1. No category

PAKISTAN
ENGRO PA
Price (at 13:41, 08 Jan 2015 GMT)
Valuation
Outperform
Rs248.63
Rs
291.60
Engro Corporation
Gaining Momentum
Event
- Sum of Parts
12-month target
Rs
291.60
Upside/Downside
%
+17.3
12-month TSR
%
+18.9
Volatility Index
Medium
GICS sector
Materials
Market cap
Rsm
130,229
Market cap
US$m
1,293
30-day avg turnover
US$m
10.1
Number shares on issue
m
523.8
Revenue
EBIT
EBIT growth
Reported profit
EPS rep
EPS rep growth
PER rep
Total DPS
Total div yield
ROA
ROE
EV/EBITDA
Net debt/equity
P/BV
2013A 2014E 2015E 2016E
bn
bn
%
bn
Rs
%
x
Rs
%
%
%
x
%
x
155.4
23.1
54.3
8.2
15.62
513.8
15.9
0.00
0.0
11.6
18.3
6.2
138.4
2.6
(ENGRO) amid the improving dynamics of its fertilizer and food businesses.
Further, curtailed losses of its subsidiary Engro Eximp and commencement of
Engro Elengy will augment CY15 earnings, in our view. Extended flows of
diverted gas from Guddu beyond December 2015, and material development
on Sindh Engro Coal Mining Corporation (SECMC) could further improve
stock attractiveness. We reiterate our Outperform rating and raise our target
price from Rs152.70 to Rs291.60.
Impact
Investment fundamentals
Year end 31 Dec
 We believe the coming months look promising for Engro Corporation
171.4
19.1
-17.2
6.5
12.49
-20.0
19.9
1.00
0.4
9.0
12.3
7.1
93.6
2.4
185.1
30.9
62.0
16.6
31.68
153.6
7.8
4.00
1.6
14.6
26.6
4.9
46.7
1.9
198.5
32.9
6.4
18.8
35.82
13.1
6.9
8.00
3.2
15.8
24.4
4.7
24.4
1.5
ENGRO PA rel Pakistan KSE 100 Share
performance, & rec history
 Improved gas scenario: The Economic Coordination Committee (ECC) has
extended Guddu power plant supply to Engro Fertilizer (EFERT) until
December 2015 to reciprocate for its commitment to install a gas booster
compressor for the 747MW Guddu Power Plant (GENCO-II). We believe this
will allow the company to operate both plants at ~75% capacity in CY15 vs
our estimate of 53%. This should lead to incremental earnings of Rs4.5/sh
after incorporating the cost of installing gas compressors (US$15.36m), in
addition to the impact of concessionary gas and deleveraging.
 EFOODS recuperating from lean patch: Engro Foods’ (EFOODS) focus on
resolution of supply chain issues is likely to rejuvenate volumes. Improving
volumes along with reduction in fuel and distribution cost (on the back of
plummeting oil prices) would likely to improve the margins in CY15. Further
strength to our case comes from registration of “Omung” as a ‘Dairy Drink’ at
Federal level that may resolve its issue with the Punjab Food Authority (PFA).
 Volte-face on Eximp business: Despite healthy trading margins in its DAP
Note: Recommendation timeline - if not a continuous line, then there was no
Macquarie coverage at the time or there was an embargo period.
Source: FactSet, Macquarie Research, January 2015
(all figures in PKR unless noted)
segment on the back of timely purchases, the company incurred a Rs5.14/sh
loss during the first nine months. As per latest financials, the substantial loss
mainly comes from its rice business as a result of higher inventory of rice
paddy procured at elevated prices. However, we estimate this segment will be
back in the black in CY15, due to lower inventory levels of both rice and DAP.
Earnings and target price revision
 We cut our reported EPS by 48% for CY14, given: 1) decline in margins of
EFOODS along with the loss on sale of the North American business; and,
2) the loss at EXIMP. However, we lift our CY15 estimates by 31%, on the
back of improved gas scenario along with improving margins of food
business. Subsequently, we increase our TP to Rs291.6/sh from Rs152.7.
Analyst(s)
James Hubbard, CFA
+852 3922 1226
james.hubbard@macquarie.com
Price catalyst
 12-month price target: Rs291.60 based on a Sum of Parts methodology.
Foundation Securities
Nauman Khan
+92 21 3561-2290-94
nauman.khan@fs.com.pk
Ext 338
Mohammad Awais Ashraf
+92 21 3561-2290-94
m.awais@fs.com.pk
Ext 339
\
9 January 2015
 Catalyst: 1) Further extension in flows from Guddu, 2) recovery in Omung
sales and 3) materialization of SECMC and Engro Elengy terminal.
Action and recommendation
 We reiterate our Outperform stance, given positive earnings outlook on the
back of continued flows from Guddu and improved EFOODS margins.
Macquarie Capital Securities Limited
Please refer to page 4 for important disclosures and analyst certification, or on our website
www.macquarie.com/research/disclosures.
Macquarie Research
Engro Corporation
Macquarie Quant View
190/254
Global Alpha Model
Sector Rank
% of BUY recommendations
Number of Price Target downgrades
Number of Price Target upgrades
Attractive
Displays where the
company’s ranked based
on the fundamental
consensus Price Target
and Macquarie’s
Quantitative Alpha model.
The rankings are
displayed relative to the
sector and country.
