2014-04-17 DHG (Maybank Kim E) Maybank Kim Eng - Key Ideas From the Region

April 14, 2014

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SEE PAGE 11 FOR IMPORTANT DISCLOSURES AND ANALYST CERTIFICATIONS Co. Reg No: 198700034E MICA (P) : 099/03/2012

The Roundtable Key Ideas from the Region Regional Highlight

The Singapore and Malaysian leaders have just concluded their 5th annual Leaders Retreat - their commitment to the KL-Singapore High Speed Rail project was reiterated and is expected to roll out by 2020. Singapore has highlighted three possible locations for this rail terminal whilst Malaysias will be based at Sungei Besi. Separately, the Rail Transit System connecting Singapore and Johor Bahru proposal has also been completed.

We view these developments as positive in particular for the Iskandar region as there are numerous potential economic benefits including 1) alleviate the current oversupply in the property sector 2) encourage knowledge and skills transfer 3) reduction in road and air traffic congestion and 4) increase business activity 5) enhance bilateral ties. Potential plays on this theme include Masteel (train and construction works and increased demand for steel bars), UEM Sunrise (property developer with the largest exposure to the Iskandar region).

Country Focus: VN|DHG Pharmaceutical (DHG VN): The largest domestic

pharma company which is doubling its current capacity to 9b units. Volume wise, its brand Hapacol has the same market share as Panadol. Its extensive distribution network is set to expand with 20k pharmacies and hospitals being reached regionally by some 1200 salesmen. DHG trades on 14.2x FY14 PE (a slight premium to history) with consensus ratings at 3B, 2H, 0S and average TP at VND155,750 (+11% upside).

SP|Cordlife Group (CLGL SP): a stem cell banker moving into multiple growth channels (new markets, new products and storage capacity increase of 10x). Execution remains key with so many moving parts. Maybank KE TP SGD1.43 (17% upside) based on SOP. Consensus average TP SGD1.52 with 3B, 2H, 0S.

SP|Centurion Corp (CENT SP): Centurion is the only listed provider of mass worker accommodation services and one of the largest in terms of capacity in Singapore. It is expanding into Malaysia, Indonesia and also into student accommodation in Australia. The company is set for significant growth in earnings driven by acquisition of new assets. Stock trades at 6.6x trailing PE (19.2x FY14 PE) and has 3 Buys with an average TP of SGD0.84 (+11% upside).

Analysts

Ong Seng Yeow(65) 6432 [email protected]

Tee Sze Chiah (603) 2297 [email protected]

[email protected] FooSuan Yee 05/23/14 06:01:04 AM IMC INVESTMENTS PTE. LTD.

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KL-Singapore: High speed rail terminal still on track Singapore PM and Malaysian PM have just concluded the 5th Annual Leaders Retreat. Discussions reiterated their commitment to the KL-Singapore high speed rail (HSR) project. Singapore has picked three possible areas for the rail terminal which is expected to roll out in 2020. The areas include Tuas West, Jurong East and the city centre. Meanwhile Malaysias main rail terminal will be at Sungei Besi.

The HSR will likely have seven stations: 2 terminus stations (KL and Singapore) and 5 transit stops (1 in Negri Sembilan, 1 in Malacca and 3 in Johor). The project is expected to cut travelling time between the 2 countries to 90 minutes vs the current driving time of 5 hours.

No estimates of the costs involved have been provided to date. Whilst a myriad of decisions need to be settled such as design, financing, security and immigration requirements, Prime Minister Datuk Seri Najib Tun Razak said that the first phase of the joint engineering study to develop possible alignment for the project and the proposal for the Rail Transit System (RTS) connecting Singapore and Johor Bahru was completed.

We view this development as particularly positive for the long term development of Iskandar Malaysia as it will partly address current supply-demand issues in the property sector. In addition, as Singapore upgrades its manufacturing sectors we expect to see an increasing shift towards Iskandar due to current land constraints. The economic benefits are numerous: 1) encourage transfer of knowledge and an increase in skilled labour as new services, manufacturing and investments rise in the region 2) lessen the impact on the environment (reduce road and air traffic congestion) 3) increase business activity and regeneration 4) enhance bilateral ties.

In the past, Metropolitan Commuter Network Sdn Bhd (MCN), 60% owned by Malaysia Steel Works (Masteel) and 40% by KUB Malaysia Bhd, was said to be involved in building and operating the rail transit system at Iskandar Malaysia in Johor. The 100km inter-city rail system will also be linked to the Mass Rapid Transit line in Singapore.

We understand that Masteel was offered land (14.3 ha) in Kempas, Johor to build a train depot back in 2012. Hence, the company stands a good chance if the RTS is a go. If this comes to fruition, Masteel will benefit from two fronts: 1) project development (property and construction works) and 2) higher demand for its steel bars. Masteel currently trades on 8.3x FY14 PE whilst consensus has an average TP of RM1.17 (1B, 2H).

