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Asia Essentials

麦格理证券


Thursday, 16 February 2017
Deals on Wheels Shifting focus to second-time buyers
3 Janet Lewis
Macquarie's proprietary survey of 22 brands in 14 cities highlights that discounts narrowed across the board in December, as buyers' purchased both vehicles with engines below 1.6L that benefited from the purchase tax cut as well as larger vehicles.
GlobalWafers (Initiating coverage with Outperform) Riding the tailwinds
4 Patrick Liao
We initiate coverage of GlobalWafers (GWC) with an Outperform rating and a target price of NT$220, based on 3.8x 2018E PB. We contend that 3.8x PB is justified given: 1) we believe GWC can turn SunEdison Semi around in one year given its solid track record of successful acquisitions, 2) we expect GWC to ride the uplift in wafer prices as we believe wafer industry capacity won't increase in the next 1.5–2.0 years, and 3) we forecast GWC's earnings to grow more than threefold in 2018 once the consolidation with SunEdison is complete.
Silergy (Initiating coverage with Outperform) Beneficiary of the rising China Semi
5 Patrick Liao
We initiate coverage of Silergy with an Outperform rating and target price of NT$595 (26x 2017E PE). Silergy is the largest listed analog IC supplier in China.
India Media Yet another cut; tough CY17 for TV AdEx
6 Alankar Garude
GroupM, India's largest ad agency with ~40% market share in terms of billings, has slashed its CY17 Indian ad growth forecasts across media segments. The agency is now forecasting 10% YoY overall ad industry growth in CY17, vs 12.5% earlier.
Tata Motors (Outperform) 3Q impacted by transient factors
7 Amit Mishra
Tata Motors reported 3QFY17 earnings that were significantly lower than our expectations due to lower operating margins in both the Jaguar Land Rover (JLR) and India business.
Apollo Hospitals (Outperform) Asahi Group (Outperform) CapitaLand (Outperform) DLF (Outperform) Housing Development and Infrastructure (Outperform) IHI Corp (Underperform)
8 9 10 11 12 13
Please refer to page 26 for important disclosures and analyst certification, or on our website www.macquarie.com/research/disclosures.

MacVisit – China Lesso Mapletree GCCT (Outperform) New World Development (Outperform) Nissha Printing (Outperform) Phoenix Mills (Outperform) Samsung Fire & Marine (Outperform) SMIC (Outperform) Unicharm (Neutral) Vedanta (Outperform) India Insight Hong Kong Property Macquarie Commodities Comment
14 15 16 17 18 19 20 21 22 23 24 25
2

GLOBAL Great Wall’s new Wey brand aims to move the brand upmarket
Deals on Wheels Shifting focus to second-time buyers Domestic brands look to build share upmarket ? Macquarie’s proprietary survey of 22 brands in 14 cities highlights that
Source: Autohome.com, February 2017
discounts narrowed across the board in December, as buyers’ purchased both vehicles with engines below 1.6L that benefited from the purchase tax cut as well as larger vehicles. While domestic OEMs have been the clear beneficiaries in 2016 of the surge in first-time buyers seeking low-priced SUVs, we believe the momentum will increasingly shift to second-time buyers. Overall we believe this favours premium brands, but the domestic brands are launching higher-end products to capture this demand as well.
Inside Domestic brands on the rise JV brands – pricing pressure eases further Premium brands – discounts narrow Model types –discounts fall on s edans & SUVs Map of dealer locations Data for major brands and OEMs 24 28 29 Dealer policies – post purchase tax hike 26 11 19 2
Discounts on JV brands eased further in December ? Only 5 out of 13 JV brands recorded a MoM increase in discounts in
December, pointing to a further easing in pricing pressure. We believe the low discounts were mainly due to 1) less pressure to meet the sales target amid solid demand in 4Q16; 2) an inventory shortage as a result of strong demand. Discounts on Japanese brands remained the lowest at single-digit levels for most, with the Honda JVs maintaining the lowest discounts. Discounts on European brands declined helped by new product launches.
Premium brand discounts contract further ? Discounts declined across the board in December except Jaguar and
imported Cadillac. Beijing-Benz maintained the lowest discounts as discounts declined for both the C-Class sedan and GLA SUV. Discounts on BMW Brilliance models declined 0.2ppt MoM in December, with discounts on the 5 Series and 3 Series both edging down. Discounts on FAW-Audi vehicles also narrowed, partly due to the shortage of inventory as dealers stopped procurement after the dispute with Audi Group broke out in early December.
Domestic brand discounts rise except Great Wall ? Unlike what we have observed with JVs and premium brands, discounts rose
Analyst(s) Macquarie Capital Securities (Japan) Limited Janet Lewis, CFA +81 3 3512 7856 janet.lewis@macquarie.com Macquarie Capital Limited Allen Yuan +86 21 2412 9009 allen.yuan@macquarie.com Macquarie Securities Korea Limited James Hong +82 2 3705 8661 james.hong@macquarie.com Macquarie Capital Securities India (Pvt) Ltd Amit Mishra, CFA +91 22 6720 4084 amit.mishra@macquarie.com Macquarie Capital (Europe) Limited Christian Breitsprecher, CFA +49 69509578014 christian.breitsprecher@macquarie.com Macquarie Capital (USA) Inc. Takuo Katayama +1 212 231 1757 takuo.katayama@macquarie.com
for 3 out of 5 domestic brands in December amid intensified competition. Only Great Wall posted a MoM decline in discounts, and it has the lowest discount level among all OEMs. BYD maintained the highest discount level in December, mainly due to heavy discounts on plug-in hybrid (PHEV) models.
Top picks in Asia include Tata Motors, Nissan and Honda ? In China we favour premium and SUVs. At this moment we believe the best way
to play this theme is through Tata Motors. We continue to like Brilliance China but following its recent run would look to buy on a pullback. In Europe BMW is our top pick due to model cycle. We recently upgraded Honda to Outperform partly due to its strength in China helped by new SUV products. We continue to like Nissan for valuation and Hyundai Motors is our top pick in Korea for model cycle. In the US we like GM for its growth profile and valuations.
Proprietary survey gives view across China ? Macquarie has engaged ISE Search Engine on a proprietary basis to furnish
15 February 2017
data on sales, inventory, customer traffic and transaction prices for 22 auto brands in 14 cities across China (premium brands are from six cities). The data helps us keep tabs on the models and brands that are seeing the biggest – or the least – discounting, as well as volume and inventory trends.
Please refer to page 37 for important disclosures and analyst certification, or on our website www.macquarie.com/research/disclosures. 3

TAIWAN
6488 TT Price (at 08:50, 13 Feb 2017 GMT) Valuation - Price to Book
Outperform NT$171.00 NT$ 220.00 220.00 +28.7 +29.6
GlobalWafers Riding the tailwinds Initiate with Outperform and TP of NT$220 We initiate coverage of GlobalWafers (GWC) with an Outperform rating and a target price of NT$220, based on 3.8x 2018E PB. We contend that 3.8x PB is justified given: 1) we believe GWC can turn SunEdison Semi around in one year given its solid track record of successful acquisitions, 2) we expect GWC to ride the uplift in wafer prices as we believe wafer industry capacity won’t increase in the next 1.5–2.0 years, and 3) we forecast GWC’s earnings to grow more than threefold in 2018 once the consolidation with SunEdison is complete.
12-month target NT$ Upside/Downside % 12-month TSR % GICS sector Semicon & Semicon Equipment Market cap NT$m Market cap US$m 30-day avg turnover US$m Number shares on issue m Investment fundamentals Year end 31 Dec Revenue Reported profit EPS rep EPS rep growth PER rep Total DPS Total div yield ROA ROE EV/EBITDA Net debt/equity P/BV
63,150 2,005 42.7 369.3
To turnaround SunEdison in one year GWC merged with SunEdison and became the third-largest vendor worldwide. It aims to turn the original SunEdison portion profitable this year. Also, the raw wafer market has experienced a 5-year downcycle and no-one wants to add capacity at the moment, in our view. The beginning of a merger is generally the toughest period, in terms of running the different entities. However, we believe GWC will overcome these difficulties within roughly one year. GWC’s share price increased 74% from November 15 to January 24, and we see this as the first wave of outperformance. We believe suppliers are more disciplined about capacity expansion, as the market has been in a downcycle for the past five years.
2015A 2016E 2017E 2018E m 15,310 18,418 40,709 45,559 m 2,044 1,462 966 4,552 NT$ 5.90 3.96 2.62 12.33 % -0.1 -32.9 -33.9 371.1 x 29.0 43.2 65.3 13.9 NT$ 5.29 2.49 1.65 8.88 % 3.1 1.5 1.0 5.2 % 11.9 5.3 2.9 11.1 % 13.7 8.6 5.6 23.6 x 16.5 17.4 10.2 6.1 % -17.7 130.6 130.7 90.2 x 3.8 3.7 3.6 3.0
Source: FactSet, Macquarie Research, February 2017 (all figures in NT$ unless noted, TP in TWD)
Riding the wafer price uptrend We believe the trend of rising prices for raw wafers should continue throughout 2017. Among the global top-10 raw wafer suppliers, only three companies have reported net profit in the past few years. Therefore, we believe major wafer suppliers will not expand capacity near term. If competitors start to expand capacity now, the additional capacity will only be ready in 2H18-1H19, as it takes one year to construct a building and roughly 6–12 months to qualify the facility. Assuming industry capacity doesn’t expand in the next 1.5–2 years, then 2018 will be a strong growth year for GWC. Although there could be some organic capacity increases from improving technologies and de-bottlenecking, we believe the impact should be limited.
Strong earnings growth in 2018 We estimate GWC’s revenue to more than double from NT$18.4bn in 2016 to NT$40.7bn in 2017, followed by 12% growth in 2018 to NT$45.6bn. We believe GWC will gradually improve the profitability of SunEdison by consolidating group resources, improving bargaining power and identifying cost savings. We estimate gross margin and operating margin to bottom in 1Q17 and to improve throughout the year. By 2018, we believe margins will be back to levels seen before the SunEdison acquisition. Overall, we expect EPS will decline 33%/34% in 2016/17 before seeing a strong rebound in 2018. patrick.liao@macquarie.com lynn.luo@macquarie.com
Analyst(s) Patrick Liao +886 2 2734 7515 Lynn Luo +886 2 2734 7534
15 February 2017
Key downside risks to our recommendation and target price include: 1) slowerthan-expected progress in turning around SunEdison, 2) weaker-than-expected wafer demand, 3) more severe silicon wafer industry competition, and 4) unfavourable currency moves.
Macquarie Capital Limited, Taiwan Securities Branch
Please refer to page 14 for important disclosures and analyst certification, or on our website www.macquarie.com/research/disclosures. 4

TAIWAN
6415 TT Price (at 13:06, 13 Feb 2017 GMT) Valuation - PER
Outperform NT$485.00 NT$ 595.00
Silergy Beneficiary of the rising China Semi Initiate with Outperform, TP of NT$595 We initiate coverage of Silergy with an Outperform rating and target price of NT$595 (26x 2017E PE). Silergy is the largest listed analog IC supplier in China. We believe a 26x PE can be justified given: 1) we believe Silergy will continue outgrowing the market and peers in the next few years; and 2) we believe Silergy will benefit from increasing demand for local sourcing ICs in China and the fastgrowing supply chain there. We estimate the company will show 29% and 34% CAGRs for sales and earnings in 2016-18. We also believe the company’s value will lie more in its sustainability and future market position in the world.
12-month target NT$ 595.00 Upside/Downside % +22.7 12-month TSR % +24.4 Volatility Index High GICS sector Semiconductors & Semiconductor Equipment Market cap NT$m 40,711 Market cap US$m 1,327 30-day avg turnover US$m 3.1 Number shares on issue m 83.94 Investment fundamentals Year end 31 Dec Revenue Reported profit EPS rep EPS rep growth PER rep Total DPS Total div yield ROA ROE EV/EBITDA Net debt/equity P/BV m m NT$ % x NT$ % % % x % x 2015A 2016E 2017E 2018E 4,701 1,201 15.50 41.3 31.3 2.01 0.4 25.4 29.6 31.4 -30.8 8.2 7,126 1,392 17.61 13.6 27.5 6.40 1.3 17.3 24.1 25.7 2.9 5.9 9,213 11,797 1,930 2,502 22.99 29.80 30.5 29.6 21.1 16.3 8.28 10.73 1.7 2.2 17.7 19.9 25.2 27.0 17.9 14.1 -8.6 -18.1 4.9 4.0
China - a rapidly growing market We estimate about half of Silergy’s revenue is from China, and primarily in consumer-related applications. Silergy mainly supplies products with lower prices and margins, compared with large, global IDMs like TI and Maxim. We expect the Consumer sector will be the fastest growing sector in Silergy. We see Chinese companies’ adoption rates of domestic-made IC as still low and the China government is aiming to increase it. We believe Silergy is well-positioned in the market to benefit from increasing local sourcing of IC.
M&A to further power growth Silergy has set its long-term revenue growth target at a 20% CAGR, while the actual growth from 2010 to 2016 was 80%, surpassing the target. In 2016, Silergy acquired 1) Maxim’s Smart Meters and Energy Surveillance Department in March and 2) NXP’s LED Driver IC department in April. The two acquired units contributed 25% of sales in 3Q16. As the company’s scale becomes larger, we believe its M&A strategy could be the key to supporting Silergy’s long-term growth.
Source: FactSet, Macquarie Research, February 2017 (all figures in NT$ unless noted, TP in TWD)
Margin expansion on favourable product mix We expect revenue contribution from the higher-margin Industrial segment to increase, while we see the lower-margin Computing segment’s contribution gradually declining. We believe gross margins for each segment will be stable, and the company’s gross margin will improve on a more favourable product mix. Therefore, we forecast Silergy’s gross margin to expand from 46.5% in 2016 to 46.9%/47.4% in 2017/18.
Risks to our Outperform call Downside risks could come from: 1) slower-than-expected technology development, 2) weaker-than-expected end market demand, and 3) more severe IC design industry competition.
Analyst(s) Patrick Liao +886 2 2734 7515 Lynn Luo +886 2 2734 7534 patrick.liao@macquarie.com lynn.luo@macquarie.com
15 February 2017
Macquarie Capital Limited, Taiwan Securities Branch
Please refer to page 14 for important disclosures and analyst certification, or on our website www.macquarie.com/research/disclosures. 5

INDIA Our recent reports on ad scenario India Media - Experts speak: Advertisers hit pause button India Media - Agencies predict 11-13% ad growth in 2017 India Media - Painstaking ad recovery underway ZEE - Significantly beats STAR India's ad growth in 4QCY16
India Media Yet another cut; tough CY17 for TV AdEx Conclusion ? GroupM, India’s largest ad agency with ~40% market share in terms of
billings, has slashed its CY17 Indian ad growth forecasts across media segments. The agency is now forecasting 10% YoY overall ad industry growth in CY17, vs 12.5% earlier. Amongst larger media segments, the sharpest cut is for TV (8% now vs 12% YoY growth estimate earlier). ? In line with our earlier expectations, normalisation of ad revenue is expected
GroupM’s revised CY17 ad forecasts Prior forecast (as of Dec-16) TV Print Digital OOH Radio Cinema Overall 12.0% 5.4% 30.0% 8.0% 20.0% 25.0% 12.5% Current Revision forecast (in bps) 8.0% 4.5% 30.0% 7.0% 10.0% 20.0% 10.0% -400 -90 0 -100 -1000 -500 -250
to be a slow process and is likely earliest by April. While we are mindful of a near-term slowdown, recovery seems to be on track. At this point, we retain our 12% YoY FY18 ad growth estimate for ZEE and expect regional print companies (Jagran Prakashan and DB Corp) to grow in the 8-10% YoY range in FY18.
Impact ? Note ban to shave 100-150bps off overall CY17 ad growth: We note that in
Source: GroupM, Macquarie Research, February 2017
Media Valuation Snapshot Company Mkt cap (USD m) CMP (Rs) TP (Rs) Rec
Z IN 7,386 523 580 OP DITV IN 1,397 89 118 OP JAGP IN 912 187 200 OP DBCL IN 1,025 379 475 OP HTML IN 292 85 84 N *Prices of 14th February, 2017 Source: Bloomberg, Macquarie Research, February 2017
December 2016, a month after the demonetisation announcement, GroupM had forecast 12.5% YoY overall ad industry growth in CY17. The latest cut reflects that despite some recovery, attaining normalcy is taking time. Similar to our belief, GroupM expects the recovery to be gradual and the note ban impact to linger until the end of March. As per GroupM, the note ban is expected to shave 100-150 bps off overall CY17 ad growth. This follows a ~200bps impact on CY16 ad growth. As of now, GroupM expects CY18 to be a very strong year for ad growth. ? TV ad growth to hit a 3-year low in CY17: GroupM expects CY17 TV ad
growth to slow by 200bps to 8% YoY. Owing to slower volume growth and rising commodity costs, GroupM expects FMCG ad spend to slow to “much less than 10%” in CY17. We believe weakness in FMCG along with any slowdown in telecom ad spend due to consolidation could take a toll on TV ad growth. Sun TV (~7% YoY decline in ad revenues in 3Q) in its earnings concall mentioned that many sectors are still spending less than normal and some stability is likely only by 1QFY18, a commentary echoed by ZEE and STAR as well. ? Is our FY18 ad growth estimate for ZEE at risk?: We remain comfortable
Analyst(s) Alankar Garude, CFA +91 22 6720 4134 alankar.garude@macquarie.com
with our 12% YoY ad estimate for ZEE in FY18. We believe for ZEE to continue to outperform TV industry ad growth by 400bps, it is imperative for Zee TV’s and &TV’s ratings to improve. Any delay in ramp-up of original programming to 30 hours (from 25 currently) beyond the current guidance of 2-3 quarters, could pose some downside risk to our estimates. While ZEE’s market share remains strong across most regions, we would keep an eye on increasing competitive intensity from STAR (revamp of Telugu channel), Sun TV (imminent revamp of Kannada channel) and Viacom in the regional space. The pace of the ad recovery along with an increase in viewership share of ZEE’s Hindi GECs are key monitorables for 4Q, in our view.
Outlook ? Amongst TV broadcasters and print, we remain selective and we prefer ZEE
15 February 2017
Macquarie Capital Securities India (Pvt) Ltd
given its higher dependence on national ads and leadership position across genres. With strong synergies from the Videocon d2h merger and significant valuation comfort, Dish TV is our top pick in the India media space.
Please refer to page 3 for important disclosures and analyst certification, or on our website www.macquarie.com/research/disclosures. 6

INDIA
TTMT IN Price (at 19:53, 14 Feb 2017 GMT) Valuation - Sum of Parts
Outperform Rs467.15 Rs Rs % % 575.00
Tata Motors 3Q impacted by transient factors Event ? Tata Motors reported 3QFY17 earnings that were significantly lower than our
575.00 +23.1 +23.5 Medium Automobiles & Components Market cap Rsbn 1,586 Market cap US$m 25,611 Free float % 68 30-day avg turnover US$m 42.6 Number shares on issue m 3,395 Investment fundamentals Year end 31 Mar Revenue EBITDA EBITDA growth EBIT EBIT growth Adjusted profit EPS rep EPS adj EPS adj growth PER adj Total DPS Total div yield ROA ROE EV/EBITDA Net debt/equity P/BV 2016A 2017E 2018E 2019E bn 2,755.6 2,906.9 3,313.3 3,860.4 bn 367.6 302.5 424.1 538.2 % -6.3 -17.7 40.2 26.9 bn 197.4 108.7 208.2 295.6 % -23.6 -44.9 91.5 42.0 bn 127.1 69.4 153.4 226.8 Rs 32.46 20.44 45.16 66.78 Rs 37.42 20.44 45.16 66.78 % -14.1 -45.4 121.0 47.9 x 12.5 22.9 10.3 7.0 Rs 2.00 2.00 2.00 2.00 % 0.4 0.4 0.4 0.4 % 7.8 4.0 7.2 9.3 % 18.5 8.3 16.3 20.2 x 5.5 6.7 4.8 3.8 % 46.5 51.6 48.0 5.9 x 2.0 1.8 1.6 1.3
12-month target Upside/Downside 12-month TSR Volatility Index GICS sector
expectations due to lower operating margins in both the Jaguar Land Rover (JLR) and India business. JLR’s operating margin of 9.3% was lowest in the last five years as the earnings were impacted by run-out costs of older models and unfavourable model mix. While JLR’s ASP increased 19% YoY due to favourable forex rates, it didn’t translate to higher profits given loss on realised hedges. India business margins were impacted by lower volumes on account of demonetisation and high discounts in the commercial vehicle segments. ? We view most of the negative factors that impacted Tata Motors’ earnings in
3QFY17 as transitory and expect stronger sales growth and margin for JLR in FY18E. We maintain OP with a revised TP of Rs575 (previously Rs630).
Impact ? Strong ASP growth, weak operating margins. JLR ASP grew 19% YoY and
4.2% QoQ, reflecting favourable spot currency rates. However, EBITDA margins declined 508bp YoY to 9.3%, given a) 200bp impact of less favourable model mix, particularly the Discovery model run-out; b) 170bp impact of higher variable marketing spend, especially extended run-out of the 16MY in the US; c) higher new model launch expense (30bp); d) biennial pay negotiation settlement (40bp); and e) losses on realised forex hedges. JLR’s profit from the Chery-JLR JV (China) was £35m compared to £22m in 3QFY16. JLR generated £54m positive FCF despite a 10% YoY capex increase. ? Why we think FY18 will be stronger year for JLR? JLR’s growth in the past
TTMT IN rel BSE Sensex performance, & rec history
two years has been led by lower-priced models (Discovery Sport, XE and FPace). We expect JLR to launch new models in the mid-to-high price segments in 2017, which should drive growth and improve profitability. JLR will start sales of the new Discovery from Mar-17, launch mid-size Range Rover badged model in 2QFY18E, mid-cycle upgrades of Range Rover and Range Rover Sport in 3QFY18E and a new small SUV Jaguar E-Pace in 4QFY18E. The operating benefit from GBP depreciation was £438m. This didn’t translate to higher operating profits in 3Q due to £455m losses on realised forex hedges, but it will likely boost margins in FY18E as old hedges gradually roll off. ? India business – OPM impacted by adverse mix. Sales were impacted by
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, February 2017 (all figures in INR unless noted)
demonetisation. CV sales grew modestly (M&HCV +0.6% YoY and LCV +2.4%), while Tiago led 28% growth in PV sales. EBITDA margin contracted 390bp YoY to 0.7% on lower M&HCV volumes and higher discounts.
Earnings and target price revision ? We have reduced FY17/18/19 consolidated EBITDA by 20%/10%/7.0% to
factor in lower OPM in JLR and India businesses. Analyst(s) Amit Mishra, CFA +91 22 6720 4084 amit.mishra@macquarie.com
Price catalyst ? 12-month price target: Rs575.00 based on a Sum of Parts methodology. ? Catalyst: Sales and pricing trend of JLR vehicles in China
15 February 2017
Macquarie Capital Securities India (Pvt) Ltd
Action and recommendation ? TTMT stock trades at 9.0x FY19 PER (assuming 0% R&D cost capitalisation).
Please refer to page 13 for important disclosures and analyst certification, or on our website www.macquarie.com/research/disclosures. 7

INDIA
APHS IN Price (at 08:50, 15 Feb 2017 GMT) Valuation - Sum of Parts
Outperform Rs1,218.55 Rs 1,600.00
Apollo Hospitals Stable show in a challenging environment Event ? Apollo Hospitals (APHS) delivered a stable 3QFY17 performance despite
12-month target Rs 1,600.00 Upside/Downside % +31.3 12-month TSR % +31.8 Volatility Index Low GICS sector Health Care Equipment & Services Market cap Rsm 169,531 Market cap US$m 2,593 Free float % 66 30-day avg turnover US$m 3.5 Number shares on issue m 139.1 Investment fundamentals Year end 31 Mar Revenue EBIT EBIT growth Recurring profit Reported profit Adjusted profit EPS rep EPS rep growth EPS adj EPS adj growth PER rep PER adj Total DPS Total div yield ROA ROE EV/EBITDA Net debt/equity P/BV 2016A 2017E 2018E 2019E m 60,856 68,888 79,948 90,626 m 5,290 5,509 7,171 8,128 % 1.1 4.1 30.2 13.4 m 3,872 4,109 5,471 6,028 m 3,310 3,287 4,267 4,461 m 3,246 3,287 4,267 4,461 Rs 23.80 23.63 30.68 32.07 % -2.6 -0.7 29.8 4.5 Rs 23.34 23.63 30.68 32.07 % -2.3 1.2 29.8 4.5 x 51.2 51.6 39.7 38.0 x 52.2 51.6 39.7 38.0 Rs 6.00 4.73 6.14 6.41 % 0.5 0.4 0.5 0.5 % 7.5 6.7 7.8 8.1 % 9.7 9.1 10.9 10.5 x 24.6 23.7 19.3 17.0 % 55.4 61.8 64.5 66.8 x 4.9 4.5 4.1 3.8
multiple headwinds. Overall consolidated revenues grew by ~20% YoY to Rs19.1bn, EBITDA was up ~11% YoY to Rs1.9bn and PAT declined by 8% YoY to Rs454m due to higher depreciation and interest (commissioning of Navi Mumbai hospital in 3Q). We believe APHS is on the right track by focussing on increasing occupancy levels, improving revenue mix and ROCEs to ~20% levels. We expect margins to inch up, driven by a ramp-up of new hospitals, an increase in high-margin international sales and lower start-up costs with the ramp-up of new hospitals. We maintain our Outperform rating on APHS with a new TP of Rs1,600.
Impact ? Healthcare: Performance (details in Fig 2, 3) of the hospital business was
impacted due to the note ban (30% outstation patients), hospitalisation of late Tamil Nadu CM and Vardah cyclone. If not for these factors, revenues would have been higher by ~Rs250-300m and EBITDA by ~Rs150m. Note the ban impact is likely to continue for one more quarter. There was an additional impact of an Rs80m EBITDA loss for the Navi Mumbai hospital. Given that APHS is in the final stage of expansion plans, we expect the margin trajectory to improve due to higher operating leverage and maturing new hospitals. ? Pharmacy: Pharmacy margins were slightly down 31bps QoQ to 4.6% due to
APHS IN rel BSE Sensex performance, & rec history
few provisions and higher FMCG sales (slightly lower margins). We believe a gradual margin recovery in pharmacy will be driven by (a) incrementally maturing store mix; (b) increasing penetration of private labels, which typically generate EBITDA margins of >50%; (c) closure of loss-making stores and (d) optimization of inventory and increasing sales through bulk distribution. ? Key highlights from 3QFY17 concall: (i) APHS is hopeful of good traction in
the new hospitals (~2,400 beds) in the next 12-18 months (ii) In the Hyderabad cluster, competitive intensity remains high. Hence, APHS has been focussing on increasing ARPOB by improving the patient mix. (iii) AHLL losses to come down by 25-30% in FY18; breakeven is targeted in 24 months (iv) In FY17, there will be Rs1-1.25bn of maintenance capex in addition to project capex of Rs3.5bn.
Earnings and target price revision Note: Recommendation timeline - if not a continuous line, then there was no Macquarie coverage at the time or there was an embargo period.
? We lower our FY17-19E EBITDA estimates by 3-7% primarily due to the
Source: FactSet, Macquarie Research, February 2017 (all figures in INR unless noted)
impact of demonetisation. As we roll-forward to FY19 (FY18 earlier), our SOTP-based TP is revised to Rs1,600 (Rs1,570 previously).
Price catalyst Analyst(s) Abhishek Singhal +91 22 6720 4086 abhishek.singhal@macquarie.com Alankar Garude, CFA +91 22 6720 4134 alankar.garude@macquarie.com
? 12-month price target: Rs1,600.00 based on a Sum of Parts methodology. ? Catalyst: 1) Pharmacy business turnaround, 2) new hospitals breakeven
15 February 2017
Action and recommendation ? Given its track record, scale, pan India presence, strong brand-equity and
Macquarie Capital Securities India (Pvt) Ltd
integrated healthcare delivery model, APHS remains strategically well positioned to capitalize on domestic healthcare growth. Maintain Outperform.
Please refer to page 6 for important disclosures and analyst certification, or on our website www.macquarie.com/research/disclosures. 8

