2013 Asia Research Outlook

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 thisreport. 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) 072/04/2012

Dear Client,

We are pleased to present our 2013 Asia Outlook highlighting our views on all the majorsectors and countries across the region.

These summary views come from our team of experienced analysts with strong local marketknowledge. We have ranked senior analysts located in 13 major Asian cities (ex-Japan) andcover more than 1,000 stocks. Our Country and Sector views are extremely well supportedby a best-in-class macro & strategy team and our stock views benefit tremendously fromy gy ycooperation within sectors on both a regional and global level as evident in the numerousFITT (Fundamental, Industry, Thematic, Thought Leading) reports published last year.Furthermore, our widespread geographical presence allows our analysts to develop stronglocal relationships, understand micro trends and spend more time with their corporates.These relationships underpin our Corporate Access offering: Our annual conference line-upfeatures flagship events such as dbAccess Asia in Singapore; dbAccess China in Beijing; anddbAccess India in Mumbai. We look forward to seeing you at one (and hopefully more) ofthese events in 2013.these events in 2013.

2012 was both interesting and challenging in equal measure but our team is generallyupbeat going into 2013 given our expectations for lower policy uncertainty in the keyeconomies, a recovery in economic growth from cyclical lows across the region andreasonable equity valuations. As such, we would very much like to take this opportunity towish you all the very best for 2013 and to thank you for all your support over recent years.Please contact us should you have any research-related questions or feedback for our teamand full contact details for our team heads are contained at the back of this reportand full contact details for our team heads are contained at the back of this report.

Best regards,

Fergus Lynch David Clark William BrattongHead of Asia Pacific Research Head of Asia Ex-Japan

Equity ResearchAssoc Director, Asia Ex-Japan Equity Research

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Table of Contents

Macro / StrategygyEconomics p6Equity Strategy p7FX & Rates p8Credit Strategy p9Quantitative Research p10

CountriesA t li 12Australia p12China p13Hong Kong p14India p15Indonesia p16Malaysia p17Philippines p18Singapore p19South Korea p20pTaiwan p21Thailand p22

SectorsAutos p24Banks p25Conglomerates p26Consumer p27pGaming p28Healthcare p29Industrials p30Infrastructure p31Insurance p32Internet p33Metals & Mining p34Oil & Gas p35Power p36Power p36Property p37Small Cap p38Tech – Hardware p39Tech – IT Services & Software p40Tech – Semis p41Telco p42Transport p43

Contact details p44

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Global FITT Research

Asia FITT Research

4

Macro/Strategy

5

Economics

The Outlooke Out oo

The difficult negotiations regarding the US “fiscalcliff” highlight the struggle the G3 face in reducinggovernment debt and deficits. The risks this processposes for Asia are high given the region’s exposure toglobal growth. But our baseline forecast for 2013/14 isone of progressively stronger growth abroad and inAsia We are especially bullish on China and see theAsia. We are especially bullish on China and see themore export-sensitive economies of Hong Kong,Singapore, South Korea and Taiwan as also likely tosee much stronger growth. Conversely, we expectgrowth in ASEAN ex-Singapore will remain stable.The recovery in India will be less impressive than inChina, but our forecasts are above consensus theretoo. With stronger growth, however, will likely comehi h i fl i W hhigher inflation. We expect exchange rateappreciation will be the main anti-inflation policy tool,but expect rate hikes to resume, led by thePhilippines, Indonesia and Thailand. India and SriLanka conversely, are expected to cut rates by 100bpsand 75bps, respectively. Key risks to the region arethe possibility of higher food price inflation and therisk that an aggressive reflationary policy in Japan

The Team

Chief Economist, Asia-Pacific - Michael Spencer

Australia - Adam Boyton, Philip OdonaghoeHK / Chi J M Mi h l S Li Li

might lead to a sharp JPY depreciation, undercuttingother countries’ export competitiveness.

HK / China - Jun Ma, Michael Spencer, Lin LiIndia - Taimur Baig, Kaushik Das

Indonesia - Taimur BaigMalaysia - Michael Spencer

New Zealand - Darren GibbsPhilippines - Taimur Baig

Singapore - Michael Spencer South Korea - Juliana Lee

Taiwan - Juliana LeeThailand - Juliana LeeVietnam - Juliana Lee

6

Equity Strategy

The Outlooke Out oo

Asian equities should have a decent run in 2013, afterbeing in a stealth bull market in 2012. While investorsare weary of analyzing the policy zig-zags andweekend communiqués of the past few years, a keytheme this year is likely to be a drop in economicpolicy uncertainty. This is a key driver of equityperformance the stock picking opportunity and theperformance, the stock-picking opportunity and therelative performance of more cyclical stocks with lesspristine balance sheets. It also means that the “sinstock” bubble might pop. We think that Asianmargins should surprise positively as the terms oftrade improve and we see a cyclical low in economicactivity by early 2013.

A h i l i f A i l k blAt the same time, valuations for Asia look reasonable– 0.63 standard deviations below the long-termaverage, risk-love (sentiment) is neutral and policy islikely to ease selectively in the region. All these meanthat this is a positive environment for equities. Weretain our focus on combining value with growth andstay focused on risk-love, trying not to get too excitedwhen it is euphoric, and not too depressed when it isin a panic. As such, we remain overweight onTHAILAND & INDIA and underweight on KOREA &TAIWAN, positions that have helped our modelportfolio in 2012.

The Team

Head of Equity Strategy - Ajay KapurHead of Equity Strategy Ajay Kapur

Regional - Ajay Kapur, Ritesh Samadhiya, Sanjeev SanyalAustralia - Tim Baker

HK / China - Jun Ma, Lin LiIndia - Abhay Laijawala, Abhishek Saraf

Indonesia - Heriyanto Irawan Malaysia - Joe Liew

Philippines - Rafael GarchitorenaSi G L iSingapore - Greg Lui

South Korea - John KimTaiwan - Joelian Tseng

Thailand - Derek Bloomfield

7

FX & Rates

The Outlooke Out oo

As we ride the QE ship into 2013, there looks to bemore left to play for in the Asian rates and currencycomplex. To be sure, the easing cycle is over in mostof Asia and absolute levels of yields are close to, ifnot at, all time lows. With reduced carry, and thepossibility of re-pricing inflation expectations insome of the G3 curves duration is relatively lesssome of the G3 curves, duration is relatively lessattractive to hold. But the search for yield in thecontext of global QE and the pull of credit re-ratingfor Asian sovereigns, continues to support Asianfixed income. A modest supply outlook, and theappetite from local real money investors to absorbrisk in the event of cheapening of spreads, shouldallow Asian curves to outperform the US in a sell off.

Currencies should pick up some of the slack in thisdiminishing pool of total returns. Asian FX shouldbenefit from capital inflows in the context of globalQE, a gradually improving growth outlook, reductionin tail risks and increased accommodation ofcurrency strength by regional central banks. Returnswill likely become more differentiated and riskspossibly more linked to the shape and form ofregulatory intervention.

We enter 2013 with a more cautious stance onduration and a more constructive, though discerning,bias on currencies. For cash bond investors, werecommend overweight exposure to India and thePhilippines; market weight in China, Indonesia,Philippines; market weight in China, Indonesia,Malaysia and Thailand; and modest underweight inKorea and Singapore. FX trades we like includebuying PHP and CNH (versus USD), and KRW versusJPY. We also favor buying 3M USD/INR RKO puts,and selling SGD versus the NEER. The Team

Head of FX & Rates - Sameer Goel

ASEAN / India - Sameer Goel, Arjun ShettyHK/China/Taiwan - Linan LiuSouth Korea - Ki Yong Seong

Asia FX - Sameer Goel, Mallika Sachdeva

8

Credit Strategy

The Outlooke Out oo

As we tighten views for the year ahead we remainpositive on Asian credit but we expect lower returnsthan in 2012 and certainly not without some volatility.We expect total returns for investment grade (IG) andhigh yield (HY) of around 4% and 8% respectively – orabout 1/3 of 2012’s returns (where Asia credit wasamong the best performing credit markets globally)among the best performing credit markets globally).Navigating market volatility with careful name selectionwill separate the winners and the losers.

Valuations remain supportive. Credit may look lessappealing from a yield perspective but the value is in thespread. Long term IG investors are adequatelycompensated for average default risk but perhaps less

f HY A i i ff i dso for HY. Asia continues to offer an attractive spreadpick-up relative to the US.

In terms of key views: Philippines’ CDS offers bettervalue than bonds and we prefer Indonesia overPhilippines. We prefer Sri Lanka over Vietnam. In IG webuy BBBs but prefer shorter-dated paper. We likeChinese consumer and gas and also see relative value inIndia. We turn more neutral on China property mainlygiven valuation and monetary policy expectation. Stayinvested in high-beta property credits for early 2013 togain carry, but we would turn more defensive should thesector yield dip under 8%. We prefer cement names inIndustrials and have a Credit Hold on most IndonesiaCoal names.

The Team

Head of Asia Credit - Gene Cheon

High Yield Industrials - Devinda Paranathanthri gHK/China Property - Jacphanie Cheung

Investment Grade - Colin TanAustralia - Anthony Ip

9

Quant Research

The Outlooke Out oo

As we compute into 2013, it is appropriate to lookback to 2012 during which stock pickers expressedpreferences by focusing on classic stockcharacteristics. As such, momentum and short termreversal factors were among the best factors in2012, as well as value factors including forwardearnings yield and sentiment factors such asearnings yield and sentiment factors such asearnings diffusion. Perhaps most astonishing andremarkable was the emphasis on high yieldingstocks. As we head into 2013, the environmentremains benign, at least according to the VarianceRisk Premium, stock dispersion and the marketvaluation that we are unable to explain viasystematic drivers. According to our multi-factor

l i d l k i I di d I d i dvaluation model, stocks in India and Indonesia, andin the defensive and consumer cyclical sectorscommand a premium, whereas stocks in Singaporeand Hong Kong, and in real Estate and resources arevalued at a discount. Relative to history, Hong Kongand technology stocks look “cheaper”, whereasstocks in the Philippines and defensives as well asstocks with higher turnover look “more expensive”.A positive scenario in which market liquidityimproves could lead to Chinese multiples expandingrelative to the rest of Asia.

