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Macquarie MarQuee Ideas
Monthly update
Performance review and a summary of changes
We have made a number of changes to our MarQuee list since launching in mid-
December and are summarising the changes inside this report. We also include
a performance review of all the stocks on the list from mid-December to date.
Changes indicate two clear themes
There are two themes that override our changes since December: an increase in
commodity price forecasts and a structural change among a number of
underperforming technology stocks.
A major review of our commodity price assumptions by our commodities team in
mid-January, which saw an increase in most of our commodity price forecasts for
2011, drove a number of changes among resources. These included the addition
of the Buy ideas of Sumitomo Metal Mining in Japan and Harum Energy in
Indonesia after major upgrades to our copper and coal price forecasts. And an
increase in aluminium forecasts for 1Q 2011 led us to believe there were upside
risks to Chalco’s share price, so we have removed this from the Sell list.
The other additions to the list were all on the technology side. Elpida Memory is
a play on a recovery in DRAM prices that our technology analysts believe will
begin this quarter as supply is curtailed – a theme that should benefit another of
our existing MarQuee Buy ideas, Samsung Electronics.
We also added Hon Hai precision, which our analyst Daniel Chang now believes
has fallen too far. With the company‟s cost structure set to improve from 2Q,
Daniel believes the shares are due for a re-rating and added this to the Buy list.
Further details on our changes can be found inside.
Performance review
Among some of the strong movers this month, the Sell call on Taiwan semi
company Mediatek by Jimmy Hsu stands out. Against a rising market, the stock
fell 21% after 4Q results and outperformed the MSCI Taiwan index by 22%.
Two Japanese Buy names also made a mark: Marubeni, up almost 15% and
manufacturing group Murata both easily outperformed, while in Taiwan, HTC
returned over 14%. Among the smaller names, KNM Group, OSIM and China
Minzhong Foods all outperformed their respective country indices. Further
details are on page two and a summary table in Figure 1.
On the downside, Reliance Industries fell heavily but in line with the broader
Indian market and Glenmark Pharma underperformed after losing a patent
decision in the US. China Yurun Food also fell heavily after hog prices began
falling although our analyst Lisa Deng believes this is actually positive for the
group. All of these names remain on the Buy List.
And a few changes: Removing OCBC and Aeon Mall
We are also removing two names that no longer have the upside potential to fulfil
our MarQuee criteria (see pg 15). OCBC Bank in Singapore has underperformed
the Singapore market since mid-December but has just 17% potential upside left
to its TP, while Aeon Mall in Japan has just 18% left after a 4% rise.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Macquarie MarQuee Ideas
Monthly update
Performance review and a summary of changes
We have made a number of changes to our MarQuee list since launching in mid-
December and are summarising the changes inside this report. We also include
a performance review of all the stocks on the list from mid-December to date.
Changes indicate two clear themes
There are two themes that override our changes since December: an increase in
commodity price forecasts and a structural change among a number of
underperforming technology stocks.
A major review of our commodity price assumptions by our commodities team in
mid-January, which saw an increase in most of our commodity price forecasts for
2011, drove a number of changes among resources. These included the addition
of the Buy ideas of Sumitomo Metal Mining in Japan and Harum Energy in
Indonesia after major upgrades to our copper and coal price forecasts. And an
increase in aluminium forecasts for 1Q 2011 led us to believe there were upside
risks to Chalco’s share price, so we have removed this from the Sell list.
The other additions to the list were all on the technology side. Elpida Memory is
a play on a recovery in DRAM prices that our technology analysts believe will
begin this quarter as supply is curtailed – a theme that should benefit another of
our existing MarQuee Buy ideas, Samsung Electronics.
We also added Hon Hai precision, which our analyst Daniel Chang now believes
has fallen too far. With the company‟s cost structure set to improve from 2Q,
Daniel believes the shares are due for a re-rating and added this to the Buy list.
Further details on our changes can be found inside.
Performance review
Among some of the strong movers this month, the Sell call on Taiwan semi
company Mediatek by Jimmy Hsu stands out. Against a rising market, the stock
fell 21% after 4Q results and outperformed the MSCI Taiwan index by 22%.
Two Japanese Buy names also made a mark: Marubeni, up almost 15% and
manufacturing group Murata both easily outperformed, while in Taiwan, HTC
returned over 14%. Among the smaller names, KNM Group, OSIM and China
Minzhong Foods all outperformed their respective country indices. Further
details are on page two and a summary table in Figure 1.
On the downside, Reliance Industries fell heavily but in line with the broader
Indian market and Glenmark Pharma underperformed after losing a patent
decision in the US. China Yurun Food also fell heavily after hog prices began
falling although our analyst Lisa Deng believes this is actually positive for the
group. All of these names remain on the Buy List.
And a few changes: Removing OCBC and Aeon Mall
We are also removing two names that no longer have the upside potential to fulfil
our MarQuee criteria (see pg 15). OCBC Bank in Singapore has underperformed
the Singapore market since mid-December but has just 17% potential upside left
to its TP, while Aeon Mall in Japan has just 18% left after a 4% rise.
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