this stage we are seeing little change in underlying fundamentals and we remain cautious on the potential for a meaningful recovery to take shape.
IMPORTANT DISCLOSURES, INCLUDING ANY REQUIRED RESEARCH CERTIFICATIONS, ARE PROVIDED AT THE END OF THIS REPORT. Designed by Eight, Powered by EFA
TRANSPORT
January 31, 2013
KEY CHARTS Transport sector has been outperforming the market recently as investors have gone in search of risk
TOL has yielded the greatest outperformance, beating the market by almost 10% over the past three months. QUB, BXB and QAN have also outperformed, while AIO and AZJ have largely moved with the market.
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TRANSPORT
January 31, 2013
1. KEY TRANSPORT PICKS FOR 2013 1.1 Realigning our recommendation structure
We have realigned our recommendations across the sector to conform to the CIMB Australia recommendation structure, being a relative call against the other stocks that we cover in the sector. An outperform recommendation is thus a stock that we believe will outperform the rest of the sector over the next 12 months. We therefore end up with an even spread of recommendations across the sector. Given the disparate nature of companies in the Transport sector, we also try to maintain a preference within a particular sub-sector eg, rail/ports (AIO, AZJ), transport/logistics (BXB, TOL, QUB) and airlines (QAN, VAH).
Recommendation Prev Outperform Outperform Outperform Outperform Neutral Neutral Neutral New Outperform Outperform Outperform Neutral Neutral Underperform Underperform
Target Price Prev $1.46 $5.15 $4.09 $1.75 $0.44 $6.70 $4.61 New $1.81 $5.61 $4.34 $1.81 $0.44 $7.75 $4.92
TRANSPORT
January 31, 2013
While 2012 saw disruption in the coal export markets from softer demand of metallurgical coal and supply issues in thermal coal markets, conditions improved towards the end of the year and this has continued into the start of 2013. Queensland finished the year with a monthly exports record of 18Mt in December (14% growth on pcp), led by record exports from Dalrymple Bay CT, while the Hunter Valley produced its own record of 13Mt (16% growth). On current trends, Queensland coal exports are on track to achieve our FY13 forecast of 173Mt (89Mt 1H13), while Hunter Valley exports are tracking ahead of our 139Mt forecast (71Mt 1H13) and could reach 145Mt if current growth is maintained. Much will depend on the remainder of the wet season (January to March), but to date we dont think the impact will be any g reater than in an average year. The effects of Cyclone Oswald will have some impact on exports from Queenslands Blackwater and Moura systems, but we dont think it will be material in the context of annual volumes (1-2%).
Figure 3: Annualised coal export rate
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In the container ports industry, the outlook for 2013 appears subdued, with most of the shipping lines we talk to suggesting they expect growth to remain around similar levels for the year. Typically container volumes grow at 2.0-2.5x GDP, suggesting growth should pick up to 5-6% in FY14. Despite this, we expect AIO to deliver EBIT improvement in the Terminals & Logistics division of 5% in FY13 and 8% in FY14 as cost efficiencies drive margin expansion. Hutchison will also begin to service volumes this year, although it appears less likely that operations will commence in Sydney until towards the end of 2013. We therefore think there is marginal upside risk to AIOs earnings in FY14.
TRANSPORT
January 31, 2013
share price movements and fundamentals, we see disappointment risk on the horizon so we have downgraded our recommendations.
TRANSPORT
January 31, 2013
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US Housing Starts
SOURCE: NAHB
Europe still in for another challenging year Europe has limited options other than to pursue its policies of national austerity and household deleveraging, in our view. While the precise structure of the single-currency union going forward remains uncertain, bond yields for the periphery have retraced considerably, partly due to national policy initiatives, but primarily driven by ECB President Draghis comments in July that the institution would do whatever it takes to maintain the integrity of the euro. We expect Europe to report yet another year of slightly declining growth. The political arena seems the most likely candidate for downside risk. Italian elections in late February and German federal elections in September/October will be closely scrutinised to assess taxpayers appetite for continued austerity and support of the Eurozone. Australia consumers to come to the party? As mining investment rolls off from the second half of the year, domestic sectors such as housing and consumer spending will be relied on to pick up the slack created by the investment downturn. To date most of the RBAs stimulus measures have been used to pay down debt, so some growth has been lost. Softer domestic data prompted rate cuts in October and December, which, coupled with improving Chinese growth, led to a timely boost in market sentiment. Our Economics team anticipates further interest-rate cuts in 1QCY13 and 2QCY13, to 2.5%, on the back of further soft domestic data in 4QCY12. This level of easing should be sufficient to drive consumer activity, resulting in our economists forecasting a 2.9% increase in consumer spending in 2013 although, given the positive monetary policy outlook, risks are skewed to the upside.
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TRANSPORT
January 31, 2013
The impact on the remainder of the companies (QAN, VAH, TOL, QUB and AIO) would depend on the nature of the recovery. To date, consumers have been more reluctant to spend on physical products, preferring recreational activities or services instead (eg, holidays, cafes etc). If this trend continued, we would expect QAN and VAH to be the prime beneficiaries. However, if there is a shift back towards spending on products then TOL, AIO and QUB would be the major beneficiaries. Inventory levels appear in the retail supply chain, providing a potential boost to transport/logistics providers if a replenishment is required. A more sustained improvement in the key global economies (the US, Europe) would be most beneficial for BXB given its significant earnings contributions from those regions, but it appears unlikely that Europe will register much improvement in 2013. At best we think the region will not deteriorate any further. Signs of life in the US economy are encouraging for BXB, although we continue to caution that underlying volume growth appears to remain somewhat subdued. However, as it is one of the few listed Australian stocks with significant US earnings exposure, continued improvement and optimism in the US economy has the potential to provide ongoing support to BXBs share price.
