editor: kevin cheng tel: (852) 2277 6626 email...

denniswu

Typewriter

denniswu

Typewriter

Editor: Kevin Cheng Tel: (852) 2277 6626 Email: [email protected]

denniswu

Typewriter

The information contained herein is based on sources which Phillip Securities (Thailand) believes reliable. We do not guarantee its accuracy or completeness. Opinions and estimates expressed herein are subject to change without notice. This report is for information only and should not be construed as an offer or solicitation for the purchase or sale of any securities referred to herein. We accept no liability for any loss, direct or indirect, from the use of this document. The directors and/or employees of Phillip Securities and or its associates may have an interest in the securities mentioned in the securities mentioned herein.

MONTHLY SET STRATEGY:

Thai Stock Market Outlook & Stock Picks for Apr 2014

Research Team

Apr 1, 2014

Rising political heat to keep Thai stocks

in check in the month of Songkran

MCI(P) 046/11/2013

Ref. No.: TH2014_0127

The information contained herein is based on sources which Phillip Securities (Thailand) believes reliable. We do not guarantee its accuracy or completeness. Opinions and estimates expressed herein are subject to change without notice. This report is for information only and should not be construed as an offer or solicitation for the purchase or sale of any securities referred to herein. We accept no liability for any loss, direct or indirect, from the use of this document. The directors and/or employees of Phillip Securities and or its associates may have an interest in the securities mentioned in the securities mentioned herein. 2

Thai stock market outlook for 2Q14 & Apr 2014

Summary

Thai economic and political outlook for 2Q14

(1) Domestic political uncertainty with no signs of light at the end of the political tunnel has still put the Thai economy

at risk of a slowdown. The prospect of slowing consumption and investment also keep growth hope largely pinned on

exports. Even though the lifting of the emergency law has taken some of the pressure off the tourism industry, fears of

renewed political chaos as a consequence of political protests by both government supporters and opponents may

however spoil high tourism season during the annual water splashing Songkran Festival in early 2Q14.

(2) Thailand may face more political risks from a possible confrontation between government supporters and

opponents in the aftermath of court rulings on political cases relating to the caretaker PM and the survival of the

caretaker government especially in the scorching month of Apr when (i) the pro-government, red-shirt United Front for

Democracy against Dictatorship (UDD) plans a mass rally on Apr 5 and (ii) the Constitutional Court will meet on Apr 2

to decide whether to accept a petition by a group of senators asking it to rule if Yingluck Shinawatra's position as

caretaker PM is still valid under Section 182 (7) of the constitution after the Supreme Administrative Court ordered the

reinstatement of Thawil Pliensri as secretary-general of the National Security Council within 45 days.

Thai stock market outlook for 2Q14

The reactions of several political groups in the wake of court rulings on cases relating to the caretaker government

could raise the odds of rising political heat in the torrid month of Apr. Dividend season also normally reaches its peak

for the year in Apr. As things stand, the choppy sideways action is likely to continue in the Thai stock market as

political and economic risks may put a cap on the upside potential while the downside could be tempered by a return

of foreign fund inflows into Asia. The pace of foreign selling in Thai stocks shows signs of abating after heavy sell-offs

last year and well into the first quarter of this year. We expect a trading range of 1320, 1340-1460, 1480 points for the

SET index in 2Q14. On a monthly basis, the SET index is expected to trade in a range of 1340-1420 points in the

month of Apr.

Our top three picks for 2Q14 are CPF, PTTGC and RS while our recommended picks for the month of Apr include

BWG, CHG and MINT.


Private consumption in slow growth mode

The end of economic stimulus may hold back private consumption while consumers are now far more cautious in

spending amid prolonged political crisis.

40

45

50

55

60

65

70

75

80

85

90

Jan-0

8

Ma

y-0

8

Sep-0

8

Jan-0

9

Ma

y-0

9

Sep-0

9

Jan-1

0

Ma

y-1

0

Sep-1

0

Jan-1

1

Ma

y-1

1

Sep-1

1

Jan-1

2

Ma

y-1

2

Sep-1

2

Jan-1

3

Ma

y-1

3

Sep-1

3

Jan-1

4

Consumer Confident Index

Source: Bank of Thailand (BOT) Source: Bloomberg

2012 2013 2013 2014

H1 H2 Q3 Q4 Jan Feb

PCI 147.0 147.5 148.0 149.2 146.8 147.0 147.2 145.5

%YoY 5.7 0.3 2.2 0.0 -2.2 -0.9 -1.5 -2.5

%MoM, %QoQ - - - - -0.4 0.2 0.3 -1.2

Private Consumption Index (PCI)

(Seasonally adjusted, 2000=100)

P=Preliminary data


Public and private investment in slow gear

Source: Bank of Thailand

The delays in the Bt350bn water management projects and Bt2trn infrastructure scheme have put the brakes on both

public and private investment while business sentiment index (BSI) slipped below average.

The prolonged political deadlock and a lack of a new government put the FY15 budget allocation at great risk of long

delays.


2012 2013 2013 2014

H1 H2 Q3 Q4 Jan Feb

Pll 243.9 237.7 241.1 234.3 237.4 231.3 232.1 227.7

%YoY 17.3 -2.5 0.7 -5.7 -3.4 -7.9 -8.1 -7.7

%QoQ. %MoM - - - - 0.2 -2.6 0.3 -1.9

Private Investment Index (PII)

(Seasonally adjusted, 3-month moving average)

P= Preliminary data

2012 2013 2013 2014

H1 H2 Q3 Q4 Jan Feb

BSI 51.5 49.3 51.5 47.1 47.8 46.4 45.4 46.5

Expected BSI 55.5 53.9 55.7 52.1 52.4 51.8 52.0 53.2

Business Sentiment Index



Exports and tourism show signs of gradual recovery

Exports are likely to fare better than a year ago while the recovery in tourism looks set to gain more traction after the

end of the emergency law but the lingering domestic political unrest may temper the positive impact from the annual

water-splashing Songkran Festival.


