1. business and industrial

EQUITY RESEARCH
CANADIAN RESEARCH AT A GLANCE
March 20, 2015
Ratings Revisions
! Alaris Royalty Corp.
Summary
Upgrading to Outperform on recent share price weakness and following Q4/14 results
Summary
Covenant relief obtained
Summary
Despite challenging Q4/14 results; well positioned to leverage 2015 opportunities
Summary
FQ4/15E Preview: Expect (and need to see) a strong close to a challenging year
Summary
Marketing highlights: focus on execution to drive shareholder value
Summary
CRTC Releases Unbundling Framework
Summary
CRTC Releases Unbundling Framework
Summary
Q4/14 Results: Mix fluctuations may indicate increasing reimbursement pressures
Summary
Macraes site visit: demonstrated capability, still looking for new avenues
Summary
One of our best ideas; dividend increase expected next quarter
Summary
We prefer PWF over GWO/IGM. Maintain Outperform
Summary
Solid cash flow from a high quality portfolio
! Canadian Telecommunications
Summary
CRTC Releases Unbundling Framework for Television
!
! RBC International E&P Daily
! RBC Media Spotlight
! The Weekly Haul
Summary
Railroad news + Weekly carload data
Summary
GPX; DNO; TLW; PRE; ENQ; FPM
Summary
CRTC Releases Unbundling Framework for Television
Summary
Airfreight & Surface Transportation
Summary
Accelerating Ideas in Healthcare, Technology, Discretionary and Transports
First Glance Notes
! First Quantum Minerals Ltd.
! HNZ Group Inc.
Earnings Preview
! BRP Inc.
Company Comments
! Canam Group Inc.
! Corus Entertainment Inc.
! DHX Media Ltd.
! Medical Facilities Corporation
! OceanaGold Corp.
! Power Corporation of Canada
! Power Financial Corporation
! Silver Wheaton Corp.
Industry Comments
Services
RBC Compass
Technical Research
! Equity Rebound On Track With Small
and Mid-caps Leading
! - Action-Oriented Research
Priced as of prior day's market close, EST (unless otherwise noted).
For Required Non-U.S. Analyst and Conflicts Disclosures, see Page 13.
EQUITY RESEARCH
U.S. RESEARCH AT A GLANCE
March 20, 2015
Ratings Revisions
! Campus Crest Communities, Inc.
Summary
Current Valuation Appears Unsustainable Barring Sale with Headwinds Growing
Summary
Forging forwards
Summary
Best Risk/Reward
Summary
Challenging preconceptions
Summary
Solid Parkinson's data supports our call: thesis is shifting to 2nd new drug - OP
Summary
Making Progress at Pasadena
Summary
PWS Phase III data pushed out a bit; Obesity, PWS data expected YE15, 2Q16
Summary
Covenant relief obtained
Summary
Recent NDR suggests that the value creation machine keeps humming
Summary
Highlights From Meetings On The Road
Summary
Takeaways from Hosted Management Meetings
Summary
Jackup Rates Continue to Fall
Price Target Revisions
! Carillion plc
! Lennar Corporation
! Nestlé SA
! Prothena Corporation plc
! Rentech Nitrogen Partners LP
! Zafgen, Inc.
First Glance Notes
! First Quantum Minerals Ltd.
! Rouse Properties Inc.
! Vaalco Energy, Inc.
Company Comments
! Autoliv Inc.
! Rowan Companies plc
Industry Comments
Summary
! Ciccarelli's Check Points
Summary
! Move It Or Lose It?
Summary
! RBC European Industrials Daily
Summary
! RBC International E&P Daily
! The Healthcare REIT Pulse: Medicare Summary
Update On Zillow And The Online Real Estate Sector
SIE mini-warning; PHIA Lumileds sale closer
GPX; DNO; TLW; PRE; ENQ; FPM
Advantage not snuffing out SNFs yet
! The Weekly Haul
! Thoughts on tomorrow's FDA/NIH
Summary
!
Summary
Borrowing Base Redetermination Season Underway; Oil Hits New Multi-Year Lows
Summary
Accelerating Ideas in Healthcare, Technology, Discretionary and Transports
Summary
Q1 challenges but projects on track and guidance maintained
scientific workshop on dystrophin
quantification
US E&P Valuation Weekly
Airfreight & Surface Transportation
Summary
Technical Research
! Equity Rebound On Track With Small
and Mid-caps Leading
In-Depth Reports
! Acacia Mining Plc
2
EQUITY RESEARCH
UK & European Research at a Glance
March 20, 2015
Price Target Revisions
! Carillion plc
! Nestlé SA
Summary
Forging forwards
Summary
Challenging preconceptions
Summary
CAGE - North America momentum; focus on digital
Summary
Q1 challenges but projects on track and guidance maintained
Industry Comments
! RBC European consumer staples
In-Depth Reports
! Acacia Mining Plc
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
Ratings Revisions
Alaris Royalty Corp.(TSX: AD; 31.50)
Anthony Jin, CFA, P.Eng. (Analyst)
(416) 842-5338; [email protected]
52 WEEKS
14MAR14 - 06MAR15
36.00
Rating:
Price Target:
Outperform (prev: Sector Perform)
39.00
Upgrading to Outperform on recent share price weakness and following Q4/14
results
34.00
32.00
We upgrade Alaris Royalty shares to Outperform (from Sector Perform) and
recommend using recent share price weakness to accumulate shares. Shares
currently trade below L3Y historical median ranges and present attractive risk/
reward given the company’s expectations of a strong year of growth (i.e., new
investments) and positive developments in the portfolio.