JAPAN
2502 JP Price (at 14:51, 09 Feb 2017 GMT) Valuation - DCF
Outperform ¥3,938 ¥ ¥ % % 4,4005,300
Asahi Group Healthy Start by the Western Europe Business Conclusion ? Asahi Group HD reported ¥148.5bn in FY12/16 (+YoY 5.5%) business profit
12-month target Upside/Downside 12-month TSR Volatility Index GICS sector
4,700 +19.3 +21.0 Low Food, Beverage & Tobacco Market cap ¥bn 1,904 Market cap US$m 16,856 30-day avg turnover US$m 55.8 Number shares on issue m 483.6 Investment fundamentals Year end 31 Dec Revenue EBIT EBIT growth Recurring profit Reported profit Adjusted profit EPS rep EPS rep growth EPS adj EPS adj growth PER rep PER adj Total DPS Total div yield ROA ROE EV/EBITDA Net debt/equity P/BV 2015A 2016E 2017E 2018E bn 1,857.4 1,852.8 1,947.0 1,977.2 bn 135.1 147.6 162.5 171.2 % 5.3 9.2 10.1 5.4 bn 145.9 149.3 160.0 168.7 bn 76.4 88.4 97.6 103.3 bn 120.2 105.5 109.6 115.3 ¥ 165.5 193.0 213.1 225.6 % 12.1 16.6 10.4 5.8 ¥ 260.9 230.4 239.3 251.8 % 40.3 -11.7 3.9 5.2 x 23.8 20.4 18.5 17.5 x 15.1 17.1 16.5 15.6 ¥ 50.0 60.0 64.0 67.0 % 1.3 1.5 1.6 1.7 % 7.0 7.3 7.4 7.5 % 13.7 12.1 12.1 11.8 x 9.6 9.8 9.1 8.8 % 34.1 69.1 60.0 50.5 x 2.1 2.1 1.9 1.8
(BP), on par with our ¥147.6bn OP forecast. It presented FY12/17 guidance of ¥165bn in BP (+11.1%), modestly exceeding our ¥162.5bn forecast. ? We think the Western Europe business, which was added to consolidated
statements from 4Q 2016, had a healthy start. This business posted a ¥1.8bn loss (¥4.2bn in BP and ¥6bn in one-time costs) that beat guidance (¥2.5bn loss) by ¥700mn. We think the transfer of operations has gone smoothly since Asahi acquired rights to this business. ? Asahi’s net debt/EBITDA ratio at end-FY12/16 was 2.5x, and we estimate an
increase in this ratio to ~4.8x in FY12/17 taking into account the impact from acquiring the Central and Eastern Europe business, likely to be completed in FY12/17. While Asahi needs to demonstrate the ability of the two European business to provide stable cash creation, we think it is having an upbeat start.
Impact ? Asahi uses an assumption of a 3% YoY increase in forex-neutral sales for the
Western Europe business (Italy at +4% and the United Kingdom and the Netherlands at +6%) in FY12/17 guidance. We think it factors in roughly the same momentum as the result from FY12/16. The FY12/17 BP target for the Western Europe business includes ¥1.9bn in one-time costs. ? Asahi expects a closing on its acquisition of the Central and Eastern Europe
2502 JP vs TOPIX, & rec history
business during FY12/17 and therefore does not include results from this business in the period-start plan.
Earnings and target price revision ? We maintain our forecasts and ¥4,700 price target.
Price catalyst ? 12-month price target: ¥4,700 based on a Price to Book methodology. ? Catalyst: Confirmation of stable cash creation in overseas businesses newly 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, February 2017 (all figures in JPY unless noted)
added to consolidated statements and manifestation of firm growth potential in domestic BP in quarterly results announcements.
Action and recommendation ? We maintain our Outperform rating.
Analyst(s) Satsuki Kawasaki +81 3 3512 7879 satsuki.kawasaki@macquarie.com
15 February 2017
Macquarie Capital Securities (Japan) Limited
Please refer to page 5 for important disclosures and analyst certification, or on our website www.macquarie.com/research/disclosures. 9

SINGAPORE
CAPL SP Price (at 05:50, 15 Feb 2017 GMT) Valuation - DCF (WACC 8.0%)
Outperform S$3.46 S$ 5.39
CapitaLand Busy 2017 to further drive recurrent income Conclusion ? Our expectation of higher recurrent income and higher DPS in our in-depth
12-month target S$ 4.32 Upside/Downside % +24.9 12-month TSR % +28.3 Volatility Index Low GICS sector Real Estate Market cap S$m 14,789 Market cap US$m 10,401 Free float % 59 30-day avg turnover US$m 26.6 Number shares on issue m 4,274 Investment fundamentals Year end 31 Dec Revenue EBIT EBIT growth Adjusted profit EPS adj EPS adj growth PER adj Total DPS Total DPS growth Total div yield ROA ROE P/BV 2016A 2017E 2018E 2019E m 5,252.3 4,454.7 4,478.4 5,152.8 m 1,257.3 1,346.4 1,382.7 1,575.7 % 15.7 7.1 2.7 14.0 m 865.3 1,076.1 1,108.0 1,264.5 ¢ 20.4 25.4 26.1 29.8 % 5.5 24.5 3.0 14.1 x 17.0 13.6 13.2 11.6 ¢ 10.0 12.0 12.0 12.0 % 11.1 20.0 0.0 0.0 % 2.9 3.5 3.5 3.5 % 2.7 3.0 3.1 3.5 % 7.1 6.0 6.0 6.6 x 0.8 0.8 0.8 0.8
report, “Leveraging the value chain” dated 31 Jan 2016, materialised with the group reporting core earnings (excluding revaluations and change of use gains) growth of +28% YoY. We expect a busy year for CapitaLand in 2017 with 8 malls to be opened (6 in China), more management contracts from Ascott (serviced apartments) and CMA (shopping malls), and handover of residential units sold.
Impact ? FY16 results highlights. Results were driven by higher handover of China
resi units; stronger recurrent income from Singapore office and China shopping malls (link to flashnote). Cash earnings were 79% of reported earnings. DPS +11.1% to 10cts. Given our expectation of core earnings FY17 growth of +24%, we believe a 12cts DPS is possible, implying a 3.5% yield. ? Drivers of new recurrent income. Three of the six malls to be opened in
China this year are from its Raffles City portfolio, where pre-leasing rates are > 85%. Ascott will open 3,700 units this year, same rate as in 2016. We also expect a new PE fund to be established for Vietnam commercial properties. ? Trading income mixed. Singapore resi will benefit from the en-bloc sale of
CAPL SP rel SNGPORI performance, & rec history
The Nassim with net profits of S$161m to be recognised in 1Q17. After a strong 2016, China resi handover will likely fall from ~Rmb16bn to >Rmb5.3bn (based on units sold as at Dec 2016, before accounting for other completed units to be sold and handed over in 2017). ? Comfortable gearing of 41% from 48% a year ago. About 72% of debt is on
fixed rates and implied interest rate -20bp lower at 3.3%. Book NAV was 1.4% YoY to S$4.15 as Rmb weakness was taken against its foreign currency translation reserves account.
Earnings and target price revision Note: Recommendation timeline - if not a continuous line, then there was no Macquarie coverage at the time or there was an embargo period.
? We trim our EPS estimates marginally, mainly due to higher tax rates and
Source: FactSet, Macquarie Research, February 2017 (all figures in SGD unless noted)
lower contributions from China and Singapore resi given an updated completion schedule. We marginally increase RNAV from S$5.28 to S$5.39, and target price from S$4.22 to S$4.32, by adjusting for FY16 results and lower net debt.
Price catalyst ? 12-month price target: S$4.32 based on a RNAV methodology.
Analyst(s) Tuck Yin Soong +65 6601 0838 Ken Ang, CFA +65 6601 0836 Zhi Rong Phua +65 66010893 tuckyin.soong@macquarie.com ken.ang@macquarie.com zhirong.phua@macquarie.com
? Catalyst: Acquisitions from RCCIP Fund III, new investments in Vietnam and
growth in fee income.
Action and recommendation ? We expect CapitaLand to reap the benefits of scale in its serviced apartment
15 February 2017
Macquarie Capital Securities (Singapore) Pte. Limited
and shopping mall business with more management contracts to drive higher fee income. More than 76% of assets produce recurrent income and major projects under development will come on stream over the next two years. Shares are attractive on 0.83x PBV and at a 34% discount to our RNAV.
Please refer to page 5 for important disclosures and analyst certification, or on our website www.macquarie.com/research/disclosures. 10

INDIA
DLFU IN Price (at 14:50, 14 Feb 2017 GMT) Valuation - DCF (WACC 15.4%)
Outperform Rs147.75 Rs 330.51
DLF Operationally weak, all eyes on deal Conclusion ? DLF’s 3Q FY17 operational performance was weak, as expected, due to high
12-month target Rs 165.00 Upside/Downside % +11.7 12-month TSR % +12.5 Volatility Index High GICS sector Real Estate Market cap Rsm 263,585 Market cap US$m 3,937 Free float % 25 30-day avg turnover US$m 18.5 Number shares on issue m 1,784 Investment fundamentals Year end 31 Mar Revenue EBIT EBIT growth Adjusted profit EPS adj EPS adj growth PER adj Total DPS Total DPS growth Total div yield ROA ROE EV/EBITDA Net debt/equity P/BV 2016A 2017E 2018E 2019E m 92,599 75,486 67,868 67,588 m 30,886 28,575 24,954 23,893 % 24.6 -7.5 -12.7 -4.3 m 6,846 5,994 3,709 3,104 Rs 3.85 3.37 2.08 1.74 % 20.0 -12.4 -38.1 -16.3 x 38.4 43.9 70.9 84.7 Rs 2.40 1.97 1.22 1.02 % -34.0 -17.9 -38.1 -16.3 % 1.6 1.3 0.8 0.7 % 4.6 4.3 3.8 3.7 % 2.4 2.1 1.3 1.1 x 14.2 15.6 17.3 17.9 % 92.1 97.1 88.1 84.2 x 0.9 0.9 0.9 0.9
impact of demonetisation in the NCR region. until the CCPS deal concludes, debt is likely to rise as operating cash flows remain weak. ? We think the CCPS deal closure is likely in FY18E, and that this is critical to
repair the balance sheet.
Impact ? Presales extremely weak; likely to remain so in the near term: The NCR
region has been the most impacted by the demonetisation of high-value notes in India (Demonetisation hits NCR hard). Gurgaon phase 5 continues to form the lion’s share of presales (Rs5.5bn out of Rs6.6bn 3Q gross presales). Presales (net of cancellations) for 9M FY17 are down 72% to Rs7.6bn. DLF has noted in its presentation that until secondary markets stabilise, primary sales are likely to remain weak over next few qtrs. We expect FY17E presales to be down 67% yoy to Rs10.4bn. ? Debt likely to rise near-term: Operating cashflows remain weak leading to a
rise in debt (net debt rose Rs12bn QoQ to Rs240bn). We think debt will continue to rise until presales recover meaningfully (qtrly shortfall of Rs8bn10bn). ? CCPS deal closure critical to significant repair of balance sheet: The
DLFU IN rel BSE Sensex performance, & rec history
Ongoing CCPS stake sale (40% stake in parent company by promoters) to private equity players is under way. We think that deal closure is likely only in FY18E (even DLF has sought an extension from its board to March-18). The board has permitted promoters to sell their 40% stake in the parent company only if they plough the money back into DLF to help it reduce its debt. We think that the equity value of the CCPS transaction could range from Rs90bn120bn and help the company reduce its debt significantly. ? 3Q FY17 result highlights: Revenues at Rs20.58bn (-27% yoy), EBITDA
margin at 46.5% (+320bps yoy) and PAT at Rs981m (-40% yoy). Note: Recommendation timeline - if not a continuous line, then there was no Macquarie coverage at the time or there was an embargo period.
Earnings and target price revision ? We lower our FY17-18E EBITDA by 11-22% to factor in weaker presales. We
Source: FactSet, Macquarie Research, February 2017 (all figures in INR unless noted)
lower our TP from Rs175 to Rs165.
Price catalyst ? 12-month price target: Rs165.00 based on a Sum of Parts methodology. ? Catalyst: faster closure of the CCPS deal.
Action and recommendation Analyst(s) Abhishek Bhandari , CFA +91 22 6720 4088 abhishek.bhandari@macquarie.com
? The company is hosting its analyst call at 3.30pm IST (GMT+530) today. Call
details: +91-22-3960-0641. ? Maintain OP.
15 February 2017
Macquarie Capital Securities India (Pvt) Ltd
Please refer to page 6 for important disclosures and analyst certification, or on our website www.macquarie.com/research/disclosures. 11

INDIA
HDIL IN Price (at 08:50, 15 Feb 2017 GMT) Valuation - DCF (WACC 15.7%)
Outperform Rs68.30 Rs 144.62
Housing Development and Infrastructure Demon blues Event ? HDIL’s 3Q FY17 results were within expected lines but presales remained
12-month target Rs 87.00 Upside/Downside % +27.4 12-month TSR % +27.4 Volatility Index High GICS sector Real Estate Market cap Rsm 29,642 Market cap US$m 444 Free float % 63 30-day avg turnover US$m 15.6 Number shares on issue m 434.0 Investment fundamentals Year end 31 Mar Revenue EBIT EBIT growth Adjusted profit EPS adj EPS adj growth PER adj Total DPS Total DPS growth Total div yield ROA ROE EV/EBITDA Net debt/equity P/BV 2016A 2017E 2018E 2019E m 11,695 12,388 12,388 12,708 m 7,794 6,391 6,391 6,479 % -1.4 -18.0 0.0 1.4 m 2,661 1,534 2,221 2,994 Rs 6.35 3.66 5.30 7.14 % 21.7 -42.4 44.9 34.8 x 10.8 18.7 12.9 9.6 Rs 0.00 0.00 0.00 0.00 % 0.0 0.0 0.0 0.0 % 0.0 0.0 0.0 0.0 % 4.4 3.1 2.8 2.9 % 2.4 1.4 1.9 2.6 x 0.2 0.2 0.2 0.2 % 24.2 -24.2 -22.8 -22.2 x 0.3 0.3 0.2 0.2
weak due to demonetisation.
Impact ? Demonetisation hits presales: Residential presales fell 80% yoy (54% qoq)
to Rs766mn driven by 0.1msf of volume. However, TDR sales remain stable at the ~0.3msf/qtr level with stable pricing of Rs3,500/sf. HDIL expects presales to remain weak over the next few quarters due to weak consumer sentiment in real estate. ? Debt reduction continues: Net debt of HDIL remained stable at Rs26.4bn at
3Q FY17 end. This has been reduced further by ~Rs2bn in 4Q FY17 till date and targets are to reduce it to ~Rs25bn by FY18E end. This will largely be driven by collections from TDR sales. ? Launching Budget Home brand in affordable segment: Post the tax
incentives and infrastructure status announced in the Union Budget 2017 (refer to our note), HDIL has launched the Budget Homes brand. It intends to sell houses in a price range up to Rs5-6mn (in MMR region) and Rs2mn (in Virar-Vasai region). ? 3Q FY17 result highlights: Revenues at Rs1.12bn (-65% yoy) and PAT at
HDIL IN rel BSE Sensex performance, & rec history
Rs162mn (-82% yoy). Net debt remained stable at Rs26.4bn. ? Other highlights from conference call: 1) Targeting to launch 500
apartments in Mulund in the affordable segment, and an additional 700 over the next 12 months. This will be priced at ~Rs5-6mn/unit inclusive of taxes; 2) No major project completion is expected in FY18E end. Hence, revenues will be driven mainly by recognition of TDR sales; 3) Continuing to explore opportunities to sell FSI in the Pant Nagar project.
Earnings and target price revision 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, February 2017 (all figures in INR unless noted)
? We lower FY17-18E EBITDA by ~30% to factor in near-term weakness in
presales. Lower our TP from Rs120 to Rs87.
Price catalyst ? 12-month price target: Rs87.00 based on a Sum of Parts methodology. ? Catalyst: pick-up in presales, TDR sales, launch of affordable housing
Action and recommendation Analyst(s) Abhishek Bhandari , CFA +91 22 6720 4088 abhishek.bhandari@macquarie.com
? Maintain OP.
15 February 2017
Macquarie Capital Securities India (Pvt) Ltd
Please refer to page 5 for important disclosures and analyst certification, or on our website www.macquarie.com/research/disclosures. 12

JAPAN
7013 JP Valuation - PER
Underperform Price (at 14:50, 14 Feb 2017 GMT) ¥338 ¥ 200-400 12-month target ¥ 300 Upside/Downside % -11.2 12-month TSR % -9.6 Volatility Index High GICS sector Capital Goods Market cap ¥m 522,818 Market cap US$m 4,590 30-day avg turnover US$m 44.4 Number shares on issue m 1,547 Investment fundamentals Year end 31 Mar Revenue EBIT EBIT growth Recurring profit Reported profit Adjusted profit EPS rep EPS rep growth EPS adj EPS adj growth PER rep PER adj Total DPS Total div yield ROA ROE EV/EBITDA Net debt/equity P/BV 2016A 2017E 2018E 2019E bn 1,539.4 1,513.0 1,577.0 1,621.0 bn 22.0 41.1 67.8 73.5 % -65.1 86.4 65.0 8.4 bn 9.7 25.0 58.7 64.4 bn 1.5 1.7 31.4 34.7 bn 12.9 11.3 31.4 34.7 ¥ 1.0 1.1 20.3 22.5 % -83.2 11.2 1,747.1 10.5 ¥ 8.3 7.3 20.3 22.5 % -66.4 -12.3 177.9 10.5 x 341.3 307.0 16.6 15.0 x 40.5 46.2 16.6 15.0 ¥ 3.0 0.0 6.0 6.0 % 0.9 0.0 1.8 1.8 % 1.3 2.4 4.0 4.2 % 3.9 3.5 9.3 9.5 x 8.9 7.9 6.2 5.9 % 75.0 78.1 72.2 67.7 x 1.6 1.6 1.5 1.4
IHI Corp Expect jet engine profit to decline again in FY3/18 Conclusion ? We update our forecasts in light of 3Q results. We slightly raise our price
target from ¥290 to ¥300, but maintain our Underperform rating. ? We think 3Q results exhausted short-term negative catalysts for the time
being. However, we maintain our outlook for a rise in losses related to the new PW-1100G-JM weighing on profit in the aircraft jet engines business, which is IHI’s largest source of earnings.
Impact ? We slightly revise our FY3/17 OP forecast from ¥41.6bn (+89% YoY) to
¥41.1bn (+86%). We factor in ¥16bn in extra costs for the resources, energy and environment segment, mainly for the Cove Point LNG plant project in the US. In the aero engine, space and defence segment, meanwhile, we reduce our estimate for Airbus A320neo PW-1100G-JM deliveries from 200 engines to 135 engines and trim anticipated losses related to this engine from ¥10bn to ¥5.5bn. ? We adjust our FY3/18 OP forecast from ¥67.3bn to ¥67.8bn. This includes the
addition of ¥5bn in extra-cost risk for Cove Point LNG plant project in the resources, energy and environment segment. We keep PW-1100G-JM deliveries at 400 engines and expect ¥20bn in losses for this business. We thus forecast a 17% YoY decline in aero engine, space and defence segment OP to ¥43.5bn.
7013 JP vs TOPIX, & rec history
Earnings and target price revision ? We revise our earnings forecasts in light of the 3Q FY3/17 results. ? We raise our target price to ¥300 from ¥290 using 1.3x fair P/B (1.2x
previously) and FY3/18E BPS. Key assumptions are 6.8% CoE and our 8.9% ROE and ¥228 BPS forecasts. Implied P/E is 15x.
Price catalyst Note: Recommendation timeline - if not a continuous line, then there was no Macquarie coverage at the time or there was an embargo period.
? 12-month price target: ¥300 based on a Price to Book methodology. ? Catalyst: 1) Occurrence of extra costs for SPB tanks used in LNG ships; and,
Source: FactSet, Macquarie Research, February 2017 (all figures in JPY unless noted)
2) occurrence of extra costs in construction of the US-based LNG plant.
Action and recommendation ? We maintain an Underperform rating.
Analyst(s) Kunio Sakaida +81 3 3512 7873 kunio.sakaida@macquarie.com Tomoki Takeshima +81 3 3512 7432 tomoki.takeshima@macquarie.com
15 February 2017
Macquarie Capital Securities (Japan) Limited
Please refer to page 8 for important disclosures and analyst certification, or on our website www.macquarie.com/research/disclosures. 13

HONG KONG/CHINA 2128 HK Stock price as of 16/02/2017 GICS sector Market cap Avg Value Traded (3m) 12m high/low PER FY15 P/BV FY15 HK$ US$m US$m HK$ x x
MacVisit – China Lesso Not rated 5.63 Industrials 2,253 2.1 5.97/3.80 9.9 1.6
Rising Prices on Supply Constraint ? Supply constraint drove 2H16 prices higher – China Lesso (Lesso) mainly
sells plastic pipes and pipe fittings for municipal and housing projects. Its products include PVC and non-PVC segments, with a wide range of sizes. Tightened environmental regulations limited raw material supplies, and blended ASP rose by 10-20% in 2H16 relative to 1H16. ? Passing on cost increases – Intermediate material producers like China
Historical financials YE Dec (Rmb m) Revenue % growth EBITDA % growth EPS % growth EBIT Margin 2013A 13,071 20.0 2,279 21.1 0.48 17.1 17.4 2014A 14,823 13.4 2,520 10.6 0.50 4.2 17.0 2015A 15,264 3.0 2,653 5.3 0.52 4.0 17.4
Lesso raised prices last year, as raw material cost increased. This will likely push Lesso to see strong YoY revenue growth while maintaining its dollar margins. We believe order pull-in can drive operating efficiencies, reversing the effect of a downward price trend in 2H15 and 1H16. ? Market potential – Although the overall pipe and pipe fitting market relies on
Source: Company data, FactSet,February 2017
property construction demand, development of new town centres has raised demand for PVC pipes, especially for water-related infrastructure. As suppliers consolidate, China Lesso may see higher than industry growth as it expands outside of China’s southern region. Southern China currently accounts for 60% of Lesso’s total revenue. ? Main product segments – Lesso produces plastic pipes and pipe fittings,
7.0 6.0 5.0 4.0
1.2 1 0.8 0.6
3.0 2.0 1.0 0.0 Jan-16 Feb-16 Apr-16 Jun-16 Jul-16 Sep-16 Oct-16 Dec-16 0.4 0.2 0
which accounted for 90% of its sales in 1H16. Other sales are from building materials, its mall platform for plumbing accessories and other services related to building construction. 70% of its sales are from municipal pipes that connect to the new property projects, while others are used by contractors for property developments. Lesso shipped 768k tonnes of pipe and pipe fittings in 1H16, +11% YoY. ? Developing new opportunities – Water supply and drainage remain the
2128 HK Equity
HSI Relative
Source: Bloomberg, Company data, February 2017
main business segments, and Lesso can also see more significant growth with power supply and telecommunication usage of pipes. As municipal governments look for integrated approaches for pipe fittings, Lesso can benefit from demand in non-PVC products. ? Valuation comparisons – China Lesso currently trades at 8.3x and 7.5x
2016/17 Bloomberg consensus earnings. Near-term catalysts are a rise in municipal and property construction, spending in new municipal water projects and acquisition opportunities in China.
Analyst(s) Timothy Lam +852 3922 1086 timothy.lam@macquarie.com
15 February 2017
Macquarie Capital Limited
Please refer to page 5 for important disclosures and analyst certification, or on our website www.macquarie.com/research/disclosures. 14

SINGAPORE
MAGIC SP Price (at 05:50, 15 Feb 2017 GMT) Valuation - DCF (WACC 7.5%)
Outperform S$0.97 S$ 1.45
Mapletree GCCT Worst is over Event ? We believe the worse is over for Festival Walk, which accounts for 71% of our
12-month target S$ 1.13 Upside/Downside % +16.5 12-month TSR % +23.7 Volatility Index Low GICS sector Real Estate Market cap S$m 2,703 Market cap US$m 1,901 Free float % 62 30-day avg turnover US$m 3.5 Number shares on issue m 2,787 Investment fundamentals Year end 31 Mar Revenue EBIT EBIT growth Reported profit Adjusted profit EPS rep EPS rep growth EPS adj EPS adj growth PER rep PER adj Total DPS Total DPS growth Total div yield ROA ROE EV/EBITDA Net debt/equity P/BV m m % m m ¢ % ¢ % x x ¢ % % % % x % x 2016A 2017E 2018E 2019E 336.6 249.8 24.7 428.1 199.9 15.7 238.3 7.3 11.9 6.2 13.3 7.3 11.1 7.5 4.3 6.0 19.6 64.9 0.8 343.2 250.0 0.1 152.7 151.0 5.5 -64.8 5.5 -25.5 17.6 17.8 7.0 -3.1 7.3 4.1 4.4 19.7 67.3 0.8 349.9 255.8 2.3 155.8 155.8 5.6 1.3 5.6 2.5 17.3 17.3 7.0 -0.8 7.2 4.2 4.7 19.3 69.3 0.8 356.0 260.4 1.8 159.6 159.6 5.7 1.3 5.7 1.3 17.1 17.1 7.1 2.0 7.3 4.3 4.8 19.1 71.2 0.8
projected revenue in FY18 and 82% of NAV. As we expect retail sales to bottom out in CY3Q, the mall should be able to avoid negative rental reversion throughout the entire down cycle. Gateway Plaza surprised us by quickly refilling the space vacated by P2P tenants. The negative margin impact due to migration of BT to VAT and new property tax implementation should be fully reflected in FY3Q numbers announced. ? Compared to the average dividend yield of 6.8% for SGREITS, MAGIC is
slightly better at 7.3%. Although there is no plan for disposal, but its quality assets in prime locations in HK, BJ and SH can command very attractive market valuation. We reiterate our Outperform rating with a 24% TSR.
Impact ? After going through two FY of negative growth of tenant sales (-5% for FY16, -
10% for 3Q17) and footfall (-3.3% for FY16, -3.2% for 3Q17), Festival Walk should resume growth in FY18. From 2002 till 2015, the mall went through 12 years of almost interrupted growth in tenant sales with a CAGR of 8.2%. We expect FY17 sales of around HKS$4.8bn to be a stable base, on which future growth will be mainly driven by HK locals rather than by visitors. Thus, keys to upside comes from 1) competing and differentiating against nearby malls in Sha Tin and Mong Kok MTR stations and 2) attracting new traffic from a wider radius of customers. ? The strong rebound of Gateway Plaza occupancy highlights the leasing
MAGIC SP rel SNGPORI performance, & rec history
capability of the asset and leasing team. For the lease expiry to take place in FY18, one major tenant had already extended the lease to FY23. We expect stable performance for this Beijing office project going forward. We estimate 1.5% of impact on NPI due to conversion of business tax to VAT and 2.1% impact due to a harsher property tax. However, these two negative impacts should be reflected in the stock price already.
Earnings and target price revision ? DPU: FY17E -5.4% to reflect latest Q317 actual figures. Target price revised
from S$1.10/unit to S$1.13/unit due to lower cap rate applied to reflect open market trend. 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, February 2017 (all figures in SGD unless noted)
Price catalyst ? 12-month price target: S$1.13 based on a Sum of Parts methodology. ? Catalyst: HK monthly retail sales, DPU accretive acquisition
Action and recommendation Analyst(s) David Ng, CFA +852 3922 1291 Catherine Li +852 3922 1161 david.ng@macquarie.com catherine.li@macquarie.com
? After a DPU decline of 2.7% to S$0.071 in FY17 and S$0.070 in FY18, we
16 February 2017
Macquarie Capital Limited
expect it to rebound to S$0.071 in FY19. Stock correction of 15% since last September presents a good opportunity to buy at 7.3% yield. Further upside needs to come from new acquisition. The green-field office tower in Kowloon East, Mapletree Bay Point of over 600k sqft targets completion at the end of 2017 and may become an acquisition target in 2019.
Please refer to page 17 for important disclosures and analyst certification, or on our website www.macquarie.com/research/disclosures. 15