%YoY 2012 2013 2013 2014

H1 H2 Q3 Q4 Jan Feb

Agriculture -23.1 0.0 -3.0 3.1 -0.2 5.9 -4.5 5.6

Fishery -7.1 -25.4 -25.3 -25.5 -28.2 -22.9 -12.3 -5.7

Manufacturing 6.1 1.8 3.5 0.1 1.4 -1.1 -4.2 0.6

Electronics 0.9 -0.7 -3.6 2.2 2.6 1.7 2.7 4.7

Automotive 26.3 7.6 14.4 1.6 7.2 -3.9 -12.1 17.3

Agro-

manufacturing

Product

4.1 -2.6 -2.4 -2.7 -4.5 -0.9 -6.1 -7.8

Machinery &

Equipment

1.9 4.0 1.2 6.8 4.7 8.9 11.3 14.7

Petroleum

products

15.7 -1.3 -13.0 10.7 9.6 11.8 -2.7 -18.8

Petro-

chemical

Product

-1.8 5.3 6.4 4.2 3.6 4.9 6.1 2.8

Electrical

Appliances

2.2 2.3 5.3 -0.7 -0.8 -0.6 13.1 6.7

Metal & Steel 21.2 -5.5 30.1 -29.7 -21.0 -37.2 -38.8 -40.0

Apparels and

Textile

Materials

-12.0 3.6 4.0 3.2 4.2 2.2 -1.5 0.6

Total 3.1 -0.2 1.0 -1.4 -1.8 -1.0 -1.5 2.2

Export Growth (in terms of US$)

2012 2013 2013 2014

H1 H2 Q3 Q4 Jan Feb

No. of tourists

(*000)

22,354 26,736 12,924 13,812 6,749 7,063 2,320 2,174

%YoY 16.2 19.6 21.7 17.7 26.1 10.7 0.1 -8.1

Occupancy 60.8 64.9 66.3 63.6 62.6 64.5 61.2 62.1

Jan 2014=17.7Bn USD (-1.5%) Feb 2014=18.2 Bn USD (2.2%)

P= preliminary data

Tourism


Date Key political events to watch

Apr 2 The Constitutional Court will meet to decide whether to hear a petition by a group of senators asking

it to rule if Yingluck Shinawatra's position as caretaker PM is still valid under Section 182 (7) of the

constitution after the Supreme Administrative Court ordered the reinstatement of Thawil Pliensri as secretary-general of the National Security Council within 45 days.

Comment: If the charter court decides to hear the case and it upholds the Supreme Administrative Court’s verdict that

the government’s removal of Thawil Pliensri from the post in 2011 was unlawful and the court ordered his reinstatement

as NSC secretary-general within 45 days of the court’s ruling, the caretaker government’s life would come to a statutory

end and leave Thailand in a political vacuum, which may eventually lead to the appointment of a neutral prime minister.

Apr 5 - The pro-government United Front for Democracy against Dictatorship (UDD) plans a mass rally.

- The anti-government People’s Democratic Reform Committee (PDRC) sets Apr 5 for a major

assembly of its leaders at Lumpini Park.

Comment: There is a risk of rising political temperature especially if the caretaker government would be removed from

office, a move that could possibly lead to out-of-control violence.

--- National Anti-Corruption Commission (NACC)’s ruling on caretaker PM Yingluck Shinawatra over the

rice pledging scam.

Key political events to watch in the month of Apr


Historical performance of the Thai stock market in 2Q

Statistics over the past 10 years since 2004 showed dividend payout reached its peak for the year in Apr on average

and the momentum subsided in May and Jun. Statistics further showed that HELTH and ICT normally performed the

best among all sectors during 2Q.

SET Total Return

-3.00%

-2.00%

-1.00%

0.00%

1.00%

2.00%

3.00%

4.00%

5.00%

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Source: Bloomberg


Foreign fund flow: Massive foreign sell-off of Thai shares amid domestic political pressure

0

200

400

600

800

1000

1200

1400

1600

1800

-50,000

0

50,000

100,000

150,000

200,000

250,000

300,000

350,000

400,000

1/2

00

93/2

00

96/2

00

99/2

00

911

/20

09

2/2

01

04/2

01

07/2

01

010

/20

10

12

/20

10

3/2

01

16/2

01

18/2

01

111

/20

11

1/2

01

24/2

01

26/2

01

29/2

01

211

/20

12

2/2

01

35/2

01

37/2

01

310

/20

13

1/2

01

4

SE

T in

dex

Po

rtfo

lio

Valu

eM

illio

ns

Proxy Foreign Portfolio SET index

31

32

33

34

35

36

37(%)

Domestic political pressure sparked a

massive foreign sell-off in Thai stocks.

In our view, there seems to be limited

downside room in Thai stocks for the

time being though political heat may

rise again, except a major political

change that will overthrow the

democratic system, a factor that may

renew heavy foreign selling in Thai

shares.

Net foreign portfolio investment in Thai stock market

% of foreign holdings in Thai stocks to market cap


Sector update &

stock picks for 2Q14


Sector update & stock picks for 2Q14

SectorInvestment

weighting

Stock

pickInvestment theme

2014

Mkt Cap

(Btmn)FV

(Bt)

P/E

(X)

P/BV

(X)

Div

Yld

AGRI NT --- STA Rubber prices look set to benefit from wintering season and global recovery prospects.

16.00 10.41 0.93 4.58% 19,584

FOOD NT --- CPF Earnings are poised for return to strong growth mode on solid ASPs in

livestock business and the prospect of a recovery in aquaculture business in 2HCY14. 34.50 18.30 1.59 2.86% 216,802

BANK OW --- BBL Lending is likely to pick up after a slowdown in 1QCY14 on expectations that

corporate loans will keep growing. Earnings should also fare better as corporate loans account for the biggest portion of its loan portfolio.