The Team

Strategist - Khoi LeBinh

Strategist - Ada Lau

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Countries

11

Australia

The Outlooke Out oo

As we say g'day to 2013 we hold a positivemedium-term outlook for Australian equities. Themacro backdrop has been plagued by uncertaintyand Australian equities' performance has beenamongst the worst in history. We expect somedegree of mean reversion in 2013 rather than acontinuation of such extremes Equities should becontinuation of such extremes. Equities should besupported by a gradual rise in earnings frombelow-trend levels, cheap valuations (in PE termsand vs bonds), low gearing vs history and areduction of investors' U/W positioning (equityexposure is at 15 year lows). We also expect theglobal policy uncertainty that impacted markets in2012 to ease in the year ahead. Further, a gradual

i k i Chi h h ld b b fi i l fpick-up in Chinese growth should be beneficial forthe Australian resources sector. And on thedomestic front, recent interest rate cuts shouldassist earnings in the year ahead. In short, we lookfor a solid 10% total return for the Australianmarket in 2013. We prefer exposure to ENERGY,HOUSING and INSURANCE.

The Team

Head of Research – Tim King

Economics - Adam Boyton, Darren Gibbs, Philip O'DonaghoeEquity Strategy – Tim Baker

Fixed Income, Credit , FX - David Plank, John Horner, Gus Medeiros, Anthony IpFixed Income, Credit , FX David Plank, John Horner, Gus Medeiros, Anthony IpEnvironmental, Social & Governance - Tim Jordan

Banks, Insurance - James Freeman, Kieren Chidgey, Andrew TriggsConsumer, Gaming – Mark Wilson, Michael Simotas, Arie Dekker*

Health Care – David Low, Stephen Ridgewell* Industrials - Emily Behncke, Mark Wilson, Dennis Lee*

Metals & Mining - Paul Young, Brett McKay, Chris TerryPower, Oil/Gas - John Hirjee, Grant Swanepoel,* Hugh Morgan

P t I R d ll Ch i t h B * J W tProperty - Ian Randall, Christopher Byrne,* Jason WeateSmall-Mid Cap - Dominic Rose, Wassim Kisirwani, Jennifer Kruk

Telecoms -Vikas Gour, Arie Dekker* Transport & Infra - Cameron McDonald, Craig Wong-Pan

* New Zealand, Craigs Investment Partners

12

China

The Outlooke Out oo

Xin Nian Kuai Le from our China team who expect agood year ahead. Jun expects GDP growth toaccelerate to 8.5% in 2H13 from 8.0% in 1H13 &7.6% in 2H12 driven by corporate & infrastructureinvestment and a rebound in export growth in2H13. Valuations look supportive (fwd P/E of 10.3x)and we see 15% upside to MSCI China Key 2013and we see 15% upside to MSCI-China. Key 2013investment themes include: 1) growth recovery:cement, construction, infrastructure machinery, andshipping companies will likely outperform, as therecovery will be led mainly by investment andexports; 2) resource pricing reform: power, gas,water and oil refineries will be the mainbeneficiaries; 3) VAT reform, social spending, and

b i i h l h d i ill jurbanization: health care and construction will enjoythe resulting upside potential; 4) NPL cycle: banksmay continue to underperform for 1H13 given thatthe NPL ratio will likely rise further until Q3; 5)capacity rationalization: coal and steel will likelyunderperform cement due to slower pace ofcapacity rationalization; and 6) anti-corruption:Macau VIP gaming, watches, gift card sales at

The Team (HK/China)

Head of Research - Michael TongChief Economist & Strategist - Jun Ma

Economics & Strategy - Jun Ma, Lin Li Autos - Vincent Ha, Nora Min

Banks Insurance - Tracy Yu Esther Chwei Judy Zhang Sophia Lee

department stores will likely suffer from the newgovernment’s anti-corruption campaign. Basedlargely on these themes we like: BOC, SINOPEC,PING AN, UNICOM, COLI, CCC, HUANENGPOWER, CR CEMENT, CSCL & MINDRAY.

Banks, Insurance - Tracy Yu, Esther Chwei, Judy Zhang, Sophia LeeConglomerates - Karen Tang, Michael Tong

Consumer - Anne Ling, Lydia Ling Gaming - Karen Tang

Health Care - Jack Hu Infrastructure / Industrials - Michael Tong, Joe Liew, Phyllis Wang

Internet - Alan Hellawell, Alex YaoMetals & Mining - James Kan, Johnson Wan, Laura Zhai

Oil/Gas - David Hurd Power/Utilities - Michael Tong, Eric Cheng, Kai-ting Wong

Property - Tony Tsang, Jason Ching Small-Mid Cap - Vivian Hao

Telecoms - Alan Hellawell Transport - Joe Liew, Vincent Ha, Sky Hong, Nora Min

13

Hong Kong

The Outlooke Out oo

We expect limited upside to the MSCI-HK index in2013. HK GDP growth should stage a mildrecovery in 2013 to 2.5% from 1.3% in 2012 drivenlargely by the modest improvement in externaldemand from the G2 and China which shouldreduce the credit risk facing the banking systemand support steady growth in bank lendingand support steady growth in bank lending.Financials should also benefit from furtherprogress in China’s capital account liberalizationand the internationalization of the RMB. However,we believe property prices will be underdownward pressure due to a stronger governmentcommitment to increase land supply and controlspeculative demand.

Overall, we believe the HK equity market hasalready priced in a normalization of growth (theforward PE of MSCI-HK is on par with its historicalaverage) while HK and global growth in 2013 willlikely remain somewhat below potential. As aresult, we only expect a modest upside (8%) toMSCI HK, in line with our bottoms-up forecast on2013e EPS growth. By sector, we like BANKS (egBOC HK) and select CONGLOMERATES withsignificant trade exposure (eg HUTCHISON). Webelieve DEVELOPERS will underperform.

The Team (HK/China)

Head of Research - Michael TongChief Economist & Strategist - Jun Ma

Economics & Strategy - Jun Ma, Lin Li Autos - Vincent Ha, Nora Min

Banks Insurance - Tracy Yu Esther Chwei Judy Zhang Sophia LeeBanks, Insurance - Tracy Yu, Esther Chwei, Judy Zhang, Sophia LeeConglomerates - Karen Tang, Michael Tong

Consumer - Anne Ling, Lydia Ling Gaming - Karen Tang

Health Care - Jack Hu Infrastructure / Industrials - Michael Tong, Joe Liew, Phyllis Wang

Internet - Alan Hellawell, Alex YaoMetals & Mining - James Kan, Johnson Wan, Laura Zhai

Oil/Gas - David Hurd

14

Power/Utilities - Michael Tong, Eric Cheng, Kai-ting Wong Property - Tony Tsang, Jason Ching

Small-Mid Cap - Vivian Hao Telecoms - Alan Hellawell

Transport - Joe Liew, Vincent Ha, Sky Hong, Nora Min

India

The Outlooke Out oo

Nav Varsh ki Shubh Kaamnayein from Abhay & teamwho believe the Indian equity market is well poisedto benefit from an imminent rate cut cycle, expectedimplementation of reform measures, a bottoming outof economic growth by 1Q, reasonable valuations (inline with LT average) and a likely more favorableglobal risk appetite for equitiesglobal risk appetite for equities.

There are already recent positive signs regardinggrowth with the latest IIP reading at 8.2% (vs. avg of0.1% in preceding 6 months) and we believestronger capex/approvals in 2013 will layfoundations for a more structural and pronouncedgrowth recovery. Additionally, while the governmenth d t h ff th b b f lihas managed to shrug off the bugbear of policyparalysis, it now has to follow up on the reformannouncements with concrete implementation. Weexpect to see faster approvals flowing in fromCabinet Committee on Investment by 1H13 andfurther fuel price hikes.

We suggest overweight on Banks, Industrials andselect Consumption names. In terms of stocks, welike AXIS BANK, ICICI BANK, L&T, ULTRATECH andITC.

The Team

Head of Research – Abhay Laijawala

Economics - Taimur Baig Kaushik DasEconomics Taimur Baig, Kaushik DasEquity Strategy - Abhay Laijawala, Abhishek Saraf

Autos - Srini Rao, Amyn PiraniBanks, Insurance - Manish Karwa, Manish Shukla

Consumer - Manoj Menon, Gaurav Bhatia Industrials/Infra - Manish Saxena, Chockalingam Narayanan

IT Services - Aniruddha BhosaleMetals & Mining - Abhay Laijawala, Anuj Singla

Oil/Gas - Harshad Katkar, Amit MurakaP /U ili i Abhi h k P i M i h SPower/Utilities - Abhishek Puri, Manish Saxena,

Property - Abhishek Saraf Telecoms - Srini Rao, Amyn Pirani

15

Indonesia

The Outlooke Out oo

Selamat tahun baru from Heri, Raymond and therest of our team in Indonesia. We believe there aretwo macro scenarios to decide on before taking aview on stocks. The first suggests the economy hasgrown beyond its means, hence unpleasantadjustments are needed which would likely benegative for equities The second suggests thenegative for equities. The second suggests theeconomy has evolved from being consumption-driven to investment-driven, paving the way for avirtuous growth cycle (as investment-driven growthshould trigger job growth, pushing up discretionaryspending which in turn is likely to lure investmentfor ‘new’ demand). JCI’s first markedunderperformance in a decade underlines the

k i i S ill h ld h i iconsensus skepticism. Still, we hold the minorityview of a virtuous growth cycle.

