22 February 2011 Asia Equities Daily Focus Periodicalimg.jrjimg.cn/2011/02/20110222141706710.pdfAsia Pan-Asia Strategy 22 February 2011 Asia Equities Daily Focus Today's research headlines

Asia Pan-Asia Strategy

22 February 2011

Asia Equities Daily Focus Today's research headlines Asian Edition

Deutsche Bank AG/Hong Kong

All prices are those current at the end of the previous trading session unless otherwise indicated. Prices are sourced from local exchanges via Reuters, Bloomberg and other vendors. Data is sourced from Deutsche Bank and subject companies. Deutsche Bank does and seeks to do business with companies covered in its research reports. Thus, investors should be aware that the firm may have a conflict of interest that could affect the objectivity of this report. Investors should consider this report as only a single factor in making their investment decision. DISCLOSURES AND ANALYST CERTIFICATIONS ARE LOCATED IN APPENDIX 1. MICA(P) 007/05/2010

Periodical

Asian Index Closings EQUITIES Close 1D Chg %Chg

SHSZ300 3257.91 1.43 4.14 HSCEI 12651.38 -0.72 -0.32 HSI 23485.42 -0.47 1.95 TWSE 8839.22 -0.05 -1.49 KOSPI 2005.30 -0.39 -2.23 FSSTI 3070.60 -0.53 -3.74 KLCI 1525.85 0.55 0.46 SENSEX 18438.31 1.25 -10.10 NIFTY 5518.60 1.09 -10.04 SET 995.67 0.01 -3.59 JCI 3497.64 -0.11 -5.56 PCOMP 3837.44 -0.36 -8.66 ASX200 4900.00 -0.74 3.26 FOREX (vs US$) Close 1D Chg YTD %Chg Rmb 6.57 0.08 0.57 HK$ 7.78 0.01 -0.14 NT$ 29.35 0.13 -0.17 Won 1118.03 -0.53 0.71 S$ 1.28 -0.14 0.62 M$ 3.04 -0.03 0.92 Rupee 44.99 0.48 -0.64 Baht 30.53 0.07 -1.54 Rupiah 8858.00 0.14 1.56 Peso 43.43 -0.21 0.86 A$ 1.01 -0.50 -1.34

Source: Bloomberg Finance LP

Latest Commodity Prices COMMODITIES Close 1D %Chg YTD %Chg West Texas 86.20 -0.19 -5.67 Brent 107.44 5.14 13.93 CRB 341.78 0.00 2.70 Copper 447.85 -0.03 0.88 Gold (Spot) 1406.45 1.22 -1.01 Alum. (LME) 2568.00 2.23 3.97 Baltic Dry 1301.00 0.70 -26.62

Source: Bloomberg Finance LP

DB CORPORATE ACCESS DB Access Philippines Corporate Day - SG 2/22 - 23, HK 2/24 DB Access Thailand Corporate Day - SG 3/3 - 4 DB Access India Conference 2011 - Mumbai 3/7 - 9 DB Access Asia Conference 2011 - Singapore 5/23 - 26 DB Access Taiwan Conference 2011 - Taipei 11/7 - 8 DB Access Korea Conference 2011 - Seoul 11/10 - 11

Research Team

Carissa Szeto Equity Focus (+852) 2203 6171 [email protected] Ching-Li Teo, CFA Equity Focus (+852) 2203 6206 [email protected]

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TOP STORIES Indonesia Cement Sector On course for stronger demand Rachman

Koeswanto Page 5

Parkson Retail Group (3368.HK) HKD11.96 Hold Price Target HKD13.60

2011: a year of investment and growing pains; Hold Mabel Wong Page 6

ESTIMATE & TARGET PRICE CHANGES

Anta (2020.HK),HKD12.26 Buy Price Target HKD17.40

Solid FY10 results, maintaining Buy Rebecca Jiang Page 7

Malayan Banking (MBBM.KL),MYR8.86 Hold Price Target MYR8.75

Low credit costs boost 2Q11 result Andrew Hill

Page 8

Cairn India (CAIL.BO),INR319.15 Buy Price Target INR400.00

Factoring higher Brent oil priceestimates

Harshad Katkar Page 9

Indocement (INTP.JK),IDR15,300.00 Buy Price Target IDR17,200.00

Weaker earnings due to lower-than-expected price increase

Rachman Koeswanto Page 10

Holcim Indonesia (SMCB.JK),IDR1,940.00 Buy Price Target IDR2,150.00

Lower earnings on weaker-than-expected price increase


Semen Gresik (SMGR.JK),IDR8,700.00 Buy Price Target IDR10,400.00

Earnings revision on lower-than-expected price increase


LPN (LPN.BK),THB9.10 Buy Price Target THB12.40

4Q10 earnings hit new record ofBt570m

Worawat Saisuphatphol Page 13

STRATEGY/ECONOMICS

Asia Economics Daily Thailand: Sustained growth and rising inflation point to rate hikes

Juliana Lee Page 14

China Rates China hiked RRR for the second time this year

Linan LiuPage 18

India Rates Budget preview: Tall order on financing

Sameer GoelPage 19

Global Commodities Daily Eye on supply Soozhana Choi

Page 20

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22 February 2011 Strategy Asia Equities Daily Focus

Page 2 Deutsche Bank AG/Hong Kong

ADDITIONAL RESEARCH

China TMT DailyDB CONFERENCE/CORPORATE DAY

Winning local marketing; also 0728, 0941, 0700, BIDU, 1688

Alan Hellawell III Page 22

Alibaba.com Limited (1688.HK),HKD16.68 Hold Price Target HKD17.21

DB Access Philippines Corporate Day - SG 2/22 - 23, HK 2/24 DB Access Thailand Corporate Day - SG 3/3 - 4

CEO, COO resign Alan Hellawell III Page 23

China Comm Services (0552.HK),HKD5.43 Hold Price Target HKD5.20

DB Access India Conference 2011 - Mumbai 3/7 - 9 DB Access Asia Conference 2011 - Singapore 5/23 - 26 DB Access Taiwan Conference 2011 - Taipei 11/7 - 8 DB Access Korea Conference 2011 - Seoul 11/10 - 11

Capex expectations overdone Eva Leung Page 24

China Mobile (0941.HK),HKD73.80 Hold Price Target HKD87.00

NDRs Zee Entertainment Enterprises (Z IN) - HK 2/22, SG 2/23 - 24 Anta Sports Products (2020 HK) - HK 2/22 - 23 PT Energi Mega Persada (ENRG IJ) - HK 2/22, SG 2/23

Solid Jan, pre-Chinese New Years Alan Hellawell III Page 25

China Prop Weekly Monitor

New World Department Store China (825 HK) - HK 2/24 Volume continued rebounding to run ahead of restriction

Tony Tsang Page 26

China Telecom (0728.HK),HKD4.51 Buy Price Target HKD5.40

Hang Seng Bank (11 HK) - HK 3/2 China High Precision (591 HK) - HK 3/3 Mindray International (MR US) - HK 3/2 - 3 West China Cement Ltd (2233 HK) - HK 3/4 & 7, SG 3/8 - 9 The best for last; CT Jan net adds Alan Hellawell III

Page 27 Nan Ya Printed Circuit Board Corp (8046 TT) - Shenzhen & HK 3/7, HK 3/8 - 9 NEW: AIA Group Limited (1299.HK) - SG 3/9 Lianhua (0980.HK) - HK 3/10 - 11 SJM Holdings Ltd (880 HK) - HK 3/17 - 18 China Overseas Land & Investment (688 HK) - HK 3/18

Hang Seng Bank (0011.HK),HKD122.60 Buy Price Target HKD140.00

HSB will discontinue HIBOR-based mortgage loans; positive

Sophia LeePage 28

China Resources Power (836 HK) - HK 3/18 & 21 China Longyuan Power Group Corp (916 HK) - SG 3/21 - 22 Sun King Power Electronics Group (580 HK) - HK 3/22 NEW: Wumart Stores, Inc. (8277 HK) - HK 3/23 Little Sheep Group (968 HK) - HK 3/23 - 24

Siliconware Precision (2325.TW),TWD40.25 Buy Price Target TWD50.00

Continued fundamental improvement; retaining Buy

Michael Chou Page 29

Hardware & Equipment Korea LCD: 2H February panel price update

Sc Bae Page 30

Singapore Telecom (STEL.SI),SGD2.94 Hold Price Target SGD3.31

Still range-bound

China SCE Property Holdings (1966 HK) - HK 3/28 - 29, SG 3/30 PT Nippon Indosari Corpindo (ROTI IJ) - HK 4/4 H TC Corporation (2498 TT) - SG 6/21 - 22, HK 6/23 - 24

DB ANALYST/SALES ROADSHOWS William Bratton

Page 31

Construction Materials Cement companies could attempt pass-through of cost push

Chockalingam Narayanan Page 32

Nestle India Limited (NEST.BO),INR3,480.00 Buy Price Target INR4,200.00

Raymond Kosasih & Arinta Harsono: Indonesian Banking - Elevated Loan Growth - SG 2/22 - 23 Chanik Park: Korea Strategy - SG 2/212, HK 2/23 - 25 Wei-Shi Wu: Singapore/Malaysia Telecoms - Wiring up the Nation: the Telecoms Transformation - HK 2/24 Reggy Susanto: Indonesia Consumer - Rising Confidence Amidst Inflationary Headwinds - HK 2/28 & 3/1, SG 3/2 - 4

Bucks the trend on gross margins, Maintain Buy

Harrish Zaveri

Page 33

Pantaloon Retail India Ltd (PART.BO) INR270.60 Hold Price Target INR250.00

Still in an an investment mode. Maintain Hold

Harrish Zaveri

Page 34

David Hurd: China Oil - HK 2/28 & 3/1, SG 3/2 - 4 Anne Ling, Mabel Wong, Rebecca Jiang & Chen Feng: 2011 HK/China Consumer Sector Outlook & Recommendations - PEK 3/3, SHA 3/4 Sanjeev-R Rana: Korean Auto/Shipbuilding Companies - SG 3/7 - 8, HK 3/9 - 10

DB INTERNATIONAL PRODUCT ROADSHOWS

Astra Int'l (ASII.JK),IDR52,050.00 Buy Price Target IDR79,000.00

Yamaha 2-wheeler capacity expansion in Indonesia


United Tractors (UNTR.JK),IDR23,450.00 Buy Price Target IDR27,600.00

Record high heavy equipment sales in January 2011


Sino-Thai Engineering (STEC.BK),THB13.30 Buy Price Target THB17.00

4Q10 result exceeds our forecast Sansanee Srijamjuree Page 37

Jollibee Foods Corp (JFC.PS),PHP79.00 Hold Price Target PHP80.00

2010 results Michael Bengson

Francesca DiPasquantonio: Luxury Goods - SEL 2/22, HK 2/23 Pirelli & C SpA (PC IM) - HK 2/22, PEK 2/23 Daimler AG (DAI GR) - SEL 2/23 ThermoFisher Scientific (TMO US) - SG 3/1, PEK 3/2, HK 3/3 - 4 Omnicom Group Inc (OMC US) - SG 3/2 - 3 Toronto Dominion Bank (TD US) - PEK 3/7, SEL 3/8, HK 3/9 - 10, SG 3/11 Corning Incorporated (GLW US) - SG 3/14, HK 3/15, PEK 3/16 Bill Dreher: Broadline Retailing - SG 3/22, PEK 3/23, SEL 3/24 CIGNA Corp (CI US) - HK 3/25 Binky Chadha & Keith Parker: US Equity Strategy - HK 4/6, SG 4/8

Page 38

Manila Water (MWC.PS),PHP17.80 Buy Price Target PHP21.50

FY10 profit in line but EBITDA disappoints

Klyne Resullar Page 39

GLOBAL RESEARCH

Nissan Motor (7201.T),¥877 Buy Price Target ¥1,100

"V" is for Versatility; Nissan's quest for global expansion

Kurt Sanger Page 40

The notes and reports contained in this Daily are all excerpts of previously published documents. Please refer to the published notes on our web site for details on risks, valuations and earnings changes

Rod Lache: US Auto Industry - PEK 4/11, HK 4/14, SG 4/15

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Deutsche Bank AG/Hong Kong Page 3

DAILY REVISIONS: RATING CHANGES

Company Ticker Date New Previous

Realtek Semiconductor 2379.TW 18-Feb ▲ Hold Sell

TARGET PRICE CHANGES

Company Ticker Date New Previous Chg (%)

Anta [Buy] 2020.HK 21-Feb ▼ 17.40 19.00 -8.4Bangkok Bank [Buy] BBL.BK 18-Feb ▲ 198.00 193.00 2.6CNOOC Ltd [Buy] 0883.HK 20-Feb ▲ 21.10 21.00 0.5Cairn India [Buy] CAIL.BO 21-Feb ▲ 400.00 385.00 3.9First Financial [Hold] 2892.TW 20-Feb ▼ 25.50 25.70 -0.8Holcim Indonesia [Buy] SMCB.JK 21-Feb ▼ 2,150.00 2,825.00 -23.9IBK [Buy] 024110.KS 20-Feb ▼ 24,000.00 25,000.00 -4.0Indocement [Buy] INTP.JK 21-Feb ▼ 17,200.00 20,500.00 -16.1LPN [Buy] LPN.BK 21-Feb ▲ 12.40 12.00 3.3MIE Holdings Corp [Buy] 1555.HK 20-Feb ▼ 4.09 4.16 -1.7Malayan Banking [Hold] MBBM.KL 21-Feb ▲ 8.75 8.00 9.4Parkson Retail Group [Hold] 3368.HK 21-Feb ▼ 13.60 13.80 -1.4PetroChina [Hold] 0857.HK 20-Feb ▲ 10.22 9.87 3.5Semen Gresik [Buy] SMGR.JK 21-Feb ▼ 10,400.00 11,900.00 -12.6Sinopec-H [Buy] 0386.HK 20-Feb ▲ 9.41 9.20 2.3SouFun [Buy] SFUN.N 18-Feb ▼ 21.75 87.00 -75.0

EPS REVISIONS

Company Ticker Date FY New Previous Chg (%)

Anta [Buy] 2020.HK 21-Feb Dec 10 ▼ 0.61 0.63 -2.6 Dec 11 ▼ 0.74 0.75 -1.4 Dec 12 ▼ 0.84 0.87 -4.3 Dec 13 0.99 Bangkok Bank [Buy] BBL.BK 18-Feb Dec 10 ▲ 12.93 12.91 0.1 Dec 11 ▲ 14.97 14.07 6.4 Dec 12 ▲ 16.99 16.13 5.3 Dec 13 0.00 CNOOC Ltd [Buy] 0883.HK 20-Feb Dec 11 ▲ 1.31 1.21 8.4 Dec 12 ▲ 1.28 1.18 8.8Cairn India [Buy] CAIL.BO 21-Feb Mar 11 ▲ 30.47 29.72 2.5 Mar 12 ▲ 57.37 56.94 0.8 Mar 13 ▲ 54.76 54.00 1.4China Medical Tech [Buy] CMED.OQ 20-Feb Mar 11 ▼ 10.00 10.05 -0.5 Mar 12 ▼ 10.43 10.83 -3.7 Mar 13 ▼ 13.28 14.65 -9.4First Financial [Hold] 2892.TW 20-Feb Dec 10 ▼ 1.10 1.15 -4.1 Dec 11 ▼ 1.54 1.68 -8.2 Dec 12 ▼ 1.91 2.03 -5.9Holcim Indonesia [Buy] SMCB.JK 21-Feb Dec 10 ▲ 119.37 116.70 2.3 Dec 11 ▼ 132.20 157.73 -16.2 Dec 12 ▼ 149.75 202.55 -26.1IBK [Buy] 024110.KS 20-Feb Dec 09 0.00 nm Dec 10 0.00 nm Dec 11 0.00 nm Dec 12 0.00 nmIndocement [Buy] INTP.JK 21-Feb Dec 10 ▼ 875.76 899.02 -2.6 Dec 11 ▼ 982.94 1,219.34 -19.4 Dec 12 ▼ 1,227.04 1,607.97 -23.7LPN [Buy] LPN.BK 21-Feb Dec 10 ▲ 1.10 1.00 10.3 Dec 11 ▲ 1.23 1.13 8.7 Dec 12 ▲ 1.46 1.30 11.6 Dec 13 1.58



