Regional

Regional
Morning Pack
DBS Group Research . Equity 05 January 2009
Spotlight on
The "Pulse of Asia" Conference
(SP) Cosco Corporation: Profit Warning
FULLY VALUED S$0.925 COS SP; Price Target: 12-month S$0.76 6th~ 8th January, 2009
(Prev S$0.80)
Cosco dropped a bombshell, indicating that 2008 profits would be

lower than 2007, due to provisions for doubtful debts, cost overun
and potential penalties for delays. We cut our forecasts by 20% to Updates & Results
30% on lower sales and margin assumptions, maintained Fully
Valued. SINGAPORE
(SP) ST Engineering: Holding Fort Equity Strategy 20: Fire sale

BUY (upgrade from HOLD) S$2.46; STE SP; Price Target: 12-month
S$2.80 Small/Mid Cap Strategy: Survival of the fittest
We upgrade ST Engineering to BUY with a target price of S$2.80. Cosco Corporation: – See Spotlight
Amidst the worsening global economic outlook, STE has sustained
its reputation of being a defensive counter, with a slew of new ST Engineering: – See Spotlight
contract wins in recent months across different segments. In spite
of possible slowdowns in its Aerospace and Marine segments, we
are positive on the stock given 1) its ability to boost growth through MALAYSIA
M&A, 2) a relatively secure dividend yield of 7%, 3) record
orderbook of S$10b and 4) cash and cash equivalents of S$1b. AMMB Holdings: – See Spotlight
(MK) AMMB Holdings: Inflexion point

BUY; RM2.51; AMM MK; Price Target: 12-month RM2.90 HONG KONG
AMMB seem to have reached an inflexion point in terms of China Telecom: – See Spotlight
valuation. It hit its trough P/BV multiple of 0.7x in Nov-08, the
lowest since 1999. We believe there is still no premium attributed Parkson: Recent momentum slows
to AMMB for ANZ’s presence in terms of management and HOLD (downgrade from BUY); HK$8.63; 3368 HK; Price Target:
expertise. Buy AMMB with a target price of RM2.90, which implies 12m HK$9.60 (Prev HK$12.55)
1.0x CY09 BV.
TVB: Gloomy outlook
(HK) China Telecom: Negatives reflected, upsides remain HOLD; HK$25.20; 511 HK; Price Target: 12-Month HK$26.04 (Prev
BUY; HK$3.07; 728 HK; Price Target: 12-Month HK$3.70 HK$39.04)
The acquisition of the CDMA business should help China Telecom

to mitigate lower fixed-line business, and cement growth THAILAND
momentum in the broadband business. With an expected
turnaround in the CDMA business, the company should resume True Corp.: The subscription ratio set at 1 old to 2.22 new shares
double-digit earnings growth in two to three years’ time. HOLD; Bt1.79 TRUE TB; Price Target: 12-month Bt1.90 (prev Bt1.69)
Singapore Research Team – 6533 9688 research@dbsvickers.com

www.dbsvickers.com
“In Singapore, this research report or research analyses may only be distributed “Recipients of this report, received from DBS Vickers Research (Singapore) Pte Ltd
to Institutional Investors, Expert Investors or Accredited Investors as defined in the (“DBSVR”), are to contact DBSVR at +65 6398 7954 in respect of any matters arising
Securities and Futures Act, Chapter 289 of Singapore.” from or in connection with this report.”
Regional
Morning Pack
DBSV Roadshow & Event Calendar* Key Indices
Analyst Roadshows / Events % chg vs

Closed as at previous YTD QTD MTD
Topic Date Location DBSV Analyst Indices 02.01.09 close (%) (%) (%)
Pulse of Asia 6-9 Jan 2009 SPORE - Asia
Conference - 1H09 HSCEI Index 8,314 5.4 5.4 5.4 5.4
Singapore Strategy 12-16 Jan UK JC Hang Seng 15,043 4.6 4.6 4.6 4.6
2009 HSCCI Index 3,442 4.5 4.5 4.5 4.5
Singapore Strategy 19-23 Jan US JC STI 1,830 3.9 3.9 3.9 3.9
2009 KOSPI 1,157 2.9 2.9 2.9 2.9
KLCI 894 2.0 2.0 2.0 2.0
*To register your interest in the above events, please contact your MXFEJ index 278 1.8 1.8 1.8 1.8
DBSV Sales representative. JCI Index 1,355 1.1 0.0 0.0 0.0
PCOMP 1,873 0.6 0.0 0.0 0.0
Taiex 4,591 0.0 0.0 0.0 0.0
SET 450 0.7 0.0 0.0 0.0
Nikkei 225 8,860 1.3 0.0 0.0 0.0
U.S./Others
Dow Jones 9,035 2.9 2.9 2.9 2.9
S&P 932 3.2 3.2 3.2 3.2
NASDAQ 1,632 3.5 3.5 3.5 3.5
FTSE 100 4,562 2.9 2.9 2.9 2.9
Market Data
EPS Gth (%) PE (x)
08F 09F 08F 09F
Singapore 0.2 (5.5) 8.9 9.4
Malaysia 6.6 (9.0) 10.5 11.5
HK HSI (11.3) 3.9 10.9 10.5
HK HSCCI (Red) 28.2 4.7 10.4 9.9
HK HSCEI (H) 3.1 (0.3) 11.7 11.7
Thailand (8.7) 0.9 8.0 7.9
Indonesia 2.7 2.7 11.1 10.7
Source: DBS Vickers
Commodity Indicators
Commodities Latest Previous
Closing Closing YTD % chng
Crude Oil USD/barrel 46 45

Nickel Spot USD/mt 13,110 11,609 3.9% Crude Oil
12.9%
Coal Spot USD/mt 80 - Nickel Spot
-11.2% Coal Spot
Tin USD/mt 11,625 10,700
8.6% Tin
Steel RMB/mt 3,696 3,678
-16.8% Steel
Copper USD/lb 322 317
0.0% Copper
Gold Spot USD/t. oz 883 875
0.1% Gold Spot
Soybean Oil Spot USD/pound 31.95 31.67 0.9% Soybean Oil Spot
Soybean Spot USD/bushel 9.59 9.60 -0.1% Soybean Spot
Sugar Spot USD/pound 12.81 12.75 0.5% Sugar Spot
Rice USD/cwt 15.12 15.25 -0.9% Rice
Wheat Spot USD/bushel 4.79 4.80 -0.4% Wheat Spot
Palm Oil Spot (CIF R) USD/mt 540 535 -45.7% Palm Oil Spot (CIF R)
Palm Oil Spot (FOB Msia) RM/mt 1,630 1,570 -47.5% Palm Oil Spot (FOB M sia)
Crude Oil Brent Spot USD/barrel 49 48 17.0% Crude Oil Brent Spot
Corn Spot USD/bushel 3.83 3.75 2.3% Corn Spot

Rubber Spot
Rubber Spot SGD/gram 205 202 1.5%
Source: Bloomberg -100% -50% 0% 50% 100% 150%
Page 2
DBS Vickers Securities
Corporate Access Event
DBS Group Research . Equity December 2008
DBS Vickers Securities will be hosting Asia Corporate Meet with representatives from companies listed in
Access Events in Singapore on January 6th ~ 8th, 2009. Singapore, Hong Kong/China, Malaysia, Korea, Thailand
and Indonesia. The meetings may be one-on-one or
The long term fundamentals of Asia support a favorable group presentations, to give you further insight into the
environment for Asian equities. companies’ operations, directions and prospects.
The "Pulse of Asia" Conference For further information and registration, please contact
your sales representative or:
The Fullerton Singapore
th th
6 ~ 8 January, 2009 DBS Vickers Securities (Spore)
Fax: 65 6534 4533
Participating Companies*:
Tuesday, 6 January 2009 Thursday, 8 January 2009
SINGAPORE: Ascott Residence Trust • Capitaland Limited • MALAYSIA: AMMB Holdings • KNM Group • YTL Power
DBS Group Holdings • Ezra Holdings • Fraser & Neave • Hyflux
Ltd • Mermaid Maritime • Olam International • SembCorp THAILAND: Bangkok Bank • Central Pattana • Quality
Industries • SembCorp Marine • ST Engineering • Singapore House • Thai Oil • Thai Union Frozen
Exchange • Starhub • Strait Asia Resources
INDONESIA: Adaro Energy • Indo Tambangraya Megah
Wednesday, 7 January 2009
CHINA: China Hongxing Sports • China XLX Fertiliser • Cosco
Corporation • Midas • Sihuan Pharmaceutical Holdings •
Synear Food • Yanlord Group
HONG KONG: AMVIG • China Pharmaceutical Group • China

Telecom Corp • China Yurun Food • Hengan International
Group • Solargiga Energy
KOREA: Halla Climate Control • NCSoft Corporation •

POSCO • S-Oil
* As at 19 December 2008. Subject to change
www.dbsvickers.com
Refer to important disclosures at the end of this report
Singapore
Regional Small/MidMarket
Cap Strategy Focus
Q4 2008
Country Assessment
Equity Strategy
Singapore
Fire sale
The market is oversold, and poised for a rebound on
cheap valuations. But uncertainties continue to lurk
amidst a tough operating environment, as recession hits
and job cuts continue to rise. The bears will prevail in
2009, and we expect the STI to trade within a band of
1250 to 2100 as it base-builds towards a more
convincing recovery in 2010.
Poised for technical rebound off low valuations. Post the meltdown in October
2008, the market is cheap by all measures. At current levels of 1740, forward PE
of 11x is close to the regional crisis low and dividend yields of 5.2% has
surpassed previous lows of 3.5%. An expansionary budget to be unveiled in
January 2009, coupled with optimism over Obama’s fiscal measures to boost the
US economy are key catalysts for the rebound in the near term.
But the bear market persists. The economy is not out of the woods yet, and bad
news from the corporate sector will cap performance. We expect the STI to trade
within a range of 1450 to 2180. The low end of the range reflects a P/B from the
mean, which is -2 standard deviations. This is consistent with recession year
valuations.
Stick to survivors of the fittest with the tenacity to ride through this recession.
These will be companies backed by relatively resilient earnings, strong cash flows,
and cashed-up balance sheet. They are in a favourable position to acquire cheap
assets as deflation runs its course into 2009. Our preferred picks are SMRT, SIA
Engineering, SPH and ST Engineering. We would sell asset plays including property
and shipping companies on the rebound, as the process of de-leveraging will lead
to asset devaluation in 2009. Distressed valuation levels will spur M&A activities,
potential candidates can be found among technology, oil and gas and S chips.
Janice Chua . (65) 6398 7954 . janicechua@dbsvickers.com
Page 1
www.dbsvickers.com
Market Focus
Equity Strategy
Market Data
Index Close Chng Net -1 mth% -3 mth -6 mth -12 mth 52 week
12 Dec 08 1m (%) (%) (%) (%) High Low
FSSTI 1,740 (44) (2.4) (32.3) (42.4) (50.7) 3531 1474

FTSE Mid Cap 342 (27) (7.3) (40.7) (55.0) (61.7) 908 299
FTSE Small Cap 291 (15) (4.8) (38.4) (54.9) (66.5) 867 257
FTSE Financials 424 (11) (2.4) (35.7) (45.3) (53.5) 913 375
FTSE Real Estate 345 (21) (5.8) (39.9) (53.7) (61.4) 895 316
FTSE Re Hold & Dev 353 (2) (0.5) (35.6) (51.6) (61.0) 905 308
FTSE Re Invest Trust 332 (59) (15.1) (47.1) (57.2) (61.9) 890 309
FTSE Oil & Gas 247 4 1.7 (47.6) (65.5) (73.6) 935 168
FTSE Basic Materials 222 1 0.5 (33.6) (64.2) (73.9) 851 181
FTSE Industrials 340 (44) (11.6) (39.6) (53.7) (61.6) 885 286
FTSE Consumer Goods 353 12 3.5 (30.8) (52.6) (62.9) 988 249
FTSE Healthcare 370 (66) (15.2) (38.5) (53.0) (58.2) 969 335
FTSE Consumer
Services 520 (18) (3.3) (27.3) (34.0) (44.7) 941 458
FTSE
Telecommunication 634 43 7.2 (25.2) (30.2) (36.0) 1022 493
FTSE Utilities 282 (43) (13.3) (38.6) (55.8) (74.8) 1117 217
FTSE Technology 357 (45) (11.2) (36.9) (53.1) (61.6) 934 332
FTSE China 187 2 1.3 (33.5) (57.5) (76.6) 799 136
Transactions: YTD
Volume (bn) 328
Value (S$bn) 369
Source: Bloomberg
MARKET REVIEW
Plunge in equities in October. The current global financial Unprecendated efforts by Central Banks and government efforts
crisis is the worst of its kind since the Great Depression. The to stabilize the financial systems and equity markets. While the
past few months saw government bail outs for companies financial crisis is the worst since the Great Depression, the
like Freddie Mac, Fannie Mae and AIG; the collapse of markets were comforted by unprecedented interventions by
investment bank Lehman Brothers; the sale of Merrill Lynch central banks and governments to restore stability to the financial
to Bank of America, the conversion of Goldman Sachs and systems. Fiscal stimulus packages from the US$800bn by US Fed
Morgan Stanley into commercial banks and the failure of to unfreeze credit markets, US$326bn to rescue Citigroup,
more European banks. China’s US$586bn economic stimulus package are measures
aimed at boosting these major economies. In addition, central
October was the most volatile month YTD. Major global banks around the world embarked on easier monetary policies
indices registered steep falls, amid concern that economic and unleashed aggressive interest rate cuts.
stimulus measures would fail to stop a global slowdown and
hurt corporate earnings. The fall would have been worse if
not for the concerted effort by central banks to cut interest
rates, provide government guarantees and ownership of
banks and to adopt other stimulatory measures.
Page 2
Market Focus
Equity Strategy
Oil & Gas sector was the worst performing sector, and plunged asset devaluation in the face of de-leveraging in the global
by 52%, on the back of the steep drop in oil prices, poor SPC financial markets.
results and concerns over the balance sheet strength of
offshore vessels owners. Oil prices fell more than 70% from Defensive sectors outperformed : Telecoms, Consumer
the peak of US$150/bbl to US$42/bbl currently. Goods, Consumer Services(benefiting from lower oil prices)
outperformed the market.
Asset plays were hammered. Shipping, Property and REITs
were not spared from the sell-down, as investors bet on
Index Key Events

3,900 DC charge
Inflation fears, more
raised from
3,800
50% to 70% subprime related write-off,
3,700 concerns about slowdown
in US economy
3,600
China Market falls
3,500 US recession fear, margin
9% in a single day
3,400 on 27 Feb Subprime & squeezed by escalating oil and
credit commodity prices; further write-
3,300 down Inflation concerns;
market Led by O&M Speculation of
3,200 crisis; and energy in CDO assets slowdown in global
US rate cut
3,100 caution stocks as oil economies; more
about price and financial institutions
3,000 Continued property precious Rebound on hopes collapsed
2,900 optimism in the metals rallied; that credit crisis has
property sector, S-chips on eased
2,800
Liquidity led rally construction QDII
2,700 triggered by recovery, RTOs, Fed cut Surprised 75pbs US bailout Freddie Mac
2,600 positive news small caps discount rate cut by Fed to and Fannie Mae; fall in
outperform blue rate by 3.5% Near-collapse of oil prices Obama wins
2,500
chips 50pbs to Bear Stearns; Fed presidency;
2,400 5.75% cut discount rate Collapse of Lehman China's
2,300 Brothers; US bailout AIG US$586bn
stimulus
2,200 Collapse of Fed’s bailout plan,
package
2,100
failure of European banks
2,000 Rescue efforts by Fed and European

central banks, including government
1,900
guarantee and ownership of banks
1,800
1,700
Central banks cut interest rates to boost
1,600 bank lending and economic growth
1,500
7
8
7
8
07
08
8
6
07
07
08
08
8
7
8
-0
-0
-0
-0
-0
-0
-0
-0
-0
-0
-0
-0
-0
l-0
-0
-0
l-0
-0
-0
b-
b-
n-
n-
n-
n-
ay
ay
ug
ep
ug
ep
ov
ov
ec
ar
pr
ec
ar
pr
ec
ct
ct
Ju
Ju
Fe
Fe
Ja
Ju
Ja
Ju
O
O
M
M
A
A
M
M
D
D
A
Source: DBS Vickers
Sector Performance (Sorted in Descending Order on 3 months Performance)

Sector 1 Mth Ago (%) 3 Mth Ago (%) 6 Mth Ago (%) 1 yr Ago (%)
Consumer Goods 4 -19 -46 -51
Telecommunications 7 -24 -29 -35
Consumer Services -3 -25 -27 -36
Basic Materials 2 -32 -65 -69
DBSV Universe -2 -33 -45 -53
Financials 0 -33 -39 -47
Health Care -19 -34 -53 -59
Industrials -9 -39 -54 -64
Real Estate -3 -40 -56 -67
Technology -14 -45 -60 -69
REITS -15 -46 -57 -62
Oil & Gas -3 -52 -69 -75
Source: DBS Vickers
Page 3
Market Focus
Equity Strategy
GROWTH external environment, domestic demand will be weakened by

the weak labour market, delays in mega construction projects
YTD, earnings cut by 20%(08F) and 33%(09F). Since the and uncertainties in the financial sector.
start of the year, we have cut earnings by 20% for 2008 and
33% for 2009. The biggest cut in earnings came from the Earnings downgrades to continue. Against this backdrop, we
technology sector due to a weakening demand outlook from expect earnings downgrades to continue for the next few
the US, amidst disappointing NODX for several quarters. Oil quarters. The biggest risk lies in property and bank earnings, as
and gas were de-rated due to execution issues among the provisions and write downs take centrestage due to asset
offshore vessel owners and charterers which suffered from devaluation. Our forecasts currently shows a 15% growth in
forex losses(Jaya) and execution problems at Swiber. In real estate earnings in 2009 from pre-sold units in 2006/2007.
addition, SPC earnings were cut due to an expected decline Downside risk for property companies will come in the form of
in refining margins. provisions in the event of defaults by speculators who
purchased properties on deferred payment scheme or mark to
Real estate earnings were not spared. We halved earnings by market losses on investment properties and land bank.
27% for 2009 on expectation that developers will push back
earnings recognition of presold units, coupled with delay in Property write-downs could push earnings decline to –15% for
construction of projects, while the quiet property market STI companies. Assuming property companies take the decision
would lead to reduced unit sales. Banks earnings were cut to write-down the value of assets of its commercial and
due to expectations of lower fee based income. We also development properties in 2009, this will push 2009 net
raised provision charges given the propect of a deterioration earnings growth from -8% to -15% for STI stocks and – 28%
in asset values and quality of loan books. for DBS’ universe of stocks.
Earnings dropped by 40% during past regional crises. In Spore GDP Growth vs Earnings growth
1998 and 2001 during the regional crisis and dotcom bust, %
Singapore’s earnings declined by between 40% to 50%, 50
mainly due to increases in banks’ provisions and mark to 40
market losses at property companies, and losses at 30
technology companies in 2001. Technology company losses 20
will feature less prominently in this cycle, given that profits 10
have shrunk over the past few years of contraction and forms 0
a small portion of our coverage now. Banks’ provisions hit a -10
high of 2.3% in 1998, compared to current provision levels -20 Earnings growth
-30 GDP growth
of 0.4%. While we have increased our provisions to 0.5% to
-40
0.6% over the next two years, this is a far cry from 1998’s
-50
levels, particularly if asset values were to decline significantly
90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08F 09F
next year.
Source: Datastream, Bloomberg
Net earnings decline of –21% and –6% for 2008 and 2009 2008 & 2009 earnings growth forecast from bottom up of STI stocks
respectively : DBS Economist has cut Singapore’s GDP growth using Bloomberg consensus
forecast for 2009 to –0.6%. Singapore is the first economy
to fall into a ‘technical recession’ with three quarters of
negative sequential growth. In 2008, Singapore’s GDP
growth was weaker than expected at +1.5% vs consensus
estimates of +2.5%. This reflects its vulnerability as a small
and open economy. The Singapore government has revised
down Singapore’s GDP forecast to a range of –2% to +1%
for 2009. Downside risk to global growth is high, and will be
a drag to Singapore’s GDP growth, particularly exports of
electronics and pharmaceuticals. In addition to the hostile
Page 4
Market Focus
Equity Strategy
Earnings Estimates by Sector

