Canadian Research at a Glance

EQUITY RESEARCH
CANADIAN RESEARCH AT A GLANCE
April 2, 2015
Price Target Revisions
! Argent Energy Trust
Summary
Q4/14 – Lowering price target on distribution cut
Summary
Maricunga Mine temporarily suspended due to heavy rain in Northern Chile
Summary
If Teck's long-term outlook is right, we're underestimating WTE's value
Summary
Laying out the story south of the border
! International E&P April Prospects
! Q2/15 Global Mining Best Ideas
Summary
Easter Break For Egg-zausted Investors
Summary
Upgrading Precious Metals & Uranium, Downgrading Bulks
!
! The Weekly Haul
Summary
PMO; FOGL; DETNOR; BNK
Summary
Airfreight & Surface Transportation
Summary
Global - $US
Summary
March 2015
Summary
Global - $CDN
Summary
Global - RoR
First Glance Notes
! Kinross Gold Corporation
! Westshore Terminals
Company Comments
! Fortis Inc.
Industry Comments
Portfolio
RBC International E&P daily
Quantitative Research
! Benchmarks
! Benchmarks
! Benchmarks
! Benchmarks
Technical Research
! A Non-Random Walk Through Global Summary
Equity Markets to Start Q2
Priced as of prior day's market close, EST (unless otherwise noted).
For Required Non-U.S. Analyst and Conflicts Disclosures, see Page 9.
EQUITY RESEARCH
U.S. RESEARCH AT A GLANCE
April 2, 2015
Price Target Revisions
! Home Bancshares Inc.
! SAFRAN SA
Summary
Accretive acquisition: new LPO brings new risks to think about, but a nice addition
Summary
Aftermarket upside ahead
Summary
Maricunga Mine temporarily suspended due to heavy rain in Northern Chile
Summary
Follow-Up Post Our Conversations With Management
Summary
Hosted management meeting higlights
Summary
Thoughts following management meetings
Summary
Lowering near-term estimates on Canadian consolidation, but profit opportunities improve
Summary
Yeah you right! Analyst day highlights from New Orleans
Summary
FQ3/15 Preview: Reducing estimates on greater FX pressures
Summary
Our recommendations for needed change at IHS
Summary
More Insight into "SPNE" Spin-Off Post Form 10 Filing
Summary
We applaud MU's decision to build inventory in seasonally weaker quarters
First Glance Notes
! Kinross Gold Corporation
! NuVasive Inc.
! Oshkosh Corporation
Company Comments
! Autodesk, Inc.
! Best Buy Co., Inc.
! EnLink Midstream, LP
! Global Payments Inc.
! IHS Inc.
! Integra LifeSciences Holdings
! Micron Technology, Inc.
Industry Comments
! April Hotel Concierge: Core indicators Summary
!
soften but still suggest demand
growth
Autos: Bounce Back to 17.2mm
March 2015 SAAR
International E&P April Prospects
Summary
Summary
!
! IT Hardware: Impact from HTCH Miss Summary
Easter Break For Egg-zausted Investors
!
! Q2/15 Global Mining Best Ideas
Aftermarket Waxing
for STX and WDC. Bad PC Data Points
Sustain
Mile High Monthly
Summary
Portfolio
RBC European Industrials Daily
!
