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Chapter 1

The business cycle is the periodic but irregular up-and-down movements in

economic activity, measured by fluctuations in real GDP and other macroeconomic

variables.

What are economic indicators and why are they important?

An economic indicator is simply any economic statistic, such as the

unemployment rate, GDP, or the inflation rate, which indicate how well the economy

is doing and how well the economy is going to do in the future.

To understand economic indicators, we must understand the ways in which

economic indicators differ. There are three major attributes each economic indicator

has:

1. Relation to the Business Cycle / Economy

Economic Indicators can have one of three different relationships to the

economy:

1.1 Procyclic: A procyclic (or procyclical) economic indicator is one that

moves in the same direction as the economy. So if the economy is doing well, this

number is usually increasing, whereas if we're in a recession this indicator is

decreasing. The Gross Domestic Product (GDP) is an example of a procyclic

economic indicator.

1.2 Countercyclic: A countercyclic (or countercyclical) economic indicator is

one that moves in the opposite direction as the economy. The unemployment rate gets

larger as the economy gets worse so it is a countercyclic economic indicator.

1.3 Acyclic: An acyclic economic indicator is one that has no relation to the

health of the economy and is generally of little use. The number of home runs the

Montreal Expos hit in a year generally has no relationship to the health of the

economy, so we could say it is an acyclic economic indicator.

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2.Frequency of the Data

In most countries GDP figures are released quarterly (every three months)

while the unemployment rate is released monthly. Some economic indicators, such as

the Dow Jones Index, are available immediately and change every minute.

3. Timing

Economic Indicators can be leading, lagging, or coincident which indicates the

timing of their changes relative to how the economy as a whole changes.

3.1 Leading: Leading economic indicators are indicators which change beforethe economy changes. Stock market returns are a leading indicator, as the stock

market usually begins to decline before the economy declines and they improve

before the economy begins to pull out of a recession. Leading economic indicators are

the most important type for investors as they help predict what the economy will be

like in the future.

3.2 Lagged: A lagged economic indicator is one that does not change direction

until a few quarters after the economy does. The unemployment rate is a lagged

economic indicator as unemployment tends to increase for 2 or 3 quarters after the

economy starts to improve.

3.3 Coincident: A coincident economic indicator is one that simply moves at

the same time the economy does. The Gross Domestic Product is a coincident

indicator.

Main indicators:

1. THAI BAHT EXCHANGE RATE LIVE CHART (USDTHB)

Thai Baht Exchange Rate Live Chart (USDTHB), quotes, historical data,

forecast and news. The exchange rate between two currencies specifies how much one

currency is worth in terms of the other. The spot exchange rate refers to the current

exchange rate. The forward exchange rate refers to an exchange rate that is quoted andtraded today but for delivery and payment on a specific future date. The foreign

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exchange market is one of the largest markets in the world with nearly 4 trillion USD

worth of currency changing hands every day.

2. THAILAND INTEREST RATE

Thailand Interest Rate chart, historical data, forecast and news. In Thailand,

interest rate decisions are taken by The Bank of Thailands Monetary Policy

Committee. The main interest rate is the 1-day repurchase rate.The term interest rate

refers to the yearly price charged by a lender to a borrower in order for the borrower

to obtain a loan. This is usually expressed as a percentage of the total amount loaned.

The relation between the interest rate and the time to maturity of the debt for a given

borrower in a given currency is known as yield curve.

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3. THAILAND STOCKMARKET CHART (STOCK EXCH OF THAI)

Thailand Stock Market Chart (STOCK EXCH OF THAI) historical data,

forecast and news. The combined size of stock markets around the world was

estimated at about $36.6 trillion USD at the beginning of October 2008. The New

York Stock Exchange (NYSE) is the largest stock exchange in the world by dollar

volume and has 2,764 listed securities.

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4. THAILAND INFLATION RATE

Thailand Inflation Rate chart, historical data, forecast and news. Inflation rate

refers to a general rise in prices measured against a standard level of purchasing

power. The most well known measures of Inflation are the CPI which measures

consumer prices, and the GDP deflator, which measures inflation in the whole of the

domestic economy.

5. THAILAND UNEMPLOYMENT RATE

Thailand Unemployment Rate chart, historical data, forecast and news.

Unemployment rate is defined as the level of unemployment divided by the labour

force. The labour force is defined as the number of people employed plus the number

unemployed but seeking work. The nonlabour force includes those who are not

looking for work, those who are institutionalised and those serving in the military.

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Growth Indicators:

1. THAILAND GDP GROWTH RATE

Thailand GDP Growth Rate chart, historical data, forecast and news. Thailand

is the second largest national economy in Southeast Asia. In 2007, Thailands Gross

Domestic Product (GDP) measured on purchasing power parity basis was estimated at

$520 billion, according to the International Monetary Fund. The country is currently

classified as Lower Middle Income economy by the World Bank, with $3,732 GDP

per capita.

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2. THAILAND GROSS DOMESTIC PRODUCT (GDP)

Thailand Gross Domestic Product (GDP) chart, historical data, forecast and

news. Thailand is the second largest national economy in Southeast Asia. In 2007,

Thailands Gross Domestic Product (GDP) measured on purchasing power paritybasis was estimated at $520 billion, according to the International Monetary Fund.

The country is currently classified as Lower Middle Income economy by the World

Bank, with $3,732 GDP per capita.

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3. THAILAND GDP PERCAPITA

Thailand GDP per capita chart, historical data, forecast and news. Thailand is

the second largest national economy in Southeast Asia. In 2007, Thailands Gross

Domestic Product (GDP) measured on purchasing power parity basis was estimated at

$520 billion, according to the International Monetary Fund. The country is currently

classified as Lower Middle Income economy by the World Bank, with $3,732 GDP

per capita.

4. THAILAND INDUSTRIAL PRODUCTION

Thailand Industrial Production chart, historical data, forecast and news.

Thailand is the second largest national economy in Southeast Asia. In 2007,

Thailands Gross Domestic Product (GDP) measured on purchasing power parity

basis was estimated at $520 billion, according to the International Monetary Fund.


Bank, with $3,732 GDP per capita.

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5. THAILAND GOVERNMENT BUDGET

Thailand Government Budget chart, historical data, forecast and news.





Bank, with $3,732 GDP per capita. Government Budget is an itemized accounting of

the payments received by government (taxes and other fees) and the payments made

by government (purchases and transfer payments). A budget deficit occurs when an

government spends more money than it takes in. The opposite of a budget deficit is a

budget surplus.

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Trade Indicators:

1. THAILAND CURRENT ACCOUNT

Thailand Current Account chart, historical data, forecast and news. The

economy of Thailand is heavily export-dependent, with exports accounting for more

than two thirds of GDP. Thailand exports mainly: gypsum, rice, shrimps as well as

high-technology products like integrated circuits and parts, electrical appliances, and

vehicles. Machinery and parts, vehicles, electronic integrated circuits, chemicals,

crude oil and fuels, iron and steel are among Thailand's principal imports. Its main

trading partners are: European Union, United States, Japan and China. Current

Account is the sum of the balance of trade (exports minus imports of goods and

services), net factor income (such as interest and dividends) and net transfer payments

(such as foreign aid). The balance of trade is typically the most important part of the

current account.

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2. THAILAND BALANCEOF TRADE

Thailand Balance of Trade chart, historical data, forecast and news. The

economy of Thailand is heavily export-dependent, with exports accounting for more

than two thirds of GDP. Thailand exports mainly: gypsum, rice, shrimps as well as

high-technology products like integrated circuits and parts, electrical appliances, and

vehicles. Machinery and parts, vehicles, electronic integrated circuits, chemicals,

crude oil and fuels, iron and steel are among Thailand's principal imports. Its main

trading partners are: European Union, United States, Japan and China. Balance of

Trade is the difference between the monetary value of exports and imports in an

economy over a certain period of time. A positive balance of trade is known as a trade

surplus and consists of exporting more than is imported; a negative balance of trade is

known as a trade deficit or, informally, a trade gap.

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3. THAILAND EXPORTS

Thailand Exports chart, historical data, forecast and news. The economy of

Thailand is heavily export-dependent, with exports accounting for more than two

thirds of GDP. Thailand is the world's second largest exporter of gypsum, leading

exporter of rice and a major exporter of shrimp. High-technology products such as

integrated circuits and parts, electrical appliances, and vehicles are now leading

Thailand's strong growth in exports. Thailands main export partners are European

Union, United States, Japan and China.

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4. THAILAND IMPORTS

Thailand Imports chart, historical data, forecast and news. Machinery and

parts, vehicles, electronic integrated circuits, chemicals, crude oil and fuels, iron and

steel are among Thailand's principal imports. Its main import partners are: Japan,

China, European Union, United States and Malaysia.