HONG KONG
17 HK Price (at 08:50, 15 Feb 2017 GMT) Valuation - DCF
Outperform HK$9.29 HK$ 17.63
New World Development Diversifying its base Event ? New World Development (NWDL) acquired the Cheung Sha Wan commercial
12-month target HK$ 13.15 Upside/Downside % +41.6 12-month TSR % +46.5 Volatility Index Low/Medium GICS sector Real Estate Market cap HK$m 89,958 Market cap US$m 11,593 Free float % 55 30-day avg turnover US$m 12.2 Number shares on issue m 9,683 Investment fundamentals Year end 30 Jun Revenue EBIT EBIT growth Reported profit Adjusted profit EPS rep EPS rep growth EPS adj EPS adj growth PER rep PER adj Total DPS Total DPS growth Total div yield ROA ROE EV/EBITDA Net debt/equity P/BV 2016A 2017E 2018E 2019E m 59,570 61,336 70,811 68,962 m 8,898 11,451 13,167 14,025 % -6.3 28.7 15.0 6.5 m 8,666 8,553 45,034 11,091 m 6,893 7,990 9,405 9,503 HK$ 0.96 0.92 4.79 1.18 % -57.1 -3.9 419.6 -75.4 HK$ 0.76 0.86 1.00 1.01 % -3.2 12.8 16.3 1.0 x 9.7 10.1 1.9 7.9 x 12.2 10.8 9.3 9.2 HK$ 0.44 0.45 0.46 0.48 % 4.8 2.3 2.2 4.3 % 4.7 4.8 5.0 5.2 % 2.3 2.8 3.0 3.1 % 3.8 4.4 4.6 4.2 x 12.4 9.7 8.6 8.6 % 39.7 28.4 21.5 18.9 x 0.5 0.5 0.4 0.4
site at a sales value of HK$7.79bn, or AV of HK$7.8k psf. The price is slightly above the market estimates (HK$6.0-7.5k psf). We expect it to develop into twin office towers and will be for sale, similar to Sun Hung Kai’s KCC project in Kwai Chung. We estimate a GP margin of 20% assuming ASP of HK$12.0k psf, which will translate into a limited NAV accretion of HK$0.03/sh. ? While the margin is not high, we think this acquisition can help diversify
NWDL’s saleable resources into non-residential segments. This can lower its sales risks under current cooling measures. We estimate its net gearing to go up by 4.3ppt, but the cash outflow will be largely offset by its property sales. ? NWDL is one of our picks in HK property. We expect company to re-rate in
the coming 12 months due to 1) incremental increase in rental income (>HK$3bn EBIT when mature) given the completion of NW Centre in late 2017; 2) improved execution in its China business and 3) more balanced stream of income from both property sales and rental income.
Impact ? Analysis of Cheung Sha Wan project. We estimate its GP margin of 19.7%
based on an ASP assumption of HK$12.0k psf, or limited NAV accretion of HK$0.03/sh when the company starts presales three years later (Figure 1). Total GFA of the project amounts to 1.0m sqft. It is next to a newly built international school and within five minutes’ walk to Lai Chi Kok MTR station. ? Net gearing to go up 4.3ppt under pro-forma analysis. We estimate its net
17 HK rel HSI performance, & rec history
gearing to go up by 4.3ppt, compared to 44.5% net gearing by the end of June 2016. However, the land payment outflow should be largely offset by strong sales in its recent new launch The Pavilia Bay in January 2017 (sales of ~HK$7bn) and outstanding proceeds from China project disposals. ? Good progress in New World Centre redevelopment. Its trophy project, the
NW Centre (3.2m sqft), is to complete in late 2017. Upon completion, we believe this project should further strengthen New World’s rental income portfolio and balance sheet. Any successful pre-leasing with better-thanexpected rent in both retail and office segments would be positive catalysts. ? HK contracted sales set to improve. We expect its HK sales to improve 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, February 2017 (all figures in HKD unless noted)
from HK$6.6bn in FY16 to ~HK$13-14bn p.a. in FY17-18. Since its debut in January, NWDL sold 744 units (76% of 983), generating revenue of HK$6.8bn. It released a fourth batch (114 units) for sale last Friday and delivered a take-up rate of 49%, compared to >90% in the first three rounds (~700 units). Upcoming new launches in 2017 include Mount Pavilia (680 units), Artisan House (250 units) and Tuen Mun project (100 units).
Analyst(s) Raymond Liu, CFA +852 3922 3629 Catherine Li +852 3922 1161 David Ng, CFA +852 3922 1291 raymond.liu@macquarie.com catherine.li@macquarie.com david.ng@macquarie.com
Earnings and target price revision ? No change.
Price catalyst ? 12-month price target: HK$13.15 based on a Sum of Parts methodology. ? Catalyst: Successful pre-leasing of NW Centre with better-than-expected rent
16 February 2017
Macquarie Capital Limited
Action and recommendation ? NWDL currently trades at 9.3x FY18E PE, 0.5x PB and 47% NAV discount.
Please refer to page 8 for important disclosures and analyst certification, or on our website www.macquarie.com/research/disclosures. 16

JAPAN
7915 JP Price (at 14:50, 14 Feb 2017 GMT) Valuation - Price to Book
Outperform ¥3,310 ¥ 4,000
Nissha Printing Sales increase and so do costs Event ? We raise device sales estimate to account for size changes in tablet PC
12-month target ¥ 4,000 Upside/Downside % +20.8 12-month TSR % +21.8 Volatility Index High GICS sector Commercial & Professional Services Market cap ¥m 149,049 Market cap US$m 1,308 Free float % 61 30-day avg turnover US$m 10.6 Foreign ownership % 25.7 Number shares on issue m 45.03 Investment fundamentals Year end 31 Dec Revenue EBIT EBIT growth Recurring profit Reported profit Adjusted profit EPS rep EPS rep growth EPS adj EPS adj growth PER rep PER adj Total DPS Total div yield ROA ROE EV/EBITDA Net debt/equity P/BV bn bn % bn bn bn ¥ % ¥ % x x ¥ % % % x % x 2015A 2016E 2017E 2018E 119.2 10.5 20.5 9.2 6.9 8.3 127.6 -48.9 152.6 -47.1 25.9 21.7 30.0 0.9 7.8 12.1 10.3 -5.1 2.6 118.0 -1.9 nmf -3.9 -5.0 -4.3 -93.2 nmf -80.2 nmf nmf nmf 30.0 0.9 -1.2 -6.5 31.5 24.0 2.8 133.1 7.7 nmf 8.1 5.9 6.6 109.0 nmf 122.9 nmf 30.4 26.9 30.0 0.9 5.0 10.1 10.6 17.2 2.6 204.3 17.6 129.6 18.1 13.7 14.7 253.5 132.6 272.0 121.4 13.1 12.2 40.0 1.2 10.6 20.0 6.5 9.1 2.3
models and larger smartphone volume in 2017, and introduce forecasts based on December-end financial year. Overall we think the roadmap is clear, and Nissha is one of the fastest-growing companies in our component coverage.
Impact ? Fiscal year change will be confusing, so apple-to-apple first. Nissha will
shift to December-end FY beginning April 2017, so FY17 will be a nine-month year. Therefore, for an apple-to-apple comparison based on March ending FY3/18, our forecast changes are: 1) tablet PC/smartphone device sales estimate raised from ¥60bn to ¥89bn; of the ¥29bn raise, ¥9bn comes from tablet PC and ¥20bn from smartphones; 2) upward revision on tablet PC is due to size change in models, as we think the product mix shift to larger sizes should boost average area by 18%, offsetting unit decline, so tablet PC sensor sales could be flat YoY vs our previous estimate of a decline; 3) POLED smartphone unit assumption raised from 60m to 77m units; and 4) forex assumption changed from ¥102/US$ to ¥110/US$ (translating to a ¥6.5bn increase in sales). ? Cost increase is bigger than what we had expected. Again, based on
7915 JP vs TOPIX, & rec history
March fiscal ending, we raise FY3/18E OP by about ¥1bn and FY3/19E by about ¥3bn vs. our original forecast, despite a ¥29bn upward revision in sales forecasts. In theory, we think marginal profit should be 30-40%, so a ¥29bn sales revision should translate into a ¥9-12bn marginal profit boost. However, given its ¥1.5bn labour cost increase guidance for 4Q FY3/17, we think labour cost increase is likely ¥5-6bn on an annualized basis in 2017, and there could be an additional ¥1-2bn fixed-cost increase. Our ¥2bn depreciation increase estimate for FY3/18 is unchanged. ? Peak OP likely in 2019. We estimate POLED smartphone will continue to rise
in 2018 as the adoption widens—our assumption is unchanged. On a 9-mth basis, we estimate 2017 OP will only rise to about ¥8bn, and expect OP to peak in 2019 on full-year impact of model transition. We think key areas to monitor in the next 1-2 years are: 1) threat of alternative technologies such as Y-OCTA; 2) market share changes, particularly in tablet PC and force touch sensor; and, 3) visibility of alternative materials replacing ITO film-based sensors. 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, February 2017 (all figures in JPY unless noted)
Earnings and target price revision ? For details on apple-to-apple changes, go to page 3. We introduce forecasts
Analyst(s) George Chang +81 3 3512 7854 Chenyu Yao +813 3512 7849 george.chang@macquarie.com chenyu.yao@macquarie.com
based on December-end FY. We raise TP from ¥3,400 (2.2x FY3/19E PBR) to ¥4,000 (2.8x 2018E PBR). Our TP suggests 15x 2018E PER.
Price catalyst ? 12-month price target: ¥4,000 based on a Price to Book methodology. ? Catalyst: Forex, POLED adoption extends to smartphone
15 February 2017
Macquarie Capital Securities (Japan) Limited
Action and recommendation ? Maintain Outperform.
Please refer to page 7 for important disclosures and analyst certification, or on our website www.macquarie.com/research/disclosures. 17

INDIA
PHNX IN Price (at 08:50, 15 Feb 2017 GMT) Valuation - DCF (WACC 16.6%)
Outperform Rs348.05 Rs 379.90
Phoenix Mills Malls continue to shine bright Event ? We attended the conference call of Phoenix Mills to discuss its 3Q FY17
12-month target Rs 380.00 Upside/Downside % +9.2 12-month TSR % +10.4 Volatility Index Medium GICS sector Real Estate Market cap Rsm 53,275 Market cap US$m 792 Free float % 36 30-day avg turnover US$m 0.3 Number shares on issue m 153.1 Investment fundamentals Year end 31 Mar Revenue EBIT EBIT growth Recurring profit Reported profit Adjusted profit EPS rep EPS rep growth EPS adj EPS adj growth PER rep PER adj Total DPS Total DPS growth Total div yield ROA ROE EV/EBITDA Net debt/equity P/BV 2016A 2017E 2018E 2019E m 17,786 18,015 18,951 20,183 m 6,128 8,438 9,117 9,889 % 3.2 37.7 8.0 8.5 m 2,134 6,020 6,057 6,891 m 1,186 4,034 4,058 4,617 m 1,186 4,034 4,058 4,617 Rs 8.18 27.83 28.00 31.85 % -5.1 240.1 0.6 13.8 Rs 8.18 27.83 28.00 31.85 % -5.1 240.1 0.6 13.8 x 42.5 12.5 12.4 10.9 x 42.5 12.5 12.4 10.9 Rs 2.79 4.34 4.37 4.97 % 20.6 55.8 0.6 13.8 % 0.8 1.2 1.3 1.4 % 8.8 11.4 12.0 12.7 % 6.8 20.1 17.3 17.0 x 11.5 9.3 8.7 8.1 % 187.1 153.2 129.5 108.0 x 2.7 2.3 2.0 1.7
results. The company had reported strong operating performance (aggregate consumption +10% yoy despite demonetisation) in its malls in 3Q FY17. We maintain our OP rating with a target price of Rs380.
Impact ? Renewal schedule provides strong visibility on rental growth: Large
spaces are coming up for rent renegotiation across various malls in the FY17-18E period (refer to fig 4). Rent renewals are likely to yield higher rents (than the standard 5% annual increase) as avg trading density growth is 6-14% across the malls. Total rent income (net rent) at Rs2bn in 3Q FY17 is up ~12% yoy. ? Debt not a concern as rents are ~1.6x interest payments: Annualised
rental income (including hotel properties) is ~1.6x annual interest payments. All the malls, except Kurla, are generating EBITDA which are sufficient to pay off interest (refer to fig 5). With rent renegotiations, we expect interest coverage to improve further in FY17-18E to 1.74-1.9x. ? Cautious on growth strategy – open to acquiring/building new malls:
Barring two small expansions at Kurla and Chennai malls, the company has a stable portfolio of operational malls. The company is open to the both building new malls and buying existing/ under-construction malls. However, the company is cautious in this aspect and will limit this exercise to select tier 1 and 2 cities in India and IRRs of 15-20%. ? Other highlights: 1) Out of the total debt of Rs39bn, ~93% debt is secured
PHNX IN rel BSE Sensex performance, & rec history
by discounting receivables like lease rental discounting (LRD) and Commercial mortgage based securities (CMBS), 2) H&M is opened at both Lower Parel and Kurla malls in 2Q FY17 which also helped consumption boost. Pantaloon has moved out of Lower Parel which will help in further improvement in tenant mix, 3) Interest cost continues to fall for the company. Blended interest cost has fallen by ~53bps in 9M FY17 and stands at 10.47%.
Earnings and target price revision ? No change. Note: Recommendation timeline - if not a continuous line, then there was no Macquarie coverage at the time or there was an embargo period.
Price catalyst ? 12-month price target: Rs380.00 based on a Sum of Parts methodology. ? Catalyst: pick up in consumption and rents at malls
Source: FactSet, Macquarie Research, February 2017 (all figures in INR unless noted)
Action and recommendation Analyst(s) Abhishek Bhandari , CFA +91 22 6720 4088 abhishek.bhandari@macquarie.com
? In our recent detailed note, Malls shining bright, Phoenix Mills has one of the
most attractive rent yielding portfolios amongst the listed real estate space in India. We maintain our Outperform rating with a target price of Rs380.
15 February 2017
Macquarie Capital Securities India (Pvt) Ltd
Please refer to page 6 for important disclosures and analyst certification, or on our website www.macquarie.com/research/disclosures. 18

KOREA
000810 KS Price (at 08:50, 15 Feb 2017 GMT) Valuation - P/EV
Outperform Won279,000 Won 310,000 Won 310,000 % +11.1 % +13.8 Low/Medium Insurance Wonbn 14,108 US$m 12,403 % 63 US$m 13.4 m 50.57
Samsung Fire & Marine Weaker results and conservative guidance for 2017 Event ? SFM released its 4Q16 NP of Won85bn, smaller than our Won178bn estimate
12-month target Upside/Downside 12-month TSR Volatility Index GICS sector Market cap Market cap Free float 30-day avg turnover Number shrs on issue Year end 31 Dec
and Won172bn Bloomberg consensus. In addition, its CFO gave conservative Won930bn 17E NP guidance. However, as 1) its weak results were from oneoffs and 2) we expect SFM to beat its guidance, we maintain O/P on SFM.
Impact ? Weaker 4Q16 was mainly due to one-offs: First, there was Won32bn one-
Investment fundamentals 2016A 2017E 2018E 2019E 18,440 -416 1,793 1,348 0 0 0 1,348 1,022 1,144 24,148 11.6 7,400 2.7 12,304 243,31 4 9.6 1.5 1.1 18,064 19,039 -405 1,962 1,533 0 0 0 1,533 1,162 1,275 26,919 10.4 8,400 3.0 13,108 259,22 9 10.0 1.6 1.1 19,143 bn 17,406 17,987 NEP -568 -441 Underwriting Result bn bn 1,688 1,844 Investment Income bn 1,094 1,365 Pretax PC Op Inc bn 0 0 Life Prem bn 0 0 Life Total Rev bn 0 0 Pretax Life Op Inc bn 1,094 1,365 PBT bn 841 1,034 Reported profit bn 880 1,113 Net Op Income Won 18,573 23,485 EPS adj x 15.0 11.9 PER adj Won 6,100 7,500 DPS % 2.2 2.7 Dividend yield bn 10,881 11,597 Total SH Funds Won 215,17 229,33 BV/S 9 1 % 8.4 9.9 ROE % 1.3 1.6 ROA x 1.3 1.2 P/BV bn 16,087 17,077 Tot Embedded Val
off losses in commercial line in Dec17 and, thus, its loss ratio for commercial line came in abnormally high at 101% vs. our estimate of 82%.Second, SFM recorded a Won62bn impairment loss from its stake in Samsung C&T. Third, obviously, there was valuation losses from rising interest rates. ? Won930bn 17E NP guidance is too conservative: SFM sold its old H/Q and
should post Won230bn gains in 1Q17. The CFO expected about Won100bn losses from other real estate disposals and depreciation to rise (cWon50bn in 2017) due to investments in the ERP system. However, considering 1) one-off costs in 2016, 2) benefits from higher interest rates, and 3) its improving underwriting results, we expect SFM’s NP to exceed Won1.0trn in 2017. ? Bigger EV and stronger VIF – ROEV improved to 11.6%: The insurer’s
ANW increased 10.7% YoY mainly due to the increase in the value of its stake holdings (Samsung Electronics). In addition, its VIF came in stronger than expected at Won5.5trn (+8.3% YoY). As a result, SFM’s ROEV came in at 11.6% in 2016 versus 8.1% in 2017. ? Slightly smaller DPS, in-line payout ratio, and guiding for share
000810 KS rel KOSPI performance, & rec history
buybacks: SFM announced 2016 DPS of Won6,100, which was smaller than our estimate of Won6,800. However, it was mainly due to smaller earnings in 4Q16. SFM’s payout ratio (31%) was in-line with our estimate and, thus, we expect its DPS to increase to Won7,500 in 2017. The CFO mentioned that SFM is positively considering share buybacks in the near future.
Earnings and target price revision ? We reflected 4Q16 results, expected net disposal gains from real estate
Note: Recommendation timeline - if not a continuous line, then there was no Macquarie coverage at the time or there was an embargo period.
(Won130bn) based on the managements’ guidance, and potential increase in depreciation, which resulted in +0.3%/-5.5% changes in 17E/18E EPS, respectively. No change in our price target due to bigger EV than expected.
Source: FactSet, Macquarie Research, February 2017 (all figures in Won unless noted, TP in KRW)
Price catalyst ? 12-month price target: Won310,000 based on a P/EV methodology. ? Catalyst: 1. Signs of bottoming interest rate cycle, 2. Regaining momentum in
Analyst(s) Chan Hwang +82 2 3705 8643 chan.hwang@macquarie.com
long-term line growth, and 3. Clear guidance for efficient capital management
Action and recommendation ? Given weak 4Q16 results and conservative 2017 guidance, we think the stock
16 February 2017
Macquarie Securities Korea Limited
could be under pressure in the short term. However, as its weak 4Q16 was from one-offs and we expect SFM to beat its guidance, we recommend investors to accumulate SFM using possible weaknesses in its share price.
Please refer to page 5 for important disclosures and analyst certification, or on our website www.macquarie.com/research/disclosures. 19

HONG KONG
981 HK Price (at 10:48, 15 Feb 2017 GMT) Valuation - PER
Outperform HK$10.68 HK$ 15.00
SMIC Long-term growth target unchanged Event ? SMIC’s 4Q16 OP missed, but was offset by non-controlling interests. It guides
12-month target HK$ 15.00 Upside/Downside % +40.4 12-month TSR % +40.4 Volatility Index Medium GICS sector Semiconductors & Semiconductor Equipment Market cap HK$m 48,583 Market cap US$m 6,624 30-day avg turnover US$m 25.6 Number shares on issue m 4,549 Investment fundamentals Year end 31 Dec 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 2016A 2017E 2018E 2019E m 2,914.2 3,540.8 4,282.6 5,142.3 m 339.2 419.5 523.4 652.2 % 52.8 23.7 24.8 24.6 m 376.6 433.9 528.0 650.2 ¢ 8.9 10.2 12.4 15.3 % 35.7 14.5 21.7 23.2 x 15.5 13.5 11.1 9.0 ¢ 0.0 0.0 0.0 0.0 % 0.0 0.0 0.0 0.0 % 3.9 4.0 4.5 5.0 % 9.6 9.9 10.9 12.0 x 5.8 4.0 3.4 2.7 % 6.4 23.8 32.2 34.8 x 1.4 1.3 1.1 1.0
1Q17 revenue to decline 2-4% QoQ, with gross margin at 25-28%. SMIC reiterates its target to grow revenue by a 20% CAGR in 2016-19. We reiterate our Outperform rating but trim our target price from HK$16.0 to HK$15.0.
Impact ? 4Q16 OP miss offset by non-controlling interests: Revenue of US$815m
and gross margin of 30.2% were in line with expectations. Operating profit missed our/consensus’ by 45/55% due to higher R&D expenses and accrued employee bonus. However, the lower operating profit was largely offset by non-controlling interests of US$46m, which is mainly due to R&D expenses shared by Beijing JV partners. Overall, 4Q16 earnings beat our numbers by 11% but missed consensus’ by 12%. ? 1Q17 seasonal weakness: SMIC guides for 1Q17 revenue to decline 2-4%
QoQ, with gross margin at 25-28%. SMIC attributes the weaker 1Q17 revenue to seasonality and weakness in certain customers/area (e.g., fingerprint customer), but it expects to fill the gap with new customers and other applications like PMIC and smartcards. The lower gross margin is mainly due to lower utilization and higher depreciation costs. ? 2017 driven by strong demand for 28nm/40nm: SMIC reiterates its target
981 HK rel HSI performance, & rec history
to grow revenue by a 20% CAGR in 2016-19. Key growth drivers for 2017 are strong demand for 28nm/40nm and a more diverse variety of mature technologies. It expects 28nm to account for a high-single-digit % of revenue by 4Q17 (vs 3.5% in 4Q16). The company also guides gross margin to be in the high-20s% for 2017, and the opex-to-sales ratio at a high-teens%. SMIC also plans to spend US$2.3bn capex for 2017, mainly for 12” capacity expansion.
Earnings and target price revision ? We factor in 4Q16 results and trim our 2017/18E EPS by 4%/7% on lower Note: Recommendation timeline - if not a continuous line, then there was no Macquarie coverage at the time or there was an embargo period.
margin assumption. Accordingly, we adjusted target price from HK$16.0 to HK$15.0 on unchanged 19x 2017E PE.
Source: FactSet, Macquarie Research, February 2017 (all figures in USD unless noted, TP in HKD)
Price catalyst ? 12-month price target: HK$15.00 based on a PER methodology. ? Catalyst: earnings results/outlook, progress of advanced technologies.
Action and recommendation Analyst(s) Patrick Liao +886 2 2734 7515 Lynn Luo +886 2 2734 7534 patrick.liao@macquarie.com lynn.luo@macquarie.com
? We reiterate our Outperform rating with a new target price of HK$15.0 (19x
2017E PE). We believe SMIC will continue to benefit from rising Chinese IC demand and a 28nm ramp-up. We expect SMIC’s earnings to register a 22% CAGR in 2017-19, and remain positive on the long-term sustainability of its core foundry business.
15 February 2017
Macquarie Capital Limited, Taiwan Securities Branch
Please refer to page 6 for important disclosures and analyst certification, or on our website www.macquarie.com/research/disclosures. 20

JAPAN
8113 JP Price (at 14:51, 09 Feb 2017 GMT) Valuation - DCF
Neutral ¥2,546 ¥ 2,4003,000 2,500 -1.8 -1.2 Medium
Unicharm Lowered Volume Growth Outlooks for Chinese and Indonesian Markets Conclusion ? Unicharm reported ¥78.3bn (-2% YoY) in FY12/16 OP, exceeding our forecast
12-month target ¥ Upside/Downside % 12-month TSR % Volatility Index GICS sector Household & Personal Products Market cap ¥bn Market cap US$m 30-day avg turnover US$m Number shares on issue m Investment fundamentals Year end 31 Dec Revenue EBIT EBIT growth Recurring profit Reported profit Adjusted profit EPS rep EPS rep growth EPS adj EPS adj growth PER rep PER adj Total DPS Total div yield ROA ROE EV/EBITDA Net debt/equity P/BV bn bn % bn bn bn ¥ % ¥ % x x ¥ % % % x % x
1,580 13,988 31.8 620.8
(¥76bn) and the consensus estimate (¥77.3bn). Yet it guides for ¥84bn in FY12/17 OP (IFRS basis; +6% YoY), which is below our forecast (¥85bn) and the consensus estimate (¥85.6bn). The FY12/17 OP guidance only works out to a 1% YoY gain in real terms excluding one-time costs from FY12/16 (¥4.2bn). ? Unicharm previously targeted double-digit profit growth in its period-start plan.
2015A 2016E 2017E 2018E 738.7 79.9 nmf 71.4 40.5 39.2 66.7 nmf 64.4 nmf 38.2 39.5 14.8 0.6 11.4 9.7 13.0 -15.4 3.9 717.6 76.0 -4.9 72.2 39.6 40.8 65.4 -1.9 67.9 5.4 38.9 37.5 13.0 0.5 11.0 10.9 13.0 -9.6 4.2 756.6 85.0 11.8 84.2 45.5 50.1 76.8 17.5 84.0 23.6 33.1 30.3 15.0 0.6 11.6 12.4 11.7 -21.5 3.3 803.6 95.6 12.5 94.8 53.6 58.2 91.1 18.7 98.5 17.3 27.9 25.8 18.0 0.7 11.7 12.2 10.4 -27.0 2.8
The FY12/17 guidance, however, uses weaker assumptions for earnings growth. We attribute this view to slower market growth in China and Indonesia than initially expected. Unicharm reduced market volume growth for China from 6-7% annually to 3-5%. While the Indonesian market had been sustaining a pace of 10% or more, it slowed to 2% recently. Key issues amid weaker volume growth are expansion of high value-added products and broadening the scope of people who use baby disposable diapers. ? Unicharm presented a share buyback program (up to ¥14bn) along with the
FY12/16 results announcement.
Impact ? We think Unicharm resolved the inventory issue for Indonesia that emerged in
8113 JP vs TOPIX, & rec history
FY12/16, and removal of one-time costs from this situation (¥4.2bn) offers a positive factor for FY12/17 earnings. Yet we do not expect full-fledged profit recovery until after the release of new products in 2H. We also see a possibility of losses continuing for the Indonesia business in 1H FY12/17 due to higher competition-related costs. ? We believe Unicharm’s sales of baby disposable diapers in China dropped by
an upper single-digit rate in FY12/16. Japan-made imports appear to have risen to over 60% of sales (vs. about 40% in FY12/15). Unicharm aims to increase sales by an upper single-digit percentage in FY12/17 driven by expansion of the online channel and reinforcement of Japan-made imports and pull-up diapers.
Earnings and target price revision 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, February 2017 (all figures in JPY unless noted)
? We maintain our forecasts and ¥2,500 price target.
Price catalyst ? 12-month price target: ¥2,500 based on a Price to Book methodology. ? Catalyst: Profit levels in China and Indonesia in quarterly results should
Analyst(s) Satsuki Kawasaki +81 3 3512 7879 satsuki.kawasaki@macquarie.com
remain an important factor for the share-price trend.
Action and recommendation ? We maintain our Neutral rating.
15 February 2017
Macquarie Capital Securities (Japan) Limited
Please refer to page 5 for important disclosures and analyst certification, or on our website www.macquarie.com/research/disclosures. 21

