Escolar Documentos
Profissional Documentos
Cultura Documentos
April 6, 2015
ASIA PACIFIC
Research Ideas
CHN: Banks 31/03
Trade lower earnings for a cleaner bal. sheet >PDF
16/03
HKG: Environmental
Bright future >PDF
Regional/ASEAN/Asia Pacific
Plantations (NEUTRAL) - Funding for biodiesel subsidies | P2
15/03
China/Hong Kong
China Mengniu Dairy (ADD, tp:HK$44.30) - NDR takeaways | P3
Malaysia
Hartalega Holdings (HOLD, tp:RM8.23) - Higher expenses ahead | P4
RHB Capital Bhd (ADD, tp:RM10.50) - Restructuring for tax efficiency | P5
Banks (UNDERWEIGHT) - A rush for liquidity | P6
Singapore
Nam Cheong (HOLD, tp:S$0.32) - Reality bites II | P7
Chris HUNT
Regional Head of Research
T: (852) 2539 1315
E: chris.hunt@cimb.com
IMPORTANT DISCLOSURES, INCLUDING ANY REQUIRED RESEARCH CERTIFICATIONS, ARE PROVIDED AT THE END OF THIS REPORT.
Page 1
CommoditiesPlantations
April 5, 2015
ASEAN
PLANTATIONS
SECTOR FLASH NOTE
CIMB Analyst(s)
What Happened
According to a Bloomberg report, Indonesia will impose export levies to fund
biodiesel subsidies, replanting, research and development. Shippers will pay a
levy of US$50 per tonne for crude palm oil and US$30 per tonne for processed
palm oil starting this month, coordinating minister for economic affairs Sofyan
Djalil was quoted as saying. The government will keep the threshold for
applications of a separate export tax at US$750 per tonne, he added (see Fig 1).
He also said that the fund will be used to compensate the price difference
between regular diesel and biodiesel. On top of this, it will also be used to help
replanting, research and development and human resources development,
related to palm oil industry. The levy will be paid even when the export tax is
zero and will be taken from export tax proceeds when prices are above US$750
per tonne.
What We Think
The news is not a surprise as we flagged this potential move in our earlier note.
We gather from sources that this will be implemented soon and the proceeds
from this tax will be used partially to fund a biodiesel subsidy. We believe this
proposed tax levy, which will be applied when CPO export tax is zero, will
ensure the Indonesian government receives a more stable tax revenue from the
planters to fund the biodiesel mandates. Our rough calculation suggests the
Indonesian government could potentially collect US$885m from the tax levy
per annum. This is based on the assumptions that (1) Indonesia exports around
72% of its 2015 projected palm output of 32.5m tonnes; and (2) 40% of its palm
exports are CPO and 60% processed palm products. We estimate this will be
able to fund around 2.5m tonnes of biodiesel at Rp4,000 per litre. (Fig 3) We
view this move to be short-term negative for the pure upstream palm oil players
(CPO price in Indonesia could trade at as much as US$50 per tonne or 8%
below the current CPO price of US$625 per tonne) and slight positive for
downstream players (enjoy a wider processing margin due to the tax levy
differential between processed palm products and CPO of US$20 per tonne).
We maintain our view that if this move is successful in boosting biodiesel
demand and palm oil usage in Indonesia due to the more attractive feedstock
prices, the palm oil producers could, in time, benefit from stronger CPO prices.
Page 2
FLASH NOTE
Market Cap
US$10,136m
US$23.69m
HK$78,581m
HK$183.7m
Free Float
68.7%
1,957 m shares
Current
HK$40.10
Target
HK$44.30
Prev. Target
Up/Downside
HK$44.30
10.5%
Conviction|
NDR takeaways
CIMB Analyst(s)
Nora MIN
1M
3M
12M
Relative
13.5
19.2
-10.9
Absolute
15.1
25.1
Major shareholders
1.3
% held
COFCO
Danone
Arla
16.3
9.9
5.3
What Happened
During Mengnius NDR, management revealed that increasing promotions for
its basic UHT milk and new products are drivers for volume growth in FY15. It
expects volume growth to recover back to 5% yoy in FY15, and that a mix
upgrade will lead to 4-5% ASP improvement. Mengniu launched its own brand
of imported UHT milk (from Denmark and New Zealand) and cereal UHT milk
in Nov 2014, and room temperature kids yoghurt early this year. It plans to
launch more chilled yoghurt products this year, leveraging on Danones R&D
capability. Its yoghurt segment achieved 36.7% yoy sales growth in FY14.
Excluding the Rmb200m sales contribution from Danone yoghurt (only
consolidated for 2H14), the yoghurt segment achieved organic sales growth of
33%. Management targets 20-25% yoy yoghurt sales growth in FY15. UHT sales
rose 7.5% yoy in FY14, and management expects mid to high single-digit
growth in FY15. Milk beverage sales growth slowed to 7.0% yoy in 2H14, from
23.1% yoy in 1H14, mainly due to the maturity of Suan Suan Ru. Mengniu has
upgraded the packing of Suan Suan Ru and expects milk beverage sales growth
to be in a high single-digit in FY15. It had cut 80 underperforming ice cream
SKUs in FY14, leading to 10.2% sales drop in that segment. In FY15, it will
launch new ice cream products and targets positive growth for the year.
