Oil & Gas/Chemicals | A S I A

AS I AN PE T R O C OM ME N T AR Y : WEE K OF 14 M AY 2 010
NOMURA INTERNATIONAL (HK) LIMITED

Cheng Khoo

+852 2252 6180

cheng.khoo@nomura.com

RUNNING

THEME

This editions highlights

We see strong operational growth upside for the Indian gas sector, as demand remains much higher than capacity. In the near term, pipeline bottlenecks mean that supply is far below capacity. The effective demand-supply gap could be between 30% and 40% of demand, based on industry estimates. We believe regulatory/policy confusion is transient and possibly excessively discounted. W E E K L Y

Crude oil drops w-w

Crude oil: Brent crude fell 3.6% w-w to US$79.5/bbl and WTI crude fell 6.5% w-w last week following a weaker US gasoline demand and higher US crude and distillate inventories. Refining: The Singapore complex margin remained flat (w-w) at US$3.4/bbl. Gasoline margin averaged US$8.5/bbl, down 11.6% w-w. Petrochemicals: Ethylene-naphtha rose 6.8% w-w to US$560/tonne. Benzene margin rose 2.4% to US$235/tonne. Best and worst: Stocks in our coverage universe mostly rose in absolute terms last week. COSL gained the most, rising 10.4% w-w. SK Energy performed the worst, down 6.0% w-w. See Exhibit 24 for relative performance.

Analysts
Cheng Khoo (Regional Team Head) +852 2252 6180 cheng.khoo@nomura.com Michael Lo (Oil Market) +852 2252 6225 michael.lo@nomura.com Xavier Grunauer (Australia) +852 2536 1838 xavier.grunauer@nomura.com Yong Liang Por (Taiwan & Thailand) +852 2252 6220 yongliang.por@nomura.com Gordon Wai (China) +852 2252 6176 gordon.wai@nomura.com Cindy Park (Korea) +822 3783 2324 cindy.park@nomura.com Anil Sharma (India) +91 22 4037 4338 anil.sharma.1@nomura.com Ravikumar Adukia (Associate) +91 22 6723 5787 ravikumar.adukia@nomura.com Chris Chang (Associate) +822 3783 2316 chris.chang@nomura.com Saurabh Bharat (Associate) +91 22 3053 2835 saurabh.bharat@nomura.com Sanat Satyan (Associate) +91 22 6723 4076 sanat.satyan@nomura.com

Key news and events from the past week

1. 2. We see strong operational growth upside for the Indian gas sector, as demand remains far higher than capacity. On 11 May, COSL announced that the company will issue A-shares in the amount of not more that 500mn shares or gross proceeds of RMB7bn, whichever is lower. On May 14, Maeil Economy reported that SK Energy plans to spin off its refining and petrochemical units. LG Chem remains confident about 2010 earnings performance, as well as success of automotive batteries and LCD glass. Hanwha Chemical posted a healthy set of earnings in 1Q10 as net profit turned to black q-q and grew by 20.5% y-y.

3. 4. 5.

Any authors named on this report are research analysts unless otherwise indicated. See the important disclosures and analyst certifications on pages 18 to 21.
Nomura 1 17 May 2010

Oil & Gas/Chemicals | Asia

Cheng Khoo

Drilling down

Exploration and production: crude prices fell 3.6% w-w

The Brent crude weekly average price fell 3.6% to US$79.5/bbl, while West Texas Intermediate (WTI) crude oil price fell 6.5% w-w to a weekly average of US$75.0/bbl. Last weeks US Department of Energy (DOE) data showed a 1.5% drop in US gasoline demand. US crude inventories rose 1.9 mmbbl last week, while there was a draw of 2.8 mmbbl in gasoline inventories and a rise of 1.4 mmbbl in distillate inventories.

Exhibit 1. Weekly oil prices

Weekly average (US$/bbl) Brent WTI Dubai Duri Minas Tapis 14/05/10 79.5 75.0 80.2 72.5 79.5 81.9 07/05/10 82.5 80.2 83.7 77.2 83.5 85.5 % chg (3.6) (6.5) (4.2) (6.1) (4.8) (4.2) Quarterly average QTD 83.4 82.3 82.2 78.1 83.5 85.6 1Q10 76.6 78.6 75.9 74.8 78.5 80.5 % chg 8.8 4.7 8.3 4.4 6.3 6.3 Yearly average YTD 79.1 80.0 78.2 76.0 80.2 82.3 2009 61.8 61.7 61.6 56.8 62.4 65.0 % chg 28.0 29.6 26.9 33.7 28.6 26.6 Nomura forecast 2010F 85.0 2011F 95.0 -

Source: Bloomberg, Nomura estimates

Key developments
We see strong operational growth upside for the Indian gas sector We see strong operational growth upside for the Indian gas sector, as demand remains far higher than capacity. In the near term, pipeline bottlenecks mean that supply is far below capacity. The effective demand-supply gap could be between 30% and 40% of demand, based on industry estimates. We have BUY ratings on Reliance Industries, GAIL, Petronet LNG, Gujarat State Petronet, Indraprastha Gas and Gujarat Gas, and believe regulatory/policy confusion is transient and possibly excessively discounted. On 11 May, COSL announced that the company will issue A-shares On 11 May, COSL announced that the company will issue A-shares in the amount of not more that 500mn shares or gross proceeds of RMB7bn, whichever is lower. We think A-share issuance is positive in terms of loosening the company's tight cash flow situation and lowering its net gearing and interest expenses. However, as COSL's strategy is to become one of the world's largest integrated oil services companies, there is a risk that the company will inflate its gearing again to make another acquisition in the future. We rate the shares REDUCE with a price target of HK$8.6.

Nomura

17 May 2010

Oil & Gas/Chemicals | Asia

Cheng Khoo

Exhibit 2. Weekly oil prices

150 125 US$/bbl

Exhibit 3. WTI oil futures

95 85 US$/bbl 75 65 55 May-10 Sep-10 Jan-11 May-11 Sep-11 Jan-12 May-12 Current
Source: Bloomberg

100 75 50 25 0 20002001 200220032004 200520062007 200820092010

Previous year

Source: Bloomberg

Exhibit 4. Light-heavy spread

18 15 12 US$/bbl 9 6 3 0 -3 Mar- Oct- May- Dec- Jul05 05 06 06 07 Feb- Sep- Apr- Nov08 08 09 09

Exhibit 5. Sweet-sour spread

12 10 US$/bbl 8 6 4 2 0 Mar- Oct- May- Dec05 05 06 06

Jul07

Feb- Sep- Apr- Nov08 08 09 09

Light = Tapis; Heavy = Dubai. Source: Bloomberg

Sweet - WTI Cushing; Sour - West Texas Sour. Source: Bloomberg

Exhibit 6. US crude inventory

380 360 mn bbls

Exhibit 7. US crude oil implied demand

30 25 mn bbls 20 15 10 5 0 Week 1 4 7 10 13 16 19 22 25 28 31 34 37 40 43 46 49 52 2008
Source: EIA

340 320 300 280 260 Week 1 4 7 10 13 16 19 22 25 28 31 34 37 40 43 46 49 52 2008 2009 2010

2009

2010

Source: Energy Information Administration (EIA)

Nomura

17 May 2010

Oil & Gas/Chemicals | Asia

Cheng Khoo

Refining: margins flat w-w

Asian complex refining margins remained flat last week at US$3.4/bbl, with a fall in gasoline, diesel and jet/kero margins offset by a rise in LPG, fuel oil and naphtha margins. Gasoline margins fell 11.6% w-w to US$8.5/bbl, while diesel margins were down 2.1% w-w to US$11.0/bbl and jet/kerosene margins fell 3.0% w-w to US$10.9/bbl. Fuel oil margins rose by 20.0% w-w, while LPG margins rose 21.4% and naphtha margins doubled during the week to US$0.3/bbl.

Exhibit 8. Refining margins

Weekly average (US$/bbl) Singapore Complex Simple US Gulf WTI Brent Europe Complex Simple Product prices Gasoline Diesel Jet/ kerosene Fuel oil Naphtha 88.7 91.2 91.1 70.4 80.5 93.4 95.0 94.9 71.5 83.8 (5.0) (3.9) (4.1) (1.5) (4.0) 2.2 (11.6) (2.1) (3.0) 20.0 100.0 21.4 93.7 93.6 93.5 70.2 82.2 60.1 11.5 11.3 11.3 (12.0) (0.1) (22.1) 89.9 84.6 85.1 68.0 78.1 59.2 13.9 8.6 9.1 (7.9) 2.2 (16.8) 4.3 10.7 9.9 3.2 5.2 1.6 (17.5) 31.8 23.4 (51.4) (103.7) (31.8) 91.4 87.9 88.1 68.9 79.6 59.3 13.2 9.7 9.9 (9.3) 1.4 (18.9) 74.1 68.9 69.9 52.0 60.1 44.7 12.4 7.2 8.2 (9.7) (1.5) (16.9) 23.3 27.7 26.2 32.6 32.5 32.5 5.8 34.4 20.8 3.6 191.2 (12.0) 98.0 93.5 94.0 78.0 85.5 71.0 13.0 8.5 9.0 (7.0) 0.5 (14.0) 108.5 105.0 106.0 89.0 94.0 81.0 13.5 10.0 11.0 (6.0) (1.0) (14.0) 121.0 121.0 121.5 103.0 111.0 96.0 11.0 11.0 11.5 (7.0) 1.0 (14.0) 4.4 4.4 3.9 4.1 11.8 8.3 2.4 2.4 3.2 2.4 (24.0) (1.4) 3.0 2.5 3.5 2.3 (13.7) 5.9 9.0 4.1 6.1 1.7 46.9 136.8 4.9 2.5 3.2 2.9 55.0 (13.3) 3.7 3.0 4.2 2.9 (12.1) 3.4 3.4 0.3 3.4 (0.4) (0.3) 179.5 3.6 (0.4) 4.9 1.4 (25.6) (128.6) 4.5 0.8 3.7 0.7 22.4 12.9 4.0 0.1 4.7 0.7 4.3 0.6 14/05/10 07/05/10 % chg Refining centres Quarterly average QTD Q110 % chg Yearly average YTD 2009 % chg Nomura forecast 2010F 2011F 2012F

LPG 62.3 61.0 Far East crack spreads (vs Dubai) Gasoline Diesel Jet/kerosene Fuel oil Naphtha LPG 8.5 11.0 10.9 (9.8) 0.3 (17.9) 9.6 11.3 11.2 (12.3) 0.1 (22.7)

Source: Thomson Reuters Datastream, Bloomberg, Nomura estimates

Key developments
SK Energy plans to spin off its refining and petrochemical units On May 14, Maeil Economy reported that SK Energy plans to spin off its refining and petrochemical units. Upon our check with the company, however, we learned that the issue is currently under review and no specific decisions have yet been made. Our view is that the potential spin-off could be positive for the company.

