2013-01-15 p8a=sg (dbs vickers) (reg) post conference notes_ a friendlier 2013

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“In Singapore, this research report or research analyses may only be distributed “Recipients of this report, received from DBS Vickers Research (Singapore) Pte Ltd to Institutional Investors, Expert Investors or Accredited Investors as defined in the (“DBSVR”), are to contact DBSVR at +65 6398 7954 in respect of any matters arising Securities and Futures Act, Chapter 289 of Singapore.” from or in connection with this report.” www.dbsvickers.com Refer to important disclosures at the end of this report ed: SGC/OY / sa: TW Regional Equity Strategist Joanne Goh (65) 6878 5233 [email protected] DBSVickers regional research team Fig. 1: Top 10 companies with strong interest EPS CAGR Price Mkt Cap Target FY13 FY12-14 10-Jan-13 US$m Price PE (x) (%) Rating 1 Wing Tai Holdings Ltd S$ 2.08 1,332 .3 .2 y 2 Central Pattana Bt 82.25 5,813 90.00 33.6 19 Buy 3 Charoen Pokphand Foods Bt 33.25 8,540 42.00 13.6 66 Buy 4 Quality Houses Bt 2.48 642 3.00 11.5 24 Buy 5 UEM Land RM 2.10 3,004 2.10 23.5 12 Hold 6 Evergrande Real Estate HK$ 4.52 8,741 4.70 5.7 22 Buy 7 Religare Health Trust S$ 0.90 580 0.97 4.4* na Buy 8 Far East Hospitality Trust S$ 0.985 1,292 1.09 6.0* 5* Buy 9 Thai Union Frozen Products Bt 71.25 2,700 91.00 12.6 28 Buy 10 Ascendas Hospitality Trust S$ 0.97 638 0.98 4.3* na Buy Source: DBSVickers * FY13 Dividend Yield and DPU CAGR 12-14 Fig. 2: MSCI FEXJ net % of companies with upward revisions – upgrades can be expected -80 -60 -40 -20 0 20 40 00 01 02 03 04 05 06 07 08 09 10 11 12 (%) Source: IBES, Datastream Fig. 3: Wide Asia earnings yield gap over US bond yield provides room for PE expansion – rally is sustainable 0 1 2 3 4 5 6 7 8 9 10 02 03 04 05 06 07 08 09 10 11 12 13 (%) Equity is cheap Equity is expensive Source: IBES, Datastream. Dotted proforma yield gap when US 10 year DBS Group Research . Equity 14 Jan 2013 Regional Market Focus Post Conference Notes A friendlier 2013 3,000 meeting requests from 400 clients for 84 companies concluded the successful 3-day Pulse of Asia conference held in Singapore Property companies made up close to 40% of companies which were showcased; investor interest remain strong in Asia property companies Guidance from companies were generally upbeat, seeing 2013 as a friendlier environment; concerns over tighter labor and rising labor costs were frequently raised Industrials and consumer companies likely to see earnings upgrades Property companies continued to be driven by positive domestic economy and low interest rates. There was enthusiastic attendance at meetings with property companies. We believe the positive domestic sentiment and low interest rate environment will continue to support sector interest with an asset reflation theme. Guidance from industrials and consumer companies were generally upbeat. Most companies have capex plans but are prudent in assessing business opportunities. Costing pressure will come mainly from rising labor costs; raw material costs are generally not an issue. Exceptionally strong Interest in Thai companies. Thai companies accounted for three out of five companies that attracted the strongest interest at the conference. Thailand’s transport minister gave a detailed presentation on Thai infrastructure projects. These projects are likely to drive growth in Thailand over the next few years. We have an Overweight weighting for Thailand. Earnings and forecasts may be raised following positive guidance. We had upgraded Tat Hong following the conference. Key themes for 1H13: 1) Buy Thailand; 2) TIP property sector will outperform in 1H; 3) current rally is sustainable premised on potential for earnings upgrades, especially industrial and consumer stocks. [email protected] FooSuan Yee 05/23/14 06:06:11 AM IMC INVESTMENTS PTE. LTD.

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Page 1: 2013-01-15 P8A=SG (DBS Vickers) (REG) Post Conference Notes_ A friendlier 2013

“In Singapore, this research report or research analyses may only be distributed “Recipients of this report, received from DBS Vickers Research (Singapore) Pte Ltd to Institutional Investors, Expert Investors or Accredited Investors as defined in the (“DBSVR”), are to contact DBSVR at +65 6398 7954 in respect of any matters arising Securities and Futures Act, Chapter 289 of Singapore.” from or in connection with this report.”

www.dbsvickers.com Refer to important disclosures at the end of this report ed: SGC/OY / sa: TW

Regional Equity Strategist

Joanne Goh (65) 6878 5233 [email protected] DBSVickers regional research team Fig. 1: Top 10 companies with strong interest

EPS

CAGR

Price Mkt Cap Target FY13 FY12-14

10-Jan-13 US$m Price PE (x) (%) Rating

1 Wing Tai Holdings Ltd S$ 2.08 1,332 ../3ĂĂĂĂĂĂĂĂĂĂ5.2ĂĂĂĂĂĂĂĂĂĂĂĂĂĂĂĂ)3ĂĂĂĂĂĂĂĂĂĂĂ>qy

2 Central Pattana Bt 82.25 5,813 90.00 33.6 19 Buy

3 Charoen Pokphand Foods Bt 33.25 8,540 42.00 13.6 66 Buy

4 Quality Houses Bt 2.48 642 3.00 11.5 24 Buy

5 UEM Land RM 2.10 3,004 2.10 23.5 12 Hold

6 Evergrande Real Estate HK$ 4.52 8,741 4.70 5.7 22 Buy

7 Religare Health Trust S$ 0.90 580 0.97 4.4* na Buy

8 Far East Hospitality Trust S$ 0.985 1,292 1.09 6.0* 5* Buy

9 Thai Union Frozen Products Bt 71.25 2,700 91.00 12.6 28 Buy

10 Ascendas Hospitality Trust S$ 0.97 638 0.98 4.3* na Buy

Source: DBSVickers * FY13 Dividend Yield and DPU CAGR 12-14

Fig. 2: MSCI FEXJ net % of companies with upward

revisions – upgrades can be expected

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Source: IBES, Datastream

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provides room for PE expansion – rally is sustainable

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Equity is cheap

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DBS Group Research . Equity 14 Jan 2013

Regional Market Focus

Post Conference Notes

A friendlier 2013

3,000 meeting requests from 400 clients for 84 companies concluded the successful 3-day Pulse of Asia conference held in Singapore

Property companies made up close to 40% of companies which were showcased; investor interest remain strong in Asia property companies

Guidance from companies were generally upbeat, seeing 2013 as a friendlier environment; concerns over tighter labor and rising labor costs were frequently raised

Industrials and consumer companies likely to see earnings upgrades

Property companies continued to be driven by positive domestic economy and low interest rates. There was enthusiastic attendance at meetings with property companies. We believe the positive domestic sentiment and low interest rate environment will continue to support sector interest with an asset reflation theme. Guidance from industrials and consumer companies were generally upbeat. Most companies have capex plans but are prudent in assessing business opportunities. Costing pressure will come mainly from rising labor costs; raw material costs are generally not an issue. Exceptionally strong Interest in Thai companies. Thai companies accounted for three out of five companies that attracted the strongest interest at the conference. Thailand’s transport minister gave a detailed presentation on Thai infrastructure projects. These projects are likely to drive growth in Thailand over the next few years. We have an Overweight weighting for Thailand. Earnings and forecasts may be raised following positive guidance. We had upgraded Tat Hong following the conference. Key themes for 1H13: 1) Buy Thailand; 2) TIP property sector will outperform in 1H; 3) current rally is sustainable premised on potential for earnings upgrades, especially industrial and consumer stocks.

[email protected] FooSuan Yee 05/23/14 06:06:11 AM IMC INVESTMENTS PTE. LTD.

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Key interests in Property and Thailand We featured a record number of 84 companies from Singapore, Malaysia, Hong Kong, China, Korea, Indonesia, Thailand and Philippines in the DBSV Pulse of Asia Conference last week. There were 3,000 meeting requests from 400 clients. The attendance is one of the highest in recent years with a median average of 32 meetings for each company. Interest is strong across the board particularly in the property sector and Thai market. Interest in ASEAN remains strong despite investment focus having turned toward the North Asia markets. Property companies made up close to 40% of companies which were showcased. Interest in the sector continued to be driven by strong domestic economies and low domestic as well as global interest rates, which are driving asset reflation. Singapore kicks off the reporting season this week starting with the REITs, resulting in fewer REITS attending our conference. Clients were mostly interested in residential developer Wing Tai, wanting to know the impact of the government’s repeated attempts to cool down the red hot property sector. Indeed, over the weekend, the government had introduced more property control measures. However, we see this as a pre-emptive move to avoid further price speculation and advice prudence before the white paper on population is released. Concerns over a slower Singapore economy potentially affecting the Services sector, especially Hotels, also saw strong interest towards hospitality REITs. Investors should look for stocks that could deliver earnings-accretive acquisitions now that dividend yield gaps have compressed. There was also strong interest in Thai, Indonesia, the Philippines, Malaysia and China property firms. Wage costs rising but raw material costs were generally stable. There were concerns over rising wage pressure in most Asian markets amid regulations to raise minimum wage (Thailand, Indonesia, Malaysia) and tightening labor markets (Singapore, China). Labor-intensive sectors like plantations, ports, and shipbuilding in China, are likely to see higher wage pressure. However, companies are benefiting from stable or falling raw material costs, although some may not feel the benefit until 2H. CP Foods may be one of the cheapest consumer stocks in the region after the sharp price correction last year, but earnings is expected to turnaround only in 2H.

Highlights in Oil & Gas sector Among the eclectic list of industrials, most gave positive guidance with many in expansion mode, adding capacity in anticipation of stronger volumes as the global environment improves. Companies with scalable businesses, such as those in the oil & gas sector, are likely to benefit the most from this modest recovery. We also raised earnings for Tat Hong after the conference as its crane rental business is reaping higher margins in the oil & gas segment. Asia regional markets: Negative real rates boosting Asset inflation

Source: Datastream, DBS. real rate: Saving rate minus Inflation

We also hosted more than 100 participants in our presentations on the Philippines, China and Thailand markets. Philippines. The market had risen in a straight line over the past four years, but the speaker highlighted some risks during the lunch presentation titled “What can turn sour?”. In our view, the top down picture still looks strong for the Philippines as its external balance is one of the strongest among ASEAN countries due to BPOs, which are less volatile than exports, and OFW remittances. Consumption had been the main growth driver and will continue to be so, but upside growth surprise will have to come from successful PPP in infrastructure projects to justify the lofty valuations. As it is, we do not see potential for upside surprises in the PPP. We have initiated Philippine as Neutral and recommend consumer stocks as main beneficiaries of the strong domestic economy. Government spending is expected to be strong prior to the regional elections in the middle of the year.

[email protected] FooSuan Yee 05/23/14 06:06:11 AM IMC INVESTMENTS PTE. LTD.

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Philippines: Electricity sales growth - economic growth proxy

China. DBSV is upbeat on China with a forecast Philippines to cont The challenge imarkets to Among these 2 of our main concerns are infrastructure and Indeed some risks of t While the guidance for second half / 2013 is nothing to write home about companies in general do not expect second half to be worse than first half. The environment will be conducive for clearing inventory and filling up order books as scheduled, with less stress as expected on Source: Meralco, First metro secs

China. DBS is upbeat on China and has one of the highest 2013 GDP growth forecast on the street at 9%. DBS China economist, Chris Leung, spoke on the new government promoting urbanisation in China, which should support the need for FAI spending to boost headline growth. Urban FAI in central China has gained prominence. China: Urbanisation in smaller cities with younger

populations (% of FAI breakdown by region)

Source: CEIC

Thailand. This year, Thailand’s Minister of Transport presented on Thailand’s infrastructure plans for the next 10 years. The focus is on Dawei deep seaport and industrial estate development project that is projected to cost US$10.7 bn. Dawei is at the south-western Thai / Myanmar border. The industrial estate will include heavy industries such as: steel mills, oil refineries, petrochemical complex, fertilizer plants, power plant, and other utility services including cross border road and rail links with connecting transmission lines, as well as residential and commercial developments.

Thailand: Potential for fiscal boost in infrastructure spending with low budget deficit

Source: Datastream, DBS

Key themes for 1H13. In conclusion, our major takeaways from the conference are the following key themes:- 1) Thai/ Indonesia/ Philippines property should continue to

outperform the region in 1H13

2) Interest in Chinese stocks is still limited to big caps and property stocks. Conviction in mid caps is still low. We believe as headline disappointment in China eased, sentiments are likely to improve. Rally which is supported by improving confidence is likely to be sustainable and interest could spread to the mid caps and small caps names.

3) We are more convicted in our Thai overweight as investor interests are stronger than expected. The infrastructure plans are clear and if executed should bring bountiful benefits to Thailand and the region. Parts of the infrastructure works have already commenced.

4) Mid caps oil and gas are still expected to outperform.

5) Yield gaps in Singapore REITS are still seen as a relatively attractive investments

6) Current rally is sustainable given potential for earnings upgrades, especially with industrial and consumer stocks

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[email protected] FooSuan Yee 05/23/14 06:06:11 AM IMC INVESTMENTS PTE. LTD.

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SINGAPORE CORPORATES

CORDLIFE GROUP (NOT RATED S$0.58; TP: S$0.65; CLGL SP) Number of clients met >40 Salient points in management presentation 1) Possible acquisition of assets from Australian entity - in particular assets in India, the Philippines and Indonesia that could boost revenue by about 35%. Has enough money from IPO to fund acquisitions. Company operating cashflow is earmarked for dividend payments. 2) More room to improve penetration rate via education. Stable growth in Singapore and HK, driven by increasing penetration. Long term contract with customers for 21 years in Singapore, and 18 years in HK. 3) Adequately insured - maximum payout S$4m per case; total insurance premium paid last year about S$50,000 (vs revenue of S$29m) Data points and other guidance made: 1) Market share in Singapore currently stands at 70% of private cord blood bank. Penetration in Singapore of about 28%. Estimated implied growth of about 10-15%. 2) 48% of customers opting to pay 21 yrs; 40% opting for annual plan; the rest are on 10 year plan. Upfront payment has been reduced to S$1600 from about S$2000 previously due to economies of scale. Currently still about S$200 more than competitors. 3) Cordlife has done eight successful transplants so far, vs about 120 transplants for Singapore Cord Blood Bank (public bank). Three frequently asked questions (and response by management) 1) What were the reasons for higher market share? Company believes in accreditation and has done eight transplant vs none by its competitors. Triple blood system, has six markers in BIOSAFE bag. It is able to get 97% recovery of stem cells from cord blood drawn, compared to 87% from normal blood recovery system. It has also has put more effort into marketing. 2) Public vs private. Why do for public if private is free? Singapore Cord Blood Bank has a target inventory of 10k cord blood units, so it will discard some if the ethnic match is

common. Cord blood may not be available to donors when it is needed years down the road. The company is educating clients on this point. 3) Risks on contracts? The company is not liable for force majeure events, such as natural disasters. It is also not liable for cord blood that has been contaminated during collection and not suitable for storage. It will only provide refunds. It is liable for the matching of cord blood, or payment of up to US$25,000. Professional indemnity of up to S$4m payout, as per other healthcare players, such as Parkway, Raffles Medical. 4) What is the lifespan of the stem cells collected? There are different studies done and results vary as the oldest cord blood bank is probably <50 yrs. So far studies have shown that the cells stored are still viable and some studies even predict a lifespan of 1000 yrs! 5) How are revenues recognised? Those clients who paid up front are recognised on a deferred basis while those on an annual payment scheme are recognised based on a discounted cashflow basis (discount rate 10%) We do not cover this counter. Non-rated.