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5. THAILAND CONSUMER CONFIDENCE

Thailand Consumer Confidence chart, historical data, forecast and news.





Bank, with $3,732 GDP per capita. Consumer confidence is a measure of the level of

optimism consumers have about the performance of the economy. Generally

consumer confidence is high when the unemployment rate is low and GDP growth is

high. Measures of average consumer confidence can be useful indicators of how much

consumers are likely to spend.

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In Conclusion:

Thailand in.

Recession

Most of us have an intuitive idea of what a recession entails - job losses, plant

closures and tough times for families. But what exactly is a recession? There are a few

similar, but not identical definitions. To learn what economists mean by a recession

What Causes Recessions?

There are a number of theories on what causes recessions. Some observers

believe each recession has a unique cause, whereas others believe recessions generally

have a single cause, such as bad investments (malinvestment) by firms. It is

occasionally heard that recessions and depressions, such as the Great Depression, arecaused by stock market crashes. Others believe that globalization has changed the the

nature of the business cycle.

The economy and the stock market are closely related. Many people examine

the stock market to find out how the economy is doing. It's long been known that if

the stock market is in a period of decline, the economy is sure to follow. However

there is little evidence that the stock market causes the economy to rise or fall. The

stock market does not directly affect the economy. It is simply a mirror of people's

generally correct beliefs about what is about to happen in the economy. The best way

to understand this is to realize that a stock market index the Dow Jones Industrial

Average (DJI) is simply a price. Because the value of index is a price, it only has two

determinants: supply and demand.

The report from Bureau of Trade and Economic Indices, Ministry of

Commerce, show that Thailand economy slowdown.

CountryInterest

Rate

Growth

Rate

Inflation

Rate

Jobless

Rate

Current

Account

Exchange

Rate

Thailand 1.50% -4.30% -0.10% 2.40% 2289 35.3800

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Medium-run Leading Index is composed of seven leading indicators in

January 2009 stood at 93.0 (2002=100) decreased 1.0 percent from previous month,

because three of seven indicators decreased, from largest to smallest were

construction areas permitted in Bangkok metropolis, USA Leading Index, and growth

rate of broad money. There are four indicators increased were value of authorized

capital of newly registered businesses, growth rate of Industrial Material Price Index,

sign percentage inverted of Japan Leading Index, and sign differential inverted of

average inter bank overnight lending rates. Nevertheless the sixmonth smoothed

annualized growth rate decreasing by 11.6 percent.

Short Leading Index is composed of six leading indicators in January 2009

stood at 110.0 (2002=100), increased 0.8 percent from previous month, because three

of six indicators increased, from largest to smallest were value of authorized capital of

newly registered businesses, number of foreign tourist and narrow money. There are

three indicators decreased were stock exchange of Thailand index, real export value

(in Baht term) and construction areas permitted in Bangkok metropolis. The six

month smoothed annualized growth rate decreasing by

6.3 percent.

Coincident Index is composed of nine coincident indicators in January 2009

stood at 105.8 (2002=100), decreased 3.2 percent from previous month, because

seven of nine indicators decreased from largest to smallest were production of beer,

real import value (in Baht term), domestic sale of passenger & commercial cars,

import duties, business taxes & value added taxes & specific business taxes,

production of motorcycles, and production of commercial vehicle. There is an

indicator increased was production of cement. The sixmonth smoothed annualized

growth rate decreasing by 10.1 percent.

Remarks:

1. Medium-run index have occurred before business cycle activity economy at

9 11 months.

2. Short leading index have occurred before business cycle activity economy

at 3 5 months.

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3. The six-month smoothed annualized growth rate is obtained by dividing the

current months index number by its average for the preceding twelve months and

expressing the result as an annual rate.

4. All indicators have to be seasonal adjustment by X-12 and the indicators in

term of value were real value indicators, which were adjusted by consumer price

index.

Forecast:

Thailands political scene will remain unstable in the forecast period owing to

the persistent power struggle between, on one side, the established

bureaucratic and royalist elites and the urban middle class, and on the other,

the forces aligned with Thaksin Shinawatra, the former prime minister who

was ousted in the September 2006 military coup.

The likelihood of further protests in the capital, Bangkok, is high. Although

the Peoples Alliance for Democracy (PAD, a right-wing alliance of royalists

and business leaders) has ended its demonstrations, a pro-Thaksin group, the

United Front for Democracy Against Dictatorship, has begun protests in an

attempt to force the resignation of the new prime minister, Abhisit Vejjajiva.

Thailands relations with the US and the EU will remain troubled as a result of

the Thai governments unwillingness to criticise the ruling military junta in

neighbouring Myanmar. Commercial disputes, particularly regarding the

protection of intellectual property rights, will add to tensions with the US.

The Democrat Party-led government has responded to the global economic

downturn with a stimulus package, but there are concerns that the measures

will prove insufficient to counter a host of negative factors that are

undermining growth prospects. Most of the measures announced by the

government have focused on transferring cash to households through grants

and tax cuts, but consumers may opt to save the additional income rather than

spend it. There are also suspicions that some of the governments policies are

politically motivated.

The economy will contract sharply in 2009, as the global economic slowdown

will have a negative impact on exports. Ongoing concerns about political

stability will also continue to prevent a major improvement in consumer and

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investor sentiment in the early part of the forecast period. However, as the

global economy picks up, GDP growth in Thailand will accelerate to an

average annual rate of 3.6% in 2011-13.

Global prices for crude oil and non-oil commodities will fall from the highs

that they reached in 2008, contributing to a more benign outlook for inflation

in the forecast period.

The current-account balance will return to surplus in the forecast period.

Export growth will be particularly weak in 2009-10, owing to the economic

slowdown in important export destinations, such as the US.

Key indicators 2008 2009 2010 2011 2012 2013

Real GDP growth (%) 2.6 -4.4 1.8 2.8 3.9 4.2

Consumer price inflation (av; %) 5.5 -1.2 2.7 1.9 2.4 2.4

Budget balance (% of GDP) -1.2 -4.7 -4.4 -2.9 -2.5 -2.4

Current-account balance (% of GDP) -0.1 1.4 1.1 0.8 1.1 2.0

Commercial banks' prime rate (av; %) 7.0 6.6 6.8 7.0 7.0 7.0

Exchange rate Bt: US$ (av) 33.3 36.5 37.1 37.4 37.0 36.7

Exchange rate Bt: 100 (av) 32.3 39.4 40.3 41.1 41.1 40.8

The Thai economy has in all probability already entered a technical recession,

although Q1/2009 data have not been released.

The external outlook is grim with exports continuing to tumble at the start of

the year, falling by 25.3% y-o-y in January 2009.

Manufacturing production has fallen in tandem with exports, registering a

21.3% contraction in the same month and the Bank of Thailand (BoT)'s

business sentiment index, coming in at a subdued 36.3 (where 50 delineates

expansion/contraction)

Although, the situation now is in recession already but it is not at the bottom

of the recession yet.

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Chapter 2

The sectors we decided to put our investment are energy and utilities,

telecommunication and banking. The reasons of selecting each stock are based on the

return, fundamental of company and financial structure. They will be explained more

in details as follows:

1. Energy and Utilities

Due to the poor economic situation around the world, the energy plays maybe

pressured by lower oil prices but it is the very important source for the production of

many industries. Therefore, when the economy turns to recovery, the energy stocks

will rise again which are vary toward the economic situation and its own prices. At

this moment, the foreign funds may still sell energy big caps on weak global demand

further hitting commodity prices, but the energy stocks offer good value especially

after the latest jump in oil prices. In this sector, we put our investment in PTT

Exploration and Production Public Company Limited (PTTEP) and Banpu Public

Company Limited (BANPU).

1.1 PTT Exploration and Production Public Company Limited (PTTEP)

Company Profile

The Company was incorporated on 20 June 1985 with the Petroleum Authority

of Thailand (now PTT Public Company Limited or PTT) as the shareholders of

99.99% in accordance with the Cabinets resolution of 16 April 1985 for the

Government to be able to hold petroleum concessions. And on 16 February 1988 the

Cabinet gave resolution for PTTEP to conduct its business without having to comply

with the orders, rules & regulations and the Cabinets resolutions that enforced

general State Enterprises with exemption only to the resolution concerning the

creating of the countrys debt of year 1985 and its amendment. This was for the

Company to conduct its business independently with effectiveness and efficiency and

be able to compete with other international oil companies. On 30 October 1992,

PTTEP became a public company and was first trade in the market on 10 June 1993.

