Equity Strategy Equity Strategy â€“ Asia Top 30

Equity Strategy

Equities are our preferred asset class. We are OW Asia ex-Japan.

We will take a time bound approach (2-3 months), utilising market

weakness to average in.

Asia ex-Japan lagged US and European markets this month and is

going through a period of consolidation, post the strong rally last year.

Asian markets had a volatile month, on the back of the US spending

sequester, uncertainties from an inconclusive Italian election and

property measures announced by Hong Kong, China and Singapore.

Several concerns surrounding the region include:

Yen weakness

o Limited impact on Tech, but Korea Auto and Asian steel

makers likely to be significantly impacted.

China’s National People’s Congress - pro-growth, vigilant on the

property sector

o Retained GDP target of 7.5% and inflation target to 3.5%

(actual was 2.6% in 2012) in 2013.

o February inflation was 3.2%, marginally higher than expected.

Budgets in Singapore and India were surprisingly populist

o This should be positive for lower end consumption and

reducing the wealth gap.

Earnings revisions momentum in Asia appears to have slowed

o Downgrades driven by Korea and India.

o China earnings season will be the next focus to assess the

continued momentum in earnings.

Sector views: No change. We are considering increasing Technology

to an Overweight and Materials to an Underweight.

Stocks: No changes to our Top30 list.

Asia Top30 stocks with favourable technicals: Samsung Electronics,

Hengan, Keppel Corp, ICICI.

Contents Period of consolidation Pg 1

Performance Pg 2

Sector highlights Pg 3

Stocks updates Pg 5

Implications from yen weakness Pg 7

Asia earnings revisions Pg 8

Asia Div list/Technical commentary Pg 9

Appendix Pg 14

List of Equity market publications Pg 18

Disclaimer Pg 19

Rob Aspin, CFA

Head, Equity Investment Strategy

Audrey Goh

Investment Strategist

Victor Teo

Investment Strategist

Asia Top 30

Period of consolidation

13 March 2013

Asia Top30

Source: Bloomberg, Standard Chartered, data as of 11 March 2013

This commentary reflects the views of the Wealth Management Group of Standard Chartered Bank.

This is not a research report and has not been produced by a research unit. Important disclosures can be found in the Disclosures

Name TickerLast

Price12m

Fwd P/E12m

Fwd P/BFwd Div Yield%

TR 1M% Name Ticker

Last Price

12m Fwd P/E

12m Fwd P/B

Fwd Div Yield%

TR 1M%

Brilliance China 1114 HK 10.86 13.4 3.3 0.2 1.3% Wharf Hldg 4 HK 67.3 17.4 0.8 2.0 0.9%Geely Automobile 175 HK 4.09 10.9 1.8 1.2 -2.6% Suntec Reit SUN SP 1.8 23.5 0.9 5.1 2.3%Intime Departmen 1833 HK 9.13 13.7 1.8 3.1 -10.7% Link Reit 823 hk 42.3 26.9 1.4 3.7 1.9%Sands China Ltd 1928 HK 36 18.6 6.0 4.2 0.7% Air China Ltd-H 753 HK 6.39 10.6 1.2 1.7 -6.6%China Shenhua-H 1088 HK 29.70 9.5 1.6 4.0 -3.4% Hutchison Port-U HPHT SP 0.81 23.2 0.8 7.3 -2.4%China Petroleu-H 386 HK 8.97 8.5 1.1 3.9 4.2% Keppel Corp Ltd KEP SP 11.89 13.3 2.2 3.8 3.1%BOC Hong Kong 2388 HK 26.9 13.0 1.9 4.8 0.2% Samsung Electron 005930 KS 1508000 7.1 1.4 0.6 3.1%DBS Group Hldgs DBS SP 15.46 10.8 1.1 3.8 3.2% Lenovo Group Ltd 992 HK 8.39 14.8 3.5 2.4 -3.8%ICICI Bank Ltd ICICIBC IN 1131.95 12.5 1.8 2.0 0.8% Tencent Holdings 700 HK 281.6 23.9 7.0 0.5 4.1%Ind & Comm Bk-H 1398 HK 5.55 6.3 1.2 5.3 -1.4% Anhui Conch-H 914 HK 27.8 12.9 2.0 1.3 -6.2%AIA Group Ltd 1299 HK 34.35 17.1 1.8 1.3 8.5% Zhaojin Mining-H 1818 HK 10.3 11.4 2.5 3.2 -8.2%Kasikornbank Pcl KBANK TB 216 11.7 2.3 1.9 8.0% Hengan Intl 1044 HK 80.3 22.9 6.2 2.7 -0.7%Capitamalls Asia CMA SP 2.01 29.5 1.2 1.5 -4.3% Wilmar Internati WIL SP 3.3 11.9 1.1 1.9 -10.3%Ping An Insura-H 2318 HK 64.55 13.6 2.2 1.2 -4.2% China Mobile 941 HK 84.6 10.8 1.7 4.1 -1.0%China Res Land 1109 HK 21.05 13.3 1.6 1.9 -0.9% CLP Hldgs Ltd 2 HK 67 15.6 1.8 3.9 2.1%

This reflects the views of the Wealth Management Group

Equity Strategy – Asia Top 30


2

After the strong performance last year, some retracement was inevitable, with

the Asia ex-Japan region lagging US and Europe year to date. Within Asia,

the domestically focused Southeast Asia markets outperformed this month,

on the back of a rise in risk aversion. The Hong Kong, China and Singapore

markets underperformed on the back of government intervention on the all

important property sector, while Philippines and Indonesia outperformed (up

in excess of 10%).