We do not see inflation as a significant downsiderisk nor do we view a fuel price hike as likely andpolicy interest rates are likely to be stable. We arehowever concerned by potential for rupiahweakness. Overall, we expect macro concerns toweigh on stock performance near term butconcerns should ease over the course of the yearand we have a 12-month index target of 5,000.Near term, we would pay up for defensive growthstocks that are less exposed to IDR weakness,regulatory risk and rising competition. Top largecap picks are: BBCA, BMRI, SMGR, GGRM andCPIN. In the mid/small cap space we like BBTN,

The Team

Head of Research - Raymond KosasihHead of Strategy - Heriyanto IrawanCPIN. In the mid/small cap space we like BBTN,

JSMR, RALS, ICBP and SMRA. Economics - Taimur Baig Equity Strategy - Heriyanto Irawan, Nicholas Nugroho

Autos - Rachman Koeswanto, Jovin Ng Banks - Raymond Kosasih, Arinta Harsono

Consumer - Reggy Susanto, Adi PutraEnergy (Palm Oil) - Rachman Koeswanto, Jovin Ng

Industrials - Rachman Koeswanto, Jovin Ng , gMetals & Mining - Cherie Khoeng

Power, Oil/Gas - Cheri Khoeng Property - Albert Saputro

Small-Mid Cap - Nicholas Nugroho Telecoms - Raymond Kosasih

16

Malaysia

The Outlooke Out oo

As we say apa khabar to 2013, we highlight thatthe key event for Malaysia in 2013 will be thegeneral election which has to be called before 28April and held by 27 June. This may be anoverhang on near-term market performance (infact, the potential for political change may havecontributed to Malaysia’s relatively lacklustre 2012contributed to Malaysia s relatively lacklustre 2012performance). We believe that over the near-term,investors will continue to stay in defensive namesto take shelter from pre-election volatility but on a12 month basis, our highest conviction ideas are:TENAGA (expected to re-rate on lower fuel costsas well as government restructuring initiatives);GAMUDA (on good prospects for new raili f d i ) GENTING MALAYSIAinfrastructure order wins); GENTING MALAYSIA(on expected positive news-flow regarding its USexpansion efforts); and RHB CAPITAL (relativelyunloved but improving CASA deposit trends andcapital adequacy ratios likely to be re-ratingcatalysts).

The Team

Country Head - Aun-Ling Chia

Economics - Michael SpencerStrategy - Joe Liew

Banks - Andrew HillCommodities - Michelle Foong

Gaming - Aun-Ling ChiaMedia - Wei-Shi Wu

Property - Aun-Ling ChiaTelecoms - Wei-Shi Wu

Transport - Michelle FoongUtilities - Aun-Ling Chiag

17

Philippines

The Outlooke Out oo

As we say mabuhay to 2013, the macro backdropfor Philippine companies remains extraordinarilyrobust. One can argue, in fact, that current macroconditions (current account, inflation, interestrates, government debt, etc) are better than theyhave ever been in the past two decades (bettereven than the roaring nineties) A global (oreven than the roaring nineties). A global (orregional) recovery, should it happen, will only addto the positive momentum. Having said that, thePhilippines is hardly an "undiscovered" marketanymore (up +33% in 2012 in local currencyterms after being the best performer in the regionover the last two years). The broad market PERmultiple (17x for 2013) is near historic highs andh h dl b i l f W b li hthere are hardly any bargains left. We believe the

key investment themes for 2013 will be (1) theMay elections and (2) the government’sinfrastructure program. Within the market, welike ALLIANCE GLOBAL (election spendingboost), MERALCO (power demand linked toGDP), METRO PACIFIC (infrastructure + Meralcostake) and SECURITY BANK (highest ROE bank +

The Team

C Gimproved credit demand). Country Head - Giovanni Dela-Rosa

Economics - Taimur BaigStrategy - Rafael Garchitorena

Banks - Rafa GarchitorenaConsumer - Michael Bengson

Multi-Industry - Klyne ResullarProperty - Carl SyProperty Carl Sy

Telecoms - Giovanni Dela-RosaUtilities - Iza Fernandez

18

Singapore

The Outlooke Out oo

As we sing into 2013, resilient domestic growthdrivers should underpin the economy despite aweakening external environment – we expect3.0% GDP growth. Moreover, sustained lowinterest rates and an appreciating SGD shouldremain supportive of asset values. Marketvaluations are undemanding at 14x FY13e PE andvaluations are undemanding at 14x FY13e PE and1.4x PB, below five-year averages, and wereiterate our 3250 STI target. In light of relativevaluations, expectations of firmer capital valuesand an improving physical market, we shifted ourpreferences within the property sector fromREITs to developers. We like CAPITALAND andKEPPEL LAND, while within the REITS we preferAREIT f i d l bili El hAREIT for its development capability. Elsewhere,continued order wins and rising commodityprices should support the O&M sector(SEMBCORP INDUSTRIES & KEPPEL CORP)especially as recent margin contractions havebeen priced in. We also like OCBC for its sector-leading credit quality. Finally, strong balancesheets could continue to support strong

The Team

Country Head - Greg Lui

dividends at ST ENGINEERING and SATS.Economics - Michael Spencer

Strategy - Greg Lui

Banks - Andrew HillCommodities - Michelle Foong

Conglomerates- Kevin ChongProperty - Greg Lui, Elaine Khoo

Telecoms - Wei-Shi WuTelecoms Wei Shi WuTransport - Joe Liew, Wei-Shi Wu

19

South Korea

The Outlooke Out oo

As we say an-nyung-ha-se-yo to 2013, Korea facesan interesting set of challenges and issues. Thecountry is preparing to welcome a new presidentfrom late February (who will also be the nation's firstfemale president) and hence, is eagerly awaitingannouncements of new economic policies from theincoming administration The president elect'sincoming administration. The president-elect spledges during the campaign trail included a fairerdynamic between the conglomerates and SMEs, abetter balance between export and domesticeconomies to achieve growth, as well as easing ofthe middle-class burden. Meanwhile, external factorsthat will continue to affect the market sentimentsinclude: a) Ongoing macro issues in the U.S. and EU;b) i f i h i Chi db) resumption of economic growth in China underthe new leadership; and c) the new government'srelationship with North Korea. Some of the team'shigh conviction stock ideas are: 1) SK HYNIX(favorable supply environment); 2) HANKOOK TIRE(recovering global demand with capacity expansion);3) SEMCO (leverage to Samsung's smartphonegrowth); 4) SAMSUNG ENG (robust overseasbusiness with margin normalization); and 5)LGUPLUS (rising ARPU with sharp earningsrecovery). The Team

Country Head - John Kim

Economics - Juliana Lee

Autos - Sanjeev Rana, Chanwook ParkBanks/Financials - Jeehoon Park

Consumer - Jihyun SongIndustrials / Infrastructure - Sanghi Han, Sanjeev Rana

Internet - Hanjoon KimMetals & Mining - Chanwook Park

Oil & Gas - Shawn ParkTech - Seunghoon Han, Hanjoon Kimg , j

Telecoms - John KimTransport - Joe Liew, Sky Hong

Utilities - Sanghi Han

20

Taiwan

The Outlooke Out oo

As we say ni hao to 2013, Taiwan is expected tobe a beneficiary of the improving economicbackdrop although we see limited upside to our7,960 target on a 12 month basis. Nevertheless,there are four key themes which investors shouldbe focused on: First, ongoing structural changes intech as innovation becomes more important thantech as innovation becomes more important thanvolumes (winners expected to include TSMC,MEDIATEK, HON HAI & DELTA); second, Chinarecovery should sustain growth, especially forconsumer plays (for example, UNI-PRESIDENT);third, increased China investment and capexdriven in part by higher labour costs should bepositive for financial and industrial automation

(i l di MEGA FHC CHAILEASE &sectors (including MEGA FHC, CHAILEASE &DELTA); and fourth, container shipping remains agood proxy for global economic recovery(EVERGREEN MARINE is our top pick across thecontainer shippers). Our top tech picks into 2013include DELTA, HON HAI, EPISTAR, MEDIATEK,SYNNEX, TPK and TSMC, while across non-tech,we like MEGA FHC, CHAILEASE, UNI-PRESIDENT,EVERGREEN MARINE, LUNGYEN LIFE and TSRC.

The Team

Country Head - Joelian Tseng

Economics - Juliana LeeEconomics Juliana LeeStrategy - Joelian Tseng

Consumer - Joelian TsengFinancials - Pandora Lee

Petrochemicals - Alden LinTech (hardware) - Ivy Lee, William Yang

Tech (semis) - Michael Chou, Jessica Chang, Seunghoon Han

T l Willi YTelecoms - William YangTransport - Vincent Ha, Sky Hong

21

Thailand

The Outlooke Out oo

As we say sawatdee to 2013, we see furtherupside to the Thai market with y/e SET target1,450 driven by sustained capital liquidity, mid-single-digit GDP growth a more stable politicalenvironment and attractive valuations versusASEAN peers. Banks offer the most target priceupside and the investment cycle strength shouldupside and the investment cycle strength shouldsustain double-digit loan growth in 2013.Furthermore, the loan pricing environmentremains favorable, LDR pressures are reducedfollowing aggressive 2H12 deposit intakes, themargin outlook is favourable and valuations arecompelling. Peach likes KBANK, KTB and BAY.The petrochemical sector offers upside potentialf b il i d f bl GRMfrom buoyant oil prices and favorable GRMoutlook, while current Consensus expectationsare, in our view, too bearish. We prefer TOP andSCC. We also view the telco sector as attractivewith subscriber migration from high-revenue-share legacy concessions to low-revenue-shareperpetual licenses set to commence in 2013.Our preferred telco is ADVANC. We are moreselective in the commerce sector on stretchedvaluations and a higher risk of earnings missesbut within the sector we like CPALL, ROBINSand CPN for structural upcountry growthpotential and lower vulnerability to competition.