229.00 8.83 1.02 4.06% 340,728

FIN NT --- ASP Market turnover seems to be on a steady decline due to the persistent political

uncertainty and the effects of the long holiday breaks in 2Q. For this reason,

2QCY14 earnings are unlikely to be better than 2QCY13 and 1QCY14. 3.70 9.19 1.55 8.82% 7,159

PETRO OW --- PTTGC Strong demand growth should keep olefins spreads at high levels. Valuation-wise, PTTGC is also viewed as a laggard relative to its peers. 87.00 8.30 1.24 5.41% 325,764

CONMAT OW --- SCC Normally 2Q is the traditional low season for cement business after a

slowdown in cement demand in 1QCY14. As construction activity for

government projects mainly hinges on the installation of a new government,

we therefore prefer SCC as the impact could be offset by its petrochemical business which is largely tied to external factors. 500.00 12.95 2.21 4.11% 501,600

PROP NT ▼ SPALI Due to the fallout from domestic political unrest, which has continued to take a

toll on housing market and the absence of new project launches, what remains

to be seen is whether business targets will be revised. For this reason, we

prefer SPALI as its huge backlog would keep earnings going ahead. 24.40 7.61 2.05 5.28% 30,555

ENERG NT --- PTTEP PTTEP remains a laggard relative to its peers. Sales volume growth would be a key earnings driver. 196.00 8.95 1.51 4.46% 623,288


Sector update & stock picks for 2Q14

SectorInvestment

weighting

Stock


2014

Mkt Cap

(Btmn)FV

(Bt)

P/E

(X)

P/BV

(X)

Div

Yld

TRANS NT --- TTA In q-q terms, profitability is likely to continue in 2QFY14. On a y-y basis, 2QFY14 profit

would mark a turnaround from the loss in 2QFY13. The earnings improvement would

continue to be driven by a further recovery in dry bulk shipping business, a strong

performance at MML thanks to contracts with Saudi Aramco and a solid performance from Baconco. 24.60 23.04 1.08 1.32% 27,386

HELTH NT --- BGH The number of international patients is set to pick up after the end of the emergency

law. BGH of late also announced a plan to reduce the stock’s par value to Bt0.10/share from Bt1/share. 152.00 30.37 4.60 1.45% 206,030

CHG Small-tier hospital CHG appears to have been undeterred by a drop in international patients as it targets mid-tier clients and its hospitals are not located near protest sites. 12.10 23.86 3.89 2.57% 11,550

MEDIA NT --- RS RS won the broadcasting rights to the 2014 FIFA World Cup finals to be held from Jun 12-Jul 13, 2014. Revenue is also expected to be strong during the World Cup.

9.55-

10.50 18.02 4.91 4.62% 8,388

PROF --- --- BWG BWG looks to benefit from tighter enforcement of waste disposal regulations on

factories by regulatory agencies after a massive fire at garbage dump in Praeksa. In

addition to a 10%-15% increase in service fees, BWG also aims to boost the proportion of high-margin income from hazardous industrial waste disposal service this year.

4.28 9.56 1.39 4.07% 2,458

TOURISM NT --- MINT Domestic political pressure remains a downside risk to the outlook. In our view,

2QCY14 may not yet be a good quarter for MINT but it could provide an opportunity to

accumulate shares to bet on a recovery in tourism and hotel industries in 2HCY14.

MINT also looks to be the best play in the hotel space under the current political circumstances in view of its well-diversified revenue profile both at home and abroad. 30.00 21.95 3.44 1.45% 99,234

ICT NT ▼ INTUCH Earnings growth would be driven by profit contribution from ADVANC and THCOM. In

our view, earnings growth momentum is likely to continue at ADVANC as the mobile

business would continue to be driven by revenue from non-voice services, which is

projected to grow by at least 20%-25%. For THCOM, growth would be driven

bybandwidth demand in many countries and Thaicom 6 satellite, which was launched into orbit at the start of the year. 97.00 15.64 7.38 5.76% 247,696

ETRON NT --- KCE Share price run-up reflected its strong operating performance. KCE remains one of our top picks in the electronics space in view of its best-in-class earnings growth profile. 30.50 10.60 2.95 3.25% 16,883

** Based on closing price as of Mar 31, 2014


Charoen Pokphand Foods - CPF

Rating Buy

Target Price (Bt) 34.50

Closing Price (Bt) 28.00

Expected Capital Gains (%) 23.2%

Expected Dividend Yield (%) 2.9%

Expected Total Return (%) 26.1%

Raw Beta (Past 2yrs w eekly data) 1.04

Market Cap. (Bt mn) 216,801

Enterprise Value (Bt mn) 400,384

3M Average Daily T/O (mn) 21.3

52 w eek range 21.6 - 33.75

Major Shareholders (%)

25.0

11.4

6.4

Valuation Method

SOTP

CG Report - 2013

(Excellent)

3. Littledow n Nominees Limited

1. Charoen Pokphand Group Co., Ltd.

2. Charoen Pokphand Holding Co., Ltd.

0.00

10.00

20.00

30.00

40.00

50.00

Mar-1

3

Apr-1

3

May-1

3

Jun-1

3

Jul-1

3

Aug-1

3

Sep-1

3

Oct-1

3

Nov-1

3

Dec-1

3

Jan-1

4

Feb-1

4

Mar-1

4

0102030405060708090

Volume, mn CPF TB EQUITY SETI rebased

Conso' Profits EPS DPS BV ROE P/E Yield P/BV

Ending (Btm) (Bt) (Bt) (Bt) (%) (x) (%) (x)

12/12 A 18,789.93 2.54 1.10 15.60 20.00 11.01 3.93 1.80 12/13 A 7,065.25 0.96 0.50 16.73 5.60 29.28 1.79 1.67 12/14 E 11,316.30 1.53 0.80 17.60 8.50 18.28 2.87 1.59 12/15 E 12,135.88 1.64 0.85 18.31 8.70 17.05 3.05 1.53


Charoen Pokphand Foods - CPF

Earnings look set to return to strong growth mode this

year helped by the sustained high levels of pork and

chicken prices and the prospect of a recovery in shrimp

business in the second half of the year thanks to a

projected 20% y-y rise in shrimp supply this year. Our

forecast puts CY14 net profit at Bt11,316mn, up 60% y-y

based on assumptions that full-year sales will be up

11% y-y to Bt431,288mn.

