Thailand 20130409

RHB Research

MARKET DATELINE THAILAND EQUITY Investment Research

9 April 2013 Morning Matters

WHAT’S INSIDE SET Intraday Chart On the Platter

Real Estate Sector Update: Expect a Short-Term Pullback

Our positive long-term view on the property sector remains unchanged although uncertainties are likely to dampen the property index in the near term. Demand remains healthy in Bangkok and upcountry, boosting the combined 1Q13 presales of five major developers by 12% q-o-q. The property

index may fall by another 10%-15% before reaching its long-term mean PE of 10x-11x.

MEDIA HIGHLIGHTS

• KTB to expand via foreign acquisitions • Govt water mega-project key factor for insurance income • Japan expected to resume imports this year: CPF • Convenient boom • Warehouse in demand • PTTGC eyes high-margin polymers • TrueVisions beefs up content • AOT says airports will not face power cuts

ECONOMIC HIGHLIGHTS

• Thailand: BOT cool to Japan's monetary easing • Japan: BOJ bond buying sends yen lower • Euro: German industrial output rose in February as economy recovered • UK: RICS house-price index rose in March as outlook improved • UK: BOE offering GBP82bn to banks, punishes savers • US: Bernanke says stronger stress-tested banks bode well for growth

Key Market Indices (5 April 2013) Key Statistics

Value Change % Change % YTD SET Value by investor Type: Daily SET 1489.53 -38.93 -2.5% 7.0% Buy (THBm) Sell (THBm) Net (THBm) SET50 982.48 -28.23 -2.8% 3.9% Institution 5,023.88 3,831.14 1,192.74 SET100 2193.89 -62.74 -2.8% 5.5% Proprietary 6,281.86 7,682.64 -1,400.77 Foreign 8,303.30 12,208.43 -3,905.14 Dow Jones 14613.48 7.37 0.1% 11.5% Retail 30,240.72 26,127.55 4,113.17 S&P500 1563.07 3.09 0.2% 9.6% Nasdaq 3222.25 -2.73 -0.1% 6.7% SET Value by investor Type FTSE 6276.94 -67.18 -1.1% 6.4% MTD (THBm) YTD (THBm) FSSTI 3284.61 -23.19 -0.7% 3.7% Institution 1,874.51 33,859.91 Hang Seng 21718.05 -619.44 -2.8% -4.1% Proprietary -2,099.96 -3,988.65 Nikkei 13301.65 224.42 1.7% 28.1% Foreign -8,971.83 -5,077.41 KLCI 1687.99 -0.47 0.0% -0.1% Retail 9,197.29 -24,793.85 SHANGHAI 2211.59 -13.70 -0.6% -2.5% SEJCI 4897.52 -25.09 -0.5% 13.5% SET50 Index Future Long Short Net MTD YTD SET 5-yr avg 2011 2012F Institution 12,891 11,795 1,096 1,061 6,172 PE (x) 14.3 17.1 13.7 Foreign 5,504 5,400 104 -3,012 -16,007 P/BV(x) 1.9 2.5 2.2 Local 19,534 20,734 -1,200 1,951 9,835 Yield(%) 4.0 2.8 3.3

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MEDIA HIGHLIGHTS RHB Research

