10 December 2012 Americas/United States Equity Research Electrical Equipment / Capital Goods

i-Spy Research Analysts COMMENT Julian Mitchell 212 325 6668 [email protected] Global Industrials Weekly Charles Clarke 212 538 7095 ■ Japan industrials outlook for 2013: Our Japan team expects a reversal in the [email protected] outperformance of names such as Makita and Kubota, towards Komatsu, Hitachi Jonathan Shaffer 212 325 1259 Construction and Daikin (which is increasingly viewed as a US housing play, [email protected] given the Goodman deal), as the extensive headwinds (China slump, JPY appreciation, hard to soft commodity switch) facing the latter 3 stocks begin to recede. Among the FA names, CS favours Yaskawa, THK and Keyence, and expects a China rebound to be followed by a recovery in high-tech capex (chip- mounter makers already appear to be turning the corner). ■ China basic materials: CS expects 2013 to be better than 2012, as destocking pressure eases, and producers are better adjusted for slower growth rates. Supply / demand is expected to deteriorate for cement, Al, Cu, and rare earths, and improve for domestic thermal coal and tungsten. Demand-wise, there is upside from construction, but the team fears downside risks from manufacturing. The team initiated coverage of West China Cement (Dec 6) with an OP rating. Anhui Conch was upgraded to NEUTRAL from Underperform (Dec 6), reflecting better protected margins and positive outlook. ■ Swiss industrials trip: ABB highlighted some improvement in US transformer pricing following the anti-dumping legislation, as well as strong demand for industrial automation (robots) in China. Sika's comments concurred with our China trip - double-digit growth in the country has returned since Sept / October. Sulzer is continuing to see strong oil & gas demand in the US and Russia. ■ Brazil truck trends improving: The tone from a CS-hosted meeting with a heavy vehicle truck industry expert was markedly more positive than 3 months ago, given attractive credit terms made available by the BNDES; the government announced the PSI program would be extended through 2H13. ■ Rating changes / initiations: We reinstated coverage of SPW at Neutral (Dec 4); although we find the 'late-cycle' exposure and portfolio change potential interesting from a longer-term standpoint, we are cautious in the short-term given the high probability of a large M&A deal, and the downside risk to consensus 2013 forecasts. Exhibit 1: Global Performance Snapshot: The best and worst last week

10 Best Stocks 1-Week 10 Worst Stocks 1-Week 10 Best Sectors 1-Week 10 Worst Sectors 1-Week Shantui Construction Machinery 21.0% El Sewedy Electric -7.5% China Industrial Machinery 10.1% MEA Industrials -7.5% Guangxi Liugong Machinery 18.0% EnergySolutions -5.5% China Infrastructure Construction 7.5% Canada Industrials -2.2% Lonking Holdings Ltd. 16.8% S1 Corporation -5.0% China Automotive 7.4% US Aerospace -1.2% Sany Heavy Industry 16.7% Bombardier Inc -4.8% China Container Manufacturing 6.2% Japan Conglomerates -1.1% EADS 15.1% Douglas Dynamics Inc. -4.8% China Power Equipment 5.8% US Industrial Distribution -0.6% Dongfang Electric Corp 13.9% Oshkosh Corporation -4.8% European Wind Energy 4.6% US Transports -0.1% Henan Pinggao Electric Co Ltd 13.4% China Ming Yang Wind Power Group Ltd. -4.7% European Electrical/Electronics 3.5% Singapore /Taiwan Industrials 0.0% Kloeckner & Co 12.9% TransDigm -4.6% Japan Auto Related Consumables 3.1% US Electrical Equipment/Multi-Industry 0.1% Weichai Power Co. 12.6% Nissan Motor -4.6% India Capital Goods 2.9% Japan Automotive 0.1% CIMC 'A' 11.7% Suzlon Energy Ltd -4.3% European Industrial Machinery 2.7% European Automotive 0.3% Source: DataStream. S

DISCLOSURE APPENDIX CONTAINS IMPORTANT DISCLOSURES, ANALYST CERTIFICATIONS, INFORMATION ON TRADE ALERTS, ANALYST MODEL PORTFOLIOS AND THE STATUS OF NON-U.S ANALYSTS. FOR OTHER IMPORTANT DISCLOSURES, visit www.credit-suisse.com/researchdisclosures or call +1 (877) 291-2683 US Disclosure: Credit Suisse does and seeks to do business with companies covered in its research reports. As a result, investors should be aware that the Firm may have a conflict of interest that could affect the objectivity of this report. Investors should consider this report as only a single factor in making their investment decision.

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10 December 2012 Table of contents

Macro Snapshot: CS Six NT Demand Indicators 3 Performance Summary 6 Price Commentary Tracker 7 Recent Industrial Transactions 8 Recommended Reading 9 Recommended Reading Summaries 12 Macro Research/ Strategy 12 Americas Research 12 EMEA Research 20 Asia Research 23 Global Macro Forecasts 35 Valuation & Performance 36 Americas Capital Goods Valuation Summary 37 EMEA Capital Goods Valuation Summary 40 Asia Capital Goods Valuation Summary 42 CS Global Capital Goods Team 45 Global Calendars 46 Americas 46 EMEA 46 Asia 47

i-Spy 2 10 December 2012 Macro Snapshot: CS Six NT Demand Indicators

Exhibit 2: Demand Indicators – Six Month Outlook Metric Recent / Current Trend 6 month outlook Delta Lead indicators / surveys Decline in PMIs to 50-55 from 55-60+ PMIs likely to stabilize in 50-55 range 0/- Factory / durable goods orders Moderating off a very high level Continues to decelerate in OECD, but growth is high 0/+ Coincident trends Re-acceleration in developed economies Cap. Utilisation to rise, IP growth rates stay high 0/+ Company data Book-to-bills of >1X; orders slowing but high growth All regions slightly decelerate 0/- Supply side Deceleration Growth rates remain high 0/+ Transport / distributor data Moderation off high levels Moderation in air and rail traffic likely due to tough comps 0/- Source: Credit Suisse Research. Indicator #1 Lead Indicators / Surveys US ISM Manufacturing and New Orders

■ US ISM manufacturing contracted in November to 49.5%, lowest in over three years. It fell from 51.7% a month before and was below the market expectations of 51.3%

Indicator #2 Factory / durable goods orders US Factory Orders

■ Factory orders edged up 0.8% (MoM) in October which was better than the market consensus but the increase slowed from a 4.5% jump in September.

Germany Factory Orders

■ Germany Factory orders dropped 2.4% (YoY) in October whereas it rose 3.9% (MoM) better than the market consensus

Indicator #3 Coincident Trends UK Industrial Production & Manufacturing Production

■ UK Industrial Production fell 0.8% (MoM) and 3.0%(YoY) which was below the market expectations ■ UK Manufacturing Production fell by 2.1%(YoY) and 1.3%(MoM) in October below the consensus

■ Germany Industrial Production

■ German IP declined 2.6% (MoM) and 3.7% (YoY), is a huge miss from analysts expectations ■ ■ Indicator #4 Company Data

■ THK November monthly orders

■ Domestic orders were -3% YoY and +11% MoM to be 6.2bn yen and exceeded the company’s plan 5.6bn yen by 11%. Main driver for the increase was the

i-Spy 3 10 December 2012

progress of inventory adjustment for semiconductor related products. Mounters and Robots showed slight increase.

i-Spy 4

Exhibit 3: Demand Indicators

Indicator #1 Lead Indicators/ Surveys Indicator #2 Factory / durable goods orders Indicator #2 Factory / durable goods orders

US ISM Manufacturing and New Orders US Factory Orders Germany Factory Orders Factory Orders YoY% change

US ISM New Orders Factory Orders (excl transportation) YoY% change 80 30 YoY% 35

70 20 25 i-Spy 10 15 60

5 0 50 -5 -10 -15 40 -20 -25 30 -30 -35

20 -40 -45 Nov-02 Nov-04 Nov-06 Nov-08 Nov-10 Nov-12Oct-02 Oct-04 Oct-06 Oct-08 Oct-10 Oct-12Oct-06 Oct-07 Oct-08 Oct-09 Oct-10 Oct-11 Oct-12

Source: Datastream Source: Datastream Source: Bloomberg

Indicator #3 Coincident Trends Indicator #3 Coincident Trends Indicator #4 Company Data

UK Industrial Production & Manufacturing Production Germany Industrial Production THK November monthly orders

6 15 10%

10 5% 3 5 0% 0 0 -5%

-3 -5 UK Mfg. Prod. -10% (YoY%) -10 -6 -15% UK IP (YoY%) -15 -20% -9 -20 -25% -12 -25 -30% Oct-06 Oct-08 Oct-10 Oct-12 Nov-11 Feb-12 May-12 Aug-12 Nov-12 -15 201 10 December Oct-06 Oct-07 Oct-08 Oct-09 Oct-10 Oct-11 Oct-12

Source: Bloomberg Source: Bloomberg Source: Company Data

5 2

10 December 2012 Performance Summary

Exhibit 4: Company Performance Americas EMEA Asia

Best Performers 1-Week Best Performers 1-Week Best Performers 1-Week Fluor 6.1% EADS 15.1% Shantui Construction Machinery 21.0% Canadian Pacific Railways 5.8% Kloeckner & Co 12.9% Guangxi Liugong Machinery 18.0% Eltek 10.9% Lonking Holdings Ltd. 16.8% Waste Management 4.8% Vestas 9.0% Sany Heavy Industry 16.7% CACI International, Inc. 4.3% Wincor Nixdorf 6.8% Dongfang Electric Corp 13.9%

Best Performers YTD Best Performers YTD Best Performers YTD RailAmerica Inc. 84.7% OC Oerlikon 101.8% Geely Automobile Holdings 123.5% Terex Corporation 84.0% Continental 77.9% China Railway Construction Corporation 117.3% Shaw Group, Inc. 68.4% Bodycote PLC 64.4% Fuji Heavy Inds. 95.3% Manitowoc 62.5% Electrolux 58.3% China Railway Group Ltd 94.7% Ingersoll Rand 59.8% Spectris 57.5% KEC International Ltd 86.8%

Worst Performers 1-Week Worst Performers 1-Week Worst Performers 1-Week EnergySolutions -5.5% El Sewedy Electric -7.5% S1 Corporation -5.0% Bombardier Inc -4.8% PSA Peugot Citroen -4.0% China Ming Yang Wind Power Group Ltd. -4.7% Douglas Dynamics Inc. -4.8% Severfield -3.1% Nissan Motor -4.6% Oshkosh Corporation -4.8% Weir Group -2.9% Suzlon Energy Ltd -4.3% TransDigm -4.6% Laird -2.3% Hitachi -2.3%

Worst Performers YTD Worst Performers YTD Worst Performers YTD SNC Lavalin Group -26.1% PSA Peugot Citroen -57.1% China Ming Yang Wind Power Group Ltd. -46.3% Spirit AeroSystems -25.2% Vestas -51.6% Baoding Tianwei Baobian Electric Co Ltd -45.5% Joy global -23.4% Severfield -48.3% GS E&C -42.1% ManTech International Corp. -20.5% Gamesa -46.9% Sany International -41.7% Bombardier Inc -17.7% Deutz -23.1% China Datang Corp -38.6% Source: Datastream (Ex-Dividends)

Exhibit 5: Sector Performance Americas EMEA Asia

Sector Performance (Best to Worst) 1-Week Sector Performance (Best to Worst) 1-Week Sector Performance (Best to Worst) 1-Week LatAm Industrials 2.0% European Wind Energy 4.6% China Industrial Machinery 10.1% US Engineering & Construction 1.7% European Electrical/Electronics 3.5% China Infrastructure Construction 7.5% US Environmental Services 1.6% European Industrial Machinery 2.7% China Automotive 7.4% US Defense 0.9% European Aerospace & Defense 2.1% China Container Manufacturing 6.2% US Fluid Management 0.8% UK Capital Goods 2.0% China Power Equipment 5.8% US Automotive 0.7% Swiss Mid-cap Engineering 1.9% Japan Auto Related Consumables 3.1% US Machinery 0.6% European Mechanical 1.5% India Capital Goods 2.9% US Electrical Equipment/Multi-Industry 0.1% European Automotive 0.3% Korea Industrials / Shipbuilding / Autos 2.6% US Transports -0.1% MEA Industrials -7.5% Japan Machine Tools 2.5% US Industrial Distribution -0.6% Japan Infrastructure Machinery 1.7% US Aerospace -1.2% Japan/Taiwan Factory Automation 1.5% Canada Industrials -2.2% Korea Engineering & Construction 0.8% India Automotive 0.3% Japan Automotive 0.1% Singapore /Taiwan Industrials 0.0% Japan Conglomerates -1.1%

Sector Performance (Best to Worst) YTD Sector Performance (Best to Worst) YTD Sector Performance (Best to Worst) YTD LatAm Industrials 24.0% European Automotive 26.7% China Infrastructure Construction 59.4% US Fluid Management 22.9% European Aerospace & Defense 25.9% India Capital Goods 33.0% US Machinery 20.8% European Mechanical 25.1% China Automotive 30.3% US Automotive 19.7% UK Capital Goods 22.6% India Automotive 29.9% US Electrical Equipment/Multi-Industry 19.3% Swiss Mid-cap Engineering 22.4% Japan Automotive 27.1% US Engineering & Construction 16.5% European Electrical/Electronics 20.6% Japan Infrastructure Machinery 24.4% US Transports 10.5% MEA Industrials -1.1% Japan/Taiwan Factory Automation 18.1% US Aerospace 7.9% European Industrial Machinery -1.9% Singapore /Taiwan Industrials 12.6% US Environmental Services 7.7% European Wind Energy -49.2% China Container Manufacturing 7.7% US Defense 5.7% Japan Conglomerates 0.5% US Industrial Distribution 4.4% Korea Industrials / Shipbuilding / Autos -1.8% Canada Industrials -8.5% Japan Machine Tools -4.4% Japan Auto Related Consumables -7.8% Korea Engineering & Construction -12.5% China Industrial Machinery -13.8% China Power Equipment -22.2% Source: Datastream (Ex-Dividends)

i-Spy 6 10 December 2012 Price Commentary Tracker Pricing conditions remain solid in most end-markets, with the Energy sector proving the exception, with weak pricing evident in wind turbines, power grid equipment (except in the US), and thermal generation equipment.

Exhibit 6: Price commentary tracker Date Company Direction Comment Aabout pricing, if you look at 2013/2014, we expect an average price decline for the whole spectrum of the company of 2.5% to 3%. That's 11/8/2012 Siemens about the ballpark we expect. It's a bit more on Healthcare, and Energy should be significantly less and Industry, and just around the ballpark - in Cities & Infrastructure. And that 2.5% to 3% pretty much compares with what we got in 2012. 11/7/2012 Alstom - The prices are under pressure. It's not become a fairytale. We remain in the same difficult market environment in which we are. Cliamte- Relative to price cost and climate, at this point in time, the price cost was slightly green for us in the – our fourth fiscal quarter or the 11/6/2012 Emerson third calendar quarter. The – it will continue to be slightly green in this quarter coming up and then we are going through the negotiations and = most likely that will go back into other neutral type of mode at that point in time. On price, material cost, I would say we expect a small positive contribution. I would expect price to be less than a point, similar to what we're 11/5/2012 Rockwell + seeing in 2012. while at the upstream, clearly, we all know that pricing has been under pressure, we're really seeing fairly limited pricing pressure on fluid 10/29/2012 Gardner Denve = ends...2% positive price realization in both IPG and EPG… In most of the food-related markets and also Refrigeration Technologies has quite a substantial explosion into the food market, pricing 10/29/2012 Gea + situation is rather good We will increase prices on a standard way within the bracket standard but in a normal way, in the beginning of the year, and we will act in a 10/29/2012 Assa Abloy + flexible way depending on how competition is acting At the current time, things are fairly positive, as far as what we see. We're looking at roll-over pricing. Small adjustments in different places. 10/25/2012 Timken = But for the most part, it's looking pretty steady Now, we are still, as I said, targeting to deliver around € 60 million of price positive in the second half of 2012. So we are still playing on price. 10/25/2012 Schneider My feeling is that it will be difficult to increase price across the board in the coming quarter, because the environment will not allow for that. So + we try to be more tactical, to look at the places where it's possible and it's still possible in some places. We had some price improvements in low voltage products of about 1% to 1.5%, that really helped. The pricing pressure we talked about 10/25/2012 ABB easing was really – on the order side was consistent with the 3 to 4 to what we saw in the second quarter of this year. We talked about pricing - pressure easing on the revenue side and that just is what comes out of backlog. There is a slight improvement in transformer pricing and a bi i tihihlt dt YtkPAhihith itiht ' t i j Absolutely staying. The pricing has stuck. 10/24/2012 KMT + Challenging pricing environment offset some of the benefits. Southern Europe customers are hesitating to sign orders and therefore the 10/23/2012 Schindler - pricing pressure has intensified. we have been increasing prices all the time in most markets and especially so in the United States from the middle of last year, and that 10/23/2012 Kone development has been necessary and it has been positive. we have had a positive development in pricing, so China is one of the markets + where we have been able to do that positively. It's a stable price environment. Of course, it varies a little bit with products. But for our main products where we have a strong position, prices are stable. Prices are broadly for metals then somewhat lower than in 2011. We made some adjustments to prices for standard products in 10/23/2012 Alfa Laval = the beginning of the year. Marine - We had, again, all in all, an adverse price mix effect in quarter three over quarter two.

Price realization was favorable $305 million, We do have some pricing next year. We announced, not huge, but some price increase for next 10/22/2012 Caterpillar + year that would certainly be positive. Prices were up year-over-year due to strong price management in North America and higher prices in Latin America and Southeast Asia. 10/22/2012 Electrolux + We've been able to increase prices in a key Brazilian market. All the businesses continue to realize positive pricing, and in the third quarter, our price realization outpaced direct material inflation for the 10/19/2012 IR + sixth consecutive quarter. Thermal - down 19%, driven by lower balance of plant revenues, lower pricing, and foreign exchange, Appliances - Pricing is up and year-to- date share is up about 1.1 points, Lighting - segment profit of $61 million was up 61%, driven by the higher pricing, Aviation - margins in the 10/19/2012 GE - quarter, stronger pricing was a big part of it, and cost productivity was the other part that Aviation got, and we expect those two factors to continue. In Advanced Materials and R&C, the pricing environment we expect to remain weak, with challenging supply and demand conditions... From 10/19/2012 Honeywell a pricing perspective, it's still okay. As you know, you're never going to see a 7% price increase from us unless it's driven by ROS, like in = R&C. In Utility Segment, the pricing environment, as the capacity has become a main issue, has improved and we expect to see that in the quality 10/18/2012 Valmont + of earnings going forward. Life science price, was slightly negative in Q3 but I think that's pretty comparable to what we saw in the first half. Probably a little bit element of that in T&M, price probably a little bit more of an impact on margins. We were running probably about a half a point of price in the first half 10/17/2012 Danaher = of the year and we did not get any price in test. It wasn't negative but we didn't get any price in the third quarter so that probably hurt us a little bit on the margin side in T&M. Price/mix was positive in the quarter, but a little lower than what we've been normally used to. The last price increases we announced in 10/17/2012 SKF Europe and North America are in place and we had some positive impact of these. But the price/mix was negatively impacted by the mix of + business within the business areas and especially the intra-divisional mix. 10/17/2012 Stanley B&D = Globally adding all three segments together volume was flat, price was flat, which arithmetically is 0% in terms of organic growth. Source: Company data

i-Spy 7 10 December 2012 Recent Industrial Transactions

Exhibit 7: Recent Industrial Transactions x, unless otherwise stated EV/TTM or EV/Last FY EV/NTM or EV/Next FY EBITA or Announced Deal Announce Date Acquiror Target Sales EBITDA EBIT Sales EBITDA EBITA or EBIT Value (USD mn) 30-Nov-12 Dover Anthony International 1.9 16.0 $603 29-Nov-12 Siemens Invensys (Rail) 2.3 15.0 $2,780 16-Oct-12 ITT Corp Bornemann Pumps - - - 1.8 - - $267 16-Oct-12 Safran Goodrich Electric Power Systems - - - 2.0 - - $400 16-Oct-12 Bodycote Bluewaters - - - 2.0 - 8.0 $68 10-Oct-12 Bain Capital Apex Tool 1.1 7.1 - - - - $1,600 9-Oct-12 Spectrum Stanley Black & Decker (HHI) 1.4 7.5 $1,400 1-Oct-12 Honeywell Thomas Russell - - - 1.7 6.0 - $525 17-Sep-12 Danaher Corporation IRIS International, Inc. 2.8 28.1 - 2.6 10.5 13.0 $338 28-Aug-12 Daikin Industries Ltd Goodman Global 1.9 10.5 12.3 1.8 10.1 11.8 $3,700 16-Aug-12 Clayton, Dubilier & Rice Decorative Surfaces(51%)-ITW unit 1.9 - 15.6 $1,050 9-Aug-12 National Oilwell Varco Robbins & Myers 2.4 - 9.3 2.3 8.7 $2,500 8-Aug-12 Platinum Equity Clipper Windpower (UTX) ------30-Jul-12 Roper Sunquest - - - - 10.1 14.2 $1,415 25-Jul-12 BC Partners&Carlyle Milton Roy, Sullair (UTX) 1.8 9.5 - - - - $3,460 23-Jul-12 GenCorp Inc RocketDyne unit (UTX) 1.8 9.5 - - - - $550 5-Jul-12 GKN Volvo Aero 1.4 - - - - - $1,000 18-Jun-12 Melrose Elster - - - 1.2 8.4 - $2,300 21-May-12 Eaton Cooper Industries 2.1 12.9 15.3 2.0 12.0 12.6 $11,800 15-May-12 GE Industrea Ltd 1.8 5.5 8.8 1.6 4.5 6.6 $690 15-May-12 GE Fairchild International ------NA 10-May-12 Platinum Equity Caterpillar Logistics Services ------$750 8-May-12 General Electric China XD (15% stake) - - - 1.8 30.2 - $535 26-Apr-12 Ametek Dunkermotoren - - - 1.7 - $250 25-Apr-12 Dover Production Control Services 2.4 - - - - - $220 10-Apr-12 Danaher X-Rite 2.5 10.0 11.5 2.6 10.3 - $625 10-Apr-12 Cobham Thrane & Thrane 2.3 - 14.8 - $428 2-Apr-12 Bodycote Curtis Wright HT 1.4 - 6.2 1.4 - 6.8 $52 20-Mar-12 Siemens Connectors & Measurements, Expro Holdings 5.2 - - - - - $620 19-Mar-12 Amazon Kiva Systems ------$775 10-Feb-12 Dover Maag Group 1.6 9.3 12.6 $290 30-Jan-12 ABB Thomas & Betts 1.7 11.1 14.6 - - 13.6 $3,857 30-Jan-12 Siemens RuggedCom Inc. ------$383 30-Jan-12 Sany Heavy Putzmeister 0.6 - - - - - $475 25-Jan-12 Weir Novatech 2.8 7.0 - - - - $176 24-Jan-12 Robert Bosch SPX- Service Solutions - 12.7 - 1.2 - - $1,150 17-Jan-12 Kennametal Deloro Stellite 1.3 8.0 - - - - $354 30-Dec-11 American Indl Partners Heil Trailer (DOV unit) ------$220 12-Dec-11 ABB Newave Energy 2.1 12.8 15.7 - - - $183 23-Nov-11 Weir Seaboard Holdings - - - 3.1 11.7 - $675 17-Nov-11 Rotork Fairchild 3.6 - 12.0 - - - $76 10-Nov-11 Caterpillar ERA Mining Machinery 2.2 16.3 18.0 1.4 12.5 - $885 1-Nov-11 Honeywell King's Safetywear - - - 2.4 11.5 - $338 11-Oct-11 Gardner Denver Robuschi 2.2 - - - - - $207 4-Oct-11 Flowserve Lawrence Pumps 2.0 11.1 - 1.8 8.9 - NA 3-Oct-10 AGCO GSI Holdings - - - 1.3 7.8 - $940 12-Sep-11 Colfax Corp Charter International 0.9 7.6 9.1 0.8 7.2 - $2,440 7-Sep-11 KPS Capital Crenlo, Paladin (DOV units) ------$290 2-Sep-11 Smiths Group Power Holdings Inc - - - 1.5 8.4 10.0 $235 31-Aug-11 Cameron Intl LeTourneau's Drilling Segment - 11.0 14.4 - - - $375 31-Aug-11 Timken Drives LLC 0.9 - - - - - $92 25-Aug-11 SPX Corp ClydeUnion Pumps 2.6 - - 1.7 12.0 - $1,147 22-Aug-11 Electrolux Compania Techno Industrial 1.2 7.4 8.0 - - - $557 18-Aug-11 Cree Ruud 2.6 - - - - - $656 15-Aug-11 Spectris Omega Engineering 2.8 - 12.0 - - - $475 27-Jun-11 StanleyBlack&Decker Niscayah 1.2 14.1 - 1.2 13.3 - $1,177 15-Jun-11 Sensata Sensor-NITE 2.4 - - - - - $320 13-Jun-11 Honeywell EMS Technologies 1.3 12.4 - 1.1 9.5 - $491 9-Jun-11 Schneider Leader Harvest 5.2 26.0 30.6 4.3 21.7 25.5 $650 6-Jun-11 KDI Dynacast 1.4 7.7 9.1 1.3 6.6 7.7 $590 1-Jun-11 Schneider Telvent 1.8 11.6 17.1 1.7 10.5 14.2 $1,650 20-May-11 Toshiba Landis & Gyr 1.4 10.7 - - - - $2,300 7-Apr-11 Sulzer Cardo Flow 1.9 12.8 - - - - $935 29-Mar-11 GE Converteam 2.4 14.9 16.5 1.9 11.4 13.4 $3,200 13-Feb-11 GE Well Support (John Wood) 3.0 16.9 22.2 2.5 14.0 17.5 $2,850 7-Feb-11 DHR BEC 1.9 8.9 15.0 1.8 8.0 13.9 $6,800 13-Jan-11 GE Lineage 1.2 8.0 8.7 - - - $520 3-Jan-11 DOV Harbison Fisher 2.1 10.1 15.5 2.5 8.9 13.4 $403 22-Dec-10 DOV Sound Solutions 2.6 9.3 17.8 2.4 8.1 16.1 $855 16-Dec-10 Assa Abloy Cardo 1.3 10.1 12.1 1.2 9.1 10.8 $1,670 13-Dec-10 GE Wellstream 3.0 20.4 28.4 2.3 13.3 16.3 $1,367 30-Nov-10 ABB Baldor Electric 2.5 14.1 18.6 - - - $4,146 15-Nov-10 CAT BUCY 1.8 10.4 - - - - $8,610 22-Oct-10 GE Clarient 5.8 42.0 59.0 - - - $447 6-Oct-10 GE Dresser 1.5 8.3 9.4 - - - $3,000 27-Jul-10 Onex / Others Tomkins PLC 1.2 11.2 - 1.1 7.8 - $4,766 Source: Bloomberg, Reuters, Company data, Credit Suisse Research

i-Spy 8 10 December 2012 Recommended Reading

(Bullets from each recommended reading note are provided in subsequent pages of iSpy)

Exhibit 8 Macro/Strategy ■ November Manufacturing PMI Roundup; Consistent with a mild uptick; Neal Soss; 03 December 2012

■

Exhibit 9 Global Research ■ Global Aerospace & Defense; BA, SPEEA to Resume in '13; BA Buyback Announcement Next Week?; Robert Spingarn; 07 December 2012

■ Global Equity Strategy; 2013 Macro and Market Outlook; Andrew Garthwaite; 04 December 2012

■ Global Aerospace & Defense; LRIP-5 Done; GOP Rejects Obama Offer; Robert Spingarn; 03 December 2012

■

Exhibit 10: Americas Research ■ EE/MI; Outlook meetings likely to be broadly positive; Julian Mitchell; 07 December 2012

■ McDermott International; Takeaways from DB50 Tour; Jamie Cook; 07 December 2012

■ Ingersoll-Rand Plc; Strategy update should underline capital returns / margins potential; Julian Mitchell; 06 December 2012

■ Canadian Pacific Railways; Hunter Getting the House In Order; No Structural Issues in the Network; Christopher J. Ceraso; 06 December 2012

■ LatAm Capital Goods; How Bullish Can We Get?; Bruno Savaris; 05 December 2012

■ Canadian Pacific Railways; "Do What You Say You're Gonna Do;" A Taste of the New CP; Christopher J. Ceraso; 05 December 2012

■ L-3 Communications; Defense's FCF Yield Leader Hosts Analyst Day; Robert Spingarn; 04 December 2012

■ US Truck Orders – November; Just Passing By; Jamie Cook; 04 December 2012

■ SPX; An interesting journey—but one that we prefer to watch from the sidelines, for now; Julian Mitchell; 04 December 2012

■ Fluor; Ma'ad-Men; Jamie Cook; 03 December 2012

■ Exhibit 11: EMEA Research ■ Smiths Group; Cautious on macro. Confident in own abilities; Andre Kukhnin; 07 December 2012

■ Schindler-Holding AG; Positive meeting. Investment case intact; Andre Kukhnin; 05 December 2012

■ CS Pan-Euro Capital Goods; Notes from the road - Swiss Industrials Tour; Andre Kukhnin; 05 December 2012

i-Spy 9 10 December 2012

■ Swiss Midcap Conference; Conference Key Takeaways; Patrick Laager; 05 December 2012

■ OC Oerlikon Corp AG; Moving into phase two of its transformation; Patrick Laager; 04 December 2012

■ Exhibit 12: Asia Research ■ Machinery sector; Keyword for 2013: normalization; looking for the timing of shift from Makita, Kubota to construction names; Shinji Kuroda; 07 December 2012

■ Kubota; Maintain NEUTRAL; seek to time investment shift to construction machinery stocks; Shinji Kuroda; 07 December 2012

■ Daikin Industries; A stock to watch in 2013; Shinji Kuroda; 07 December 2012

■ Ebara; Maintain NEUTRAL rating, continue wait-andsee Stance; Shinji Kuroda; 07 December 2012

■ Makita; Maintain UNDERPERFORM; profits firm but shares overvalued; Shinji Kuroda; 07 December 2012

■ Komatsu; Reiterating NEUTRAL; concerns should gradually dissipate; Shinji Kuroda; 07 December 2012

■ Hitachi Construction Machinery; Maintain NEUTRAL; still in wait-and-see mode; Shinji Kuroda; 07 December 2012

■ Bajaj Auto Limited; Domestic volumes to be a near-term trigger; structural story on exports intact; Jatin Chawla; 06 December 2012

■ Anhui Conch Cement Co. Ltd.; 2013 outlook: Better protected margin in oversupplied market; Trina Chen; 06 December 2012

■ China Basic Materials Sector; 2013 outlook: the new "norm"; Trina Chen; 06 December 2012

■ Korea Construction Sector; Key takeaways from recent meetings with various property experts; Minseok Sinn; 05 December 2012

■ Keyence; Maintain NEUTRAL; core holding for uncertain times; Shinji Kuroda; 05 December 2012

■ Machinery sector (Factory automation); Keyword for 2013: normalization; reiterate OUTPERFORM on Yaskawa Electric, THK; Shinji Kuroda; 05 December 2012

■ Nabtesco Corporation; Recovery expectations appear priced in; maintain NEUTRAL; Shinji Kuroda; 05 December 2012

■ THK; Maintain OUTPERFORM; poised for steady share price gains through spring 2013; Shinji Kuroda; 05 December 2012

■ SMC; Maintain NEUTRAL; profit rebound already priced in; Shinji Kuroda; 05 December 2012

■ Yaskawa Electric Corporation; Maintain OUTPERFORM; surging monthly orders, strong momentum in profit rebound noteworthy; Shinji Kuroda; 05 December 2012

■ Fanuc; Maintain NEUTRAL rating; now expect firm share price performance; Shinji Kuroda; 04 December 2012

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■ Okuma Corporation; See downside risk until 3Q results; maintain UNDERPERFORM; Shinji Kuroda; 04 December 2012

■ Mori Seiki; Looks overbought; maintain UNDERPERFORM; Shinji Kuroda; 04 December 2012

■ Amada; Maintain OUTPERFORM; poised to benefit from housing rebound in North America and Japan; Shinji Kuroda; 04 December 2012

i-Spy 11 10 December 2012 Recommended Reading Summaries Macro Research/ Strategy November Manufacturing PMI Roundup; Consistent with a mild uptick; Neal Soss; 03 December 2012

■ Viewed at a global level, the manufacturing PMI index remained largely unchanged at 49.6 in November after improving for three consecutive months between August and October1. The forward-looking new orders index followed a similar pattern and moved down slightly to 49.9 in November from 50.1 in October. This set of data confirms that, while global manufacturing activity may have stabilized, it has not yet picked up meaningfully. ■ The unchanged November global aggregate reflects a somewhat lower US ISM survey, largely offset by the resilience in the rest of the world. In the US, the November ISM Manufacturing index came in below market expectations and fell beneath the 50 breakeven mark to 49.5 (from 51.7 in October). The new orders sub- component fell 3.9pp to 50.3. Hurricane Sandy did not appear to have a large impact in delaying the supply chain, as the Supplier Deliveries uptick was not overly large. However, some respondents mentioned concerns “over how and when the fiscal cliff issue will be resolved." The silver lining in the report was Customers' Inventories, which fell to an 11-month low, suggesting the weakness will not last. Both the New Orders-Inventories and Production-Inventories spreads hit six-month highs. In Japan, the PMI declined slightly to 46.5 from 46.9 the month before. ■ The euro area manufacturing PMI rose to 46.2 from 45.4, on the back of a fairly broad improvement in the survey's components. Output rose to 46.1 from 45.0, orders rose to 44.2 from 43.3, with new export orders up to 46.4 from 45.3 and employment to 47.3 from 46.1. The orders-to-stock spread – a reliable indicator for activity – advanced further in November. The improvement is consistent with our view that the gap between surveys and hard data will be closed in coming months via improvement in the former and slowing momentum in the latter

Global Research Global Aerospace & Defense; BA, SPEEA to Resume in '13; BA Buyback Announcement Next Week?; Robert Spingarn; 07 December 2012

■ Boeing, SPEEA Talks Pushed to 2013; We Expect Buyback Announcement Soon: After talks resumed with the help of two Federal mediators, discussions resulted in both sides “accepting a recommendation to suspend contract negotiations until after Jan. 1.” The parties are at an impasse on pension, salary and medical benefit policies. (WSJ, 5-Dec-2012) CS View: While there does not appear to be a clear solution in the near term, delaying the negotiations pushes risk of a SPEEA strike beyond an anticipated disclosure of the latest dividend and buyback plan that the market is tying to the upcoming board meeting (likely next week). We’re expecting a share repurchase program somewhere ~$6B over the next 3 years, giving Boeing year-to-year flexibility. ■ TransDigm & Goodrich Terminate Agreement to Acquire Engine Controls Business: TDG announced that the agreement to purchase Goodrich’s Pump & Engine Control Systems business has been terminated after the Department of Justice objected to the $236M transaction. Approval of the DOJ was required under

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the agreement. TDG CEO Howley believes the event will “not impact future acquisitions." (TransDigm, 7-Dec-2012) ■ Esterline Reports Solid FQ4; Introduces Reasonable FY’13 Guide: ESL reported operating EPS of $1.77, a 10.4% beat vs. the Street’s $1.60. Initial FY’13 guide of $5.45-$5.80, however, was the main focus of the call, coming in 2% above consensus at the mid-pt. FY’13 excludes a 2nd tranche of int’l C-130 retrofit orders due to timing uncertainty, which we expect to provide an add’l 20-cents of upside. 35-cent guidance range embeds conservatism for defense downside but would likely not absorb full sequester. ■ 787 Makes Safe Emergency Landing – The 787 that made an emergency landing on Tuesday experienced the failure of 1 of its 6 electrical generators, “likely causing the multiple system-error messages…that prompted the pilot to declare an emergency and land ■ Boeings 747-8 Freighter Loses Orders – DAE’s leasing unit “canceled orders for 5 747-8F jets” despite recent news that BA has increased performance of the most recently delivered model. (more inside…) CS View: We think the issue here is more attributable to the customer than the airplane. DAE’s leasing unit once had an order book of over 100 jets and has been shrinking since the 2008 global economic crisis.

