David & Goliath - Credit Suisse

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10 September 2010Asia Pacific

Equity ResearchSmall Cap Companies

David & Goliath WEEKLY ANALYSIS

Low rates, high prices Apart from Hong Kong, the domestic recovery theme is also working well in other Asian markets. With an anticipated prolonged low interest rate cycle on the weakened macro data from the West, Asian asset-based stocks, such as small-cap properties and REITs, have been outperforming since June 2010. Trading at low estimated 2011 P/Es of 4.9-8.8x and yields of 3.1-13.2%, the Taiwan, Thailand and Singapore small-cap property stocks look attractive.

Recovery among Thai property stocks has been under way since the end of the Red Shirt protest in mid-May 2010. CS Thailand property and small-cap analyst Chai Techakumpuch sees new launches remaining active for the rest of the year. He likes Asia Property, Quality Houses and LPN in Thailand.

Like the Hong Kong government’s measures to “prevent an overheating property market”, tightening measures on property have been issued recently by the Singapore government and Taiwan’s Central Bank. Property price hikes on strong monetary liquidity amid low interest rates is a common phenomenon across the Asian markets. Both CS Taiwan property analyst Sidney Yeh and Singapore property analyst Tricia Song believe that the government’s tightening measures have only minimal impact and should not alter the property market uptrend. Their view is supported by the short-lived pullback in share prices of these property stocks on the measures – there ain’t no measures without a strong physical real estate market. Sidney likes the small-cap property plays Huaku, Prince, Chong Hong, Hung Poo and Sinyi (for transaction volume) in Taiwan, while Tricia likes Wing Tai and Allgreen in Singapore.

Charts of the week SC properties outperforming MSCI AxJ Taiwan, Thailand and SG ppt plays

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MSCI AxJ Prince HousingAsian Property Wing Tai

Ticker

Stock

11E P/E (x)

3M px chg (%)

2511.TW Prince Housing 5.6 52.3 AP.BK Asian Property 8.3 47.9 9940.TW Sinyi Realty 8.6 31.9 LPN.BK L.P.N. 6.7 31.1 QH.BK Quality Houses 7.8 30.3 5534.TW Chong Hong 4.9 27.8 2536.TW Hung Poo 7.9 11.8 WTHS.SI Wing Tai 6.0 10.5 AGRN.SI Allgreen 8.8 9.6 2548.TW Huaku 5.8 9.6

Source: Datastream, Credit Suisse estimates

Davids of the week: India: BEML – we initiate coverage of India’s largest mining equipment maker, benefiting from coal reform; 17.5x FY3/12E P/E, 14% potential upside (p. 24) Taiwan: Prince – we raise our NAV estimate by 28% on value appreciation of two commercial properties; 42% discount to NAV, 20% potential upside (p. 50)

Research Analysts Kenny Lau, CFA

852 2101 7914 [email protected]

Adrian Chan 852 2101 6469

[email protected]

Eva Wang 852 2101 7365

[email protected]

Sunil Tirumalai 9122 6777 3714

[email protected]

Teddy Oetomo 6221 2553 7911

[email protected]

Minseok Sinn 822 3707 8898

[email protected]

Loke Foong Wai 603 2723 2082

[email protected]

Su Tye Chua 65 6212 3014

[email protected]

Sidney Yeh 8862 2715 6368

[email protected]

Chai Techakumpuch 662 614 6211

[email protected]

10 September 2010

David & Goliath 2

The tales of Davids Hong Kong I.T – Company visit – an expanding business along with rising valuations 10

China BYD – Disappointing August auto sales adds gravity to EPS forecasts 17

Geely – Surprising MoM rebound in August sales; achieving FY target still a big challenge 17

India BEML – New report: Thematic play on likely acceleration in coal capex 24

KEC – New report: Valuations price in a weak near term; contra pick in the sector 24

Voltas – Play on recovery in industrial and infra capex 25

Havells – New report: Risk-adjusted returns do not appear attractive 25

BGR Energy – New report: Strong earnings momentum expected; valuations appear rich though 26

Punj Lloyd – Crisis of confidence 26

Malaysia Ta Ann – Plywood prices +25% YTD YoY but Tasmania is still loss-making 38

Singapore OUE – New report: Scaling new peaks 44

Taiwan Prince Housing – The undervalued commercial properties 50

Cyberlink – Softer 2H10 PC momentum already priced in; Looking into positive 2011 outlook 50

Hung Poo – Still a value play 51

Wintek – A winner in the tablet revolution 51

EVA Airways – August operating numbers flat sequentially due to seasonality 52

Taishin Financial – August monthly earnings remain strong 52

Thailand LPN Development – Newly acquired land plot has a very good profit potential 59

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David & Goliath 3

Small-cap index performance Figure 1: Non-Japan Asia Figure 2: China

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MSCI AxJ Small Caps MSCI Asia Ex-Japan

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MSCI HK Small Caps MSCI AxJ Small Caps MSCI HK

Figure 3: Hong Kong Figure 4: India

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MSCI HK Small Caps MSCI AxJ Small Caps MSCI HK

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MSCI India Small Caps MSCI AxJ Small Caps MSCI India

Figure 5: Indonesia Figure 6: South Korea

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MSCI Indonesia Small Caps MSCI AxJ Small Caps MSCI Indonesia

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MSCI Korea Small Caps MSCI AxJ Small Caps MSCI Korea

Figure 7: Malaysia Figure 8: Singapore

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MSCI Malaysia Small Caps MSCI AxJ Small Caps MSCI Malaysia

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MSCI Singapore Small Caps MSCI AxJ Small Caps MSCI Singapore

Figure 9: Taiwan Figure 10: Thailand

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MSCI Taiwan Small Caps MSCI AxJ Small Caps MSCI Taiwan

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MSCI Thailand Small Caps MSCI AxJ Small Caps MSCI Thailand

Source: MSCI, Credit Suisse estimates Source: MSCI, Credit Suisse estimates

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David & Goliath 4

Take a real (estate) look at these… Figure 11: Some small cap property plays in Singapore, Taiwan and Thailand Price TP Mkt cap Last FY1 FY1 FY1 3MCompany Ticker (local) (local) (US$ mn) Rating reported P/E (x) Yield (%) P/B (x) perf.Wing Tai WTHS.SI 1.69 2.06 999 OUTPERFORM Jun 10 5.9 4.3 0.7 10.5Allgreen Properties AGRN.SI 1.14 1.53 1,350 OUTPERFORM Dec 09 11.4 3.5 0.7 9.6Chong Hong 5534.TW 72.20 72.74 547 OUTPERFORM Dec 09 7.4 8.8 2.1 27.8Prince Housing 2511.TW 20.10 24.20 604 OUTPERFORM Dec 09 7.4 6.7 1.4 52.3Huaku 2548.TW 84.20 102.00 684 OUTPERFORM Dec 09 7.8 8.8 2.0 9.6Hung Poo 2536.TW 43.50 51.00 396 OUTPERFORM Dec 09 13.1 5.4 1.4 11.8Sinyi Realty 9940.TW 52.40 66.76 601 OUTPERFORM Dec 09 11.0 4.5 3.0 31.9L.P.N. Development LPN.BK 9.90 12.10 473 OUTPERFORM Dec 09 8.8 5.4 2.4 31.1Quality Houses QH.BK 2.54 3.35 698 OUTPERFORM Dec 09 10.1 4.7 1.6 30.3Asian Property AP.BK 7.10 8.60 538 OUTPERFORM Dec 09 9.4 3.5 1.8 47.9Source: Company data, Credit Suisse estimates

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David & Goliath 5

Small-cap index valuation and sector performance Figure 12: Valuation

Index Net profit Book value Trailing Index performance Country/ weighting (US$ mn) (US$ mn) P/E (x) P/B (x) Yield (local currency term) region (%) 2009 2010 2009 2010 2009 2010 2009 2010 (%) 1W 1M 3M 6M 1Y 2YChina 18.9 8,193 11,414 78,273 86,006 16.6 11.9 1.7 1.6 1.7 3.2 2.8 16.6 (0.3) 22.1 78.5 Hong Kong 9.3 4,447 5,069 42,018 43,888 15.1 13.2 1.6 1.5 2.8 1.9 2.9 15.2 14.6 30.3 50.2 Indonesia 10.8 2,723 4,495 26,751 29,833 28.4 17.2 2.9 2.6 1.7 4.0 7.9 22.5 28.9 54.6 90.8 Korea 15.1 5,583 10,879 80,830 89,224 19.4 10.0 1.3 1.2 1.4 0.3 3.5 12.0 13.9 13.5 22.1 Malaysia 9.9 4,336 5,134 45,068 47,566 16.4 13.8 1.6 1.5 2.6 0.6 2.1 11.7 11.2 21.9 31.7 Singapore 12.8 3,996 6,069 60,253 60,894 23.0 15.2 1.5 1.5 3.3 2.2 0.8 10.9 7.7 18.8 32.2 Taiwan 12.4 1,813 7,177 50,996 54,631 49.0 12.4 1.7 1.6 2.9 0.9 (2.5) 12.1 3.9 11.9 24.4 Thailand 10.8 5,270 5,180 44,115 46,162 14.7 15.0 1.8 1.7 2.9 (0.8) 5.8 25.5 32.9 40.2 59.6 NJA 100.0 36,361 55,417 428,303 458,205 19.7 13.0 1.7 1.6 1.8 2.0 2.9 19.5 13.1 29.6 49.5 Source: DataStream, Credit Suisse estimates

Index Net profit Book value Index performance Non-Japan Asia weighting (US$ mn) (US$ mn) P/E (x) P/B (x) (US$ term) Sector (%) 2009 2010 2009 2010 2009 2010 2009 2010 1W 1M 3M 6M 1Y 2YConsumer Discretionary 14.0 4,924 6,652 47,851 51,732 20.5 15.2 2.1 1.9 2.4 6.2 20.8 16.5 40.9 45.6 Consumer Staples 9.5 4,501 5,448 34,492 37,773 15.2 12.6 2.0 1.8 1.6 4.0 23.3 22.2 53.1 93.2 Energy 4.7 2,544 2,208 14,479 15,372 13.1 15.1 2.3 2.2 3.3 3.7 17.1 16.2 29.9 55.3 Financials 22.0 10,518 12,350 124,912 128,676 15.0 12.8 1.3 1.2 1.5 2.5 20.9 15.2 23.9 59.9 Health Care 4.1 1,383 1,708 8,815 9,906 21.1 17.1 3.3 2.9 1.1 1.7 13.0 20.6 54.6 64.3 Industrials 16.4 3,179 9,604 71,683 78,797 37.0 12.2 1.6 1.5 1.0 2.6 23.0 12.8 24.0 31.3 Information Technology 11.7 2,598 6,343 44,295 48,074 32.3 13.2 1.9 1.7 3.1 (2.3) 6.9 (3.1) 14.1 39.0 Materials 11.3 3,764 7,607 54,593 59,586 21.6 10.7 1.5 1.4 3.3 4.5 24.9 14.2 27.1 67.0 Telecommunication Services 3.6 1,329 1,933 13,298 14,275 19.3 13.3 1.9 1.8 2.8 4.9 19.8 21.3 44.2 5.6 Utilities 2.7 1,620 1,565 13,884 14,015 12.1 12.6 1.4 1.4 0.6 4.4 20.4 4.0 24.2 18.3 Source: DataStream, Credit Suisse estimates

Index Net profit Book value Index performance China weighting (US$ mn) (US$ mn) P/E (x) P/B (x) (US$ term) Sector (%) 2009 2010 2009 2010 2009 2010 2009 2010 1W 1M 3M 6M 1Y 2YConsumer Discretionary 25.0 1,402 1,939 10,765 11,896 24.2 17.5 3.2 2.9 4.3 9.1 23.1 12.7 61.7 104.4 Consumer Staples 10.4 1,114 1,348 7,841 8,572 12.7 10.5 1.8 1.7 0.7 (3.4) 11.2 (5.3) 22.9 64.3 Energy 0.5 44 146 947 1,036 16.3 4.9 0.8 0.7 6.1 (6.4) (6.7) (16.3) (29.9) (30.9)Financials 11.6 1,548 1,723 19,975 20,843 10.2 9.2 0.8 0.8 3.4 0.4 13.7 (7.5) (13.8) 34.2 Health Care 6.2 430 501 2,269 2,574 19.5 16.7 3.7 3.3 3.4 1.8 6.7 31.8 109.8 213.7 Industrials 15.2 1,634 2,440 13,254 15,305 12.6 8.4 1.6 1.3 3.1 4.5 24.4 1.3 16.1 65.6 Information Technology 7.3 222 589 6,052 6,461 44.4 16.7 1.6 1.5 2.9 (4.6) 4.7 (18.7) 22.4 75.5 Materials 15.8 1,129 2,057 10,620 12,997 19.0 10.4 2.0 1.7 2.7 0.8 14.3 (5.7) 5.2 103.1 Telecommunication Services 0.6 48 49 266 291 15.9 15.5 2.9 2.6 23.5 13.8 14.9 (4.3) 21.1 53.4 Utilities 7.4 621 623 6,283 6,030 16.2 16.2 1.6 1.7 1.8 7.4 26.8 (1.2) 30.9 40.3 Source: DataStream, Credit Suisse estimates

Index Net profit Book value Index performance Hong Kong weighting (US$ mn) (US$ mn) P/E (x) P/B (x) (US$ term) Sector (%) 2009 2010 2009 2010 2009 2010 2009 2010 1W 1M 3M 6M 1Y 2YConsumer Discretionary 32.0 1,209 1,530 10,202 11,217 17.7 14.0 2.1 1.9 1.2 6.3 14.3 21.4 44.4 52.3 Consumer Staples 0.3 16 26 227 247 12.7 7.7 0.9 0.8 8.8 9.1 25.2 39.1 25.3 76.8 Financials 36.6 1,692 1,799 18,754 18,551 14.5 13.6 1.3 1.3 0.8 5.7 24.4 24.7 28.3 33.9 Industrials 10.1 678 479 6,133 6,481 9.9 14.1 1.1 1.0 2.7 (3.2) 10.3 (7.6) 4.3 22.1 Information Technology 12.3 590 831 3,076 3,524 14.0 9.9 2.7 2.3 2.4 (2.6) 4.8 5.5 32.7 104.0 Materials 5.9 183 274 2,015 2,237 21.5 14.4 2.0 1.8 3.0 (2.7) 4.8 (3.0) 45.8 202.2 Telecommunication Services 2.8 79 129 1,609 1,630 24.1 14.8 1.2 1.2 (0.6) (1.1) 21.0 45.3 45.7 (3.9)Source: DataStream, Credit Suisse estimates

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Index Net profit Book value Index performance Indonesia weighting (US$ mn) (US$ mn) P/E (x) P/B (x) (US$ term) Sector (%) 2009 2010 2009 2010 2009 2010 2009 2010 1W 1M 3M 6M 1Y 2YConsumer Discretionary 2.1 81 92 854 916 20.4 18.0 1.9 1.8 5.3 4.9 1.9 (0.5) 25.6 25.8 Consumer Staples 23.8 870 941 4,917 5,391 21.2 19.6 3.7 3.4 4.9 19.7 35.2 41.5 106.5 225.7 Energy 20.6 756 854 3,142 3,448 21.0 18.6 5.1 4.6 3.0 4.0 17.3 25.8 46.2 63.4 Financials 25.4 822 1,248 7,800 8,847 23.9 15.7 2.5 2.2 4.1 3.8 19.6 35.2 39.5 85.6 Health Care 3.5 103 147 479 582 26.5 18.6 5.7 4.7 3.2 1.0 32.5 45.1 97.7 202.6 Industrials 4.6 (354) 225 2,283 2,632 (10.1) 15.9 1.6 1.4 3.1 7.7 40.3 39.6 39.4 58.7 Materials 9.0 43 528 3,741 4,017 161.8 13.2 1.9 1.7 3.0 3.2 15.8 7.4 17.9 17.0 Telecommunication Services 10.9 402 461 3,535 4,000 21.0 18.3 2.4 2.1 4.7 9.2 16.3 15.9 84.3 (18.5)Source: DataStream, Credit Suisse estimates

Index Net profit Book value Index performance Korea weighting (US$ mn) (US$ mn) P/E (x) P/B (x) (US$ term) Sector (%) 2009 2010 2009 2010 2009 2010 2009 2010 1W 1M 3M 6M 1Y 2YConsumer Discretionary 14.6 618 1,254 11,039 12,200 25.6 12.6 1.4 1.3 0.7 6.4 15.7 21.5 23.7 25.6 Consumer Staples 7.8 696 1,122 8,753 9,873 12.2 7.6 1.0 0.9 (2.0) (1.7) (0.6) 3.2 8.1 2.3 Financials 12.4 1,367 1,771 11,939 13,715 9.8 7.6 1.1 1.0 (0.1) (4.5) 1.2 1.1 (1.9) 41.9 Health Care 7.7 422 538 3,091 3,457 19.7 15.5 2.7 2.4 (1.1) 6.4 8.3 2.2 (6.7) (6.0)Industrials 18.8 324 1,500 12,675 13,884 62.9 13.6 1.6 1.5 (0.2) 6.5 19.6 13.2 10.4 (2.5)Information Technology 7.9 444 755 4,789 5,440 19.3 11.3 1.8 1.6 3.3 0.3 (5.6) 8.4 8.9 90.6 Materials 25.8 1,306 3,109 21,718 23,307 21.4 9.0 1.3 1.2 1.1 7.0 27.7 30.3 34.5 63.0 Telecommunication Services 4.2 209 686 4,725 5,120 21.7 6.6 1.0 0.9 (2.2) (5.9) (10.6) (4.0) (11.7) (28.3)Utilities 1.0 195 144 2,101 2,229 5.3 7.2 0.5 0.5 0.9 1.4 1.4 (0.6) (9.5) (26.6)Source: DataStream, Credit Suisse estimates

Index Net profit Book value Index performance Malaysia weighting (US$ mn) (US$ mn) P/E (x) P/B (x) (US$ term) Sector (%) 2009 2010 2009 2010 2009 2010 2009 2010 1W 1M 3M 6M 1Y 2YConsumer Discretionary 12.3 682 807 5,889 6,069 12.8 10.8 1.5 1.4 3.5 4.5 11.7 19.1 36.7 49.8 Consumer Staples 15.2 628 759 5,992 6,403 17.2 14.2 1.8 1.7 1.5 1.4 15.2 16.7 22.4 33.0 Energy 10.1 547 466 4,174 4,065 13.1 15.4 1.7 1.8 (1.5) 0.9 11.8 2.4 9.0 6.1 Financials 18.9 1,059 1,045 10,126 10,574 12.6 12.8 1.3 1.3 (0.4) 1.0 7.3 3.6 21.6 32.2 Health Care 3.7 168 213 801 901 15.5 12.2 3.3 2.9 (3.3) (5.9) (2.3) 3.5 62.5 131.1 Industrials 29.4 889 1,254 11,147 12,477 23.5 16.7 1.9 1.7 0.4 4.3 13.7 14.7 17.8 34.2 Information Technology 0.8 (5) 23 291 299 (110.8) 23.8 1.9 1.9 (1.0) 0.1 (4.0) (7.5) 0.2 (19.5)Materials 8.8 310 497 6,049 6,172 20.2 12.6 1.0 1.0 2.1 1.3 20.2 15.1 25.1 31.8 Utilities 0.7 59 69 598 606 9.0 7.7 0.9 0.9 (2.2) (5.8) (1.3) (4.6) 0.8 (0.1)Source: DataStream, Credit Suisse estimates

Index Net profit Book value Index performance Singapore weighting (US$ mn) (US$ mn) P/E (x) P/B (x) (US$ term) Sector (%) 2009 2010 2009 2010 2009 2010 2009 2010 1W 1M 3M 6M 1Y 2YConsumer Discretionary 4.4 230 189 3,669 3,646 17.4 21.2 1.1 1.1 1.9 0.3 5.0 1.8 (10.7) (26.8)Consumer Staples 7.2 559 528 3,699 3,984 11.8 12.5 1.8 1.7 0.4 (4.7) 9.6 6.1 20.2 99.7 Energy 3.7 259 241 1,252 1,706 13.1 14.1 2.7 2.0 1.4 (2.5) 7.9 (7.7) 0.7 17.0 Financials 43.7 1,916 2,516 36,769 35,475 21.0 16.0 1.1 1.1 2.8 0.9 11.1 5.3 15.3 29.1 Health Care 5.2 141 182 1,463 1,606 34.0 26.3 3.3 3.0 1.8 0.7 6.1 27.9 75.6 76.9 Industrials 24.5 349 1,729 9,851 10,877 64.6 13.0 2.3 2.1 2.7 3.2 15.6 15.4 30.8 40.3 Information Technology 3.0 43 189 2,270 2,288 65.1 14.8 1.2 1.2 1.2 (3.3) 5.6 3.6 5.0 30.2 Materials 1.2 48 71 464 496 22.4 15.2 2.3 2.2 3.8 0.9 10.1 (4.4) 9.5 (31.5)Telecommunication Services 5.0 350 312 284 235 13.1 14.7 16.1 19.5 (1.8) 4.9 8.5 10.4 21.4 12.7 Utilities 2.2 102 112 531 582 20.0 18.0 3.8 3.5 4.1 (2.9) 4.4 (13.8) 8.0 (16.7)Source: DataStream, Credit Suisse estimates

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Index Net profit Book value Index performance Taiwan weighting (US$ mn) (US$ mn) P/E (x) P/B (x) (US$ term) Sector (%) 2009 2010 2009 2010 2009 2010 2009 2010 1W 1M 3M 6M 1Y 2YConsumer Discretionary 7.7 311 384 3,125 3,344 22.1 17.8 2.2 2.0 0.8 (0.6) 24.3 13.3 11.3 20.0 Financials 12.1 850 988 8,664 9,106 12.6 10.9 1.2 1.2 (1.0) (1.1) 26.1 19.1 17.4 49.7 Industrials 18.6 (596) 1,786 10,549 11,356 (27.7) 9.2 1.6 1.5 (4.6) (7.5) 17.1 15.3 20.4 10.8 Information Technology 58.2 1,121 3,706 26,290 28,410 46.1 13.9 2.0 1.8 3.3 (1.3) 6.0 (3.6) 7.7 27.2 Materials 3.5 127 311 2,368 2,416 24.1 9.9 1.3 1.3 1.7 (1.1) 22.5 14.0 22.7 53.8 Source: DataStream, Credit Suisse estimates

Index Net profit Book value Index performance Thailand weighting (US$ mn) (US$ mn) P/E (x) P/B (x) (US$ term) Sector (%) 2009 2010 2009 2010 2009 2010 2009 2010 1W 1M 3M 6M 1Y 2YConsumer Discretionary 10.7 392 455 2,308 2,444 21.2 18.2 3.6 3.4 (4.7) 4.9 25.7 30.2 43.8 27.2 Consumer Staples 12.6 618 724 3,063 3,303 15.8 13.5 3.2 3.0 (4.0) 0.1 33.3 74.3 146.5 253.2 Energy 8.0 938 502 4,964 5,116 6.6 12.4 1.3 1.2 9.1 9.2 6.0 10.0 0.9 66.0 Financials 26.2 1,264 1,261 10,885 11,566 16.1 16.1 1.9 1.8 (3.2) 7.4 32.5 29.9 42.9 85.0 Health Care 3.0 118 127 713 786 19.4 18.1 3.2 2.9 (5.2) (0.5) 15.1 15.7 26.0 (7.4)Industrials 8.2 255 191 5,792 5,786 24.9 33.2 1.1 1.1 (2.4) 9.4 25.6 28.7 30.7 37.6 Information Technology 2.8 182 248 1,527 1,652 11.9 8.7 1.4 1.3 (7.1) (8.7) 14.2 28.9 30.9 26.1 Materials 13.8 618 759 7,617 7,943 17.3 14.1 1.4 1.3 7.4 11.5 20.5 34.2 28.0 55.7 Telecommunication Services 7.1 242 296 2,878 2,998 22.7 18.6 1.9 1.8 4.6 7.7 52.7 67.8 58.1 106.9 Utilities 7.7 643 616 4,370 4,567 9.3 9.7 1.4 1.3 (3.1) 1.3 13.5 13.8 13.8 27.2 Source: DataStream, Credit Suisse estimates

D&G15 portfolio – the small-cap picks in the region Mkt Cap Price Year P/E (x) Potential CS

Company Ticker (US$ mn) Cncy Price End FY1 FY2 TP Gain (%) Rating China/Hong Kong Nine Dragons 2689.HK 6,799 HKD 11.36 Jun 18.9 15.4 10.85 (4.5) U Skyworth 0751.HK 1,553 HKD 4.75 Mar 8.3 6.5 7.50 57.9 O Great Eagle 0041.HK 1,767 HKD 22.05 Dec 12.6 11.8 27.95 26.8 O Varotronix 0710.HK 119 HKD 2.86 Dec 5.6 4.5 3.75 31.1 O Korea LIG Insurance 002550.KS 1,182 KRW 23,000 Mar 7.0 5.9 31,300 36.1 O Samsung Securities 016360.KS 3,463 KRW 60,500 Mar 0.0 0.0 47,000 (22.3) U Malaysia AirAsia AIRA.KL 1,617 MYR 1.82 Dec 8.1 7.8 2.05 12.6 O Singapore Cosco (Singapore) COSC.SI 2,734 MYR 1.64 Dec 21.8 19.4 1.20 (26.8) U Taiwan Nanya PCB 2408.TW 2,140 SGD 19.90 Dec (3.2) 22.3 18.00 (9.5) U Prince Housing 2511.TW 604 TWD 20.10 Dec 7.4 5.6 24.20 20.4 O Thailand Quality Houses QH.BK 698 THB 2.54 Dec 10.1 7.8 3.35 31.9 O Source: Company data, Credit Suisse estimates

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Hong Kong – Street talk * SmarTone (0315.HK, HK$8.52, U, TP HK$7.00) full-year profit up 5.9x. SmarTone posted a 5.9x increase in net earnings to HK$294 mn for the year ended June 2010. EPS came in at HK$0.55 and an interim DPS of HK$0.35 was recommended. Handset subsidy amortisation in the period rose by 10% to HK$280 mn. (8-Sep)

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SmarTone MSCI Hong Kong

Johnson Electric (0179.HK, HK$3.79, O [V], TP HK$4.40) appoints Joseph Yam. Yam Chi Kwong Joseph, the former head of the Hong Kong Monetary Authority, has been appointed by Johnson Electric as an independent non-executive director for a term of two years with effect from September 30. Johnson Electric’s shares rose more than 3% on Wednesday on the back of the news. (9-Sep)

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Johnson Electric MSCI Hong Kong

Kong Sun (0295.HK, HK$0.33, NR) to raise at least HK$59.91 mn via rights issue. Kong Sun plans to issue not less than 240 mn offer shares at HK$0.25 each on the basis of one offer share for every two shares held. The company intends to utilize the net proceeds for general working capital and future business development. (9-Sep)

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Kong Sun MSCI Hong Kong

North Asia Resources (0061.HK, HK$1.41, NR) issues unlisted CBs. North Asia Resources has issued convertible bonds in the aggregate principal amount of US$33 mn in two tranches. Proceeds from the issue is around HK$243 mn, which will be used for general working capital or acquisition of iron concession in Mongolia. (9-Sep)

40

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80

100

120

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North Asia Resources MSCI Hong Kong

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Sunlight REIT (0435.HK, HK$2.29, NR) distributable income down 31%. Sunlight REIT’s distributable income went down almost 31% to HK$187 mn for the year ended June 2010. DPU for the year was HK$0.144, down 41% YoY. Final DPU fell almost 50% to HK$0.0751. (10-Sep)

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110

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130

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Sunlight REIT MSCI Hong Kong

*Source: China Press Digest, CIS, DataStream

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Who’s saying what? I.T (0999.HK, HK$4.19, NR) Company visit – an expanding business along with risingvaluations

■ We met with I.T management last week.

■ Hong Kong operations are more mature – management expectsgrowth to be more in line with market growth, but with limited market share gain. According to the company, for March-July 2010, its HK sales were + 20% YoY and SSS growth +13%, in line14.9% market growth during the same period.

■ I.T expects the China platform to be its growth driver. It targets 30% sales area expansion in FY2/11. China sales were +20%YoY in March-July, with SSS +6%, according to I.T.

■ I.T expects operating margin upside from the continued shift ofsales mix to more in-house brand sales and increasing salesefficiency of staff through training. It expects rentals to be themajor source of margin pressure, as around 30% its rentalagreements are renewed each year.

■ I.T’s valuation is catching up with its peers. It currently trades at 13.5x CY11, at a 10.4% discount to Giordano and a 29.1% discount to the average of HK/China retail plays.

I.T is a multi-brand mid- to high-end retailer

I.T is a multi-brand mid- to high-end retailer selling apparel, footwearand accessories. Its FY2/10 net profit was HK$262.7 mn on sales ofHK$3.0 bn, 60.7% gross margin and 10.3% operating margin.According to I.T, its HK business (71.0% sales) is more mature, whileits mainland China business (25.5% sales) would be the growth driver;it has 3.5% sales from franchised operations in other countries. I.Tsells in-house brands (49.6% sales) and over 300 international brands(47.0% sales), and generates royalty revenues from licensed brands.These are sold in the high-end I.T stores, the mid-end i.t store, the street fashion store doublepark and standalone shops. The multi-brand strategy allows it to have 187 stores in HK alone.

I.T expects its HK segment to grow in line with the market

I.T is well established in HK (around 6% market share in 2009) andexpects further market share gain to be limited. However, it sees roomfor further expansion in the HK market and plans 10% retail spacegrowth in 2010. According to I.T, for March-July 2010, its HK saleswere +20% YoY; its SSS growth was +13%, in line with HK’s 14.9%growth in apparel/footwear/allied product sales. Management seesincreasing sales in HK from mainland consumers – it estimates that30% sales from its Times Square Causeway Bay and its Festive Walk Kowloon Tong shops come from mainland Chinese shoppers.

I.T sees significant room for expansion in mainland China

I.T sees significant room for expansion in mainland China from its 134 self-managed and 44 franchised stores. Growth is expected to bemore driven by floor space expansion – I.T targets 30% sales areaexpansion in FY2/11. It plans to expand in main cities on its own and

to lower tier cities through franchise partners. The strategy in China is to expand through department stores and shopping malls. According to the company, I.T’s China sales were up around 20% during March-July, with SSS up 6%.

I.T hopes for margin improvements

I.T hopes to: 1) improve its China front-line employee’s product knowledge to increase efficiency, and thus increase the number of items purchased per transaction – the company figures show that HK generates (on average) 2.5 items per transaction, while China generates 1.5 items per transaction, and 2) shift sales mix toward the higher-margin in-house brands (with gross margins of around 70%). I.T targets 75% in-house brand sales in five years, raising gross margin up to 65%.

The major source of margin pressure would come from rentals

Around 30% of its rental agreements need to be extended each year. Management expects rental increases of 15-25% for HK rental renewals and around 15% for China. However, I.T noted that it aims to cap rental expenses at 25% of sales.

I.T’s valuation is catching up, but is still at a discount to peers

I.T now trades at 13.5x CY2011 P/E, at a 10.4% discount to its closest peer Giordano and at a 29.1% discount to the 19.0x average of HK/China retail plays.

Gabriel Chan, CFA / Research Analyst / 852 2101 6523 /

[email protected] Extracted from The Asian Daily 09 Sep 2010

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Valuations of Credit Suisse HK small-cap watch list* Market CS target/ Potential Credit Year HOLT CFROI

Cap Price HOLT warranted return Suisse end CFROI SpreadCompany RIC (US$ mn) (HK$) price (HK$) (%) Rating month 2009 2010 2009 2010 (%) (%) 1W 1M 3MAeon Credit 0900.HK 366 6.80 5.38 (20.9) Not rated Feb n.a. 10.4 1.6 1.4 12.3 4.9 1.5 0.7 7.6Aeon Stores 0984.HK 478 14.30 3.73 (73.9) Not rated Dec 22.2 19.2 3.3 2.9 5.5 (1.7) 1.3 22.2 24.3Arts Optical 1120.HK 180 3.65 3.38 (7.4) Not rated Dec 11.4 13.2 1.3 1.2 9.7 3.0 (1.9) (4.5) 10.6Asia Financial 0662.HK 397 3.03 4.41 45.4 Not rated Dec 9.4 7.8 0.6 0.6 4.6 (2.8) 0.0 (2.6) 5.6Asia Sat. Telecom 1135.HK 653 12.98 20.29 56.3 Not rated Dec 9.6 9.8 0.9 0.9 6.3 0.3 2.9 6.0 10.6Café De Coral 0341.HK 1,548 21.40 12.37 (42.2) Not rated Mar 23.9 22.3 4.4 4.0 8.6 2.5 2.9 12.6 14.8Champion REIT 2778.HK 2,430 3.83 4.34 13.3 Not rated Dec 4.7 24.7 0.7 0.7 3.5 (3.2) 2.1 (2.5) 7.6Chen Hsong 0057.HK 243 3.00 4.00 33.3 OUTPERFORM Mar 13.8 7.9 0.8 0.7 4.4 (2.1) 3.4 (6.3) 11.1Chong Hing Bank 1111.HK 948 16.94 12.68 (25.2) Not rated Dec 32.0 17.1 1.2 1.2 4.2 (3.0) 2.7 (5.9) 14.5Chow Sang Sang 0116.HK 1,368 15.70 14.42 (8.2) Not rated Dec 16.5 14.1 2.4 2.1 11.9 5.3 0.8 (0.9) 14.9Comba Telecom Sys. 2342.HK 1,402 9.16 13.50 47.4 OUTPERFORM Dec 16.9 14.1 4.2 3.5 20.1 14.1 11.7 15.2 0.0Dachan Food 3999.HK 202 1.55 2.45 58.0 Not rated Dec 12.7 7.7 0.9 0.8 8.1 1.3 0.6 (7.2) 11.5Dah Chong Hong 1828.HK 1,660 7.17 6.13 (14.5) Not rated Dec 18.2 11.6 2.4 2.2 9.0 2.1 9.3 24.9 53.9Dah Sing Banking 2356.HK 1,826 12.76 11.59 (9.2) Not rated Dec 21.3 13.1 1.3 1.2 3.2 (3.9) 2.9 8.5 27.6Dah Sing Financial 0440.HK 1,708 51.00 49.05 (3.8) Not rated Dec 21.2 12.6 1.2 1.1 3.9 (3.2) 2.6 3.9 17.5Daphne 0210.HK 1,849 8.77 4.96 (43.5) Not rated Dec 36.4 20.7 6.5 5.5 9.6 3.0 1.3 11.4 7.3Dickson Concepts 0113.HK 268 5.59 6.50 16.3 Not rated Mar n.a. 6.5 n.a. 1.0 7.3 (0.8) 2.8 (6.5) 27.0Fairw ood 0052.HK 134 8.25 3.81 (53.8) Not rated Mar 11.6 9.8 2.6 2.5 4.9 (3.2) (1.1) (0.6) 7.0First Pacific 0142.HK 3,204 6.40 8.02 25.3 Not rated Dec 7.0 9.5 1.7 1.8 12.3 5.8 9.4 10.3 26.2Fubon Bank 0636.HK 564 3.74 3.58 (4.3) Not rated Dec (71.9) 16.3 1.1 1.0 4.0 (3.2) 1.1 4.8 15.1Galax y Entertainment 0027.HK 3,016 5.94 6.45 8.6 NEUTRAL Dec 20.3 24.6 2.9 2.8 7.3 1.0 1.4 8.6 63.2Giordano 0709.HK 845 4.40 2.81 (36.3) Not rated Dec 22.8 14.8 3.1 2.9 5.8 (1.3) (2.4) 10.3 36.2Glorious Sun 0393.HK 393 2.88 1.81 (37.0) Not rated Dec 11.8 10.0 1.5 1.4 6.0 (1.4) (3.4) (4.3) (3.0)Great Eagle 0041.HK 1,767 22.05 27.95 26.7 OUTPERFORM Dec 12.0 12.6 0.6 0.6 3.7 (2.6) 3.8 3.3 10.4HKC 0190.HK 681 0.51 0.88 73.3 Not rated Dec 3.5 25.5 0.4 0.4 (1.7) (8.4) 6.3 (3.8) 3.0HKR 0480.HK 537 3.09 23.37 656.4 Not rated Mar 3.2 1.6 n.a. 0.4 0.8 (6.2) 0.3 (4.0) 29.8Hong Kong & S'hai Hotels 0045.HK 2,454 12.92 13.36 3.4 Not rated Dec 8.2 35.2 0.8 0.8 1.5 (5.0) (0.8) 1.4 0.8Hutchison Telecom HK 0215.HK 1,332 2.15 1.50 (30.2) NEUTRAL Dec 22.2 14.2 1.0 1.0 5.0 (2.2) (2.7) (2.3) 30.3

Share price performanceHK$ term (%)P/B (x)P/E (x)

CalendarizedCalendarized

* Include the Hong Kong Industrial, consumer and media companies covered by Credit Suisse, and small-cap stocks in HOLT® database with market cap between US$50 mn and US$1.5 bn. For stocks that are Not Rated, I/B/E/S consensus forecast are used. CFROI® is a registered trademark in the United States and other countries (excluding the United Kingdom) of Credit Suisse or its subsidiaries or affiliates. * Companies in bold and italic indicate constituents of Credit Suisse Hong Kong Small Cap Index

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Cap Price HOLT warranted return Suisse end CFROI SpreadCompany RIC (US$ mn) (HK$) price (HK$) (%) Rating month 2009 2010 2009 2010 (%) (%) 1W 1M 3Mi-Cable 1097.HK 254 0.98 1.34 37.1 Not rated Dec (49.0) 163.3 1.0 1.0 (0.2) (7.0) 1.0 (4.9) (17.6)I.T. 0999.HK 643 4.19 2.67 (36.4) Not rated Feb 20.3 16.4 3.4 3.2 10.8 3.0 2.9 54.6 129.0ICBC Asia 0349.HK 4,968 28.55 21.61 (24.3) Not rated Dec 14.6 15.8 2.1 2.1 16.2 9.3 (1.0) 23.9 49.5IDS 2387.HK 1,021 24.45 0.29 (98.8) Not rated Dec 33.6 n.a. 6.3 5.6 5.0 (2.1) 3.8 58.6 91.0Johnson Electric 0179.HK 1,792 3.79 4.40 16.1 OUTPERFORM Mar 31.0 14.8 1.7 1.5 8.8 2.7 9.2 0.8 (2.8)Ju Teng 3336.HK 601 4.18 9.30 122.4 Not rated Dec 6.3 5.3 1.2 0.9 12.7 6.3 0.7 (21.7) (27.3)Kingboard Chemical 0148.HK 3,967 36.30 38.20 5.2 NEUTRAL Dec 12.8 9.3 1.4 1.3 8.9 3.0 (1.4) 1.7 8.4Kingboard Laminates 1888.HK 2,938 7.61 10.19 33.9 Not rated Dec 13.9 8.8 2.7 2.5 14.5 8.6 0.8 (4.4) 13.6Kowloon Dev. 0034.HK 1,231 8.31 13.71 65.0 Not rated Dec 7.9 n.a. 0.6 0.6 5.9 (0.5) 1.7 (4.9) 9.1Lee & Man Paper 2314.HK 3,409 5.82 5.05 (13.2) NEUTRAL Mar 18.3 13.6 2.7 2.4 13.5 7.4 3.0 (1.0) 8.0Luk Fook 0590.HK 986 15.56 13.80 (11.3) Not rated Mar 16.4 12.3 n.a. 4.0 20.2 13.2 (3.4) 22.5 73.1Luks 0366.HK 194 2.95 3.83 29.8 Not rated Dec 14.1 11.4 0.7 0.6 4.7 (2.1) 1.4 (11.9) (8.1)Lung Kee 0255.HK 350 4.33 5.15 18.9 OUTPERFORM Dec 12.2 9.8 1.4 1.3 9.2 2.9 (5.0) (2.7) 8.3Midland 1200.HK 638 6.84 8.60 25.8 OUTPERFORM Dec 6.9 9.1 2.8 2.8 19.7 13.1 8.7 (14.8) 15.0Nagacorp 3918.HK 343 1.28 1.60 24.8 Not rated Dec 13.3 10.2 1.2 1.1 9.5 3.0 6.7 39.1 42.2Natural Beauty 0157.HK 397 1.54 0.87 (43.6) Not rated Dec 20.5 n.a. 3.5 3.5 13.4 7.0 2.7 6.9 10.0Neo-Neon 1868.HK 587 4.98 3.58 (28.2) Not rated Dec 25.5 21.7 1.3 1.2 3.4 (3.0) 0.4 11.2 16.9Nex t Media 0282.HK 326 1.05 1.32 26.1 Not rated Mar 8.4 10.7 n.a. 0.7 7.8 1.3 5.0 (6.3) (12.5)OOIL 0316.HK 4,715 58.55 76.80 31.2 OUTPERFORM Dec (12.6) 6.7 1.2 0.9 (3.4) (10.2) 1.6 (5.4) 17.8Oriental Press 0018.HK 352 1.14 1.32 15.8 Not rated Mar 8.4 10.2 n.a. 0.9 9.1 2.8 0.9 (3.4) 9.6Pacific Basin 2343.HK 1,404 5.65 6.20 9.7 NEUTRAL Dec 12.3 15.1 1.0 0.9 3.4 (3.7) 0.0 (1.6) 15.3Pacific Textiles 1382.HK 787 4.27 4.80 12.4 OUTPERFORM Mar 8.8 7.1 1.9 1.7 21.1 15.1 5.4 (5.1) 16.7Pico Far East 0752.HK 214 1.38 1.61 16.6 Not rated Oct 12.4 8.9 1.7 1.6 9.6 2.8 1.5 2.2 6.2Poly (HK) 0119.HK 4,081 8.80 9.90 12.5 OUTPERFORM Dec 30.4 24.0 1.8 1.4 3.3 (2.6) 4.0 (3.8) 18.8Pou Sheng 3813.HK 613 1.11 1.17 5.2 Not rated Sep 6.4 57.7 n.a. 0.7 0.1 (6.4) 1.8 2.8 22.0Public Financial 0626.HK 639 4.52 3.04 (32.7) Not rated Dec 18.0 n.a. 0.9 0.8 10.9 3.7 2.7 4.1 13.6Sa Sa 0178.HK 1,049 5.84 7.10 21.6 OUTPERFORM Mar 22.2 18.6 6.9 6.4 14.3 8.0 0.9 (4.4) 3.2Samling Global 3938.HK 338 0.61 0.90 47.5 OUTPERFORM Jun (19.6) 52.3 0.5 0.7 (2.1) (9.4) 3.4 (12.9) (14.1)Samson 0531.HK 549 1.40 1.73 23.3 Not rated Dec 13.9 9.2 1.0 0.9 6.7 0.6 2.9 2.9 21.7

