KEY STORY. Sector Telecommunications Page outlook: 4G development may exert pressure on near-term earnings growth.

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1 PLEASE CLICK ON THE PAGE NUMBER TO MOVE TO THE RELEVANT PAGE. KEY STORY INDONESIA Sector Poultry Page 1 We initiate coverage on the poultry sector with an OVERWEIGHT rating. Our top picks are CPIN (Target: Rp4,7, 23.5% upside) and MAIN (Target: Rp2,9, 29.5% upside). CHINA Sector Telecommunications Page outlook: 4G development may exert pressure on near-term earnings growth. Results JD.com (JD US/BUY/US$27.32/ Target: US$35.) Page 4 3Q14: Solid results, with mixed outlook for 4Q14. Tingyi (322 HK/HOLD/HK$18.98/Target: HK$19.) Page 7 3Q14: Disappointing performance due to weaker-than-expected beverage sales. INDONESIA Sector Poultry Page 1 We initiate coverage on the poultry sector with an OVERWEIGHT rating. Our top picks are CPIN (Target: Rp4,7, 23.5% upside) and MAIN (Target: Rp2,9, 29.5% upside). MALAYSIA Results Deleum (DLUM MK/BUY/RM1.69/Target: RM2.4) Page 12 3Q14: Results in line with significant yoy improvements in oilfield services and power & machinery divisions. SINGAPORE Sector Property Page 15 Home sales supported by Marina One Residences. THAILAND Results Land And Houses (LH TB/BUY/Bt9.85/Target: Bt12.1) Page 18 3Q14: Results in line with expectation; maintain BUY on laggard play and potential upside from asset divestment. Update IRPC (IRPC TB/HOLD/Bt3.36/Target: Bt3.3) Page 21 Entering a challenging period. PTT PCL (PTT TB/HOLD/Bt388./Target: Bt35.) Page 24 Our top picks in the O&G space are PTTGC and BCP, given their cheap valuations (about 8x 215F PE vs 1.8x for PTT). KEY INDICES Prev Close 1D % 1W % 1M % YTD % DJIA S&P FTSE (1.1) AS (.7) (1.9) CSI (.5) FSSTI (.8) (.4) HSCEI (1.9) (.6) 3.1 (2.4) HSI (1.2) JCI KLCI (.4) (1.2) 1. (3.2) KOSPI (.1) (.7) 2.3 (3.4) Nikkei (3.) SET (.4) TWSE (1.1) (1.8) BDI (1.9) 33.9 (44.5) CPO (RM/mt) 2198 (.6) (1.4).5 (14.6) Nymex Crude 75 (.4) (2.5) (8.8) (23.3) (US$/bbl) Source: Bloomberg TOP PICKS Ticker CP (lcy) TP (lcy) Pot. +/- BUY ( ) Sunac China 1918 HK ICBC 1398 HK Bank Mandiri BMRI IJ 1, , Gamuda GAM MK DBS DBS SP Pacific Radiance PACRA SP Bangkok Bank BBL TB Advanced Info ADVANC SELL UMWH Holdings UMWH MK (1.4) KEY ASSUMPTIONS GDP (% yoy) F US Euro Zone Japan Singapore Malaysia Thailand Indonesia Hong Kong China F 215F Brent (US$/bbl) CPO (US$/mt) BDI 1,219 1,2 1,3 Source: Bloomberg, UOB ETR, UOB Kay Hian CORPORATE EVENTS Venue Begin Close China Healthcare Sector Hong Kong 17 Nov 18 Nov Analyst Presentation GC 1H15 Market Strategy, Milan & Zurich 18 Nov 19 Nov CH Infrastructure Sector Vienna 2 Nov 2 Nov London 21 Nov 25 Nov Dublin 26 Nov 26 Nov Regional 1H15 Strategy Forum Kuala Lumpur 3 Dec 3 Dec 1

2 SECTOR UPDATE Telecommunications China 215 Outlook: 4G Development May Exert Pressure On Near-term Earnings Growth Ytd, China Mobile has made a good start in 4G development, while competitors are still moving slowly as they wait for their FDD-LTE licences. With first-mover advantage, China Mobile will likely excel in the 4G era. However, FDD-LTE licensing is likely to intensify competition and this could exert pressure on all Chinese telcos earnings in 215. Maintain UNDERWEIGHT on the sector. China Mobile remains our top pick. UNDERWEIGHT (Maintained) WHAT S NEW 9M14 review. As the Ministry of Industry and Information Technology (MIIT) issued TD- LTE licences only in Dec 13, China Telecom (CT) and China Unicom (CU) did not make any aggressive preparations to launch 4G services until they were finally allowed to launch FDD-LTE services in 16 major cities via the FDD-LTE/TD-LTE hybrid LTE service trial programme in late-jun 14. Even the MIIT has expanded the number of cities involved in the hybrid LTE trial to 4 in Aug 14. It seems both CT and CU are lagging behind in 4G service rollout and user acquisitions, and their combined 4G user base is likely still below 1m as of Sep 14. On the other hand, China Mobile (CM) has seized the opportunity and aggressively acquired over 4m 4G users in 9M14. VAT reform and handset subsidy cuts create uncertainties. To mitigate the negative earnings impact from the VAT reform, all three telecom operators decided to make changes to their sales and marketing strategies from Jul 14, relying less on handset subsidies and giving out more free usage credit during their promotions. The changes will lead to lower handset sales and lower service revenue, but the telcos will also incur less sales and marketing costs, including handset subsidies. Overall, the change in strategies will help telcos reduce the overall VAT payment, but will also affect their mobile subscription growth. In the first month of implementation, total mobile user net additions in China dropped 1.% mom and 64.6% yoy to 3.65m in Jul 14. The situation remained relatively the same in Aug 14 with a 59.5% yoy drop to 4.27m despite a 25.4% mom rebound due to the positive impact of back-to-school promotions and CT s and CU s increased scope in the hybrid LTE service trial. CU faces the biggest impact on 3G/4G net adds. Looking at the combined impact of 4G promotions and handset subsidy cuts, CM s 3G and 4G user growth rates continue to see a sequential improvement as the availability of low-cost 4G smartphones has made a significant impact in helping the company convert its large pool of 2G users directly into 4G users, pushing CM s monthly user net additions to 11.4m in Sep 14. For CT, the gradual expansion of the hybrid LTE 4G trial helped lead to a steady rebound in total 3G/4G monthly user net additions from an average of.7m in 1H14 to 2.m in Sep 14. On the other hand, CU was the clear loser. Its 3G/4G monthly user net additions dived from an average of 3.m in 1H14 to only 1.1m in Sep 14. ANALYST Victor Yip victor.yip@uobkayhian.com.hk CHINESE TELCOS - 3G/4G USER ADDITIONS (million) Jan 13 Mar 13 May 13 Jul 13 Sep 13 China Mobile - 3G/4G China Telecom - 3G/4G Source: Respective companies, UOB Kay Hian Nov 13 Jan 14 Mar 14 May 14 Jul 14 Sep 14 China Unicom- 3G/4G 2

3 ACTION As user growth rate could make a substantial impact on earnings outlook, particularly when telcos are promoting 4G services to their users, we foresee telcos continuing to adjust their sales and marketing cost strategies to strike a balance between 3G/4G user growth and earnings. Therefore, CT and CU may increase their sales and marketing budgets again after they have formally received the FDD-LTE licences from MIIT, which we expect to happen in mid-15. As a result, CT s and CU s margins and user net addition rates could see some volatility in the coming quarters. On the other hand, we are expecting the rapid growth in 3G/4G user base and rising data service usage to help CM continue to report decent EBITDA improvement in the coming years. Maintain UNDERWEIGHT. Although the sector is trading at cheaper EV/EBITDA vs other telco sectors in Asia, we still maintain our UNDERWEIGHT as we foresee the 4G service launch and policy changes will exert pressure on telecom operators earnings in the medium term. We will change our view when telcos have accumulated a critical mass of 3G/4G users such that they could ride on data monetisation, and if the government makes favourable policy changes to promote the development of the telecom services market. China Mobile (941 HK/BUY/Target: HK$11.) is our top pick in the sector due to its: a) cheap valuation and decent dividend yield, b) first-mover advantage with its leading position in TD-LTE network deployment, and c) premium client base with much higher ARPU among peers. Our target price is based on DCF valuation, assuming 8.9% WACC and a 2.% terminal growth. SHARE PRICE CATALYSTS Licensing of FDD LTE services and acceleration in 4G monthly subscription growth. PEER COMPARISON Company Ticker Rec Price 17 Nov 14 (lcy) Market Cap (US$m) Target Price (lcy) EV/EBITDA (x) PE (x) Dividend Yield (%) F 215F F 215F F 215F China Mobile Ltd 941 HK BUY , China Telecom 728 HK HOLD , China Unicom 762 HK HOLD , Avrage - Chinese Telcos Hutchison Telecom HK 215 HK SELL 3.4 1, HKT Trust 6823 HK BUY 9.6 9, PCCW 8 HK HOLD , Smartone 315 HK HOLD , Average - Hong Kong Telcos M1 Ltd M1 SP BUY , SingTel ST SP BUY , StarHub STH SP HOLD 4.6 5, Average - Singapore Telcos Axiata AXIATA MK HOLD , DiGi.Com DIGI MK BUY , Telekom Malaysia T MK SELL 7.9 7, Average - Malaysia Telcos Samart Corp SAMART TB BUY Thaicom THCOM TB BUY , True Corporation TRUE TB HOLD , n.a n.a n.a Average - Thailand Telcos Indosat ISAT IJ BUY 3,2 1, , n.a n.a n.a...1 PT Telkom TLKM IJ BUY 2,75 22,71.1 3, XL Axiata EXCL IJ HOLD 5,15 3,6.9 6, Average - Indonesia Telcos Average - Overall Source: Bloomberg, UOB Kay Hian 3