Fundamentals
The quant model currently holds a reasonably negative view on Engro
Corporation. The strongest style exposure is Price Momentum, indicating this
stock has had strong medium to long term returns which often persist into the
future. The weakest style exposure is Profitability, indicating this stock is not
efficiently converting its investments to earnings as proxied by ratios such as
ROE, ROA etc.
Quant
Rank within Country
100% (6/6)
1
1
Rank within Sector
Macquarie Alpha Model ranking
Factors driving the Alpha Model
A list of comparable companies and their Macquarie Alpha model score
(higher is better).
For the comparable firms this chart shows the key underlying styles and their
contribution to the current overall Alpha score.
Lucky Cement
Lucky Cement
1.8
Fatima Fertilizer
Fatima Fertilizer
0.9
Engro Corporation
Engro Corporation
-0.8
-3.0
-2.0
-1.0
0.0
1.0
2.0
3.0
-100%
-80%
Valuations
-60%
Growth
-40%
-20%
Profitability
0%
20%
Earnings
Momentum
40%
60%
Price
Momentum
80%
100%
Quality
Macquarie Earnings Sentiment Indicator
Drivers of Stock Return
The Macquarie Sentiment Indicator is an enhanced earnings revisions
signal that favours analysts who have more timely and higher conviction
revisions. Current score shown below.
Breakdown of 1 year total return (local currency) into returns from dividends, changes
in forward earnings estimates and the resulting change in earnings multiple.
Lucky Cement
Lucky Cement
1.3
Fatima Fertilizer
Fatima Fertilizer
0.4
Engro Corporation
Engro Corporation
0.0
-3.0
-2.0
-1.0
0.0
1.0
2.0
3.0
-70%
-50%
Dividend Return
-30%
-10%
Multiple Return
10%
30%
Earnings Outlook
50%
What drove this Company in the last 5 years
How it looks on the Alpha model
Which factor score has had the greatest correlation with the company’s
returns over the last 5 years.
A more granular view of the underlying style scores that drive the alpha (higher is
better) and the percentile rank relative to the sector and country
⇐ Negatives Positives ⇒
Price to Book NTM
BPS Growth FY1
28%
Price to Book FY1
24%
Price to Sales NTM
21%
Merton Score
-15%
Profit Margin NTM
-15%
Profit Margin FY1
-17%
EBITDA Revisions 3 Month
-40%
Normalized
Score
31%
-21%
-20%
0%
20%
40%
Alpha Model Score
Valuation
Growth
Profitability
Earnings Momentum
Price Momentum
Quality
Capital & Funding
Liquidity
Risk
Technicals & Trading
0
Percentile relative
to sector(/254)
70%
1Yr Total Return
Percentile relative
to country(/5)
-0.77
-0.70
0.97
-0.86
-0.56
1.30
-0.56
0.23
-0.13
-1.52
-0.48
0
0
1
50
100 0
50
1
100
For more details on the Macquarie Alpha model or for more customised analysis and screens, please contact the Macquarie
Global Quantitative/Custom Products Group (cpg@macquarie.com)
9 January 2015
2
Macquarie Research
Engro Corporation
Engro Corporation (ENGRO PA, Outperform, Target Price: Rs291.60)
Interim Results
1H/14A
2H/14E
1H/15E
2H/15E
Profit & Loss
2013A
2014E
2015E
2016E
Revenue
Gross Profit
Cost of Goods Sold
EBITDA
Depreciation
Amortisation of Goodwill
Other Amortisation
EBIT
Net Interest Income
Associates
Exceptionals
Forex Gains / Losses
Other Pre-Tax Income
Pre-Tax Profit
Tax Expense
Net Profit
Minority Interests
m
m
m
m
m
m
m
m
m
m
m
m
m
m
m
m
m
77,541
16,770
60,771
12,176
3,496
0
0
8,680
-3,690
0
0
0
362
5,351
-2,188
3,163
-480
93,864
18,356
75,508
15,662
5,243
0
0
10,419
-3,063
0
0
0
604
7,960
-2,779
5,181
-1,321
74,060
20,181
53,879
15,955
3,579
0
0
12,376
-1,518
0
0
0
469
11,328
-3,430
7,898
-1,402
111,090
30,272
80,818
23,932
5,368
0
0
18,564
-2,277
0
0
0
525
16,813
-5,145
11,668
-1,569
Revenue
Gross Profit
Cost of Goods Sold
EBITDA
Depreciation
Amortisation of Goodwill
Other Amortisation
EBIT
Net Interest Income
Associates
Exceptionals
Forex Gains / Losses
Other Pre-Tax Income
Pre-Tax Profit
Tax Expense
Net Profit
Minority Interests
m
m
m
m
m
m
m
m
m
m
m
m
m
m
m
m
m
155,360