P/E (x) P/B (x)Share price performance

HK$ term (%)Calendarized Calendarized


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Cap Price HOLT warranted return Suisse end CFROI SpreadCompany RIC (US$ mn) (HK$) price (HK$) (%) Rating month 2009 2010 2009 2010 (%) (%) 1W 1M 3MSCMP 0583.HK 283 1.41 1.15 (18.5) Not rated Dec 15.8 n.a. 1.1 1.0 1.7 (4.5) 6.0 (0.7) 4.4Shun Tak 0242.HK 1,120 4.30 6.68 55.3 OUTPERFORM Dec 3.2 14.1 0.6 0.6 1.7 (4.7) (0.9) (13.5) 7.0SIM Technology 2000.HK 353 1.75 1.24 (28.9) Not rated Dec 20.6 n.a. 1.8 1.4 15.3 8.6 5.4 (1.7) 12.9SJM 0880.HK 4,915 7.37 9.00 22.1 OUTPERFORM Dec 40.7 11.7 4.4 3.5 7.3 1.2 0.0 7.6 29.8SmarTone 0315.HK 576 8.52 7.00 (17.8) UNDERPERFORM Jun 30.1 16.2 1.7 1.7 4.5 (2.9) 4.5 1.5 3.9Stella 1836.HK 1,495 14.62 15.47 5.8 Not rated Dec 14.6 13.4 1.9 1.8 12.8 7.2 0.3 0.0 (0.7)Sun Hung Kai & Co. 0086.HK 1,179 5.24 7.57 44.4 Not rated Dec 7.2 5.7 0.7 0.7 12.3 5.2 2.1 (4.9) 30.6Sunlight REIT 0435.HK 461 2.29 2.08 (9.2) Not rated Jun 27.9 (27.6) 0.8 0.8 2.5 (4.9) 1.8 9.0 18.0Taifook Securities 0665.HK 518 5.68 2.23 (60.8) Not rated Jun n.a. 28.2 2.0 2.0 7.5 0.1 18.6 11.4 28.2Techtronic 0669.HK 1,468 7.10 7.00 (1.4) NEUTRAL Dec 22.3 13.5 1.4 1.3 7.9 1.0 0.6 9.4 0.6Texwinca 0321.HK 1,362 7.93 8.78 10.7 NEUTRAL Mar 10.9 9.2 2.4 2.1 8.4 1.6 0.3 0.9 3.8TPV 0903.HK 1,428 4.73 8.30 75.5 Not rated Dec 9.1 8.7 0.9 0.8 12.1 6.0 3.7 (4.6) 3.1Transport Int'l 0062.HK 1,244 23.95 27.08 13.1 Not rated Dec 14.3 13.4 1.4 1.4 3.9 (2.0) (0.2) (3.4) 5.0Truly 0732.HK 657 10.14 11.70 15.4 NEUTRAL Dec 15.6 10.1 1.4 1.2 7.4 0.5 0.6 (9.1) 15.9Varitronix 0710.HK 119 2.86 3.75 31.1 OUTPERFORM Dec (3.4) 5.6 0.7 0.7 2.6 (4.8) 1.4 12.6 24.3Victory City 0539.HK 249 1.82 2.18 19.8 OUTPERFORM Mar 6.0 5.1 n.a. 0.6 8.5 0.7 4.6 7.7 25.5Vitasoy 0345.HK 812 6.19 3.79 (38.8) Not rated Mar 25.2 21.9 n.a. 4.6 12.0 6.0 1.5 (1.1) 4.0VTech 0303.HK 2,531 79.25 101.00 27.4 OUTPERFORM Mar 13.1 11.1 5.1 4.6 20.8 15.4 (0.1) (3.7) 8.6Win Hanv erky 3322.HK 198 1.21 1.30 7.7 Not rated Dec 12.6 n.a. 0.8 0.8 7.5 0.4 7.1 15.2 6.1Wing Hang Bank 0302.HK 3,165 83.35 62.11 (25.5) Not rated Dec 20.4 15.0 2.0 1.8 9.5 2.6 (2.6) 0.4 18.1Yip's Chemical 0408.HK 558 7.87 10.65 35.3 Not rated Mar n.a. 9.8 n.a. 1.8 13.6 6.8 3.4 (0.6) 9.0Yue Yuen 0551.HK 5,241 24.70 27.50 11.3 NEUTRAL Sep 11.4 11.4 1.9 1.6 9.9 4.2 (2.4) (2.9) 7.9

Calendarized Calendarized Share price performanceP/E (x) P/B (x) HK$ term (%)


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Hong Kong – Screening Absolute price performance - top & bottom 10 companies Absolute price performance - top & bottom 10 companies Absolute price performance - top & bottom 10 companies Price 1W return Price 1M return Price 3M returnCompany RIC (HK$) (%) Company RIC (HK$) (%) Company RIC (HK$) (%)Winners Winners Winners Taifook Securities 0665.HK 5.68 18.6 IDS 2387.HK 24.45 58.6 I.T. 0999.HK 4.19 129.0 Comba Telecom Sys. 2342.HK 9.16 11.7 I.T. 0999.HK 4.19 54.6 IDS 2387.HK 24.45 91.0 First Pacific 0142.HK 6.40 9.4 Nagacorp 3918.HK 1.28 39.1 Luk Fook 0590.HK 15.56 73.1 Dah Chong Hong 1828.HK 7.17 9.3 Dah Chong Hong 1828.HK 7.17 24.9 Galaxy Entertainment 0027.HK 5.94 63.2 Johnson Electric 0179.HK 3.79 9.2 ICBC Asia 0349.HK 28.55 23.9 Dah Chong Hong 1828.HK 7.17 53.9 Midland 1200.HK 6.84 8.7 Luk Fook 0590.HK 15.56 22.5 ICBC Asia 0349.HK 28.55 49.5 Win Hanverky 3322.HK 1.21 7.1 Aeon Stores 0984.HK 14.30 22.2 Nagacorp 3918.HK 1.28 42.2 Nagacorp 3918.HK 1.28 6.7 Win Hanverky 3322.HK 1.21 15.2 Giordano 0709.HK 4.40 36.2 Melco 0200.HK 3.30 6.5 Comba Telecom Sys. 2342.HK 9.16 15.2 Sun Hung Kai & Co. 0086.HK 5.24 30.6 HKC 0190.HK 0.51 6.3 Café De Coral 0341.HK 21.40 12.6 Hutchison Telecom HK 0215.HK 2.15 30.3 Losers Losers Losers Lung Kee 0255.HK 4.33 (5.0) Ju Teng 3336.HK 4.18 (21.7) Ju Teng 3336.HK 4.18 (27.3)Glorious Sun 0393.HK 2.88 (3.4) Midland 1200.HK 6.84 (14.8) i-Cable 1097.HK 0.98 (17.6)Luk Fook 0590.HK 15.56 (3.4) Shun Tak 0242.HK 4.30 (13.5) Samling Global 3938.HK 0.61 (14.1)Hutchison Telecom HK 0215.HK 2.15 (2.7) Samling Global 3938.HK 0.61 (12.9) Next Media 0282.HK 1.05 (12.5)Giordano 0709.HK 4.40 (2.4) Luks 0366.HK 2.95 (11.9) Luks 0366.HK 2.95 (8.1)Arts Optical 1120.HK 3.65 (1.9) Truly 0732.HK 10.14 (9.1) Glorious Sun 0393.HK 2.88 (3.0)Kingboard Chemical 0148.HK 36.30 (1.4) ASM Pacific 0522.HK 65.00 (8.6) Johnson Electric 0179.HK 3.79 (2.8)Fairwood 0052.HK 8.25 (1.1) Dachan Food 3999.HK 1.55 (7.2) Stella 1836.HK 14.62 (0.7)ICBC Asia 0349.HK 28.55 (1.0) Dickson Concepts 0113.HK 5.59 (6.5) Shun Tak 0242.HK 4.30 (0.9) Chen Hsong 0057.HK 3.00 (6.3) Price-to-earnings - most & least expensive 10 companies Price-to-book - most & least expensive 10 companies CFROI® Spread - top & bottom 10 companies Price 10 P/E Price 10 P/B Price CFROI® SpreadCompany RIC (HK$) (x) Company RIC (HK$) (x) Company RIC (HK$) (%)Winners Winners Winners HKR 0480.HK 3.09 1.6 HKR 0480.HK 3.09 0.4 VTech 0303.HK 79.25 15.4Victory City 0539.HK 1.82 5.1 HKC 0190.HK 0.51 0.4 Pacific Textiles 1382.HK 4.27 15.1Ju Teng 3336.HK 4.18 5.3 Melco 0200.HK 3.30 0.6 Comba Telecom Sys. 2342.HK 9.16 14.1Varitronix 0710.HK 2.86 5.6 Kowloon Dev. 0034.HK 8.31 0.6 Luk Fook 0590.HK 15.56 13.2Sun Hung Kai & Co. 0086.HK 5.24 5.7 Victory City 0539.HK 1.82 0.6 Midland 1200.HK 6.84 13.1Dickson Concepts 0113.HK 5.59 6.5 Asia Financial 0662.HK 3.03 0.6 ICBC Asia 0349.HK 28.55 9.3Pacific Textiles 1382.HK 4.27 7.1 Great Eagle 0041.HK 22.05 0.6 Kingboard Laminates 1888.HK 7.61 8.6Dachan Food 3999.HK 1.55 7.7 Shun Tak 0242.HK 4.30 0.6 SIM Technology 2000.HK 1.75 8.6Asia Financial 0662.HK 3.03 7.8 Luks 0366.HK 2.95 0.6 Sa Sa 0178.HK 5.84 8.0Chen Hsong 0057.HK 3.00 7.9 Champion REIT 2778.HK 3.83 0.7 Lee & Man Paper 2314.HK 5.82 7.4 Losers Losers Losers i-Cable 1097.HK 0.98 163.3 Sa Sa 0178.HK 5.84 6.4 OOIL 0316.HK 58.55 (10.2)Pou Sheng 3813.HK 1.11 57.7 IDS 2387.HK 24.45 5.6 Samling Global 3938.HK 0.61 (9.4)Samling Global 3938.HK 0.61 52.3 Daphne 0210.HK 8.77 5.5 Melco 0200.HK 3.30 (8.8)Hong Kong & S'hai Hotels 0045.HK 12.92 35.2 Vitasoy 0345.HK 6.19 4.6 HKC 0190.HK 0.51 (8.4)Taifook Securities 0665.HK 5.68 28.2 VTech 0303.HK 79.25 4.6 i-Cable 1097.HK 0.98 (7.0)HKC 0190.HK 0.51 25.5 Café De Coral 0341.HK 21.40 4.0 Pou Sheng 3813.HK 1.11 (6.4)Champion REIT 2778.HK 3.83 24.7 Luk Fook 0590.HK 15.56 4.0 HKR 0480.HK 3.09 (6.2)Galaxy Entertainment 0027.HK 5.94 24.6 SJM 0880.HK 7.37 3.5 Hong Kong & S'hai Hotels 0045.HK 12.92 (5.0)Poly (HK) 0119.HK 8.80 24.0 Natural Beauty 0157.HK 1.54 3.5 Sunlight REIT 0435.HK 2.29 (4.9)Café De Coral 0341.HK 21.40 22.3 Comba Telecom Sys. 2342.HK 9.16 3.5 Varitronix 0710.HK 2.86 (4.8)

* For stocks that are not rated, I/B/E/S consensus forecast numbers are used. CFROI® Spread is the difference between CFROI® and market implied discount rate. A larger number indicates that more value is created by a company

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China – Street talk * Zhaojin Mining (1818.HK, HK$20.75, NR) to construct a gold production plant. Zhaojin Mining plans to construct a gold production plant with a processing capacity of 2,000 tons per day for about Rmb500 mn within the next three years. The gold mining firm has partnered with the Government of Qinghe County, Xingjiang, to construct the plant located in Qinghe County. (6-Sep)

60

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Zhaojin Mining MSCI China

Longrun Tea (2898.HK, HK$0.54, NR) to acquire teahouses in China. Longrun Tea is planning to acquire Tea Story (not listed), a chain of trendy teahouses in the mainland for Rmb5 mn. Major products served in Tea Story trendy teahouses include bubble tea, cocoa drinks, fruity drinks, shakes and Taiwanese snacks and light refreshments. There are over 400 Tea Story trendy teahouses in China, mainly located in Hunan, Yunnan, Guangdong and Zhejiang Provinces. (7-Sep)

40

60

80

100

120

09/09 12/09 03/10 06/10 09/10

Longrun Tea MSCI China

361 Degrees (1361.HK, HK$6.40, NR) contracted sales up. 361 Degrees announced that 2011 contracted sales for spring and summer rose 20% YoY. Also, the number of “361 Towns” stores has been increased to five. (8-Sep)

60

100

140

180

220

09/09 12/09 03/10 06/10 09/10

361 Degrees MSCI China

China Grand Forestry (0910.HK, HK$0.255, NR) to place 1 bn shares. China Grand Forestry intends to place 1 bn shares at a price of HK$0.21 per share. The net proceeds from the placing is expected to amount to around HK$205 mn. The company plans to use the proceeds for future business investment. (9-Sep)

60

80

100

120

09/09 12/09 03/10 06/10 09/10

China Grand Forestry MSCI China

10 September 2010

David & Goliath 16

Haier Electronics (1169.HK, HK$5.76, NR) to build logistics centres in tier 3 and 4 cities. Haier Electronics aims to develop an integrated channel service business, focusing on tier 3 and tier 4 cities in the mainland. The electronics group is planning to construct 91 logistics centers throughout China, of which 11 will be operated by Haier and the remainder will be franchised. (10-Sep)

0

100

200

300

400

09/09 12/09 03/10 06/10 09/10

Haier Electronics MSCI China

*Source: China Press Digest, CIS, DataStream

10 September 2010

David & Goliath 17

China – Company updates BYD (1211.HK, HK$48.60, U [V], TP HK$40.00) Geely (0175.HK, HK$2.81, U [V], TP HK$1.92) Disappointing August auto sales adds gravity to EPS forecasts

■ According to various media sources (Bloomberg, Dow Jones and WSJ, among others) citing BYD, the company’s auto salesdeclined 6% MoM and 19% YoY to 31,069 units for August. Thiswould take its total YTD sales to around 350,000 units.

■ YTD sales represent only 58% of BYD management’s guidanceand 61% of our 2010 forecast of 570,000. Given the currentsales run-rate, we believe BYD is unlikely to achieve its ownguidance as well as our full-year estimates.

■ Besides the lacklustre performances of its three core businesses,we expect BYD to face numerous challenges in the mediumterm, including: 1) the potential foray into home appliances; and2) investigation by the Ministry of Land and Resources.

■ BYD has underperformed significantly since June; however, thede-rating is not yet complete, in our view. We see furtherdownside risks to consensus and our earnings forecasts. Weadvise investors to avoid the stock in the near term. We maintainour UNDERPERFORM rating.

Surprising MoM rebound in August sales; achieving FY target still a big challenge

■ Geely’s August sales surprisingly rebounded 10% YoY and 17% MoM to 25,303 units, versus management’s initial guidance two weeks ago for flat-to-down monthly sales, due to annual summer plant maintenance, during the interim results.

■ Key models contributing to the strong MoM rebound included Free Cruiser, Kingkong and EC718, which rose 24-49% MoM. Exports were stable MoM at around 1,500 units but stayed well below the 4,250 monthly units required to meet management’s target of 20,000 units for 2H10. Despite the MoM sales rebound, Geely has achieved only 61% of its full-year sales target of 400,000 units for 8M10, suggesting near-record monthly sales of 40,000 units for the remaining months to meet the target; we believe the company is unlikely to achieve the target.

■ While we believe in Geely’s medium-term potential with improving brand transformation, quality and ASP, we think the stock could continue to underperform the sector in the near term on weaker-than-expected sales, potential consensus earnings downgrade and expensive valuation at 13x FY11E P/E vs peers at 9-10x.

Bbg/RIC 48.4040.00 (40.00)

2,275.10 (17)6.6

59.3Free float (%) 40.4 Performance 1M 3M 12M

Absolute (%) (7.0) (24.3) (14.2)Relativ e (%) (6.7) (31.2) (18.7)

Year 12/08A 12/09A 12/10E 12/11E 12/12E26,788 39,469 51,541 66,035 80,1492,831 6,548 7,822 10,040 12,2001,021 3,794 4,194 5,451 6,6910.50 1.77 1.84 2.40 2.94n.a. n.a. 0 0 0n.a. n.a. 2.25 2.64 3.06

(36.6) 255.0 4.2 30.0 22.784.9 23.9 23.0 17.7 14.4

0 0.8 0.9 1.3 1.736.6 14.9 13.2 10.2 8.2

7.7 5.4 4.8 3.9 3.29.1 22.7 20.8 22.0 22.2

55.9 6.9 30.6 21.4 11.1

85.50 - 44.50

Rev enues (Rmb mn)

Major shareholders

110.1/ 14.2Mkt cap (HK$/US$ bn)Daily trad v al - 6m av g (US$ mn)

EBITDA (Rmb mn)Net profit (Rmb mn)

ROE (%)Net debt (net cash)/equity (%)

EPS (Rmb)

Note1:Ord/ADR=10.0000.Note2:BYD manufactures and sells batteries, handset components and automobiles. Besides, it also provides handset assembly services..

P/E (x )Div idend y ield (%)EV/EBITDA (x )

1211 HK / 1211.HKU (U) [V]

P/B (x )

Daily trad v ol - 6m av g (mn)

- Consensus EPS (Rmb)EPS grow th (%)

Rating (prev. rating)

- Change from prev . EPS (%)

Shares outstanding (mn)

Wang Chuan-fu

Price (07 Sep 10, HK$)TP (Prev. TP W)Est. pot. % chg. to TP52-w k range (W)

Bbg/RIC 2.851.92 (1.92)

7,389.66 (33)56.226.8

Free float (%) 48.5 Performance 1M 3M 12MAbsolute (%) 0.4 7.5 37.7 Relativ e (%) 2.3 (0.5) 34.8

Year 12/08A 12/09A 12/10E 12/11E 12/12E4,289 14,069 17,307 20,766 25,828

994 2,032 2,656 3,174 3,896 879 1,183 1,362 1,642 2,063

0.14 0.17 0.16 0.19 0.23 n.a. n.a. 0 0 0n.a. n.a. 0.20 0.24 0.28

136.6 16.7 (6.3) 19.3 24.317.5 15.0 16.0 13.4 10.80.6 0.8 0.9 1.1 1.4

18.7 8.9 6.7 5.2 3.83.9 2.9 2.4 2.0 1.7

20.9 18.6 18.0 18.2 19.13.6 (3.2) (7.8) (19.3) (31.3)

4.61 - 1.79

Rev enues (Rmb mn)

Major shareholders

21,060.5/ 2,710.4Mkt cap (HK$/US$ mn)Daily trad v al - 6m av g (US$ mn)

EBITDA (Rmb mn)Net profit (Rmb mn)


EPS (Rmb)

Note1:Ord/ADR=20.0000.Note2:Geely Automobile is involved in the sales and manufacture o f passenger cars in China. The company also exports its automobiles overseas.


175 HK / 0175.HKU (U) [V]

P/B (x )


- Consensus EPS (Rmb)EPS grow th (%)




Proper Glory - 51%

Price (08 Sep 10, HK$)TP (Prev. TP W)Est. pot. % chg. to TP52-w k range (W)

Price performance vs. MSCI China Price performance vs. MSCI China

70

100

130

160

190

09/09 11/09 01/10 03/10 05/10 07/10 09/10

BYD MSCI China

40

100

160

220

280

09/09 11/09 01/10 03/10 05/10 07/10 09/10

Geely MSCI China

Adrian Chan / Research Analyst / 852 2101 6469 / [email protected] Extracted from The Asian Daily 08 Sep 2010

HungBin Toh / Research Analyst / 852 2101 7481 / [email protected] Extracted from The Asian Daily 10 Sep 2010

10 September 2010

David &

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18

Valuations of Credit Suisse China small-cap watch list* Market CS target/ Potential Credit Year HOLT CFROI

Cap Price HOLT warranted return Suisse end CFROI SpreadCompany RIC (US$ mn) (HK$) price (HK$) (%) Rating month 2009 2010 2009 2010 (%) (%) 1W 1M 3MAjisen 0538.HK 1,567 11.38 5.48 (51.8) Not Rated Dec 38.6 29.6 5.1 4.4 9.2 3.0 (10.0) 23.0 44.1AMVIG 2300.HK 628 5.29 6.20 17.2 OUTPERFORM Dec 15.8 8.4 4.0 3.6 12.6 6.4 (3.5) 23.0 11.4Anhui Expressway 0995.HK 324 5.10 4.66 (8.7) Not Rated Dec 11.1 10.4 1.4 1.3 8.1 1.7 (1.2) 0.6 14.1Anhui Tianda Oil Pipe 0839.HK 113 2.92 4.51 54.5 Not Rated Dec 9.8 5.7 1.3 1.2 8.2 1.5 6.6 (11.5) (1.0)Anton Oilfield 3337.HK 207 0.77 1.12 45.5 NEUTRAL Dec 6.6 5.1 0.8 0.7 5.5 (0.9) (1.3) (2.5) 8.5Asia Cement (China) 0743.HK 697 3.48 2.46 (29.2) Not Rated Dec 7.8 11.5 0.7 0.6 5.9 (0.6) 3.0 (9.4) (2.8)Beijing Capital Land 2868.HK 336 2.56 2.97 16.1 Not Rated Dec 8.4 6.2 1.0 1.0 8.3 1.4 2.4 3.6 18.0Beijing Jingkelong 0814.HK 224 9.55 4.43 (53.6) Not Rated Dec 23.2 17.4 2.5 2.2 8.1 0.6 (1.5) 5.6 21.8Beijing North Star 0588.HK 190 2.09 1.58 (24.6) Not Rated Dec 4.1 n.a. 0.5 0.5 3.9 (3.0) 1.0 (3.2) 11.2Bosideng 3998.HK 2,911 2.91 2.06 (29.3) Not Rated Mar 22.0 17.5 2.9 2.9 14.8 9.2 4.7 24.4 50.8Brilliance China Auto. 1114.HK 2,404 3.74 2.14 (42.8) Not Rated Dec (18.1) 25.6 3.3 3.2 (7.6) (13.8) 11.0 21.8 53.3BYD 1211.HK 4,960 48.60 40.00 (17.7) UNDERPERFORM Dec 24.2 23.2 5.5 4.8 19.7 15.2 2.5 (10.0) (21.6)BYD Electronic 0285.HK 1,142 3.94 4.80 21.8 NEUTRAL Dec 10.3 8.9 1.2 1.1 14.4 8.9 1.0 (11.7) (13.0)Chaoda Modern 0682.HK 2,694 6.26 22.16 254.0 Not Rated Jun 4.3 3.9 1.1 0.9 16.6 11.0 (2.6) (27.7) (17.0)China Aerospace 0031.HK 417 1.05 1.80 71.0 Not Rated Dec 6.9 10.3 1.0 1.2 4.3 (2.0) 9.4 1.9 29.6China Aoyuan 3883.HK 417 1.24 1.71 37.9 NEUTRAL Dec 12.0 11.0 0.5 0.5 2.9 (4.0) 4.2 (0.8) 8.8China Automation 0569.HK 691 5.27 4.61 (12.5) Not Rated Dec 21.0 17.1 3.6 2.5 20.6 14.5 8.7 (3.8) (0.6)China Everbright Int'l. 0257.HK 1,692 3.61 2.06 (43.1) Not Rated Dec 31.7 24.7 2.9 2.4 7.4 1.4 3.1 0.3 19.9China Fire Safety 0445.HK 94 0.26 0.31 20.4 Not Rated Dec (6.1) n.a. 0.5 0.5 (6.8) (13.7) 3.7 10.4 3.7China Foods 0506.HK 2,048 5.70 2.83 (50.3) Not Rated Dec 27.9 30.0 2.9 2.8 12.0 6.5 (0.2) 3.4 35.1China Gas 0384.HK 1,910 4.12 4.52 9.7 OUTPERFORM Mar 24.7 21.4 4.3 3.6 8.0 1.3 1.0 5.1 15.1China Grand Forestry 0910.HK 339 0.26 0.55 114.9 Not Rated Mar (0.9) (1.8) n.a. 0.4 (50.9) (57.2) 10.4 18.1 9.9China Green 0904.HK 826 7.26 12.51 72.3 Not Rated Apr 11.2 9.4 1.9 1.6 17.0 10.8 (5.3) (19.0) 8.4China Haisheng 0359.HK 140 0.89 1.37 54.4 Not Rated Dec 9.7 4.0 1.1 1.1 8.6 0.9 (2.2) (8.2) 4.7China Huiyuan 1886.HK 1,121 5.93 2.76 (53.5) Not Rated Dec 32.6 34.5 1.6 1.4 0.1 (5.7) 3.7 (0.3) 7.8China LotSynergy 8161.HK 286 0.30 0.22 (26.3) Not Rated Dec (27.3) 16.7 2.8 2.6 (7.0) (13.8) 5.3 (7.7) (10.4)China Mengniu 2319.HK 5,299 23.70 28.00 18.1 OUTPERFORM Dec 30.6 27.3 4.2 3.8 12.3 7.1 0.4 0.0 3.7China Metal 0319.HK 243 1.88 2.81 49.3 Not Rated Dec 12.1 8.1 1.1 1.0 6.8 0.4 2.7 (4.1) (6.0)China Metal Recycling 0773.HK 1,126 8.37 12.52 49.6 Not Rated Dec 15.4 9.7 2.9 1.8 16.9 11.2 4.6 7.0 29.6

CalendarizedCalendarized Share price performanceHK$ term (%)P/B (x)P/E (x)

* Include the China Industrial, consumer and media companies covered by Credit Suisse, and small-cap stocks in HOLT® database with market cap between US$50 mn and US$1.5 bn. For stocks that are Not Rated, I/B/E/S consensus forecast are used. CFROI® is a registered trademark in the United States and other countries (excluding the United Kingdom) of Credit Suisse or its subsidiaries or affiliates. * Companies in bold and italic indicate constituents of Credit Suisse China Small Cap Index.

10 September 2010

David &

Goliath

19

Valuations of Credit Suisse China small-cap watch list * Market CS target/ Potential Credit Year HOLT CFROI

Cap Price HOLT warranted return Suisse end CFROI SpreadCompany RIC (US$ mn) (HK$) price (HK$) (%) Rating month 2009 2010 2009 2010 (%) (%) 1W 1M 3MChina Nickel 2889.HK 375 1.28 0.74 (42.5) Not Rated Dec (7.0) n.a. 0.6 0.6 (15.8) (22.9) 4.1 (0.8) 5.8China Pharma. 1093.HK 816 4.13 5.55 34.4 Not Rated Dec 6.5 8.4 1.2 1.1 16.5 10.2 (0.2) (4.8) (5.7)China Power Int'l. 2380.HK 1,111 1.69 2.25 33.1 OUTPERFORM Dec 10.5 13.9 0.4 0.6 1.6 (5.5) 0.6 (3.4) 7.6China Pow er New Energy 0735.HK 742 0.81 0.62 (23.0) Not Rated Dec 36.8 21.9 1.2 1.2 5.7 (1.2) 1.3 (8.0) 8.0China Resources Gas 1193.HK 2,028 11.14 14.20 27.5 OUTPERFORM Dec 37.4 25.1 3.1 2.8 8.0 2.0 (2.1) 2.4 15.4China Shanshui Cement 0691.HK 1,771 4.91 5.70 16.1 OUTPERFORM Dec 17.1 12.8 2.3 2.2 8.2 1.9 11.3 11.1 33.8China Shineway Pharma. 2877.HK 2,198 20.65 18.44 (10.7) Not Rated Dec 19.4 18.8 5.5 5.2 27.5 21.9 (2.1) (8.6) (11.4)China State Construction 3311.HK 1,653 4.34 2.40 (44.7) Not Rated Dec 19.1 15.9 3.0 2.2 7.7 1.4 3.8 18.9 89.5China Travel 0308.HK 1,319 1.80 1.36 (24.7) Not Rated Dec 360.0 n.a. 0.9 0.9 1.7 (4.1) 2.3 (4.3) 9.1China Water 0855.HK 488 2.80 2.25 (19.6) Not Rated Mar 14.1 10.3 1.8 1.5 8.6 1.6 0.7 0.7 15.7China Windpow er 0182.HK 806 0.86 0.82 (4.9) Not Rated Dec 25.3 21.0 1.9 1.7 17.6 11.7 4.9 7.5 22.9Chongqing Iron 1053.HK 141 2.03 0.26 (87.0) Not Rated Dec 35.6 12.3 0.6 0.5 1.1 (6.0) 4.1 (6.9) 16.7Chongqing Mch. & Elec. 2722.HK 311 2.20 1.30 (40.9) OUTPERFORM Dec 14.7 12.9 2.0 1.5 9.3 2.9 11.1 12.8 18.3Chu Kong Shipping Dev. 0560.HK 217 1.87 0.80 (57.4) Not Rated Dec 22.3 12.7 0.9 0.9 1.8 (5.8) (3.1) (4.6) 10.7CITIC 1616 1883.HK 758 2.47 2.42 (1.9) Not Rated Dec 13.1 12.8 2.8 2.6 19.0 12.9 23.5 13.8 14.9CITIC Resources 1205.HK 1,433 1.84 2.56 38.9 Not Rated Dec 96.8 14.2 1.3 1.0 2.5 (4.2) 7.6 6.4 34.3Clear Media 0100.HK 289 4.25 7.51 76.6 Not Rated Dec 70.8 14.3 0.9 0.8 14.9 7.5 (1.6) (8.8) (2.1)COSCO Int'l. 0517.HK 863 4.44 4.53 2.0 Not Rated Dec 7.9 9.6 1.0 1.0 11.5 5.6 0.0 0.5 19.0Dalian Port 2880.HK 429 3.14 3.85 22.6 OUTPERFORM Dec 13.3 12.9 1.2 1.1 6.0 (0.4) 1.0 (6.8) 1.0Digital China 0861.HK 1,545 11.76 12.97 10.3 Not Rated Mar 14.9 13.5 3.0 2.7 12.7 6.5 (1.3) (3.1) 0.3Dynasty Fine Wines 0828.HK 577 3.60 1.81 (49.8) Not Rated Dec 28.8 25.0 2.5 2.3 8.5 2.3 5.6 7.8 13.2First Tractor 0038.HK 317 6.12 6.33 3.4 Not Rated Dec 18.5 15.2 1.8 1.6 7.1 0.7 3.2 12.9 37.2Franshion Properties 0817.HK 2,735 2.32 1.11 (52.2) Not Rated Dec 16.9 16.2 1.3 1.0 6.3 0.3 2.2 2.2 4.0Fufeng 0546.HK 1,130 5.29 7.95 50.2 Not Rated Dec 8.3 8.1 3.2 2.6 29.4 23.3 (0.4) (9.0) (1.5)Fushan Int'l Energy 0639.HK 3,026 4.37 5.83 33.3 Not Rated Dec 18.6 11.6 1.5 1.1 11.6 6.4 0.5 (7.4) 2.1Geely 0175.HK 2,672 2.81 1.92 (31.7) UNDERPERFORM Dec 14.8 15.9 2.8 2.4 14.8 9.1 5.2 0.7 8.5Global Bio-chem 0809.HK 556 1.33 1.49 12.3 Not Rated Dec (266.0) 7.1 0.5 0.5 2.7 (4.6) 11.8 4.7 1.0Global Sweeteners 3889.HK 214 1.45 1.52 4.6 Not Rated Dec 17.7 8.2 0.9 0.9 7.5 0.2 3.6 (7.1) 9.8Golden Eagle 3308.HK 5,287 21.15 9.23 (56.3) Not Rated Dec 134.7 37.3 12.4 11.4 14.9 9.6 5.2 11.2 30.9

Share price performanceHK$ term (%)

Calendarized CalendarizedP/E (x) P/B (x)

* Include the Hong Kong Industrial, consumer and media companies covered by Credit Suisse, and small-cap stocks in HOLT® database with market cap between US$50 mn and US$1.5 bn. For stocks that are Not Rated, I/B/E/S consensus forecast are used. CFROI® is a registered trademark in the United States and other countries (excluding the United Kingdom) of Credit Suisse or its subsidiaries or affiliates. * Companies in bold and italic indicate constituents of Credit Suisse China Small Cap Index.

