Earning Release

Celestica Inc. (NYSE:CLS) 3Q 09 revenues and net performance were better than expected. Management guidance for 4Q 09 is in line with our previous estimates, which are near the mid-point of the guidance range. Hence, we maintain our current HOLD rating until we revalue the stock. We will reassess our target price and rating in our 3Q 09 update report. We no longer expect a significant currency impact over the medium term and hence revert to a 6-24 month investment horizon. Accordingly, we now expect a neutral currency impact over our investment horizon. In view of this and our fundamental outlook, we moderate our Canadian stock rating from a SELL to a HOLD. We will reassess our target price and rating in our 3Q 09 update report.

Southern Copper Corporation (NYSE:PCU) reported a decline in revenues and earnings in 3Q 09 led by lower average metal prices, partially offset by an increase in sales volumes across all product lines. The decline in top-line outpaced the decline in operating expenses, which put further pressure on bottom-line. Our fundamental outlook remains unchanged and we believe the company’s NYSE stock is overvalued, and therefore we maintain our 6-12 month SELL rating for the NYSE common stock. We will reassess our target price and rating in our next update report. The Peruvian stock trades in US dollars. As a result, we do not anticipate any currency impact over the coming 6-12 months. Based on our fundamental outlook, we maintain our SELL rating. We will reassess our target price and rating in our next update report.

News

Compania de Bebidas das Americas (NYSE:ABV) preferred stock has appreciated significantly since our previous company news alert dated, dated 04 September 2009, reflecting a reduction in country risk premium, upgradation of the company’s foreign currency issuer rating and broader market movement. Furthermore, we expect robust growth in Brazil beer volumes to drive full-year revenue growth over the next two years. In light of these factors and a positive outlook for Brazilian economy, although the target price does not support a HOLD, we reiterate the preferred stock a HOLD. We will reassess our target price and rating in our 3Q 09 update report. Given the current price and our anticipation of a negative currency impact on the ADR over our 6-24 months investment horizon, we downgrade the ADR from a HOLD to a SELL. We will reassess our target price and rating in our 3Q 09 update report.

Dr. Reddy Laboratories Limited (NYSE:RDY) recorded a significant y-o-y increase in revenues in 2Q 10, primarily due to strong revenue growth in the Global Generic segment. Although 1Q 10 performance was higher than expectations, loss of revenues from sumatriptan will hurt in the medium term. The strategic tie-up with global behemoth GlaxoSmithKline Inc. (Glaxo) to sell generics is expected to prove beneficial in the long term. Although the stock no longer supports our HOLD rating we reiterate our HOLD rating due to better-than-expected results. We will reassess the common stock rating for Dr. Reddy in our next update report. Although the current ADR price no longer supports our BUY rating, based on our fundamental outlook and anticipation of a significant positive currency impact on the ADR over our investment horizon, we reiterate our BUY rating for the ADR. We will reassess the ADR rating for Dr. Reddy in our next update report.

Yanzhou Coal Mining Company Limited (NYSE:YZC) has received approval from the Australian government for proceeding with its A$3.5 bn acquisition bid for Felix Resources Ltd (Felix). This represents an important step towards the completion of the acquisition. We maintain that the acquisition deal is beneficial for the company, given Felix’s high quality assets. However, given significant price appreciation since our last update report, we downgrade our rating on the common stock from a BUY to a HOLD The Hong Kong dollar is currently pegged to the US dollar. Therefore, no currency impact is expected on the ADR over our 6-12 month investment horizon. Given current price levels, we downgrade our rating for the ADR from a BUY to a HOLD.

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