The 2014 All-Asia Research Team: Basic Materials, No. 2: Stephen Gorenstein, Shuai (Bruce) Wang & team

Stephen Gorenstein, Shuai (Bruce) Wang & team
Bank of America Merrill Lynch

First-place appearances: 4

Total appearances: 11

Team debut: 2000

Bank of America Merrill Lynch slips to second place after two years at the top of this list. Newcomers Stephen Gorenstein and Shuai (Bruce) Wang have taken over leadership from Yongtao Shi and Peter O’Connor. Clients applaud the researchers for arranging helpful trips to companies in this group, including “quite a few on-the-ground visits in China’s cement sector last year,” as one advocate reports. Asia’s basic materials shares slipped 1.9 percent in 2013, trailing the region’s broad market by 8.4 percentage points. As of late April they were down 2.3 percent further, year to date, while the broader market was nearly flat. “Looking forward,” says Wang, “the sector will face a number of headwinds, and as such we believe a more tactical trading strategy, rather than a structural position, will produce optimal results.” BofA Merrill’s 13 analysts work out of offices in Hong Kong, Manila, Melbourne, Shanghai, Singapore, Sydney and Tokyo, and among their preferred names is BHP Billiton, a diversified natural-resources provider dually headquartered in Australia and the U.K. “BHP is nearing completion of a balance-sheet derisking drive, which should see the company reward shareholders through a capital-management program or dividend increase for full-year 2014 results as of August,” he explains. In addition, “the stock is trading at about a 15 percent discount to our [net present value].” Their target price for the BHP Billiton, rated buy, is A$45.50; it closed at A$38.28 in late April.

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