TRANSPORT
January 31, 2013
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SOURCES: DATASTREAM
SOURCES: DATASTREAM
Outlook Our Economics team expects that as mining investment rolls off from the second half of the year, domestic sectors such as housing and consumer spending will be relied on to pick up the slack created by the investment downturn. Should this view of the economy eventuate, AIO should see some volume improvement coming through in its container businesses. At this stage we remain cautious about assuming any material improvement in consumer spending as it hasnt happened to date, despite cash rates being lowered to 3.0%. Coal volumes will remain a key growth driver and, after a soft start to FY13, the December quarter was relatively strong and provided a good lead into 2013. On current trends, Queensland coal exports are on track to achieve our FY13 forecast of 173Mt (89Mt 1H13), while Hunter Valley exports are tracking ahead of our 139Mt forecast (71Mt 1H13) and could reach 145Mt if current growth is maintained. Much will depend on the remainder of the wet season (January to March), but to date there has been less weather-related impact than in previous years. We continue to believe the long-term outlook for coal demand remains strong. We believe a strengthening Chinese economy will drive improved demand for metallurgical coal exports from Queensland, while thermal coal will continue to be driven by Asian energy requirements. Target price increases to A$5.61 Our DCF valuation increases marginally from A$5.54 to A$5.56. Our SOTP valuation increases more materially, from A$5.15 to A$5.61, as we roll forward the earnings base from FY13F to FY14F. With our target price based on our SOTP valuation, our 12-month target price also increases from A$5.15 to A$5.61.
TRANSPORT
January 31, 2013
1H preview Reporting date 19 February Earnings guidance No official earnings guidance has been issued by the company, but management continues to stick to its 15% pa EBIT growth target through FY16; 15% growth in FY13F would equate to EBIT of A$709m. Consensus Bloomberg consensus FY13F EBIT is A$697m, in line with our forecast of A$695m.
Figure 11: AIO 1H earnings forecast summary
(A$m) Total revenue - Terminals & Logistics - Bulk & Auto - PN Coal - PN Rail - Other Total operating costs Total EBITDA Dep. & amort EBIT - Terminals & Logistics - Bulk & Auto - PN Coal - PN Rail - Corporate/Other - Associates Net interest expense PBT Income tax expense Minority interests NPAT Significant items Reported NPAT EPS DPS EBIT margin - Terminals & Logistics - Bulk & Auto - PN Coal - PN Rail 1H12A 1692.8 355.5 215.2 459.2 640.5 22.4 -1264.1 428.7 -142.0 294.9 93.8 18.4 100.4 104.5 -30.3 8.1 -120.0 174.8 -51.9 -0.7 122.2 -9.2 113.0 11.6 3.5 17.4% 26.4% 8.6% 21.9% 16.3% 2H12A 1758.9 328.9 272.0 474.1 653.7 30.2 -1297.5 461.4 -149.0 321.8 74.8 31.9 122.9 108.1 -25.4 9.5 -100.4 221.5 -57.0 -1.2 163.3 -35.5 127.8 13.1 4.0 18.3% 22.7% 11.7% 25.9% 16.5% FY12A 3456.7 684.4 487.2 933.3 1294.2 57.6 -2566.6 890.1 -291.0 616.7 168.6 50.3 223.3 212.6 -55.7 17.6 -220.4 396.3 -108.9 -1.9 285.5 -44.7 240.8 24.7 7.5 17.8% 24.6% 10.3% 23.9% 16.4% 1H13F 1870.8 363.8 266.4 554.4 677.1 9.2 -1382.9 487.9 -154.5 341.6 94.1 26.2 127.0 113.8 -27.8 8.2 -108.1 233.5 -67.7 -1.0 164.8 0.0 164.8 16.9 4.5 18.3% 25.9% 9.8% 22.9% 16.8% 2H13F 1920.7 335.9 299.3 581.7 694.6 9.2 -1411.4 509.3 -160.6 353.6 82.7 32.6 146.7 114.6 -27.8 4.9 -112.0 241.6 -70.1 -1.0 170.6 0.0 170.6 17.5 5.0 18.4% 24.6% 10.9% 25.2% 16.5% FY13F 1H13F vs 1H12A FY13F v FY12A 3791.5 699.7 565.7 1136.1 1371.7 18.3 -2794.3 997.2 -315.1 695.2 176.8 58.9 273.7 228.4 -55.7 13.1 -220.1 475.1 -137.8 -1.9 335.4 0.0 335.4 34.4 9.5 18.3% 25.3% 10.4% 24.1% 16.7% 10.5% 2.3% 23.8% 20.7% 5.7% -59.2% 9.4% 13.8% 8.8% 15.8% 0.3% 42.5% 26.5% 8.9% -8.1% 1.8% -9.9% 33.6% 30.6% 35.7% 34.8% -100.0% 45.9% 45.9% 28.6% 0.8pt -0.5pt 1.3pt 1.0pt 0.5pt 9.7% 2.2% 16.1% 21.7% 6.0% -68.2% 8.9% 12.0% 8.3% 12.7% 4.9% 17.0% 22.6% 7.4% 0.0% -25.6% -0.1% 19.9% 26.5% 0.0% 17.5% -100.0% 39.3% 39.3% 26.7% 0.5pt 0.6pt 0.1pt 0.2pt 0.2pt
TRANSPORT
January 31, 2013
10
TRANSPORT
January 31, 2013
Figure 14: AZJ P/E premium to S&P/ASX 200 (one year forward)
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SOURCE: DATASTREAM
SOURCE: DATASTREAM
When we upgraded our recommendation to Outperform (from Neutral) at the FY12 result, we believed management deserved credit for delivering cost-out ahead of our expectations. With voluntary redundancy programs still to wash through and further opportunity to streamline the business, we think AZJ is going to be an ongoing story of earnings surprise and growth. While the business has been more exposed than AIO to volume shortfalls due to lack of full take-or-pay protections on its coal contracts, we believe it is also therefore more leveraged to an improvement in coal haulage volumes. We think it is too early to be sure if the pick-up in Queensland coal exports at the end of 2012 will be sustained into 2013, but it provides an opportunity for AZJ to prove the additional leverage it has put into the business by removing unnecessary costs. Outlook Softer demand of metallurgical coal and supply issues in thermal coal markets disrupted the coal export markets in 2012, but conditions improved towards the end of the year and this has continued into the start of 2013. Queensland finished the year with a monthly export record of 18Mt in December (14% growth on pcp), led by record exports from Dalrymple Bay CT, while the Hunter Valley produced its own record of 13Mt (16% growth). On current trends, Queensland coal exports are on track to achieve our FY13 forecast of 173Mt (89Mt 1H13), while Hunter Valley exports are tracking ahead of our 139Mt forecast (71Mt 1H13) and could potentially reach 145Mt if current growth is maintained. Much will depend on the remainder of the wet season (January to March), but to date there has been less weather-related impact than in previous years. We continue to believe the outlook for coal demand remains strong. We believe a strengthening Chinese economy will drive improved demand for metallurgical coal exports from Queensland, while thermal coal will continue to be driven by Asian energy requirements.