What We Think
Mengniu will use up imported milk powder in 1Q15, but domestic milk powder
made from extra raw milk will only be used up by 3Q/4Q15. Management
expects raw milk cost reduction of 2-3% yoy in FY15. We expect overall GPM
(incl. Yashili) to expand by 0.7% pts yoy to 30.3% in FY15, driven by the 3% raw
milk price reduction and 4.2% ASP increase. Star and opportunity brands with
higher GPM contributed 39.7% to total sales in FY14, and Mengniu targets to
drive this ratio up to 45% over the next three years.
Vol m
Price Close
Financial Summary
41.0
99.5
36.0
87.0
31.0
74.5
26.0
25
20
15
10
5
62.0
Apr-14
Jul-14
Oct-14
Jan-15
Source: Bloomberg
27.60
Current
Target
44.30
Revenue (Rmbm)
Operating EBITDA (Rmbm)
Net Profit (Rmbm)
Core EPS (Rmb)
Core EPS Growth
FD Core P/E (x)
DPS (Rmb)
Dividend Yield
EV/EBITDA (x)
P/FCFE (x)
Net Gearing
P/BV (x)
ROE
CIMB/consensus EPS (x)
Dec-13A
43,357
3,054
1,631
0.88
19.8%
36.32
0.20
0.62%
20.58
28.08
26.0%
3.77
11.5%
Dec-14A
50,049
4,566
2,351
1.20
36.3%
26.65
0.28
0.87%
14.70
NA
21.6%
2.90
12.8%
Dec-15F
54,560
5,837
2,804
1.43
19.1%
22.37
0.33
1.04%
10.96
45.35
7.1%
2.64
12.4%
1.03
Dec-16F
60,132
6,723
3,322
1.70
18.5%
18.89
0.40
1.24%
9.00
14.58
(5.7%)
2.38
13.2%
1.04
Dec-17F
64,985
7,497
3,859
1.97
16.2%
16.26
0.46
1.43%
7.51
11.90
(18.5%)
2.13
13.8%
0.99
Page 3
Rubber GlovesMalaysia
April 3, 2015
FLASH NOTE
Hartalega Holdings
HART MK / HTHB.KL
Market Cap
US$1,853m
US$1.13m
RM6,798m
RM4.11m
Free Float
30.2%
820.0 m shares
Current
RM8.50
Target
RM8.23
Prev. Target
Up/Downside
RM8.42
-3.2%
Conviction|
CIMB Analyst(s)
From our recent meeting with Hartalegas management, we felt that the
operating environment in the next two years will be tougher due to increasing
competition. To protect market share, the group aims to complete its new NGC
two years earlier, which will raise capex/year. To fund the accelerated
expansion, Hartalega will draw down some of its credit facilities. The higher
interest expense and depreciation cost are expected to weigh on its bottomline
in the near term. We cut FY15-16 EPS to factor in mainly (i) stronger US$
against RM (ii) higher interest expense and (iii) higher depreciation cost. This
reduces our target price which is based on 2-year historical P/E of 21x CY16.
We downgrade the stock to Hold. We prefer Kossan.
What Happened
1M
3M
12M
Relative
5.5
16.9
30.1
Absolute
6.3
21.4
29.0
Major shareholders
% held
Kuan family
EPF
BNP Paribas
55.1
7.9
6.8
During our meeting recently, we gather that (i) The group is on track to
complete its first two new plants in NGC by 1QCY16 and most of the capacity is
gradually been taken up. (ii) It is converting its Plant One to warehouse and
will be decommissioning Plant Two in the near future as the lines are old and
inefficient. (iii) It is also expanding into specialty glove manufacturing which
commands higher margins. (iv) It expanded its OBM business into China and
India to tap into the growing markets although margins are low. (v) ASP is
likely to continue to decline due to increasing competition. (vi) It is likely to
incur the bulk of the ESOS expense in FY16 for its proposed ESOS programme.
What We Think
We think that Hartalega is unlikely to achieve our previous earnings forecast
due to the (i) delay of the commencement of its new production lines; (ii)
competitive environment and (iii) higher capex and borrowings to fund its
accelerated expansion plan. Management is of the view that ASP is likely to
drop by 2-3% more while FY16 and FY17 net profit margin could come in at
between 18% to 20% respectively, which concurs with our view that margin
pressure is inevitable given its premium pricing. Aside from competition, its
expansion into natural rubber gloves segment and emerging countries will also
weigh on its margins. Fortunately, Hartalega has huge room to sustain the
margin despite pressure given its superior margin as compared to its peers.
Stronger US$ against RM will also help to buffer the impact of pricing pressure.