The removal of Japan’s decade-old import ban on Thai

raw chicken would alleviate oversupply in the industry, a

factor that could also keep selling prices at high levels.

On a normalized basis, our forecast suggests CPF will

swing back to an operating profit in 1QCY14 after it

suffered losses from aquaculture business last year.

In our view, CPF is a big laggard in the agri-food export

space. Its current share price has not reflected its

earnings turnaround story driven by industry recovery

and strong selling prices. We have a ‘BUY’ call on CPF

shares with a Bt34.50/share target price.

Target price: Bt34.50

Short-term technical view:

Support: Bt26.75

Resistance: Bt34.00 Cut loss: Bt25.50


PTT Global Chemical - PTTGC



12/12 A 34,001.00 7.54 3.40 49.33 16.15 9.58 4.71 1.46 12/13 A 33,277.41 7.38 3.40 52.90 14.44 9.79 4.71 1.37 12/14 E 39,208.06 8.70 3.91 58.25 15.65 8.31 5.42 1.24 12/15 E 46,694.88 10.36 4.66 64.39 16.89 6.98 6.45 1.12

Rating Buy










52 w eek range 64 - 80.75


48.9

9.1

2.8

Valuation Method

P/B'14 (1.5x)

CG Report - 2013

(Excellent)

3. STATE STREET BANK EUROPE LIMITED

1. PTT PUBLIC COMPANY LIMITED

2. THAI NVDR COMPANY LIMITED

0.00

20.00

40.00

60.00

80.00

100.00

Mar-1

3

Apr-1

3

May-1

3

Jun-1

3

Jul-1

3

Aug-1

3

Sep-1

3

Oct-1

3

Nov-1

3

Dec-1

3

Jan-1

4

Feb-1

4

Mar-1

4

0

10

20

30

40

50

Volume, mn PTTGC TB EQUITY SETI rebased


PTT Global Chemical - PTTGC

Demand growth should act as a catalyst to keep olefins

spreads at high levels. Last year, up to 60% of PTTGC’s

EBITDA came from olefins and derivatives businesses.

Earnings would also receive a boost from normalization

of feedstock supply after the resumption of PTT’s fifth

gas separation plant and a shorter period of plant

maintenance shutdown planned for this year.

Shares in PTTGC lost as much as 6% over the last

three months, much underperforming the petrochemical

sector and the broader SET index. In our view, the

sustained high olefins spread outlook, a shorter period

of plant maintenance shutdown and price laggard play

are enough to warrant a ‘BUY’ rating on PTTGC shares

with CY14 target price of Bt87/share based on a P/B

multiple of 1.5x.



Support: Bt69.50



RS - RS



12/12 A 284.27 0.32 0.25 1.43 26.49 27.03 2.89 6.05 12/13 A 394.49 0.41 0.35 1.65 28.74 21.10 4.05 5.24 12/14 E 488.75 0.48 0.40 1.76 31.95 18.02 4.62 4.91 12/15 E 446.78 0.44 0.37 1.80 26.21 19.66 4.28 4.81

Rating Trading Buy

Target Price (Bt) 9.55-10.5


Expected Capital Gains (%) 10.4-21.4%


Expected Total Return (%) 15.0-26.0%





52 w eek range 5.85 - 12.5


32.3

18.1

4.3

Valuation Method

P/E'14 (20-22x)

CG Report - 2013

(Excellent)

2. Mr. Yotin Vanitvarakit

1. Mr. Surachai Chetchotisak

2. Mr. Sorat Vanitvarakit

0.00

10.00

20.00

30.00

Mar-1

3

Apr-1

3

May-1

3

Jun-1

3

Jul-1

3

Aug-1

3

Sep-1

3

Oct-1

3

Nov-1

3

Dec-1

3

Jan-1

4

Feb-1

4

Mar-1

4

0

2

4

6

8

10

Volume, mn RS TB EQUITY SETI rebased


RS - RS

Due to a host of headwinds from first-quarter low season effect, domestic political worries and dwindling purchasing power, total industry-wide ad expenditures in Jan-Feb 2014 dropped 5.7% y-y.

Even though lingering political concerns and eroding purchasing power may spoil high season for ad spending in the second quarter, the impact could be offset by a windfall from the 2014 FIFA World Cup finals to be held from Jun 12-Jul 13, 2014, a big sports event that would draw more ad spending. RS won the broadcasting rights to the 2014 FIFA World Cup.The total amount of platinum sponsorship contracts it has signed up for the 2014 FIFA World Cup has now climbed to Bt300mn.

The Central Administrative Court ruled that the NBTC’s ‘must have’ rule could not be applied against RS plan to allow the broadcast of only 22 out of the total 64 World Cup finals matches on free TV. The NBTC will appeal to the Supreme Administrative Court against a lower court’s ruling. In our view, the Supreme Administrative Court is likely to uphold a lower court’s ruling as RS International Broadcasting and Sport Management secured the sole broadcasting rights before the ‘must have’ rule took effect.

Our forecast suggests RS will see a 23.9% y-y rise in CY14 net profit based on assumptions that ad spending in 2HCY14 will recover from a slowdown in 1HCY14 and the digital TV business will not provide a significant boost to the bottom-line this year. Even though current share prices have nearly matched our target price, we believe the World Cup windfall could be a catalyst to re-rate P/E multiple to 20x-22x, translating into Bt9.55-Bt10.50/share equivalent to its trailing three-year peak average of 24x. We rate RS shares a ‘TRADING BUY.’

