< The 2016 All-Asia Research Team
Graham Cunningham & team
Citi
First-place appearances: 4
Total appearances: 16
Team debut: 2001
Graham Cunningham and his Citi crew rebound to third place after spending last year as a runner-up. The team consists of its leader and three colleagues in Hong Kong, plus one member each in Bangkok and Mumbai; together they monitor some 40 regional oil and gas companies. They are negative on upstream oil and gas players in emerging Asia but remain positive on chemicals downstream. For that subsector, “we believe Asian cracker utilization should remain high and margins elevated until 2017,” says Cunningham, 42. In January 2015 the analysts made a contrarian sell recommendation on PetroChina Co., the country’s largest oil and gas producer, slashing its target price from HK$7.65 to HK$6. Reform would likely disappoint the market, and consensus estimates were far too optimistic, they advised. In March, after the government announced a small cut to domestic natural-gas prices, Cunningham and his associates cautioned investors that prices remained much too high and could be cut again later in the year — which happened in November. In August and October they again warned of PetroChina’s high sensitivity to reduction in domestic gas prices and projected that earnings expectations remained much too optimistic. By late last month the stock had slumped 35.4 percent, to HK$5.61, lagging the regional sector by 22.7 percentage points. “Graham’s focus on fundamentals adds value on the rumors-driven Big Three oil names,” one money manager attests. A second fan lauds the researchers for “their local knowledge of a very global-driven sector, providing some unique angles.”