regional smallcap-pedia singapore weekly philippines...

August 27, 2012

IMPORTANT DISCLOSURES, INCLUDING ANY REQUIRED RESEARCH CERTIFICATIONS, ARE PROVIDED AT THE END OF THIS REPORT. Designed by Eight, Powered by EFA

REGIONAL

MALAYSIA

SINGAPORE

INDONESIA

THAILAND

PHILIPPINES

CHINA, HONG KONG

SMALLCAP-PEDIA WEEKLY

A Few Good Ideas We are Neutral on the Hong Kong retail sector. While earnings downgrades are coming to an end, we expect a delayed earnings recovery to the second quarter of next year. Top small cap pick is Trinity. In Singapore, we see clear value in Tat Hong and Wing Tai while in the tech space, how much downside can there be to TPV Technology – HK’s share price given that it is already trading at GFC P/BV level.

High conviction ideas We believe it’s boom time for Tat Hong (TAT SP, Outperform, TP S$1.39) again and we see strong earnings growth ahead. Put simply, robust margins, rental rates and utilisation for its crawler and mobile-crane fleets should persist in the next few years, given a wealth of regional projects.

On Thaicom (THCOM TB, Outperform, TP THB22.70), we expect Thaicom’s earnings to fire up in FY12 and gain altitude in FY13-14, underpinned by new satellite capacity, higher demand for TV channels and high operating leverage. Dividend payments could resume in FY12.

We see value TPV Technology – HK’s (903 HK, Outperform, TP HK$2.49) share price has performed in line with the HSI index since our upgrade, and we continue to believe that the market has priced in its depressed near-term outlook. 1H12 net profits were in-line at 41% of consensus and our full-year forecast. However, we lower FY12-14 forecast to factor in slower sales but higher GP margin. Our target price dipped slightly, still based on 0.4x P/BV (slight discount to 5-yr average). Potential catalysts may come from gradual improvement in TP Vision.

We believe shareholders of Wing Tai (WINGT SP, Outperform, TP S$1.68)

are in store for better things to come. While management noted the heightened probability of a correction in the property market, we view the cautious optimism as a positive, ensuring that capital is deployed carefully. FY13 catalysts come from new Tampines launch, a revamped Foresque and stronger dividends.

Downgrades Amtek Engineering (AMTK SP, TP S$0.66) has been downgraded to Neutral from Outperform previously. Earnings outlook appears to be weakening quickly, and we expect core earnings to resume their growth trajectory only in 4QFY13, limiting near-term share price performance. Despite its dismal near-term earnings outlook, sustainable dividend yields of 4.7-6.5% for FY13-14 will buffer and share price downside.

In Hong Kong, Betram Lai downgrades ChinaSoft International (354 HK, TP HK$1.62) to Neutral from Outperform. 1H12 net profit missed our forecast by 23% due to weaker Professional Service Business numbers and rising labour costs. Few positive catalysts in 2H12, but we expect the resumption of overall IT spending in FY13 once the economy improves.

New IPO A new Singapore tourism proxy is now available with the listing of Far East Hospitality Trust (FEHT SP, Not Rated). FEHT stands out with its pure local exposure and potential for improved yields. It has one of the strongest acquisition pipelines among the hospitality trusts, offering growth visibility until 2016.

Notes from the Field

William Tng

T (65) 62108676 E [email protected]

Larry Cho


Pisut Ngamvijitvong

T (66) 2 6579226 E [email protected]

Nigel Foo Chek Keng


Ali Mastono


Relative Performance of Small Cap

Indices to Main Index

(% pts) YTD 1m 3mSingapore 6.50 2.21 1.82Malaysia (1.23) (0.51) 3.79Thailand 4.07 (0.05) 4.46Indonesia (1.28) (5.04) (7.72)Hong Kong (12.48) (1.16) (8.47)

Highlighted Companies

Tat Hong Tat Hong is a leading crane rental provider. It’s Managing Director expressed unbridled confidence that the higher margins, rental rates and utilisation rates can be maintained.

TPV Technology – HK Trading at GFC P/BV level, we believe the market has priced in its depressed near-term outlook. Coupled with decent dividend yields, the share price could have bottomed-out.

Wing Tai A more cautious management should translate into greater discipline in capital deployment, a positive given the heightened probability of a property market correction in Singapore. At 0.5x P/BV, we see further value.

SMALLCAP-PEDIA WEEKLY August 27, 2012

2

Key Charts & Tables

Figure 1: FTSE Global Small Cap Series Hong Kong Index versus Hang Seng Index

90

95

100

105

110

115

120

125

Jan-12 Feb-12 Mar-12 Apr-12 May-12 Jun-12 Jul-12 Aug-12

FTSE Global Smallcap Series Hong Kong Hang Seng Index

SOURCES: CIMB, BLOOMBERG

Figure 2: FTSE Global Small Cap Series Thailand Index versus SET Index

95

100

105

110

115

120

125

130


FTSE Global Smallcap Series Thailand SET Index


Figure 3: FTSE Global Small Cap Series Malaysia Index versus KLCI

90

95

100

105

110


FTSE Global Smallcap Ser ies Malaysia FTSE Bursa Malaysia KLCI



3

Figure 4: FTSE Global Small Cap Series Singapore Index versus STI

95

100

105

110

115

120

125


FTSE Global Smallcap Series Singapore St rait s Times Index STI


Figure 5: FTSE Global Small Cap Series Indonesia Index versus JCI

95

100

105

110

115

120

125


FTSE Global Smallcap Series Indonesia JCI Index



4

Figure 6: Regional small cap weekly top gainers/losers (CIMB coverage)

-50.0% 0.0% 50.0% 100.0% 150.0% 200.0%

JCY InternationalTrinity

Malaysian Resources CorpUnisem

Elec & Eltek - HKMetropolitan Land

Fufeng GroupQingling Motors Company-H

Malaysian Bulk CarriersIndika Energy

Luk Fook HoldingsWing Tai Holdings

Petra FoodsEmperor Watch & Jew ellery

China ZhengTong Auto ServcsBorneo Lumbung Energi

Modern InternasionalComba Telecom Systems

Goodbaby InternationalSTX Pan Ocean


Figure 7: HK small cap weekly top gainers/losers (CIMB coverage)

-10.0% -5.0% 0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0% 35.0%

Trinity

Elec & Eltek - HK

Fufeng Group

Qingling Motors Company-H

West China Cement

Luk Fook Holdings

Emperor Watch & Jew ellery

China ZhengTong Auto Servcs

Comba Telecom Systems

Goodbaby International


Figure 8: Thailand small cap weekly top gainers/losers (CIMB coverage)

-3.0% -2.0% -1.0% 0.0% 1.0% 2.0% 3.0% 4.0% 5.0%

Precious Shipping

Major Cineplex Group

Hana Microelectronics

CH. Karnchang

Sri Trang Agro-Industry

Thai Airw ays International

Delta Electronics Thai

Siam Global House

Asian Property

Sansiri Public Co



5

Figure 9: Malaysia small cap weekly top gainers/losers (CIMB coverage)

-25.0% -20.0% -15.0% -10.0% -5.0% 0.0% 5.0% 10.0%

JCY International

Malaysian Resources Corp

Unisem

Malaysian Bulk Carriers

Tasek Corporation

Media Chinese Int'l

Guinness Anchor

Hap Seng Plantations

WCT Bhd

BIMB Holdings


Figure 10: Singapore small cap weekly top gainers/losers (CIMB coverage)

-20.0% 0.0% 20.0% 40.0% 60.0% 80.0% 100.0% 120.0% 140.0% 160.0% 180.0%

ASL Marine

Perennial China Retail Trust

Hyf lux

Sw iber Holdings

Super Group

Raffles Medical Group

China Minzhong Food

Wing Tai Holdings

Petra Foods

STX Pan Ocean


Figure 11: Indonesia small cap weekly top gainers/losers (CIMB coverage)

-10.0% -5.0% 0.0% 5.0% 10.0% 15.0% 20.0% 25.0%

Metropolitan Land

Indika Energy

Mitra Adi Perkasa

Ramayana Lestari

Pembangunan Perumahan

Wijaya Karya

Surya Semesta Internusa

Timah

Borneo Lumbung Energi

Modern Internasional



6

Figure 12: Sibor versus FSTM Index

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

0

200

400

600

800

1,000

1,200

SIBOR (LHS) FSTM Index (RHS)


Figure 13: Sibor versus FSTS Index

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

0

200

400

600

800

1,000

1,200

SIBOR (LHS) FSTS Index (RHS)


Figure 14: Index performance

0.0

5.0

10.0

15.0

20.0

25.0

YTD QTD MTD WTD

FSSTI Index FSTM Index FSTS Index



7

Figure 15: YTD top performers (Singapore coverage)

0 10 20 30 40 50 60

Cerebos Pacif ic

Ezion Holdings

Frasers Commercial Trust

Wing Tai Holdings

Super Group


Figure 16: QTD top performers (Singapore coverage)

0 5 10 15 20 25 30 35

Ascott Residence Trust

Sheng Siong Group

China Minzhong Food

Cerebos Pacif ic

Midas Holdings


Figure 17: MTD top performers (Singapore coverage)

0 5 10 15 20 25

Hyflux

Starhill Global REIT

STX Pan Ocean

China Minzhong Food

Cerebos Pacif ic



8

Figure 18: Hong Kong small cap universe Bloomberg Price Target Price Market Cap Core P/E (x) 3-year EPS P/BV (x) Recurring ROE (%) EV/EBITDA (x) Dividend Yield (%)

Company Ticker Recom. (lcl curr) (lcl curr) (US$ m) CY2012 CY2013 CAGR (%) CY2012 CY2013 CY2012 CY2013 CY2014 CY2012 CY2013 CY2012 CY2013

Automobiles and PartsChina ZhengTong Auto Servcs 1728 HK Outperform 4.13 5.90 1,176 9.8 6.3 47.4% 1.07 0.91 11.5% 15.6% 19.4% 3.7 2.9 0.0% 0.0%Minth Group 425 HK Neutral 8.47 8.30 1,176 8.6 7.6 10.9% 1.14 1.03 13.9% 14.1% 13.9% 3.7 3.0 4.0% 4.5%Qingling Motors Company-H 1122 HK Outperform 1.76 2.23 563 11.7 10.5 2.9% 0.49 0.49 4.2% 4.7% 5.1% 1.1 1.1 7.1% 7.8%Automobiles and Parts 9.6 7.4 24.7% 0.89 0.81 9.6% 11.5% 13.3% 3.3 2.7 3.0% 3.3%

ConsumerAjisen (China) Holdings Ltd 538 HK Outperform 4.96 7.00 687 33.9 17.4 4.8% 1.78 1.69 5.3% 9.9% 11.4% 12.9 8.1 1.2% 2.6%China Lilang 1234 HK Outperform 6.00 7.30 929 8.8 7.8 13.0% 2.66 2.56 30.9% 33.6% 36.4% 4.7 3.9 5.7% 6.4%China Yurun Food Group 1068 HK Neutral 4.95 5.40 1,163 na 13.9 11.2% 0.57 0.54 -5.4% 4.0% 8.4% 10.2 5.1 0.3% 2.4%Emperor Watch & Jewellery 887 HK Neutral 0.80 0.74 693 9.6 7.8 9.9% 1.27 1.13 13.8% 15.4% 17.4% 6.7 5.6 3.1% 3.8%Fufeng Group 546 HK Outperform 2.80 3.40 628 6.3 4.6 20.3% 1.03 0.86 17.2% 20.5% 20.7% 4.7 3.6 3.2% 4.4%Giordano International 709 HK Outperform 6.09 7.29 1,209 13.8 10.9 9.8% 3.18 2.94 23.7% 28.1% 29.1% 9.8 6.6 6.3% 6.9%Goodbaby International 1086 HK Outperform 2.39 3.00 308 12.7 9.6 21.0% 1.31 1.19 10.8% 12.9% 14.7% 5.6 4.3 2.2% 2.9%Hengdeli Holdings 3389 HK Outperform 2.23 3.30 1,263 9.7 8.1 19.8% 1.35 1.21 15.3% 15.7% 18.1% 6.0 5.2 4.0% 4.3%Lianhua Supermarket 980 HK Neutral 7.28 7.80 1,051 11.0 9.8 9.0% 1.79 1.59 17.4% 17.2% 17.9% -1.7 -2.5 2.9% 3.3%Luk Fook Holdings 590 HK Neutral 21.15 18.30 1,606 9.1 7.7 14.6% 2.01 1.73 23.9% 24.0% 25.9% 6.5 5.5 4.4% 5.2%Prince Frog International 1259 HK Outperform 2.42 3.00 314 8.6 8.1 13.5% 1.75 1.49 22.3% 19.8% 20.2% 4.2 3.4 2.3% 2.5%Sitoy Group Holdings 1023 HK Outperform 3.40 5.00 439 7.6 6.7 11.5% 1.91 1.57 29.7% 25.6% 24.8% 4.6 3.6 3.7% 4.5%Springland Int'l 1700 HK Neutral 3.75 3.95 1,209 12.1 10.4 13.4% 1.73 1.67 15.4% 16.3% 16.9% 10.3 8.8 3.4% 3.7%Trinity 891 HK Outperform 5.26 7.10 1,163 16.2 14.4 12.0% 2.62 2.43 16.7% 17.5% 19.3% 10.5 8.8 4.3% 4.8%Consumer 13.2 9.2 14.4% 1.50 1.37 11.9% 15.6% 17.8% 6.1 4.7 3.6% 4.4%

TechnologyChinaSoft International 354 HK Neutral 1.77 1.62 377 15.2 10.0 25.0% 1.18 0.88 8.4% 10.1% 11.7% 6.2 3.7 0.0% 0.0%Comba Telecom Systems 2342 HK Outperform 2.10 4.70 413 51.3 3.9 13.3% 0.82 0.69 1.6% 19.0% 20.9% 19.9 3.2 0.2% 6.8%Elec & Eltek - HK 1151 HK Underperform 19.00 15.36 - 12.5 8.7 8.8% 1.24 1.19 9.9% 13.9% 18.2% 6.5 5.2 7.3% 9.0%Ju Teng International 3336 HK Outperform 3.17 4.25 462 6.5 6.0 37.0% 0.68 0.62 10.9% 10.9% 10.9% 5.5 4.4 2.5% 2.5%Kingboard Laminates 1888 HK Neutral 3.05 3.35 1,180 8.2 5.5 16.2% 0.80 0.73 10.1% 14.0% 15.8% 5.3 3.8 4.1% 6.1%Kingdee Int'l Software 268 HK Underperform 1.17 1.02 380 39.5 18.9 77.7% 1.43 1.33 3.7% 7.3% 9.9% na na 0.0% 0.0%TPV Technology - HK 903 HK Outperform 1.57 2.49 475 4.9 3.8 32.6% 0.25 0.24 5.3% 6.4% 7.4% na 5.2 6.2% 7.8%Technology 9.5 5.9 21.5% 0.68 0.62 7.3% 11.0% 12.6% 8.4 4.6 3.3% 5.1%

OthersBeijing Enterprises Water 371 HK Outperform 1.61 1.96 1,434 15.1 12.8 16.3% 1.30 1.21 8.8% 9.8% 10.2% 15.3 12.4 2.2% 2.6%China Datang Renewable 1798 HK Neutral 0.78 0.96 733 6.7 6.3 1.5% 0.49 0.46 7.5% 7.5% 7.3% 10.3 10.6 4.5% 4.8%China High Speed 658 HK Underperform 2.55 1.80 448 7.2 6.8 -12.1% 0.36 0.35 5.2% 5.2% 5.1% 6.1 5.7 0.0% 0.0%Pacific Basin Shipping 2343 HK Neutral 3.46 3.43 864 53.3 33.5 -37.0% 0.66 0.66 1.2% 2.0% 3.5% 8.4 7.7 0.9% 1.5%Sinoma 1893 HK Underperform 2.03 1.80 935 6.4 6.2 -10.7% 0.51 0.48 8.3% 8.0% 7.9% 5.1 4.6 2.3% 2.4%SITC International 1308 HK Neutral 1.88 2.35 627 8.7 8.4 9.6% 0.91 0.85 10.7% 10.5% 12.5% 4.0 3.3 4.0% 4.2%Skyworth Digital Hldgs 751 HK Outperform 3.21 4.80 1,118 5.5 7.5 -17.4% 0.93 0.86 17.9% 11.9% 7.1% 5.1 6.0 5.2% 3.7%West China Cement 2233 HK Outperform 1.21 1.50 709 8.0 5.2 14.9% 0.87 0.76 11.8% 15.7% 16.4% 5.4 3.9 1.3% 2.4%Others 8.7 8.2 -5.5% 0.71 0.67 8.4% 8.3% 8.2% 7.1 6.8 2.7% 2.8%

Small cap coverage 10.7 8.1 10.5% 0.97 0.90 9.4% 11.6% 12.9% 6.6 5.5 3.2% 3.9% SOURCES: CIMB, BLOOMBERG


9

Figure 19: Thailand small cap universe Bloomberg Price Target Price Market Cap Core P/E (x) 3-year EPS P/BV (x) Recurring ROE (%) EV/EBITDA (x) Dividend Yield (%)


Construction and MaterialsCH. Karnchang CK TB Underperform 7.20 7.00 381 na 40.5 na 1.90 1.89 -2.2% 4.7% 5.8% 95.9 41.9 0.0% 1.9%Italian-Thai Development ITD TB Underperform 3.40 3.06 457 111.6 34.8 na 1.74 1.70 1.6% 4.9% 7.9% 10.6 10.5 0.0% 1.3%Sino-Thai Eng & Construction STEC TB Outperform 16.40 18.50 623 19.4 16.7 14.0% 3.22 2.89 17.1% 18.2% 19.2% 12.4 10.8 2.7% 2.2%Construction and Materials 45.9 24.4 na 2.23 2.13 4.9% 8.9% 11.0% 14.0 13.0 1.2% 1.8%