There is change and significant development in 2008 PTTEP established 5

subsidiaries in international countries. PTTEP Bangladesh Limited (a subsidiary of

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PTTEP) has entered into farm-in agreement for Blocks 17 and 18, located offshore

Peoples Republic of Bangladesh.

PTTEP has swapped its 20% participation interest in the production sharing contract

(PSC) in block M3 and M4 with CNOOC Myanmar Limiteds A4 and C1. PTTEP

Australia Offshore Pty Ltd. together with Murphy Australia Oil Pty Ltd. (Operator) has

entered into in the concession block WA-423-P in Australia.PTTEP SM together with

Murphy Oil Corporation and INPEX Corporation has entered into the petroleum

exploration block Semai II. PTTEP AB has signed the Share Sale Agreement to

purchase 100% shareholders equity in Coogee Resources Limited.

Nature of Business

As of 31 December 2008 PTTEP conducts its core business in petroleum

exploration, development and production consisting of:

Exploration and Production Projects

Thailand Projects: 15 projects

Regional Projects: 16 projects

International Projects: 11 projects

Investment Projects

PTTEP Petroleum Development Support Base

PTTEP Gas Pipeline Investment Project

Energy Complex Investment Project

PTT ICT Solutions Project

PTTEPs policy is to manage PTTEP subsidiaries as One Company with the

clear direction of its subsidiaries following PTTEPs business direction and strategy

and being managed as one team by PTTEP executives. In addition, the PTTEP

management and internal controlsystems are also to be adopted and implemented in

all PTTEP subsidiaries in the same way that they are standardized at PTTEP.

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Ways to Make Profit (Strategic Direction)

Exploring for, developing, and producing petroleum from domestic and

international oil and gas fields, PTTEP strives to supplement value to business while

responding to government policy on energy supply procurement to foster national

energy security. Below are its three aspects of strategies and operating directions.

Investment

PTTEPs focus is on investment expansion for sustainable growth through

synergizing with other companies of PTT Group. The current push is for investment

expansion in western/southern corridor countries, including Myanmar, Bangladesh,

Cambodia, and Indonesia. In addition, its exploration focus is on countries with high

petroleum potential and those in which it is already operating so as to continuously

supplement value, including Algeria, Egypt, and Australia. As regards investment in

E&P projects relying on the use of unconventional technology, its first priority is on

using floating liquefied natural gas (FLNG) technology to develop stranded offshore

gas. Another area of focus is to develop natural gas fields in Iran and a push for

business expansion through mergers& acquisitions that align with its own strategies.

Asset management

Focusing on current asset value creation, PTTEP plans to maintain and

optimize its production levels over longer periods while accelerating production

development from assorted deposits to enable production start-up as planned.

I In addition, it plans to maximize value from its international and JV projects.

To this end, PTTEP will focus on periodic revision and adaptation of project

investment plans, accelerating or delaying them in alignment with suitable

investments and time frames. To sustain project management under its strategic plans,

PTTEP aims to accelerate its business procedures by focusing on synergy to define

and develop projects in a holistic way while more efficiently allocating resources. It

also strives to foster operational excellence by applying innovative techniques to

aspects of projects. Capital project management ranks high at PTTEP to not only

ensure timely project completion, but also manage costs and desirable project quality.

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Organization capability development

PTTEPs plan focuses on instituting manpower requirement plan with clear

business goals to sustain strategic plan implementation. To strengthen the

organization, in 2009 PTTEP will speed up its structure leadership development

program.

Future Business Potential

PTTEP corporate business targets during 2008-2012 and results of corporate

strategy execution are summarized as follows:

- PTTEP sales volume target in 2008 was 223,334 Barrels of oil

equivalent per day (BOED). PTTEP projected the sales volume for

2012 would be 251,778 BOED with the CAGR (Cumulative Average

Growth Rate) at 6 %.

- PTTEP aims to maximize value from the existing projects and assets.

- PTTEP aims to constantly expand the investment both in domestic and

overseas countries to enhance nations energy security.

- PTTEP aims to develop organization capability up to internationalstandards in order to support current activities and long term growth.

- PTTEP aims to develop organization capability up to international

standards in order to support current activities and long term growth

Expansion

- Expected sales volume at 235,000 BOED in 2009 with 5-year CAGR at 6%.

- Base line growth rate at 6% is based on existing assets and the execution of

development projects in queue which does not include future M&A.

Project Period

MTJDA End of 2009

Vietnam 16-1 2011

Algeria 2012

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M9 2013

- Five year investment at Baht 418,000 MM mostly spent on development projects

for future earnings contribution.

-Concentrate in spending optimization and cost awareness in the near-term.

-Continued commitment to earnings and returns, while maintaining high level of

corporate governance.

Financial Performance

Balance sheet as of Year Ended 2008

Unit: MillionBaht

ASSETS

CASH AND CASH EQUIVALENTS

TRADE ACCOUNTS AND NOTES RECEIVABLE-NET

TRADE ACCOUNTS AND NOTES RECEIVABLE-OTHERS

TRADE ACCOUNTS AND NOTES RECEIVABLE-RELATED

PARTIES

INVENTORIES/REAL ESTATE

FINISHED GOODS

OTHER CURRENT ASSETS

TOTAL CURRENT ASSETS

INVESTEMENTS EQUITY METHOD OF ACCOUNTING

LONG-TERM LOANS TO RELATED PARTIES-NET

LONG-TERM LOANS TO RELATED PARTIESPROPERTY, PLANT AND EQUIPMENT, NET

PROPERTY, PLANT AND EQUIPMENT

INTANGIBLE ASSETS

OTHER NON-CURRENT ASSETS

TOTAL NON-CURRENT ASSETS

TOTAL ASSETS

43,994.69

11,526.62

1,586.94

9,939.68

320.37

320.37

11,110.35

66,952.03

384.34

1,835.00

1,835.00

167,326.09

167,326.09

418.34

1,351.56

171,315.33

238,267.36

LIABILITIES AND SHAREHOLDERS' EQUITY

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TRADE ACCOUNTS AND NOTES PAYABLE-NET

TRADE ACCOUNTS AND NOTES PAYABLE-OTHERS

OTHER SHORT-TERM LOANS

OTHER CURRENT LIABILITIESTOTAL CURRENT LIABILITIES

OTHER LONG-TERM LOANS

DEBT INSTRUMENTS

PROVISIONS

OTHER NON-CURRENT LIABILITIES

TOTAL NON-CURRENT LIABILITIES

TOTAL LIABILITIES

2,245.41

2,245.41

2,985.96

44,218.5249,449.89

18,500.00

18,500.00

17,073.02

19,140.62

54,713.64

104,163.54

SHAREHOLDERS' EQUITY

AUTHORIZED SHARE CAPITAL

AUTHORIZED SHARE CAPITAL - COMMON SHARES

ISSUED AND PAID-UP SHARE CAPITAL

ISSUED AND PAID-UP SHARE CAPITAL - COMMON SHARES

ADDITIONAL PAID-IN CAPITAL

PREMIUM (DISCOUNT) ON COMMON STOCKS

DIFFERENCES ON FINANCIAL STATEMENTS TRANSLATION

TOTAL RETAINED EARNINGS (DEFICIT

RETAINED EARNINGS (DEFICIT) APPROPRIATED

LEGAL RESERVE

OTHERS

RETAINED EARNINGS (DEFICIT) UNAPPROPRIATED

TOTAL EQUITY ATTRIBUTABLE TO THE COMPANY'S

SHAREHOLDERS

SHAREHOLDERS' EQUITY

3,322.00

3,322.00

3,307.08

3,307.08

13,423.11

13,423.11

-2,281.15

119,654.78

17,232.20

332.20

16,900.00

102,422.58

134,103.83

134,103.83

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Income Statement as of Year Ended 2008 (Unit: Million Baht)

Cash flow as of Year Ended 2008 (Unit: Million Baht)REVENUES FROM SALES OF GOODS AND RENDERING OF

SERVICES

REVENUES FROM SALES OF GOODS

REVENUES FROM RENDERING OF SERVICES

OTHER INCOMES

INTEREST AND DIVIDEND INCOME

GAIN ON EXCHANGE RATE

OTHERS

TOTAL REVENUES

COST OF SALES OF GOODS AND RENDERING OF SERVICES

COST OF GOODS SOLD

SELLING AND ADMINISTRATIVE EXPENSES

OTHER EXPENSES

LOSS ON IMPAIRMENT OF ASSETS

OTHERS

DIRECTORS' REMUNERATION

SHARES OF LOSSES FROM INVESTMENTS THROUGH THE EQUITYMETHOD

TOTAL EXPENSES

PROFIT (LOSS) BEFORE INTEREST AND INCOME TAX EXPENSES

INTEREST EXPENSES

INCOME TAX EXPENSES

PROFIT (LOSS) AFTER TAX

PROFIT (LOSS) FROM ORDINARY ACTIVITIES

NET PROFIT (LOSS)

