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Energy 120111

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  • 1. Global StrategyEquity Research Asia Sector Strategy 11,January 11, 2012 China Oil & Gas: Gas Reform TrialsS&P 2012 GDP ESTIMATES:China: 7.7%-8.2% Gas pricing trials in Guangxi and Guangdong Amid the positive news of Guangdong. an increase in the windfall tax threshold last week, a smaller, yet potentiallyHong Kong: 2.5%-3.0% as significant, announcement was also made on the imposition of a new gasIndia: 6.8%-7.3% pricing mechanism on a trial basis in Guangdong province and the GuangxiIndonesia: 6.0%-6.5% autonomous region (referred to herein as the “two provinces”).Korea: 2.8%-3.3%Malaysia: 4.4%-4.9% Shifting to a netback formula (from cost - plus) Effective Dec. 26, 2011, cost-plus).Singapore: 2.0%-2.5% benchmark gate gas prices were set at CNY2.74/m3 and CNY2.57/m3 inTaiwan: 2.3%-2.8% Guangdong and Guangxi, respectively. City gas gate prices in the twoThailand: 3.5%-4.0% provinces will be based on the benchmark plus respective logistics costs.U.S.: 1.8% This replaces the previous mechanism from a cost-plus basis (wellhead +Eurozone: 0.4% logistics) to a netback formula with reference to a basket of alternative fuels (60% imported fuel oil + 40% imported LPG). The benchmark gate prices are2012 INDEX TARGETS: to be adjusted initially on an annual basis; if successful the mechanism mayS&P 500: 1,400 be rolled out nationwide at a later date.S&P Euro 350: 1,050S&P Asia 50: 3,500 Partially removes a key stumbling block . As noted in our December 2011 block. piece, China O&G: Cloudy 2012, a key impediment to gas price reform is the multitude of gas sources with substantially different cost structures (domestic conventional, domestic unconventional, pipeline import or LNG), and hence the lack of a proper pricing benchmark. Switching to a netback formula allows the NDRC to set key benchmarks on a provincial basis, regardless of gas source. This still leaves the NDRC the headache of setting provincial benchmark prices, but the addition of a pricing basket automates (theoretically) much of this process.EnergyEnergy Netback results = still loss - making (albeit lower) for CNPC ’s WEP2 . In our loss- CNPC’sOverweight December 2010 sector note, Reform on the Mind , we calculated CNPC’s (PetroChina’s parent) average imported gas cost for the second West-EastOil & Gas Pipeline (WEP2) to be about CNY2.02/m3. Hence, netting back from the two provinces’ city gas gate prices (assuming a CNY1/m3 pipeline cost), CNPCOverweight would still be losing money from its Turkmenistan gas imports, albeit at a lower level, given previous average city gas gate price of CNY2.27/m3. This is also lower than CNOOC’s (parent of CNOOC Ltd) Fujian terminal import costs from Indonesia’s Tangguh LNG, but reports from Beijing-based industry consultants 3E Ltd indicate the new benchmark prices are still substantially Halim,Ahmad Halim, CFA lower than CNOOC gas imports from Qatar. Pertamina is also reportedlyEquity Analyst seeking to hike its LNG sales price to CNOOC by up to 109% to USD7/mBtu. Stock Recommendations While the changes should benefit PetroChina, Recommendations. given its dominance in the natural gas distribution business, we believe much of this is in the long term, as wholesale gas pricing reform (although required to secure China’s energy needs in future) will take some time to play out. For now, our preference lies with Sinopec Corp (00386, HKD9.02) and CNOOC Ltd (00883, HKD15.18), both at 4-STARS (Buy). Valuations for both are attractive, while Sinopec also offers reform leverage and significant injection opportunities (e.g. Addax, Daylight). PetroChina PetroChina’s (00857, HKD10.74) unexciting valuations lead us to a 3-STARS (Hold) call. This report is for information purposes and should not be considered a solicitation to buy or sell any security.Standard & Poor’s Neither Standard & Poor’s nor any other party guarantees its accuracy or makes warranties regarding resultsEquity Research Services from its usage. Redistribution is prohibited without written permission. Copyright © 2012. All required17th Floor, Prudential Tower d i s c l o s ur e s a nd an a l y st c er t if i c a t io n ap p e ar s o n t he la s t 3 p a g e s of t h i s r epo r t . A dd i t io n a l i nf or m a t io n i s30 Cecil Street, Singapore a v a i l a b le on r eq u e st .