40,597
114,763
31,633
8,565
0
0
23,068
-10,415
0
0
0
610
13,263
-4,573
8,690
-507
171,405
35,125
136,280
27,838
8,739
0
0
19,099
-6,753
0
0
0
966
13,312
-4,967
8,344
-1,800
185,150
50,453
134,697
39,887
8,947
0
0
30,940
-3,794
0
0
0
995
28,140
-8,575
19,566
-2,971
198,503
51,555
146,948
42,077
9,160
0
0
32,917
-2,714
0
0
0
1,025
31,228
-9,114
22,113
-3,350
Reported Earnings
Adjusted Earnings
m
m
2,684
2,684
3,860
3,860
6,496
6,496
10,099
10,099
Reported Earnings
Adjusted Earnings
m
m
8,183
8,183
6,544
6,544
16,595
16,595
18,763
18,763
EPS (rep)
EPS (adj)
EPS Growth yoy (adj)
%
5.12
5.12
-22.0
7.37
7.37
-18.6
12.40
12.40
142.1
19.28
19.28
161.6
EPS (rep)
EPS (adj)
EPS Growth (adj)
PE (rep)
PE (adj)
%
x
x
15.62
15.62
513.8
15.9
15.9
12.49
12.49
-20.0
19.9
19.9
31.68
31.68
153.6
7.8
7.8
35.82
35.82
13.1
6.9
6.9
EBITDA Margin
EBIT Margin
Earnings Split
Revenue Growth
EBIT Growth
%
%
%
%
%
15.7
11.2
41.0
16.0
-17.5
16.7
11.1
59.0
6.1
-16.9
21.5
16.7
39.1
-4.5
42.6
21.5
16.7
60.9
18.4
78.2
Total DPS
Total Div Yield
Basic Shares Outstanding
Diluted Shares Outstanding
%
m
m
0.00
0.0
524
524
1.00
0.4
524
524
4.00
1.6
524
524
8.00
3.2
524
524
2013A
2014E
2015E
2016E
2013A
2014E
2015E
2016E
31,633
-4,573
9,802
0
-9,913
26,950
0
-8,413
0
-15,610
-24,023
0
0
-7,066
6,375
-691
27,838
-4,967
6,777
0
-5,787
23,860
0
-10,134
0
-758
-10,893
0
0
-11,113
-210
-11,323
39,887
-8,575
2,455
0
-2,800
30,967
0
-1,248
0
-1,440
-2,688
-524
0
-15,184
-15,373
-31,080
42,077
-9,114
405
0
-1,689
31,679
0
-2,629
0
-7,546
-10,175
-2,095
0
-15,594
-1,889
-19,578
Profit and Loss Ratios
Revenue Growth
EBITDA Growth
EBIT Growth
Gross Profit Margin
EBITDA Margin
EBIT Margin
Net Profit Margin
Payout Ratio
EV/EBITDA
EV/EBIT
%
%
%
%
%
%
%
%
x
x
24.1
36.3
54.3
26.1
20.4
14.8
5.3
0.0
6.2
8.6
10.3
-12.0
-17.2
20.5
16.2
11.1
3.8
8.0
7.1
10.3
8.0
43.3
62.0
27.2
21.5
16.7
9.0
12.6
4.9
6.4
7.2
5.5
6.4
26.0
21.2
16.6
9.5
22.3
4.7
6.0
Balance Sheet Ratios
ROE
ROA
ROIC
Net Debt/Equity
Interest Cover
Price/Book
Book Value per Share
%
%
%
%
x
x
18.3
11.6
12.8
138.4
2.2
2.6
97.1
12.3
9.0
8.9
93.6
2.8
2.4
105.2
26.6
14.6
17.3
46.7
8.2
1.9
132.7
24.4
15.8
19.4
24.4
12.1
1.5
160.5
Cashflow Analysis
EBITDA
Tax Paid
Chgs in Working Cap
Net Interest Paid
Other
Operating Cashflow
Acquisitions
Capex
Asset Sales
Other
Investing Cashflow
Dividend (Ordinary)
Equity Raised
Debt Movements
Other
Financing Cashflow
m
m
m
m
m
m
m
m
m
m
m
m
m
m
m
m
Net Chg in Cash/Debt
m
2,236
1,645
-2,801
1,926
Free Cashflow
m
18,536
13,726
29,720
29,050
2013A
2014E
2015E
2016E
6,899
3,033
27,738
21,674
132,686
808
14,069
206,907
40,129
6,380
78,321
0
25,874
150,704
32,466
5,319
18,418
56,203
206,907
8,545
5,429
31,526
21,740
134,172
316
16,172
217,899
53,205
7,590
61,166
0
31,618
153,579
38,486
9,222
16,613
64,321
217,899
5,745
3,615
32,934
23,353
126,659
316
12,411
205,033
53,830
8,000
35,894
0
25,598
123,322
52,986
12,193
16,532
81,711
205,033
7,671
3,876
35,309
31,057
120,250
316
12,692
211,170
57,712
8,000
23,935
0
21,889
111,536
67,559
15,543
16,532
99,634
211,170
Balance Sheet
Cash
Receivables
Inventories
Investments
Fixed Assets
Intangibles
Other Assets
Total Assets
Payables
Short Term Debt
Long Term Debt
Provisions
Other Liabilities
Total Liabilities
Shareholders' Funds
Minority Interests
Other
Total S/H Equity
Total Liab & S/H Funds
m
m
m
m
m
m
m
m
m
m
m
m
m
m
m
m
m
m
m
All figures in PKR unless noted.
Source: Company data, Macquarie Research, January 2015
9 January 2015
3
Macquarie Research
Engro Corporation
Important disclosures:
Recommendation definitions
Volatility index definition*
Financial definitions
Macquarie - Australia/New Zealand
Outperform – return >3% in excess of benchmark return
Neutral – return within 3% of benchmark return
Underperform – return >3% below benchmark return
This is calculated from the volatility of historical
price movements.