TOTAL BASIC EARNINGS PER SHARE

BASIC EARNINGS PER SHARE - PROFIT (LOSS) FROM ORDINARY

ACTIVITIES

BASIC EARNINGS PER SHARE - NET INCOME (LOSS)

TOTAL DILUTED EARNINGS PER SHARE

DILUTED EARNINGS PER SHARE - PROFIT (LOSS) FROM ORDINARY

ACTIVITIES

DILUTED EARNINGS PER SHARE - NET INCOME (LOSS)

136,751.80

132,620.66

4,131.14

3,255.34

942.23

118.00

2,195.12

140,007.14

10,528.53

10,528.53

4,617.72

49,796.14

168.53

49,627.61

45.34

12.40

65,000.12

75,007.02

829.95

32,502.23

41,674.84

41,674.84

41,674.84

12.62

12.62

12.62

12.60

12.6012.60

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Cash Flow Statement

PERIOD NET PROFIT (LOSS)/ATTRIBUTABLE TO EQUITY HOLDERS

OF PARENT

DEPRECIATION

AMORTISATION

OTHER TRANSACTIONS

NET INCOME (LOSS) FROM OPERATION BEFORE CHANGES OF

OPERATING ASSETS AND LIABILIT

OPERATING ASSETS (INCREASE) DECREASE

OPERATING LIABILITIES INCREASE (DECREASE)

TAX

NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES

PURCHASES OF FIXED ASSETS

(INCREASE) DECREASE IN LOAN TO RELATED PERSONS OR

RELATED COMPANIES

OTHER TRANSACTIONS

NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES

NET PROCEED FROM ISSUANCE OF CAPITAL STOCK

DIVIDENDS PAID

OTHER TRANSACTIONS

NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES

OTHERS

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENT

CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD

CASH AND CASH EQUIVALENTS AT END OF PERIOD

41,674.84

23,121.57

6,393.56

32,831.80

104,021.76

-521.25

1,920.44

-23,156.10

82,264.86

-48,983.88

-1,235.00

-57.75

-50,276.64

573.74

-14,964.00

2,155.12

-12,235.14

228.86

19,981.95

24,012.74

43,994.69

Their Risk

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There are two majors risks associated with the Companys petroleum

exploration and production result from internal and external factors. Internal Risk

Factors such as New Project Investment Risks, Exploration Risks, Project

Development Risks, Production Risks, Commercial Risks, Organization Capability

Risks, Organization Capability Risks, Safety, Security, Health, and Environmental

Risks. External Risk Factors such as Political Risks in Other Countries, Litigation

Risks, Price Risks, Exchange Rate Risks, Interest Rate Risks

Expected Dividend

Capital Structure

As of 31 December 2008, PTTEPs capital structure consisted of Baht 21,500

million liabilities and Baht 134,104 million shareholders equities. The liabilities to

shareholders equities ratio were 0.16 times. Details of the capital structure are as

follows:

Shareholders

There are top 10 major shareholders as follow:

Statistics as of 29/12/2006 28/12/2007 30/12/2008 10/04/2009

P/E 11.03 19.96 8.35 7.86

P/BV 3.84 5.44 2.78 2.44

Book Value

per

share(Baht)

25.14 30.13 38.46 40.55

Dvd. Yield(%) 2.79 1.95 3.05 5.47

Last

Price(Baht)96.50 164.00 107.00 99.00

Market Cap. 317,099.19 540,776.93 353,858.03 327,426.07

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Ranking Shareholders Amount % of a total

shares

1. PTT Public Company Limited 2,167,500,700 65.55

2. Nortrust Nominees Limited 57,396,052 1.74

3. HSBC (Singapore) Nominees PTE Ltd. 56,950,751 1.72

4. The Bank of New York (Nominees)

Limited

50,352,100 1.52

5. Little Down Nominee Limited 44,871,000 1.36

6. Thai NVDR Company Limited 44,683,678 1.35

7. Chase Nominees Limited 42 34,338,400 1.04

8. State Street Bank and Trust Company

for London

32,487,911 0.98

9. BNP Paribas Securities Services

Luxembourg

26,730,045 0.81

10. State Street Bank and Trust Company 23,828,489 0.72

Major shareholder who has significant influence on determining company

policy or the operation of business is PTT has nominated any person and the

management who possess the qualification in accordance with the company criteria for

election as a director or the chief executive officer.

Conclusion

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PTTEPs core business lies within the Exploration and Production (E&P)

industry. PTTEP sources and supply natural gas, condensate, crude oil or LPG

primarily to Thai market. The competition level within the E&P industry in Thailand

can be regarded as non-threatening. This is due to the nature of the market where

demand usually exceeds supply. The types of contract utilized are usually done so in

long-term, where conditions stipulate take-or-pay clauses, minimizing any losses

which may occur.

Despite the current economic slowdown which may prolonged throughout

2009, consequently affecting the domestic energy demand. The previously mentioned

ensured that the products will be sold in the volume agreed, when the contract was

signed. Leaving the current output and sales close to those seen in 2008, and willlikely, if any, affected by the economic slowdown.

Regarding the medium to long-term market, the demand for petroleum

products will continue to grow. It is PTTEPs commitment to search and source new

energy supply from both domestic and international sources to meet the growing

demand.

Figure 1.1.1

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From figure 1.1.1, it showed that during the mid of year 2008, the highest

price of PTTEP was about 200 Baht/share. The other companies in the same sector

also have the high price at that period due to the increase of oil price showing in

figure 1.1.2 below. But at Q1 of 2009, the price of PTTEP dilute to approximately 95

Baht/share. It is an opportunity to buy PTTEP at the cheaper price. When the

economic get back to normal, we can make the profit.

Figure 1.1.2

PTTEP may be the only stock in this sector that showed an outstanding

profitability even we expected that the profit would decrease related to oil price down

trend. Most oil analysts still believe oil price could move up to $50 per barrel by April

2009 as most oil inventory are on declining. If the oil price increases, it will have the

good effect toward the price of PTTEP stock.

Figure 1.1.3

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From figure 1.1.3, the results of operations for year 2008, PTTEPs total net

profit of Baht 41,675 million or Baht 12.68 per share-diluted, an increase of 46%

when compared with 2007s net profit of Baht 28,445 million or Baht 8.66 per share-

diluted. The increase was mainly due to higher sales of petroleum, resulting from the

higher average petroleum sales price and higher sales volume for the year 2008.

However, hope for the rebound of economies, especially of the US after Fed

has injected additional money into its economic system via debenture buying in order

to boost liquidity, was the factor that helped support global oil price to swing

continuously. So, we should buy on weakness.

Figure 1.1.4

From figure above, it showed that PTTEPs graph is very sensitive toward the

Set Index.

1.2Banpu Public Company Limited (BANPU)

Company Profile

Banpu was established in Thailand in 1983 as a coal-mining venture and was

later listed in 1989 on the Stock Exchange of Thailand. In the 1990s the Company

diversified into power project development in Thailand, Coal mining in Indonesia,

port operations and industrial minerals.

Since 2001 Banpu has decided to focus its strategy around becoming a leading

coal-based energy player in the Asia-Pacific region. The decision is based on where

the Company sees its core skills and competitive advantages as well as where it seesmost growth potential. This decision has led to some non-core divestments (industrial

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minerals, port business, some non-coal power investments) as well as further

growth in coal in Indonesia and China.

1983 BanPu Coal Company Limited was founded by the Vongkusolkit family

and the Auapinyakul family with the registered capital of THB 25 million.

1989 Listed on the Stock Exchange of Thailand.

1993 The Company has changed its status to Public Company Limited and

increased its registered capital to THB 1,000 million.

1995 Tri Energy Company Limited or TECO was formed as a joint venture by

the Company, Texaco Inc. and Black & Veatch to bid for a power plant under

the Independent Power Producer (IPP) Scheme of EGAT.

1997 TECO signed a Power Purchase Agreement (PPA) with EGAT and

started the construction of its power plant.

1997 TECO signed a Power Purchase Agreement (PPA) with EGAT and

started the construction of its power plant.

1998 Universal Coal Company Limited was renamed 'Banpu Terminal

Company Limited'.

1999 The Company raised THB 600 million by issuing and offering 600,000

debentures to shareholders at THB 1,000 each.

Nature of Business

Banpu has two core and complementary business lines - coal mining and coal-fired

power generation:

Coal

Banpu has demonstrated core competence and competitive advantages in the cost-

efficient development and operation of open-pit coal mines in Asia - and in both

domestic and export grade thermal coal market.