In terms of sectors, Financials outperformed, although there was an initial

sell-off among the residential developers post the announcement of property

cooling measures in Hong Kong, China and Singapore. The key performers

were ASEAN banks, as well as Taiwan financial companies.

The Materials sector was one of the worst performing sectors, mainly driven

by Korea materials, which fell due to competitive concerns surrounding a

weak yen. Energy also underperformed year to date, due to poor sentiment

among China coal producers and uncertainties from the ongoing price

negotiations with integrated power producers (IPP). We continue to like the

sector on the basis of attractive valuations and, the expectations that China

coal prices will be stable to up over the longer term.

We expect monetary policies in Asia to be increasingly neutral as we

progress into the year. Of the 10 countries in Asia, 5 of them posted higher

inflation numbers in their latest release, and most central banks are expected

to put policy rates on hold in their next policy meeting. Given our B.R.I.D.G.E

framework of a broadening recovering and reduced tail risks, we continue to

remain selectively overweight of some of the cyclical sectors including

Financials and Industrials.

MSCI Asia Ex Japan lagged this month on policy

concerns

Total returns of MSCI indices by regions

Source: Bloomberg, Standard Chartered

Performance from period 11 Feb to 11 Mar 2013

Mixed performance between cyclical and defensives

MSCI Asia Ex Japan sector performance YTD


As of 11 March 2013

0.35

-0.24

1.28

1.98

0.36

1.46

-1 -0.5 0 0.5 1 1.5 2 2.5

MSCI Japan TR Index

MSCI Asia ex Japan TR Index

MSCI EMU TR Index

MSCI US TR Index

MSCI Emerging Markets TR Index

MSCI World TR Index

%

0.0

0.1

(3.4)

4.1

6.0

0.7

2.4

(4.2)

(1.8)

5.4

1.4

-6 -4 -2 0 2 4 6 8

Staples

Discretionary

Energy

Financials

Health Care

Industrials

Technology

Materials

Telco

Utilities

MSCI Asia Ex Japan

%

Performance

Our Key sector and country calls over the next 12 months

Consumer (OW) - Attractive valuation. Prefer exposure to mass gaming and China auto demand. Relative preference for

Discretionary to Staples due to higher valuation in the latter.

Energy (OW) – Leveraged to improving growth in the economy. Many companies in the sector offer higher than average yields.

Prefer coal miners, where prices are near a cyclical trough and valuations near 2008-09 levels. Also like China oil companies which

will benefit from fuel price reforms in China.

Technology (N) – Neutral for now. We are considering upgrading the sector on its visible growth prospects. Sector will benefit from

increased corporate expenditure on rising business confidence and the expected broadening of growth in the economy. Prefer

Semi and IT software companies, particularly those with exposure to consumption in the emerging markets

Financials (OW) – cheap valuation, attractive dividend yields. SG/HK banks are relative safe havens in the region. We are OW

Thailand banks and tactically OW China banks.

Countries: OW China, South Korea, Hong Kong and Thailand

Source: Standard Chartered


3

Consumer discretionary (OW) – We have a structural OW on the Consumer

discretionary sector, with a preference for China auto, Macau mass gaming

and may in the future look to add to Thai or Korea domestic consumption

plays, which are expected to benefit from fiscal stimulus by the domestic

government. This is in line with our theme of rising consumption in Asia,

driven by urbanisation and higher income.

We are less sanguine on Korea auto makers, which account for over 20% of

the sector, as renewed JPY weakness could weigh on performance. That

said, valuations are cheap and we could see a technical rebound from here,

post the recent sell-down.

Consumer Staples (UW) – We like the sector for its steady growth visibility,

but have a tactical UW on staples due to stretched valuations. It is a marginal

underweight in the Asia Top30 and we continue to watch for opportunities to

add to the sector, in stocks where valuations look attractive relative to their

earnings growth. We prefer to be selective here, as the sector trades at 19.7x

P/E, above the higher end of its trading band.

Near term, increased noise surrounding inflationary pressures in Asia may

present opportunities in the sector. We have a more sanguine view on

inflation, given agricultural commodity prices have fallen year to date. Food is

around one third of the overall CPI basket in China.

Energy (OW) – We have been hurt by our Overweight in this sector, with coal

companies being the main detractor this month. China coal companies fell

between 3% - 13%, on the back of uncertainty surrounding price negotiations

with the integrated power plants (IPP).