11
TRANSPORT
January 31, 2013
1H preview Reporting date 20 February Earnings guidance No official earnings guidance has been issued by the company, but management has indicated it expects coal-haulage volume growth at the lower end of 195-205Mt. Consensus Bloomberg consensus FY13F EBIT is A$802m, 1% below our forecast of A$807m.
Figure 15: AZJ 1H earnings forecasts
(A$m) Total revenue - Coal - Network - Freight Total operating costs EBITDA Depreciation & Amortisation EBIT - Coal - Network - Freight - Corporate/Other Net interest expense PBT Income tax expense Normalised NPAT Significant items Reported NPAT EPS DPS EBIT margin - Coal - Network - Freight 1H12A 1765.4 949.9 595.4 731.8 -1297.7 467.7 -216.3 251.4 139.0 155.6 28.5 -71.7 -14.7 236.7 -68.4 168.3 21.0 189.3 6.9 3.7 14.2% 14.6% 26.1% 3.9% 2H12A 1918.3 877.7 614.7 791.8 -1337.8 580.5 -247.4 333.1 118.0 185.8 71.4 -42.1 -24.3 308.8 -57.2 251.6 0.0 251.6 10.3 4.6 17.4% 13.4% 30.2% 9.0% FY12A 3634.1 1827.6 1210.1 1523.6 -2585.9 1048.2 -463.7 584.5 257.0 341.4 99.9 -113.8 -39.0 545.5 -125.6 419.9 21.0 440.9 17.2 8.3 16.1% 14.1% 28.2% 6.6% 1H13F 2040.3 1048.1 706.9 767.3 -1396.1 644.2 -259.8 384.4 187.2 208.0 43.3 -54.0 -36.7 347.7 -104.3 243.4 -52.5 190.9 10.6 5.0 18.8% 17.9% 29.4% 5.6% 2H13F 2003.7 1020.6 711.8 753.3 -1323.2 680.5 -258.2 422.4 158.2 247.3 63.0 -46.1 -63.3 359.0 -107.7 251.3 0.0 251.3 11.8 6.0 21.1% 15.5% 34.7% 8.4% FY13F 4044.0 2068.7 1418.7 1520.5 -2719.3 1324.8 -518.0 806.8 345.4 455.3 106.3 -100.2 -100.1 706.7 -212.0 494.7 -52.5 442.2 21.6 11.0 20.0% 16.7% 32.1% 7.0% 1H13F v 1H12A 15.6% 10.3% 18.7% 4.8% 7.6% 37.7% 20.1% 52.9% 34.7% 33.7% 52.0% -24.6% 149.9% 46.9% 52.5% 44.6% -350.0% 0.8% 54.2% 35.1% 4.6pt 3.2pt 3.3pt 1.8pt FY13F v FY12A 11.3% 13.2% 17.2% -0.2% 5.2% 26.4% 11.7% 38.0% 34.4% 33.3% 6.4% -12.0% 156.6% 29.6% 68.8% 17.8% -350.0% 0.3% 25.6% 32.5% 3.9pt 2.6pt 3.9pt 0.4pt
12
TRANSPORT
January 31, 2013
13
TRANSPORT
January 31, 2013
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SOURCE: DATASTREAM
SOURCE: DATASTREAM
Outlook The outlook for the US and European economies is the key driver for BXBs underlying business given 75-80% of its earnings come from those regions. Signs of improvement are coming through in the US data (eg, housing) that make us optimistic about a consumer recovery throughout 2013, but we expect Europe to remain largely be in recession this year. We therefore see the broader macro environment as largely unchanged for BXB in 2013. As a better indication of the underlying fundamentals of the BXB business, we track quarterly volume growth of global fast moving consumable goods (FMCG) companies that form the majority of the Pallet divisions customer base (67% of BXB group earnings). In our view, this is a better proxy for BXBs business than retail sales growth as it eliminates the impact of pricing on sales growth. Broadly speaking, FMCG companies are reporting mild volume growth in North America (0-2%), while Europe continues to experience volume declines (-1-3%). Quarterly results for 4Q2012 are due out over the next couple of weeks, but we expect little change. Given the broader macro outlook noted above, we do not expect significant growth in BXBs underlying businesses in 2013. However, earnings growth should still be achieved, in our view, via new customer wins, and growth in new product categories and emerging markets. As a result, we forecast 9% EPS growth for FY14.
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TRANSPORT
January 31, 2013
1H preview Reporting date 21 February Earnings guidance BXB has guided to FY13 EBIT of US$1,010m-1,080m, based on 30 June 2012 currency rates (EUR/USD 1.24, GBP/USD 1.55, and AUD/USD 1.00). On an equivalent basis, we forecast FY13 EBIT of US$1,054m. Consensus Bloomberg consensus FY13F EBIT is US$1,083m, 2% above our forecast of US$1,065m. On a comparable basis to management guidance, we estimate consensus is around US$1,070m.
