P K Basuupload.xinhua08.com/2012/1128/1354088807150.pdf · ‐ 9M12 net profit of MYR1.38b was...

SEE APPENDIX I FOR IMPORTANT DISCLOSURES AND ANALYST CERTIFICATIONS

23 November 2012

Regional

Daily

Top Views Results Review Mcap USD6.0b ADTV USD2.7m MY: RHB Capital (RHBC MK) Desmond Ch’ng 5 Financials | Improving Fundamentals | BUY | Upside 17% ‐ 9M12 net profit of MYR1.38b was within our forecast (77% of full year)

but above consensus (83%) for the second quarter running. ‐ On expectations of higher credit costs in 4Q, our forecasts are

maintained. Positively, RHB Cap’s fundamentals continue to improve and the completion of the OSKIB merger will help strengthen its investment banking platform.

‐ Trading at a 2013 PER of just 9.9x and P/BV of 1.2x (ROAE: 12.5%) vs 12.4x and 2.0x respectively for its peers (ROAE: 16.6%), RHB Cap is still the cheapest bank in our portfolio. Buy with a TP of MYR8.70 (2013 P/BV of 1.4x).

REC. UPGRADE McapUSD2.2b ADTV USD7.6m IN:Mahindra Satyam (SCS IN) Urmil Shah 6 Tech |Growth Momentum to Continue into 2H| BUY | Upside 11% ‐ 1H EPS of Rs5.4, +36% YoY. SCS registered strong EPS growth, led by

INR depreciation, improving employee utilization, and rationalization of SG&A expenses owing to sales force integration with Tech Mahindra (TEHM).

‐ We expect growth in software services to the manufacturing and financial services sectors to drive growth in 2H. Further, stable GM and lower FX losses are expected to drive 16% EPS growth in 2H vs. 1H.

‐ We maintain our FY13 forecast and TP of Rs116/sh based on PER of 10x FY13F. The stock has declined 5% in November. We upgrade SCS to BUY from HOLD with an upside of 11%.

IJ: Market Strategy Katarina Setiawan 7 Minimum Wage Increases: Winners & Losers - The Governor of Jakarta finally relented to pressure from workers and

labour unions and approved a 44% YoY increase of the minimum wage to IDR2,216,243 (USD230) for the year of 2013, making it the highest increase over the past ten years. We believe that the additional wages to be paid by the publicly listed companies will be less than the actual rate of increase decided by the government (i.e., 44% for Jakarta); most of these companies already pay its workers above the minimum wage.

- Losers will be labour‐intensive companies, i.e., those with a high proportion of direct labour costs to revenue. Plantation, base metals, cement, coal mining, and consumer goods companies would be losers. The impact on cigarette producers should be neutral: the higher costs they experienced could be offset by higher demand for cigarettes due to an increase in the minimum wage.

- Winners will be companies that target low-end consumer segments (eg. the retailer Ramayana–RALS.IJ). Poultry companies will also benefit as an increase in the minimum wage would support chicken consumption. Telecommunication companies will also benefit as higher purchasing power will support demand for prepaid cards and top‐ups.

P K Basu [email protected] (65) 6432 1821 ONG Seng Yeow [email protected] (65) 6432 1832 Benjamin Ho [email protected] (852)22680643

Top Buys… Company Ticker Spot Target Upside(%) Thai Vegetable Oil TVO TB 22.70 35.50 56.39 SapuraKencana SAKP MK 2.85 4.10 43.86 SembMarine SMM SP 4.38 5.90 34.70 LICHF LICHF IN 247.25 332.00 34.28 Neptune Orient Lines NOL SP 1.12 1.46 30.94 B. Armada BAB MK 4 4.88 25.45 Telekom T MK 5.40 6.61 22.41 Genting Malaysia GENM MK 3.46 4.05 17.05

Maybank-KE Events Date Corporate Roadshows Location 28 Nov Neptune Group SP 5 Dec Vanke HK

Date Analyst Roadshows Location 5-6 Dec Singapore Commodity/Consumer/SMID

Caps |James Koh/Wei Bin HK

10-11 Dec Thai Strategy | Andrew Stotz HK 10-11 Dec China Property | Karen Kwan SP

http://research.maybank-ib.com/pdf/documentrg/RHB_Cap_3Q12_RR_20121123_MIB_1_1353.pdf

http://research.maybank-ib.com/pdf/documentrg/India_Mahindra_Satyam_1354.pdf

http://research.maybank-ib.com/pdf/documentrg/Indonesia_Strategy_1355.pdf

mailto:[email protected]


23 November 2012

Regional Daily

SMID Caps 3Q12 Review McapUSD108m ADTV USD0.05m PNJ: Phu Nhuan Jewelry (PNJ VN) Thoa Dang 8 Cons. Discr | Exports – A new Catalsyt| BUY | Upside 16% ‐ PNJ’s 9M12 revenue plunged 66% YoY due to the collapse in PNJ’s gold

bullion bar business because of the State’s decision to monopolise gold bar production. To make matters worse, same‐store‐sales were down about 6% because of the weak economy, but recurring profits only fell 11% because the gross margin on gold bullion bars is only 1%.

‐ Gross margin expanded from 3.8% to 8.7%, because the revenue contribution of the gold jewellery segment (gross margin of 11%) increased from 28% to 54%, while revenue from the production of gold bars (gross margins of 1%) decreased from 70% to 43% in 9M12 and because of gradual shift in PNJ’s revenues from wholesale sales which carry 2% gross margins to retail sales which have a 20% gross margin.

‐ PNJ is trading at a PEG of 0.9x (FY13 PER of 9.5x versus expected earnings growth of 11%) and with a 7% dividend yield. We expect the stock’s foreign ownership limit to be reached soon.

3Q12 REVIEW | TP UPGRADE Mcap USD0.6b ADTV USD0.2m PH: ABS-CBN Corp (ABS; ABSP) Lovell Sarreal 9 Cons. Discr |Airtime Revenue Picks Up in 3Q12 | HOLD | Upside 7.7%

‐ ABS‐CBN Corp’s (ABS/ ABSP) 9M12 net income went up 9.9% YoY to PHP1.55b after excluding one‐off gains in 9M11. This already exceeded our full‐year 2012 net income forecast of PHP1.35b.

‐ Operating income grew 81.2% to PHP819m in 3Q12. We attribute the 81.2% growth in 3Q12 operating income to the acceleration in gross airtime revenue growth, as well as the slower rise in production cost in 3Q12.

‐ Sky Cable revenues jumped 44% in 3Q12, on subscription revenues from newly acquired Destiny Cable. Other revenues also jumped 96% due to acquisition of the wireless fixed‐line business of affiliate Bayan Telecommunications Inc.

‐ We raise our target price to PHP36.5/sh from PHP31/sh previously. With potential upside of less than 10%, we maintain our HOLD rating.

Company Notes 9M12 REVIEW McapUSD108m ADTV US0.15m VN:Vinh Son Song Hinh (VSH VN) DiepThi Ngoc Trinh 10 Utilities | New PPA a Potential Catalyst | 7% ‐ Vinh Son Hydro and state owned electricity distribution monopoly

Electricity Vietnam (EVN) have been without a Power Purchase Agreement (PPA) since the old one expired in 2008 because they can’t agree on a renewal price, but it seems that a new PPA is imminent.

‐ EVN has been pressuring VSH to accept a low PPA price because of its own financial problems. It has been paying VSH very low prices for electricity in 2012 which has caused VSH’s earnings to fall about 30%.

‐ Our understanding is that VSH has the support of the powerful State Capital Investment Corporation (SCIC) so it’s likely that the new PPA between EVN and VSH will reinstate the previous PPA prices and those prices will be retroactively applied to 2010‐2012.

http://research.maybank-ib.com/pdf/documentrg/Vietnam_Phu_Nhuan_Jewelry_1356.pdf

http://research.maybank-ib.com/pdf/documentrg/Philippines_ABS_CBN_Corp_1357.pdf

http://research.maybank-ib.com/pdf/documentrg/Vietnam_Vinh_Son_Song_Hinh_1358.pdf

23 November 2012

Regional Daily

3Q12 REVIEW | TP McapUSD2.5b ADTV US0.4m VN: Vietcombank (VCB VN) Van Ngo 11 Financials |Earnings Dragged By Bad Debt | HOLD | Upside 2% ‐ 9M12 net earnings fell 4%YoY. VCB’s9M12 earnings fell 4% YoYeven

though pre‐provision operating profits were up 10% YoY. The gap was due to a 50% YoY rise in its 9M12 provision expenses which helped to reduce VCB’s NPL ratio from 3.9% in 9M11 to 3.4% in 9M12.

‐ Net interest income fell 7% YoY, despite strong loan growth to end customers of 20% YoY because the bank’s NIM shrank by 90bps YoY to 3.2%. NIM compression was due to VCB’s cut in lending rates for favoured industries, based on the central bank’s directive.

‐ We are reiterating our HOLD rating because we expect our FY12 and FY13 net earnings growth of 3% and 6%, respectively, because a large capital injection by Mizuho in 1Q12 will cause the bank’s ROE to nearly half over the next few years, and because valuation is not compelling at FY13F PER and PBR of 11.8x and 1.3x respectively.

VN: Industry Report M. Kokalari, CFA 12 Vietnam’s Coal Industry ‐ The market capitalizations of Vietnam’s 8 listed coal companies are a

small fraction of the value of their coal reserves because the companies are obligated to sell their coal to the government at below‐market‐prices.

‐ Concerns about off‐market pricing have made the stocks too cheap on a PE, PB and/or dividend yield basis, because investors are viewing the stocks the wrong way. Vietnam’s coal companies are essentially contract miners, albeit with operating margins that are about half what they would be paid in Indonesia. This could be the perfect time to pick up high yielders for defensiveness.

‐ There are signs that things may be about to change in the industry, and that has prompted a significant increase in the number of inquiries about those stocks we’ve received from our institutional and retail clients. This note summarizes the answers to our investors’ recent questions about the sector.

COMPANY UPDATE McapUSD0.8b ADTV US0.3m SG: Goodpack Ltd James Koh 13 Industrials |Earnings Dragged By Bad Debt | HOLD | Upside 18.4% ‐ Our recent discussions with management suggest that business

conditions remain difficult for Goodpack, as a result of an overall slowdown in activities in China as well as Europe.

‐ Nonetheless, we think the decent growth in the recent seasonally weaker

‐ 1Q13 results proves that Goodpack has a resilient business model. ‐ Key‐catalyst still remains progress on the auto‐parts vertical. On the

other hand, slower demand and subsequently capex for new boxes may lead to dividend surprises, given its low‐gearing of 15% currently. Maintain BUY with a TP of SGD2.25, now pegged to 20x PER.

