Small/Mid Cap Strategy and Stock Picks - the DBS Vickers ...

DBS Group Research 

Regional Small/Mid Strategy 2Q 2008 

28 March 2008 

Small/Mid Cap Strategy and Stock Picks 

In 1Q08, small/mid cap stocks underperformed the large caps in Hong Kong/China, Singapore and Malaysia, 

but outperformed in Thailand and Indonesia. Continued uncertainties about the global economy caused 

investors in the first three markets that are more highly correlated to the US, to flee to the more liquid large 

caps. In Thailand and Indonesia, small cap investors seemed more nonchalant about the global financial 

chaos, and cherry-picked in anticipation of improving domestic factors, especially domestic consumption. 

Our small caps strategy for 2Q08 is skewed towards domestic consumption to hedge against external 

shocks and uncertainties, and oil & gas exploration in SE Asia amidst a still-robust capex cycle. We also like 

commodities producers, specifically CPO and coal, for exposure to the strong prices amid supply constraints 

and/or disruptions, and growing demand from industrializing countries such as China and India. The global 

equities meltdown in January has taken some small caps to distressed valuation levels despite cashed-up 

balance sheets and robust earnings outlook for 2008. Value investors should have a field day shopping for 

bargains amongst small caps in the region. 

For 2Q08, we feature Beijing Jinkelong, Sino-Biopharmaceutical, China Hongxing and Preuksa Real Estate 

among our recommended domestic consumption plays. For oil & gas, we recommend Alam Maritim and 

Ezra, while for commodities / basic materials we like Bakrie Sumatra, Tunas Baru Lampung, and steel-related 

counter FerroChina. Our defensive and strong growth stock picks include Litrak, ARA, Fortune REIT, and 

Indorama Polymers. 

“In Singapore, this research report may only be distributed to 

Institutional Investors as defined in the Securities and Futures 

Act, Chapter 289 of Singapore.”

Regional Small/Mid Cap Strategy Q2 2008 

Asian Equities Sales, Sales Trading and Research Contacts 

Asian Equities Sales, Sales Trading and Research Contacts 

Sales Heads Tel: Email: 

Singapore Chai Szue Yin 65-6398 7319 szueyin@dbsvickers.com 

Hong Kong Andrew Au 852-2820 4992 andrew_au@hk.dbsvickers.com 

London Graham Booth 44-20-7618 1881 graham.booth@uk.dbsvickers.com 

New York Robert Koh 1-212-826 3553 robertkoh@us.dbsvickers.com 

Thailand 

Indonesia 

Tasamol Witayanukusl 

Irwan Junus 

662-657 7000 

6221-3983 2668 

tasamolweth@th.dbsvickers.com 

irwan.junus@id.dbsvickers.com 

Sales Trading Contacts Tel: Email: 

Singapore David Teo 65-6398 6926 davidteo@dbsvickers.com 

Hong Kong Franco Law 852-2971 1828 franco_law@hk.dbsvickers.com 

London Ross Phillpotts 44-20-7618 1884 ross.phillpotts@uk.dbsvickers.com 

New York Liew Shao Hoong +1 212 826 3550 shaohoong@us.dbsvickers.com 

Research Contacts Tel: Email: 

Regional Timothy Wong 65-6398 7952 timothywongkc@dbsvickers.com 

Singapore Janice Chua 65-6398 7954 janicechua@dbsvickers.com 

Hong Kong Dr Peter So 852-2820 4619 peter_so@hk.dbsvickers.com 

Malaysia Wong Ming Tek 603-2711 0956 mingtek@hwangdbsvickers.com.my 

Thailand Chanpen Sirithanarattanakul 662-657 7824 chanpens@th.dbsvickers.com 

Indonesia Agus Pramono 6221-3983 2668 agus.pramono@id.dbsvickers.com 

DBS Vickers Securities -- Regional Offices 

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Page 2


Table of Contents 

Table of Contents 

Strategy Overview 

Stock Profiles Key Data 4 

Country Assessments & Stock Profiles 

Singapore Bet on value 6 

ARA Asset Management Premier Asian real estate manager 12 

China Hongxing Sports Gaining visibility in larger cities 14 

Ezra Holding Growth underpinned by vessel deliveries 16 

Ferrochina Plant visit reinforces our confidence in the group’s outlook 18 

Hong Kong / China Navigating through rough seas in Q2 20 

Beijing Jingkelong Outlook remains bright 26 

Fortune REIT Improving fortune 28 

Sino Biopharmaceutical Hybrid of high growth and defensiveness 30 

ZTE Stronger growth ahead 32 

Malaysia Attractive values 34 

Alam Maritim Clear earnings visibility ahead 40 

Litrak Potential yield kicker 42 

Thailand Domestic plays 44 

Indorama Polymers Among Thailand’s top growth story 48 

Preuksa Real Estate Deserves re-rating 50 

Indonesia Be selective 52 

Bakrie Sumatra Plantation Going for a song 56 

Sorini Corporation From sorbitol to ethanol 58 

Tunas Baru Lampung The laggard 60 

Earnings Guide 62 

DBS Vickers Securities 

Singapore l Hong Kong / China l Thailand l Malaysia l Indonesia 

Page 3


Stock Profiles 


Key Data 

Bloomberg Code 

Company 

Price & Index 

(25 Mar 08) 

Mkt Cap 

(USDm) 

PE 

08 (x) 

PE 

09 (x) 

EPS CAGR 

07-09 (%) 

EV/EBITDA 

08 (x) 

P/BV 

08 (x) 

ROE 

08 (%) 

SINGAPORE STI 3,000 

ARA SP ARA REIT S$0.71 299 11.2 8.8 18 7.8 3.7 34.8 

CHHS SP China Hongxing Sports S$0.58 1,067 14.9 11.6 25 9.0 1.9 13.8 

EZRA SP Ezra Holdings S$1.84 780 17.8 10.1 73 13.7 1.6 49.8 

FRC SP Ferro China S$1.35 780 5.0 3.8 55 5.0 0.8 16.3 

HONG KONG HSI / HSCEI 22465 / 11,727 

814 HK Beijing Jingkelong HK$4.14 97 10.2 8.1 26 4.5 1.0 9.9 

FRT SP Fortune REIT HK$5.08 530 7.1 ^ 7.1 ^ na na 0.5 na 

1177 HK Sino Biopharmaceutical HK$1.47 428 11.3 8.8 30 5.0 1.6 12.6 

763 HK ZTE # HK$35.30 727 16.0 11.3 47 8.2 2.3 15.1 

# H Market Cap only 

^ Distribution Yield (%) 

MALAYSIA KLCI 1,230 

AMRB MK Alam Maritime RM1.85 281 12.8 9.8 35 10.3 3.2 28.4 

LTK MK Litrak RM3.58 551 17.5 15.8 12 10.0 1.9 11.4 

THAILAND SET 803 

IRP TB Indorama Polymers Bt9.00 395 6.8 5.0 54 6.8 1.8 30.3 

PS TB Preuksa Real Estate Bt10.70 743 12.2 11.7 27 9.3 2.4 19.9 

INDONESIA JCI INDEX 2,420 

UNSP IJ Bakrie Sumatra Plantation IDR1,810 746 14.1 11.0 63 9.7 2.9 22.5 

SOBI IJ Sorini Corporation IDR1,410 138 11.7 8.2 30 7.7 2.4 22.3 

TBLA IJ Tunas Baru Lampung IDR445 202 12.4 10.5 43 5.8 1.8 15.5 

Page 4


Country Assessments & Stock Profiles 

Country Assessments 

& 


Page 5


Country Assessment 

Singapore 

Bet on value 

On the backdrop of heightened market uncertainties, our 

5 small cap picks in 1Q fell 23.2% on a price-weighted 

basis, slightly less than the 25.2% decline suffered by the 

FTSE Small Caps Index. Looking ahead into 2Q, our 

strategy is to selectively accumulate oversold value 

opportunities, which have emerged in the aftermath of 

the 1Q sell down. 

Fundamentally sound companies were dumped together with the speculative 

counters as investors slashed their expectations across the board. While we 

continue to adopt a defensive stance as the general nervous market sentiment 

should still persist into 2Q, selective trading opportunities have presented 

themselves post the 1Q correction. We pick ARA for its earnings quality, stability 

and visibility. We would be selective in going for oversold rebound plays and 

recommend companies that can (i) continue to grow its bottom line strongly 

over the next two years; and/or (ii) have a high level of net cash. Our picks are 

Ferrochina, Ezra and China Hongxing 

ARA offers investors an opportunity to invest in a stable fee-income business 

backed by real estate asset performance and valuation. We pick Ezra as one of 

the rebound plays for its strong earnings growth in FY08 (+70%) and FY09 

(+76%). Ferrochina is our second pick given the expected near-trebling in net 

profit in FY08 and resultant low PE multiples. Lastly, China Hongxing’s attractive 

valuation versus peers and its strong net cash backing of 20Scts per share makes 

it a viable pick. 

Yeo Kee Yan · (65) 6398 7955 · keeyan@dbsvickers.com 

Ling Lee Keng · (65) 6398 7970 · leekeng@dbsvickers.com 

Page 6 

www.dbsvickers.com 

Refer to important disclosures at the end of this report

Regional Small/Mid Strategy Q2 2008 


Market Data 

Indices 

Closed 

25 Mar 08 

Chng Net 

-1 mth 

-1 mth 

(%) 

-3 mth 

(%) 

-6 mth 

(%) 

52-Week 

-12 mth 

(%) High Low 

FSSTI 3000 (65) (2.1) (12.2) (15.8) (4.5) 3831 2746 

FTSE Mid Cap 747 (56) (6.9) (15.0) (20.3) (15.9) 1031 693 

FTSE Small Cap 625 (89) (12.5) (25.2) (32.0) (22.6) 1045 587 

Transactions: YTD * 

Volume 

FSSTI (bn) 13.7 

FTSE Mid Cap (bn) 16.4 

FTSE Small Cap (bn) 10.1 

Source: Bloomberg 

* Start 10 Jan 08 

20 Worst Performing Small-Mid Cap Stocks 

Q-o-Q chg Change in Target Price (S$) Reason 

(%) Before After 

Advance SCT -68.2 1.40 0.64 Profit warning 

China Auto Electronics -66.4 1.16 0.55 Margin pressure (customer) 

Jiutian Chemical -62.2 0.76 0.31 Margin pressure (methanol) 

Fibrechem -50.0 2.02 1.30 Margin pressure (raw materials); delay in capacity expansion 

See Hup Seng -50.0 1.18 0.53 Declining margins 

Sinwa Limited -49.5 0.79 0.39 Higher execution risk 

China Sports International -47.7 2.66 1.77 De-rating of the sector 

China Sky Chemical Fibre -47.3 3.40 1.70 Lower risk appetite; competition 

HLN Technologies -47.3 1.21 0.51 Lower sales 

LMA International -47.1 0.67 0.43 Margin pressure (higher costs) 

KS Energy -45.1 5.52 3.00 Lower risk appetite 

Ellipsiz -44.9 0.58 0.20 Profit warning 

China Essence -44.7 1.13 0.85 Lower risk appetite 

China Dairy -44.0 0.49 0.24 Margin pressure (raw materials, competition) 

Luzhou Bio-Chem -43.9 0.55 0.25 Margin pressure (raw materials) 

Celestial NutriFoods -43.6 2.10 1.59 Margin pressure (raw materials) 

Meiban -42.2 0.91 0.68 More conservative valuations 

Ezra Holdings -42.1 4.00 3.15 Lower sector valuations 

Oriental Century -41.4 1.52 0.97 Growth on existing operations muted 

China Sun Bio-Chem -39.1 0.99 0.61 Margin pressure (raw materials) 

Source: DBSV Research 

PERFORMANCE REVIEW 

The FS Small Cap Index (FSTS) is one of the worst 

performing indices both on a quarterly and YTD basis, 

after FS China Index and sub-sector indices like FS Basic 

Materials, FS Utilities and FS Consumer Goods, which 

mainly comprises of S-chips. On a Q-o-Q basis, the FSTS 

shed 25.2%, vs 44.1% for the FS China Index and 

12.2% for FS STI. About 20% of the 195 constituents in 

FSTS are S-chips. Besides the fears of a US recession and 

margin squeeze from escalating oil and commodity 

prices, sentiment for S-chips were affected by a selldown 

in Shanghai A shares and HK H shares in 1Q. As one of 

Page 7



the top performing asset classes in 2007, China-related 

stocks was a prime target for profit taking amidst the 

bearish sentiment prevailing during the quarter. 

Amid a meltdown in global equity markets, our 

defensive strategy to focus on companies in the 

Consumer Goods sector with strong branding and 

pricing power to pass higher costs to customers was also 

not so defensive after all. Overall, this sector eased 21% 

Q-o-Q on a price performance basis. However, the 

Healthcare and Consumer Services sectors were more 

resilient, down 15% and 8% respectively. 

Among the 20 worst performing small-mid cap stocks in 

our coverage, slightly more than half were S-chips. Most 

of them were hit by margin pressure as a result of rising 

raw material costs. Thus, stocks to avoid would be 

Luzhou Bio-Chem and China Dairy. Luzhou would be 

affected by high corn prices and the negative impact of 

the snowstorm. China Dairy is faced with a challenging 

environment where raw milk prices are high and 

competition is intense. Non-S-chips to avoid include 

Advance SCT and Ellipsiz - both companies issued 

profit warnings recently. 

However, stocks like Ezra and China Sports are worth 

looking at. Ezra’s net earnings (pre-exceptional) is 

expected to rise strongly by 70% and 76% in FY08 and 

FY09 respectively and valuations are very attractive now. 

China Sports is also trading at attractive PEs of 6.9x 

(FY08F) and 5.2x (FY09). Balance sheet is also strong 

with net cash at over 20 Scts per share. 

Turnover volume for FSTS more than doubled just after 

the CNY holidays to hit a high of 554m and accounted 

for about 25% of the total volume traded. However, 

interest soon waned as investors turned cautious. On the 

whole, turnover volume for small cap stocks accounted 

for about 15-20% of total volume traded since Jan 08. 

FS STI vs FS Small Cap 

FS STI 

2,350 

2,300 

2,250 

2,200 

2,150 

2,100 

2,050 

2,000 

1,950 

1,900 

Jan-08 Feb-08 Mar-08 

Source: Bloomberg, DBS Vickers 

FTSE Volume Traded (mil shares) 

3,000 

2,500 

2,000 

1,500 

1,000 

500 

m 

h 

FS STI 


FTSE Small Cap 


Total Volume (LHS) 

FTSE Small Cap Vol vs Tot Vol % (LHS) 

FTSE Sm all Cap 

600 

580 

560 

540 

520 

500 

480 

460 

440 

420 

400 

30% 

25% 

20% 

15% 

10% 

5% 

0% 

Page 8



GROWTH AND VALUATION 

Our small/mid caps FY08 PE dipped from 11.3x to 

10.5x when compared to the previous quarter. FY09 

PE fell from 9.6x to 7.9x. Growth is projected at 18% 

in FY08 and 34% in FY09. Small/mid caps continue to 

trade at a more attractive valuation compared to large 

caps as the latter are trading at 13.5x (FY08) and 

11.9x (FY09) with earnings growing at 13% and 14% 

respectively. 

The small/mid caps REITS sector trades at DPU yields of 

6.4% (FY08) and 7.2% (FY09), higher than 5.4% 

(FY08) and 5.5% (FY09) for the large caps. Our pick in 

this sector is ARA, an Asian real estate fund 

management company that focuses on managing 

public listed REITs and private estate funds. ARA trades 

at an attractive yield of 6.3% (FY08) and 8.1% (FY09). 

Good value can be found in the small/mid caps basic 

materials sector as PE has fallen to 8.1x (FY08) and 

5.7x (FY09) post the 1Q market correction. This sector 

is the most attractively valued compared to all the 

other sectors, both large and small caps. Growth rate 

of 16% in FY08 and 42% in FY09 is also higher 

compared to the DBSV universe of 14% and 17% 

respectively. Coated steel and steel related products 

producer Ferrochina is our pick in this sector. 

The consumer goods sector is a close second 

compared to the basic materials sector. PE valuations 

have fallen to a very attractive 8.1x (FY08) and 6.8x 

(FY09) compared to 10.5x and 7.9x respectively for 

the small/mid caps group. The projected sector growth 

of 19% in FY08 and 20% in FY09 is higher than the 

DBSV Universe growth rate of 14% and 17% 

respectively. Our pick is sports shoes designer and 

manufacturer China Hongxing. 

PE valuations for the small/mid caps industrials sector 

fell from 14.4x (FY08) and 12.1x (FY09) in 4Q07 to 

11.1x (FY08) and 9.4x (FY09) during the quarter. 

Current valuations are much lower compared to the 

14x (FY08) and 12x (FY09) for the large caps industrial 

sector. Growth for the small/mid caps sector is an 

impressive 43% for FY08 when compared to 18% for 

the entire small/mid caps group. Our pick for the 

industrials sector is Ezra, an integrated offshore 

solutions provider for the O&G industry. 

Page 9



Growth and Valuation -- Large Caps vs Small / Mid Caps 

PE (x) 

Earnings Change 

2007 2008F 2009F 2007 2008F 2009F 

Consumer Goods 24.9 22.4 20.0 32% 11% 12% 

Consumer Services 11.8 10.7 10.9 11% 11% -2% 

Financials 13.4 12.1 11.1 20% 10% 9% 

Health Care 29.0 25.8 22.3 35% 13% 16% 

Industrials 16.9 14.0 12.0 17% 21% 16% 

Oil & Gas 6.7 6.9 7.4 79% -3% -7% 

Real Estate 15.4 12.6 9.1 100% 23% 38% 

REITS 22.3 19.8 18.3 32% 13% 9% 

Technology 11.4 13.6 9.6 33% -16% 42% 

Telecommunications 16.8 15.2 13.7 2% 10% 11% 

Large Caps 15.3 13.5 11.9 24% 13% 14% 

Basic Materials 9.4 8.1 5.7 5% 16% 42% 

Consumer Goods 9.7 8.1 6.8 37% 19% 20% 

Consumer Services 16.6 12.4 10.0 32% 34% 24% 

Financials 8.7 8.3 7.8 63% 5% 7% 

Health Care 18.3 16.4 13.7 -9% 11% 20% 

Industrials 15.8 11.1 9.4 60% 43% 18% 

Oil & Gas 13.3 9.4 7.3 14% 42% 28% 

Real Estate 10.2 10.1 6.2 93% 2% 61% 

REITS 25.4 17.6 14.3 87% 44% 23% 

Technology 10.6 9.3 7.3 98% 15% 27% 

Small / Mid Caps 12.4 10.5 7.9 60% 18% 34% 

DBSV Universe 14.9 13.1 11.1 28% 14% 17% 

Small Cap Ex Pty & Fin 15.1 13.2 11.5 

Small vs Large Caps -19% -22% -34% 

Small Caps Ex Pty v Large Caps -2% -3% -3% 

Source: DBS Vickers 

Page 10



STRATEGY AND STOCKS PICKS 

1Q08 Small Cap Picks 

(S$m) 

Price 

25 Mar 08 

Price 

17 Dec 07 

Chng 

(%) 

Boustead 1.92 2.33 -18% 

China Sky 0.985 1.87 -47% 

Ferro China 1.35 1.76 -23% 

The Hour Glass 0.83 0.94 -11% 

Hsu Fu Chi 0.93 1.18 -21% 

Raffles Medical 1.21 1.55 -22% 


Our small cap top picks fell 23.2% on a priceweighted 

basis as the 1Q market sell-down affected all 

stocks. Still, the figure betters the 25.2% fall suffered 

by the FTSE Small Caps index. Our strategy in sticking 

to branded consumer and defensive plays in 

anticipation of market uncertainties has better 

protected investors during the 1Q market sell-down as 

Hour Glass, Boustead and Hsu Fu Chi declined by a 

relatively less dramatic 11%,18%, and 21% 

respectively. China Sky underperformed as oil prices 

escalated above USD100pbl and margin concerns 

drove investors out of S-chips generally. 

Our continued cautious stance going into 2Q qualifies 

ARA as one of our picks. The stock offers investors an 

opportunity to invest in a stable fee-income business 

backed by real estate asset performance and 

valuation. Growth potential of its business model 

remains intact following a better than expected FY07 

net profit of S$34m. Distribution yield of 8.1% for 

FY09 is attractive. 

While many investors fretted about missing buying 

opportunities at lower valuations last year as the stock 

market rose, the recent market sell-down has forced 

valuations down to attractive levels again. This has 

presented trading opportunities in 2Q. 

We will be selective in this area given that the market 

uncertainties that resulted in the 1Q sell-off are still 

present going into the start of 2Q. We prefer 

companies that can either (i) continue to grow its 

bottom line strongly over the next 2 years or (ii) have a 

high level of net cash. 

Ferrochina is expected to deliver a stunning 291% 

jump in net profit during FY08 to RMB1.11bn as the 

contribution from its acquisition of Superb Team and 

capacity expansion kicks into full force this year. 

Valuations are extremely attractive at 5.0x (FY08) and 

3.8x (FY09). Management also reassured that they are 

able to pass on recent rises in iron ore and steel prices 

to customers 

China Hongxing (CHHS), a Beijing Olympics play, is 

our second pick for an oversold rebound play in 2Q. 

The recent S-chips sell-off has affected the SGX-listed 

sports shoes plays more than their counterparts in HK. 

CHHS’s FY08 PE of 14.9x implies that the discount to 

Li Ning has widened to 50%. This is despite the fact 

that CHHS is now closer to Li Ning in terms of revenue 

and earnings compared to six months ago. Likewise, 

value is also emerging for China Sports, which fell 

47.7% in 1Q due to the sector de-rating. The stock is 

now trading at only 6.9x (FY08) and 5.2x (FY09) 

despite EPS growth of 43% and 35% in FY08 and 

FY09 respectively. 

Our final pick is Ezra. Its Saigon Shipyard is expected 

to be fully operational by 2009, paving the way for 

more fabrication, installation and commissioning 

projects. FY08 and FY09 net earnings (pre-ex) are 

expected to rise by 70% and 76% to S$60m and 

$106m respectively. The 53% fall in stock price from 

its peak of $3.88 in mid-November last year has 

brought FY08 and FY09 PE valuations (pre-ex) down 

to 17.8x and 10.1x respectively. 

2Q08 Small Cap Top Picks 

FYE Mkt Price Target PE PE EV/EBITDA P/BV Div Yld ROAE Val/Day 

Company Cap (S$) Price % (x) (x) (x) (x) (%) (%) 6m 

(S$m) 25 Mar (S$) Upside 08F 09F 08F 08F 08F 08F ($000s) 

ARA Asset Mgmt Dec 413 0.71 1.13 60% 11.2x 8.8x 7.8x 3.7x 6.3% 35% 5,681 

China Hongxing Dec 1,473 0.58 0.90 55% 14.9x 11.6x 9.0x 1.9x 1.3% 14% 19,049 

Ezra Holdings Aug 1,078 1.84 3.15 71% 17.8x 10.1x 13.7x 1.6x 2.7% 50% 4,907 

FerroChina Dec 1,079 1.35 2.75 104% 5.0x 3.8x 5.0x 0.8x 1.5% 16% 12,320 


Page 11


ARA Asset Management 

Bloomberg: ARA SP | Reuters: ARAM.SI 

BUY S$0.71 FSSTI : 3,000.19 

Price Target : 12-Month S$ 1.13 

Potential Catalyst: Setting up new property funds/ REITs 

Analyst 

Singapore Research Team +65 6533 9688 

research@dbsvickers.com 

Price Relative 

1.50 

1.40 

1.30 

1.20 

1.10 

1.00 

0.90 

0.80 

0.70 

0.60 

S$ 

0.50 

Nov-07 

Feb-08 

R e la tiv e In d e x 

ARA Asset Management (LHS) R elative FSSTI IN D EX (R H S) 

Forecasts and Valuation 

FY Dec (S$ m) 2006A 2007A 2008F 2009F 

Turnover 30 60 75 100 

EBITDA 16 39 45 59 

Pre-tax Profit 16 39 45 59 

Net Profit 13 34 37 47 

Net Pft (Pre Ex.) 13 34 37 47 

EPS (S cts) 2.3 5.8 6.4 8.1 

EPS Pre Ex. (S cts) 2.3 5.8 6.4 8.1 

EPS Gth Pre Ex (%) 0 153 9 27 

Diluted EPS (S cts) 2.3 5.8 6.4 8.1 

Net DPS (S cts) 1.0 3.8 4.5 5.7 

BV Per Share (S cts) 2.7 17.4 19.3 21.7 

PE (X) 30.7 12.2 11.2 8.8 

PE Pre Ex. (X) 30.7 12.2 11.2 8.8 

P/Cash Flow (X) 30.3 12.1 11.5 8.9 

EV/EBITDA (X) 24.5 8.9 7.8 5.7 

Net Div Yield (%) 1.4 5.4 6.3 8.0 

P/Book Value (X) 26.5 4.1 3.7 3.3 

Net Debt/Equity (X) CASH CASH CASH CASH 

ROAE (%) 114.1 58.3 34.8 39.5 

Consensus EPS (S cts): - - 

Sector : Financials 

Principal Business: ARA is an Asian real estate fund management 

company that focuses on public listed REITs and private real estate 

funds. 

219 

169 

119 

69 

19 

Premier Asian real estate 

manager 

Story: ARA is an Asian real estate fund management 

company with a focus on public listed REITs and private real 

estate funds. We believe that it is one of the largest REIT 

managers in Asia (ex - Japan) in terms of real estate assets 

under management of c. US$7.3bn as at 31 Dec’07. It 

manages REITs listed in Singapore, Hong Kong and Malaysia, 

private real estate funds and a specialist equity fund that invest 

in the Asia Pacific Region. 

Point: We believe ARA possesses a highly scalable and 

diversified business model and can offer the following to 

investors: (i) a proxy to invest in a stable fee-income business 

backed by real estate assets performance and valuation; (ii) 

exposure to the asset inflation theme in upturn of the Asian 

real estate market and (iii) leverage on the growth of its 

managed reits and thus enjoying higher fee income from a 

growing AUM base. In addition, there are opportunities 

aplenty for the setting up of new reits and private real estate 

funds as developers pursue asset light business models. 

In FY08, we expect EPS to be boosted by earnings contribution 

from management fees from its flagship private fund; the ARA 

Asia Dragon fund (ADF) that has gathered a committed capital of 

c. US$1bn and an additional US$500m in co-investments as at 31 

Dec ’07. The fund is currently seeking additional commitments for 

a 3 rd closing by the 1 st quarter of FY08. With ADF, ARA has on its 

hands a sizeable war-chest of S$1.0bn where it can deploy 

opportunistically in the current competitive environment. 

Relevance: We attribute a target price of S$1.13 based on 

14x PER based on FY09 earnings, given ARA’s earnings 

visibility on a stable income base. Following recent price 

weakness, the stock is trading at an undemanding 11.2x FY08 

and 8.8x FY09 PE. 

At A Glance 

Issued Capital (m shrs) 582 

Mkt. Cap (S$m/US$m) 

413 / 299 

Major Shareholders 

John Lim Hwee Chiang (%) 36.5 

Cheung Kong Holdings (%) 15.6 

Prudential Asset Mgmt (%) 10.1 

Free Float (%) 37.9 

Avg. Daily Vol.(‘000) 2,560 

Page 12 




ARA Asset Management 

Income Statement (S$ m) Balance Sheet (S$ m) 

FY Dec 2006A 2007A 2008F 2009F FY Dec 2006A 2007A 2008F 2009F 

Revenue 30 60 75 100 Net Fixed Assets 1 1 0 0 

Other Opng (Exp)/Inc (14) (22) (32) (43) Invts in Associates & JVs 0 0 0 0 

Operating Profit 15 39 43 57 Other LT Assets 0 30 66 66 

Other Non Opg (Exp)/Inc 1 0 0 0 Cash & ST Invts 16 85 83 101 

Associates & JV Inc 0 0 1 1 Other Current Assets 8 25 5 7 

Net Interest (Exp)/Inc 0 0 0 0 Total Assets 24 142 156 175 

Exceptional Gain/(Loss) 0 0 0 0 

Pre-tax Profit 16 39 45 59 ST Debt 0 0 0 0 

Tax (3) (5) (7) (9) Other Current Liab 9 21 23 25 

Minority Interest 0 0 (1) (3) LT Debt 0 20 20 20 

Preference Dividend 0 0 0 0 Other LT Liabilities 0 0 0 0 

Net Profit 13 34 37 47 Shareholder’s Equity 16 101 112 126 

Net Profit before Except. 13 34 37 47 Minority Interests 0 0 1 4 

EBITDA 16 39 45 59 Total Cap. & Liab. 24 142 156 175 

Sales Gth (%) 7.7 104.4 24.9 33.2 Non-Cash Wkg. Capital (1) 4 (17) (18) 

EBITDA Gth (%) 4.2 141.3 15.1 30.6 Net Cash/(Debt) 16 66 64 81 

Opg Profit Gth (%) (2.7) 153.8 12.4 32.0 

Net Profit Gth (%) 0.1 152.6 9.0 27.2 

Effective Tax Rate (%) 17.6 12.5 15.0 15.0 

Cash Flow Statement (S$ m) 

Rates & Ratio 


Pre-Tax Profit 16 39 45 59 Opg Profit Margin (%) 51.7 64.2 57.7 57.2 

Dep. & Amort. 0 0 0 0 Net Profit Margin (%) 45.6 56.4 49.2 47.0 

Tax Paid (2) (3) (5) (7) ROAE (%) 114.1 58.3 34.8 39.5 

Assoc. & JV Inc/(loss) 0 0 (1) (1) ROA (%) 67.0 41.0 24.9 28.5 

Chg in Wkg.Cap. 1 6 19 (2) ROCE (%) 106.9 58.2 34.5 40.2 

Other Operating CF 2 (32) 0 0 Div Payout Ratio (%) 42.3 65.5 70.0 70.0 

Net Operating CF 17 10 58 49 Net Interest Cover (x) NM NM NM NM 

Capital Exp.(net) 0 0 0 0 Asset Turnover (x) 1.5 0.7 0.5 0.6 

Other Invts.(net) 0 (22) (36) 0 Debtors Turn (avg days) 18.7 81.3 73.1 23.0 

Invts in Assoc. & JV 0 0 0 0 Creditors Turn (avg days) 2.3 1.9 1.3 1.0 

Div from Assoc & JV 0 0 1 1 Inventory Turn (avg days) N/A N/A N/A N/A 

Other Investing CF 0 0 0 0 Current Ratio (x) 2.7 5.3 3.9 4.3 

Net Investing CF 0 (22) (34) 1 Quick Ratio (x) 2.7 5.3 3.9 4.3 

Div Paid (6) (23) (26) (33) Net Debt/Equity (X) CASH CASH CASH CASH 

Chg in Gross Debt (1) 20 0 0 Capex to Debt (%) 92.5 1.6 0.0 0.0 

Capital Issues 0 76 0 0 N. Cash/(Debt)PS (S cts) 2.7 11.3 11.0 13.9 

Other Financing CF 0 (1) 0 0 Opg CFPS (S cts) 2.8 0.7 6.7 8.7 

Net Financing CF (7) 71 (26) (33) Free CFPS (S cts) 2.9 1.6 10.0 8.4 

Net Cashflow 10 59 (2) 17 

Segmental Breakdown 

PE (X) 

FY Dec 2006A 2007A 2008F 2009F 

(x) 

Revenues (S$ m) 

Reit Base and 24 44 41 45 

25.0 

Acquisition Fees 1 15 29 43 23.0 

Portfolio Management 0 0 5 12 21.0 

Total 26 60 75 100 

Operating Profit (S$ m) 

Reit Base and 18 24 23 25 

Acquisition Fees 1 8 16 24 

Portfolio Management (3) 6 3 7 

Total 16 39 43 57 

19.0 

17.0 

15.0 

13.0 

11.0 

9.0 

7.0 

5.0 

Nov-07 Dec-07 Jan-08 Feb-08 Mar-08 

Source: Company, DBS Vickers 

Page 13


China Hongxing Sports 

Bloomberg: CHHS SP | Reuters: CHXS.SI 

BUY S$0.58 FSSTI : 3,000.19 

Price Target : 12-Month S$ 0.90 (Prev S$ 1.00) 

Potential Catalyst: Earnings growth and execution 

Analyst 

Paul Yong CFA +65 6398 7951 

paulyong@dbsvickers.com 


1.50 

1.30 

1.10 

0.90 

0.70 

0.50 

0.30 

0.10 

S$ 

N ov-05 M ay-06 N ov-06 M ay-07 N ov-07 

Relative Index 

1019 

China Hongxing Sports (LHS) R e la tive FSST I IN D E X (R H S) 


FY Dec (RMB m) 2006A 2007A 2008F 2009F 

Turnover 1,412 2,046 2,865 3,780 

EBITDA 253 505 660 929 

Pre-tax Profit 235 450 603 844 

Net Profit 215 416 525 701 

Net Pft (Pre Ex.) 215 416 525 701 

EPS (S cts) 2.1 3.2 3.9 5.0 

EPS Pre Ex. (S cts) 2.1 3.2 3.9 5.0 

EPS Gth Pre Ex (%) 68 53 21 29 


Net DPS (S cts) 0.2 0.8 0.8 1.0 


PE (X) 27.6 18.0 14.9 11.6 

PE Pre Ex. (X) 27.6 18.0 14.9 11.6 

P/Cash Flow (X) 26.4 16.6 13.5 10.3 

EV/EBITDA (X) 21.3 9.6 9.0 6.1 

Net Div Yield (%) 0.4 1.4 1.3 1.7 

P/Book Value (X) 7.8 2.1 1.9 1.7 

Net Debt/Equity (X) CASH CASH CASH CASH 

ROAE (%) 34.9 19.3 13.8 15.9 

Consensus EPS (S cts): 3.9 5.4 

Sector : Consumer Goods 

Principal Business: Designs, manufactures and sells sports shoes, 

apparel and accessories in China under the brand Erke. 

819 

619 

419 

219 

19 

Gaining visibility in larger cities 

Story: We paid a visit to four of the Group’s specialty 

stores in Nanjing city in mid-March, which were opened 

over the last 12 months. 

Point: We came away from our visit fairly impressed with 

two things 1) the quick and highly visible expansion into 

Nanjing over the last 12 months and 2) the consistency 

and professionalism of the set-up of its fourth generation 

stores. As at end Feb, China Hongxing has expanded to at 

least 67 points-of-sales in tier 1 cities like Beijing, Tianjin, 

Guangzhou and Shanghai whilst also stepping up its 

distribution network expansion into tier 2 cities like 

Nanjing, Xiamen, Hangzhou etc… CHHS is targeting to 

grow its distribution network by at least 600 stores per 

annum over 2008 and 2009, with increased focus on tier 1 

and tier 2 cities, whilst also updating its older stores into 

the highly attractive, fourth generation format. Coupled 

with continued investment into A&P activities, we believe 

that these expansion plans should help consolidate the 

Group’s position as a top 5 domestic sports shoes brand in 

China. 

Relevance: Adjusting our target valuation multiple to a 

20% discount to larger, HK-listed peers, our new 12- 

month target price for China Hongxing is S$0.90, based 

on 18x FY09 earnings. Even after taking into account the 

Group’s aggressive expansion plans for FY08, net cash per 

share for end FY08 is projected at a healthy 15 Scts per 

share. Reiterate BUY. 

