Equity research│September 27, 2016

Showcasing CIMB Research Ideas

MAL: UMW Oil & Gas 25/09

Dire conditions bring out the best in UMW-OG
Asia Pacific Daily - 27 September 2016
>PDF
———————————————————————————————————————————————————————————————————————————————————
Equity Research Reports…
MAL: Aviation - Overall 22/09
Purported new PSC is a disappointment for MAHB ▌IDEA OF THE DAY | Hong Kong
>PDF Far East Consortium International Limited (ADD, tp:HK$3.92) - High earnings growth cycle… | P2
———————————————————————————————————————————————————————————————————————————————————

TWN: Technology - Handsets 21/09 We expect FEC to post a 3.5x jump in core net profit in 1HFY17 to HK$457m. The group achieved a
iPhone 7: risk of mismatch >PDF record high of HK$9.8bn cumulative contracted presales, representing lock-in for over 60% of its
———————————————————————————————————————————————————————————————————————————————————
property projects in the pipeline. We project stable revenue growth yoy in 1HFY17 hotel and car park
TWN: Aspeed Technology Inc 20/09 operations. Still an Add due to solid earnings outlook, compelling valuation and attractive yield.
Surfing the cloud >PDF
———————————————————————————————————————————————————————————————————————————————————
———————————————————————————————————————————————————————————————————————————————————————

CHN: Strategy Note 19/09 ▌REGIONAL / ASEAN / APAC

CNH – HIBOR volatility to continue >PDF Agribusiness (NEUTRAL) - Positive on palm oil duty cut in India | P3
———————————————————————————————————————————————————————————————————————————————————————

▌Indonesia
Wijaya Karya (ADD, tp:Rp4,250.00) - The rights ride | P4
———————————————————————————————————————————————————————————————————————————————————————

Regional Equity Research Contacts ▌Malaysia

Michael GREENALL, CFP Bison Consolidated Bhd (ADD, tp:RM2.07▲) - Charging ahead | P5
Regional Head of Research Construction (OVERWEIGHT) - New rail line for all ports in Sabah | P6
T: (60) 3 2261 9088 ———————————————————————————————————————————————————————————————————————————————————————
E: michael.greenall@cimb.com
▌Singapore
———————————————————————————————————————————————————————————————————————————————————
Best World International Ltd (ADD, tp:S$2.05▲) - More upbeat post-NDR | P7
———————————————————————————————————————————————————————————————————————————————————————

▌Taiwan
Show Style "View Doc Map"

Macauto Industrial (ADD, tp:NT$246.00▲) - Steady as she goes | P8

CIMB Conference / Events | 

CIMB Malaysia Public Sector Corporate Day
10 October 2016
Theme: Malaysia
Location: Kuala Lumpur
———————————————————————————————————————————————————————————————————————————————————

IMPORTANT DISCLOSURES, INCLUDING ANY REQUIRED RESEARCH CERTIFICATIONS, ARE PROVIDED AT THE END OF THIS REPORT. Powered by the
IF THIS REPORT IS DISTRIBUTED IN THE UNITED STATES IT IS DISTRIBUTED BY CIMB SECURITIES (USA), INC. AND IS CONSIDERED THIRD-PARTY AFFILIATED RESEARCH. EFA Platform
Property Devt & Invt│Hong Kong│Equity research│September 26, 2016

Company Note
▎Hong Kong
Far East Consortium
ADD (no change) International Limited
Consensus ratings*: Buy 3 Hold 0 Sell 0
Current price: HK$3.11
High earnings growth cycle starts
Target price: HK$3.92
■ We expect FEC to post a 3.5x jump in core net profit in 1HFY17 to HK$457m.
Previous target: HK$3.92
Up/downside: 26.0%
■ The group achieved a record high of HK$9.8bn cumulative contracted presales,
representing lock-in for over 60% of its property projects in the pipeline.
CIMB / Consensus: 35.2%
■ We project stable revenue growth yoy in 1HFY17 hotel and car park operations.
Reuters: 0035.HK
Bloomberg: 35 HK
■ Still an Add due to solid earnings outlook, compelling valuation and attractive yield.
Market cap: US$854.7m
HK$6,630m
We project very strong 1HFY17 results
We expect Far East Consortium (FEC) to post very strong 1HFY17 results (Mar year-
Average daily turnover: US$0.50m
end), driven by property sales of above HK$1.9bn (+112% yoy) and stable recurrent
HK$3.88m income growth. Given strong property development sales, we estimate revenue
Current shares o/s: 2,132m increased by 55% yoy to HK$2.9bn. With better gross margin achieved for the Shanghai
Free float: 46.0% project (King’s Manor) and stabilised hotel operations, we estimate FEC’s first-half core
* Source: Bloomberg
net profit jumped 3.5x to HK$457m, forming 44% of our FY17 forecast.
Key changes in this note Major bookings for Melbourne and Shanghai projects
No changes. For property development booking, the best performers in 1HFY17 were Upper West
Side - Stage 4 (Melbourne) and the remaining units in King’s Manor (Shanghai). We
believe gross margin achieved was close to 40% as achieved ASP for Shanghai projects
Price Close Relative to HSI (RHS) was 20% higher yoy (Rmb38k/sq ft due to booming Shanghai property market).
3.10 105.0 Cumulative contracted presales reached HK$9.8bn
According to FEC’s announcement on 26 Aug 2016, the group achieved HK$3.9bn
2.60 92.5
contracted presales in Apr-Jul 2016, which drove cumulative presales to a record high of
2.10 80.0 HK$9.8bn (HK$7.5bn as at Mar 2016). Projects that registered major presales were
8
6 West Side Place (phase 1), Melbourne and The Royal Crest II, Shanghai.
4
Recurrent income still rising steadily
Vol m

Sep-15 Dec-15 Mar-16 Jun-16 We believe FEC’s hotel and car park operations posted stable revenue growth yoy in
Source: Bloomberg 1HFY17 despite difficulties in Hong Kong hotel operations due to reduced mainland
visitor arrivals and strong HK$. We estimate 1-3% yoy revenue growth for 1HFY17 hotel
Price performance 1M 3M 12M operations (+5% in FY17F), supported by rapid ramp-up in Dorsett Shepherd’s Bush
Absolute (%) 7.2 24.4 8.4 (London) and improved occupancy rates in China hotels. We believe its car park
Relative (%) 4.2 10.9 -2.8 business posted positive revenue growth yoy in 1HFY17, driven by increase in bays.
Major shareholders % held High earnings visibility for FY17-19F; over 7 years’ landbank
Mr. Chiu and his family 54.0 FEC has high earnings visibility for FY17-19F, supported by HK$9.8bn in achieved
contracted presales, representing lock-in of over 60% for its property projects in the
pipeline. The group also owns more than 6.4m sq ft of landbank, which should be
sufficient for development over the next seven years.
Reiterate Add with target price of HK$3.92
We reiterate our Add call on FEC as we believe it is a hidden gem due to its solid
earnings outlook (41% EPS CAGR in FY16-19F), compelling valuation (71% discount to
RNAV of HK$10.57) and attractive yield (5.7% in FY17). Our target price is based on
SOP. Potential re-rating catalysts are the upcoming SZ-HK Connect, strong earnings
delivery and higher DPS.