  • 2. January 11, 2012 Global Strat egy Select Integrated Oil & Gas and E&P Performance and Key Capital IQ Consensus Ratios as at January 10, 2012 2012 2 Price Performance PER (x) PAT Growth Market Trading Cap (USD Company Name CIQ Ticker Ccy Share Price mln) 1 Mth 3 Mths 6 Mths FY2011 FY2012 FY2011 FY2012 Integrated O&G Exxon Mobil Corporation NYSE:XOM USD 85.72 410,874 5.4% 12.4% 4.7% 10.0x 10.2x 36.5% -5.4% PetroChina Co. Ltd. SEHK:857 HKD 10.80 288,587 14.0% 19.7% -6.9% 11.2x 9.9x 5.6% 13.8% Royal Dutch Shell plc LSE:RDSA GBP 24.02 236,283 4.7% 13.3% 7.0% 8.0x 7.8x 32.8% 5.2% Chevron Corporation NYSE:CVX USD 109.06 217,191 4.6% 11.7% 4.5% 7.9x 8.3x 43.9% -5.8% BP plc LSE:BP. GBP 4.80 140,867 6.1% 18.2% 4.5% 6.5x 6.4x NM 1.9% China Petroleum & Chemical Corp. SEHK:386 HKD 8.96 105,718 12.1% 26.4% 14.7% 8.3x 7.7x 11.2% 8.2% ConocoPhillips NYSE:COP USD 73.28 97,297 1.8% 9.3% -1.9% 8.5x 8.6x 6.3% -7.7% PTT Public Co. Ltd. SET:PTT THB 324.00 29,254 1.3% 11.0% -2.1% 9.2x 8.3x 22.3% 9.8% Average 6.26% 15.25% 3.05% 8.7x 8.4x 22.6% 2.5% Exploration & Production (E&P) CNOOC Ltd. SEHK:883 HKD 15.30 87,271 3.5% 11.5% -16.0% 7.9x 8.1x 33.2% -2.3% Statoil ASA OB:STL NOK 155.00 82,413 1.0% 16.9% 15.1% 9.7x 8.7x 36.8% 8.1% Suncor Energy Inc. TSX:SU CAD 32.82 50,785 9.9% 13.8% -14.3% 9.6x 9.8x 50.7% 2.1% Anadarko Petroleum Corporation NYSE:APC USD 80.88 40,276 0.8% 21.5% 5.2% 26.1x 23.9x 104.8% 4.3% Apache Corp. NYSE:APA USD 98.09 37,672 0.6% 12.8% -19.1% 8.4x 7.9x 52.5% 6.4% Woodside Petroleum Ltd. ASX:WPL AUD 32.18 26,142 0.9% -9.6% -19.8% 14.9x 13.7x 9.1% 12.5% Hess Corporation NYSE:HES USD 58.56 19,608 0.2% 5.3% -18.7% 9.4x 8.4x -0.1% 10.6% PTT Exploration and Production Public Co. Ltd. SET:PTTEP THB 181.00 18,995 8.4% 22.3% 2.0% 13.6x 11.1x 5.4% 22.8% Average 3.17% 11.80% -8.22% 12.5x 11.5x 36.6% 8.1% EV/EBITDA PBV ROE Gross Margin Div Yield Company Company Name FY2011 FY2012 FY2011 FY2012 FY2011 FY2012 FY2011 FY2012 FY2011 FY2012 Integrated O&G Exxon Mobil Corporation NYSE:XOM 4.7x 4.8x 2.5x 2.3x 25.5% 22.0% 46.40% 47.50% 2.16% 2.27% PetroChina Co. Ltd. SEHK:857 6.3x 5.6x 1.6x 1.4x 14.2% 14.9% 36.42% 36.70% 3.90% 4.39% Royal Dutch Shell plc LSE:RDSA 4.1x 4.0x 1.4x 1.2x 17.6% 16.0% 22.20% 21.90% 4.59% 4.85% Chevron Corporation NYSE:CVX 3.3x 3.5x 1.8x 1.6x 23.8% 19.5% 45.20% 46.00% 2.82% 3.02% BP plc LSE:BP. 3.7x 3.7x 1.3x 1.1x 20.5% 18.2% 18.90% 19.80% 3.75% 4.13% China Petroleum & Chemical Corp. SEHK:386 5.2x 4.7x 1.3x 1.2x 16.8% 16.0% 16.75% 17.14% 3.19% 3.50% ConocoPhillips NYSE:COP 3.8x 3.9x 1.5x 1.4x 17.6% 16.0% 28.30% 29.40% 3.55% 3.82% PTT Public Co. Ltd. SET:PTT 6.7x 5.9x 1.6x 1.4x 19.4% 18.6% 9.06% 9.59% 3.85% 4.12% Average 4.7x 4.5x 1.6x 1.5x 19.4% 17.6% 27.90% 28.50% 3.48% 3.76% Exploration & Production (E&P) CNOOC Ltd. SEHK:883 4.2x 4.2x 2.1x 1.8x 28.8% 23.2% 59.33% 53.10% 4.27% 4.12% Statoil ASA OB:STL 2.2x 2.1x 1.9x 1.6x 24.6% 20.0% 47.05% 48.85% 4.20% 4.46% Suncor Energy Inc. TSX:SU 5.2x 5.2x 1.3x 1.2x 14.6% 12.7% 60.80% 62.40% 1.33% 1.41% Anadarko Petroleum Corporation NYSE:APC 6.9x 5.8x 2.1x 1.9x 5.3% 8.2% 70.70% 71.30% 0.45% 0.45% Apache Corp. NYSE:APA 3.7x 3.4x 1.3x 1.2x 16.9% 15.7% 78.10% 79.30% 0.65% 0.64% Woodside Petroleum Ltd. ASX:WPL 9.7x 7.5x 2.0x 1.8x 13.9% 13.6% 69.90% 68.60% 3.51% 3.67% Hess Corporation NYSE:HES 3.5x 3.2x 1.0x 0.9x 12.4% 11.5% 25.10% 25.30% 0.72% 0.71% PTT Exploration and Production Public Co. Ltd. SET:PTTEP 5.9x 4.9x 3.0x 2.5x 23.3% 24.3% 52.74% 50.76% 2.86% 3.51% Average 5.1x 4.5x 1.8x 1.6x 17.5% 16.1% 57.97% 57.45% 2.25% 2.37% Source: S&P Capital IQ Standard & Poor’s Equity Re search
  • 3. January 11, 2012 Global Strat egy S&P Capital IQ Research S&P Capital IQ U.S. includes Standard & Poor’s Research–Glossary Investment Advisory Services LLC; Standard & Poor’s Equity Research Services Europe includes Standard & Poor’s LLC- London; Standard & Poor’s Equity 3 Research Services Asia includes Standard & Poor’s LLC’s offices in Singapore,S&P STARS - Since January 1, 1987, S&P Capital IQ Equity Research has ranked a Standard & Poor’s Investment Advisory Services (HK) Limited in Hong Kong,universe of U.S. common stocks, ADRs (American Depositary Receipts), and ADSs Standard & Poor’s Malaysia Sdn Bhd, and Standard & Poor’s Information Services(American Depositary Shares) based on a given equity’s