Global Equity Strategy; 2013 Macro and Market Outlook; Andrew Garthwaite; 04 December 2012

■ Macro: we expect a slight acceleration in global GDP growth to 3.4% next year (80% of GDP growth is from emerging markets, the private sector in the US should grow at c3-3.5% and commodities act as less of a constraint on global growth). The rate of expansion of developed market central bank balance sheets is set to increase from the meagre 2% increase in 2H 2012. We continue to believe that to stabilise government debt-to-GDP ratios and unemployment in the developed world, real 10-year bond yields need to fall to minus 1 ½% to minus 2%. More QE is needed to achieve this. ■ We increase our overweight of equities (adding back the money we took out in early October). We are underweight government bonds. We prefer equities to corporate bonds (but, importantly, would be overweight corporate bonds versus government bonds). We have a bias to emerging rather than developed market bonds. We reduce our overweight of gold and stay a large underweight of cash. ■ Regionally, we stick to the positions we outlined in our report on regional allocation on 9 November (Regional allocation: an early look into 2013): overweight GEM and UK, benchmark Japan, underweight the US and Continental Europe (favouring DAX, domestic Germany, dollar earners and Italy).

Global Aerospace & Defense; LRIP-5 Done; GOP Rejects Obama Offer; Robert Spingarn; 03 December 2012

■ LMT & DOD Reach Agreement for F-35 LRIP Lot 5 – After nearly a year of discussion, the $3.8B deal (22 CTOL, 3 STOVL, 7 CV) should be signed by year- end to avoid loss of funds to Sequester. Lockheed’s CEO-elect Marillyn Hewson conveyed her confidence in achieving Lot 5 before year-end at the Credit Suisse A&D Conference last week and the conclusion of negotiations makes way for talks

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about preliminary funding for Lot 6, of which LMT has been self-funding to maintain production. (Reuters, 29-Nov-2012) ■ GOP Rejects Cliff Offer From Obama - President Obama “made an opening bid in budget talks with Republicans” calling for $1.6T in tax increases, $50B in infrastructure spending in 2013, and the ability to raise the federal debt limit.” While Republicans have not put another offer on the table, they have indicated willingness to accept $800B in revenues over 10 years and have pursued larger spending cuts in exchange for their concessions on taxes. (WSJ, 29-November-2012) ■ SPEEA Boeing Negotiations Heat Up - Last week BA rejected SPEEA’s counterproposals and said it would seek help from a federal mediator. A group of union members then threatened a one-day unauthorized strike. While SPEEA circulated a letter "asking members to ignore the call for a strike," Reuters estimates a strike would cost Boeing ~$400M/day (sales we assume). (Seattle Times, 29- November-2012) ■ CS Conference Takeaways: Last week we hosted our annual Aerospace and Defense conference. On end markets, the comm’l OE cycle appears intact, with firms confident rising rates can withstand short-term (read: 2013) softness in orders. On comm’l aftermarket, the 2013 outlook remains mixed, with company growth forecasts ranging from flat to +10%, and most noting the restocking/destocking cycle is over. In defense, our DOD speakers remain concerned about budget uncertainty, but generally think Sequester will be deferred, followed by a deal in Q1. But, if triggered, they say Sequester would not be instantly cataclysmic, but a drawn-out process. Also, UnderSec ATL Kendall said he would not support top-tier defense mergers. ■ WWD Investor Day Highlights – WWD’s 2nd Annual Investor Day in NYC last week was highlighted by long-term sales target updates and retained margin expectations. The company lowered its 5-year top-line growth outlook from 12% CAGR to 10% CAGR due to slower market growth expectations in Energy. Margin targets in Aero and Energy (20% / 16% respectively) were retained, implying ~300bps of margin expansion over the outlook period

Americas Research EE/MI; Outlook meetings likely to be broadly positive; Julian Mitchell; 07 December 2012

■ Eleven industrial companies are due to provide updates in the next 10 days. The ones we cover are likely to share a common 2013 organic outlook of low-single digit core growth and high-single digit / +10% EPS growth, but beyond this, there should be some additional items of interest: ■ Dover: We think Dover will likely affirm that the improvement in Sound Solutions' production performance is complete; beyond this, we remain cautious on the competitive landscape for Comm Tech, and are skeptical as to how easy it will be to re-take market share. News on capital allocation / portfolio change should be minimal, given the recent buy-back / divestment announcement, and the $1.2bn spent on deals YTD. Likely reaction: Neutral / positive. ■ Danaher: The biggest catalyst would be that organic growth is picking up, but we think that, China aside (per our recent trip), this is unlikely, given potential larger y- o-y declines in Europe, and slowing dental / healthcare growth (per the NY Dental Show). The opportunity for substantial M&A will be re-iterated, but this is not news. Likely reaction: Neutral.

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■ Honeywell: The company already flagged the outlook for 'similar' earnings growth in 2013 as we have seen in 2012, and we do not expect any news on capital allocation / portfolio reshuffling, other than a potential commitment to increased M&A in Aero and ACS. Likely reaction: Neutral. ■ GE: We think an increased emphasis on cost-reduction is likely given the sluggish operational leverage in Energy. Ongoing M&A discipline, a doubledigit dividend increase in the year ahead, commentary on buy-back plans, and ongoing divestments at GE Capital should also be well-received. We hope that investors are no longer expecting a 2013 US gas turbine rebound (the Siemens and GE plant tours next week should underline the subdued outlook here). Likely reaction: Positive. ■ UTX: We think consensus estimates are sufficiently conservative for 2013, given the improving outlook in China / the US in Carrier / Otis, the major cost-reduction in F&S, and a possible resolution of the Sikorsky CMHP issue. These should offset a weak organic outlook for Pratt large commercial engine spares (per the recent A&D conference). A more shareholder-friendly capital allocation program in 2013 (buy- back), and the fact we are exiting a year of 'transition' should be well-received. Likely reaction: Positive. ■ IR: Likely reaction: Positive (see our report out last night for more details).

McDermott International; Takeaways from DB50 Tour; Jamie Cook; 07 December 2012 We had the opportunity to tour MDR's recently refurbished and upgraded Derrick Barge 50 vessel in Galveston, Texas. Takeaways are as follows: ■ DB50 Upgrades Allow Greater Capabilities: MDR invested more than $150M for upgrades on the DB50 vessel. The improvements include new engines, thrusters, an upgraded power management system, and a new crane with capacity of 480 tons to a depth of 11,500 ft. Altogether, the renovation allows for fewer down days and a greater range of capabilities for deepwater work, with a focus on the Western hemisphere, including the Gulf of Mexico, Brazil and the Caribbean. The DB50 is scheduled to begin the Williams project in Q2’13 with Papa Terra to follow. Other book-and-burn type work could occur in early 2013. ■ Capital Investments Continue to Focus on Deepwater Opportunities: MDR continues to be very positive on opportunities in the deepwater space, as the company is investing capital in vessels with capabilities for subsea work. The investments include the $150M upgrade for the DB50, the LV 108, as well as a decision to build the Deepwater Lay Vessel 2000, an ultra deepwater S-lay vessel, that is expected to cost $450M. The new S-lay vessel fills an important capacity that was previously missing, as shown when MDR sub-contracted out heavy lift work for Ichthys. MDR is also planning to divest three older ships (the Bold Endurance, DB16 and DB26) by Q3’13, with one finished by 2012 end, in order to focus on the deepwater market. Any additional investments would be modest compared to the DLV 2000. The next investment decision is expected to come in the next few quarters. ■ Management Sees 2014 as a Better Year: MDR remained confident 2014 would be a better year as there is already $2-2.5B booked and scheduled to hit in 2014. Other projects still out to be bid on for 2014 include work in the Atlantic region, the BP Mad Dog project, and Pemex. Despite project push outs, MDR stated there have been no cancellations, similar to commentary during its earnings call. The large projects continue to be a question of "when" vs. "if".

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Ingersoll-Rand Plc; Strategy update should underline capital returns / margins potential; Julian Mitchell; 06 December 2012 Ingersoll-Rand in the coming days is likely to issue the results of its strategic review, which has been taking place since midyear. We think that the stock is worth owning into this event, as expectations are not particularly high—Lennox has seen its share price rise by ~6% more than IR over the past 12 months, suggesting that end- market attributes, rather than self-help, have been the dominant driver of performance. IR's share price is flat with 2 years ago, and its valuation is inexpensive (2013 P/E of 12-13x). We continue to think that IR is capable of generating medium-term EPS of $5, implying fair value of $60-plus. We increased our TP to $51 (from $47). ■ Current trading: We think that the company should be able to hit the Q412 guidance, given no 'red flags' from peers such as Atlas Copco / Assa Abloy on compressor / security demand at their recent analyst days. ■ Share buy-back update: Assuming a target net debt / EBITDA of 1.5X over 2 years would imply $2bn of spending on M&A or buy-backs (we assume ongoing dividend increases already); M&A is unlikely, until we see a greater improvement in margins; using the proceeds for buy-backs would add $0.60 to EPS. Our current 2013 EPS estimates embed ~$470mn of share repurchase. ■ Operational outlook: IR is capable of hitting midteens operating margins in the next 2-3 years, and we think any medium-term strategy at the company has to embed this view; the CCS segment within UTX has earned mid-teens margins in the past two quarters. More aggressive cost-cutting should be envisaged.

Canadian Pacific Railways; Hunter Getting the House In Order; No Structural Issues in the Network; Christopher J. Ceraso; 06 December 2012

■ No Structural Issues: Contrary to arguments made by the previous mgmt team, Harrison made it clear that CP does not have structural issues that put it at a competitive disadvantage. Evidence of this can be seen in the significant improvements that have been made during the first 160 days of his tenure - which include the closure of 4 hump yards and 3 intermodal terminals; a 1-day reduction in transcontinental intermodal service; and headcount reduction of 1,700 employees since the end of 2Q12. ■ Better Service = More Business & Higher Price: A better service product drives improved asset utilization, and ultimately lower costs. In turn, lower operating costs open up opportunities to compete on business that the company might not have otherwise been in a position to do so. This should contribute to solid pricing gains and revenue growth going forward. ■ Rapid Growth in Energy to Drive Positive Mix Shift: Given 2-3x growth in the relatively high RPU energy business in conjunction with the company’s plans to exit some high cost, low density (and relatively low-RPU) intermodal lanes, we expect CP experience a change in its business mix. This should contribute favorably to yields, and thus, top line growth and the O.R. ■ Raising Estimates: We are raising our FY13 and FY14 EPS estimates to $5.66 and $6.89 from $5.54 and $6.72. We are also introducing our FY15 and FY16 EPS forecasts of $8.08 and $9.42. Our 12-month target price rises to $107 from $95, on

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account of a higher EBIT growth rate on a 3-5 year view. Given that just 8% upside remains to our price target (following a 47% run in the stock YTD), we maintain our Neutral rating.

LatAm Capital Goods; How Bullish Can We Get?; Bruno Savaris; 05 December 2012

■ A Tire-Kicking Exercise; Views from an Industry Expert. Today, we hosted an investor meeting with an expert in the heavy vehicle industry in Brazil to discuss the recent developments taking place in the sector and to talk about the outlook for 2013. ■ From a Bearish Stance to a Bullish One. We recollect that about three months ago, during a meeting with him, the tone was overly cautious about the truck industry in Brazil. It was mostly due to (i) stricter credit availability, (ii) worsening economic growth prospects, and (iii) greater than expected Euro III inventory levels (62K Euro III truck units produced in 2011 but sold in 9M12, accounting for ~45% of total units sold in this period. This time around, the tone was more optimistic. ■ What Has Changed? The more optimistic stance is mostly supported by the attractive credit lines made available by the BNDES (PSI program with lending rates of 2.5% p.a.). Interesting to note is that the market in general isn’t in “buy mode”, i.e. the recovery seen so far is mainly supported by customers with better credit ratings, who can easily obtain credit approvals from commercial banks responsible for passing-through the BNDES funding. ■ What Caught Our Attention the Most? We note that on the back of that more optimistic scenario, which assumes 3% GDP growth in 2013 and an extension of the PSI program for one more year (essential for the industry), market players forecast truck sales of 136K and 150K units for 2012 and 2013, respectively. Such a bullish scenario not only entails a 10% recovery in demand but is also in line with our estimate of 151K truck units sold for 2013 under our base case. Putting that into perspective, the industry bull is our base case, so there could be some room for downward revisions. ■ What’s Next? In the short-term, the positive newsflow on the extension of the PSI program for one more year should continue to support the “earnings momentum” call in the sector. Today, the government announced that the PSI program will be extended at 3% p.a. throughout 1H13, increasing to 4% p.a. during 2H13. ■ Valuation in the Capital Goods Sector Is Ahead of Itself. We maintain our more cautious stance in the Brazilian Capital Goods Sector as current levels, mostly for Randon (RAPT4, Underperform, TP R$10/share), are pricing-in a steeper than expected recovery. On a relative basis, we would seek exposure to the sector through Marcopolo (POMO4) and Mahle Metal Leve (LEVE3) (both Neutral) due to their (i) less cyclical profile, and (ii) exposure to the export market (benefiting from a more depreciated BRL).

Canadian Pacific Railways; "Do What You Say You're Gonna Do;" A Taste of the New CP; Christopher J. Ceraso; 05 December 2012

■ Harrison Provides Glimpse into Op Turnaround Plan: During the first day of Canadian Pacific’s highly anticipated 2-day analyst meeting in NYC, new CEO and former CN veteran Hunter Harrison gave investors a preview of his turnaround plan

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- the cornerstone of which is taking the O.R. to the mid-60’s by 2016 (vs. our 78% est. in 2012). The key takeaways were as follows: ■ Possibility of a Sub-65 O.R.: CP expects to achieve an operating ratio in a range of 63% to 67% over the next 4 years. While admittedly leaving a good deal of latitude, Mr. Harrison indicated that he is optimistic that the O.R. could be lower than 65% by 2016, if the company generates annual revenue growth of 5% or higher. We note that the company provided top line CAGR expectations in a range of 4-7% (conservative in our view) ■ It’s a Cost Story…Initially: The path to the mid-60’s operating ratio will be driven by significant cost savings initiatives, including yard consolidation (resulting in ~$40- $50m in annual direct cost savings); siding extensions (improved train length/weight and reduced train starts) and a 4,500 reduction in headcount (which, in large part, will be accomplished by attrition). ■ The operational improvements to the CP network will create a virtuous cycle, whereby a faster network/transit time will lower costs (via better asset utilization and a reduction in labor/fuel expense), and in turn, improve customer service and the company’s competitive position in new and existing end markets. Harrison deflected questions on pricing, but did state that CP will not ‘buy’ business (i.e. cut price to gain share) Importantly, capex is expected to hold steady in a range of $1.0 to $1.1 billion - suggesting an improvement in CP’s capital efficiency. In fact, Mr. Harrison pointed out that the siding extension program will incorporate the use of obsolete/surplus sidings; whereby only labor costs will be capitalized (and not track and materials). ■ Share Repurchase on the Table: CP also left open the possibility for a future share repurchase program, as part of its goal to increase shareholder returns with improved profits. We suspect that this is likely a 2014+ event. ■ There is an “I” in Win: Quoting Michael Jordan (one of several sports references during the evening), Mr. Harrison believes that every organization must have one or two exceptional individual achievers, who can push CP to the next step (or, to win the game, if we are back to analogies). With that in mind, Harrison indicated that the new management team is largely in place; but left the door open for CP to hire a new COO ( a timeline was not provided). In particular, one that could be groomed as the next ‘take-charge’ leader of the company once Harrison eventually retires. We will refrain from speculating on who the most likely candidate would be. ■ Bottom Line: While we expect to receive significantly more detail behind the company’s turnaround plan during Wednesday’s presentations, our initial impressions are that investors will view the news favorably. While the printed target OR range is 63 to 67 (and not strictly 65), and revenue growth is seen at 4-7% (not 8%, as some investors had anticipated), we think the early evidence of swift and successful action, and Mr. Harrison’s infectious confidence, will leave investors expecting mid-point or better type of numbers by 2016. What’s more, Mr. Harrison said that the path to mid-60s would likely show quick progress early, before leveling off for a bit, then resuming a more linear up-trend in the later years of the 4-year program. This should keep investors engaged and will allow for longer-term expectations to remain optimistic over the early phase of the program.

L-3 Communications; Defense's FCF Yield Leader Hosts Analyst Day; Robert Spingarn; 04 December 2012 L-3 hosted its annual investor day earlier today, providing a detailed look at 2013 by segment, and updating the market on its performance in 2012.

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■ 2013 Guidance: L-3 reiterated the initial 2013 color from its Q3 call targeting a 3% decline in sales attributable to a ~$400M decline in war-exposed revenue (from ~$1.25B to ~$800M). Despite this, management expects 3% earnings growth on favorable margin mix and lower share count from buybacks. Note, the guidance excludes any Sequester impact and is largely based on the current 2013 budget. LLL said a full-scale Sequester would impact 2013 revenue by a further $500M with a ~30bps impact to margins. Management stated it would quickly cut overhead costs to hold the margin ~10%. It estimates that it could quickly remove ~half of $180M of planned capex under Sequester without affecting its operations. In 2013, L-3 has only one re-compete valued at >$100M, which is a $200M IT Enterprise contract at NSS, which could slip into 2014. ■ Segment Expectations: Management is expecting sales reductions in three of its four segments (ES, AM&M and NSS), but margin compression only in ES. CFO D’Ambrosio noted that revenue growth at C3ISR will be driven by $200M in growth in the base business, offset by $100M reduction in warexposed revenue and a $60M in ROVER work. ■ Cash Flow: FCF is expected to be $1,030M in 2013, from $1,045 in 2012, implying an increase in FCF per share from $10.79 in 2012 to $11.41 in 2013. A $500M buyback contributes ~$0.55 in the EPS guidance. The $500M buyback expectation is $350M lower than the $850M expected for 2012, but LLL can boost the level if no desirable M&A opportunities materialize. As per the above, we are revising our 2013/2014 estimates.

US Truck Orders – November; Just Passing By; Jamie Cook; 04 December 2012

■ November Orders Light: Preliminary Class 8 US truck orders for November came in at 20,200 units, towards the lower end of expectations in the low 20k’s. Orders were down 2% y/y and down 14% m/m following a stronger than expected October. Truckers continue to hesitate in making purchases as the uncertainty over the fiscal cliff continues to weigh on next year’s outlook. MD truck orders were largely in line at 13,900 units, up 9% y/y although down 28% m/m after a strong October performance. For December, we expect a modest sequential increase with orders in the range of 23k units as uncertainty weighs on typical seasonal strength. ■ Outlook Unchanged, 2013 Scenario Uncertain: For 2012, we expect ACT’s HD build outlook in the ~280-282k range, largely in line with the current 280k estimate. For 2013, we expect ~275k units, implying build down 1-2% y/y (although downside/upside scenarios could be in the range of +/- 15k units). Looking to Q1’13, the same short term issues are looming with Jan-Feb numbers impacted by pull- forward into December, driven by bonus depreciation and new MY2014 fleet truck introductions (Freightliner). In addition, customers may hold off until March when new engine models for Daimler and CMI are introduced which have much better fuel economy. While the industry generally uses Jan- Feb to drive additional production, dealer inventories are on the high side this year. On the bright side, certain pockets in the economy are showing improvement (res, auto, manufacturing) that could drive better fundamentals for trucks and upside to ACT’s HD outlook next year.

SPX; An interesting journey—but one that we prefer to watch from the sidelines, for now; Julian Mitchell; 04 December 2012 We reinstate coverage of SPW with a Neutral rating and $74 TP.

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■ Strategic optionality: Following the divestment of Service Solutions, SPW has substantial balance sheet optionality, and it could still sell a number of assets. However, we think that the probability of a large acquisition (which would likely be negative for the share price, given the issues with ClydeUnion) is high, and although further asset sales are likely, these will be dilutive, and will simply increase the risk that even larger M&A is undertaken. ■ Not such a smooth path to Flow: We set out the multi-stage path by which SPW could become a Flow focused company, which is management’s intention. While the end result will likely eventually benefit shareholders (as Flow assets tend to trade at a premium to SPW), it is not clear from our analysis whether the current share price represents a compelling entry point for shareholders to embark on this journey. We also review the prospects for SPW to purchase GDI or Invensys. ■ Estimates / valuation: SPW does not look expensive on SOTP approaches, but we think the valuation is unlikely to re-rate in the near term given: (i) downside risk to FY13 consensus EPS of $5.20—the top-line outlook in the Power & Energy part of the portfolio (46% of sales) will likely be subdued given weak utility spending on coal-fired power generation (the Thermal business), as well as more competition in US T&D vs the prior cycle, while our incremental margin forecast of 28% for Flow in 2013 should capture much of the potential for a recovery in profitability in ClydeUnion; (ii) M&A risk. Relative to its history, SPW is trading at a slight discount on EV/EBITDA.

Fluor; Ma'ad-Men; Jamie Cook; 03 December 2012

■ FLR Wins Ma’aden PMC contract: FLR announced earlier today that it had been awarded a contract for a new Ma’aden phosphate project located in Saudi Arabia. The total value of the award is about $200M and will be booked into Q4. The scope of work will include overall PMC services for developing the Umm Wu’al greenfield phosphate project, supervisory and managing of the feasibility study including the basic design packages by the FEED contractor, managing the development, strategy and tendering of the EPC packages, and supervision of all EPC contractors. The completed Umm Wu’al project will have a capacity of 100,000 MTPA of phosphoric acid, 90,000 MTPA of sodium tripoly phosphate, 250,000 MTPA of dicalum phosphate/monocalcium phosphate, and 280,000,000 MTPA of phosphate and compound fertilizers. ■ Award Activity Still Robust: Recall that JEC was awarded the FEED contract for Ma’aden back in May. With the FEED and PMC contracts out, we expect the EPC work to be potentially up for bid next year. JEC would likely not be in the running though, given the contract is lump-sum turnkey in nature, and FLR is overseeing the EPC contractors which would also make them an unlikely candidate. We expect other potential EPC contenders to include KBR, SNC-Lavalin and WorleyParsons. Other Ma’aden projects have been awarded to Korean companies as well, however, execution problems could potentially be an issue. As this project continues to move ahead, we remain encouraged by the projects in the pipeline in Saudi Arabia and the Middle East, in general, as further major award announcements are likely to continue into next year.

EMEA Research Smiths Group; Cautious on macro. Confident in own abilities; Andre Kukhnin; 07 December 2012

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■ Reiterate Outperform. We reiterate our positive stance on Smiths Group after a very reassuring meeting with the company CEO that highlighted that despite management’s continuing cautious stance on the macro outlook, the company is on track to deliver further momentum in FY2013. ■ Key takeaways supporting our investment case. Our investment case on Smiths Group has been based primarily on the company’s ability to deliver EBIT and EPS growth driven by internal factors such as cost-cutting and investment in new products and presence. Our key takeaways supporting the investment case are the following. 1) Detection continues to perform strongly driven by the new product introductions with interesting potential should i) the XCT machine gain US standard approval during 2013, ii) TSA contract placing disruption end, and iii) aftermarket sales grow further. 2) Management changes at Interconnect and John Crane demonstrate strengthening of ‘the bench’ and should result in further focus on growth. 3) Potential changes in UK accounting for pension deficits (using longer historic average yields as discount rates – in response to current abnormally low yields) may allow the company to re-enact the more progressive portfolio management strategy over the next 12 months. 4) Flex Tek should benefit from the recovery in US housing demand and generate substantial operational gearing on growth. ■ Catalysts. Results on 20 Mar 2013. Updates on UK pension accounting. ■ Valuation. On our 2013E calendarised estimates, Smiths is trading on a P/E of 11.3x and EV/EBIT of 9.5x, on average a c5% discount to the UK Industrials universe. The stock is trading on 2013E calendarised EV/Sales of 1.8x, which we find attractive in light of our 19% margin forecast.

Schindler-Holding AG; Positive meeting. Investment case intact; Andre Kukhnin; 05 December 2012

■ We reiterate our positive stance on Schindler post a positive meeting with the company last week highlighting above-market rate growth potential in China, new product momentum globally, execution on cost saving with scope for more and scope for balance sheet use. We continue to see Schindler as one of the core ‘buy and hold’ structural growth ideas in the sector. Outperform, TP CHF 140. ■ Key takeaways from our meeting. 1) China – The company appeared confident on being able to outgrow the market in 2013 given the new product momentum and a substantial footprint expansion (900 people added in Asia). Also, Schindler is looking for further JV / acquisitions opportunities in China. 2) New products rollout is on plan (3600 for China, 3100 for India, 5500 Global). The initial revenue impact is expected in 2013 while a meaningful margin contribution is not expected until later on. 3) LEAP cost savings programme is performing on plan (to deliver CHF 50m saving in 2012 and further CHF 50m in 2013). The company sees potential for further savings beyond the current programme although is reluctant to quantify given the current initiative is only half-way through. 4) The 9.5% buyback programme to start in 2013 and should be seen as a put option (downside protection) as the company would use any share price weakness to buy back shares. ■ Valuation: Schindler is trading on a 2013E P/E of 18.9x (net cash c15% of market capitalisation) and EV/EBIT of 11.1x representing a 15% discount to Kone on average. The stock is trading on 2013E EV/Sales of 1.43x vs the company margin target of 14%. ■ Catalysts: 2012 Q4 results on 19 Feb 2013. Potential further acquisitions.

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CS Pan-Euro Capital Goods; Notes from the road - Swiss Industrials Tour; Andre Kukhnin; 05 December 2012 Last week we hosted our Swiss Industrials Tour, meeting the management teams of nine companies at the CS Swiss SMID Conference (Sulzer, Kaba, Sika, OC Oerlikon, Rieter, Georg Fischer and Bucher) and at the companies’ HQs (ABB and Schindler). Please see inside for detailed notes from meetings. Our key takeaways: ■ Schindler (OP, TP CHF 140) – Focus on China, New products on plan, New buyback in 2013-15. Schindler appeared confident on being able to outgrow the market in China with 900 people added in Asia recently. The company also targets further JV / acquisitions in China. New products rollout is on plan with initial revenue impact expected in 2013 (margin impact after 2013). The new 9.5% buyback programme is due to start in 2013. ■ ABB (not covered) – US transformer pricing improving, Automation in China, Impressive semiconductor technology. US transformer pricing pressure is moderating post successful anti-dumping legislation, and margins on new orders are also being supported by cost reductions. The company sees great interest in industrial automation in China, especially in robots. We were impressed with the depth and complexity of high voltage, high frequency semiconductor technology during our site visit in Lenzburg (40% of facility production is for ABB internal use while 60% is for external customers including Siemens). ■ Company updates. KABA (N) – no significant declines in France; southern Europe has been down significantly already; Germany slightly slowed; Switzerland remains solid. OC OERLIKON (OP) – In Europe, weak south, strong Germany; very strong US; India and Brazil have been weak because of political uncertainty and bureaucracy respectively. SIKA (N) – China saw a pick-up in Sept / Oct back to double-digit growth and is to continue to show strong growth (heavily under- penetrated market). SULZER (N) – oil & gas has been the sweet spot (US transportation and Russia downstream especially) and is likely to continue in 2013. ■ Other interesting snippets. We were impressed with Sika’s pricing power (raising prices in Spain recently) and with their mobile factories solution. We also found interesting that China market penetration is only 30% for Sika (vs 90%+ in developed world). We thought it interesting that China stipulates modernisation of fibre spinning capacity in its 12th Five-Year plan (Rieter). KABA seems to have a similar mobile-phone door-opening solution to Assa Abloy’s and is present in the electro-mechanical segment but appears much less upbeat about these markets’ prospects

Swiss Midcap Conference; Conference Key Takeaways; Patrick Laager; 05 December 2012 Takeaway message is a net positive – Growth should improve but is not expected to boom ■ Last week, we hosted 26 companies and around 120 investors at our annual Swiss Midcap Conference in Zurich. Our overall takeaway message from the conference is net positive with Bucher (Neutral; TP SFr170), Georg Fischer (Outperform; TP SFr460), Givaudan (Neutral; TP SFr900), Oerlikon (Outperform; TP SFr12.4), Sika (Neutral; TP SFr1,980) in particular adopting an upbeat tone. Short-cycle

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businesses stressed low visibility, but the general expectation is that global economic growth is likely to improve if not boom in 2013. China and Europe are recovering gradually, and North America is holding up well, allowing an uptick in global trade. Risk appetite should improve in 2013E.

