18 May 2011 Asia Equities Daily Focus Periodicalimg.jrjimg.cn/2011/05/20110518135217345.pdf · 18...

Asia Pan-Asia Strategy

18 May 2011

Asia Equities Daily Focus Today's research headlines Asian Edition

Deutsche Bank AG/Hong Kong

All prices are those current at the end of the previous trading session unless otherwise indicated. Prices are sourced from local exchanges via Reuters, Bloomberg and other vendors. Data is sourced from Deutsche Bank and subject companies. Deutsche Bank does and seeks to do business with companies covered in its research reports. Thus, investors should be aware that the firm may have a conflict of interest that could affect the objectivity of this report. Investors should consider this report as only a single factor in making their investment decision. DISCLOSURES AND ANALYST CERTIFICATIONS ARE LOCATED IN APPENDIX 1. MICA(P) 146/04/2011.

Periodical

Asian Index Closings EQUITIES Close 1D Chg %Chg

SHSZ300 3116.03 0.50 -0.39 HSCEI 12733.21 0.45 0.32 HSI 22901.08 -0.26 -0.58 TWSE 8884.09 -0.31 -0.99 KOSPI 2102.41 -0.08 2.51 FSSTI 3136.48 -0.86 -1.68 KLCI 1536.27 -0.29 1.14 SENSEX 18137.35 -1.13 -11.56 NIFTY 5438.95 -1.09 -11.34 SET 1084.96 -0.12 5.05 JCI 3799.23 -0.86 2.58 PCOMP 4261.60 -0.91 1.44 ASX200 4683.90 0.73 -1.29 FOREX (vs US$) Close 1D Chg YTD %Chg Rmb 6.51 0.03 1.55 HK$ 7.77 0.04 -0.01 NT$ 28.85 -0.14 1.57 Won 1088.50 0.25 3.45 S$ 1.25 0.36 2.98 M$ 3.05 -0.30 0.41 Rupee 45.16 -0.65 -1.00 Baht 30.31 -0.07 -0.82 Rupiah 8578.00 0.01 4.87 Peso 43.23 0.31 1.32 A$ 1.06 0.50 3.67

Source: Bloomberg Finance LP

Latest Commodity Prices COMMODITIES Close 1D %Chg YTD %Chg West Texas 97.03 -0.35 6.18 Brent 110.44 -0.31 17.12 CRB 336.48 -0.09 1.11 Copper 399.10 0.20 -10.10 Gold (Spot) 1481.15 -0.55 4.25 Alum. (LME) 2548.00 -0.78 3.16 Baltic Dry 1291.00 -1.15 -27.19

Source: Bloomberg Finance LP

DB CORPORATE ACCESS DB Access Asia Conference 2011 - Singapore 5/23 – 26

B Access Korea Small Cap Tech Corporate Day - SG 6/2, HK 6/3 DB Access Taiwan Conference 2011 - Taipei 11/7 - 8 DB Access Korea Conference 2011 - Seoul 11/10 - 11 DB Access Indonesia Conference 2011 - Jakarta 11/29 - 12/1

NEW: D

Research Team

Carissa Szeto Equity Focus (+852) 2203 6171 [email protected] Ching-Li Teo, CFA Equity Focus (+852) 2203 6045 [email protected]

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TOP STORIES Singapore property Unwinding excesses; value emerging Gregory Lui Page 5

Hopewell Holdings Limited (0054.HK),HKD23.70 Buy Price Target HKD28.00

Inflection point; initiating with Buy Michael Lee Page 6

AutoNavi (AMAP.OQ),USD17.50 Buy Price Target USD22.00

Navigation leader, internet upside; initiating at Buy Eva Leung Page 7

RECOMMENDATION CHANGES

State Bank of India (SBI.BO) INR2,413.60 Hold Price Target INR2,705.00

High provisions and low capital, D/G to Hold

Dipankar Choudhury Page 8

ESTIMATE & TARGET PRICE CHANGES

Dish TV India Ltd (DSTV.BO),INR68.55 Buy Price Target INR77.00

Business scale delivers operating leverage

Harrish ZaveriPage 9

Jubilant Foodworks (JUBI.BO),INR701.25 Buy Price Target INR880.00

Strong numbers, stable outlook; maintaining Buy

Harrish Zaveri0

STRATEGY/ECONOMICS

Asia Economics Daily SBV hikes again Michael Spencer Page 11

Global Commodities Daily Positioning for risk Adam

Sieminski Page 13

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18 May 2011 Strategy Asia Equities Daily Focus


ADDITIONAL RESEARCH DB CONFERENCE/CORPORATE DAY

China TMT Daily Smartphone behaviors; also 0700.HK, BIDU

Alan Hellawell III

Page 15 DB Access Asia Conference 2011 - Singapore 5/23 – 26 NEW: DB Access Korea Small Cap Tech Corporate Day - SG 6/2, HK 6/3 Consumer Administration of Sport issues the

‘12th Five-Year plan' Chen Feng

Page 16DB Access Taiwan Conference 2011 - Taipei 11/7 - 8 DB Access Korea Conference 2011 - Seoul 11/10 - 11 DB Access Indonesia Conference 2011 - Jakarta 11/29 - 2/1 1 Ctrip

(CTRP.OQ),USD46.36 Hold Price Target USD43.00

1Q first blush Alex Yao

Page 17 NDRs Indofood CBP Sukes Makmur (ICBP IJ) & PT Indofood PT Adaro Energy Tbk (ADRO IJ) - HK 5/23 LG Chem (051910 KS) - HK 5/23 - 24

Trina Solar (TSL.N) HKD24.79 Buy Price Target HKD33.70

Strong shipment but mediocre margin guidance for 2Q

Eric ChengPage 18 H TC Corporation (2498 TT) - SG 6/21 - 22, HK 6/23 - 24

DB ANALYST/SALES ROADSHOWS Semiconductor & Semiconductor Equipment

Asian foundry sector - A tougher game for tier-two players

Michael ChouPage 19

GS Holdings Corp (078930.KS),KRW84,700.00 Buy Price Target KRW108,000.00

Sky Hong: Global Freight FITT - PEK 5/18 - 19, SHA 5/20 NEW: BC Bae: Korean Technology - HK 5/26 - 27 GS Holdings reports strong 1Q11

earnings Peter Lee

Page 20

Hyundai Motor (005380.KS),KRW226,000.00 Buy Price Target KRW330,000.00

Jeehoon Park: Korea Banks - HK 5/30 - 31, SG 6/1 - 2 KC Kao & Kyle Su: TW Tech Hardware - SG 6/7 - 8, HK 6/9 - 10 KC Kao: Buy Selective PC Stocks: Neutralize on Smartphone - SG 6/21, HK 6/23 Recent correction offers a buying

opportunity Sanjeev Rana

Page 21 DB INTERNATIONAL PRODUCT ROADSHOWS

Tom Ernst: Cloud Computing & Software - KL 5/18, TPE 5/19, SG 5/23

NCsoft Corp (036570.KS),KRW271,000.00 Hold Price Target KRW285,000.00

It's all about next year; maintaining Hold

John Kim

Page 22

Woori FH (053000.KS) KRW13,350 Buy Price Target KRW19,000

Privatization roadmap announced once again

Jeehoon ParkPage 23

Visa Inc. (V US) - PEK 5/23, HK 5/24 L'Oreal (OR EP) - PEK 5/23, SHA 5/24 Kiwi Income Property Trust (KIP NZ) - HK 5/24 Erik Danemar: Metals & Mining - HK 5/24, SG 5/25 NEW: Starwood Hotels & Resorts Worldwide Inc (HOT US) - HK 5/25 Daimler AG (DAI GR) - HK 5/26 BM&F BOVESPA SA (BVMF3 BZ) - HK 5/26, PEK 5/27 Equinix, Inc (EQIX US) - HK 5/27 Far Eastern Shipping Co - SG 5/30, HK 5/31, SEL 6/2 - 3 Justin Yageman: Transportation & Shipping - SG 5/30, HK 5/31, PEK 6/2 SEL 6/3

Telecommunications Vodafone India 4QFY11: positive operating trends

Srinivas RaoPage 24

CP All (CPALL.BK),THB44.00 Buy Price Target THB46.00

Key takeaways from analyst meeting Chalinee Congmuang Page 25

Globe Telecom (GLO.PS),PHP860.00 Hold Price Target PHP900.00

Inching up Gio Dela-RosaPage 26

Vista Land & Lifescapes Inc (VLL.PS),PHP3.30 Buy Price Target PHP3.43

1Q11 core operations on track, outlook positive

Carl Sy

XS TRATAPLC (XTA LN) - SG 6/6, HK 6/7, PEK 6/9 PPG Industries (PPG US) - HK 6/21, SG 6/22 John Perry: Real Estate - HK 6/20, SG 6/21, PEK 6/22, SEL 6/23 RWE AG (RWE GR) - PEK 6/30, SG 7/1

Page 27

GLOBAL RESEARCH Toshiba (6502.T),¥437 Buy Price Target ¥570 Raising TP to ¥570; Earnings could

top FY3/12 guidance Takeo Miyamoto

Page 28

Takeda Pharmaceutical (4502.T) ¥3,785 Hold Price Target ¥3,300

Revising forecasts post FY3/11 results, cutting target price; Hold

Kenji MasuzoePage 29

The notes and reports contained in this Daily are all excerpts of previously published documents. Please refer to the published notes on our web site for details on risks, valuations and earnings changes

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DAILY REVISIONS: RATING CHANGES

Company Ticker Date New Previous

Allgreen Properties AGRN.SI 17-May ▲ Buy Hold

AutoNavi AMAP.OQ 17-May Buy NR

City Developments CTDM.SI 17-May ▲ Hold Sell

Hopewell Holdings Limited 0054.HK 17-May Buy NR

State Bank of India SBI.BO 17-May ▼ Hold Buy

Suntec REIT SUNT.SI 17-May ▼ Hold Buy

TARGET PRICE CHANGES

Company Ticker Date New Previous Chg (%)

Allgreen Properties [Buy] AGRN.SI 17-May ▲ 1.44 1.12 28.6Ascendas Real Estate [Buy] AEMN.SI 17-May ▼ 2.26 2.28 -0.9AutoNavi [Buy] AMAP.OQ 17-May 22.00 CapitaLand Ltd [Buy] CATL.SI 17-May ▼ 4.22 4.87 -13.3CapitaMalls Asia [Buy] CMAL.SI 17-May ▼ 2.24 2.55 -12.2Catcher Technology [Buy] 2474.TW 16-May ▲ 192.00 175.00 9.7China Minsheng Bank [Hold] 600016.SS 16-May ▼ 6.80 9.00 -24.4City Developments [Hold] CTDM.SI 17-May ▲ 12.22 10.67 14.5Dish TV India Ltd [Buy] DSTV.BO 17-May ▲ 77.00 71.00 8.5Hopewell Holdings Limited [Buy] 0054.HK 17-May 28.00 Jubilant Foodworks [Buy] JUBI.BO 17-May ▲ 880.00 810.00 8.6Keppel Land [Buy] KLAN.SI 17-May ▲ 5.30 5.08 4.3State Bank of India [Hold] SBI.BO 17-May ▼ 2,705.00 3,225.00 -16.1Suntec REIT [Hold] SUNT.SI 17-May ▼ 1.61 1.70 -5.3Trina Solar [Buy] TSL.N 17-May ▼ 33.70 36.40 -7.4Wing Tai Hldgs [Hold] WTHS.SI 17-May ▼ 1.70 1.81 -6.1

EPS REVISIONS

Company Ticker Date FY New Previous Chg (%)

Allgreen Properties [Buy] AGRN.SI 17-May Dec 11 ▲ 0.15 0.15 1.3 Dec 12 ▲ 0.14 0.14 0.2 Dec 13 ▲ 0.12 0.12 4.4Ascendas Real Estate [Buy] AEMN.SI 17-May Mar 13 ▼ 0.14 0.14 -0.8 Mar 14 ▼ 0.14 0.14 -1.2AutoNavi [Buy] AMAP.OQ 17-May Dec 10 0.14 Dec 11 0.19 Dec 12 0.26 Dec 13 0.34 Bank of Phil Islands [Hold] BPI.PS 17-May Dec 11 0.00 nm Dec 12 0.00 nm Dec 13 0.00 CMT [Hold] CMLT.SI 17-May Dec 13 ▼ 0.11 0.11 0.0CapitaCommercial Trust [Buy] CACT.SI 17-May Dec 11 ▼ 0.07 0.07 -3.1 Dec 12 ▼ 0.07 0.07 -7.2 Dec 13 ▼ 0.07 0.08 -7.4CapitaLand Ltd [Buy] CATL.SI 17-May Dec 11 ▼ 0.11 0.12 -7.8 Dec 12 ▼ 0.15 0.15 -3.1 Dec 13 ▼ 0.21 0.22 -4.2CapitaMalls Asia [Buy] CMAL.SI 17-May Dec 11 ▼ 0.06 0.07 -15.1 Dec 12 ▼ 0.07 0.07 -10.3 Dec 13 ▼ 0.08 0.08 -4.2Catcher Technology [Buy] 2474.TW 16-May Dec 10 ▲ 6.22 6.22 0.0 Dec 11 ▲ 11.39 10.92 4.3 Dec 12 ▲ 13.23 12.81 3.3 Dec 13 15.30