30.00
28.00
1200
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
Revenue Prev.
52.7
69.3↓
70.1
82.5↓
83.7
113.8↓
114.7
2013A
2014A
2015E
2016E
Upgrade to Outperform - What’s changed? We note several changes in the
company and the stock over the last three months that in our view, positively shifts
risk/reward. More specifically:
• Management provided added clarity into KMH Cardiology’s revenue deferrals
from the company – “…We expect a resolution over the next few months.”
• A doubling of new investment pipeline which could see Alaris closing on more
than 3-4 new partners previously indicated this year. This would imply Alaris
may meet and/or exceed our forecasted run rate of $180MM/year of net new
investments.
• Strong +5.5% y/y organic growth of portfolio distributions in 2014.
• Share prices are down 14% over the past three months – significantly more than
we expected – and now trade at 17.6x 2015E P/E and 1.9x P/BV, below L3Y
historical median trading values of 19.8x and 2.01x, respectively.
Net/net, a call on valuation in consideration of the above: We believe recent share
price weakness provides an attractive entry point.
All values in CAD unless otherwise noted.
FQ4/14 results largely in line: Total investment income of $19.2MM, was slightly
below our estimate of $20.0MM. Partner income was $18.9MM, in line with
consensus of $19.0MM. NOI per share was $0.46, below our forecasted $0.48, but
above consensus of $0.43.
First Glance Notes
First Quantum Minerals Ltd.(TSX: FM; 13.57; LSE: FQM)
Fraser Phillips, P.Eng. (Analyst)
(416) 842-7859; [email protected]
Steve Bristo, CFA (Associate)
(416) 842-7826; [email protected]
Thomas Klein (Associate)
(416) 842-5339; [email protected]
Rating:
52 WEEKS
14MAR14 - 06MAR15
26.00
24.00
22.00
20.00
18.00
16.00
14.00
12.00
10.00
20000
15000
10000
5000
M
A
M
Close
J
J
2014
A
S
O
Sector Perform
Covenant relief obtained
N
D
J
2015
F
• Net debt/EBITDA covenant changed: First Quantum announced today that the
required threshold of syndicate banks have agreed to the changes requested by
the company to the net debt/EBITDA covenant under its $3.0 billion credit facility
and $350 million Kansanshi facility. The changes are effective at the end of the
period. With the tax change in Zambia and the drop in commodity prices, First
Quantum had indicated with its Q4/14 results that it would breach its net debt/
EBITDA covenant and had been seeking covenant relief from its lenders, which
it expected by March. First Quantum remains compliant with all existing finance
covenants currently and expects to remain compliant with the new covenants at
the next covenant test date of March 31, 2015.
M
Rel. S&P/TSX COMPOSITE INDEXMA 40 weeks
All market data in CAD; all financial data in USD; dividends paid in
CAD.
4
HNZ Group Inc.(TSX: HNZ.A; 20.95)
Derek Spronck (Analyst)
(416) 842-7833; [email protected]
Walter Spracklin, CFA (Analyst)
(416) 842-7877; [email protected]
52 WEEKS
Rating:
14MAR14 - 06MAR15
24.00
22.00
20.00
18.00
100
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.
Outperform
Despite challenging Q4/14 results; well positioned to leverage 2015
opportunities
• Q4/14 EBITDAR below on higher expenses. HNZ reported Q4/14 EBITDAR at
$1.8MM, well below our $9.6MM estimate. Revenues were in line at $42MM
(RBC at $42.5MM), with the variance the result of higher operating expenses.
While we had anticipated more aggressive cost reductions in relation to the
completion of the Afghanistan military contract, we do expect a period of higher
expense variance as HNZ balances new growth opportunities with softer industry
demand.
• Strong financial and operating position. While quarterly results came in below,
HNZ produced FCF of $2.4MM and $28.5MM in Q4/14 and 2014, respectively.
HNZ remains in a very strong financial position with no outstanding debt, $14MM
in cash, and positive working capital of $49MM.
• Looking over the valley. While management noted that HNZ is likely to face
headwinds in 2015, current market conditions were leading to increased tender
activity for offshore production support contracts. We will be looking for
additional colour on the call as to the potential market opportunity for HNZ, both
from a new contract and acquisition perspective.
• Assessment: Positive thesis intact. Should the HNZ shares pull back following
Q4/14 results, we recommend accumulation for longer-term investors. While
market headwinds have developed, operational discipline and low debt levels
position HNZ to effectively navigate current market conditions, while setting the
stage to achieve an inflection in EBITDAR growth in 2016.
• Conference call details: 11:00am (EST) at 1-855-859-2056.