4 COMPANY RESULTS JD.com (JD US) 3Q14: Solid Results With Mix Outlook For 4Q14 JD reported solid 3Q14 results with a top line which beat consensus estimate by 1%, while non-gaap net income largely beat ours and consensus estimate. GMV grew 111% in 3Q14 vs. 49% of Alibaba s GMV. The company guided a strong top line for 4Q14, but a weaker margin due to promotion and marketing expense. We are still positive on high GMV growth and the Tencent-JD alliance. Maintain BUY. Target price: US$35.. 3Q14 RESULTS Rmbm Reported UOBKH Consensus Comments Net revenues 29,12 28,694 28,647 Largely in-line, slightly beat consensus estimate Operating profits (47) (363) (699) Slightly lower than our forecast by higherthan-expected R&D costs related to new hiring in mobile and big data development segment Net income (non-gaap) (73) Beat UOBKH and consensus by lowerthan-expected operating costs EPADS (GAAP) (.12) (.5) (.25) Beat UOBKH and consensus EPADS (Non GAAP) (.4) Beat UOBKH and consensus Source: JD.com, UOB Kay Hian RESULTS Top-line revenues delivered strong growth, despite weak seasonality. Net revenues registered at Rmb29b, up 61% yoy and 1% qoq. Despite the third quarter being seasonally weak for top-line and two major promotional events occurring in June and November, JD reported satisfying top-line numbers. Revenue from the direct sale business totalled Rmb27b, while revenue from marketplace and service business registered at Rmb1.6b. BUY (Maintained) Share Price US$27.32 Target Price US$35. Upside +28.1% COMPANY DESCRIPTION JD is leading e-commerce B2C platform in China. STOCK DATA GICS sector Consumer Discretionary Bloomberg ticker: JD US EQUITY Shares issued (m): 1,88.9 Market cap (US$m): 37,348.8 Market cap (US$m): 37, mth avg daily t'over (US$m): 143 Price Performance (%) 52-week high/low US$32.64/US$19. 1mth 3mth 6mth 1yr YTD 14.3 (9.) n.a. n.a. n.a. Major Shareholders % Richard Liu 51 Tencent 18 FY14 NAV/Share (Rmb) FY14 Net Cash/Share (Rmb) 18.8 PRICE CHART GMV maintained robust growth momentum. Gross Merchandise Value (GMV) totalled Rmb67.3b, up 111% yoy and 7% qoq. The robust growth was driven by healthy growth in user base. Active users in 3Q14 were 46m, up 19% yoy and 21% qoq. GMV from direct sales delivered healthy growth of 63% yoy, while GMV from marketplace grew strongly at 188% yoy. As of 3Q14, direct sales and marketplace accounted for 6% and 4% of GMV respectively. KEY FINANCIALS Year to 31 Dec (Rmbm) F 215F 216F Net turnover 41,381 69,34 113,15 171, ,678 EBITDA (1,765) (286) (4,52) Operating profit (1,951) (579) (5,394) (546) (36) Net profit (rep./act.) (3,317) (2,485) (12,48) 685 1,282 Net profit (adj.) (1,586) ,72 2,419 EPS (Fen) (14.1) PE (x) n.m. 1, , EV/EBITDA (x) n.m. n.m. n.m Net margin (%) (8.) (3.6) (11.).4.5 Net debt/(cash) to equity (%) (98.6) (16.9) (1.6) (113.2) (128.) ROE (%) (53.8) (31.8) (49.1) Consensus net profit - - (1,487) (465) 1,555 UOBKH/Consensus (x) - - n.m. n.m Source: JD.com, Bloomberg, UOB Kay Hian n.m. : not meaningful; negative P/E, EV/EBITDA reflected as "n.m." (lcy) JD.COM INC-ADR JD.COM INC-ADR/INDU INDEX Volume (m) May 14 Jun 14 Jul 14 Aug 14 Sep 14 Oct 14 Source: Bloomberg ANALYSTS Greater China Research Team ext.88 research@uobkayhian.com (%)

5 Non-GAAP EPADS was Rmb.27, vs our estimate of Rmb.14 and consensus estimate of a net loss of Rmb.4 per EPADS. Net loss on GAAP basis was Rmb164m, shrinking from a loss of Rmb665m in 3Q13. The net loss was largely due to non-gaap expenses of Rmb535m, which includes both share-based compensation and amortisation of intangibles related to the Tencent-JD deal. Non-GAAP net margin was 1.3%, vs.8% in 3Q13. Non-GAAP 3Q14 FD EPADS was Rmb.27, up 62% yoy. From an operating costs perspective, non-gaap fulfilment, marketing, technology and G&A costs accounted for 5.9%, 2.6%, 1.2% and.9% of total revenue in 3Q14, compared with 6.9%, 3.7%, 1.4% and 1.1% in 2Q14 respectively. The company tactically reduced operating expenses in 3Q14 under the weak seasonal factor and shifted resources for the fourth quarter. STOCK IMPACT Tencent-JD alliance showing effects. We believe the Tencent-JD alliance has started to show hints of effects. In 3Q14, mobile orders accounted for 3% of total orders, up from 24% in 2Q14. Especially on November 11, orders through Weixin and Mobile QQ were 2 times as much as the October average. The qoq user base growth acceleration from 14% in 2Q14 to 21% in 3Q14 also reflects progress from the Tencent-JD alliance. GMV maintains high growth. During the recent November 11 online shopping carnival, JD achieved remarkable sales. As reported by the company, GMV on November 11 more than doubled as compared with the same period last year. Over 4% of orders were from mobile devices, 8 times more than mobile transactions from last year. Apparel had the largest number of orders that day, up 25% yoy. Apparel shoes became the fastest growing category for the company. We believe GMV growth is the foundation of JD s longterm profitability, and the company will focus on this in short term. 4Q14 guidance with strong top-line, but weaker margin. The company guided 4Q14 revenue of Rmb32b-33b, which represented 59%-64% yoy growth. The company also guided a weaker margin in 4Q14 due to the online shopping carnival promotion and marketing campaign. Lower-tier penetration strategy. In 3Q14, JD strengthened its logistics network by adding 19 cities for same-day delivery and 92 cities with next-day delivery. JD focused on cities and counties in 2Q14 and 3Q14. Going forward, JD will push into villages around the cities. And in 215, JD will implement its pilot model to allow delivery employees to build a JD delivery station by a franchise model. We believe the advantage in logistics, with regard to service and cost efficiency, will also aid JD in gaining market share in such a competitive market. EARNINGS REVISION/RISK We keep our full-year forecast unchanged. VALUATION/RECOMMENDATION Maintain BUY with target price of US$35.. We apply the DCF method for our valuation of JD.com, as the company has a strong cash cycle. SHARE PRICE CATALYST GMV growth in 4Q14. Progress of the Tencent-JD alliance. 5

6 PROFIT & LOSS BALANCE SHEET Year to 31 Dec (Rmbm) F 215F 216F Year to 31 Dec (Rmbm) F 215F 216F Net turnover 69, , , ,677.5 Fixed assets 2,86.9 7,9.3 7, ,422.2 EBITDA (286.) (4,51.8) Other LT assets Deprec. & amort Cash/ST investment 1, , , ,323.9 EBIT (579.2) (5,394.4) (546.1) (36.4) Other current assets 11, , , ,1.4 Total other non-operating income Total assets 26,9.8 69, ,3.8 11,328.9 Net interest income/(expense) , ,621.6 ST debt Pre-tax profit (5.2) (4,524.7) ,79.1 Other current liabilities 15, , , ,775.8 Tax (228.5) (427.3) LT debt.... Preferred dividends.... Other LT liabilities.... Net profit (2,485.1) (12,479.8) ,281.8 Shareholders' equity 9, , , ,62.2 Net profit (adj.) ,72.4 2,418.6 Minority interest.... Total liabilities & equity 26,9.8 69, ,3.8 11,328.9 CASH FLOW KEY METRICS Year to 31 Dec (Rmbm) F 215F 216F Year to 31 Dec (%) F 215F 216F Operating 3,569.8 (3,494.8) 8, ,531.3 Profitability Pre-tax profit (5.) (12,482.4) ,79.1 EBITDA margin (.4) (4.).2.4 Tax (228.5) (427.3) Pre-tax margin (.1) (4.).5.7 Deprec. & amort Net margin (3.6) (11.).4.5 Associates.... ROA (11.3) (26.2) Working capital changes 3,11.6 3, , ,231. ROE (31.8) (49.1) Non-cash items , ,75. Other operating cashflows.... Growth Investing (2,671.1) (5,1.) (1,11.) (1,11.) Turnover Capex (growth) (439.9) (3,5.) (1,.) (1,.) EBITDA n.a. n.a. n.a Capex (maintenance) (852.2) (1,51.) (11.) (11.) Pre-tax profit n.a. n.a. n.a. 87. Investments (35.1)... Net profit n.a. n.a. n.a. 87. Proceeds from sale of assets Net profit (adj.) n.a Others (1,345.)... EPS n.a. (21.9) Financing 2, , Dividend payments.... Leverage Issue of shares 2,72.1 4, Debt to total capital Proceeds from borrowings Debt to equity Loan repayment (865.1)... Net debt/(cash) to equity (16.9) (1.6) (113.2) (128.) Others/interest paid.... Net cash inflow (outflow) 3, ,13.2 7,77.1 9,421.3 Beginning cash & cash equivalent 7, , , ,92.6 Changes due to forex impact (58.9)... Ending cash & cash equivalent 1, , , ,