Financial Summary Mar-15A Mar-16A Mar-17F Mar-18F Mar-19F

Total Net Revenues (HK$m) 5,110 3,995 5,636 6,249 8,155
Operating EBITDA (HK$m) 1,492 1,318 1,909 2,292 2,499
Net Profit (HK$m) 957 734 1,029 1,365 1,853
Analyst Normalised EPS (HK$) 0.33 0.29 0.48 0.64 0.87
Normalised EPS Growth 70.8% (11.0%) 65.3% 32.6% 35.7%
FD Normalised P/E (x) 9.50 10.66 6.45 4.86 3.58
DPS (HK$) 0.16 0.16 0.18 0.22 0.30
Dividend Yield 5.14% 5.14% 5.74% 7.21% 9.78%
EV/EBITDA (x) 8.49 10.57 7.37 6.47 6.60
P/FCFE (x) 5.90 12.24 7.86 NA NA
Net Gearing 59.0% 76.8% 63.6% 80.1% 70.6%
P/BV (x) 0.65 0.65 0.56 0.64 0.47
Ray KWOK ROE 6.9% 6.1% 9.3% 12.3% 15.1%
T (852) 2532 1113 % Change In Normalised EPS Estimates
E ray.kwok@cimb.com Normalised EPS/consensus EPS (x) 0.98 1.10
SOURCE: COMPANY DATA, CIMB FORECASTS

IMPORTANT DISCLOSURES, INCLUDING ANY REQUIRED RESEARCH CERTIFICATIONS, ARE PROVIDED AT THE END OF THIS REPORT. Powered by
IF THIS REPORT IS DISTRIBUTED IN THE UNITED STATES IT IS DISTRIBUTED BY CIMB SECURITIES (USA), INC. AND IS CONSIDERED THIRD-PARTY AFFILIATED RESEARCH. the EFA
Platform

2
Commodities│ASEAN│Equity research

Sector Flash Note

▎ASEAN
September 26, 2016 - 4:35 AM
Agribusiness
Positive on palm oil duty cut in India
Neutral (no change)
■ India cut import duties by 5% pts to 7.5% for CPO and 15% for refined palm oil.
Highlighted companies ■ A positive surprise and the duty cut could make palm oil more competitive in India.
Astra Agro Lestari ■ Maintain Neutral rating with AALI, First Resources and GENP as our top picks.
ADD, TP Rp16,500, Rp15,450 close
Astra Agro is our top pick among the India cuts import duties on wheat, palm oil and potato
Indonesian planters due to its strong corporate ● On Friday, the Indian Central Board of Excise and Customs (CBEC) in a notification
governance and attractive valuation. stated that the import duty on wheat was to be reduced from 25% to 10% till February
First Resources Ltd 2017. It also said that the import duty on potatoes was to be reduced to 10% from 30%
ADD, TP S$1.95, S$1.86 close till October 2016. The duty on crude palm oil (CPO) was to be reduced to 7.5% from
Our preferred pick in Singapore for its superior 12.5% and on refined palm oil to 15% from 20%.
output growth prospects compared to peers
and low-cost production.
Lower import duties to help keep prices in check
● The government cut the import duties to boost domestic supplies via higher imports
Genting Plantations and keep prices of agricultural commodities in the country in check during the
ADD, TP RM11.80, RM10.96 close upcoming festive season in Oct.
Our preferred pick in Malaysia. It has young
● According to trade sources, if the Centre had not lowered the import duty, there could
estates, a solid balance sheet and strong
management. be an acute shortage of wheat flour during the coming festival season as flour mills
were left with little stock.
● The government reduced the import duty on potatoes to improve domestic availability.
Summary valuation metrics In the case of palm oil, officials said the retail price of palm oil showed a rising trend in
P/E (x) Dec-16F Dec-17F Dec-18F the past few months because of a surge in global markets. The landed price of
Astra Agro Lestari 20.75 15.28 13.50 crude palm oil in Mumbai between 2 Aug and 2 Sep had risen 45-52% while that of
First Resources Ltd 28.77 12.77 9.87 refined palm oil had gone up by 37-40%.
Genting Plantations 38.96 23.04 20.25
Surprised by decision to cut palm oil import duties
P/BV (x) Dec-16F Dec-17F Dec-18F ● We are positively surprised by the decision to cut both the import duty of crude and
Astra Agro Lestari 1.68 1.68 1.56 refined palm oil by 5% pts. This is because the Indian edible oil industry body Solvent
First Resources Ltd 2.07 1.86 1.64 Extractors Association (SEA) has been urging the government to cut the import duty of
Genting Plantations 1.94 1.82 1.71 CPO from 12.5% to 5% but to keep the import duty on refined palm oil at 20%, to
widen the duty differential to 15%.
Dividend Yield Dec-16F Dec-17F Dec-18F ● This is because, at the current duty differential of 7.5% between the two palm
Astra Agro Lestari 0.76% 1.50% 2.21% products, it is not competitive to refine palm oil in India and cheaper to import refined
First Resources Ltd 1.04% 2.35% 3.04% palm products. As a result, India has imported more refined palm oil and around half of
Genting Plantations 0.63% 1.06% 1.21% India’s refining capacity of around 25m tonnes have been idle for a few years.
Positive for palm oil prices
● We view this news as a slight positive for CPO prices as it will make palm oil more
competitive in India against other edible oils. This is because the government has only
reduced the import duties on palm oil but kept the import duties for other edible oils at
12.5% for crude and 20% for refined edible oils.
● This will improve palm oil competitiveness against other edible oils by 5% or
US$37.4/tonne (latest RBD palm oil price of US$748/tonne) in India. India is the
largest importer of Malaysian palm oil, with a 19% share of the total palm oil exported
from Malaysia in 8M16.
Maintain Neutral rating and top picks
● We are positive on this news as it could boost Indian demand for palm oil due to the
more attractive import duties and be supportive of CPO prices. We are sticking to our
average CPO price assumptions of RM2,450/RM2,600 per tonne for 2016/2017 and
maintain our Neutral rating as well as our top sector picks.

Figure 1: Revision of India import duties on palm oil

Date CPO RBD palm oil/olein Duty gap
23-Mar-07 46.4% 54.1% 7.7%
20-Mar-08 20.6% 28.3% 7.7%
Analyst(s) 1-Apr-08 0.0% 7.7% 7.7%
23-Jan-13 2.6% 7.7% 5.1%
Ivy NG Lee Fang, CFA 10-Jan-14 2.6% 10.3% 7.7%
T (60) 3 2261 9073 25-Dec-14 7.5% 15.0% 7.5%
E ivy.ng@cimb.com 18-Sep-15 12.5% 20.0% 7.5%
23-Sep-16 7.5% 15.0% 7.5%

SOURCES: "CIMB, The Solvent Extractors' Association of India, Central Board Of Customs and Excise"

IMPORTANT DISCLOSURES, INCLUDING ANY REQUIRED RESEARCH CERTIFICATIONS, ARE PROVIDED AT THE END OF THIS REPORT. Powered by
IF THIS REPORT IS DISTRIBUTED IN THE UNITED STATES IT IS DISTRIBUTED BY CIMB SECURITIES (USA), INC. AND IS CONSIDERED THIRD-PARTY AFFILIATED RESEARCH. the EFA
Platform

3
Construction│Indonesia│Equity research

Company Flash Note

▎Indonesia
September 26, 2016 - 11:14 AM
Wijaya Karya
ADD (no change) The rights ride
Consensus ratings*: Buy 18 Hold 5 Sell 0
■ Rp6.149tr rights priced at Rp1,525-Rp2,505/share with planned cum date on 17 Oct
Current price: Rp2,600 2016. We reckon the rights price could be Rp2,300-2,450/shr.
Target price: Rp4,250 ■ Its share price has plunged c.22% from peak, which is not unusual going by the
Previous target: Rp4,250 volatility experienced by peers ADHI and WSKT when they launched rights.
Up/downside: 63.5% ■ Downside should be limited; we expect rights to be accretive to earnings.
CIMB / Consensus: 40.3%