Additional Research MY: YTL Power International (YTLP MK) 14 No Major Negatives | BUY (Yin Shao Yang)

http://research.maybank-ib.com/pdf/documentrg/Vietnam_Vietcombank_1359.pdf

http://research.maybank-ib.com/pdf/documentrg/Vietnam_Coal_Industry_1360.pdf

http://research.maybank-ib.com/pdf/documentrg/Singapore_Goodpack_1361.pdf

http://research.maybank-ib.com/pdf/document/YTLP_1QFY12_RR_20121123_MIB_2471.pdf

23 November 2012

Regional Daily

MY: Multi-Purpose Holdings (MPU MK) 15 Dividends Make A Comeback | BUY (Yin Shao Yang) MY: Lafarge Malayan Cement (LMC MK) 16 Rock Solid Results | BUY (Lee Yen Ling) MY: Kossan Rubber Industries (KRI MK) 17 Recognition Here | BUY (Lee Yen Ling) MY: Media Prima (MPR MK) 18 Lukewarm 3Q12 | HOLD (Yin Shao Yang) MY: AmanahRaya REIT (AARET MK) 19 Flattish Sequential Growth | HOLD (Wong Wei Sum) MY: WCT (WCT MK) 20 2012 Targets Almost Met | BUY (Wong Chew Hann) TH: Siam Makro (MAKRO TB) 21 Notes from the meeting | BUY (Maria Lapiz)

http://research.maybank-ib.com/pdf/document/MPHB_20121122_MIB_2472.pdf

http://research.maybank-ib.com/pdf/document/LMC_3Q12_RR_20121123_MIB_2473.pdf

http://research.maybank-ib.com/pdf/document/Kossan_3Q12_RR_20121123_MIB_2474.pdf

http://research.maybank-ib.com/pdf/document/MPR_3Q12_RR_20121123_MIB_2475.pdf

http://research.maybank-ib.com/pdf/document/ARREIT3Q12_R_20121123_MIB_2476.pdf

http://research.maybank-ib.com/pdf/document/WCT_CU_20121123_MIB_2477.pdf

http://www.maybank-keresearch.com/KimEng/servlet/PDFDownloadViaEmail?rid=23384&uid=hanming


Results Review 23 November 2012

PP16832/01/2013 (031128)

Malaysia

RHB Capital Improving Fundamentals

Above consensus. 9M12 net profit of MYR1.38b was within our forecast (77% of full year) but above consensus (83%) for the second quarter running. On expectations of higher credit costs in 4Q, our forecasts are maintained. Positively, RHB Cap’s fundamentals continue to improve and the completion of the OSKIB merger will help strengthen its investment banking platform. Trading at a 2013 PER of just 9.9x and P/BV of 1.2x (ROAE: 12.5%) vs 12.4x and 2.0x respectively for its peers (ROAE: 16.6%), RHB Cap is still the cheapest bank in our portfolio. Buy with a TP of MYR8.70 (2013 P/BV of 1.4x).

Operational improvements. The consensus beat would have come mainly from a lumpy recovery in 3Q provisions and credit costs are expected to normalize (historical run-rate is 26-27 bps) in 4Q. Operationally, nevertheless, fundamentals have picked up - loan growth of 12.8% YoY is faster than the industry’s 12% and what is positive is that NIMs have been stable (-2bps QoQ). What is also encouraging is that the group has regained CASA and overall deposit market share while liquidity has improved with a LDR of 85% vs 88% end-June.

EPS accretive in 18-24 months. Management estimates OSKIB integration costs of MYR86m (vs our initial estimate of MYR50m) but expects MYR324m of synergies over three years. Guidance is for about MYR60m of the synergies to accrue in the first year, MYR90m in the second year and the balance in year three. The group has seen its corporate/investment banking market share slip significantly over the past year and with this merger complete, the group is in a strong position to regain lost ground, in our view.

Bank Mestika - looking to move ahead. Management has finalized the structure and key terms to the deal and a resubmission will be made to Bank Indonesia by end-2012. Management is resolute in acquiring the bank, even if it implies an initial 40% stake. The corresponding rights issue of MYR1.3b earlier on, will be scaled back in accordance with the reduced shareholding.

RHB Capital – Summary Earnings Table FYE Dec (MYR m) 2010A 2011A 2012F 2013F 2014F

Operating income 4,050.3 4,307.8 4,603.6 5,074.9 5,537.7 Pre-provision profit 2,410.6 2,404.5 2,514.6 2,792.2 3,052.9 Recurring net profit 1,516.8 1,578.8 1,798.9 1,927.7 2,092.9 Recurring basic EPS (sen) 70.4 72.5 72.0 77.1 83.8 EPS growth (%) 28.1 2.9 (0.7) 7.2 8.6 Net DPS (Sen) 19.8 20.5 21.6 23.1 25.1 PER (x) 10.8 10.5 10.6 9.9 9.1 Net yield (%) 2.6 2.7 2.8 3.0 3.3 P/BV (x) 1.7 1.5 1.3 1.2 1.1 Book value (MYR) 4.63 5.19 5.89 6.43 7.02 ROAE (%) 15.2 14.0 13.8 12.5 12.5 ROAA (%) 1.2 1.1 1.1 1.1 1.1

Consensus net profit (MYR m) n.a. n.a. 1,663.0 1,824.9 1,919.2 Earnings revision n.a. n.a. 0.9 0.2 3.1

Source: Maybank KE

BUY (Unchanged) Share price: MYR7.42 Target price: MYR8.70 (unchanged) Desmond Ch’ng, ACA [email protected] (603) 2297 8680 Stock Information Description: Banking Ticker: RHBC MK Shares Issued (m): 2,480.8 Market Cap (MYR m): 18,407.3 3-mth Avg Daily Turnover (USD m): 2.70 KLCI: 1,618.55 Free float (%): 27.3 Major Shareholders: % EMPLOYEES PROVIDENT 40.9 ABU DHABI INVESTMENT 22.0 OSK HOLDINGS BERHAD 9.9

Historical Chart

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Performance: 52-week High/Low MYR8.09/MYR6.73 1-mth 3-mth 6-mth 1-yr YTD Absolute (%) 0.4 2.1 - - (0.8) Relative (%) 3.2 4.1 (4.5) (12.9) (6.5)



COMPANY UPDATE 23 November 2012

India

Mahindra Satyam (SCS) Growth Momentum to Continue into 2H

1H EPS of Rs5.4, +36% YoY. SCS registered strong EPS growth, led by INR depreciation, improving employee utilization, and rationalization of SG&A expenses owing to sales force integration with Tech Mahindra (TEHM). We expect growth in software services to the manufacturing and financial services sectors to drive growth in 2H. Further, stable GM and lower FX losses are expected to drive 16% EPS growth in 2H vs. 1H. We maintain our FY13 forecast and TP of Rs116/sh based on PER of 10x FY13F. The stock has declined 5% in November. We upgrade SCS to BUY from HOLD with an upside of 11%. Manufacturing and financial services segment drive 1H revenue (+27% YoY). SCS has seen strong uptick in software services to both sectors, following a QoQ decline in 4QFY12. The proportion of revenue from software services to the manufacturing sector increased to 35% in 2QFY13 vs. 32% in 4QFY12 and that to the financial services sector increased to 20% vs. 19% in 4QFY12. SCS has displayed strong momentum in the manufacturing sector, especially in oil & gas services, aerospace, and defense. 1H revenue constitutes 49% of our FY13F revenue of Rs78.2bn (+22%). 1H gross margin of 38.8% (+400bp YoY). This increase was driven by INR depreciation vs. the USD and improving employee utilization. SCS believes it can further improve employee utilization, driven by continued revenue growth. Due to this and lower FX losses, we expect EPS of Rs6.2, +16% vs. 1H. We maintain our FY13 EPS growth of 14%. Bombay High court approves merger with TECHM. Now, only an approval from the Andhra Pradesh High Court is pending. SCS’s management is optimistic of receiving the same before end-FY13. Uncertainty over cases related to the previous promoters is a mild headwind. SCS had earlier said stated that it plans to legally challenge the Enforcement Directorate order on money-laundering involving its previous management. Nevertheless, SCS has provided Rs12.3bn for such contingencies and we do not think they would have a material impact on the company’s fundamentals. Attractive PER of 9x FY13F and 8x FY14F. We believe the valuations are attractive. Acquisitions using surplus cash present upside trigger to our forecast.

SCS – Summary Earnings Table FY Mar 31 (Rsm) FY10 FY11 FY12 FY13F FY14F Revenue 54,810 51,450 63,956 78,183 89,133 EBITDA 5,749 4,714 10,343 16,992 18,775 Recurring Net Profit 2,480 4,938 13,060 13,634 15,667 Recurring Basic EPS (Rs) -1.1 4.1 10.2 11.6 13.3 EPS growth (%) n.a. n.a. 147.3 13.9 14.9 PER (x) n.a. 25.5 10.3 9.0 7.9 EV/EBITDA (x) 16.6 19.4 9.1 5.2 4.3 Div Yield (%) 0.0 0.0 0.0 0.0 0.0 P/BV(x) 6.5 7.1 4.1 2.8 2.1 Net Debt/Equity (%) 113.5 183.1 96.8 80.4 70.6 ROE (%) 49.6 27.4 55.4 37.2 30.5 ROA (%) 4.4 8.1 19.2 16.4 16.0 Consensus Net Profit (Rsm) - - - 12,259 13,333 Source: Company data, Bloomberg, KESI estimates

BUY (Upgraded from HOLD) Share price: Rs105/sh Target price: Rs116/sh (Unchanged) Urmil Shah [email protected] (91) 22 66232606

Stock Information Description: Provides IT services to Fortune 500 clients. Tech Mahindra owns 43% and the process for merger has been initiated at swap ratio of 1:8.5 for TECHM:SCS Ticker: SCS IN Shares Issued (m): 1,177 Market Cap (US$ bn): 2.2 6-mth Avg Daily Volume (US$m): 7.6 SENSEX: 18,517 Free float (%): 57.4 Major Shareholders: % Tech Mahindra

42.6

Key Indicators (FY13F) ROE – annualised (%) 11.4 Net cash (Rs bn): 71.8 Operating CF (Rs bn): 610

Historical Chart

Performance: 52-week High/Low Rs116/58 1-mth 3-mth 6-mth 1-yr YTD Absolute (%) -2.7 3.9 48.1 53.9 59.0 Relative (%) -1.5 0.6 34.0 38.1 39.5

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Strategy 23 November 2012

Indonesia

Strategy Minimum Wage Increases: Winners & Losers

Each year, the minimum wage (basic wage for workers with up to a 12-month employment stint with a company) is determined by regional governments based on the recommendations of the Compensation Council. The rate of increase proposed would take into account inflation and other factors. The Council conducts surveys on reasonable living costs to propose increase in the minimum wage. In 2012, minimum wage increases range from 3% to 19% YoY. Because Jakarta is the largest province in Indonesia and employs the most workers, it was assigned the highest minimum wage (IDR1,529 or USD159 per month) and the greatest increase of 19%. Minimum Wage Trend in Jakarta, 2002-2012

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Source: Bappenas The Governor of Jakarta finally relented to pressure from workers and labour unions and approved a 44% YoY increase of the minimum wage to IDR2,216,243 (USD230) for the year of 2013, making it the highest increase over the past ten years. Between 2002 and 2012, the increase had ranged between 5% (in 2010) and 39% (in 2002). As Jakarta is the largest province in Indonesia and employs the most workers, it is almost always assigned the highest amount of minimum wage and the greatest increase. While the obvious impact of the higher minimum wage is higher costs, we believe that the additional wages to be paid by the publicly listed companies will be less than the actual rate of increase decided by the government (i.e., 44% for Jakarta); most of these companies already pay its workers above the minimum wage.