PropertyAmata Corporation AMATA TB Outperform 16.90 23.70 578 17.9 10.0 35.1% 2.72 2.34 15.9% 25.2% 24.6% 14.4 9.2 2.0% 3.6%Asian Property AP TB Outperform 8.15 9.12 742 10.3 8.0 28.9% 1.90 1.63 19.8% 21.8% 22.3% 11.4 8.8 3.9% 5.0%Hemaraj HEMRAJ TB Outperform 2.98 2.72 926 15.6 14.2 60.7% 2.99 2.76 20.1% 20.1% 21.1% 21.5 24.1 3.5% 3.8%LPN Development LPN TB Neutral 17.10 15.70 808 11.3 9.3 16.5% 3.04 2.54 28.9% 29.9% 29.1% 9.1 7.5 4.4% 5.4%Pruksa Real Estate PS TB Outperform 17.90 24.32 1,267 10.1 7.4 25.2% 1.98 1.64 21.3% 24.3% 21.9% 11.4 8.2 3.0% 4.1%Quality Houses QH TB Neutral 1.81 1.64 532 20.8 16.1 40.4% 1.07 1.02 5.6% 6.5% 6.8% 26.9 21.6 5.4% 5.1%Sansiri Public Co SIRI TB Outperform 2.40 2.75 559 7.7 5.6 22.2% 1.53 1.29 20.2% 25.0% 25.9% 7.1 4.8 6.5% 8.9%Supalai PCL SPALI TB Underperform 18.90 15.44 1,039 10.0 9.2 15.0% 2.42 2.07 26.3% 24.3% 23.7% 8.3 7.8 4.0% 4.4%Property 11.3 8.8 27.9% 2.05 1.77 19.4% 21.7% 21.6% 11.5 9.0 4.0% 5.0%

TechnologyCal-Comp (Thailand) CCET TB Neutral 2.82 3.04 368 7.6 5.3 71.7% 0.74 0.73 10.1% 14.0% 17.0% 6.5 5.6 5.7% 5.7%Delta Electronics Thai DELTA TB Outperform 24.50 27.07 979 8.4 8.1 16.9% 1.44 1.34 17.6% 17.0% 18.7% 5.5 4.8 6.1% 6.1%Hana Microelectronics HANA TB Neutral 20.60 21.52 531 10.1 7.4 14.1% 1.05 0.99 10.8% 13.8% 15.1% 4.6 3.0 4.9% 7.3%Technology 8.7 7.2 24.2% 1.12 1.06 13.3% 15.2% 17.1% 5.7 4.6 5.7% 6.4%

OthersAsia Aviation PCL AAV TB Outperform 3.46 4.25 538 13.6 9.0 41.2% 3.84 2.69 56.4% 35.3% 35.8% 7.1 4.8 0.0% 0.0%Bangkok Chain Hospital BCH TB Outperform 9.10 12.00 582 20.0 18.6 14.7% 4.82 4.17 25.9% 24.0% 24.1% 11.9 10.2 2.0% 2.2%Jasmine International JAS TB Outperform 3.74 4.00 868 14.8 10.1 45.7% 3.34 2.74 24.0% 29.8% 29.8% 6.9 5.0 2.0% 3.4%Major Cineplex Group MAJOR TB Neutral 17.40 19.20 493 16.5 13.7 19.3% 2.74 2.64 16.1% 19.7% 22.7% 8.9 7.6 5.4% 6.6%Precious Shipping PSL TB Underperform 14.00 14.30 466 231.2 56.5 12.6% 0.95 0.94 0.4% 1.7% 4.4% 13.6 11.5 1.6% 0.8%Siam Global House GLOBAL TB Outperform 13.50 12.00 761 39.7 28.9 29.3% 5.56 4.83 14.6% 17.9% 19.0% 22.4 17.4 0.7% 0.9%Sri Trang Agro-Industry STA TB Trading Buy 14.60 24.55 599 6.0 5.0 41.2% 0.87 0.76 15.8% 16.2% 15.8% 11.7 10.8 3.1% 5.3%Thai Airways International THAI TB Neutral 20.60 22.50 1,440 10.7 12.7 na 0.67 0.64 6.4% 5.1% 5.9% 6.7 7.1 1.9% 1.6%Thanachart Capital TCAP TB Outperform 34.25 42.00 1,402 7.3 6.2 14.7% 1.04 0.93 15.0% 15.8% 15.7% na na 4.1% 4.7%Tisco Financial Group TISCO TB Underperform 40.00 38.00 933 8.3 7.3 6.8% 1.62 1.45 20.7% 21.1% 20.4% na na 6.0% 6.8%Others 11.4 9.8 51.2% 1.34 1.23 12.4% 13.0% 14.0% na na 2.8% 3.3%

Small cap coverage 11.7 9.5 44.7% 1.56 1.41 14.0% 15.6% 16.5% na na 3.4% 4.1% SOURCES: CIMB, BLOOMBERG


10

Figure 20: Malaysia small cap universe Bloomberg Price Target Price Market Cap Core P/E (x) 3-year EPS P/BV (x) Recurring ROE (%) EV/EBITDA (x) Dividend Yield (%)


Construction and MaterialsMalaysian Resources Corp MRC MK Neutral 1.61 1.73 720 45.7 32.6 2.5% 2.46 2.29 5.5% 7.3% 8.4% 12.6 10.2 1.6% 1.9%Mudajaya Group MDJ MK Trading Buy 2.74 3.78 486 5.0 4.5 17.0% 1.22 0.97 27.8% 23.9% 22.1% 2.3 1.4 4.2% 4.4%Sunway Bhd SWB MK Trading Buy 2.23 2.70 930 8.1 7.2 5.3% 0.84 0.73 11.4% 10.8% 10.6% 7.1 6.1 4.0% 4.4%Tasek Corporation TC MK Neutral 11.42 10.08 456 14.7 14.4 -5.5% 1.45 1.40 9.8% 9.9% 9.8% 5.7 5.2 4.4% 4.4%WCT Bhd WCT MK Trading Buy 2.70 3.15 715 12.1 9.7 14.3% 1.42 1.19 12.2% 13.4% 13.0% 9.2 7.7 3.6% 3.8%Construction and Materials 10.3 9.1 8.6% 1.26 1.10 13.1% 12.9% 12.7% 6.9 5.8 3.5% 3.7%

ConsumerCarlsberg Brewery (M) CAB MK Outperform 12.10 14.00 1,203 19.7 19.1 6.1% 5.81 5.72 29.8% 30.2% 32.2% 13.9 13.4 4.8% 5.0%Guinness Anchor GUIN MK Outperform 15.50 14.50 1,511 21.4 20.4 5.7% 16.93 22.33 62.2% 94.3% 110.0% 14.4 13.9 8.1% 6.3%JT International RJR MK Neutral 7.10 7.00 599 14.4 14.2 2.1% 4.91 4.30 30.7% 32.2% 29.0% 9.7 9.1 11.1% 4.2%MSM Malaysia Holdings MSM MK Neutral 5.19 4.92 1,177 14.4 14.0 -0.2% 1.67 1.60 11.8% 11.7% 11.5% 8.6 8.1 4.2% 4.3%QSR Brands QSR MK Outperform 6.50 6.80 636 15.7 14.4 na 3.91 3.87 24.9% 27.0% na 4.2 4.0 2.3% 2.3%Consumer 17.4 16.7 na 3.97 3.86 22.5% 23.5% na 9.6 9.1 6.1% 4.8%

Industrial Goods and ServicesAnn Joo Resources AJR MK Trading Buy 1.52 2.47 256 6.5 4.8 23.1% 0.70 0.65 11.2% 14.0% 14.6% 6.4 5.0 5.9% 7.9%Hartalega Holdings HART MK Outperform 4.60 5.01 1,085 14.9 12.8 16.1% 4.75 3.94 35.2% 33.8% 33.8% 4.5 3.6 3.0% 3.5%Kossan Rubber Industries KRI MK Outperform 3.30 3.69 340 10.1 8.2 15.6% 1.75 1.49 18.7% 19.6% 20.2% 5.2 4.1 2.5% 3.0%Supermax Corp SUCB MK Outperform 2.15 2.64 472 10.4 8.6 21.3% 1.45 1.27 15.0% 15.7% 15.9% 4.3 2.9 1.9% 2.3%Top Glove Corporation TOPG MK Underperform 5.40 4.20 1,078 18.3 16.8 na 2.51 2.28 14.9% 14.3% na 10.3 9.3 2.1% 2.4%Industrial Goods and Services 12.9 10.8 na 2.11 1.86 17.5% 18.3% na 6.4 5.2 2.8% 3.3%

MediaMedia Chinese Int'l MCIL MK Neutral 1.56 1.57 849 14.9 17.6 -11.7% 3.13 4.00 16.1% 20.1% 20.3% 9.8 11.5 24.3% 10.0%Media Prima Bhd MPR MK Neutral 2.42 2.50 842 12.9 11.4 1.8% 4.25 3.52 35.7% 33.6% 29.9% 6.6 6.2 3.9% 4.4%Star Publications STAR MK Outperform 3.22 3.58 767 13.4 12.0 -3.4% 2.08 1.93 16.0% 16.8% 15.8% 7.2 6.6 5.6% 5.6%Media 13.7 13.2 -3.9% 2.89 2.86 19.7% 21.7% 20.7% 7.8 7.7 11.6% 6.7%

PropertyCapitaMalls Malaysia Trust CMMT MK Outperform 1.71 1.80 974 22.0 21.4 2.9% 1.55 1.56 7.0% 7.3% 7.6% na na 4.9% 5.0%Eastern & Oriental EAST MK Trading Buy 1.61 1.77 590 14.2 11.5 38.6% 1.34 1.23 9.9% 11.2% 11.6% 11.3 7.9 2.2% 2.5%Mah Sing Group MSGB MK Trading Buy 2.41 2.71 648 8.6 7.0 22.0% 1.63 1.40 20.1% 21.4% 20.2% 7.1 5.5 3.7% 4.0%Pavilion REIT PREIT MK Outperform 1.39 1.42 1,346 21.9 20.2 6.9% 1.45 1.45 6.6% 7.2% 7.3% na na 4.8% 5.2%Sunway REIT SREIT MK Outperform 1.49 1.55 1,296 20.1 19.0 8.4% 1.34 1.34 6.8% 7.0% 7.7% na na 5.1% 5.3%UOA Development UOAD MK Trading Buy 1.85 2.18 759 7.4 6.5 19.7% 1.13 1.03 15.8% 16.6% 17.4% 5.1 4.7 6.5% 7.0%Property 14.5 12.8 16.7% 1.39 1.34 9.8% 10.6% 11.2% na na 4.7% 5.0%

TechnologyJCY International JCYH MK Neutral 1.13 1.41 746 4.6 4.8 na 1.92 1.60 46.1% 36.2% na 3.8 3.5 8.9% 8.5%JobStreet Corp JOBS MK Neutral 2.18 2.17 226 15.3 14.0 7.7% 3.38 3.01 23.1% 22.7% 22.0% 10.7 9.2 3.3% 3.6%Unisem UNI MK Neutral 1.07 1.27 233 na 16.1 86.5% 0.68 0.67 -0.9% 4.2% 7.2% 6.9 4.0 2.3% 4.7%Technology 7.0 6.5 na 1.52 1.36 22.6% 22.0% na 5.0 4.1 6.6% 6.8%

OthersBIMB Holdings BIMB MK Outperform 3.25 3.45 1,119 13.4 11.5 19.1% 1.76 1.61 13.6% 14.7% 15.6% na na 3.7% 4.4%Bintulu Port BPH MK Neutral 7.02 7.30 906 17.8 17.0 0.4% 4.20 4.11 23.6% 24.4% 25.3% 7.8 7.6 5.3% 5.3%Bursa Malaysia BURSA MK Trading Buy 6.33 7.28 1,087 22.1 21.1 4.3% 3.87 3.83 17.6% 18.3% 19.4% 12.3 11.7 4.3% 4.5%Gas Malaysia Berhad GMB MK Outperform 2.68 2.84 1,110 24.0 23.9 -13.8% 3.78 3.72 15.6% 15.7% 16.0% 15.2 14.5 4.2% 3.8%Hap Seng Plantations HAPL MK Trading Buy 3.08 3.45 795 12.6 10.5 -3.0% 1.26 1.20 10.2% 11.8% 11.5% 8.2 6.8 4.9% 5.2%Malaysian Airline System MAS MK Underperform 1.08 1.60 1,165 na 8.3 na 3.13 2.57 -37.3% 34.0% na 79.5 7.8 0.0% 0.0%Malaysian Bulk Carriers MBC MK Neutral 1.54 1.57 497 62.2 46.9 -7.7% 0.88 0.88 1.4% 1.9% 3.6% 19.8 17.6 1.9% 1.9%Perisai Petroleum PPT MK Outperform 0.94 1.53 257 8.5 8.1 41.1% 2.07 1.65 25.9% 22.6% 18.8% 10.8 8.8 0.0% 0.0%Tan Chong Motor Holdings TCM MK Underperform 4.60 3.65 997 17.4 10.9 10.8% 1.58 1.43 9.6% 13.8% 14.2% 10.7 8.2 2.1% 2.3%Wah Seong Corp WSC MK Outperform 1.84 2.58 460 8.9 8.5 13.2% 2.37 2.30 27.4% 27.3% 30.0% 4.8 4.7 3.9% 4.0%Others 34.1 12.9 na 2.14 1.99 6.2% 16.0% na na na 3.2% 3.3%

Small cap coverage 15.9 12.1 na 1.95 1.81 12.5% 15.5% na na na 4.8% 4.4% SOURCES: CIMB, BLOOMBERG


11

Figure 21: Singapore small cap universe Bloomberg Price Target Price Market Cap Core P/E (x) 3-year EPS P/BV (x) Recurring ROE (%) EV/EBITDA (x) Dividend Yield (%)


CommoditiesCWT Limited CWT SP Outperform 1.23 1.55 590 8.9 8.1 21.8% 1.30 1.15 15.5% 15.2% 14.9% 6.5 5.4 2.0% 2.0%Mewah International MII SP Underperform 0.43 0.37 512 12.4 10.1 14.9% 0.89 0.83 7.4% 8.5% 9.5% 8.1 7.3 1.6% 2.0%Sakari Resources SAR SP Underperform 1.49 1.00 1,355 12.0 13.9 -9.2% 2.00 1.89 17.3% 14.0% 19.2% 6.3 6.8 5.0% 4.3%Commodities 11.2 11.1 1.3% 1.44 1.33 13.5% 12.5% 14.8% 6.7 6.6 3.6% 3.3%

ConsumerChina Minzhong Food MINZ SP Outperform 0.75 0.81 334 3.1 2.8 12.5% 0.54 0.46 19.1% 17.8% 16.4% 1.8 0.9 0.0% 0.0%Parkson Retail Asia PRA SP Outperform 1.56 1.75 842 20.2 17.6 16.8% 4.08 3.68 23.5% 22.1% 23.0% 9.6 7.7 2.1% 2.3%Petra Foods PETRA SP Underperform 2.40 2.04 1,173 18.9 17.0 7.9% 3.51 3.11 19.7% 19.5% 19.0% 11.9 10.8 2.1% 2.3%Sheng Siong Group SSG SP Outperform 0.48 0.49 526 20.8 17.9 9.1% 4.31 4.21 20.7% 23.8% 25.2% 20.5 16.7 5.5% 5.0%Super Group SUPER SP Outperform 2.14 2.65 954 17.6 15.8 18.4% 2.98 2.72 17.3% 18.0% 19.1% 12.8 11.3 2.8% 3.2%Consumer 13.2 11.7 13.8% 2.39 2.11 19.5% 19.2% 18.9% 8.5 7.2 2.6% 2.7%

Industrial Goods and ServicesHong Leong Asia HLA SP Neutral 1.66 1.60 495 7.3 6.8 na 0.72 0.68 10.2% 10.2% na 4.0 3.8 6.0% 6.0%Midas Holdings MIDAS SP Outperform 0.36 0.41 346 55.1 10.2 10.1% 0.73 0.69 1.3% 6.9% 7.4% 9.7 6.3 1.1% 1.7%Tat Hong Holdings TAT SP Outperform 1.17 1.39 465 8.7 7.4 33.1% 1.02 0.92 12.2% 13.1% 14.3% 6.2 5.9 2.8% 3.0%Industrial Goods and Services 10.3 7.7 na 0.81 0.76 8.1% 10.1% na 5.2 4.7 3.5% 3.8%

Oil Equipment and ServicesASL Marine ASL SP Outperform 0.61 0.78 206 8.1 6.7 16.7% 0.70 0.65 8.9% 10.0% 10.1% 5.3 4.4 3.1% 3.3%CSE Global CSE SP Outperform 0.85 1.02 351 7.7 6.7 39.7% 1.70 1.46 24.0% 23.6% 23.1% 5.2 4.0 5.3% 5.9%Ezion Holdings EZI SP Outperform 1.06 1.19 718 10.0 5.3 43.1% 1.66 1.27 18.9% 27.0% 25.6% 13.8 6.7 0.1% 0.1%Ezra Holdings EZRA SP Outperform 1.04 1.38 813 15.5 9.1 na 0.88 0.82 5.6% 9.4% na 12.3 9.6 2.3% 2.7%Otto Marine OTML SP Underperform 0.09 0.08 204 na na na 0.60 0.60 -5.0% 0.0% 1.2% 25.9 14.5 0.0% 0.0%Rotary Engineering RTRY SP Underperform 0.49 0.61 222 14.0 8.9 -1.5% 0.96 0.90 6.8% 10.4% 9.3% 3.8 2.5 4.1% 6.1%Swiber Holdings SWIB SP Outperform 0.61 0.79 297 6.3 5.8 16.4% 0.72 0.64 11.2% 11.6% 11.7% 7.7 7.5 0.0% 0.0%Oil Equipment and Services 11.6 7.3 na 0.99 0.89 8.6% 12.7% na 9.7 7.3 1.9% 2.3%

PropertyARA Asset Management ARA SP Outperform 1.48 1.74 906 15.4 15.0 4.9% 5.05 5.02 35.0% 33.5% 34.4% 13.1 12.5 3.4% 3.4%Ascott Residence Trust ART SP Neutral 1.23 1.21 1,118 8.5 17.6 3.0% 0.88 0.89 10.3% 5.0% 5.2% na na 7.3% 7.2%Bukit Sembawang Estates BS SP Outperform 4.81 5.45 996 5.9 5.7 10.6% 1.01 0.89 18.3% 16.5% 12.5% 5.0 4.1 4.1% 3.4%Cache Logistics Trust CACHE SP Outperform 1.13 1.19 631 13.9 13.7 6.0% 1.21 1.22 8.5% 8.8% 9.4% na na 7.6% 7.8%CDL Hospitality Trust CDREIT SP Neutral 1.96 2.21 1,516 17.2 16.7 3.9% 1.23 1.23 7.0% 7.4% 7.6% na na 5.9% 6.1%Frasers Centrepoint Trust FCT SP Outperform 1.80 1.91 1,182 18.6 17.1 na 1.29 1.29 6.8% 7.5% na na na 5.5% 6.0%Frasers Commercial Trust FCOT SP Outperform 1.11 1.21 569 27.7 20.0 30.7% 0.76 0.77 2.7% 3.7% 4.1% na na 6.4% 7.6%Ho Bee Investments HOBEE SP Neutral 1.29 1.27 724 8.1 5.2 16.0% 0.54 0.50 6.8% 10.1% 10.8% 16.5 12.3 3.1% 3.1%Parkway Life REIT PREIT SP Outperform 1.95 1.96 941 18.9 17.6 na 1.38 1.39 7.3% 7.9% na na na 5.6% 5.9%Perennial China Retail Trust PCRT SP Outperform 0.47 0.60 422 na 93.7 na 0.77 0.73 -0.4% 0.8% 0.7% na na 8.2% 8.2%Starhill Global REIT SGREIT SP Neutral 0.75 0.75 1,158 15.3 14.0 6.4% 0.86 0.86 5.5% 6.2% 6.3% na na 6.0% 6.7%United Engineers UEM SP Outperform 2.25 2.78 540 14.6 8.8 -27.3% 0.54 0.52 3.6% 6.0% 7.1% 19.6 10.1 4.5% 4.4%Wing Tai Holdings WINGT SP Outperform 1.51 1.68 944 7.2 7.0 -9.1% 0.55 0.52 8.0% 7.6% 6.0% 9.3 5.1 4.6% 4.3%Property 12.1 11.5 na 0.93 0.90 7.7% 8.0% na na na 5.5% 5.6%