[email protected] FooSuan Yee 05/23/14 06:06:11 AM IMC INVESTMENTS PTE. LTD.

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COSCO CORPORATION (FULLY VALUED; S$0.985; TP: S$0.80; COS SP) Number of clients met: 17 Salient Points in Management Presentation: 1. Offshore enquiries remain healthy 2. Cosco has scaled up and has improved on project execution. 3. Offshore remains the bright spot while the shipbuilding outlook is still challenging Data-points and other guidance made: 1. New order wins target will be announced in Feb. Probably will be similar to US$2bn achieved last year. 2. Gross margins for offshore is expected to hover around 10% on average. Three frequently asked questions (and response by management) 1. Outlook for new orders - Cosco will focus on offshore orders in the coming two years and expect stable demand from this segment. Shipbuilding orders may improve slightly from 2012 but remain sluggish as supply is abundant in spite of declining bulk carrier deliveries in 2013. 2. Cancellation or rescheduling risk - most of the shipowners are looking to take deliveries on schedule except a couple of units that have been postponed from Dec to Jan, which is the industry norm. 3. Inflationary cost pressure - Steel cost will likely be rather stable and labour cost may increase in single digits only

CWT (NOT RATED; S$1.26; CWT SP) Number of clients met: 53 Salient Points in Management Presentation: 1. The majority of CWT’s commodity supply chain management business (80% of 9M12 revenue) is related to copper, lead and zinc concentrates. The group is also looking to expand into refined metals, diesel, gasoline, naphtha, coal and iron ore. 2. The profits from commodity trading come from (a) sourcing (e.g. buying copper from the mines) (b) logistics/freight (i.e. finding the cheapest way to transport the commodity from the mine to a port) (3) onshore logistics (e.g. finding the lowest tax bracket on which to import the commodity, finding the best location in which it can deliver the goods to its customers). CWT’s historical strength has been onshore as it has secured exclusive access to critical ports or delivery points. 3.CWT’s freight logistics arm (7% of 9M12 revenues) is the third largest LCL (less than container load) consolidator for sea freight. This business is involved in the collection of smaller parcels from various freight forwarders and consolidating the volumes for the larger logistics players such as DHL and DB Schenker. Data-points and other guidance made: 1. CWT will have over 11.1m square feet of warehouse space under management by 2014. 2. The group trades about 1.4m MT of base metals with 2m MT target near term. 3. The group has about US$1.2bn of uncommitted lines, 50-60% of which has been utilised. Three frequently asked questions (and response by management) 1. Does CWT intend to sell more of its warehouses? The group will only sell when it requires cash to construct a new warehouse. For example Pandan Logistics Hub was sold in 2012 to fund the construction of CWT Cold Hub 2 and the expansion of Toh Guan Road East. 2. How does CWT manage the commodity price risk in its supply chain manager business? CWT notes that it does not take on price risks. This is achieved by entering into a futures contract when it sources the supply of copper concentrate. When it finds a customer for the concentrate, it then enters into another futures contract to hedge against any price risks. This is required by the banks that provide financing to CWT.

[email protected] FooSuan Yee 05/23/14 06:06:11 AM IMC INVESTMENTS PTE. LTD.

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60% of the hedging is conducted by the banks themselves, with the remaining 40% down by CWT with documented proof to the banks. 3. Would CWT be interested in expanding to Johor, Malaysia? CWT is not interested as there is only a 10% cost (consisting of warehousing, labour and freight) differential to Singapore. In addition the group is also concerned about the freight volumes available there.

DEL MONTE PACIFIC LIMITED

(NOT RATED ; S$0.685; DELM SP) Number of clients met: c. 30 Salient points in management presentation 1) Its focus is on packaged beverages vs concentrates, and fresh fruits vs contract pack for fruits. 2) 75% dividend payout maintained. 3) It shared its long-term optimism. Five main points by 2015, including termination of supply contract in Nov 2014, change in pricing model for fresh pineapple contract, and expiration of toll contract with San Miguel that has lower margins. Data points and other guidance made: 1) Branded accounts for 70% of business vs 30% of OEM. 2) General trade of 70%. Penetrate over 90k stores out of 500k. Relevant stores would be about 150k sari sari stores. Three frequently asked questions (and response by management) 1) The reason for sales decline in 2009? It had problems with pineapples. I tried using outgrowers programme but the tonnage declined. 95% of pineapples are produced internally. 2) Capex? c.25m per year. 3) Biggest competitor? Dole is the largest competitor overall, and Del Monte in Asia. Heinz in the Philippines for the culinary segment. Recommendation: we do not cover the stock currently.

[email protected] FooSuan Yee 05/23/14 06:06:11 AM IMC INVESTMENTS PTE. LTD.

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EZION HOLDINGS

(BUY S$1.88; TP: S$2.12; EZION SP) Number of clients met: 27 (half day of meetings) Salient Points in Management Presentation: 1. Expect robust demand for their liftboats/service rigs to persist over the next five years at least, driven by the need for platform maintenance. 2. Focus on maintenance phase of oil field lifecycle, less volatility in oil companies’ budget in this segment. 3. Strategy going forward – need to balance project portfolio of liftboats (higher margins, ROE, but longer gestation period) vs refurbished service rig projects (lower margins, ROE, but quicker time-to-market); also depends on what customers require at the end of the day. Data-points and other guidance made: 1. Ratio of offshore platforms to liftboats in Asia Pacific.

2. Age profile of offshore platforms. Three frequently asked questions (and response by management) 1. What do the new strategic shareholders bring to the table? Tan Boy Tee brings years of experience and his industry network as founder/CEO of Labroy, as well as his ability to co-fund the equity portion of future potential projects. EDBI is more of an endorsement of Ezion’s niche and first-mover advantage in the liftboat space in Asia Pacific, which has the potential to set a new industry standard for platform maintenance in the sector. Ezion hopes EDBI's presence will help open doors to two Asian-based national oil companies for which EDBI has existing traction with. 2. Is Ezion likely to raise equity capital in the foreseeable future? Will not do so for general fund raising purposes – management is very adverse to dilution of existing common shareholders, unless it spots compelling acquisition/projects (e.g. earnings accretive or good business at bombed out valuations) that require funding.

EZRA HOLDINGS

(BUY (UR) S$1.325; TP: S$1.30 (UR); EZRA SP) Number of clients met: 40 Salient Points in Management Presentation: 1. Sees no slowdown in subsea market; strong offshore activity levels as clients continue to push out new projects 2. Full subsea fleet will be able to address the entire spectrum of deepwater subsea construction projects 3. Day rates for large AHTS have been inching up; expect them to strengthen significantly in 2H 2013 Data-points and other guidance made: 1. Tender book for subsea projects currently stands at ~US$4bn; 30% historical hit rate 2. Subsea fleet utilisation rate to be much improved y-o-y; towards high 70s/low 80s Three frequently asked questions (and response by management) 1. Administration cost trend: Management guides that most of the hiring required for the combined Ezra-AMC group hasbeen done, just another team of 100 people are needed to support the operations of Lewek Constellation subsea vessel when it is delivered in 2014 2. What is the current subsea orderbook, and how much is to be recognized over FY13/14? Currently at ~US$900m, most (60-70%) to be booked in FY13; remainder in FY14-16

[email protected] FooSuan Yee 05/23/14 06:06:11 AM IMC INVESTMENTS PTE. LTD.

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FAR EAST HOSPITALITY TRUST

(BUY S$0.985; TP: S$1.09; FEHT SP) Number of clients met: >30 Salient Points in Management Presentation: 1. Management advocates their medium term positive view on the sector given the opening of various attractions (West Zone) and River Safari underpinning growth in the sector for 2013. It believes that demand will continue to outstrip supply and occupancy will remain high at 85pct. 2. Asset refurbishment plans on track. Post refurbishment rates are in excess of 5-10pct portfolio wide. Refurbishments will complete by end of 1Q13. 3. Its acquisition pipeline is one of the strongest amongst peers which is likely to be ready to make acquisitions within the next 18 months. Prior to that, in the immediate term the group has signed a non-binding MOU with Straits Trading to acquire Grand Rendezvous Singapore Data-points and other guidance made in response to questions: 1. Demand for rooms have remained fairly weak in Jan13 given that the corporate market has yet to start fixing meetings and start traveling before the Chinese New Year but Feb is likely to be a good month. Corporates rates are signed in excess of 5pct growth y-o-y. It has receive positive feedback from refurbished rooms in Orchard Parade Hotel and the Landmark Hotel and it has been able to sign an increased number of large corporate deals for it. 2. Funding of Grand Rendezvous Hotel not decided yet but could need new equity given its size. However, management remains confident that it will be an accretive deal. Gearing target of between 30-35pct. 3. Its serviced residence portfolio is seeing some weakness, due to weaker demand from the financial sector but it is not significant. Occupancy is expected to remain above 80pct. However, booking visibility is getting shorter (lesser than one year leases), more of three to six months rolling, thus its ability to raise rates is limited but still positive We have a buy call with TP 1.09. Potential upside coming from acquisitions not factored in at this moment

GOLDEN AGRI RESOURCES

(NOT RATED S$0.66; TP: S$0.71; GGR SP) Number of clients met: c.40 Salient Points in Management Presentation: 1. The group revealed that the 16k ha planted oil palm estates it had acquired (announced 21 Dec12) has an average age of 13 years. The group purchased this asset from a large group that they had declined to disclose. The acquisition price was US$11,100/ha. GGR also revealed that US$220m of further investment in Verdant Fund LP was for an acquisition of c.17k ha of planted land, which was part of the land acquired in point 1. The rationale: The fund was initially formed to develop a c.200k ha concession in Liberia for which GGR had invested US$50m. The total investment cost needed for this is US$1.5bn; but so far there are no other investors in the fund. Hence, to help attract other investors for Verdant Fund LP, it was injected with this asset. At this point GGR has yet to provide further information regarding the terms and conditions of its investment in Verdant Fund LP. According to GGR, Verdant Fund is run by an ex-McKinsey professional manager. 2. The fund raising exercise through CB was primarily on the cost consideration (i.e. 2.5% vs. 7-8% through straight bonds). It was revealed that it did not employ bank loans because it had hit the banks' legal lending limit. The group will utilise proceeds from warrants exercise this year (c.US$300m) as well as through various fund raising efforts (including US$400m CB and RM1.5bn Sukuk) for refinancing and M&A opportunities. 3. The group is looking into further investments for the upstream (c.15% IRR) and downstream (c.20% IRR). It is considering further acquisitions in Indonesia as well as refining capacity in India. In India, it will form a partnership with a local entity; and is looking at opportunities in Southern India. The investment amount and capacity will still depend on whom it chooses to partner with; and currently it is in talks with various parties. Data-points and other guidance made: 1. Capex will remain at between US$400m and US$500m; dividend payout will go back to 20-30% 2. Expansion target remains 20-30k ha (c.20k ha of which is organic). The group will continue to pursue acquisitions of 10-15k ha this year. There is a higher likelihood that own planting will reach 20k ha this year (realised expansion over the past two years is 10-15k ha); as the group had made adjustments to the changing regulatory environment and higher compensation

[email protected] FooSuan Yee 05/23/14 06:06:11 AM IMC INVESTMENTS PTE. LTD.

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demands over the past two years; such as allocating more resources to areas of expansions and better socialisation. 3. Cost to maturity is US$7k/ha over three years (inclusive of the mill, which is approximately US$1,500/ha). Three frequently asked questions (and response by management) 1. Are there cost pressures going forward? The group expects its cash cost of production/MT to increase by c.5% y-o-y this year (from around US$300/MT last year), taking into account the various increases in minimum wages throughout Indonesia. It had undertaken a cost analysis impact and found that the hectarage-weighted labour cost increase would be 15% this year, or approximately 5% higher than normal. Labour cost accounts for approximately 45% of the group's overall cost; while fertiliser cost accounts for 30%. It expects fertiliser cost to increase by less than 5% this year (after imputing that CPO output will grow at the lower end of 5-10% range this year). 2. What is the group's outlook on CPO price (inventory situation)? The current weakness is mostly coming from China, as the substitution from soybean oil is not happening. This was because China had a significant soybean meal requirement and

was therefore heavily importing soybeans - thus creating ample supplies of soybean oil. However, GGR believes this is temporary and expects the CPO price to rebound to a more sustainable level of c.US$1,000/MT (perhaps as soon as 1Q13), as inventory levels normalise (i.e. to below 2m MT in Malaysia, quoting Oil World). This is based on expectations that 1Q13 production will seasonally drop and exports to continue to remain strong. According to the company, CPO prices have hovered around US$1,000/MT over the past two years and fundamentals have not changed much. Unless the CPO prices drop to US$500/MT, the group will continue to focus on improving its output and expand organically as well as inorganically. GGR expects to sell more inventory in 1Q13 (as its strategy to hold stock in 3Q12 backfired). 3. Why has operations in China incurred losses and what is the 4Q12 outlook? High input cost, combined with restrictions on domestic cooking oil prices made worse by shadow financing. 4Q12 situation should improve because soybean prices have declined; and as inflation has eased, there should be less tightening (therefore less shadow financing). They expect no operational differences with Wilmar. This counter is not covered; but we have a fair value estimate of S$0.71 (excluding new 16k ha of planted land acquisition). Will share amended fair once data is imputed.

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GOODPACK

(HOLD; S$1.89; TP: S$1.95; GPACK SP) Number of clients met: 35 Salient Points in Management Presentation: 1.Goodpack intends to grow its revenue in excess of US$300m (FY12 – US$177m). This will come from increased penetration of existing customers, growth in existing markets and expansion into the automotive sector. 2. Given its strong balance sheet, for new IBC’s (intermediate bulk containers), 50% will be leased with the remainder being owned. Goodpack may also look to buy the IBC's that it is currently leasing from the banks. 3. Goodpack is targeting a 10-15% marketshare in automotive parts over the next five years. This will drive Goodpack's medium-term growth outlook. Data-points and other guidance made: 1. Current utilisation stands at 58% up from 56% last year. The target is to reach 60% with a potential maximum utilisation rate of between 65-70% 2. Automotive parts are only expected to contribute 2% of FY13 profits. 3. Each IBC currently costs US$250 Three frequently asked questions (and response by management) 1. What are the competing transport solutions? The main competition are wooden boxes/pallets and corrugated boxes. There are also some providers of steel and plastic boxes. Goodpack's steel IBC's have an advantage compared to wooden boxes as there is no risk of wooden contaminants. For corrugated boxes and plastic boxes, steel IBC's have a higher carrying capacity. Goodpack also has the advantage of a global network that other steel box companies do not have. 2. What is the current margin outlook? Goodpack expects variable costs as a percentage of revenue to remain stable. 3. What is the difference between Goodpack’s and Brambles’ business models? Management explained that Brambles’ primary business is the leasing of pallets for FMCG (fast moving consumer goods) with a domestic focus. Goodpack in contrast is mainly involved in the international movement of rubber and automotive parts.

