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Investment Strategy December 1, 2020

SET Index 1,408.31 Change (pts) -29.47 Market Cap (Million B) 120,486.50

SET Index underwent correction as expected yesterday, but it is still driven by local and foreign fund inflow in the medium and long term. Watch political and COVID-19 issues in closely. Net Trading Value by We sell AAV and CCP and switch to KBANK. Top picks are BGRIM, Investor Type (Million B) KBANK, and STGT. Foreign -4,372.45 Proprietary 725.71 SET correction as expected. Robust in medium, long term Institutional -2,981.96 SET Index yesterday underwent correction as expected mainly because Retail 6,628.70 foreigners were net sellers at B4.37bn, probably just short-term selling from MSCI rebalancing. In the medium and long term, SET Index is still driven by foreign fund inflow and excess liquidity. In the next 1-2 days, the market is keeping an eye on the Constitutional Court's ruling on Prayut Chan-o-cha's legitimacy as prime minister on December 2, 2020 (tomorrow). If the Court disqualifies him, economic stimulus measures would be obstructed and economic recovery would be slowed down, hurting SET Index. Otherwise, if he is legitimate, concern would be softened, boosting SET Index. Meanwhile, COVID-19 infection risk in Thailand is increasing and has to be watched closely. We sell AAV and CCP (10% of portfolio) to take RESEARCH DIVISION profit and switch to KBANK. Top picks are BGRIM, KBANK, and STGT. Asia Plus Securities SET Index vs Neighbor Stock Indices Therdsak Thaveeteeratham Fundamental Investment Analyst on Capital Market, Technical Investment Analyst License No: 004132

Paradorn Tiaranapramote Fundamental Investment Analyst on Securities License No: 075365

Takit Chardcherdsak Fundamental Investment Analyst on Securities License No: 087636

Wanapruk Komonwitayatorn Source: ASPS Research (as of November 30, 2020) Fundamental Investment Analyst on Securities License No: 110506

Pawat Pattrapong Quantitative Analyst Assistant

English research reports are a rough translation of our Thai-language research products. It is produced primarily The Thai language research reports and information contained therein are compiled from public data sources and our with time efficiency in mind, so that English-English research reports are a rough translation of our Thai-language analysts' interviews with executives of listed companies. They are presented for informational purposes only and not to be research products. It is produced primarily with time efficiency in mind, so that English-reading clients can see deemed as solicitations to buy or sell any securities. Best attempts have been made to verify information from these vast what the main recommendations are from our Thai-language research team. Given that this is a rough-and-ready sources, but we cannot guarantee their accuracy, adequacy, completeness and timeliness. The analyses and comments translation, Asia Plus Securities Company cannot be held responsible for translation inaccuracies. presented herein are opinions of our analysts and do not necessarily reflect the views of Asia Plus Securities.

v MARKET TALK Investment Strategy

Watch COVID-19, political issues in Thailand There are two important issues in Thailand this week: 1) COVID-19 – Thailand has been concerned about COVID-19 again, after new cases were reported in Chiang Mai and Chiang Rai last weekend. This would adversely affect confidence and tourism in the short term. Yet, it has positive sentiment on rubber glove plays. We favor STGT(FV@B130) and its parent company STA(FV@B50). 2) Politics – On December 2, 2020 (tomorrow afternoon), the Constitutional Court will rule on Prayut Chan-o-cha's legitimacy as prime minister, following complaints that he remains at an army residence after retirement. If the Court rules that he is still legitimate, he will stay in power as prime minister, while economic stimulus measures would not be obstructed. Yet, the market have to watch protestors' stance closely. If the Court rules that he is illegitimate, future economic stimulus measures and investment would be obstructed, resulting in vacuum. Speaking of the previous time the Constitutional Court ordered Prime Minister to resign, on September 9, 2008 in the evening, the Constitutional Court ruled that , the 25th Prime Minister of Thailand, violated the Constitution by being a honorary host of his cooking shows "Tasting, Ranting" and "Touring at 6am" and disqualified him from his Prime Minister post. The economy and SET Index were affected as follows: Change in Prime Minister in 2008

Sep 9, 2008 Dec 17, 2008 Sep 9, 2008 – Dec 2, 2008

Dec 2, 2008 – Dec 17, 2008 Samak Sundaravej was disqualified as Became Prime Minister Prime Minister