The Team

Country Head - Derek Bloomfield

Economics - Juliana LeeStrategy - Derek Bloomfield

Banks - Peach PatharavanakulBanks Peach PatharavanakulConsumer - Chalinee Comgmuang, Sopicha

WattanasansaneeEnergy - Thapana Phanich

Metals&Mining - Sansanee SrijamjureeProperty - Nash Shivaruchiwong

Telecoms - Thapana Phanich

22

Sectors

23

Autos

The Outlooke Out oo

Driving into 2013, Vincent expects a mild recoveryin Chinese auto demand given an improvingmacro backdrop. We still expect the luxurysegment to outperform in growth and our topOEM preference is BRILLIANCE, supported by aramp-up in BMW 3-series sales and increasingengine local production Our top dealership pick isengine local production. Our top dealership pick isBAOXIN which should benefit from the integrationof newly acquired dealers in Northern China.

In Korea, after the 3% decline in domestic sales in2012e, Sanjeev expects a recovery to 1% growthin 2013e driven by replacement demand and newmodel launches. We expect imports to continue to

i k h hi 9% f h l kgain market share, reaching 9% of the total marketin 2013e. However, in the overseas market weexpect Hyundai Motor to benefit from capacityexpansion completed in 2012. We expect HyundaiMotor’s global sales volume to grow 7-8% andthat of Kia Motors to grow 3-4% in 2013. Our toppick is HYUNDAI MOTOR.

Srini believes investors need to be selective intheir 2013e India picks as Indian auto stocks aretrading at the higher end of their valuation bandsand our preferences are driven by salesmomentum and margin resilience. We likeMARUTI the most while HERO is our preferredSell. We expect recovery in all segments in India,with the revival in passenger vehicles volumewith the revival in passenger vehicles volumegrowth at an estimated 16.5% for 2013 being thestrongest driven by fuel price moderation, inflationand lower interest rates. Growth in demand fortwo-wheelers and commercial vehicles is likely tobe more moderate. The Team

Sector Heads - Sanjeev Rana, Vincent Ha

HK/China - Vincent Ha, Nora MinIndia - Srini Rao, Amyn Pirani

Indonesia - Rachman Koeswanto, Jovin NgSouth Korea - Sanjeev Rana, Chanwook Park

24

Banks

The Outlooke Out oo

A strong year of performance for Asian banks is in thevault - the sector delivered a 2012 absolute return ofalmost 25%. Policy-induced liquidity benefited both thelarge cap yield plays (post the LTRO) and growthstocks, namely India and Thailand banks and Chinainsurers after the announcement of QE3, leading to thenormalization of valuations We also saw a generalnormalization of valuations. We also saw a generalunderperformance of Chinese banks vs. insurers due inlarge part to the impact of slowing deposit growth inChina and interest rate deregulation.

From Dec 2012, the Chinese bank stocks have beensupported by a recovery in China GDP, a trend that weexpect to continue into 1Q 2013. With stock prices of

h A i b k i d b fi f i dother Asian banks poised to benefit from continuedimprovement in the US housing market and theunwinding of the yen trade in favor of more riskyassets, we are positive on banks in Australia,Singapore, Indonesia, Thailand and India, with thelatter three markets expected to deliver high doubledigit profit growth in FY13. However, we haveidentified a notable slowdown in sales of wealth

The Team

management products in China as a key risk going into2H 2013 as it could potentially impact the growth innon-bank financing and thereby limit the full recoveryprocess in China. Our sector top picks are BANKMANDIRI, KRUNG THAI BANK, BOC and ANZ.

Sector Head – Tracy Yu

Australia - James Freeman, Andrew TriggsChina - Tracy Yu, Judy Zhang

Hong Kong - Tracy Yu, Sophia LeeIndia - Manish Karwa, Manish Shukla

Indonesia - Raymond Kosasih, Arinta HarsonoPhilippines - Rafael Garchitorena

Si M l i A d HillSingapore, Malaysia - Andrew HillSouth Korea - Jeehoon Park

Taiwan - Pandora LeeThailand - Peach Patharavanakul

25

Conglomerates

The Outlooke Out oo

As we lift into 2013, our top pick in the HKConglomerate sector is HUTCHISONWHAMPOA. We believe a negative outlook onHutch's European business (c.30% of GAV) isalready reflected in the share price, whereaswe hold a more optimistic view. On the back ofa better global economic outlook (particularlya better global economic outlook (particularlyin Europe and China) we estimate consolidatedearnings growth of 18% yoy in 2013. For Swireand Wharf, we maintain our Hold ratings asslower office & retail rentals are likely to be adrag on earnings.

Our preferred names within the Philippinel METRO PACIFIC dconglomerate sector are METRO PACIFIC and

FIRST PHIL HOLDINGS. We are bullish aboutone of their key common holdings (Meralco)and believe they are the most undervaluedwithin the conglomerate sector relative to theirunderlying assets with significant NAVdiscounts. The Team

SSector Head – Karen Tang

China – Michael TongPhilippines – Michael Bengson

Singapore – Kevin Chong

26

Consumer

The Outlooke Out oo

Shopping for returns in the HK/China consumer sectoris likely to be easier in 2H13 than 1H13. Chinaconsumption should improve in 2013 on: 1) Ongoingurbanization and development of the middle-incomeclass; 2) wealth effect (better A-shr market outlook andrelatively stable property market); and 3) policy supportpost the 18th Party Congress DISCRETIONARY shouldpost the 18th Party Congress. DISCRETIONARY shouldperform better than STAPLES with better sales growthand more attractive valuations. HK faces morechallenges given high rentals and low income growth,although we also expect conditions to improve by2H13. We prefer CTF, LI & FUNG and HENGAN. InKorea, Jihyun expects a gradual 2013 consumptionrecovery given government initiatives to boostd i d d d d h f h S ldomestic demand and due to the recovery of the Seoulproperty market (helping the middle-income class). Weprefer HDS given its organic growth potential(offsetting a softer macro environment in 1H).

In India, high inflation and poor job creation areheadwinds, but for select companies we see positivedrivers in 2013: 1) return of pricing power in a more

Th T

rational competitive environment; 2) benefits ofdistribution expansion; 3) rural consumption tailwinds;4) ability to ‘expand’ their way out of a slowdown; and5) continuing strong premiumization trends. We preferITC, MARICO and TITAN. In Indonesia, we expectconsumption to remain strong (driven by the c. 17%increase in minimum wages) which should benefitmass-market companies such as GUDANG GARAM, The Team

Anne Ling - Sector Head

Aust. / NZ - Michael Simotas, Arie Dekker HK / China - Anne Ling, Lydia Ling

India - Manoj Menon, Gaurav BhatiaIndonesia - Reggy Susanto, Adi Putra

M l i Mi h ll F

mass market companies such as GUDANG GARAM,INDOFOOD CBP and RAMAYANA. Increasedcompetition and a weaker rupiah should lead to marginpressure on companies such as KALBE FARMA.

Malaysia - Michelle FoongPhilippines - Michael Bengson, Carissa Mangubat

South Korea - Jihyun Song Taiwan - Joelian Tseng

Thailand - Chalinee Congmuang, Sopicha Wattanasansanee

27

Gaming

The Outlooke Out oo

Showing our cards for 2013 - we prefer Macau toSingapore and Malaysia gaming stocks given a bettergrowth outlook and more attractive valuations.

Karen expects Macau gaming revenue to grow 11% in2013, driven by 25% mass revenue growth (5% VIPrevenue growth) Karen's top picks in Macau arerevenue growth). Karen s top picks in Macau areGALAXY, MELCO CROWN & WYNN MACAU. Theopening of Zhuhai South Station in 1Q13 should boostvisitor arrivals to Macau, and the casinos that focus onraising minimum bet sizes (such as Galaxy and MelcoCrown) should lift table yield (revenue per table).Galaxy and Melco Crown are trading at 0.8x and 0.7xPEG, which seems undemanding for a growth sector.

For Singapore, Aun-Ling expects gaming revenue toturn from negative growth in 2012 to 3% growth in2013, due to a bottoming out in the VIP segment in4Q12. That said, at current valuations the upsidepotential for Genting Singapore and Genting Bhd lookslimited and we maintain Hold ratings. Aun-Ling prefersGENTING MALAYSIA (Buy) given an undemandingvaluation and given expected positive catalysts in 2013including the General Election (which should removean overhang) and accelerating US gamingliberalization. And in the Philippines, our preferredgaming stock is BELLE on valuation, new partnershipand forthcoming new casino opening.

The Team

Sector Head - Karen Tang

Australia - Mark WilsonHK / China / Macau - Karen Tang

Philippines - Michael Bengsonpp gSing / Malaysia - Aun-Ling Chia

28

Healthcare

The Outlooke Out oo

Our 2013 prognosis for China’s healthcare market ishealthy. We are forecasting significant revenuegrowth across both the drug and device sectors,with the drug sector to grow relatively faster. Theoverall sector is expected to benefit from ongoingend-user demand growth, higher drugreimbursement funding and some potentialreimbursement funding and some potentialconsolidation. Policy pressures are an ever-presentrisk (especially on the drug sector and high-endmedical consumables) but we believe most 2013policy risks are manageable. Our preferred pickswithin the sector are SHINEWAY (as the successfulturnaround in its operations / performance shoulddrive a re-rating), SINO BIOPHARM and MINDRAY( i h i l)(on organic growth potential).

Th TThe Team

Sector Head - Jack Hu

Australia - David Low, Stephen RidgewellChina - Jack Hu

Malaysia - Gregory Lui

29

Industrials

The Outlooke Out oo

As we gear up for 2013, while the negativeview on Korean shipbuilding is now aconsensus one, we believe such negatives areadequately reflected in current prices withvaluations near 2009 lows. We recommendinvestors adopt a trading approach assubstantial downside looks limited and anysubstantial downside looks limited and anypositive newsflow on orders/pricing after along lull could easily result in a valuation meanreversal. Sanjeev likes HYUNDAI HEAVY in theshort term due to expected new orders, marginrecovery and the IPO of Hyundai Oilbank. Inthe longer term, however, he prefersSAMSUNG HEAVY due to its competitivenessi ff h W i i iin offshore structures. We remain positive onSingapore’s Offshore & Marine sector in 2013due to the industry strength and fundamentals.Recent comments from the offshore drillerssuggest continued optimism with strongdemand and firm day rates. Within the sector,however, Kevin’s preference is for KEPPELCORP, especially as their near-marketcustomer strategy appears to be paying off.