8.90
8.40
7.90
7.40
6.90
6.40
5.90
5.40
4
141.0
132.4
123.9
115.3
106.7
98.1
89.6
81.0
Vol m
2
1
Apr-14
Jul-14
Oct-14
Jan-15
Source: Bloomberg
5.74
Current
Target
8.23
Financial Summary
Revenue (RMm)
Operating EBITDA (RMm)
Net Profit (RMm)
Core EPS (RM)
Core EPS Growth
FD Core P/E (x)
DPS (RM)
Dividend Yield
EV/EBITDA (x)
P/FCFE (x)
Net Gearing
P/BV (x)
ROE
% Change In Core EPS Estimates
CIMB/consensus EPS (x)
Mar-13A
1,032
335.9
233.3
0.28
15.5%
29.89
0.13
1.53%
20.25
62.8
(22.2%)
9.13
33.7%
Mar-14A
1,107
351.3
232.8
0.28
(0.7%)
30.10
0.13
1.53%
19.37
189.4
(17.6%)
7.40
27.1%
Mar-15F
1,124
342.5
213.1
0.26
(8.0%)
32.71
0.13
1.53%
19.82
NA
(14.4%)
5.52
19.3%
(3.33%)
0.92
Mar-16F
1,458
460.0
282.2
0.34
32.4%
24.70
0.17
2.02%
15.25
525.8
3.1%
4.96
21.2%
(5.35%)
0.97
Mar-17F
1,853
551.7
334.4
0.41
18.5%
20.84
0.20
2.40%
12.88
54.9
8.5%
4.43
22.5%
(1.31%)
1.01
Page 4
BanksMalaysia
April 5, 2015
FLASH NOTE
Market Cap
US$5,609m
US$3.04m
RM20,580m
RM10.99m
Free Float
37.1%
2,573 m shares
Current
RM8.00
Target
RM10.50
Prev. Target
Up/Downside
RM10.50
31.3%
Conviction|
CIMB Analyst(s)
1M
3M
12M
Relative
0.3
1.5
-3.9
Absolute
1.0
6.2
Major shareholders
-5.0
% held
EPF
Aabar Investments
OSK Holdings
41.0
21.9
9.8
What Happened
Over the weekend, The Edge published an article stating that RHBCapital
(RHBCap) is considering internal reorganisation that would make RHB Bank
the listed entity, taking over RHBCap, and the holding company for all the
entities in the group. The purpose of this move is to improve the groups tax
efficiency, as it would enable RHB Bank to use its income to reduce some of its
tax expenses. The deal may involve a rights issue that could lower its
double-leverage ratio from above 130% now to 120%.
What We Think
The news was not a surprise to us because the management has been guiding
that it plans for corporate restructuring (please refer to our reports on 1 Mar 15
and 17 Mar 13). However, The Edge article provided more clarity on the
restructuring, including managements rationale and the possible deal
structure. The proposed new structure is akin to those of Maybank and Public
Bank, whereby the commercial banks house all the entities in the group.
The internal reorganisation per se would be slightly positive for the group as it
would lead to some tax savings. However, the overall impact of the deal would
be negative if it involves a rights issue due to its dilutive effect on EPS. The
management was not able to provide us with guidance on the quantum of the
rights issue as the group is still in discussions with the central bank.
Price Close
9.80
116.0
9.30
111.8
8.80
107.7
8.30
103.5
7.80
99.3
7.30
95.2
6.80
15
91.0
Vol m
10
5
Apr-14
Jul-14
Oct-14
Jan-15
Source: Bloomberg
7.06
Current
Target
10.50
Financial Summary
Net Interest Income (RMm)
Total Non-Interest Income (RMm)
Operating Revenue (RMm)
Total Provision Charges (RMm)
Net Profit (RMm)
Core EPS (RM)
Core EPS Growth
FD Core P/E (x)
DPS (RM)
Dividend Yield
BVPS (RM)
P/BV (x)
ROE
% Change In Core EPS Estimates
CIMB/consensus EPS (x)
Dec-13A
3,275
2,676
5,951
(448.0)
1,831
0.73
(4.36%)
11.01
0.16
2.04%
6.57
1.22
11.5%
Dec-14A
3,291
2,944
6,235
(206.3)
2,038
0.80
9.59%
10.05
0.06
0.75%
7.31
1.10
11.5%
Dec-15F
3,401
3,533
6,934
(467.1)
2,244
0.87
9.58%
9.17
0.26
3.27%
7.63
1.05
11.7%
0%
1.07
Dec-16F
3,587
3,861
7,448
(448.9)
2,450
0.95
9.16%
8.40
0.29
3.57%
8.32
0.96
11.9%
0%
1.09
Dec-17F
3,814
4,218
8,033
(503.3)
2,679
1.04
9.34%
7.68
0.31
3.90%
9.08
0.88
12.0%
0%
1.12
Page 5
Financial ServicesBanks
April 3, 2015
MALAYSIA
BANKS
SECTOR FLASH NOTE
CIMB Analyst(s)
What Happened
Our channel checks revealed that Bank Negara Malaysia released official
guidelines for the liquidity coverage ratio (LCR) on 31 Mar 15. The new
guidelines state that banks need to maintain a minimum LCR of 60% starting 1
Jun 15, to be stepped up gradually to 100% by 1 Jan 19. The LCR is defined as
stock of high-quality assets divided by total net cash outflows over the next 30
calendar days. The guidelines encourage banks to increase their retail deposits,
which are relatively stickier in nature. The rationale for the new ruling is to
protect banks from any liquidity stress, as was experienced by some
US/European banks during the 2009 financial crisis. At the moment, banks do
not officially disclose their LCRs but a few banks, i.e. Maybank, Public Bank,
RHB Capital and Alliance, have said that they are able to meet the
requirements.
What We Think
Deposit competition has been heating up since 3Q14 due to (1) the new LCR
ruling, and (2) tighter industry liquidity. The root of the problem was the slow
expansion of the industrys deposits. Total deposits for the banking system only
grew by 8.3% in 2013 and 7.6% in 2014, not adequate to fund loan growth of
10.6% and 9.3% in the respective years. The growth of retail deposits, which are
at the heart of deposit competition, was even weaker at only 6.7-6.9% in
2013-14. We do not see any factors that will significantly drive deposit
momentum in 2015 and, hence, competition will remain intense for banks.
