ASIAMETALS&MINING：NEWPRICEFORECASTS;MAJORDOWNGRADESFORPRECIOUSMETALS0109

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1、Deutsche BankMarkets ResearchAsiaChinaResourcesMetals & MiningIndustryAsia Metals &MiningDate8 January 2013RecommendationChangeJames KanNew price forecasts; majordowngrades for precious metalsCommodity price forecast changes; price downgrades for precious metalsDeutsche Banks global commodity team h

2、as revised its price forecasts. Takinginto account the moderated investment demand for precious metals and thepotential strengthening of the US dollar, price forecasts for gold and silver aredowngraded over 2013/2014. We therefore cut our target prices (TP) for Zijin,Zhaojin and Korea Zinc. There ar

3、e also material reductions for nickel andcoking coal price expectations. Our forecasts and target prices for ValeIndo/Antam (nickel stocks) and Fushan/Hidili/MMC (coking coal stocks) areadjusted accordingly. Near-term strength in the iron ore price leads us to raiseTPs for some steel stocks.Gold/sil

4、ver price forecast downgrades affect Zijin/Zhaojin/Korea ZincDeutsche Banks global commodity team has downgraded its gold/silver priceforecasts by 12.1%/16.8% for 2013 and 5%/5% for 2014 in light of potential USdollar strengthening in the long run, as well as moderated investment demandfor gold/silv

5、er. Nevertheless, Deutsche Bank still expects gold/silver priceappreciation in the coming quarters. The most relevant stocks in Asia ex-Japanare Zijin, Zhaojin and Korea Zinc (50% revenue exposure). We cut Zijin/Zhaojin/Korea Zincs 2013E earnings by 14%20%/17% and lower target prices byResearch Anal

6、yst(+852) 2203 Abhay LaijawalaResearch Analyst(+91) 22 7158 Cherie KhoengPT Deutsche Bank Verdhana IndonesiaResearch Analyst(+62) 21 318 Chanwook ParkResearch Analyst(+82) 2 316-Key target price revisions6%/13%/14%. We believe Zijin and Korea Zinc still offer deep value; thus wemaintain Buy ratings,

7、 with 15% and 31% upside potential, respectively.Material reductions for nickel and coking coal 2013/2014 price forecastsThere are material reductions to nickel (5.3%/15%) and coking coal(2.7%/7.5%) price forecasts for 2013/2014, resulting from demand/supplydynamics. For the nickel-related names, Va

8、le Indo and Antam, we cut 2013ENPAT by 41%/1% and TPs by 24%/36%. For coking coal stocksFushan/Hidili/Mongolia Mining (MMC), we lower 2013E earnings byStock (TP UG)MaanshanHidiliAngangChina SteelJiangxi CopperChange Stock (TPDG)111% Antam38% KoreaZinc32% Zhaojin18% Vale Indo14% ZijinChange-36%-14%-1

9、3%-24%-6%2%/37%/92%, based on the new price forecasts and the operational situationswe have witnessed recently. We downgrade Fushan to Hold, as it has hit ourTP, having rallied almost 50% in the past three months. We raise Hidilis TP by38% in consideration of its capital structure (high D/E ratio) i

10、n our DCFvaluation. We maintain Sell ratings for Hidili and MMC.Expecting near-term iron ore price strength; risksThe global commodity team also expects near-term strength in the iron oreprice and has raised the 1Q13E iron ore price 16.7%. Due to potential short-term restocking and supply tightness,

11、 the iron ore price could potentiallyovershoot to USD170/t. The price strength might lead to some bullishness forthe steel sector and thus we lift our TPs for Maanshan (111%), Angang (32%),and China Steel (18%) based on a target PBx at 1std below their historicalRelated recent researchCommodity Quar

12、terlyMichael Lewis2013 outlook - Chicken ribs?James KanDate08 Jan 201307 Dec 2012average(previously,weadoptedtroughPBx).Nevertheless,Maanshan/Angang/China Steel are trading at 0.7x/0.8x/1.4x 2013E BVPS. Wethus maintain ratings at Sell/Hold/Sell, respectively. The other minor forecastThis report chan