DAILY REVISIONS: Company Ticker Date New Previous Chg (%)

China Minsheng Bank [Hold] 600016.SS 16-May Dec 10 ▲ 0.72 0.68 5.5 Dec 11 ▼ 0.78 0.79 -1.3 Dec 12 0.83 Dec 13 0.96 City Developments [Hold] CTDM.SI 17-May Dec 11 ▼ 0.70 0.72 -1.9 Dec 12 ▲ 0.73 0.72 0.3 Dec 13 ▲ 0.76 0.73 3.4Dish TV India Ltd [Buy] DSTV.BO 17-May Mar 11 ▲ -2.16 -2.17 0.6 Mar 12 ▲ -0.11 -0.69 84.1 Mar 13 1.06 -0.34 nmGMA Network, Inc [Hold] GMAP.PS 17-May Dec 10 ▼ 0.58 0.59 -1.8 Dec 11 ▼ 0.60 0.62 -2.0 Dec 12 ▲ 0.61 0.57 7.1 Dec 13 ▲ 0.63 0.57 11.5Globe Telecom [Hold] GLO.PS 17-May Dec 10 ▼ 68.57 73.56 -6.8 Dec 11 ▲ 78.45 74.45 5.4 Dec 12 ▲ 86.08 80.18 7.4Hon Hai Precision [Buy] 2317.TW 16-May Dec 10 ▲ 7.71 7.30 5.6 Dec 11 ▲ 8.31 8.21 1.1 Dec 13 12.12 Hopewell Holdings Limited [Buy] 0054.HK 17-May Jun 10 0.46 Jun 11 1.28 Jun 12 1.60 Jun 13 1.71 Jubilant Foodworks [Buy] JUBI.BO 17-May Mar 11 ▼ 11.15 12.82 -13.0 Mar 12 ▼ 16.40 16.88 -2.8 Mar 13 ▼ 24.28 26.67 -9.0NCsoft Corp [Hold] 036570.KS 17-May Dec 10 ▼ 7,658.69 7,988.01 -4.1 Dec 11 ▲ 7,325.39 7,298.12 0.4 Dec 12 ▲ 13,054.54 12,994.62 0.5 Dec 13 ▲ 13,011.64 12,877.09 1.0State Bank of India [Hold] SBI.BO 17-May Mar 11 ▼ 168.28 203.59 -17.3 Mar 12 ▼ 255.20 290.94 -12.3 Mar 13 ▼ 321.06 367.97 -12.7 Mar 14 386.67 Suntec REIT [Hold] SUNT.SI 17-May Dec 11 ▼ 0.08 0.08 -0.6 Dec 12 ▼ 0.08 0.08 -1.4 Dec 13 ▼ 0.08 0.08 -2.8Trina Solar [Buy] TSL.N 17-May Dec 10 ▼ 4.46 4.47 -0.2 Dec 11 ▼ 3.37 3.64 -7.3 Dec 12 ▼ 3.66 3.81 -3.9Wing Tai Hldgs [Hold] WTHS.SI 17-May Jun 11 ▼ 0.23 0.25 -10.0 Jun 12 ▼ 0.24 0.26 -9.3 Jun 13 ▲ 0.20 0.20 1.6

Source: Deutsche Bank

Asia ASEAN Singapore Property Property

18 May 2011

Singapore property Unwinding excesses; value emerging Gregory Lui, CFA Strategist (+65) 6423 5958 [email protected]

Elaine Khoo, CFA Research Analyst (+65) 6423 6435 [email protected]

Two lost years, start positioning for a reversal of headwinds in 2H Developers have lagged for 20 months on policy uncertainty despite rising prices and sales. We expect the worst of the intervention to be over in 2H11 and, coupled with a pick-up in office rental growth, NAV discounts should narrow. Start positioning in the laggard developers as we believe much of the policy uncertainty is reflected and they are less vulnerable to housing market risk than perceived. Upgrading Allgreen to Buy, CDL to Hold, downgrading Suntec REIT to Hold.


Recommendation Change

Top picks Allgreen Properties (AGRN.SI),SGD1.11 BuyAscendas Real Estate (AEMN.SI),SGD1.99 BuyCapitaCommercial Trust (CACT.SI),SGD1.41 BuyCapitaLand Ltd (CATL.SI),SGD3.15 BuyKeppel Land (KLAN.SI),SGD4.00 Buy

Companies featured

Allgreen Properties (AGRN.SI),SGD1.11 Buy2010A 2011E 2012E

P/E (x) 8.4 7.5 8.0EV/EBITDA (x) 5.7 4.8 5.0Price/book (x) 0.7 0.6 0.6Ascendas Real Estate (AEMN.SI),SGD1.99 Buy

2011A 2012E 2013EP/E (x) 16.1 15.4 14.3Yield (%) 6.5 6.6 7.1Price/book(x) 1.2 1.1 1.1CapitaCommercial Trust (CACT.SI),SGD1.41 Buy

2010A 2011E 2012EP/E (x) 11.8 20.8 20.4Yield (%) 6.1 5.1 5.2Price/book(x) 1.0 0.9 0.9CapitaLand Ltd (CATL.SI),SGD3.15 Buy

2010A 2011E 2012EP/E (x) 32.1 29.1 21.3EV/EBITDA (x) 14.8 11.5 9.2Price/book (x) 1.1 0.9 0.9CapitaMalls Asia (CMAL.SI),SGD1.70 Buy

2010A 2011E 2012EP/E(x) 19.9 29.7 25.8EV/EBITDA(x) 28.8 45.6 34.0Price/book(x) 1.3 1.1 1.1CMT (CMLT.SI),SGD1.90 Hold

2010A 2011E 2012EP/E (x) 23.7 20.8 18.8Yield (%) 4.8 5.3 5.6Price/book(x) 1.3 1.2 1.2City Developments (CTDM.SI),SGD11.20 Hold

2010A 2011E 2012EP/E (x) 17.9 15.9 15.4EV/EBITDA (x) 12.0 10.4 11.3Price/book (x) 1.8 1.4 1.3Keppel Land (KLAN.SI),SGD4.00 Buy

2010A 2011E 2012EP/E (x) 20.7 19.8 14.3EV/EBITDA (x) 30.2 37.4 17.5Price/book (x) 1.6 1.3 1.2Mapletree Logistics Trust (MAPL.SI),SGD0.90 Buy

2010A 2011E 2012EP/E (x) 14.6 14.4 13.9Yield (%) 7.1 7.1 7.2Price/book(x) 1.1 1.0 1.0Suntec REIT (SUNT.SI),SGD1.48 Hold

2010A 2011E 2012EP/E (x) 19.5 19.7 19.0Yield (%) 7.1 6.2 6.1Price/book(x) 0.8 0.8 0.8Wing Tai Hldgs (WTHS.SI),SGD1.53 Hold

2010A 2011E 2012EP/E (x) 9.8 6.8 6.4EV/EBITDA (x) 6.4 6.6 6.7Price/book (x) 0.7 0.7 0.6

Ample liquidity driving new home sales and competition for assets Four rounds of policy measures have slowed high-end home sales, while the mass market segment continues to be surprisingly robust. We expect another round of policy moves in the next three months targeted at enhancing housing affordability. Along with a reversal in the interest rate cycle in late 2011, this could signal the tail end of the policy tightening cycle. Excess liquidity has also driven up land values and demand for retail, office and industrial assets, suggesting upside potential for asset values but downside risk for development margins from rising land prices.

Rental growth on track; upside potential for office and industrial sectors Office rents continue to firm and we estimate they are on track to grow 11% in 2011 (vs. 22% in 2010). Rents remain inexpensive on a historical basis relative to GDP and vis-à-vis peers. We expect growth to accelerate again in 2012 as supply tightens. Rents are forecast to grow 45% from now until 2013. The outlook for retail remains subdued with retail sales growth still lagging and record supply in 2009/10. Industrial rents have started to accelerate over the past quarter.

Developer valuations undemanding; catalysts for re-rating towards year end RNAV discounts have widened to 29% vs. a long-term average of 19% as stocks have lagged the physical market. Developers have monetized much of their residential pipelines, reducing downside risk to prices. We expect moderate RNAV growth derived from rising commercial values and asset turnover. Moderating policy risk both in Singapore and China and accelerating office rents in 2012 should tighten discounts. Our preferences are based on: 1) relative leverage of office to residential; 2) strong locked-in earnings and 3) lower redeployment risk.

REITs offer attractive spreads; asset values understated Underlying asset values are inexpensive vis-à-vis recent open market transactions. The REITs are providing a 6.1% FY11e yield, implying a still-ample 383bps spread of risk-free (providing a buffer as interest rates normalise). Improving office and industrial rental trends, more active balance sheet management and a more optimistic acquisition outlook for the industrial REITs could provide upside to DPU.

Preferred picks Keppel Land, CapitaLand, Allgreen; REITs: AREIT, CCT We have revised RNAVs to reflect higher office asset values, partly offset by lower residential and retail values. We have reduced target discounts selectively to reflect a more difficult environment to recycle capital. We downgrade Suntec from Buy to Hold and upgrade Allgreen from Hold to Buy and City Dev from Sell to Hold. We value the developers using RNAV methodology and REITs on a DDM. Risks: a sharp slowdown in GDP growth, deterioration in credit and capital markets, interest rate increases stepping up in 2H12 and acquisitions risks. This report changes target prices and estimates for several companies under our coverage. For a detailed listing of these changes, please see page 6.



Asia Hong Kong Conglomerates

17 May 2011

Hopewell Holdings Limited Reuters: 0054.HK Bloomberg: 54 HK Exchange: HSI Ticker: 0054

Inflection point; initiating with Buy Michael Lee Research Analyst (+852) 2203 6136 [email protected]

Jack Frew Research Associate (+852) 22036197 [email protected]

Mean reversion looks likely; initiating with a Buy rating Hopewell Holdings is at an inflection point where the stock is trading at a steep 41% discount to NAV, which is one standard deviation below its five-year mean NAV discount. We believe the stock will soon rally, reverting to the mean given in the past three years, as there have been two occasions when the share price gained an average of 23% after the stock traded close to 1sd below the mean. NAV looks resilient as the fundamentals of its main businesses remain strong and we are positive on their respective outlooks: Buy with a target price of HK$28.

Forecasts and ratios

Year End Jun 30 2009A 2010A 2011E 2012E 2013E

Sales (HKDm) 967.8 1,373.7 2,018.0 1,659.7 1,894.3

EBITDA (HKDm) 357.5 530.6 634.7 762.6 873.3

Reported NPAT (HKDm) 1,680.9 4,222.8 2,425.6 1,404.7 1,501.2

Reported EPS FD (HKD) 1.90 4.81 2.76 1.60 1.71

DB EPS FD (HKD) 0.92 0.46 1.28 1.60 1.71

DB EPS growth (%) 52.0 -49.9 177.7 24.6 6.9

PER (x) 25.6 51.2 18.6 14.9 14.0

Yield (net) (%) 18.1 4.2 4.2 4.4 4.7Source: Deutsche Bank estimates, company data

1 DB EPS is fully diluted and excludes non-recurring items 2 Multiples and yields calculations use average historical prices for past years and spot prices for current and future years, except P/B which uses the year end close Deutsche Bank AG/Hong Kong

Coverage Change

Buy Price at 13 May 2011 (HKD) 23.85Price target - 12mth (HKD) 28.0052-week range (HKD) 26.30 - 20.55HANG SENG INDEX 23,276

Price/price relative

20

24

28

32

5/09 8/09 11/09 2/10 5/10 8/10 11/10 2/11Hopewell Holdings Li

HANG SENG INDEX (Rebased)

Performance (%) 1m 3m 12mAbsolute 2.1 -2.1 9.7HANG SENG INDEX -3.6 2.0 14.0

Stock data

Market cap (HKDm) 20,902Market cap (USDm) 2,689Shares outstanding (m) 876Major shareholders Gordon Wu/Thomas Wu (31%)Free float (%) 69Avg daily value traded (USDm) 4.5

Key indicators (FY1)

ROE (%) 10.3Net debt/equity (%) -5.1Book value/share (HKD) 27.66Price/book (x) 0.9Net interest cover (x) 22.9Operating profit margin (%) 28.4

Buoyant property segment With 60% of NAV in property assets in Hong Kong and China, Hopewell Holdings (HHL) has in our view unjustly, underperformed its investment properties peers by c. 22% in the last 12 months despite office rents having risen 32% and 22% last year in Wan Chai and Kowloon East respectively, where HHL’s investment properties are located. HHL’s development property in Happy Valley, Hong Kong, has also attracted premium pricing due to its superior location and views, while pre-sales for properties in Guangzhou, China, are 97% sold out. We therefore believe the stock’s underperformance is unjustified as we continue to expect a positive outlook for the company’s property assets in the next two years. Stable cash flow expected from Hopewell Highway despite competition HHL's 70%-owned Hopewell Highway (HHI) could face some traffic diversions from a competing highway that plans to partially commission in June this year. Nevertheless, Bloomberg consensus still projects a 7% EBIT CAGR for the next three years on the back of rising earnings contribution from a new toll road that has a encouraging start, neutralizing the increased competition elsewhere. As a result, the average 6.3% yield Bloomberg consensus expects over the next three years should allow HHL about HK$700m/year, supporting a 4% yield at the HHL level.