Reuters: WIKA.JK Rights issue factsheet

Bloomberg: WIKA IJ ● WIKA said that its rights price range was Rp1,525-Rp2,505, based on 30/60/90 days
Market cap: US$1,222m volume weighted average prices (VWAP), to be priced on 11 Oct 16. Every 80,000
Rp15,987,985m
old shares shall receive 31,936-52,456 rights, meaning 2.45-4.03bn new shares will
be issued. The total proceeds will be Rp6.149tr, of which Rp4tr shall be subscribed
Average daily turnover: US$3.78m
by the government to maintain its stake. The cum date is expected to be on 17 Oct
Rp49,688m 16. We expect it to be well subscribed.
Current shares o/s 6,140m
Free float: 28.2% Share price very volatile but limited downside from here
* Source: Bloomberg ● Its share price lost 20% over the past two weeks, about 22% down from the peak.
This adverse and earlier-than-expected reaction could be fuelled by then-market
Key financial forecasts sentiment on a weak tax amnesty programme. For WSKT and ADHI, share prices
also fell 10-20% but 1-2 weeks before the exercise. As: 1) tax amnesty sentiment
Dec-16F Dec-17F Dec-18F
seems to be improving, and 2) the rights is earnings-accretive, we reckon downside is
Net Profit (Rpb) 660 923 1,110
limited from here on assuming WIKA pockets more contracts post the exercise.
Core EPS (Rp) 107.5 150.3 180.7
Core EPS Growth 4.7% 39.8% 20.3% Project final pricing to be closer to the high end of range
FD Core P/E (x) 24.19 17.30 14.39 ● We estimate the VWAP calculation could fall by another 5% from the current
Recurring ROE 14.2% 17.4% 18.0% Rp2,900-Rp3,000 given our view that: 1) downside to the share price is not much,
P/BV (x) 3.25 2.80 2.41 and 2) there is only a week left until the last date for VWAP calculation. If so, the
DPS (Rp) 20.58 21.74 30.39 rights price should be Rp2,300-Rp2,450/share (assuming 10-15% discount from
Dividend Yield 0.79% 0.84% 1.17% VWAP). This suggests ownership dilution if the rights is not exercised of 29-30%.
An EPS-accretive exercise
Price Close Relative to JCI (RHS)
● Based on our estimate, WIKA could garner additional construction contracts, post
rights, of Rp28.7tr. The potential upside to our current FY17 earnings forecast is
3,100 98.7
c.37%. In all, we project earnings upside to amount to c.91% in FY16-19F against
2,600 80.9 share dilution of some 52-53%. We have not accounted for the rights in our forecast,
2,100 63.0
although we have conducted a sensitivity analysis in our previous report : Back on
100
track.
50
Unchanged forecast sand valuations
Vol m

Sep-15 Dec-15 Mar-16 Jun-16

● Ceteris paribus, we do not believe our post-rights forecasts will change by much. We
Source: Bloomberg
may lower our target price as the EPS dilution in FY17F is c.3% or to 29.2x FY17F
P/E, slightly higher than our assigned target P/E of 28.5x (+1 s.d. from 3-year P/E
Price performance 1M 3M 12M average, in line with other SOE contractors). Bottom line, the share price volatility of
Absolute (%) -20.5 -9.1 -1 late does not seem to be fundamentally-driven.
Relative (%) -20 -19.7 -28 Figure 1: Pre- vs. post-rights issue share price performance comparisons
Major shareholders % held
Government of Indonesia 68.4 25%
20%
15%
10%
5%
0%
-5%
-10%
-15%
-20%
-25%
-30%
1 week pre
1 week pre
recording

2 weeks post
2 weeks post
2 weeks post
3 weeks post
3 weeks post
4 weeks post
4 weeks post
4 weeks post
5 weeks post
5 weeks post
6 weeks post
6 weeks post
6 weeks post
7 weeks post
7 weeks post
8 weeks post
8 weeks post
8 weeks post
6 weeks pre
6 weeks pre
6 weeks pre
5 weeks pre
5 weeks pre
4 weeks pre
4 weeks pre
4 weeks pre
3 weeks pre
3 weeks pre
2 weeks pre
2 weeks pre
2 weeks pre

1 week post
1 week post

ADHI WSKT
Analyst(s)
SOURCES: CIMB, COMPANY REPORTS
Aurelia BARUS
T (62) 21 3006 1721
E aurelia.barus@cimb.com

IMPORTANT DISCLOSURES, INCLUDING ANY REQUIRED RESEARCH CERTIFICATIONS, ARE PROVIDED AT THE END OF THIS REPORT. Powered by
IF THIS REPORT IS DISTRIBUTED IN THE UNITED STATES IT IS DISTRIBUTED BY CIMB SECURITIES (USA), INC. AND IS CONSIDERED THIRD-PARTY AFFILIATED RESEARCH. the EFA
Platform

4
Retail│Malaysia│Equity research│September 26, 2016

Company Note
▎Malaysia
Bison Consolidated Bhd
ADD (no change) Charging ahead
Consensus ratings*: Buy 4 Hold 0 Sell 0
■ Bison’s 9MFY10/16 core net profit came in above our and market expectations,
Current price: RM1.88 representing 84% of both full-year forecasts.
Target price: RM2.07 ■ Store expansion (+48 net stores since Oct 2015) well on track to meet its target of
Previous target: RM1.80 opening 70 new stores a year.
Up/downside: 10.0%
■ Our FY16-18F EPS estimates rise by 8-9% to incorporate lower-than-expected
CIMB / Consensus: na
operating expenses.
Reuters: BISON.KL ■ Maintain Add, with higher 12-month target price of RM2.07.
Bloomberg: BISON MK
■ Key downside risks to our call include a significant slowdown in consumption
Market cap: US$141.7m
spending and any significant spike in operating costs.
RM582.9m
Average daily turnover: US$0.04m 9MFY10/16 above our expectations
RM0.16m Bison’s 9MFY10/16 core net profit of RM15m came in above our and market
Current shares o/s: 310.1m expectations, making up 84% the full-year estimate of both. The deviation against our
Free float: 26.0% estimates was largely due to lower-than-expected operating costs. As expected, no
* Source: Bloomberg dividend was declared during the quarter.
Key changes in this note An expectedly softer quarter
FY16F EPS increased by 8.3%. Despite the seasonally weaker quarter due to the fasting month of Ramadan, which falls
FY17F EPS increased by 8.4%. in June this year, Bison’s revenue rose 1.3% qoq in 3QFY10/16 to RM65.1m. This was
FY18F EPS increased by 8.8%. mostly attributable to the higher number of stores added (+48 net new stores since Oct
2015) as well as higher contribution from its advertising and promotion (A&P) division
Price Close Relative to FBMKLCI (RHS) which offset the weaker sales during the quarter. Nonetheless, core earnings were
2.00 179 clipped by 21.3% qoq on the back of higher operating costs due to the store expansion.
1.80 161
1.60 143 Food processing facility and distribution centre on track
1.40 125
The group had at end-Jul 2016 acquired 1.4 acres of freehold land in Rawang, Selangor
1.20 107
1.00 89
to build a new food processing facility. We understand that construction of the 50k sq
80
60 foot facility is still awaiting the approval of relevant authorities, which will most likely be
40 granted by end-Sep 2016. Meanwhile, management has already identified several
Vol m

20
locations for Bison's new distribution centre and will be finalising the location in the next
Mar-16 May-16 Jul-16 Aug-16
2-3 months.
Source: Bloomberg
Lifting FY16-18F EPS forecasts by 8-9%
Price performance 1M 3M 12M We raise our FY16-18F EPS numbers by 8-9% to reflect lower-than-expected operating
Absolute (%) 16 36.2 costs. The group is on track to achieve its target of opening 70 stores a year. While
Relative (%) 16.7 33.9 Bison's new stores are largely concentrated in shopping malls, we understand that a
total of c.16 stores have also been opened in mixed development projects. Meanwhile,
Major shareholders % held management guided that although the status of its franchise business model remains
D&D Consolidated 68.8
unchanged, it has received numerous enquiries from interested parties since Jul 2016.
Dang Tai Kien 3.7
Dang Tai Gean 1.5 Maintain Add
Following our earnings revision and valuation roll-over to CY18, our target price rises to
RM2.07 (from RM1.80), still based on both P/E (20x target P/E – in line with regional
peer average) and mean PEG of 1.0x valuation methodologies. Overall, we continue to
like the company for its sturdy 3-year net profit CAGR of 30.2%, underpinned by its
healthy store expansion plans as well as potentially higher margins from increased
revenue contribution from its F&B products.