OC Oerlikon Corp AG; Moving into phase two of its transformation; Patrick Laager; 04 December 2012

■ Great deal: Oerlikon has moved into the second phase of its transformation after three years of change. The company has agreed with the Chinese Jinsheng Group to demerge its Natural Fibers and Textile Components Business Units from its Textile division. The disposed units operated under the brand names Schlafhorst and Saurer. Schlafhorst was acquired by Saurer back in 1991, Saurer was acquired by Oerlikon in 2007. ■ What do we know about the transaction? The business being sold generated sales of c.SFr1.1bn in 2011, or 54% of Textile sales, with 3,800 FTE according to Oerlikon, achieving estimated RoS of 5-7%. Parties value the deal at SFr650m EV. The deal is expected to close in 3Q13. Jinsheng Group operates in four businesses (machine tools, regenerated cotton fibers, real estate, and testing technologies) employing 5,000 FTE with sales of c.SFr1bn. The Group will take over all employees of the acquired units. ■ Does it look like a good deal? We view the transaction as an excellent strategic move to take out further complexity and reduce fluctuations of FCF generation. On 2011 numbers, the deal value implies c.0.6x EV/sales. Using 6% ROS, the deal equates to 9.8x EV/EBIT (or 8.4x on 7% ROS). On estimated EBITDA figures, the transaction is valued at c.7x EV/EBITDA. Oerlikon is getting a good price and is cashing in estimated proceeds of SFr450-500m. In our recent report dated 13 September “Entering the ultimate transformation phase” we estimated gross proceeds of SFr400- 500m.

Asia Research Machinery sector; Keyword for 2013: normalization; looking for the timing of shift from Makita, Kubota to construction names; Shinji Kuroda; 07 December 2012 ■ Action: In 2012, we saw a polarization in infrastructure stocks—with investors buying Kubota and Makita while selling Komatsu, Hitachi Construction Machinery (HCM) and Daikin Industries—driven by concern over: (1) abnormally low demand in China, (2) relentless yen strengthening (not only versus the dollar and euro, but also against emerging-market currencies), (3) the growing emergence of local Chinese manufacturers (concerns of which proved somewhat overblown), and (4) an excessive shift in investment funds from “hard” (natural resources) to “soft” commodities (grains). However, with most negatives now having run their course, we expect 2013 to bring a return to normal in the infrastructure subsector. ■ Already, Daikin’s shares have started reflecting a correction in the polarization of subsector shares amid expectations of a shift in market focus from China plays to stocks with exposure to North America’s housing market. We expect the negative events that played out in 2012 to reverse course in 2013, setting the stage for a normalization of the operating environment, which in turn should alter stock selection. We intend to gauge catalysts likely to prompt a shift in investment from Makita (6586) and Kubota (6326)—two stocks that turned in strong performances in

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2012—to Komatsu (6301), HCM (6305), and Daikin (6367), as well as the timing of such an event. ■ Our stock picks in order: Komatsu, HCM, Daikin, Ebara, Kubota, Makita Komatsu (6301): Maintain NEUTRAL, TP ¥1,900 (previously ¥1,850) Hitachi Construction Machinery (6305): Maintain NEUTRAL, TP ¥1,450 (¥1,300) Daikin Industries (6367): Maintain NEUTRAL, TP ¥2,600 (¥2,200) Ebara (6361): Maintain NEUTRAL, TP ¥350 (¥290) Kubota (6362): Maintain NEUTRAL, TP ¥950 (¥800) Makita (6586): Maintain UNDERPERFORM, TP ¥3,100 (¥2,750)

Kubota; Maintain NEUTRAL; seek to time investment shift to construction machinery stocks; Shinji Kuroda; 07 December 2012 ■ Action: We revise our estimates for Kubota, increment our valuation basis year from FY3/13 to FY3/14, and raise our target price from ¥800 to ¥950 (potential return 7.7%). We maintain our NEUTRAL rating. ■ Investment case: The rally in Kubota shares is attributable to: (1) expectations of a demand recovery in North America where Kubota generates roughly 50% of its OP, making it a housing-related play in that market, (2) shift in funds away from Komatsu stock, and (3) prospects of sustained profit growth in FY3/14 owing to a ¥6.0bn reduction in one-off expenses. That said, there are also concerns that FY3/14 earnings growth could be lower-than-expected due to higher fixed costs and other factors. ■ We raise our FY3/13 OP forecast from ¥108.0bn to ¥109.0bn (guidance ¥105.0bn; IFIS estimate ¥112.4bn), but nudge down our FY3/14 forecast from ¥127.0bn to ¥126.0bn (IFIS ¥130.5bn). Our forecasts now reflect an increase in upfront fixed costs. ■ Catalysts/risks AEM data on monthly sales in North America (40 HP and lower) should continue trending upwards. We expect 3Q results (due out mid-February 2013) to leave a neutral impression, rising 7% YoY to ¥29.6bn. Upside risks include yen weakening below our assumption of ¥80 against the dollar (¥1/$ move impacts annual OP by ¥1.4bn), and a sustained recovery in the Japanese market. A downturn in the North American housing market and a slump in Thai rice prices pose risks ■ Valuation: We raise our TP from ¥800 to ¥950, based on fair-value P/B of 1.66x (10.90% forecast ROE ÷ 6.55% WACC) applied to end-FY3/14E BPS of ¥570. Implied P/E is 15.3x. We update our risk-free rate assumption from 0.8% to 0.7%, but continue to employ a risk premium of 7.0%. Kubota appears increasingly overvalued given its US counterpart Deere trades at an FY10/13E P/E of 9.9x, equating to an EV/EBITDA of 5.3x.

Daikin Industries; A stock to watch in 2013; Shinji Kuroda; 07 December 2012 ■ Action: We raise our target price for Daikin from ¥2,200 to ¥2,600 (potential return –2.4%) after raising our forecasts and switching the base year from FY3/13 to FY3/14, when the Goodman acquisition should make a contribution. We reiterate our NEUTRAL rating.

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■ Investment case: As we noted in our 18 September report, Daikin is a stock to watch in FY3/14, and our view remains that owing to the Goodman acquisition, the stock market view of Daikin is shifting positively away from seeing it as a China- related to a North America-related stock. The share price has risen to narrow the share price gap with US competitor Lennox (Figure 6) since gaining recognition as a North American housing-related stock. ■ We lower our FY3/13 OP estimate from ¥90bn to ¥85bn (guidance ¥87bn, IFIS ¥89.2bn) and lower our FY3/14 forecast from ¥115bn to ¥110bn (IFIS ¥102.9bn). In part due to a deteriorating external environment, we think it likely that achieving the new record high OP of ¥130bn called for FY3/14 in the company's medium-term plan will be delayed by one year. ■ Catalysts/risks: We look for 3Q OP to rise 12% YoY to ¥13.8bn, but this represents lackluster progress. Upside risks include an early recovery in the Chinese air-conditioner market and the conclusion of sales of Panasonic's shares in the company. Downside risks include that Goodman's contribution to earnings and synergy effects fall short of expectations (the company is looking for a boost of ¥4.1bn in FY3/14 and ¥8.8bn in FY3/15). ■ Valuation: We raise our target price from ¥2,200 to ¥2,600, applying our FY3/14E BPS of ¥1,861 to our forecast P/B estimated using a fair-value P/B ratio (FY3/13E ROE of 9.86% ÷ WACC of 7.05%) of 1.40x. We revise our riskfree rate from 0.8% to 0.7%, but retain a risk premium of 7.0%.

Ebara; Maintain NEUTRAL rating, continue wait-andsee Stance; Shinji Kuroda; 07 December 2012 ■ Action: We revise our estimates, switch the base year for our valuation model from FY3/13 to FY3/14, and increase our target price for Ebara from ¥290 to ¥350 (5.1% potential upside). We maintain our NEUTRAL rating. ■ Investment case: JGC (1963) and Chiyoda (6366) shares continue to rise amid forecasts for long-term growth in demand for LNG and shale gas. While Ebara’s status as a supplier of parts (e.g., compressors) for such plants has some market participants believing that it also deserves a look, we see 1–3Q FY3/13 OP amounting to just ¥4bn, only around 18% of Ebara’s full-year guidance. On this basis Ebara’s current share price appears difficult to justify from an earnings perspective. ■ We make no change to our forecast calling for FY3/13 OP of ¥20bn (guidance ¥22.5bn, as is the IFIS consensus), and FY3/14 OP of ¥23bn (IFIS ¥27bn). We slightly raise our FY3/15 estimate from ¥24bn to ¥25bn, though, in anticipation of successful bids relating to electric power and other plants. ■ Catalysts/risks: In 2H FY3/13 we anticipate engineering, procurement, and construction (EPC) orders in Japan for garbage incinerators, and are also monitoring monthly orders for precision machinery. Upside risks include events establishing stronger earnings visibility, while downside risks include costs of up to ¥10bn for soil remediation at the Haneda plant after its sale. ■ Valuation: We lift our TP from ¥290 to ¥350, derived by applying a fair-value P/B of 0.91x (forecast ROE of 6.34% ÷ 6.95% WACC) to end-FY3/14E BPS of ¥384. On this occasion, we switch the base year for our valuation model from FY3/13 to FY3/14, and lower our risk-free rate assumption from 0.8% to 0.7%, leaving our risk premium estimate at 7.0%.

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Makita; Maintain UNDERPERFORM; profits firm but shares overvalued; Shinji Kuroda; 07 December 2012 ■ Action: We lower our forecasts for Makita but raise our target price from ¥2,750 to ¥3,100 (potential return –11.2%) on a shift in base year for our valuation model from FY3/13 to FY3/14. We maintain our UNDERPERFORM rating. ■ Investment case: The yen’s sharper-than-expected decline against the euro has buoyed the share prices of Makita, Daikin Industries, and other Europerelated names. However, the yen is also down more than expected against the Chinese yuan (with every ¥1 decline depressing full-year OP by ¥4bn). While we were a little too quick in downgrading Makita, we continue to recommend taking profits following an expected increase in FY3/13 profit guidance at the 3Q announcement and ahead of what we expect will be conservative guidance for FY3/14. ■ We lower our FY3/13 OP forecast from ¥46.0bn to ¥45.0bn (guidance ¥41.5bn, IFIS consensus ¥43.6bn), now premised on 2H exchange rates of ¥106/€ (previously ¥103), ¥81/$ (¥79), and ¥13.3/RMB (¥12.6). We lower our FY3/14 OP forecast from ¥51.2bn to ¥48.7bn (IFIS ¥47.6bn) premised on ¥103/€ , ¥80/$, and ¥13.0/RMB. The downward revisions come mainly on the yen’s decline against the yuan. ■ Catalysts/risks: Makita’s 2H forex assumptions are ¥98/€ , ¥77/$, and ¥12.2/RMB, and we therefore continue to expect FY3/13 profit guidance to be revised up as soon as the 3Q announcement. Risks include further yen depreciation versus the euro (we assume ¥105/€ ) and a rise in the Brazilian real and other emerging-market currencies. ■ Valuation: We base our ¥3,100 TP on a fair-value P/B of 1.19x (projected ROE of 9.58%÷WACC of 8.05%) applied to our end-FY3/14 BPS forecast of ¥2,606. We lower our assumed risk-free rate from 0.8% to 0.7% and continue to assume a 7.0% risk premium.

Komatsu; Reiterating NEUTRAL; concerns should gradually dissipate; Shinji Kuroda; 07 December 2012 ■ Action: We revise our earnings estimates and slightly increase our TP for Komatsu from ¥1,850 to ¥1,900 (potential return 1.1%) as we shift the base year for our calculations to FY3/14. We reiterate our NEUTRAL rating. ■ Investment case: Applying our 2013 sector keyword “normalization” to Komatsu, we see potential for: (1) a shakeout in the local construction machinery sector and recovery of the hydraulic shovel market in China; (2) revaluations for hard commodities (LNG price rises pushing up coal prices); and (3) a turn to yen depreciation. We think concerns affecting the stock will gradually dissipate. That said, it is difficult to imagine Komatsu’s shares unilaterally making gains while those of Caterpillar (US) and Sany (China) remain mired. We accordingly reiterate our NEUTRAL rating. ■ We revise our exchange rate assumptions for 3Q FY3/13 and beyond to ¥80/$, ¥105/€ (¥103/€ previously), and ¥13.0/RMB (¥12.6/RMB). We keep our FY3/13 OP estimate at ¥243.0bn (guidance ¥262.0bn; IFIS consensus ¥241.8bn), but slightly hike our FY3/14 estimate from ¥254.0bn to ¥259.0bn (IFIS ¥250.1bn). ■ Catalysts/risks: There is a risk that FY3/13 guidance will be reduced at 3Q results in late January. Upside risks include an early recovery in the Chinese construction machinery market (we estimate a YoY increase in September 2013), while

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downside risks include the emergence of an environment not conducive to product price hikes (we estimate increases of 1.2% in FY3/14 and 0.9% in FY3/15). ■ Valuation: Our ¥1,900 TP is based on our end-FY3/14 BPS estimate of ¥1,119 and a P/B of 1.71x, using a fair value multiple derived by dividing our 14.82% ROE estimate by a WACC of 8.69%. We also change the risk-free rate from 0.8% to 0.7% but keep a risk premium of 7.0%.

Hitachi Construction Machinery; Maintain NEUTRAL; still in wait-and-see mode; Shinji Kuroda; 07 December 2012 ■ Action: We fine-tune our forecasts for Hitachi Construction Machinery (HCM) and raise our TP from ¥1,300 to ¥1,450 (potential return –2.7%) as we increment the base year for our target price from FY3/13 to FY3/14. We reiterate our NEUTRAL stance. ■ Investment case: As with Komatsu, negative news appears fully discounted, and HCM shares are turning around aided by a weakening yen. That said, we can discern no earnings drivers on the horizon for FY3/14. With shares of Caterpillar and China’s Sany Heavy Industry continuing to struggle, there is no reason to expect Komatsu and HCM alone to rise. ■ We change our forex assumptions for 3Q onward to ¥80/$1 (previously ¥79/$1), ¥105/€ 1 (¥103/€ 1), and ¥13.0/RMB1 (¥12.6/RMB1), and make modest upward adjustments to our OP forecasts, from ¥54bn to ¥55bn in FY3/13 (guidance ¥56bn, IFIS consensus ¥52.9bn) and from ¥52bn to flat YoY growth of ¥55bn (IFIS ¥53.5bn) in FY3/14. ■ Catalysts/risks: We expect HCM’s monthly earnings update in January to show a temporary double-digit jump in OP of 21% YoY to ¥13.9bn for 3Q (Oct–Dec). We will continue to monitor hydraulic excavator sales closely in China. The main upside risk is an earlier-than-expected recovery in the Chinese construction equipment market, reestablishing the Golden Cycle. Downside risks include prolonged weakness in Chinese construction equipment demand and a further decline in resource prices. ■ Valuation: We raise our TP from ¥1,300 to ¥1,450, reflecting a fair value P/B of 0.88x (forecast ROE of 7.16% ÷ 8.14% WACC) applied to our FY3/14 BPS estimate of ¥1,648. We change our risk-free rate assumption from 0.8% to 0.7%, and retain our risk premium of 7.0%.

Bajaj Auto Limited; Domestic volumes to be a near-term trigger; structural story on exports intact; Jatin Chawla; 06 December 2012 ■ According to Bajaj’s management, it appears that demand in the domestic 2W market has bottomed. Bajaj’s festival season retails grew ~6% YoY and it expects double-digit growth in FY14. ■ In spite of Honda’s aggressiveness, Bajaj has credibly gained market share in the executive segment (65% of market) with the success of new Discover launches. It has also managed to hold on to its share in the premium segment. ■ Management remains sanguine on margins with softening in commodities this quarter. It also sees pricing discipline sustaining in the industry as any attempts at price-cuts by a player would only destroy the brand with consumers not getting swayed in their purchase decisions on account of small price differences.

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■ Exports have been sluggish this year on account of decline in Sri- Lanka. For Africa, management is confident about a sustained 15- 20% growth. Management believes the big delta in exports could come from the Kawasaki tie-up where it is already exploring countries beyond Indonesia; volumes should start kicking in from 2H FY14. Maintain Bajaj Auto as our top pick in the autos space.

Anhui Conch Cement Co. Ltd.; 2013 outlook: Better protected margin in oversupplied market; Trina Chen; 06 December 2012 ■ We revise up Conch’s earnings by 12% for 2012E and 14% for 2013E, to reflect better protected margins and the stable incremental S/D outlook of its key operating region in YZD. We believe the share price properly reflects the stable margin outlook. We upgrade the stock to NEUTRAL from Underperform, with a revised TP of HK$24.3 (from HK$16.5). ■ Specifically for Conch, we expect S/D to maintain incrementally stable for YZD (50% of sales) and Shaanxi, but to deteriorate in southern (20% of sales) and part of the southwest. ■ We expect Conch to deliver a unit gross profit of Rmb75/t for 2013E, versus Rmb71/t for 2012E, driven by price-protection efforts in YZD. We believe the supply discipline would work better in stable market, yet the oversupply of the broader market would cap the upside in margins, and increase the QoQ volatility. ■ Our revised target price is based on 8x EV/EBITDA on 2013E versus the peer range of 5.6-8.0x EV/EBITDA, implied EV/output of Rmb570/t.

China Basic Materials Sector; 2013 outlook: the new "norm"; Trina Chen; 06 December 2012 ■ The start of the new “norm”: If 2012 has been a year of painful transition for China basic materials, 2013E would be the start of a new “norm”. To an extent, 2013E probably would end better than 2012E, as destocking pressure eases on demand, producers are better prepared for slower growth, and price movements of basic materials would also not be as dramatic as in 2012. Yet the excess supply will stay with us, and it would not be a market where every producer makes money, in our view. This is the time when quality outperforms beta, a theme that may actually work finally. ■ Risks on demand and supply: We believe risks to the “slow-but-stable” demand outlook for 2013E will be: (1) upside risk in construction demand, (2) downside risk in manufacturing sectors, and (3) transport and rail FAI may have overshot in the near term. In the same context, we believe the excess capacity for the sector has become more of a structural issue, than just a cyclical set-back. In 2013E, we estimate the incremental S/D to (1) deteriorate for cement, Al, Cu and rare earths, (2) remain mostly unchanged for steel and coking coal, and (3) improve for domestic thermal coal, and tungsten. ■ Stock calls: In addition to our ratings and target price changes in the basic materials sector (Figure 11), we also initiate coverage on West China Cement (2233.HK, OUTPERFORM, TP HK$1.75). Our preferred names in 2013E are Shenhua, Chinacoal, Jiangxi Cu and Conch. Our least preferred stocks are Yanzhou, Chalco, and CR Cement. In the small caps, we like WCC due to the upside risk in both margin and multiples from a low base. We believe Chinacoal has

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the best risk/reward profile in terms of exposure to the upside risk in Chinese thermal coal prices.

Korea Construction Sector; Key takeaways from recent meetings with various property experts; Minseok Sinn; 05 December 2012 ■ We recently met various property experts to share their insights on the domestic housing market outlook. ■ None of the experts were bullish on the near-term outlook. On the flip side, none of them were seriously worried about a long-term recession, expecting limited additional downside risk in the price. ■ Meanwhile, the key positive finding from the meetings was that the current high household debt may not be that serious an issue (unlike the general concerns). Actually there was no new major negative finding, besides what we have already known. ■ Overall, the experts’ views were mostly in line with our thoughts. Whereas we do not expect a quick turnaround in the market, we continue to anticipate the significant narrowing of the opportunity cost spread between purchase and rents and notable improvement in affordability in recent years to eventually trigger an improvement in the domestic housing market by early 2014, unless the domestic economy sees a long-term recession.

Keyence; Maintain NEUTRAL; core holding for uncertain times; Shinji Kuroda; 05 December 2012 ■ Action: We maintain our forecasts for Keyence but raise our target price from ¥21,300 to ¥22,800 on a shift in our base year from FY3/13 to FY3/14. We maintain a NEUTRAL rating. ■ Investment case: Keyence has historically been a defensive play and should therefore be underperforming in the current bull market. However, the company continues to generate record profits and thus appears to be attracting investment money. The overseas operation is seeing double-digit sales growth, and market share and margins are also rising. We continue to regard Keyence as the world’s strongest factory automation (FA) company, capable of cultivating its own markets, and see the stock as a core holding amid the current macro uncertainty. ■ Catalysts/risks: Data reported by the Nippon Electric Control Equipment Industries Association (NECA) shows industry shipment value rebounding to +3% YoY in September. With Keyence meanwhile also gaining market share, we continue to keep close watch on the pace of recovery in the company’s own shipment value. Upside risks include a turn to a bear market that could see the shares outperform. Downside risks include a rise in costs accompanying accelerated upgrading of overseas factories. ■ Valuation: We base our ¥22,800 TP on a fair-value P/B of 1.79x (projected ROE of 9.16% ÷ WACC of 5.11%) applied to our end-FY3/14 BPS forecast of ¥12,745. We lower our assumed risk-free rate from 0.8% to 0.7% and continue to assume a 7.0% risk premium.

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Machinery sector (Factory automation); Keyword for 2013: normalization; reiterate OUTPERFORM on Yaskawa Electric, THK; Shinji Kuroda; 05 December 2012 ■ Action: Of the five FA stocks in our coverage, four (other than Keyence) lowered full-year guidance when reporting 2Q results, as in 2012 the FA subsector was hit by: (1) sharply lower demand in China; (2) a reduction in high-tech capex, which has yet to recover; (3) higher costs for rare earth and other raw materials; and (4) output cuts aimed at reducing inventories. ■ In 2013, however, we think these conditions will give way to a more “normal” operating environment. It appears that SMC, Yaskawa Electric, and THK are all poised to see China orders bottom and turn upward. We anticipate a rebound in Chinese demand followed by a recovery in high-tech capex (already, Yaskawa Electric's November orders point to an upturn in demand from chip-mounter makers). Our forecasts for all five companies see earnings hitting bottom in 3Q before recovering modestly. As we also project a decline in rare earth costs, we expect operating profit growth to reach the double digits around 2Q FY3/14. ■ In previous reports we identified downside risk in the shares of SMC, Keyence, and Fanuc. In retrospect, it seems we did not adequately discount what we perrceive as a shift in investor money from consumer electronics and other sectors into the aforementioned three stocks, all of which are set to achieve record-high profits in FY3/14. ■ Our stock picks in order: Yaskawa Electric, THK, Keyence, SMC, Nabtesco Yaskawa Electric (6506): Maintain OUTPERFORM, TP ¥800 (previously ¥630) THK (6481): Maintain OUTPERFORM, TP ¥1,650 (previously ¥1,550) Keyence (6861): Maintain NEUTRAL, TP ¥22,800 (previously ¥21,300) SMC (6273): Maintain NEUTRAL, TP ¥13,700 (previously ¥11,500) Nabtesco (6268): Maintain NEUTRAL, TP ¥1,600 (previously ¥1,400)

Nabtesco Corporation; Recovery expectations appear priced in; maintain NEUTRAL; Shinji Kuroda; 05 December 2012 ■ Action: We revise our estimates for Nabtesco, move the benchmark year for calculating our target price from FY3/13 to FY3/14, and raise our target price from ¥1,400 to ¥1,600. However, the shares already appear to have recovery expectations fully priced in. We maintain our NEUTRAL rating. ■ Investment case: Factors such as the restart of railway investment in China, expectations for a recovery in reduction gears used in robots, and demand recovery for hydraulic equipment used in construction machinery already appear priced into the shares. ■ We lower our OP forecast from ¥19.0bn to ¥16.2bn (guidance ¥17.0bn; IFIS estimate ¥17.0bn) for FY3/13, and from ¥22.7bn to ¥20.0bn (IFIS estimate ¥20.0bn) for FY3/14. The forecast reduction is mainly due to sluggish demand for reduction gears used in robots and hydraulic equipment used in construction machinery. ■ Catalysts/risks: Monthly orders for railway equipment, including those from China, turned positive YoY from August. We see the next potential catalyst as a YoY upturn in monthly orders for reduction gears used in robots (around Jan 2013) followed by one for hydraulic equipment used in construction machinery (around Jul 2013). Upside risks include a fasterthan- expected demand recovery in hydraulic equipment for construction machinery in China, and progress in inventory correction

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at robot manufacturers. Downside risks include a prolonged slump in Chinese hydraulic equipment demand. ■ Valuation: We raise our TP from ¥1,400 to ¥1,600, based on fair-value P/B of 1.80x (13.4% forecast ROE ÷ 7.41% WACC) applied to end-FY3/14E BPS of ¥889. While lowering our risk-free rate assumption from 0.8% to 0.7%, we continue to employ a risk premium of 7.0%.

THK; Maintain OUTPERFORM; poised for steady share price gains through spring 2013; Shinji Kuroda; 05 December 2012 ■ Action: We lower our forecasts for THK, but raise our target price from ¥1,550 to ¥1,650 (potential return 20%) on a shift in our base year from FY3/13 to FY3/14, when profit should normalize. We maintain our OUTPERFORM rating, as we expect a rebound in monthly orders to drive share price gains through spring 2013. ■ Investment case: THK’s shares tend to bottom out in early autumn and then rise until the start of spring. Monthly orders also seem to have hit a floor around October. We expect the share price to remain on an upward trajectory through spring 2013, supported by a recovery in monthly orders. ■ We expect domestic monthly orders to average ¥5.7bn in Oct–Dec 2012, around ¥6.1bn in Jan–Mar 2013, ¥7.3bn in Apr–Jun, and ¥7.0bn in Jul–Sep. Factoring in an upturn in orders, we lower our FY3/13 OP forecast from ¥15.4bn to ¥9.3bn (guidance ¥9.0bn, IFIS consensus ¥12.3bn) and our FY3/14 forecast from ¥19bn to ¥17bn (IFIS ¥16bn). ■ Catalysts/risks: Order data for November (due out on 7 December) and December (11 January) could show domestic and Chinese monthly orders bottoming out and starting to rise. Risks include a prolonged slump in hightech capex, which generates around 40% of sales, and weak machine tool orders undermining THK’s earnings recovery more than expected. ■ Valuation: We base our ¥1,650 TP on a fair-value P/B of 1.16x (projected ROE of 6.37% ÷ divided by WACC of 5.50%) applied to our end-FY3/14 BPS forecast of ¥1,427. We lower our assumed risk-free rate from 0.8% to 0.7% and continue to assume a 7.0% risk premium.

SMC; Maintain NEUTRAL; profit rebound already priced in; Shinji Kuroda; 05 December 2012 ■ Action: We revise our forecasts for SMC and raise our TP from ¥11,500 to ¥13,700, now based on estimates for FY3/14 instead of FY3/13. We maintain our NEUTRAL rating. ■ Investment case: Earlier we had been concerned about downside shareprice risk for SMC as we also were for Keyence, but the shares have in fact been rising. We attribute this to (1) a downward revision to full-year earnings with 2Q results that exhausted the bad news; (2) growing expectations for a recovery in Chinese demand, and (3) our observation of capital flows toward the world’s leading FA names, including Keyence, Fanuc, and SMC (this last factor being a phenomenon we had particularly overlooked). We regard SMC as one of the world’s strongest FA companies and recommend it as a longer-term holding. ■ We lower our FY3/13 OP forecast from ¥85.0bn to ¥82.0bn (guidance ¥80bn, IFIS consensus ¥80.8bn) while bumping up our FY3/14 estimate from ¥94.0bn to

i-Spy 31 10 December 2012

¥94.3bn (IFIS ¥88.7bn). We expect FY3/14 profits to benefit from a demand rebound and the drop-out of FY3/13’s production cuts. ■ Catalysts/risks: We think a recovery in monthly orders from China could be followed by one for tech orders in Japan and the rest of Asia. Upside risks include a rapid improvement in profit margins accompanying production reforms. Downside risks include a prolonged slump in tech demand and a collapse of our scenario for a recovery in Chinese demand. ■ Valuation: We base our ¥13,700 TP on a fair-value P/B of 1.42x (projected ROE of 10.04% ÷ WACC of 7.07%) applied to our end-FY3/14 BPS forecast of ¥9,669. We lower our assumed risk-free rate from 0.8% to 0.7% and continue to assume a 7.0% risk premium.

Yaskawa Electric Corporation; Maintain OUTPERFORM; surging monthly orders, strong momentum in profit rebound noteworthy; Shinji Kuroda; 05 December 2012 ■ Action: We reiterate our forecasts for Yaskawa, move the benchmark year for our target price from FY3/13 to FY3/14 when we expect profits to normalize, and raise our target price from ¥630 to ¥800 (potential upside 19.2%). We maintain our OUTPERFORM rating. ■ Investment case: Ahead of 2013, we expect Yaskawa’s earnings to be driven by (1) order recovery in servomotors for high-tech equipment, which account for 40% of sales, (2) inverters for Chinese infrastructure investment, (3) robots, particularly for the auto sector, and (4) gains from lower rare earth prices (we estimate approximate ¥2bn YoY gain in 1H FY3/14). Meanwhile, we see profit growth at rival Fanuc (6954, NEUTRAL) as likely to be weighed down by a slump in demand for NC equipment for machine tools, which accounts for around 70% of its OP. ■ Catalysts/risks: Monthly orders disclosed by the company suggest improvement picking up pace ahead of spring 2013, driven particularly by high-tech and Chinese demand. Furthermore, we expect 3Q FY3/13 results (due in mid-January 2013) to reveal YoY OP growth for the first time in five quarters. Risks include a prolonged slump in high-tech and Chinese demand, and the winding down of auto sector investment in robots. ■ Valuation: We raise our target price from ¥630 to ¥800, based on fair-value P/B of 1.83x (9.75% forecast ROE ÷ 5.34% WACC) applied to end-FY3/14E BPS of ¥437. We lower our risk-free rate assumption from 0.8% to 0.7%, but continue to employ a risk premium of 7.0%.

Fanuc; Maintain NEUTRAL rating; now expect firm share price performance; Shinji Kuroda; 04 December 2012 ■ Action: While leaving our earnings estimates for Fanuc unchanged, we shift the base year for our valuation model from FY3/13 to FY3/14 (as investors' focus is now shifting to the coming fiscal year) and raise our TP from ¥11,000 to ¥12,200 (– 12.5% potential return). We maintain our NEUTRAL rating. ■ Investment case: As discussed in our 2 November sector report Appearance of Omron Honorary Chairman Yoshio Tateishi in "My Resume" column underscores strength of Japan's FA sector, Fanuc, Keyence and other Japanese factory automation (FA) suppliers are gaining international competitiveness at a time when consumer electronics companies find themselves in total disarray. Investors accordingly are shifting their attention from consumer electronics stocks to FA

i-Spy 32 10 December 2012

manufacturers. In addition, the Chinese economy looks poised to turn around. In previous reports we have highlighted the downside risk in Fanuc's share price, but we now project a relatively robust share price performance. That said, investors may do well to take profits ahead of the 3Q results announcement. ■ Catalysts/risks: When announcing 3Q results in late January 2013, we expect Fanuc to report OP of ¥46.5bn (down 11% YoY) and orders of ¥117bn (down 7% YoY and 0.7% QoQ). Upside risks include machine tool orders picking up earlier than our projected timing (Jul–Sep 2013), while downside risks include a protracted slump in Chinese machine tool orders and a clear peak in auto sector capex. ■ Valuation: We raise our TP from ¥11,000 to ¥12,200, based on fair-value P/B of 2.14x (12.73% forecast ROE ÷ 5.95% WACC) applied to end- FY3/14E BPS of ¥5,718. While lowering our risk-free rate assumption from 0.8% to 0.7%, we continue to employ a risk premium of 7.0%.

Okuma Corporation; See downside risk until 3Q results; maintain UNDERPERFORM; Shinji Kuroda; 04 December 2012 ■ Action: We trim our earnings estimates for Okuma but raise our TP from ¥400 to ¥430 (potential return –11.7%) in conjunction with a shift in our base year from FY3/13 to FY3/14. We maintain our UNDERPERFORM rating. ■ Investment case: Okuma’s monthly orders have fallen more than expected. We maintain UNDERPERFORM ratings on Okuma and Mori Seiki (6141) as both companies continue to be adversely affected by double-digit YoY declines in monthly orders. Conversely, we have an OUTPERFORM rating on Amada (6113)— a stock notable for its exposure to the North American housing market—which is enjoying relatively firm order momentum. ■ Based on the current order environment, we lower our FY3/13 OP forecast from ¥9.5bn to ¥8.9bn in FY3/13 (guidance ¥9.0bn, IFIS consensus ¥9.7bn), and our FY3/14 forecast from ¥11.8bn to ¥10.6bn (IFIS ¥9.7bn). ■ Catalysts/risks: November parent orders should show some improvement from October owing to effects from the Japan International Machine Tool Fair (JIMTOF), but the broader order trend is likely to remain weak through Jan–Mar 2013. Moreover, we expect 3Q results to drop 43% YoY to roughly ¥2.0bn, setting the stage for a period of sharp losses. The main risk to our target price is the anticipated acceleration in order momentum playing out ahead of the Jul–Sep 2013 timeframe we currently have in mind. ■ Valuation: We raise our TP from ¥400 to ¥430, applying an estimated fairvalue P/B of 0.7x (= projected ROE of 6.96% ÷ WACC of 9.90%) to end- FY3/14E BPS of ¥612. While lowering our risk-free rate assumption from 0.8% to 0.7%, we continue to employ a risk premium of 7.0%.