Despite China coal prices being largely flat year to date, the share prices of

coal miners have been weak, in contrast to economic data which has been

improving. Coal inventory days at the IPP are trending down, and we expect

restocking to push coal prices higher. Market reforms by the Chinese

government to cancel state-controlled thermal coal pricing to market-based, is

positive for coal miners longer term.

Financials (OW) – The sector outperformed the Asia markets this month, in

spite of property cooling measures by HK/China/Singapore governments. We

prefer commercial property developers to residential developers. Policy

overhang will set a cap on price appreciation, but low interest rates and

a positive rental carry will set a floor for real estate values, in our

opinion.

We remain tactically overweight North Asia banks, on valuation grounds.

While there remain structural concerns on the risks of: a) higher NPLs in

Chinese banks, b) worsening loan quality to local government financing

vehicles and c) risks on wealth management products, we doubt these will

present systematic risks for the economy this year. The China banking sector

trades well below their average historical valuations, and an improving growth

environment should mitigate some of these risks, in our opinion. Elsewhere,

Discretionary sector is relatively cheap compared to

Staples

Relative P/E valuation between staples and discretionary

sector


China coal price has barely changed for the past 6

months

China Qinhuangdao 5800kc coal price


Policy measures inevitable as construction is just

starting to ramp up, with demand strengthening

China floor space under construction and new starts, %

3mma

Source: CEIC, Standard Chartered

0.5

0.6

0.7

0.8

0.9

1

1.1

1.2

1.3

1.4

Mar-08 Nov-08 Jul-09 Mar-10 Nov-10 Jul-11 Mar-12 Nov-12

Discretionary Staples

Inde

xed

(3

De

c 20

08=

1)

110

115

120

125

130

135

140

145

150

Jan-12 Apr-12 Jul-12 Oct-12 Jan-13

US

D/m

t

Sector highlights


4

the outlook for Indian banks is lacklustre, while ASEAN banks held up

relatively better.

Materials (N) – We are considering to underweight the Materials sector

currently. Key reasons are: 1) the significant weighting of Steel companies

within the sector, which may be significantly impacted by a weaker JPY, 2)

our recent downgrade on gold to an Underweight and, more importantly, 3)

significant cost inflation among miners, which have eroded profitability. Given

the sector has been a laggard year to date and valuations remain depressed,

we may see a technical rebound in the near term. We will continue to monitor

the sector.

We decided to keep Zhaojin Mining (1818 HK), given technicals appear to

be near a bottom and also to serve as a hedge against potential event risks.

Overall, we retain a neutral view on the sector, as China (which accounts for

40% of most materials demand) is expected to shift away from investments

towards consumption. Higher cost and aggressive capex growth have dented

companies’ profitability. Until corporate management can invest profitably

above their cost of capital and maintain a strong focus on shareholder return,

we expect the sector to remain range bound. A stronger dollar in the near

term will also temper returns on commodities prices.

We prefer to trade material stocks within a band, buying when

valuations look oversold, with dividend yield as one of the valuation

metrics.

Technology (N) – We are considering to overweight the sector. There are

indications that corporate spending may be starting to recover. The

semiconductor book to bill ratio is rising, indicative of a pickup in personal

computer demand, and bodes well for the overall outlook of the technology

sector. TSMC (2330 TT), with the largest market share in the global

semiconductor market, will likely be a significant beneficiary. The tech sector

trades at an attractive valuation of 11x forward P/E.

Within the sector, we prefer consumer electronics plays with exposure

to growth in the Emerging markets and information software services,

which will benefit from increasing outsourcing demand, as technology

spend increase among corporate. We are at the moment lukewarm on

computer hardware as they continue to be cannibalised by a shift in

consumer preference to tablets. Valuations for these companies though, look

cheap. Given their performance so far, there may be opportunities for a short-

term rebound, should the IT spending recovery accelerate.

Materials sector’s returns have been eroded by higher cost

inflation

Return on capital of MSCI Asia ex-Japan Materials sector


Rising corporate profits positive for capital investments

US Corporate profits vs capex


6

8

10

12

14

16

18

Mar-08 Feb-09 Jan-10 Dec-10 Nov-11 Oct-12

%

800

1000

1200

1400

1600

1800

2000

2200

40

45

50

55

60

65

70

75

80

Mar-05 Jun-06 Sep-07 Dec-08 Mar-10 Jun-11

US

D (b

n)

US

D (b

n)

S&P capex 6-quarter Lag US corporate profits (RHS)


5

Sands China (1928 HK):

Reported very strong set of results with ‘mass’ revenue growing by

17% q/q relative to industry at 11% q/q.

Its latest property Sands Cotai China continues to see margin

improvements and share gains from peers.

Near term upside to come from the addition of gaming tables

granted by the Macau government and opening of more hotel rooms

and retail space.

The stock has been one of the best performing stock since we

included it in our Asia Top10 last year.