Valuation looks attractive at a steep NAV discount; risks Our 12-month target price of HK$28 is based on the company’s five-year historical average 30% discount to our 2011E NAV. The stock is currently trading at a steep and unjustified 41% NAV discount. Potential near-term catalysts include an announcement that construction of Hopewell Center II will commence. A key risk would be severe traffic diversion from HHI’s key highway. (See page 3 for more detail.)



Asia China Technology Software & Services

17 May 2011

AutoNavi Reuters: AMAP.OQ Bloomberg: AMAP UW Exchange: NMS Ticker: AMAP

Navigation leader, internet upside; initiating at BuyEva Leung, CFA Research Analyst (+852) 2203 6190 [email protected]

Alan Hellawell III Research Analyst (+852) 2203 6240 [email protected]

Dominance in high-visibility auto navigation; internet opportunity attractive We initiate coverage with a Buy rating and USD22 target price. Having established a leading position in automobile navigation, AutoNavi has an opportunity to play a major role in China’s burgeoning location-based services scene. Our Buy recommendation is based on 22% prospective upside to our target price, which reflects strong earnings growth potential with further upside possible due to the new opportunity to supply areas such as group-buys and LBS-based advertising.


Year End Dec 31 2009A 2010A 2011E 2012E 2013E

Sales (USDm) 57.2 85.8 117.6 157.6 199.2

EBITDA (USDm) 20.1 30.2 48.4 64.1 81.8

Reported NPAT (USDm) 10.4 19.1 33.3 46.2 59.2

Reported EPS FD(USD) 0.07 0.10 0.18 0.25 0.32

DB EPS FD(USD) 0.12 0.14 0.19 0.26 0.34

DB EPS growth (%) 330.6 13.5 37.9 36.7 26.9

PER (x) – 30.4 23.5 17.2 13.5

EV/EBITDA (x) – 15.5 12.9 9.1 6.4

DPS (net) (USD) 0.00 0.00 0.00 0.00 0.00Source: Deutsche Bank estimates, company data

1 DB EPS is fully diluted and excludes non-recurring items 2 Multiples and yields calculations use average historical prices for past years and spot prices for current and future years, except P/B which uses the year end close

Deutsche Bank Securities Inc.

Coverage Change

Buy Price at 13 May 2011 (USD) 18.16Price target - 12mth (USD) 22.0052-week range (USD) 22.40 - 13.24HANG SENG INDEX 22,961


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7/10 10/10 1/11 4/11AutoNavi

HANG SENG INDEX (Rebased)

Performance (%) 1m 3m 12mAbsolute -4.9 11.3 –HANG SENG INDEX -4.4 -0.8 14.0

Stock data

Market cap (USDm) 829Shares outstanding (m) 149.7Major shareholders Chairman (19.5%)Free float (%) 19Avg daily value traded (USDm) 0.0


ROE (%) 14.2Net debt/equity (%) -77.7Book value/share (USD) 1.70Price/book (x) 10.7Net interest cover (x) –Operating profit margin (%) 33.2

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Auto navigation – a cash cow with robust growth prospects AutoNavi is one of China’s leading in-automobile technology suppliers, as one of the first companies in China with Class-A surveying and certification for digital mapping. This business boasts high visibility, with growth underpinned by growing auto-navigation penetration of strong auto unit sales.

Digital mapping for group-buying, mobile ads We expect AutoNavi to diversify its revenue base away from auto navigation (74% of 2010 revenue) toward wireless internet and LBS (11%), and are encouraged by its initial relationships with China Mobile and others. We expect an overall top-line CAGR of 32% for the company during 2010-13. AutoNavi is due to announce 1Q11 results on 19 May. We expect revenue of USD24.3m, (+47% YoY) and non-GAAP net income growth of 39.4% YoY to USD7.2m.

PEG-based target price; inability to monetize next-gen opportunities a risk We assign a target price of USD22, based on a PEG-based approach, using 2011e non-GAAP EPS (excluding SBC) of USD0.77, 2011-13E EPS CAGR of 31.7% and a 0.9x PEG multiple. We believe a PEG of 0.9x is justified given AutoNavi’s limited track record as a public company and currently somewhat limited exposure to the fast-growing wireless/internet location-based segment. Our target price implies 28.5x 2011e P/E with EPS growth of 38% in 2011E, a discount to the 42x average P/E of the leading internet companies. Risks include adverse changes in growth in the underlying automotive market in China, an inability to monetize next-generation opportunities related to e-commerce and LBS-based advertising. (Please see page 13 for details on valuation and risks.).



Asia India Banking/Finance Banks

17 May 2011

State Bank of India Reuters: SBI.BO Bloomberg: SBIN IN Exchange: BSE Ticker: SBI

High provisions and low capital, D/G to HoldDipankar Choudhury Research Analyst (+91) 22 6658 4212 [email protected]

Manish Shukla Research Analyst (+91) 22 6658 4211 [email protected]

Actual provisions higher than our estimates, valuations factor in negatives We downgrade SBI to Hold with TP revised to INR2,705 from INR3,225. The additional provisioning requirements on NPL and pensions have been significantly higher than our estimates. Low Tier 1 ratio could constrain growth until there is further capital infusion from government. High CASA (low-cost deposit) ratio and re-pricing of high cost term deposits, could buffer FY12E NIM contraction. The stock is trading at 1.5xFY12E P/B and there is limited upside in the near term, in our view.


Year End Mar 31 2010A 2011A 2012E 2013E 2014E

Pre-prov profit (INRm) 248,490.2 314,442.7 390,572.6 461,288.9 536,893.6

Net profit (INRm) 117,338.3 106,849.5 162,054.3 203,873.7 245,536.6

EPS (INR) 184.82 168.28 255.20 321.06 386.67

EPS growth (%) 6.8 -8.9 51.7 25.8 20.4

PER (x) 10.3 15.8 9.5 7.5 6.2

Price/book (x) 1.64 2.18 1.52 1.31 1.12

DPS (net) (INR) 30.00 35.00 45.00 57.50 57.50

ROE (%) 15.6 13.3 17.8 18.7 19.3Source: Deutsche Bank estimates, company data



Recommendation Change

Hold Price at 17 May 2011 (INR) 2,413.60Price target - 12mth (INR) 2,705.0052-week range (INR) 3,489.55 - 2,154.60BSE 30 18,345

Key changes

Rating Buy to Hold Price target 3,225.00 to 2,705.00 -16.1%Provisioning (FYE) 99,234.4 to 125,486.4 26.5%Net int margin (FYE) 3.09 to 3.04 -1.5%Net profit (FYE) 167,999.7 to 162,054.4 -3.5%


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BSE 30 (Rebased)

Performance (%) 1m 3m 12mAbsolute -13.9 -13.2 7.2BSE 30 -5.4 -0.9 9.0

Stock data

Market cap (INRm) 1,532,636Market cap (USDm) 33,942Shares outstanding (m) 634.9Major shareholders Government of India (59.7%)Free float (%) 41Avg daily value traded (USDm) 137.9


ROE (%) 17.8Loan/deposit ratio (%) 81.0Book value/share (INR) 1,592.51Price/book (x) 1.5NPL/total loans (%) 2.9Net int margin (%) 3.04

DB vs Consensus FY12E (INR/share)

EPS TPMean 262.7 3024High 305 4000Low 227.9 2560DB 255.2 2705

BUYs HOLDs SELLs32 12 5

Source: Bloomberg Finance LP, DB

4QFY11 result (standalone) – high provisions pull down net profit Net profit (down 99% YoY) was significantly below our and consensus estimates. While operating profit was ~5% below DBe, the large variance on net profit was attributed to sharply higher provision for NPL and income tax. NII at INR80.6bn was up 20% YoY and in-line with DBe. Loan growth at 20% YoY was in line with DBe, NIM contracted 54bps QoQ to 3.07% and was below DBe. Asset quality showed signs of deterioration with slippages rising 79% QoQ and credit costs rising 87bps QoQ. The bank adjusted an amount of INR79.27bn against the reserves for pension cost of earlier years.

Growth could be constrained by capital, strong CASA mix could buffer NIM While part of 4QFY11 NPL provision was one-off there is still near term headwind in terms of additional provision of INR25bn on existing NPL. Operating costs could also remain elevated due to higher pension costs and expansion of branch and ATM network. Due to pension related adjustments flowing through the reserves Tier 1 ratio has now dipped to 7.8% and this could constrain growth. NIM contraction for full year FY12e vs. FY11 could be limited to 10-15bps due to strong CASA ratio (48.7%) and re-pricing of high cost deposits raised during FY09.

P/BV-RoE valuation; wages a downside, provisioning could be an upside We lower our FY12E/FY13E net profit (pre-minority) by 6.9%/7.9% to factor in higher credit costs. We value SBI on the Gordon growth model using consolidated valuations and add appraisal value of the life business. The key upside risk is a sharp decline in credit costs and key downside risk is operating costs increasing due to fresh recruitment/pension costs. See page 3 for more detail.



Asia India Media Broadcasting/ Movie & Entertainment

17 May 2011

Dish TV India Ltd Reuters: DSTV.BO Bloomberg: DITV IB Exchange: BSE Ticker: DSTV

Business scale delivers operating leverageHarrish Zaveri Research Analyst (+91) 22 6658 4209 [email protected]

Gaurav Bhatia Research Associate (+91) 22 6658 4055 [email protected]

3.5m gross subscriber adds, 10.4m total subs The 3.5m subscriber additions in FY11 (up 50% from FY10) are the manifestation of a strong market share shift in favour of DTH (vs. cable). Dish TV has maintained a 25% incremental share in a growing market and is on course to double EBITDA in both FY11 and FY12. We are revising up our target price 8.5% to INR77 due to higher-than-expected subscriber numbers, which are a driver of higher cash flows. We maintain Buy.



Sales (INRm) 7,376.9 10,847.9 14,926.4 20,812.1 25,122.6

EBITDA (INRm) -1,350.3 946.7 2,025.5 4,854.2 6,263.7

Reported NPAT (INRm) -4,762.8 -2,621.3 -2,306.4 -116.9 1,131.5

Reported EPS FD(INR) -6.93 -2.45 -2.16 -0.11 1.06

DB EPS FD(INR) -6.57 -2.49 -2.16 -0.11 1.06

OLD DB EPS FD(INR) -6.57 -2.49 -2.17 -0.69 -0.34

% Change -0.0% -0.0% -0.6% -84.1% -415.4%

DB EPS growth (x) 31.9 62.1 13.5 94.9 –

PER (x) – – – – 64.9

EV/EBITDA (x) – 47.5 38.3 16.5 12.6

DPS (net) (INR) 0.00 0.00 0.00 0.00 0.00




Forecast Change

Buy Price at 16 May 2011 (INR) 68.60Price target - 12mth (INR) 77.0052-week range (INR) 76.20 - 36.20BSE 30 18,345

Key changes

Price target 71.00 to 77.00 8.5%Sales (FYE) 14,819 to 14,926 0.7%Op prof margin (FYE) -13.3 to -13.1 -1.4%Net profit (FYE) -2,320.5 to -2,306.4 -0.6%


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BSE 30 (Rebased)

Performance (%) 1m 3m 12mAbsolute 0.5 9.0 80.1BSE 30 -5.4 0.2 7.9

Stock data

Market cap (INRm) 72,989Market cap (USDm) 1,616Shares outstanding (m) 1,070.0Major shareholders Promoter holding (72.83%)Free float (%) 27Avg daily value traded (USDm) 0.6


ROE (%) -47.4Net debt/equity (%) 96.0Book value/share (INR) 5.35Price/book (x) 12.8Net interest cover (x) –Operating profit margin (%) -13.1

Fixed content costs drive gross margins and EBITDA turnaround The key driver of Dish TV’s EBITDA breakeven is its content cost. The major broadcasters have agreed to a fixed fee instead of a per subscriber-based fee from Dish TV. This is why content cost as a percentage of revenues has been less than 50% of revenue (the benchmark for international satellite distributors).

Upgrading customers would help increase ARPU The company has discontinued its Silver pack, the base pack at INR125 per month, for new customers and has introduced a Silver Saver pack with nine additional channels for INR150 per month as the base pack. The company said it would offer a discount to existing Silver pack customers as an incentive to switch. Blended ARPU as of Q3FY11 was INR142, up from INR139 the previous quarter. We have factored in an ARPU of INR144 for FY12.

Maintaining Buy with a DCF-based target price of INR77 Our DCF valuation relies on a cost of capital of 14.6% and a terminal growth rate of 4%. While FCF for Dish TV is unlikely to be positive over the next 24 months, market valuations will likely factor in the scale buildup and growth in EBITDA. Key risks to our earnings include a decline in ARPUs and an increase in content costs. See pp.5-6 for details on valuation and risks.