Figure 19: BXB 1H earnings forecasts
(US$m) Sales - Pallets Americas - Pallets EMEA - Pallets Asia-Pacific - RPCs - Containers - Recall EBITDA Depreciation & Amortisation EBIT - Pallets Americas - Pallets EMEA - Pallets Asia-Pacific - RPCs - Containers - Recall - Corporate Net interest PBT Tax NPAT Significant items - net Reported NPAT EPS DPS EBIT Margin - Pallets Americas - Pallets EMEA - Pallets Asia-Pacific - RPCs - Containers - Recall 1H12A 2,783.0 983.8 672.8 187.0 386.7 135.2 417.5 723.3 281.2 452.5 158.3 135.9 36.0 54.2 16.4 71.2 (15.7) (83.8) 368.7 106.5 262.2 (22.7) 239.5 17.6 13.0 16.3% 16.1% 20.2% 19.3% 14.0% 12.1% 17.1% 2H12A 2,842.0 1,057.5 654.0 188.8 372.8 141.4 427.5 833.1 271.0 557.6 205.3 138.9 40.6 71.3 16.4 103.0 (22.1) (68.2) 489.4 125.7 363.7 (26.9) 336.8 24.4 13.0 19.6% 19.4% 21.2% 21.5% 19.1% 11.6% 24.1% FY12A 5,625.0 2,041.3 1,326.8 375.8 759.5 276.6 845.0 1,556.8 552.2 1,010.1 363.6 274.8 76.6 125.5 32.8 174.2 (37.8) (152.0) 858.1 232.2 625.9 (49.6) 576.3 42.0 26.0 18.0% 17.8% 20.7% 20.4% 16.5% 11.9% 20.6% 1H13F 2,888.7 1,072.0 658.8 198.0 405.6 145.2 409.2 806.4 322.7 486.4 188.5 132.9 38.3 60.8 16.1 72.2 (22.3) (68.6) 417.8 117.0 300.8 (5.4) 295.4 19.3 13.5 16.8% 17.6% 20.2% 19.3% 15.0% 11.1% 17.6% 2H13F 2,981.9 1,082.7 652.3 197.2 426.6 178.8 444.3 836.9 261.6 578.1 215.7 139.3 42.2 82.1 20.8 100.2 (22.3) (67.3) 510.7 143.0 367.7 (5.4) 362.3 23.4 14.4 19.4% 19.9% 21.4% 21.4% 19.3% 11.6% 22.6% FY13F 5,870.6 2,154.7 1,311.1 395.2 832.1 324.0 853.5 1,643.3 584.3 1,064.5 404.2 272.2 80.4 143.0 36.9 172.4 (44.6) (135.9) 928.6 260.0 668.6 (10.8) 657.8 42.7 27.9 18.1% 18.8% 20.8% 20.4% 17.2% 11.4% 20.2% 1H13F v 1H12A FY13F v FY12A 3.8% 9.0% -2.1% 5.9% 4.9% 7.4% -2.0% 11.5% 14.7% 7.5% 19.1% -2.2% 6.3% 12.2% -2.0% 1.4% 42.1% -18.1% 13.3% 9.9% 14.7% -76.2% 23.4% 9.9% 3.9% 0.6pt 1.5pt 0.0pt 0.1pt 1.0pt -1.1pt 0.6pt 4.4% 5.6% -1.2% 5.2% 9.6% 17.1% 1.0% 5.6% 5.8% 5.4% 11.2% -1.0% 5.0% 13.9% 12.5% -1.0% 18.0% -10.6% 8.2% 12.0% 6.8% -78.2% 14.1% 1.7% 7.2% 0.2pt 0.9pt 0.0pt 0.0pt 0.7pt -0.5pt -0.4pt
15
TRANSPORT
January 31, 2013
16
TRANSPORT
January 31, 2013
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SOURCE: DATASTREAM
Outlook Our house view for 2013 is that consumer spending will pick-up over the year. Our Economics team believes that as mining investment rolls off from the second half of the year domestic sectors such as housing and consumer spending will be relied on to pick up the slack created by the investment downturn. Policy efforts to stimulate consumer activity are coming through RBA interest rate cuts and Federal tax cuts. To date most of these stimuli have been used to pay down debt by households, so some growth has been lost. Our Economics team anticipates further interest rate cuts in 1QCY13 and 2QCY13, to 2.5%, on the back of further soft domestic data in 4QCY12. This level of easing is expected to be sufficient to drive consumer activity resulting in our economists forecasting a 2.9% increase in consumer spending in 2013. A pick-up in consumer spending would clearly benefit TOL given its broad-based exposure to discretionary and non-discretionary retail. However, we remain cautious as anecdotal feedback from transport operators early in 2013 suggests there has been little in the way of improvement in the short term. We are therefore wary that any recovery may be more gradual than generally expected. We believe margin pressure on the supply chain will continue for now, while the slowdown in mining and resources activity will also likely negatively affect TOL in the short term
17
TRANSPORT
January 31, 2013
1H preview Reporting date 20 February Earnings guidance No official earnings guidance has been provided by management. Consensus Bloomberg consensus FY13F EBIT is A$430m (range of A$405m-445m), 1% below our forecast of A$433m. Consensus forecasts indicate 5% earnings growth vs pcp.