7 COMPANY RESULTS Tingyi (322 HK) 3Q14: Disappointing Performance Due To Weaker-than-expected Beverage Sales Tingyi reported disappointing 3Q14 results with net profit down 14.1% yoy to US$159.7m. The key discrepancy was the double-digit drop in RTD teas, juice drinks and bottled water sales due to a high base and a cooler summer. Despite phasing out sausage promotions and raising ASPs amid a slowing noodles market, Tingyi s noodles sales fell just 1.8% yoy to US$1.13b. We cut EPS estimates by %. Maintain HOLD. Target price: HK$19.. Entry price: HK$16.. 3Q14 RESULTS Year to 31 Dec (US$m) 3Q14 3Q13 yoy % chg Remarks Revenues 2,954 3, Driven by the 19.9% decline in beverage sales Gross profit 947 1, Lower utilisation rate for beverage production more than offset the benefits of lower raw material prices Operating profit Impacted by costs in integrating the Pepsi business Net profit Source: Tingyi, UOB Kay Hian RESULTS Net profit down 14.1% yoy on weaker beverage performance. Tingyi s 3Q14 net profit fell 14.1% yoy to US$159.7m, bringing 9M14 net profit to US$391.6m, up 2.4% yoy and represents just 79% and 76% of our and consensus full-year estimates respectively. The weaker-than-expected performance was driven by: a) a 1.8% yoy decline in instant noodles sales to US$1.13b, b) a 2.% yoy drop in beverage sales to just US$1.73b, c) gross margin contraction of.5ppt yoy to 32.1% due to weaker beverage contribution, and d) beverage EBIT margin contraction of 3.1ppt yoy to just 6.6%. All beverage products saw slowdown in sales. Beverage sales fell 2.% yoy to just US$1.73b amid a tough operating environment that was further exacerbated by cooler weather conditions. RTD teas, juice drinks and bottled water sales fell 16.8% yoy, 39.4% yoy and 25.9% yoy respectively. Additional costs incurred with the integration of the Pepsi business led to EBIT margin contracting 3.1ppt yoy, resulting in beverage net profit of just US$37.4m, down 53.3% yoy. Instant noodles gross margin stabilised. Instant noodles sales fell 1.8% yoy to US$1.13b in 3Q14, better than the market decline of 4.4% yoy based on AC Nielsen data. During the period, Tingyi gradually phased out the sausage promotions and raised bowl noodles ASPs, leading to a.4ppt yoy improvement in gross margin to 29.8%. With better control over distribution costs, noodles net profit grew 1.1% yoy to US$119.2m. KEY FINANCIALS Year to 31 Dec (US$m) F 215F 216F Net turnover 9,212 1,941 1,667 11,426 12,422 EBITDA 1,242 1,189 1,349 1,578 1,86 Operating profit ,85 1,277 Net profit (rep./act.) Net profit (adj.) EPS (cent) PE (x) P/B (x) EV/EBITDA (x) Dividend yield (%) Net margin (%) Net debt/(cash) to equity (%) Interest cover (x) ROE (%) Consensus net profit UOBKH/Consensus (x) Source: Tingyi, Bloomberg, UOB Kay Hian HOLD (Maintained) Share Price HK$18.98 Target Price HK$19. Upside +.1% (Previous TP HK$2.) COMPANY DESCRIPTION Headquartered in Tianjin, Tingyi is the largest noodle and beverage maker in China STOCK DATA GICS sector Consumer Staples Bloomberg ticker: 322 HK Shares issued (m): 5,63.7 Market cap (HK$m): 16,358.2 Market cap (US$m): 13, mth avg daily t'over (US$m): 17.2 Price Performance (%) 52-week high/low HK$23.2/HK$ mth 3mth 6mth 1yr YTD (3.1) (17.3) (13.1) (12.9) (15.3) Major Shareholders % Ting Hsin Ssanyo Foods FY14 NAV/Share (US$).56 FY14 Net Debt/Share (US$).13 PRICE CHART (lcy) Volume (m) TINGYI (CAYMAN ISLN) HLDG CO TINGYI (CAYMAN ISLN) HLDG CO/HSI INDEX (%) 11 Nov 13 Jan 14 Mar 14 May 14 Jul 14 Sep 14 Nov 14 Source: Bloomberg ANALYSTS Renee Tai renee.tai@uobkayhian.com.hk Herbert Chan herbert.chan@uobkayhian.com.hk

8 ESSENTIALS Resilient market share in all product categories. Despite weaker sales, Tingyi managed to deliver impressive market share gains in RTD teas, bottled water and juice drinks. While we are disappointed with the slower sales performances, particularly in bottled water (-25.9% yoy) and juice drinks (-39.4% yoy), we think the slowdown of the beverage market has had a more significant impact on Tingyi s smaller rivals, which enabled Tingyi to secure more market share in a difficult environment. Higher integrating expenses in 3Q14 dragged down beverage profits. After scaling back its employees as part of the integration process of the Pepsi bottling business in 1H14, the company also racked up additional expenses related to the integration process. Without disclosing details, management highlighted the entire integration process which started in Apr 14 will be completed in two years time. Since it has also been able to lower procurement costs for Pepsi products as it leveraged on the existing network under Tingyi, the Pepsi operations have remained profitable despite the higher costs incurred in 3Q14. SALES BY PRODUCT Source: Tingyi, UOB Kay Hian INSTANT NOODLE MARKET SHARE OF TINGYI AND UPC (BY VOLUME) EARNINGS REVISION/RISK We cut our sales assumptions for beverages in view of the substantially weaker performance in 3Q14 which should have been the peak season. As a result, our EPS estimates are lowered by 7.1%, 7.5% and 8.4% for respectively. EARNINGS REVISION Year end 31 Dec (US$m) New Old chg New Old chg New Old chg Instant noodles sales 4,341 4, ,62 4, ,88 4, Juice sales 1,176 1, ,188 1, ,296 1, Bottled water 1,58 1, ,229 1, ,427 2, Total sales 1,667 11, ,426 12, ,422 13, Gross profit 3,261 3, ,655 3, ,1 4, Operating expenses 2,585 2, ,765 2, ,936 3, Net profit Source: UOB Kay Hian Source: UOB Kay Hian, AC Nielson RTD TEA MARKET SHARE OF TINGYI AND UPC (BY VOLUME) Key risks to our earnings forecasts include raw material cost fluctuations, prolonged price war and competition from international brands. VALUATION/RECOMMENDATION Maintain HOLD. In view of the increasing competition in beverages and 4Q14 being a slower season for drinks, we do not expect near-term improvement to support share price. That said, we think that with more new products being launched in 215, we expect performance to gradually improve. That said, 3Q14 market share gains confirm our view that Tingyi s significantly larger scale helps to alleviate the impact of slowing markets while it is becoming even more difficult and expensive for rivals to replicate Tingyi s extensive network. Maintain HOLD. Our target price is lowered slightly from HK$2. to HK$19., still pegged to 23x 215F PE. We think this is justified in view of an expected EPS CAGR of 23% over Entry price is HK$16.. Source: UOB Kay Hian, AC Nielson RTD TEA MARKET SHARE OF TINGYI AND UPC (BY VALUE) Key share price catalysts are quarterly results and a fall in key raw material costs. Source: UOB Kay Hian, AC Nielson 8

9 PROFIT & LOSS BALANCE SHEET Year to 31 Dec (US$m) F 215F 216F Year to 31 Dec (US$m) F 215F 216F Net turnover 1,941. 1, , ,421.6 Fixed assets 5, , , ,638.5 EBITDA 1, , , ,86.3 Other LT assets Deprec. & amort Cash/ST investment 1, ,36.9 EBIT ,84.5 1,277.2 Other current assets 1, , ,21.2 1,32.3 Total other non-operating income Total assets 8, , , ,56.9 Associate contributions ST debt Net interest income/(expense) (37.4) (33.4) (33.4) (33.4) Other current liabilities 2, , , ,541.4 Pre-tax profit ,7.6 1,266.2 LT debt Tax (228.7) (275.8) (338.3) (399.8) Other LT liabilities Minorities (85.8) (137.2) (144.1) (172.9) Shareholders' equity 2,88.3 3, , ,892. Net profit Minority interest 1,46.1 1, , ,5.3 Net profit (adj.) Total liabilities & equity 8, , , ,56.9 CASH FLOW KEY METRICS Year to 31 Dec (US$m) F 215F 216F Year to 31 Dec (%) F 215F 216F Operating 1, , ,48.1 Profitability Pre-tax profit ,7.6 1,265.2 EBITDA margin Tax (228.7) (275.8) (338.3) (399.8) Pre-tax margin Deprec. & amort Net margin Associates ROA Working capital changes (27.4) ROE Non-cash items Other operating cashflows (2.) Growth Investing (791.1) (924.8) (991.5) (946.6) Turnover 18.8 (2.5) Capex (growth) (852.) (853.3) (914.1) (869.5) EBITDA (4.3) Capex (maintenance).... Pre-tax profit (13.2) Investments.... Net profit (1.9) Proceeds from sale of assets.... Net profit (adj.) (1.9) Others 61. (71.4) (77.4) (77.1) EPS (1.9) Financing (34.4) (566.3) (235.5) (294.1) Dividend payments (18.1) (24.8) (229.9) (294.1) Leverage Issue of shares.... Debt to total capital Proceeds from borrowings.... Debt to equity Loan repayment.... Net debt/(cash) to equity Others/interest paid (361.5) (5.6). Interest cover (x) Net cash inflow (outflow) (73.6) Beginning cash & cash equivalent , Changes due to forex impact Ending cash & cash equivalent 1, ,36.9 9