KTB to expand via foreign acquisitions Krungthai Bank will have to acquire foreign banks if it wants to achieve its goal quickly of becoming a regional bank with a larger network in all 10 Asean countries, president Vorapak Tanyawong said. It currently has branches and a representative office in only four countries - Cambodia, Singapore, Laos and Myanmar. The banker has more than 20 years of experience particularly in capital raising, risk management and investment banking. (The Nation) Govt water mega-project key factor for insurance income The government has embarked on the initiative to improve the country's key water systems on a grand scale after Thailand suffered a major flooding crisis in late 2011. In the wake of the crisis, the demand for flood insurance policies jumped and premiums skyrocketed. This led to the launch of the National Catastrophe Insurance Fund early last year, set up to restore public confidence in the country's flood prevention and normalise the non-life insurance sector. (The Nation) Japan expected to resume imports this year: CPF Charoen Pokphand Foods, Thailand's largest poultry exporter, has high hopes that Japan will reopen the market for Thailand's frozen chicken this year thanks to improvement in bird flu control. Close cooperation by public and private sectors promises no spread of such virus throughout the supply chain, said Teerasak Urunanon, executive vice president, Livestock Food Processing Unit. In a statement released today, he said Japan is expected to reopen the market for frozen chicken from Thailand this year following the dispatches of inspectors to the Kingdom. (The Nation) Convenient boom The Thai Retails Association reported there were 12,246 convenience stores nationwide as of the end of last year. Surachet Kongcheep, senior manager at Colliers International Thailand, said 7-Eleven commands the lion's share in the convenience-store market, with around 69%, or nearly 7,000 branches, followed by Tesco Lotus Express, with more than 850 branches or a 8.6% market share. But that does not stop the two giants from gaining more ground. The operators of 7-Eleven and Tesco Lotus Express plan to increase their branches by around 500 and 200 per year, respectively. (Bangkok Post) Warehouse in demand Robust demand in the wake of the recovery in exports has piqued the interest of local investors in logistics properties, says Knight Frank Chartered (Thailand). Knight Frank said rental warehouse space totaled 2,907,907 sq m in last year's fourth quarter, up by 5.86% quarter-on-quarter and 22% year-on-year. The amount of space occupied actually increased by 141,462 sq m in the fourth quarter, indicating a positive net absorption. (Bangkok Post) PTTGC eyes high-margin polymers SET-listed PTT Global Chemical (PTTGC), Thailand's largest petrochemical producer, plans to lift its return on invested capital (ROIC) ratio to 15% within a decade from 12% last year by focusing more on higher-margin polymers products such as specialty plastics, oleochemicals and green plastics. (Bangkok Post) TrueVisions beefs up content TrueVisions, the country's leading pay-TV operator, has set aside 1 billion baht to enhance and add content without fees, seeking to retain existing customers after English Premier League (EPL) rights expire next month. One of the strategies is to add six high- definition and 11 standard-definition channels, chiefly sports and entertainment content, in different packages. It will also debut an over-the-top content service for mobile phones and tablets. (Bangkok Post) AOT says airports will not face power cuts Airports of Thailand Plc (AoT) has pledged that the six main airports under its supervision including Suvarnabhumi will not be affected by the country's reduced power reserves from April 5-14. Three power supply sources were made available for Suvarnabhumi from the District Cooling System and Power Plant (DCAP) facility at the airport and the Metropolitan Electricity Authority's On Nut and Nong Chok substations. (Bangkok Post)

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ECONOMIC HIGHLIGHTS

RHB Research

Thailand: BOT cool to Japan's monetary easing The Bank of Thailand, while conceding that the Bank of Japan's monetary easing was unprecedented, does not foresee any problem as a result of that move as the two countries are not export competitors, while the weakening yen could facilitate import of cheaper capital goods for manufacturing. Pongpen Ruengvirayudh, the BOT's deputy governor for monetary stability, said the BOJ's approximately THB40trn quantitative easing (QE) and doubling of the monetary base within two years were unprecedented, and the yen depreciated instantly in response to the move. The depreciating yen could benefit the Thai economy, especially at a time when Thailand has been improving its production capacity, facilitating cheaper imports of machinery or capital goods from Japan, she said, adding that Japan was not Thailand's competitor for exports. (The Nation)

Japan: BOJ bond buying sends yen lower The yen fell against the dollar and the euro for a third day on Monday as the Bank of Japan began aggressive monetary easing in an attempt to beat persistent deflation, while US stocks failed to follow gains in other equity markets. The dollar rallied against the yen to its highest level since May 2009, at JPY99, and the euro touched a three-year peak against the Japanese currency after the BOJ conducted its first bond purchases since announcing the new monetary easing steps last week. Since BOJ Governor Haruhiko Kuroda promised on Thursday to inject about JPY1.4trn into the economy in less than two years, the yen has fallen more than 6% against both the dollar and the euro, while Japanese stocks have soared. (Reuters)

Euro: German industrial output rose in February as economy recovered German industrial production rebounded in February, adding to signs that Europe’s largest economy is stabilizing after a contraction in the 4Q. Production rose 0.5% from January, when it contracted 0.6%, the Economy Ministry in Berlin said. From a year earlier, production dropped 1.8% when adjusted for working days. Germany’s economy probably returned to growth in the 1Q after it shrank 0.6% in the final three months of 2012. Still, business sentiment in Germany dropped in March amid renewed concerns about the sovereign debt crisis and its impact on EU, which is struggling to emerge from recession. (Bloomberg)