Earnings Growth % CAGR PATMI S$m PE (x)
2007 2008 2009 07-09 2007 2008 2009 2007 2008 2009
Basic Materials 22.9 47.2 31.4 39.1 321 473 622 7.5 5.1 3.9
Consumer Goods 23.5 89.8 -23.4 20.6 1,883 3,574 2,738 12.8 6.7 8.8
Consumer Services 22.3 -20.8 -4.6 -13.1 3,179 2,518 2,402 8.3 10.5 11.0
Financials 21.1 -1.5 -7.1 -4.3 6,871 6,770 6,288 8.3 8.4 9.1
Health Care 35.3 -0.4 8.8 4.1 141 140 153 14.0 14.1 12.9
Industrials 40.0 -1.1 -7.7 -4.5 4,926 4,873 4,496 7.4 7.5 8.2
Oil & Gas 56.6 -19.3 2.6 -9.0 749 604 620 3.3 4.1 4.0
Real Estate 47.7 -7.9 14.7 2.8 3,138 2,891 3,316 8.1 8.8 7.6
REITS 40.8 40.3 -0.1 18.4 872 1,224 1,223 11.9 8.5 8.5
Technology 67.5 -53.7 -105.8 nm 729 338 -20 4.2 9.2 -157.7
Telecommunications 2.5 -12.0 2.7 -4.9 4,197 3,692 3,793 10.9 12.4 12.1
Grand Total 26.0 0.3 -5.4 -2.6 27,007 27,097 25,631 8.7 8.7 9.2
Ex Property & Reits 23.0 -0.1 -8.2 -2.6 22,997 22,983 21,092 8.3 8.3 8.8
STI DBSV Forecast Float Factor Avg 37.7 -17.7 -8.3 -13.2 35,032 26,436 24,067 7.2 9.0 9.8
STI Consensus Float Factor Avg 37.7 -20.8 -5.9 -13.7 35,032 25,082 23,785 7.2 9.1 9.7
Source: DBS Vickers
LIQUIDITY Cash levels proxy for emerging markets, international equity

and global equity funds
USD – SGD Money Market Yield Trands
%
4.00 %pa %pa 6.00 24
3.50
5.50 1994: Tequila
5.00 20 debt crisis
3.00
4.50 1997/98 Asia
2.50 4.00 16 financial crisis
2.00 3.50
3M SGD SOR 3.00 12 2001 Nasdaq bubble
1.50
12M SGD SOR
2.50
1.00 12M USD Libor (RHS)
2.00
8
0.50 1.50
Sep-06 Dec-06 Mar-07 Jun-07 Oct-07 Jan-08 Apr-08 Aug-08 Nov-08 4
0
Money Supply y-o-y growth vs STI
93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08
Index (%)
4,000 35.0 Emerging markets International equity
3,500 30.0 Global equity
3,000 25.0
Source: Datastream
STI Index (LHS)
2,500 20.0
2,000 15.0
1,500 10.0 M1 growth heading south, expect SIBOR to remain low. M1

1,000 5.0 growth continues to head southwards, reflecting an outflow
500
Money Suppy
0.0
of liquidity. SIBOR spiked up in October 2008 at the peak of
y-o-y growth (RHS)
the US financial crisis but retreated on government
0 -5.0
1999 2000 2001 2002 2003 2004 2005 2007 2008
intervention. SIBOR rates are expected to stay low at <1%
for 3 month SIBOR, due to low Fed Funds rate and easier
Source: Bloomberg, DBS Vickers monetary policies globally.
Page 5
Market Focus
Equity Strategy
into deeper recession of –2% next year, property prices

Fund redemptions have yet to hit crisis levels. On the flip plunged by 50% and we peg STI components’ valuation to
side, we expect more room for fund redemptions, using past 1998 levels.
history as a guide. Although cash levels have risen over the
past two quarters, it has yet to hit peak levels seen during Forward PE D
1994 and 1998 crisis levels.
25 (%)
USD to weaken in 2009 vs SGD. In October 2008, MAS 23

shifted to a neutral exchange policy or zero appreciation for 21
its SGD (NEER), in response to weak economic conditions
both in Singapore and globally . DBS believes the US$ 19
appreciation over the past quarter is not sustainable as it did 17
not appreciate on its own merits, but due to deleveraging
15
triggered by the US financial crisis turning global and hitting
the economies. With central banks working together to 13
rescue the world’s financial system, DBS expects the 11
unwinding of yen carry trades to complete its course and the
shortage of US$ liquidity to ease. DBS has lowered its 9
forecasts for US$ vs S$ to 1.44 for end 2009, and expects it 7
to range between 1.45 to 1.50 in 1H09 and below 1.45 in
5
2H09.
93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08
Source: Datastream, DBS

VALUATION
P/BV D
Cheap by any measure post the sell-down. Post the
meltdown in October 2008, the market is cheap by all 3 (x)
measures. At current levels of 1740, forward PE of 11x is
close to the regional crisis low. Dividend yields of 5.2%
2.5
surpasses regional crisis levels of 3.5%, partly due to
corporates raising its dividend payout ratio in recent years vs
the crisis years. However, we would expect corporates to 2
conserve cash given tight liquidity, and putting yields under
downward pressure.
1.5
Market traded at price to book of 0.9x to 1.5x during
previous recession cycle – trading range of 1450 to 2180 on
STI. Currently STI is trading at price to book of close to 1x. 1
We note that the market trades within an average range and
standard deviation of –2 during recession years, implying a
0.5
trading band of 1450 to 2180 on the STI.
93 95 97 99 01 03 05 07
Bottom up STI target cut to 2100(base case). The cut in

earnings and target prices over the past quarter resulted in a
Source: Datastream, DBS
lower bottom up target for the STI from 2960 to 2100,
providing an upside of 21%.
Bear target of 1250 on the downside. pegged to regional

crisis valuations. We have attempted to shock our targets
deriving a bear target of 1250, assuming Singapore goes
Page 6
Market Focus
Equity Strategy
Dividend Yield But the bear will continue to claw in 2009. While a bear
market rally is imminent to correct the oversold positions, we
6 (%) have yet to hit the inflexion point for a market bottom. The
slew of bad news from the corporate world is unlikely to
recede, as the ill-effects of a recession works itself through
5
the economy.
4 In the chart below, equities led the sell-down before GDP

growth turned down in recession periods in 1984, 1998 and
3 2002. Post the meltdown in equities, the markets undergo a
period of base-building lasting four to eight quarters, as the
market struggles to find a bottom before the economy
2
bottoms. A recovery in equities has typically been
precipitated by a recovery in GDP growth.
1
Market bottoms when GDP bottoms
0
yo y% yo y%
93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 15 120
100
GDP grow th
Source: Datastream, DBS 10 80
60
5
40
OUTLOOK
20
0
Near term rebound likely as markets were oversold. 0
Market poised for near term rebound. We believe valuations -5 -20

have overshot on the downside, with valuations close to STI (R) -40
1998’s levels post the meltdown in October 2008. Bad news -10 -60
is being well absorbed by the market as the market searches 80 82 84 86 88 90 92 94 96 98 00 02 04 06 08
for signs of stability in the financial market on the back of
concerted efforts by governments and central governments Source: Datastream, DBS
using both fiscal and monetary policies and injection of
liquidity. Quarterly GDP performance
Optimism will be spurred by the swearing-in ceremony of US 20.0
President Elect, Obama on the back of his plan to pump

15.0
prime the economy via the infrastructure sector. At a cost of
US$500m, it is expected to create 2.5m jobs. 10.0
QoQ
Closer to home, expectations of an expansionary budget in 5.0
Singapore on January 22, 2009 will underpin the market. YoY

0.0
This follows the recent unveiling of a S$2.3bn stimulus
package for small and medium enterprises to gain access to -5.0
credit in this downturn, which will reduce default rates. The

budget could throw up surprises in the form of tax cuts, and -10.0
1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09
cost cutting measures for corporates, bringing forward
construction projects worth S$4.7bn and direct handouts to
Source: DBS
households and consumers.
Page 7
Market Focus
Equity Strategy
In Singapore, previous recessions have lasted between 4 to 6 STRATEGY

quarters. With looming prospects of a global recession and
Singapore’s vulnerability to external demand weakness, DBS Themes :
economist expects 1H09 to be weak, and GDP to hit its
trough in 1Q09, before it starts to recover in 4Q09. We A) Go for stocks with earnings resilience during recession
would look for a market bottom in 1Q09, in line with the We would pick stocks with earnings resilience, as the
GDP at its trough, and a dismal corporate reporting season in economy struggles through the recession. As we are still in
February which could trigger downside risks for the market. the early phase of the recessionary cycle, we would pick
stocks with resilient earnings – mainly land transport
However, confidence needs to be restored, and we expect companies, media services and telecoms companies. Our
the market to be range bound between 1250 and 2100 preferred picks are SMRT and Comfort Delgro, beneficiaries
during the base building period next year. We expect a of the switch to public transport, as evidenced by a rise in
sustainable recovery only from 2010, with the upcoming ridership, while M1 is the cheapest telco play. Singpost’s
completion of integrated resorts in Marina and Sentosa, and revenues were maintained during previous recessions (1998
with the economy on firmer footing for recovery. and 2003) while SPH is the monopolistic player in newspaper
advertising in Singapore.
Risks : The risks triggering STI to our bear target of 1250 will
come from : B) Sell asset plays on strength. The process of de-leveraging
a) failure of central banks and government efforts to stabiise has yet to complete its course, and asset deflation has just
the financial system. News of any collapse of major banks or started to unwind. We would take the opportunity in a bear
industries in US, Europe or Asia will cause jitters to the market rally to sell on strength stocks in the property,
market, particularly after the injection of liquidity by central shipping and hotel sectors. Property stocks have been sold
banks. down to distressed levels, trading at prices close to its 1998
valuation levels, hovering at price to RNAV of 0.5x. The
b) asset deflation is more severe than projected. We expect a sector, while cheap, provides no catalyst for re-rating as yet,
decline of 40% in high end property prices and 20% for as we expect more downside to prices of properties.
mass market properties. A sharper than expected fall or Anecdotal evidence indicated that prices for high end
bankruptcy in the property sector will trigger another round properties have declined by 20% from its peak, vs our
of sell-offs. expectations of a 40% decline. Shipping stocks are hit by a
plunge in freight rates, overcapacity issues and aggressive
c) banks remain cautious, the effects of the credit crunch expansion plans which will stress its balance sheet. Hotel
continues to cripple the expansion of industries requiring plays are capped by drops in tourist arrivals since June 2008,
high capex - specifically oil and gas, shipyards, amidst new capacity coming on-stream from 2009 once
environmental sector, shipping and property sectors. Marina Sands is completed by end-09.
d) worse than expected job losses and economic recession. C) Survival of the fittest – stress testing the balance sheet
We expect unemployment rate to hit 3.6% next year, similar Contrary to market perception, net debt to equity ratio of
to 1998 levels and GDP growth of –0.6% vs Ministry of STI companies at 23% currently is higher than the
Trade and Industry’s guidance of –1% to +2% for 2009. A regional crisis levels of 1997 to 1999. In early 2000,
sharper than expected decline in these areas will be negative companies, particularly Temasek-linked entities, were shifting
for the market towards optimizing their capital structure and efficient capital
management, leading to higher dividend payouts. As such,
net debt ratios shot up to 50% in 2002, in tandem with a
rise in dividend payout ratio to 80% and a fall in corporate
earnings. Subsequent years of economic boom led to a
period of build up in cash flows, and decline in net debt.
Page 8
Market Focus
Equity Strategy
Net debt to equity – STI companies Although net debt ratio of STI companies at 23% is low,
65% of companies under our coverage are in net debt
60%
positions. We would pick blue chips with prudent
50% management and efficient capital management. Faced with
deterioriating demand outlook and tight credit, companies
40%
with a strong balance sheets have the tenacity to ride out this
30% recession. Small caps are more vulnerable and we would
prefer blue chips with strong cash flow, net cash positions,
20%
and sustainable dividend payout ratios.
10%
We have also included Z-scores in our screen. The Altman Z-
0% score is a measurement of the financial health of a company.
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
The lower the score, the higher the chance of bankruptcy.
Net Debt / Equity The high scoring companies are in a better position to
Source: Bloomberg, DBS Vickers weather the current crisis and to acquire assets during testing
times. Our preferred picks are SIA Engineering – cash
generative and strong visibility to revenue streams, ST
Dividend payout and yield – STI companies Engineering which is in a position to acquire assets, backed
by its net cash of >S$1bn, and SPH, which enjoys a
100 6.0%
monopolistic position in advertising revenue in Singapore.
90
5.0%
80
70
4.0%
60
50 3.0%
40
2.0%
30
20
1.0%
10
0 0.0%
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
Div Payout Ratio (LHS) Div Yld (RHS)
Source: Bloomberg, DBS Vickers
Page 9
Market Focus
Equity Strategy
Survivors of the fittest

Free Net Net
op. Price Cash/
Mkt Price Target CFPS PE /BV Div Yld Gearing Mkt
Cap (S$) Price % (Scts) (x) (x) (%) (x) Cap Z-
12-
Company (S$m) (S$) Upside Rcmd 08F 08F 09F 08F 08F 09F 08F (%) score
Dec
Big Cap (>S$1bn)
Singapore 13,09 11.04 14.00 27% Buy 220.6 6.4 9.2 0.9 9.1 9.1 cash 30 2.47
Airlines 9 3
SIA Engineering 2,199 2.04 2.50 23% Buy 3.10 8.6 9.1 1.9 9.8 9.3 cash 20 4.90
SembCorp 3,459 1.67 1.90 14% Hold 23.34 7.3 7.0 1.8 9.6 10.1 cash 18 2.30
Marine
Venture 1,168 4.26 6.40 50% Buy 57.40 3.9 6.0 0.6 11.7 11.7 cash 17 3.98
Corporation
ST Engineering 6,895 2.30 2.80 22% Hold 22.58 14.0 13.4 4.2 7.1 7.4 cash 11 1.61
SPH 5,047 3.17 4.25 34% Buy 25.40 10.8 10.4 2.4 8.6 8.8 cash 6 3.28
SMRT 2,396 1.58 1.82 15% Buy 11.25 15.9 14.6 3.5 4.9 5.1 0.00 0 2.23
Source: DBS Vickers
D) M&A potential on distressed valuation Looking ahead, we believe large takeovers running to the
tunes of billions are less likely given tighter credits but smaller
Low valuations can trigger industry
deals are still possible: 1) robust companies could buy
consolidations/privatization/ M&A. The credit crunch and
competitors weakened by the tight credit market to enlarge
financial crisis has resulted in a sharp reduction in the sector
their own market share; 2) strategic buyers could take
M&A activity for 2008 and possibly into 2009. But, the massive
advantage of either a strong balance sheet (cash/credit
decline in equities’ has also beaten down valuations to levels
capacity) or relatively stronger equity position to acquire low-
compelling enough to draw potential buyers.
priced companies distressed by a combination of declining
revenue and rising borrowing costs; and 3) major shareholders
We have witnessed a flurry of corporate takeovers and
could privatize undervalued companies which have been
privatizations year to date. Most offers are struck with
indiscriminately sold down with the market.
respectable premiums over market prices.
Singapore M&A year-to-date

Date Takeover target Acquirer Offer Size of Premium to Hist. EV/ EBITDA Hist. Fwd PE
announced Price Deal last Px P/BV (x) PE (x) (x)
(S$) (%) (x)
7-Jun-08 Unisteel KKR S$1.95 S$785m 14.5 6.1 10.6 17.7 16.3
21-Jul-08 Bright World China Hldgs S$0.70 - S$300m 77.8 2.3x-2.5x 7.7x-8.2x 8.9x-9.5x 9.5x-10.2x
Precision Acquisition 0.75
22-Jul-08 Datacraft Asia Dimension Data US$ 1.33 US$276 m 33.0 3.0 5.5 19
Hldgs
25-Aug-08 Singapore Computer SingTel S$ 1.50 S$139.7m 12.0 2.0 5.9 13.1 13.7
Sys
15-Sep-08 SP Chemicals Ltd SP Chemicals S$0.73 S$400m 18.7 1.70 6.0x 7.0x 1.40
Holdings Ltd
6-Nov-08 ETLA Eletrotech Share swap S$30.05m 22.0 0.8 3.0 7.4
02-Dec-08 Singapore Food Singapore Airline S$0.93 S$334.5m 4.50% 3.1 7.4x 15.5
Industries Terminal Svcs
Source: Bloomberg, Company data, DBSV
Page 10
Market Focus
Equity Strategy
Within tech, we think Chartered and Hi-P are potential M&A 10.7 Scts per Swissco share. This implies that the equity market is
targets whereas Creative would be a prime candidate for ignoring the breakup value of Swissco, and valuing its core
privatization to extract cash. Chartered is an attractive offshore vessel chartering business at a mere 3.4x FY08 PE. Its
takeover target given record low valuation of only 0.2x P/B. core earnings are expected to be driven by the expected delivery
With an enterprise value of S$2b, a potential buyer would be of 10 new vessels by end 2008, and supported by the sustained
getting Chartered’s wafer fabs -one 300mm fab and five high day charter rates for offshore vessels. Furthermore,
200mm - at a price far below replacement cost. Today, a Swissco’s balance sheet is expected to strengthen going forward
leading-edge 300mm fab like Chartered’s Fab 7 already costs on the back of reduced capex commitments post 2008, and
more than US$2b. Word on the street has rumoured both strong positive operating cash flows stemming from its
TSMC and UMC to be interested buyers. chartering income.
Hi-P, on the other hand, would be a strategic fit for bigger As for KS Energy, a new substantial shareholder in the form of
electronic manufacturing companies such as Flextronics, Jabil Dubai Transport Company LLC (“DTC”) emerged in late July
or even Venture. 2008. Also known as Dutco Group, DTC is a private UAE-based
conglomerated involved in construction of freight services to oil
As for Creative, the stock is trading below cash of US$3.14 per and gas. We note that it has been increasing its stake in KS
share as at end of Sep 08. A potential buyer can extract cash Energy steadily over the past few months, and most recently,
by firstly shutting down the loss-making retail business; then acquiring another 6.7m shares in KS Energy, at a price range of
paying off debts with the company’s cash and last but not c. S$0.60 – 1.00, bringing its total stake to 13.1%.
least, monetizing Creative’s rich library of intellectual
properties. China Sports is a likely privatisation candidate, having a net cash
position of S$127.5m vs. the current free float of a mere
In the industrial space, Swissco International and KS Energy are S$38.6m. The share is currently trading at c. S$0.16, considerably
our picks as possible M&A candidates. Swissco, a charterer of lower than the net cash per share of c. S$0.19. However, the
offshore and out-of-port limit vessels is currently trading at an operating environment remains tough, amidst falling demand
attractive valuation of 0.4x forward P/B. It also holds a 9% stake and rising competition from listed players.
in Swiber Holdings, which at current market price, is worth c.
Potential M & A targets

Price Net Free
Company FYE Mkt Cap (S$) PE (x) P/BV (x) EV/EBITDA gearing cashflow
(S$m) 12-Dec Rcmd 08F 09F 08F 09F 08F (%) (S$m)
Semiconductor
CSM Dec 470 0.185 Hold nm nm 0.2 0.3 3.4 56.4 -279.5
Creative Technology Jun 325 3.80 Fully Valued nm nm 0.6 0.7 6.6 cash 126.2
Hi-P Dec 262 0.295 Buy 2.9x 3.5x 0.5 0.4 1.3 cash 15.1
Industrials
KS Energy Dec 365 1.05 Fully Valued 8.0x 7.3x 1.0 0.9 8.1 121.2 -124.2
Swissco International Dec 80 0.405 Buy 4.9x 4.6x 0.4 0.4 nm 2.6 -39.9
S-chip
China Sports Dec 104 0.155 Hold 2.3x 2.3x 0.6 0.5 nm cash 18.4
Page 11
Market Focus
Equity Strategy
Sector recommendation and stocks for Singapore
SECTOR REMARKS STOCK SELECTION

OCBC
Banks & Finance We believe that most of the bad news has been priced in. We have removed
Neutral the 100bps risk premium attributed to banks when we downgraded the
sector in Oct-08 as (1) we believe the financial sector is stabilising – credit
default spreads has come off, (2) we believe asset quality would not be as
bad as the Asian Financial crisis and (3) banks are well capitalised, with room
to raise further capital, if necessary. We upgraded Singapore banks to
Neutral (from Cautious) and revised our calls. OCBC is upgraded to a Buy
(from Hold) while UOB is upgraded to a Hold (from Fully Valued).
Consumer Goods For plantation, we expect palm oil prices to stay weak at RM1,520/MT next China Fishery Group
Neutral year, lower than most market expectations of between RM1,600 and
RM1,900. We expect current record inventory of 2.1m MT in Malaysia to
continue to rise, as Chinese import volumes weaken and slower GDP growths
in Asia become more apparent. For pure planters, earnings are to drop
significantly over the next three quarters, and we believe this has not been
factored in current lofty multiples. For integrateds, we still like Wilmar for its
ability to consistently hedge its costs and sales, although we recommend
investors to wait for a reasonable entry level, as China’s palm and soybean
import volume growth may decelerate due to current global economic
weakness.
We maintain neutral on downstream consumer goods. We expect

discretionary spending to be affected as consumers cut back on spending
amid slowing growth and job losses. Nonetheless, consumer staples should be
less affected given that these are essential items. Also, with easing oil and
commodity prices, these should be positive for consumer staple companies
though there will be a lagged effect for lower prices to trickle down. Our top
pick for the sector is China Fishery Group given exposure in the upstream
fishing operations. Valuations are relatively undemanding at 3.6x and 3.1x
FY08F and FY09F. Though gearing is relatively high at 0.93x, 75% of its debt
have maturity of more than one year (largely comprising of its senior notes
due 2013).
Page 12
Market Focus
Equity Strategy
Consumer Services While not spared from the market tumble in Oct, consumer services emerged SMRT, ComfortDelgro, SPH
Positive as the best performing segment with a 22% decline versus 35% for the
broader market. We maintain our positive view of the consumer services
sector. We believe ridership for land transport will be relatively resilient
despite the economic gloom, hence our preference for it. Retreating oil price
is positive for SMRT and ComfortDelGro as energy and fuel costs accounts
for 11% - 40% of companies revenue. With oil price retreating to around
US$45/bbl, we estimate that SMRT’s fuel and electricity costs will be
significantly lower. Their current 6-months contract till Mar 09 is 30% higher
from previous. Top picks are SMRT, ComfortDelgro and SPH.
Hyflux, Epure International,