[X]

Financial Summary Oct-14A Oct-15A Oct-16F Oct-17F Oct-18F

Revenue (RMm) 182.4 217.5 271.9 342.5 415.7
Operating EBITDA (RMm) 18.72 20.66 28.21 35.53 44.04
Net Profit (RMm) 12.43 13.52 18.42 24.50 29.84
Analyst(s) Core EPS (RM) 0.040 0.044 0.062 0.079 0.096
Core EPS Growth (3.0%) 9.3% 42.7% 27.0% 21.8%
FD Core P/E (x) 47.13 43.12 30.22 23.79 19.53
DPS (RM) 0.035 0.002 0.013 0.013 0.013
Dividend Yield 1.87% 0.09% 0.66% 0.66% 0.66%
EV/EBITDA (x) 31.26 28.30 17.62 14.35 11.32
P/FCFE (x) 94.3 432.9 97.5 NA 27.6
Net Gearing 6.1% 6.2% (52.6%) (39.7%) (40.2%)
P/BV (x) 13.72 10.50 3.65 3.23 2.82
Kristine WONG ROE 33.2% 27.6% 17.9% 14.4% 15.4%
T (60) 3 2261 9085 % Change In Core EPS Estimates 8.28% 8.41% 8.84%
CIMB/consensus EPS (x) 1.04 1.08 1.05
E kristine.wong@cimb.com
SOURCE: COMPANY DATA, CIMB FORECASTS

IMPORTANT DISCLOSURES, INCLUDING ANY REQUIRED RESEARCH CERTIFICATIONS, ARE PROVIDED AT THE END OF THIS REPORT. Powered by
IF THIS REPORT IS DISTRIBUTED IN THE UNITED STATES IT IS DISTRIBUTED BY CIMB SECURITIES (USA), INC. AND IS CONSIDERED THIRD-PARTY AFFILIATED RESEARCH. the EFA
Platform
CIMB Securities Limited has had an investment banking relationship with Bison Consolidated Bhd within the preceding 12 months.

5
Construction and Materials│Malaysia│Equity research

Sector Flash Note

▎Malaysia
September 26, 2016 - 3:01 PM
Construction
New rail line for all ports in Sabah
Overweight (no change)
■ A press article reported that there were new plans for a freight railway system linking
Highlighted companies all ports in Sabah (East Malaysia).
Gamuda ■ This is a positive surprise and could be featured in Budget 2017, in our view.
ADD, TP RM5.92, RM4.90 close ■ There could be new opportunities for big rail contractors like Gamuda and IJM Corp.
New rail jobs in Sabah could provide new
tender opportunities for Gamuda. The group Sabah rail project at advanced stage of proposal
was the main contractor (via MMC-Gamuda ● Malaysian Reserve reported that the federal government is in talks with the Sabah
JV) for the RM12.5bn northern double-tracking state government to construct a railway track that will link all the ports in the state.
project from Ipoh to Padang Besar.
This is to improve the land transportation system and enhance the movement of
IJM Corp Bhd goods (freight). According to a source, talks on the proposed rail line are already at
ADD, TP RM3.95, RM3.41 close the “advanced stage”. However, timing and project cost have not been concluded.
IJM Corp could also prequalify for the Sabah
rail line if tenders are opened for players in Eight major ports in Sabah with no integrated rail link
Klang Valley. The group has to date won two ● There are eight major ports in Sabah, namely 1) Sapangar Bay Container Port, 2)
main viaduct packages from MRT 1 and MRT Sapangar Bay Oil Terminal, 3) Kota Kinabalu Port, 4) Kudat Port, 5) Sandakan Port,
2. 6) Tawau Port, 7) Lahad Datu Port and 8) Kunak Port. There is currently no
Sunway Bhd integrated freight rail link that serves all the ports. The ports are one of the major
ADD, TP RM3.53, RM3.19 close sources of economic activity for many cities in the state. A dedicated new rail line will
Sunway (via Sunway Construction) could be enhance freight logistics and boost trans-shipment activities.
among the other mid-sized contractors that Initial allocation of RM200m could have upside
could pursue new rail tenders in Sabah, in our
view. Rail track record-wise, the group had
● The federal government had initially allocated RM200m to support the Sabah state
also secured two packages from MRT 1 and government’s railway line development. Our checks fail to ascertain how much of this
MRT 2 amount has been disbursed but what is clear at this juncture is that the initial budget
does not include the new railway tracks for the ports. The overall rail plan to connect
all the ports also includes the extension of the existing railway line from Kota Kinabalu
Summary valuation metrics to Sandakan and Tawau.
P/E (x) Dec-16F Dec-17F Dec-18F
Gamuda 17.89 15.43 13.96
A possible item in Budget 2017?
● Under the previous Budget 2016, federal spending for rail was mainly focused on
IJM Corp Bhd 18.31 18.09 17.17
urban rail expansion, namely the MRT 2 and LRT 3. This new development could hint
Sunway Bhd 11.21 9.63 9.08
at a shift in federal spending towards more freight rail-related infrastructure in Sabah
under Budget 2017. Using the Mentakab-Kuantan rail project as a gauge, it would
P/BV (x) Dec-16F Dec-17F Dec-18F cost RM40m-60m/km to construct a similar rail line for all Sabah ports. A hypothetical
Gamuda 1.84 1.81 1.77 100km new line could cost RM4bn-6bn (double-tracked).
IJM Corp Bhd 1.58 1.64 1.60
Sunway Bhd 0.88 0.84 0.79 Opportunities for Klang Valley contractors
● While initial tenders may focus on local Sabah players, a number of major rail
Dividend Yield Dec-16F Dec-17F Dec-18F contractors in Klang Valley, such as Gamuda and IJM Corp, could view this as a
Gamuda 2.36% 2.36% 2.36% tender opportunity given the companies’ past track records. Gamuda (via a JV with
IJM Corp Bhd 3.05% 3.19% 3.34%
MMC Corp) was the main contractor for the RM12.5bn Ipoh-Padang Besar rail
double-tracking. IJM Corp has won two main viaduct packages for MRT 1 and 2.
Sunway Bhd 3.76% 4.08% 4.08%
Other contractors under our coverage that could be keen are Sunway and WCT.
Maintain Overweight
● Retain Overweight on the sector. The rail line proposal in Sabah could emerge as
one of the few new projects that could be a highlight of the upcoming Budget 2017 in
October. This is on top of the Pan-Borneo Sabah highway, which could begin the
tender process in early-2017. Gamuda remains our top big-cap pick while Muhibbah
Engineering continues to be our preferred mid-cap.
Figure 1: Compiled value of jobs under Budgets 2010-2016

90,000 84,690

80,000 76,193

70,000

60,000

50,000

40,000

30,000
23,279
Analyst(s) 20,000 16,720
13,852
10,682 8,800
10,000
Sharizan ROSELY
0
T (60) 3 2261 9077 Budget 2010 Budget 2011 Budget 2012 Budget 2013 Budget 2014 Budget 2015 Budget 2016

E sharizan.rosely@cimb.com
Total allocation for infrastructure/construction (RM m)

SOURCES: BUDGET SPEECH

IMPORTANT DISCLOSURES, INCLUDING ANY REQUIRED RESEARCH CERTIFICATIONS, ARE PROVIDED AT THE END OF THIS REPORT. Powered by
IF THIS REPORT IS DISTRIBUTED IN THE UNITED STATES IT IS DISTRIBUTED BY CIMB SECURITIES (USA), INC. AND IS CONSIDERED THIRD-PARTY AFFILIATED RESEARCH. the EFA
Platform

6
Lifestyles│Singapore│Equity research│September 25, 2016

Company Note
▎Singapore
Best World International Ltd
ADD (no change) More upbeat post-NDR
Consensus ratings*: Buy 2 Hold 0 Sell 0
■ We hosted an NDR for Best World (BWL) and visited its lifestyle centres in Taiwan.
Current price: S$1.49
■ Management elaborated on the drivers for its stellar growth in Taiwan and
Target price: S$2.05 addressed concerns about channel stocking.
Previous target: S$1.58
Up/downside: 37.7%
■ Management also assured investors that plans to convert its export business model
in China to direct selling are on track.
CIMB / Consensus: 111.5%
■ We lift our TP to S$2.05, now pegged at 16.1x CY17 P/E. Maintain Add.
Reuters: BEST.SI
Bloomberg: BEST SP More positive post-NDR
Market cap: US$303.2m We hosted an NDR for BWL in Taiwan and also took the opportunity to visit its lifestyle
S$411.9m centres in Taipei and Taichung. Key discussion topics included 1) drivers behind the
Average daily turnover: US$2.12m group’s recent growth, 2) the group’s new manufacturing facility, and 3) China. Overall,
S$2.86m we came away feeling more positive on the company’s prospects.
Current shares o/s: 275.2m Sustainable sales in Taiwan
Free float: 45.1% The group’s stellar growth has mostly been driven by Taiwan, where sales grew 276%
* Source: Bloomberg
yoy in 1H16. Management highlighted that the key drivers were 1) increased product
Key changes in this note acceptance, 2) a new lifestyle centre in Kaohsiung and 3) its new online store. During
No change.
our site visit, we also saw strong evidence of product acceptance and a constant stream
of distributors buying products. Based on 1H16’s results, BWL is poised to be among the
Price Close Relative to FSSTI (RHS)
top ten direct selling companies in Taiwan.

