ears to the ground vol 22
TRANSCRIPT
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M O N T H L Y
24 May 2011Nomura 1
Any authors named on this report are research analysts unless otherw ise indicated.See the important disclosures and analyst certifications on pages 7 to 13.
Property | I N D I A
Aat as h Sh ah +91 22 4037 4194 [email protected]
This editions highlight
There was some moderation in demand for office space in 1QCY11, but we expect
this to be temporary given strong hiring in the IT/ITeS industry. New supply in1QCY11 was the lowest in the past three years, which is a good sign for rent growth.
We expect new supply to remain low, as developers are currently facing a cash
crunch and will likely be forced to go slow on commercial space construction.
Ears to the ground Vol 22
SummaryThe advent of CY11 has seen demand for office space in India take a breather after
seven consecutive quarters of increase in leasing demand. This loss of momentum in
1QCY11 though may be temporary, in our view, as hiring in the IT/ITeS industry
remains strong. The problem, however, could be from non-IT industries, where there is
a slowdown in investment, and in our view, this could possibly lead to reduced office
space demand in CY11F. The silver lining is the fact that new supply also has
correspondingly come down, and this is now the third quarter in a row where it has
declined. New supply in the quarter was in fact the lowest in the past three years. With
developers facing a cash crunch due to high debt repayment and unavailability of
equity, along with flat-lining residential sales, we would expect new construction of
commercial space to be delayed or deferred leading to continued lower new supply in
the market. The vacancy situation though in some cities like Pune and Chennai is still
worrying, while Mumbais vacancy has reached alarming levels. Current vacancy
levels are unlikely to see a drastic reduction, in our view, unless developers curtail
construction plans. Rents have increased by 5-15% since the bottom in CY09 and willlikely see upside of another 5-10% in CY11F, we expect. Bangalore and Gurgaon are
well placed to see higher increases in rents from 2HCY11F onwards. Mumbai could be
witness to a decline in rents in CY11F as construction continues on new supply. In
other cities such as Noida, Chennai, Hyderabad, Pune and Kolkata, vacancy levels are
too high for rents to show any meaningful increase, in our view.
Bangalore continues to show strength in demand with pre-commitments also starting
to pick up, suggesting that corporates realise that availability of space in the city is
likely to be lower going forward. In the National Capital Region (NCR), Gurgaon has
vacancy levels which are the lowest in India at 10%, suggesting good upside potential
for rents. The demand-supply situation in Bangalore and Gurgaon is favourable for
developers and rent increases, in our view. We think companies (like DLF Ltd., UnitechLtd, Prestige Estates Ltd.) with upcoming supply in these cities are well poised to
potentially benefit from the same in CY11F.
Exhibit 1. Overall demand-supply t rends for top s ix cit ies in India
in mn sqft 4Q CY08 1Q CY09 2Q CY09 3Q CY09 4Q CY09 1Q CY10 2Q CY10 3QCY10 4QCY10 1QCY11 CY08 CY09 CY10
New supply 10.4 10.4 12.6 14.3 10.1 8.2 12.7 11.4 9.2 6.0 59.6 47.3 41.5
Fresh absorption (a) 5 2.8 4.5 5.4 5.9 6.3 7.8 8.1 8.2 6.5 24.7 18.6 30.4
Fresh pre-commitment (b) 2.1 1.0 0.9 1.1 1.3 2.3 1.2 2.3 2.4 2.0 17.1 4.3 8.2
Total fresh demand (a+b) 7.1 3.8 5.4 6.4 7.2 8.6 9.0 10.4 10.6 8.5 41.8 22.8 38.6
Note: Data for NCR, Mumbai, Bangalore, Hyderabad, Chennai and Pune
Source: Cushman & Wakefield (C&W), Nomura research
N O M U R A F I N A N C I A L A D V I S O R Y A N DS E C U R I T I E S ( I N D I A ) P R I V A T E L I M I T E D
Analyst
Aat as h Sh ah
+91 22 4037 4194
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Drilling down
Gurgaon, Bangalore and Chennai should outperform
National Capital Region new supply being deferred
The supply in NCR continues to be deferred with Noida drawing a blank again while
Gurgaon supply is under control. Demand in Gurgaon remains in the 1mn sqft per
quarter range, while vacancy of 10% is not worryingly high. Noidas vacancy continues
to be high at 24% as absorption remains extremely weak. Rents are up 3% on an
overall basis for both Gurgaon and Noida q-q. In our view, 2QCY11F could see an
increase in supply, but rents in Gurgaon should still strengthen from 2HCY11F.