Secondly, UEM Sunrise as the property developer with the largest exposure to Iskandar (more specifically Nusajaya) is likely to be a key beneficiary given the preliminary plans for the HSR to go through Nusajaya. UEM is currently trading on 17.1x FY14 PE and 1.7x PB (vs average 5 year level of 2.4x). The stock at RM2.24 is 39% below its 52 week high and 11% above its low of RM2.02. Consensus average TP is RM2.72 (+19% upside) with 12B, 5H, 2S. Maybank currently has a HOLD on UEMS with a TP of RM2.10 (a 49% discount to RNAV of RM4.11). We reiterate, however, that concerns remain on significant oversupply situation in Iskandar hotspots on aggressive launches by Chinese property players.


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Figure 1: Proposed HSR Alignment

Source: Land Public Transport Commission


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Cordlife Group (CLGL SP) Banking on cord tissue Share px (SGD): 1.16 MCap (USD): 248m Singapore

Target px (SGD): 1.43 (+23%) ADTV (USD):0.8m Healthcare

John Cheong | +65 6432 1461 | [email protected]

Cordlife is a stem cell banking company. It originally started out with

cord blood banking but is now adding umbilical cord tissue banking i.e. the collection, processing, testing, preservation and storage of the umbilical cord itself. New storage facility in Yishun has a capacity of 650k units vs 60k previously. Current market share: Sing 62%, HK 28% and for Malaysia, Phils, India and Indonesia Cordlife is a top 3 provider (out of a handful).

Revenue comprises fixed upfront payment and a recurring 10 year storage fee. Recurring revenue is estimated at 4% of FY12 revenue and will likely grow in proportion to new sign-ups. The company is in the growth stage with additional markets and products recently added. The next phase will be scaling up and reaping the benefits of economies of scale. Maybank KE is forecasting a 61% revenue growth and 45% core net profit growth which will be driven by China associate, new markets (Malaysia, Phils, India and Indonesia) and new products (cord tissue).

Cordlife owns a 10% stake (acquired 7.3m shares at USD2.85) in China

Cord Blood Corp (CCBC) which is the sole cord blood bank operator in Beijing, Guangdong (through CSCS), Zhejiang and a 24% stake in Shandong with a c.62% market share. China is a high growth market and has semi open government policies. CCBC is the only operator that has multiple licences and operates in 4 of the 7 provinces authorized to provide cord blood banking services. CCBC associate is expected to contribute 23% of Maybank KEs FY14 net profit at SGD3.2m (+16% yoy growth expected). However, we caveat this may be impacted negatively by convertible bond accounting standards (although this is non cash in nature and will not impact on EBIT or cash flow).

Phils / India and Indonesia are targeted growth markets and will contribute 37% (SGD22.3m) to the analysts FY14 revenue and c. 4% of FY14 net profit.

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Cordlife Group Limited (P8A-SES) [Delayed]1.16 -0.00 -0.43% 03:46:24 PM SGD 04/11/2013 - 04/11/2014

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Figure 2: CCBCs operations in China

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Figure 3: Forecast earnings by product/market

Source: Maybank, Company


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69.0%69.0%

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Cordlife Group Limited (P8A-SES)Gross Margin

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Cordlife is expanding into new products, namely umbilical cord tissue storage which started in HK in FY12 and has recently launched in Singapore. This segment is estimated to contribute SGD4.9m to FY14 revenues (c. 8%).

The company acquired a 19.9% stake in Stemlife for RM30m in Sept

2013, which provides it with a foothold in higher birth rate countries of Malaysia (500k babies pa) and Thailand (800k babies pa) vs Singapores 40k. Synergies include lower labour costs and in house testing process capabilities which will reduce more expensive outsourced costs. (Sing margins can be expected to expand by 10% on this cost front).

Key risks: New biomedical breakthroughs. High reputational risk. Reliance on key management. Execution risk on many moving parts of the business.

Maybank-KE has a BUY with SOP TP SGD1.43. Consensus: 3B, 2H, 0S.

Average target price SGD1.52.

Figure 5: Cordlife global peer comparison

Source: Maybank

Figure 4: Cordlife margins

Source: Factset


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DHG Pharmaceutical JSC (DHG VN) Mega Pharma

Share px (VND): 140,000 MCap (USD): 434m Vietnam

Target px (VND): n/a ADTV (USD): 0.131m Healthcare

Tuyen Nguyen|+84 844555888 (x8081) | [email protected]

DHG produces and trades pharmaceutical products. Products include pharmaceutical drugs, cosmetics and dietary supplements. Manufactured goods are 85% of revenue, traded products (merchandise goods and raw materials) are 10% whilst others is 5%. Of the manufactured product sales, 92% came from pharmaceuticals, 8% from dietary supplements with a very small contribution from cosmetics.