10 September 2010

David &

Goliath

20


Cap Price HOLT warranted return Suisse end CFROI SpreadCompany RIC (US$ mn) (HK$) price (HK$) (%) Rating month 2009 2010 2009 2010 (%) (%) 1W 1M 3MGolden Meditech 0801.HK 307 1.41 1.31 (7.3) Not Rated Mar 16.9 15.0 n.a. 0.7 9.4 2.6 (4.1) (4.7) (9.6)Great Wall Motor 2333.HK 974 18.32 23.66 29.1 Not Rated Dec 17.2 12.1 2.3 2.1 13.0 7.1 10.4 21.6 50.4Greentown China 3900.HK 1,837 8.72 8.30 (4.8) UNDERPERFORM Dec 16.3 9.5 1.3 1.3 2.5 (4.2) 1.8 (6.5) 5.7Guangzhou Pharma. 0874.HK 238 8.41 5.46 (35.1) Not Rated Dec 27.8 21.5 1.7 1.7 3.1 (3.1) 6.7 22.1 18.5Guangzhou Ship 0317.HK 296 14.60 11.67 (20.1) Not Rated Dec 12.3 11.0 2.0 1.9 12.3 6.1 15.1 14.2 33.2GZI REIT 0405.HK 542 3.95 2.99 (24.3) Not Rated Dec 14.0 14.9 1.0 1.0 5.7 (1.4) 4.2 7.3 23.1GZI Transport 1052.HK 896 4.16 5.44 30.8 Not Rated Dec 16.0 10.4 0.8 0.8 24.4 18.0 1.7 (1.4) 6.4Hainan Meilian 0357.HK 255 8.74 6.23 (28.7) Not Rated Dec 20.1 16.6 1.9 1.8 8.8 2.8 4.0 0.6 8.6Haitian 1882.HK 1,280 6.23 6.05 (2.9) Not Rated Dec 19.5 11.7 2.6 2.5 12.7 6.6 3.5 5.6 11.3Harbin Power 1133.HK 696 8.01 6.20 (22.6) UNDERPERFORM Dec 16.0 14.4 1.1 1.1 2.4 (4.3) 8.0 11.1 50.8Hidili 1393.HK 1,782 6.72 7.60 13.2 Not Rated Dec 30.0 12.2 1.9 1.8 3.8 (2.1) 0.1 (4.5) 15.9Honghua 0196.HK 398 0.96 1.64 70.8 UNDERPERFORM Dec (21.7) 7.8 0.7 0.6 0.0 (6.3) 10.3 (6.8) (14.3)Hopson Dev. 0754.HK 2,091 9.27 9.90 6.8 NEUTRAL Dec 6.3 5.6 0.5 0.5 3.6 (3.0) 0.4 (13.7) 4.3Huabao 0336.HK 4,655 11.50 11.30 (1.7) NEUTRAL Mar 27.8 23.2 10.1 7.7 48.8 43.6 0.0 0.9 22.6Huadian Power 1071.HK 346 1.88 0.52 (72.2) Not Rated Dec 8.7 14.9 0.7 0.6 3.4 (3.6) 2.2 (3.1) 10.6Hunan Nonferrous 2626.HK 607 2.89 0.91 (68.4) Not Rated Dec (25.8) 28.1 2.2 2.0 0.9 (5.8) 19.9 14.2 11.2Inspur 0596.HK 315 0.65 0.86 32.5 Not Rated Dec 8.8 8.9 1.7 1.3 21.3 15.3 (3.0) (15.6) (3.0)Intime Dept. Store 1833.HK 2,366 10.44 4.70 (54.9) Not Rated Dec 35.2 31.5 4.7 4.1 7.7 1.7 1.4 23.1 33.8Kingdee 0268.HK 848 3.16 2.16 (31.8) Not Rated Dec 25.9 24.9 4.6 3.9 16.6 10.2 3.3 (8.7) 20.6Kingsoft 3888.HK 568 3.96 7.65 93.2 Not Rated Dec 9.5 9.0 2.4 2.0 22.5 16.8 4.8 (9.6) (3.4)Kingw ay Brew ery 0124.HK 485 2.20 1.50 (31.9) Not Rated Dec 275.0 n.a. 1.3 1.3 3.0 (3.4) 0.0 21.5 48.6KWG Property 1813.HK 2,290 6.15 6.30 2.4 OUTPERFORM Dec 20.3 11.8 1.5 1.4 3.3 (3.2) 9.2 12.6 39.1Lianhua Supermarket 0980.HK 823 30.90 10.96 (64.5) Not Rated Dec 33.3 26.9 6.9 6.8 4.2 (2.1) (1.3) (1.1) 10.4Lingbao Gold 3330.HK 114 2.97 1.47 (50.4) Not Rated Dec 17.3 6.0 1.1 1.0 8.9 1.4 1.4 4.9 10.0Little Sheep 0968.HK 730 5.50 2.40 (56.5) Not Rated Dec 31.8 26.7 4.8 4.4 11.5 5.1 12.7 22.2 31.0Lonking 3339.HK 1,991 7.23 9.08 25.6 OUTPERFORM Dec 17.0 10.4 4.3 3.6 14.7 8.5 4.2 21.3 65.4Lumena 0067.HK 677 2.70 3.95 46.3 OUTPERFORM Dec 9.2 6.7 2.7 2.1 16.7 10.4 8.0 6.3 44.4Mingyuan Medicare 0233.HK 423 0.88 1.15 31.1 Not Rated Dec 35.2 14.7 2.1 2.0 16.0 9.7 8.6 (2.2) 6.0Minmetals Resources 1208.HK 1,080 4.14 2.64 (36.2) Not Rated Dec 46.5 28.0 1.4 1.4 3.0 (3.4) 17.6 29.4 56.8


* Include the Hong Kong Industrial, consumer and media companies covered by Credit Suisse, and small-cap stocks in HOLT® database with market cap between US$50 mn and US$1.5 bn. For stocks that are Not Rated, I/B/E/S consensus forecast are used. CFROI® is a registered trademark in the United States and other countries (excluding the United Kingdom) of Credit Suisse or its subsidiaries or affiliates. * Companies in bold and italic indicate constituents of Credit Suisse China Small Cap Index.Valuations of Credit Suisse China small-cap watch list *

10 September 2010

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Goliath

21


Cap Price HOLT warranted return Suisse end CFROI SpreadCompany RIC (US$ mn) (HK$) price (HK$) (%) Rating month 2009 2010 2009 2010 (%) (%) 1W 1M 3MMinth 0425.HK 1,740 12.64 13.07 3.4 Not Rated Dec 17.0 15.0 2.8 2.5 15.9 10.2 (0.2) 4.3 33.6Nanjing Panda 0553.HK 59 1.91 1.80 (5.6) Not Rated Dec 70.7 17.4 0.8 0.7 (11.6) (18.7) 1.6 (4.0) 1.6New World China 0917.HK 2,008 2.71 3.15 16.3 Not Rated Jun 6.9 10.3 0.4 0.4 0.5 (5.8) 4.2 (1.1) 13.4New World Dept. St. China 0825.HK 1,584 7.30 5.38 (26.3) Not Rated Jun 23.9 22.1 3.2 2.7 8.3 2.3 3.0 7.7 13.9Nine Dragons 2689.HK 6,799 11.36 10.85 (4.5) UNDERPERFORM Jun 22.0 17.1 2.6 2.2 5.2 (0.4) 5.6 (1.4) 10.5Phoenix Satellite 2008.HK 1,598 2.49 1.13 (54.6) Not Rated Dec 41.5 29.0 6.8 6.1 12.7 6.9 12.7 18.0 39.1Ports Design 0589.HK 1,441 19.78 16.14 (18.4) Not Rated Dec 20.8 18.2 7.2 6.0 16.9 11.0 2.5 (3.5) 8.8Qingling Motors 1122.HK 340 2.13 2.62 22.8 Not Rated Dec 18.7 15.9 0.7 0.7 3.0 (3.0) 2.9 6.5 22.4Qunxing Paper 3868.HK 396 2.91 4.76 63.5 Not Rated Dec 8.2 7.0 1.1 1.0 10.7 4.7 2.1 (4.9) 12.4Real Gold 0246.HK 1,419 12.18 13.19 8.3 Not Rated Dec 13.5 11.0 3.3 2.0 20.3 14.5 (0.2) 3.6 (5.0)RexLot 0555.HK 735 0.74 1.03 39.6 Not Rated Dec 13.0 8.9 1.7 1.6 19.8 13.8 1.4 4.2 0.0Shandong Weigao 1066.HK 2,397 21.75 19.00 (12.6) OUTPERFORM Dec 65.0 49.4 14.0 10.3 19.7 14.5 10.7 21.7 31.8Shanghai Forte 2337.HK 326 2.40 0.49 (79.4) Not Rated Dec 10.7 6.9 0.9 0.8 3.8 (3.5) 6.7 4.8 17.1Shanghai Jin Jiang 2006.HK 378 2.11 1.80 (14.7) Not Rated Dec 70.3 65.9 1.1 1.1 (0.3) (6.4) 8.8 1.9 31.9Shanghai Prime 2345.HK 153 1.56 1.60 2.6 NEUTRAL Dec 13.1 11.7 0.7 0.7 5.6 (1.1) 8.3 5.4 13.9Shenji Group Kumato 0300.HK 85 4.69 5.21 11.2 Not Rated Dec 8.1 9.3 1.5 1.6 13.7 7.4 3.1 (9.6) 1.1Shenyin Wanguo (HK) 0218.HK 242 3.55 1.54 (56.5) Not Rated Dec 25.2 19.3 1.9 1.8 7.8 0.3 16.8 11.6 20.3Shenzhen Expressway 0548.HK 378 3.93 4.14 5.4 Not Rated Dec 13.8 11.8 0.9 0.9 1.6 (5.4) 1.8 3.4 15.6Shenzhen Int'l. 0152.HK 984 0.54 0.58 7.2 Not Rated Dec 8.7 5.7 1.1 0.7 5.5 (1.4) 3.8 5.9 11.3Shenzhen Invest. 0604.HK 1,306 2.87 1.75 (39.2) Not Rated Dec 9.7 9.8 0.8 0.8 4.2 (2.5) 1.1 11.7 32.3Shenzhou 2313.HK 1,442 9.00 11.00 22.2 OUTPERFORM Dec 7.9 6.7 2.5 2.0 25.2 19.3 (2.6) (9.1) 18.1Shougang Concord Int'l 0697.HK 1,410 1.34 0.92 (31.3) Not Rated Dec 148.9 9.6 1.3 1.2 (15.0) (21.5) 11.7 3.9 12.6Sichuan Expressway 0107.HK 635 5.51 4.43 (19.6) Not Rated Dec 16.1 14.8 2.0 2.0 5.8 (0.4) 0.4 14.3 34.7Sino Biopharm. 1177.HK 1,850 2.90 3.00 3.4 Not Rated Dec 33.0 26.4 5.3 3.9 23.1 17.5 (0.3) (2.7) (10.8)Sinocom Software 0299.HK 145 1.01 1.39 37.1 Not Rated Dec 10.9 8.8 1.9 1.7 16.0 9.3 0.0 (17.2) (4.7)Sinopec Kantons 0934.HK 479 3.59 1.72 (52.2) Not Rated Dec 18.9 n.a. 1.6 1.5 6.1 (1.1) (1.9) (7.0) (18.4)Sinotrans 0598.HK 446 1.94 1.59 (18.0) Not Rated Dec 17.0 11.1 0.8 0.8 1.9 (5.1) (0.5) (0.5) 11.5Sinotrans Shipping 0368.HK 1,644 3.20 4.12 28.9 Not Rated Dec 15.2 13.7 0.8 0.8 3.5 (2.1) 1.3 (5.3) 6.0Skyworth Digital 0751.HK 1,553 4.75 7.50 57.9 OUTPERFORM Mar 10.7 8.5 2.1 1.8 10.7 4.4 14.7 (16.2) (28.5)



10 September 2010

David &

Goliath

22


Cap Price HOLT warranted return Suisse end CFROI SpreadCompany RIC (US$ mn) (HK$) price (HK$) (%) Rating month 2009 2010 2009 2010 (%) (%) 1W 1M 3MSRE 1207.HK 376 0.81 289.51 35641.7 Not Rated Dec 3.3 0.0 0.3 0.3 2.4 (5.2) 1.3 (6.9) 19.1TCL Multimedia 1070.HK 431 3.08 3.30 7.1 NEUTRAL Dec 7.9 (19.9) 0.8 0.8 7.6 1.1 25.2 (17.2) (44.3)Tex hong 2678.HK 527 4.63 5.70 23.1 OUTPERFORM Dec 12.6 6.1 2.4 1.9 13.5 5.3 (4.9) (4.3) 36.2The United Labs 3933.HK 2,648 16.46 11.84 (28.1) Not Rated Dec 36.5 20.9 6.2 5.6 13.0 6.3 12.0 18.8 66.1Tian An China 0028.HK 1,018 5.25 6.48 23.4 Not Rated Dec 7.4 6.6 0.7 0.7 2.3 (4.3) 0.8 1.2 11.9Tiangong Int'l. 0826.HK 205 3.80 2.40 (36.9) Not Rated Dec 12.3 3.3 0.9 0.8 4.6 (3.4) 4.7 15.2 22.6Tianjin Capital Env. 1065.HK 112 2.57 1.90 (25.9) Not Rated Dec 13.2 14.0 1.0 1.0 10.5 3.3 5.8 3.2 17.4Tianjin Dev. 0882.HK 754 5.49 9.75 77.7 Not Rated Dec (30.0) 3.3 1.7 1.7 (0.6) (7.1) 3.4 7.0 21.2Tianjin Port 3382.HK 1,387 1.75 1.90 8.6 NEUTRAL Dec (64.8) 18.2 0.9 0.8 (0.9) (7.2) 1.7 (8.9) 11.5Tianneng Power 0819.HK 425 3.05 3.23 5.9 Not Rated Dec 9.9 14.4 1.7 1.4 19.4 13.2 0.7 (10.3) (2.2)Tong Ren Tang 1666.HK 182 16.20 11.93 (26.4) Not Rated Dec 16.1 13.9 1.9 1.8 10.3 4.0 (0.4) 8.0 6.2Towngas China 1083.HK 1,141 3.62 2.17 (40.1) Not Rated Dec 26.8 21.7 1.1 1.1 6.0 (0.6) 7.1 18.3 22.3Travelsky 0696.HK 558 6.97 7.60 9.1 Not Rated Dec 15.2 12.6 2.0 1.9 10.0 4.5 6.4 (2.7) 24.5Uni-President China 0220.HK 2,404 5.19 3.51 (32.5) Not Rated Dec 23.2 26.0 2.5 2.5 7.6 2.2 (1.0) 19.9 21.0Vinda 3331.HK 1,104 9.46 5.26 (44.4) Not Rated Dec 21.5 21.2 4.1 3.5 15.3 8.9 5.9 22.4 50.9Wasion Meters 3393.HK 624 5.22 4.70 (9.9) Not Rated Dec 14.7 13.9 2.0 1.6 13.6 7.6 (3.2) (16.6) 6.7Weiqiao Textile 2698.HK 310 5.83 11.07 89.9 Not Rated Dec 6.8 7.8 0.4 0.4 6.1 (1.2) 6.0 2.6 25.6Wuyi Int'l. Pharma. 1889.HK 152 0.69 1.75 153.2 Not Rated Dec 7.8 n.a. 0.7 0.6 10.2 3.8 1.5 (5.5) (19.8)Xiamen Int'l. Port 3378.HK 188 1.48 1.95 31.8 OUTPERFORM Dec 17.4 12.5 0.9 0.9 5.1 (1.4) 1.4 0.7 17.5Xinao Gas 2688.HK 2,912 21.55 23.80 10.4 OUTPERFORM Dec 24.9 18.9 3.9 3.3 10.7 4.8 0.9 12.8 54.6Xinjiang Xinxin Mining 3833.HK 409 4.19 2.87 (31.4) Not Rated Dec 35.5 16.8 1.6 1.4 11.6 6.0 4.0 (1.2) 14.2Xinyi Glass 0868.HK 1,974 4.33 4.76 9.8 Not Rated Dec 19.4 15.3 2.8 2.4 14.0 8.1 (0.5) 15.2 48.8Xinyu Hengdeli 3389.HK 2,167 3.85 2.08 (46.1) Not Rated Dec 35.6 23.2 4.8 4.1 10.0 3.7 4.9 1.0 21.5Xiwang Sugar 2088.HK 304 2.35 1.33 (43.3) Not Rated Dec 17.2 8.1 1.2 1.0 5.0 (2.6) 8.3 3.5 32.0Yantai North Andre 8259.HK 87 0.39 0.20 (49.1) Not Rated Dec 22.6 16.0 1.2 1.2 3.9 (3.4) 0.0 (14.4) (4.9)Zhengzhou Gas 3928.HK 105 14.80 29.35 98.3 Not Rated Dec 9.1 7.4 1.9 1.8 14.3 7.7 0.5 0.0 4.2



10 September 2010

David &

Goliath

23

China – Screening Absolute price performance - top & bottom 10 companies Absolute price performance - top & bottom 10 companies Absolute price performance - top & bottom 10 companies Price 1W return Price 1M return Price 3M returnCompany RIC (HK$) (%) Company RIC (HK$) (%) Company RIC (HK$) (%)Winners Winners Winners TCL Multimedia 1070.HK 3.08 25.2 Minmetals Resources 1208.HK 4.14 29.4 China State Construction 3311.HK 4.34 89.5 CITIC 1616 1883.HK 2.47 23.5 Bosideng 3998.HK 2.91 24.4 The United Labs 3933.HK 16.46 66.1 Hunan Nonferrous 2626.HK 2.89 19.9 Intime Dept. Store 1833.HK 10.44 23.1 Lonking 3339.HK 7.23 65.4 Minmetals Resources 1208.HK 4.14 17.6 Ajisen 0538.HK 11.38 23.0 Minmetals Resources 1208.HK 4.14 56.8 Shenyin Wanguo (HK) 0218.HK 3.55 16.8 AMVIG 2300.HK 5.29 23.0 Brilliance China Auto. 1114.HK 3.74 53.3 Guangzhou Ship 0317.HK 14.60 15.1 Vinda 3331.HK 9.46 22.4 Vinda 3331.HK 9.46 50.9 Skyworth Digital 0751.HK 4.75 14.7 Little Sheep 0968.HK 5.50 22.2 Harbin Power 1133.HK 8.01 50.8 Little Sheep 0968.HK 5.50 12.7 Guangzhou Pharma. 0874.HK 8.41 22.1 Bosideng 3998.HK 2.91 50.8 Phoenix Satellite 2008.HK 2.49 12.7 Brilliance China Auto. 1114.HK 3.74 21.8 Great Wall Motor 2333.HK 18.32 50.4 The United Labs 3933.HK 16.46 12.0 Shandong Weigao 1066.HK 21.75 21.7 Kingway Brewery 0124.HK 2.20 48.6 Losers Losers Losers Ajisen 0538.HK 11.38 (10.0) Chaoda Modern 0682.HK 6.26 (27.7) TCL Multimedia 1070.HK 3.08 (44.3)China Green 0904.HK 7.26 (5.3) China Green 0904.HK 7.26 (19.0) Skyworth Digital 0751.HK 4.75 (28.5)Texhong 2678.HK 4.63 (4.9) Sinocom Software 0299.HK 1.01 (17.2) BYD 1211.HK 48.60 (21.6)Golden Meditech 0801.HK 1.41 (4.1) TCL Multimedia 1070.HK 3.08 (17.2) SMIC 0981.HK 0.52 (18.8)AMVIG 2300.HK 5.29 (3.5) Skyworth Digital 0751.HK 4.75 (16.2) Sinopec Kantons 0934.HK 3.59 (18.4)Chu Kong Shipping Dev. 0560.HK 1.87 (3.1) Inspur 0596.HK 0.65 (15.6) Chaoda Modern 0682.HK 6.26 (17.0)Inspur 0596.HK 0.65 (3.0) Hopson Dev. 0754.HK 9.27 (13.7) Honghua 0196.HK 0.96 (14.3)Chaoda Modern 0682.HK 6.26 (2.6) BYD Electronic 0285.HK 3.94 (11.7) BYD Electronic 0285.HK 3.94 (13.0)Shenzhou 2313.HK 9.00 (2.6) Anhui Tianda Oil Pipe 0839.HK 2.92 (11.5) China Shineway Pharma. 2877.HK 20.65 (11.4)China Haisheng 0359.HK 0.89 (2.2) Tianneng Power 0819.HK 3.05 (10.3) Sino Biopharm. 1177.HK 2.90 (10.8)

Price-to-earnings - most & least expensive 10 companies Price-to-book - most & least expensive 10 companies CFROI® Spread - top & bottom 10 companies Price 10 P/E Price 10 P/B Price CFROI® SpreadCompany RIC (HK$) (x) Company RIC (HK$) (x) Company RIC (HK$) (%)Winners Winners Winners Tianjin Dev. 0882.HK 5.49 3.3 SRE 1207.HK 0.81 0.3 Huabao 0336.HK 11.50 43.6Tiangong Int'l. 0826.HK 3.80 3.3 China Grand Forestry 0910.HK 0.26 0.4 Fufeng 0546.HK 5.29 23.3Chaoda Modern 0682.HK 6.26 3.9 New World China 0917.HK 2.71 0.4 China Shineway Pharma. 2877.HK 20.65 21.9China Haisheng 0359.HK 0.89 4.0 Beijing North Star 0588.HK 2.09 0.5 Shenzhou 2313.HK 9.00 19.3Anton Oilfield 3337.HK 0.77 5.1 China Fire Safety 0445.HK 0.26 0.5 GZI Transport 1052.HK 4.16 18.0Hopson Dev. 0754.HK 9.27 5.6 Chongqing Iron 1053.HK 2.03 0.5 Sino Biopharm. 1177.HK 2.90 17.5Anhui Tianda Oil Pipe 0839.HK 2.92 5.7 China Aoyuan 3883.HK 1.24 0.5 Kingsoft 3888.HK 3.96 16.8Shenzhen Int'l. 0152.HK 0.54 5.7 Hopson Dev. 0754.HK 9.27 0.5 Inspur 0596.HK 0.65 15.3TCC Int'l. 1136.HK 2.86 5.8 Global Bio-chem 0809.HK 1.33 0.5 BYD 1211.HK 48.60 15.2Lingbao Gold 3330.HK 2.97 6.0 China Power Int'l. 2380.HK 1.69 0.6 Real Gold 0246.HK 12.18 14.5 Losers Losers Losers Shanghai Jin Jiang 2006.HK 2.11 65.9 Golden Eagle 3308.HK 21.15 11.4 China Nickel 2889.HK 1.28 (22.9)Shandong Weigao 1066.HK 21.75 49.4 Shandong Weigao 1066.HK 21.75 10.3 Shougang Concord Int'l 0697.HK 1.34 (21.5)Golden Eagle 3308.HK 21.15 37.3 Huabao 0336.HK 11.50 7.7 SMIC 0981.HK 0.52 (21.1)China Huiyuan 1886.HK 5.93 34.5 Lianhua Supermarket 0980.HK 30.90 6.8 Nanjing Panda 0553.HK 1.91 (18.7)Intime Dept. Store 1833.HK 10.44 31.5 Phoenix Satellite 2008.HK 2.49 6.1 Brilliance China Auto. 1114.HK 3.74 (13.8)China Foods 0506.HK 5.70 30.0 Ports Design 0589.HK 19.78 6.0 China LotSynergy 8161.HK 0.30 (13.8)Ajisen 0538.HK 11.38 29.6 The United Labs 3933.HK 16.46 5.6 China Fire Safety 0445.HK 0.26 (13.7)Phoenix Satellite 2008.HK 2.49 29.0 China Shineway Pharma. 2877.HK 20.65 5.2 Tianjin Port 3382.HK 1.75 (7.2)Hunan Nonferrous 2626.HK 2.89 28.1 BYD 1211.HK 48.60 4.8 Tianjin Dev. 0882.HK 5.49 (7.1)Minmetals Resources 1208.HK 4.14 28.0 Little Sheep 0968.HK 5.50 4.4 Shanghai Jin Jiang 2006.HK 2.11 (6.4)


10 September 2010

David & Goliath 24

India – Company updates BEML (BEML.BO, Rs1211.45, O, TP Rs1383.53) KEC (KECL.BO, Rs521.45, O [V], TP Rs611.46) New report: Thematic play on likely acceleration in coal capex

■ We initiate coverage of BEML with an OUTPERFORM rating anda target price of Rs1,384 (20x FY12E). BEML is our contra pickin the sector, as near-term fundamentals stay muted. Coalconstraints are now well documented and it is likely that policyaction could accelerate extraction of coal in India. BEML hasabout 70% market share in Coal India’s (not listed) capex andthus benefits from any such acceleration.

■ If there are no coal reforms, we expect BEML’s revenue from themining equipment business to see only 10% CAGR (FY10-17E) while reforms could double it over the next 10 years.Management also expects the railway business to turn profitablethis year.

■ We believe margins might have troughed, as the impact of lowermargins in the metro rail segment might have been alreadycaptured in the mix. Management comments support thatargument and as such BEML expects to achieve gross turnoverof Rs42 bn in FY11. BEML currently has an order book of Rs52bn and we expect a 20% adjusted earnings CAGR (FY10-13). Key risk to our target price in our view is delay in coal reforms.

New report: Valuations price in weak near term; contra pick in the sector

■ We initiate coverage of KEC international, with an OUTPERFORM rating and a target price of Rs611 (13.5x FY12E). KEC is our contra pick in the sector and appears favourable on valuations relative to peers suggesting that the weak near-term fundamentals are captured in its stock pri.

■ We expect an order recovery to commence in FY12, when spend for the next plan commences. Competition is fragmenting the industry, pressuring margins, but KEC’s international footprint helps. The recent acquisition of SAE Towers (not listed) is a positive, as it is EPS accretive and expands geographic footprint.

■ Diversification into railway EPC and capabilities in telecom tower, cable business should help drive order inflow growth over the long term, in our view. On the margin front, despite competitive pressures, we expect KEC to maintain margins at FY10 levels, as over 50% of business stems from international geographies where they may benefit from a favourable RM pricing environment. Key risk to our view is a continued weakness in tower capex.

Bbg/RIC 1,174.001,384 (NA)

41.65 18 0.12.2

Free float (%) 46 Performance 1M 3M 12MAbsolute (%) 15.6 19.7 9.2 Relativ e (%) 12.5 7.7 (6.2)

Year 3/09A 3/10A 3/11E 3/12E 3/13E27,972 28,382 32,800 39,829 46,662 3,393 2,634 3,342 4,631 5,378 2,641 2,229 2,273 2,890 3,313 57.60 46.10 54.40 69.20 79.30

n.a. n.a. (11) 0 0n.a. n.a. 0 0 011.1 (20.0) 18.0 27.1 14.620.4 25.5 21.6 17.0 14.8

1.0 0.8 1.4 1.8 2.015.3 19.9 16.1 12.3 11.1

2.6 2.4 2.2 2.0 1.914.0 10.9 10.3 12.0 12.615.9 16.8 22.6 34.4 41.9

1235.75 - 923.80

Rev enues (Rs mn)

Major shareholders

48,891.2/ 1,043.9Mkt cap (Rs/US$ mn)Daily trad v al - 6m av g (US$ mn)

EBITDA (Rs mn)Net profit (Rs mn)


EPS (Rs)

Note1:BEM L Limited produces and sells earthmoving equipment, including railway ro lling stock, heavy duty vehicles, wheel loaders, trailers, excavators and heavy recovery vehicles..


BEML IN / BEML.BOO (NA)

P/B (x )


- Consensus EPS (Rs)EPS grow th (%)




Gov t of India:54%

Price (07 Sep 10 , Rs)TP (Prev. TP W)Est. pot. % chg. to TP52-w k range (W)

Bbg/RIC 493.05611 (NA)

49.34 240.00.5

Free float (%) 60.0 Performance 1M 3M 12MAbsolute (%) 3.8 4.0 (6.8)Relativ e (%) 1.0 (6.4) (20.0)

Year 3/09A 3/10A 3/11E 3/12E 3/13E34,274 39,064 42,302 45,440 52,7952,996 4,050 4,360 5,062 5,8721,168 1,897 1,823 2,235 2,637

23.7 38.3 36.9 45.3 53.4n.a. n.a. 0 0 0n.a. n.a. 42.0 49.0 51.0

(40.2) 61.8 (3.5) 22.6 18.020.8 12.9 13.3 10.9 9.20.0 0.0 0.0 0.0 0.09.7 7.8 7.3 6.2 5.44.4 3.1 2.6 2.2 1.8

20.9 24.1 19.5 20.0 19.886.2 91.1 80.0 63.4 53.8

623.50 - 456.50

Rev enues (Rs mn)

Major shareholders

24,329.4/ 519.5Mkt cap (Rs/US$ mn)Daily trad v al - 6m av g (US$ mn)



EPS (Rs)

Note1:KEC International Ltd is an EPC Company in Power Transmission..


KECI IN / KECL.BOO (NA) [V]

P/B (x )






RPG Cellular Inv & Hld:


Price performance vs. MSCI Indonesia Price performance vs. MSCI Indonesia

85

100

115

130

09/09 11/09 01/10 03/10 05/10 07/10 09/10

BEML MSCI India

85

100

115

130

09/09 11/09 01/10 03/10 05/10 07/10 09/10

KEC MSCI India

Venugopal Garre / Research Analyst / 91 22 6777 3872 / [email protected] Extracted from The Asian Daily 09 Sep 2010


10 September 2010

David & Goliath 25

India – Company updates Voltas (VOLT.BO, Rs226.95, O [V], TP Rs285.80) Havell’s (HVEL.BO, Rs794.55, N [V], TP Rs862.18) Play on recovery in industrial and infra capex

■ We assume coverage of Voltas with an OUTPERFORM ratingand a target price of Rs286 (from Rs103). Our FY11E EPS rise71% to Rs12.6.

■ Voltas is a mid-economic cycle play, given its exposure to theMEP business that typically improves with a lag to an economicrecovery. We are now seeing early signs of a recovery in theoverall construction activity in India as well as the Middle East.

■ Voltas also benefits from improving industrial capex, given itsexposure to the textile and construction machinery (agency)business. It also has a strong market positioning in the coolingproduct segment, where we expect growth to be very strong(over 30% p.a.), given the low penetration and improvingaffordability of such products (ACs) in India.

■ We expect Voltas to generate a 20% earnings CAGR (FY10-13E) and it currently trades at 14x FY12E P/E. Consensusnumbers could see upward revisions, in our view, as orderrecovery pans out. Key risk is a slower-than-expected pace ofrecovery.

Risk-adjusted returns do not appear attractive

■ We initiate coverage on Havells India with a NEUTRAL rating with a target price of Rs862 (12x FY12E EV/EBITDA for domestic business and 7x FY12E EV/EBITDA for Sylvania). We expect domestic sales growth to rebound in FY11 (19% YoY), led by a recovery in all of Havells’ business segments, particularly led by strength in the lighting and fans segment.

■ While growth prospects in the domestic market appear strong, over 50% of revenue is exposed to Sylvania, where the growth outlook is not very encouraging. EBITDA recovery at Sylvania is a reflection of restructuring efforts and is already factored in earnings estimates and valuations, in our view.

■ Havells’ consolidated earnings are sensitive to Sylvania’s performance, and change in margins there will be the key swing factor for stock price performance. We are concerned that weak demand in Europe could cap further growth. Further, Havells’ balance sheet is highly geared. Hence, risk-adjusted returns do not appear attractive at current levels, in our view. The key risk to our view is a stronger-than-expected recovery in Europe.

Bbg/RIC 215.50286 (103)

330.89 331.04.8

Free float (%) 75.0 Performance 1M 3M 12MAbsolute (%) 1.0 18.1 40.4Relativ e (%) (1.7) 6.3 20.6

Year 3/09A 3/10A 3/11E 3/12E 3/13E43,252 48,059 55,912 65,626 78,7372,824 4,592 5,469 6,426 7,3432,538 3,846 4,310 5,427 6,453

7.1 11.1 12.6 15.9 19.0n.a. n.a. 71 0 0n.a. n.a. 11.1 13.3 027.4 55.7 13.7 25.6 19.530.2 19.4 17.1 13.6 11.4

0.9 0.9 1.2 1.5 1.824.3 14.6 11.8 9.5 7.7

9.0 6.6 5.0 3.8 3.029.9 33.9 29.3 28.3 26.5

(34.9) (40.0) (47.9) (55.1) (60.9)

218.05 - 144.95

Rev enues (Rs mn)

Major shareholders




EPS (Rs)

Note1:Vo ltas is a niche engineering company which provides electromechanical and air-conditioning pro ject services, with presence in domestic and M iddle East markets..


VOLT IN / VOLT.BOO (O) [V]

P/B (x )






Tata sons: 26.64%


Bbg/RIC 802.00862 (NA)

60.17 80.7


Absolute (%) 13.7 29.4 168.0Relativ e (%) 10.6 16.5 130.3

Year 3/09A 3/10A 3/11E 3/12E 3/13E54,775 53,569 55,892 63,994 73,5552,886 2,792 4,669 5,745 6,994

385 372 2,318 3,087 4,042(26.6) (39.6) 36.7 51.3 67.2

n.a. n.a. 0 0 0n.a. n.a. 39.0 55.0 72.0n.a. n.a. n.a. 39.9 31.0NM NM 21.9 15.6 11.90.3 0.5 0.5 0.7 0.8

20.1 21.3 12.4 9.6 7.37.9 13.9 9.0 6.0 4.1

(26.2) (68.8) 41.1 38.2 34.6160.1 327.8 178.8 83.8 25.9

812.00 - 286.65

Rev enues (Rs mn)

Major shareholders




EPS (Rs)

Note1:Havells India Ltd is an electrical and power distribution equipment manufacturer..


HAVL IN / HVEL.BON (NA) [V]

P/B (x )






Promoter group: 60%



85

100

115

130

145

09/09 11/09 01/10 03/10 05/10 07/10 09/10

Voltas MSCI India

40

100

160

220

280

09/09 11/09 01/10 03/10 05/10 07/10 09/10

Havell's MSCI India



10 September 2010

David & Goliath 26

India – Company updates BGR Energy (BGRE.BO, Rs843.90, N [V], TP Rs939.36) Punj Lloyd (PUJL.BO, Rs112.55, U [V], TP Rs69.90) New report: Strong earnings momentum expected; valuations appear richthough

■ We initiate coverage of BGR Energy with a NEUTRAL rating anda target price of Rs939 (18x FY12E). BGR featured among thetop four stocks in our “Eeees” ranking in an earlier note (18February 2010) based on consensus numbers. However, post itsstrong outperformance over the past 12 months, the stock nowfeatures in the growth quadrant in our updated Eeees framework,suggesting potential returns will be lower than before.

■ BGR Energy’s business model has been viewed with scepticism in the past due to its EPC nature, exposure to Chineseequipment and smaller scale that impacted operating cashgeneration. The new Hitachi JV, however, reduces some of theserisks.

■ While we expect an earnings CAGR of 30% (FY10-13E), on valuations and risk ratings relative to peers, BGR does not farewell (ranks 19th on equity valuations and 23rd on execution on ourEeees framework). Key risk to our target price is a better-than-expected earnings performance or higher-than-expected marketshare gains in the power equipment segment.

Crisis of confidence

■ We assume coverage of Punj Lloyd with an UNDERPERFORM (from Neutral) rating and a target price of Rs69.9 (25x FY12E, previous target price Rs222.1). FY11E EPS falls 82% to Rs3.8. While the end-market outlook for Punj Lloyd is strong, we note its execution skills are weak, raising the risk of losses in ongoing projects.

■ Street has been building in earnings recovery for future years as losses on past projects recede, but actual earnings have typically underperformed estimates. We believe Punj Lloyd’s overall margin will structurally remain low (around 5% EBITDA).

■ A deteriorating balance sheet (EBITDA coverage of 0.7x in FY10) could trigger a need for equity funding. Unlike in previous years, we believe Punj Lloyd may find it difficult to repair its balance sheet through an equity funding given its poor earnings record.

■ We expect de-rating of multiples to continue as consensus numbers appear too high. We lower FY11E earnings 82%. Key risk to our view is improved order inflows or settlement in the ongoing contractual disputes.

Bbg/RIC 853.00939 (NA)

72.00 100.24.0

Free float (%) 18.0 Performance 1M 3M 12MAbsolute (%) 6.9 29.6 82.9Relativ e (%) 4.0 16.7 57.2

Year 3/09A 3/10A 3/11E 3/12E 3/13E19,303 30,719 47,274 63,585 74,2092,068 3,481 5,264 7,076 8,2691,135 2,029 2,936 3,757 4,44215.8 27.8 41.0 52.2 61.7n.a. n.a. 0 0 0n.a. n.a. 39.0 46.0 56.028.4 76.6 47.4 27.2 18.254.1 30.6 20.8 16.3 13.8

0.4 0.7 1.0 1.2 1.430.2 17.4 13.2 10.3 8.610.9 8.7 6.5 4.9 3.820.1 28.3 31.2 30.2 27.816.6 (13.4) 83.4 91.3 60.7

853.00 - 443.20

Rev enues (Rs mn)

Major shareholders




EPS (Rs)

Note1:BGR Energy is an EPC company engaged in setting up power plants in India.


BGRL IN / BGRE.BON (NA) [V]

P/B (x )






Promoter group: 81%


Bbg/RIC 112.0569.90

332.10 (38)4.0


Absolute (%) (7.1) (4.0) (58.5)Relativ e (%) (9.6) (13.6) (64.3)

Year 3/09A 3/10A 3/11E 3/12E 3/13E119,120 104,478 99,987 133,903 146,501

5,303 7,913 8,941 9,275 9,893(2253) (3258) 1,263 929 833

(7.4) (9.8) 3.8 2.8 2.5n.a. n.a. (82) 0 0n.a. n.a. 6.9 10.8 14.1n.a. n.a. n.a. (26.5) (10.3)NM NM 29.5 40.1 44.70.3 0.2 0.2 0.2 0.2

12.2 9.6 8.5 9.1 9.31.4 1.2 1.2 1.1 1.1

(9.1) (3.8) 4.0 2.8 2.5110.6 127.0 122.2 146.5 165.0

296.20 - 105.30

Rev enues (Rs mn)

Major shareholders

37,211.4/ 794.5Mkt cap (Rs/US$ mn)Daily trad v al - 6m av g (US$ mn)



EPS (Rs)

Note 1: Punj Lloyd Limited is one of the leading engineering and construction companies in India. The Oil and Gas segment o f the company provides engineering construction services for onshore and offshore pipelines, gas gathering systems, tanks and terminals.


PUNJ IN / PUJL.BOU (N) [V]

P/B (x )






Promoter group: 37%



70

100

130

160

190

09/09 11/09 01/10 03/10 05/10 07/10 09/10

BGR Energy MSCI India

25

50

75

100

125

09/09 11/09 01/10 03/10 05/10 07/10 09/10

Punj Lloyd MSCI India



10 September 2010

David &

Goliath

27

Valuations of Credit Suisse Indonesia small-cap watch list* Market CS target/ Potential Credit Year HOLT CFROI

Cap Price HOLT warranted return Suisse end CFROI SpreadCompany RIC (US$ mn) (Rp) price (Rp) (%) Rating month 2009 2010 2009 2010 (%) (%) 1W 1M 3MAce Hardware ACES.JK 343 1,800 1,384 (23.1) Not rated Dec 19.6 17.2 3.6 3.0 14.2 8.5 1.1 (1.6) 2.9AKR Corporindo AKRA.JK 555 1,320 575 (56.5) Not rated Dec 15.9 14.4 2.5 2.0 4.9 (1.9) 7.3 (5.7) 26.9Aneka Tambang ANTM.JK 2,252 2,125 1,900 (10.6) NEUTRAL Dec 33.5 14.0 2.5 2.2 3.4 (1.2) 1.2 (2.3) 11.8Bakrie & Brothers BNBR.JK 521 50 29 (42.2) Not rated Dec (2.9) 13.4 0.9 1.5 (0.7) (7.3) 0.0 0.0 (12.3)Bakrie Sumatera UNSP.JK 412 280 468 67.1 Not rated Dec 4.3 14.0 0.4 0.5 6.2 (0.8) 1.8 (6.7) (24.3)Bank Bukopin BBKP.JK 466 690 632 (8.4) Not rated Dec 10.9 n.a. 1.6 1.6 6.2 (2.2) 0.0 7.8 25.5Bank CIMB Niaga BNGA.JK 3,028 1,150 678 (41.0) Not rated Dec 17.6 17.5 2.5 2.2 6.0 (1.4) (3.4) (12.9) 10.6Bank Danamon BDMN.JK 5,185 5,600 6,340 13.2 OUTPERFORM Dec 30.7 15.4 3.0 2.6 4.4 (2.6) 5.7 4.7 12.0Bank Negara BBNI.JK 6,174 3,675 3,500 (4.8) OUTPERFORM Dec 20.9 13.6 2.7 2.4 2.2 (5.0) 8.9 22.5 53.1Bank Pan Indonesia PNBN.JK 2,993 1,130 1,030 (8.8) NEUTRAL Dec 29.7 17.3 2.5 2.2 1.7 (5.7) 3.7 (2.6) 1.8Bayan Resources BYAN.JK 3,370 9,100 7,166 (21.3) Not rated Dec 222.0 39.9 12.6 9.1 4.8 (0.7) 3.4 13.8 49.2Bentoel Int'l. RMBA.JK 402 500 110 (78.0) Not rated Dec 133.7 n.a. 1.9 1.6 4.8 (1.4) (3.8) 5.3 38.9Berlian Laju BLTA.JK 308 240 148 (38.5) Not rated Dec (0.6) 11.4 0.3 0.2 1.2 (7.2) 2.1 (9.4) (22.0)BISI Int'l. BISI.JK 653 1,960 1,276 (34.9) Not rated Dec 78.4 21.1 5.8 4.5 8.5 3.4 4.8 23.3 53.1Ciputra Dev. CTRA.JK 556 330 390 18.2 NEUTRAL Dec 26.0 21.9 0.9 0.9 1.6 (3.7) 0.0 (9.6) (9.6)Citra Marga CMNP.JK 200 900 1,950 116.6 Not rated Dec 26.0 3.6 1.2 1.0 1.2 (5.6) 0.0 (4.3) 9.8Energi Mega ENRG.JK 401 89 334 275.3 Not rated Dec (0.8) 18.9 0.8 0.6 (29.2) (36.7) 1.1 (17.6) (28.2)Ensev al Putera EPMT.JK 246 970 1,390 43.3 Not rated Dec 6.7 8.4 1.4 1.2 16.7 10.7 2.1 2.1 (7.6)Excelcomindo Pratama EXCL.JK 4,727 5,000 5,000 0.0 OUTPERFORM Dec 21.1 17.3 4.8 3.8 6.3 (0.6) 0.0 6.4 29.0Gudang Garam GGRM.JK 9,620 45,000 42,800 (4.9) OUTPERFORM Dec 25.1 22.0 4.7 4.1 12.5 7.7 3.6 26.1 42.0Hexindo Adiperkasa HEXA.JK 481 5,150 8,565 66.3 Not rated Mar n.a. 9.4 n.a. 4.3 25.0 19.2 (1.0) (2.8) 19.8Holcim SMCB.JK 1,958 2,300 2,300 0.0 NEUTRAL Dec 19.7 16.8 5.3 4.0 4.2 (1.5) 2.2 2.2 9.5Indah Kiat Pulp & Paper INKP.JK 1,413 2,325 1,730 (25.6) Not rated Dec (8.9) 11.7 0.7 0.7 (3.8) (11.7) 10.7 25.0 34.4Indika Energy INDY.JK 1,880 3,250 1,799 (44.7) Not rated Dec 23.4 13.0 3.2 2.4 (2.2) (8.2) 1.6 (5.1) 11.1Indo Tambangraya Megah ITMG.JK 4,796 38,200 49,000 28.3 OUTPERFORM Dec 14.3 15.2 6.1 5.5 30.3 25.8 3.0 (2.4) 9.5Indosat ISAT.JK 3,109 5,150 7,100 37.9 OUTPERFORM Dec 18.7 18.4 1.6 1.5 (0.7) (6.9) 12.6 12.0 2.0Jasa Marga JSMR.JK 2,323 3,075 2,800 (8.9) OUTPERFORM Dec 21.1 17.9 2.9 2.7 5.1 (1.2) 2.5 15.0 54.5Kalbe Farma KLBF.JK 2,736 2,425 2,600 7.2 NEUTRAL Dec 26.5 18.6 5.7 4.7 16.3 11.2 3.2 1.0 32.5

Share price performanceRp term (%)P/B (x)P/E (x)


* Include the small-cap stocks in HOLT® database with market cap between US$50 mn and US$1.5 bn. For stocks that are Not Rated, I/B/E/S consensus forecast are used. CFROI® is a registered trademark in the United States and other countries (excluding the United Kingdom) of Credit Suisse or its subsidiaries or affiliates. * Companies in bold and italic indicate constituents of Credit Suisse Indonesia Small Cap Index

10 September 2010

David &

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28

Valuations of Credit Suisse Indonesia small-cap watch list* Market CS target/ Potential Credit Year HOLT CFROI