Katarina Setiawan [email protected] (62 21) 2557 1188 Lucky Ariesandi, CFA [email protected] (62 21) 2557 1127 Pandu Anugrah [email protected] (62 21) 2557 1137 Adi N. Wicaksono [email protected] (62 21) 2557 1130 Anthony Yunus [email protected] (62 21) 2557 1136


Company Update 23 November 2012

Singapore Co. Reg No: 198700034E

MICA (P) : 099/03/2012

Goodpack Ltd Resilient amidst difficult conditions

Steady 1Q13 results. Our recent discussions with management suggest that business conditions remain difficult for Goodpack, as a result of an overall slowdown in activities in China as well as Europe. Nonetheless, we think the decent growth in the recent seasonally weaker 1Q13 results proves that Goodpack has a resilient business model. Recurring net profit still grew 15%. Stripping out a USD0.6m gain from disposal of PPE in the corresponding period last year, recurring income still grew 15% to USD13m, despite a US1.5m swing in foreign exchange gain. This appears to be operating leverage from better trade lane matching, as revenue grew 11% against logistics costs of 6%. Europe and China are slow. The former makes up about 20% of group revenue and is especially slow due to weaker demand for commercial vehicles. Over in China, overall manufacturing activities have slowed down, impacting demand for both synthetic rubber and natural rubber. In terms of product verticals, natural rubber has seen more slowdown due to the narrower application and Goodpack’s bigger market share. On the auto parts market, progress has been disappointingly slow, as customers are more pre-occupied with their slowing business. Additional business from synthetic plants in Singapore. Management shared that two of the six new synthetic rubber plants in Singapore should come onstream in 3QFY13F. With a combined capacity of 150,000 tpa, we estimate this will be a requirement of about 30-50k new boxes. Out of the 6 plants, Goodpack has signed with 4 so far, which should again add on to this requirement. Goodpack’s IBC fleet is currently estimated at 2.8m and addition this year should be around 250k. Earnings usually come back stronger. With the likely slower progression on the auto-front, we trim our FY14F-FY15F earnings by 5-9% while keeping FY13F largely unchanged. This is still a resilient business which we think investors should hold over the longer-term. Key-catalyst still remains progress on the auto-parts vertical. On the other hand, slower demand and subsequently capex for new boxes may lead to dividend surprises, given its low-gearing of 15% currently. Maintain BUY with a TP of SGD2.25, now pegged to 20x PER. Goodpack Ltd – Summary Earnings Table Source : Maybank KE FY June (USDm) 2011 2012 2013F 2014F 2015F Revenue 158.6 177.2 200.6 234.0 271.4

EBITDA 71.6 76.1 83.7 98.1 114.0

Recurring Net Profit 43.2 45.2 52.1 61.8 73.3

Recurring EPS (US cents) 7.7 8.1 9.3 11.0 13.1

DPS (US cents) 3.0 5.0 5.0 5.0 5.0

PER (x) 20.1 19.2 16.7 14.0 11.8

EV/EBITDA (x) 12.9 11.9 10.5 9.1 7.8

Div Yield (%) 1.9 3.2 3.2 3.2 3.2

P/BV (x) 3.1 2.7 2.5 2.3 2.1

ROE (%) 17.7 16.7 15.9 17.0 17.9

ROA (%) 10.6 8.9 11.4 12.2 13.1

Consensus Net Profit na na 51.5 61.2 75.7

Source: Maybank KE, company

BUY (unchanged) Share price: SGD1.90 Target price: SGD2.25 (from SGD2.07) James KOH [email protected] (65) 6432 1431

Stock Information

Description: Operates in the returnable immediate bulk container (IBC) industry for the movement, handling and storage of commodities. Ticker: GPACK SP Shares issued (m) 531.3 Market Cap (USD m) 823.8 3-mth Avg Daily Turnover (USD m): 0.3 STI Index 2,986.6 Free float (%): 55.7 Major Shareholders: % David Lam – Chairman 30.2 Capital Group 8.1 Mason Hill Adviser 5.2

Key Indicators (as of Dec 2011)

ROE (%) 15.9 Net gearing (%) 15 NAV/shr (USD): 0.60 Interest cover (x): 24.2

Historical Chart

Performance: 52-week High/Low SGD1.955/SGD1.23 1-mth 3-mth 6-mth 1-yr YTD Absolute (%) 0.0 10.0 18.4 28.8 39.9 Relative (%) 2.0 12.3 11.9 17.2 23.9



Vietnam

Phu Nhuan Jewelry (PNJ) Exports – A New Catalyst

Revenues hurt by elimination of gold bars and weak retail sales. PNJ’s 9M12 revenue plunged 66% YoY due to a reduction in gold bullion bar production, trading and export because of the State’s decision to monopolise gold bar production. To make matters worse, same-store-sales were down about 6% because of the weak economy, which pushed profit from the retail sector down 4%.

Weak 9M12 core profit. PNJ’s 9M12 net profit increased about 12% YoY to VND221b thanks to extraordinary income from the sale of its Dai Viet Energy subsidiary, an LPG gas distributer. Without this nonrecurring gain, the company’s net profit would have declined 11% because of the above-mentioned issues.

Expanding margins. Despite the issues mentioned above, the company’s margins are actually expanding. Gross margin expanded from 3.8% to 8.7%, because the revenue contribution of the gold jewellery segment (gross margin of 11%) increased from 28% to 54%, while revenue from the production of gold bars (gross margins of 1%) decreased from 70% to 43%. Gold jewellery now contributes 70% of the company’s gross profit. Another factor pushing margins higher is the shift from low margin wholesale revenues to higher margin retail and export sales as company opens new store and also expands its jewellery exporting business. The retail and wholesale segments carry gross margins of 20% and 2%, respectively.

New catalyst from exports. PNJ’s new factory began operating in Oct 2011, which increased overall capacity by 60%. PNJ plans to use some of this additional capacity to treble revenue from jewellery exports by 2017 to about 10% of revenues. The company has already secured a contract to sell jewellery in Costco’s stores in the USA starting next year, and expects these exports to generate gross margins of 11%.

Valuation. PNJ is quite cheap, currently trading at a PEG of 0.8x (FY13 PER of 9x versus expected earnings growth of 11%). Another positive is its 7% dividend yield, although its payout ratio is a bit high at 70%. Investors need to act quickly before the stock’s foreign ownership limit is reached. Maintain BUY.

PNJ – Summary Earnings Table FYE 31 Dec (VND b) 2009 2010 2011 2012 E 2013 F Revenue 10,256 13,752 17,967 7,916 7,473 EBITDA 295 263 398 343 385 Recurring Net Profit 204 212 247 215 239 Recurring Basic EPS (VND) 2,841 2,946 3,427 2,986 3,320 EPS growth (%) 62.9 3.7 16.3 (12.8) 11.1 DPS (VND) 1,900 2,000 2,500 2,300 2,300 PER 11.1 10.7 9.2 10.5 9.5 EV/EBITDA (x) 9.1 11.3 7.7 8.9 8.8 Div Yield (%) 6.0 6.3 7.9 7.3 7.3 P/BV(x) 2.4 2.2 2.0 1.8 1.5 Net Gearing (%) 65.7 93.6 111.8 99.6 99.7 ROE (%) 22.1 21.2 22.8 21.6 17.5 ROA (%) 11.0 9.4 9.2 8.1 8.1

Source: Maybank IB

BUY (Unchanged) Share price: VND 31,400 Target price: VND 36,500(changed) Thoa Dang [email protected] (84) 8 445 55888 (x8083) Stock Information Description: Manufactures jewelry, half of which is sold through the company’s chain of 160 jewelry stores. Ticker: PNJ VN Shares Issued (m): 72 Market Cap (USD m): 108 3-mth Avg Daily Turnover (USD m): 0.05 VNI Index: 383.32 Free float (%): 78 Major Shareholders: Cao Ngoc Dung 10.2 Vietnam Azalea Fund 6.9 Route One Investment 5.1 Key Indicators ROE – annualised (%) 22 Net cash (SGD m): (1,252) NTA/shr (SGD): 15,593 Interest cover (x): 0.3

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Vietnam

Vinh Son Song Hinh (VSH) New PPA a Potential Catalyst

New PPA imminent. Vinh Son Hydro and state owned electricity distribution monopoly Electricity Vietnam (EVN) have been without a Power Purchase Agreement (PPA) since the old one expired in 2008 because they can’t agree on a price. VSH wants to keep the PPA prices unchanged at VND476/kWh in the rainy season and VND580/kWh in the dry season, while EVN is wants a much lower PPA price.

Pressure from EVN unlikely to be effective. This year EVN has been paying VSH 61% of the old PPA price for the electricity VSH produces, presumably to pressure VSH into accepting a lower PPA price, but Vinh Son has strong support from the State Capital Investment Corporation (which holds 24% of VSH’s shares), so we think it is very likely that PPA prices will remain unchanged, and will be retroactive to 2010. We expect the new PPA to be signed either at the end of this year or early next year.

EVN in financial trouble. EVN has been requesting lower PPA prices since 2010, because of its financial difficulties. The company owes PetroVietnam VND13,000b, most of which is payables for purchasing electricity. In addition, EVN currently needs a substantial amount of capital for infrastructure investments. Other power companies, such as TBC and PPC, also had difficulties negotiating PPAs with EVN.

9M12 performance. VSH’s 9M12 revenue and pretax profit dropped 26.7% and 29.9% YoY, respectively, because FY12 revenue has been booked at prices equivalent to 61% of the old PPA price, while the FY11 revenue was booked at prices equivalent to 90% of the old selling price.