Source: ASPS Research . Economy – Government spending plunged in October 2008. Fixed expense (salary, wage, consumable supplies, and subsidies) decreased 30%yoy to B84.6bn, versus the 15-year average growth in October of 17.7%yoy. Investment spending disbursement plummeted 98%yoy to only B563m, versus the 15-year average growth in October of 104%yoy. | 2

v MARKET TALK Investment Strategy

Government Budget Disbursement in 2007-2009

Million B Fixed Expense Investment Expenditure 200,000

180,000

164,251 159,555

160,000

132,739

131,280

128,632 128,632 125,971

140,000 125,248

121,123

119,691

118,357

117,227

115,870

114,772

110,789

108,354

107,822 107,295

120,000 104,918

100,423

97,960

93,934

93,861 88,182

100,000 84,630

80,000

52,983 52,029

60,000 45,111

39,973

33,830

30,098 30,098

29,793 27,336

40,000 26,813

20,237

19,966

18,627

18,252 18,253

18,023

17,224 17,224

14,222

13,110

12,602

11,608

10,673 9,664

20,000 9,468 563 563

0

Jul 08 Jul 09 Jul

Jan 09 Jan Jan 08 Jan

Jun Jun 08 Jun 09

Oct Oct 07 Oct 08

Apr 08 Apr 09 Apr

Feb 08 Feb 08 Sep 09 Feb 09 Sep

Dec 07 Dec Dec 08 Dec

Aug 08 Aug 09 Aug

Nov 07 Nov 08 Nov

Mar 08 Mar 09 Mar May09 May08 Source: ASPS Research (as of November 30, 2020) . SET Index – On September 10, 2008 (the day after Samak left office), SET Index fell 8 pts or 1.1% to 655 pts, mainly weakened by banking, construction material, contractor, and ICT plays. SET Index fell further on the second and the third day. Returns by Sector (after Samak Sundaravej left office in 2008)

Source: ASPS Research (as of November 30, 2020) Investors have to watch closely how this issue will turn out. The atmosphere in the parliament, the Constitution, and the situation outside the parliament (protests) in 2020 are greatly different from in 2008. In the medium and long term, we still believe SET Index is in an uptrend, driven by excess liquidity.

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v MARKET TALK Investment Strategy

Watch new economic boost, THB measures The market is also keeping an eye on the government's new measures as follows: . On December 2, 2020, the Centre for Economic Situation Administration's (CESA) is set to deliberate three new economic stimulus measures (see Market Talk yesterday): 1) Car trade-in scheme (replacing old cars with new cars) for 100,000 cars, 2) Half-Half package (Kon la Krueng) phase 2 extension to 2021 Chinese New Year, and 3) We Travel Together extension from January 2021 to either 2021 Chinese New Year or 2021 Songkran. Economic Stimulus Measures Economic Stimulus Measures Effective Measures Benefiting Stock Consumption Shop and Payback • Tax deduction on spending of up to B 0,000 CRC, COM7, SPVI, BJC, M

Measures under Review Benefiting Stock Consumption Half-half Co-payment Phase • OSP, TKN, SAPPE, Extending program until Feb 2021 TVO • Expanding co-payment limit in phase 2 Automotive Car Trade-in • Discount for car trade-in (replacing old car with new car) AH, SAT, STANLY

Source: ASPS Research . On December 9, 2020, the Bank of Thailand (BOT) will implement additional measures to control THB speculation. On November 20, the BOT launched three measures that boost capital outflow in the medium and long term, e.g. more flexibility for investment in securities and stricter rules for foreigners investing in Thai bonds. Investors have to watch closely which measures will be launched, probably not too severe measures. Statistically, after the BOT signaled THB control measures, THB tended to weaken before the actual meeting date. Notably, THB weakened 0.65% in the three days before the BOT launched THB control measures on November 20. THB is expected to strengthen around B30-30.5/US$. If THB strengthens beyond B30/US$, the BOT is projected to implement additional measures.

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v MARKET TALK Investment Strategy

BOT’s THB Appreciation Control Measures Period Baht control Measures

Ongoing Measure Reduce Capital Inflow

Jul – Aug 2019 Curbing issuance of short-term bonds Low Severity

Lowering cap on the outstanding balance of non-resident Jul 22, 2019 Low Severity accounts in THB Tightening requirement for non-resident holdings of Thai Jul 2019 Low Severity bonds Increase Capital Inflow

Exempting on repatriation of export proceeds Low Severity

Encouraging investment in foreign securities Low Severity Nov 3, 2019 Allowing free outward transfers Low Severity

Allowing gold trading through foreign currencies Low Severity

Allowed local investors to freely deposit funds in foreign Low Severity currency deposit (FCD) accounts. Addition to Easing regulation on securities investment for individual Nov 22, 2020 Low Severity measures on and institutional investors. Nov 6, 2019