INDIA
VEDL IN Price (at 14:50, 14 Feb 2017 GMT) Valuation - Sum of Parts
Outperform Rs256.05 Rs 340.00
Vedanta Triggers lined up Event ? Strong standalone earnings: VEDL’s standalone 3Q17 EBITDA at Rs19bn,
12-month target Rs 340.00 Upside/Downside % +32.8 12-month TSR % +35.2 Volatility Index High GICS sector Materials Market cap Rsm 759,110 Market cap US$m 11,331 Free float % 36 30-day avg turnover US$m 34.8 Number shares on issue m 2,965 Investment fundamentals Year end 31 Mar Revenue EBIT EBIT growth Recurring profit Reported profit Adjusted profit EPS rep EPS rep growth EPS adj EPS adj growth PER rep PER adj Total DPS Total div yield ROA ROE EV/EBITDA Net debt/equity P/BV bn bn % bn bn bn Rs % Rs % x x Rs % % % x % x 2016A 2017E 2018E 2019E 644.3 80.0 -46.1 67.5 155.8 31.3 52.55 nmf 10.55 -51.3 4.9 24.3 3.50 1.4 4.2 6.3 6.3 32.6 1.7 789.6 155.6 94.6 120.3 58.1 58.1 19.59 -62.7 19.59 85.6 13.1 13.1 3.92 1.5 8.1 12.4 4.1 19.2 1.5 987.4 1,048.8 235.7 264.2 51.5 12.1 210.1 254.7 118.7 149.0 118.7 149.0 31.92 40.10 63.0 25.6 31.92 40.10 63.0 25.6 8.0 6.4 8.0 6.4 6.38 8.02 2.5 3.1 11.8 12.5 22.1 23.3 3.6 3.3 4.2 -13.9 1.6 1.4
+86% YoY was 3% ahead of our estimates led by aluminium and power division. Management maintained the guidance of Cairn merger by Mar-17 but we expect a quarter delay. With limited capex, VEDL standard business could become FCF breakeven in FY17 and help deleverage from FY18E. Further, volume ramp up in Aluminium, power and iron ore division with supportive commodity prices would drive 25% cagr EBITDA growth in FY17-19E. Key near term triggers are completion of Cairn merger, dividend policy, increase in index weights, earnings upgrade and potential high dividend from HZL. Reiterate Outperform. Our TP of Rs340/share, implying +35% upside in 1 year.
Impact ? Strong 3Q17 across businesses: While consol revenue was +31% YoY
whereas consol EBITDA of Rs59bn was +89% YoY led by stronger Zn prices, and higher volumes at Al, Power and Iron ore division. EPS of Rs6.3 vs. Rs0.1 in 3Q16. Aluminium volumes were +21% YoY with EBITDA margin of $392/t vs. $165/t YoY driven by stronger metal prices. Ramp up at 1.9GW Talwandi Sabo power plant improved power division margins to Rs1.3/unit, +18% YoY. Zinc International witnessed price tailwinds whereas Iron ore division witnessed stronger volumes (refer Fig 1 on page 2 for details). ? Cairn Merger – Any risk? The Cairn merger requires approval from RBI,
National Company Law Tribunal and ministry of petroleum. We believe these are regulatory formalities and cannot put the merger under threat. We only see a delay risk in the event. VEDL has maintained its earlier guidance of Mar-17 for competition, however, bureaucracy can result in 2-3 months delay. ? Multiple growth avenues: VEDL has received an approval to mine 3mnt
VEDL IN rel BSE Sensex performance, & rec history
additional iron ore at Goa in 4Q17 above their 5.5mnt annual quota. It has sought higher production approval for FY18E and we are building 15% YoY volume growth. 2GW TSL power plant as achieved 77% availability in 3Q17 and expect to run at 80-85% PAF in FY18-19E. VEDL is aggressively ramping up aluminium production under VAL, Balco and we expect +51% YoY volume in FY18E. Captive bauxite mines post on going ramp up would feed 30% of bauxite requirement. Further, any success in securing bauxite from state government would provide significant margin upside. ? Other events to watch out: Cairn merger would give VEDL access to $3.5bn
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, February 2017 (all figures in INR unless noted)
cash. VEDL has guided to finalise its dividend policy after the merger and interest obligations of parent, Vedanta Plc, could result in high dividends from FY18E. Also, VEDL’s free-float post-merger would increase by 68% or $2.6bn at spot prices and should demand higher weight in benchmark indices
Earnings and target price revision Analyst(s) Sumangal Nevatia, CFA +91 22 6720 4093 sumangal.nevatia@macquarie.com
? No Change.
Price catalyst ? 12-month price target: Rs340.00 based on a Sum of Parts methodology. ? Catalyst: Closure of Cairn Merger, PSC extension and earnings upgrades
15 February 2017
Macquarie Capital Securities India (Pvt) Ltd
Action and recommendation ? VEDL is our top pick in metals sector. Reiterate Outperform.
Please refer to page 8 for important disclosures and analyst certification, or on our website www.macquarie.com/research/disclosures. 22

INDIA India’s goods exports and imports YoY% 30% 20%
India Insight Exports Imports
Goods trade deficit narrows; need to watch out for external factors ? CAD to remain manageable in FY18: We expect India’s CAD to remain
10% 0% -10% -20% -30% Jan-14 Oct-14 Jul-15 Apr-16 Jan-17
Source: CEIC, Macquarie Research, February 2017
contained at 0.9% of GDP in FY17 and 1.2% of GDP in FY18. To arrive at these forecasts we have assumed (a) global crude oil prices to average ~US$49/bbl in FY17 and ~US$57.5/bbl in FY18, (b) improvement in global growth outlook (IMF expects global growth to pick up from 3.1% YoY in 2016 to 3.4% YoY in 2017) and (c) reasonable gold imports on contained inflation, positive real deposit rates available to households and measures taken by the government to curb black money. ? But rising oil prices and protectionist policies in US a key concern
CAD to remain manageable 0 -20
? 0% -1%
-40 -60 -80
-2% -3% -4%
-100 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17E FY18E
-5%
The risk of protectionist policies in US (including proposed H-1B visa reforms) could have adverse implications on exports of IT services, pharma and others from India as well as the remittance flows from overseas Indians. We note that as per the survey conducted by the RBI (link), US and Canada together accounted for ~60% share in total exports of computer services and ITES/BPO services (excluding commercial presence) during FY15 (US$88bn). As per World Bank data, the US is the second-largest source of remittance flows to India (accounting for ~16% share in total remittance inflows to India of US$63bn as of FY16). India’s oil price sensitivity: Our estimates suggest that a US$10/bbl increase in global crude oil prices increases India’s import bill and, hence, CAD by US$11bn (0.5% of GDP). Considering the rupee is already in the overvalued territory on a REER basis and adjusted for productivity, India’s high vulnerability to oil indicates that there could be depreciation bias on the rupee (USD/INR) in the event of rising global crude oil prices.
?
US$ bn
as % of GDP
E = Macquarie estimates Source: CEIC, Macquarie Research, February 2017
Movement in Real Effective Exchange Rate (REER)* 120 115 110 105 100 95 Apr-06 Undervalued (-1 std deviation) Mean Overvalued (+1 std deviation)
What is in the details? ? Monthly trade deficit (TD) narrows to US$9.8bn (5.3% of GDP annualized)
in Jan as imports slowed sequentially more than exports: This compares with the US$10.4bn registered in Dec. On a three-month trailing annualised basis, the TD widened to 2.7% of GDP (vs 2.5% of GDP in Dec). ? Goods export growth (in dollar terms) decelerated in Jan: While the
Apr-09
Apr-12
Apr-15
goods export growth decelerated to 4.3% YoY (vs 5.7% YoY in Dec), it has remained in positive territory for the past five consecutive months. Looking at the breakdown, the pick-up in exports during the month of Dec was largely led by petroleum products (29% YoY) and engineering goods (12% YoY), iron ore, etc, even as a slowdown was visible in gems & jewellery (-4.5% YoY), drugs & pharmaceuticals (-11.6%YoY), etc, amongst others. ? Goods import growth (in dollar terms) accelerated to 10.7% YoY largely
*based on CPI, 36-currency trade weighted basis Source: CEIC, Macquarie Research, February 2017
Analyst(s) Tanvee Gupta Jain +91 22 6720 4355 tanvee.guptajain@macquarie.com
15 February 2017
Macquarie Capital Securities India (Pvt) Ltd
on a favourable base effect: This compares with 0.5% YoY registered in Dec. In terms of commodity composition, (a) oil imports were up 61% YoY in Dec on a rise in global crude oil prices, (b) gold imports remained largely muted at US$2bn in Jan, similar to the previous month, and (c) non-oil, nongold import growth, an indicator of domestic demand, was supported at 4.2% YoY, partly on base effect (vs 4.4% YoY in Dec). Looking at the breakdown, compared with the same period last year, while a rebound was seen in imports of electronic goods and coal, coke & briquettes, etc, a decline was seen in other categories, including iron & steel, fertilisers, etc.
Please refer to page 6 for important disclosures and analyst certification, or on our website www.macquarie.com/research/disclosures. 23

HONG KONG Top picks in Hong Kong Property Mkt Share cap px US$bn HK$/sh TP TSR HK$/sh %
Hong Kong Property Focus on growing rental portfolios Event ? Read-through from Langham Hospitality Inv’s FY16 results (1270 HK, LHI,
16 HK Sun Hung Kai 40.5 108.5 145.84 38% 823 HK Link REIT 15.2 53.8 59.7 16% 17 HK New World 11.6 9.29 13.15 47% Source: Bloomberg, Macquarie Research, February 2017
Upcoming HK investment property completions (including hotels) in next 12-18 months 3.0 2.5
NR) corroborates our view set out in our note ‘Prepare ahead of the slowdown’ that organic growth of the HK property rental market is in for a slowdown in the years ahead. LHI expects weakness to emerge in 2017, despite a stabilization of RevPARs for HK hotels in 2016. While HK retail sales showed continued improvement in retail sales with a slower decline, the downtrend may linger in the coming 12 months, given the potential weaker demand from tourists, one of the key sources of revenue for shopping malls in Hong Kong, in our view. ? We suggest investing in companies with growing rental income portfolios and
2.0 1.5 1.0
0.5 New World Dev
-
K Wah
Henderson Land
Sino Land
Wheelock
CK Property
Sun Hung Kai
good execution in asset enhancement initiatives (AEI). Those with more new commercial completions should deliver additional recurrent income and growth. New World (17 HK) and Sun Hung Kai (16 HK) will have the largest amount of commercial GFA completion, while Link REIT (823 HK) has a strong track record in AEI.
Kerry
Impact ? Henderson Land (12 HK) trimming its hotel business. The company
Source: Company data, Macquarie Research, February 2017
HK visitor arrivals and spending Overnight visitor per capita spending (HK$000s, LHS)
Visitor arrivals (m, RHS) 9 8 7 6 30
recently sold its 598-room Newton Place Hotel for HK$2.3bn (avg room price of HK$3.8m/room) and is negotiating to dispose of its 317-room Newton Inn North Point for HK$1.1bn. Last year the company pulled down the shutters on its Newton Hotel Hong Kong and plans to redevelop it into an office building. We see this as a good move to unlock value and to improve yield on assets. ? Hotel operators’ outlook in 2017 – ‘emerging signs of weakness’. LHI
70 60 50 40
5 4 3
20 10 0
believes there are signs of weakness emerging in 2017, despite a stabilization of RevPARs for HK hotels in 2016. LHI believe this weakness would be due to: 1) strength of the HKD making HK relatively expensive to international travellers; 2) intensifying geopolitical and economic uncertainties weighing on corporate and leisure travel; and 3) more new hotel supply in 2017. ? Hotel business turned stable in 2016. According to Hopewell (54 HK), its
Source: HK tourism board, Macquarie Research, February 2017
Panda Hotel (911 rooms), one of the most popular destinations for Chinese visitors, saw a mild decline of 2% in revenue last year. The company commented, “The downward trend for room revenue has become more stable in 2H… and the average room rate remained flat yoy.” This compared to a yearly drop in average room rate by 18% during July 2015-June 2016. ? Key statistics of Hong Kong tourism business in 2016
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
? Overnight visitor per capita spending dropped 7.4% YoY to HK$6.7k , reaching a 7-year low, compared to a 9.1% decline in 2015 Analyst(s) Raymond Liu, CFA +852 3922 3629 Catherine Li +852 3922 1161 David Ng, CFA +852 3922 1291 raymond.liu@macquarie.com catherine.li@macquarie.com david.ng@macquarie.com
? Total visitor arrivals were down 4.5% YoY to 56.7m in 2016, compared to a 2.5% decline in 2015. ? Mainland Chinese, who accounted for 76% of total arrivals, were down 6.7% YoY in 2016. ? Total number of hotel rooms increased 1.4% YoY to 74.9k rooms. It is expected to grow 6.0% and 6.7% in 2017-18E, according to HKTB.
15 February 2017
Macquarie Capital Limited
Outlook ? Our picks are Sun Hung Kai Properties, New World Dev and Link REIT.
Please refer to page 7 for important disclosures and analyst certification, or on our website www.macquarie.com/research/disclosures. 24

GLOBAL LME cash price US$/tonne 1,875 6,004 2,349 10,715 19,901 2,904 42,500 14,897 % change day on day 0.4 -1.6 -2.9 0.3 -0.4 -0.7 0.6 0.0
Commodities Comment Global industry set for solid 2017 Feature article ? The global industrial recovery accelerated into year-end, our analysis shows,
Aluminium Copper Lead Nickel Tin Zinc Cobalt Molybdenum Other prices
underpinning the recovery in metals markets. The sector should continue to see healthy growth in 2017, though we expect the YoY growth rate is near its peak and see a number of downside risks further out. ? Global output rose a modest 0.12% in December, but that was following a
Gold (US$/oz) Silver (US$/oz) Platinum (US$/oz) Palladium (US$/oz) Oil WTI USD:EUR exchange rate AUD:USD exchange rate LME/COMEX stocks Aluminium LME copper Comex copper Lead Nickel Tin Zinc
1,231 17.91 1,002 779 53.19 1.057 0.763
% change day on day 0.7 -0.4 1.0 1.0 0.4 -0.3 -0.1
jump higher in November and so over 4Q as a whole output grew by 0.96% QoQ, the best such performance since 4Q 2013. Importantly there has been a clear sequential acceleration in growth each quarter in 2016.
Latest news ? After a buoyant couple of trading days, base metals sold off on Tuesday led
Tonnes 2,220,775 243,350 99,751 189,175 381,546 5,880 381,300
Change -5,075 -4,475 670 600 -1,494 0 -2,350
Source: LME, Comex, Nymex, SHFE, Metal Bulletin, Reuters, LBMA, Macquarie Research
by copper, as news of the striking labour union at Escondida agreeing to sit down with the government for mediation in their talks with the mine operator seemed to push some nervous longs into getting out. We do think Escondida going back to work will be the trigger for a near-term price reversal, but this event is not it (the miners are merely agreeing to return to the negotiating table) and rather serves to highlight speculator overreaction to news flow currently: LME COT data had also come out today, revealing a small gain in Money Manager length to a new 2017 high of 72.4k lots, from 69.5k a week prior, and with the Chinese loans data coming in below expectations (see below), the market turned bearish from the UK afternoon onwards. Having seen a brief moment above $6,200/t yesterday, prices slid to just below $6,000/t just before the close before recovering slightly back above the line. Nickel, zinc and lead also fell, taking the cue from copper it seemed, with the latter seeing the biggest decline of 2.9% on an LME cash basis. ? China released the money supply data for January on Tuesday. Banks’ new
Analyst(s) Macquarie Capital (Europe) Limited Matthew Turner +44 20 3037 4340 matt.turner@macquarie.com Colin Hamilton +44 20 3037 4061 colin.hamilton@macquarie.com Jim Lennon, Senior Commodities Consultant +44 20 3037 4271 jim.lennon@macquarie.com Vivienne Lloyd +44 20 3037 4530 vivienne.lloyd@macquarie.com Macquarie Capital Securities (Singapore) Pte. Limited Ian Roper +65 66010698 ian.roper@macquarie.com Macquarie Capital Limited Lynn Zhao +86 21 2412 9035 lynn.zhao@macquarie.com
lending was Rmb2.03Tn last month, lower than the Rmb2.5Tn new lending last January and also lower than the consensus market expectations of Rmb2.5~3Tn. Most of the new lending was issued as medium-long term loans for non-financial enterprises, which reached Rmb1.52Tn in January. Money supply M2 increased by 11.3% YoY last month, flat from the growth rate last December but lower than the 14% YoY growth same time last year. Despite the YoY decline in new bank lending, total social financing (TSF) climbed by Rmb3.74Tn in January, Rmb216.9Bn higher than last January. The increase was driven by higher off-balance loans like banker acceptance bills and trusted loans, while enterprises’ bond financing declined after the sell-off in the bond market. ? UK trade data for full year 2016, released on Friday, showed the UK exported
14 February 2017
401t of gold, down from 697t in 2015, but imported 1,414t, up from 271t, meaning a net inflow of just over 1,000t, the most since 2009. The reason for this is well understood – a surge in ETF and other investor purchases, bringing gold in from Switzerland, the US, Australia and even Asia. It partially reversed in the last two months, as gold flowed out once again, mainly to Switzerland. Separately this week the Bank of England started to publish monthly data on its gold holdings held not just on behalf of the UK government and the Bank’s own reserves, but for foreign central banks and commercial firms in London. As of October these were 305t higher YTD, a smaller increase than one might expect given the import data.
Please refer to page 7 for important disclosures and analyst certification, or on our website www.macquarie.com/research/disclosures. 25
Macquarie Research Important disclosures: Recommendation 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 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 – 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


Volatility index definition* This is calculated from the volatility of historical price movements. 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 Recommendations – 12 months Note: Quant recommendations may differ from Fundamental Analyst recommendations
Financial definitions 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 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).
Recommendation proportions – For quarter ending 31 December 2016 Outperform Neutral Underperform AU/NZ 57.53% 33.90% 8.56% Asia 50.72% 33.97% 15.30% RSA 45.57% 43.04% 11.39% USA 42.28% 50.11% 7.61% CA 60.58% 37.23% 2.19% EUR 52.79% (for global coverage by Macquarie, 8.71% of stocks followed are investment banking clients) 35.62% (for global coverage by Macquarie, 8.05% of stocks followed are investment banking clients) 11.59% (for global coverage by Macquarie, 4.63% of stocks followed are investment banking clients)
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27

Asia Research Head of Equity Research Peter Redhead (Global – Head) Jake Lynch (Asia – Head) David Gibson (Japan – Head) Conrad Werner (ASEAN – Head) (852) 3922 4836 (852) 3922 3583 (813) 3512 7880 (65) 6601 0182
Industrials Janet Lewis (Asia) Patrick Dai (China) Kunio Sakaida (Japan) William Montgomery (Japan) James Hong (Korea) Benson Pan (Taiwan) Inderjeetsingh Bhatia (India) Justin Chiam (Singapore) (813) 3512 7856 (8621) 2412 9082 (813) 3512 7873 (813) 3512 7864 (822) 3705 8661 (8862) 2734 7527 (9122) 6720 4087 (65) 6601 0560
Telecoms Soyun Shin (Korea) Prem Jearajasingam (ASEAN) Kervin Sisayan (Philippines) (822) 3705 8659 (603) 2059 8989 (632) 857 0893
Transport & Infrastructure Janet Lewis (Asia) Corinne Jian (Taiwan) Azita Nazrene (ASEAN) (852) 3922 5417 (8862) 2734 7522 (603) 2059 8980
Automobiles/Auto Parts Janet Lewis (China, Japan) Takuo Katayama (Japan) James Hong (Korea) Amit Mishra (India) (813) 3512 7856 (1 212) 231 1757 (822) 3705 8661 (9122) 6720 4084
Internet, Media and Software Wendy Huang (Asia, China) David Gibson (Asia, Japan) Hillman Chan (China, Hong Kong) Soyun Shin (Korea) Abhishek Bhandari (India) (852) 3922 3378 (813) 3512 7880 (852) 3922 3716 (822) 3705 8659 (9122) 6720 4088
Utilities & Renewables Patrick Dai (China) Candice Chen (China) Alan Hon (Hong Kong) Inderjeetsingh Bhatia (India) Prem Jearajasingam (Malaysia) Karisa Magpayo (Philippines) (8621) 2412 9082 (8621) 2412 9087 (852) 3922 3589 (9122) 6720 4087 (603) 2059 8989 (632) 857 0899
Financials Scott Russell (Asia) Dexter Hsu (China, Taiwan) Keisuke Moriyama (Japan) Chan Hwang (Korea) Suresh Ganapathy (India) Sameer Bhise (India) Gilbert Lopez (Philippines) Ken Ang (Singapore) Passakorn Linmaneechote (Thailand) (852) 3922 3567 (8862) 2734 7530 (813) 3512 7476 (822) 3705 8643 (9122) 6720 4078 (9122) 6720 4099 (632) 857 0892 (65) 6601 0836 (662) 694 7728
Oil, Gas and Petrochemicals Polina Diyachkina (Asia, Japan) Aditya Suresh (Asia, China, India) Anna Park (Korea) Duke Suttikulpanich (ASEAN) Isaac Chow (Malaysia) (813) 3512 7886 (852) 3922 1265 (822) 3705 8669 (65) 6601 0148 (603) 2059 8982
Commodities Colin Hamilton (Global) Ian Roper Jim Lennon Lynn Zhao Matthew Turner (44 20) 3037 4061 (65) 6601 0698 (44 20) 3037 4271 (8621) 2412 9035 (44 20) 3037 4340
Conglomerates David Ng (China, Hong Kong) Conrad Werner (Singapore) Gilbert Lopez (Philippines) (852) 3922 1291 (65) 6601 0182 (632) 857 0892
Pharmaceuticals and Healthcare Abhishek Singhal (India) Wei Li (China, Hong Kong) (9122) 6720 4086 (852) 3922 5494
Economics Peter Eadon-Clarke (Global) Larry Hu (China, Hong Kong) Tanvee Gupta Jain (India) (813) 3512 7850 (852) 3922 3778 (9122) 6720 4355
Consumer and Gaming Linda Huang (Asia, China, Hong Kong) Zibo Chen (China, Hong Kong) Terence Chang (China, Hong Kong) Sunny Chow (China, Hong Kong) Satsuki Kawasaki (Japan) Mike Allen (Japan) Kwang Cho (Korea) KJ Lee (Korea) Stella Li (Taiwan) Amit Sinha (India) Fransisca Widjaja (Indonesia, Singapore) Karisa Magpayo (Philippines) Chalinee Congmuang (Thailand) (852) 3922 4068 (852) 3922 1130 (852) 3922 3581 (852) 3922 3768 (813) 3512 7870 (813) 3512 7859 (822) 3705 4953 (822) 3705 9935 (8862) 2734 7514 (9122) 6720 4085 (65) 6601 0847 (632) 857 0899 (662) 694 7993
Property Tuck Yin Soong (Asia, Singapore) David Ng (China, Hong Kong) Raymond Liu (China, Hong Kong) Wilson Ho (China) William Montgomery (Japan) Corinne Jian (Taiwan) Abhishek Bhandari (India) Aiman Mohamad (Malaysia) Kervin Sisayan (Philippines) Patti Tomaitrichitr (Thailand) (65) 6601 0838 (852) 3922 1291 (852) 3922 3629 (852) 3922 3248 (813) 3512 7864 (8862) 2734 7522 (9122) 6720 4088 (603) 2059 8986 (632) 857 0893 (662) 694 7727
Quantitative / CPG Gurvinder Brar (Global) Woei Chan (Asia) Danny Deng (Asia) Per Gullberg (Asia) (44 20) 3037 4036 (852) 3922 1421 (852) 3922 4646 (852) 3922 1478
Strategy/Country Viktor Shvets (Asia, Global) Chetan Seth (Asia) David Ng (China, Hong Kong) Peter Eadon-Clarke (Japan) Chan Hwang (Korea) Jeffrey Ohlweiler (Taiwan) Inderjeetsingh Bhatia (India) Jayden Vantarakis (Indonesia) Anand Pathmakanthan (Malaysia) Gilbert Lopez (Philippines) Conrad Werner (Singapore) (852) 3922 3883 (852) 3922 4769 (852) 3922 1291 (813) 3512 7850 (822) 3705 8643 (8862) 2734 7512 (9122) 6720 4087 (6221) 2598 8310 (603) 2059 8833 (632) 857 0892 (65) 6601 0182
Resources / Metals and Mining Polina Diyachkina (Asia, Japan) Coria Chow (China) Anna Park (Korea) Sumangal Nevatia (India) (813) 3512 7886 (852) 3922 1181 (822) 3705 8669 (9122) 6720 4093
Emerging Leaders Jake Lynch (Asia) Aditya Suresh (Asia) Timothy Lam (China, Hong Kong) Mike Allen (Japan) Kwang Cho (Korea) Corinne Jian (Taiwan) Marcus Yang (Taiwan) Conrad Werner (ASEAN) (852) 3922 3583 (852) 3922 1265 (852) 3922 1086 (813) 3512 7859 (822) 3705 4953 (8862) 2734 7522 (8862) 2734 7532 (65) 6601 0182
Technology Damian Thong (Asia, Japan) George Chang (Japan) Daniel Kim (Korea) Allen Chang (Greater China) Jeffrey Ohlweiler (Greater China) Patrick Liao (Greater China) Louis Cheng (Greater China) Kaylin Tsai (Greater China) (813) 3512 7877 (813) 3512 7854 (822) 3705 8641 (852) 3922 1136 (8862) 2734 7512 (8862) 2734 7515 (8862) 2734 7526 (8862) 2734 7523
Find our research at Macquarie: www.macquarieresearch.com/ideas/ 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
Asia Sales Regional Heads of Sales Miki Edelman (Global) Jeff Evans (Boston) Jeffrey Shiu (China, Hong Kong) Sandeep Bhatia (India) Thomas Renz (Geneva) Riaz Hyder (Indonesia) Nick Cant (Japan) John Jay Lee (Korea) Nik Hadi (Malaysia) Eric Roles (New York) Gino C Rojas (Philippines) (1 212) 231 6121 (1 617) 598 2508 (852) 3922 2061 (9122) 6720 4101 (41 22) 818 7712 (6221) 2598 8486 (65) 6601 0210 (822) 3705 9988 (603) 2059 8888 (1 212) 231 2559 (632) 857 0861
Regional Heads of Sales cont’d Paul Colaco (San Francisco) Amelia Mehta (Singapore) Angus Kent (Thailand) Ben Musgrave (UK/Europe) Christina Lee (UK/Europe) (1 415) 762 5003 (65) 6601 0211 (662) 694 7601 (44 20) 3037 4882 (44 20) 3037 4873
Sales Trading cont’d Suhaida Samsudin (Malaysia) Michael Santos (Philippines) Chris Reale (New York) Marc Rosa (New York) Justin Morrison (Singapore) Daniel Clarke (Taiwan) Brendan Rake (Thailand) Mike Keen (UK/Europe) (603) 2059 8888 (632) 857 0813 (1 212) 231 2555 (1 212) 231 2555 (65) 6601 0288 (8862) 2734 7580 (662) 694 7707 (44 20) 3037 4905
Sales Trading Adam Zaki (Asia) Stanley Dunda (Indonesia) (852) 3922 2002 (6221) 515 1555
This publication was disseminated on 15 February 2017 at 18:06 UTC. 28

Asia Essentials

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报告类型:外行报告 发布日期:2017/2/16
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Thursday, 16 February 2017
Deals on Wheels Shifting focus to second-time buyers
3 Janet Lewis
Macquarie's proprietary survey of 22 brands in 14 cities highlights that discounts narrowed across the board in December, as buyers' purchased both vehicles with engines below 1.6L that benefited from the purchase tax cut as well as larger vehicles.
GlobalWafers (Initiating coverage with Outperform) Riding the tailwinds
4 Patrick Liao
We initiate coverage of GlobalWafers (GWC) with an Outperform rating and a target price of NT$220, based on 3.8x 2018E PB. We contend that 3.8x PB is justified given: 1) we believe GWC can turn SunEdison Semi around in one year given its solid track record of successful acquisitions, 2) we expect GWC to ride the uplift in wafer prices as we believe wafer industry capacity won't increase in the next 1.5–2.0 years, and 3) we forecast GWC's earnings to grow more than threefold in 2018 once the consolidation with SunEdison is complete.
Silergy (Initiating coverage with Outperform) Beneficiary of the rising China Semi
5 Patrick Liao
We initiate coverage of Silergy with an Outperform rating and target price of NT$595 (26x 2017E PE). Silergy is the largest listed analog IC supplier in China.
India Media Yet another cut; tough CY17 for TV AdEx
6 Alankar Garude
GroupM, India's largest ad agency with ~40% market share in terms of billings, has slashed its CY17 Indian ad growth forecasts across media segments. The agency is now forecasting 10% YoY overall ad industry growth in CY17, vs 12.5% earlier.
Tata Motors (Outperform) 3Q impacted by transient factors
7 Amit Mishra
Tata Motors reported 3QFY17 earnings that were significantly lower than our expectations due to lower operating margins in both the Jaguar Land Rover (JLR) and India business.
Apollo Hospitals (Outperform) Asahi Group (Outperform) CapitaLand (Outperform) DLF (Outperform) Housing Development and Infrastructure (Outperform) IHI Corp (Underperform)
8 9 10 11 12 13
Please refer to page 26 for important disclosures and analyst certification, or on our website www.macquarie.com/research/disclosures.