Earnings Preview
BRP Inc.(TSX: DOO; 23.77)
Steve Arthur, CFA (Analyst)
(416) 842-7844; [email protected]
Ben Holton, CFA (Analyst)
(416) 842-9949; [email protected]
Joseph Spak, CFA (Analyst)
(212) 428-2364; [email protected]
Ritapa Ray (Associate)
212 266 4099; [email protected]
Rating:
Price Target:
Outperform
32.00
FQ4/15E Preview: Expect (and need to see) a strong close to a challenging year
52 WEEKS
14MAR14 - 06MAR15
30.00
28.00
BRP will report FQ4/15E on March 27th, closing out a challenging and very backend loaded year. We expect solid results, and anticipate that investor focus will shift
to next FY and the longer-term perspective. We continue to see solid brands and
product portfolio, and expect more consistent financial performance in F2016E. At
11.4x C2016E EPS, valuation remains compelling, in our view.
26.00
24.00
22.00
2000
1500
1000
500
M
A
M
J
Close
2014A
2015E
2016E
2017E
J
2014
A
S
O
N
D
J
2015
F
Rel. S&P/TSX COMPOSITE INDEXMA 40 weeks
Revenue
3,194.1
3,473.0
3,617.5
4,026.2
All values in CAD unless otherwise noted.
M
• Wrapping up a (very) back-end weighted year: Driven by several product
launches, we forecast FQ4 revenue of $1.02B (+12.6% Y/Y), in-line with consensus
$1.03B. On this, we anticipate Adj. EBITDA increases 72% to $182MM, and Adj.
EPS increases 96% to $0.80, roughly in-line with consensus of $180MM and
$0.79, respectively.
• Looking ahead – using ‘lessons learned’ in F2015 to offer initial F2016E
guidance: We may see some conservatism in F2016E outlook, increasing the
likelihood of achieving/beating guidance. We also believe it would be prudent to
provide a more detailed view on the expected quarterly progression of revenue
and earnings through the year – a key investor issue in F2015E.
• F2016E looks positive, with Y/Y increases largely coming in the first half of the
year: We forecast revenue increases 4.2% Y/Y to $3.47B, Adj. EBITDA increases
17.0% to $473MM, and Adj. EPS increases 21.3% to $1.78.
• On the surface, our forecasted increase in EBITDA seems a steep challenge.
However, about half of this increase reflects the avoidance of one-time F2015
factors.
5
• We also expect the seasonal pattern to normalize in F2016E, meaning the first
half of the year should see significantly higher revenue and earnings Y/Y.
• Attractive risk/reward despite F2015 challenges: Looking ahead, we expect
revenue to grow at a 5% CAGR F2015-2018E, driving an 11% EBITDA and 16%
EPS CAGR. With this, we view DOO’s trading multiples as attractive - 7.1x
C2016E EBITDA and 11.4x EPS, a significant discount to Polaris at 9.3x and 16.7x,
respectively.
Company Comments
Canam Group Inc.(TSX: CAM; 12.38)
Sara O'Brien, CFA, CA (Analyst)
(514) 878-7256; [email protected]
Juliane Szeto (Associate)
(416) 842-3806; [email protected]
15.00
Rating:
Price Target:
52 WEEKS
14MAR14 - 06MAR15
Outperform
16.00
Marketing highlights: focus on execution to drive shareholder value
We believe CAM will see margin expansion from operating leverage with greater
volumes from its increased backlog, driving double digit EPS growth in 2015, 2016.
We expect ROE to improve, and we expect investors will see solid upside to CAM
shares into 2015.
14.00
13.00
12.00
11.00
10.00
1600
1200
800
400
M
A
M
J
Close
J
2014
A
S
O
N
D
J
2015
F
M
Rel. S&P/TSX COMPOSITE INDEXMA 40 weeks
EPS, Ops Diluted Prev. P/E Ops Diluted
2013A
0.71
17.4x
2014A
0.70
17.7x
2015E
1.09↓
1.18
11.4x
2016E
1.36↓
1.48
9.1x
All values in CAD unless otherwise noted.
Corus Entertainment Inc.(TSX: CJR.B; 20.67)
Haran Posner (Analyst)
(416) 842-7832; [email protected]
Drew McReynolds, CFA, CA (Analyst)
(416) 842-3805; [email protected]
26.00
52 WEEKS
• Focus on greater $ per project vs. broad market share growth. Management
prefers to gain a larger project contribution with existing clients vs. bidding on
more 1 off projects to gain market share. This direction ties in with CAM focus
on improving margin, particularly in expansion cycle co is now seeing.
• Significant backlog to drive operating leverage, higher margin. CAM ended 2014
with backlog at $1B, at current USD FX this is $1.1B. Co sees ability to generate
~9% EBITDA on careful attention to project execution as well as stronger volumes
driving SG&A down as a % of sales. We have slightly adjusted our EBITDA margin
up in F16 closer to 9% from 8.5% previously).
• Balance sheet and FCF. CAM does have $69M in convertible debentures (at $12/
share) due in October 2015, management is evaluating refinancing in the case
of repayment but these are currently in the money and hence likely to convert.
We have adjusted our estimates to reflect CAM debentures now "in the money"
with the share dilution and debt repayment. We expect CAM to generate ~$25M
of FCF in F15 and co sees its current additional borrowing capacity of $140M as
sufficient to finance its working capital and growth needs.
Rating:
Price Target:
14MAR14 - 06MAR15
Sector Perform
22.00
CRTC Releases Unbundling Framework
The CRTC released its widely anticipated decision regarding consumer choice and
flexibility in the Canadian television industry.