Nomura

17 May 2010

Oil & Gas/Chemicals | Asia

Cheng Khoo

Exhibit 9. Singapore complex refining margin

12 10 8 6 4 2 0 -2 -4 -6 Jan- May- Sep- Jan- May- Sep- Jan- May- Sep- Jan- May07 07 07 08 08 08 09 09 09 10 10 Complex
Source: Thomson Reuters Datastream

Exhibit 10. Far East crack spreads (Dubai)

50 40 US$/bbl 30 20 10 0 -10 -20 Mar05 Oct- May- Dec05 06 06 Gasoline
Source: Bloomberg

US$/bbl

Jul07

Feb- Sep- Apr- Nov08 08 09 09 Jet/Kero Fuel oil

Simple

Diesel

Exhibit 11. Singapore oil product inventories

25,000 22,000 000 tonnes 19,000 16,000 13,000 10,000 7,000 4,000 Mar- Oct- May- Dec- Jul- Feb- Sep- Apr- Nov05 05 06 06 07 08 08 09 09 Light Middle Heavy

Exhibit 12. Henry Hub vs fuel oil

15 10 5 0 -5 -10 -15 -20 -25 Mar- Aug- Jan- Jun- Nov- Apr- Sep- Feb- Jul- Dec- May06 06 07 07 07 08 08 09 09 09 10 FO less Gas Fuel oil margin

Source: Bloomberg

Source: Bloomberg

Exhibit 13. US gasoline inventory

250 240 230 mn bbls 220 210 200 190 180 170 Week 1 5 9 13 17 21 25 29 33 37 41 45 49 53 2009 2010

Exhibit 14. US distillate inventory

180 170 160 mn bbls 150 140 130 120 110 100 Week 1 5 9 13 17 21 25 29 33 37 41 45 49 53 2009 2010

2008
Source: EIA

US$/mmbtu

2008
Source: EIA

Nomura

17 May 2010

Oil & Gas/Chemicals | Asia

Cheng Khoo

Petrochemicals: ethylene margin up 6.8% w-w

Benzene margins rose 2.4% this week to US$235/tonne, while ethylene margins rose 6.8% w-w to US$560/tonne. Margins rose mostly following a 4.6% drop in feedstock naphtha prices and mixed product prices in absolute terms. Ethylene prices were flat w-w at US$1,300/tonne, while benzene prices fell 3.0% w-w to US$975/tonne.

Exhibit 15. Weekly petrochemical prices

Weekly average (US$/tonne) Naphtha Ethylene Polyethylene (HDPE) Polyethylene (LDPE) Ethylene Glycol (EG) Propylene Polypropylene (PP) Benzene Styrene monomer (SM) Polystyrene (PS) Paraxylene (PX) PTA Polyester PVC Toluene Butadiene
Source: Thomson Reuters Datastream

Quarterly average QTD 759 1,270 1,219 1,436 910 1,291 1,318 1,003 1,346 1,405 1,047 984 1,667 996 904 2,141 Q110 % change 724 1,270 1,241 1,458 964 1,228 1,274 969 1,290 1,399 1,052 953 1,667 991 894 1,845 4.8 0.0 (1.8) (1.5) (5.6) 5.2 3.5 3.5 4.4 0.4 (0.5) 3.2 0.0 0.6 1.2 16.0 (4.6) 0.0 0.0 0.0 (3.2) (0.5) (0.9) (3.0) (1.3) 0.6 (1.3) (4.0) 0.0 0.0 (2.7) 0.0

Yearly average YTD 736 1,270 1,234 1,451 946 1,249 1,289 980 1,309 1,401 1,050 966 1,667 993 897 1,959 2009 % change 558 844 1,078 1,140 630 902 1,038 698 905 1,055 991 830 1,657 780 707 991 31.8 50.4 14.4 27.2 50.2 38.5 24.1 40.5 44.6 32.9 6.0 16.4 0.6 27.2 26.9 97.6

14-May-10 741 1,300 1,230 1,450 853 1,290 1,340 975 1,344 1,420 1,048 950 1,667 985 873 2,255

7-May-10 % change 776 1,300 1,230 1,450 881 1,296 1,352 1,005 1,361 1,412 1,062 990 1,667 985 897 2,255

Exhibit 16. Weekly petrochemical margins

Weekly average (US$/tonne) Ethylene - Naphtha HDPE - Naphtha (integrated) HDPE - Ethylene LDPE - Naphtha (integrated) LDPE - Ethylene Ethylene Glycol - Ethylene Propylene - Naphtha PP - Naphtha (integrated) PP - Propylene Benzene - Naphtha Styrene - (Bz+Ethylene) Polystyrene - Styrene PX - Naphtha PVC - Ethylene Butadiene - Naphtha
Source: Thomson Reuters Datastream

Quarterly average QTD 511 460 (51.3) 677 166 148 533 560 27 244 210 59 288 361 1383 Q110 % change 546 517 -29 734 188 202 504 550 46 245 171 109 328 356 1121 (6.4) (11.1) (79.2) (7.8) (11.8) (26.7) 5.7 1.8 (41.1) (0.4) 23.1 (46.3) (12.1) 1.5 23.3 6.8 7.8 0.0 5.3 0.0 (27.9) 5.7 4.1 (10.7) 2.4 (1.3) 50.5 7.5 0.0 2.4

Yearly average YTD 534 498 (36.1) 715 181 184 513 553 40 245 184 92 315 358 1224 2009 % change 286 520 234 582 296 123 344 480 136 140 134 150 432 358 433 86.7 (4.2) (115.5) 22.8 (39.0) 49.2 49.3 15.2 (70.9) 75.3 37.2 (38.2) (27.2) (0.2) 182.5

14-May-10 560 490 (70) 710 150 73 550 600 50 235 206 76 307 335 1,515

7-May-10 % change 524 454 (70) 674 150 101 520 576 56 229 209 51 286 335 1,479

Key developments
LG Chem remains confident about 2010 earnings performance, as well as success of automotive batteries and LCD glass We hosted a non-deal road show for LG Chem in Europe last week, and the management and IR team were confident about 2010 earnings performance, as well as the success of automotive batteries and LCD glass (in contrast to market concerns over execution risk). We highlight strong volume growth of polariser film and IT batteries as near-term catalysts, along with resilient petrochemical margin.

Nomura

17 May 2010

Oil & Gas/Chemicals | Asia

Cheng Khoo

Hanwha Chemical posted healthy 1Q10 earnings On 11 May, Hanwha Chemical posted a healthy set of earnings in 1Q10 as net profit turned to black q-q and grew by 20.5% y-y. Strong equity method gain from YNCC and stake sale of Korea Life helped on the non-operating side. Despite the higher ethylene price, strong demand and stable supply from YNCC led to sturdy results. Chlor-alkali expansion was completed in March and expected to fully kick-in from 3Q10.

Exhibit 17. Ethylene price and margin trend

1600 1400 1200 US$/t 1000 800 600 400 200 0 Apr-09 Jul-09 Oct-09 Jan-10 Apr-10 Naphtha

Exhibit 18. Propylene price and margin trend

1600 1400 1200 US$/t 1000 800 600 400 200 0 Apr-09 Jul-09 Oct-09 Jan-10 Apr-10 Naphtha

Ethylene-Naphtha
Source: Thomson Reuters Datastream

Ethylene

Propylene-Naphtha
Source: Thomson Reuters Datastream

Propylene

Exhibit 19. MEG price and margin trend

1600 1400 1200 US$/t 1000 800 600 400 200 0 Sep-08 Dec-08 Mar-09 Jun-09 Sep-09 Dec-09 Mar-10 MEG - Ethylene
Source: Thomson Reuters Datastream

Exhibit 20. PVC price and margin trend

1600 1400 1200 US$/t 1000 800 600 400 200 0 Sep-08 Dec-08 Mar-09 Jun-09 Sep-09 Dec-09 Mar-10 PVC - Ethylene
Source: Thomson Reuters Datastream

MEG

Ethylene

PVC

Ethylene

Exhibit 21. Benzene price and margin trend

1200 1000 800 US$/t 600 400 200 0 Apr-09 Jun-09 Aug-09 Oct-09 Dec-09 Feb-10 Apr-10 Benzene-Naphtha
Source: Thomson Reuters Datastream