At A Glance 

Issued Capital (m shrs) 2,540 

Mkt. Cap (S$m/US$m) 1,473 / 1,067 


Wu Rongguang (%) 18.2 

Wu Rongzhao (%) 9.1 

Wu Hanjie (%) 9.1 


Avg. Daily Vol.(‘000) 24,146 

Page 14 




China Hongxing Sports 

Income Statement (RMB m) Balance Sheet (RMB m) 


Turnover 1,412 2,046 2,865 3,780 Net Fixed Assets 345 523 817 790 

Cost of Goods Sold (891) (1,204) (1,617) (2,096) Invts in Associates & JVs 0 0 0 0 

Gross Profit 521 842 1,248 1,684 Other LT Assets 33 32 32 32 

Other Opng (Exp)/Inc (277) (372) (644) (842) Cash & ST Invts 549 2,653 1,896 2,402 

Operating Profit 243 470 604 842 Other Current Assets 415 857 1,888 2,147 

Other Non Opg (Exp)/Inc 0 0 0 0 Total Assets 1,342 4,064 4,633 5,369 

Associates & JV Inc 0 0 0 0 

Net Interest (Exp)/Inc (8) (20) (1) 2 ST Debt 10 8 0 0 

Exceptional Gain/(Loss) 0 0 0 0 Other Current Liab 181 231 386 528 

Pre-tax Profit 235 450 603 844 LT Debt 0 0 0 0 

Tax (21) (34) (78) (143) Other LT Liabilities 390 271 174 76 

Minority Interest 0 0 0 0 Shareholder’s Equity 761 3,554 4,072 4,765 

Preference Dividend 0 0 0 0 Minority Interests 0 0 0 0 

Net Profit 215 416 525 701 Total Cap. & Liab. 1,342 4,064 4,633 5,369 

Net Profit before Except. 215 416 525 701 

EBITDA 253 505 660 929 Non-Cash Wkg. Capital 234 626 1,502 1,619 

Net Cash/(Debt) 539 2,645 1,896 2,402 

Sales Gth (%) 56.9 44.9 40.0 32.0 

EBITDA Gth (%) 68.0 99.9 30.6 40.8 

Opg Profit Gth (%) 66.3 92.9 28.6 39.4 

Net Profit Gth (%) 68.3 94.0 26.0 33.5 


Cash Flow Statement (RMB m) 

Rates & Ratio 


Pre-Tax Profit 235 450 603 844 Gross Margins (%) 36.9 41.1 43.6 44.6 

Dep. & Amort. 9 36 56 87 Opg Profit Margin (%) 17.2 23.0 21.1 22.3 

Tax Paid (21) (30) (10) (78) Net Profit Margin (%) 15.2 20.4 18.3 18.5 

Assoc. & JV Inc/(loss) 0 0 0 0 ROAE (%) 34.9 19.3 13.8 15.9 

Chg in Wkg.Cap. (185) (395) (945) (182) ROA (%) 21.6 15.4 12.1 14.0 

Other Operating CF 7 23 0 0 ROCE (%) 36.1 20.1 13.8 15.8 

Net Operating CF 45 83 (295) 671 Div Payout Ratio (%) 11.2 24.9 20.0 20.0 

Capital Exp.(net) (204) (212) (350) (60) Net Interest Cover (x) 29.9 24.0 895.1 NM 

Other Invts.(net) 0 0 0 0 Asset Turnover (x) 1.4 0.8 0.7 0.8 

Invts in Assoc. & JV 0 0 0 0 Debtors Turn (avg days) 60.8 70.4 70.7 72.5 

Div from Assoc & JV 0 0 0 0 Creditors Turn (avg days) 32.5 33.6 32.4 35.4 

Other Investing CF 30 0 0 0 Inventory Turn (avg days) 28.2 30.7 31.2 32.6 

Net Investing CF (174) (212) (350) (60) Current Ratio (x) 5.1 14.7 9.8 8.6 

Div Paid (24) (80) (104) (105) Quick Ratio (x) 4.6 14.2 9.4 8.2 

Chg in Gross Debt (21) (2) (8) 0 Net Debt/Equity (X) CASH CASH CASH CASH 

Capital Issues 503 2,312 0 0 Capex to Debt (%) 2,043.7 2,654.8 N/A N/A 

Other Financing CF (48) 2 0 0 N. Cash/(Debt)PS (RMB cts) 27.0 104.1 71.8 87.6 

Net Financing CF 409 2,232 (112) (105) Opg CFPS (RMB cts) 11.5 18.8 24.6 31.1 

Net Cashflow 280 2,103 (757) 506 Free CFPS (RMB cts) (8.0) (5.1) (24.4) 22.3 

Quarterly / Interim Income Statement (RMB m) 


FY Dec 1Q2007 2Q2007 3Q2007 4Q2007 FY Dec 2006A 2007A 2008F 2009F 

Turnover 451 447 478 669 Revenues (RMB m) 

Cost of Goods Sold (260) (261) (269) (415) Shoes 1,063 1,349 1,759 2,232 

Gross Profit 191 187 210 254 Apparel 284 598 956 1,339 

Other Oper. (Exp)/Inc (100) (81) (104) (83) Accessories 65 99 149 209 

Operating Profit 91 106 105 171 

Other Non Opg (Exp)/Inc 0 0 0 0 

Associates & JV Inc 0 0 0 0 Total 1,412 2,046 2,865 3,780 

Net Interest (Exp)/Inc (6) (7) (6) (4) Gross Profit (RMB m) 

Exceptional Gain/(Loss) 0 0 0 0 Shoes 354 472 651 848 

Pre-tax Profit 85 99 99 167 Apparel 136 317 516 723 

Tax (6) (9) (8) (10) Accessories 31 53 80 113 

Minority Interest 0 0 0 0 

Net Profit 79 90 91 157 

Net profit bef Except. 79 90 91 157 Total 521 842 1,248 1,684 

EBITDA 91 106 105 171 Gross Profit Margins (%) 

Shoes 33.3 35.0 37.0 38.0 

Sales Gth (%) (6.1) (0.9) 6.9 39.8 Apparel 48.0 53.0 54.0 54.0 

EBITDA Gth (%) (14.0) 16.5 (0.7) 62.5 Accessories 47.5 53.6 54.0 54.0 

Opg Profit Gth (%) (14.0) 16.5 (0.7) 62.5 

Net Profit Gth (%) (17.9) 14.3 0.9 72.5 

Gross Margins (%) 42.3 41.7 43.8 38.0 Total 36.9 41.1 43.6 44.6 

Opg Profit Margins (%) 20.2 23.7 22.0 25.6 

Net Profit Margins (%) 17.4 20.1 19.0 23.4 


Page 15


Ezra Holding 

Bloomberg: EZRA SP | Reuters: EZRA.SI 

BUY S$1.84 FSSTI : 3,000.19 

Price Target : 12-month S$ 3.15 

Potential Catalyst: EPIC contracts 

Analyst 

Jesvinder Sandhu +65 6398 7965 

jesvinder@dbsvickers.com 


3.80 

3.30 

2.80 

2.30 

1.80 

1.30 

0.80 

S$ 

0.30 

74 

2004 2005 2006 2007 2008 

Ezra H o ld in g (LH S) R elative FSSTI IN D EX (R H S) 


R e la tiv e In d e x 

FY Aug (S$ m) 2006A 2007A 2008F 2009F 

Turnover 110 219 283 340 

EBITDA 34 62 101 157 


Net Profit 62 104 265 106 

Net Pft (Pre Ex.) 24 35 60 106 

EPS (S cts) 11.3 18.2 45.2 18.2 

EPS Pre Ex. (S cts) 4.4 6.1 10.3 18.2 

EPS Gth Pre Ex (%) 34 37 70 76 


Net DPS (S cts) 3.0 3.6 5.0 6.0 


PE (X) 16.2 10.1 4.1 10.1 

PE Pre Ex. (X) 41.4 30.3 17.8 10.1 

P/Cash Flow (X) 16.0 9.4 4.4 15.4 

EV/EBITDA (X) 32.3 19.7 13.7 9.4 

Net Div Yield (%) 1.6 1.9 2.7 3.3 

P/Book Value (X) 5.4 2.6 1.6 1.5 

Net Debt/Equity (X) 0.6 0.4 0.4 0.5 

ROAE (%) 37.7 34.8 49.8 15.4 


Sector : Oil & Gas 

Principal Business: Ezra is an integrated offshore solutions 

provider for the oil and gas industry in Asia Pacific region. 

524 

474 

424 

374 

324 

274 

224 

174 

124 

Growth underpinned by vessel 

deliveries 

Story: Ezra is positioned as an integrated solutions 

provider with its wide range of offshore vessels 

providing services throughout the field life cycle. 

Point: The outlook for Ezra is positive. Growth for 

the offshore chartering business will be underpinned by 

around eight vessel deliveries in FY08, three in FY09 and 

a further four in FY10, and rising rates especially for 

vessels with deepwater capabilities. Saigon Shipyard is 

expected to be fully operational by 2009, which should 

pave the way for more fabrication, installation and 

commissioning projects. The yard has won contracts 

worth US$130.2m for delivery in 2010 where 

US$103.1m is for a fabrication and assembly project 

with the balance for offshore transportation, installation 

and commissioning work in SEA oilfields. A second yard 

is being developed in Vung Tau. Both yards should be 

able to support revenues of US$300-400m pa when fully 

operational from FY09. 

Separately, EOC will see its first FPSO entering the fleet 

in FY08 and a pipelaying barge by 1Q09. EOC has 

indicated that its plan is to add one FPSO per year. 

Together with Ezra, EOC can leverage on its diversified 

fleet to gain more offshore transportation and 

installation projects. 

Relevance: We expect net earnings to rise 70% in FY08 

and 76% in FY09. Maintain Buy with a target price of 

S$3.15 based on 12x for chartering, 15x for EOC on 

FY09 earnings, and the current market price of Ezion. 

At A Glance 


Mkt. Cap (S$m/US$m) 

1,078 / 780 


Lionel Lee & family (%) 14.3 

Lee Kian Soo (%) 13.3 

DBS Bank Ltd (%) 7.0 


Avg. Daily Vol.(‘000) 1,681 

Page 16 




Ezra Holding 

Income Statement (S$ m) Balance Sheet (S$ m) 

FY Aug 2006A 2007A 2008F 2009F FY Aug 2006A 2007A 2008F 2009F 

Turnover 110 219 283 340 Net Fixed Assets 175 186 499 604 

Cost of Goods Sold (70) (133) (177) (193) Invts in Associates & JVs 52 43 75 126 

Gross Profit 40 86 107 147 Other LT Assets 15 107 107 107 

Other Opng (Exp)/Inc (15) (35) (50) (57) Cash & ST Invts 14 38 109 17 

Operating Profit 26 51 57 91 Other Current Assets 139 601 647 671 

Other Non Opg (Exp)/Inc 0 0 0 0 Total Assets 395 974 1,436 1,525 


Net Interest (Exp)/Inc (4) (7) (8) (7) ST Debt 63 102 102 102 




Minority Interest 0 (1) 0 0 Shareholder’s Equity 189 410 654 731 


Net Profit 62 104 265 106 Total Cap. & Liab. 395 974 1,436 1,525 


EBITDA 34 62 101 157 Non-Cash Wkg. Capital 71 255 288 300 

Net Cash/(Debt) (109) (152) (286) (377) 

Sales Gth (%) 52.1 98.3 29.5 19.9 

EBITDA Gth (%) 20.1 79.7 63.0 56.0 

Opg Profit Gth (%) 12.5 99.3 11.3 59.3 

Net Profit Gth (%) 128.5 68.5 154.6 (59.8) 


Cash Flow Statement (S$ m) 

Rates & Ratio 

FY Aug 2006A 2007A 2008F 2009F FY Aug 2006A 2007A 2008F 2009F 




Assoc. & JV Inc/(loss) (4) (2) (32) (52) ROAE (%) 37.7 34.8 49.8 15.4 


Other Operating CF (40) (71) (204) 0 ROCE (%) 8.4 10.7 6.9 6.9 

Net Operating CF 20 34 7 58 Div Payout Ratio (%) 27.2 20.0 11.1 33.0 

Capital Exp.(net) (117) (293) (120) (120) Net Interest Cover (x) 7.1 7.5 6.8 12.2 

Other Invts.(net) 7 (11) 0 0 Asset Turnover (x) 0.3 0.3 0.2 0.2 

Invts in Assoc. & JV (1) 0 0 0 Debtors Turn (avg days) 130.5 82.5 104.9 124.0 


Other Investing CF 161 (11) 0 0 Inventory Turn (avg days) 21.0 26.2 28.3 28.4 

Net Investing CF 50 (315) (120) (120) Current Ratio (x) 1.2 1.4 1.6 1.5 


Chg in Gross Debt (82) 218 204 0 Net Debt/Equity (X) 0.6 0.4 0.4 0.5 

Capital Issues 0 77 0 0 Capex to Debt (%) 95.0 153.6 30.4 30.4 

Other Financing CF 0 24 0 0 N. Cash/(Debt)PS (S cts) (19.7) (26.0) (48.8) (64.4) 

Net Financing CF (95) 306 183 (29) Opg CFPS (S cts) 4.5 8.7 9.3 13.3 

Net Cashflow (25) 25 71 (92) Free CFPS (S cts) (17.9) (45.3) (19.2) (10.7) 

Quarterly / Interim Income Statement (S$ m) 

PE (x) 

FY Aug 1H2006 2H2006 1H2007 2H2007 

(x) 

Turnover 36 74 68 151 20.0 

Cost of Goods Sold (20) (46) (42) (91) 

Gross Profit 17 28 26 59 

18.0 

Other Oper. (Exp)/Inc (12) (11) 0 (35) 16.0 



14.0 

Associates & JV Inc 7 1 1 1 12.0 

Net Interest (Exp)/Inc (2) (2) (3) (4) 


10.0 


Tax (1) (1) (1) (9) 

8.0 

Minority Interest 0 0 0 (1) 6.0 

Net Profit 34 28 23 81 

Net profit bef Except. 8 15 23 12 

4.0 

EBITDA 14 20 31 28 2.0 

Sales Gth (%) (27.2) 103.1 (7.8) 121.1 

EBITDA Gth (%) (26.0) 44.5 56.3 (8.9) 

Opg Profit Gth (%) (70.5) 266.3 52.3 (5.1) 

Net Profit Gth (%) 90.1 (18.1) (17.4) 251.3 

Gross Margins (%) 45.6 38.2 38.3 39.5 

Opg Margins (%) 12.9 23.3 38.5 16.5 



2004 2005 2006 2007 2008 

Page 17


Ferrochina 

Bloomberg: FRC SP | Reuters: FERR.SI 

BUY S$1.35 FSSTI : 3,000.19 

Price Target : 12-Month S$ 2.75 

Potential Catalyst: Earnings growth and execution 

Analyst 

Paul Yong CFA +65 6398 7951 

paulyong@dbsvickers.com 


2.70 

2.20 

1.70 

1.20 

0.70 

0.20 

S$ 

M ay-05 N ov-05 M ay-06 N ov-06 M ay-07 N ov-07 


Ferrochina (LH S) R e la tive FSST I IN D E X (R H S) 



Turnover 3,788 5,915 18,878 24,540 

EBITDA 422 596 1,644 2,113 

Pre-tax Profit 300 412 1,233 1,653 

Net Profit 269 381 1,110 1,455 

Net Pft (Pre Ex.) 269 381 1,110 1,455 

EPS (S cts) 14.7 14.7 27.0 35.3 

EPS Pre Ex. (S cts) 14.7 14.7 27.0 35.3 

EPS Gth Pre Ex (%) 84 0 83 31 


Net DPS (S cts) 1.5 1.0 2.0 2.0 


PE (X) 9.2 9.2 5.0 3.8 

PE Pre Ex. (X) 9.2 9.2 5.0 3.8 

P/Cash Flow (X) 13.2 11.3 4.3 3.3 

EV/EBITDA (X) 7.2 10.7 5.0 3.8 

Net Div Yield (%) 1.1 0.7 1.5 1.5 

P/Book Value (X) 2.9 0.9 0.8 0.6 


ROAE (%) 39.2 10.7 16.3 18.1 


Sector : Basic Materials 

Principal Business: Produces coated steel and related products in 

China 

319 

269 

219 

169 

119 

69 

19 

Plant visit reinforces our 

confidence in the group’s outlook 

Story: We paid a visit to FerroChina’s production plant in 

Changshu, Jiangsu in mid-March and also had the 

opportunity to meet up with the Group’s management. 

Point: FerroChina’s 3 rd reverse cold rolling mill is on track 

for commercial production by 2Q08 whilst two more 

galvanizing lines are expected to be up by the second half 

of the year. After speaking to management, we believe 

FerroChina’s sales growth in 2008 is likely to be driven 

mostly by higher volume sales of cold rolled steel coils 

(CRC), which are currently in short supply and are 

commanding attractive margins. Demand for high quality 

galvanized steel also continues to be firm and we expect 

GP per MT for this product to hold steady, with the 

Group’s blended GP per MT improving as more higher 

margin products such as pre-painted galvanized steel coils 

are produced. At the same time, we have also tweaked 

our assumptions to match the Group’s current segmental 

reporting format, which breaks down their products into 

a) galvanized and pre-painted steel coils, b) cold rolled 

steel coils and c) others (antisepticised steel coils and 

cutting & slitting services). We have raised ASP 

assumptions to reflect current price trends but kept GP per 

MT largely intact. In summary, we have cut our FY08 

earnings estimate by 2% and raised our FY09 earnings 

estimate by 3%. 

Relevance: We maintain our BUY call, with a marginally 

adjusted target price of S$2.75, based on 10x FY08 

earnings. At 5x FY08 PER and 3.8x FY09 PER, valuations 

are undemanding and the Group could be a take-out or 

investment target for upstream players looking to move 

into the downstream at this attractive price level. 

At A Glance 


Mkt. Cap (S$m/US$m) 1,079 / 780 


She Chun Tai (%) 16.3 

CMIA Capital Partner (%) 14.0 

Yedong Zhang (%) 5.5 


Avg. Daily Vol.(‘000) 7,393 

Page 18 




Ferrochina 



Turnover 3,788 5,915 18,878 24,540 Net Fixed Assets 562 3,581 4,105 3,980 

Cost of Goods Sold (3,420) (5,396) (17,148) (22,310) Invts in Associates & JVs 355 0 0 0 

Gross Profit 368 519 1,730 2,230 Other LT Assets 374 4,151 4,151 4,151 

Other Opng (Exp)/Inc (75) (85) (262) (342) Cash & ST Invts 366 585 716 1,013 

Operating Profit 293 435 1,468 1,888 Other Current Assets 1,327 4,566 8,275 10,757 



Net Interest (Exp)/Inc (99) (139) (235) (235) ST Debt 475 2,289 2,289 2,289 

Exceptional Gain/(Loss) 0 0 0 0 Other Current Liab 924 3,128 6,422 7,703 

Pre-tax Profit 300 412 1,233 1,653 LT Debt 446 1,167 1,167 1,167 




Net Profit 269 381 1,110 1,455 Total Cap. & Liab. 2,985 12,883 17,247 19,902 

Net Profit before Except. 269 381 1,110 1,455 

EBITDA 422 596 1,644 2,113 Non-Cash Wkg. Capital 403 1,438 1,853 3,054 

Net Cash/(Debt) (555) (2,871) (2,740) (2,442) 

Sales Gth (%) 73.3 56.1 219.1 30.0 

EBITDA Gth (%) 108.7 41.2 175.8 28.5 

Opg Profit Gth (%) 56.7 48.5 237.6 28.6 

Net Profit Gth (%) 84.1 41.7 191.1 31.1 



Rates & Ratio 


Pre-Tax Profit 300 412 1,233 1,653 Gross Margins (%) 9.7 8.8 9.2 9.1 



Assoc. & JV Inc/(loss) (106) (117) 0 0 ROAE (%) 39.2 10.7 16.3 18.1 

Chg in Wkg.Cap. (68) (306) (520) (1,276) ROA (%) 11.1 4.8 7.4 7.8 

Other Operating CF 32 (14) 0 0 ROCE (%) 20.7 7.6 13.7 15.6 

Net Operating CF 160 (20) 871 478 Div Payout Ratio (%) 10.0 10.6 7.3 5.5 


Other Invts.(net) (66) 156 0 0 Asset Turnover (x) 1.6 0.7 1.3 1.3 



Other Investing CF (3) 0 0 0 Inventory Turn (avg days) 61.7 89.6 52.3 58.4 



Chg in Gross Debt 7 684 0 0 Net Debt/Equity (X) 0.6 0.5 0.4 0.3 


Other Financing CF 401 (1) 0 0 N. Cash/(Debt)PS (RMB cts) (155.2) (355.8) (339.6) (302.7) 

Net Financing CF 370 652 (40) (81) Opg CFPS (RMB cts) 63.7 56.2 172.5 217.5 

Net Cashflow 56 75 131 298 Free CFPS (RMB cts) (0.4) (144.0) 21.2 46.9 

Quarterly / Interim Income Statement (RMB m) 



Turnover 1,124 1,004 1,162 2,626 Revenues (RMB m) 

Cost of Goods Sold (1,016) (911) (1,046) (2,424) GI and PPGI 2,689 6,595 8,100 10,800 

Gross Profit 108 93 116 202 Cold Rolled Steel 0 1,200 6,938 9,900 

Other Oper. (Exp)/Inc (25) (25) (29) (6) P/O and Others 1,100 3,248 3,840 3,840 



Associates & JV Inc 27 36 58 (4) Total 3,789 11,043 18,878 24,540 

Net Interest (Exp)/Inc (29) (29) (34) (48) Gross Profit (RMB m) 

Exceptional Gain/(Loss) 0 0 0 0 GI and PPGI 268 757 945 1,260 

Pre-tax Profit 81 75 112 145 Cold Rolled Steel 0 113 625 810 

Tax (9) (1) (10) (12) P/O and Others 99 162 160 160 


Net Profit 72 74 102 133 

Net profit bef Except. 72 74 102 133 Total 367 1,033 1,730 2,230 


GI and PPGI 10.0 11.5 11.7 11.7 

Sales Gth (%) (7.6) (10.6) 15.7 126.0 Cold Rolled Steel N/A 9.4 9.0 8.2 

EBITDA Gth (%) 3.6 (4.7) 32.2 52.1 P/O and Others 9.0 5.0 4.2 4.2 

Opg Profit Gth (%) (5.0) (17.9) 27.8 125.6 

Net Profit Gth (%) 30.7 2.6 37.6 30.5 





Page 19



Hong Kong / China 

Navigating through 

rough seas in Q2 

Given the uncertain international economic environment 

for 2008, investors have mostly focused on large 

capitalization and liquid stocks with defensive value. 

Mid/small cap companies may hardly out-perform, unless 

they are (i) more leveraged towards domestic 

consumption in China, (ii) less vulnerable to overseas 

economic shocks, such as telecom and infrastructure, or 

(iii) in industries supported by government policies, e g. 

environment-related. 

The Hong Kong Market continued to slide in 1Q 2008, with HSI down by19.2% 

from end-2007, as investor confidence continued to be undermined by fresh 

news of the troubled US financial sector, uncertain economic outlook, and rising 

raw material prices. The downfall of financial institutions, such as Bear Stearns, 

further fueled investor pessimism. 

Despite the bleak atmosphere, we believe there are still potential outperformers 

in the small/mid cap universe that are reasonably priced. We like Sino 

Biopharmaceutical, ZTE, Fortune REIT and Beijing Jingkelong, and Wumart. 

These stocks trade on attractive valuation and some offer dividend yields in 

excess of 5%. They are less affected by external economic uncertainty. 

. 

Dennis Lam · (852) 2971 1922 · dennis_lam@hk.dbsvickers.com 

Page 20 





MARKET OUTLOOK 

Review of 1Q08 

In 1Q08, the Hang Seng Index continued to slide to 

below 22,000 near the end of March, from 27,812 at 

end 2007. But profit-taking and general risk aversion 

towards riskier smaller/mid caps again saw the HS Small 

Cap Index undeperform the HSI since January. And 

negative news flow from liquidity problems for some 

overseas financial institutions in mid-March further 

scared investors away from mid/small cap companies.. 

HS Small Cap Index vs HSI 

Rebased (1 Oct 07 = 100) 

105 

100 

95 

90 

85 

80 

75 

70 

65 

HS Small Cap 

Index 

Hang Seng 

Index 



The turnover of small/mid caps in Q1 2008 relative to 

total market turnover shows much reduced activity than 

a year ago. The flight to quality behaviour in the market 

also resulted in a widening valuation gap between big 

and small/mid cap stocks in Q1 2008. 

For 2Q08, we expect small/mid cap stocks’ performance 

to remain suppressed for the same reasons as the 

previous quarter, which include : 

1) US sub-prime impact on the economy. The US 

financial market is facing unprecedented challenges. As 

house prices fall and defaults on mortgages continue 

to rise, the impact will certainly not be contained in the 

financial sector alone. The resultant impact on the 

economy could weaken demand, which can have 

negative implications on Asian exporters. 

2) China’s heightening austerity measures to cool 

down demand, particularly in the property sector. 

Despite robust growth in domestic consumption, the 

austerity measures could stunt growth of some sectors, 

such as industrial, and properties. 

3) Risks of rising raw material costs. Costs of raw 

materials, labour and utilities have been 

skyrocketing, which have been hitting the margins 

of many companies, especially those without 

economies of scale or strong franchises. 

In short, companies that are exposed to external risks or 

are targets of austerity policies will remain under 

pressure, despite the now depressed valuations. 

Confidence is unlikely to recover in the short term until 

there is clearer visibility of the magnitude of the impact 

of a US slowdown and China’s tightening measures. 

Small Cap Turnover as % of Total Market Turnover 

50% 

45% 

40% 

35% 

30% 

25% 

20% 

15% 

10% 

Mar-07 

May-07 

Jul-07 

Sep-07 

Nov-07 

Jan-08 

Mar-08 


Page 21



OUTLOOK 

For Q2 2008, small/mid-cap companies may not be able 

to attract significant investment interest yet. We 

continue to prefer domestic consumer counters and 

avoid exporters. Given an uncertain external 

environment, domestic counters that are relatively 

shielded from external risks would be favoured. Our 

recommended stock picks for Q2 2008 can be broadly 

categorised as follows: 

1) Chinese domestic consumption plays. 

Despite austerity measures to rein in some over-heated 

sectors, overall domestic consumption in China is 

expected to remain robust. Retail sales growth is still 

strong in the high teens. We believe companies that are 

in general retail will remain more defensive than others. 

In addition, improving living standards and the Chinese 

Government’s directive to boost domestic consumption 

should continue to support growth in the sector. 

2) Companies with strong financial position and 

stable recurrent cashflows 

During periods of tight credit and heightened volatility, 

companies with strong balance sheets are more likely to 

be able to weather the storm whilst retaining their ability 

to expand and acquire opportunistically. These are times 

when financially weak competitors can be scooped up at 

firesale prices. In a generally risk averse environment 

where safety is first and cash is king, cheap valuations 

and strong visible cashflows should be favored due to 

their downside protection. 

3) Policy supported industries. 

Premier Wen Jiabao highlighted several industries that 

would receive government support in his speech at the 

China National People’s Congress meeting. Amongst 

them, we are especially interested in the Agriculture, 

Pharmaceutical and Environemental Protection 

segments. 

i) Agriculture sector. Initiative to raise farmers’ 

income and improve overall infrastructure in rural 

areas will be the main directive. The government has 

pledged to spend RMb565b on this sector. 

ii) 

Pharmaceutical sector. An aging population 

coupled with rising demand for better 

pharmaceuticals and health care services will create 

opportunites for industry players. 

iii) Environmental sector. There are already directives 

in place that stress the importance of environmental 

protection and energy conservation. Companies that 

are either involved in the replacement of obsolete 

and polluting technologies and equipment, or the 

treatment of polluted resources will benefit. 

Under other market conditions, the above-mentioned 

industries could be interesting. But we find extra 

investment appeal in these sectors in the current 

unstable market situation that is fueled by (i) the credit 

crisis gripping the global economy, and (ii) China’s 

austerity measures for other sectors. 

PE Ratio: HS Small Cap Index vs HSI 

30 

25 

20 

15 

10 

5 

x 

Jul-04 

Sep-04 

Dec-04 

Feb-05 

May-05 

Jul-05 

Oct-05 

Jan-06 

Mar-06 

Jun-06 

Aug-06 

Nov-06 

Jan-07 

Apr-07 

Jul-07 

Sep-07 

Dec-07 

Feb-08 

Source: Datastream 

Hang Seng HK Small Cap (LHS) 

Hang Seng Index (RHS) 

Page 22



PE Gap: HS Small Cap Index vs HSI 

4 

2 

0 

(2) 

(4) 

(6) 

(8) 

Jul-04 

Oct-04 

Jan-05 

May-05 

Aug-05 

Source: Datastream 

STOCK PICKS 

Dec-05 

Mar-06 

Jun-06 

Oct-06 

Jan-07 

May-07 

Aug-07 

Dec-07 

Mar-08 

We believe domestic consumption and defensive 

counters will outpeform in Q2 2008 amid the current 

volatile environment. 

For domestic consumption plays, we favour Beijing 

Jinkelong. Meanwhile, Sino Biopharm is set to be one of 

the main beneficaires of policies intended to improve 

China’s healthcare system. ZTE and Fortune REIT are our 

defensive picks. 

BJKL operates a number of supermarkets , department 

stores and wholesale outlets in Beijing , China. The 

Company continues to improve its margins from better 

operating effciciency, improving economies of scale, as 

well as the development of its higher margin in-house 

brand. The Company will continue to expand via 

organic growth both in the Greater Beijing area and the 

surrounding region as well as strategic M&As. The 

nature of BJKL’s business is relatively defensive, yet the 

positive impact from a favourable consumer 

environment in the Greater Beijing area and the 

Olympics will offer good upside. At FY08PE of 10.2x, 

0.3x PEG, 6.1% and 67% discount to our target price of 

HK$11.86, we recommend BUY. 

Sino Biopharmaceutical. The company is a leader in 

China’s hepatitis and cardiovascular drug market. It has 

produced a series of best-selling drugs, has strong R&D 

capabilities, and a promising drug pipeline. Riding on 

this, Sino Biopharm should be able to deliver 20-30% y- 

o-y organic growth. The company also has a strong 

balance sheet that could be helpful in the acquisition of 

smaller companies in light of the current monetary 

environment. Trading at only 11.3x 2008 PE (or ex-cash 

PE of 7-8x) and offering over 5% dividend yield, Sino 

Biopharmeceuticals is attractive for a long-term 

investment. 

ZTE is a leading provider of optical transmission 

communications equipment and handsets. Due to its 

size, ZTE is able to realize good economies of scale to 

provide cost competitive products, and enjoy pricing 

advantages due to its strong R&D capabilities. As a 

market leader, ZTE should also benefit from the 

imminent telecom restructuring in China. The rollout of 

the TD-SCDMA network will boost industry capex. ZTE 

has also performed well in the export segment, and is 

fast becoming a prominent global telecom equipment 

vendor in India and Africa. Trading at only c.16x PE, its 

valuation is undemanding versus global peers. 

Fortune REIT owns 11 suburban malls. Fortune REIT is 

more widely exposed to categories such as food and 

beverage and supermarkets, and as such, should be 

relatively more resilient to the US-led global economic 

slowdown. In addition to the more defensive exposure, 

Fortune REIT has also completed a successful asset 

enhancement exercise at Waldorf Garden with enhanced 

rates, and will continue to improve other existing 

properties. We believe the relatively defensive nature of 

Fortune REIT will be favored in Q2. At a DDM-based 

target price of HK$6.83 and a return target of 34%, we 

have a BUY on Fortune REIT. 

Page 23



Stock Picks 

Mkt price Target 

Cap (HK$) Price % 

PER (x) DY (%) 

HK$mn 25-Mar (HK$) upsideRcmd 08F 09F 08F 09F 

1177 Sino Biopharm 3,328 1.47 2.73 85.7 B 11.3 8.8 5.3 6.8 With solid track record, strong 

financial position and R&D 

competence, SBP has all the 

necessary features to be the 

long-term winner in the fast 

growing, but consolidating 

pharmaceutical market in 

China. 

0763 ZTE 5,653 35.30 53.00 50.1 B 16.0 11.3 1.2 1.7 With long commitment in R&D 

and market expansion, ZTE 

began to get the payoff with 

accelerating revenue growth 

and rising economies of scale 

over the next three to five 

years. 

FRT SP Fortune REIT 4,126 5.08 6.83 34.4 B nmf nmf 7.1 7.1 With 11 suburban malls, 

Fortune REIT should be able to 

capitalise on retail sales 

growth. It has continued to 

unlock the hidden value of its 

assets through asset 

enhancement and repositioning 

initiatives. 

0814 BJ Jingkelong 754 4.14 11.86 186.5 B 10.2 8.1 5.7 7.2 An accelerated expansion plan 

in the past two years should 

bring about stronger earnings 

performance into 2008. 


Page 24



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Page 25


Beijing Jingkelong 

Bloomberg: 814 HK | Reuters: 0814.HK 

BUY HK$4.14 HSI : 22,465 

Price Target : 12-Month HK$ 11.86 

Potential Catalyst: Accelerated expansion & potential M&As 

Analyst 

Mavis Hui +852 2863 8879 

mavis_hui@hk.dbsvickers.com 


8.80 

7.80 

6.80 

5.80 

4.80 

HK$ 

3.80 

Sep-06 Feb-07 Jul-07 D ec-07 

Beijing Jingkelong (LHS) R e la tiv e H SI IN D E X (R H S) 


Relative 

Index 

FY Dec (RMBm) 2006A 2007A 2008F 2009F 

Turnover 4,531 5,641 6,929 7,882 

EBITDA 245 336 389 460 

Pretax Profit 205 255 281 342 

Reported Net Profit 100 125 151 190 

Underlying Net Profit^ 90 113 151 190 

Underlying EPS (HK$)* 0.26 0.32 0.41 0.51 

EPS Gth (%)* 20.5 23.0 26.7 25.6 

PE (x)* 15.8 12.9 10.2 8.1 

P/Cash Flow (x)* 10.7 48.1 3.8 4.1 

EV/EBITDA (x)* 6.8 6.3 4.5 3.4 

DPS (HK$)* 0.17 0.19 0.24 0.30 

Div Yield (%)* 4.0 4.7 5.7 7.2 

Net Gearing (%) 13.8 37.4 8.79 cash 

ROE (%) 13.2 10.0 9.9 10.4 

Book Value (HK$) 2.85 3.35 3.99 4.80 

P/Book Value (x) 1.5 1.2 1.0 0.9 

(^ 2006 Underlying net profit excluded net interest income from oversubscription 

of IPO in Sep 2006. 2007 underlying net profit excluded 

writeback of welfare prepayments.) 

(* Assume shares have been listed since Jan 2006.) 

Earnings Rev (%) - - 

Consensus EPS (HK$) 0.43 0.53 

219 

169 

119 

69 

19 

Outlook remains bright 

Story: Beijing Jingkelong (BJKL) recently reported its first 

set of results following its successful migration to 

mainboard listing on 26 February 2008. It booked a 

healthy y-o-y growth of 25% in both sales (RMB5.6bn) 

and net profit (RMB125m) for FY07. Excluding one-off 

IPO interest income, exchange losses and write-back of 

welfare prepayments, recurring earnings still grew 25% 

to RMB113m. Specifically, the growth in 4Q07 recurring 

earnings strengthened to 41% amid improving efficiency 

at store level. 

Point: We believe BJKL has comfortably achieved c.10% 

same-store sales growth and over 20% revenue growth 

in 1Q08. Its latest ‘‘Gold Long’’ department store 

(located in its Jiuxiangqiao Shopping Centre) might take 

longer to improve efficiency. But riding on robust 

domestic consumption growth especially in Beijing where 

there are huge asset investments prior to the 2008 

Olympic Games, its overall outlook remains positive. 

Relevance: Concerns about the US credit issue have 

dampened global market sentiment lately. Yet, BJKL’s 

sound fundamentals against the backdrop of a strong 

macro environment should support at least 30% earning 

CAGR for 2007-09. The share price recently plunged 

below IPO price to trade at 10.2x FY08 PE, 0.4x PEG, and 

65% discount to our target price of HK$11.86, offering 

a decent yield of 5.7%. We reiterate our BUY rating. 

At A Glance 

Issued Capital - H shares (m shs) 182 

- Non H shrs (m shs) 230 

H shs as a % of Total 44 

H Mkt Cap (HK$m/US$m) 754 / 97 

Major Shareholders (%) 

Chaoyang Auxillary 40.61 

Other domestic shareholders 15.20 

Major H Shareholders (%) 

Genesis Asset Managers 13.30 

JPMorgan Chase & Co. 12.09 

UOB Asset Management 11.05 

Montpelier Asset Management 8.05 

H Shares-Free Float (%) 55.51 

Avg Daily Volume (m shrs) 0.3 

Sector : Consumer 

Principal Business: One of the leading retailer and distributor of 

daily consumer products in the Greater Beijing Region, operating a 

chain of supermarkets, hypermarkets and convenience stores. 

Page 26 




Beijing Jingkelong 

Income Statement (RMBm) 

FY Dec 2006A 2007A 2008F 2009F 

Turnover 4,531 5,641 6,929 7,882 

EBITDA 245 336 389 460 

Depr/Amort (59) (74) (88) (99) 

Opg Profit 185 262 301 361 

Associates Inc (0) 0 0 0 

Interest (Exp)/Inc 11 (18) (20) (18) 

Exceptionals 9 12 - - 

Pre-Tax Profit 205 255 281 342 

Tax (74) (86) (81) (99) 

Minority Interest (32) (44) (49) (54) 

Net Profit 100 125 151 190 

Sales Growth (%) 9.9 24.5 22.8 13.8 

EBITDA Mgn (%) 5.4 6.0 5.6 5.8 

Opg Mgn (%) 4.1 4.6 4.3 4.6 

Tax Rate (%) 36.0 33.9 28.9 28.9 

Cash Flow Statement (RMBm) 

FY Dec 2006A 2007E 2008F 2009F 

Profit before tax 205 255 281 342 

Tax Paid (54) (63) (59) (71) 

Depr/Amort 60 74 88 99 

Chg in Wkg Cap (51) (229) 95 8 

Othr Non-Cash (26) (6) (0) (0) 

Operational CF 134 32 406 378 

Capex (278) (400) (234) (234) 

Assoc, MI, Invsmt 35 (40) 11 12 

Investment CF (243) (440) (224) (222) 

Net Chg in Debt 216 (90) 305 174 

New Capital 587 210 - - 

Dividend (73) (90) (107) (131) 

Other financing CF - - - - 

Financing CF 730 30 198 42 

Chg in Cash 621 (379) 380 198 

Chg in Net Cash 409 (379) 380 198 

Balance Sheet (RMBm) 

FY Dec 2006A 2007A 2008F 2009F 

Fixed Assets 1,028 1,305 1,452 1,589 

Other LT Assets 95 159 138 138 

Cash/ST Investments 842 502 882 1,080 

Other Current Assets 1,153 1,710 1,617 1,784 

Total Assets 3,118 3,675 4,090 4,591 

ST Debt 726 577 577 577 

Other Current Liab 1,015 1,576 1,734 1,916 

LT Debt 280 100 100 100 

Other LT Liab 22 16 17 19 

Minority Interests 90 163 180 198 

Shareholders' Equity 985 1,243 1,482 1,782 

Total Capital 3,118 3,675 4,090 4,591 

Share Capital (m) n.a. n.a. n.a. n.a. 

Net Cash/(Debt) (148) (526) (146) 52 

Working Capital 253 59 188 371 

Net Gearing (%) 13.8 37.4 8.79 cash 

Segmental Breakdown (RMBm) 

FY Dec 2006A 2007A 2008F 2009F 

- Hypermarket 701 712 942 1,218 

- Supermarket 1,419 1,764 1,949 2,227 

- Convenience store 177 213 247 276 

- Department store - - 201 261 

Retail 2,297 2,689 3,338 3,982 

Wholesale 2,229 2,948 3,586 3,896 

Others 5 4 4 4 

Total revenue 4,531 5,641 6,929 7,882 


Page 27


Fortune REIT 

Bloomberg: FRT SP | Reuters: FORT.SI 

BUY HK$5.08 STI: 3,000 

Price Target : 12-Month HK$ 6.83 

Potential Catalyst: better retail market; asset enhancment initiatives 

Analyst 

Jeff Yau CFA· (852) 2820 4912 · 

Jeff_yau@hk.dbsvickers.com 


7.50 

7.00 

6.50 

6.00 

5.50 

5.00 

HK$ 

4.50 

2004 2005 2006 2007 

Relative 

Index 

Fortune REIT (LHS) Relative HSI INDEX (RHS) 


FY Dec (HK$m) 2006A 2007A 2008F 2009F 

Turnover 614 615 655 703 

Net property income 438 450 483 505 


Net Profit 939 704 268 286 

Distribution income 277 285 294 295 

DPU (HK$) 0.34 0.35 0.36 0.36 

DPU Gth (%) 1.7 2.5 2.7 0.2 

Div Yield (%) 6.7 6.9 7.1 7.1 

Gross Gearing (%) 25 23 23 22 

Book Value (HK$) 8.53 9.04 9.43 9.87 

P/Book Value (x) 0.6 0.6 0.5 0.5 

238 

188 

138 

88 

38 

Improving fortune 

Story: With 11 suburban malls, Fortune REIT should be 

able to capitalise on retail sales growth. It has continued 

to unlock the hidden value of its assets through asset 

enhancement and re-positioning initiatives. 

Point: Total retail sales grew 12.8% in value in 2007, 

amid increasing local consumption and tourist spending. 

Therefore, rents of decentralised retail centres increased 

7.5%, according to Jones Lang LaSalle. Despite the USled 

global economic slowdown, we believe retail sales 

should hold up well in 2008. This is particularly true for 

food and beverage, and supermarket categories (Fortune 

REIT has wider exposure), which are usually more 

resilient. This should bode well for the income outlook of 

Fortune REIT. 

Fortune REIT has completed a very successful asset 

enhancement move at Waldorf Garden property in 2007, 

which involves subdivision of 33,000 sf restaurant space 

into smaller units. In view of strong take-up rates with 

substantially higher rents achieved for the enhanced 

zone, Fortune REIT has proceeded with reconfiguration 

of the adjacent 10,000sf space to further improve rental 

and strengthen retail offerings. It will also undertake 

asset enhancement diagnostic study to explore the 

potential of optimising rental return by fully utilising the 

open atrium at City One Shatin Property, to improve the 

accessibility of The Metropolis Mall and to add new retail 

area to capitalise on strong shopper traffic at Ma On 

Shan Plaza. 

Relevance: With high distribution yields of 7.1% for 

FY08 and FY09, Fortune REIT should be a safe haven in 

the prevailing shaky market. Our DDM-based target price 

of HK$6.83 suggests total return of 42%. Maintain BUY. 