Power

Banpu has been a pioneer in the successful development of IPPs and SPPs in

Thailand. The Company now intends to use this experience and expertise to develop a

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Ways to Make Profit

In 2008, Banpu continued to sell coals to markets which offered the highest

price. It also focused its efforts in keeping long-term customers and increase customer

satisfactions. Banpus major competition strategies are as follows:

Customer relations management

Realizing how important to respond to customer demands, Banpu has set up a unit to

manage its relationships with customers. The unit interviews major customers of

Banpu by sending questionnaires to measure their satisfactions towards the

Companys products and services. Results of the survey are later used to improve

Banpu products so that we can respond more to their demands.

Customer satisfaction

Results of customer satisfactions are used to improve Banpu internal work process so

that they can timely respond to customer demands and to increase their satisfactions.

Reliability and stability in coal delivery

Improving coal terminal.

Expansion of coal stockyard at the Bontang Coal Terminal.

Improving the barge circuit network.

Delivery flexibility

With a coal terminal of their own, Banpu therefore can offer flexibility for customers

who want to berth their own barges at banpu terminal. This not only facilitates

customers by allowing them to rent their own barges or to change them but it also

helps customers to better manage their barges and their transportation costs.

Speedy service

Banpu has installed a computerized system to monitor its production, coal

transportation and documentation such as invoices, cost calculation and coal quality

information so that they can track a status of goods and services offered to each

customer. This in turn helps Banpu respond more quickly to customers needs while

reducing documentation errors, which should help reducing customers costs and

times spent on communicating with each other.

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Technical supports

The Company has hired coal utilization experts to offer advice and assistance to

customers so that they can use own coal more efficiently, which should therefore

reduce their costs.

Sophisticated quality control system

The Company has upgraded its quality laboratories at every mine and standardized its

coal quality analysis manual to ensure that not only all of own labs will operate on the

same standards but also run according to international standards. In addition, Banpu

also sets up a quality control unit to monitor the quality of own coal at every

production stage until the product is in customers hands to ensure that the coal

delivered to customers is constant in terms of quality and is in line with all the terms

and conditions previously agreed.

Selling more high-ended products

The Company has combined medium-quality coal having low level of sulfur and ash

with high-quality coal. The end result is high-quality product that can be sold in the

market at a higher price, which in turn, expanding Banpu high-price product ranges.

Focusing on long-term customers

The Company continues to focus at maintaining our long-term relationship with

customers. This has allowed Banpu to have a lot of long-term customers whose

purchases cover most of coals sold by Banpu. Although some customers may not sign

a long-term coal purchase agreement with Banpu, they continue to buy coals from

Banpu on a regular basis.

Geographical spreads

The Companys major customers are spreading in various countries both in Europe

and Asia to reduce Banpu dependency risk in having to overly dependent on one

market over another. Besides, when one market has a problem, they can still switch

own effort to other markets that are still free from trouble. This in return helps

stabilize Banpu incomes.

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Their Margin

Banpu Public Company Limited (BANPU) reports its financial performance

for the 2008 fiscal year, recording a net profit of THB 9,228 million, an increase of

THB 2,573 million or 39 percent from the previous year, thanks to the sound

performance of coal business which was boosted by favorable average selling price of

USD 72 per tone, 75 percent higher than that of 2007.

Net profit of THB 9,228 million consisted of THB 6,326 million from coal

business and THB 2,902 million from power business, accountable respectively for

68.5 percent and 31.5 percent of the total earning.

As of 31 December 2008, Banpu total assets were THB 89,362 million, an

increase of THB 24,311 million or 37 percent while total liabilities stood at THB

43,828 million, an increase of THB 17,274 million or 65 percent compared to the year

2007. Net Debt to Equity ratio as of 31 December 2008 was 0.36 times compared to

0.14 times in 2007. Earnings per share (EPS) for the year 2008 were at THB 33.96 per

share, an increase of 39 percent from THB 24.49 per share in 2007.

Future Business Potential

In 2008, Banpu revised its vision and mission statements to be in line with the

current business direction, status and current market conditions. Its newly-revised

vision is as follows: To be an energetic Asian energy provider of quality products and

services and be recognized for its fairness, professionalism and concerns for society

and environment. Its newly-revised five missions are as follows:

To develop businesses in the fields of energy in pursuit of Asian leadership

position.

To diversify and invest in strategic businesses to enhance competitiveness.

To provide varieties of quality products and services with commitment,

reliability, and flexibility.

To conduct business in a socially, ethically and environmentally responsible

manner.

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To build sustainable value for shareholders, customers, business partners,

employees, local communities, and to be a good citizen to host governments. During

the past year, the Management submitted a strategic plan for the next five years

(2009-2013) after the current strategic plan ended in 2008 in order to lay down

business directions. Banpu will pursue, to evaluate risks and to prepare the Company

into a business direction under future circumstances.

Care for occupation health and safety of employees and contractors by taking

all practical and reasonable measures to eliminate fatalities, injuries and occupational

illnesses.

Expansion

Future business expansion, in accordance with its target goal to become a

leading Asiancompany in the energy Business in the Asian region, with core business

of coal production and power generation, Banpu has strengthened its organization by

concentrating in the development of human resource, operating system and process,

new management technique for generating added value for the organization and the

shareholders and improvement of management structure in coping with the

competition in the future.

Thailand's coal mine and energy firm Banpu plans to acquire controlling

stakes in power plants in both Australia and India as well as to purchase an

additional coal mine in Indonesia.

Interest in the power plants in Australia and India, the company plans to

purchase the coal mine in Indonesia as part of its coal-mine business

expansion. It currently has five coal mines in Indonesia and two in China.

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Financial Performance

Summary of financial performance in 2008

Net earnings increased 39 per cent from THB 24.5 per share in 2007 to

approximately THB 34 per share in 2008 or in absolute terms from THB 6,654

million to THB 9,228 million. Total dividends for the year have been announced at

THB 12 per share, up from THB 8.5 in 2007.

Banpus EBITDA1 increased 80 per cent to THB 18,772 million in 2008. In

contrast to the previous year, the Companys coal business accounted for over three

quarters of total EBITDA in 2008 at THB 14,720 million. The Companys EBIT was

up 89 per cent at THB 16,951 million. The earnings performance was driven primarilyby the strength of the coal market and a higher share of AACIs earnings in the second

half of the year, post-acquisition. The EBIT for their coal business increased by more

than three times to THB 13,350 million in 2008, while the power business EBIT fell

to THB 3,601 million.

Coal business earnings growth was achieved in spite of a slight fall in

production thanks to higher coal selling prices, up 75 per cent to an average of about

USD 72 per tonne versus USD 41 per tonne in the previous year. Total equity income

from the China coal business for the year was THB 1,781 million, including 56 per

cent of Danings earnings from July onwards.

Inevitably, higher coal prices had the opposite effect on earnings from Banpus

Power Business. BPICs EBITDA fell 55 per cent to USD 17.9 million while equity

income from BLCP fell 22 per cent to THB 3,165 million.

Profit & Loss (Bt m)

FY Ended December 2006 2007 2008 2009F 2010F

Sales 33,378 32,442 50,530 59,413 57,684

Cost of Sales 20,838 20,964 28,110 33,050 32,583

Gross profit 12,541 11,478 22,419 26,362 25,101

SG & A 4,056 5,144 6,192 7,130 7,499

EBIT 4,541 3,088 10,691 13,291 11,834

DEP re. & amorth 3,492 3,393 1,821 4,866 5,879

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EBITDA 8,033 7,027 12,512 18,158 17,713

Interest expense 1,181 1,307 1,391 1,698 1,404

Other income 891 803 1,391 1,604 1,557

Pre-tax profit (loss) 5,052 7,089 15,660 16,412 16,052

Corporate tax 1,122 1,492 3,763 3,282 3,210

After - taxprofit 3,929 5,597 11,892 13,129 12,841

ForexGain (loss) -186 -361 383 0 0

Extraordinary Items 0 1,687 -1,742 0 0

Gn (Ls) from affiliates 801 4,504 4,946 3,214 4,064

Minority interest 134 269 1,333 3,476 3,088

Net profit 3,610 6,654 9,228 9,654 9,753

Norm. net profit 3,796 5,328 10,559 9,654 9,753

As seen below, the profit and loss table showed the net profit would increase

every year from 3,610 m. Baht (2006) to 9,753 m. Baht (2010F).

The Groups activities expose it to a variety of financial risks, including:

Foreign exchange risk

The Group operates internationally and is exposed to foreign exchange risk

arising from various currency exposures, primarily with respect to US Dollars.