25.00
24.00
23.00
22.00
21.00
2000
1500
1000
500
M
A
M
J
Close
J
2014
A
S
O
N
D
J
2015
F
Rel. S&P/TSX COMPOSITE INDEXMA 40 weeks
EPS, Ops Diluted
2013A
1.65
2014A
1.77
2015E
1.85
2016E
1.98
All values in CAD unless otherwise noted.
P/E
12.5x
11.7x
11.2x
10.4x
M
• Decisions largely in line with our expectations. At first glance, the new
framework is largely consistent with the proposals put forward by the CRTC
in its August 2014 working document and is consistent with what we had
expected. For investors, the key decisions are: (i) a low-cost maximum $25 "entrylevel" basic package (with no children’s services included); (ii) pick-and-pay and
small packages in addition to the "status quo"; (iii) the allowing of volume and
penetration-based rate cards with limitations; and (iv) the phasing out of access
rights and introducing a "1:1 ratio" for vertically integrated BDUs. For more detail,
please see our industry report titled “CRTC Releases Unbundling Framework for
Television”.
• Corus has significant exposure. We believe the earnings of the English-language,
specialty broadcasters are most exposed to this new framework reflecting the
likelihood of: (i) lower channel penetration including some channel failure; (ii)
6
the loss of affiliate fees, ratings, and advertising; and (iii) higher promotional
costs. Mitigating factors could include higher channel pricing, the resilience of
strong brands, any re-allocation of household entertainment budgets between
channels, higher advertising rates for popular channels, and a potential easing in
the rate of cord-cutting given greater packaging flexibility. Corus has the highest
exposure within our coverage, with television broadcasting accounting for ~68%
of total revenue in F2016E. Our analysis points to NAV downside as high as -20%
and -30% under our Impactful and Disruptive scenarios, respectively.
DHX Media Ltd.(TSX: DHX.B; 9.17)
Haran Posner (Analyst)
(416) 842-7832; [email protected]
Drew McReynolds, CFA, CA (Analyst)
(416) 842-3805; [email protected]
52 WEEKS
Rating:
Price Target:
14MAR14 - 06MAR15
10.00
Sector Perform
10.00
CRTC Releases Unbundling Framework
The CRTC released its widely anticipated decision regarding consumer choice and
flexibility in the Canadian television industry.
9.00
8.00
7.00
6.00
5.00
12000
10000
8000
6000
4000
2000
M
A
M
J
Close
J
2014
A
S
O
N
D
J
2015
F
M
Rel. S&P/TSX COMPOSITE INDEXMA 40 weeks
Revenue
97.3
116.1
244.4
291.3
2013A
2014A
2015E
2016E
All values in CAD unless otherwise noted.
Medical Facilities Corporation(TSX: DR; 17.09)
Douglas Miehm (Analyst)
(416) 842-7823; [email protected]
Fred Garcia (Associate)
(416) 842-7876; [email protected]
52 WEEKS
• Decisions largely in line with our expectations. At first glance, the new
framework is largely consistent with the proposals put forward by the CRTC
in its August 2014 working document and is consistent with what we had
expected. For investors, the key decisions are: (i) a low-cost maximum $25 "entrylevel" basic package (with no children’s services included); (ii) pick-and-pay and
small packages in addition to the "status quo"; (iii) the allowing of volume and
penetration-based rate cards with limitations; and (iv) the phasing out of access
rights and introducing a "1:1 ratio" for vertically integrated BDUs. For more detail,
please see our industry report titled “CRTC Releases Unbundling Framework for
Television”.
• Some headwinds but exposure is manageable. We believe the new framework
is directionally negative for content (71% of DHX revenue in F2016E including
20% production) given the likelihood of lower broadcaster and BDU funding.
However, mitigating factors include the opportunity to produce and distribute
content globally to a growing pool of OTT buyers. In our view, stronger headwinds
relate to television broadcasting (29% of DHX revenue in F2016E), reflecting the
likelihood of: (i) lower channel penetration; (ii) loss of affiliate fees, ratings, and
advertising; and (iii) higher promotional costs. Mitigating factors could include
higher channel pricing, the resilience of strong brands, re-allocation of household
entertainment budgets between channels, and a potential easing of cord-cutting
given greater packaging flexibility.We see mid-to-high single-digit NAV downside
under our impactful and disruptive scenarios.
Rating:
Price Target:
14MAR14 - 06MAR15
20.00
Sector Perform
19.00
Q4/14 Results: Mix fluctuations may indicate increasing reimbursement
pressures
The Q4 results fell below expectations due to the normal fluctuations in payor/case
mix. Recall, Q3 was stronger than anticipated for the same reasons. That said, Q4
typically has the lowest proportion of low margin cases and may reflect increasing
reimbursement pressures. We have reduced our long term growth assumptions
modestly but believe new recruitment and savings initiatives could help to offset
these headwinds.
19.00
18.00
17.00
16.00
400
200
M
A
M
Close
2013A
2014E
2015E
J
J
2014
A
S
O
N
D
J
2015
F
Rel. S&P/TSX COMPOSITE INDEXMA 40 weeks
Revenue Prev.