13、ges one rating, plusseveral estimates and price targets forchanges are listed in Figure 1, and a summary of commodity price forecastcompaniesundercoverage,aschanges can be found in Figures 2-7. Major risk: volatility in commodity prices.summarized in Figure 1_Deutsche Bank AG/Hong KongThis research

14、has been prepared in association with PT Deutsche Bank Verdhana Indonesia. The opinions contained inthis report are those of PT Deutsche Bank Verdhana Indonesia.Deutsche Bank does and seeks to do business with companies covered in its research reports. Thus, investors shouldbe aware that the firm ma

15、y have a conflict of interest that could affect the objectivity of this report. Investors shouldconsider this report as only a single factor in making their investment decision. DISCLOSURES AND ANALYSTCERTIFICATIONS ARE LOCATED IN APPENDIX 1. MICA(P) 072/04/2012.8 January 2013Metals & MiningAsia Met

16、als & MiningTable of contentsSummary of earnings/target price changes .3New Deutsche Bank commodity price forecasts .4Implications for M&M stocks .7Fushan (Hold) .12Hidili (Sell).13Mongolia Mining (Sell) .14Angang (Hold) .15Maanshan (Sell).16China Steel (Sell) .17Zhaojin Mining (Hold) .18Zijin Minin

17、g (Buy) .19Jiangxi Copper (Hold) .20Chalco (Sell).21Minmetals Resources (Buy).22CST Mining (Buy).23G-Resources (Buy) .24Hindalco (Hold).25Hindustan Zinc (Hold).26Sterlite (Buy) and Sesa Goa (Hold) .27Vale Indonesia (Buy).29Antam (Buy).30Korea Zinc (Buy) .31Page 2Deutsche Bank AG/Hong KongDeutscheBan

18、kAG/HongKongPage3Summary of earnings/target price changesFigure 1: Summary of earnings estimate and target price changes for Asia M&M universeCompanyTickerRatingMkt CapCurrency2013 Net profit2013 NP2014 Net profit2013 PE2014 PE(UG/ DG)(USD m)OldNew% Chg% of Cons.OldNew% ChgHK/China Coal/Steel/Iron o

19、reFushanHidiliMongolian MiningAngangMaanshanChina Steel0639.HK1393.HK0975.HK0347.HK0323.HK2002.TWHold (D)SellSellHoldSellSell2,2916952,1566,2722,76213,737HKD mRMB mUSD mRMB mRMB mRMB m1,533340100667-61512,0681,5072148856-21912,025-2%-37%-92%28%NM0%95%76%6%426%127%100%1,5674701791,95717917,0421,56333

20、11062,13160913,434-0%-30%-41%9%239%-21%11.619.422.144.6NM34.311.212.41.617.927.630.7China thermal coal unchanged for earnings forecasts and TPsHK/China non-ferrousChalcoCST Mining*G-Resources*Jiangxi CopperMinmetals ResourcesZhaojin MiningZijin Mining2600.HK0985.HK1051.HK0358.HK1208.HK1818.HK2899.HK

21、SellBuyBuyHoldBuyHoldBuy6,6823156999,6711,7354,5058,667RMB mUSD mUSD mRMB mUSD mRMB mRMB m-6,526-32495,2603112,7665,987-6,526-32145,2732812,2075,1300%0%-14%0%-9%-20%-14%265%-40%112%89%71%97%84%-8,271392164,5004502,6834,868-8,271392034,5003272,4154,4760%0%-6%0%-27%-10%-8%NMNM37.014.358.115.813.2NM71.