Entities in the Group use forward foreign exchange contracts and currency swaps

contracts, transacted with Group Treasury, to hedge their exposure to foreign currencyrisk in connection with their measurement currency. Group Treasury is responsible for

hedging the net position in each currency by using currency borrowings and external

forward foreign exchange contracts or currency swap contracts.

Interest rate risk

The Groups income and operating cash flows are substantially independent of

changes in market interest rates. All interest rate derivative transactions are subject to

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approval by the Financial Management Committee before execution. The Groups

policy is to maintain borrowings in both fixed and floating rate instruments.

Coal price fluctuation risk

The Group is exposed to coal price risk from substantial fluctuations in coal

price. The Group uses coal swap contracts to minimise its exposure to fluctuations in

coal price in it business operations, both in Thailand and overseas, and maintains on

emphasis on a balance of overall coal price in the Group by entering into both short-

term and long-term sales agreements.

Credit risk

The Group has no significant concentrations of credit risk. The Group has

policies in place to ensure that sales of goods and services are made to customers with

an appropriate credit history. Derivative counter parties and cash transactions are

limited to high credit quality financial institutions. The Group has policies that limit

the amount of credit exposure to any one financial institution.

Liquidity risk

Prudent liquidity risk management implies maintaining sufficient cash and

marketable securities, the availability of funding through an adequate amount of credit

facilities and the ability to close out market positions. Due to the dynamic nature of

the underlying business, Group Treasury aims at maintaining flexibility in funding by

keeping credit lines available.

Expected Dividend and Capital Structure

Statistics asof

29/12/2006 28/12/2007 30/12/2008 10/04/2009

P/E 15.65 18.59 6.54 6.51

P/BV 2.54 4.29 1.58 1.48

Book Valuepershare(Baht)

71.61 93.26 144.29 148.99

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Dvd. Yield(%) 6.87 1.87 3.73 5.43

LastPrice(Baht)

182.00 400.00 228.00 221.00

Market Cap. 49,458.11 108,699.14 61,958.51 60,056.28

Major Shareholders

Major Shareholders Number of Shares

Hold

Percentage

1. The Vongkusolkit Family and related companies* 43,019,741 15.84

2. Thai NVDR Co, Ltd. 32,178,013 11.84

3. State Street Bank and trust Company 18,813,170 6.92

4. Littledown Nominees Limited 9 13,723,000 5.05

5. State Street Bank and Trust Company for London 6,748,210 2.48

6. Chase Nominees Limited 6,041,000 2.22

7. HSBC (Singapore) Nominess Pte. Ltd. 4,443,213 1.64

8.Government of Singapore Investment Corporation

C

4,292,600 1.58

9. Norbax Inc, 13 3,853,035 1.42

10.Fortis Global Custody Services N.V. 3,500,000 1.29

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Summary of Yearly Earning (2006-2008 and 2009F-210F)

Year End Dec 31 2007 2008 2009F 2010F 2011F

Sales (Btmn) 32,442 50,530 58,700 60,861 71,027

EBITDA (Btmn) 7,684 13,775 14,277 14,195 16,477

Normalised earnins (Btmn) 5,328 10,559 9,579 9,452 11,153

Earnings (Btmn) 6,654 9,228 9,579 9,452 11,153

EPS (Bt) 24.49 33.96 35.25 34.78 41.04

PER (x) 8.8 6.4 6.1 6.2 5.3

EV/EBITDA(x) 8.3 5.4 4.1 3.6 2.6

Free cash flow (Btmn) 665 7,141 9,088 11,444 9,989

CF/share (Bt) 4.8 29.2 16.9 29.8 24.8

BVPS (Bt) 126.3 149 170.2 191 218.1

P/BV (x) 1.7 1.4 1.3 1.1 1

DPS (Bt) 8.5 12 14 14 14

Dividend yield (%) 3.90% 5.60% 6.50% 6.50% 6.50%

Net debt/equity (x) 0.2 0.4 0 Cash Cash

ROA (%) 10% 10% 10% 10% 10%

ROE (%) 24% 25% 22% 19% 20%

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metallurgical coal entering the global thermal market, should be offset by positive

factors, especially lower exports from some export countries. The coal market will be

supported by growing the demand in India and Indonesia as well as China.

In China, the current domestic coal price is higher than the international price,

which induces more import of coal to the country. The Chinese government continues

to close small and unsecured coal mines, so supply to the China market should be

trimmed and export would be lower.

Figure 1.2.2

From figure 1.2.2, the historical chart showed that the stock price of BANPU

used to reach the highest price at 500 Baht per share during the mid of year 2008. It is

the same stories as PTTEP as mentioned previously. Currently, the price of stock falls

to approximately 200 Baht per share. It is very cheap to invest in it. The stock price

will vary according to the economic situation. When the economic is good, the

consumption will increase. It leads the price to go up rapidly. It is the way to make

money from this.

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Figure 1.2.3

In July 2008, the coal price jump up at the highest point as shown in figure

1.2.3. It was the same period that the stock price of BANPU reached the highest price

too. An 11.4% WoW decline in spot coal prices should impact the share price

performance in the short-term. The downside for prices should not be large. The high

cost producers will drop out of the market. BANPU coal mines have relatively low

cash production costs compared to others, which will allow it to weather the current

storm.

There are 2 events support a rebound in coal prices.

1) Indonesia (a major coal producer) announced cutting exports this

years by 22% to 162mn tons.

2) China coal imports reached a recent peak of 4.88mn tones in

February 2009 on industrial and construction.

Coal is the lowest cost of production and energy source in many industries

especially in the heavy duty industry but it is the cause of pollution. In addition,

BANPU has the mining business in Indonesia and China. BANPU will spend a total

of US$208mn in 2009 to develop three coal mines in Indonesia and China to maintain

growth. BANPU have the sustainable fundamental and healthy financial status.

Therefore, we should invest in BANPU at this time when the stock price is

inexpensive.

2. Telecommunication

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There are plenty of growth opportunities in Thai market especially at rural

market which is the key growth area for the Thai telecom industry. It is estimated that

telecoms spending is approximately 2% of GDP. The telecommunication helps people

to get connected and very necessary in everyday life. So, even the economy

slowdown, but people still need to communicate. With the rising of oil price, the

mobile phone could be seen as a low-cost alternative for the business traveler. In this

environment, people are becoming more price-sensitive and have low brand loyalty.

There will be high competition in this sector.

In this sector, we invest in Advanced Info Service Public Company Limited

(ADVANC) and Thai Com Public Company Limited (THCOM). The reasons of

selection will be elaborated as follows:

2.1Advanced Info Service Public Company Limited (ADVANC)

It is the largest mobile operator in Thailand and was established in 1989.

AIS:

No.1 Thailand mobile operators, both in terms of subscribers and revenue

market shares

The largest network coverage with over 14.000 cell sites nationwide

Successfully developing three distinctive brands targeting different customer

profile.

Maintain market share leader both in city and rural areas.

Strong dividend payment with low debt profile.

The company owns 46% share of the subscriber market share and more than97% nationwide coverage.

AIS is a publicly listed company in the Stock Exchange of Thailand (SET)

since 1991. As of 2007, the companys market capitalization of approximately Baht

287 billion (US$ 8.6 billion) is among the top five listed companies on the SET.

Major Shareholders of the company:

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The companys major shareholders are 42.67% Shin Corporation Plc. and

21.34% SingTel Strategic Investments PTE Ltd. and 35.95% free-float which are

owned by institutional and retail investors.

AIS also operates 1800 MHz GSM network through its subsidiary, Digital

Phone Co., Ltd. (DPC). DPC operates under a 16-year BTO contract from CAT

Telecom Public Company Limited (CAT), started from 1997 to 2013. DPC also has a

network roaming agreement with AIS to enable nationwide service to the GSM 1800

customers as well as to the GSM advance customers to provide better network service

quality for both networks.

Services of the company:

AIS main services include both prepaid and postpaid services. Prepaid

subscribers make up 91% of the total subscriber base with postpaid subscribers

accounting for the remaining 9%. In revenue terms, prepaid subscribers contributed

66.4% while postpaid revenue was 24.1%.

As of year end of 2007, AIS has a total of 24.1 million subscribers

66.4% of revenue was from prepaid service

Subscribers

(Million)

ARPU (Baht)

Prepaid 21.8 227

Postpaid 2.3 744

Total 24.1 279

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Breakdown of revenue %

Prepaid 66.4

Postpaid 24.1

Other 9.5

Total 100.0

Prepaid and postpaid services:

Smart Life from GSM advance:Choose it right, Live life the way you desire"

released with revitalizing and recolor brand and logo and service modes featuring

Mix & Match that reflects customers style.