Exhibit 22. Paraxylene price and margin trend

1400 1200 1000 US$/t 800 600 400 200 0 Apr-09 Jun-09 Aug-09 Oct-09 Dec-09 Feb-10 Apr-10 PX-Naphtha
Source: Thomson Reuters Datastream

Benzene

Naphtha

PX

Naphtha

Nomura

17 May 2010

Oil & Gas/Chemicals | Asia

Cheng Khoo

Stock price performance

Exhibit 23. Weekly best & worst performing stocks
12.0 10.0 8.0 6.0 WOW (%) 4.0 2.0 0.0 (2.0) (4.0) (6.0) ONGC Bharat Petroleum Corp Formosa Plastics S-OIL Honam Petro Shanghai Petro GAIL Cairn CNOOC Petrochina PTT Aromatics & Refining Petronet LNG Gujarat Gas Indian Oil Corp Formosa Petro PTT Chemical Reliance Ind Hindustan Petroleum Corp China BlueChem Hanwha Chems Nan Ya Plastics Sinopec PTT LG Chem PTT E&P Thai Oil (8.0) Indraprastha Gas Cheil Ind. Formosa Chems GS Holdings Gujarat State Petronet
-6m (1.4) (12.5) 8.1 (2.1) 4.5 26.1 12.3 (2.2) 15.1 46.0 24.1 (1.2) (2.2) (2.7) (2.2) 4.0 (14.8) (10.6) (0.5) 4.1 1.7 12.1 (6.2) 16.0 14.1 35.9 53.0 9.3 1.3 41.6 68.9 32.7 13.4 30.6

Source: Thomson Reuters Datastream

Exhibit 24. Price performance (1-week to 1-year)

Price Company Name Exploration & Production Petrochina ONGC CNOOC PTT E&P Cairn Oil Services COSL Natural Gas Transmission GAIL Gujarat State Petronet Petronet LNG Indraprastha Gas Gujarat gas Refining & Marketing Sinopec Reliance Ind. Formosa Petrochemical PTT Indian Oil Corporation S-Oil SK Energy Shanghai Petrochem Bharat Petroleum Corp. Thai Oil GS Holding Hindustan Petroleum Corp. PTT Aromatics & Refining Bloomberg 857 HK ONGC IN 883 HK PTTEP TB CAIR IN 2883 HK GAIL IN GUJS IN PLNG IN IGL IN GGAS IN 386 HK RIL IN 6505 TT PTT TB IOCL IN 010950 KS 096770 KS 338 HK BPCL IN TOP TB 078930 KS HPCL IN PTTAR TB Currency HK$ Rs HK$ Bt Rs HK$ Rs Rs Rs Rs Rs HK$ Rs NT$ Bt Rs Won Won HK$ Rs Bt Won Rs Bt NT$ Bt Won NT$ NT$ Won Won Won HK$ HK$ 14-May 8.76 1,045 12.88 146 291.30 10.22 427.80 90.70 82.15 236.20 286.80 6.02 1,044 81.70 254.00 308.7 53,100 109,000 2.88 548.95 47.00 35,850 333 29.00 77.40 104.00 134,500 62.40 67.90 295,500 88,200 16,750 3.95 4.90 Mkt. (US$ bn) 288.2 49.4 73.9 15.0 12.2 7.7 12.0 1.1 1.4 0.7 0.8 107.2 75.5 24.6 22.3 16.6 5.3 8.9 6.5 4.4 3.0 2.9 2.5 2.7 13.9 4.8 3.8 15.5 13.1 17.3 3.9 2.1 3.6 1.1 -1w 1.0 (0.0) 1.3 (1.4) 1.9 10.4 2.0 (2.0) 2.8 5.1 0.8 2.7 0.9 2.0 (0.8) 0.0 1.3 (6.0) 2.5 (0.2) (1.6) (3.0) (0.6) 3.6 0.8 0.0 2.7 1.3 2.1 6.1 4.3 3.7 5.9 4.3 -1m (6.2) 0.1 (5.6) 0.0 (3.9) (8.1) 4.3 (0.3) (2.7) 2.9 1.0 (10.1) (6.9) (3.4) (0.8) 8.6 (10.8) (12.5) (6.8) 8.1 (1.1) (14.2) 7.9 7.4 0.9 6.1 10.7 (6.3) (4.1) 17.5 22.8 12.0 (10.8) 0.0 % change -3m 1.7 (5.0) 5.7 10.6 10.8 (4.7) 4.0 0.3 13.1 11.5 12.7 1.7 2.9 3.7 14.9 (1.5) 1.3 3.3 1.8 (3.0) 14.6 (3.4) (4.5) 19.8 13.8 35.1 22.8 3.8 3.0 43.1 53.4 15.9 (10.2) 1.9 -6m (12.0) (11.7) 2.7 7.8 5.4 12.7 13.3 (1.3) 16.1 47.3 25.1 (11.7) (1.4) (1.3) 7.6 4.9 (8.1) (3.5) (11.1) 5.0 11.9 20.9 (5.3) 27.8 15.7 49.6 65.0 10.8 2.7 52.7 82.2 43.2 1.3 16.7 -1y 9.4 25.6 31.7 27.0 48.8 36.3 61.3 82.5 44.0 103.8 106.1 0.3 9.4 2.0 22.1 42.1 (11.2) 4.8 12.1 50.4 22.9 6.4 26.5 61.1 49.6 100.0 92.7 40.3 18.7 130.0 110.0 54.4 10.0 19.5 -1w (0.1) (1.4) 3.7 (1.4) 0.6 9.1 0.6 (3.3) 1.5 3.7 (0.6) 1.6 (0.4) (0.7) (0.8) (1.3) (1.5) (8.7) 1.3 (1.5) (1.6) (5.7) (1.9) 3.5 (1.9) (0.0) (0.2) (1.4) (0.6) 3.1 1.3 0.8 4.7 3.1 % change rel to underlying market -1m 3.0 5.0 6.4 (1.0) 0.8 0.9 9.4 4.5 2.0 7.9 6.0 (1.3) (2.4) 0.6 (1.8) 13.9 (8.7) (10.4) 2.3 13.4 (2.1) (12.2) 13.2 6.3 5.1 5.0 13.3 (2.4) (0.1) 20.3 25.7 14.7 (2.1) 9.8 -3m 2.4 (9.7) 15.0 0.4 5.3 (4.1) (1.2) (4.7) 7.5 6.0 7.1 2.3 (2.2) (0.7) 4.4 (6.4) (4.8) (2.9) 2.4 (7.8) 4.1 (9.2) (9.2) 8.8 9.0 22.6 15.4 (0.6) (1.3) 34.5 44.2 9.0 (9.7) 2.5 -1y (10.2) (12.2) 14.1 (13.1) 3.9 11.9 12.7 27.5 0.6 42.4 44.0 (17.6) (23.6) (16.5) (16.4) (0.7) (27.7) (14.6) (8.0) 5.1 (15.8) (13.4) (11.6) 10.4 22.5 37.0 56.9 14.9 (2.8) 87.3 71.0 25.7 (9.7) (1.9)

Upstream/Integrated Chemical Formosa Chemical & Fibre 1326 TT PTT Chemical PTTCH TB Honam Petrochemical 011170 KS Midstream Chemical Nanya Plastics Formosa Plastics LG Chem Cheil Industries Hanwha Chemical China Fertilizer Sinofert China BlueChem 1303 TT 1301 TT 051910 KS 001300 KS 009830 KS 297 HK 3983 HK