18
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Closing price (A$) Multiples Enterprise value (A$m) EV/Sales (x) EV/EBITDA (x) EV/EBIT (x) PE (pre-goodwill) (x) At target price EV/EBITDA (x) PE (pre-goodwill) (x) Per share data No. shares No. shares (FD) EPS (reported) EPS (normalised) (c) Dividend per share (c) Dividend payout ratio (%) Dividend yield (%) Growth ratios Sales growth EBITDA growth EBITA growth Operating performance Asset turnover (%) EBITDA margin (%) EBIT margin (%) Net profit margin (%) Return on net assets (%) Return on average equity (%) ROIC (%) Financial metrics Net debt (A$m) Net debt/equity (%) EBIT/Net Interest cover (x) Net Debt/EBITDA Net Debt/EBIT Divisional Revenue Global Express Domestic Forwarding Specialised & Dom Freight Global Logistics Global Resources Global Forwarding Other Divisional EBITA Global Express Domestic Forwarding Specialised & Dom Freight Global Logistics Global Resources Global Forwarding Other
5.27 2012A 3794.2 0.4 5.6 9.5 14.1 2012A 5.2 13.2 2012A 716.3 716.3 9.0 37.4 23.4 259% 4.4% 2012A 6% 7% 2% 2012A 144% 7.8% 4.8% 3.1% 6.7% 9.7% 7.1% 2012A 1139.2 41% 10.8 1.7 2.9 2012A 2233.9 1150.9 1322.0 1419.7 1106.8 1450.6 23.3 2012A 128.7 56.7 87.7 88.1 102.3 16.5 -52.8
Price target (A$) 2013F 3808.9 0.4 5.4 9.1 13.4 2013F 5.1 12.5 2013F 717.9 717.9 44.3 39.4 25.0 56% 4.7% 2013F 1% 3% 3% 2013F 143% 7.9% 4.6% 3.2% 6.8% 10.0% 7.4% 2013F 950.1 32% 12.7 1.4 2.3 2013F 2276.4 1099.4 1401.3 1345.9 1123.2 1519.3 23.3 2013F 139.8 56.0 95.3 83.1 102.9 18.2 -52.8 2014F 3839.5 0.4 5.0 8.2 12.3 2014F 4.7 11.5 2014F 722.5 722.5 42.8 42.8 26.8 63% 5.1% 2014F 9% 10% 10% 2014F 146% 8.0% 4.7% 3.2% 7.4% 10.4% 8.0% 2014F 1232.2 40% 10.2 1.6 2.6 2014F 2324.8 1132.4 1485.4 1440.0 1190.6 1992.9 23.3 2014F 154.9 56.6 101.0 89.4 113.1 27.9 -52.8
4.92 2015F 3885.6 0.4 4.6 7.3 11.0 2015F 4.3 10.3 2015F 730.1 730.1 47.9 47.9 28.5 60% 5.4% 2015F 7% 11% 12% 2015F 147% 8.3% 4.9% 3.4% 7.8% 11.3% 8.7% 2015F 1483.7 46% 9.7 1.7 2.8 2015F 2399.0 1166.4 1574.5 1541.5 1262.0 2304.8 23.3 2015F 172.3 58.3 107.1 95.6 126.2 46.1 -52.8
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(x)
Title: Source:
25 80% 20
60%
Please fill in the values above to have them entered in your rep
SOURCE: DATASTREAM
SOURCE: DATASTREAM
Outlook Despite our more neutral stance on the stock in the short term, we believe the outlook for QUB remains positive, and that the company is well positioned to leverage off the growing freight task and modal shift from road to rail. The recently completed Southern Sydney Freight Line should assist in this, as it separates freight trains from the passenger network. Further track infrastructure upgrades are required to achieve this completely, but intermodal terminal capacity at Moorebank is also a critical piece of infrastructure, in our view, to achieving a meaningful shift of freight onto rail. However, in the short term we believe underlying growth in the logistics business will be relatively muted in 2013 as port container growth is stuck at around 3% and doesnt appear to be improving. Our Economics team believes a cyclical recovery is likely to begin forming in 2013, which would assist top-line growth, if it occurs. However, we remain cautious for the time being. We do expect earnings growth ahead of revenue growth though as management streamlines the business further and leverages greater economies of scale. Despite the soft conditions in the logistics business, QUBs growing exposure to bulk commodities should continue to drive earnings growth in the Bulk & Ports division. Volumes at Utah Point appear solid and QUB should benefit from the ramping up of new contracts (Sandfire Resources) and recent acquisitions (Giacci).
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1H preview Reporting date 26 February Earnings guidance Management indicated at the FY12 result that it expected revenue and earnings growth in FY13, although at a slower rate than in FY12. Proportionate EBIT growth in FY12 was 53% and we forecast proportionate EBIT growth of 44% in FY13. Consensus Bloomberg consensus FY13F NPAT is A$78m, in line with our forecast. Consensus NPAT indicates 13% growth on FY12.
SOURCES: CIMB FORECASTS, COMPANY REPORTS *Note FY12A figures represent pro-forma earnings reported by QUB, adjusting for the change in structure to a corporate entity during the year
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(x)
2.2 1.9
Title: Source:
Please fill in the values above to have them entered in your rep
SOURCE: DATASTREAM
SOURCE: DATASTREAM
2013 outlook capacity, capacity, capacity The only determinant of profitability that airlines as an industry have any influence over is capacity, as the other key drivers are influenced by the broader macro environment. In 2012 an undisciplined approach towards capacity additions on the key domestic routes resulted in yield erosion, to the detriment of profitability. We do not expect to see such a stark increase in capacity in 2013 but rather anticipate a more moderate, low-single-digit increase. This relative decline in capacity increases in 2013 should translate into a better yield profile than in 2012. As mining investment peaks in mid-2013 and the RBA continues to ease monetary policy, the stage is nicely set for growth in consumption, which we believe will support an increase in demand. This, coupled with benign capacity growth environment, should lead to improved profitability for QAN, especially given the high level of operating leverage inherent in airlines operating models. In addition, with the US economy continuing along its path to recovery, albeit more slowly than usual, the political environment in Europe becoming more accepting of the present situation and an improving growth trajectory in China, the outlook for the global economy is becoming more positive (from a very depressed base). An improvement in the global economic outlook should be positive for high-beta stocks like Qantas. Target price increased to A$1.81 We maintain our Outperform recommendation on the stock, with an upgraded target price of A$1.81 (from A$1.46), based on an 11x FY14F P/E multiple. QANs historical average P/E multiple is closer to 10x, but we believe there is more upside risk to our earnings than downside risk. Our target price remains at a 20% discount to 1.0x FY14F P/B, so we believe there is further upside from current levels.
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1H preview Reporting date 21 February Earnings guidance QAN has guided to 1H underlying PBT of A$180m-230m, including the compensation payments from Boeing (US$140m). Consensus Bloomberg consensus FY13F PBT is A$312m, 33% above our forecast of A$235m. We forecast QAN will achieve 1H PBT at the top end of its guidance range, but we believe QAN will find it challenging to achieve a profit in the 2H given the typical 1H earnings skew. Removing the benefit of the Boeing compensation payments in the 1H, underlying PBT is therefore only about A$100m, which we think equates to a break-even 2H. We believe the market is therefore overly optimistic on QANs 2H earnings.