Target price: Bt9.55-Bt10.50


Support: Bt8.00



Sector update &

stock picks for Apr 2014


Sector update & stock picks for Apr 2014

SectorInvestment

weighting

Stock


2014Mkt Cap

(Btmn)FV (Bt)P/E

(X)

P/BV

(X)

Div

Yld

FOOD NT --- CPF Earnings are poised for return to strong growth mode on solid ASPs in livestock business and the prospect of a recovery in aquaculture business in 2HCY14. 34.50 18.30 1.59 2.86% 216,802

BANK OW --- KBANK Due to a lending slowdown in 1QCY14, our forecast suggests 1QCY14 earnings

will be lower than 1QCY13 but higher than 4QCY13 on lower expenses. The bank also came out on top in the sector in terms of YTD loan growth. 208.00 9.73 1.67 2.11% 426,000

FIN NT --- ASP Thanks to its well-diversified revenue profile, ASP seems to have the lowest risk

of revenue loss at a time when market turnover has nearly halved from a year

ago. MBKET should also perform well in times of market turnover slump given its most effective expense controls. 3.70 9.19 1.55 8.82% 7,159

PETRO OW --- PTTGC Strong demand growth should keep olefins spreads at high levels. Valuation-wise, PTTGC is also viewed as a laggard relative to its peers. 87.00 8.30 1.24 5.41% 325,764

CONMAT NT ▼ SCC Cement demand contracted by 4% in early 1QCY14 after a 9% growth in

1QCY13. In the latest developments, SCC has set CY14 cement demand growth

target of only 2%-3% on concerns over a slowdown in construction activity in

both public and private projects. Growth in overall cement industry is expected to

be modest but SCC is likely to outperform the industry helped by its

petrochemical business. Petrochemical spreads have currently improved in y-y

terms. 500.00 12.95 2.21 4.11% 501,600

PROP NT ▼ SPALI In view of prolonged political uncertainty, delays in new condo launches,

sluggishness in new SDH/TH launches and overall subdued presales picture, we

prefer SPALI based on the high level of backlog, which would allow it to deliver better earnings growth than its peers this year.

24.40 7.61 2.05 5.28% 30,555



SectorInvestment

weighting

Stock


2014

Mkt Cap

(Btmn)FV

(Bt)

P/E

(X)

P/BV

(X)

Div

Yld

ENERG NT --- PTTEP PTTEP remains a laggard relative to its peers. Sales volume growth would be a key earnings driver.

196.00 8.95 1.51 4.46% 623,288

TRANS NT --- BTS For FY15, earnings should reap the full-year benefits from the opening of new BTS

stations and the addition of new cars and trains, new media and increasing ad areas

and fare increases. It is currently awaiting bid results for Beijing Subway Line 16 and bids for new mass transit lines in Thailand.

9.90 7.78 1.69 5.95% 100,080

TTA In addition to a recovery in dry bulk shipping business, operating performance at

MML and Baconco would be strong and 2H is also traditionally the high season. 24.60 23.04 1.08 1.32% 27,386

COMM NT --- CPALL Earnings appear to have already passed the bottom. Top-line and bottom-line are

poised to rise in CY14 on the back of SSSG, new store additions, full-year consolidation of MAKRO and business synergies from the merger.

54.25 33.72 12.08 2.30% 390,765

HELTH NT --- CHG Small-tier hospital CHG appears to have been undeterred by a drop in international

patients as it targets mid-tier clients and its hospitals are not located near protest sites.

12.10 23.86 3.89 2.57% 11,550

PROF --- --- BWG BWG looks to benefit from tighter enforcement of waste disposal regulations on

factories by regulatory agencies after a massive fire at garbage dump in Praeksa. In

addition to a 10%-15% increase in service fees, BWG also aims to boost the

proportion of high-margin income from hazardous industrial waste disposal service this year.

4.28 9.56 1.39 4.07% 2,458

TOURISM OW --- MINT Domestic political pressure remains a downside risk to the outlook. In addition to

tourism promotion by the Tourism Authority of Thailand (TAT), the upcoming

Songkran Festival and the summer school break may provide a boost to tourism,

consumption and hotel occupancy rate in the month of Apr. MINT looks to be the

best play in the hotel space under the current political circumstances in view of its well-diversified revenue profile both at home and abroad.

30.00 21.95 3.44 1.45% 99,234



** Based on closing price as of Mar 31, 2014

Sector Investment

weighting

Stock


2014

Mkt Cap

(Btmn)FV

(Bt)

P/E

(X)

P/BV

(X)

Div

Yld

ICT NT ▼ INTUCH Earnings growth would be driven by profit contribution from ADVANC and

THCOM. In our view, earnings growth momentum is likely to continue at

ADVANC as the mobile business would continue to be driven by revenue from

non-voice services, which is projected to grow by at least 20%-25%. For

THCOM, growth would be driven by bandwidth demand in many countries and Thaicom 6 satellite, which was launched into orbit at the start of the year. 97.00 15.64 7.38 5.76% 247,696

ETRON NT --- KCE Share price run-up reflected its strong operating performance. KCE remains one

of our top picks in the electronics space in view of its best-in-class earnings growth profile. 30.50 10.60 2.95 3.25% 16,883


Better World Green - BWG

Rating Buy










52 w eek range 2.02 - 3.56


5.7

3.7

2.9

Valuation Method

P/E'14 (12x)

CG Report - 2013

(Very Good)

3. Mrs. Charussri Pongpirodom

1. Mr. Suw at Luengviriya

2. Mr. Sippakorn Kaw sa-art

0.00

2.00

4.00

6.00

Mar-1

3

Apr-1

3

May-1

3

Jun-1

3

Jul-1

3

Aug-1

3

Sep-1

3

Oct-1

3

Nov-1

3

Dec-1

3

Jan-1

4

Feb-1

4

Mar-1

4

0

50

100

150

200

250

300

Volume, mn BWG TB EQUITY SETI rebased



12/12 A 77.54 0.11 0.04 1.88 7.53 31.27 1.16 1.83 12/13 A 163.20 0.23 0.11 2.31 11.13 14.96 3.20 1.49 12/14 E 285.06 0.36 0.14 2.48 17.13 9.56 4.07 1.39 12/15 E 328.43 0.41 0.16 2.77 16.97 8.39 4.65 1.24


Better World Green - BWG

Fire-ravaged garbage dump in Praeksa has caused related government agencies to be sued for negligence and makes regulatory agencies to tighten enforcement of waste disposal regulations on factories and impose more penalties on violators in terms of fine and imprisonment, as well as license revocation.