DAILY REVISIONS: Company Ticker Date New Previous Chg (%)

MIE Holdings Corp [Buy] 1555.HK 20-Feb Dec 11 ▲ 0.30 0.28 6.5 Dec 12 ▼ 0.39 0.39 -1.3Malayan Banking [Hold] MBBM.KL 21-Feb Jun 11 ▲ 0.61 0.57 5.4 Jun 12 ▲ 0.65 0.62 5.3 Jun 13 ▲ 0.69 0.66 4.1OCBC [Buy] OCBC.SI 18-Feb Dec 10 ▼ 0.69 0.72 -3.6 Dec 11 ▼ 0.77 0.78 -1.9 Dec 12 ▼ 0.85 0.86 -1.2 Dec 13 0.95 Parkson Retail Group [Hold] 3368.HK 21-Feb Dec 10 ▼ 0.35 0.37 -3.3 Dec 11 ▼ 0.42 0.44 -4.9 Dec 12 ▼ 0.51 0.53 -4.6 Dec 13 0.63 PetroChina [Hold] 0857.HK 20-Feb Dec 11 ▲ 0.93 0.85 8.7 Dec 12 ▲ 1.00 0.94 7.1Realtek Semiconductor [Hold] 2379.TW 18-Feb Dec 10 ▼ 3.46 3.89 -11.0 Dec 11 ▲ 4.25 4.25 0.0 Dec 12 ▼ 4.71 4.73 -0.3Semen Gresik [Buy] SMGR.JK 21-Feb Dec 10 ▲ 609.33 591.62 3.0 Dec 11 ▼ 696.93 753.36 -7.5 Dec 12 ▼ 823.05 914.49 -10.0Sino-Thai Engineering [Buy] STEC.BK 21-Feb Dec 10 ▲ 0.37 0.36 3.6 Dec 13 0.73 Sinopec-H [Buy] 0386.HK 20-Feb Dec 11 ▲ 0.99 0.92 7.9 Dec 12 ▲ 1.00 0.94 6.8SouFun [Buy] SFUN.N 18-Feb Dec 09 ▼ 0.68 2.73 -75.0 Dec 10 ▼ 0.65 2.60 -75.0 Dec 11 ▼ 1.05 4.17 -74.9 Dec 12 ▼ 1.29 5.11 -74.8

Source: Deutsche Bank

Asia ASEAN Indonesia Resources Construction Materials

21 February 2011

Indonesia Cement Sector On course for stronger demand

Rachman Koeswanto PT Deutsche Bank Verdhana Indonesia Research Analyst (+62) 21 318 9524 [email protected]

Reiterate Overweight stance on Indonesia cement sector We remain bullish on the Indonesian cement sector as we expect strong cement demand and tight demand-supply dynamics to remove concerns over aggressive capacity expansion and rising cost pressures. Meanwhile, we believe a pickup in cement demand in 2Q-3Q11 could encourage cement companies to increase prices further, thereby protecting their profitability from rising energy prices. Our top picks in the sector are Semen Gresik and Indocement.


Industry Update

Top picks Semen Gresik (SMGR.JK),IDR8,750.00 Buy Indocement (INTP.JK),IDR15,650.00 Buy

Companies featured

Indocement (INTP.JK),IDR15,650.00 Buy 2009A 2010E 2011E

P/E (x) 10.6 17.9 15.9EV/EBITDA (x) 6.3 11.1 9.4Price/book (x) 4.72 4.40 3.66Holcim Indonesia (SMCB.JK),IDR1,940.00 Buy

2009A 2010E 2011EP/E (x) 9.1 16.3 14.7EV/EBITDA (x) 5.4 8.4 7.6Price/book (x) 3.58 3.51 2.84Semen Gresik (SMGR.JK),IDR8,750.00 Buy

2009A 2010E 2011EP/E (x) 9.4 14.4 12.6EV/EBITDA (x) 5.5 9.5 8.4Price/book (x) 4.39 4.27 3.59

Not overly concerned on supply glut

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Utilization Demand YoY (RHS)

Capacity: 65mn tons p.a. by 2013F

Regional sales contribution

Jakarta, 9%

E. Java, 13%

W. Java, 19%

C. Java, 12%

Sumatra, 24%

Kalimantan, 7%

Sulawesi, 5%

Eastern Indonesia

8%

Upbeat cement demand outlook We base our upbeat outlook on accelerating economic growth, higher residential property development, an increase in government infrastructure spending and the encouraging progress of the 10GW power project. Moreover, strong bank lending and high consumer confidence, coupled with the forecast that the middle-income population is likely to double by 2015, could bolster growth over the medium term. Overall, we expect new cement supply totaling 13m tons p.a. by 2013F to be absorbed by domestic demand, even with a conservative growth assumption of 6-7% p.a. As such, we do not expect a supply glut. Pricing in only modest price increase We have seen a resumption of price increases since 4Q10, following rising cost pressures. However, given an almost record-high margin and concern over intensifying competition, the cement companies appear hesitant to raise prices aggressively. Therefore, we assume a modest price increase, which might see upside if cement companies assume more aggressive price increases from 2Q onwards in the event of stronger-than-expected demand, given a healthy competitive environment and tight demand-supply situation. Semen Gresik and Indocement are our favourites in the sector We rate Indocement, Semen Gresik and Holcim Indonesia as Buys, with Semen Gresik and Indocement being our favourites in the sector. Semen Gresik delivers the strongest earnings growth among its peers, coupled with superiority in brand equity, distribution and marketing network, and access to the fastest-growing region, the Outer Islands. Meanwhile, Indocement is the most profitable cement company and would be the main beneficiary in the event of surging cement demand, given its ample and flexible capacity, and strong brand equity. Figure 1: Indonesia cement companies Stock Rating Target Upside/ EV/EBITDA (x) PER (x)

Code Price (Downside) 2010F 2011F 2012F 2011F 2012F

Indocement INTP.JK Buy 17,200 19% 11.3 8.6 6.6 14.8 11.8

Holcim Indonesia SMCB.JK Buy 2,150 16% 9.7 7.3 6.7 14.1 12.4

Semen Gresik SMGR.JK Buy 10,400 24% 10.3 8.0 5.9 12.1 10.2

Regional Average 11.3 8.6 6.6 17.3 13.3 Source: Deutsche Bank



Asia China Consumer Retail/Wholesale Trade

22 February 2011

Parkson Retail Group Reuters: 3368.HK Bloomberg: 3368 HK Exchange: HKG Ticker: 3368

2011: a year of investment and growing pains; Hold Mabel Wong, CFA Research Analyst (+852) 2203 6178 [email protected]

New stores' start-up losses dent net profit growth Retain Hold on Parkson as its current valuation looks unattractive on modest earnings growth in 2011. The 2010 results confirm our concern that new store start-up costs offset the operating leverage benefits of mature stores. Parkson has accelerated its store expansion for 2011-13. While the current investment could pave the way for future growth, investors may consider pot. execution risks in relation to traffic flow and store location selection associated with new store openings, translating into a near-term higher risk premium on the stock.

Forecasts and ratios

Year End Dec 31 2009A 2010A 2011E 2012E 2013E

Sales (CNYm) 3,461.3 3,819.4 4,598.4 5,582.0 6,643.4

EBITDA (CNYm) 1,476.6 1,631.1 1,839.5 2,232.3 2,674.7

Reported NPAT (CNYm) 910.8 991.8 1,173.8 1,434.4 1,755.5

DB EPS FD(CNY) 0.32 0.35 0.42 0.51 0.63

OLD DB EPS FD(CNY) 0.32 0.37 0.44 0.53 –

% Change 0.0% -3.3% -4.9% -4.6% –

DB EPS growth (%) 8.0 9.0 18.2 22.1 23.0

PER (x) 28.8 32.2 24.2 19.8 16.1

EV/EBITDA (x) 16.7 18.2 13.5 10.6 8.3

DPS (net) (CNY) 0.15 0.16 0.19 0.23 0.28

Yield (net) (%) 1.6 1.4 1.9 2.3 2.8Source: Deutsche Bank estimates, company data

1 DB EPS is fully diluted and excludes non-recurring items 2 Multiples and yields calculations use average historical prices for past years and spot prices for current and future years, except P/B which uses the year end close


Results

Hold Price at 21 Feb 2011 (HKD) 11.96Price target - 12mth (HKD) 13.6052-week range (HKD) 14.42 - 10.68HANG SENG INDEX 23,485

Key changes

Price target 13.80 to 13.60 -1.4%Sales (FYE) 4,644 to 4,598 -1.0%Op prof margin (FYE) 37.6 to 35.3 -6.1%Net profit (FYE) 1,234.6 to 1,173.8 -4.9%

Price/price relative

4

68

10

12

14

16

2/09 5/09 8/09 11/09 2/10 5/10 8/10 11/10Parkson Retail Group

HANG SENG INDEX (Rebased)

Performance (%) 1m 3m 12mAbsolute -7.6 -12.3 0.5HANG SENG INDEX -1.6 -0.5 18.1

Stock data

Market cap (HKDm) 33,463Market cap (USDm) 4,299Shares outstanding (m) 2,797.9Major shareholders Parkson Holdings (51.62%)Free float (%) 46Avg daily value traded (USDm) 9.230

Key indicators (FY1)

ROE (%) 24.4Net debt/equity (%) 13.0Book value/share (CNY) 1.84Price/book (x) 5.5Net interest cover (x) 43.3Operating profit margin (%) 35.3

2010 results below our/consensus expectations on higher opex ratio 2010 NPAT grew by 8.9% yoy to Rmb991.8m, ~3%/7% below our and consensus estimates, respectively. Although it is positive to see SSS uptick and a stable commission rate, higher-than-expected new store start-up losses offset mature stores’ operating leverage benefits. This is the culprit of slow NPAT growth.

Outlook: new SSS target of 11-12% in 2011; 8-10 new stores pa in 2011-12 Management aims to achieve 11-12% SSS and 20%+ top-line growth in 2011. It targets merchandise gross margin to remain stable, but we expect the jump in new store start-up losses to Rmb120-130m to suppress EBIT growth to the low- to mid-teens. Finance cost savings should drive NPAT growth to high-teens in 2011. As more new stores mature, hopefully 2012 should see stronger NPAT growth. Managed store acquisitions may happen this year but we expect the earnings impact to be limited, given these stores’ lower profitability.

Forecasts/target price cut; maintaining Hold We cut our 2011-12 NPAT forecasts by 5%, mainly to factor in higher-than-expected new store start-up costs due to the accelerated expansion plan. Our DCF-based target price is HKD13.6 (from HKD13.8), assuming a 10.27% WACC and 3% TGR. The DCF value equates to 28x FY11E P/E or 23x FY12E P/E. Key downside risks are competition and macro slowdown; upside risks are good cost control and EPS-accretive M&A.



Asia China Consumer Textiles & Apparel

21 February 2011

Anta Reuters: 2020.HK Bloomberg: 2020 HK Exchange: HSI Ticker: 2020

Solid FY10 results, maintaining Buy Rebecca Jiang, CFA Research Analyst (+852) 2203 6152 [email protected]

Anne Ling Research Analyst (+852) 2203 6177 [email protected]

"Value-for-money" We believe Anta's value-for-money brand positioning and its ongoing investment in brand equity allow it to capture market share and deliver stronger growth. The company continues to report solid results and future order book growth, supported by its retailers' healthy profitability. While we believe sportswear's challenging outlook will weigh on the sector's short-term multiples, we feel the uncertainty has been largely reflected in the recent share price correction. We maintain Buy with a new DCF-based target price of HK$17.4.



Sales (CNYm) 5,874.6 7,408.3 9,315.3 11,181.9 13,045.3

EBITDA (CNYm) 1,458.4 1,821.0 2,286.3 2,671.8 3,273.6

Reported NPAT (CNYm) 1,250.9 1,551.1 1,853.7 2,092.6 2,462.1

Reported EPS FD(CNY) 0.50 0.62 0.74 0.84 0.99

DB EPS FD(CNY) 0.50 0.61 0.74 0.84 0.99

OLD DB EPS FD(CNY) 0.50 0.63 0.75 0.87 –

% Change 0.1% -2.6% -1.4% -4.3% –

DB EPS growth (%) 32.9 21.4 21.5 12.8 18.2

PER (x) 14.6 19.8 14.0 12.4 10.5

EV/EBITDA (x) 9.8 14.2 8.9 7.3 5.7

DPS (net) (CNY) 0.31 0.39 0.45 0.50 0.59




Forecast Change

Buy Price at 21 Feb 2011 (HKD) 12.26Price target - 12mth (HKD) 17.4052-week range (HKD) 18.50 - 10.80HANG SENG INDEX 23,485

Key changes

Price target 19.00 to 17.40 -8.4%Sales (FYE) 9,153 to 9,315 1.8%Op prof margin (FYE) 24.6 to 23.6 -3.9%Net profit (FYE) 1,880.7 to 1,853.7 -1.4%


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2/09 5/09 8/09 11/09 2/10 5/10 8/10 11/10Anta

HANG SENG INDEX (Rebased)

Performance (%) 1m 3m 12mAbsolute -3.6 -15.8 20.0HANG SENG INDEX -1.6 -0.5 18.1

Stock data

Market cap (HKDm) 30,527Market cap (USDm) 3,922Major shareholders Ding SZ and family (69.34%)Free float (%) 29Avg daily value traded (USDm) 12.4Shares outstanding (m) 2,490.0


ROE (%) 30.7Net debt/equity (%) -84.7Book value/share (CNY) 2.58Price/book (x) 4.0Net interest cover (x) –Operating profit margin (%) 23.6

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FY10 results in line Anta reported a 24% yoy increase in net profit to RMB1.55bn. Results are largely in line with our forecasts and slightly ahead of consensus. New store openings came in higher than the company’s revised (up) guidance, by 150 stores for the core Anta brand, which reaffirms our view that Anta’s distributors and retailers are still enjoying strong profitability. The GPM decline in 2H10 (-60bps yoy) came as a slight negative, but is offset by stringent operating cost controls, especially A&P.

Management remains optimistic about outlook Management remains optimistic about industry growth, as well as the company’s growth and margin outlook. We expect the company to fully pass on cost pressures, especially after more aggressive ASP adjustment for 2H11. The slower-than-expected rollout of the Fila business is a slight negative, although we note it does not have much of an impact on the company’s short-term earnings.

New DCF-based target price of HK$17.4; risks include intense competition We have fine-tuned our forecast mainly to reflect the slower store rollout for Fila. Our target price of HK$17.4 is based on a WACC of 9.9% (a 2.9% risk-free rate, 6.7% average China equity-risk premium and beta of 1.05) and a terminal growth rate of 2.5%. Our target price translates into 18x rolling PE and 1.1x PEG. Key risks are competition, higher A&P and failure to revamp the new brands, especially Fila.



Asia ASEAN Malaysia Banking/Finance Banks

21 February 2011

Malayan Banking Reuters: MBBM.KL Bloomberg: MAY MK Exchange: KLS Ticker: MBBM

Low credit costs boost 2Q11 result Andrew Hill, CFA Research Analyst (+65) 6423 8507 [email protected]

Credit quality upside surprise, underlying trends solid, valuation fair While we suspect the very low credit costs are unlikely to persist, operational trends appear quite good with both loans and CASA deposits growing at a robust rate. With this in mind we think the stock is likely to remain well supported, but given a one-year forward PB multiple of 1.9x it is trading around fair value in our view and while we have increased our price target to RM8.75/share we maintain a Hold rating.