Figure 31: QAN 1H earnings forecast summary
1H12A Total Revenue Operating Costs Operating EBITDAR Non-cancellable operating leases Operating EBITDA D&A Operating EBIT - Qantas - Jetstar - Freight - QFF - Corporate/Other Net Interest Expense PBT Taxation Minorities Normalised NPAT Abnormals (net of tax) Reported NPAT EPS DPS EBITDAR margin EBIT margin PBT margin NPAT margin 8,048.0 6,815.0 1,233.0 277.0 956.0 679.0 277.0 66.0 147.0 38.0 119.0 (93.0) (75.0) 202.0 59.2 0.0 142.8 (100.8) 42.0 6.3 0.0 15.3% 3.4% 2.5% 1.8% 2H12A 7,676.0 6,711.0 965.0 272.0 693.0 705.0 (12.0) (87.0) 56.0 7.0 112.0 (100.0) (95.0) (107.0) (32.6) (1.0) (75.4) (211.6) (287.0) -3.3 0.0 12.6% -0.2% -1.4% -1.0% FY12A 15,724.0 13,526.0 2,198.0 549.0 1,649.0 1,384.0 265.0 (21.0) 203.0 45.0 231.0 (193.0) (170.0) 95.0 26.6 (1.0) 67.4 (312.4) (245.0) 3.0 0.0 14.0% 1.7% 0.6% 0.4% 1H13F 8,220.8 6,848.1 1,372.8 294.7 1,078.0 746.6 331.4 0.4 127.9 35.0 127.8 40.3 (98.7) 232.7 69.8 (0.5) 162.4 (50.0) 112.4 7.2 0.0 16.7% 4.0% 2.8% 2.0% 2H13F 7,918.4 6,792.0 1,126.4 291.5 834.9 738.4 96.6 (24.9) 85.3 18.3 117.9 (100.0) (94.8) 1.8 (4.2) (0.5) 5.4 (50.0) (44.6) 0.2 0.0 14.2% 1.2% 0.0% 0.1% FY13F 1H13F v 1H12A FY13F v FY12A 16,139.2 13,640.1 2,499.2 586.2 1,912.9 1,485.0 427.9 (24.5) 213.2 53.3 245.7 (59.7) (193.4) 234.5 65.7 (1.0) 167.8 (100.0) 67.8 7.5 0.0 15.5% 2.7% 1.5% 1.0% 2.1% 0.5% 11.3% 6.4% 12.8% 10.0% 19.6% -99.4% -13.0% -7.9% 7.4% -143.4% 31.5% 15.2% 17.9% n/m 13.7% -50.4% 167.6% 5.0% nm 1.4pt 0.6pt 0.3pt 0.2pt 2.6% 0.8% 13.7% 6.8% 16.0% 7.3% 61.5% 16.7% 5.0% 18.4% 6.4% -69.1% 13.8% 146.8% 146.8% 0.0% 149.0% -68.0% -127.7% 19.6% nm 1.5pt 1.0pt 0.8pt 0.6pt
What to focus on: Domestic capacity outlook Our investment thesis on the stock is that the capacity additions we saw in 2012 will not be repeated, so the yield environment should become more favourable throughout the year. This expectation is supported by the recent trends observed in the CAPA data. Given the significant level of operating leverage in the Qantas model, an up-tick in yields would have a substantially positive impact on profits. Any confirmation of these trends from management should be well received by the market. Qantas International Short-term capacity fluctuations aside, the core investment case for Qantas is successfully returning the International business to profitability. To achieve this, various cost-cutting initiatives are under way. Incremental progress in these areas would provide the market with further confidence that these targets can be realised. Further discussion around the Emirates alliance would also be taken positively, in our view.
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Closing price (A$) Valuation metrics Multiples Enterprise value (A$m) EV/Sales (x) EV/EBITDA (x) EV/EBIT (x) PE (pre-goodwill) (x) At target price EV/EBITDA (x) PE (pre-goodwill) (x) Per share data No. shares No. shares (FD) EPS (reported) EPS (normalised) (c) Growth ratios Sales growth EBITDA growth EBITA growth EBIT PBT NPAT EPS (normalised) Divisional EBIT Qantas Jetstar Frequent Flyer Freight Divisional EBIT Growth Qantas Jetstar Frequent Flyer Freight Operating performance Asset turnover (%) EBITDA margin (%) EBIT margin (%) Net profit margin (%) Return on net assets (%) Return on average equity (%) ROIC (%) Debt Metrics Net debt - inc off b/s (A$m) Net debt/equity (%) Net debt/Net debt+equity (%) Net Debt/EBITDA Net interest/EBIT cover (x)
1.50
1.81
2012A 3401.7 0.2 2.1 12.8 50.4 2012A 2.5 60.9 2012A 2265.1 2265.1 -10.8 3.0 2012A 6% -13% -53% 38% 46% 66% n/m 2012A -21.0 203.0 231.0 45.0 2012A n/m 20% -32% -27% 2012A 74% 10.5% 4.3% 0.4% 1.3% 1.1% 1.7% 2012A 6995.0 119% 54% 4.2 1.6
2012A 3345.0 0.2 1.7 7.8 19.9 2013F 2.1 24.0 2013F 2226.7 2226.7 3.0 7.5 2013F 3% 16% 55% -59% -83% -84% 153% 2013F -24.5 213.2 245.7 53.3 2013F n/m 5% 6% 18% 2013F 77% 11.9% 1.7% 1.0% 2.0% 2.8% 2.6% 2013F 6733.3 107% 52% 3.5 2.2
2012A 3230.6 0.2 1.5 4.9 9.1 2014F 1.8 11.0 2014F 2149.7 2149.7 16.5 16.5 2014F 3% 16% 44% 61% 147% 149% 118% 2014F 267.0 245.1 258.0 55.2 2014F n/m 15% 5% 4% 2014F 77% 13.4% 2.7% 2.1% 3.1% 5.4% 4.1% 2014F 7299.1 108% 52% 3.3 4.0
2012A 10317.3 0.6 4.1 11.5 6.1 2015F 4.3 7.4 2015F 2076.5 2076.5 24.5 24.5 2015F 6% 14% 32% 54% 110% 111% 49% 2015F 422.0 269.6 270.9 57.2 2015F 58% 10% 5% 4% 2015F 80% 14.4% 4.0% 2.9% 4.1% 7.3% 5.3% 2015F 7853.9 109% 52% 3.1 4.8
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(x)
Title: Source:
Please fill in the values above to have them entered in your rep
0.5 0.0
03 04 05 06 07 08 09 10 11 12
SOURCE: DATASTREAM
2013 outlook capacity, capacity, capacity Similar to Qantas, we think the greatest swing factor in Virgins earnings will be yield performance, which will be driven most significantly by the level of capacity in the market. In 2012, an undisciplined approach towards capacity additions on the key domestic routes resulted in yield erosion, to the detriment of profitability. We do not expect to see such a stark increase in capacity in 2013 but rather anticipate a more moderate low-single-digit increase. This relative decline in capacity increases in 2013 is supported by the CAPA data and should translate into a better yield profile than last year. As mining investment peaks in mid-2013 and the RBA continues to ease monetary policy, the stage is nicely set for growth in consumption, which should lead to an increase in demand. This, coupled with benign capacity-growth environment, should lead to strong margin expansion, especially given the high level of operating leverage inherent in airlines operating models. In addition, with the US economy continuing along its path to recovery, albeit more slowly than usual, the political environment in Europe becoming more accepting of the present situation and an improving growth trajectory in China, the outlook for the global economy is becoming more positive (from a very depressed base). An improvement in the global economic outlook should be positive for high-beta stocks like Virgin. Target price remains at A$0.44 Our 12-month target price remains at A$0.44, based on a 9.5x FY14F P/E multiple, the average one-year-forward P/E multiple that VAH has traded on over the past three years.