309.2
311.8↓
314.0
314.8↓
320.3
M
• Revenues impacted by payor/case mix. MFC reported revenue of $87.6MM,
down 2.2% compared to $89.6MM last year. Revenues were below our $89.8MM
estimate and the consensus of $90.5MM (ThomsonONE: 4 analysts, range
$89.2-92.5MM). Payor and case mix shifts resulted in $1.6MM & $0.5MM
7
2016E
319.0
All market data in CAD; all financial data in USD; dividends paid in
CAD.
OceanaGold Corp.(ASX: OGC; 2.36; TSX: OGC)
Paul Hissey (Analyst)
+61 3 8688 6512; [email protected]
Cameron Klutke (Associate)
+61 3 8688 6551; [email protected]
52 WEEKS
reductions YoY. The company also saw a $1.3MM decline in e-health incentive
payments.
• EBITDA declined on mix as well. Total EBITDA was $30.5MM vs. $32.1MM
last year, our $31.5MM forecast and consensus of $32.6MM (ThomsonONE:
4 analysts, range $30.9-33.9MM). EBITDA ex-minority interests decreased to
$18.2MM (20.8% margin) from $18.5MM (20.6% margin) last year and was
ahead of our $17.2MM estimate. The aforementioned shifts in payor/case mix
negatively affected EBITDA.
• Distributable cash of C$12.9MM (C$0.41/sh) excluding FX. Distributable cash
ex-FX was C$12.9MM (C$0.41/sh) vs. our C$14.7MM estimate (C$0.47/sh) and
C$13.7MM (C$0.44/sh) last year. The payout ratio was 68.4% ex-FX for the
quarter vs. our 59.8% forecast and 64.2% last year.
• Attractive holding for yield-oriented investors. Given the stable cash flows,
cash reserves, and organic growth opportunities due to an aging population
and higher quality of care rankings relative to its peers, Medical Facilities,
in our opinion, remains an attractive alternative for yield (currently ~6.5%)
oriented investors. We are monitoring reimbursement headwinds carefully, but
the dividend appears secure considering the payout ratio was ~81% in 2014 and
the continued strength of the US dollar.
Rating:
Price Target:
14MAR14 - 06MAR15
3.50
Sector Perform
2.50
Macraes site visit: demonstrated capability, still looking for new avenues
A recent visit to OGC's NZ operations further reinforced our view of the company's
operating credentials, which we believe is a skill that could be applied to assets
currently outside of OGC's asset suite. We remain neutral on the stock given a) fair
valuation and b) a declining production outlook.
3.15
2.80
2.45
2.10
40000
30000
20000
10000
M
A
M
J
J
Close
2014
A
S
O
N
Rel. AUST ALL ORD.
D
J
2015
F
M
MA 40 weeks
A recent visit to OGC's NZ operations further reinforced our view of the company's
operating credentials, which we believe is a skill that could be applied to assets
currently outside of OGC's asset suite. We remain neutral on the stock given a) fair
valuation and b) a declining production outlook.
EPS, Adj Diluted Prev.
2014A
0.37
2015E
0.02
2016E
0.28
2017E
0.45↑
0.39
All values in AUD unless otherwise noted.
Power Corporation of Canada(TSX: POW; 33.08)
Geoffrey Kwan, CFA (Analyst)
(604) 257-7195; [email protected]
Charan Sanghera (Associate)
(604) 257-7657; [email protected]
52 WEEKS
Rating:
Price Target:
14MAR14 - 06MAR15
34.00
Outperform
39.00
One of our best ideas; dividend increase expected next quarter
Historically, during periods of macro uncertainty, POW and PWF’s shares typically
were viewed as defensive within Financials. Given increasing macro uncertainty
coupled with the wider-than-historical discount to NAV, we believe POW’s shares
are likely to Outperform over the next year. POW is also likely to announce a
dividend increase in the coming months, which could be incrementally positive for
the stock.
32.00
30.00
28.00
7500
6000
4500
3000
1500
M
A
M
J
Close
EPS, Ops Basic
J
2014
A
S
O
N
D
J
2015
F
Rel. S&P/TSX COMPOSITE INDEXMA 40 weeks
Prev.
M
• Power Corporation reported Q4/14 operating EPS of $0.74, a penny above our
$0.73 our forecast. Relative to our forecast, lower than forecast earnings from
PWF were more than offset by a better than expected contribution to earnings
at the POW corporate level.
8
2013A
2014A
2015E
2016E
2.08
2.69↑
2.71
2.95↓
• Maintaining 12-month target of $39/share and Outperform rating. We believe
that increasing macro uncertainty and POW/PWF’s shares historically being
viewed as defensive within Financials is likely to drive the discount to narrow,
particularly given other defensive and/or high U.S. exposure stocks within our
coverage have experienced significant share price appreciation over recent
months.
• We expect a 7% dividend increase when POW reports Q1/15 in May (to $1.24/
share annualized).
• POW is our favourite name in the Power Complex and we prefer POW over PWF
(PWF is also Outperform rated) due to a higher expected total return. We also
view POW and PWF as the better way to gain exposure to GWO and IGM (vs.
owning GWO and IGM separately).
2.67
2.97
All values in CAD unless otherwise noted.