potential for future (Australia) Pty Ltd.performance. Similarly, S&P Capital IQ Equity Research has used STARS® Abbreviations Used in S&P Capital IQ Equity Research Reportsmethodology to rank Asian and European equities since June 30, 2002. Under CAGR- Compound Annual Growth Rateproprietary STARS (STock Appreciation Ranking System), S&P equity analysts rank CAPEX- Capital Expendituresequities according to their individual forecast of an equity’s future total return CY- Calendar Yearpotential versus the expected total return of a relevant benchmark (e.g., a regional DCF- Discounted Cash Flowindex (S&P Asia 50 Index, S&P Europe 350® Index or S&P 500® Index)), based on a EBIT- Earnings Before Interest and Taxes12-month time horizon. STARS was designed to meet the needs of investors looking EBITDA- Earnings Before Interest, Taxes, Depreciation and Amortizationto put their investment decisions in perspective. Data used to assist in determining EPS- Earnings Per Sharethe STARS ranking may be the result of the analyst’s own models as well as internal EV- Enterprise Valueproprietary models resulting from dynamic data inputs. FCF- Free Cash FlowS&P Quality Rankings (also known as S&P Earnings & Dividend Rankings Rankings)- FFO- Funds From OperationsGrowth and stability of earnings and dividends are deemed key elements in FY- Fiscal Yearestablishing S&P’s earnings and dividend rankings for common stocks, which are P/E- Price/Earningsdesigned to capsulize the nature of this record in a single symbol. It should be noted, PEG Ratio- P/E-to-Growth Ratiohowever, that the process also takes into consideration certain adjustments and PV- Present Valuemodifications deemed desirable in establishing such rankings. The final score for R&D- Research & Developmenteach stock is measured against a scoring matrix determined by analysis of the scores ROE- Return on Equityof a large and representative sample of stocks. The range of scores in the array of ROI- Return on Investmentthis sample has been aligned with the following ladder of rankings: ROIC- Return on Invested Capital ROA- Return on AssetsA+ Highest B+ Average C Lowest SG&A- Selling, General & Administrative ExpensesA High B Below Average D In Reorganization WACC- Weighted Average Cost of CapitalA- Above Average B- Lower NR Not Ranked Dividends on American Depository Receipts (ADRs) and American DepositoryS&P Issuer Credit Rating - A Standard & Poor’s Issuer Credit Rating is a current Shares (ADSs) are net of taxes (paid in the country of origin).opinion of an obligor’s overall financial capacity (its creditworthiness) to pay itsfinancial obligations. This opinion focuses on the obligor’s capacity and willingnessto meet its financial commitments as they come due. It does not apply to any specificfinancial obligation, as it does not take into account the nature of and provisions of Disclosures/Disclaimersthe obligation, its standing in bankruptcy or liquidation, statutory preferences, or thelegality and enforceability of the obligation. In addition, it does not take into accountthe creditworthiness of the guarantors, insurers, or other forms of creditenhancement on the obligation. Required Disclosures In contrast to the qualitative STARS recommendations covered in this report, whichS&P Capital IQ EPS Estimates – S&P Capital IQ earnings per share (EPS) estimates are determined and assigned by S&P Capital IQ equity analysts, S&P’s quantitativereflect analyst projections of future EPS from continuing operations, and generally evaluations are derived from S&P’s proprietary Fair Value quantitative model. Inexclude various items that are viewed as special, non-recurring, or extraordinary. particular, the Fair Value Ranking methodology is a relative ranking methodology,Also, S&P Capital IQ EPS estimates reflect either forecasts of S&P Capital IQ equity whereas the STARS methodology is not. Because the Fair Value model and theanalysts; or, the consensus (average) EPS estimate, which are independently STARS methodology reflect different criteria, assumptions and analytical methods,compiled by Capital IQ, a data provider to S&P Capital IQ Equity Research. Among quantitative evaluations may at times differ from (or even contradict) an equitythe items typically excluded from EPS estimates are asset sale