Exhibit 2. NCR commercial property demand, supply and rent trends
Source: C&W, Nomura research
Exhibi t 3. Vacancy levels in NCR
Source: C&W, Nomura research
-
10
20
30
40
50
60
0
0.5
1
1.5
2
2.5
3
3.5
Gurgaon
Noida
Gurgaon
Noida
Gurgaon
Noida
Gurgaon
Noida
Gurgaon
Noida
Gurgaon
Noida
Gurgaon
Noida
Gurgaon
Noida
Gurgaon
Noida
1QCY09 2QCY09 3QCY09 4QCY09 1QCY10 2QCY10 3QCY10 4QCY10 1QCY11
INR/sqft/mth
mnsqft
Supply Fresh absorption Fresh pre-commitment
Gurgaon rentals(RHS) Noida rentals(RHS)
0
2
4
6
8
10
12
14
16
1QCY09 2QCY09 3QCY09 4QCY09 1QCY10 2QCY10 3QCY10 4QCY10 1QCY11
%
Demand pickup still w eak
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Mumbai: too much new supply
Fresh supply in Mumbai remains elevated, and with further new projects getting
completed in CY11, developers are likely to feel the heat in terms of rent pressure.
Central Mumbai and the suburban locations are likely to see the biggest jump in
completions, in our view, and we expect that rents may face some further correction in
these locations. For instance, Indiabulls Finance Centre in Lower Parel, Central
Mumbai is now quoting rents of Rs115/sqft/month versus Rs140/sqft/month a yearback. Overall vacancy levels in the city are high at 20% in 1QCY11. Another 30mn sqft
of office space is under construction to be completed in the next 3-4 years, which
could result in vacancies remaining stagnant at best. Mumbai, it seems to us, is the
worst placed city for office space developers at present.
Exhibit 4. Mumbai: commercial property demand, supply, rent and vacancy
trends
Source: C&W, Nomura research
Bangalore: Pre-commitments pick up paceDemand in Bangalore seems to have stabilised in the 3.5-4mn sqft per quarter range
while new supply remains limited. A total of 14.5mn sqft is under construction in
Bangalore and 6.5mn sqft is expected to be completed in CY11F. We do not believe
this will be sufficient to meet demand, thus likely leading to a fall in vacancy from the
current level of 15.8%. Companies with projects available or getting closer to
completion should benefit, we expect. Rents have started picking up pace, and we
expect them to strengthen even further.
Exhibit 5. Bangalore: commercial property demand, supply, rent and
vacancy trends
Source: C&W, Nomura research
-
20
40
60
80
100
120
140
160
180
200
0
0.5
1
1.5
2
2.5
3
3.5
4
4.5
1Q CY09 2Q CY09 3Q CY09 4Q CY09 1Q CY10 2Q CY10 3Q CY10 4Q CY10 1Q CY11
INR/sqft/mth&%age
mnsqft
Supply Fresh absorption Fresh pre-commitment Rentals(RHS) Vacancy (RHS)
12
17
22
27
32
37
42
47
0
1
2
3
4
5
6
1QCY09 2QCY09 3QCY09 4QCY09 1QCY10 2QCY10 3QCY10 4QCY10 1QCY11
INR/sqft/mth&%age
mnsqft
Supply Fresh absorption Fresh pre-commitment Rentals (RHS) Vacancy (RHS)
Supply to be lower than demand
in CY11F
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Chennai: Demand may improve as a substitute to Bangalore
Vacancy in Chennai is coming down as new supply remains weak but, at 19%, is still
very high, resulting in flat rents. Demand is hovering around the 0.75-1mn sqft mark,
which is not robust enough to make an impact on rents. Supply in CY11F is expected
to be around 5.7mn sqft, while the total under construction office space in Chennai is
11.4mn sqft, as per C&W. We believe demand in Chennai should pick up pace in the
next 12 months as a substitute to Bangalore, where rents may move up.