! RBC International E&P daily
! The Weekly Haul
! U.S. Power & Utilities: Fate of PJM's
Summary
Upgrading Precious Metals & Uranium, Downgrading Bulks
Summary
PMIs confirm momentum better in Europe than US
Summary
PMO; FOGL; DETNOR; BNK
Summary
Airfreight & Surface Transportation
Summary
Potential moderate modifications do not change positive outlook
CP Construct Left Hanging
Technical Research
! A Non-Random Walk Through Global Summary
Equity Markets to Start Q2
2
EQUITY RESEARCH
UK & European Research at a Glance
April 2, 2015
Initiations
! Fusionex International Plc
Summary
Initiation: Democratizing big data
Summary
Aftermarket upside ahead
Summary
Ups and downs
Summary
Capital Markets Scorecard Q1 15
Summary
Easter Break For Egg-zausted Investors
Summary
Aftermarket Waxing
Summary
Upgrading Precious Metals & Uranium, Downgrading Bulks
Price Target Revisions
! SAFRAN SA
Company Comments
! FirstGroup PLC
Industry Comments
! Global Investment Banks
! International E&P April Prospects
! Mile High Monthly
! Q2/15 Global Mining Best Ideas
Portfolio
Find our Research at:
RBC Insight (www.rbcinsight.com): RBC's global research destination on the web. Contact your RBC Capital Markets' sales representative to
access our global research site, or use our iPad App "RBC Research"
Thomson Reuters (www.thomsononeanalytics.com)
Bloomberg (RBCR GO)
SNL Financial (www.snl.com)
FactSet (www.factset.com)
3
Price Target Revisions
Argent Energy Trust(TSX: AET.UN; 0.31)
Shailender Randhawa, CFA (Analyst)
(403) 299-6576; [email protected]
Keith Mackey, CFA (Associate)
403 299 6958; [email protected]
52 WEEKS
14MAR14 - 06MAR15
5.00
4.00
3.00
Rating:
Underperform
Risk Qualifier: Speculative Risk
Price Target: 0.30 ▼ 0.50
Q4/14 – Lowering price target on distribution cut
Argent Energy Trust delivered in-line Q4/14 financial results on pre-released
volumes. We view the suspension of Argent's monthly distribution as necessary
and expect the units to trade on pure option value from here as management
targets debt reduction via accretive asset sales.
2.00
1.00
7500
6000
4500
3000
1500
M
A
M
J
Close
J
2014
A
S
O
N
D
J
2015
F
M
Rel. S&P/TSX COMPOSITE INDEXMA 40 weeks
Total (boe/d) Prev.
5,591
6,641
5,000↓
6,000
3,800↓
5,500
2013A
2014A
2015E
2016E
All values in CAD unless otherwise noted.
• In-line Q4/14 financials. Argent's Q4/14 production of 6,528 boe/d (65% liquids)
was pre-released. CFPU of $0.17 matched our estimate with the following
variances: $6.13/boe higher realized pricing and hedging gains offset by 21%
higher unit opex and overhead (G&A and Interest) expense. Argent's revised
5,000 boe/d (68–70% liquids) 2015 volume target appears reasonable and should
generate circa $19.7 million of cash flow from operations prior to hedges and
approximately $14.2 million in interest commitments for the bank line and
outstanding convertible debentures. We peg the in-the-money value of Argent's
2015 hedges at $36.7 million at RBC's price deck. Accordingly, we calculate a
simple cash interest coverage ratio of 4.0x based on our projections prior to
Argent's US$12 million capital budget.
• Valuation reflects pure option on accretive exit. At current levels, Argent is
trading at a 2015E debt-adjusted cash flow multiple of 9.8x (vs. oil-weighted
peers at 9.2x) and a P/NAV multiple of 0.1x (vs. peers at 0.6x).
• Maintaining Underperform, Speculative Risk rating and lowering price target to
$0.30 from $0.50. Our 12-month price target reflects a 0.1x multiple (previously
0.2x) of our base NAV of $3.25/unit, which assumes a US$ 89/bbl long-term WTI
price.
First Glance Notes
Kinross Gold Corporation(NYSE: KGC; 2.36; TSX: K)
Stephen D. Walker (Analyst)
(416) 842-4120; [email protected]
Mark Mihaljevic (Associate)
(416) 842-3804; [email protected]
52 WEEKS
Rating:
Maricunga Mine temporarily suspended due to heavy rain in Northern Chile
14MAR14 - 06MAR15
5.00
4.50
4.00
3.50
3.00
2.50
100000
80000
60000
40000
20000
M
A
M
Close
J
J
2014
A
S
O
N
Rel. S&P 500
Sector Perform
D
J
2015
F
MA 40 weeks
M
• We view the temporary suspension of KGC’s Maricunga mine in Chile as a slight
negative for the shares.
• Due to abnormally heavy rains and flooding in the region, mining and crushing
operations and the SART plant are temporarily closed, while the ADR plant
continues to produce gold from the heap leach using an on-site power generator.