Sector: REIT 

Principal Business: Leasing of retail rental properties 

At A Glance 


Mkt Cap (HK$m/US$m) 4,126 / 530 

Major Shareholders (%) 

Cheung Kong (Holdings) 32.36 

PGGM 14.77 

Hutchison Whampoa 6.93 

Temasek Holdings (Private) Ltd. 6.86 

DBS Bank 6.48 


Avg Daily Volume (m shrs) 0.6 

Page 28 




Fortune REIT 

Income Statement (HK$m) 

FY Dec 2006A 2007A 2008F 2009F 

Turnover 614 615 655 703 

Property op. expenses* (176) (165) (172) (198) 

Net property income 438 450 483 505 

Interest (Exp)/Inc (107) (113) (113) (112) 

Exceptional gain/(loss) 707 461 0 0 

Total trust (expenses)/ 

income (39) (34) (37) (38) 

Pre-Tax Profit 998 764 333 355 

Tax (59) (60) (65) (69) 

Minority Interest - - - - 

Net Profit 939 704 268 286 

Distribution income 277 285 294 295 

Revenue Growth (%) 35.6 0.1 6.6 7.4 

Net Property Inc. Gth (%) 35.4 2.9 7.4 4.6 

Distr. Inc Gr (%) 27.6 3.0 3.3 0.2 

DPU Growth (%) 1.7 2.5 2.7 0.2 

* Include manager's performance fee 

Balance Sheet (HK$m) 

FY Dec 2006A 2007A 2008F 2009F 

Fixed Assets 9,235 9,713 10,081 10,436 

Other LT Assets 0 - - - 

Cash/ST Investments 252 242 242 253 

Other Current Assets 31 37 39 41 

Total Assets 9,518 9,992 10,361 10,730 

ST Debt - - - 1 

Other Current Liab 198 199 205 210 

LT Debt 2,335 2,339 2,343 2,346 


Minority Interests - - - - 

Unitholders' Fund 6,866 7,306 7,666 8,025 


Share Capital (m) 807 812 816 816 

Total Debt (2,335) (2,339) (2,343) (2,347) 


Book NAV (HK$) 8.53 9.04 9.43 9.87 

Cash Flow Statement (HK$m) Gross rental income breakdown (%) 

FY Dec 2006A 2007A 2008F 2009F 

FY Dec 2006A 2007A 2008F 2009F 

Profit before tax 998 764 333 355 

Tax Paid (39) (49) (65) (69) 

Depr/Amort 0 0 0 0 

Chg in Wkg Cap 18 (4) 3 3 

Othr Non-Cash (564) (320) 139 138 

Operational CF 413 391 410 427 

Capex 66 (17) (15) (15) 

Assoc, MI, Invsmt 7 8 8 8 

Investment CF 72 (10) (7) (7) 

Net Chg in Debt (48) - - - 

New Capital - - - - 

Dividend (279) (278) (289) (297) 

Other financing CF (119) (113) (113) (112) 

Financing CF (447) (391) (403) (409) 

Chg in Cash 38 (9) (0) 11 

Chg in Net Cash 87 (9) (0) 11 


Metropolis 19 15 15 15 

Ma On Shan Plaza 20 22 23 23 

Household Center 4 4 3 3 

Smartland 5 4 4 4 

Jubilee Court Shopping 

Centre 4 4 4 4 

City One Shatin property 35 36 35 34 

Waldorf Garden 6 6 8 9 

Tsing Yi Square property 4 4 4 4 

Centre de Laguna property 2 2 2 2 

Lido Garden property 1 1 1 1 

Rhine Garden 1 1 1 1 

100 100 100 100 

Page 29


Sino Biopharmaceutical 


BUY HK$1.47 HSI : 22,465 

Price Target : 12 month: HK$2.73 

Potential Catalyst: Strong earnings growth prospect, M&A, attractive 

valuation 

Analyst 

Gideon Lo CFA +852 2863 8880 

gideon_lo@hk.dbsvickers.com 


2.30 

2.10 

1.90 

1.70 

1.50 

1.30 

1.10 

0.90 

0.70 

HK$ 

0.50 

90 

2004 2005 2006 2007 2008 

Sino Biopharm aceutical (LHS) R e la tiv e H SI IN D E X (R H S) 


Relative 

Index 

FY Dec (HK$m) 2006A 2007A 2008F 2009F 

Turnover 735 1,164 1,579 2,088 

EBITDA 148 292 410 577 


Net Profit 141 224 294 377 

EPS (HK$) 0.06 0.10 0.13 0.17 

EPS Gth (%) (91.0) 58.9 31.0 28.4 

PE (x) 23.6 14.8 11.3 8.8 

P/Cash Flow (x) 25.6 5.7 4.2 2.9 

EV/EBITDA (x) 11.9 6.2 5.0 4.0 

DPS (HK$) 0.05 0.06 0.08 0.10 

Div Yield (%) 3.4 4.1 5.3 6.8 

Net Gearing (%) cash cash cash cash 

ROE (%) 7.0 10.6 12.6 14.5 

Book Value (HK$) 0.8 0.9 0.9 1.0 

P/Book Value (x) 1.7 1.6 1.6 1.5 



Sector : Health Care 

Principal Business: Leading pharmaceutical company for hepatitis 

and cardio cerebral medicines in PRC. It is also engaged in the coal 

to chemical project in 

390 

340 

290 

240 

190 

140 

Hybrid of high growth and 

defensiveness 

Story: Sino Biopharmaceutical (SBP) is our top pick in the 

pharmaceutical sector. With solid track record, strong 

financial position and R&D competence, SBP has all the 

necessary features to be the long-term winner in the fast 

growing, but consolidating pharmaceutical market in 

China. 

Riding on its leading position in China’s hepatitis and 

cardiovascular drug markets as well as its strong new 

drug pipeline, we expect the company to sustain 20- 

30% annual organic earnings growth. More upside 

potential will come from its M&A initiatives. 

Point: Not only is its attractiveness coming from its high 

growth potential, we believe SBP is a good defensive play 

amid the recent global financial market turmoil, 

stemming from earnings resilience of the industry and its 

strong financial position. 

With over HK$1.7bn net cash on hand, we believe the 

tightening monetary policy in China will facilitate the 

company’s M&A plan this year, as many smaller players 

will be forced out of the market by stringent regulation. 

Relevance: We maintain our BUY rating for SBP, despite 

its relatively lack of trading liquidity. Trading at 11.3x 

2008 PE with over 5% dividend yield, we believe it is 

attractive for long-term investors. 

With ex-cash PE of only 7-8x, it is hard to see any further 

downside from the current level. The broad market 

correction should provide an attractive opportunity to 

accumulate this illiquid trading stock at undemanding 

valuation. 

At A Glance 


Mkt. Cap (HK$m/US$m) 3,328 / 428 


Chairman Tse Ping (%) 47.7 

The Goldman Sachs Group (%) 9.0 

Chearavanont Dhanin (%) 6.3 


Avg. Daily Vol.(‘000) 425 

Page 30 




Sino Biopharmaceutical 

Income Statement (HK$ m) Balance Sheet (HK$ m) 


Turnover 735 1,164 1,579 2,088 

EBITDA 148 292 410 577 

Depr/Amort (22) (29) (38) (38) 

Opg Profit 126 263 373 539 

Associates Inc 1 0 0 0 

Interest (Exp)/Inc 78 79 77 65 

Exceptionals - - - - 

Pre-Tax Profit 205 342 450 604 

Tax (22) (34) (49) (79) 


Net Profit 141 224 294 377 

Sales Growth (%) (3) 58 36 32 

Net Profit Gr (%) (90.8) 58.9 31.0 28.4 

EBITDA Mgn (%) 20.1 25.1 26.0 27.7 

Opg Mgn (%) 17.1 22.6 23.6 25.8 

Tax Rate (%) 10.8 9.9 11.0 13.0 

Fixed Assets 238 339 654 1,042 

Other LT Assets 117 182 171 160 

Cash/ST Investments 1,684 1,776 1,597 1,472 

Other Current Assets 176 298 439 580 

Total Assets 2,215 2,596 2,862 3,254 

ST Debt - 37 4 4 

Other Current Liab 171 287 371 468 

LT Debt - 21 12 8 


Minority Interests 123 201 308 456 

Shareholders' Equity 1,909 2,019 2,137 2,288 


Share Capital (m) 2,264 2,264 2,264 2,264 

Net Cash/(Debt) 1,684 1,717 1,581 1,460 



Cash Flow Statement (HK$ m) 

FY Dec 2006A 2007E 2008F 2009F 


Tax Paid (18) (28) (40) (64) 

Depr/Amort 22 29 38 38 

Chg in Wkg Cap (10) (19) (65) (54) 

Othr Non-Cash 70 232 359 574 

Operational CF 269 557 742 1,099 


Assoc, MI, Invsmt (25) - (376) (376) 

Others (58) (345) (278) (579) 

Investment CF (137) (388) (701) (994) 

Net Chg in Debt - 58 (42) (4) 

New Capital 3 - - - 

Dividend (147) (136) (176) (226) 

Financing CF (144) (77) (219) (230) 

Chg in Cash (12) 92 (178) (125) 

Chg in Net Cash (12) 33 (136) (121) 

Rates & Ratio 

FY Dec 2006A 2007E 2008F 2009F 

ROE (%) 7.0 10.6 12.6 14.5 

ROA (%) 6.5 9.3 10.8 12.3 

Net Mgn (%) 19.2 19.3 18.6 18.1 

Div Cover (x) 1.2 1.7 1.7 1.7 

Intr Cover (x) 67.1 113.5 191.5 715.4 

Asset Turn (x) 0.3 0.5 0.6 0.7 

Asset/Debt (x) n.a. 44.5 178.9 271.2 

Gearing (%) 0.0 2.6 0.7 0.4 


Debt/EBITDA (x) 0.0 0.2 0.0 0.0 

Debt/MktCap (x) 0.0 0.0 0.0 0.0 

Capex/Debt (x) n.a. 0.7 2.9 3.2 

Capex/Sales (%) 7.3 3.7 3.0 1.8 

EV (HK$m) 1,767 1,812 2,054 2,324 

EV/EBITDA (x) 11.9 6.2 5.0 4.0 

Interim Income Statement (HK$ m) 

FY Dec 1H2005 2H2005 1H2006 2H2006 

Turnover N/A 392 331 404 


Gross Profit 291 326 263 333 

Other Oper. (Exp)/Inc (214) (309) (223) (247) 




Net Interest (Exp)/Inc 2 17 36 42 

Exceptional Gain/(Loss) 100 1,458 0 0 

Pre-tax Profit 179 1,492 76 129 

Tax (10) (8) (4) (18) 


Net Profit 104 1,429 57 84 

Net profit bef Except. 3 (29) 57 84 

EBITDA 86 29 51 98 


FY Dec 2006A 2007A 2008F 2009F 

Turnover 

Hepatitis medicines 482 688 929 1,222 

Cardio cerebral medicines 156 262 341 443 

Others 96 214 309 424 

Total 735 1,164 1,579 2,088 

Sales Gth (%) N/A 7.8 (15.7) 22.1 

EBITDA Gth (%) N/A (65.9) 74.4 92.3 

Opg Profit Gth (%) N/A (78.0) 134.7 116.9 

Net Profit Gth (%) N/A 1,280.4 (96.0) 45.8 

Gross Margins (%) 79.9 83.1 79.4 82.5 




Page 31


ZTE 


BUY HK$35.30 HSI : 22,465 

Price Target : 12-month HK$ 53.00 

Potential Catalyst: Forthcoming telecom restructuring, expansion in 

TD-SCDMA networks 

Analyst 

Steven Liu CFA, +852 2971 1780 

steven_liu@hk.dbsvickers.com 


HK$ 

53.50 

48.50 

43.50 

38.50 

33.50 

28.50 

23.50 

18.50 

2004 2005 2006 2007 


ZTE (LHS) R e l a t iv e H S I IN D E X ( R H S ) 

Relative 

Index 


Turnover 23,032 34,777 42,134 52,791 

EBITDA 1,646 2,866 4,126 5,612 

Pre-tax Profit 1,031 1,727 2,724 3,932 

Net Profit 767 1,252 1,920 2,722 

Net Pft (Pre Ex.) 767 1,252 1,920 2,722 

EPS (HK$) 0.89 1.45 2.22 3.15 

EPS Gth (%) (40.4) 63.2 53.4 41.8 

Diluted EPS (HK$) 0.89 1.45 2.22 3.15 

DPS (HK$) 0.17 0.27 0.42 0.59 

BV Per Share (HK$) 12.45 13.73 15.68 18.41 

PE (X) 40.0 24.5 16.0 11.3 

PE Pre Ex. (X) 40.0 24.5 16.0 11.3 

P/Cash Flow (X) 24.2 14.8 10.4 7.7 

EV/EBITDA (X) 18.9 11.6 8.2 6.2 

Net Div Yield (%) 0.5 0.8 1.2 1.7 

P/Book Value (X) 2.8 2.6 2.3 1.9 

Net Debt/Equity (X) CASH 0.1 0.1 0.2 

ROAE (%) 7.3 11.1 15.1 18.5 

Earnings Rev (%): - - - 

Consensus EPS (HK$): 1.97 2.61 

Sector : Telecom Equipment 

Principal Business: One of the leading provider of high technology 

telecommunication equipment in China 

219 

169 

119 

69 

19 

Stronger growth ahead 

Story: Stronger-than-expected FY07 results are further 

evidence of ZTE’s rapid recovery in earnings capability. 

Stronger growth in FY08 and beyond would be 

underpinned by TD-SCDMA trial network expansion, 

increased capex by China telcos, as well as sustainable 

overseas growth momentum driven by India, Africa and 

two new markets in Latin America and Russia. 

Point: Though we have maintained our forecast, due to 

continued uncertainties in the TD-SCDMA network 

expansion, we see high possibility in raising our forecasts 

in the near term should there be any progress in the 

restructuring of China’s telecom industry. 

Relevance: The counter is trading at 16x FY08 PE, which 

is undemanding as compared with its larger global peers. 

We believe ZTE deserves a re-rating for its strong 

presence in the rapidly growing emerging markets, as 

well as its dominance in the potentially huge TD-SCDMA 

equipment market in China. We have maintained our 

target price of HK$53, based on our DCF valuation. 

Looking ahead, we see no major concerns in ZTE’s 

fundamentals. Downside to our valuation might come 

from potential devaluation across all sectors due to the 

US credit crunch. However, we see great potential for 

ZTE to immune from this devaluation, in view of the 

positive catalysts from the imminent telecom 

restructuring move and ZTE’s rapid emergence as a 

leading global telecom equipment vendor. Maintain 

BUY. 

At A Glance 

Issued Capital - H shares (m shs) 160 

- Non H shrs (m shs) 799 

H shs as a % of Total 17 

H Mkt. Cap (HK$m/US$m) 


5,653 / 727 

Zhongxingxin (%) 35.1 

Major H Shareholders (%) 

FIL Limited (%) 9.9 

Allianz Aktiengesellschaft (%) 6.6 

Deutsche Bank (%) 9.6 

Halbis Capital Management (%) 6.9 

H Shares-Free Float (%) 67.1 

Avg. Daily Vol.(‘000) 2,312 

Page 32 




ZTE 



Turnover 23,032 34,777 42,134 52,791 Net Fixed Assets 3,053 3,462 3,776 4,013 


Gross Profit 7,781 11,362 14,933 19,039 Other LT Assets 2,356 2,446 2,594 2,846 

Other Opng (Exp)/Inc (6,653) (9,360) (11,893) (14,734) Cash & ST Invts 4,311 3,897 3,524 3,189 

Operating Profit 1,128 2,002 3,040 4,305 Other Current Assets 17,010 25,097 30,410 38,414 



Net Interest (Exp)/Inc (105) (298) (342) (405) ST Debt 1,099 3,542 3,686 4,098 

Exceptional Gain/(Loss) 0 0 0 0 Other Current Liab 11,102 16,580 20,079 25,179 

Pre-tax Profit 1,031 1,727 2,724 3,932 LT Debt 3,078 2,045 1,857 1,763 


Minority Interest (137) (199) (287) (407) Shareholder’s Equity 10,764 11,872 13,557 15,919 

Preference Dividend 0 0 0 0 Minority Interests 562 761 1,048 1,455 

Net Profit 767 1,252 1,920 2,722 Total Cap. & Liab. 26,787 34,983 40,412 48,601 

Net Profit before Except. 767 1,252 1,920 2,722 

EBITDA 1,646 2,866 4,126 5,612 Non-Cash Wkg. Capital 5,907 8,517 10,331 13,235 

Net Cash/(Debt) 134 (1,690) (2,019) (2,673) 

Sales Gth (%) 6.7 51.0 21.2 25.3 

EBITDA Gth (%) (22.1) 74.2 44.0 36.0 

Opg Profit Gth (%) (34.8) 77.5 51.9 41.6 

Net Profit Gth (%) (40.4) 63.2 53.4 41.8 



Rates & Ratio 


Pre-Tax Profit 1,031 1,727 2,724 3,932 Gross Margins (%) 33.8 32.7 35.4 36.1 

Dep. & Amort. 612 957 1,194 1,430 Opg Profit Margin (%) 4.9 5.8 7.2 8.2 


Assoc. & JV Inc/(loss) (8) (24) (26) (32) ROAE (%) 7.3 11.1 15.1 18.5 

Chg in Wkg.Cap. (3,411) (2,770) (2,048) (3,259) ROA (%) 3.1 4.1 5.1 6.1 


Net Operating CF (1,750) (385) 1,329 1,269 Div Payout Ratio (%) 18.8 18.8 18.8 18.8 

Capital Exp.(net) (1,116) (1,249) (1,374) (1,512) Net Interest Cover (x) 10.8 6.7 8.9 10.6 




Other Investing CF 8 (46) (48) (51) Inventory Turn (avg days) 56.5 49.6 58.8 60.5 

Net Investing CF (1,115) (1,295) (1,423) (1,562) Current Ratio (x) 1.7 1.4 1.4 1.4 


Chg in Gross Debt 1,945 1,410 (44) 318 Net Debt/Equity (X) CASH 0.1 0.1 0.2 


Other Financing CF (9) 0 0 0 N.Cash/(Debt)PS (RMB) 14.0 (176.1) (210.4) (278.5) 

Net Financing CF 1,610 1,266 (279) (42) Opg CFPS (RMB) 173.1 248.6 351.9 472.0 

Net Cashflow (1,255) (414) (373) (336) Free CFPS (RMB) (298.7) (170.3) (4.8) (25.3) 

Interim Income Statement (RMB m) 


FY Dec 2H2005 1H2006 2H2006 1H2007 FY Dec 2006A 2007A 2008F 2009F 

Turnover 11,273 10,589 12,443 15,232 Revenues (RMB m) 

Cost of Goods Sold (7,580) (6,895) (8,356) (9,842) Wireless 9,187 14,855 19,463 25,641 

Gross Profit 3,693 3,694 4,087 5,390 Wireline switch and acess 2,279 1,350 1,027 730 

Other Oper. (Exp)/Inc (2,798) (3,188) (3,417) (4,661) Optical and data 3,875 6,370 6,663 8,207 

Operating Profit 895 507 670 729 Software and services 3,171 4,560 5,837 7,354 

Other Non Opg (Exp)/Inc 0 0 0 0 Handsets 4,519 7,642 9,144 10,858 

Associates & JV Inc (5) 1 7 2 Total 23,032 34,777 42,134 52,791 



Pre-tax Profit 789 453 577 611 

Tax (105) (52) (75) (55) 


Net Profit 627 347 420 460 


EBITDA 891 507 677 731 

Sales Gth (%) 9.4 (6.1) 17.5 22.4 

EBITDA Gth (%) (0.1) (43.0) 33.5 7.9 

Opg Profit Gth (%) 0.5 (43.4) 32.3 8.8 

Net Profit Gth (%) (5.0) (44.7) 21.0 9.5 

Gross Margins (%) 32.8 34.9 32.8 35.4 




Page 33



Malaysia 

Attractive values 

The FBM Small Cap Index (FBMSC) underperformed the 

FBM100 and benchmark Kuala Lumpur Composite Index 

(KLCI) in 1Q08. In view of the external uncertainties and 

surprise General Election results in 1Q08, there was 

reduced appetite for small-mid caps. 

Our projections show stronger growth for the small-mid caps of 23% versus 

18% for large caps. Together with the 1Q08 underperformance, the gap in PE 

multiple for small-mid caps against the large caps has widened. Small-mid caps 

in our universe are trading at 9x 08 earnings, representing a 34% discount to 

large cap multiples (8x 09 earnings, 40% discount). 

In terms of picks, we like Alam Maritim - a beneficiary of Petronas’ preference 

for Malaysian-flagged support vessels- that is now trading at an attractive PEG 

multiple of 0.2x. For Litrak, toll collection on the Damansara Puchong Highway 

is a steady business that generates strong cashflows. We foresee that this stock 

has the potential to significantly improve yields. 

Wong Ming Tek . (603) 2711 2222 . mingtek@hwangdbsvickers.com.my 

Page 34 






The FBM Small Cap Index (FBMSC) underperformed the 

FBM100 and benchmark Kuala Lumpur Composite Index 

(KLCI). For the quarter, the FBMSC fell 20% versus the 

FBM100’s 14% loss while the KLCI was down 15%. In 

view of the external uncertainties and surprise General 

Election results in 1Q08, there was reduced appetite for 

small-mid caps. 

During the quarter, the star performer in our small-mid 

cap universe was Southern Steel with a 19% gain. The 

stock has been registering better than expected profits 

for the last two quarters on higher steel prices. 

The top loser was MRCB with a 46% loss. The stock did 

well in Jan 08 and hit a high of RM3.04 (on 11 Jan). 

However, it then succumbed to profit taking and was hit 

after the General Elections on concerns that the Penang 

Monorail project may be delayed after the opposition 

won the mandate to form the Penang state government. 

We believe the stock is oversold, given the value of its 

assets such as KL Sentral. 

FBM Small Cap (FBMSC) underperformed KLCI 

Value traded for FBMSC declining as % of total market 

value traded 

% 

180 

% 

80 

70 

160 

60 

140 

120 

50 

40 

30 

100 

20 

80 

Jan-07 Mar-07 May-07 Jul-07 Sep-07 Nov-07 Jan-08 Mar-08 

KLCI FBM Small Cap FBM 100 

10 

- 

Jan-07 Mar-07 May-07 Jul-07 

Sep-07 Nov-07 Jan-08 Mar-08 


Page 35



GROWTH AND VALUATIONS 

Our projections show stronger growth for the smallmid 

caps. For FY08, small-mid cap universe growth is 

driven by the construction sector, as the high 

orderbooks are translated into earnings. We also 

expect strong contributions from the plantation sector 

on higher CPO prices. However, we note the absolute 

net profit for the small-mid caps is at c.7% of our 

total universe net profit. Hence, the overall earnings 

growth for our total universe of 18% for 08 and 10% 

for 09 is still largely driven by the large caps. 

The small-mid caps underperformance during the 

quarter has widened the gap in PE multiple against 

the large caps. For our universe, small-mid caps are 

trading at 9x 08 earnings, representing a 34% 

discount to large cap multiples. For FY09, small-mid 

caps are trading at 8x earnings, which is a 40% 

discount to large cap multiples. 

Growth and Valuation -- Large Caps vs Small-Mid Caps 

Earnings growth (%) 

PE (x) 

2008 2009 2008 2009 

Banks 29.2 12.2 12.2 10.9 

Consumer 46.6 35.7 24.9 18.4 

Media (65.6) 26.7 58.7 46.3 

Motor (403.6) 25.5 16.6 13.2 

Oil & Gas 107.7 69.1 14.3 8.5 

Conglomerates 24.3 14.9 17.6 15.3 

Construction 76.1 22.2 14.2 11.7 

Concessionaires 4.3 4.2 12.3 11.8 

Gaming 13.0 4.7 14.1 13.5 

Plantation 40.0 6.4 18.8 17.6 

Power 0.7 (2.1) 9.2 9.4 

Property 7.1 11.9 13.8 12.4 

Telecommunication 16.3 10.8 14.4 13.0 

Transport/ Logistics 8.2 8.0 10.4 9.7 

Large cap 17.6 9.3 13.9 12.7 

Consumer 15.8 12.0 7.5 6.7 

Manufacturing/ Industrial 0.4 16.7 6.5 5.5 

Motor 13.3 10.3 6.9 6.2 

Oil & Gas 20.6 15.4 12.7 11.0 

Construction 319.3 23.0 8.5 7.0 

Concessionaire 12.6 11.0 17.4 15.6 

Gaming 9.7 13.6 7.0 6.1 

Plantation 49.7 8.6 8.3 7.6 

Property 20.7 30.0 10.4 8.0 

Telco 17.6 23.1 16.8 13.6 

Technology 55.0 45.8 3.1 2.1 

Transport 13.9 16.5 4.7 4.1 

Small cap 23.2 20.1 9.2 7.6 

DBS Vickers Universe 18.0 10.0 13.6 12.3 


Page 36



STRATEGY AND STOCK PICKS 

A. Review 

Review: 1Q08 Small-Mid Cap Picks 

25 Mar 08 17 Dec 07 Change % 

(RM) 

(RM) 

Wah Seong 2.20 3.94 (44.2) 

TRC Synergy 1.75 2.20 (20.5) 


Following the surprise General Election results, 

construction stocks including TRC Synergy have taken 

a beating. The stock is off 21% since end last year on 

concerns that the Ninth Malaysia Plan projects would 

be delayed. We believe that overpenalises TRC, as it 

still has a healthy and outstanding orderbook of 

c.RM0.9b. 

Wah Seong’s share price corrected as it announced 

that it was not participating in the Nordstream project. 

In an announcement to Bursa Malaysia, Wah Seong 

said that the contract value awarded was below the 

level required to successfully undertake the project. 

We believe the selldown in Wah Seong’s share price 

was excessive. Fundamentals for the Group remain 

intact and Wah Seong remaining as one of the three 

largest oil & gas pipe coating players in the world. 

B. 2Q08 Recommendation 

2Q08 Small-Mid Cap Picks 

Mkt Target Val/Day 

Cap Price Price Upside PE EV/EBITDA P/BV Div Yld ROE 6m 

Company FYE (RMm) (RM) (RM) (%) 09F 09F 09F 09F 09F (RM'000) 

Litrak Mar 1,762 3.58 4.30 20.1 15.7x 8.9x 1.8x 2.0% 11.7% 424 

Alam Maritim Dec 898 1.85 3.20 73.0 9.8x 8.3x 2.5x 0.6% 28.5% 365 


The underperformance of small-mid caps in 1Q08 has 

brought valuations to attractive levels. In particular, we 

like several themes including oil & gas and highyielding 

stocks. 

Oil & gas: We continue to like the oil & gas sector, as 

we foresee higher spending for the sector. We expect 

commencement of several projects in the region this 

year that should be positive for fabricators, process 

equipment manufacturers and pipe suppliers. We like 

Alam Maritim in the offshore marine segment. All its 

vessels are Malaysian-flagged, making Alam a 

beneficiary of Petronas’ preference for Malaysianflagged 

support vessels. The stock is now trading at 

attractive PEG multiple of 0.2x. Other oil & gas picks 

include Wah Seong and Petra Perdana. 

High yielding: At current Evergreen Fibreboard (5.8%) 

provide attractive yield. For Litrak, toll collection on the 

Damansara Puchong Highway is a steady business that 

generates strong cashflows. We foresee that this stock 

has the potential to significantly improve yields. 

We note that Sunrise, CBIP, Evergreen Fibreboard and 

TRC Synergy currently trade at PEG multiples of below 

0.3x. 

Page 37



Selected small-mid caps (sorted by market capitalisation) 

Mkt 

Cap 

Price 

25-Mar 

Target 

Price 

Target 

Return 

Earnings 

growth (%) 

(RMm) (RM) (RM) 

CAGR 

(%) 

(%) 08F 09F 07- 

09F 

PER (x) Div Yield (%) 

08F 09F 08F 09F 

Litrak 1,762 3.58 4.30 20.1 12.6 11.0 11.8 17.4 15.7 2.0 2.0 

Wah Seong Corp 1,454 2.20 3.00 36.4 (19.8) 2.2 (9.5) 13.5 13.2 0.8 0.8 

MRCB 1,261 1.39 2.25 61.9 126.4 20.3 65.0 13.6 11.3 1.8 2.2 

TSH Resources 1,115 2.70 5.00 85.2 47.7 9.6 27.2 9.1 8.3 1.9 1.9 

Petra Perdana 1,101 3.70 4.60 24.3 13.3 5.5 9.3 11.3 10.7 0.1 0.1 

Kinsteel 1,048 1.16 1.70 46.6 14.3 24.1 19.1 8.3 6.7 1.3 1.3 

Pelikan Int’l 987 3.38 5.70 68.6 15.8 12.0 13.9 9.1 8.1 3.9 4.4 

Sunrise 959 2.14 4.00 86.9 4.6 68.2 32.7 5.9 5.0 - 7.3 

Alam Maritim 898 1.85 3.20 73.0 38.3 31.0 34.6 12.8 9.8 0.6 0.6 

Southern Steel 866 2.14 3.00 40.2 (26.4) 7.1 (11.2) 6.4 6.0 3.5 3.5 

Eastern & Oriental 754 1.80 3.80 111.1 (12.0) 25.4 5.0 12.1 9.6 1.4 1.4 

Sunway Holdings 723 1.32 2.40 81.8 n.m. 33.4 n.m. 9.6 7.2 - - 

Evergreen F’board 624 1.30 2.50 92.3 10.5 17.3 13.9 5.0 4.3 5.8 6.9 

CB Industrial 553 4.02 7.90 96.5 57.2 25.4 40.4 7.6 6.1 3.9 4.9 

Axis REIT 435 1.70 2.60 52.9 (10.8) (18.6) (14.8) 17.4 21.4 5.5 4.5 

TRC Synergy 247 1.75 2.95 68.6 45.9 17.7 31.1 5.2 4.4 4.8 5.6 


Page 38




Page 39


Alam Maritim 

Bloomberg: AMRB MK | Reuters: ALMT.KL 

BUY RM1.85 KLCI : 1,229.95 

Price Target : 12-Month RM 3.20 (Prev RM 3.10) 

Potential Catalyst: New vessels and contracts, increase in charter rates 

Analyst 

June Ng +603 2711 2222 

june@hwangdbsvickers.com.my 

Iman Zaman +603 2711 2222 

iman@hwangdbsvickers.com.my 


(RM) 

2.00 

1.60 

1.20 

0.80 

0.40 

0.00 

2006 2007 

Alam Maritim Relat ive KLCI Index (RHS) 


290 

270 

250 

230 

210 

190 

170 

150 

130 

110 

90 

70 

50 

FY Dec (RM m) 2007A 2008F 2009F 2010F 

Turnover 250 348 404 437 

EBITDA 90 120 144 155 


Net Profit 51 71 92 102 

Net Pft (Pre Ex.) 51 71 92 102 

EPS (sen) 10.4 14.4 18.9 20.8 

EPS Pre Ex. (sen) 10.4 14.4 18.9 20.8 

EPS Gth Pre Ex (%) 64 38 31 10 

Diluted EPS (sen) 10.4 14.4 18.9 20.8 

Net DPS (sen) 1.1 1.1 1.1 1.8 

BV Per Share (sen) 44.1 57.4 75.2 94.8 

PE (X) 17.8 12.8 9.8 8.9 

PE Pre Ex. (X) 17.8 12.8 9.8 8.9 

P/Cash Flow (X) 17.6 12.7 9.7 8.9 

EV/EBITDA (X) 14.0 10.3 8.3 7.3 

Net Div Yield (%) 0.6 0.6 0.6 1.0 

P/Book Value (X) 4.2 3.2 2.5 2.0 


ROAE (%) 26.4 28.4 28.5 24.4 

Consensus EPS (sen): 15.2 19.9 23.4 

Sector : Oil & Gas 

Principal Business: Marine vessel charter operations 

Clear earnings visibility ahead 

Story: We expect good earnings visibility for marine 

vessel players in Malaysia as FY08-09 earnings are 

supported by locked-in vessel charter contracts. The 

outlook for charter rates remains promising, bolstered by 

increased momentum in E&P activities, and favourable 

vessel supply-demand dynamics. Future growth will also 

be supported by maiden contribution from new vessels 

as these players have aggressively expanded their fleet 

sizes to capture the growing demand for offshore 

marine vessels. 

Point: Alam is our top pick for the segment as all of its 

vessels are Malaysian-flagged, thus making the company 

one of the main beneficiaries of Petronas’ preference for 

Malaysian-flagged support vessels. Alam’s FY07 EBIT 

margins are the highest among its peers at 35.6% 

against the average margin of 16.5%, thanks to its 

focus on vessel chartering and its young fleet of vessels 

with an average age of only 5.5 years. 

Relevance: Trading at an attractive FY09 PE of 10x 

against FY07-09 net profit CAGR of 44%, Alam’s 

growth is driven by ascending vessel charter rates and its 

aggressive fleet expansion plan. It will add 13 new 

vessels to its existing fleet over FY08-10. The company’s 

earnings growth prospects look bright amid buoyant 

crude oil prices and strong charter rates. We peg our 12- 

month target price at RM3.20 per share based on FY09 

sector average PEG of 0.4x. 

At A Glance 


Mkt. Cap (RMm/US$m) 

898 / 281 


SAR Venture (%) 55.4 

Forum Vest Sdn Bhd (%) 16.4 



Page 40 




Alam Maritim 

Income Statement (RM m) Balance Sheet (RM m) 

FY Dec 2007A 2008F 2009F 2010F FY Dec 2007A 2008F 2009F 2010F 






Other Non Opg (Exp)/Inc 0 0 0 0 Total Assets 752 864 965 1,073 






Minority Interest (5) (4) (4) (4) Shareholder’s Equity 216 281 368 465 


Net Profit 51 71 92 102 Total Cap. & Liab. 752 864 965 1,073 



Net Cash/(Debt) (333) (309) (257) (189) 

Sales Gth (%) 12.0 39.4 16.1 8.0 

EBITDA Gth (%) 43.5 33.4 20.0 8.1 

Opg Profit Gth (%) 44.5 33.6 20.1 8.2 

Net Profit Gth (%) 3.1 38.3 31.0 10.1 


Cash Flow Statement (RM m) 

Rates & Ratio 






Chg in Wkg.Cap. 6 (17) (9) (5) ROA (%) 7.8 8.7 10.1 10.0 







Other Investing CF 0 0 0 0 Inventory Turn (avg days) N/A N/A N/A N/A 





Other Financing CF 0 0 0 2 N. Cash/(Debt)PS (sen) (67.9) (63.1) (52.4) (38.6) 

Net Financing CF 127 19 (5) (2) Opg CFPS (sen) 11.6 15.4 19.8 21.9 

Net Cashflow 59 48 52 70 Free CFPS (sen) (13.8) 5.9 11.8 14.7 

Quarterly / Interim Income Statement (RM m) 


FY Dec 1Q2007 2Q2007 3Q2007 4Q2007 FY Dec 2007A 2008F 2009F 2010F 

Turnover 42 70 62 49 Revenues (RM m) 

Cost of Goods Sold (22) (51) (37) (26) Marine Services 230 326 380 409 

Gross Profit 20 19 25 23 Underwater Operations 20 22 24 27 




Associates & JV Inc 0 0 0 0 Total 250 348 404 437 

Net Interest (Exp)/Inc (5) (6) (4) (6) Gross Profit (RM m) 

Exceptional Gain/(Loss) 0 0 0 0 Marine Services 88 135 158 172 

Pre-tax Profit 12 11 16 15 Underwater Operations 13 8 8 10 

Tax (3) (4) (4) (3) 

Minority Interest 0 0 (1) (2) 

Net Profit 10 7 10 10 

Net profit bef Except. 10 7 10 10 Total 101 143 167 182 


Marine Services 38.3 41.4 41.6 42.1 

Sales Gth (%) (58.9) 68.1 (12.1) (21.5) Underwater Operations 63.4 34.4 34.8 35.1 

EBITDA Gth (%) (38.1) 0.5 26.3 5.2 

Opg Profit Gth (%) (41.5) (34.1) 85.1 9.8 

Net Profit Gth (%) (71.0) (29.8) 50.6 (0.2) 





Page 41


Litrak 

Bloomberg: LTK MK | Reuters: LTKH.KL 

BUY RM3.58 KLCI : 1,229.95 

Price Target : 12-Month RM 4.30 

Potential Catalyst: Potential capital repayment and higher dividends 

Analyst 

Wong Ming Tek 603 2711 0956 

mingtek@hwangdbsvickers.com.my 


4.50 

4.00 

3.50 

3.00 

2.50 

2.00 

RM 


2004 2005 2006 2007 2008 

Litrak (LHS) Relative KLCI INDEX (RHS) 

204 

184 

164 

144 

124 

104 

84 

64 

Potential yield kicker 

Story: We foresee improving outlook for higher 

dividend. Under the new tax structure, companies can 

declare higher dividends without having to accumulate 

section 108 tax credit. In our opinion, there is also 

capacity to undertake more special distributions. 

Point: Based on our estimates, the new tax structure 

can result in doubling of dividend payments to RM0.20 

from RM0.10 currently. The potential dividend increase 

to this level is sustainable with the Group’s strong 

operating cashflow. This is supported by the high traffic 

road alignment of Damansara Puchong Highway. 

Meanwhile, a special distribution can result in a onetime 

payout of RM0.90-RM0.95/share, in our opinion. 

Relevance: We reiterate our Buy call on Litrak. Our 

RM4.30 price target is based on a 15% discount to DCFvalue 

of RM5.05. The higher dividends may reduce the 

stock’s discount to DCF-value. 


FY Mar (RM m) 2007A 2008F 2009F 2010F 

Turnover 256 286 292 304 

EBITDA 208 237 252 253 

Pre-tax Profit 130 147 159 167 

Net Profit 100 100 111 115 

Net Pft (Pre Ex.) 89 100 111 115 

EPS (sen) 20.6 20.5 22.8 23.6 

EPS Pre Ex. (sen) 18.2 20.5 22.8 23.6 

EPS Gth Pre Ex (%) 19 13 11 3 

Diluted EPS (sen) 18.2 20.5 22.8 23.6 

Net DPS (sen) 7.2 7.2 7.2 7.2 

BV Per Share (sen) 174.0 187.3 202.9 219.2 

PE (X) 17.5 17.5 15.8 15.3 

PE Pre Ex. (X) 19.7 17.5 15.8 15.3 

P/Cash Flow (X) 11.9 11.5 11.3 10.5 

EV/EBITDA (X) 12.2 10.0 8.9 8.2 

Net Div Yield (%) 2.0 2.0 2.0 2.0 

P/Book Value (X) 2.1 1.9 1.8 1.6 


ROAE (%) 11.5 11.4 11.7 11.2 

Consensus EPS (sen): 23.1 27.4 33.3 

Sector : Concessionaire 

Principal Business: Litrak is involved in the design, construction, 

operation and maintenance of the Damansara Puchong Highway. 