Power Financial Corporation(TSX: PWF; 37.25)
Geoffrey Kwan, CFA (Analyst)
(604) 257-7195; [email protected]
Charan Sanghera (Associate)
(604) 257-7657; [email protected]
52 WEEKS
Rating:
Price Target:
14MAR14 - 06MAR15
38.00
We prefer PWF over GWO/IGM. Maintain Outperform
Historically, during periods of macro uncertainty, PWF’s shares typically were
viewed as defensive within Financials. We believe PWF’s shares are likely to
Outperform over the next year given increasing macro uncertainty coupled with
the wider-than-historical discount to NAV. PWF also announced a 6.4% dividend
increase which we believe is incrementally positive for the shares.
36.00
34.00
32.00
3000
2000
1000
M
A
M
Close
2013A
2014A
2015E
2016E
Outperform
42.00
J
J
2014
A
S
O
N
D
J
2015
F
Rel. S&P/TSX COMPOSITE INDEXMA 40 weeks
EPS, Ops Basic Prev.
2.40
2.96↓
2.99
3.09↓
3.15
3.36↓
3.41
All values in CAD unless otherwise noted.
Dan Rollins, CFA (Analyst)
(416) 842-9893; [email protected]
Mark Mihaljevic (Associate)
(416) 842-3804; [email protected]
M
• PWF reported Q4/14 operating EPS of $0.74, a bit below our $0.77 forecast.
The variance to our forecast primarily reflects a lower-than-forecast earnings
contribution from Pargesa.
• 6.4% dividend increase incrementally positive for PWF. PWF’s quarterly
dividend will be increased from $0.35/share to $0.3725/share ($1.49/share
annualized), payable on May 1, 2015 to shareholders of record on March 31,
2015.
• Maintaining 12-month target of $42/share and Outperform rating. PWF’s
shares trade at a 13.6% discount to NAV, significantly wider than the 9.4%
long-term average. Our target reflects a 3.7% discount to NAV as we believe
that increasing macro uncertainty and PWF’s shares historically being viewed as
defensive within Financials are likely to drive the discount to narrow, particularly
given that other defensive and/or high U.S. exposure stocks within our coverage
have experienced significant share price appreciation over recent months.
• We prefer POW over PWF (POW is also Outperform rated) due to a
higher expected total return with essentially the same underlying investment
exposure (PWF drives 84% of POW's gross NAV). We also view POW and PWF
as the better way to gain exposure to GWO and IGM (vs. owning GWO and IGM
separately).
Silver Wheaton Corp.(NYSE: SLW; 19.01; TSX: SLW)
Rating:
Price Target:
Outperform
30.00
Solid cash flow from a high quality portfolio
Silver Wheaton is well positioned to provide investors with solid cash flow
given a portfolio backed by low cost and relatively long life assets. Although the
company's share price has come under pressure on the back of the recent equity
offering and Salobo deal, we believe the pull-back provides investors with an
attractive entry point.
Solid cash flow backed by portfolio of low cost, long life assets
• With cornerstone streams on San Dimas, Penasquito and Salobo, Silver
Wheaton's cash flow is backed by a portfolio of high-quality operations with long
9
52 WEEKS
14MAR14 - 06MAR15
26.00
24.00
mine lives. As outlined by Silver Wheaton, over 85% of revenue currently comes
from operations in the 1st half of their respective industry cost curves.
Attractive near-term growth profile
22.00
20.00
18.00
30000
20000
10000
M
A
M
Close
J
J
2014
A
S
O
N
Rel. S&P 500
EPS, Adj Diluted Prev.
2014A
0.74↑
0.72
2015E
0.61↓
0.63
2016E
0.87↓
0.89
2017E
1.00
D
J
2015
F
MA 40 weeks
P/E
25.6x
31.1x
21.9x
19.1x
All values in USD unless otherwise noted.
M
• Silver equivalent sales are forecast to increase to 43.5 Moz in 2017 from 32.9 Moz
in 2014, implying a 3-year per share CAGR of 6%. Over this period, all-in costs
(including interest payments) are expected to average $5.74/oz implying an allin margin of ~65% based on spot metal prices.
• Growth is expected to be driven by the start-up of Constancia, ongoing rampup of Salobo as well as higher output at San Dimas and Penaquito. Reduction of
the gold stream at 777 (due to satisfaction of Constancia completion test) and
expiry of the silver stream agreement at Cozamin are expected to partially offset
these gains.
Salobo deal enhances long-term optionality
• The acquisition of a second 25% gold stream on Vale's low cost Salobo copper
mine significantly enhances Silver Wheaton's underlying optionality given the
potential to participate in multiple price cycles over a 45+ year mine life, future
exploration success and possible operational enhancements. Although both
transactions were completed at similar implied spot IRRs (~4%), we believe the
second deal comes at a more opportunistic time in the current cycle.
Industry Comments
Drew McReynolds, CFA, CA (Analyst)
(416) 842-3805; [email protected]
Canadian Telecommunications Services
Jie He (Associate)
416 842 4123; [email protected]
• Most important decision of the 'Let's Talk TV' review largely in line with
expectations. The CRTC released its widely anticipated decision regarding
consumer choice and flexibility (i.e., channel unbundling) in the Canadian
television industry. From an investor perspective, this decision is the most
important one coming out of the ‘Let’s Talk TV’ review. At first glance, the new
framework is largely consistent with the proposals put forward by the CRTC in its
August 2014 working document and is consistent with what we had expected.