OthersAmtek Engineering AMTK SP Neutral 0.63 0.66 272 8.2 7.1 5.3% 1.71 1.53 21.1% 22.8% 24.7% 4.1 3.5 3.8% 5.6%Goodpack GPACK SP Outperform 1.75 1.93 697 13.2 10.8 na 2.35 1.97 18.8% 19.9% na 8.8 7.1 1.5% 1.5%Hi-P International HIP SP Outperform 0.92 0.96 643 12.7 9.7 43.6% 1.21 1.12 9.6% 11.9% 11.9% 3.3 2.5 3.4% 4.5%Hyflux HYF SP Underperform 1.38 1.23 911 14.6 11.2 1.1% 1.16 1.02 8.2% 9.6% 5.8% 9.2 9.5 2.1% 2.7%Keppel T&T KPTT SP Neutral 1.12 1.20 495 9.8 9.0 7.0% 1.41 1.28 14.9% 15.0% 14.4% 13.6 10.7 3.2% 3.6%Raffles Medical Group RFMD SP Outperform 2.43 2.96 1,057 21.3 17.9 18.8% 3.45 3.04 16.8% 18.1% 18.6% 14.4 12.1 1.7% 1.7%STX Pan Ocean STX SP Underperform 4.22 1.45 695 na na na 0.40 0.47 -18.4% -15.0% -12.2% na 1146.1 1.3% 1.3%Tiger Airways TGR SP Outperform 0.74 0.90 486 na 16.4 na 2.42 2.10 -10.7% 13.7% 16.7% 46.1 9.7 0.0% 0.0%Yongnam Holdings YNH SP Outperform 0.23 0.33 227 5.4 4.1 6.0% 0.84 0.71 16.3% 18.9% 17.6% 3.4 2.8 2.7% 2.7%Others na 26.6 na 1.18 1.14 -0.8% 4.4% na 22.5 14.1 2.0% 2.3%

Small cap coverage 15.3 11.9 na 1.10 1.05 7.3% 9.1% na na na 3.8% 3.9% SOURCES: CIMB, BLOOMBERG


12

Figure 22: Indonesia small cap universe Bloomberg Price Target Price Market Cap Core P/E (x) 3-year EPS P/BV (x) Recurring ROE (%) EV/EBITDA (x) Dividend Yield (%)


CommoditiesAneka Tambang - Indonesia ANTM IJ Underperform 1,250 1,460 1,253 10.3 11.1 -21.4% 1.05 0.99 10.4% 9.2% 7.4% 7.9 9.4 4.9% 2.9%Borneo Lumbung Energi BORN IJ Neutral 560.0 540.0 1,041 8.5 10.4 11.5% 1.09 1.02 13.3% 10.1% 24.0% 3.0 3.1 5.5% 3.5%BW Plantation BWPT IJ Outperform 1,470 1,900 624 16.9 12.1 27.7% 3.43 2.80 22.8% 28.7% 28.4% 13.3 9.9 0.5% 1.2%Indika Energy INDY IJ Neutral 1,600 1,880 876 7.3 10.3 4.4% 1.20 1.16 17.1% 11.5% 17.4% 9.3 7.9 6.7% 6.3%Sampoerna Agro SGRO IJ Outperform 2,800 4,500 556 11.6 8.7 8.5% 1.80 1.55 17.1% 19.3% 19.0% 6.2 4.9 2.1% 1.8%Timah TINS IJ Neutral 1,350 1,430 714 9.1 8.5 -1.9% 1.54 1.40 16.5% 17.2% 17.4% 3.9 3.6 6.6% 5.5%Commodities 9.6 10.1 1.7% 1.32 1.21 14.2% 12.5% 16.9% 6.3 6.3 4.7% 3.7%

ConsumerAce Hardware Indonesia ACES IJ Outperform 6,100 6,700 1,099 28.7 22.6 24.7% 6.85 5.40 27.8% 27.9% 26.0% 16.9 12.9 0.3% 0.4%Mitra Adi Perkasa MAPI IJ Neutral 6,800 8,300 1,186 25.1 19.5 21.0% 5.17 4.20 22.9% 24.1% 22.3% 9.8 8.3 0.2% 0.3%Modern Internasional MDRN IJ Outperform 870.0 4,300 292 9.8 5.4 62.2% 1.21 1.02 13.0% 20.5% 26.2% 7.7 5.2 2.6% 2.6%Ramayana Lestari RALS IJ Outperform 1,140 1,500 850 17.7 15.1 19.1% 2.60 2.37 15.3% 16.5% 17.5% 9.4 8.0 2.0% 2.4%Consumer 22.9 18.1 23.4% 4.16 3.53 19.9% 21.5% 21.6% 11.1 9.1 0.8% 0.9%

Financial ServicesBank Bukopin BBKP IJ Outperform 660.0 1,200 553 6.1 5.2 17.0% 1.05 0.91 18.6% 18.9% 19.8% na na 3.6% 4.2%Bank Jabar Banten BJBR IJ Neutral 990.0 1,040 1,008 8.6 7.5 14.3% 1.62 1.47 19.8% 20.6% 20.9% na na 5.1% 6.0%Bank Tabungan Negara BBTN IJ Outperform 1,350 2,000 1,254 10.1 8.4 20.8% 1.52 1.38 15.7% 17.3% 18.9% na na 3.6% 4.4%BFI Finance Indonesia BFIN IJ Outperform 2,300 6,300 367 3.6 2.9 19.6% 0.61 0.51 18.8% 18.9% 19.8% na na 0.0% 0.0%Financial Services 7.8 6.6 19.2% 1.32 1.17 17.9% 18.8% 19.8% na na 3.9% 4.6%

PropertyAlam Sutera ASRI IJ Outperform 475.0 780.0 981 9.1 8.3 39.1% 2.47 2.03 31.4% 26.8% 33.7% 6.1 4.5 2.8% 3.0%Ciputra Development CTRA IJ Outperform 620.0 835.0 988 18.8 11.5 49.3% 1.72 1.54 9.5% 14.1% 16.4% 13.3 7.8 1.0% 1.6%Ciputra Property CTRP IJ Outperform 570.0 870.0 368 14.3 8.4 57.8% 0.93 0.84 6.8% 10.6% 14.4% 10.4 5.7 1.3% 1.4%Metropolitan Land MTLA IJ Outperform 415.0 650.0 330 16.9 11.7 30.4% 2.13 1.84 13.5% 16.9% 20.1% 13.8 8.5 1.3% 1.2%Summarecon Agung SMRA IJ Outperform 1,570 1,850 1,134 15.0 13.6 26.5% 3.52 2.96 26.0% 23.6% 20.2% 9.1 8.1 0.9% 1.6%Surya Semesta Internusa SSIA IJ Outperform 1,150 1,450 568 9.4 7.4 45.8% 3.45 2.52 43.1% 39.1% 34.7% 5.8 4.8 1.6% 2.3%Property 12.8 10.0 42.0% 2.19 1.87 18.6% 20.1% 22.7% 8.7 6.3 1.5% 2.0%

OthersAKR Corporindo AKRA IJ Outperform 3,725 4,500 1,507 20.4 16.2 19.0% 4.09 3.59 20.3% 23.6% 21.9% 12.2 9.9 1.1% 1.5%Hexindo Adiperkasa HEXA IJ Underperform 7,450 7,100 657 10.1 9.2 8.0% 3.04 2.51 33.2% 29.7% 28.9% 23.7 21.6 4.0% 4.0%Indosiar Karya Media IDKM IJ Outperform 5,750 7,500 1,224 32.2 20.7 na 23.89 11.10 120.5% 73.1% 69.3% 20.7 13.3 0.0% 6.2%Krakatau Steel KRAS IJ Neutral 690.0 950.0 1,143 11.8 9.0 96.0% 0.99 0.90 8.7% 10.5% 13.2% 9.7 6.3 0.6% 0.6%Pembangunan Perumahan PTPP IJ Outperform 600.0 760.0 305 10.7 8.1 21.1% 1.79 1.53 17.4% 20.5% 20.6% 4.7 3.6 2.1% 2.4%Selamat Sempurna SMSM IJ Outperform 2,050 2,375 310 13.3 10.7 16.9% 4.28 3.77 35.1% 37.6% 39.9% 7.6 6.6 4.9% 6.3%Wijaya Karya WIKA IJ Outperform 1,100 1,200 701 15.0 12.0 23.6% 2.76 2.35 16.6% 17.8% 18.4% 10.7 8.6 1.4% 1.7%Others 16.9 12.8 48.6% 2.46 2.16 15.1% 17.6% 19.3% 10.8 7.8 1.1% 2.8%

Small cap coverage 12.3 10.6 19.9% 1.90 1.69 16.3% 16.9% 19.4% na na 2.4% 2.8% SOURCES: CIMB, BLOOMBERG

SMALLCAP-PEDIA WEEKLY EFAGenReportDate

13

Company Briefs…

Industrial Machinery SINGAPORE August 22, 2012


Boom town Charlie! When we suggested that the group would return to heyday profitability, we were not kidding. Robust margins, rental rates and utilisation for its crawler and mobile-crane fleets should persist in the next few years, given a wealth of regional projects. In our recent road show, Mr Roland Ng, TAT’s MD, expressed unbridled confidence that the higher margins, rental rates and utilisation could be sustained. We keep our estimates, target price (10x CY13 P/E, 5-year average) and Outperform rating, with catalysts expected from further sets of strong results and efforts to reward shareholders through dividends.

Supply can’t match demand

Ramped-up jobs throughout the region are only beginning. It was never about demand but supply. What went particularly well for TAT in 1Q13 was a 20% qoq increase in its crawler-crane (+11% qoq in tonnage) utilisation, with deployment in markets where construction is rampant.

Rental rates to surpass peak

By the end of FY13, half of this fleet will be renegotiating their 3-6-month contracts, with rate reversions inevitable, we believe. The only constraint to higher revenue and profitability is supply, not demand which has a 3-year visibility. Management suggested that using FY08 rentals as an index (100) base, rates are now at 85. In the next few quarters, rentals for all its crawler and mobile units could surpass their FY08 peaks.

Assets have more value than they appear Its S$600m crane assets are consistently producing around S$300m worth of rental income each year. The group has accounted for its crane fleet and land purchases at costs. Both assets, especially the latter, have appreciated in value.


Gary Ng


Company Visit Expert Opinion

Channel Check Customer Views

“Using FY08 benchmark rental as 100. Rate is now at the 85 point on that index. In the next few quarters, rental for all the crawler and mobile units will surpass that peak achieved in FY08.”

– Roland Ng, MD

Tat Hong Holdings COMPANY NOTETAT SP / TAT.SI Current S$1.16 SHORT TERM (3 MTH) LONG TERM

Market Cap Avg Daily Turnover Free Float Target S$1.39

US$459.1m US$0.35m 32.0% Previous Target S$1.39 S$573.7m S$0.44m 519.0 m shares Up/downside 20.3%

Conviction

0.5

0.6

0.7

0.8

0.9

1.0

1.1

1.2

86

97

109

120

132

143

155

166Price Close Relative to FSSTI (RHS)

Source: Bloomberg

2468

10

Aug-11 Nov-11 Feb-12 May-12

Vol

m

Financial Summary Mar-11A Mar-12A Mar-13F Mar-14F Mar-15F

Revenue (S$m) 584.2 719.8 810.5 857.6 882.0Operating EBITDA (S$m) 100.1 150.3 183.3 193.4 119.6Net Profit (S$m) 26.0 42.3 72.3 81.0 102.3Core EPS (S$) 0.05 0.09 0.15 0.16 0.20Core EPS Growth (33%) 106% 56% 11% 22%FD Core P/E (x) 25.13 12.20 7.85 7.10 5.80DPS (S$) 0.015 0.025 0.035 0.035 0.035Dividend Yield 1.31% 2.16% 3.03% 3.03% 3.03%EV/EBITDA (x) 9.27 6.37 6.14 5.70 8.55P/FCFE (x) 7.5 306.6 NA 20.1 39.8Net Gearing 60.8% 63.4% 83.6% 72.7% 56.2%P/BV (x) 1.16 1.08 0.98 0.89 0.81Recurring ROE 4.6% 9.1% 13.1% 13.2% 14.7%% Change In Core EPS Estimates 0% 0% 0%CIMB/consensus EPS (x) 1.23 1.22 1.31

1.16

1.39

0.65 1.16

Target

52-week share price range

Current

SOURCE: CIMB, COMPANY REPORTS

Telco - Others THAILAND August 22, 2012


Reaching for the sky We expect Thaicom’s earnings to fire up in FY12 and gain altitude in FY13-14, underpinned by new satellite capacity, higher demand for TV channels and high operating leverage. Thaicom could resume dividend payment in FY12 onwards. We initiate coverage on Thaicom with Outperform and an SOP-based target price. Our earnings forecasts are conservative, factoring in the gradual take-up of Thaicom 6 capacity, Thaicom 4’s backlog and loss-making Mfone. Potential re-rating catalysts are the bulk sale of Thaicom 4 capacity, stronger presales for Thaicom 6 and a dividend surprise.

One of Asia’s leading satellite operators Thaicom, formerly Shin Satellite, is one of the leading satellite operators in Asia. Thaicom operates two satellites: Thaicom 4, the only broadband satellite in Asia, and Thaicom 5, a conventional satellite. It plans to launch two new conventional satellites: Thaicom 6 in mid-FY13 and Thaicom 7 in early-FY14.

Its conventional satellite capacity will capture the growing demand for TV channels arising from the liberalisation of the Thai broadcasting industry and the growing popularity of high-definition TV. Its broadband satellite has developed a mobile backhaul solution and has been

well-received by regional telcos, such as Softbank, China Telecom, Bharti.

Low-risk assumptions Our core net profit growth estimates of 25-91% for FY12-14 should be achievable. We adopt low-risk assumptions to avoid exaggerated estimates given the high operating leverage of the capital-intensive satellite business. We factor in 1) existing revenue from Thaicom 5, 2) Thaicom 4’s existing contract backlog plus new deals with TOT, 3) gradual take-up of Thaicom 6 capacity, 4) no contribution from Thaicom 7, and 5) loss-making Mfone.

Risk/reward profile Our risk/reward profile justifies an Outperform call on Thaicom. Our scenario analysis illustrates that Thaicom’s fair value should jump from THB22.7 to THB28 if it reaches bulk bandwidth lease agreements (50% utilisation) with Indian and Chinese customers. Meanwhile, if Thaicom decides to liquidate Mfone, the downside risk is capped at THB0.36 or 2% of our target price.


Pisut Ngamvijitvong

T 66 2657 9226 E [email protected]



“Thaicom 5 has become a hot bird with more than 400 television channels, and millions of DTH viewers.”

– Suphajee Suthumpun,

CEO, Thaicom

Thaicom COMPANY NOTETHCOM TB / THCOM.BK Current THB17.00 SHORT TERM (3 MTH) LONG TERM

Market Cap Avg Daily Turnover Free Float Target THB22.70

US$593.2m US$8.81m 58.9% Previous Target N/A THB18,631m THB278.4m 1,096 m shares Up/downside 33.5%

Conviction

77

90

104

117

130

144

157

7

9

11

13

15

17

19

Price Close Relative to SET (RHS)

Source: Bloomberg

20406080

Aug-11 Nov-11 Feb-12 May-12

Vol

m

Financial Summary Dec-10A Dec-11A Dec-12F Dec-13F Dec-14F

Revenue (THBm) 6,700 7,254 8,656 10,258 11,046Operating EBITDA (THBm) 1,975 2,861 3,465 4,246 4,746Operating EBITDA Margin 29.5% 39.4% 40.0% 41.4% 43.0%Net Profit (THBm) (789) (490) 454 930 1,165Core EPS (THB) (0.64) (0.37) 0.45 0.85 1.06Core EPS Growth (25.4%) (42.0%) na 90.5% 25.2%FD Core P/E (x) NA NA 38.15 20.03 15.99DPS (THB) 0.00 0.00 0.17 0.34 0.43Dividend Yield 0.00% 0.00% 0.98% 2.00% 2.50%EV/EBITDA (x) 12.83 8.96 7.54 6.05 4.74P/FCFE (x) 19.19 9.03 NA 6.71 NANet Gearing 48.5% 52.3% 56.2% 52.5% 31.0%Recurring ROE (4.63%) (2.82%) 3.42% 6.33% 7.60%% Change In Core EPS Estimates CIMB/consensus EPS (x) 0.93 1.48 1.15

17.00

22.70

7.50 17.00

Target

52-week share price range

Current


Technology Components HONG KONG August 23, 2012

IMPORTANT DISCLOSURES. INCLUDING ANY REQUIRED RESEARCH CERTIFICATIONS, ARE PROVIDED AT THE END OF THIS REPORT. Designed by Eight, Powered by EFA

Trading at GFC P/BV level Share price has performed in line with the HSI index since our upgrade, and we continue to believe that the market has priced in its depressed near-term outlook. 1H12 net profits were in-line at 41% of consensus and our full-year forecast. However, we lower FY12-14 forecast to factor in slower sales but higher GP margin. Our target price dipped slightly, still based on 0.4x P/BV (slight discount to 5-yr average). Potential catalysts may come from gradual improvement in TP Vision. Maintain Outperform.