At A Glance 


Mkt. Cap (RMm/US$m) 

1,762 / 551 


Gamuda Bhd (%) 44.8 

Employment Provident Fund (%) 5.8 



Page 42 




Litrak 

Income Statement (RM m) Balance Sheet (RM m) 

FY Mar 2007A 2008F 2009F 2010F FY Mar 2007A 2008F 2009F 2010F 



Gross Profit 206 232 237 244 Other LT Assets 1,564 1,523 1,502 1,479 




Associates & JV Inc (20) (20) (11) (18) 





Minority Interest 0 0 0 0 Shareholder’s Equity 850 915 992 1,072 




EBITDA 208 237 252 253 Non-Cash Wkg. Capital (9) (9) (9) (9) 

Net Cash/(Debt) (776) (620) (482) (328) 

Sales Gth (%) 5.3 11.8 2.0 4.0 

EBITDA Gth (%) 2.9 14.2 6.0 0.8 

Opg Profit Gth (%) 6.7 12.5 1.8 3.2 

Net Profit Gth (%) 35.0 (0.1) 11.0 3.4 


Cash Flow Statement (RM m) 

Rates & Ratio 

FY Mar 2007A 2008F 2009F 2010F FY Mar 2007A 2008F 2009F 2010F 





Chg in Wkg.Cap. 21 0 0 0 ROA (%) 4.9 5.0 5.5 5.5 





Invts in Assoc. & JV 0 0 0 0 Debtors Turn (avg days) N.M. N.M. N.M. N.M. 


Other Investing CF 7 6 3 6 Inventory Turn (avg days) N.M. N.M. N.M. N.M. 

Net Investing CF 3 (4) (7) (4) Current Ratio (x) 1.1 1.2 1.9 2.5 


Chg in Gross Debt (101) (139) (19) (59) Net Debt/Equity (X) 0.9 0.7 0.5 0.3 


Other Financing CF (188) (64) (63) (59) N. Cash/(Debt)PS (sen) (158.8) (126.8) (98.5) (67.1) 

Net Financing CF (316) (238) (117) (153) Opg CFPS (sen) 58.3 53.1 49.7 51.3 

Net Cashflow (7) 18 119 95 Free CFPS (sen) 59.1 51.1 47.7 49.3 

Quarterly / Interim Income Statement (RM m) 

FY Mar 4Q2007 1Q2008 2Q2008 3Q2008 

Turnover 70 72 75 74 



Other Oper. (Exp)/Inc 13 2 3 2 



Associates & JV Inc (6) (5) (6) (7) 




Tax (2) (12) (12) (11) 


Net Profit 45 25 26 24 


Sales Gth (%) 11.6 4.1 3.1 (1.4) 

Opg Profit Gth (%) 40.6 (14.7) 2.9 (4.3) 

Net Profit Gth (%) 128.0 (43.3) 3.4 (6.8) 

Gross Margins (%) 80.2 78.0 77.7 75.5 




Page 43



Thailand 

Domestic plays 

Our strategy for 2Q08 remains focused on domestic 

demand recovery, following the government’s aggressive 

economic stimulus programs. We are convinced that 

Thailand’s economic prospects will be robust, with 

domestic demand as the key growth driver for the next 

2-3 years. We feature one small/mid cap stock, PS, that 

should benefit from improving domestic consumption 

next year. We also pick IRP on its growth story. 

Our small cap picks for 1Q08 gave an average market cap-weighted return of 

5% for the quarter (from 25 Dec 2007 to 25 Mar 2008), vs 2% gain for the SET 

Index. Quality Houses (QH TB) was the best performer among the four 

companies we picked for 1Q08, despite the market sell-off following complaints 

of unsatisfactory construction work from residents of one of its housing 

projects. Regional Container Lines (RCL TB) was the worst performer due to 

weak freight rate and higher bunker oil price. 

Our top picks for small/mid cap stocks are Preuksa Real Estate (PS TB) and 

Indorama Polymers (IRP TB). PS is the largest residential property developer in 

Thailand in terms of market share (16%) and second largest in terms of market 

capitalization. We re-iterate our BUY rating for PS premised on (i) strong 

earnings growth prospects, (ii) a quality management team, (iii) strong balance 

sheet, and (iv) attractive valuation. IRP is one of the top growth stocks in our 

Thailand universe. The counter will be the world’s 2nd largest PET producer after 

its expansion to meet its aggressive growth target. 

Chanpen Sirithanarattanakul (66) 2657 7824 chanpens@th.dbsvickers.com 

Page 44 





Key Valuation Comparison 

Large Caps 

Small Caps 

2006A 2007A 2008F 2009F 2006A 2007A 2008F 2009F 

EPS Growth (%) (1.3) (10.2) 14.1 3.5 (36.3) 55.9 2.0 12.5 

PER (x) 13.2 13.8 12.0 11.5 15.3 10.0 10.0 8.9 

EV/EBITDA (x) 8.3 7.7 7.2 6.6 8.5 7.8 6.3 5.6 

ROAE (%) 15.4 13.2 14.0 13.3 11.0 15.2 14.1 14.7 



The SET index softened 4.4% QTD to close at 820.31 

points on 25 Mar 2007, on renewed US sub-prime 

concerns. The SET50 Index (large cap stock index) also 

fell by 6.7% in the same period. Trading activities on 

the SET edged down from 4Q07 with average daily 

value of Bt19.1bn. Average daily turnover in large cap 

stocks, represented by the SET50 Index, fell from Bt15bn 

in 4Q07 to Bt14.6bn QTD. Focus during the quarter was 

on the new government’s economic stimulus policy, 

which should benefit Property and Banking sectors. 

Nonetheless, the Energy sector continued to dominate 

38% of total market trade value. Bank stocks came in 

second at 21%. Property sector came in third at 9% of 

total trade, followed by the Communications sector at 

7.5%, and Transportation sector at 4.9%. These five 

sectors’ (Energy, Banks, Transportation, Property, and 

Communications) cumulative trade accounted for 80% 

of total market trade value for the quarter. 

SET and SET-50 Indices 

50% 

SET 

40% 

30% 

20% 

10% 

0% 

-10% 

Source: Reuters 

Jan-07 

Feb-07 

Mar-07 

Apr-07 

May-07 

Jun-07 

SET50 

Jul-07 

Aug-07 

Sep-07 

Oct-07 

Nov-07 

Dec-07 

Jan-08 

Feb-08 

Page 45




Our small-mid cap universe (market cap




A. REVIEW 

In 1Q08, our small cap picks gave investors an average 

market cap-weighted return of 4.1%, ahead of the SET 

Index's 2.7% loss. Leading the gains was Quality Houses 

(QH TB), one of Thailand’s leading residential property 

developer. The counter registered 34.6% gain during 

the quarter. QH was still the best performer among the 

small-cap stocks we selected for 1Q08. Regional 

Container Lines (RCL TB) fell 16% as market sentiment 

for container shipping was frail due to the anticipated 

slowdown in the global economy and high bunker oil 

price. 

Review: 1Q08 Small Cap Picks 

Stock Shares 

Price (Bt) Market Cap (Btm) 

(m) 25-Dec-07 25-Mar-08 Return 25-Dec-07 25-Mar-08 Return 

MAJOR TB 880.34 18.00 18.30 1.7% 15,846 16,110 1.7% 

QH TB 7,392.42 2.14 2.88 34.6% 15,820 21,290 34.6% 

TISCO TB 544.62 28.75 29.00 0.9% 15,658 15,794 0.9% 

RCL TB 663.00 29.00 24.30 -16.2% 19,227 16,111 -16.2% 

Small Cap 5.2% 66,551 69,305 4.1% 

SET 843.28 820.31 -2.7% 

Out-performance 6.9% 


B. 2Q08 RECOMMENDATION 

PS is a potential beneficiary of improving domestic 

factors. We feature IRP for its bright earnings 

prospects after expanding its PET capacity to become 

the world’s second largest producer. 

Review: 1Q08 Small Cap Picks 

Mkt Price Target EV/ P/ Div Vol/day 

Company Ticker Cap (Bt) Price % P/E EBITDA BV Yld ROE 6m 

(US$m) 25-Mar-08 (Bt) Upside 08F 08F 08F 08F 08F (m shrs) 

Indorama Polymers IRP TB 395 9.00 14.00 56% 6.8 6.8 1.8 4.4 30.3 0.5 

Preuksa Real Estate PS TB 742 10.70 12.26 15% 12.2 9.3 2.4 2.5 19.9 2.7 


Indorama Polymers (IRP) will be the world’s 2nd 

largest PET producer upon the completion of its 

expansion to achieve its aggressive target capacity of 

1.4m tpa by 2009. IRP’s production capacity was 603k 

tpa at end 2007, while the acquisition of 355k tpa 

facilities in the U.K. and Netherlands is expected to be 

complete by end-Mar 2008. The greenfield 432k tpa 

plant in the U.S.A. will fulfill its target. IRP is one of 

the top growth stocks in our Thailand universe. 

Valuations are cheap at just 6.8x 2008 PE, and 

dividend yield moderate at 4.4%. Our Bt14/share 

target price is based on 10.5x 2008 PE. Its earnings 

prospects should improve in 2Q08. 

Preuksa Real Estate (PS) is the largest residential 

property developer in Thailand in terms of market share 

(16%) and second largest in terms of market 

capitalization. It focuses on low- to mid-priced 

townhouses and detached houses. In 2007, PS 

successfully expanded into the city condominium 

market. PS’ presales rocketed to a record high of 

Bt13.6bn in 2007, due to its aggressive new project 

launches and expansion into the condominium market. 

And its prospects remain positive. We re-iterate our BUY 

rating for PS premised on (i) strong earnings growth 

prospects, (ii) a quality management team, (iii) strong 

balance sheet, and (iv) attractive valuation. Our target 

price is Bt12.26 based on 14x FY08 PE. PS is now our 

top pick in the residential property sector. 

Page 47


Indorama Polymers 

Bloomberg: IRP TB | Reuters: IRP.BK 

BUY Bt9.00 SET : 820.31 

Price Target : 12-Month Bt 14.00 

Potential Catalyst: Recovering product spreads, earnings contribution 

from latest acquisition. 

Analyst 

Vichitr Kuladejkhuna CFA +66 0 26577826 

vichitrk@th.dbsvickers.com 


11 . 70 

10 . 70 

9 . 70 

8 . 70 

7 . 70 

6 . 70 

5 . 70 

4 . 70 

3 . 70 

2 . 70 

Bt 


Aug - 05 Feb - 06 Aug - 06 Feb - 07 Aug - 07 Feb - 08 

Indorama Polymers ( LHS ) Relative SET INDEX ( RHS ) 


FY Dec (Bt m) 2006A 2007A 2008F 2009F 

Turnover 11,847 25,551 36,034 49,815 

EBITDA 1,230 2,069 3,227 4,182 

Pre-tax Profit 844 1,129 2,009 2,831 

Net Profit 784 1,073 1,836 2,507 

Net Pft (Pre Ex.) 784 1,073 1,836 2,507 

EPS (Bt) 0.6 0.8 1.3 1.8 

EPS Pre Ex. (Bt) 0.6 0.8 1.3 1.8 

EPS Gth Pre Ex (%) 2 37 71 37 

Diluted EPS (Bt) 0.6 0.8 1.3 1.8 

Net DPS (Bt) 0.2 0.2 0.4 0.6 

BV Per Share (Bt) 3.2 3.8 4.9 6.3 

PE (X) 15.9 11.6 6.8 5.0 

PE Pre Ex. (X) 15.9 11.6 6.8 5.0 

P/Cash Flow (X) 12.0 8.0 5.0 3.8 

EV/EBITDA (X) 14.6 8.9 6.8 5.1 

Net Div Yield (%) 1.9 2.7 4.4 6.1 

P/Book Value (X) 2.8 2.3 1.8 1.4 


ROAE (%) 18.3 21.9 30.3 32.2 

Consensus EPS (Bt): 1.2 1.6 

Sector : Petrochemicals & Chemicals 

Principal Business: World-class producers of PET polymer with 

facilities in Thailand, the US, and Europe. 

219 

169 

119 

69 

19 

Among Thailand’s top growth story 

Story: IRP is on track to achieve its aggressive growth 

target of 1.4m t.p.a. PET production capacity and 

become the world’s 2nd largest producer by 2009. IRP’s 

production capacity was 603,000 t.p.a. at the end of 

2007, while the acquisition of 355,000 t.p.a. facilities in 

the U.K. and Netherlands is expected to complete by 

end-Mar 2008. The greenfield 432,000 t.p.a. plant in 

the U.S.A. would fulfill its target. 

Point: PET product spread was weak in 2H07 owing to 

a sharp rise in MEG (Mono Ethylene Glycol, c.30% of 

raw material) price due to supply shortage. However, 

MEG price has fallen by US$200-300/tonne since early 

2008 as supply is expected to normalise in 2Q08. 

Together with earnings contribution from the newlyacquired 

assets, we expect IRP’s earnings to improve 

significantly from 2Q08 onwards. We expect product 

spread to improve from an average of US$212/tonne in 

2007 to US$220-230/tonne in 2008 on the back of (i) 

normalised MEG price, and (ii) less competitive PET 

pricing due to limited new supply this year vs large glut 

of new capacity startup in 2007. We expect earnings to 

jump 84% in 2008 and 16% in 2009. 

Relevance: IRP is one of the top growth stocks in our 

Thailand universe. Valuations are cheap at just 6.8x 

2008 PE and moderate dividend yield of 4.4%. With 

56% upside to our target price of Bt14.0 (10.5x 2008 

PE) and prospect for earnings jump in 2Q08, IRP is one 

of our top picks. Reiterate Buy. 

At A Glance 


Mkt. Cap (Btm/US$m) 12,440 / 395 


Beacon Global (%) 38.9 

Indorama Industries (%) 26.5 

Indorama Synthetics (India) Ltd. (%) 7.2 



Page 48 




Indorama Polymers 

Income Statement (Bt m) Balance Sheet (Bt m) 


Turnover 11,847 25,551 36,034 49,815 Net Fixed Assets 9,211 10,089 15,042 15,874 


Gross Profit 1,589 2,797 4,398 5,990 Other LT Assets 101 78 78 78 

Other Opng (Exp)/Inc (673) (1,258) (1,855) (2,554) Cash & ST Invts 534 979 1,359 140 

Operating Profit 915 1,538 2,543 3,436 Other Current Assets 4,628 6,622 7,457 10,261 



Net Interest (Exp)/Inc (132) (452) (564) (612) ST Debt 1,186 1,474 2,706 2,958 

Exceptional Gain/(Loss) 0 0 0 0 Other Current Liab 3,899 5,520 6,261 8,577 

Pre-tax Profit 844 1,129 2,009 2,831 LT Debt 4,623 5,234 7,878 5,723 


Minority Interest (47) (47) (51) (54) Shareholder’s Equity 4,492 5,309 6,813 8,767 


Net Profit 784 1,073 1,836 2,507 Total Cap. & Liab. 14,475 17,768 23,936 26,354 

Net Profit before Except. 784 1,073 1,836 2,507 

EBITDA 1,230 2,069 3,227 4,182 Non-Cash Wkg. Capital 729 1,101 1,197 1,684 

Net Cash/(Debt) (5,275) (5,729) (9,224) (8,541) 

Sales Gth (%) 1.0 115.7 41.0 38.2 

EBITDA Gth (%) (1.4) 68.2 56.0 29.6 

Opg Profit Gth (%) (12.8) 68.1 65.3 35.1 

Net Profit Gth (%) 1.6 36.8 71.1 36.6 


Cash Flow Statement (Bt m) 

Rates & Ratio 


Pre-Tax Profit 844 1,129 2,009 2,831 Gross Margins (%) 13.4 10.9 12.2 12.0 


Tax Paid 13 10 0 0 Net Profit Margin (%) 6.6 4.2 5.1 5.0 


Chg in Wkg.Cap. 1,690 1,684 740 2,316 ROA (%) 6.4 6.7 8.8 10.0 

Other Operating CF (1,309) (1,192) 344 (1,730) ROCE (%) 10.3 14.3 17.3 18.3 

Net Operating CF 1,238 1,631 3,093 3,418 Div Payout Ratio (%) 30.0 30.9 30.1 30.3 

Capital Exp.(net) (3,203) (1,385) (5,667) (1,550) Net Interest Cover (x) 7.0 3.4 4.5 5.6 





Net Investing CF (3,203) (1,381) (5,667) (1,550) Current Ratio (x) 1.0 1.1 1.0 0.9 


Chg in Gross Debt 2,514 903 3,872 (1,906) Net Debt/Equity (X) 1.1 1.0 1.3 0.9 


Other Financing CF (93) (437) (587) (627) N. Cash/(Debt)PS (Bt) (3.8) (4.1) (6.7) (6.2) 

Net Financing CF 2,191 195 2,954 (3,086) Opg CFPS (Bt) (0.3) 0.0 1.7 0.8 

Net Cashflow 226 444 379 (1,218) Free CFPS (Bt) (1.4) 0.2 (1.9) 1.4 

Quarterly / Interim Income Statement (Bt m) 



Turnover 5,702 5,993 6,369 7,487 Revenues (Bt m) 

Cost of Goods Sold (5,139) (5,271) (5,697) (6,647) PET polymer 16,836 30,067 34,986 48,715 

Gross Profit 563 722 672 839 Preform & bottles 808 952 1,048 1,100 



Other Non Opg (Exp)/Inc (1) 4 31 9 Others (5,797) (5,468) 0 0 

Associates & JV Inc 0 0 0 0 Total 11,847 25,551 36,034 49,815 

Net Interest (Exp)/Inc (77) (111) (126) (138) Net profit (Bt m) 

Exceptional Gain/(Loss) 0 0 0 0 PET polymer 646 1,162 1,672 2,249 

Pre-tax Profit 226 323 274 306 Preform & bottles 93 110 127 134 

Tax (4) (3) (2) (1) 


Net Profit 208 302 265 298 Others 46 (199) 37 125 

Net profit bef Except. 208 302 265 298 Total 784 1,073 1,836 2,507 

EBITDA 408 561 526 574 Net profit Margins (%) 

PET polymer 3.8 3.9 4.8 4.6 

Sales Gth (%) 57.4 5.1 6.3 17.5 Preform & bottles 11.5 11.5 12.1 12.2 

EBITDA Gth (%) 32.5 37.3 (6.1) 9.1 

Opg Profit Gth (%) 22.7 41.4 (14.2) 18.0 

Net Profit Gth (%) 11.8 45.2 (12.0) 12.2 Others (0.8) 3.6 N/A N/A 





Page 49


Preuksa Real Estate 

Bloomberg: PS TB | Reuters: PS.BK 

BUY Bt10.70 SET : 820.31 

Price Target : 12-month Bt 12.26 

Potential Catalyst: (i) Rebounding consumer confidence, (ii) earnings 

jump boosted by tax savings from government’s property tax-cut 

stimulus package 

Analyst 

Chanpen Sirithanarattanakul +66 0 2657 7824 

chanpens@th.dbsvickers.com 


11 . 70 

10 . 70 

9 . 70 

8 . 70 

7 . 70 

6 . 70 

5 . 70 

4 . 70 

3 . 70 

Bt 

Dec - 05 Jun - 06 Dec - 06 Jun - 07 Dec - 07 


Preuksa Real Estate ( LHS ) Relative SET INDEX ( RHS ) 


FY Dec (Bt m) 2006A 2007A 2008F 2009F 

Turnover 8,181 9,088 11,465 13,826 

EBITDA 1,725 1,800 2,558 2,670 

Pretax Profit 1,578 1,603 2,393 2,503 

Net Profit 1,303 1,270 1,914 2,003 

EPS (Bt) 0.60 0.58 0.88 0.92 

EPS Gth (%) 0.1 (2.8) 50.3 4.6 

P/E (x) 17.8 18.4 12.2 11.7 

P/Cash Flow (x) 22.0 21.8 40.2 23.6 

EV/EBITDA (x) 13.8 13.0 9.3 8.8 

DPS(Bt) 0.20 0.22 0.26 0.27 

Div Yield (%) 1.9 2.1 2.5 2.6 

ROE (%) 17.8 15.5 19.9 18.1 

Net Gearing (%) 7.9 1.7 3.0 1.2 

Book Value (Bt) 3.38 3.75 4.40 5.05 

P/Book Value (x) 3.2 2.9 2.4 2.1 

Consensus EPS (Bt) 0.8 0.9 

Sector : Property 

Principal Business: Residential property development 

219 

169 

119 

69 

19 

Deserves re-rating 

Story: PS is the largest residential property developer in 

Thailand in terms of market share (16%) and second 

largest in terms of market capitalization. It focuses on lowto 

mid-priced townhouses and detached houses. In 2007, 

The PS successfully expanded into the city condominium 

market. 

Point: PS’ presales rocketed to a record high of Bt13.6bn in 

2007, due to its aggressive new project launches and 

expansion into the condominium market. And prospects 

remain positive. Sales should continue to grow with 40 

new projects to be launched this year, compared to 28 last 

year. The company will start to realize revenue from its two 

condominium projects that had been sold out since last 

year. The company is also a prime beneficiary of the 

government’s tax cut package, thanks to its large inventory 

on hand. We estimate that PS should see its EPS jump 

50% this year, fuelled by strong housing sales and tax 

savings from the government’s stimulus package. 

Relevance: Valuations are undemanding at 12.2x FY08 PE 

given its strong EPS CAGR of 25.4% for FY07-09F. We reiterate 

our BUY rating for PS premised on (i) strong 

earnings growth prospects, (ii) a quality management team, 

(iii) strong balance sheet, and (iv) attractive valuation. Our 

target price is Bt12.26 based on 14x FY08 PE. PS is now our 

top pick in the residential property sector. 

At A Glance 


Mkt. Cap (Btm/US$m) 23,390 / 743 


Vichitrpongpan’s family (%) 73.9 

HSBC (Singapore) Nominees Pte Ltd (%) 5.8 

Thailand Equity Fund (%) 4.9 


Avg. Daily Vol.(‘000) 2,217 

Page 50 




Preuksa Real Estate 

Income Statement (Bt m) Balance Sheet (Bt m) 


Turnover 8,181 9,088 11,465 13,826 Fixed assets 1,202 1,314 1,468 1,661 

Cost of sales (5,548) (5,919) (7,567) (9,402) Other LT Assets 202 216 216 216 

SGA (1,030) (1,523) (1,474) (1,895) Cash 402 1,027 878 1,033 

Opg Profit 1,603 1,646 2,424 2,530 Other Current Assets 7,581 8,489 10,091 11,357 

Other Inc/(Exp) 23 5 10 10 Total Assets 9,386 11,046 12,653 14,267 

Interest (Exp)/Inc (47) (48) (41) (37) ST Debt 538 - - - 

Pre-Tax Profit 1,578 1,603 2,393 2,503 Other Current Liabilities 1,020 1,648 1,815 2,001 

Tax (275) (333) (479) (501) LT Debt 491 1,219 1,219 1,219 

Minority interest - - - - Minority Int - - - - 

Net Profit 1,303 1,270 1,914 2,003 Shareholders' equity 7,337 8,179 9,618 11,047 

Sales Growth % 7.4 11.1 26.2 20.6 Total Capital 9,387 11,046 12,653 14,267 

Net Profit Gr % 2.4 (2.6) 50.7 4.6 Share Capital (m) 2,174 2,180 2,186 2,186 

Gross Mgn % 32.2 34.9 34.0 32.0 Net cash/(debt) (581) (138) (287) (131) 

Opg Mgn % 19.6 18.1 21.1 18.3 Working capital 6,425 7,868 9,154 10,389 

Net Mgn % 15.9 14.0 16.7 14.5 Gearing (%) 7.9 1.7 3.0 1.2 

Cash Flow Statement (Bt m) 

Assumptions 


Net profit 1,303 1,270 1,914 2,003 Sales (Btm) 8,181 9,088 11,465 13,826 

Depreciation 122 155 134 140 Sales Growth 7% 11% 26% 21% 

Non Cash Items 323 412 (32) (73) Gross Margin 

32% 35% 34% 32% 

Change in W/C (693) (769) (1,435) (1,079) SGA/Sales 12.6% 16.8% 12.9% 13.7% 

CF from Operations 1,055 1,068 581 991 Div. Payout 34% 38% 30% 30% 


Investment (1) (8) 0 0 

CF from Investing (168) (157) (200) (200) 

Increase in debts (1,591) 190 0 0 

Increase in capital 153 6 6 0 

Dividends (389) (435) (481) (574) 

Interest paid (93) (46) (55) (61) 

CF from Financing (1,920) (285) (530) (635) 

Net change in CF (1,032) 625 (149) 155 

Cash, Beg 1,434 401 1,027 878 

Cash, End 401 1,027 878 1,033 

Quarterly / Interim Income Statement (Bt m) 



Turnover 1,887 2,231 2,029 2,941 Sales (Btm) 

Cost of sales (1,238) (1,468) (1,361) (1,853) Detached House 3,269 3,863 4,442 4,887 

SGA (292) (352) (414) (465) Townhouse 4,882 5,150 5,923 6,515 

Opg Profit 358 411 254 622 Condominium 30 75 1,100 2,425 

Other Inc/Exp 5 2 4 (6) Total 8,181 9,088 11,465 13,826 

Interest (Exp)/Inc (10) (11) (14) (14) Sales Breakdown 

Pre-Tax Profit 353 403 245 602 Detached House 40% 43% 39% 35% 

Tax (61) (80) (56) (136) Townhouse 60% 57% 52% 47% 

Minority interest - - - - Condominium 0% 1% 10% 18% 

Net Profit 292 323 189 466 Total 100% 100% 100% 100% 

Sales Growth % (9.1) 4.9 18.6 29.6 Sales Growth 

Net Profit Gr % (20.9) (7.1) (26.5) 41.6 Detached House 0% 18% 15% 10% 

Gross Mgn % 34.4 34.2 32.9 37.0 Townhouse n.m. 5% 15% 10% 

Opg Mgn % 19.0 18.4 12.5 21.2 Condominium 20% 150% 1367% 120% 

Tax Rate % 17.3 19.8 22.8 22.7 Total 7% 11% 26% 21% 

Net Mgn % 15.5 14.5 9.3 15.8 


Page 51



Indonesia 

Despite the seemingly attractive valuations for small caps, 

interest in these stocks could remain subdued in 

anticipation of prolonged volatility this quarter due to 

growing uncertainties in the US market. 

Market Data 

Be selective 

Two of our three stock picks outperformed the market in 1Q08, although none gave 

positive returns. Bakrie Sumatra Plantation (UNSP) surged by 41% in the quarter and 

surpassed our target price, but it tumbled before the quarter ended as CPO price 

corrected. 

For 2Q08, our focus is on the Plantation sector premised on our still optimistic 

outlook for CPO price, and our belief that the recent selldown of plantation stocks 

triggered by a sharp CPO price correction was overdone. We feature three small caps 

for 2Q08 - two from the Plantation sector and a Sorbitol producer from the 

Consumer sector. 

UNSP and Tunas Baru Lampung (TBLA) are featured again this quarter because they 

should enjoy robust volume growth to hedge against falling CPO price. We also 

recently upgraded our CPO price assumptions and consequently, target price for 

UNSP to Rp3,050 and TBLA to Rp.780. We also feature Sorini Agro Asia (SOBI), the 

second largest Sorbitol producer in the world. Its plan to expand upstream (Cassava 

plantation) should help future earnings because it would expand margins by c.10% 

and open new opportunities in the bioethanol business. Our fair value for the stock is 

Rp2,750, implying 95% potential upside. 

-1 mth -2 mth -3 mths -6 mths -12 mths 

Index Performance (%) (%) (%) (%) (%) 

DBSV Big Caps (12.8) (6.1) (10.4) 9.8 39.7 

DBSV Small Caps (16.3) (18.8) (21.7) (19.1) (1.7) 

Jakarta Stock Exchange (12.1) (7.7) (11.9) 2.6 32.6 

Transactions (DBSV Universe): QTD YTD 

Small Cap Big Cap Small Cap Big Cap 

Vol (bln shrs) 39.4 32.4 92.6 91.1 

Val Rptr) 32.1 480.8 80.6 1,061.7 


Herry Dion Mahargono (6221) 36832668 herry.mahargono@id.dbsvickers.com 

Page 52 






Our small cap universe substantially underperformed 

the large caps and the Jakarta Composite Index (JCI) 

again in 1Q08. It underperformed the large caps and 

JCI by 15.2% and 14%, respectively, in 4Q07. The 

weak performance continued to be attributed to 

strong volatility in the financial market due to growing 

risks in the US credit market and economy. 

The JCI and large caps fell 11.9% and 10.4% q-o-q, 

respectively, in the quarter, while small caps fell 

21.7% q-o-q. Only one small cap under our coverage 

gave a positive return in the quarter; SOBI (+12.8% q- 

o-q), the second largest sorbitol producer in the world. 

The worst performers were Adhi Karya (ADHI) (-43.4% 

q-o-q), SMRA (-40.2% q-o-q) and Total Bangun (TOTL) 

(-39% q-o-q). 

Big and Small Caps Performance 

325.0 

Dec 05 = 100 

280.0 

235.0 

190.0 

145.0 

100.0 

Dec-05 May-06 Oct-06 Mar-07 Aug-07 Jan-08 

JCI Big Cap Small Cap 

Small Caps Transactions (bn shares) 

bn shrs 

14.0 

40% 

12.0 

10.0 

8.0 

6.0 

20% 

4.0 

2.0 

- 

0% 

Jun-06 Aug-06 Nov-06 Feb-07 May-07 Aug-07 Nov-07 Feb-08 

Source: JSX 

Vol (LHS) 

Small Caps as % of Total (RHS) 

Page 53




Small caps valuations look relatively more attractive 

than big caps after having underperformed large caps 

in the last three quarters. In fact, the valuations of 

some good quality small caps have dropped by almost 

50% in the absence of company specific news. 

Small caps earnings growth in 2008-09 should remain 

healthy (double digit growth), with ROE improving to 

13.5% in 2009 from 12.6% in 2008. Valuation should 

drop to 10.8x PER in 2009 from 13.4x in 2008; this is 

cheaper than large caps and the broad market. 

However, the above reasons are not compelling 

enough to regain investors’ interest in small caps. This 

is premised on anticipated prolonged market volatility 

this quarter due to growing uncertainties/ risks in the 

US market. 

Big and Small Caps Valuation 

Large Cap 

Small Cap 

FY08 FY09 FY08 FY09 

EPS Gth (%) 15.3 16.9 31.1 17.7 

PER (x) 14.5 11.9 13.4 10.8 

EV/EBITDA (x) 4.8 4.2 6.3 5.5 

ROE (%) 23.1 23.4 12.6 13.5 

Source: DBSVI 


Review: 

Two of our three stock picks outperformed the market 

in 1Q08, although none gave positive returns. UNSP did 

surge 41% in the quarter and surpassed our target 

price, but it tumbled before the quarter ended as CPO 

price corrected and due to the major market sell down. 

TOTL fell 38% in the quarter (third worst performing 

small cap in 1Q08) after falling 39% in 4Q07 despite 

encouraging growth prospects that is supported by 

strong back-log orders and ample projects in the 

pipeline. Interestingly, its close competitor, ADHI, also 

fell 45% (worst small cap performer). However, we 

remain positive on the Construction sector as well as 

TOTL, but the counter is lacking a positive catalyst. 

Review 1Q08 Small Cap Picks 

17-Dec-07 25-Mar-08 Chg 

UNSP.jk Bakrie Sumatra P 2,000 1,810 -9.5% 

TOTL.jk Total Bangun P 580 360 -37.9% 

RALS.jk Ramayana Lestari 840 820 -2.4% 


RECOMMENDATION: 

For 2Q08, our stock picks focus on the plantation 

sector as we are still optimistic of CPO prices and view 

that the huge sell off for all plantation stocks, which 

was triggered by CPO price trend reversal, were 

overdone. Note that although CPO price tumbled by 

more than 25% from its peak, current price is still 

34% higher than last year average and more 

importantly, still 7% higher than our assumed average 

prcice for the year. 

In our stock selection, we select companies that can 

offer significant volume growth as a hedge against 

price decline although the latter is not our house view. 

In total we feature three small caps for 2Q08, two 

from plantation sector and a sorbitol producer from 

the consumer goods sector. 

2Q08 Small Caps Top Picks 

Mkt 

Cap Price (Rp) PE 

EV/EBITD 

A P/BV Div Yld ROE Vol/day 6m 

US$m Rp Target Upside 08F 08F 08F 08F 08F (m shrs) 

TBLA IJ Tunas Baru Lampung 202 445 780 75% 12.1 5.8 1.8 2.5 15.5 48.2 

UNSP IJ Bakrie Sumatra P 748 1,810 3,050 69% 14.1 9.7 2.9 1.3 18.4 60.0 

SOBI IJ Sorini Corporation 138 1,410 2,750 95% 11.7 7.7 2.4 2.2 22.3 7.8 


We feature UNSP and TBLA as we expect both 

companies to deliver robust production growth going 

forward. UNSP’s production growth driver is 

acquisitions, which will effectively more than double 

its oil palm planted area. TBLA would be driven 

primarily by its young trees -- it expects FFB production 

to nearly double in 2009. Last but not least, we also 

recently upgraded our CPO price assumption and 

consequently, target price for UNSP to Rp3,050 and 

for TBLA to Rp.780. 

Page 54



We also feature SOBI, the second largest sorbitol 

producer in the world. Its plan to expand upstream 

(cassava plantation) should help future earnings 

because it should expand margin by c.10% and open 

new opportunities in the bioethanol business. Our fair 

value for the stock is Rp2,750, implying 95% potential 

upside. 

1Q08 Small Caps Performance 

Price (Rp) QoQ (%) PE (x) Mkt Cap 

25-Mar Target Perform 08F 09F US$m 

SOBI IJ Sorini Corporation 1,410 2,750 12.8 11.7 8.2 138.1 

RALS IJ Ramayana Lestari 820 1,150 (3.5) 13.1 11.1 630.6 

MPPA IJ Matahari Putra Prima 600 1,125 (13.0) 34.9 21.9 307.8 

UNSP IJ Bakrie Sumatra Plantation 1,810 3,050 (20.4) 14.1 11.0 748.0 

MAPI IJ Mitra Adiperkasa 550 1,000 (21.4) 8.0 6.9 99.4 

EPMT IJ Enseval Putramega Trading 600 1,000 (22.1) 5.2 4.6 148.9 

TSPC IJ Tempo Scan Pacific 580 1,050 (22.7) 6.4 4.7 284.1 

TBLA IJ Tunas Baru Lampung 445 780 (29.4) 12.1 10.3 202.0 

MYOR IJ Mayora Indah 1,120 1,575 (36.0) 4.5 4.5 93.5 

TOTL IJ Total Bangun Persada 360 740 (38.0) 9.2 8.3 107.8 

SMRA IJ Summarecon Agung 700 1,200 (40.2) 10.8 15.6 244.8 

ADHI IJ Adhi Karya 750 1,650 (44.9) 6.8 6.0 147.1 

Source: DBSVI, JSX 

Page 55


Bakrie Sumatra Plantation 

Bloomberg: UNSP IJ | Reuters: UNSP.JK 

BUY Rp1,810 JCI : 2,419.6 

Price Target : 12-Month Rp3,050 

Potential Catalyst : Stronger than expected 1Q08 results, higher crude 

oil price and CPO price recovery 

Analyst 

Herry Dion Mahargono +6221 3983 2668 

herry.mahargono@id.dbsvickers.com 


Rp 

2,614.30 

2,114.30 

1,614.30 

1,114.30 

614.30 

114.30 


2004 2005 2006 2007 2008 

Bakrie Sumatra Plantation (LHS) Relative JCI INDEX (RHS) 


FY Dec (Rp bn) 2006A 2007F 2008F 2009F 

Turnover 1,181 1,663 2,632 2,841 

EBITDA 326 497 841 1,020 

Pre-tax Profit 250 336 693 893 

Net Profit 173 235 485 625 

Net Pft (Pre Ex.) 173 235 485 625 

EPS (Rp) 74.2 62.0 128.1 165.0 

EPS Pre Ex. (Rp) 74.2 62.0 128.1 165.0 

EPS Gth Pre Ex (%) 40 (16) 106 29 

Diluted EPS (Rp) 74.2 56.6 116.9 150.6 

Net DPS (Rp) 9.0 11.2 23.1 29.7 

BV Per Share (Rp) 275.6 516.1 621.1 756.4 

PE (X) 24.4 29.2 14.1 11.0 

PE Pre Ex. (X) 24.4 29.2 14.1 11.0 

P/Cash Flow (X) 23.9 28.7 14.0 10.9 

EV/EBITDA (X) 14.8 16.1 9.7 7.7 

Net Div Yield (%) 0.5 0.6 1.3 1.6 

P/Book Value (X) 6.6 3.5 2.9 2.4 


ROAE (%) 30.5 18.1 22.5 24.0 

Consensus EPS (Rp): 6,282 12,347 14,701 

526 

476 

426 

376 

326 

276 

226 

176 

126 

76 

Going for a song 

Story: Although crude palm oil (CPO) price has tumbled 

more than 25% from its peak, it is still 34% higher than 

last year’s average and more importantly, 7% higher 

than our assumption. However, UNSP’s share price has 

fallen by over 35% in three weeks due to the CPO price 

trend reversal. We think the share price decline is 

excessive. We remain optimistic of CPO prices, backed 

by a foreseeable critically low supply of oilseeds 

worldwide in 2008/09 and persistently high crude oil 

price. 

Point: We recently upgraded our average CPO price 

(CIF Rotterdam/ton) assumption to US$1,055 (2008), 

US$1010 (2009) and US$970 (2010) from US$860, 

US$770 and US$730, respectively. We also expect CPO 

production to increase by 51% and 15 % in 2008-09, 

respectively, led by yield improvement and acquisitions. 

Coupled with strong CPO price, earnings should surge 

106% and 29% in 2008-09, respectively. 

Relevance: UNSP is trading at 15.4x and 12x 2008-09 

(FD) PE compared to the broader market’s 14.5x and 

11.9x, respectively. Our target price of Rp.3,050 is based 

on DCF valuation with WACC of 12.6% and 6% 

terminal growth. Our target price implies EV/ha (nucleus 

only) of US$16,400 and 2008-09 PE (FD) of 26x and 

20x, respectively. The counter is also the cheapest 

upstream plantation stock based on EV/ha valuation. 