HUTCHISON PORT HOLDINGS TRUST

(BUY; US$0.82; TP US$0.88; HPHT SP) Number of clients met: >30 Salient Points in Management Presentation: 1. Expect c. 5% throughput volume growth in 2013, driven mainly by higher transshipment and intra-Asia volumes. Europe remains worrying whilst some signs of a mild US recovery 2. Cost pressures will mainly come from higher labour costs (+10% y-o-y in PRC and +5% y-o-y in HK), as well as a slightly higher tax rate (effective 16% in 2013) and higher interest costs (on refinancing of existing loans and more debt to fund capex). 3. ASPs to move 2%-3% higher, more or less in line with inflation. Data-points and other guidance made: 1. HK$3.5bn more in capex to be spent (HK$1bn spent so far) on Westport Phase 2 over 2013 to 2015, which will be roughly evenly distributed. Total capex for 2013 estimated at HK$1.5bn (including recurring/maintenance capex), funded by debt 2. Can make DPU guidance as per prospectus (US 6.6cts) due to capex deferral but as 2013 will see significant capex, DPU is likely to be lower (already previously guided to the market). Three frequently asked questions (and response by management) Frequently asked questions mainly revolve around the above key points. Our take Nothing too surprising said by HPHT. The trust's prospects are largely determined by the macro-economic environment, and should see some core earnings improvement on a slightly improved world outlook in 2013 and stronger China growth. Although we expect DPU to decline in FY13 as its capex plans resumes, the dividend yield of over 7.5% is attractive in our view

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JARDINE CYCLE & CARRIAGE

(NOT RATED; S$48.68; JCNC SP) Number of clients met: 42 Salient Points in Management Presentation: 1.JCC believes low cost green (LCG) cars in Indonesia will be more headline grabbing than actually resulting in a substantial boost to profits. This is because of the low price point and low profitability of these cars. LCG may also boost headline Astra’s marketshare data. In addition there is a risk of the LCG cars cannabilising sales of cars at the higher price points. While Astra will have the first mover advantage, other Japanese car makers also have models at the lower price point. 2. Vietnamese business has suffered from high inflation and political instability over last few years. Sales were down 30% y-o-y. JCC does not expect the situation to improve anytime soon. 3. The heavy equipment business (United Tractors) has not been good as low coal prices triggered coal miners to curtail investment in new equipment. The business was also impacted by price discounting. This resulted from an oversupply of equipment (mainly Hitachi) in China being sent to Indonesia. In addition the coal miners have reduced strip ratios which impacted the contract mining business. Currently operating conditions are ok but there has not been any improvement. Data-points and other guidance made: 1. The group spends about US$0.5bn on replacement/new equipment for its contract mining business and own mines. 2. NPL’s in the vehicle finance business should improve given the imposition of 20% down payment for new car purchases last year.

Three frequently asked questions (and response by management) 1.Do you see any new competitive threats in the Indonesian automotive space? The group does not see any significant threats near term given the group’s advantage from having a large distribution network and local assembly/manufacturing. The South Korean manufacturers such as Hyundai and Kia are trying to enter the market but as they don’t have local production it is hard for the company to gain scale to compete effectively against Astra. In addition the strong growth by Honda last year should not be a concern as Honda was severely impacted by the Thai floods the previous year. 2.Is there any risk of oversupply given increases in 4W production capacity in Indonesia? JCC notes that some of its competitors are increasing production by 10-20% but believes there should be sufficient demand to absorb the increase. Mr Chiew (the CFO) however would be nervous if everyone expanded aggressively. 3.What are JCC’s growth plans? The group will continue to invest mainly in its Indonesian automotive business. They are also looking at automotive opportunities in the Philippines.

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RAFFLES MEDICAL

(HOLD S$2.89; TP: S$2.59; RFMD SP) Number of clients met > 32 Salient points in management presentation 1) Revenue CAGR of 16% since 1994, showing strong performance and relative resilience of the healthcare sector, even in 1998, 2001, 2003 and 2009. 2) Growth through primary care services, expansion of hospital in Singapore. Submitted tender for greenfield hospital in HK. 3) Hospital expansion expected to start in 2013, subject to finalisation of plans, with a 24-month timeframe. Data points and other guidance made: 1) Still in discussion with authorities on a provisional plan approval for its proposed specialist medical centre at Thong Sia building at Orchard. Unsure how long this would take. 2) Bed occupancy still stays at c.50-60%. No guidance on the outlook. Our sense is it is stable, and we should see a low teens growth in financial numbers. 3) Corporates account for about 50-60% of Healthcare services, and one-third of hospitals. Three frequently asked questions (and response by management) 1) How are the doctors compensated and what are their contract terms? Doctors are on contracts, for about two to three years. Compensation via salary, profit share and share options. Profit share based on business division and matrix. Structured to benefit the group. 2) What percentage of patients are foreign? About one-third of patients are international patients as Singapore develops its medical tourism. 3) Funding of expansion. Estimated cost is $80-100m, and met by internal cash at c.$60m and internal cash flow of c.$40-50m/ yr.

RELIGARE HEALTH TRUST

(BUY S$0.90; TP: S$0.97; RHT SP) Number of clients met: 50 Salient points in management presentation 1) Fortis has been growing 6% q-o-q. During crisis, healthcare is relatively resilient. Outlook has not changed since the listing. 2) 96% are operational assets and low risks of development risks. Focused on secondary and tertiary care. Acquired all assets of fortis in India, except one which is pending litigation. Acquisitions going forward are likely to be in India. 3) Gurgaon clinical establishment has agreed upon fees. Expect a ramp up to make up for the expiry of distribution waiver by FY15. In a worst case scenario, distribution could stay the same. Expect DPS to have an upside. Data points and other guidance made: 1) Hedged at 47.28 for FY14, no significant changes since IPO. 2) Average revenue per bed growth of 7-8% per day guided in prospectus. Assumed 17-18% revenue growth from Fortis in model in prospectus. 3) 75% hospital revenue is cash basis, 25% mixture of insurance, pension funds. Three frequently asked questions (and response by management) 1) What will be the driver to increase bed capacity? Depends on the occupancy. First 48 hours account for about 80% of revenue. Depending on needs, it may make increases. Optimal occupancy is about <80%. Occupancy not based on seasonality, except for summer months due to as malaria. 2) How much does bed prices increase by? Tends to track inflation. 3) Rental coverage is 2.6x. Rental on EBITDA cover. Rent as a percentage of reveneue is about 15%. Fortis matured has about 27-28% margins. Stabilisation period is about three to four yrs on average. Shalimar Bagh is about 14 months. 4) Target gearing? Does not envisage going beyond 30-35% in the long term. Currently the gearing is at 6%.

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TAT HONG

(BUY S$1.455; TP S$1.80; TAT SP) Number of clients met: >30 Salient Points in Management Presentation: 1. Growth momentum will continue - management sees improving demand driven by 1) infrastructure spending in Singapore, Malaysia, Thailand, and Hong Kong 2) Australia's O&G projects. Capex plans demonstrates management's confidence. 2. Crane rental rates and utilisation will be on the uptrend fuelled by bouyant crane demand. Current rates are still 15% off its 2008 peak, currently over S$500/month/ton. 3. Competitive advantage will strengthen with the expansion of bigger tonnage crane units in its coming fleet expansion plans. Data-points and other guidance made: 1. Guided sustainable utilisation to be 80%. Targets FY13F/FY14F utilisation to be 75%/80%. Highest ever recorded in a single month was 88%. 2Q13 utilisation was 73%. 2. Rental rates have increased 15% for the past 15 months up till Sept 2012, currently at over S$500/month/ton.

3. Capex is budgeted at S$50-70m for c.40 mobile/crawler cranes. Tonnage to increase by 10,000 tons. 4. Payback period for an average crane is approximately three to four years. Three frequently asked questions (and response by management) 1. Competition - Competitors will take longer time to reach TAT's scale since they have smaller fleet sizes, lower and limited tonnage range. TAT has higher capacity cranes and a fleet size that cannot be replicated overnight. TAT's more robust fleet management ensures it delivers most large contractors' requirements on a regional basis. Also there are not many players in the market. TAT is the region's no.1. Closest competitors are Tiong Woon (fleet size 200), JP Nelson, Hwa Tiong. 2. Utilisation rates - See data points and guidance 3. Visibility of contracts and contract lengths - Real time visibility is six months. Rental demand is typically pre-booked up to six months ahead for an average rental period of three to six months. Australia's O&G market averages one to one-and-a-half years in rental period.

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HK/CHINA CORPORATES

CC LAND

(HOLD HK$3.00; TP: HK$2.00; 1224 HK) Number of clients signed up: c. 30 Salient Points in Management Presentation: 1. FY13 is a turnaround year for CC Land from loss making to profit making. 2. CC Land expects to enter into a stable growth stage of 20% to 30% per annual growth in both presales and completion. 3. CC Land took opportunities to buy land in year-end 2012. The company is looking for opportunities to enter Xi'an and Kunming in 2013. It had a project in Kunming, but it has been completed. Therefore, CC Land is looking for a new project there. Data-points and other guidance made: 1. FY13 contracted sales target has not been set but should be at least Rmb8.5bn compared with FY12's over Rmb7bn. 2. 1.5m sm saleable resources in FY13. CC Land's ASP of residential units may go down slightly to c. Rmb7k/sm from FY12's c. Rmb8k/sm due to more mass market products, while commercial portion with a higher ASP may compose a higher percentage than in FY12. 3. Net debt ratio by end-FY12 is expected to maintain low at c. 20%. Three frequently asked questions (and response by management) 1. Please give market updates in China especially in Chongqing. Chengdu market was picking up in 2H12 in general. CC Land did well in Chengdu due to the rolling over of more mid-end smaller sized units to meet the end-user demand. Chongqing has no HPR policy but the market was very weak during Sep 2011-Feb 2012 as buyers were waiting for more policies. After that, end-user demand started to enter the market when policies looked stable. 2. Any worries about policy coming back? As affordability in Chongqing and Chengdu is at a fair level at 6-7x of people's annual income. There is not much need for further tightening. We only expect to see 5% to 10% growth in price in 2013 which is acceptable in the government's view. 3. What's the expected margin of the new land acquired in Nov/Dec 2012? c. 20% based on the current selling price. It can be higher in later phases when prices go up.

CENTRAL CHINA

(BUY (UR) HK$2.85; TP: HK$2.39 (UR);

832 HK) Number of clients signed up: c. 30. Salient Points in Management Presentation: 1. Central China will continue to focus on county level cities in FY13. As Henan has been designated as the core of China's Central Economic Development Zone. Urbanisation progress will speed up and more investments from the central government is expected to be in place. Central China's strategy is consistent with this macro trend. 2. Construction pace may further speed up in FY13. High asset turn is what the company will continue to focus on. The projects acquired in FY12 may potentially enter into the pre-sales pipeline. 3. Cautious positive view on the Henan market driven by volume growth. ASP could be higher but not necessarily. Central China will continue to gain market share. Data-points and other guidance made: 1. Although the company has not set the FY13 sales target yet, Rmb12bn is a rough estimate which represents around 20% y-o-y growth based on a Rmb20bn saleable resources and 60% sales-through rate. Among the saleable resources, around Rmb13-14bn are new launches. 2. Net debt ratio by end-year 2012 could maintain at a level of 50% to 60%. The company will try to remain the net debt ratio stable. Three frequently asked questions (and response by management) 1. Any plan to do equity fund raising or debt? It is an option, but the company needs approval from its major shareholder (Capitaland) to do any share placement. As Capitaland will be diluted, it is hard for them to approve the deal. Debt issuance could be a way to lower its lending cost now. But the company does not seem to be going down that route. 2. Any potential impact from CB? As CB conversion price is HK$2.98/share, the current share price has been close to that. Management plans to wait for a higher price to convert. If it converts the CB to shares, it could hold over 8% of the

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company's share. This could be an overhang to the share price as the CB holder is a PE firm. 3. How to face the competition from newcomers? The stronger developers will remain strong. Central China is the first developer in Henan to achieve Rmb10bn contracted sales. Central China is better positioned to compete in the province with a larger land bank and ready local teams.

CHINASOFT

(NOT RATED HK$1.81; 354 HK) Number of clients met: c.15 Salient Points in Management Presentation: 1. Urbanisation is +ve to Chinasoft. In the past, it may be difficult for entrants to enter into certain industries. Urbanisation creates IT service demand in second and third tier cities, which is easier for entrants (such as Chinasoft) to tap into. 2. Government is encouraging industry consolidation (i.e. reducing # of vendors) 3. Labour cost remains under pressure. Chinasoft will relocate some staff to the inner part of China. Data-points and other guidance made: 1. Maintain c.25% revenue growth in the next few years. 2. Current utilisation is 85%. 3. Staff turnover rate in FY12 is similar to that in FY13.

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EVERGRANDE

(BUY HK$4.52; TP: HK$4.70; 3333 HK) Number of clients met: 58 Salient Points in Management Presentation: 1. 2013 saleable resources will be c: 26m sm. This may translate into 161bn, assuming ASP of 6K. DBSV estimate: c. 100bn pre-sales to be achieved, assuming 62% sales rate, similar to last year. 2. Lowering gearing is still its top priority. Target to lower the gearing to below 80% by end-13. 3. 2nd Tier city contribution to 2013 pre-sales may increase from 44% to above 50% as a result of more acquisitions in Tier 2 cities in 2012. This should help support ASP. Data-points and other guidance made: 1.It launched 58 new projects in 2012; 2013 new launches may be >50 2.Mgmt is exploring different funding channel, such as doing more JV to minimise risk and lower capital involvement Three frequently asked questions (and response by management) 1. What is the likely pre-sales target for 2013? 2. Has mgmt undertaken any actions to improve market perception about its corporate governance? 3. What's the plan to lower the gearing other than selling more?

FORTUNE REIT

(BUY HK$6.40; TP: HK$6.97; 778 HK) Salient point in mgmt presentation 1) AEI remains one of the growth drivers. AEI at Jubilee Square is underway. Fortune REIT plans to do another AEI at Ma On Shan Plaza in 2013 and study the feasibility of AEI for Belvedere Square. 2) Fortune REIT continues to explore acquisition opportunities. 3) Lease expiry in 2013 will concentrate on Metro Town and Fortune City One Data point and other guidance 1) In 9M12, rental reversion was 20.1pc 2) Less than 5 pc of revenue from turnover rent 3) Cost to income ratio should be maintained at 28pc or below Three FAQs 1) Does Fortune REIT intend to expand outside HK or buy industrial properties and convert into retail use? No 2) Does Fortune REIT plan to dispose of any asset? No 3) Outlook of retail market? Remain positive

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FRANSHION

(BUY HK$2.93; TP: HK$3.37; 817 HK) Number of clients met: 49 Salient Points in Management Presentation: 1.Presales may see 20% growth from 10.4bn achieved in 2012, but this may include Rmb1.8bn sales carried forward from Shanghai Shipping Center 2.Changsha sales may further go up to 900mu with higher AV 3.Commercial prop sales contribution to 2013 will drop substantially to be c. 30% to 35% Data-points and other guidance made: 1.May still have Rmb 5bn for new land acquisitions in 2013 if gearing is to stay at below 60% 2.Next acquisition targets are Nanjing, Changsha and Chongqing 3 Hotel spin-off may not come through until post 2015 as management plans to grow hotel portfolio further before spin-off Three frequently asked questions (and response by management) 1. What is the pre-sales target for 2013? 2. Planning for the new Shanghai land acquired in Dec2012? 3. Performance of its office and hotel portfolio?

