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1、Tim,Head of Analyst,(+27) 4 4283-864,Deutsche Bank Markets Research,Sub-Saharan Africa South Africa,Periodical SA Equities Daily,Date 27 November 2012 PascalClarkMoura Danelee Masia,BIL; RIO; GIF; TIF; PFG; SA economics preview; US equity strategy COMPANY UPDATES BHP Billiton plc Alert - Sharing Jan
2、sen BHP is progressing with studies and the shaft sinking on its 8mtpa Jansen potash project. The feasibility study, and detailed front-end mine planning and engineering are well advanced. The next milestone should be granting of the mining leases over the key lease areas, which should be received b
3、y year end, allowing the company to proceed with Stage 1 with confidence. Rio Tinto plc Alert - Iron ore strategy day preview Rio Tinto is hosting an iron ore investor seminar in Sydney on Thursday, 29 Nov at 14:30 AEDT (03:30 BST). We expect an update on the timing and budget of the Pilbara expansi
4、on (230mt to 353mtpa), future de-bottlenecking opportunities to 400mtpa and beyond, progress on the phase 2 expansion at IOC to 23mtpa and information on regulatory approvals and government financing of the Simandou rail and port. Gold Fields Ltd - 3Q12 results: Moving on from a challenging quarter
5、GFI is recovering from a difficult 2H12, but the groups mettle will continue to be tested in 2013. GFI aims to improve the quality of its portfolio, earnings and cash flow over time. The intention is clearly positive, springing from its comments during 2012 that the de-coupling of the gold price fro
6、m gold,ResearchResearch Economist (+971)11 775-7268 (+27) 11 775-7267 Anna Mulholland, CFA Research Analyst (+27) 11 775-7270 Warren Goldblum, CFA Research Analyst (+27) 11 775-7185 Rob Clifford Research Analyst (+44) 20 754-58339 ,mining equities is disappointing and unsustainable. Tiffany time to
7、bring in a partner or two? BHP is progressing with studies and the shaft sinking on its 8mtpa Jansen potash project. The feasibility study, and detailed front-end mine planning and engineering are well advanced. The next milestone should be granting of the mining leases over the key lease areas, whi
8、ch should be received by year end, allowing the company to proceed with Stage 1 with confidence. However it is likely that board approval will be delayed until FY14 at the earliest, due to a lack of cash flow, the weak medium term outlook for potash, and investor concerns about the projects economic
9、s. The,FYE 6/30 2012A 2013E 2014E 72,226 69,996 78,525 DB PBT (USDm) 24,722 20,875 25,525 23,022 20,875 25,525 DB EPS (USD) 3.20 2.56 3.13 DPS (USD) 1.12 1.15 1.19 P/E (DB EPS) (x) 9.7 12.2 10.0,last concern leads to our view that a partial sell-down (perhaps 25%) would de-risk the project, a positi
10、ve for shareholders. Buy on valuation. The sell-down concept following in the footsteps of the oil industry Jansen is the last of the major low returning long payback Mega projects still alive and in its original form post the shelving of the Olympic Dam and Outer Harbour projects. Similar to our vi
11、ew on Olympic Dam (see our report Monetising Olympic Dam published on 8 June 2012), we think selling part of Jansen would reduce risk for shareholders. We believe the mining industry will move closer to the oil industry model of forming JVs for large capex intensive projects. Bringing in one or more
12、 partners would reduce the capital outlay for shareholders and guarantee long term sales volumes away from the Canpotex cartel. Depending on the price, a sell down would also bring forward NPV. On our analysis, 25% could attract a price of US$2bn or more. The potential partners The most suitable par
13、tners would either be fertiliser companies (off-takers) or sovereign wealth funds. In our opinion large fertiliser producers and distributors from China, India (two of the largest growth markets for fertiliser), US (largest export destination for Canadian potash) and to a lesser extent South America
14、 could all potentially be interested. Project scope and economics We forecast initial production of 1mtpa in 2017, ramping up incrementally to nameplate 8mtpa by 2024. The ultimate goal is to lift potash production to more than 16mtpa. We value Jansen at US$7.3bn using a long run potash price of US$
15、450/t. At this price the project generates an IRR of 12.6%. We forecast long run cash costs of US$125/t (including royalties), total development capex of c.US$15bn and maintenance capex of c.US$125m p.a. On our analysis, Stage 1 will only just clear the cost of capital due to the flagfall capex, per
16、haps as much as US$5-6bn.,Tim Clark (+27) 11 775-7268 ,Grant Sporre (+44) 207 545-8170 ,Paul Young (+61) 2 8258-2587 paul-,The following link will be available for 90 days (note you will not need a username or password to access the document using this link). For more information, please click on th
17、e link for the full PDF. If you have any trouble viewing the link, copy and paste the link in a browser: No username or password required: http:/pull.db- Username and password required: http:/,Page 2,Deutsche Bank AG/London,Stated PBT,(USDm),27 November 2012 SA Equities Daily Company updates,Rio Tin
