EFTA01199070.pdf

From: Tazia Smith To: jeevacation@gmail.com Cc: Paul Morris 4 Nav Gu ta , Vinit Sahni Vahe Stepanian Subject: China Gas Holdings (384.HK) - consider tactical long-equity position [C] Date: Wed, 16 Apr 2014 15:46:31 +0000 Inline-Images: unnamed; unnamed(1); unnamed(2); unnamed(3); unnamed(4); unnamed(5); unnamed(6); unnamed(7) Classification: Confidential Jeffrey - Have you looked at China Gas (384.HK)? Consider tactical position - long equity - on potential for a Russia/China nat gas agreement. Gazprom (GAZP.RX, ruble denominated shares) is likely the more common implementation (both charts below). Would argue that the new pipeline diverts existing supply for Gazprom, where it is incremental earnings growth for the likes of China Gas. http://wvAv.reuters.com/article/2014/04/09/russia-china-gas-idUSLONONIIXM20140409 The original call is on The 3rd Plenum's commitment to environmental reform (specifically reduction of carbon emissions by increasing nat gas usage). The near-term catalyst stems from this week's developments in the Ukranian-Russian crisis. Not surprisingly, with the chill from the Western world threatening demand for Russia's commodity, Putin's accelerated conversations to the east. Market chatter suggests that negotiations on a Russia-China pipeline could divert 38bn cubic meters of gas per year over to China, and that Putin has sped up negotiations with the intent of turning his presently scheduled May 20 visit to China, into a signing ceremony for an export contract. The stock is a hedge fund name. The DB analyst has been less fond (latest rating is hold with a 9 HKD target). I think this is a tactical, geopolitically-driven entry point on a name that's also a compelling long-term growth investment. Right now it's trading close to 25x 2015 EPS eats of 0.50 HKD, bull case is meaningful upside potential in earnings on an uptake of nat gas in China. China Gas (384 HK is fairly liquid - —5mm share avg daily volume over the last month) Tazia China Gas lyr Price History EFTA01199070  384 HK HKD I 12.40 -.02 ,9"-- er-- H12.38 /12.46H 98000 x 152k •111 At 4:01 d Vol 4,212,000 0 12.32H F 12.58H L 12.32H Val 52.51311 384 HK Equity ' 99 Save As 96) ActioW1,7)-Rlitr9rTaBtri Line Chart 04/16/2013 04/16/2014 Last Price PI Line PI 13 Compare Moir. kiss --- Volume NM^ 10 3D 1M 6M YFD 1Y SY Max Daily V III i Security/Study .9 Event 0 + Track A Annotate --4 News -c?; Zoom 12.40 • Last Price 12.40 I "'14.0t) T High on 03/11/14 12.70 -0- Average 9.431 11.00 1. Low on 06/24/13 6.70 10.00 9.00 8.00 7.00 Volume 4.212M '-5011 L• SMAVG (15) 5.035M 4.212M Jun Sep I Dec I Mar 2013 2014 Gazprom 1 r Price Histo GAZP RX RUB 1 129.79 +2.04 11129.73/129.79M 2160x3610 • At 9:33 d Vol 77 560 910 C 128.01M F 129.95M L 126.25M Val 9.907B ante me cna 04/16/2013 04/16/2014 Last Pnce M Line Compare Mov. Ans l=== Volume "Mr ID 3D Dl 6M YTD lY SY Max Daily V SaturityiSt.cy "1 Event 0 ± Track Annotate A News Zoom 160 I • Last Price 129.79 150 T High on 10/16/13 158.00 -9- Average 134.2684 I Low on 06/24/13 107.17 140 129.79 120 110 200M 4• Volume 77.561M • SMAV9 (15) 67.92611 0 Jun Sep Dec Mar 2013 2014 Forwarded by Tazia Smittildbldbcom on 041/16/2014 09:16AM --- From: To: Dale: 04/1612014 05:55 AM Subject: European Oil [II EFTA01199071 For non advisory clients only In a "sector rotating" market in favour of value large cap names , Oil could be a relative bet to take as the sector is: 1) not expensive in terms of valuations 2) favoured by the upper trending of WTI and Brent prices 3) impacted by better capital discipline (capex) expectations Lucas Henmann, DB research on ROE trend is starting to be more optimistic as well: "Central to the deterioration in retum on capital at the integrated oils has been the balance sheet build of non-productive capital. At the super-majors alone, the addition over a decade of c.