MacVisit – China Lesso Mapletree GCCT (Outperform) New World Development (Outperform) Nissha Printing (Outperform) Phoenix Mills (Outperform) Samsung Fire & Marine (Outperform) SMIC (Outperform) Unicharm (Neutral) Vedanta (Outperform) India Insight Hong Kong Property Macquarie Commodities Comment
14 15 16 17 18 19 20 21 22 23 24 25
2

GLOBAL Great Wall’s new Wey brand aims to move the brand upmarket
Deals on Wheels Shifting focus to second-time buyers Domestic brands look to build share upmarket ? Macquarie’s proprietary survey of 22 brands in 14 cities highlights that
Source: Autohome.com, February 2017
discounts narrowed across the board in December, as buyers’ purchased both vehicles with engines below 1.6L that benefited from the purchase tax cut as well as larger vehicles. While domestic OEMs have been the clear beneficiaries in 2016 of the surge in first-time buyers seeking low-priced SUVs, we believe the momentum will increasingly shift to second-time buyers. Overall we believe this favours premium brands, but the domestic brands are launching higher-end products to capture this demand as well.
Inside Domestic brands on the rise JV brands – pricing pressure eases further Premium brands – discounts narrow Model types –discounts fall on s edans & SUVs Map of dealer locations Data for major brands and OEMs 24 28 29 Dealer policies – post purchase tax hike 26 11 19 2
Discounts on JV brands eased further in December ? Only 5 out of 13 JV brands recorded a MoM increase in discounts in
December, pointing to a further easing in pricing pressure. We believe the low discounts were mainly due to 1) less pressure to meet the sales target amid solid demand in 4Q16; 2) an inventory shortage as a result of strong demand. Discounts on Japanese brands remained the lowest at single-digit levels for most, with the Honda JVs maintaining the lowest discounts. Discounts on European brands declined helped by new product launches.
Premium brand discounts contract further ? Discounts declined across the board in December except Jaguar and
imported Cadillac. Beijing-Benz maintained the lowest discounts as discounts declined for both the C-Class sedan and GLA SUV. Discounts on BMW Brilliance models declined 0.2ppt MoM in December, with discounts on the 5 Series and 3 Series both edging down. Discounts on FAW-Audi vehicles also narrowed, partly due to the shortage of inventory as dealers stopped procurement after the dispute with Audi Group broke out in early December.
Domestic brand discounts rise except Great Wall ? Unlike what we have observed with JVs and premium brands, discounts rose
Analyst(s) Macquarie Capital Securities (Japan) Limited Janet Lewis, CFA +81 3 3512 7856 janet.lewis@macquarie.com Macquarie Capital Limited Allen Yuan +86 21 2412 9009 allen.yuan@macquarie.com Macquarie Securities Korea Limited James Hong +82 2 3705 8661 james.hong@macquarie.com Macquarie Capital Securities India (Pvt) Ltd Amit Mishra, CFA +91 22 6720 4084 amit.mishra@macquarie.com Macquarie Capital (Europe) Limited Christian Breitsprecher, CFA +49 69509578014 christian.breitsprecher@macquarie.com Macquarie Capital (USA) Inc. Takuo Katayama +1 212 231 1757 takuo.katayama@macquarie.com
for 3 out of 5 domestic brands in December amid intensified competition. Only Great Wall posted a MoM decline in discounts, and it has the lowest discount level among all OEMs. BYD maintained the highest discount level in December, mainly due to heavy discounts on plug-in hybrid (PHEV) models.
Top picks in Asia include Tata Motors, Nissan and Honda ? In China we favour premium and SUVs. At this moment we believe the best way
to play this theme is through Tata Motors. We continue to like Brilliance China but following its recent run would look to buy on a pullback. In Europe BMW is our top pick due to model cycle. We recently upgraded Honda to Outperform partly due to its strength in China helped by new SUV products. We continue to like Nissan for valuation and Hyundai Motors is our top pick in Korea for model cycle. In the US we like GM for its growth profile and valuations.
Proprietary survey gives view across China ? Macquarie has engaged ISE Search Engine on a proprietary basis to furnish
15 February 2017
data on sales, inventory, customer traffic and transaction prices for 22 auto brands in 14 cities across China (premium brands are from six cities). The data helps us keep tabs on the models and brands that are seeing the biggest – or the least – discounting, as well as volume and inventory trends.
Please refer to page 37 for important disclosures and analyst certification, or on our website www.macquarie.com/research/disclosures. 3

TAIWAN
6488 TT Price (at 08:50, 13 Feb 2017 GMT) Valuation - Price to Book
Outperform NT$171.00 NT$ 220.00 220.00 +28.7 +29.6
GlobalWafers Riding the tailwinds Initiate with Outperform and TP of NT$220 We initiate coverage of GlobalWafers (GWC) with an Outperform rating and a target price of NT$220, based on 3.8x 2018E PB. We contend that 3.8x PB is justified given: 1) we believe GWC can turn SunEdison Semi around in one year given its solid track record of successful acquisitions, 2) we expect GWC to ride the uplift in wafer prices as we believe wafer industry capacity won’t increase in the next 1.5–2.0 years, and 3) we forecast GWC’s earnings to grow more than threefold in 2018 once the consolidation with SunEdison is complete.
12-month target NT$ Upside/Downside % 12-month TSR % GICS sector Semicon & Semicon Equipment Market cap NT$m Market cap US$m 30-day avg turnover US$m Number shares on issue m Investment fundamentals Year end 31 Dec Revenue Reported profit EPS rep EPS rep growth PER rep Total DPS Total div yield ROA ROE EV/EBITDA Net debt/equity P/BV
63,150 2,005 42.7 369.3
To turnaround SunEdison in one year GWC merged with SunEdison and became the third-largest vendor worldwide. It aims to turn the original SunEdison portion profitable this year. Also, the raw wafer market has experienced a 5-year downcycle and no-one wants to add capacity at the moment, in our view. The beginning of a merger is generally the toughest period, in terms of running the different entities. However, we believe GWC will overcome these difficulties within roughly one year. GWC’s share price increased 74% from November 15 to January 24, and we see this as the first wave of outperformance. We believe suppliers are more disciplined about capacity expansion, as the market has been in a downcycle for the past five years.
2015A 2016E 2017E 2018E m 15,310 18,418 40,709 45,559 m 2,044 1,462 966 4,552 NT$ 5.90 3.96 2.62 12.33 % -0.1 -32.9 -33.9 371.1 x 29.0 43.2 65.3 13.9 NT$ 5.29 2.49 1.65 8.88 % 3.1 1.5 1.0 5.2 % 11.9 5.3 2.9 11.1 % 13.7 8.6 5.6 23.6 x 16.5 17.4 10.2 6.1 % -17.7 130.6 130.7 90.2 x 3.8 3.7 3.6 3.0
Source: FactSet, Macquarie Research, February 2017 (all figures in NT$ unless noted, TP in TWD)
Riding the wafer price uptrend We believe the trend of rising prices for raw wafers should continue throughout 2017. Among the global top-10 raw wafer suppliers, only three companies have reported net profit in the past few years. Therefore, we believe major wafer suppliers will not expand capacity near term. If competitors start to expand capacity now, the additional capacity will only be ready in 2H18-1H19, as it takes one year to construct a building and roughly 6–12 months to qualify the facility. Assuming industry capacity doesn’t expand in the next 1.5–2 years, then 2018 will be a strong growth year for GWC. Although there could be some organic capacity increases from improving technologies and de-bottlenecking, we believe the impact should be limited.
Strong earnings growth in 2018 We estimate GWC’s revenue to more than double from NT$18.4bn in 2016 to NT$40.7bn in 2017, followed by 12% growth in 2018 to NT$45.6bn. We believe GWC will gradually improve the profitability of SunEdison by consolidating group resources, improving bargaining power and identifying cost savings. We estimate gross margin and operating margin to bottom in 1Q17 and to improve throughout the year. By 2018, we believe margins will be back to levels seen before the SunEdison acquisition. Overall, we expect EPS will decline 33%/34% in 2016/17 before seeing a strong rebound in 2018. patrick.liao@macquarie.com lynn.luo@macquarie.com
Analyst(s) Patrick Liao +886 2 2734 7515 Lynn Luo +886 2 2734 7534
15 February 2017
Key downside risks to our recommendation and target price include: 1) slowerthan-expected progress in turning around SunEdison, 2) weaker-than-expected wafer demand, 3) more severe silicon wafer industry competition, and 4) unfavourable currency moves.
Macquarie Capital Limited, Taiwan Securities Branch
Please refer to page 14 for important disclosures and analyst certification, or on our website www.macquarie.com/research/disclosures. 4

TAIWAN
6415 TT Price (at 13:06, 13 Feb 2017 GMT) Valuation - PER
Outperform NT$485.00 NT$ 595.00
Silergy Beneficiary of the rising China Semi Initiate with Outperform, TP of NT$595 We initiate coverage of Silergy with an Outperform rating and target price of NT$595 (26x 2017E PE). Silergy is the largest listed analog IC supplier in China. We believe a 26x PE can be justified given: 1) we believe Silergy will continue outgrowing the market and peers in the next few years; and 2) we believe Silergy will benefit from increasing demand for local sourcing ICs in China and the fastgrowing supply chain there. We estimate the company will show 29% and 34% CAGRs for sales and earnings in 2016-18. We also believe the company’s value will lie more in its sustainability and future market position in the world.
12-month target NT$ 595.00 Upside/Downside % +22.7 12-month TSR % +24.4 Volatility Index High GICS sector Semiconductors & Semiconductor Equipment Market cap NT$m 40,711 Market cap US$m 1,327 30-day avg turnover US$m 3.1 Number shares on issue m 83.94 Investment fundamentals Year end 31 Dec Revenue Reported profit EPS rep EPS rep growth PER rep Total DPS Total div yield ROA ROE EV/EBITDA Net debt/equity P/BV m m NT$ % x NT$ % % % x % x 2015A 2016E 2017E 2018E 4,701 1,201 15.50 41.3 31.3 2.01 0.4 25.4 29.6 31.4 -30.8 8.2 7,126 1,392 17.61 13.6 27.5 6.40 1.3 17.3 24.1 25.7 2.9 5.9 9,213 11,797 1,930 2,502 22.99 29.80 30.5 29.6 21.1 16.3 8.28 10.73 1.7 2.2 17.7 19.9 25.2 27.0 17.9 14.1 -8.6 -18.1 4.9 4.0
China - a rapidly growing market We estimate about half of Silergy’s revenue is from China, and primarily in consumer-related applications. Silergy mainly supplies products with lower prices and margins, compared with large, global IDMs like TI and Maxim. We expect the Consumer sector will be the fastest growing sector in Silergy. We see Chinese companies’ adoption rates of domestic-made IC as still low and the China government is aiming to increase it. We believe Silergy is well-positioned in the market to benefit from increasing local sourcing of IC.
M&A to further power growth Silergy has set its long-term revenue growth target at a 20% CAGR, while the actual growth from 2010 to 2016 was 80%, surpassing the target. In 2016, Silergy acquired 1) Maxim’s Smart Meters and Energy Surveillance Department in March and 2) NXP’s LED Driver IC department in April. The two acquired units contributed 25% of sales in 3Q16. As the company’s scale becomes larger, we believe its M&A strategy could be the key to supporting Silergy’s long-term growth.
Source: FactSet, Macquarie Research, February 2017 (all figures in NT$ unless noted, TP in TWD)
Margin expansion on favourable product mix We expect revenue contribution from the higher-margin Industrial segment to increase, while we see the lower-margin Computing segment’s contribution gradually declining. We believe gross margins for each segment will be stable, and the company’s gross margin will improve on a more favourable product mix. Therefore, we forecast Silergy’s gross margin to expand from 46.5% in 2016 to 46.9%/47.4% in 2017/18.
Risks to our Outperform call Downside risks could come from: 1) slower-than-expected technology development, 2) weaker-than-expected end market demand, and 3) more severe IC design industry competition.
Analyst(s) Patrick Liao +886 2 2734 7515 Lynn Luo +886 2 2734 7534 patrick.liao@macquarie.com lynn.luo@macquarie.com
15 February 2017
Macquarie Capital Limited, Taiwan Securities Branch
Please refer to page 14 for important disclosures and analyst certification, or on our website www.macquarie.com/research/disclosures. 5

INDIA Our recent reports on ad scenario India Media - Experts speak: Advertisers hit pause button India Media - Agencies predict 11-13% ad growth in 2017 India Media - Painstaking ad recovery underway ZEE - Significantly beats STAR India's ad growth in 4QCY16
India Media Yet another cut; tough CY17 for TV AdEx Conclusion ? GroupM, India’s largest ad agency with ~40% market share in terms of
billings, has slashed its CY17 Indian ad growth forecasts across media segments. The agency is now forecasting 10% YoY overall ad industry growth in CY17, vs 12.5% earlier. Amongst larger media segments, the sharpest cut is for TV (8% now vs 12% YoY growth estimate earlier). ? In line with our earlier expectations, normalisation of ad revenue is expected
GroupM’s revised CY17 ad forecasts Prior forecast (as of Dec-16) TV Print Digital OOH Radio Cinema Overall 12.0% 5.4% 30.0% 8.0% 20.0% 25.0% 12.5% Current Revision forecast (in bps) 8.0% 4.5% 30.0% 7.0% 10.0% 20.0% 10.0% -400 -90 0 -100 -1000 -500 -250
to be a slow process and is likely earliest by April. While we are mindful of a near-term slowdown, recovery seems to be on track. At this point, we retain our 12% YoY FY18 ad growth estimate for ZEE and expect regional print companies (Jagran Prakashan and DB Corp) to grow in the 8-10% YoY range in FY18.
Impact ? Note ban to shave 100-150bps off overall CY17 ad growth: We note that in
Source: GroupM, Macquarie Research, February 2017
Media Valuation Snapshot Company Mkt cap (USD m) CMP (Rs) TP (Rs) Rec
Z IN 7,386 523 580 OP DITV IN 1,397 89 118 OP JAGP IN 912 187 200 OP DBCL IN 1,025 379 475 OP HTML IN 292 85 84 N *Prices of 14th February, 2017 Source: Bloomberg, Macquarie Research, February 2017
December 2016, a month after the demonetisation announcement, GroupM had forecast 12.5% YoY overall ad industry growth in CY17. The latest cut reflects that despite some recovery, attaining normalcy is taking time. Similar to our belief, GroupM expects the recovery to be gradual and the note ban impact to linger until the end of March. As per GroupM, the note ban is expected to shave 100-150 bps off overall CY17 ad growth. This follows a ~200bps impact on CY16 ad growth. As of now, GroupM expects CY18 to be a very strong year for ad growth. ? TV ad growth to hit a 3-year low in CY17: GroupM expects CY17 TV ad
growth to slow by 200bps to 8% YoY. Owing to slower volume growth and rising commodity costs, GroupM expects FMCG ad spend to slow to “much less than 10%” in CY17. We believe weakness in FMCG along with any slowdown in telecom ad spend due to consolidation could take a toll on TV ad growth. Sun TV (~7% YoY decline in ad revenues in 3Q) in its earnings concall mentioned that many sectors are still spending less than normal and some stability is likely only by 1QFY18, a commentary echoed by ZEE and STAR as well. ? Is our FY18 ad growth estimate for ZEE at risk?: We remain comfortable
Analyst(s) Alankar Garude, CFA +91 22 6720 4134 alankar.garude@macquarie.com
with our 12% YoY ad estimate for ZEE in FY18. We believe for ZEE to continue to outperform TV industry ad growth by 400bps, it is imperative for Zee TV’s and &TV’s ratings to improve. Any delay in ramp-up of original programming to 30 hours (from 25 currently) beyond the current guidance of 2-3 quarters, could pose some downside risk to our estimates. While ZEE’s market share remains strong across most regions, we would keep an eye on increasing competitive intensity from STAR (revamp of Telugu channel), Sun TV (imminent revamp of Kannada channel) and Viacom in the regional space. The pace of the ad recovery along with an increase in viewership share of ZEE’s Hindi GECs are key monitorables for 4Q, in our view.
Outlook ? Amongst TV broadcasters and print, we remain selective and we prefer ZEE
15 February 2017
Macquarie Capital Securities India (Pvt) Ltd
given its higher dependence on national ads and leadership position across genres. With strong synergies from the Videocon d2h merger and significant valuation comfort, Dish TV is our top pick in the India media space.
Please refer to page 3 for important disclosures and analyst certification, or on our website www.macquarie.com/research/disclosures. 6

INDIA
TTMT IN Price (at 19:53, 14 Feb 2017 GMT) Valuation - Sum of Parts
Outperform Rs467.15 Rs Rs % % 575.00
Tata Motors 3Q impacted by transient factors Event ? Tata Motors reported 3QFY17 earnings that were significantly lower than our
575.00 +23.1 +23.5 Medium Automobiles & Components Market cap Rsbn 1,586 Market cap US$m 25,611 Free float % 68 30-day avg turnover US$m 42.6 Number shares on issue m 3,395 Investment fundamentals Year end 31 Mar Revenue EBITDA EBITDA growth EBIT EBIT growth Adjusted profit EPS rep EPS adj EPS adj growth PER adj Total DPS Total div yield ROA ROE EV/EBITDA Net debt/equity P/BV 2016A 2017E 2018E 2019E bn 2,755.6 2,906.9 3,313.3 3,860.4 bn 367.6 302.5 424.1 538.2 % -6.3 -17.7 40.2 26.9 bn 197.4 108.7 208.2 295.6 % -23.6 -44.9 91.5 42.0 bn 127.1 69.4 153.4 226.8 Rs 32.46 20.44 45.16 66.78 Rs 37.42 20.44 45.16 66.78 % -14.1 -45.4 121.0 47.9 x 12.5 22.9 10.3 7.0 Rs 2.00 2.00 2.00 2.00 % 0.4 0.4 0.4 0.4 % 7.8 4.0 7.2 9.3 % 18.5 8.3 16.3 20.2 x 5.5 6.7 4.8 3.8 % 46.5 51.6 48.0 5.9 x 2.0 1.8 1.6 1.3
12-month target Upside/Downside 12-month TSR Volatility Index GICS sector
expectations due to lower operating margins in both the Jaguar Land Rover (JLR) and India business. JLR’s operating margin of 9.3% was lowest in the last five years as the earnings were impacted by run-out costs of older models and unfavourable model mix. While JLR’s ASP increased 19% YoY due to favourable forex rates, it didn’t translate to higher profits given loss on realised hedges. India business margins were impacted by lower volumes on account of demonetisation and high discounts in the commercial vehicle segments. ? We view most of the negative factors that impacted Tata Motors’ earnings in
3QFY17 as transitory and expect stronger sales growth and margin for JLR in FY18E. We maintain OP with a revised TP of Rs575 (previously Rs630).
Impact ? Strong ASP growth, weak operating margins. JLR ASP grew 19% YoY and
4.2% QoQ, reflecting favourable spot currency rates. However, EBITDA margins declined 508bp YoY to 9.3%, given a) 200bp impact of less favourable model mix, particularly the Discovery model run-out; b) 170bp impact of higher variable marketing spend, especially extended run-out of the 16MY in the US; c) higher new model launch expense (30bp); d) biennial pay negotiation settlement (40bp); and e) losses on realised forex hedges. JLR’s profit from the Chery-JLR JV (China) was £35m compared to £22m in 3QFY16. JLR generated £54m positive FCF despite a 10% YoY capex increase. ? Why we think FY18 will be stronger year for JLR? JLR’s growth in the past
TTMT IN rel BSE Sensex performance, & rec history
two years has been led by lower-priced models (Discovery Sport, XE and FPace). We expect JLR to launch new models in the mid-to-high price segments in 2017, which should drive growth and improve profitability. JLR will start sales of the new Discovery from Mar-17, launch mid-size Range Rover badged model in 2QFY18E, mid-cycle upgrades of Range Rover and Range Rover Sport in 3QFY18E and a new small SUV Jaguar E-Pace in 4QFY18E. The operating benefit from GBP depreciation was £438m. This didn’t translate to higher operating profits in 3Q due to £455m losses on realised forex hedges, but it will likely boost margins in FY18E as old hedges gradually roll off. ? India business – OPM impacted by adverse mix. Sales were impacted by
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, February 2017 (all figures in INR unless noted)
demonetisation. CV sales grew modestly (M&HCV +0.6% YoY and LCV +2.4%), while Tiago led 28% growth in PV sales. EBITDA margin contracted 390bp YoY to 0.7% on lower M&HCV volumes and higher discounts.
Earnings and target price revision ? We have reduced FY17/18/19 consolidated EBITDA by 20%/10%/7.0% to
factor in lower OPM in JLR and India businesses. Analyst(s) Amit Mishra, CFA +91 22 6720 4084 amit.mishra@macquarie.com
Price catalyst ? 12-month price target: Rs575.00 based on a Sum of Parts methodology. ? Catalyst: Sales and pricing trend of JLR vehicles in China
15 February 2017
Macquarie Capital Securities India (Pvt) Ltd
Action and recommendation ? TTMT stock trades at 9.0x FY19 PER (assuming 0% R&D cost capitalisation).
Please refer to page 13 for important disclosures and analyst certification, or on our website www.macquarie.com/research/disclosures. 7

INDIA
APHS IN Price (at 08:50, 15 Feb 2017 GMT) Valuation - Sum of Parts
Outperform Rs1,218.55 Rs 1,600.00
Apollo Hospitals Stable show in a challenging environment Event ? Apollo Hospitals (APHS) delivered a stable 3QFY17 performance despite
12-month target Rs 1,600.00 Upside/Downside % +31.3 12-month TSR % +31.8 Volatility Index Low GICS sector Health Care Equipment & Services Market cap Rsm 169,531 Market cap US$m 2,593 Free float % 66 30-day avg turnover US$m 3.5 Number shares on issue m 139.1 Investment fundamentals Year end 31 Mar Revenue EBIT EBIT growth Recurring profit Reported profit Adjusted profit EPS rep EPS rep growth EPS adj EPS adj growth PER rep PER adj Total DPS Total div yield ROA ROE EV/EBITDA Net debt/equity P/BV 2016A 2017E 2018E 2019E m 60,856 68,888 79,948 90,626 m 5,290 5,509 7,171 8,128 % 1.1 4.1 30.2 13.4 m 3,872 4,109 5,471 6,028 m 3,310 3,287 4,267 4,461 m 3,246 3,287 4,267 4,461 Rs 23.80 23.63 30.68 32.07 % -2.6 -0.7 29.8 4.5 Rs 23.34 23.63 30.68 32.07 % -2.3 1.2 29.8 4.5 x 51.2 51.6 39.7 38.0 x 52.2 51.6 39.7 38.0 Rs 6.00 4.73 6.14 6.41 % 0.5 0.4 0.5 0.5 % 7.5 6.7 7.8 8.1 % 9.7 9.1 10.9 10.5 x 24.6 23.7 19.3 17.0 % 55.4 61.8 64.5 66.8 x 4.9 4.5 4.1 3.8
multiple headwinds. Overall consolidated revenues grew by ~20% YoY to Rs19.1bn, EBITDA was up ~11% YoY to Rs1.9bn and PAT declined by 8% YoY to Rs454m due to higher depreciation and interest (commissioning of Navi Mumbai hospital in 3Q). We believe APHS is on the right track by focussing on increasing occupancy levels, improving revenue mix and ROCEs to ~20% levels. We expect margins to inch up, driven by a ramp-up of new hospitals, an increase in high-margin international sales and lower start-up costs with the ramp-up of new hospitals. We maintain our Outperform rating on APHS with a new TP of Rs1,600.
Impact ? Healthcare: Performance (details in Fig 2, 3) of the hospital business was
impacted due to the note ban (30% outstation patients), hospitalisation of late Tamil Nadu CM and Vardah cyclone. If not for these factors, revenues would have been higher by ~Rs250-300m and EBITDA by ~Rs150m. Note the ban impact is likely to continue for one more quarter. There was an additional impact of an Rs80m EBITDA loss for the Navi Mumbai hospital. Given that APHS is in the final stage of expansion plans, we expect the margin trajectory to improve due to higher operating leverage and maturing new hospitals. ? Pharmacy: Pharmacy margins were slightly down 31bps QoQ to 4.6% due to
APHS IN rel BSE Sensex performance, & rec history
few provisions and higher FMCG sales (slightly lower margins). We believe a gradual margin recovery in pharmacy will be driven by (a) incrementally maturing store mix; (b) increasing penetration of private labels, which typically generate EBITDA margins of >50%; (c) closure of loss-making stores and (d) optimization of inventory and increasing sales through bulk distribution. ? Key highlights from 3QFY17 concall: (i) APHS is hopeful of good traction in
the new hospitals (~2,400 beds) in the next 12-18 months (ii) In the Hyderabad cluster, competitive intensity remains high. Hence, APHS has been focussing on increasing ARPOB by improving the patient mix. (iii) AHLL losses to come down by 25-30% in FY18; breakeven is targeted in 24 months (iv) In FY17, there will be Rs1-1.25bn of maintenance capex in addition to project capex of Rs3.5bn.
Earnings and target price revision Note: Recommendation timeline - if not a continuous line, then there was no Macquarie coverage at the time or there was an embargo period.
? We lower our FY17-19E EBITDA estimates by 3-7% primarily due to the
Source: FactSet, Macquarie Research, February 2017 (all figures in INR unless noted)
impact of demonetisation. As we roll-forward to FY19 (FY18 earlier), our SOTP-based TP is revised to Rs1,600 (Rs1,570 previously).
Price catalyst Analyst(s) Abhishek Singhal +91 22 6720 4086 abhishek.singhal@macquarie.com Alankar Garude, CFA +91 22 6720 4134 alankar.garude@macquarie.com
? 12-month price target: Rs1,600.00 based on a Sum of Parts methodology. ? Catalyst: 1) Pharmacy business turnaround, 2) new hospitals breakeven
15 February 2017
Action and recommendation ? Given its track record, scale, pan India presence, strong brand-equity and
Macquarie Capital Securities India (Pvt) Ltd
integrated healthcare delivery model, APHS remains strategically well positioned to capitalize on domestic healthcare growth. Maintain Outperform.
Please refer to page 6 for important disclosures and analyst certification, or on our website www.macquarie.com/research/disclosures. 8