10 INITIATE COVERAGE Poultry - Indonesia Rapid Growth Propelled By A Rising Middle Class We initiate coverage on the poultry sector with an OVERWEIGHT rating. We forecast top-line and net profit CAGR of 14.2% and 18.9% respectively for In 215, we expect the net profit to grow 45% yoy on the back of a decline in raw material prices and the low base in 214. We initiate coverage on CPIN (BUY/Target: Rp4,7, 23.5% upside), MAIN (BUY/Target: Rp2,9, 29.5% upside) and JPFA (HOLD/Target: Rp1,15, 6.5% upside). CPIN is the market leader and the most profitable, while MAIN enjoys above-industry top-line and net profit growth. Poultry sector grows faster than consumer sector. Indonesia s top three integrated poultry companies have grown faster than the consumer sector in the past five years. Their total revenue grew at a 13.2% CAGR in vs 12.4% CAGR for Indonesia s consumer index, JAKCONS. Net profit grew at a 42.7% CAGR in vs JAKCONS 19.2%. Top-line CAGR accelerated to 18.2% in vs JAKCONS 13.6%. In addition, Indonesia s chicken consumption per capita grew at a 12.9% CAGR in 28-13, faster than GDP per capita CAGR of 1%. Decline in raw material prices to lead to earnings recovery in 1H15. We like the animal feed segment as it remains the main source of income for the three poultry companies. We forecast the feed segment to contribute about 75% of Charoen Pokphand s (CPIN) total revenue, 42% of Japfa Comfeed International s (JPFA) and 71% of Malindo Feedmill s (MAIN) in 215. Given that nearly 7% of raw materials are imported, a stable currency and softer commodity prices are favourable to the poultry sector. Raw material costs account for about 9% of total direct cost of feed. Corn price plunged 27% to Rp1.9m/tonne (US$163) in Sep 14 from the Apr 14 high of Rp2.5m (US$222). Soybean meal price declined 23% to Rp4.9m/tonne (US$49) in Sep 14 from Rp6.1m (US$534). We view the lower raw material costs could be reflected from 1Q15 results onwards. Oligopolistic market wields pricing power. The poultry industry, especially the feed segment, has strong pricing power in Indonesia. Despite the recent input cost decline, channel checks indicate that feed ASP has not fallen. The four major players control about 7% of an oligopolistic market. Also, poultry is the main source of protein (66% of meat consumption) for most Indonesians, who are predominantly Muslims. This limits the number of meat substitutes available. Moreover, chicken is the most affordable source of animal protein, the second cheapest after egg, compared with fish and beef. Given the relatively low chicken consumption per capita, we believe the poultry sector offers strong growth prospects in Indonesia. Direct exposure to fast-growing consumer sector and a rising middle class. Aside from the feed segment, we like the processed chicken segment. The rise of the middle class, which is seeing income growth, and the need for convenient chicken products are likely to drive strong demand for value-added processed chicken products. Another major factor is the development of the modern retail and food services. Indonesian consumers are increasingly favouring products that are easily accessible at clean supermarket outlets and chicken chain Quick Serve Restaurant (QSR). CPIN s processed chicken segment grew at a 2% CAGR in with a gross margin of about 3%. Initiate coverage with OVERWEIGHT rating. Our top picks are CPIN and MAIN. We have a HOLD on JPFA due to its lower profitability. OVERWEIGHT PRICE CHARTS (lcy) 5, 4,5 4, 3,5 3, 2,5 2, Volume (m ) CHAROEN POKPHAND INDONESI PT CHAROEN POKPHAND INDONESI PT/ JCI INDEX Nov 13 Jan 14 Mar 14 May 14 Jul 14 Sep 14 Nov 14 (lcy) 3,5 3, 2,5 2, 1,5 1, (lcy) 5, 4,5 4, 3,5 3, 2,5 2, 1,5 1, Volume (m) JAPFA COMFEED INDONES-TBK PT JAPFA COMFEED INDONES-TBK PT/ JCI INDEX (%) Nov 13 Jan 14 Mar 14 May 14 Jul 14 Sep 14 Nov 14 Volume (m ) MALINDO FEEDMILL TBK PT MALINDO FEEDMILL TBK PT/JCI INDEX Nov 13 Jan 14 Mar 14 May 14 Jul 14 Sep 14 Nov 14 Source: Bloomberg ANALYST Franky Kumendong frankykumendong@uobkayhian.com (%) (%) SECTOR COMPARISON Share Target Market Net Debt Company Rating Price Price Cap PE (x) P/B (x) EV/EBITDA (x) ROE (%) Debt/Equity (Cash)/Eq. (Rp) (Rp) (US$m) 214F 215F 214F 215F 214F 215F 214F 215F (%) (%) CPIN BUY 3,85 4,7 5, JPFA HOLD 1,8 1, MAIN BUY 2,24 2, Average Source: Bloomberg, UOB Kay Hian Refer to to last last page for for important disclosures. 1

11 POULTRY REVENUE GROWTH POULTRY NET PROFIT GROWTH (Rpt) (%) 13.2% CAGR % CAGR F F 215F 216F (Rpt) % CAGR % CAGR F 33.8 (5.1) 25.2 (15.4) (17.5) F 215F 216F (%) CPIN (LHS) JPFA (LHS) MAIN (LHS) Grow th (RHS) CPIN (LHS) JPFA (LHS) MAIN (LHS) Growth (RHS) Source: Bloomberg, UOB Kay Hian CORN PRICE (US$/tonne) Jan 7 Aug 7 Mar Oct 8 8 May Dec Jul Corn US$/tonne (LHS) Source: Index Mundi, UOB Kay Hian Feb Sep % (Rpm/tonne) 3.5 Apr Nov Jun Jan Aug Corn Rpm/tonne (RHS) Source: Bloomberg, UOB Kay Hian SOYBEAN MEAL PRICE (US$/tonne) Jan 7 Aug 7 Mar 8 Oct 8 May 9 Dec 9 Jul 1 Soybean meal US$/tonne (LHS) Source: Index Mundi, UOB Kay Hian Feb 11 Sep 11 Apr 12 Nov 12 Jun 13-23% (Rpm/tonne) 7. Jan 14 Aug Soybean meal Rpm/tonne (RHS) - FEED MARKET SHARE (213) DOC MARKET SHARE (213) Others Others 26% CPIN 21% CPIN 36% 35% SIPD 5% MAIN 6% Cheil Jeddang 8% JPFA 19% SIPD 5% Wonokoy o 6% MAIN 7% JPFA 26% Source: Respective companies, UOB Kay Hian Source: Respective companies, UOB Kay Hian 11

12 COMPANY RESULTS Deleum (DLUM MK) 3Q14: Results In Line. Expecting A Stronger 215. Deleum reported 9M14 net profit of RM43m, or 75% of our full-year forecast. The company has generally seen improvements across divisions. Moving into 215, the full-year contribution from the Pan Malaysia Slickline contract is expected to support Deleum s earnings growth. Deleum is one of the most resilient companies in our O&G universe as it has a large order backlog and the services it provides are mainly operating expenses for oil producers. Maintain BUY. Target price: RM2.4. 3Q14 RESULTS Year to 31 3Q14 qoq yoy YTD FY14 yoy Dec (RMm) (RMm) %chg %chg (RMm) %chg Revenue Power & Machinery Oilfield Services MRO* EBITDA EBIT Finance Cost (1.3) (2.5) Associates PBT Tax (8.1) (17.4) 29.8 MI (4.5) (9.9) 41. PATAMI Margins (%) +/- ppt +/- ppt EBIT PBT Net profit * MRO refers to maintenance, repair and overhaul Source: Deleum, UOB Kay Hian RESULTS In line with expectation. Deleum reported a 3Q14 net profit of RM16.8m (+5.6% qoq, +17.3% yoy) and 9M14 net profit of RM42.5m (+21.5% yoy). The results accounted for 74.5% of our and consensus full-year estimates. On a yoy basis, the significant improvement in the oilfield services segment was largely due to the improvement from slickline activities attributed to the Pan Malaysia Slickline Contracts secured in 3Q13. Meanwhile, the higher revenue contribution from the power & machinery segment was due to a Gas Turbine retrofit project that was secured in 4Q14. KEY FINANCIALS Year to 31 Dec (RMm) F 215F 216F Net turnover EBITDA Operating profit Net profit (rep./act.) Net profit (adj.) EPS (sen) PE (x) P/B (x) EV/EBITDA (x) Dividend yield (%) Net margin (%) Net debt/(cash) to equity (%) (28.6) (18.) (11.9) (7.4) (4.4) Interest cover (x) ROE (%) Consensus net profit UOBKH/Consensus (x) Source: Deleum, Bloomberg, UOB Kay Hian n.m. : not meaningful; negative P/E, EV/EBITDA reflected as "n.m." BUY (Maintained) Share Price RM1.69 Target Price RM2.4 Upside +41.9% COMPANY DESCRIPTION Deleum provides a diverse range of specialised supporting products and services to the O&G industry STOCK DATA GICS sector Energy Bloomberg ticker: DLUM MK Shares issued (m): 4. Market cap (RMm): 676. Market cap (US$m): mth avg daily t'over (US$m):.3 Price Performance (%) 52-week high/low RM2.59/RM1.51 1mth 3mth 6mth 1yr YTD (12.4) (26.8) (28.5) (1.2) 2.4 Major Shareholders % Lantas Mutiara 2.4 Hartapac 12. FY14 NAV/Share (RM).68 FY14 Net Cash/Share (RM).8 PRICE CHART (lcy) DELEUM BERHAD DELEUM BERHAD/FBMKLCI INDEX Volume (m) (%) 18 Nov 13 Jan 14 Mar 14 May 14 Jul 14 Sep 14 Nov 14 Source: Bloomberg ANALYST Danny Chan Tzu Zhung dannychan@uobkayhian.com