The company noted that facilities at site have not sustained any damage.
• We expect the suspension to be temporary and maintain our 2015 production
estimate of 239Koz at total cash costs of $960/oz, or 9% of KGC’s total production.
• The suspension of Maricunga adds to the list of mines affected by the recent
heavy rains in the region, including Barrick (Zaldivar), Codelco (five copper
mines), Angofagasta (two copper mines), Lundin (Candelaria – restarted after a
one-day suspension) and Anglo American (Mantoverde).
All values in USD unless otherwise noted.
Walter Spracklin, CFA (Analyst)
(416) 842-7877; [email protected]
Derek Spronck (Analyst)
(416) 842-7833; derek.spr[email protected]
Westshore Terminals(TSX: WTE; 31.23)
Rating:
Outperform
If Teck's long-term outlook is right, we're underestimating WTE's value
Teck provides positive investor day outlook
4
52 WEEKS
14MAR14 - 06MAR15
36.00
34.00
32.00
• Teck held its investor day on March 31, with RBC's Base Metals team outlining
the key highlights in a research report published this morning (Link). We found
one component of their outlook very interesting from a Westshore perspective,
specifically: Teck sees potential to grow coal production from its current capacity
of 28Mt to 40Mt longer-term.
$3 to $4 potential valuation upside
30.00
900
600
300
M
A
M
J
Close
J
2014
A
S
O
N
D
J
2015
F
M
Rel. S&P/TSX COMPOSITE INDEXMA 40 weeks
All values in CAD unless otherwise noted.
• While we do not anticipate Westshore increasing future terminal throughput
beyond our current 36Mt annually out in 2019, we do see Westshore benefiting
from a mix perspective. Met coal commands ~40% higher terminal loading rates
(by our estimate) compared to that for thermal coal; and as such, any switch
to Teck coal from lower yielding thermal coal would provide for higher average
rates. Given Teck's guidance for 8Mt in potential production increases out of nonQuintette mines could be shipped through Westshore, If we add an additional
8Mt from Teck (displacing 8Mt in thermal coal) in our long-run estimates, we see
the potential for another $3 to $4 per share (or 10-15% upside) in valuation in
the WTE shares.
Teck operations remain cash positive
• RBC's Base Metals team notes that all of Teck’s coal operations are cash flow
positive at current coal prices after accounting for spending on sustaining capex
and deferred stripping. Accordingly, we continue to see the demand from Teck
and take-or-pay contract for WTE's terminal capacity as remaining robust despite
current depressed coal prices.
Company Comments
Fortis Inc.(TSX: FTS; 38.37)
Robert Kwan, CFA (Analyst)
(604) 257-7611; [email protected]
Kelsey Roste (Associate)
(604) 257-7383; [email protected]
42.00
Rating:
Price Target:
52 WEEKS
14MAR14 - 06MAR15
Outperform
44.00
Laying out the story south of the border
While the basic premise of the Investor Day in New York was to convey the story
to U.S. investors, we still came away from the event with a number of interesting
slides and updates. We believe that Fortis has a good story to tell involving below
average risk utility growth and an ability to manage regulatory processes better
than many utilities in North America.
40.00
38.00
36.00
34.00
32.00
12000
10000
8000
6000
4000
2000
M
A
M
J
Close
J
2014
A
S
O
N
D
J
2015
F
Rel. S&P/TSX COMPOSITE INDEXMA 40 weeks
EPS, Adj Diluted
2013A
1.64
2014A
1.80
2015E
2.06
2016E
2.22
P/AEPS
23.4x
21.3x
18.6x
17.3x
All values in CAD unless otherwise noted.
M
• Reiterating the core utility growth story. Fortis continues to expect the roughly
$9 billion capital plan from 2015-2019 to deliver average rate base growth
(including Waneta) of 6.5% on a compound annual basis with the potential for
the growth rate to rise to 7.5% CAGR if the two LNG-related projects in B.C. move
forward.
• Solid history of earning its allowed ROEs (and then some). Fortis provided a
history for each of its utilities comparing the allowed ROE to the achieved ROE.