Cap Price HOLT warranted return Suisse end CFROI SpreadCompany RIC (US$ mn) (Rp) price (Rp) (%) Rating month 2009 2010 2009 2010 (%) (%) 1W 1M 3MLippo Karawaci LPKR.JK 961 500 680 36.0 NEUTRAL Dec 22.4 16.1 1.8 1.6 3.6 (1.9) 0.0 (2.0) 20.5London Sumatra LSIP.JK 1,478 9,750 9,213 (5.5) NEUTRAL Dec 18.8 14.7 3.5 2.9 5.7 0.7 4.8 0.5 19.6Matahari Putra MPPA.JK 582 940 675 (28.2) UNDERPERFORM Dec 22.3 21.4 1.2 1.2 7.4 (0.3) 4.4 (2.1) (11.3)Mayora Indah MYOR.JK 907 10,650 6,939 (34.8) Not rated Dec 22.0 18.3 5.2 4.4 8.4 1.8 0.9 39.2 62.6Medco Energi MEDC.JK 1,129 3,050 2,624 (14.0) Not rated Dec 52.0 15.4 1.3 1.6 (1.7) (8.6) 0.0 (10.3) 6.1Media Nusnt. Citra MNCN.JK 596 390 369 (5.5) Not rated Dec 13.9 n.a. 1.2 1.2 7.3 0.7 36.8 32.2 (6.0)Mobile 8 FREN.JK 206 50 n.a. n.a. Not rated Dec (1.4) n.a. 2.1 2.0 n.a. n.a. 0.0 0.0 0.0Ramayana RALS.JK 725 920 860 (6.5) NEUTRAL Dec 19.4 16.2 2.6 2.4 6.3 0.7 8.2 15.0 15.0Sampoerna Agro SGRO.JK 588 2,800 2,766 (1.2) NEUTRAL Dec 18.8 13.4 3.0 2.6 7.0 1.6 3.7 3.7 24.4Summarecon Agung SMRA.JK 725 950 717 (24.5) Not rated Dec 36.5 28.3 3.6 2.7 11.9 5.4 (1.0) (5.0) 11.8Tambang B. Bukit Asam PTBA.JK 4,723 18,450 18,400 (0.3) NEUTRAL Dec 15.6 20.1 7.2 6.4 24.8 20.5 3.9 13.2 13.5Tempo Scan Pacific TSPC.JK 805 1,610 969 (39.8) Not rated Dec 20.1 n.a. 3.0 2.7 9.3 3.8 10.3 19.3 87.2Timah TINS.JK 1,356 2,425 2,633 8.6 Not rated Dec 39.1 10.4 3.6 3.3 5.4 0.4 0.0 (4.0) 15.5United Tractors UNTR.JK 7,245 19,600 22,400 14.3 OUTPERFORM Dec 17.1 15.6 4.7 4.0 14.4 9.8 4.0 (0.5) 8.9Wijaya Karya WIKA.JK 390 600 389 (35.2) Not rated Dec 18.0 13.5 2.2 1.9 8.2 1.5 1.7 5.3 71.4

Calendarized Calendarized Share price performanceP/E (x) P/B (x) Rp term (%)

* Include the small-cap stocks in HOLT® database with market cap between US$50 mn and US$1.5 bn. For stocks that are Not Rated, I/B/E/S consensus forecast are used. CFROI® is a registered trademark in the United States and other countries (excluding the United Kingdom) of Credit Suisse or its subsidiaries or affiliates. * Companies in bold and italic indicate constituents of Credit Suisse Indonesia Small Cap Index

10 September 2010

David &

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29

Indonesia – Screening Absolute price performance - top & bottom 10 companies Absolute price performance - top & bottom 10 companies Absolute price performance - top & bottom 10 companies Price 1W return Price 1M return Price 3M returnCompany RIC (Rp) (%) Company RIC (Rp) (%) Company RIC (Rp) (%)Winners Winners Winners Media Nusnt. Citra MNCN.JK 390.00 36.8 Mayora Indah MYOR.JK 10,650.00 39.2 Tempo Scan Pacific TSPC.JK 1,610.00 87.2 Indosat ISAT.JK 5,150.00 12.6 Media Nusnt. Citra MNCN.JK 390.00 32.2 Mayora Indah MYOR.JK 10,650.00 62.6 Indah Kiat Pulp & Paper INKP.JK 2,325.00 10.7 Gudang Garam GGRM.JK 45,000.00 26.1 Jasa Marga JSMR.JK 3,075.00 54.5 Tempo Scan Pacific TSPC.JK 1,610.00 10.3 Indah Kiat Pulp & Paper INKP.JK 2,325.00 25.0 Bank Negara BBNI.JK 3,675.00 53.1 Bank Negara BBNI.JK 3,675.00 8.9 BISI Int'l. BISI.JK 1,960.00 23.3 BISI Int'l. BISI.JK 1,960.00 53.1 Ramayana RALS.JK 920.00 8.2 Bank Negara BBNI.JK 3,675.00 22.5 Bayan Resources BYAN.JK 9,100.00 49.2 AKR Corporindo AKRA.JK 1,320.00 7.3 Tempo Scan Pacific TSPC.JK 1,610.00 19.3 Gudang Garam GGRM.JK 45,000.00 42.0 Bank Danamon BDMN.JK 5,600.00 5.7 Ramayana RALS.JK 920.00 15.0 Bentoel Int'l. RMBA.JK 500.00 38.9 London Sumatra LSIP.JK 9,750.00 4.8 Jasa Marga JSMR.JK 3,075.00 15.0 Indah Kiat Pulp & Paper INKP.JK 2,325.00 34.4 BISI Int'l. BISI.JK 1,960.00 4.8 Bayan Resources BYAN.JK 9,100.00 13.8 Kalbe Farma KLBF.JK 2,425.00 32.5 Losers Losers Losers Bentoel Int'l. RMBA.JK 500.00 (3.8) Energi Mega ENRG.JK 89.00 (17.6) Energi Mega ENRG.JK 89.00 (28.2)Bank CIMB Niaga BNGA.JK 1,150.00 (3.4) Bank CIMB Niaga BNGA.JK 1,150.00 (12.9) Bakrie Sumatera UNSP.JK 280.00 (24.3)Summarecon Agung SMRA.JK 950.00 (1.0) Medco Energi MEDC.JK 3,050.00 (10.3) Berlian Laju BLTA.JK 240.00 (22.0)Hexindo Adiperkasa HEXA.JK 5,150.00 (1.0) Ciputra Dev. CTRA.JK 330.00 (9.6) Bakrie & Brothers BNBR.JK 50.00 (12.3) Berlian Laju BLTA.JK 240.00 (9.4) Matahari Putra MPPA.JK 940.00 (11.3) Bakrie Sumatera UNSP.JK 280.00 (6.7) Ciputra Dev. CTRA.JK 330.00 (9.6) AKR Corporindo AKRA.JK 1,320.00 (5.7) Enseval Putera EPMT.JK 970.00 (7.6) Indika Energy INDY.JK 3,250.00 (5.1) Media Nusnt. Citra MNCN.JK 390.00 (6.0) Summarecon Agung SMRA.JK 950.00 (5.0) Citra Marga CMNP.JK 900.00 (4.3)

Price-to-earnings - most & least expensive 10 companies Price-to-book - most & least expensive 10 companies CFROI® Spread - top & bottom 10 companies Price 10 P/E Price 10 P/B Price CFROI® SpreadCompany RIC (Rp) (x) Company RIC (Rp) (x) Company RIC (Rp) (%)Winners Winners Winners Citra Marga CMNP.JK 900.00 3.6 Berlian Laju BLTA.JK 240.00 0.2 Tambang B. Bukit Asam PTBA.JK 18,450.00 20.5 Enseval Putera EPMT.JK 970.00 8.4 Bakrie Sumatera UNSP.JK 280.00 0.5 Hexindo Adiperkasa HEXA.JK 5,150.00 19.2 Hexindo Adiperkasa HEXA.JK 5,150.00 9.4 Energi Mega ENRG.JK 89.00 0.6 Kalbe Farma KLBF.JK 2,425.00 11.2 Berlian Laju BLTA.JK 240.00 11.4 Indah Kiat Pulp & Paper INKP.JK 2,325.00 0.7 Enseval Putera EPMT.JK 970.00 10.7 Indah Kiat Pulp & Paper INKP.JK 2,325.00 11.7 Ciputra Dev. CTRA.JK 330.00 0.9 Ace Hardware ACES.JK 1,800.00 8.5 Indika Energy INDY.JK 3,250.00 13.0 Citra Marga CMNP.JK 900.00 1.0 Gudang Garam GGRM.JK 45,000.00 7.7 Sampoerna Agro SGRO.JK 2,800.00 13.4 Matahari Putra MPPA.JK 940.00 1.2 Summarecon Agung SMRA.JK 950.00 5.4 Bakrie & Brothers BNBR.JK 50.00 13.4 Media Nusnt. Citra MNCN.JK 390.00 1.2 Tempo Scan Pacific TSPC.JK 1,610.00 3.8 Bank Negara BBNI.JK 3,675.00 13.6 Enseval Putera EPMT.JK 970.00 1.2 BISI Int'l. BISI.JK 1,960.00 3.4 Bakrie Sumatera UNSP.JK 280.00 14.0 Bakrie & Brothers BNBR.JK 50.00 1.5 Mayora Indah MYOR.JK 10,650.00 1.8 Losers Losers Losers Bayan Resources BYAN.JK 9,100.00 39.9 Bayan Resources BYAN.JK 9,100.00 9.1 Energi Mega ENRG.JK 89.00 (36.7)Summarecon Agung SMRA.JK 950.00 28.3 Tambang B. Bukit Asam PTBA.JK 18,450.00 6.4 Indah Kiat Pulp & Paper INKP.JK 2,325.00 (11.7)Gudang Garam GGRM.JK 45,000.00 22.0 Indo Tambangraya Megah ITMG.JK 38,200.00 5.5 Medco Energi MEDC.JK 3,050.00 (8.6)Ciputra Dev. CTRA.JK 330.00 21.9 Kalbe Farma KLBF.JK 2,425.00 4.7 Indika Energy INDY.JK 3,250.00 (8.2)Matahari Putra MPPA.JK 940.00 21.4 BISI Int'l. BISI.JK 1,960.00 4.5 Bakrie & Brothers BNBR.JK 50.00 (7.3)BISI Int'l. BISI.JK 1,960.00 21.1 Mayora Indah MYOR.JK 10,650.00 4.4 Berlian Laju BLTA.JK 240.00 (7.2)Tambang B. Bukit Asam PTBA.JK 18,450.00 20.1 Hexindo Adiperkasa HEXA.JK 5,150.00 4.3 Indosat ISAT.JK 5,150.00 (6.9)Energi Mega ENRG.JK 89.00 18.9 Gudang Garam GGRM.JK 45,000.00 4.1 Bank Pan Indonesia PNBN.JK 1,130.00 (5.7)Kalbe Farma KLBF.JK 2,425.00 18.6 Holcim SMCB.JK 2,300.00 4.0 Citra Marga CMNP.JK 900.00 (5.6)Indosat ISAT.JK 5,150.00 18.4 Excelcomindo Pratama EXCL.JK 5,000.00 3.8 Bank Negara BBNI.JK 3,675.00 (5.0)


10 September 2010

David &

Goliath

30

Valuations of Credit Suisse Korea small-cap watch list* Market CS target/ Potential Credit Year HOLT CFROI

Cap Price HOLT warranted return Suisse end CFROI SpreadCompany RIC (US$ mn) (W) price (W) (%) Rating month 2009 2010 2009 2010 (%) (%) 1W 1M 3MAce Digitech 036550.KQ 460 23,300 30,751 32.0 Not rated Dec 32.6 11.4 5.7 4.8 14.8 7.7 5.2 2.6 1.5Asiana Airlines 020560.KS 1,234 8,240 9,632 16.9 Not rated Dec (5.5) 4.4 2.0 2.0 1.0 (6.6) (1.1) (9.0) 12.9BHI 083650.KQ 273 24,550 17,695 (27.9) Not rated Dec 14.2 13.2 4.0 3.1 18.9 11.7 (5.6) 17.5 (12.3)Bing-Grae 005180.KS 433 51,700 62,542 21.0 Not rated Dec 9.3 8.9 1.4 1.3 9.8 3.0 (1.5) 9.1 3.8Bukwang Pharma. 003000.KS 276 12,000 15,285 27.4 Not rated Mar 11.1 10.4 1.7 1.5 11.4 4.7 (3.2) (10.4) (9.8)Busan Bank 005280.KS 1,952 12,300 14,500 17.9 NEUTRAL Dec 9.0 6.3 1.1 0.9 8.1 0.1 (5.4) (5.0) 10.8Cape 064820.KQ 58 7,600 7,282 (4.2) Not rated Dec 8.2 10.4 0.7 0.6 6.4 (0.8) (0.7) (6.2) (14.6)Capro 006380.KS 571 16,800 18,242 8.6 Not rated Dec 79.6 8.1 6.2 6.1 3.3 (3.9) 3.1 11.6 43.0Celltrion 068270.KQ 2,256 21,700 9,307 (57.1) Not rated Dec 38.0 27.2 7.8 7.0 12.4 5.9 2.1 5.3 7.2Cheil Worldwide 030000.KS 1,316 13,450 15,000 11.5 OUTPERFORM Dec 15.7 16.1 2.7 2.6 14.2 7.7 (0.4) 11.6 1.5Chong Kun Dang Pharma. 001630.KS 247 22,300 41,433 85.8 Not rated Dec 10.8 7.3 1.3 1.1 9.5 2.2 (0.2) 5.2 29.7Choong Wae Pharm. 001060.KS 133 16,300 (781) (104.8) Not rated Dec 14.2 14.2 0.8 0.7 6.1 (1.5) (0.3) (8.4) 3.2CJ 001040.KS 2,287 92,900 116,235 25.1 Not rated Dec 13.7 12.3 1.3 1.2 10.0 2.9 (4.8) 26.4 57.7CJ CGV 079160.KS 474 27,050 18,301 (32.3) Not rated Dec 13.7 13.3 2.4 2.1 9.4 2.1 (3.9) 24.7 16.6CJ Cheiljedang 097950.KS 2,473 235,500 260,000 10.4 NEUTRAL Dec 10.5 4.4 1.6 1.0 11.4 4.6 (3.1) 7.3 10.0CJ O Shopping 035760.KQ 1,203 128,400 100,000 (22.1) NEUTRAL Dec 18.0 16.0 2.6 2.3 16.4 9.4 0.0 13.5 42.0CJ Internet 037150.KQ 239 12,350 13,000 5.3 NEUTRAL Dec 10.8 41.5 1.2 1.2 19.0 12.3 3.8 6.5 9.3Credu 067280.KQ 140 29,200 14,940 (48.8) Not rated Dec 30.6 22.6 2.1 1.9 (1.1) (7.9) 4.5 2.3 12.7Daeduck Electronics 008060.KS 294 7,080 11,338 60.1 Not rated Dec 5.9 7.8 0.9 0.9 5.9 (1.0) 2.8 3.4 (3.5)Daeduck GDS 004130.KS 155 8,840 16,516 86.8 Not rated Dec 6.2 5.9 0.7 0.6 7.9 1.1 0.5 (9.5) (9.3)Daegu Bank 005270.KS 1,483 13,200 17,000 28.8 NEUTRAL Dec 10.2 6.2 1.0 0.9 7.4 (0.7) (8.7) (10.5) (7.0)Daehan City Gas 026870.KS 231 27,950 50,795 81.7 Not rated Dec 8.9 8.2 0.7 0.7 2.8 (4.4) (1.9) (3.6) 2.6Daehan Steel 084010.KS 169 8,260 10,458 26.6 Not rated Dec 3.3 6.5 0.6 0.5 11.7 4.6 0.0 (12.2) (0.1)Daelim Industrial 000210.KS 2,275 76,900 86,000 11.8 OUTPERFORM Dec 8.6 6.3 0.8 0.7 4.3 (2.7) (1.2) 15.6 26.1Daesang 001680.KS 218 7,660 11,834 54.5 Not rated Dec 36.4 5.5 0.6 0.6 3.0 (4.6) 0.9 (9.9) (14.8)Daesung 005620.KS 146 128,500 58,909 (54.2) Not rated Dec 5.3 20.9 0.1 0.1 4.2 (3.5) 3.2 0.4 42.2Daewoo Motor Sales 004550.KS 113 3,055 (21,643) (808.5) Not rated Dec (0.8) 29.7 0.1 0.1 (1.4) (9.0) (7.4) (24.8) 32.5Daewoong Pharm. 069620.KS 428 47,000 84,692 80.2 Not rated Mar 9.8 6.7 1.5 1.3 11.1 4.3 (1.1) (1.4) (4.9)Daishin Securities 003540.KS 611 14,150 14,100 (0.4) NEUTRAL Mar 10.9 9.7 0.5 0.4 3.6 (6.9) (1.4) (6.9) 1.4

CalendarizedCalendarized Share price performanceW term (%)P/B (x)P/E (x)

* Include the small-cap stocks in HOLT® database with market cap between US$50 mn and US$1.5 bn. For stocks that are Not Rated, I/B/E/S consensus forecast are used. CFROI® is a registered trademark in the United States and other countries (excluding the United Kingdom) of Credit Suisse or its subsidiaries or affiliates. * Companies in bold and italic indicate constituents of Credit Suisse Korea Small Cap Index.

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Cap Price HOLT warranted return Suisse end CFROI SpreadCompany RIC (US$ mn) (W) price (W) (%) Rating month 2009 2010 2009 2010 (%) (%) 1W 1M 3MDaou Technology 023590.KS 263 7,720 3,589 (53.5) Not rated Dec 7.5 6.5 0.8 0.6 5.6 (1.7) (5.3) 4.3 0.1Daum Comm. 035720.KQ 778 68,800 99,000 43.9 OUTPERFORM Dec 31.3 8.4 4.3 2.7 15.2 8.6 (4.4) (8.5) (18.4)DMS 068790.KQ 178 10,500 7,900 (24.8) NEUTRAL Dec 63.0 8.9 1.2 1.2 6.4 (1.0) 8.6 (11.8) (22.5)Dongkuk Steel 001230.KS 1,235 23,500 25,000 6.4 NEUTRAL Dec 28.9 6.2 0.5 0.5 0.9 (6.1) (3.1) (8.7) 16.6Dong-A Pharm. 000640.KS 1,254 132,500 126,628 (4.4) Not rated Dec 21.8 17.0 2.4 2.2 11.0 4.3 (2.6) 13.7 14.2Dongbu 005960.KS 119 6,430 17,952 179.2 Not rated Dec 2.8 3.0 0.2 0.2 7.0 (0.8) (4.0) (0.6) 5.4Dongbu Insurance 005830.KS 2,089 34,700 46,000 32.6 OUTPERFORM Mar 9.3 7.6 1.6 1.4 0.4 (7.6) 2.1 (5.3) 0.4Dongbu Steel 016380.KS 424 9,850 (11,825) (220.0) Not rated Dec 10.0 (89.7) 0.3 0.3 1.6 (6.0) 0.4 (10.0) 8.7Dongwon Industry 006040.KS 349 122,000 215,415 76.6 Not rated Dec 5.5 5.5 1.3 1.2 11.3 3.9 (2.4) (2.0) (6.5)Doosan E&C 011160.KS 276 4,760 11,393 139.3 Not rated Dec 6.4 4.4 0.4 0.3 6.8 (0.6) (2.9) 9.4 15.4E1 017940.KS 303 52,000 63,635 22.4 Not rated Dec (2.2) n.a. 0.4 0.4 (9.6) (17.0) (2.3) (2.4) (13.5)Forhuman 049690.KQ 122 8,360 5,581 (33.2) Not rated Dec (12.8) n.a. 1.1 0.8 (9.6) (16.5) 5.6 20.6 16.1Glovis 086280.KS 5,069 159,000 81,037 (49.0) Not rated Dec 31.4 26.4 7.2 6.5 13.1 6.8 1.0 10.0 18.7Green Cross 006280.KS 1,188 155,000 213,167 37.5 Not rated Dec 17.3 11.8 3.9 3.2 19.1 12.6 (1.9) 5.4 22.5GS Home Shopping 028150.KQ 480 86,100 110,000 27.8 OUTPERFORM Dec 9.7 7.3 1.6 1.4 26.0 19.1 (11.4) (0.9) 17.9Gwangju Shingsegae 037710.KS 238 175,000 282,474 61.4 Not rated Dec 7.7 6.4 1.3 1.1 13.0 6.0 4.2 13.3 15.5Halla Climate Control 018880.KS 1,638 18,050 27,330 51.4 Not rated Dec 12.7 9.4 2.0 1.8 11.6 5.0 (1.1) 0.8 17.2Halla E&C 014790.KS 225 13,250 46,098 247.9 Not rated Dec 1.8 2.3 0.3 0.2 12.6 4.9 1.5 5.2 2.7Hana Tour 039130.KQ 504 51,000 46,000 (9.8) UNDERPERFORM Dec (118.9) 23.4 6.5 5.3 6.8 0.2 (1.9) (8.4) 11.2Handsome 020000.KS 400 19,100 25,735 34.7 Not rated Dec 8.3 8.0 0.9 0.8 10.2 3.3 (6.6) 13.0 36.4Hanil Cement 003300.KS 359 55,900 122,552 119.2 Not rated Dec 9.8 6.0 0.4 0.4 1.7 (5.3) (3.8) 5.1 (6.4)Hanjin Heavy Inds. 097230.KS 1,260 31,000 (17,235) (155.6) Not rated Dec 28.7 16.2 0.7 0.7 3.9 (3.3) 7.3 2.0 29.4Hanjin Transportation 002320.KS 336 33,050 41,106 24.4 Not rated Dec 74.1 5.7 0.6 0.5 3.3 (4.0) 0.9 (8.6) (10.4)Hankuk Paper 002300.KS 129 30,350 76,513 152.1 Not rated Dec 2.4 3.8 0.4 0.4 9.8 2.5 1.5 (7.0) (9.1)Hanmi Semiconductor 042700.KS 173 7,990 6,661 (16.6) Not rated Dec 27.0 12.4 1.5 1.3 3.1 (4.0) 3.1 7.4 13.0Hanshin Construction 004960.KS 69 8,190 21,006 156.5 Not rated Dec 4.4 5.1 0.2 0.2 3.0 (4.6) (1.9) (3.5) (11.1)Hansol LCD 004710.KS 282 43,750 66,067 51.0 Not rated Dec 13.5 9.4 2.3 2.0 13.2 5.9 7.0 (6.8) (19.1)Hansol Paper 004150.KS 503 13,550 20,784 53.4 Not rated Dec 13.0 6.1 0.8 0.7 3.9 (3.7) 0.4 (2.5) 1.1

Share price performanceW term (%)



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Cap Price HOLT warranted return Suisse end CFROI SpreadCompany RIC (US$ mn) (W) price (W) (%) Rating month 2009 2010 2009 2010 (%) (%) 1W 1M 3MHanssem 009240.KS 214 10,700 15,716 46.9 Not rated Dec 9.7 6.6 1.3 1.2 8.7 1.5 (4.5) (10.1) (19.5)Hanwha Chemical 009830.KS 3,155 26,450 17,000 (35.7) UNDERPERFORM Dec 10.8 9.7 1.4 1.2 7.2 0.1 0.4 21.9 62.8Hite Brewery 103150.KS 1,041 128,000 140,000 9.4 NEUTRAL Dec 12.3 16.4 1.5 1.5 6.5 (0.3) (3.8) (9.9) (19.2)Hite Holdings 000140.KS 401 20,300 28,704 41.4 Not rated Dec 17.6 25.9 0.5 0.5 6.3 (0.9) (1.2) (7.7) (2.9)Hotel Shilla 008770.KS 1,006 30,150 1,501 (95.0) Not rated Dec 37.4 20.7 2.2 2.2 4.1 (3.2) 2.4 15.5 40.2Huchems Fine Chemical 069260.KS 725 20,850 31,169 49.5 Not rated Dec 6.9 6.6 1.7 1.6 13.6 6.8 3.9 18.3 29.8Humax 028080.KQ 84 7,850 17,328 120.7 Not rated Dec 1.3 5.1 0.5 0.4 22.1 14.4 (1.4) (5.9) (5.2)Husteel 005010.KS 102 17,400 42,653 145.1 Not rated Dec (47.5) 5.1 0.3 0.3 (0.7) (8.1) 1.2 1.5 15.6Hyosung 004800.KS 3,284 110,000 83,038 (24.5) Not rated Dec 11.3 8.7 1.3 1.3 6.0 (0.9) 1.9 21.4 50.3Hyundai 011760.KS 512 26,950 9,132 (66.1) Not rated Dec (11.1) 13.0 4.1 3.8 (9.3) (16.6) 0.9 0.6 27.1Hy undai Dept. Store 069960.KS 2,577 133,500 145,000 8.6 OUTPERFORM Dec 12.7 12.3 1.8 1.5 8.1 1.6 0.0 5.5 14.1Hyundai H&S 005440.KS 574 11,900 10,961 (7.9) Not rated Dec 13.2 13.5 1.0 0.9 4.2 (2.6) (0.8) 17.8 21.8Hyundai Hysco 010520.KS 1,381 20,250 18,777 (7.3) Not rated Dec 27.8 8.3 1.4 1.3 5.1 (2.1) 3.3 (3.3) 15.1Hyundai M&F 001450.KS 1,710 22,500 27,000 20.0 OUTPERFORM Mar 9.7 8.0 1.5 1.3 14.2 6.1 7.4 (3.2) (6.6)Hyunjin Materials 053660.KQ 199 16,100 13,685 (15.0) Not rated Dec 9.6 10.2 1.1 0.8 10.0 3.1 1.3 (14.8) (11.0)Infopia 036220.KQ 100 15,650 7,776 (50.3) Not rated Dec 19.9 12.7 2.2 1.5 6.4 (0.7) 2.3 20.8 9.4Infraware 041020.KQ 152 9,770 27,471 181.2 Not rated Dec 77.5 20.4 4.1 3.4 17.0 10.2 10.4 17.3 (11.6)Insun Env. 060150.KQ 93 3,205 7,869 145.5 Not rated Dec 9.7 3.4 0.7 0.6 6.3 (0.7) (2.3) (5.3) (17.8)Intelligent Digital 054800.KQ 133 15,600 17,983 15.3 Not rated Dec 7.1 7.4 1.0 0.7 11.1 4.0 7.6 4.7 6.8Interpark 035080.KQ 220 4,265 4,506 5.6 Not rated Dec 0.9 (185.4) 0.6 0.5 (1.7) (8.5) (0.1) (7.3) (15.9)Intops 049070.KQ 142 19,450 23,532 21.0 Not rated Dec 7.0 7.3 0.7 0.6 8.0 0.9 (1.5) 1.0 (4.0)Jeonbuk Bank 006350.KS 293 6,200 8,061 30.0 Not rated Dec 6.1 5.6 0.7 0.7 8.3 (0.6) (1.3) (2.8) (1.3)Jinro Distillers 018120.KQ 145 12,950 11,178 (13.7) Not rated Dec 10.1 11.2 1.7 1.7 14.3 7.4 0.0 (3.0) 3.6Jusong Engineering 036930.KQ 568 19,800 11,000 (44.4) NEUTRAL Dec 316.1 14.6 3.8 3.2 (0.0) (6.9) 8.2 (3.4) (1.2)KC Cottrell 009440.KS 56 4,540 9,070 99.8 Not rated Dec 4.5 n.a. 0.7 0.6 12.1 5.0 (1.3) (11.0) 49.1KCC E&C 021320.KQ 114 23,200 68,739 196.3 Not rated Dec 2.4 n.a. 0.4 0.3 10.2 2.8 (4.1) (4.9) (9.4)Keang Nam Ent. 000800.KS 100 7,430 (3,807) (151.2) Not rated Dec 5.1 n.a. 0.2 0.2 6.2 (1.6) (2.7) (5.4) (10.3)KH Vatec 060720.KQ 216 15,850 63,838 302.8 Not rated Dec 4.2 4.1 1.5 1.2 31.3 24.5 3.6 10.1 (3.9)Kisw ire 002240.KS 397 35,900 87,594 144.0 Not rated Dec 5.9 n.a. 0.6 0.5 7.1 0.2 (4.4) (7.9) (0.4)Kiwoom Securities 039490.KS 876 46,600 20,554 (55.9) Not rated Mar 12.5 10.4 1.6 1.1 10.5 2.3 3.3 2.0 15.8




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Cap Price HOLT warranted return Suisse end CFROI SpreadCompany RIC (US$ mn) (W) price (W) (%) Rating month 2009 2010 2009 2010 (%) (%) 1W 1M 3MKolon E&C 003070.KS 74 3,850 4,571 18.7 Not rated Dec 16.0 3.1 0.3 0.2 2.3 (5.4) (3.0) (2.3) (4.0)Kolon Industries 002020.KS 353 35,750 161,681 352.3 Not rated Dec 2.1 n.a. 0.4 0.3 62.4 55.6 1.7 7.7 36.7Korea Ex press 000120.KS 1,142 58,900 62,106 5.4 Not rated Dec 293.6 17.0 0.6 0.5 6.7 (0.0) (1.8) (5.5) 1.2Korea Kumho Petrochem. 011780.KS 1,444 66,800 (18,504) (127.7) Not rated Dec (2.4) 7.2 3.3 3.3 (14.0) (21.5) 11.1 21.5 73.5Korea Line 005880.KS 500 47,550 68,399 43.8 Not rated Dec (0.9) (6.1) 0.8 0.8 (67.4) (74.8) (2.9) (15.1) 4.3Korea Petrochem. 006650.KS 370 67,000 117,264 75.0 Not rated Dec 4.4 5.4 1.0 0.9 11.1 3.9 (3.9) (7.5) 27.6Korea Zinc 010130.KS 4,580 285,500 288,578 1.1 Not rated Dec 12.2 11.0 2.3 2.1 12.0 5.6 0.2 12.8 49.5Korean Reinsurance 003690.KS 1,138 11,550 14,600 26.4 OUTPERFORM Mar 9.3 8.2 1.2 1.0 28.1 19.9 0.9 1.3 16.5KP Chemical 064420.KS 1,024 12,250 19,796 61.6 Not rated Dec 7.3 7.9 1.5 1.4 5.4 (1.2) 0.4 4.7 23.7KT Hitel 036030.KQ 181 6,170 5,953 (3.5) Not rated Dec 22.2 21.4 1.1 1.1 5.2 (1.7) (2.8) (8.0) (15.0)Kukdo Chemical 007690.KS 190 38,450 38,538 0.2 Not rated Dec 9.9 13.3 1.0 0.9 6.3 (0.9) 2.7 14.9 29.9Kumho Electric 001210.KS 240 40,750 27,943 (31.4) Not rated Dec 14.9 11.5 0.9 0.9 3.2 (4.0) 0.6 (5.2) (15.9)Kumho Tires 073240.KS 296 4,965 987 (80.1) Not rated Dec (0.4) (4.5) 116.2 (5.4) (13.1) (20.2) (0.7) (8.2) 45.2Kyeryong Cons. 013580.KS 95 12,550 36,221 188.6 Not rated Dec 3.6 3.6 0.2 0.2 6.8 (0.8) (6.3) (13.1) (8.1)Kyung Dong City Gas 012320.KS 109 40,650 125,974 209.9 Not rated Dec 5.3 4.2 0.5 0.5 5.8 (1.2) (1.2) (0.9) (12.3)LG Fashion 093050.KS 783 31,500 26,270 (16.6) Not rated Dec 13.1 10.1 1.5 1.2 5.9 (1.7) (2.2) 3.6 19.1LG Int'l. 001120.KS 1,209 36,700 38,488 4.9 Not rated Dec 15.2 4.7 2.1 2.1 10.7 3.7 (1.5) 7.5 27.9LG Life Sciences 068870.KS 768 54,500 34,542 (36.6) Not rated Dec 33.5 35.1 3.0 2.8 7.4 0.8 2.3 4.8 24.7LG Telecom 032640.KS 3,199 7,310 8,500 16.3 NEUTRAL Dec 8.1 4.4 0.9 0.8 6.9 0.2 (2.5) (7.0) (9.6)LIG Insurance 002550.KS 1,173 23,000 31,300 36.1 OUTPERFORM Mar 8.1 7.2 1.2 1.0 7.1 (1.1) 4.1 (4.6) (4.0)Lotte Chilsung 005300.KS 789 750,000 1,126,535 50.2 Not rated Dec 115.9 23.7 0.5 0.5 2.9 (3.9) (3.6) (4.2) (3.4)Lotte Confectionery 004990.KS 1,516 1,255,000 1,423,393 13.4 Not rated Dec 18.3 13.4 0.7 0.7 1.9 (4.7) (1.3) (5.9) (0.1)Lotte Samkang 002270.KS 269 251,000 471,338 87.8 Not rated Dec 6.9 6.2 0.8 0.7 8.9 1.8 1.6 (12.2) (10.5)LS Industrial Systems 010120.KS 2,551 100,000 52,287 (47.7) Not rated Dec 17.2 21.8 4.5 4.2 11.1 4.7 0.6 16.4 51.1Macquarie Korea Infra. Fund 088980.KS 1,316 4,670 7,500 60.6 OUTPERFORM Dec 15.4 14.5 0.9 0.9 3.4 (6.9) 0.0 3.7 3.9Maeil Dairy 005990.KQ 198 17,400 17,349 (0.3) Not rated Dec 10.6 8.4 0.9 0.8 5.3 (2.1) (3.9) 2.1 26.1Megastudy 072870.KQ 941 174,600 170,000 (2.6) NEUTRAL Dec 16.0 15.2 4.7 3.8 26.9 20.5 2.8 0.3 (3.0)Meritz F&M 000060.KS 776 7,370 11,000 49.3 OUTPERFORM Mar 10.1 5.4 1.2 1.0 12.4 3.9 1.9 (5.3) (6.6)




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Cap Price HOLT warranted return Suisse end CFROI SpreadCompany RIC (US$ mn) (W) price (W) (%) Rating month 2009 2010 2009 2010 (%) (%) 1W 1M 3MMeritz Securities 008560.KS 253 965 1,055 9.4 Not rated Mar 7.6 6.0 0.5 0.5 5.0 (5.9) (1.0) (4.5) (2.5)Modetour Network 080160.KQ 224 31,300 31,342 0.1 Not rated Dec 207.3 15.3 5.0 4.8 2.4 (4.5) (4.3) (13.1) 15.9Moorim Paper 009200.KS 147 8,320 2,421 (70.9) Not rated Dec 3.5 3.1 0.5 0.4 4.6 (3.0) 1.2 (3.4) 2.3Namkw ang E&C 001260.KS 96 3,255 (3,004) (192.3) Not rated Dec (11.6) n.a. 0.4 0.3 (0.7) (8.0) 0.3 (4.7) (10.7)Namehae Chemical 025860.KS 743 17,600 11,914 (32.3) Not rated Dec (20.1) 15.5 2.3 2.3 (7.9) (14.5) 7.0 (3.8) 24.4Nepes 033640.KQ 268 16,950 18,183 7.3 Not rated Dec 15.4 10.4 2.4 2.2 9.0 1.7 7.3 (13.5) (12.2)Nexen Tire 002350.KS 592 7,340 10,861 48.0 Not rated Dec 6.4 8.1 1.8 1.6 17.7 10.6 5.9 7.5 8.9Nongshim 004370.KS 1,138 220,000 244,000 10.9 NEUTRAL Dec 10.5 13.1 1.1 1.1 7.7 1.1 0.0 (2.4) (0.9)On Media 045710.KS 348 3,470 11,343 226.9 Not rated Dec 25.6 22.5 0.9 0.7 30.6 23.9 3.4 15.7 2.4Orion 001800.KS 2,043 403,000 231,600 (42.5) Not rated Dec 57.0 11.3 4.5 4.8 4.3 (2.5) (6.0) 14.3 13.2Osstem Implant 048260.KQ 173 14,300 8,568 (40.1) Not rated Dec 56.0 19.0 2.5 1.9 10.6 3.4 (2.4) (1.7) 30.6Ottogi 007310.KS 421 144,000 212,905 47.9 Not rated Dec 8.0 7.8 1.2 1.1 9.4 2.6 2.1 (3.0) (0.3)Pacific 002790.KS 1,180 174,000 241,808 39.0 Not rated Dec 17.8 n.a. 1.0 1.0 14.0 7.5 (0.6) 12.3 16.8Paradise 034230.KQ 252 3,265 4,385 34.3 Not rated Dec 8.0 9.1 0.6 0.6 5.8 (1.4) 0.9 (0.2) 3.5Patron 091700.KQ 314 18,450 61,195 231.7 Not rated Dec 14.7 11.1 3.9 3.5 36.7 29.8 2.8 0.3 0.5People & Telecom 054340.KQ 92 6,420 12,453 94.0 Not rated Dec 4.9 4.9 0.6 0.6 6.5 (0.5) 0.3 2.2 (14.1)POSCO Coated 058430.KS 156 30,500 40,797 33.8 Not rated Dec (9.5) 6.5 0.7 0.7 (7.1) (14.3) 4.6 (3.0) 26.0POSCO Refrac. 003670.KQ 575 114,500 89,942 (21.4) Not rated Dec 20.4 13.0 3.7 3.5 7.1 (0.1) 4.0 23.8 54.7Pusan City Gas 015350.KS 198 21,200 51,194 141.5 Not rated Dec 11.4 6.5 0.7 0.7 6.7 (0.4) 1.9 (1.6) 2.7Pyeong San 089480.KQ 146 8,040 8,364 4.0 Not rated Dec (0.9) 6.0 0.9 0.9 (26.3) (33.2) (1.6) (23.8) (21.9)S&T Daewoo 064960.KS 250 25,250 38,219 51.4 Not rated Dec 29.2 7.5 0.7 0.6 2.5 (4.8) (5.3) (7.0) (8.8)S&T Dynamics 003570.KS 595 21,550 20,910 (3.0) Not rated Dec 15.8 11.5 1.2 1.1 7.5 0.6 1.7 19.1 27.1S1 012750.KS 1,845 57,100 60,000 5.1 NEUTRAL Dec 20.4 18.3 3.2 3.1 10.0 3.6 (4.2) (0.3) 3.8Sambu Cons. 001470.KS 96 14,300 (5,477) (138.3) Not rated Dec (4.3) 10.9 0.3 0.3 0.3 (7.5) 5.9 0.7 (3.7)Samkwang Glass 005090.KS 269 65,100 54,366 (16.5) Not rated Dec 11.5 11.6 1.8 1.8 5.9 (1.5) 3.7 36.8 64.8Samyang 000070.KS 476 55,900 110,505 97.7 Not rated Dec 6.0 6.1 0.6 0.6 3.9 (3.4) (1.9) (2.3) 14.4Samchully 004690.KS 379 110,000 229,193 108.4 Not rated Dec 3.4 8.7 0.5 0.5 2.3 (4.7) 3.3 7.8 5.8Samsung Fine Chemical 004000.KS 1,465 66,800 44,733 (33.0) Not rated Dec 19.5 19.8 2.0 1.9 5.6 (0.9) 0.0 (0.3) 8.1Samyang Genex 003940.KS 160 63,100 94,287 49.4 Not rated Dec 10.8 n.a. 0.5 0.5 2.4 (4.9) (0.6) (3.2) 1.0Sam Young Electronic 005680.KS 211 12,400 20,972 69.1 Not rated Dec 18.0 8.0 0.6 0.6 1.5 (5.4) 0.4 0.8 14.8

Calendarized Calendarized Share price performanceP/E (x) P/B (x) W term (%)

* Include the small-cap stocks in HOLT® database with market cap between US$50 mn and US$1.5 bn. For stocks that are Not Rated, I/B/E/S consensus forecast are used. CFROI® is a registered trademark in the United States and other countries (excluding the United Kingdom) of Credit Suisse or its subsidiaries or affiliates. * Companies in bold and italic indicate constituents of Credit Suisse Korea Small Cap Index