Source: Thomson Reuters Datastream

Nomura

17 May 2010

SK Energy

Sinofert

Oil & Gas/Chemicals | Asia

Cheng Khoo

Appendix 1: Valuation summary

Exhibit 25. Oil & chemicals universe valuation
Price Reporting Company Name Bloomberg Currency Exploration & Production Petrochina 857 HK Rmb ONGC ONGC IN Rs CNOOC 883 HK Rmb PTT E&P PTTEP TB Bt Cairn CAIR IN Rs Average Oil Services COSL 2883 HK Rmb Natural Gas Transmission GAIL GAIL IN Rs Gujarat State Petronet GUJS IN Rs Petronet LNG PLNG IN Rs Indraprastha Gas IGL IN Rs Gujarat gas GGAS IN Rs Average Refining & Marketing Sinopec 386 HK Rmb Reliance Ind. RIL IN Rs Formosa Petrochemical 6505 TT NT$ PTT PTT TB Bt Indian Oil Corporation IOCL IN Rs S-Oil 010950 KS Won SK Energy 096770 KS Won Shanghai Petrochem 338 HK Rmb Bharat Petroleum Corp. BPCL IN Rs Thai Oil TOP TB Bt GS Holding 078930 KS Won Hindustan Petroleum Corp. HPCL IN Rs PTT Aromatics & Refining PTTAR TB Bt Average Upstream/Integrated Chemical Formosa Chemical & Fibre 1326 TT NT$ PTT Chemical PTTCH TB Bt Honam Petrochemical 011170 KS Won Average Midstream Chemical Nanya Plastics 1303 TT NT$ Formosa Plastics 1301 TT NT$ LG Chem 051910 KS Won Cheil Industries 001300 KS Won Hanwha Chemical 009830 KS Won Average China Fertilizer Sinofert 297 HK Rmb China BlueChem 3983 HK Rmb ^ Local currency in million or Won and Rs in billion 14-May HK$ 8.76 Rs 1045 HK$ 12.88 Bt 146 Rs 291 Potential Target Price Upside (%) HK$ 13.70 Rs 1100 HK$ 16.50 Bt 180 Rs 370 56% 5% 28% 23% 27% Rating Buy Neutral Buy Buy Buy Mkt Cap. (US$ bn) 288.2 49.4 73.9 15.0 12.2 52 - Week High 10.48 1,258 14.06 163 1,258 Low 7.66 943 8.81 118 943 2008 114,453 198 44,375 42,461 8 Net Profit^ 2009 103,387 210 29,486 22,662 11 2010E 141,562 179 47,289 35,405 53 2011E 174,135 225 55,459 40,196 114 Dividend Yield (%) 2008 3.7% 3.1% 3.7% 3.8% 0.0% 2.9% 1.5% 1.6% 1.0% 2.1% 1.7% 0.5% 1.4% 1.9% 0.6% 1.5% 3.0% 1.0% 16.2% 1.8% 0.0% 1.3% 4.5% 2.8% 1.6% NA 3.0% 1.4% 4.9% 0.7% 2.4% 1.3% 2.5% 0.9% 0.9% 1.7% 1.5% 1.2% 2.4% 2009 2010E 2011E 3.3% 3.1% 3.1% 2.1% 0.1% 2.3% 1.6% 2.0% 1.6% 2.1% 1.7% 2.8% 2.1% 3.4% 0.7% 5.1% 4.0% 1.6% 5.6% 1.8% 3.5% 1.8% 7.1% 1.6% 1.5% 7.0% 3.5% 8.6% 3.7% 0.2% 4.2% 4.2% 7.0% 0.8% 0.9% 2.1% 3.0% 0.0% 2.4% 4.5% 3.1% 3.1% 3.0% 1.0% 2.9% 1.7% 2.3% 1.9% 2.4% 1.9% 1.0% 1.9% 3.8% 0.7% 4.7% 3.8% 1.9% 5.6% 1.8% 3.3% 1.8% 3.3% 1.9% 1.5% 4.2% 3.0% 8.7% 2.6% 0.2% 3.8% 6.4% 7.0% 0.9% 0.9% 2.1% 3.5% 1.2% 2.4% 5.5% 3.1% 3.6% 3.3% 2.1% 3.5% 1.9% 2.6% 1.9% 2.4% 2.1% 1.0% 2.0% 4.1% 0.7% 5.5% 5.1% 1.9% 5.6% 1.8% 3.6% 1.8% 3.8% 1.9% 0.6% 5.2% 3.2% 8.6% 2.4% 0.2% 3.7% 7.5% 8.0% 0.9% 0.9% 2.1% 3.9% 1.3% 2.9%

HK$ 10.22 Rs 428 Rs 91 Rs 82 Rs 236 Rs 287

HK$ 8.60 Rs 500 Rs 130 Rs 105 Rs 310 Rs 340

-16% 17% 43% 28% 31% 19%

Reduce Buy Buy Buy Buy Buy

7.7 12.0 1.1 1.4 0.7 0.8

12.24 439 103 86 237 294

6.74 276 48 57 121 139

3,102 28 1 5 2 2

3,135 31 4 4 2 2

3,180 36 5 5 3 2

3,526 41 5 6 3 2

HK$ 6.02 HK$ 8.20 Rs 1043.55 Rs 1,275.0 NT$ 81.70 NT$ 70.00 Bt 254 Bt 300 Rs 90.7 Rs 240 W 53,100 W 59,000 W 109,000 W 145,000 HK$ 2.88 HK$ 3.25 Rs 549.0 Rs 425.0 Bt 47.00 Bt 49.00 W 35,850 W 42,000 Rs 333.0 Rs 270.0 Bt 29.00 Bt 29.50

36% 22% -14% 18% 165% 11% 33% 13% -23% 4% 17% -19% 2%

Buy Buy Reduce Buy Reduce Neutral Buy Neutral Reduce Buy Buy Reduce Buy

107.2 75.5 24.6 22.3 16.6 5.3 8.9 6.5 4.4 3.0 2.9 2.5 2.7

7.15 1,180 87 279 342 64,200 134,000 3.93 650.75 52.50 42,450 417.20 30.00

5.52 874 72 209 223 50,200 93,000 2.52 403.30 30.50 28,400 280.90 16.50

28,525 150 15,193 51,706 1 446 NA (6,238) 6 224 112 11 NA

61,760 159 39,192 59,548 4 253 888 1,605 9 10,847 498 6 9,162

65,075 232 40,209 67,601 5 449 680 1,485 10 7,942 468 3 8,957

70,139 273 46,015 92,292 5 712 1,108 1,629 13 9,026 597 3 11,109

NT$ 77.40 Bt 104 W 134,500

NT$ 90.00 Bt 62 W 82,000

16% -40% -39%

Buy Reduce Reduce

13.9 4.8 3.8

79.50 112.00 145,000

46.26 40.50 68,100

6,098 11,739 (45)

29,440 6,802 822

42,712 9,086 550

41,909 8,356 676

NT$ 62.4 NT$ 76.0 NT$ 67.90 NT$ 79.00 W 295,500 W 270,000 W 88,200 W 73,000 W 16,750 W 14,000

22% 16% -9% -17% -16%

Buy Buy Buy Buy Neutral

15.5 13.1 17.3 3.9 2.1

67.40 71.30 295,500 88,200 17,450

39.81 53.27 131,500 42,250 10,300

9,386 19,709 946 157 41

16,404 27,533 1,620 127 437

34,628 32,784 1,580 209 334

40,639 37,254 1,830 282 396

HK$ 3.95 HK$ 4.90

HK$ 4.30 HK$ 6.00

9% 22%

Neutral Buy

3.6 2.9

5.52 5.58

3.29 3.78

1,913 1,608

(1,444) 1,608

1,876 1,452

2,173 1,780

Note: Ratings and price targets are as of the date of the most recently published report (http://www.Nomura.com) rather than the date of this document. Source: Thomson Reuters Datastream, Nomura estimates

Nomura

17 May 2010

Oil & Gas/Chemicals | Asia

Cheng Khoo

Exhibit 26. Oil & chemicals universe valuation

EPS Company Name Bloomberg Exploration & Production Petrochina 857 HK ONGC ONGC IN CNOOC 883 HK PTT E&P PTTEP TB Cairn CAIR IN Average Oil Services COSL 2883 HK Natural Gas Transmission GAIL GAIL IN Gujarat State Petronet GUJS IN Petronet LNG PLNG IN Indraprastha Gas IGL IN Gujarat gas GGAS IN Average Refining & Marketing Sinopec 386 HK Reliance Ind. RIL IN Formosa Petrochemical 6505 TT PTT PTT TB Indian Oil Corporation IOCL IN S-Oil 010950 KS SK Energy 096770 KS Shanghai Petrochem 338 HK Bharat Petroleum Corp. BPCL IN Thai Oil TOP TB GS Holding 078930 KS Hindustan Petroleum Corp. HPCL IN PTT Aromatics & Refining PTTAR TB PTT Chemical Upstream/Integrated Chemical Formosa Chemical & Fibre 1326 TT PTT Chemical PTTCH TB Honam Petrochemical 011170 KS Average Midstream Chemical Nanya Plastics 1303 TT Formosa Plastics 1301 TT LG Chem 051910 KS Cheil Industries 001300 KS Hanwha Chemical 009830 KS Average China Fertilizer Sinofert 297 HK China BlueChem 3983 HK Reporting Currency Rmb Rs Rmb Bt Rs 2008 0.63 92.35 0.99 12.84 4.26 2009 0.56 98.33 0.66 6.84 5.98 2010E 2011E EPS Growth (YoY%) 2009 -10% 6% -34% -47% NM 2010E 37% -15% 60% 56% 370% 2011E 23% 26% 17% 14% 113% 2008 13.6 11.3 9.7 11.1 NM 11.4 13.3 19.4 41.2 11.9 19.2 22.9 22.9 19.4 22.1 29.1 14.7 41.2 13.9 NA NM 31.3 561.7 30.3 19.6 NA 78.3 43.1 10.3 (94.6) (13.7) 43.0 20.3 20.1 28.0 56.5 33.6 13.3 12.5 P/E 2009 12.7 10.6 17.2 18.2 48.7 21.5 12.9 17.3 12.0 15.2 14.6 21.1 16.0 7.3 21.7 16.6 11.0 12.0 24.6 14.8 11.4 21.1 6.1 6.8 32.7 5.8 14.8 10.2 14.9 5.2 10.1 21.5 12.6 13.7 34.7 5.4 17.6 NM 12.5 2010E 10.0 12.5 10.7 13.7 10.4 11.4 12.7 15.0 10.6 11.2 12.0 16.5 13.1 7.1 14.9 19.5 10.6 10.6 13.8 9.1 12.3 19.9 12.1 7.3 33.8 9.6 13.9 10.3 17.1 7.8 11.7 14.1 12.6 13.0 21.1 7.0 13.6 13.0 13.7 2011E 8.1 9.9 9.1 12.0 4.9 8.8 11.5 13.4 10.3 10.3 10.6 14.8 11.9 6.6 12.8 16.9 7.8 10.3 8.7 7.6 11.2 15.2 10.6 5.7 42.0 7.7 12.6 10.5 18.6 6.3 11.8 12.1 11.2 11.2 15.6 5.9 11.2 11.2 11.2 2008 5.8 5.0 7.2 4.6 57.0 15.9 12.3 12.8 14.5 8.6 10.5 15.5 12.4 9.3 16.9 14.8 5.6 14.5 4.2 NA NM 12.7 12.7 55.2 11.5 NA 15.8 39.8 6.5 27.2 24.5 18.2 18.5 13.2 14.4 9.5 14.7 17.2 6.4 EV/EBITDA 2009 2010E 2011E 5.6 4.2 6.2 5.9 56.1 15.6 10.8 11.5 6.6 9.7 8.0 13.1 9.8 4.6 12.6 10.2 5.9 6.6 8.0 8.0 6.2 25.0 4.7 8.4 35.9 8.1 11.1 7.6 7.1 6.4 7.0 13.5 10.1 9.6 10.9 6.9 10.2 NM 6.4 4.8 5.0 5.6 4.8 7.2 5.5 8.2 10.4 6.0 8.2 6.4 10.0 8.2 4.2 8.5 12.0 5.9 6.0 8.0 7.7 6.2 12.6 6.7 8.0 20.8 8.1 8.8 9.9 9.0 6.1 8.3 13.6 10.6 9.7 10.8 6.7 10.3 12.1 5.7 4.4 4.0 4.7 4.5 2.9 4.1 7.2 9.4 5.3 8.5 5.4 8.7 7.4 3.9 7.2 11.3 4.6 5.3 6.0 6.7 6.0 11.0 5.7 5.8 21.2 6.7 7.8 10.2 8.7 4.9 7.9 12.1 10.3 8.2 9.4 5.6 9.1 10.3 4.5