All "Adjusted" data items have had the following
adjustments made:
Added back: goodwill amortisation, provision for
catastrophe reserves, IFRS derivatives & hedging,
IFRS impairments & IFRS interest expense
Excluded: non recurring items, asset revals, property
revals, appraisal value uplift, preference dividends &
minority interests
Benchmark return is determined by long term nominal
GDP growth plus 12 month forward market dividend
yield
Macquarie – Asia/Europe
Outperform – expected return >+10%
Neutral – expected return from -10% to +10%
Underperform – expected return <-10%
Macquarie First South - South Africa
Outperform – expected return >+10%
Neutral – expected return from -10% to +10%
Underperform – expected return <-10%
Macquarie - Canada
Outperform – return >5% in excess of benchmark return
Neutral – return within 5% of benchmark return
Underperform – return >5% below benchmark return
Macquarie - USA
Outperform (Buy) – return >5% in excess of Russell
3000 index return
Neutral (Hold) – return within 5% of Russell 3000 index
return
Underperform (Sell)– return >5% below Russell 3000
index return
Very high–highest risk – Stock should be
expected to move up or down 60–100% in a year
– investors should be aware this stock is highly
speculative.
High – stock should be expected to move up or
down at least 40–60% in a year – investors should
be aware this stock could be speculative.
Medium – stock should be expected to move up
or down at least 30–40% in a year.
Low–medium – stock should be expected to
move up or down at least 25–30% in a year.
Low – stock should be expected to move up or
down at least 15–25% in a year.
* Applicable to Asia/Australian/NZ/Canada stocks
only
EPS = adjusted net profit / efpowa*
ROA = adjusted ebit / average total assets
ROA Banks/Insurance = adjusted net profit /average
total assets
ROE = adjusted net profit / average shareholders funds
Gross cashflow = adjusted net profit + depreciation
*equivalent fully paid ordinary weighted average
number of shares
All Reported numbers for Australian/NZ listed stocks
are modelled under IFRS (International Financial
Reporting Standards).
Recommendations – 12 months
Note: Quant recommendations may differ from
Fundamental Analyst recommendations
Recommendation proportions – For quarter ending 31 December 2014
Outperform
Neutral
Underperform
AU/NZ
51.80%
31.80%
16.39%
Asia
58.06%
27.37%
14.57%
RSA
45.07%
30.99%
23.94%
USA
44.42%
50.10%
5.48%
CA
60.54%
35.37%
4.08%
EUR
46.81% (for US coverage by MCUSA, 5.29% of stocks followed are investment banking clients)
33.51% (for US coverage by MCUSA, 3.08% of stocks followed are investment banking clients)
19.68% (for US coverage by MCUSA, 0.44% of stocks followed are investment banking clients)
ENGRO PA vs Pakistan KSE 100 Share, & rec history
(all figures in PKR currency unless noted)
Note: Recommendation timeline – if not a continuous line, then there was no Macquarie coverage at the time or there was an embargo period.
Source: FactSet, Macquarie Research, January 2015
12-month target price methodology
ENGRO PA: Rs291.60 based on a Sum of Parts methodology
Company-specific disclosures:
Important disclosure information regarding the subject companies covered in this report is available at www.macquarie.com/disclosures.
Date
13-Aug-2012
Stock Code (BBG code)
ENGRO PA
Recommendation
Outperform
Target Price
Rs152.70
Target price risk disclosures:
ENGRO PA: Any inability to compete successfully in their markets may harm the business. This could be a result of many factors which may include
geographic mix and introduction of improved products or service offerings by competitors. The results of operations may be materially affected by global
economic conditions generally, including conditions in financial markets. The company is exposed to market risks, such as changes in interest rates,
foreign exchange rates and input prices. From time to time, the company will enter into transactions, including transactions in derivative instruments, to
manage certain of these exposures.
Analyst certification:
The views expressed in this research accurately reflect the personal views of the Macquarie analyst(s) and Foundation Securities analyst(s) about the
subject securities or issuers and no part of the compensation of the analyst(s) was, is, or will be directly or indirectly related to the inclusion of specific
recommendations or views expressed by the analyst(s) in this research. The Macquarie analyst principally responsible for the preparation of this
research receives compensation based on overall revenues of Macquarie Group Ltd ABN 94 122 169 279 (AFSLNo. 318062) (MGL) and its related
entities (the Macquarie Group) and has taken reasonable care to achieve and maintain independence and objectivity in making any recommendations.