At A Glance 


Mkt. Cap (Rpbn/US$m) 

6,856 / 746 


Bakrie (BSP) Ltd (%) 28.0 

Amerasia Intl. (%) 11.0 

Bakrie Brothers (%) 10.0 


Avg. Daily Vol.(‘000) 54,542 


Principal Business: Plantation 

Page 56 




Bakrie Sumatra Plantation 

Income Statement (Rp bn) 

Balance Sheet (Rp bn) 


Turnover 1,181 1,663 2,632 2,841 Net Fixed Assets 340 857 1,154 1,241 


Gross Profit 411 645 931 1,124 Other LT Assets 771 1,999 2,111 2,203 



Other Non Opg (Exp)/Inc 31 (7) 65 65 Total Assets 1,783 3,765 4,217 4,699 




Pre-tax Profit 250 336 693 893 LT Debt 901 1,523 1,440 1,215 






EBITDA 326 497 841 1,020 Non-Cash Wkg. Capital 196 280 461 503 

Net Cash/(Debt) (615) (1,127) (1,300) (998) 

Sales Gth (%) 33.7 40.8 58.3 7.9 

EBITDA Gth (%) 57.6 52.3 69.1 21.4 

Opg Profit Gth (%) 28.2 71.3 54.2 23.4 

Net Profit Gth (%) 49.4 35.9 106.4 28.9 


Cash Flow Statement (Rp bn) 

Rates & Ratio 






Chg in Wkg.Cap. (87) 91 (181) (42) ROA (%) 11.4 8.5 12.2 14.0 

Other Operating CF (71) (112) (220) (264) ROCE (%) 17.8 16.1 16.0 17.7 






Other Investing CF 0 (1,212) (81) (85) Inventory Turn (avg days) 22.7 25.0 22.8 28.3 

Net Investing CF (362) (1,812) (481) (285) Current Ratio (x) 3.5 3.9 2.7 2.4 


Chg in Gross Debt 406 621 (82) (45) Net Debt/Equity (X) 1.0 0.6 0.6 0.3 

Capital Issues 0 1,120 0 0 Capex to Debt (%) 40.2 39.4 27.8 14.3 

Other Financing CF (67) 0 0 0 N. Cash/(Debt)PS (Rp) (263.7) (297.5) (343.3) (263.4) 

Net Financing CF 318 1,699 (170) (158) Opg CFPS (Rp) 87.6 81.1 152.2 196.0 

Net Cashflow 73 284 (256) 257 Free CFPS (Rp) (105.2) (53.3) (1.3) 132.1 

Quarterly / Interim Income Statement (Rp bn) 

Revenue Composition (11M07) 

FY Dec 4Q2006 1Q2007 2Q2007 3Q2007 

Turnover 379 264 393 458 


Gross Profit 121 99 138 198 



Other Non Opg (Exp)/Inc (5) (11) 5 (25) 



Exceptional Gain/(Loss) 0 0 (3) 0 


Tax (12) (13) (20) (28) 


Net Profit 28 18 56 62 


EBITDA 69 59 108 128 

Sales Gth (%) 8.3 (30.3) 48.7 16.5 

EBITDA Gth (%) (35.9) (14.2) 81.8 19.1 

Opg Profit Gth (%) (27.7) (5.3) 46.0 49.6 

Net Profit Gth (%) (56.2) (34.1) 201.6 11.3 

Gross Margins (%) 32.0 37.6 35.2 43.2 




Rubber 30% 

Source: Company 

Oil Palm Related 

70% 

Page 57


Sorini Corporation 

Bloomberg: SOBI IJ | Reuters: SOBI.JK 

BUY Rp1,410 JCI : 2,419.6 

Price Target : 12-Month Rp 2,750 

Potential Catalyst: 1Q08 result and acquisition of cassava plantation 

Analyst 

Agus Pramono CFA +6221 3983 2668 

agus.pramono@id.dbsvickers.com 


Rp 

1,917.00 

1,717.00 

1,517.00 

1,317.00 

1,117.00 

917.00 

717.00 

517.00 

317.00 

117.00 


2004 2005 2006 2007 2008 

Sorini Corporation (LHS) Relative JCI INDEX (RHS) 



Turnover 807 1,025 1,174 1,324 

EBITDA 55 161 192 278 


Net Profit 28 92 109 154 

Net Pft (Pre Ex.) 28 92 109 154 

EPS (Rp) 30.9 102.0 120.7 171.2 

EPS Pre Ex. (Rp) 30.9 102.0 120.7 171.2 

EPS Gth Pre Ex (%) (22) 230 18 42 

Diluted EPS (Rp) 30.9 102.0 120.7 171.2 

Net DPS (Rp) 12.0 12.0 30.6 36.2 

BV Per Share (Rp) 397.3 487.3 595.9 736.5 

PE (X) 45.7 13.8 11.7 8.2 

PE Pre Ex. (X) 45.7 13.8 11.7 8.2 

P/Cash Flow (X) 41.7 13.4 10.8 7.4 

EV/EBITDA (X) 25.9 8.9 7.7 5.9 

Net Div Yield (%) 0.9 0.9 2.2 2.6 

P/Book Value (X) 3.5 2.9 2.4 1.9 


ROAE (%) 8.0 23.1 22.3 25.7 

Consensus EPS (Rp): 90 104 171 


Principal Business: Sorbitol producer 

357 

307 

257 

207 

157 

107 

57 

From sorbitol to ethanol 

Story: Sorini is a world class sorbitol producer that 

supplies to MNCs such as Unilever, Colgate and BASF. It 

has strong market shares in many countries. The 

company is buying 50k ha land and another 50k ha 

plasma land to be developed into cassava plantations 

which output will be used to produce sorbitol and 

ethanol. 

Point: The sorbitol business is a defensive over economic 

cycle and the company has exposure to both domestic 

and foreign markets. But with a cassava plantation, it 

will be able to reduce the cost of tapioca starch and 

increase margin by c. 10%; we assumed 7.5% margin 

expansion. Meanwhile, the ethanol business will 

generate c.35% gross margin, which means Sorini’s 

bottom line could expand to Rp154bn in FY09F. 

Estimated capex for the plantation is US$30m, and 

US$100m for the ethanol plant. We expect Sorini to 

produce 125k tons of cassava in 2009, 562.5k tons in 

2010 and 1,375k tons in 2011. It should start to 

produce ethanol in 2010 with production at 7.1Mlt, and 

grow 900% in 2011 and 110% in 2012. In 2010, its 

ethanol business should be able to generate Rp42bn 

revenue with gross profit margin of 34.7%. We forecast 

revenue from ethanol will grow by 965% in 2011 and 

124% in 2012. 

Relevance: Based on our DCF valuation, Sorini’s fair 

value is Rp2,750 per share, implying 16.1x FY09 PER. 

The stock is trading at 11.7x FY09 PE currently, 

representing 91% upside potential. Maintain Buy. 

At A Glance 


Mkt. Cap (Rpbn/US$m) 1,269 / 138 


AKR Corporindo (%) 69.9 


Avg. Daily Vol.(‘000) 7,938 

Page 58 




Sorini 




Turnover 807 1,025 1,174 1,324 Net Fixed Assets 241 308 436 693 





Other Non Opg (Exp)/Inc 10 0 0 0 Total Assets 642 790 971 1,286 






Minority Interest (2) (8) (10) (14) Shareholder’s Equity 358 439 536 663 


Net Profit 28 92 109 154 Total Cap. & Liab. 642 790 971 1,286 



Net Cash/(Debt) (141) (122) (177) (301) 

Sales Gth (%) 13.4 27.1 14.6 12.8 

EBITDA Gth (%) (17.5) 189.9 19.7 44.3 

Opg Profit Gth (%) (33.6) 266.9 15.9 41.5 

Net Profit Gth (%) (21.9) 230.3 18.3 41.9 



Rates & Ratio 


















Other Financing CF (11) 0 0 0 N. Cash/(Debt)PS (Rp) (156.3) (135.8) (197.0) (334.4) 

Net Financing CF 14 (2) 49 122 Opg CFPS (Rp) 41.5 164.3 151.1 232.6 

Net Cashflow 2 28 5 26 Free CFPS (Rp) (44.0) 32.5 (49.2) (106.9) 

Quarterly / Interim Income Statement (Rp bn) 

2008F Revenue Breakdown 

FY Dec 4Q2006 1Q2007 2Q2007 3Q2007 

Turnover 218 214 260 275 










Tax (4) (9) (10) (13) 

Minority Interest 1 (1) (3) (5) 



EBITDA 12 32 34 44 

Maltose Syrup 

6% 

Dextrose M ono 

5% 

Malto Dextrine 

3% 

Starch 

4% 

Sales Gth (%) (3.6) (1.8) 21.4 5.6 

EBITDA Gth (%) (40.9) 153.8 6.5 29.1 

Opg Profit Gth (%) (42.4) 162.5 6.3 29.7 

Net Profit Gth (%) (30.2) 131.6 (5.4) 39.1 

Gross Margins (%) 21.4 29.7 25.7 31.2 




Sorbitol 

82% 

Page 59


Tunas Baru Lampung 

Bloomberg: TBLA IJ | Reuters: TBLA.JK 

BUY Rp445 JCI : 2,419.6 

Price Target : 12-Month Rp780 

Potential Catalyst: Higher than expected 2007 results, higher crude oil 

price and CPO price recovery. 

Analyst 

Herry Dion Mahargono +6221 3983 2668 

herry.mahargono@id.dbsvickers.com 


Rp 

701.90 

601.90 

501.90 

401.90 

301.90 

201.90 

101.90 


2004 2005 2006 2007 2008 

Tunas Baru Lampung (LHS) Relative JCI INDEX (RHS) 



Turnover 1,194 1,566 2,249 2,207 

EBITDA 224 304 419 499 


Net Profit 53 87 152 179 

Net Pft (Pre Ex.) 53 87 152 179 

EPS (Rp) 12.8 21.2 36.8 43.3 

EPS Pre Ex. (Rp) 12.8 21.2 36.8 43.3 

EPS Gth Pre Ex (%) 749 65 74 18 

Diluted EPS (Rp) 11.6 19.2 33.4 39.3 

Net DPS (Rp) 3.8 6.3 11.0 13.0 

BV Per Share (Rp) 209.6 224.4 250.1 280.5 

PE (X) 35.5 21.5 12.4 10.5 

PE Pre Ex. (X) 35.5 21.5 12.4 10.5 

P/Cash Flow (X) 16.5 10.5 6.9 5.7 

EV/EBITDA (X) 9.3 7.7 5.8 5.2 

Net Div Yield (%) 0.8 1.4 2.4 2.9 

P/Book Value (X) 2.2 2.0 1.8 1.6 


ROAE (%) 7.7 9.7 15.5 16.3 

Consensus EPS (Rp): 


Principal Business: Planatation 

219 

199 

179 

159 

139 

119 

99 

79 

59 

39 

24 31 42 

The laggard 

Story: Tunas Baru Lampung (TBLA) guided that FY07 

net profit could reach Rp.100bn (+88% y-o-y), or 15% 

higher than our forecast. This would be led by strong 

commodity prices, mainly CPO, as CPO production fell 

c.12% y-o-y due to adverse weather. Recently, the 

company acquired 45,000ha land in West Kalimantan. 

We view this positively because it allows the company to 

grow amid intensifying competition for plantation land. 

Point: We remain optimistic of CPO prices, backed by a 

foreseeable critically low supply of oilseeds worldwide in 

2008/09 and persistently high crude oil price. As such, 

we expect the company to book a robust performance 

again this year on the back of stronger CPO price 

coupled with solid volume growth due to normalized 

weather and young tree profile. TBLA expects FFB 

production to nearly double in 2009 due to its young 

trees. And as a fully integrated company, TBLA is in a 

better position to cushion against lower CPO price 

compared to pure upstream players. 

Relevance: TBLA is currently trading at 13.3x and 11.3x 

2008-09 (FD) PER compared to the broader market’s 

14.5x and 11.9x, respectively. Our target price of Rp780 

is derived based on DCF valuation with WACC of 12.5% 

and 6% terminal growth rate. Our target price implies 

EV/ha (nucleus only) of US$10,400. 

At A Glance 


Mkt. Cap (Rpbn/US$m) 

1,854 / 202 


Sungai Budi (%) 19.6 

Sungai Budi Perkasa (%) 14.6 

Budi Sulfat Jaya(%) (%) 15.0 


Avg. Daily Vol.(‘000) 25,497 

Page 60 




Tunas Baru Lampung 




Turnover 1,194 1,566 2,249 2,207 Net Fixed Assets 762 724 746 748 


Gross Profit 262 357 477 531 Other LT Assets 624 750 889 1,028 



Other Non Opg (Exp)/Inc 28 0 (4) (2) Total Assets 2,049 1,939 2,273 2,414 






Minority Interest 0 0 0 0 Shareholder’s Equity 864 926 1,032 1,157 





Net Cash/(Debt) (217) (464) (573) (706) 

Sales Gth (%) (2.2) 31.2 43.6 (1.9) 

EBITDA Gth (%) 38.8 35.5 37.9 19.2 

Opg Profit Gth (%) 12.8 57.8 42.2 16.4 

Net Profit Gth (%) 749.4 65.0 73.8 17.8 



Rates & Ratio 






Chg in Wkg.Cap. (102) 26 (136) 5 ROA (%) 3.0 4.4 7.2 7.6 

Other Operating CF 308 (132) (18) (100) ROCE (%) 8.5 12.0 14.1 14.2 









Chg in Gross Debt (96) (47) 139 52 Net Debt/Equity (X) 0.3 0.5 0.6 0.6 


Other Financing CF 0 0 0 0 N. Cash/(Debt)PS (Rp) (52.6) (112.6) (139.0) (171.2) 

Net Financing CF 206 (73) 93 (2) Opg CFPS (Rp) 112.9 11.4 62.9 59.7 

Net Cashflow 134 (143) (5) 17 Free CFPS (Rp) (17.5) (16.9) (23.9) 4.6 

Quarterly / Interim Income Statement (Rpbn) 

2007 Revenue Breakdown 

FY Dec 4Q2006 1Q2007 2Q2007 3Q2007 

Turnover 1,194 346 827 1,314 

Cost of Goods Sold (932) (291) (676) (1,051) 

Gross Profit 262 55 151 263 



Other Non Opg (Exp)/Inc 28 (7) (2) (15) 





Tax (26) (4) (10) (29) 




EBITDA 163 19 73 128 

Laundry 

Soap 3% 

PKO 16% 

PFAD 1% 

CNO 2% 

Cream Soap 

1% 

Sales Gth (%) 39.8 (71.0) 139.2 58.8 

EBITDA Gth (%) 33.4 (88.4) 282.1 75.9 

Opg Profit Gth (%) 34.2 (80.5) 183.6 91.1 

Net Profit Gth (%) 42.4 (96.0) 1,128.6 103.0 

Gross Margins (%) 22.0 15.9 18.2 20.0 




Olein 25% 

CPO 38% 

Page 61


Earnings Guide 

SINGAPORE : EARNINGS GUIDE 

Price/ Price/ Net 

Mkt Mkt Price Target Share Price Net Profit (Before EI) EPS CAGR EV/EBITDA BV Sales Dividend Yield Debt/ 

Company FYE Cap Cap (S$) Price % Performance (%) (Scts) 07-09 PE (x) (x) 

(x) (x) (%) Equity ROA ROE Disclosure 

(S$m) (US$m) 25-Mar (S$) Upside Rcmd 3M 6M 12M 07 08F 09F 08F 09F (%) 08F 09F 08F 09F 08F 08F 08F 09F 07 07 07 Analyst Legend 

BASIC MATERIALS 

Asia Enterprises Dec 110 80 0.40 0.73 85% B -16 -16 3 20 23 8.2 n.a 4.8x 3.2x n.a. 1.0x 0.5x 8.3% cash 16% 22% Jeremy Thia 

China Sun Bio-Chem Dec 227 165 0.28 0.61 118% B -43 -56 -48 60 64 70 8.0 8.6 8 3.5x 3.3x 1.9x 1.3x 0.7x 0.6x 2.8% 3.0% cash 11% 20% Team Coverage 

Ferro China Dec 1,079 782 1.35 2.75 104% B -26 -41 -16 75 218 286 27.0 35.3 55 5.0x 3.8x 5.0x 3.8x 0.8x 0.3x 1.5% 1.5% 0.46 5% 11% Paul Yong 

Fibrechem Dec 614 445 0.68 1.30 91% B -53 -46 -34 94 102 146 11.1 15.9 24 6.1x 4.3x 5.0x 3.2x 1.5x 1.7x 2.6% 3.7% cash 22% 36% Ho Pei Hwa 

Jiutian Chemical Dec 235 170 0.17 0.31 82% B -63 -74 -55 12 27 60 1.9 4.3 124 8.8x 4.0x 7.0x 2.7x 1.7x 1.6x 2.3% 5.1% 0.06 8% 13% Ho Pei Hwa 

Midas Hings Dec 811 851 0.96 1.60 67% B -38 -34 -37 32 43 70 5.0 8.3 48 19.1x 11.5x 13.3x 8.4x 3.9x 4.7x 2.6% 3.1% cash 15% 19% Paul Yong Note 3 

SP Chemical Dec 258 187 0.47 0.72 54% H -30 -39 -32 52 48 59 8.7 10.7 6 5.4x 4.4x 3.9x 3.4x 1.0x 0.5x 2.7% 2.7% 0.87 11% 26% Ho Pei Hwa 

Sector 3,334 2,679 344 524 690 6.4x 4.7x 

CONSUMER GOODS 

Celestial NutriFoods Dec 366 265 0.58 1.59 177% B -46 -52 -63 83 89 102 13.1 14.6 8 4.4x 3.9x 2.8x 2.1x 0.9x 0.9x 4.1% 4.6% 0.00 13% 27% Andy Sim 

Cerebos Sep 1,184 858 3.76 4.65 24% B -13 -5 15 84 92 100 29.1 31.9 9 12.9x 11.8x 6.5x 5.8x 3.1x 1.5x 6.6% 6.6% cash 13% 23% Andy Sim 

China Dairy Dec 92 67 0.21 0.24 12% FV -43 -53 -57 11 9 9 2.0 2.2 -6 10.4x 9.7x 4.9x 4.0x 0.8x 0.4x 1.4% 1.5% cash 6% 11% Andy Sim 

China Essence Mar 206 149 0.53 0.85 62% B -44 -45 -35 29 39 47 8.8 10.5 18 6.0x 5.0x 3.6x 2.3x 1.3x 1.6x 2.0% 2.3% cash 20% 28% Andy Sim 

China Fishery Group Dec 1,197 867 1.53 2.72 77% B -19 -20 -30 122 156 173 19.9 22.1 19 7.7x 6.9x 6.1x 5.0x 2.6x 1.8x 4.3% 4.8% 1.05 16% 48% Andy Sim 

China Hongxing Dec 1,473 1,067 0.58 0.90 55% B -40 -37 -17 82 103 138 3.9 5.0 25 14.9x 11.6x 9.0x 6.1x 1.9x 2.7x 1.3% 1.7% cash 15% 19% Paul Yong 

China Lifestyle Dec 161 117 0.32 0.63 97% B -26 -27 -9 17 24 30 4.8 6.1 33 6.6x 5.3x 4.0x 3.1x 1.4x 0.9x 3.0% 3.8% cash 15% 21% Andy Sim 

China Sky Chemical Fibre Dec 781 566 0.99 1.70 73% B -55 -49 -29 128 151 222 18.5 27.2 30 5.3x 3.6x 2.4x 1.3x 1.2x 1.3x 2.8% 4.1% cash 27% 28% Ho Pei Hwa 

China Sports International Dec 301 218 0.90 1.77 98% B -50 -44 12 31 44 59 13.0 17.5 39 6.9x 5.2x 4.4x 2.9x 2.0x 0.9x 2.9% 3.9% cash 36% 47% Paul Yong 

First Resources Dec 1,468 1,064 1.00 2.00 100% B -12 -9 -9 64 162 145 11.1 9.9 50 9.0x 10.0x 5.2x 5.4x 2.3x 3.8x 0.0% 0.0% 0.13 9% 21% Benjamin Santoso 

Hongguo Int Dec 206 150 0.52 0.94 81% B -41 -41 -57 22 26 31 6.4 7.7 19 8.1x 6.8x 6.3x 5.3x 1.8x 1.1x 3.1% 3.7% cash 18% 24% Team Coverage 

Hsu Fu Chi Jun 739 536 0.93 1.45 56% B -15 -13 5 50 58 68 7.4 8.6 17 12.7x 10.9x 6.2x 5.1x 1.8x 1.2x 3.2% 3.7% cash 11% 17% Andy Sim 

Luzhou Bio-Chem Dec 73 53 0.19 0.25 33% FV -46 -53 -72 11 11 12 2.8 3.0 3 6.7x 6.1x 4.0x 3.4x 0.7x 0.1x 6.7% 7.4% 0.64 5% 14% Team Coverage 

Man Wah Mar 150 109 0.23 0.59 162% B -26 -4 0 16 31 43 4.7 6.5 64 4.8x 3.5x 3.0x 2.2x 1.4x 0.6x 5.4% 7.4% 0.04 19% 27% Wee Lee Chong 

Olam International Jun 3,533 2,560 2.27 3.80 67% B -21 -27 -24 109 140 217 8.8 12.6 34 25.8x 17.9x 15.1x 12.5x 4.7x 0.5x 0.9% 1.4% 3.86 4% 24% Paul Yong Note 2 

Pacific Andes Mar 668 484 0.50 0.92 87% B -22 -33 -23 () 89 120 7.6 9.0 42 6.5x 5.5x 6.6x 5.8x 1.0x 0.4x 4.4% 6.0% 1.14 7% 27% Andy Sim 

Petra Food Dec 665 482 1.25 1.20 -4% FV -16 -19 -29 35 41 44 7.7 8.3 12 16.2x 15.1x 10.7x 8.8x 2.3x 0.5x 2.5% 2.6% 1.06 6% 15% Andy Sim 

Sing Lun Hings Dec 86 62 0.33 0.33 0% B 29 35 89 9 9 10 3.6 3.8 3 9.3x 8.7x 5.4x 4.8x 1.5x 0.4x 4.8% 4.8% cash 12% 18% Team Coverage 

YHI Hings Dec 158 114 0.27 0.42 55% B -25 -32 -32 26 25 27 4.2 4.5 1 6.4x 5.9x 4.8x 4.5x 0.9x 0.3x 4.7% 5.1% 0.41 9% 17% Team Coverage 

Wilmar Hings Dec 25,990 18,830 4.07 5.90 45% B -18 12 55 801 1,067 1,167 16.7 18.3 21 24.4x 22.3x 15.6x 13.6x 2.2x 0.5x 0.7% 0.7% 0.50 6% 13% Benjamin Santoso Note 2 

Sector 39,499 28,618 1,731 2,365 2,764 16.7x 14.3x 

CONSUMER SERVICES 

Amara Hings Dec 309 224 0.54 0.81 51% B -18 -25 -14 5 16 24 2.8 4.1 113 19.0x 13.0x 13.6x 10.5x 1.7x 2.3x 0.9% 0.9% 1.16 7% 20% Team Coverage 

ComfortDelgro Dec 3,565 2,583 1.71 2.15 26% B -3 -13 -8 223 251 279 12.1 13.5 12 14.1x 12.7x 6.3x 5.8x 2.3x 1.1x 5.4% 6.1% 0.03 7% 15% Paul Yong 

Hotel Grand Central Dec 435 316 0.94 1.34 44% B -12 -19 6 34 35 37 7.6 8.0 5 12.3x 11.7x 6.5x 6.0x 0.7x 3.3x 2.2% 2.3% cash 8% 10% Team Coverage 

Oriental Century Dec 85 61 0.51 0.97 90% B -42 -42 -50 8 8 9 4.9 5.3 7 10.6x 9.7x 4.4x 3.0x 1.7x 5.3x 0.9% 1.0% cash 18% 20% Andy Sim 

Raffles Education Jun 2,167 1,570 0.95 1.86 96% B -33 -13 -17 49 90 126 4.0 5.6 54 24.0x 17.1x 19.6x 14.6x 6.7x 10.1x 3.6% 5.0% cash 26% 50% Andy Sim 

Robinson & Co Jun 593 430 6.90 6.26 -9% S 59 40 37 41 44 48 50.7 55.8 8 13.6x 12.4x 7.6x 6.0x 2.3x 1.1x 2.9% 3.2% cash 11% 16% Team Coverage 

Singapore Airlines Mar 17,842 12,927 15.04 22.50 50% B -14 -20 -12 1,708 1,830 1,964 154.0 161.5 5 9.8x 9.3x 3.9x 3.5x 1.1x 1.1x 3.6% 3.6% cash 9% 15% Paul Yong 

SPH Aug 7,187 5,207 4.52 5.80 28% B 1 5 4 506 521 545 32.9 34.4 4 13.7x 13.1x 10.4x 9.9x 3.1x 5.2x 7.1% 7.7% cash 16% 24% Paul Yong Note 2 

Singapore Post Mar 2,194 1,590 1.14 1.35 18% B 3 -7 2 134 141 153 7.4 8.0 7 15.3x 14.2x 11.1x 10.4x 10.4x 4.7x 5.9% 6.0% 1.31 20% 84% Sachin Mittal 

SMRT Mar 2,697 1,954 1.78 1.78 0% H 6 3 19 135 145 156 9.6 10.3 7 18.5x 17.3x 8.9x 8.3x 4.1x 3.4x 4.1% 4.4% 0.10 10% 22% Paul Yong 

The Hour Glass Mar 192 139 0.83 1.19 43% B -15 2 36 18 26 28 11.4 12.3 -13 7.3x 6.8x 5.0x 4.4x 1.0x 0.4x 5.5% 5.9% cash 8% 11% Team Coverage 

Sector 37,266 27,000 2,862 3,107 3,368 12.0x 11.1x 

FINANCIALS 

Banking 

OCBC Bank Dec 25,200 18,258 8.06 9.00 12% B -4 -8 -9 1,878 2,035 2,259 66.0 73.3 10 12.2x 11.0x n.a. n.a. 1.6x n.a. 3.8% 4.2% cash nm 15% Team Coverage 

UOB Bank Dec 29,379 21,286 19.28 19.30 0% B -3 -11 -8 2,109 2,261 2,408 142.4 151.7 7 13.5x 12.7x n.a. n.a. 1.7x n.a. 3.9% 4.2% cash nm 13% Team Coverage 

Sector 54,578 39,544 3,987 4,295 4,668 12.7x 11.7x 

Non-Bank Financials 

ARA Asset Management Dec 413 299 0.71 1.13 59% B -30 -38 -38 34 37 47 6.4 8.1 18 11.2x 8.8x 7.8x 5.7x 3.7x 5.5x 6.3% 8.0% cash 41% 58% Team Coverage Note 2 

Babcock & Brown Dec 239 174 0.62 1.20 95% B -35 -38 -42 32 34 8.7 n.a 7.1x 9.6x n.a. 0.8x 4.6x 17.1% 0.57 6% 11% Jesvinder Sandhu 

Hotung Investment Dec 269 195 US$0.16 US$0.22 42% B -3 -3 7 21 21 1.7 n.a 12.4x 6.0x n.a. 0.6x 5.0x 7.3% cash 5% 5% Team Coverage 

Kim Eng Hings Dec 1,230 891 2.05 2.37 16% H -7 9 29 149 157 170 26.9 29.2 7 7.6x 7.0x 1.5x 0.9x 1.2x 2.1x 3.9% 3.9% cash 7% 17% Team Coverage 

Pacific Shipping Trust Dec 191 138 US$ 0.41 US$0.52 27% B -2 -6 -5 19 20 5.8 n.a 9.7x 7.1x n.a. 0.9x 4.0x 10.3% 0.72 8% nm Jesvinder Sandhu Note 3, 5 

Singapore Exchange Jun 8,050 5,833 7.55 13.20 75% B -44 -43 18 311 423 454 39.9 42.8 20 18.9x 17.6x 13.8x 12.9x 9.2x 11.0x 4.8% 5.1% cash 30% 60% Team Coverage 

Sing Investments & FinancDec 162 117 1.54 1.92 25% H -6 -10 -8 13 13 13 12.3 12.6 -3 12.5x 12.2x n.a. n.a. 0.8x n.a. 3.4% 3.4% cash nm 7% Team Coverage 

Sector 10,555 7,647 579 705 685 15.0x 14.4x 

Page 62









HEALTHCARE 

AsiaPharm Group Dec 352 255 0.72 - NA Accept 21 32 1 12 16 3.2 n.a 22.6x 14.5x n.a. 2.1x 3.4x 0.8% 0.08 6% 8% Team Coverage 

Offer 

Eu Yan Sang Jun 198 144 0.55 0.65 18% H -6 -10 -15 15 16 18 4.4 4.9 7 12.4x 11.3x 6.9x 5.9x 2.0x 0.9x 4.0% 4.4% 0.11 11% 17% Team Coverage Note 3 

LMA International Dec 132 95 0.23 0.43 91% FV -51 -59 -60 21 20 3.5 n.a 6.5x 1.9x n.a. 0.9x 1.0x 0.0% cash 15% 18% Team Coverage 

Parkway Dec 2,622 1,900 3.40 3.95 16% B -14 -20 5 90 102 118 13.3 15.4 14 25.6x 22.1x 21.9x 20.0x 5.3x 2.8x 3.5% 4.1% 0.07 26% 59% Andy Sim 

Raffles Medical Dec 624 452 1.21 1.74 43% B -19 -19 11 23 28 36 5.5 7.0 24 22.1x 17.3x 15.8x 11.8x 2.9x 3.0x 3.6% 4.6% 0.03 17% 23% Andy Sim Note 2 

Thomson Medical Aug 187 135 0.64 0.87 36% B 3 -4 20 10 11 13 3.8 4.3 15 16.8x 14.9x 10.8x 9.3x 1.9x 3.1x 3.0% 3.4% cash 9% 11% Team Coverage 

Sector 4,115 2,981 172 193 184 21.4x 19.7x 

INDUSTRIALS 

Beng Kuang Dec 87 63 0.23 0.21 -7% FV -20 -17 55 7 8 9 2.1 2.5 21 10.7x 9.1x 9.5x 8.3x 2.3x 0.6x 3.7% 4.4% 0.47 9% 25% Jeremy Thia 

Boustead Singapore Mar 491 356 1.92 1.90 -1% FV -20 -19 10 35 45 50 17.7 19.4 18 10.8x 9.9x 4.8x 4.0x 2.9x 1.1x 3.9% 3.9% cash 12% 29% Tan Ai Teng 

China Merchants Dec 451 327 0.78 1.10 42% B -20 -4 -5 50 52 54 7.2 6.3 -14 10.7x 12.3x 6.7x 8.0x 0.8x 6.8x 6.5% 6.5% cash 8% 9% Paul Yong 

Cosco Corp Dec 7,700 5,579 3.44 5.40 57% B -42 -37 19 337 507 667 22.6 29.8 41 15.2x 11.5x 7.8x 5.9x 6.0x 1.6x 2.1% 2.4% 0.05 12% 42% Janice Chua 

Eng Kong Dec 45 33 0.19 0.23 21% H -14 -21 3 5 6 7 2.5 2.8 20 7.6x 6.8x 3.1x 2.6x 0.8x 0.6x 3.2% 3.5% cash 6% 10% Jeremy Thia 

Epure International Dec 639 463 0.50 1.07 117% B -29 -26 -23 32 54 63 4.2 4.9 40 11.9x 10.1x 7.8x 6.2x 2.4x 3.4x 0.0% 0.0% cash 11% 18% Wee Lee Chong Note 2 

Hong Leong Asia Dec 942 683 2.47 4.30 74% B -34 -34 34 83 119 136 31.3 35.7 28 7.9x 6.9x 4.7x 4.2x 1.4x 0.3x 5.1% 5.8% 0.21 3% 17% Paul Yong Note 3 

Hupsteel Jun 182 132 0.29 0.51 77% B -25 -39 -19 31 32 39 5.1 6.3 4 5.7x 4.6x 4.4x 3.6x 0.9x 0.5x 7.1% 8.6% 0.17 16% 23% Jeremy Thia 

Inter-Roller Engineering Dec 153 111 0.46 0.42 -9% S -26 -46 -47 4 14 4.2 n.a 11.0x 9.0x n.a. 1.9x 1.0x 6.0% cash 13% 24% Paul Yong 

Keppel Corporation Dec 15,914 11,530 10.02 12.56 25% B -22 -27 7 1,025 1,154 1,324 73.8 84.7 14 13.6x 11.8x 9.9x 8.9x 2.9x 1.5x 2.2% 2.5% 0.01 8% 24% Jesvinder Sandhu 

Kian Ho Bearings Dec 46 33 0.20 0.20 5% FV -7 -22 -32 6 6 2.6 n.a 7.5x 7.2x n.a. 0.8x 0.5x 2.0% 0.62 6% 12% Team Coverage 

KSH Holdings Mar 65 47 0.37 0.82 122% B -24 -40 13 6 8 19 3.9 9.1 62 9.4x 4.1x 5.7x 3.6x 1.4x 0.3x 2.8% 2.8% 0.05 5% 15% Team Coverage Note 2 

Nam Lee Pressed Metal Sep 70 51 0.16 0.22 43% H -6 -59 -51 8 8 9 1.8 2.0 -4 8.4x 7.6x 5.6x 5.8x 0.8x 0.4x 1.9% 2.1% 0.22 7% 11% Jeremy Thia 

Pan-United Corporation Dec 338 245 0.62 1.16 89% B -19 -29 -23 34 38 43 6.9 7.9 12 8.9x 7.8x 5.6x 4.9x 1.4x 0.6x 7.6% 8.4% 0.10 8% 14% Jesvinder Sandhu 

Rickmers Maritime Dec 390 283 1.00 1.80 80% B -15 -35 -36 20 29 29 6.9 6.9 15 14.5x 14.5x 13.7x 13.5x 0.7x 3.5x 11.8% 11.8% 0.55 3% 5% Jesvinder Sandhu Note 2 

See Hup Seng Dec 108 78 0.30 0.53 77% H -53 -65 -38 14 16 18 4.4 5.1 13 6.8x 5.9x 3.5x 3.0x 1.3x 0.6x 0.0% 0.0% cash 18% 29% Jesvinder Sandhu 

SembCorp Industries Dec 7,317 5,302 4.10 4.47 9% FV -28 -34 -18 602 553 31.0 n.a 13.2x 7.6x n.a. 2.2x 0.8x 3.8% 0.01 6% 18% Jesvinder Sandhu 

SembCorp Marine Dec 7,726 5,598 3.73 4.50 21% B -10 -18 50 362 434 524 21.0 25.3 20 17.8x 14.8x 11.4x 9.5x 4.0x 1.4x 3.9% 4.7% cash 6% 16% Jesvinder Sandhu 

SIA Engineering Mar 4,297 3,113 4.00 3.77 -6% H -10 -18 -16 242 262 288 25.1 27.6 9 15.9x 14.5x 12.1x 11.0x 3.7x 4.1x 3.3% 3.5% cash 18% 24% Janice Chua 

Singapore Shipping Mar 172 125 0.40 0.47 19% H 3 -6 8 7 7 5 1.5 1.1 -19 25.7x 34.9x 22.1x 20.2x 2.0x 13.4x 30.4% 5.1% cash 6% 6% Team Coverage 

Sinwa Limited Dec 63 46 0.28 0.39 39% H -51 -60 -44 8 10 12 4.6 5.4 23 6.0x 5.2x 5.3x 4.4x 1.1x 0.4x 5.2% 6.1% 0.21 10% 20% Jeremy Thia 

SP AusNet Mar 3,118 2,259 1.49 1.73 16% B -4 -11 -14 206 211 10.1 n.a 14.8x 13.4x n.a. 1.0x 2.4x 9.8% 1.43 6% 13% Jesvinder Sandhu 

SSH Corporation Jun 141 102 0.26 0.37 44% B -33 -34 6 18 23 28 4.3 5.2 24 6.0x 5.0x 5.2x 4.7x 1.4x 0.6x 4.2% 5.0% 0.41 14% 23% Wee Lee Chong 

ST Engineering Dec 10,017 7,258 3.35 4.00 19% H -11 -11 -1 504 542 615 18.2 20.6 11 18.4x 16.3x 11.4x 10.3x 6.0x 1.8x 5.4% 6.1% cash 9% 31% Janice Chua 

Sunpower Dec 61 44 0.19 Under nm NR -29 -42 -49 6 8 

n.a 8.0x 5.8x n.a. 1.4x 0.4x 0.0% 0.37 6% 19% Ho Pei Hwa 

Review 

2.3 

Tat Hong Mar 1,098 795 2.21 2.70 22% FV -31 -1 52 46 87 103 17.5 20.7 43 12.6x 10.7x 7.6x 6.3x 3.0x 2.0x 3.2% 3.8% 0.25 14% 34% Wee Lee Chong 

Yangzijiang Dec 3,037 2,200 0.92 1.45 57% H -55 -51 -3 171 259 329 7.1 9.0 32 13.0x 10.3x 8.5x 5.5x 4.0x 2.4x 1.5% 2.0% cash 9% 40% Janice Chua Note 2 

Sector 64,668 46,854 3,871 4,492 4,371 14.4x 12.4x 

OIL & GAS 

Aqua-Terra Dec 109 79 0.31 0.35 14% FV -34 -36 -26 12 15 18 4.4 5.1 23 7.0x 6.1x 4.5x 3.6x 1.0x 0.4x 1.5% 1.5% 0.03 7% 18% Wee Lee Chong 

Ezra Hings Aug 1,078 780 1.84 3.15 71% B -43 -40 -29 35 60 106 10.3 18.2 73 17.8x 10.1x 13.7x 9.4x 1.6x 3.8x 2.7% 3.3% 0.36 15% 35% Jesvinder Sandhu Note 3, 5 

Jaya Hings Jun 1,093 792 1.42 2.15 51% B -22 -27 -2 122 149 167 19.3 21.7 17 7.3x 6.5x 5.9x 5.4x 2.4x 3.1x 8.1% 9.2% 0.00 22% 35% Jesvinder Sandhu 

KS Energy Dec 420 305 1.67 3.00 79% B -48 -57 -42 39 68 82 27.0 32.5 46 6.2x 5.1x 8.6x 7.9x 1.5x 0.7x 5.6% 5.8% 1.14 13% 42% Wee Lee Chong 

Singapore Petroleum Co Dec 3,397 2,462 6.58 7.27 10% B -13 0 41 508 495 460 96.1 89.4 -5 6.8x 7.4x 4.7x 4.7x 1.7x 0.4x 8.8% 8.1% 0.20 14% 30% Team Coverage 

Swiber Hings Dec 1,018 738 2.40 3.49 45% B -30 -26 94 37 99 134 23.3 31.6 95 10.3x 7.6x 9.7x 6.4x 2.7x 1.7x 0.0% 0.0% 0.11 22% 44% Wee Lee Chong 

Swissco International Dec 147 106 0.82 1.41 71% B -36 -37 30 5 12 13 6.8 7.1 67 12.0x 11.5x 2.7x 1.9x 0.8x 3.1x 2.4% 2.4% cash 25% 30% Wee Lee Chong 

Sector 7,263 5,262 757 898 980 8.1x 7.4x 

PROPERTY 

Allgreen Properties Dec 1,940 1,406 1.22 1.66 36% B -18 -31 -27 146 167 278 10.5 17.5 38 11.7x 7.0x 10.5x 5.6x 0.8x 3.4x 2.7% 2.7% 0.30 5% 8% Team Coverage 

Banyan Tree Dec 990 717 1.30 2.38 83% B -36 -33 -40 37 59 79 7.9 10.5 45 16.5x 12.3x 9.9x 8.1x 1.5x 2.1x 3.0% 4.0% 0.27 7% 17% Team Coverage 

City Development Dec 9,911 7,181 10.90 11.62 7% H -22 -34 -25 706 868 1,158 95.4 127.4 28 11.4x 8.6x 8.5x 6.4x 1.7x 2.6x 4.8% 6.4% 0.47 6% 14% Team Coverage Note 2 