1.51 1,000
Addressing concerns about channel stocking
One concern raised by investors was whether distributors were channel stocking.
1.01 667
However, there is no incentive for distributors to do so as they pay cash for the products.
0.51 333
Further, there is no price discrimination across members, regardless of rank, which
0.01 0
15 avoids the possibility of select distributors stocking up in the interest of arbitrage.
10
Manufacturing facility in Singapore to be up by 2H17
Vol m

5
Management also said that sales have now reached a scale large enough to justify
Sep-15 Dec-15 Mar-16 Jun-16
maintaining its own facility. Further, it would allow it to better manage the back-end
Source: Bloomberg supply and quality. It is also important that the facility is located in Singapore and not a
cheaper low-cost country as its internal studies show that consumers rank Singapore
Price performance 1M 3M 12M
Absolute (%) 6.4 58.5 808.5 highly on quality perception. On funding, we are not concerned as total capex will be
Relative (%) 6.2 56.2 808.1 c.S$15m and the company has net cash of S$46m.
China direct selling plans on schedule
Major shareholders % held
D2 Investment Pte Ltd 34.9
Management also said that the company is on track to complete setting up the requisite
Hoan Beng Mui (Dora) 5.6
nine service centres in Hangzhou city by end-16. Following which, the company will
Tan Nee Moi (Doreen) 5.6 convert its export model to a direct selling model. Taiwan currently makes up 68% of the
group’s revenue but we expect China to eventually overtake Taiwan.
Reiterate Add with a higher TP of S$2.05
We came away feeling more positive on the sustainability of sales in Taiwan and believe
earnings delivery in China will further re-rate the stock. We therefore raise our TP to
S$2.05, now based on 16.1x CY17 P/E, 2 s.d. above mean (12.4x previously, 1 s.d.
above mean). We note that the stock traded at 15-18x in its last earnings upcycle.
Reiterate Add. Key risks include regulatory changes and a drop in sales in key markets.

[X]

Financial Summary Dec-14A Dec-15A Dec-16F Dec-17F Dec-18F

Revenue (S$m) 75.3 101.7 167.4 206.7 257.2
Operating EBITDA (S$m) 8.15 19.52 40.02 51.37 67.42
Analyst(s) Net Profit (S$m) 4.05 10.10 27.60 35.07 46.32
Core EPS (S$) 0.02 0.05 0.10 0.13 0.17
Core EPS Growth 1201% 117% 111% 27% 32%
FD Core P/E (x) 67.98 31.32 14.86 11.69 8.85
DPS (S$) 0.006 0.016 0.032 0.040 0.048
Dividend Yield 0.43% 1.07% 2.15% 2.68% 3.22%
EV/EBITDA (x) 36.70 18.92 8.77 6.24 4.15
P/FCFE (x) 64.12 48.39 22.97 10.48 7.88
Net Gearing (63.4%) (76.2%) (70.1%) (81.1%) (89.7%)
Jonathan SEOW P/BV (x) 7.28 6.44 4.91 3.73 2.82
T (65) 6210 8671 ROE 11.3% 21.8% 37.5% 36.3% 36.3%
E jonathanwp.seow@cimb.com % Change In Core EPS Estimates 0% 0% 0%
CIMB/consensus EPS (x) 1.00 0.98 0.99
SOURCE: COMPANY DATA, CIMB FORECASTS

IMPORTANT DISCLOSURES, INCLUDING ANY REQUIRED RESEARCH CERTIFICATIONS, ARE PROVIDED AT THE END OF THIS REPORT. Powered by
IF THIS REPORT IS DISTRIBUTED IN THE UNITED STATES IT IS DISTRIBUTED BY CIMB SECURITIES (USA), INC. AND IS CONSIDERED THIRD-PARTY AFFILIATED RESEARCH. the EFA
Platform

7
Auto Parts│Taiwan│Equity research│September 26, 2016

Company Note
▎Taiwan
Macauto Industrial
ADD (no change) Steady as she goes
Consensus ratings*: Buy 6 Hold 6 Sell 0
■ We expect Macauto’s revenue growth to outpace the industry’s in 2H16-1H17F,
Current price: NT$208.5 despite upcoming policy change in China.
Target price: NT$246.0 ■ We cut FY16F EPS by 2% due to less favourable FX and raise FY17-18F EPS by 2-
Previous target: NT$224.0 4% to reflect a firmer business outlook.
Up/downside: 18.0%
■ R&D capability and product upgrades to support the gross margin.
CIMB / Consensus: na
■ Favourable industry landscape is sustainable and hence, we think Macauto’s gross
Reuters: 9951.TWO margin is as well.
Bloomberg: 9951 TT
■ Maintain Add and raise target price to NT$246, based on 19.5x FY17F P/E (vs.
Market cap: US$497.9m
18.5x previously) given a more solid business outlook for next 12 months.
NT$15,617m
Average daily turnover: US$2.02m
NT$63.52m Re-rating with a solid 2H16-1H17 outlook
Current shares o/s: 74.90m Macauto’s ongoing re-rating is within our expectations, given its superior financial status
and solid long-term earnings outlook. We expect Macauto’s sales growth in 2H16-1H17
Free float: 54.5%
* Source: Bloomberg to outpace the industry’s, despite the termination of (or cut in) purchase tax subsidy in
China, given: 1) the subsidy favours China domestic brands over foreign brands
Key changes in this note (Macauto’s major clients), and the trend is now set to reverse, and 2) revenue
FY17-18F revenue increased by 3%. contribution from new projects with Volkswagen, General Motors and Honda.
FY16F EPS decreased by 2%. R&D strength and product upgrades to enhance gross margin
FY17-18F EPS increased by 2-4%.
We discussed Macauto’s R&D efforts (5-6% of its annual sales since 2003) and product
mix upgrade in our initiation (Gleaming behind the shades, August 2016) and follow-up
Price Close Relative to TAIEX (RHS)
230 141.0
report (As good as it gets, August 2016). We believe these are the keys to sustaining its
210 131.0 high gross margin of c.40% despite being in original equipment (OE) rather than after-
190 121.0 market (AM) supply chain. We also think that Macauto’s R&D efforts make it well
170 111.0
positioned amid increasing frequency of facelifts and new car model launches.
150 101.0
130
3
91.0 Positive implications of competitive landscape on gross margin
2 We think that the automotive sunshades oligopoly is sustainable, given 1) the fairly small
Vol m

1 size of the addressable market, and 2) the segmented nature of the supply chain for
Sep-15 Dec-15 Mar-16 Jun-16
auto parts. Based on BOS’s estimated FY14 revenue of US$600m and 70% market
Source: Bloomberg
share, the implied market size is less than US$1bn, which we believe is not appealing
enough for many companies to put resources into and engage in price competition.
Price performance 1M 3M 12M Segmentation also helps to protect Macauto’s gross margin, given low replacement risk.
Absolute (%) 10 31.5 40.9
Relative (%) 9.3 23 27.8
Above-seasonal sales in 3Q16 but unfavourable FX
We advise investors to focus on Macauto’s core business operations, although
Major shareholders % held unfavourable FX rate may dent Macauto’s gross margin and non-operating income in
Kenmos Technology Co., Ltd. 19.3 3Q16F, in our view. We forecast 3Q16F revenue to be above-seasonal average at
Paul Lin 8.3 NT$1.1bn (2% qoq, 17% yoy) and 3Q16F EPS of NT$2.4 (2% qoq, -9% yoy). In 4Q16F,
Lin Chou, Yu-Shan 4.6 we expect a qoq uptick in revenue, thanks to seasonality and boost from pull-in demand
due to potential cessation of the purchase tax subsidy in China.
Stick to long-term beneficiary of changes in consumers’ tastes
We keep our Add call and raise our target price to NT$246, now based on 19.5x FY17F
EPS. We believe consumers’ increasing preference for premiumisation and product
upgrades in China bodes well for the adoption of panoramic sunroofs and consequently,
Macauto. Thanks to its business model and client relationships, we believe its order
visibility and earnings growth are intact, although its products are optional extras. FX
and oil price volatility are downside risks to our call.