0.77 0.95 83.58 105.40 1.06 1.24 10.69 12.13 28.10 59.94

Rmb Rs Rs Rs Rs Rs

0.69 22.10 2.20 6.91 12.32 12.53

0.70 24.80 7.54 5.39 16.18 13.58

0.71 28.44 8.52 7.31 19.70 17.39

0.78 32.02 8.84 7.97 22.26 19.42

1% 12% 243% -22% 31% 8%

1% 15% 13% 36% 22% 28%

11% 13% 4% 9% 13% 12%

Rmb Rs NT$ Bt Rs Won Won Rmb Rs Bt Won Rs Bt

0.33 47 1.64 18.29 2.20 3,827 9,604 (0.87) 18 0.04 1,185 17 NA

0.712 0.751 0.809 48 70 82 4.50 4.19 4.83 21.09 23.83 32.54 7.54 8.52 8.84 2,158 3,838 6,080 7,352 11,987 14,346 0.22 0.21 0.23 26 28 36 0.07 0.03 0.04 5,254 4,937 6,307 10 10 8 3.09 3.02 3.75

117% 2% 174% 15% 243% -44% NA NM 48% 59% 344% -40% NA

5% 45% -7% 13% 13% 78% 63% NM 6% NM -6% -3% -2%

8% 17% 15% 37% 4% 58% 20% 10% 31% 14% 28% -19% 24%

NT$ Bt Won

1.47 7.84 (1,421)

5.15 7.51 7.36 3.59 6.07 5.58 25,813 17,254 21,208

250% -54% NM

46% 69% NM

-2% -8% 23%

NT$ NT$ Won Won Won

1.39 3.51 14,690 3,149 296

2.06 4.42 5.18 4.51 5.37 6.09 21,528 22,806 26,425 2,539 4,189 5,643 3,118 2,381 2,824

48% 28% 47% -19% 952%

115% 19% 6% 65% NM

17% 13% 16% 35% 19%

Rmb Rmb

0.27 0.35

(0.21) 0.35

0.27 0.31

0.31 0.39

-175% 0%

NM -10%

NM 23%

Source: Thomson Reuters Datastream, Nomura estimates

Nomura

10

17 May 2010

Oil & Gas/Chemicals | Asia

Cheng Khoo

Exhibit 27. Oil & chemicals universe valuation

P/BV Bloomberg Exploration & Production Petrochina 857 HK ONGC ONGC IN CNOOC 883 HK PTT E&P PTTEP TB Cairn CAIR IN Average Oil Services COSL 2883 HK Natural Gas Transmission GAIL GAIL IN Gujarat State Petronet GUJS IN Petronet LNG PLNG IN Indraprastha Gas IGL IN Gujarat gas GGAS IN Average Refining & Marketing Sinopec 386 HK Reliance Ind. RIL IN Formosa Petrochemical 6505 TT PTT PTT TB Indian Oil Corporation IOCL IN S-Oil 010950 KS SK Energy 096770 KS Shanghai Petrochem 338 HK Bharat Petroleum Corp. BPCL IN Thai Oil TOP TB GS Holding 078930 KS Hindustan Petroleum Corp. HPCL IN PTT Aromatics & Refining PTTAR TB PTT Chemical Upstream/Integrated Chemical Formosa Chemical & Fibre 1326 TT PTT Chemical PTTCH TB Honam Petrochemical 011170 KS Average Midstream Chemical Nanya Plastics 1303 TT Formosa Plastics 1301 TT LG Chem 051910 KS Cheil Industries 001300 KS Hanwha Chemical 009830 KS Average China Fertilizer Sinofert 297 HK China BlueChem 3983 HK 2008 Rmb Rs Rmb Bt Rs 2.0 2.4 2.7 3.5 1.7 2.5 2.1 3.7 4.2 3.1 4.8 5.1 4.2 1.7 2.6 3.9 2.0 4.2 1.8 NA 1.4 1.5 2.1 1.0 1.1 NA 2.1 2.0 1.3 1.5 1.6 2.0 2.3 3.9 2.7 1.0 2.4 2.5 2.0 2009 2010E 2011E 1.5 2.1 2.9 2.9 1.6 2.2 1.9 3.3 3.3 2.8 3.9 4.7 3.6 1.2 2.3 3.1 1.4 3.3 1.6 1.3 1.2 1.4 1.1 1.0 1.0 0.9 1.6 1.3 0.8 1.3 1.1 1.4 1.5 5.0 2.2 0.9 2.2 2.0 2.0 1.5 1.9 2.5 2.9 1.4 2.0 1.7 2.9 2.6 2.4 3.2 3.8 3.0 1.1 2.0 3.3 1.5 2.6 1.5 1.2 1.1 1.4 1.4 0.9 1.0 1.3 1.6 1.8 1.5 1.1 1.5 1.8 1.8 3.5 2.4 0.8 2.1 1.7 1.8 1.4 1.7 2.1 2.5 1.1 1.8 1.5 2.6 2.2 2.0 2.6 3.2 2.5 1.0 1.8 3.2 1.3 2.2 1.4 1.0 1.1 1.3 1.3 0.8 1.0 1.2 1.4 1.8 1.4 1.0 1.4 1.8 1.7 2.7 2.1 0.7 1.8 1.5 1.6 2008 Net Debt/Equity(%) 2009 2010E 2011E 2008 14% 23% 28% 35% 3% 21% 16% 20% 11% 29% 27% 25% 22% 9% 15% 11% 12% 11% 12% NA -46% 5% 7% 4% 5% NA 4% 4% 14% -2% 5% 3% 9% 22% 9% 2% 9% 7% 16% ROE(%) 2009 12% 21% 17% 16% 3% 14% 14% 20% 31% 19% 30% 24% 25% 16% 18% 20% 12% 31% 7% 9% 11% 7% 16% 14% 3% 16% 14% 14% 5% 27% 16% 5% 14% 35% 7% 17% 16% -4% 16% 2010E 15% 16% 23% 23% 15% 18% 13% 20% 27% 23% 29% 26% 25% 15% 15% 17% 13% 27% 11% 14% 9% 7% 11% 13% 3% 14% 13% 18% 9% 16% 14% 13% 14% 31% 11% 12% 16% 9% 13% 2011E 17% 18% 23% 22% 26% 21% 13% 20% 23% 21% 27% 24% 23% 15% 15% 19% 16% 23% 17% 15% 10% 9% 12% 15% 2% 16% 14% 17% 8% 17% 14% 15% 16% 28% 14% 12% 17% 9% 14% 2008 13% 22% 35% 24% 3% 19% 13% 23% 9% 13% 26% 20% 18% 9% 8% 8% 9% 9% 10% NA -24% 5% 7% 3% 6% NA 4% 4% 13% -2% 5% 4% 9% 18% 7% 1% 8% 9% 24% ROCE (%) 2009 11% 19% 21% 11% 4% 13% 8% 20% 19% 13% 28% 18% 20% 13% 8% 12% 9% 19% 5% 5% 9% 0% 12% 12% -1% 9% 9% 11% 6% 24% 14% 6% 13% 30% 5% 12% 13% -4% 24% 2010E 13% 15% 29% 15% 15% 17% 8% 18% 17% 13% 28% 20% 19% 12% 12% 12% 9% 17% 8% 8% 8% 3% 9% 11% 1% 9% 9% 14% 8% 13% 12% 11% 15% 28% 9% 9% 14% 9% 16% 2011E 14% 17% 29% 15% 31% 21% 8% 17% 16% 13% 26% 19% 18% 12% 12% 14% 11% 16% 12% 10% 8% 4% 10% 14% 1% 11% 10% 14% 7% 15% 12% 13% 17% 26% 12% 10% 15% 10% 17%

12% 17.4% 21.2% 27.2% Net Cash Net Cash Net Cash Net Cash Net Cash Net Cash Net Cash Net Cash Net Cash 9.1% 2% 6% Net Cash 1.1% Net Cash Net Cash

Rmb Rs Rs Rs Rs Rs

123%

125%

124%

104%

Net Cash 5% 17% 22% 87% 78% 62% 44% 82% 91% 123% 144% Net Cash Net Cash Net Cash Net Cash Net Cash Net Cash Net Cash Net Cash