DHGs market share is 12% amongst domestically produced pharmaceuticals but 3% when we include foreign brands. It is a top 5 player. Total pharmaceutical spend in Vietnam has grown at a 16%, 10 year CAGR to USD2.8b.

Manufactured goods are primarily generic drugs (analgesics, antibiotics and respiratory) and this segment typically has gross margins of 50%. Current capacity is 4.6b units and has doubled to 9b units due to the recent completion of a new plant. However, utilization will gradually ramp up and is expected to run at 72% by the end of the first year of operations. By comparison to domestic peers, DHGs capacity is 2x larger than the second largest player. Branded products represent 50% of revenue. Hapacol branded painkiller is roughly 16-18% of revenue and is as popular as Panadol. In terms of volume Hapacol and Panadol have similar market share however it sells at almost half the price and yet its pricing is generally regarded as within the mid end range.

Traded products (merchandise goods) represent the trading of other

domestic and foreign pharmaceuticals (Merck) products. Typically, gross margins for the traded segment are between 10-20%. Traded products supplement the SKUs at the 68 hospital drugstores nationwide and aid in raising the efficiency of DHGs distribution system.

Further growth in DHG will stem from 1) herbal medicines and dietary

supplements 2) increased investment in marketing and branding and 3) enhanced distribution. The outlook for herbal supplements is promising on continued consumer awareness and preference for herbal medicines. In addition, it is less costly to manufacture as the raw materials can be sourced domestically. Prices are not subject to government control. The market is small at less than 10% of Vietnams pharma market. 2013 marks the first time that DHG will advertise its

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products via mass media and this is expected to continue driving sales into 2014.

On the distribution front DHG already has an enviable network. It is present in all 64 provinces and is particularly strong in the north and Mekong Delta. DHG has 12 distribution subsidiaries, 24 branches and 68 hospital drugstores with more than 1200 salesmen directly selling to 20k pharmacies and hospitals. They will focus their efforts on expanding their intermediate warehouses particularly in the north and central regions.

DHGs FY13 net revenue grew 20% to VND3,527b. Gross margin fell on a yoy basis to 45.8% from 49.3% in 2012 which was mainly attributed to rising COGS. However it remains in line with the 5 year average at 45.2%. Net profit came in at VND589b (+20% yoy). Excluding the exceptional gain (c.USD6m) from selling their Eugica brand to Mega Lifesciences (Thailand), net profit would have been relatively flat at -5% yoy. SG&A to sales ratio was at 28.8% vs 31.7% in 2012 with the trend staying more or less flat over the last 4 years. R&D expenses are c. VND99b (17% of EBIT) and lumped under SG&A. 80% of COGs are imported and raw materials (active pharmaceutical ingredients) is usually 50% of COGs. Balance sheet remains healthy with net cash of VND656m (c. USD31m) and despite net cash, DHG manages ROEs in excess of 30%.

Key risks: Intense competition especially from foreign brands. Rise in imported raw materials. Regulated ASPs. Regulations which may allow foreign firms to distribute pharma products directly into Vietnam.

DHG trades on 14.2x FY14 PE (a 10% premium over average 5 year history) with consensus estimates for 8% growth in FY14 EPS. Consensus: 3B, 2H, 0S. Average target price VND155,750 (+11% upside). The company is also likely to address stock liquidity potentially via a bonus issue. (SCIC owns 43.3% while foreign ownership is already at the 49% limit).

Figure 6: DHG gross margin

Source: Factset


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Centurion Corp (CENT SP) A comfortable roof Share px (SGD): 0.78 MCap (SGD): 464m Singapore

Target px (SGD): n/a ADTV (SGD):2.86m Real estate / lodging

Tee Sze Chiah | +603 2297 8677 | [email protected]

Centurion is one of the largest providers of workers accommodation in Singapore and Malaysia. Singapore market share is 15% and it is the only listed player in this space. The companys eight operational dorms have a capacity of 38,000 beds and it also operates RMIT Village, a 456 bed student accommodation that has been operating close to full capacity for the last 3 years. The company ventured into the accommodation business via a RTO in 2011 and was previously an optical disc manufacturer (still 29% of revenues) whilst accommodation is 71%.

The market is positive on this stock for 3 key reasons: 1) Rising demand on growing foreign worker requirements in the

construction, manufacturing and marine sectors. Further flamed by increasingly stricter requirements for proper housing due to the recent Little India riot in 2013, the government has announced plans to speed up construction of proper worker dormitories. Currently there are 771,000 foreigners holding work permits in Singapore but only 160,000 beds in proper worker dorms.