Analyst(s) Financial Summary Dec-14A Dec-15A Dec-16F Dec-17F Dec-18F

Revenue (NT$m) 3,110 3,727 4,430 5,079 5,755
Operating EBITDA (NT$m) 724 889 1,084 1,258 1,400
Net Profit (NT$m) 585 657 758 945 1,050
Normalised EPS (NT$) 7.81 8.77 10.13 12.61 14.02
Normalised EPS Growth 11.0% 12.4% 15.4% 24.6% 11.2%
FD Normalised P/E (x) 26.71 23.76 20.59 16.53 14.87
DPS (NT$) 5.40 5.50 6.58 8.20 9.11
Dividend Yield 2.59% 2.64% 3.16% 3.93% 4.37%
Mike YANG EV/EBITDA (x) 21.69 17.63 14.36 12.31 10.97
P/FCFE (x) 43.03 34.22 29.62 22.28 25.08
T (886) 2 8729 8383 Net Gearing 5.32% 3.30% (2.15%) (4.37%) (7.77%)
E mike.yang@cimb.com P/BV (x) 8.58 7.59 6.50 5.47 4.75
Eric LIN ROE 34.3% 33.9% 34.0% 35.9% 34.2%
% Change In Normalised EPS Estimates (2.16%) 4.33% 1.75%
T (886) 2 8729 8380 Normalised EPS/consensus EPS (x) 0.98 1.04 1.03
E eric.lin@cimb.com
SOURCE: COMPANY DATA, CIMB FORECASTS

IMPORTANT DISCLOSURES, INCLUDING ANY REQUIRED RESEARCH CERTIFICATIONS, ARE PROVIDED AT THE END OF THIS REPORT. Powered by
IF THIS REPORT IS DISTRIBUTED IN THE UNITED STATES IT IS DISTRIBUTED BY CIMB SECURITIES (USA), INC. AND IS CONSIDERED THIRD-PARTY AFFILIATED RESEARCH. the EFA
Platform

8
Asia Pacific Daily│Equity research│September 27, 2016

REGIONAL HEAD

Michael William GREENALL

Regional Head of Research
+60 (3) 2261 9088
michael.greenall@cimb.com

COUNTRY HEADS OF RESEARCH

Ivy NG, CFA Siew Khee. LIM Erwan TEGUH Kasem PRUNRATANAMALA, CFA Michael KOKALARI, CFA
Malaysia Singapore Indonesia Thailand Vietnam
+60 (3) 2261 9073 +65 6210 8664 +62 (21) 3006 1720 +66 (2) 657 9221 +84 907 974408
ivy.ng@cimb.com siewkhee.lim@cimb.com erwan.teguh@cimb.com kasem.prunratanamala@cimb.com michael.kokalari@cimb.com

Bertram LAI Dohoon LEE Eric LIN Pramod AMTHE Joyce Anne, RAMOS
Hong Kong/China South Korea Taiwan India Philippines
+852 2532 1111 +82 (2) 6730 6121 +886 (2) 8729 8380 +91 (22) 6602-5167 +63 (2) 888 7293
bertram.lai@cimb.com dohoon.lee@cimb.com eric.lin@cimb.com pramod.amthe@cimb.com jjramos@securitybank.com.ph
Coverage via partnership arrangement with
Yolan SEIMON SB Equities
Sri Lanka
+94 (11) 2306273
yolan@jkstock.keells.com
Coverage via partnership arrangement with
John Keells Stock Brokers

REGIONAL SECTOR HEADS

KJ KWANG Ivy NG, CFA Raymond YAP, CFA
Offshore & Marine Plantations Transportation
+82 (2) 6730 6123 +60 (3) 2261 9073 +60 (3) 2261 9072
kj.hwang@cimb.com ivy.ng@cimb.com raymond.yap@cimb.com

7
9
Asia Pacific Daily│Equity research│September 27, 2016

DISCLAIMER WJV#05
The content of this report (including the views and opinions expressed therein, and the information comprised therein) has been prepared by and
belongs to CIMB save that (i) if it is a report written by the analyst(s) of John Keells Stock Brokers (“John Keells”), it belongs to John Keells; (ii) if
it is a report written by the analyst(s) of SB Equities Inc (“SBE”), it belongs to SBE; and (iii) if it is a report written by the analyst(s) of Morgans
Financial Limited (“Morgans”), it belongs to Morgans. This report is distributed by CIMB and in respect of sections of the report relating to (i), (ii)
and/or (iii) aforesaid, it is distributed pursuant to an arrangement between John Keells, SBE and Morgans respectively and none of the aforesaid
parties is an affiliate of CIMB.
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.
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, John Keells, SBE and/or Morgans, as the case may be, 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. None of CIMB, John Keells, SBE or Morgans is under any
obligation to update this report in the event of a material change to the information contained in this report. None of CIMB, John Keells, SBE or
Morgans has any and none of them will accept any, obligation to (i) check or ensure that the contents of this report remain current, reliable or
relevant, (ii) ensure that the content of this report constitutes all the information a prospective investor may require, (iii) ensure the adequacy,
accuracy, completeness, reliability or fairness of any views, opinions and information, and accordingly, CIMB, John Keells, SBE and Morgans and
their respective affiliates and related persons (and their respective directors, associates, connected persons and/or employees) shall not 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. In particular, CIMB, John Keells, SBE and Morgans disclaim all responsibility and liability for
the views and opinions set out in this report.
Unless otherwise specified, this report is based upon reasonable sources. 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, John Keells, SBE or Morgans or their respective affiliates to any person to buy or sell any investments.
CIMB, John Keells, SBE and/or Morgans and/or their respective 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, John Keells, SBE and/or
Morgans and/or their respective affiliates and 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, John Keells, SBE and/or Morgans and/or their respective affiliates may enter into an agreement with the company(ies) covered in this
report relating to the production of research reports. CIMB, John Keells, SBE and/or Morgans 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. The analyst(s) who prepared this research report are prohibited 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.
The term “John Keells Stock Brokers” shall, unless the context otherwise requires, mean each of John Keells Stock Brokers and its affiliates,
subsidiaries and related companies. The term “SB Equities Inc.” shall, unless the context otherwise requires, mean each of SB Equities Inc. and
its affiliates, subsidiaries and related companies. The term “Morgans Financial Limited” shall, unless the context otherwise requires, mean each
of Morgans Financial Limited and its affiliates, subsidiaries and related companies. 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.

8
10
Asia Pacific Daily│Equity research│September 27, 2016

Country CIMB Entity Regulated by

Hong Kong CIMB Securities Limited Securities and Futures Commission Hong Kong
India CIMB Securities (India) Private Limited Securities and Exchange Board of India (SEBI)
Indonesia PT CIMB Securities Indonesia Financial Services Authority of Indonesia
Malaysia CIMB Investment Bank Berhad Securities Commission Malaysia
Singapore CIMB Research Pte. Ltd. Monetary Authority of Singapore
South Korea CIMB Securities Limited, Korea Branch Financial Services Commission and Financial Supervisory Service
Taiwan CIMB Securities Limited, Taiwan Branch Financial Supervisory Commission
Thailand CIMB Securities (Thailand) Co. Ltd. Securities and Exchange Commission Thailand