FY12 forecasts. We think it’s likely that VSH will resume selling electricity to EVN at the same prices that it charged EVN before the old PPA expired and we think that these old prices, which are considerably higher than the price EVN is currently paying to VSH will be applied retroactively to 2010-2012. The only open question is whether the new PPA will be signed this year (unlikely) or next year (more likely). Those two different scenarios lead to quite different earnings and valuations numbers for 2012, although the cashflows to VSH would essentially be the same in either scenario. In the more likely case that the new PPA is signed next year, then, since FY11 revenue is currently booked with prices at 90% of the PPA old prices, and FY11 is being booked at 61% of the old PPA prices then FY12 revenue and pretax profit would plunge 29% and 39% YoY respectively.

VSH– Summary Earnings Table FYE Dec (VND b) FY08 FY09 FY10 FY11 FY12E Revenue 483.7 517.6 424.5 459.4 323.1 EBITDA 447.1 469.3 373.9 372.1 281.0 Recurring Net Profit 370.9 374.5 302.4 329.0 205.5 Recurring Basic EPS (VND) 1,799 1,816 1,469 1,627 1,016 EPS growth (%) 44.4 1.0 -19.1 10.7 -37.6 DPS (VND) 1,800 1,400 1,000 1,000 1,000 PER 6.2 6.2 7.6 6.9 11.0 EV/EBITDA (x) 5.3 4.7 5.6 6.4 7.4 Div Yield (%) 16.1 12.5 8.9 8.9 8.9 P/BV(x) ROE (%) 17.8 17.0 12.9 13.8 8.4 ROA (%) 15.0 14.8 10.8 10.3 6.2 Source: Maybank IB

N/A Share price: VND 11,200 Diep Thi Ngoc Trinh [email protected] (84) 4 44 555 888 – ext 8208 Stock Information Description: The largest hydropower company in Vietnam’s Centre region, contributing 1.2% of total national output. Ticker: VSH VN Shares Issued (m): 202.2 Market Cap (US$ m): 107.9 3-mth Avg Daily Vol. (US$ m): 0.15 VN Index: 385.1 Free float (%): 36.9 Major Shareholders: Electricity of Vietnam 30.6 SCIC 24.0 VIAC No 1 Ltd Partner 8.5 Key Indicators ROE (%) 13.8 Net cash (VND b): -9.0 NTA/shr (VND): 11,370 Interest cover (x): 11.6

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Vietnam

Vietcombank (VCB) Earnings Dragged By Bad Debt

9M12 net earnings fell 4% YoY. VCB posted 9M12 net earnings of VND3,354b, down 4% YoY (vs. a peer average increase of 2%) although its pre-provision operating profits (PPOP) were still up 10% YoY. The gap was due to a 50% YoY rise in its 9M12 provision expenses given the worsening bad debt situation in the banking sector.

Net interest income fell 7% YoY. Despite strong loan growth to end customers of 20% YoY, 9M12 net interest income fell 7% YoY to VND8,502b (vs. a peer average increase of 12% YoY) as its NIM shrank by 90bps YoY to 3.2%. NIM compression was due to VCB’s cut in lending rates for favoured industries, based on the central bank’s directive to the entire banking sector to lower interest rates, especially for loans to industrial & agriculture companies.

Non-interest income tripled YoY. 9M12 non-interest income including revenues via fees & commissions, treasury operations, dividends and other income tripled YoY to VND2,522b. This apparent, exceptional growth resulted from the previous misclassification of VND1,200b as “other expenses” rather than as “interest expenses”. Last year VCB mobilised deposits at interest rates which were above the official interest cap by paying addition “bonus fees” to customers that were booked as “other expenses”. Assuming that those expenses were in the right place last year, 9M12 non-interest income would have risen 20% YoY (and the 9M11 NIM would have been 3.5% instead of 4.2%)

Provision expenses spiked YoY. 9M12 provision expenses spiked by 50% YoY as the bank wrote off VND1,074b of bad loans (equivalent to 14% of its non-performing loans). This helped to reduce VCB’s NPL ratio from 3.9% in 9M11 to 3.4% in 9M12.

Reiterate HOLD. We expect our FY12 and FY13 net earnings growth of 3% and 6%, respectively. A large capital injection by Mizuho in 1Q12 increased VCB’s equity by 40%, causing the bank’s ROE to decline from an average of 21% over 2009-2011 to an expected 12% for the next few years. The stock is trading at an FY13F PER and PBR of 11.8x and 1.3x respectively. HOLD reiterated.

VCB FYE 31/12 (VND’b) 2010 2011 2012F 2013F 2014F

Operating Income 11,531 14,871 15,476 17,332 18,614 Pre-provision Profit 6,953 9,171 9,691 11,272 12,099 Profit before Tax 5,569 5,697 5,780 6,131 6,419 Net Profit 4,282 4,197 4,371 4,639 4,857 EPS (VND) 2,490 2,500 1,886 2,002 2,096 EPS growth (%) 11.5 0.4 -24.5 6.1 4.7 Net DPS (VND) 0 1,200 1,200 1,200 1,200 PER (x) 9.4 9.4 12.4 11.7 11.2 Div Yield (%) 0.0 5.1 5.1 5.1 5.1 P/BV (x) 2.0 1.6 1.3 1.3 1.2 Book Value (VND) 11,546 14,539 17,804 18,347 18,971 ROAE (%) 22.9 17.0 12.5 11.1 11.2 ROAA (%) 1.5 1.2 1.1 1.1 1.0

Source: Company, Maybank Kim Eng

HOLD Share price: 23,400 VND Target price: 23,800 VND Ngo Bich Van [email protected] (84) 8 4455.5888 (ext. 8084) Stock Information Description: Vietcombank is the 3rd state-owned commercial bank. Ticker: VCB VN Shares Issued (m): 2,317.4 Market Cap (US$ m): 2,588.3 3-mth Avg Daily Vol. (US$ m): 0.4 VN Index: 383.7 Free float (%): 7.9 Major Shareholders: SBV 77.1 Mizuho Corporate Bank Ltd., 15.0 Key Indicators ROE – annualised (%) 12.4

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Sector Update 23 November 2012

Vietnam

Vietnam’s Listed Coal Stocks Update

Ticker MCap ($ m)

PE (x)

PB (x)

ROE (%)

Div Yld (%)

N.Mar (%)

Op. Mar (%)

NBC 10.9 3.0 0.8 32 16 3.3 5.7 TVD 9.7 2.0 0.6 58 20 4.6 10.0 TDN 8.2 2.5 0.6 40 14 2.8 5.4 TCS 8.2 2.0 0.6 36 13 2.2 5.7 TC6 7.1 1.8 0.5 44 18 2.9 5.7 MDC 6.9 2.2 0.7 42 21 5.2 6.9 THT 6.8 3.4 0.5 28 19 3.1 4.3 HLC 5.4 2.6 0.7 33 17 3.0 7.0 Source: Bloomberg, Maybank Kim Eng

Low enterprise values and valuations. The market capitalizations of Vietnam’s 8 listed coal companies are a small fraction of the value of their coal reserves because those coal reserves are still technically owned by Vinacomin, Vietnam’s SOE coal company, and those listed coal companies are obligated to sell their coal production to Vinacomin at below-market-prices. Concerns about the fact that these listed coal companies are obligated to sell their coal to Vinacomin have made these stocks very cheap on traditional valuation metrics like PE, PB and dividend yield, but we think the stocks are trading too cheap because investors are viewing the stocks the wrong way.

Misunderstood businesses. Many investors focus on the comparison between the enterprise values of the listed companies and what the enterprise values of those companies would be if they owned their coal reserves and were allowed to sell the coal they produce at market prices (ie investors think the stock prices would be 20-30x higher if they were allowed to sell their coal to whoever they want).

Vietnam’s listed coal companies are really contract miners. The faux-comparison identified above (value of coal reserves vs. enterprise value) ignores the fact that Vietnam’s listed coal companies are essentially contract miners so the appropriate metric to focus on is not the below-market price that they sell their coal to Vinacomin at but rather the profit margin of the contract mining activity they undertake for Vinacomin. The operating margins of the listed companies are too low, but their margins are not low enough to justify the low valuations.

Increased investor interest. Recent developments have given some investors the impression that the industry is now headed in the right direction. One sophisticated investor, REE, a listed Vietnamese conglomerate with property, air conditioning, and resources businesses is buying listed coal shares.

A response to investors’ questions. Some of our overseas institutional clients and local retail clients have taken an interest in the sector, and this note is a summary of information we’ve compiled for those investors. It is not clear that change in the industry is imminent and frankly speaking, investors’ reaction to the information presented in this report has been muted.

Michael Kokalari, CFA [email protected] (84) 8 3838 6647


Philippines

Interim results

23 November 2012

ABS-CBN Corp Airtime Revenue Picks Up in 3Q12

9M12 earnings exceeded our full-year forecast. ABS-CBN Corp (ABS/ ABSP) disclosed 9M12 net income of PHP1.55b, up 9.9% YoY after excluding PHP825m one-off in 9M11. While this already exceeds our 2012F net income of PHP1.35b, we note ABS-CBN posted a net loss in 4Q11. Consolidated net revenues grew 13.5% to PHP21.5b, 74.9% of our full-year forecast of PHP28.7b while operating costs grew 14.3% to PHP19.5b, 72.9% of our forecast PHP26.8b. Operating income hit PHP1.94b, up 5.9% in 9M12 and ahead our 2012 target of PHP1.87b.

Strong operating income growth highlights 3Q12 results. Operating income grew 81.2% to PHP819m in 3Q12. We attribute this to the faster growth in gross airtime revenue of 15.4% in 3Q12 from 4.7% in 1H12 helped by better TV ratings. This brings the 9M12 gross airtime revenues to PHP14.5b, up 8.4% YoY and 75.9% of our 2012 forecast of PHP19.1b. However, we got indications from management that October and early November gross airtime revenue growth has not been as strong. Meanwhile, production cost grew at a slower rate of 9% to PHP2.61b in 3Q12 and was up 9.7% to PHP7.6b in 9M12

Consumer sales up mainly due to acquisitions early this year. ABS-CBN Global revenues were generally flat in 3Q12 and 9M12, amounting to PHP1.22b and PHP3.56b, respectively, still adversely affected by the weak global economy. On the other hand, Sky Cable revenues jumped 44% to PHP1.5b in 3Q12 and up 29.3% in 9M12, boosted by subscription revenues from newly-acquired Destiny Cable. Other revenues also jumped 96% to PHP642m in 3Q12 and up 68% to PHP1.83b, boosted by acquisition of the wireless fixed-line business of affiliate Bayan Telecommunications Inc (Bayantel).

Earnings, target price upgraded but still rated HOLD. Taking into account management guidance for a minimum net income of PHP1.6b, we have raised our net income forecast 21% to PHP1.63b for 2012 and 2.7% to PHP1.89b for 2013. We have also raised 18% our DCF-based target price to PHP36.50/sh. With the potential share price upside less than 10%, we maintain our HOLD rating on ABSP.