13 On a qoq basis, the slightly lower oilfield service revenue was due to lower slickline activities but offest by higher chemical treatment related activities. The 22% improvement in revenue for the power & machinery segment was mainly due to more demand for retrofit projects. REVENUE AND NET PROFIT GROWTH Margin-wise, the overall yoy margins were lower in 3Q14 due to a one-off RM7.7m commision received in the corresponding period, last year. On a quarterly basis, margins generally improved. The slightly lower net profit margin was due to 3Q14 s 27.5% effiective tax rate which was higher than 3Q13 s 23.9%. STOCK IMPACT Full earnings impact from Pan Malaysia Sickline contract in 215. We understand that Deleum s 46 units of slickline that cater to Pan Malaysia Slickline contract are mostly installed and on track to be fully mobilised by the year end. As such, this 5-year Pan Malaysia Slickline contract will have a full-year impact in 215. We note that the earnings visibility from this division is quite certain as 8% of the slicklines owned are units dedicated to the contract and only 2% of the remaining units are on-call units. RM4b orderbook to sustain earnings growth over the next six years. Deleum s orderbook remains solid at RM4.b. Out of these bookings, the key contracts included the long-term service agreements for gas turbines (>RM2b) and the provision of slickline equipment and services (RM5m-7m). These contracts fuel our top line and bottom line growth assumptions for Deleum could further enhance its domestic market share in the slickline business. Deleum currently owns about 54% of domestic market share in providing sickline equipment and services for Petronas and domestic PSC operators. We understand that Deleum could still further enhance its market share as some PSC operators, who did not participate in the previous joint tender exercise, are currently in negotiation with Deleum for its services. We did not factor in any additional earnings from this but assuming if another 8-1 units are procured, Deleum s top line could grow by RM2m-3m annually for the next five years. Source: Deleum REVENUE ASSUMPTION BY BUSINESS DIVISION (RM m) FY14F FY15F Power and Machinery Oilfield Services Maintenance, repair and overhaul Total Source: Deleum DIVIDEND PROJECTIONS Estimating 4.6 sen dividend in 4Q14. Deleum did not declare any dividends during this quarter but we are forecasting a 4.6 sen dividend for the next quarter, based on its dividend policy of a 5% payout ratio. One of the most resilient companies within our O&G universe. Although we believe that the depressed oil prices will affect local O&G activities to a certain extent, we do not expect these developments will materially affect Deleum as it is one of the most resilient companies in our O&G universe. It has a large order backlog that provides relatively longterm earnings visibility. More importantly, the O&G services Deleum provides, such as gas turbine maintenance and well management/ intervention services for existing oilfields are mainly operating expenses (opex) for oil producers. EARNINGS REVISION/RISK No changes to earnings forecasts. VALUATION/RECOMMENDATION Maintain BUY with an unchanged target price of RM2.4. Our target price is pegged to 12x 216F PE. The company offers a decent F net profit CAGR of 17.3% coupled with respectable dividend yields of 4.2%/5.%/5.9% in 214F/215F/216F. SHARE PRICE CATALYST Securing new oilfield services contracts in regional markets (Indonesia, Brunei or Vietnam), delivering stronger-than-expected margins on existing contracts and successfully launching its asset integrated solutions to clients, resulting in a new revenue stream. Source: Deleum SNAPSHOT OF ORDERBOOK Project Expiry year Provision of slickline equipment & services 223 Long term service agreement for gas turbine 223 Supply of gas turbine packages Supply & services for casing centralizer 219 equipment Provision of integrated wellhead maintenance 218 services Thermo-chemical solid deposition treatment 218 technology Provision of well control services 217 Provision of multiphase flowmeter operations, 216 maintenance & support services Provision of managed pressure drilling 216 equipment & services Supply of sand detector and monitoring systems 216 Source: Deleum 13

14 PROFIT & LOSS Year to 31 Dec (RMm) F 215F 216F Net turnover EBITDA Deprec. & amort EBIT Associate contributions Net interest income/(expense) (2) (2) (1) (1) Pre-tax profit Tax (17) (19) (22) (25) Minorities (9) (9) (9) (9) Net profit Net profit (adj.) BALANCE SHEET Year to 31 Dec (RMm) F 215F 216F Fixed assets Other LT assets Cash/ST investment Other current assets Total assets ST debt Other current liabilities LT debt Other LT liabilities Shareholders' equity Minority interest Total liabilities & equity CASH FLOW Year to 31 Dec (RMm) F 215F 216F Operating Other operating cashflows Investing (27) (25) (25) (25) Capex (maintenance) (47) (35) (35) (35) Others Financing (25) (43) (48) (54) Dividend payments (24) (28) (34) (4) Proceeds from borrowings Loan repayment (6) (1) (1) (1) Others/interest paid (11) (9) (9) (9) Net cash inflow (outflow) (7) (16) (15) (13) Beginning cash & cash equivalent Changes due to forex impact Ending cash & cash equivalent KEY METRICS Year to 31 Dec (%) F 215F 216F Profitability EBITDA margin Pre-tax margin Net margin ROA ROE Growth Turnover EBITDA Pre-tax profit Net profit Net profit (adj.) EPS Leverage Debt to total capital Debt to equity Net debt/(cash) to equity (18.) (11.9) (7.4) (4.4) Interest cover (x)

15 SECTOR UPDATE Property Singapore Home Sales Supported By Marina One Residences Home sales continued to rise, up 18% mom in October on the back of the launch of Marina One Residences, although overall sales remained subdued while momentum is expected to slow towards year-end. We believe the market has overdiscounted the negative prospects for the residential segment. We expect property prices to trend in line with GDP growth after a healthy 5-1% correction. Maintain OVERWEIGHT with Keppel Land, CapitaLand and Wing Tai as our top picks. WHAT S NEW Urban Redevelopment Authority s (URA) monthly developer sales for October indicate that 765 units (+18.1% mom, -3.7% yoy) were sold, excluding executive condominiums (EC), compared with a launch of 649 units (+26.3% mom, -42.2% yoy). Including ECs, 855 units were sold (+2.9% mom, -31.1% yoy). For 1M14, 6,882 residential units were sold (-5% yoy). ACTION Home sales in October recovered on the back of interest in Marina One Residences, although overall sales remained subdued as property measures continued to dampen demand. However, we believe the market has over-discounted the negative prospects for the residential sector, pricing in a 3-4% correction in prices. We expect property prices to trend in line with GDP growth after a healthy 5-1% correction. We prefer deep value and diversified developers, with Keppel Land, Wing Tai and CapitaLand as our picks. ESSENTIALS Developer sales supported by Marina One Residences (334 units, S$2,228psf) which accounted for 44% of the total units sold in October, bringing the high-end segment to account for 49.8% of total units sold. The mass-market segment accounted for 34.1% of total units sold, boosted by Coco Palms in Pasir Ris Grove (34 units, S$1,39psf) and Lakeville in Jurong Lake, while the mid-tier segment accounted for 16.1% of total units sold. City Developments sold the most number of units (62) among the developers under our coverage, accounting for 8.7% of total units sold during October. This was propelled by sales at Coco Palms, Commonwealth Towers and Buangkok. Keppel Land moved 25 units (3.3% share), driven by the sales at The Glades and Highline Residences. Wing Tai sold 18 units (2.4% share), supported by The Crest. For other developers within our coverage, the unit share of total units sold remained below 2%. Upcoming launches include the freehold Marine Blue by CapitaLand (124 units) at Marine Parade, Tree Residences (25 units) by Sustained Land and MCC Land, Sophia Hills (493 units) by Hoi Hup and Sunway, and North Park Residences by Frasers Centrepoint. Interest may also pick up for CapitaLand s D Leedon project which has just received TOP and is the subject of renewed marketing efforts. OVERWEIGHT (Maintained) TOP SECTOR PICKS Company Rec Target Share Price Price (S$) (S$) Wing Tai BUY Keppel Land BUY CapitaLand BUY Source: UOB Kay Hian MONTHLY TAKE-UP OF NEW HOMES Oct 13 Nov 13 Dec 13 Jan 14 Feb 14 Mar 14 Apr 14 May 14 Jun 14 Jul 14 Aug 14 Sep 14 Oct 14 Source: URA, UOB Kay Hian SUMMARY OF UNITS SOLD BY DEVELOPERS IN OCTOBER Developer Units Sold (Oct.) Share of total units City Developments % Keppel Land % Wing Tai % Wheelock % Guocoland 7.9% CapitaLand 3.4% Source: URA, UOB Kay Hian Launched Sold Takeup ANALYSTS Vikrant Pandey vikrant@uobkayhian.com Terence Khi terencekhi@uobkayhian.com 25% 2% 15% 1% 5% % PEER COMPARISON Price Target Upside/ Market Curr Fwd Curr Fwd Book Price/ RNAV Net Company Ticker Rec 17 Nov 14 Price (Downside) Cap. PE PE Yield Yield NAV ps Book ps ROE Gearing (S$) (S$) to TP (%) (US$m) (x) (x) (%) (%) (S$) (x) (S$) (%) (%) CapitaLand CAPL SP BUY , City Devt CIT SP HOLD , GuocoLand GUOL SP BUY , Ho Bee HOBEE SP HOLD , Keppel Land KPLD SP BUY , OUE OUE SP BUY , Wheelock WP SP NR , Wing Tai WINGT SP BUY , Source: Bloomberg, UOB Kay Hian 15

16 UNITS SOLD BY DEVELOPERS IN OCTOBER Developer Own Project Name Property Type Locality Total No of Unit Cumulative Launched Todate Cumulative Sold Todate CapitaLand 35% D'LEEDON Strata-Landed / NCCR % CapitaLand 65% SKY HABITAT Non-Landed RCR % City Developments 3% BARTLEY RIDGE Non-Landed RCR % City Developments 51% COCO PALMS Non-Landed OCR % City Developments 3% COMMONWEALTH TOWERS Non-Landed RCR % City Developments 51% D'NEST Non-Landed OCR % City Developments 1% BUANGKOK Non-Landed OCR % City Developments 6% THE VENUE RESIDENCES Non-Landed RCR % Guocoland 1% GOODWOOD RESIDENCE Non-Landed CCR % Keppel Land 3% CORALS AT KEPPEL BAY Non-Landed RCR % Keppel Land 1% HIGHLINE RESIDENCES Non-Landed RCR % Keppel Land 7% THE GLADES Non-Landed OCR Wheelock 1% THE PANORAMA Non-Landed OCR Wing Tai 4% THE CREST Non-Landed RCR Wing Tai 1% THE TEMBUSU Non-Landed OCR Source: URA, UOB Kay Hian MONTHLY SALES OF NEW HOMES BY SUB-SEGMENT NEW LAUNCHES IN OCT 14 Launched Sold Region breakdown (%) mom change (%) Project Name Region Total Launched Sold Median % Sold* High Mid Mass High Mid Mass Oct Units (units) (units) (S$psf) Nov MARINA ONE RESIDENCES CCR Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Source: URA, UOB Kay Hian SELECTED PROJECT UNITS SOLD IN OCT 14 Project Street Locality Launched Sold Median Lowest Highest Comments (units) (units) (S$psf) (S$psf) (S$psf) MARINA ONE RESIDENCES MARINA WAY CCR Highest sales volume COCO PALMS PASIR RIS GROVE OCR Top 5 by sales volume LAKEVILLE JURONG LAKE LINK OCR Top 5 by sales volume THE SKYWOODS DAIRY FARM HEIGHTS OCR Top 5 by sales volume EIGHT RIVERSUITES WHAMPOA EAST RCR Top 5 by sales volume THE SCOTTS TOWER SCOTTS ROAD CCR Highest psf CLUNY PARK RESIDENCE CLUNY PARK ROAD CCR Above S$2,psf GOODWOOD RESIDENCE BUKIT TIMAH ROAD CCR Above S$2,psf ROBIN RESIDENCES ROBIN ROAD CCR Above S$2,psf THE OXLEY - RESIDENCES OXLEY RISE CCR Above S$2,psf CHARLTON 27 SURIN AVENUE OCR Lowest psf Source: URA, UOB Kay Hian Status sales sales sales sales price price price price 16