Postpaid subscription service targeting young workers, businessmen,

urbanites, tech-savvy, and quality-oriented customers.

Smart Life from GSM advance is the brand that harmoniously combines EQ

and IQ to reflect personalities of new generation blessed with creativity in not only

technology but also transforming lifestyle full with enthusiasm, livelihood and

trendsetting behavior.

GSM 1800:

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Postpaid subscription service focusing on simplicity and basic voicecommunication.

One-2-call:

Prepaid service targeting teens and youngsters who thrive on having individual

styles and expressing their creativity.

Sawasdee:

Prepaid service targeting upcountry customers, first-time users, and those who

need longer validity dates at affordable prices.

Dividend:

Dividend

Dividend 2007 2008

DPS 6.3 6.3*

49
http://images.google.co.th/imgres?imgurl=http://www.mxphone.com/picture/attach/following/old_7506.jpg&imgrefurl=http://www.mxphone.com/show.php%3Fno%3D596&usg=__NUQMQwlaBLKlhpRI35mgfIbXMag=&h=245&w=401&sz=21&hl=en&start=1&tbnid=OwrF2EILOzeG7M:&tbnh=76&tbnw=124&prev=/images%3Fq%3Done-2-call%26gbv%3D2%26hl%3Denhttp://images.google.co.th/imgres?imgurl=http://ideaactivation.com/images/gsm1800.jpg&imgrefurl=http://ideaactivation.com/home.html&usg=__ytOGz2veHUO2BcMg49X0lSDhbfo=&h=345&w=340&sz=45&hl=en&start=1&tbnid=mt2BXZ-wjXUIRM:&tbnh=120&tbnw=118&prev=/images%3Fq%3DGSM%2B1800%26gbv%3D2%26hl%3Den


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Payout 114% 114%

Yield 6.5% 8.2%

Dividend for the year 2008 is at Baht 6.3 per share and the yield is 8.2%.

Financial Data:

Period

as of

Y/E '05

31/12/2005

Y/E '06

31/12/2006

Y/E '07

31/12/2007

Y/E '08

31/12/2008

Financial Data

Assets 119,013.89 134,300.77 128,941.65 128,081.29

Liabilities 47,932.77 56,701.76 53,480.85 54,645.64

Equity 70,209.27 76,937.95 74,884.30 72,923.06

Paid-up Capital 2,950.64 2,953.55 2,958.12 2,961.74

Revenue 93,139.03 92,490.64 109,115.64 113,356.64

Net Profit 18,908.51 16,256.02 16,290.47 16,409.04

EPS(Baht) 6.42 5.50 5.51 5.54

Financial Ratio

ROA(%) 24.04 19.82 19.39 20.60

ROE(%) 27.49 22.09 21.46 22.20

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Net Profit Margin(%) 20.30 17.58 14.93 14.48

Ordinary Shares:

Symbol ADVANC

Exchange SET(Stock Exchange of Thailand)

Authorized

Capital

4,997,459,800 Baht

Paid-up Capital 2,961,739,547 Baht

Mkt. Cap (Btm) 245,824.38/ 8,706 (As of 24 Sep 2008)

Free Float (%) 35.99 (As of 18 Sep 2008)

Avg. Daily

Vol.(000)

5,447

Foreign Limit 48.30 %

Ways to Make Profit:

1. In order to help their customers solving problems related to billing and service

experience, AIS operates its own call center business through its subsidiary,

Advanced Contact Center Co., Ltd. (ACC).

With over 2,200 well-trained call center staffs, the Company is able to provide

superior service quality to its 24 million subscribers. Call center is turning into the

key differentiator for the Company as its services has been evolving from simpleafter-sales problem solving related to billing and service experience to undertaking

more proactive and customer-oriented approach in promoting new marketing

campaigns and suggesting new products and services to both existing and new

customers.

2. International telephone service:

Company commercially launched its new business to provide international

telephone service under AIN GlobalComm Co., Ltd. (AIN), a wholly owned

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subsidiary of AIS. AIN is awarded a 20-year license ended in 2026 from the National

telecommunications Commission (NTC), which allow them to service through its own

international gateway facility.

3. mPay business:

Mobile payment business under Advanced MPAY Co., Ltd. (AMP), a joint

venture between AIS with 69.99% and NTT DoCoMO with 30% shareholding. AMP

received a license from the Bank of Thailand to provide payment services based on

the electronic cash card under mPAY brand.

mPAY enables AISs customers to conveniently and securely engage in

various financial transactions via mobile phones. Services cover many daily-lifetransactionsincluding online shopping, bill payment, recharge of prepaid phone credit

as well as payment for goods and services.

4. AIS also invests in a 99.99% owned subsidiary, Wireless Device Network Co., Ltd.

(WDS), to run sales and distribution of handset, SIM card and refill card, previously

undertaken by DPC, another subsidiary.

The handset sales and distribution business in its nature has very thin margin. AIS

operate this business as a strategic move for company to be able to influence the

handset market in term of handset models that support the Companys new service

applications.

Expansion of the business:

AIS is looking to expand its business into fixed lines area focusing on

providing data services as oppose to the traditional voice service.

Technology that support the use of 900MHz for upgrading to HSPA (High

Speed Packet Access) from the 2G GSM technology, which will allow higher

data speed comparable to 3G. This development is considered under the

existing BTO contract that AIS has with TOT. The initial investment cost is

estimated around 5-7 billion Baht.

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The business is expected to run through its 99.93% subsidiary, Super

Broadband Network Co., Ltd. (SBN).

The Company is also interested in applying for a license to operate WiMAX.

WiMAX or worldwide interoperability for microwave access technology

enables wireless broadband connectivity over wireless metropolitan area

network.

WiMAX will allow the Company to tap into residential broadband market

without laying expensive and time-consuming physical connections to houses.

It will also allow flexibility in expansion of cellular network in some areas.

Launching of the 3G iphone as to attract the new and fast generation of the

youngsters and also smart businessmen in order to help them communicate

conveniently and also explore new information effectively to adapt to the fast

and technological world. The company expects 3G to help enhance variety of

services through introduction of various applications such as internet, email,

multimedia, music/video downloading, instant messaging, and other capacity-

demanding applications.

AIS is considering applying for a 3G license once the National

Telecommunications Commission (NTC) finalizes and issues the 3G licensing

framework and criteria. The total investment expenditure for 3G network is

estimated at Baht 20-23 billion per annum for the first 2-3 years, with primary

interest in WCDMA technology using 2.1GHz radio spectrum.

Radio-frequency identification (RFID) is an automatic wireless identification

method, relying on storing and remotely retrieving data using devices called

RFID tags or transponders. Customers use their mobile phones to pay for

subway and purchase goods and services.

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The key investment features of ADVANC are as follows:

- High dividend payout

- Strong capital structure

- Sustainable operating cash flow

- A rating from S&P and AA rating from TRIS

- Good corporate governance

- Management team with proven track record

Figure 2.1.1

From figure 2.1.1 showed that ADVANCs price reduce to the support line

between 75-80 baht/share. It reflects the poor economic situation but the sales volume

does not reduce following the current condition. So, we buy now and speculate the

price to go up and sell to get the margin.

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2.2 Thai Com Public Company Limited (THCOM)

Company profile

Thaicom Public Company Limited (formerly named Shin Satellite) was

founded on 7th November 1991 by Shin Corporation Plc. (SHIN), which was

granted a 30-year Build-Transfer-Operate concession from Thailands Ministry of

Transport and Communications (now transferred to Ministry of Information and

Communication Technology) to operate the countrys first communications satellite.

The concession expires in 2021.

The Company has been a publicly listed company on the Stock Exchange of

Thailand (SET) since 1994. Later in April 2008, the Company has changed its name

to THAICOM Plc. using the new ticker symbol on SET as THCOM.

Until present, THAICOM Plc. has launched five communications satellites in

geosynchronous orbit including THAICOM 1A, THAICOM 2, THAICOM 3 (de-

orbited), THAICOM 4 (IPSTAR) and THAICOM 5. THAICOM Plc. has built not

only the world class satellite platforms, but also high quality satellite service facilities

besides its main earth control station, namely THAICOM Teleport and DTH Center.

The THAICOM Teleport and DTH Center has also been certified ISO9001:2000 since

2002. The Company continues to renewal ISO certification when expiring, to

guarantee the international standard services to the customers.