General disclaimers:
Macquarie Securities (Australia) Ltd; Macquarie Capital (Europe) Ltd; Macquarie Capital Markets Canada Ltd; Macquarie Capital Markets North America
Ltd; Macquarie Capital (USA) Inc; Macquarie Capital Securities Ltd and its Taiwan branch; Macquarie Capital Securities (Singapore) Pte Ltd;
Macquarie Securities (NZ) Ltd; Macquarie First South Securities (Pty) Limited; Macquarie Capital Securities (India) Pvt Ltd; Macquarie Capital Securities
(Malaysia) Sdn Bhd; Macquarie Securities Korea Limited and Macquarie Securities (Thailand) Ltd are not authorized deposit-taking institutions for the
purposes of the Banking Act 1959 (Commonwealth of Australia), and their obligations do not represent deposits or other liabilities of Macquarie Bank
Limited ABN 46 008 583 542 (MBL) or MGL. MBL does not guarantee or otherwise provide assurance in respect of the obligations of any of the above
mentioned entities. MGL provides a guarantee to the Monetary Authority of Singapore in respect of the obligations and liabilities of Macquarie Capital
Securities (Singapore) Pte Ltd for up to SGD 35 million. This research has been prepared for the general use of the wholesale clients of the Macquarie
9 January 2015
4
Macquarie Research
Engro Corporation
Group and must not be copied, either in whole or in part, or distributed to any other person. If you are not the intended recipient you must not use or
disclose the information in this research in any way. If you received it in error, please tell us immediately by return e-mail and delete the document. We
do not guarantee the integrity of any e-mails or attached files and are not responsible for any changes made to them by any other person. MGL has
established and implemented a conflicts policy at group level (which may be revised and updated from time to time) (the "Conflicts Policy") pursuant to
regulatory requirements (including the FCA Rules) which sets out how we must seek to identify and manage all material conflicts of interest. Nothing in
this research shall be construed as a solicitation to buy or sell any security or product, or to engage in or refrain from engaging in any transaction. In
preparing this research, we did not take into account your investment objectives, financial situation or particular needs. Macquarie salespeople, traders
and other professionals may provide oral or written market commentary or trading strategies to our clients that reflect opinions which are contrary to the
opinions expressed in this research. Macquarie Research produces a variety of research products including, but not limited to, fundamental analysis,
macro-economic analysis, quantitative analysis, and trade ideas. Recommendations contained in one type of research product may differ from
recommendations contained in other types of research, whether as a result of differing time horizons, methodologies, or otherwise. Before making an
investment decision on the basis of this research, you need to consider, with or without the assistance of an adviser, whether the advice is appropriate
in light of your particular investment needs, objectives and financial circumstances. There are risks involved in securities trading. The price of securities
can and does fluctuate, and an individual security may even become valueless. International investors are reminded of the additional risks inherent in
international investments, such as currency fluctuations and international stock market or economic conditions, which may adversely affect the value of
the investment. This research is based on information obtained from sources believed to be reliable but we do not make any representation or warranty
that it is accurate, complete or up to date. We accept no obligation to correct or update the information or opinions in it. Opinions expressed are subject
to change without notice. No member of the Macquarie Group accepts any liability whatsoever for any direct, indirect, consequential or other loss arising
from any use of this research and/or further communication in relation to this research. Clients should contact analysts at, and execute transactions
through, a Macquarie Group entity in their home jurisdiction unless governing law permits otherwise. The date and timestamp for above share price and
market cap is the closed price of the price date. #CLOSE is the final price at which the security is traded in the relevant exchange on the date indicated.
Country-specific disclaimers:
Australia: In Australia, research is issued and distributed by Macquarie Securities (Australia) Ltd (AFSL No. 238947), a participating organisation of the
Australian Securities Exchange. New Zealand: In New Zealand, research is issued and distributed by Macquarie Securities (NZ) Ltd, a NZX Firm.
Canada: In Canada, research is prepared, approved and distributed by Macquarie Capital Markets Canada Ltd, a participating organisation of the
Toronto Stock Exchange, TSX Venture Exchange & Montréal Exchange. Macquarie Capital Markets North America Ltd., which is a registered brokerdealer and member of FINRA, accepts responsibility for the contents of reports issued by Macquarie Capital Markets Canada Ltd in the United States
and sent to US persons. Any US person wishing to effect transactions in the securities described in the reports issued by Macquarie Capital Markets
Canada Ltd should do so with Macquarie Capital Markets North America Ltd. The Research Distribution Policy of Macquarie Capital Markets Canada
Ltd is to allow all clients that are entitled to have equal access to our research. United Kingdom: In the United Kingdom, research is issued and
distributed by Macquarie Capital (Europe) Ltd, which is authorised and regulated by the Financial Conduct Authority (No. 193905). Germany: In
Germany, this research is issued and/or distributed by Macquarie Capital (Europe) Limited, Niederlassung Deutschland, which is authorised and
regulated by the UK Financial Conduct Authority (No. 193905). and in Germany by BaFin. France: In France, research is issued and distributed by
Macquarie Capital (Europe) Ltd, which is authorised and regulated in the United Kingdom by the Financial Conduct Authority (No. 193905). Hong Kong
& Mainland China: In Hong Kong, research is issued and distributed by Macquarie Capital Securities Ltd, which is licensed and regulated by the
Securities and Futures Commission. In Mainland China, Macquarie Securities (Australia) Limited Shanghai Representative Office only engages in nonbusiness operational activities excluding issuing and distributing research. Only non-A share research is distributed into Mainland China by Macquarie
Capital Securities Ltd. Japan: In Japan, research is issued and distributed by Macquarie Capital Securities (Japan) Limited, a member of the Tokyo
Stock Exchange, Inc. and Osaka Securities Exchange Co. Ltd (Financial Instruments Firm, Kanto Financial Bureau (kin-sho) No. 231, a member of
Japan Securities Dealers Association and The Financial Futures Association of Japan and Japan Investment Advisers Association). India: In India,
research is issued and distributed by Macquarie Capital Securities (India) Pvt. Ltd. (CIN: U65920MH1995PTC090696), formerly known as Macquarie
Capital (India) Pvt. Ltd., 92, Level 9, 2 North Avenue, Maker Maxity, Bandra Kurla Complex, Bandra (East), Mumbai – 400 051, India, which is a SEBI
registered stockbroker having membership with National Stock Exchange of India Limited (INB231246738) and BSE Limited (INB011246734).