Exhibit 6. Chennai: commercial property demand, supply , rent and vacancy
trends
Source: C&W, Nomura research
Hyderabad: Low supply in future to push up rents
There was a sharp increase in supply in Hyderabad again in 1QCY11, while demand
slipped a bit. Vacancy levels which had come down significantly in the last couple of
quarters have picked up again to 15%, which in the current context of political turmoilseems reasonable to us. Rents have shown a big increase, growing on an average of
15% q-q from subdued levels. With about 3.2mn sqft under construction in Hyderabad,
there is not much supply coming up, and we would expect vacancy levels to fall going
forward and rents to move up sharply.
Exhibit 7. Hyderabad: commercial property demand, supply, rent and
vacancy trends
Source: C&W, Nomura research
12
16
20
24
28
32
36
40
0
0.5
1
1.5
2
2.5
3
3.5
4
1QCY09 2QCY09 3QCY09 4QCY09 1QCY10 2QCY10 3QCY10 4QCY10 1QCY11
INR
/sqft/mth&%age
mnsqft
Supply Fresh absorption Fresh pre-commitment Rentals (RHS) Vacancy (RHS)
10
14
18
22
26
30
34
38
0
0.2
0.4
0.6
0.8
1
1.2
1.4
1.6
1.8
2
1QCY09 2QCY09 3QCY09 4QCY09 1QCY10 2QCY10 3QCY10 4QCY10 1QCY11
INR/sqft/mth&%age
mnsqft
Supply Fresh absorption Fresh pre-commitment Rentals (RHS) Vacancy (RHS)
Not much supply under
construction -positive for rent
growth
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Pune: Demand fails to pick up
1QCY11 saw a sharp decline in new supply but vacancy levels at 25% remain the
highest in the country. Demand continues to show no signs of picking up which we
think is likely to negatively impact rents going forward. Approximately 11.8mn sqft of
office space is under construction in Pune, and unless demand picks up from current
levels, we believe this construction will have to be deferred to avoid a crash in rents.
Exhibit 8. Pune commercial property demand, supply, rent, vacancy trends
Source: C&W, Nomura research
Market performance
Exhibit 9. Peer comparison
Ticker Company RatingCMP(Rs)
NAV/share(Rs)
Disc. toNAV (%)
Mcap (Rsbn)
P/E (x) P/BV (x)
FY12F FY13F FY12F FY13F
DLFU IN DLF NEUTRAL 219 253 -13% 371.9 21.2 17.5 1.4 1.3
UT IN Unitech BUY 32 64 -51% 82.5 12.9 11.2 0.7 0.7
PVKP IN Puravankara Projects BUY 93 168 -44% 19.9 13.0 7.3 1.2 1.0
HDIL IN HDIL BUY 155 366 -58% 64.4 8.2 4.7 0.7 0.6
GPL IN Godrej Properties NEUTRAL 650 524 24% 45.4 33.8 17.9 4.9 4.0
DBRL IN DB Realty Not rated 69 16.7 2.5 2.0 0.4 0.4
IBREL IN Indiabulls Real Estate Not rated 107 43.2 9.6 9.7 0.4 0.4
SOBHA IN Sobha Not rated 263 25.8 11.5 7.3 1.1 0.9
ARCP IN Anant Raj Not rated 63 18.6 6.4 4.4 0.5 0.4
MLIFE IN Mahindra Lifespace Not rated 41 17.8 6.9 4.3 0.6 0.5
PHNX IN Phoenix Mills Not rated 357 14.6 8.3 - 1.4 -
PEPL IN Prestige Estates Not rated 191 27.7 15.9 25.9 1.4 1.5
OBER IN Oberoi Realty Not rated 138 45.3 9.6 9.3 1.6 1.6
Prices as of 24 May 2011.Source: Nomura estimates for rated stocks, Bloomberg consensus for not rated stocks
15
20
25
30
35
40
45
0
0.5
1
1.5
2
2.5
3
3.5
4
1QCY09 2QCY09 3Q CY09 4Q CY09 1Q CY10 2QCY10 3QCY10 4QCY10 1QCY11
INR/sqft/mth&%age
mnsqft
Supply Fresh absorption Fresh pre-commitment Rentals (RHS) Vacancy (RHS)
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Valuation methodology and Risks
DLF Ltd.:We value DLF Ltd. using a net asset value (NAV) methodology, which is a
DCF valuation of the development potential of the land reserves and developed
property the company holds. We do not offer any premium or discount to this NAV to
arrive at our target price. Our target price of Rs253 per share is based on Rs199 for
the land bank NAV, Rs32 for non-core assets and land and Rs22 for DLF Assets Ltd.