We think that the new guidelines pose long-term problems for banks. Even if
they can achieve the minimum requirements, banks will have to compete on
deposits to keep their ratios above these levels. Banks with weaker deposit
franchises, like AMMB, will have to offer better rates to attract deposits and,
hence, rate competition will not subside. The only reprieves will be (1)
relaxation of the requirements, and (2) faster expansion in the industrys
deposits but we do not expect these to materialise any time soon.
IMPORTANT DISCLOSURES, INCLUDING ANY REQUIRED RESEARCH CERTIFICATIONS, ARE PROVIDED AT THE END OF THIS REPORT.
Page 6
FLASH NOTE
Nam Cheong
NCL SP / NMCG.SI
Market Cap
US$474.8m
US$1.04m
S$639.4m
S$1.41m
Free Float
48.8%
2,096 m shares
Current
S$0.31
Target
S$0.32
Prev. Target
Up/Downside
S$0.39
4.1%
Conviction|
Reality bites II
CIMB Analyst(s)
Taking our cue from its lacklustre sales in 1Q15, we downgrade Nam Cheong
from Add to Hold. We concede that we were over-bullish in expecting Nam
Cheong to sustain its 2014 sales momentum. We previously expected it to sell
around 30 vessels p.a. in 2015-17. We now expect Nam Cheong to sell 19-22
vessels in 2015-17, which would bring sales to 2012 levels (the year of recovery
for the OSV sector). This, coupled with the scaling back of shipbuilding gross
margins from 17.7% to 17%, leads us to cut FY15-17 EPS by 7-23%. Our target
price, still based on 7.5x CY16 P/E (1 s.d. below the 5-year mean of
small/mid-cap oil services companies), drops accordingly. We would revisit
the stock upon stronger-than-expected vessel sales and earnings.
What Happened
1M
3M
12M
Relative
-1.5
-10.1
-22.3
Absolute
0.0
-7.6
Major shareholders
-14.1
% held
27.4
15.3
8.6
Taking cue from its lacklustre sales in 1Q15, we downgrade Nam Cheong from
Add to Hold. Since our initiation on the stock in mid-2013, we maintained our
Add rating for two years. The companys performance justified a positive call,
as it recorded two consecutive years of record-breaking earnings and vessel
sales. In fact, it was the top performer in our O&M coverage universe in 2014,
as the only stock that did not lose money. However, we concede that we were
over-bullish to expect Nam Cheong to sustain its 2014 sales momentum.
What We Think
Nam Cheong sold two vessels (one accommodation work vessel at estimated
US$30m to Marco Polo and one 12,000 bhp AHTS at estimated US$28m to
Topaz Energy) in 1Q15. 1Q15 represented the lowest number of sales in a
quarter since 2012 and is on par with the weakness in 4Q14 subsequent to the
oil price tumble. On average, Nam Cheong has sold six vessels/quarter since
2012. On average, 1Q makes up 22% of the total number of vessels sold in a
year. Hence, the fact that merely two vessels were sold in 1Q15 puts a question
mark on our 30-vessel sales target for 2015. However, we note that 1Q12 made
up 14% of the number of vessels sold that year, as 2012 was a backend-loaded
year. We expect a similar scenario in 2015. In addition, the market prices for
the accommodation work vessel and 12,000 bhp AHTS in 2014 were
US$30m-32m/vessel. The ~10% discount indicates narrowing gross margins,
leading us to temper our expectations (FY14: 19.3% vs. FY15: 17%). In fairness,
the delivery lead time for the 12,000 bhp AHTS is long and thus, it is priced
more as a build-to-order vessel.
Given its RM1.7bn order book, we expect Nam Cheong to achieve decent 1Q15
net profit of RM50m. We recommend that investors sell into strength and
downgrade Nam Cheong from Add to Hold. We advise investors to switch to
our top small/mid-cap O&M pick, Swissco (SWCH SP, Add).