While the stock may consolidate in the near term post its strong

performance, we continue to like it for its attractive earnings

momentum and strong dividend yield of 4.2%, which is higher than

market average.

Wilmar (WIL SP):

Earnings exceeded consensus expectations, with all key business

segments showing a recovery.

Margins of oilseeds improved, resulting in a second consecutive

quarter of profits, driven by a recovery in demand.

Lower speculative activities in commodities should create a more

stable operating environment. This, together with improvements in

utilisation should support continued profitability in the oilseeds

division.

Valuations look attractive at 12x fwd P/E, at the lower end of its

trading range.

China Shenhua (1108 HK):

Share price fell by 3.4% over the past month, despite China coal

prices holding relatively stable year to date.

Sentiment continues to be impacted as result of 1) disappointing PMI

data, 2) new housing market controls announced by the Beijing

government to tax capital gains on property transactions, and 3)

uncertainties surrounding the National People Congress, where the

new leaders will assume leadership and announce directions of new

policies.

We continue to like China Shenhua, and expect the inventory

restocking as well as peak power demand in the 2Q to result in

firmer coal prices, going forward.

Valuation continues to look attractive at 9.5x 12 months forward P/E,

below its long-term median, and is well positioned to benefit from

shift to a more market based pricing mechanism (from state

controlled currently).

Most companies have reported at least in line earnings

in 4Q12

4Q12 earnings round up


Wilmar trades at the lower end of its valuation band

Wilmar’s forward P/E


Shenhua is trading at the lower end of its trading band

China Shenhua’s forward P/E


Company Ticker Results surpriseSands China 1928 HK AboveWilmar Wil Sp AboveAIA Group 1299 HK AboveCapitamalls Asia CMA SP In lineDBS Group DBS SP In lineKasikornbank PCL Kbank TB In lineSuntec Reit SUN SP In lineHPHT HPHT SP In lineKeppel Corp KEP SP In lineCLP Holdings 2 HK In line

4

9

14

19

24

29

34

Aug-06 Aug-07 Aug-08 Aug-09 Aug-10 Aug-11 Aug-12

P/E

x

WIL SP Equity +-1 STDEV Median

4

9

14

19

24

29

34

39

44

Dec-05 Dec-06 Dec-07 Dec-08 Dec-09 Dec-10 Dec-11 Dec-12

P/E

x

1088 hk Equity +-1 STDEV Median

Stock update


6

CapitaMalls Asia (CMA SP):

Full year results were in line with SCB forecasts but missed

consensus expectations, largely due to temporary impacts from

asset enhancement works and pre-operating expenses on new

malls.

After expanding aggressively over the past three years, CMA is set

to consolidate and deliver growth on the projects under

development.

Key operating metrics remain healthy. Same store sales came in at

17% y/y and book value rose modestly to SGD 1.67/share.

Management guided for 30%-40% core earnings growth in 2013.

Valuation remains attractive at 1.2x P/B and we see potential upside

as the group starts to recycle capital from its maturing assets.

Samsung Electronics (005930 KS):

Samsung Electronics is preparing to ship its new flagship

smartphone, Galaxy S4 by end 1Q13. The shipment run rate could

be stronger than S3, resulting in strong volume gains for Samsung.

The impact of recent strength in the Korean won relative to Yen is

unlikely to have a meaningful impact on Samsung.

There is no significant competition with Japanese handset makers

as the Japanese are more focused in their domestic market.

Valuations are undemanding at 7.1x 12 months forward P/E and

consensus expects earnings growth of 9% in 2013-2014.

AIA Group (1299 HK):

AIA’s FY12 results were above consensus expectations. The

company declared a dividend of 0.25 per share, +12% y/y.

Value of new business (VNB) was up 27% y/y at nearly $1.2bn, a

record level, driven by 17% growth in volume and 9% enhancement

in margin.

We continue to like the company for its huge effective agency

distribution across Asia, which also tends to be higher margin in

nature. Their diversification into Bancassurance has also been

profitable with VNB up 59% y/y.

AIA now has 25m holders of individual policies and 13m group

scheme members, which will represent substantial potential for

future earnings.

In China, AIA enjoys significant margin premium over the local

players despite its smaller scale. This is due to their focus on

protection products, which helps margin. Management is committed

to growing their VNB at a higher pace than new business capital

strain, by becoming more efficient and targeting capital earnings

IRR>20%

Valuation is about fair at 10.5x P/VNB as of 29 Jan 2013.

CMA’s valuations remain attractive

CMA’s forward Price/book ratio


Upcoming launch of new Galaxy phone will be positive

to share price

Share price and flagship model smartphone release dates

Source: Company, Bloomberg, Standard Chartered

New business (value) continues to drive share

performance

AIA total and new business premiums for 1H FY12

Source: Company, Standard Chartered

0

0.2

0.4

0.6

0.8

1

1.2

1.4

1.6

1.8

2

Nov-09 Nov-10 Nov-11 Nov-12

P/B

x

CMA SP Equity +-1 STDEV Median


7

Zhaojin Mining (1818 HK):

Stock has fallen 8% over the past month on continued concern over

gold price.