22、039.216.750.014.515.1India non-ferrous and iron ore*Hindalco IndustriesSterlite IndustriesHindustan ZincSesa GoaHALC.BOSTRL.BOHZNC.BOSESA.BOHoldBuyHoldHold6,2049,39111,4354,245INR mINR mINR mINR m31,44258,88868,76928,40331,44258,79667,81729,7160%0%-1%5%99%92%101%96%33,25658,40869,82324,99833,25658,2

23、3068,31625,8270%0%-2%3%8.16.98.75.97.66.98.66.8Indonesia coal unchanged for earnings forecasts and TPsIndonesia metalsVale IndoAntamINCO.JKANTM.JKBuyBuy2,9821,334USD mRp bn14270784702-41%-1%60%64%2031,164133725-35%-38%35.718.222.517.6Korea metalsKorea Zinc010130.KSBuy6,781KRW bn1,018842-17%106.4%1,1

24、13923-17%8.77.8589,000Source: Deutsche Bank estimates, Bloomberg Finance LP* Numbers for CST, G-Resources and India companies are FY13 and FY14; CSTs and India companies fiscal year ends on Mar 31 and G-Resources fiscal year ends on Jun 30.-8 January 2013Metals & MiningAsia Metals & MiningNew Deutsc

25、he Bankcommodity price forecastsSummary of all commodity price assumption changesFigure 2 summarizes up-to-date commodity price forecasts by the Deutsche Bankglobal commodity team. For more details about the rationales, demand/supply models,and near-term momentum for all commodities, please refer to

26、 Commodity Quarterly,published on 8 January 2013.Figure 2: Deutsche Bank energy commodity price forecastsUSDWTI (bbl)% Change from previous forecastBrent (bbl)% Change from previous forecastRBOB gasoline (g)% Change from previous forecastHeating oil (g)% Change from previous forecastIPE gasoil (t)%

27、Change from previous forecastSingapore Jet (bbl)% Change from previous forecastUS Natural Gas (mmBtu)% Change from previous forecastUK Natural Gas (p/th)% Change from previous forecastUranium (U3O8) (lb)% Change from previous forecastThermal Coal - Japanese Guide Price (JFY)% Change from previous fo

28、recastAPI4 (Richards Bay) FOB (t)% Chg from previous forecastQ1 1390.00-10.0%108.00-1.8%2.80-1.8%2.95-1.7%930.00-1.1%125.000.0%3.800.0%65.480.0%65.000.0%115.200.0%91.003.4%Q2 1395.00-6.9%112.000.0%2.900.0%3.050.0%955.000.0%125.000.0%3.600.0%58.780.0%65.000.0%97.000.0%91.000.0%Q3 13100.00-7.4%115.000

29、.0%2.950.0%3.100.0%975.000.0%130.000.0%3.700.0%57.660.0%65.000.0%97.000.0%93.000.0%Q4 13100.00-8.3%115.00-1.7%2.95-1.7%3.10-1.6%975.00-1.0%130.000.0%3.900.0%68.480.0%65.000.0%97.000.0%96.000.0%2013E96.25-8.1%112.50-0.9%2.90-0.9%3.05-0.8%958.75-0.5%127.500.0%3.750.0%62.600.0%65.000.0%101.550.0%92.750

30、.8%2014E103.253.3%113.253.0%2.932.6%3.082.5%963.751.4%127.502.0%4.250.0%66.800.0%70.000.0%104.000.0%100.000.0%2015E100.00110.002.853.00950.00125.004.5070.0067.50101.1998.19Thermal Coal - QHD 5500kcal (FOB VAT-included)% Change from previous forecast640.000.0%640.000.0%640.000.0%Source: Deutsche Bank

31、 estimates, Figures are previous averages *Assumptions adopted by HK/China teamFigure 3: Deutsche Bank precious metals price forecastsUSD/ozGold% Chg from previous forecastSilver% Chg from previous forecastPlatinum% Chg from previous forecastPalladium% Chg from previous forecastRhodium% Chg from pre

32、vious forecastQ1 131725-11.5%33-18.3%16000.0%6758.0%1100-4.3%Q2 131825-13.1%36-18.2%16250.0%7000.0%12500.0%Q3 131875-18.5%38-21.7%17003.0%7250.0%1250-3.8%Q4 132000-4.8%40-8.6%17502.9%7500.0%1400-6.7%2013E1856-12.1%37-16.8%16691.5%7131.8%1250-3.8%2014E1900-5.0%38-5.0%18000.0%8000.0%16000.0%2015E18003