Malaysia: In Malaysia, research is issued and distributed by Macquarie Capital Securities (Malaysia) Sdn. Bhd. (Company registration number: 463469W) which is a Participating Organisation of Bursa Malaysia Berhad and a holder of Capital Markets Services License issued by the Securities
Commission. Taiwan: In Taiwan, research is issued and distributed by Macquarie Capital Securities Ltd, Taiwan Branch, which is licensed and
regulated by the Financial Supervisory Commission. No portion of the report may be reproduced or quoted by the press or any other person without
authorisation from Macquarie. Nothing in this research shall be construed as a solicitation to buy or sell any security or product. Research Associate(s)
in this report who are registered as Clerks only assist in the preparation of research and are not engaged in writing the research. Thailand: In Thailand,
research is produced with the contribution of Kasikorn Securities Public Company Limited, issued and distributed by Macquarie Securities (Thailand)
Ltd. Macquarie Securities (Thailand) Ltd. is a licensed securities company that is authorized by the Ministry of Finance, regulated by the Securities and
Exchange Commission of Thailand and is an exchange member of the Stock Exchange of Thailand. Macquarie Securities (Thailand) Limited and
Kasikorn Securities Public Company Limited have entered into an exclusive strategic alliance agreement to broaden and deepen the scope of services
provided to each parties respective clients. The strategic alliance does not constitute a joint venture. The Thai Institute of Directors Association has
disclosed the Corporate Governance Report of Thai Listed Companies made pursuant to the policy of the Securities and Exchange Commission of
Thailand. Macquarie Securities (Thailand) Ltd does not endorse the result of the Corporate Governance Report of Thai Listed Companies but this
Report can be accessed at: http://www.thai-iod.com/en/publications.asp?type=4. South Korea: In South Korea, unless otherwise stated, research is
prepared, issued and distributed by Macquarie Securities Korea Limited, which is regulated by the Financial Supervisory Services. Information on
analysts in MSKL is disclosed at
http://dis.kofia.or.kr/websquare/index.jsp?w2xPath=/wq/fundMgr/DISFundMgrAnalystStut.xml&divisionId=MDIS03002001000000&serviceId=SDIS03002
001000. South Africa: In South Africa, research is issued and distributed by Macquarie First South Securities (Pty) Limited, a member of the JSE
Limited. Singapore: In Singapore, research is issued and distributed by Macquarie Capital Securities (Singapore) Pte Ltd (Company Registration
Number: 198702912C), a Capital Markets Services license holder under the Securities and Futures Act to deal in securities and provide custodial
services in Singapore. Pursuant to the Financial Advisers (Amendment) Regulations 2005, Macquarie Capital Securities (Singapore) Pte Ltd is exempt
from complying with sections 25, 27 and 36 of the Financial Advisers Act. All Singapore-based recipients of research produced by Macquarie Capital
(Europe) Limited, Macquarie Capital Markets Canada Ltd, Macquarie First South Securities (Pty) Limited and Macquarie Capital (USA) Inc. represent
and warrant that they are institutional investors as defined in the Securities and Futures Act. United States: In the United States, research is issued and
distributed by Macquarie Capital (USA) Inc., which is a registered broker-dealer and member of FINRA. Macquarie Capital (USA) Inc, accepts
responsibility for the content of each research report prepared by one of its non-US affiliates when the research report is distributed in the United States
by Macquarie Capital (USA) Inc. Macquarie Capital (USA) Inc.’s affiliate’s analysts are not registered as research analysts with FINRA, may not be
associated persons of Macquarie Capital (USA) Inc., and therefore may not be subject to FINRA rule restrictions on communications with a subject
company, public appearances, and trading securities held by a research analyst account. Information regarding futures is provided for reference
purposes only and is not a solicitation for purchases or sales of futures. Any persons receiving this report directly from Macquarie Capital (USA) Inc. and
wishing to effect a transaction in any security described herein should do so with Macquarie Capital (USA) Inc. Important disclosure information
regarding the subject companies covered in this report is available at www.macquarie.com/research/disclosures, or contact your registered
representative at 1-888-MAC-STOCK, or write to the Supervisory Analysts, Research Department, Macquarie Securities, 125 W.55th Street, New York,
NY 10019.
© Macquarie Group
9 January 2015
5
Macquarie Research
Engro Corporation
Auckland
Tel: (649) 377 6433
Bangkok
Tel: (662) 694 7999
Calgary
Tel: (1 403) 294 9541
Denver
Tel: (303) 952 2800
Jakarta
Tel: (62 21) 515 1818
Johannesburg
Tel: (2711) 583 2000
Kuala Lumpur
Tel: (60 3) 2059 8833
London
Manila
Tel: (44 20) 3037 2000 Tel: (63 2) 857 0888
Melbourne
Tel: (613) 9635 8139
Munich
New York
Tel: (089) 2444 31800 Tel: (1 212) 231 2500
Paris
Tel: (33 1) 7842 3823
Perth
Tel: (618) 9224 0888
Seoul
Tel: (82 2) 3705 8500
Shanghai
Singapore
Tel: (86 21) 6841 3355 Tel: (65) 6601 1111
Taipei
Tokyo
Tel: (886 2) 2734 7500 Tel: (81 3) 3512 7900
Toronto
Tel: (1 416) 848 3500
Vancouver
Tel: (1 604) 605 3944
Sydney
Tel: (612) 8232 9555
Frankfurt
Geneva
Tel: (069) 509 578 000 Tel: (41) 22 818 7777
Hong Kong
Tel: (852) 2823 3588
Mumbai
Tel: (91 22) 6653 3000
Available to clients on the world wide web at www.macquarieresearch.com and through Thomson Financial, FactSet, Reuters, Bloomberg, and CapitalIQ.
