by NR INDRAN / INT

Australia Metals & Mining – ANCHOR REPORT: Here for the long haul

David Radclyffe; David Cotterell; Puneet Saxena

Miners: Teed up or shark bait?

Nomura’s Mining Research Team initiates coverage of the Australian Metals & Mining sector with coverage of ten leading metals and mining stocks representing ~US$350bn of market capitalisation. In our view, this core group of stocks exhibits attractive metrics for 2012 investors. Significantly, commodities are volatile but have not collapsed, even with constant EU headlines and China wobbles.

2. China communication equipment – ANCHOR REPORT: TD-LTE: What will change?

Leping Huang, Danny Chu, Sachin Gupta, Daisaku Masuno; Stuart Jeffrey; Carmen Boyero; Romit Shah; Sidney Ho; Sanjay Chaurasia; Chikai Tanaka; Aaron Jeng; Peter Liao; Dr Richard Windsor

TD-LTE: Shift to 4G in Asia to impact equipment, handsets & service

We expect China Mobile to launch TD-LTE (4G) services in 2H12-1H13 to catch up in its technology disadvantage in 3G and support the explosive growth of mobile data traffic triggered by the smartphone boom. We think this will benefit first movers of TD-LTE: ZTE in network equipment, Qualcomm in handsets from market-share expansion, and Softbank in improved equipment/handset sourcing. Comba, Anritsu and analog component vendors will likely benefit from market growth of sub-segments.

Regional Sector Strategy / Regional Economic Analysis

Asia Technology – 2H Nov DRAM contract price fell 9% amid prolonged weak PC DRAM demand

CW Chung; Marcello Ahn

The 2H Nov contract price of DDR3 2Gb 1,333MHz fell by 8.7%. As strong seasonality is already behind us while the supply constraint in HDD has worsened, we see continuously weakening demand for PC DRAM. Accordingly, we anticipate DRAM producers will cut utilization of not only the 50~60nm lines, but also 4xnm lines. In our view, 1Q12 should be the bottom for PC DRAM, when the impact of utilization cuts on 4xnm fabs should materialize, while the HDD supply constraint is expected to ease. We have a Buy only on Samsung Electronics.

Asia Economic Alert: Philippines: Disappointing Q3 GDP – 11/28/2011

Euben Paracuelles

Q3 GDP growth was a weaker-than-expected 3.2% y-o-y from 3.1% in Q2, driven by a slowdown in both exports and government construction projects. Given still robust private domestic demand and inflation that is currently running above the official target, we maintain our forecast that the central bank will stay on hold this week.

Asia Chart Alert: China: Industrial profit growth falls sharply – 11/28/2011

Zhiwei Zhang; Wendy Chen

China’s industrial profit growth, released yesterday, shows only a moderate drop to 25.3% y-o-y in year-to-October from 27.0% in year-to-September. However, we believe that the year-to-date figure masked a sharp deterioration in enterprise profits, as the year-over-year growth fell to 2.5% in October from 6.5% in September and 21% in August. Growth of industrial profits looks on track to turn negative in the coming months. If this happens, growth of industrial production will likely slow sharply, similar to what occurred in 2008. The slowdown in industrial profit growth reinforces our view that economic momentum is rapidly losing steam, and industries such as steel and power will likely be dragged down by a weakening property sector (see A cold winter in China, 18 November 2011). We see downside risks for macro data (industrial production growth, in particular) in the coming months.

Korea

LG Electronics [066570 KS] – Neutral : Positive momentum, but slow recovery ( KRW69,300 / PT: KRW63,000 )

Taiwan

HTC Corporation (2498 TT, Neutral) – Deteriorating, but not disappearing ( TWD471.5 / PT: TWD520.0 )

Taiwan Foundry – Foundry/OSAT marketing feedback

Hong Kong / China

L’Occitane (973 HK, Buy) – Operating margins lower on investments ( HKD15.42 / PT: HKD21.90 )

Glencore [805 HK] – Neutral : Glencore investor day takeaways ( HKD45.95 / PT: HKD55.00 )

China Property Paradise – Fine-tuning only by local authorities

China coal – Weekly: 21 Nov –27 Nov (Vol.17)

Hong Kong Property – Price cuts? Devil in the details

Malaysia

First Look – QSR Brands Bhd (QSR MK, Neutral) – 3Q11 disappoints on margins, Ramadhan ( MYR5.70 / PT: MYR5.84 )

Indonesia

First Look – Indonesia Coal Sector – Collapse of the Kutai Kertanegara Bridge

Australia

First Look – Metcash (MTS AU, Neutral) – 1H12 result (30 Nov) to confirm tough trading ( AUD3.99 / PT: AUD4.00 )

First Look – Australia Building Materials – Oct US New home sales rise off a very weak base

India

NTPC [NTPC IN] – Buy : Takeaways from Non-deal Roadshow in UK ( INR159.65 / PT: INR206 )

India Autos & Auto Parts – Expect robust volume growth in November 2011

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