2) Centurion leases dorms on a per bed basis in which agreements typically last 1-2 years and receives a rental deposit of 2-4 months. The rental rate has seen a steady rise from SGD90 to SGD250-300 / bed per month over the last five years. Current occupancy is greater than 80% for each dorm.

3) Planned expansion of bed capacity to 53,300 (+40%) by 2015. In addition, the company has recently ventured into Indonesia where the development will be completed in 2016. RMIT Village (Australian student accommodation) is strategically located 10 minutes walk from RMIT University and across the road from Melbourne University. It has been fully occupied for the last 3 years. Moreover, Centurion is looking to develop the car park beside the current building into accommodation. Further growth opportunities may also stem from current bids in Qatar (20k beds) and Penang (25k beds).

Financials appear to be improving significantly as they focus on their

accommodation business. FY13 sales was +2% yoy but EBIT rose 25% yoy whilst adjusted net profit rose 23% to SGD18.8m (excluding one off SGD77.2m in fair value gains on investment properties and impairment

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Centurion Corporation Limited (OU8-SES) [Delayed]0.78 0.04 5.41% 02:34:56 PM SGD 04/10/2013 - 04/10/2014


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charge of SGD3.9m on optical disc equipment). Net profit from accommodation was SGD19.6m while opticals suffered a loss of SGD0.8m but still contributed positively to cash flow. Net gearing stands at 48% due to the SGD100m MTN issued in Oct 2013 to finance dorm expansion. Gross margins have averaged 47% in the last 3 years.

Key risks: Changes in regulations regarding foreign worker permits (more restrictive) and housing. Difficulties in acquiring new assets for growth.

Centurion has recently placed out 80m shares to increase float and liquidity. Lian Beng (construction company) has emerged as a substantial shareholder with a 5.03% stake with other private investors taking up the rest of the placement.

Consensus: 3 Buys with average TP of SGD0.84. The stock currently trades at 6.6x trailing PE (19.2x FY14 PE) and 2.1x PB.

Figure 7: Centurion gross & EBIT margin

Source: Factset


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Research Offices

REGIONAL

WONG Chew Hann, CA Regional Head of Institutional Research (603) 2297 8686 [email protected]

ONG Seng Yeow Regional Head of Retail Research (65) 6432 1453 [email protected]

Alexander GARTHOFF Institutional Product Manager (852) 2268 0638 [email protected]

ECONOMICS

Suhaimi ILIAS Chief Economist Singapore | Malaysia (603) 2297 8682 [email protected]

Luz LORENZO Philippines (63) 2 849 8836 [email protected]

Tim LEELAHAPHAN Thailand (662) 658 1420 [email protected]

JUNIMAN Chief Economist, BII Indonesia (62) 21 29228888 ext 29682 [email protected]

Josua PARDEDE Economist / Industry Analyst, BII Indonesia (62) 21 29228888 ext 29695 [email protected]

MALAYSIA

WONG Chew Hann, CA Head of Research (603) 2297 8686 [email protected] Strategy Construction & Infrastructure

Desmond CHNG, ACA (603) 2297 8680 [email protected] Banking & Finance

LIAW Thong Jung (603) 2297 8688 [email protected] Oil & Gas - Regional Shipping

ONG Chee Ting, CA (603) 2297 8678 [email protected] Plantations - Regional

Mohshin AZIZ (603) 2297 8692 [email protected] Aviation - Regional Petrochem

YIN Shao Yang, CPA (603) 2297 8916 [email protected] Gaming Regional Media

TAN Chi Wei, CFA (603) 2297 8690 [email protected] Power Telcos

WONG Wei Sum, CFA (603) 2297 8679 [email protected] Property & REITs

LEE Yen Ling (603) 2297 8691 [email protected] Building Materials Glove Producers

CHAI Li Shin (603) 2297 8684 [email protected] Plantation Construction & Infrastructure

KANG Chun Ee (603) 2297 8675 [email protected] Consumer

Ivan YAP (603) 2297 8612 [email protected] Automotive

LEE Cheng Hooi Regional Chartist (603) 2297 8694 [email protected]

Tee Sze Chiah Head of Retail Research (603) 2297 6858 [email protected]

HONG KONG / CHINA

Howard WONG Head of Research (852) 2268 0648 [email protected] Oil & Gas - Regional

Alexander LATZER (852) 2268 0647 [email protected] Metals & Mining - Regional

Jacqueline KO, CFA (852) 2268 0633 [email protected] Consumer

Karen KWAN (852) 2268 0640 [email protected] Property & REITs

Osbert TANG, CFA (852) 21 5096 8370 [email protected] Transport & Industrials

Ricky WK NG, CFA (852) 2268 0689 [email protected] Utilities & Renewable Energy

Simon QIAN, CFA (852) 2268 0634 [email protected] Telecom & Internet

Steven ST CHAN (852) 2268 0645 [email protected] Banking & Financials

Warren LAU (852) 2268 0644 [email protected] Technology Regional

William YANG (852) 2268 0675 [email protected] Technology Regional

INDIA

Jigar SHAH Head of Research (91) 22 6623 2601 [email protected] Oil & Gas Automobile Cement