Earnings quality deteriorated in 2Q 2Q sales improved 7% yoy and 19% qoq, lifted largely by the maiden contributions from its 70:30 JV with Philips, TP Vision. Excluding TP Vision, sales were down 21% yoy and 12% qoq as both PC monitors and LCD TV sales were hit by the weak macro environment. During the quarter it shipped 13.8m PC monitors (-3% yoy, but up 1% qoq) and 3.1m LCD TVs (inclusive of 1.6m units from TP Vision) vs. 2.9m a year ago. EBITDA margin slipped into the

red in 2Q as a result of the spike in opex. However, bottomline was lifted by other income. In end-June, TPV turned net cash (US$142m). It declared a lower interim dividend of 0.46 US cts (0.63 US cts in 1H11).

Improvements in 2H Although demand will continue to be plagued by the weak economic environment, we believe TPV will still see hoh growth with greater contributions from TP Vision (which made a small profit in 2Q). Also, the group is expanding its back-end production capabilities as well as tightening costs to improve profitability.

Still an Outperform Despite the challenging outlook, TPV is already trading at GFC low in terms of P/BV. Coupled with its decent yield (assuming 30% payout ratio), we see limited downside risk from the current level.

CIMB Analyst

Jonathan Ng


Mike Yip


TPV Technology - HK 2QFY12 RESULTS NOTE903 HK / 0903.HK Current HK$1.54 SHORT TERM (3 MTH) LONG TERM

Market Cap Avg Daily Turnover Free Float Target HK$2.49

US$465.7m US$0.39m 55.0% Previous Target HK$2.52 HK$3,612m HK$3.04m 2,346 m shares Up/downside 61.7%

Conviction

Share price info

Share price perf. (%) 1M 3M 12M

Relative 1.4 -9.4 -57.6

Absolute 2.7 -4.9 -55.5

Major shareholders % held

China Great Wall Computer 50.9

Mitsui 20.2

Results comparisonFYE Dec (US$ m) 2QFY12 2QFY11 yoy % qoq % 2QFY12 2QFY11 yoy % Prev.

chg chg Cum Cum chg FY12F CommentsRevenue 2,790 2,606 7.0 19.2 5,129 5,297 (3.2) 12,646 Below, lower-than-expected shipmentsOperating costs (2,810) (2,574) 9.2 21.4 (5,126) (5,222) (1.8) (12,471) Below, lower-than-expected salesEBITDA (20.2) 32.7 (161.9) (180.3) 3.4 74.7 (95.5) 175.4 Losses vs our profit forecast of US$42.5mEBITDA margin (%) (0.72) 1.25 (1.80) 0.07 1.41 1.39 Depn & amort. (50.6) (32.2) 57.2 69.7 (80.4) (61.7) 30.2 (137.9) Above, consolidation of Philips LCD TV operationsEBIT (70.8) 0.5 (13,981.4) 1,428.3 (77.0) 13.0 (694.3) 37.5 Interest expense (16.5) (2.2) 662.3 333.5 (20.3) (5.2) 287.3 (2.1) Above, included US$9.9m one-offInterest & invt inc 109.7 34.2 220.8 330.4 135.1 68.3 97.9 75.4 Above, Associates' contrib (0.3) (0.9) (67.2) (116.6) 3.0 0.8 263.3 2.0 Exceptionals - - nm nm - - nm - Pretax profit 22.1 31.7 (30.1) 17.7 40.9 76.9 (46.8) 112.8 Below, lower-than-expected sales and marginTax (7.7) (3.4) 128.0 136.8 (11.0) (10.4) 5.6 (22.1) Tax rate (%) 35.0 10.7 26.9 13.6 19.6 Minority interests 9.7 (0.2) 4,955.3 106.8 14.3 3.7 290.5 16.1 Net profit 24.0 28.1 (14.4) 19.0 44.2 70.1 (36.9) 106.8 In-line, after factoring losses from subsidiariesEPS (US cts) 1.0 1.2 (14.4) 19.0 1.9 3.0 (36.9) 4.6


Property Devt & Invt SINGAPORE August 22, 2012


Better things to come While management noted the heightened probability of a correction in the property market, we view the cautious optimism as a positive, ensuring that capital is deployed carefully. FY13 catalysts come from new Tampines launch, a revamped Foresque and stronger dividends. FY6/12 core earnings met our forecast at 103% of full year, but was slightly below consensus by 12%. We introduce FY15 and adjust FY13/14 EPS on recognition timing and new Tampines project. New project and re-rating of associate/subsidiaries raise our RNAV/target price (25% discount to RNAV).

Mid-market takes stage FY13 will be supported by mid-market projects. A new freehold residential project in Tampines will be launched in early 2013, yielding 337 units. Positioned in the mid-market segment, this is a key launch, which management will price at a premium given its freehold status and location. Phase 2 of Foresque will also be launched after a revamped showflat is completed in 6-9 months’ time. The remaining two high-end Anderson and Ardmore projects will be completed in 2013. It has two years to dispose of all units before it faces a penalty.

More dividends FY12 earnings were driven by additional units sold for the Helios and Belle Vue projects, as well as progressive recognition (Foresque, L’Viv and Ascentia Sky). Net gearing fell to a low of 0.18x and cash was returned to shareholders: FY12 saw dividends/share of 7cts, on par with FY11 at a higher 36% payout ratio (core earnings). With FY12 dividend yield at 5.5% based on the current share price, FY13 is likely to follow suit with 4-5% yields on the back of mid-market launches, strong cash balances and 50th anniversary.

Management caution a positive Management expressed greater caution than a year ago and will be careful in deploying capital. It still sees long-term value in high-end segment. At 0.5x P/BV, we see further value with S$1.39 (partial offer price) as a support level.

CIMB Analyst

Lee Syn Yi


Donald Chua


Wing Tai Holdings 4QFY12 RESULTS NOTEWINGT SP / WTHS.SI Current S$1.42 SHORT TERM (3 MTH) LONG TERM


US$885.2m US$0.70m 47.5% Previous Target S$1.60 S$1,106m S$0.88m 793.4 m shares Up/downside 18.5%

Conviction

Share price info


Relative 2 1.1 0.1

Absolute 3.7 11 12.3


Wing Sun 28.4

Winlyn Investment 9.3

Ascend Capital 8.7

Results comparisonFYE Jun (S$ m) 4QFY12 4QFY11 yoy % qoq % FY12 FY11 yoy % Prev.

(Restated) chg chg Cum Cum chg FY12F CommentsRevenue 202.2 107.5 88 58% 624.9 751.1 (16.8) 598.0 In line. FY12: 104% of full year. Units sold (Helios/Belle Vue).Operating costs (217.3) (97.2) 124 125% (559.5) (474.6) 17.9 (429.4) In line.EBITDA (15.1) 10.3 (246) -148% 65.4 276.5 (76.3) 168.6 EBITDA margin (%) (7.5) 9.6 -130% 10.5 36.8 (71.6) 28.2 Depn & amort. (3.1) (2.8) 8 5% (11.9) (11.1) 7.5 (13.4) EBIT (18.2) 7.5 (342) -164% 53.5 265.4 (79.8) 155.3 Interest expense (9.8) (9.0) 9 7% (37.2) (39.9) (6.8) (35.2) In lineInterest & invt inc 2.1 1.9 9 12% 8.1 8.0 1.9 6.3 Associates' contrib 89.4 110.5 (19) 177% 171.8 159.3 7.8 77.0 Above. Stronger associate's income, includes reval gains.Exceptionals 101.5 72.5 - -42920% 103.9 72.8 42.7 2.4 Revaluation gain on investment properties, FX gains.Pretax profit 165.0 183.4 (10) 210% 300.2 465.7 (35.5) 205.8 Above. Stronger associate's income, includes reval gains.Tax (15.9) (3.7) 328 151% (37.0) (58.0) (36.3) (39.1) Tax rate (%) 9.6 2.0 -19% 12.3 12.5 (1.1) 19.0 Minority interests (8.6) (12.1) (29) 87% (21.1) (36.3) (42.0) (29.5) Net profit 140.5 167.5 (16) 232% 242.2 371.4 (34.8) 137.2 Above. Stronger associate's income.Core net profit 39.1 95.1 (59) -8% 138.3 298.6 (53.7) 134.8 EPS (cts) 17.7 21.1 (16) 232% 30.5 46.8 (34.8) 17.3 Core EPS (cts) 4.9 12.0 (59) -8% 17.4 37.6 (53.7) 17.0 In line. FY12: 103% of full year.


Technology Components SINGAPORE August 25, 2012


Turning soft again The outlook appears to be weakening quickly, and we expect core earnings to resume yoy growth only in 4QFY13 on the back of a low base and the commencement of a few new programmes. This in turn may cap its share price performance. 4QFY12 core earnings were 32% below consensus and our estimate on lower-than-expected sales and GP margin. Full-year was 10% below. We lower our sales and profit forecast for FY6/13-14 and introduce FY6/15 estimate. Downgrade to Neutral and cut our target price, still based on 1.8x P/BV (industry average) as there are limited near-term catalysts.

Disappointing 4QFY12 Sales dipped 2% yoy but improved 4% qoq to US$172m, lower than our assumption of US$176m due to a sharp contraction in the consumer electronics (CE) segment. GP margin contracted 1.1% pts yoy but recovered 50bps qoq to 16.5% in 4QFY12 (50bps below our estimate). As a result of the lower margin and sales, pretax profit fell 24% yoy and 1% sequentially. Core PATMI was down 35% yoy and 17% qoq. It declared a final dividend of 2.2 Scts. With its interim dividend of 2.3 Scts, total dividend for FY6/12 amounted to 4.5 Scts, down from 5.5 Scts a year ago due to the drop in

PATMI. Payout ratio of 54-55% is still ahead of its targeted 50%. Cash flow remains strong, generating US$22m FCF, ending the year with 0.1x net gearing (0.17x in end-Mar).

Cautious tone The management sounded cautious in the post results briefing vs. three months ago, as the company is experiencing weaknesses in most product segments in the September quarter due to the uncertain economic environment. As a result, we believe Amtek is likely to experience a sub-seasonal sales growth in the seasonally stronger half this year. It is also seeing a push back in new product introduction from 4Q12 to 1Q13 for some customers.

Decent yield to support share price for now Despite its dismal near-term earnings outlook, we see its sustainable yield to lend support to its downside.

CIMB Analyst

Jonathan Ng


Amtek Engineering 4QFY12 RESULTS NOTEAMTK SP / AMEL.SI Current S$0.63 SHORT TERM (3 MTH) LONG TERM


US$272.0m US$0.49m 25.0% Previous Target S$0.79 S$340.2m S$0.61m 543.2 m shares Up/downside 5.6%

Conviction

Share price info


Relative 2.5 -13.6 -15.3

Absolute 4.2 -3.9 -3.1


Metcom Group Hldgs 28.3

Standard Chartered 29.9

Results comparisonFYE Jun (US$ m) 4QFY12 4QFY11 yoy % qoq % 4QFY12 4QFY11 yoy % Prev.

chg chg Cum Cum chg FY12F CommentsRevenue 172.3 175.8 (2.0) 4.1 675.1 681.6 (1.0) 679.1 2% below, sharper-than-expected drop in CE segmentOperating costs (155.5) (155.1) 0.2 4.9 (606.0) (597.0) 1.5 (607.1)EBITDA 16.8 20.7 (18.7) (2.4) 69.1 84.6 (18.3) 72.0 15% below, higher opex ratio due to lower-than-expected salesEBITDA margin (%) 9.8 11.8 10.2 12.4 10.6 1.4% pts beolowDepn & amort. (5.5) (5.4) 2.7 0.8 (22.1) (21.7) 2.1 (22.8) 11% belowEBIT 11.3 15.3 (26.2) (3.9) 46.9 62.9 (25.4) 49.2 Interest expense (1.6) (1.8) (8.3) 2.5 (6.7) (7.7) (13.6) (6.7) 4% below, lower bank borrowingsInterest & invt inc 0.4 1.4 (72.8) 112.8 2.2 5.6 (59.7) 2.7 Associates' contrib 0.4 0.1 378.0 157.4 1.6 0.3 375.9 1.5 Exceptionals (0.3) (1.7) (81.3) nm 0.1 (1.4) 103.9 0.5 Pretax profit 10.1 13.2 (23.5) (1.1) 44.2 59.7 (26.0) 47.1 23% belowTax (1.1) (2.9) (62.3) (46.4) (8.1) (11.6) (30.2) (9.6) 58% below, $2.3m over provision in previous yearTax rate (%) 10.8 21.9 18.4 19.5 20.5 Minority interests (0.4) (0.7) (50.9) 1.1 (2.4) (2.8) (13.1) (2.5) Net profit 8.7 9.6 (9.8) 10.6 33.6 45.2 (25.7) 35.0 Core profit 6.7 10.3 (35.3) (17.4) 30.8 45.6 (32.4) 34.4 32% below excluding tax writeback, forex swing and exceptionalsEPS (US cts) 1.60 1.77 (9.8) 10.6 6.19 8.33 (25.7) 6.44 Core EPS (US cts) 1.23 1.90 (35.3) (17.4) 5.68 8.40 (32.4) 6.34


IT Services HONG KONG August 19, 2012


Placed on hold 1H12 net profit missed our forecast by 23% and consensus by 28% due to weaker Professional Service Business (PSG) numbers and rising labour costs. We see few positive catalysts in 2H12, but expect the resumption of overall IT spending in FY13 once the economy improves. 1H EPS accounted for 31% of our FY12 forecast. We cut FY12-14 EPS and target price, now re-pegged to 0.6x PEG, in line with its closest peers (from 12x, historical average P/E). Downgrade from Outperform to Neutral as growth appears to have been delayed to FY13. Risks to our downgrade are a 2H increase in telco capex should 4G licenses be issued.

IT spending slowed Revenue grew 24% yoy to Rmb1.17bn driven by the Outsourcing Services Business (OSG) segment which surged 30.3% yoy. Gross profit margin fell 1.9%pts yoy to 30.7% in 1H12 due to rising labour costs. Non-GAAP net profit was flat at Rmb59.7m while Non-GAAP EPS dropped 23.9% yoy due to new shares issued to Hony Capital and conversion of preferred shares by Microsoft.

New customers added Active customers decreased from 855 in Dec 2011 to 727 in Jun 2012,

reflecting reduced IT spending in 1H12. Of this total, 156 were new customers (vs. 147 in 1H11). Customers with service revenue over Rmb6m decreased from 58 at Dec 2011 to 56 at Jun 2012.

Employees increase ChinaSoft had altogether 17,053 employees at Jun 12 (vs. 12,476 at Jun 11, up 37% yoy and 18% hoh).

Longer term still positive We maintain a positive view on ChinaSoft for the longer-term, on the back of more rapid earnings growth in FY13-14 thanks to strong order demand from strategic partners like the Legend group, Microsoft, and Huawei. Gross margin should also improve in the next few years, despite rising wages, as the company moves up the IT services value chain. Given the strong clientele, we believe ChinaSoft will continue to gain market share in the IT services and outsourcing industry.

CIMB Analyst

Bertram Lai


Ray Kwok


ChinaSoft International 1HFY12 RESULTS NOTE354 HK / 354.HK Current HK$1.79 SHORT TERM (3 MTH) LONG TERM


US$381.1m US$0.28m 68.8% Previous Target HK$2.76 HK$2,956m HK$2.18m 1,652 m shares Up/downside -9.5%

Conviction

Share price info


Relative 3.1 -16.6 -34.3

Absolute 6.5 -11.8 -35.2


Legend Holdings Limited 16.7

Chen Yuhong (Chairman) 7.6

Far East Holdings International

7.0

Results Comparison

FYE Dec (Rmb m) 1HFY12 1HFY11 yoy % 2HFY11 hoh % Prev. Commentschg chg FY12F

Revenue 1,173.5 945.6 24.1 1,298.2 -9.6 3,095 5% lower than our forecast due to slow growth on PSGOperating costs (1,050.1) (836.9) 25.5 (1,159.7) -9.5 -2,838.6 Overall cost remained managableEBITDA 123.4 108.7 13.5 138.4 -10.8 256 GP margin squeezed by rising labour costEBITDA margin (%) 10.5 11.5 10.7 8.3Depn & amort. (45.2) (42.3) 7.0 (44.3) 2.1 -41.7 In line.EBIT 78.2 66.5 17.6 94.1 -16.9 214Interest expense (14.3) (10.6) 34.9 (13.3) 7.0 -36.1 In line.Interest & invt inc 18.4 18.5 -0.9 27.5 -33.2 60.2 In line.Associates' contrib 0.3 1.4 -81.5 1.2 -78.9 2.0Exceptionals 0.0 (53.1) NM 18.4 NM 0.0 No loss from FV of redeemable convertible perf shs.

Pretax profit 82.5 22.8 262.8 127.9 -35.5 240Tax (17.1) (15.2) 12.4 (14.4) 18.8 -28.8 In line.Tax rate (%) 20.7 66.9 11.2 12.0Minority interests (5.7) (0.9) 561.2 (9.6) -40.6 -18.4

Net profit 59.7 6.7 795.7 103.9 -42.5 193Core net profit 59.7 59.7 0.0 85.5 -30.2 193.0 Miss our forecast by 23% and lower than consensus 28%EPS (Rmb cts) 3.65 0.54 581.8 7.15 -48.9 11.71Core EPS (Rmb cts) 3.65 4.80 -23.9 5.88 -37.9 11.71


REIT SINGAPORE August 23, 2012


New local tourism proxy FEHT stands out among hospitality trusts in Singapore for its pure local exposure and potential for improved yields. It has one of the strongest acquisition pipelines among the hospitality trusts, offering growth visibility all the way till 2016. Its offer price of S$0.93 translates to yields of 6.0-6.3% for FP12-FY13 and 1x P/BV. This is priced near the forward yields of 6.0-6.2% and 1.2x P/BV for its closest peer, CDLHT, previously the main liquid proxy for the buoyant local tourism industry.

New proxy After its listing on 27 Aug, FEHT will be the first and only Singapore-focused hotel and serviced residence hospitality trust listed locally. Prior to this, CDLHT was the chief proxy for the buoyant local tourism industry. FEHT’s listing will provide an alternative. FEHT stands out for its pure local exposure, room for organic growth through improved yields and ROFR pipeline from its sponsor. Its positioning and asset locations are arguably not as strong as CDLHT’s, though this could present upside from improved yield management and asset enhancement.

Strongest local acquisition pipeline

FEHT has one of the strongest local acquisition pipelines among locally-listed hospitality trusts. These include ROFR to seven local assets (three hotels and four residences) at a time when accretive third-party assets are hard to find. This pipeline provides acquisition visibility all the way until 2016. Acquisitions could reinforce FEHT’s local hospitality positioning.