As shown in the exhibit, Fortis has consistently earned its allowed ROE while
delivering upside in a number of years. The charts for each of Fortis' utilities is
shown in Exhibit 3 beginning on page 4 of this note.
• No update on the Properties strategic alternatives process. While the company
specifically addressed the review, it continues to target completing the review
process in Q2/15. Proceeds, if any, will be used to repay debt and bring the capital
structure back in line with the long-term target of 55% debt (currently 57%).
• Alberta GCOC impact in line with our initial thoughts. Although the Alberta
Utilities Commission reduced the allowed ROE to 8.3% (down from 8.75%) while
also reducing the equity component to 40% (down from 41%), Fortis does not
see a material impact on the business under the current PBR structure.
Industry Comments
Al Stanton (Analyst)
International E&P April Prospects
5
+44 131 222 3638; [email protected]
Easter Break For Egg-zausted Investors
Nathan Piper (Analyst)
+44 131 222 3649; [email protected]
• April’s Prospects bears the brunt of the companies' March FY14 results
presentations which, as a rule, included a more cautious outlook for activity
levels in 2015-H1/16. As a result we have trimmed our valuations of future
developments (deferred start-up dates, reduced probability of a development
commitment, etc.) and drilling targets (if a prospect did not warrant a name
check investors are unlikely to allocate the opportunity any value). Consequently
a number of Total NAVs have fallen, while Tangible NAVs have remained largely
unchanged.
• However, our updates also bear the impact of recent disappointing newsflow,
including year-end reserves downgrades, unrest in Yemen, a lack of progress on
oil sales from Kurdistan, etc. In this report, we have lowered our Target Prices
for DNO and Sterling Resources, to NOK17 (from NOK20) and C$0.25 (C$0.35),
respectively.
• We have also made revisions for recent re-financings – Genel’s $230m bond
issue and Tullow and Pacific Rubiales’ debt re-determinations, plus ongoing share
buyback campaigns.
• We have this month also included an initial assessment of Ophir’s enlarged
portfolio, following its all-share acquisition of Salamander; our revised Tangible
and Total NAV are 208p/share and 246p/share, respectively.
Haydn Rodgers, CA (Associate)
+44 131 222 4911; [email protected]
Victoria McCulloch, CA (Analyst)
+44 131 222 4909; [email protected]
Adam Naughton (Associate)
+441312223695; [email protected]
All values in USD unless otherwise noted.
Stephen D. Walker (Analyst)
(416) 842-4120; [email protected]
Q2/15 Global Mining Best Ideas Portfolio
Fraser Phillips, P.Eng. (Analyst)
(416) 842-7859; [email protected]
• For Q2/15, we recommend the following sector weightings: Fertilizers at
Overweight, Base Metals, Precious Metals, and Uranium at Market Weight, and
Bulk Commodities at Underweight.
• We are also updating our Global Mining Best Ideas portfolio with three additions
and three deletions. We have added Arcelor Mittal, Nyrstar, and Sandfire
Resources and have removed Labrador Iron Ore Royalty, PanAust and Rio Tinto.
• We expect Q2/15 to be mixed for mining equities. We expect Fertilizer equities
to continue to offer resource investors a relative safe haven and believe
fertilizer markets should remain relatively steady with balanced S&D for all three
nutrients. With improving leading economic indicators and favorable seasonality,
we believe the current rally in Base Metals could be extended, although we
expect the group as a whole to trade sideways in a volatile range. We are more
constructive on Precious Metals given expectations a Fed rate hike could occur
later in 2015 and Uranium as we see improving price support. We have grown
more cautious on Bulk Commodities amid ongoing growth in supply and slow
Chinese demand.
• Our Best Ideas portfolio finished up 3% in Q1/2015, outperforming our
benchmark, the MSCI World Metals and Mining Index, which was down 6% over
the period. In Q4/2014, the portfolio was down 7%, ahead of the benchmark
which was down 14%. Since inception on September 30, 2008, the RBC CM Global
Mining portfolio is up 12% (~2% CAGR), well ahead of our MSCI benchmark at
-34% (~-6% CAGR).