Rmb Rs NT$ Bt Rs Won Won Rmb Rs Bt Won Rs Bt

70% 43% 101% 41% 87% 19% NA 68% 87% 70% 14% 206% NA

56% 30% 66% 58% 78% 38% 72% 62% 78% 51% 18% 200% 124%

50% 45% 11% Net Cash 48% 37% 48% 34% 62% 44% 39% 39% 58% 44% 58% 54% 62% 44% 37% 24% 11% 3% 223% 233% 101% 79%

NT$ Bt Won

44% 24% 6%

32% 34% 24%

27% 24% 13%

28% 15% 4%

NT$ NT$ Won Won Won

42% 39% 21% 42% 46%

34% 25% 12% 25% 35%

26% 23% 12% 25% 29%

26% 21% 2% 16% 21%

Rmb Rmb

64% 66% 56% 50% Net Cash Net Cash Net Cash Net Cash

Source: Thomson Reuters Datastream, Nomura estimates

Asia Oil & Gas/Chemicals Research Team

Name Cheng Khoo Michael Lo Xavier Grunauer Yong Liang Por Gordon Wai Cindy Park Anil Sharma Ravikumar Adukia Chris Chang Saurabh Bharat Sanat Satyan Sector/country coverage Regional Head, Asia, & China Oil Market Australia Taiwan, Thailand China Korea India Associate Associate Associate Associate Telephone +852 2252 6180 +852 2252 6225 +852 2536 1838 +852 2252 6220 +852 2252 6176 +822 3783 2324 +91 22 4037 4338 +91 22 6723 5787 +822 3783 2316 +91 22 3053 2835 +91 22 6723 4076 Email cheng.khoo@nomura.com michael.lo@nomura.com xavier.grunauer@nomura.com yongliang.por@nomura.com gordon.wai@nomura.com cindy.park@kr.nomura.com anil.sharma.1@nomura.com ravikumar.adukia@nomura.com chris.chang@nomura.com saurabh.bharat@nomura.com sanat.satyan@nomura.com

Nomura

11

17 May 2010

Oil & Gas/Chemicals | Asia

Cheng Khoo

Price target valuation methodologies

Bharat Petroleum Corporation: Our 12-month price target of INR425 is based on 1.0x the stocks FY12F book value per share. Cairn India: We value Cairn India on a NAV basis. We calculate the NAV of its key fields Mangala, Bhagyam and Aishwariya (under development) and Rageshwari and Saraswati (FDP approved) using the discounted cashflow (DCF) methodology. Our NAV for the Mangala, Bhagyam and Aishwariya and Rageshwari and Saraswati field is INR276/share. We value the Ravva and Cambay blocks at INR7/share and INR2/share, respectively. We value Cairn's 10% share in the 2P reserves in the KG-DWN-98/2 block at a conservative US$6/boe. We value recoverable resources (140mmboe now) in the other 20 fields at US$6/boe and prospective resources of 1.76bboe (net of recoverable resources) at US$1/boe. We also assign a value of US$6/boe to exploration upside (prospective recoverable resources of 250mmboe Cairns share of 175mmboe). Our NAV for Cairn is INR369/share. Our PT for Cairn India is INR370. Cheil Industries: Our price target of W73,000 (under review with an upward bias) is pegged at FY11F P/BV of 1.7x, the peak cycle multiple of FY05-09. We use FY05-09 as our benchmark period, since this was when the electronic materials business started to visibly deliver sales and earnings growth. China BlueChem: Our price target of HK$6.00 is derived from an average FY10F11F ROACE of 16.2% and a WACC of 7.9%, assuming a risk-free rate of 2.5%, an equity risk premium of 5.5%, a beta of 1.0, a cost of equity of 8.0% and a cost of debt of 4.5%. COSL: Our price target is based on ROACE/WACC (7.7%/6.5%). CNOOC: Our price target of HK$16.50 for CNOOC is based on the average of FY10F and FY11F ROACE/WACC (28.6%/10%). Our current WACC of 10% is based on a risk-free rate of 2.5%, a risk premium of 6.3% and beta of 1.3. Formosa Chemical & Fibre: Our PT is based on the sum-of-the-parts analysis, which values FCFCs core business at 2.1x EV/IC (an average FY10-11F ROIC of 15.3%; WACC of 8.6%), investments in the Formosa Group at our PTs, other listed investments at market prices and unlisted investments at book value. Formosa Petrochemical: Our price target of NT$70 is based on ROCE of 15% and WACC of 8.5%. Formosa Plastics: Our PT is based on sum-of-the-parts analysis that values FPC's core business at 2.1x EV/IC (an average FY10-12F ROIC of 17.2% and a WACC of 8.5%), investments in the Formosa Group at our PTs, other listed investments at market prices and unlisted investments at book value. GAIL: We have used sum-of-the-parts as our primary tool to value GAILs diversified business. We have valued its gas transmission business (including gas trading) at 10x its FY12F EBITDA. We have assigned a multiple of 7x FY12F EBITDA for petrochemical and 6x FY12F estimated EBITDA for the LPG business. We also value E&P upside at a conservative INR14/share. Our PT is INR500. GS Holdings: Our PT (under review with an upward bias) is based on an FY10F P/BV of 1.1x, which represents the mid-cycle multiple (average of FY04-09F). Our FY10F EPS forecast shows a 6% y-y fall, mainly on a higher tax rate assumption for this year. We estimate pre-tax earnings will grow by 4% y-y, but this may change depending on the impact of new accounting methods introduced in 4Q09. Gujarat Gas: We use DCF methodology to value GGCL. We assume a WACC of 10.8% and a long-term growth rate of 2.5% in our valuation. We assume volume growth of about 19% for 2010F and 11% in 2011F. Thereafter we build annual volume growth of 5-6% in our estimates. We believe that GGCL would be able to

Nomura

12

17 May 2010

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sustain its current EBITDA margins, especially during the marketing exclusivity period. We estimate EBITDA margins of 20-22% over FY10-14F. Our DCF-based price target is INR340/share. Gujarat State Petronet: We use a DCF methodology to value GSPL. We use a WACC of 10.4% and terminal growth rate of 2.5%. We estimate transmission volume growth of 22% in FY11F and lower 7-10% in FY12-14F and 2.5% thereafter. We do not expect a sharp cut in the overall tariff post the application of new PNGRB regulations. However, on a conservative basis, we assume a tariff decline of 14% by FY13. Our DCF-based price target is INR130. Hanwha Chemical: Our price target of W14,000 is based on 0.64x FY10F P/B, a mid-cycle multiple seen in FY99-08. Hindustan Petroleum Corporation: Our 12-month price target of INR270 is based on 0.8x the stocks P/BV per share for FY12F. Honam Petrochemical: Our PT of W82,000 is based on 0.7x FY10F P/BV, which represents a trough- to mid-cycle multiple seen in FY99-08. Indian Oil Corporation: Our 12-month price target of INR240 is based on 1.0x P/BV multiple to FY12F book value per share. Indraprastha Gas: We use DCF methodology to value IGL. We assume a WACC of 11% and long-term growth rate of 2.5% and we expect EBITDA margins to fall gradually as more industrials volumes are added and the share of market-priced natural gas increases in the gas supply portfolio. Our DCF-based price target is INR310/share. LG Chem: We derive our PT of W270,000 using SOTP methodology, where we forecast the enterprise value of the petrochemicals and electronic material (EM) businesses by applying different FY10F EV/EBITDA multiples. For the EM division, we apply a target multiple of 10.0x, which represents a 20% premium to the Korea tech sector average. For the petrochemicals division, we apply a target multiple of 6.9x, which represents the stock's historical peak-cycle multiple. We maintain our BUY rating. Nan Ya Plastics: Our PT of NT$76 is based on sum-of-the-parts analysis that values NYP's core business at 1.9x EV/IC (an average FY10F-11F ROIC of 15.8% an WACC of 8.5%), investments in the Formosa Group at our PT, other listed investments at market price and unlisted investments at 1.5x P/B. ONGC: Based on an ROIC of 16.3% and a WACC of 11.7%, we value ONGC's consolidated business at 1.5x invested capital, or INR948/share. Our net asset value for ONGC is INR1,096/share. Our price target is INR1,100/share. PetroChina: Our price target of HK$13.70 is derived from the sum of: 1) HK$10.90 per share, based on an average 2010-11F ROACE/WACC (13%/8.1%), and; 2) HK$2.80 of our estimated oil and gas discoveries' value. Petronet LNG: We use a discounted cash flow (DCF) methodology to value Petronet LNG. Dahej Terminal accounts for bulk of the PLNGs value. We assume that outlook on spot volumes will remain bleak for the rest of 2010 and part of 2011. We assume Dahej volumes will gradually increase from averages of 8.3MMT in FY11F to 10MMT in FY15F. We conservatively assume a peak volume of 10MMT in our DCF valuation. We assume a WACC of 9.5% and we do not assume any growth rate in our terminal valuation. In our DCF valuation, we conservatively start Kochi operations from FY15. We also remain conservative in the capacity utilisation at Kochi and build in peak capacity utilisation of 75%. PTT: We value PTT using a SOTP that is based on: marking PTT's listed investments at market price, PTT's natural gas business on a DCF-WACC of 10%, oil marketing business at 9x FY10F EBITDA, and unlisted investments at BV.