Priced near closest peer FEHT’s shareholding structure is tight with its sponsor holding 52/56% stakes (depending on whether the over-allotment option is exercised) and cornerstone investors holding another 23.5%. The institutional offering has been over 30x subscribed, closing at S$0.93, the top end of its pricing range. At pro-forma yields of 6.0-6.3% for FP12-FY13 and 1.0x P/BV, FEHT is priced near its closest peer, CDLHT, which trades at 1.2x P/BV and forward yields of 6.0-6.2%, assuming 90% payouts.

CIMB Analyst

Tan Siew Ling

T +65 6210 8698 E [email protected]

Donald Chua

T +65 6210 8606 E [email protected]



Far East Hospitality Trust NOT RATEDFEHT SP

Offer price S$0.93

Market Cap Avg Daily Turnover Free Float Target N/A

US$1,198m US$-m 44.0% Previous Target N/A S$1,492m S$-m 1,604 m shares Up/downside N/A

Conviction

Shareholding & other details: Major shareholders: % held Far East Organisation 52/56% AIA 3.7% APG 3.4% Indicative timetable: Closing date for public offer 23-Aug, 12nn Commence trading on a “ready” basis 27-Aug, 2pm

Financial SummaryDec-09A Dec-10A Dec-11A Dec-12F* Dec-13F**

Gross Property Revenue (S$m) 74 93 104 50 125 Net Property Income (S$m) 65 84 95 45 113 Net Profit (S$m) 57 56 66 51 84 Distributable Profit (S$m) 47 65 76 37 94 Core EPS (S$) 0.04 0.04 0.04 0.03 0.05 Core EPS Growth -0.4% 17.9% -23.1% 64.0%FD Core P/E (x) 26.38 26.48 22.46 29.21 17.81 DPS (S$) 0.03 0.04 0.05 0.02 0.06 Dividend Yield 3.15% 4.37% 5.07% 2.49% 6.27%Asset Leverage 30.4% 30.4% 30.4% 30.4% 30.4%BVPS (S$) 0.93 0.93 0.93 0.93 0.93 P/BV (x) 1.00 1.00 1.00 1.00 1.00 Recurring ROE 3.8% 3.8% 4.4% 3.4% 5.6%% Change In DPS Estimates

* & **: FORECASTS ACCORDING TO FEHT PROSPECTUS; FP 2012: 1 AUG 2012 – 31 DEC 2012

SOURCE: CIMB, FEHT PROSPECTUS

Retail HONG KONG August 23, 2012


Working its way out of the soup Recovery remains an uphill battle, but with earnings likely having troughed in 1H12 and the last of the difficult yoy comparisons with pre-soup incident levels over in July, Ajisen should be on a stronger footing to rebuild in 2H and 2013. 1H earnings came in at only 22% our and 20% of consensus’ estimates for the full-year due to worse-than-expected operating deleverage. Reduce earnings and price target by 18% (still based on 25x FY EPS or historical average) but maintain Outperform as FY12 should be earnings trough, with sales and margins expected to improve in FY13.

Margins hammered Topline was only 1% below our estimates but earnings missed by 45% as EBIT margins came in at only 2.7% or 190bps below our expectation. Gross margins fell 270bps yoy to 65.8% (50bps below expectation) but more damaging was operating deleverage (140bps worse than expected) from staff, rental, depreciation and other opex, which went up 18% yoy even as topline fell 9% (dragged down by the -25% SSSG in China). Only 10 new stores were opened in 1H, bringing the total

network size to 672 stores, as management shifted focus from expansion to driving profitability.

Tough retail environment… The operating environment remains difficult in the near term due to soft retail spending, and peers such as Yum!, McDonald’s, and Starbucks have all seen SSSG slowdown in China since 1Q12. Ajisen’s July SSSG in China remained stalled at -25% for a third consecutive month.

…but worst should be over However, comparing sales starting from August against a low-base from last year, we think the company has probably passed the trough in its operational performance. We look for 2H SSSG to improve to 8% in China and flat in HK. Moreover, Ajisen’s balance sheet remains clean, with only 2% debt/cap and $1.50 net cash per share. We would accumulate the stock on weakness.

CIMB Analyst

Gloria Tsuen, CFA, CMT


Ajisen (China) Holdings Ltd 1HFY12 RESULTS NOTE538 HK / 538.HK Current HK$5.27 SHORT TERM (3 MTH) LONG TERM



Conviction

Share price info


Relative -2.2 -32.8 -47.6

Absolute -0.9 -28.3 -45.5


Ms. Poon Wai 46.5

Mr. Yin Yibing 2.6

Mr. Katsuaki Shigemitsu 2.9


Personal Products HONG KONG August 20, 2012


Turning point emerges We believe the post-1H results rally (+10%) marks the beginning of outperformance as we saw well-executed strategies that should lead to a structural and fundamental improvement in the next 3 years. We see a 2H earnings recovery before its full potential is unleashed in 2013. Goodbaby International’s 1H net profit of HK$100m (-12% yoy) was within expectations at 53% of our full year estimate. We keep our FY12-14 earnings forecasts and SOP-based price target of HK$3.0 unchanged. Strong earnings recovery (+40% yoy) in 2H would be a near-term catalyst. Maintain Outperform.

Well executed 1H Overall, we believe 1H results show good progress in the implementation of a number of strategies including: 1) product diversification (non-strollers sales +28.7% yoy vs. strollers +6.6%), 2) further deepening of its specialty maternity network in China, with the no. of in-depth distribution management system POS at 10,061 (+44% YTD), 3) cost cutting initiatives with outsourced accessories rising to 51% and reduced frontline production staff to 12,248 (-14% yoy), and 4) improved working capital management with cash conversion cycle reduced to 25 days (1H11: 35).

Strong 2H recovery ahead We expect GB to post a strong earnings recovery in 2H (+40% yoy) given the low base in 2H11 and lower input costs. Based on its order book trend, GB expects to maintain double-digit sales growth in 2H for the overseas market, while it is unlikely to incur FX losses in 2H as the company has made a preemptive provision of HK$7.2m.

Full potential to be unleashed in 2013 We believe GB’s proactive sales strategy is a positive development that will structurally improve both its margins and returns profile. The impact from its customer diversification, that could include a potential major new US client, will likely be most noticeable in 2013. This fundamental shift is likely to bring outsized returns in the coming years, as reflected in today’s post-results rally (+10%).

CIMB Analyst

Larry Cho


Goodbaby International 1H12 RESULTS NOTE1086 HK / 1086.HK Current HK$2.03 SHORT TERM (3 MTH) LONG TERM


US$261.7m US$0.43m 74.1% Previous Target HK$3.00 HK$2,030m HK$3.67m 1,000.0 m shares Up/downside 47.8%

Conviction

Share price info


Relative 8.5 -12.1 -26.4

Absolute 10.9 -6 -22.8


Song Zhenghuan 25.9

Results Comparison

FYE Dec (HK$ m) 1HFY12 1HFY11 yoy % hoh % Prev. Comments

chg chg FY12F

Revenue 2,311.1 1,970.6 17.3 17.3 4,626 China/North America/Europe/Other overseas market +34/18/10/-1%, respectively

Operating costs (2,202.1) (1,877.4) 17.3 617.0 (4,460.9)

EBITDA 173.7 178.6 -2.7 74.2 318

EBITDA margin (%) 7.5 9.1 6.9

Depn & amort. (47.1) (36.0) 30.8 15.9 -88.6

EBIT 126.6 142.6 -11.2 114.3 229 Negatively impacted by loss from forward currency contracts of HK$11.3m

Interest expense (9.0) (4.9) 85.8 33.9 -9.5

Interest & invt inc 2.2 1.6 32.9 3.9 3.3

Associates' contrib 0.0 0.0 n.a. n.a. 0.0

Exceptionals 0.0 0.0 n.a. n.a. 0.0

Pretax profit 119.8 139.4 -14.1 120.0 223

Tax (19.0) (24.0) -20.6 -342.0 -33.4

Tax rate (%) 15.9 17.2 15.0

Minority interests (0.2) (0.9) -75.3 -248.7 -0.8

Net profit 100.5 114.5 -12.2 60.9 188.5 Profit from core operations (before other income / expense items) increased by 27.1% yoy

Core net profit 100.5 114.5 -12.2 60.9 188.5

EPS (HK cts) 0.10 0.11 -12.2 60.9 0.19

Core EPS (HK cts) 0.10 0.11 -12.2 60.9 0.19 SOURCE: CIMB, COMPANY REPORTS

CIMB Securities Ltd. has had an investment banking relationship with Man Wah Holdings within the preceding 12 months. CIMB Securities Ltd. has an investment banking relationship with Prince Frog International Holdings Ltd and expects to receive or intends to receive compensation for investment banking services from the subject co in the next 3 months.



Resilient 1H performance Hengdeli’s resilient 1H results bear testament to its defensive qualities on the back of its mid-range focus and exposure to lower-tier cities. Despite longer inventory days and gearing level, its gross margin expanded in 1H, highlighting the health of the industry. Hengdeli’s 1H core earnings of Rmb430m (-3% yoy) were in line with our estimate (54% of our full-year forecast). We increase our net FY12 EPS estimate by 16% to factor in disposal gains but lower our FY13-14 numbers due to higher interest cost. Maintain Outperform and price target, based on 11.8x CY13 P/E (1SD below mean).

Resilient 1H results Hengdeli reported 1H net profit of Rmb563m (+26% yoy). Recurring net profit was down 3% yoy as lower-than-expected sales growth (+6% yoy) was compensated for by a better-than-expected gross margin (+1% pt yoy). EBIT growth of 7% yoy was largely in line. Meanwhile, the increased gearing from 7% in FY11 to 33% in 1H12 led to higher net interest expense (+152% yoy). We anticipate lower gearing by year-end as management targets to achieve positive OCF in FY12. Although the longer inventory days (195 in 1H12 vs. 170 in 2011) are a concern, the

company has lowered its purchase orders since July while SAP implementation in Sep should further optimise its operations.

Defensive qualities shown Mid-range watch sales rose 24% yoy in 1H12 vs. -2.4% yoy for the high-end segment. Meanwhile, sales from tier-2 and -3 cities increased by mid-single digits and +20%, respectively, in 1H12 vs. -10% in tier-1 cities. We believe Hengdeli’s defensive qualities on the back of its mid-range focus and lower-tier exposure make it the most resilient play within the space.

Inflection point in 4Q Sales momentum in Jul and Aug has stabilised compared to 2Q, suggesting that the share price could bottom out in 3Q before re-rating with a 4Q recovery. We maintain our long-term bullish view on China luxury consumption and investors should view the current cyclical downturn as a buying opportunity.

CIMB Analyst

Larry Cho


Hengdeli Holdings 1H12 RESULTS NOTE3389 HK / 3389.HK Current HK$2.15 SHORT TERM (3 MTH) LONG TERM


US$1,217m US$4.02m 49.3% Previous Target HK$3.30 HK$9,444m HK$31.20m 4,396 m shares Up/downside 53.5%

Conviction

Share price info


Relative 1.1 -18.8 -42

Absolute 3.4 -12.6 -38.4


Cheung Yu Ping 35.7

Swatch Group 9.1

LVMH Group 5.9

Results Comparison

FYE Dec (Rmb m) 1HFY12 1HFY11 yoy % hoh % Prev. Comments

chg chg FY12F

Revenue 5,750 5,407 6.3 -3.7 13,177 Below - China +9% (Mid end +24%); HK - 2%; Wholesale +11%

Operating costs (5,072) (4,764) 6.5 -7.0 -11,963.3 Gross margin expanded by 1pt yoy

EBITDA 901 726 24.1 60.8 1,354

EBITDA margin (%) 15.7 13.4 16.7 66.9 10.3

Depn & amort. (43.5) (38.2) 13.9 18.3 -80.4

EBIT 733.6 687.8 6.7 40.2 1,274 Inline at operating level

Interest expense (135.8) (71.1) 91.0 26.7 -193.7

Interest & invt inc 30.8 29.3 4.8 -49.2 96.2

Associates' contrib 10.1 (2.2) n.a. n.a. 0.0 Ming Fung contribution

Exceptionals 132.5 3.0 4293.1 80.5 0.0 Include Rmb97m disposal gain of Omas

Pretax profit 771.1 646.9 19.2 39.9 1,176.4

Tax (157.5) (146.7) 7.4 18.3 -274.8

Tax rate (%) 20.4 22.7 -9.9 -15.4 23.4

Minority interests (51.0) (52.2) -2.4 -0.3 -101.5

Net profit 562.7 447.9 25.6 53.3 800.1

Core net profit 430.2 444.9 -3.3 46.5 800.1

EPS (Rmb cts) 12.79 10.19 25.6 53.3 18.20

Core EPS (Rmb cts) 9.78 10.12 -3.3 46.5 18.20


CIMB Securities Ltd. has an investment banking relationship with Prince Frog International Holdings Ltd and expects to receive or intends to receive compensation for investment banking services from the subject co in the next 3 months.

Technology - Others HONG KONG August 21, 2012


Sting like a butterfly Kingdee crashed to Rmb210m losses in 1H12, even worse than our Rmb39m profit forecast which was already the lowest in the market. The culprit was a revenue reversal after doubling over two years. We think that this may be more than just a slowdown. Worryingly, management seems unable to control costs. We reiterate our counter-consensus Underperform call and caution against bottom fishing at this stage of the cycle. Our target price remains based on 1.2x PEG, in line with its international peers. We leave estimates unchanged ahead of this morning’s briefing.

More than slowing sales? Revenue pulled back 8% yoy, with software down 22% yoy but services still rallying 12% yoy. After growth of 58% yoy in 2H10 and 46% yoy in 1H11, the sudden vacuum in demand hints at a fundamental issue with either sales channels or IT spending, rather than just a normal slowdown. Sales of the largest contributor K/3 fell 17% yoy, with KIS faring much worse at -36% yoy and other software at -83% yoy. EAS was relatively more resilient, falling just 3% yoy. We are concerned that the sudden and unprecedented contraction in sales is a symptom of franchise-damaging business restructuring rather than just SMEs

pausing IT capex.

Overheated cost base bubbled higher As a result of greater contribution from services, gross margin declined 8.0% pts yoy to 68.6%. Despite the contracting topline and management purporting to control costs since 2H11, growth of all expenses outpaced revenue, with selling costs up 22% yoy, admin costs up 14% yoy and R&D up 11% yoy. After more than two years of expense growth outstripping revenue growth, we think that management may continue to struggle to make the necessary changes.

Balance sheet deteriorated From a net cash position at end-2011, Kingdee slipped into 19% net gearing at end-1H12, with interest expenses more than tripling to Rmb20m in 1H12. Note issuance in July a few days before the profit warning may limit further cheap funding.

CIMB Analyst

Bertram Lai


Kingdee Int'l Software 1HFY12 RESULTS NOTE268 HK / 0268.HK Current HK$1.20 SHORT TERM (3 MTH) LONG TERM


US$389.6m US$1.78m 56.0% Previous Target HK$1.02 HK$3,022m HK$13.80m 2,518 m shares Up/downside -15.0%

Conviction

Share price info


Relative 24 -17.3 -66.5

Absolute 26.3 -11.1 -62.9


Shao Chun Xu (Chairman) 30.4

Lehman Brothers 3.9

IBM 3.9

Results comparisonFYE Dec (RMB m) 1HFY12 1HFY11 yoy % 2HFY11 hoh % Prev.

chg chg FY12F CommentsRevenue 780 844 (7.6) 1,178 (33.8) 2,316 Below: Software -22% yoy, Services +12% yoyOperating costs (1,064) (884) 20.3 (1,346) (20.9) (2,492) Below: GM 68.6% -8.0%pts yoyEBITDA (284.0) (39.9) 612.0 (167.2) 69.8 (176.0) Below: SG&A 107.3% +24.1%pts yoyEBITDA margin (%) (36.4) (4.7) (14.2) (7.6) Below: -31.7% pts yoyDepn & amort. (17.4) (15.3) 14.0 (12.7) 37.2 (37.5) EBIT (301.4) (55.2) 446.4 (179.9) 67.5 (213.5) Below: EBIT margin -38.7%, -32.1%pts yoyInterest expense (20.1) (6.1) 227.5 (6.2) 222.6 (27.0) Below: debt increased 3-foldInterest & invt inc 96.6 112.7 (14.3) 184.2 (47.6) 326.4 Below: Lower VAT rebate and government grantAssociates' contrib - - NM - NM - Exceptionals - 78.0 (100.0) 53.9 (100.0) - Absence of revaluation gain on investment propertiesPretax profit (224.9) 129.4 (273.8) 52.0 (532.2) 85.9 Tax (0.9) (8.8) (89.7) (19.5) (95.4) (13.4) Tax rate (%) (0.4) 6.8 37.5 15.6 Minority interests 15.2 1.9 684.7 (10.1) NM (11.5) Net profit (210.6) 122.6 (271.8) 22.4 NM 61.0 Core net profit (210.6) 49.6 (524.8) (28.1) 649.1 61.0 Below: CIMB forecast Rmb39m net profitEPS RMB cts (8.4) 4.9 (271.6) 0.9 NM 2.4 Core EPS RMB cts (8.4) 2.0 (524.4) (1.1) 649.0 2.4




Moving in the right direction Although PF’s 1H results appear to be stronger than expected, we deem it in line, as its A&P expenses are backend-loaded to 2H. Its core brand continued to deliver but non-core brands disappointed. PF’s new investment phase should lead to slower but more sustainable growth. 1H net profit, at 44% of our full-year forecast, was 10% above our expectations, largely due to lower A&P expenses that have now been backend-loaded to 2H. We maintain our EPS and HK$3 price target, based on 10x CY13 P/E (35% discount to peer average due to its weaker position in tier-1 cities). Maintain Outperform.

Strong 1H with A&P backend-loaded to 2H PF’s 1H net profit of Rmb102m (+46.8% yoy) came in 10% above our forecast mainly due to its backend- loaded A&P. Management has maintained its full-year A&P-to-sales guidance of 15% (vs. 8.6% in 1H) as it continues to build its 1st tier presence and steps up its marketing campaign in 2H. As such, we forecast earnings growth to decelerate from 46.8% yoy in 1H to 14.0% yoy in 2H, and maintain our full-year earnings forecast despite the strong 1H results.

Non-core brands spoil the

party We believe 1H’s key disappointments were the non-core brands, with sales of Shuangfeijian and Shenhuuixi/ OEM down 20% and 41% yoy, respectively. However, its core Frog Prince brand continued to perform well with sales increasing by 26% yoy, while gross margins for skin care and body & hair care products expanded by 2.45% pts and 3.2% pts yoy, respectively. In addition, we continue to see good traction for its high-end KA line products, with sales rising 127% yoy and accounting for around 9% of sales in 1H (vs. <5% in FY11).