Year End Jun 30 2009A 2010A 2011E 2012E 2013E

Pre-prov profit (MYRm) 4,959.9 6,459.6 7,065.8 7,908.0 8,724.5

Net profit (MYRm) 691.9 3,818.2 4,384.4 4,907.2 5,453.5

EPS (MYR) 0.13 0.54 0.61 0.65 0.69

EPS growth (%) -78.0 309.1 12.3 7.0 6.2

PER (x) 43.2 12.9 14.6 13.7 12.9

Price/book (x) 1.68 1.92 2.06 1.89 1.74

DPS (net) (MYR) 0.06 0.41 0.45 0.49 0.52

Yield (net) (%) 1.1 5.9 5.1 5.5 5.8

ROE (%) 3.1 14.5 14.7 14.4 14.1Source: Deutsche Bank estimates, company data



Results

Hold Price at 21 Feb 2011 (MYR) 8.85Price target - 12mth (MYR) 8.7552-week range (MYR) 9.29 - 6.89KLSE COMPOSITE 1,518

Key changes

Price target 8.00 to 8.75 9.4%Provisioning (FYE) 1,259.6 to 1,020.9 -19.0%Net int margin (FYE) 2.39 to 2.39 0.0%Net profit (FYE) 4,119.8 to 4,384.4 6.4%


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2/09 5/09 8/09 11/09 2/10 5/10 8/10 11/10Malayan Banking

KLSE COMPOSITE (Rebased)

Performance (%) 1m 3m 12mAbsolute -4.1 -2.6 24.7KLSE COMPOSITE -3.3 1.4 20.5

Stock data

Market cap (MYRm) 65,476Market cap (USDm) 21,581Shares outstanding (m) 7,078.0Major shareholders PNB (16.8%)Free float (%) 43Avg daily value traded (USDm) 25.7


ROE (%) 14.7Loan/deposit ratio (%) 82.0Book value/share (MYR) 4.30Price/book (x) 2.1NPL/total loans (%) 2.5Net int margin (%) 2.39Adjusted ROE (%) 0.0

Low credit costs in 2Q11, EPS upgraded by 4-5% Maybank reported 2QFY11 net profit of RM1.132bn which was 10% ahead of our estimate and 3% above consensus. Key reason for the upside surprise was much lower than expected credit provisioning of just 21bps. Pre-provision profit was 6% below our estimates and flat QoQ indicating the underlying operational trends are not as strong as the headline number suggests. We’ve increased our EPS by 4-5%, largely reflecting lower credit costs.

DRP boosts tier one by 50bps pa, but is also roughly 4% EPS dilutive We think the dividend reinvestment plan is worthwhile given it reduces the effective dividend payout ratio (to c.18%), thereby conserving capital. But the flipside is EPS dilution which we estimate is likely to be around 4% per annum. While the underlying operational trends have been quite good additional equity issuance clearly curbs the extent of our EPS upgrades.

Revised target price RM8.75/share (from RM8/share) Post forecast revisions and after rolling forward valuation we have increased our price target from RM8/share. Valuation based on Gordon Growth model methodology (PB=(ROEg)/(COE-g)) with 15% sustainable ROE assuming Maybank can return to its long term average ROE, 11% COE, and 5% growth consistent with the peer group and reflecting our expectation of nominal GDP. Main upside risk are higher growth international businesses while the key downside risks are further equity issuance and failure to deliver on potential synergies from recent acquisitions in the region.



Asia IndiaEnergy Oil & Gas

21 Feb 2011 - 03:13:22 PM IST

COMPANY ALERT Forecast Change

Cairn India Buy

Factoring higher Brent oil price estimates

Reuters:CAIL.BO Exchange:BSE Ticker:CAIL

Price (INR) 316.10

Price target (INR) 400.00

52-week range (INR) 355.45 -257.80

Market cap (USDm) 13,268

Shares outstanding (m) 1,897.2

Net debt/equity (%) 4.2

Book value/share (INR) 206.58

Price/book (x) 1.5

FYE 3/31 2010A 2011E 2012E

Sales (INRm) 16,230 101,597 172,776

Net Profit(INRm)

10,511.0 59,222.7 111,496.6

DB EPS(INR)

5.42 30.47 57.37

PER (x) 46.9 10.4 5.5

Yield (net)(%)

0.0 1.0 1.9

Deutsche Bank Brent oil price estimate revised up 4-8% for CY11-15In the Commodities Weekly dated 18 February 2011, Deutsche Bank energyteam has revised Brent oil forecast upwards by 4-8% to US$101-105/bblfor CY11-15. The long-term oil price assumption has also been increased by5% to US$105/bbl. The key reasons for a bullish outlook on oil prices areexpectations of stronger global oil demand driven by Chinese demandgrowth, drawdown of OECD oil inventories and reduction in OPEC sparecapacity.Leads to increase in earnings and valuationsWe are incorporating the new oil price estimates in our operating assump-tions for Cairn India . We now also assume a slower ramp-up in crude oilproduction from Rajasthan in FY12 and FY13 due to delays in decision onthe Cairn-Vedanta deal delaying approvals on increasing peak production inMangala to 150k bpd. We assume oil production from Rajasthan to average160k bpd in FY12 and 185k bpd in FY13 as against 125k bpd currently. Thesechanges result in a 1-3% higher EPS for Cairn India in FY11-13 to INR30.5,INR57.4 and INR54.8 respectively. These changes also result in a 4% in-crease in valuation to INR400/sh.Reiterate Buy as the preferred play on high oil pricesWe reiterate our Buy on Cairn India as we expect it to benefit from highcrude oil prices and ramp-up in Rajasthan production, which is still not fullyfactored in its stock price. At current market price, the stock is discountinga Brent crude price of US$85/bbl to perpetuity compared with spot price ofUS$102/bbl. Cairn India's valuation increases by INR3.5/sh for every US$1/bbl increase in oil price. Cairn India's management has already stated thatit will not accept any condition in the Cairn-Vedanta deal that will be detri-mental to its valuation.

Brent oil price forecast revision (US$/bbl)

Source: Deutsche Bank estimates

Harshad KatkarResearch Analyst(+91) 22 6658 [email protected]

Amit MurarkaResearch Associate(+91) 22 6658 [email protected]




18 February 2011

Indocement Reuters: INTP.JK Bloomberg: INTP IJ Exchange: JKT Ticker: INTP

Weaker earnings due to lower-than-expected price increaseRachman Koeswanto PT Deutsche Bank Verdhana Indonesia Research Analyst (+62) 21 318 9524 [email protected]

Maintaining Buy rating The stock looks attractive, especially with a 21% share price pullback and 15% underperformance since the weak 3Q10 results announcement. Indocement is the most profitable cement company in the region thanks to prudent management’s success in executing cost efficiency measures. Additionally, the company should be the main beneficiary in the event of stronger-than-expected demand, with its ample and flexible capacity.



Sales (IDRbn) 9,780 10,576 11,291 13,072 15,671

EBITDA (IDRbn) 3,059 4,232 4,832 5,376 6,508

Reported NPAT (IDRbn) 1,745.5 2,746.7 3,223.9 3,618.4 4,517.0

Reported EPS FD(IDR) 474.16 746.12 875.76 982.94 1,227.04

DB EPS FD(IDR) 474 746 876 983 1,227

OLD DB EPS FD(IDR) 474 746 899 1,219 1,608

% Change 0.0% 0.0% -2.6% -19.4% -23.7%

DB EPS growth (%) 78.2 57.4 17.4 12.2 24.8

PER (x) 12.3 10.6 16.6 14.8 11.8

EV/EBITDA (x) 7.1 6.3 10.2 8.7 6.6

DPS (net) (IDR) 32 120 179 210 236




Forecast Change

Buy Price at 14 Feb 2011 (IDR) 14,500Price target - 12mth (IDR) 17,20052-week range (IDR) 19,300 - 13,200Jakarta Comp. Index 3,434.38

Key changes

Price target 20,500.00 to 17,200.00 -16.1%Op prof margin (FYE) 37.8 to 36.8 -2.6%Net profit (FYE) 3,309.5 to 3,223.9 -2.6%


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Jakarta Comp. Index (Rebased)

Performance (%) 1m 3m 12mAbsolute 0.7 -11.5 7.5Jakarta Comp. Index-2.9 -6.5 33.0

Stock data

Market cap (IDRbn) 53,378Market cap (USDm) 6,006Shares outstanding (m) 3,681.2Major shareholders HeidelbergCement (51%)Free float (%) 35Avg daily value traded (USDm) 9.137


ROE (%) 27.1Net debt/equity (%) -32.7Book value/share (IDR) 3,553Price/book (x) 4.08Net interest cover (x) –Operating profit margin (%) 36.8

Conservative stance Price increases have resumed, with Gresik hiking by 7% (Sept-10 to Feb-11) and Indocement by 3% (Dec-10). However, as profitability is close to record levels and with concerns over intensifying competition, companies appear hesitant to hike aggressively. We have therefore lowered our price assumption from 10% to 6-8% p.a. in 2011-12F. We note, however, that there may be upside to our new estimates, especially if companies do hike more aggressively in 2Q onwards.

Lowering EBIT by 20-24% for 2011-12F Our earnings revision reflects the smaller price increase and rising cost pressures. Overall, our 2011-12F forecasts are now 5-10% below market consensus.

Reducing target price to Rp17,200 (from Rp20,500) Our new target price reflects our earnings revision above. It is based on a 10-year DCF valuation using a WACC of 15.3% (down from 15.4%) and a terminal growth rate of 7.5% (unchanged). The main risks are the company’s potential inability to raise the cement price and maintain/reduce production costs (see pages 3-4).




18 February 2011

Holcim Indonesia Reuters: SMCB.JK Bloomberg: SMCB IJ Exchange: JKT Ticker: SMCB

Lower earnings on weaker-than-expected price increaseRachman Koeswanto PT Deutsche Bank Verdhana Indonesia Research Analyst (+62) 21 318 9524 [email protected]

We maintain Buy rating We maintain Buy on a 20% share price pullback in the past five months and as it offers the largest operating leverage in the event of stronger-than-expected demand and pricing flexibility. The main earnings driver for the company would be completion of the greenfield cement plant in 2013F, providing 1) new capacity totaling 1.7m tons p.a. (+20%) to address its capacity constraint, 2) higher efficiency and closer proximity to the market, and 3) access to Outer Islands and Semen Gresik’s stronghold market in East Java.



Sales (IDRbn) 5,341 5,944 5,946 6,651 7,477

EBITDA (IDRbn) 1,407 1,840 1,798 1,936 2,193

Reported NPAT (IDRbn) 282.2 895.8 914.7 1,013.1 1,147.5

Reported EPS FD(IDR) 36.83 116.89 119.37 132.20 149.75

DB EPS FD(IDR) 37 119 119 132 150

OLD DB EPS FD(IDR) 37 119 117 158 203

% Change 0.0% 0.0% 2.3% -16.2% -26.1%

DB EPS growth (%) 66.2 224.1 0.2 10.7 13.3

PER (x) 27.3 9.1 15.6 14.1 12.4

EV/EBITDA (x) 7.7 5.4 8.0 7.3 6.7

DPS (net) (IDR) 0 0 0 0 0




Forecast Change


Key changes

Price target 2,825.00 to 2,150.00 -23.9%Sales (FYE) 6,079 to 5,946 -2.2%Op prof margin (FYE) 23.0 to 23.4 1.8%Net profit (FYE) 894.3 to 914.7 2.3%


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Performance (%) 1m 3m 12mAbsolute -8.9 -20.4 12.5Jakarta Comp. Index-2.9 -6.5 33.0

Stock data

Market cap (IDRbn) 14,253Market cap (USDm) 1,604Shares outstanding (m) 7,662.9Major shareholders Holcim (77.33%)Free float (%) 23Avg daily value traded (USDm) 2.361


ROE (%) 24.2Net debt/equity (%) 5.0Book value/share (IDR) 552Price/book (x) 3.37Net interest cover (x) 6.5Operating profit margin (%) 23.4

We expect modest price increase We assume a modest domestic price increase for Holcim, since the price leaders in the market such as Indocement are unlikely to increase their prices aggressively, given intensifying competition due to excessive capacity build-out and the entry of new players. As a result, we expect Holcim’s cement price to rise by 5% YoY in 2011-12F.

Lowering EBIT by 17-25% for 2011-12F This earnings revision reflects smaller price increase and rising cost pressure. Overall, our 2011-12F forecasts are now 12-19% below market consensus.

Reducing target price from Rp2,825 to Rp2,150 Our new target price reflects the above earnings revision. It is based on a 10-year DCF valuation using a WACC of 12.5% (from 12.6%) and a terminal growth rate of 5% (unchanged). Main risks: potential inability to raise the cement price and maintain/reduce production costs (see pages 3-5).




18 February 2011

Semen Gresik Reuters: SMGR.JK Bloomberg: SMGR IJ Exchange: JKT Ticker: SMGR

Earnings revision on lower-than-expected price increaseRachman Koeswanto PT Deutsche Bank Verdhana Indonesia Research Analyst (+62) 21 318 9524 [email protected]

Reiterating Buy rating Following a 15% share price pullback Semen Gresik is trading at a PER of 12.1x earnings in 2011F, at some 15-20% discount to its peers. It delivers the strongest earnings growth among peers at 24% p.a. EBITDA growth in 2011-12F, supported by its well-time expansion (adding 40% new capacity by 2013F), and superiority in brand equity, distribution network, and access to the fastest growing region.



Sales (IDRbn) 12,210 14,388 14,607 16,971 20,574

EBITDA (IDRbn) 3,861 4,768 5,100 5,906 7,620

Reported NPAT (IDRbn) 2,523.5 3,326.5 3,614.3 4,133.9 4,881.9

Reported EPS FD(IDR) 425.45 560.82 609.33 696.93 823.05

DB EPS FD(IDR) 425 561 609 697 823

OLD DB EPS FD(IDR) 425 561 592 753 914

% Change 0.0% 0.0% 3.0% -7.5% -10.0%

DB EPS growth (%) 42.1 31.8 8.7 14.4 18.1

PER (x) 9.7 9.4 14.3 12.5 10.6

EV/EBITDA (x) 5.4 5.5 9.5 8.4 6.1

DPS (net) (IDR) 213 280 305 348 412




Forecast Change


Key changes

Price target 11,900.00 to 10,400.00 -12.6%Sales (FYE) 14,536 to 14,607 0.5%Op prof margin (FYE) 33.3 to 31.8 -4.4%Net profit (FYE) 3,509.2 to 3,614.3 3.0%


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Performance (%) 1m 3m 12mAbsolute -1.1 -6.5 10.8Jakarta Comp. Index-2.9 -6.5 33.0

Stock data

Market cap (IDRbn) 51,604Market cap (USDm) 5,806Shares outstanding (m) 5,931.5Major shareholders Government of Indonesia (51%)Free float (%) 49Avg daily value traded (USDm) 8.670


ROE (%) 32.3Net debt/equity (%) -27.2Book value/share (IDR) 2,048Price/book (x) 4.25Net interest cover (x) –Operating profit margin (%) 31.8

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Conservative stance Price increases have resumed, with Gresik hiking by 7% (Sept-10 to Feb-11) and Indocement by 3% (Dec-10). However, as profitability is close to record levels and with concerns over intensifying competition, companies appear hesitant to hike aggressively. We have therefore lowered our price assumption from 10% to 6-8% p.a. in 2011-12F. We note, however, that there could be upside to our new estimates if companies do hike more aggressively in 2Q onwards. Lowering EBIT by 14-15% for 2011-12F This earnings revision reflects the smaller price increase and rising cost pressures, which more than offset the benefit of the lower 25% income tax rate. Overall, our 2011-12F forecasts are now in line with market consensus. Reducing our target price to Rp10,400 (from Rp11,900) Our new target price reflects the earnings revision above. It is based on a 10-year DCF valuation using a WACC of 13.5% (up from 13.4%) and a terminal growth rate of 5% (unchanged). The main risks are the company’s potential inability to raise the cement price and maintain/reduce production costs (see pages 3-4).