gains; impairment, analyst’s STARS recommendations. As a quantitative model, Fair Value relies onrestructuring or merger-related charges; legal and insurance settlements; in process history and consensus estimates and does not introduce an element of subjectivityresearch and development expenses; gains or losses on the extinguishment of debt; as can be the case with equity analysts in assigning STARS recommendations.the cumulative effect of accounting changes; and earnings related to operations thathave been classified by the company as discontinued. The inclusion of some items,such as stock option expense and recurring types of other charges, may vary, and S&P Global STARS Distributiondepend on such factors as industry practice, analyst judgment, and the extent to In North Americawhich some types of data is disclosed by companies. As of December 31, 2011, research analysts at S&P Capital IQ Equity Research North America recommended 39.1% of issuers with buy recommendations, 57.4% EarningsS&P Core Earnings - S&P Capital IQ Core Earnings is a uniform methodology for with hold recommendations and 3.5% with sell recommendations.adjusting operating earnings by focusing on a companys after-tax earningsgenerated from its principal businesses. Included in the S&P Capital IQ definition are In Europeemployee stock option grant expenses, pension costs, restructuring charges from As of December 31, 2011, research analysts at S&P Capital IQ Equity Researchongoing operations, write-downs of depreciable or amortizable operating assets, Europe recommended 31.5% of issuers with buy recommendations, 50.6% withpurchased research and development, M&A related expenses and unrealized hold recommendations and 17.9% with sell recommendations.gains/losses from hedging activities. Excluded from the definition are pension gains,impairment of goodwill charges, gains or losses from asset sales, reversal of prior- In Asiayear charges and provision from litigation or insurance settlements. As of December 31, 2011, research analysts at S&P Capital IQ Equity Research AsiaS&P 12 Month Target Price – The S&P Capital IQ equity analyst’s projection of the recommended 43.8% of issuers with buy recommendations, 51.0% with holdmarket price a given security will command 12 months hence, based on a recommendations and 5.2% with sell recommendations.combination of intrinsic, relative, and private market valuation metrics, including S&PFair Value. Standard & Poor’s Equity Research
  • 4. January 11, 2012 Global Strat egyGlobally S&P Capital IQ or an affiliate may license certain intellectual property or provideAs of December 31, 2011, research analysts at S&P Capital IQ Equity Research pricing or other services to, or otherwise have a financial interest in, certain issuers 4globally recommended 38.3% of issuers with buy recommendations, 55.7% with hold of securities, including exchange-traded investments whose investment objective isrecommendations and 6.0% with sell recommendations. to substantially replicate the returns of a proprietary Standard & Poors index, such as the S&P 500. In cases where S&P Capital IQ or an affiliate is paid fees that are5-STARS (Strong Buy) Total return is expected to outperform the total return of a Buy): tied to the amount of assets that are invested in the fund or the volume of tradingrelevant benchmark, by a wide margin over the coming 12 months, with shares rising activity in the fund, investment in the fund will generally result in S&P Capital IQ orin price on an absolute basis. an affiliate earning compensation in addition to the subscription fees or other4-STARS (Buy): Total return is expected to outperform the total return of a relevant compensation for services rendered by S&P Capital IQ. A reference to a particularbenchmark over the coming 12 months, with shares rising in price on an absolute investment or security by S&P Capital IQ and/or one of its affiliates is not abasis. recommendation to buy, sell, or hold such investment or security, nor is it3-STARS (Hold): Total return is expected to closely approximate the total return of a considered to be investment advice.relevant benchmark over the coming 12 months, with shares generally rising in priceon an absolute basis. Indexes are unmanaged, statistical composites and their returns