We downgraded Gold to an Underweight on 22 Feb 2013 (Global

Market Outlook) on the back of 1) reduced tail risks, 2) improving

risk appetite which increased holding cost of gold and, 3) weak

technicals.

We retain Zhaojin in the Asia Top30 as a modest hedge against

market weakness.

Valuations still look attractive, with the stock trading at 11.4x 12

month forward P/E and dividend yield of 3.2%.

A key area of concern for equity investors in Asia ex-Japan has been on JPY

weakness, which has fallen some 20% against the USD since September last

year. This has implications for the export competitiveness of Asian

companies. Other than an improving risk appetite, which dampened demand

for safe haven assets like JPY, another key reason has been the shift in

political leadership which favours a far weaker JPY.

Prime Minister Shinzo Abe is pushing the BoJ to target 2% inflation to lift the

country out of the multi decade long deflation. This has resulted in the sell-off

of JPY and significant foreign inflows into the Japanese equity market. While

we expect JPY to continue to weaken marginally in the near term, we

currently do not expect USD/JPY to go beyond 100. Below, we assess the

major beneficiaries and losers in a sustained weak JPY environment:

Asia Tech: No major impact on Korea tech, given the increasing R&D

investment in product designs and brands, diversification of production

base overseas and limited overlapping business with Japan tech

names.

This is also the case for Taiwan tech component markers as they no

longer compete directly with Japan in the industries where they are

predominately in. In some cases, such as Taiwan panel companies, the

effect may be positive considering their high exposure to raw material

imports from Japan.

Asia Auto: Clearly, a weaker yen will be positive to Japanese Auto

manufacturers. Already Honda is setting up its first manufacturing base

in Japan after a hiatus of 50 years. Sustained yen weakness will likely

affect the Korea Auto more negatively, in the short term, given

significant overlap in products and target segments. That said we do not

expect Japanese OEM to be on an immediate offensive to cut prices to

gain market share. Their immediate priorities are likely to first improve

profitability for now, after years of weakness and market share losses

from a strong yen.

Zhaojin now offers a dividend yield of 3.2%

Zhaojin Mining’s forward dividend yield


Yen depreciated 23% since late September 2012

Spot JPY


Limited impact of weaker JPY on tech stocks

MSCI Asia ex-Japan Tech vs USD/JPY


0

2

4

6

8

10

12

Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12 Jan-13

%

1818 hk Equity +-1 STDEV Median

90

91

92

93

94

95

96

97

Jan-12 Apr-12 Jul-12 Oct-12 Jan-13

JPY

75

80

85

90

95

100220

240

260

280

300

320

May-12 Jul-12 Sep-12 Nov-12 Jan-13

US

DJP

Y

Ind

ex

MxASJ Tech USDJPY (RHS,Inv)

Sector implications of yen weakness


8

Asia Materials: Of a greater concern will be steel, where Japan is one

of the largest exporters in the world. Given the commoditised nature of

steel, a weaker yen may impact domestic steel industries in Taiwan,

China and Korea, with almost half of Japan’s steel exports destined for

these countries. However, Japan is also a large importer of iron ore, so

input costs will also increase.

Asia’s earning revisions took a breather in February, with the earnings

revision ratio (net upgrades relative to total rating changes) fell marginally this

month. The most positive earnings revisions were seen Hong Kong as well as

China, while the worst performing was India, Korea and Malaysia, where the

ratio fell.

In the case of India, the recent budget announcement was perceived to be

negative to the India corporate sector. The earnings revision ratio reversed its

uptrend and earnings estimates were also revised down sharply, in response

to lower growth expectations. Elsewhere, China earnings continued to be

revised up at a modest pace, though it remains to be seen if this trend will

continue post the results season in March.

We had considered reducing our Overweight in Korea (Global Market

Outlook, 25 February 2013), but decided against it for now, given that 1)

negative earnings revisions appeared to have moderated, with the pace of

earnings downgrades abating, 2) domestic sectors may stand to benefit as

the government looks to potential plans to stimulate the economy (auto export

sector and steel industries may be significantly impacted by a weaker won)

and 3) the BoJ needs to ‘walk the talk’ for yen to weaken further.

Asia ex-Japan positive earnings revisions moderating

MSCI Asia ex-Japan earnings revision trend

Source: Datastream, Standard Chartered

-10

-8

-6

-4

-2

0

2

4

6

8

10

-8

-6

-4

-2

0

2

4

6

Jan-10 Jun-10 Nov-10 Apr-11 Sep-11 Feb-12 Jul-12 Dec-12

Ratio

%

MSCI ASIA EX-JAP 3m% Chg 12m Fwd EPS Earnings Revision Ratio(RHS)

Earnings revisions in Asia


9

Going forward, the Asia conviction list shall be featured in the Asia Top30 publication as well as the Global Top30.