Asia ASEAN Thailand Property Property

21 February 2011

LPN Reuters: LPN.BK Bloomberg: LPN TB Exchange: SET Ticker: LPN

4Q10 earnings hit new record of Bt570m Worawat Saisuphatphol, CFA Tisco Securities Co, Ltd Research Analyst (+66) 2 633 6463 [email protected]

4Q10 results were 9% above consensus LPN posted record quarterly earnings of Bt570m for 4Q10, a rise of 68.6% YoY and 94.5% QoQ. The result was 9% above the Bloomberg consensus due mainly to a higher than expected gross margin and lower than estimated SG&A expenses. LPN’s net profit for 2010 rose 9% YoY to Bt1.64bn. We maintain our Buy rating based on its large backlog, healthy gross margin, and robust pre-sales.



EBITDA (THBm) 1,879.3 2,256.4 2,554.2 3,014.9 3,279.7

Reported NPAT (THBm) 1,333.8 1,637.0 1,832.6 2,163.9 2,342.3

Reported EPS FD(THB) 0.90 1.10 1.23 1.46 1.58

DB EPS growth (%) 10.6 22.7 11.9 18.1 8.2

PER (x) 5.4 7.7 7.2 6.1 5.6

EV/EBITDA (x) 3.6 5.8 6.2 5.4 5.0

DPS (net) (THB) 0.50 0.56 0.63 0.74 0.80




Forecast Change

Buy Price at 17 Feb 2011 (THB) 8.85Price target - 12mth (THB) 12.4052-week range (THB) 12.10 - 5.70SET 996

Key changes

Price target 12.00 to 12.40 3.3%Sales (FYE) 11,163 to 12,096 8.4%Op prof margin (FYE) 20.8 to 21.1 1.4%Net profit (FYE) 1,685.5 to 1,832.6 8.7%


2

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LPN SET (Rebased)

Performance (%) 1m 3m 12mAbsolute 8.6 -6.3 34.1SET -2.7 0.5 42.7

Stock data

Market cap (THBm) 13,157Market cap (USDm) 430Shares outstanding (m) 1,468.2Major shareholders Thai NVDRs Co., Ltd. (11.42%)Free float (%) 27Avg daily value traded (USDm) 3.9


ROE (%) 27.8Net debt/equity (%) 39.0Book value/share (THB) 4.83Price/book (x) 1.8Net interest cover (x) 510.8Operating profit margin (%) 21.1

Gross margin of 35% exceeded LPN’s target Revenue in 4Q10 surged by 40% YoY and 97% QoQ due mainly to the transfer of two Condo Town brand and two Lumpini Ville brand projects. Its gross margin was 35% in 4Q10, above LPN’s target of 27-30% due to higher selling prices for its housing stock. Some projects launched since 2Q09 have shown slow pre-sales at the early stage but as they neared completion sales accelerated, prompting LPN to lift its selling prices

New earnings forecasts following change in analyst coverage Due to a change in analyst coverage, we have issued new earnings forecasts for 2011-13. We project earnings growth of 12% in 2011, driven by a revenue increase of 21%. This is based on LPN’s strong backlog (93% secured), projected gross margin of 33.3% (vs. 34.1% in 2010), and an estimated rise in its SG&A to sales ratio to 12.2% (from 11.9% last year) due to higher labour and construction material costs. Our new forecasts imply a Cagr for earnings of 13% for 2011-13F.

Target price of Bt12.40 is based on 2011F PER of 10x; risks Our new TP of Bt12.40 is based on a 2011F PER of 10x, a 10% premium to its historical average of 9x. Risks include unexpected regulatory changes that could affect plans for certain condominium projects, delays in launching new projects and slow sales of LPN’s older condo projects (see p.5).



Asia

21 February 2011

Asia Economics Daily

Thailand: Sustained growth and rising inflation point to rate hikes


Michael Spencer, Ph.D Chief Economist, Asia (+852) 2203 8303 [email protected]

Jun Ma, Ph.D Chief Economist, Greater China (+852) 2203 8308 [email protected]

Taimur Baig, Ph.D Chief Economist, India (+65) 6423 8681 [email protected]

Juliana Lee Senior Economist (+852) 2203 8312 [email protected]

Kaushik Das Economist (+91) 22 6658 4909 [email protected]

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HIGHLIGHTS

Thailand -- The economy expands in Q4, by 1.2%qoq sa ; Export growth accelerates in January Taiwan - Export orders weaken, temporarily; Current account surplus widens to USD10.1bn in Q4 Hong Kong - Unemployment rate eases in January

UPCOMING RELEASES

Hong Kong – CPI (Jan). DB forecast 3.1% (3.1% in Dec) Vietnam – CPI (Feb). DB forecast 11.4% (12.2% in Jan) Vietnam – Exports (ytd) (Feb). DB forecast 15.1% (25.5% in Jan) Vietnam – IP (ytd) (Feb). DB forecast 15.1% (25.5% in Jan) Vietnam – Retail sales (ytd) (Feb). DB forecast 22.8% (22.1% in Jan)

NEWS IN BRIEF

THAILAND GDP (Q4) Thailand's economy expanded in Q4, by 1.2%qoq sa, after contracting 0.3% in Q3. This was in line with our expectation but slightly below the market forecast of 4.1%. On a yoy basis, GDP growth fell to 3.8% in Q4 from 6.6% in Q3, due to high base effects. As expected, this growth was led by sustained growth in private consumption and exports, which rose 3.5% and 9.5%, respectively, in Q4, vs. 5% and 11.7% in Q3. The former contributed 1.8% to overall growth in Q4, vs. 2.7% in Q3, while the net trade contribution to overall growth improved to 1% in Q4 from -2.6% in Q3. However, investment growth was weaker than expected. While facility investment growth fell to 6% in Q4, from 8%% in Q3, contributing 1.2% to overall growth in Q4, vs. 1.8% in Q3, overall investment growth stood relatively stable, at 6.4% in Q4 vs 7.9% in Q3, supported by inventory accumulation. Going forward, we expect facility investment growth to recover, on the back of sustained growth in both domestic and external demand. The government kept its growth forecast at 3.5-4.5%, below our forecast of 4.7%. We attribute the government's relatively modest growth forecast to its relatively modest growth assumption for the US. Meanwhile, the government raised its inflation forecast to 2.8-3.8% in 2011, from 2.5-3.5% previously, against our forecast of 3.3%. We continue to expect the economy to expand 4.7% growth in 2011, supported by strong export growth, as US growth hovers above 4%. In response to sustained growth and rising inflation, we expect the Bank of Thailand (BoT) to deliver another 100bps rate hikes in 2011, with the next one (25bps) in March.



External trade (Jan). As we have observed elsewhere in Asia, Thailand reported stronger exports in January. Export growth accelerated to 22.3%yoy in January from 18.8% in December, albeit modestly weaker than the market and our forecast of 23.5% and 25%, respectively. With imports rising at a faster pace of 33.3% in January, vs. 11.5% in December, the trade balance deteriorated to a deficit of USD0.9bn in January, vs. a surplus of USD1.3bn in December. A relatively sharp increase in imports hints at accelerated growth in domestic demand. We revised up our GDP growth forecast for Thailand to 4.7% from 4% on the back of expectation of stronger external demand, which will help to sustain domestic demand growth.

TAIWAN Export orders (Jan) Export orders rose at a slower pace of 13.5%yoy in January, vs. 15.3% in December and the market and our expectation of its acceleration to 18.5% and 18.8%. This slowdown was led by electronics goods export orders (accounting for about one-fifth of total export orders), growth of which fell to 9.9% in January, vs. 17.1% in December. By destination, export orders from the mainland rose at a slower pace of 7.2% in January, compared to 17.6% growth in December. In contrast, orders from the US grew at a faster pace of 18.0% in January, up from 10.7% in December, helping to mitigate the deterioration in export orders from the mainland. We expect export orders to rebound as the Lunar New Year effects drop out of the data, supported by strong demand from US. Note that we have revised up our 2011 growth forecast for Taiwan, to 4.7% from 3.6% earlier, on the back of better-than-expected GDP growth in Q4 and expectation of stronger export demand from the US in 2011.

Current account (Q4). Taiwan's current account surplus widened to USD10.1bn in Q4, from USD9.1bn (revised) in Q3. By category, this improvement was due to the services and income accounts surpluses, which widened to USD2.1bn and USD2.8bn, respectively, in Q4, from USD0.3bn and USD2.4bn in Q3. In contrast, the goods account surplus narrowed to USD5.8bn in Q4, from USD7.0bn in Q3. Meanwhile, the financial account balance worsened in Q4, posting a deficit of USD6.6bn vs. USD2.5bn in Q3. This deterioration was led by reversal of other investment, which turned to a net outflow of USD3.4bn in Q4, from a net inflow of USD10.2bn in Q3, as both domestic and foreign players took funds out of the country. In contrast, the net portfolio flows improved sharply, reporting a deficit of USD0.5bn in Q4 vs. USD10.2bn in Q3, as foreign portfolio investments in Taiwan rose USD10.1bn in Q4, almost fully countering USD10.5bn increase in domestic investors' overseas investments in the period. The current account posted a surplus of USD40.6bn, broadly unchanged from USD42.9bn reported in 2009. We expect Taiwan to continue to post large current account surpluses in 2011, albeit smaller than that in 2010, at around USD35bn.

HONG KONG Unemployment rate (Jan). Hong Kong's unemployment rate (sa) fell to 3.8% in November-January, from 4.0% in October-December, vs. the market and our forecast of no change. This improvement was the result of a stronger increase in payrolls compared to that of workers entering the job market. The latter rose 0.3%mom in November-January, while payrolls rose 0.5% in the same period. Meanwhile, there was no change in underemployment. We expect sustained robust economic growth to support continued improvement in HK's labour market conditions this year. We expect HK's unemployment rate to average 3.6% in 2011, vs. 4.4% in 2010.



FINANCIAL MARKETS

Today's % chg vs Today's abs chg vs Today's bps chg vs Today's bps chg vsClosing prev day Closing prev day Closing prev day Closing prev day

China 12651 -0.7 6.57 0.0 3.00 0 4.15 0Hong Kong 23485 -0.5 7.79 0.0 0.22 0 2.97 4India 18106 -0.6 45.16 -0.1 7.10 -5 8.10 2Indonesia 3498 -0.1 8847 8.0 6.69 0 9.50 -29Malaysia 1524 0.4 3.03 0.0 3.01 0 4.06 1Philippines 3837 -0.4 43.3 0.0 3.22 5 7.53 10Singapore 3064 -0.8 1.27 0.0 0.44 0 2.70 2S. Korea 2005 -0.4 1110 0.0 3.15 0 4.78 -3Taiwan 8839 -0.1 29.3 0.1 0.63 -2 1.41 1Thailand 996 0.0 30.5 0.1 3.37 1 2.50 0

US 12391 0.0 na na 1.28 0 3.59 0Japan 10858 0.1 83.1 0.0 0.19 0 1.31 -3Euroland na na 1.37 0.0 1.08 0 0.00 -2

Stockmarkets FX Markets Money Markets Bond Markets

Sources: DB Global Markets Research, Bloomberg Finance LP and Reuters



ECONOMIC DIARY Country Release Period DB Expected Consensus Actual Previous

Friday, Feb 18Malaysia GDP Q4-YoY 5.0% 4.6% 4.8% 5.3%

Monday, Feb 21Hong Kong Unemployment rate (sa) Jan 4.0% 4.0% 3.8% 4.0%Taiwan Export Orders Jan-YoY 18.8% 18.0% 13.5% 15.3%

Current Account Balance Q4 USD7.7bn USD8.5bn USD10.1bn USD9.1bnThailand GDP Q4-YoY 3.8% 4.1% 3.8% 6.6%

Exports Jan-YoY 25.0% 23.5% 22.3% 18.8%Imports Jan-YoY 22.0% 20.8% 33.3% 11.5%Trade Balance Jan USD1.1bn USD0.8bn -USD0.9bn USD1.3bn

Tuesday, Feb 22Hong Kong CPI Jan-YoY 3.1% 3.3% 3.1%Vietnam CPI Feb-YoY 11.4% NA 12.2%

Exports (ytd) Feb-YoY 15.1% NA 25.5%Imports (ytd) Feb-YoY 14.3% NA 20.1%Trade Balance (ytd) Feb -USD2.4bn NA -USD12.4bnIndustrial Production (ytd) Feb-YoY 13.8% NA 16.1%Retail Sales (ytd) Feb-YoY 22.8% NA 22.1%

Wednesday, Feb 23Hong Kong GDP Q4-YoY 6.0% 5.0% 6.8%Malaysia CPI Jan-YoY 2.4% 2.4% 2.2%Singapore CPI Jan-YoY 4.3% 4.4% 4.6%Taiwan Industrial Production Jan-YoY 21.5% 17.8% 18.2%

Thursday, Feb 24Hong Kong Exports Jan-YoY 15.3% 15.8% 12.5%

Imports Jan-YoY 16.3% 16.3% 14.8%Trade Balance Jan -HKD36.6bn -HKD40.1bn -HKD43.5bn

Taiwan Unemployment rate (sa) Jan 4.5% 4.7% 4.7%

Friday, Feb 25Philippines Imports Dec-YoY 24.5% NA 35.3%

Trade Balance Dec -USD0.7bn NA -USD0.8bnIndustrial Production (Vol) Dec-YoY 16.8%

Singapore Industrial Production Jan-YoY 11.0% 6.9% 9.0%South Korea Current Account Balance Jan USD1.6bn NA USD2.1bnTaiwan M2 Jan-YoY 5.3% NA 5.1%

Sources: DB Global Markets Research, Bloomberg Finance LP and Reuters



Asia China

21 Feb 2011 - 11:39:48 AM HKT

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CHINA RATES ALERT Strategy UpdateChina hiked RRR for the second time this year


PBoC announced a 50bps hike in RRR effective on Feb 24 th, this is thesecond RRR hike this year and the hike will lift the official RRR at large fi‐nancial institutions to 19.5% on average.We think the purpose of the RRR hike is to drain liquidity injected as a resultof PBoC bill redemption in the open market. We estimate this hike will mopup about CNY 357bn liquidity from the banking system.As we discussed in the Asia Local Markets Weekly, Ferurary 18th, since thefirst RRR hike this year on January 20th, open market redemption net in‐jected about CNY 371bn liquidity, more than offsetting the CNY 350bnliquidity drained by the first RRR hike. Rollover pressure of sterilization billsis quite heavy in the first half of this year as about CNY 2trn bills becomedue and redemption distribution is concentrated in March and April ‐‐ weestimate about CNY 1.3trn bills to be rolled over from now to the end ofApril. PBoC has not expanded the size of its sterilization operation for thelast two months due to sizable dislocation in the PBoC bill yields betweenthe primary and secondary market (about 30bps in 3M bills). So far, it seemsPBoC has been reluctant to guide the bill auction yield higher towards thesecondary market level in order to step up bill issuance. As such, the onlyeffective tool for liquidity management is RRR hike, which is also more costefficient. If bill issuance remains low, we see room for another 2‐3 RRRhikes for the remainder of this year. Moreover, potential inflow from trade/FDI adds to the task of soaking up liquidity.In the near‐term, money market rates will rise and very short dated rates(repo rates and short‐term Shibor rates) are prone to jump risks. Liquiditytightening will drive bond yield/rates higher. Risk on IRS/NDIRS curve isbiased towards flattening.