do not include2-STARS (Sell): Total return is expected to underperform the total return of a payment of any sales charges or fees an investor would pay to purchase therelevant benchmark over the coming 12 months, and the share price is not securities they represent. Such costs would lower performance. It is not possible toanticipated to show a gain. invest directly in an index.1-STARS (Strong Sell Total return is expected to underperform the total return of a Sell):relevant benchmark by a wide margin over the coming 12 months, with shares falling S&P Capital IQ and its affiliates provide a wide range of services to, or relating to,in price on an absolute basis. many organizations, including issuers of securities, investment advisers, broker- dealers, investment banks, other financial institutions and financial intermediaries,Relevant benchmarks: In North America, the relevant benchmark is the S&P 500 and accordingly may receive fees or other economic benefits from thoseIndex, in Europe and in Asia, the relevant benchmarks are generally the S&P Europe organizations, including organizations whose securities or services they may350 Index and the S&P Asia 50 Index. recommend, rate, include in model portfolios, evaluate or otherwise address.For All Regions: For a list of companies mentioned in this report with whom S&P Capital IQ and/orAll of the views expressed in this research report accurately reflect the research one of its affiliates has had business relationships within the past year, please goanalysts personal views regarding any and all of the subject securities or to:issuers. No part of analyst compensation was, is, or will be, directly or indirectly, http://www.standardandpoors.com/products-related to the specific recommendations or views expressed in this research services/articles/en/us/?assetID=1245187982940report.S&P Global Quantitative Recommendations Distribution DisclaimersIn Europe With respect to reports issued to clients in Japan and in the case of inconsistenciesAs of December 31, 2011, Standard & Poor’s Quantitative Services Europe between the English and Japanese version of a report, the English version prevails.recommended 50.7% of issuers with buy recommendations, 18.5% with hold With respect to reports issued to clients in German and in the case ofrecommendations and 30.8% with sell recommendations. inconsistencies between the English and German version of a report, the English version prevails. Neither S&P Capital IQ nor its affiliates guarantee the accuracy ofIn Asia the translation. Assumptions, opinions and estimates constitute our judgment as ofAs of December 31, 2011, Standard & Poor’s Quantitative Services Asia the date of this material and are subject to change without notice. Past performancerecommended 47.6% of issuers with buy recommendations, 21.9% with hold is not necessarily indicative of future results.recommendations and 30.5% with sell recommendations. S&P Capital IQ, its affiliates, and any third-party providers, as well as their directors,Globally officers, shareholders, employees or agents (collectively S&P Parties) do notAs of December 31, 2011, Standard & Poor’s Quantitative Services globally guarantee the accuracy, completeness or adequacy of this material, and S&Precommended 48.7% of issuers with buy recommendations, 20.7% with hold Parties shall have no liability for any errors, omissions, or interruptions therein,recommendations and 30.6% with sell recommendations regardless of the cause, or for the results obtained from the use of the information informationAdditional information is available upon request. provided by the S&P Parties. S&P PARTIES DISCLAIM ANY AND ALL EXPRESS OROther Disclosures IMPLIED WARRANTIES, INCLUDING, BUT NOT LIMITED TO, ANY WARRANTIES OF MERCHANTABILITY, SUITABILITY OR FITNESS FOR A PARTICULAR PURPOSE ORThis report has been prepared and issued by S&P Capital IQ and/or one of its USE. 