Industrials Shipyard. We maintain our cautious view on the shipyard sector as we reckon
SIA Engineering
Cautious more news flow on order cancellations / delays to plague the sector going
forward. Shipbuilders like Cosco and Yangzijiang are seeing heightened risk
of cancellation in view of the plunge in freight rates and tight credit lines.
The global credit crunch has extended its grasp to rigbuilding sectors as well,
with three of Keppel Corp’s customers requesting for contract
renegotiations. We have Hold recommendation on Sembcorp Marine
(S$1.90), and Fully Valued for Cosco (S$0.80), Keppel Corp (S$3.58) and
Yangzijiang (S$0.34). For these stocks to re-rate, we need to see a turning in
the macro environment and recovery rebound in oil prices or BDI.
Shipping. We maintain our cautious stance on dry bulk shipping. We see the
general reluctance of listed companies to cancel orders as reinforcing the
cyclical downturn in 2009, which will be worse than the Asian Crisis. We
expect most dry bulk carriers to be making losses, except for some of the
fully depreciated vessels. Secondhand prices are also expected to plunge
80%. We have Hold recommendations on Mercator (S$0.13), and Fully
Valued for STX Pan Ocean (S$6.70). We recommend investors to sell into
strength should the BDI stage an expected technical rebound in late 1Q to
2Q09.
ASL Marine, Ezra

Oil & Gas We are neutral on the oil and gas sector in Singapore, preferring the
Neutral operators to builders. The lower breakeven level for production projects
would continue to create jobs for oil service and equipment providers,
supported by most oil majors and national oil companies' current decision to
maintain 2009 capex. We prefer Ezra and Swiber to KS Energy for their more
attractive valuations, and believe that capex funding risk on the former two
companies is misplaced. We are cautious on Jaya, given its huge newbuild
program of 56 speculative vessels, while preferring ASL Marine due to its
more resilient repair and chartering businesses.
Page 13
Market Focus
Equity Strategy
Property Our cautious stance on developers remains. Much of the expected bad news City Devt, Wheelock
Cautious like asset writedowns, negative job creation and distressed sales have yet to
materialise. These factors should continue to weigh down the sector in
coming months, hampering sector outperformance. We would look to re-
enter the sector only upon seeing key inflexion points in the form of the
worst of the bad news. These include the worst in job loss data and the
weakest residential sales in the secondary market, historical precursors to an
uptick in property stocks. We favour residential over office given the time
needed to digest the huge impending supply coming on-stream. Our top
buys are companies with strong balance sheets that we believe would be
more resilient. Our top big-cap pick is City Dev (lower risk of asset write-
down); our top mid-cap pick is Wheelock Properties (net cash, does not offer
DPS). Avoid companies that are relatively more highly geared and with a
greater exposure to the high-end residential market, where higher default
risk may lie. Top sells are SC Global and Ho Bee.
Reits Lowering our call on Sreits to neutral. In addition to slower earnings growth, Parkway Life Reit
Neutral continued headwinds from refinancing concerns due to the tight credit
market and prospect of balance sheet deleveraging due to asset value
deflation would hamper share price outperformance. The sector is currently
offering historically high average DPU yield of 15.5%, indicating that a
measure of these risks have been reflected into the share price. Our strategy
would be to remain highly selective, preferring reits with low gearing and
little refinancing issues such as Parkway Life reit.
Technology We maintain Cautious on tech stocks as newsflow will remain bearish, Venture
leading to more earnings downgrades on the street, near term. Throughout
Cautious
FY09, the industry would see falling utilization, inventory correction, higher
working capital requirement and continued earnings revision as long as the
market remains entrenched in a recession. Margins will also remain
depressed, as competition and pricing pressures negate the strengthening
USD and falling material costs. But, industry consolidation or privatization
could be a catalyst. We think Chartered and Hi-P are potential buys given
their integration potential. We think Creative would be a privatization
candidate to extract cash.
Avoid small caps. Top pick is Venture.
Telecom Ground checks indicate that competition in the sector is easing, as operators M1
are reducing handset subsidies. However, subscriber growth is under
Neutral
pressure as immigrantion led population growth is bound to recede with
economic recession in Singapore. Current sector valuation of 12.4x FY09F
PER for 4.4% FY08-FY10 EPS CAGR do not appear attractive compared to
market's 9.4x PER for –0.3% growth. We would like to stress that sector
earnings are less volatile and dividend yield of 5-10% limits the downside.
SingTel and StarHub have challenges ahead in the medium term from
National Broadband Network (NBN) with M1 as the only beneficiary. M1 is
our top pick in the sector and is trading at 8.5x FY09 PER and 10% dividend
yield.
Page 14
Market Focus
Equity Strategy
DBSV recommendations are based an Absolute Total Return* Rating system, defined as follows:
STRONG BUY (>20% total return over the next 3 months, with identifiable share price catalysts within this time frame)
BUY (>15% total return over the next 12 months for small caps, >10% for large caps)
HOLD (0-15% total return over the next 12 months for small caps, 0-10% for large caps)
FULLY VALUED (negative total return i.e. > -10% over the next 12 months)
SELL (negative total return of > -20% over the next 3 months, with identifiable catalysts within this time frame)
Share price appreciation + dividends
DBS Vickers Research is available on the following electronic platforms: DBS Vickers (www.dbsvresearch.com); Thomson
(www.thomson.com/financial); Factset (www.factset.com); Reuters (www.rbr.reuters.com); Capital IQ (www.capitaliq.com) and
Bloomberg (DBSR GO). For access, please contact your DBSV salesperson.
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The research is based on information obtained from sources believed to be reliable, but we do not make any representation or warranty as to
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circulation. Any recommendation contained in this document does not have regard to the specific investment objectives, financial situation
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DBSVUSA does not have its own investment banking or research department, nor has it participated in any investment banking transaction as
a manager or co-manager in the past twelve months. Any US persons wishing to obtain further information, including any clarification on
disclosures in this disclaimer, or to effect a transaction in any security discussed in this document should contact DBSVUSA exclusively.
ANALYST CERTIFICATION
The research analyst primarily responsible for the content of this research report, in part or in whole, certifies that the views about the
companies and their securities expressed in this report accurately reflect his/her personal views. The analyst also certifies that no part of
his/her compensation was, is, or will be, directly, or indirectly, related to specific recommendations or views expressed in this report. As of 5
Jan 2009, the analyst and his / her spouse and/or relatives who are financially dependent on the analyst, do not hold interests in the securities
recommended in this report (“interest” includes direct or indirect ownership of securities, directorships and trustee positions).
COMPANY-SPECIFIC / REGULATORY DISCLOSURES
1. DBS Vickers Securities (Singapore) Pte Ltd and its subsidiaries do not have a proprietary position in the securities
recommended in this report as of 31 Dec 2008
3. DBSVR, DBSVS, DBS Bank Ltd and/or other affiliates of DBS Vickers Securities (USA) Inc ("DBSVUSA"), a U.S.-registered
broker-dealer, may beneficially own a total of 1% or more of any class of common equity securities of the mentioned
company as of 5 Jan 2009.
4. Compensation for investment banking services:
a) DBSVR, DBSVS, DBS Bank Ltd and/or other affiliates of DBSVUSA may have received compensation, within the past
12 months, and within the next 3 months receive or intends to seek compensation for investment banking services
from the SPH,Hyflux,, ASL Marine, City Development, Parkway Life REIT.
b) DBSVUSA does not have its own investment banking or research department, nor has it participated in any
investment banking transaction as a manager or co-manager in the past twelve months. Any US persons wishing to
obtain further information, including any clarification on disclosures in this disclaimer, or to effect a transaction in
any security discussed in this document should contact DBSVUSA exclusively.
Page 15
Market Focus
Equity Strategy
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Page 16
Singapore
Regional Small/MidMarket
Cap Strategy Focus
Q4 2008
Country Assessment
Small/Mid Cap Strategy
Singapore
Survival of the fittest
We see the bear market rally that started in 4Q08
extending into 1Q 09. Our 1Q strategy focuses on
companies with strong balance sheets that give them the
ability to ride out the recession.
Markets managed to find a short-term low in 4Q08 as investors bet that 1) the
frozen credit markets may start to thaw following recent aggressive measures by
central banks to inject liquidity, 2) valuation has fallen to previous crisis troughs,
the recent stock market correction has priced in weak FY08 earnings and poor
economic data and 3) global efforts to pump prime economies could shorten
the global recession
Still, we remain mindful of the current credit crunch on small and medium size
companies. With earnings downgrades still an on-going process, our stock
selection adds focus on companies with strong balance sheets that should
enable them to weather and emerge from the current crisis as stronger entities.
We take a positive view of recent plans to review capital expenditure by Ezra as
well as its improved charter rates that are backed by long-term contracts. We
also like ASL Marine’s good earnings visibility and net cash position in FY09.
Among S-chips, we view the Chinese government’s initiatives to shift its weight
from exports to domestic consumption as positive for China Hongxing, which is
backed by 17Scts net cash per share. We also pick water treatment company,
Epure for its more defensive business model and good net cash position.
Our final pick is Raffles Medical in light of the defensive nature of the healthcare
sector, the company’s strong operating cashflow and net cash position.
Yeo Kee Yan (65) 6398 7955 keeyan@dbsvickers.com

Ling Lee Keng (65) 6398 7970 leekeng@dbsvickers.com
Page 1
www.dbsvickers.com
Market Focus
Market Data
52-Week
Closed Chng Net -6 mth -12 mth
Indices 12 Dec 08 -1 mth -1 mth (%) -3 mth (%) (%) (%) High Low
FSSTI 1,740 (44) (2.4) (32.3) (42.4) (50.7) 3531 1474

FTSE Mid Cap 342 (27) (7.3) (40.7) (55.0) (61.7) 908 299
FTSE Small Cap 291 (15) (4.8) (38.4) (54.9) (66.5) 867 257
Transactions: YTD*
STI (bn) 63.3
FTSE Mid Cap (bn) 43.6
FTSE Small Cap (bn) 58.0
Source: Bloomberg
* Start 10 Jan 08
PERFORMANCE REVIEW
Relative Performance - Small cap picks vs FSTS & FSTM
Last quarter, in particular October, saw global equity indices 1.2
experience the worst fall in recent history, with the impact of
1.0
the global credit crisis deepening spurring the collapse of
more financial institutions. Concerted efforts by global 0.8
central banks to cut interest rates and to roll out economic 0.6
stimulus packages managed to prevent the market from free
0.4
falling. However, sentiment remained cautious.
0.2
Small cap stocks were hit harder, as a result of a flight to
0.0
quality. Against this backdrop, our small cap stock picks Sep-08 Oct-08 Nov-08
were not spared. Our small cap portfolio fell 32.7% Q-o-Q Celestial Ezra Pan United
on a price-weighted basis, vs 38.4% and 40.7% drop in the Parkway Life REIT FSTS FSTM
FS Small Cap Index (FSTS) and FS Mid Cap Index (FSTM) Source: Bloomberg, DBS Vickers
respectively.
STI vs FS Mid and Small Cap
Among our four picks, both Ezra and Celestial STI FTSE Small and
4,000 1000
mid Cap
underperformed the FSTS and FSTM most of the time. Ezra
900
was hit by falling oil prices and concerns about funding for 3,500
800
its high capex needs while margins for Celestial were
affected by high raw materials. High dividend yield stocks 3,000 700
Parkway Life REIT and Pan United Corp, outperformed the 600
market during the 3-month period. 2,500
500
400
2,000
300
1,500 200
J an-08 Mar-08 J un-08 Aug-08 Nov -08
FS STI FTSE Small Cap FTSE Mid Cap
Page 2
Market Focus
Average daily turnover volume eased from above 1.2bn to FTSE Volume Traded (mil shares)
around the 1bn mark shortly after the market recovered 3,000 m 50%
from its low in end October as sentiment remained cautious. 45%
Turnover for mid cap stocks accounted for an average of 2,500 40%
20% of total volume in 4Q08 while small cap stocks 35%
accounted for an average of 17% during the same period. 2,000 30%
25%
1,500 20%
15%
1,000 10%
5%
500 0%
J an-08 Mar-08 J un-08 Sep-08 Nov-08
Total V olume (LHS)

FTSE Small Cap V ol vs Tot V ol % (RHS)
FTSE Mid Cap V ol vs Tot V ol % (RHS)
GROWTH AND VALUATION
Growth and Valuation – Large Caps vs Small / Mid Caps

PE (x) Earnings Growth (%)
2007 2008F 2009F 2007 2008F 2009F
Basic Materials 22.5 6.1 3.3 -41% 267% 86%
Consumer Goods 19.9 7.7 11.6 2% 159% -34%
Consumer Services 8.1 10.3 10.9 21% -22% -5%
Financials 8.4 8.5 9.2 20% -2% -7%
Health Care 15.3 15.7 14.8 35% -3% 6%
Industrials 7.5 7.8 8.6 35% -3% -9%
Oil & Gas 2.3 4.9 5.1 79% -54% -4%
Real Estate 10.5 9.8 9.3 48% 8% 5%
REITS 10.5 9.1 9.3 27% 15% -2%
Technology 3.7 19.2 (7.7) 34% -81% -350%
Telecommunications 10.9 12.4 12.1 3% -12% 3%
Large Caps 9.2 9.2 10.1 21% -1% -8%
Basic Materials 5.2 4.6 4.4 47% 13% 4%

Consumer Goods 4.8 4.3 4.1 61% 12% 4%
Consumer Services 14.3 14.0 12.4 99% 2% 13%
Financials 4.5 4.0 3.7 128% 10% 9%
Health Care 11.8 11.3 9.9 36% 4% 14%
Industrials 7.0 6.0 5.8 99% 17% 2%
Oil & Gas 5.6 3.6 3.4 24% 54% 7%
Real Estate 4.8 6.7 5.0 48% -29% 34%
REITS 13.7 7.9 7.7 64% 74% 2%
Technology 5.0 5.8 7.5 169% -13% -23%
Telecommunications 6.0 6.3 7.8 -10% -5% -19%
Small / Mid Caps 6.3 5.9 5.5 63% 6% 9%
DBSV Universe 8.7 8.7 9.2 26% 0% -5%
Small Cap Ex Pty & Fin 6.0 5.3 5.2 70% 14% 2%
Small vs Large Caps -32% -36% -46%

Small Caps Ex Pty v Large Caps -34% -42% -48%
Source: DBS Vickers
Page 3
Market Focus
Market de-rated further in 4Q08. Our small/mid caps FY08 package) and SP Chemicals (takeover offer). Healthcare was
and FY09 PE declined to 6.0x and 5.5x as at end 4Q08 from generally more defensive in the down market.
7.9x and 6.2x respectively when compared to the previous
quarter. Small/mid caps continue to trade at much lower
valuation multiples compared to large caps, which are Small/Mid Cap Sector Performance (Sorted in ascending
trading at 9.5x FY08 and 10.2x FY09. Further earnings order on 3-month performance)
downgrades reduced growth to 6% FY08 and 9% FY09, Chng Chng Chng Chng
much lower than the 10% FY08 and 29% FY09 during 3Q. 1m 3m 6m 12m
Nevertheless, the revised earnings growth for small/mid caps Oil & Gas -3.5 -53.2 -72.3 -77.7
are still much better than zero growth for large caps in FY08 REITS -11.8 -47.2 -59.5 -65.9
and negative 7% growth in FY09. Real Estate -3.0 -47.0 -63.5 -76.9
Industrials -6.9 -43.4 -56.4 -64.8
Oil & Gas and Financials the worst hit. Oil & Gas, REITs and Total -4.5 -41.9 -58.9 -69.6
Real Estate were the worst hit sectors in 4Q08. Oil & Gas Financials -11.3 -40.1 -60.3 -67.8
sector eased 52.8% on a 3-mth basis on the back of more Telecommunications -9.5 -39.7 -48.6 -47.9
than 50% fall in oil prices and concerns of order Technology -12.3 -38.2 -51.5 -61.5
cancellations. Stocks like Jaya, Swiber and ASL Marine were Consumer Services 8.5 -33.8 -54.4 -61.0
among the top 20 most oversold stocks. REITS and Shipping Consumer Goods 1.7 -32.1 -54.8 -67.3
Trusts were hit by fears about re-financing issues arisingamid Health Care 6.6 -30.0 -44.1 -49.4
the current credit crisis. 35% of the most oversold stocks Basic Materials 0.7 -9.0 -44.4 -66.2
featured here are Shipping Trusts and REITS. Basic Materials’ Source: DBS Vickers
performance was skewed by Midas (beneficiary of stimulus
Small/Mid Cap 20 most oversold stocks in the past 3 months

Pric e/ Div
Mkt Pric e T arget BV Y ld Share Pric e
Company Cap (S$) Pric e % PE ( x ) (x ) (%) Perf ormanc e ( % )
(S$m) 12- Dec (S$) Upside Rc md 08F 09F 08F 08F 3M 6M 12M
J ay a Hldgs 227 0.30 0.23 -22% FV 1.5x 2.7x 0.5x 44.1% (73) (82) (83)
Asia Env ironment 45 0.11 0.10 -3% FV 4.2x 6.3x 0.3x 6.7% (64) (78) (88)
F rasers Commercial Trust 171 0.24 0.31 30% H 6.3x 8.0x 0.2x 24.5% (64) (71) (73)
Pacific Shipping Trust 119 US$ 0.14 US$0.52 271% B 3.3x 3.8x 0.3x 30.6% (63) (66) (67)
Rickmers Maritime 145 0.40 0.63 59% H 5.4x 5.8x 0.3x 32.2% (62) (65) (69)
Epure International 271 0.21 0.34 60% B 5.0x 4.2x 0.9x 0.0% (61) (58) (70)
Bany an Tree 305 0.40 0.37 -8% FV 12.8x 14.2x 0.5x 3.1% (60) (74) (78)
Swiber Hldgs 231 0.55 1.00 83% B 3.3x 2.2x 0.6x 0.0% (59) (79) (84)
Mapletree Logistics Trust 611 0.32 0.57 82% B 4.6x 5.9x 0.4x 22.4% (57) (65) (71)
CSE Global 204 0.40 0.80 100% B 4.0x 4.0x 1.3x 11.3% (56) (63) (68)
ASL Marine 133 0.44 0.84 91% B 2.6x 2.5x 0.6x 9.1% (55) (63) (71)
F irst Ship Lease 253 0.51 1.65 227% B 25.4x 93.7x 0.4x 33.9% (54) (58) (61)
China Sky Chemical F ibre 232 0.29 0.35 25% H 2.1x 2.3x 0.3x 7.3% (54) (68) (85)
Silv erlake Axis 112 0.10 0.13 30% FV 2.5x 6.6x 1.6x 18.6% (53) (70) (82)
Asia Enterprises 49 0.18 0.10 -43% FV 2.1x 1.9x 0.4x 18.8% (53) (57) (62)
Global Testing Corp 33 0.04 0.05 47% FV 8.2x nm 0.2x 0.0% (53) (65) (81)
CSM 470 0.19 0.38 105% H nm nm 0.2x 0.0% (53) (77) (82)
Tat Hong 296 0.60 0.75 26% B 3.3x 3.9x 0.8x 9.8% (52) (71) (81)
Suntec REIT 999 0.65 0.88 35% H 8.8x 7.4x 0.3x 15.8% (51) (58) (62)
K-Reit 392 0.60 0.93 55% H 18.4x 20.1x 0.2x 16.7% (51) (58) (72)
Source: DBS Vickers
Page 4
Market Focus
STRATEGY/THEMES AND STOCK PICKS susceptible to the economic slowdown compared to high-
end consumables. Hongxing offers good value at current
A Bear market rally Just as bull markets consolidate for value as stock is backed by 17Scts net cash per share and
breathers, so do counter-trend rallies interrupt bear markets. offering 16.5% EPS CAGR over FY09 and FY10.
As stocks reeled from a massive sell off across the board (2) Beneficiary of China’s massive USD583bil stimulus plan.
during 4Q08, there is optimism that stock prices have The recently announced stimulus package include plans for
touched a temporary floor following the US government’s environmental protection that could be beneficial for waste
efforts to save big corporations such as Citigroup and US and water treatment companies. Our second pick is leading
auto manufacturers, global government’s concerted efforts water and wastewater treatment company Epure. The
to pump prime their respective economies and unfreeze company has a strong net cash of 14cts/share, and is in a
credit markets (e.g. the USD 700bil bailout plan, China’s strong financial position which enables it to finance BOT
USD583bil economic stimulus and Singapore’s SGD2.3bil projects and future working capital through internally
stimulus plan to encourage bank to give credit). generated funds. Current valuation is compelling at 4.7x
Going ahead, investors can look forward to year-end FY09 PER.
window dressing activities and Singapore’s budget (3) Rebound in oil price lifts oversold O&M stocks Oil price
scheduled on January 22nd. , US President elect Obama’s has fallen nearly 70% since peaking out at USD147pbl. Our
pledge to revive the economy and create jobs should average oil price assumption for 2009 is USD60pbl, which is
continue to see bargain hunting on minor dips ahead of his about 40% higher compared to current price. Our technical
swearing in ceremony on January 20th next year. analyst sees strong support for oil price at USD38-40pbl.
Despite near-term positives, we remain mindful of the on- Our picks are Ezra and ASL Marine. We view Ezra’s recent
going credit crisis and the vulnerability of small companies. announcement to review its orders for 5 multi-functional
As banks impose stricter lending criterions, we prefer to stay support vessels positively as it signals a preference towards
away from companies with high gearing and poor operating cash conservation, thus improving on its current net debt
cash flows. position even as growth continues to be underpinned by
Focus on strong balance sheet Thus, in addition to attractive long-term charter contracts. ASL Marine’s strong balance
PE valuations, we think a strong balance sheet is a must. Our sheet and good earnings visibility from its large shipbuilding
additional criterions are companies with net cash (or slight order book coupled with sustained strong demand for ship
net debt), an Altman’s Z-score (a formula for predicting repair and chartering services justifies the company as our
bankruptcy, the lower the score, the higher chance of next pick in the O&M sector. ASL also offers an attractive
bankruptcy) of at least 2.0 and good operating cash flows. dividend yield of c. 11%.
There should be no sharp increase in debtor’s turnover days. (4) Healthcare sector as defensive Our final pick is Raffles
(1) Beneficiary of China’s focus on domestic consumption Medical. Besides the defensive nature of its business, the
China Hongxing is expected to benefit from the Chinese company boasts of a strong operating cash flow and has a
government’s initiatives to focus on domestic consumption. strong net cash position that should increase from S$9mil as
Its sportswear products, which cater to mid-to-low end of Sept08 to S$16mil by end 2008. Its healthy balance sheet
consumers in 2nd and 3rd tier cities in China, are less will see it through this period of uncertainty. It is trading at
its historical low valuation of c. 10x PE
.
1Q09 Small/Mid Cap Stock Picks
FYE Mkt Price Target EV/EBITDA P/BV Div Yld ROE Val/Day
Company Cap (S$) Price % PE (x) (x) (x) (%) (%) 6m
(S$m) 12-Dec (S$) Upside Rcmd 08E 09F 08E 08E 08E 08E ($000s)
ASL Marine Jun 133 0.44 0.84 91 Buy 2.6 2.5 2.0 0.6 9.1 31 253
China Hongxing Dec 533 0.21 0.33 56 Buy 5.0 4.3 1.0 0.6 4.0 13 6,719
Epure International Dec 271 0.21 0.34 60 Buy 5.0 4.2 1.5 0.9 0.0 20 469
Ezra Holdings Aug 404 0.69 1.25 81 Buy 5.0 4.5 4.6 0.7 26.1 55 4,545
Raffles Medical Dec 334 0.645 0.76 17 Buy 11.6 10.1 7.5 1.5 3.9 14 226
Source: DBS Vickers
Page 5
Market Focus
(www.thomson.com/financial); Factset (www.factset.com); Reuters (www.rbr.reuters.com); Capital IQ (www.capitaliq.com) and
Bloomberg (DBSR GO). For access, please contact your DBSV salesperson.
Securities (Singapore) Pte Ltd ("DBSVS") and an indirect wholly-owned subsidiary of DBS Vickers Securities Holdings Pte Ltd ("DBSVH"). [This
report is intended for clients of DBSV Group only and no part of this document may be (i) copied, photocopied or duplicated in any form by
any means or (ii) redistributed without the prior written consent of DBSVR.]
The research is based on information obtained from sources believed to be reliable, but we do not make any representation or warranty as to
its accuracy, completeness or correctness. Opinions expressed are subject to change without notice. This document is prepared for general
circulation. Any recommendation contained in this document does not have regard to the specific investment objectives, financial situation
and the particular needs of any specific addressee. This document is for the information of addressees only and is not to be taken in
substitution for the exercise of judgement by addressees, who should obtain separate legal or financial advice. DBSVR accepts no liability
owned subsidiary of DBS Bank Ltd. DBS Bank Ltd along with its affiliates and/or persons associated with any of them may from time to time
have interests in the securities mentioned in this document. DBSVR, DBSVS, DBS Bank Ltd and their associates, their directors, and/or
DBSVUSA does not have its own investment banking or research department, nor has it participated in any investment banking transaction as
a manager or co-manager in the past twelve months. Any US persons wishing to obtain further information, including any clarification on
disclosures in this disclaimer, or to effect a transaction in any security discussed in this document should contact DBSVUSA exclusively.
his/her compensation was, is, or will be, directly, or indirectly, related to specific recommendations or views expressed in this report. As of 5
Jan 2009, the analyst and his / her spouse and/or relatives who are financially dependent on the analyst, do not hold interests in the securities
recommended in this report (“interest” includes direct or indirect ownership of securities, directorships and trustee positions).
1. DBS Vickers Securities (Singapore) Pte Ltd and its subsidiaries do not have a proprietary position in the securities
recommended in this report as of 31 Dec 2008
broker-dealer, beneficially own a total of 1% or more of any class of common equity securities of the Pacific Shipping
Trust as of 5 Jan 2008
broker-dealer, may beneficially own a total of 1% or more of any class of common equity securities of Pacific Shipping
Trust as of 5 Jan 2009.
i. DBSVR, DBSVS, DBS Bank Ltd and/or other affiliates of DBSVUSA may have received compensation, within the past
from the ASL Marine,Parkway Life REIT,Pacific Shipping Trust, Mapletree Logistics Trust, Silverlake Axis
ii. DBSVUSA does not have its own investment banking or research department, nor has it participated in any
Page 6
Market Focus
rd
Tel. 65-6533 9688, Fax: 65-6226 8048
Page 7
Singapore Company Focus
Cosco Corporation
Bloomberg: COS SP | Reuters: COSC.SI
DBS Group Research . Equity 5 Jan 2009
FULLY VALUED S$0.925 Profit Warning