ABS-CBN Corp – Summary Earnings Table YE 31 Dec (PHPm) 2009A 2010A 2011A 2012F 2013F Revenue 24,849 32,291 28,200 32,182 35,645 EBITDA 6,272 8,481 5,334 6,071 7,109 Reported Net Profit 1,702 3,179 2,420 1,625 1,885 Adjusted Net Profit 1,782 3,179 1,273 1,625 1,885 EPS (PHP) 2.31 4.16 1.66 2.12 2.46 EPS growth (%) 37.1 80.0 (59.9) 27.6 16.0 PER (x) 14.7 8.2 20.4 16.0 13.8 EV/EBITDA (x) 5.1 3.6 6.0 5.7 4.9 Div Yield (%) 2.6 3.3 5.9 2.4 1.6 Net Gearing (%) 34.8 21.5 20.1 31.3 28.7 Consensus Net Profit (PHPm) N/A N/A N/A 1,287 1,826 Source: Company, Maybank ATR Kim Eng Securities, Inc, Bloomberg

HOLD (Unchanged) Share price: PHP33.90 Target price: PHP36.50 (from PHP31.00) Lovell Sarreal [email protected] (632) 849 8841

Stock Information Description ABSP’s core business is television and radio broadcasting. It also has interests in cable & direct-to-home (DTH) television distribution & telecommunications services overseas, movie production, audio recording & distribution, video/audio post production, film distribution, merchandising, internet & mobile services & publishing. Ticker: ABSP PM / ABSP.PS Shares Issued (m): 765 Market Cap (PHPm): 25,583 Market Cap (USDm): 623 3-mth Avg Daily Turnover (USDm): 0.20 PSEi: 5,513.37 Free float (%): 41.3 Major Shareholders: LOPEZ INC 58.3 Key Indicators ROE (%) 8.6 Net debt (PHPm): 6,738.0 BV/share (PHP): 25.3 Interest cover (%): 2.9

Historical Chart

Source: Bloomberg Performance: 52-week High/Low PHP50.00 / PHP23.30 1-mth 3-mth 6-mth 1-yr YTD Absolute (%) 14.1 23.9 (2.0) 5.9 13.0 Relative (%) 12.7 18.1 (13.3) (22.3) (12.4)

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PP16832/01/2013 (031128)

Malaysia

YTL Power International No Major Negatives

In line; maintain BUY. 1QFY6/13 net profit of MYR253m (-38% QoQ, +3% YoY) represent 23% of our and 20% of consensus full-year forecasts. A first DPS of 0.94sen was announced as expected, half of the previous year’s amount. Post the recent share price correction (-14% YTD), YTLP’s implied net yield is now c.3%, while FY13 P/BV multiple, at 1.1x, is at its trough. Our target price is DCF-based which implies 16.7x FY13 PER.

Contraction in utilities earnings. Revenue at the Malaysian power plants declined 4% YoY due to plant maintenance. This in turn led to a 41% fall in pre-tax profit. At Singapore, Power Seraya’s pre-tax profit contracted 6% YoY, as higher fuel costs more than offset the impact of higher sales volumes. Wessex’s pre-tax profit also declined, due to a combination of cost inflation and higher depreciation.

Narrowing of Wimax losses. Wimax losses narrowed to MYR61m from MYR95m in 4QFY6/12 on the back of a 42% increase in revenue. We attribute this to increased billings from the 1BestariNet project. There has been organic growth, albeit from a low base. Assuming a quarterly revenue run-rate of MYR75m from 1BestariNet, the implied residual revenue for the Wimax business is MYR27m, double that of 1QFY6/12.

Balance sheet remains relatively robust for now. Despite the marginal QoQ increase in gross debt, net gearing levels declined to 1.36x from 1.42x in Jun 2012. There was no significant increase in capex this quarter, which in turn suggests the group’s capex plans could be back-end loaded. The chance that dividends will revert to FY6/11 levels remains slim in our view.

Value building up. YTLP’s share price has declined 14% YTD, and is now trading close to trough valuations on both a PER and P/BV basis. While uncertainty continues to linger over 1) the intentions of its major shareholder, and 2) the continued opacity of its operations, value continues to build for its assets. We keep our target price and rating unchanged pending an update with management.

YTL Power International– Summary Earnings Table Source: Maybank KEFYE Jun (MYR m) 2011A 2012A 2013F 2014F 2015FRevenue 14,662.6 15,876.2 14,149.5 14,631.1 15,121.5 EBITDA 3,105.5 2,995.1 3,249.9 3,424.3 3,595.6 Recurring Net Profit 1,364.2 1,148.2 1,090.9 1,211.8 1,330.3 Recurring Basic EPS (cents) 17.5 15.1 13.2 14.6 16.0 EPS growth (%) (0.6) (13.6) (12.7) 10.7 9.5 DPS (cents) 9.4 4.7 4.7 4.7 4.7

PER 8.8 10.2 11.7 10.5 9.6 EV/EBITDA (x) 8.1 8.2 6.8 6.5 6.0 Div Yield (%) 6.1 3.0 3.0 3.0 3.0 P/BV(x) 1.3 1.2 1.1 1.0 0.9

Net Gearing (%) 163.5 141.7 108.4 98.6 85.8 ROE (%) 17.4 12.8 11.1 11.4 11.5 ROA (%) 3.9 3.1 2.7 2.9 3.2 Consensus Net Profit (MYR m) N/A N/A 1,242.5 1,328.7 1,452.0

Buy (unchanged) Share price: MYR1.53 Target price: MYR2.20 (unchanged) Yin Shao Yang [email protected] (03) 2297 8916

Stock Information Description: An investment holding company which develops, constructs, maintains and operates power stations through its subsidiaries. Ticker: YTLP MK Shares Issued (m): 7,335.1 Market Cap (MYR m): 11,222.7 3-mth Avg Daily Turnover (US$ m): 1.17 KLCI: 1,618.55 Free float (%): 34.6 Major Shareholders: % YTL Corp Bhd 44.7 EPF 9.3 Cornerstone Crest 6.3

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17 October 2011

PP16832/01/2012 (029059)


PP16832/01/2013 (031128)

Page 1 of 2

Malaysia

Multi-Purpose Holdings Dividends Make A Comeback

And now, for the demerger. Although weighed down by investment

losses, Multi-Purpose Holdings’ (MPHB) 3Q12 core results were within

expectations. More importantly, its gaming fundamentals are intact. As

expected, an interim DPS of 6sen less tax was declared after a two-

quarter drought. Maintain BUY with a SOP-based MYR4.43 TP.

Within expectations; dividends return. 3Q12 core net profit of

MYR57.3m (-9% YoY, -54% QoQ) brought 9M12 core net profit to

MYR257.8m (+18% YoY), within expectations at 73% of our full-year

estimate. 9M12 revenue of MYR2.6b (-1% YoY) was also within

expectations at 76% of our FY12 estimate. After a two-quarter drought,

a first and interim DPS of 6sen less tax (9M11: 5sen less tax) was

declared, as we had expected.

Weighed down by investment losses. 3Q12 core net profit was 9%

lower YoY due to a MYR17.8m FV investment loss (under Corporate &

others) which was 76% higher YoY, and higher gaming opex. 3Q12

core net profit was 54% lower QoQ due to the FV investment loss vs.

an investment gain of MYR21.6m (from FV changes and disposals) in

2Q12 and higher tax expenses offset by lower prize payout ratio QoQ.

Gaming fundamentals intact. 9M12 gaming revenue of MYR2.3b (-

2% YoY) was within expectations at 76% of our full-year estimate.

9M12 pretax profit of MYR246.9m (-21% YoY) was also within

expectations at 73% of our FY12 estimate. It is difficult to forecast

investment gains and losses but we are comfortable with our gaming

estimates. Therefore, we leave our core earnings estimates unchanged.

Maintain BUY call and SOP-based TP of MYR4.43. At current levels,

investors who BUY MPHB will hold Magnum, the only Malaysian-listed

pure NFO going forward, and get MPHB’s property assets for free

(Table 1). The demerger of the non-gaming businesses (MPHB Capital)

from the gaming business (Magnum) is on track. The former's

prospectus will be issued by year-end and it will be listed in Jan 2013.

Multi-Purpose Holdings – Summary Earnings Table Source: Maybank KE FYE (MYR m) 2010A 2011A 2012F 2013F 2014F Revenue 3,616.4 3,558.1 3,429.6 3,486.2 3,688.9 EBITDA 691.9 647.9 594.3 634.4 725.8

Recurring Net Profit 300.6 297.5 355.3 410.8 487.1

Recurring Basic EPS (cents) 27.9 23.4 24.9 28.8 34.1 EPS growth (%) (19.7) (16.3) 6.4 15.6 18.6

DPS (cents) 6.8 11.3 11.3 11.3 11.3

PER 13.3 15.9 14.9 12.9 10.9

EV/EBITDA (x) 7.9 9.7 10.0 8.9 7.4

Div Yield (%) 1.8 3.0 3.0 3.0 3.0 P/BV(x) 1.5 1.6 1.5 1.4 1.3 Net Gearing (%) 57.8 30.2 17.8 9.9 1.0 ROE (%) 12.6 10.2 10.6 11.4 12.6 ROA (%) 4.7 4.5 5.6 6.8 7.9 Consensus Net Profit (MYR m) N/A N/A 370.1 394.4 442.6

Buy (unchanged)

Share price: MYR3.71 Target price: MYR4.43 (unchanged)

Yin Shao Yang [email protected] (03) 2297 8916

Stock Information

Description: Number forecast operator. Ticker: MPU MK Shares Issued (m): 1,437.7

Market Cap (MYR m): 5,334.0 3-mth Avg Daily Turnover (USD m): 1.31 KLCI: 1,618.55 Free float (%): 51.1

Major Shareholders: % Casi Management 28.2 Asia 4D Holdings 11.1

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PP16832/01/2013 (031128)

Malaysia

Lafarge Malayan Cement Rock Solid Results

In line. 3Q12 net profit of MYR96m (+17% QoQ, +35% YoY) lifted 9M12 net profit to MYR243m (+21% YoY), with 9M12 figures making up 68% of our and 65% of the street’s full-year forecasts. We expect a stronger 4Q12 on the 6% cement ASP hike in Aug 2012 and falling coal costs (4Q: -7% QoQ). Investors may look forward to significantly higher dividends in 4Q vs. our and the market’s expectation of a 3.8-4.0% net yield given LMC’s historically high cash pile. We maintain our forecasts, BUY rating and TP of MYR10.10 (21x FY13 PER).