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PTT Aromatics & Refining: Our PT of THB29.50 (under review with an upward bias) is based on an ROCE of 10.5% and a WACC of 8.5%. PTT Chemical: Our price target of THB62 is based on an EV/IC target multiple of 0.8x, which is derived from an ROIC of 7.6% (previously 6.6%) and WACC of 10%. PTTEP: Our price target of THB180 is based on a target EV/CE multiple of 1.9x, which is derived from a ROCE of 18% and a WACC of 10%. Reliance Industries: We use SOTP to value RILs different businesses. For its core businesses, we use EV/EBITDA multiples. We use a 7x FY12F EV/EBITDA for its refining and petrochemical business. We use DCF to value the companys new E&P business. Our PT is INR1,275. Sinofert: Our target price of HK$4.30 is based on the stocks average FY10F and FY11F ROACE/WACC (9.6%/5.8%). Sinopec: Our price target of HK$8.20 is based on ROACE of 12.3% and WACC of 9.2%. Sinopec Shanghai Petrochemical: Our price target of HK$3.25 is based on average FY10/11E ROACE/WACC (8.2%/6.9%). The stock is trading at 13x FY10E P/E, 6.4x 10E EV/EBITDA, 1.2x FY10E P/BV and an ROACE of 7.7%. We think this is in line with its historical average (2002-08) of 13x P/E and 6.3x EV/EBITDA. SK Energy: Our price target of W145,000 is based on a FY10F P/BV of 1.5x. Our target P/BV represents the mid-cycle multiple over FY07-09. We use the FY07-09 average since SKE split and re-listed in July 2007. S-Oil Corp: Our PT of W59,000 is based on FY10F P/BV of 1.7x, which is the trough cycle multiple over FY07-09. Thai Oil: Our PT is (under review) based on an ROCE of 9.7% and WACC of 8.4%.

Risks to our investment view

Bharat Petroleum Corporation: The key upside risk is a significant change in government policy on fixing retail prices. Complete deregulation would be a significant positive in the long term and could lead to a re-rating. Even partial deregulation, but with a clear policy on sharing of any under-recoveries, would also be positive for BPCL. A significant and sustained decline in global oil prices would also be positive, since losses on retail fuels decline sharply at low oil prices. Refining margins that are higher than our estimates would be a positive for BPCL. Cairn India: Delays in ramp-up of production; lower oil prices and higher discounts and higher cess than our assumptions. Cheil Industries: Risks to our earnings and price target include 1) worse-than expected petrochemical cycle; 2) apparel with management laying less emphasis on margins; and 3) execution of new electronic materials, which may increase impairment costs. China BlueChem: Risks to our investment view include: 1) Weak urea and phosphate demand; 2) influx of methanol from the Middle East; and 3) higher-than expected natural gas price hikes. COSL: Upside risks: 1) continued positive momentum in the oil and equity markets and 2) increased investor focus on longer-term growth prospects after completion of expansion. CNOOC: Higher-than-expected crude oil prices would present an upside risk to our earnings estimates for FY10F. Downside risks include: 1) rising operating costs, and; 2) lower-than-budgeted production. Formosa Chemical & Fibre: Key risks to our bullish outlook include volatile crude prices, volatile aromatics margins and plant mechanical failure.

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Formosa Plastics: Key risks to our bullish outlook include volatile crude prices, volatile chemical margins and plant mechanical failure. Formosa Petrochemical: Upside risks to our price target could arise from higherthan-expected refining or olefin margins. GAIL: Key downside risks: Lower transmission volume growth, a sharp cut in overall tariffs by the regulator (we do not assume any cut), a sharper polymer price decline than our assumption and higher subsidy burden than our assumptions. GS Holdings: PT risks include 1) volatile crude prices; 2) volatile refining margins; 3) uncertain aromatic margins; and 4) the uncertain economic outlook. Gujarat Gas: Key risks include: 1) Gas supply visibility is critical to GGCLs business. Any supply side constraints and consequent lower-than-expected volume ramp-up can negatively impact valuations. 2) Under the new PNGRB regulations, the regulator can only control network tariffs (based on the 14% post-tax ROCE principle) and not end-product pricing (as the government has not yet notified the natural gas under PNGRB regulations). Therefore, we estimate that GGCL will maintain its current EBITDA margins. Any sharp cut in the overall tariff once regulations begin to apply would negatively affect our valuations. 3) A sharper-thanexpected increase in the gas prices would adversely impact our valuations. 4) Industrial slowdowns in the firms core operating areas; a slowdown in CNG conversions and new PNG connections. 5) Rupee depreciation. Gujarat State Petronet: Downside risks to our investment view include 1) Lowerthan-expected growth in transmission volumes. 2) A sharp cut in the transmission tariff by the PNGRB post application of new regulations. 3) An eventually higher social contribution as per the directives of the Gujarat government. In our estimates, we do not factor any outgoing here. Hanwha Chemical: Upside risks to our price target may emerge if earnings strength persists into 1H10F. This could be caused by: 1) continued restocking in China, 2) continued delays in planned capacity from China and the Middle East and 3) under-utilisation of plants as producers choose to lower rates for strategic reasons. Downside risks may come from a worse-than-expected macro environment that could hurt petrochemical demand. Also, risks associated with value destructive financial support to affiliate companies may result in de-rating. Hindustan Petroleum Corporation: The key upside valuation risk, in our view, is a significant change in the government policy on fixing retail prices. We believe complete deregulation would be a big positive in the long term and could lead to a re-rating of the stock. Even partial deregulation, but with a clear policy on sharing of any under-recoveries, should also be positive for HPCL. A significant and sustained decline in global oil prices is also likely to be a positive, since losses on retail fuels decline sharply at low oil prices. Also, refining margins that are higher than our estimates would be positive for HPCL, in our view. Honam Petrochemical: Upside risks to our PT may emerge if earnings strength persists into 1H10F. This could be caused by: 1) continued re-stocking by China; 2) continued delays in planned capacity from China and the Middle East, and; 3) under-utilisation of plants as producers choose to lower rates for strategic reasons. Furthermore, if HPC acquires assets that enhance scale materially, its multiples could be re-rated. Indian Oil Corporation: The key upside valuation risk is a significant change in government policy on fixing retail prices. Complete deregulation would be a big positive in the long term and could lead to a re-rating of the stock. Even partial deregulation, but with a clear policy on sharing of any under-recoveries, would also be positive for IOCL. A significant and sustained decline in global oil prices would

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also be a positive, since losses on retail fuels decline sharply at low oil prices. Also, refining margins that are higher than our estimates would be positive for IOCL. Indraprastha Gas: Key risks include: 1) Under the new PNGRB regulations, the regulator can only control network tariff (based on 14% post tax ROCE principle) and not the end-product pricing. Therefore, we do not build in any tariff cut, especially during the three-year exclusivity period that ends in January 2012. Any sharp cut in the overall tariff would negatively impact our valuations. 2) A sharperthan-expected increase in gas prices would adversely impact our valuations. 3) Slowdown in CNG conversions and new PNG connections. LG Chem: Downside risks could stem from worse-than-expected petrochemical and LCD cycles, which could dampen the company's FY10F earnings. Nan Ya Plastics: Key risks to our bullish outlook include volatile ethylene prices, volatile DRAM profitability and plant mechanical failure. ONGC: Key downside risks The higher-than-expected subsidy sharing would remain a key downside risk, in our view. Any sharp decline in the domestic oil and gas production can also have a negative impact. A stronger rupee can also pose a downside risk. Key upside risks A lower-than-expected subsidy burden, gas price increases and rupee depreciation. PetroChina: Downside risks include: 1) lower-than expected oil product prices; 2) chemical down cycle; and 3) government regulatory risks. Petronet LNG: Key downside risks to our valuation include: 1) Domestic gas availability has increased significantly over the last year. Spot volumes have already dried up. Although RasGas second 2.5mtpa tranche gives growth in FY11, additional spot volumes would be key drivers of PLNGs profitability. Lower-thanexpected spot volumes could significantly impair profitability and valuations. 2) The Dahej off-take agreement provides for 5% annual rises in the regasification charges. Although we believe we are conservative in our assumptions of regasification charges, any sharp cut could have a negative impact on profitability and valuations. 3) PLNGs Kochi terminal is under construction and execution delays and cost overruns could hurt our valuation of the Kochi terminal. 4) Sensitivity of earnings to key variables LT LNG volumes, spot volumes, re-gas charges and marketing margins. PTT: The key risks to our investment case are volatile crude prices, further delays to the start-up of new gas plants and additional costs related to the repairs and clean-up of the Montara field. PTT Aromatics & Refining: Downside risks to our price target could arise from weaker-than-expected refining or aromatic margins, or if there is a breakdown in the proposed merger process. PTT Chemical: Key investment risks include volatile crude prices, volatile chemical margins, plant mechanical failure and delays in commissioning new projects. PTTEP: PTTEPs earnings are sensitive to crude oil price changes. According to our sensitivity analysis, each US$10/bbl change to our LT crude forecast would change our PT by 19%. Other significant risk is the lingering uncertainty regarding the Montara incident. Reliance Industries: 1) Deterioration in refining margins and sharper-thanexpected decline in petrochemical margins; 2) delays in ramp-up of KG-D6 volume; and 3) rupee appreciation against the US dollar. Sinofert: Upside risk: Higher-than-expected fertiliser prices, natural disasters and unexpected government policy changes to support the industry. Downside risk: Lower-than-expected fertiliser prices, gross profit margin squeeze owing to weak

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fertiliser prices, government policy change on export tariff to curb the fertiliser price rally and potential share placement. Sinopec: Downside risks: 1) rising inflation; 2) chemical down-cycle, and 3) resource tax. Upside risks: 1) potential change in the oil product pricing mechanism and 2) lifting the windfall tax hurdle rate. Sinopec Shanghai Petrochemical: Upside risks include 1) potential privatisation by parent Sinopec at >2x P/BV, and 2) oil product price hikes, which would boost sentiment and stock performance. Downside risks include 1) lower-than-expected oil product price hikes, 2) crude oil prices exceeding US$80/bbl, which would likely intensify regulatory risks, and 3) petrochemical down-cycle. SK Energy: Risks include crude prices and volatile refining margins which may be dictated by the degree of consumption and trade flow of China. S-Oil: Risks include 1) volatile crude prices; 2) volatile refining margins; 3) uncertain aromatic margins; and 4) the uncertain economic outlook. Thai Oil: Downside risks to our price target could arise from weaker-than-expected refining or aromatic margins, or a sharp decline in crude prices.