STI : 1,829.71
Cosco dropped a bombshell, indicating that 2008
Price Target : 12-month S$ 0.76 (Prev S$ 0.80) profits would be lower than 2007, due to provisions for
Reason for Report : Profit warning doubtful debts, cost overun and potential penalties for
Potential Catalyst: New contract wins, smooth execution delays. We cut our forecasts by 20% to 30% on lower
Analyst sales and margin assumptions, maintained Fully Valued.
Janice Chua +65 6398 7954
janicechua@dbsvickers.com
Could plunge into losses in 4Q08. As the group has
achieved net profits of S$326.5 up to 9months in 2008,
this implies that 4Q08 net profit is likely to be a loss or
at best, profits of less than S$10m vs consesnus
expectations of S$96m.
Price Relative
S$ R e la t iv e In d e x
Hit by provisions for debts, cost over-run and
penalties. Earnings were hit by :(1) Provisions for
8 .5 0 790
7 .5 0 690
6 .5 0 590 doubtful debts – includes provision for S$19m due for
5 .5 0
4 .5 0
490 repair works on three Russian vessels which defaulted,
3 .5 0
390
290
and MPF which went into bankruptcy. Delays in
2 .5 0
1 .5 0 190
payment will rise as shipowners are losing money due to
0 .5 0 90 the plunge in freight rates; (2) Cost overrun for
shipbuilding and offshore marine projects due to weak
2004 2005 2006 2007 2008
C o s c o C o r p o r a t io n ( L H S ) R e la t iv e S T I IN D E X ( R H S )
execution, higher steel prices, sub-contracting cost, and
additional development cost at Zhoushan. The group
Forecasts and Valuation provided for the 30% drop in steel prices over the past
quarter for its stockpile; (3) Potential penalties for
FY Dec (S$ m) 2007A 2008F 2009F 2010F delivery delays - it completed only one 57K bulk carrier
Turnover 2,262 3,469 4,391 3,996 in 2008 vs ten originally scheduled.
EBITDA 576 535 635 657
Pre-tax Profit 498 442 504 503 Clients push back vessel deliveries Cosco has
Net Profit 337 292 275 264
Net Pft (Pre Ex.) 337 292 275 264 rescheduled the delivery of seven bulk carriers, from
EPS (S cts) 15.0 13.1 12.3 11.8 2009/2010 to 2011/2012, on request from its clients.
EPS Pre Ex. (S cts) 15.0 13.1 12.3 11.8 With shipowners operating at a loss, we expect more
EPS Gth Pre Ex (%) 80 (13) (6) (4) cancellations, rescheduling, and bad debts.
Diluted EPS (S cts) 15.5 13.5 12.7 12.2
Net DPS (S cts) 7.0 7.3 8.2 9.2
BV Per Share (S cts) 42.0 48.1 53.1 56.6
Net profits forecasts cut by 20% to 30%. We cut our
PE (X) 6.2 7.1 7.5 7.8 sales estimates and now expect cancellations and delays
PE Pre Ex. (X) 6.2 7.1 7.5 7.8 affecting 40% of its order book (from 15% previously).
P/Cash Flow (X) 5.0 5.1 5.1 5.0 Including provisions and cut in margin assumptions, the
EV/EBITDA (X) 2.7 4.1 4.1 4.4 net impact is a 20% to 30% cut in earnings forecasts.
Net Div Yield (%) 7.6 7.9 8.9 10.0 Maintained Fully Valued, target price cut to 76cts based
P/Book Value (X) 2.2 1.9 1.7 1.6
Net Debt/Equity (X) CASH CASH CASH 0.0
on 4x its shipbuilding profits and 8x its shiprepair profits.
ROAE (%) 41.8 29.0 24.3 21.5
At A Glance
Earnings Rev (%): (29.2) (21.8) (16.8)
Consensus EPS (S cts): 17.8 15.7 14.8 Issued Capital (m shrs) 2,239
Mkt. Cap (S$m/US$m) 2,071 / 1,421
ICB Industry : Industrials Major Shareholders
ICB Sector: Industrial Engineering China Ocean Shipping (%) 53.4
Principal Business: Cosco Corp's core businesses include ship repair, SembCorp Marine (%) 5.0
shipbuilding, offshore and marine engineering, dry bulk shipping Free Float (%) 41.7
and shipping agency. Avg. Daily Vol.(‘000) 31,863
www.dbsvickers.com
ed: YM / sa: JC
Company Focus
Cosco Corporation
Income Statement (S$ m) Balance Sheet (S$ m)

FY Dec 2007A 2008F 2009F 2010F FY Dec 2007A 2008F 2009F 2010F
Turnover 2,262 3,469 4,391 3,996 Net Fixed Assets 1,479 1,814 2,129 2,429
Cost of Goods Sold (1,652) (2,868) (3,738) (3,353) Invts in Associates & JVs 2 3 3 4
Gross Profit 610 601 653 643 Other LT Assets 55 55 55 55
Other Opng (Exp)/Inc (115) (181) (154) (137) Cash & ST Invts 1,083 532 276 123
Operating Profit 495 420 500 506 Inventory 486 578 798 799
Other Non Opg (Exp)/Inc 0 0 0 0 Debtors 828 771 1,098 999
Associates & JV Inc 1 1 1 1 Other Current Assets 35 46 1 1
Net Interest (Exp)/Inc 3 22 4 (4) Total Assets 3,967 3,797 4,360 4,409
Exceptional Gain/(Loss) 0 0 0 0
Pre-tax Profit 498 442 504 503 ST Debt 112 112 112 112
Tax (20) (47) (71) (74) Other Current Liab 2,446 2,037 2,330 2,135
Minority Interest (142) (103) (158) (164) LT Debt 65 65 65 65
Preference Dividend 0 0 0 0 Other LT Liabilities 42 42 42 42
Net Profit 337 292 275 264 Shareholder’s Equity 940 1,076 1,188 1,268
Net Profit before Except. 337 292 275 264 Minority Interests 363 466 624 788
EBITDA 576 535 635 657 Total Cap. & Liab. 3,967 3,797 4,360 4,409
Sales Gth (%) 86.1 53.4 26.6 (9.0) Non-Cash Wkg. Capital (1,097) (642) (433) (336)
EBITDA Gth (%) 61.1 (7.1) 18.6 3.3 Net Cash/(Debt) 906 355 100 (54)
Opg Profit Gth (%) 67.6 (15.2) 19.0 1.3
Net Profit Gth (%) 63.9 (13.1) (6.0) (3.8)
Effective Tax Rate (%) 3.9 10.6 14.2 14.8
Cash Flow Statement (S$ m) Rates & Ratio
Pre-Tax Profit 498 442 504 503 Gross Margins (%) 27.0 17.3 14.9 16.1
Dep. & Amort. 81 115 135 150 Opg Profit Margin (%) 21.9 12.1 11.4 12.7
Tax Paid (23) (20) (47) (71) Net Profit Margin (%) 14.9 8.4 6.3 6.6
Assoc. & JV Inc/(loss) (1) (1) (1) (1) ROAE (%) 41.8 29.0 24.3 21.5
Chg in Wkg.Cap. 1,007 (482) (234) (100) ROA (%) 11.5 7.5 6.7 6.0
Other Operating CF 24 0 0 0 ROCE (%) 33.3 22.9 22.6 20.0
Net Operating CF 1,586 56 357 481 Div Payout Ratio (%) 46.5 55.7 67.1 78.0
Capital Exp.(net) (462) (250) (250) (250) Net Interest Cover (x) NM NM NM 124.5
Other Invts.(net) 0 (200) (200) (200) Asset Turnover (x) 0.8 0.9 1.1 0.9
Invts in Assoc. & JV 0 0 0 0 Debtors Turn (avg days) 88.4 84.1 77.7 95.8
Div from Assoc & JV 1 0 0 0 Creditors Turn (avg days) 342.3 287.9 208.8 238.9
Other Investing CF 14 0 0 0 Inventory Turn (avg days) 79.9 70.6 69.7 91.0
Net Investing CF (447) (450) (450) (450) Current Ratio (x) 1.0 0.9 0.9 0.9
Div Paid (119) (157) (163) (184) Quick Ratio (x) 0.7 0.6 0.6 0.5
Chg in Gross Debt (230) 0 0 0 Net Debt/Equity (X) CASH CASH CASH 0.0
Capital Issues 27 0 0 0 Capex to Debt (%) 262.0 141.6 141.6 141.6
Other Financing CF (13) 0 0 0 N. Cash/(Debt)PS (S cts) 40.5 15.9 4.5 (2.4)
Net Financing CF (334) (157) (163) (184) Opg CFPS (S cts) 25.9 24.0 26.4 25.9
Net Cashflow 805 (551) (255) (154) Free CFPS (S cts) 50.2 (8.7) 4.8 10.3
Quarterly / Interim Income Statement (S$ m) Segmental Breakdown
FY Dec 4Q2007 1Q2008 2Q2008 3Q2008 FY Dec 2007A 2008F 2009F 2010F
Turnover 847 718 1,047 988 Revenues (S$ m)

Cost of Goods Sold (664) (517) (802) (786) Charter 208 253 139 111
Gross Profit 182 201 245 202 Shipping agency 22 22 23 24
Other Oper. (Exp)/Inc (36) (55) (38) (27) Ship repair and marine 2,032 3,193 4,229 3,861
Operating Profit 146 145 208 175
Other Non Opg (Exp)/Inc 0 0 0 0 Others 0 0 0 0
Associates & JV Inc 0 0 0 0 Total 2,262 3,469 4,391 3,996
Net Interest (Exp)/Inc 3 3 10 7
Exceptional Gain/(Loss) (2) 0 0 0
Pre-tax Profit 148 149 218 183
Tax 9 (21) (22) (24)
Minority Interest (40) (44) (67) (45)
Net Profit 117 84 129 114
Net profit bef Except. 118 84 129 114
EBITDA 170 173 235 203
Sales Gth (%) 54.8 (15.2) 45.9 (5.7)

EBITDA Gth (%) 1.9 1.5 35.9 (13.4)
Opg Profit Gth (%) 2.3 (0.5) 42.8 (15.6)
Net Profit Gth (%) 19.2 (28.0) 53.4 (11.5)
Gross Margins (%) 21.5 28.0 23.4 20.4
Opg Profit Margins (%) 17.3 20.3 19.8 17.7
Net Profit Margins (%) 13.8 11.7 12.3 11.5
Source: Company, DBS Vickers
Page 2
Company Focus
Cosco Corporation
(www.thomson.com/financial); Factset (www.factset.com); Reuters (www.rbr.reuters.com); Capital IQ (www.capitaliq.com) and Bloomberg
(DBSR GO). For access, please contact your DBSV salesperson.
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[This report is intended for clients of DBSV Group only and no part of this document may be (i) copied, photocopied or duplicated in any
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1. DBS Vickers Securities (Singapore) Pte Ltd and its subsidiaries do not have a proprietary position in the mentioned
company as of 31 Dec 2008.
from the mentioned company.
Page 3
Company Focus
Cosco Corporation
rd
Tel. 65-6533 9688, Fax: 65-6226 8048
Page 4
Singapore Company Focus
ST Engineering
Bloomberg: STE SP | Reuters: STEG.SI
BUY S$2.46 STI : 1,829.71 Holding Fort

Upgrade from HOLD
Price Target : 12-month S$ 2.80 We upgrade ST Engineering to BUY with a target price
Reason for Report : Company Update of S$2.80. Amidst the worsening global economic
Potential Catalyst: Announcement of acquisitions
outlook, STE has sustained its reputation of being a
Analyst defensive counter, with a slew of new contract wins in
Janice Chua +65 6398 7954 recent months across different segments. In spite of
janicechua@dbsvickers.com possible slowdowns in its Aerospace and Marine
Suvro Sarkar +65 6398 7973 segments, we are positive on the stock given 1) its
suvro@dbsvickers.com ability to boost growth through M&A, 2) a relatively
secure dividend yield of 7%, 3) record orderbook of
S$10b and 4) cash and cash equivalents of S$1b.
Price Relative
Robust orderbook of S$10b will drive revenues.
S$ R e la t iv e In d e x
Contract wins have been stable across the Group's

4 .3 0
208
subsidiaries in recent months, demonstrating the

3 .8 0 188
168
3 .3 0
148 defensive nature of the Group's diversified earnings
2 .8 0 128
108
stream. It is also in line with our expectation that public
2 .3 0
88 spending in defence, transport, and infrastructure
1 .8 0
2004 2005 2006 2007 2008
68
projects will mainly drive revenue growth over the next
S T E n g in e e r in g (L H S ) R e la t iv e S T I IN D E X (R H S ) two years.
US operations may recover faster than expected.
Forecasts and Valuation Even though major US airlines have pared capacity in
FY Dec (S$ m) 2007A 2008F 2009F 2010F
FY08, jet fuel prices have corrected significantly and airline
industry losses, going forward, will be lower than
Turnover 5,051 5,327 5,555 5,751
EBITDA 780 772 808 841 previously expected. Hence, the demand for 3rd-party
Pre-tax Profit 638 603 644 674 MRO work may recover earlier than projected.
Net Profit 504 491 506 529
Net Pft (Pre Ex.) 504 491 506 529 Upgrade to BUY, attractive dividend yield of 7%.
EPS (S cts) 16.9 16.4 17.0 17.7 The group is focused on enhancing value for
EPS Pre Ex. (S cts) 16.9 16.4 17.0 17.7 shareholders and STE has been paying out 100% of its
EPS Gth Pre Ex (%) 12 (3) 3 5
Diluted EPS (S cts) 16.9 16.4 17.0 17.7 earnings as dividends since 2002. As a result, the Group
Net DPS (S cts) 16.9 16.4 17.0 17.7 has been able to generate very high ROEs in the range
BV Per Share (S cts) 54.7 54.3 54.8 55.6 of 30%, while still retaining cash and cash equivalents
PE (X) 14.5 15.0 14.5 13.9 of approximately S$1b at the end of 3Q08. We believe
PE Pre Ex. (X) 14.5 15.0 14.5 13.9
P/Cash Flow (X) 12.4 12.3 11.9 11.4
this strong cash holding will present potential growth
EV/EBITDA (X) 8.8 8.7 8.4 8.2 upside – in the form of good acquisitions at distressed
Net Div Yield (%) 6.9 6.7 6.9 7.2 valuations.
P/Book Value (X) 4.5 4.5 4.5 4.4
Net Debt/Equity (X) CASH CASH CASH CASH At A Glance
ROAE (%) 31.5 30.2 31.1 32.1 Issued Capital (m shrs) 2,999
Mkt. Cap (S$m/US$m) 7,377 / 5,060
Earnings Rev (%): - (0.8) - Major Shareholders
Consensus EPS (S cts): 16.6 17.1 18.9 Temasek Holdings Pte Ltd (%) 50.3
Aberdeen Asset Management 8.1
ICB Industry : Industrials
ICB Sector: Aerospace & Defense The Capital Group Companies 7.0
Principal Business: An integrated engineering group providing Free Float (%) 34.6
solutions and services in aerospace, electronics, land systems and Avg. Daily Vol.(‘000) 5,250
marine sectors.
www.dbsvickers.com
ed: YM / sa: JC
Company Focus
ST Engineering
Pace of order wins unaffected by global slowdown Orderbook at the end of period
ST Engineering capped off the year 2008 with its first
contract from a Singapore Integrated Resort – The Resorts 12.0
World at Sentosa – to build an Integrated Security System, an Competitive Strengths 9.7 9.6
9.9 10.0
10.0 9.5 9.3 9.5
IT Infrastructure System and a Carpark Guidance & Payment 9.2
System. The contract is worth S$86m and will take STE’s 8.0 7.4
outstanding orderbook at the end of FY08 to more than

S$10b. Apart from this, STE has also been awarded contracts 6.0 5.3 5.4
4.6
to supply the UK Defence Ministry with All Terrain Vehicles
4.0
and 40mm ammunition (S$400m), build warships for the Thai
Navy (S$200m) and build communication systems for the LTA 2.0
(S$160m) – to name a few – in recent months.