JAPAN
2502 JP Price (at 14:51, 09 Feb 2017 GMT) Valuation - DCF
Outperform ¥3,938 ¥ ¥ % % 4,4005,300
Asahi Group Healthy Start by the Western Europe Business Conclusion ? Asahi Group HD reported ¥148.5bn in FY12/16 (+YoY 5.5%) business profit
12-month target Upside/Downside 12-month TSR Volatility Index GICS sector
4,700 +19.3 +21.0 Low Food, Beverage & Tobacco Market cap ¥bn 1,904 Market cap US$m 16,856 30-day avg turnover US$m 55.8 Number shares on issue m 483.6 Investment fundamentals Year end 31 Dec Revenue EBIT EBIT growth Recurring profit Reported profit Adjusted profit EPS rep EPS rep growth EPS adj EPS adj growth PER rep PER adj Total DPS Total div yield ROA ROE EV/EBITDA Net debt/equity P/BV 2015A 2016E 2017E 2018E bn 1,857.4 1,852.8 1,947.0 1,977.2 bn 135.1 147.6 162.5 171.2 % 5.3 9.2 10.1 5.4 bn 145.9 149.3 160.0 168.7 bn 76.4 88.4 97.6 103.3 bn 120.2 105.5 109.6 115.3 ¥ 165.5 193.0 213.1 225.6 % 12.1 16.6 10.4 5.8 ¥ 260.9 230.4 239.3 251.8 % 40.3 -11.7 3.9 5.2 x 23.8 20.4 18.5 17.5 x 15.1 17.1 16.5 15.6 ¥ 50.0 60.0 64.0 67.0 % 1.3 1.5 1.6 1.7 % 7.0 7.3 7.4 7.5 % 13.7 12.1 12.1 11.8 x 9.6 9.8 9.1 8.8 % 34.1 69.1 60.0 50.5 x 2.1 2.1 1.9 1.8
(BP), on par with our ¥147.6bn OP forecast. It presented FY12/17 guidance of ¥165bn in BP (+11.1%), modestly exceeding our ¥162.5bn forecast. ? We think the Western Europe business, which was added to consolidated
statements from 4Q 2016, had a healthy start. This business posted a ¥1.8bn loss (¥4.2bn in BP and ¥6bn in one-time costs) that beat guidance (¥2.5bn loss) by ¥700mn. We think the transfer of operations has gone smoothly since Asahi acquired rights to this business. ? Asahi’s net debt/EBITDA ratio at end-FY12/16 was 2.5x, and we estimate an
increase in this ratio to ~4.8x in FY12/17 taking into account the impact from acquiring the Central and Eastern Europe business, likely to be completed in FY12/17. While Asahi needs to demonstrate the ability of the two European business to provide stable cash creation, we think it is having an upbeat start.
Impact ? Asahi uses an assumption of a 3% YoY increase in forex-neutral sales for the
Western Europe business (Italy at +4% and the United Kingdom and the Netherlands at +6%) in FY12/17 guidance. We think it factors in roughly the same momentum as the result from FY12/16. The FY12/17 BP target for the Western Europe business includes ¥1.9bn in one-time costs. ? Asahi expects a closing on its acquisition of the Central and Eastern Europe
2502 JP vs TOPIX, & rec history
business during FY12/17 and therefore does not include results from this business in the period-start plan.
Earnings and target price revision ? We maintain our forecasts and ¥4,700 price target.
Price catalyst ? 12-month price target: ¥4,700 based on a Price to Book methodology. ? Catalyst: Confirmation of stable cash creation in overseas businesses newly 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, February 2017 (all figures in JPY unless noted)
added to consolidated statements and manifestation of firm growth potential in domestic BP in quarterly results announcements.
Action and recommendation ? We maintain our Outperform rating.
Analyst(s) Satsuki Kawasaki +81 3 3512 7879 satsuki.kawasaki@macquarie.com
15 February 2017
Macquarie Capital Securities (Japan) Limited
Please refer to page 5 for important disclosures and analyst certification, or on our website www.macquarie.com/research/disclosures. 9

SINGAPORE
CAPL SP Price (at 05:50, 15 Feb 2017 GMT) Valuation - DCF (WACC 8.0%)
Outperform S$3.46 S$ 5.39
CapitaLand Busy 2017 to further drive recurrent income Conclusion ? Our expectation of higher recurrent income and higher DPS in our in-depth
12-month target S$ 4.32 Upside/Downside % +24.9 12-month TSR % +28.3 Volatility Index Low GICS sector Real Estate Market cap S$m 14,789 Market cap US$m 10,401 Free float % 59 30-day avg turnover US$m 26.6 Number shares on issue m 4,274 Investment fundamentals Year end 31 Dec Revenue EBIT EBIT growth Adjusted profit EPS adj EPS adj growth PER adj Total DPS Total DPS growth Total div yield ROA ROE P/BV 2016A 2017E 2018E 2019E m 5,252.3 4,454.7 4,478.4 5,152.8 m 1,257.3 1,346.4 1,382.7 1,575.7 % 15.7 7.1 2.7 14.0 m 865.3 1,076.1 1,108.0 1,264.5 ¢ 20.4 25.4 26.1 29.8 % 5.5 24.5 3.0 14.1 x 17.0 13.6 13.2 11.6 ¢ 10.0 12.0 12.0 12.0 % 11.1 20.0 0.0 0.0 % 2.9 3.5 3.5 3.5 % 2.7 3.0 3.1 3.5 % 7.1 6.0 6.0 6.6 x 0.8 0.8 0.8 0.8
report, “Leveraging the value chain” dated 31 Jan 2016, materialised with the group reporting core earnings (excluding revaluations and change of use gains) growth of +28% YoY. We expect a busy year for CapitaLand in 2017 with 8 malls to be opened (6 in China), more management contracts from Ascott (serviced apartments) and CMA (shopping malls), and handover of residential units sold.
Impact ? FY16 results highlights. Results were driven by higher handover of China
resi units; stronger recurrent income from Singapore office and China shopping malls (link to flashnote). Cash earnings were 79% of reported earnings. DPS +11.1% to 10cts. Given our expectation of core earnings FY17 growth of +24%, we believe a 12cts DPS is possible, implying a 3.5% yield. ? Drivers of new recurrent income. Three of the six malls to be opened in
China this year are from its Raffles City portfolio, where pre-leasing rates are > 85%. Ascott will open 3,700 units this year, same rate as in 2016. We also expect a new PE fund to be established for Vietnam commercial properties. ? Trading income mixed. Singapore resi will benefit from the en-bloc sale of
CAPL SP rel SNGPORI performance, & rec history
The Nassim with net profits of S$161m to be recognised in 1Q17. After a strong 2016, China resi handover will likely fall from ~Rmb16bn to >Rmb5.3bn (based on units sold as at Dec 2016, before accounting for other completed units to be sold and handed over in 2017). ? Comfortable gearing of 41% from 48% a year ago. About 72% of debt is on
fixed rates and implied interest rate -20bp lower at 3.3%. Book NAV was 1.4% YoY to S$4.15 as Rmb weakness was taken against its foreign currency translation reserves account.
Earnings and target price revision Note: Recommendation timeline - if not a continuous line, then there was no Macquarie coverage at the time or there was an embargo period.
? We trim our EPS estimates marginally, mainly due to higher tax rates and
Source: FactSet, Macquarie Research, February 2017 (all figures in SGD unless noted)
lower contributions from China and Singapore resi given an updated completion schedule. We marginally increase RNAV from S$5.28 to S$5.39, and target price from S$4.22 to S$4.32, by adjusting for FY16 results and lower net debt.
Price catalyst ? 12-month price target: S$4.32 based on a RNAV methodology.
Analyst(s) Tuck Yin Soong +65 6601 0838 Ken Ang, CFA +65 6601 0836 Zhi Rong Phua +65 66010893 tuckyin.soong@macquarie.com ken.ang@macquarie.com zhirong.phua@macquarie.com
? Catalyst: Acquisitions from RCCIP Fund III, new investments in Vietnam and
growth in fee income.
Action and recommendation ? We expect CapitaLand to reap the benefits of scale in its serviced apartment
15 February 2017
Macquarie Capital Securities (Singapore) Pte. Limited
and shopping mall business with more management contracts to drive higher fee income. More than 76% of assets produce recurrent income and major projects under development will come on stream over the next two years. Shares are attractive on 0.83x PBV and at a 34% discount to our RNAV.
Please refer to page 5 for important disclosures and analyst certification, or on our website www.macquarie.com/research/disclosures. 10

INDIA
DLFU IN Price (at 14:50, 14 Feb 2017 GMT) Valuation - DCF (WACC 15.4%)
Outperform Rs147.75 Rs 330.51
DLF Operationally weak, all eyes on deal Conclusion ? DLF’s 3Q FY17 operational performance was weak, as expected, due to high
12-month target Rs 165.00 Upside/Downside % +11.7 12-month TSR % +12.5 Volatility Index High GICS sector Real Estate Market cap Rsm 263,585 Market cap US$m 3,937 Free float % 25 30-day avg turnover US$m 18.5 Number shares on issue m 1,784 Investment fundamentals Year end 31 Mar Revenue EBIT EBIT growth Adjusted profit EPS adj EPS adj growth PER adj Total DPS Total DPS growth Total div yield ROA ROE EV/EBITDA Net debt/equity P/BV 2016A 2017E 2018E 2019E m 92,599 75,486 67,868 67,588 m 30,886 28,575 24,954 23,893 % 24.6 -7.5 -12.7 -4.3 m 6,846 5,994 3,709 3,104 Rs 3.85 3.37 2.08 1.74 % 20.0 -12.4 -38.1 -16.3 x 38.4 43.9 70.9 84.7 Rs 2.40 1.97 1.22 1.02 % -34.0 -17.9 -38.1 -16.3 % 1.6 1.3 0.8 0.7 % 4.6 4.3 3.8 3.7 % 2.4 2.1 1.3 1.1 x 14.2 15.6 17.3 17.9 % 92.1 97.1 88.1 84.2 x 0.9 0.9 0.9 0.9
impact of demonetisation in the NCR region. until the CCPS deal concludes, debt is likely to rise as operating cash flows remain weak. ? We think the CCPS deal closure is likely in FY18E, and that this is critical to
repair the balance sheet.
Impact ? Presales extremely weak; likely to remain so in the near term: The NCR
region has been the most impacted by the demonetisation of high-value notes in India (Demonetisation hits NCR hard). Gurgaon phase 5 continues to form the lion’s share of presales (Rs5.5bn out of Rs6.6bn 3Q gross presales). Presales (net of cancellations) for 9M FY17 are down 72% to Rs7.6bn. DLF has noted in its presentation that until secondary markets stabilise, primary sales are likely to remain weak over next few qtrs. We expect FY17E presales to be down 67% yoy to Rs10.4bn. ? Debt likely to rise near-term: Operating cashflows remain weak leading to a
rise in debt (net debt rose Rs12bn QoQ to Rs240bn). We think debt will continue to rise until presales recover meaningfully (qtrly shortfall of Rs8bn10bn). ? CCPS deal closure critical to significant repair of balance sheet: The
DLFU IN rel BSE Sensex performance, & rec history
Ongoing CCPS stake sale (40% stake in parent company by promoters) to private equity players is under way. We think that deal closure is likely only in FY18E (even DLF has sought an extension from its board to March-18). The board has permitted promoters to sell their 40% stake in the parent company only if they plough the money back into DLF to help it reduce its debt. We think that the equity value of the CCPS transaction could range from Rs90bn120bn and help the company reduce its debt significantly. ? 3Q FY17 result highlights: Revenues at Rs20.58bn (-27% yoy), EBITDA
margin at 46.5% (+320bps yoy) and PAT at Rs981m (-40% yoy). Note: Recommendation timeline - if not a continuous line, then there was no Macquarie coverage at the time or there was an embargo period.
Earnings and target price revision ? We lower our FY17-18E EBITDA by 11-22% to factor in weaker presales. We
Source: FactSet, Macquarie Research, February 2017 (all figures in INR unless noted)
lower our TP from Rs175 to Rs165.
Price catalyst ? 12-month price target: Rs165.00 based on a Sum of Parts methodology. ? Catalyst: faster closure of the CCPS deal.
Action and recommendation Analyst(s) Abhishek Bhandari , CFA +91 22 6720 4088 abhishek.bhandari@macquarie.com
? The company is hosting its analyst call at 3.30pm IST (GMT+530) today. Call
details: +91-22-3960-0641. ? Maintain OP.
15 February 2017
Macquarie Capital Securities India (Pvt) Ltd
Please refer to page 6 for important disclosures and analyst certification, or on our website www.macquarie.com/research/disclosures. 11

INDIA
HDIL IN Price (at 08:50, 15 Feb 2017 GMT) Valuation - DCF (WACC 15.7%)
Outperform Rs68.30 Rs 144.62
Housing Development and Infrastructure Demon blues Event ? HDIL’s 3Q FY17 results were within expected lines but presales remained
12-month target Rs 87.00 Upside/Downside % +27.4 12-month TSR % +27.4 Volatility Index High GICS sector Real Estate Market cap Rsm 29,642 Market cap US$m 444 Free float % 63 30-day avg turnover US$m 15.6 Number shares on issue m 434.0 Investment fundamentals Year end 31 Mar Revenue EBIT EBIT growth Adjusted profit EPS adj EPS adj growth PER adj Total DPS Total DPS growth Total div yield ROA ROE EV/EBITDA Net debt/equity P/BV 2016A 2017E 2018E 2019E m 11,695 12,388 12,388 12,708 m 7,794 6,391 6,391 6,479 % -1.4 -18.0 0.0 1.4 m 2,661 1,534 2,221 2,994 Rs 6.35 3.66 5.30 7.14 % 21.7 -42.4 44.9 34.8 x 10.8 18.7 12.9 9.6 Rs 0.00 0.00 0.00 0.00 % 0.0 0.0 0.0 0.0 % 0.0 0.0 0.0 0.0 % 4.4 3.1 2.8 2.9 % 2.4 1.4 1.9 2.6 x 0.2 0.2 0.2 0.2 % 24.2 -24.2 -22.8 -22.2 x 0.3 0.3 0.2 0.2
weak due to demonetisation.
Impact ? Demonetisation hits presales: Residential presales fell 80% yoy (54% qoq)
to Rs766mn driven by 0.1msf of volume. However, TDR sales remain stable at the ~0.3msf/qtr level with stable pricing of Rs3,500/sf. HDIL expects presales to remain weak over the next few quarters due to weak consumer sentiment in real estate. ? Debt reduction continues: Net debt of HDIL remained stable at Rs26.4bn at
3Q FY17 end. This has been reduced further by ~Rs2bn in 4Q FY17 till date and targets are to reduce it to ~Rs25bn by FY18E end. This will largely be driven by collections from TDR sales. ? Launching Budget Home brand in affordable segment: Post the tax
incentives and infrastructure status announced in the Union Budget 2017 (refer to our note), HDIL has launched the Budget Homes brand. It intends to sell houses in a price range up to Rs5-6mn (in MMR region) and Rs2mn (in Virar-Vasai region). ? 3Q FY17 result highlights: Revenues at Rs1.12bn (-65% yoy) and PAT at
HDIL IN rel BSE Sensex performance, & rec history
Rs162mn (-82% yoy). Net debt remained stable at Rs26.4bn. ? Other highlights from conference call: 1) Targeting to launch 500
apartments in Mulund in the affordable segment, and an additional 700 over the next 12 months. This will be priced at ~Rs5-6mn/unit inclusive of taxes; 2) No major project completion is expected in FY18E end. Hence, revenues will be driven mainly by recognition of TDR sales; 3) Continuing to explore opportunities to sell FSI in the Pant Nagar project.
Earnings and target price revision 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, February 2017 (all figures in INR unless noted)
? We lower FY17-18E EBITDA by ~30% to factor in near-term weakness in
presales. Lower our TP from Rs120 to Rs87.
Price catalyst ? 12-month price target: Rs87.00 based on a Sum of Parts methodology. ? Catalyst: pick-up in presales, TDR sales, launch of affordable housing
Action and recommendation Analyst(s) Abhishek Bhandari , CFA +91 22 6720 4088 abhishek.bhandari@macquarie.com
? Maintain OP.
15 February 2017
Macquarie Capital Securities India (Pvt) Ltd
Please refer to page 5 for important disclosures and analyst certification, or on our website www.macquarie.com/research/disclosures. 12

JAPAN
7013 JP Valuation - PER
Underperform Price (at 14:50, 14 Feb 2017 GMT) ¥338 ¥ 200-400 12-month target ¥ 300 Upside/Downside % -11.2 12-month TSR % -9.6 Volatility Index High GICS sector Capital Goods Market cap ¥m 522,818 Market cap US$m 4,590 30-day avg turnover US$m 44.4 Number shares on issue m 1,547 Investment fundamentals Year end 31 Mar Revenue EBIT EBIT growth Recurring profit Reported profit Adjusted profit EPS rep EPS rep growth EPS adj EPS adj growth PER rep PER adj Total DPS Total div yield ROA ROE EV/EBITDA Net debt/equity P/BV 2016A 2017E 2018E 2019E bn 1,539.4 1,513.0 1,577.0 1,621.0 bn 22.0 41.1 67.8 73.5 % -65.1 86.4 65.0 8.4 bn 9.7 25.0 58.7 64.4 bn 1.5 1.7 31.4 34.7 bn 12.9 11.3 31.4 34.7 ¥ 1.0 1.1 20.3 22.5 % -83.2 11.2 1,747.1 10.5 ¥ 8.3 7.3 20.3 22.5 % -66.4 -12.3 177.9 10.5 x 341.3 307.0 16.6 15.0 x 40.5 46.2 16.6 15.0 ¥ 3.0 0.0 6.0 6.0 % 0.9 0.0 1.8 1.8 % 1.3 2.4 4.0 4.2 % 3.9 3.5 9.3 9.5 x 8.9 7.9 6.2 5.9 % 75.0 78.1 72.2 67.7 x 1.6 1.6 1.5 1.4
IHI Corp Expect jet engine profit to decline again in FY3/18 Conclusion ? We update our forecasts in light of 3Q results. We slightly raise our price
target from ¥290 to ¥300, but maintain our Underperform rating. ? We think 3Q results exhausted short-term negative catalysts for the time
being. However, we maintain our outlook for a rise in losses related to the new PW-1100G-JM weighing on profit in the aircraft jet engines business, which is IHI’s largest source of earnings.
Impact ? We slightly revise our FY3/17 OP forecast from ¥41.6bn (+89% YoY) to
¥41.1bn (+86%). We factor in ¥16bn in extra costs for the resources, energy and environment segment, mainly for the Cove Point LNG plant project in the US. In the aero engine, space and defence segment, meanwhile, we reduce our estimate for Airbus A320neo PW-1100G-JM deliveries from 200 engines to 135 engines and trim anticipated losses related to this engine from ¥10bn to ¥5.5bn. ? We adjust our FY3/18 OP forecast from ¥67.3bn to ¥67.8bn. This includes the
addition of ¥5bn in extra-cost risk for Cove Point LNG plant project in the resources, energy and environment segment. We keep PW-1100G-JM deliveries at 400 engines and expect ¥20bn in losses for this business. We thus forecast a 17% YoY decline in aero engine, space and defence segment OP to ¥43.5bn.
7013 JP vs TOPIX, & rec history
Earnings and target price revision ? We revise our earnings forecasts in light of the 3Q FY3/17 results. ? We raise our target price to ¥300 from ¥290 using 1.3x fair P/B (1.2x
previously) and FY3/18E BPS. Key assumptions are 6.8% CoE and our 8.9% ROE and ¥228 BPS forecasts. Implied P/E is 15x.
Price catalyst Note: Recommendation timeline - if not a continuous line, then there was no Macquarie coverage at the time or there was an embargo period.
? 12-month price target: ¥300 based on a Price to Book methodology. ? Catalyst: 1) Occurrence of extra costs for SPB tanks used in LNG ships; and,
Source: FactSet, Macquarie Research, February 2017 (all figures in JPY unless noted)
2) occurrence of extra costs in construction of the US-based LNG plant.
Action and recommendation ? We maintain an Underperform rating.
Analyst(s) Kunio Sakaida +81 3 3512 7873 kunio.sakaida@macquarie.com Tomoki Takeshima +81 3 3512 7432 tomoki.takeshima@macquarie.com
15 February 2017
Macquarie Capital Securities (Japan) Limited
Please refer to page 8 for important disclosures and analyst certification, or on our website www.macquarie.com/research/disclosures. 13

HONG KONG/CHINA 2128 HK Stock price as of 16/02/2017 GICS sector Market cap Avg Value Traded (3m) 12m high/low PER FY15 P/BV FY15 HK$ US$m US$m HK$ x x
MacVisit – China Lesso Not rated 5.63 Industrials 2,253 2.1 5.97/3.80 9.9 1.6
Rising Prices on Supply Constraint ? Supply constraint drove 2H16 prices higher – China Lesso (Lesso) mainly
sells plastic pipes and pipe fittings for municipal and housing projects. Its products include PVC and non-PVC segments, with a wide range of sizes. Tightened environmental regulations limited raw material supplies, and blended ASP rose by 10-20% in 2H16 relative to 1H16. ? Passing on cost increases – Intermediate material producers like China
Historical financials YE Dec (Rmb m) Revenue % growth EBITDA % growth EPS % growth EBIT Margin 2013A 13,071 20.0 2,279 21.1 0.48 17.1 17.4 2014A 14,823 13.4 2,520 10.6 0.50 4.2 17.0 2015A 15,264 3.0 2,653 5.3 0.52 4.0 17.4
Lesso raised prices last year, as raw material cost increased. This will likely push Lesso to see strong YoY revenue growth while maintaining its dollar margins. We believe order pull-in can drive operating efficiencies, reversing the effect of a downward price trend in 2H15 and 1H16. ? Market potential – Although the overall pipe and pipe fitting market relies on
Source: Company data, FactSet,February 2017
property construction demand, development of new town centres has raised demand for PVC pipes, especially for water-related infrastructure. As suppliers consolidate, China Lesso may see higher than industry growth as it expands outside of China’s southern region. Southern China currently accounts for 60% of Lesso’s total revenue. ? Main product segments – Lesso produces plastic pipes and pipe fittings,
7.0 6.0 5.0 4.0
1.2 1 0.8 0.6
3.0 2.0 1.0 0.0 Jan-16 Feb-16 Apr-16 Jun-16 Jul-16 Sep-16 Oct-16 Dec-16 0.4 0.2 0
which accounted for 90% of its sales in 1H16. Other sales are from building materials, its mall platform for plumbing accessories and other services related to building construction. 70% of its sales are from municipal pipes that connect to the new property projects, while others are used by contractors for property developments. Lesso shipped 768k tonnes of pipe and pipe fittings in 1H16, +11% YoY. ? Developing new opportunities – Water supply and drainage remain the
2128 HK Equity
HSI Relative
Source: Bloomberg, Company data, February 2017
main business segments, and Lesso can also see more significant growth with power supply and telecommunication usage of pipes. As municipal governments look for integrated approaches for pipe fittings, Lesso can benefit from demand in non-PVC products. ? Valuation comparisons – China Lesso currently trades at 8.3x and 7.5x
2016/17 Bloomberg consensus earnings. Near-term catalysts are a rise in municipal and property construction, spending in new municipal water projects and acquisition opportunities in China.
Analyst(s) Timothy Lam +852 3922 1086 timothy.lam@macquarie.com
15 February 2017
Macquarie Capital Limited
Please refer to page 5 for important disclosures and analyst certification, or on our website www.macquarie.com/research/disclosures. 14

SINGAPORE
MAGIC SP Price (at 05:50, 15 Feb 2017 GMT) Valuation - DCF (WACC 7.5%)
Outperform S$0.97 S$ 1.45
Mapletree GCCT Worst is over Event ? We believe the worse is over for Festival Walk, which accounts for 71% of our
12-month target S$ 1.13 Upside/Downside % +16.5 12-month TSR % +23.7 Volatility Index Low GICS sector Real Estate Market cap S$m 2,703 Market cap US$m 1,901 Free float % 62 30-day avg turnover US$m 3.5 Number shares on issue m 2,787 Investment fundamentals Year end 31 Mar Revenue EBIT EBIT growth Reported profit Adjusted profit EPS rep EPS rep growth EPS adj EPS adj growth PER rep PER adj Total DPS Total DPS growth Total div yield ROA ROE EV/EBITDA Net debt/equity P/BV m m % m m ¢ % ¢ % x x ¢ % % % % x % x 2016A 2017E 2018E 2019E 336.6 249.8 24.7 428.1 199.9 15.7 238.3 7.3 11.9 6.2 13.3 7.3 11.1 7.5 4.3 6.0 19.6 64.9 0.8 343.2 250.0 0.1 152.7 151.0 5.5 -64.8 5.5 -25.5 17.6 17.8 7.0 -3.1 7.3 4.1 4.4 19.7 67.3 0.8 349.9 255.8 2.3 155.8 155.8 5.6 1.3 5.6 2.5 17.3 17.3 7.0 -0.8 7.2 4.2 4.7 19.3 69.3 0.8 356.0 260.4 1.8 159.6 159.6 5.7 1.3 5.7 1.3 17.1 17.1 7.1 2.0 7.3 4.3 4.8 19.1 71.2 0.8
projected revenue in FY18 and 82% of NAV. As we expect retail sales to bottom out in CY3Q, the mall should be able to avoid negative rental reversion throughout the entire down cycle. Gateway Plaza surprised us by quickly refilling the space vacated by P2P tenants. The negative margin impact due to migration of BT to VAT and new property tax implementation should be fully reflected in FY3Q numbers announced. ? Compared to the average dividend yield of 6.8% for SGREITS, MAGIC is
slightly better at 7.3%. Although there is no plan for disposal, but its quality assets in prime locations in HK, BJ and SH can command very attractive market valuation. We reiterate our Outperform rating with a 24% TSR.
Impact ? After going through two FY of negative growth of tenant sales (-5% for FY16, -
10% for 3Q17) and footfall (-3.3% for FY16, -3.2% for 3Q17), Festival Walk should resume growth in FY18. From 2002 till 2015, the mall went through 12 years of almost interrupted growth in tenant sales with a CAGR of 8.2%. We expect FY17 sales of around HKS$4.8bn to be a stable base, on which future growth will be mainly driven by HK locals rather than by visitors. Thus, keys to upside comes from 1) competing and differentiating against nearby malls in Sha Tin and Mong Kok MTR stations and 2) attracting new traffic from a wider radius of customers. ? The strong rebound of Gateway Plaza occupancy highlights the leasing
MAGIC SP rel SNGPORI performance, & rec history
capability of the asset and leasing team. For the lease expiry to take place in FY18, one major tenant had already extended the lease to FY23. We expect stable performance for this Beijing office project going forward. We estimate 1.5% of impact on NPI due to conversion of business tax to VAT and 2.1% impact due to a harsher property tax. However, these two negative impacts should be reflected in the stock price already.
Earnings and target price revision ? DPU: FY17E -5.4% to reflect latest Q317 actual figures. Target price revised
from S$1.10/unit to S$1.13/unit due to lower cap rate applied to reflect open market trend. 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, February 2017 (all figures in SGD unless noted)
Price catalyst ? 12-month price target: S$1.13 based on a Sum of Parts methodology. ? Catalyst: HK monthly retail sales, DPU accretive acquisition
Action and recommendation Analyst(s) David Ng, CFA +852 3922 1291 Catherine Li +852 3922 1161 david.ng@macquarie.com catherine.li@macquarie.com
? After a DPU decline of 2.7% to S$0.071 in FY17 and S$0.070 in FY18, we
16 February 2017
Macquarie Capital Limited
expect it to rebound to S$0.071 in FY19. Stock correction of 15% since last September presents a good opportunity to buy at 7.3% yield. Further upside needs to come from new acquisition. The green-field office tower in Kowloon East, Mapletree Bay Point of over 600k sqft targets completion at the end of 2017 and may become an acquisition target in 2019.
Please refer to page 17 for important disclosures and analyst certification, or on our website www.macquarie.com/research/disclosures. 15