17 OPTIONS RETURNED AS A % OF PREVIOUS MONTH SALES 14.% 12.% 1.% 8.% 6.% 4.% 2.%.% 4.9% 4.5% 3.5% 12.7% 3.3% 5.5% Source: URA, UOB Kay Hian *based on all caveats lodged, excludes EC properties 3.8% 3.9% Oct 13 Nov 13 Dec 13 Jan 14 Feb 14 Mar 14 Apr 14 May 14 Jun 14 Jul 14 Aug 14 Sep 14 Oct 14 Return Ratio 2.8% 5.% 4.3% 3.% Avg: 4.7% 4.2% PRICE COMPARISON OF SELECTED UNITS Project Name Oct 14 Sep 14 Mom Region Sold Median Sold Median chg COCO PALMS OCR % LAKEVILLE OCR % THE SKYWOODS OCR % EIGHT RIVERSUITES RCR % SEVENTY SAINT PATRICK'S OCR % THE PANORAMA OCR % THE OXLEY - CCR % RESIDENCES THE GLADES OCR % THE SANTORINI OCR % COMMONWEALTH TOWERS RCR % Source: URA, UOB Kay Hian LAUNCHED BUT UNSOLD UNITS (INVENTORY) SRX PROPERTY INDEX (ALL-SALES) % % 1.% 5.% % % Oct 12 Nov 12 Dec 12 Jan 13 Feb 13 Mar 13 Apr 13 May 13 Jun 13 Jul 13 Aug 13 Sep 13 Oct 13 Nov 13 Dec 13 Jan 14 Feb 14 Mar 14 Apr 14 May 14 Jun 14 Jul 14 Aug 14 Sep 14 Oct 14 Unsold units YoY change SRX Index Source: URA, UOB Kay Hian Source: Singapore Real Estate Exchange (SRX) PROPERTY PRICE INDICES (PRIVATE VS. PUBLIC) 4Q98= URA Private Residential Index 15 1 HDB Resale Price Index 5 2Q 2Q2 2Q4 2Q6 2Q8 2Q1 2Q12 2Q14 Source: URA, UOB Kay Hian PRIVATE PROPERTY PRICE INDEX BY SEGMENT High-End Mass Market Mid-Tier Q5 2Q6 2Q7 2Q8 2Q9 2Q1 2Q11 2Q12 2Q13 2Q14 Source: URA, UOB Kay Hian 17

18 COMPANY RESULTS Land And Houses (LH TB) 3Q14: Potential Upside From Asset Divestment LH posted 3Q14 net profit of Bt1,73.7m, down 12.8% qoq and 6.% yoy due to a drop in revenue from residential sales. The results are within our expectation. LH is likely to achieve its targeted revenue of Bt25b (+9.% yoy) and presales of Bt32b (+6% yoy) for 214. The upside risk to our earnings forecast should come from the gains from the sale of the Terminal 21 shopping mall to a REIT in 4Q14. Maintain BUY on a better presales outlook and laggard play. Target price: Bt Q14 RESULTS 3Q13 2Q14 3Q14 qoq yoy 9M13 9M14 yoy (Btm) (Btm) (Btm) (Btm) % chg % chg (Btm) (Btm) % chg Revenue from residential 6, ,75.2 5, % -4.9% 17, , % Rental income % 9.1% 1,543. 1, % Total revenue 6, ,67.7 6, % -3.8% 18,689. 2, % Gross profit 2, , , % -2.1% 6, , % Operating profit 1, , , % -1.8% 4,164. 4, % Equity income % 14.% 1, , % Net profit 1,842. 1, , % -6.% 4, , % Normalised profit 1, , , % 5.6% 4, , % EPS % -12.8% % Gross margin (%) - Residential 35.4% 37.2% 36.3% -1.%.8% 35.5% 36.4%.9% - Rental 44.% 37.7% 41.8% 4.% -2.2% 43.1% 38.3% -4.8% Overall gross margin 36.1% 37.3% 36.8% -.5%.6% 36.1% 36.5%.4% SG&A as % of revenue 14.2% 13.4% 14.4% 1.%.2% 13.8% 13.9%.1% Net margin (%) 27.% 26.1% 26.3%.3% -.6% 26.3% 25.4% -.9% D/E ratio (%) Source: LH, UOB Kay Hian RESULTS Land And Houses (LH) posted 3Q14 net profit of Bt1,73.7m, down 12.8% qoq and 6.% yoy, owing to a drop in revenue from residential sales. The results are within our expectation. Note that LH recorded a one-off gain of Bt22.3m from the sale of rights in the purchase and sale agreement of land in the North Park project in 3Q13. Stripping off the one-off gain, its normalised profit would have grown 5.6% yoy in 3Q14, boosted by increased rental income and share of profit from investment in associates, widened gross margin, and a drop in interest expenses. For 9M14, its net profit increased 4.5% yoy to Bt5,137m, accounting for 73.9% of our full-year forecast. KEY FINANCIALS Year to 31 Dec (Btm) F 215F 216F Net turnover 24,13 25,75 27,245 3,448 34,369 EBITDA 5,24 5,993 6,73 7,518 8,36 Operating profit 4,71 5,484 6,152 6,917 7,655 Net profit (rep./act.) 5,682 6,478 6,953 7,795 8,748 Net profit (adj.) 4,973 6,276 6,953 7,795 8,748 EPS (Bt) PE (x) P/B (x) EV/EBITDA (x) Dividend yield (%) Net margin (%) Net debt/(cash) to equity (%) Interest cover (x) ROE (%) Consensus net profit - - 6,922 7,722 8,835 UOBKH/Consensus (x) Source: Land and Houses, Bloomberg, UOB Kay Hian BUY (Maintained) Share Price Bt9.85 Target Price Bt12.1 Upside +22.8% (Previous TP Bt11.67) COMPANY DESCRIPTION LH is the leading property developer in Thailand. The company develops residential projects ranging from single detached houses (SDH), townhouses (TH), and condominiums. Another source of revenue is rental income from its serviced apartments and rental properties. STOCK DATA GICS sector Financials Bloomberg ticker: LH TB Shares issued (m): 1,985.6 Market cap (Btm): 18,27.8 Market cap (US$m): 3,3.7 3-mth avg daily t'over (US$m): 6.4 Price Performance (%) 52-week high/low Bt11.3/Bt8.3 1mth 3mth 6mth 1yr YTD 1. (7.1) 1.5 (5.3) 1.1 Major Shareholders % Mr. Anant Asavabhokhin 23.8 Thai NVDR 21.2 Government Of Singapore Investment 13.2 Corp. FY14 NAV/Share (Bt) 3.32 FY14 Net Debt/Share (Bt) 2.92 PRICE CHART (lcy) Volume (m) LAND & HOUSES PUB CO LTD LAND & HOUSES PUB CO LTD/SET INDEX (%) 11 Nov 13 Jan 14 Mar 14 May 14 Jul 14 Sep 14 Nov 14 Source: Bloomberg ANALYST Pornthipa Rayabsangduan pornthipa@uobkayhian.co.th