Information in this report is a summary derived from individual research reports. As such, readers are directed to the 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, John Keells, SBE or Morgans, as the case may be, and the proprietary position by each of them
and shareholdings of its Research Analysts’ who prepared the report in the securities of the company(s) are available in the individual research
report.
This report does not purport to contain all the information that a prospective investor may require. CIMB, John Keells, SBE and Morgans and
their respective affiliates do not make any 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. None of CIMB, John Keells, SBE, Morgans and
their respective affiliates and 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 or any derivative
instrument, or any rights pertaining thereto.
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 : The distribution of this report is not an offer to buy or sell to any person within or outside Australia or a solicitation to any person within
or outside of Australia to buy or sell any instrument described herein. This report is being issued outside Australia to a limited number of
institutional investors and may not be provided to any person other than the original recipient and may not be reproduced or used for any other
purposes.
Canada: This research report has not been prepared in accordance with the disclosure requirements of Dealer Member Rule 3400 – Research
Restrictions and Disclosure Requirements of the Investment Industry Regulatory Organization of Canada. For any research report distributed
by CIBC, further disclosures related to CIBC conflicts of interest can be found at https://researchcentral.cibcwm.com .
China: For the purpose of this report, the People’s Republic of China (“PRC”) does not include the Hong Kong Special Administrative Region, the
Macau Special Administrative Region or Taiwan. The distributor of this report has not been approved or licensed by the China Securities
Regulatory Commission or any other relevant regulatory authority or governmental agency in the PRC. This report contains only marketing
information. The distribution of this report is not an offer to buy or sell to any person within or outside PRC or a solicitation to any person within or
outside of PRC to buy or sell any instruments described herein. This report is being issued outside the PRC to a limited number of institutional
investors and may not be provided to any person other than the original recipient and may not be reproduced or used for any other purpose.
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.
Germany: This report is only directed at persons who are professional investors as defined in sec 31a(2) of the German Securities Trading Act
(WpHG). This publication constitutes research of a non-binding nature on the market situation and the investment instruments cited here at the
time of the publication of the information.
The current prices/yields in this issue are based upon closing prices from Bloomberg as of the day preceding publication. Please note that
neither the German Federal Financial Supervisory Agency (BaFin), nor any other supervisory authority exercises any control over the content of
this report.
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 of CIMB, John Keells, SBE or Morgans, as the case may be, 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.
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, the Securities and
Exchange Board of India (Research Analyst) Regulations, 2014 (SEBI Registration Number INH000000669) 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

9
11
Asia Pacific Daily│Equity research│September 27, 2016

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 equity
stock broking and merchant banking 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. Neither this report nor any copy hereof may be distributed in Indonesia or to any Indonesian
citizens wherever they are domiciled or to Indonesian residents except in compliance with applicable Indonesian capital market laws and
regulations.
This research report is not an offer of securities in Indonesia. The securities referred to in this research report have not been registered with the
Financial Services Authority (Otoritas Jasa Keuangan) pursuant to relevant capital market laws and regulations, and may not be offered or sold
within the territory of the Republic of Indonesia or to Indonesian citizens through a public offering or in circumstances which constitute an offer
within the meaning of the Indonesian capital market law and regulations.
Ireland: CIMB is not an investment firm authorised in the Republic of Ireland and no part of this document should be construed as CIMB acting
as, or otherwise claiming or representing to be, an investment firm authorised in the Republic of Ireland.
Malaysia: This report is issued and distributed by CIMB Investment Bank Berhad (“CIMB”) solely for the benefit of and for the exclusive use of
our clients. 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, revise or reaffirm its opinion or the information in
this research reports after the date of this report.
New Zealand: In New Zealand, this report is for distribution only to persons who are wholesale clients pursuant to section 5C of the Financial
Advisers Act 2008.
Singapore: This report is issued and distributed by CIMB Research Pte Ltd (“CIMBR”). CIMBR is a financial adviser licensed under the Financial
Advisers Act, Cap 110 (“FAA”) for advising on investment products, by issuing or promulgating research analyses or research reports, whether in
electronic, print or other form. Accordingly CIMBR is a subject to the applicable rules under the FAA unless it is able to avail itself to any
prescribed exemptions.
Recipients of this report are to contact CIMB Research Pte Ltd, 50 Raffles Place, #19-00 Singapore Land Tower, Singapore in respect of any
matters arising from, or in connection with this report. 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 you have not been sent this report by CIMBR directly, you may not rely,
use or disclose to anyone else this report or its contents.
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. If the recipient is an accredited investor,
expert investor or institutional investor, the recipient is deemed to acknowledge that CIMBR is exempt from certain requirements under the FAA
and its attendant regulations, and as such, is exempt from complying with the following :
(a) Section 25 of the FAA (obligation to disclose product information);
(b) Section 27 (duty not to make recommendation with respect to any investment product without having a reasonable basis where you may be
reasonably expected to rely on the recommendation) of the FAA;
(c) MAS Notice on Information to Clients and Product Information Disclosure [Notice No. FAA-N03];
(d) MAS Notice on Recommendation on Investment Products [Notice No. FAA-N16];
(e) Section 36 (obligation on disclosure of interest in securities), and
(f) any other laws, regulations, notices, directive, guidelines, circulars and practice notes which are relates to the above, to the extent permitted
by applicable laws, as may be amended from time to time, and any other laws, regulations, notices, directive, guidelines, circulars, and practice
notes as we may notify you from time to time. In addition, the recipient who is an accredited investor, expert investor or institutional investor
acknowledges that a CIMBR is exempt from Section 27 of the FAA, the recipient will also not be able to file a civil claim against CIMBR for any
loss or damage arising from the recipient’s reliance on any recommendation made by CIMBR which would otherwise be a right that is available to
the recipient under Section 27 of the FAA, the recipient will also not be able to file a civil claim against CIMBR for any loss or damage arising
from the recipient’s reliance on any recommendation made by CIMBR which would otherwise be a right that is available to the recipient under
Section 27 of the FAA.
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. In South Korea, this
report is for distribution only to professional investors under Article 9(5) of the Financial Investment Services and Capital Market Act of Korea
(“FSCMA”).
Spain: This document is a research report and it is addressed to institutional investors only. The research report is of a general nature and not
personalised and does not constitute investment advice so, as the case may be, the recipient must seek proper advice before adopting any
investment decision. This document does not constitute a public offering of securities.
CIMB is not registered with the Spanish Comision Nacional del Mercado de Valores to provide investment services.
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.
Switzerland: This report has not been prepared in accordance with the recognized self-regulatory minimal standards for research reports of
banks issued by the Swiss Bankers’ Association (Directives on the Independence of Financial Research).

10
12
Asia Pacific Daily│Equity research│September 27, 2016

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”) based upon sources believed to be
reliable (but their accuracy, completeness or correctness is not guaranteed). The statements or expressions of opinion herein were arrived at
after due and careful consideration for use as information for investment. Such opinions are subject to change without notice and CIMBS has no
obligation to update its opinion or the information in this research report.
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 are unaffected.
CIMB Securities (Thailand) Co., Ltd. may act or acts as Market Maker, and issuer and offerer of Derivative Warrants and Structured Note which
may have the following securities as its underlying securities. Investors should carefully read and study the details of the derivative warrants in
the prospectus before making investment decisions.
AAV, ADVANC, AMATA, ANAN, AOT, AP, BA, BANPU, BBL, BCP, BDMS, BEAUTY, BEC, BEM, BH, BJCHI, BLA, BLAND, BTS, CBG, CENTEL,
CHG, CK, CKP, CPALL, CPF, CPN, DELTA, DTAC, EARTH, EGCO, EPG, GL, GLOW, GPSC, GUNKUL, HANA, HMPRO, ICHI, INTUCH, IRPC,
ITD, IVL, JAS, KBANK, KCE, KKP, KTB, KTC, LH, LHBANK, LPN, M, MAJOR, MINT, PLANB, PLAT, PS, PTG, PTT, PTTEP, PTTGC, QH,
ROBINS, RS, S, SAMART, SAMTEL, SAWAD, SCB, SCC, SCCC, SCN, SGP, SIRI, SPALI, SPCG, STEC, STPI, SVI, TASCO, TCAP, THAI,
THCOM, TICON, TISCO, TMB, TOP, TPIPL, TRUE, TTA, TTCL, TTW, TU, UNIQ, UV, VGI, VNG, WHA, WORK.
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: 90 - 100 80 - 89 70 - 79 Below 70 or No Survey Result
Description: Excellent Very Good Good N/A