Requiring registration for bond trading. Low Severity

Measures under Review Using international reserve for THB intervention Low Severity (manipulation)

Controlling transaction related to exchange rates of Medium Severity international financial institutions

Collecting tax from foreign investment: 1) tax on interest income from bonds and 2) tax on interest income from High Severity security trading (capital gain) and principal

Source: ASPS Research Yesterday, the BOT made a statement on the following important issues: . Economy – The Thai economy in October 2020 still contracted from the previous month (mom) as there were no new extra holiday like in September and continued to decline from a high base in the same period last year (yoy). The BOT still expects the economy to recover further in 4Q20 thanks to late- year economic stimulus measures. . THB – THB/USD exchange rate is B30.27/US$ at present, strengthening by more than 8.5% from April and by 2.8%mtd in November, even though the BOT already implemented THB appreciation curb measures on November 20.

Short-term foreign selling from MSCI rebalancing Foreign investors are adjusting portfolios in line with MSCI rebalancing, weakening Asian stock markets. Last Friday, Philippines market fell 2% as foreigners sold in advance before Monday (holiday), while other Asian still went up.

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v MARKET TALK Investment Strategy

Yesterday, foreign funds adjusted portfolios following MSCI rebalancing, so they were net sellers in all five Asian stock markets, especially South Korea at US$2.25bn, Taiwan at US$1.16bn, Indonesia at US$232m, the Philippines at US$66m, and Thailand at US$144m or B4.3bn. Foreign Trading Value in Regional Stock Markets Date Indonesia Philippines S.Korea Taiwan Thailand Total Yesterday -232 -66 -2,248 -1,166 -144 -3,856 Unit: Million US$ Source: ASPS Research Meanwhile in Thailand, passive funds already adjusted portfolios in line with MSCI rebalancing. Yesterday, passive funds were with trading value of B39bn before the closing hour (one-fourth of full-day trading value of B120bn, so closing prices of many big-cap stocks plummeted from intraday prices. This is probably just short-term foreign selling following MSCI rebalancing. This is a good entry point for big-cap stocks with solid fundamentals that already dropped.

Local, foreign fund flow to boost SET Index Fund flow is hindered in the short term by political tension, THB control measures, and MSCI rebalancing yesterday. Yet, we still expect foreign fund inflow in the medium and long term thanks to the following issues: . While foreigners are rebalancing portfolios following MSCI rebalancing on the last day of November, Asian stock markets were with foreign net selling of US$10.8bn in November 2020, marking the highest net buying in November in 20 years. Thailand was also with foreign net buying US$1.08bn or B32bn, the highest in eight years and eight months. Foreign Trading Value in Regional Stock Markets Date Indonesia Philippines S.Korea Taiwan Thailand Total 2018 -3,656 -1,080 -5,676 -12,182 -8,913 -31,508 2019 3,465 -240 924 9,377 -1,496 12,030 2020 (ytd) -2,941 -2,342 -19,475 -17,892 -8,368 -51,018 Jan-20 1 -164 -165 -751 -562 -1,641 Feb-20 -340 -179 -3,000 -4,659 -627 -8,804 Mar-20 -375 -303 -10,544 -12,077 -2,450 -25,749 Apr-20 -560 -325 -3,964 818 -1,439 -5,470 May-20 552 -166 -3,302 -5,051 -984 -8,950 Jun-20 -318 -190 -705 3,269 -737 1,320 Jul-20 -264 -124 725 269 -323 283 Aug-20 -581 -261 -2,295 -2,183 -887 -6,208 Sep-20 -1,049 -306 -990 -1,425 -738 -4,508 Oct-20 -252 -156 -434 -609 -701 -2,152 Nov-20 244 -169 5,199 4,505 1,081 10,861 Unit: Million US$ Source: ASPS Research | 6

v MARKET TALK Investment Strategy

. Compared with the highest point in 52 weeks, SET Index still has over 12% upside from a 52-week high, while developed markets have less than 2% upside from a 52-week high. Foreign Trading Value in Regional Stock Markets

Source: ASPS Research . SET Index is still laggard among TIP peers. Indonesia and Philippines stock markets already surpassed the highest points in June 2020, while SET Index still has 50 pts upside from the highest point in June of 1,455 pts. SET Index vs Neighbor Stock Indices

Source: ASPS Research (as of November 30, 2020) Fund inflow is still expected in the medium and long term. We recommend OVERWEIGHT for Thai stocks, especially big-cap stocks with good growth potential in line with economic recovery (KBANK, BGRIM, SCC, BAM, CRC, STGT) and stocks with the best growth potential among peers (AAV, PR9). Top pick today are KBANK, STGT, and BGRIM.