The Team

Sector Head - Joe Liew

Australia - Emily Behncke, Mark Wilson, Dennis LessHK/China - Joe Liew, Michael Tong

India - Manish Saxena, Chockalingam NarayananIndonesia - Rachman Koeswanto

Singapore - Kevin ChongSouth Korea - Sanghi Han, Sanjeev Rana

30

Infrastructure

The Outlooke Out oo

As we build into 2013, Phyllis has a positiveview on the China rail sector due to theexpected strong order pick-up, continuedrobust railway investment, acceleratingearnings growth, a better outlook on railwayand subway investment, and potential VATreform We prefer constructors to equipmentreform. We prefer constructors to equipmentproducers over the near-term on betterearnings outlook and valuations. Our top picksare CHINA RAILWAY GROUP and CHINACOMMUNICATIONS CONSTRUCTION. InKorea, SAMSUNG ENGINEERING is Sanghi’stop pick as we expect the company's earningsgrowth to accelerate through 2013 into 2014 in

d i ll bpart due to margin recovery as well as a betteroverseas demand environment. In addition,consensus expectations have been adjusted tomore realistic levels and valuations areattractive. On the other hand, we remaincautious on China’s construction machinerysector due to a poor earnings outlook for 1H13as incremental demand from accelerating The Teamconstruction of ongoing projects is limitedwhile the uncertain outlook in mininginvestment clouds the sector. We thinkdemand is likely to decline further in 1H 2013and recommend selling LONKING.

The Team

Sector Heads - Sanghi Han & Phyllis Wang

Australia - Cameron McDonaldChina - Phyllis Wang, Sky Hong

India - Manish Saxena, Chockalingam NarayananaNarayanana

Indonesia - Jovin NgMalaysia - Aun-Ling Chia

Philippines - Klyne ResullarSouth Korea - Sanghi Han

31

Insurance

The Outlooke Out oo

Esther and team wish you a happy and especiallysafe New Year. We enter 2013 with a positiveview on the Chinese insurance sector given long-term structural growth potential and a betteroutlook for China’s A-share market.Notwithstanding near-term growth challenges,we believe the sector could re rate on the back ofwe believe the sector could re-rate on the back ofimproved investment returns and favorablegovernment policies which should boostinsurance demand in China. We prefer PING ANand NEW CHINA LIFE given their relatively highleverage to equity markets and attractivevaluations.

W i i h I di iWe are positive on the Indian insurance sectorgiven a more favorable regulatory environmentand the government's renewed push to raiseinsurance penetration. In addition, new andimproved product offerings should also help toboost penetration levels. Manish likes both MAXINDIA and RELIANCE CAPITAL.

Pandora is relatively cautious on Taiwaneseinsurers as she expects interest rates to remainflat in 2013 and believes the negative spreadissue will continue to be a drag. For investorsseeking exposure to Taiwan, she prefers FUBON(although Hold rated) for its improving productmix, diversified earnings stream and well-thought-out China strategy.

The Team

Sector Head - Esther Chwei

Australia - Kieren ChidgeyHK/China - Esther Chwei, Tracy Yu

India - Manish Shukla, Manish KarwaSouth Korea - Jeehoon Park

thought out China strategy.

Taiwan - Pandora Lee

32

Internet

The Outlooke Out oo

As we surf into 2013, we remain relativelycautious on the outlook for China’s onlineadvertising revenues and therefore maintain ourpreference for internet stocks with lowersensitivity to brand ads. Companies with higherexposure to brand advertising revenues includeSINA SOHU and RENREN We are thereforeSINA, SOHU and RENREN. We are thereforemore focused on internet names with a higherproportion of revenues and profits from non-advertising sources, especially online gaming.Our sector top picks in China are TENCENT andSOUFUN (for reference, SOUFUN’s robustperformance is driven by campaign ad spendrather than online brand advertising). In Korea,

d i fwe recommend investors focus more oncompanies which are executing well to growoverseas revenues. This underpins our preferencefor NCSOFT.

The Team

Sector Head - Alan Hellawell

China - Alan Hellawell, Alex YaoSouth Korea - Hanjoon Kim

33

Metals & Mining

The Outlooke Out oo

As we dig into 2013, we remain cautious on thesector in China especially as the ongoing economicstructural changes and relatively high inventorylevels across non-ferrous metals and thermal coalraise further price downside risks. Our Chinapreferences are therefore driven by demand/supplyassessments as well as potential for capacityassessments as well as potential for capacityrationalisation. We like the cement (Eastern China)and coking coal sectors most and our top picks areFUSHAN, CNBM and SHENHUA. In India, we areselective on the cement sector but expectaccelerating growth by 2HFY14 and prefer nameswith exposure to west & north India –Chockalingam’s top picks are ULTRATECH &SHREE W l i i I di ’ lSHREE. We are also positive on India’s steel sectorand Abhay recommends SAIL and TATA STEEL.Elsewhere, we prefer the Indonesian coal sector overboth China and India peers with VALE INDONESIAbeing Cherie’s top pick in Indonesian coal. Andfinally, we continue to like exposure to gold andsilver across the precious metals sector and highlightZIJIN MINING and KOREA ZINC for their exposure tothese metals.

The Team

Sector Head - James Kan

Australia - Paul Young, Brett McKay, Chris TerryChina - James Kan, Laura Zhai, Johnson Wan

India - Abhay Laijawala, Chockalingam Narayanana, Manish Saxena, Anuj Singla

Indonesia - Cherie KhoengPhilippines - Klyne Resullar

South Korea - Chanwook ParkThailand - Sansanee Srijamjuree

34

Oil & Gas

The Outlooke Out oo

As we drill into 2013, we find more interestingideas downstream than upstream. Specifically,given our expectations of either flat or lower oilprices over the next few years, our stockpreferences are based on other drivers includingcapacity expansions/production growth, policyreforms and/or corporate restructurings Acrossreforms and/or corporate restructurings. Acrossthe big-caps, we like RELIANCE INDUSTRIES (onits increased petrochem capacity), SINOPEC (onreversals of its refining losses), OIL SEARCH (onproduction and earnings growth) and WOODSIDE(on production driven earnings growth). In small-caps, we prefer HUCHEMS (on higher salesvolume), MIE HOLDINGS (on production growth

d l i ) TSRC ( d iand valuations), TSRC (on new productioncapacity), SINOFERT (on restructuring leading tohigher margins) & PETRONET LNG (on asignificant increase in production capacity).

The Team

Sector Head - David Hurd

Australia - John Hirjee, Hugh Morgan, Grant SwanepoelChina - David Hurd

India - Harshad Katkar, Amit MurarkaIndia Harshad Katkar, Amit MurarkaIndonesia – Cherie KhoengSouth Korea - Shawn Park

Taiwan - Alden LinThailand - Thapana Phanich

35

Power

The Outlooke Out oo

As we power into 2013, we retain ourpreference for electric utilities across the regionas we expect them to be beneficiaries of lowerinput fuel prices. We like CR POWER andHUANENG POWER in China, KEPCO in Koreaand TENAGA in Malaysia. Moreover, we see ahigher chance of policy reforms in manyhigher chance of policy reforms in manycountries (including China) as a further re-ratingcatalyst. We tend to be selective on Chinadownstream gas distributors given their heftyvaluations with potential headwinds fromslowing connection fees and upstream pricehikes. BEIJING ENTERPRISES is Eric’s preferredChina gas play while we are cautious on CRGAS I I di f JPVL (lGAS. In India, we prefer JPVL (leverage tofalling interest rates) and JSW ENERGY (higherexposure to favorable spot market) among theprivate IPPs and NTPC (more compellingvaluation) among regulated utilities.

The Team

SSector Head - Michael Tong

Australia - John Hirjee, Hugh MorganChina - Michael Tong, Eric Cheng, Kai-Ting Wong

India - Abhishek Puri, Manish SaxenaIndonesia - Cherie Khoeng

Malaysia - Aun-Ling ChiaPhilippines - Gio Dela-Rosa, Iza Fernandez

South Korea - Sanghi HanSouth Korea Sanghi Han

36

Property

The Outlooke Out oo

As we develop views for 2013, we expect the policyoverhang for the HK property market will continueand should drive lower primary volumes andweaker secondary demand. We recommendrotating from HK to China stocks given China’srelatively more stable policy environment and morefavourable residential demand supply balance Ourfavourable residential demand-supply balance. Ourtop picks in China are COLI, EVERGRANDE, R&F,CC LAND and KWG. In Singapore we recentlyshifted our sector preference to the propertydevelopers over the REITs. Greg’s top picks inSingapore property are CAPITALAND, WING TAI &AREIT. In Indonesia, Albert stays positive with apreference for landed residential developers but

h d l dnotes the need to see strong sales momentum andlandbank acquisition for the sector to perform. Histop sector picks include BUMI SERPONG DAMAIand SUMMARECON. In the Philippines, we have apreference for landlords, infrastructure plays anddevelopers with predominantly end-user clientele.

The Team

Sector Head - Tony Tsang

Australia - Ian Randell, Christopher Byrne, Jason WeateHK/China - Tony Tsang, Jason Ching

Indonesia - Albert Saputro Malaysia - Aun-Ling Chia

Philippines - Carl SySingapore - Greg Lui, Elaine Khoo g p g ,Thailand - Nash Shivaruchiwong

37

Small-cap

The Outlooke Out oo

As we take our first small steps into 2013, oursmall-cap preferences are determined bystock-specific circumstances. We like NEWORIENTAL in the education sector given itsstrong brand name, increasing managementfocus on margins which should underpinearnings and attractive valuation We have aearnings and attractive valuation. We have arelative preference for HOME INNS in theeconomy hotel segment as we expect it to bea key beneficiary of the secular growth inChina’s leisure tourist sector given it has thelargest network and a strong brand presence.Furthermore, the on-track motel integrationshould drive robust FY13 earnings growth. InA Mi h ll hi hli h SUPERMAX iAsean, Michelle highlights SUPERMAX inMalaysia as a preferred small cap as weexpect it to benefit from moderating rawmaterial prices, stable FX, resilient demandand improved operational cost efficiencies /utilisation rates.