$250bn of work in progress and exploration assets has proven a material drag on sector profitability clipping an estimated 3-4% from reported RoCE. Yet, with 2013 registering the first decline in non-productive capital for a decade are there now signs that yet another source of retums drag across the oil sector may be at a tipping point? We think so with our analysis suggesting scope for a 10% uplift to reported returns over the next five years". Interestingly, today also the Lex Column in "Oil Change, please is mentioning the need to improve capital retums to fill the valuation gap (ENI the company mentioned in the article, also for the new management) Short term it could make sense to play the momentum via relative spread and with outperformance calls SXEP vs cyclical sector like chemical SX4P WTI: Track / Annotate News t Zoom ■ Last Price 104.64 I High on 04/16/14 104.82 4- Average 96.15 1. Low on 04/17/13 8534 ■ SHANG (SO) on Close 100.62 ■ %AVG (100) on Close 98.07 ■ %AVG (200) on Close 97.55 CLK4 COMB Comity 07/26/13 Open 95.94 Nigh 96.20 Low 95.68 Close 96.14 ileOpin bleat 0.14311 smAvG (u) ant Feb Mat 2014 SXEP vs SX4P (Chemicals) EFTA01199072  0.75 0.70 0.65 0.60 0.55 0.50 ).4714 0.45 2010 2011 2012 2013 2014 SXEP Index (STOXX Europe 600 011 & Gas Price EUR) Copyright 2014 Moomberg Finance LP. 16-Apr-2014 07:10:09 Kind regards, Pierluigi Amicarella Pierluigi Amicarella Deutsche Bank (Suisse) SA K.v Client Partner The proposed ideas are being delivered to you by the DBS Key Client Partners ("KCP") EMEA Switzerland desk on your request lor discussion purposes only and strictly on a non advisory basis. The proposed ideas do not create any legalty binding obligation on the part of Deutsche Bank AG and / or its affiliales ("DB"). These ideas are tor the consideration of the intended recipients of this mail only. NOTE: The KCP EMEA Switzerland desk does not provide investment advice. All intended recipients are sophisticated. qualified investors within the meaning of Wie Swiss Collective Investment Schemes Act of June 23. 2006 (CISA) and MIFID professionals who understand the strategy. characteristics and tiers associated with the ideas proposed herein and will be able to evaluate it independently. The products mentioned in Ibis presentation may not be registered with the Swiss Financial Market Supervisory Authority (FINMA). and theretore. not supervised by the FINMA. As a result. you cannot claim any protection tor unregistered products under the CISA. Na assurance can be given that the objectives of the mentioned products/services will be achieved. Moreover. a decision to invest in the mentioned products may have accounting. tax. legal and other implications. Therefore. you should discuss and review the content of this document and the offering documentation of the mentioned products with your own advisors andlor counsel. and conduct your own inves0gation to independently determine the suitability and consequences of such investments on your own financial circumstances prior to any decision. This document is confidential and personal to you and is being presented for informational and discussion purposes only. Any reproduction ancVor redistribution thereof. in whole or in part. and any disclosure of its content without our consent is strictly lorbidden. All trades on proposed ideas shall be subject to the relevant infernal approvals prior to execution. PanitrwirrPeremet. Diese E-Mail enthält vertrauliche und/oder rechtlich geschützte Informationen. Wenn Sie nicht der richtige Adressat sind oder diese E-Mail irrtümlich erhalten haben, informieren Sie bitte sofort den EFTA01199073 Absender and vemichten Sie diese Mail. Das unerlaubte Kopieren sowie die unbefugte Weitergabe dieser Mail ist nicht gestattet. This e-mail may contain confidential and/or privileged information. If you are not the intended recipient (or have received this e-mail in error) please notify the sender immediately and destroy this e-mail. Any unauthorized copying, disclosure or distribution of the material in this e-mail is strictly forbidden. Tazia Smith Director I Key Client Partners - US DB Securities Inc Deutsche Asset & Wealth Management Pan-inctuPgiffron, This communication may contain confidential and/or privileged information. If you are not the intended recipient (or have received this communication in error) please notify the sender immediately and destroy this communication. Any unauthorized copying, disclosure or distribution of the material in this communication is strictly forbidden. Deutsche Bank does not render legal or tax advice, and the information contained in this communication should not be regarded as such. EFTA01199074