Innovations have brought global attention to focus on THAICOM Plc. The

Company was the first in the region to offer Ku-band, Digital Direct-to-Home

broadcasting as well as the worlds first operator to employ MPEG-2/ DVB

compression since 1994. With the success of the THAICOM satellite projects,

THAICOM Plc. has foreseen the potential of a new generation of Internet Protocol

(IP) satellites and set up the project called IPSTAR. IPSTAR is the world first

broadband satellite which fully supports telecommunications via Internet Protocol

(IP). IPSTAR technology has been developed since 2000 to increase the capacity for

efficient use of bandwidth and to reduce the service cost to a lower level than that of

other satellites as well as allowing fast rollout of two-way high-speed satellite

broadband system. According to the IPSTAR initiative, the Company received theIndustry Innovator Award for Technology Development and Applications in 2006

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for the IPSTAR Technology from the Society of Satellite Professionals International

(SSPI).

Currently, THAICOM Plc. operates four types of businesses including satellite

transponder leasing and related services, internet-related services, telephone-related

services (overseas), and telephone directories and distribution.

With experiences and successful records through out these years, THAICOM

Plc. intends to continue the satellite businesses with the premise since establishing, to

bring the advance satellite technology for the benefit of the region, to link

communications network across the region, and to promote equal opportunities for

everyone for the usage of the satellite.

Nature of Business

Product & Service

Transponders Leasing Service

First and foremost, Thaicom provides customers with C-band and Ku-band

transponder capacity for full time or occasional use. This can support

Telecommunications Trunking, VSAT, Satellite News Gathering (SNG), Analog TV,

Digital DTH, and High Definition TV. In addition, a number of C-band and Ku-band

transponders on THAICOM satellites are allocated for occasional short-term video

transmission applications such as live television of special events (sports, concerts,

news, contests, conferences, etc.), program transmission or backhaul services and

SNG.

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themselves in a more efficient and cost-effective manner. The Thaicom global beam is

so vast that VSAT links can now reach hundreds of countries on the four continents it

covers.

3. Rural Telephony

Countries can no longer afford to have sections of their population cut off

from communications with the outside world, but all too often they cannot keep pace

with demand. The lack of basic communications in rural areas seriously detracts from

the quality of life of the populations. It is telecommunications that becomes the

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critical catalyst for encouraging the growth of local extractive, agricultural and

manufacturing industries, as well as rural business and tourism. However, the distance

from centers of population has been a prime factor impeding the progress of bringing

telecommunications to these areas. In these remote regions, rural telephony can be the

ideal solution for providing a communications infrastructure that can be the backbone

for economic development. In addition, rural telephony represents significant business

opportunities for telephone service operators.

A satellite is a cost-effective platform to support a rural telephony service

since its cost is insensitive to distance. To further advocate rural telephony, Thaicom

can provide a technologically advanced, rural telephony network on a turnkey basis.

That is, the Company can take care of every aspect of network installation to ensure

the customers are satisfied with the network, reducing costs and providing more

telephone connections to people in rural and remote areas.

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4. Occasional Service

The occasional service is widely used by covering breaking news, live sports

events, concerts, and other special events. To meet up with the customers demand,

the company can offer a very flexible deal of ad-hoc or occasional services under a

short-term contract ranging from minutes to weeks or even months. In addition, the

company has provided one stop shop services for SNG leasing, fiber, or microwave

through our local and global partners both for domestic and international services.

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Occasional Service Configuration

Video Broadcasting Service

1. Teleport Service

A teleport, or telecommunications port, is a centralized location providing

access to advanced bandwidth services. Thaicom built a world-class teleport center in

1994 and is located at Lad Loom Kaew, Pathumthani Province, Thailand.

The Thaicom Teleport and DTH Center contains very modern equipment and

facilities to support any requirements for domestic or international satellite

broadcasting services. Source signals and programs originating in Thailand can be

pre-processed at the customer's premises and sent to our teleport via fiber optic cable

or microwave.

The establishment of the facility comes from the digital Direct-to-Home(DTH) network expansion of cable TV operators. The facility extends from domestic

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to international services and supports any of the services relating to THAICOM

transponders. This facility can handle a complete range of transmission services for

hundreds of digital and analog TV channels.

Thaicom bundles services from the facility with THAICOM transponders to

provide a one-stop service for broadcasting customers as well as coordinating with

other suppliers on the end-to-end basis.

Teleport services include:

Uplink and Downlink

Studio and Tape Play Facilities The preparation and broadcast of live or

recorded programming

Digital signal compression

Satellite Turnaround Signal collection from one satellite for transmission

to another satellite

Conditional Access

Satellite News Gathering Mobile signal transmission service

High Definition Television (HDTV) Transmission Service

With ground equipment facilities, customers can uplink directly to a Thaicom

satellite for turnaround at the teleport in case when a transmission needs to be sent to

another satellite.

Without uplink facilities, customers can send program tapes to the teleport for

playback and transmission via Thaicom satellites. Our teleport provides many related

services and facilities to its customers such as video conferencing system, television

studio and post production equipment.

2. Direct-To-Home (DTH) Service

Thaicom offers a digital signal compression and transmission services via

satellite directly to residential customers. Digital video compression technology can

reduce video transmission costs to the broadcasters. In addition, viewers can use small

antenas (sub-meter) to receive the digital channel directly.

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With a wide range of services to direct-to-home operators including uplink and

downlink programs using their own equipment or using Thaicom's Thaicom Teleport

and DTH Center, digital compression, digital broadcasting, subscriber management

with encryption and conditional access service, satellite transponder capacity and the

return path for transactional or interactive services are available. Thaicoms services

enable its customers to provide various content and channel options to their direct-to-

home viewers, including service tiering and packaging, pay-per-view and near video-

on-demand, electronic program guides and preview channels, home shopping,

interactive ordering and advertising.

Thaicom has delivered Digital DTH using the Ku-band frequency since 1993

and was the world's first full scale user to adopt the MPEG-2/DVB standard in 1995.

3. Channel Distribution Service

Thaicom provides a wide range of teleport and satellite transponder services to

Thai and international television stations and broadcasters that require a means to

distribute their live or recorded programming to cable operators or to signal repeaters

located throughout the coverage areas of Thaicom satellites. Thaicom global beam

allows the customers to re-broadcast their television programs up to 120 countries in

four continents, Asia, Europe, Australia and Africa.

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4. Global Television Service

Thaicom combines its channel distribution service with other satellite

operators for satellite capacity and turnaround services for DTH re-broadcasting with

a range of services to direct to homes operators in North America, Europe and

Australia to a variety of domestic and international television broadcasters. Using

Thaicom Global Beam, a single uplink of a satellite television channel or radio

stations can potentially reach hundreds of countries in the four continents.

The Global Digital TV Service includes digital compression service, uplink

service, and transponder leasing service. Broadcasters can promote their ethnic

television channels and business, educational and religious television to viewers. This

service has proven popular for ethnic language programming that enables ethnic

groups on one side of the world to broadcast programs to their ethnic cousins on the

other side of the world. While this vast footprint covers everything between Western

Europe and Japan, for areas outside of this footprint, Thaicom can arrange for satellite

capacity and turnaround arrangements using several satellites to achieve truly global

viewing.

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5. High Definition Television (HDTV) Service

In coping with the new trend of broadcasting industry, Thaicom offers High

Definition Television (HDTV) transmission services (a digital broadcasting) using the

THAICOM 5 platform. HDTV provides much clearer pictures and higher solution

than traditional format such as NTSC, SECAM, and PAL. Currently, HDTV is a fast-

growing broadcasting technology and is widely successful in Europe and America. It

has also begun to be more popular in Asia. The Company plans to offer the HDTV

transmission service for Indochina and Thailand.

Ways to make Profit

Transponder Leasing and Related Business

Conventional Thaicom business has grown steadily. In 2008, the company

accomplished to add new customers, which mainly are international and domestic TV

broadcasters. As at the end of 2008, there are 264 TV channels broadcast via the

Thaicom satellites, an increase from 243 channels in 2007.

The three new IPSTAR gateways in Korea, Malaysia and the Philippines have

been deployed and operated in 2008. To date thirteen gateways in ten countries are in

operation. In 2008, the new retail broadband package has been launched through

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IPSTARs partners in New Zealand and the Philippines in order to increase consumer

uptake.

Eight IPSTAR service prociders in Australia have been granted the Australian

Broadband Guarantee Program (ABG) from the Australian government. ABG is a

form of a Universal Service Obligation subsidy program granting subsidies to

qualified service providers to provide broadband services to areas in Australia that are

unable to access metro-comparable broadband services, which mainly consists of

rural households nationwide. With this subsidy grant, the number of IPSTAR end-

users thus far has increased aggressively.

In December 2008, the Company has signed a Contract with Vietnam Telecom

International (VTI), a subsidiary company of Vi

final fm report

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