• For distributors, the earnings impact should be manageable. We believe the
earnings impact on the telecom operators should be manageable reflecting: (i)
an effective Internet hedge to mitigate the loss of television distribution EBITDA;
(ii) limited NAV exposure to television broadcasting, which in our view, is the
segment that will be most exposed within the current television ecosystem; and
(iii) an existing unbundled television regime for Quebec-based operators.
• Multiple compression: An illustrative scenario analysis. Our analysis examines
four scenarios – benign, mild, impactful and disruptive – with each scenario
characterizing the magnitude of the potential impact. Shaw is the only company
among the telecom operators where we could see a material high-single digit
NAV impact but only under the disruptive scenario.
Haran Posner (Analyst)
(416) 842-7832; [email protected]
All values in CAD unless otherwise noted.
CRTC Releases Unbundling Framework for Television
Walter Spracklin, CFA (Analyst)
(416) 842-7877; [email protected]
RBC Compass
John Barnes (Analyst)
(804) 782-4020; [email protected]
• Coal and energy-related volumes weigh on weekly carload growth. Total freight
volumes transported by the Class 1 railroads increased +1%Y/Y in the week
ending March 14th as continued strong volume gains by CNR and CP were
tempered by flat carloads in the U.S. From a commodity perspective, singledigit volume gains across most segments was offset by a -5%Y/Y decline in coal
traffic and an -8%Y/Y drop in both petroleum products and non-metallic minerals
shipments.
• Operating statistics hold steady. Average train velocity reported by the Class 1
railroads (excluding CP) declined -1%W/W to 22.7Mph with all carriers reporting
flat or lower train speeds compared to Week 9. Average terminal dwell for this
group improved modestly (2%W/W) to 25.7hrs with all rails (excluding UNP)
posting a sequential improvement in dwell time.
Mike Fountaine (Associate)
(804) 782-4013; [email protected]
Erin Lytollis, CFA (Associate)
(416) 842-7862; [email protected]
All values in CAD unless otherwise noted.
Railroad news + Weekly carload data
10
Victoria McCulloch, CA (Analyst)
+44 131 222 4909; [email protected]
RBC International E&P Daily
Nathan Piper (Analyst)
+44 131 222 3649; [email protected]
GPX.L: Outlines Commitments and 2015 Funding Requirements; opened down
13%; DNO.OL: YE14 Reserves in line; opened up 2%; TLW.L: Management Getting
Back On The Front Foot; opened up 3%; PRE.TO: Dry hole at Kangaroo West-1 dry;
ENQ.L: Director shareholding; Week Ahead
Haydn Rodgers, CA (Associate)
+44 131 222 4911; [email protected]
GPX; DNO; TLW; PRE; ENQ; FPM
Al Stanton (Analyst)
+44 131 222 3638; [email protected]
Adam Naughton (Associate)
+441312223695; [email protected]
All values in USD unless otherwise noted.
Haran Posner (Analyst)
(416) 842-7832; [email protected]
RBC Media Spotlight
Drew McReynolds, CFA, CA (Analyst)
(416) 842-3805; [email protected]
• Most important decision of the 'Let's Talk TV' review largely in line with
expectations. The CRTC released its widely anticipated decision regarding
consumer choice and flexibility (i.e., channel unbundling) in the Canadian
television industry. From an investor perspective, this decision is the most
important coming out of the ‘Let’s Talk TV’ review. At first glance, the new
framework is largely consistent with the proposals put forward by the CRTC in its
August 2014 working document and is consistent with what we had expected.
• Broadcasters are most exposed, particularly specialty. We believe the earnings
of the English-language, specialty broadcasters are most exposed within the
current television ecosystem to this new framework reflecting the likelihood
of: (i) lower channel penetration including some channel failure; (ii) the loss of
affiliate fees, ratings, and advertising; and (iii) higher promotional costs.Corus
has the greatest exposure among the publicly traded broadcasters with television
broadcasting accounting for 75% of enterprise value, followed by TVA Group
(49%) and DHX (18%).
• Multiple compression: An illustrative scenario analysis. Our analysis examines
four scenarios – benign, mild, impactful and disruptive – with each scenario
characterizing the magnitude of the potential impact. Corus faces the highest
risk of material NAV impact. DHX could see high-single digit NAV erosion but only
under the disruptive scenario. Finally, we believe the impact for TVA should be
modest given existing channel flexibility in the Quebec market.
Jie He (Associate)
416 842 4123; [email protected]
All values in CAD unless otherwise noted.
CRTC Releases Unbundling Framework for Television
John Barnes (Analyst)
(804) 782-4020; [email protected]
The Weekly Haul
Mike Fountaine (Associate)
(804) 782-4013; [email protected]
• In this week's Featured Commentary, we discuss changing investor sentiment
regarding the US Class I railroads.
• Takeaways from the news include: shippers and BCOs to divert more cargo to
avoid West Coast ports; U.S., Canada agree on multimodal system for reverse
inspections; DHL Express expands Houston service for oil and gas industry; speed
limits may not stop fiery oil spills, rail chief says; West Coast intermodal volume
surge tests inland hubs; new program at port of LA to speed up cargo shipments;
and Asia-Europe spot rate hits 18-month low as slow season bites.