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Cap Price HOLT warranted return Suisse end CFROI SpreadCompany RIC (US$ mn) (W) price (W) (%) Rating month 2009 2010 2009 2010 (%) (%) 1W 1M 3MSeah Besteel 001430.KS 697 22,850 19,803 (13.3) Not rated Dec (20.8) 7.0 1.0 0.9 (1.4) (8.6) 0.7 2.0 25.5Seah Steel 003030.KS 208 40,800 97,525 139.0 Not rated Dec 18.5 3.1 0.4 0.4 2.0 (5.5) (0.5) (2.4) 12.7Seohee Cons. 035890.KQ 88 1,255 945 (24.7) Not rated Dec 9.9 n.a. 0.4 0.4 5.0 (2.4) (0.8) (3.1) 6.4Seoul Broadcasting 034120.KS 459 29,600 23,462 (20.7) Not rated Dec 22.7 15.8 1.1 1.1 1.5 (5.3) 1.0 (7.2) (23.4)Seoul Semiconductor 046890.KQ 2,035 41,050 63,000 53.5 OUTPERFORM Dec 75.0 22.4 4.8 4.3 5.1 (1.3) 6.3 0.1 (4.3)Sewon Cellontech 091090.KS 188 6,090 1,913 (68.6) Not rated Dec 102.4 n.a. 1.6 1.5 5.3 (1.7) 1.5 10.7 44.7SFA Eng. 056190.KQ 620 40,000 25,210 (37.0) Not rated Dec 39.2 21.4 3.1 2.7 7.0 0.3 8.0 32.7 25.6Shinsegae Food 031440.KS 242 83,100 106,010 27.6 Not rated Dec 10.4 9.3 2.2 1.8 13.1 5.6 2.3 2.3 15.4Silla 004970.KS 173 12,750 17,164 34.6 Not rated Dec 6.2 n.a. 0.8 0.7 5.4 (1.8) (0.8) 3.7 3.2Sindoricoh 029530.KS 429 50,100 86,741 73.1 Not rated Dec 8.7 7.8 0.7 0.7 6.8 0.2 (1.6) (0.2) 1.8SK Broadband 033630.KQ 1,329 5,280 5,200 (1.5) UNDERPERFORM Dec (7.2) (38.1) 1.0 1.2 (7.8) (14.7) (1.3) (3.1) (12.7)SK Chemicals 006120.KS 1,168 65,900 76,730 16.4 Not rated Dec 10.8 5.6 1.5 1.4 4.9 (2.0) 2.3 (1.9) 8.7SK Comm. 066270.KQ 612 16,600 24,000 44.6 OUTPERFORM Dec 304.3 44.3 3.3 3.2 3.4 (3.4) 0.0 (7.3) (20.6)SKC 011790.KS 1,038 33,700 30,600 (9.2) Not rated Dec 93.1 13.0 1.4 1.3 4.8 (2.4) 2.0 22.1 27.2Sodiff Advanced Mat. 036490.KQ 1,022 114,000 73,213 (35.8) Not rated Dec 23.8 16.4 5.4 4.4 11.4 4.6 (0.5) (1.9) 8.1Ssangyong E&C 012650.KQ 134 5,310 3,724 (29.9) Not rated Dec 10.5 n.a. 0.4 0.4 5.3 (2.3) (2.0) (6.3) (10.0)Ssangy ong Motor 003620.KS 275 8,850 12,065 36.3 Not rated Dec (1.0) (5.6) 1.2 1.2 (47.3) (54.8) (2.2) (41.6) (26.9)SSCP 071660.KQ 187 7,830 10,228 30.6 Not rated Dec (36.7) 11.4 0.8 0.7 5.5 (1.8) 5.1 (0.6) 8.0STX Engine 077970.KS 706 28,950 18,928 (34.6) Not rated Dec 13.7 8.1 1.5 1.1 14.3 7.2 2.7 6.0 58.6STX Shipbuilding 067250.KS 817 13,250 (383) (102.9) Not rated Dec (6.0) 8.1 0.9 0.8 6.5 (0.8) (0.4) (0.4) 25.6Sung Kwang 014620.KQ 559 23,000 18,440 (19.8) Not rated Dec 14.5 14.6 2.4 2.0 14.7 8.1 2.2 9.3 27.1Sungchin Cement 004980.KS 58 3,540 15,683 343.0 Not rated Dec 4.8 3.6 0.2 0.2 1.5 (6.4) (3.5) (11.2) (8.5)Sungwoo Hitech 015750.KQ 409 12,050 16,858 39.9 Not rated Dec 5.0 6.2 1.4 1.2 9.6 2.0 4.8 (2.0) (4.0)TK 023160.KQ 523 26,850 15,891 (40.8) Not rated Dec 13.1 26.3 2.0 1.5 8.4 1.9 0.6 20.7 30.3Taewoong 044490.KQ 720 51,000 42,000 (17.6) UNDERPERFORM Dec 26.4 30.1 2.2 2.1 14.0 7.7 2.2 (7.3) 1.6Taeyoung E&C 009410.KS 309 4,760 8,000 68.1 OUTPERFORM Dec 8.4 6.8 0.5 0.5 5.8 (1.5) (3.5) (3.1) 4.2Taihan Electric Wire 001440.KS 762 6,830 2,621 (61.6) Not rated Dec (1.4) (2.6) 0.5 0.7 1.1 (6.2) (2.1) (21.2) (9.6)Techno Semichem 036830.KQ 325 26,000 38,932 49.7 Not rated Dec 14.8 10.2 2.1 1.8 14.8 7.8 3.4 11.8 20.4TSM Tech. 066350.KQ 86 10,450 (8,160) (178.1) Not rated Dec (15.9) n.a. 1.2 0.9 (0.4) (7.9) (7.5) (1.4) 3.5UNID 014830.KS 286 51,100 68,206 33.5 Not rated Dec 9.6 5.7 1.2 1.1 7.2 0.0 2.5 7.9 30.0



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Cap Price HOLT warranted return Suisse end CFROI SpreadCompany RIC (US$ mn) (W) price (W) (%) Rating month 2009 2010 2009 2010 (%) (%) 1W 1M 3MValue Added Technology 043150.KQ 125 9,910 13,380 35.0 Not rated Dec 12.3 10.6 1.4 1.2 15.4 8.3 0.1 (2.8) 2.0Webzen 069080.KQ 262 9,300 11,324 21.8 Not rated Dec 59.0 10.6 0.9 0.9 (1.5) (8.8) 10.1 (1.1) (21.8)Woongjin Chemical 008000.KS 530 1,315 1,085 (17.5) Not rated Dec 61.8 22.5 2.3 2.3 2.8 (4.2) 1.9 2.7 27.1Woongjin Hldgs. 016880.KS 545 10,650 18,138 70.3 Not rated Dec 1,161.8 24.8 0.7 0.7 9.2 1.9 (1.4) (10.9) (0.9)Woongjin Thinkbig 095720.KS 526 24,450 36,100 47.6 Not rated Dec 10.7 9.2 2.6 2.3 19.4 12.3 2.1 0.8 7.2Wooree ETI 082850.KQ 239 6,780 11,896 75.5 Not rated Dec 8.3 7.7 1.4 1.3 13.7 6.7 1.2 (5.8) (15.3)Yesco 015360.KS 121 23,700 68,042 187.1 Not rated Dec 6.5 7.7 0.2 0.2 9.3 1.8 (0.4) 0.0 (1.7)Yonghyun 089230.KQ 70 10,250 2,371 (76.9) Not rated Dec 22.3 76.2 0.8 0.6 2.5 (4.5) (0.5) (10.1) (1.0)Youl Chon Chemical 008730.KS 199 9,430 12,281 30.2 Not rated Dec 13.0 9.3 1.0 0.9 4.7 (2.1) 1.1 2.6 9.7Youngone 009970.KS 320 29,300 34,475 17.7 Not rated Dec 4.0 7.8 1.3 1.1 16.3 9.5 0.0 (1.3) (8.0)YTN 040300.KQ 134 3,755 1,723 (54.1) Not rated Dec 6.4 24.4 1.0 0.9 1.1 (6.1) (2.8) (5.8) (9.7)



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Korea – Screening Relative price performance - top & bottom 10 companies Relative price performance - top & bottom 10 companies Relative price performance - top & bottom 10 companies Price 1W return Price 1M return Price 3M returnCompany RIC (W) (%) Company RIC (W) (%) Company RIC (W) (%)Winners Winners Winners Korea Kumho Petrochem. 011780.KS 66,800 11.1 Samkwang Glass 005090.KS 65,100 36.8 Korea Kumho Petrochem. 011780.KS 66,800 73.5 Infraware 041020.KQ 9,770 10.4 SFA Eng. 056190.KQ 40,000 32.7 Samkwang Glass 005090.KS 65,100 64.8 Webzen 069080.KQ 9,300 10.1 CJ 001040.KS 92,900 26.4 Hanwha Chemical 009830.KS 26,450 62.8 DMS 068790.KQ 10,500 8.6 CJ CGV 079160.KS 27,050 24.7 STX Engine 077970.KS 28,950 58.6 Jusong Engineering 036930.KQ 19,800 8.2 POSCO Refrac. 003670.KQ 114,500 23.8 CJ 001040.KS 92,900 57.7 SFA Eng. 056190.KQ 40,000 8.0 SKC 011790.KS 33,700 22.1 POSCO Refrac. 003670.KQ 114,500 54.7 Intelligent Digital 054800.KQ 15,600 7.6 Hanwha Chemical 009830.KS 26,450 21.9 LS Industrial Systems 010120.KS 100,000 51.1 Hyundai M&F 001450.KS 22,500 7.4 Korea Kumho Petrochem. 011780.KS 66,800 21.5 Hyosung 004800.KS 110,000 50.3 Nepes 033640.KQ 16,950 7.3 Hyosung 004800.KS 110,000 21.4 Korea Zinc 010130.KS 285,500 49.5 Hanjin Heavy Inds. 097230.KS 31,000 7.3 Infopia 036220.KQ 15,650 20.8 KC Cottrell 009440.KS 4,540 49.1 Losers Losers Losers GS Home Shopping 028150.KQ 86,100 (11.4) Ssangyong Motor 003620.KS 8,850 (41.6) Ssangyong Motor 003620.KS 8,850 (26.9)Daegu Bank 005270.KS 13,200 (8.7) Daewoo Motor Sales 004550.KS 3,055 (24.8) Seoul Broadcasting 034120.KS 29,600 (23.4)TSM Tech. 066350.KQ 10,450 (7.5) Pyeong San 089480.KQ 8,040 (23.8) DMS 068790.KQ 10,500 (22.5)Daewoo Motor Sales 004550.KS 3,055 (7.4) Taihan Electric Wire 001440.KS 6,830 (21.2) Pyeong San 089480.KQ 8,040 (21.9)Handsome 020000.KS 19,100 (6.6) Kumho Industrial 002990.KS 3,305 (16.3) Webzen 069080.KQ 9,300 (21.8)Kyeryong Cons. 013580.KS 12,550 (6.3) Korea Line 005880.KS 47,550 (15.1) SK Comm. 066270.KQ 16,600 (20.6)Orion 001800.KS 403,000 (6.0) Hyunjin Materials 053660.KQ 16,100 (14.8) Hanssem 009240.KS 10,700 (19.5)BHI 083650.KQ 24,550 (5.6) Nepes 033640.KQ 16,950 (13.5) Hite Brewery 103150.KS 128,000 (19.2)Busan Bank 005280.KS 12,300 (5.4) Kyeryong Cons. 013580.KS 12,550 (13.1) Hansol LCD 004710.KS 43,750 (19.1)Daou Technology 023590.KS 7,720 (5.3) Modetour Network 080160.KQ 31,300 (13.1) Daum Comm. 035720.KQ 68,800 (18.4)

Price-to-earnings - most & least expensive 10 companies Price-to-book - most & least expensive 10 companies CFROI® Spread - top & bottom 10 companies Price 10 P/E Price 10 P/B Price CFROI® SpreadCompany RIC (W) (x) Company RIC (W) (x) Company RIC (W) (%)Winners Winners Winners Halla E&C 014790.KS 13,250 2.3 Daewoo Motor Sales 004550.KS 3,055 0.1 Kolon Industries 002020.KS 35,750.00 55.6 Dongbu 005960.KS 6,430 3.0 Daesung 005620.KS 128,500 0.1 Patron 091700.KQ 18,450.00 29.8 Kolon E&C 003070.KS 3,850 3.1 Sungchin Cement 004980.KS 3,540 0.2 KH Vatec 060720.KQ 15,850.00 24.5 Seah Steel 003030.KS 40,800 3.1 Kyeryong Cons. 013580.KS 12,550 0.2 On Media 045710.KS 3,470.00 23.9 Moorim Paper 009200.KS 8,320 3.1 Keang Nam Ent. 000800.KS 7,430 0.2 Megastudy 072870.KQ 174,600.00 20.5 Insun Env. 060150.KQ 3,205 3.4 Halla E&C 014790.KS 13,250 0.2 Korean Reinsurance 003690.KS 11,550.00 19.9 Kyeryong Cons. 013580.KS 12,550 3.6 Yesco 015360.KS 23,700 0.2 GS Home Shopping 028150.KQ 86,100.00 19.1 Sungchin Cement 004980.KS 3,540 3.6 Dongbu 005960.KS 6,430 0.2 Humax 028080.KQ 7,850.00 14.4 Hankuk Paper 002300.KS 30,350 3.8 Kolon E&C 003070.KS 3,850 0.2 Green Cross 006280.KS 155,000.00 12.6 KH Vatec 060720.KQ 15,850 4.1 Hanshin Construction 004960.KS 8,190 0.2 CJ Internet 037150.KQ 12,350.00 12.3 Losers Losers Losers Yonghyun 089230.KQ 10,250 76.2 Celltrion 068270.KQ 21,700 7.0 Korea Line 005880.KS 47,550 (74.8)SK Comm. 066270.KQ 16,600 44.3 Glovis 086280.KS 159,000 6.5 Ssangyong Motor 003620.KS 8,850 (54.8)CJ Internet 037150.KQ 12,350 41.5 Capro 006380.KS 16,800 6.1 Pyeong San 089480.KQ 8,040 (33.2)LG Life Sciences 068870.KS 54,500 35.1 Hana Tour 039130.KQ 51,000 5.3 Korea Kumho Petrochem. 011780.KS 66,800 (21.5)Taewoong 044490.KQ 51,000 30.1 Modetour Network 080160.KQ 31,300 4.8 Kumho Tires 073240.KS 4,965 (20.2)Daewoo Motor Sales 004550.KS 3,055 29.7 Orion 001800.KS 403,000 4.8 E1 017940.KS 52,000 (17.0)Celltrion 068270.KQ 21,700 27.2 Ace Digitech 036550.KQ 23,300 4.8 Hyundai 011760.KS 26,950 (16.6)Glovis 086280.KS 159,000 26.4 Sodiff Advanced Mat. 036490.KQ 114,000 4.4 Forhuman 049690.KQ 8,360 (16.5)TK 023160.KQ 26,850 26.3 Seoul Semiconductor 046890.KQ 41,050 4.3 SK Broadband 033630.KQ 5,280 (14.7)Hite Holdings 000140.KS 20,300 25.9 LS Industrial Systems 010120.KS 100,000 4.2 Namehae Chemical 025860.KS 17,600 (14.5)


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David & Goliath 38

Malaysia – Company updates Ta Ann (TAAN.KL, RM5.51, N [V], TP RM5.30) Plywood prices +25% YTD YoY but Tasmania is still loss-making

■ Plywood prices have risen 25% YTD YoY. Consequently, TaAnn’s share price has risen 25% since February 2010, along with the rising plywood prices.

■ Japanese plywood imports rose 14.7% YoY for 1H10 comparedto a drop of 22.3% in 1H09. Malaysia is the largest supplier oftropical plywood to Japan, accounting for half of Japan’s totalimports. Japanese housing starts have improved in 2010, andJune and July starts were up 0.6% and 4.3% YoY.

■ Ta Ann’s high-cost Tasmania division continues to be loss-making. The strengthening of the Ringgit vs the US dollar isnegative for Ta Ann, as it is an exporter and timber products aretraded in US dollars.

■ We cut our FY10 and FY11 earnings estimates by 25% and 22%,respectively, to reflect a weaker US$/RM of RM3.20 and higherlosses from Tasmania. We reduce our target price from RM5.90to RM5.30, implying c.5% potential downside from the current level. We downgrade Ta Ann from Outperform to NEUTRAL.

Bbg/RIC 5.545.30 (5.90)

219.25 (4)0.10.2

Free float (%) 32.6 Performance 1M 3M 12MAbsolute (%) 4.5 10.4 18.4 Relativ e (%) (1.1) (2.3) (4.1)

Year 12/08A 12/09A 12/10E 12/11E 12/12E741.2 662.2 784.0 815.5 927.4 124.2 136.1 155.4 158.4 190.9 43.0 71.7 69.0 77.1 99.8 0.20 0.33 0.31 0.35 0.46 n.a. n.a. (25) (22) (8)n.a. n.a. 0.36 0.46 0.70

(55.7) 66.8 (3.8) 11.8 29.428.3 16.9 17.6 15.8 12.2

2.0 1.4 1.4 2.0 2.09.1 8.2 7.3 6.8 5.31.7 1.6 1.5 1.4 1.36.4 10.0 8.9 9.3 11.2

44.1 47.8 47.8 39.6 30.7

Price (02 Sep 10, RM)TP (Prev. TP W)Est. pot. % chg. to TP52-w k range (W)

TAH MK / TAAN.KLN (O) [V]

P/B (x )


- Consensus EPS (RM)EPS grow th (%)




Mountex - 24.3%

Note1:Ta Ann Ho ldings Berhad is an investment ho lding company. The company, through its subsidiaries, manufactures and sells plywood, sawn timber, logs, and timber products. The company also provides refo restation and plantation services..Note2:Divdend yield is net.


EBITDA (RM mn)Net profit (RM mn)


EPS (RM)

6.10 - 4.18

Rev enues (RM mn)

Major shareholders

1,214.7/ 388.4Mkt cap (RM/US$ mn)Daily trad v al - 6m av g (US$ mn)

Price performance vs. MSCI Malaysia

85

100

115

130

145

09/09 11/09 01/10 03/10 05/10 07/10 09/10

Ta Ann MSCI Malaysia

Foong Wai Loke / Research Analyst / 603 2723 2082 / [email protected] Extracted from The Asian Daily 06 Sep 2010

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39

Valuations of Credit Suisse Malaysia small-cap watch list* Market CS target/ Potential Credit Year HOLT CFROI

Cap Price HOLT warranted return Suisse end CFROI SpreadCompany RIC (US$ mn) (RM) price (RM) (%) Rating month 2009 2010 2009 2010 (%) (%) 1W 1M 3MAeon AEOM.KL 620 5.49 5.43 (1.1) Not Rated Dec 14.4 13.2 2.0 1.8 6.9 0.4 4.4 8.3 12.5Affin AFIN.KL 1,477 3.07 3.92 27.6 Not Rated Dec 12.3 10.0 1.0 0.9 6.4 (1.3) (0.6) 1.0 3.0AirAsia AIRA.KL 1,617 1.82 2.05 12.6 OUTPERFORM Dec 9.1 8.1 1.9 1.6 8.9 2.0 (3.7) 13.8 36.8Alam Maritim ALMT.KL 276 1.11 0.51 (54.1) Not Rated Dec 9.1 7.7 1.8 1.9 7.6 (0.2) 3.7 (9.0) 1.8Alliance Financial ALFG.KL 1,540 3.09 3.70 19.7 OUTPERFORM Mar 16.9 12.9 1.6 1.5 18.4 10.8 (1.9) 2.3 10.4Amway (Malaysia) AMWA.KL 423 8.00 5.03 (37.2) Not Rated Dec 18.1 16.2 5.5 5.0 33.0 27.3 0.0 (1.5) 6.0Ann Joo ANNJ.KL 444 2.64 2.02 (23.4) Not Rated Dec 41.9 8.0 1.5 1.3 2.2 (5.0) 3.1 0.4 14.8APM Automotive APMA.KL 292 4.50 6.00 33.3 Not Rated Dec 12.2 8.9 1.4 1.3 10.6 4.0 (1.1) (5.9) 18.7Asia File AFCB.KL 164 4.42 6.56 48.3 Not Rated Mar 9.1 7.8 n.a. 1.6 14.7 8.2 2.8 4.0 (5.4)Asiatic Dev. GENP.KL 1,903 7.79 6.40 (17.8) UNDERPERFORM Dec 25.0 16.2 2.3 2.0 8.4 3.6 6.4 6.3 19.8Astro All Asia Networks AAAN.KL 2,702 4.29 4.72 10.0 Not Rated Jan 58.4 n.a. 9.3 8.6 11.1 6.1 0.0 0.0 0.0Bandar Raya BRDS.KL 332 2.15 1.82 (15.2) Not Rated Dec 8.8 11.9 0.6 0.6 5.8 (1.8) (4.0) (6.9) 38.7Berjay a BGRO.KL 1,392 1.03 0.83 (19.3) Not Rated Apr 48.3 13.9 0.8 0.9 5.2 (0.6) 3.0 (5.5) (22.6)Berjay a Land BLAD.KL 1,783 4.41 2.74 (37.9) Not Rated Apr n.a. 133.6 1.0 1.0 6.5 0.9 2.1 3.3 8.1Bintulu Port BPOT.KL 882 6.85 4.81 (29.7) Not Rated Dec 21.3 18.7 3.2 3.1 7.3 1.1 (2.1) 3.8 10.0Boustead BOUS.KL 1,368 4.52 5.33 17.9 Not Rated Dec 9.6 10.0 1.2 1.2 7.0 0.5 3.0 10.2 27.7Bursa Malaysia BMYS.KL 1,247 7.29 8.25 13.2 OUTPERFORM Dec 39.8 31.8 4.8 4.7 13.4 8.6 1.0 3.7 3.7Cahya Mata CMSM.KL 258 2.43 4.52 86.0 Not Rated Dec 19.6 15.6 1.0 0.6 6.6 (1.2) (0.8) (5.4) 4.7Carlsberg (Malaysia) CBMS.KL 511 5.15 5.00 (2.9) OUTPERFORM Dec 21.7 20.1 3.1 2.8 13.9 8.2 (0.8) (0.2) 3.6CB Industrial Product CBIP.KL 152 3.44 4.47 30.1 Not Rated Dec 11.5 8.2 1.9 1.7 16.6 9.1 0.3 4.2 37.6CCM Duoph CCMD.KL 109 2.42 1.84 (23.9) Not Rated Dec 11.1 12.0 2.4 2.3 17.8 11.0 0.0 (0.8) 6.1Chemical Malaysia CLMS.KL 261 2.00 0.43 (78.6) Not Rated Dec (142.9) 45.5 1.1 1.1 3.3 (3.8) (1.0) (4.3) (8.3)Dialog DIAL.KL 714 1.12 0.70 (37.4) Not Rated Jun 24.1 21.5 5.1 5.1 16.6 10.9 0.9 2.8 6.7Eon Capital EONP.KL 1,562 7.00 8.32 18.9 Not Rated Dec 14.2 12.2 1.4 1.3 6.7 (0.9) 0.0 0.3 0.0Fraser & Neave FRAS.KL 1,641 14.28 8.95 (37.4) Not Rated Sep 28.1 20.6 4.2 3.9 12.1 6.7 2.0 0.1 25.7Gamuda GAMU.KL 2,325 3.56 4.50 26.4 OUTPERFORM Jul 31.0 20.1 2.2 2.1 2.1 (3.1) (0.6) 6.9 19.9Guinness Anchor GUMS.KL 798 8.21 5.36 (34.7) UNDERPERFORM Jun 17.8 17.0 6.3 6.4 18.5 13.2 1.4 0.0 14.3Hap Seng Consolidated HAPS.KL 551 2.75 1.36 (50.4) Not Rated Dec 15.4 n.a. 0.7 0.7 3.1 (4.0) (1.1) (1.8) 3.4Hartalega HTHB.KL 562 4.80 11.84 146.6 Not Rated Mar 9.5 7.1 3.5 2.9 28.4 22.8 (4.8) (9.8) (5.7)Hock Seng Lee HSLB.KL 302 1.61 1.50 (6.7) Not Rated Dec 15.6 12.1 3.0 3.0 13.4 6.9 1.9 1.3 12.6

CalendarizedCalendarized Share price performanceRM term (%)P/B (x)P/E (x)

* Include the small-cap stocks in HOLT® database with market cap between US$50 mn and US$1.5 bn. For stocks that are Not Rated, I/B/E/S consensus forecast are used. CFROI® is a registered trademark in the United States and other countries (excluding the United Kingdom) of Credit Suisse or its subsidiaries or affiliates. * Companies in bold and italic indicate constituents of Credit Suisse Malaysia Small Cap Index

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Cap Price HOLT warranted return Suisse end CFROI SpreadCompany RIC (US$ mn) (RM) price (RM) (%) Rating month 2009 2010 2009 2010 (%) (%) 1W 1M 3MHong Leong Financial HLCB.KL 3,012 8.89 10.00 12.5 OUTPERFORM Jun 12.6 11.4 1.9 1.7 14.4 7.1 1.7 1.6 10.7Hong Leong Industries HLIB.KL 451 4.98 5.26 5.5 Not Rated Jun 17.4 11.1 n.a. 1.0 2.0 (4.7) 1.6 (2.4) 11.4IGB IGBS.KL 887 1.85 1.88 1.4 Not Rated Dec 17.0 16.2 0.9 0.9 6.0 0.2 2.2 0.0 6.3IJM IJMS.KL 2,213 5.09 5.80 13.9 OUTPERFORM Mar 21.4 16.8 1.3 1.3 6.9 1.0 0.8 1.4 7.2IJM Plantations IJMP.KL 647 2.51 2.29 (8.7) Not Rated Mar 19.6 17.7 1.8 1.7 6.4 1.1 0.4 (3.5) 5.0Jaya Tiasa JTIA.KL 322 3.54 2.84 (19.7) Not Rated Apr 40.5 18.2 0.9 0.9 2.0 (5.3) 1.1 (3.8) 14.9JT Int'l. JTIN.KL 471 5.60 4.60 (17.8) Not Rated Dec 13.7 12.1 4.6 4.1 20.2 14.4 0.7 0.0 6.7Keck Seng (Malaysia) KSMS.KL 434 5.59 6.29 12.5 Not Rated Dec 13.3 12.1 1.1 0.8 5.7 (0.4) (0.2) (7.0) 13.6Kencana Petroleum KENP.KL 833 1.56 1.90 21.8 Not Rated Jul 23.3 19.9 6.4 4.4 23.1 17.2 (0.6) 5.4 12.2KFC (Malaysia) KFCK.KL 786 3.08 8.41 173.1 Not Rated Dec 4.7 4.2 0.8 0.7 9.1 2.6 9.2 17.1 47.4Kian Joo Can KJCS.KL 200 1.40 2.17 55.0 Not Rated Dec 12.7 7.4 0.8 0.8 5.0 (1.8) (3.4) 6.9 19.7Kinsteel KSTE.KL 259 0.84 0.23 (72.5) Not Rated Dec 42.0 9.5 1.0 0.9 1.8 (5.8) (1.2) (8.7) 3.7KLCC Property KCCP.KL 977 3.25 7.48 130.2 Not Rated Mar 4.9 10.0 0.6 0.6 6.1 0.2 (5.2) 0.3 8.7KNM KNMP.KL 522 0.40 0.59 46.3 Not Rated Dec 6.1 8.7 0.8 0.8 11.3 5.3 (2.4) (21.6) (18.4)KPJ Healthcare KPJH.KL 618 3.50 2.03 (42.0) Not Rated Dec 17.0 15.5 2.9 2.8 9.9 2.9 2.9 (2.5) 14.4Krisassets KRIC.KL 349 3.22 4.20 30.5 Not Rated Dec 7.9 10.6 1.0 1.0 6.8 0.1 1.3 (0.9) 6.3Kulim KULM.KL 872 8.50 13.59 59.9 Not Rated Dec 18.0 13.0 0.8 0.8 5.9 (1.0) (0.9) 4.2 15.2Kwantas KWAN.KL 164 1.63 1.59 (2.2) Not Rated Jun (7.2) (20.1) 0.6 0.6 (6.6) (14.2) (5.8) (6.9) (4.1)Lafarge Malayan Cement LMCE.KL 2,078 7.60 5.83 (23.3) Not Rated Dec 15.7 17.2 2.0 2.0 9.5 4.4 5.0 6.1 16.9Lingkaran LTKH.KL 560 3.47 2.81 (19.1) Not Rated Mar 19.2 18.3 4.1 4.1 8.0 0.9 2.1 6.4 13.8Lingui LGDS.KL 225 1.06 1.99 87.5 Not Rated Jun (9.7) (24.1) 0.5 0.5 (0.0) (7.9) 0.0 (10.9) 0.0Lion Industries LLBM.KL 386 1.67 3.94 135.7 Not Rated Jun (10.7) 167.0 0.4 0.4 1.9 (5.8) 3.7 1.8 16.8Malaysia Airports MAHB.KL 1,912 5.40 6.80 25.9 OUTPERFORM Dec 15.7 15.3 1.8 1.7 7.4 1.8 (0.9) (1.6) 9.1Malaysian Airline MASM.KL 2,409 2.24 1.40 (37.5) UNDERPERFORM Dec (16.5) 80.0 5.1 2.1 (2.0) (8.7) 2.3 5.2 9.3Malaysian Bulk Carriers MBCB.KL 933 2.90 2.05 (29.3) UNDERPERFORM Dec 11.9 17.4 1.6 1.6 9.8 4.5 2.5 (1.0) (3.3)Malaysian Pacific MPIM.KL 392 5.81 6.67 14.8 Not Rated Jun (28.3) 42.9 1.7 1.6 (3.4) (9.7) 0.2 (1.0) (7.5)Malaysian Res. MYRS.KL 810 1.83 0.21 (88.6) Not Rated Dec 52.3 44.6 2.7 3.7 3.7 (3.9) 4.0 4.6 22.0MBM Resources MBMR.KL 248 3.18 4.20 31.9 Not Rated Dec 11.6 5.9 0.9 0.8 4.0 (2.5) 0.0 6.0 11.2Measat Global MTCB.KL 525 4.18 3.86 (7.6) Not Rated Dec 9.2 n.a. 0.8 0.8 7.1 (0.8) 1.0 1.7 39.3Media Prima MPRM.KL 675 2.10 2.15 2.2 Not Rated Dec 9.3 14.3 2.1 2.1 1.0 (5.7) 1.9 (2.8) (4.1)

Share price performanceRM term (%)



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Cap Price HOLT warranted return Suisse end CFROI SpreadCompany RIC (US$ mn) (RM) price (RM) (%) Rating month 2009 2010 2009 2010 (%) (%) 1W 1M 3MMMC MMCB.KL 2,695 2.75 2.00 (27.3) NEUTRAL Dec 36.2 22.5 1.3 1.3 9.6 3.0 (0.7) 4.2 13.6MNRB MNRB.KL 185 2.70 5.47 102.7 Not Rated Mar 13.5 9.5 n.a. 0.3 4.8 (3.7) (0.4) (4.9) 1.5MTD Capital MTDC.KL 435 4.92 0.52 (89.4) Not Rated Mar 31.9 12.5 n.a. 2.6 11.1 2.9 0.0 (3.5) 19.4Muhibbah Eng. MUHI.KL 115 0.89 0.70 (21.3) UNDERPERFORM Dec 24.7 6.4 0.8 0.7 0.9 (7.2) 1.1 (6.3) 0.0Multi-Purpose MLPM.KL 728 2.10 1.71 (18.7) Not Rated Dec 6.7 15.1 1.0 1.0 23.0 15.0 (0.5) (4.5) 4.5Naim Cendera NCHB.KL 289 3.59 3.24 (9.9) Not Rated Dec 10.0 9.9 1.3 1.3 11.0 4.0 2.9 8.1 26.9OSK OSKH.KL 412 1.33 1.61 20.8 Not Rated Dec 9.6 9.6 0.8 0.8 9.9 1.6 1.5 3.1 6.4Padiberas Nasional PNAS.KL 319 2.11 1.78 (15.8) Not Rated Dec 5.9 7.4 1.0 1.0 9.8 2.2 2.9 5.0 7.1Panasonic Mfg. Malay sia PMMY.KL 401 20.50 17.49 (14.7) Not Rated Mar n.a. 15.8 n.a. 2.0 8.6 2.5 3.3 6.1 21.3Parkson PRKN.KL 2,041 5.80 4.77 (17.7) Not Rated Jun 14.8 14.2 3.4 3.4 13.4 7.6 4.9 3.9 9.2Petra Perdana PTRD.KL 123 1.17 0.10 (91.4) Not Rated Dec 11.8 12.3 0.6 0.6 9.3 2.0 (2.5) (13.3) (1.7)Petronas Dagangan PETR.KL 3,581 11.20 12.53 11.8 Not Rated Mar 15.7 14.2 2.5 2.4 12.0 7.7 (3.4) 8.9 24.7Pharmaiaga PHMA.KL 191 5.56 6.29 13.2 Not Rated Dec 9.9 10.3 1.4 1.4 11.3 4.4 1.1 2.2 3.3POS Malaysia PSHL.KL 553 3.20 3.70 15.6 OUTPERFORM Dec 22.9 11.9 2.1 1.9 7.0 1.1 (0.6) 5.6 15.5Proton PROT.KL 833 4.71 15.27 224.1 Not Rated Mar 13.8 8.8 0.5 0.5 4.4 (1.5) 1.1 4.2 4.7Puncak PNHB.KL 368 2.78 6.07 118.2 Not Rated Dec 8.0 7.1 0.8 0.8 8.2 0.3 (3.1) (2.8) 11.2QL Resources QRES.KL 577 4.54 3.31 (27.1) Not Rated Mar 17.5 15.2 3.7 3.4 13.7 7.2 (2.4) 1.1 24.0QSR Brands QSRB.KL 406 4.40 4.49 2.1 Not Rated Dec 13.5 11.8 1.8 1.7 8.4 1.3 (1.1) 7.1 29.4Ranhill RANH.KL 147 0.76 1.09 43.2 Not Rated Jun 2.2 3.5 n.a. 0.7 26.6 18.5 (1.3) (6.2) 7.0Reliance Pacific RPAC.KL 122 0.44 0.06 (85.5) Not Rated Mar n.a. 586.7 n.a. 1.1 2.2 (5.6) (2.2) (2.2) 2.3Sapuracrest Petroleum SCRS.KL 1,007 2.45 2.34 (4.6) Not Rated Jan 18.4 14.6 2.8 2.8 7.6 0.5 0.8 5.6 19.5Sarawak Oil Palms SOPS.KL 387 2.80 3.32 18.4 Not Rated Dec 12.0 10.9 1.4 1.4 8.5 2.2 4.5 (0.4) 11.6Scomi SCOI.KL 152 0.40 0.45 12.5 UNDERPERFORM Dec 40.0 (5.7) 0.4 0.5 6.2 (2.1) (2.4) (11.1) 0.0Selangor Properties SELS.KL 365 3.30 3.33 0.9 Not Rated Oct 36.9 48.3 0.7 0.7 2.6 (4.0) 1.5 (7.0) 1.2Shangri-La Hotels (Malaysia) SHGM.KL 404 2.85 2.52 (11.7) Not Rated Dec 35.6 15.2 1.7 1.6 2.7 (3.9) 3.6 10.9 30.7Shell Refining SLRS.KL 1,047 10.84 13.90 28.2 Not Rated Dec 11.2 27.8 1.6 1.6 8.3 2.9 0.7 (0.4) 3.8Southern Steel STEE.KL 278 2.06 2.35 14.1 Not Rated Dec 50.2 7.6 1.1 1.1 0.7 (6.9) 1.0 1.0 15.1SP Setia SETI.KL 1,388 4.24 4.15 (2.1) NEUTRAL Oct 24.9 21.0 2.0 2.0 5.5 (0.1) (3.6) 0.5 6.0Star Publication STAR.KL 856 3.60 2.50 (30.6) UNDERPERFORM Dec 21.4 17.1 2.2 2.2 11.3 5.7 0.8 1.4 9.1

Calendarized Calendarized Share price performanceP/E (x) P/B (x) RM term (%)


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Cap Price HOLT warranted return Suisse end CFROI SpreadCompany RIC (US$ mn) (RM) price (RM) (%) Rating month 2009 2010 2009 2010 (%) (%) 1W 1M 3MSunrise SUNR.KL 324 2.03 3.32 63.4 Not Rated Jun 6.4 6.9 1.0 1.1 10.2 3.3 1.5 (2.9) 6.8Sunw ay City SWCB.KL 573 3.79 7.53 98.7 Not Rated Dec 3.3 10.1 0.8 0.8 6.3 (0.9) (3.8) 2.7 0.3Sunway SGWM.KL 328 1.69 2.25 33.1 OUTPERFORM Dec 13.5 8.7 1.9 1.6 5.3 (2.3) 5.6 3.0 18.2Ta Ann TAAN.KL 381 5.51 5.30 (3.8) NEUTRAL Dec 16.9 17.5 1.6 1.5 7.9 0.8 (0.5) 0.5 9.5Taliworks TWRK.KL 161 1.32 1.17 (11.3) Not Rated Dec 12.9 12.2 1.3 1.3 12.3 5.7 0.0 (12.0) (21.4)Tan Chong TNCS.KL 1,146 5.30 3.80 (28.3) NEUTRAL Dec 23.0 14.6 2.3 2.1 9.3 2.8 6.9 3.9 23.3Titan Chemicals TTNP.KL 1,275 2.26 4.28 89.4 Not Rated Dec 7.5 7.2 0.9 0.9 9.1 2.4 0.0 0.9 66.2Top Glove TPGC.KL 1,130 5.68 6.22 9.4 Not Rated Aug 25.9 16.9 4.6 3.8 22.0 16.7 (6.6) (7.3) (9.3)Tradewinds TWMM.KL 348 3.65 2.26 (38.1) Not Rated Dec 7.8 6.2 0.7 0.7 4.1 (3.7) (0.3) 0.8 18.1Tradew inds Plantation TWSP.KL 315 1.85 1.31 (29.2) Not Rated Dec 22.6 n.a. 0.8 0.7 1.8 (5.5) 8.2 6.9 20.9TSH Resources TSHR.KL 259 1.94 0.49 (74.5) Not Rated Dec 11.0 10.5 1.1 1.0 7.5 0.0 1.0 1.0 10.9UBG UBGB.KL 354 2.20 2.22 0.9 Not Rated Dec 51.2 n.a. 1.2 0.8 7.1 1.3 (3.1) (3.5) (1.8)Uchi Tech. UCHI.KL 164 1.36 1.00 (26.5) Not Rated Dec 18.6 11.5 3.1 3.0 19.6 13.2 (3.5) 3.0 5.4United Malacca UMRS.KL 458 10.60 8.06 (24.0) Not Rated Apr 20.9 21.2 1.7 1.7 8.0 2.1 1.9 5.2 34.2United Plantations UTPS.KL 1,003 14.98 19.88 32.7 Not Rated Dec 11.1 10.4 1.9 1.8 11.8 6.7 0.1 1.9 7.0Wah Seong WAHE.KL 467 2.04 1.80 (11.8) UNDERPERFORM Dec 11.5 16.7 1.6 1.5 12.9 6.1 1.0 (15.0) (7.3)WCT WCTE.KL 734 2.91 2.41 (17.1) Not Rated Dec 15.5 15.2 1.8 1.9 8.7 1.9 2.8 2.8 7.4WTK WTKH.KL 159 1.13 2.03 79.6 Not Rated Dec (565.0) 12.4 0.5 0.5 0.6 (6.9) 6.6 0.0 0.9YTL Cement YTLC.KL 634 4.00 5.96 49.0 Not Rated Jun 10.5 9.8 n.a. 1.2 8.6 2.0 (0.5) (0.7) 4.2Zelan ZLAN.KL 117 0.64 0.73 14.1 Not Rated Mar (1.5) (11.6) 0.8 0.9 (40.8) (48.4) (3.0) (11.1) 20.8

Calendarized Calendarized Share price performanceP/E (x) P/B (x) RM term (%)

* Include the small-cap stocks in HOLT® database with market cap between US$50 mn and US$1.5 bn. For stocks that are Not Rated, I/B/E/S consensus forecast are used. CFROI® is a registered trademark in the United States and other countries (excluding the United Kingdom) of Credit Suisse or its subsidiaries or affiliates. * Companies in bold and italic indicate constituents of Credit Suisse Malaysia Small Cap Index.