Asia India Consumer Food & Beverage

17 May 2011

Jubilant Foodworks Reuters: JUBI.BO Bloomberg: JUBI IN Exchange: BSE Ticker: JUBI

Strong numbers, stable outlook; maintaining BuyHarrish Zaveri Research Analyst (+91) 22 6658 4209 [email protected]

Gaurav Bhatia Research Associate (+91) 22 6658 4055 [email protected]

47% CAGR FY11-13E; maintaining Buy with a target price of INR880 The key highlights of JFL's FY11 annual results were average store revenue of INR20m (with the best store contributing 2.5x the average), negative working capital and a 200bps improvement in operating margins. Cash of INR500m (25% of its balance sheet size), zero debt and capex of INR730m (for 72 stores and increasing commissary sizes) were the highlights of its annual balance sheet. With FCF sufficient to fund its future capex plans, JFL is in a position to deliver a 47% earnings CAGR FY11-13E. We maintain Buy with an INR880 target price.



Sales (INRm) 2,806.1 4,239.3 6,783.3 9,306.8 12,738.1

EBITDA (INRm) 335.8 666.1 1,202.2 1,925.2 2,754.6

Reported NPAT (INRm) 81.1 334.1 719.7 1,058.2 1,566.9

Reported EPS FD(INR) 1.39 5.25 11.15 16.40 24.28

DB EPS FD (INR) 1.39 5.25 11.15 16.40 24.28

OLD DB EPS FD (INR) 1.39 5.25 12.82 16.88 26.67

% Change 0.0% 0.0% -13.0% -2.8% -9.0%

DB EPS growth (%) – 276.6 112.3 47.0 48.1

PER (x) – 51.1 60.6 41.2 27.8

EV/EBITDA (x) – 25.6 36.0 22.0 14.9Source: Deutsche Bank estimates, company data



Forecast Change

Buy Price at 16 May 2011 (INR) 676.05Price target - 12mth (INR) 880.0052-week range (INR) 790.45 - 262.05BSE 30 18,345

Key changes

Price target 810.00 to 880.00 8.6%Sales (FYE) 6,098 to 6,783 11.2%Op prof margin (FYE) 16.9 to 13.4 -20.5%Net profit (FYE) 815.9 to 719.7 -11.8%


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BSE 30 (Rebased)

Performance (%) 1m 3m 12mAbsolute 8.0 34.6 126.7BSE 30 -5.4 0.2 7.9

Stock data

Market cap (INRm) 43,627Market cap (USDm) 966Shares outstanding (m) 64.5Major shareholders –Free float (%) 39Avg daily value traded (USDm) 19.2


ROE (%) 46.6Net debt/equity (%) -4.6Book value/share (INR) 29.70Price/book (x) 22.8Net interest cover (x) 212.3Operating profit margin (%) 13.4

40% of revenue from three cities, national average of INR20m per store JFL has executed its store openings aggressively (and generated similar revenue per store in Tier 2/3 cities as at its top tier stores). Its stores in New Delhi, Mumbai and Bangalore continue to generate 40% of its revenues. While on average each of its stores generated INR20m, its best store generates revenues 2.5x the national average.

Negative working capital and high gross margins The effects of the company’s efficient supply chain are reflected in its relatively high gross margins and negative working capital. We had estimated 69% gross margins for FY11 while JFL has delivered ~71% during the year. We have factored in gross margins of 69% for FY12E and FY13E.

Maintaining Buy with a target price of INR880 Our DCF-based target price of INR880 is based on a cost of equity of 14.8% and 4.5% terminal growth. We are 9% ahead of consensus on FY12 earnings and 12% ahead of consensus on FY13 earnings, even though our revenue assumptions are in line with consensus, due to the operating leverage that we believe JFL should generate following a 37% revenue CAGR in FY11-13E. At our target price of INR880 per share, the stock would trade at 36x FY13. The stock is currently trading at 43x FY12. Downside risks include an increase in the royalty charge to Domino’s International and execution risk on the opening of new stores.



Asia

17 May 2011

Asia Economics Daily

SBV hikes again


Michael Spencer, Ph.D Chief Economist, Asia (+852) 2203 8303 [email protected]

Jun Ma, Ph.D Chief Economist, Greater China (+852) 2203 8308 [email protected]

Taimur Baig, Ph.D Chief Economist, India (+65) 6423 8681 [email protected]

Juliana Lee Senior Economist (+852) 2203 8312 [email protected]

Kaushik Das Economist (+91) 22 6658 4909 [email protected]

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HIGHLIGHTS

Vietnam - State Bank of Vietnam hikes again Sri Lanka- CBSL remains on hold

UPCOMING RELEASES

Malaysia - GDP(Q1) DB forecast 5.0% (4.8% in Q4) Malaysia - CPI (Apr) DB forecast 3.0% (3.0% in Mar)

NEWS IN BRIEF

VIETNAM

Monetary policy (May). The State Bank of Vietnam (SBV) hiked the repurchasing rate by 100bps to 15%, effective today, for the sixth time this year. Note, however, that the SBV left the discount and refinancing rates unchanged, to limit the negative impact on fragile banks, in our view. Today's rate hike is the second of its kind this month, following a sharp increase in CPI inflation to 17.5%yoy in April, from 13.9% in March, pressed higher by administrative hikes to domestic fuel and electricity prices. Looking forward, without a sharp correction in international fuel and commodity prices, we expect Vietnam's inflation to rise further, to around 20% in Q3, before falling back to around 15% in Q4. This will leave the 2011 inflation at around 17% (average), sharply higher than the 9.2% reported in 2010 and the government's target of 12%. We expect the SBV to respond to rising inflation with another 100bps rate hike, within next two months, as Vietnamese authorities remain squarely focused on curbing inflation and stabilizing the dong.

SRI LANKA

Monetary policy (May). As widely expected, the Central Bank of Sri Lanka (CBSL) left its policy rates unchanged at its regular monetary policy meeting held last night, after the market closed. In its policy statement, the central bank struck a relatively dovish tone, noting that "though inflation trend remains upward (9.8%yoy in Apr vs. 6.8% in Jan) in recent time, it will moderate from May onwards led by improving supply conditions". This statement was qualified, however, noting that rising international commodity/energy prices pose upside risks to inflation. In fact, we expect the latter factors to drive CPI inflation even higher in the latter part of the year, prompting the CBSL to adopt a tightening bias. We expect CBSL to start its rate hikes by end-2Q, leaving the policy rates 100bps higher by end-2011.



FINANCIAL MARKETS

Today's % chg vs Today's abs chg vs Today's bps chg vs Today's bps chg vsClosing prev day Closing prev day Closing prev day Closing prev day

China 12743 0.5 6.51 0.0 3.25 0 3.83 0Hong Kong 22935 -0.1 7.78 0.0 0.26 0 2.54 3India 18298 -0.3 45.07 0.1 7.15 5 8.28 1Indonesia 3799 0.0 8570 0.0 7.12 0 7.86 9Malaysia 1536 0.0 3.04 0.0 3.23 0 3.99 0Philippines 4262 -0.9 43.4 0.0 2.30 18 6.52 -5Singapore 3136 0.0 1.25 0.0 0.44 0 2.33 -4S. Korea 2107 0.1 1087 4.3 3.46 0 4.36 0Taiwan 8884 -0.3 28.8 0.0 0.74 0 1.40 0Thailand 1085 0.0 30.3 0.0 3.01 0 3.00 0

US 12548 -0.4 na na 1.28 0 3.15 -2Japan 9580 0.2 81.4 -0.6 0.20 0 1.14 1Euroland na na 1.42 0.0 1.43 0 0.00 0

Stockmarkets FX Markets Money Markets Bond Markets

Sources: DB Global Markets Research, Bloomberg Finance LP and Reuters

ECONOMIC DIARY Country Release Period DB Expected Consensus Actual Previous

Monday, May 16

India WPI Apr-YoY 8.5% 8.4% 8.7% 9.0%Singapore NODX Apr-YoY 3.7% 6.5% -1.8% 9.9%

Exports Apr-YoY 9.5% NA 5.0% 12.7%

Imports Apr-YoY 8.0% NA 4.5% 17.2%

Trade Balance Apr SGD5.0bn NA SGD4.4bn SGD3.7bn

Tuesday, May 17

Events and Meeting:Sri Lanka:CBSL Meeting (no change in rate)Events and Meeting:Vietnam:SBV Meeting (rate hike by 100bps to 15%)

Wednesday, May 18Malaysia GDP Q1-YoY 5.0% 4.9% 4.8%

CPI Apr-YoY 3.0% 3.1% 3.0%

Thursday, May 19

Hong Kong Unemployment Rate (sa) Apr 3.3% 3.3% 3.4%

Singapore GDP (Final estimate) Q1-YoY 8.3% 8.3% 8.5%

Friday, May 20

Taiwan Export Orders Apr-YoY 14.8% 14.8% 13.4%

Thailand Exports Apr-YoY 28.0% NA 30.9%Imports Apr-YoY 30.0% NA 28.4%

Trade Balance Apr -USD0.6bn NA USD1.8bn

Events and Meeting:Japan:BoJ MeetingSources: DB Global Markets Research, Bloomberg Finance LP and Reuters



Global

17 May 2011

Global Commodities DailyPositioning for risk

Deutsche Bank AG/London

All prices are those current at the end of the previous trading session unless otherwise indicated. Prices are sourced from local exchanges via Reuters, Bloomberg and other vendors. Data is sourced from Deutsche Bank and subject companies. DISCLOSURES AND ANALYST CERTIFICATIONS ARE LOCATED IN APPENDIX 1. MICA(P) 146/04/2011.

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The Day Ahead

Time(EST) Country Event Previous Market View

02:00 Japan Machine Tool Orders (YoY) (Apr) 32.3%

04:30 UK Consumer Price Index (MoM) (Apr) 0.3% 0.7%

05:00 EZ ZEW Survey – Econ. Sentiment (May) 19.7 17.3

05:00 Germany ZEW Survey – Econ. Sentiment (May) 7.6 4.5

08:30 US Housing Starts (MoM) (Apr) 549K 568K

08:30 US Building Permits (MoM) (Apr) 594K 587K

09:15 US Industrial Production (MoM) (Apr) 0.8% 0.4%

12:00 US USDA weather report

16:30 US API crude inventory 2948K

Overview

Having found some support from the potential for refinery shutdowns due to Mississippi River flooding, actions by Army Engineers appear to have reduced the possibility of refinery closures in southern Louisiana and the resulting drop in gasoline futures prices has dragged crude lower. Gold and silver edged slightly lower as risk aversion and US dollar strength continued to weigh on prices. A Reuters survey puts 2011 Brent prices at USD109/bbl in 2011, with the WTI consensus at an average USD101/bbl. The WTI crude oil options market probabilities published in the DB Commodities Weekly suggest a December 2011 price of USD100/bbl, but with price risk skewed to the upside.

The CFTC released positioning data for the week ending May 10th. According to the DB sector positioning index, which measures the magnitude of the current net speculative position relative to its long-term average on a scale of -10 to +10, we found the metals complex has suffered the most severe liquidation, Figure 1. We believe if global deflation fears continue to take hold, energy prices may have further to fall from a positioning perspective.

In agriculture, dry and warm weather in Europe and China threatens a negative supply shock in the wheat market. French authorities have implemented the most severe level of water restrictions in 20 of 96 departments, as drought depletes soil moisture. Although the current situation is not as severe as 2003 yet, during that period wheat production in Europe fell by over 15% and prices leapt 30%.

In UK gas, imports from Norway rose as the Kollsnes gas processing unit was reported to be returning from maintenance outage. LNG flows from Isle of Grain rose to clear room in storage for the 21 May arrival of Al Utouriya. Otherwise we expect LNG sendout to decline, since cargo deliveries have slowed noticeably in comparison to April. Looking at today’s calendar, in Europe market will focus on CPI for the UK, ZEW economic sentiment survey for Germany and the Eurozone. In the US, housing starts, building permits and industrial production will provide important guidance on the housing and industrial sectors.

Commodities & Global Markets

Commodities News In Brief

• Global steel consumption will rise 5.9% this year and 6% in 2012, according to the World Steel Association.

• China, the world’s biggest iron ore buyer, cut purchases by 11% in April from the previous month as higher prices deterred purchases. Imports were 52.88 mn tonnes in April, down from 59.48 m tonnes in March, according to China’s General Administration of Customs.

• Russia plans to raise its export duty on most crude shipments by 1.9% on June 1 to the highest level since 2008 after oil prices climbed.

• Idemitsu Kosan Co , Japan's third-largest refiner, said on Monday it plans to refine 15% less crude oil in the April-June quarter compared with a year earlier, after the earthquake in March hurt demand for oil products.

• Ukrainian grain stockpiles came to 8.3 mn tonnes as of May 1, up 9% Y-o-Y, the country’s statistics office said.

Global Markets News In Brief

• EZ (MoM) CPI down to 0.6% in April from 1.4% in March (YoY); CPI remained at 2.8% in April.