Below, we present the technical views for our Asia Top 30 stocks. The stocks are given a rating of 1-5, with 1

being the most favourable technicals and 5 being the least favourable technicals on a 1-3 months basis. This

is from a pure technical standpoint and may, run contrary to the fundamental views we hold of the stocks within

the portfolio, which is on a 12 month basis.

Asia Dividend list


Data as of 11 March 2013

Asia Top 30 Technical rating


Views as of 11March 2013

On the following pages, we present the Technical charts for stocks which are most favourable.

Ticker Name SectorStock Price

FY1 DVD Yield

12m Fwd P/E

P/B Trailing

Div Payout%

Consensus Rating TR 1M%

1088 HK China Shenhua‐H Energy 29.70 3.9 9.4 2.0 39.2 4.5 ‐3.4%MINT SP Mapletree Indust Financials 1.40 6.5 15.5 1.4 104.1 3.5 0.4%SUN SP Suntec Reit Financials 1.80 5.1 23.4 0.9 51.6 3.5 2.3%AREIT SP Ascendas Real Es Financials 2.58 5.4 18.2 1.4 57.1 3.4 0.4%SGREIT SP Starhill Global Financials 0.90 5.4 15.7 1.0 73.1 4.1 5.9%2388 HK Boc Hong Kong Ho Financials 26.90 4.5 12.8 2.0 61.5 4.3 0.2%DBS SP Dbs Group Hldgs Financials 15.46 3.8 NA 1.2 35.8 4.3 3.2%PBK MK Public Bank Bhd Financials 16.14 3.6 13.3 3.2 43.4 3.2 3.7%BBL TB Bangkok Bank Pub Financials 225.00 3.4 11.1 1.6 37.6 4.3 11.4%1398 HK Ind & Comm Bk‐H Financials 5.55 5.1 6.2 1.5 34.0 4.6 ‐1.4%HPHT SP Hutchison Port‐U Industrials 0.81 7.3 23.2 0.8 NA 3.7 ‐2.4%KEP SP Keppel Corp Ltd Industrials 11.89 3.8 13.3 2.3 58.1 4.5 3.1%ST SP Singap Telecomm Telco 3.49 4.5 14.7 2.5 63.0 3.4 ‐2.2%941 HK China Mobile Telco 84.60 4.0 NA NA 43.1 3.5 ‐1.0%2 HK Clp Hldgs Ltd Utilities 67.00 3.9 15.5 1.9 75.8 3.0 2.1%

Name Ticker Sector Rating Name Ticker Sector Rating

Brilliance China 1114 HK Discretionary 3 Kasikornbank Pcl KBANK TB Financials 3Geely Automobile 175 HK Discretionary 4 Link Reit 823 HK Financials 4Intime Departmen 1833 HK Discretionary 3 Ping An Insura-H 2318 HK Financials 3Sands China Ltd 1928 HK Discretionary 4 Suntec Reit SUN SP Financials 3Hengan Intl 1044 hk Staples 2 Wharf Hldg 4 HK Financials 3Wilmar Internati WIL SP Staples 3 Air China Ltd-H 753 HK Industrials 3China Petroleu-H 386 HK Energy 3 Hutchison Port-U HPHT SP Industrials 3China Shenhua-H 1088 HK Energy 3 Keppel Corp Ltd KEP SP Industrials 2Aia Group Ltd 1299 HK Financials 3 Tencent Holdings 700 HK Technology 2Boc Hong Kong Ho 2388 HK Financials 2 Lenovo Group Ltd 992 HK Technology 3Capitamalls Asia CMA SP Financials 3 Samsung Electron 005930 KS Technology 2China Res Land 1109 HK Financials 3 Anhui Conch-H 914 HK Materials 3Dbs Group Hldgs DBS SP Financials 3 Zhaojin Mining-H 1818 HK Materials 3Icici Bank Ltd ICICIBC IN Financials 2 China Mobile 941 HK Telco 3Ind & Comm Bk-H 1398 HK Financials 3 Clp Hldgs Ltd 2 HK Utilities 3

Asia div list

Technical Commentary


10

Hengan International Group Co Ltd (1044 HK) – The stock rebounded from 68 along the upward sloping

trend line drawn since 2010. A crossover above the next intermediate resistance of 83 shall propel prices towards

the upper band.

Source: Bloomberg, Metastock, Standard Chartered

BOC Hong Kong Holdings Ltd (2388 HK)- The stock has been forming higher highs and higher lows since it

bottomed in October 2011. Technical momentum indicators are firmly upward biased hence a rally to all time highs

looks likely.


Source: Reuters, Standard Chartered


Weekly Chart

Weekly Chart


11

Samsung Electronics (005930 KS) - The stock failed to breach any immediate support levels but gradually

consolidated and moved higher. We continue to view this as a positive pattern, from a longer term perspective.