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
of the United Arab Emirates.
United Kingdom: In the United Kingdom and European Economic Area, this report is being disseminated by CIMB Securities (UK) Limited
(“CIMB UK”). CIMB UK is authorized and regulated by the Financial Conduct Authority and its registered office is at 27 Knightsbridge, London,
SW1X7YB. Unless specified to the contrary, this report has been issued and approved for distribution in the U.K. and the EEA by CIMB UK.
Investment research issued by CIMB UK has been prepared in accordance with CIMB Group’s policies for managing conflicts of interest arising
as a result of publication and distribution of investment research. This report is for distribution only to, and is solely directed at, selected persons
on the basis that those persons: (a) are eligible counterparties and professional clients of CIMB UK; (b) have professional experience in matters
relating to investments falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (as amended,
the “Order”), (c) fall within Article 49(2)(a) to (d) (“high net worth companies, unincorporated associations etc”) of the Order; (d) are outside the
United Kingdom subject to relevant regulation in each jurisdiction, or (e) are persons to whom an invitation or inducement to engage in
investment activity (within the meaning of section 21 of the Financial Services and Markets Act 2000) in connection with any investments to
which this report relates may otherwise lawfully be communicated or caused to be communicated (all such persons together being referred to as
“relevant persons”). This report is directed only at relevant persons and must not be acted on or relied on by persons who are not relevant
persons. Any investment or investment activity to which this report relates is available only to relevant persons and will be engaged in only with
relevant persons.
Where this report is labelled as non-independent, it does not provide an impartial or objective assessment of the subject matter and does not
constitute independent “investment research” under the applicable rules of the Financial Conduct Authority in the UK. Consequently, any such
non-independent report will not have been prepared in accordance with legal requirements designed to promote the independence of investment
research and will not subject to any prohibition on dealing ahead of the dissemination of investment research. Any such non-independent report
must be considered as a marketing communication.
United States: This research report is distributed in the United States of America by CIMB Securities (USA) Inc, a U.S. registered broker-dealer
and a related company of CIMB Research Pte Ltd, CIMB Investment Bank Berhad, PT CIMB Securities Indonesia, CIMB Securities (Thailand)
Co. Ltd, CIMB Securities Limited, CIMB Securities (India) Private Limited, and is distributed solely to persons who qualify as “U.S. Institutional
Investors” as defined in Rule 15a-6 under the Securities and Exchange Act of 1934. This communication is only for Institutional Investors whose
ordinary business activities involve investing in shares, bonds, and associated securities and/or derivative securities and who have professional
experience in such investments. Any person who is not a U.S. Institutional Investor or Major Institutional Investor must not rely on this
communication. The delivery of this research report to any person in the United States of America is not a recommendation to effect any
transactions in the securities discussed herein, or an endorsement of any opinion expressed herein. CIMB Securities (USA) Inc, is a FINRA/SIPC

11
13
Asia Pacific Daily│Equity research│September 27, 2016

member and takes responsibility for the content of this report. For further information or to place an order in any of the above-mentioned
securities please contact a registered representative of CIMB Securities (USA) Inc.
Other jurisdictions: In any other jurisdictions, except if otherwise restricted by laws or regulations, this report is only for distribution to
professional, institutional or sophisticated investors as defined in the laws and regulations of such jurisdictions.

Corporate Governance Report of Thai Listed Companies (CGR). CG Rating by the Thai Institute of Directors Association (Thai IOD) in
2015, Anti-Corruption Progress Indicator 2015.
AAV – Very Good, 3B, ADVANC – Excellent, 3A, AEONTS – Good, 1, AMATA – Very Good, 2, ANAN – Very Good, 3A, AOT – Very Good, 2, AP -
Good, 3A, ASK – Very Good, 3B, ASP – Very Good, 4, BANPU – Very Good, 4, BAY – Very Good, 4, BBL – Very Good, 4, BCH – not available,
no progress, BCP - Excellent, 5, BEM – not available, no progress, BDMS – Very Good, 3B, BEAUTY – Good, 2, BEC - Good, 3B, BH - Good, 2,
BIGC - Excellent, 3A, BJC – Good, 1, BLA – Very Good, 4, 1, BTS - Excellent, 3A, CBG – Good, 1, CCET – not available, 1, CENTEL – Very
Good, 3A, CHG – Good, 3B, CK – Excellent, 3B, COL – Very Good, 3A, CPALL – Good, 3A, CPF – Very Good, 3A, CPN - Excellent, 5, DELTA -
Very Good, 3A, DEMCO – Very Good, 3A, DTAC – Excellent, 3A, EA – not available, 3A, ECL – Good, 4, EGCO - Excellent, 4, EPG – not
available, 3B, GFPT - Very Good, 3A, GLOBAL – Very Good, 2, GLOW - Good, 3A, GPSC – not available, 3B, GRAMMY - Excellent, 3B,
GUNKUL – Very Good, 1, HANA - Excellent, 4, HMPRO - Excellent, 3A, ICHI – Very Good, 3A, INTUCH - Excellent, 4, ITD – Good, 1, IVL -
Excellent, 4, JAS – not available, 3A, JASIF – not available, no progress, JUBILE – Good, 3A, KAMART – not available, no progress, KBANK -
Excellent, 4, KCE - Excellent, 4, KGI – Good, 4, KKP – Excellent, 4, KSL – Very Good, 2, KTB - Excellent, 4, KTC – Very Good, 3A, LH - Very
Good, 3B, LPN – Excellent, 3A, M - Good, 2, MAJOR - Good, 1, MAKRO – Good, 3A, MALEE – not available, 2, MBKET – Good, 2, MC – Very
Good, 3A, MCOT – Excellent, 3A, MEGA – Very Good, 2, MINT - Excellent, 3A, MTLS – Good, 2, NYT – Good, no progress, OISHI – Very Good,
3B, PLANB – Good, 3B, PS – Excellent, 3A, PSL - Excellent, 4, PTT - Excellent, 5, PTTEP - Excellent, 4, PTTGC - Excellent, 5, QH – Very Good,
2, RATCH – Excellent, 3A, ROBINS – Excellent, 3A, RS – Very Good, 1, SAMART - Excellent, 3B, SAPPE - Good, 3B, SAT – Excellent, 5,
SAWAD – Good, 1, SC – Excellent, 3B, SCB - Excellent, 4, SCBLIF – not available, no progress, SCC – Excellent, 5, SCN – Good, 1, SCCC -
Good, 3A, SIM - Excellent, 3B, SIRI - Good, 1, SPALI - Excellent, 3A, SPRC – not available, no progress, STA – Very Good, 1, STEC – Very
Good, 3B, SVI – Very Good, 3A, TASCO – Very Good, 3A, TCAP – Very Good, 4, THAI – Very Good, 3A, THANI – Very Good, 5, THCOM –
Excellent, 4, THRE – Very Good, 3A, THREL – Very Good, 3A, TICON – Very Good, 3A, TISCO - Excellent, 4, TK – Very Good, 3B, TKN – not
available, no progress, TMB - Excellent, 4, TPCH – Good, 3B, TOP - Excellent, 5, TRUE – Very Good, 2, TTW – Very Good, 2, TU – Very Good,
3A, UNIQ – not available, 2, VGI – Excellent, 3A, WHA – Good, 3A, WORK – not available, no progress.
Comprises level 1 to 5 as follows:
Level 1: Committed
Level 2: Declared
Level 3: Established (3A: Established by Declaration of Intent, 3B: Established by Internal Commitment and Policy)
Level 4: Certified
Level 5: Extended.
CIMB Recommendation Framework
Stock Ratings Definition:
Add The stock’s total return is expected to exceed 10% over the next 12 months.
Hold The stock’s total return is expected to be between 0% and positive 10% over the next 12 months.
Reduce The stock’s total return is expected to fall below 0% or more over the next 12 months.
The total expected return of a stock is defined as the sum of the: (i) percentage difference between the target price and the current price and
(ii) the forward net dividend yields of the stock. Stock price targets have an investment horizon of 12 months.
Sector Ratings Definition:
Overweight An Overweight rating means stocks in the sector have, on a market cap-weighted basis, a positive absolute
recommendation.
Neutral A Neutral rating means stocks in the sector have, on a market cap-weighted basis, a neutral absolute
recommendation.
Underweight An Underweight rating means stocks in the sector have, on a market cap-weighted basis, a negative absolute
recommendation.
Country Ratings Definition:
Overweight An Overweight rating means investors should be positioned with an above-market weight in this country relative to
benchmark.
Neutral A Neutral rating means investors should be positioned with a neutral weight in this country relative to benchmark.
Underweight An Underweight rating means investors should be positioned with a below-market weight in this country relative to
benchmark.

12
14