Price Close
0.470
128.0
0.420
114.0
0.370
100.0
0.320
86.0
0.270
50
40
30
20
10
72.0
Vol m
0.520
Apr-14
Jul-14
Oct-14
Jan-15
Source: Bloomberg
EFAPChartPriceVolRelDaily|
0.30
0.32
Current
Target
Financial Summary
Revenue (RMm)
Operating EBITDA (RMm)
Net Profit (RMm)
Core EPS (RM)
Core EPS Growth
FD Core P/E (x)
DPS (RM)
Dividend Yield
EV/EBITDA (x)
P/FCFE (x)
Net Gearing
P/BV (x)
ROE
% Change In Core EPS Estimates
CIMB/consensus EPS (x)
Dec-13A
1,257
219.9
205.6
0.10
43.6%
8.50
0.025
3.03%
10.35
38.06
56.4%
1.86
26.9%
Dec-14A
1,929
322.9
301.8
0.14
46.5%
5.80
0.039
4.67%
6.66
3.53
42.8%
1.43
27.9%
Dec-15F
1,978
292.0
267.0
0.13
(11.1%)
6.53
0.040
4.78%
6.84
NA
27.5%
1.24
20.4%
(7.1%)
0.94
Dec-16F
1,718
256.5
235.2
0.11
(11.9%)
7.41
0.040
4.78%
6.56
4.80
5.6%
1.12
15.9%
(17.1%)
0.76
Dec-17F
1,606
240.9
221.2
0.11
(6.0%)
7.88
0.040
4.78%
6.13
87.24
(6.2%)
1.03
13.6%
(22.9%)
0.82
Page 7
RESEARCH MANAGEMENT
Chris HUNT
Regional Head of Research
(852) 2539 1315
chris.hunt@cimb.com
Mark KELLOCK
Regional Head of Product Management
(852) 2539 1326
mark.kellock@cimb.com
Arup RAHA
Economics
(65) 6210 8412
arup.raha@cimb.com
Varun LOHCHAB
Consumer
(91) 22 6602 5181
varun.lohchab@cimb.com
KJ KWANG
Offshore & Marine
(82) 2 6730 6123
kj.hwang@cimb.com
Bertram LAI
Hong Kong/China
(852) 2532 1111
bertram.lai@cimb.com
Avadhoot SABNIS
India
(91) 22 6602 5151
avadhoot.sabnis@cimb.com
Erwan TEGUH
Indonesia
(62) 21 3006 1720
erwan.teguh@cimb.com
Dohoon LEE
South Korea
(82) 2 6730 6121
dohoon.lee@cimb.com
Edser TRINIDAD
Philippines
(63) 2 836 3933
etrinidad@securitybank.com.ph
Eric LIN
Taiwan
(886) 2 8729 8380
eric.lin@cimb.com
Yolan SEIMON
Sri Lanka
(94) 11 2306273
yolan@jkstock.keells.com
Coverage via partnership arrangement with
John Keells Stock Brokers
Page 8
#05
DISCLAIMER
This report is not directed to, or intended for distribution to or use by, any person or entity who is a citizen or resident of or located in any locality,
state, country or other jurisdiction where such distribution, publication, availability or use would be contrary to law or regulation.
By accepting this report, the recipient hereof represents and warrants that he is entitled to receive such report in accordance with the restrictions
set forth below and agrees to be bound by the limitations contained herein (including the Restrictions on Distributions set out below). Any failure
to comply with these limitations may constitute a violation of law. This publication is being supplied to you strictly on the basis that it will remain
confidential. No part of this report may be (i) copied, photocopied, duplicated, stored or reproduced in any form by any means or (ii) redistributed
or passed on, directly or indirectly, to any other person in whole or in part, for any purpose without the prior written consent of CIMB.
Unless otherwise specified, this report is based upon sources which CIMB considers to be reasonable. Such sources will, unless otherwise
specified, for market data, be market data and prices available from the main stock exchange or market where the relevant security is listed, or,
where appropriate, any other market. Information on the accounts and business of company(ies) will generally be based on published statements
of the company(ies), information disseminated by regulatory information services, other publicly available information and information resulting
from our research.
Whilst every effort is made to ensure that statements of facts made in this report are accurate, all estimates, projections, forecasts, expressions
of opinion and other subjective judgments contained in this report are based on assumptions considered to be reasonable as of the date of the
document in which they are contained and must not be construed as a representation that the matters referred to therein will occur. Past
performance is not a reliable indicator of future performance. The value of investments may go down as well as up and those investing may,
depending on the investments in question, lose more than the initial investment. No report shall constitute an offer or an invitation by or on behalf
of CIMB or its affiliates to any person to buy or sell any investments.
CIMB, its affiliates and related companies, their directors, associates, connected parties and/or employees may own or have positions in
securities of the company(ies) covered in this research report or any securities related thereto and may from time to time add to or dispose of, or
may be materially interested in, any such securities. Further, CIMB, its affiliates and its related companies do and seek to do business with the
company(ies) covered in this research report and may from time to time act as market maker or have assumed an underwriting commitment in
securities of such company(ies), may sell them to or buy them from customers on a principal basis and may also perform or seek to perform
significant investment banking, advisory, underwriting or placement services for or relating to such company(ies) as well as solicit such
investment, advisory or other services from any entity mentioned in this report.
CIMB or its affiliates may enter into an agreement with the company(ies) covered in this report relating to the production of research reports.
CIMB may disclose the contents of this report to the company(ies) covered by it and may have amended the contents of this report following
such disclosure.
The analyst responsible for the production of this report hereby certifies that the views expressed herein accurately and exclusively reflect his or
her personal views and opinions about any and all of the issuers or securities analysed in this report and were prepared independently and
autonomously. No part of the compensation of the analyst(s) was, is, or will be directly or indirectly related to the inclusion of specific
recommendations(s) or view(s) in this report. CIMB prohibits the analyst(s) who prepared this research report from receiving any compensation,
incentive or bonus based on specific investment banking transactions or for providing a specific recommendation for, or view of, a particular
company. Information barriers and other arrangements may be established where necessary to prevent conflicts of interests arising. However,
the analyst(s) may receive compensation that is based on his/their coverage of company(ies) in the performance of his/their duties or the
performance of his/their recommendations and the research personnel involved in the preparation of this report may also participate in the
solicitation of the businesses as described above. In reviewing this research report, an investor should be aware that any or all of the foregoing,
among other things, may give rise to real or potential conflicts of interest. Additional information is, subject to the duties of confidentiality,
available on request.
Reports relating to a specific geographical area are produced by the corresponding CIMB entity as listed in the table below. The term CIMB
shall denote, where appropriate, the relevant entity distributing or disseminating the report in the particular jurisdiction referenced below, or, in
every other case, CIMB Group Holdings Berhad ("CIMBGH") and its affiliates, subsidiaries and related companies.