18、to plc,Buy,Iron ore strategy day preview,Reuters: RIO.L,Exchange: LSE,Ticker: RIO,Price (GBP) Price target (GBP) 52-week range (GBP) Market cap (GBP)(m) Shares outstanding (m) Free float (%) FTSE 100 Index,2,994.00 4,580.00 3,987.50 - 2,715.50 55,450.5 1,858 100 5,819.1,Showcasing tier one growth on
19、ce again Rio Tinto is hosting an iron ore investor seminar in Sydney on Thursday, 29 Nov at 14:30 AEDT (03:30 BST). We expect an update on the timing and budget of the Pilbara expansion (from 230mt to 353mtpa), future de-bottlenecking opportunities to 400mtpa and beyond, progress on the phase 2 expa
20、nsion at IOC to 23mtpa and information on regulatory approvals and government financing of the Simandou rail and port. The company will likely promote (again) the benefits of its operational control centre and automation drive in the Pilbara, which should result in at least US$3/t lower operating co
21、sts vs. its key peer over the long run. Rios Pilbara,FYE 12/31 Revenue (USDm),2011A 2012E 2013E 60,539 49,272 51,409,expansion is the lowest cost, highest returning iron ore expansion in the world. The iron ore division will contribute c.80% of group EBITDA in CY13 and c.60% over the long run. We va
22、lue the division at c.US$85bn or A$55/sh (c.65% of our Rio NPV).,DB PBT (USDm) 22,506 11,799 14,165 13,216 11,684 14,165 DB EPS (USD) 8.16 5.19 5.20 DPS (USD) 1.45 1.52 1.61 P/E (DB EPS) (x) 7.7 9.2 9.2,The Pilbara expansion appears early, budget could nudge higher though Although we expect Rio to r
23、eiterate the same project deadlines, our analysis shows that the Stage 1 expansion to 283mtpa appears at least three months ahead of the 4Q13 commissioning target, and we believe the expansion to 353mtpa could also be early (by up to six months). At Cape Lambert, we expect the second jetty to be com
24、pleted in 2Q13. The sixth car dumper (the critical path and driver of the ramp- up) also appears on track for completion in 2Q13. We continue to believe our CY13 and CY14 production forecasts of 250Mt and 269mt might be 10-15mt too conservative. The only negative from the briefing might be a 5-10% i
25、ncrease in the capex budget due to the strong AUD. Approx. US$21bn of capex (100% basis) has been approved for the expansion and around US$3-5bn of mine capex is yet to be approved, which we expect to be announced in 2H13 and this could either be brownfield and/or greenfield. We assume US$28bn of to
26、tal capex, 8% higher than Rios estimate, and therefore we already model in the impacts of the strong AUD. We expect de-bottlenecking opportunities to be highlighted during the briefing. Our analysis shows that Rio can increase capacity to 400-420mtpa via de-bottlenecking for c.US$100/t at an IRR of
27、c.25%. Simandou government financing delaying construction of rail and port We dont expect any significant announcements on Simandou. In June, Rio approved a further US$0.5bn to advance studies, commence early earthworks and order long-lead items. Project approval and the construction of the infrast
28、ructure is dependent on the Guinean government obtaining and providing its share of the cost and Rio obtaining environmental and construction licences along the length of the rail line. At our recent conference, Rio indicated that this will be a key challenge. The government will own 51% of the rail
29、 and up to 35% of the mine, 15% of which will be free carry.,Rob Clifford (+44) 20 754-58339 ,Paul Young (+61) 2 8258-2587 paul-,Grant Sporre (+44) 207 545-8170 ,The following link will be available for 90 days (note you will not need a username or password to access the document using this link). F
30、or more information, please click on the link for the full PDF. If you have any trouble viewing the link, copy and paste the link in a browser: No username or password required: http:/pull.db- Username and password required: http:/,Deutsche Bank AG/London,Page 3,27 November 2012 SA Equities Daily Co
31、mpany updates,Gold Fields Ltd,Hold,3Q12 results: moving on from a challenging quarter,Reuters: GFIJ.J,Exchange: JSE,Ticker: GFI,Price (ZAR) Price target (ZAR) 52-week range (ZAR) Market cap (ZAR)(m) Shares outstanding (m) Free float (%) FTSE/JSE All Share,106.62 120.00 138.45 - 96.00 77,081.7 723 90
32、 37,865.6,Focus on quality of cash flow and returns is admirable but hard to deliver GFI is recovering from a difficult 2H12, but the groups mettle will continue to be tested in 2013. GFI aims to improve the quality of its portfolio, earnings and cash flow over time. The intention is clearly positiv
33、e, springing from its comments during 2012 that the de-coupling of the gold price from gold mining equities is disappointing and unsustainable. To reverse this trend is an uphill climb, in our view, starting with delivering (i) an improvement in SA labour relations, (ii) a turn-around in Australia,