NETDRAGON WEBSOFT

(BUY (UR) HK$11.52; TP: HK$11.46 (UR); 777 HK) Number of clients met: >30 Salient Points in Management Presentation: 1. The Online Games segment is fairly mature but growing steadily and is a good cash cow for the company with c. 42% operating margin. The company is also taking less risk in this business - cancelling six of 12 projects, as online gaming becomes more of a miss than hit business. 2. The company's next focus of growth is on its Mobile Internet, which has seen its revenue grow at an exponential rate from less than Rmb1m in 3Q10 to over Rmb86m in 3Q12, and the growth momentum is expected to continue. This comes on the back of the total installation base rising from less than 5m in 3Q10 to nearly 180m in 3Q12. 3. The company has recently announced plans to spin-off its mobile internet business on HK GEM, which awaits shareholder approval Data-points and other guidance made: 1. The Mobile Internet business is expected to continue growing strongly, and could double or even triple its revenue in 2013 2. The company is the market leader in both the iOS and Android segments. Three frequently asked questions (and response by management) 1. What is the competitive landscape for Mobile Internet? NetDragon has a huge lead as China's preferred app distribution platform and as an experienced player, will be looking to hold on to this lead. Attempts by hardware players to lock-in users to their eco-system have generally not worked out well (especially in China). 2. Dividend policy? The company is in a strong cash position and is highly cash generative, it has been paying out at least 50% earnings and should continue. 3. Can smartphone penetration rates in China improve further? There is definitely room for further growth as China's smartphone penetration rate is only 60% of South Korea (28% vs 52%) and with lower end smartphones becoming more readily available (even Apple is rumoured to be introducing lower end models), smartphone penetration rate should continue to improve strongly in China, to help underpin the company's mobile internet business' growth.

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Our take Although ND’s share price has almost doubled since our initiation, we still see attractive upside at current valuations (only 0.23x PEG against 38% 3-year CAGR) and view it as the best SMC proxy to gain exposure to the mobile internet market. We lift our SOTP TP by 34% to HK$11.46 on greater mobile internet earnings contribution, BUY.

SHUI ON LAND

(HOLD HK$3.86; TP: HK$3.56; 272 HK) Number of clients signed up: c. 40 Salient Points in Management Presentation: 1.Residential subscribed sales in FY12 was c. Rmb8.4bn after including Rmb2.7bn Shanghai RHXC subscribed in Dec. Shui On Land missed its residential sales target of Rmb10bn mainly due to slow sales in Chongqing and Dalian. 2. The company has started to put more of its resources into Shanghai for relocation and construction as the market is relatively strong. Further launches of Shanghai RHXC will be in 2Q and the following months. 3. Shui On Land earning visibility in 2013 is not low. It has Rmb6.4bn unbooked sales and Rmb2.7bn subscribed sales by end-FY12. This means total unbooked sales have been up to Rmb9bn. Data-points and other guidance made: 1. Rmb12 to Rmb13bn residential saleable resources with Rmb5.5bn in Shanghai. This includes Rmb2.7bn have been subscribed but not contracted in Dec 2012. Enbloc sale of Rmb6bn to 8bn is under negotiation. 2. Net debt ratio has been lowered after issuing the perpetual notes. We estimate it may be below 80%. Three frequently asked questions (and response by management) 1. Why was Chongqing sales slow? Shui On Land didn't cut prices for the Chongqing project. It tried to cut prices in 2008 when the market was difficult, but didn't boost sales significantly. And it made customers have less confident about the project. The company decided not to cut price in this round of market downturn, given the project's luxury nature. 2. Financing plan in 2013? Shui On Land will have two major debt due in 2013. One is Rmb2.7bn CB puttable in FY13 with a conversion price of HK$4.5/share. Another one is Rmb3bn senior notes. Shui On Land may issue new debt to refinance them. 3. Why did the company choose to issue the perpetual bond? The action is mainly to manage the company's gearing ratio. As the perpetual bond will be treated as equity, net debt ratio can be lowered effectively. In the meanwhile, it is callable in five years. It gives Shui On Land an option to reduce the debt in the future.

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SITC INTERNATIONAL HOLDINGS

(BUY HK$2.68; TP: HK$2.90; 1308 HK)

Number of clients met: >30 Salient Points in Management Presentation: 1. SITC is not just a container liner, but an integrated logistics player with 60% of earnings coming from land logistics, with a unique focus on solely Intra-Asia trade. Land logistics include freight forwarding, ship agency, customs clearance, warehousing etc. 90% of its land logistics business is related to its container business. 2. The company's high frequency (>300 weekly services) and high density model (over 50 routes and 48 ports in Asia), enables them to offer a product and service that is superior to most, allowing them to charge higher prices (by a few percent) whilst customers remain sticky 3. In the longer term, SITC is targeting the third party logistics (3PL) market in China as another further engine of growth for the company. Data-points and other guidance made: 1. The company expects to order another 15 vessels in 1H13, together with the one confirmed, would receive these in 2014 and 2015. Expected CAPEX in 2013 is US$100m to US$200m, most of which would be going to deposits for these vessels. 2. Company is targeting 10% volume growth in 2013 with stable ASPs. Overall margins should hold steady as lower vessel costs from the 13 owned vessels delivered in 2012 should help protect margins.

Three frequently asked questions (and response by management) 1. Who are SITC's largest clients? SITC has over 10,000 clients with none exceeding 1% of revenue. Most of SITC's clients are involved in high value products such as FMCG, chemicals, apparel and textiles and consumer electronics. Some of their biggest customers include Toyota and Canon. 2. Does SITC have a dividend policy? SITC does not have an official dividend policy, but has been steadily paying dividends in the last 10 years (36% payout in 2010, and 42% payout in 2011, and the eight years before IPO in 2010). Management is also incentivised to pay dividends as key management and employees own 75% of the company. 3. Is the company worried about competition, especially amidst over-supply generally? Competition has always been firm in this sector but SITC has been growing at a CAGR of 10% since its founding 20 years ago, using its unique business model (see points 1 and 2). Whilst ASPs have been affected as seen in 2010 and 2011 results due to over-supply generally, it would be difficult for competitors to replicate its model and services completely (SITC's fleet averages 1,000 TEUs per vessel which fits a high frequency, high density model whereas attempts to employ larger vessels on such a model may not be profitable), and SITC has remained fairly profitable whilst other major liners have been loss-making. Our take We believe SITC will continue to benefit from robust intra-Asia trade demand and that it has great potential from its land logistics business. SITC offers 16% ROE and a decent ~5% dividend yield, but is still trading far below its historical average valuation. We have a BUY call with HK$2.90 TP (1.2x FY13 P/b)

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SUNAC

(NOT RATED HK$6.73; 1918 HK) Number of clients signed up: c. 20 Salient Points in Management Presentation: 1. Sunac's landbank is valuable, although the size looks not large. As of now, Sunac has 14m sm landbank only, but it can turn into over Rmb200bn saleable resources. If factoring growth, the landbank is sufficient for three to four year's development. 2. The management emphases risk control by (1) focusing on a limited number of key cities with high market depth and growing population (2) controlling sales proceeds collection (3) avoiding mistakes in land purchases which can cost the company more than it appears to be, if taking the opportunity cost into consideration. 3. Sunac will be less aggressive in using leveraging to buy land in FY13, but may enter one more new cities within existing regions. Data-points and other guidance made: 1. FY12 sales-through rate based on launched saleable resources was over 75%, compared with c. 50% based on that with sales permit. 2. Pre-sales target in FY13 is Rmb45bn (Rmb30bn on an attributable bases) based on RMB80bn to Rmb90bn saleable resources. 3. Management expect net debt ratio by end-FY12 to be less than 100% and is comfortable with a100% net debt ratio level.

Three frequently asked questions (and response by management) 1. Whether to raise fund from equity? Company still has over Rmb10bn cash on its balance sheet. Management views the share price still has upwards potential and may wait for a better price to do a placement. As Sunac will be less aggressive in purchasing land, there is no need to place shares at present. 2. Will CDH and Bain further sell down their holdings? CDH and Bain still hold c. 10% of the company's shares. They indicated they won't further sell when Sunac communicated with them recently. However, Sunac management believes its reduction of the holdings will improve stock liquidity and welcome the sale to remove the overhang. In addition, private equity's tenure is usually five to seven years. CDH and Bain may need to get out before 2015 if we assume it will pull out upon the fund's maturity. 3. How is the cooperation with various partners doing? Sunac leverages on partners' financial resources and various expertise, while Sunac's strength is on the market knowledge side and property pricing side. In several cases of the JV projects, Sunac priced the projects better than their partners' expectations without lowering the sales-through rates.

[email protected] FooSuan Yee 05/23/14 06:06:11 AM IMC INVESTMENTS PTE. LTD.

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TCL COMM

(FULLY VALUED HK$2.53; TP:1.40; 2618 HK) Number of clients met: c.15 Salient Points in Management Presentation: 1. TCLC is planning to leverage the strong TCL TV brand and distribution network in China to sell its smartphones. 2. The demand for mid-end smartphone (ASP at c.US$200) is building up (from replacement), compared with mostly entry level smartphones for first time smartphone users one to two years ago. 3. Management believes that overseas market is where it can make profit. China market is simply too competitive. Data-points and other guidance made: 1. Expect turnaround in 2Q13 or 3Q13 2.4G phones will be available this year 3. Currently entry level smartphone margin was as low as 13-15%, but the target is 20% for mid-end smartphones. Three frequently asked questions (and response by management): 1. How does TCLC’s smartphone differentiate from others'? TCLC is not competing with Apple or Samsung. Cost is lower than for foreign brands. As compared with ZTE and Huawei, a strong overseas distribution network (and Alcatel branding) is the advantage. 2.What is the business strategy for FY13 to turn around the business? Improving smartphone’s “time-to-market” to secure ASP and margins. 3. When should we expect to see the business turn around? 2Q13 or 3Q13. Recommendation: FULLY VALUED; TP: HK$1.40

YANLORD

(HOLD S$1.605; TP: S$1.24; YLLG SP) Number of clients signed up: c. 40 Salient Points in Management Presentation: 1. Management agrees with the market view that the company needs to improve its asset turn. It will try to speed up construction gradually in FY13 to improve its asset turn. 2. Investment property (IP) income may see high growth in 2013 given improvement in occupancy rates as three investment properties are maturing. 3. May restart landbanking in FY13. Yanlord didn't buy any land in FY12. In FY13, Yanlord may considering buy some land, especially in Nanjing. The Nanjing market performed the best among the cities Yanlord has a presence in, and Yanlord's land bank in Nanjing has dropped in the city. Yanlord may try to replenish it. Data-points and other guidance made: 1. Yanlord maintains its FY13 sales target of Rmb13bn which it set in Nov 2012 and expect a balanced contracted sales split between1H 13 and 2H13. 2. Four new projects will be launched for sale in FY13, namely: Shenzhen Longguang project, Chengdu Riverbay, Tangshan Nanhu Eco city, and Zhuhai Marina Center. If the construction pace allows, three more new projects in Shanghai ( Qingpu Xujiang Town, Yanlord Eastern Garden, and Tang Dong Nan) may be added into the pre-sales pipeline towards year end in 2013. Three frequently asked questions (and response by management) 1. Should we expect further tightening as ASP may be back to an upward trend? Management believes local government's financial needs to invest in public projects create resistance to further tightening. Management expects only a gradual increase in ASP and believes this will not trigger further tightening. 2. Any financing plan? No urgent need to raise funding at this stage despite of the wide-opened debt market and good share price performance. Unlike 2012, Yanlord has no major debt to refinance in 2013. Onshore bank borrowing is not hard to get either. Unless there is good land to buy, Yanlord will not raise money through either equity or debt.

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3. Margin expectations. Management expects a stable recovery in margin. In 2012, most of the GFA delivered was the first phases of the projects which enjoys lower margin. In 2013, the impact will be still there but less, while in 2014, the management expects a recovery in margins.

YUEXIU

(NOT RATED HK$2.69; 123HK) Number of clients met: 35 Salient Points in Management Presentation: 1.2013 salable resources may grow by >20%. This may imply 20% pre-sales growth, assuming similar sales rate of 2012, in our view. 2.Saleable resources outside of Guangdong may go beyond 20% in 2013 3.More JV has been done in 2H for new land acquisitions to minimise execution risk in new cities Data-points and other guidance made: 1.Average funding cost in 2013 will further go down from 7.5% in 1H12 due to the disposal of IFC, more offshore term loans being done, and pay-down of trust loans in China. 2. By 2015 pre-sales contribution from outside of Guandong my go beyond 30 to 40% from current 12%. Three frequently asked questions (and response by management) 1. Pre-sales target in 2013? 2. Gross margin in cities outside of Guangdong? 3.Assets to be injected to Yeuxiu REITs over the next few years?

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YUEXIU REIT

(NOT RATED HK$3.86; 405 HK) Number of clients met: c. 20 Salient Points in Management Presentation: 1. Guangzhou IFC is expected to see improvement in occupancy rate and rental income in all the four components (office, retail, hotel, service apartment) in 2013 2. Yuexiu REIT will focus on the operation of Guangzhou IFC and consolidation of the management team in 2013 rather acquisitions. Data-points and other guidance made: 1. DPU 2012 is expected to be close to the Rmb2.063 as what the company illustrated in the circulation of the GZ IFC acquisition deal. 2. Maintenance CAPEX in 2013 may be higher than previous years due to renovation of 2F of GZ White Horse. 3. Potential interest cost saving of Rmb45mn if it can replace the loan brought forward from GZ IFC deal with lower cost financing.

Three frequently asked questions (and response by management) 1. How is the Guangzhou office market doing? New supply of office in Guangzhou has peaked in FY12. It put some pressure on rents in the market. But going forward, occupancy rates may start to decrease as new supply drops. Rent is expected to start to grow. 2. What is the acquisition plan? In FY13, Yuexiu REIT will only focus on the performance of GZ IFC. However, going forward, Yuexiu REIT will try to acquire one new asset every two to three years from either the Yuexiu Property or 2nd parties. As the market cap and financial capability of Yuexiu REIT have been improved after the GZ IFC deal, Yuexiu REIT is better positioned to acquire assets from external sources. It also considers acquiring asset outside Guangzhou, including Beijing, Shanghai, Hong Kong, and Macao. 3. Any updates on rental and occupancy status of GZ IFC? At present, the office portion sees c. 70% occupancy rate and average rent of c. Rmb250/sm/month. The retail part sees an occupancy rate of c. 96%. Four Seasons and Service Apartment portions see occupancy rates of c. 38% and 10%. All improved from the level when Yuexiu REIT acquired it. Office portion is expected to see further pickup in occupancy rate to 80% to 85%, which is the major rental growth driver for FY13.

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KOREA CORPORATES

COM2US

(BUY KRW46,900; TP: KRW70,000;

078340 KQ) Number of clients met: >25 Salient Points in Management Presentation: 1. The company’s strong growth in 2012 is bolstered by higher smart phone penetration globally including in South Korea (58%, US 48%, Japan 31%, China 24%) 2. It has focused on Smartphone games and Freemium (free to play) and social games which offers broader audience/mass market and longer life cycle. 3. Domestic and overseas revenue contributes 65%, 35% in 3Q12, respectively and overseas’ revenue is strengthening its growth. US accounts for 50%, Japan accounts for 15% and Taiwan contributes 10% to the total overseas revenue. Data-points and other guidance made: 1. The company had launched 24 games in 2012 and will launch 50 games (33 in-house games, 17 publishing games in 2013. Especially 11 games will be introduced to the market in 1Q13.

2. The company will increase new game launch in the messenger platform (KAKAO talk in Korea and Line in Japan) to 16 games in 2013 from four games in 2012. 3. To increase margins, it will enhance use of the company’s platform ‘Com2us HuB’, which is able to save the commission payment to the platform such as Apple Store, Google Play and Messengers. Three frequently asked questions (and response by management) Investors asked about the company’s guidance for 2012’s and 2013’s results, but the company hasn’t suggested any guidance. However, according to its IR team, our analyst estimate would be acceptable. Our analyst estimates on 2012 are KRW 78bn revenue and KRW 17bn operating profit. For 2013, revenue, OP and NP are KRW110bn, KRW28bn, respectively. Our take We maintain our BUY call with KRW70,000 TP since the company should be the largest beneficiary of the strong growth in the mobile game market.