Keppel Corp (KEP SP) - The stock was undergoing a small consolidation. It has recently broken out of this

pattern at the upper band of around 11.50 and signalled a continuation of the uptrend.



Weekly Chart

Weekly Chart



12

Zhaojin Mining Industry Co Ltd (1818 HK) - The stock has fallen to May – Sep ’12 support level of 9 which is

also the breakout level of the sizeable 2010 rally. We believe the stock may be nearing the completion of a long

corrective phase which begun in 2011 and we see limited downside from current levels.

ICICI Bank Limited (ICICIBC IN) – The stock has been in an uptrend with modest momentum from the start of

2012. The minor correction from the resistance of 1200 was restricted to the lower band of the channel line while

the bullish reversal confirmed the underlying strength in the stock.



Weekly Chart

Weekly Chart



13

Tencent Holdings Ltd (700 HK) – The Momentum technical indicators have begun to curve up which suggest the

ongoing rally is expected to continue. It has also consolidated on the way up which is a healthy pattern for the

broader structure of the chart.

2r


Weekly Chart



14

Asia Top30 performance and valuations (local currency)


As of 11 March 2013

Name Ticker Sector Country Stock Price

Consensus Rating

12m Fwd P/E

12m Fwd P/B

Fwd Div Yield%

TR YTD%

Brilliance China 1114 HK Discretionary Hong Kong 10.86 4.2 13.4 3.3 0.2 13.8%Geely Automobile 175 HK Discretionary Hong Kong 4.09 3.7 10.9 1.8 1.2 11.4%Intime Departmen 1833 HK Discretionary China 9.13 4.5 13.7 1.8 3.1 -0.1%Sands China Ltd 1928 HK Discretionary Macau 36.00 4.5 18.6 6.0 4.2 8.0%Hengan Intl 1044 HK Staples China 80.30 4.0 22.9 6.2 2.7 14.8%Wilmar Internati WIL SP Staples Singapore 3.30 3.2 11.9 1.1 1.9 -1.2%China Petroleu-H 386 HK Energy China 8.97 3.7 8.5 1.1 3.9 2.2%China Shenhua-H 1088 HK Energy China 29.70 4.5 9.5 1.6 4.0 -12.5%Aia Group Ltd 1299 HK Financials Hong Kong 34.35 4.3 17.1 1.8 1.3 13.6%Boc Hong Kong Ho 2388 HK Financials Hong Kong 26.90 4.3 13.0 1.9 4.8 11.6%Capitamalls Asia CMA SP Financials Singapore 2.01 4.1 29.5 1.2 1.5 3.6%China Res Land 1109 HK Financials Hong Kong 21.05 4.5 13.3 1.6 1.9 -0.2%Dbs Group Hldgs DBS SP Financials Singapore 15.46 4.3 10.8 1.1 3.8 4.2%Icici Bank Ltd ICICIBC IN Financials India 1131.95 4.7 12.5 1.8 2.0 -0.6%Ind & Comm Bk-H 1398 HK Financials China 5.55 4.6 6.3 1.2 5.3 0.9%Kasikornbank Pcl KBANK TB Financials Thailand 216.00 4.7 11.7 2.3 1.9 11.6%Ping An Insura-H 2318 HK Financials China 64.55 4.3 13.6 2.2 1.2 -0.5%Suntec Reit SUN SP Financials Singapore 1.80 3.5 23.5 0.9 5.1 8.9%Wharf Hldg 4 HK Financials Hong Kong 67.30 4.2 17.4 0.8 2.0 11.1%Link Reit 823 hk Financials Hong Kong 42.30 3.9 26.9 1.4 3.7 9.3%Air China Ltd-H 753 HK Industrials China 6.39 3.8 10.6 1.2 1.7 -2.4%Hutchison Port-U HPHT SP Industrials Singapore 0.81 3.7 23.2 0.8 7.3 7.0%Keppel Corp Ltd KEP SP Industrials Singapore 11.89 4.5 13.3 2.2 3.8 8.1%Lenovo Group Ltd 992 HK Technology China 8.39 4.5 14.8 3.5 2.4 19.5%Samsung Electron 005930 KS Technology South Korea 1508000 4.8 7.1 1.4 0.6 -0.9%Tencent Holdings 700 HK Technology China 281.60 4.2 23.9 7.0 0.5 13.1%Anhui Conch-H 914 HK Materials China 27.80 3.7 12.9 2.0 1.3 -1.4%Zhaojin Mining-H 1818 HK Materials China 10.30 4.0 11.4 2.5 3.2 -14.9%China Mobile 941 HK Telco Hong Kong 84.60 3.5 10.8 1.7 4.1 -6.3%Clp Hldgs Ltd 2 HK Utilities Hong Kong 67.00 3.0 15.6 1.8 3.9 4.8%

Top30 - Performance and Valuations


15

MSCI Asia ex-Japan Sectors (USD)


As of 11 March 2013

MSCI Asia ex-Japan Countries (local currency)