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Malaysia – Screening Relative price performance - top & bottom 10 companies Relative price performance - top & bottom 10 companies Relative price performance - top & bottom 10 companies Price 1W return Price 1M return Price 3M returnCompany RIC (RM) (%) Company RIC (RM) (%) Company RIC (RM) (%)Winners Winners Winners KFC (Malaysia) KFCK.KL 3.08 9.2 KFC (Malaysia) KFCK.KL 3.08 17.1 Titan Chemicals TTNP.KL 2.26 66.2 Tradewinds Plantation TWSP.KL 1.85 8.2 AirAsia AIRA.KL 1.82 13.8 KFC (Malaysia) KFCK.KL 3.08 47.4 Tan Chong TNCS.KL 5.30 6.9 Shangri-La Hotels (Malaysia) SHGM.KL 2.85 10.9 Measat Global MTCB.KL 4.18 39.3 WTK WTKH.KL 1.13 6.6 Boustead BOUS.KL 4.52 10.2 Bandar Raya BRDS.KL 2.15 38.7 Asiatic Dev. GENP.KL 7.79 6.4 Petronas Dagangan PETR.KL 11.20 8.9 CB Industrial Product CBIP.KL 3.44 37.6 Sunway SGWM.KL 1.69 5.6 Aeon AEOM.KL 5.49 8.3 AirAsia AIRA.KL 1.82 36.8 Lafarge Malayan Cement LMCE.KL 7.60 5.0 Naim Cendera NCHB.KL 3.59 8.1 United Malacca UMRS.KL 10.60 34.2 Parkson PRKN.KL 5.80 4.9 QSR Brands QSRB.KL 4.40 7.1 Shangri-La Hotels (Malaysia) SHGM.KL 2.85 30.7 Sarawak Oil Palms SOPS.KL 2.80 4.5 Tradewinds Plantation TWSP.KL 1.85 6.9 QSR Brands QSRB.KL 4.40 29.4 Aeon AEOM.KL 5.49 4.4 Gamuda GAMU.KL 3.56 6.9 Boustead BOUS.KL 4.52 27.7 Losers Losers Losers Top Glove TPGC.KL 5.68 (6.6) KNM KNMP.KL 0.40 (21.6) Berjaya BGRO.KL 1.03 (22.6)Kwantas KWAN.KL 1.63 (5.8) Wah Seong WAHE.KL 2.04 (15.0) Taliworks TWRK.KL 1.32 (21.4)KLCC Property KCCP.KL 3.25 (5.2) Petra Perdana PTRD.KL 1.17 (13.3) KNM KNMP.KL 0.40 (18.4)Hartalega HTHB.KL 4.80 (4.8) Taliworks TWRK.KL 1.32 (12.0) Top Glove TPGC.KL 5.68 (9.3)Bandar Raya BRDS.KL 2.15 (4.0) Scomi SCOI.KL 0.40 (11.1) Chemical Malaysia CLMS.KL 2.00 (8.3)Sunway City SWCB.KL 3.79 (3.8) Lingui LGDS.KL 1.06 (10.9) Malaysian Pacific MPIM.KL 5.81 (7.5)AirAsia AIRA.KL 1.82 (3.7) Hartalega HTHB.KL 4.80 (9.8) Wah Seong WAHE.KL 2.04 (7.3)SP Setia SETI.KL 4.24 (3.6) Alam Maritim ALMT.KL 1.11 (9.0) Hartalega HTHB.KL 4.80 (5.7)Uchi Tech. UCHI.KL 1.36 (3.5) Kinsteel KSTE.KL 0.84 (8.7) Asia File AFCB.KL 4.42 (5.4)Kian Joo Can KJCS.KL 1.40 (3.4) Top Glove TPGC.KL 5.68 (7.3) Kwantas KWAN.KL 1.63 (4.1)

Price-to-earnings - most & least expensive 10 companies Price-to-book - most & least expensive 10 companies CFROI® Spread - top & bottom 10 companies Price 10 P/E Price 10 P/B Price CFROI® SpreadCompany RIC (RM) (x) Company RIC (RM) (x) Company RIC (RM) (%)Winners Winners Winners Ranhill RANH.KL 0.76 3.5 MNRB MNRB.KL 2.70 0.3 Amway (Malaysia) AMWA.KL 8.00 27.3 KFC (Malaysia) KFCK.KL 3.08 4.2 Lion Industries LLBM.KL 1.67 0.4 Hartalega HTHB.KL 4.80 22.8 MBM Resources MBMR.KL 3.18 5.9 Lingui LGDS.KL 1.06 0.5 Ranhill RANH.KL 0.76 18.5 Tradewinds TWMM.KL 3.65 6.2 WTK WTKH.KL 1.13 0.5 Kencana Petroleum KENP.KL 1.56 17.2 Muhibbah Eng. MUHI.KL 0.89 6.4 Scomi SCOI.KL 0.40 0.5 Top Glove TPGC.KL 5.68 16.7 Sunrise SUNR.KL 2.03 6.9 Proton PROT.KL 4.71 0.5 Multi-Purpose MLPM.KL 2.10 15.0 Puncak PNHB.KL 2.78 7.1 Kwantas KWAN.KL 1.63 0.6 JT Int'l. JTIN.KL 5.60 14.4 Hartalega HTHB.KL 4.80 7.1 KLCC Property KCCP.KL 3.25 0.6 Uchi Tech. UCHI.KL 1.36 13.2 Titan Chemicals TTNP.KL 2.26 7.2 Petra Perdana PTRD.KL 1.17 0.6 Guinness Anchor GUMS.KL 8.21 13.2 Padiberas Nasional PNAS.KL 2.11 7.4 Cahya Mata CMSM.KL 2.43 0.6 CCM Duoph CCMD.KL 2.42 11.0 Losers Losers Losers Reliance Pacific RPAC.KL 0.44 586.7 Astro All Asia Networks AAAN.KL 4.29 8.6 Kwantas KWAN.KL 1.63 (14.2)Lion Industries LLBM.KL 1.67 167.0 Guinness Anchor GUMS.KL 8.21 6.4 Malaysian Pacific MPIM.KL 5.81 (9.7)Berjaya Land BLAD.KL 4.41 133.6 Dialog DIAL.KL 1.12 5.1 Malaysian Airline MASM.KL 2.24 (8.7)Malaysian Airline MASM.KL 2.24 80.0 Amway (Malaysia) AMWA.KL 8.00 5.0 Lingui LGDS.KL 1.06 (7.9)Selangor Properties SELS.KL 3.30 48.3 Bursa Malaysia BMYS.KL 7.29 4.7 Muhibbah Eng. MUHI.KL 0.89 (7.2)Chemical Malaysia CLMS.KL 2.00 45.5 Kencana Petroleum KENP.KL 1.56 4.4 Southern Steel STEE.KL 2.06 (6.9)Malaysian Res. MYRS.KL 1.83 44.6 JT Int'l. JTIN.KL 5.60 4.1 WTK WTKH.KL 1.13 (6.9)Malaysian Pacific MPIM.KL 5.81 42.9 Lingkaran LTKH.KL 3.47 4.1 Kinsteel KSTE.KL 0.84 (5.8)Bursa Malaysia BMYS.KL 7.29 31.8 Fraser & Neave FRAS.KL 14.28 3.9 Lion Industries LLBM.KL 1.67 (5.8)Shell Refining SLRS.KL 10.84 27.8 Top Glove TPGC.KL 5.68 3.8 Media Prima MPRM.KL 2.10 (5.7)


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Singapore – Company updates OUE (OVES.SI, S$2.90, O, TP S$3.61) New report: Scaling new peaks

■ We initiate coverage of OUE with an OUTPERFORM rating anda target price of S$3.61, pegged at a 15% discount to S$4.24RNAV. We believe investability of the stock has improvedsignificantly with re-rating catalysts.

■ The recent consolidation and the partial sell-down by its topshareholder, Lippo Group, have raised its daily trading volume10x to S$2.5 mn. We expect a rapid 44% earnings CAGR over2009-13E, as earnings from its redevelopment initiatives, recentacquisition and organic growth kick in.

■ It offers a unique exposure to Singapore’s prime real estate, especially to the strong recovery in the office and hotel sectors,which made up 56% and 21% of its assets, respectively.

■ Our target price discount is in line with the P/B of major officeREIT comparables. It is currently trading at a 34% discount to ourRNAV; we expect lower discount on improved trading liquidityand investor interest, execution of more asset enhancementsand more accretive acquisitions. Growing its hotel managementbusiness and setting up a REIT could be medium-term catalysts.

Bbg/RIC 2.793.61 (NA)

981.60 29 1.3 3.95 - 1.792.3

Free float (%) 21 Performance 1M 3M 12MAbsolute (%) 3.3 (20.3) 32.9

NAV (mn) — Relativ e (%) 2.0 (26.3) 14.8 (34.3)

Year 12/08A 12/09A 12/10E 12/11E 12/12E61.0 40.1 129.4 172.0 242.9 55.8 52.0 107.2 121.6 188.5

EPS (S$) 0.06 0.05 0.11 0.12 0.19 n.a. n.a. 0.0 0.0 0.0n.a. n.a. 0.07 0.17 0.22

EPS grow th 370.2 (7.4) 105.8 13.4 55.1P/E (x ) 48.7 52.6 25.5 22.5 14.5Div idend y ield 0.4 0 2.0 2.2 3.4EV/EBITDA 51.2 77.7 32.8 24.5 16.7ROE (%) 2.6 2.6 4.7 4.9 7.3Net debt (net 18.0 18.5 66.2 59.8 51.2

- Change from prev . EPS (%)- Consensus EPS (S$)

Note1:OUE is Lippo Group's flagship development company in Singapore. It currently owns and manages retail, commercial and residential properties which are situated in prime locations..

2,738.7/ 2,035.6Mkt cap (S$/US$ mn)Daily trad v al - 6m av g (US$ mn)

Major shareholders

Price (06 Sep 10 , S$)TP (Prev. TP W)Est. pot. % chg. to TP52-w k range (W)

OUE SP / OVES.SIO (NA)


Rating (prev. rating)Shares outstanding (mn)

EBITDA (S$ mn)Net profit (S$ mn)

Lippo Group (79.35%)

Prem./(disc) to NAV (%)

Price performance vs. MSCI Singapore

70

100

130

160

190

09/09 11/09 01/10 03/10 05/10 07/10 09/10

OUE MSCI Singapore

Tricia Song / Research Analyst / 65 6212 3141 / [email protected] Extracted from The Asian Daily 08 Sep 2010

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Valuations of Credit Suisse Singapore small-cap watch list* Market CS target/ Potential Credit Year HOLT CFROI

Cap Price HOLT warranted return Suisse end CFROI SpreadCompany RIC (US$ mn) (S$) price (S$) (%) Rating month 2009 2010 2009 2010 (%) (%) 1W 1M 3MAllgreen Properties AGRN.SI 1,349 1.14 1.53 34.4 OUTPERFORM Dec 11.2 11.4 0.8 0.7 6.6 0.3 7.5 (2.6) 9.6Amara AMRA.SI 187 0.44 0.22 (50.1) Not Rated Dec 21.8 n.a. 1.3 1.3 4.1 (3.2) 3.6 (4.4) 0.0Ascendas REIT AEMN.SI 3,122 2.24 2.33 4.1 OUTPERFORM Mar 17.3 17.0 1.4 1.4 5.8 0.1 3.7 3.2 23.1Ascott Residence Trust ASRT.SI 531 1.15 1.00 (13.3) Not Rated Dec (33.8) 17.7 0.9 0.8 3.7 (3.3) 1.8 (2.5) 3.6ASL Marine ASLM.SI 202 0.90 1.00 11.1 Not Rated Jun 3.8 4.9 0.9 0.9 13.5 6.1 2.3 3.4 12.5Banyan Tree BANY.SI 470 0.83 0.44 (46.6) Not Rated Dec 207.5 92.2 1.2 1.2 3.5 (3.3) (1.8) (2.4) 5.1Biosensors BIOS.SI 693 0.87 0.75 (13.3) NEUTRAL Mar 28.9 25.2 3.8 3.4 10.2 3.7 6.8 6.8 15.3Boustead Singapore BTSS.SI 344 0.90 1.64 83.4 Not Rated Mar 9.6 7.8 2.2 1.9 17.2 10.4 (0.6) 3.5 11.9CapitaCommercial Trust CACT.SI 2,960 1.41 1.37 (3.0) NEUTRAL Dec 16.8 20.4 1.0 1.0 4.6 (1.4) 2.9 2.9 23.7CDL Hospitality CDLT.SI 1,452 2.04 1.53 (25.1) Not Rated Dec 25.8 20.4 1.4 1.4 5.0 (1.3) 0.5 2.0 20.0Cerebos CERE.SI 1,021 4.35 4.23 (2.9) Not Rated Sep 16.8 15.7 3.9 3.8 14.7 8.5 0.0 3.8 9.0CH Offshore CHOF.SI 270 0.52 0.78 50.9 Not Rated Jun 4.6 5.8 n.a. 1.3 22.5 15.8 (1.0) (4.6) 2.0China Av iation Oil CNAO.SI 791 1.47 0.62 (57.6) Not Rated Dec 17.3 n.a. 2.4 2.4 11.8 5.4 3.5 (2.6) 10.5China Fishery CNFG.SI 1,380 1.85 2.67 44.2 Not Rated Sep 10.8 10.8 n.a. 2.7 11.9 5.3 0.0 (2.1) (2.1)China Hongxing CHXS.SI 417 0.20 0.24 19.0 Not Rated Dec 22.2 25.0 0.6 0.6 3.8 (2.8) 14.3 33.3 73.9China Merchants (Pacific) CAEP.SI 358 0.67 1.22 81.6 Not Rated Dec 12.2 n.a. 0.8 0.8 5.8 (1.1) (1.5) (6.9) 7.2China Milk CHNM.SI 132 0.24 0.53 119.2 Not Rated Mar 3.2 5.2 0.4 0.4 10.4 3.0 0.0 0.0 0.0China XLX Fertiliser CXLX.SI 406 0.55 0.39 (29.2) Not Rated Dec 22.7 12.1 1.8 1.7 6.1 (0.6) 3.8 0.9 10.1Citispring Infra. Trust CITY.SI 441 0.61 0.04 (93.7) Not Rated Mar (14.3) (20.9) 1.6 1.4 4.1 (3.0) 0.8 (1.6) 2.5COSCO (Singapore) COSC.SI 2,732 1.64 1.20 (26.8) UNDERPERFORM Dec 33.5 21.9 3.4 3.1 6.1 0.2 1.9 2.5 19.7Creative Technology CREA.SI 225 4.03 8.66 114.8 Not Rated Jun (1.5) (2.6) 0.6 0.6 (19.4) (26.4) 0.5 0.5 (0.7)CSE Global CSES.SI 395 1.04 1.39 34.0 Not Rated Dec 11.3 9.6 3.6 3.5 25.8 18.7 7.2 6.7 15.6CWT CWTD.SI 433 0.99 0.58 (40.7) Not Rated Dec 16.7 16.1 4.5 4.1 8.0 0.8 8.2 (2.5) 12.6Del Monte Pacific DMPL.SI 306 0.38 0.50 30.5 Not Rated Dec 27.1 9.0 1.5 1.6 7.4 0.7 4.1 2.7 4.1Delong DELO.SI 252 0.63 0.87 39.4 Not Rated Dec 2.5 6.2 0.9 0.8 13.3 6.3 23.8 50.6 71.2Elec & Eltek EELT.SI 373 2.68 6.35 137.0 Not Rated Dec 7.7 4.4 0.9 0.9 7.1 0.1 (0.4) (9.5) 21.8Epure SOGL.SI 696 0.73 0.75 n.a. Not Rated Dec 16.9 13.7 2.9 2.7 18.8 12.4 3.6 (6.5) (13.2)Ezra EZRA.SI 859 1.74 1.00 (42.4) Not Rated Aug 17.2 11.2 1.9 1.5 6.2 (0.4) 0.0 (10.3) (2.2)First Resources FRLD.SI 1,246 1.14 1.22 7.1 Not Rated Dec 9.4 12.3 2.2 1.7 8.2 1.9 3.6 (3.4) 10.7

Share price performanceS$ term (%)P/B (x)P/E (x)


* Include the small-cap stocks in HOLT® database with market cap between US$50 mn and US$1.5 bn. For stocks that are Not Rated, I/B/E/S consensus forecast are used. CFROI® is a registered trademark in the United States and other countries (excluding the United Kingdom) of Credit Suisse or its subsidiaries or affiliates. * Companies in bold and italic indicate constituents of Credit Suisse Singapore Small Cap Index

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Cap Price HOLT warranted return Suisse end CFROI SpreadCompany RIC (US$ mn) (S$) price (S$) (%) Rating month 2009 2010 2009 2010 (%) (%) 1W 1M 3MFood Empire FEMP.SI 138 0.35 0.26 (25.7) Not Rated Dec 50.0 n.a. 1.1 1.0 6.3 (1.0) 1.4 2.9 1.4Fortune REIT FORT.SI 4,650 3.75 0.46 (87.8) Not Rated Dec 19.4 98.7 3.9 4.0 3.0 (3.7) 1.9 1.6 12.3Goodpack GPAK.SI 670 1.87 1.42 (24.1) Not Rated Jun 25.7 22.7 3.7 3.4 9.5 2.7 (3.1) 6.3 15.4GP Industries GPEI.SI 232 0.54 0.60 10.6 Not Rated Mar n.a. 8.4 n.a. 0.8 1.9 (5.6) 10.2 13.7 11.3Guocoland GUOC.SI 1,505 2.28 0.40 (82.5) Not Rated Jun (101.3) 168.9 1.0 1.1 0.5 (5.9) 6.5 3.2 6.0Hi-P HIPI.SI 607 0.92 0.75 (18.5) NEUTRAL Dec 15.1 14.6 1.4 1.4 10.3 3.6 8.2 14.3 73.6Ho Bee HBEE.SI 856 1.56 3.33 113.4 Not Rated Dec 3.4 5.2 1.0 0.9 25.6 19.0 4.7 (8.2) 9.9Hong Leong Asia HLAA.SI 978 3.52 4.50 27.8 OUTPERFORM Dec 11.1 11.4 1.8 1.6 13.3 6.7 3.8 (6.4) 10.3Hong Leong Finance HLSF.SI 999 3.05 2.80 (8.2) UNDERPERFORM Dec 12.4 11.3 0.9 0.9 8.3 0.5 0.0 (3.2) 6.6Hotel Grand Central HGCS.SI 303 0.79 1.15 45.3 Not Rated Dec 10.5 n.a. 0.6 0.6 3.9 (3.1) 0.0 (1.9) 9.0Hotel Properties HPPS.SI 1,091 2.90 0.73 (74.9) Not Rated Dec 41.4 33.7 1.2 1.1 3.6 (3.1) 3.6 (2.0) 7.0Hyflux HYFL.SI 1,334 3.14 3.80 21.0 OUTPERFORM Dec 22.4 21.7 4.5 4.0 16.7 10.5 4.3 (0.9) 16.7Indofood Agri IFAR.SI 2,531 2.35 2.63 11.9 NEUTRAL Dec 14.9 15.4 2.4 2.1 7.6 1.7 0.0 (7.5) 10.8Jaya JAYA.SI 390 0.68 0.31 (55.1) Not Rated Jun 10.3 13.3 1.4 1.2 7.2 0.0 0.7 6.3 7.9K-REIT KASA.SI 1,248 1.25 0.71 (43.2) Not Rated Dec (21.9) 26.6 0.8 0.8 4.1 (2.3) 3.3 6.8 16.8Keppel Land KLAN.SI 4,315 4.00 4.13 3.2 NEUTRAL Dec 16.5 21.3 1.4 1.7 4.7 (1.0) 3.1 (0.7) 8.4KS Energy KSTL.SI 303 1.00 0.26 (74.2) Not Rated Dec 8.4 (33.3) 0.8 0.8 7.4 0.3 (2.9) (6.5) (13.0)Luye Pharm. LUYE.SI 389 1.06 1.02 (4.0) Not Rated Dec 21.2 n.a. 2.6 2.4 16.1 9.0 2.9 10.4 17.8Macquarie Int'l. Infra. Fund MIIF.SI 526 0.55 0.61 11.0 Not Rated Dec (6.1) 23.7 0.7 0.7 (0.8) (8.9) (1.8) 5.8 19.8Mandarin Oriental MOIL.SI 1,006 1.36 1.34 (1.5) Not Rated Dec 11.8 17.9 0.9 1.1 2.1 (4.1) (2.2) (2.9) (0.7)Mapletree Logistics MAPL.SI 1,292 0.85 1.00 17.9 OUTPERFORM Dec 15.1 13.6 1.0 1.0 5.0 (1.4) 0.6 (2.3) 3.0MCL Land MCRS.SI 674 2.45 3.76 53.6 Not Rated Dec 4.4 4.1 1.2 1.0 25.8 18.9 0.0 28.9 43.3Mercator MRTL.SI 246 0.27 0.47 78.1 Not Rated Mar 4.8 5.1 n.a. 0.6 7.8 0.6 (1.9) (3.6) 3.9Mermaid Maritime MMPC.SI 254 0.44 0.61 39.8 Not Rated Sep 0.3 9.8 0.0 0.6 1.4 (5.5) 1.2 (9.4) (18.7)Metro MTHL.SI 369 0.77 1.10 42.3 Not Rated Mar n.a. 9.5 n.a. 0.5 6.8 (0.3) 2.0 (1.9) 2.7MobileOne MONE.SI 1,471 2.20 2.48 12.8 OUTPERFORM Dec 13.1 12.1 7.7 6.6 10.9 4.8 1.4 4.3 3.8Neptune Oriental NEPS.SI 3,844 2.00 2.35 17.5 NEUTRAL Dec (4.3) 11.0 1.4 1.3 (6.2) (12.2) 2.6 (2.9) 8.1Noble NOBG.SI 7,600 1.70 1.65 (2.9) NEUTRAL Dec 8.5 16.4 1.6 2.3 9.1 3.8 3.0 2.4 (5.0)Oceanus OCGL.SI 480 0.32 0.15 (51.9) Not Rated Dec 8.2 10.7 2.0 1.8 8.4 1.8 1.6 1.6 6.7


S$ term (%)Calendarized Calendarized


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Cap Price HOLT warranted return Suisse end CFROI SpreadCompany RIC (US$ mn) (S$) price (S$) (%) Rating month 2009 2010 2009 2010 (%) (%) 1W 1M 3MOlam OLAM.SI 4,391 2.79 4.25 52.4 OUTPERFORM Jun 17.2 15.9 3.8 2.9 14.0 8.2 1.8 3.7 11.6Orchard Parade ORCH.SI 299 1.14 1.56 36.4 Not Rated Dec 30.0 n.a. 0.5 0.5 4.0 (3.3) 2.7 (1.7) 15.2Pacific Andes PACF.SI 666 0.32 0.67 113.3 Not Rated Sep 5.1 6.7 0.7 0.8 10.2 3.4 1.6 3.3 10.5Pan-United PANU.SI 194 0.47 0.63 34.0 Not Rated Dec 7.5 10.0 0.9 0.9 10.5 3.4 (1.1) (4.1) 0.0Parkway PARM.SI 3,260 3.85 3.78 (1.8) NEUTRAL Dec 36.7 26.7 3.0 2.7 4.6 (1.4) 0.0 (2.0) 2.1Petra Foods PEFO.SI 559 1.23 0.73 (41.0) Not Rated Dec 19.5 14.5 2.2 1.8 8.2 1.0 (10.2) (20.1) 2.5Pine Agritech PINE.SI 446 0.20 0.16 (19.5) Not Rated Dec (10.0) (66.7) 1.9 1.9 (3.4) (10.3) 2.6 0.0 25.0Raffles Education RLSE.SI 547 0.28 0.24 (14.3) UNDERPERFORM Jun 14.0 16.5 1.3 1.3 8.8 2.7 5.7 (3.4) (1.8)Raffles Medical RAFG.SI 840 2.15 2.10 (2.3) OUTPERFORM Dec 29.9 25.6 4.5 4.0 11.7 5.2 5.4 7.5 16.2Rotary Eng. ROTE.SI 403 0.96 1.09 14.6 Not Rated Dec 9.9 9.6 2.2 2.1 21.8 15.2 3.8 (1.5) 5.5SC Global SCGO.SI 474 1.59 1.03 (35.5) Not Rated Dec 11.0 4.5 1.3 1.4 3.1 (4.1) 2.6 (6.5) 2.6SIA Eng. SIAE.SI 3,538 4.38 1.83 (58.2) Not Rated Mar 19.5 18.5 3.8 3.6 12.1 6.5 0.9 4.5 13.8Silverlake Axis SLVX.SI 559 0.35 0.07 (79.4) Not Rated Jun n.a. 53.8 n.a. 7.3 17.7 10.8 (4.1) 0.0 6.1Singapore Airport SATS.SI 2,290 2.79 3.40 21.9 OUTPERFORM Mar 17.5 15.1 2.1 2.0 12.5 6.8 1.5 (2.8) 9.8Singapore Land SLND.SI 2,099 6.84 7.98 16.7 Not Rated Dec (10.6) 17.0 0.8 0.8 4.5 (1.4) 0.0 0.6 3.3Singapore Post SPOS.SI 1,737 1.21 1.15 (4.6) NEUTRAL Mar 14.4 14.8 8.3 7.3 15.9 9.9 3.4 6.1 11.0SP Ausnet SPAU.SI 2,229 1.09 0.57 (47.8) Not Rated Mar n.a. 14.8 n.a. 4.4 5.0 (0.8) 10.1 11.2 11.2Star Cruises GENH.SI 2,431 0.44 0.42 (3.6) Not Rated Dec (88.0) 27.5 1.3 1.3 (2.2) (8.2) 46.7 66.0 166.7Starhill Global REIT STHL.SI 846 0.59 0.46 (21.7) Not Rated Dec (18.9) 15.4 0.7 0.6 3.9 (2.6) 0.9 2.6 8.3StarHub STAR.SI 3,115 2.44 2.05 (16.1) UNDERPERFORM Dec 13.1 16.4 33.4 271.1 10.6 5.0 (3.2) 5.2 10.9Straits Asia STRL.SI 1,814 2.16 2.20 1.9 NEUTRAL Dec 13.4 20.9 3.8 3.8 20.7 14.8 2.4 (0.5) 11.9Suntec REIT SUNT.SI 1,989 1.45 1.40 (3.6) NEUTRAL Dec 21.0 23.0 0.8 0.8 4.6 (1.6) 2.8 4.3 10.7Sw iber SWBR.SI 382 1.01 1.04 2.5 Not Rated Dec 10.1 13.1 2.2 0.8 4.6 (2.7) 1.5 (1.0) 11.0Sy near Food SYFH.SI 271 0.27 0.36 35.8 Not Rated Dec 10.6 11.5 0.6 0.6 8.5 1.7 10.4 (1.9) 17.8Tat Hong TAT.SI 356 0.95 1.20 27.0 OUTPERFORM Mar 11.1 9.6 1.1 0.9 7.7 0.9 1.6 (1.6) 1.1United Engineers UTES.SI 438 2.26 3.43 51.8 Not Rated Dec 10.2 5.1 0.7 0.7 4.3 (2.8) 0.9 (2.6) 1.8United Industries UICS.SI 2,255 2.20 2.41 9.7 Not Rated Dec (21.2) 13.3 1.0 0.9 8.0 2.2 (0.5) 2.3 4.8UOL UTOS.SI 2,399 4.15 5.39 29.8 Not Rated Dec 7.7 9.7 0.8 1.2 4.4 (1.6) 3.2 1.2 11.9Venture VENM.SI 1,796 8.80 11.05 25.6 OUTPERFORM Dec 16.8 12.2 1.3 1.3 11.1 5.3 0.7 (3.7) 2.1WBL WEAS.SI 802 4.30 3.63 (15.5) Not Rated Sep n.a. 21.9 n.a. 1.4 7.8 1.5 (1.4) (4.9) (8.5)

P/E (x) P/B (x) S$ term (%)Calendarized Calendarized Share price performance


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Goliath

48


Cap Price HOLT warranted return Suisse end CFROI SpreadCompany RIC (US$ mn) (S$) price (S$) (%) Rating month 2009 2010 2009 2010 (%) (%) 1W 1M 3MWheelock Properties WPSL.SI 1,692 1.90 2.72 43.3 Not Rated Dec 8.7 9.3 0.9 0.9 6.6 0.7 5.0 1.6 1.1Wing Tai WTHS.SI 998 1.69 2.06 21.7 OUTPERFORM Jun 10.6 7.2 0.8 0.7 4.7 (1.9) 4.3 (5.6) 10.5Yangzijiang Shipbuilding YAZG.SI 4,692 1.68 1.90 13.1 OUTPERFORM Dec 12.1 10.1 4.4 3.3 30.1 24.5 5.0 15.9 34.4Yanlord YNLG.SI 2,690 1.86 1.95 4.9 Not Rated Dec 10.8 13.0 1.5 1.4 7.5 1.9 4.5 1.1 17.0Yongnam YNAM.SI 222 0.24 0.40 66.7 OUTPERFORM Dec 7.3 6.0 1.6 1.2 12.9 5.6 2.1 0.0 4.3

Calendarized Calendarized Share price performanceP/E (x) P/B (x) S$ term (%)


10 September 2010

David &

Goliath

49

Singapore – Screening Relative price performance - top & bottom 10 companies Relative price performance - top & bottom 10 companies Relative price performance - top & bottom 10 companies Price 1W return Price 1M return Price 3M returnCompany RIC (S$) (%) Company RIC (S$) (%) Company RIC (S$) (%)Winners Winners Winners Star Cruises GENH.SI 0.44 46.7 Star Cruises GENH.SI 0.44 66.0 Star Cruises GENH.SI 0.44 166.7 Delong DELO.SI 0.63 23.8 Delong DELO.SI 0.63 50.6 China Hongxing CHXS.SI 0.20 73.9 China Hongxing CHXS.SI 0.20 14.3 China Hongxing CHXS.SI 0.20 33.3 Hi-P HIPI.SI 0.92 73.6 Synear Food SYFH.SI 0.27 10.4 MCL Land MCRS.SI 2.45 28.9 Delong DELO.SI 0.63 71.2 GP Industries GPEI.SI 0.54 10.2 Yangzijiang Shipbuilding YAZG.SI 1.68 15.9 MCL Land MCRS.SI 2.45 43.3 SP Ausnet SPAU.SI 1.09 10.1 Hi-P HIPI.SI 0.92 14.3 Yangzijiang Shipbuilding YAZG.SI 1.68 34.4 CWT CWTD.SI 0.99 8.2 GP Industries GPEI.SI 0.54 13.7 Pine Agritech PINE.SI 0.20 25.0 Hi-P HIPI.SI 0.92 8.2 SP Ausnet SPAU.SI 1.09 11.2 CapitaCommercial Trust CACT.SI 1.41 23.7 Allgreen Properties AGRN.SI 1.14 7.5 Luye Pharm. LUYE.SI 1.06 10.4 Ascendas REIT AEMN.SI 2.24 23.1 CSE Global CSES.SI 1.04 7.2 Raffles Medical RAFG.SI 2.15 7.5 CDL Hospitality CDLT.SI 2.04 20.0 Losers Losers Losers Petra Foods PEFO.SI 1.23 (10.2) Petra Foods PEFO.SI 1.23 (20.1) Mermaid Maritime MMPC.SI 0.44 (18.7)Silverlake Axis SLVX.SI 0.35 (4.1) Ezra EZRA.SI 1.74 (10.3) Epure SOGL.SI 0.73 (13.2)StarHub STAR.SI 2.44 (3.2) Elec & Eltek EELT.SI 2.68 (9.5) KS Energy KSTL.SI 1.00 (13.0)Goodpack GPAK.SI 1.87 (3.1) Mermaid Maritime MMPC.SI 0.44 (9.4) WBL WEAS.SI 4.30 (8.5)KS Energy KSTL.SI 1.00 (2.9) Ho Bee HBEE.SI 1.56 (8.2) Noble NOBG.SI 1.70 (5.0)Mandarin Oriental MOIL.SI 1.36 (2.2) Indofood Agri IFAR.SI 2.35 (7.5) Ezra EZRA.SI 1.74 (2.2)Mercator MRTL.SI 0.27 (1.9) China Merchants (Pacific) CAEP.SI 0.67 (6.9) China Fishery CNFG.SI 1.85 (2.1)Macquarie Int'l. Infra. Fund MIIF.SI 0.55 (1.8) KS Energy KSTL.SI 1.00 (6.5) Raffles Education RLSE.SI 0.28 (1.8)Banyan Tree BANY.SI 0.83 (1.8) SC Global SCGO.SI 1.59 (6.5) Creative Technology CREA.SI 4.03 (0.7)China Merchants (Pacific) CAEP.SI 0.67 (1.5) Epure SOGL.SI 0.73 (6.5) Mandarin Oriental MOIL.SI 1.36 (0.7)

Price-to-earnings - most & least expensive 10 companies Price-to-book - most & least expensive 10 companies CFROI® Spread - top & bottom 10 companies Price 10 P/E Price 10 P/B Price CFROI® SpreadCompany RIC (S$) (x) Company RIC (S$) (x) Company RIC (S$) (%)Winners Winners Winners MCL Land MCRS.SI 2.45 4.1 China Milk CHNM.SI 0.24 0.4 Yangzijiang Shipbuilding YAZG.SI 1.68 24.5Elec & Eltek EELT.SI 2.68 4.4 Orchard Parade ORCH.SI 1.14 0.5 Ho Bee HBEE.SI 1.56 19.0SC Global SCGO.SI 1.59 4.5 Metro MTHL.SI 0.77 0.5 MCL Land MCRS.SI 2.45 18.9ASL Marine ASLM.SI 0.90 4.9 Synear Food SYFH.SI 0.27 0.6 CSE Global CSES.SI 1.04 18.7Mercator MRTL.SI 0.27 5.1 Hotel Grand Central HGCS.SI 0.79 0.6 CH Offshore CHOF.SI 0.52 15.8United Engineers UTES.SI 2.26 5.1 Mercator MRTL.SI 0.27 0.6 Rotary Eng. ROTE.SI 0.96 15.2Ho Bee HBEE.SI 1.56 5.2 Starhill Global REIT STHL.SI 0.59 0.6 Straits Asia STRL.SI 2.16 14.8China Milk CHNM.SI 0.24 5.2 Mermaid Maritime MMPC.SI 0.44 0.6 Epure SOGL.SI 0.73 12.4CH Offshore CHOF.SI 0.52 5.8 Creative Technology CREA.SI 4.03 0.6 Silverlake Axis SLVX.SI 0.35 10.8Delong DELO.SI 0.63 6.2 China Hongxing CHXS.SI 0.20 0.6 Hyflux HYFL.SI 3.14 10.5 Losers Losers Losers Guocoland GUOC.SI 2.28 168.9 StarHub STAR.SI 2.44 271.1 Creative Technology CREA.SI 4.03 (26.4)Fortune REIT FORT.SI 3.75 98.7 Singapore Post SPOS.SI 1.21 7.3 Neptune Oriental NEPS.SI 2.00 (12.2)Banyan Tree BANY.SI 0.83 92.2 Silverlake Axis SLVX.SI 0.35 7.3 Pine Agritech PINE.SI 0.20 (10.3)Silverlake Axis SLVX.SI 0.35 53.8 MobileOne MONE.SI 2.20 6.6 Macquarie Int'l. Infra. Fund MIIF.SI 0.55 (8.9)Hotel Properties HPPS.SI 2.90 33.7 SP Ausnet SPAU.SI 1.09 4.4 Star Cruises GENH.SI 0.44 (8.2)Star Cruises GENH.SI 0.44 27.5 CWT CWTD.SI 0.99 4.1 Guocoland GUOC.SI 2.28 (5.9)Parkway PARM.SI 3.85 26.7 Fortune REIT FORT.SI 3.75 4.0 GP Industries GPEI.SI 0.54 (5.6)K-REIT KASA.SI 1.25 26.6 Raffles Medical RAFG.SI 2.15 4.0 Mermaid Maritime MMPC.SI 0.44 (5.5)Raffles Medical RAFG.SI 2.15 25.6 Cerebos CERE.SI 4.35 3.8 SC Global SCGO.SI 1.59 (4.1)Biosensors BIOS.SI 0.87 25.2 Straits Asia STRL.SI 2.16 3.8 Mandarin Oriental MOIL.SI 1.36 (4.1)


10 September 2010

David & Goliath 50

Taiwan – Company updates Prince Housing (2511.TW, NT$20.10, O [V], TP NT$24.20) Cyberlink (5203.TW, NT$131.00, O, TP NT$163.00) The undervalued commercial properties

■ Commercial property has been witnessing strong market demandin Taipei since 2Q10 on ample monetary liquidity and anticipationof “catch up with residential property”. Prince is riding on thistrend as it has a Grade A office building and a luxury hotelproperty in a very prime location Taipei.

■ We raise our NAV estimate on Prince by 28% to NT$34.6, giventhe value appreciation on these two commercial properties overthe past one year. We also move up our target price by 28% toNT$24.2.

■ However, we revise down Prince’s 2010E EPS by 9% as 1H10profits came lower than our estimates. We saw slower revenuebooking from its major luxury residential project (with 100% ofpresale) – “Taipei Sinyi” due to the slower-than-expected progress in construction.

■ Prince’s share price has been strong since July. However,valuation still appears attractive, trading at 45% discount to ourestimated NAV. With exposure to the top quality commercialproperties in the best locations, Prince, in our view, could seedecent upside from a long-term perspective. We reiterate ourOUTPERFORM rating.

Softer 2H10 PC momentum already priced in; Looking into positive 2011 outlook

■ Cyberlink’s sales are 80-90% bundled with PC OEM shipments and are two to three months lagging the normal PC pattern. We believe the current share price has already priced in the softer 2H10 PC outlook. We only model 10% HoH sales growth in 2H10.

■ We are positive on Cyberlink’s business outlook in 2011 and model 22% sales growth, as Cyberlink is growing organically with the PC industry, along with market share gains and increasing entertainment software demand from media tablets.

■ PC and handset makers will launch their media tablet product in late 4Q10 or 1Q11 and most will use Android OS, an open platform, but need more software developer support. This should provide a new business opportunity for Cyberlink in 2011.

■ We believe Cyberlink will be the long-term winner in multimedia software. Cyberlink trades at 12.5x 2011E EPS versus a 12-18x trading range from 2008 to YTD. Cyberlink goes ex. dividend on 16 September with a NT$6.4 cash dividend, implying a 5% cash yield. Reiterate our OUTPERFORM rating with a TP of NT$163.

Bbg/RIC 19.1524.20 (18.90)

957.91 26 9.14.5

Free float (%) 75.1 Performance 1M 3M 12MAbsolute (%) 24.4 37.3 37.3 Relativ e (%) 26.4 29.0 24.6

Year 12/08A 12/09A 12/10E 12/11E 12/12E6,738 7,651 11,041 10,236 12,808 1,559 1,569 3,630 4,506 4,575 (327) 603 2,596 3,451 3,510 -0.34 0.63 2.71 3.60 3.66n.a. n.a. (9) 8 0n.a. n.a. 2.40 0 0n.a. n.a. 330.3 32.9 1.7NM 30.4 7.1 5.3 5.2

0 1.0 7.1 9.4 9.624.3 22.6 11.2 8.8 8.2

1.8 1.7 1.4 1.2 1.1(3.2) 5.4 19.2 22.1 20.2

188.4 154.3 165.0 135.9 110.6

19.3 - 12.618,344.0/ 573.4Mkt cap (mn)Daily trad v al - 6m av g (US$ mn)

Rev enues (mn)

Major shareholders

EBITDA (mn)Net profit (mn)


EPS

Note1:Prince Housing is developer focusing on mid./south Taiwan housing market and commence into north part recently. It has low BV but high M V land assets and enter into commercial building by BOT with Taipe city government..


2511 TT / 2511.TWO (O) [V]

P/B (x )


- Consensus EPSEPS grow th (%)




—

Price (03 Sep 10 )TP (Prev. TP W)Est. pot. % chg. to TP52-w k range (W)

Bbg/RIC 127.00163 (163)

115.71 28 0.73.1

Free float (%) 60 Performance 1M 3M 12MAbsolute (%) (5.2) (3.8) (3.9)Relativ e (%) (2.9) (10.3) (12.4)

Year 12/08A 12/09A 12/10E 12/11E 12/12E4,678 4,559 5,146 6,299 7,704 1,198 1,060 1,301 1,592 1,972 1,096 906 962 1,181 1,461 10.00 7.90 8.30 10.20 12.60

n.a. n.a. 0 0 0n.a. n.a. 10.3 11.6 0

(1.9) (20.3) 4.4 22.8 23.712.7 16.0 15.3 12.5 10.15.9 5.0 5.1 6.0 7.49.1 11.2 9.0 7.2 5.63.0 2.9 2.8 2.6 2.4

23.0 18.1 18.4 20.9 23.4(80.2) (57.0) (57.2) (58.3) (59.5)


5203 TT / 5203.TWO (O)

P/B (x )






Chairman Mr. Huang

Note1:Established in 1996 and be listed in 2000, Cyberlink is a multimedia software developer in Taiwan. PowerDVD and PowerDirector are the most important products for Cyberlink with around 30-40% sales contribution..




EPS

164.0 - 122.0

Rev enues (mn)

Major shareholders

14,694.5/ 459.3Mkt cap (mn)Daily trad v al - 6m av g (US$ mn)

Price performance vs. MSCI Taiwan Price performance vs. MSCI Taiwan

75

100

125

150

175

09/09 11/09 01/10 03/10 05/10 07/10 09/10

Prince Housing MSCI Taiwan

90

100

110

120

130

09/09 11/09 01/10 03/10 05/10 07/10 09/10

Cyberlink MSCI Taiwan

Sidney Yeh / Research Analyst / 886 2 2715 6368 / [email protected] Extracted from The Asian Daily 06 Sep 2010

Jill Su / Research Analyst / 886 2 2715 6364 / [email protected] Extracted from The Asian Daily 06 Sep 2010

10 September 2010

David & Goliath 51

Taiwan – Company updates Hung Poo (2536.TW, NT$43.50, O [V], TP NT$51.00) Wintek (2384.TW, NT$49.20, O [V], TP NT$52.00) Still a value play

■ Hung Poo launched 3 residential projects in Taipei County in late2Q10. Despite headwinds (due to the government’s cooling downmeasures) in the property market in June/July, the companymanaged to sell all the units in two months with very good ASP.