UK: RICS house-price index rose in March as outlook improved An index of UK house prices rose in March as transactions picked up and the outlook improved, the Royal Institution of Chartered Surveyors said. The gauge increased to minus 1 from minus 7 in February, London-based RICS said yesterday, citing a monthly poll of property surveyors. Measures of average sales per surveyor and newly agreed sales both showed growth. Separately, the British Retail Consortium said its measure of retail sales rose in March. Chancellor of the Exchequer George Osborne has pledged help for people unable to afford a home as the property-market recovery struggles to take hold, adding to aid from the Funding for Lending Scheme. (Bloomberg)

UK: BOE offering GBP82bn to banks, punishes savers UK savers are losing as Chancellor of the Exchequer George Osborne’s program to boost lending gives banks access to GBP82bn of cheap money, reducing the need to compete for deposits from the public. The average interest rate for tax-free savings accounts, known as ISAs, fell to 1.83% this month from 2.65% for April 2012, according to Moneyfacts, a price comparison firm. That compares with consumer-price inflation of 2.8% in February. Banks using the Funding for Lending Scheme pay as little as 0.75% including fees for funds. The program, which began in August, is fueling concern that efforts to spur the economy are helping borrowers at the expense of savers, particularly retirees who rely on interest to provide an income. (Bloomberg)

US: Bernanke says stronger stress-tested banks bode well for growth Federal Reserve Chairman Ben S. Bernanke said Fed tests of whether US financial companies could survive a severe recession have strengthened the banking system and aided economic growth. “Today the economy is significantly stronger than it was four years ago, although conditions are clearly still far from where we would all like them to be,” Bernanke said in a speech. Bernanke said the Fed aims to ensure banks better manage liquidity risks and reduce reliance on wholesale funding. He has led central bank efforts to minimize the odds of another taxpayer bailout following the 2008-2009 financial crisis. (Bloomberg)

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RHB Research

Outperform

Current Target Upside/ Yield Recc. Price Price Downside PE (x) (%) Remarks (Bt) (Bt) (%) 2013f 2013f

BAY Buy 32.25 41.00 27.1 10.6 3.6 BBL Buy 227.00 290.00 27.8 11.4 3.5 AMATA Buy 23.50 35.00 48.9 13.2 3.0 TICON Buy 23.40 31.00 32.5 13.3 4.5 THAI Buy 26.00 36.90 41.9 13.3 3.0

DCC Buy 62.00 97.00 56.5 16.1 6.2 . KK Buy 66.00 79.00 19.7 11.0 5.0 MBK Buy 165.50 267.00 61.3 6.9 4.2

Underperform

Current Target Upside/ Yield Recc. Price Price Downside PE (x) (%) Remarks (Bt) (Bt) (%) 2013f 2013f

CPF Sell 32.00 28.00 -12.5 26.1 1.8 TISCO Sell 54.25 48.00 -11.5 10.6 4.7 CPALL Neutral 45.00 48.50 7.8 30.3 2.4 PSL Neutral 16.90 12.83 -24.1 31.5 3.3 PTTEP Neutral 143.00 158.08 10.5 9.6 4.2 TTA Buy 17.70 23.00 29.9 68.0 0.2 SPALI Sell 18.50 15.50 -16.2 9.7 4.1

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RHB Research

DIARY OF EVENTS

7-May 8-May 9-May 10-May 11-May US Data US Data US Data US Data US Data Arial 7pt. MBA Mortage Applications Initial Jobless Claims (May (May 4) 5) Continuing Claims (Apr 28)

MY Data MY Data MY Data MY Data Automobile COE Open Bid Cat A (May 9) MY Data Automobile COE Open Bid Cat B (May 9) Automobile COE Open Bid Cat C (May 9)

MY Results MY Results MY Results MY Results Second Chance Properties Singapore Airlines Ltd Sembcorp Industries SIA Engineering ASL Marine Holdings MY Results Mewah International OSIM International Ellipsiz Ltd Wilmar International Sembcorp Marine City Developments United Overseas Bank Hiap Hoe Singapore Telecommunications Vicom Ltd

14-May 15-May 16-May 17-May 18-May US Data US Data US Data US Data US Data MBA Mortage Applications Initial Jobless Claims (May (May 11) 12) Continuing Claims (May 5)

MY Data MY Data MY Data MY Data Retail Sales Ex Auto (YoY) MY Data (Mar) Retail Sales (YoY) (Mar) Retail Sales (MoM) sa (Mar)