As of 11 March 2013

MSCI Asia ex-Japan Sector and Country breakout

Source: iShares MSCI Asia ex-Japan ETF, Standard Chartered

As of 28 Jan 2013

NameLast Price

12m Fwd P/E

12m Fwd P/B

EV/ EBITDA

Fwd Div Yield%

Payout% TR 1M%

Consumer Staples 421.4 19.7 2.7 15.1 2.1 41.0 1.8%

Consumer Discretionary 542.2 10.9 1.8 9.2 2.0 35.5 0.0%

Energy 749.2 9.9 1.4 6.3 3.1 40.5 -1.0%

Financials 314.6 10.7 1.2 NA 2.9 30.9 0.8%

Healthcare 575.2 21.5 2.8 17.5 1.0 23.0 4.6%

Industrials 174.9 12.9 1.2 10.7 2.4 43.9 0.7%

Information Technology 301.0 10.9 1.9 6.7 1.9 30.5 2.6%

Materials 337.7 12.4 1.2 10.8 2.4 35.5 -1.8%

Telecommunication Svs 143.7 13.7 2.0 6.1 4.3 63.4 0.1%

Utilities 217.7 14.3 1.5 12.2 2.7 38.1 3.2%

Index 555.6 11.6 1.5 8.9 2.6 35.1 0.9%

NameLast Price

12m Fwd P/E

12m Fwd P/B

EV/ EBITDA

Fwd Div Yield%

Payout% TR 1M%

China 62.9 9.7 1.4 7.9 3.2 17.4 -1.7%

South Korea 578.4 8.5 1.2 10.3 1.2 16.5 2.5%

Thailand 547.2 12.7 2.2 9.9 3.3 43.4 4.7%

Singapore 1732.0 14.2 1.4 13.1 3.4 50.4 0.2%

Hong Kong 11972.9 15.6 1.3 16.6 2.8 45.6 0.9%

Indonesia 5885.7 15.1 3.3 9.7 2.5 39.1 8.0%

India 769.9 13.7 2.1 10.6 1.5 24.5 0.7%

Philippines 1122.6 20.2 3.3 14.9 2.0 23.3 5.3%

Malaysia 591.7 14.4 1.9 9.5 3.4 59.2 2.9%

Taiwan 288.5 14.5 1.6 14.9 3.1 66.6 1.3%

Index 555.6 11.6 1.5 8.9 2.6 35.1 0.9%

Staples, 5.43%

Discretionary, 8.97%

Energy, 7.22%

Financials, 33.42%

Healthcare, 1.09%

Industrials, 9.13%

Information Technology,

17.70%

Materials, 6.59%

Telco, 6.31%

Utilities, 3.86% China, 24.23%

South Korea, 19.40%

Thailand, 3.46%

Singapore, 6.99%

Hong Kong, 12.47%

Indonesia, 3.61%

India, 9.16%

Philippines, 1.27%

Malaysia, 4.49%

Taiwan, 13.96%

Sector and Country – Performance and Valuations


16

Notes


17

YTD: Year to date.

ITD: Inception to date.

PT: Price Targets (SCB uses an investment horizon of 12 months for

its price targets).

RSI: Relative Strength Index.

Relative Volatility index: A measure of the standard deviation of the

daily price change.

MA: Moving Average.

Basket average performance: Basket average is the un-weighted

performance of the shortlisted stocks

Consensus rating: A rating provided by Bloomberg which reflects the

aggregation of all brokers rating for a particular stock. 1 is a Sell, while

5 is a Strong Buy.

P/E: Price/Earnings ratio. The Trailing P/E refers to 12m of trailing

earnings, while the forward refers to 12m forecast earnings, against

current price.

P/B: Price/Book ratio. The book value refers to total shareholder’s

equity, while the forward refers to 12m forecast book value, against

current price.

EV/EBITDA: Enterprise value/Earnings Before Interest, Tax and

Depreciation Amortisation.

Earnings revision ratio: Net earnings revision (upgrades -

downgrades) / Total earnings revision (upgrades + downgrades)

ROE and ROA: Return on Equity (book value) and Return on Assets.

Dividend Yield: Dividend paid/ current price.

Net Interest Margin (NIM): Is a measure of difference between the net

interest income generated from lending by financial institutions and the

amount of interest paid out to their lenders (for example deposits)

Beta: Correlation between a stock and the market. Is based on two

years of weekly data, but modified by the assumption that a security's

beta moves toward the market average over time.

Total return: Capital appreciation + dividend income received.

Short term: Time horizon of 1-4 weeks.

Medium term: Time horizon of 3-6 months.

NAV: Net asset value.

Strategy Team: Steve Brice Chief Investment Strategist Rob Aspin, CFA Head of Equity Investment Strategy Manpreet Gill Head of FICC Investment Strategy Suren Chelliah Investment Strategist Audrey Goh Investment Strategist Victor Teo Investment Strategist

Definitions


18

List of Equity Market Commentary Publications


19

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Equity Strategy Equity Strategy â€“ Asia Top 30

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