Anubhav GUPTA (91) 22 6623 2605 [email protected] Metal & Mining Capital Goods Property

Urmil SHAH (91) 22 6623 2606 [email protected] Technology Media

SINGAPORE

NG Wee Siang Head of Research (65) 6432 1467 [email protected] Banking & Finance

Gregory YAP (65) 6432 1450 [email protected] SMID Caps Regional Technology & Manufacturing Telcos

Wilson LIEW (65) 6432 1454 [email protected] Property Developers

ONG Kian Lin (65) 6432 1470 [email protected] S-REITs

James KOH (65) 6432 1431 [email protected] Consumer - Regional

YEAK Chee Keong, CFA (65) 6432 1460 [email protected] Offshore & Marine

Derrick HENG (65) 6432 1446 [email protected] Transport (Land, Shipping & Aviation)

WEI Bin (65) 6432 1455 [email protected] Commodity Logistics S-chips

John CHEONG (65) 6432 1461 [email protected] Small & Mid Caps Healthcare

TRUONG Thanh Hang (65) 6432 1451 [email protected] Small & Mid Caps

INDONESIA

Wilianto IE Head of Research (62) 21 2557 1125 [email protected] Strategy

Rahmi MARINA (62) 21 2557 1128 [email protected] Banking & Finance

Aurellia SETIABUDI (62) 21 2953 0785 [email protected] Property

Anthony YUNUS (62) 21 2557 1136 [email protected] Consumer Poultry

Isnaputra ISKANDAR (62) 21 2557 1129 [email protected] Metals & Mining Cement

Pandu ANUGRAH (62) 21 2557 1137 [email protected] Infrastructure Construction Transport

Janni ASMAN (62) 21 2953 0784 [email protected] Cigarette Healthcare Retail

PHILIPPINES

Luz LORENZO Head of Research (63) 2 849 8836 [email protected] Strategy

Laura DY-LIACCO (63) 2 849 8840 [email protected] Utilities Conglomerates Telcos

Lovell SARREAL (63) 2 849 8841 [email protected] Consumer Media Cement

Rommel RODRIGO (63) 2 849 8839 [email protected] Conglomerates Property Gaming Ports/ Logistics

Katherine TAN (63) 2 849 8843 [email protected] Banks Construction

Ramon ADVIENTO (63) 2 849 8845 [email protected] Mining

THAILAND

Maria LAPIZ Head of Institutional Research Dir (66) 2257 0250 | (66) 2658 6300 ext 1399 [email protected] Consumer / Materials

Jesada TECHAHUSDIN, CFA (66) 2658 6300 ext 1394 [email protected] Financial Services

Kittisorn PRUITIPAT, CFA, FRM (66) 2658 6300 ext 1395 [email protected] Real Estate

Sittichai DUANGRATTANACHAYA (66) 2658 6300 ext 1393 [email protected] Services Sector

Sukit UDOMSIRIKUL Head of Retail Research (66) 2658 6300 ext 5090 [email protected]

Mayuree CHOWVIKRAN (66) 2658 6300 ext 1440 [email protected] Strategy

Padon VANNARAT (66) 2658 6300 ext 1450 [email protected] Strategy

Surachai PRAMUALCHAROENKIT (66) 2658 6300 ext 1470 [email protected] Auto Conmat Contractor Steel

Suttatip PEERASUB (66) 2658 6300 ext 1430 [email protected] Media Commerce

Sutthichai KUMWORACHAI (66) 2658 6300 ext 1400 [email protected] Energy Petrochem

Termporn TANTIVIVAT (66) 2658 6300 ext 1520 [email protected] Property

Woraphon WIROONSRI (66) 2658 6300 ext 1560 [email protected] Banking & Finance

Jaroonpan WATTANAWONG (66) 2658 6300 ext 1404 [email protected] Transportation Small cap

Chatchai JINDARAT (66) 2658 6300 ext 1401 [email protected] Electronics VIETNAM LE Hong Lien, ACCA Head of Institutional Research (84) 844 55 58 88 x 8181 [email protected] Strategy Consumer Diversified Utilities

THAI Quang Trung, CFA, Deputy Manager, Institutional Research (84) 844 55 58 88 x 8180 [email protected] Real Estate Construction Materials

Le Nguyen Nhat Chuyen (84) 844 55 58 88 x 8082 [email protected] Oil & Gas NGUYEN Thi Ngan Tuyen, Head of Retail Research (84) 8 44 555 888 x 8081 [email protected] Food & Beverage Oil&Gas Banking