and Caraf assets, as DLF now owns 55.1% of them. Upside risks include: 1) animprovement in the residential demand environment leading to higher volumes;
2) higher-than-expected demand for office space leading to increased rents; and
3) sale of non-core assets at higher-than-estimated valuations leading to a comfortable
cash position. Downside risks include: 1) rapid increases in interest rates; 2) below-
expectation growth in the economy; 3) execution lagging behind expectations; 4) a
credit-crunch like environment resulting in developers unable to refinance their debt;
and 5) equity dilution to repay debt.
Unitech Ltd.: Our 12-month target price is Rs64. We value the company in two parts:
1) net asset value of the current land bank at Rs59 per share; and 2) Unitech Infra at
Rs5 per share. Our cost of capital assumption is 15.25%. Downside risks include:
1) any negative outcome from the investigation in the telecom scandal; 2) a reductionin liquidity and capital availability for developers; 3) stalled economic growth recovery;
4) an inability to successfully sell projects or construct them; and 5) rising interest rates.
Puravankara: We value the stock using our net asset value estimate of its current
land bank at Rs168 per share, without any discount to NAV, and with cost of capital at
13.5%. We think the biggest risk is the potential failure to sell and execute projects on
time, resulting in cash flow problems. Other downside risks include: 1) A reduction in
liquidity and capital availability for developers; 2) stalled economic growth; and
3) rising interest rates along with policy action to restrict lending to property developers,
which could lead to refinancing risks for Puravankara.
HDIL: We value HDIL using our net asset value estimate of its current saleable area at
Rs366 per share, without any discount/premium to NAV, and with cost of equity at
15%. Downside risks include 1) a delay in shifting of slum dwellers in phase 1 of the
airport slum rehab project; 2) an increase in FSI in Mumbai, which would affect
demand and pricing of TDR; and 3) an increase in interest rates, which would affect
demand for property and sentiment for property stocks.
Godrej Properties: We estimate Godrej Properties NAV at Rs524 per share. We
apply a 40% premium on an expected accretion of 1.2mn sqft in BKC, Mumbai and 36
acres in Vikhroli, Mumbai, to arrive at our target price of Rs733. Risks to our estimates
and valuation include: 1) an increase in policy rates, followed by a hike in mortgage
rates; 2) delays in approvals, resulting in slower-than-anticipated execution of projects;
3) conflict of interest with group companies in terms of land parcels accessed from
them currently and in the future; and 4) the possibility of accretion of land reserves,
especially in Vikhroli and BKC, Mumbai not taking place.
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Analyst Cert if icationI, Aatash Shah, hereby certify (1) that the views expressed in this Research report accurately reflectmy personal views about any or all of the subject securities or issuers referred to in this Researchreport, (2) no part of my compensation was, is or will be directly or indirectly related to the specificrecommendations or views expressed in this Research report and (3) no part of my compensation istied to any specific investment banking transactions performed by Nomura Securities International, Inc.,Nomura International plc or any other Nomura Group company.