Driven by volume and margin expansion. Strong 3Q12 net profit of MYR96m (+17% QoQ, +35% YoY) was driven by: (i) higher sales volumes, with 9M12 sales volumes up 11% YoY (6M12: +9% YoY); and (ii) higher EBITDA margins of 23% (+1.9-ppt QoQ, +2.1-ppt YoY) on higher ASPs following a gross ASP hike of 6% in Aug 2012 and lower coal costs (-9% QoQ, -28% YoY).

Optimistic on dividend surprise in 4Q12. LMC declared a DPS of 8sen for the quarter, bringing YTD DPS to 24sen, similar to 9M11. We believe final DPS may surpass our 22sen and the market’s 13sen expectations, in view of its strong cashflow-generating ability (equity FCF per quarter: 15sen/shr) and low capex obligations. LMC’s net cash has risen to MYR285m (34sen/shr) as at end-Sep 2012 (+20% QoQ) and the company is almost debt free (total debt is just MYR2m).

Maintaining forecasts. We maintain our below-consensus forecasts, which already incorporate a strong 4Q12 amid falling coal costs (-7% QoQ) and the cement ASP hike in Aug 2012. We think the premium valuation attached to LMC is warranted given the prospects of a higher dividend payout and visible cement demand growth from various large-scale infrastructure projects (LRT extension, Sg Buloh-Kajang MRT, Tanjung Bin and Janamanjung power plants).

LMC – Summary Earnings TableFYE (MYR m) 2010A 2011A 2012F 2013F 2014FRevenue 2,324.9 2,552.6 2,720.7 2,825.7 2,993.0 EBITDA 512.4 568.5 634.6 692.1 719.0 Recurring Net Profit 295.3 317.8 360.2 407.2 426.4 Recurring Basic EPS (cents) 34.8 37.4 42.4 47.9 50.2 EPS growth (%) (28.4) 7.6 13.3 13.1 4.7 DPS (cents) 34.0 34.0 38.0 44.0 47.0


Net Gearing (%) Cash Cash Cash Cash Cash ROE (%) 9.6 10.3 11.5 12.9 13.4 ROA (%) 7.2 7.8 9.0 10.0 10.4 Consensus Net Profit (MYR m) n.a. n.a. 372.2 434.6 459.5 Source: Maybank KE

Buy (unchanged) Share price: MYR9.62 Target price: MYR10.10 (unchanged) Lee Yen Ling [email protected] (03) 2297 8691

Stock Information Description: Malaysia’s leading cement and clinker manufacturer and distributor. Ticker: LMC MK Shares Issued (m): 849.7 Market Cap (MYR m): 8,174.1 3-mth Avg Daily Turnover (USD m): 1.97 KLCI: 1,618.55 Free float (%): 32.8 Major Shareholders: % Lafarge Cement 51.0 Lafarge Intl Holdings 8.4 EPF 7.8

Historical Chart

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Performance: 52-week High/Low MYR10.18/MYR6.3 1-mth 3-mth 6-mth 1-yr YTD Absolute (%) (2.8) 10.6 37.2 50.1 37.4 Relative (%) (0.0) 12.6 32.7 37.1 31.7



PP16832/01/2013 (031128)

Malaysia

Kossan Rubber Industries Recognition Here

Strong results support our BUY call. Kossan’s 3Q12 net profit of MYR29m (+24% QoQ, +24% YoY) lifted 9M12 net profit to MYR75m (+11% YoY), making up 74% of our and 71% of the market’s full-year forecasts. We expect a re-rating of the stock given its strong results, flattish share price performance and cheap forward PER of 8.5x. Maintain BUY and TP of MYR3.75 (10x FY13 PER).

Driven by volume and margin expansion. Strong 3Q12 results were driven by its glove manufacturing division on higher sales volume of around 3b pcs (+15% QoQ, +25% YoY). Kossan’s overall pretax margins expanded 2.2ppts QoQ to 12% on lower input costs (latex: -13% QoQ, NBR: -14% QoQ). Glove pretax margins rose 2ppts QoQ while TRP rose 3.4ppts. Additionally, though its cleanroom division was still in the red, pretax losses, mostly due to costs related to new product development, narrowed to MYR0.1m (2Q12: MYR0.3m).

Expansions in plan. Commercialisation of an additional 700m pcs of surgical glove capacity is set to take place in Dec 2012, boosting total annual capacity to 14.7b pcs (+5% since Jul 2012) and potentially contributing around 18% to Kossan’s FY13 revenue. Meanwhile, its plans to expand into Indonesia (TRP business, rubber plantation) are ongoing, and we expect the company to ink several deals in this regard sometime in 2013.

Maintaining forecasts. We maintain our capacity-driven earnings forecasts, projecting growth of 10% in FY12 and 19% in FY13. Trading at a prospective PER of just 8.5x, Kossan is cheap compared to the 14x PER average of larger-cap glove producers, and 10-12x for smaller peers (Adventa, Latexx Partner) based on recent M&A activities.

Kossan Rubber Industries – Summary Earnings Table FYE (MYR m) 2010A 2011A 2012F 2013F 2014FRevenue 1,046.9 1,092.1 1,204.2 1,305.7 1,325.9 EBITDA 181.7 161.7 178.3 204.6 204.3 Recurring Net Profit 113.4 91.4 100.5 119.4 121.1 Recurring Basic EPS (cents) 35.5 28.6 31.4 37.4 37.9 EPS growth (%) (5.2) (19.4) 10.0 18.8 1.4 DPS (cents) 8.0 4.0 6.0 7.0 8.0


Net Gearing (%) 19.5 21.6 11.0 (0.3) (10.9) ROE (%) 25.6 18.3 17.3 17.6 15.7 ROA (%) 14.6 11.2 11.2 12.1 11.7 Consensus Net Profit (MYR m) - - 103.2 118.8 133.0 Source: Maybank KE

Buy (unchanged) Share price: MYR3.19 Target price: MYR3.75 (unchanged) Lee Yen Ling [email protected] (03) 2297 8691

Stock Information Description: Balanced latex and nitrile glove OEM Ticker: KRI MK Shares Issued (m): 319.7 Market Cap (MYR m): 1,020.0 3-mth Avg Daily Turnover (USD m): 0.27 KLCI: 1,618.55 Free float (%): 35.8

Major Shareholders: % Kossan Holdings 50.9 KWAP 7.6 EPF 5.0 Historical Chart

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KRI MK Equity

Performance: 52-week High/Low MYR3.67/MYR2.97 1-mth 3-mth 6-mth 1-yr YTD Absolute (%) 2.9 (3.0) 2.2 4.6 (1.8) Relative (%) 5.7 (1.0) (2.3) (8.3) (7.6)



PP16832/01/2013 (031128)

Malaysia

Media Prima Lukewarm 3Q12

A nonchalant quarter. Although Media Prima’s (MPR) 3Q12 earnings were within expectations, we are wary that 3Q12 viewership share was down 3 ppts YoY and 1 ppt QoQ. This will likely translate into slower net TV adex growth going forward, which we have imputed into our earnings forecasts. We maintain our TP of MYR2.47 despite rolling forward valuations and keeping our earnings forecasts unchanged. The stock is fairly valued now trading at FY13 PER of 12x.

Within expectations. 3Q12 net profit of MYR59.1m (+11% YoY,+4% QoQ) brought 9M12 net profit to MYR136.7m (+3% YoY) or 65% of our full year estimate. Historically, 9M net profit comprises 65-70% of full year net profit. 9M12 revenue of MYR1.2b (+2% YoY) was also within expectations at 74% of our 2012 estimate. A second single tier DPS of 3sen (+0% YoY) was declared, also within expectations.

EBITDA flattish YoY and QoQ. 3Q12 net profit was 11% higher YoY due to maiden earnings by New Media coupled with lower corporate expenses. That said, TV, radio and print recorded lower earnings YoY on higher direct costs (content and overheads). 3Q12 net profit was 4% higher QoQ only due to higher contributions from its associate, Malaysian Newsprint Industries.

Near-term outlook not too encouraging. 3Q12 viewership share was down 3 ppts YoY and 1 ppt QoQ to 45%. This explains why net TV adex growth YoY slowed from 8% in 2Q12 to 6% in 3Q12 (Chart 1). MPR is still cautious on its near-term outlook. We leave our earnings estimates unchanged which have considered slower net TV adex growth ahead. With its viewership share weakening, we do not believe that MPR’s net TV adex growth will reaccelerate going forward.

Maintain HOLD. We roll forward our valuation basis from 13.5x FY12 PER to a lower 12x FY13 PER due to still slow net TV adex growth. This derives an unchanged MYR2.47 TP. Now trading at 11.8x FY13 PER, we believe that valuations are fair given that its near-term outlook, especially viewership share and net TV adex growth would weaken. For now, net dividend yields of >4.5% should placate investors.

Media Prima – Summary Earnings Table Source: Maybank KEFYE (MYR m) 2010A 2011A 2012F 2013F 2014FRevenue 1,546.6 1,622.1 1,657.3 1,707.7 1,778.1 EBITDA 392.2 404.1 417.2 450.2 469.7 Recurring Net Profit 185.3 205.4 211.6 237.9 252.0 Recurring Basic EPS (cents) 17.4 18.3 18.3 20.5 21.7 EPS growth (%) 101.8 5.5 0.0 12.2 5.8 DPS (cents) 10.0 16.0 11.0 12.3 13.1


Net Gearing (%) 18.3 3.5 (2.9) (9.9) (16.6) ROE (%) 17.0 15.9 15.0 15.7 15.6 ROA (%) 8.6 8.8 8.8 10.1 10.5 Consensus Net Profit (MYR m) N/A N/A 199.9 217.7 240.4

Hold (unchanged) Share price: MYR2.44 Target price: MYR2.47 (unchanged) Yin Shao Yang [email protected] (03) 2297 8916 Stock Information Description: Media conglomerate spanning free-to-air TV, print, radio and outdoor operations. Ticker: MPR MK Shares Issued (m): 1,079.4 Market Cap (MYR m): 2,633.8 3-mth Avg Daily Turnover (US$ m): 0.53 KLCI: 1,618.55 Free float (%): 65.0 Major Shareholders: % EPF 18.4 Amanah Raya Bhd 11.4 KWAP 5.2 Harris Associates 5.0

Historical Chart

0.00.51.01.52.02.53.03.5


MPR MK Equity

Performance: 52-week High/Low MYR2.78/MYR2.1 1-mth 3-mth 6-mth 1-yr YTD Absolute (%) 6.1 (0.4) 5.6 (0.9) (6.2) Relative (%) 8.9 1.6 1.1 (13.8) (11.9)



PP16832/01/2013 (031128)