19 Solid revenue growth from single-detached houses and condos. Revenue from residential sales declined 15.7% qoq and 4.9% yoy to Bt5,965.2m in 3Q14, mainly due to no new condo projects scheduled for completion and the start of unit transfers in 3Q14. Revenue from low-rise housing was relatively flat qoq but increased 14.1% yoy to Bt5,625m. Meanwhile, condo revenue declined 76% qoq and 74.6% yoy to Bt34m. Note that condo revenue contributed to only 5.7% of total revenue from residential sales while the rest came from low-rise housing. Gross margin from residential sales improved to 36.3% in 3Q14 compared with 35.4% in 3Q13, but dropped from 37.2% in 2Q14 due to lower gross margin for single detached houses (SDH) and townhouses (TH). Gross margin for SDH was 37% in 3Q14 (vs. 39.1% in 2Q14) as a result of a discounted price and increased indirect costs at two sold-out projects (Nanthawan Srinakarin and Siwalee Suvarnabhumi projects). Gross margin for TH also narrowed to 32.4% in 3Q14 from 35.9% in 2Q14, owing to the close of the Terrace Ramindra project, which yielded a high margin. However, gross margin for condo sales improved to 31.8% in 3Q14 from 3.5% in 2Q14 since LH raised the selling price of The Key Udomsuk project and adjusted the costs after the project closed. STOCK IMPACT Expect divestment of Terminal 21 shopping mall to a REIT in Dec 14. LH is planning to sell the Terminal 21 shopping mall with total investment value of Bt3b and the remaining 27-year leasehold period to a REIT. The company already filed a submission to the Securities and Exchange Commission Thailand (SEC) for approval. The listing of the REIT on the Stock Exchange of Thailand (SET) is scheduled in Dec 14. Note that the REIT size is about Bt6b. LH expects yields from the REIT to be around 7.5%. The sale of Terminal 21 to a REIT should be potential upside to our earnings forecasts. EARNINGS REVISION/RISK Raise earnings forecasts in We raise earnings forecasts for by 1.8% and 3.%, respectively to fine-tune our key assumptions ie revenue from residential sales, gross margins, and SG&A expenses after the release of the 3Q14 results. Risks to our forecasts include a deterioration of the domestic economy, which may lead to slower presales and transfers of residential units. VALUATION/RECOMMENDATION Maintain BUY on better presales outlook and laggard play. LH s presales in 1M14 amounted to Bt28.6b, accounting for 89.4% of the company s full-year forecast. We expect LH to achieve the presales target of Bt32b in 214. Note that LH has underperformed its peers since its share price has increased by only 1.1% ytd compared with the average increase of 63% for its peers. We believe LH s current share price has priced in the concern about the exercise of LH-W3. We revise up our target price for LH to Bt12.1 (from Bt11.67 previously) based on fully-diluted shares from the exercise of LH-W3 since the warrants are in the money. We use the SOTP valuation method to value LH. Its core operations are valued at Bt7.43/share based on a PE of 16.6x, which is in line with -.25SD to its historical average PE from core operations. Then we add the value of LH s landbank, other long-term investments and affiliates. We value its listed affiliates (ie LHBANK, QCON, HMPRO, and QH) and other long-term investments based on a 1% discount to the market value of its listed affiliates and long-term investments. Meanwhile, we use the book value for its landbank, non-listed affiliates, and property funds. SHARE PRICE CATALYST Better-than-expected transfers of its residential projects. PRESALES IN 29-14F (Btm) 35, 3, 25, 2, 15, 1, 5, - 16,733 2,773 1,482 19,998 1,672 12,478 12,853 5,474 3,578 1,229 14,391 6,362 2,13 16,74 1,416 1,578 18,196 1,445 1,544 16,627 1,7 2,3 19, M14 214F Source: LH, UOB Kay Hian 19,198 25,79 3,19 SDH TH Condo 28,616 32, RECURRING INCOME AS % OF NORMALIZED PROFIT (Btm) 3, 2,5 2, 1,5 1, 5-3.7% 3.8% 4.2% 38.1% 34.6% 36.3% 34.5% 35.1% F 215F Rental income Equity income Recurring income as % of normalized profit Source: LH, UOB Kay Hian REVENUE BY HOUSING TYPE (Btm) 3, 25, 2, 15, 1, 5, - 6.6% 6.7% 18.7% 13.9% 8.2% 1.2% 86.6% 73.2% 76.% 19.9% 6.4% 73.7% 17.8% 8.5% 73.7% 12.6% 18.5% 7.5% 6.8% 23.6% 6.4% 79.9% 74.7% 7.1% F 215F Source: LH, UOB Kay Hian SOTP VALUATION Sum-of-the-parts valuation SDH TH Condo 45.% 4.% 35.% 3.% 25.% 2.% 15.% 1.% 5.%.% (Btm) Per share (Bt) Net profit of 215F core business 5,384.8 Target PE (x) 16.6 Equity value of core operations 89, Add: value of land bank 4, Add: value of other long-term investments 3, Total equity value 97, Add: equity value of affiliates - LHBANK (34.2%-ow ned) 8, QCON (21.16%-ow ned) HMPRO (3.11%-owned) 3, Asia Asset Advisory (4.%-ow ned) LHPF I, II (49.99%-ow ned) QH (24.86%-ow ned) 8, Sum-of-the-parts value 145, No. of fully diluted shares (m) 12,31.1 Target price based on fully-diluted shares from warrant exercise (Bt/share) 12.1 Source: LH, UOB Kay Hian The sale of LHBANK, its 21%-owned affiliate to a foreign partner. 19

20 PROFIT & LOSS BALANCE SHEET Year to 31 Dec (Btm) F 215F 216F Year to 31 Dec (Btm) F 215F 216F Net turnover 25,75 27,245 3,448 34,369 Fixed assets 616 1,272 1,389 1,455 EBITDA 5,993 6,73 7,518 8,36 Other LT assets 33,548 34,592 35,617 36,89 Deprec. & amort Cash/ST investment 1,166 1,24 1,2 1,237 EBIT 5,484 6,152 6,917 7,655 Other current assets 4,4 4,448 45,95 51,89 Total other non-operating income Total assets 75,369 77,515 83,12 9,59 Associate contributions 2,19 2,236 2,524 2,896 ST debt 8,57 4,11 2,123 2,272 Net interest income/(expense) (57) (52) (565) (626) Other current liabilities 5,149 5,68 6,172 6,817 Pre-tax profit 7,487 8,297 9,297 1,369 LT debt 26,14 29,223 32,833 36,87 Tax (1,12) (1,243) (1,389) (1,495) Other LT liabilities Minorities (19) (11) (113) (126) Shareholders' equity 33,573 36,465 39,743 42,255 Net profit 6,478 6,953 7,795 8,748 Minority interest 1,27 1,371 1,485 1,61 Net profit (adj.) 6,276 6,953 7,795 8,748 Total liabilities & equity 75,369 77,515 83,12 9,59 CASH FLOW KEY METRICS Year to 31 Dec (Btm) F 215F 216F Year to 31 Dec (%) F 215F 216F Operating 662 5,492 1,83 1,28 Profitability Pre-tax profit 7,487 8,297 9,297 1,369 EBITDA margin Tax (1,12) (1,243) (1,389) (1,495) Pre-tax margin Deprec. & amort Net margin Associates (2,19) (2,236) (2,524) (2,896) ROA Working capital changes (18,49) 122 (4,155) (5,349) ROE Other operating cashflows 14, Investing (2,867) (15) Growth Capex (growth) (2,867) (15) Turnover Financing 1,98 (5,439) (2,796) (2,5) EBITDA Dividend payments (3,977) (5,21) (5,563) (6,236) Pre-tax profit Issue of shares. 96 1,46. Net profit Proceeds from borrowings 5,921 (1,377) 1,721 4,187 Net profit (adj.) Loan repayment n.a. n.a. n.a. n.a. EPS 26.2 (7.7) Others/interest paid (36)... Net cash inflow (outflow) (297) 38 (183) 217 Leverage Beginning cash & cash equivalent 1,462 1,166 1,24 1,2 Debt to total capital Ending cash & cash equivalent 1,166 1,24 1,2 1,237 Debt to equity Net debt/(cash) to equity Interest cover (x)

21 COMPANY UPDATE IRPC (IRPC TB) Entering A Challenging Period IRPC is now entering a weak industry environment that may pressure earnings in 215. However, we believe share price will respond negatively to oil prices and downside risk to propylene prices. Without an inventory loss, we expect core earnings to continue a gradual recovery in 215. Maintain HOLD. Target price: Bt3.3. Entry price: Bt3.. WHAT S NEW We attended IRPC s analyst meeting yesterday and obtained some operational updates. Fire incident update. According to management, the reconstruction of the vacuum gas - oil hydro treating (VGO/HT) unit is still on schedule. Currently, the unit is waiting for the installation of long-lead items and expects to resume operations in Apr 15 while the DCC unit is running at an 8% utilisation currently. Management expects the DCC unit to be fully utilised after the VGO/HT unit is completed. Note that management expects to receive property damage claims (estimated at Bt1.4b) in 4Q14, while claims of around Bt2.b from business interruption would be received next year. 215 will be a challenging year. Management believes the company is now entering in a weak industry environment with more concerns of an oversupply situation that may pressure IRPC s earnings in 4Q A new norm for crude oil. For refinery, management expects the average crude oil price may still trade at a low of US$92/bbl in 215 with more potential downside risk due to the sharp increase in US shale oil production, reaching almost 5.m barrels in 215 (up 11% yoy). Risk on UHV project. The upstream hygiene & value added products (UHV) project is now around 85% complete and on track for full completion in Oct 15. However, management expects some downside risk on the project s performance, reflecting huge incremental propylene capacity over the next four years, which would create downside risk to propylene prices. HOLD (Maintained) Share Price Bt3.36 Target Price Bt3.3 Upside -1.8% COMPANY DESCRIPTION Refinery and petrochemical STOCK DATA GICS sector Energy Bloomberg ticker: IRPC TB Shares issued (m): 2,434.4 Market cap (Btm): 68,659.6 Market cap (US$m): 2, mth avg daily t'over (US$m): 4.2 Price Performance (%) 52-week high/low Bt3.7/Bt3.4 1mth 3mth 6mth 1yr YTD. (.6) (8.2) (6.1) 3.1 Major Shareholders % PTT 38.5 Government saving bank 9.5 Government pension fund 5.8 FY14 NAV/Share (Bt) 3.29 FY14 Net Debt/Share (Bt) 2.42 PRICE CHART (lcy) IRPC PCL IRPC PCL/SET INDEX (%) KEY FINANCIALS Year to 31 Dec (Btm) F 215F 216F Net turnover 292,43 292, ,459 37, ,712 EBITDA 2,244 4,335 1,241 9,449 1,911 Operating profit (2,243) (597) (3,939) 4,94 5,356 Net profit (rep./act.) (777) 826 (4,264) 3,493 4,438 Net profit (adj.) (777) 826 (4,264) 3,493 4,438 EPS (Bt).. (.2).2.2 PE (x) n.m n.m P/B (x) EV/EBITDA (x) Dividend yield (%) Net margin (%) (.3).3 (1.5) Net debt/(cash) to equity (%) Interest cover (x) ROE (%) (1.) 1.1 (6.) Consensus net profit ,79 4,668 UOBKH/Consensus (x) Source: IRPC, Bloomberg, UOB Kay Hian - - n.m Volume (m) Nov 13 Jan 14 Mar 14 May 14 Jul 14 Sep 14 Nov 14 Source: Bloomberg ANALYST Arsit Pamaranont arsit@uobkayhian.co.th

