RHB Research MARKET DATELINE THAILAND EQUITY Investment Research 08 Mar 2013 Morning Matters SET Intraday Chart WHAT’S INSIDE On the Platter RS (RS TB; FV THB13.2 – BUY) Company Update: Bright Prospects for the Future Having established a strong foothold in a currently-booming satellite TV industry, RS should see its advertising and occupancy rates growing significantly. Moreover, a low cost per rating point (CPRP) suggests that there is still room for ad rates to grow. Future growth will be driven by a higher ad rate in its satellite channels, the World Cup 2014 event and the increasing popularity of two of its radio channels. While it turned out that the ‘Must-Have’ rule is not a big concern anymore, RS’ future looks promising. RS is attractive due to its cheap valuation, and is currently trading at 0.4x FY13 PEG. We maintain our BUY recommendation with a TP of THB13.2 Bumrungrad Hospital (BH TB; FV THB112 – BUY) Company Update: On a Healthy Growth Path We continue to like Bumrungrad Hospital (BH)’s niche in the premium market where it continues to receive a steady stream of local and domestic patients. The company’s ongoing capacity expansion will enable it to meet rising demand while delivering decent long-term earnings growth. Maintain BUY, with our FV unchanged at THB112, based on 34x FY13 EPS. RHB Research | See important disclosures at the end of this report 1 A comprehensive range of market research reports by award-winning economists and analysts are exclusively available for download from www.rhbinvest.com RHB Research MEDIA HIGHLIGHTS • CPB ad rankles Central Leases solicited for prime Rama IV site • BGH plans to add six more hospitals • Hana plugs into Cambodian market • Don Mueang aims for 27m passengers • Insurance premiums may rise 16% this year • Top 10 developers account for 45 per cent of property market revenue ECONOMIC HIGHLIGHTS • China: China Inflation Over 3.5% May Prompt Rate Rise • Japan : Japan Returned to Growth in Fourth Quarter With 0.2% Expansion • EU: German Factory Orders Fall as Euro Crisis Curbs Demand • UK: BOE Seen Awaiting Osborne Remit Ruling as QE Suspense Persists • US: Consumer Borrowing in U.S. Rises by Most in Five Months Key Market Indices (7 March 2013) Key Statistics Value Change % Change % YTD SET Value by investor Type: Daily SET 1560.98 1.63 0.1% 12.1% Buy (THBm) Sell (THBm) Net (THBm) SET50 1022.64 -1.50 -0.1% 8.2% Institution 6,239.56 4,942.71 1,296.85 SET100 2295.48 -1.53 -0.1% 10.4% Proprietary 5,173.98 4,840.44 333.54 Foreign 10,626.85 11,088.82 -461.97 Dow Jones 14329.49 33.25 0.2% 9.4% Retail 44,045.38 45,213.80 -1,168.42 S&P500 1544.26 2.80 0.2% 8.3% Nasdaq 3232.09 9.72 0.3% 7.0% SET Value by investor Type FTSE 6439.16 11.52 0.2% 9.2% MTD (THBm) YTD (THBm) FSSTI 3298.54 6.73 0.2% 4.2% Institution 1,285.51 21,117.49 Hang Seng 22771.44 -6.40 0.0% 0.5% Proprietary 1,163.33 -1,383.95 Nikkei 12138.23 92.54 0.8% 16.6% Foreign 3,742.84 1,392.78 KLCI 1650.93 -0.91 -0.1% -2.3% Retail -6,191.68 -21,126.33 SHANGHAI 2324.29 -22.89 -1.0% 2.4% JCISE 4848.30 23.62 0.5% 12.3% SET50 Index Future Long Short Net MTD YTD SET 5-yr avg 2011 2012F Institution 3,663 3,932 -269 -251 5,751 PE (x) 14.4 17.9 14.4 Foreign 1,571 2,071 -500 2,277 -9,622 P/BV(x) 1.9 2.5 2.4 Local 8,542 7,773 769 -2,026 3,871 Yield(%) 4.0 2.6 3.1 RHB Research | See important disclosures at the end of this report 2 A comprehensive range of market research reports by award-winning economists and analysts are exclusively available for download from www.rhbinvest.com MEDIA HIGHLIGHTS RHB Research CPB ad rankles Central Leases solicited for prime Rama IV site Central Pattana Plc (CPN), the Central Group's commercial property developer, will seek assurances from the Crown Property Bureau (CPB) regarding its right to develop a plot on the busy corner of Rama IV and Wireless roads. The executive spoke after the CPB yesterday ran an ad in several newspapers telling the public it is seeking proposals for long-term leasing and development of the 88 rai (35,200 square wah) of vacant land on the corn er. It is the site of the old Suan Lum Night Bazaar. In the ad, the CPB said the development will be a mixed-use project including hotel, residential, office, cultural and education elements. Interested parties can submit proposals by March 29 for a 30-year lease term with an option for a 30-year extension. (Bangkok Post) BGH plans to add six more hospitals Thailand's largest private hospital group, Bangkok Dusit Medical Services (BGH), plans to