Linan LiuStrategist(+852) 2203 [email protected]



Asia India

21 February 2011

India Rates Alert Budget preview: Tall order on financing


Market Update

Research Team

Sameer Goel Strategist (+65 ) 64236973 [email protected]

Arjun Shetty Strategist (+65) 6423 5925 [email protected]

Chart 1: Budget financing

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budget deficitnet issuancegross issuancenet issuance /deficit (right)

INR tn

Source: Deutsche Bank, RBI

Chart 2: How much SLR banks decide to

hold will be a key factor in the financing

equation next year

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J-02 O- 02 J-03 A-04 J-05 O-05 J-06 A-07 J-08 O-08 J- 09 A-10 J-11

Minimum SLR requirements

SLR holdings (adjusted for LAF)

Per cent of NDTL

Source: Deutsche Bank, RBI

Str

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It’s the time of the year when markets start to focus on the supply equation for the following fiscal year (April-March), and to do the math on where the funds would likely come to finance the same. We present our own thinking on the same here, with our aim mainly to illustrate the likely pressure points on financing.

For 2010-11, it is increasingly looking like the Finance Minister would be able to report a significantly lower Budget deficit realization in % terms than in the original plan, because of (a) much stronger than expected growth in nominal GDP (CSO estimates 20.3%y/y growth in the current fiscal year); and (b) windfall in revenues from the sale of 3G spectrum which would help pay for the additional spending bill on subsidies and other current expenditure items. There are certainly valid questions which need to be asked about the quality of Budget spending, but that is a discussion for elsewhere. What is more relevant here is to question how the government would be able to show further consolidation in its fiscal efforts next year above and beyond the likely 4.8% of GDP outturn for 2010-11 (DB expectation).

Continued economic buoyancy (we expect FY2012 growth of 8.7%, same as in FY2011) should help raise the tax effort, but the main concerns are (a) absence of the one-off boost to non-tax revenues from 3G spectrum sale; (b) doubts about disinvestment targets after the likely shortfall this year (though we would think there will still be an ambitious number penciled in for the Budget); and (c) that it’s unlikely that the pressure from revenue expenditure (mainly subsidies) would let up given the pressure on global commodity prices. It’s the latter which makes the life of us analysts tough in squaring the numbers on Budget realization. Note, for example, that our oil analysts estimate a total potential amount for under-recoveries of oil marketing companies of INR982bn next year, which could mean a bill of up to INR540bn for the exchequer, assuming the remaining gets absorbed by upstream companies. And then there is a similar list for food subsidies, fertilizer subsidies and so on.

And then there are concerns about how much rationalization of spending the government can push through, given the political economy of the election cycle. All in all, our economists estimate that the Finance Minister would struggle to peg the Budget gap for FY2012 at best at par with the outturn for the current year, at 4.8% of GDP (this assumes a nominal GDP growth of 15% over the year).

We choose, though, to present a more scenario-based analysis on financing below, given the risk that the Finance Minister beats expectations through some tough tax measures, or alternatively just some very ambitious budget planning. Alternatively, a more realistic recognition of the likely liabilities of the government



Global

21 February 2011

Global Commodities DailyEye on supply


All prices are those current at the end of the previous trading session unless otherwise indicated. Prices are sourced from local exchanges via Reuters, Bloomberg and other vendors. Data is sourced from Deutsche Bank and subject companies. DISCLOSURES AND ANALYST CERTIFICATIONS ARE LOCATED IN APPENDIX 1. MICA(P) 007/05/2010

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The Day Ahead

Time(EST) Country Event Previous Market View

03:30 Germany PMI Manufacturing (Feb) 60.5 60.3

03:30 Germany PMI Services (Feb) 60.3 60.4

04:00 Germany IFO - Business Climate (Feb) 110.3 110.3

04:00 EZ PMI Manufacturing (Feb) 57.3 57.4

04:00 EZ PMI Services (Feb) 55.9 55.9

16:00 US USDA crop progress report

Overview

Commodities rallied across the board on Friday lifted by dollar weakness despite another RRR hike by China’s PBOC. China increased reserve requirement ratio for a second time this year by 50bp, in an effort to rein in domestic inflation, Figure 1.

In industrial metals, we believe supply constraints have become increasingly important and could limit downside risks even if Chinese growth slows meaningfully. Nickel gained support after Vale said it will lose around 15 Kt of refined nickel, equivalent of 5 percent of its total 2011 nickel production due to a 16 week shutdown of Sudbury Copper Cliff smelter in Canada. In other metals, Aluminium Bahrain is operating at full capacity despite anti-government protests that have resulted in three deaths.

In precious metals, gold rallied a five-week high while silver hit its highest level in 31 years on worries that unrest in the Middle East countries could continue to spread. Silver has been the out-performer in the complex, also supported by renewed inflows into physically backed ETFs. We expect that the silver market will perform well over the course of 2011. We believe ongoing strength in industrial demand, loose monetary policy and inflationary fears in the Emerging Markets should continue to attract investor demand for silver.

Over the weekend, China announced 4-5% fuel price hikes applied to gasoline, diesel and jet fuel. This marks the first increase since December. In our view, the price hikes will have little impact on demand. The increases are more likely intended as a supportive measure for refinery margins, which have been slumping in the face of rising crude oil feedstock prices. The move is intended to encourage refiners to maintain run rates and ensure adequate supply following the Chinese New Year holidays, in our view. China’s oil demand in December rose by a robust 20% YoY, which put full year 2010 annual growth at 12% YoY making it the strongest growth rate since 2004.

Looking at today’s calendar, in Europe market will focus on PMI manufacturing and services for Germany and Eurozone. This week, China will publish its final commodities trade and production stats for January. We expect refined copper imports to increase due to resilient growth that preliminary data shows. Given strong Chinese iron ore import growth; we are also looking for signs of any slowdown in domestic iron ore production.

Commodities & Global Markets

Commodities News In Brief • Unrest in Libya over the weekend has

spread to the capital, Tripoli, according to reports in Reuters. In early trading oil traded up about USD1/bbl.

• Egypt has approved the passage of two Iranian navy ships through the Suez Canal, an army source told Reuters. The two ships would be the first Iranian military vessels to transit the canal since Iran's 1979 revolution.

• Shanghai plans to launch crude oil & silver futures, a state newspaper reported Friday, citing a work report by the Shanghai city government.

• Shanghai Futures Exchange set the lead futures contract size at 25 tons with tick size at 5 yuan/ton, according to draft rules released by the exchange. The daily trading limit will be 5% & minimum margin requirement 8%.

• India’s Chhattisgarh state joins the Orissa state in seeking a bank on iron ore exports.

• Indonesia has approved permits for 29 more firms to resume coal & metals exports, paving the way for traders & producers to begin clearing a backlog of shipments at the country's ports, said the trade ministry.

• United Co. Rusal seeks to double capacity of its aluminum smelters in Siberia in 12 years to meet demand from northern Asia. It currently has capacity to produce 3.2 mn tonnes a year in Siberia, the CEO said.

Global Markets News In Brief

• UK retail sales (MoM) improved to 1.9% in Jan from -1.4%; (YoY) up to 5.3% vs -0.7%

Event Risks • China final trade stats 22 Feb

• Chicago Fed Nat Activity Index 24 Feb

• China Leading Index 24-28 Feb

• China PMI Manufacturing on 28 Feb

• ECB Announces Interest Rates 3 Mar

Research Team Soozhana Choi Xiao Fu Research Analyst Research Analyst (65) 6423 5261 (44)20 7547 1558 [email protected] [email protected]



Figure 1: China RRR vs CPI Figure 2: Gold to silver ratio vs US ISM

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An ISM above 50 tends to put pressure on the gold/silver ratio

Source: Bloomberg Finance LP, Deutsche Bank Source: Bloomberg Finance LP, Deutsche Bank

Commodity Price Summary

Energy WTI (bbl) Brent (bbl) Nat Gas (mmBtu) RBOB Gas (g) Heating Oil (g) API 4 (t)

Close (USD) 86.20 102.52 3.88 2.55 2.71 115.65 Daily price change -0.2% -0.1% 0.2% 0.9% -0.7% 0.3% YTD price change -5.7% 8.2% -12.0% 4.0% 6.7% 0.0%

Precious Metals & FX Comex Gold Comex Silver Nymex Platinum Nymex

Palladium EURUSD USDJPY

Close (USD/oz) (level) 1388.20 32.30 1843.30 857.70 1.37 83.25 Daily price change 0.3% 2.3% 0.0% 1.7% 0.5% -0.1% YTD price change -2.3% 4.5% 3.7% 6.8% 2.1% 2.4% Industrial Metals Aluminium Copper Lead Nickel Tin Zinc LME close 3M (USD/t) 2568 9860 2668 29150 32350 2553

LME close 3M (USc/lb) 116.5 447.2 121.0 1322.2 1467.4 115.8

Daily price change 2.2% 0.6% 3.2% 2.3% 2.2% 1.6%

YTD price change 4.0% 2.7% 4.6% 17.8% 20.3% 4.0% LME Stocks (t) 4,593,175 407,925 296,975 129,396 17,610 708,775

Daily change (t) 0 0 0 0 0 0

Agriculture & Livestock Corn (bsh) Cotton (lb) Live Cattle (lb) Soybeans (bsh) Sugar (lb) Wheat (bsh) NY close (USc) 709.75 197.02 111.05 1368.00 31.02 822.25 Daily price change -0.4% -3.4% 0.7% -2.6% -0.8% -3.3%

YTD price change 12.8% 36.1% 2.9% -1.8% -3.4% 3.5%

Other prices Baltic Dry Index

Iron Ore Steel US HRC Ethanol EUA (CO2)

Dec12 (Euro) U3O8 USD/lb

Close (level) 1301 189.3 828 2.50 15.53 68.50 Daily change 2.4% -1.4% 0.0% 0.0% 0.3% 0.0% YTD change -26.6% 11.3% 21.8% 5.3% 6.2% 10.3%

Indices DBLCI-OY DBLCI-MRE DB Harvest SPGSCI DJUBS SPWCI NY close (level) 1330 429 287 5031 328 387 Daily change 0.2% 0.3% 0.0% 0.0% 0.0% -0.2% YTD change 3.9% 0.0% 1.5% 1.8% 0.4% 8.3%

Source: Reuters, Bloomberg Finance LP, UxC, Metals Bulletin, Deutsche Bank



Asia China Technology

21 February 2011

China TMT Daily Winning local marketing; also 0728, 0941, 0700, BIDU, 1688

(Please click through to the .pdf version of this document for a full overview of today’s

news and views.)


Periodical

TOP CHINA TMT PICKS Company Rating Target Price AsiaInfo-Linkage Buy USD 24.75 China Telecom Buy HKD 5.40 ZTE Buy HKD 42.78

CHINA TMT STOCKS Company Rating Close Price 1D% 3M%

TELCOS as on 18/02China Comm Service Hold 5.3 0.0 8.6China Mobile Hold 73.9 0.6 -5.3China Telecom Buy 4.6 2.0 15.0China Unicom Hold 13.5 2.6 27.5 INTERNET/ONLINE GAMING Alibaba.com Hold 17.3 -1.3 27.1Baidu Buy 126.8 -1.4 17.3Ctrip.com Int'l Hold 39.5 -1.6 -15.3Netease.com Hold 44.5 -0.1 12.3Shanda Sell 43.5 1.8 7.3Shanda Games Hold 6.1 -0.7 2.0Sina Corp Hold 85.5 -2.9 40.1Sohu.com Hold 83.8 -1.3 10.8Tencent Buy 208.2 2.3 18.2 TECHNOLOGY AsiaInfo-Linkage Buy 20.8 -0.5 15.2Byd Electronic No Rec. 5.4 -2.2 35.2Foxconn Int'l Hldgs Hold 5.6 -0.5 0.9HiSoft Buy 32.8 2.5 23.1Lenovo Group Hold 4.9 -0.8 -11.6Longtop Buy 32.0 -1.3 -20.0SouFun Buy 20.6 1.0 8.9Synnex Technology Hold 71.5 1.9 -3.5ZTE Buy 34.1 0.1 14.3 Indices Close 1D% 3M% as on 18/02HSI 23595.2 1.3 0.0HSCEI 12742.5 1.3 -3.3Nasdaq 2834.0 0.1 12.7Sources: DB, Bloomberg Finance LP

Research Team

Alan Hellawell III Research Analyst (+852) 2203 6240 [email protected]

Eva Leung, CFA Research Associate (+852) 2203 6190 [email protected]

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FEATURE:

US survey results suggest that SNS/group-buy integration may be key to winning China’s SMEs We regard the single greatest under-served segment of digital marketing to involve location-based advertising for SMEs. Several industry analysts have referred to this opportunity as exceeding a trillion US dollars. Despite being early days, we seem to have witnessed a clear preference for how businesses reach local internet users. In its quarterly Merchant Confidence Index survey of over 8,500 small and local business owners across the U.S, MerchantCircle revealed that 55% of small businesses that have tried pure-play group-buying platforms such as Groupon and LivingSocial do not plan to use the services again. We also note that Houston-based Rice University concluded in a study last fall that roughly 35% of US businesses’ Groupon campaigns were unprofitable. Specifically, MerchantCircle surveyed 8,456 SMBs, with some 6,874 responding to the question about group-buying deals. Of those, 23% (1,568) had offered a daily deal. Of this amount, 856 stated they didn’t plan to repeat the strategy, and 712 said they would try group-buying platforms again. More than 5,300 said they’ve never offered a daily deal.

SNS-site services growing strongly: 32% use Facebook Places. Search now second place The Facebook Places platform, having been in existence for a mere six months, allows users to "check in" to various locations, and has become an extremely popular tool. While 32% of SMEs have already used it, another 12% intend to use the platform in the coming months. Importantly, roughly 70% of those surveyed use Facebook.com for promotions. According to MerchantCircle, that number is up from 50% last year and beats Google, which is being used by 66%. While group-buying pure-plays have produced mixed results from SMEs, location-based app Foursquare’s usage among local merchants has risen from 2% in 2010 to 9% this year. Foursquare is an application primarily designed to let your friends know where you are, and figure out where they are. It also allows the user to collect points, prize "badges," and eventually, coupons, for going about your everyday business.

Micro-blog sites growing in popularity as tool, but SNS/LBS far more prevalent Nearly 40% of respondents in the MerchantCircle survey said they used Twitter for marketing, thus ranking the microblogging service well behind Facebook and Google. ChompOn, a group-buying site, revealed its own data showing that Facebook updates are three times more effective than tweets when it comes to getting consumers to make purchases online.

Will China’s integrated SNS/LBS offerings win local advertising and market budget over search? The fact that Facebook is being used more than Google by local businesses for online marketing leads us to wonder whether China’s two or three leading SNS

Continue on the next page



Asia ChinaTechnology Software & Services

21 Feb 2011 - 06:48:44 PM HKT

COMPANY ALERT Breaking News

Alibaba.com Limited Hold

CEO, COO resign

Reuters:1688.HK Exchange:HKG Ticker:1688

Price (HKD) 16.68

Price target (HKD) 17.21

52-week range (HKD) 18.28 - 12.92



Net debt/equity (%) -56.6

Book value/share (CNY) 1.19

Price/book (x) 11.9

FYE 12/31 2009A 2010E 2011E

Sales(CNYm)

3,875 5,556 6,812

Net Profit(CNYm)

1,050.2 1,393.4 1,903.3

DB EPS(CNY)

0.25 0.34 0.43

PER (x) 49.1 41.8 32.4

Yield (net)(%)

0.0 1.4 0.0

Company CEO, COO resign. Alibaba.com announced earlier today thatcompany CEO David Wei and COO Elvis Lee had resigned, as a result ofwhat the board regarded as insufficient action taken against rising incidentsof fraud on the platform from China-based exporters on Ali's international,English-language site. Specifically, the co had determined that 1,219 of Ali'sChina Gold Supplier customers who signed up in 2009 and 1,107 China GoldSuppliers who signed up in 2010 engaged in fraud against buyers on theplatform, representing ~1.1% and 0.8% of Gold Suppliers as of end-09 andend-10, respectively. The release indicated that members had "engineeredan organized and systemic attack on the integrity of the Alibaba.com plat-form for illegal gains. In general, the sites offered high-demand consumerelectronics at very attractive prices, a low minimum order quantity and lessreliable payment transfer methods." The ave fraud claim from buyers totaledUSD1,200.