Malaysia

AmanahRaya REIT Flattish Sequential Growth

Maintain HOLD. ARREIT’s 9M12 results were within our expectations but slightly below consensus estimates. We remain cautious on the sustainability of its rental income as the Silver Bird non-payment issue remains unresolved, and the lease agreement for Wisma Amanahraya will expire in Jul 2013. New acquisitions will be crucial to sustain its earnings growth. Our DCF-based TP is raised to MYR0.95 as we roll over our valuation base to 2014. Results in line. 3Q12 net profit of MYR10.8m (+4% YoY) took 9M12 earnings to MYR30.7m (-5% YoY), accounting for 71% of our and 70% of consensus full-year estimates. The YoY decline in 9M earnings was due to: 1) the loss of rental income at Wisma UEP owing to the non-renewal of Sime UEP Properties Bhd’s tenancy upon its expiry in Jul 2011, 2) higher property expenses at Wisma UEP and Selayang Mall as well as provisions for landslip management at Wisma ARB. No change to dividend payments. 3Q12 net profit grew by 5.6% QoQ thanks to positive rental reversions at existing assets. ARREIT has proposed a 1.8sen DPU for 3Q (YTD: 5.4sen, +1.1% YoY); in line. ARREIT intends to maintain the same level of DPU as 2011. It may use its cash reserve (MYR34m or 5.9sen as at Sep 2012) to cover any shortfalls arising from a decline in rental income. Rising rental risk. The issue of non-payment of rent by Silver Bird Factory (11% of gross rental income) remains unresolved; the rental shortfall is currently covered by its 24-month security deposit. Also, CIMBIB’s lease of Wisma Amanah Raya (WAR) is expiring in Jul 2013 (extended from Jan 2013), when CIMBIB will move to its new office tower in KL Sentral. ARREIT is actively looking for new tenants for the building and may dispose WAR should it receive an attractive offer. Eyeing new assets. New acquisitions will be crucial to sustain dividend payments/earnings growth. ARREIT is eyeing an industrial property worth MYR40-60m with a long lease agreement and rental guarantee, we understand. It is also scouting for office buildings in the Klang Valley. As at Sep 2012, ARREIT’s gearing ratio was unchanged at 0.35x – implying new debt capacity of MYR310m at the 50% statutory limit. AmanahRaya REIT – Summary Earnings Table Source: Maybank KEFYE Dec (MYR m) 2010A 2011A 2012F 2013F 2014FRevenue 59.5 65.3 64.7 65.7 67.2 NPI 56.5 59.5 60.0 60.7 62.0 Recurring Net Profit 41.4 42.5 43.0 43.7 45.0 Recurring Basic EPU (cents) 7.2 7.4 7.5 7.6 7.9 EPS growth (%) 1.0 2.7 1.1 1.7 2.9 DPU (cents) 7.3 7.2 7.1 7.2 7.5

PER 12.9 12.5 12.4 12.2 11.8 EV/EBITDA (x) 15.8 15.1 14.9 14.8 0.0 Div Yield (%) 7.9 7.8 7.7 7.8 8.0 P/NAV(x) 1.0 0.9 0.9 0.9 0.9

Gearing (%) 36.4 34.9 34.9 34.8 34.7 ROE (%) 7.4 7.1 7.1 7.2 7.4 ROA (%) 4.1 4.1 4.1 4.2 4.3 Consensus Net Profit (MYR m) - - 44.0 45.2 46.6

Hold (unchanged) Share price: MYR0.93 Target price: MYR0.95 (from MYR0.91) Wong Wei Sum, CFA [email protected] (03) 2297 8679

Stock Information Description: REIT with asset portfolio in retail, office and industrial. As at Sep 2012, the trust has MYR948.4m worth of Investment properties. Ticker: AARET MK Shares Issued (m): 573.2 Market Cap (MYR m): 533.1 3-mth Avg Daily Turnover (USD m): 0.07 KLCI: 1,618.55 Free float (%): 34.1 Major Shareholders: % Kumpulan Wang Bersama 60.2 RBS 6.7 Perbadanan Kemajuan Negeri 5.7 Key Indicators

ROE – annualised (%) 7.1 Net cash (MYR m): (329.4) NTA/shr (MYR): 1.05

Historical Chart

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Performance: 52-week High/Low MYR0.975/MYR0.885 1-mth 3-mth 6-mth 1-yr YTD Absolute (%) (0.5) (4.6) 0.5 5.7 2.8 Relative (%) 2.2 (2.6) (4.0) (7.3) (3.0)



PP16832/01/2013 (031128)

Malaysia

WCT 2012 Targets Almost Met

BUY maintained. We maintain our earnings forecasts, target price and stock call following yesterday’s analyst briefing on WCT’s 3Q12 results and corporate update. A potential revaluation surplus for Paradigm mall in 4Q12 could see FY12 earnings surpass our forecast. Meanwhile, the property development business has locked in sales of MYR630m and the construction business has secured MYR1.9b in new jobs YTD, providing stronger earnings visibility into FY13.

3Q12 results: Questions answered. (i) The weak construction EBIT margin of 6.7% (-9ppts YoY, -4.9ppts QoQ) was due to MYR13m in unrealised forex losses for its construction project in Qatar due to the weaker Ringgit; excluding the forex loss, 3Q12 construction EBIT margins were 11.5%. (ii) The strong property development EBIT of MYR42m (+132% YoY, +52% QoQ) is sustainable following record sales in both FY11 and FY12 YTD. (iii) The strong jump in property investment EBIT to MYR10m (+2x YoY, +7x QoQ) was due to maiden contributions from Paradigm, and rental reviews at its AEON BBT investment mall (which includes retrospective adjustments).

Property development: 2012 target almost reached. WCT has locked in sales of about MYR630m YTD (MYR444m as at Sep 2012), 50% of which is from BBT and 50% from 1-Medini, we estimate. This is just shy of its internal sales target for the year of MYR700m. With launches worth MYR1.4b lined up into mid-2013, actual 2012 sales are likely to surpass its internal target. Meanwhile, the internal sales target for 2013 has yet to be firmed up, but should exceed the 2012 target. Unbilled sales stood at MYR518m as at end-Sep 2012.

Construction: 2012 target almost hit. WCT’s outstanding order book stood at MYR3.8b (46% overseas, in Qatar and Oman) as at end-Sep 2012. Of this, new jobs secured this year make up MYR1.9b (our job win forecast: MYR2b). Its competitive tender book presently is about MYR3.5b comprising largely domestic building works. Tenders most likely to be awarded imminently are: (i) a ~MYR300m government building job in Putrajaya, and (ii) a MYR700m hospital job in Sabah. If secured this year, these would lift WCT’s 2012 job wins to MYR2.9b.

WCT – Summary Earnings Table FYE Dec (MYR m) 2010A 2011A 2012F 2013F 2014FRevenue 1,708.5 1,538.6 1,561.5 1,806.0 1,873.6 EBITDA 280.1 242.7 261.4 345.3 373.1 Recurring Net Profit 124.7 162.4 171.6 218.2 226.3 FD EPS (Sen) 17.8 19.6 20.1 24.1 24.9 FD EPS growth (%) (5.0) 10.3 2.5 20.4 3.0 DPS (Sen) – net 7.5 7.5 7.5 7.5 7.5 PER 15.3 13.9 13.6 11.3 10.9 EV/EBITDA (x) 13.6 15.6 14.5 11.0 10.2 Div Yield (%) 2.8 2.8 2.8 2.8 2.8 P/BV(x) 1.7 1.5 1.4 1.3 1.1 Net Gearing (x) 36.6 39.9 24.8 19.6 12.5 ROE (%) 12.0 11.0 10.5 12.2 11.6 Book value (MYR) 1.60 1.83 1.98 2.17 2.37 Consensus Net Profit (MYR m) n.a n.a 181.1 222.4 250.5 Source: Maybank KE

Buy (unchanged) Share price: MYR2.72 Target price: MYR3.30 (unchanged) Wong Chew Hann [email protected] (03) 2297 8686

Stock Information Description: Construction group with interests in property development. Ticker: WCT MK Shares Issued (m): 823.3 Market Cap (MYR m): 2,239.3 3-mth Avg Daily Turnover (US$ m): 1.50 KLCI: 1,618.55 Free float (%): 53.0 Major Shareholders: % WCT Capital Sdn Bhd 19.6 EPF 12.9 LTH 6.5 KWAP 6.1 OCBC 5.0

Historical Chart

0.00.51.01.52.02.53.03.54.0


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Performance: 52-week High/Low MYR2.8/MYR2.06 1-mth 3-mth 6-mth 1-yr YTD Absolute (%) 0.7 1.5 18.8 25.9 14.3 Relative (%) 3.5 3.5 14.2 13.0 8.5


17 October 2011

PP16832/01/2012 (029059)


Thailand

Page 1 of 2

Siam Makro (MAKRO) Notes from the meeting

Raising price target to THB485, BUY: Slightly higher earnings stream due to faster store addition this year resulted in our DCF value rising to THB485 up from THB478. Should the share price of MAKRO drop post the analyst meeting we recommend investors accumulate the stock. Expansion in the domestic market continues at a good pace, SSSG remains solidly supported by strong merchandising management and tight lid on cost. Vietnam is a growth opportunity in the future. Expansion continues: Finally MAKRO opened five stores this year instead of four bringing total branch network. The 57 store in Bangpli is a “duplication” store and yet no own-store cannibalization proof that the cash/carry model still works. The management advises that they have permit and land for three stores next year, all in the provinces, and one location (in Phuket) for a larger version of the Siam Frozen model – 1000m². MAKRO does not provide target store opening but updates analysts on the number of stores to be opened. Having three locations in hand at this point in time is early for the company, and this raise the chance of more store opening in 2013. We assume three stores in our forecast. Capex guidance is for THB4bn, including the investment for Makro’s IT processing platform of THB300m. Hello Vietnam! MAKRO is definitely looking at the Vietnamese market. The incorporation of Vina Siam Food Co Ltd (VinaSiam) in Oct-12 is to facilitate the market study. Querried on why not enter Vietnam via the Makro trade center and the CFO replied that to get the permit for that, one has to have the land already and the price of land in Vietnam is very steep – equivalent to the price of the Silom Area in Bangkok. The management deems that too high a cost. However, the early conclusion is that Makro’s cash/carry format is perfect for the Vietnam retailing market and demographics, 90mn or so population, average age around 30 and willing to spend. We maintain the view that Vietnam can be another source of growth for MAKRO - and that we should not underestimate the execution capability of the management even though they appear more conservative the managements’ of other Thai listed retailing firms.