Mori Seiki; Looks overbought; maintain UNDERPERFORM; Shinji Kuroda; 04 December 2012 ■ Action: We revise our earnings estimates for Mori Seiki, and raise our TP from ¥400 to ¥500 (potential return –14.2%) in conjunction with a shift in our base year from FY3/13 to FY3/14. We keep our UNDERPERFORM rating. ■ Investment case: With fundamentals essentially unchanged, Mori Seiki continues to suffer from weak order momentum. However, three factors have combined to

i-Spy 33 10 December 2012

drive share price gains. First, amid the recent weakening of the yen against the euro, Mori Seiki has attracted market interest by virtue of its considerable exposure to Europe. Second, management has announced it will stick with its ¥20 DPS target (dividend yield of 3.4%). Third, expansion of exports to German partner DMG (after the latter consolidated its sales functions) looks likely to provide some degree of earnings support. However, considering the lingering order weakness, we think shorting could prove effective ahead of the 3Q results announcement, when we see risk of a swing to losses. ■ We make no changes to our FY3/13 OP forecast of ¥3.2bn (guidance ¥4.0bn, IFIS consensus ¥3.9bn) but lift our FY3/14 forecasts from ¥3.0bn to ¥3.4bn (IFIS ¥4.1bn) to reflect anticipated cost cuts. ■ Catalyst/risks: We see a strong probability of monthly orders deteriorating further heading into Jan–Mar 2013. Risks to our target price include an early recovery in orders as well as higher-than-expected earnings contributions from exports to DMG, evidence of which is not reflected in monthly order data. ■ Valuation: We raise our TP from ¥400 to ¥500, applying an estimated fairvalue P/B of 0.59x (= projected ROE of 2.16% ÷ WACC of 3.65%) to end- FY3/14E BPS of ¥844. We shift our base year from FY3/13 to FY3/14, and while lowering our risk- free rate assumption from 0.8% to 0.7%, we continue to employ a risk premium of 7.0%.

Amada; Maintain OUTPERFORM; poised to benefit from housing rebound in North America and Japan; Shinji Kuroda; 04 December 2012 ■ Action: We revise our forecasts for Amada and raise our TP from ¥450 to ¥550 (potential return +18.0%), and shift the base year for our valuation model from FY3/13 to FY3/14. We maintain our OUTPERFORM rating. ■ Investment case: Amada derives 30–40% of its sales from housing and communications infrastructure investment in Japan and overseas, and we therefore expect monthly orders to remain relatively firm. We also think the company’s increased focus on reducing inventory this year could lead to higher profits in FY3/14. We thus shift the base year for our TP calculation from FY3/13, when profits are being depressed, to FY3/14, when we expect them to normalize, and we remain bullish on the stock. ■ We lower our FY3/13 OP forecast from ¥10.0bn to ¥8.5bn (guidance ¥9.2bn, IFIS consensus ¥9.2bn) to factor in production cuts aimed at reducing inventory. We conversely raise our FY3/14 OP forecast from ¥11.0bn to ¥13.0bn (IFIS ¥11.0bn) to reflect completion of production cuts and a recovery in housing equipment–related orders in North America and Japan. ■ Catalysts/risks: Our focus is on Amada’s relatively firm monthly orders. While orders at such pure machine-tool companies as Okuma and Mori Seiki are down by double digits YoY, Amada is maintaining positive growth. Risks include a worse- than-expected deterioration in the order environment and protracted production cuts. ■ Valuation: We base our ¥550 TP on a fair-value P/B of 0.56x (projected ROE of 2.7%÷WACC of 4.8%) applied to our end-FY3/14 BPS forecast of ¥977. We lower our assumed risk-free rate from 0.8% to 0.7% and continue to assume a 7.0% risk premium.

i-Spy 34 10 December 2012 Global Macro Forecasts

Exhibit 13: Global Macro Forecasts

Source: Credit Suisse estimates

i-Spy 35 10 December 2012 Valuation & Performance

Exhibit 14: Sector Valuation & Performance Americas P/E AVG P/E (5Y) PE/G EV/Sales EV/EBIT EV/EBITDA P/BYield Performance Sector 11 12E FY1 FY2 11 11 12E 11 12E 11 12E 11 12E DIV 1-WK 1-MO 3-MO 6-MO YTD VS LO VS HI BETA Canada Industrials 16.4x 14.7x 17.6x 14.8x 0.6x 0.8x 1.0x 9.7x 10.3x 7.3x 7.5x 3.3x 3.1x 2.4% -2% -2% 0% -2% -9% 8% -22% 1.13 LatAm Industrials 28.8x19.3x16.1x13.1x2.2x1.9x----4.5x4.3x2.4%2%5%10%17%24%35%-15%0.85 US Aerospace 19.2x 17.3x 14.8x 12.4x 1.1x 1.4x 1.2x 10.4x 11.2x 7.6x 8.5x 2.5x 2.2x 0.8% -1% 3% 0% 1% 8% 22% -11% 1.27 US Automotive 11.1x 11.3x 15.5x 11.6x -0.1x 0.6x 0.6x 8.1x 7.9x 5.5x 5.2x 2.0x 1.9x 1.2% 1% 5% 1% 17% 20% 36% -11% 1.50 US Defense 10.0x 10.4x 11.6x 10.7x 0.1x 0.7x 0.7x 6.8x 7.7x 5.5x 6.0x 1.7x 1.6x 2.7% 1% 3% 4% 11% 6% 23% -10% 0.87 US Electrical Equipment/Multi-Industry 17.9x 15.5x 15.5x 12.9x 1.1x 1.5x 1.4x 10.4x 10.4x 7.7x 7.9x 2.7x 2.4x 1.5% 0% 4% 5% 13% 19% 32% -7% 1.34 US Engineering & Construction 14.7x 15.6x 18.2x 12.9x 0.4x 0.5x 0.4x 7.6x 7.0x 6.3x 5.9x 2.2x 1.8x 0.4% 2% 5% 1% 26% 16% 44% -17% 1.49 US Environmental Services 21.6x 22.1x 21.1x 18.3x 0.9x 2.0x 1.5x 12.5x 10.7x 8.3x 6.6x 2.4x 2.5x 2.4% 2% 7% 5% 10% 8% 21% -7% 0.72 US Fluid Management 18.0x 19.2x 17.5x 15.5x 1.0x 2.1x 2.2x 13.3x 13.2x 10.2x 9.9x 3.3x 3.1x 1.4% 1% 5% 4% 17% 23% 30% -6% 1.21 US Industrial Distribution 20.7x 17.9x 17.6x 15.3x 0.6x 1.2x 1.0x 10.6x 9.1x 7.9x 8.3x 3.4x 3.0x 1.1% -1% 1% -1% 12% 4% 18% -15% 1.25 US Machinery 15.7x 13.3x 17.9x 12.6x 0.5x 1.2x 1.1x 9.8x 9.2x 7.4x 7.0x 2.5x 2.4x 1.5% 1% 4% 5% 22% 21% 39% -11% 1.65 US Transports 21.5x 18.7x 21.3x 16.6x 1.1x 1.3x 1.2x 11.0x 10.9x 7.3x 7.8x 2.8x 2.5x 1.3% 0% 1% 0% 5% 11% 24% -11% 1.05 Average 18.0x 16.3x 17.1x 13.9x 0.8x 1.2x 1.2x 10.0x 9.8x 7.4x 7.3x 2.8x 2.6x 1.6% 0% 4% 3% 12% 13% 28% -12% 1.19 S&P 500 1% 3% 3% 15% 1% 20% 0% 1.00

EMEA P/E AVG P/E (5Y) PE/G EV/SalesEV/EBIT EV/EBITDA P/B Yield Performance Sector 11 12E FY1 FY2 11 11 12E 11 12E 11 12E 11 12E DIV 1-WK 1-MO 3-MO 6-MO YTD VS LO VS HI BETA European Aerospace & Defense 14.7x 12.6x 12.3x 10.5x 0.7x 1.1x 1.0x 9.3x 8.7x 6.8x 6.4x 3.0x 2.4x 2.2% 2% 4% 6% 16% 26% 35% -5% 0.83 European Automotive 8.6x 9.9x 11.7x 10.3x 0.3x 0.5x 0.5x 6.8x 6.2x 3.9x 3.9x 1.4x 1.3x 2.3% 0% 7% 5% 18% 27% 40% -13% 1.47 European Electrical/Electronics 12.8x 12.0x 13.7x 12.2x 0.5x 1.2x 1.1x 9.9x 11.0x 7.9x 7.8x 2.1x 2.0x 2.8% 4% 5% 4% 27% 21% 35% -4% 1.11 European Mechanical 15.9x 15.2x 13.4x 12.7x 0.7x 1.8x 1.6x 11.2x 10.7x 8.4x 8.0x 3.2x 2.9x 3.5% 2% 8% 10% 24% 25% 37% -5% 1.08 European Wind Energy 5.6x 13.2x 20.4x 15.8x - 0.3x 0.2x 8.6x 8.2x 4.7x 3.2x 0.3x 0.3x 0.2% 5% 6% -18% 13% -49% 45% -54% 1.17 European Industrial Machinery 8.9x 23.3x 14.1x 11.0x 0.5x 0.6x 0.6x 2.0x 9.5x 7.6x 5.9x 1.8x 1.6x 2.8% 3% 5% 2% 11% -2% 20% -15% 1.13 MEA Industrials 9.0x8.8x12.6x9.3x------4.9%-8%-20%-20%-7%-1%3%-26%1.10 Swiss Mid-cap Engineering 14.8x 15.0x 14.2x 14.6x 0.2x 1.0x 1.0x 10.2x 10.5x 7.2x 7.4x 2.1x 2.2x 2.9% 2% 5% 5% 13% 22% 31% -8% 1.60 UK Capital Goods 14.0x 13.7x 13.2x 11.0x 0.8x 1.5x 1.5x 10.2x 10.1x 7.7x 7.6x 2.7x 2.6x 2.7% 2% 7% 3% 16% 23% 36% -10% 1.42 Average 11.6x 13.8x 14.0x 11.9x 0.5x 1.0x 0.9x 8.5x 9.4x 6.8x 6.3x 2.1x 1.9x 2.7% 1% 3% 0% 15% 10% 31% -16% 1.21 DJSTOXX 600 2% -11% -15% -18% -6% 6% -18% 1.00

Asia P/E AVG P/E (5Y) PE/G EV/Sales EV/EBIT EV/EBITDA P/BYield Performance Sector 11 12E FY1 FY2 11 11 12E 11 12E 11 12E 11 12E DIV 1-WK 1-MO 3-MO 6-MO YTD VS LO VS HI BETA China Automotive 13.4x15.9x12.7x11.0x------1.5%7%14%31%17%30%67%-10%1.36 China Industrial Machinery 9.2x 11.8x 18.5x 14.1x 0.3x 1.0x 1.1x 6.4x 6.2x 5.6x 5.2x 1.6x 1.4x 2.9% 10% 3% 5% -18% -14% 25% -31% 1.36 China Infrastructure Construction 13.5x 15.5x 19.5x 14.7x 2.0x 1.5x 0.8x 13.3x - 10.1x 10.8x 2.9x 2.5x 2.0% 8% 9% 29% 28% 59% 71% -2% 0.93 China Power Equipment 8.3x 9.8x 20.7x 17.2x 0.3x 1.0x 0.8x 9.3x 10.0x 6.8x 6.5x 1.0x 1.0x 2.0% 6% 0% 6% -12% -22% 22% -38% 1.06 China Container Manufacturing5.9x10.0x23.7x22.6x------5.0%6%3%5%-10%8%26%-26%1.24 India Automotive 18.1x 17.7x 17.5x 14.7x 0.8x 1.4x 1.4x 11.6x 11.3x 7.8x 7.3x 3.2x 3.0x 1.5% 0% 2% 14% 13% 30% 38% -9% 0.91 India Capital Goods 15.5x 19.1x 20.5x 16.3x 0.8x 1.2x 1.1x 6.7x 9.9x 6.1x 8.0x 3.0x 2.6x 1.1% 3% 5% 11% 9% 33% 44% -18% 1.26 Japan Automotive 16.1x 20.1x 17.3x 16.2x 0.5x 0.6x 0.6x 9.9x 7.9x 6.9x 5.5x 1.2x 1.2x 1.8% 0% 14% 23% 20% 27% 44% -9% 1.30 Japan Auto Related Consumables 10.8x 14.2x 14.5x 14.8x 0.3x 0.6x 0.6x 9.8x 9.8x 4.9x 5.3x 0.9x 0.8x 2.2% 3% 24% 9% -7% -8% 28% -30% 1.65 Japan Conglomerates 9.7x 9.2x 14.6x 13.8x 0.3x 0.4x 0.4x 7.6x 8.6x 4.5x 5.0x 1.3x 1.2x 2.0% -1% 13% 4% 6% 1% 18% -15% 1.46 Japan/Taiwan Factory Automation 19.2x 18.3x 23.1x 21.1x 0.7x 1.2x 1.1x 11.2x 10.0x 8.4x 7.9x 2.3x 2.3x 2.0% 2% 10% 12% 5% 18% 33% -11% 1.13 Japan Infrastructure Machinery 20.1x 15.2x 25.6x 14.7x 0.7x 1.0x 1.0x 11.0x 10.2x 6.9x 7.3x 1.5x 1.4x 2.0% 2% 13% 18% 17% 24% 36% -10% 1.34 Japan Machine Tools - 20.2x 14.5x 13.5x - 0.7x 0.6x - 8.7x 8.3x 6.4x 0.7x 0.7x 2.8% 3% 16% 23% -2% -4% 27% -27% 1.47 Korea Engineering & Construction 12.8x 13.2x 12.6x 11.2x 0.9x 0.6x 0.5x 7.5x 9.1x 6.9x 8.2x 1.1x 1.6x 1.1% 1% 6% -12% -3% -13% 18% -29% 1.18 Korea Industrials / Shipbuilding / Autos 9.3x 9.8x 11.4x 9.4x -0.1x 0.8x 0.7x 9.9x 10.0x 7.6x 7.5x 1.3x 1.2x 1.2% 3% 4% -9% -9% -2% 15% -26% 1.27 Singapore /Taiwan Industrials 15.1x 18.1x 15.7x 13.9x -0.8x 1.6x 1.6x 9.1x 10.2x 7.5x 7.8x 2.5x 2.3x 3.0% 0% 1% -8% 0% 13% 19% -18% 1.51 Average (Non Japan Asia) 12.1x 14.1x 17.3x 14.5x 0.5x 1.1x 1.0x 9.2x 9.5x 7.3x 7.7x 2.1x 1.9x 2.1% 4% 5% 7% 2% 12% 35% -21% 1.21 Average (Japan) 15.2x 16.2x 18.3x 15.7x 0.50x 0.7x 0.7x 9.9x 9.2x 6.6x 6.2x 1.3x 1.3x 2.1% 1% 15% 15% 6% 10% 31% -17% 1.39

Source: Factset, Credit Suisse estimates

i-Spy 36 i-Spy

Americas Capital Goods Valuation Summary

Exhibit 15: Americas Valuation & Performance

Canada Industrials $USD PE/G YIELD Name Ticker Rating CCY 12/10/2012 TP MktCp 11 12E 13E 5Y FY1 5Y FY2 11 11 12E 13E 11 12E 13E 11 12E 13E 11 12E DIV 1-WK 1-MO 3-MO 6-MO YTD VS LO VS HI BETA Bombardier Inc BBDb.TO O CAD 3.34 6 4,872 7.0x 7.4x 6.8x 12.5x 10.5x - 0.3x 0.4x 0.4x 5.1x 7.2x 6.2x 4.0x 5.3x 4.7x - 4.2x 3.0% -4.8% -2.6% -6.4% -13.9% -17.7% 11.7% -31.4% 1.61 CAE, Inc. CAE.TO O CAD 10.00 13 2,625 - 13.6x 14.1x 14.7x 13.2x - - 1.7x 1.5x - 10.1x 10.8x - 7.3x 7.6x - 2.5x 2.0% 1.2% 0.4% -3.3% 1.2% 1.1% 6.3% -10.0% 1.10 Finning International Inc. FTT.TO O CAD 22.12 30 3,851 14.7x 11.4x 8.6x 16.0x 12.6x 0.6x 0.8x 0.8x 0.6x 12.6x 11.0x 7.5x 8.6x 7.4x 4.7x 2.8x 2.5x 2.5% -2.8% -3.8% -6.8% -3.8% -0.4% 1.4% -25.8% 1.35 Ritchie Bros. Auctioneers RBA N USD 21.18 23 2,256 30.7x 25.2x 21.8x 29.9x 24.7x 1.9x - - - - - 14.5x - - 10.8x 3.6x 3.4x 2.3% -7.6% -0.8% 11.2% 10.0% -4.1% 15.1% -17.9% 0.73 SNC Lavalin Group SNC.TO N CAD 37.75 47 5,774 15.1x 16.6x 14.0x 21.1x 18.2x -1.4x 0.9x 0.9x 0.8x 11.2x 12.5x 10.0x 9.1x 9.7x 7.8x 3.0x 2.7x 2.3% -4.2% -7.6% 4.5% -3.8% -26.1% 7.9% -32.0% 1.23 Toromont Industries, Ltd. TIH.TO U CAD 20.48 21 1,583 14.5x 14.2x 13.2x 11.5x 9.8x 1.2x 0.9x 1.1x 1.0x 9.8x 10.6x 9.2x 7.7x 7.8x 6.7x 3.9x 3.3x 2.3% 5.1% 5.3% -1.3% -2.8% -3.9% 6.6% -17.9% 0.79 Average 16.4x 14.7x 13.1x 17.6x 14.8x 0.6x 0.8x 1.0x 0.9x 9.7x 10.3x 9.7x 7.3x 7.5x 7.1x 3.3x 3.1x 2.4% -2.2% -1.5% -0.4% -2.2% -8.5% 8.2% -22.5% 1.13

LatAm Industrials $USD PE/G YIELD Name Ticker Rating CCY 12/10/2012 TP MktCp 11 12E 13E 5Y FY1 5Y FY2 11 11 12E 13E 11 12E 13E 11 12E 13E 11 12E DIV 1-WK 1-MO 3-MO 6-MO YTD VS LO VS HI BETA Embraer ERJ NA USD 26 4,701 - 12.9x 9.1x 14.0x 11.1x - 0.9x 0.9x 0.8x - 7.9x 7.2x - 5.5x 5.0x - - 2.0% 3.9% -5.4% -3.5% -3.0% 2.7% 12.4% -26.6% 0.84 WEG WEGE3.SA N BRL 27 20 8,167 28.8x 25.7x 20.9x 18.2x 15.1x 2.2x - 2.8x 2.4x ------4.5x 4.3x 2.7% 0.1% 16.1% 23.4% 37.2% 45.3% 58.1% -3.8% 0.86 Average Local Price 28.8x 19.3xP/E 15.0x 16.1xAVG P/E 13.1x 2.2x 0.9x EV/SALES 1.9x -EV/EBIT - -EV/EBITDA - - 4.5xP/B 4.3x 2.4% 2.0% 5.3% 10.0% 17.1% Performance 24.0% 35% -15.2% 0.85

US Aerospace $USD PE/G YIELD Name Ticker Rating CCY 12/10/2012 TP MktCp 11 12E 13E 5Y FY1 5Y FY2 11 11 12E 13E 11 12E 13E 11 12E 13E 11 12E DIV 1-WK 1-MO 3-MO 6-MO YTD VS LO VS HI BETA BE Aerospace Inc. BEAV O USD 47.31 53 4,918 21.1x 16.7x 13.9x 15.5x 12.7x 0.5x 2.3x 1.9x 1.6x 13.7x 10.5x 8.7x - 9.4x 7.8x 2.6x 2.3x 0.0% -0.1% 6.9% 19.7% 8.8% 22.2% 30.7% -2.2% 1.81 Boeing BA O USD 74.64 86 56,284 14.0x 14.9x 15.1x 16.1x 12.2x 2.3x 0.9x 0.7x 0.6x 10.0x 9.3x 9.6x 7.8x 7.2x 7.3x - - 2.4% 0.5% 1.9% 4.7% 3.6% 1.8% 11.0% -3.4% 1.22 Precision Castparts PCP O USD 183.55 212 26,713 26.2x 21.7x 18.3x 15.7x 13.6x 1.9x - - - - 14.4x 12.0x - - - 3.7x 3.2x 0.1% 0.1% 7.1% 15.2% 11.0% 11.4% 20.6% -0.3% 1.19 Rockwell Collins, Inc. COL O USD 56.37 62 7,904 13.9x 13.6x 12.6x 13.4x 12.3x 1.6x 1.6x 1.7x 1.7x 9.0x 8.4x 8.5x 8.5x 7.5x 8.0x - - 2.1% -1.4% 5.2% 9.7% 13.3% 1.8% 20.1% -6.0% 1.15 Spirit AeroSystems SPR N USD 15.54 18 2,233 11.5x - 6.0x 11.6x 9.0x -0.2x 0.7x 0.6x 0.5x 9.0x - 5.2x 6.5x 10.1x 4.1x 1.1x 1.1x 0.0% -1.3% 2.3% -37.8% -32.7% -25.2% 10.7% -39.9% 1.54 TransDigm TDG O USD 129.72 6,706 28.8x 19.4x 19.1x 16.7x 14.7x 0.7x - - - - 13.5x 11.5x - - - - - 0.0% -4.6% -5.5% -8.8% 3.6% 35.6% 39.3% -14.0% 0.69 Average Local Price 19.2x 17.3xP/E 14.2x 14.8xAVG P/E 12.4x 1.1x 1.4xEV/SALES 1.2x 1.1x 10.4xEV/EBIT 11.2x 9.2x 7.6xEV/EBITDA 8.5x 6.8x 2.5xP/B 2.2x 0.8% -1.2% 3.0% 0.4% 1.3% Performance 7.9% 22.1% -11.0% 1.27

US Automotive $USD PE/G YIELD Name Ticker Rating CCY 12/10/2012 TP MktCp 11 12E 13E 5Y FY1 5Y FY2 11 11 12E 13E 11 12E 13E 11 12E 13E 11 12E DIV 1-WK 1-MO 3-MO 6-MO YTD VS LO VS HI BETA American Axle AXL U USD 10.32 10 772 4.8x 7.2x 7.1x 6.7x 6.0x -1.1x 0.7x 0.7x 0.6x 8.0x 11.4x 8.2x 4.9x 6.2x 4.9x - - 0.0% -1.3% 0.4% -13.0% 12.5% 4.3% 25.5% -20.3% 1.52 BorgWarner BWA N USD 67.25 82 7,871 15.1x 13.5x 12.0x 44.9x 14.6x 0.5x 1.2x 1.1x 1.0x 11.2x 9.8x 8.8x 8.2x 7.7x 6.3x 3.5x 2.5x 0.0% 1.4% 6.4% -8.3% 4.2% 5.5% 11.1% -22.7% 1.46 Delphi Automotive DLPH O USDLocal 33.97 Price 44 10,787 12.5x 9.0xP/E 7.6x -AVG P/E 13.5x 0.1x 0.7xEV/SALES 0.7x 0.6x 6.7xEV/EBIT 6.6x 5.3x 5.4xEV/EBITDA 5.2x 4.2x -P/B 4.0x 0.0% -0.1% 5.3% Performance 64.6% -0.2% - Ford Motor Co. F N USD 11.48 14 51,853 6.0x 8.2x 7.9x 5.3x 11.0x - 0.3x 0.3x 0.3x 7.3x 6.6x 6.0x 4.5x 4.1x 3.8x 3.1x 2.7x 1.7% 0.3% 5.0% 13.1% 11.5% 6.7% 28.7% -11.4% 1.07 General Motors GM O USD 25.19 35 39,448 6.5x 8.0x 8.0x 7.3x 13.0x 1.2x 0.2x 0.2x 0.1x 5.1x 4.3x 3.0x 2.4x 2.0x 1.7x 1.1x 1.0x 0.0% -2.7% 0.6% 9.7% 15.2% 24.3% 34.0% -7.9% - Harman International HAR N USD 40.75 59 2,764 19.6x 13.9x 11.5x 25.2x 10.3x 0.3x 0.6x 0.5x 0.5x 11.7x 7.8x 6.3x 7.1x 5.5x 4.4x 2.1x 1.9x 1.5% 3.0% 4.3% -14.7% 14.0% 7.1% 17.9% -20.3% 2.05 KAR Auction Servicers KAR O USD 17.84 22 2,438 15.3x 17.5x 15.1x 14.0x 11.9x -0.8x 2.3x 2.1x 1.9x 13.1x 15.0x 12.0x 9.6x 8.8x 7.6x 1.8x 1.7x 4.3% 0.4% -4.6% -4.2% 13.9% 32.1% 37.3% -13.5% 1.48 Lear Corp LEA O USD 44.64 68 4,326 8.4x 8.2x 8.5x 9.6x 17.6x -0.7x 0.2x 0.2x 0.2x 4.8x 4.6x 3.8x 4.6x 4.4x 3.7x 1.9x 1.4x 1.3% 2.2% 6.2% 9.5% 18.1% 12.2% 28.2% -5.0% 1.25 Magna International MGA N USD 47.06 61 10,959 10.4x 9.1x 9.7x 7.6x 13.6x 1.2x 0.3x 0.3x 0.3x 7.8x 6.4x 6.9x 5.0x 4.2x 4.2x 1.4x 1.2x 2.3% 1.4% 4.8% 2.6% 20.7% 41.3% 48.5% -3.7% 1.31 Superior Interiors SUP U USD 18.80 17 512 15.4x 22.3x 20.3x 26.6x 8.2x -0.5x 0.4x 0.4x 0.4x 8.0x 9.8x 8.3x 4.7x 5.3x 4.6x 1.1x 1.1x 3.4% -0.7% 9.4% 5.9% 13.9% 13.7% 21.5% -6.2% 1.05 Tenneco TEN O USD 32.79 45 1,975 12.4x 9.7x 8.5x 11.9x 9.4x 0.3x 0.4x 0.4x 0.4x 7.9x 6.5x 6.3x 5.1x 4.5x 4.5x - - 0.0% 2.2% 10.9% 2.5% 25.4% 10.1% 32.6% -17.5% 1.99 TRW Automotive Holdings TRW O USD 52.00 70 6,354 7.0x 8.8x 7.9x 11.2x 10.4x -1.4x 0.4x 0.4x 0.4x 5.2x 5.5x 4.4x 3.8x 4.0x 3.3x 2.4x 1.9x 0.0% 2.7% 10.1% 12.5% 42.2% 59.5% 80.0% 0.0% 1.77 Average Local Price 11.1x 11.3xP/E 10.3x 15.5xAVG P/E 11.6x -0.1x 0.6xEV/SALES 0.6x 0.6x 8.1xEV/EBIT 7.9x 6.6x 5.5xEV/EBITDA 5.2x 4.4x 2.0xP/B 1.9x 1.2% 0.7% 4.9% 1.4% 17.4%Performance 19.7% 35.8% -10.7% 1.50

US Defense $USD PE/G YIELD Name Ticker Rating CCY 12/10/2012 TP MktCp 11 12E 13E 5Y FY1 5Y FY2 11 11 12E 13E 11 12E 13E 11 12E 13E 11 12E DIV 1-WK 1-MO 3-MO 6-MO YTD VS LO VS HI BETA Alliant Techsystems Inc. ATK N USD 62.01 60 2,026 6.7x 7.8x 8.1x 9.6x 9.2x -0.5x 0.6x 0.6x 0.6x 5.6x 5.6x 6.0x 4.4x 4.4x 4.7x 1.8x 1.7x 1.7% 3.3% 3.5% 26.0% 32.6% 8.5% 40.9% -1.0% 0.80 CACI International, Inc. CACI N USD 53.35 54 1,218 11.6x 9.0x 7.9x 13.1x 12.0x 0.4x 0.4x 0.5x 0.4x 6.0x 6.2x 5.4x 4.9x 5.2x 4.6x 1.3x 1.3x 0.0% 4.3% 3.5% -2.2% 9.7% -4.6% 27.9% -15.1% 0.70 Esterline Technologies ESL O USD 62.88 71 1,940 14.7x 17.5x 11.3x 12.7x 11.4x -1.2x 1.6x 1.3x 1.3x 14.1x 11.1x 10.0x 9.8x 7.6x 7.1x 1.3x 1.3x 0.0% 2.8% 8.7% 7.7% 2.6% 12.3% 23.0% -16.4% 1.19 General Dynamics GD O USD 67.19 77 23,723 9.7x 9.5x 9.2x 10.5x 9.8x - 0.7x 0.7x 0.7x 6.1x 5.9x 5.9x 5.2x 5.2x 5.2x 1.9x 1.6x 3.0% 1.0% 4.3% 1.8% 5.8% 1.2% 8.4% -9.3% 1.19 L-3 Communications LLL N USD 76.65 75 7,210 11.0x 9.7x 9.7x 10.1x 9.4x - 0.8x 0.8x 0.8x 7.0x 7.5x 8.0x 5.9x 6.2x 6.6x - 2.6% -0.3% 2.9% 7.2% 14.9% 19.9% 24.8% -1.0% 1.02 Lockheed Martin LMT N USD 91.90 86 29,738 11.8x 11.1x 11.4x 11.2x 10.4x - 0.7x 0.6x 0.6x 7.8x 7.0x 7.1x 6.5x 5.7x 5.8x - - 5.0% -1.5% 2.1% -0.4% 11.2% 13.6% 20.5% -3.1% 0.99

Local Price P/E AVG P/E EV/SALES EV/EBIT EV/EBITDA P/B Performance

ManTech International Corp. MANT U USD 24.85 19 920 6.8x 9.2x 9.5x 14.0x 12.8x -0.6x 0.4x 0.4x 0.4x 5.3x 6.6x 6.2x 4.3x 5.0x 4.7x 3.4% -0.5% 0.1% 8.5% 9.9% -20.5% 22.7% -32.6% 0.45 NorthropG rummanC orporation NOC N USD 67.53 70 16 ,575 9.1x 9.1x 9.8x 9.5x 8.8x 1.1x 0.7x 0.7x 0.7x 5.3x 7.2x 7.2x 4.6x 4.6x 5.0x 1.8x 1.6x 3.3% 1.2% 2.9% 0.2% 13.0% 15.5% 22.4% -5.1% 1.11

Raytheon Company RTN O USD 57.40 61 18,934 11.2x 10.5x 10.8x 11.3x 10.3x 1.6x 0.8x 0.8x 0.9x 6.8x 6.8x 7.7x 5.9x 5.9x 6.6x 2.5x 2.2x 3.5% 0.5% 2.4% 0.0% 9.8% 18.6% 28.1% -1.7% 0.76 SAIC SAI U USD 11.31 11 3,866 7.7x - 7.6x 14.0x 12.5x - 0.4x 0.4x 0.4x 4.2x 13.3x 5.6x 3.8x 9.7x 5.0x 1.7x 1.7x 4.2% -1.9% 3.0% -9.0% -2.7% -8.0% 9.0% -16.9% 0.49

Average 10.0x 10.4x 9.5x 11.6x 10.7x 0.1x 0.7x 0.7x 0.7x 6.8x 7.7x 6.9x 5.5x 6.0x 5.5x 1.7x 1.6x 2.7% 0.9% 3.3% 4.0% 10.7% 5.7% 22.8% -10.2% 0.87 10 December 201 10 December

Source: Company data, Credit Suisse estimates 3 7 2

i-Spy Exhibit 16: Americas Valuation & Performance (contd)