Joint resignation for "right reasons", but severity of dual-exec depar-ture disconcerting. Maintain Hold. We note the investigation also indi-cated that some 100 salespeople, along with senior managers, were"directly responsible in either intentionally or negligently allowing the fraud-sters to evade" Alibaba's authentication and verification processes.Alibaba.com intends to hold an analyst call to discuss these developmentstoday, Monday, Feb 21st at 8pm HK time/7am EST.

Alan Hellawell IIIResearch Analyst(+852) 2203 [email protected]

Alex YaoResearch Analyst(+86) 21 3896 [email protected]



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Technology Software & Services

21 Feb 2011 - 10:50:20 PM HKT

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COMPANY ALERT Company Update

China Comm Services Hold

Capex expectations overdone


Price (HKD) 5.43


52-week range (HKD) 5.43 - 3.35





Price/book (x) 1.9

FYE 12/31 2009A 2010E 2011E

Sales(CNYm)

39,499 45,693 51,074

Net Profit(CNYm)

1,598.6 1,861.9 2,047.5

DB EPS(CNY)

0.28 0.32 0.35

PER (x) 14.4 14.2 12.9

Yield (net)(%)

2.8 2.8 3.1

Price performance

Source: Deutsche Bank, Bloomberg Finance LLP

We recently met CCS's management. We present key take-aways from themeeting below.

Guidance reiterated. Mgmt reconfirmed prior guidance of low-to mid-teens revenue growth and stable margin for the year. Full year TIS growthshould remain healthy despite lower telco capex in 2011. CCS continues tomake market share gains in maintenance contracts. The co is expanding itsnon-operator segment to balance slower growth from the operators. Over-seas markets and CCS' non-operator business remain the near-term growthdrivers for the company. We expect overseas contribution to increase from5% in 1H10 to 8-10% by 2012.When asked about network convergence, management indicated that itdoes not currently expect material rev contribution until 2-3years later.

Maintain Hold. CCS closed on Monday at HK$5.43, up 15% over the last1M, and at its highest level since Sept 2008. The stock has outperformedHSI index by 16.7% over 1M, 11% in 3M and 25.5% in 6M. We believerecent strong performance has been driven by positive capex newsflowfrom the telco operators. More specifically during a press conference lastweek, Wang Xiaochu, chairman and CEO of China Telecom, made somebroad statements about CT's broadband Internet agenda, including CT'splan to cover every city with broadband access, convert all low-speed cop-per broadband to fiber optics, and improve bandwidth capabilities. Webelieve these statements were not new and had been incorporated intoCT's current capex plan already. We do not believe CCS will grow signifi-cantly faster than current management guidance over the next 2-3yrs.

Absolute price performance

Source: Deutsche Bank, Bloomberg Finance LP

Eva Leung, CFAResearch Analyst(+852) 2203 [email protected]




Asia ChinaTelecommunications Wireless

21 Feb 2011 - 10:34:49 AM HKT


China Mobile Hold

Solid Jan, pre-Chinese New Years


Price (HKD) 73.90


52-week range (HKD) 84.30 - 71.95





Price/book (x) 2.2

FYE 12/31 2009A 2010E 2011E

Sales(CNYm)

452,103 480,610 496,694

Net Profit(CNYm)

115,208.0 116,977.1 113,012.6

DB EPS(CNY)

5.67 5.76 5.56

PER (x) 11.6 10.8 11.2

Yield (net)(%)

3.8 4.0 3.9

Solid increase in net adds. For January, China Mobile reported 5.263mtotal mobile net adds, delivering a +20.2% MoM and +2.9% YoY increase.CM's total mobile now stands at 589.3mn. More specifically, 2G net addsincreased by 3.332mn (+32.7% MoM, -27.9% YoY) while 3G net adds in-creased by 1.931 mn (+3.4% MoM, +292.5% YoY). The operators oftenreport relatively strong sequential growth before the onset of Chinese NewYears. 3G subscribers of 22.633mn now make up 3.8% of CM's total mobilecustomers compared to a mere 0.7% a year ago. This 3G number howevermasks a very large number of low-end fixed wireless terminal (FWT) users,which more resemble 1G users than 3G users.

Putting Unicom's net adds in context. Compared to Mobile's Jan netadds, China Unicom's net adds look less exciting than initially perceived.China Unicom's total net adds increased by 17.4% MoM vs. China Mobile's20.2%. 3G net adds increased by 9.6% MoM. We do believe that CU'srevenue market share continues to grow, as its 3G users likely deliver muchgreater ARPU than CM's 3G net adds. This growth in CU high-end 3G usersis conversely triggering a slow hollowing out of the CM high-end user base.China Telecom will announce its monthly KPIs after market close today. CT'sperformance will offer further comparative data on Unicom's performance.We maintain our Hold recommendation on China Mobile and China Unicom,and Buy recommendation on China Telecom.


William BrattonResearch Analyst(+852) 2203 [email protected]




Asia China Property Property

21 February 2011

China Prop Weekly Monitor Volume continued rebounding to run ahead of restrictionTony Tsang Research Analyst (+852) 2203 6256 [email protected]

Venant Chiang Research Analyst (+852) 2203 6183 [email protected]

Jason Ching, CFA Research Analyst (+852) 2203 6205 [email protected]

Overall volume continued to rebound 75.4% WoW Last week overall weekly volume for China’s 35 major cities rebounded 75.4% WoW, for the second week after the Chinese New Year holidays. The key words for the last two weeks are purchase restriction. As more cities are adopting purchase restriction in line with central govt's guidance, people are getting frenzy to rush deals sealed before restriction is effective. After most cities have carried out the restriction, volumes may stay low as investment/speculation and some end-user demands are choked, exerting downward pressure on property prices.


Industry Update

Companies featured China Vanke (000002.SZ),CNY8.40 Buy

2009A 2010E 2011EP/E(x) 23.7 13.2 10.1EV/EBITDA(x) 13.7 6.1 5.2Price/book(x) 3.2 2.1 1.8Poly HK (0119.HK),HKD6.86 Buy

2009A 2010E 2011EP/E (x) 34.4 16.5 12.9EV/EBITDA (x) 13.7 11.9 9.5Price/book (x) 2.0 1.4 1.2Yuexiu Property (0123.HK),HKD1.75 Buy

2009A 2010E 2011EP/E(x) – 11.0 8.6EV/EBITDA(x) 12.6 10.2 4.8Price/book(x) 1.0 0.8 0.7Minmetals Land Limited (0230.HK),HKD1.50 Buy

2009A 2010E 2011EP/E(x) 18.7 16.2 10.2EV/EBITDA(x) 4.7 8.6 2.8Price/book(x) 1.4 0.8 0.8Shui On Land Ltd (0272.HK),HKD3.69 Buy

2009A 2010E 2011EP/E(x) 5.2 13.7 18.5EV/EBITDA(x) 7.1 9.2 16.8Price/book(x) 0.9 0.7 0.6China Resources Land (1109.HK),HKD12.78 Buy

2009A 2010E 2011EP/E (x) 18.0 15.7 17.5EV/EBITDA (x) 16.8 10.5 7.4Price/book (x) 2.3 1.4 1.3KWG Property (1813.HK),HKD5.36 Buy

2009A 2010E 2011EP/E(x) 10.8 10.8 6.5EV/EBITDA(x) 9.2 6.9 3.5Price/book(x) 1.5 1.1 1.0Country Garden Holdings (2007.HK),HKD3.14 Sell

2009A 2010E 2011EP/E(x) 22.2 16.9 14.5EV/EBITDA(x) 12.6 9.6 9.3Price/book(x) 2.0 1.9 1.7Guangzhou R&F Prop (2777.HK),HKD10.92 Hold

2008A 2009E 2010EP/E(x) 21.5 13.3 9.5EV/EBITDA(x) 14.6 10.1 6.7Price/book(x) 1.6 1.8 1.6Agile Property (3383.HK),HKD10.52 Sell

2009A 2010E 2011EP/E(x) 12.6 13.6 10.9EV/EBITDA(x) 9.5 7.9 6.3Price/book(x) 2.6 1.7 1.5SOHO China (0410.HK),HKD5.73 Buy

2009A 2010E 2011EP/E(x) 11.8 9.0 23.6EV/EBITDA(x) 5.4 2.5 8.5Price/book(x) 1.1 1.3 1.3Evergrande (3333.HK),HKD3.79 Buy

2009A 2010E 2011EP/E(x) 28.1 8.2 6.4EV/EBITDA(x) 159.4 6.0 4.8Price/book(x) 4.4 2.7 1.9Franshion (0817.HK),HKD2.20 Buy

2009A 2010E 2011EP/E(x) 14.3 17.3 14.1EV/EBITDA(x) 12.6 12.4 8.8Price/book(x) 1.5 0.9 0.9

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Tier-1 cities: Transaction volume up 85.2% WoW Volume in Tier-1 cities kept the uptrend at 85.2% WoW last week. Volumes in Beijing, Shanghai, Shenzhen and Guangzhou saw WoW increases of 59%, 95%, 35% and 124% respectively. Overall volume was 47% below the peak of April 2010. Transactions in Tier-1 cities accounted for about 15% of the total in the past four weeks. ASP of Tier-1 cities edged up 0.6% WoW to about RMB18,638 psm.

Tier-2/3 cities: Transaction volume up 73.8% WoW Volume in Tier-2/3 cities rebounded 73.8% WoW. Overall volume was 44% below the peak of April 2010. Dalian, Suzhou and Lanzhou led the rebound with respective WoW rises of 1,075%, 280%, and 264%; while among the 35 cities only Chongqing and Chengdu saw declines of 2% and 18% WoW respectively. Tier-2/3 cities’ ASP fell 5.5% WoW to about RMB9,109 psm.

Volume under test with further home restriction order Up to now, a total of 14 cities have published detailed purchase restriction regulations or revised its original purchase restriction ordinances, to bring the policies in line with central govt’s guidelines set on Jan 26. Beijing has so far introduced the strictest version that reframes non-locals without five consecutive years of local tax/social security proof from buying a home in the city. There was report saying that the central govt is mulling to expand the restriction to 72 major cities across China. If the restriction orders are to be carried out thoroughly, investment, speculation and some luxury end-user demand will be seriously hit, posting heavy pressure for developers to liquidate stock. When huge amount of new supply coming into the market later this year as a result of new construction boom in 2H09 and 2010, greater demand/supply imbalance will occur by then, which may finally start to bring down overall housing prices to tap end users.

Picking favorites in a price-cut scenario We believe end-user-focused, fast-asset-turnover players and state-owned developers such as China Vanke, Evergrande, COLI, CR Land, Poly HK and Minmetals Land are likely to perform better. Their ability to generate more cash from faster sales should mitigate the effects associated with potential credit tightening and down-trending selling prices. Conversely, developers with high gearing, such as Agile, Greentown, R&F and Shimao, will likely feel a greater impact as they could be relatively more vulnerable to stricter credit controls. Due to encouraging growth prospects in the commercial space and the relatively limited impact of the tightening measures, we maintain our positive view on prime commercial property companies. On that front, we like companies such as Hang Lung, Franshion, SOHO and Renhe. Our target prices are based on DCF-based NAVs. Key sector risks: stricter government measures and unexpected economic volatility.



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Telecommunications Fixed Line

21 Feb 2011 - 06:24:57 PM HKT

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China Telecom Buy

The best for last; CT Jan net adds


Price (HKD) 4.51


52-week range (HKD) 4.70 - 3.30





Price/book (x) 1.3

FYE 12/31 2009A 2010E 2011E

Sales(CNYm)

209,370 223,763 242,348

Net Profit(CNYm)

14,422.0 15,596.5 17,178.7

DB EPS(CNY)

0.16 0.19 0.21

PER (x) 18.7 20.4 18.0

Yield (net)(%)

2.4 2.0 2.0

Strong Jan net adds for China Telecom. China Telecom reported impres-sive January net adds. Mobile net adds totaled 3.53m, for a 41% MoM and15.7% YoY increase. Compared to China Telecom's figures, China Mobile'sreported 20.2% MoM increase and China Unicom's 17.4% MoM gain seemless impressive. 2G net adds were 2.18m and 3G net adds were 1.35m.January 3G net adds were 29% higher than the monthly average net addlevel for 4Q10. Importantly, we believe few 3G net adds were low-ARPUdata cards. 3G now accounts for 14.5% of CT's mobile subscriber base,representing the highest penetration rate amongst the three operators.

China Telecom saw 32% net add market share in January. CM sawroughly 48% CU only 20%. Jan 3G net add market share was CT at 29%,CM at 41% and CU at 30%.

Fixed line net adds in-line with expectation. CT lost 420k fixed line sub-scribers in January, ending with 174.64m fixed line voice subs. Thecompany's broadband subscriber count increased by 1.03m (+30.4%MoM, +30.4% YoY) to 64.51m BB subs.

China Telecom - top pick. China Telecom remains our preferred Chinesetelco operator. The company continues to deliver strong and consistent re-sults. Maintain Buy with TP of HK$5.40.






Asia Hong KongBanking/Finance Banks

21 Feb 2011 - 11:36:33 AM HKT


Hang Seng Bank Buy

HSB will discontinue HIBOR-based mortgage loans; posi-tive


Price (HKD) 124.00


52-week range (HKD) 133.90 -101.50


Shares outstanding (m) 1,912

NPL/total loans (%) 0.6

Price/book (x) 3.5

FYE 12/31 2009A 2010E 2011E

Provisioning(HKDm)

812.0 430.6 685.9

Pre-provprofit(HKDm)

14,026 14,655 17,168

EPS (HKD) 6.87 7.59 8.69

PER (x) 15.0 16.3 14.3

Yield (net)(%)

5.0 4.4 4.5

HSB to discontinue HIBOR-based mortgage loans; positive for NIMHSB will focus on Prime-based mortgage loans and essentially HIBOR-based loans will be discontinued. We see this as positive since it signals animproved pricing and lending environment for HSB as the bank goes aftermargin instead of volume. We have previously highlighted that theturnaround in mortgage rate pricing will continue in our report HSB: Hittinginflection point for outperformance, dated 12 November 2010.Other banks likely to follow suitWe estimate that about 48% of system mortgage loans are currently HI-BOR-based. About 30-40% of system mortgage loans are repriced everyyear and Prime-based mortgages are about 100bps higher in pricing. Basedon our analysis, HSB's NIM should improve by 5bps over the next threeyears as HIBOR-based mortgages are replaced by Prime-based mortgages.The NIM impact should be greatest for HSB given it has the largest mort-gage loans exposure at 29% of total loans, followed by BOCHK, WHB,DSBG and BEA. We believe other banks will likely follow suit as they havedone in November when HSB first raised HIBOR-based rates by over 10bps.We believe banks are becoming more selective on loan growth and pricingafter system loan growth of 29% in 2010, and continued strong demand forcommercial lending this year. We estimate NIM to improve over the nextthree years: HSB (15bps), BOCHK (+12bps), WHB (+11bps), DSBG (+9bps)and BEA (+5bps).