Thesis intact; maintain Outperform We believe the company is moving in the right direction in transforming into a real national brand. This would likely result in slower but more sustainable growth, and serves as a catalyst for higher multiples in the coming years. Maintain Outperform.

CIMB Analyst

Larry Cho


Prince Frog International 1H12 RESULTS NOTE1259 HK / 1259.HK Current HK$2.45 SHORT TERM (3 MTH) LONG TERM



Conviction

Share price info


Relative 6.7 -33 -1.3

Absolute 12.4 -25.8 0


Prince Frog International 30.7

Jinling Xie 24.5

Results Comparison

FYE Dec (HK$ m) 1HFY12 1HFY11 yoy % hoh % Prev. Comments

chg chg FY12F

Revenue 582.0 551.3 5.6 -18.9 1,577 Sales of children’s personal care products increased by 29% yoy

Operating costs (464.0) (461.3) 0.6 -17.4 -1,304.8

EBITDA 125.0 93.1 34.3 -22.9 292

EBITDA margin (%) 21.5 16.9 18.5

Depn & amort. (5.7) (2.8) 105.6 16.2 -18.0

EBIT 119.3 90.3 32.2 -24.2 274 Above on better than expected gross margin and back end loaded A&P

Interest expense (0.9) (1.8) -49.2 -65.6 -1.9

Interest & invt inc 3.5 0.2 n.m. 13.8 6.1

Associates' contrib 0.0 0.0 n.a. n.a. 0.0

Exceptionals 0.0 0.0 n.a. n.a. 0.0

Pretax profit 121.9 88.7 37.4 -6.1 279

Tax (19.7) (19.1) 3.1 27.6 -46.8

Tax rate (%) 16.1 21.5 -25.0 16.8

Minority interests 0.0 0.0 n.a. 0.0

Net profit 102.2 69.6 46.8 -10.6 232

Core net profit 102.2 69.6 46.8 -28.2 231.7

EPS (HK cts) 10.14 9.28 9.2 -10.6 22.99

Core EPS (HK cts) 10.14 9.28 9.2 -28.2 23.0


Auto Parts HONG KONG August 22, 2012

IMPORTANT DISCLOSURES. INCLUDING ANY REQUIRED RESEARCH CERTIFICATIONS, ARE PROVIDED AT THE END OF THIS REPORT. CIMB Securities (HK) Ltd. has had an investment banking relationship with Geely Automobile Holdings Ltd within the preceding 12 months.

Designed by Eight, Powered by EFA

Strong cost control mitigates downward pressure on margins Despite a tough operating environment caused by sector-wide discounting from OEMs, Minth’s cost control was impressive. However, we see limited upside with sluggish European auto sales standing as a roadblock to export profitability. Minth’s 1H net profit of Rmb436m (+12% yoy) was within expectations at 52% of our full-year estimate. We tweak our opex forecasts, which nudges up our EPS estimates and target price, based on 7.5x CY13 P/E (7.2x previously), 1SD below the 3-year sector average. Still a Neutral in view of a lack of catalysts.

Slippery slope for margins At 52% of our FY12 estimate and 50% of consensus, Minth’s 1H results were in line. The deviation came from lower operating costs. The gross margin continued to face pressure in 1H12, sliding 1% pt to 34.8% due to lower ASPs caused by sector-wide discounting amongst OEMs, which led to downward pricing pressure for upstream suppliers. We believe this trend will persist in 2H12 given the ongoing inventory glut and expect the gross margin to ease another 0.5% pt in FY12.

Impressive cost control The EBITDA margin rose 0.5% pts yoy to 27.4% due to lower operating costs. S&D costs formed 2.7% of total revenue, down 1% pt from 3.7% in 1H11 given management’s new logistics integration policies. Also commendable are Minth’s efforts to keep labour costs in check. Admin expense formed 7.5% of the topline, down 0.3% pts from 7.8% in 1H11. Hence, we cut our FY12-14 operating expense forecasts by 12-14%.

Export profitability dampened by Europe One of the key catalysts for Minth is strong export growth into higher-margin markets overseas. However, European export profitability took a tumble due to slow auto sales with the gross margin for this segment falling 13.7% pts to 30.6% in 1H12.

CIMB Analyst

Cheam Tze Shen


Minth Group 1H12 RESULTS NOTE425 HK / 425.HK Current HK$8.10 SHORT TERM (3 MTH) LONG TERM



Conviction

Share price info


Relative -1.8 -17.2 -22.5

Absolute 0.5 -11 -18.9


Mr. Chin Jong Hwa 40.5

Capital Group Companies Inc

7.9

Cap Research Global Investors

6.0

Results comparsionFYE Dec (Rmb m) 1HFY12 1HFY11 yoy % hoh % Prev. Comments

chg chg FY12F

Revenue 2,119.9 1,810.6 17.1 2.0 4,553.4 Slightly below due to lower ASPs

Operating costs (1,539.6) (1,324.0) 16.3 (0.7) (3,478.1) Below; lower S&D costs with improved logistics

EBITDA 580.2 486.6 19.2 9.8 1,075.3 Above, lower S&D costs and admin expenseEBITDA margin (%) 27.4 26.9 23.6 Above

Depn & amort. (77.5) (66.1) 17.2 10.7 (152.3) In line

EBIT 502.7 420.5 19.6 9.6 922.9 Above

Interest expense (10.6) (4.3) 146.8 (7.2) (7.8)

Interest & invt inc 25.2 24.0 4.9 13.1 50.0 In line

Associates' contrib 29.4 30.2 (2.8) 27.7 62.3 In line

Exceptionals - - - - -

Pretax profit 546.7 470.4 16.2 11.0 1,027.4 Largely in line, lower operating costs

Tax (80.4) (63.4) 26.8 10.6 (138.7) Above, tax rate for subsidiaries increased

Tax rate (%) 14.7 13.5 13.5

Minority interests (30.0) (18.9) 58.9 44.4 (42.6) Increase in profit from JV

Net profit 436.4 388.2 12.4 9.3 846.2 Largely in line

EPS (Rmb cts) 40.5 36.1 12.2 9.2 78.2


Autos HONG KONG August 23, 2012

IMPORTANT DISCLOSURES. INCLUDING ANY REQUIRED RESEARCH CERTIFICATIONS, ARE PROVIDED AT THE END OF THIS REPORT. CIMB Securities (HK) Ltd. has had an investment banking relationship with Geely Automobile Holdings Ltd within the preceding 12 months Designed by Eight, Powered by EFA

Limited downside despite a tough outlook ahead Despite a tough operating environment with sluggish sales and higher raw material costs, management’s tight grip on operating expenses was impressive. With valuations at historical lows, we see limited downside supported by its strong net cash position and dividend yield. The 1H net profit was below our expectations at 39% of our and 38% of consensus estimates. Maintain Outperform, supported by its strong net cash position and dividend yield but cut our sales volumes and EPS forecasts. We now peg our valuation to Qingling’s 3-year historical average P/B ratio of 0.6x (1.0 previously) which reduces our target price.

Light truck segment posts a drag on profits Qingling’s 1H12 net profit declined 19% yoy to Rmb 158m, dragged down by a drop in sales of 19% to 31k units. The result is below expectations and the reason for the deviation was sluggish sales of light trucks where revenue dropped 32% to Rmb1.3bn. Taking this into account, we cut our sales revenue forecast for this segment by 40% to Rmb3bn.

Keeping costs in check

One redeeming factor from this set of results is management’s strong cost control. Although gross margin dipped 0.7% pt yoy to 12.6% in line with our forecasts, selling costs dropped significantly to form 6.3% of revenue, down 1.2% pts. from 1H11. This allowed EBITDA margin to widen 1.7% pts yoy to 8.2%.

Limited downside given current trough valuations Qingling is trading at 0.5x CY12 P/B, one standard deviation below its three year historical P/B range. We believe the stock price will also be supported by its strong net cash position of HKD4.4bn, in line with current market capitalization. This should enable the company to maintain its payout ratio of 82% as it has done so for the past three years, translating into a dividend yield of 6.7%.

CIMB Analyst

Cheam Tze Shen


Qingling Motors Company-H 1H12 RESULTS NOTE1122 HK / 1122.HK Current HK$1.85 SHORT TERM (3 MTH) LONG TERM


US$592.0m US$0.93m % Previous Target HK$3.50 HK$4,592m HK$7.18m 2,482 m shares Up/downside 20.6%

Conviction

Share price info


Relative 2.1 -15.1 -21.7

Absolute 3.4 -10.6 -19.6


Qingling Group 40.1

Isuzu 20.0

Wellington Management Company,LLP

3.0

Results comparsionFYE Dec (Rmb m) 1HFY12 1HFY11 yoy % hoh % Prev.

chg chg FY12F Comments

Revenue 3,174 4,080 (22.2) (22.0) 8,885 Below, sales volume dropped 19%

Operating costs (2,913) (3,815) (23.7) (22.6) (8,304)

EBITDA 260.9 264.3 (1.3) (14.1) 580.7 Lower S&D costs

EBITDA margin (%) 8.2 6.5 6.5

Depn & amort. (150.7) (115.9) 30.0 (19.4) (283.8) In line

EBIT 110.2 148.5 (25.8) (5.6) 296.9

Interest expense - - -

Interest & invt inc 75.1 81.2 (7.5) (9.8) 179.4

Associates' contrib - - - -

Exceptionals - - - - -

Pretax profit 185.3 229.7 (19.3) (7.3) 476.3 Below, sales volume dropped 19%

Tax (27.3) (34.1) (20.0) 2.1 (69.4) Tax rate (%) 14.7 14.8 14.6

Minority interests (1.5) (3.3) (55.5) (280.4) (2.8)

Net profit 156.6 192.3 (18.6) (10.1) 404.0

EPS (Rmb cts) 6.3 7.7 (18.6) (10.1) 16.3




2H12 should still be fine 1H12 earnings were 3% ahead of consensus and largely inline with our estimates. Inventory days and margins erosions would be a concern for FY12. But we are confident that Trinity will be able to better protect margins than its peers given its multi-brand portfolio. 1H12 earnings accounted for 47% of our FY12 forecast, in line with its historical trend of 46-48%. Trinity expects 3Q12 SSSG to be in single digits, same as in 2Q12. Trinity is our sector top pick. We keep our target price of HK$7.10, based on 18x CY13 P/E, in line with its mean during the 2009 crisis when we saw a similar SSSG trend. Maintain Outperform.

Results highlight 1H12 sales grew 13.4% yoy on 6.5% SSSG (1H11: 19.7%). Operating profit edged up 1.8% yoy. Earnings grew 10% to HK$265m. Overall gross margin dropped 1.6% pt yoy to 79.2% due to more aggressive discounts. Gross margin for Greater China retail fell 4.8% pt to 73.1%, dragged by Taiwan operations. The three self- owned brands, Cerruti, Kent & Curwen and Gieves & Hawkes, accounted for 91% of total sales in 1H12, implying earnings visibility. Inventory days surged 49 days to 407 (majority from older seasons). Trinity

targets inventory days to retreat to 2H11 levels of 360-380 days.

2H12 outlook Qtd sales growth has been about the same as in 2Q12. Trinity targets single-digit SSSG for 2H12, but thinks further margin erosion is possible due to discounting. The company targets to complete negotiations with Salvatore Ferragamo (6-7% earnings projected for 2013) by end-12. We forecast 2H12 sales to grow 26% yoy to HK$1,766m, on 7.1% SSSG, and earnings to grow 9% yoy to HK$298m (Fig 4).

Still cheap, Buy Trinity trades at 15x CY13 P/E vs. 10x sector average. We think it should trade at a premium vs. its peers given: 1) margins that beat sector average, and 2) the lack of quality names in the space. At 23x 12M-forward P/E, the average since its listing, Trinity would be trading at c.HK$9.80.

CIMB Analyst

Katherine Chan


Trinity 1H12 RESULTS NOTE891 HK / 0891.HK Current HK$5.37 SHORT TERM (3 MTH) LONG TERM



Conviction

Share price info


Relative 4.4 -18.7 -30

Absolute 5.7 -14.2 -27.9


Fung Family 37.9

JP Morgan 5.0

Alkeon Capital Management 4.8

Results comparison

FYE Dec (HK$m) 1H12A 1H11A yoy chg 2H11A hoh chgPrev.

FY12F Comments

Revenue 1,367 1,206 13.4% 1,401 -2.4% 3,133 minimal ASP growthRetail revenue 1,309 1,177 11.2% 1,344 -2.6% 3,043 HK and Macau SSSG = 13.6%EU license and HK & Macau W/S sales 58 29 102.8% 57 2.4% 90

COGS (284) (232) 22.4% (272) 4.6% (661)Gross profit 1,083 974 11.2% 1,130 -4.1% 2,472Other income 30 28 6.2% 32 -5.9% 72 key items incl: mgt fee income and subsidy incomeSelling & distribution expense (608) (498) 22.0% (596) 2.0% (1,210) up mainly on higher A&P expenseAdmin expenses (209) (215) -2.5% (246) -14.8% (652) staff cost hike caused by labour shortage in tier-2 citiesOther gains 8 9 -12.9% (5) nm 5Operating profit 304 298 1.8% 315 -3.7% 688Net interest inc./(exp.) (3) 1 nm 0 nm (1)Share of profit from JCE 31 30 5.8% 33 -3.5% 62PBT 332 329 0.9% 348 -4.6% 749Income tax (67) (89) -24.9% (75) -11.0% (186)Net income 265 240 10.5% 273 -2.8% 564EPS (HK$/sh) 0.155 0.142 9.0% 0.161 -3.5% 0.324DPS (HK$/sh) 0.080 0.080 -0.3% 0.151 -47.0% 0.227


Rubber Gloves MALAYSIA August 23, 2012


Bouncing along nicely At 43% of our and consensus estimates, Kossan’s 1H earnings were in line as we expect a stronger 2H due to the downtrend in natural rubber prices. 1H glove output rose by 25% yoy and selling prices were stable. These are positive signs amidst competition due to overcapacity. Its technical rubber division also rebounded, with 1H pretax profit up 47% yoy. Our target price remains unchanged, still based on 9.2x forward P/E or a 35% discount to Top Glove’s target P/E of 14.1x. Clawing back of profits from lower input prices and a stronger performance in China will catalyse the stock. Maintain Outperform.

Stable run rates in 1H 1H revenue rose by 12% yoy due to higher output (+25% yoy, 91% utilisation) and steady selling prices (c.US$34/1,000). The natural rubber-nitrile mix is now 47%-53%. Kossan’s technical rubber division also reported higher revenue (+5% yoy) due to a rebound in the overall economy. In line with the higher sales volumes, operating costs rose by 12%. EBITDA rose by 11% due to the increased sales volumes and higher depreciation added back. Core net profit rose by 4% yoy to RM46m.

Vertical integration Kossan intends to acquire 10k ha of rubber plantation landbank in Indonesia or Myanmar. Based on Top Glove’s valuation metrics for its 30k ha acquisition in Indonesia, it could cost Kossan RM7m for the land and RM130m over eight years until the rubber trees mature.

Prefer a focused strategy We view vertical integration by a glovemaker as a negative strategic move as we believe managing and owning rubber plantations is a unique skill that is distinct from glovemaking. We believe glove contract manufacturers should instead use their limited human and financial capital to: i) deepen their distribution networks; ii) improve manufacturing processes; and iii) enhance the brand recognition of their glove products.

CIMB Analyst

Yeoh Yung-Juen CFA


Kossan Rubber Industries 2Q12 RESULTS NOTEKRI MK / KRIB.KL Current RM3.29 SHORT TERM (3 MTH) LONG TERM

Market Cap Avg Daily Turnover Free Float Target RM3.69

US$337.1m US$0.18m 35.8% Previous Target RM3.69 RM1,052m RM0.57m 319.7 m shares Up/downside 12.1%

Conviction

Share price info


Relative 4.5 -0.3 5.3

Absolute 5.1 6.5 17.5


Kossan Holdings Sdn Bhd 51.8

Kumpulan Wang Persaraan 7.6

Asian Small Companies 4.9

Results Comparison

FYE Dec (RM m) 2Q

FY122Q

FY11yoy % chg 1QFY12 qoq % chg

2QFY12 cum

2QFY11 cum

yoy % chgPrev.

FY12F Comments (yoy cum comparison)

Revenue 304.8 275.6 10.6 289.4 5.3 594.2 532.1 11.7 1,245.2 Higher output (1H volume: 5.08bn, 91% utilisation)Operating costs (262.1) (239.5) 9.4 (248.8) 5.4 (510.9) (456.9) 11.8 (1,040.6) Increased output offset lower input pricesEBITDA 42.7 36.1 18.2 40.7 4.9 83.3 75.2 10.8 204.7 Higher revenue and depreciation added backEBITDA margin (%) 14.0 13.1 6.9 14.0 (0.3) 14.0 14.1 (0.8) 16.4 Slight decrease due to lower cost efficiencyDepn & amort. (11.0) (9.0) 22.0 (10.8) 1.1 (21.8) (18.9) 15.4 (55.1) PPE of RM451m as at 30 Jun 2012EBIT 31.7 27.1 16.9 29.8 6.3 61.5 56.3 9.3 149.6 Mainly due to higher sales volumeInterest expense (1.5) (1.9) (17.5) (1.6) (6.4) (3.2) (3.9) (18.7) (9.4) Total borrowings of RM141m as at 30 Jun 2012Interest & invt inc 0.9 1.4 (33.6) 0.5 102.6 1.4 2.2 (35.8) 0.8 Cash balance of RM43m as at 30 Jun 2012Associates' contrib - - na - na - - na - None expectedExceptionals - - na - na - - na - None expectedPretax profit 31.1 26.6 16.7 28.6 8.6 59.7 54.6 9.5 141.0 Accounted for 42% of full year estimateTax (7.0) (5.4) 31.6 (6.2) 14.0 (13.2) (9.9) 33.8 (33.8) Lower than the statutory rate of 25% due toTax rate (%) 22.6 20.1 12.7 21.6 4.9 22.1 18.1 22.2 24.0 the availability of allowances and incentivesMinority interests (0.4) (0.4) 21.7 (0.5) (13.1) (0.9) (0.8) 20.0 (2.3) Better contribution from clean room glovesNet profit 23.6 20.9 12.8 22.0 7.6 45.6 43.9 3.8 104.9 Accounted for 43% of full year estimateCore net profit 23.6 20.9 12.8 22.0 7.6 45.6 43.9 3.8 104.9 Accounted for 43% of full year estimateEPS (sen) 7.4 6.5 12.8 6.9 7.6 14.3 13.7 3.8 32.8 Based on 319.7m total shares outstandingCore EPS (sen) 7.4 6.5 12.8 6.9 7.6 14.3 13.7 3.8 32.8 Excluding exceptional items


Dry Bulk Shipping MALAYSIA August 24, 2012


Buckling under the weak rates Maybulk's 1H earnings were a letdown at just 32% of our full-year estimate due to fewer hire days. Bulk earnings remained under pressure from weak freight rates and higher operating costs. We expect 2H to be equally challenging due to slower demand. On a positive note, Maybulk has remained profitable, with a strong balance sheet to weather the current crisis and expand its fleet. We remain Neutral on the stock despite lowering our target price on lower chartered-in earnings (based on an unchanged 20% discount to SOP) after slashing our EPS by 21-64% to account for the weak markets and bleak outlook.