Fraser & Neave Sep 6,673 4,686 4.81 5.85 22% B -16 -11 -7 367 424 548 30.7 39.6 19 15.7x 12.1x 11.6x 9.8x 1.2x 1.3x 3.2% 4.1% 0.54 3% 9% Andy Sim 

Gallant Venutre Dec 1,532 1,110 0.64 1.22 92% B -35 -47 -47 15 99 146 4.1 6.1 215 15.5x 10.5x 7.5x 4.9x 1.1x 4.3x 0.0% 0.0% 0.01 1% 1% Team Coverage 

Guocoland Jun 3,621 2,623 4.08 4.14 1% H -28 -19 18 165 217 295 24.5 33.2 23 16.7x 12.3x 18.8x 12.4x 1.7x 4.7x 1.6% 1.8% 0.58 8% 22% Team Coverage Note 2 

Ho Bee Dec 675 489 0.92 1.22 33% H -37 -57 -55 272 190 198 25.8 26.8 -15 3.6x 3.4x 4.2x 2.5x 0.7x 0.8x 1.6% 1.6% 1.08 18% 42% Team Coverage 

HPL Dec 1,442 1,045 2.86 3.38 18% H -29 -40 -38 49 91 123 18.1 24.4 56 15.8x 11.7x 10.8x 8.6x 1.1x 2.3x 1.1% 1.4% 0.74 6% 13% Team Coverage Note 2 

Keppel Land Dec 3,991 2,892 5.54 6.84 23% B -25 -33 -40 246 424 559 59.3 78.2 51 9.3x 7.1x 10.2x 8.0x 1.5x 3.9x 1.2% 1.2% 0.41 14% 40% Team Coverage 

SC Global Dec 550 398 1.39 1.89 36% H -41 -50 -39 28 61 181 15.5 45.8 153 9.0x 3.0x 11.6x 2.4x 1.4x 2.1x 5.9% 5.9% 3.22 2% 9% Team Coverage 

Singapore Land Dec 2,743 1,987 6.65 10.81 63% B -16 -37 -38 137 175 221 42.4 53.6 27 15.7x 12.4x 15.1x 12.3x 0.7x 5.5x 2.6% 3.2% 0.16 28% 38% Jeremy Thia 

United Engineers Dec 851 616 3.85 4.52 18% B 3 1 28 8 93 106 42.1 48.2 nm 9.2x 8.0x 9.3x 8.1x 1.0x 1.3x 2.1% 2.1% 0.40 11% 25% Jeremy Thia 

United Industrials Corp Dec 3,609 2,615 2.62 3.22 23% H -5 -17 -8 124 209 225 15.2 16.3 35 17.3x 16.1x 18.6x 16.3x 1.0x 4.7x 1.1% 1.1% 0.25 20% 41% Jeremy Thia 

UOL Group Dec 3,057 2,215 3.84 5.46 42% B -14 -28 -23 93 267 391 33.5 49.2 105 11.5x 7.8x 7.3x 4.9x 0.7x 3.3x 2.2% 2.2% 0.06 14% 21% Jeremy Thia 

Wheelock Properties Mar 2,094 1,517 1.75 1.79 2% H -18 -35 -45 119 133 581 11.1 48.6 121 15.7x 3.6x 12.6x 1.7x 1.0x 5.3x 0.8% 3.3% cash 11% 17% Team Coverage 

Wing Tai Hings Jun 1,745 1,265 2.20 2.31 5% H -22 -38 -20 382 165 178 21.2 22.4 -34 10.4x 9.8x 10.2x 8.0x 1.1x 4.6x 2.0% 2.0% 0.39 13% 29% Team Coverage Note 2 

Yanlord Dec 3,532 2,559 1.95 3.12 60% B -39 -40 -16 177 316 380 17.3 20.8 42 11.3x 9.4x 6.9x 4.8x 2.0x 2.4x 2.7% 3.2% 0.13 7% 18% Jeremy Thia 

Sector 48,956 35,321 3,073 3,958 5,648 12.4x 8.7x 

Page 63









REITS 

Allco Reit Dec 575 417 0.82 1.23 51% B -9 -21 -28 48 47 49 4.4 4.6 287 18.4x 17.9x 19.7x 19.6x 0.6x 5.9x 8.1% 8.2% 0.82 1% 2% Team Coverage 

Ascendas REIT Mar 2,956 2,142 2.23 2.80 25% B -8 -16 -4 164 189 217 12.7 14.1 10 17.5x 15.8x 19.7x 18.2x 1.5x 9.3x 6.3% 6.7% 0.60 5% 8% Team Coverage 

Ascendas India Trust Mar 748 542 1.00 1.84 85% B -21 -33 -16 30 47 55 4.8 7.1 57 20.7x 14.1x 17.1x 13.7x 0.9x 7.2x 6.2% 7.3% 0.41 3% 7% Team Coverage Note 2 

CapitaCommercial Trust Dec 2,882 2,088 2.08 3.08 48% B -13 -23 -25 120 149 181 9.9 12.0 20 20.9x 17.3x 25.7x 20.3x 0.7x 10.5x 5.2% 6.3% 0.31 2% 3% Team Coverage Note 2 

CapitaMall Trust Dec 5,672 4,109 3.41 3.93 15% B 0 -10 -7 219 256 282 15.0 16.1 10 22.8x 21.2x 24.0x 22.3x 1.5x 11.7x 4.5% 5.0% 0.53 4% 6% Team Coverage Note 2 

CDL Hospitality Dec 1,714 1,242 2.08 2.90 39% B -11 -11 6 67 91 109 10.5 12.1 21 19.8x 17.1x 19.6x 17.7x 1.3x 13.8x 5.3% 6.3% 0.21 4% 6% Team Coverage Note 2, 3 

Fraser Centrepoint Sep 724 524 1.17 1.71 47% B -16 -25 -35 40 46 49 6.2 6.5 7 18.8x 18.1x 22.5x 20.8x 1.0x 8.4x 6.4% 6.6% 0.43 3% 5% Team Coverage 

Macquarie Meag Prime ReDec 1,153 835 1.21 1.63 35% B 6 -2 -1 59 71 74 6.3 6.5 16 19.1x 18.6x 23.4x 22.9x 0.8x 9.8x 6.1% 6.4% 0.40 2% 3% Team Coverage Note 3 

Mapletree Logistics Dec 1,064 771 0.96 1.42 48% B -14 -22 -26 71 86 113 6.7 6.8 14 14.4x 14.1x 17.3x 18.2x 1.0x 6.6x 7.0% 7.1% 1.20 3% 7% Team Coverage Note 2, 3 

Parkway Life REIT Dec 734 532 1.22 1.50 23% B 9 n.a n.a 14 39 41 6.2 6.6 76 19.6x 18.6x 19.6x 18.6x 0.9x 15.9x 5.3% 5.5% 0.01 1% 2% Andy Sim Note 2 

Suntec REIT Sep 2,205 1,597 1.48 1.98 34% B -12 -23 -24 115 150 172 8.2 8.7 16 18.0x 17.1x 22.4x 21.2x 0.6x 9.5x 6.1% 6.6% 0.25 2% 3% Team Coverage Note 3 

Sector 20,426 14,799 947 1,171 1,343 17.4x 15.2x 

TECHNOLOGY 

Advance SCT Dec 96 70 0.31 0.40 31% FV -68 -66 -61 10 25 37 8.0 11.8 78 3.8x 2.6x 3.9x 3.5x 0.6x 0.1x 1.6% 1.6% 0.39 5% 11% Sachin Mittal 

Aztech Systems Dec 95 69 0.23 0.22 -2% S -32 -43 -43 18 9 9 2.2 2.2 -29 10.4x 10.2x 3.2x 2.6x 1.0x 0.3x 2.9% 2.9% cash 12% 21% Sachin Mittal 

Bright World Dec 180 130 0.45 0.40 -10% FV -13 -35 8 26 23 28 5.7 6.9 3 7.9x 6.6x 4.7x 3.1x 1.3x 1.3x 0.0% 0.0% 0.05 23% 28% Ho Pei Hwa Note 3 

China Auto Electronics Dec 108 78 0.19 0.55 191% B -69 -69 15 14 24 36 3.6 5.2 63 5.3x 3.6x 4.3x 3.5x 0.9x 0.5x 4.7% 6.9% cash 12% 24% Wee Lee Chong 

Creative Jun 533 386 6.24 5.27 -16% H -2 1 -35 39 9 18 10.4 21.6 -32 60.3x 28.9x 13.6x 10.2x 0.9x 0.5x 4.5% 4.5% cash 4% 7% Tan Ai Teng 

CSE Global Dec 441 319 0.87 1.63 87% B -28 -30 -12 42 54 70 10.8 14.0 29 8.1x 6.2x 5.4x 4.2x 2.5x 0.8x 3.4% 3.4% 0.31 13% 34% Sachin Mittal Note 3 

CSM Dec 1,804 1,307 0.71 0.68 -5% FV -27 -33 -52 127 22 137 0.9 5.4 4 79.8x 13.1x 4.7x 4.2x 0.8x 0.9x 0.0% 0.0% 0.57 2% 6% Tan Ai Teng 

Ellipsiz Jun 49 35 0.19 0.20 5% S -49 -63 -80 15 5 5 1.9 2.1 -40 10.0x 9.0x 1.0x 0.8x 0.4x 0.3x 1.0% 1.1% cash 8% 13% Tan Ai Teng Note 2, 3 

Electrotech Dec 133 96 0.44 0.47 7% H -10 -13 -19 23 24 26 7.8 8.5 6 5.6x 5.1x 1.6x 1.7x 0.7x 0.5x 5.4% 5.9% cash 11% 14% Team Coverage 

Global Testing Corp Dec 121 87 0.12 0.15 28% H -34 -55 -50 (6) 18 19 1.7 1.9 nm 6.7x 6.2x 1.3x 0.8x 0.5x 1.1x 0.0% 0.0% cash (12%) (17%) Tan Ai Teng 

HLN Technologies Dec 32 23 0.29 0.51 74% H -43 -50 -33 4 7 9 6.3 8.5 52 4.6x 3.4x 2.3x 1.5x 1.1x 0.4x 0.0% 0.0% cash 11% 22% Tan Ai Teng 

Lottvision Mar 61 44 0.13 0.50 297% B -42 -63 -38 (2) (5) 2 (1.0) 0.4 n.m nm 32.9x nm nm 0.7x 17.2x 0.0% 0.0% cash (3%) (3%) Ho Pei Hwa 

Map Technology Dec 107 78 0.35 0.48 38% B 1 0 9 12 18 21 5.9 6.8 12 5.9x 5.1x 2.6x 2.1x 1.5x 0.4x 10.2% 11.7% cash 13% 27% Tan Ai Teng Note 2 

Meiban Dec 111 81 0.34 0.68 102% B -44 -35 16 23 23 24 6.8 7.4 2 4.9x 4.5x 2.5x 2.1x 0.9x 0.2x 12.7% 12.7% 0.03 9% 20% Sachin Mittal 

Silverlake Axis Jun 471 341 0.42 0.74 76% B -28 -38 -42 35 55 65 4.9 5.8 37 8.6x 7.2x 7.6x 5.9x 4.8x 5.7x 7.1% 6.9% cash 67% 76% Sachin Mittal Note 2 

Singapore Computer Dec 127 92 0.82 0.88 7% H 8 0 6 18 13 15 8.5 9.5 -9 9.6x 8.6x 2.2x 1.6x 1.0x 0.3x 0.0% 0.0% cash 6% 16% Team Coverage 

TeleChoice Int'l Dec 115 83 0.26 0.20 -23% FV 4 -2 -2 14 15 15 3.3 3.3 n.a 7.8x 7.7x 4.0x 3.8x 1.7x 0.3x 9.8% 9.8% cash 11% 23% Team Coverage 

Unisteel Technology Dec 532 385 1.32 1.82 38% B -21 -37 -40 48 61 69 15.2 17.2 21 8.7x 7.7x 5.8x 4.9x 3.0x 1.6x 6.4% 6.4% cash 20% 33% Tan Ai Teng 

Venture Corporation Dec 3,099 2,245 11.30 12.81 13% H -10 -31 -23 300 291 313 106.7 114.6 2 10.6x 9.9x 7.6x 6.6x 1.5x 0.8x 4.4% 4.4% 0.02 10% 16% Tan Ai Teng Note 1 

Sector 8,214 5,951 760 691 919 11.9x 8.9x 

TELECOMMUNICATION 

MobileOne Dec 1,833 1,328 2.05 2.20 7% H 8 -1 -7 175 160 161 17.9 18.0 -4 11.4x 11.4x 6.2x 6.0x 8.1x 2.3x 7.0% 7.0% 0.99 16% 59% Sachin Mittal 

Nera Telecom Dec 143 104 0.40 0.55 38% B 7 10 -2 11 13 16 3.6 4.3 17 10.9x 9.1x 7.2x 6.5x 2.3x 0.7x 7.6% 7.6% cash 12% 18% Sachin Mittal 

Singapore Telecom Mar 63,842 46,255 4.01 4.50 12% B 4 5 26 3,594 3,703 4,155 23.3 26.2 8 17.2x 15.3x 9.6x 8.9x 2.8x 4.5x 3.6% 3.3% 0.25 11% 18% Sachin Mittal 

Starhub Dec 5,120 3,710 3.00 3.10 3% H 6 1 5 330 333 352 19.4 20.5 3 15.4x 14.6x 8.4x 7.6x 25.3x 2.3x 5.5% 5.8% 5.83 18% 104% Sachin Mittal Note 1 

Sector 70,938 51,397 4110 4209 4684 16.9x 15.1x 

Prices quoted in US$ converted to S$ at 1.38 to calculate ratios. 

Legend 

SB = Strong B, B = B, H = H, FV = FV, S = S, NR = Not Rated Note 1 As at 25 Mar 2008, DBSVS and its affiliates hold a proprietary position in these companies. 

Note 2 DBSVR, DBSVS, DBS Bank Ltd and/or other affiliates of DBSVUSA, within the past 12 months, have received 

We have to remove the followings stocks due to Blackout: 

compensation and/or within the next 3 months seek to obtain compensation for investment banking services 

Ascott Residence Trust, Capitaland,CapitaRetail China, Cityspring, Note 3 DBSVR, DBSVS, DBS Bank Ltd and/or other affiliates of DBSVUSA beneficially own a total 

K-REIT Asia and The Ascott Group 

of 1% or more of any class of common equity securities of these companies. 

Note 4 DBSVS has been appointed as the designated market maker of structured warrant(s) for these 

companies issued by DBS Bank Ltd. 

Note 5 DBSVR, DBSVS, DBS Bank Ltd and/or other affiliates of DBSVUSA beneficially own a total 


Additional disclsoure on Bright World 

A director of DBSVR and the CEO of DBSVS is an independent director of the covered company. 

Page 64



HONG KONG BLUE CHIPS : EARNINGS GUIDE 

FYE Mkt Mkt Price Target Share Price Avg CAGR EV/ P/BV P/Sales Div Yld 

Latest 

Company Cap Cap (HK$) Price % Performance (%) 6-mth PAT/MI (HK$m) EPS (HK$) 07-09 PE (x) EBITDA (x) (x) (x) (%) (%) Rpt Data (%) 

Disclosure 

(HK$bn) (US$bn) 25-Mar (HK$) Upside Rcmd 3M 6M 12M Vol (m) 07E 08F 09F 08F 09F (%) 08F 09F 08F 09F 08F 08F 08F 09F Gear ROA ROE Analyst Legend 

Banking 

Bank of Communications * Dec 203 26 8.79 9.30 6 H -17 -4 14 114 21,235 29,678 32,184 0.62 0.67 23.11 14.2 13.1 n.a. n.a. 2.4 n.a. 2.6 2.8 n.a. 1% 18% Jasmine Lai 

Bank of China * Dec 246 32 3.24 4.00 23 B -10 -19 -12 547 58,914 81,852 75,793 0.32 0.37 26.20 10.0 8.8 n.a. n.a. 1.5 n.a. 3.4 3.9 n.a. 1% 14% Jasmine Lai 

Bank of China HK Dec 195 25 18.44 18.32 -1 H -13 -5 -1 32 12,239 13,141 15,671 1.24 1.48 13.16 14.8 12.4 n.a. n.a. 2.1 n.a. 4.5 5.1 n.a. 2% 17% Jasmine Lai 

Bank of East Asia * Dec 64 8 38.45 40.50 5 H -27 -12 -14 9 4,144 3,961 4,273 2.48 2.64 0.14 15.5 14.6 n.a. n.a. 1.8 n.a. 3.2 3.3 n.a. 1% 13% Jasmine Lai 

China Construction Bank Dec 1,254 162 5.58 7.50 34 B -11 -18 32 398 73,466 98,877 106,601 0.42 0.49 22.44 13.2 11.5 n.a. n.a. 2.6 n.a. 3.0 3.5 n.a. 1% 15% Jasmine Lai 

China Life * Dec 204 26 27.45 n.a. n.a. NR -33 -40 20 124 15,430 19,496 24,727 1.42 1.45 -2.61 19.3 18.9 n.a. n.a. 12.7 n.a. 1.7 1.2 n.a. 2% 23% HK Research 

Hang Seng Bank * Dec 269 35 140.90 134.80 -4 S -10 3 31 4 18,242 16,189 17,444 8.47 9.12 -2.21 16.6 15.4 n.a. n.a. 4.7 n.a. 5.0 5.2 n.a. 3% 35% Jasmine Lai 

HSBC Holdings * Dec 1,507 194 127.00 110.00 -13 H -2 -10 -6 31 149,237 127,613 130,507 10.89 10.10 -11.41 11.7 12.6 n.a. n.a. 1.4 n.a. 5.6 5.6 n.a. 1% 16% Jasmine Lai 

HK Exchanges & Clearing * Dec 136 18 127.30 110.00 -14 S -41 -45 71 13 6,169 5,387 5,421 4.98 5.01 -6.45 25.6 25.4 n.a. n.a. 11.4 n.a. 4.0 4.0 n.a. 10% 90% Jasmine Lai 

ICBC * Dec 432 56 5.20 6.15 18 B -1 1 27 485 85,384 121,533 141,918 0.36 0.42 28.92 14.3 12.2 n.a. n.a. 2.5 n.a. 3.8 4.5 n.a. 1% 16% Jasmine Lai 

Ping An Ins * Dec 137 18 53.35 n.a. n.a. NR -36 -51 41 19 18,688 17,225 19,638 2.51 2.73 2.24 21.2 19.6 n.a. n.a. 3.0 n.a. 0.9 1.2 n.a. 2% 24% HK Research 

Sector 4,444 573 463,147 534,949 574,178 13.7 13.3 

Power, Infra & Utilities 

CK Infrastructure * Dec 77 10 33.95 n.a. n.a. NR 13 11 21 2 4,772 5,045 4,448 2.24 1.98 -3.43 15.2 17.2 n.a. n.a. 1.9 -8.6 3.5 3.6 26% 8% 13% HK Research 

CLP Holdings * Dec 154 20 64.15 n.a. n.a. NR 20 19 14 6 10,608 10,310 8,587 4.28 3.59 -9.67 15.0 17.9 12.5 13.9 2.3 2.9 4.0 4.1 76% 8% 18% HK Research 

China Shenhua Energy * Dec 105 14 30.95 44.00 42 B -32 -33 64 37 22,716 30,489 36,577 1.54 1.85 22.51 20.2 16.8 10.3 8.4 3.7 1.0 1.7 2.1 cash 10% 21% Helen Wang 

CNOOC * Dec 478 62 10.70 15.64 46 B -11 -12 73 162 34,384 44,136 54,637 0.99 1.22 24.28 10.8 8.8 6.4 6.0 2.7 3.6 3.1 3.8 cash 23% 34% Gideon Lo 

HK & China Gas * Dec 134 12 22.10 20.20 -9 B -2 25 42 13 9,270 4,644 4,768 0.78 0.78 -28.83 28.3 28.5 13.4 12.5 4.6 9.3 1.7 1.8 22% 31% 37% HK Research 

HK Electric * Dec 105 14 49.35 n.a. n.a. NR 12 22 25 4 7,448 7,538 5,754 3.53 2.70 -12.11 14.0 18.3 10.4 13.1 2.1 9.2 4.1 3.9 3% 11% 16% HK Research 

MTR Dec 150 19 26.80 n.a. n.a. NR -8 12 33 17 15,180 7,246 8,304 1.27 1.46 -26.71 21.1 18.3 16.9 15.6 1.6 8.8 1.7 1.8 36% 6% 11% HK Research 

PetroChina * Dec 207 27 9.82 12.42 26 B -28 -34 9 330 160,188 167,244 181,722 0.92 0.99 5.54 10.7 9.9 5.9 5.3 2.0 0.2 4.2 4.5 4% 17% 24% Gideon Lo 

Sinopec Dec 113 15 6.71 9.37 40 B -43 -31 2 241 67,458 62,150 70,179 0.72 0.81 2.00 9.4 8.3 5.5 3.1 1.5 0.1 2.7 3.0 44% 9% 22% Gideon Lo Note 2 

Sector 1,204 150 332,024 338,801 374,977 12.9 11.9 

Properties 

Cheung Kong * Dec 253 33 109.20 131.20 20 B -10 -19 48 9 27,678 11,503 17,755 4.97 7.67 -19.91 22.0 14.2 26.4 13.4 0.7 12.0 2.2 2.4 12% 10% 13% Jeff Yau 

China Overseas Dec 98 13 12.68 9.64 -24 B -19 -13 16 9 3,013 5,124 7,468 0.74 0.99 31.84 17.1 12.8 12.9 9.3 1.3 5.1 1.8 2.0 4% 8% 18% HK Research 

Hang Lung Properties *^ Jun 108 14 26.05 34.00 31 B -18 -21 22 11 6,371 7,199 8,368 1.74 2.02 12.55 15.0 12.9 12.2 10.4 0.8 7.8 2.3 2.5 9% 8% 11% Jeff Yau 

Henderson Land *^ Jun 116 15 54.00 66.50 23 B -24 -10 22 8 5,883 6,689 5,954 3.27 2.77 -5.47 16.5 19.5 27.5 37.3 0.7 8.1 2.1 2.1 9% 5% 7% Jeff Yau 

New World Dev * Jun 70 9 18.78 22.40 19 B -31 -14 5 8 4,313 7,343 4,974 1.98 1.34 6.86 9.5 14.0 19.8 17.3 0.5 2.7 2.6 2.6 21% 3% 8% Jeff Yau 

SHK Properties * ^ Jun 298 38 116.20 165.20 42 B -25 -8 34 13 11,495 11,937 14,274 4.70 5.57 9.84 24.7 20.9 27.6 18.0 0.8 11.0 2.2 2.4 15% 4% 6% Jeff Yau 

Sino Land * Jun 84 11 17.34 21.70 25 B -36 -11 4 17 3,904 3,178 6,039 0.67 1.24 19.56 26.0 13.9 30.1 13.4 0.7 11.1 2.5 2.7 40% 8% 13% Jeff Yau 

Sector 1,027 132 62,657 52,973 64,833 18.6 17.8 

Hongs/Conglomerates 

Hutchison Dec 307 40 72.10 n.a. n.a. NR -14 -11 -1 12 43,162 10,752 16,504 2.07 3.92 -26.10 34.8 18.4 7.8 4.3 0.6 1.4 2.4 2.4 55% 3% 8% HK Research 

China Merchants Hldgs Dec 84 11 35.00 n.a. n.a. NR -26 -27 12 7 3,124 3,901 4,497 1.61 1.87 13.33 21.7 18.7 32.2 30.2 3.3 11.1 2.2 2.5 34% 8% 14% HK Research 

Swire Pacific * ^ Dec 80 10 86.85 98.30 13 H -15 -8 0 5 10,283 9,335 9,695 6.16 6.39 -2.74 14.1 13.6 18.8 18.2 0.7 3.2 3.8 3.9 10% 6% 8% Jeff Yau 

Wharf Holdings * Dec 104 13 37.75 43.50 15 B -6 1 37 7 5,947 5,287 5,488 1.92 1.99 -9.44 19.7 18.9 13.6 13.1 0.7 5.8 2.1 2.1 33% 7% 7% Jeff Yau 

Sector 704 91 71,376 37,017 44,717 21.0 16.6 

Comm/Ind 

Cathay Pacific Dec 61 8 15.44 n.a. n.a. NR -25 -29 -24 9 7,023 5,888 5,593 1.62 1.42 -10.79 9.5 10.9 n.a. n.a. 1.2 -5.3 4.7 4.5 46% 6% 15% HK Research 

COSCO Pacific Dec 31 4 13.64 n.a. n.a. NR -29 -41 -23 7 2,962 2,740 3,210 1.43 1.43 3.48 9.5 9.5 11.1 10.5 1.6 12.7 4.7 4.7 16% 10% 15% HK Research Note 2 

Esprit Holdings * Jun 115 15 92.55 134.00 45 B -19 -24 5 5 5,180 6,592 8,071 5.35 6.55 24.52 17.3 14.1 12.4 10.1 7.8 3.1 4.4 5.4 Cash 30% 49% Alice Hui 

Foxconn Int'l Dec 80 10 11.32 n.a. n.a. NR -37 -50 -54 12 5,980 7,198 8,648 1.03 1.24 20.78 11.0 9.2 n.a. n.a. 2.5 0.7 cash 19% 37% HK Research 

Li & Fung * Dec 102 13 29.60 39.20 32 B -7 -10 19 11 3,060 3,672 4,990 1.06 1.45 27.10 27.8 20.5 23.5 17.0 9.6 0.9 2.9 3.9 43% 11% 34% Patricia Yeung 

Yue Yuen * Sep 41 5 24.90 27.50 10 B -10 8 -7 4 2,803 3,083 3,593 1.85 2.16 13.12 13.4 11.5 9.0 8.0 1.9 1.1 3.3 3.9 23% 16% 16% Patricia Yeung 

Sector 430 55 27,008 29,173 34,106 15.2 15.3 

Telecom 

China Mobile * Dec 2,254 291 112.50 162.00 44 B -13 -8 68 37 88,094 122,908 152,346 6.11 7.55 30.95 18.4 14.9 8.3 6.7 4.7 4.9 2.7 3.3 cash 16% 24% Steven Liu 

China Netcom * Dec 146 19 21.80 28.00 28 B -2 8 17 17 13,005 13,656 15,406 2.04 2.30 8.48 10.7 9.5 4.5 4.2 1.5 1.6 3.3 3.7 91% 26% 19% Steven Liu 

China Unicom * Dec 235 30 17.24 15.90 -8 H -4 7 59 24 7,851 9,966 12,250 0.73 0.90 21.82 23.6 19.2 5.5 4.6 2.3 2.0 1.2 1.6 4% 4% 8% Steven Liu 

PCCW Dec 33 4 4.92 n.a. n.a. NR 9 -3 5 16 1,503 2,106 2,185 0.31 0.32 19.68 15.7 15.5 7.3 7.5 16.4 -0.7 4.5 4.4 n.a. 3% n.a. HK Research 

Sector 2,668 344 110,453 148,636 182,187 17.96 14.76 

Earnings calculations include exceptionals and provisions Sector P/Es are calendarised % denominated in SGD Note 2: DBSVR, DBSVS, DBS Bank Ltd and/or other affiliates of DBSVUSA, within the past 12 months, have received 

^ underlying profit * 07 A @ denominated in USD compensation and/or within the next 3 months seek to obtain compensation for investment banking services 

P /NAV for Property companies 

FD - fully diluted EPS 

Page 65



H ONG K ONG 2nd LINERS : EARNINGS GUIDE 

Page 66 


Latest 

Company Cap Cap (HK$) Price % Performance (%) 6-mth PAT/MI (HK$m) EPS (HK$) 07-09 PE (x) EBITDA (x) (x) (x) (%) (%) Report Data (%) 

Disclosure 

(HK$bn) (US$m) 25-Mar (HK$) Upside Rcmd 3M 6M 12M Vol (m) 07E 08F 09F 08F 09F (%) 08F 09F 08F 09F 08F 08F 08F 09F Gear ROA ROE Analyst Legend 

Automobile 

Brilliance China Dec 5 601 1.27 2.00 57 H (25) (40) (37) 16 194 497 802 0.14 0.22 103 9.4 5.8 3.7 2.5 0.7 0.3 2.1 3.4 10% n.a. n.a. HK Research 

Denway Motors Dec 25 3208 3.31 6.50 96 B (32) (26) 0 24 2128 2574 3002 0.34 0.40 19 9.7 8.3 319.5 384.6 1.9 29.5 4.1 4.8 cash 23% 24.0% Rachel Miu 

Dongfeng Motor Group Dec 11 1399 3.80 6.00 58 B (31) (46) (14) 19 3110 3600 4395 0.42 0.42 8 9.1 9.1 4.8 4.1 1.7 0.5 2.2 2.7 cash 5% 15.7% Rachel Miu 

Tianneng Power Dec 1 168 1.30 2.50 92 B (21) (23) n.a. 2 216 323 450 0.32 0.45 36 4.0 2.9 1.9 0.7 1.0 0.4 7.5 10.4 cash 15% 28.0% P Yeung/J Yuen 

Weichai Power Dec 3 426 26.10 10.00 (62) NR (49) (53) (27) 1 2044 2275 2663 4.48 5.25 10 5.8 5.0 n.a. n.a. 1.3 0.1 2.6 3.4 38% 11% 26.1% HK Research 

Xingda Dec 2 222 1.24 5.90 376 B (36) (52) (72) 2 411 503 595 0.34 0.40 16 3.7 3.1 2.9 2.3 0.6 0.5 2.7 3.2 29% 5% 15.2% HK Research Note 2 

Xinyi Glass Dec 8 989 4.55 7.05 55 B (26) (46) 46 8 580 800 888 0.50 0.55 24 9.1 8.2 7.9 6.8 2.4 1.9 4.9 5.5 11% 14% 19.4% HK Research 

Sector 54 7011 8684 10572 12795 8.5 7.2 

Banking 

China CITIC Bank * Dec 47 6026 3.77 5.25 39 B (18) (32) n.a. 70 8716 14326 16091 0.41 0.44 35 9.2 8.6 n.a. n.a. 1.4 n.a. 2.9 3.5 n.a. 1% 14.4% Jasmine Lai Note 2 

China Merchants Bank * Dec 66 8509 24.80 24.40 (2) H (16) (22) 69 33 15167 18516 19943 1.47 1.69 25 16.8 14.7 n.a. n.a. 3.9 n.a. 2.3 2.6 n.a. 1% 24.8% Jasmine Lai 

CITIC Int'l Financial * Dec 20 2545 3.43 5.00 46 B (19) (38) (41) 12 1852 2471 3532 0.44 0.62 38 7.8 5.5 n.a. n.a. 0.7 n.a. 2.6 6.2 n.a. 2% 7.9% Jasmine Lai 

Dah Sing Financial * Dec 12 1584 49.15 52.00 6 H (33) (14) (24) 0 1050 1248 1186 4.99 4.74 6 9.9 10.4 n.a. n.a. 1.2 n.a. 4.6 4.3 n.a. 1% 10.2% Jasmine Lai 

Public Financial * Dec 7 890 6.31 7.50 19 B 35 27 12 2 675 720 810 0.66 0.74 10 9.6 8.5 n.a. n.a. 1.1 n.a. 4.9 5.5 n.a. 3% 12.9% Jasmine Lai 

ICBC Asia * Dec 22 2892 18.30 21.60 18 B (10) (15) 11 2 1609 2048 2331 1.63 1.76 12 11.3 10.4 n.a. n.a. 1.4 n.a. 5.2 5.6 n.a. 1% 12.3% Jasmine Lai 

Wing Hang * Dec 33 4197 110.40 97.70 (12) S (1) 22 20 0 2033 1923 1990 6.48 6.70 (1) 17.0 16.5 n.a. n.a. 2.8 n.a. 2.9 3.0 n.a. 2% 20.6% Jasmine Lai 

Wing Lung Bank Dec 26 3406 113.80 79.60 (30) FV 28 45 41 0 1372 1338 1393 5.76 6.00 1 19.8 19.0 n.a. n.a. 2.0 n.a. 2.0 2.1 n.a. 2% 14.9% Jasmine Lai 

Sector 233 30050 32475 42590 47277 13.2 11.9 

Bio-Chem 

Global Bio-chem Dec 6 828 2.77 4.20 52 B 26 (1) 48 5 838 749 931 0.32 0.40 26 8.6 6.9 5.5 4.9 0.9 0.7 1.4 1.5 44% 7% n.a. Peter So 

Sector 6 828 838 749 931 8.6 6.9 

Capital Goods 

Singamas Dec 1 180 1.99 6.00 202 B (35) (56) (52) 4 269 322 420 0.53 0.69 25 3.8 2.9 4.6 3.7 0.6 0.1 6.6 8.6 112% 2% 8.2% Gideon Lo 

Sector 1 180 269 322 420 3.8 2.9 

Commercial Services 

Pico Far East * Oct 1 119 0.77 2.15 179 B (66) (73) (58) 3 146 171 198 0.14 0.17 17 5.4 4.7 2.2 1.6 1.1 0.4 10.2 11.8 cash 9% 19.9% Mavis Hui 

Sector 1 119 146 171 198 5.4 4.7 

Commodities 

Aluminium Corp of China * Dec 47 6049 11.90 11.20 (6) H (24) (44) 58 57 10838 10001 11282 0.74 0.83 (2) 16.1 14.3 7.4 6.7 2.6 1.4 1.9 2.1 2% 11% 20.4% Helen Wang Note 2 

Angang Steel Dec 19 2385 17.04 21.11 24 H (15) (34) 53 20 9523 10796 13450 1.49 1.86 10 11.4 9.2 5.2 4.2 1.9 0.6 4.2 5.3 49% 19% 38.1% Helen Wang 

Anhui Conch Cement Dec 21 2686 48.10 80.20 67 B (23) (23) 86 4 2704 3598 4188 2.30 2.67 24 20.9 18.0 12.9 11.3 6.7 2.8 0.8 0.9 113% 15% 29.9% Helen Wang 

Hunan Non-ferrous Dec 5 644 3.06 4.20 37 S (39) (62) (40) 24 584 617 589 0.19 0.18 0 16.0 16.8 6.6 5.4 1.3 0.3 1.2 1.2 51% 4% 9.3% Helen Wang 

Jiangxi Copper Dec 20 2611 14.60 14.80 1 H (24) (43) 51 34 4631 4508 4666 1.56 1.61 0 9.4 9.1 6.5 6.1 2.1 0.8 2.7 2.8 4% 29% 44.5% Helen Wang 

Lingbao Dec 1 135 3.53 5.47 55 FV (23) (50) (43) 4 124 201 247 0.26 0.32 41 13.6 11.0 7.8 6.3 1.6 8.8 2.1 2.5 33% 8% 21.0% Helen Wang 

Maanshan Iron & Steel Dec 7 858 3.84 5.80 51 H (23) (53) (20) 35 2390 2898 4526 0.45 0.70 37 8.6 5.5 5.0 3.7 1.0 0.4 4.1 6.4 62% 6% 12.3% Helen Wang 

Yanzhou Coal Dec 19 2471 9.79 17.10 75 H (28) (31) 52 27 3180 4137 4554 0.84 0.93 20 11.6 10.6 6.6 5.8 1.9 2.8 3.0 3.3 cash 12% 13.0% Helen Wang 

Zijin Mining * Dec 28 3562 6.90 11.13 61 H (36) (38) 73 54 2700 3866 4248 0.29 0.32 25 23.5 21.3 11.1 10.0 18.0 4.5 2.1 2.3 42% 20% 56.6% Helen Wang 

Sector 166 21402 36675 40619 47750 14.5 12.6 

Conglomerates-HK 

Shun Tak Dec 23 2911 9.70 14.38 48 B (16) (20) (4) 7 1089 714 2350 0.33 0.92 36 29.7 10.6 19.1 n.a. 0.6 4.2 1.6 3.6 cash 5% 8.4% 

Wheelock * Mar 41 5343 20.40 23.10 13 H (5) 1 24 1 2995 3085 3319 1.52 1.63 5 13.4 12.5 32.8 29.6 0.7 9.0 0.6 0.6 cash 4% 6.7% Jeff Yau 

Sector 23 2911 4084 3799 5669 16.9 11.3 

Consumer 

Aeon Stores Dec 4 469 14.00 16.57 18 H (19) (32) 63 0 143 167 190 0.98 0.98 7 14.3 14.3 5.5 4.3 4.6 0.5 1.9 2.2 cash 6% 17.3% Mavis Hui 

Beijing Jingkelong ^* Dec 1 97 4.14 11.86 186 B (37) (46) (44) 1 126 168 211 0.41 0.51 26 10.2 8.1 4.5 3.4 1.0 0.1 5.7 7.2 37% 4% 10.0% Mavis Hui Note 2 

Cafe de Coral * Mar 8 1055 14.82 16.50 11 H (21) 4 7 0 370 442 505 0.81 0.91 16 18.4 16.2 10.8 10.6 3.6 1.9 3.5 4.0 cash 20% 18.0% Alice Hui 

China Mengniu Dec 27 3452 18.78 33.00 76 B (24) (36) (7) 10 952 1240 1597 0.91 1.17 30 20.7 16.1 11.4 9.1 4.3 0.9 1.2 1.6 cash 11% 27.3% Alice Hui 

Giordano Dec 4 515 2.68 3.60 34 H (16) (19) (12) 7 302 346 400 0.23 0.27 15 11.5 10.0 6.1 5.5 2.2 5.8 9.9 9.9 cash 7% 9.5% Alice Hui 

Kingway Brewery Dec 3 365 1.66 1.75 5 FV (22) (33) (47) 2 9 56 102 0.03 0.06 230 51.0 27.7 10.2 6.8 1.0 1.3 0.7 1.4 18% 3% 5.8% Alice Hui 

Global Sweeteners Dec 1 154 1.14 2.40 111 B (14) (40) n.a. 4 192 247 341 0.24 0.33 14 4.8 3.5 1.5 0.6 0.9 0.6 3.1 4.3 49% 13% 57.4% Peter So Note 2 

Gome Elec Appliances FD Dec 55 7055 17.16 24.34 42 B (11) 16 105 11 1203 2092 2626 0.58 0.73 27 29.4 23.4 19.1 14.7 6.3 1.0 1.1 1.4 9% 5% 23.0% Mavis Hui 

Hengan * Dec 28 3609 24.50 25.60 4 FV (19) (5) 24 3 1006 1317 1616 1.14 1.38 22 21.6 17.7 14.1 11.5 4.6 3.6 3.1 3.8 27% 17% 24.9% Patricia Yeung 

IDS Group * Dec 7 885 21.85 35.07 61 B (9) (27) 16 0 220 274 343 0.88 1.10 25 24.9 19.9 16.2 13.6 5.8 0.6 2.4 3.0 14% 5% 23.6% Mavis Hui 

Li Ning * Dec 22 2864 21.45 28.00 31 B (30) (25) 33 4 523 750 965 0.73 0.93 36 29.5 23.0 19.2 14.8 8.9 0.3 1.4 1.7 cash 19% 30.1% Alice Hui 