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v MARKET TALK Investment Strategy

SET vs Sector Return 2019 SET vs Sector Return 2020ytd

Source: ASPS Research Source: ASPS Research

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v MARKET TALK Investment Strategy

Market Talk Top Picks

Start Accumulated Price PER Dividend Cut Loss/ Stocks Weight Fair Value Strategist Comment Date Return Avg. Cost Last 2020F Yield Stop Profit

PR9's 4Q20 profit is expected to stay unchanged yoy as revenue from Thai PR9 20 Nov 20 5% 3.21% 9.35 9.65 11.00 38.09 1.02 9.00 patients grows continuously. We revise up 2020-2021 profit forecast by 15%.

STGT's 9M20 net profit beat forecast. We revise up 2020-2021 forecast as the STGT 16 Nov 20 10% -0.13% 75.35 75.25 130.00 8.27 4.84 69.00 rubber glove business grew better than expected.

BAM's 4Q20 net profit is expected to grow greatly from sales of small- and BAM 26 Nov 20 10% -0.94% 21.20 21.00 26.00 33.77 2.66 19.60 medium-sized NPL and NPA (four deals undergoing negotiation).

TISCO makes high provision with the highest coverage ratio among peers. TISCO 22 Oct 20 15% 10.30% 71.17 78.50 95.00 10.61 4.71 78.00 Only 20% of loans participate in loan payment holiday program.

Gas price is expected to drop 2%qoq to B230/MMBTU. Power sales to industrial BGRIM 26 Nov 20 10% -1.01% 49.50 49.00 58.00 48.96 0.78 46.00 customers would grow greatly, stabilizing BGRIM's profit

SCC has clear business growth plans for the next 3-5 years. Petrochemical SCC 5 Nov 20 15% 8.30% 345.33 374.00 430.00 14.17 3.48 354.00 production capacity is expected to grow 70% after LSP in Vietnam is complete.

OSP's 4Q20 profit is expected to grow qoq and yoy. Domestic sales would grow OSP 23 Nov 20 15% -3.74% 37.92 36.50 41.00 30.50 2.95 36.00 in high season, while domestic purchasing power is boosted by Half-Half package.

STEC's 2021-2022 profit will be driven by revenue growth from backlog of STEC 24 Nov 20 10% 0.00% 13.30 13.30 18.00 23.76 1.50 12.30 B78bn. It is still strong with projects in hand and financial position. STEC will rally as profit rebounds. CCP's 4Q20 profit is expected to grow qoq as construction resumes after slowing CCP 26 Nov 20 3% -2.17% 0.46 0.45 0.60 14.32 2.79 0.42 down in 3Q20 (rainy season). New high-margin precast projects will be delivered in 4Q20.

AAV's revenue will grow in 4Q20 high season, driven by pending demand from AAV 25 Nov 20 7% -2.86% 2.10 2.04 2.50 NM 0.00 1.94 domestic tourists.

Today we cut CCP and AAV from our portfolio and switch to KBANK by 10%

Accumulated returns since our recommendation Stock Classification

OSP -3.7% Defensive, AAV -2.9% 25% BAM Dividend, CCP -2.2% PR9 25% BGRIM TISCO BGRIM -1.0% STGT