To cash in on tougher law enforcement, BWG hosted its first road show at Bang Pa-In Industrial Estate and it could secure more than 100 new clients. BWG also plans to embark on more road shows at other industrial estates. Road shows aside, BWG is likely to win a contract to remove and dispose around 100,000-200,000 tons of waste at Praeksa landfill as it is the only capable industrial waste management firm to do this kind of work.

In addition to a 10%-15% increase in service fees, BWG aims to boost the proportion of high-margin income from hazardous industrial waste disposal service to 70% of total revenue this year from 55% last year. This year BWG would also earn an additional stream of revenue from its refuse-derived fuel (RDF) project, which started late last year. On this basis, strong earnings growth momentum is set to continue this year. BWG also announced a dividend of Bt0.11/share for its CY13 operating performance. The stock will trade ex-dividend (XD) on May 9, 2014. We call BWG shares a ‘BUY’ with a Bt4.28/share target price based on a P/E multiple of 12x.



Support: Bt3.30-Bt3.24



Chularat Hospital - CHG

Rating Accumulate









52 w eek range 8.1 - 12


18.1

11.2

10.3

Valuation Method

DCF (Wacc=9.67%, Terminal g=4%)

CG Report - 2013

N/R

3. Mr. Apieum Panyapol

1. Ms Kannikar Palussin

2. Mrs Kobkul Panyapol

0.00

5.00

10.00

15.00

20.00

Mar-1

3

Apr-1

3

May-1

3

Jun-1

3

Jul-1

3

Aug-1

3

Sep-1

3

Oct-1

3

Nov-1

3

Dec-1

3

Jan-1

4

Feb-1

4

Mar-1

4

0102030405060708090

Volume, mn CHG TB EQUITY SETI rebased



12/12 A 335.01 0.38 0.51 1.28 29.82 28.42 4.72 8.44 12/13 A 414.38 0.38 0.27 2.40 15.70 28.42 2.50 4.50 12/14 E 488.26 0.44 0.31 2.71 16.39 24.55 2.87 3.99 12/15 E 538.97 0.49 0.34 2.89 16.97 22.04 3.15 3.74


Chularat Hospital - CHG

CHG plans to build a new Chularat Akanae Hospital in Prachinburi Province to tap clients around industrial estates including the like of Rojana Industrial Estate, Kabinburi Industrial Estate, and 304 Industrial Park. The new hospital will have 20 OPD examination rooms and 100-150 IPD beds. It is slated for partial opening with two OPD examination rooms and four ER beds in Apr 2014. Once construction is fully completed, the hospital can accommodate up to 100,000 patients under government schemes. The hospital is scheduled for full opening over the next two years in Apr 2016.

The Chularat Hospital 3 (CHG3) is the first privately-run hospital with an integrated heart center to join government healthcare schemes. It is expected that the increasing number of patients under the government’s Bt30 universal healthcare scheme will be referred to CHG.

This year CHG also plans to add 48 IPD beds to the capacity of Chularat Hospital 11 (CHG11), bringing the total number of beds to 434, a move that could allow it to accommodate more patients under government schemes. The number of insured patients under government schemes at CHG rose to 321,933 as of Feb 16, 2014 from 309,624 in 3QCY13. CHG has a maximum capacity to accommodate 360,000 insured patients under government schemes and the figure could rise further after it adds more IPD beds to its capacity this year.

Our forecast suggests CHG will achieve a CY14 net profit of Bt488.19mn, up 17.81% y-y based on assumptions that gross profit margin will expand to 36% in CY14 from 34.89% in CY13.



Support: Bt10.30



Minor International - MINT

Rating Buy










52 w eek range 18.4 - 29.75


16.5

11.9

9.0

Valuation Method

DCF (WACC = 8.80%, Terminal g = 3.50%)

CG Report - 2013

(Excellent)

1. MINOR HOLDING (THAILAND) CO.LTD.

2. UBS AG SINGAPORE BRANCH

3. THAI NVDR CO.LTD.

0.00

10.00

20.00

30.00

40.00

Mar-1

3

Apr-1

3

May-1

3

Jun-1

3

Jul-1

3

Aug-1

3

Sep-1

3

Oct-1

3

Nov-1

3

Dec-1

3

Jan-1

4

Feb-1

4

Mar-1

4

0

1

2

3

4

5

Volume, mn MINT TB EQUITY SETI rebased



12/12 A 3,408.55 0.94 0.30 4.85 20.05 26.45 1.21 5.12

12/13 A 4,101.38 1.04 0.35 6.27 23.76 23.73 1.41 3.96

12/14 E 4,526.99 1.13 0.36 7.29 23.43 21.92 1.46 3.40

12/15 E 5,304.06 1.33 0.42 8.22 24.87 18.71 1.71 3.02


Minor International - MINT

In addition to tourism promotion by the Tourism Authority of Thailand (TAT), the upcoming Songkran Festival and the summer school break may provide a boost to tourism, consumption and hotel occupancy rate in the month of Apr.

MINT has a competitive edge over its rival in terms of its well-diversified revenue profile. Hotel and restaurant businesses contribute 49% and 41% of its total revenue respectively. Revenue contribution from its hotels in Bangkok accounts for a mere 7% of total revenue. The proportion of revenue from overseas operations has also risen to 29% of total revenue.

In view of continued business diversification into overseas markets and the prospect of a rapid recovery in tourism after the end of the political crisis, management remains confident about its operating outlook this year. MINT would also continue to press ahead with its expansion plan in hotel, restaurant and real estate businesses.

Our forecast suggests MINT will deliver a CY14 net profit of Bt4,527mn, up 10% y-y. MINT also announced a dividend of Bt0.35/share for its CY13 performance. The stock will trade ex-dividend (XD) on Apr 11, 2014. We rate MINT shares a ‘BUY’ with a Bt30/share target price.

Political factor remains a key factor to watch. In our view, much of its weak earnings outlook for 1HCY14 appears to have already been baked into the stock price and we see current share price weakness as a good opportunity to accumulate the stock which offers some upside from current trading levels.