33、618509001800Source: Deutsche Bank estimates, Figures are previous averagesPage 4Deutsche Bank AG/Hong Kong-8 January 2013Metals & MiningAsia Metals & MiningFigure 4: Deutsche Bank industrial metals price forecastsCash priceQ1 13Q2 13Q3 13Q4 132013E2014E2015EAluminumUSc/lbUSD/t% Chg from previous for

34、ecast95.321000.0%102.122502.3%97.52150-2.3%90.720000.0%96.421250.0%99.822000.0%99.82200CopperUSc/lbUSD/t% Chg from previous forecast372.182002.5%385.785003.7%363.080000.0%353.978000.0%368.681251.6%340.375000.0%328.97250LeadUSc/lbUSD/t% Chg from previous forecast99.822004.8%106.623506.8%99.822000.0%9

35、0.720000.0%99.321882.9%104.423000.0%104.42300NickelUSc/lbUSD/t% Chg from previous forecast794.017500-2.8%816.718000-10.0%816.718000-5.3%794.017500-2.8%805.417750-5.3%771.317000-15.0%726.016000TinUSc/lbUSD/t% Chg from previous forecast1088.92400020.0%1134.3250008.7%1020.9225007.1%907.4200000.0%1037.9

36、228758.9%1020.9225000.0%1020.922500ZincUSc/lbUSD/t% Chg from previous forecast95.321000.0%104.423004.5%99.82200-4.3%95.321000.0%98.721750.0%99.82200-12.0%99.82200Source: Deutsche Bank estimates, Figures are previous averagesFigure 5: Deutsche Bank minor metals price forecastsUSDMolybdenum (lb)% Chg

37、from previous forecastQ1 1315.000.0%Q2 1314.000.0%Q3 1313.000.0%Q4 1314.000.0%2013E14.000.0%2014E16.000.0%2015E15.500.0%Source: Deutsche Bank estimates, Figures are previous averagesFigure 6: Deutsche Bank bulk commodities price forecastsUSDIron Ore Spot Landed Fines Price in ChinaCIF (t)% Chg from

38、previous forecastHard Coking Coal JFY (t)% Chg from previous forecastLow-volatile PCI JFY (t)% Chg from previous forecastQ1 13140.0016.7%165.003.1%150.000.0%Q2 13130.004.0%175.00-2.8%150.000.0%Q3 13120.009.1%190.00-5.0%150.000.0%Q4 13110.000.0%180.00-5.3%150.000.0%2013E125.007.5%177.50-2.7%150.000.0

39、%2014E115.00-4.2%185.00-7.5%155.000.0%2015E110.00180.00146.25Source: Deutsche Bank estimates, Figures are previous averagesDeutsche Bank AG/Hong Kong*Assumptions adopted by HK/China team.Page 5-8 January 2013Metals & MiningAsia Metals & MiningFigure 7: Deutsche Bank agricultural commodities price fo

40、recastsUSD/bushelCorn% Chg from previous forecastWheat% Chg from previous forecastSoybeans% Chg from previous forecastSugar (USc/lb)% Chg from previous forecastQ1 137.69-2.7%8.80-1.7%15.40-10.5%19.75-8.1%Q2 138.046.5%8.900.0%16.101.3%18.20-13.3%Q3 138.118.1%9.255.7%16.409.3%18.50-12.9%Q4 136.601.5%7

41、.706.2%13.40-4.3%20.00-4.8%2013E7.613.4%8.662.4%15.33-1.3%19.11-9.8%2014E6.4914.8%7.1113.3%13.6313.5%21.38-5.5%2015E5.806.4312.6022.38Source: Deutsche Bank estimates, Figures are previous averagesPage 6Deutsche Bank AG/Hong Kong8 January 2013Metals & MiningAsia Metals & MiningImplications for M&M st

42、ocksHK/China coal/steel/iron ore top pick Fushan (James Kan)Figure 8 and Figure 9 show a summary of changes for stocks in our HK/China coal andsteel universe. We continue to prefer Fushan, bearing in mind the anticipated cokingcoal price uptrend in 2013 (Figure 6) as well as the recent coking coal p

43、rice recovery indomestic China. Also, we like Fushans healthy operating cash flow and strong balancesheet. We downgrade Fushan from Buy to Hold, as the stock has hit our TP, havingrallied almost 50% in the past three months. Even with the downgrade, it remains ourtop pick, as we see no better choice