■ The strong sell-through did not attract the market’s attention asthe selling/marketing was very low profile. After these projects,Hung Poo still has 5,908 pings (19,555 SQM) land on hand. Itplans to launch a luxury project in the prime area of Taipei, whichwe believe should be very profitable given the cheap land cost.

■ Given the strong sell-through of the current projects and thebetter pricing outlook for 2011, we raise our NAV forecast by 4%to NT$56.7. However, we revise down our 2010/11 EPSestimates by 49%/38% as sales of one commercial project hasbeen pushed back as management holds the timing for sales.

■ Hung Poo is lagging behind its developer peers, given its slower2010 earnings growth. However, we expect Hung Poo to catchup with decent data points recently. Maintain OUTPERFORMrating and raise target price to NT$51 (10% discount to NAV).

A winner in the tablet revolution

■ Given the robust outlook on the iPad and new capacity ramp up, we believe Wintek’s strong momentum will continue into 3QE/4Q10E, with a top line growth of 40% and 17%, respectively. We believe there is room for upside if the new touch panel line in China ramps up ahead of schedule, as Wintek’s touch panel capacity in now fully utilised.

■ Due to macro concerns, sentiment in the tech supply chain has been weak, and Apple seems to be the lone bright spot. We believe Wintek is the most geared play to the Apple product cycle, with over 50% revenue exposure.

■ We raise our 2010/2011E earnings from NT$-0.17/1.91 to NT$0.53/3.06, respectively, to reflect the strong momentum in the next six quarters. We are ahead of consensus estimates, and expect street’s estimates to be revised up.

■ On the back our earnings upgrade, we raise our SOTP-based target price from NT$35 to NT$52.. Wintek now trades at 14x 2011E P/E; our target price implies 21% upside from the current level.

Bbg/RIC 43.8551.00 (48.70)

289.93 16 2.6

4Free float (%) 60 Performance 1M 3M 12M

Absolute (%) 12.4 8.1 5.7 Relativ e (%) 14.3 1.6 (4.1)

Year 12/08A 12/09A 12/10E 12/11E 12/12E7,057 5,017 4,626 4,526 4,777 1,637 1,697 1,035 1,692 2,327 1,588 1,592 966 1,595 2,204 5.48 5.49 3.33 5.50 7.60n.a. n.a. (49) (38) (11)n.a. n.a. 5.56 8.94 8.5332.0 0.3 (39.3) 65.1 38.1

8.0 8.0 13.2 8.0 5.85.7 7.5 5.3 8.8 12.1

11.4 8.3 12.7 6.3 4.21.6 1.4 1.4 1.3 1.2

19.4 17.6 10.6 16.0 20.072.5 15.1 4.3 (20.9) (26.5)

54.1 - 36.312,713.5/ 397.4Mkt cap (mn)Daily trad v al - 6m av g (US$ mn)

Rev enues (mn)

Major shareholders



EPS

Note1:Hung Poo Real Estate Development Corporation develops and sells residential and commercial buildings which are constructed by independent construction companies..


2536 TT / 2536.TWO (O) [V]

P/B (x )






Chairman (40%)


Bbg/RIC 43.0052.00 (35.00)

1,282.04 21 38.636.1


Year 12/08A 12/09A 12/10E 12/11E 12/12E32,280 27,399 59,643 86,847 95,916 3,420 3,815 7,234 11,018 11,576

(2,487) (2,704) 636 3,922 4,374 (2.17) (2.37) 0.53 3.06 3.41

n.a. n.a. 0 60 27n.a. n.a. 0.43 2.16 2.97n.a. n.a. n.a. 480.1 11.6NM NM 81.6 14.1 12.6

0 0 0 1.8 2.022.5 19.4 10.9 7.0 6.01.9 2.1 1.9 1.8 1.6

(9.6) (11.7) 2.3 12.8 12.984.3 81.4 86.0 70.9 43.1


2384 TT / 2384.TWO (O) [V]

P/B (x )






Chairman and family (12%)

Note1:Wintek is a STN and TFT-LCD panel manufacturer focusing on small/medium-size mobile displays. The company began the touch panel business in 2007 and saw rapid growth in this segment in 2008 and 2009.




EPS

43.0 - 20.2

Rev enues (mn)

Major shareholders

55,127.8/ 1,723.1Mkt cap (mn)Daily trad v al - 6m av g (US$ mn)


85

100

115

130

145

09/09 11/09 01/10 03/10 05/10 07/10 09/10

Hung Poo MSCI Taiwan

60

100

140

180

220

09/09 11/09 01/10 03/10 05/10 07/10 09/10

Wintek MSCI Taiwan

Sidney Yeh / Research Analyst / 886 2 2715 6368 / [email protected] Extracted from The Asian Daily 06 Sep 2010

Robin Cheng / Research Analyst / 886 2 2715 6386 / [email protected] Extracted from The Asian Daily 06 Sep 2010

10 September 2010

David & Goliath 52

Taiwan – Company updates EVA Airways (2618.TW, NT$22.05, O [V], TP NT$28.60) Taishin Financial (2887.TW, NT$13.25, O [V], TP NT$16.50)August operating numbers flat sequentially due to seasonality

■ EVA’s total August revenue is flat MoM (+49% YoY), withdemand and yields largely unchanged versus those in July. Wenote that both passenger and cargo demand is usually weaker inAugust versus July. We do not believe this is an early sign of acyclical slowdown, and continue to believe that EVA is on track tomake record earnings.

■ August passenger demand grew MoM, likely due to the impact ofincreasing direct-link flights since May. Yield was virtually flatMoM, and we noted that back in 2006-09, yield usually peaked inJuly for the summer. Cargo demand also held up despite Augustbeing seasonally weaker. Flat August cargo yield is a relief giventhe concern on potential weaker demand from US and Europe.Overall, load factors remained high at 82%+, and we believe thisis supportive to yield development for the next few months.

■ The stock is attractive with a forward P/B of 1.4x, considering therecord FY10-11E RoAE. Our NT$28.60 target price is based on1.7x forward P/B. This is derived from 29% FY11E RoAE, itspeers’ target P/B and ROAE relationship and 10% target P/Bdiscount on relatively weak balance sheet and higher policy risk.

August monthly earnings remain strong

■ Taishin FHC reported preliminary profit of NT$830 mn for Augustand 8M10 profit of NT$5.45 bn (NT$0.76/share). This is 62% of CS full-year estimates and 68% of consensus forecasts for 2010.

■ The bank’s profit in August was likely affected by lower trading profits on the back of weaker market conditions lately, but overall core profit should remain largely intact. We expect the bank’s core earnings to see small improvement into the year-end with momentum to accelerate early next year when the higher yield consumer business should see stronger net positive growth.

■ Taishin FHC should post a better 2H10 profit, especially with thegain from CHB’s land sale. Management has guided for the consumer NPL recovery to stay strong in 2011, at over NT$3 bn a year, equivalent to 57 bps of loans, and with the corporate NPL recovery to account for 70 bps of the bank’s entire loan book.

■ Taishin provides the largest exposure to the consumer finance recovery in Taiwan. We estimate Taishin is trading at 1.1x P/B and 11x FY10’s earnings and maintain our OUTPERFORM rating.

Bbg/RIC 23.4028.60 (28.60)

2,313.36 22 37.617.1


Year 12/08A 12/09A 12/10E 12/11E 12/12E6,023 12,744 29,791 32,197 34,406

(16,890) (2,844) 13,915 14,053 14,313 (7.49) (1.14) 4.70 4.74 4.83

n.a. n.a. 0 0 0n.a. n.a. 3.70 4.00 4.00n.a. n.a. n.a. 1.0 1.9NM NM 5.0 4.9 4.8

0 0 5.0 6.1 6.231.1 15.1 6.0 5.3 4.9

2.0 1.8 1.6 1.3 1.1(38.6) (8.9) 32.8 26.9 23.0332.4 287.0 195.4 143.5 107.5

Price (07 Sep 10 , NT$)TP (Prev. TP W)Est. pot. % chg. to TP52-w k range (W)

2618 TT / 2618.TWO (O) [V]

ROE (%)


EPS grow th (%)P/E (x )


- Consensus EPS (NT$)


Ev ergreen Grp - 29.9%

Note1:EVA Airways Corp. is an air carrier that transports passengers and cargos. The Company operates primarily in Taiwan and serves international route networks in North America, Asia, Europe, and Australasia..

Div idend y ield (%)EV / EBITDRAF (x )P/B (x )

Net profit (NT$ mn)EPS (NT$)

Net debt (net cash)/equity (%)


Mkt cap (NT$/US$ mn)Daily trad v al - 6m av g (US$ mn)

EBITDRAF (NT$ mn)

Major shareholders

25.2 - 11.754,132.7/ 1,691.4

Bbg/RIC 13.4016.50 (16.50)

5,909.44 23 15.16.6

Free float (%) 60 Performance 1M 3M 12MAbsolute (%) (11.8) 19.6 9.8 Relativ e (%) (10.6) 9.0 2.3

Year 12/08A 12/09A 12/10E 12/11E 12/12E19,380 21,230 16,670 20,634 25,147 (5,753) 6,748 7,304 8,506 9,863 (1.01) 1.27 1.24 1.44 1.67

n.a. n.a. 0 0 0n.a. n.a. 0.98 1.15 1.36n.a. n.a. (2.5) 16.5 16.0NM 10.6 10.8 9.3 8.0

0 0 3.6 3.8 4.49.7 12.1 12.1 13.1 14.21.4 1.1 1.1 1.0 0.9

(9.6) 11.2 10.7 11.4 12.3(0.1) 0.5 0.6 0.7 0.7

6.8 8.9 9.8 9.5 9.3


2887 TT / 2887.TWO (O) [V]

ROE (%)


EPS grow th (%)P/E (x )


- Consensus EPS


Wu family - 20%, New bridge-

Note1:Taishin Financial Holdings is a holding company. Through its subsidiaries, the company conducts commercial banking business, such as deposits, loans, discount bills, guarantees, remittances, and fo reign exchange transactions.

Div idend y ield (%)BVPSP/B (x )

Net profit (mn)EPS

ROA (%)Tier 1 (%)


Mkt cap (mn)Daily trad v al - 6m av g (US$ mn)

Pre-prov isioning profit (mn)

Major shareholders

15.8 - 10.479,186.5/ 2,479.2


60

100

140

180

220

09/09 11/09 01/10 03/10 05/10 07/10 09/10

EVA Airways MSCI Taiwan

70

85

100

115

130

09/09 11/09 01/10 03/10 05/10 07/10 09/10

Taishin Financial MSCI Taiwan

Sam Lee / Research Analyst / 852 2101 7186 / [email protected] Extracted from The Asian Daily 09 Sep 2010

Chung Hsu, CFA / Research Analyst / 886 2 2715 6362 / [email protected] Extracted from The Asian Daily 10 Sep 2010

10 September 2010

David &

Goliath

53

Valuations of Credit Suisse Taiwan small-cap watch list* Market CS target/ Potential Credit Year HOLT CFROI

Cap Price HOLT warranted return Suisse end CFROI SpreadCompany RIC (US$ mn) (NT$) price (NT$) (%) Rating month 2009 2010 2009 2010 (%) (%) 1W 1M 3MAbility Ent. 2374.TW 708 51.60 55.84 8.2 Not Rated Dec 10.3 n.a. 2.4 2.2 23.3 17.7 3.7 1.6 10.4Advanced Int'l. Multitech 8938.TWO 244 59.30 66.54 12.2 Not Rated Dec 11.3 10.1 2.2 1.9 13.9 8.1 1.9 (0.3) 5.3Advantech 2395.TW 1,203 76.50 74.31 (2.9) Not Rated Dec 21.9 15.3 3.0 2.7 15.0 9.6 3.1 8.2 13.2Alpha Networks 3380.TW 343 23.20 33.37 43.8 Not Rated Dec 12.9 9.2 1.2 1.2 8.9 3.2 2.2 (7.9) (7.9)Altek 3059.TW 570 48.50 58.47 20.6 Not Rated Dec 8.0 11.8 1.6 1.4 19.3 13.7 0.4 1.0 11.6Ambassador Hotel 2704.TW 524 45.60 19.30 (57.7) Not Rated Dec 91.4 53.9 2.0 2.0 1.5 (4.1) 1.4 1.1 28.1Asia Optical 3019.TW 416 48.95 59.37 21.3 Not Rated Dec (28.3) 26.8 0.9 0.8 2.1 (3.5) (0.1) (3.8) (2.1)AV Tech 8072.TW 267 85.30 77.64 (9.0) Not Rated Dec 12.3 11.6 2.0 1.7 17.3 11.6 1.7 (5.4) (7.9)Avermedia Technologies 2417.TW 296 41.80 61.78 47.8 Not Rated Dec 11.4 8.5 2.2 1.7 15.1 9.3 4.0 (0.2) (1.5)Av y Precision 5392.TWO 349 150.00 239.20 59.5 Not Rated Dec 15.6 11.0 3.8 2.9 22.4 15.0 (0.3) 2.0 10.3Bank of Kaohsiung 2836.TW 199 12.10 17.05 40.9 Not Rated Dec 80.7 19.9 0.7 0.7 (0.3) (8.9) (0.4) (11.7) 22.8Bright LED 3031.TW 215 34.80 15.98 (54.1) Not Rated Dec 28.3 n.a. 2.2 1.8 8.8 3.0 2.2 (7.3) (7.0)Capital Securities 6005.TW 897 14.05 11.87 (15.5) Not Rated Dec 9.6 17.4 1.3 1.2 12.7 4.9 0.4 (8.2) 18.1Career Tech 6153.TW 432 42.75 35.68 (16.5) Not Rated Dec 32.1 14.2 2.3 2.2 8.9 3.1 4.5 28.4 46.9Catcher Technology 2474.TW 1,515 72.70 80.00 10.0 NEUTRAL Dec 14.6 12.5 1.5 1.4 9.7 4.4 1.0 (3.2) 8.3Celxpert Energy 3323.TWO 161 49.95 63.16 26.4 Not Rated Dec 14.5 9.4 2.0 1.5 17.1 11.1 1.8 (3.6) 10.6Cheng UEI 2392.TW 781 54.00 37.39 (30.8) Not Rated Dec 17.7 15.9 1.3 1.3 6.6 1.1 6.1 (6.9) 12.7Chicony Electronics 2385.TW 1,275 65.00 64.00 (1.5) NEUTRAL Dec 12.1 11.2 3.4 2.9 21.3 15.9 8.9 (8.7) (3.2)Chin-Poon 2355.TW 296 23.75 28.92 21.8 Not Rated Dec 9.7 n.a. 0.9 0.9 8.5 2.7 1.7 (0.2) 8.0China Airlines 2610.TW 2,730 18.80 23.00 22.3 OUTPERFORM Dec (18.1) 6.1 1.7 1.5 0.2 (5.1) (9.4) (3.6) 34.3China Chemical & Pharm. 1701.TW 249 26.60 14.92 (43.9) Not Rated Dec 20.5 n.a. 1.8 1.8 6.3 0.5 9.5 10.8 42.2China General Plastics 1305.TW 154 11.60 14.72 26.9 Not Rated Dec 9.6 8.0 1.0 1.0 6.2 0.2 0.9 (6.8) 28.3China Petrochem. 1314.TW 1,154 20.50 20.34 (0.8) Not Rated Dec 17.8 8.2 1.6 1.6 2.8 (2.7) 4.3 6.2 32.7China Sy n. Rubber 2104.TW 517 30.00 22.09 (26.4) Not Rated Dec 16.2 n.a. 1.1 1.0 2.3 (3.3) 1.5 (7.0) (1.3)Chinese Gamer 3083.TWO 659 239.00 228.33 (4.5) Not Rated Dec 19.5 13.8 8.0 6.8 41.7 36.2 7.4 (12.3) (12.0)Chong Hong 5534.TW 546 72.20 72.74 0.7 OUTPERFORM Dec 13.8 7.4 2.6 2.1 10.2 4.5 (3.1) 8.7 30.3Chroma Ate 2360.TW 852 75.10 87.00 15.8 OUTPERFORM Dec 30.9 15.2 4.1 3.6 12.6 7.0 0.8 8.2 25.8Chung Hsin E&M 1513.TW 263 17.45 12.94 (25.9) Not Rated Dec 14.9 n.a. 1.1 1.1 5.2 (0.6) (0.3) (7.9) 1.5Chunghw a Picture 2475.TW 896 4.40 15.44 251.0 Not Rated Dec (0.5) (0.7) 0.4 0.5 (27.4) (32.6) (3.1) (14.2) (15.4)Compal 8078.TW 512 26.85 28.69 6.8 Not Rated Dec 20.5 32.7 1.4 1.3 7.0 1.5 0.2 (9.7) 10.3

Share price performanceNT$ term (%)P/B (x)P/E (x)


* Include the small-cap stocks in HOLT® database with market cap between US$50 mn and US$1.5 bn. For stocks that are Not Rated, I/B/E/S consensus forecast are used. CFROI® is a registered trademark in the United States and other countries (excluding the United Kingdom) of Credit Suisse or its subsidiaries or affiliates. * Companies in bold and italic indicate constituents of Credit Suisse Taiwan Small Cap Index.

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Cap Price HOLT warranted return Suisse end CFROI Spread T$ term (%)Company RIC (US$ mn) (NT$) price (NT$) (%) Rating month 2009 2010 2009 2010 (%) (%) 1W 1M 3MCoretronic 5371.TWO 1,057 46.55 54.00 16.0 OUTPERFORM Dec 12.6 8.5 1.7 1.6 11.7 6.2 6.5 1.1 5.1CTCI 9933.TW 717 34.00 25.13 (26.1) Not Rated Dec 12.8 11.3 2.0 1.9 11.3 5.8 0.0 (1.2) 4.9Cyberlink 5203.TW 478 131.00 163.00 24.4 OUTPERFORM Dec 16.5 15.8 3.0 2.9 17.3 11.7 3.1 (1.1) 1.6CyberTAN 3062.TW 367 35.30 39.00 10.5 NEUTRAL Dec 17.2 29.7 2.3 2.4 8.1 2.4 2.5 (8.5) 6.0D-Link 2332.TW 520 25.60 35.00 35.0 OUTPERFORM Dec 32.3 12.1 1.1 1.1 2.2 (3.4) (4.5) (3.4) 6.7Depo Auto Parts 6605.TW 473 91.00 64.29 (29.3) Not Rated Dec 14.4 n.a. 1.9 1.8 7.6 1.9 0.3 1.4 19.6DFI 2397.TW 120 31.55 47.22 49.7 Not Rated Dec 6.8 n.a. 1.3 1.2 17.5 9.7 1.0 (12.1) (0.2)Dynapack 3211.TWO 370 91.30 98.57 8.0 Not Rated Dec 10.3 8.4 2.6 1.8 22.1 16.5 2.9 (1.8) 3.4E.Sun Financial 2884.TW 1,788 15.00 15.50 3.3 NEUTRAL Dec 27.6 12.6 1.1 1.0 3.3 (4.2) 1.0 (0.3) 26.8E-Life Mall 6281.TW 147 47.40 49.72 4.9 Not Rated Dec 12.0 n.a. 1.7 1.5 19.1 13.2 (0.3) (2.1) (1.3)E-Ton 3452.TWO 291 37.25 29.91 (19.7) Not Rated Dec (13.8) 6.5 0.8 0.7 0.2 (6.5) 1.4 (22.8) (3.2)Epistar 2448.TW 2,245 84.50 115.00 36.1 OUTPERFORM Dec 32.6 12.2 1.8 1.8 4.7 (0.6) 3.2 1.4 7.0EVA Airways 2618.TW 2,048 22.05 28.60 29.7 OUTPERFORM Dec (19.3) 4.7 1.7 1.5 (0.4) (5.8) (9.3) (1.8) 32.0Evergreen Marine 2603.TW 1,983 20.55 25.00 21.7 OUTPERFORM Dec (5.2) 19.4 1.1 1.1 (15.5) (20.8) (9.1) (16.5) 18.1Everlight Electronics 2393.TW 1,081 82.30 118.00 43.4 OUTPERFORM Dec 16.9 10.7 2.3 2.1 10.7 5.3 0.9 (2.9) 2.9Far East Dept. Stores 2903.TW 1,328 34.10 13.49 (60.4) Not Rated Dec 21.6 20.7 1.7 1.7 6.2 0.7 3.5 (3.2) 34.7Farglory Land 5522.TW 1,541 69.60 69.30 (0.4) NEUTRAL Dec 7.7 7.8 2.1 1.9 20.5 15.1 (5.3) 5.8 14.9First Steamship 2601.TW 560 65.50 42.27 (35.5) Not Rated Dec 17.1 16.5 2.8 2.4 13.6 7.9 1.6 2.5 31.7Formosa Int'l. Hotels 2707.TW 1,229 491.00 164.42 (66.5) Not Rated Dec 56.3 40.8 14.6 13.4 17.5 12.0 (5.6) 4.7 43.1Formosa Taffeta 1434.TW 1,318 24.95 38.65 54.9 Not Rated Dec 499.0 n.a. 0.8 0.8 3.8 (1.6) 2.0 (2.2) 13.9FSP Technology 3015.TW 268 38.10 45.98 20.7 Not Rated Dec 9.9 8.6 1.7 1.5 16.5 10.6 0.4 (0.9) 5.3Gemtek 4906.TW 409 46.00 49.00 6.5 NEUTRAL Dec 19.6 17.2 1.6 1.6 11.4 5.8 6.2 0.5 4.7Genius Electronic 3406.TW 343 141.50 49.44 (65.1) Not Rated Dec (20.7) (404.3) 4.2 4.2 (10.2) (16.2) 39.4 63.6 55.5Geovision 3356.TW 151 100.00 88.65 (11.4) Not Rated Dec 12.3 12.5 3.9 3.5 22.2 16.4 0.5 (2.9) (3.8)Giant Mfg. 9921.TW 1,450 125.00 85.66 (31.5) Not Rated Dec 18.6 15.9 4.1 3.6 16.4 10.9 4.2 3.6 36.7Gintech Energy 3514.TW 959 95.00 106.00 11.6 OUTPERFORM Dec 353.2 8.0 2.3 1.8 1.5 (4.0) (0.7) (0.8) 19.8Global Mixed-Mode 8081.TW 365 135.50 239.00 76.4 OUTPERFORM Dec 16.9 10.9 3.0 2.7 23.5 17.8 7.5 (2.2) (9.4)Global Unichip 3443.TW 444 107.00 100.84 (5.8) Not Rated Dec 34.0 20.6 5.1 3.9 23.2 17.6 2.9 (16.1) (10.8)

P/B (x)Share price performanceCalendarized Calendarized

P/E (x)


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Cap Price HOLT warranted return Suisse end CFROI SpreadCompany RIC (US$ mn) (NT$) price (NT$) (%) Rating month 2009 2010 2009 2010 (%) (%) 1W 1M 3MGlobe Union 9934.TW 329 34.50 25.78 (25.3) Not Rated Dec 24.5 8.8 2.2 2.2 10.1 4.3 (5.0) (17.4) (1.7)Gloria Material 5009.TWO 208 20.05 7.18 (64.2) Not Rated Dec (17.6) 15.1 1.3 1.3 (2.9) (8.8) 5.5 (2.2) 10.8Gold Circuit 2368.TW 194 10.85 15.34 41.4 Not Rated Dec (38.8) 18.2 0.7 0.6 1.1 (4.7) 0.5 (4.0) 6.9Goldsun Dev. 2504.TW 667 14.15 15.25 7.8 Not Rated Dec 34.3 18.4 0.9 1.0 5.2 (0.3) (4.4) (6.0) 16.8Hannstar Board 5469.TW 306 24.40 37.02 51.7 Not Rated Dec 7.7 9.2 1.0 0.9 10.0 4.3 0.8 (7.4) 5.9Harv atek 6168.TW 227 36.90 30.91 (16.2) Not Rated Dec 46.9 12.3 2.5 2.2 6.6 0.7 3.7 (7.4) 10.7Holy Stone Enterprise 3026.TW 380 37.85 35.82 (5.4) Not Rated Dec 13.1 n.a. 1.4 1.3 9.4 3.6 2.0 (5.8) (7.0)Huaku Construction 2548.TW 686 84.20 102.00 21.1 OUTPERFORM Dec 7.9 7.8 2.3 2.0 22.4 16.8 (2.1) 6.4 9.6Ichia Technologies 2402.TW 157 14.70 9.69 (34.1) Not Rated Dec 15.5 28.3 0.8 1.0 3.4 (2.5) 5.0 (4.5) 6.5Infortrend Technology 2495.TW 369 40.15 39.02 (2.8) Not Rated Dec 14.6 11.6 2.4 2.3 13.2 7.5 (0.4) (3.9) (5.2)Inventec Appliances 3367.TW 408 24.20 34.02 40.6 Not Rated Dec 30.6 16.4 1.1 1.0 4.1 (1.5) 5.2 (7.6) 5.9Inventec 2356.TW 1,449 15.60 10.00 (35.9) NEUTRAL Dec 10.0 n.a. 1.1 1.1 10.5 5.2 1.6 (8.8) (2.8)ITEQ 6213.TW 373 41.50 49.37 19.0 Not Rated Dec 14.3 n.a. 2.3 2.2 12.3 6.4 (5.6) (14.2) 9.8KGI Securities 6008.TWO 1,372 13.65 14.93 9.4 Not Rated Dec 16.1 13.5 1.0 0.9 5.4 (2.0) 1.1 (8.1) 20.3King Slide 2059.TW 419 145.00 131.72 (9.2) Not Rated Dec 20.4 13.3 4.1 3.3 13.3 7.6 2.1 (7.7) (11.0)Kinsus Interconnect 3189.TW 994 71.10 74.00 4.1 OUTPERFORM Dec 16.5 12.9 1.7 1.6 9.0 3.5 10.6 4.7 0.1Kye Systems 2365.TW 264 28.95 26.59 (8.2) Not Rated Dec 12.0 10.0 1.7 1.6 12.8 7.0 4.1 1.0 (6.3)Largan 3008.TW 2,666 634.00 460.00 (27.4) NEUTRAL Dec 33.5 25.1 6.2 5.4 18.0 12.7 3.4 8.0 26.0Lite-on 8008.TW 866 30.90 43.68 41.3 Not Rated Dec 15.3 8.7 1.3 1.2 11.9 6.4 2.1 (13.4) (11.3)Macronix 2337.TW 1,907 18.15 25.77 42.0 Not Rated Dec 10.4 7.1 1.4 1.4 5.3 0.0 3.7 (11.9) (10.1)Makalot 1477.TW 364 74.60 59.10 (20.8) Not Rated Dec 12.9 n.a. 3.2 2.8 24.9 19.1 (2.5) (1.3) 4.9Merida Industry 9914.TW 416 53.60 36.45 (32.0) Not Rated Dec 11.8 9.8 2.2 2.2 15.1 9.4 (3.4) (5.6) 18.7Merry Electronics 2439.TW 263 52.80 55.53 5.2 Not Rated Dec 15.8 10.1 1.9 1.7 12.3 6.5 1.0 6.1 20.5Micro-star 2377.TW 535 15.95 26.66 67.2 Not Rated Dec 69.3 8.4 0.7 0.6 3.4 (2.2) 0.9 (9.1) (3.6)Microelectronics Tech. 2314.TW 239 18.50 10.95 (40.8) Not Rated Dec (123.3) 48.7 1.6 1.6 4.6 (1.2) 1.6 (8.9) 17.5Nany a Technology 2408.TW 2,141 19.90 18.00 (9.5) UNDERPERFORM Dec (3.2) 22.3 1.8 1.6 (19.7) (24.9) 6.7 (10.6) (18.4)Paragon Technologies 3518.TW 185 71.60 64.34 (10.1) Not Rated Dec 9.3 9.8 1.4 1.2 14.1 8.3 1.4 (3.4) (6.0)Phison 8299.TWO 816 147.00 154.90 5.4 Not Rated Dec 12.3 14.8 3.2 2.4 27.1 21.6 0.3 (13.5) (9.5)


NT$ term (%)Calendarized Calendarized


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Cap Price HOLT warranted return Suisse end CFROI SpreadCompany RIC (US$ mn) (NT$) price (NT$) (%) Rating month 2009 2010 2009 2010 (%) (%) 1W 1M 3MPix Art 3227.TWO 625 152.50 172.00 12.8 NEUTRAL Dec 22.6 19.6 3.3 3.2 14.5 9.0 1.3 (12.9) (12.4)Pow erchip Semicon. 5346.TWO 1,361 7.74 3.20 (58.7) UNDERPERFORM Dec (3.1) 13.6 2.4 2.0 (10.2) (15.6) 0.0 4.7 16.2Powertech 6239.TW 2,126 96.30 140.00 45.4 OUTPERFORM Dec 13.0 8.7 2.7 2.1 13.7 8.4 0.0 (1.7) 1.9Prime View 8069.TWO 1,779 52.80 60.00 13.6 OUTPERFORM Dec (44.8) 15.6 2.5 2.4 (2.4) (7.7) 6.8 10.0 17.6PROMOS 5387.TWO 355 1.56 2.00 28.2 UNDERPERFORM Dec (0.4) (0.7) 0.5 1.2 n.a. n.a. 5.4 (1.9) (20.4)QISDA 2352.TW 1,209 20.00 17.66 (11.7) Not Rated Dec (21.3) 11.4 1.7 1.7 (1.8) (7.3) 13.6 9.3 32.0Quanta Storage 6188.TWO 333 37.30 77.81 108.6 Not Rated Dec 7.5 5.6 1.3 1.2 16.0 10.4 5.8 (9.5) (18.0)Radiant Opto-electronics 6176.TW 533 39.90 58.78 47.3 Not Rated Dec 11.7 7.9 1.2 1.1 10.2 4.6 0.5 (9.3) (2.6)Radium Life Technology 2547.TW 783 38.65 38.08 (1.5) Not Rated Dec 14.2 6.7 1.9 1.5 8.2 2.5 (0.1) 30.5 51.9Ralink Technology 3534.TW 486 120.50 213.18 76.9 Not Rated Dec 30.7 13.5 3.1 2.4 18.0 12.3 5.7 0.8 (10.3)Realtek 2379.TW 1,036 68.10 113.00 65.9 OUTPERFORM Dec 15.4 11.6 1.9 1.8 8.5 3.0 7.2 (6.0) (3.9)Richtek 6286.TW 1,078 230.00 403.00 75.2 OUTPERFORM Dec 21.2 14.3 6.5 5.3 30.9 25.5 3.1 (13.4) (13.3)Sheng Yu Steel 2029.TW 225 22.30 19.08 (14.4) Not Rated Dec 743.3 n.a. 1.0 0.9 0.4 (5.4) 1.8 1.8 8.0Shih Wei Navigation 5608.TW 452 39.35 34.10 (13.3) Not Rated Dec 11.3 n.a. 1.6 1.4 7.9 2.3 0.6 (6.3) (5.2)Shin Zu Shing 3376.TW 406 81.70 71.77 (12.2) Not Rated Dec 8.5 11.7 1.7 1.5 15.1 9.6 7.4 (17.5) (15.1)Silitech 3311.TW 509 90.60 114.00 25.8 NEUTRAL Dec 12.5 10.3 3.0 2.6 21.2 15.6 3.4 (7.6) 11.6Simplo 6121.TWO 1,374 172.00 156.57 (9.0) Not Rated Dec 17.7 13.0 3.8 3.1 21.9 16.5 8.2 (0.6) 10.6Sincere Navigation 2605.TW 654 36.70 38.60 5.2 NEUTRAL Dec 6.8 7.9 1.4 1.2 12.3 6.8 (0.9) (2.0) (2.1)Sino American Silicon 5483.TWO 1,305 109.00 80.00 (26.6) NEUTRAL Dec 68.8 14.7 3.3 2.9 3.8 (1.7) 2.8 30.4 74.1Siny i Realty 9940.TW 601 52.40 66.76 27.4 OUTPERFORM Dec 10.8 11.0 3.0 3.0 22.7 17.1 2.7 7.4 9.9Soft-World 5478.TWO 545 137.00 259.91 89.7 Not Rated Dec 17.0 11.9 3.5 2.9 26.9 21.4 9.6 (12.2) (14.1)Sunplus 2401.TW 430 23.00 35.10 52.6 Not Rated Dec 35.9 19.7 1.1 1.0 4.3 (1.4) (4.0) (9.1) (0.9)Sunrex 2387.TW 354 30.25 62.86 107.8 Not Rated Dec 8.7 7.4 1.7 1.5 18.9 13.2 0.8 (3.2) (4.6)Ta Chong Bank 2847.TW 693 8.10 7.00 (13.6) NEUTRAL Dec 25.6 20.7 1.0 0.9 (1.9) (9.9) (1.8) (10.4) 36.4Taishin Financial 2887.TW 2,455 13.25 16.50 24.5 OUTPERFORM Dec 10.4 10.7 1.1 1.1 4.4 (3.0) 0.0 (6.6) 34.4Taiwan Business Park 2834.TW 1,152 9.12 11.00 20.6 Not Rated Dec 24.6 26.2 0.8 0.8 2.5 (5.1) 0.3 (7.9) 22.3Taiw an Hon Chuan 9939.TW 453 60.20 45.45 (24.5) Not Rated Dec 13.6 11.8 2.1 1.9 10.1 4.3 (1.3) (4.4) 1.0Taiwan Secom 9917.TW 720 51.70 41.12 (20.5) Not Rated Dec 15.4 n.a. 2.5 2.4 15.1 9.6 1.4 2.2 2.2Teco Elec & Machinery 1504.TW 886 15.50 16.19 4.5 Not Rated Dec 14.2 14.6 0.8 0.8 5.2 (0.3) (1.9) (7.5) 21.6Tong Yang 1319.TW 775 47.70 38.99 (18.3) Not Rated Dec 13.7 11.6 2.0 2.0 12.7 7.1 (6.1) (9.7) 14.7

Calendarized Calendarized Share price performanceP/E (x) P/B (x) NT$ term (%)


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Cap Price HOLT warranted return Suisse end CFROI SpreadCompany RIC (US$ mn) (NT$) price (NT$) (%) Rating month 2009 2010 2009 2010 (%) (%) 1W 1M 3MTopco Scientific 5434.TW 181 39.50 38.94 (1.4) Not Rated Dec 16.7 9.1 1.6 1.5 8.6 2.7 5.8 2.9 15.1Transcend Info 2451.TW 1,004 75.40 52.21 (30.8) Not Rated Dec 7.2 12.9 1.8 1.6 25.0 19.6 (10.5) (17.0) (9.9)Tripod 3044.TW 1,670 112.50 133.00 18.2 OUTPERFORM Dec 16.7 11.8 3.0 2.6 13.2 7.8 4.2 (7.4) 1.4TSRC 2103.TW 971 47.65 45.95 (3.6) Not Rated Dec 13.3 11.6 2.6 2.4 12.5 6.9 2.4 4.7 9.5Tung Ho 2006.TW 887 29.00 49.40 70.3 OUTPERFORM Dec 22.8 8.1 1.4 1.2 2.2 (3.2) 2.7 (6.8) 14.2TXC 3042.TW 526 57.60 51.12 (11.2) Not Rated Dec 21.4 13.6 2.8 2.5 12.3 6.6 1.9 5.3 16.8U-Ming Marine 2606.TW 1,649 61.30 44.40 (27.6) UNDERPERFORM Dec 9.3 11.2 1.9 1.9 11.3 6.0 (1.4) (0.3) (0.5)Unimicron 3037.TW 2,610 53.80 65.00 20.8 OUTPERFORM Dec 22.9 11.4 2.1 2.0 6.9 1.6 0.2 (0.9) 22.8USI 1304.TW 670 24.75 21.06 (14.9) Not Rated Dec 10.0 n.a. 1.6 1.5 8.1 2.5 17.9 17.7 46.3Vanguard 5347.TWO 693 13.30 18.00 35.3 NEUTRAL Dec 250.9 10.7 1.1 1.1 1.1 (4.4) 0.8 (1.8) 9.0Via Technologies 2388.TW 765 24.75 7.71 (68.8) Not Rated Dec (4.6) n.a. 3.0 4.9 (19.9) (25.4) 8.6 (13.9) (2.2)Wafer Works 6182.TWO 429 50.00 29.10 (41.8) UNDERPERFORM Dec 17.2 14.4 1.7 1.6 (2.8) (8.4) (1.0) 7.6 20.2Walsin Technology 2492.TW 362 17.40 23.67 36.0 Not Rated Dec (26.4) n.a. 0.7 0.7 5.2 (0.5) 4.2 (5.9) 1.2Wan Hai Lines 2615.TW 1,334 20.15 23.00 14.1 OUTPERFORM Dec (23.1) 11.7 1.6 1.5 (1.4) (6.8) (1.5) (7.4) 19.9Wellypower 3080.TW 147 27.50 29.57 7.5 Not Rated Dec 15.6 22.2 0.9 0.9 2.5 (3.4) 5.6 (7.9) (3.5)Wintek 2384.TW 1,977 49.20 52.00 5.7 OUTPERFORM Dec (20.8) 93.4 2.4 2.2 (2.9) (8.4) 14.4 45.8 119.6Wistron Neweb 6285.TW 519 65.20 36.96 (43.3) Not Rated Dec 20.4 n.a. 2.6 2.3 9.7 4.0 4.3 0.6 18.0WPG 3702.TW 2,052 62.00 79.00 27.4 OUTPERFORM Dec 15.7 10.1 2.7 2.3 11.1 5.7 3.9 0.8 21.1Yageo 2327.TW 891 12.95 19.67 51.9 Not Rated Dec 41.8 6.7 1.0 0.9 4.5 (1.0) 3.2 (7.8) (5.5)Yang Ming Marine 2609.TW 1,466 18.25 13.60 (25.5) NEUTRAL Dec (2.8) 30.2 1.5 1.4 (12.6) (18.1) (9.0) (20.5) 46.0Youngtek 6261.TWO 238 79.40 115.65 45.7 Not Rated Dec 16.4 9.9 2.5 2.1 17.0 9.4 6.4 9.2 15.2Yung Shin Pharm. 1716.TW 282 35.50 29.09 (18.1) Not Rated Dec 17.1 n.a. 1.7 1.6 7.9 2.2 1.1 3.3 6.6Zinwell 2485.TW 505 50.70 48.75 (3.9) Not Rated Dec 14.3 11.5 2.5 2.2 16.0 10.4 1.4 (11.1) 5.2

Calendarized Calendarized Share price performanceP/E (x) P/B (x) NT$ term (%)


10 September 2010

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Taiwan – Screening Relative price performance - top & bottom 10 companies Relative price performance - top & bottom 10 companies Relative price performance - top & bottom 10 companies Price 1W return Price 1M return Price 3M returnCompany RIC (NT$) (%) Company RIC (NT$) (%) Company RIC (NT$) (%)Winners Winners Winners Genius Electronic 3406.TW 141.50 39.4 Genius Electronic 3406.TW 141.50 63.6 Wintek 2384.TW 49.20 119.6 USI 1304.TW 24.75 17.9 Wintek 2384.TW 49.20 45.8 Sino American Silicon 5483.TWO 109.00 74.1 Wintek 2384.TW 49.20 14.4 Radium Life Technology 2547.TW 38.65 30.5 Genius Electronic 3406.TW 141.50 55.5 QISDA 2352.TW 20.00 13.6 Sino American Silicon 5483.TWO 109.00 30.4 Radium Life Technology 2547.TW 38.65 51.9 Kinsus Interconnect 3189.TW 71.10 10.6 Career Tech 6153.TW 42.75 28.4 Career Tech 6153.TW 42.75 46.9 Soft-World 5478.TWO 137.00 9.6 USI 1304.TW 24.75 17.7 USI 1304.TW 24.75 46.3 China Chemical & Pharm. 1701.TW 26.60 9.5 China Chemical & Pharm. 1701.TW 26.60 10.8 Yang Ming Marine 2609.TW 18.25 46.0 Chicony Electronics 2385.TW 65.00 8.9 Prime View 8069.TWO 52.80 10.0 Formosa Int'l. Hotels 2707.TW 491.00 43.1 Via Technologies 2388.TW 24.75 8.6 QISDA 2352.TW 20.00 9.3 China Chemical & Pharm. 1701.TW 26.60 42.2 Simplo 6121.TWO 172.00 8.2 Youngtek 6261.TWO 79.40 9.2 Giant Mfg. 9921.TW 125.00 36.7 Losers Losers Losers Transcend Info 2451.TW 75.40 (10.5) E-Ton 3452.TWO 37.25 (22.8) PROMOS 5387.TWO 1.56 (20.4)China Airlines 2610.TW 18.80 (9.4) Yang Ming Marine 2609.TW 18.25 (20.5) Nanya Technology 2408.TW 19.90 (18.4)EVA Airways 2618.TW 22.05 (9.3) Shin Zu Shing 3376.TW 81.70 (17.5) Quanta Storage 6188.TWO 37.30 (18.0)Evergreen Marine 2603.TW 20.55 (9.1) Globe Union 9934.TW 34.50 (17.4) Chunghwa Picture 2475.TW 4.40 (15.4)Yang Ming Marine 2609.TW 18.25 (9.0) Transcend Info 2451.TW 75.40 (17.0) Shin Zu Shing 3376.TW 81.70 (15.1)Fortune Electric 1519.TW 22.75 (7.9) Evergreen Marine 2603.TW 20.55 (16.5) Soft-World 5478.TWO 137.00 (14.1)Tong Yang 1319.TW 47.70 (6.1) Global Unichip 3443.TW 107.00 (16.1) Inotera Memories 3474.TW 16.15 (14.1)Formosa Int'l. Hotels 2707.TW 491.00 (5.6) Fortune Electric 1519.TW 22.75 (14.7) Richtek 6286.TW 230.00 (13.3)ITEQ 6213.TW 41.50 (5.6) Chunghwa Picture 2475.TW 4.40 (14.2) PixArt 3227.TWO 152.50 (12.4)Farglory Land 5522.TW 69.60 (5.3) ITEQ 6213.TW 41.50 (14.2) Chinese Gamer 3083.TWO 239.00 (12.0)

Price-to-earnings - most & least expensive 10 companies Price-to-book - most & least expensive 10 companies CFROI® Spread - top & bottom 10 companies Price 10 P/E Price 10 P/B Price CFROI® SpreadCompany RIC (NT$) (x) Company RIC (NT$) (x) Company RIC (NT$) (%)Winners Winners Winners EVA Airways 2618.TW 22.05 4.7 Chunghwa Picture 2475.TW 4.40 0.5 Chong Hong 5534.TW 72.20 36.2 Quanta Storage 6188.TWO 37.30 5.6 Micro-star 2377.TW 15.95 0.6 Richtek 6286.TW 230.00 25.5 China Airlines 2610.TW 18.80 6.1 Gold Circuit 2368.TW 10.85 0.6 Phison 8299.TWO 147.00 21.6 E-Ton 3452.TWO 37.25 6.5 Bank of Kaohsiung 2836.TW 12.10 0.7 Soft-World 5478.TWO 137.00 21.4 Radium Life Technology 2547.TW 38.65 6.7 Walsin Technology 2492.TW 17.40 0.7 Transcend Info 2451.TW 75.40 19.6 Yageo 2327.TW 12.95 6.7 E-Ton 3452.TWO 37.25 0.7 Makalot 1477.TW 74.60 19.1 Macronix 2337.TW 18.15 7.1 Teco Elec & Machinery 1504.TW 15.50 0.8 Global Mixed-Mode 8081.TW 135.50 17.8 Sunrex 2387.TW 30.25 7.4 Formosa Taffeta 1434.TW 24.95 0.8 Ability Ent. 2374.TW 51.60 17.7 Chong Hong 5534.TW 72.20 7.4 Asia Optical 3019.TW 48.95 0.8 Global Unichip 3443.TW 107.00 17.6 Farglory Land 5522.TW 69.60 7.8 Taiwan Business Park 2834.TW 9.12 0.8 Sinyi Realty 9940.TW 52.40 17.1 Losers Losers Losers Wintek 2384.TW 49.20 93.4 Formosa Int'l. Hotels 2707.TW 491.00 13.4 Chunghwa Picture 2475.TW 4.40 (32.6)Ambassador Hotel 2704.TW 45.60 53.9 Chinese Gamer 3083.TWO 239.00 6.8 Via Technologies 2388.TW 24.75 (25.4)Microelectronics Tech. 2314.TW 18.50 48.7 Largan 3008.TW 634.00 5.4 Nanya Technology 2408.TW 19.90 (24.9)Formosa Int'l. Hotels 2707.TW 491.00 40.8 Richtek 6286.TW 230.00 5.3 Evergreen Marine 2603.TW 20.55 (20.8)Compal 8078.TW 26.85 32.7 Via Technologies 2388.TW 24.75 4.9 Yang Ming Marine 2609.TW 18.25 (18.1)Yang Ming Marine 2609.TW 18.25 30.2 Genius Electronic 3406.TW 141.50 4.2 Genius Electronic 3406.TW 141.50 (16.2)CyberTAN 3062.TW 35.30 29.7 Global Unichip 3443.TW 107.00 3.9 Powerchip Semicon. 5346.TWO 7.74 (15.6)Ichia Technologies 2402.TW 14.70 28.3 Giant Mfg. 9921.TW 125.00 3.6 Inotera Memories 3474.TW 16.15 (12.7)Asia Optical 3019.TW 48.95 26.8 Chroma Ate 2360.TW 75.10 3.6 Ta Chong Bank 2847.TW 8.10 (9.9)Taiwan Business Park 2834.TW 9.12 26.2 Geovision 3356.TW 100.00 3.5 Bank of Kaohsiung 2836.TW 12.10 (8.9)

* For stocks that are not rated, I/B/E/S consensus forecast numbers are used. CFROI® Spread is the difference between CFROI® and market implied discount rate. A larger number indicates that more value is created by a company.