Issuer Specific Regulatory DisclosuresMentioned companies
Issuer name Ticker Price Price dateStockrating
Sectorrating Disclosures
DLFDLFUIN
218.95INR
24-May-2011 Neutral Not Rated
Godrej Properties Ltd GPL IN645.05INR
24-May-2011 Neutral Not Rated 47
Housing Development &Infrastructure
HDILIN
154.80INR
24-May-2011 Buy Not Rated
Puravankara ProjectsPVKPIN 92.55 INR
24-May-2011 Buy Not Rated
Unitech UT IN 31.65 INR24-May-2011 Buy Not Rated
Disclosures required in the U.S.
47 Manager/Co-Manager in the past 12 months Nomura Securities International Inc. and /or its affiliates has managed or co-managed a public orRule 144A offering of the company's securities in the past 12 months.
Previous Rating
Issuer name Previous Rating Date of change
DLF Reduce 02-Feb-2010
Godrej Properties Ltd Buy 15-Oct-2010
Housing Development & Infrastructure Not Rated 17-Sep-2010
Puravankara Projects Reduce 17-Jun-2009
Unitech Reduce 17-Jun-2009
DLF (DLFU IN) 218.95 INR (24-May-2011)
Rating and target price chart (three year history)
Neutral (Sector rating: Not Rated)
Date Rating Target pric e Closing price
14-Mar-2011 253.00 228.30
20-May-2010 296.00 271.05
29-Mar-2010 330.70 299.15
02-Feb-2010 331.00 326.20
02-Feb-2010 Neutral 326.20
02-Nov-2009 330.00 370.00
29-Jun-2009 292.00 338.00
06-May-2009 152.00 245.95
20-Apr-2009 164.00 230.80
20-Apr-2009 Reduce 230.8011-Feb-2009 138.00 150.85
11-Feb-2009 Neutral 150.85
For explanation of ratings refer to the stock rating keys located after chart(s)
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Godrej Properties Ltd (GPL IN) 645.05 INR (24-May-2011)
Rating and target price chart (three year history)
Neutral (Sector rating: Not Rated)
Date Rating Target pri ce Closing price
15-Oct-2010 733.00 731.05
15-Oct-2010 Neutral 731.05
20-May-2010 588.00 515.50
18-Feb-2010 596.00 480.75
18-Feb-2010 Buy 480.75
For explanation of ratings refer to the stock rating keys located after chart(s)
Housing Development & Infrastructure (HDIL IN) 154.80 INR (24-May-2011)
Rating and target price chart (three year history)
Buy (Sector rating: Not Rated)
Date Rating Target pri ce Closing price
17-Sep-2010 366.00 277.00
17-Sep-2010 Buy 277.00
For explanation of ratings refer to the stock rating keys located after chart(s)
Puravankara Projects (PVKP IN) 92.55 INR (24-May-2011)
Rating and target price chart (three year history)
Buy (Sector rating: Not Rated)
Date Rating Target pri ce Closing price
20-May-2010 168.00 95.80
08-Oct-2009 162.00 116.50
04-Aug-2009 129.00 96.25
04-Aug-2009 Buy 96.2508-May-2009 57.00 68.90
08-May-2009 Reduce 68.90
11-Feb-2009 47.00 43.55
11-Feb-2009 Neutral 43.55
17-Dec-2008 40.00 47.50
17-Dec-2008 Reduce 47.50
For explanation of ratings refer to the stock rating keys located after chart(s)
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Unitech (UT IN) 31.65 INR (24-May-2011)
Rating and target price chart (three year history)
Buy (Sector rating: Not Rated)
Date Rating Target pri ce Closing price
16-Feb-2011 64.00 38.20
20-May-2010 100.00 70.20
14-Jan-2010 112.00 88.20
11-Jan-2010 112.40 90.40
02-Nov-2009 112.00 82.25
03-Aug-2009 114.00 94.60
29-Jun-2009 106.00 85.30
26-Jun-2009 113.00 82.35
26-Jun-2009 Buy 82.35
20-Apr-2009 47.00 53.75
20-Apr-2009 Reduce 53.75
11-Feb-2009 Buy 32.15
02-Jan-2009 Reduce 46.40
17-Dec-2008 37.00 34.90
17-Dec-2008 Neutral 34.90
For explanation of ratings refer to the stock rating keys located after chart(s)
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As at 31 March 2011.*The Nomura Group as defined in the Disclaimer section at the end of this report.Explanation of Nomura's equity research rating system in Europe, Middle East andAfrica, US and Lat in Amer ica for ratings published f rom 27 October 2008The rating system is a relative system indicating expected performance against a specific benchmarkidentified for each individual stock. Analysts may also indicate absolute upside to target price definedas (fair value - current price)/current price, subject to limited management discretion. In most cases,the fair value will equal the analyst's assessment of the current intrinsic fair value of the stock using anappropriate valuation methodology such as discounted cash flow or multiple analysis, etc. STOCKS
A rating of 'Buy',indicates that the analyst expects the stock to outperform the Benchmark over thenext 12 months.A rating of 'Neutral', indicates that the analyst expects the stock to perform in line with the Benchmarkover the next 12 months.