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KOLONG LIFE SCIENCE

(NOT RATED KRW 84,600; 102940 KQ) Number of clients met: >25 Salient Points in Management Presentation: 1. Expect to register c KRW34 bn revenue in 4Q12, but the operating profit would decline slightly thanks to one-off costs with the profit sharing with employee. 2. Pharmaceutical business accounts for 43% of total revenue and is the fast growing segment posted 25% growth for last two years. 3.This is also most profitable segment in the company, the operating margins in 2012 is estimated to be a 31.7%. Data-points and other guidance made: 1. It has been maintained long-term strategic partnership with Japanese clients such as Simitomo, which account for 85% of its pharmaceutical products’ revenue. The company is sole overseas supplier of API (Active Pharmaceutical ingredient) for Japanese pharmaceutical companies, which are trying to diversify its procurement to include overseas suppliers after the earthquake. 2. In 2013, the company expects to register a KRW140bn revenue in the pharmaceutical biz from estimated c KRW60bn in 2012 thanks to commercial operation commencement of new API ‘s plant in Chungju Korea. Of note, Chungju plant is projected to generate a KRW200bn in case of full utilisation. 3. The company is at the 2nd phase of clinical trial of “Tissuegene-C”, a biological drug for degenerative arthritis, which is expected to commercialise in 2015. Three frequently asked questions (and response by management) The sensitivity of the earnings on KRW against JPY : When every 1KRW/JPN appreciates, its OP margins is estimated to drop 3%pt in the pharmaceutical business. It will consider the selling prices’ hike when forex of KRW/JPN reaches 10. Our take The company is yet our coverage and trading at 20x P/E and 4x P/B based on FY12 consensus estimates. The outlook on the company seems to be promising.

KOOK SOON DANG BREWERY (BUY KRW7,340; TP: KRW11,000; 043650 KQ) Number of clients met: >30 Salient Points in Management Presentation: 1. Beer and Soju have gained the market share during Jan ~Sep 2012 by registered sales growth of 5.7%, 2.3% y-o-y, respectively. While Herbal wine and Makgeolli (Korean rice win) are estimated to lose market share in 2012. This is mainly thank to extraordinary hot temperature during the summer (trigger for beer sales growth) and economy slowdown (trigger for soju sales growth). 2. Its Draft Makgeolli products was the key driver for the top-line growth by registered a 53.3% growth in 2011, However the revenue of Makgeolli has declined 4.6% by 3Q12 affected negatively from hot temperature in the summer. 3. The company has launched new product called “iCing”, which is iced Makgeolli using super-cooling technology. The product make of domestic rice and grapefruit juice targeting the young generation. Also it launched “New Bekseju (a herbal wine)” reformatted and repackaged in Sep 2012. Data-points and other guidance made: 1. Despite new product launches, its 4Q12’s revenue is likely to decline q-o-q and y-o-y because of slow market penetration, affected adversely from the faulty bottle for New Bekseju. (This bottle supplier is accountable, and has no direct negative impact on the company). 2. The company is targeting KRW 126bn revenue and KRW15bn operating profit (more than double) in 2013, given that cost reduction due to i) the price decrease of rice and packaging material ii) decline in sales proportion of the products with higher COGS. 3. The company expects visible top line growth from new products since 1Q13. Three frequently asked questions (and response by management) Frequently asked questions mainly revolve around the above key points. Our take We maintain our BUY call with KRW11,000 TP at the anticipation of turnaround in 2013.

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LG LIFE SCIENCE (BUY; KRW55,500; TP: KRW65,000; 068870 KS) Number of clients met: >25 Salient Points in Management Presentation: 1. Expect to double the revenue in 2015 from a KRW341bn in 2010 driven by the four projects which are DPP-IV (anti diabetic drug), Combo-vaccine, hGH (human growth hormone) and other generic business partnered with Pfizer in Korea. 2. The biggest contribution in near term will be anti–diabetic drug (project of DPP-IV), whose global market is estimated c US$34bn in 2011 and to grow US$44bn in 2016. 3. During 2009 to 2013, the fixed costs including R&D costs would increase by 61% or KRW35bn, which is the reason to hamper earnings growth. However, the company will see V-shape rebound in 2014 following commencement of commercial sales of diabetic drug.

Data-points and other guidance made: 1. The company has made a contract with multinational pharmaceutical company Sanofi-Aventis to export an anti-diabetic drug, which will deliver c KRW100bn profits from the initial down payment, milestone payment, and bonus fees. Besides it, the double digit royalty income and manufacturing margins are expected when the sales of drug commence. 2. Among it, the initial payment of c KRW10bn would lift 4Q12E earnings, which is the reason for the recent strong share prices hike. 3. In 2013, the company will make partnership with global drug distributors and pharmaceutical companies to build the sales channel for new drugs under development including a diabetes drug, hormone and vaccine. These would be positive share price catalysts. Three frequently asked questions (and response by management) Frequently asked questions mainly revolve around the above key points. Our take We raised our TP to KRW 65,000 from KRW53,000 on 3 Jan factoring in the contract with Sanofi-Aventis. We retain our BUY call on the counter.

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MALAYSIA CORPORATES

BOUSTEAD HOLDINGS (BUY RM 4.94; TP: RM6.40; BOUS MK) Number of clients met: 21 Salient Points in Management Presentation: 1. Budgeting CPO prices to an average of RM2700/tonne in 2013, with prices expected to trend higher in 2H. FFB production should remain flat in 2013. 2. BHIC or its heavy industries division should see more contribution from the new OPVs in FY13. Upside may come from MRO contracts for Malaysian Navy helicopters. 3. Pharmaniaga contributed 15% to group profit in FY12. While the business is predominantly driven by government concessions (75%) it is looking to expand to the Middle East (halal market) and Vietnam. Data-points and other guidance made: 1. The focus for plantations remains planting new seedlings to improve FFB yields over the longer term. FFB yields are now 21 tonnes/ha and should continue to improve to 24 tonnes/ha in the medium term. 2. Internal pretax profit target is to reach RM1bn in the next one to two years. 2012 will be a record year for Pharmaniaga but no specific numbers were given. 3. BHIC has provided for all potential write-downs from its commercial projects and should be profitable this year. Profit should be in the region of RM50 to RM100m. Three frequently asked questions (and response by management): 1.Impact of CPO export tax? Negligible now. 2.When will work on Cochrane development commence? So far, 12 acres have been bought from LTAT and work will commence in April this year. There will be further land acquisitions from LTAT. 3.How sustainable is the property land bank? Boustead has enough land banks to last another 10 to 15 years. This is not withstanding potential new land banks from Batu Cantonment and plantation land banks which may be converted for development use.

DRB-HICOM (BUY RM2.70; TP: RM3.35; DRB MK) Number of clients met: 30 Salient Points in Management Presentation: 1. Proton turnaround underway with rationalisation of distributorships, collaboration with Honda and tiering of autopart suppliers. DRB is looking to relocate the Shah Alam facility to Tanjong Malim where the prime land in Shah Alam can be redeveloped. 2. Will be more aggressive with property launches in 2013 with new CEO at the helm. Glenmarie Gardens in Johor (GDV RM8bn) is slated for launch in 2014 and potential land sale is a possibility. 3. Services business particularly Puspakom, Alam Flora and KLAS have a lot of room for growth. DRB has proposed to the government that all private vehicles above 10 years undergo inspection. Alam Flora has expanded to Kelantan and Terengganu. KLAS will benefit from the opening of KLIA2. Data-points and other guidance made: 1.Proton is for now the most vulnerable business but it is still profitable and can stand alone. The key to turning it around is platform or engine sharing with other car makers. 2. Positive on the high-end hybrid auto segment with the eventual launch of Audi A6 hybrid. This segment benefits from a favourable tariff structure for below 2000 cc. 3. Since the opening of the Lotus showroom in Malaysia, it has sold 15 cars. Current production for Lotus in UK is 2,000 units (out of 8,000 capacity) and will need 4,000 units to breakeven. Management believes the key to turning around Lotus is to transform it from a 'gentleman's sports car' to a 'lifestyle sports car' catering to a larger segment of the market. Three frequently asked questions (and response by management): 1. How true are the rumours of privatization at between RM3.50 to RM4.00/share? As far as management is concerned, this is a shareholder issue and could arise from the extension of the recent privatization of Tradewinds. 2. Will you increase your stake in POS? Not at the moment as it

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would trigger a MGO. 3. How long before can Proton find a new platform to leverage on? It is early days but hopefully this can be done by this year. The Perdana replacement model is underway and will happen this year but it will be a rebadged vehicle.

EASTERN & Oriental (HOLD RM1.58; TP: RM1.80; EAST MK) No of clients met: ~30 Salient points in management's presentation: - 5.1b GDV launches in Penang, KL & Medini to support earnings growth. - On track to achieve KPIs. Data-Points and other guidance made: - New three-year plan to be unveiled soon. - Andaman condos at Seri Tanjung Pinang selling price touching a record 1700psf. - Medini maiden soft-launch is in Mar (terrace ~RM800k). Three frequently asked questions (and response by management): - Sime's contribution so far? (two BOD seats, collaboration projects still under discussion). - Penang property trend? (Prices have increased strongly but increasingly many of the buyers are foreign). - STP Phase 2 status? Pending final approval likely after elections (the masterplan already approved in principal), reclamation of 740 acres to be done in stages -- cost RM130-150psf.

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HARTALEGA (HOLD RM4.95; TP: RM4.70; HART MK) Number of clients met: c.15 Salient points in management presentation: 1) Demand for nitrile gloves will continue to remain strong. Nitrile gloves (sales volume) grew >20% y-o-y in 2012, outpaced natural rubber latex gloves which grew less than 10%. 2) Key focus market (Europe is the growth area), while it will also build its OBM brand in Australia, China and India. 3) The NGC project and its potential growth and contribution. Data points and management guidance: 1) Target revenue growth in FY14 is 20%. 2) Expect raw material nitrile prices to move up slightly in 2013. 3) Margin will be flat for FY13, followed by a slight decline in FY14. Three frequently asked questions (and response by management): 1) Concern on access capacity in nitrile gloves (industry glut)? Nitrile glove demand will continue to grow strongly as there is still room for expansion especially in Europe and emerging markets. 2) Will the additional/access capacity erode margins? Hartalega may lower ASP due to competition but improving line speed will sustain competitiveness and support margins. 3) How strong is the competition from China? Malaysia manufacturers have a head start in the glove industry (innovation and R&D), coupled with costs advantages in raw materials, heat/energy and labour. Most of the gloves manufactured in China are PVC gloves and non-medical grade, and hence are not in direct competition with the Malaysian manufacturers which are mostly medical grade.

MMC CORPORATION (BUY RM2.70; TP: RM3.60; MMC MK) Number of clients met: 15 Salient Points in Management Presentation: 1. Malakoff is to be listed by 2Q13. This is positive for MMC's balance sheet as its stake will be reduced from 51% to an associate stake. It is targeted to pay 50% to 75% of PAT in dividends. About 90% of proceeds will be used to pare down debts. 2. The extension of Segari PPA for another 10 years, acquisition of Hicom Power and the ongoing construction of the additional 1,000 MW in Tanjong Bin should be positive for Malakoff's listing. 3. PTP's expansion of berth 13 and 14, costing c.RM900m, will give it another 1.5m to 2m TEUs by 2015. Johor Port is also looking to build a dry port moving some capacity to the hinterland. Data-points and other guidance made: 1. Looking to conclude another 200 acres of land to be leased to two new investors in Tanjong Bin this year. 2.Post listing of Malakoff, MMC should own 35% to 40%. Internal targets are to double current generation capacity from 5020 MW to 10,000 MW. 3. Ports profits will grow by 10 to 15% in 2013. Three frequently asked questions (and response by management): 1.How is the progesss of the MRT contract? It is progressing well with tunneling work starting in 2Q13. Should be 25% completed by end 2013. 2. What is the estimated market cap for Malakoff? Newspaper reports have quoted numbers north of RM10bn. 3. When are the other MRT lines to be awarded? Likely after elections in 2H13.

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RHB CAPITAL (BUY RM7.83; TP: RM8.70; RHBC MK) Number of clients met: 13 Salient points in management presentation: 1. Need to leverage on retail which can be higher yielding - RHB Easy allows for leveraged unit trust loans (ASB); the bank has revisited auto loans now that pricing has become more rational. There is currently an exclusive tie-up with Tesco for RHB Easy kiosks and a partnership with Pos Malaysia for similar functions. 2. Regional expansion is needed; taking the wholesale banking route would be easier than to attempt to do retail banking for selected localised markets. This is the basis for OSK's acquisition. With OSK, RHB Cap would be able to tap on regional distribution channels such as Singapore, Indonesia, Vietnam, Thailand and Hong Kong. On its own, RHB Bank has a presence in Singapore (seven branches), Thailand (one branch) and Brunei (one branch). 3. 2013-15 would be years in which RHB Cap plans to build out its regional connectivity and capabilities. This would be spearheaded by its acquisition of Bank Mestika in Indonesia. RHB Cap has re-applied to negotiate for a 40% stake in Bank Mestika (previously 80%) after new rules released by Bank Indonesia. RHB cap is hopeful it can receive approvals by mid-year. The acquisition will be funded by a rights issue (hopefully to be launched in 3Q13 pending Bank Indonesia granting an approval). Data points and other guidance made: 1. Consolidated capital ratios (post Basel III) are guided at >8% (Core Equity Tier 1), > 9% (Tier 1) and >13% (Total CAR). 2. Loan-to-deposit comfort level is at 85-90%. 3. NIM to likely slip by another 10-15bps mainly from deposit competition. (Firmer 2013 targets will be disclosed after the release of FY12 results by end Feb 2013).

Frequently asked questions (and management's response) 1. What is the rationale for acquiring OSK? It is to gear up its presence to build up fee income for wholesale banking and for improving regional distribution channels. In addition, it also aids in complementing RHB Cap's largely skewed institutional customer base to one with OSK's retail customer base. 2. Would RHB Cap be able to hold up its competitive advantage for its RHB Easy franchise? RHB Cap's current tie up with Tesco and Pos Malaysia puts it to an advantage. The key strategy to form RHB Easy was to create a 'convenient' banking platform rather than aim to garner deposits. RHB Easy's key selling point is the loans to ASB (unit trust). RHB Easy offers six simple products. 3. How would these acquisitions (OSK and Bank Mestika (pending)) affect capital an ROE? These acquisitions are/will be equity funded. For OSK, the acquisition was largely funded via a new 245m share issuance which diluted ROE by c.50bps. In return OSK owns 9.8% of RHB Cap. Bank Mestika's acquisition (when approved) will be fully funded by a rights issue. The final amount will be determined once price is finalised.

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PERISAI PETROLEUM (BUY RM1.12; TP: RM1.35; PPT MK) Number of clients met: 25 Salient Points in Management Presentation: 1. Looking to focus on production and drilling as their two core businesses going forward. Aggressive asset acquisition will still continue if opportunities arise. 2. New FPSO acquisition will be completed by mid-13, and it will be operational by Jul13. 3. It is looking to acquire its second jack-up rig pursuant to the option granted by Sembcorp which will expird by Feb12. 20% will be payable upfront while the remaining portion will be payable upon delivery. Perisai will be funding the initial 20% via its proposed 10% private placement. 4. Its OSVs are currently under long term bareboat charter till Aug15 with Ezra which will provide good visibility. Data-points and other guidance made: 1.Net profit is likely to grow 10% this year though EPS is expected to be flattish given the dilution from the share issuance. 2. Its investment for asset acquisition is typically based on its 15% IRR benchmark, failing which the company will not embark on the acquisition. Three frequently asked questions (and response by management): 1. Comfortable net gearing level? Between 1.5x-2x. 2. Potential risk issues with production and drilling assets? Technical expertise is a potential problem, but it is mitigated by having the right partners. 3. How confident is it in getting drilling contracts? Import substitution is key. The company sees tremendous growth opportunities given that most of the operating rigs in Malaysia are foreign owned. A preference for locally owned rigs will work to its advantage.