Support: Bt24.00



Economic calendar for Apr 2014

Apr 1 Apr 2 Apr 3 Apr 4

• US: Markit US

manufacturing PMI,

construction spending,

total vehicle sales

• CH: Manufacturing PMI

• EU: Markit Euro-zone

manufacturing PMI

• TH: CPI

• US: MBA

mortgage

applications,

factory orders

• EU: PPI

• US: Trade balance, initial jobless

claims, ISM non-manufacturing

composite

• CH: Non-manufacturing PMI

• EU: Markit Eurozone services

PMI, retail sales, ECB interest rate

decision

• US: Change in

nonfarm

payrolls,

unemployment

rate

• EU: Markit

Eurozone retail

PMI

Apr 7 Apr 8 Apr 9 Apr 10 Apr 11

• EU: Sentix

investor

confidence

• US: MBA

mortgage

applications,

wholesale

inventories

• US: Fed minutes from Mar 18-19

FOMC meeting, initial jobless

claims, import price index

• CH: Trade balance, new Yuan

loans, aggregate financing RMB

• EU: ECB monthly report

• TH: Consumer confidence

• US: PPI final

demand,

University of

Michigan

confidence

• CH: PPI, CPI

Source: Bloomberg




• US: Retail sales

advance,

business

inventories

• EU: Industrial

production

• US: CPI

• EU: Trade balance

• US: MBA mortgage

applications, housing

starts

• CH: Retail sales,

industrial production,

GDP

• EU: CPI

• US: Federal Reserve

Beige Book, initial

jobless claims

• EU: ECB current

account,

• TH: Car cales

• CH: Mar

property prices


• US: Richmond Fed

manufacturing

index, existing

home sales

• EU: Construction

output, consumer

confidence

US: MBA mortgage

applications, Markit US

manufacturing PMI, new

home sales

CH: HSBC China

manufacturing PMI

EU: Markit Eurozone

manufacturing PMI,

Markit Eurozone services

PMI, Markit Eurozone

composite PMI

TH: BoT benchmark

interest rate decision

• US: Durable goods

orders, initial jobless

claims

• TH: Customs trade

balance

• US: Markit US

composite

PMI, Markit

US services

PMI,

University of

Michigan

confidence

Source: Bloomberg



Apr 28 Apr 29 Apr 30

• US: Pending

home sales,

employment cost

index revisions

• TH: Capacity

utilization,

manufacturing

production index

• US: S&P/CS

composite-20,

consumer

confidence index

• EU: Economic

confidence

US: MBA mortgage

applications, GDP

EU: Core CPI

TH: Trade balance,

BoP current account

balance, business

sentiment index

Source: Bloomberg


Investment return calculation principles

Model portfolio performance

in Mar 2014

PSR portfolio at +4.98% vs. SET index at +3.84%

Top three gainers/outperformers

KCE, TTA, CPALL

Top three losers/underperformers

SCC, PTTGC, ASP

Cumulative model portfolio

performance for the period of

Jan-Mar 2014

PSR portfolio at +12.74% vs. SET index at +5.97%

Duration of holding period 1 month

Number of recommended stocks 10-15 stocks

Investment rating ‘BUY’ only

Calculation of investment returns Buying and selling at the closing price of the month.

Dividend is included in the calculation if the holding period for

portfolio covers XD date.

denniswu

Typewriter

denniswu

Typewriter

denniswu

Typewriter

Dennis Wu

denniswu

Typewriter

Local Property

denniswu

Typewriter

[email protected]

PHILLIP RESEARCH STOPHILLIP RESEARCH STOPHILLIP RESEARCH STOPHILLIP RESEARCH STOCK SELECTION SYSTEMSCK SELECTION SYSTEMSCK SELECTION SYSTEMSCK SELECTION SYSTEMS

We do not base our recommendations entirely on the above quantitative return bands. We consider qualitative factors like (but not limited to) a stock's risk reward profile, market sentiment, recent rate of share price appreciation, presence or absence of stock price catalysts, and speculative undertones surrounding the stock, before making our final recommendation

GENERAL DISCLAIMERGENERAL DISCLAIMERGENERAL DISCLAIMERGENERAL DISCLAIMER

This publication is prepared by Phillip Securities (Hong Kong) Ltd (“Phillip Securities”). By receiving or reading this publication, you agree to be bound

by the terms and limitations set out below.

This publication shall not be reproduced in whole or in part, distributed or published by you for any purpose. Phillip Securities shall not be liable for any

direct or consequential loss arising from any use of material contained in this publication.

The information contained in this publication has been obtained from public sources which Phillip Securities has no reason to believe are unreliable

and any analysis, forecasts, projections, expectations and opinions (collectively the “Research”) contained in this publication are based on such

information and are expressions of belief only. Phillip Securities has not verified this information and no representation or warranty, express or implied,

is made that such information or Research is accurate, complete or verified or should be relied upon as such. Any such information or Research

contained in this publication is subject to change, and Phillip Securities shall not have any responsibility to maintain the information or Research made

available or to supply any corrections, updates or releases in connection therewith. In no event will Phillip Securities be liable for any special, indirect,

incidental or consequential damages which may be incurred from the use of the information or Research made available, even if it has been advised of

the possibility of such damages.

Any opinions, forecasts, assumptions, estimates, valuations and prices contained in this material are as of the date indicated and are subject to

change at any time without prior notice.

This material is intended for general circulation only and does not take into account the specific investment objectives, financial situation or particular

needs of any particular person. The products mentioned in this material may not be suitable for all investors and a person receiving or reading this

material should seek advice from a financial adviser regarding the suitability of such products, taking into account the specific investment objectives,

financial situation or particular needs of that person, before making a commitment to invest in any of such products.