0.0
FY03 FY04 FY05 FY06 1Q07 2Q07 3Q07 4Q07 1Q08 2Q08 3Q08 4Q08
In all, STE won about S$1b worth of new orders each in
3Q08 and 4Q08, thereby demonstrating its resilient business Source: Company
model. Though FY07 remains the record year in terms of
order wins – largely owing to the aircraft conversion orders US aerospace operations may recover faster than expected.
from Fedex and Boeing/ ANA – FY08 order wins of S$2.7b is IATA’s recent forecast for North American carriers paints a
highly commendable in the face of a global meltdown. better picture than before, with 2009 industry losses
expected to be lower than that in 2008. Carriers in this region
New order wins as announced were among the hardest hit by high fuel prices, but are now
expected to post a loss of about US$4b in 2008, down from
4500 an earlier projection of US$6-7b of losses. An early 10-20%
3877
4000 domestic capacity reduction has given the region’s carriers a
3500 head start in combating the recession-led fall in demand. The
3000 2603 2670 lack of hedging is also allowing North American carriers to
2500 now take full advantage of the significantly lower jet fuel
1752 1781
2000
prices. Hence, we believe the demand for 3rd party MRO
1500
works in the US may recover earlier than expected.
1000
500
Prototyping losses should be avoided in FY09
0
2004 2005 2006 2007 2008 Pre-tax margins in the Aerospace segment in FY08 will be hit
by high prototyping costs as the unit develops its Boeing 757
Source: Company and 767 passenger-to-freighter (“PTF”) conversion
capabilities. However, we believe that the PTF conversion
Record outstanding orderbook of S$10b provides for steady program should start to contribute positively in FY09, as costs
earnings visibility are incrementally lowered further along the learning curve,
Over the last 8 quarters – since the jump in orderbook in after another 3 units are delivered in 4Q08.
1Q07 from about S$7.4b to S$9.7b – the outstanding
orderbook has remained largely stable, providing steady Cash and cash equivalents of S$1b inspires confidence
earnings visibility for forthcoming quarters. As evident from A strong balance sheet and excellent cash flows have helped
the last two quarters, we expect public spending in defence, the Group maintain a strong cash hoard of approximately
transport, and infrastructure projects will mainly drive S$1b, at the end of 3Q08. Only about S$100m of this
orderbook and revenue growth over the next two years. constitutes investment assets, of which about S$70m is in the
Management expects a year-end orderbook in excess of form of fixed income securities and only S$30m is exposed to
S$10b, which is the highest level ever. the volatile equity markets. Hence, risks to the S$1b cash
holding are relatively minimal.
Page 2
Company Focus
ST Engineering
What this implies – secure dividends, M&A that the current market environment provides the Group with
The group is focused on enhancing value for shareholders an opportunity to provide further growth upside by pursuing
and STE has been paying out 100% of its earnings as good acquisitions at distressed valuations.
dividends since 2002. Despite this, the Group has been able
Upgrade to BUY, unchanged target price of S$2.80.
to retain cash and cash equivalents of approximately S$1b at
Debunking the conglomerate discount theory, investors have
the end of 3Q08, while generating very high ROEs in the
traditionally accorded ST Engineering a premium to the STI
range of 30%. Thus, we forecast a relatively secure dividend
and our target price is based on 16x FY09 earnings, at the
yield of 7.2% for the full year of 2008 and 7.5% in FY09.
lower end of its forward PE valuation band. In light of
The Group has historically made timely acquisitions like SAS potentially stable earnings, attractive dividend yield and
Components and VT Halter Marine, as well as investments in potential growth upside through M&A; we upgrade the stock
JVs like STARCO and STATCO in China. Hence, we believe to BUY.
STE Forward PE Band (2001 – 2008)
4.5
4.0 24x
3.5 21x
3.0 18x
2.5 15x
2.0 12x
1.5
1.0
0.5
0.0
Jan-01
Jan-02
Jan-03
Jan-04
Jan-05
Jan-06
Jan-07
Jan-08
Jul-01
Jul-02
Jul-03
Jul-04
Jul-05
Jul-06
Jul-07
Jul-08
Page 3
Company Focus
ST Engineering
Appendix 1: List of major contracts secured in FY08
Date Description of contract Division Date of Completion Value (S$m)
12-Feb 2 PSVs for L&M Botruc Rental Marine 2010 78

18-Feb Maintenance of ATC system for CAAS Electronics 2023 52
20-Feb Extension of Flybe maintenance contract Aerospace 2016 232
20-Feb Delivery of mortar system for Middle East customer Kinetics 2011 45
20-Feb Supply of 40mm ammunition to UK MOD Kinetics 2009 43
20-Feb Outfitting of seismic vessel for Waveship Marine 2H08 28
20-Feb Engine maintenance contract with Comair Aerospace 2016 87
24-Apr Develop key systems for Thales ATC contract Electronics 2012 37
7-May Build AHTS for Ezra Marine 2H09 26
30-May Upgrade Derrick barge for Clough Java Offshore Marine 1H09 29
5-Jun Guangzhou Metrro Line contract Electronics Oct-10 18
16-Jun Provide taxi management system in Sharjah Electronics Oct-09 12
18-Jul Build an Ice-Class Diving Support Vessel Marine 2H10 128
7-Aug Renewed component supply contract with Polish Airlines Aerospace 2011 19
1-Sep Half height platform doors for MRT stations for LTA Electronics 2012 112
16-Sep Provide RSAF with aircraft and training Aerospace 2032 105
23-Sep Heavy maintenance works for SIA leased fleet Aerospace 2016 -
29-Sep Phase II of Egyptian Navy FMC contract Marine 2012 577
16-Oct Deliver 8600 rugged testers for US Army Kinetics 2009 86
7-Nov Build communication systems for LTA Electronics 2016 160
11-Nov Design and build Landing Platform Dock Marine 2H12 200
27-Nov Maintenance of 4 Indonesian Air Force aircraft Aerospace 2H11 75
1-Dec Build seismic vessel for Swire Pacific Marine 2H10 30
18-Dec Supply of Bronco Carriers to UK MOD Kinetics 2010 330
19-Dec Supply of 40mm ammunition to UK MOD Kinetics 1H11 77
29-Dec Integrated security system for Sentosa IR Electronics Dec-10 86
Total 2670
Source: Company
Page 4
Company Focus
ST Engineering
Appendix 2: Quarterly cash flow statements
FY Dec (m) 1Q08 2Q08 3Q08
Pre-tax Profit 156.4 151.1 144.3

Tax Paid (6.9) (47.5) (35.3)
Depreciation & Amortization 37.7 37.3 38.9
Associates & JVs Inc (8.5) (7.2) (13.1)
Other Non-Cash Adjustments 17.5 24.9 26.3
Changes in Non-Cash Work Cap 65.5 (146.7) (60.6)
Cash From Operations 261.6 11.9 100.5
Net Change in Capex (49.1) (29.5) (32.8)

Net Change In Investments 61.8 0.5 6.1
Net Change in Investments in Assoc & JVs 0.0 (2.7) 0.0
Dividends received from Associates & JVs 28.5 4.9 5.2
Other Investing Activities (120.6) (59.8) (3.0)
Cash from Investing Activities (79.4) (86.7) (24.4)
Dividends Paid (0.8) (445.8) (89.9)

Net Change in Gross Debt 6.9 35.5 (14.3)
Capital Issues 17.7 9.1 2.1
Other Financing Activities (26.0) (24.2) 3.2
Cash from Financing Activities (2.2) (425.3) (99.0)
Currency Adjustments (13.0) (3.0) 12.0

Net Changes in Cash / ST Investment 167.2 (503.1) (11.0)
Cash/ST Investment at beginning of period 1,282.7 1,449.9 946.7

Cash/ST Investment at end of period 1,449.9 946.7 935.8
Source: Company
Operating cash flows relatively healthy The Group paid out FY07 final dividends amounting to
The Group has managed to deliver healthy operating cash S$446 m in 2Q08. The Group also declared an interim
flows over the first three quarters of 2008, with healthy dividend of 3 cents per share in 2Q08, which should be paid
profits compensating for working capital outflows – which out in 4Q08. FY08 cumulative dividends are expected to be
resulted from decreases in creditors and accruals – in 2Q08 100% of net profits – we expect the group to declare final
and 3Q08. DPS of 13cts, to be paid in May 2009.
FY07 final dividend paid out in 2Q08, expect final DPS of

13cts to be declared in Feb 2009.
Page 5
Company Focus
ST Engineering
Income Statement (S$ m) Balance Sheet (S$ m)

Cost of Goods Sold (3,923) (4,182) (4,333) (4,486) Invts in Associates & JVs 268 308 350 393
Gross Profit 1,128 1,145 1,222 1,265 Other LT Assets 810 810 810 810
Other Opng (Exp)/Inc (568) (580) (635) (621) Cash & ST Invts 1,468 1,637 1,582 1,539
Operating Profit 560 566 587 645 Inventory 1,228 1,296 1,351 1,399
Other Non Opg (Exp)/Inc 39 20 29 0 Debtors 954 1,019 1,063 1,100
Net Interest (Exp)/Inc (8) (22) (13) (13) Total Assets 6,043 6,440 6,575 6,705
Pre-tax Profit 638 603 644 674 ST Debt 859 859 859 859
Net Profit 504 491 506 529 Shareholder’s Equity 1,633 1,620 1,635 1,658
Net Profit before Except. 504 491 506 529 Minority Interests 147 168 190 213
EBITDA 780 772 808 841 Total Cap. & Liab. 6,043 6,440 6,575 6,705
Sales Gth (%) 12.6 5.5 4.3 3.5 Non-Cash Wkg. Capital (409) (664) (662) (661)
EBITDA Gth (%) 11.1 (1.0) 4.7 4.1 Net Cash/(Debt) 606 775 721 677
Opg Profit Gth (%) 17.9 1.0 3.8 9.7
Net Profit Gth (%) 13.1 (2.6) 3.2 4.5
Cash Flow Statement (S$ m) Rates & Ratio
Pre-Tax Profit 638 603 644 674 Gross Margins (%) 22.3 21.5 22.0 22.0
Assoc. & JV Inc/(loss) (47) (40) (41) (42) ROAE (%) 31.5 30.2 31.1 32.1
Chg in Wkg.Cap. (8) 255 (1) (1) ROA (%) 8.7 7.9 7.8 8.0
Other Operating CF 55 0 0 0 ROCE (%) 15.2 15.2 15.2 16.4
Net Operating CF 668 874 637 664 Div Payout Ratio (%) 100.0 100.0 100.0 100.0
Capital Exp.(net) (165) (200) (200) (200) Net Interest Cover (x) 71.0 25.6 44.9 49.3
Other Invts.(net) 112 0 0 0 Asset Turnover (x) 0.9 0.9 0.9 0.9
Invts in Assoc. & JV 40 (50) (50) (50) Debtors Turn (avg days) 65.5 67.6 68.4 68.6
Div from Assoc & JV 24 49 49 49 Creditors Turn (avg days) 137.9 140.9 141.8 142.2
Other Investing CF (4) 0 0 0 Inventory Turn (avg days) 112.3 114.2 115.6 115.9
Net Investing CF 6 (201) (201) (201) Current Ratio (x) 1.1 1.0 1.0 1.0
Div Paid (508) (503) (491) (506) Quick Ratio (x) 0.6 0.6 0.6 0.6
Chg in Gross Debt (10) 0 0 0 Net Debt/Equity (X) CASH CASH CASH CASH
Capital Issues 94 0 0 0 Capex to Debt (%) 19.2 23.2 23.2 23.2
Other Financing CF (102) 0 0 0 N. Cash/(Debt)PS (S cts) 20.3 26.0 24.2 22.7
Net Financing CF (526) (504) (491) (506) Opg CFPS (S cts) 22.7 20.7 21.4 22.3
Net Cashflow 148 169 (55) (43) Free CFPS (S cts) 16.9 22.6 14.6 15.5
Quarterly / Interim Income Statement (S$ m) Segmental Breakdown
FY Dec 4Q2007 1Q2008 2Q2008 3Q2008 FY Dec 2007A 2008F 2009F 2010F
Turnover 1,296 1,315 1,300 1,382 Revenues (S$ m)

Cost of Goods Sold (999) (1,021) (1,006) (1,102) Aerospace 1,835 1,918 1,959 1,982
Gross Profit 297 295 294 280 Electronics 1,023 1,119 1,211 1,253
Other Oper. (Exp)/Inc (159) (154) (146) (142) Land Systems 1,178 1,320 1,411 1,547
Operating Profit 138 141 149 138 Marine 863 804 788 763
Other Non Opg (Exp)/Inc 30 12 1 (1) Others 152 167 186 206
Net Interest (Exp)/Inc (2) (4) (5) (6) PBT (S$ m)
Exceptional Gain/(Loss) 0 0 0 0 Aerospace 341 304 307 328
Pre-tax Profit 178 156 151 144 Electronics 115 113 122 126
Tax (26) (31) (29) (10) Land Systems 80 102 118 128
Minority Interest (5) (3) (2) (5) Marine 97 79 92 86
Net Profit 146 123 120 129 Others 5 5 6 6
Net profit bef Except. 146 123 120 129 Total 638 603 644 674
EBITDA 207 198 194 190 PBT Margins (%)
Aerospace 18.6 15.9 15.7 16.5
Sales Gth (%) 4.8 1.5 (1.1) 6.3 Electronics 11.3 10.1 10.1 10.0
EBITDA Gth (%) 7.9 (4.1) (2.4) (2.1) Land Systems 6.8 7.8 8.3 8.3
Opg Profit Gth (%) (3.3) 1.9 5.7 (6.9) Marine 11.2 9.8 11.7 11.2
Net Profit Gth (%) 16.6 (16.3) (2.1) 7.5 Others 3.3 3.0 3.0 3.0
Gross Margins (%) 22.9 22.4 22.6 20.3 Total 12.6 11.3 11.6 11.7
Page 6
Company Focus
ST Engineering
company as of 31 Dec 2008
Page 7
Company Focus
ST Engineering
rd
Tel. 65-6533 9688, Fax: 65-6226 8048
Page 8
Malaysia Company Focus
AMMB Holdings
Bloomberg: AMM MK | Reuters: AMMB.KL
BUY RM2.51 KLCI : 894.36 Inflexion point

Price Target : 12-month RM 2.90 We believe AMMB has reached an inflexion point in
Reason for Report : Company update terms of valuation. It hit its trough P/BV multiple of 0.7x
Potential Catalyst: Capturing synergies with new shareholder in Nov-08, the lowest since 1999. We believe there is no
Analyst premium attributed to AMMB for ANZ’s presence in
Sue Lin Lim +603 2711 0971 terms of management and expertise. Buy AMMB with a
suelin@hwangdbsvickers.com.my target price of RM2.90, which implies 1.0x CY09 BV.
“Recipients of this report, received from DBS Vickers Research
(Singapore) Pte Ltd (“DBSVR”), are to contact DBSVR at +65 6398 7954
in respect of any matters arising from or in connection with this report.” Strategies intact but execution could be delayed
We believe the strategies put in place by management
are intact. Its focus is to de-risk, diversify and grow
Price Relative
RM
dynamically. Nevertheless, the challenging outlook in
2009 could see some of AMMB’s strategies bear fruit
Relative Index
5.30 219
4.80 199
179
later than expected. There have been changes to ANZ
representatives in AMMB, but it is more to beef up the
4.30
159
3.80
3.30
139
119
necessary expertise in the respective areas of focus.
2.80
99
2.30 79
1.80 59
Different profile since crisis
2004 2005 2006 2007 2008
Asset quality is expected to be generally stable, but
AMMB Holdings (LHS) Relative KLCI INDEX (RHS)
management did not discount a possible uptick in the
NPL ratio in FY10. We expect NPL ratio of 3.0% in
Forecasts and Valuation FYMar09 and 3.1% for FYMar10. AMMB’s provision
charge-off rate ballooned to 6.84% in 1998 after it was
FY Mar (RM m) 2008A 2009F 2010F 2011F
severely hit by chunky NPLs. But now, AMMB’s loan
Pre-prov. Profit 1,814 1,499 1,569 1,614
Net Profit 669 795 845 918
book has flipped completely with 70% retail loans
Net Pft (Pre Ex.) 669 795 845 918 compared to 80% corporate loans during the crisis.
EPS (sen) 24.6 29.2 31.0 33.7
EPS Pre Ex. (sen) 24.6 29.2 31.0 33.7 Valuations may have bottomed out
EPS Gth Pre Ex (%) (376) 19 6 9
Diluted EPS (sen) 24.6 29.2 31.0 33.7 Maintain Buy with target price at RM2.90 based on the
PE Pre Ex. (X) 10.2 8.6 8.1 7.4 Gordon Growth Model, implying 1.0x CY09 BV. The
Net DPS (sen) 4.3 7.3 7.8 8.4 market has not imputed any ANZ premium in AMMB’s
Div Yield (%) 1.7 2.9 3.1 3.4
valuation. We believe AMMB’s P/BV valuations have
ROAE Pre Ex. (%) 11.1 10.6 10.5 10.5
ROAE (%) 11.1 10.6 10.5 10.5 bottomed out after hitting a low of 0.7x recently. We
ROA (%) 1.0 1.0 1.0 1.0 reduced our forecasts by 2-3% to reflect higher NPL
BV Per Share (sen) 263 285 308 334 ratios in FY Mar 10-11.
P/Book Value (x) 1.0 0.9 0.8 0.8
Earnings Rev (%): 0.0 (2.2) (2.7) At A Glance

Consensus EPS (sen): 28.0 27.4 32.5 Issued Capital (m shrs) 2,723
Mkt. Cap (RMm/US$m) 6,835 / 1,971
ICB Industry : Financials Major Shareholders
ICB Sector: Banks ANZ Funds (%) 19.7
Principal Business: Banking and Finance
AmCorpGroup (%) 17.6
EPF (%) 9.2
Free Float (%) 53.5
Avg. Daily Vol.(‘000) 6,629
“In Singapore, this research report or research analyses may only be distributed to
Institutional Investors, Expert Investors or Accredited Investors as defined in the Securities
and Futures Act, Chapter 289 of Singapore.”
www.dbsvickers.com
ed: SGC / sa: WMT
Company Focus
AMMB Holdings
Highlights Restructuring of insurance business. AMMB announced that its

70%-owned subsidiary, AmG Insurance Bhd ("AmG"), had
Reconfiguring business focus. Management highlighted its entered into a non-binding Memorandum of Understanding
strategic focus for FY10-11 that includes: (i) building up its with MAA Holdings and MAA Assurance in respect of the
deposits base, especially low cost deposits, (ii) increasing proposed acquisitions. The proposal involves AmG acquiring
transactional deposits to enable AMMB to expand its cash the general insurance business of MAA Assurance and a 4.9%
management business, cross-sell and grow non-interest equity stake in MAA Takaful. Separately, Friends Provident plc
income, (iii) further expansion of its insurance business, and will buy a 49% stake in AmAssurance Bhd, which would allow
(iv) leveraging on the technical services JV with ANZ to AmAssurance to grow AMMB’s life insurance segment. As part
diversify revenue through forex and derivatives. of AMMB’s internal restructuring of its insurance businesses,
Management also said that it would reduce focus on AMMB had in 2Q08 announced the establishment of AmG
origination activities because this segment of the capital Insurance to undertake AmAssurance’s (AMMB’s 70%
market is expected to remain subdued. But if opportunities subsidiary) insurance business with the plan to split its life and
arise, it would enhance its distribution channels and ensure general insurance business into two entities.
optimal pricing for distribution. We note that AMMB’s path
for expansion tracks that of ANZ from 2001-2004. Insurance business contributed c.12% of AMMB’s operating
profit. The restructuring is positive for AMMB, allowing it to
Improving deposit mix is key priority. AMMB’s low cost widen its insurance product offerings. For one, AMMB will
deposits now comprise 13% of total deposits; it is targeting get a ready customer base from MAA’s general insurance
25%. We think it is crucial to not just ramp up low cost business. And the small stake in MAA Takaful would at least
deposits, but to be able to retain them. AMMB is adopting a give AMMB a toehold into the takaful business, while
“AAA” strategy in deposit generation: (i) acquisition – Friends Provident plc will help AMMB to further enhance its
where it aims to focus on mass affluent segments and life insurance business. AMMB’s insurance business used to
payroll crediting facilities, (ii) activation – to provide contribute up to c.12% of operating profit, but could grow
convenience and simplified services, and (iii) anti-attrition – with these new collaborations.
to reduce dormant and account closures. We understand
that AMMB is actively bringing new deposit products to the Looking back. AMMB suffered severe losses during the Asian
market and leveraging on ANZ’s technical expertise for new crisis due to its exposure to large corporate loans. In FY98, it
product development and deposit expansion programs. had to make a c.RM2.1bn provision or a charge-off rate of
6.84%, which resulted in a RM1.2bn loss for the year. But
Enhancing distribution network. AMMB aims to expand its since then, AMMB’s loan composition for retail and non-retail
branch network from 186 to at least 200 branches and ATM loans has changed. This is also the reason why we believe NPLs
network by another 850 machines by 2011. AMMB has and asset quality will not deteriorate to levels during the crisis
inked a strategic tie up with 7-11 (a 24-hour convenience period. AMMB’s NPLs and charge-off rates also shot up after
store) to house up to 400 ATM machines in selected the acquisition of MBf Finance in 2003.
strategic store locations by 2010.
AMMB: Retail and non-retail loan breakdown
Focus on business banking. AMMB’s key growth area will be
100%
the business banking division. It plans to build and improve 90%
customer relationships and expand referrals from existing 80%
70%
customers. This would also be a good source of low cost 60%
deposits and non-interest income, especially from the cash 50%
40%
management business. 30%
20%
Scaling down IB business; focus on other fee-based business. 10%

0%
Given the soft capital markets, AMMB could scale down its
FY97
FY98
FY99
FY00
FY01
FY02
FY03
FY04
FY05
FY06
FY07
FY08
origination business. The set-up of the forex and derivatives

unit in collaboration with ANZ is earmarked to be the key Retail loans (%) Non-retail loans (%)
driver of non-interest income growth. Source: Company data; DBS Vickers
Page 2
Company Focus
AMMB Holdings
goods and agriculture segments. But it might try to avoid