QL RESOURCES (BUY RM3.17; TP: RM4.00; QLG MK) Number of clients met: 13 Salient Points in Management Presentation: 1. Livestock: A new feedmill in Indonesia with a capex of US$10m will be commissioned by April 2014. Food cost to narrow by 2 sen. Added 4 sen to costs recently. 2. Marine: investing in prawn aquaculture in Sabah with RM50m capex over four years; commissioned by March 2014. Acquired surimi manufacturer in Kuantan (5k MT annual capacity) with RM25m capex. 3. Plantation: still waiting for trees to mature. Added stake in Boilermech from 35-40%. Data-points and other guidance made: 1. RM3m impact on livestock and marine segments from a wage hike, RM1m impact on the plantation segment. 2. Targeted FY14 capex of RM200m to be maintained. 3. Double-digit margin by FY14-15 (our FY13F pretax margin at 9.2%) Three frequently asked questions (and response by management): 1. What is the capacity utilisation for surimi production? - Not the ideal method of measuring output, as output will be constantly adjusted to cater for market demand. But generally it’s 70% utilisation for its 75k MT p.a. capacity (single shift) 2. Upcoming trend of egg prices? Expected to be higher due to the culling of chicken during the recent oversupply (seasonal marker trend). 3. Company's dividend policy? 25-30%

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SP SETIA REIT (BUY RM3.14; TP: RM4.10; SPSB MK) No. of clients met: c.40 Salient points in management presentation: 1.Record RM5.1b unbilled sales and strong launch pipeline to underpin earnings visibility. 2. 2012 sales target of RM4b exceeded, targeting 30% sales growth in FY13 to RM5.5b sales. 3. Strategy to sustain growth by strengthening core base in Malaysia, increasing its presence in global cities, expanding its portfolio of investment grade products and investing in populous nations for future growth. Data-Points and other guidance made: 1. 15% placement (to address liquidity and to raise working capital) after expiry of warrants on Jan 21. 2. Battersea officially launched in London yesterday (Phase 1: 800 units, GDV: GBP1b), with strong interest especially from Malaysia. 3.Future gearing will be higher than the current level due to foreign projects i.e. build-then-sell in Australia and London, but partially mitigated by upcoming placement. Three frequently asked questions (and response by management): 1. How long will Tan Sri Liew stay on? (Likely will not extend management contract expiring in early-2015 and will be exercising put option to sell remaining 5% stake by 2014). 2. What has change since MGO? (No change in PNB's two BOD seats, Tan Sri Liew still in full control, minimal key staff leaving). 3. Current property trends in Malaysia? (Primary sales stronger than secondary due to ease of getting loans and developers’ interest-bearing schemes).

SUNWAY REIT (BUY RM1.58; TP: RM1.80; SREIT MK) No. of clients met: c.20 Salient points in management presentation: 1. Loss of revenue from closure of the Sunway Putra Mall in April 2013 for 20-22 months will be offset by expected lower interest costs, contribution from Sunway Medical Centre and major rental renewals on Sunway Pyramid come September 2013. 2.The REIT is aiming for at least one acquisition in 2013, with potential targets ranging from third party acquisitions to sponsor-held assets. Asset pipeline remains strong at c.RM2b worth of completed and under-construction assets. 3.Retail rental growth at Sunway Pyramid is expected to remain resilient as asset enhancements and synergies from surrounding assets (e.g. 1k extra parking spaces in Pinnacle on weekends) improve footfall. Data-Points and other guidance made: 1. Capital expenditure over the next two years is RM300m excluding Sunway Putra Mall refurbishment. 2.Targeting 5% DPU growth CAGR over next three years. 3.Targeting total asset value of RM7b in the next three to five years. Three frequently asked questions (and response by management): 1. What is the occupancy cost on Sunway Pyramid? 18% based on reported accounts. 2. What are the capitalisation rates on assets? 3.Office asset cap rates are 7%, retail assets are 6.2-6.3%, while hospitality assets are 6.7-6.8%. 4. Any debt covenants on the REIT? What is a comfortable gearing for Sunway REIT? Sunway REIT has a 45% asset gearing covenant as a result of its RM1.5b CP Programme. Internal threshold on gearing stands at the low end of the 40% range. - What is Sunway Bhd's stake in Sunway REIT? 37%, but would likely be pared down to 34% post equity placement.

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TOP GLOVE (HOLD RM5.47; TP: RM5.40; TOPG MK) Number of clients met: c.20 Salient points in management presentation: 1) Glove demand will remain resilient, driven by strong growth in the nitrile segment. 2) Capacity expansion is on track. 3) Nitrile mix is growing progressively and the long-term target is to have a balanced mix between natural rubber latex and nitrile gloves. Data points and management guidance: 1) Management will maintain its high volume and low ASP business model. 2) Latex prices should remain stable in 2013. 3) Overall margins will be flat in 2013. Three frequently asked questions and management’s response: 1) What are the challenges in 2013? Higher labour cost and potentially higher gas costs. 2) How does Top Glove narrow the margin gap with Hartalega and how long will it take to achieve this? Via improved efficiency in production process (e.g.: faster line speed) in the next two to three years. 3) What is Top Glove’s margin for natural rubber latex vs nitrile gloves? Average margin for natural rubber latex glove is 15-20%, while nitrile is 20%.

TSH RESOURCES (HOLD RM2.21; TP: RM2.00; TSH MK) Number of clients met: 16 Salient Points in Management Presentation: 1. It will continue to focus on undertaking new plantings in Indonesia. Wakuba Ramet has been planted at its Indonesian estates since end-12 which should be producing fruits in 2016. 2. It is still on the lookout for more plantation land, but the issue is always with pricing as potential vendors are always asking for unrealistically high prices. 3. It is trying to lower its net gearing ratio at the moment which may slow down its expansion plan in FY13 to maintain a healthy balance sheet. Data-points and other guidance made: 1. FFB production has been rather disappointing after the bountiful harvest in FY11, but recent harvests suggest that production has started to recover. It is expecting >20% FFB production growth in FY13. 2. The high palm oil inventory problem will be able to be resolved given more time. It is the cheapest edible vegetable oil that will always make it a better option vis-à-vis its competitors like rape seed oil and soybean oil. Three frequently asked questions (and response by management) 1. When will CPO prices recover? It is impossible to predict the direction of CPO price, but the company is bullish on the long-term prospect of CPO prices, mainly due to the fact that it is the cheapest edible oil. 2. Issues with labour shortage? This is a perennial problem faced by upstream planters, but the company is trying its best to adopt more automation in its operations which will help to lessen the impact to a certain extent. 3. Dividend policy? The company has an unofficial payout policy of up to 30% of its earnings.

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UEM LAND HOLDINGS (HOLD RM2.10; TP: RM 2.10; ULHB MK) Number of clients met: 55 Salient Points in Management Presentation: 1. Land sales will be limited going forward. It will only sell land if the potential customers could bring in something unique to its Nusajaya projects. 2. Impressive land price as well as property price appreciation is a signal to greater prospects in Nusajaya. UEML will be looking at more launches going forward given the strong response for their projects, particularly those in the prime water-fronting Puteri Harbour 3. It will still need to incur a lot of capex going forward despite the robust progress witnessed. It still has 6k acres of undeveloped land available on top of its existing projects in the 4k acres land bank Data-points and other guidance made: 1. It is confident of achieving its FY12 earnings growth target of 40% though sales growth target of 50% will be missed due to several launch delays in Klang Valley. 2. It is keen to expand into other areas as well, particularly in Sabah and Klang Valley. However, Nusajaya will remain its main focus. Three frequently asked questions (and response by management) 1. Concern about oversupply of properties? It is pacing its property launches and will only release products that are in demand. So far, its sales in Nusajaya have been rather impressive. 2. Any risk to its balance sheet? Its gearing level is very healthy at the moment. It has sold RM600m sukuk recently which is mainly utilised for working capital. 3. How can you bring in employment? Gerbang Nusajaya will tackle the problem. There will be a lot of commercial activities as the latest JVs with Ascendas and Peter Lim will make the area a successful commercial hub.

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THAILAND CORPORATES

BANGKOK EXPRESSWAY PLC (BUY BT36.75; TP: BT39.00; BECL TB) Number of clients met: 45 Salient Points in Management Presentation: 1. Traffic growth is very strong at 5.8% in FY12. This is partly due to floods last year. The average traffic volume in FY12 was 1.085m trips. 2. The management guided that the dividend payout will be kept to at least Bt1.3/share, but there is a possibility that the amount could be higher. 3. The company is very conservative on traffic growth in FY13. Their target FY13 traffic growth is less than 2% despite the strong car sales in FY12. Data-points and other guidance made: 1. The company is very confident of a toll rate hike in FY13 of Bt5/trip for FES and SES (sector A&B) unless there is deflation from now until March 2013. 2. The toll rate hike will increase toll revenue by Bt500m per annum and the new toll rate will be effective in 1 Sep, 2013.

3. The management expects CKP to be listed by end of 1Q13 at the earliest. BECL currently has a 30% stake in CKP. The company declined to state the exact new shareholding structure after IPO, but they hinted that it would be closed to 30%. 4. The recent buy more stake in TTW of 11% will be subject to shareholder approval on 6 Feb, 2013. This will change from dividend income previously to associate income. Normally, TTW generates Bt2.4bn of net profit and BECL will get 20% of this. Frequently asked questions (and response by management) 1. What is the mechanism for a toll rate hike? For the existing one, the toll rate will be adjusted every five years and the new toll rate will be linked with BKK CPI. However, the new toll road (Sector B+) that BECL recently signed is not inflation-linked. The toll rate adjustment for Sector B+ will be Bt15/trip every five years. 2. What is your annual maintenance CAPEX? Normally, the maintenance CAPEX for BECL is c.Bt200m-300m. 3. What is your IRR for Sector B+? Based on the FA report the IRR for Sector B+ is 8% but that assumptions is based on a 7% cost of debt and a 30% tax rate. However, the current tax rate is now 20% and the actual funding cost for BECL is less than 4%.

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CENTRAL PATTANA (BUY BT82.25; TP: BT90.00; CPN TB) Number of clients met: 68 Salient points in management presentation: 1. Clear expansion plan. Will open three new malls this year, four in 2014, and three in 2015. 2. Large capex of Bt40bn for 2013-15. These will be funded by internal CF, borrowings, and divestment of assets to property funds. 3. Looking to divest Central Chiangmai and Ramindra into CPNRF this year, and hotels and office assets later. Data-points and other guidance made: 1. Target 15% growth in revenue and 20% in EBIT in 2013. 2. Revenue growth to come from the 7-8% growth in rental rates and 7-8% growth from new malls. Frequently asked questions (and response by management) 1. Size of the 2 assets to be injected into CPNRF? About 7-9bn 2. Any plan to convert CPNRF into REIT? Still have yet to decide, studying the pros and cons now. But CPN will inject 2 assets into CPNRF first within this year. 3. Current occupancy cost of its tenants? 12-15% on average.

CHAROEN POKPHAND FOOD (BUY BT33.25; TP: BT42.00; CPF TB) Number of clients met: 68 Salient points in management presentation: 1. FY12F was a challenging year mainly due to a weak farm products segment but since mid-4Q12 prices have started to pick up for chicken as supply has been cut. While pork prices have not picked up by much as it takes longer to cut supply. 2. The company is still focused on growing its branded food products segment as it offers higher gross margins compared to the OEM sector. In any case, given the heavy promotion now, operating margins are about the same, but should be improving going forward as products gain better recognition. 3. CPP last year is still on target at 15-20% sales and profit growth p.a. Going forward, growth should remain intact given its unique selling point of offering more premium feed, and it has a technical service team to give customer advice on feed usage. Data points and other guidance made: 1. It expects food segment sales to grow at 15-20% p.a. 2. Margins should remain quite soft in 1H13 as the group has acquired raw materials in advance for utilisation until end 2Q13F at a relatively high price. Meaningful recovery should be from mid-FY13F. 3. CAPEX in FY13F should be at Bt15-16bn; 60% would be used for overseas expansion (especially to build new facility or expand capacity in Vietnam, Indonesia, the Philippines, and Russia). Frequently asked questions (and response by management): 1. Any overseas operations still making losses? - Yes, in Russia, Turkey, and the Philippines. In any case, Russia and the Philippines are loss making due to the operations there being start ups, and should break-even soon. In Turkey, there was a chicken over-supply situation but the loss is decelerating and the situation should soon normalise. 2. Given that broiler chicken prices have been picking up, would this result in more supply for the market? - The price has recovered but it is still not convincing enough for producers to increase production. 3. How long would it take to cure EMS disease in shrimps? - Three to six months

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GMM GRAMMY (NOT RATED BT18.40; GRAMMY TB) No. of clients met: 30 Salient Points in Management Presentation: 1. Apart from the music business, in which GMM has an 80% market share, and which accounts for about 50% of its total revenues, it aims to grow its new broadcast business to increase its revenue from 20% to about 50% of the total revenue. 2. The cost of a mini set-top box and smart box are at 400bt and 700bt, respectively, and they sell at 700bt and 999bt respectively. They plan to lunch HD this year with costs expect to be less than 2,000bt. 3. The average set-top box life is three years. Data points: 1. Currently major business comprises music, media, movies and other businesses (accounting for 80% of total revenue) the remaining 20% comes from broadcasting. 2.The company has a dividend policy of paying not more than 40%. 3. Currently the D/E ratio increases substantially from less than 2x to over 3x by end 2012. The company does not yet have a policy on D/E, but it will implement its internal target soon after it aggressively expands its business in broadcasting. Frequently asked questions (and response by management): 1. How confident is it about its guidance of selling 1 million of set-top boxes a year? - During Euro2012 the company sold 1.2 million set-top boxes. After that ended in 4Q, the company was selling an average of 80,000 set-top boxes a month and subscribers are still increasing, especially on pay TV, so the company is very confident it can sell at least 1 million a year. 2. How come the company doesn’t have to outsource sales of set-top boxes like RS does? - It does not just sell set-top boxes, but plans to be a content provider, to feed its channel (in Dec 2012 NBTC granted 14 broadcasting licenses to the company for 11 Pay TV channels [8SD &3 HD] and three free-to-box channels). 3. What is the company’s future plan and vision? - The company’s plan is to have a full offering of music, media, movie and broadcasting and become one of the major free TV stations as well as increase its revenue on Pay TV.