This publication should not be relied upon as authoritative without further being subject to the recipient’s own independent verification and exercise of

judgment. The fact that this publication has been made available constitutes neither a recommendation to enter into a particular transaction nor a

representation that any product described in this material is suitable or appropriate for the recipient. Recipients should be aware that many of the

products which may be described in this publication involve significant risks and may not be suitable for all investors, and that any decision to enter

into transactions involving such products should not be made unless all such risks are understood and an independent determination has been made

that such transactions would be appropriate. Any discussion of the risks contained herein with respect to any product should not be considered to be a

disclosure of all risks or a complete discussion of such risks.

Nothing in this report shall be construed to be an offer or solicitation for the purchase or sale of a security. Any decision to purchase securities

mentioned in this research should take into account existing public information, including any registered prospectus in respect of such security.

Disclosure of InterestDisclosure of InterestDisclosure of InterestDisclosure of Interest Analyst Disclosure: Neither the analyst(s) preparing this report nor his associate has any financial interest in or serves as an officer of the listed

corporation covered in this report.

Firm’s Disclosure: Phillip Securities does not have any investment banking relationship with the listed corporation covered in this report nor any

financial interest of 1% or more of the market capitalization in the listed corporation. In addition, no executive staff of Phillip Securities serves as an

officer of the listed corporation.

AvailabilityAvailabilityAvailabilityAvailability The information, tools and material presented herein are not directed, intended for distribution to or use by, any person or entity in any jurisdiction or

country where such distribution, publication, availability or use would be contrary to the applicable law or regulation or which would subject Phillip

Securities to any registration or licensing or other requirement, or penalty for contravention of such requirements within such jurisdiction.

Information contained herein is based on sources that Phillip Securities (Hong Kong) Limited (“PSHK”) believed to be accurate. PSHK does not bear

responsibility for any loss occasioned by reliance placed upon the contents hereof. PSHK (or its affiliates or employees) may have positions in

relevant investment products. For details of different product's risks, please visit the Risk Disclosures Statement on http://www.phillip.com.hk.

© 2013 Phillip Securities (Hong Kong) Limited

Total ReturnTotal ReturnTotal ReturnTotal Return RecommendationRecommendationRecommendationRecommendation RatingRatingRatingRating RemarksRemarksRemarksRemarks >+20%>+20%>+20%>+20% BuyBuyBuyBuy 1111 >20% upside from the current price>20% upside from the current price>20% upside from the current price>20% upside from the current price

+5% to +20%+5% to +20%+5% to +20%+5% to +20% AccumulateAccumulateAccumulateAccumulate 2222 +5% to +20%upside from the curren+5% to +20%upside from the curren+5% to +20%upside from the curren+5% to +20%upside from the current pricet pricet pricet price ----5% to +5%5% to +5%5% to +5%5% to +5% NeutralNeutralNeutralNeutral 3333 Trade within ± 5% from the current priceTrade within ± 5% from the current priceTrade within ± 5% from the current priceTrade within ± 5% from the current price ----5% to 5% to 5% to 5% to ----20%20%20%20% ReduceReduceReduceReduce 4444 ----5% to 5% to 5% to 5% to ----20% downside from the current price20% downside from the current price20% downside from the current price20% downside from the current price

<<<<----20%20%20%20% SellSellSellSell 5555 >20%downside from the current price>20%downside from the current price>20%downside from the current price>20%downside from the current price

Contact Information (Regional Member Companies)

SINGAPORE

Phillip Securities Pte Ltd

Raffles City Tower

250, North Bridge Road #06-00

Singapore 179101

Tel : (65) 6533 6001

Fax : (65) 6535 6631

Website: www.poems.com.sg

MALAYSIA

Phillip Capital Management Sdn Bhd

B-3-6 Block B Level 3 Megan Avenue II,

No. 12, Jalan Yap Kwan Seng, 50450

Kuala Lumpur

Tel (603) 21628841

Fax (603) 21665099

Website: www.poems.com.my

HONG KONG

Phillip Securities (HK) Ltd

Exchange Participant of the Stock Exchange of Hong Kong

11/F United Centre 95 Queensway

Hong Kong

Tel (852) 22776600

Fax (852) 28685307 Websites: www.phillip.com.hk

JAPAN

PhillipCapital Japan K.K.

Nagata-cho Bldg.,

8F, 2-4-3 Nagata-cho,

Chiyoda-ku, Tokyo 100-0014

Tel (81-3) 35953631

Fax (81-3) 35953630

Website:www.phillip.co.jp

INDONESIA

PT Phillip Securities Indonesia

ANZ Tower Level 23B,

Jl Jend Sudirman Kav 33A

Jakarta 10220 – Indonesia

Tel (62-21) 57900800

Fax (62-21) 57900809

Website: www.phillip.co.id

CHINA

Phillip Financial Advisory (Shanghai) Co. Ltd

No 550 Yan An East Road,

Ocean Tower Unit 2318,

Postal code 200001

Tel (86-21) 51699200

Fax (86-21) 63512940 Website: www.phillip.com.cn

THAILAND

Phillip Securities (Thailand) Public Co. Ltd

15th Floor, Vorawat Building,

849 Silom Road, Silom, Bangrak,

Bangkok 10500 Thailand

Tel (66-2) 6351700 / 22680999

Fax (66-2) 22680921 Website www.phillip.co.th

FRANCE

King & Shaxson Capital Limited

3rd Floor, 35 Rue de la Bienfaisance 75008

Paris France

Tel (33-1) 45633100

Fax (33-1) 45636017

Website: www.kingandshaxson.com

UNITED KINGDOM

King & Shaxson Capital Limited

6th Floor, Candlewick House, 120 Cannon Street, London, EC4N 6AS Tel (44-20) 7426 5950 Fax (44-20) 7626 1757

Website: www.kingandshaxson.com

UNITED STATES

Phillip Futures Inc

141 W Jackson Blvd Ste 3050 The Chicago Board of Trade Building

Chicago, IL 60604 USA Tel +1.312.356.9000 Fax +1.312.356.9005

AUSTRALIA

PhillipCapital Australia

Level 37, 530 Collins Street, Melbourne, Victoria 3000, Australia

Tel (613) 96298380 Fax (613) 96148309

Website: www.phillipcapital.com.au

editor: kevin cheng tel: (852) 2277 6626 email...

Documents