• EZ Mar trade balance showed a €2.8B surplus.

• US NY Empire State Mfg. Index (May) index fell to 11.9 from 21.7 in April.

• US Total Net TIC Flows rose to USD116 billion in Mar from USD95.6 bn in Feb.

• US NAHB Housing Market Index (May) unchanged from April at 16.

• China actual FDI rose 15.2% y-o-y in April to be USD 8.46 bn

Event Risks

• Japan BOJ Target Rate 19 – 20 May.

• EZ Consumer Confidence on May 20.

• Chicago Fed Nat Activity Index May 23.

• Germany IFO - Business Climate May 24.

• Richmond Fed Manufact. Index May 24.

• China PMI Manufacturing on May 31.

Research Team Adam Sieminski Xiao Fu Research Analyst Research Analyst (1) 202 662 1624 (44) 20 7547 1558 [email protected] [email protected]



Figure 1: DB Sector Positioning Index (2-wk change) Figure 2: Brent and WTI crude oil prices

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Energy Metals Agriculture

10-May-1126-Apr-11

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Jan-10 Mar-10 May-10 Jul-10 Sep-10 Nov-10 Jan-11 Mar-11 May-11

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Source CFTC, Deutsche Bank

Source: Bloomberg Finance LP, Deutsche Bank

Commodity Price Summary

Energy WTI (bbl) Brent (bbl) Nat Gas (mmBtu) RBOB Gas (g) Heating Oil (g) API 4 (t)

Close (USD) 97.37 112.73 4.32 2.93 2.87 118.00 Daily price change -2.3% -1.0% 1.7% -4.7% -2.3% -2.0% YTD price change 6.6% 19.0% -2.0% 19.5% 13.0% 2.0% Precious Metals & FX Comex Gold Comex Silver Nymex Platinum Nymex Palladium EURUSD USDJPY Close (USD/oz) (level) 1490.60 34.13 1760.00 713.50 1.42 80.79 Daily price change -0.2% -2.5% -0.5% 1.0% 0.3% 0.0% YTD price change 4.9% 10.4% -1.0% -11.2% 5.8% -0.6% Industrial Metals Aluminium Copper Lead Nickel Tin Zinc LME close 3M (USD/t) 2548 8839 2283 24355 28000 2155

LME close 3M (USc/lb) 115.6 400.9 103.6 1104.7 1270.1 97.7

Daily price change -0.8% 0.6% -0.3% -0.2% -2.1% 0.0%

YTD price change 3.2% -7.9% -10.5% -1.6% 4.1% -12.2% LME Stocks (t) 4,687,925 467,075 316,450 113,976 22,195 831,050

Daily change (t) 65,100 -1,450 -75 -426 60 -200

Agriculture & Livestock Corn (bsh) Cotton (lb) Live Cattle (lb) Soybeans (bsh) Sugar (lb) Wheat (bsh) NY close (USc) 697.50 151.15 108.33 1326.50 21.77 736.50 Daily price change 2.7% 4.1% -0.6% -0.8% 1.5% 5.8%

YTD price change 10.9% 4.4% 0.4% -4.8% -32.2% -7.3%

Other prices Baltic Dry Index

Iron Ore Steel US HRC Ethanol EUA (CO2)

Dec12 (Euro) U3O8 USD/lb

Close (level) 1291 178.5 826 2.54 17.67 58.00 Daily change -1.1% -0.2% 0.0% 1.3% 1.0% 0.0% YTD change -27.2% 4.9% 21.5% 6.6% 20.8% -6.6%

Indices DBLCI-OY DBLCI-MRE DB Harvest SPGSCI DJUBS SPWCI NY close (level) 1344 426 289 5123 320 397 Daily change -1.0% 0.2% 0.0% -1.2% -0.4% -0.9% YTD change 5.0% -0.8% 2.3% 3.6% -1.9% 11.2%

Source: Reuters, Bloomberg Finance LP, UxC, Metals Bulletin, Deutsche Bank



Asia China Technology

17 May 2011

China TMT Daily Smartphone behaviors; also 0700.HK, BIDU

(Please click through to the .pdf version of this document for a full overview of today's

news and views.)


Periodical

TOP CHINA TMT PICKS Company Rating Target Price AsiaInfo-Linkage Buy USD 26.30 China Telecom Buy HKD 5.40 ZTE Buy HKD 35.65

CHINA TMT STOCKS Company Rating Close Price 1D% 3M%

TELCOS as on 16/05China Comm Service Hold 4.8 -0.8 -9.9China Mobile Hold 69.8 -1.5 -5.0China Telecom Buy 4.3 -3.1 -3.8China Unicom Buy 15.1 -3.2 15.4 INTERNET/ONLINE GAMING Alibaba.com Hold 13.3 -0.2 -24.0Baidu Buy 127.8 -2.7 -0.7Ctrip.com Int'l Hold 46.4 -2.4 18.2Netease.com Buy 45.2 -0.6 2.1Shanda Sell 42.2 -5.2 -4.7Shanda Games Hold 6.9 -0.4 12.6Sina Corp Sell 106.3 -0.6 18.4Sohu.com Hold 80.3 -3.7 -6.4Tencent Buy 219.2 0.1 7.7 TECHNOLOGY AsiaInfo-Linkage Buy 19.8 0.3 -6.0ChinaCache Buy 13.3 0.6 -21.6Foxconn Int'l Hldgs Hold 4.0 -5.2 -28.0HiSoft Buy 16.2 -4.5 -48.5Lenovo Group Hold 4.3 -0.9 -12.6Longtop Buy 18.9 0.1 -41.8SouFun Buy 20.2 -12.2 -1.4Synnex Technology Hold 68.9 -1.0 -1.9ZTE Buy 26.1 -1.0 -8.1 Indices Close 1D% 3M% as on 16/05HSI 22960.6 -1.4 -1.5HSCEI 12676.8 -1.7 0.8Nasdaq 2782.3 -1.6 -1.5Sources: DB, Bloomberg Finance LP

Research Team

Alan Hellawell III Research Analyst (+852) 2203 6240 [email protected]

Eva Leung, CFA Research Associate (+852) 2203 6190 [email protected]

FEATURE:

The changing role of the smartphone One of the single most important trends across our broader China TMT universe relates to the growing profusion of smartphone usage in the Chinese telecoms and internet context; and what it means for hardware vendors, operators, internet names, etc. The vastly increased processing power and thus marked expansion in what users can do on the move will inevitably have profound consequences for emerging trends that we are tracking closely, from mobile advertising to LBS-based commerce and so on. Google commissioned a recent survey by Ipsos OTX MediaCT which indicates that smartphone usage has indeed changed. For instance, people are using their phones in a significantly wider range of contexts than when phones were used exclusively, or even primarily, for voice. Some 93% of the 5,000+ respondents to the survey for instance use their mobile devices at home, 87% while on the go (commuting, walking, etc.), 77% in stores, 73% in restaurants, etc. It is clear that the application space for what used to be a voice-only device used in only select circumstances while away from home has broadened considerably.

What are people using their smartphones for? The study revealed that smartphone usage significantly resembles desktop internet behaviors, a revelation surprising to us given limitations to screen size, processing power, etc. Some 77% of respondents access search engines on their smartphones, 68% access apps, and 48% access videos. We list below the type of information searchers are seeking in rank order: news, food & recipes, dining info, entertainment and shopping.

Why local commerce and group buy have such potential: local searches The Ipsos OTX MediaCT survey indicated that, of those smartphone owners conducting local searches, they are often contacting a commercial establishment (77% claims to do this), or actually making a purchase (44%.) With total smartphone sales estimated at only 30m in China last year (vs. total mobile accounts of 830m), growth in sales, and an increase in 3G penetration from below 6% last year to at least 12% by year-end 2011 should set China on a similar usage path as to what has been profiled in the survey above.



Asia Hong KongConsumer

17 May 2011 - 10:04:49 AM HKT

INDUSTRY ALERT Industry UpdateConsumer Administration of Sport issues the ‘12th Five-Year plan'

Focus stocksLi Ning Co Ltd (2331.HK),HKD15.58Sell, Price Target HKD12.08

Anta (2020.HK),HKD13.82 Buy,Price Target HKD17.30

China Dongxiang(3818.HK),HKD2.66 Hold, Price Tar‐get HKD2.38

General Administration of Sport issues the '12th Five-Year plan' - Longterm positive for sportswear sectorGeneral Administration of Sport of China issued the '12th Five‐Year plan forsports industry'. The plan described that in 2008, there were 3.17m em‐ployees in the sports‐related industry in China, with total value‐added outputof RMB155 bln, up 16%yoy.The plan highlights there are still huge potentials in the sports industry ‐ lackof service‐industry, imbalance between regions, unsophisticated consump‐tion market, lack of market mechanism in certain areas.

12th Five Year plan: The administration targets to increase total value‐added output to RMB400 bln by end of 2015 (representing c. 15% CAGRgrowth rate). It will also help to nurture a number of influential domesticsports brands and increase service‐related industry to broaden consumerexperience. The administration will also lend more support to the rural areas,where sports‐related industry is less developed compares to urban areas.Source: 12 May 2011, General Administration of Sport of ChinaFor the full plan, please see below linkhttp://www.sport.gov.cn/n16/n1251450/n1251465/n1253115/n1253248/1912832.html

DB view:We believe the plan is indirectly beneficial for the sportswear sector in thelong term. The establishment of a more integrated sports industry structureand promotion of sports‐related activities will certainly increase the sportsawareness and participation among the population, which in turn will leadto an increase or upgrading in sports‐related consumption.However specific policies in support of sportswear brands are not spelt out.So we believe this plan will only indirectly benefit the sportswear sector inthe long term.

Chen FengResearch Analyst(+852) 2203 [email protected]

Anne LingResearch Analyst(+852) 2203 [email protected]



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Technology Software & Services

17 May 2011 - 08:31:57 AM CST

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COMPANY ALERT Company Update

Ctrip Hold

1Q first blush

Reuters:CTRP.OQ Exchange:NSM Ticker:CTRP

Price (USD) 46.36

Price target (USD) 43.00

52-week range (USD) 52.12 - 32.81

Market cap (USDm) 7,048

Shares outstanding (m) 141.9

Net debt/equity (%) -32.9

Book value/share (CNY) 25.92

Price/book (x) 11.6

FYE 12/31 2009A 2010E 2011E

Sales(CNYm)

1,988 2,881 3,730

Net Profit(CNYm)

659.0 1,048.1 1,256.9

DB EPS(CNY)

4.69 6.95 8.14

PER (x) 32.2 43.4 37.1

Yield (net)(%)

0.0 0.0 0.0

1Q11 Non-GAAP EPS RMB2.01 above DBe of RMB1.81. Rev of RM-B765m came in 5% above our estimate and consensus. The earning sur-prise was mainly due to better-than-expected air-ticking booking and hotelreservation. Pre-SBC OM was 44% vs. 45% in 4Q due to a 3% sequentialdrop on the top-line while GAAP OM dropped to 34% from 37% due toincreasing SBC (RMB70m in 1Q11 vs. RMB60m in 4Q10)

Hotel reservation rev was RMB310m in 1Q, up 23% YoY and down 14%QoQ, driven by 20% volume growth and 3% increase in commission perroom night.

Air ticket booking rev was RMB326m, up 23% YoY and down 2%QoQ, driven by 20% volume growth and 3% increase in commission perticket.

Packaged-tour rev reached RMB125m, up 74% YoY. Wing On Travel andezTravel contributed 54% for the growth. Corporate travel rev was RM-B31m, up 20% YoY, driven by the increased corporate travel demand frombusiness activities.

2Q guidance of 15-20% top-line YoY growth lackluster. In our view,Ctrip's 2Q guidance is conservative, given that 1) domestic travel marketstarted to recover in Apr and 2) the co started consolidating Wing On in endthe of 2Q10. Nonetheless, we think upside to the guidance is limited. Webelieve market's concern on the stock is the impact from high speed rail in2H11. In our view, there could be short term air-ticket pricing volatility in theshort term but impact to overall airlines and travel agents might be limitedto single digit percentage. For Ctrip, we estimate Beijing-Shanghai relatedroutes contribute to 10% of air revenue while total routes exposed to highspeed rail is 20% of airline revenue. On the other hand, we expect hotelreservation to be positively impacted by the high speed rail.