HEMARAJ LAND (BUY BT3.62; TP: BT3.56; HEMRAJ TB) Number of clients met: 40 Salient Points in Management Presentation: 1. HEMRAJ's industrial land sales hit a record high of 2,317 rai in 2012, up from 1,670 rai sold in 2011. A total of 115 contracts, of which 80 are new customers, and 35 being expansion by existing customers. 2. Positive outlook with FDI flow still strong. 3. Very strong growth outlook for the Ready Built Factories (RBF) and warehouses. Data-points and other guidance made: 1. Target land sales of 1,600 rai for 2013. Note that HEMRAJ initially set its target at 1,500 rai for last year but raised its forecast 3x during the course of the year and finally ended the year at 2,317 rai. 2. Utilities revenue to reach Bt2bn by 2014 from 1.18bn in 2011. 3. Target DE at less than 1.2x. Frequently asked questions (and response by management): 1. Current land bank? 7,500 rai which should last for about five years 2. Land price movement? Up 20% in 2012, as demand has shifted to the East, which was spared from 2011 floods. Recommendation: BUY, TP: Bt3.56

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QUALITY HOUSES PLC. (BUY BT2.48; TP: BT3.00; QH TB) Number of clients met: 56 Salient Points in Management Presentation: 1. Pre-sales totaled Bt16.6bn in 2012, strongly beating its target of Bt15bn. Revenue grew 30%. 2. Very bullish on outlook, expecting strong earnings growth of 50% this year supported by rising revenue, improving margins and lower tax rate. 3. Net gearing to come down further to 1x by end 2013 from 1.45x at end Sep 2012. 4. The stock is trading at a deep discount to its RNAV. Data-points and other guidance made: 1. Target pre-sales to surge to Bt20bn this year, from Bt16.6bn last year. 2. Target revenue to jump 50% to Bt18bn this year from Bt12bn last year. Condo revenue to double from Bt3bn in 2012 to Bt6bn in 2013. 3. Target gross margin to improve further from 30% last year to 32-33% this year. Frequently asked questions (and response by management) 1. Reasons for improving gross margin? Changes in construction materials to suit new types of houses, change in construction technique from conventional to tunnel and pre-cast which helps speed up the construction period. 2. Property price trend? House price should continue to increase in line with rising construction costs. 3. Any plan to divest the investment in four listed companies, HMPRO, LHBANK, QHPF, QHHR? May reduce stake in LHBANK if the latter can find a strategic partner. No plan to divest the rest.

SC ASSET (BUY BT28.00; TP: BT32.00; SC TB) Number of clients met: 23 Salient Points in Management Presentation: 1. Very aggressive in new project launched in FY12 of Bt16.8bn (14 projects); the highest since FY03. 2. Strong pre-sales of Bt12bn in FY12, up 50% YoY. 3. The year-end FY12 backlog could reach more than Bt7bn where 98% of backlog comes from condominium projects. Data-points and other guidance made: 1. Targeting a revenue growth of 15% each year for the next three years. 2. Pre-sales target in FY13 is Bt15bn. 3. The company is planning to launch 15 new projects in FY13 worth Bt20bn; 10 single detached house + one Townhouse + four condominiums. In terms of location, 13 projects will be in BMA and two projects in resort town (holiday home in Cha-am & Condominium in Pattaya) Frequently asked questions (and response by management): 1. What are your criteria when you buy the land? 1) The land should be close to the main road 2) We have to check demand and supply situation in that area 3) It must be easily accessible to a shopping mall. 2. Do you have a labor shortage problem? Actually, labor issue is a challenging task for all property developers. However, SC Asset mitigates this risk by employing a precast technology to solve this problem. Six of 15 projects that will launch in FY13 will use precast technology. 3. What is your target for GPM and NPM? The company is targeting to achieve at least 32% GPM and 13-14% NPM.

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SIAM GLOBAL HOUSE

(BUY BT18.60; TP: BT21.80; GLOBAL TB) Number of clients met: 40 Salient points in management presentation: 1. Positive on recent SCC partnership that should bring in much support and many synergies in term of logistics, sourcing, brand building expertise (for private label products), IT, HR, and expansion. 2. Will have its first DC by end FY13F. The first phase would be able to accommodate up to 50 stores, and 100 stores in the second phase. SCC will help to develop the DC around the outer ring road of Bangkok. 3. Last year it had succeeded in adding seven new stores and it now has a total of 20 stores. 4. Now have purchased 15 pieces of land for store expansion this year. Data points and other guidance made: 1. Targets inventory days to come down to 120 days in the next few years from over 140 days previously. 2. Targets to open at least 12 stores p.a. from FY13F and reach 80 stores in the next five years 3. SSSG should be in the high single digits in FY13F, and will gradually go up as they have more branches and build more brand royalty with customers. 4. FY13F top line growth should be c. 50-55%, and gross margin should improve to at least 16% Frequently asked questions (and response by management): 1. Why gross margin is low in FY12? Promotions to draw in customer into new stores and higher competition. But things should improve this year due to scale increases and better sourcing. 2. Would this competition be higher from here on out? It should not be that bad and will probably remain at about the same level as there is no new player entering the market. 3. Are you opening a store in Bangkok soon? No plans to do so at the moment, but will focus on upcountry expansion in the next few years. There might be a need for a new store format for Bangkok.

SVI (BUY BT4.10; TP: BT4.70; SVI TB) Number of clients met: 20 Salient Points in Management Presentation: 1. SVI expects the earnings to turn back to normal in 2H13. 2. The company plans to acquire a Swedish company called Partnertech (the largest in Scandinavian). The deal should be concluded by 1H13. 3. The key concern is political risk. Data-points and other guidance made: 1. Targeting a revenue of US$300m and US$400m in FY13 and FY14 respectively (from c.US$250m in FY12). 2. Expect gross margins of 11% and net margins of 9% in FY13 3. SVI might plan to do a stock dividend to increase liquidity. Frequently asked questions (and response by management): 1. What is the price you expect to pay for acquisition? The amount should be less than the book value of US$60m. 2. Is your target company making a profit? No, it is now breaking even. 3. What is the synergy from this acquisition? 1) foothold in Scandinavian and Europe market 2) SVI plans to shift some products to be produced in Thailand due to the much lower labour cost.

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TICON PROPERTY (NO RATING BT15.00; TICON TB) No. of clients met: 35 Salient points: 1. In 2013, the company expects to inject bt6 bn of its assets into TFund (The company currently hold a 28% stake) 2. Capex for 2013 is set at around bt6bn comprises bt4.5bn for warehouses and bt1.5bn for factories. 3. The land bank for warehouse and factories can secure revenue for at least 18 months and four years, respectively. Data points 1. TICON offer factories and warehouses for lease on 13 industrial estates and 17 strategic logistics location. It has 1,500 employees in-house for construction using its own platform. 2. The company broke even for warehouses and factories in five and seven years respectively and its contract lease duration is three years with the option to renew and the price can be increased but not more than the CPI accumulated for three years 3. The company aims to maintain the gross margin for its factory business at a high level of 45% while the warehouse business gross margin is at 30% Frequently asked questions (and response by management): 1. What is the new and interesting industrial area in Thailand at the moment? - Kabinburi Industrial zone. 2. How often is the company increasing its rental rate? - After the flooding until now the existing clients still pay the same rate and new clients pay only a bit higher rate. The company doesn’t have a policy on percentage to be increased per year. Most clients are still mainly from Japan (61%). 3. Does the company plan to sell land like Amata and Hemraj? - At the moment the company has no plans to do so, and still focuses on warehouses and factories for lease. Currently the factories for lease business, Ticon, accounts about 2/3 of the total market share.

THAI UNION FROZEN PRODUCTS (BUY BT71.25; TP: BT91.00; TUF TB) Number of clients met: 59 Salient points in management presentation: 1. Last year was a challenge year for the shrimp business as one of its production facilities caught fire and it did not have enough capacity to supply its customers. Also EMS (early mortality syndrome) in shrimp has cut market supply by 10-15% which has impacted shrimp feed sales. 2. Going forward, the sales mix could change slightly as the growth in pet food products and sardine sales are very high. While, tuna sales continuation could drop to below 50%. 3. The tuna business in the US (Chicken of the Sea, which is No. 3 in terms of market share in the US) faced challenges last year, particularly in terms of price competition as competitors with the No. 1 and No. 2 market share initially didn't want to increase prices even though raw material costs had surged, as they had hoped to gain more market share. But, now as no one is really making any profit, they have recently started to increase their selling price, so TUF's margin should also improve. Data points and other guidance made: 1. The pet food business in the US (started in Jan12) should break even by end FY13F. The gross margin should be high at c.30% as it is selling premium pet food to specialty stores. The normal margin is c. 20% and slightly over 20% for pet food OEM and normal branded products. 2. Expect tuna raw material price to increase q-o-q in 1Q13F as the catch condition is still difficult and demand is solid. 3. Expect gross margin in FY13F to be slightly higher than 17% Frequently asked questions (and response by management): 1. Why are you very active in doing M&A? - New acquisition does not only bring in additional revenue but also new ideas and expertise that could be used to improve existing businesses. 2. Between OEM and branded products, which one provides better margin stability? - Normally OEM product margins are more stable as the order cycle (from buyers) is shorter, so when it comes to rising raw material prices, the company can get pass the higher costs faster. But, in term of business stability, branded products are better as sales do not rely heavily on buyers. 3. What is your key strategy to avoid price competition in the US this year? - Introduce new products.

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INDONESIA CORPORATES

ADARO ENERGY (BUY RP1,750; TP: RP1,650; ADRO IJ) Number of clients met: 45 Salient points in management presentation: 1) Adro will continue to focus on margins, not volume, and not be willing to sell its coal at depressed margins. Production cuts are possible if margins are not good enough. 2) Cost cutting is the key focus this year to help improve margins. 3) Coal price is near suppliers’ production cost Data point and other guidance: 1) ASP guidance for FY12 is US$72-75/ton. ASP in 9M12 was us$73/ton, still in line with its guidance. However, expect lower ASP in 4Q12 due to a decline in coal prices. 2) Cash cost guidance for FY12 is US$39-42/ton. The company expects cash cost in FY13F to decline or be flat, driven by lower stripping ratio and the new OPCC conveyor. 3) Adro plans to lower the strip ratio from 6.4x in FY12 to near 6x in FY13m Frequently asked questions (and response by management): 1. What is the production target in FY13F? The company will announce its guidance by end January. 2. How to lower production cost? By lowering stripping ratio and using new OPCC conveyor belt to reduce overburden cost. 3. How's coal demand recently? The problem has more to do with oversupply than demand. After the coal price decline, expect production cuts from high-cost coal producers like Australia. Some small-medium miners in Indonesia are also cutting production as they are not profitable. However, we don't know the exact number of supply cuts to the market.

BUMI SERPONG DAMAI

(BUY RP1,130; TP: RP1,800; BSDE IJ) Number of clients met: 40 Salient points in management presentation: 1. As previously announced, BSDE is entering a JV with HK Land to develop a premium housing cluster in BSD City. Once the deal is finalised, BSDE could book at least Rp1tr worth of pre-sales in 2013 which means earnings could be boosted by c.Rp500bn or higher on top of our current estimates of Rp1.4tr (potential +60% y-o-y earnings growth). BSDE will sell 65ha of land banks to this JV (where BSDE will hold 51% stake), as raw land banks for the project. 2. The company also indicates it might enter another JV with foreign partner to build commercial properties. This could provide another boost in earnings in 2013 if the company is able to finalise the land plot sales. 3. We think the company understands the needs to quickly monetise its land bank. Going forward, BSDE will actively pursue other JV opportunities as it plans to speed up monetizing its huge land bank. Data points and other guidance made: 1. Given more uncertainties due to the coming 2014 election, BSDE is only targeting 10 to 15% ASP growth y-o-y versus 20 to 30% y-o-y growth in the past three years – in line with overall industry sentiment. 2. In line with ASP growth, pre-sales is expected to grow at least by 15% y-o-y, excluding JVs transactions. Taking into account the two JVs, pre-sales could go up to 40% y-o-y. 3. Management indicates that 2012 revenue should be in the Rp3.5-3.7tr range while net profit should at least be Rp1tr, maintaining a net margin of 30-35%. Frequently asked questions (and response by management): 1. Since ASP has been rapidly appreciating in the past three years, have properties in BSD City become unaffordable? Will this soften the demand? Management is still confident that demand will remain robust. Despite the rapid price appreciation, the gap between price in BSD City and Jakarta is still quite wide. Hence, management believes it still offers an affordable housing solution.

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2. What is the update on the Delta Mas acquisition? From Sinar Mas Group’s (the holdings group) perspective, it is indifferent on whether to inject Delta Mas into BSDE or not as it would still enjoy the profitability of both companies. If injected, BSDE's margin might be dragged down as industrial estate profitability is lower. However, if injected, it will give investors exposures to the industrial estate sector. At this point, the holding group has not made any decision on the matter. The decision is unlikely to be reached in the near term.

SAMPOERNA AGRO (BUY RP2,625; TP: RP2,800; SGRO IJ) Number of clients met: c.29 Salient Points in Management Presentation: 1. Sampoerna Agro (SGRO) revealed that it had added c.40k ha of greenfield land bank for oil palm last year. SGRO plans to expand its oil palm estates by 7k ha p.a. going forward (significantly higher than in 2012, which was c.5k ha) - both include smallholders. Currently the biggest risk the industry faces is not the weather or price, but social issues. The group has been proactive even before tighter regulations were introduced. 2. For rubber, the group intends to eventually plant between 45k and 50k ha on the 100k ha of forestry concession it had acquired for rubber estates last year (West Kalimantan). Last year it planted c.200 ha; and this year it intends to plant c.1.0-1.2k ha. 3. The group is always on the lookout for further land bank acquisitions; and may consider going into refining when its CPO production reaches 500k MT or more. This is for economies of scale, as its bargaining power may start to deteriorate at that level. The group currently produces c.340k MT of CPO annually. On the question of potential investment in sugar, the group is also open to the idea; although there are no concrete plans. Data-points and other guidance made: 1. The capex this year will remain at around Rp1 trillion. Around 80% of this will be spent on palm oil estates; and the rest on rubber and sago. Sago will only generate positive cash flow in 2014-2015; but will not contribute meaningfully as the gestation period is longer than palm oil (i.e. 10 years). 2. SGRO expects its 2013 CPO output to increase by 5-10% - higher growth for its own estates will offset negative growth in smallholder estates. The smallholder estates will cyclically contribute less this year because they have been steadily rising over the past two years. The average smallholder estates' age is 15 years, vis-a-vis own estates' average of nine years (weighted age is 11 years). Even though 1Q13 will seasonally drop q-o-q, output will still grow y-o-y; and 2H13 contribution will be similar to 2H12 - but less extreme. 3. Oil palm cost to maturity is between US$5.0k and 5.5k/ha over three years (excluding mill). As at end 2011, its nucleus

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estates stood at 57% of the total planted; while the current net plantable hectarage is 49,300. 4. The group mainly sells its CPO to Wilmar (30%) and Cargill (5%). On an FOB basis (i.e. typically destined for exports), the group sells approximately 15% of total sales volume. Three frequently asked questions (and response by management) : 1. Are there cost pressures going forward? The group's estates are located in South Sumatra, Central and West Kalimantan. Overall the minimum wage increase in these areas will average around 14% - but the group's nucleus labour cost component is only 30%. Hence for its nucleus estates cost of production would increase by around 4%. Yet, on a consolidated basis the group's COGS is mostly made up of smallholder FFB purchases. Inclusive of this, labour costs only account for 9% of the total cost. This would limit cost increases to just 1%. Any potential increase would be further offset by lower expected fertiliser costs, weaker IDR, and efficiency through mechanisation. The group commented that the increase in minimum wage in Indonesia would be negative for planters in Malaysia, as they would have to compete for labourers. The group's average cash cost in 2011 was c.US$450/MT (overall). This is comprised of own estates at c.US$250/MT and smallholders estates at c.US$600/MT. 2. What is the group's outlook on the CPO price? The group believes that there may be an upside surprise in 1Q13 (due to supply rather than demand); and that it is generally bullish for 1H13. However, the outlook for 2H13 remains to be seen. The group does not expect the average CPO price this year to change much from 2012; although in its budget, the group only imputes RM2,700 for the year. For SGRO, it is more of a volume growth story. 3. Will there be margins improvements in 2013? Not significant, as despite increasing contribution from own estates and lower contribution from smallholders, FFB yields from own estates are still low when they start to mature. It also depends on the CPO price.