Dan Rollins, CFA (Analyst)
(416) 842-9893; [email protected]
Des Kilalea (Analyst)
+44 20 7653 4538; [email protected]
Chris Drew, CFA (Analyst)
+61 2 9033 3060; [email protected]
Timothy Huff (Analyst)
+44 20 7653 4866; [email protected]
Andrew D. Wong (Analyst)
(416) 842-7830; [email protected]
Sam Crittenden, P.Eng., CFA (Analyst)
(416) 842-7886; [email protected]
Paul Hissey (Analyst)
+61 3 8688 6512; [email protected]
All values in USD unless otherwise noted.
Upgrading Precious Metals & Uranium, Downgrading Bulks
Nathan Piper (Analyst)
+44 131 222 3649; [email protected]
RBC International E&P daily
Al Stanton (Analyst)
+44 131 222 3638; [email protected]
PMO.L/FOGL.L: Oil Discovery at Zebedee; International E&P April Prospects: Easter
Break For Egg-zausted Investors; DETNOR.OL: Secures bondholder approval for
amendments; BNK.TO: Well Control Operation
Haydn Rodgers, CA (Associate)
+44 131 222 4911; [email protected]
PMO; FOGL; DETNOR; BNK
Victoria McCulloch, CA (Analyst)
+44 131 222 4909; [email protected]
Adam Naughton (Associate)
+441312223695; [email protected]
All values in USD unless otherwise noted.
6
John Barnes (Analyst)
(804) 782-4020; [email protected]
The Weekly Haul
Mike Fountaine (Associate)
(804) 782-4013; [email protected]
• In this week's Feature Commentary, we discuss why we believe the truckload
carrier will begin to outperform relative to other names in our coverage universe.
• Takeaways from the news include only 20% of U.S. logistics space is institutional
grade; driver wage hikes could raise truckload pricing 12-18%; FMCSA rejects
petition to exempt $75,000 broker bond; recruiting drivers for Restart Study
proving difficult, DOT official says; Bill to expand STB authority approved;
measure backed by railroads, shippers; LA, Long Beach ports could be back to
normal sooner than mid-May; and box line reliability up in February.
• Key macro data points for the week ahead include MDI & OHD on Monday,
FOMC Minutes on Wednesday, Wholesale Inventories on Thursday, and Budget
Statement on Friday.
Todd Maiden (Associate)
(804) 782-4014; [email protected]
All values in USD unless otherwise noted.
Airfreight & Surface Transportation
Quantitative Research
Chad McAlpine, CFA (Analyst)
(416) 842-7869; [email protected]
Benchmarks
Bish Koziol (Associate)
(416) 842-7866; [email protected]
• At the end of each month, this report summarizes the mid to long-term
performance of the most commonly tracked Global benchmark indices.
Chad McAlpine, CFA (Analyst)
(416) 842-7869; [email protected]
Benchmarks
Bish Koziol (Associate)
(416) 842-7866; [email protected]
• At the end of each month, this report summarizes the mid to long-term
performance of the most commonly tracked North American benchmark indices.
• Also shown are periodic returns of the sectors and major industry groups of the
S&P/TSX Composite.
• RBC has created and maintains style-specific composite indices to help better
understand the relative performance of different investment strategies over
time.
Chad McAlpine, CFA (Analyst)
(416) 842-7869; [email protected]
Benchmarks
Bish Koziol (Associate)
(416) 842-7866; [email protected]
• At the end of each month, this report summarizes the mid to long-term
performance of the most commonly tracked Global benchmark indices.
Chad McAlpine, CFA (Analyst)
(416) 842-7869; [email protected]
Benchmarks
Bish Koziol (Associate)
(416) 842-7866; [email protected]
• At the end of each month, this report summarizes the mid to long-term
performance of the most commonly tracked Global benchmark indices.
Global - $US
March 2015
Global - $CDN
Global - RoR
Technical Research
Robert Sluymer, CFA (Analyst)
(212) 858-7066; [email protected]
Anna Drotman (Associate)
(212) 858-7065; [email protected]
A Non-Random Walk Through Global Equity Markets to Start Q2
• United States - Our 4 main Cycle trend barometers remain positive and have
yet to show divergences often associated with cycle tops. The recent 12-month
break-out by small-caps remains an encouraging Q1 development with relative
performance vs the S&P continuing to build positively. To become more cautious/
defensive, we would need to see the 6-month relative performance uptrend
show evidence of reversing. For now, we view the current uptrend as innocent
until proven guilty.