Country
Australia
Hong Kong
Indonesia
India
Malaysia
Singapore
South Korea
Taiwan
Thailand
CIMB Entity
CIMB Securities (Australia) Limited
CIMB Securities Limited
PT CIMB Securities Indonesia
CIMB Securities (India) Private Limited
CIMB Investment Bank Berhad
CIMB Research Pte. Ltd.
CIMB Securities Limited, Korea Branch
CIMB Securities Limited, Taiwan Branch
CIMB Securities (Thailand) Co. Ltd.
Regulated by
Australian Securities & Investments Commission
Securities and Futures Commission Hong Kong
Financial Services Authority of Indonesia
Securities and Exchange Board of India (SEBI)
Securities Commission Malaysia
Monetary Authority of Singapore
Financial Services Commission and Financial Supervisory Service
Financial Supervisory Commission
Securities and Exchange Commission Thailand
Information in this report is a summary derived from CIMB individual research reports. As such, readers are directed to the CIMB individual
research report or note to review the individual Research Analyst's full analysis of the subject company. Important disclosures relating to the
companies that are the subject of research reports published by CIMB and the proprietary positions by CIMB and shareholdings of its Research
Analysts who prepared the report in the securities of the company(s) are available in the individual research report.
The information contained in this research report is prepared from data believed to be correct and reliable at the time of issue of this report. CIMB
may or may not issue regular reports on the subject matter of this report at any frequency and may cease to do so or change the periodicity of
reports at any time. CIMB is under no obligation to update this report in the event of a material change to the information contained in this report.
This report does not purport to contain all the information that a prospective investor may require. CIMB or any of its affiliates does not make any
Page 9
guarantee, representation or warranty, express or implied, as to the adequacy, accuracy, completeness, reliability or fairness of any such
information and opinion contained in this report. Neither CIMB nor any of its affiliates nor its related persons shall be liable in any manner
whatsoever for any consequences (including but not limited to any direct, indirect or consequential losses, loss of profits and damages) of any
reliance thereon or usage thereof.
This report is general in nature and has been prepared for information purposes only. It is intended for circulation amongst CIMB and its affiliates
clients generally and does not have regard to the specific investment objectives, financial situation and the particular needs of any specific
person who may receive this report. The information and opinions in this report are not and should not be construed or considered as an offer,
recommendation or solicitation to buy or sell the subject securities, related investments or other financial instruments thereof.
Investors are advised to make their own independent evaluation of the information contained in this research report, consider their own individual
investment objectives, financial situation and particular needs and consult their own professional and financial advisers as to the legal, business,
financial, tax and other aspects before participating in any transaction in respect of the securities of company(ies) covered in this research report.
The securities of such company(ies) may not be eligible for sale in all jurisdictions or to all categories of investors.
Australia: Despite anything in this report to the contrary, this research is provided in Australia by CIMB Securities (Australia) Limited (CSAL)
(ABN 84 002 768 701, AFS Licence number 240 530). CSAL is a Market Participant of ASX Ltd, a Clearing Participant of ASX Clear Pty Ltd, a
Settlement Participant of ASX Settlement Pty Ltd, and, a participant of Chi X Australia Pty Ltd. This research is only available in Australia to
persons who are wholesale clients (within the meaning of the Corporations Act 2001 (Cth)) and is supplied solely for the use of such wholesale
clients and shall not be distributed or passed on to any other person. This research has been prepared without taking into account the objectives,
financial situation or needs of the individual recipient.
France: Only qualified investors within the meaning of French law shall have access to this report. This report shall not be considered as an offer
to subscribe to, or used in connection with, any offer for subscription or sale or marketing or direct or indirect distribution of financial instruments
and it is not intended as a solicitation for the purchase of any financial instrument.
Hong Kong: This report is issued and distributed in Hong Kong by CIMB Securities Limited (CHK) which is licensed in Hong Kong by the
Securities and Futures Commission for Type 1 (dealing in securities), Type 4 (advising on securities) and Type 6 (advising on corporate finance)
activities. Any investors wishing to purchase or otherwise deal in the securities covered in this report should contact the Head of Sales at CIMB
Securities Limited. The views and opinions in this research report are our own as of the date hereof and are subject to change. If the Financial
Services and Markets Act of the United Kingdom or the rules of the Financial Conduct Authority apply to a recipient, our obligations owed to such
recipient therein are unaffected. CHK has no obligation to update its opinion or the information in this research report.
This publication is strictly confidential and is for private circulation only to clients of CHK. This publication is being supplied to you strictly on the
basis that it will remain confidential. No part of this material may be (i) copied, photocopied, duplicated, stored or reproduced in any form by any
means or (ii) redistributed or passed on, directly or indirectly, to any other person in whole or in part, for any purpose without the prior written
consent of CHK. Unless permitted to do so by the securities laws of Hong Kong, no person may issue or have in its possession for the purposes
of issue, whether in Hong Kong or elsewhere, any advertisement, invitation or document relating to the securities covered in this report, which is
directed at, or the contents of which are likely to be accessed or read by, the public in Hong Kong (except if permitted to do so under the
securities laws of Hong Kong).