A rating of 'Reduce', indicates that the analyst expects the stock to underperform the Benchmark overthe next 12 months.
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A rating of 'Suspended', indicates that the rating and target price have been suspended temporarily tocomply with applicable regulations and/or firm policies in certain circumstances including when Nomurais acting in an advisory capacity in a merger or strategic transaction involving the company. Benchmarks are as follows: United States/Europe: Please see valuation methodologies forexplanations of relevant benchmarks for stocks (accessible through the left hand side of the NomuraDisclosure web page: http://www.nomura.com/research);Global Emerging Markets (ex-Asia): MSCIEmerging Markets ex-Asia, unless otherwise stated in the valuation methodology.SECTORS
A 'Bullish' stance, indicates that the analyst expects the sector to outperform the Benchmark duringthe next 12 months.
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appropriate valuation methodology such as discounted cash flow, multiple analysis, etc.A 'Buy' recommendation indicates that potential upside is 15% or more.A 'Neutral' recommendation indicates that potential upside is less than 15% or downside is less than5%.
A 'Reduce' recommendation indicates that potential downside is 5% or more.A rating of 'Suspended' indicates that the rating and target price have been suspended temporarily tocomply with applicable regulations and/or firm policies in certain circumstances including when Nomurais acting in an advisory capacity in a merger or strategic transaction involving the subject company. Securities and/or companies that are labelled as 'Not rated' or shown as 'No rating' are not in regularresearch coverage of the Nomura entity identified in the top banner. Investors should not expectcontinuing or additional information from Nomura relating to such securities and/or companies. SECTORS
A 'Bullish' rating means most stocks in the sector have (or the weighted average recommendation ofthe stocks under coverage is) a positive absolute recommendation.
A 'Neutral' rating means most stocks in the sector have (or the weighted average recommendation of
the stocks under coverage is) a neutral absolute recommendation.
A 'Bearish' rating means most stocks in the sector have (or the weighted average recommendation ofthe stocks under coverage is) a negative absolute recommendation.Explanation of Nomura's equity research rating system in Japan publ ished prior to 6January 2009 (and ratings in Europe, Middle East and Africa, US and Latin Americapublished prior to 27 October 2008)STOCKS
A rating of '1' or 'Strong buy', indicates that the analyst expects the stock to outperform theBenchmark by 15% or more over the next six months.
A rating of '2' or 'Buy', indicates that the analyst expects the stock to outperform the Benchmark by 5%or more but less than 15% over the next six months.
A rating of '3' or 'Neutral', indicates that the analyst expects the stock to either outperform orunderperform the Benchmark by less than 5% over the next six months.
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A 'Neutral' stance, indicates that the analyst expects the sector to perform in line with the Benchmarkduring the next six months.
A 'Bearish' stance, indicates that the analyst expects the sector to underperform the Benchmarkduring the next six months.Benchmarks are as follows: Japan: TOPIX; United States: S&P 500, MSCI World TechnologyHardware & Equipment; Europe, by sector - Hardware/Semiconductors: FTSE W Europe IT Hardware;
Telecoms: FTSE W Europe Business Services; Business Services: FTSE W Europe;Auto &Components: FTSE W Europe Auto & Parts; Communications equipment: FTSE W Europe ITHardware; Ecology Focus: Bloomberg World Energy Alternate Sources; Global Emerging Markets:MSCI Emerging Markets ex-Asia.