TOWER BERSAMA (HOLD RP5,900; TP: RP5,300; TBIG IJ) Number of clients met: c.30 Salient Points in Management Presentation: 1. Besides, XL and Indosat, Telkomsel has also adopted a tower-leasing model despite its healthy balance sheet in order to control significant variations in costs and schedule in building towers. 2. Top-4 telcos account for 70% of its revenue which is manifested in the form of lower interest costs in its evergreen US$2Bn debt program. This benefit is not available to its competitors. 3. 3G base stations account for less than 5% of its total portfolio but is likely to see sharp growth over the next couple of years. Due to lower signal propagation at higher 3G frequency, a telco needs almost three times the number of 3G base stations as 2G to get similar coverage. Data-points and other guidance made: 1. Likely to add 3300-3400 tenants organically in 2012 and 2013 each. 2. Its current orderbook is around 1000 tenants, mostly from build-to-suit towers as co-locations orders are fulfilled in 45 days only. Three frequently asked questions (and response by management): 1. Do you feel downward pressure on leasing rates in Indonesia as telcos feel the heat? TBIG has not lowered its pricing and its bigger peer is also equally eager to maintain the lease price. Smaller tower players may compromise on pricing but do not have the muscle to complete the tower construction in time and budget, and often give up in the middle of the project. To be fair, TBIG allows an existing telco to add 3G BTS at 25-30% of the lease price for 2G BTS. 2. Is there a risk that land lease might not be renewed? Not really, as many landlords agree to renew leases much before the expiry of the lease due to upfront cash payment for 10 years and attractive leasing rates. There is not much alternative use of land and many of the landowners are individuals. TBIG has ample negotiating power.

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3. Are interest costs fixed or floating in nature and is there a currency risk? TBIG raises US$ denominated debt at a fixed 3.5% rate and swaps for Indonesia Rupiah leading to a 9% rate in Indonesian Rupiah. As such, there is no currency risk involved.

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PARTICIPATING CORPORATES

EPS

CAGR

Price Mkt Cap Target FY13 (FY12-14

10 Jan 2013 US$m Price PE (x) (%) Rating

SINGAPORE S$ S$ ARA Asset 1.72 1,081 1.70~ 18.5 4 Buy~

Ascendas Hospitality Trust 0.97 638 0.98 4.3* na Buy

Cordlife Group Ltd 0.58 110 0.65 15.2 20 NR

Cosco Corporation Singapore Ltd 0.985 1,804 0.80 20.0 5 FV

CWT Ltd 1.26 619 NR 7.8# 11.1# NR

Del Monte Pacific 0.685 603 NR na na NR

Ezion Holdings Ltd 1.88 1,378 2.12 11.8 58 Buy

Ezra Holdings Ltd 1.325 1,060 1.30~ 24.5 128 Buy~

Far East Hospitality Trust 0.985 1,292 1.09 6.0* 5** Buy

Gallent Venture 0.29 572 UR 60.7 151 NR

Golden Agri-Resources Ltd 0.66 6,931 0.71 10.3 24 NR

Goodpack 1.89 866 1.95 16.5 10 Hold

Hutchison Port Holdings Trust US$0.82 7,141 US$0.88 7.7* (1)** Buy

Jardine Cycle & Carriage Ltd 48.68 14,164 NR 11.3# 6# NR

Nam Cheong 0.285 446 0.30 8.6 17 Buy

Raffles Medical Group 2.89 1,288 2.59 25.2 13 Hold

Religare Health Trust 0.90 580 0.97 4.4* na Buy

STX OSV Holdings Limited 1.33 1,284 2.00 7.0 2 Buy

Tat Hong Holdings Ltd 1.455 675 1.80 11.4 45 Buy

Wing Tai Holdings Ltd 2.08 1,332 ../3ĂĂĂĂĂĂĂĂĂĂĂĂĂĂĂĂĂĂĂĂĂĂ5.2 (7) Buy

* FY13 Dividend Yield and DPU CAGR 12-14 # Consensus forecast from Bloomberg Source: DBS Vickers, Bloomberg ~ Rec & TP under review

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PARTICIPATING CORPORATES

EPS

CAGR

Price Mkt Cap Target FY13 (FY12-14

10 Jan 2013 US$m Price PE (x) (%) Rating

HONG KONG HK$ HK$ Bosideng Int'l 2.40 2,479 n.a. 10.9 (1.6) NR

C C Land 3.00 1,002 2.00 14.6 36.6 Hold

Central China 2.85 893 2.39 6.0 25.6 Buy

Chinasoft Int'l~ 1.81 401 n.a. 10.4 9.8 NR

Chu Kong Petroleum 4.14 540

4.75 8.3 22.5 Buy

CITIC Telecom 2.23 687 1.70 10.4 5.9 Buy

Evergrande Real Estate 4.52 8,741 4.70 5.7 21.9 Buy

Far East Consortium 2.29

519 n.a. 10.0 13.6# NR

Fortune REIT 6.40

1,404 6.97 5.3 * 5.5* Buy

Franshion Properties 2.93 3.463 3.37 9.4 3.2 Buy

Manulife Financial~ 111.10

26,102 n.a. 10.5 n.a. NR

Netdragon Websoft 11.52 751 11.46 12.0 43.6 Buy

Newocean Energy 4.66

785 n.a. 9.3 27.4 NR

Prosperity REIT 2.47 440 2.63 5.7 * 5* Buy

Shenzhen Int'l 0.89

1,880 n.a. 9.1 11.0 NR

Shui On Land 3.86

2,989 3.56 14.3 44.0 Hold

SITC International 2.68

894 2.90 7.6 21.6 Buy

Sunac China~ 6.73 2,618 n.a. 4.6 14.8 NR

Sunlight REIT 3.32

690 3.66 4.9* 2.2* Buy

TCL Comm 2.53

368 1.40 14.8 124.6 FV

VST Holdings 1.89

302 2.40 4.6 8.0 Buy

Wasion Group 3.73

447 n.a. 7.6 16.6 NR

Yanlord Land 1.605 2,558 1.24 13.0 14.6 Hold

Yashili Int'l~ 2.38 1,082 n.a. 13.4 2.5 NR

Yuexiu Property~ 2.69 3,226

n.a. 8.7 8.1 NR

Yuexiu REIT~ 3.86

1,366 n.a. 7.5 * (12.3)* NR

KOREA KRW KRW Com2uS 46,900 447 70,000 16.9 33 Buy

Kolon Life Science Inc. 84,600 412 n.a. 29.8 (14.4) NR

Kook Soon Dang Brewery 7,340 124 11,000 12.9 51 Buy

LG Life Sciences 55,500 869 65,000 107.8 - Buy

^ FY12A PE # FY10-12 CAGR * Dividend Yield and DPU CAGR ** FY13 P/NAV ~ Consensus Source: Thomson Reuters, DBS Vickers

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PARTICIPATING CORPORATES

EPS

CAGR

Price Mkt Cap Target FY13 (FY12-14

10 Jan 2013 US$m Price PE (x) (%) Rating

MALAYSIA RM RM Boustead Holdings 4.94 1,688 6.40 10.9 19 Buy

DRB Hicom 2.70 1,725 3.35 12.1 26 Buy

Eastern & Oriental 1.58 593 1.80 14.7 0 Hold

Hartalega Holdings 4.95 1,139 4.70 16.5 4 Hold

Media Chinese International 1.13 616 1.10 9.8 4 Hold

MMC Corporation 2.70 2,717 3.60 17.1 17 Buy

Perisai Petroleum Teknologi 1.12 315 1.35 11.8 0 Buy

QL Resources Bhd 3.17 839 4.00 17.3 12 Buy

RHB Capital Bhd 7.83 6,454 8.70 9.9 11 Buy

SP Setia Bhd 3.14 2,081 4.10 17.8 17 Buy

Sunway REIT 1.58 1,410 1.80 5.1* 11** Buy

Top Glove Corp 5.47 1,141 5.40 16.1 6 Hold

TSH Resources 2.21 614 2.00 16.8 22 Hold

UEM Land Holdings 2.10 3,004 2.10 23.5 12 Hold

WCT Bhd 2.41 755 3.25 13.0 10 Buy

THAILAND

Bangkok Expressway 36.75 874 39.00 13.4 26 Buy

Central Pattana 82.25 5,813 90.00 33.6 19 Buy

Charoen Pokphand Foods 33.25 8,540 42.00 13.6 66 Buy

GMM Grammy 18.40 322 NR na na NR

Hemaraj Land and Development 3.62 1,161 3.56 11.4 25 Buy

Quality Houses 2.48 642 3.00 11.5 24 Buy

SC Asset Corporation 28.00 620 32.00 10.5 41 Buy

Siam Global House 18.60 1,323 21.80 35.0 60 Buy

SVI 4.10 262 4.70 9.6 50 Buy

Thai Union Frozen Products 71.25 2,700 91.00 12.6 28 Buy

Ticon Industrial Connection 15.00 435 NR 10.2 7 NR

INDONESIA

Adaro Energy 1,750 5,795 1,650 11.9 9 Buy

Bumi Serpong Damai 1,130 2,047 1,800 14.0 16 Buy

Sampoerna Agro 2,625 514 2,800 10.7 31 Buy

Tower Bersama Infrastructure 5,900 2,930 5,300 29.0 48 Hold

Source: DBS Vickers, Bloomberg * Distribution Yield and DPU CAGR FY12-14; ^ Consensus EPS and EPS CAGR FY12-14

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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 (-10% to +15% total return over the next 12 months for small caps, -10% to +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 DBS Vickers Research is available on the following electronic platforms: DBS Vickers (www.dbsvresearch.com); Thomson (www.thomson.com/financial); Factset (www.factset.com); Reuters (www.rbr.reuters.com); Capital IQ (www.capitaliq.com) and Bloomberg (DBSR GO). For access, please contact your DBSV salesperson. GENERAL DISCLOSURE/DISCLAIMER This report is prepared by DBS Vickers Research (Singapore) Pte Ltd ("DBSVR"), a direct wholly-owned subsidiary of DBS Vickers Securities (Singapore) Pte Ltd ("DBSVS") and an indirect wholly-owned subsidiary of DBS Vickers Securities Holdings Pte Ltd ("DBSVH"). This report is intended for clients of DBSV Group only and no part of this document may be (i) copied, photocopied or duplicated in any form or by any means or (ii) redistributed without the prior written consent of DBSVR. It is being distributed in the United States by DBSV US, which accepts responsibility for its contents. Any U.S. person receiving this report who wishes to effect transactions in any securities referred to herein should contact DBS Vickers Securities (USA) Inc (“DBSVUSA”) directly and not its affiliate. The research set out in this report is based on information obtained from sources believed to be reliable, but we (which collectively refers to DBSVR, DBSVS, and/or DBSVH) do not make any representation or warranty as to its accuracy, completeness or correctness. Opinions expressed are subject to change without notice. This document is prepared for general circulation. Any recommendation contained in this document does not have regard to the specific investment objectives, financial situation and the particular needs of any specific addressee. This document is for the information of addressees only and is not to be taken in substitution for the exercise of judgement by addressees, who should obtain separate independent legal or financial advice. DBSVR accepts no liability whatsoever for any direct, indirect and/or consequential loss (including any claims for loss of profit) arising from any use of and/or reliance upon this document and/or further communication given in relation to this document. This document is not to be construed as an offer or a solicitation of an offer to buy or sell any securities. DBSVH is a wholly-owned subsidiary of DBS Bank Ltd. DBS Bank Ltd along with its affiliates and/or persons associated with any of them may from time to time have interests in the securities mentioned in this document. DBSVR, DBSVS, DBS Bank Ltd and their associates, their directors, and/or employees may have positions in, and may effect transactions in securities mentioned herein and may also perform or seek to perform broking, investment banking and other banking services for these companies. Any valuations, opinions, estimates, forecasts, ratings or risk assessments herein constitutes a judgment as of the date of this report, and there can be no assurance that future results or events will be consistent with any such valuations, opinions, estimates, forecasts, ratings or risk assessments. The information in this document is subject to change without notice, its accuracy is not guaranteed, it may be incomplete or condensed and it may not contain all material information concerning the company (or companies) referred to in this report. The valuations, opinions, estimates, forecasts, ratings or risk assessments described in this report were based upon a number of estimates and assumptions and are inherently subject to significant uncertainties and contingencies. It can be expected that one or more of the estimates on which the valuations, opinions, estimates, forecasts, ratings or risk assessments were based will not materialize or will vary significantly from actual results. Therefore, the inclusion of the valuations, opinions, estimates, forecasts, ratings or risk assessments described herein IS NOT TO BE RELIED UPON as a representation and/or warranty by DBSVR, DBSVS and/or DBSVH (and/or any persons associated with the aforesaid entities), that: (a) such valuations, opinions, estimates, forecasts, ratings or risk assessments or their underlying assumptions will be achieved, and (b) there is any assurance that future results or events will be consistent with any such valuations, opinions, estimates, forecasts, ratings or risk assessments stated therein. Any assumptions made in this report that refers to commodities, are for the purposes of making forecasts for the company (or companies) mentioned herein. They are not to be construed as recommendations to trade in the physical commodity or in the futures contract relating to the commodity referred to in this report. DBS Vickers Securities (USA) Inc ("DBSVUSA")"), a U.S.-registered broker-dealer, does not have its own investment banking or research department, nor has it participated in any investment banking transaction as a manager or co-manager in the past twelve months. Any US persons wishing to obtain further information, including any clarification on disclosures in this disclaimer, or to effect a transaction in any security discussed in this document should contact DBSVUSA exclusively. ANALYST CERTIFICATION The research analyst primarily responsible for the content of this research report, in part or in whole, certifies that the views about the companies and their securities expressed in this report accurately reflect his/her personal views. The analyst also certifies that no part of his/her compensation was, is, or will be, directly, or indirectly, related to specific recommendations or views expressed in this report. As of 14 Jan 2013, the analyst and his / her spouse and/or relatives who are financially dependent on the analyst, do not hold interests in the securities recommended in this report (“interest” includes direct or indirect ownership of securities, directorships and trustee positions).

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COMPANY-SPECIFIC / REGULATORY DISCLOSURES 1. DBS Vickers Securities (Singapore) Pte Ltd and its subsidiaries do not have a proprietary position in the company mentioned as of

10 Jan 2013

2. DBSVR, DBSVS, DBS Bank Ltd and/or other affiliates of DBS Vickers Securities (USA) Inc ("DBSVUSA"), a U.S.-registered broker-dealer, beneficially own a total of 1% or more of any class of common equity securities of the Ascendas Hospitality Trust, Far East Hospitality, Fortune Reit as of 14 Jan 2013.

3. Compensation for investment banking services:

a) DBSVR, DBSVS, DBS Bank Ltd and/or other affiliates of DBSVUSA have received compensation, within the past 12 months, and within the next 3 months receive or intends to seek compensation for investment banking services from the ARA Asset, Ascendas Hospitality Trust, Ezion Holdings, Ezra Holdings, Far East Hospitality Trust, Goodpack, Nam Cheong, Religare Health Trust, Wing Tai. DBSVHK, DBSVUSA, DBS Bank Ltd and/or other affiliates have received compensation, within the past 12 months, and within the next 3 months may receive or intends to seek compensation for investment banking services from Fortune Real Estate Investment Trust (778 HK) and Yuexiu REIT (405 HK).

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