India: This report is issued and distributed in India by CIMB Securities (India) Private Limited (CIMB India) which is registered with SEBI as a
stock-broker under the Securities and Exchange Board of India (Stock Brokers and Sub-Brokers) Regulations, 1992 and in accordance with the
provisions of Regulation 4 (g) of the Securities and Exchange Board of India (Investment Advisers) Regulations, 2013, CIMB India is not required
to seek registration with SEBI as an Investment Adviser.
The research analysts, strategists or economists principally responsible for the preparation of this research report are segregated from the other
activities of CIMB India and they have received compensation based upon various factors, including quality, accuracy and value of research, firm
profitability or revenues, client feedback and competitive factors. Research analysts', strategists' or economists' compensation is not linked to
investment banking or capital markets transactions performed or proposed to be performed by CIMB India or its affiliates.
Indonesia: This report is issued and distributed by PT CIMB Securities Indonesia (CIMBI). The views and opinions in this research report are
our own as of the date hereof and are subject to change. If the Financial Services and Markets Act of the United Kingdom or the rules of the
Financial Conduct Authority apply to a recipient, our obligations owed to such recipient therein are unaffected. CIMBI has no obligation to update
its opinion or the information in this research report.
This publication is strictly confidential and is for private circulation only to clients of CIMBI. This publication is being supplied to you strictly on the
basis that it will remain confidential. No part of this material may be (i) copied, photocopied, duplicated, stored or reproduced in any form by any
means or (ii) redistributed or passed on, directly or indirectly, to any other person in whole or in part, for any purpose without the prior written
consent of CIMBI. Neither this report nor any copy hereof may be distributed in Indonesia or to any Indonesian citizens wherever they are
domiciled or to Indonesia residents except in compliance with applicable Indonesian capital market laws and regulations.
Malaysia: This report is issued and distributed by CIMB Investment Bank Berhad (CIMB). The views and opinions in this research report are
our own as of the date hereof and are subject to change. If the Financial Services and Markets Act of the United Kingdom or the rules of the
Financial Conduct Authority apply to a recipient, our obligations owed to such recipient therein are unaffected. CIMB has no obligation to update
its opinion or the information in this research report.
This publication is strictly confidential and is for private circulation only to clients of CIMB. This publication is being supplied to you strictly on the
basis that it will remain confidential. No part of this material may be (i) copied, photocopied, duplicated, stored or reproduced in any form by any
means or (ii) redistributed or passed on, directly or indirectly, to any other person in whole or in part, for any purpose without the prior written
consent of CIMB.
New Zealand: In New Zealand, this report is for distribution only to persons whose principal business is the investment of money or who, in the
course of, and for the purposes of their business, habitually invest money pursuant to Section 3(2)(a)(ii) of the Securities Act 1978.
Page 10
Singapore: This report is issued and distributed by CIMB Research Pte Ltd (CIMBR). Recipients of this report are to contact CIMBR in
Singapore in respect of any matters arising from, or in connection with, this report. The views and opinions in this research report are our own as
of the date hereof and are subject to change. If the Financial Services and Markets Act of the United Kingdom or the rules of the Financial
Conduct Authority apply to a recipient, our obligations owed to such recipient therein are unaffected. CIMBR has no obligation to update its
opinion or the information in this research report.
This publication is strictly confidential and is for private circulation only. If the recipient of this research report is not an accredited investor, expert
investor or institutional investor, CIMBR accepts legal responsibility for the contents of the report without any disclaimer limiting or otherwise
curtailing such legal responsibility. This publication is being supplied to you strictly on the basis that it will remain confidential. No part of this
material may be (i) copied, photocopied, duplicated, stored or reproduced in any form by any means or (ii) redistributed or passed on, directly or
indirectly, to any other person in whole or in part, for any purpose without the prior written consent of CIMBR..
As of April 5, 2015, CIMBR does not have a proprietary position in the recommended securities in this report.
South Korea: This report is issued and distributed in South Korea by CIMB Securities Limited, Korea Branch ("CIMB Korea") which is licensed
as a cash equity broker, and regulated by the Financial Services Commission and Financial Supervisory Service of Korea.
The views and opinions in this research report are our own as of the date hereof and are subject to change, and this report shall not be
considered as an offer to subscribe to, or used in connection with, any offer for subscription or sale or marketing or direct or indirect distribution of
financial investment instruments and it is not intended as a solicitation for the purchase of any financial investment instrument.
This publication is strictly confidential and is for private circulation only, and no part of this material may be (i) copied, photocopied, duplicated,
stored or reproduced in any form by any means or (ii) redistributed or passed on, directly or indirectly, to any other person in whole or in part, for
any purpose without the prior written consent of CIMB Korea.
Sweden: This report contains only marketing information and has not been approved by the Swedish Financial Supervisory Authority. The
distribution of this report is not an offer to sell to any person in Sweden or a solicitation to any person in Sweden to buy any instruments
described herein and may not be forwarded to the public in Sweden.
Taiwan: This research report is not an offer or marketing of foreign securities in Taiwan. The securities as referred to in this research report have
not been and will not be registered with the Financial Supervisory Commission of the Republic of China pursuant to relevant securities laws and
regulations and may not be offered or sold within the Republic of China through a public offering or in circumstances which constitutes an offer or
a placement within the meaning of the Securities and Exchange Law of the Republic of China that requires a registration or approval of the
Financial Supervisory Commission of the Republic of China.