Local Price P/E AVG P/E EV/SALES EV/EBIT EV/EBITDA P/B Performance US Electrical Equipment/Multi-Industry $USD PE/G YIELD Name Ticker Rating CCY 12/10/2012 TP MktCp 11 12E 13E 5Y FY1 5Y FY2 11 11 12E 13E 11 12E 13E 11 12E 13E 11 12E DIV 1-WK 1-MO 3-MO 6-MO YTD VS LO VS HI BETA ADT ADT NA USD 45.55 50 10,589 27.4x 26.2x 24.5x - - - - 17.7x - 8.0x 8.2x 7.8x 2.1x 2.1x 1.2% -0.8% 5.8% 28.3% -0.8% Danaher Corporation DHR N USD 53.50 55 37,059 18.9x 16.9x 15.2x 17.7x 15.8x 1.0x 2.6x 2.2x 1.9x - 12.5x 10.6x - 10.4x 9.0x 2.1x 1.9x 0.2% -0.9% 2.8% -1.9% 5.0% 13.7% 17.9% -5.9% 0.95 Dover Corp DOV N USD 63.73 64 11,408 14.2x 13.8x 12.6x 14.4x 12.8x 1.2x 1.6x 1.4x 1.3x 10.2x 9.1x 8.1x 8.2x 7.4x 6.6x 2.4x 2.1x 2.2% 0.2% 5.4% 8.0% 15.3% 9.8% 25.1% -4.3% 1.34 Emerson EMR O USD 50.85 55 36,822 15.7x 19.0x 14.1x 16.1x 14.6x - 1.7x 1.6x 1.5x 9.5x 9.2x 8.5x 7.8x 7.7x 7.2x 3.6x 3.6x 3.2% 1.2% 1.4% 2.9% 9.3% 9.1% 15.5% -4.7% 1.19 Gardner Denver, Inc. GDI O USD 68.92 71 3,384 12.5x 12.4x 11.9x 13.8x 12.5x 0.4x 1.5x 1.6x 1.5x 8.8x 9.4x 8.6x 7.7x 8.0x 7.3x 2.8x 2.7x 0.3% -1.3% -1.5% 11.4% 36.3% -10.6% 43.1% -18.2% 1.32 General Electric GE O USD 21.46 24 226,593 15.7x 14.4x 13.3x 13.6x 12.5x 1.0x - 1.0x 1.0x - 8.5x 7.6x - 5.5x 5.2x 2.0x 1.9x 3.2% 1.6% 2.2% -0.6% 10.8% 19.8% 30.7% -7.2% 1.55 Honeywell International Inc. HON N USD 61.97 64 48,546 15.3x 13.8x 12.5x 14.2x 12.6x 1.6x 1.4x 1.4x 1.2x - 9.9x 8.1x - 8.4x 7.1x 4.5x 3.7x 2.7% 1.0% 1.9% 3.6% 12.4% 16.6% 20.2% -2.5% 1.34 Hubbell Inc HUBBNR ------2.2% 1.21 Ingersoll Rand IR O USD 48.69 51 14,656 17.3x 14.9x 12.8x 13.9x 11.6x 1.0x 1.2x 1.2x 1.1x 11.4x 11.1x 9.2x 9.0x 8.9x 7.6x 2.4x 1.9x 1.3% -0.2% 6.2% 5.9% 22.8% 59.8% 63.3% -0.2% 1.61 ITT ITT NR USD 22.56 2,091 14.1x 13.3x 12.0x 4.4x 4.0x 1.7x - - - 4.7x 7.3x 5.7x 3.6x 5.2x 4.4x - - 1.6% 0.8% 3.9% 7.3% 17.3% 16.7% 31.6% -9.6% 1.16 Kennametal Inc. KMT O USD 38.95 41 3,102 14.1x 10.3x 11.5x 18.0x 12.5x - 1.3x 1.3x 1.2x 9.6x 8.2x 8.2x 7.5x 6.6x 6.5x 2.0x 1.9x 1.6% 2.2% 9.9% 0.0% 17.7% 6.7% 26.1% -18.0% 1.50 Luxfer LXFR O USD 11.04 13 289 6.9x 7.2x 6.5x - 0.8x 0.7x 0.6x 6.1x 4.8x 4.3x 5.0x 4.0x 3.5x 2.2x 0.0% -2.0% -4.0% 6.5% -4.6% Rockwell Automation ROK O USD 80.39 85 11,199 16.4x 15.2x 14.2x 16.8x 14.9x - 1.9x 1.8x 1.7x 11.7x 10.8x 9.8x 10.3x 9.6x 8.7x - - 2.3% 1.5% 4.2% 13.5% 16.5% 9.6% 30.7% -4.9% 1.50 Roper ROP NR USD 111.77 10,993 25.8x 22.6x 19.6x 19.4x 17.3x 1.8x - - - - - 13.7x - - - - - 0.5% 0.2% 2.9% 7.0% 12.5% 28.7% 37.3% -1.2% 0.84 Rexnord RXN N USD 21.70 2,097 - 20.9x 20.9x - - - 2.2x 1.8x 1.8x 13.4x 13.4x - - - - - 1.6% 1.5% 20.9% 27.6% 11.6% 44.4% -1.7% 1.16 SPX Corp SPW N USD 67.83 3,446 27.2x 19.3x 14.1x 15.6x 13.0x - 1.1x 0.9x 0.8x - 14.8x 11.5x - 10.7x 8.9x 1.5x 1.4x 1.5% -0.4% 2.4% 3.4% 1.0% 12.5% 20.0% -13.5% 1.63 Textron TXT N USD 23.79 26 6,705 15.9x 11.7x 10.2x 32.4x 11.7x - 0.9x 0.8x 0.7x 13.1x 8.6x 7.6x 8.6x 6.6x 5.5x 2.0x 2.0x 0.3% 1.3% -0.3% -12.2% -0.6% 28.7% 39.9% -17.7% 2.25 Tyco International, Ltd TYC N USD 28.66 30 13,347 24.4x 21.2x 15.8x 7.1x 12.7x - 1.3x 1.3x 1.3x - 14.1x 11.7x - 9.7x 8.5x 2.3x 2.5x 1.0% 1.0% 4.0% 4.8% 12.3% 24.9% 31.0% -1.1% 1.07 United Technologies Corp UTX NA USD 80.99 74,231 29.9x 15.1x 13.3x - 1.4x 1.4x 1.2x 13.9x 9.8x 8.5x - 8.6x 7.5x 3.3x 3.0x 2.6% 1.1% 6.8% 2.8% 10.1% 10.8% 14.3% -6.8% 1.04 Valmont Industries VMI U USD 135.84 133 3,618 22.3x 16.2x 14.3x 17.0x 14.9x 0.4x 1.4x 1.3x 1.1x 14.2x 10.7x 9.0x - 8.9x 7.7x 3.0x 2.8x 0.7% -2.7% 2.9% 2.1% 23.2% 49.6% 68.0% -3.7% 1.42 Xylem XYL NR USD 26.38 4,901 13.7x 15.0x 13.9x 13.9x - - 1.5x 1.5x 1.5x 11.7x - - 9.1x - - - 2.1x 1.5% 1.1% 6.8% 3.9% 4.8% 2.7% - Average 17.9x 15.5x 13.7x 15.5x 12.9x 1.1x 1.5x 1.4x 1.3x 10.4x 10.4x 9.3x 7.7x 7.9x 7.2x 2.7x 2.4x 1.5% 0.1% 3.8% 4.7% 13.1% 19.3% 32.2% -6.9% 1.34

Local Price P/E AVG P/E EV/SALES EV/EBIT EV/EBITDA P/B Performance US Engineering & Construction $USD PE/G YIELD Name Ticker Rating CCY 12/10/2012 TP MktCp 11 12E 13E 5Y FY1 5Y FY2 11 11 12E 13E 11 12E 13E 11 12E 13E 11 12E DIV 1-WK 1-MO 3-MO 6-MO YTD VS LO VS HI BETA Chicago Bridge & Iron CBI N USD 41.10 39 3,978 16.1x 13.9x 11.4x 16.8x 11.4x 0.8x 0.7x 0.6x 0.4x 9.4x 7.1x 5.1x 7.9x 6.1x 4.4x 3.4x 2.8x 0.5% 1.2% 10.2% 2.0% 16.6% 8.7% 22.8% -13.3% 2.18 EnergySolutions ES NA USD 3.09 279 - - - 9.4x 11.8x ------0.0% -5.5% -5.8% 17.5% 82.8% 0.0% 104.6% -41.7% 0.93 Fluor FLR O USD 56.32 71 9,378 16.6x 15.4x 13.0x 17.9x 15.4x 0.5x 0.3x 0.2x 0.2x 8.2x 7.3x 5.5x 6.7x 6.0x 4.7x 2.9x 2.4x 1.1% 6.1% 8.0% -1.2% 20.1% 12.1% 24.8% -12.0% 1.31 FosterWheeler FWLT O USD 23.11 31 2,450 16.2x 13.4x 11.3x 13.5x 11.6x - 0.4x 0.5x 0.4x 8.1x 7.0x 5.4x 6.6x 5.7x 4.5x 3.8x 2.7x 0.0% 2.9% 1.1% 2.1% 35.2% 20.7% 48.1% -10.0% 1.84 Jacobs Engineering JEC O USD 42.11 50 5,478 16.2x 14.3x 13.0x 16.4x 14.7x 1.6x 0.5x 0.5x 0.4x 9.9x 8.4x 6.9x 8.4x 7.2x 6.0x 1.6x 1.5x 0.0% 2.9% 8.0% 1.1% 19.1% 3.8% 22.4% -11.6% 1.35 KBR Inc. KBR O USD 28.70 48 4,235 9.0x 10.6x 9.0x 13.4x 12.4x 0.7x 0.4x 0.4x 0.3x 5.8x 5.3x 3.6x 5.7x 5.2x 3.6x 1.8x 1.5x 0.7% 3.2% 6.5% -4.2% 16.8% 3.0% 25.3% -24.3% 1.44 McDermott International MDR O USD 10.51 15 2,479 18.2x 11.6x 13.2x 10.1x 8.7x -1.3x 0.5x 0.5x 0.6x 7.3x 5.6x 6.2x 5.5x 4.4x 4.7x 1.4x 1.3x 0.0% -0.2% 4.3% -13.7% 2.8% -8.7% 13.7% -29.3% 1.68 Quanta Services PWR O USD 26.02 31 5,847 - 19.1x 15.7x 26.6x 18.8x - 1.2x 0.9x 0.8x - 11.5x 9.1x - 8.8x 7.3x 1.6x 1.5x 0.0% 0.6% -0.3% 6.0% 16.7% 20.8% 30.6% -2.4% 1.16 Shaw Group, Inc. SHAW U USD 45.29 46 3,010 - 30.4x 25.1x 38.7x 12.7x - 0.6x 0.5x 0.5x - - 13.5x - - 9.6x 3.9x 2.8x 0.0% 0.8% 4.0% 5.4% 74.9% 68.4% 108.3% 0.0% 1.39 URS Corporation URS NA USD 38.79 2,981 10.8x 11.4x 11.2x 12.8x 11.7x - 0.3x 0.3x 0.2x 4.4x 4.0x 3.4x 3.6x 3.2x 2.7x 0.7x 0.6x 2.1% 2.9% 10.6% 4.8% 14.7% 10.4% 19.0% -17.0% 1.36 Willbros Group Inc. WG U USD 5.22 6 256 - - 13.0x 24.1x 12.4x - 0.3x 0.2x 0.2x - - 6.7x - 6.8x 3.6x 1.1x 1.2x 0.0% 3.8% 7.2% -6.3% -14.4% 42.2% 66.8% -27.7% 1.80 Average 14.7x 15.6x 13.6x 18.2x 12.9x 0.4x 0.5x 0.4x 0.4x 7.6x 7.0x 6.6x 6.3x 5.9x 5.1x 2.2x 1.8x 0.4% 1.7% 4.9% 1.2% 25.9% 16.5% 44.2% -17.2% 1.49

Local Price P/E AVG P/E EV/SALES EV/EBIT EV/EBITDA P/B Performance US Environmental Services $USD PE/G YIELD Name Ticker Rating CCY 12/10/2012 TP MktCp 11 12E 13E 5Y FY1 5Y FY2 11 11 12E 13E 11 12E 13E 11 12E 13E 11 12E DIV 1-WK 1-MO 3-MO 6-MO YTD VS LO VS HI BETA #ERR: NUL 3,039 21.2x 23.9x 19.8x 25.1x 21.6x -1.1x 1.7x 1.4x 1.3x - 13.3x 10.9x 9.5x 8.1x 6.7x 2.9x 2.9x 0.0% -0.7% -0.2% 6.5% -3.5% -10.7% 20.6% -19.1% 0.60 Clean Harbors CLH NA USD 56.88 Covanta Holding CVA N USD 18.71 18 2,463 35.5x 32.3x 28.5x 26.8x 23.3x - 2.3x 1.5x 2.2x - 10.8x 14.8x 7.5x 4.9x 7.2x 2.4x 3.2% -0.9% 7.5% 6.7% 16.7% 36.7% 43.7% -1.1% 0.71 IESI-BFC LTD BIN N USD 21.51 23 2,477 19.3x 21.6x 18.5x 21.8x 18.8x - 2.1x 2.1x 2.0x 14.0x - 14.4x 7.2x 7.5x 7.0x 2.0x 2.6% 3.4% 15.0% 2.7% 21.0% 9.8% 21.7% -6.6% 1.00 Republic Services RSG O USD 29.10 34 10,613 14.9x 15.4x 15.2x 16.2x 14.3x 2.9x 2.1x 1.3x 2.1x 11.1x 7.4x 11.2x 7.2x 4.7x 7.3x 1.4x 3.2% 2.2% 8.8% 3.1% 13.0% 5.6% 14.6% -6.6% 0.81 Waste Connections WCN O USD 33.24 4,081 22.5x 23.1x 20.9x 20.9x 18.1x - - - 2.7x - 14.5x 12.7x 10.8x 9.4x 8.3x 2.7x 2.1x 1.2% 1.0% 5.7% 12.1% 9.9% 0.3% 15.0% -1.9% 0.62 Waste Management WM N USD 34.12 36 15,828 16.1x 16.2x 14.8x 15.5x 14.0x - 1.9x 1.2x 1.8x 12.4x 7.7x 11.0x 7.7x 4.7x 6.9x 2.6x 4.2% 4.8% 7.2% -0.1% 5.3% 4.3% 10.5% -5.4% 0.61 Average 21.6x 22.1x 19.6x 21.1x 18.3x 0.9x 2.0x 1.5x 2.0x 12.5x 10.7x 12.5x 8.3x 6.6x 7.2x 2.4x 2.5x 2.4% 1.6% 7.3% 5.2% 10.4% 7.7% 21.0% -6.8% 0.72

US Fluid Management Local Price $USDP/E AVG P/E PE/G EV/SALES EV/EBIT EV/EBITDA P/B YIELD Performance Name Ticker Rating CCY 12/10/2012 TP MktCp 11 12E 13E 5Y FY1 5Y FY2 11 11 12E 13E 11 12E 13E 11 12E 13E 11 12E DIV 1-WK 1-MO 3-MO 6-MO YTD VS LO VS HI BETA Donaldson Company, Inc. DCI O USD 33.58 40 4,970 11.5x 19.4x 19.0x 20.3x 18.2x -1.0x 2.1x 2.0x 1.9x - 13.9x 13.6x - - - 2.8x - 1.1% 0.0% 3.1% -7.0% -5.0% -1.4% 6.9% -13.2% 1.04 Flowserve Corp. FLS O USD 141.90 158 7,093 18.6x 16.8x 13.5x 14.3x 12.5x 1.7x 1.6x 1.6x 1.5x 12.0x 11.5x 10.3x 10.2x 9.9x 8.8x 3.5x 3.7x 1.0% 2.4% 4.9% 7.4% 35.7% 42.9% 47.3% 0.0% 1.74 Pall Corporation PLL O USD 60.46 73 6,717 21.8x 20.3x 19.8x 18.0x 15.7x 1.2x 2.5x 2.5x 2.4x 14.5x 14.3x 13.6x - - - 4.7x 4.6x 1.7% 1.6% 2.2% 4.9% 14.2% 5.8% 20.4% -7.0% 1.04 Pentair, Inc. PNR N USD 48.04 54 10,067 19.9x 20.3x 15.0x 2.2x - 2.5x 1.4x - - 11.5x - - 8.9x 2.3x 0.9x 1.8% -0.9% 8.2% 11.6% 23.7% 44.3% 47.3% -1.8% 1.04 Average 18.0x 19.2x 16.8x 17.5x 15.5x 1.0x 2.1x 2.2x 13.3x 13.2x 12.3x 10.2x 9.9x 8.9x 3.3x 3.1x 1.4% 0.8% 4.6% 4.2% 17.1% 22.9% 30.5% -5.5% 1.21 10 December 201 10 December

Source: Company data, Credit Suisse estimates 3 8 2

i-Spy Exhibit 17: Americas Valuation & Performance (contd)

US Industrial Distribution $USD PE/G YIELD Name Ticker Rating CCY 12/10/2012 TP MktCp 11 12E 13E 5Y FY1 5Y FY2 11 11 12E 13E 11 12E 13E 11 12E 13E 11 12E DIV 1-WK 1-MO 3-MO 6-MO YTD VS LO VS HI BETA Anixter International AXE U USD 61.71 60 1,990 10.7x 11.3x 9.7x 12.1x 10.4x 0.6x 0.4x 0.4x 0.4x 7.1x 7.2x 5.9x 6.5x 6.6x 5.4x 2.0x 2.0x 0.0% 1.0% 3.6% -1.0% 15.9% 3.5% 24.0% -15.9% 1.45 Fastenal Co FAST N USD 42.12 50 12,481 34.8x 29.6x 26.3x 28.0x 24.0x ------2.0% 0.7% -0.4% -1.0% 8.5% -3.4% 9.8% -22.9% 0.93 MSC Industrial Direct Co. MSM N USD 70.30 77 4,411 20.3x 17.0x 15.9x 18.7x 16.5x 0.6x 2.1x 1.8x 1.7x 12.3x 10.3x 9.3x - 9.5x 8.7x 4.5x 3.7x 1.7% -3.2% -0.6% -2.3% 8.3% -1.7% 13.6% -16.6% 1.07 Wesco International WCC NA USD 64.51 2,822 16.3x 13.6x 11.6x 12.0x 10.4x 0.5x 0.6x 0.5x 0.4x 10.2x 8.1x 6.5x 9.3x 7.5x 6.1x 2.3x 1.8x 0.0% -0.2% 3.1% 6.2% 19.5% 21.7% 32.7% -4.6% 1.86 WW Grainger Inc. GWW OLocal USD Price 191.09 230 13,280 21.1xP/E 18.2x 16.5xAVG P/E 17.3x 15.5x 0.9xEV/SALES 1.7x 1.5x 1.4xEV/EBIT 12.8x 10.7x 9.5xEV/EBITDA - 9.6x 8.5xP/B 4.9x 4.4x 1.7% -1.5% -1.8% -6.2%Performance 7.8% 2.1% 7.9% -13.1% 0.93 Average 20.7x 17.9x 16.0x 17.6x 15.3x 0.6x 1.2x 1.0x 1.0x 10.6x 9.1x 7.8x 7.9x 8.3x 7.2x 3.4x 3.0x 1.1% -0.6% 0.8% -0.8% 12.0% 4.4% 17.6% -14.6% 1.25

US Machinery $USD PE/G YIELD Name Ticker Rating CCY 12/10/2012 TP MktCp 11 12E 13E 5Y FY1 5Y FY2 11 11 12E 13E 11 12E 13E 11 12E 11 12E DIV 1-WK 1-MO 3-MO 6-MO YTD VS LO VS HI BETA AGCO Corp AGCO N USD 46.60 54 4,520 10.4x 9.0x 8.6x 14.7x 12.1x 0.2x 0.6x 0.5x 0.4x 8.6x 7.0x 5.8x 6.6x 5.3x 4.4x 1.5x 1.3x 0.0% 1.0% 5.1% 5.1% 16.1% 8.4% 20.9% -13.3% 1.95 Babcock & Wilcox BWC N USD 25.03 29 2,979 17.5x 14.9x 12.5x - - 1.3x 0.9x 0.9x 0.8x 10.9x 9.6x 7.6x 8.3x 7.8x 6.1x 3.5x 2.7x 1.3% -0.6% 7.1% -0.7% 6.0% 3.7% 19.5% -9.7% - Caterpillar Inc. CAT O USD 86.99 108 56,761 11.8x 9.4x 10.1x 17.2x 13.5x 0.3x 1.5x 1.3x 1.3x 12.9x 9.6x 10.1x 8.6x 7.0x 7.4x 4.5x 3.3x 2.4% 2.1% 2.4% -1.8% 2.0% -4.0% 9.2% -25.1% 1.75 Cummins Inc. CMI O USD 101.69 110 19,543 11.2x 12.2x 11.8x 16.1x 13.0x 0.4x 1.0x 1.0x 1.0x 7.2x 7.8x 7.4x 6.4x 6.8x 6.4x 3.4x 2.7x 2.0% 3.6% 4.7% 3.5% 8.6% 15.5% 21.7% -20.6% 1.78 Deere & Co. DE OLocal USD Price 85.43 90 33,460 12.9xP/E 11.2x 10.4xAVG P/E 13.9x 12.2x 0.5xEV/SALES 1.1x 1.0x 0.9xEV/EBIT 8.7x 7.8x 7.1xEV/EBITDA 6.8x 6.2x 5.7xP/B - 5.0x 2.2% 1.6% 1.4% 9.2%Performance 16.6% 10.4% 21.0% -4.1% 1.62 Douglas Dynamics Inc. PLOW O USD 13.69 15 303 15.6x 23.0x 17.3x - - - 1.8x 2.2x 1.9x 9.6x 13.1x 10.4x 8.0x 10.2x 8.2x 1.8x 6.0% -4.8% 2.2% -7.2% 6.6% -6.4% 9.0% -12.5% 0.82 Eaton Corporation ETN N USD 52.47 51 24,415 13.2x 12.6x 12.3x 14.4x 11.6x 0.6x 1.7x 1.7x 1.6x 11.9x 11.5x 10.6x - - 10.3x 2.4x 2.1x 2.9% 0.6% 7.0% 10.2% 33.6% 20.5% 41.7% -0.1% 1.41 Illinois Tool Works, Inc. ITW N USD 61.17 60 28,349 16.3x 14.9x 13.6x 16.1x 13.6x 0.9x 1.8x 1.7x 1.6x 11.4x 10.5x 9.6x 9.2x 8.5x 7.8x 3.0x 2.6x 2.5% -0.6% 1.2% 1.4% 12.2% 31.0% 34.1% -2.8% 1.10 Joy global JOYG NA USD 57.43 6,081 9.7x 8.1x 8.5x 13.8x 12.8x 1.5x 1.6x 1.3x 1.4x 11.6x 6.1x 5.7x 10.7x 5.4x 5.0x - - 1.2% 0.8% -0.2% 1.7% 4.6% -23.4% 17.8% -40.0% 1.93 Manitowoc MTW NA USD 14.93 1,978 39.3x 20.4x 11.3x 29.3x 14.2x 0.5x 1.0x 1.0x 0.9x 13.4x 13.9x 10.2x 8.7x 9.7x 7.6x - - 1.6% -0.5% 10.6% 6.1% 48.3% 62.5% 78.8% -10.7% 1.50 MasTec, Inc. MTZ NA USD 23.79 1,807 22.2x 15.9x 12.6x 13.3x 11.1x - - - - 10.2x 7.9x 6.0x 7.2x 5.8x 4.5x - - 0.0% 4.2% 4.6% 25.1% 49.6% 37.0% 70.8% -1.0% 1.26 Oshkosh Corporation OSK N USD 27.95 32 2,559 9.1x 12.1x 11.9x 8.6x 9.1x -0.2x 0.4x 0.4x 0.4x 6.2x 7.7x 7.6x 4.8x 5.8x 5.4x 1.6x 1.4x 0.5% -4.8% -1.5% 4.5% 38.5% 30.7% 49.5% -11.0% 2.43 Paccar Inc PCAR N USD 43.83 43 15,473 15.3x 13.7x 12.1x 37.9x 17.2x 0.3x 0.8x 0.8x 0.7x 10.2x 9.3x 7.9x 8.1x 7.9x 5.4x 3.0x 2.5x 0.0% -0.3% 1.9% 5.1% 13.3% 17.0% 23.5% -8.2% 2.14 Parker Hannifin Corporation PH O USD 83.81 87 12,507 13.2x 11.3x 13.3x 14.9x 12.5x 0.3x 1.1x 1.0x 1.1x 8.2x 7.4x 8.1x 6.8x 6.3x 6.8x 2.6x 2.6x 1.8% 2.0% 6.0% -0.7% 6.2% 9.9% 16.7% -7.6% 1.35 Rush Enterprises, Inc. RUSHA O USD 19.95 22 557 14.1x 12.9x 10.9x 22.8x 12.2x 0.3x 0.3x 0.2x 0.2x 7.0x 5.8x 5.1x 5.8x 4.8x 4.2x 1.5x 1.3x 0.0% 4.2% 2.4% 9.1% 24.7% -4.6% 41.3% -18.3% 1.45 Terex Corporation TEX O USD 24.86 32 2,747 - 12.4x 9.4x 16.2x 8.3x - 0.7x 0.5x 0.4x - 7.9x 6.2x - 6.1x 4.8x 1.3x 1.2x 2.0% 2.8% 10.7% 8.2% 47.6% 84.0% 101.8% -5.9% 1.31 United Rentals URI NA USD 42.70 4,002 22.8x 12.5x 8.8x 19.7x 15.6x - 2.7x 1.7x 1.4x 10.8x 12.6x 6.8x 5.2x 6.5x 3.6x - - 0.0% 2.8% 7.6% 15.2% 34.8% 44.5% 65.8% -8.8% 2.02 Wabco Holdings WBC NA USD 59.77 3,776 12.6x 13.8x 12.4x 17.3x 12.5x - 1.3x 1.5x 1.5x 7.8x 10.2x 9.9x 6.4x 8.4x 7.9x - - 0.0% -3.7% 2.7% -1.2% 18.4% 37.7% 51.9% -5.2% 2.20 Average 15.7x 13.3x 11.5x 17.9x 12.6x 0.5x 1.2x 1.1x 1.0x 9.8x 9.2x 7.9x 7.4x 7.0x 6.2x 2.5x 2.4x 1.5% 0.6% 4.2% 5.2% 21.5% 20.8% 38.6% -11.4% 1.65

US Transports $USD PE/G YIELD Name Ticker Rating CCY 12/10/2012 TP MktCp 11 12E 13E 5Y FY1 5Y FY2 11 11 12E 13E 11 12E 13E 11 12E 13E 11 12E DIV 1-WK 1-MO 3-MO 6-MO YTD VS LO VS HI BETA Canadian National CNI N USD 91.52 90 39,502 18.6x 16.2x 14.7x 14.7x 13.0x 1.2x - - - 13.8x 12.3x 11.5x 10.9x 9.8x 9.2x 3.8x 3.4x 1.7% 1.9% 6.1% -2.0% 12.8% 16.5% 26.5% -2.8% 0.97 Canadian Pacific Railways CP N USD 98.73 107 17,095 29.2x 22.5x 17.2x 15.9x 13.1x ------12.4x - - 9.2x 3.6x 3.1x 1.4% 5.8% 9.9% 16.3% 38.8% 45.9% 60.7% -1.5% 1.25 CH Robinson CHRW N USD 60.60 63 9,768 23.1x 22.0x 20.5x 25.6x 22.5x 2.7x 0.9x 0.8x 0.8x 13.6x 13.2x 11.9x - - - - - 2.3% -1.8% -1.4% 5.4% 5.8% -13.2% 16.0% -14.3% 0.78 Con-Way CNW O USD 27.58 34 1,544 17.8x 14.7x 11.5x 29.3x 14.2x - 0.4x 0.3x 0.3x 9.1x 8.1x 6.7x 4.6x 4.2x 3.8x 2.0x 1.8x 1.5% -1.8% -0.4% -9.9% -18.6% -5.4% 4.2% -26.9% 1.57 CSX Corporation CSX OLocal USD Price 19.91 26 20,535 11.9xP/E 11.3x 10.6xAVG P/E 14.0x 12.1x 0.9xEV/SALES 2.4x 2.5x 2.3xEV/EBIT 8.3x 8.3x 7.8xEV/EBITDA 6.5x 6.4x 6.0x P/B 2.6x 2.3x 2.8% 0.8% 0.2% -12.1%Performance -8.4% -5.5% 4.7% -15.9% 1.23 Echo Global Logistics ECHO O USD 17.67 23 409 32.9x 27.0x 19.9x 31.8x 19.2x 1.1x 0.6x 0.5x 0.4x - - 10.4x - 10.9x 8.0x 3.3x 2.9x 0.0% 0.6% 9.3% 0.2% -2.4% 9.4% 12.2% -9.3% 0.80 Expeditors International EXPD N USD 37.35 42 7,805 20.8x 23.0x 20.4x 27.1x 23.6x - 1.1x 1.1x 1.0x 10.5x 11.6x 9.9x 9.9x 10.8x 9.2x 4.0x 3.7x 1.5% -0.2% 1.7% -3.8% -3.9% -8.8% 8.7% -20.5% 0.91 FedEx Corporation FDX N USD 89.36 95 28,067 18.1x 13.6x 13.9x 16.6x 13.7x 0.6x 0.7x 0.6x 0.6x 11.5x 8.4x 8.1x 6.3x 5.1x 4.8x 1.9x 1.9x 0.6% -0.2% -0.4% 0.7% 3.7% 7.0% 15.6% -7.9% 1.13 Genesee & Wyoming, Inc. GWR O USD 72.60 84 2,527 26.1x 25.0x 16.9x 20.7x 17.0x 1.2x - - - - - 14.8x - - - 3.2x 2.2x 0.0% -0.5% 3.6% 9.3% 42.6% 19.8% 51.0% -2.3% 1.22 JB Hunt Transport Services JBHT N USD 58.47 61 6,915 27.4x 22.7x 19.7x 22.1x 18.2x 1.0x 1.7x 1.5x 1.3x - 14.1x 12.1x - 9.9x 8.6x - - 1.0% -1.6% -0.3% 12.7% 2.9% 29.7% 37.0% -3.5% 1.04 Kansas City Southern KSU O USD 79.78 100 8,779 27.9x 24.4x 18.6x 23.8x 17.3x 1.1x - - - - 14.2x 12.2x - - 9.6x 2.9x 2.6x 1.0% 2.1% 3.7% -1.1% 19.6% 17.3% 28.9% -4.6% 1.27 Knight Transportation KNX U USD 14.44 14 1,151 19.4x 17.3x 16.1x 23.7x 19.7x 2.1x 1.4x 1.2x 1.1x 12.0x 10.8x 9.2x 6.8x 6.0x 5.2x 2.5x 2.2x 1.7% -3.9% -3.6% -3.9% -13.8% -7.7% 3.1% -21.0% 0.79 Landstar System LSTR O USD 49.00 61 2,277 20.6x 18.1x 16.3x 21.2x 18.4x 0.9x 0.9x 0.8x 0.7x 13.0x 11.0x 9.6x - 9.7x 8.5x - - 0.5% -3.1% -1.8% 0.7% -4.1% 2.3% 6.8% -16.7% 1.01 Norfolk Southern NSC O USD 61.51 70 19,440 11.4x 11.8x 12.1x 14.0x 12.1x 0.8x 2.4x 2.5x 2.5x 8.3x 8.8x 9.3x 6.5x 6.8x 7.1x 2.2x 2.0x 3.3% 1.9% 6.1% -16.3% -8.4% -15.6% 9.2% -21.4% 1.10 Old Dominion Freight Line ODFL O USD 33.33 39 2,872 20.5x 16.7x 14.9x 20.0x 15.5x 0.4x 1.6x 1.5x 1.3x 13.1x 10.7x 9.3x 9.4x 7.7x 6.8x 3.3x 2.8x 0.0% -0.3% -1.0% 5.7% 19.3% 23.4% 31.7% -4.4% 1.08 RailAmerica Inc. RA N USD 27.50 25 1,386 29.5x 20.8x 18.0x 24.1x 16.7x 0.7x - - 2.8x - 13.5x 11.8x - 10.2x 9.0x 2.1x 2.0x 0.0% 0.1% 0.0% 0.1% 22.0% 84.7% 106.9% 0.0% 0.97 Union Pacific UNP O USD 123.95 150 58,306 18.4x 15.1x 13.3x 15.3x 13.0x 0.9x - - 2.9x 11.5x 9.8x 8.8x 9.0x 7.8x 7.0x 3.3x 2.9x 2.2% 1.0% 3.1% -0.2% 10.4% 17.0% 25.9% -3.5% 1.12 United Parcel Service UPS O USD 73.17 92 69,805 17.2x 16.1x 14.6x 18.4x 15.9x 1.3x 1.5x 1.4x 1.3x 11.6x 12.0x 9.7x 9.2x 9.2x 7.8x - - 3.1% 0.1% 1.3% -0.5% -4.1% 0.0% 4.5% -9.8% 0.83 Werner Enterprises WERN N USD 21.53 25 1,569