MY Results MY Results MY Results SATS Ltd MY Results MY Results Tiger Airways ComfortDelgro Corp Fragrance Group Global Premium Hotels First Resources Ltd Armstrong Industrial Olam International

21-May 22-May 23-May 24-May 25-May US Data US Data US Data US Data US Data Existing Home Sales (Apr) MBA Mortage Applications Initial Jobless Claims (May Existing Home Sales MoM (May 18) 12) (Apr) New Home Sales (Apr) Continuing Claims (May 5) New Home Sales MoM (Apr)

MY Data MY Data MY Data MY Data MY Data Automobile COR Open Bid Initial Jobless Claims (May Cat A (May 23) 19) Automobile COR Open Bid Continuing Claims Cat B (May 23) (May12) Automobile COR Open Bid Cat C (May 23) MY Results MY Results MY Results Avago Technologies Ltd MY Results

MY Results Global Logistics Properties Ltd

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9 April 2013

THAI NVDR : Top Ranking

Most Active Values (Btmn)

BUY VALUES SELL VALUES NET BUY NET SELL Month to Date Year to Date

Apr 13 Apr 13 1-5 Apr 13 2 Jan- 5 Apr 13 5 4 3 2 1 5 4 3 2 1 Net Buy Net Sell Net Buy Net Sell

1 DTAC 113.4 54.1 78.1 115.6 102.9 BBL -453.1 -355.0 -142.8 208.8 424.8 DTAC 464.1 KBANK -2,050.5 INTUCH 18,702.3 SCC -4,536.6

2 TMB 105.6 -17.8 122.8 -0.6 14.9 PTT -415.9 -243.6 -135.3 9.0 -128.8 TMB 224.9 PTT -914.7 DTAC 9,320.5 LH -3,552.8

3 BAY 75.9 -42.6 5.5 51.7 48.2 SCC -357.0 -162.8 -193.4 56.8 -210.2 STEC 181.9 SCC -866.6 ADVANC 5,988.3 BANPU -2,373.0

4 MINT 73.3 36.9 -20.4 8.2 -0.3 KBANK -204.2 -566.0 -634.5 -307.2 -338.7 BAY 138.6 ADVANC -452.0 PTT 5,577.5 SIRI -1,303.4