Siam Makro – Summary Earnings Table

YE Dec, in Bt mn 2010A 2011A 2012F 2013F 2014F Revenue 88,651 99,628 111,277 123,224 136,159 EBITDA 3,892 5,161 5,625 6,407 7,172

Recurring Net Profit 1,881 2,604 3,549 4,241 4,816 Recurring Basic EPS 7.8 10.9 14.8 17.7 20.1 EPS growth (%) 23.2 38.5 36.2 19.5 13.6

DPS 7.0 10.5 13.3 15.9 18.1

PER 56.1 40.5 29.8 24.9 21.9

EV/EBITDA (x) 9.8 14.2 18.4 16.0 14.1 Div Yield (%) 1.6 2.4 3.0 3.6 4.1 P/BV(x) 11.5 10.9 9.9 9.0 8.3

Net Gearing (%) net cash net cash net cash net cash net cash ROE (%) 18 21 30 35 38 ROA (%) 7 8 10 11 12 Consensus Net Profit (Bt m)

3,405 4,214 4,939

Source: Company, MBKET Calculations

Buy (unchanged)

Share price: Bt440 Target price: Bt485 (up from Bt478)

Maria Lapiz [email protected] (662) 257 0250

Stock Information

Description: Operates cash/carry stores with a nationwide footprint. In 2011 it has 52 stores and by end 2012 this will be 57. It brands the store under Makro Trade Centers, Siam Food Service, Siam Frozen. Its expansion can all be funded by internal cashflow. In 15 Oct 2012, MAKRO received a permit to operate a retailing, import/export business in Vietnam. Listed on the SET in Aug 1994. Ticker: MAKRO TB Shares Issued (m): 240 Market Cap (US$ m): 3,437.60 3-mth Avg Daily Turnover (US$ m): 3.95 SET Index: 1279.51 Free float (%): 31 Major Shareholders: % SHV Group 64.35 CPF Investment Ltd 1.01 Aberdeen Asset Mgt 5.0 AIA 1.7

Key Indicators

ROE 2013E – (%) 35 Net cash (Bt m): 6,770 NTA/shr (Bt): 48.86 Interest cover (x): 249.4

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Relative (%) -0.3 17.2 53.3 47.5 Closing price: 22 Nov 2012

23 November 2012

Regional Daily

RESEARCH OFFICES

REGIONAL P K BASU Regional Head, Research & Economics (65) 6432 1821 [email protected]

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

ONG Seng Yeow Regional Products & Planning (852) 2268 0644 [email protected]

ECONOMICS SuhaimiILIAS Chief Economist Singapore | Malaysia (603) 2297 8682 [email protected]

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

MALAYSIA WONG Chew Hann, CAHead of Research (603) 2297 8686 [email protected] Strategy Construction & Infrastructure Desmond CH’NG, ACA (603) 2297 8680 [email protected] Banking - Regional LIAW Thong Jung (603) 2297 8688 [email protected] Oil & Gas Automotive Shipping ONGChee Ting, CA (603) 2297 8678 [email protected] Plantations MohshinAZIZ (603) 2297 8692 [email protected] Aviation Petrochem Power YIN Shao Yang, CPA (603) 2297 8916 [email protected] Gaming – Regional Media Power TAN CHI WEI, CFA (603) 2297 8690 [email protected] Construction & Infrastructure Power WONG Wei Sum, CFA (603) 2297 8679 [email protected] Property & REITs LEE Yen Ling (603) 2297 8691 [email protected] Building Materials Manufacturing Technology

LEE Cheng HooiHead of Retail [email protected] Technicals

HONG KONG / CHINA Edward FUNGHead of Research (852) 2268 0632 [email protected] Construction Ivan CHEUNG, CFA (852) 2268 0634 [email protected] Property Industrial Ivan LI, CFA (852) 2268 0641 [email protected] Banking & Finance Jacqueline KO, CFA (852) 2268 0633 [email protected] Consumer Andy POON (852) 2268 0645 [email protected] Telecom & equipment Alex YEUNG (852) 2268 0636 [email protected] Industrial WarrenLAU (852) 2268 [email protected] Technology - Regional Karen Kwan (852) 2268 0640 [email protected] China Property

INDIA JigarSHAHHead of Research (91) 22 6623 2601 [email protected] Oil & Gas Automobile Cement AnubhavGUPTA (91) 22 6623 2605 [email protected] Metal & Mining Capital goods Property Ganesh RAM (91) 226623 2607 [email protected] Telecom Contractor

SINGAPORE Gregory YAPHead of Research (65) 6432 1450 [email protected] Technology & Manufacturing Telcos - Regional Wilson LIEW (65) 6432 1454 [email protected] Hotel & Resort Property & Construction James KOH (65) 6432 1431 [email protected] Logistics Resources Consumer Small &Mid Caps YEAK Chee Keong, CFA (65) 6433 5730 [email protected] Healthcare Offshore & Marine Alison FOK (65) 6433 5745 [email protected] Services S-chips Bernard CHIN (65) 6433 5726 [email protected] Transport (Land, Shipping & Aviation) ONGKian Lin (65) 6432 1470 [email protected] REITs / Property Wei Bin (65) 6432 1455 [email protected] S-chips Small &Mid Caps

INDONESIA Katarina SETIAWANHead of Research (62) 21 2557 1125 [email protected] Consumer Strategy Telcos Lucky ARIESANDI,CFA (62) 21 2557 1127 [email protected] Base metals Coal Oil & Gas RahmiMARINA (62) 21 2557 1128 [email protected] Banking Multifinance PanduANUGRAH (62) 21 2557 1137 [email protected] Auto Heavy equipment Plantation Toll road Adi N. WICAKSONO (62) 21 2557 1130 [email protected] Generalist Anthony YUNUS (62) 21 2557 1134 [email protected] Cement Infrastructure Property ArwaniPRANADJAYA (62) 21 2557 1129 [email protected] Technicals

PHILIPPINES Luz LORENZOHead 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 Kenneth NERECINA (63) 2 849 8839 [email protected] Conglomerates Property Ports/ Logistics Katherine TAN (63) 2 849 8843 [email protected] Banks Construction Ramon ADVIENTO (63) 2 849 8842 [email protected] Mining

THAILAND SukitUDOMSIRIKULHead of Research (66) 2658 6300 ext 5090 [email protected]

Maria LAPIZHead of Institutional Research Dir (66) 2257 0250 | (66) 2658 6300 ext 1399 [email protected] Consumer/ Big Caps

Andrew STOTZStrategist (66) 2658 6300 ext 5091 [email protected]

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

SuttatipPEERASUB (66) 2658 6300 ext 1430 [email protected] Media Commerce SutthichaiKUMWORACHAI (66) 2658 6300 ext 1400 [email protected] Energy Petrochem TermpornTANTIVIVAT (66) 2658 6300 ext 1520 [email protected] Property WoraphonWIROONSRI (66) 2658 6300 ext 1560 [email protected] Banking & Finance JaroonpanWATTANAWONG (66) 2658 6300 ext 1404 [email protected] Transportation Small cap. Chatchai JINDARAT (66) 2658 6300 ext 1401 [email protected] Electronics PongratRATANATAVANANANDA (66) 2658 6300 ext 1398 [email protected] Services/ Small Caps

VIETNAM Michael KOKALARI,CFA Head of Research (84) 838 38 66 47 [email protected] Strategy Nguyen ThiNganTuyen (84) 844 55 58 88 x 8081 [email protected] Food and Beverage Oil and Gas Ngo Bich Van (84) 844 55 58 88 x 8084 [email protected] Banking Trinh Thi Ngoc Diep (84) 844 55 58 88 x 8242 [email protected] Technology Utilities Construction Dang Thi Kim Thoa (84) 844 55 58 88 x 8083 [email protected] Consumer Nguyen TrungHoa +84 844 55 58 88 x 8088 [email protected] Steel Sugar Resources


23 November 2012

Regional Daily

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 security’s 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 jurisdiction’s 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. This report is prepared for the use of MKE’s clients and may not be reproduced, altered in any way, transmitted to, copied or distributed to any other party in whole or in part in any form or manner without the prior express written consent of MKE and MKE and its Representatives accepts no liability whatsoever for the actions of third parties in this respect. 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.

23 November 2012

Regional Daily

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:MaybankATRKES (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 JSC (License Number: 71/UBCK-GP) is licensed under the StateSecuritiesCommission 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.

Disclosure of Interest Malaysia: MKE and its Representatives may from time to time have positions or be materially interested in the securities referred to herein and may further act as market maker or may have assumed an underwriting commitment or deal with such securities and may also perform or seek to perform investment banking services, advisory and other services for or relating to those companies. Singapore: As of23 November 2012, Maybank KERPL and the covering analyst do not have any interest in any companies recommended in this research report. Thailand: MBKET may have a business relationship with or may possibly be an issuer of derivative warrants on the securities /companies mentioned in the research report. Therefore, Investors should exercise their own judgment before making any investment decisions. MBKET, its associates, directors, connected parties and/or employees may from time to time have interests and/or underwriting commitments in the securities mentioned in this report. Hong Kong: KESHK may have financial interests in relation to an issuer or a new listing applicant referred to as defined by the requirements under Paragraph 16.5(a) of the Hong Kong Code of Conduct for Persons Licensed by or Registered with the Securities and Futures Commission. As of23 November 2012, KESHK and the authoring analyst do not have any interest in any companies recommended in this research report. 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 coveredin this report.

OTHERS Analyst Certification of Independence The views expressed in this research report accurately reflect the analyst’s personal views about any and all of the subject securities or issuers; and no part of the research analyst’s 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. 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.

Some common terms abbreviated in this report (where they appear): Adex = Advertising Expenditure FCF = Free Cashflow PE = Price Earnings BV = Book Value FV = Fair Value PEG = PE Ratio To Growth CAGR = Compounded Annual Growth Rate FY = Financial Year PER = PE Ratio Capex = Capital Expenditure FYE = Financial Year End QoQ = Quarter-On-Quarter CY = Calendar Year MoM = Month-On-Month ROA = Return On Asset DCF = Discounted Cashflow NAV = Net Asset Value ROE = Return On Equity DPS = Dividend Per Share

NTA = Net Tangible Asset ROSF = Return On Shareholders’ Funds EBIT = Earnings Before Interest And Tax P = Price WACC = Weighted Average Cost Of Capital EBITDA = EBIT, Depreciation And Amortisation P.A. = Per Annum YoY = Year-On-Year EPS = Earnings Per Share PAT = Profit After Tax YTD = Year-To-Date EV = Enterprise Value PBT = Profit Before Tax

23 November 2012

Regional Daily

Malaysia

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

Singapore Maybank Kim EngSecurities Pte Ltd Maybank Kim EngResearch 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. Dunstan’s 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, DataranMaybank, No.1, JalanMaarof 59000 Kuala Lumpur Tel: (603) 2297 8888 Fax: (603) 2282 5136

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

Indonesia PT 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 In association with Maybank Kim Eng Securities JSC 1st Floor, 255 Tran Hung Dao St. District 1 Ho Chi Minh City, Vietnam Tel : (84) 844 555 888 Fax : (84) 838 38 66 39

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 Eddie LAU [email protected] Tel: (852) 2268 0800 US Toll Free: 1 866 598 2267

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