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Thailand – Company updates L.P.N. Development (LPN.BK, Bt9.90, O [V], TP Bt12.10) Newly acquired land plot has a very good profit potential

■ LPN announced that it just acquired a land plot in Bangkok’sprime residential area at a favourable price of Bt387 mn. At thistime, there are no details on what and how it plans to develop theland.

■ But based on the low cost of the land and the potential propertyproject it could be developed into, our scenario analysis suggeststhat this could be quite a profitable project with gross marginpossibly in excess of 40%.

■ Even if it were to resell the land to another high-end developer,we reckon that LPN could still book a handsome one-off pre-tax gain of Bt0.4-0.11/share.

■ We view this transaction as another positive development forLPN. Our target price implies 29% potential upside from thecurrent level and we estimate 5.6-9.6% annual dividend yieldsover a three-year forecast period, which are favourable. Wereiterate our OUTPERFORM rating on the stock.

Bbg/RIC 9.4012.10 (12.10)

1,475.70 29 12.9 10.30 - 5.70

3.2Free float (%) 76 Performance 1M 3M 12M

Absolute (%) (1.6) 26.2 50.4 NAV (mn) — Relativ e (%) (6.8) 3.4 12.6

—Year 12/08A 12/09A 12/10E 12/11E 12/12E

1,742.0 1,949.0 2,385.0 2,947.0 3,664.0 1,205.0 1,341.0 1,668.0 2,169.0 2,887.0

EPS (Bt) 0.82 0.91 1.13 1.47 1.96 n.a. n.a. 0 0 0n.a. n.a. 1.01 1.16 1.37

EPS grow th 9.3 11.3 24.4 30.0 33.1P/E (x ) 11.5 10.3 8.3 6.4 4.8Div idend y ield 4.4 5.3 5.6 7.9 9.6EV/EBITDA 8.4 7.0 5.6 4.4 3.4ROE (%) 29.0 28.0 29.3 31.7 34.2Net debt (net 20.3 (5.6) (6.6) (10.8) (15.3)

- Change from prev . EPS (%)- Consensus EPS (Bt)

Note1:Developer of low-priced condominium in greater Bangkok.

13,871.6/ 447.5Mkt cap (Bt/US$ mn)Daily trad v al - 6m av g (US$ mn)

Major shareholders

Price (08 Sep 10, Bt)TP (Prev. TP W)Est. pot. % chg. to TP52-w k range (W)

LPN TB / LPN.BKO (O) [V]


Rating (prev. rating)Shares outstanding (mn)

EBITDA (Bt mn)Net profit (Bt mn)

Thai NVDR (24%),

Prem./(disc) to NAV (%)

Price performance vs. MSCI Thailand

75

100

125

150

175

09/09 11/09 01/10 03/10 05/10 07/10 09/10

LPN Development MSCI Thailand

Chai Techakumpuch / Research Analyst / 662 614 6211 / [email protected] Extracted from The Asian Daily 10 Sep 2010

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Valuations of Credit Suisse Thailand small-cap watch list* Market CS target/ Potential Credit Year HOLT CFROI

Cap Price HOLT warranted return Suisse end CFROI SpreadCompany RIC (US$ mn) (Bt) price (Bt) (%) Rating month 2009 2010 2009 2010 (%) (%) 1W 1M 3MAE. Thana Sinsap AEON.BK 262 32.25 43.16 33.8 Not Rated Feb n.a. 7.3 n.a. 1.3 13.5 5.1 2.4 4.0 7.5Airports of Thailand AOT.BK 1,807 39.00 40.00 2.6 NEUTRAL Sep 31.4 20.4 0.8 0.7 0.1 (6.9) (0.6) (1.3) 15.6Amata AMAT.BK 498 14.40 7.58 (47.4) Not Rated Dec 48.0 28.8 3.0 2.8 5.3 (1.4) (11.7) 30.9 100.0Asian Property AP.BK 539 7.10 8.60 21.1 OUTPERFORM Dec 8.9 9.4 2.0 1.8 13.7 7.1 0.7 10.9 47.9Bangchak Petroleum BCP.BK 546 14.40 16.84 16.9 Not Rated Dec 2.2 7.1 0.7 0.6 4.4 (2.6) (3.4) (2.0) 5.9Bangkok Aviation Fuel BAFS.BK 158 9.55 9.33 (2.4) Not Rated Dec 10.5 10.3 1.6 1.5 7.0 0.1 (1.5) 11.7 20.9Bangkok Chain Hospital KH.BK 280 5.20 6.18 18.8 Not Rated Dec 12.7 12.3 3.0 2.8 12.0 6.5 4.8 (1.9) 6.1Bangkok Dusit Medical BGH.BK 1,261 32.00 25.97 (18.8) Not Rated Dec 22.5 20.0 2.7 2.5 6.6 0.4 (9.2) (2.3) 25.5Bangkok Expressway BECL.BK 457 18.30 22.05 20.5 Not Rated Dec 8.3 8.3 0.8 0.8 3.1 (4.1) (3.2) (2.1) 2.8Bangkok Metro BMCL.BK 302 0.78 0.14 (82.7) Not Rated Dec (7.1) (7.8) 2.2 2.2 n.a. n.a. (3.7) 1.3 32.2Bank of Ayudhya BAY.BK 4,138 21.00 24.00 14.3 OUTPERFORM Dec 19.2 14.2 1.4 1.3 3.3 (3.7) (5.8) 1.4 9.4Bank Thai CIMBT.BK 1,706 3.94 1.29 (67.2) Not Rated Dec n.a. 43.8 6.7 6.7 (0.9) (8.5) (4.4) 2.1 0.0Banpu BANP.BK 5,730 650.00 810.00 24.6 OUTPERFORM Dec 12.4 7.0 3.6 2.6 14.8 9.2 3.8 3.2 8.7BEC World BEC.BK 2,109 32.50 30.50 (6.2) OUTPERFORM Dec 19.2 18.2 9.0 8.4 25.2 20.1 (7.1) 8.3 33.2Big C Supercenter BIGC.BK 1,534 59.00 65.34 10.7 Not Rated Dec 16.5 14.8 2.5 2.3 11.8 6.4 (2.1) 7.8 18.0Bumrungrad Hospital BH.BK 756 32.00 26.42 (17.4) Not Rated Dec 18.7 19.2 4.7 4.0 14.9 9.3 (1.5) 3.2 4.1Cal-Comp CCET.BK 451 3.50 3.35 (4.4) Not Rated Dec 10.6 8.3 0.9 0.7 11.6 4.8 (3.8) (7.4) 8.7Central Pattana CPN.BK 2,067 29.25 27.50 (6.0) OUTPERFORM Dec 12.9 33.8 3.4 3.3 9.5 3.4 (2.5) 17.9 55.6Central Plaza Hotel CENT.BK 230 5.25 -0.31 (105.9) Not Rated Dec 131.3 30.7 1.2 1.4 (0.4) (8.0) (7.1) (7.1) 34.6CH Karnchang CK.BK 440 8.20 3.90 (52.4) Not Rated Dec 136.7 (136.7) 2.2 2.8 5.4 (2.1) (8.9) 18.8 41.4Charoen Pokphand Foods CPF.BK 6,001 24.60 20.74 (15.7) Not Rated Dec 16.2 12.6 3.3 3.2 9.5 3.1 (2.6) (2.6) 40.6CP All CPALL.BK 5,393 37.00 37.00 0.0 OUTPERFORM Dec 33.3 22.2 8.9 7.3 13.2 7.8 (5.1) 16.5 29.8CPN Retail CPNRu.BK 573 10.80 16.88 56.3 Not Rated Dec 12.2 10.7 1.1 1.0 7.9 2.2 0.9 0.0 3.8Delta Electronics DELT.BK 1,042 25.75 39.06 51.7 Not Rated Dec 14.6 9.2 1.8 1.8 7.1 1.6 (11.2) (8.8) 28.8Dynasty Ceramic DCC.BK 622 47.00 35.46 (24.6) Not Rated Dec 19.3 14.9 7.2 6.8 17.9 12.5 0.0 9.9 21.3Eastern Water Resources EASW.BK 286 5.30 7.74 46.0 Not Rated Dec 10.8 9.8 1.4 1.3 8.9 2.5 (2.8) 2.9 10.4Electricity Generating EGCO.BK 1,520 89.00 130.78 46.9 Not Rated Dec 5.9 7.0 0.9 0.9 6.5 0.7 (3.0) 2.3 13.4Glow Energy GLOW.BK 2,005 42.25 45.00 6.5 OUTPERFORM Dec 17.4 12.8 2.0 1.9 3.5 (3.2) (4.0) 1.2 19.0GMM Grammy GRAM.BK 258 15.00 9.48 (36.8) Not Rated Dec 15.5 16.1 2.7 2.6 7.6 1.7 0.0 1.4 7.1

Share price performanceBt term (%)P/B (x)P/E (x)


* Include the small-cap stocks in HOLT® database with market cap between US$50 mn and US$1.5 bn. For stocks that are Not Rated, I/B/E/S consensus forecast are used. CFROI® is a registered trademark in the United States and other countries (excluding the United Kingdom) of Credit Suisse or its subsidiaries or affiliates * Companies in bold and italic indicate constituents of Credit Suisse Thailand Small Cap Index

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Cap Price HOLT warranted return Suisse end CFROI SpreadCompany RIC (US$ mn) (Bt) price (Bt) (%) Rating month 2009 2010 2009 2010 (%) (%) 1W 1M 3MHana Microelectronics HANA.BK 671 24.90 49.02 96.9 Not Rated Dec 9.8 7.9 1.5 1.5 11.4 6.1 (2.4) (9.5) 0.0Home Product Center HMPR.BK 1,232 10.20 5.76 (43.5) Not Rated Dec 32.9 25.2 7.2 6.6 16.1 10.2 (7.3) 29.9 54.5Indorama Polymers IRP.BK 359 8.00 18.82 135.2 Not Rated Dec 6.1 n.a. 1.4 1.1 12.0 5.1 0.0 0.0 0.0IRPC IRPC.BK 2,611 4.00 7.80 95.0 Not Rated Dec 14.8 10.9 1.1 1.1 4.3 (1.7) 1.0 1.5 (7.4)Italian-Thai Dev. ITD.BK 509 3.74 2.50 (33.2) UNDERPERFORM Dec (9.2) (6.9) 1.5 1.9 1.8 (5.5) 2.7 18.4 40.6Khon Kaen Sugar KSL.BK 563 11.20 4.95 (55.8) Not Rated Oct 19.9 21.3 2.0 1.8 6.5 0.6 (3.4) (5.1) 0.0Kiatnakin Bank KK.BK 602 33.50 49.79 48.6 Not Rated Dec 7.9 7.3 1.0 0.9 9.5 1.3 2.3 13.6 25.2Kim Eng Securities KEST.BK 293 15.80 9.53 (39.7) Not Rated Dec 12.5 15.4 2.0 2.1 8.8 2.5 3.9 22.5 45.0Land & Houses LH.BK 2,065 6.35 6.80 7.1 UNDERPERFORM Dec 16.3 15.8 2.4 2.3 10.6 4.8 5.0 5.8 28.5Lox ley LOXL.BK 158 2.44 2.75 12.6 Not Rated Dec 13.6 n.a. 1.1 1.1 1.5 (5.0) (3.2) (5.4) 41.0Major Cineplex MAJO.BK 363 12.70 12.47 (1.8) Not Rated Dec 32.6 21.2 2.0 2.0 7.9 1.3 (5.2) 0.8 47.7MCOT MCOT.BK 619 27.75 31.02 11.8 Not Rated Dec 13.7 12.8 2.6 2.5 10.2 4.8 (2.6) 4.7 19.1Minor MINT.BK 1,226 11.60 14.30 23.3 OUTPERFORM Dec 28.2 24.3 3.4 3.1 6.5 0.6 (2.5) 1.8 16.6Oishi OISH.BK 417 68.50 57.77 (15.7) Not Rated Dec 17.1 n.a. 5.5 4.9 18.6 12.9 (2.1) (0.7) (2.5)Padaeng PDI.BK 164 22.40 34.87 55.7 Not Rated Dec 17.1 10.1 1.1 1.3 2.8 (3.3) (0.9) (7.1) 3.7Poly plex PTL.BK 462 17.80 19.87 11.6 Not Rated Mar n.a. 12.5 n.a. 2.6 14.0 7.3 6.0 25.4 132.7Precious Shipping PSL.BK 617 18.30 27.77 51.8 Not Rated Dec 6.2 18.3 1.1 1.1 10.6 4.7 0.0 (1.6) (0.5)Preuksa Real Estate PS.BK 1,632 22.80 15.50 (32.0) UNDERPERFORM Dec 13.9 14.9 3.9 3.3 25.8 20.3 (4.2) (9.7) 47.1PTT Aromatics & Refinery PTTAR.BK 2,477 25.75 24.00 (6.8) UNDERPERFORM Dec 8.3 12.0 1.3 1.2 5.1 (1.7) 10.0 10.5 1.0PTT Chemical PTTC.BK 5,846 119.50 160.00 33.9 OUTPERFORM Dec 26.4 16.4 1.8 1.7 4.4 (1.7) 16.0 21.3 24.5Quality Hosues QH.BK 699 2.54 3.35 31.9 OUTPERFORM Dec 13.0 10.1 1.7 1.6 5.8 (1.0) 6.7 11.4 30.3Ratchaburi Electricity RATC.BK 1,787 38.00 47.00 23.7 OUTPERFORM Dec 8.2 10.1 1.2 1.2 7.6 1.8 (1.9) 0.7 4.8Regional Containers RCL.BK 386 15.00 21.80 45.3 Not Rated Dec (2.6) 47.9 0.9 0.9 n.a. n.a. (0.7) (1.3) 25.0Robinson Dept. Store ROBI.BK 724 20.10 15.79 (21.4) Not Rated Dec 21.8 15.7 3.3 3.0 5.2 (0.2) (8.6) 3.1 42.6Rojana Industrial Park ROJNA.BK 373 12.10 5.30 (56.2) Not Rated Dec 14.2 15.9 2.0 1.9 6.0 (1.2) (8.3) 15.2 36.7Sahaviriya Steel SSI.BK 757 1.78 1.74 (2.0) Not Rated Dec 17.8 7.1 1.4 1.2 5.5 (1.7) (3.3) 9.2 15.6Samart SAMA.BK 242 7.65 3.64 (52.4) Not Rated Dec 15.9 n.a. 1.8 1.8 4.3 (2.8) (3.2) (2.5) 37.8Samart I-Mobile SIM.BK 282 2.02 0.33 (83.6) Not Rated Dec 74.8 n.a. 3.7 3.3 2.7 (3.6) 0.0 4.7 11.0Siam City Bank SCIB.BK 2,193 32.00 31.50 (1.6) UNDERPERFORM Dec 16.3 18.4 1.6 1.5 6.5 (1.0) (0.8) 0.0 0.0Siam City Cement SCCC.BK 1,716 230.00 218.00 (5.2) UNDERPERFORM Dec 18.0 16.1 3.2 3.1 4.9 (0.5) (0.4) (1.3) 10.0

Share price performanceBt term (%)


* Include the small-cap stocks in HOLT® database with market cap between US$50 mn and US$1.5 bn. For stocks that are Not Rated, I/B/E/S consensus forecast are used. CFROI® is a registered trademark in the United States and other countries (excluding the United Kingdom) of Credit Suisse or its subsidiaries or affiliates. * Companies in bold and italic indicate constituents of Credit Suisse Thailand Small Cap Index

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Cap Price HOLT warranted return Suisse end CFROI SpreadCompany RIC (US$ mn) (Bt) price (Bt) (%) Rating month 2009 2010 2009 2010 (%) (%) 1W 1M 3MSiam Makro MAKR.BK 1,028 132.00 110.95 (15.9) Not Rated Dec 20.8 16.7 3.6 3.5 10.9 5.5 (2.9) 13.8 23.9Sino-Thai E&C STEC.BK 481 12.50 9.00 (28.0) OUTPERFORM Dec 50.2 39.3 3.4 3.2 4.3 (1.9) (3.8) 63.4 121.2Tata Steel (Thailand) TSTH.BK 509 1.92 1.91 (0.8) Not Rated Mar (384.0) 20.2 1.0 1.0 (0.3) (6.7) 3.2 17.1 20.8Thai Airw ay s THAI.BK 2,081 37.75 52.56 39.2 Not Rated Dec 8.7 8.0 1.2 1.0 2.8 (4.9) (5.6) 0.0 59.3Thai Oil TOP.BK 3,210 48.50 54.00 11.3 OUTPERFORM Dec 8.2 14.7 1.5 1.4 8.8 2.8 10.9 10.2 10.2Thai Plastic TPC.BK 514 18.10 30.08 66.2 Not Rated Dec 8.5 8.7 1.2 1.2 5.7 (0.3) 0.0 (1.6) 1.1Thai Stanley Elec. STAN.BK 431 173.50 240.08 38.4 Not Rated Mar n.a. 11.4 n.a. 1.7 7.3 1.9 0.9 1.2 27.1Thai Tap Water TTW.BK 686 5.30 5.80 9.4 OUTPERFORM Dec 13.2 10.4 2.4 2.2 8.9 2.4 (3.6) 1.0 23.8Thai Union Frozen TUF.BK 1,590 55.50 47.33 (14.7) Not Rated Dec 14.6 13.8 3.0 2.6 11.9 5.6 (10.5) 3.7 27.6Thai Vegetable Oil TVO.BK 573 23.90 20.34 (14.9) Not Rated Dec 9.4 12.5 3.4 3.1 19.0 13.1 (1.2) 3.5 40.6Thaicom THCOM.BK 268 7.55 10.40 37.7 OUTPERFORM Dec (17.6) (54.3) 0.5 0.5 (0.3) (7.5) (0.7) 10.2 37.3Thainox INOX.BK 377 1.49 2.33 56.2 Not Rated Dec 29.8 n.a. 1.0 1.0 3.9 (2.1) (2.0) 2.1 0.7Thanachart Capital TCAP.BK 1,535 35.50 33.00 (7.0) NEUTRAL Dec 9.1 10.7 1.4 1.2 11.3 3.4 1.4 14.5 37.9Thoresen Thai TTA.BK 563 24.50 41.13 67.9 Not Rated Sep 2.5 10.2 0.7 0.7 2.6 (3.8) 0.8 0.8 5.2Ticon TICN.BK 294 13.50 15.79 16.9 Not Rated Dec 13.6 11.5 1.8 1.8 11.1 4.1 0.7 11.6 44.4TMB Bank TMB.BK 3,389 2.40 1.80 (24.9) UNDERPERFORM Dec 51.1 30.8 2.2 2.1 0.6 (7.0) (9.8) 15.4 79.1Total Access Comms. DTAC.BK 3,553 46.25 58.00 25.4 OUTPERFORM Dec 16.5 14.0 1.8 1.7 4.3 (1.4) 1.1 1.1 29.4TPI Polene TPIP.BK 812 12.40 20.78 67.6 Not Rated Dec 5.2 13.8 0.5 0.5 3.1 (3.0) (3.9) (4.6) 40.1True Corp TRUE.BK 1,687 7.35 5.10 (30.6) NEUTRAL Dec 39.7 35.3 4.9 4.3 3.8 (3.8) 14.0 24.6 153.4Vinythai VNT.BK 369 9.60 12.88 34.2 Not Rated Dec 11.6 12.0 0.8 0.8 2.3 (3.3) (5.0) 5.5 27.2

Calendarized Calendarized Share price performanceP/E (x) P/B (x) Bt term (%)

* Include the small-cap stocks in HOLT® database with market cap between US$50 mn and US$1.5 bn. For stocks that are Not Rated, I/B/E/S consensus forecast are used. CFROI® is a registered trademark in the United States and other countries (excluding the United Kingdom) of Credit Suisse or its subsidiaries or affiliates. * Companies in bold and italic indicate constituents of Credit Suisse Thailand Small Cap Index.

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Thailand – Screening Relative price performance - top & bottom 10 companies Relative price performance - top & bottom 10 companies Relative price performance - top & bottom 10 companies Price 1W return Price 1M return Price 3M returnCompany RIC (Bt) (%) Company RIC (Bt) (%) Company RIC (Bt) (%)Winners Winners Winners PTT Chemical PTTC.BK 119.50 16.0 Sino-Thai E&C STEC.BK 12.50 63.4 True Corp TRUE.BK 7.35 153.4 True Corp TRUE.BK 7.35 14.0 Amata AMAT.BK 14.40 30.9 Polyplex PTL.BK 17.80 132.7 Thai Oil TOP.BK 48.50 10.9 Home Product Center HMPR.BK 10.20 29.9 Sino-Thai E&C STEC.BK 12.50 121.2 PTT Aromatics & Refinery PTTAR.BK 25.75 10.0 Polyplex PTL.BK 17.80 25.4 Amata AMAT.BK 14.40 100.0 Quality Hosues QH.BK 2.54 6.7 True Corp TRUE.BK 7.35 24.6 TMB Bank TMB.BK 2.40 79.1 Polyplex PTL.BK 17.80 6.0 G Steel GSTE.BK 0.57 23.9 Thai Airways THAI.BK 37.75 59.3 Land & Houses LH.BK 6.35 5.0 Kim Eng Securities KEST.BK 15.80 22.5 Central Pattana CPN.BK 29.25 55.6 Bangkok Chain Hospital KH.BK 5.20 4.8 PTT Chemical PTTC.BK 119.50 21.3 Home Product Center HMPR.BK 10.20 54.5 Kim Eng Securities KEST.BK 15.80 3.9 CH Karnchang CK.BK 8.20 18.8 Asian Property AP.BK 7.10 47.9 Banpu BANP.BK 650.00 3.8 Italian-Thai Dev. ITD.BK 3.74 18.4 Major Cineplex MAJO.BK 12.70 47.7 Losers Losers Losers Amata AMAT.BK 14.40 (11.7) Preuksa Real Estate PS.BK 22.80 (9.7) IRPC IRPC.BK 4.00 (7.4)Delta Electronics DELT.BK 25.75 (11.2) Hana Microelectronics HANA.BK 24.90 (9.5) Oishi OISH.BK 68.50 (2.5)Thai Union Frozen TUF.BK 55.50 (10.5) Delta Electronics DELT.BK 25.75 (8.8) Precious Shipping PSL.BK 18.30 (0.5)TMB Bank TMB.BK 2.40 (9.8) Cal-Comp CCET.BK 3.50 (7.4) Bangkok Dusit Medical BGH.BK 32.00 (9.2) Central Plaza Hotel CENT.BK 5.25 (7.1) CH Karnchang CK.BK 8.20 (8.9) Padaeng PDI.BK 22.40 (7.1) Robinson Dept. Store ROBI.BK 20.10 (8.6) Loxley LOXL.BK 2.44 (5.4) Rojana Industrial Park ROJNA.BK 12.10 (8.3) Khon Kaen Sugar KSL.BK 11.20 (5.1) Home Product Center HMPR.BK 10.20 (7.3) TPI Polene TPIP.BK 12.40 (4.6) BEC World BEC.BK 32.50 (7.1) Charoen Pokphand Foods CPF.BK 24.60 (2.6)

Price-to-earnings - most & least expensive 10 companies Price-to-book - most & least expensive 10 companies CFROI® Spread - top & bottom 10 companies Price 10 P/E Price 10 P/B Price CFROI® SpreadCompany RIC (Bt) (x) Company RIC (Bt) (x) Company RIC (Bt) (%)Winners Winners Winners Electricity Generating EGCO.BK 89.00 7.0 G Steel GSTE.BK 0.57 0.4 Preuksa Real Estate PS.BK 22.80 20.3 Banpu BANP.BK 650.00 7.0 TPI Polene TPIP.BK 12.40 0.5 BEC World BEC.BK 32.50 20.1 Bangchak Petroleum BCP.BK 14.40 7.1 Thaicom THCOM.BK 7.55 0.5 Thai Vegetable Oil TVO.BK 23.90 13.1 Sahaviriya Steel SSI.BK 1.78 7.1 Bangchak Petroleum BCP.BK 14.40 0.6 Oishi OISH.BK 68.50 12.9 Kiatnakin Bank KK.BK 33.50 7.3 Thoresen Thai TTA.BK 24.50 0.7 Dynasty Ceramic DCC.BK 47.00 12.5 AE. Thana Sinsap AEON.BK 32.25 7.3 Airports of Thailand AOT.BK 39.00 0.7 Home Product Center HMPR.BK 10.20 10.2 Hana Microelectronics HANA.BK 24.90 7.9 Cal-Comp CCET.BK 3.50 0.7 Bumrungrad Hospital BH.BK 32.00 9.3 Thai Airways THAI.BK 37.75 8.0 Bangkok Expressway BECL.BK 18.30 0.8 Banpu BANP.BK 650.00 9.2 Bangkok Expressway BECL.BK 18.30 8.3 Regional Containers RCL.BK 15.00 0.9 CP All CPALL.BK 37.00 7.8 Cal-Comp CCET.BK 3.50 8.3 Kiatnakin Bank KK.BK 33.50 0.9 Polyplex PTL.BK 17.80 7.3 Losers Losers Losers Regional Containers RCL.BK 15.00 47.9 BEC World BEC.BK 32.50 8.4 Bank Thai CIMBT.BK 3.94 (8.5)Bank Thai CIMBT.BK 3.94 43.8 CP All CPALL.BK 37.00 7.3 Central Plaza Hotel CENT.BK 5.25 (8.0)Sino-Thai E&C STEC.BK 12.50 39.3 Dynasty Ceramic DCC.BK 47.00 6.8 Thaicom THCOM.BK 7.55 (7.5)True Corp TRUE.BK 7.35 35.3 Bank Thai CIMBT.BK 3.94 6.7 TMB Bank TMB.BK 2.40 (7.0)Central Pattana CPN.BK 29.25 33.8 Home Product Center HMPR.BK 10.20 6.6 Airports of Thailand AOT.BK 39.00 (6.9)TMB Bank TMB.BK 2.40 30.8 Oishi OISH.BK 68.50 4.9 Tata Steel (Thailand) TSTH.BK 1.92 (6.7)Central Plaza Hotel CENT.BK 5.25 30.7 True Corp TRUE.BK 7.35 4.3 Italian-Thai Dev. ITD.BK 3.74 (5.5)Amata AMAT.BK 14.40 28.8 Bumrungrad Hospital BH.BK 32.00 4.0 Loxley LOXL.BK 2.44 (5.0)Home Product Center HMPR.BK 10.20 25.2 Siam Makro MAKR.BK 132.00 3.5 Thai Airways THAI.BK 37.75 (4.9)Minor MINT.BK 11.60 24.3 Preuksa Real Estate PS.BK 22.80 3.3 Bangkok Expressway BECL.BK 18.30 (4.1)


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Companies Mentioned (Price as of 09 Sep 10) 361 Degrees (1361.HK, HK$6.40, NOT RATED) AirAsia (AIRA.KL, RM1.82, OUTPERFORM, TP RM2.05) Allgreen Properties (AGRN.SI, S$1.14, OUTPERFORM, TP S$1.53) Apple Inc. (AAPL, $262.92) Asian Property Development (AP.BK, Bt7.10, OUTPERFORM [V], TP Bt8.60) BEML Ltd (BEML.BO, Rs1206.25, OUTPERFORM, TP Rs1383.53) BGR Energy (BGRE.BO, Rs844.00, NEUTRAL [V], TP Rs939.36) BYD Co Ltd (1211.HK, HK$48.60, UNDERPERFORM [V], TP HK$40.00) China Grand Forestry (0910.HK, HK$0.255, NOT RATED) Chong Hong Construction Co., Ltd (5534.TW, NT$72.20, OUTPERFORM [V], TP NT$72.74) COSCO Corporation (Singapore) Ltd (COSC.SI, S$1.64, UNDERPERFORM [V], TP S$1.20) Cyberlink Corp (5203.TW, NT$131.00, OUTPERFORM, TP NT$163.00) EVA Air (2618.TW, NT$22.05, OUTPERFORM [V], TP NT$28.60) Geely Automobile Holdings Ltd (0175.HK, HK$2.81, UNDERPERFORM [V], TP HK$1.92) Great Eagle Hdg. (0041.HK, HK$22.05, OUTPERFORM [V], TP HK$27.95) Haier Electronics (1169.HK, HK$5.76, NOT RATED) Havells India Ltd. (HVEL.BO, Rs795.00, NEUTRAL [V], TP Rs862.18) Huaku Development Co Ltd (2548.TW, NT$84.20, OUTPERFORM, TP NT$102.00) Hung Poo Real Estate Development Co., LTd (2536.TW, NT$43.50, OUTPERFORM [V], TP NT$51.00) I.T (0999.HK, HK$4.19, NOT RATED) Johnson Electric Hdg. (0179.HK, HK$3.79, OUTPERFORM [V], TP HK$4.40) KEC International Ltd (KECL.BO, Rs522.00, OUTPERFORM [V], TP Rs611.46) Kong Sun (0295.HK, HK$0.33, NOT RATED) L.P.N. Development (LPN.BK, Bt9.90, OUTPERFORM [V], TP Bt12.10) LIG Insurance Co Ltd (002550.KS, W23,000, OUTPERFORM, TP W31,300) Longrun Tea (2898.HK, HK$0.54, NOT RATED) Nanya Technology (2408.TW, NT$19.90, UNDERPERFORM [V], TP NT$18.00) Nine Dragons Paper Holdings Ltd (2689.HK, HK$11.36, UNDERPERFORM [V], TP HK$10.85) North Asia Resources (0061.HK, HK$1.41, NOT RATED) Overseas Union Enterprise (OVES.SI, S$2.90, OUTPERFORM, TP S$3.61) Prince Housing & Development (2511.TW, NT$20.10, OUTPERFORM [V], TP NT$24.20) Punj Lloyd Ltd (PUJL.BO, Rs112.65, UNDERPERFORM [V], TP Rs69.90) Quality Houses (QH.BK, Bt2.54, OUTPERFORM [V], TP Bt3.35) Samsung Securities (016360.KS, W60,500, UNDERPERFORM, TP W47,000) Sinyi Realty Co (9940.TW, NT$52.40, OUTPERFORM, TP NT$66.76) Skyworth Digital (0751.HK, HK$4.75, OUTPERFORM [V], TP HK$7.50) SmarTone Telecom (0315.HK, HK$8.52, UNDERPERFORM, TP HK$7.00) Sunlight REIT (0435.HK, HK$2.29, NOT RATED) Ta Ann Holdings Bhd (TAAN.KL, RM5.51, NEUTRAL [V], TP RM5.30) Taishin Financial Holding (2887.TW, NT$13.25, OUTPERFORM [V], TP NT$16.50) Varitronix International (0710.HK, HK$2.86, OUTPERFORM [V], TP HK$3.75) Voltas Ltd (VOLT.BO, Rs227.55, OUTPERFORM [V], TP Rs285.80) Wing Tai Holdings (WTHS.SI, S$1.69, OUTPERFORM [V], TP S$2.06) Wintek Corp (2384.TW, NT$49.20, OUTPERFORM [V], TP NT$52.00) Zhaojin Mining Industry (1818.HK, HK$20.75) Liping Zhang, an employee of Credit Suisse, is an independent non-executive director of Zhejiang Expressway.

Disclosure Appendix Important Global Disclosures The analysts identified in this report 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. Analysts’ stock ratings are defined as follows: Outperform (O): The stock’s total return is expected to outperform the relevant benchmark* by at least 10-15% (or more, depending on perceived risk) over the next 12 months. Neutral (N): The stock’s total return is expected to be in line with the relevant benchmark* (range of ±10-15%) over the next 12 months. Underperform (U): The stock’s total return is expected to underperform the relevant benchmark* by 10-15% or more over the next 12 months.

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*Relevant benchmark by region: As of 29th May 2009, Australia, New Zealand, U.S. and Canadian ratings are 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**, with Outperforms representing the most attractive, Neutrals the less attractive, and Underperforms the least attractive investment opportunities. Some U.S. and Canadian ratings may fall outside the absolute total return ranges defined above, depending on market conditions and industry factors. For Latin American, Japanese, 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; for European stocks, ratings are based on a stock’s total return relative to the analyst's coverage universe**. For Australian and New Zealand stocks a 22% and a 12% threshold replace the 10-15% level in the Outperform and Underperform stock rating definitions, respectively, subject to analysts’ perceived risk. The 22% and 12% thresholds replace the +10-15% and -10-15% levels in the Neutral stock rating definition, respectively, subject to analysts’ perceived risk. **An analyst's coverage universe consists of all companies covered by the analyst within the relevant sector. 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’ coverage universe weightings are distinct from analysts’ stock ratings and are based on the expected performance of an analyst’s coverage universe* versus the relevant broad market benchmark**: Overweight: Industry expected to outperform the relevant broad market benchmark over the next 12 months. Market Weight: Industry expected to perform in-line with the relevant broad market benchmark over the next 12 months. Underweight: Industry expected to underperform the relevant broad market benchmark over the next 12 months. *An analyst’s coverage universe consists of all companies covered by the analyst within the relevant sector. **The broad market benchmark is based on the expected return of the local market index (e.g., the S&P 500 in the U.S.) over the next 12 months. Credit Suisse’s distribution of stock ratings (and banking clients) is:

Global Ratings Distribution Outperform/Buy* 46% (61% banking clients) Neutral/Hold* 40% (60% banking clients) Underperform/Sell* 12% (51% banking clients) Restricted 2%

*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. Important Regional Disclosures Singapore recipients should contact a Singapore financial adviser for any matters arising from this research report. 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. 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 anytime after that. To the extent this is a report authored in whole or in part by a non-U.S. analyst and is made available in the U.S., the following are important disclosures regarding any non-U.S. analyst contributors: The non-U.S. research analysts listed below (if any) are not registered/qualified as research analysts with FINRA. The non-U.S. research analysts listed below may not be associated persons of CSSU and therefore may not be subject to the NASD Rule 2711 and NYSE Rule 472 restrictions on communications with a subject company, public appearances and trading securities held by a research analyst account. • Kenny Lau, CFA, non-U.S. analyst, is a research analyst employed by Credit Suisse (Hong Kong) Limited. • Adrian Chan, non-U.S. analyst, is a research analyst employed by Credit Suisse (Hong Kong) Limited. • Teddy Oetomo, non-U.S. analyst, is a research analyst employed by PT Credit Suisse Securities Indonesia.

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• Minseok Sinn, non-U.S. analyst, is a research analyst employed by Credit Suisse Securities (Europe) Limited, Seoul Branch. • Su Tye Chua, non-U.S. analyst, is a research analyst employed by Credit Suisse AG, Singapore Branch. • Sidney Yeh, non-U.S. analyst, is a research analyst employed by Credit Suisse AG, Taipei Securities Branch. • Chai Techakumpuch, non-U.S. analyst, is a research analyst employed by Credit Suisse Securities (Thailand) Limited. • Eva Wang, non-U.S. analyst, is a research analyst employed by Credit Suisse (Hong Kong) Limited. • Sunil Tirumalai, non-U.S. analyst, is a research analyst employed by Credit Suisse Securities (India) Private Limited. • Loke Foong Wai, non-U.S. analyst, is a research analyst employed by Credit Suisse Securities (Malaysia) Sdn Bhd.. For Thai listed companies mentioned in this report, the independent 2008 Corporate Governance Report survey results published by the Thai Institute of Directors Association are being disclosed pursuant to the policy of the Office of the Securities and Exchange Commission: Asian Property Development(Very Good), L.P.N. Development(Very Good), Quality Houses(Very Good). 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. Disclaimers continue on next page.

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