• Style and Sector Themes - Growth vs. Value: Uptrends intact, but pausing/
stalling intermediate-term. Healthcare: Leadership intact but pausing as Biotech
7
corrects – Too early to call Biotech a cycle peak. Technology: Pulling back as
Semis and Communication remain weak with Service and Software leading.
Discretionary: Leadership intact with Homebuilders emerging. Industrials: Rails
correcting, Aerospace and Services rebuilding leadership. Energy: Recovery
continues under long-term downtrends.
• Europe - Pause pending? DAX becoming overbought intermediate-term under
its 5+ year ‘trend channel’. Relative performance vs the S&P 500 in $US terms
remains unimpressive. Sectors: Similar to the US, Healthcare, Discretionary and
Technology lead but are advanced intermediate-term. Financials showing early
signs of improving. Industrials stronger in Europe than the US.
• Japan - Nikkei rallies through 2007 highs while USD/YEN consolidates
below similar level. Sectors: Healthcare leads, Discretionary, Technology AND
interestingly Staples emerging.
• Emerging Markets - Struggling to rally back above 5-year uptrend. Relative
performance vs the S&P 500 showing early evidence of reversing a 6-month
downtrend. Far-East and Asia remain leadership, Latin America and Europe/
Middle East remain lag. China rally continues but less ‘timely’, Hong Kong
poised to ‘break-out’ of a 4-year trading range, Korea challenging key 3-year
overhead resistance, Mexico range bound while Brazil remains in a longer-term
downtrend. Sectors: Healthcare and Technology lead, Discretionary accelerating
after 2014 pause.
8
Required disclosures
Non-U.S. analyst disclosure
Nathan Piper;Al Stanton;Haydn Rodgers;Victoria McCulloch;Adam Naughton;Stephen D. Walker;Mark Mihaljevic;Robert
Kwan;Kelsey Roste;Shailender Randhawa;Keith Mackey;Fraser Phillips;Dan Rollins;Des Kilalea;Chris Drew;Timothy Huff;Andrew
D. Wong;Sam Crittenden;Paul Hissey;Chad McAlpine;Bish Koziol;Walter Spracklin;Derek Spronck (i) are not registered/qualified
as research analysts with the NYSE and/or FINRA and (ii) may not be associated persons of the RBC Capital Markets, LLC and
therefore may not be subject to FINRA Rule 2711 and NYSE Rule 472 restrictions on communications with a subject company,
public appearances and trading securities held by a research analyst account.
Conflicts disclosures
This product constitutes a compendium report (covers six or more subject companies). As such, RBC Capital Markets chooses
to provide specific disclosures for the subject companies by reference. To access current disclosures for the subject companies,
clients should refer to https://www.rbccm.com/GLDisclosure/PublicWeb/DisclosureLookup.aspx?entityId=1 or send a request to
RBC CM Research Publishing, P.O. Box 50, 200 Bay Street, Royal Bank Plaza, 29th Floor, South Tower, Toronto, Ontario M5J 2W7.
Please note that current conflicts disclosures may differ from those as of the publication date on, and as set forth in, this report.
The analyst(s) responsible for preparing this research report received compensation that is based upon various factors, including
total revenues of the member companies of RBC Capital Markets and its affiliates, a portion of which are or have been generated
by investment banking activities of the member companies of RBC Capital Markets and its affiliates.
Distribution of ratings
For the purpose of ratings distributions, regulatory rules require member firms to assign ratings to one of three rating categories
- Buy, Hold/Neutral, or Sell - regardless of a firm's own rating categories. Although RBC Capital Markets' ratings of Top Pick(TP)/
Outperform (O), Sector Perform (SP), and Underperform (U) most closely correspond to Buy, Hold/Neutral and Sell, respectively,
the meanings are not the same because our ratings are determined on a relative basis (as described below).