15.3x 15.3x 13.7x 20.1x 16.6x 1.2x 0.8x 0.8x 0.7x 9.0x 8.9x 7.4x 4.7x 4.5x 3.9x 2.2x 1.9x 0.9% -0.7% -5.7% -7.6% -9.3% -10.7% 2.2% -17.6% 0.76 Average 21.5x 18.7x 21.3x 16.6x 1.1x 1.3x 1.2x 1.3x 11.0x 10.9x 10.1x 7.3x 7.8x 7.2x 2.8x 2.5x 1.3% -0.1% 1.3% -0.2% 5.1% 10.5% 23.8% -11.2% 1.05 10 December 201 10 December

Source: Company data, Credit Suisse estimates

3 9 2

i-Spy

EMEA Capital Goods Valuation Summary

Exhibit 18: EMEA Valuation & Performance European Aerospace & Defense $USD PE/G YIELD Name Rating CCY 12/10/2012 TP MktCp 11 12E 13E 5Y FY1 5Y FY2 11 11 12E 11 12E 11 12E 11 12E DIV 1-WK 1-MO 3-MO 6-MO YTD VS LO VS HI BETA BAE Systems NR GBpLocal 338.40Price 17,621 7.5xP/E 8.4x 8.4xAVG 9.0x P/E 8.5x -1.5xEV/SALES 0.8x 0.8xEV/EBIT 8.5x 8.2xEV/EBITDA 6.7x 6.4x -P/B - 5.6% 3.4% 9.5% 3.0%Performance 22.4% 18.7% 25.9% -6.9% 0.67 Cobham U GBp 213.50 170 3,689 9.7x 9.7x 10.5x 11.8x 10.9x 1.6x 1.4x 1.6x 9.7x 12.4x 5.9x 7.2x 4.0% 0.7% 1.2% -2.7% -7.8% 16.4% 26.7% -10.9% 0.87 EADS NR EUR 29.80 31,790 22.7x 15.8x 11.5x 19.1x 12.4x 0.4x 0.4x 0.4x 10.1x 7.9x 5.6x 4.8x - - 1.5% 15.1% 13.2% 0.4% 12.1% 23.4% 35.2% -4.5% 0.82 Finmeccanica NR EUR 4.09 3,052 - 9.4x 5.8x 8.0x 7.7x - 0.4x 0.4x 7.0x 5.5x 4.0x 3.4x - - 0.0% 1.2% 5.5% 8.5% 51.1% 43.2% 56.2% -6.4% 1.07 Meggitt N GBp 385.40 400 4,847 12.1x 11.1x 10.3x 10.7x 9.7x 1.0x 2.6x 2.3x 10.6x 9.4x 8.9x 7.8x 1.7x 1.5x 2.8% -1.0% 3.7% -5.2% 4.3% 9.2% 14.3% -7.1% 1.32 MTU Aero Engines O EUR 68.82 70 4,616 17.1x 14.7x 12.3x 11.4x 10.4x 1.4x 1.2x 1.1x 11.1x 9.7x 7.9x 7.0x 3.7x 2.5x 1.7% 0.6% 5.5% 15.5% 18.1% 39.2% 47.9% -0.1% 0.80 QinetiQ NR GBp 196.00 2,074 14.0x 13.5x 11.9x 10.7x 9.9x - 1.0x 1.0x 9.1x 10.8x 7.1x 8.3x - - 1.6% -1.0% -2.1% 13.6% 26.5% 47.8% 51.7% -4.0% 0.66 Rolls-Royce N GBp 896.50 26,890 18.7x 16.0x 14.2x 12.7x 11.7x 1.1x 1.3x 1.0x 10.9x 9.1x 8.8x 7.4x 3.7x 2.7x 0.0% 0.7% 2.2% 8.9% 8.8% 22.8% 29.5% -1.9% - Safran O EUR 32.25 17,345 20.2x 16.1x 13.6x 14.5x 11.8x 0.7x 1.1x 1.0x 9.6x 8.1x 7.1x 6.2x 2.9x 2.8x 1.9% 2.4% 6.4% 14.8% 20.8% 39.0% 50.4% 0.0% 0.89 Thales NR EUR 27.90 7,281 11.3x 10.3x 8.8x 13.0x 9.6x 0.8x 0.4x 0.3x 6.2x 5.0x 3.9x 3.3x - - 2.8% 0.9% 4.4% 2.7% 18.3% 14.3% 28.6% -2.8% 0.66 Ultra Electronics NA GBp 1636.00 1,816 13.7x 13.4x 13.0x 14.6x 13.3x - 1.5x 1.4x 10.0x 9.2x 8.7x 8.0x - - 2.4% 0.3% -2.3% 3.6% 0.4% 10.7% 16.9% -8.1% 0.58 Average 14.7x 12.6x 11.0x 12.3x 10.5x 0.7x 1.1x 1.0x 9.3x 8.7x 6.8x 6.4x 3.0x 2.4x 2.2% 2.1% 4.3% 5.7% 15.9% 25.9% 34.9% -4.8% 0.83

European Automotive $USD PE/G YIELD Name Rating CCY 12/10/2012 TP MktCp 11 12E 13E 5Y FY1 5Y FY2 11 11 12E 11 12E 11 12E 11 12E DIV 1-WK 1-MO 3-MO 6-MO YTD VS LO VS HI BETA Autoliv Inc U USDLocal Price 61.34 55 5,855 9.2xP/E 9.9x 9.8xAVG 13.0x P/E 11.4x -EV/SALES 0.7x 0.7x EV/EBIT 6.5x 6.8xEV/EBITDA 5.0x 5.1x 1.6x P/B 1.5x 0.3% 1.6% 8.2% -1.8%Performance 16.7% 14.7% 27.2% -11.2% 1.87 BMW O EUR 69.03 80 56,862 8.9x 8.7x 8.3x - 11.0x 0.4x 0.5x 0.4x 4.1x 3.6x 2.8x 2.5x 1.7x 1.2x 3.3% 1.0% 7.6% 16.2% 19.3% 33.9% 38.3% -6.0% 1.18 Continental O EUR 85.57 90 22,076 11.0x8.4x8.1x8.9x8.9x0.2x0.8x0.7x9.3x7.4x5.7x4.6x2.4x2.1x1.8%0.6%11.9%6.0%29.3%77.9%84.4%-0.4%1.42 Daimler N EUR 38.80 35 53,412 7.3x 8.4x 8.9x 10.3x 10.9x 2.0x 0.3x 0.3x 3.4x 3.9x 2.4x 2.6x 1.0x 0.9x 5.7% 2.2% 7.3% -1.4% 13.2% 14.4% 23.8% -19.9% 1.54 Fiat U EUR 3.61 4 6,344 3.5x 13.4x 5.6x 9.3x 6.1x -0.2x 0.3x 0.2x 4.7x 4.4x 2.3x 1.9x 0.5x 0.5x 0.0% 1.5% 3.6% -22.4% 3.8% 1.8% 9.1% -25.4% 1.35 MAN N EUR 81.88 96 14,889 17.7x - 17.8x 15.8x 12.6x -0.4x 0.8x 0.9x 10.4x - 5.5x - 2.2x 2.2x 2.8% 1.3% 2.8% 11.4% 0.2% 19.2% 35.5% -20.1% 1.44 Michelin O EUR 70.90 70 16,645 8.7x 8.6x 7.8x 13.7x 8.8x 0.9x 0.9x 0.9x 9.8x 8.2x 6.6x 5.8x 1.6x 1.4x 3.0% -0.9% 8.0% 16.3% 52.8% 55.2% 65.9% -0.9% 1.25 Porsche O EUR 56.50 89 27,126 8.2x 7.5x 5.5x 8.5x 7.1x - - - - - 0.3x 0.3x 1.3% -0.9% 12.3% 33.6% 37.6% 37.4% 48.7% -0.9% 1.46 PSA Peugot Citroen U EUR 4.53 6 2,073 1.7x - 6.3x 7.4x - - 0.1x 0.1x 4.8x - 1.4x 1.7x 0.1x 0.1x 0.0% -4.0% 2.4% -29.8% -39.6% -57.1% 3.0% -68.2% 1.24 Renault N EUR 38.42 50 14,653 5.0x 5.5x 4.4x 8.2x 7.9x -0.2x 0.3x 0.3x 10.9x - 3.3x 4.0x 0.4x 0.4x 3.0% -0.1% 12.2% 0.1% 24.0% 43.3% 52.4% -10.7% 2.10 Scania U SEK 138.20 115 8,264 14.4x 21.3x 16.4x 22.1x 13.5x -0.9x 0.5x 0.5x 4.2x 5.6x 3.4x 4.1x 3.2x 2.9x 3.6% 0.1% 6.6% 13.3% 18.4% 35.5% 44.8% -2.0% 1.35 Volkswagen O EUR 166.70 195 96,307 5.0x 3.4x 5.7x 10.8x 8.6x 0.1x 0.3x 0.3x 4.3x 5.2x 2.2x 2.9x 1.3x 1.3x 1.8% -0.1% 7.9% 16.5% 36.8% 44.8% 44.8% -0.1% 1.32 Volvo U SEK 95.15 75 27,387 10.9x 14.3x 14.4x 11.8x 16.7x 1.0x 0.8x 0.8x 8.9x 11.1x 6.2x 7.3x 2.3x 2.1x 3.2% 1.0% 5.9% 4.9% 22.5% 26.4% 36.0% -4.8% 1.68 Average 8.6x 9.9x 9.2x 11.7x 10.3x 0.3x 0.5x 0.5x 6.8x 6.2x 3.9x 3.9x 1.4x 1.3x 2.3% 0.3% 7.4% 4.8% 18.1% 26.7% 39.5% -13.1% 1.47

European Electrical/Electronics $USD PE/G YIELD Name Rating CCY 12/10/2012 TP MktCp 11 12E 13E 5Y FY1 5Y FY2 11 11 12E 11 12E 11 12E 11 12E DIV 1-WK 1-MO 3-MO 6-MO YTD VS LO VS HI BETA ABB NA CHFLocal Price 18.58 - 45,968 13.2xP/E 14.2x 13.2xAVG 14.8x P/E 13.9x 1.8xEV/SALES 1.2x 1.1xEV/EBIT 9.0x 9.3xEV/EBITDA 7.5x 7.7x 2.9xP/B 2.6x 3.5% 2.9% 6.8% 4.6%Performance 20.3% 5.1% 25.3% -7.7% 1.59 Alstom N EUR 29.78 27 11,829 9.4x 9.4x 9.6x 12.3x 11.1x -0.7x 0.6x 0.7x - 12.6x 8.5x 8.0x 2.2x 2.0x 2.7% 6.4% 5.4% 1.1% 27.8% 27.1% 35.3% -9.3% 1.26 Eltek NA NOK 3.88 225 7.1x 6.5x - 14.0x 13.1x 0.2x 0.5x 0.5x 7.3x 6.0x 4.9x 4.1x 1.1x 1.0x 2.9% 10.9% 3.5% -2.3% 16.2% 19.4% 29.3% -12.6% 0.83 Legrand SA U EUR 31.60 25 10,736 15.9x 15.9x 15.6x 14.0x 13.1x 2.0x 2.3x 2.2x 11.4x 11.3x 9.6x 9.7x 2.9x 2.7x 2.9% 1.5% 8.9% 9.5% 28.4% 27.2% 37.6% 0.0% 0.83 Philips N EUR 20.15 19 23,852 18.3x 13.7x 12.7x 15.5x 11.7x -2.1x 0.9x 0.8x - 14.2x 8.3x 7.0x 1.5x 1.5x 0.9% 1.4% 0.4% 6.0% 41.1% 23.7% 46.4% -0.3% 0.97 Schneider N EUR 53.98 51 38,563 14.8x 14.2x 13.4x 13.0x 11.6x - 1.6x 1.5x 12.7x 12.2x 10.0x 9.5x 1.8x 1.7x 3.2% -0.1% 7.8% 6.0% 29.5% 32.7% 44.8% -0.2% 1.11 Siemens O EUR 80.70 90 91,708 11.0x 10.4x 11.3x 12.5x 11.1x 1.9x 1.1x 1.1x 8.8x 11.4x 6.8x 8.3x 2.2x 2.3x 3.7% 1.8% 1.3% 2.9% 24.4% 9.1% 28.0% 0.0% 1.15 Average 12.8x 12.0x 12.6x 13.7x 12.2x 0.5x 1.2x 1.1x 9.9x 11.0x 7.9x 7.8x 2.1x 2.0x 2.8% 3.5% 4.8% 4.0% 26.8% 20.6% 35.2% -4.3% 1.11

European Mechanical $USD PE/G YIELD Name Rating CCY 12/10/2012 TP MktCp 11 12E 13E 5Y FY1 5Y FY2 11 11 12E 11 12E 11 12E 11 12E DIV 1-WK 1-MO 3-MO 6-MO YTD VS LO VS HI BETA Alfa Laval N SEKLocal 131.70Price 135 8,258 14.5xP/E 15.4x 15.2xAVG 13.4x P/E 13.1x - EV/SALES 2.0x 1.9x 12.0xEV/EBIT 12.4xEV/EBITDA 10.2x 10.1x 3.7x P/B 3.3x 2.5% 0.7% 13.3% 11.5%Performance 13.9% 1.0% 19.2% -10.0% 1.01 Assa Abloy O SEK 241.00 240 13,573 17.0x 17.0x 15.2x 13.3x 12.2x 1.2x 2.5x 2.2x - 13.6x - - 3.8x 3.3x 1.9% 0.1% 6.7% 16.0% 31.4% 39.6% 50.9% 0.0% 0.92 Atlas Copco O SEK 175.80 200 30,830 16.8x 15.1x 14.6x 14.6x 13.5x 0.9x 2.7x 2.4x 12.5x 11.0x 10.9x 9.9x - - 2.8% 2.6% 7.8% 13.7% 25.0% 18.8% 27.2% 0.0% 1.20 Electrolux O SEK 173.70 200 7,414 16.9x 13.3x 10.3x 12.6x 10.2x -1.2x 0.6x 0.5x 14.4x 10.0x 7.9x 6.1x 2.4x 2.3x 3.7% -0.2% 4.6% 4.2% 36.6% 58.3% 67.0% -2.1% 1.08 Kone Corporation U EUR 59.40 47 19,801 26.2x 22.7x 20.6x 16.6x 15.7x 2.2x 2.8x 2.3x ------4.9% 3.1% 5.7% 15.0% 35.5% 48.1% 55.7% 0.0% 0.65 Metso O EUR 29.81 35 5,761 10.7x 10.2x 10.0x 12.4x 11.7x 0.5x 0.7x 0.7x 8.2x 8.0x 6.3x 6.1x 2.1x 2.0x 5.7% 3.1% 10.9% 2.1% 13.6% 4.0% 19.1% -19.2% 1.28 Sandvik U SEK 101.90 80 19,109 12.9x 13.4x 12.3x 11.1x 13.9x 0.7x 1.6x 1.5x 11.4x 10.2x 7.9x 7.7x 3.7x 3.2x 3.2% 2.5% 9.7% 9.2% 18.6% 20.7% 30.1% -4.4% 1.38 SKF U SEK 160.70 130 10,937 12.1x 14.7x 13.9x 13.5x 11.4x - 1.2x 1.2x 8.5x 10.1x 7.2x 8.2x 3.4x 3.2x 3.4% 0.4% 4.7% 8.9% 20.6% 10.4% 25.4% -7.7% 1.12 Average

15.9x 15.2x 14.0x 13.4x 12.7x 0.7x 1.8x 1.6x 11.2x 10.7x 8.4x 8.0x 3.2x 2.9x 3.5% 1.5% 7.9% 10.1% 24.4% 25.1% 36.8% -5.4% 1.08

Source: Company data, Credit Suisse estimates 10 December 201 10 December 4 0 2

i-Spy Exhibit 19: EMEA Valuation & Performance (contd) European Wind Energy $USD PE/G YIELD Name Rating CCY 12/10/2012 TP MktCp 11 12E 13E 5Y FY1 5Y FY2 11 11 12E 11 12E 11 12E 11 12E DIV 1-WK 1-MO 3-MO 6-MO YTD VS LO VS HI BETA Gamesa N EUR 1.66 2 542 5.6x 13.2x 8.9x 20.4x 15.8x -0.1x 0.4x 0.2x 8.6x 8.2x 4.9x 3.5x 0.2x 0.2x 0.4% 0.3% -2.6% -4.3% 25.1% -46.9% 64.5% -49.1% 1.20 Vestas U DKKLocal Price 30.00 30 1,057 -P/E - -AVG - P/E - -EV/SALES 0.2x 0.2x EV/EBIT - -EV/EBITDA 4.5x 3.0x 0.3xP/B 0.3x 0.0% 9.0% 14.6% -31.5%Performance 0.6% -51.6% 24.6% -59.7% 1.14 Average 5.6x 13.2x 8.9x 20.4x 15.8x -0.1x 0.3x 0.2x 8.6x 8.2x 4.7x 3.2x 0.3x 0.3x 0.2% 4.6% 6.0% -17.9% 12.9% -49.2% 44.6% -54.4% 1.17

European Industrial Machinery $USD PE/G YIELD Name Rating CCY 12/10/2012 TP MktCp 11 12E 5Y FY1 5Y FY2 11 11 12E 11 12E 11 12E 11 12E DIV 1-WK 1-MO 3-MO 6-MO YTD VS LO VS HI BETA Demag Cranes NR EUR 51.20 1,398 - - - 15.6x 12.1x - 0.9x 0.8x 10.2x 8.4x 8.6x 7.2x 3.4x 2.9x 6.3% 1.5% #NULL! #NULL! #NULL! #NULL! 4.7% -6.1% 0.81 Deutz NR EURLocal Price 3.16 493 5.5x 15.1x 9.9xAVG 23.8x P/E 9.3x -0.6x 0.4x 0.4x 12.8x 10.2x 4.9x 4.2x 0.8x 0.7x 0.0% 0.7% 3.3% -9.7%Performance -27.3% -23.1% 6.9% -44.8% 1.36 Fiat Industrial O EUR 8.24 12 14,232 16.3x 11.6x 7.3x - - 0.3x 0.5x 0.5x 7.4x 6.5x 5.3x 4.3x 2.2x 1.9x 2.3% 0.2% -0.5% 1.4% 13.3% 38.6% -6.2% - GEA Group NR EUR 25.08 6,226 13.6x 12.3x - 13.7x 11.5x 2.6x 1.0x 0.9x 10.6x 9.1x 8.5x 7.4x 2.0x 1.8x 2.2% -0.2% 5.0% 6.8% 22.7% 14.8% 27.4% -4.6% 1.34 Kloeckner & Co O EUR 9.14 10 1,176 -10.0x 91.6x - 11.2x 11.3x 0.4x 0.2x 0.2x -53.9x 16.6x 14.8x 7.3x 0.5x 0.5x 0.0% 12.9% 16.3% 14.1% 22.6% -7.9% 38.9% -24.5% 1.64 Rheinmetall NR EUR 35.49 1,813 7.4x 7.2x - 9.0x 8.9x -1.7x 0.5x 0.4x 7.6x 6.9x 4.5x 4.2x 0.9x 0.8x 5.1% -0.1% 6.7% -10.9% 8.2% 3.6% 12.6% -24.8% 1.37 Tognum NR EUR 26.45 4,482 ---13.3x11.1x------2.7%1.1% 2.4%-0.2%0.89 Vossloh NR EUR 74.90 1,287 16.6x 14.8x - 13.6x 12.4x 1.9x 0.9x 0.9x 11.6x 10.7x 8.1x 7.5x 1.9x 1.7x 3.4% 1.4% -0.5% 4.3% 12.3% 1.1% 17.1% -7.3% 0.54 Wincor Nixdorf NR EUR 34.60 1,477 12.6x 10.5x - 12.5x 11.3x 0.5x 0.5x 0.5x 9.7x 7.8x 6.4x 5.5x 2.8x 2.5x 3.0% 6.8% 6.7% 6.3% 28.1% 0.2% 30.2% -16.7% 1.07 Average 8.9x 23.3x 8.6x 14.1x 11.0x 0.5x 0.6x 0.6x 2.0x 9.5x 7.6x 5.9x 1.8x 1.6x 2.8% 2.7% 5.3% 1.8% 11.4% -1.9% 19.9% -15.0% 1.13

MEA Industrials $USD PE/G YIELD Name Rating CCY 2/7/1900 TP MktCp 11 12E 13E 5Y FY1 5Y FY2 11 11 12E 11 12E 11 12E 11 12E DIV 1-WK 1-MO 3-MO 6-MO YTD VS LO VS HI BETA El Sewedy Electric NA 20.52 Local Price P/E AVG P/E EV/SALESEV/EBIT EV/EBITDA P/B Performance R: NOT COV 748 9.0x8.8x7.0x12.6x9.3x------4.9%-7.5%-20.2%-19.9%-6.8%-1.1%2.8%-25.7%1.10

Swiss Mid-cap Engineering $USD PE/G YIELD Name Rating CCY 12/10/2012 TP MktCp 11 12E 13E 5Y FY1 5Y FY2 11 11 12E 11 12E 11 12E 11 12E DIV 1-WK 1-MO 3-MO 6-MO YTD VS LO VS HI BETA Local Price P/EAVG P/E EV/SALES EV/EBIT EV/EBITDA P/B Performance Bucher Industries N CHF 177.00 170 1,939 12.5x 9.7x 10.2x 14.6x 12.2x 0.4x 0.8x 0.8x 10.6x 8.3x 7.8x 6.4x 2.2x 1.9x 2.3% 1.8% 1.4% 10.7% 16.5% 7.8% 22.7% -11.6% 1.85 Forbo O CHF 595.00 750 1,590 13.1x 14.8x 12.3x 10.6x 10.1x -1.3x 1.2x 0.9x 10.0x 8.9x 7.5x 6.4x 1.7x 1.4x 2.0% -0.4% 1.3% 6.6% -1.0% 20.7% 52.6% -11.2% 1.73 Geberit U CHF 198.20 185 7,862 20.2x18.9x17.1x16.3x15.6x----14.8x----3.2%1.2%3.8%-2.4%11.4%9.5%14.6%-5.5%1.10 Georg Fischer O CHF 359.75 460 1,577 8.5x 9.2x 9.2x 12.3x 8.6x 0.4x 0.5x 0.5x 7.4x 7.6x 4.7x 4.7x 1.3x 1.2x 4.2% 4.7% 9.5% -3.0% 14.7% 12.1% 19.6% -20.1% 2.02 KABA N CHF 384.25 400 1,567 15.5x 15.9x 15.3x 13.4x 12.1x - 1.6x 1.5x 12.5x 12.1x 9.9x 9.6x 3.2x 2.6x 2.3% 1.8% 5.0% 4.2% 11.7% 17.1% 20.5% -0.1% 1.05 Komax O CHF 67.65 94 246 5.8x 12.5x 12.9x 11.2x 19.8x - 0.6x 0.7x 4.7x 10.4x 4.1x 7.6x 0.9x 0.9x 5.9% 4.9% 3.8% -3.3% -8.6% -1.6% 10.4% -30.3% 1.83 OC Oerlikon O CHF 10.15 12 3,505 14.8x 13.7x 11.0x 8.0x 16.2x 0.2x 0.8x 0.8x 8.5x 7.2x 5.8x 5.4x 2.1x 1.7x 2.0% 2.3% 11.7% 13.7% 29.5% 101.8% 110.1% -1.9% 1.98 Rieter Holding N CHF 159.90 150 799 9.6x - 21.1x 19.4x 22.0x -0.2x 0.6x 0.8x 5.3x - 4.1x 9.2x 2.0x 2.0x 3.8% 4.0% 6.5% 4.5% 22.5% 13.3% 30.0% -19.2% 1.50 Schindler-Holding AG O CHF 131.40 140 16,739 22.6x 21.4x 19.1x 16.6x 15.3x - 1.7x 1.6x 14.7x 13.2x - - - 4.9x 1.5% 1.1% 6.0% 14.1% 22.2% 20.1% 27.0% 0.0% 0.71 Sika N CHF 2098.00 1980 4,824 22.1x 17.1x 15.1x 14.2x 12.6x - 1.0x 1.0x 13.7x 10.6x 10.0x 8.0x 2.9x 2.7x 2.1% 3.1% 6.7% 9.0% 12.3% 18.5% 28.0% -0.1% 1.35 Sulzer N CHF 144.00 120 5,273 18.4x 16.4x 15.1x 13.6x 12.9x 1.9x 1.5x 1.3x 14.5x 12.1x 10.9x 9.4x 2.4x 2.2x 2.1% 0.3% 5.4% 4.4% 29.3% 43.4% 54.9% -0.5% 1.95 Uster Technologies NA CHF 43.60 R: NOT COV 394 ---20.0x13.2x------5.7%0.2%0.0%-0.6%-0.2%5.8%7.1%-6.2%2.16 Winterthur Technologie NA CHF 61.05 383 ----19.7x------0.0%0.0%#NULL!#NULL!#NULL!#NULL!0.0%0.0%1.52 Average 14.8x 15.0x 14.4x 14.2x 14.6x 0.2x 1.0x 1.0x 10.2x 10.5x 7.2x 7.4x 2.1x 2.2x 2.9% 1.9% 5.1% 4.8% 13.3% 22.4% 30.6% -8.2% 1.60

UK Capital Goods $USD PE/G YIELD Local Price P/E AVG P/E EV/SALES EV/EBIT EV/EBITDA P/B Performance Name Rating CCY 12/10/2012 TP MktCp 11 12E 13E 5Y FY1 5Y FY2 11 11 12E 11 12E 11 12E 11 12E DIV 1-WK 1-MO 3-MO 6-MO YTD VS LO VS HI BETA Bodycote PLC O GBp 432.10 480 1,295 13.5x 12.2x 10.9x 22.7x 10.2x 0.3x 1.4x 1.4x 9.6x 8.7x 6.0x 5.6x 1.7x 1.6x 2.6% 4.7% 16.8% 9.5% 22.5% 64.4% 74.7% -1.1% 1.56 Charter International NA GBp 968.00 R: NOT COV 2,591 ---10.2x9.1x------2.4%2.5%#NULL!#NULL!#NULL!#NULL!4.4%0.0%1.60 Cookson Group N GBp 640.50 635 2,856 9.7x 10.0x 9.5x 13.2x 9.8x 1.6x 0.8x 0.8x 7.6x 7.3x 6.4x 6.0x 1.4x 1.3x 3.4% 4.5% 10.6% 5.9% 5.5% 25.8% 38.1% -14.3% 2.21 Fenner N GBp 387.00 345 1,202 13.9x 10.8x 11.8x 11.9x 10.4x 0.3x 1.2x 1.0x 10.3x 7.9x 7.8x 6.1x 2.6x 2.4x 2.7% 0.1% 7.7% 6.3% 14.2% -3.4% 17.5% -20.0% 1.43 GKN O GBp 223.40 255 5,839 9.3x 9.7x 8.1x 15.6x 8.7x 1.6x 0.7x 0.7x 8.8x 9.5x 6.1x 6.2x 2.8x 2.6x 2.9% 0.6% 8.4% 0.0% 22.5% 22.1% 31.3% -5.8% 1.95 Halma O GBp 450.50 455 2,726 22.0x 18.4x 17.0x 14.9x 13.8x 1.1x - 3.0x - - - - 4.8x 4.3x 2.2% 3.2% 7.4% 6.0% 19.1% 36.3% 37.1% 0.0% 0.76 IMI PLC U GBp 1090.00 860 5,614 13.6x 13.6x 13.2x 11.0x 10.1x 1.3x 1.7x 1.7x 10.6x 10.8x 8.6x 8.8x - - 2.8% 3.4% 14.9% 19.9% 29.1% 43.4% 53.3% 0.0% 1.37 Invensys N GBp 322.80 220 4,216 15.5x 17.9x 17.3x 12.5x 10.8x - 1.1x 1.0x 11.4x - 8.9x 10.9x - 3.7x 1.4% 2.3% 37.5% 29.5% 59.3% 53.0% 77.8% -1.6% 1.36 Laird U GBp 217.50 200 930 13.6x 11.7x 10.5x 10.6x 8.8x - 1.2x 1.3x - 13.1x 9.2x 8.5x 1.3x 1.2x 4.0% -2.3% -2.5% -5.9% 16.7% 41.1% 51.0% -10.8% 2.12 Melrose N GBp 224.10 220 4,547 9.1x 14.3x 13.1x 9.1x 8.2x -0.5x 2.7x 2.5x - - - - 1.6x 1.4x 1.7% 5.2% -9.4% -11.9% -1.1% 15.9% 22.2% -13.7% 1.40 Morgan Crucible N GBp 255.90 290 1,147 9.0x 9.3x 8.5x 10.3x 9.2x 0.4x 0.8x 0.8x 6.9x 6.9x 5.3x 5.3x 3.0x 2.6x 3.8% 5.0% -1.2% -8.3% -5.5% -2.7% 16.2% -28.9% 1.77 Rotork plc O GBp 2499.00 2430 3,474 25.7x22.8x21.1x18.2x16.9x1.7x------1.6%0.8%6.3%8.5%28.0%29.5%42.4%-0.8%1.00 Senior N GBp 199.50 210 1,322 14.2x 11.9x 11.5x 10.6x 10.1x 0.7x 1.4x 1.2x 10.9x 9.3x 8.6x 7.4x 2.9x 2.8x 2.0% 0.6% 1.2% -5.3% 6.4% 16.7% 22.6% -6.3% 1.68 Severfield N GBp 86.00 165 123 10.7x 11.4x 7.5x 13.6x 12.3x -0.6x 0.4x 0.3x 9.4x 9.8x 5.8x 5.0x 0.6x 0.6x 5.8% -3.1% -15.1% -40.6% -44.2% -48.3% 3.6% -60.8% 0.96 Smiths Group O GBp 1131.00 1200 7,121 13.2x 12.3x 11.7x 12.7x 11.5x 2.5x 1.9x 1.8x 11.9x 11.3x 9.1x 8.8x 3.2x 4.2x 3.4% 3.3% 7.3% 9.1% 13.9% 23.6% 28.3% 0.0% 0.69 Spectris O GBp 2030.00 2075 3,817 15.0x 15.2x 14.5x 12.6x 11.3x 0.6x 2.5x 2.2x - 13.4x - 10.9x 3.9x 3.5x 1.9% 5.6% 12.3% 13.2% 38.4% 57.5% 73.5% 0.0% 1.44 Spirax Sarco N GBp 2224.00 1950 2,781 17.3x 18.0x 17.3x 15.0x 14.0x - 2.7x 2.6x 13.2x 13.0x - - 4.3x 3.8x 2.3% 1.9% 4.6% 6.6% 11.2% 18.7% 27.2% -4.7% 0.81 Weir Group N GBp 1835.00 1815 6,247 13.1x 12.2x 12.6x 13.5x 12.9x 0.6x 2.0x 1.8x 11.6x 10.4x 10.1x 8.7x 3.5x 3.3x 1.8% -2.9% 4.8% 9.3% 31.4% -9.7% 31.4% -17.9% 1.37 Average 14.0x 13.7x 12.7x 13.2x 11.0x 0.8x 1.5x 1.5x 10.2x 10.1x 7.7x 7.6x 2.7x 2.6x 2.7% 2.0% 6.6% 3.0% 15.7% 22.6% 36.3% -10.4% 1.42 10 December 201 10 December

ource: Company data, Credit Suisse estimates

41 2

i-Spy

Asia Capital Goods Valuation Summary

Exhibit 20: Asia Valuation & Performance China Automotive Local Price $USD P/E AVG P/EPE/G EV/SALES EV/EBIT EV/EBITDA P/B YIELD Performance Name Rating CCY 12/10/2012 TP MktCp 11 12E 13E 5Y FY1 5Y FY2 11 11 12E 11 12E 11 12E 11 12E DIV 1-WK 1-MO 3-MO 6-MO YTD VS LO VS HI BETA Geely Automobile Holdings NA HKD 3.80 4,049 16.4x13.4x11.2x13.8x10.9x------0.8%5.6%5.6%51.4%33.8%123.5%130.3% -1.3% 1.70 Brilliance China Automotive Holding O HKD 9.20 5,966 20.6x15.5x11.9x11.1x10.0x0.5x------3.9x2.4%-1.0%4.7%23.7%19.9%9.8%46.3%-6.3%1.24 Dongfeng Motors Group O HKD 11.80 13,120 7.8x 9.2x 8.2x 11.2x 10.2x -0.5x 0.5x 0.5x 4.1x 5.1x 3.4x 3.6x 1.8x 1.6x 1.9% 10.3% 22.5% 18.5% -10.2% -11.4% 36.6% -24.7% 1.11 Weichai Power Co. NA HKD 32.65 7,914 9.7x13.6x11.6x11.5x10.4x------0.7%12.6%12.6%36.6%14.9%2.6%82.7%-14.3%1.31 Sinotruk (Hong Kong) NA HKD 5.52 1,967 12.7x27.9x16.8x15.8x13.7x------1.9%9.3%23.8%24.0%28.4%27.2%39.0%-4.8%1.45 Average 13.4x15.9x12.0x12.7x11.0x------1.5%7.4%13.8%30.8%17.4%30.3%67.0%-10.3%1.36