Maintain HOLD and TP

Alex YaoResearch Analyst(+86) 21 3896 [email protected]

Alan Hellawell IIIResearch Analyst(+852) 2203 [email protected]



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Energy Alternative Energy

18 May 2011 - 12:02:45 AM HKT

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COMPANY ALERT Results

Trina Solar Buy

Strong shipment but mediocre margin guidance for 2Q

Reuters:TSL.N Exchange:NYS Ticker:TSL

Price (USD) 24.79

Price target (USD) 33.70

52-week range (USD) 30.73 - 15.68




Book value/share (USD) 20.28

Price/book (x) 1.2

FYE 12/31 2010A 2011E 2012E

Sales (US-Dm)

1,858 2,699 3,144

Net Profit(USDm)

311.5 248.9 289.1

DB EPS(USD)

4.46 3.37 3.66

PER (x) 5.3 7.3 6.8

Yield (net)(%)

0.0 0.0 0.0

Trina announced 1Q11 results before market open on May 17. Reported netprofit was down 67% qoq to US$48m. Stripping out items such as FX gain/loss, recurring net profit was down 45% qoq to US$65m which is 9% belowour estimates. The qoq earnings decline is mainly attributable to the uncer-tainty in Italy's solar incentive policy in 1Q, which resulted in a 9% qoqdecline in shipment and a 6% qoq decline in module ASP. Trina recordedan operating cash outflow of c.US$120m, as payment terms lengthenedand inventory built up in 1Q. We show qoq comparison in table below.Outlook: Management expects demand to pick up and reaffirms its 2011shipment guidance of 1.75-1.80GW (+66-70% yoy). 2Q11 shipment is likelyto rebound and up 34-40% qoq to 430-450MW, partly supported by theexpected 130MW shipment to Mohring Energie in Germany in 2Q and3Q11. However, we expect gross margin for in-house wafer to decline fur-ther to 26-27% (vs. Trina's guidance of mid-20s) and overall gross marginto decline to 21-22% in 2Q11 (vs. Trina's guidance of low 20s). We forecasta c.23% overall gross margin in 2011E and a US$1.4/W module ASP by end4Q11E.We revised down our 2011E earnings to reflect the lower 1Q11 results andcut our target price to US$33.7 (from US$36.4), which is based on a 10xtarget 2011E P/E. We expect market to react negatively to the 1Q resultsand 2Q margin guidance. However, Trina, as a low-cost solar PV manufac-turer with increased brand recognition, would still be well-positioned amongits peers. We believe market may turn out to be too pessimistic on theoutlook, as we expect demand to start picking up again and margin to sta-bilize with further decline in polysilicon and wafer prices in coming months.Maintain Buy.

Source: Deutsche Bank, company data

Eric Cheng, CFAResearch Analyst(+852) 2203 [email protected]

Michael Tong, CFAResearch Analyst(+852) 2203 [email protected]



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Technology Semiconductor & Semicon‐ductor Equipment

17 May 2011 - 11:39:45 AM CST

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INDUSTRY ALERT Industry UpdateSemiconductor & Semi‐conductor Equipment

Asian foundry sector ‐ A tougher game for tier‐two players

Focus stocksTSMC (2330.TW),TWD74.90 Buy,Price Target TWD85.00

United Microelectronics(2303.TW),TWD14.95 Hold, PriceTarget TWD16.00

Tier‐two foundries to face more challenges in 65nm ‐ As we highlightedin our previous notes, we expect foundry customers to accelerate the mi‐gration from 65nm to 40nm in TSMC due to better price performance. Weanticipate this to lead to a lower utilization rate for tier‐two foundries in 2H11and 2012. In addition, SMIC is cutting 65nm pricing aggressively to rampproduction. We believe this will result in a challenging 65nm pricing envi‐ronment in 2H11 and 2012. This should be negative to tier‐two foundrieswhich rely on 65nm to drive profit due to their low yield rate in 40nm. Weexpect tier‐two foundries to encounter more ASP/margin pressure from2H11 onwards.

Market share reshuffle to the leader ‐ We project TSMC to expand itsmarket share from 64% in 2011 to 66‐67% in 2012, driven by its greaterdominance in 40nm and 28nm. Tier‐two foundries should continue to ex‐perience a low yield rate in 40nm for high‐performance products and 28nmgate‐first products in 2H11 and 2012. This is attributable to: 1) tier‐twofoundries' limited R&D expenses in the past three years; 2) much higher40nm and 28nm production complexity and requirement of low leakagecurrent vs. the previous nodes and 3) the issue of speed performance ingate‐first products.

Maintaining Buy on TSMC ‐ We expect strong 40nm and 28nm demandto drive more earnings upside risks and stock re‐rating for TSMC in 2H11and 2012. We forecast accelerated shift to 40nm and 28nm in 2012 due to:1) the rising penetration of tablet PCs and smartphones, 2) a continued net‐working upgrade cycle for cloud, virtualized datacenter, and mobile internet,and 3) 4G base station buildup.

Michael ChouResearch Analyst(+886) 2 2192 [email protected]



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Energy Oil & Gas

17 May 2011 - 06:26:37 AM GMT

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GS Holdings Corp Buy

GS Holdings reports strong 1Q11 earnings

Reuters:078930.KS Exchange:KSC Ticker:078930

Price (KRW) 83,600

Price target (KRW) 108,000

52-week range (KRW) 103,000.00 -32,800.00



Net debt/equity (%) 11.0

Book value/share (KRW) 62,400

Price/book (x) 1.34

FYE 12/31 2010A 2011E 2012E

Sales (KR-Wbn)

929 1,226 1,244

Net Profit(KRWbn)

801.1 1,054.5 1,068.4

DB EPS(KRW)

8,622 11,349 11,499

PER (x) 5.4 7.4 7.3

Yield (net)(%)

2.7 2.1 2.1

GS Holdings released impressive 1Q11 results, led by b-t-e earnings fromits main subsidiary, GS Caltex. At the holdings level, OP jumped 96% QoQto W425bn (DBe W309bn, consensus W338bn) on 18% QoQ revenuegrowth to W2.1trn. Under the new IFRS reporting basis, revenues and OPfrom GS EPS (70% stake), GS Retail (66%), GS Global (66%) and GS Sports(100%) are now consolidated whereas previously they were recognized asequity method gains at the operating level (as revenue items). GS Caltex(50%) and GS Homeshopping (30%) are still accounted for as equity-method gains (as revenue items).Similar to other Korean refiners, GS Caltex reported very strong OP ofW827bn (DBe W611bn) in 1Q11 (up 74% QoQ), thanks largely to rising oilprices (positive due to time lag in cost recognition), robust refining margins(Sing complex margin improved from $5/bbl in 4Q10 to $7.2/bbl in 1Q11)and PX-naphtha spreads ($448/t in 4Q10 to $704/t in 1Q11). Refining OProse from W237bn in 4Q10 to W397bn in 1Q11, while petrochem OP rosefrom 137bn in 4Q10 to W276bn in 1Q11.We maintain Buy on GS Holdings as we believe refining upcycle until 2013will lead to robust earnings for GS Holdings in the medium term.

1Q11 earnings results for GS Holdings and GS Caltex

Source: Deutsche Bank, company data and Bloomberg Finance LP

Peter LeeResearch Analyst(+82) 2 316 [email protected]

Kyle Huh, CFAResearch Associate(+82) 2 316 [email protected]



Asia Korea, Republic of Automobiles & Components

17 May 2011

Hyundai Motor Reuters: 005380.KS Bloomberg: 005380 KS Exchange: KSC Ticker: 005380

Recent correction offers a buying opportunitySanjeev Rana Research Analyst (+82) 2 316 8910 [email protected]

We remain positive and see several near-term catalysts; shares to recover Despite the 11% decline in Hyundai’s share price from its recent peak, we remain positive on the company, as we believe industry fundamentals, and indeed its own competitive positioning within the sector, remain very strong. We expect several catalysts in the coming months – higher market share in the US and China, strong 2Q earnings, the launch of VF and Veloster in Europe and i30 in Korea, which should boost overall sales and ASP. Meanwhile, valuations remain supportive. As such, we think the recent correction should be a good buying opportunity.



Reported NPAT (KRWbn) 2,961.2 5,267.0 6,607.2 7,090.6 7,584.5

DB EPS FD (KRW) 13,542 23,911 29,995 32,190 34,436

PER (x) 5.9 5.9 7.5 7.0 6.6Source: Deutsche Bank estimates, company data



Company Update

Buy Price at 17 May 2011 (KRW) 226,000Price target - 12mth (KRW) 330,00052-week range (KRW) 254,500 - 130,500KOSPI 2,102.41


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5/09 8/09 11/09 2/10 5/10 8/10 11/10 2/11Hyundai Motor

KOSPI (Rebased)

Performance (%) 1m 3m 12mAbsolute 2.0 27.0 60.9KOSPI -1.8 6.3 27.3

Stock data

Market cap (KRWbn) 49,691Market cap (USDm) 45,540Shares outstanding (m) 219.9Major shareholders Hyundai Mobis (16%)Free float (%) 74Avg daily value traded (USDm) 207.150


ROE (%) 21.8Net debt/equity (%) -24.5Book value/share (KRW) 151,127Price/book (x) 1.50Net interest cover (x) –Operating profit margin (%) 9.7

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Strong KRW offset by high utilization and savings from platform integration While there are some concerns about the KRW’s recent strength against the US dollar, we remain confident about Hyundai’s margin outlook. Despite the KRW’s 9% strength in 2010 vs 2009, Hyundai’s parent-based OP margin expanded by 1.8pp, driven by higher plant utilization (88%->96%) and a rising portion of sales coming from models based on platform integration (12%->32%). In 2011, we expect utilization at Korean plants to be 100% and the portion of sales from models based on integrated platforms to more than double to 67%. Also, lower marketing spend and customer incentives should be able to offset any currency headwinds. This means the earnings outlook for 2Q and 2H remains favorable.

We see another potential big leap in profits in 2011 at the US operation In the US, Hyundai has been able to lower its average customer incentives YTD to US$1,082 per car, compared to US$1,649 in 2010 and US$2,506 in 2009. Assuming a similar level of incentives as well as sales of 635K units in that market (+18% YoY), this alone should translate into additional earnings of W360bn in 2011. Adding 5-6% ASP improvement (in KRW terms), we estimate that the earnings contribution from US operations could easily exceed W1.3tn in 2011 compared to W502bn in 2010 (factoring in raw material and labor cost increases).

Product mix improvement in major markets to drive profits; key risks Thanks to the launch of the new YF Sonata in China in April and the Tuscon in 2010, Hyundai’s sales mix in the high-margin mid-size PV and SUV segments in China is set to expand to 14% and 19% in 2011 from 9% and 17% respectively in 2010. In the European market, Hyundai’s plan to launch the VF (i40) and Veloster models in 2H and the i30 and New Santa Fe in 2012 should give momentum to its sales. In the highly profitable domestic market, strong sales of the Grandeur and the launch of the VF and i30 in 2H should boost overall ASP. We maintain our target price of W330,000, based on 11x11E PE. Key risks include a strong won, lower-than-expected sales in China or the US and potential labor unrest in the summer.



Asia Korea, Republic of Technology Software & Services

17 May 2011

NCsoft Corp Reuters: 036570.KS Bloomberg: 036570 KS Exchange: KSC Ticker: 036570

It's all about next year; maintaining Hold John Kim Research Analyst (+82) 2 316 8979 [email protected]

Jou-Yong Yoo Research Associate (+82) 2 316 8916 [email protected]

It's all about next year; maintaining Hold NCsoft's consolidated KGAAP-based 1Q11 results seemed a bit off-track relative to consensus, but were in line with our estimates. However, we believe share price performance this year will depend far more on the fate of its two upcoming games than on its 2011 earnings. With details still limited on the prospects for these new games, we continue to believe that NCsoft's margin for error on execution is thin. We are maintaining our estimates and our Hold rating.



Sales (KRWbn) 635 650 651 922 942

EBITDA (KRWbn) 260 273 209 380 371

Reported NPAT (KRWbn) 184.0 166.6 159.7 284.7 283.7

Reported EPS FD(KRW) 8,723.41 7,658.69 7,325.39 13,054.54 13,011.64

DB EPS FD(KRW) 8,723 7,659 7,325 13,055 13,012

OLD DB EPS FD(KRW) 8,723 7,988 7,298 12,995 12,877

% Change 0.0% -4.1% 0.4% 0.5% 1.0%

DB EPS growth (%) – -12.2 -4.4 78.2 -0.3

PER (x) 15.0 25.1 37.0 20.8 20.8

EV/EBITDA (x) 8.7 12.9 24.4 12.9 12.5

DPS (net) (KRW) 500 600 600 600 600




Results

Hold Price at 17 May 2011 (KRW) 271,000Price target - 12mth (KRW) 285,00052-week range (KRW) 294,500 - 179,000KOSPI 2,102.41

Key changes

Op prof margin (FYE) 27.7 to 27.7 0.1%Net profit (FYE) 159.1 to 159.7 0.4%


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KOSPI (Rebased)

Performance (%) 1m 3m 12mAbsolute -3.2 23.2 36.2KOSPI -1.8 6.3 27.3

Stock data

Market cap (KRWbn) 5,910Market cap (USDm) 5,416Shares outstanding (m) 21.8Major shareholders Taek Jin Kim (27.4%)Free float (%) 66Avg daily value traded (USDm) 0.000


ROE (%) 18.3Net debt/equity (%) -75.6Book value/share (KRW) 43,480Price/book (x) 6.23Net interest cover (x) –Operating profit margin (%) 27.7

Publishing deal with Tencent for B&S announced, but expected NCsoft disclosed that it has reached an agreement with Tencent (Buy, 219.20HKD) to publish the upcoming Blade & Soul (B&S) game in China. Subject to progress, mgmtt expects the launch in China to lag the launch in Korea by six-12 months. While we note the latest development enhances the chances of B&S succeeding in China, we also believe the outcome was anticipated by the market, as NCsoft’s management had been voicing its preference for partnering with Tencent.