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In the United States, research reports costs, expenses, legal fees, or losses (including, without limitation, lost income orare issued by Standard & Poor’s (“S&P”); in the United Kingdom by McGraw-Hill lost profits and opportunity costs) in connection with any use of the informationFinancial Research Europe Limited, which is authorized and regulated by the contained in this document even if advised of the possibility of such damages.Financial Services Authority and trades as Standard & Poor’s; in Hong Kong by Capital IQ is a business of S&P Capital IQ.Standard & Poor’s Investment Advisory Services (HK) Limited, which is regulated bythe Hong Kong Securities Futures Commission; in Singapore by Standard & Poor’s Ratings from Standard & Poor’s Ratings Services are statements of opinion as ofLLC, which is regulated by the Monetary Authority of Singapore; in Malaysia by the date they are expressed and not statements of fact or recommendations toStandard & Poor’s Malaysia Sdn Bhd (“S&PM”), which is regulated by the Securities purchase, hold, or sell any securities or to make any investment decisions.Commission; in Australia by Standard & Poor’s Information Services (Australia) Pty Standard & Poor’s assumes no obligation to update its opinions followingLtd (“SPIS”), which is regulated by the Australian Securities & Investments publication in any form or format. Standard & Poor’s ratings should not be reliedCommission; and in Korea by SPIAS, which is also registered in Korea as a cross- on and are not substitutes for the skill, judgment and experience of the user, itsborder investment advisory company. management, employees, advisors and/or clients when making investment and other business decisions. Standard & Poor’s rating opinions do not address theThe research and analytical services performed by SPIAS, McGraw-Hill Financial suitability of any security. Standard & Poor’s does not act as a fiduciary. WhileResearch Europe Limited, S&PM, and SPIS are each conducted separately from any Standard & Poor’s has obtained information from sources it believes to be reliable,other analytical activity of S&P Capital IQ. Standard & Poor’s does not perform an audit and undertakes no duty of due diligence or independent verification of any information it receives. Standard & Poor’s Equity Research
  • 5. January 11, 2012 Global Strat egyS&P Capital IQ keeps certain activities of its business units separate from each other For residents of the Philippines - The securities being offered or sold have not beenin order to preserve the independence and objectivity of their respective activities. As registered with the Securities and Exchange Commission under the Securities 5a result, certain business units of S&P Capital IQ may have information that is not Regulation Code of the Philippines. Any future offer or sale thereof is subject toavailable to other S&P Capital IQ business units. S&P Capital IQ has established registration requirements under the Code unless such offer or sale qualifies as anpolicies and procedures to maintain the confidentiality of certain non-public exempt transaction.information received in connection with each analytical process. Canadian investors should be aware that any specific securities discussed in thisStandard & Poor’s Ratings Services did not participate in the development of this research report can only be purchased in Canada through a Canadian registeredreport. Standard & Poor’s may receive compensation for its ratings and certain dealer and, if such securities are not available in the secondary market, they cancredit-related analyses, normally from issuers or underwriters of securities or from only be purchased by eligible private placement purchasers on a basis that isobligors. Standard & Poor’s reserves the right to disseminate its opinions and exempt from the prospectus requirements of Canadian securities law and will beanalyses. Standard & Poor’s public ratings and analyses are made available on its subject to resale restrictions.Web sites, www.standardandpoors.com (free of charge), and www.ratingsdirect.comand www.globalcreditportal.com (subscription), and may be distributed through For residents of Australia – This report is distributed by Standard & Poor’sother means, including via Standard & Poor’s publications and third-party Information Services (Australia) Pty Ltd (“SPIS”) in Australia.redistributors. Additional information about our ratings fees is available atwww.standardandpoors.com/usratingsfees. Any express or implied opinion contained in this report is limited to "General Advice" and based solely on consideration of the