AMMB: Provision charge-off rate trend large loans (which it was exposed to pre-crisis).
8.0%
7.0% Peak of NPLs Malaysia: Mortgage market share (as at Sep-08)

during crisis
6.0% i d
18% 16%
5.0%
Final round of 16% 15%
4.0% kitchen sinking 13%
14%
3.0% Post MBf
12%
acquisition
2.0% 10%
7% 7%
1.0% 8% 6%
0.0% 6%
4% 3%
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
2%
Source: Company data; DBS Vickers 0%
P ublic B CHB M aybank RHB Cap Ho ng AM M B EON Cap
B ank Leo ng
AMMB: (Net) NPL ratio trend
Source: Company data; DBS Vickers
20.0%
18.0%
Expect loan yields to increase. Focusing on flight to quality
16.0%
14.0%
loans will result in better loan yields. But we have not fully
12.0% factored in better loan yields in our forecasts because we are
10.0% unsure of the time frame at this juncture. As such, we are still
8.0% forecasting a marginal decline in NIMs from 2.28% in
6.0% FYMar09 to 2.27% in FYMar10 and to 2.21% in FYMar11.
4.0%
2.0%
Key stress segments highlighted. Management identified
0.0%
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 key stress areas that included unsecured lending, credit
cards and mortgages, but these had not affected group P&L
Source: Company data; DBS Vickers YTD. Management also expects the building and
construction segments to be under more pressure as it is
Prospects highly dependent on GDP growth.
Unlikely to show strong loan growth. AMMB aims to grow Possible uptick in NPL ratio in FY10. Asset quality is expected
its business banking division while moderately growing to remain stable, but management did not discount a possible
selected segments such as mortgages, credit cards and uptick in NPL ratio in FY10. We expect NPL ratio of 3.0% in
personal loans (co-op financing). Even within the mortgage FYMar09 and 3.1% for FYMar10. Our stress test shows that
space, the focus would be on the mid and mid-to-high end every 10bps increase in provision charge-rates would reduce
market segment. We note that AMMB is not out to chase AMMB’s earnings by 6%. In the worst case scenario, when we
market share, but grow its higher profitability segments. We applied a provision charge-off rate of 1.82%, which is half of
project loan growth for FYMar09 at 8% before slowing to the crisis levels (3.64%), AMMB would still be profitable
6% for FYMar09, in anticipation of a softening economic although FYMar10F net profit would be reduced by 90%. And
environment. We do not expect hire purchase to grow our projected FYMar10 book value per share could drop by
significantly because AMMB is reconfiguring its loan asset 20sen to RM2.88 from RM3.08. But we do not expect this
composition to reduce concentration in lending exposures. drastic scenario to materialise. To reiterate, AMMB’s loan
We note that AMMB is still targeting to raise its hire- profile is different from the crisis period.
purchase business ROE from mid-single digit to double digit
levels over the next 3-4 years. In business banking front,
AMMB aims to entrench its position in high growth
industries such as the oil & gas, fast moving consumer
Page 3
Company Focus
AMMB Holdings
Valuation Earnings tweaked marginally. In view of the challenging

operating environment in 2009-10, we reduced our earnings
Valuations have bottomed out. Maintain Buy with target price by 2-3% for FYMar10-11 to reflect higher NPL ratios.
at RM2.90 based on the Gordon Growth Model, implying 1.0x
CY09 BV. The market has still not imputed any ANZ premium Key risks. Amidst the weakening economic outlook, the key
in AMMB’s valuation. But we believe AMMB’s P/BV valuations risk for AMMB would be taking longer than expected to
have bottomed out after hitting a low of 0.7x recently. implement its strategies.
Sector valuation
Banking Group Price Target Rating PE (x) CAGR P/BV (x) ROE (%) Net Div
Price (%)
(RM/s) (RM/s) CY07A CY08F CY09F ^ (%) CY07A (RM/s) (RM/s)
AMMB 2.51 2.90 B 12.8 9.0 8.2 8.5 1.0 0.9 0.8 10.5 3.0
BCHB 6.20 5.50 FV 7.5 9.6 11.5 (3.4) 1.3 1.4 1.4 12.6 2.9
EON Capital 3.24 4.80 B 10.1 17.0 7.2 63.9 0.7 0.7 0.6 9.3 2.3
Hong Leong Bank 5.15 6.20 B 11.9 10.5 10.0 3.3 1.8 1.6 1.5 15.0 3.5
Maybank 5.20 4.20 FV 8.3 9.6 10.7 (4.4) 1.3 1.3 1.2 11.5 4.2
PBB - Foreign 8.75 11.90 B 12.5 10.7 10.1 8.0 2.8 2.7 2.6 26.0 7.9
RHB Capital 3.90 4.00 H 11.8 8.4 10.1 (0.8) 1.2 1.1 1.0 10.2 2.2
Sector Wt. Avg. 9.7 9.9 10.3 2.2 1.5 1.5 1.4 13.6 4.6
Sector Wt. Avg. (ex-Maybank) 10.3 10.0 10.1 4.4 1.6 1.5 1.4 14.5 4.7
Buy (B), Hold (H), Fully Valued (FV), Not Rated (NR),
^Refers to a 2-year EPS CAGR for CY07-09.
Page 4
Company Focus
AMMB Holdings
Income Statement (RM m) Balance Sheet (RM m)

FY Mar 2008A 2009F 2010F 2011F FY Mar 2008A 2009F 2010F 2011F
Net Interest Income 1,631 1,749 1,837 1,901 Cash/Bank Balance 10,958 9,061 9,714 10,192
Non-Interest Income 1,219 914 1,006 1,106 Government Securities 0 0 0 0
Operating Income 3,367 3,206 3,413 3,606 Inter Bank Assets 1,388 1,402 1,416 1,423
Operating Expenses (1,552) (1,707) (1,844) (1,992) Total Net Loans & Advs. 52,454 57,974 61,405 65,541
Pre-provision Profit 1,814 1,499 1,569 1,614 Investment 9,730 10,275 10,854 11,468
Provisions (638) (417) (417) (359) Associates 1 1 1 1
Associates 0 0 0 0 Fixed Assets 233 237 242 247
Exceptionals 0 0 0 0 Goodwill 1,802 1,712 1,712 1,712
Pre-tax Profit 1,194 1,092 1,165 1,270 Other Assets 4,924 5,671 6,016 6,393
Taxation (384) (273) (291) (317) Total Assets 83,192 88,292 93,612 99,566
Minority Interests (142) (24) (29) (35) Customer Deposits 47,767 51,111 54,689 58,517
Preference Dividend 0 0 0 0 Inter Bank Deposits 15,119 15,905 16,541 17,368
Net Profit 669 795 845 918 Debts/Borrowings 4,861 4,861 4,861 4,861
Net Profit bef Except 669 795 845 918 Others 6,488 6,553 6,599 6,698
Minorities 84 108 137 172
Shareholders' Funds 7,170 7,766 8,400 9,088
Total Liab& S/H’s Funds 83,192 88,292 93,612 99,566
Profitability & Efficiency Ratios (%) Financial Stability Measures (%)
FY Mar 2008A 2009F 2010F 2011F FY Mar 2008A 2009F 2010F 2011F
Margins, Costs & Efficiency Balance Sheet Structure

Yld. On Earnings Assets 5.19 5.20 5.15 5.10 Loan-to-Deposit Ratio 119.0 120.1 119.0 117.9
Avg Cost Of Funds 3.04 3.00 2.95 2.95 Net Loans / Total Assets 63.1 65.7 65.6 65.8
Spread 2.15 2.20 2.20 2.15 Investment / Total Assets 11.7 11.6 11.6 11.5
Net Interest Margin 2.24 2.28 2.27 2.21 Cust . Dep./Int. Bear. Liab. 70.5 71.1 71.9 72.5
Cost-to-Income Ratio 46.1 53.3 54.0 55.2 Interbank Dep / Int. Bear. 22.3 22.1 21.7 21.5
Employees ( Year End) 0 0 0 0 Asset Quality
Effective Tax Rate 32.1 25.0 25.0 25.0 NPL / Total Gross Loans 6.3 5.6 5.7 5.0
Business Mix NPL / Total Assets 4.3 3.9 4.0 3.5
Net Int. Inc / Opg Inc. 48.4 54.6 53.8 52.7 Capital Strength
Non-Int. Inc / Opg inc. 36.2 28.5 29.5 30.7 Total CAR 15.1 14.1 14.2 14.3
Fee Inc / Opg Income 15.9 15.0 14.8 14.7 Tier-1 CAR 8.2 8.6 9.0 9.3
Oth Non-Int Inc/Opg Inc 20.3 13.5 14.7 16.0 Growth
Profitability Total Net Loans 10 11 6 7
ROAE Pre Ex. 11.1 10.6 10.5 10.5 Customer Deposits 13 7 7 7
ROAE 11.1 10.6 10.5 10.5
ROA Pre Ex. 1.0 1.0 1.0 1.0
ROA 1.0 1.0 1.0 1.0
Quarterly / Interim Income Statement (RMm) Rolling forward P/BV
FY Mar 3Q2008 4Q2008 1Q2009 2Q2009 (RM)
PBV 2.0x
Net Interest Income 473 432 434 458 6.00
Non-Interest Income 328 261 220 148
Operating Income 924 830 779 754 5.00 PBV 1.6x
Operating Expenses (415) (458) (418) (394)
4.00
Pre-Provision Profit 510 372 362 360 PBV 1.2x
Provisions (184) (63) (88) (35)
3.00
Associates 0 0 0 0
Exceptionals 0 0 0 0 PBV 0.8x
2.00
Pretax Profit 326 309 274 326
Taxation (85) (85) (69) (91) PBV 0.4x
1.00
Minority Interests (43) (6) (1) (5)
Net Profit 198 217 203 230 0.00
97 98 99 00 01 02 03 04 05 06 07 08
Page 5
Company Focus
AMMB Holdings
company as of 31 Dec 2008.
Page 6
Company Focus
AMMB Holdings
rd
Tel. 65-6533 9688, Fax: 65-6226 8048
Page 7
Hong Kong / China Company Focus
China Telecom
Bloomberg: 728 HK EQUITY | Reuters: 0728.HK
BUY HK$3.07 HSI : 15,043 Negatives reflected, upsides

Price Target : 12-Month HK$ 3.70
remain
Reason for Report : Company update
The acquisition of the CDMA business should help
Potential Catalyst: Strong CDMA users growth, potential
favourable asymmetric measures and 3G licensing
mitigate the decline in fixed-line business and cement
growth momentum in broadband business. With an
Analyst expected turnaround in CDMA business, CT would
Steven Liu CFA, +852 2971 1780 regain double-digit earnings growth in two to three
steven_liu@hk.dbsvickers.com
years’ time.
Ongoing business to improve. The CDMA business
would help improve CT’s ongoing business in the
Price Relative
HK$ R e la t iv e In d e x
following aspects: 1) CT intends to migrate one third
7 .8 0 of its PHS users to CDMA services, 2) through services
6 .8 0
207
187
bundling, CT is set to gain market share in the
5 .8 0 167
household, enterprises and high-end individual
4 .8 0
147 customers market and 3) a lot of synergy should be
3 .8 0
127
realized by sharing resources in marketing, customer
2 .8 0
107
87
services and networks.
1 .8 0
2004 2005 2006 2007 2008
67
Near term losses in CDMA. To fulfil its 100m
C h in a T e le c o m ( L H S ) R e la t iv e H S I IN D E X ( R H S )
customers target, CT intends to provide CDMA users
handset subsidies worth 30% to 40% of total
Forecasts and Valuation contract value. As CT would expense instead of
amortize the handset subsidies, it would suffer big
FY Dec (RMB m) 2007A 2008E 2009F 2010F losses in the first two years. However, we expect
Turnover 178,656 211,617 240,089 265,342 significant profit improvement in the CDMA from
EBITDA 86,808 87,727 82,618 92,676 2H09 when revenue will continue to increase while
Pre-tax Profit 30,251 30,671 22,977 32,319 expenses begin to decrease.
Net Profit 23,702 24,702 17,797 24,574
Net Pft (Pre Ex.) 23,702 24,702 17,797 24,574 Potential long-term winner. CT’s long-term
EPS (RMB) 0.29 0.31 0.22 0.30 competitiveness would be underpinned by 1) its
EPS (HK$) 0.33 0.35 0.25 0.34
EPS Gth (%) (13.0) 4.2 (28.0) 38.1
abundant fixed-line and broadband network
Diluted EPS (HK$) 0.33 0.35 0.25 0.34 resources, 2) clear and promising growth strategies
DPS (HK$) 0.09 0.10 0.07 0.10 and 3) its resolution to develop the CDMA business.
BV Per Share (HK$) 3.10 3.35 3.53 3.77 We have maintained our forecasts and target price at
PE (X) 9.2 8.9 12.3 8.9
P/Cash Flow (X) 2.9 2.8 3.1 2.7 HK$3.70. With nationwide promotion of CDMA
EV/EBITDA (X) 3.5 3.7 3.7 3.1 services since late December, we expect strong
Net Div Yield (%) 2.9 3.1 2.3 3.3 CDMA subscriber growth starting from 2009, which
P/Book Value (X) 1.0 0.9 0.9 0.8
Net Debt/Equity (X) 0.4 0.4 0.3 0.3
should be major catalyst to share price. Maintain Buy.
ROAE (%) 11.1 10.7 7.3 9.4 At A Glance
Issued Capital - H shares (m shs) 13,877
Earnings Rev (%): Nil Nil Nil - Non H shrs (m shs) 67,055
Consensus EPS H shs as a % of Total 17
0.32 0.27 0.31
(HK$): H Mkt Cap (HK$m/US$m) 42,604 / 5,497
Major Shareholders (%)
ICB Industry: Telecommunications China Tel Corp 70.89
ICB Sector: Fixed Line Telecommunications GD Rising Asset Mgt 6.94
Principal Business: CT is the largest fixed-line telecom operator in Major H Shareholders (%)
China, with service areas covering 20 southern China provinces. After RF S Holdings B.V . 6.54
acquiring the CDMA business, CT will become an integrated telecom J PMorgan Chase & Co. 6.03
Barclay s PLC 5.48
services provider in China.
H Shares-F ree F loat (%) 81.95
Av g Daily V olume (m shrs) 157.8
In Singapore, this research report or research analyses may only be distributed to Institutional Investors,
Expert Investors or Accredited Investors as defined in the Securities and Futures Act, Chapter 289 of Singapore.
www.dbsvickers.com
ed-LM / sa- GL
Company Focus
China Telecom
Industry evolution in favor of CT amortized), handset subsidies would mainly affect CDMA
profit in the next one to two years, and 3) CT’s abundant
Intensifying competition in mobile phone market. After the fixed-line and broadband network resources should give it a
industry restructuring, all the three telecoms operators will winning edge in offering bundled services and acquiring
become full telecom service operators in the long run. During CDMA users.
the Jan08-Nov08 period, mobile telecoms accounted for
54.8% of the total revenue of the telecoms market in China. CT to regain double-digit earning growth in two years’ time.
Hence, we believe the mobile telecom market would see the CT might suffer decline in earnings over the next two years
fiercest competition given its huge market potential. As of due to potential big losses from CDMA business. However,
Nov08, China’s mobile phone users penetration was still at a we expect rapid recovery starting from 2H10, which would be
relatively low level of 47.3%, which should imply sustainable underpinned by 1) stabilizing fixed-line business thanks to
growth at double-digit in the number of mobile phone users bundling services, 2) rapidly growing broadband business,
over the next couple of years. Though mobile phone ARPU and 3) significant improvement in CDMA business. We also
would continue to decline in the near term due to expect CT to become the most competitive full telecoms
competition, we believe it would be back on uptrend in two service operator in the long run in view of its abundant fixed-
years to be driven by 3G-related data revenue. line and broadband network resources.
Full-service to mitigate fixed-line declines. Fixed-line market Financials and Valuation

has been hit hard by fixed-to-mobile migration in the past
two years. But the decline in the number of fixed-line would Financial position remains strong. As CT’s parent company
be mitigated by two factors: 1) innovation in fixed-line will bear the capex on CDMA network expansion and update,
services, and 2) fixed and mobile convergence. Hence, the CT expects total capex to maintain flat or decline going
decline in fixed-line revenue would be at a moderate level of forward. CT intends to fund the RMB43.8bn acquisition of
single-digit in the next couple of years. the CDMA by issuing corporate bonds and long-term debts,
which would not affect its balance sheet substantially as net
Broadband market remains promising. Though still smaller gearing remaining below 40%.
than fixed-line and mobile phone market, broadband has
become the fastest-growing market in China. With A winner in the long run. Our belief in CT’s long-term
broadband users penetration below 10%, we believe the competitiveness stems from its abundant fixed-line and
market would be sustainable at a decent double-digit growth broadband network resources as well as its clear development
over the next five years. As a dominant provider of broadband strategies that focus on services bundling and services
services in the 20 southern provinces, CT would be the most differentiation. Nevertheless, CT has made it clear that LTE
beneficiary of this promising market. will be the 4G standard for the CDMA technology evolution,
which would be a boost to the shrinking CDMA camp on the
CDMA remains the main concern. As the parent company will global telecoms market.
bear the capex on CDMA network, we see no major concern
on capex risk with CT. Instead, the major risk lies with its Limited near term downside, great long-term upside. We
capability to fulfil its target of 100m CDMA users in three have maintained our forecasts and target price at HK$3.70.
years time. CT intends to give handset subsidies for its CDMA Looking forward, the downside might come from bigger-
users, which also raises a big downside risk in the loss of the than-expected loss from CDMA business. However, we see
CDMA business in the next two years. more upside than downside. With CT’s starting promoting
CDMA services on nationwide basis since late December, we
2009: a transitional year expect strong CDMA users growth starting from 2009,
which should be a major catalyst for share prices. Maintain
Turnaround in CDMA from 2H09. We expect a turnaround in
Buy.
CDMA business from 2H09, which is to be underpinned by 1)
CT’s handset subsidy policy which should secure rapid growth
in the number of CDMA users, 2) to be expensed (not
Page 2
Company Focus
China Telecom
Peers comparison
Latest Reported
Price EBITDA Div
(Local$) Mkt cap FY08 FY09 FY10 EV/EBITDA margin ROE yield
Code Company CNY (USD) PE PE PE PB (x) (T12M) (%) (%) (%)
T US AT&T INC USD 28.50 167,951 10.0 9.7 9.1 1.6 5.9 35.3 10.4 5.0
941 HK CHINA MOBILE* HKD 81.20 210,063 11.7 10.0 8.7 3.8 7.9 55.2 25.1 2.8
VOD US VODAFONE GROUP GBp 138.20 109,618 11.0 10.2 9.7 0.8 6.6 37.0 9.2 0.1
VZ US VERIZON COMMUNIC USD 33.90 96,292 13.2 12.4 11.8 1.7 5.5 32.1 11.1 4.9
TEF SM TELEFONICA EUR 16.07 97,272 10.0 9.1 8.2 4.2 5.3 40.4 47.8 4.7
DTE GR DEUTSCHE TELEKOM EUR 10.83 60,738 14.7 13.1 12.0 1.2 5.5 26.3 1.3 7.2
FTE FP FRANCE TELECOM EUR 20.03 67,369 9.9 9.5 9.1 1.8 4.4 36.3 22.2 6.5
9437 JP NTT DOCOMO INC JPY 176,400 82,200 15.5 14.9 16.2 1.5 4.1 33.6 11.6 2.7
S US SPRINT NEXTEL CO USD 1.83 5,228 26.1 n.a. n.a. 0.3 4.8 25.6 (78.7) 5.5
TIT IM TELECOM ITALIA S EUR 1.16 28,862 10.0 10.2 9.6 0.7 5.4 37.1 9.4 6.9
TLS AU TELSTRA CORP AUD 3.85 30,679 12.9 12.4 10.5 4.3 6.7 41.0 30.3 7.3
728 HK CHINA TELECOM-H* HKD 3.07 32,055 8.9 12.3 8.9 0.9 4.2 50.0 11.1 2.9
BHARTI IN BHARTI AIRTEL LT INR 707.70 26,856 21.0 15.9 13.0 5.7 14.1 42.5 38.6 0.0
ST SP SINGAP TELECOMM SGD 2.55 26,784 10.2 11.8 11.2 2.0 13.0 29.6 18.9 4.9
BCE CN BCE INC CAD 25.13 16,295 11.3 11.2 11.2 2.0 7.1 39.0 30.0 5.8
9433 JP KDDI CORP JPY 635,000 29,577 13.0 10.4 11.0 1.5 4.1 21.1 13.6 1.7
MTN SJ MTN GROUP LTD ZAr 11,012 20,396 13.0 9.6 8.2 3.1 n.a. 43.9 24.7 0.0
TLKM IJ TELEKOMUNIKASI IDR 6,900 11,449 11.4 10.7 9.8 3.4 4.4 64.1 41.6 5.2
762 HK CHINA UNICOM HON*^ HKD 10.12 31,031 11.2 11.5 10.7 1.2 2.9 41.3 12.3 3.1
SCMN VX SWISSCOM AG-REG CHF 339.50 15,093 9.7 9.3 9.0 3.4 5.5 37.4 41.4 5.0
017670 KS SK TELECOM KRW 210,000 11,367 11.2 9.9 8.7 1.4 4.9 35.7 15.8 4.5
2412 TT CHUNGHWA TELECOM TWD 53.50 18,622 12.1 12.1 12.2 1.6 5.3 54.0 12.1 6.6
Q US QWEST COMMUNICAT USD 3.64 6,200 9.1 9.5 10.9 12.7 4.3 30.6 n.a. 2.2
032390 KS KT FREETEL CO KRW 29,550 3,709 n.a. n.a. n.a. 1.3 4.3 21.7 5.7 0.0
2332 HK HUTCHISON TELECO HKD 2.10 1,303 8.1 8.9 7.0 0.2 7.3 25.4 196.9 0.0
8 HK PCCW LTD HKD 3.68 3,215 11.8 11.0 10.3 13.5 8.2 31.1 151.7 5.4
315 HK SMARTONE TELECOM HKD 5.75 414 12.0 14.5 12.6 1.2 2.4 26.7 8.6 8.3
Source: Bloomberg, *DBS Vickers
Page 3
Company Focus
China Telecom
Income Statement (RMB m) Balance Sheet (RMB m)