9 January 2015
6
Asia Research
Head of Equity Research
John O’Connell (Global – Head)
Peter Redhead (Asia – Head)
Software and Internet
(612) 8232 7544
(852) 3922 4836
Automobiles/Auto Parts
Janet Lewis (China)
Zhixuan Lin (China)
Amit Mishra (India)
Takuo Katayama (Japan)
Michael Sohn (Korea)
(852) 3922 5417
(8621) 2412 9006
(9122) 6720 4084
(813) 3512 7856
(822) 3705 8644
Banks and Non-Bank Financials
Ismael Pili (Asia, Hong Kong, China)
Jian Li (China, Hong Kong)
Matthew Smith (China)
Suresh Ganapathy (India)
Nicolaos Oentung (Indonesia)
Alastair Macdonald (Japan)
Chan Hwang (Korea)
Gilbert Lopez (Philippines)
Thomas Stoegner (Singapore)
Dexter Hsu (Taiwan)
Passakorn Linmaneechote (Thailand)
(852) 3922 4774
(852) 3922 3579
(8621) 2412 9022
(9122) 6720 4078
(6221) 2598 8366
(813) 3512 7476
(822) 3705 8643
(632) 857 0892
(65) 6601 0854
(8862) 2734 7530
(662) 694 7728
Conglomerates
Gilbert Lopez (Philippines)
(632) 857 0892
Consumer and Gaming
Linda Huang (China, Hong Kong)
Jamie Zhou (China, Hong Kong)
Elaine Lai (Hong Kong)
Amit Mishra (India)
Lyall Taylor (Indonesia)
Toby Williams (Japan)
HongSuk Na (Korea)
Karisa Magpayo (Philippines)
Somesh Agarwal (Singapore)
Best Waiyanont (Thailand)
(852) 3922 4068
(852) 3922 1147
(852) 3922 4749
(9122) 6720 4084
(6221) 2598 8489
(813) 3512 7392
(822) 3705 8678
(632) 857 0899
(65) 6601 0840
(662) 694 7993
Emerging Leaders
Jake Lynch (China, Asia)
Michael Newman (Japan)
Kwang Cho (Korea)
(8621) 2412 9007
(813) 3512 7920
(822) 3705 4953
Industrials
Janet Lewis (Asia)
Patrick Dai (China)
Saiyi He (China)
Inderjeetsingh Bhatia (India)
Andy Lesmana (Indonesia)
Kenjin Hotta (Japan)
James Hong (Korea)
Somesh Agarwal (Singapore)
David Gambrill (Thailand)
(852) 3922 5417
(8621) 2412 9082
(852) 3922 3585
(9122) 6720 4087
(6221) 2598 8398
(813) 3512 7871
(822) 3705 8661
(65) 6601 0840
(662) 694 7753
Insurance
Scott Russell (Asia, Japan)
Jian Li (China, Hong Kong)
Chan Hwang (Korea)
(852) 3922 3567
(852) 3922 3579
(822) 3705 8643
David Gibson (Asia)
Jiong Shao (China, Hong Kong)
Alice Yang (China, Hong Kong)
Hillman Chan (China, Hong Kong)
Nitin Mohta (India)
Nathan Ramler (Japan)
Prem Jearajasingam (Malaysia)
Transport & Infrastructure
(813) 3512 7880
(852) 3922 3566
(852) 3922 1266
(852) 3922 3716
(9122) 6720 4090
(813) 3512 7875
(603) 2059 8989
Oil, Gas and Petrochemicals
James Hubbard (Asia)
Aditya Suresh (Hong Kong, China)
Abhishek Agarwal (India)
Polina Diyachkina (Japan)
Anna Park (Korea)
Trevor Buchinski (Thailand)
(852) 3922 1226
(852) 3922 1265
(9122) 6720 4079
(813) 3512 7886
(822) 3705 8669
(662) 694 7829
Pharmaceuticals and Healthcare
John Yung (Hong Kong, China)
Abhishek Singhal (India)
(852) 3922 1132
(9122) 6720 4086
Property
Tuck Yin Soong (Asia, Singapore)
David Ng (China, Hong Kong)
Raymond Liu (China, Hong Kong)
Kai Tan (China)
Abhishek Bhandari (India)
Andy Lesmana (Indonesia)
William Montgomery (Japan)
RJ Aguirre (Philippines)
Corinne Jian (Taiwan)
David Liao (Taiwan)
Patti Tomaitrichitr (Thailand)
(65) 6601 0838
(852) 3922 1291
(852) 3922 3629
(852) 3922 3720
(9122) 6720 4088
(6221) 2598 8398
(813) 3512 7864
(632) 857 0890
(8862) 2734 7522
(8862) 2734 7518
(662) 694 7727
Janet Lewis (Asia)
Andrew Lee (Asia)
Corinne Jian (Taiwan)
Utilities & Renewables
Gary Chiu (Asia)
Alan Hon (Hong Kong)
Inderjeetsingh Bhatia (India)
Prem Jearajasingam (Malaysia)
Karisa Magpayo (Philippines)
Colin Hamilton (Global)
Jim Lennon
Matthew Turner
Graeme Train
Angela Bi
Rakesh Arora
Peter Eadon-Clarke (Asia, Japan)