investment merits of the financialThis material is not intended as an offer or solicitation for the purchase or sale of any product(s) alone. The information in this report has not been prepared for use bysecurity or other financial instrument. Securities, financial instruments or strategies retail investors and has been prepared without taking account of any particularmentioned herein may not be suitable for all investors. Any opinions expressed persons financial or investment objectives, financial situation or needs. Beforeherein are given in good faith, are subject to change without notice, and are only acting on any advice, any person using the advice should consider itscurrent as of the stated date of their issue. Prices, values, or income from any appropriateness having regard to their own or their clients objectives, financialsecurities or investments mentioned in this report may fall against the interests of the situation and needs. You should obtain a Product Disclosure Statement relating toinvestor and the investor may get back less than the amount invested. Where an the product and consider the statement before making any decision orinvestment is described as being likely to yield income, please note that the amount recommendation about whether to acquire the product. Each opinion must beof income that the investor will receive from such an investment may fluctuate. weighed solely as one factor in any investment decision made by or on behalf ofWhere an investment or security is denominated in a different currency to the any adviser and any such adviser must accordingly make their own assessmentinvestor’s currency of reference, changes in rates of exchange may have an adverse taking into account an individuals particular circumstances.effect on the value, price or income of or from that investment to the investor. Theinformation contained in this report does not constitute advice on the tax SPIS holds an Australian Financial Services Licence Number 258896. Please refer toconsequences of making any particular investment decision. This material is not the SPIS Financial Services Guide for more information atintended for any specific investor and does not take into account your particular www.fundsinsights.com.au.investment objectives, financial situations or needs and is not intended as a STANDARD & POOR’S, S&P, S&P 500, S&P Europe 350 and STARSrecommendation of particular securities, financial instruments or strategies to you. are registered trademarks of Standard & Poor’s Financial ServicesBefore acting on any recommendation in this material, you should consider whether LLC.it is suitable for your particular circumstances and, if necessary, seek professionaladvice.This document does not constitute an offer of services in jurisdictions where S&PCapital IQ or its affiliates do not have the necessary licenses.For residents of the U.K. - This report is only directed at and should only be relied onby persons outside of the United Kingdom or persons who are inside the UnitedKingdom and who have professional experience in matters relating to investments orwho are high net worth persons, as defined in Article 19(5) or Article 49(2) (a) to (d) ofthe Financial Services and Markets Act 2000 (Financial Promotion) Order 2005,respectively.For residents of Singapore - Anything herein that may be construed as arecommendation is intended for general circulation and does not take into accountthe specific investment objectives, financial situation or particular needs of anyparticular person. Advice should be sought from a financial adviser regarding thesuitability of an investment, taking into account the specific investment objectives,financial situation or particular needs of any person in receipt of therecommendation, before the person makes a commitment to purchase theinvestment product.For residents of Malaysia - All queries in relation to this report should be referred toChing Wah Tam and Ahmad Halim.For residents of Indonesia - This research report does not constitute an offeringdocument and it should not be construed as an offer of securities in Indonesia, andthat any such securities will only be offered or sold through a financial institution. Standard & Poor’s Equity Research
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