NGUYEN Trung Hoa, Dy Head of Retail Research (84) 8 44 555 888 x 8088 [email protected] Macro Steel Real estate

TRINH Thi Ngoc Diep (84) 4 44 555 888 x 8208 [email protected] Technology Utilities Construction

TRUONG Quang Binh (84) 4 44 555 888 x 8087 [email protected] Rubber plantation Tyres and Tubes Oil&Gas

PHAM Nhat Bich (84) 8 44 555 888 x 8083 [email protected] Consumer Manufacturing Fishery

NGUYEN Thi Sony Tra Mi (84) 8 44 555 888 x 8084 [email protected] Port operation Pharmaceutical Food & Beverage


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APPENDIX I: TERMS FOR PROVISION OF REPORT, DISCLAIMERS AND DISCLOSURES

DISCLAIMERS

This research report is prepared for general circulation and for information purposes only and under no circumstances should it be considered or intended as an offer to sell or a solicitation of an offer to buy the securities referred to herein. Investors should note that values of such securities, if any, may fluctuate and that each securitys price or value may rise or fall. Opinions or recommendations contained herein are in form of technical ratings and fundamental ratings. Technical ratings may differ from fundamental ratings as technical valuations apply different methodologies and are purely based on price and volume-related information extracted from the relevant jurisdictions stock exchange in the equity analysis. Accordingly, investors returns may be less than the original sum invested. Past performance is not necessarily a guide to future performance. This report is not intended to provide personal investment advice and does not take into account the specific investment objectives, the financial situation and the particular needs of persons who may receive or read this report. Investors should therefore seek financial, legal and other advice regarding the appropriateness of investing in any securities or the investment strategies discussed or recommended in this report.

The information contained herein has been obtained from sources believed to be reliable but such sources have not been independently verified by Maybank Investment Bank Berhad, its subsidiary and affiliates (collectively, MKE) and consequently no representation is made as to the accuracy or completeness of this report by MKE and it should not be relied upon as such. Accordingly, MKE and its officers, directors, associates, connected parties and/or employees (collectively, Representatives) shall not be liable for any direct, indirect or consequential losses or damages that may arise from the use or reliance of this report. Any information, opinions or recommendations contained herein are subject to change at any time, without prior notice.

This report may contain forward looking statements which are often but not always identified by the use of words such as anticipate, believe, estimate, intend, plan, expect, forecast, predict and project and statements that an event or result may, will, can, should, could or might occur or be achieved and other similar expressions. Such forward looking statements are based on assumptions made and information currently available to us and are subject to certain risks and uncertainties that could cause the actual results to differ materially from those expressed in any forward looking statements. Readers are cautioned not to place undue relevance on these forward-looking statements. MKE expressly disclaims any obligation to update or revise any such forward looking statements to reflect new information, events or circumstances after the date of this publication or to reflect the occurrence of unanticipated events.

MKE and its officers, directors and employees, including persons involved in the preparation or issuance of this report, may, to the extent permitted by law, from time to time participate or invest in financing transactions with the issuer(s) of the securities mentioned in this report, perform services for or solicit business from such issuers, and/or have a position or holding, or other material interest, or effect transactions, in such securities or options thereon, or other investments related thereto. In addition, it may make markets in the securities mentioned in the material presented in this report. MKE may, to the extent permitted by law, act upon or use the information presented herein, or the research or analysis on which they are based, before the material is published. One or more directors, officers and/or employees of MKE may be a director of the issuers of the securities mentioned in this report.

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This report is not directed to or intended for distribution to or use by any person or entity who is a citizen or resident of or located in any locality, state, country or other jurisdiction where such distribution, publication, availability or use would be contrary to law or regulation. This report is for distribution only under such circumstances as may be permitted by applicable law. The securities described herein may not be eligible for sale in all jurisdictions or to certain categories of investors. Without prejudice to the foregoing, the reader is to note that additional disclaimers, warnings or qualifications may apply based on geographical location of the person or entity receiving this report.

Malaysia

Opinions or recommendations contained herein are in the form of technical ratings and fundamental ratings. Technical ratings may differ from fundamental ratings as technical valuations apply different methodologies and are purely based on price and volume-related information extracted from Bursa Malaysia Securities Berhad in the equity analysis.

Singapore

This report has been produced as of the date hereof and the information herein may be subject to change. Maybank Kim Eng Research Pte. Ltd. (Maybank KERPL) in Singapore has no obligation to update such information for any recipient. For distribution in Singapore, recipients of this report are to contact Maybank KERPL in Singapore in respect of any matters arising from, or in connection with, this report. If the recipient of this report is not an accredited investor, expert investor or institutional investor (as defined under Section 4A of the Singapore Securities and Futures Act), Maybank KERPL shall be legally liable for the contents of this report, with such liability being limited to the extent (if any) as permitted by law.