HONG KONG
17 HK Price (at 08:50, 15 Feb 2017 GMT) Valuation - DCF
Outperform HK$9.29 HK$ 17.63
New World Development Diversifying its base Event ? New World Development (NWDL) acquired the Cheung Sha Wan commercial
12-month target HK$ 13.15 Upside/Downside % +41.6 12-month TSR % +46.5 Volatility Index Low/Medium GICS sector Real Estate Market cap HK$m 89,958 Market cap US$m 11,593 Free float % 55 30-day avg turnover US$m 12.2 Number shares on issue m 9,683 Investment fundamentals Year end 30 Jun Revenue EBIT EBIT growth Reported profit Adjusted profit EPS rep EPS rep growth EPS adj EPS adj growth PER rep PER adj Total DPS Total DPS growth Total div yield ROA ROE EV/EBITDA Net debt/equity P/BV 2016A 2017E 2018E 2019E m 59,570 61,336 70,811 68,962 m 8,898 11,451 13,167 14,025 % -6.3 28.7 15.0 6.5 m 8,666 8,553 45,034 11,091 m 6,893 7,990 9,405 9,503 HK$ 0.96 0.92 4.79 1.18 % -57.1 -3.9 419.6 -75.4 HK$ 0.76 0.86 1.00 1.01 % -3.2 12.8 16.3 1.0 x 9.7 10.1 1.9 7.9 x 12.2 10.8 9.3 9.2 HK$ 0.44 0.45 0.46 0.48 % 4.8 2.3 2.2 4.3 % 4.7 4.8 5.0 5.2 % 2.3 2.8 3.0 3.1 % 3.8 4.4 4.6 4.2 x 12.4 9.7 8.6 8.6 % 39.7 28.4 21.5 18.9 x 0.5 0.5 0.4 0.4
site at a sales value of HK$7.79bn, or AV of HK$7.8k psf. The price is slightly above the market estimates (HK$6.0-7.5k psf). We expect it to develop into twin office towers and will be for sale, similar to Sun Hung Kai’s KCC project in Kwai Chung. We estimate a GP margin of 20% assuming ASP of HK$12.0k psf, which will translate into a limited NAV accretion of HK$0.03/sh. ? While the margin is not high, we think this acquisition can help diversify
NWDL’s saleable resources into non-residential segments. This can lower its sales risks under current cooling measures. We estimate its net gearing to go up by 4.3ppt, but the cash outflow will be largely offset by its property sales. ? NWDL is one of our picks in HK property. We expect company to re-rate in
the coming 12 months due to 1) incremental increase in rental income (>HK$3bn EBIT when mature) given the completion of NW Centre in late 2017; 2) improved execution in its China business and 3) more balanced stream of income from both property sales and rental income.
Impact ? Analysis of Cheung Sha Wan project. We estimate its GP margin of 19.7%
based on an ASP assumption of HK$12.0k psf, or limited NAV accretion of HK$0.03/sh when the company starts presales three years later (Figure 1). Total GFA of the project amounts to 1.0m sqft. It is next to a newly built international school and within five minutes’ walk to Lai Chi Kok MTR station. ? Net gearing to go up 4.3ppt under pro-forma analysis. We estimate its net
17 HK rel HSI performance, & rec history
gearing to go up by 4.3ppt, compared to 44.5% net gearing by the end of June 2016. However, the land payment outflow should be largely offset by strong sales in its recent new launch The Pavilia Bay in January 2017 (sales of ~HK$7bn) and outstanding proceeds from China project disposals. ? Good progress in New World Centre redevelopment. Its trophy project, the
NW Centre (3.2m sqft), is to complete in late 2017. Upon completion, we believe this project should further strengthen New World’s rental income portfolio and balance sheet. Any successful pre-leasing with better-thanexpected rent in both retail and office segments would be positive catalysts. ? HK contracted sales set to improve. We expect its HK sales to improve 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, February 2017 (all figures in HKD unless noted)
from HK$6.6bn in FY16 to ~HK$13-14bn p.a. in FY17-18. Since its debut in January, NWDL sold 744 units (76% of 983), generating revenue of HK$6.8bn. It released a fourth batch (114 units) for sale last Friday and delivered a take-up rate of 49%, compared to >90% in the first three rounds (~700 units). Upcoming new launches in 2017 include Mount Pavilia (680 units), Artisan House (250 units) and Tuen Mun project (100 units).
Analyst(s) Raymond Liu, CFA +852 3922 3629 Catherine Li +852 3922 1161 David Ng, CFA +852 3922 1291 raymond.liu@macquarie.com catherine.li@macquarie.com david.ng@macquarie.com
Earnings and target price revision ? No change.
Price catalyst ? 12-month price target: HK$13.15 based on a Sum of Parts methodology. ? Catalyst: Successful pre-leasing of NW Centre with better-than-expected rent
16 February 2017
Macquarie Capital Limited
Action and recommendation ? NWDL currently trades at 9.3x FY18E PE, 0.5x PB and 47% NAV discount.
Please refer to page 8 for important disclosures and analyst certification, or on our website www.macquarie.com/research/disclosures. 16

JAPAN
7915 JP Price (at 14:50, 14 Feb 2017 GMT) Valuation - Price to Book
Outperform ¥3,310 ¥ 4,000
Nissha Printing Sales increase and so do costs Event ? We raise device sales estimate to account for size changes in tablet PC
12-month target ¥ 4,000 Upside/Downside % +20.8 12-month TSR % +21.8 Volatility Index High GICS sector Commercial & Professional Services Market cap ¥m 149,049 Market cap US$m 1,308 Free float % 61 30-day avg turnover US$m 10.6 Foreign ownership % 25.7 Number shares on issue m 45.03 Investment fundamentals Year end 31 Dec Revenue EBIT EBIT growth Recurring profit Reported profit Adjusted profit EPS rep EPS rep growth EPS adj EPS adj growth PER rep PER adj Total DPS Total div yield ROA ROE EV/EBITDA Net debt/equity P/BV bn bn % bn bn bn ¥ % ¥ % x x ¥ % % % x % x 2015A 2016E 2017E 2018E 119.2 10.5 20.5 9.2 6.9 8.3 127.6 -48.9 152.6 -47.1 25.9 21.7 30.0 0.9 7.8 12.1 10.3 -5.1 2.6 118.0 -1.9 nmf -3.9 -5.0 -4.3 -93.2 nmf -80.2 nmf nmf nmf 30.0 0.9 -1.2 -6.5 31.5 24.0 2.8 133.1 7.7 nmf 8.1 5.9 6.6 109.0 nmf 122.9 nmf 30.4 26.9 30.0 0.9 5.0 10.1 10.6 17.2 2.6 204.3 17.6 129.6 18.1 13.7 14.7 253.5 132.6 272.0 121.4 13.1 12.2 40.0 1.2 10.6 20.0 6.5 9.1 2.3
models and larger smartphone volume in 2017, and introduce forecasts based on December-end financial year. Overall we think the roadmap is clear, and Nissha is one of the fastest-growing companies in our component coverage.
Impact ? Fiscal year change will be confusing, so apple-to-apple first. Nissha will
shift to December-end FY beginning April 2017, so FY17 will be a nine-month year. Therefore, for an apple-to-apple comparison based on March ending FY3/18, our forecast changes are: 1) tablet PC/smartphone device sales estimate raised from ¥60bn to ¥89bn; of the ¥29bn raise, ¥9bn comes from tablet PC and ¥20bn from smartphones; 2) upward revision on tablet PC is due to size change in models, as we think the product mix shift to larger sizes should boost average area by 18%, offsetting unit decline, so tablet PC sensor sales could be flat YoY vs our previous estimate of a decline; 3) POLED smartphone unit assumption raised from 60m to 77m units; and 4) forex assumption changed from ¥102/US$ to ¥110/US$ (translating to a ¥6.5bn increase in sales). ? Cost increase is bigger than what we had expected. Again, based on
7915 JP vs TOPIX, & rec history
March fiscal ending, we raise FY3/18E OP by about ¥1bn and FY3/19E by about ¥3bn vs. our original forecast, despite a ¥29bn upward revision in sales forecasts. In theory, we think marginal profit should be 30-40%, so a ¥29bn sales revision should translate into a ¥9-12bn marginal profit boost. However, given its ¥1.5bn labour cost increase guidance for 4Q FY3/17, we think labour cost increase is likely ¥5-6bn on an annualized basis in 2017, and there could be an additional ¥1-2bn fixed-cost increase. Our ¥2bn depreciation increase estimate for FY3/18 is unchanged. ? Peak OP likely in 2019. We estimate POLED smartphone will continue to rise
in 2018 as the adoption widens—our assumption is unchanged. On a 9-mth basis, we estimate 2017 OP will only rise to about ¥8bn, and expect OP to peak in 2019 on full-year impact of model transition. We think key areas to monitor in the next 1-2 years are: 1) threat of alternative technologies such as Y-OCTA; 2) market share changes, particularly in tablet PC and force touch sensor; and, 3) visibility of alternative materials replacing ITO film-based sensors. 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, February 2017 (all figures in JPY unless noted)
Earnings and target price revision ? For details on apple-to-apple changes, go to page 3. We introduce forecasts
Analyst(s) George Chang +81 3 3512 7854 Chenyu Yao +813 3512 7849 george.chang@macquarie.com chenyu.yao@macquarie.com
based on December-end FY. We raise TP from ¥3,400 (2.2x FY3/19E PBR) to ¥4,000 (2.8x 2018E PBR). Our TP suggests 15x 2018E PER.
Price catalyst ? 12-month price target: ¥4,000 based on a Price to Book methodology. ? Catalyst: Forex, POLED adoption extends to smartphone
15 February 2017
Macquarie Capital Securities (Japan) Limited
Action and recommendation ? Maintain Outperform.
Please refer to page 7 for important disclosures and analyst certification, or on our website www.macquarie.com/research/disclosures. 17

INDIA
PHNX IN Price (at 08:50, 15 Feb 2017 GMT) Valuation - DCF (WACC 16.6%)
Outperform Rs348.05 Rs 379.90
Phoenix Mills Malls continue to shine bright Event ? We attended the conference call of Phoenix Mills to discuss its 3Q FY17
12-month target Rs 380.00 Upside/Downside % +9.2 12-month TSR % +10.4 Volatility Index Medium GICS sector Real Estate Market cap Rsm 53,275 Market cap US$m 792 Free float % 36 30-day avg turnover US$m 0.3 Number shares on issue m 153.1 Investment fundamentals Year end 31 Mar Revenue EBIT EBIT growth Recurring profit Reported profit Adjusted profit EPS rep EPS rep growth EPS adj EPS adj growth PER rep PER adj Total DPS Total DPS growth Total div yield ROA ROE EV/EBITDA Net debt/equity P/BV 2016A 2017E 2018E 2019E m 17,786 18,015 18,951 20,183 m 6,128 8,438 9,117 9,889 % 3.2 37.7 8.0 8.5 m 2,134 6,020 6,057 6,891 m 1,186 4,034 4,058 4,617 m 1,186 4,034 4,058 4,617 Rs 8.18 27.83 28.00 31.85 % -5.1 240.1 0.6 13.8 Rs 8.18 27.83 28.00 31.85 % -5.1 240.1 0.6 13.8 x 42.5 12.5 12.4 10.9 x 42.5 12.5 12.4 10.9 Rs 2.79 4.34 4.37 4.97 % 20.6 55.8 0.6 13.8 % 0.8 1.2 1.3 1.4 % 8.8 11.4 12.0 12.7 % 6.8 20.1 17.3 17.0 x 11.5 9.3 8.7 8.1 % 187.1 153.2 129.5 108.0 x 2.7 2.3 2.0 1.7
results. The company had reported strong operating performance (aggregate consumption +10% yoy despite demonetisation) in its malls in 3Q FY17. We maintain our OP rating with a target price of Rs380.
Impact ? Renewal schedule provides strong visibility on rental growth: Large
spaces are coming up for rent renegotiation across various malls in the FY17-18E period (refer to fig 4). Rent renewals are likely to yield higher rents (than the standard 5% annual increase) as avg trading density growth is 6-14% across the malls. Total rent income (net rent) at Rs2bn in 3Q FY17 is up ~12% yoy. ? Debt not a concern as rents are ~1.6x interest payments: Annualised
rental income (including hotel properties) is ~1.6x annual interest payments. All the malls, except Kurla, are generating EBITDA which are sufficient to pay off interest (refer to fig 5). With rent renegotiations, we expect interest coverage to improve further in FY17-18E to 1.74-1.9x. ? Cautious on growth strategy – open to acquiring/building new malls:
Barring two small expansions at Kurla and Chennai malls, the company has a stable portfolio of operational malls. The company is open to the both building new malls and buying existing/ under-construction malls. However, the company is cautious in this aspect and will limit this exercise to select tier 1 and 2 cities in India and IRRs of 15-20%. ? Other highlights: 1) Out of the total debt of Rs39bn, ~93% debt is secured
PHNX IN rel BSE Sensex performance, & rec history
by discounting receivables like lease rental discounting (LRD) and Commercial mortgage based securities (CMBS), 2) H&M is opened at both Lower Parel and Kurla malls in 2Q FY17 which also helped consumption boost. Pantaloon has moved out of Lower Parel which will help in further improvement in tenant mix, 3) Interest cost continues to fall for the company. Blended interest cost has fallen by ~53bps in 9M FY17 and stands at 10.47%.
Earnings and target price revision ? No change. Note: Recommendation timeline - if not a continuous line, then there was no Macquarie coverage at the time or there was an embargo period.
Price catalyst ? 12-month price target: Rs380.00 based on a Sum of Parts methodology. ? Catalyst: pick up in consumption and rents at malls
Source: FactSet, Macquarie Research, February 2017 (all figures in INR unless noted)
Action and recommendation Analyst(s) Abhishek Bhandari , CFA +91 22 6720 4088 abhishek.bhandari@macquarie.com
? In our recent detailed note, Malls shining bright, Phoenix Mills has one of the
most attractive rent yielding portfolios amongst the listed real estate space in India. We maintain our Outperform rating with a target price of Rs380.
15 February 2017
Macquarie Capital Securities India (Pvt) Ltd
Please refer to page 6 for important disclosures and analyst certification, or on our website www.macquarie.com/research/disclosures. 18

KOREA
000810 KS Price (at 08:50, 15 Feb 2017 GMT) Valuation - P/EV
Outperform Won279,000 Won 310,000 Won 310,000 % +11.1 % +13.8 Low/Medium Insurance Wonbn 14,108 US$m 12,403 % 63 US$m 13.4 m 50.57
Samsung Fire & Marine Weaker results and conservative guidance for 2017 Event ? SFM released its 4Q16 NP of Won85bn, smaller than our Won178bn estimate
12-month target Upside/Downside 12-month TSR Volatility Index GICS sector Market cap Market cap Free float 30-day avg turnover Number shrs on issue Year end 31 Dec
and Won172bn Bloomberg consensus. In addition, its CFO gave conservative Won930bn 17E NP guidance. However, as 1) its weak results were from oneoffs and 2) we expect SFM to beat its guidance, we maintain O/P on SFM.
Impact ? Weaker 4Q16 was mainly due to one-offs: First, there was Won32bn one-
Investment fundamentals 2016A 2017E 2018E 2019E 18,440 -416 1,793 1,348 0 0 0 1,348 1,022 1,144 24,148 11.6 7,400 2.7 12,304 243,31 4 9.6 1.5 1.1 18,064 19,039 -405 1,962 1,533 0 0 0 1,533 1,162 1,275 26,919 10.4 8,400 3.0 13,108 259,22 9 10.0 1.6 1.1 19,143 bn 17,406 17,987 NEP -568 -441 Underwriting Result bn bn 1,688 1,844 Investment Income bn 1,094 1,365 Pretax PC Op Inc bn 0 0 Life Prem bn 0 0 Life Total Rev bn 0 0 Pretax Life Op Inc bn 1,094 1,365 PBT bn 841 1,034 Reported profit bn 880 1,113 Net Op Income Won 18,573 23,485 EPS adj x 15.0 11.9 PER adj Won 6,100 7,500 DPS % 2.2 2.7 Dividend yield bn 10,881 11,597 Total SH Funds Won 215,17 229,33 BV/S 9 1 % 8.4 9.9 ROE % 1.3 1.6 ROA x 1.3 1.2 P/BV bn 16,087 17,077 Tot Embedded Val
off losses in commercial line in Dec17 and, thus, its loss ratio for commercial line came in abnormally high at 101% vs. our estimate of 82%.Second, SFM recorded a Won62bn impairment loss from its stake in Samsung C&T. Third, obviously, there was valuation losses from rising interest rates. ? Won930bn 17E NP guidance is too conservative: SFM sold its old H/Q and
should post Won230bn gains in 1Q17. The CFO expected about Won100bn losses from other real estate disposals and depreciation to rise (cWon50bn in 2017) due to investments in the ERP system. However, considering 1) one-off costs in 2016, 2) benefits from higher interest rates, and 3) its improving underwriting results, we expect SFM’s NP to exceed Won1.0trn in 2017. ? Bigger EV and stronger VIF – ROEV improved to 11.6%: The insurer’s
ANW increased 10.7% YoY mainly due to the increase in the value of its stake holdings (Samsung Electronics). In addition, its VIF came in stronger than expected at Won5.5trn (+8.3% YoY). As a result, SFM’s ROEV came in at 11.6% in 2016 versus 8.1% in 2017. ? Slightly smaller DPS, in-line payout ratio, and guiding for share
000810 KS rel KOSPI performance, & rec history
buybacks: SFM announced 2016 DPS of Won6,100, which was smaller than our estimate of Won6,800. However, it was mainly due to smaller earnings in 4Q16. SFM’s payout ratio (31%) was in-line with our estimate and, thus, we expect its DPS to increase to Won7,500 in 2017. The CFO mentioned that SFM is positively considering share buybacks in the near future.
Earnings and target price revision ? We reflected 4Q16 results, expected net disposal gains from real estate
Note: Recommendation timeline - if not a continuous line, then there was no Macquarie coverage at the time or there was an embargo period.
(Won130bn) based on the managements’ guidance, and potential increase in depreciation, which resulted in +0.3%/-5.5% changes in 17E/18E EPS, respectively. No change in our price target due to bigger EV than expected.
Source: FactSet, Macquarie Research, February 2017 (all figures in Won unless noted, TP in KRW)
Price catalyst ? 12-month price target: Won310,000 based on a P/EV methodology. ? Catalyst: 1. Signs of bottoming interest rate cycle, 2. Regaining momentum in
Analyst(s) Chan Hwang +82 2 3705 8643 chan.hwang@macquarie.com
long-term line growth, and 3. Clear guidance for efficient capital management
Action and recommendation ? Given weak 4Q16 results and conservative 2017 guidance, we think the stock
16 February 2017
Macquarie Securities Korea Limited
could be under pressure in the short term. However, as its weak 4Q16 was from one-offs and we expect SFM to beat its guidance, we recommend investors to accumulate SFM using possible weaknesses in its share price.
Please refer to page 5 for important disclosures and analyst certification, or on our website www.macquarie.com/research/disclosures. 19

HONG KONG
981 HK Price (at 10:48, 15 Feb 2017 GMT) Valuation - PER
Outperform HK$10.68 HK$ 15.00
SMIC Long-term growth target unchanged Event ? SMIC’s 4Q16 OP missed, but was offset by non-controlling interests. It guides
12-month target HK$ 15.00 Upside/Downside % +40.4 12-month TSR % +40.4 Volatility Index Medium GICS sector Semiconductors & Semiconductor Equipment Market cap HK$m 48,583 Market cap US$m 6,624 30-day avg turnover US$m 25.6 Number shares on issue m 4,549 Investment fundamentals Year end 31 Dec 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 2016A 2017E 2018E 2019E m 2,914.2 3,540.8 4,282.6 5,142.3 m 339.2 419.5 523.4 652.2 % 52.8 23.7 24.8 24.6 m 376.6 433.9 528.0 650.2 ¢ 8.9 10.2 12.4 15.3 % 35.7 14.5 21.7 23.2 x 15.5 13.5 11.1 9.0 ¢ 0.0 0.0 0.0 0.0 % 0.0 0.0 0.0 0.0 % 3.9 4.0 4.5 5.0 % 9.6 9.9 10.9 12.0 x 5.8 4.0 3.4 2.7 % 6.4 23.8 32.2 34.8 x 1.4 1.3 1.1 1.0
1Q17 revenue to decline 2-4% QoQ, with gross margin at 25-28%. SMIC reiterates its target to grow revenue by a 20% CAGR in 2016-19. We reiterate our Outperform rating but trim our target price from HK$16.0 to HK$15.0.
Impact ? 4Q16 OP miss offset by non-controlling interests: Revenue of US$815m
and gross margin of 30.2% were in line with expectations. Operating profit missed our/consensus’ by 45/55% due to higher R&D expenses and accrued employee bonus. However, the lower operating profit was largely offset by non-controlling interests of US$46m, which is mainly due to R&D expenses shared by Beijing JV partners. Overall, 4Q16 earnings beat our numbers by 11% but missed consensus’ by 12%. ? 1Q17 seasonal weakness: SMIC guides for 1Q17 revenue to decline 2-4%
QoQ, with gross margin at 25-28%. SMIC attributes the weaker 1Q17 revenue to seasonality and weakness in certain customers/area (e.g., fingerprint customer), but it expects to fill the gap with new customers and other applications like PMIC and smartcards. The lower gross margin is mainly due to lower utilization and higher depreciation costs. ? 2017 driven by strong demand for 28nm/40nm: SMIC reiterates its target
981 HK rel HSI performance, & rec history
to grow revenue by a 20% CAGR in 2016-19. Key growth drivers for 2017 are strong demand for 28nm/40nm and a more diverse variety of mature technologies. It expects 28nm to account for a high-single-digit % of revenue by 4Q17 (vs 3.5% in 4Q16). The company also guides gross margin to be in the high-20s% for 2017, and the opex-to-sales ratio at a high-teens%. SMIC also plans to spend US$2.3bn capex for 2017, mainly for 12” capacity expansion.
Earnings and target price revision ? We factor in 4Q16 results and trim our 2017/18E EPS by 4%/7% on lower Note: Recommendation timeline - if not a continuous line, then there was no Macquarie coverage at the time or there was an embargo period.
margin assumption. Accordingly, we adjusted target price from HK$16.0 to HK$15.0 on unchanged 19x 2017E PE.
Source: FactSet, Macquarie Research, February 2017 (all figures in USD unless noted, TP in HKD)
Price catalyst ? 12-month price target: HK$15.00 based on a PER methodology. ? Catalyst: earnings results/outlook, progress of advanced technologies.
Action and recommendation Analyst(s) Patrick Liao +886 2 2734 7515 Lynn Luo +886 2 2734 7534 patrick.liao@macquarie.com lynn.luo@macquarie.com
? We reiterate our Outperform rating with a new target price of HK$15.0 (19x
2017E PE). We believe SMIC will continue to benefit from rising Chinese IC demand and a 28nm ramp-up. We expect SMIC’s earnings to register a 22% CAGR in 2017-19, and remain positive on the long-term sustainability of its core foundry business.
15 February 2017
Macquarie Capital Limited, Taiwan Securities Branch
Please refer to page 6 for important disclosures and analyst certification, or on our website www.macquarie.com/research/disclosures. 20

JAPAN
8113 JP Price (at 14:51, 09 Feb 2017 GMT) Valuation - DCF
Neutral ¥2,546 ¥ 2,4003,000 2,500 -1.8 -1.2 Medium
Unicharm Lowered Volume Growth Outlooks for Chinese and Indonesian Markets Conclusion ? Unicharm reported ¥78.3bn (-2% YoY) in FY12/16 OP, exceeding our forecast
12-month target ¥ Upside/Downside % 12-month TSR % Volatility Index GICS sector Household & Personal Products Market cap ¥bn Market cap US$m 30-day avg turnover US$m Number shares on issue m Investment fundamentals Year end 31 Dec Revenue EBIT EBIT growth Recurring profit Reported profit Adjusted profit EPS rep EPS rep growth EPS adj EPS adj growth PER rep PER adj Total DPS Total div yield ROA ROE EV/EBITDA Net debt/equity P/BV bn bn % bn bn bn ¥ % ¥ % x x ¥ % % % x % x
1,580 13,988 31.8 620.8
(¥76bn) and the consensus estimate (¥77.3bn). Yet it guides for ¥84bn in FY12/17 OP (IFRS basis; +6% YoY), which is below our forecast (¥85bn) and the consensus estimate (¥85.6bn). The FY12/17 OP guidance only works out to a 1% YoY gain in real terms excluding one-time costs from FY12/16 (¥4.2bn). ? Unicharm previously targeted double-digit profit growth in its period-start plan.
2015A 2016E 2017E 2018E 738.7 79.9 nmf 71.4 40.5 39.2 66.7 nmf 64.4 nmf 38.2 39.5 14.8 0.6 11.4 9.7 13.0 -15.4 3.9 717.6 76.0 -4.9 72.2 39.6 40.8 65.4 -1.9 67.9 5.4 38.9 37.5 13.0 0.5 11.0 10.9 13.0 -9.6 4.2 756.6 85.0 11.8 84.2 45.5 50.1 76.8 17.5 84.0 23.6 33.1 30.3 15.0 0.6 11.6 12.4 11.7 -21.5 3.3 803.6 95.6 12.5 94.8 53.6 58.2 91.1 18.7 98.5 17.3 27.9 25.8 18.0 0.7 11.7 12.2 10.4 -27.0 2.8
The FY12/17 guidance, however, uses weaker assumptions for earnings growth. We attribute this view to slower market growth in China and Indonesia than initially expected. Unicharm reduced market volume growth for China from 6-7% annually to 3-5%. While the Indonesian market had been sustaining a pace of 10% or more, it slowed to 2% recently. Key issues amid weaker volume growth are expansion of high value-added products and broadening the scope of people who use baby disposable diapers. ? Unicharm presented a share buyback program (up to ¥14bn) along with the
FY12/16 results announcement.
Impact ? We think Unicharm resolved the inventory issue for Indonesia that emerged in
8113 JP vs TOPIX, & rec history
FY12/16, and removal of one-time costs from this situation (¥4.2bn) offers a positive factor for FY12/17 earnings. Yet we do not expect full-fledged profit recovery until after the release of new products in 2H. We also see a possibility of losses continuing for the Indonesia business in 1H FY12/17 due to higher competition-related costs. ? We believe Unicharm’s sales of baby disposable diapers in China dropped by
an upper single-digit rate in FY12/16. Japan-made imports appear to have risen to over 60% of sales (vs. about 40% in FY12/15). Unicharm aims to increase sales by an upper single-digit percentage in FY12/17 driven by expansion of the online channel and reinforcement of Japan-made imports and pull-up diapers.
Earnings and target price revision 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, February 2017 (all figures in JPY unless noted)
? We maintain our forecasts and ¥2,500 price target.
Price catalyst ? 12-month price target: ¥2,500 based on a Price to Book methodology. ? Catalyst: Profit levels in China and Indonesia in quarterly results should
Analyst(s) Satsuki Kawasaki +81 3 3512 7879 satsuki.kawasaki@macquarie.com
remain an important factor for the share-price trend.
Action and recommendation ? We maintain our Neutral rating.
15 February 2017
Macquarie Capital Securities (Japan) Limited
Please refer to page 5 for important disclosures and analyst certification, or on our website www.macquarie.com/research/disclosures. 21