Source: Deutsche Bank, company data

Sophia Lee, CFAResearch Analyst(+852) 2203 [email protected]

Tracy YuResearch Analyst(+852) 2203 [email protected]



Asia Taiwan Technology Semiconductor & Semiconductor Equipment

21 February 2011

Siliconware Precision Reuters: 2325.TW Bloomberg: 2325 TT Exchange: TAI Ticker: 2325

Continued fundamental improvement; retaining BuyMichael Chou Research Analyst (+886) 2 2192 2836 [email protected]

Tommy Kuo Research Assistant (+886) 2 2192 2823 [email protected]

More positive signs Our latest surveys suggest margins may beat our estimate in 1Q11 due to slower NTD appreciation and continued copper migration. We expect GM to recover in 2Q11, driven by a product mix shift and improved operational efficiency. SPIL is our top pick in the Taiwan semiconductor sector for 2011 due to its relatively attractive valuation and the Street's overly negative view on the pace of margin / earnings recovery. We expect more upward earnings revisions on the Street over the next 6-12 months. Our 2012 EPS forecast is 26% above consensus estimate.



Sales (TWDm) 56,886 63,857 70,183 79,558 88,607

Net Income (TWDm) 8,790 5,849 7,079 11,167 12,608

DB EPS FD(TWD) 2.82 1.87 2.26 3.56 4.02

DB EPS growth (%) 39.4 -33.8 21.0 57.7 12.9

PER (x) 14.1 19.1 17.8 11.3 10.0

Price/BV (x) 2.1 1.8 2.0 1.8 1.8

Yield (net) (%) 6.5 4.6 5.0 8.0 8.9

ROE (%) 14.3 9.4 11.3 16.7 17.8Source: Deutsche Bank estimates, company data



Company Update

Buy Price at 21 Feb 2011 (TWD) 40.25Price target - 12mth (TWD) 50.0052-week range (TWD) 41.95 - 28.85TWSE 8,839


20

30

40

50

60

70

2/09 5/09 8/09 11/09 2/10 5/10 8/10 11/10Siliconware Precisio

TWSE (Rebased)

Performance (%) 1m 3m 12mAbsolute 5.0 28.6 -0.9TWSE -1.3 6.4 18.8

Stock data

Market cap (TWDm) 125,435Market cap (USDm) 4,268Shares outstanding (m) 3,116.4Major shareholders Lin Family (2.93%)Free float (%) 88Avg daily value traded (USDm) 21.9


ROE (%) 11.3Net debt/equity (%) -13.1Book value/share (TWD) 20.4Price/book (x) 2.0Net interest cover (x) –Operating profit margin (%) 11.6

EPS consensus

Year 2011E 2012E 2013EEPS consensus (NT$) 2.25 2.83 3.99Deutsche Bank EPS (NT$) 2.26 3.56 4.02DB over consensus 0% 26% 1%

1Q11 should mark the bottom; faster margin recovery We continue to expect margins to bottom out in 1Q11 and recover beginning in 2Q11. We estimate GM to reach 13%-plus in January. GM may dip from 14.3% in 4Q10 to 13%-plus in 1Q11 vs. our estimate of 12.0%. We anticipate GM to improve 350bps in 2Q11 in light of strong copper and flip-chip (CPU packaging for AMD) ramp and improvement in operational efficiency. This implies that margins should recover at a faster pace and GM may reach 16-17% in 2Q11 vs. our estimate of 15.5%. Notably, we foresee upside risks that GM may improve to 24-25% in 2H12 vs. our estimate of 22.1-23.5%, which is close to ASE’s unconsolidated GM (ASE only; excluding USI) of 25% currently. This could be two quarters ahead of our forecast and beat consensus estimate by 4-5 quarters.

A solid growth name in the long term In our view, the company should continue to benefit from the rising penetration of electronic devices in emerging markets and market share expansion, based on copper and flip-chip growth. We expect a 29% earnings CAGR during 2011-13 and 17-18% ROE in 2012-13.

Favorable risk/reward profile Our analysis shows favorable risk/reward (including the 2011 dividend yield) of 9% downside risk (a NT$35 valuation) vs. 55% prospective upside potential (a NT$61 valuation). We believe this provides attractive long-term entry points in 1H11. Our target price of NT$50 is based on 2.3x 2011-12E average P/B. Downside risks include the ramp-up pace of copper products, the gold price, the magnitude of NTD appreciation vs. the USD, and end demand.



Asia Korea, Republic ofTechnology Hardware & Equipment

21 Feb 2011 - 12:03:29 PM GMT

INDUSTRY ALERT Industry UpdateHardware & Equipment Korea LCD: 2H February panel price update

Focus stocksSEC (005930.KS),KRW948,000.00Buy, Price Target KRW1,200,000.00

LG Display(034220.KS),KRW36,900.00 Buy,Price Target KRW46,000.00

Panel price shows stabilization in February:DisplaySearch announced Feb 2H LCD panel price which shows stabiliza‐tion across the board with flat HoH for most of IT panel and roughly 1%decline for TV panel which was largely in‐line with our expectation of lowsingle digit % QoQ decline in 1Q.LCD TV sell-through still remains mixed across the region:Our channel check suggests, LCD TV sell through in US and EU remainsluggish with ‐low single digit growth and +low single digit growth respec‐tively, which is tracking slightly weaker than expected. However, CNYdemand from China seems to be upbeat the low expectation with roughly15% of YoY increase (On removal of base effect), which might be enoughto clear the inventory issue. For the rest of the year, we continue to believethat US is the key, given it was the biggest laggard in 2010 while thereshould be substantial pent‐up demand for LCD TV replacement purchasedduring 2003‐4.Moderate recovery of panel price from 2Q:We expect a moderate recovery of panel price from late 1Q or early 2Qgiven: 1) Production yield issue in SEC amid the technology conversion; 2)panel demand from the major set brands for the launch of new models and;3) inventory building demand from China for Labor Day given favorable pan‐el inventory situation.Buy LGD on bottoming cycle along with 2 company specific catalyst:We reiterate our buy on weakness call on LGD. Despite some concern overslightly weaker than expected 1Q result which seems to be the main rea‐sons for the recent pull back, we believe worst situation is now passingthrough given 1) the bottoming LCD cycle; 2) more meaningful contributionfrom Apple business; 3) potential M/S gain in TV panel leveraging FPR paneland; 4) attractive valuation at roughly 1.1x P/B.

TFT-LCD panel price

Source: Deutsche Bank, DisplaySearch

Sc BaeResearch Analyst(+82) 2 316 [email protected]

Hoyer JeongResearch Associate(+82) 2 316 [email protected]



Asia ASEAN SingaporeTelecommunications Fixed Line

21 Feb 2011 - 09:07:05 AM HKT


Singapore Telecom Hold

Still range-bound

Reuters:STEL.SI Exchange:SES Ticker:STEL

Price (SGD) 2.95

Price target (SGD) 3.31

52-week range (SGD) 3.32 - 2.76




Book value/share (SGD) 1.56

Price/book (x) 1.9

FYE 3/31 2010A 2011E 2012E

Sales(SGDm)

16,871 18,064 17,769

Net Profit(SGDm)

3,906.6 3,769.7 4,009.1

DB EPS(SGD)

0.24 0.24 0.25

PER (x) 12.3 12.5 11.8

Yield (net)(%)

4.9 5.6 6.0

STel closed on Friday at S$2.95, down 6% over the last 3M and at its lowestlevel since Aug 2010. As such, the stock is now at the lower end of its recent(and remarkably tight) trading range - since Sept 2009, STel has closed be-low S$2.95 on only 9% of trading days, below S$2.90 on just 3% of suchoccasions and between S$2.95-3.15 on 77% of such days.But this recent relative weakness has been driven more by stub compres-sion than declines in the underlying per share value of the Associates. Overthe last three months, the per share value of the Associates has declinedby just 6 cents per share while the stub has fallen by 18 cents per share. Aquestion therefore is whether the recent price movement reflects increas-ing concerns over the stub's earnings outlook: Australia's competitiveoutlook is deteriorating while the impact of Singapore's National BroadbandNetwork is likely to be punitive to STel's domestic business. But this outlookis already in our estimates and as such we see little downside risk to ourforecasts for the core business. Furthermore, we do not believe the chang-ing dynamics in both Singapore and Australia should surprise investors.Continue to trade the rangeClearly the core business outlook is increasingly difficult but we see no ob-vious reason for STel to break out of its established trading range signifi-cantly in either direction particularly given the current stub valuation (whichis currently trading at its long-term historical average - 13.1x forward PE)and the fact that we see no compelling investment narrative either to theupside or downside. We remain confident therefore that the trading rangewill be maintained and as such expect STel to recover from current levelsover the near-term. But given the limited 12M upside, maintain Hold.


Andrew AnagnostellisResearch Analyst(+61) 2 [email protected]

Wei-Shi WuResearch Analyst(+65) 6423 [email protected]



Asia IndiaResources Construction Materials

21 Feb 2011 - 10:36:32 AM IST

INDUSTRY ALERT Industry UpdateConstruction Materials Cement companies could attempt pass-through of cost push

Focus stocksACC (ACC.BO),INR983.75 Hold,Price Target INR930.00

Grasim (GRAS.BO),INR2,294.05Buy, Price Target INR2,730.00

India Cements(ICMN.BO),INR92.50 Sell, Price Tar‐get INR81.00

Jaiprakash Associates(JAIA.BO),INR85.25 Hold, Price Tar‐get INR85.00

Shree Cement(SHCM.BO),INR1,722.10 Hold,Price Target INR1,760.00

UltraTech Cement(ULTC.BO),INR946.70 Hold, PriceTarget INR1,070.00

Our interactions with cement traders and retailers suggest that cementcompanies could attempt another round of price increase of c2‐5%, fol‐lowing cost inflation pressures and not an encouraging demand growthoutlook. Barring Eastern India, where cement companies have compara‐tively higher stocks, the probability of price increases coming through andsustaining in other regions look higher.

DB picks in this scenario1) We continue to prefer diversified players like Grasim (Buy, Target priceINR 2,730) as it (a) benefits from the supercycle in VSF (contributes to c45%of consolidated profits). Please note that VSF prices have moved upto INR140/kg from the Q3FY11 average of INR 123/kg, (b) is available at an attrac‐tive valuation of 10x P/E FY12E consolidated earnings vis a vis the positionin the cycle.2) Prefer Shree Cement (Hold) vs India Cements (Sell) on relative basis asproduction discipline in Northern India appears superior to that in SouthernIndia.


Chockalingam NarayananResearch Analyst(+91) 22 6658 [email protected]

Manish SaxenaResearch Analyst(+91) 22 6658 [email protected]

Anup KulkarniResearch Associate(+91) 22 6658 [email protected]



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Consumer Food & Beverage

21 Feb 2011 - 08:30:30 PM IST

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COMPANY ALERT Results

Nestle India Limited Buy

Bucks the trend on gross margins, Maintain Buy

Reuters:NEST.BO Exchange:BSE Ticker:NEST

Price (INR) 3,461.15

Price target (INR) 4,200.00

52-week range (INR) 4,015.20 -2,556.55


Shares outstanding (m) 96.4



Price/book (x) 52.0

FYE 12/31 2009A 2010E 2011E

Sales (INRm) 51,294 62,105 75,136

Net Profit(INRm)

6,550.1 7,936.5 10,866.0

DB EPS(INR)

67.94 82.32 112.70

PER (x) 29.3 42.0 30.7

Yield (net)(%)

2.4 1.9 2.6

Nestle reported strong 4QCY10 result with 24% sales growth (vs 17% DBe)driven by both pricing as well as volume growth. Domestic sales growthstood at 26.6% displaying strong consumer demand. The key highlight ofthe result however was the expansion in gross margins (63 bps YoY, 143bps QoQ) despite relatively high raw material prices (especially milk). Thisis quite significant at a time when most of the Indian consumer companiesare facing gross margin declines eg HUL -201 bps YoY, Dabur -385 bps YoY,Marico -672 bps YoY and displays Nestle's pricing power.The relatively higher growth in EBITDA (66% YoY) is due to higher employeecosts in 4QCY09 because of one-time acturial losses. However, if one wereto use Q1CY10 employee cost instead of 4QCY09 employee cost, to stripout the impact of one-time cost, the EBITDA growth still works out to 40%.For the full year Nestle has clocked an EPS of INR 84.9 per share (INR 86.8ex-contingencies), a shade above our estimate of INR 82.3. We maintainour earnings estimate and target price of INR 4200 per share. At our targetprice the PE works out to 37x CY11 and 31x CY12. (EPS estimate of INR112.7 for CY11 and INR 135.5 for CY12).

Source: Deutsche Bank, company data

Harrish ZaveriResearch Analyst(+91) 22 6658 [email protected]

Gaurav BhatiaResearch Associate(+91) 22 6658 [email protected]



Asia IndiaConsumer Retail/Wholesale Trade

21 Feb 2011 - 10:49:37 PM IST


Pantaloon Retail India Ltd Hold

Still in an an investment mode. Maintain Hold

Reuters:PART.BO Exchange:BSE Ticker:PART

Price (INR) 270.60

Price target (INR) 250.00

52-week range (INR) 517.40 -234.50


Shares outstanding (m) 217.1



Price/book (x) 1.9

FYE 6/30 2010A 2011E 2012E

Sales (INRm) 97,869 116,185 135,427

Net Profit(INRm)

674.9 1,759.6 2,378.8

DB EPS(INR)

3.27 8.11 10.96

PER (x) 110.7 33.4 24.7

Yield (net)(%)

0.2 0.3 0.3

Weak 2QFY11 resultsPantaloon reported weak 2QFY11 results with core retail EBITDA growth of12% and PAT growth of 5.5% despite a sales growth of 31%. Gross mar-gins declined by 216 bps and EBITDA margins declined by 146 bps YoY dueto higher material costs and poor performance of electronics retailing busi-ness.

Investment phase continues ..In the first half of FY11, Pantaloon has incrementally invested INR 6bn inWorking capital and INR 4.5bn on capex for core retail business; and INR800mn on Future ventures limited (other non core businesses) while theincremental sales for the core retail business has been only INR 6.6bn (2Q-FY11 vs 2QFY10).

.. which implies higher interest costThe interest cost on a consolidated business stood at INR 1.5 bn for Q2-FY11, up 22% QOQ (INR 1.2 bn in Q1FY11). Assuming no increase in netdebt going forward, the interest cost for the full year works out to INR 5.7bn, c10% higher than our full year interest cost estimate of INR 5.2 bn. Ifwe were to factor in INR 5.7 bn as interest cost, the earnings would declineby 17%.The company in its conference call re-iterated its plans to divest stake in anumber of businesses - eg Insurance, Office supplies, financial services etchowever we believe that till the time the core retail business generates freecash flow and capital is freed up from non core businesses, the companywill require capital funding and hence would remain in an investment phaseMaintain hold with a target price of INR 250 per share.