The Team

Sector Head - Vivian Hao

Australia - Dominic Rose WassimAustralia Dominic Rose, Wassim Kisirwani, Jennifer Kruk

China - Vivian Hao, Lydia LingIndonesia - Nicholas Nugroho

Malaysia - Michelle Foong

38

Tech (hardware)

The Outlooke Out oo

As the components of 2013 come together, theoverriding theme for the tech hardware sectorremains the ongoing development of and demandfor smartphones (including increasingly lower-end /lower-cost handsets). However, the fortunes of thehandset vendors are increasingly polarised and westay relatively cautious on both LGE and HTC as westay relatively cautious on both LGE and HTC as webelieve both need more time to develop successfulhandset strategies. In both Korea and Taiwan,therefore, we are more focused on the smartphonecomponent plays. Specifically, we like SAMSUNGSDI as we expect it to maintain its industryleadership in the rechargeable battery sector andSEMCO given its FC-CSP primary SEC supplier

I T i I lik HON HAI h istatus. In Taiwan, Ivy likes HON HAI as the primarybeneficiary of ongoing Apple product demand aswell as DELTA ELECTRONICS given its competitiveposition in power supply and good progress on itsbusiness transition. William also likes EPISTAR onan expected recovery in LED sales in 1H13. Longer-term, it should be noted that increasing demand fortablets and Win8 products may be a stronger The Teamcatalyst in 2H13 as the product pipeline improves.Industry consolidation may also be an increasinglyimportant sector theme in 2013.

The Team

Sector Head - Hanjoon Kim

South Korea - Hanjoon KimTaiwan - Ivy Lee, William Yang

39

Tech (IT services/software)

The Outlooke Out oo

As we integrate our thoughts on 2013, wemaintain a general preference within Indiafor IT service/software companies whichhave better revenue visibility especially giventhe uncertainties over 2013 IT budgets,particularly in financial services.Consequently our Indian sector preferencesConsequently, our Indian sector preferencesremain TCS in the large-cap segment andTECH MAHINDRA across the mid-caps. InChina, Vivian likes DIGITAL CHINA as itbuilds on its core systems integrationbusiness and focuses more on meetingpublic infrastructure requirements throughits Sm@rt City projects.

The Team

Sector Heads - Alan Hellawell, Aniruddha Bhosale

China - Alan Hellawell Vivian HaoChina Alan Hellawell, Vivian HaoIndia - Aniruddha Bhosale

40

Tech (semiconductors)

The Outlooke Out oo

As we chip in 2013, we expect ongoingstructural changes across the semiconductorcomplex. Within the foundry sector, forexample, the changes over the next two yearsare expected to entrench TSMC’s leadershipand lead to a more polarized industry with thesmaller tier two foundries increasinglysmaller tier-two foundries increasinglydisadvantaged. For the memory sector, capexdiscipline, supply reductions and strong mobilegrowth should help a DRAM recovery with SECand SK HYNIX best positioned to benefit(although on balance we prefer SK HYNIX).Mobile will remain a key growth area for the ICdesign sector with MEDIATEK & SPREADTRUM

i k M bili i l k d i four top picks. Mobility is also a key driver forthe IC packaging & testing sector with ASE alikely beneficiary of this trend. In contrast,packaging companies with higher exposure tothe PC suppliers will face ongoing pressures.

The Team

Sector Heads - Michael Chou, Seunghoon Han

South Korea – Seunghoon HanTaiwan - Jessica Chang, Michael Chou

41

Telecoms

The Outlooke Out oo

As we ring in 2013, there is no over-archingregional theme for the telco sector, especially aswe are relatively cautious on the financial impactof continued data growth. As such, our sectorpreferences are predicated on market or companyspecific trends: In China, our top pick remainsCHINA UNICOM on expected market share gains;CHINA UNICOM on expected market share gains;in Korea, John likes LGU+ on ARPU gains fromLTE migration and improved competitiveness; inIndia, we recommend buying IDEA on target priceupside and lower long-term regulatory costs; andin Indonesia, Raymond’s top pick remains PTTELKOM especially as its 2013 guidance is slightlyahead of our forecasts. Elsewhere, we expect FAREASTONE’S i T i bEASTONE’S momentum in Taiwan to bemaintained and it is our preferred telco in thatmarket, while Wei-Shi’s sole Buy rating inMalaysia is on AXIATA. We also continue to likeboth AIS and INTUCH in Thailand on acombination of earnings growth, yield andexpected benefits from 3G build.

The Team

Sector Head - Alan Hellawell

Australia - Vikas Gour, Arie DekkerIndia - Srini Rao

Indonesia - Raymond KosasihIndonesia Raymond KosasihMalaysia - Wei-Shi Wu

Philippines - Gio Dela RosaSingapore - Wei-Shi WuSouth Korea - John Kim

Taiwan -William YangThailand - Thapana Phanich

42

Transport

The Outlooke Out oo

As we fly into 2013, we are generally moreenthusiastic on the shipping companies thanthe airlines across the regional transportsector. In shipping, we prefer dry bulk overcontainer with CHINA SHIPPINGDEVELOPMENT our top Buy idea, but withincontainers current valuations appearcontainers, current valuations appearexcessively bearish particularly as we expectrates to improve. Sky likes CSCL, HANJIN &OOIL. Within airlines, while the macrobackdrop remains difficult (leading to softeryields), we prefer the Chinese names over theirregional peers. Our top airline picks remainCHINA EASTERN & AIR CHINA and we are

ll f SIA & CATHAY PACIFICsellers of SIA & CATHAY PACIFIC.

The Team

Sector Head - Joe Liew

Australia - Cameron McDonald, Craig Wong-PanChina - Sky Hong, Vincent Ha

Malaysia - Michelle FoongPhilippines - Klyne ResullarPhilippines Klyne Resullar

Singapore - Joe LiewSouth Korea - Joe Liew, Sky Hong

Taiwan - Sky Hong, Vincent Ha

43

Equity Research - Country

Contact details

Australia Tim King +612 8258 1633 tim.king@db.com

China / Hong Kong Jun Ma +852 2203 8308 jun.ma@db.com

China / Hong Kong Michael Tong +852 2203 6167 michael.tong@db.com

India Abhay Laijawala +9122 7158 4031 abhay.laijawala@db.com

Indonesia Raymond Kosasih +6221 318 9525 raymond.kosasih@db.com

Korea John Kim +822 316 8979 john-kr.kim@db.com

Malaysia Aun Ling Chia +603 2053 6768 aun-ling.chia@db.com

Philippines Gio dela Rosa +632 894 6642 giovanni.dela-rosa@db.com

Singapore Gregory Lui +65 6423 5958 gregory.lui@db.com

Taiwan Joelian Tseng +8862 2192 2841 joelian.tseng@db.com

Thailand Derek Bloomfield* +662 633 6468 derek.bloomfield@db.com

Equity Research - Sector

Autos Vincent Ha +852 2203 6247 vincent.ha@db.com

Sanjeev Rana +822 316 8910 sanjeev-r.rana@db.com

Conglomerates & Gaming Karen Tang +852 2203 6147 karen.tang@db.com

Consumer & Media Anne Ling +852 2203 6177 anne.ling@db.com

Financials Tracy Yu +852 2203 6191 tracy.yu@db.com

Healthcare Jack Hu +852 2203 6208 jack.hu@db.com

Infrastructure Sanghi Han +822 316 8900 sanghi.han@db.com

Phyllis Wang +86213896 2839 phyllis.wang@db.com

Insurance Esther Chwei +852 2203 6200 esther.chwei@db.com

Metals & Mining James Kan +852 2203 6146 james.kan@db.com

Oil & Gas David Hurd +852 2203 6242 david.hurd@db.com

Property Tony Tsang +852 2203 6256 tony.tsang@db.comp y y g y g@

Property – REITs Gregory Lui +65 6423 5958 gregory.lui@db.com

Small Cap Vivian Hao +852 2203 6241 vivian.hao@db.com

Transportation & Industrials Joe Liew +65 6423 8507 joe.liew@db.com

TMT (telco, internet) Alan Hellawell +852 2203 6240 alan.hellawell@db.com

Tech - Hardware Hanjoon Kim +822 316 8909 hanjoon.kim@db.com

Tech – IT Services / Software Alan Hellawell +852 2203 6240 alan.hellawell@db.com

Aniruddha Bhosale +9122 7158 4037 aniruddha.bhosale@db.com

Tech Semis Michael Chou +8862 2192 2836 michael chou@db comTech Semis Michael Chou +8862 2192 2836 michael.chou@db.com

Seunghoon Han +822 316 8907 seunghoon.han@db.com

Utilities / Power Michael Tong +852 2203 6167 michael.tong@db.com

Macro / Strategy

Regional Economics Michael Spencer +852 2203 8305 michael.spencer@db.com

Equity Strategy Ajay Kapur +852 2203 6196 ajay.kapur@db.com

Greater China Jun Ma +852 2203 8308 jun.ma@db.com

Rates/FX (Regional) Sameer Goel +65 6423 6973 sameer.goel@db.com

Corporate Credit Research (Regional) Gene Cheon +65 6423 6967 gene cheon@db com

44

Corporate Credit Research (Regional) Gene Cheon +65 6423 6967 gene.cheon@db.com

Quantitative Research Khoi LeBinh +852 2203 6990 khoi.lebinh@db.com

Appendix: Comps (1) 6-Jan

Price local PE (x)(DB EPS)

PB (x) Div yield %

EV/ EBITDA PE (x)

(DB EPS)PB (x) Div yield

%

EV/ EBITDA

Ratios 2012F Ratios 2013F

Company Ticker Rating

(DB EPS) ( )

% (x) (DB EPS) ( )