Thailand: This report is issued and distributed by CIMB Securities (Thailand) Company Limited (CIMBS). The views and opinions in this
research report are our own as of the date hereof and are subject to change. If the Financial Services and Markets Act of the United Kingdom or
the rules of the Financial Conduct Authority apply to a recipient, our obligations owed to such recipient therein are unaffected. CIMBS has no
obligation to update its opinion or the information in this research report.
This publication is strictly confidential and is for private circulation only to clients of CIMBS. This publication is being supplied to you strictly on the
basis that it will remain confidential. No part of this material may be (i) copied, photocopied, duplicated, stored or reproduced in any form by any
means or (ii) redistributed or passed on, directly or indirectly, to any other person in whole or in part, for any purpose without the prior written
consent of CIMBS.
CIMB Securities (Thailand) Co., Ltd. may act or acts as Market Maker and issuer including offering of Derivative Warrants Underlying securities
of the following securities. Investors should carefully read and study the details of the derivative warrants in the prospectus before making
investment decisions.
AAV, ADVANC, AIT, AMATA, ANAN, AOT, AP, ASP, BANPU, BAY, BBL, BCH, BCP, BEC, BECL, BGH, BH, BIGC, BJC, BJCHI, BLAND, BMCL,
BTS, CENTEL, CK, CPALL, CPF, CPN, DELTA, DEMCO, DTAC, EARTH, EGCO, ERW, GFPT, GLOBAL, GLOW, GUNKUL, HANA, HEMRAJ,
HMPRO, ICHI, IFEC, INTUCH, IRPC, ITD, IVL, JAS, KBANK, KCE, KKP, KTB, KTC, KTIS, LH, LOXLEY, LPN, M, MAJOR, MC, MEGA, MINT,
NOK, PS, PSL, PTG, PTT, PTTEP, PTTGC, QH, RATCH, RML, ROBINS, SAMART, SAWAD, SCB, SCC, SCCC, SF, SGP, SIM, SIRI, SPALI,
SPCG, SRICHA, STA, STEC, STPI, SVI, TCAP, THAI, THCOM, THREL, TICON, TISCO, TMB, TOP, TPIPL, TTA, TTCL, TTW, TUF, UV, VGI,
TRUE.
Corporate Governance Report:
The disclosure of the survey result of the Thai Institute of Directors Association (IOD) regarding corporate governance is made pursuant to the
policy of the Office of the Securities and Exchange Commission. The survey of the IOD is based on the information of a company listed on the
Stock Exchange of Thailand and the Market for Alternative Investment disclosed to the public and able to be accessed by a general public
investor. The result, therefore, is from the perspective of a third party. It is not an evaluation of operation and is not based on inside information.
The survey result is as of the date appearing in the Corporate Governance Report of Thai Listed Companies. As a result, the survey result may
be changed after that date. CIMBS does not confirm nor certify the accuracy of such survey result.
Score Range:
Description:
90 - 100
Excellent
80 - 89
Very Good
70 - 79
Good
Below 70 or
N/A
No Survey Result
United Arab Emirates: The distributor of this report has not been approved or licensed by the UAE Central Bank or any other relevant licensing
authorities or governmental agencies in the United Arab Emirates. This report is strictly private and confidential and has not been reviewed by,
deposited or registered with UAE Central Bank or any other licensing authority or governmental agencies in the United Arab Emirates. This report
is being issued outside the United Arab Emirates to a limited number of institutional investors and must not be provided to any person other than
the original recipient and may not be reproduced or used for any other purpose. Further, the information contained in this report is not intended to
lead to the sale of investments under any subscription agreement or the conclusion of any other contract of whatsoever nature within the territory
Page 11
Page 12
Definition:
An Overweight rating means stocks in the sector have, on a market cap-weighted basis, a positive absolute recommendation.
A Neutral rating means stocks in the sector have, on a market cap-weighted basis, a neutral absolute recommendation.
An Underweight rating means stocks in the sector have, on a market cap-weighted basis, a negative absolute recommendation.
Country Ratings
Overweight
Neutral
Underweight
Definition:
An Overweight rating means investors should be positioned with an above-market weight in this country relative to benchmark.
A Neutral rating means investors should be positioned with a neutral weight in this country relative to benchmark.
An Underweight rating means investors should be positioned with a below-market weight in this country relative to benchmark.
*Prior to December 2013 CIMB recommendation framework for stocks listed on the Singapore Stock Exchange, Bursa Malaysia, Stock Exchange of Thailand,
Jakarta Stock Exchange, Australian Securities Exchange, Taiwan Stock Exchange and National Stock Exchange of India/Bombay Stock Exchange were
based on a stocks total return relative to the relevant benchmarks total return. Outperform: expected to exceed by 5% or more over the next 12 months.
Neutral: expected to be within +/-5% over the next 12 months. Underperform: expected to be below by 5% or more over the next 12 months. Trading Buy:
expected to exceed by 3% or more over the next 3 months. Trading Sell: expected to be below by 3% or more over the next 3 months. For stocks listed on
Korea Exchange, Hong Kong Stock Exchange and China listings on the Singapore Stock Exchange. Outperform: Expected positive total returns of 10% or
more over the next 12 months. Neutral: Expected total returns of between -10% and +10% over the next 12 months. Underperform: Expected negative total
returns of 10% or more over the next 12 months. Trading Buy: Expected positive total returns of 10% or more over the next 3 months. Trading Sell: Expected
negative total returns of 10% or more over the next 3 months.
Page 13