34、(iii) a strategic review of its SA mines and (iv) decisions on the future of,FYE 12/31 Revenue (ZARm) DB PBT (ZARm) Stated PBT (ZARm) DB EPS (ZAR) DPS (ZAR) P/E (DB EPS)(x),2011A 2012E 2013E 41,877 46,008 62,220 13,262 12,884 25,796 12,112 11,369 23,761 9.72 9.74 20.35 3.30 2.60 6.60 12.2 10.9 5.2,a
35、 number of projects. Due to the uncertain outcomes of these major changes, we reiterate our Hold recommendation. 3Q12 results reflect challenging times, with higher costs and cash outflows Gold Fields reported 3Q12 production as guided at 811koz, down 6% q-on-q (DBe 810koz) at a unit cost of US$916/
36、oz (DBe US$902/oz), up 8% q-on-q. HEPS decreased 28% q-on-q to 165 SAc, 17% below our 199 SAc forecast, due to higher than expected unit costs, plus higher-than-estimated losses from associates, exploration costs, FX losses and deferred tax charges. CFO decreased by R2.7bn to R1.4bn, due primarily t
37、o a large working capital outflow of R2bn. Dividends of,R1.2bn were paid in the quarter, and capex increased to R3.6bn from R3.3bn in the prior quarter. Production downgraded but cash flow remains buoyed by high gold price We retain our forecast for FY12 production of 3.27moz, slightly lower than re
38、vised company guidance for “no more than 3.3moz”. Gold Fields expects FY12 unit costs to average US$895/oz, vs. our revised forecast of US$902/oz. We forecast earnings to grow from 957 SAc in FY12 up to 2148 SAc in FY14, driven by our bullish gold price forecasts. Cash flows should also be strong fo
39、r the same reason, with a forecast doubling of CFO during the same period, before forecast capex of R8- 10bnpa and dividends of R3-5bnpa. Target price remains R120; risks Our target price is based on a DCF-model, using a nominal WACC of 11.1% for cash flows driven by nominal commodity prices until 2
40、017e and a real WACC of 6.1% thereafter. We apply an exit multiple of 1x. Upside risks include a faster-than- expected ramp-up at SA mines post the strikes and a higher than expected gold price. Downside risks include a slower-than-expected ramp-up post-strikes and a lower-than-expected gold price.
41、Anna Mulholland, CFA (+27) 11 775-7270 The following link will be available for 90 days (note you will not need a username or password to access the document using this link). For more information, please click on the link for the full PDF. If you have any trouble viewing the link, copy and paste th
42、e link in a browser: No username or password required: http:/pull.db- Username and password required: http:/,Page 4,Deutsche Bank AG/London,27 November 2012 SA Equities Daily Company updates,Tiffany total normalised sales broadly in line MMIs 1Q13 trading update showed volume growth in life sales be
43、low our DB expectations for FY13e in all segments except affluent and employee benefits (EB) single premiums. Management comments suggest that margins remain similar to those at year end, mainly due to a change in mix. MMIs first and third fiscal quarters have historically been lower in volume. Howe
44、ver, the slow-down in the high margin segments of recurring SA entry-level (-11%; DBe +15%) and affluent risk premiums (-4%; DBe +6%) from 1Q12s undemanding base suggest downside,FYE 12/31 Stated PBT(ZARm) DB PBT (ZARm) DB EPS (ZAR) DPS (ZAR) P/E (DB EPS)(x),2012A 2,250 2,250 1.84 1.78 10.2,2013E 2,
45、535 2,535 1.92 1.23 10.8,2014E 2,908 2,908 2.05 1.32 10.1,risk to our FY13e growth and margin expectations. Lower margin mix with strong affluent volumes but decline in entry-level sales Total gross sales in the affluent segment were +14% (DB FY13e: +7%), with strong single premium sales (+16%; main
46、ly investment products) off-set by disappointing recurring sales (-4%; mainly higher margin risk products). Profitable recurring entry- level sales were -11%; a pronounced decline compared to DB expectations (+15%) and OMLs comparable segment (+22%).,Strong EB single premium sales, but R1.5bn non-re
47、curring in nature EB sales impressed at +376%, driven by a single premium inflow of R1.5bn. Net of this inflow, total yoy sales were +2% (refer Figure 1 below). Figure 1: Sales growth ex once-off items*, July-September 2012 (%, yoy),MMI 1Q13,DB FY13e,OML OMSA 3Q12,Single premiums Entry-level Affluen
48、t Employee benefits * Rest of Africa Recurring premiums Entry-level Affluent Employee benefits Rest of Africa Total gross sales Entry-level Affluent Employee benefits Rest of Africa,8% -25% 16% 4% -34% -5% -11% -4% -3% 11% 6% -19% 14% 2% -9%,7% 10% 7% 6% 15% 9% 15% 6% 6% 15% 7% 12% 7% 5% 15%,15% 0%
49、0% 35% 21% 11% 22% 1% -20% 56% 12% 22% 0% 6% 46%,* MMI had a once-off inflow of R1,500m in EB single premiums in 1Q13; adjusted for this inflow EB sales were R1,919m, up 376% from 1Q12 Source: Deutsche Bank, Company data Larissa van Deventer (+27) 11 775-7254 larissa.van- The following link will be
50、available for 90 days (note you will not need a username or password to access the document using this link). For more information, please click on the link for the full PDF. If you have any trouble viewing the link, copy and paste the link in a browser: No username or password required: http:/pull.