FY Dec 2007A 2008E 2009F 2010F FY Dec 2007A 2008E 2009F 2010F
Cost of Goods Sold (141,645) (177,500) (212,030) (228,551) Invts in Assocs & JVs 793 1,026 1,283 1,565
Gross Profit 37,011 34,117 28,060 36,791 Other LT Assets 38,408 78,177 78,919 80,348
Other Opg (Exp)/Inc 0 0 0 0 Cash & ST Invts 20,556 23,614 21,575 24,786
Operating Profit 37,011 34,117 28,060 36,791 Inventory 2,663 2,685 2,708 2,732
Other Non Opg (Exp)/Inc (2,672) 42 46 50 Debtors 16,710 20,104 23,289 26,534
Associates & JV Inc 212 233 257 282 Other Current Assets 2,751 2,751 2,751 2,751
Net Interest (Exp)/Inc (4,300) (3,721) (5,385) (4,805) Total Assets 408,004 447,111 443,417 446,941
Pre-tax Profit 30,251 30,671 22,977 32,319 ST Debt 71,001 48,982 32,978 20,289
Tax (6,452) (5,862) (5,063) (7,616) Other Current Liab 67,536 69,733 69,602 71,552
Minority Interest (97) (107) (117) (129) LT Debt 34,153 77,449 76,466 75,484
Preference Dividend 0 0 0 0 Other LT Liabilities 12,942 10,556 11,137 8,803
Net Profit 23,702 24,702 17,797 24,574 Shareholder’s Equity 220,921 238,832 251,559 269,009
Net profit before Except. 23,702 24,702 17,797 24,574 Minority Interests 1,451 1,558 1,675 1,804
Total Cap. & Liab. 408,004 447,111 443,417 446,941
EBITDA 86,808 87,727 82,618 92,676
Sales Gth (%) 1.7 18.4 13.5 10.5 Non-Cash Wkg. Cap (45,412) (44,194) (40,855) (39,535)
EBITDA Gth (%) (3.4) 1.1 (5.8) 12.2 Net Cash/(Debt) (84,598) (102,817) (87,869) (70,987)
Opg Profit Gth (%) (4.0) (7.8) (17.8) 31.1
Cash Flow Statement (RMB m) Rates & Ratios
Pre-Tax Profit 30,251 30,671 22,977 32,319 Gross Margin (%) 20.7 16.1 11.7 13.9
Dep. & Amort. 52,257 53,336 54,256 55,552 Opg Profit Margin (%) 20.7 16.1 11.7 13.9
Tax Paid (7,116) (5,730) (4,897) (7,452) Net Profit Margin (%) 13.3 11.7 7.4 9.3
(Pft)/ Loss on disposal of 0 0 0 0 ROAE (%) 11.1 10.7 7.3 9.4
Assoc. & JV Inc/(loss) (212) (233) (257) (282) ROA (%) 5.7 5.8 4.0 5.5
Non-Cash Wkg.Cap. (5,644) (5,339) (4,807) (5,984) ROCE (%) 8.4 7.7 5.8 7.5
Other Operating CF 5,236 3,250 3,489 3,740 Div Payout Ratio (%) 26.5 27.5 28.5 29.0
Net Operating CF 74,772 75,954 70,762 77,893 Interest Cover (x) 8.6 9.2 5.2 7.7
Capital Exp.(net) (45,867) (47,132) (50,494) (53,637) Asset Turnover (x) 0.4 0.5 0.5 0.6
Other Invts.(net) (30) 0 0 0 Debtors Turn (days) 33.4 31.7 33.0 34.3
Invts in Assoc. & JV 0 0 0 0 Creditors Turn (days) 124.0 86.0 71.1 66.0
Div from Assoc & JV 0 0 0 0 Inventory Turn (days) 12.0 7.9 6.2 5.7
Other Investing CF (312) (40,250) (250) (250) Current Ratio (x) 0.3 0.4 0.5 0.6
Net Investing CF (46,209) (87,382) (50,744) (53,887) Quick Ratio (x) 0.3 0.4 0.4 0.6
Div Paid (6,273) (6,791) (5,071) (7,124) Net Debt/Equity (X) 0.4 0.4 0.3 0.3
Chg in Gross Debt (19,894) 21,277 (16,987) (13,671) Capex to Debt (%) 43.6 37.3 46.1 56.0
Capital Issues 0 0 0 0 N.Cash/(Debt)PS (RMB) (1.2) (1.4) (1.2) (1.0)
Other Financing CF (4,338) 0 0 0 Opg CFPS (RMB) 1.13 1.14 1.06 1.18
Net Financing CF (30,505) 14,486 (22,058) (20,795) Free CFPS (RMB) 0.41 0.40 0.28 0.34
Net Cashflow (1,942) 3,058 (2,039) 3,211
Interim Income Statement (RMB m) Segmental Breakdown (RMB m)
FY Dec 2H2006 1H2007 2H2007 1H2008 FY Dec 2007A 2008E 2009F 2010F
Turnover 88,271 89,757 88,899 90,434 Revenues
Cost of Goods Sold (70,946) (69,072) (72,573) (71,682) Voice revenue 114,606 103,855 94,479 86,841
Gross Profit 17,325 20,685 16,326 18,752 Broadband 31,340 38,386 45,657 52,634
Other Oper. (Exp)/Inc 0 0 0 0 VAS 19,231 24,423 28,820 33,143
Operating Profit 17,325 20,685 16,326 18,752 CDMA N/A 30,528 55,864 76,404
Other Non Opg (Exp)/Inc (5) 0 (2,672) (4) Others 13,479 14,425 15,270 16,321
Net Interest (Exp)/Inc (1,991) (2,013) (2,287) (2,289)
Pre-tax Profit 15,383 18,681 11,570 16,493
Tax (2,247) (4,898) (1,554) (3,816)
Net Profit 13,086 13,756 9,946 12,634
Net profit bef Except. 13,086 13,756 9,946 12,634
EBITDA 43,181 46,783 40,025 45,326
Sales Gth (%) 3 3 1 1

EBITDA Gth (%) 1 0 (7) (3)
Opg Profit Gth 1 (2) (6) (9)
Net Profit Gth (%) (1.0) (2.8) (24.0) (8.2)
Gross Margins (%) 19.6 23.0 18.4 20.7
Page 4
Company Focus
China Telecom
* Share price appreciation + dividends
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18th Floor Man Yee Building, 68 Des Voeux Road Central, Central, Hong Kong
Tel: (852) 2820-4888, Fax: (852) 2868-1523
Page 5
Parkson
Bloomberg: 3368 HK Equity | Reuters: 3368.HK
HOLD HK$8.63 HSI : 15,043 Recent momentum slows

(Downgrade from BUY)
Price Target : 12m HK$ 9.60 (Prev HK$12.55) Parkson’s sales momentum in recent weeks could fall
Reason for Report : Company update slightly below expectations as competition intensifies.
Potential Catalyst: M&A potentials, including buying out joint- Despite our view that Parkson’s medium-term growth
venture stores and purchasing its managed stores from parent. prospects should remain very optimistic, we have revised
down our earnings projection and downgraded the
Analyst counter to a HOLD in the anticipation of a more difficult
Mavis Hui +852 2863 8879 environment into 1H09.
mavis_hui@hk.dbsvickers.com
Growth fell slightly below targets. We believe
Parkson’s average same-store sales (SSS) growth has fallen
slightly behind management targets in recent weeks amid
a more competitive operating landscape among
department store players. Amongst all, Parkson’s
Price Relative
HK$
operations along the major coastal cities such as Shanghai,
Wuxi, HeFei, etc. have been affected most, possibly also
R e la t iv e In d e x
1 9 .8 0
1 7 .8 0
519 due to these cities’ stronger reliance on export growth.
1 5 .8 0 419
Tougher environment. As overall consumer sentiment
slows in conjunction with deteriorating global economic
1 3 .8 0
1 1 .8 0 319
9 .8 0
219
environment, selective peers have elevated their
7 .8 0
5 .8 0
promotional strategies of late and offer steeper discounts
3 .8 0
119
to attract sales. With current market expectations for a
1 .8 0
2005 2006 2007 2008
19
more challenging market in 1H09, management could
possibly be guiding a slightly lower growth rate for
November 2008 to June 2009, against earlier SSS growth
P a rk so n (L H S ) R e la t iv e H S I IN D E X ( R H S )
Forecasts and Valuation

targets of 12-13%. More stringent control on costs,
including further room for savings on advertising costs,
staff expenses and utility costs, could hopefully help to
FY Dec (RMB m) 2007A 2008E 2009F 2010F
support profitability to some extent.
Turnover 3,060 3,725 4,472 5,495
EBITDA 1,131 1,387 1,661 2,039 Medium-term outlook remains positive. Sitting on
Pre-tax Profit 943 1,200 1,457 1,847 c.RMB1bn net cash, Parkson will maintain its store opening
Net Profit 676 882 1,068 1,351 momentum ahead, as well as taking advantage of the
Net Pft (Pre Ex.) 676 882 1,068 1,351 current environment to lock-up attractive acquisition
EPS (RMB) 0.24 0.32 0.38 0.48 opportunities for market share. Coupled with the
EPS (HK$) 0.28 0.36 0.44 0.55
government’s priority to roll-out longer term policies to
EPS Gth (%) 46.2 29.7 21.1 26.4
Diluted EPS (HK$) 0.28 0.36 0.44 0.55 boost domestic demand, we strongly believe that the
DPS (HK$) 0.14 0.18 0.22 0.28 company should still post a rosy growth prospect in the
BV Per Share (HK$) 1.14 1.32 1.53 1.81 medium-term.
PE (X) 31.1 24.0 19.8 15.7 Yet, in view of a more difficult environment ahead, we
P/Cash Flow (X) 26.7 21.2 17.7 14.3
EV/EBITDA (X) 18.9 14.9 11.9 9.1
have prudently downgraded our earnings forecasts by 6%
Net Div Yield (%) 1.6 2.1 2.5 3.2 for FY08, 13% for FY09, and 11% for FY10, and revised
P/Book Value (X) 7.6 6.6 5.6 4.8 down our target price to HK$9.6 based on 22x FY09 PE, or
Net Debt/Equity (X) 0.1 CASH CASH CASH 1x PEG (previously based on 25x PE). Trading at 10%
ROAE (%) 27.0 29.3 30.6 32.9 discount to our new target price following the recent share
price rally (up 23% in the last two months), we downgrade
Earnings Rev (%): (6) (13) (11) the counter to a HOLD.
Consensus EPS (HK$): 0.36 0.45 0.53
At A Glance
Issued Capital (m shrs) 2,798
ICB Industry: Consumer Services Mkt Cap (HK$m/US$m) 24,144 / 3,115
ICB Sector: General Retailers Major Shareholders (%)
Principal Business: Operates an extensive network of over 40 Parkson Holdings 53.68
Parkson department stores across nearly 30 cities in China J PMorgan Chase 12.83
Deutsche Bank Aktiengesellschaft 6.00
F ree F loat (%) 27.49
www.dbsvickers.com
sa- GL
Company Focus
Parkson
Income Statement (RMB m) Balance Sheet (RMB m)

Turnover 3,060 3,725 4,472 5,495 Net Fixed Assets 819 889 951 1,005
Cost of Goods Sold (2,043) (2,459) (2,940) (3,593) Invts in Assocs & JVs 2 2 2 2
Gross Profit 1,017 1,267 1,532 1,903 Other LT Assets 3,989 3,937 3,891 3,851
Other Opg (Exp)/Inc 0 0 0 0 Cash & ST Invts 3,642 4,425 5,352 6,559
Operating Profit 1,017 1,267 1,532 1,903 Inventory 144 175 210 259
Other Non Opg (Exp)/Inc 0 0 0 0 Debtors 19 23 28 34
Net Interest (Exp)/Inc (74) (67) (76) (56) Total Assets 8,989 9,909 10,982 12,384
Pre-tax Profit 943 1,200 1,457 1,847 ST Debt 0 0 0 0
Minority Interest (52) (42) (50) (58) LT Debt 3,837 3,837 3,837 3,837
Net Profit 676 882 1,068 1,351 Shareholder’s Equity 2,789 3,228 3,762 4,437
Net profit before Except. 676 882 1,068 1,351 Minority Interests 79 83 87 91
Total Cap. & Liab. 8,989 9,909 10,982 12,384
EBITDA 1,131 1,387 1,661 2,039
Sales Gth (%) 40.1 21.8 20.0 22.9 Non-Cash Wkg. Cap (1,466) (1,776) (2,125) (2,599)
EBITDA Gth (%) 41.9 22.7 19.8 22.7 Net Cash/(Debt) (196) 588 1,514 2,722
Opg Profit Gth (%) 43.6 24.6 21.0 24.2
Cash Flow Statement (RMB m) Rates & Ratios
Pre-Tax Profit 943 1,200 1,457 1,847 Gross Margin (%) 33.2 34.0 34.3 34.6
(Pft)/ Loss on disposal of FAs 0 0 0 0 ROAE (%) 27.0 29.3 30.6 32.9
Assoc. & JV Inc/(loss) (1) (1) (1) (1) ROA (%) 8.2 9.3 10.2 11.6
Non-Cash Wkg.Cap. 184 374 419 574 ROCE (%) 12.2 13.5 15.1 17.2
Other Operating CF 96 92 103 86 Div Payout Ratio (%) 49.2 50.0 50.0 50.0
Net Operating CF 1,102 1,483 1,737 2,163 Interest Cover (x) 13.8 18.8 20.2 33.8
Capital Exp.(net) (148) (190) (190) (190) Asset Turnover (x) 0.4 0.4 0.4 0.5
Other Invts.(net) 0 0 0 0 Debtors Turn (days) 2.2 2.1 2.1 2.1
Other Investing CF (1,586) 279 195 215 Current Ratio (x) 2.1 2.1 2.1 2.1
Net Investing CF (1,734) 89 5 25 Quick Ratio (x) 1.8 1.8 1.8 1.8
Div Paid (271) (441) (534) (675) Net Debt/Equity (X) 0.1 CASH CASH CASH
Chg in Gross Debt 655 0 0 0 Capex to Debt (%) 3.9 5.0 5.0 5.0
Capital Issues 186 0 0 0 N.Cash/(Debt)PS (RMB) (0.1) 0.2 0.6 1.1
Other Financing CF (349) (347) (281) (305) Opg CFPS (RMB) 0.38 0.45 0.54 0.65
Net Financing CF 221 (789) (815) (980) Free CFPS (RMB) 0.39 0.53 0.63 0.80
Net Cashflow (411) 784 927 1,207
Interim Income Statement (RMB m) Segmental Breakdown (RMB m)
Turnover 943 1,241 1,481 1,578 Revenues
Cost of Goods Sold (638) (838) (1,004) (1,039) Sales of goods - direct sales 1,044 1,235 1,494 1,833
Gross Profit 304 404 477 540 Commission from 1,511 1,879 2,239 2,755
Other Oper. (Exp)/Inc 0 0 0 0 concessionaire sales
Operating Profit 304 404 477 540 33 30 36 44
Consultancy and
Other Non Opg (Exp)/Inc 0 0 0 0 management fees
Associates & JV Inc 0 0 0 0 Rental income 139 171 207 254
Net Interest (Exp)/Inc 22 2 (38) (36) Others 333 410 496 609
Exceptional Gain/(Loss) 0 0 0 0 Total 3,060 3,725 4,472 5,495
Tax (103) (116) (105) (111)
Net Profit 196 265 303 373
Sales Gth (%) 87 75 57 27

Opg Profit Gth 82 76 57 34
Net Profit Gth (%) 84.2 87.0 54.7 40.8
Gross Margins (%) 32.3 32.5 32.2 34.2
Page 2
Company Focus
Parkson
rd

Tel: (852) 2820-4888, Fax: (852) 2868-1523
Page 3
TVB
Bloomberg: 511 HK EQUITY | Reuters: 0511.HK
HOLD HK$25.20 HSI : 15,043 Gloomy outlook

Price Target : 12-Month HK$ 26.04 (Prev HK$39.04)
We believe TVB’s core revenue from Hong Kong dipped
Reason for Report : Company update
Potential Catalyst: Further improvement in Pay-TV division;
10% in 4Q08. And 2009 revenue could be worse than
speculated stake sale by major shareholder in the longer term. during the SARS period, as the slowdown is happening on
a global scale vs a regional outbreak in 1H03. We reduced
Analyst our forecast earnings substantially, but retain our HOLD
Mavis Hui +852 2863 8879
recommendation in view of TVB’s satisfactory yield and
mavis_hui@hk.dbsvickers.com
undemanding valuations.
Sharp drop in 4Q08 revenue. We expect TVB to post

Price Relative >10% y-o-y revenue fall from its core Hong Kong TV
HK$ R e la t iv e In d e x
213
advertising unit for 4Q08. Revenue dropped more
substantially in November and December, by mid-teen
6 2 .2 0
5 7 .2 0 193
5 2 .2 0
4 7 .2 0
173
percentages. The biggest drop was from finance &
banking, which was among the top five advertising
153
4 2 .2 0
133
3 7 .2 0
3 2 .2 0
113 product categories for TVB. Other products such as
2 7 .2 0
93
skincare and F&B are still holding up, but we are not
hopeful revenue from these will be sustainable given the
2 2 .2 0 73
1 7 .2 0 53
rough economic environment in the coming months.

2004 2005 2006 2007 2008
T V B (L H S ) R e la t iv e H S I IN D E X (R H S )
Forecasts and Valuation

Potentially worse than SARS. To recall, TVB’s domestic
operations registered 11.5% y-o-y revenue drop in 1H03
FY Dec (HK$ m) 2007A 2008E 2009F 2010F due to SARS. This time round, the company has already
Turnover 4,326 4,572 4,253 4,378 started to selectively enhance program quality in order to
EBITDA 1,694 1,748 1,379 1,372 retain premium customers, as well as cutting costs (e.g.
Pre-tax Profit 1,550 1,465 1,116 1,139 laid off 212 support staff in Dec 2008). But management
Net Profit 1,264 1,203 916 935
Net Pft (Pre Ex.) 1,259 1,203 916 935 has not ruled out the possibility of more severe impact in
EPS (HK$) 2.89 2.75 2.09 2.13 2009 because it is now a global crisis.
EPS Gth (%) 6.3 (4.8) (23.8) 2.0
Diluted EPS (HK$) 2.89 2.75 2.09 2.13
DPS (HK$) 1.80 1.72 1.31 1.34
Downward earnings revision. We lowered our earnings
BV Per Share (HK$) 12.20 13.23 14.01 14.81 by 6% to HK$1.2bn for FY08, by 30% to HK$916m for
PE (X) 8.7 9.2 12.0 11.8 FY09F, and by 33% to HK$935m for FY10F. Our new
P/Cash Flow (X) 6.7 6.8 8.3 8.4 target price is HK$26.04, based on 9.7% WACC and
EV/EBITDA (X) 5.3 5.2 6.2 5.9
Net Div Yield (%) 7.1 6.8 5.2 5.3 0.5% perpetual growth (previous:11.6% WACC and 2%
P/Book Value (X) 2.1 1.9 1.8 1.7 perpetual growth). Sitting on HK$2bn net cash and
Net Debt/Equity (X) CASH CASH CASH CASH trading at 3% discount to our new target price and merely
ROAE (%) 24.8 21.6 15.4 14.8
12x FY09F PE, TVB remains a HOLD.
Earnings Rev (%): (6) (30) (33)
Consensus EPS (HK$): 2.82 2.80 3.04 At A Glance
Issued Capital (m shrs) 438
Mkt Cap (HK$m/US$m) 11,038 / 1,424
Major Shareholders (%)
ICB Industry: Consumer Services Shaw Run Run & Associates 32
ICB Sector: Media Dodge & Cox 6.18
Principal Business: Free-to-air terrestrial broadcaster in Hong F ree F loat (%) 61.82
Kong.
www.dbsvickers.com
ed-SGC / sa- GL
Company Focus
TVB
Income Statement (HK$ m) Balance Sheet (HK$ m)