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Explanation of Nomura's equity research rating system for Asian companies undercoverage ex Japan published prio r to 30 October 2008STOCKSStock recommendations are based on absolute valuation upside (downside), which is defined as (FairValue - Current Price)/Current Price, subject to limited management discretion. In most cases, the FairValue will equal the analyst's assessment of the current intrinsic fair value of the stock using anappropriate valuation methodology such as Discounted Cash Flow or Multiple analysis etc. However, ifthe analyst doesn't think the market will revalue the stock over the specified time horizon due to a lackof events or catalysts, then the fair value may differ from the intrinsic fair value. In most cases,
therefore, our recommendation is an assessment of the difference between current market price andour estimate of current intrinsic fair value. Recommendations are set with a 6-12 month horizon unlessspecified otherwise. Accordingly, within this horizon, price volatility may cause the actual upside ordownside based on the prevailing market price to differ from the upside or downside implied by therecommendation.
A 'Strong buy' recommendation indicates that upside is more than 20%.A 'Buy' recommendation indicates that upside is between 10% and 20%.A 'Neutral' recommendation indicates that upside or downside is less than 10%.A 'Reduce' recommendation indicates that downside is between 10% and 20%.A 'Sell' recommendation indicates that downside is more than 20%.SECTORS
A 'Bullish' rating means most stocks in the sector have (or the weighted average recommendation ofthe stocks under coverage is) a positive absolute recommendation.
A 'Neutral' rating means most stocks in the sector have (or the weighted average recommendation ofthe stocks under coverage is) a neutral absolute recommendation.
A 'Bearish' rating means most stocks in the sector have (or the weighted average recommendation ofthe stocks under coverage is) a negative absolute recommendation.Target Price
A Target Price, if discussed, reflect in part the analyst's estimates for the company's earnings. Theachievement of any target price may be impeded by general market and macroeconomic trends, andby other risks related to the company or the market, and may not occur if the company's earnings differfrom estimates.
DisclaimersThis publication contains material that has been prepared by the Nomura entity identified at the top orbottom of page 1 herein, if any, and/or, with the sole or joint contributions of one or more Nomuraentities whose employees and their respective affiliations are specified on page 1 herein or elsewhereidentified in the publication. Affiliates and subsidiaries of Nomura Holdings, Inc. (collectively, the'Nomura Group'), include: Nomura Securities Co., Ltd. ('NSC') Tokyo, Japan; Nomura International plc
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ARE HEREBY EXCLUDED AND NOMURA GROUP SHALL HAVE NO LIABILITY FOR THE USE,MISUSE, OR DISTRIBUTION OF THIS INFORMATION.Opinions expressed are current opinions as of the original publication date appearing on this materialonly and the information, including the opinions contained herein, are subject to change without notice.Nomura is under no duty to update this publication. If and as applicable, NSI's investment bankingrelationships, investment banking and non-investment banking compensation and securities ownership(identified in this report as 'Disclosures Required in the United States'), if any, are specified indisclaimers and related disclosures in this report. In addition, other members of the Nomura Group mayfrom time to time perform investment banking or other services (including acting as advisor, manageror lender) for, or solicit investment banking or other business from, companies mentioned herein.Furthermore, the Nomura Group, and/or its officers, directors and employees, including persons,
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without limitation, involved in the preparation or issuance of this material may, to the extent permittedby applicable law and/or regulation, have long or short positions in, and buy or sell, the securities(including ownership by NSI, referenced above), or derivatives (including options) thereof, ofcompanies mentioned herein, or related securities or derivatives. For financial instruments admitted totrading on an EU regulated market, Nomura Holdings Inc's affiliate or its subsidiary companies may actas market maker or liquidity provider (in accordance with the interpretation of these definitions underFSA rules in the UK) in the financial instruments of the issuer. Where the activity of liquidity provider iscarried out in accordance with the definition given to it by specific laws and regulations of other EU
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