Lianhua Supermarket Dec 2 271 10.16 11.80 16 H 3 (15) 2 1 291 357 435 0.57 0.70 23 17.7 14.5 5.9 4.4 2.6 0.3 1.9 2.3 cash 4% 12.0% Mavis Hui 

Lifestyle Dec 30 3822 17.40 21.90 26 H (20) (24) 42 3 1024 1241 1521 0.73 0.89 22 23.9 19.5 15.7 12.4 5.4 0.9 1.7 2.0 cash 12% 20.6% Mavis Hui 

Ming Fai * Dec 1 124 1.60 3.40 113 B (25) n.a. n.a. n.a. 126 152 189 0.25 0.32 9 6.3 5.1 2.4 1.9 1.2 0.9 6.3 7.9 cash 19% 28.9% Patricia Yeung Note 2 

Neo-Neon Dec 4 481 4.90 14.50 196 B (29) (46) (61) 3 325 437 564 0.58 0.74 32 8.5 6.6 5.2 3.9 1.4 1.7 2.9 3.8 cash 14% 18.4% P Yeung/J Yuen 

Oriental Watch * Mar 1 132 3.20 7.25 127 B (9) 19 95 1 95 132 161 0.44 0.50 21 7.3 6.3 5.3 4.4 0.9 0.2 3.2 3.9 13% 8% 11.8% Mavis Hui Note 2 

Parkson Dec 34 4342 60.60 108.19 79 B (26) (5) 37 2 751 1105 1460 1.99 2.64 39 30.4 23.0 19.8 14.7 10.2 7.4 1.6 2.2 cash 9% 23.0% Mavis Hui 

Sa Sa * Mar 4 517 2.91 3.78 30 B (11) 3 24 3 222 246 288 0.18 0.21 13 16.2 13.8 9.9 8.3 4.4 0.8 6.5 7.2 cash 16% 20.3% Mavis Hui 

Texwinca * Mar 8 984 5.75 6.65 16 H (20) (15) 5 2 625 757 873 0.57 0.66 18 10.1 8.7 6.5 5.5 2.1 0.8 5.7 6.6 26% 29% 20.4% Alice Hui 

Times Ltd ^ Dec 2 243 2.16 6.18 186 B (25) (41) n.a. 1 106 160 217 0.18 0.25 43 11.8 8.7 3.5 2.4 1.5 0.4 2.5 3.4 cash 5% 14.1% Mavis Hui Note 2 

Tingyi Holding Dec 50 6483 9.00 10.80 20 H (20) (16) 35 4 1571 1886 2259 0.34 0.40 20 26.7 22.3 12.1 10.4 6.2 1.7 3.4 4.1 11% 11% 16.7% Alice Hui 

Tsingtao Brewery Dec 13 1697 20.10 19.75 (2) FV (17) (25) 61 2 652 754 1266 0.60 0.96 36 33.5 20.9 17.3 15.6 4.6 1.5 1.8 2.9 cash 5% 8.8% Alice Hui 

Walker Group* Mar 1 106 1.32 5.65 328 B (62) (64) n.a. 1 83 134 178 0.23 0.29 24 5.8 4.6 1.6 1.0 1.0 0.9 3.3 4.3 37% 22% 60.7% Alice Hui Note 2 

Win Hanverky * Dec 2 204 1.25 2.20 76 B (40) (55) (73) 2 290 321 383 0.25 0.30 14 4.9 4.1 1.8 1.5 0.8 0.4 6.1 7.3 cash 13% 18.3% Alice Hui Note 2 

Wumart * Dec 3 442 6.77 8.92 32 B 8 (10) 2 3 322 418 484 0.34 0.40 23 19.7 17.1 11.1 9.1 3.3 0.8 1.8 2.1 cash 6% 15.4% Mavis Hui 

Vedan Dec 1 132 0.67 1.06 58 H (20) (29) (35) 1 119 134 153 0.09 0.10 13 7.6 6.6 3.0 2.7 0.5 0.4 6.6 7.6 23% 3% 4.5% Alice Hui Note 3 

Vitasoy * Mar 3 438 3.36 3.65 9 H 2 (0) 7 0 174 206 240 0.20 0.24 17 16.4 14.1 7.8 6.9 2.7 1.1 5.8 5.8 cash 7% 13.9% Alice Hui 

Sector 322 41463 12325 15900 19971 21.7 19.0





Latest 


Disclosure 


E-Commerce 

Tradelink * Dec 1 95 0.95 1.50 58 B (7) (10) (33) 1 76 91 103 0.12 0.13 17 8.1 7.2 3.0 5.6 2.3 3.1 10.2 11.7 cash 13% 22.9% Steven Liu 

Sector 1 95 76 91 103 8.1 7.2 

Hotel 

HK & Shanghai Hotels * Dec 18 2256 12.14 14.84 22 B (7) (8) 2 1 901 946 1004 0.66 0.70 5 18.5 17.4 11.4 10.9 0.6 3.2 1.6 1.8 9% 4% 5.1% Jeff Yau 

Sector 18 2256 901 946 1004 18.5 17.4 

Industrial 

AMVIG Dec 6 832 6.60 15.00 127 B (29) (37) 22 1 357 612 715 0.62 0.73 30 10.6 9.1 7.5 6.2 1.6 1.8 3.8 4.4 cash 13% 17.7% Patricia Yeung 

Chen Hsong * Mar 2 286 3.55 7.80 120 B (20) (35) (25) 1 312 359 414 0.57 0.66 15 6.2 5.4 3.9 3.2 1.0 0.9 7.3 8.4 cash 11% 15.5% Patricia Yeung 

Cosco International Dec 6 743 3.90 8.62 121 B (38) (40) 16 5 661 655 759 0.46 0.53 7 8.5 7.4 6.3 5.3 1.7 2.1 2.4 2.7 cash 19% 32.5% Gideon Lo 

Huabao * Mar 18 2282 5.77 9.00 56 B (17) (10) 40 4 567 763 1015 0.25 0.33 29 23.1 17.4 19.9 14.2 10.8 13.0 1.3 1.7 cash 49% 63.4% Patricia Yeung 

L.K. Technology Mar 1 136 1.04 1.15 11 H (1) 20 (11) 1 95 127 155 0.13 0.16 18 8.2 6.7 5.7 4.8 27.3 0.9 3.7 4.5 61% 11% 25.8% Patricia Yeung 

Lee and Man Paper * FD Mar 14 1794 12.24 14.20 16 B (62) (61) (27) 4 1010 1482 1898 1.31 1.67 29 9.4 7.3 9.9 8.1 1.8 1.6 3.2 4.1 24% 16% 19.9% Patricia Yeung 

Nine Dragons * Jun 30 3830 6.86 8.30 21 B (65) (72) (58) 12 2201 2585 3539 0.60 0.82 25 11.4 8.3 11.6 8.3 2.0 1.9 1.8 2.4 42% 11% 21.0% Patricia Yeung 

Peace Mark * Mar 6 825 6.14 13.87 126 H (44) (40) (15) 3 283 379 503 0.41 0.54 38 15.0 11.4 10.8 8.0 3.0 1.7 2.8 3.7 7% 8% 16.1% Mavis Hui 

Shenzhou Intl Dec 3 334 2.08 4.45 114 H (40) (43) (35) 0 484 554 670 0.44 0.54 18 4.7 3.9 4.0 3.2 1.0 0.7 10.0 12.1 2% 15% 20.7% Patricia Yeung 

Symphony FD Dec 1 142 0.63 1.14 81 H (27) (31) (46) 2 154 162 191 0.10 0.11 11 6.5 5.5 2.0 1.3 0.6 0.5 6.2 7.3 cash 11% 14.4% Patricia Yeung 

Top Form Jun 1 80 0.58 0.90 55 S (35) (47) (54) 2 117 131 135 0.12 0.13 7 4.8 4.6 1.2 0.7 0.9 0.4 10.5 10.8 cash 17% 26.4% Patricia Yeung 

Victory City * Mar 1 177 2.06 3.50 70 B (12) (12) (34) 1 306 336 388 0.51 0.59 12 4.1 3.5 5.0 4.3 0.6 0.3 7.4 8.5 86% 7% 17.6% Patricia Yeung 

Sector 82 10630 6190 7533 9666 9.9 9.8 

Infrastructure, Environmental 

China Everbright Intl * Dec 8 1063 2.63 4.27 62 B (27) (12) 33 14 338 555 513 0.18 0.16 5 14.9 16.1 12.6 12.7 2.8 4.3 1.0 1.0 40% 9% 15.2% Patricia Yeung 

Sector 8 1063 338 555 513 14.9 16.1 

Internet 

Tencent Dec 77 9864 42.65 31.60 (26) H (22) (12) 75 4 1724 2280 3219 1.26 1.81 37 33.9 23.6 26.2 n.a. 11.4 15.9 1.0 n.a. cash 26% 31.8% Steven Liu 

Sector 77 9864 1724 2280 3219 33.9 23.6 

Leisure 

Star Cruises @ Dec 11 1426 0.19 0.57 199 B (41) (51) (30) 1 (127) (70) 27 (0.01) 0.00 n.a. n.a. 48.3 11.3 9.2 1.1 0.5 n.a. n.a. 153% nm nmo / Lee Len Chong 

Sector 11 1426 (127) (70) 27 n.a. 48.3 

Machinery 

China Infra Machinery Dec 8 1053 7.50 17.65 135 B (49) (66) (55) 4 730 903 1166 0.83 1.07 26 9.0 7.0 6.5 5.1 2.2 1.2 3.3 3.3 4% 25% 42.6% HK Research 

Sector 8 1053 730 903 1166 9.0 7.0 

Media 

Next Media FD Mar 7 948 3.05 3.66 20 B 0 31 6 2 358 400 435 0.17 0.17 6 18.4 18.4 10.5 9.4 1.8 7.5 4.6 4.6 cash 8% 13.0% Mavis Hui 

QJY Media * Sep 1 108 4.60 6.50 41 B 11 (1) 119 3 139 196 275 0.32 0.44 30 14.3 10.3 11.4 8.1 2.3 2.1 1.4 1.9 cash 16% 16.2% Mavis Hui 

SCMP Group Dec 4 551 2.74 3.04 11 H 1 5 (2) 4 294 333 371 0.21 0.24 12 12.8 11.5 8.8 8.0 2.3 3.3 6.6 7.4 cash 13% 16.4% Mavis Hui 

TVB * Dec 19 2416 42.80 51.91 21 B (10) (10) (14) 1 1277 749 931 3.17 3.58 11 13.5 12.0 8.3 7.5 3.2 4.1 4.6 5.2 cash 21% 24.0% Mavis Hui 

Sector 12 1607 2069 1677 2012 13.2 13.3 

Oil and Gas 

Sinopec Shanghai Petro Dec 6 802 2.67 5.25 97 H (41) (56) (31) 28 1235 1552 2231 0.22 0.31 34 12.4 8.6 6.3 4.7 0.9 0.3 2.9 4.2 23% 3% 4.4% Gideon Lo 

Sector 6 802 1235 1552 2231 12.4 8.6 

Pharmaceuticals & Healthcare 

China Pharmaceutical Dec 3 432 2.18 2.80 28 FV (19) (51) 66 5 495 304 293 0.20 0.19 (23) 11.0 11.4 4.9 4.6 1.0 0.7 1.8 1.7 36% 9% 17.4% Gideon Lo 

Guangzhou Pharm Dec 1 153 5.40 7.10 31 B (21) (39) (8) 1 285 393 474 0.48 0.58 29 11.1 9.2 6.7 5.9 1.2 0.3 2.9 3.5 13% 4% 7.8% Gideon Lo 

Hua Han Bio-Pharma * Jun 1 150 1.32 2.15 63 B (35) (44) (45) 0 131 144 189 0.16 0.21 20 8.1 6.2 3.0 2.2 1.0 1.5 1.9 3.2 cash 9% 13.5% Gideon Lo 

Mingyuan Medicare Dec 3 418 1.12 1.65 47 B 5 (9) 50 9 116 163 224 0.06 0.07 34 20.2 14.9 14.2 10.4 4.1 8.7 1.7 2.3 cash 9% 13.9% Gideon Lo 

Sino Biopharmaceutical * Dec 3 428 1.47 2.73 86 B 2 (10) 17 1 224 294 377 0.13 0.17 30 11.3 8.8 5.0 4.0 1.6 2.1 5.3 6.8 cash 9% 10.6% Gideon Lo 

Tong Ren Tong Tech * FD Dec 1 116 10.30 10.10 (2) FV (23) (41) (25) 0 169 188 205 0.99 1.08 10 10.4 9.5 6.2 5.5 1.3 1.3 4.8 5.2 cash 9% 12.4% Gideon Lo 

Sector 13 1698 1420 1486 1763 12.1 10.3 

Properties-China 

China Resources Land Dec 47 6103 11.74 9.86 (16) H (26) (21) 38 17 1007 1742 2859 0.56 0.90 67 21.0 13.0 28.7 n.a. 1.1 8.6 1.2 2.1 29% 9% 17.7% HK Research 

Coastal Greenland Ltd FD* Mar 3 432 1.20 2.39 99 B (26) (45) (5) 4 230 459 n.a. 0.21 n.a. n.a. 5.8 n.a. 7.4 n.a. 0.6 0.7 4.3 n.a. 122% 5% 7.3% HK Research 

Guangzhou Investment Dec 11 1405 1.53 2.92 91 B (32) (34) (15) 43 1154 1656 1656 0.23 n.a. n.a. 6.6 n.a. 4.8 n.a. 0.4 0.9 4.6 n.a. 32% 2% 6.4% HK Research 

HKC Holdings Dec 12 1609 1.54 3.00 95 B (31) (41) 9 28 669 66 409 0.01 0.05 (37) 191.0 30.9 327.5 14.2 0.6 28.8 3.9 3.9 25% 8% 14.8% Jeff Yau 

R&F Properties Dec 18 2382 18.20 31.00 70 B (28) (46) 17 21 3194 4550 2064 1.41 0.85 (7) 12.9 21.3 10.1 n.a. 0.9 2.9 2.3 10.7 Cash 23% 35.1% HK Research 

Road King Dec 6 775 7.99 17.50 119 B (34) (48) (34) 1 1140 1360 444 1.85 0.60 (38) 4.3 13.2 6.1 8.1 0.4 1.0 9.3 n.a. 30% 9% 11.7% HK Research Note 2 

Shimao Property Dec 38 4838 11.38 26.00 128 B (31) (42) (8) 14 3031 4200 5761 1.27 2.00 47 8.9 5.7 8.1 5.3 0.6 1.8 3.4 5.3 18% 11% 19.8% Carol Wu 

SPG Land Dec 3 401 3.00 8.92 197 B (53) (48) (35) 1 453 598 937 0.54 0.84 44 5.6 3.6 7.1 3.9 0.3 1.2 0.7 1.1 9% 8% 27.5% Ken Chen Note 2 

Sector 139 17944 10879 14631 14129 12.0 11.0 

Properties-HK 

Far East Consortium * Mar 4 527 2.54 4.65 83 B (35) (19) (13) 5 539 591 659 0.37 0.41 5 6.9 6.2 8.1 3.5 0.4 2.2 5.5 5.9 77% 7% 10.0% Jeff Yau 

Great Eagle Dec 13 1683 21.60 36.00 67 B (23) (26) (19) 2 1198 819 1345 1.36 1.85 (3) 15.9 11.7 11.7 n.a. 0.4 3.5 3.7 n.a. 35% 1% 1.8% Jeff Yau 

Hongkong Land ^ @ Dec 72 9250 4.03 n.a. n.a. B (17) (8) (9) 6 345 452 670 0.20 0.29 39 20.5 13.8 21.8 n.a. 0.7 8.4 3.7 4.5 26% 2% 3.0% Jeff Yau 

Hysan Development * Dec 23 2975 22.25 24.05 8 B (1) 1 3 4 1158 984 1067 0.95 1.03 (3) 23.5 21.6 22.2 n.a. 0.6 15.3 2.7 2.9 10% 3% 4.0% Jeff Yau 

Kerry Properties * Dec 64 8245 44.90 55.40 23 B (26) (22) 16 3 2589 3346 3396 2.35 2.38 11 19.1 18.8 16.0 15.7 0.7 5.1 2.6 2.6 27% 8% 7.7% Jeff Yau 

Hang Lung Group *^ Jun 47 6009 34.95 44.30 27 B (10) (17) 31 2 4786 3657 4302 2.74 3.23 (5) 12.7 10.8 8.1 4.4 1.1 3.3 1.9 2.1 28% 5% 11.8% Jeff Yau 

Tai Cheung * Mar 3 323 4.06 6.18 52 B (40) (33) (14) 1 272 283 597 0.46 0.97 48 8.9 4.2 14.8 4.2 0.3 7.7 5.2 7.4 7% 6% 6.8% Jeff Yau 

Sector 225 29013 10886 10133 12035 16.4 16.1 

Page 67





Latest 


Disclosure 


Marine Transportation 

China COSCO Holdings Dec 45 5821 17.50 23.84 36 B (12) (21) 207 43 19121 24017 20755 2.35 2.03 (7) 7.4 8.6 3.3 4.4 1.9 0.8 3.4 2.9 39% 3% 7.5% Gideon Lo 

China Shipping Container Dec 11 1407 2.91 3.45 19 FV (36) (52) 48 87 2950 2528 2167 0.27 0.23 (14) 10.8 12.5 6.5 6.8 1.3 0.5 2.3 2.0 46% 3% 5.2% Gideon Lo Note 3 

China Shipping Dev * Dec 28 3642 21.80 23.50 8 H 15 (6) 99 13 5001 6665 6570 1.94 1.92 14 11.2 11.4 7.4 6.8 3.4 3.7 3.3 3.3 32% 10% 31.6% Gideon Lo 

Orient Overseas Dec 28 3597 44.60 55.11 24 B (22) (39) (35) 1 19688 3926 4071 6.27 6.50 (55) 7.1 6.9 5.1 n.a. 0.8 0.6 3.5 3.6 45% 11% 23.1% Gideon Lo 

Pacific Basin Shipping * Dec 17 2234 10.94 15.20 39 B (2) (25) 83 21 3650 3428 2859 2.17 1.81 (12) 5.1 6.1 4.5 n.a. 2.1 2.6 9.9 8.3 1% 36% 69.8% Gideon Lo 

Sector 130 16701 50409 40565 36422 7.6 8.3 

Software 

Kingdee Dec 3 354 6.00 8.40 40 B (2) (3) 5 1 131 180 250 0.39 0.55 37 15.2 11.0 8.0 5.3 3.3 3.1 2.1 2.9 cash 15% 23.1% Steven Liu 

Sector 3 354 131 180 250 15.2 11.0 

Technology 

SIM Technology * Dec 1 156 0.80 1.80 125 B (54) (59) (68) 2 241 270 302 0.18 0.20 (15) 4.5 4.0 1.2 0.8 0.9 0.4 7.7 8.6 cash 13% 20.4% Dennis Lam 

Sector 25 3230 241 270 302 4.5 4.0 

Telecom 

China Comservice Dec 9 1122 5.33 8.00 50 B (26) (9) 3 18 995 1273 1441 0.23 0.26 20 22.8 20.1 11.1 10.1 2.5 1.0 1.8 2.0 cash 5% 8.6% Steven Liu 

Chinasoft Intl Dec 1 147 1.16 3.05 163 B (21) (27) (39) 0 84 135 184 0.13 0.17 40 8.8 6.9 5.2 3.8 2.3 1.3 2.3 3.1 cash 8% 17.3% Steven Liu 

China Telecom Dec 69 8872 4.96 7.10 43 B (19) (15) 29 320 30228 37766 41723 0.47 0.52 17 10.6 9.6 4.4 3.9 1.5 1.9 2.4 2.7 53% 7% 14.1% Steven Liu Note 2 

China Wireless Dec 1 156 0.60 2.44 307 B (51) (65) 60 10 169 283 383 0.11 0.12 30 5.6 4.8 5.6 4.7 2.0 0.5 5.0 5.8 32% 7% 14.4% Steven Liu 

CITIC 1616 Dec 4 535 2.10 3.90 86 B (8) (21) n.a. 4 263 356 445 0.18 0.23 25 11.7 9.3 6.4 4.4 2.9 1.8 2.7 3.4 cash 21% 38.7% Steven Liu 

Comba Dec 1 189 1.72 4.60 167 B (32) (40) (39) 2 180 307 397 0.35 0.46 48 4.9 3.7 3.0 2.3 0.8 0.5 6.2 8.0 cash 6% 10.1% Steven Liu 

ZTE * Dec 6 727 35.30 53.00 50 B (10) (8) 3 2 1382 2119 3005 2.22 3.15 47 16.0 11.3 8.2 6.2 2.3 0.7 1.2 1.7 12% 4% 11.1% Steven Liu 

Sector 91 11751 33300 42239 47578 11.0 9.6 

Real Estate Investment Trust ** 

Champion REIT * Dec 11 1360 3.75 5.19 38 B (14) (14) (16) 3 670 865 908 n.a. n.a. n.a. nmf nmf nmf nmf 0.5 9.0 9.1 8.5 26% n.a. n.a. Jeff Yau 

Fortune REIT Dec 4 530 5.08 6.83 34 B (3) (14) (14) 1 285 294 295 n.a. n.a. n.a. nmf nmf nmf nmf 0.5 6.2 7.1 7.1 25% 3% 4.2% Jeff Yau Note 3 

GZI REIT Dec 3 387 3.00 3.90 30 B (3) (3) (3) 2 212 220 232 n.a. n.a. n.a. nmf nmf 13.7 n.a. 0.9 7.8 7.3 7.7 39% n.a. 6.7% HK Research Note 3 

Prosperity REIT * Dec 2 263 1.61 1.80 12 B 7 (1) (7) 3 166 171 158 n.a. n.a. n.a. nmf nmf 23.3 n.a. 0.7 8.0 8.2 8.2 34% 2% 5% Jeff Yau 

Sector 9 1182 663 684 683 

Earnings calculations include exceptionals and provisions Sector P/Es are calendarised 

% denominated in SGD Note 2 DBSVR, DBSVS, DBS Bank Ltd and/or other affiliates of DBSVUSA, within the past 12 months, have received 

^ underlying profit * 07 A @ denominated in USD 


P /NAV for Property companies FD - fully diluted EPS Note 3 DBSVR, DBSVS, DBS Bank Ltd and/or other affiliates of DBSVUSA beneficially own a total 


Page 68



MALAYSIA: EARNINGS GUIDE 

FYE Mkt Mkt Price Target Share Price Avg CAGR EV/EBITDA Price/ Price/ Dividend Yield Net Debt 

Company Cap Cap (RM) Price % Performance (%) 6-mth Net Profit (Before EI) EPS (Sen) 07-09 PE (x) 

(x) BV x Sales x (%) /Equity ROA ROE Disclosure 

(RMm) (US$m) 25-Mar (RM) Upside Rcmd 3M 6M 12M Vol (m) 07 08F 09F 08F 09F (%) 08F 09F 08F 09F 08F 08F 08F 09F 07 07 07 Analyst Legend 

Banks 

AMMB Hings Mar 9,572 2,996 3.58 5.75 61% B -3 -12 -2 6.4 (204) 616 889 25.1 36.2 n.m 14.3x 9.9x n.a. n.a. 1.4x n.a. 4.0% 5.1% cash (0.1%) (4%) Lim Sue Lin 

Bumiputra-Commerce Dec 33,203 10,392 9.85 12.90 31% B -8 -10 -2 7.1 2,793 2,935 3,190 82.1 89.2 19 12.0x 11.0x n.a. n.a. 2.0x n.a. 3.5% 3.5% cash 1.7% 20% Lim Sue Lin 

Hong Leong Bank Jun 9,244 2,893 5.85 8.10 38% B -6 -2 -5 0.9 619 796 909 50.4 57.5 21 11.6x 10.2x n.a. n.a. 1.8x n.a. 3.0% 3.1% cash 0.9% 14% Lim Sue Lin 

Maybank Jun 43,681 13,672 8.95 8.10 -9% FV -5 -1 -11 5.6 3,178 3,301 3,410 67.8 69.9 3 13.2x 12.8x n.a. n.a. 2.1x n.a. 5.2% 5.0% cash 1.4% 18% Lim Sue Lin 

Public Bank-Foreign Dec 36,732 11,497 10.40 13.20 27% B -6 -1 11 1.6 2,124 2,481 2,875 81.7 94.6 16 12.7x 11.0x n.a. n.a. 3.3x n.a. 7.1% 8.6% cash 1.4% 23% Lim Sue Lin 

RHB Capital Dec 10,251 3,208 4.76 7.40 55% B -16 -21 0 0.7 775 941 1,026 43.7 47.7 11 10.9x 10.0x n.a. n.a. 1.3x n.a. 2.0% 2.3% cash 1.0% 13% Lim Sue Lin 

EON Capital Dec 3,078 963 4.44 6.80 53% H -31 -35 -34 0.6 263 309 345 44.5 49.8 15 10.0x 8.9x n.a. n.a. 0.9x n.a. 2.7% 2.7% cash 0.6% 7% Lim Sue Lin 

Sector 145,761 45,621 9,549 11,379 12,644 12.8x 11.5x 

Consumer 

Eng Kah Dec 185 58 3.00 2.95 -2% H -3 -11 -20 0.1 14 17 20 27.2 32.5 18 11.0x 9.2x 5.7x 4.5x 1.6x 2.3x 6.3% 6.3% cash 13% 15% Azida Nor-Azizi 

Parkson Hings Bhd Jun 5,481 1,716 5.55 11.80 113% B -43 -30 4 2.1 159 211 290 21.8 30.0 35 25.4x 18.5x 10.0x 7.5x 5.8x 2.1x 1.2% 1.2% 0.67 4% 18% Team Coverage 

Pelikan International Dec 987 309 3.38 5.70 69% B -19 -27 -26 0.3 111 128 143 45.1 50.5 14 7.5x 6.7x 5.9x 5.2x 1.5x 0.8x 3.9% 4.4% 0.44 9% 24% Chong Lee Len 

Sector 6,654 2,083 284 356 454 18.7x 14.7x 

Manufacturing/ Industrial 

Engtex Group Dec 106 33 0.54 1.00 87% B -21 -28 -15 0.5 18 21 22 9.4 9.1 -1 5.7x 5.9x 6.1x 5.9x 0.6x 0.2x 3.4% 3.3% 1.02 4% 11% Azida Nor-Azizi 

Evergreen Fibreboard Dec 624 195 1.30 2.50 92% B -24 -26 -1 0.7 112 124 146 25.9 30.4 14 5.0x 4.3x 4.1x 3.1x 1.2x 0.8x 5.8% 6.9% 0.04 15% 29% Juliana Ramli 

Hexagon Hings Mar 235 74 1.77 1.90 7% H -22 7 3 0.2 15 17 23 14.6 19.5 31 12.1x 9.1x 5.1x 4.2x 2.6x 2.0x 0.0% 0.0% 0.95 6% 24% Chong Lee Len 

Southern Steel Bhd Dec 866 271 2.14 3.00 40% B 20 28 35 0.2 181 146 156 33.5 35.9 -11 6.4x 6.0x 5.0x 4.5x 1.1x 0.3x 3.5% 3.5% 1.03 10% 27% Azida Nor-Azizi 

Kinsteel Bhd Dec 1,048 328 1.16 1.70 47% B -11 -15 41 1.9 129 147 183 14.0 17.4 19 8.3x 6.7x 5.8x 4.9x 1.2x 0.6x 1.3% 1.3% 0.56 4% 17% Azida Nor-Azizi 

Sector 2,880 901 456 455 529 6.3x 5.4x 

Media 

Astro Jan 6,653 2,082 3.44 3.00 -13% FV -1 6 -28 2.4 318 63 89 (0.7) 4.6 -47 nm 75.1x 9.7x 7.8x 4.1x 2.6x 1.7% 1.7% cash 5% 9% Ong Boon Leong 

Sector 6,653 2,082 318 63 89 105.4x 75.1x 

Motor 

UMW Hings Dec 6,625 2,073 6.15 6.45 5% H -17 -9 11 1.0 423 501 552 49.1 54.1 14 12.5x 11.4x 6.4x 6.5x 2.1x 0.7x 4.1% 4.4% cash 8% 16% Chong Lee Len 

Proton Mar 2,109 660 3.84 3.60 -6% FV 4 -29 -20 1.4 (591) 9 88 1.7 16.0 nm 232.4x 24.1x 1.9x 1.8x 0.4x 0.4x 0.0% 0.0% cash (7%) (11%) Chong Lee Len 

APM Automotive Dec 423 133 2.10 2.40 14% B -9 3 -13 0.1 50 58 67 28.9 33.0 15 7.3x 6.4x 2.5x 2.1x 0.7x 0.5x 4.5% 4.5% cash 7% 9% Chong Lee Len 

Tan Chong Motor Dec 1,082 339 1.61 1.95 21% H -25 22 34 1.1 106 130 155 19.3 23.0 21 8.4x 7.0x 6.1x 5.2x 0.8x 0.4x 4.5% 4.5% 0.13 5% 9% Chong Lee Len 

MBM Resources Dec 654 205 2.70 4.20 56% B -14 -19 -10 0.0 119 115 103 47.7 42.5 -7 5.7x 6.4x 4.4x 4.8x 0.8x 0.6x 4.8% 4.8% 0.04 12% 17% Chong Lee Len 

Sector^ 8,784 2,749 107 813 964 10.8x 9.1x 

Oil & Gas 

Petra Perdana Dec 1,101 345 3.70 4.60 24% B -27 -26 18 0.5 86 97 103 32.7 34.4 9 11.3x 10.7x 8.8x 7.9x 1.8x 1.3x 0.1% 0.1% 1.02 9% 32% June Ng 

Wah Seong Dec 1,454 455 2.20 3.00 36% B -30 -28 10 1.1 86 104 107 16.3 16.7 -9 13.5x 13.2x 9.7x 10.0x 4.2x 0.6x 0.8% 0.8% 0.59 6% 20% June Ng 

KNM Group Dec 5,451 1,706 5.20 7.60 46% B -30 10 82 4.8 188 391 662 37.8 50.8 67 13.8x 10.2x 11.0x 7.8x 5.9x 2.3x 0.6% 0.6% 0.29 17% 40% June Ng 

Tanjung Offshore Dec 392 123 1.92 2.15 12% H -33 -36 -48 0.1 23 34 44 15.5 20.0 38 12.4x 9.6x 9.7x 7.5x 2.4x 1.3x 1.7% 1.9% 0.92 6% 19% June Ng 

Alam Maritim Dec 898 281 1.85 3.20 73% B -16 5 37 0.3 51 71 92 14.4 18.9 35 12.8x 9.8x 10.3x 8.3x 3.2x 2.6x 0.6% 0.6% 1.41 8% 26% June Ng 

Sector 9,296 2,909 434 697 1,008 13.3x 9.2x 

Conglomerates 

PPB Group Dec 11,262 3,525 9.50 13.50 42% B -10 7 53 1.1 531 729 782 61.5 66.0 21 15.4x 14.4x 10.1x 9.3x 0.9x 3.5x 3.6% 3.8% cash 72% 87% June Ng 

Sime Darby Jun 55,588 17,398 9.25 12.40 34% B -19 -9 11 13.9 2,632 3,201 3,732 53.3 62.1 19 17.4x 14.9x 10.4x 9.0x 2.7x 1.8x 2.6% 3.2% 0.00 Ben Santoso Note 2 

Sector 66,850 20,923 3,162 3,930 4,515 17.0x 14.8x 

Construction 

Gamuda Jul 6,251 1,956 3.12 4.50 44% B -35 -27 -22 10.6 185 343 476 17.3 24.0 59 18.0x 13.0x 21.6x 12.0x 2.0x 3.8x 14.7% 14.7% cash 4% 7% Wong Ming Tek 

IJM Corp Mar 4,812 1,506 5.60 10.30 84% B -36 -31 -35 2.6 194 349 390 41.4 46.2 16 13.5x 12.1x 9.2x 8.3x 1.0x 1.1x 1.9% 1.9% 0.30 4% 8% Wong Ming Tek 

Malaysian Resource Dec 1,261 395 1.39 2.25 62% B -43 -43 -33 9.3 41 92 111 10.2 12.3 65 13.6x 11.3x 9.1x 8.6x 1.6x 0.9x 1.8% 2.2% 0.39 2% 7% June Ng 

Sunway Hings Jun 723 226 1.32 2.40 82% B -29 -12 99 1.6 (10) 102 136 13.8 18.4 nm 9.6x 7.2x 6.0x 5.5x 1.1x 0.6x 0.0% 0.0% 0.89 (0%) (2%) June Ng 

TRC Synergy Dec 247 77 1.75 2.95 69% B -30 -5 12 0.4 28 41 49 33.5 39.4 31 5.2x 4.4x 3.2x 2.5x 0.9x 0.4x 4.8% 5.6% 0.12 9% 16% Azida Nor-Azizi 

WCT Eng Dec 2,318 726 3.34 5.35 60% B -18 -13 18 1.0 136 217 244 31.2 35.2 34 10.7x 9.5x 5.8x 5.8x 2.6x 0.6x 1.7% 1.7% 0.39 5% 21% Wong Ming Tek 

Sector 15,612 4,886 575 1,144 1,406 13.6x 11.1x 

Concessionaires 

PLUS Expressway Dec 15,500 4,851 3.10 3.95 27% B -4 -3 2 2.7 1,177 1,052 1,114 21.0 22.3 -3 14.7x 13.9x 10.2x 9.9x 2.8x 5.5x 5.1% 5.3% 1.42 9% 25% Wong Ming Tek 

Litrak Mar 1,762 551 3.58 4.30 20% B -5 -5 21 0.3 89 100 111 20.5 22.8 12 17.5x 15.8x 10.0x 8.9x 1.9x 6.1x 2.0% 2.0% 0.91 5% 11% Wong Ming Tek 

Sector 17,262 5,403 1,267 1,152 1,225 15.0x 14.1x 

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MALAYSIA: EARNINGS GUIDE 

FYE Mkt Mkt Price Target Share Price Avg CAGR EV/EBITDA Price/ Price/ Dividend Yield Net Debt 

Company Cap Cap (RM) Price % Performance (%) 6-mth Net Profit (Before EI) EPS (Sen) 07-09 PE (x) 

(x) BV x Sales x (%) /Equity ROA ROE Disclosure 

(RMm) (US$m) 25-Mar (RM) Upside Rcmd 3M 6M 12M Vol (m) 07 08F 09F 08F 09F (%) 08F 09F 08F 09F 08F 08F 08F 09F 07 07 07 Analyst Legend 

Gaming 

Berjaya Sports Toto Apr 6,823 2,135 5.05 5.30 5% H -1 3 9 1.1 400 422 453 33.0 35.4 6 15.3x 14.3x 10.9x 10.1x 5.1x 1.9x 5.9% 6.4% cash 20% 33% Lee Len Chong 

Genting Dec 24,073 7,535 6.50 8.80 35% B -16 -18 -18 5.5 1,502 1,705 1,701 46.1 46.0 6 14.1x 14.1x 7.2x 7.1x 1.7x 2.6x 1.0% 1.1% cash 6% 15% Chong Lee Len 

Magnum Dec 4,838 1,514 3.34 3.45 3% H 2 16 2 1.9 264 292 311 20.2 21.5 9 16.6x 15.6x 10.2x 9.7x 2.4x 1.5x 4.2% 4.8% cash 11% 14% Lee Len Chong 

Multi-purpose Dec 1,642 514 1.72 3.60 109% B -25 0 -27 2.5 204 160 164 16.8 17.2 -10 10.2x 10.0x 13.0x 11.6x 0.9x 0.5x 5.0% 5.9% cash 11% 27% Lee Len Chong 

Resorts World Dec 19,525 6,111 3.34 4.70 41% B -11 -15 8 8.7 1,035 1,246 1,329 21.1 22.5 13 15.8x 14.8x 8.4x 7.4x 2.2x 4.4x 1.8% 2.1% cash 16% 20% Chong Lee Len 

Tanjong Jan 6,412 2,007 15.90 20.10 26% B -13 -15 1 0.3 510 527 593 130.7 147.0 8 12.2x 10.8x 7.5x 6.6x 1.8x 2.4x 3.9% 4.2% 0.84 7% 17% Chong Lee Len 

Sector 63,313 19,816 3,915 4,352 4,551 14.5x 13.9x 

Plantation 

IOI Corporation Jun 41,354 12,943 6.75 8.70 29% B -10 15 62 12.7 1,482 2,035 2,250 32.7 36.3 23 20.7x 18.6x 15.4x 13.7x 5.5x 4.3x 2.4% 2.7% 0.11 12% 22% Ben Santoso 

CB Industrial Dec 553 173 4.02 7.90 97% B -35 -11 -3 0.3 46 73 91 52.8 66.3 40 7.6x 6.1x 7.7x 6.5x 2.4x 1.4x 3.9% 4.9% 0.07 17% 29% Kok Chiew Sia 

IJM Plantation Dec 2,247 703 3.52 4.75 35% B 10 50 107 1.2 44 120 164 21.4 29.2 91 16.4x 12.1x 10.2x 7.6x 2.8x 4.2x 0.4% 0.5% 0.15 5% 8% Juliana Ramli 

KL Kepong Sep 17,827 5,580 16.70 20.60 23% B 0 27 37 1.5 694 962 978 90.1 91.6 19 18.5x 18.2x 11.8x 11.5x 3.2x 2.8x 2.8% 2.8% 0.11 11% 15% Ben Santoso 

Asiatic Development Dec 6,049 1,893 8.00 9.35 17% B -2 29 54 1.3 344 471 428 62.6 56.9 12 12.8x 14.1x 8.3x 8.7x 2.5x 5.4x 1.8% 1.6% cash 16% 18% Juliana Ramli 

TSH Resources Dec 1,115 349 2.70 5.00 85% B -16 -4 10 0.3 83 123 134 29.7 32.6 27 9.1x 8.3x 7.8x 7.2x 1.6x 1.0x 1.9% 1.9% 0.27 8% 16% Juliana Ramli 

TH Plantations Dec 592 185 3.02 4.70 56% B -6 -4 -10 0.2 62 89 75 45.3 38.1 10 6.7x 7.9x 4.7x 5.5x 2.3x 2.5x 7.2% 6.1% cash 23% 34% Ben Santoso 

Sector 69,739 21,827 2,755 3,873 4,120 18.0x 16.9x 

Power 

Tenaga Nasional Aug 31,851 9,969 7.35 9.80 33% B -23 -25 -36 6.7 3,575 3,593 3,481 83.0 80.4 -1 8.9x 9.1x 5.6x 5.3x 1.2x 1.3x 5.3% 5.3% 0.77 6% 19% June Ng 

YTL Power Jun 13,177 4,124 2.45 3.00 22% B -2 6 7 2.7 1,269 1,097 1,111 16.4 16.6 1 14.9x 14.7x 9.4x 9.2x 2.5x 4.0x 4.6% 4.6% 1.31 5% 21% June Ng 