• Key macro data points for the week ahead include MDI & OHD on Monday, CPI
on Tuesday, Durable Goods on Wednesday, Jobless Claims on Thursday, and GDP
on Friday.
Todd Maiden (Associate)
(804) 782-4014; [email protected]
All values in USD unless otherwise noted.
Airfreight & Surface Transportation
Technical Research
Robert Sluymer, CFA (Analyst)
(212) 858-7066; [email protected]
Anna Drotman (Associate)
Equity Rebound On Track With Small and Mid-caps Leading
Accelerating Ideas in Healthcare, Technology, Discretionary and Transports
11
(212) 858-7065; [email protected]
• Equity recovery continues from oversold levels established last week with small
and mid-caps leading/breaking out. We continue to view the recent 12-month
breakout by the small-cap indexes as a bullish resolution to the macro headwinds
that overhung equities through 2014. Sentiments surveys vary widely, but the
recent decline in bullish sentiment could/should support further upside in
equities.
• Despite Wednesday’s Fed related sector ‘volatility’, we continue to see many
of the same group themes reaccelerating/emerging notably in the Healthcare,
Technology, Transports and select Discretionary sector. In contrast we view
rebounds in many of the Resource/Energy areas as counter-trend, multi-week,
oversold rebounds rather than the beginning of multi-month/quarter uptrends.
• IDEAS - (+) Healthcare – Leadership intact, accelerating with more Biotech
(REGN, AMGN, CELG, ALXN), Pharma (BMY, LLY, MYL, PRGO) and Hospitals (UHS,
LPNT) emerging/accelerating from 3-6+ month trading ranges WITH relative
performance leading. (+) Technology – Software (ACIW, CRM, CDNS, ANSS, FTNT,
ORCL), Internet (FB, AKAM), Data Processors (GPN, JKHY) and select Semis
related (ADI, SLAB) building leadership while PC related themes test next support.
• (+) Transports – Leadership accelerating – Airlines (JBLU leads DAL emerging),
Truckers emerging: ODFL, R, WERN, JBHT.
• (+) Discretionary – Accelerating ideas include NKE, UA, MAR, HOT, M, while GPS
is showing early signs of bottoming.
• (=) Bond Proxies – Rebound continues, notably REITs: AVB, AIV, BXP, SPG
• (-) Staples – Beverages remain in weak relative performance trends: KO, PEP. (-)
Chemicals/Fertilizers – Despite becoming ‘oversold’, relative performance trends
remain weak: ARG, PPG, FMC, MON
12
Required disclosures
Non-U.S. analyst disclosure
Paul Hissey;Cameron Klutke;Steve Arthur;Ben Holton;Anthony Jin;Derek Spronck;Walter Spracklin;Douglas Miehm;Fred
Garcia;Sara O'Brien;Juliane Szeto;Geoffrey Kwan;Charan Sanghera;Fraser Phillips;Steve Bristo;Thomas Klein;Dan Rollins;Mark
Mihaljevic;Erin Lytollis;Victoria McCulloch;Nathan Piper;Haydn Rodgers;Al Stanton;Adam Naughton;Haran Posner;Drew
McReynolds;Jie He (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-Dec-2014
Rating
BUY [Top Pick & Outperform]
HOLD [Sector Perform]
SELL [Underperform]
Count
897
686
112
Percent
52.92
40.47
6.61
Investment Banking
Serv./Past 12 Mos.
Count
Percent
290
32.33
137
19.97
6
5.36
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.
Dissemination of research and short-term trade ideas
RBC Capital Markets endeavors to make all reasonable efforts to provide research simultaneously to all eligible clients, having
regard to local time zones in overseas jurisdictions. RBC Capital Markets' equity research is posted to our proprietary website
to ensure eligible clients receive coverage initiations and changes in ratings, targets and opinions in a timely manner. Additional
distribution may be done by the sales personnel via email, fax, or other electronic means, or regular mail. Clients may also
receive our research via third party vendors. RBC Capital Markets also provides eligible clients with access to SPARC on the Firms
proprietary INSIGHT website, via email and via third-party vendors. SPARC contains market color and commentary regarding
subject companies on which the Firm currently provides equity research coverage. Research Analysts may, from time to time,
include short-term trade ideas in research reports and / or in SPARC. A short-term trade idea offers a short-term view on
13
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
research analyst's views of the longer-term (one year) prospects of the subject company, as a result of the differing time horizons,
methodologies and/or other factors. Thus, it is possible that a subject company's common equity that is considered a long-term
'Sector Perform' or even an 'Underperform' might present a short-term buying opportunity as a result of temporary selling pressure
in the market; conversely, a subject company's common equity rated a long-term 'Outperform' could be considered susceptible
to a short-term downward price correction. Short-term trade ideas are not ratings, nor are they part of any ratings system, and
the firm generally does not intend, nor undertakes any obligation, to maintain or update short-term trade ideas. Short-term trade
ideas may not be suitable for all investors and have not been tailored to individual investor circumstances and objectives, and
investors should make their own independent decisions regarding any securities or strategies discussed herein. Please contact
your investment advisor or institutional salesperson for more information regarding RBC Capital Markets' research.
Analyst certification
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.
Disclaimer
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.
14
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
15