Material changes caused by K-IFRS on 2010 P&L Although NCsoft is not required to implement IFRS in 2011, IFRS-adjusted earnings of W144.7bn for 2010 were materially lower than the previously-reported KGAAP earnings of W166.6bn. Key factors driving the differences were: a) higher labor expenses due to the inclusion of previously-unconsolidated subsidiaries; b) the inclusion of ongoing legal expenses relating to a former executive; and c) other one-off adjustments.

Valuation and risks Our target price is based on 22x 2012E earnings, which is about 10% higher than the stock’s two-year average PER and the regional peer average. Upside risks are better-than-expected new game launches and a re-rating from an improved stature as a true global publisher. Downside risks are a poor reception for its new games, loss of key development talents and unfavorable regulations.



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Banking/Finance Banks

17 May 2011 - 05:21:25 PM GMT

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Woori FH Buy

Privatization roadmap announced once again

Reuters:053000.KS Exchange:KSC Ticker:053000

Price (KRW) 13,350

Price target (KRW) 19,000

52-week range (KRW) 16,050.00 -13,150.00


Shares outstanding (m) 806

NPL/total loans (%) 2.1

Price/book (x) 0.7

FYE 12/31 2010A 2011E 2012E

Provisioning(KRWbn)

2,889.6 2,263.1 2,000.0

Pre-provprofit (KR-Wbn)

4,766 6,052 5,319

EPS (KRW) 1,540.99 3,020.72 2,582.14

PER (x) 9.6 4.4 5.2

Yield (net)(%)

1.7 3.7 4.5

Government announces Woori FH privatization roadmap once againThe Public Funds Oversight Committee (PFOC) announced on 17 May thatit will reinitiate the sale of the 57% stake of Woori FH held by the KoreaDeposit Insurance Corporate (KDIC). We believe that the stake sale plan isunlikely to be a catalyst for Woori in the near term given the uncertaintiesregarding the success of the sale and the timeline. Given that the previousprivatization was halted on 17 December 2010 due to lack of interest forthe controlling stake and thus no effective competition, the sale may facedifficulties once again if none of the listed major financial holding companiesshow interest.

No separate sale of regional banksTo improve the chances of privatization, the PFOC changed certain condi-tions to lure more investors: 1) the PFOC decided not to separately sell thesubsidiary companies as the plan made the selling process more compli-cated; 2) the PFOC set the minimum bidding to a 30% stake in Woori FHto make it clear that it is selling management control of the company, unlikethe minimum 4% in the previous stake sale plan; and 3) the PFOC is con-sidering easing or removing the MOU between KDIC and Woori as thesuccess of the sale will mean KDIC will no longer be the largest shareholder.

Woori FH privatization roadmap

Source: Deutsche Bank, FSC

Jeehoon ParkResearch Analyst(+82) 2 316 [email protected]

Clara JungResearch Associate(+82) 2 316 [email protected]



Asia IndiaTelecommunications

17 May 2011 - 09:46:59 PM IST

INDUSTRY ALERT Breaking NewsTelecommunications Vodafone India 4QFY11: positive operating trends

Focus stocksBharti Airtel Limited(BRTI.BO),INR370.85 Buy, PriceTarget INR460.00

Vodafone Group Plc(VOD.L),GBP168.25 Buy, Price Tar‐get GBP215.00

Vodafone's (VOD.L, Buy, GBP 168.25) 4QFY11 results for Indian operationsreflect an improving operating scenario for the incumbents. While the de‐cline in revenue/min (‐2.6% QoQ) was in line with Bharti's performance,traffic growth (8% QoQ) was better than the latter We note that overalloperating trends are marginally better than Bharti (Buy, Rs 370).

Vodafone ‐ 4QFY11: Traffic (119.2bn, 8% QoQ, 33% YoY), revenue/min (Rs0.557, ‐2.6% QoQ). Wireless revenues (Rs 71.6bn, 5% QoQ, 18% YoY).2HFY11 EBITDA margin at 25.1% (26.1% in 1HFY11).

Bharti ‐ Traffic (212bn, 6.5% QoQ, 22.5% YoY), revenue/min (Rs 0.431,‐2.4% QoQ). Wireless revenue (Rs 91.3bn, 3.8% QoQ, 11.5% YoY). 2HFY11EBITDA margin at 34.1% (35.6% in 1HFY11).We note that the traffic and revenue/min metrics disclosed by Vodafoneand Bharti are not comparable on an absolute basis due to difference in thecounting of on‐net minutes.

Key highlights from results/conference call:* The company has already rolled out 5500 3G sites and has guided for12000 sites by end of FY12E.* Vodafone generated operating free cash flow of GBP 433mn in FY11 inline with its guidance.* The company stated that it has gained 150bps revenue marketshare inFY11.Vodafone is covered by Robert Grindle, Deutsche Bank London.

Srinivas Rao, CFAResearch Analyst(+91) 22 6658 [email protected]

Amyn PiraniResearch Analyst(+91) 22 6658 [email protected]



Asia ASEAN ThailandConsumer Food & Beverage

17 May 2011 - 07:01:54 AM GMT


CP All Buy

Key takeaways from analyst meeting

Reuters:CPALL.BK Exchange:SET Ticker:CPALL

Price (THB) 44.00

Price target (THB) 46.00

52-week range (THB) 45.75 - 26.25


Shares outstanding (m) 4,500.0


Book value/share (THB) 5.46

Price/book (x) 8.1

FYE 12/31 2010A 2011E 2012E

Sales(THBm)

140,744 162,568 185,383

Net Profit(THBm)

6,663.5 7,886.0 9,511.2

DB EPS(THB)

1.48 1.75 2.11

PER (x) 21.7 25.1 20.8

Yield (net)(%)

3.5 3.2 3.9

Rain and floods dampened SSS growth in 1Q11CPALL blamed the lackluster SSS growth of 4.7% in 1Q11 on abnormalrainfall and flooding in some southern provinces. It said that these factorsreduced traffic to its stores (the number of customers per store dipped0.2% YoY) and hurt sales of chilled drinks.New products should boost sales growthCPALL is introducing new products and services in its CV outlets includingE-Zy Go (frozen food), 7-Catalog (online shopping) and Book Smile (bookshelves). Management believes other growth drivers will be chilled food,Kudsan Bakery (selling freshly brewed coffee and bakery products) and Exta(healthcare store format). Its strategy is to replace products with low salesper square metre, i.e. grocery items, with faster turnover products, i.e. food.

172 new stores opened in 1Q11The company opened 172 new stores in 1Q11, well above the 139 and 134outlets it opened in 1Q10 and 1Q09 respectively. This puts it well on trackto reach its target of 500 additional outlets this year. At end-March, thecompany was operating 5,962 7-Eleven stores, of which 52% are in up-country areas.Stronger margins due to improved economies of scaleBesides top line growth, we expect CPALL to benefit from improvedeconomies of scale. Note that in 1Q11, its SG&A to sales ratio fell to 20.9%from 21.4% in 1Q10, with sales growth of 16.9% YoY outpacing a rise inSG&A expense of 14.6%. This resulted in a rise in its net profit margin andRoAE of 4.8% and 41.6% respectively in 1Q11 from 4.4% and 35% in 1Q10.We maintain our Buy rating on the stock with a DCF-based target price ofBt46.

Chalinee CongmuangTisco Securities Co, LtdResearch Analyst(+66) 2 633 [email protected]



Asia ASEAN Philippines Telecommunications Wireless

17 May 2011

Globe Telecom Reuters: GLO.PS Bloomberg: GLO PM Exchange: PHS Ticker: GLO

Inching up

Gio Dela-Rosa, CFA Deutsche Regis Partners, Inc. Research Analyst (+63) 2 894 6642 [email protected]

Carissa Mangubat Deutsche Regis Partners, Inc. Research Associate (+63) 2 894 6647 [email protected]

Still a Hold We tweak our estimates following 1Q11 results from Globe, which saw it register an 8% rise in service revenue. Notwithstanding the slight increase in our profit estimates for FY11E and FY12E, we are retaining our price target (P900) and Hold rating. The stock remains fairly valued, in our view, relative to its underlying operational prospects.


Year End Dec 31 2009A 2010A 2011E 2012E

Sales (PHPm) 63,861.6 65,548.3 70,568.6 73,105.2

EBITDA (PHPm) 35,605.8 33,067.8 35,148.1 36,369.6

Reported NPAT (PHPm) 12,517.9 9,744.9 10,318.6 11,334.7

Reported EPS FD(PHP) 94.58 73.63 77.97 85.64

DB EPS FD(PHP) 90.31 68.57 78.45 86.08

OLD DB EPS FD(PHP) 90.31 73.56 74.45 80.18

% Change -0.0% -6.8% 5.4% 7.4%

DB EPS growth (%) 1.6 -24.1 14.4 9.7

PER (x) 10.1 13.0 11.0 10.0

EV/EBITDA (x) 4.5 4.8 4.3 4.1

DPS (net) (PHP) 114.00 80.00 60.00 70.17

Yield (net) (%) 12.5 9.0 7.0 8.2Source: Deutsche Bank estimates, company data



Company Update

Hold Price at 17 May 2011 (PHP) 860.00Price target - 12mth (PHP) 900.0052-week range (PHP) 910.00 - 660.00MANILA S.E.COMPOSITE 4,301

Key changes

Sales (FYE) 67,867 to 70,569 4.0%Op prof margin (FYE) 25.1 to 23.9 -5.0%Net profit (FYE) 9,790.1 to 10,318.6 5.4%


400

800

1200

1600

2000

5/09 8/09 11/09 2/10 5/10 8/10 11/10 2/11Globe Telecom

MANILA S.E.COMPOSITE (Rebased)

Performance (%) 1m 3m 12mAbsolute 1.2 15.4 -6.0MANILA S.E.COMPOSITE 1.2 11.2

Stock data

Market cap (PHPm) 113,778Market cap (USDm) 2,627Shares outstanding (m) 132.3Major shareholders SingTel (45%)Free float (%) 20Avg daily value traded (USDm) 1.3


ROE (%) 21.5Net debt/equity (%) 82.8Book value/share (PHP) 372.11Price/book (x) 2.3Net interest cover (x) 6.7Operating profit margin (%) 23.9

Gaining ground? Globe surprised the market by reporting a solid 8% growth in service revenue in 1Q11, implying market share gains vis-à-vis its main competitor PLDT (-4% service revenue in 1Q11). Gains were made in both the cellular and broadband businesses, with revenue growth of 4% and 52%, respectively.

Underlying industry trajectory unchanged In our view, the revenue improvements in 1Q are clearly a positive sign, but there is a limit on how much market share gains can add to Globe’s revenue going forward, especially with the presence of a strong competitor. Our subdued outlook for the industry remains little changed, and we expect minimal revenue growth for the industry at large.

Price target maintained at P900 We retain our price target of P900, which was derived using DCF (14% COE, zero terminal growth). The key risk (downside and upside) relates to the competitive environment, especially in light of PLDT’s impending acquisition of Digitel. Technological advances also pose downside risk. See page 4 for details.



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Property Property

17 May 2011 - 10:42:04 AM GMT

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Vista Land & Lifescapes Inc Buy

1Q11 core operations on track, outlook positive

Reuters:VLL.PS Exchange:PHS Ticker:VLL

Price (PHP) 3.30

Price target (PHP) 3.43

52-week range (PHP) 3.60 - 1.56

Market cap (USDm) 651

Shares outstanding (m) 8,538.7

Net debt/equity (%) 4.4

Book value/share (PHP) 4.41

Price/book (x) 0.7

FYE 12/31 2009A 2010E 2011E

Sales (PH-Pm)

9,630 10,821 12,139

Net Profit(PHPm)

2,299.4 2,727.4 3,234.2

DB EPS(PHP)

0.27 0.32 0.38

PER (x) 6.0 10.3 8.7

Yield (net) 2.0 1.6 1.9

Core operations on trackVista Land's 1Q11 net profit rose 26% to P873mn, 27% and 26% of DBand consensus FY forecasts. Earnings received a boost from tax holidays.Meanwhile, core operations are on track to meet our FY forecasts. Resi-dential revenue increased 22% to P3.3bn while operating profit climbed23% to P886mn. Presales rose 17% to P5.9bn, 25% of our FY forecast.Positive guidanceManagement guidance for revenue (P13bn, above) , net profit (P3.4bn,above), and presales (P24bn, in line) are in line or higher than our FY11 fore-casts (see table below).Tax holidays provide a boostTaxes fell 23% to P121mn, only 14% of our full-year forecast. The companyhas been granted tax holidays on some units which are below P3mn/unit.Thus, the effective tax rate fell to 12% from 19% in 1Q11. The companyexpects to continue availing of tax holidays going forward.Expansion plansThe company plans to expand in terms of geography and product. It intendsto increase its presence to about 40 provinces from about 21 currently.Within Metro Manila, VLL will launch more mid-rise buildings. It will alsodevelop commercial/retail properties in its communities. Vista Land is tar-geting P1bn in leasing revenue in the next five years.Potential beneficiary of PPPWe consider Vista Land the most direct beneficiary of PPP among propertydevelopers. We estimate that 40% of its NAV is in the EVIA/Daang Hariarea. This portion of the land bank may appreciate due to the planned DaangHari-SLEX link.