44、 in the coal/steel/iron ore sector. If liquiditycontinues to push up the stock market, Fushan could continue to perform. And if themarket starts to turn sour, we also believe Fushans strong balance sheet and theresilient coking coal price should allow the stock to correct much less than other stocks

45、in the coal/steel/iron ore universe.We trim Fushans earnings by 1.7% for 2013E and 0.3% for 2014E, given that the globalcommodity team has revised down the hard coking coal JFY price to USD178/t in2013E (previous: USD183/t) and USD185/t in 2014E (previous: USD200/t).For Hidili, keeping in mind the r

46、evised coking coal price, together with its ongoingproduction halts in Sichuan and Yunnan, we pare earnings by 37% and 30% in 2013Eand 2014E respectively. Hidilis production halt in Sichuan is due to a local mineaccident; the production halt in Yunnan was caused initially by an unsatisfactory localp

47、rice in the past few months, and subsequently by a local mine accident on 5December 2012.For Mongolia Mining, based on the companys recent operational update and therevised coking coal price assumptions, we cut earnings by 92% and 41% in 2013E and2014E, respectively.Figure 8: Forecast changes for Ch

48、inese and Mongolian coking coal producersFushan(639.HK)Hidili(1393.HK)Mongolian Mining(975.HK)Previous 2013E NPNew 2013E NP% changePrevious 2014E NPNew 2014E NP% changePrevious target priceNew target price% changeRecommendationRMB mRMB m%RMB mRMB m%HKD/shareHKD/share%1,5331,507-2%1,5671,5630%3.33.30

49、%Hold340214-37%470331-30%1.31.838%Sell1008-92%179106-41%2.872.74-5%SellSource: Deutsche Bank estimatesWe raise Angang and Maanshans 2013E earnings from RMB667m to RMB856m andRMB-615m to RMB-219m, respectively, on the back of steel spreads improvements inChina.Deutsche Bank AG/Hong KongPage78 January

50、 2013Metals & MiningAsia Metals & MiningFigure 9: Forecast changes for Chinese steel and iron ore producersAngang (347.HK)RMB mMaanshan (323.HK)RMB mChina Steel (2002.TW)*TWD mPrevious 2013E NPNew 2013E NP% changePrevious target priceNew target price% changeRecommendation66785628%HKD/share4.505.9632

51、%Hold(615)(219)NMHKD/share1.072.26111%Sell12,06812,025-0.4%TWD/share19.022.418%SellSource: Deutsche Bank estimatesHK/China non-ferrous metals top pick Zijin (Laura Zhai)Figure 10 shows a summary of changes for stocks in our HK/China non-ferrous metalscoverage.We have revised our EPS forecasts for Zh

52、aojin to RMB0.66 (down 2.9%) and RMB0.76(down 20%) for FY12 and FY13, respectively, based on the revised gold price outlook.We feel that, although Zhaojin exhibits production growth and decent cost control, itscurrent share price already reflects the above factors. During our latest visit to thecomp

53、any, management confirmed its intention to maintain its mined gold productiongrowth target of 10-15% and keep cost inflation under 10%, which we have factoredinto our earnings outlook. Our earnings forecasts also incorporate our expectation ofdepreciating gold and silver prices though gold and silve

54、r prices could surprise on theupside. We maintain our Hold rating for Zhaojin.Our FY13E EPS for Zijin falls by 14%, driven mainly by the 12.1% and 16.8% downwardrevisions to the gold and silver prices.For Jiangxi Copper, our FY13E EPS remains unchanged, at CNY1.52 per share, as thelimited positive i

55、mpact of our copper price assumption (up 1.6%) is largely offset bylower gold and silver prices.Our FY13E EPS for Chalco remains unchanged, with no revision in the aluminum price.For MMR, adjustments in commodity price forecasts have decreased our FY13E EPS by8.8% and our FY13E NPV by 4.6%. The decr