5 THAI 57.5 -7.8 170.1 -110.9 -26.7 AOT -204.0 -14.6 -70.1 -55.2 -20.6 MALEE 127.4 AOT -364.4 PTTEP 5,370.9 DEMCO -775.1

6 KTB 39.9 -45.4 28.8 78.4 -68.8 ADVANC -146.2 -2.4 -247.0 -22.3 -34.0 EGCO 110.5 SAMART -342.1 BAY 4,849.3 MINT -408.7

7 MALEE 32.8 27.3 17.9 16.1 33.3 SCB -146.0 41.0 49.6 21.4 -20.7 MINT 97.7 BBL -317.2 PTTGC 4,509.7 UV -355.2

8 STEC 29.3 74.4 5.4 8.9 63.9 CPALL -119.5 -22.7 -53.9 37.5 -34.0 AMATA 85.6 THCOM -286.4 BBL 4,270.1 CPN -308.7

9 KGI 28.1 -0.5 5.5 6.7 6.6 CPF -93.7 28.8 -22.9 -5.8 20.9 THAI 82.3 BGH -235.3 TMB 2,807.6 RML -302.6

10 DELTA 26.8 -0.9 -7.6 3.6 0.5 CPN -74.2 -18.0 -17.7 -18.8 -18.3 WORK 77.6 CPALL -192.7 BIGC 2,649.1 ASP -293.0

11 JAS 25.1 45.0 -19.0 -38.2 -41.7 BEC -70.1 -4.8 -11.3 -41.3 -5.5 RATCH 70.1 TICON -174.2 CPF 2,601.5 AAV -283.2

12 TASCO 20.2 4.6 -0.3 7.3 0.5 LH -63.0 -114.0 -23.7 44.9 17.1 BIGC 66.4 SIRI -147.1 TCAP 2,533.0 TTCL -278.5

13 HEMRAJ 19.9 -57.0 -19.3 -24.0 -23.5 BGH -54.7 -120.2 -28.9 -15.8 -15.6 TRUE 56.0 CPN -147.0 TOP 2,361.5 TRUE -274.4

14 RATCH 19.9 5.8 -3.6 35.3 12.7 PS -48.4 -5.6 -9.3 -3.0 4.4 KTC 55.4 LH -138.7 KBANK 2,013.6 STPI -272.2

15 EGCO 18.5 10.2 23.5 44.8 13.5 SAMART -45.2 -124.3 -81.4 4.5 -95.7 CK 52.6 BTS -138.1 TUF 1,723.5 AMATA -247.8

16 MK 15.2 4.1 3.5 6.6 2.3 MAKRO -44.5 -7.2 -42.7 -7.4 4.8 KGI 46.4 BEC -133.0 BGH 1,649.9 TICON -236.9

17 THCOM 14.5 -211.5 -79.9 6.5 -16.0 TCAP -40.5 -6.6 -5.6 -26.2 -1.6 ITD 36.3 HEMRAJ -104.0 SPALI 1,549.4 JAS -233.3

18 INTUCH 13.3 -11.9 41.5 -66.6 8.2 IVL -40.3 -15.2 -21.9 -9.3 2.4 KTB 32.8 MAKRO -96.9 SCB 1,528.2 MINT-W4 -205.1

19 AP 12.9 -25.9 -33.4 15.4 17.9 BANPU -39.6 -15.9 -6.9 -7.6 -2.7 TASCO 32.2 PTTEP -95.7 OISHI 1,414.4 HMPRO -181.7

20 MCOT 11.1 -21.1 -14.8 -13.7 62.4 KK -35.8 -16.9 2.0 86.7 -79.3 MK 31.6 HMPRO -92.7 CPALL 1,373.4 WHA -155.4

Most Active Volume (shares) NVDR Shares to Total Paid-up Shares(%)

Total Volume Shares % NVDR Shrs. % of NVDR Shrs. % of Paid up Capital

Buy Sell Total Net Turn. 5-Apr-13 paidup 2-Jan-13 paidup (Last)