Distribution of ratings
RBC Capital Markets, Equity Research
As of 31-Mar-2015
Rating
BUY [Top Pick & Outperform]
HOLD [Sector Perform]
SELL [Underperform]
Count
909
713
115
Percent
52.33
41.05
6.62
Investment Banking
Serv./Past 12 Mos.
Count
Percent
280
30.80
125
17.53
5
4.35
Conflicts policy
RBC Capital Markets Policy for Managing Conflicts of Interest in Relation to Investment Research is available from us on request.
To access our current policy, clients should refer to
https://www.rbccm.com/global/file-414164.pdf
or send a request to RBC Capital Markets Research Publishing, P.O. Box 50, 200 Bay Street, Royal Bank Plaza, 29th Floor, South
Tower, Toronto, Ontario M5J 2W7. We reserve the right to amend or supplement this policy at any time.
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include short-term trade ideas in research reports and / or in SPARC. A short-term trade idea offers a short-term view on
9
how a security may trade, based on market and trading events, and the resulting trading opportunity that may be available. A
short-term trade idea may differ from the price targets and recommendations in our published research reports reflecting the
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All of the views expressed in this report accurately reflect the personal views of the responsible analyst(s) about any and all of
the subject securities or issuers. No part of the compensation of the responsible analyst(s) named herein is, or will be, directly or
indirectly, related to the specific recommendations or views expressed by the responsible analyst(s) in this report.
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RBC Capital Markets is the business name used by certain branches and subsidiaries of the Royal Bank of Canada, including RBC Dominion Securities Inc., RBC
Capital Markets, LLC, RBC Europe Limited, RBC Capital Markets (Hong Kong) Limited, Royal Bank of Canada, Hong Kong Branch and Royal Bank of Canada, Sydney
Branch. The information contained in this report has been compiled by RBC Capital Markets from sources believed to be reliable, but no representation or warranty,
express or implied, is made by Royal Bank of Canada, RBC Capital Markets, its affiliates or any other person as to its accuracy, completeness or correctness. All
opinions and estimates contained in this report constitute RBC Capital Markets' judgement as of the date of this report, are subject to change without notice and
are provided in good faith but without legal responsibility. Nothing in this report constitutes legal, accounting or tax advice or individually tailored investment
advice. This material is prepared for general circulation to clients and has been prepared without regard to the individual financial circumstances and objectives of
persons who receive it. The investments or services contained in this report may not be suitable for you and it is recommended that you consult an independent
investment advisor if you are in doubt about the suitability of such investments or services. This report is not an offer to sell or a solicitation of an offer to buy
any securities. Past performance is not a guide to future performance, future returns are not guaranteed, and a loss of original capital may occur. RBC Capital
Markets research analyst compensation is based in part on the overall profitability of RBC Capital Markets, which includes profits attributable to investment banking
revenues. Every province in Canada, state in the U.S., and most countries throughout the world have their own laws regulating the types of securities and other
investment products which may be offered to their residents, as well as the process for doing so. As a result, the securities discussed in this report may not be
eligible for sale in some jurisdictions. RBC Capital Markets may be restricted from publishing research reports, from time to time, due to regulatory restrictions and/
or internal compliance policies. If this is the case, the latest published research reports available to clients may not reflect recent material changes in the applicable
industry and/or applicable subject companies. RBC Capital Markets research reports are current only as of the date set forth on the research reports. This report is
not, and under no circumstances should be construed as, a solicitation to act as securities broker or dealer in any jurisdiction by any person or company that is not
legally permitted to carry on the business of a securities broker or dealer in that jurisdiction. To the full extent permitted by law neither RBC Capital Markets nor
any of its affiliates, nor any other person, accepts any liability whatsoever for any direct or consequential loss arising from any use of this report or the information
contained herein. No matter contained in this document may be reproduced or copied by any means without the prior consent of RBC Capital Markets.
Additional information is available on request.
To U.S. Residents:
This publication has been approved by RBC Capital Markets, LLC (member FINRA, NYSE, SIPC), which is a U.S. registered broker-dealer and which accepts
responsibility for this report and its dissemination in the United States. Any U.S. recipient of this report that is not a registered broker-dealer or a bank acting in
a broker or dealer capacity and that wishes further information regarding, or to effect any transaction in, any of the securities discussed in this report, should
contact and place orders with RBC Capital Markets, LLC.