56、ease in FY13E EPS is due mainly todownward revisions to the gold (-12.1%) and silver (-16.8%) prices, partially offset bythe limited changes to the zinc and copper prices.Page 8Deutsche Bank AG/Hong Kong8 January 2013Metals & MiningAsia Metals & MiningFigure 10: Forecast changes for HK/China non-fer

57、rous metals companiesChalco(2600.HK)Rmb mCST Mining(0985.HK)USD mG-Resources(1051.HK)USD mJiangxi Copper(0358.HK)Rmb mMMR(1208.HK)USD mZhaojin(1818.HK)Rmb mZijin Mining(2899.HK)Rmb mPrevious 2013E revenue forecast*New 2013E revenue forecast*% changePrevious 2013E EBITDA forecast*New 2013E EBITDA for

58、ecast*% changePrevious 2013E net profit forecast*New 2013E net profit forecast*% changePrevious 2014E revenue forecast*New 2014E revenue forecast*% changePrevious 2014E EBITDA forecast*New 2014E EBITDA forecast*% changePrevious 2014E net profit forecast*New 2014E net profit forecast*% changePrevious

59、 NPV forecastNew NPV forecast% change145,730145,7300.00%1,5971,5970.00%-6,526-6,5260.00%145,475145,4750.00%-307-3070.00%-8,271-8,2710.00%NANANA1641640.00%44440.00%-3-30.00%1801800.00%69690.00%39390.00%705.4705.40.00%503464-7.90%409362-11.50%249214-14.10%461446-3.30%363346-4.80%216203-6.10%940854-9.1

60、0%121,003122,0580.90%7,7547,7690.20%5,2605,2730.20%105,716105,7160.00%6,7446,7440.00%4,5004,5000.00%NANANA2,4892,430-2.40%908858-5.50%311281-9.40%2,6862,655-1.20%1,190993-16.50%450327-27.30%2,6042,484-4.60%8,9347,951-11.00%4,8674,081-16.10%2,7662,207-20.20%9,7709,322-4.60%4,8004,441-7.50%2,6832,415-

61、10.00%22,00920,277-7.70%50,09746,466-7.20%11,90010,541-11.40%5,9875,130-14.30%46,34644,482-4.00%10,3369,741-5.80%4,8684,476-8.10%79,35574,579-6.00%Previous target priceNew target price% changeRecommendationHKDHKD1.791.790.00%Sell0.20.20.00%Buy0.480.44-8.30%Buy16.631914.30%Hold43.82-4.50%Buy14.2912.4

62、5-12.90%Hold3.763.54-5.90%BuySource: Deutsche Bank estimates* Numbers for CST and G-Resources are FY13 and FY14; CSTs fiscal year ends on Mar 31 and G-Resources fiscal year ends on Jun 30We have not changed our earnings forecasts for CST on the back of the revisedcommodity prices, as we have valued

63、CSTs Lady Annie mine using a flat copper priceof USD7,375/t (spot copper price on 27 June 2012 when we changed our earningsforecasts for CST after its results release). We used the spot copper price to beconservative because Lady Annies mine life is short, ending in FY15 (March year-end),and Deutsch

64、e Banks commodity price forecasts for the next few years are above thespot copper price.For G-Resources, adjustments in commodity price forecasts result in a decrease in boththe FY14E EPS of 14.3% and the NPV of 9.1%.Deutsche Bank AG/Hong KongPage98 January 2013Metals & MiningAsia Metals & MiningInd

65、ia non-ferrous/iron ore (Abhay Laijawala and Anuj Singla)The earnings impact of commodity price forecast revisions for Indian aluminum playersis negligible, as our global commodities team has maintained its aluminum priceforecasts. We have made minor adjustments to our earnings estimates and targetp

66、rices for Indian zinc and iron ore players, in line with the revised zinc (-12% for CY14),lead (+2.9% for CY13) and iron ore (+7.5%/-4.2% for CY13/14 respectively) priceforecasts. Consequently, we maintain our earnings forecasts for Hindalco, adjust ourFY13/14 earnings estimates for Hindustan Zinc by +1%/-1%, for Sterlite by 2%/0% andfor Sesa Goa by +1%/+5%, respectively.We maintain our target price for Hindalco at INR120/share with a Hold rating; wemaintain our target price of INR145/share and