BAM -0.9%

STGT -0.1% SCC CCP STEC 0.0% OSP STEC PR9 3.2% AAV SCC 8.3% Cyclical, TISCO 10.3% 50% -15.0% -10.0% -5.0% 0.0% 5.0% 10.0% 15.0% Accumulated returns Accumulated returns since beginning of the year ASPS Portfolio SET Index CASH, 0.00% 30.0% 26.04% CPF, 0.05% PYLON, 0.06% 25.0% VGI, 0.10% AAV, 0.14% 20.0% 17.86% SPVI, 0.14% KKP, 0.15% 15.0% 13.06% KSL, 0.18% BGRIM, 0.18% 10.0% INTUCH, 0.19% PR9, 0.21% 5.0% PTT, 0.22% BCPG, 0.24% 0.0% AMATA, 0.25% AP, 0.26% -1.25% TFG, 0.27% -5.0% -2.05% POPF, 0.28% CCP, -0.08% MTC, 0.37% -10.0% CK, -0.14% EA, 0.43% -15.0% -10.83% MINT-W7, -0.17% BBL, 0.46% ORI, -0.25% HMPRO, 0.50% YTD MTD -1D THCOM, 0.51% RJH, -0.19% SCCC, 0.56% BCH, -0.27% ROBINS, 0.60% Beta Portfolio CPN, -0.27% CPALL, 0.65% TVO, -0.28% SAT, 0.65% KBANK, -0.29% ADVANC, 0.80% SVI, 0.84% RS, -0.39% EASTW, 0.85% Min, Max, EGCO, -0.53% LH, 1.26% TKN, -0.54% WORK, 1.26% 0 2.004863 TPIPL, -0.62% NER, 1.36% Beta Portfolio, TTW, -0.65% COM7, 1.38% OSP, -0.72% BCP, 1.39% 0.896251175 CENTEL, 1.53% BEM, -0.72% SEAFCO, 1.67% MAJOR, -0.81% TU, 1.76% IVL, -0.91% TISCO, 1.76% PSH, -0.95% DOHOME, 1.84% CRC, -1.33% SCC, 1.95% DCC, 1.98% AOT, -1.35% PTTGC, 2.13% MCS, -1.62% RATCH, 2.44% WHA, -1.95% STA, 2.67% BTSGIF, -2.63% INSET, 2.83% PTTEP, -2.96% GULF, 3.41% BAM, 3.67% STEC, -2.98% BDMS, 3.82% JMART, -3.99% STGT, 3.88% DIF, -4.87% NOBLE, 4.40% -5% -4% -3% -2% -1% 0% 1% 2% 3% 4% 5%

Source: ASPS Research

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Equity Calendar Research Division

December 1, 2020 December 2020 Monday Tuesday Wednesday Thursday Friday 1 2 3 4 New listing - MAI > Warrant XD Last trading day XD DIMET-W4 806.553m units, B0.50 par HPF @B0.102 CHO-W2 HREIT @B0.0858 M-II @B0.150 MJLF @B0.1000 Last trading day M-STOR @B0.090 XD OTO @B0.80 B-W3 MNIT2 @B0.10 BKKCP @B0.1800 MNRF @B0.0400 CTARAF @B0.0795 XE XD TFFIF @B0.1014 GVREIT @B0.2000 CHO-W2 1:1w @B0.86 (final, "SP") BRRGIF @B0.02681 JAS @B0.20 SPF @B0.1400 XE KPNPF @B0.1108 B-W3 0.12024:1w @B4.99 (final, "SP") LHPF @B0.0500 XN SSC @B0.32 BRRGIF @B0.16 TIF1 @B0.1470

XR XN TFI 1:6n @B0.10 CTARAF @B0.0458

XW TFI 2 existing: 1TFI-W1 @free

New shares trading BCPG 0.03m shrs (w)

Conversion HYDRO-W1 0.50:1w @B1.00 MOC : Nov-20 CPI 7 8 9 10 11 XD XD AOT @B0.19 FPT @B0.60 PUBLIC HOLIDAY OISHI @B0.94 (Substitution for H.M. King UV @B0.02 PUBLIC HOLIDAY ADDITIONAL SPECIAL HOLIDAY The Great's Birthday/ National Day / Farther's Day) (Constitution Day) XR MPG 1:1w @B0.10

XW B52 8 existing: 1B52-W3 @free 14 15 16 17 18 Conversion Conversion Delist Conversion NER-W1 1:1w @B1.80 EP-W3 1.0457:1w @B4.7815 (final) EP-W3 ALT-W1 1:1w @B3.00 (final) RWI-W2 1:1w @B1.50

MPC meeting 21 22 23 24 25 XW Delist W 2.50 existing: 1W-W5 @free PRIME-W1 PRIME-W2 Conversion PRIME-W1 1.3946:1w @B1.0752 (final) PRIME-W2 1.3095:1w @B1.5273 (final) 28 29 30 31 Conversion Delist Conversion B-W3 0.12024:1w @B4.99 (final) B-W3 B-W4 1.3087:1w @B0.92 CHO-W2 1:1w @B0.86 (final) PUBLIC HOLIDAY SCB-P 1:1 (New Year's Eve)

BOT : Nov-20 Trade January 2021 Monday Tuesday Wednesday Thursday Friday 1

PUBLIC HOLIDAY (New Year's)

4 5 6 7 8 XB JUTHA 3:1n @B0.30

XR JUTHA-P 3:1n @B0.30 MOC : Dec-20 CPI MPR Press Conference 11 12 13 14 15

18 19 20 21 22 XD ADB @B0.00556 ADB 10 existing: 1STD @free

25 26 27 28 29 XD TSC @B0.50

BOT : Nov-20 Trade