To Canadian Residents:
This publication has been approved by RBC Dominion Securities Inc.(member IIROC). Any Canadian recipient of this report that is not a Designated Institution in
Ontario, an Accredited Investor in British Columbia or Alberta or a Sophisticated Purchaser in Quebec (or similar permitted purchaser in any other province) and
that wishes further information regarding, or to effect any transaction in, any of the securities discussed in this report should contact and place orders with RBC
Dominion Securities Inc., which, without in any way limiting the foregoing, accepts responsibility for this report and its dissemination in Canada.
To U.K. Residents:
This publication has been approved by RBC Europe Limited ('RBCEL') which is authorized by the Prudential Regulation Authority and regulated by the Financial
Conduct Authority ('FCA') and the Prudential Regulation Authority, in connection with its distribution in the United Kingdom. This material is not for general
distribution in the United Kingdom to retail clients, as defined under the rules of the FCA. However, targeted distribution may be made to selected retail clients of
RBC and its affiliates. RBCEL accepts responsibility for this report and its dissemination in the United Kingdom.
To Persons Receiving This Advice in Australia:
This material has been distributed in Australia by Royal Bank of Canada - Sydney Branch (ABN 86 076 940 880, AFSL No. 246521). This material has been prepared
for general circulation and does not take into account the objectives, financial situation or needs of any recipient. Accordingly, any recipient should, before acting on
this material, consider the appropriateness of this material having regard to their objectives, financial situation and needs. If this material relates to the acquisition
or possible acquisition of a particular financial product, a recipient in Australia should obtain any relevant disclosure document prepared in respect of that product
and consider that document before making any decision about whether to acquire the product. This research report is not for retail investors as defined in section
761G of the Corporations Act.
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To Hong Kong Residents:
This publication is distributed in Hong Kong by RBC Capital Markets (Hong Kong) Limited and Royal Bank of Canada, Hong Kong Branch (both entities which are
regulated by the Hong Kong Monetary Authority ('HKMA') and the Securities and Futures Commission ('SFC')). Financial Services provided to Australia: Financial
services may be provided in Australia in accordance with applicable law. Financial services provided by the Royal Bank of Canada, Hong Kong Branch are provided
pursuant to the Royal Bank of Canada's Australian Financial Services Licence ('AFSL') (No. 246521). RBC Capital Markets (Hong Kong) Limited is exempt from the
requirement to hold an AFSL under the Corporations Act 2001 in respect of the provision of such financial services. RBC Capital Markets (Hong Kong) Limited is
regulated by the HKMA and the SFC under the laws of Hong Kong, which differ from Australian laws.
To Singapore Residents:
This publication is distributed in Singapore by the Royal Bank of Canada, Singapore Branch, a registered entity granted offshore bank licence by the Monetary
Authority of Singapore. This material has been prepared for general circulation and does not take into account the objectives, financial situation, or needs of any
recipient. You are advised to seek independent advice from a financial adviser before purchasing any product. If you do not obtain independent advice, you should
consider whether the product is suitable for you. Past performance is not indicative of future performance. If you have any questions related to this publication,
please contact the Royal Bank of Canada, Singapore Branch. Royal Bank of Canada, Singapore Branch accepts responsibility for this report and its dissemination
in Singapore.
To Japanese Residents:
Unless otherwise exempted by Japanese law, this publication is distributed in Japan by or through RBC Capital Markets (Japan) Ltd., a registered type one financial
instruments firm and/or Royal Bank of Canada, Tokyo Branch, a licensed foreign bank.
.® Registered trademark of Royal Bank of Canada. RBC Capital Markets is a trademark of Royal Bank of Canada. Used under license.
Copyright © RBC Capital Markets, LLC 2015 - Member SIPC
Copyright © RBC Dominion Securities Inc. 2015 - Member CIPF
Copyright © RBC Europe Limited 2015
Copyright © Royal Bank of Canada 2015
All rights reserved
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