Vista Land financial summary

Source: Co mpany data, Deutsche Bank

Carl Sy, CFADeutsche Regis Partners, Inc.Research Analyst(+63) 2 894 [email protected]

Rafael GarchitorenaDeutsche Regis Partners, Inc.Research Analyst(+63) 2 894 [email protected]



Japan Technology Electronics/Industrial

17 May 2011

Toshiba Reuters: 6502.T Bloomberg: 6502 JT Exchange: TYO

Ticker: 6502

Raising TP to ¥570; Earnings could top FY3/12 guidance

Takeo Miyamoto Research Analyst (+81) 3 5156-6726 [email protected]

Reiterating Buy. Raise target price to ¥570 The direct and indirect impact on Toshiba from the earthquake is negligible and is likely to be offset by the strength of its businesses overall. We look for higher profitability than previously anticipated for the memory business due to its technology lead in miniaturization and advantages derived from greater scale. Profit growth continues in the social infrastructure business, which is likely to benefit from reconstruction demand. We reiterate our Buy rating because we believe the current share price does not fully reflect the company's growth.


Year End Mar 31 2011A 2012E 2012CoE 2013E 2014E

Sales (¥bn) 6,398.5 6,950.0 7,000.0 7,450.0 7,600.0

YoY (%) 0.3 8.6 9.4 7.2 2.0

Operating profit (¥bn) 240.3 350.0 300.0 440.0 480.0

YoY (%) 105.0 45.7 24.9 25.7 9.1

Recurring profit (¥bn) 195.5 300.0 240.0 410.0 450.0

Net profit (¥bn) 137.8 175.0 140.0 218.0 241.0

EPS (¥) 31 40 33 49 55

P/E (x) 14.5 10.9 12.9 8.8 7.9

EV/EBITDA (x) 5.6 4.5 – 3.7 3.4

CFPS (¥) 94 104 – 118 123

P/CFPS (x) 4.8 4.2 – 3.7 3.5Source: Deutsche Securities Inc. estimates, company data

Forecast Change

Buy Price at 16 May 2011 (¥) 433Price target - 12mth (¥) 57052-week range (¥) 549 - 331

Key changes

Target price (¥) 510 to 570 11.8%EPS (¥) 38 to 40 5.4%OP (¥bn) 330.0 to 350.0 6.1%


280320360400440480520560600

5/09 11/09 5/10 11/10Toshiba

TOPIX (Rebased)

Performance (%) 1m 3m 12mAbsolute 7.4 -21.1 -14.3TOPIX -1.4 -14.2 -11.4

Stock data

Market cap (¥bn) 1,835Shares outstanding (m) 4,238Foreign shareholding ratio (%) 24.6TOPIX 830


ROE (%) 18.6BPS (¥) 240P/B (x) 1.8EPS growth (%) 27.0Dividend yield (%) 1.4

Restructuring benefits to provide underlying support for FY3/12 earnings We believe earnings stability has improved now that the benefits of restructuring are emerging. In FY3/11, the HDD and system LSI businesses were loss-making but both are already on target to post higher earnings. Mgmt is taking concrete steps to bolster low-profit businesses and Toshiba plans to make business management more efficient by unifying the TV and PC businesses from FY3/12. Profitability gains in the memory business and earnings expansion in the social infrastructure business should not be wiped out by other businesses and these segments should boost company-wide earnings. Revising forecasts FY3/12 guidance is for OP of ¥300.0bn. This appears to include a profit risk of ¥50.0bn for each segment and company-wide expenses. We still see a risk of disruptions to the supply chain, but expect Toshiba to resolve any issues at an early stage. Our forecast for FY3/12 OP is ¥350.0bn, effectively the same as guidance. For FY3/13, we forecast OP of ¥440.0bn, driven by the expansion of the memory business and improved margins. We revise our EPS estimate for FY3/12 from ¥38 to ¥40, for FY3/13 from ¥44 to ¥49, and we set FY3/14 EPS at ¥55. Valuation and risk Our TP is ¥570 (previously ¥510). We think profit-based valuations are appropriate as we expect Toshiba to remain profitable. We apply the Bloomberg Finance LP consensus sector average of 12x (unchanged) to our FY3/13 estimates to calculate our TP. Downside risks include sharply lower NAND flash prices, setbacks with semiconductor miniaturization, aggressive capital spending by rival semiconductor manufacturers, a global retreat from nuclear power, and restructuring delays.

18 May 2011 Strategy Asia Equities Daily Focus 18 May 2011 Strategy Asia Equities Daily Focus


Japan Health Care & Pharmaceuticals

17 May 2011

Takeda Pharmaceutical Reuters: 4502.T Bloomberg: 4502 JT Exchange: TYO Ticker: 4502

Revising forecasts post FY3/11 results, cutting target price; Hold Kenji Masuzoe, CMA Research Analyst (+81) 3 5156 6764 [email protected]

Akiko Shishido Research Associate (+81) 3 5156-6319 [email protected]

TP revised down from ¥3,500 to ¥3,300 We have reviewed our forecasts for Takeda Pharmaceutical for the next four years based on FY3/11 results. We reduce FY3/15 EPS by 3.6%. As a result, we are lowering our TP from ¥3,500 to ¥3,300. At current levels, we think Takeda shares are slightly overvalued. That said, we reiterate our Hold rating as Takeda has maintained its high dividend amid stock market uncertainty, and lower earnings from the patent cliff are to some extent priced in, so there are almost no near-term negative factors.


Year End Mar 31 2011A 2012E 2012CoE 2013E 2014E

Sales (¥bn) 1,419.4 1,427.3 1,450.0 1,295.1 1,252.1

Operating profit (¥bn) 367.1 411.0 390.0 304.4 270.3

YoY (%) -12.6 12.0 6.2 -25.9 -11.2

Recurring profit (¥bn) 371.6 416.5 395.0 310.2 276.2

Net profit (¥bn) 247.9 268.5 250.0 199.4 177.3

EPS (¥) 314 340 317 253 225

P/E (x) 12.6 11.1 12.0 15.0 16.9Source: Deutsche Securities Inc. estimates, company data

Forecast Change

Hold Price at 17 May 2011 (¥) 3,785Price target - 12mth (¥) 3,30052-week range (¥) 4,105 - 3,660

Key changes

Target price (¥) 3,500 to 3,300 -5.7%EPS (¥) 377 to 340 -9.9%OP (¥bn) 452.3 to 411.0 -9.1%RP (¥bn) 461.5 to 416.5 -9.8%


3200

3600

4000

4400

5/09 11/09 5/10 11/10Takeda Pharmaceutica

TOPIX (Rebased)

Performance (%) 1m 3m 12mAbsolute -3.7 -6.3 -2.2TOPIX -1.5 -14.9 -9.9

Stock data

Market cap (¥bn) 2,989Shares outstanding (m) 790Foreign shareholding ratio (%) 32.5TOPIX 829


ROE (%) 12.2BPS (¥) 2,866P/B (x) 1.3EPS growth (%) 8.3Dividend yield (%) 4.8

Our earnings estimate revisions Compared to our previous forecasts, our revised forecasts factor in a higher CoGS ratio (1%) and higher SG&A expense (some ¥18bn per year). These changes equate to a 9-11% cut in EPS for FY3/12-13E and a 3-6% cut for FY3/14-15E, when we expect new drugs to contribute. Patent cliff Takeda has disclosed a new medium-term plan to run through FY3/14. According to the plan, profit will rise in FY3/12, but will decline from FY3/13, when diabetes drug Actos (FY3/11 sales $3.559bn) reaches a patent cliff (sales decline from launch of generic drugs). The plan projects that OP will decline to ¥240.0bn (our forecast ¥270.2bn) in FY3/14 before rising again due to new drug contributions. The decline in profit from the patent cliff is within the expected range, and we forecast a similar earnings trend. We look for attention to start to focus on the degree of recovery after profit has bottomed, but we believe it will take a number of years for OP to reach the FY3/10 level of ¥420.2bn. Valuation and risk We base our TP of ¥3,300 on the average P/E of 13x for the pharmaceutical companies we cover and our FY3/15 EPS forecast of ¥256.4 (our previous TP of ¥3,500 was based on the same methodology and our previous EPS forecast of ¥265.9). Upside risks include shareholder return policies, including using Takeda's surplus cash for further share buybacks or dividend hikes, and profit creation through purchase of drugs, late-stage development drugs or acquisition of companies. Downside risks include delays or failure in the development of the diabetes drug Alogliptin, for which the company is planning to make a second NDA in 2011 (it received a complete response letter in June 2009), sluggish sales of domestic antihypertensive Blopress—a major contributor to earnings—from intensified competition, and yen appreciation squeezing profit.




Appendix 1 Important Disclosures

Additional information available upon request

For disclosures pertaining to recommendations or estimates made on a security mentioned in this report, please see the most recently published company report or visit our global disclosure look-up page on our website at http://gm.db.com/ger/disclosure/DisclosureDirectory.eqsr.

Analyst Certification

The views expressed in this report accurately reflect the personal views of the undersigned lead analyst about the subject issuers and the securities of those issuers. In addition, the undersigned lead analyst has not and will not receive any compensation for providing a specific recommendation or view in this report. Ching-Li Teo

Equity rating key Equity rating dispersion and banking relationships Buy: Based on a current 12- month view of total share-holder return (TSR = percentage change in share price from current price to projected target price plus pro-jected dividend yield ) , we recommend that investors buy the stock. Sell: Based on a current 12-month view of total share-holder return, we recommend that investors sell the stock Hold: We take a neutral view on the stock 12-months out and, based on this time horizon, do not recommend either a Buy or Sell. Notes: 1. Newly issued research recommendations and target prices always supersede previously published research.2. Ratings definitions prior to 27 January, 2007 were:

Buy: Expected total return (including dividends) of 10% or more over a 12-month period Hold: Expected total return (including dividends) between -10% and 10% over a 12-month period Sell: Expected total return (including dividends) of -10% or worse over a 12-month period

7%

34%

59%

12%11%12%

0

100

200

300

400

Buy Hold Sell

Asia-Pacific Universe

Companies Covered Cos. w/ Banking Relationship


http://gm.db.com/ger/disclosure/DisclosureDirectory.eqsr



Regulatory Disclosures

1. Important Additional Conflict Disclosures

Aside from within this report, important conflict disclosures can also be found at https://gm.db.com/equities under the "Disclosures Lookup" and "Legal" tabs. Investors are strongly encouraged to review this information before investing.

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Deutsche Bank equity research analysts sometimes have shorter-term trade ideas (known as SOLAR ideas) that are consistent or inconsistent with Deutsche Bank's existing longer term ratings. These trade ideas can be found at the SOLAR link at http://gm.db.com.

3. Country-Specific Disclosures

Australia: This research, and any access to it, is intended only for "wholesale clients" within the meaning of the Australian Corporations Act. Brazil: The views expressed above accurately reflect personal views of the authors about the subject company(ies) and its(their) securities, including in relation to Deutsche Bank. The compensation of the equity research analyst(s) is indirectly affected by revenues deriving from the business and financial transactions of Deutsche Bank. EU countries: Disclosures relating to our obligations under MiFiD can be found at http://globalmarkets.db.com/riskdisclosures. Japan: Disclosures under the Financial Instruments and Exchange Law: Company name - Deutsche Securities Inc. Registration number - Registered as a financial instruments dealer by the Head of the Kanto Local Finance Bureau (Kinsho) No. 117. Member of associations: JSDA, The Financial Futures Association of Japan. Commissions and risks involved in stock transactions - for stock transactions, we charge stock commissions and consumption tax by multiplying the transaction amount by the commission rate agreed with each customer. Stock transactions can lead to losses as a result of share price fluctuations and other factors. Transactions in foreign stocks can lead to additional losses stemming from foreign exchange fluctuations. "Moody's", "Standard & Poor's", and "Fitch" mentioned in this report are not registered credit rating agencies in Japan unless “Japan” is specifically designated in the name of the entity. New Zealand: This research is not intended for, and should not be given to, "members of the public" within the meaning of the New Zealand Securities Market Act 1988. Russia: This information, interpretation and opinions submitted herein are not in the context of, and do not constitute, any appraisal or evaluation activity requiring a license in the Russian Federation.

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International locations

Deutsche Bank Securities Inc. Deutsche Bank AG London Deutsche Bank AG Deutsche Bank AG 60 Wall Street 1 Great Winchester Street Große Gallusstraße 10-14 Deutsche Bank Place New York, NY 10005 London EC2N 2EQ 60272 Frankfurt am Main Level 16

United States of America United Kingdom Germany Corner of Hunter & Phillip Streets Tel: (1) 212 250 2500 Tel: (44) 20 7545 8000 Tel: (49) 69 910 00 Sydney, NSW 2000

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