Cost of Goods Sold (1,511) (1,678) (1,791) (1,885) Invts in Assocs & JVs 85 85 85 85
Gross Profit 2,815 2,893 2,462 2,493 Other LT Assets 239 239 239 239
Other Opg (Exp)/Inc (1,249) (1,452) (1,390) (1,422) Cash & ST Invts 2,142 2,056 2,511 2,932
Operating Profit 1,566 1,442 1,071 1,071 Inventory 9 10 9 10
Other Non Opg (Exp)/Inc 0 0 0 0 Debtors 1,406 1,486 1,382 1,423
Associates & JV Inc (125) (60) (51) (43) Other Current Assets 461 461 461 461
Net Interest (Exp)/Inc 104 83 96 110 Total Assets 6,251 6,738 7,031 7,400
Pre-tax Profit 1,550 1,465 1,116 1,139 ST Debt 0 0 0 0
Tax (284) (260) (198) (202) Other Current Liab 741 779 730 749
Net Profit 1,264 1,203 916 935 Shareholder’s Equity 5,344 5,794 6,136 6,485
Net profit before Except. 1,259 1,203 916 935 Minority Interests 25 25 25 25
Total Cap. & Liab. 6,251 6,738 7,031 7,400
EBITDA 1,694 1,748 1,379 1,372
Sales Gth (%) 3.0 5.7 (7.0) 3.0 Non-Cash Wkg. Cap 1,135 1,177 1,122 1,144
EBITDA Gth (%) 4.1 3.2 (21.2) (0.5) Net Cash/(Debt) 2,142 2,056 2,511 2,932
Opg Profit Gth (%) 2.7 (7.9) (25.7) 0.0
Cash Flow Statement (HK$ m) Rates & Ratios
Pre-Tax Profit 1,550 1,465 1,116 1,139 Gross Margin (%) 65.1 63.3 57.9 56.9
(Pft)/ Loss on disposal of FAs 0 0 0 0 ROAE (%) 24.8 21.6 15.4 14.8
Assoc. & JV Inc/(loss) 125 60 51 43 ROA (%) 21.2 18.5 13.3 13.0
Non-Cash Wkg.Cap. (149) (42) 55 (22) ROCE (%) 24.3 20.7 14.4 13.6
Other Operating CF (97) (235) (204) (43) Div Payout Ratio (%) 62.4 62.6 62.6 62.6
Net Operating CF 1,403 1,354 1,177 1,258 Interest Cover (x) N/A N/A N/A N/A
Capital Exp.(net) (259) (861) (300) (250) Asset Turnover (x) 0.7 0.7 0.6 0.6
Other Invts.(net) 140 0 0 0 Debtors Turn (days) 117.2 115.4 123.1 116.9
Other Investing CF (68) 174 152 (2) Current Ratio (x) 5.4 5.1 6.0 6.4
Net Investing CF (187) (687) (148) (252) Quick Ratio (x) 4.8 4.5 5.3 5.8
Div Paid (767) (754) (574) (585) Net Debt/Equity (X) CASH CASH CASH CASH
Chg in Gross Debt 0 0 0 0 Capex to Debt (%) N/A N/A N/A N/A
Capital Issues 0 0 0 0 N.Cash/(Debt)PS (HK$) 4.9 4.7 5.7 6.7
Other Financing CF 95 0 0 0 Opg CFPS (HK$) 3.54 3.19 2.56 2.92
Net Financing CF (671) (754) (574) (585) Free CFPS (HK$) 2.61 1.13 2.00 2.30
Net Cashflow 545 (86) 455 421
Interim Income Statement (HK$ m) Segmental Breakdown (HK$ m)
Turnover 2,314 1,919 2,407 2,073 Revenues
Cost of Goods Sold (809) (841) (670) (962) Terrestrial television broadcasting 2,366 2,449 2,081 2,154
Gross Profit 1,505 1,078 1,737 1,111 Programme licensing & distribution 635 674 687 703
Other Oper. (Exp)/Inc (602) (452) (798) (508) Overseas satellite pay TV operations 281 298 304 310
Operating Profit 904 626 940 604 Channel operations 948 1,062 1,093 1,126
Other Non Opg (Exp)/Inc 0 0 0 0 Others 96 90 87 85
Associates & JV Inc (77) (69) (56) (31) Total 4,326 4,572 4,253 4,378
Net Interest (Exp)/Inc 43 47 57 33 PBT
Tax (151) (105) (179) (102)
Minority Interest 0 0 (1) 0
Net Profit 719 497 766 503
EBITDA 961 681 1,013 705
Sales Gth (%) 2 2 4 8

EBITDA Gth (%) 11 2 5 4
Opg Profit Gth 11 1 4 (4)
Net Profit Gth (%) 13.2 5.8 6.6 1.1
Gross Margins (%) 65.0 56.2 72.2 53.6
Page 2
Company Focus
TVB
rd

Tel: (852) 2820-4888, Fax: (852) 2868-1523
Page 3
Thailand Company Focus
True Corporation
Bloomberg: TRUE TB | Reuters: TRUE.BK
HOLD Bt1.79 SET: 449.96 The subscription ratio set at 1

Price Target: 12-month Bt1.90 (prev Bt1.69) old to 2.22 new shares
Reason for Report: Company update
Potential Cat
Catalyst:
alyst: Hutch entering IC regime, improving economy and True Corporation (TRUE TB) announced that the rights
tariff rate increase
issue subscription ratio was set at 1 old to 2.22 new
Analyst shares, in line with our forecast. Assuming
Chirasit Vuttigrai +66 0 2657 7836 conservatively that the CP Group would take the rights
chirasitv@th.dbsvickers.com issue
issue on its 27.6% stake, out of its total of 35.2%
interest, TRUE would raise at least Bt5.4bn fresh cash,
and this would lower its financial risks substantially.
Price Relative Hence, we maintain our HOLD rating on TRUE with
Bt Relative Index revised DCF-
DCF-based target price of Bt1.90.
222
13 . 00 202
11 . 00 182 Subscription ratio announced

162
9 . 00 142 TRUE reported to the SET on 30 Dec that the
122
7 . 00
102 subscription ratio was set at 1 old share to 2.22 new
5 . 00 82
3 . 00
62 shares at Bt1.95 apiece. The stock goes XR today (5 Jan),
while the share subscription form would be distributed
42
1 . 00 22
2004 2005 2006 2007 2008
around mid-Jan and the subscription period is expected
around early Feb.
True Corporation ( LHS ) Relative SET INDEX ( RHS )
Forecasts and Valuation Lower financial risks

Its major shareholder CP Group has committed to take
FY Dec (Bt m) 2007A 2008E 2009F 2010F
the rights issue on its 27.6% stake. The minimum
Turnover 61,641 62,883 63,858 64,958
EBITDA 20,229 21,292 22,144 22,306 Bt5.4bn fresh cash raised together with its annual
Pre-tax Profit 302 320 119 925 residual cashflow of c. Bt5bn would be enough to repay
Net Profit 1,697 (3,395) (1,018) (689) its Bt8.9bn debts due in 2009.
Net Pft (Pre Ex.) (722) (422) (1,018) (689)
EPS (Bt) 0.38 (0.75) (0.23) (0.15)
EPS Pre Ex. (Bt) (0.16) (0.09) (0.23) (0.15) HOLD maintained
EPS Gth Pre Ex (%) nm. nm. nm. (32) Despite its weak competitive position, the likely
Diluted EPS (Bt) 0.38 (0.75) (0.23) (0.15) successful re-capitalization would help reduce its
Net DPS (Bt) - - - -
BV Per Share (Bt) 2.36 1.60 1.38 1.22 financial risks substantially and increase the chance for
PE (X) 4.7 nm. nm. nm. the company to have a foreign strategic partner. We
PE Pre Ex. (X) nm. nm. nm. nm. maintain our HOLD rating for TRUE with revised DCF-
P/Cash Flow (X) 1.1 0.5 0.6 0.6
EV/EBITDA (X) 4.2 3.8 3.4 3.2
based target price of Bt1.90.
Net Div Yield (%) - - - -
P/Book Value (X) 0.8 1.1 1.3 1.5
Net Debt/Equity (X) 639 983 1,134 1,198
ROAE (%) 19.5 (38.1) (15.2) (11.8)
Earnings Rev (%): - At A Glance

- -
Consensus EPS (Bt
Bt):
Bt : (0.2) 0.0 0.1 Issued Capital (m shrs) 4,503
Mkt. Cap (Btm/US$m) 6,710 / 195
Sector: Telecom Major Shareholders
Principal Business: TRUE has a 25-year concession from TOT Corp to Thai NVDR (%) 12.1
operate 2.5m fixed lines in BMA. The company has also expanded Charoen Pokphand Group (%) 8.1
into the cellular business and Internet. State Street Bank & Trust Company For London (%) 7.4
Free Float (%) 50.7
Avg. Daily Vol.(‘000) 53,139
www.dbsvickers.com
ed: LM/sa: CS
Company Focus
True Corporation
More details released TRUE: Current debt repayment schedule
Subscription ratio at 1:2.22. True Corporation (TRUE TB) Btbn

14
reported to the SET on 30 Dec morning on more details Online
12
related to its rights issue. The subscription ratio is set at 1 Mobile
old share to 2.22 new shares, in line with our expectation. 10
Pay TV
We believe this is an attempt to raise as much proceeds as 8
possible, in the event that most of its minority shareholders 6
would not participate. 4
2
Share over-
over-allotment not exceeding 2x... The shareholders 0
have a right to subscribe for shares in excess of their 2008 2009 2010 2011 2012
entitlement. Nonetheless, it is restricted to not more than Source: Companies, DBS Vickers
two times of their entitlement. The offer price has been
fixed at Bt1.95 apiece. Worst case: Fresh Bt5.4 capital would be enough. In the
worst case that TRUE could not raise debenture, we believe
…afraid of being taken over? We believe the CP Group is the Bt5.4bn fresh cash to be raised together with its annual
concerned that TRUE may be taken over. For instance, an residual cashflow of c. Bt5bn would be enough to repay its
investor (or competitor) may buy one TRUE share now and Bt8.9bn debts due in 2009.
over-subscribe all unsubscribed shares (72.4%) by minority
shareholders. Then, they would become the major Base case: buy back debts or TrueMove stake. In the base
shareholder with a larger stake than the CP Group. case that TRUE can raise Bt6.75bn debenture to refinance
its debts as planned, the company would instead spend
Subscription period around early Feb. The stock goes XR Bt5.4bn fresh cash from the rights issue to buy back its US$
today (5 Jan). The share subscription form would be debenture, currently trading at 45-50% discount, or
distributed to shareholders around mid-Jan and the buyback 23.3% BITCO/TrueMove stake from the CP Group.
subscription period is expected around early Feb.
Lower gearing. The likely successful re-capitalization would
Lower financial risks improve its financial position substantially. Assuming
conservatively that the company can raise only Bt5.4bn
The CP Group to take at least 27.6%. Its major shareholder fresh capital, its net financial gearing would drop from 8.9x
CP Group committed to take the rights issue on its 27.6% to 5.4x. The net gearing should drop further if the company
stake, out of its total 35.2% interest. uses the proceeds to buy back US$-denominated
debentures at a deep discount.
Bt5.4bn fresh capital raised. Assuming conservatively that
only the CP Group takes its 27.6% part in the rights issue Recommendations
and no minority shareholder takes the rights, TRUE would
raise Bt5.4bn fresh cash from the rights issue. Potential strategic partner as a next step? As a result of
improving financial position, we believe the re-capitalization
Easier to issue new debenture. TRUE plans to make a debt would help increase the chance for TRUE or TrueMove to
refinancing for its Bt6.75bn Baht bond, namely 2/2545, due have a foreign strategic partner.
2009-2010, but the deal has been postponed from Dec
2008 to Feb 2009 due to the political turmoil in Dec 2008. HOLD maintained. Despite its weak competitive position,
In our view, the successful re-capitalization would help push the likely successful re-capitalization would improve its
through the debenture issuance. financial outlook. We maintain our HOLD rating for TRUE
with revised DCF-based target price of Bt1.90.
Page 2
Company Focus
True Corporation
Thai Telecom Sector: Peer Comparison
Bloomberg Mkt Price Target Upside PE EV/EBITDA Dividend Yield ROE Rcmd
Code Cap 30 Dec Price (%) (x) (x) (%) (%)
US$m (Bt) (Bt) 08F 09F 08F 09F 08F 09F 08A 09F
ADVANC TB 6,760 79.50 103.00 29.4 11.6 12.2 5.3 5.0 8.6 8.6 26.9 25.8 B
DTAC TB 2,178 32.00 42.00* 30.3% 7.6 8.7 4.5 4.0 3.9 3.5 17.7 13.9 B*
TRUE TB 232 1.79 1.90 6.3% nm nm 3.8 3.4 - - (38.1) (15.2) H
Note: Under revision
Source: DBS Vickers
Page 3
Company Focus
True Corporation
Income Statement (Bt m) Balance Sheet (Bt m)

FY Dec 2007A
2007A 2008E
2008E 2009F
2009F 2010F
2010F FY Dec 2007A
2007A 2008E
2008E 2009F
2009F 2010F
2010F
Turnover 61,641 62,883 63,858 64,958 Fixed assets 74,683 70,081 64,659 59,497
EBITDA 20,229 21,292 22,144 22,306 Other LT Assets 24,626 24,968 25,354 25,784
Depr/Amort (12,824) (14,288) (15,095) (14,840) Cash/ST Investments 6,884 23,503 23,221 33,148
Opg Profit 7,405 7,004 7,049 7,466 Other Current Assets 18,525 15,136 15,401 15,704
Asso & Other Inc (220) 185 174 178 Total Assets 124,718 133,688 128,636 134,133
Interest (Exp)/Inc (6,883) (6,869) (7,104) (6,718) ST Debt 6,965 4,875 6,000 8,000
Pre-Tax Profit 302 320 119 925 Other Current Liabilities 25,728 26,463 27,471 28,490
Tax (999) (1,940) (1,504) (1,657) LT Debt 80,070 94,987 89,187 92,396
Minority Interest (24) 1,199 367 43 Minority Interests 1,346 147 (220) (263)
Extra & Forex 2,419 (2,973) - - Shareholders' equity 10,610 7,215 6,197 5,509
Net Profit 1,697 (3,395) (1,018) (689) Total Capital 124,718 133,688 128,636 134,133
Sales Growth (%) 18.6 2.0 1.5 1.7 Share Capital (m) 4,503 4,503 4,503 4,503
Net Profit Gr (%) nm. nm. nm. (32.3) Net cash/(debt) (76,353) (72,372) (67,779) (62,852)
EBITDA Mgn (%) 32.8 33.9 34.7 34.3 Working capital 7,203 11,327 12,070 12,786
Tax Rate (%) 316 572 1,121.9 176.7 Gearing (%) 696 1,302 1,522 1,830
Cash Flow Statement (Bt m) Rates & Ratio

FY Dec 2007A
2007A 2008E
2008E 2009F
2009F 2010F
2010F FY Dec 2007A
2007A 2008E
2008E 2009F
2009F 2010F
2010F
EBITDA 20,243 21,311 22,159 22,318 ROE (%) 19.5 (38.1) (15.2) (11.8)
Change in W/C (3,719) 3,497 86 25 ROA (%) 1.4 (2.6) (0.8) (0.5)
Taxes paid (2,989) (4,052) (3,707) (3,774) Net Margin (%) 2.8 (5.4) (1.6) (1.1)
i) Operating FCF 13,534 20,756 18,538 18,569 Div. Coverage (x) nm. nm. nm. nm.
Net interest payment (4,779) (4,758) (4,901) (4,601) Interst Coverage (x) 1.0 1.0 1.0 1.1
ii) Net FCF 8,756 15,998 13,638 13,968 Asset Turnover (x) 0.5 0.5 0.5 0.5
Investing cashflow (5,054) (9,044) (9,045) (9,042) Asset/Debt (x) 1.5 1.4 1.4 1.4
iii) Residual cashflow 3,702 6,954 4,593 4,926 Gearing (%) 696 1,302 1,522 1,830
Cashflow fr equity 3,217 (2,973) - 1 Net Gearing (%) 639 983 1,134 1,198
Change in net cash 6,919 3,981 4,593 4,927 Debt/EBITDA (x) 4.1 4.5 4.1 4.3
Ending net cash (76,353) (72,372) (67,779) (62,852) Debt/ Market Cap (x) 10.3 11.9 11.3 11.9
Gross CF/Shr (Bt) 3.3 2.4 3.1 3.1 Capex/Debt (x) 0.1 0.1 0.1 0.1
CF Opera/Shr (Bt) 3.5 5.2 4.8 4.7 Capex/Sales (x) 0.1 0.1 0.1 0.1
Net FCF/Shr (Bt) 1.7 3.5 3.1 3.2 EV (Btbn) 86 81 76 71
CF Int. Cover (x) 1.9 3.0 2.6 2.7 EV/EBITDA (x) 4.2 3.8 3.4 3.2
Quarterly / Interim Income Statement (Bt m) Revenue Breakdown (Btm)

FY De
Decc 4Q2007
4Q2007 1Q2008 2Q2008 3Q2008 FY Dec 2007A
2007A 2008E
2008E 2009F
2009F 2010F
2010F
Turnover 15,893 15,940 15,084 15,044 -Basic wireline 9,307 8,586 7,938 7,549
EBITDA 3,260 5,660 4,569 6,305 -Payphone 983 715 668 637
Depr/Amort (2,046) (3,065) (3,006) (5,034) -Other fixed line 654 958 1,029 875
Opg Profit 1,215 2,595 1,562 1,271 -DDN Service 2,074 1,673 1,746 1,844
Asso & Other Inc (27) 48 (4) 72 -PCT Services 786 603 423 338
Interest (Exp)/Inc (1,586) (1,663) (1,754) (1,699) -PCT Handset Sales (6) - - -
Pre-Tax Profit (398) 980 (195) (356) -Asia Multimedia 300 63 54 52
Tax 603 (85) (825) (508) -Asia Infonet 5,027 6,314 6,753 6,821
Minority Interest 10 (615) 833 425 -UBC 8,785 9,251 9,562 9,959
Extra & Forex 567 2,458 (2,485) (788) -TrueMove 33,420 31,580 32,545 33,711
Net Profit 781 2,738 (2,672) (1,228) -Others 1,365 3,140 3,140 3,171
Sales Growth (%) 19.3 11.6 (5.7) (2.8) Total Revenues 61,641 62,883 63,858 64,958
Net Profit Gr (%) (133.9) 561.8 284.1 (202.5)
EBITDA Mgn (%) 20.5 35.5 30.3 41.9 SG&A/Sales 21.3 19.5 18.8 18.3
Tax Rate (%) 152.3 8.7 (427) (143) Other Inc./Sales 0.6 0.8 0.8 0.8
Page 4
Company Focus
True Corporation
The research analyst primarily responsible for the content of this research report, in part or in whole certifies that the views about the companies
and their securities expressed in this report accurately reflect his/her personal views. The analyst also certifies that no part of his/her compensation
was, is, or will be, directly, or indirectly, related to specific recommendations or views expressed in this report.
This document is published by DBS Vickers Securities (Thailand) Co., Ltd. ("DBSVT"), a direct wholly-owned subsidiary of DBS Vickers Securities
Holding Pte Ltd. The research is based on information obtained from sources believed to be reliable, but we do not make any representation or
warranty as to its accuracy, completeness or correctness. Opinions expressed are subject to change without notice. This document is prepared for
situation and the particular needs of any specific addressee. This document is for the information of addressees only and is not to be taken in
substitution for the exercise of judgement by addressees, who should obtain separate legal or financial advice. DBSVT accepts no liability
whatsoever for any direct or consequential loss arising from any use of this document or further communication given in relation to this document.
This document is not to be construed as an offer or a solicitation of an offer to buy or sell any securities. DBS Vickers Securities Holdings Pte Ltd is
a wholly-owned subsidiary of DBS Bank Ltd. DBS Bank Ltd along with its affiliates and/or persons associated with any of them may from time to
time have interests in the securities mentioned in this document. DBSVT, DBS Vickers Securities (Singapore) Pte Ltd (“DBSVS”). DBS Bank Ltd and
their associates, their directors, and/or employees may have positions in, and may effect transactions in securities mentioned herein and may also
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participated in any investment banking transaction as a manager or co-manager in the past twelve months. Any US persons wishing to obtain
further information, including any clarification on disclosures in this disclaimer, or to effect a transaction in any security discussed in this document
should contact DBSVUSA exclusively. DBS Vickers Securities (UK) Ltd is an authorised person in the meaning of the Financial Services and Markets
Act and is regulated by The Financial Services Authority. Research distributed in the UK is intended only for institutional clients.
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DBS Group Research . Equity 05 January 2009

Cosco dropped a bombshell, indicating that 2008 profits would be

(SP) ST Engineering: Holding Fort Equity Strategy 20: Fire sale

(MK) AMMB Holdings: Inflexion point

The acquisition of the CDMA business should help China Telecom

Singapore Research Team – 6533 9688 research@dbsvickers.com

Analyst Roadshows / Events % chg vs

Crude Oil USD/barrel 46 45

Corn Spot USD/bushel 3.83 3.75 2.3% Corn Spot

Source: Bloomberg -100% -50% 0% 50% 100% 150%

HONG KONG: AMVIG • China Pharmaceutical Group • China

KOREA: Halla Climate Control • NCSoft Corporation •

* As at 19 December 2008. Subject to change

Janice Chua . (65) 6398 7954 . janicechua@dbsvickers.com

FSSTI 1,740 (44) (2.4) (32.3) (42.4) (50.7) 3531 1474

Index Key Events

2,000 Rescue efforts by Fed and European

Source: DBS Vickers

Sector Performance (Sorted in Descending Order on 3 months Performance)

GROWTH external environment, domestic demand will be weakened by

a small portion of our coverage now. Banks’ provisions hit a -10

Earnings Estimates by Sector

LIQUIDITY Cash levels proxy for emerging markets, international equity

1,500 10.0 M1 growth heading south, expect SIBOR to remain low. M1

into deeper recession of –2% next year, property prices

USD to weaken in 2009 vs SGD. In October 2008, MAS 23

Source: Datastream, DBS

Bottom up STI target cut to 2100(base case). The cut in

Bear target of 1250 on the downside. pegged to regional

4 In the chart below, equities led the sell-down before GDP

Market poised for near term rebound. We believe valuations -5 -20

Optimism will be spurred by the swearing-in ceremony of US 20.0

President Elect, Obama on the back of his plan to pump

Closer to home, expectations of an expansionary budget in 5.0

Singapore on January 22, 2009 will underpin the market. YoY

credit in this downturn, which will reduce default rates. The

In Singapore, previous recessions have lasted between 4 to 6 STRATEGY

Div Payout Ratio (LHS) Div Yld (RHS)

Source: Bloomberg, DBS Vickers

Survivors of the fittest

Source: DBS Vickers

Singapore M&A year-to-date

Potential M & A targets

Sector recommendation and stocks for Singapore

SECTOR REMARKS STOCK SELECTION

We maintain neutral on downstream consumer goods. We expect

Sector recommendation and stocks for Singapore

SECTOR REMARKS STOCK SELECTION

Hyflux, Epure International,

ASL Marine, Ezra

Sector recommendation and stocks for Singapore

SECTOR REMARKS STOCK SELECTION

Share price appreciation + dividends

COMPANY-SPECIFIC / REGULATORY DISCLOSURES

Yeo Kee Yan (65) 6398 7955 keeyan@dbsvickers.com

FSSTI 1,740 (44) (2.4) (32.3) (42.4) (50.7) 3531 1474

FS STI FTSE Small Cap FTSE Mid Cap

Source: Bloomberg, DBS Vickers

Total V olume (LHS)

Source: Bloomberg, DBS Vickers

GROWTH AND VALUATION