Thailand

The disclosure of the survey result of the Thai Institute of Directors Association (IOD) regarding corporate governance is made pursuant to the policy of the Office of the Securities and Exchange Commission. The survey of the IOD is based on the information of a company listed on the Stock Exchange of Thailand and the market for Alternative Investment disclosed to the public and able to be accessed by a general public investor. The result, therefore, is from the perspective of a third party. It is not an evaluation of operation and is not based on inside information. The survey result is as of the date appearing in the Corporate Governance Report of Thai Listed Companies. As a result, the survey may be changed after that date. Maybank Kim Eng Securities (Thailand) Public Company Limited (MBKET) does not confirm nor certify the accuracy of such survey result.

Except as specifically permitted, no part of this presentation may be reproduced or distributed in any manner without the prior written permission of MBKET. MBKET accepts no liability whatsoever for the actions of third parties in this respect.

US

This research report prepared by MKE is distributed in the United States (US) to Major US Institutional Investors (as defined in Rule 15a-6 under the Securities Exchange Act of 1934, as amended) only by Maybank Kim Eng Securities USA Inc (Maybank KESUSA), a broker-dealer registered in the US (registered under Section 15 of the Securities Exchange Act of 1934, as amended). All responsibility for the distribution of this report by Maybank KESUSA in the US shall be borne by Maybank KESUSA. All resulting transactions by a US person or entity should be effected through a registered broker-dealer in the US. This report is not directed at you if MKE is prohibited or restricted by any legislation or regulation in any jurisdiction from making it available to you. You should satisfy yourself before reading it that Maybank KESUSA is permitted to provide research material concerning investments to you under relevant legislation and regulations.

UK

This document is being distributed by Maybank Kim Eng Securities (London) Ltd (Maybank KESL) which is authorized and regulated, by the Financial Services Authority and is for Informational Purposes only. This document is not intended for distribution to anyone defined as a Retail Client under the Financial Services and Markets Act 2000 within the UK. Any inclusion of a third party link is for the recipients convenience only, and that the firm does not take any responsibility for its comments or accuracy, and that access to such links is at the individuals own risk. Nothing in this report should be considered as constituting legal, accounting or tax advice, and that for accurate guidance recipients should consult with their own independent tax advisers.


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Disclosure of Interest

MKE may have, within the last three years, served as manager or co-manager of a public offering of securities for, or currently may make a primary market in issues of, any or all of the entities mentioned in this report or may be providing, or have provided within the previous 12 months, significant advice or investment services in relation to the investment concerned or a related investment and may receive compensation for the services provided from the companies covered in this report.

OTHERS Analyst Certification of Independence The views expressed in this research report accurately reflect the analysts personal views about any and all of the subject securities or issuers; and no part of the research analysts compensation was, is or will be, directly or indirectly, related to the specific recommendations or views expressed in the report.

Reminder Structured securities are complex instruments, typically involve a high degree of risk and are intended for sale only to sophisticated investors who are capable of understanding and assuming the risks involved. The market value of any structured security may be affected by changes in economic, financial and political factors (including, but not limited to, spot and forward interest and exchange rates), time to maturity, market conditions and volatility and the credit quality of any issuer or reference issuer. Any investor interested in purchasing a structured product should conduct its own analysis of the product and consult with its own professional advisers as to the risks involved in making such a purchase.

No part of this material may be copied, photocopied or duplicated in any form by any means or redistributed without the prior consent of MKE.

Ong Seng Yeow | Executive Director, Maybank Kim Eng Research

Definition of Ratings

Maybank Kim Eng Research uses the following rating system BUY Return is expected to be above 10% in the next 12 months (excluding dividends) HOLD Return is expected to be between - 10% to +10% in the next 12 months (excluding dividends) SELL Return is expected to be below -10% in the next 12 months (excluding dividends)

Applicability of Ratings

The respective analyst maintains a coverage universe of stocks, the list of which may be adjusted according to needs. Investment ratings are only applicable to the stocks which form part of the coverage universe. Reports on companies which are not part of the coverage do not carry investment ratings as we do not actively follow developments in these companies.