Bulk earnings plunge Despite our expectations of improved earnings, Maybulk's profits continued to deteriorate as a result of the weak bulk market. Bulk earnings were impacted by lower freight rates, rising opex and lower margins for its chartered-in vessels. The expiry of the lucrative Tenaga COA contract in June 2011 also contributed to the 90% yoy plunge in bulk EBIT. Although Maybulk had 15 vessels in 2Q12 compared to 10 in 2Q11, Maybulk’s hire days fell slightly, due probably to fewer charter-in days or a higher number of dry-docking, maintenance or unscheduled off-hire

days. Maybulk may have also refrained from chartering in additional vessels due to low margins.

2H outlook We do not expect a swift recovery for 2H earnings as rates have deteriorated further since end-Jun. In addition to weaker demand, bulk rates were hit by the severe drought in the US and Russia as well as Indonesia’s more stringent export requirements. Given these factors and additional newbuilding deliveries, rates are likely to remain range-bound in 2H.

Net cash position Maybulk ended 1H12 with nearly RM250m (25 sen per share) net cash. We think that this makes Maybulk attractive relative to its other peers as it is able to acquire assets cheaply. As a result of weak markets and tight financing, vessel values have fallen significantly. We expect Maybulk to go on an acquisition spree over the next 1-2 years.

CIMB Analyst

Raymond Yap CFA


For information please contact Calvin Yew at

(60) 3 20849964 or [email protected]

Malaysian Bulk Carriers 2QFY12 RESULTS NOTEMBC MK / MBCB.KL Current RM1.59 SHORT TERM (3 MTH) LONG TERM


US$513.5m US$0.23m 31.0% Previous Target RM1.63 RM1,590m RM0.73m 1,000.0 m shares Up/downside -1.3%

Conviction

Share price info


Relative -3.4 -7.3 -33.1

Absolute -2.5 0 -21.7


Pacific Carriers Ltd. 34.5

Bank Pembangunan Malaysia

18.4

PPB Group Bhd 14.0

Results comparison FYE Dec (RM m) 2QFY12 2QFY11 yoy % qoq % 2QFY12 2QFY11 yoy % Prev.

chg chg Cum Cum chg FY12F CommentsRevenue 64.8 69.7 (7.0) (10.0) 136.8 154.6 (11.5) 316.3 Below. 1H revenue accounted for only 43% of our full year estimates Operating costs (58.8) (47.6) 23.5 (10.9) (124.8) (90.1) 38.5 (243.0) due to lower-than-expected hire days, despite higher number ofEBITDA 6.0 22.0 (72.9) 0.2 11.9 64.4 (81.5) 73.2 vessels in the fleet.EBITDA margin (%) 9.2 31.6 8.7 41.7 23.2 Depn & amort. (7.0) (7.0) (0.4) (4.0) (14.3) (14.1) 1.2 (31.4) In-line.EBIT (1.0) 15.0 (106.9) (22.6) (2.4) 50.3 (104.7) 41.8 EBIT loss as bulk earnings have suffered from lower freight rates,Interest expense (0.6) (0.5) 20.1 (2.8) (1.1) (1.0) 17.1 (6.1) and also due to the expiry of the highly profitable Tenaga COAInterest & invt inc (2.8) 0.2 nm (189.0) 6.5 0.6 971.8 3.2 contract in mid-2011.Associates' contrib 7.1 2.5 186.5 (41.0) 19.2 7.8 146.7 32.0 POSH contributed RM11.8m for 1H12.Exceptionals (1.8) 5.8 (131.1) (110.1) 9.9 18.8 nm - Forex loss and unrealised gain on investments.Pretax profit 0.9 23.0 (96.0) (97.0) 32.1 76.5 (58.0) 70.9 Below. Expect weaker quarters ahead as bulk rates have shownTax (0.3) (0.5) (42.3) (25.5) (0.6) (0.9) (27.3) (1.5) signs of weakness from slower demand.Tax rate (%) 0.3 0.0 0.0 0.0 0.0 Minority interests 0.2 (0.7) 134.2 140.0 0.3 (1.1) 130.3 (1.7) Net profit 0.9 21.9 (96.0) (97.1) 31.8 74.6 (57.3) 67.8 Below. Core net profit only accounted for 32% of our full-year Core net profit 2.7 16.1 (83.3) (79.5) 21.9 55.8 (60.7) 67.8 estimates due to lower hire days and weaker freight rates. EPS (sen) 0.1 2.2 (96.0) (97.1) 3.2 7.5 (57.3) 6.8 Expect 2H to be challenging as a result of slower demand forCore EPS (sen) 0.3 1.6 (83.3) (79.5) 2.2 5.6 (60.7) 6.8 bulk commodities.


Newspaper MALAYSIA August 17, 2012


Dividends shine brightest Although Star’s 1HFY12 core net profit of RM76.9m made up 43% of our forecast, we deem it in line as we expect a stronger 2H due to adex spending during the London Olympics and in the run-up to Malaysia’s upcoming general election. We keep our forecasts unchanged but raise our target price, now based on the target market 13.3x CY13 P/E (up from 13x). Star’s above-market net yield of 5.7% should support its share price in these volatile times. Maintain Outperform. We estimate that Star could pay special dividend of 69 sen (RM500m) if it takes its net gearing level up to 50%.

9 sen net DPS in 1H12 The company declared a first interim dividend of 6 sen and a special tax- exempt dividend of 3 sen, bringing YTD dividend to 9 sen, in line with our full-year estimate of 18 sen.

Cityneon drives revenue 1H12 revenue rose 1.4% yoy to RM529.4m, led by a 19,7% increase in Cityneon’s revenue (contribution from new projects). However, 1H12 EBIT for Cityneon fell 5% yoy to RM1.4m due to higher marketing and travelling costs incurred to pitch for

new projects, and higher staff cost as the unit expanded its Interior Architecture business.

Lower print, higher new media Star’s main print business segment saw its 1H12 revenue drop marginally, by 3% yoy to RM381.46m, due to lower advertising revenue. However, New Media’s 1H12 revenue increased by 26.7% yoy to RM14.88m in 1H12.

Star defensive qualities Star is our top pick in the media sector. Its sustainable net dividend yield of 5.7%, the highest in the media sector, should appeal to investors seeking refuge in defensive plays. This is backed by RM233m in net cash as at Jun 2012, for which the company has no major plans. In the event of a poor economic climate, it could also benefit from a downtrading to cheaper advertising mediums.

CIMB Analyst

Foong Wai Mun CFA


Star Publications 2QFY12 RESULTS NOTESTAR MK / STAR.KL Current RM3.18 SHORT TERM (3 MTH) LONG TERM



Conviction

Share price info


Relative -0.6 -9.6 -16

Absolute 0.3 -2.2 -5.9


MCA 42.0

EPF 12.4

AmanahRaya Trustees 8.3

Results Comparison

FYE Dec (RM m) 2Q

FY122Q

FY11yoy %

chg1Q

FY12qoq %

chg2QFY12

cum2QFY11

cumyoy %

chgPrev.

FY12F Comments

Revenue 299.4 294.3 1.8 230.0 30.2 529.4 522.3 1.4 1,197.3 1H12 print and new media revenues fell 3.4% whileOperating costs (226.2) (208.0) 8.8 (174.6) 29.6 (400.8) (369.5) 8.5 (884.6) Cityneon's revenue grew strongly by 19.7%EBITDA 73.2 86.3 -15.1 55.4 32.1 128.6 152.8 -15.8 312.7EBITDA margin (%) 24.4 29.3 24.1 24.3 29.2 -16.9 26.1 Lower newsprint offset by higher marketingDepn & amort. (13.4) (11.5) 16.4 (10.8) 23.9 (24.2) (23.4) 3.4 (52.7) expense at radio businessEBIT 59.8 74.8 -20.0 44.6 34.1 104.4 129.3 -19.3 260.0Interest expense (2.7) (2.1) 29.1 (2.7) -0.2 (5.4) (2.9) 86.6 (10.0) In line, borrowings flattish qoqInterest & invt inc 2.7 2.7 -0.6 3.1 -12.8 5.9 4.5 29.2 9.9 Above, cash fell 4% qoqAssociates' contrib (1.2) (1.0) 29.0 0.1 -984.4 (1.1) (1.0) 10.8 0.0Exceptionals (0.0) 1.3 -102.7 (0.4) nm (0.4) 0.7 -160.1 0.0 Forex loss Pretax profit 58.6 75.7 -22.7 44.8 30.7 103.3 130.6 -20.9 259.9 In lineTax (12.9) (17.9) -28.0 (15.3) -15.5 (28.2) (34.8) -19.0 (78.1)Tax rate (%) 22.0 23.6 34.1 27.3 26.6 2.4 30.0 Higher than statutory tax rateMinority interests (1.4) (2.6) -44.8 2.9 -148.3 1.5 (0.3) 538.2 (4.0)Net profit 44.2 55.3 -19.9 32.5 36.3 76.7 95.5 -19.7 177.8 Within estimatesCore net profit 44.3 54.3 -18.4 32.7 35.4 77.0 95.0 -19.0 177.8 In line, expect stronger 2H on Olympics and potentialEPS (sen) 6.0 7.5 -19.9 4.4 36.3 10.4 12.9 -19.7 24.1 general election ad spendingCore EPS (sen) 6.0 7.3 -18.4 4.4 35.4 10.4 12.9 -19.0 24.1


Rubber Gloves MALAYSIA August 21, 2012


Steady hands on the wheel At 46% of our and consensus full-year estimates, 1H core earnings were broadly in line as lower raw material costs should lead to a better 2H. In addition to expanding glove its operations in Malaysia, Supermax is venturing into North and South America. We raise our target CY13 P/E to 10.6x, still a 25% discount to our target P/E for Top Glove which has been revised upwards. Supermax remains an Outperform as we expect falling natural rubber prices and additional revenue streams to catalyse its share price.

Stable 2Q earnings growth 1H revenue remained stable (+0.3% yoy to RM481m). Higher glove sales in 2Q (+18% yoy) were offset by a 20% reduction in selling prices during the quarter, which we attribute to lower input prices (2Q: -27%) and industry capacity expansion. 1H operating costs edged down 0.9% yoy due to the decline in natural rubber prices. But we believe that overall production costs did not fall at the same rate as natural rubber prices given the company’s surgical and nitrile expansion plans as well as extra opex from process automation. The higher revenue and lower costs

led to a 6.7% rise in EBITDA to RM81m. As a result, core net profit rose by 5.5% to RM58m.

Making its mark in the US Supermax is setting up a national distribution headquarters in Chicago, Illinois. The project will be completed by 2Q13 and will cost RM20m. This will include a 90,000 sq ft warehouse and 6,000 sq ft of office space. The enhanced storage capability will enable it to carry new products to accommodate its US business growth.

Expanding to S. America Supermax is also seeking opportunities to set up manufacturing facilities for surgical and examination gloves in South America. As Brazil subjects its NR examination glove imports to a 35% import duty, setting up a manufacturing facility in Brazil will make Supermax more competitive. We will provide updates after the analyst briefing on 22 Aug.

CIMB Analyst

Yeoh Yung-Juen CFA


Supermax Corp 2Q12 RESULTS NOTESUCB MK / SUPM.KL Current RM2.13 SHORT TERM (3 MTH) LONG TERM



Conviction

Share price info


Relative -4.2 19.2 19.3

Absolute -3.6 26 29.1


Thai Kim Sim, Stanley 20.7

Tan Bee Geok, Cheryl 14.8

Koperasi Permodalan Felda 5.2

Results Comparison

FYE Dec (RM m) 2Q

FY122Q

FY11yoy % chg 1QFY12 qoq % chg

2QFY12 cum

2QFY11 cum

yoy % chgPrev.

FY12F Comments (cum yoy comparison)

Revenue 232.1 237.9 (2.4) 248.5 (6.6) 480.6 479.3 0.3 1,378.0 Higher output offset by lower selling pricesOperating costs (193.0) (200.3) (3.6) (209.4) (7.8) (399.8) (403.5) (0.9) (1,229.7) Lower natural rubber pricesEBITDA 39.1 37.6 4.0 39.1 - 80.8 75.8 6.7 148.3 Lower input cost and higher operating efficiencyEBITDA margin (%) 16.8 15.8 6.6 15.7 7.1 16.8 15.8 6.4 10.8 Improvement in operating efficiencyDepn & amort. (5.8) (7.7) (25.0) (5.8) - (11.6) (12.0) (3.9) (53.3) PPE of RM428m as at 30 Jun 2012EBIT 28.6 23.1 23.8 25.0 14.4 53.0 41.6 27.5 95.0 Decline in natural rubber pricesInterest expense (2.7) (2.2) 23.2 (2.6) 3.0 (5.3) (5.5) (4.2) (17.8) Total borrowings of RM322m as at 30 Jun 2012Interest & invt inc - - na - na - - na 17.8 Cash balance of RM102m as at 30 Jun 2012Associates' contrib 7.3 11.0 (33.2) 8.9 (17.7) 16.3 21.5 (24.2) 45.4 Distribution of gloves in Brazil, Canada and BelgiPretax profit 33.3 27.9 19.2 30.7 8.4 64.0 53.6 19.5 140.7 1H accounted for 46% of full year estimateTax (3.3) (1.3) 156.4 (2.7) 22.8 (6.0) (2.6) 132.7 (14.0) Lower than the statutory rate of 25% due toTax rate (%) 9.9 4.6 115.1 8.7 13.2 9.3 4.8 94.7 10.0 the availability of allowances and incentivesMinority interests (0.1) - na (0.0) 16.3 (0.0) - na - None expectedNet profit 30.0 26.7 12.4 28.0 7.1 58.0 51.0 13.7 126.7 1H accounted for 46% of full year estimateCore net profit 30.0 30.7 (2.3) 28.6 4.6 58.0 55.0 5.5 126.7 1H accounted for 46% of full year estimateEPS (sen) 4.9 4.4 12.4 4.6 7.1 9.5 8.3 13.7 20.7 Based on 612.1m total shares outstandingCore EPS (sen) 4.9 5.0 (2.3) 4.7 4.6 9.5 9.0 5.5 20.7 Excluding exceptional items


Property Devt & Invt MALAYSIA August 23, 2012


Vertical take-off for 1H sales UOA’s interims were in line with our expectations but beat consensus. 1H net profit made up 49% of our full-year forecast and 53% of consensus. 2H profits should be slightly stronger. It locked in RM900m new sales in 1H, exceeding the RM848m sales for the whole of 2011. We retain our forecasts, Trading Buy call and target basis of 20% discount to RNAV. UOA Dev remains our top pick in the property sector for its attractive valuations. The stock is trading at FY12-14 P/Es of 6-8x and offers 6-7% dividend yield, the highest in the sector. UOA Dev is not an Outperform due to election risks.

1H new sales of RM900m In 1H12, UOA Dev recorded around RM900m new sales, of which RM223m or 25% came from the newly launched strata-titled office space called Vertical in Bangsar South. Other major contributors included the medium-cost Le Yuan Residence in Sri Petaling (RM185m or 21%) and office space at Kencana Square (RM140m or 16%) in Glenmarie. Including two office buildings sold to Tabung Haji in Jul and ongoing sales, new sales up to end-Aug exceeded RM1.1bn, above the group’s full-year target of RM1bn. Unbilled sales stand

at RM814m. As expected, no interim dividends were proposed.

Adaptability One of the reasons for the strong new sales is UOA Dev’s ability to adapt to changing market conditions. Even in the office space market where there is a glut, Vertical is selling very well. Also, the group has spent the last two years accumulating landbank in the periphery of KL for the development of medium-cost residential properties priced around RM500k, which are in demand. This lays the foundations for strong new sales over the next few years. We believe that the strong sales are sustainable this year and next.

Rerating started Since we elevated UOA Dev to our top of our property buy list on 25 Jul, its share price has spiked up 20%. We expect the rerating to continue. UOA Dev will be holding its first-ever results analyst briefing on Monday.

CIMB Analyst

Terence Wong CFA


UOA Development 2QFY12 RESULTS NOTEUOAD MK / UOAD.KL Current RM1.90 SHORT TERM (3 MTH) LONG TERM


US$773.9m US$1.15m 32.0% Previous Target RM2.18 RM2,415m RM3.62m 1,271 m shares Up/downside 14.5%

Conviction

Share price info


Relative 20.4 21.6 5.8

Absolute 21 28.4 18


UOA Holdings Ltd 68.0

PNB 7.1

EPF 5.0

Results Comparison

FYE Dec (RM m) 2Q

FY122Q

FY11yoy % chg qoq % chg

2QFY12 cum

2QFY11 cum

yoy % chgPrev.