22 STOCK IMPACT Short-term negatives outweigh positives. Although IRPC will benefit from lower fuel loss, lower crude premium and less working cap requirement amid weaker crude oil prices, we foresee a huge impact from inventory losses outweighing the positive impact of lower crude prices. Looking ahead, we believe it is crucial to monitor propylene and crude prices as these are key trigger points for IRPC s earnings next year. EARNINGS REVISION/RISK We keep our net profit forecasts unchanged. VALUATION/RECOMMENDATION Maintain HOLD and target price of Bt3.3, based on 1.x P/B. We expect share price will respond negatively to oil prices and downside risk to propylene prices. Without impact from inventory losses, we expect core earnings to continue a gradual recovery in 215, backed by an absence of plant shutdown. However, share price upside seems limited and the market adopts a wait-and-see stance on crude prices. Entry price is Bt3.. SHARE PRICE CATALYST Apr 15: Expected earnings recovery after the plant makes a turnaround. Oct 15: Commencement of UHV project. 22

23 PROFIT & LOSS Year to 31 Dec (Btm) F 215F 216F Net turnover 292, ,459 37, ,712 EBITDA 4,335 1,241 9,449 1,911 Deprec. & amort. 4,932 5,18 5,355 5,555 EBIT (597) (3,939) 4,94 5,356 Total other non-operating income 3,961 1,25 1,175 1,25 Associate contributions (39) Net interest income/(expense) (2,469) (1,495) (1,55) (1,915) Pre-tax profit 856 (4,44) 3,746 4,723 Tax (7) (2) (22) (25) Minorities (23) (2) (33) (35) Net profit 826 (4,264) 3,493 4,438 Net profit (adj.) 826 (4,264) 3,493 4,438 BALANCE SHEET Year to 31 Dec (Btm) F 215F 216F Fixed assets 88,216 92,36 95,681 93,126 Other LT assets 11,474 12,9 12,98 13,8 Cash/ST investment 18,9 6,81 9,55 8,77 Other current assets 63,634 6,37 6,635 71,635 Total assets 181, ,16 178, ,918 ST debt 9,152 9,152 9,152 9,152 Other current liabilities 47,35 46,8 51,7 55,2 LT debt 47,969 47,169 49,369 52,569 Other LT liabilities 1,65 1,7 1,9 2,5 Shareholders' equity 75,458 67,197 66,63 66,341 Minority interest Total liabilities & equity 181, ,16 178, ,918 CASH FLOW Year to 31 Dec (Btm) F 215F 216F Operating 16,768 6,362 13,683 3,93 Pre-tax profit 856 (4,44) 3,746 4,723 Tax (7) (2) (22) (25) Deprec. & amort. 4,932 5,18 5,355 5,555 Associates (23) (2) (33) (35) Working capital changes 12,911 3,29 4,635 (7,5) Non-cash items n.a. n.a. n.a. n.a. Other operating cashflows (1,92) 2, Investing (13,778) (12,793) (9,8) (3,1) Capex (growth) (2,) (9,) (9,) (3,) Investments 4,761 (3,793) (8) (1) Others 1,462 Financing 8,494 (4,777) (1,854) (1,465) Dividend payments (1,633) (3,678) (4,87) (4,7) Proceeds from borrowings 12,91 (8) 2,2 3,2 Others/interest paid (2,783) (299) Net cash inflow (outflow) 11,484 (11,28) 2,749 (1,472) Beginning cash & cash equivalent 6,524 18,9 6,81 9,55 Ending cash & cash equivalent 18,9 6,81 9,55 8,77 KEY METRICS Year to 31 Dec (%) F 215F 216F Profitability EBITDA margin Pre-tax margin.3 (1.4) Net margin.3 (1.5) ROA.5 (2.4) ROE 1.1 (6.) Growth Turnover.1 (3.8) EBITDA 93.2 (71.4) Pre-tax profit n.a. (572.5) n.a Net profit n.a. (616.) n.a. 27. Net profit (adj.) n.a. (616.) n.a. 27. EPS n.a. (616.) n.a. 27. Leverage Debt to total capital Debt to equity Net debt/(cash) to equity Interest cover (x)

24 COMPANY UPDATE PTT PCL (PTT TB) PTTGC Is One Of Our Top Picks In The O&G Space We are waiting for the government to fully implement the price hikes for both LPG at PTT s gas separation plant level as well as on NGV products. Thus far, the government has postponed the decision on both issues to after 1 Jan 15. Our top picks in the O&G space are PTTGC and BCP, given their cheap valuations (about 8x 215F PE vs 1.8x for PTT). Maintain HOLD. Target price: Bt35.. Entry price: Bt3.. WHAT S NEW Key takeaways from analysts meeting a) Divestment of BCP shares to be completed within this year while the listing of SPRC will kick off next year. b) Working on pipeline separation. c) 215 industry outlook: Sustainable high margin in olefins, stabilisation in aromatic margin and a slight softening in GRM. STOCK IMPACT Divestment of non-core assets (BCP and SPRC). Management is confident the divestment of BCP shares will be completed this year while PTT will receive cash from buyers next year. Note that PTT holds 27% of BCP s shares. The potential buyers include SUSCO TB, PTG TB, the Mahagitsiri family (the country s leading instant coffee manufacturer), and BCP management and employees. The selling price should be in the range of x P/B (based on its 5-year history P/B band) for BCP in 215, which translates into Bt36-39/share vs PTT s cost of holding of Bt26/share (equity method basis). PTT may book Bt3b-4b in net-tax gains from the divestment. In addition, PTT is waiting for the greenlight from the Cabinet for the listing of SPRC s IPO. PTT will divest its holding in SPRC via the IPO process. HOLD (Maintained) Share Price Bt388. Target Price Bt35. Upside -9.8% COMPANY DESCRIPTION Thailand-based oil & gas company engaged in the upstream petroleum, downstream petroleum, coal business and other related businesses. STOCK DATA GICS sector Energy Bloomberg ticker: PTT TB Shares issued (m): 2,856.3 Market cap (Btm): 1,18,244.3 Market cap (US$m): 33, mth avg daily t'over (US$m): 48. Price Performance (%) 52-week high/low Bt393./Bt264. 1mth 3mth 6mth 1yr YTD Major Shareholders % MOF 51.2 Vayupak Fund NVDR 3. FY14 NAV/Share (Bt) FY14 Net Debt/Share (Bt) PRICE CHART KEY FINANCIALS Year to 31 Dec (Btm) F 215F 216F Net turnover 2,793,833 2,842,688 3,132,548 3,334,861 3,467,469 EBITDA 222, ,143 24, , ,766 Operating profit 157, , , , ,432 Net profit (rep./act.) 14,666 94,652 91,56 12, ,146 Net profit (adj.) 97,51 94,348 91,56 12, ,146 EPS (Bt) PE (x) P/B (x) EV/EBITDA (x) Dividend yield (%) Net margin (%) Net debt/(cash) to equity (%) Interest cover (x) ROE (%) Consensus net profit ,82 15,826 18,23 UOBKH/Consensus (x) Source: PTT PCL, Bloomberg, UOB Kay Hian n.m. : not meaningful; negative P/E, EV/EBITDA reflected as "n.m." (lcy) PTT PCL PTT PCL/SET INDEX 1 5 Volume (m) (%) 13 Nov 13 Jan 14 Mar 14 May 14 Jul 14 Sep 14 Nov 14 Source: Bloomberg ANALYST Tanaporn Visaruthaphong tanaporn@uobkayhian.co.th

25 Expect to complete the pipeline separation by mid-15. The process of separating its pipeline business is underway and management is hopeful of finalising it by mid-15. PTT will hold a 1% stake in this company. The Energy Regulatory Commission (ERC) has set up Third Party Access (TPA) regime since Sep 14 to allow third-parties to use PTT s new gas pipeline to deliver their gas to buyers. PTT is in the process of drafting the details on TPA Code, eg quality of gas (heating value, carbon dioxide content) before submitting it to the ERC in Mar 15 for the approval. This will reduce PTT s monopoly in using gas pipelines. PERFORMANCE BY SEGMENT Industry outlook a) To maintain strong margin in polyethylene business as US new cracker projects are likely to be delayed and more costly. At the same time, there are 1.65m tonnes of polyethylene plants in Europe that will be closed. b) A slight softening in market GRM. Market GRM in 215 should slightly decline yoy. The additional new refinery supply of.77m bpd in 215 should be slightly higher than additional demand (.75m bpd). Note the new refinery supply from India and the Middle East will come on-stream in late-dec 14 to 1Q15. Source: PTT US TIGHT OIL PRODUCTION (MBBL/D) c) Aromatics outlook should stabilise yoy due to lower new paraxylene (PX) supply (3.9m tonnes) in 215 (214: 5.1m tonnes) while demand should continue to grow at 5-6% p.a. (2m tonnes a year). We doubt the additional demand will be able to absorb the new supply in 215. In addition, weak demand in polyester (downstream for PX chain) due to a softened Chinese economy could pressure further PX spread. The LPG retail price for both household and transportation sectors is raised by Bt.5/kg to Bt23.13/kg effectively on 18 Nov 14. This is aimed at strengthening the Oil Fund status. As of 2 November, the Oil Fund had turned positive at Bt827m. This means PTT will not benefit from the price hike in LPG at the moment. EARNINGS REVISION/RISK None. VALUATION/RECOMMENDATION Re-iterate HOLD and SOTP-based target price of Bt35.. PTT is now trading at 1.8x 215F PE, higher than the O&G sector s 9x PE. We have a contrarian view to consensus as we do not believe the government will be able to raise both LPG (from US$333/tonne to US$55/tonne) and NGV prices (from Bt11.5/kg to Bt16/kg) to match PTT s request. However, if the government is able to fully implement the price hikes, this could add about Bt92 (Bt62 from NGV and Bt3 from LPG) to our current target price, based on 1x PE for PTT. Entry price is Bt3.. Source: EIA July 14 report PE BAND PE Forward 13 +3S.D., 12.1x 12 +2S.D., 11.x 11 +1S.D., 9.9x 1 9 Mean, 8.8x 8-1S.D., 7.7x 7-2S.D., 6.5x 6 Oct-9 Nov-1 Dec-11 Jan-13 Feb-14 Mar-15 Source: Bloomberg Our top picks in the O&G space are PTTGC and BCP on cheap valuations (about 8x 215F PE vs 1.8x for PTT). SHARE PRICE CATALYST A further rise in NGV prices. An increase in LPG prices to PTT s GSP level. 25