INDIA
VEDL IN Price (at 14:50, 14 Feb 2017 GMT) Valuation - Sum of Parts
Outperform Rs256.05 Rs 340.00
Vedanta Triggers lined up Event ? Strong standalone earnings: VEDL’s standalone 3Q17 EBITDA at Rs19bn,
12-month target Rs 340.00 Upside/Downside % +32.8 12-month TSR % +35.2 Volatility Index High GICS sector Materials Market cap Rsm 759,110 Market cap US$m 11,331 Free float % 36 30-day avg turnover US$m 34.8 Number shares on issue m 2,965 Investment fundamentals Year end 31 Mar Revenue EBIT EBIT growth Recurring profit Reported profit Adjusted profit EPS rep EPS rep growth EPS adj EPS adj growth PER rep PER adj Total DPS Total div yield ROA ROE EV/EBITDA Net debt/equity P/BV bn bn % bn bn bn Rs % Rs % x x Rs % % % x % x 2016A 2017E 2018E 2019E 644.3 80.0 -46.1 67.5 155.8 31.3 52.55 nmf 10.55 -51.3 4.9 24.3 3.50 1.4 4.2 6.3 6.3 32.6 1.7 789.6 155.6 94.6 120.3 58.1 58.1 19.59 -62.7 19.59 85.6 13.1 13.1 3.92 1.5 8.1 12.4 4.1 19.2 1.5 987.4 1,048.8 235.7 264.2 51.5 12.1 210.1 254.7 118.7 149.0 118.7 149.0 31.92 40.10 63.0 25.6 31.92 40.10 63.0 25.6 8.0 6.4 8.0 6.4 6.38 8.02 2.5 3.1 11.8 12.5 22.1 23.3 3.6 3.3 4.2 -13.9 1.6 1.4
+86% YoY was 3% ahead of our estimates led by aluminium and power division. Management maintained the guidance of Cairn merger by Mar-17 but we expect a quarter delay. With limited capex, VEDL standard business could become FCF breakeven in FY17 and help deleverage from FY18E. Further, volume ramp up in Aluminium, power and iron ore division with supportive commodity prices would drive 25% cagr EBITDA growth in FY17-19E. Key near term triggers are completion of Cairn merger, dividend policy, increase in index weights, earnings upgrade and potential high dividend from HZL. Reiterate Outperform. Our TP of Rs340/share, implying +35% upside in 1 year.
Impact ? Strong 3Q17 across businesses: While consol revenue was +31% YoY
whereas consol EBITDA of Rs59bn was +89% YoY led by stronger Zn prices, and higher volumes at Al, Power and Iron ore division. EPS of Rs6.3 vs. Rs0.1 in 3Q16. Aluminium volumes were +21% YoY with EBITDA margin of $392/t vs. $165/t YoY driven by stronger metal prices. Ramp up at 1.9GW Talwandi Sabo power plant improved power division margins to Rs1.3/unit, +18% YoY. Zinc International witnessed price tailwinds whereas Iron ore division witnessed stronger volumes (refer Fig 1 on page 2 for details). ? Cairn Merger – Any risk? The Cairn merger requires approval from RBI,
National Company Law Tribunal and ministry of petroleum. We believe these are regulatory formalities and cannot put the merger under threat. We only see a delay risk in the event. VEDL has maintained its earlier guidance of Mar-17 for competition, however, bureaucracy can result in 2-3 months delay. ? Multiple growth avenues: VEDL has received an approval to mine 3mnt
VEDL IN rel BSE Sensex performance, & rec history
additional iron ore at Goa in 4Q17 above their 5.5mnt annual quota. It has sought higher production approval for FY18E and we are building 15% YoY volume growth. 2GW TSL power plant as achieved 77% availability in 3Q17 and expect to run at 80-85% PAF in FY18-19E. VEDL is aggressively ramping up aluminium production under VAL, Balco and we expect +51% YoY volume in FY18E. Captive bauxite mines post on going ramp up would feed 30% of bauxite requirement. Further, any success in securing bauxite from state government would provide significant margin upside. ? Other events to watch out: Cairn merger would give VEDL access to $3.5bn
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, February 2017 (all figures in INR unless noted)
cash. VEDL has guided to finalise its dividend policy after the merger and interest obligations of parent, Vedanta Plc, could result in high dividends from FY18E. Also, VEDL’s free-float post-merger would increase by 68% or $2.6bn at spot prices and should demand higher weight in benchmark indices
Earnings and target price revision Analyst(s) Sumangal Nevatia, CFA +91 22 6720 4093 sumangal.nevatia@macquarie.com
? No Change.
Price catalyst ? 12-month price target: Rs340.00 based on a Sum of Parts methodology. ? Catalyst: Closure of Cairn Merger, PSC extension and earnings upgrades
15 February 2017
Macquarie Capital Securities India (Pvt) Ltd
Action and recommendation ? VEDL is our top pick in metals sector. Reiterate Outperform.
Please refer to page 8 for important disclosures and analyst certification, or on our website www.macquarie.com/research/disclosures. 22

INDIA India’s goods exports and imports YoY% 30% 20%
India Insight Exports Imports
Goods trade deficit narrows; need to watch out for external factors ? CAD to remain manageable in FY18: We expect India’s CAD to remain
10% 0% -10% -20% -30% Jan-14 Oct-14 Jul-15 Apr-16 Jan-17
Source: CEIC, Macquarie Research, February 2017
contained at 0.9% of GDP in FY17 and 1.2% of GDP in FY18. To arrive at these forecasts we have assumed (a) global crude oil prices to average ~US$49/bbl in FY17 and ~US$57.5/bbl in FY18, (b) improvement in global growth outlook (IMF expects global growth to pick up from 3.1% YoY in 2016 to 3.4% YoY in 2017) and (c) reasonable gold imports on contained inflation, positive real deposit rates available to households and measures taken by the government to curb black money. ? But rising oil prices and protectionist policies in US a key concern
CAD to remain manageable 0 -20
? 0% -1%
-40 -60 -80
-2% -3% -4%
-100 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17E FY18E
-5%
The risk of protectionist policies in US (including proposed H-1B visa reforms) could have adverse implications on exports of IT services, pharma and others from India as well as the remittance flows from overseas Indians. We note that as per the survey conducted by the RBI (link), US and Canada together accounted for ~60% share in total exports of computer services and ITES/BPO services (excluding commercial presence) during FY15 (US$88bn). As per World Bank data, the US is the second-largest source of remittance flows to India (accounting for ~16% share in total remittance inflows to India of US$63bn as of FY16). India’s oil price sensitivity: Our estimates suggest that a US$10/bbl increase in global crude oil prices increases India’s import bill and, hence, CAD by US$11bn (0.5% of GDP). Considering the rupee is already in the overvalued territory on a REER basis and adjusted for productivity, India’s high vulnerability to oil indicates that there could be depreciation bias on the rupee (USD/INR) in the event of rising global crude oil prices.
?
US$ bn
as % of GDP
E = Macquarie estimates Source: CEIC, Macquarie Research, February 2017
Movement in Real Effective Exchange Rate (REER)* 120 115 110 105 100 95 Apr-06 Undervalued (-1 std deviation) Mean Overvalued (+1 std deviation)
What is in the details? ? Monthly trade deficit (TD) narrows to US$9.8bn (5.3% of GDP annualized)
in Jan as imports slowed sequentially more than exports: This compares with the US$10.4bn registered in Dec. On a three-month trailing annualised basis, the TD widened to 2.7% of GDP (vs 2.5% of GDP in Dec). ? Goods export growth (in dollar terms) decelerated in Jan: While the
Apr-09
Apr-12
Apr-15
goods export growth decelerated to 4.3% YoY (vs 5.7% YoY in Dec), it has remained in positive territory for the past five consecutive months. Looking at the breakdown, the pick-up in exports during the month of Dec was largely led by petroleum products (29% YoY) and engineering goods (12% YoY), iron ore, etc, even as a slowdown was visible in gems & jewellery (-4.5% YoY), drugs & pharmaceuticals (-11.6%YoY), etc, amongst others. ? Goods import growth (in dollar terms) accelerated to 10.7% YoY largely
*based on CPI, 36-currency trade weighted basis Source: CEIC, Macquarie Research, February 2017
Analyst(s) Tanvee Gupta Jain +91 22 6720 4355 tanvee.guptajain@macquarie.com
15 February 2017
Macquarie Capital Securities India (Pvt) Ltd
on a favourable base effect: This compares with 0.5% YoY registered in Dec. In terms of commodity composition, (a) oil imports were up 61% YoY in Dec on a rise in global crude oil prices, (b) gold imports remained largely muted at US$2bn in Jan, similar to the previous month, and (c) non-oil, nongold import growth, an indicator of domestic demand, was supported at 4.2% YoY, partly on base effect (vs 4.4% YoY in Dec). Looking at the breakdown, compared with the same period last year, while a rebound was seen in imports of electronic goods and coal, coke & briquettes, etc, a decline was seen in other categories, including iron & steel, fertilisers, etc.
Please refer to page 6 for important disclosures and analyst certification, or on our website www.macquarie.com/research/disclosures. 23

HONG KONG Top picks in Hong Kong Property Mkt Share cap px US$bn HK$/sh TP TSR HK$/sh %
Hong Kong Property Focus on growing rental portfolios Event ? Read-through from Langham Hospitality Inv’s FY16 results (1270 HK, LHI,
16 HK Sun Hung Kai 40.5 108.5 145.84 38% 823 HK Link REIT 15.2 53.8 59.7 16% 17 HK New World 11.6 9.29 13.15 47% Source: Bloomberg, Macquarie Research, February 2017
Upcoming HK investment property completions (including hotels) in next 12-18 months 3.0 2.5
NR) corroborates our view set out in our note ‘Prepare ahead of the slowdown’ that organic growth of the HK property rental market is in for a slowdown in the years ahead. LHI expects weakness to emerge in 2017, despite a stabilization of RevPARs for HK hotels in 2016. While HK retail sales showed continued improvement in retail sales with a slower decline, the downtrend may linger in the coming 12 months, given the potential weaker demand from tourists, one of the key sources of revenue for shopping malls in Hong Kong, in our view. ? We suggest investing in companies with growing rental income portfolios and
2.0 1.5 1.0
0.5 New World Dev
-
K Wah
Henderson Land
Sino Land
Wheelock
CK Property
Sun Hung Kai
good execution in asset enhancement initiatives (AEI). Those with more new commercial completions should deliver additional recurrent income and growth. New World (17 HK) and Sun Hung Kai (16 HK) will have the largest amount of commercial GFA completion, while Link REIT (823 HK) has a strong track record in AEI.
Kerry
Impact ? Henderson Land (12 HK) trimming its hotel business. The company
Source: Company data, Macquarie Research, February 2017
HK visitor arrivals and spending Overnight visitor per capita spending (HK$000s, LHS)
Visitor arrivals (m, RHS) 9 8 7 6 30
recently sold its 598-room Newton Place Hotel for HK$2.3bn (avg room price of HK$3.8m/room) and is negotiating to dispose of its 317-room Newton Inn North Point for HK$1.1bn. Last year the company pulled down the shutters on its Newton Hotel Hong Kong and plans to redevelop it into an office building. We see this as a good move to unlock value and to improve yield on assets. ? Hotel operators’ outlook in 2017 – ‘emerging signs of weakness’. LHI
70 60 50 40
5 4 3
20 10 0
believes there are signs of weakness emerging in 2017, despite a stabilization of RevPARs for HK hotels in 2016. LHI believe this weakness would be due to: 1) strength of the HKD making HK relatively expensive to international travellers; 2) intensifying geopolitical and economic uncertainties weighing on corporate and leisure travel; and 3) more new hotel supply in 2017. ? Hotel business turned stable in 2016. According to Hopewell (54 HK), its
Source: HK tourism board, Macquarie Research, February 2017
Panda Hotel (911 rooms), one of the most popular destinations for Chinese visitors, saw a mild decline of 2% in revenue last year. The company commented, “The downward trend for room revenue has become more stable in 2H… and the average room rate remained flat yoy.” This compared to a yearly drop in average room rate by 18% during July 2015-June 2016. ? Key statistics of Hong Kong tourism business in 2016
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
? Overnight visitor per capita spending dropped 7.4% YoY to HK$6.7k , reaching a 7-year low, compared to a 9.1% decline in 2015 Analyst(s) Raymond Liu, CFA +852 3922 3629 Catherine Li +852 3922 1161 David Ng, CFA +852 3922 1291 raymond.liu@macquarie.com catherine.li@macquarie.com david.ng@macquarie.com
? Total visitor arrivals were down 4.5% YoY to 56.7m in 2016, compared to a 2.5% decline in 2015. ? Mainland Chinese, who accounted for 76% of total arrivals, were down 6.7% YoY in 2016. ? Total number of hotel rooms increased 1.4% YoY to 74.9k rooms. It is expected to grow 6.0% and 6.7% in 2017-18E, according to HKTB.
15 February 2017
Macquarie Capital Limited
Outlook ? Our picks are Sun Hung Kai Properties, New World Dev and Link REIT.
Please refer to page 7 for important disclosures and analyst certification, or on our website www.macquarie.com/research/disclosures. 24

GLOBAL LME cash price US$/tonne 1,875 6,004 2,349 10,715 19,901 2,904 42,500 14,897 % change day on day 0.4 -1.6 -2.9 0.3 -0.4 -0.7 0.6 0.0
Commodities Comment Global industry set for solid 2017 Feature article ? The global industrial recovery accelerated into year-end, our analysis shows,
Aluminium Copper Lead Nickel Tin Zinc Cobalt Molybdenum Other prices
underpinning the recovery in metals markets. The sector should continue to see healthy growth in 2017, though we expect the YoY growth rate is near its peak and see a number of downside risks further out. ? Global output rose a modest 0.12% in December, but that was following a
Gold (US$/oz) Silver (US$/oz) Platinum (US$/oz) Palladium (US$/oz) Oil WTI USD:EUR exchange rate AUD:USD exchange rate LME/COMEX stocks Aluminium LME copper Comex copper Lead Nickel Tin Zinc
1,231 17.91 1,002 779 53.19 1.057 0.763
% change day on day 0.7 -0.4 1.0 1.0 0.4 -0.3 -0.1
jump higher in November and so over 4Q as a whole output grew by 0.96% QoQ, the best such performance since 4Q 2013. Importantly there has been a clear sequential acceleration in growth each quarter in 2016.
Latest news ? After a buoyant couple of trading days, base metals sold off on Tuesday led
Tonnes 2,220,775 243,350 99,751 189,175 381,546 5,880 381,300
Change -5,075 -4,475 670 600 -1,494 0 -2,350
Source: LME, Comex, Nymex, SHFE, Metal Bulletin, Reuters, LBMA, Macquarie Research
by copper, as news of the striking labour union at Escondida agreeing to sit down with the government for mediation in their talks with the mine operator seemed to push some nervous longs into getting out. We do think Escondida going back to work will be the trigger for a near-term price reversal, but this event is not it (the miners are merely agreeing to return to the negotiating table) and rather serves to highlight speculator overreaction to news flow currently: LME COT data had also come out today, revealing a small gain in Money Manager length to a new 2017 high of 72.4k lots, from 69.5k a week prior, and with the Chinese loans data coming in below expectations (see below), the market turned bearish from the UK afternoon onwards. Having seen a brief moment above $6,200/t yesterday, prices slid to just below $6,000/t just before the close before recovering slightly back above the line. Nickel, zinc and lead also fell, taking the cue from copper it seemed, with the latter seeing the biggest decline of 2.9% on an LME cash basis. ? China released the money supply data for January on Tuesday. Banks’ new
Analyst(s) Macquarie Capital (Europe) Limited Matthew Turner +44 20 3037 4340 matt.turner@macquarie.com Colin Hamilton +44 20 3037 4061 colin.hamilton@macquarie.com Jim Lennon, Senior Commodities Consultant +44 20 3037 4271 jim.lennon@macquarie.com Vivienne Lloyd +44 20 3037 4530 vivienne.lloyd@macquarie.com Macquarie Capital Securities (Singapore) Pte. Limited Ian Roper +65 66010698 ian.roper@macquarie.com Macquarie Capital Limited Lynn Zhao +86 21 2412 9035 lynn.zhao@macquarie.com
lending was Rmb2.03Tn last month, lower than the Rmb2.5Tn new lending last January and also lower than the consensus market expectations of Rmb2.5~3Tn. Most of the new lending was issued as medium-long term loans for non-financial enterprises, which reached Rmb1.52Tn in January. Money supply M2 increased by 11.3% YoY last month, flat from the growth rate last December but lower than the 14% YoY growth same time last year. Despite the YoY decline in new bank lending, total social financing (TSF) climbed by Rmb3.74Tn in January, Rmb216.9Bn higher than last January. The increase was driven by higher off-balance loans like banker acceptance bills and trusted loans, while enterprises’ bond financing declined after the sell-off in the bond market. ? UK trade data for full year 2016, released on Friday, showed the UK exported
14 February 2017
401t of gold, down from 697t in 2015, but imported 1,414t, up from 271t, meaning a net inflow of just over 1,000t, the most since 2009. The reason for this is well understood – a surge in ETF and other investor purchases, bringing gold in from Switzerland, the US, Australia and even Asia. It partially reversed in the last two months, as gold flowed out once again, mainly to Switzerland. Separately this week the Bank of England started to publish monthly data on its gold holdings held not just on behalf of the UK government and the Bank’s own reserves, but for foreign central banks and commercial firms in London. As of October these were 305t higher YTD, a smaller increase than one might expect given the import data.
Please refer to page 7 for important disclosures and analyst certification, or on our website www.macquarie.com/research/disclosures. 25
Macquarie Research Important disclosures: Recommendation 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 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 – 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


Volatility index definition* This is calculated from the volatility of historical price movements. 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 Recommendations – 12 months Note: Quant recommendations may differ from Fundamental Analyst recommendations
Financial definitions 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 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).
Recommendation proportions – For quarter ending 31 December 2016 Outperform Neutral Underperform AU/NZ 57.53% 33.90% 8.56% Asia 50.72% 33.97% 15.30% RSA 45.57% 43.04% 11.39% USA 42.28% 50.11% 7.61% CA 60.58% 37.23% 2.19% EUR 52.79% (for global coverage by Macquarie, 8.71% of stocks followed are investment banking clients) 35.62% (for global coverage by Macquarie, 8.05% of stocks followed are investment banking clients) 11.59% (for global coverage by Macquarie, 4.63% of stocks followed are investment banking clients)
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Asia Research Head of Equity Research Peter Redhead (Global – Head) Jake Lynch (Asia – Head) David Gibson (Japan – Head) Conrad Werner (ASEAN – Head) (852) 3922 4836 (852) 3922 3583 (813) 3512 7880 (65) 6601 0182
Industrials Janet Lewis (Asia) Patrick Dai (China) Kunio Sakaida (Japan) William Montgomery (Japan) James Hong (Korea) Benson Pan (Taiwan) Inderjeetsingh Bhatia (India) Justin Chiam (Singapore) (813) 3512 7856 (8621) 2412 9082 (813) 3512 7873 (813) 3512 7864 (822) 3705 8661 (8862) 2734 7527 (9122) 6720 4087 (65) 6601 0560
Telecoms Soyun Shin (Korea) Prem Jearajasingam (ASEAN) Kervin Sisayan (Philippines) (822) 3705 8659 (603) 2059 8989 (632) 857 0893
Transport & Infrastructure Janet Lewis (Asia) Corinne Jian (Taiwan) Azita Nazrene (ASEAN) (852) 3922 5417 (8862) 2734 7522 (603) 2059 8980
Automobiles/Auto Parts Janet Lewis (China, Japan) Takuo Katayama (Japan) James Hong (Korea) Amit Mishra (India) (813) 3512 7856 (1 212) 231 1757 (822) 3705 8661 (9122) 6720 4084
Internet, Media and Software Wendy Huang (Asia, China) David Gibson (Asia, Japan) Hillman Chan (China, Hong Kong) Soyun Shin (Korea) Abhishek Bhandari (India) (852) 3922 3378 (813) 3512 7880 (852) 3922 3716 (822) 3705 8659 (9122) 6720 4088
Utilities & Renewables Patrick Dai (China) Candice Chen (China) Alan Hon (Hong Kong) Inderjeetsingh Bhatia (India) Prem Jearajasingam (Malaysia) Karisa Magpayo (Philippines) (8621) 2412 9082 (8621) 2412 9087 (852) 3922 3589 (9122) 6720 4087 (603) 2059 8989 (632) 857 0899
Financials Scott Russell (Asia) Dexter Hsu (China, Taiwan) Keisuke Moriyama (Japan) Chan Hwang (Korea) Suresh Ganapathy (India) Sameer Bhise (India) Gilbert Lopez (Philippines) Ken Ang (Singapore) Passakorn Linmaneechote (Thailand) (852) 3922 3567 (8862) 2734 7530 (813) 3512 7476 (822) 3705 8643 (9122) 6720 4078 (9122) 6720 4099 (632) 857 0892 (65) 6601 0836 (662) 694 7728
Oil, Gas and Petrochemicals Polina Diyachkina (Asia, Japan) Aditya Suresh (Asia, China, India) Anna Park (Korea) Duke Suttikulpanich (ASEAN) Isaac Chow (Malaysia) (813) 3512 7886 (852) 3922 1265 (822) 3705 8669 (65) 6601 0148 (603) 2059 8982
Commodities Colin Hamilton (Global) Ian Roper Jim Lennon Lynn Zhao Matthew Turner (44 20) 3037 4061 (65) 6601 0698 (44 20) 3037 4271 (8621) 2412 9035 (44 20) 3037 4340
Conglomerates David Ng (China, Hong Kong) Conrad Werner (Singapore) Gilbert Lopez (Philippines) (852) 3922 1291 (65) 6601 0182 (632) 857 0892
Pharmaceuticals and Healthcare Abhishek Singhal (India) Wei Li (China, Hong Kong) (9122) 6720 4086 (852) 3922 5494
Economics Peter Eadon-Clarke (Global) Larry Hu (China, Hong Kong) Tanvee Gupta Jain (India) (813) 3512 7850 (852) 3922 3778 (9122) 6720 4355
Consumer and Gaming Linda Huang (Asia, China, Hong Kong) Zibo Chen (China, Hong Kong) Terence Chang (China, Hong Kong) Sunny Chow (China, Hong Kong) Satsuki Kawasaki (Japan) Mike Allen (Japan) Kwang Cho (Korea) KJ Lee (Korea) Stella Li (Taiwan) Amit Sinha (India) Fransisca Widjaja (Indonesia, Singapore) Karisa Magpayo (Philippines) Chalinee Congmuang (Thailand) (852) 3922 4068 (852) 3922 1130 (852) 3922 3581 (852) 3922 3768 (813) 3512 7870 (813) 3512 7859 (822) 3705 4953 (822) 3705 9935 (8862) 2734 7514 (9122) 6720 4085 (65) 6601 0847 (632) 857 0899 (662) 694 7993
Property Tuck Yin Soong (Asia, Singapore) David Ng (China, Hong Kong) Raymond Liu (China, Hong Kong) Wilson Ho (China) William Montgomery (Japan) Corinne Jian (Taiwan) Abhishek Bhandari (India) Aiman Mohamad (Malaysia) Kervin Sisayan (Philippines) Patti Tomaitrichitr (Thailand) (65) 6601 0838 (852) 3922 1291 (852) 3922 3629 (852) 3922 3248 (813) 3512 7864 (8862) 2734 7522 (9122) 6720 4088 (603) 2059 8986 (632) 857 0893 (662) 694 7727
Quantitative / CPG Gurvinder Brar (Global) Woei Chan (Asia) Danny Deng (Asia) Per Gullberg (Asia) (44 20) 3037 4036 (852) 3922 1421 (852) 3922 4646 (852) 3922 1478
Strategy/Country Viktor Shvets (Asia, Global) Chetan Seth (Asia) David Ng (China, Hong Kong) Peter Eadon-Clarke (Japan) Chan Hwang (Korea) Jeffrey Ohlweiler (Taiwan) Inderjeetsingh Bhatia (India) Jayden Vantarakis (Indonesia) Anand Pathmakanthan (Malaysia) Gilbert Lopez (Philippines) Conrad Werner (Singapore) (852) 3922 3883 (852) 3922 4769 (852) 3922 1291 (813) 3512 7850 (822) 3705 8643 (8862) 2734 7512 (9122) 6720 4087 (6221) 2598 8310 (603) 2059 8833 (632) 857 0892 (65) 6601 0182
Resources / Metals and Mining Polina Diyachkina (Asia, Japan) Coria Chow (China) Anna Park (Korea) Sumangal Nevatia (India) (813) 3512 7886 (852) 3922 1181 (822) 3705 8669 (9122) 6720 4093
Emerging Leaders Jake Lynch (Asia) Aditya Suresh (Asia) Timothy Lam (China, Hong Kong) Mike Allen (Japan) Kwang Cho (Korea) Corinne Jian (Taiwan) Marcus Yang (Taiwan) Conrad Werner (ASEAN) (852) 3922 3583 (852) 3922 1265 (852) 3922 1086 (813) 3512 7859 (822) 3705 4953 (8862) 2734 7522 (8862) 2734 7532 (65) 6601 0182
Technology Damian Thong (Asia, Japan) George Chang (Japan) Daniel Kim (Korea) Allen Chang (Greater China) Jeffrey Ohlweiler (Greater China) Patrick Liao (Greater China) Louis Cheng (Greater China) Kaylin Tsai (Greater China) (813) 3512 7877 (813) 3512 7854 (822) 3705 8641 (852) 3922 1136 (8862) 2734 7512 (8862) 2734 7515 (8862) 2734 7526 (8862) 2734 7523
Find our research at Macquarie: www.macquarieresearch.com/ideas/ 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
Asia Sales Regional Heads of Sales Miki Edelman (Global) Jeff Evans (Boston) Jeffrey Shiu (China, Hong Kong) Sandeep Bhatia (India) Thomas Renz (Geneva) Riaz Hyder (Indonesia) Nick Cant (Japan) John Jay Lee (Korea) Nik Hadi (Malaysia) Eric Roles (New York) Gino C Rojas (Philippines) (1 212) 231 6121 (1 617) 598 2508 (852) 3922 2061 (9122) 6720 4101 (41 22) 818 7712 (6221) 2598 8486 (65) 6601 0210 (822) 3705 9988 (603) 2059 8888 (1 212) 231 2559 (632) 857 0861
Regional Heads of Sales cont’d Paul Colaco (San Francisco) Amelia Mehta (Singapore) Angus Kent (Thailand) Ben Musgrave (UK/Europe) Christina Lee (UK/Europe) (1 415) 762 5003 (65) 6601 0211 (662) 694 7601 (44 20) 3037 4882 (44 20) 3037 4873
Sales Trading cont’d Suhaida Samsudin (Malaysia) Michael Santos (Philippines) Chris Reale (New York) Marc Rosa (New York) Justin Morrison (Singapore) Daniel Clarke (Taiwan) Brendan Rake (Thailand) Mike Keen (UK/Europe) (603) 2059 8888 (632) 857 0813 (1 212) 231 2555 (1 212) 231 2555 (65) 6601 0288 (8862) 2734 7580 (662) 694 7707 (44 20) 3037 4905
Sales Trading Adam Zaki (Asia) Stanley Dunda (Indonesia) (852) 3922 2002 (6221) 515 1555
This publication was disseminated on 15 February 2017 at 18:06 UTC. 28
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