FY12F Comments

Revenue 197.5 173.3 13.9 33.4 345.5 319.1 8.3 951.3 36% of full year forecasts

Operating costs (62.0) (90.4) (31.4) (28.7) (147.7) (167.8) (12.0) (527.3)

EBIT margin (%) 68.6 47.9 57.3 47.4 20.8 44.6 Margins to expand in future quarters

EBIT 135.5 83.0 63.3 121.7 197.8 151.3 30.8 424.0

Interest expense (1.1) (0.8) 45.3 18.7 (2.1) (1.5) 35.5 (1.5) Borrowings increased 33% qoq to RM88m

Interest & invt inc 1.3 0.9 40.8 (47.0) 2.4 1.0 127.0 6.2 Cash equivalents increased 57% qoq to RM263m

Associates' contrib 0.2 (0.0) nm 597.4 0.2 (0.0) 1,292.3 3.3 Glenmarie associate not yet contribut ing

Exceptionals 0.0 (0.9) (100.0) nm 0.0 87.1 (100.0) 0.0 No fair value adjustments

Pretax profit 135.8 82.2 65.2 117.2 198.3 237.9 (16.6) 432.0 46% of full year, 2H should be stronger

Tax (24.0) (19.4) 23.7 60.6 (38.9) (41.5) (6.2) (108.0)

Tax rate (%) 17.6 23.6 19.6 17.4 12.5 25.0 Below corp tax rate due to dif ference betw. Income

Minority interests (6.9) (3.0) 127.3 3.2 (13.5) (6.6) 105.2 (23.8) tax rate and RPGT applicable

Net profit 105.0 59.8 75.6 156.4 145.9 189.8 (23.1) 300.2 In line, 49% of full year

Core net profit 105.0 60.7 73.0 156.4 145.9 102.7 42.0 300.2

EPS (sen) 8.3 4.7 75.6 143.0 11.5 15.9 (27.7) 23.6

Core EPS (sen) 8.3 4.8 73.0 143.0 11.5 8.6 33.6 23.6



EQUIRED RESEARCH CERTIFICATIONS, ARE PROVIDED AT THE END OF THIS REPORT. Designed by Eight, Powered by EFA

Disclaimer 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. By accepting this report, the recipient hereof represents and warrants that he is entitled to receive such report in accordance with the restrictions set forth below and agrees to be bound by the limitations contained herein (including the “Restrictions on Distributions” set out below). Any failure to comply with these limitations may constitute a violation of law. This publication is being supplied to you strictly on the basis that it will remain confidential. No part of this report may be (i) copied, photocopied, duplicated, stored or reproduced in any form by any means or (ii) redistributed or passed on, directly or indirectly, to any other person in whole or in part, for any purpose without the prior written consent of CIMB. CIMB, its affiliates and related companies, their directors, associates, connected parties and/or employees may own or have positions in securities of the company(ies) covered in this research report or any securities related thereto and may from time to time add to or dispose of, or may be materially interested in, any such securities. Further, CIMB, its affiliates and its related companies do and seek to do business with the company(ies) covered in this research report and may from time to time act as market maker or have assumed an underwriting commitment in securities of such company(ies), may sell them to or buy them from customers on a principal basis and may also perform or seek to perform significant investment banking, advisory or underwriting services for or relating to such company(ies) as well as solicit such investment, advisory or other services from any entity mentioned in this report. The views expressed in this report accurately reflect the personal views of the analyst(s) about the subject securities or issuers and no part of the compensation of the analyst(s) was, is, or will be directly or indirectly related to the inclusion of specific recommendations(s) or view(s) in this report. CIMB prohibits the analyst(s) who prepared this research report from receiving any compensation, incentive or bonus based on specific investment banking transactions or for providing a specific recommendation for, or view of, a particular company. However, the analyst(s) may receive compensation that is based on his/their coverage of company(ies) in the performance of his/their duties or the performance of his/their recommendations and the research personnel involved in the preparation of this report may also participate in the solicitation of the businesses as described above. In reviewing this research report, an investor should be aware that any or all of the foregoing, among other things, may give rise to real or potential conflicts of interest. Additional information is, subject to the duties of confidentiality, available on request. The term “CIMB” shall denote where applicable the relevant entity distributing the report in that particular jurisdiction where mentioned specifically below shall be a CIMB Group Sdn Bhd’s affiliates, subsidiaries and related companies.

- |

The information contained in this research report is prepared from data believed to be correct and reliable at the time of issue of this report. This report does not purport to contain all the information that a prospective investor may require. CIMB or any of its affiliates does not make any guarantee, representation or warranty, express or implied, as to the adequacy, accuracy, completeness, reliability or fairness of any such information and opinion contained in this report and accordingly, neither CIMB nor any of its affiliates nor its related persons shall be liable in any manner whatsoever for any consequences (including but not limited to any direct, indirect or consequential losses, loss of profits and damages) of any reliance thereon or usage thereof. This report is general in nature and has been prepared for information purposes only. It is intended for circulation amongst CIMB and its affiliates’ clients generally and does not have regard to the specific investment objectives, financial situation and the particular needs of any specific person who may receive this report. The information and opinions in this report are not and should not be construed or considered as an offer, recommendation or solicitation to buy or sell the subject securities, related investments or other financial instruments thereof. Investors are advised to make their own independent evaluation of the information contained in this research report, consider their own individual investment objectives, financial situation and particular needs and consult their own professional and financial advisers as to the legal, business, financial, tax and other aspects before participating in any transaction in respect of the securities of company(ies) covered in this research report. The securities of such company(ies) may not be eligible for sale in all jurisdictions or to all categories of investors. Australia: Despite anything in this report to the contrary, this research is provided in Australia by CIMB Research Pte. Ltd. (“CIMBR”) and CIMBR notifies each recipient and each recipient acknowledges that CIMBR is exempt from the requirement to hold an Australian financial services licence under the Corporations Act 2001 (Cth) in respect of financial services provided to the recipient. CIMBR is regulated by the Monetary Authority of Singapore under the laws of Singapore, which differ from Australian laws. This research is only available in Australia to persons who are “wholesale clients” (within the meaning of the Corporations Act 2001 (Cth)) and is supplied solely for the use of such wholesale clients and shall not be distributed or passed on to any other person. This research has been prepared without taking into account the objectives, financial situation or needs of the individual recipient. France: Only qualified investors within the meaning of French law shall have access to this report. This report shall not be considered as an offer to subscribe to, or used in connection with, any offer for subscription or sale or marketing or direct or indirect distribution of financial instruments and it is not intended as a solicitation for the purchase of any financial instrument. Hong Kong: This report is issued and distributed in Hong Kong by CIMB Securities (HK) Limited (“CHK”) which is licensed in Hong Kong by the Securities and Futures Commission for Type 1 (dealing in securities), Type 4 (advising on securities) and Type 6 (advising on corporate finance) activities. Any investors wishing to purchase or otherwise deal in the securities covered in this report should contact the Head of Sales at CIMB Securities (HK) Limited. The views and opinions in this research report are our own as of the date hereof and are subject to change. If the Financial Services and Markets Act of the United Kingdom or the rules of the Financial Services Authority apply to a recipient, our obligations owed to such recipient therein are unaffected. CHK has no obligation to update its opinion or the information in this research report. This publication is strictly confidential and is for private circulation only to clients of CHK. This publication is being supplied to you strictly on the basis that it will remain confidential. No part of this material may be (i) copied, photocopied, duplicated, stored or reproduced in any form by any means or (ii) redistributed or passed on, directly or indirectly, to any other person in whole or in part, for any purpose without the prior written consent of CHK. Unless permitted to do so by the securities laws of Hong Kong, no person may issue or have in its possession for the purposes of issue, whether in Hong Kong or elsewhere, any advertisement, invitation or document relating to the securities covered in this report, which is directed at, or the contents of which are likely to be accessed or read by, the public in Hong Kong (except if permitted to do so under the securities laws of Hong Kong). Indonesia: This report is issued and distributed by PT CIMB Securities Indonesia (“CIMBI”). The views and opinions in this research report are our own as of the date hereof and are subject to change. If the Financial Services and Markets Act of the United Kingdom or the rules of the Financial Services Authority apply to a recipient, our obligations owed to such recipient therein are unaffected. CIMBI has no obligation to update its opinion or the information in this research report. This publication is strictly confidential and is for private circulation only to clients of CIMBI. This publication is being supplied to you strictly on the basis that it will remain confidential. No part of this material may be (i) copied, photocopied, duplicated, stored or reproduced in any form by any means or (ii) redistributed or passed on, directly or indirectly, to any other person in whole or in part, for any purpose without the prior written consent of CIMBI. Neither this report nor any copy hereof may be distributed in Indonesia or to any Indonesian citizens wherever they are domiciled or to Indonesia residents except in compliance with applicable Indonesian capital market laws and regulations. Malaysia: This report is issued and distributed by CIMB Investment Bank Berhad (“CIMB”). The views and opinions in this research report are our own as of the date hereof and are subject to change. If the Financial Services and Markets Act of the United Kingdom or the rules of the Financial Services Authority apply to a recipient, our obligations owed to such recipient therein are unaffected. CIMB has no obligation to update its opinion or the information in this research report. This publication is strictly confidential and is for private circulation only to clients of CIMB. This publication is being supplied to you strictly on the basis that it will remain confidential. No part of this material may be (i) copied, photocopied, duplicated, stored or reproduced in any form by any means or (ii) redistributed or passed on, directly or indirectly, to any other person in whole or in part, for any purpose without the prior written consent of CIMB. New Zealand: In New Zealand, this report is for distribution only to persons whose principal business is the investment of money or who, in the course of, and for the purposes of their business, habitually invest money pursuant to Section 3(2)(a)(ii) of the Securities Act 1978. Singapore: This report is issued and distributed by CIMB Research Pte Ltd (“CIMBR”). Recipients of this report are to contact CIMBR in Singapore in respect of any matters arising from, or in connection with, this report. The views and opinions in this research report are our own as of the date hereof and are subject to change. If the Financial Services and Markets Act of the United Kingdom or the rules of the Financial Services Authority apply to a recipient, our obligations owed to such recipient therein are unaffected. CIMBR has no obligation to update its opinion or the information in this research report. This publication is strictly confidential and is for private circulation only. If the recipient of this research report is not an accredited investor, expert investor or institutional investor, CIMBR accepts legal responsibility for the contents of the report without any disclaimer limiting or otherwise curtailing such legal responsibility. This publication is being supplied to you strictly on the basis that it will remain confidential. No part of this material may be (i) copied, photocopied, duplicated, stored or reproduced in any form by any means or (ii) redistributed or passed on,



directly or indirectly, to any other person in whole or in part, for any purpose without the prior written consent of CIMBR.

As of August 26, 2012, CIMBR does not have a proprietary position in the recommended securities in this report.

Sweden: This report contains only marketing information and has not been approved by the Swedish Financial Supervisory Authority. The distribution of this report is not an offer to sell to any person in Sweden or a solicitation to any person in Sweden to buy any instruments described herein and may not be forwarded to the public in Sweden. Taiwan: This research report is not an offer or marketing of foreign securities in Taiwan. The securities as referred to in this research report have not been and will not be registered with the Financial Supervisory Commission of the Republic of China pursuant to relevant securities laws and regulations and may not be offered or sold within the Republic of China through a public offering or in circumstances which constitutes an offer within the meaning of the Securities and Exchange Law of the Republic of China that requires a registration or approval of the Financial Supervisory Commission of the Republic of China.

Thailand: This report is issued and distributed by CIMB Securities (Thailand) Company Limited (CIMBS). The views and opinions in this research report are our own as of the date hereof and are subject to change. If the Financial Services and Markets Act of the United Kingdom or the rules of the Financial Services Authority apply to a recipient, our obligations owed to such recipient therein are unaffected. CIMBS has no obligation to update its opinion or the information in this research report. This publication is strictly confidential and is for private circulation only to clients of CIMBS. This publication is being supplied to you strictly on the basis that it will remain confidential. No part of this material may be (i) copied, photocopied, duplicated, stored or reproduced in any form by any means or (ii) redistributed or passed on, directly or indirectly, to any other person in whole or in part, for any purpose without the prior written consent of CIMBS. Corporate Governance Report: 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 result may be changed after that date. CIMBS does not confirm nor certify the accuracy of such survey result. Score Range 90 – 100 80 – 89 70 – 79 Below 70 or No Survey Result Description Excellent Very Good Good N/A

United Arab Emirates: The distributor of this report has not been approved or licensed by the UAE Central Bank or any other relevant licensing authorities or governmental agencies in the United Arab Emirates. This report is strictly private and confidential and has not been reviewed by, deposited or registered with UAE Central Bank or any other licensing authority or governmental agencies in the United Arab Emirates. This report is being issued outside the United Arab Emirates to a limited number of institutional investors and must not be provided to any person other than the original recipient and may not be reproduced or used for any other purpose. Further, the information contained in this report is not intended to lead to the sale of investments under any subscription agreement or the conclusion of any other contract of whatsoever nature within the territory of the United Arab Emirates. United Kingdom: This report is being distributed by CIMB Securities (UK) Limited only to, and is directed at selected persons on the basis that those persons are (a) persons falling within Article 19 of the Financial Services and Markets Act 2000 (Financial Promotions) Order 2005 (the “Order”) who have professional experience in investments of this type or (b) high net worth entities, and other persons to whom it may otherwise lawfully be communicated, falling within Article 49(1) of the Order, (all such persons together being referred to as “relevant persons”). A high net worth entity includes a body corporate which has (or is a member of a group which has) a called-up share capital or net assets of not less than (a) if it has (or is a subsidiary of an undertaking which has) more than 20 members, £500,000, (b) otherwise, £5 million, the trustee of a high value trust or an unincorporated association or partnership with assets of no less than £5 million. Directors, officers and employees of such entities are also included provided their responsibilities regarding those entities involve engaging in investment activity. Persons who do not have professional experience relating to investments should not rely on this document. United States: This research report is distributed in the United States of America by CIMB Securities (USA) Inc, a U.S.-registered broker-dealer and a related company of CIMB Research Pte Ltd solely to persons who qualify as "Major U.S. Institutional Investors" as defined in Rule 15a-6 under the Securities and Exchange Act of 1934. This communication is only for Institutional Investors and investment professionals whose ordinary business activities involve investing in shares, bonds and associated securities and/or derivative securities and who have professional experience in such investments. Any person who is not an Institutional Investor must not rely on this communication. However, the delivery of this research report to any person in the United States of America shall not be deemed a recommendation to effect any transactions in the securities discussed herein or an endorsement of any opinion expressed herein. For further information or to place an order in any of the above-mentioned securities please contact a registered representative of CIMB Securities (USA) Inc. Other jurisdictions: In any other jurisdictions, except if otherwise restricted by laws or regulations, this report is only for distribution to professional, institutional or sophisticated investors as defined in the laws and regulations of such jurisdictions.

Recommendation Framework #1 *

Stock Sector

OUTPERFORM: The stock's total return is expected to exceed a relevant benchmark's total return by 5% or more over the next 12 months.

OVERWEIGHT: The industry, as defined by the analyst's coverage universe, is expected to outperform the relevant primary market index over the next 12 months.

NEUTRAL: The stock's total return is expected to be within +/-5% of a relevant benchmark's total return.

NEUTRAL: The industry, as defined by the analyst's coverage universe, is expected to perform in line with the relevant primary market index over the next 12 months.

UNDERPERFORM: The stock's total return is expected to be below a relevant benchmark's total return by 5% or more over the next 12 months.

UNDERWEIGHT: The industry, as defined by the analyst's coverage universe, is expected to underperform the relevant primary market index over the next 12 months.

TRADING BUY: The stock's total return is expected to exceed a relevant benchmark's total return by 5% or more over the next 3 months.

TRADING BUY: The industry, as defined by the analyst's coverage universe, is expected to outperform the relevant primary market index over the next 3 months.

TRADING SELL: The stock's total return is expected to be below a relevant benchmark's total return by 5% or more over the next 3 months.

TRADING SELL: The industry, as defined by the analyst's coverage universe, is expected to underperform the relevant primary market index over the next 3 months.

* This framework only applies to stocks listed on the Singapore Stock Exchange, Bursa Malaysia, Stock Exchange of Thailand and Jakarta Stock Exchange. Occasionally, it is permitted for the total expected returns to be temporarily outside the prescribed ranges due to extreme market volatility or other justifiable company or industry-specific reasons. CIMB Research Pte Ltd (Co. Reg. No. 198701620M)



Recommendation Framework #2 **

Stock Sector OUTPERFORM: Expected positive total returns of 10% or more over the next 12 months.

OVERWEIGHT: The industry, as defined by the analyst's coverage universe, has a high number of stocks that are expected to have total returns of +10% or better over the next 12 months.

NEUTRAL: Expected total returns of between -10% and +10% over the next 12 months.

NEUTRAL: The industry, as defined by the analyst's coverage universe, has either (i) an equal number of stocks that are expected to have total returns of +10% (or better) or -10% (or worse), or (ii) stocks that are predominantly expected to have total returns that will range from +10% to -10%; both over the next 12 months.

UNDERPERFORM: Expected negative total returns of 10% or more over the next 12 months.

UNDERWEIGHT: The industry, as defined by the analyst's coverage universe, has a high number of stocks that are expected to have total returns of -10% or worse over the next 12 months.

TRADING BUY: Expected positive total returns of 10% or more over the next 3 months.

TRADING BUY: The industry, as defined by the analyst's coverage universe, has a high number of stocks that are expected to have total returns of +10% or better over the next 3 months.

TRADING SELL: Expected negative total returns of 10% or more over the next 3 months.

TRADING SELL: The industry, as defined by the analyst's coverage universe, has a high number of stocks that are expected to have total returns of -10% or worse over the next 3 months.

** This framework only applies to stocks listed on the Hong Kong Stock Exchange and China listings on the Singapore Stock Exchange. Occasionally, it is permitted for the total expected returns to be temporarily outside the prescribed ranges due to extreme market volatility or other justifiable company or industry-specific reasons.

Corporate Governance Report of Thai Listed Companies (CGR). CG Rating by the Thai Institute of Directors Association (IOD) in 2011. ADVANC - Excellent, AMATA - Very Good, AOT - Excellent, AP - Very Good, BANPU - Excellent , BAY - Excellent , BBL - Excellent, BCP - Excellent, BEC - Very Good, BECL - Very Good, BGH - not available, BH - Very Good, BIGC - Very Good, BTS - Very Good, CCET - Good, CK - Very Good, CPALL - Very Good, CPF - Very Good, CPN - Excellent, DELTA - Very Good, DTAC - Very Good, GLOBAL - not available, GLOW - Very Good, GRAMMY – Excellent, HANA - Very Good, HEMRAJ - Excellent, HMPRO - Very Good, INTUCH – Very Good, ITD - Good, IVL - Very Good, JAS – Very Good, KBANK - Excellent, KTB - Excellent, LH - Very Good, LPN - Excellent, MAJOR - Very Good, MCOT - Excellent, MINT - Very Good, PS - Excellent, PSL - Excellent, PTT - Excellent, PTTGC - not available, PTTEP - Excellent, QH - Excellent, RATCH - Excellent, ROBINS - Excellent, SC – Excellent, SCB - Excellent, SCC - Excellent, SCCC - Very Good, SIRI - Very Good, SPALI - Very Good, STA - Very Good, STEC - Very Good, TCAP - Very Good, THAI - Very Good, THCOM – Very Good, TISCO - Excellent, TMB - Excellent, TOP - Excellent, TRUE - Very Good, TUF - Very Good.

regional smallcap-pedia singapore weekly philippines...

Documents