% (x) AIS ADVA.BK Buy 205.00 16.6 15.4 6.0 9.7 14.8 15.4 6.7 9.3Alliance Global AGI.PS Buy 16.84 15.6 2.1 2.1 12.0 13.1 1.9 2.1 10.8ANZ ANZ.AX Buy 25.26 10.2 1.6 6.6 NA 11.3 1.6 5.9 NAAscendas Real Estate AEMN.SI Buy 2.39 15.2 1.1 6.8 1.1 17.3 1.3 5.8 3.7Axis Bank AXBK.BO Buy 1,378.20 11.2 2.1 1.4 NA 11.8 2.2 1.5 NABank Mandiri BMRI.JK Buy 8,250.00 12.5 2.6 1.5 NA 10.7 2.2 1.8 NABank of Ayudhya BAY.BK Buy 33.25 13.8 1.8 2.4 NA 11.2 1.6 2.8 NABank of China 3988.HK Buy 3.62 6.1 1.0 4.5 NA 6.0 0.9 4.6 NABank Tabungan Negara BBTN.JK Buy 1,500.00 11.5 1.7 2.7 NA 9.5 1.6 3.3 NABaoxin Auto Group 1293.HK Buy 7.19 18.1 3.8 0.0 12.9 11.3 2.8 0.0 7.8BCA BBCA.JK Buy 9,050.00 19.2 4.3 1.1 NA 17.0 3.6 1.0 NABeijing Enterprises 0392.HK Buy 51.00 18.8 1.5 1.7 12.0 14.6 1.4 2.1 10.2j g p yBOC Hong Kong Holdings 2388.HK Buy 24.85 12.9 1.8 4.4 NA 11.7 1.7 4.7 NABrilliance China 1114.HK Buy 10.58 18.0 4.6 0.0 467.4 14.0 3.4 0.0 240.6Bumi Serpong Damai BSDE.JK Buy 1,160.00 18.6 2.6 1.0 12.8 14.6 2.3 1.3 9.6C C Land 1224.HK Buy 2.81 10.4 0.5 1.8 4.5 7.0 0.5 2.1 4.9CapitaLand Ltd CATL.SI Buy 3.80 37.9 1.0 1.6 15.9 28.6 1.0 1.6 15.9Central Pattana CPN.BK Buy 83.25 38.4 7.1 1.2 21.6 30.7 6.2 1.3 19.3Chailease Holding 5871.TW Buy 65.00 12.0 2.0 3.2 NA 10.4 2.0 3.6 NACharoen Pokphand Foods CPF.BK Hold 35.00 11.7 3.0 2.2 14.6 15.7 2.7 3.2 10.1China Comms Construct 1800.HK Buy 7.74 8.9 1.2 2.8 7.4 8.4 1.1 3.0 7.1CHINA EASTERN AIRLINES 0670.HK Buy 3.19 9.8 1.2 0.0 7.4 8.3 1.0 0.0 6.7China Railw ay Group 0390.HK Buy 4.68 11.7 1.0 1.7 8.4 9.9 1.0 2.0 7.8China Resources Pow er 0836.HK Buy 20.05 14.8 1.6 2.7 9.3 10.9 1.4 3.7 7.3China Shenhua Energy 1088.HK Buy 34.80 11.8 2.2 3.3 6.9 12.3 2.0 3.2 6.6gy yChina Shinew ay 2877.HK Buy 12.82 12.0 2.1 2.5 6.8 10.3 1.8 2.9 5.7China Shipping Container 2866.HK Buy 2.44 76.4 0.9 0.0 15.6 11.7 0.8 0.0 7.6China Shipping Development Co. Ltd. 1138.HK Buy 4.85 -26.9 0.6 0.0 36.9 29.8 0.6 1.1 16.0China Southern Airlines 1055.HK Buy 3.89 15.7 0.9 3.0 7.8 15.0 0.8 4.9 7.3China Unicom 0762.HK Buy 12.78 37.5 1.2 1.0 4.6 23.5 1.1 1.0 3.9Chow Tai Fook 1929.HK Buy 13.20 19.8 4.2 0.7 14.8 22.3 3.8 0.9 15.3CNBM 3323.HK Buy 12.14 9.0 1.7 1.6 7.8 7.3 1.4 2.0 6.8COLI 0688.HK Buy 24.70 12.1 2.4 1.5 7.2 8.6 1.9 1.7 4.6CP All CPALL.BK Buy 44.75 37.3 16.6 2.0 21.6 30.8 14.7 2.4 18.5CR Cement 1313.HK Buy 5.27 16.3 1.6 0.6 10.2 10.0 1.4 0.9 7.0Delta Electronics 2308.TW Buy 105.50 16.5 2.5 4.7 9.3 15.6 2.4 5.0 8.1Digital China 0861.HK Buy 13.70 11.3 2.4 3.1 6.2 10.1 1.9 3.4 5.8Epistar 2448.TW Buy 51.40 640.7 1.0 2.1 8.5 22.2 1.0 1.9 4.8Evergrande 3333.HK Buy 4.50 6.1 1.5 6.6 5.6 4.9 1.2 8.3 4.4Evergrande 3333.HK Buy 4.5 6.1 1.5 6.6 5.6 4.9 1.2 8.3 4.4Evergreen Marine 2603.TW Buy 18.80 27.7 1.0 0.0 10.0 10.7 0.9 0.0 7.5Far EasTone Telecom 4904.TW Buy 73.70 21.3 3.8 4.7 9.2 17.7 3.7 5.7 8.3First Philippine Hldgs FPH.PS Buy 90.20 9.4 0.8 2.2 9.1 7.4 0.7 2.2 9.1Fubon Financial Holding 2881.TW Hold 35.00 14.6 1.1 2.8 NA 13.2 1.1 3.1 NAGalaxy 0027.HK Buy 31.80 18.0 6.2 0.0 13.3 14.3 4.3 0.0 10.8Gamuda GAMU.KL Buy 3.74 14.0 1.8 3.5 11.6 14.1 1.8 3.2 11.5Genting Malaysia BHD GENM.KL Buy 3.69 13.3 1.7 1.9 6.5 12.6 1.5 2.0 5.7Guangzhou R&F Prop 2777.HK Buy 15.14 7.1 1.5 4.9 6.0 6.8 1.3 4.9 4.4Gudang Garam GGRM.JK Buy 55,000.00 25.3 4.0 1.8 15.7 19.7 3.5 2.0 12.7Hanjin Shipping 117930.KS Buy 12,650.00 -25.3 0.8 0.0 15.1 9.3 0.7 0.0 10.2Hankook Tire 161390.KS Buy 44,500.00 8.2 1.5 0.9 5.5 7.6 1.3 1.1 4.9HDS 069960.KS Buy 170,500.00 12.3 1.4 0.4 8.3 11.1 1.3 0.4 7.6Hengan Intl. 1044.HK Buy 73.15 25.6 7.0 2.4 18.5 20.4 6.2 3.0 14.7Hon Hai Precision 2317.TW Buy 88.00 11.5 1.7 1.7 4.8 8.7 1.4 2.3 3.8Huaneng Pow er Intl 0902.HK Buy 7.12 12.6 1.4 4.0 8.1 8.0 1.3 6.3 6.2Huchems 069260.KS Buy 25,050.00 16.5 2.1 3.2 9.7 12.4 1.9 4.0 7.4Hutchison Whampoa 0013.HK Buy 83.00 16.1 0.9 2.7 10.5 13.6 0.9 3.2 9.0Hyundai Glovis 086280.KS Buy 210,500.00 14.1 4.4 0.7 14.9 12.3 3.6 0.7 12.7Hyundai Heavy 009540.KS Buy 243,500.00 9.9 1.0 1.4 8.1 9.3 0.9 1.4 7.3Hyundai Motor 005380.KS Buy 206,000.00 5.2 1.0 1.0 5.6 4.7 0.8 1.1 4.9ICICI Bank ICBK.BO Buy 1,182.20 16.5 1.7 1.8 NA 17.3 2.1 1.7 NAIdea Cellular IDEA.BO Buy 109.70 39.5 2.5 0.0 8.2 31.8 2.6 0.0 7.9Indofood INDF.JK Buy 5,950.00 16.0 2.6 2.4 6.9 13.7 2.3 2.5 5.7Indofood CBP ICBP.JK Buy 8,000.00 21.1 4.1 2.1 13.2 19.0 3.6 2.4 11.5ITC ITC.BO Buy 282.40 24.9 9.7 2.2 16.1 28.6 11.0 2.3 18.8Jaiprakash Pow er Ventures Ltd JAPR.BO Buy 38.30 22.3 2.0 0.0 16.2 14.5 1.6 0.0 11.3Jasa Marga JSMR.JK Buy 5,600.00 21.0 4.0 1.9 12.3 18.8 3.5 2.1 10.8JSW Energy JSWE.BO Buy 67.95 29.4 1.8 1.7 12.4 16.9 1.8 1.2 8.7JSW Steel JSTL.BO Buy 826.60 8.9 1.0 1.7 5.4 8.4 1.0 0.9 5.3Kasikornbank KBAN.BK Buy 199.00 13.3 2.6 1.8 NA 11.0 2.2 2.0 NAKepco 015760.KS Buy 31,300.00 -12.3 0.4 0.6 8.3 19.4 0.4 1.0 6.0

Source: Deutsche Bank, Bloomberg Finance LP

45

Appendix: Comps (2) 6-Jan

P i l l PE (x) PB ( ) Div yield EV/

EBITDA PE (x) PB ( ) Div yield EV/

EBITDA

Ratios 2012F Ratios 2013F

Company Ticker Rating Price local ( )

(DB EPS) PB (x) y

%EBITDA

(x)

( )(DB EPS)

PB (x) y%

EBITDA (x)