Richard Gibbs (Australia)
Larry Hu (China, Hong Kong)
Tanvee Gupta Jain (India)
Gurvinder Brar (Global)
Burke Lau (Asia)
Anthony Ng (Asia)
Jason Zhang (Asia)
Suni Kim (Japan, Hong Kong)
Telecoms
Nathan Ramler (Asia, Japan)
Danny Chu
(China, Hong Kong, Taiwan)
David Lee (Korea)
Prem Jearajasingam
(Malaysia, Singapore)
Piyachat Ratanasuvan (Thailand)
(813) 3512 7875
(852) 3922 4762
(822) 3705 8686
(4420) 3037 4036
(852) 3922 5494
(852) 3922 1561
(852) 3922 1168
(852) 3922 3342
Special Situations
Strategy/Country
(8862) 2734 7512
(9122) 6720 4090
(813) 3512 7858
(813) 3512 7877
(813) 3512 7880
(813) 3512 7854
(822) 3705 8641
(822) 3705 8659
(8862) 2734 7524
(8862) 2734 7525
(813) 3512 7850
(612) 8232 3935
(852) 3922 3778
(9122) 6720 4355
Quantitative / CPG
Matthew Hook (Asia)
Jeffrey Su (Asia, Taiwan)
Nitin Mohta (India)
Claudio Aritomi (Japan)
Damian Thong (Japan)
David Gibson (Japan)
George Chang (Japan)
Daniel Kim (Korea)
Soyun Shin (Korea)
Ellen Tseng (Taiwan)
Tammy Lai (Taiwan)
(4420) 3037 4061
(4420) 3037 4271
(4420) 3037 4340
(8621) 2412 9035
(8621) 2412 9086
(9122) 6720 4093
Economics
Matty Zhao (Asia, China)
Hefei Deng (China)
Rakesh Arora (India)
Polina Diyachkina (Japan)
Anna Park (Korea)
David Liao (Taiwan)
Technology
(852) 3922 1435
(852) 3922 3589
(9122) 6720 4087
(603) 2059 8989
(632) 857 0899
Commodities
Resources / Metals and Mining
(852) 3922 1293
(852) 3922 1136
(9122) 6720 4093
(813) 3512 7886
(822) 3705 8669
(8862) 2734 7518
(852) 3922 5417
(852) 3922 1167
(8862) 2734 7522
Viktor Shvets (Asia)
Chetan Seth (Asia)
Joshua van Lin (Asia Micro)
Peter Eadon-Clarke (Japan)
David Ng (China, Hong Kong)
Jiong Shao (China)
Rakesh Arora (India)
Nicolaos Oentung (Indonesia)
Chan Hwang (Korea)
Yeonzon Yeow (Malaysia)
Gilbert Lopez (Philippines)
Conrad Werner (Singapore)
David Gambrill (Thailand)
(852) 3922 3743
(852) 3922 3883
(852) 3922 4769
(852) 3922 1425
(813) 3512 7850
(852) 3922 1291
(852) 3922 3566
(9122) 6720 4093
(6121) 2598 8366
(822) 3705 8643
(603) 2059 8982
(632) 857 0892
(65) 6601 0182
(662) 694 7753
Find our research at
Macquarie:
www.macquarie.com.au/research
Thomson:
www.thomson.com/financial
Reuters:
www.knowledge.reuters.com
Bloomberg:
MAC GO
Factset:
http://www.factset.com/home.aspx
CapitalIQ
www.capitaliq.com
Email macresearch@macquarie.com for access
(603) 2059 8989
(662) 694 7982
Asia Sales
Regional Heads of Sales
Miki Edelman (Asia)
Jeffrey Shiu (China & Hong Kong)
Thomas Renz (Geneva)
Bharat Rawla (India)
Riaz Hyder (Indonesia)
Mark Chadwick (Japan)
John Jay Lee (Korea)
Nik Hadi (Malaysia)
Eric Roles (New York)
Gino C Rojas (Philippines)
(813) 3512 7857
(852) 3922 2061
(41) 22 818 7712
(9122) 6720 4100
(6221) 2598 8486
(813) 3512 7827
(822) 3705 9988
(603) 2059 8888
(1 212) 231 2559
(632) 857 0861
Regional Heads of Sales cont’d
Sales Trading cont’d
Ruben Boopalan (Singapore)
Paul Colaco (San Francisco)
Erica Wang (Taiwan)
Angus Kent (Thailand)
Ben Musgrave (UK/Europe)
Julien Roux (UK/Europe)
Suhaida Samsudin (Malaysia)
Michael Santos (Philippines)
Kenneth Cheung (Singapore)
Chris Reale (New York)
Marc Rosa (New York)
Isaac Huang (Taiwan)
Dominic Shore (Thailand)
Mike Keen (UK/Europe)
(603) 2059 8888
(1 415) 762 5003
(8862) 2734 7586
(662) 694 7601
(44) 20 3037 4882
(44) 20 3037 4867
Sales Trading
Adam Zaki (Asia)
Stanley Dunda (Indonesia)
(852) 3922 2002
(6221) 515 1555
(603) 2059 8888
(632) 857 0813
(65) 6601 0288
(1 212) 231 2555
(1 212) 231 2555
(8862) 2734 7582
(662) 694 7707
(44) 20 3037 4905