1 N-PARK 38,042,600 43,136,400 81,179,000 -5,093,800 1.13 1 TISCO-P 22,400 66.16 22,300 65.86 33,858

2 TMB 57,983,200 15,393,500 73,376,700 42,589,700 18.44 2 BBL 598,102,821 31.33 572,486,791 29.99 1,908,842,894

3 GJS 11,742,200 16,909,700 28,651,900 -5,167,500 2.76 3 KBANK 694,367,953 29.01 682,155,834 28.50 2,393,260,193

4 BLAND 2,120,800 15,089,300 17,210,100 -12,968,500 3.88 4 TWFP 2,060,206 21.67 2,354,634 24.77 9,506,055

5 KTB 8,032,804 6,420,500 14,453,304 1,612,304 14.49 5 SPALI 371,949,426 21.67 307,949,569 17.94 1,716,553,249

6 SIRI 4,232,200 9,994,500 14,226,700 -5,762,300 5.06 6 LPN 315,968,122 21.41 320,609,239 21.73 1,475,698,768

7 JAS 8,700,200 4,620,400 13,320,600 4,079,800 7.24 7 L&E-W2 710,633 20.75 660,933 7.77 3,424,427

8 BAY 7,800,100 5,426,600 13,226,700 2,373,500 27.28 8 E-W1 64,780,642 18.67 77,281,246 22.27 347,000,000

9 HEMRAJ 8,891,400 3,774,160 12,665,560 5,117,240 24.73 9 THRE 652,488,469 18.58 544,461,149 15.50 3,512,494,860

10 TRUE 6,220,000 6,146,951 12,366,951 73,049 8.81 10 LH 1,772,734,006 17.68 2,123,251,472 21.18 10,025,921,523

11 LH 3,220,500 8,650,500 11,871,000 -5,430,000 28.32 11 DTAC 366,975,183 15.50 315,525,949 13.33 2,367,811,000

12 KGI 8,722,500 226,200 8,948,700 8,496,300 29.47 12 AP 442,731,979 15.48 367,964,647 12.92 2,859,920,138

13 IEC 400,000 8,100,000 8,500,000 -7,700,000 1.38 13 TCAP 197,412,191 15.45 161,065,653 12.60 1,277,816,397

14 BBL 2,687,850 4,718,129 7,405,979 -2,030,279 43.92 14 BAY 923,476,791 15.20 843,803,210 13.89 6,074,143,747

15 MINT 4,859,000 1,586,000 6,445,000 3,273,000 30.42 15 LRH 25,268,756 15.16 26,226,480 15.73 166,682,701

16 ANAN 4,362,500 1,703,500 6,066,000 2,659,000 41.13 16 SPCG-W1 42,167,800 15.06 37,278,800 13.31 279,999,581

17 CPF 1,572,800 4,485,100 6,057,900 -2,912,300 12.66 17 GOLD-W1 74,318,298 14.76 74,970,598 14.87 503,405,255

18 KBANK 2,378,815 3,399,800 5,778,615 -1,020,985 40.04 18 CITY 43,198,500 14.40 28,526,200 9.51 300,000,000

19 BTS 1,925,200 3,785,900 5,711,100 -1,860,700 1.69 19 THIP 1,147,700 14.35 1,011,300 12.64 8,000,000

20 LPN 2,776,000 2,578,500 5,354,500 197,500 39.21 20 TISCO 102,920,628 14.14 99,645,251 13.69 727,878,228

Source : SET.OR.TH RHB Research 0 9 Apr 2013

THAILAND EQUITY Investment Research

Wanida Geisler 66 2862 9748 [email protected] Sector Update

Real Estate

OVERWEIGHT flflfl‡fl‡‡‡ Expect a Short-Term Pullback

Our positive long-term view on the property sector remains unchanged BUYs-Earning Play although uncertainties are likely to dampen the property index in the THB Price TP PEx near term. Demand remains healthy in Bangkok and upcountry, SIRI 4.16 5.95 11 boosting the combined 1Q13 presales of five major developers by 12% 36.70 PS 26.25 11 q-o-q. The property index may fall by another 10%-15% before 29.00 LPN 22.00 11 reaching its long-term mean PE of 10x-11x. ANAN 4.06 5.50 10 No clear direction. A team from Bank of Thailand (BOT) recently visited banks and property developers, raising concerns that the central bank will BUYs-Asset Play implement stricter measures to cool the market. Restricting banks from P/ implementing 0% mortgage rates, tightening the loan-to-value (LTV) on THB Price TP NAVx condominiums from 90% to 80%-85% and pressuring banks to set higher 5.00 QH 4.16 0.8 provisioning expenses for special-mention loans (i.e. loans that are overdue for 2.58 PF 1.53 0.6 one to three months) may be the new measures being considered. However, 2.56 BLAND 1.86 0.7 judging from our discussions with major banks and developers, there are still MBK 165.50 267 0.6 no clear directions from BOT.

Real demand remains healthy. The combined 1Q13 presales of the five top developers – Sansiri (SIRI), Quality Houses (QH), Pruksa (PS), Asian Property (AP) and LPN Development (LPN) – stood at THB41bn (+12% q-o-q, +36% y- o-y). Even Ananda (ANAN), a newly listed developer, achieved 1Q13 presales

of THB2.8bn, +65% from its estimate of THB1.7bn. Aggressive expansion in provincial markets. This year, the top seven developers – AP, Land and Houses (LH), LPN, PS, QH, SIRI and SPALI – plan to

launch new residential projects with a combined value of THB240bn, of which 20% will be projects in the upcountry. SIRI’s new launches upcountry are worth THB16.3bn, followed by SPALI (THB9.3bn), PS and LH at THB6bn each and LPN (THB5bn). Previously, the upcountry residential projects were holiday homes for Bangkok folks, but there are now more developments catering to

locals and migrants that come from other provinces to work or study. Weak sentiment pressures SETPROP. Rumours of a tighter LTV emerged in Sept 2010 when the property index slipped 12%. After the BOT implemented a

90% LTV for condos and 95% for houses in Nov 2010, the property index rebounded slightly and drifted sideways for a few months before declining again by another 7%-8%. Since early this month, the property index has fallen 10% vs SET’s 4% drop, when rumours of the new LTV ruling surfaced. Amidst uncertainty over BOT’s next move, the property index will remain

sluggish despite the robust demand for property. Still modestly above long-term mean PE. The sector’s 2013f PE is now at about 13x, down from +1SD of 14x-15x but still above its long-term mean PE of 10-11x. In the near term, the property index may potentially fall by another 10%-15% and move closer to its long-term mean PE in view of uncertainties over the administration’s future measures. That said, we advise investors to buy on dips for SIRI, PS and LPN as earnings plays, QH, PF, BLAND and MBK as asset plays and ANAN as a Trading Buy.