Keppel Corp Ltd KPLM.SI Buy 11.09 10.2 2.4 4.9 6.2 12.2 2.2 4.1 7.0Keppel Land KLAN.SI Buy 4.12 16.1 1.1 1.9 25.5 15.4 1.1 1.9 19.4Korea Zinc 010130.KS Buy 378,000.00 11.1 1.7 0.7 6.4 7.0 1.4 0.7 4.1Krung Thai Bank KTB.BK Buy 20.30 10.8 1.6 3.3 NA 9.9 1.4 4.1 NAKWG Property 1813.HK Buy 6.33 6.4 1.0 4.3 3.8 6.4 0.9 4.3 4.3Larsen & Toubro Ltd LART.BO Buy 1,627.70 19.2 2.7 1.0 16.1 20.5 2.3 1.1 14.0LG Uplus 032640.KS Buy 7,690.00 596.6 0.9 0.0 4.0 8.2 0.8 3.7 2.6Li & Fung 0494.HK Buy 14.50 23.7 3.2 2.5 17.5 16.1 2.9 2.7 12.3Lung Yen Life Service 5530.TWO Buy 92.80 18.1 4.5 3.5 15.5 15.7 3.8 5.3 12.6Manila Electric Company MER.PS Buy 270.00 17.7 4.5 4.5 9.4 15.9 4.2 4.8 9.2Marico Limited MRCO.BO Buy 224.40 28.7 9.0 0.5 20.6 32.7 7.0 0.3 22.9Maruti Suzuki Limited MRTI.BO Buy 1,544.00 20.4 2.6 0.6 9.7 22.2 2.6 0.7 11.4

OMax India MAXI.BO Buy 250.80 29.5 1.8 0.0 15.2 22.8 2.3 0.0 9.6MediaTek 2454.TW Buy 305.50 23.1 2.1 3.1 13.3 19.3 2.2 3.8 11.7Mega Financial Holding 2886.TW Buy 22.95 13.4 1.2 3.7 NA 12.8 1.2 3.9 NAMelco Crow n MPEL.OQ Buy 18.21 23.4 3.0 0.0 11.8 18.1 2.5 0.0 10.5Metro Pacif ic Investments MPI.PS Buy 4.90 16.5 1.4 0.5 8.4 14.8 1.3 0.5 6.8MIE Holdings Corp 1555.HK Buy 2.48 6.7 1.4 2.2 3.5 6.0 1.2 2.4 3.2Mindray Medical MR.N Buy 32.47 18.2 2.9 1.2 12.0 16.0 2.5 1.2 10.6NCI 1336.HK Buy 32.55 25.7 2.3 0.6 NA 18.6 2.1 0.8 NANCsoft 036570.KS Buy 158,500.00 24.8 3.5 0.4 12.5 15.4 2.9 0.6 7.6New Oriental EDU.N Buy 20.00 31.9 6.1 0.0 23.4 23.6 4.0 1.4 15.0NTPC Limited NTPC.BO Buy 158.60 14.6 1.8 2.5 11.9 12.2 1.6 3.0 10.0OCBC OCBC.SI Buy 9.84 11.2 1.3 3.8 NA 10.9 1.2 4.0 NAOil Search OSH.AX Buy 7.06 59.2 3.1 0.5 27.5 44.2 2.9 0.5 25.4Orient Overseas Int'l 0316.HK Buy 51.60 18.7 0.9 2.7 9.8 10.2 0.9 4.9 6.9P LNG Li i d PLNG BO B 162 9 11 1 3 6 1 6 10 9 2 8 1 4Petronet LNG Limited PLNG.BO Buy 162.95 11.1 3.6 1.6 7.7 10.9 2.8 1.7 7.4Ping An 2318.HK Buy 69.65 21.5 3.0 0.7 NA 16.6 2.6 0.9 NARamayana RALS.JK Buy 1,230.00 19.6 2.8 2.6 8.5 17.2 2.7 3.6 7.6Reliance Capital RLCP.BO Buy 501.70 28.6 0.8 1.9 NA 19.5 1.0 2.2 NAReliance Industries RELI.BO Buy 860.75 13.9 1.5 1.0 8.5 12.8 1.5 1.0 8.2RHB Capital RHBC.KL Buy 7.77 11.6 1.8 3.1 NA 9.8 1.6 3.5 NARobinson Dept. Store ROBI.BK Buy 65.75 35.3 7.6 1.6 17.7 27.2 6.7 2.0 14.2Samsung Eng. 028050.KS Buy 172,500.00 11.4 3.9 2.0 7.5 10.8 3.1 2.3 6.8Samsung Heavy 010140.KS Buy 38,300.00 10.0 1.6 1.3 5.6 9.3 1.4 1.3 5.1Samsung SDI 006400.KS Buy 157,000.00 4.6 1.0 0.6 3.6 10.5 0.9 0.5 11.2SATS SATS.SI Buy 2.87 14.9 1.8 10.9 7.8 15.7 2.2 4.8 8.9Security Bank Corp SECB.PS Buy 160.90 10.5 2.2 1.2 NA 12.5 1.9 1.2 NASembcorp Industries Ltd SCIL.SI Buy 5.30 13.9 2.1 2.7 6.1 12.3 1.8 3.1 5.3SEMCO 009150.KS Buy 99,000.00 15.8 2.0 1.3 6.1 13.6 1.7 1.5 5.5S G ik SMGR JK B 15 750 00 19 6 5 4 2 6 13 9 15 2 4 4 3 3 10 3Semen Gresik SMGR.JK Buy 15,750.00 19.6 5.4 2.6 13.9 15.2 4.4 3.3 10.3Semirara Mining SCC.PS Hold 238.00 14.0 5.1 5.0 10.0 12.2 4.4 5.0 9.7Shin Corp. INTUCH.BK Buy 67.50 15.1 10.2 6.6 69.5 13.2 10.2 7.6 62.7Shougang Fushan 0639.HK Buy 3.18 10.1 0.9 4.5 4.1 11.0 0.8 4.1 3.9Shree Cement SHCM.BO Buy 4,586.05 NA NA NA NA 20.5 4.4 0.4 7.9Sino Biopharmaceutical 1177.HK Buy 3.79 22.7 4.3 1.7 9.9 19.3 3.9 3.1 8.4Sinofert 0297.HK Buy 2.03 12.4 0.8 1.2 4.5 9.7 0.8 1.6 3.3Sinopec-H 0386.HK Buy 9.14 11.2 1.3 3.2 5.7 9.4 1.2 3.8 5.2SK Hynix 000660.KS Buy 26,350.00 -73.5 1.9 0.0 7.4 15.3 1.7 0.0 4.5SouFun SFUN.N Buy 26.63 14.6 20.9 3.8 10.9 11.6 6.7 0.0 8.4Spreadtrum SPRD.OQ Buy 17.17 9.6 2.4 2.1 5.8 7.3 1.9 2.1 3.9ST Engineering STEG.SI Buy 3.85 19.9 6.4 4.5 14.0 18.3 6.2 4.9 12.6Steel Authority of India SAIL.BO Buy 95.20 13.2 1.0 1.7 10.6 9.9 0.9 2.0 8.0Summarecon SMRA.JK Buy 1,910.00 25.5 4.0 0.9 13.0 20.9 3.5 1.2 10.9S SUPM KL B 2 00 10 1 1 5 3 0 9 0 9 1 1 4 3 3 7 9Supermax SUPM.KL Buy 2.00 10.1 1.5 3.0 9.0 9.1 1.4 3.3 7.9Synnex Technology 2347.TW Buy 55.00 14.7 2.0 4.1 18.0 12.4 1.8 4.8 16.0Tata Consultancy TCS.BO Buy 1,297.50 20.7 7.0 2.8 14.6 18.5 6.3 2.2 13.3Tata Steel Limited TISC.BO Buy 433.40 15.4 1.8 2.4 7.8 13.5 1.6 2.3 6.8Tech Mahindra Ltd TEML.BO Buy 942.00 7.7 2.3 0.7 7.2 9.7 2.6 0.5 7.7Telkom TLKM.JK Buy 9,100.00 13.4 2.9 4.0 4.8 12.4 2.6 5.2 4.4Tenaga Nasional TENA.KL Buy 6.91 10.6 1.0 3.3 5.4 10.7 1.0 3.0 5.3Tencent 0700.HK Buy 259.20 28.3 9.4 0.3 21.1 20.8 6.7 0.3 15.5Thai Oil Pcl TOP.BK Buy 69.25 10.5 1.7 4.3 6.8 7.8 1.5 5.8 5.5Titan Industries Ltd TITN.BO Buy 285.45 30.7 14.0 0.8 21.1 32.6 12.9 0.9 22.6TPK Holding 3673.TW Buy 531.00 13.7 3.9 1.9 8.3 11.8 3.1 2.1 7.1TSMC 2330.TW Buy 101.50 15.7 3.7 3.0 8.3 13.6 3.1 3.0 6.6TSRC 2103.TW Buy 57.20 16.2 2.5 4.0 8.4 11.8 2.2 5.5 6.8UltraTech Cement ULTC.BO Buy 2,036.10 12.8 3.2 0.7 7.9 19.6 3.6 0.4 11.6U i P id t 1216 TW B 54 40 21 7 3 2 2 3 60 7 20 8 3 1 2 7 50 8Uni-President 1216.TW Buy 54.40 21.7 3.2 2.3 60.7 20.8 3.1 2.7 50.8Vale Indonesia INCO.JK Buy 2,625.00 18.7 1.5 3.0 8.3 13.1 1.4 3.1 6.4Wing Tai Hldgs WTHS.SI Buy 1.89 NA NA NA NA 8.8 0.7 3.7 3.7Woodside WPL.AX Buy 34.56 12.7 1.9 4.3 6.4 11.3 1.7 4.4 5.8XL Axiata EXCL.JK Hold 5,750.00 15.4 3.1 2.6 5.7 14.0 2.7 2.9 5.2Zijin Mining 2899.HK Buy 3.08 11.2 1.9 2.6 5.6 9.0 1.6 3.3 4.5

Source: Deutsche Bank, Bloomberg Finance LP

46

Appendix: Valuation & Risks

Please refer to our Research website for important disclosures regarding our valuation methodology and risks for each of the stocks mentioned in this report. http://gmr.db.com

47

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48

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