add six more hospitals this year, focusing mainly on Thail and. Att Thongtang, chief executive of the Phyathai Hospital Group and Paolo Memorial Hospital Group, both under the BGH umbrella, said the parent has already added three hospitals, in Khon Kaen, Udon Thani and Chiang Mai provinces. It also recently purcha sed Thonburi Hospital, while last month the group opened a clinic in Myanmar, with more set for Mandalay and Dawei. The move is part of BGH's strategy of becoming the No.1 hospital group in Asia and third in the world within three years. The group is consi dering whether to acquire more hospitals or build them, but the focus will be border provinces. (Bangkok Post) Hana plugs into Cambodian market Hana Microelectronics Plc is investing 1.5 billion baht to build a new factory in Lamphun and another in Koh Kong, the latter marking a plunge into the Cambodian market. Chief executive Richard Han also hinted yesterday that the SET-listed electronic-parts maker could relocate some production from Thailand to Cambodia if it cannot cope with rising wages here over the next 3-5 years. Wages in Cambodia are one-third those in Thailand but will certainly rise as well, he said. Some 120 million baht has been allocated for buying a 60-rai plot of land in the Koh Kong special economic zone, while 360 million is slated f or the factory. Construction is scheduled to start by mid-year for the first phase comprising a 23,000-square-metre facility that would begin operation in April 2014, with another plot available nearby for future expansion. (Bangkok Post) Don Mueang aims for 27m passengers Airports of Thailand expects 27.5 million passengers to use Don Mueang Airport by 2016 after it reopens Terminal 2. Don Mueang general manager Paranee Vatanotai said on Thursday that the improvements to Terminal 2 will benefit the airport through servicing more passengers entering and leaving Bangkok. The terminal will be refurbished this year with work expected to be complete in 2016. Don Mueang uses Terminal 1 for its present operation for low-cost airlines for domestic and international routes. Nok Air, Thai AirAsia, AirAsia, Indonesia AirAsia and One-Two-Go Orient Thai are among the no-frills airlines using Don Mueang after moving their operations from Suvarnabhumi. Siam GA is the only full-service airline flying in and out of the airport. (Bangkok Post) Insurance premiums may rise 16% this year The Office of the Insurance Commission has forecast continued growth for the insurance sector this year with total insurance premiums of Bt660 billion, 16-per-cent growth year on year. OIC secretary-general Pravej Ongartsittigul said yesterday that of the total, Bt449 billion in premiums would be from life insurance, up 18 per cent year on year, and disaster insurance Bt211 billion, up 15 per cent. The share of insurance premiums in GDP is expected to be 5.38 per cent.Total insurance premiums last year were Bt569.903 billion, a 21.48- per-cent increase year on year, and the premium share to GDP was 5.02 per cent. Of the total, Bt390.474 billion was from life insurance, up 18.72 per cent, on rising confidence of consumers in insurance and the expansion of sales channels of insurance firms and the customisation of products to better serve the peoples' needs. (The Nation) Top 10 developers account for 45 per cent of property market revenue Amid a highly competitive property market in Bangkok and its suburbs, the top 10 listed developers recorded combined revenue of Bt161.53 billion last year, accounting for 45 per cent of the overall market value of Bt357 billion. Sansiri was the market leade r with revenue of Bt30.08 billion for a share of about 8.4 per cent, followed by Pruksa Real Estate with 7.6 per cent and Land & Houses with 6.8 per cent, according to a survey by The Nation.This is the first time that Sansiri, which was established in 198 4 and listed in the Stock Exchange of Thailand in 1996, has led the market. The top-three rankings changed last year because of the number of condominiums transferred by Sansiri exceeding the level achieved by the company in 2011, thanks to strong demand. According to a survey by the Government Housing Bank's Real Estate Information Centre, the number of new residential transfers in greater Bangkok was 156,300 units last year, up 3 per cent from the 2011 level.Some 43 per cent of the total, or 66,700 units, were condominiums, while 46,000 units (29 per cent) were townhouses and 26,700 homes (17 per cent) were detached houses.