Source: company data

Harrish ZaveriResearch Analyst(+91) 22 6658 [email protected]

Gaurav BhatiaResearch Associate(+91) 22 6658 [email protected]



Asia ASEAN IndonesiaConglomerates

21 Feb 2011 - 02:30:45 AM GMT

COMPANY ALERT Industry Update

Astra Int'l Buy

Yamaha 2-wheeler capacity expansion in Indonesia

Reuters:ASII.JK Exchange:JKT Ticker:ASII

Price (IDR) 53,000

Price target (IDR) 79,000

52-week range (IDR) 60,000.00 -36,050.00




Book value/share (IDR) 12,060

Price/book (x) 4.39

FYE 12/31 2009A 2010E 2011E

Sales(IDRbn)

98,526 132,816 155,103

Net Profit(IDRbn)

10,040.0 14,100.0 16,784.0

DB EPS(IDR)

2,480 3,483 4,146

PER (x) 9.5 15.2 12.8

Yield (net)(%)

3.6 1.9 1.9

Yamaha eyeing its third motorcycle factory in IndonesiaAfter investing US$100mn (Yen9bn) to increase its capacity from 3mn unitsp.a. in 2010 to 3.6mn units p.a. in 2011, Yamaha Motor Companies (YMC)plans to increase its capacity further by 10% (360k units p.a.) with invest-ment cost of US$118mn (Yen10bn). Although the management could notconfirm the location and timeline of the new factory's development yet,operation is expected to start by 1H12. Initial aim of this new factory wouldbe to build motorcyle spare parts but future plan is to also transform it intoan assembly factory in order to satisfy the rising domestic demand for mo-torcycles in Indonesia.The 2-wheeler competitive landscape remains intenseWe expect the competition in 2-wheeler market to remain high given Yama-ha continues to chase Astra Honda's number one position in the market.The fact that Yamaha is already running at full capacity also means that theyhave no choice but to expand in order to prevent further loss in market shareto Honda, who gained 8% MoM market share in January at the expense ofYamaha (-6ppt MoM) and is expected to complete its capacity expansionas soon as 2Q11.Reiterate Buy rating on Astra Int'l with TP of Rp79,000We expect Astra Int'l to still be the main beneficiary from strong 2-wheelerdemand given Astra Honda's dominant in the market. Astra Honda has beenmoving in the right direction to regain back its lost market share from Yama-ha through its inroad into Yamaha's stronghold in scooter segment. AstraHonda has utilized aggressive product launches and scooter capacity ex-pansion in a bid to win the domestic market.

Scooter: top 3 main players

Source: Deutsche Bank; Company data

Rachman KoeswantoPT Deutsche Bank Verdhana In-donesiaResearch Analyst(+62) 21 318 [email protected]



Asia ASEAN IndonesiaAutomobiles & Components

21 Feb 2011 - 12:32:16 PM GMT


United Tractors Buy

Record high heavy equipment sales in January 2011

Reuters:UNTR.JK Exchange:JKT Ticker:UNTR

Price (IDR) 23,450

Price target (IDR) 27,600

52-week range (IDR) 25,900.00 -16,000.00




Book value/share (IDR) 4,871

Price/book (x) 4.81

FYE 12/31 2009A 2010E 2011E

Sales(IDRbn)

29,242 36,947 43,365

Net Profit(IDRbn)

3,817.5 3,929.6 5,387.6

DB EPS(IDR)

1,147 1,181 1,619

PER (x) 9.3 19.9 14.5

Yield (net)(%)

4.3 2.0 2.8

January Komatsu sales: 731units (116% YoY; 134% MoM)Komatsu sales started off with a record high in 2011 mainly supported bynormalization in the forestry sector (+205% YoY) and dramatic jump in themining sector (+145% YoY) for heavy equipment sales (refer to table belowfor more details). Overall, we expect monthly heavy equipment sales tonormalize in the next coming months as we belive there were carry-oversales from December 2010. We forecast 2011 Komatsu sales to reach6,050 units (+12% YoY).Mix performance for mining contractingPama Persada managed to record coal delivery of 6.3mn tons (+3% YoY;-11% MoM) and overburden removal of 55.4m bcm (+20% YoY; 0% MoM)in January and we attribute the weak MoM growth to weather condition. Intotal, Pama's performance is still in line with our 2011 forecast of 85.5mntons for coal delivery and 752.4m bcm for overburden removal, with ex-pectation of normalized weather.Higher coal sales from contribution by Tuah Turangga AgungNew contribution from Tuah Turangga Agung (TTA) has contributed to high-er coal sales of 307k tons (+32% YoY; +16% MoM) in January 2011. Overall,this January number is still relatively in line with our 2011 forecast of 5.5mntons.Reiterate Buy rating; TP: Rp27,600Our buy rating is predicated upon United Tractors' strong earnings prospectfollowing 1) buoyant commodity prices, particularly coal, which explains90% of its consolidated earnings, and 2) expected weather normalizationthat should lead to sharp earnings and margin improvement at Pama.

United Tractors' January operational summary

Source: Deutsche Bank; Company data

Rachman KoeswantoPT Deutsche Bank Verdhana In-donesiaResearch Analyst(+62) 21 318 [email protected]



Co

mp

any Asia ASEAN Thailand

Transportation Infrastructure

21 Feb 2011 - 06:44:41 AM GMT


Sino-Thai Engineering Buy

4Q10 result exceeds our forecast

Reuters:STEC.BK Exchange:SET Ticker:STEC

Price (THB) 13.10

Price target (THB) 17.00

52-week range (THB) 14.80 - 4.70

Market cap (USDm) 507



Book value/share (THB) 4.10

Price/book (x) 3.2

FYE 12/31 2010A 2011E 2012E

Sales(THBm)

9,291 14,023 18,399

Net Profit(THBm)

443.8 707.7 828.5

DB EPS(THB)

0.37 0.60 0.70

PER (x) 23.1 22.0 18.8

Yield (net)(%)

2.2 2.3 2.7

Consolidated balance sheet (Bt, m)

Sources: Company data, SET

STEC posted a 4Q10 normalized profit of Bt149m, up 37.7% YoY and 25.9%QoQ. The YoY rise was due to a 29.2% increase in construction revenuethanks to a bigger backlog and a widening of its gross margin from 8.1% in4Q09 to 8.6% as low-margin projects were completed.The QoQ increase was mainly due to a 61.1% jump in construction revenueas revenue recognition of new projects gained pace. This was despite anarrowing in its gross margin from 10.1% due to a larger revenue portionfrom infrastructure projects which normally yield a lower margin.STEC's results were better than our estimate but we maintain our 2011-12Fearnings. We also reiterate our Buy rating on the stock with a TP of Bt17.This is based on a 2011F P/BV of 4x (derived from +1std from STEC's his-torical average during the previous industry upturn in 2003-05).Key risks are cost overruns due to higher prices for raw materials, fewerthan expected new projects, stiffer competition, construction delays for itsmain projects and political instability which could delay projects yet to besigned and public works.

Consolidated quarterly results (Bt, m)

Sources: Company data, SET

Sansanee SrijamjureeTisco Securities Co, LtdResearch Analyst(+66) 2 633 [email protected]



Asia ASEAN PhilippinesConsumer Food & Beverage

21 Feb 2011 - 10:05:08 AM GMT


Jollibee Foods Corp Hold

2010 results

Reuters:JFC.PS Exchange:PHS Ticker:JFC

Price (PHP) 79.00

Price target (PHP) 80.00

52-week range (PHP) 97.00 - 53.00




Book value/share (PHP) 16.78

Price/book (x) 4.7

FYE 12/31 2009A 2010E 2011E

Sales (PH-Pm)

47,958 55,052 66,292

Net Profit(PHPm)

2,664.6 3,098.3 3,676.7

DB EPS(PHP)

2.58 3.02 3.58

PER (x) 18.5 26.2 22.1

Yield (net)(%)

1.8 2.5 1.4

2010 results in lineJollibee Foods Corp posted unaudited 2010 net income to shareholders ofP3.09 bn, up 16% YoY. The figure is in line with our forecast of P3.10 bn.4Q10 net income of P944 m is up 16% YoY.Mang Inasal, International help drive sales4Q10 system wide sales and revenue grew by 11.6% and 12.7%YoY, re-spectively due in part to the acquisition of Mang Inasal. This was bookedin November and contributed 5 percentage points to system wide salesgrowth in the period. The company ended the year with a total of 2,316stores of which Mang Inasal stores numbered 345. SWS growth was ledby Yonghe King and Hong Zhuang Yuan in China (+30%) and Jollibee Inter-national (+25%).Price hikes to recover rising costsWe understand that Jollibee stores increased prices in December 2010 torecover rising costs. This was the fourth increase for the year. Greenwichand Red Ribbon stores also increased prices in 2010. There have been costpressures from certain raw materials (flour, potatoes and dairy products). Agreater proportion of the company's same store sales growth in 2011 willcome from price increases rather than volume growth. We estimate JFC'ssame store sales growth at the low single digits in 2010.

Five quarter interim results summary

Source: Company data

Michael BengsonDeutsche Regis Partners, Inc.Research Analyst(+63) 2 894 [email protected]



Asia ASEAN PhilippinesUtilities Utilities

21 Feb 2011 - 11:26:12 AM GMT


Manila Water Buy

FY10 profit in line but EBITDA disappoints

Reuters:MWC.PS Exchange:PHS Ticker:MWC

Price (PHP) 17.80

Price target (PHP) 21.50

52-week range (PHP) 19.50 - 14.75

Market cap (USDm) 824



Book value/share (PHP) 9.30

Price/book (x) 1.9

FYE 12/31 2009A 2010E 2011E

Sales (PH-Pm)

9,533 10,804 12,214

Net Profit(PHPm)

2,660.7 3,141.6 3,387.7

DB EPS(PHP)

1.33 1.57 1.69

PER (x) 10.6 11.4 10.5

Yield (net)(%)

2.9 2.6 3.1

Net profit in lineFY10 net profit before preferred dividends and minorities came in atP3.987bn, which is roughly in line with our forecast of P3.888bn. We esti-mate net profit to common is c. P3.3bn, which translates to an EPS of P1.64/sh. This implies a PER of 10.9x.4Q headline profit grew 6% YoY to P835mn, slowing down from the 31%growth in 9M10. Note that the company started to lengthen its depreciationpolicy in line with the extended concession period in 4Q09.Billed volume growth decelerates in 4QBilled volumes rose by 3.5% YoY to 410mn cubic meters, in line with ourforecast. This implies that 4Q10 decelerated to 1.0% from the 9M10 growthof 4.3%. NRW dropped further to a record-low of 11% as of end-FY10 from15.8% in end-FY09.EBITDA disappointed4Q10 EBITDA dropped 8% YoY to P1.5bn, despite revenues rising by 9%YoY. The full-year EBITDA figure stood at only P7.634bn, 3% short of ourP7.856bn forecast and consensus' P7.781bn. EBITDA margin dropped by2ppts to 69% in FY10.We reckon the underperformance was partly due to higher power costs.Power accounts for c. 30% of the company's cash opex. Note that powerCPI accelerated by 15% YoY in 4Q10, against just 13% YoY in 9M10. Weawait further details from management.Capex of P9.6bn in FY10This was in line with its commitment to the regulator. Roughly 40% of thisamount was spent in 4Q alone.


Klyne ResullarDeutsche Regis Partners, Inc.Research Analyst(+63) 2 894 [email protected]

Gio Dela-Rosa, CFADeutsche Regis Partners, Inc.Research Analyst(+63) 2 894 [email protected]



Japan Automobiles Autos

21 February 2011

Nissan Motor Reuters: 7201.T Bloomberg: 7201 JT Exchange: TYO Ticker: 7201

"V" is for Versatility; Nissan's quest for global expansionKurt Sanger, CFA Research Analyst (+81) 3 5156-6692 [email protected]

Takeshi Kitaura Research Associate (+81) 3 5156-6738 [email protected]

Growth in new markets and improvement in old ones The speedy recovery in Nissan's earnings has been impressive driven mainly by volume. It has been greatly helped by the growth of its Chinese operations. A core pillar of its next phase of growth is its low cost car strategy. Combined with efforts to enhance profitability in developed markets by reducing currency exposure and capturing cyclical upside in the US, we expect Nissan to continue to see margin recovery. Buy on earnings upside and valuation.


Year End Mar 31 2010A 2011E 2011CoE 2012E 2013E

Sales (¥bn) 7,517.3 8,795.6 8,800.0 9,059.5 9,853.0

YoY (%) -10.9 17.0 17.1 3.0 8.8

Operating profit (¥bn) 311.6 562.4 535.0 640.6 771.0

YoY (%) – 80.5 71.7 13.9 20.4

Recurring profit (¥bn) 207.7 567.6 530.0 637.4 774.3

Net profit (¥bn) 42.4 334.4 315.0 382.9 467.2

EPS (¥) 10 80 75 92 112

P/E (x) 62.5 11.0 11.7 9.6 7.9Source: Deutsche Securities Inc. estimates, company data

Forecast Change

Buy Price at 18 Feb 2011 (¥) 885Price target - 12mth (¥) 1,10052-week range (¥) 893 - 606

Key changes

EPS (¥) 85 to 80 -5.5%OP (¥bn) 576.5 to 562.4 -2.4%RP (¥bn) 573.1 to 567.6 -1.0%


150

300

450

600

750

900

2/09 8/09 2/10 8/10Nissan Motor

TOPIX (Rebased)

Performance (%) 1m 3m 12mAbsolute 4.9 10.6 17.8TOPIX 4.5 12.1 7.6

Stock data

Market cap (¥bn) 3,690Shares outstanding (m) 4,169Foreign shareholding ratio (%) 65.3TOPIX 974


ROE (%) 11.7BPS (¥) 720P/B (x) 1.2EPS growth (%) 671.2Dividend yield (%) 1.1

Over one million units by 2013 – a plan to turn a weakness into strength Nissan laid out details of its low-cost car plan to expand in emerging markets. Dubbed the V-platform (V = versatility) Nissan plans to sell three models in 170 countries and to double sales of these models globally to 1.12m units by 2013. The plan combines consideration of local style and powertrain preference, planning to localize costs, and focus on commonality between the models. The aim is to achieve profitable growth inline with company average margins. For Nissan, emerging markets have been a relative area of weakness and also so has, by their own admission, profitability on small cars. As we look to the next midterm plan to be delivered in May we expect this to be a core area of focus.

Timing issues in 3Q means strong top-line growth in 4Q 3Q results were a bit weaker than we had expected due largely to timing between production and wholesale. This should result in a large QoQ increase in revenue to help offset the seasonal 4Q cost surge and keep OP flat QoQ. Looking to FY3/12 we continue to expect margin expansion (OPM 7.1%) followed by further progress in FY3/13 (7.8%) as the company moves toward what we expect to be its minimum midterm target of 8%. Growth in emerging markets is not the sole driver as we also see focus on core costs in Japan and N. America to improve profitability going forward as Nissan looks to minimize the impact of the ¥/US$.

Valuation/Risks We continue to base our TP of ¥1,100 on 4.5x FY3/12 EV/EBITDA based on an average peer group multiples between 2003 and 2008 during a period of stable earnings. On our FY3/12 estimates, Nissan is trading at 3.5x EV/EBITDA and 9.6x PER. Downside risks include 1) execution risk for the launch of their new global V-platform and 2) execution risk on launch of Leaf EV.




Appendix 1 Important Disclosures

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Analyst Certification

The views expressed in this report accurately reflect the personal views of the undersigned lead analyst about the subject issuers and the securities of those issuers. In addition, the undersigned lead analyst has not and will not receive any compensation for providing a specific recommendation or view in this report. Ching-Li Teo

Equity rating key Equity rating dispersion and banking relationships Buy: Based on a current 12- month view of total share-holder return (TSR = percentage change in share price from current price to projected target price plus pro-jected dividend yield ) , we recommend that investors buy the stock. Sell: Based on a current 12-month view of total share-holder return, we recommend that investors sell the stock Hold: We take a neutral view on the stock 12-months out and, based on this time horizon, do not recommend either a Buy or Sell. Notes: 1. Newly issued research recommendations and target prices always supersede previously published research.2. Ratings definitions prior to 27 January, 2007 were:

Buy: Expected total return (including dividends) of 10% or more over a 12-month period Hold: Expected total return (including dividends) between -10% and 10% over a 12-month period Sell: Expected total return (including dividends) of -10% or worse over a 12-month period

8%

32%

60%

11%12%12%

0

100

200

300

400

500

Buy Hold Sell

Asia-Pacific Universe

Companies Covered Cos. w/ Banking Relationship


http://gm.db.com/ger/disclosure/DisclosureDirectory.eqsr



Regulatory Disclosures

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