Basic Instinct - Picking winners – Results guide ::Macquarie Research,

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Basic Instinct
Picking winners – Results guide
Event
􀂃 We have reviewed the HK/China stock list pre results to work out which
stocks are likely to beat, miss or come inline with market expectations.
Impact
􀂃 Coal – Focus going forward will be on the cost side. We expect thermal prices
to remain strong while coking coal prices will be flat to down.
􀂃 Steel – We recently downgraded all stocks’ earnings. Our numbers are in line
but the market is 30-40% ahead of us. Downside risk to come.
􀂃 Base metals – We recently downgraded earnings. Results are expected to be
better than those at steel companies. Gold producers should see the largest
upgrades.
􀂃 Cement companies – We have recently upgraded but the market has
lagged. We expect beats for most stocks but the focus will be on the full-year.
􀂃 Paper and Ferts – Earnings will generally be weaker with more to come.


Key stock picks in HK/China during reporting season
􀂃 We stay positive on Coal and Cement – key picks for us remain Shenhua,
Anhui Conch and CNBM. In the metals space’ we think Jiangxi Copper,
Minmetals and Zijin are attractive.