汇丰银行-印度-金属与采矿业-印度贱金属：基本面改善支撑价格上涨

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1、13October2017IndiaBaseMetalsEQUITIESMETALS&MININGPricerallysupportedbyimprovingfundamentalsIndiaFirmdemandandongoingsupply-sidereformsinChinahaveRajeshLachhani*fuelledbasemetalrallyYTDAnalyst,Metals&Mining,MaterialsHSBCSecuritiesandCapitalMarkets(India)PrivateLimitedWerecentlyraisedo

2、urestimatesforaluminiumandzincbyrajeshvlachhani@hsbc.co.in+9122616406872/2%and1/6%,respectively,forCY2017/18e*Employedbyanon-USaffiliateofHSBCSecurities(USA)Inc,andisRaiseTPforHZ,VEDLandHNDL;reiterateBuyratingsonnotregistered/qualifiedpursuanttoFINRAregulationsVEDLandHNDL;anddowngradeHZto

3、Holdasweexpectzincpricestopeakin1QCY18RobustdemandandsupplyreformsinChinahavesupportedpricerally:China’sdomesticdemandhasbeenresilientYTDwithrisingPMIsandconsumerconfidenceandsteadyFAIandindustrialproduction(Charts1-4).Firmdemandcoupledwiththeongoingsupply-sidereformshavefuelledabasemetalr

4、allywithpricesupby23%onanaverageYTD.WhilezincandleadhaveseenthebiggestjumpsYTD(+28-29%),copperandaluminiumhavenotbeenfarbehind,risingby22-24%.Therallyhasbeenbetterthanourexpectations,andthishasresultedinanincreaseinHSBC’saluminiumandzincforecastsof1-6%forCY17/18e(MetalsQuarterlyQ42017).Wee

5、xpectaverageEBITDAgrowthofc24%y-o-yforbasemetalcompanies:WeexpectHZ,VEDLandHNDLtoreportrevenuegrowthonaverageof27%y-o-y(+8%q-o-q)andEBITDAgrowthof24%y-o-y(+13%q-o-q)for2QFY18e.WeestimatethatHZwillreportarecordsecondquarterEBITDAofINR28.2Bn(up46%y-o-y),strongestamongthebasemetalspack.Apartf

6、romhigherzinc/leadprices,HZ’sEBITDAgrowthisalsosupportedbyabenignbase(as1HFY17minedmetalproductionaccountedforonlyone-thirdofFY17).WeestimateNoveliswithreportanEBITDA/tofUSD380/t,itshighestinthepastfiveyears.RaisetargetpricesforHZ,VEDLandHNDL;downgradeHZtoholdandreiterateBuyonVEDLandHNDL:W

7、eraiseourEBITDAestimatesforHZbyc6/2%forFY18/19eontheincreasesinourpriceestimatesforzincandlead.WeraiseTPforHZtoINR340fromINR310butdowngradeourratingtoHoldasweexpectthezincrallytopeakaround1QCY18duetoincreasedsupply.WeraiseourTPforVEDLtoINR400fromINR370asweinco