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1H preview Reporting date 26 February Guidance Management has provided no official guidance for FY13, but it has indicated that it expects underlying earnings growth from FY12 levels. Consensus Bloomberg consensus FY13F PBT is A$121m, 14% above our forecast of A$106m.
With VAH coming off a strong 1H in the prior period (benefiting from Tigers grounding and QANs industrial relations issues) and current yields under pressure from capacity increases, we expect 1H13 PBT to be 13% lower than 1H12. However, we still expect the full-year result to be ahead of FY12 as the 2H benefits from lower earnings seasonality impacts due to growing (and more stable) earnings contributions from corporate travel. We expect Domestic to account for most of the decline in earnings versus the prior period, as it was the business segment directly benefiting from competitors issues in 1H12. What to focus on Corporate customer growth VAH is focused on increasing its exposure to the high-yield, high-margin corporate market. Having achieved its target of 20% of customers a year ahead of target, should the company provide a new ambitious target it may give the share price a boost on the day. However, the low-hanging fruit in this initiative has already been completed (cabin and entertainment upgrade completed), so we expect only incremental shifts in the product mix from here. Costs Naturally VAH has had to invest in its offering in order to attract the corporate market. While yield growth from the changing customer mix has been strong, well be keen to see if VAH can maintain a yield-growth advantage over its unit-cost growth.
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Closing price (A$) Valuation metrics Multiples Enterprise value (A$m) EV/Sales (x) EV/EBITDA (x) EV/EBIT (x) PE (pre-goodwill) (x) At target price EV/EBITDA (x) PE (pre-goodwill) (x) Per share data No. shares No. shares (FD) EPS (reported) EPS (normalised) (c) Dividend per share (c) Dividend payout ratio (%) Dividend yield (%) Growth ratios Sales growth EBITDA growth EBITA growth
3.67
4.00
2012A 8145.4 2.1 23.0 66.8 131.8 2012A 25.0 131.8 2012A 2209.6 2209.6 1.0 2.8 0.0 0% 0% 2012A 20% 77% n/m
2013F 11287.5 2.6 28.0 74.2 108.9 2013F 29.8 108.9 2013F 2209.6 2209.6 3.4 3.4 0.0 0% 0% 2013F 10% 14% 25%
2014F 11422.7 2.5 23.4 49.7 77.6 2014F 24.9 77.6 2014F 2209.6 2209.6 4.7 4.7 0.0 0% 0% 2014F 4% 21% 51%
2015F 11476.4 2.5 20.9 40.7 54.3 2015F 22.2 54.3 2015F 2209.6 2209.6 6.8 6.8 0.0 0% 0% 2015F 4% 12% 23%
Operating performance Asset turnover (%) EBITDA margin (%) EBIT margin (%) Net profit margin (%) Return on net assets (%) Net debt (A$m) Net debt/equity (%) Net debt/(ND+equity) (%) Net interest/EBIT cover (x) ROIC (%) ROCE (%) Return on average equity (%) Divisional Revenue Domestic International Expenses Breakdown Aircraft operating costs Airport Charges Maintenance Commissions and other A&P Fuel and oil Labour and staff Other expenses Total
2012A 1542% 9% -1% 2% 2% 871.5 22% 48% 3.1 7% 6% 7% 2012A 2864.1 1052.3 2012A 217.1 669.0 186.2 275.7 1043.8 841.4 331.6 3564.8
2013F 869% 9% 3% 2% 2% 856.5 20% 46% 3.3 7% 7% 7% 2013F 3141.2 1150.5 2013F 236.7 722.2 204.9 300.5 1141.8 899.4 386.0 3891.6
2014F 869% 11% 4% 2% 2% 796.1 18% 42% 2.8 9% 9% 9% 2014F 3284.0 1196.9 2014F 246.2 751.3 215.3 318.8 1130.3 935.7 397.6 3995.3
2015F 869% 12% 5% 3% 3% 683.2 15% 35% 4.1 12% 11% 12% 2015F 3416.7 1245.1 2015F 254.6 776.9 222.7 329.7 1167.2 957.9 407.1 4116.1
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United States: This research report is distributed in the United States of America by CIMB Securities (USA) Inc, a U.S.-registered broker-dealer and a related company of CIMB Research Pte Ltd, CIMB Investment Bank Berhad, PT CIMB Securities Indonesia, CIMB Securities (Thailand) Co. Ltd, CIMB Securities Limited, and is distributed solely to persons who qualify as "U.S. Institutional Investors" as defined in Rule 15a-6 under the Securities and Exchange Act of 1934. This communication is only for Institutional Investors whose ordinary business activities involve investing in shares, bonds and associated securities and/or derivative securities and who have professional experience in such investments. Any person who
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is not a U.S. Institutional Investor or Major Institutional Investor must not rely on this communication. The delivery of this research report to any person in the United States of America is not a recommendation to effect any transactions in the securities discussed herein, or an endorsement of any opinion expressed herein. CIMB Securities (USA) Inc, is a FINRA/SIPC member and takes responsibility for the content of this report. For further information or to place an order in any of the above-mentioned securities please contact a registered representative of CIMB Securities (USA) Inc. Other jurisdictions: In any other jurisdictions, except if otherwise restricted by laws or regulations, this report is only for distribution to professional, institutional or sophisticated investors as defined in the laws and regulations of such jurisdictions.