China Industrial Machinery Local Price $USD P/E AVG P/E PE/G EV/SALES EV/EBIT EV/EBITDA P/B YIELD Performance Name Rating CCY 12/10/2012 TP MktCp 11 12E 13E 5Y FY1 5Y FY2 11 11 12E 11 12E 11 12E 11 12E DIV 1-WK 1-MO 3-MO 6-MO YTD VS LO VS HI BETA Anhui Heli NA CNY 8.43 696 11.2x 11.7x 9.1x 21.1x 15.4x 1.1x 0.6x 0.5x 8.2x 5.9x 6.0x 4.4x 1.5x 1.3x 2.0% 9.2% 6.7% 2.7% -14.5% -0.6% 16.9% -20.6% 1.31 Changsha Zoomlion Heavy Industry U HKD 10.62 8.50 1,960 8.2x 8.0x 10.8x 16.0x 12.7x 0.4x 0.2x 0.2x 0.8x 0.9x 0.8x 0.9x 1.9x 1.6x 2.9% 9.3% 1.3% 23.2% 4.1% 27.0% 38.3% -13.2% 1.29 Guangxi Liugong Machinery U CNY 9.33 8.00 1,685 7.9x 18.4x 16.5x 15.1x 12.6x -0.2x 0.8x 1.1x 9.2x - 8.1x - 1.1x 1.1x 3.3% 18.0% 13.0% 1.0% -32.4% -20.1% 18.0% -37.0% 1.41 International Mining Machinery NA HKD 8.48 1,423 ---20.3x15.0x------0.8%0.0% 3.5%-0.9%- Lonking Holdings Ltd. O HKD 2.15 1.80 1,187 4.3x 14.7x 9.6x 11.6x 10.0x -0.1x 0.9x 1.2x 5.4x 9.9x 4.7x 7.3x 1.2x 1.1x 4.3% 16.8% 13.8% 65.4% 6.4% -17.9% 112.9% -38.6% 1.68 Sany Heavy Industry U CNY 8.89 8.40 10,837 7.4x 8.5x 9.7x 18.7x 15.0x 0.4x 1.5x 1.5x 6.9x 7.1x 6.4x 6.4x 3.4x 2.6x 3.4% 16.7% -1.6% -11.7% -40.4% -29.1% 16.7% -41.7% 1.37 Sany International NA HKD 3.69 1,479 12.3x 10.2x 8.7x 22.9x - 0.7x 2.0x 1.6x 9.8x 8.1x 9.2x 7.4x 1.9x 1.6x 1.5% 1.9% -7.5% -11.1% -17.8% -41.7% 3.1% -52.1% 1.20 Shantui Construction Machinery NA CNY 4.55 832 10.8x-12.5x15.3x12.5x1.4x- ----1.1x1.1x3.0%21.0%4.1%-11.0%-34.2%-24.0%21.0%-39.2%1.38 Yangzijiang Shipbuilding (Holdings) Ltd N SGD 0.93 1.10 2,904 4.5x 4.9x 6.5x - - 0.5x 1.2x 1.5x 4.4x 5.3x 4.2x 4.9x 1.4x 1.2x 6.0% 0.0% 1.6% -5.6% -8.4% 1.6% 8.8% -33.5% 1.63 Zhejiang Tianma NA CNY 5.21 994 16.1x 17.7x - 25.1x 19.4x -1.8x - - - - - 1.2x 1.2x 2.0% 8.1% -6.5% -12.1% -25.6% -19.6% 8.1% -35.7% 1.00 Average 9.2x 11.8x 10.4x 18.5x 14.1x 0.3x 1.0x 1.1x 6.4x 6.2x 5.6x 5.2x 1.6x 1.4x 2.9% 10.1% 2.8% 4.5% -18.1% -13.8% 24.7% -31.2% 1.36

China Infrastructure ConstructionLocal Price $USD P/E AVG P/E PE/G EV/SALES EV/EBIT EV/EBITDA P/B YIELD Performance Name Rating CCY 12/10/2012 TP MktCp 11 12E 13E 5Y FY1 5Y FY2 11 11 12E 11 12E 11 12E 11 12E DIV 1-WK 1-MO 3-MO 6-MO YTD VS LO VS HI BETA China Communications Construction Co Ltd NA HKD 7.34 13,453 7.7x8.2x7.3x16.7x13.2x------3.0%4.0%4.1%15.4%6.8%20.9%27.4%-7.7%1.13 China Railway Construction Corporation NA HKD 9.30 12,227 12.1x11.7x10.5x16.7x12.8x------1.4%9.7%11.5%37.0%51.5%117.3%123.6% 0.0% 0.77 China Railway Group Ltd NA HKD 4.73 10,937 12.5x11.8x10.2x17.1x12.3x------1.3%5.6%10.5%46.0%52.6%94.7%102.1% 0.0% 1.09 CSR Times Electric U HKD 25.90 15.10 3,624 19.1x21.4x18.6x23.7x18.3x1.7x3.0x-----4.2x3.8x1.6%10.9%12.9%25.7%24.8%52.2%71.1%0.0%1.07 China CSR Corp U HKD 7.07 4.00 11,282 17.4x 22.9x 19.2x 25.5x 18.6x 2.2x 0.9x 1.0x 13.2x - 10.2x - 3.0x 2.4x 3.6% 8.9% 8.6% 30.0% 23.2% 59.2% 71.2% 0.0% 0.67 China CNR Corp N CNY 4.50 3.40 7,455 12.5x 17.2x 13.9x 17.2x 12.9x 2.0x 0.7x 0.7x 13.4x - 10.1x 10.8x 1.5x 1.3x 1.1% 6.1% 8.4% 19.0% 7.7% 12.1% 33.1% -2.3% 0.87 Average 13.5x 15.5x 13.3x 19.5x 14.7x 2.0x 1.5x 0.8x 13.3x - 10.1x 10.8x 2.9x 2.5x 2.0% 7.5% 9.3% 28.9% 27.8% 59.4% 71% -1.7% 0.93

China Power Equipment Local Price $USD P/E AVG P/E PE/G EV/SALES EV/EBIT EV/EBITDA P/B YIELD Performance Name Rating CCY 12/10/2012 TP MktCp 11 12E 13E 5Y FY1 5Y FY2 11 11 12E 11 12E 11 12E 11 12E DIV 1-WK 1-MO 3-MO 6-MO YTD VS LO VS HI BETA Baoding Tianwei Baobian Electric Co Ltd U CNY 6.09 4.50 1,342 ---44.0x25.1x-2.5x-----1.2x1.42x0.0%10.1%-8.3%-19.1%-36.4%-45.5%10.1%-51.8%1.20 China XD N CNY 3.36 4.80 2,350 - - - - 0.9x 0.4x - - - 5.4x 1.0x 0.96x 4.7% 2.1% -2.0% -17.2% -9.2% 6.3% -22.4% China High Speed Transmission Equipment U HKD 2.69 2.00 473 5.3x 10.7x 10.7x 21.1x 15.4x -0.1x 1.0x 1.0x 6.7x 7.7x 4.8x 4.8x 0.4x 0.38x 0.0% 5.5% 0.7% 14.0% -4.9% -20.9% 28.7% -50.8% 1.19 China Ming Yang Wind Power Group Ltd. U USD 1.22 0.90 149 3.2x-----0.0x-0.5x-0.4x-0.3x0.26x0.0%-4.7%-11.6%1.7%-15.9%-46.3%15.1%-60.3%- Chongqing Machinery & Electric Co., Ltd NA HKD 1.24 - 8.6x-9.7x8.8x-1.1x------0.8x6.1%6.9%6.0%27.8%-9.5%-3.1%36.3%-29.9%1.27 China Datang Corp O HKD 0.86 1.97 278 5.9x 5.0x 3.6x - - 0.3x - - 13.5x 12.6x 8.6x 8.0x 0.5x 0.5x 5.5% 1.2% -6.5% 16.2% -25.2% -38.6% 21.1% -45.2% - China Longyuan Power O HKD 5.25 6.19 1,836 11.9x 11.1x 10.0x 18.6x 14.9x 0.6x - - 11.3x 10.2x 7.1x 6.5x 1.2x 1.1x 1.6% 3.8% 2.3% -1.7% 1.2% -13.5% 16.9% -26.9% 0.62 Dongfang Electric Corp N HKD 14.78 15.00 4,011 7.8x 8.7x 8.8x 21.2x 14.6x 2.4x 0.8x 0.7x 10.1x 10.2x 7.3x 7.1x 1.7x 1.5x 1.5% 13.9% 10.8% 35.1% -17.6% -35.7% 43.2% -41.6% 1.24 Harbin Power Equipment O HKD 6.71 8.20 585 6.0x 5.6x 5.3x 11.5x 10.6x 0.4x 0.5x 0.5x 8.8x 8.0x 6.5x 5.8x 0.7x 0.6x 2.7% 7.4% 5.8% 6.2% -7.3% -1.0% 30.3% -25.6% 1.27 Henan Pinggao Electric Co Ltd O CNY 6.79 10.40 893 --32.9x-32.2x-2.1x1.5x----2.0x2.0x0.0%13.4%-8.7%-8.6%-12.3%-18.7%13.4%-34.3%0.85 Shanghai Electric Group Co., Ltd. NA HKD 3.30 7,402 10.4x 10.0x 9.2x 16.3x 15.1x 1.0x 0.8x 0.8x 11.1x 10.4x 8.8x 8.2x 1.2x 1.1x 3.0% 7.8% 5.4% 3.4% 1.9% -8.1% 26.0% -25.7% 0.93 TBEA Co Ltd U CNY 6.16 6.80 2,834 13.2x 17.2x 14.5x 23.2x 18.1x -0.4x 0.7x 0.5x 10.2x 11.1x 7.4x 6.5x 1.3x 1.2x 1.3% 7.1% 3.5% -2.4% -17.6% -19.8% 11.6% -31.9% 0.97 Xinjiang Goldwind U HKD 3.00 1.70 2,015 10.7x - - - -0.1x 1.0x 1.0x 11.8x - 10.0x - 0.5x 0.5x 2.0% -1.3% -4.2% 10.7% 1.4% -27.9% 21.5% -44.2% - Average 8.3x 9.8x 11.9x 20.7x 17.2x 0.3x 1.0x 0.8x 9.3x 10.0x 6.8x 6.5x 1.0x 1.0x 2.0% 5.8% -0.2% 6.3% -12.3% -22.2% 21.6% -37.7% 1.06

China Container ManufacturingLocal Price $USD P/E AVG P/EPE/G EV/SALES EV/EBIT EV/EBITDA P/B YIELD Performance Name Rating CCY 12/10/2012 TP MktCp 11 12E 13E 5Y FY1 5Y FY2 11 11 12E 11 12E 11 12E 11 12E DIV 1-WK 1-MO 3-MO 6-MO YTD VS LO VS HI BETA Singamas Container Holdings Ltd. NA HKD 1.98 618 4.5x8.0x6.9x40.2x40.3x------4.6%7.0%2.6%13.1%-1.0%34.7%41.4%-19.2%1.64 CIMC 'A' NA CNY 10.22 3,812 7.5x12.3x10.3x18.2x16.3x------4.5%11.7%4.4%0.1%-29.1%-20.5%11.7%-37.7%1.19 CIMC 'B' NA HKD 9.70 3,812 5.9x9.6x7.6x12.7x11.1x------5.8%0.0%1.0%0.5%1.3%9.0%25.2%-20.3%0.88 Average 5.9x10.0x8.3x23.7x22.6x------5.0%6.2%2.7%4.6%-9.6%7.7%26.1%-25.7%1.24

India Automotive Local Price $USD P/E AVG P/E PE/G EV/SALES EV/EBIT EV/EBITDA P/B YIELD Performance Name Rating CCY 12/10/2012 TP MktCp 11 12E 13E 5Y FY1 5Y FY2 11 11 12E 11 12E 11 12E 11 12E DIV 1-WK 1-MO 3-MO 6-MO YTD VS LO VS HI BETA Ashok Leyland O INR 28.05 30 1,373 12.1x 13.3x 12.9x 15.5x 13.6x 0.8x 0.9x 0.8x 10.5x 11.7x 8.1x 8.4x 1.9x 1.8x 3.6% -1.1% 9.1% 34.9% 3.1% 23.3% 36.5% -13.0% 1.10 Bajaj Auto O INR 1939.70 2073 10,327 16.2x 18.4x 18.1x 26.1x 16.5x 0.4x - 2.6x - 14.2x - - - - 2.3% 0.5% 4.7% 13.4% 24.2% 21.8% 36.2% -0.9% 1.21 Bharat Forge NA INR 260.90 1,117 21.5x14.7x15.3x21.4x18.3x------1.5%-1.8%-0.3%-10.5%-15.3%3.8%10.2%-22.8%1.17 Bosch O INR 9141.45 5,281 25.6x26.5x20.8x16.1x14.3x2.1x------0.6%0.2%3.2%9.3%4.6%34.9%39.6%-0.6%0.61 Hero Motocorp N INR 1826.40 1911 6,710 18.9x 15.3x 16.4x 16.1x 14.4x - 1.6x 1.4x 14.3x 13.1x - 9.1x - - 2.5% -0.1% -4.3% 1.3% -6.7% -4.1% 5.7% -18.6% 0.54

Mahindra & Mahindra N INR 936.85 858 10,583 21.6x20.0x19.0x15.6x12.9x1.5x2.5x1.8x-----4.7x1.3%-0.8%2.9%22.9%37.1%37.2%47.3%-2.0%1.04 201 10 December Maruti Suzukia India O INR 1510.05 1565 8,027 19.5x 26.7x 22.6x -1.1x 1.0x 1.0x 13.7x - 9.9x - 3.1x 2.9x 0.5% 2.5% 3.1% 24.4% 36.3% 64.1% 65.2% 0.0% 0.71 Tata Motors U INR 281.80 226 14,039 9.7x 6.6x 7.1x 11.9x 12.9x - 0.8x 0.6x 8.0x 6.3x 5.5x 4.4x 4.7x 2.7x 0.0% 2.8% 0.4% 12.9% 18.5% 58.0% 63.6% -11.8% - Average 18.1x 17.7x 16.5x 17.5x 14.7x 0.8x 1.4x 1.4x 11.6x 11.3x 7.8x 7.3x 3.2x 3.0x 1.5% 0.3% 2.4% 13.6% 12.7% 29.9% 38.0% -8.7% 0.91

Source: Company data, Credit Suisse estimates 4 2 2

i-Spy Exhibit 21: Asia Valuation & Performance (contd)

India Capital Goods $USD PE/G YIELD Name Rating CCY 12/10/2012 TP MktCp 11 12E 13E 5Y FY1 5Y FY2 11 11 12E 11 12E 11 12E 11 12E DIV 1-WK 1-MO 3-MO 6-MO YTD VS LO VS HI BETA ABB Ltd. NA INR 717.00 2,796 --35.0x39.2x27.9x------0.4%0.6%-1.7%-3.8%-7.4%22.9%31.3%-19.6%1.02 Areva T&D India Ltd NA INRLocal Price 184.80 813 -29.9x26.7x22.4x17.6x------0.9%0.5%P/E AVG P/EEV/SALES EV/EBITEV/EBITDA P/B Performance 37.9%-7.8%1.25 BEML Ltd NA INR 305.90 234 8.6x-4.8x15.3x------1.6%7.8%5.6%11.1%-19.0%-32.8%13.0%-55.6%1.15 BGR Energy NA INR 268.40 356 6.0x8.6x10.1x14.0x11.3x------2.6%-0.3%1.1%-0.8%-7.8%50.2%52.8%-27.1%1.57 Bharat Heavy Electricals U INR 242.90 180 10,939 9.9x 8.4x 10.4x 0.4x 1.2x 1.1x 6.2x 5.8x 5.8x 5.3x 2.9x 2.3x 0.0% 4.1% 4.6% 20.9% 10.1% 1.6% 22.9% -23.6% - Crompton Greaves Ltd U INR 118.55 1,399 8.2x 20.4x 23.2x 17.9x 14.6x -0.3x 0.7x 0.7x 6.4x 14.0x 5.5x 9.4x 2.3x 2.1x 1.0% 3.6% 4.9% 6.5% 1.7% -5.6% 12.2% -26.8% 1.09 Cummins India N INR 503.15 2,566 23.6x25.8x23.4x19.3x16.5x2.3x------2.2%4.1%4.5%9.2%16.1%44.2%54.4%-1.6%0.86 Havells India Ltd. NA INR 603.25 1,385 24.5x20.3x17.9x17.4x13.1x------1.1%5.2%1.4%4.1%9.4%57.2%62.1%-9.5%1.39 KEC International Ltd NA INR 66.05 312 7.9x8.1x9.3x10.5x8.6x------1.8%1.9%3.9%16.0%27.6%86.8%103.2% -12.9% 0.94 Larsen & Toubro U INR 1672.55 1390 18,923 24.4x22.1x19.4x26.8x22.1x-2.4x2.1x----4.1x3.5x1.0%0.3%3.2%22.1%23.9%68.1%70.8%-2.3%1.23 Punj Lloyd Ltd NA INR 60.25 368 -21.8x25.0x-12.2x------0.3%10.9%14.7%30.1%25.5%52.3%60.9%-6.6%1.70 Siemens India NA INR 681.35 4,266 26.6x35.3x33.0x28.6x23.9x------0.9%1.6%-0.6%-2.5%-1.9%6.1%8.0%-17.9%1.35 Suzlon Energy Ltd NA INR 18.70 612 ---16.7x14.1x------0.0%-4.3%20.6%21.2%4.5%3.9%25.1%-40.5%1.47 Thermax NA INR 607.65 1,332 19.0x17.9x21.6x19.2x15.9x------1.2%3.0%2.3%24.0%33.9%53.7%55.9%-0.6%1.24 Voltas Ltd U INR 112.75 83 686 11.8x 10.5x 12.9x 18.6x 13.9x - 0.6x 0.7x 7.5x 10.0x 7.1x 9.2x 2.7x 2.5x 1.4% 4.2% 0.0% 0.6% 8.5% 53.4% 55.2% -16.3% 1.38 Average 15.5x 19.1x 19.5x 20.5x 16.3x 0.8x 1.2x 1.1x 6.7x 9.9x 6.1x 8.0x 3.0x 2.6x 1.1% 2.9% 4.6% 11.3% 8.9% 33.0% 44.4% -17.9% 1.26

Japan Automotive PE/G YIELD Name Rating CCY 12/10/2012 TP MktCp 11 12E 13E 5Y FY1 5Y FY2 11 11 12E 11 12E 11 12E 11 12E DIV 1-WK 1-MO 3-MO 6-MO YTD VS LO VS HI BETA Nissan Motor O JPY 770 900 39,161 10.1x 9.4x 8.9x 9.5x 11.4x - 0.8x 0.7x 13.6x 12.9x 8.0x 8.0x 1.1x 1.0x 2.9% -4.6% 10.3% 3.9% 2.7% 11.3% 19.2% -14.4% 1.56 Toyota Motor O JPYLocal Price 3535 4240 147,903 27.2xP/E 39.2x 11.8xAVG - P/E 23.4x 1.7x EV/SALES 0.6x 0.7x EV/EBIT - -EV/EBITDA 9.5x - 1.1xP/B 1.1x 1.7% 0.6% 12.6% 11.5%Performance 15.9% 37.8% 42.8% -2.8% 1.03 Mazda Motor U JPY 131 120 6,689 - - 25.9x 18.0x 24.1x - 0.4x 0.4x - - 9.5x - 0.5x 0.8x 0.0% 0.8% 24.8% 39.4% 32.3% -3.7% 52.3% -19.1% 1.98 Daihatsu Motor O JPY 1529 2000 7,906 12.4x 10.0x 8.5x 14.2x 12.2x 0.2x 0.4x 0.4x 6.3x 5.6x 3.8x 3.6x 1.7x 1.5x 3.6% 5.1% 11.4% 21.3% 15.5% 11.3% 25.4% -2.9% 0.96 Honda Motor N JPY 2745 2570 60,033 9.3x 23.4x 12.2x 26.6x 10.3x -0.8x 0.9x 1.0x 13.6x - 8.7x - 1.1x 1.1x 2.5% 1.7% 14.9% 6.0% 7.8% 16.9% 22.2% -16.7% 1.15 Suzuki Motor N JPY 1927 1860 13,117 23.9x 20.1x 14.3x 22.7x 19.0x 1.0x 0.3x 0.3x 7.1x 5.3x 3.1x 2.8x 1.1x 1.1x 0.8% -0.5% 9.7% 35.5% 18.4% 21.0% 41.7% -4.8% 1.13 Fuji Heavy Inds. N JPY 908 900 8,599 14.1x 18.4x 7.8x 12.9x 12.8x - 0.5x 0.5x 9.1x - 5.4x 7.5x 1.7x 1.6x 1.0% -2.0% 14.4% 41.4% 49.1% 95.3% 105.4% -2.0% 1.31 Average 16.1x 20.1x 12.8x 17.3x 16.2x 0.5x 0.6x 0.6x 9.9x 7.9x 6.9x 5.5x 1.2x 1.2x 1.8% 0.1% 14.0% 22.7% 20.2% 27.1% 44% -9.0% 1.30

Japan Auto Related Consumables $USD PE/G YIELD Name Rating CCY 12/10/2012 TP MktCp 11 12E 13E 5Y FY1 5Y FY2 11 11 12E 11 12E 11 12E 11 12E DIV 1-WK 1-MO 3-MO 6-MO YTD VS LO VS HI BETA JTEKT N JPY 680 700 2,821 11.6x 17.5x - 13.4x 15.9x - 0.4x 0.4x 8.8x 11.4x 4.0x 4.9x 0.8x 0.7x 2.4% -0.9% 16.8% 11.8% -15.0% -10.2% 22.7% -33.8% 1.75 NSK O JPYLocal Price 512 600 3,354 10.6xP/E 9.7x 16.8x AVG - P/E 17.3x -EV/SALES 0.6x 0.6x EV/EBIT 9.8x 9.8xEV/EBITDA 5.4x 5.4x 1.1xP/B 1.0x 2.3% 2.8% 16.9% 10.3%Performance 3.2% 2.4% 22.5% -22.9% 1.64 NTN N JPY 193 160 1,246 7.1x 17.1x 12.7x 14.4x - 0.5x 0.6x 11.8x - 4.8x 5.9x 0.5x 0.5x 2.7% 9.0% 41.9% 14.9% -20.6% -37.7% 47.3% -48.7% 1.60 Tsubakimoto Chain O JPY 454 550 1,025 13.9x 12.4x 11.4x 17.4x 11.5x 0.3x 0.7x 0.7x 8.9x 8.1x 5.3x 5.0x 1.0x 1.0x 1.6% 1.3% 19.8% -0.7% 3.2% 14.4% 19.8% -13.4% 1.60 Average 10.8x 14.2x 14.1x 14.5x 14.8x 0.3x 0.6x 0.6x 9.8x 9.8x 4.9x 5.3x 0.9x 0.8x 2.2% 3.1% 23.9% 9.1% -7.3% -7.8% 28% -29.7% 1.65

Japan Conglomerates $USD PE/G YIELD Name Rating CCY 12/10/2012 TP MktCp 11 12E 13E 5Y FY1 5Y FY2 11 11 12E 11 12E 11 12E 11 12E DIV 1-WK 1-MO 3-MO 6-MO YTD VS LO VS HI BETA Hitachi N JPY 464 410 26,505 8.8x 6.0x 10.9x 14.9x 17.4x - 0.4x 0.4x 8.4x 9.0x 4.5x 4.8x 1.5x 1.2x 2.1% -2.3% 11.5% 2.4% -2.5% 14.9% 16.3% -15.8% 1.50 Mitsubishi Electric NA JPYLocal Price 660 560 17,194 11.4xP/E 12.6x 11.6xAVG 12.4x P/E 11.2x - EV/SALES 0.4x 0.4x EV/EBIT 6.1x 7.0xEV/EBITDA 4.2x 4.4x 1.3xP/B 1.3x 1.7% -0.5% 15.4% 5.6%Performance 6.5% -10.6% 17.9% -16.0% 1.37 IHI Corporation NA JPY 182 3,240 9.0x 8.8x 8.1x 16.6x 12.7x 0.3x 0.4x 0.4x 8.3x 9.8x 4.8x 5.7x 1.1x 1.1x 2.2% -0.5% 11.7% 4.6% 13.8% -2.7% 20.5% -14.2% 1.50 Average 9.7x 9.2x 10.2x 14.6x 13.8x 0.3x 0.4x 0.4x 7.6x 8.6x 4.5x 5.0x 1.3x 1.2x 2.0% -1.1% 12.9% 4.2% 5.9% 0.5% 18% -15.3% 1.46

Japan/Taiwan Factory Automation $USD PE/G YIELD Name Rating CCY 12/10/2012 TP MktCp 11 12E 13E 5Y FY1 5Y FY2 11 11 12E 11 12E 11 12E 11 12E DIV 1-WK 1-MO 3-MO 6-MO YTD VS LO VS HI BETA Airtac N TWD 154 150 792 17.1x 20.6x 16.5x - - - - - 13.3x - - - 4.1x 4.7x 3.2% -2.2% 5.1% 7.0% -5.2% 22.3% 27.4% -14.7% - Delta Electronics N TWDLocal Price 106.0 117.0 8,818 23.2xP/E 16.4x 17.1xAVG 16.5x P/E 14.7x -EV/SALES 1.3x 1.3xEV/EBIT - -EV/EBITDA - 10.3x 2.8xP/B 2.8x 3.3% -0.5% -0.9% -5.8%Performance 18.4% 47.2% 66.9% -7.4% 0.91 Fanuc N JPY 14300 12200 33,962 23.3x 20.2x 21.4x 27.6x 22.1x - - - 11.7x 9.7x 10.9x 9.1x 3.1x 2.9x 1.4% 2.6% 12.8% 10.9% 5.3% 21.4% 24.9% -7.8% 1.04 HIWIN U TWD 212 155 1,794 13.7x 23.1x 19.3x 18.1x - 0.9x - - 14.0x - - - - - 2.4% -0.2% 7.4% -3.0% -24.1% -9.7% 25.5% -34.7% 1.58 Keyence N JPY 23800 22800 17,522 23.7x 22.6x 22.4x 22.0x 20.0x 1.0x - - 12.9x 11.7x - - 2.3x 2.0x 0.2% 2.7% 13.3% 17.0% 28.9% 41.1% 44.6% 0.0% 0.82 SMC N JPY 14750 13700 12,276 21.2x 17.1x 18.0x 34.0x 21.7x 0.3x 2.5x 2.4x 10.0x 9.3x 8.8x 8.2x 1.9x 1.7x 0.3% 4.8% 19.9% 21.0% 13.0% 18.8% 24.4% -0.6% 0.93 Nabtesco N JPY 1711 1600 2,646 16.2x 14.7x 16.6x 21.0x 15.6x - 1.1x 1.0x 9.0x 8.7x 7.1x 6.7x 2.5x 2.3x 2.1% 4.1% 8.2% 11.7% -4.9% 22.0% 23.4% -9.7% 1.18 Teco O TWD 21 24 1,358

14.1x 13.3x 11.1x 12.6x 11.1x - 0.9x 0.8x 12.9x 9.8x 9.4x 7.4x 1.1x 1.1x 4.2% 0.7% 4.9% 6.8% 9.5% 19.6% 24.1% -2.7% 1.13 THK O JPY 1420 1650 2,181 13.1x 14.4x 34.2x 39.5x 23.3x - 0.7x 0.7x 5.9x 6.5x 4.2x 4.3x 1.1x 1.1x 1.4% 1.2% 11.7% 16.2% -6.6% -6.4% 22.8% -20.0% 1.07 Yaskawa Electric Corporation O JPY 684 800 2,089 26.3x 20.4x 20.7x 16.8x 40.1x - 0.7x 0.7x - 14.2x 10.1x 9.4x 1.8x 1.7x 1.5% 2.1% 18.5% 37.6% 15.0% 4.4% 41.9% -15.5% 1.51 Average 19.2x 18.3x 19.7x 23.1x 21.1x 0.7x 1.2x 1.1x 11.2x 10.0x 8.4x 7.9x 2.3x 2.3x 2.0% 1.5% 10.1% 11.9% 4.9% 18.1% 33% -11.3% 1.13

Japan Infrastructure MachineryLocal Price $USD P/E AVG P/E PE/G EV/SALES EV/EBIT EV/EBITDA P/B YIELD Performance Name Rating CCY 12/10/2012 TP MktCp 11 12E 13E 5Y FY1 5Y FY2 11 11 12E 11 12E 11 12E 11 12E DIV 1-WK 1-MO 3-MO 6-MO YTD VS LO VS HI BETA Daikin Industries N JPY 2669 2600 9,427 39.2x 18.9x 37.0x 29.3x 17.0x 0.9x 0.8x 0.8x 13.0x 12.7x 8.5x 8.6x 1.6x 1.6x 1.3% 2.8% 23.3% 32.1% 29.6% 26.6% 44.3% -1.7% 1.42 Ebara N JPY 331 350 1,697 5.0x - 16.4x 26.0x 14.4x - 0.4x 0.5x 5.5x 8.3x 3.9x 5.4x 1.0x 0.9x 2.3% 4.7% 8.5% 3.4% 20.8% 24.9% 31.3% -5.4% 1.43 Hitachi Construction Machinery N JPY 1478 1450 3,799 28.2x 13.6x 9.4x 45.5x 14.1x 0.2x 0.7x 0.7x 13.8x 11.1x 7.2x 6.5x 1.0x 1.0x 2.4% 0.8% 11.5% 12.9% 0.0% 14.0% 20.9% -22.5% 1.30 Komatsu N JPY 1897 1900 21,922 12.2x 11.0x 12.4x 20.9x 14.9x - 1.2x 1.2x 10.2x 9.3x 7.3x 6.9x 2.1x 1.9x 2.4% 2.3% 11.8% 18.6% 1.0% 5.4% 28.6% -24.4% 1.46 Kubota N JPY 885 950 13,487 20.5x 18.2x 17.0x 16.5x 14.0x 1.0x 1.3x 1.3x 14.6x 12.0x - 9.8x 1.8x 1.7x 1.8% 0.0% 11.3% 13.6% 27.5% 37.2% 44.8% -1.3% 1.28 Makita U JPY 3445 3100 5,675 15.9x 14.5x 15.5x 15.1x 13.7x 0.8x 1.3x 1.3x 8.8x 8.0x 7.4x 6.9x 1.6x 1.5x 2.1% -0.1% 11.0% 25.2% 25.5% 38.3% 46.5% -3.8% 1.17 201 10 December Average 20.1x 15.2x 18.0x 25.6x 14.7x 0.7x 1.0x 1.0x 11.0x 10.2x 6.9x 7.3x 1.5x 1.4x 2.0% 1.7% 12.9% 17.6% 17.4% 24.4% 36% -9.9% 1.34

Source: Company data, Credit Suisse estimates 4 3

2

i-Spy Exhibit 22: Asia Valuation & Performance (contd)

Japan Machine Tools $USD PE/G YIELD Name Rating CCY 12/10/2012 TP MktCp 11 12E 13E 5Y FY1 5Y FY2 11 11 12E 11 12E 11 12E 11 12E DIV 1-WK 1-MO 3-MO 6-MO YTD VS LO VS HI BETA Amada O JPYLocal Price 475 550 2,201 -P/E 39.1x 39.4xAVG 21.3x P/E 18.9x -EV/SALES 0.6x 0.6xEV/EBIT - 11.6xEV/EBITDA 8.0x 6.3xP/B 0.5x 0.5x 2.9% 1.9% 18.5% 36.1%Performance 4.6% -2.7% 40.9% -21.0% 1.28 Mori Seiki U JPY 590 500 783 - 11.5x 29.5x 12.1x 11.0x - 0.9x 0.8x - - - 8.8x 0.7x 0.7x 3.4% 1.2% 20.2% 21.6% -10.9% -14.0% 23.7% -33.3% 1.37 Okuma Corp U JPY 509 430 1,014 - 10.0x 13.9x 10.2x 10.7x - 0.6x 0.5x - 5.8x 8.7x 4.2x 1.0x 0.9x 2.0% 4.5% 9.5% 12.1% -1.0% 3.5% 17.3% -27.4% 1.76 Average - 20.2x 27.6x 14.5x 13.5x - 0.7x 0.6x - 8.7x 8.3x 6.4x 0.7x 0.7x 2.8% 2.5% 16.0% 23.3% -2.4% -4.4% 27% -27.2% 1.47