DISCLOSURES Legal Entities Disclosures Malaysia: This report is issued and distributed in Malaysia by Maybank Investment Bank Berhad (15938-H) which is a Participating Organization of Bursa Malaysia Berhad and a holder of Capital Markets and Services License issued by the Securities Commission in Malaysia. Singapore: This material is issued and distributed in Singapore by Maybank KERPL (Co. Reg No 197201256N) which is regulated by the Monetary Authority of Singapore. Indonesia: PT Kim Eng Securities (PTKES) (Reg. No. KEP-251/PM/1992) is a member of the Indonesia Stock Exchange and is regulated by the BAPEPAM LK. Thailand: MBKET (Reg. No.0107545000314) is a member of the Stock Exchange of Thailand and is regulated by the Ministry of Finance and the Securities and Exchange Commission. Philippines: Maybank ATRKES (Reg. No.01-2004-00019) is a member of the Philippines Stock Exchange and is regulated by the Securities and Exchange Commission. Vietnam: Maybank Kim Eng Securities Limited (License Number: 117/GP-UBCK) is licensed under the State Securities Commission of Vietnam.Hong Kong: KESHK (Central Entity No AAD284) is regulated by the Securities and Futures Commission. India: Kim Eng Securities India Private Limited (KESI) is a participant of the National Stock Exchange of India Limited (Reg No: INF/INB 231452435) and the Bombay Stock Exchange (Reg. No. INF/INB 011452431) and is regulated by Securities and Exchange Board of India. KESI is also registered with SEBI as Category 1 Merchant Banker (Reg. No. INM 000011708) US: Maybank KESUSA is a member of/ and is authorized and regulated by the FINRA Broker ID 27861. UK: Maybank KESL (Reg No 2377538) is authorized and regulated by the Financial Services Authority.


April 14, 2014 13

The Roundtable

Malaysia Maybank Investment Bank Berhad (A Participating Organisation of Bursa Malaysia Securities Berhad) 33rd Floor, Menara Maybank, 100 Jalan Tun Perak, 50050 Kuala Lumpur Tel: (603) 2059 1888; Fax: (603) 2078 4194

Singapore Maybank Kim Eng Securities Pte Ltd Maybank Kim Eng Research Pte Ltd 9 Temasek Boulevard #39-00 Suntec Tower 2 Singapore 038989 Tel: (65) 6336 9090 Fax: (65) 6339 6003

London Maybank Kim Eng Securities (London) Ltd 6/F, 20 St. Dunstans Hill London EC3R 8HY, UK Tel: (44) 20 7621 9298 Dealers Tel: (44) 20 7626 2828 Fax: (44) 20 7283 6674

New York Maybank Kim Eng Securities USA Inc 777 Third Avenue, 21st Floor New York, NY 10017, U.S.A. Tel: (212) 688 8886 Fax: (212) 688 3500

Stockbroking Business: Level 8, Tower C, Dataran Maybank, No.1, Jalan Maarof 59000 Kuala Lumpur Tel: (603) 2297 8888 Fax: (603) 2282 5136

Hong Kong Kim Eng Securities (HK) Ltd Level 30, Three Pacific Place, 1 Queens Road East, Hong Kong Tel: (852) 2268 0800 Fax: (852) 2877 0104

Indonesia PT Maybank Kim Eng Securities Plaza Bapindo Citibank Tower 17th Floor Jl Jend. Sudirman Kav. 54-55 Jakarta 12190, Indonesia Tel: (62) 21 2557 1188 Fax: (62) 21 2557 1189

India Kim Eng Securities India Pvt Ltd 2nd Floor, The International 16, Maharishi Karve Road, Churchgate Station, Mumbai City - 400 020, India Tel: (91).22.6623.2600 Fax: (91).22.6623.2604

Philippines Maybank ATR Kim Eng Securities Inc. 17/F, Tower One & Exchange Plaza Ayala Triangle, Ayala Avenue Makati City, Philippines 1200 Tel: (63) 2 849 8888 Fax: (63) 2 848 5738

Thailand Maybank Kim Eng Securities (Thailand) Public Company Limited 999/9 The Offices at Central World, 20th - 21st Floor, Rama 1 Road Pathumwan, Bangkok 10330, Thailand Tel: (66) 2 658 6817 (sales) Tel: (66) 2 658 6801 (research)

Vietnam Maybank Kim Eng Securities Limited 4A-15+16 Floor Vincom Center Dong Khoi, 72 Le Thanh Ton St. District 1 Ho Chi Minh City, Vietnam Tel : (84) 844 555 888 Fax : (84) 8 38 271 030

Saudi Arabia In association with Anfaal Capital Villa 47, Tujjar Jeddah Prince Mohammed bin Abdulaziz Street P.O. Box 126575 Jeddah 21352 Tel: (966) 2 6068686 Fax: (966) 26068787

South Asia Sales Trading Kevin FOY [email protected] Tel: (65) 6336-5157 US Toll Free: 1-866-406-7447

North Asia Sales Trading Alex TSUN [email protected] Tel: (852) 2268 0228 US Toll Free: 1 877 837 7635

www.maybank-ke.com | www.maybank-keresearch.com


2014-04-17 DHG (Maybank Kim E) Maybank Kim Eng - Key Ideas From the Region

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