Distribution of stock ratings and investment banking clients for quarter ended on 31 December 2012 821 companies under coverage Rating Distribution (%) Outperform/Buy/Trading Buy Neutral Underperform/Sell/Trading Sell 54.5% 34.1% 11.5% Investment Banking clients (%) 9.0% 3.4% 8.6%
Recommendation Framework #1 *
Stock
OUTPERFORM: The stock's total return is expected to exceed a benchmark's total return by 5% or more over the next 12 months. NEUTRAL: The stock's total return is expected to be within +/-5% of a benchmark's total return. UNDERPERFORM: The stock's total return is expected to be below a benchmark's total return by 5% or more over the next 12 months. TRADING BUY: The stock's total return is expected to exceed a benchmark's total return by 5% or more over the next 3 months. TRADING SELL: The stock's total return is expected to be below a benchmark's total return by 5% or more over the next 3 months. relevant relevant relevant relevant relevant
Sector
OVERWEIGHT: The industry, as defined by the analyst's coverage universe, is expected to outperform the relevant primary market index over the next 12 months. NEUTRAL: The industry, as defined by the analyst's coverage universe, is expected to perform in line with the relevant primary market index over the next 12 months. UNDERWEIGHT: The industry, as defined by the analyst's coverage universe, is expected to underperform the relevant primary market index over the next 12 months. TRADING BUY: The industry, as defined by the analyst's coverage universe, is expected to outperform the relevant primary market index over the next 3 months. TRADING SELL: The industry, as defined by the analyst's coverage universe, is expected to underperform the relevant primary market index over the next 3 months.
* This framework only applies to stocks listed on the Singapore Stock Exchange, Bursa Malaysia, Stock Exchange of Thailand, Jakarta Stock Exchange, Australian Securities Exchange, Korea Exchange, Taiwan Stock Exchange and National Stock Exchange of India/Bombay Stock Exchange. Occasionally, it is permitted for the total expected returns to be temporarily outside the prescribed ranges due to extreme market volatility or other justifiable company or industry-specific reasons. CIMB Research Pte Ltd (Co. Reg. No. 198701620M)
Recommendation Framework #2 **
Stock
OUTPERFORM: Expected positive total returns of 10% or more over the next 12 months. NEUTRAL: Expected total returns of between -10% and +10% over the next 12 months.
Sector
OVERWEIGHT: The industry, as defined by the analyst's coverage universe, has a high number of stocks that are expected to have total returns of +10% or better over the next 12 months. NEUTRAL: The industry, as defined by the analyst's coverage universe, has either (i) an equal number of stocks that are expected to have total returns of +10% (or better) or -10% (or worse), or (ii) stocks that are predominantly expected to have total returns that will range from +10% to -10%; both over the next 12 months. UNDERWEIGHT: The industry, as defined by the analyst's coverage universe, has a high number of stocks that are expected to have total returns of -10% or worse over the next 12 months. TRADING BUY: The industry, as defined by the analyst's coverage universe, has a high number of stocks that are expected to have total returns of +10% or better over the next 3 months. TRADING SELL: The industry, as defined by the analyst's coverage universe, has a high number of stocks that are expected to have total returns of -10% or worse over the next 3 months.
UNDERPERFORM: Expected negative total returns of 10% or more over the next 12 months. TRADING BUY: Expected positive total returns of 10% or more over the next 3 months. TRADING SELL: Expected negative total returns of 10% or more over the next 3 months.
** This framework only applies to stocks listed on the Hong Kong Stock Exchange and China listings on the Singapore Stock Exchange. Occasionally, it is permitted for the total expected returns to be temporarily outside the prescribed ranges due to extreme market volatility or other justifiable company or industry-specific reasons.
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Corporate Governance Report of Thai Listed Companies (CGR). CG Rating by the Thai Institute of Directors Association (IOD) in 2011.
AAV not available, ADVANC - Excellent, AMATA - Very Good, AOT - Excellent, AP - Very Good, BANPU - Excellent , BAY - Excellent , BBL - Excellent, BCH - Good, BEC - Very Good, BECL - Very Good, BGH - not available, BH - Very Good, BIGC - Very Good, BTS - Very Good, CCET - Good, CK - Very Good, CPALL - Very Good, CPF - Very Good, CPN Excellent, DELTA - Very Good, DTAC - Very Good, GLOBAL - not available, GLOW - Very Good, GRAMMY Excellent, HANA - Very Good, HEMRAJ - Excellent, HMPRO - Very Good, INTUCH Very Good, ITD - Good, IVL - Very Good, JAS Very Good, KAMART not available, KBANK - Excellent, KK Excellent, KTB - Excellent, LH - Very Good, LPN - Excellent, MAJOR - Very Good, MCOT - Excellent, MINT - Very Good, PS - Excellent, PSL - Excellent, PTT - Excellent, PTTGC - not available, PTTEP - Excellent, QH - Excellent, RATCH - Excellent, ROBINS - Excellent, RS Excellent, SC Excellent, SCB - Excellent, SCC - Excellent, SCCC - Very Good, SIRI - Very Good, SPALI - Very Good, STA - Very Good, STEC - Very Good, TCAP - Very Good, THAI - Very Good, THCOM Very Good, TICON Good, TISCO - Excellent, TMB - Excellent, TOP - Excellent, TRUE - Very Good, TUF - Very Good, WORK Good.
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