Korea Engineering & Construction $USD PE/G YIELD Name Rating CCY 12/10/2012 TP MktCp 11 12E 13E 5Y FY1 5Y FY2 11 11 12E 11 12E 11 12E 11 12E DIV 1-WK 1-MO 3-MO 6-MO YTD VS LO VS HI BETA Daelim Industrial O KRWLocal Price 79000 110000 2,548 8.0xP/E 7.7x 5.9xAVG 8.4x P/E 7.5x 1.4xEV/SALES 0.4x 0.3xEV/EBIT 6.6x 6.8xEV/EBITDA 6.0x 6.2xP/B 0.7x 0.6x 0.1% 1.7% 11.0% -15.1%Performance -12.3% -12.0% 16.9% -38.8% 1.61 Daewoo E&C U KRW 9250 8000 3,563 22.2x16.8x10.0x10.8x11.8x-0.7x0.7x----1.1x1.1x0.0%-0.8%5.1%-6.3%7.9%-11.9%14.5%-22.6%1.20 GS E&C O KRW 53300 78000 2,519 6.2x 10.2x 7.4x 12.3x 11.0x -0.3x 0.3x 0.4x 5.0x 11.0x 4.6x 9.2x 0.7x 0.6x 1.9% 1.9% 0.9% -29.2% -31.1% -42.1% 12.2% -51.3% 1.38 Hyundai E&C O KRW 69000 78000 7,121 11.2x 12.9x 9.9x 15.9x 13.3x 1.9x 0.6x 0.6x 9.6x 9.8x 8.7x 8.9x 1.8x 1.6x 0.7% 3.0% 11.5% 3.6% 10.8% -2.0% 22.6% -19.4% 1.15 S1 Corporation NA KRW 63200 2,226 16.9x19.2x15.8x ------1.9%-5.0%-5.4%-4.2%10.9%9.2%21.5%-10.7%0.52 Samsung Engineering Co Ltd O KRW 168500 210000 6,247 12.1x 12.1x 10.2x 15.8x 12.5x 0.7x 0.7x 0.5x 8.6x 8.8x 8.2x 8.3x - 3.9x 1.7% 4.0% 11.6% -18.4% -4.8% -16.4% 18.2% -33.9% 1.21 Average 12.8x 13.2x 9.9x 12.6x 11.2x 0.9x 0.6x 0.5x 7.5x 9.1x 6.9x 8.2x 1.1x 1.6x 1.1% 0.8% 5.8% -11.6% -3.1% -12.5% 17.6% -29.5% 1.18

Korea Industrials / Shipbuilding / Autos $USD PE/G YIELD Name Rating CCY 12/10/2012 TP MktCp 11 12E 13E 5Y FY1 5Y FY2 11 11 12E 11 12E 11 12E 11 12E DIV 1-WK 1-MO 3-MO 6-MO YTD VS LO VS HI BETA Daewoo Shipbuilding & Marine Engineering N KRWLocal Price 24500 27000 4,346 6.8xP/E 11.6x 10.7xAVG 9.5x P/E 9.2x -0.2xEV/SALES 0.6x 0.6xEV/EBIT 7.7x 12.4xEV/EBITDA 6.4x 9.0xP/B 1.0x 1.0x 2.0% 2.3% 2.7% -1.6%Performance -9.9% 0.8% 15.6% -32.0% 1.31 Doosan Heavy Industries & Construction N KRW 43600 56000 4,277 16.8x 10.6x 9.9x 20.3x 12.8x 0.2x 0.9x 0.8x 13.0x 13.2x 9.9x 9.2x 1.0x 0.9x 1.7% 8.6% -0.7% -26.6% -20.0% -33.0% 8.6% -43.5% 1.24 Doosan Infracore NR KRW 16650 2,603 - - - 15.6x 14.0x - 1.0x 0.9x 17.3x 12.7x 11.6x 9.1x 1.3x - 0.0% 2.5% -0.3% -10.2% -13.1% -6.7% 8.8% -31.5% 1.44 Hyundai Heavy Industries NAR KRW 217000

#ERR: NUL 15,285 6.4x 9.4x 8.8x 8.0x 7.1x -0.2x 0.4x 0.5x 5.2x 9.7x 4.3x 7.0x 1.0x 0.9x 1.8% 4.1% 2.8% -8.4% -19.3% -15.6% 11.0% -37.1% 1.47 Hyundai Mipo Dockyard U KRW 116000 91000 2,150 11.6x 16.8x 16.3x 11.3x 9.1x -0.2x 0.7x 0.6x 9.1x - 7.8x - 0.7x 0.6x 1.7% 3.1% -0.9% -9.7% 0.4% 3.6% 11.5% -29.5% 1.44 Hyundai Mobis O KRW 293000 402000 26,434 9.4x 8.4x 7.9x 8.7x 7.7x 0.8x 1.1x 0.9x 10.9x 9.9x 9.7x 8.7x 2.1x 1.7x 0.6% 2.8% 10.2% -2.8% 7.5% 0.3% 12.9% -9.3% 0.90 Hyundai Motor O KRW 227500 287000 44,123 6.2x 5.3x 5.3x 9.9x 8.5x 0.2x 1.0x 0.9x 9.9x 8.2x 6.9x 6.0x 1.3x 1.1x 0.8% -0.4% 6.3% -3.2% -4.6% 6.8% 14.0% -15.3% 1.02 Kia Motors N KRW 61500 70000 23,105 7.2x 6.2x 6.0x 9.6x 7.9x 0.3x 0.6x 0.5x 7.5x 5.5x 5.9x 4.4x 1.9x 1.5x 1.0% -1.8% 8.7% -15.4% -21.2% -7.8% 12.4% -26.6% 1.16 Samsung Heavy Industries O KRW 37750 46400 8,077 9.5x 10.0x 9.6x 9.5x 8.4x -1.4x 0.7x 0.7x 8.4x 8.3x 6.3x 6.6x 1.9x 1.6x 1.3% 2.6% 7.2% 0.0% 0.1% 35.3% 38.5% -9.9% 1.49 Average 9.3x 9.8x 9.3x 11.4x 9.4x -0.1x 0.8x 0.7x 9.9x 10.0x 7.6x 7.5x 1.3x 1.2x 1.2% 2.6% 4.0% -8.7% -8.9% -1.8% 14.8% -26.1% 1.27

Singapore /Taiwan IndustrialsLocal Price $USD P/E AVG P/E PE/G EV/SALES EV/EBIT EV/EBITDA P/BYIELD Performance Name Rating CCY 12/10/2012 TP MktCp 11 12E 13E 5Y FY1 5Y FY2 11 11 12E 11 12E 11 12E 11 12E DIV 1-WK 1-MO 3-MO 6-MO YTD VS LO VS HI BETA COSCO Corporation Ltd U SGD 0.9 0.6 1,585 13.9x 17.7x 18.1x 17.5x 14.9x -0.4x 0.6x 1.0x 8.3x 12.4x 5.4x 8.3x 1.5x 1.4x 3.5% -1.1% -2.3% -9.9% -13.1% -1.1% 1.8% -34.0% 1.82 Hyflux Ltd O SGD 1.3 1.6 896 26.6x32.1x24.5x22.9x17.2x-0.7x2.6x2.4x----2.1x2.1x2.2%-0.8%-3.4%-8.6%3.3%5.4%23.3%-19.6%1.24 Keppel Corporation O SGD 10.7 12.8 15,792 12.8x 9.9x 12.9x 12.0x 12.1x 0.5x 2.0x 1.6x 10.8x 9.5x 9.8x 8.7x 2.6x 2.1x 4.1% 0.7% 5.7% -3.8% 6.0% 15.4% 19.8% -7.5% 1.45 Sembcorp Industries Ltd O SGD 5.1 6.1 7,431 9.7x 12.4x 11.2x 11.8x 11.5x -2.7x 0.9x 1.0x 7.2x 8.8x 6.0x 6.5x 2.2x 2.0x 3.0% 0.0% 1.8% -8.1% 1.8% 25.4% 29.9% -11.8% 1.27 Sembcorp Marine Ltd N SGD 5 4 7,708 12.5x 18.4x 14.8x 14.2x 14.0x -0.5x 1.9x 2.1x 10.2x - 8.8x - 3.9x 3.9x 2.4% 1.1% 3.4% -9.4% 3.2% 18.1% 22.2% -16.9% 1.77 Average 15.1x 18.1x 16.3x 15.7x 13.9x -0.8x 1.6x 1.6x 9.1x 10.2x 7.5x 7.8x 2.5x 2.3x 3.0% 0.0% 1.1% -8.0% 0.2% 12.6% 19.4% -18.0% 1.51

Source: Company data, Credit Suisse estimates 10 December 201 10 December 4 4 2

10 December 2012 CS Global Capital Goods Team Global Sector Head: Julian Mitchell Americas Analyst Email Phone # of Stocks US Aerospace Robert Spingarn [email protected] 212 538 1895 7 Canada Industrials Hamzah Mazari [email protected] 212 538 7983 6 Lat Am Industrials Bruno Savaris [email protected] 55 11 3701 6332 2 US Automotive Chris Ceraso [email protected] 212 538 4529 10 US Defense Robert Spingarn [email protected] 212 538 1895 9 US Small-cap Aerospace and Defense Julie Yates [email protected] 212.325.3706 5 US Electrical Equipment/Multi-Industry Julian Mitchell [email protected] 212 325 6668 17 US Engineering & Construction Jamie Cook [email protected] 212 538 6098 10 US Environmental Services Hamzah Mazari [email protected] 212 538 7983 6 US Fluid Management Hamzah Mazari [email protected] 212 538 7983 4 US Industrial Distribution Hamzah Mazari [email protected] 212 538 7983 5 US Machinery Jamie Cook [email protected] 212 538 6098 12 US Transports Allison Landry [email protected] 212 325 3716 3 US Transports Chris Ceraso [email protected] 212 538 4529 16 EMEA Analyst Email Phone # of Stocks European Aerospace & Defense Oliver Sleath [email protected] 44 20 7888 0275 3 European Automotive Erich Hauser [email protected] 44 20 7888 0765 14 European Electrical Simon Toennessen [email protected] 44 20 7888 0289 4 European Mechanical Andre Kukhnin [email protected] 44 20 7888 0350 12 European Wind Energy Mark Freshney [email protected] 44 20 7888 0887 2 MEA Industrials Vincent Resillot [email protected] 44 20 7883 5550 1 Swiss Mid-cap Engineering Patrick Laager [email protected] 41 44 334 60 76 12 UK Capital Goods Andre Kukhnin [email protected] 44 20 7888 0350 2 UK Capital Goods Jonathan Hurn [email protected] 44 20 7883 4532 13 Asia Analyst Email Phone # of Stocks China Industrial Machinery Gerald Wong [email protected] 65 6212 3037 1 China Power Equipment Edwin Pang [email protected] 852 2101 6406 3 China Power Equipment Yang Song [email protected] 852 2101 6550 3 China Power Equipment Vincent Chan [email protected] 852 2101 6568 4 China Rail Equipment Yang Song [email protected] 852 2101 6550 3 India Automotive Jatin Chawla [email protected] 91 22 6777 3719 4 India Capital Goods Amish Shah [email protected] 9122 6777 3743 5 Japan Automotive Issei Takahashi [email protected] 81 3 4550 7884 9 Japan Auto Related Consumables Shinji Kuroda [email protected] 81 3 4550 9994 4 Japan Factory Automation Shinji Kuroda [email protected] 81 3 4550 9994 6 Japan Conglomerates Shinji Kuroda [email protected] 81 3 4550 9994 1 Japan Conglomerates Hideyuki Maekawa [email protected] 813 4550 9723 2 Japan Infrastructure Machinery Shinji Kuroda [email protected] 81 3 4550 9994 6 Japan Machine Tools Shinji Kuroda [email protected] 81 3 4550 9994 3 Korea Engineering & Construction Minseok Sinn [email protected] 822 3707 8898 6 Korea Industrials / Shipbuilding / Autos Henry Kwon [email protected] 822 3707 3732 8 Singapore Capital Goods Gerald Wong [email protected] 65 6212 3037 2 Taiwan Industrials Pauline Chen [email protected] 886 2 2715 6323 1 Taiwan Automation Jerry Su [email protected] 886 2 2715 6361 3

i-Spy 45 10 December 2012 Global Calendars Americas

Exhibit 23: Company Events Exhibit 24: Macro Events Date Company Event Date Datapoint Period Region 12/10 Dover Corp Investor Meeting 12/14 Industrial Production Nov-12 United States 12/10 United Parcel Service Inc Roadshow - Dallas 12/14 Capacity Utilization Nov-12 United States 12/11 AGCO Corp Analyst Meeting 12/17 Empire Mfg Dec-12 United States 12/11 United Parcel Service Inc Roadshow - Austin 12/18 NAHB Index Dec-12 United States 12/19 Housing Starts Nov-12 United States 12/12 Joy Global Inc Q4 2012 12/19 Building Permits Nov-12 United States 12/12 WW Grainger Inc Nov 2012 Sales 12/20 Philadelphia Fed Dec-12 United States 12/12 WW Grainger Inc Nov 2012 Sales 12/20 Leading Indicators Nov-12 United States 12/12 Pall Corp AGM 12/20 Existing Home Sales Nov-12 United States 12/12 Danaher Corp Investor & Analyst Meet 12/20 House Price Index Oct-12 United States 12/12 United Parcel Service Inc Roadshow - Houston 12/21 Chicago Fed Nat Activity Nov-12 United States 12/13 Finning International Inc Investor Day 12/24 Durable Goods Orders Nov-12 United States 12/14 United Technologies Corp Investor & Analyst Meet 12/26 Richmond Fed Dec-12 United States 12/14 Illinois Tool Works Inc Investor Meeting 12/27 New Home Sales Nov-12 United States 12/14 Kennametal Inc November Orders Report 12/28 Chicago PMI Dec-12 United States 12/17 Honeywell International Inc FY 2013 Guidance Call 12/31 Dallas Fed Mfg. Activity Dec-12 United States 1/2 ISM Mfg Dec-12 United States 12/18 General Electric Co Investor Meeting 1/2 ISM Prices Paid Dec-12 United States 12/18 Kennametal Inc Financial Comm Meet 1/4 Total vehicle Sales Dec-12 United States 12/19 FedEx Corp Q2 2013 1/4 Factory Orders Nov-12 United States 12/21 Shaw Group Inc/The Q1 2013 1/4 MSC Industrial Direct Co Inc Q1 2013 1/7 AZZ Inc Q3 2013 1/7 Robbins & Myers Inc Q1 2013 1/8 Lindsay Corp Q1 2013

Source: Bloomberg Source: Bloomberg EMEA

Exhibit 25: Company Events Exhibit 26: Macro Events Date Company Event EMEA Datapoint Period Region 12/10 Bayerische Motoren Nov 2012 Sales 12/10 France IP Oct-12 France 12/12 Euro-Zone Industrial Production Oct-12 Euro-Zone 12/11 Siemens AG CMD - Energy 1 12/14 Euro-Zone PMI Mfg (Flash) Dec-12 Euro-Zone 12/11 Metso OYJ CMD 12/14 Germany PMI Mfg (Flash) Dec-12 Germany 12/11 Siemens AG CMD - Energy 2 12/14 France PMI Mfg (Flash) Dec-12 France 12/11 Safran SA SM - Strasbourg 12/19 German IFO Dec-12 German 1/2 Euro-Zone PMI Mfg Dec-12 Euro-Zone 12/12 Senior PLC Q4 2012 1/2 Germany PMI Mfg Dec-12 Germany 12/12 Laird PLC Business Update Call 1/2 France PMI Mfg Dec-12 France 12/19 Volvo AB Nov 2012 Sales - Truck Deliv 1/2 UK PMI Mfg Dec-12 UK 12/19 Invensys PLC General Meeting 1/3 UK PMI Construction Dec-12 UK 1/7 UK New Car Registration Dec-12 UK 12/19 Volvo AB Nov 2012 Sales 1/8 Euro-Zone Business Climate Dec-12 Euro-Zone 1/8 Euro-Zone Economic Confidence Dec-12 Euro-Zone 1/8 Euro-Zone Industrial Confidence Dec-12 Euro-Zone 1/8 Germany Factory Orders Nov-12 Germany 1/9 German IP Nov-12 German 1/10 France IP Nov-12 France 1/11 UK IP Nov-12 UK Source: Bloomberg Source: Bloomberg

i-Spy 46 10 December 2012

Asia

Exhibit 27: Company Events Exhibit 28: Macro Events Date Company Event Date Datapoint Period Region 12/14 Dongfang Electric Corp Ltd EGM 12/12 India IP Oct-12 India 12/21 Brilliance China Automotive Holdings LEGM 12/12 Japan Machine Orders Oct-12 Japan 12/24 Geely Automobile Holdings Ltd EGM 12/14 Japan IP Oct-12 Japan 12/27 China Railway Group Ltd EGM 12/17 Japan Machine Tool Orders Nov-12 Japan 12/22 China HSBC Mfg PMI (flash) Dec-12 China 12/27 China Datang Corp Renewable Power EGM 12/26 Singapore IP Nov-12 Singapore 12/28 China Railway Construction Corp Ltd EGM 12/28 Japan IP (Flash) Nov-12 Japan 12/28 China Railway Construction Corp Ltd EGM 1/1 China PMI Mfg Dec-12 China 1/5 Harbin Electric Co Ltd EGM 1/2 China HSBC Mfg PMI Dec-12 China 01/06-01/10 China Business Climate Oct-12 China 01/09-01/18 China IP Dec-12 China 01/09-01/18 China FAI Dec-12 China 01/13-01/18 China GDP Dec-12 China Source: Bloomberg Source: Bloomberg

The author of this report wishes to acknowledge the contribution made by Sameer Thakur and Mehak Khanduja, employees of Crisil GRA, a division of CRISIL Limited, a third-party provider of offshore research services to Credit Suisse.

i-Spy 47 10 December 2012

Companies Mentioned (Price as of 09-Dec-2012) Anhui Conch Cement Co. Ltd. (0914.HK, HK$28.15) Okuma Corporation (6103.T, ¥503) Amada (6113.T, ¥480) Mori Seiki (6141.OS, ¥598) Nabtesco Corporation (6268.T, ¥1,701) SMC (6273.T, ¥14,840) Komatsu (6301.T, ¥1,891) Hitachi Construction Machinery (6305.T, ¥1,478) Kubota (6326.T, ¥883) Ebara (6361.T, ¥332) Daikin Industries (6367.T, ¥2,715) THK (6481.T, ¥1,426) Yaskawa Electric Corporation (6506.T, ¥692) Makita (6586.T, ¥3,450) Keyence (6861.T, ¥23,410) Fanuc (6954.T, ¥14,300) ABB (ABBN.VX, SFr18.58) ADT Corporation (ADT.N, $45.55) Bajaj Auto Limited (BAJA.BO, Rs1939.7) Bucher Industries (BUCN.S, SFr177.0) Canadian Pacific Railways (CP.N, $98.73) Danaher Corporation (DHR.N, $53.5) Dover Corporation (DOV.N, $63.73) Emerson (EMR.N, $50.85) Esterline Technologies (ESL.N, $62.88) Fluor (FLR.N, $56.32) Gardner Denver, Inc. (GDI.N, $68.92) General Electric (GE.N, $21.46) Honeywell International Inc. (HON.N, $61.97) Ingersoll-Rand Plc (IR.N, $48.69) KABA (KABN.S, SFr384.25) Kennametal Inc. (KMT.N, $38.95) L-3 Communications (LLL.N, $76.65) Luxfer (LXFR.N, $11.04) McDermott International (MDR.N, $10.51) OC Oerlikon Corp AG (OERL.S, SFr10.15) Rockwell Automation (ROK.N, $80.39) Rexnord Corporation (RXN.N, $21.7) Schindler-Holding AG (SCHP.VX, SFr131.4) Sika (SIK.VX, SFr2098.0) Smiths Group (SMIN.L, 1131.0p) SPX (SPW.N, $67.83) Sulzer (SUN.VX, SFr144.0) TransDigm (TDG.N, $129.72) Textron (TXT.N, $23.79) Tyco International, Ltd (TYC.N, $28.66) United Technologies Corp (UTX.N, $80.99) Valmont Industries (VMI.N, $135.84) West China Cemt (WECC.L^H10, 695.0p)

Disclosure Appendix Important Global Disclosures Julian Mitchell and Charles Clarke, each certify, with respect to the companies or securities that the individual analyzes, that (1) the views expressed in this report accurately reflect his or her personal views about all of the subject companies and securities and (2) no part of his or her compensation was, is or will be directly or indirectly related to the specific recommendations or views expressed in this report. The analyst(s) responsible for preparing this research report received Compensation that is based upon various factors including Credit Suisse's total revenues, a portion of which are generated by Credit Suisse's investment banking activities As of December 10, 2012 Analysts’ stock rating are defined as follows: Outperform (O) : The stock’s total return is expected to outperform the relevant benchmark*over the next 12 months. Neutral (N) : The stock’s total return is expected to be in line with the relevant benchmark* over the next 12 months. Underperform (U) : The stock’s total return is expected to underperform the relevant benchmark* over the next 12 months. *Relevant benchmark by region: As of 10th December 2012, Japanese ratings are based on a stock’s total return relative to the analyst's coverage universe which consists of all companies covered by the analyst within the relevant sector, with Outperforms representing the most attractive, Neutrals the less attractive, and Underperforms the least attractive investment opportunities. As of 2nd October 2012, U.S. and Canadian as well as European ratings are based on a stock’s total return relative to the analyst's coverage universe which consists of all companies covered by the analyst within the relevant sector, with Outperforms representing the most attractive, Neutrals the less attractive, and Underperforms the least attractive investment opportunities. For Latin American and non-Japan Asia stocks, ratings are based on a stock’s total return relative to the average total return of the relevant country or regional benchmark; Australia, New Zealand are, and prior to 2nd October 2012 U.S. and Canadian ratings were based on (1) a stock’s absolute total return potential to its current share price and (2) the relative attractiveness of a stock’s total return potential within an analyst’s coverage universe. For Australian and New Zealand stocks, 12-month rolling yield is incorporated in the absolute total

i-Spy 48 10 December 2012 return calculation and a 15% and a 7.5% threshold replace the 10-15% level in the Outperform and Underperform stock rating definitions, respectively. The 15% and 7.5% thresholds replace the +10-15% and -10-15% levels in the Neutral stock rating definition, respectively. Prior to 10th December 2012, Japanese ratings were based on a stock’s total return relative to the average total return of the relevant country or regional benchmark. Restricted (R) : In certain circumstances, Credit Suisse policy and/or applicable law and regulations preclude certain types of communications, including an investment recommendation, during the course of Credit Suisse's engagement in an investment banking transaction and in certain other circumstances.

Volatility Indicator [V] : A stock is defined as volatile if the stock price has moved up or down by 20% or more in a month in at least 8 of the past 24 months or the analyst expects significant volatility going forward.

Analysts’ sector weightings are distinct from analysts’ stock ratings and are based on the analyst’s expectations for the fundamentals and/or valuation of the sector* relative to the group’s historic fundamentals and/or valuation: Overweight : The analyst’s expectation for the sector’s fundamentals and/or valuation is favorable over the next 12 months. Market Weight : The analyst’s expectation for the sector’s fundamentals and/or valuation is neutral over the next 12 months. Underweight : The analyst’s expectation for the sector’s fundamentals and/or valuation is cautious over the next 12 months. *An analyst’s coverage sector consists of all companies covered by the analyst within the relevant sector. An analyst may cover multiple sectors.

Credit Suisse's distribution of stock ratings (and banking clients) is:

Global Ratings Distribution Rating Versus universe (%) Of which banking clients (%) Outperform/Buy* 42% (54% banking clients) Neutral/Hold* 39% (48% banking clients) Underperform/Sell* 15% (44% banking clients) Restricted 3% *For purposes of the NYSE and NASD ratings distribution disclosure requirements, our stock ratings of Outperform, Neutral, and Underperform most closely correspond to Buy, Hold, and Sell, respectively; however, the meanings are not the same, as our stock ratings are determined on a relative basis. (Please refer to definitions above.) An investor's decision to buy or sell a security should be based on investment objectives, current holdings, and other individual factors.

Credit Suisse’s policy is to update research reports as it deems appropriate, based on developments with the subject company, the sector or the market that may have a material impact on the research views or opinions stated herein. Credit Suisse's policy is only to publish investment research that is impartial, independent, clear, fair and not misleading. For more detail please refer to Credit Suisse's Policies for Managing Conflicts of Interest in connection with Investment Research: http://www.csfb.com/research and analytics/disclaimer/managing_conflicts_disclaimer.html Credit Suisse does not provide any tax advice. Any statement herein regarding any US federal tax is not intended or written to be used, and cannot be used, by any taxpayer for the purposes of avoiding any penalties.

Please refer to the firm's disclosure website at www.credit-suisse.com/researchdisclosures for the definitions of abbreviations typically used in the target price method and risk sections.

See the Companies Mentioned section for full company names The subject company (6301.T, 6326.T, SIK.VX, SUN.VX, 6273.T, 6367.T, LLL.N, 6861.T, ABBN.VX, CP.N, DOV.N, ESL.N, FLR.N, OERL.S, SCHP.VX, KMT.N, SMIN.L, TDG.N, DHR.N, EMR.N, GDI.N, GE.N, HON.N, IR.N, RXN.N, TXT.N, TYC.N, UTX.N, VMI.N, ADT.N, SPW.N) currently is, or was during the 12-month period preceding the date of distribution of this report, a client of Credit Suisse. Credit Suisse provided investment banking services to the subject company (SIK.VX, ABBN.VX, FLR.N, OERL.S, SCHP.VX, TDG.N, GE.N, RXN.N, TYC.N, UTX.N, ADT.N) within the past 12 months. Credit Suisse provided non-investment banking services to the subject company (6301.T, SUN.VX, 6273.T, 6861.T, ABBN.VX, SCHP.VX, SMIN.L, EMR.N, GE.N, HON.N, IR.N, TXT.N, VMI.N) within the past 12 months Credit Suisse has managed or co-managed a public offering of securities for the subject company (ABBN.VX, OERL.S, SCHP.VX, TDG.N, GE.N, TYC.N, ADT.N) within the past 12 months. Credit Suisse has received investment banking related compensation from the subject company (SIK.VX, ABBN.VX, FLR.N, OERL.S, SCHP.VX, TDG.N, GE.N, RXN.N, TYC.N, UTX.N, ADT.N) within the past 12 months Credit Suisse expects to receive or intends to seek investment banking related compensation from the subject company (6301.T, 6305.T, 6326.T, SIK.VX, SUN.VX, 6273.T, 6361.T, 6367.T, LLL.N, 6586.T, ABBN.VX, CP.N, DOV.N, ESL.N, FLR.N, MDR.N, OERL.S, SCHP.VX, KMT.N, TDG.N, DHR.N, EMR.N, GDI.N, GE.N, HON.N, RXN.N, TYC.N, UTX.N, VMI.N, ADT.N, SPW.N) within the next 3 months. Credit Suisse has received compensation for products and services other than investment banking services from the subject company (6301.T, SUN.VX, 6273.T, 6861.T, ABBN.VX, SCHP.VX, SMIN.L, EMR.N, GE.N, HON.N, IR.N, TXT.N, VMI.N) within the past 12 months

i-Spy 49 10 December 2012

As of the date of this report, Credit Suisse makes a market in the following subject companies (LLL.N, CP.N, DOV.N, ESL.N, FLR.N, MDR.N, KMT.N, TDG.N, DHR.N, EMR.N, GDI.N, GE.N, HON.N, IR.N, LXFR.N, ROK.N, RXN.N, TXT.N, TYC.N, UTX.N, VMI.N, ADT.N, SPW.N). As of the end of the preceding month, Credit Suisse beneficially own 1% or more of a class of common equity securities of (0914.HK, SUN.VX, ABBN.VX, OERL.S, SMIN.L). Credit Suisse has a material conflict of interest with the subject company (RXN.N). Credit Suisse served as co-managing bookrunner of Rexnord's Initial Public Offering Credit Suisse has a material conflict of interest with the subject company (UTX.N). Credit Suisse Securities (USA) LLC is acting as an advisor to Goodrich (GR) in a potential transaction with United Technologies Corp. Credit Suisse has a material conflict of interest with the subject company (SPW.N). Credit Suisse Securities USA LLC acted as financial advisor to SPX Corp in the sale of its Service Solutions business to Robert Bosch GmbBH. Important Regional Disclosures Singapore recipients should contact Credit Suisse AG, Singapore Branch for any matters arising from this research report. The analyst(s) involved in the preparation of this report have not visited the material operations of the subject company (0914.HK, 6103.T, 6113.T, 6301.T, 6305.T, 6326.T, SIK.VX, SUN.VX, 6141.OS, 6268.T, 6273.T, 6361.T, 6367.T, 6481.T, 6506.T, LLL.N, 6586.T, 6861.T, 6954.T, ABBN.VX, BAJA.BO, BUCN.S, CP.N, DOV.N, ESL.N, FLR.N, KABN.S, MDR.N, OERL.S, SCHP.VX, KMT.N, SMIN.L, TDG.N, DHR.N, EMR.N, GDI.N, GE.N, HON.N, IR.N, LXFR.N, ROK.N, RXN.N, TXT.N, TYC.N, UTX.N, VMI.N, ADT.N, SPW.N) within the past 12 months Restrictions on certain Canadian securities are indicated by the following abbreviations: NVS--Non-Voting shares; RVS--Restricted Voting Shares; SVS--Subordinate Voting Shares. Individuals receiving this report from a Canadian investment dealer that is not affiliated with Credit Suisse should be advised that this report may not contain regulatory disclosures the non-affiliated Canadian investment dealer would be required to make if this were its own report. For Credit Suisse Securities (Canada), Inc.'s policies and procedures regarding the dissemination of equity research, please visit http://www.csfb.com/legal_terms/canada_research_policy.shtml. The following disclosed European company/ies have estimates that comply with IFRS: (SIK.VX, SUN.VX, 6141.OS, ABBN.VX, SCHP.VX, SMIN.L). As of the date of this report, Credit Suisse acts as a market maker or liquidity provider in the equities securities that are the subject of this report. Principal is not guaranteed in the case of equities because equity prices are variable. Commission is the commission rate or the amount agreed with a customer when setting up an account or at any time after that. Important Credit Suisse HOLT Disclosures With respect to the analysis in this report based on the Credit Suisse HOLT methodology, Credit Suisse certifies that (1) the views expressed in this report accurately reflect the Credit Suisse HOLT methodology and (2) no part of the Firm’s compensation was, is, or will be directly related to the specific views disclosed in this report The Credit Suisse HOLT methodology does not assign ratings to a security. It is an analytical tool that involves use of a set of proprietary quantitative algorithms and warranted value calculations, collectively called the Credit Suisse HOLT valuation model, that are consistently applied to all the companies included in its database. Third-part data (including consensus earnings estimates) are systematically translated into a number of default algorithms available in the Credit Suisse HOLT valuation model. The source financial statement, pricing, and earnings data provided by outside data vendors are subject to quality control and may also be adjusted to more closely measure the underlying economics of firm performance. The adjustments provide consistency when analyzing a single company across time, or analyzing multiple companies across industries or national borders. The default scenario that is produced by the Credit Suisse HOLT valuation model establishes the baseline valuation for a security, and a user then may adjust the default variables to produce alternative scenarios, any of which could occur. Additional information about the Credit Suisse HOLT methodology is available on request. The Credit Suisse HOLT methodology does not assign a price target to a security. The default scenario that is produced by the Credit Suisse HOLT valuation model establishes a warranted price for a security, and as the third-party data are updated, the warranted price may also change. The default variable may also be adjusted to produce alternative warranted prices, any of which could occur. CFROI®, HOLT, HOLTfolio, ValueSearch, AggreGator, Signal Flag and “Powered by HOLT” are trademarks or service marks or registered trademarks or registered service marks of Credit Suisse or its affiliates in the United States and other countries. HOLT is a corporate performance and valuation advisory service of Credit Suisse.

For Credit Suisse disclosure information on other companies mentioned in this report, please visit the website at www.credit- suisse.com/researchdisclosures or call +1 (877) 291-2683.

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