Figure 1 Peer comparison TP PE (x) Yield (%) PBV (x) ROE % THB 2013f 2014f 2013f 2014f 2013f 2014f 2013f AP Neutral 11.30 10.0 8.9 2.2 2.4 1.7 1.5 17.3 Trading ANAN Buy 5.5 9.8 7.5 - - 2.2 1.7 22.0 BLAND Buy 2.56 n.a. n.a. - - 0.8 0.7 n.a. LH Neutral 12.00 18.6 15.9 4.5 4.2 3.5 3.3 18.7 LPN Buy 29.00 11.3 9.0 4.5 5.6 3.2 2.6 28.5 PF Buy 2.58 13.2 10.2 2.6 4.6 1.0 0.9 7.6 PS Buy 36.70 11.4 10.0 2.6 3.0 2.4 2.0 21.1 QH Buy 5.00 16.8 14.5 2.9 3.4 2.0 1.8 12.7 SIRI Buy 5.95 11.2 9.0 5.5 6.5 1.7 1.4 22.5 SPALI Sell 15.50 9.7 8.0 4.1 5.0 2.2 1.9 22.4 Take SC Profit 26.00 16.4 12.0 2.4 3.3 1.9 1.7 11.3

Source: RHBRI

Figure 2 Bank and Property Index Rumor about decreasing 550 LTV happened in Aug- 210 10, but implement LTV 500 90% for condo and 95% 190 for low -rise at 90% happened in mid-Nov10 170 450 150 400 130 350

Bank Index Bank 110 Property Index Index Property 300 Property 90 Bank 250 70

200 50 4/1/2010 7/6/2010 4/4/2012 1/11/2010 9/11/2011 16/03/2010 20/08/2010 14/01/2011 28/03/2011 16/06/2011 30/08/2011 24/01/2012 22/06/2012 Source: RHBRI, SETSMART

Figure 3 Combined presales of 5 top developers Figure 4 New launches for 2013f

THB bn THB bn 70 60 +12% qoq, +36% yoy 60 50 50 LPN Provinces 40 40 AP 30 30 PS 20 Bangkok 20 QH 10 10 SIRI 0 0 AP LH LPN PS QH SIRI SPALI 1Q13 4Q12 1Q12

Source: RHBRI, Respective Companies Source: RHBRI, Respective Companies

Buy: Share price may exceed 10% over the next 12 months Trading Buy: Share price may exceed 15% over the next 3 months, however longer-term outlook remains uncertain Neutral: Share price may fall within the range of +/- 10% over the next 12 months Take Profit: Target price has been attained. Look to accumulate at lower levels Sell: Share price may fall by more than 10% over the next 12 months Not Rated: Stock is not within regular research coverage

Disclosure & Disclaimer

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As of 04 Apr 2013, RHBIB does not have proprietary positions in the subject companies, except for: a) -

As of 04 Apr 2013, none of the analysts who covered the stock in this report has an interest in the subject companies covered in this report, except for: a) -

Singapore

This report is published and distributed in Singapore by DMG & Partners Research Pte Ltd (Reg. No. 200808705N), a wholly-owned subsidiary of DMG & Partners Securities Pte Ltd, a joint venture between OSK Investment Bank Berhad, Malaysia (“OSKIB”) and Deutsche Asia Pacific Holdings Pte Ltd (a subsidiary of Deutsche Bank Group). DMG & Partners Securities Pte Ltd is a Member of the Singapore Exchange Securities Trading Limited and is a subsidiary of OSKIB, which in turn is a wholly-owned subsidiary of RHB Capital Berhad. DMG & Partners Securities Pte Ltd may have received compensation from the company covered in this report for its corporate finance or its dealing activities; this report is therefore classified as a non-independent report.

As of 04 Apr 2013, DMG & Partners Securities Pte Ltd and its subsidiaries, including DMG & Partners Research Pte Ltd do not have proprietary positions in the subject companies, except for: a) -

As of 04 Apr 2013, none of the analysts who covered the stock in this report has an interest in the subject companies covered in this report, except for: a) -

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Risk Disclosure Statements

The prices of securities fluctuate, sometimes dramatically. The price of a security may move up or down, and may become valueless. It is as likely that losses will be incurred rather than profit made as a result of buying and selling securities. Past performance is not a guide to future performance. OSKSHK does not maintain a predetermined schedule for publication of research and will not necessarily update this report

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