Sector 45,028 14,093 4,845 4,690 4,592 9.6x 9.8x 

Property 

SP Setia Oct 3,680 1,152 3.62 6.10 69% B -25 -37 -31 3.9 260 272 319 26.9 31.6 11 13.4x 11.4x 10.4x 8.2x 1.8x 2.7x 3.1% 3.6% 0.14 9% 15% Tan Siang Hing 

KLCC Property Mar 2,597 813 2.78 4.40 58% B -20 -23 -19 1.1 203 203 230 23.5 24.6 6 11.9x 11.3x 10.6x 10.9x 0.6x 3.1x 3.1% 3.2% 0.26 15% 36% Tan Siang Hing 

Sunway City Jun 1,316 412 2.80 5.50 96% B -44 -41 -22 0.4 131 151 202 35.8 48.0 24 7.8x 5.8x 5.0x 4.0x 0.8x 0.9x 1.3% 1.3% 0.46 4% 14% Tan Siang Hing 

Eastern & Oriental Bhd Mar 754 236 1.80 3.80 111% B -31 -31 -16 0.3 61 63 79 14.9 18.7 5 12.1x 9.6x 9.0x 8.6x 1.3x 1.3x 1.4% 1.4% 0.58 3% 14% Tan Siang Hing 

E & O Property Mar 1,245 390 1.88 4.30 129% B -32 -40 -33 0.5 121 121 131 18.9 20.3 4 10.0x 9.2x 8.1x 7.6x 1.3x 2.2x 0.0% 0.0% 0.47 7% 16% Tan Siang Hing 

Axis REIT Dec 435 136 1.70 2.60 53% B -7 -12 -3 0.2 28 25 20 9.8 7.9 -15 17.4x 21.4x 20.0x 19.5x 1.3x 7.9x 5.5% 4.5% 0.63 14% 22% June Ng 

Sunrise Berhad Jun 959 300 2.14 4.00 87% B -35 -35 -10 0.8 108 114 192 26.5 44.6 33 8.1x 4.8x 6.0x 3.6x 1.2x 1.3x 0.0% 7.3% 0.25 10% 19% Tan Siang Hing 

YTL Land Jun 812 254 1.02 2.70 165% B -30 -37 -14 0.4 16 31 88 8.7 25.2 134 11.7x 4.1x 7.8x 2.8x 0.6x 2.0x 0.0% 0.0% 0.11 2% 3% Tan Siang Hing 

Sector 11,798 3,693 928 979 1,261 12.0x 9.4x 

Telecommunication 

Digi.Com Dec 18,300 5,728 24.40 30.00 23% B 2 16 32 1.3 1,047 1,149 1,246 150.4 160.2 7 16.2x 15.2x 8.1x 7.3x 10.2x 3.8x 4.5% 4.9% cash 27% 64% Ong Boon Leong 

Telekom Dec 38,994 12,205 10.90 11.90 9% B -4 15 8 7.0 2,168 2,471 2,766 71.9 80.5 16 15.2x 13.5x 5.9x 5.6x 1.8x 1.9x 3.2% 3.5% 0.38 6% 12% Ong Boon Leong 

Green Packet Dec 740 232 2.22 3.60 62% B -8 -20 -33 0.3 39 46 56 13.7 16.9 20 16.2x 13.1x 11.3x 9.0x 1.6x 3.9x 1.9% 2.3% cash 6% 7% Ong Boon Leong 

Sector 58,034 18,164 3,255 3,665 4,068 15.8x 14.3x 

Technology 

BCT Technology Dec 40 13 0.30 0.80 167% B -42 -59 -67 0.1 8 12 18 9.2 13.5 50 3.2x 2.2x 1.6x 0.9x 0.6x 0.7x 0.0% 0.0% cash 9% 17% Ong Boon Leong 

Sector 40 13 8 12 18 3.2x 2.2x 

Transport 

Malaysia Airlines Dec 5,982 1,872 3.58 5.80 62% B -26 -27 -44 0.7 363 643 827 51.3 66.0 51 7.0x 5.4x 2.6x 0.5x 0.9x 0.3x 0.0% 0.0% cash 9% 31% Tan Siang Hing 

MISC-F Mar 30,317 9,489 8.15 9.90 22% H -17 -17 -11 0.8 2,415 2,267 2,185 60.9 58.7 -5 13.4x 13.9x 8.3x 8.2x 1.6x 2.6x 3.7% 3.7% 0.24 10% 16% Wong Ming Tek 

Sector 36,299 11,361 2,779 2,910 3,012 12.5x 12.1x 

Logistics 

Century Logistics Dec 109 34 1.68 3.60 114% B -15 -29 87 0.1 18 23 27 44.0 51.3 39 3.8x 3.3x 4.0x 3.3x 1.1x 0.7x 4.0% 4.0% 0.64 11% 21% Juliana Ramli 

Malaysia Airports Dec 3,146 985 2.86 3.55 24% B -5 4 2 0.4 210 221 20.1 n.a 14.2x 3.9x 3.7x 1.0x 2.2x 4.9% 5.1% cash 6% 9% Wong Ming Tek 

Sector 3,255 1,019 228 244 13.3x n.a 

* June year end 

** 18 months to December. Legend 

^ PE for Motor Sector has exclued Proton Note 2 DBSVR, DBSVS, DBS Bank Ltd and/or other affiliates of DBSVUSA, within the past 12 months, have received 

Companies with FYE before April have been classified as preceeding year's results 


RM/USD Exch rate: RM3.19595 

We have to remove Quill Capital Trust due to Blackout: 

Page 70



THAILAND : EARNINGS GUIDE 

FYE Mkt Mkt Price Target Share Price Avg Net Profit 

EPS CAGR PE EV/EBITDA P/ P/ Div. Yield Net Debt ROA ROE 

Company Cap Cap (Bt) Price % Performance (%) 6-mth (Btm) 

(Bt) 07-09 (x) 

(x) BV x Sales x (%) /Equity Disclosure 

(Btm) (US$m) 25-Mar (Bt) Upside Rcmd 3M 6M 12M Vol (m) 07 08F 09F 08F 09F (%) 08F 09F 08F 09F 08F 08F 08F 09F 07 07 07 Analyst Legend 

FINANCIALS 

Banks 

Overweight 

Bank of Ayudhya Dec 134,267 4,265 23.30 28.50 22% B (10) (15) 10 8.8 (3,992) 7,130 8,675 1.2 1.4 (123) 20.0 16.4 na na 1.6 na 1.3 1.7 na (0.6) (6.4) K Sugittra Note 1 

Bangkok Bank Dec 259,603 8,247 136.00 147.00 8% B 16 14 26 4.6 19,218 20,800 21,850 10.9 11.4 7 12.5 11.9 na na 1.4 na 2.4 2.6 na 1.3 12.2 K Sugittra Note 1 

KASIKORNBANK Dec 215,393 6,842 90.00 103.00 14% B 5 10 37 7.2 15,005 16,150 18,340 6.8 7.7 11 13.3 11.7 na na 1.9 na 2.5 3.0 na 1.6 15.9 K Sugittra 

Krung Thai Bank Dec 112,973 3,589 10.10 13.00 29% B 2 (10) (18) 27.2 6,407 12,450 14,960 1.1 1.3 57 9.1 7.6 na na 1.1 na 4.7 5.9 na 0.5 6.8 K Sugittra 

Siam Commercial Bank Dec 317,824 10,096 93.50 92.00 -2% H 9 17 33 11.2 17,356 21,350 24,110 6.3 7.1 18 14.9 13.2 na na 2.5 na 2.7 2.9 na 1.6 16.5 K Sugittra 

Siam City Bank Dec 34,861 1,107 16.50 17.10 4% H 6 (9) (8) 3.4 (2,029) 3,960 4,525 1.9 2.1 (140) 8.8 7.7 na na 0.9 na 3.4 4.2 na (0.5) (5.6) K Sugittra 

Tisco Bank Dec 21,160 672 29.00 33.50 16% B 0 (5) 23 2.1 1,651 1,871 2,202 2.6 3.0 16 11.3 9.6 na na 1.6 na 6.9 7.8 na 1.8 13.4 K Sugittra 

Sector 1,096,081 34,818 53,616 83,712 94,663 13.1 11.6 

Finance 

Neutral 

Kim Eng Securities Dec 13,511 429 24.10 24.50 2% H (5) (2) 50 3.3 551 668 760 1.2 1.4 19 19.7 17.3 na na 3.1 na 4.6 5.2 na 9.0 13.5 K Sugittra 

Thanachart Capital Dec 20,397 648 15.30 17.50 14% B 9 (4) 24 3.2 2,818 2,362 2,939 1.8 2.2 4 8.6 6.9 na na 0.8 na 6.6 8.1 na 0.9 10.1 K Sugittra Note 1 

Phatra Securities Dec 7,633 242 35.75 42.50 19% B 7 (11) 20 0.9 485 566 643 2.6 3.0 15 13.5 11.9 na na 2.4 na 7.0 7.6 na 9.1 14.4 K Sugittra 

Sector 41,541 1,320 3,854 3,595 4,343 11.6 9.6 

INDUSTRIAL 

Petrochemicals & Chemicals 

Neutral 

Indorama Polymers Dec 12,440 395 9.00 14.00 56% B (9) (4) 20 0.5 1,073 1,836 2,507 1.3 1.8 54 6.8 5.0 6.8 5.1 1.8 0.3 4.4 6.1 103.8 6.7 21.9 K Vichitr 

Sector 12,440 395 1,073 1,836 2,507 6.8 5.0 

PROPERTY & CONSTRUCTION 

Construction Materials 

Neutral 

Tata Steel (Thailand) Dec 17,222 547 2.20 2.74 25% B 23 29 90 12.5 708 1,558 2,018 0.2 0.2 17 9.7 9.0 7.1 6.1 1.2 0.5 4.1 4.4 29.7 6.9 11.0 S Arparporn 

Siam Cement Dec 259,200 8,234 216.00 220.00 2% H (6) (14) (8) 1.3 30,352 23,946 21,978 20.0 18.3 (15) 10.8 11.8 7.3 7.2 2.8 0.9 5.6 5.3 91.8 10.8 37.7 K Vichitr Note 1 

Sector 276,422 8,781 31,060 25,504 23,996 10.8 11.5 

Property 

Overweight 

Amata Corporation Dec 18,139 576 17.00 21.26 25% B (3) 11 53 1.8 1,055 1,512 1,545 1.4 1.4 23 12.0 11.7 9.1 8.1 3.3 3.4 5.0 5.1 62.9 10.8 21.3 S Chanpen 

Asian Property Development Dec 17,486 555 7.50 8.70 16% B 20 18 62 10.2 899 1,269 1,536 0.5 0.7 31 13.8 11.4 11.7 9.8 2.7 2.2 2.9 3.5 86.8 16.9 16.3 S Chanpen 

Ch. Karnchang Dec 11,134 354 7.70 8.86 15% H (7) (16) 6 4.5 15 535 678 0.4 0.5 1,724 20.7 16.3 20.4 14.5 1.9 0.7 2.4 - 204.3 0.1 0.3 S Chanpen 

Central Pattana Dec 59,373 1,886 27.25 32.66 20% B 10 (3) 14 2.3 1,783 1,790 1,968 0.8 0.9 5 33.2 30.2 16.5 14.8 4.2 7.0 1.2 1.3 61.9 5.0 14.2 S Chanpen Note 1 

CPN Retail Growth Property Fund Dec 11,133 354 10.20 12.00 18% B 12 1 3 0.7 897 931 991 0.8 0.9 2 12.2 11.8 12.8 12.0 1.0 9.4 8.2 8.5 0.0 7.7 8.6 S Chanpen 

Italian-Thai Development Dec 34,388 1,092 8.20 11.03 35% B 2 11 74 20.8 1,011 1,409 1,814 0.3 0.4 34 24.4 19.0 10.1 8.8 2.0 0.7 0.8 1.1 75.3 2.3 7.6 S Chanpen 

Land & Houses Dec 85,962 2,731 9.90 9.90 0% H 34 38 43 24.6 3,159 4,273 4,550 0.4 0.4 11 23.6 22.1 16.6 10.7 3.4 3.9 3.4 3.6 Cash 8.2 12.6 S Chanpen Note 1 

L.P.N. Development Dec 11,363 361 7.70 8.30 8% B 3 2 29 12.7 928 1,225 1,187 0.8 0.8 14 9.3 9.6 7.3 7.1 2.6 1.5 5.4 5.2 32.8 14.1 26.0 S Chanpen 

Preuksa Real Estate Dec 23,390 743 10.70 12.26 15% B 36 34 88 2.7 1,270 1,914 2,003 0.9 0.9 27 12.2 11.7 9.3 8.8 2.4 2.0 2.5 2.6 7.9 11.5 15.5 S Chanpen 

Quality Houses Dec 21,290 676 2.88 2.81 -2% B 37 63 122 41.5 1,066 1,637 1,745 0.2 0.2 19 14.9 14.0 11.4 10.2 2.1 2.1 3.0 3.2 133.0 4.8 12.1 S Chanpen 

Rojana Industrial Park Dec 13,238 421 15.90 20.39 28% B (6) (7) 30 0.5 950 1,224 1,368 1.4 1.5 11 11.7 10.5 9.6 10.6 2.8 1.8 6.5 7.3 222.7 16.4 5.3 S Chanpen 

Sansiri Dec 5,865 186 3.98 5.25 32% B 14 8 34 4.8 708 1,190 1,116 0.8 0.8 31 4.9 5.3 7.2 8.5 0.6 0.4 9.7 9.1 57.3 3.6 8.8 S Chanpen 

Supali Dec 6,023 191 3.76 5.00 33% B 5 2 11 5.3 854 1,035 1,408 0.6 0.8 24 6.2 4.6 7.0 4.3 1.2 1.1 7.7 10.5 69.3 2.7 19.1 S Chanpen 

Samui Airport Property Fund Dec 8,455 269 8.90 11.28 27% B 5 na na 0.9 733 783 836 0.8 0.9 7 10.8 10.1 10.0 9.5 0.8 9.7 10.0 10.5 Cash 21.2 21.3 S Chanpen Note 2 

Sino-Thai Engineering & Con. Dec 5,907 188 4.98 5.15 3% FV (3) (20) 18 17.5 22 292 323 0.2 0.2 547 23.0 20.8 16.8 12.8 1.4 0.4 2.5 2.7 16.1 0.1 0.6 S Chanpen 

TICON Property Fund Dec 4,142 132 10.90 11.80 8% B 1 0 11 0.3 297 302 317 0.8 0.8 3 13.7 13.1 19.3 18.4 1.0 10.8 7.6 8.0 Cash 7.1 7.3 S Chanpen Note 1 

Sector 337,289 10,714 15,647 21,319 23,385 15.8 14.4 

RESOURCES 

Energy 

Overweight 

Banpu Dec 110,873 3,522 408.00 518.00 27% B 4 24 107 2.5 6,654 8,268 10,656 30.4 39.2 27 13.4 10.4 6.0 4.3 2.7 2.5 2.9 3.7 11.9 11.6 23.7 K Vichitr 

PTT Dec 907,457 28,826 322.00 464.00 44% B (13) (4) 55 6.9 97,804 99,246 99,609 35.2 35.4 1 9.1 9.1 5.8 5.4 2.1 0.5 3.6 3.7 36.7 11.9 30.0 K Vichitr 

PTT Exploration & Production Dec 507,939 16,135 154.00 178.00 16% B (1) 12 75 8.2 28,455 38,305 43,798 11.6 13.3 24 13.3 11.6 6.0 5.3 3.8 4.4 2.8 3.2 0.0 16.4 29.1 K Vichitr Note 1 

PTT Aromatics and Refining Dec 137,809 4,120 38.25 56.00 20% B na na na 46.5 17,890 16,476 16,989 5.6 5.7 (2) 8.4 8.1 6.4 5.5 1.7 0.5 4.3 4.5 34.6 15.0 28.8 K Vichitr 

Thai Oil PCL Dec 139,742 4,439 68.50 96.00 40% B (21) (22) 20 9.1 19,176 20,176 16,984 9.9 8.3 (5) 6.9 8.2 4.4 4.3 1.8 0.4 6.6 6.6 36.8 15.5 31.1 K Vichitr 

Sector 1,803,819 57,043 169,979 182,472 188,036 9.9 9.6 

SERVICES 

Commerce 

Overweight 

Big C Supercenter Dec 39,268 1,247 49.00 52.04 6% H 10 0 1 0.1 2,502 2,777 2,741 3.2 3.8 10 15.5 13.0 5.7 6.6 2.3 0.6 2.0 39.4 Cash 7.7 16.5 K Parin 

CP ALL Dec 48,278 1,534 10.80 13.38 24% B 9 (3) 86 6.3 1,460 2,230 3,322 0.5 0.7 51 21.7 14.5 11.4 6.5 5.0 0.4 3.7 5.5 cash 3.2 15.9 K Parin 

Home Products Center Dec 9,625 306 5.00 6.15 23% B 2 (1) 2 1.0 710 800 966 0.4 0.5 15 12.2 10.2 5.7 5.0 2.0 0.5 4.1 4.9 34.4 5.8 18.9 K Parin 

Sector 97,171 3,087 4,673 5,806 7,030 16.7 13.8 

Page 71



THAILAND : EARNINGS GUIDE 

FYE Mkt Mkt Price Target Share Price Avg Net Profit 

EPS CAGR PE EV/EBITDA P/ P/ Div. Yield Net Debt ROA ROE 

Company Cap Cap (Bt) Price % Performance (%) 6-mth (Btm) 

(Bt) 07-09 (x) 

(x) BV x Sales x (%) /Equity Disclosure 

(Btm) (US$m) 25-Mar (Bt) Upside Rcmd 3M 6M 12M Vol (m) 07 08F 09F 08F 09F (%) 08F 09F 08F 09F 08F 08F 08F 09F 07 07 07 Analyst Legend 

Entertainment 

Overweight 

BEC World Dec 53,500 1,699 26.75 31.00 16% B (4) 16 19 3.8 2,252 2,709 2,971 1.4 1.5 15 19.7 18.0 9.0 8.3 8.1 6.2 5.1 5.6 cash 29.0 35.9 V Chirasit 

Major Cineplex Dec 16,110 512 18.30 23.00 26% B 2 2 14 1.3 1,227 908 935 1.0 1.1 (12) 17.7 17.2 8.4 8.0 2.9 2.8 5.1 5.2 24.9 14.2 25.1 V Chirasit 

MCOT Dec 19,926 633 29.00 37.00 28% B 16 (6) 15 1.5 1,111 1,372 1,522 2.0 2.2 17 14.5 13.1 7.7 6.9 2.7 4.5 5.5 6.1 cash 12.9 16.2 V Chirasit 

Workpoint Entertainment PCL Dec 3,260 104 16.30 24.00 47% B (14) (21) (27) 0.1 250 290 324 1.4 1.6 14 11.3 10.1 5.6 5.0 3.1 2.2 8.9 8.9 cash 28.5 24.7 V Chirasit 

Sector 92,796 2,948 4,839 5,278 5,751 17.6 16.1 

Transport 

Neutral 

Airports of Thailand Sep 81,428 2,587 57.00 80.00 40% B (2) (6) (7) 0.9 1,095 3,642 2,752 2.5 1.9 104 22.4 29.6 8.6 8.0 1.1 3.6 1.4 1.1 56.7 0.7 1.6 T Chaipat 

Bangkok Expressway Dec 16,016 509 20.80 29.00 39% B (10) (16) (10) 1.4 1,407 1,755 2,445 2.3 3.2 32 9.1 6.6 6.4 5.0 0.9 2.1 6.0 7.2 61.4 8.9 3.1 T Chaipat Note 1 

Precious Shipping Dec 24,741 786 23.80 33.00 39% B (14) (36) 1 2.1 4,156 3,600 3,705 3.5 3.6 (5) 6.9 6.7 3.7 4.0 1.6 3.3 8.4 8.4 cash 29.9 31.9 T Chaipat 

Regional Container Lines Dec 16,111 512 24.30 34.25 41% B (15) (25) 1 0.5 3,816 2,554 2,756 3.9 4.2 (13) 6.3 5.8 4.9 4.3 0.9 0.7 5.5 5.9 33.8 14.0 24.2 T Chaipat 

Thai Airways Sep 48,843 1,552 28.75 39.00 36% H (25) (32) (36) 1.6 4,155 4,698 4,907 2.8 2.9 9 10.4 10.0 5.4 5.1 0.7 0.2 3.1 3.1 62.4 1.5 6.2 T Chaipat 

Thoresen Thai Agencies Sep 26,713 849 41.50 79.00 90% B (11) (28) 46 15.9 4,969 6,573 5,916 10.2 9.2 11 4.1 4.5 2.5 2.4 1.3 1.1 6.3 5.5 31.3 19.4 37.7 T Chaipat Note 1 

Sector 213,852 6,793 19,597 22,823 22,481 9.4 9.5 

TECHNOLOGY 

Communications 

Neutral 

Advance Info Service Dec 293,071 9,310 99.00 120.00 21% B 3 9 37 4.0 16,290 17,961 19,982 6.1 6.8 11 16.3 14.7 6.9 6.2 4.0 2.5 6.4 6.8 29 13.2 21.5 V Chirasit Note 4 

CS Loxinfo Dec 2,520 80 4.02 5.50 37% B 3 (8) 8 0.7 230 253 280 0.4 0.4 10 9.9 9.0 2.1 1.9 1.4 0.9 9.5 10.6 cash 8.7 12.9 V Chirasit Note 4 

Shin Satellite Dec 11,252 357 10.30 14.20 38% B 5 1 53 3.7 3,040 (588) 407 (0.5) 0.4 (144) nm 27.6 6.8 5.0 0.7 1.3 - 2.2 44 12.2 20.2 V Chirasit Note 2 

True Corporation Dec 22,726 722 5.05 7.00 39% B (7) (26) (12) 22.9 1,697 1,845 3,093 0.4 0.7 38 12.3 7.4 5.9 6.9 1.8 0.3 - - 639 1.4 19.5 V Chirasit 

Total Access Communications Dec 112,081 3,560 47.25 50.00 6% B 22 16 na 3.0 5,992 8,734 10,256 3.7 4.3 32 12.8 10.9 6.0 5.0 2.0 1.5 2.3 2.7 65 6.1 13.0 V Chirasit Note 2 

Sector 534,365 16,975 34,941 36,486 34,018 14.6 15.7 

Electronics 

Neutral 

Cal-Comp Electronics Dec 21,166 672 5.40 7.92 47% B (22) (24) 21 2.8 2,901 3,103 3,288 0.7 0.7 (3) 8.2 7.8 7.2 8.2 1.3 0.2 7.4 7.4 55.2 7.4 21.9 K Parin 

Delta Electronics Thai Dec 25,946 824 20.80 28.62 38% B (2) (1) 35 1.3 3,155 3,189 3,496 2.6 2.8 5 8.1 7.4 3.7 3.3 1.6 0.9 9.8 10.8 cash 7.3 13.3 K Parin 

Hana Microelectronics Dec 15,030 477 18.10 27.97 55% B (14) (26) (31) 1.0 2,449 2,139 2,391 2.5 2.8 (0) 7.1 6.4 3.5 3.0 1.2 0.8 8.4 8.8 Cash 18.8 23.1 K Parin Note 1 

Sector 62,142 1,974 8,505 8,431 9,174 7.4 6.8 

OTHER 

Others 

Charoen Pokphand Foods Dec 34,742 1,104 4.62 6.29 36% B 3 (10) 1 10.7 1,275 1,861 2,877 0.3 0.4 50 17.9 11.5 8.5 7.4 0.7 0.3 2.8 4.3 48.0 1.3 5.9 K Parin 

Bumrungrad Hospital Dec 24,397 775 33.50 43.00 28% B (17) (26) (15) 0.7 1,604 1,329 1,416 1.8 1.9 15 18.4 17.2 10.4 9.4 5.6 2.9 2.4 2.8 28.1 22.8 42.0 K Sugittra 

Aapico Hitech Dec 3,102 99 11.00 13.30 21% H 4 (17) (20) 0.2 350 318 389 1.1 1.4 7 9.8 8.0 7.6 7.6 0.6 0.3 3.1 3.8 55.2 3.9 8.0 K Parin 

The Erawan Group Dec 9,642 306 4.34 5.50 27% B 8 3 24 2.2 402 483 596 0.2 0.3 22 19.9 16.1 13.3 11.4 2.6 2.3 1.5 1.9 60.3 5.0 17.5 T Chaipat 

Minor International Dec 52,251 1,660 16.40 22.60 38% B (6) 5 50 3.5 1,611 1,950 2,311 0.7 0.8 20 24.9 21.0 12.6 11.1 4.6 3.2 1.2 1.4 45.2 8.2 19.3 T Chaipat 

Thai Union Frozen Products Dec 17,131 544 19.60 18.80 -4% S (13) (18) (13) 0.7 1,823 1,644 1,760 1.9 2.0 (1) 10.4 9.7 6.7 5.8 1.2 0.3 4.8 5.1 38.9 6.0 14.4 K Parin 

Sector 141,265 4,487 7,065 7,584 9,350 18.6 15.1 

Prices quoted in US$ converted to Bt at 31.48 to calculate ratios. Note 1: As at 25 March 08 ,DBSVS and its affiliates hold a proprietary position in these companies. 

SB = Strong Buy, B = Buy, H = Hold, FV = Fully Valued, S = Sell, NR = No Rating 

Note 2: DBSVR,DBSVS,DBS Bank Ltd and/or other affiliates of DBSVUSA,within the past 12 months,have received compensation and/or within the next 3 months seek to obtain compensation for 

* Under Revision investment banking services from these companies. 

Note 4: DBSVR,DBSVS,DBS Bank Ltd and/or other affiliates of DBSVUSA,within the past 12 months,have received compensation and/or within the next 3 months seek to obtain compensation 

for investment banking services from related of these companies. 

Page 72



INDONESIA : EARNINGS GUIDE 

FYE Mkt Mkt Price 1-yr Share Price 

Avg CAGR P/ P/ Dividend 

Company Cap Cap (Rp) Target % Performance (%) 6-mth PAT/MI (Rpbn) 

EPS (IDR) 07-09 PE (x) EV/EBITDA (x) BV x Sales x Yield (%) Gear ROA RONW Disclosure 

Rpbn USDm 25-Mar (Rp) Upside Rcmd 3M 6M 12M Vol (m) 07E 08F 09F 08F 09F (%) 08F 09F 08F 09F 08F 08F 08F 09F 07 07 07 Analyst Legend 

Conglomerate/Automotive 

Astra International Dec 96,958 10,555 23,950 34,000 42 B (8.9) 25.7 82.1 5.8 6,519 8,617 9,479 2,129 2,341 20.6 11.3 10.2 8.4 7.1 2.9 1.2 2.0 2.7 41.8 10.7 26.4 AP 

Sector 96,958 10,555 2,129 2,341 20.6 11.3 10.2 

Property 

Summarecon Agung Dec 2,249 245 700 1,200 71 B (40.2) (52.1) (40.2) 3.6 214 209 144 65 45 (18.1) 10.8 15.6 4.7 7.1 1.8 2.6 0.0 0.0 (69.6) 10.2 19.7 AW 

Ciputra Surya Dec 1,187 129 600 1,200 100 B (38.1) (42.3) (33.3) 9.2 136 135 160 68 81 8.5 8.8 7.4 6.7 5.4 1.0 3.0 2.3 2.3 Cash 7.0 25.4 AW 

Sector 3,436 374 66 59 (6.9) 10.1 12.8 

Cement and construction 

Adhi Karya Dec 1,351 147 750 1,650 120 H (44.4) (38.5) 5.6 10.2 142 200 223 111 124 25.4 6.8 6.0 5.5 4.7 1.9 0.2 3.2 4.4 106.4 3.7 2.6 HD 

Indocement Dec 24,480 2,665 6,650 6,677 0 H (14.7) 6.4 24.3 1.8 946 1,192 1,406 324 382 21.9 20.5 17.4 10.0 8.2 3.0 3.1 - - cash 8.3 13.4 HD 

Holcim Indonesia Dec 9,425 1,026 1,230 1,035 (16) FV (29.3) 10.8 83.6 13.4 206 276 356 36 47 31.5 34.2 26.4 12.3 9.4 3.7 2.4 - - 147.0 2.9 5.7 HD 

Semen Gresik Dec 30,251 3,293 5,100 6,700 31 B (8.9) (5.6) 24.4 3.4 1,775 1,951 2,117 329 357 9.2 15.5 14.3 7.9 6.9 3.8 2.8 2.3 2.6 cash 19.9 18.5 HD 

Total Bangun P Dec 990 108 360 740 106 B (37.9) (53.8) (41.9) 10.4 54 107 119 39 43 48.6 9.2 8.3 5.5 4.8 1.7 0.5 3.8 4.2 cash 4.7 4.1 HD 

Sector 66,497 7,239 171 193 16.3 19.7 16.9 

Consumer 

Kalbe Farma Dec 9,851 1,072 970 1,650 70 B (21.8) (27.1) (22.4) 15.1 784 992 1,228 98 121 25.1 9.9 8.0 4.7 3.5 2.2 1.2 1.2 1.5 cash 15.0 11.3 AW 

Enseval Putra M Dec 1,368 149 600 1,000 67 B (23.1) (29.4) (14.3) 0.7 228 261 300 114 131 14.5 5.2 4.6 2.4 1.8 1.0 0.2 1.7 1.9 (24.5) 10.6 19.7 AW 

Indofood Sukses Dec 21,722 2,365 2,300 3,200 39 B (10.7) 17.9 55.4 30.2 808 1,249 1,562 132 165 39.1 17.4 13.9 6.9 6.1 3.4 0.7 1.3 2.0 49.5 4.3 3.0 AW 

Mitra Adiperkasa Dec 913 99 550 1,000 82 B (17.9) (31.3) (28.6) 2.6 109 114 132 69 79 9.8 8.0 6.9 3.9 4.1 0.9 0.4 - 2.5 38.7 4.8 3.3 AW 

Mayora Indah Dec 859 93 1,120 1,575 41 B (37.1) (34.9) (17.0) 0.1 134 189 189 247 247 18.7 4.5 4.5 2.2 2.2 0.7 0.3 3.1 3.1 12.1 8.2 12.2 AW 

Unilever Indonesia Dec 51,503 5,607 6,750 5,200 (23) H - (2.9) 19.5 2.3 1,591 1,818 2,122 238 278 15.5 28.3 24.3 18.0 15.3 20.0 4.1 3.1 3.5 (26.1) 39.0 68.2 AW 

Matahari Putra Prima Dec 2,827 308 600 1,125 88 B (13.0) (24.1) (14.3) 7.8 99 96 153 17 27 17.1 34.9 21.9 4.8 4.0 0.7 0.3 0.8 - 67.6 1.4 4.4 AW 

Gudang Garam Dec 14,815 1,613 7,700 10,000 30 S (8.3) (20.6) (27.4) 0.5 1,320 1,830 2,032 951 1,056 24.1 8.1 7.3 5.2 4.8 1.0 0.5 4.5 6.2 23.7 6.2 9.4 AW 

Sorini Dec 1,269 138 1,410 2,750 95 B 20.5 69.9 235.7 7.8 92 109 154 121 171 29.6 11.7 8.2 7.7 5.9 2.4 1.1 2.2 2.6 25.8 12.8 23.1 AP 

Ramayana Lestari Dec 5,792 631 820 1,150 40 B (4.7) (1.2) (1.2) 7.9 353 441 523 62 74 14.1 13.1 11.1 6.5 5.4 2.4 1.0 3.1 3.9 cash 12.5 7.1 AW 

Tempo ScanPacific Dec 2,610 284 580 1,050 81 B (21.6) (28.4) (31.0) 3.9 344 407 557 90 124 27.2 6.4 4.7 2.0 1.0 1.1 0.8 6.6 7.8 (54.5) 12.7 16.0 AW 

113,529 12,359 147 175 23.6 20.1 16.8 

Bank 

Bank Central Asia Dec 76,887 8,370 3,150 3,485 11 H (14.3) (1.6) 22.3 15.1 4,593 5,213 6,082 211 247 15.1 14.9 12.8 na na 1.7 5.9 6.7 - 2.4 22.8 AP 

Bank Mandiri Dec 65,347 7,114 3,150 3,859 23 H (9.4) (8.0) 24.8 57.9 4,391 5,797 7,043 281 341 26.6 11.2 9.2 na na 2.0 3.4 4.5 106.4 1.6 14.9 AP 

Bank Danamon Dec 34,117 3,714 6,800 9,125 34 H (14.5) (18.1) 4.6 3.3 1,995 2,466 2,618 497 528 14.5 13.7 12.9 na na 2.8 3.0 3.7 201.2 2.2 18.6 AP Note 2 

Bank International Indo. Dec 20,036 2,181 415 250 (40) S 43.1 76.6 117.3 307.6 548 728 930 15 19 30.3 27.5 21.5 na na 3.4 1.4 1.8 5.7 1.0 10.0 AP 

Bank Rakyat Indo Dec 74,366 8,096 6,050 7,750 28 H (17.7) (11.0) 21.0 12.5 5,071 6,451 7,587 525 617 22.3 11.5 9.8 na na 3.1 3.4 4.3 206.3 2.8 25.5 AP 

Bank Niaga Dec 8,490 924 690 950 38 H (21.6) (21.6) (8.0) 55.2 717 991 1,243 81 102 31.7 8.5 6.8 na na 1.4 2.6 3.5 17.7 1.4 13.5 AP Note 1 

Sector 279,244 30,399 176 207 21.4 13.7 11.6 

Plantation 

Astra Agro Lestari Dec 42,439 4,620 26,950 32,200 19 H 2.7 61.4 112.2 2.3 1,828 2,870 2,721 1,822 1,728 22.0 14.8 15.6 9.0 9.7 7.7 5.1 2.8 4.4 cash 31.9 30.7 HD 

Bakrie Sumatra P Dec 6,856 746 1,810 3,050 69 B (17.7) 20.7 63.1 60.0 235 485 625 117 151 63.1 15.5 12.0 9.7 7.7 2.9 2.6 1.3 1.6 57.6 8.5 18.1 HD 

Tunas Baru Lampung Dec 1,854 202 445 780 75 B (28.2) (16.0) 41.3 48.2 87 152 179 33 39 43.1 13.3 11.3 5.8 5.2 1.8 0.8 2.4 2.9 50.1 4.4 9.7 HD 

London Sumatra Dec 13,100 1,426 9,600 14,800 54 B (6.3) 40.1 57.4 4.7 507 1,014 1,045 743 766 43.5 12.9 12.5 7.5 6.9 4.4 2.8 - - 12.7 11.5 17.5 HD 

Sector 64,242 6,993 416 420 31.1 14.4 14.5 

Basic Materials 

Aneka Tambang Dec 32,669 3,556 3,425 4,025 18 H (19.9) 21.2 46.4 120.3 5,445 4,430 3,834 464 402 (16.1) 7.4 8.5 3.8 3.9 2.8 3.1 5.7 4.6 cash 43.2 44.3 YW 

INCO Dec 72,038 7,842 7,250 8,200 13 H (23.2) 10.0 50.9 6.4 11,054 10,306 7,708 1,037 776 (16.5) 7.0 9.3 3.8 4.8 3.0 3.6 10.7 7.2 (59.8) 38.8 50.8 YW 

Timah Dec 14,344 1,562 28,500 31,900 12 B 1.8 124.4 122.7 4.0 1,561 1,460 1,450 2,904 2,883 (3.6) 9.8 9.9 5.5 5.3 5.8 1.8 5.4 5.1 cash 31.6 20.5 HD 

Sector 129,298 14,076 656 547 (12.5) 7.4 8.9 

Oil, Gas and Energy 

Tambang Batubara Dec 21,659 2,358 9,400 13,550 44 B (18.6) 44.6 184.8 17.2 700 1,247 1,883 541 817 64.0 17.4 11.5 11.1 7.2 5.9 4.0 1.6 2.9 cash 19.2 17.3 YW 

United Tractors Dec 33,364 3,632 11,700 14,500 24 B 6.4 40.1 61.4 7.1 1,607 1,818 2,033 638 713 12.5 18.4 16.4 8.5 7.8 4.8 1.5 1.9 2.2 34.0 11.8 8.6 YW 

Indo Tambangraya Dec 22,711 2,472 20,100 34,500 72 B n.a. n.a. n.a. n.a 517 2,068 3,313 1,830 2,932 153.2 11.0 6.9 6.1 3.5 3.7 2.1 0.4 1.6 cash 7.2 19.1 YW 

Medco Energi Dec 11,247 1,224 3,375 6,000 78 B (34.8) (15.6) (5.6) 22.6 612 942 868 295 271 19.0 11.9 12.0 3.8 3.8 1.9 1.3 4.1 3.8 60.4 3.4 12.1 YW 

Bumi Resources Dec 118,364 12,885 6,100 7,500 23 B 1.7 80.7 395.9 159.4 8,050 5,844 11,380 314 611 18.9 18.5 9.5 7.7 3.8 7.4 3.9 1.1 1.4 6.8 33.8 119.3 YW 

Perusahaan Gas Dec 60,380 6,573 13,300 15,500 17 H (14.5) 20.4 43.0 12.7 2,227 4,619 6,952 1,019 1,533 76.7 13.1 8.7 7.9 5.2 5.8 3.3 1.8 3.8 123.4 10.6 22.3 YW 

Sector 267,726 66,663 493 787 38.8 17.0 10.7 

Telekomunications 

Indosat Dec 37,766 4,111 6,950 12,000 73 B (19.7) (0.7) 7.8 9.9 1,986 2,615 3,373 481 621 30.3 14.4 11.2 5.3 4.6 2.1 2.0 4.0 5.1 65.7 5.2 12.6 BL 

Telekomunikasi Indonesia Dec 197,568 21,508 9,800 12,800 31 B (2.5) (9.3) 1.0 30.1 13,691 14,603 16,883 731 845 11.0 13.4 11.6 4.2 3.5 5.0 2.7 3.7 4.3 cash 16.5 21.7 BL 

Sector 235,334 25,619 673 791 13.7 13.6 11.5 

Legend 

Note 1 As at 25 Mar 2008, DBSVS and its affiliates hold a proprietary position in these companies. 

Note 2 DBSVR, DBSVS, DBS Bank Ltd and/or other affiliates of DBSVUSA, within the past 12 months, have received 


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DBSV recommendations are based an Absolute Total Return* Rating system, defined as follows: 

STRONG BUY (>20% total return over the next 3 months, with identifiable share price catalysts within this time frame) 

BUY (>15% total return over the next 12 months for small caps, >10% for large caps) 

HOLD (0-15% total return over the next 12 months for small caps, 0-10% for large caps) 

FULLY VALUED (negative total return i.e. > -10% over the next 12 months) 

SELL (negative total return of > -20% over the next 3 months, with identifiable catalysts within this time frame) 

Share price appreciation + dividends 

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(DBSR GO). For access, please contact your DBSV salesperson. 

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compensation was, is, or will be, directly, or indirectly, related to specific recommendations or views expressed in this report. As of 28 Mar 

2008, the analyst and his / her spouse and/or relatives who are financially dependent on the analyst, do not hold interests in the securities 

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months, and within the next 3 months may receive or intends to seek compensation for investment banking 

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DBSVUSA does not have its own investment banking or research department, nor has it participated in any 

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