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Any Authors named on this report are Research Analysts unless otherwise indicated
ANALYST CERTIFICATIONS
Each research analyst identified on the cover page hereof certifies that all of the views expressed in this report by such analyst accurately reflect his or her personal views about the subject securities and issuers. In addition, each research analyst identified on the cover page hereof hereby certifies that no part of his or her compensation was, is, or will be, directly or indirectly related to the specific recommendations or views that he or she has expressed in this research report, nor is it tied to any specific investment banking transactions performed by Nomura Securities International, Inc., Nomura International plc or any other Nomura Group company.

ISSUER SPECIFIC REGULATORY DISCLOSURES

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Nomura Japanese Equity Research is available electronically for clients in the US on NOMURA.COM, REUTERS, BLOOMBERG and THOMSON ONE ANALYTICS. For clients in Europe, Japan and elsewhere in Asia it is available on NOMURA.COM, REUTERS and BLOOMBERG. Important disclosures may be accessed through the left hand side of the Nomura Disclosure web page http://www.nomura.com/research or requested from Nomura Securities International, Inc., on 1-877865-5752. If you have any difficulties with the website, please email grpsupport@nomura.com for technical assistance. The analysts responsible for preparing this report have received compensation based upon various factors including the firm's total revenues, a portion of which is generated by Investment Banking activities.

Distribution of Ratings:
Nomura Global Equity Research has 1,884 companies under coverage. 48% have been assigned a Buy rating which, for purposes of mandatory disclosures, are classified as a Buy rating; 34% of companies with this rating are investment banking clients of the Nomura Group*. 36% have been assigned a Neutral rating which, for purposes of mandatory disclosures, is classified as a Hold rating; 46% of companies with this rating are investment banking clients of the Nomura Group*. 14% have been assigned a Reduce rating which, for purposes of mandatory disclosures, are classified as a Sell rating; 8% of companies with this rating are investment banking clients of the Nomura Group*. As at 31 March 2010. *The Nomura Group as defined in the Disclaimer section at the end of this report.

Explanation of Nomura's equity research rating system in Europe, Middle East and Africa, US and Latin America for ratings published from 27 October 2008:
The rating system is a relative system indicating expected performance against a specific benchmark identified for each individual stock. Analysts may also indicate absolute upside to price target defined as (fair value - current price)/current price, subject to limited management discretion. In most cases, the fair value will equal the analyst's assessment of the current intrinsic fair value of the stock using an appropriate valuation methodology such as discounted cash flow or multiple analysis, etc. Stocks: A rating of "1", or "Buy", indicates that the analyst expects the stock to outperform the Benchmark over the next 12 months. A rating of "2", or "Neutral", indicates that the analyst expects the stock to perform in line with the Benchmark over the next 12 months. A rating of "3", or "Reduce", indicates that the analyst expects the stock to underperform the Benchmark over the next 12 months. A rating of "RS-Rating Suspended", indicates that the rating and target price have been suspended temporarily to comply with applicable regulations and/or firm policies in certain circumstances including when Nomura is acting in an advisory capacity in a merger or strategic transaction involving the company. Benchmarks are as follows: United States/Europe: Please see valuation methodologies for explanations of relevant benchmarks for stocks (accessible through the left hand side of the Nomura Disclosure web page: http://www.nomura.com/research); Global Emerging Markets (ex-Asia): MSCI Emerging Markets ex-Asia, unless otherwise stated in the valuation methodology. Sectors: A "Bullish" stance, indicates that the analyst expects the sector to outperform the Benchmark during the next 12 months. A "Neutral" stance, indicates that the analyst expects the sector to perform in line with the Benchmark

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during the next 12 months. A "Bearish" stance, indicates that the analyst expects the sector to underperform the Benchmark during the next 12 months. Benchmarks are as follows: United States: S&P 500; Europe: Dow Jones STOXX 600; Global Emerging Markets (ex-Asia): MSCI Emerging Markets ex-Asia.

Explanation of Nomuras equity research rating system for Asian companies under coverage ex Japan published from 30 October 2008 and in Japan from 6 January 2009:
Stocks: Stock recommendations are based on absolute valuation upside (downside), which is defined as (Price Target Current Price) / Current Price, subject to limited management discretion. In most cases, the Price Target will equal the analysts 12-month intrinsic valuation of the stock, based on an appropriate valuation methodology such as discounted cash flow, multiple analysis, etc. A "Buy" recommendation indicates that potential upside is 15% or more. A "Neutral" recommendation indicates that potential upside is less than 15% or downside is less than 5%. A "Reduce" recommendation indicates that potential downside is 5% or more. A rating of "RS" or "Rating Suspended" indicates that the rating and target price have been suspended temporarily to comply with applicable regulations and/or firm policies in certain circumstances including when Nomura is acting in an advisory capacity in a merger or strategic transaction involving the subject company. Stocks labelled as "Not rated" or shown as "No rating" are not in Nomura's regular research coverage. Sectors: A "Bullish" rating means most stocks in the sector have (or the weighted average recommendation of the stocks under coverage is) a positive absolute recommendation. A "Neutral" rating means most stocks in the sector have (or the weighted average recommendation of the stocks under coverage is) a neutral absolute recommendation. A "Bearish" rating means most stocks in the sector have (or the weighted average recommendation of the stocks under coverage is) a negative absolute recommendation.

Explanation of Nomura's equity research rating system in Japan published prior to 6 January 2009 (and ratings in Europe, Middle East and Africa, US and Latin America published prior to 27 October 2008):
Stocks: A rating of "1", or "Strong buy", indicates that the analyst expects the stock to outperform the Benchmark by 15% or more over the next six months. A rating of "2", or "Buy", indicates that the analyst expects the stock to outperform the Benchmark by 5% or more but less than 15% over the next six months. A rating of "3", or "Neutral", indicates that the analyst expects the stock to either outperform or underperform the Benchmark by less than 5% over the next six months. A rating of "4", or "Reduce", indicates that the analyst expects the stock to underperform the Benchmark by 5% or more but less than 15% over the next six months. A rating of "5", or "Sell", indicates that the analyst expects the stock to underperform the Benchmark by 15% or more over the next six months. Stocks labeled "Not rated" or shown as "No rating" are not in Nomura's regular research coverage. Nomura might not publish additional research reports concerning this company, and it undertakes no obligation to update the analysis, estimates, projections, conclusions or other information contained herein. Sectors: A "Bullish" stance, indicates that the analyst expects the sector to outperform the Benchmark during the next six months. A "Neutral" stance, indicates that the analyst expects the sector to perform in line with the Benchmark during the next six months. A "Bearish" stance, indicates that the analyst expects the sector to underperform the Benchmark during the next six months. Benchmarks are as follows: Japan: TOPIX; United States: S&P 500, MSCI World Technology Hardware & Equipment; Europe, by sector Hardware/Semiconductors: FTSE W Europe IT Hardware; Telecoms: FTSE W Europe Business Services; Business Services: FTSE W Europe; Auto & Components: FTSE W Europe Auto & Parts; Communications equipment: FTSE W Europe IT Hardware; Ecology Focus: Bloomberg World Energy Alternate Sources; Global Emerging Markets: MSCI Emerging Markets ex-Asia.

Explanation of Nomura's equity research rating system for Asian companies under coverage ex Japan published prior to 30 October 2008:
Stocks: Stock recommendations are based on absolute valuation upside (downside), which is defined as (Fair Value - Current Price)/Current Price, subject to limited management discretion. In most cases, the Fair Value will equal the analyst's assessment of the current intrinsic fair value of the stock using an appropriate valuation methodology such as Discounted Cash Flow or Multiple analysis etc. However, if the analyst doesn't think the market will revalue the stock over the specified time horizon due to a lack of events or catalysts, then the fair value may differ from the intrinsic fair value. In most cases, therefore, our recommendation is an assessment of the difference between current market price and

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our estimate of current intrinsic fair value. Recommendations are set with a 6-12 month horizon unless specified otherwise. Accordingly, within this horizon, price volatility may cause the actual upside or downside based on the prevailing market price to differ from the upside or downside implied by the recommendation. A "Strong buy" recommendation indicates that upside is more than 20%. A "Buy" recommendation indicates that upside is between 10% and 20%. A "Neutral" recommendation indicates that upside or downside is less than 10%. A "Reduce" recommendation indicates that downside is between 10% and 20%. A "Sell" recommendation indicates that downside is more than 20%. Sectors: A "Bullish" rating means most stocks in the sector have (or the weighted average recommendation of the stocks under coverage is) a positive absolute recommendation. A "Neutral" rating means most stocks in the sector have (or the weighted average recommendation of the stocks under coverage is) a neutral absolute recommendation. A "Bearish" rating means most stocks in the sector have (or the weighted average recommendation of the stocks under coverage is) a negative absolute recommendation.

Price targets
Price targets, if discussed, reflect in part the analyst's estimates for the company's earnings. The achievement of any price target may be impeded by general market and macroeconomic trends, and by other risks related to the company or the market, and may not occur if the company's earnings differ from estimates.

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Oil & Gas/Chemicals | Asia

Cheng Khoo

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17 May 2010