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					                                          Asia-Pacific Morning Summary
                                          September 8, 2009



The Goldman Sachs Group, Inc.
                                          Focus Items
This document contains comments
related to the following stocks:           Chinatrust Financial Holdings (2891.TW): Strategic assessment of potential
                                                                                                                                                                          1
                                           Chinatrust/Nan Shan Life deal
Baoshan Iron & Steel (600019.SS)           Baoshan Iron & Steel (600019.SS): October price cut better than expected;
                                                                                                                                                                          2
Busan Bank (005280.KS)                     maintain Conviction Buy
Cheil Worldwide (030000.KS)
Chinatrust Financial Holdings              Asia Pacific: Technology: Semiconductors - Foundry: ATIC's acquisition of
                                                                                                                                                                          3
(2891.TW)                                  Chartered to intensify foundry competition
Ctrip.com International (CTRP)             Asia Pacific: Machinery: Construction: China construction machinery company
Daegu Bank (005270.KS)                                                                                                                                                    4
Guangxi Liugong (000528.SZ)
                                           visit takeaways
Hana Financial Group (086790.KS)           South Korea: Banks: Strengthened DTI rule: Impact on banks & household asset
Industrial Bank of Korea                                                                                                                                                  5
                                           quality
(024110.KS)
Korea Exchange Bank (004940.KS)            Cheil Worldwide (030000.KS): No concern from temporary setback in Aug
Lonking Holdings (3339.HK)                                                                                                                                                6
                                           TV/radio billing growth
NCsoft (036570.KS)
Sany Heavy (600031.SS)
TSMC (2330.TW)                            Key Data Changes
United Microelectronics Corp.
(2303.TW)                                 Rating and price target changes
Woori Finance Holdings                                                              Rating/
                                                                                                              Price Target                         Estimates
                                                                                 Coverage view
(053000.KS)                                Company                     Ticker     New    Old          New           Old      % chg Current Year Next Year Fiscal y/e
                                           Ctrip.com International     CTRP       N/N      unch    ↑ US$46.00    US$41.00    12.2%      US$1.51         US$1.99     Dec
                                           Guangxi Liugong           000528.SZ    S/N      unch   ↑ Rmb15.21     Rmb13.00    17.0%      Rmb0.90         Rmb1.01     Dec
                                           Lonking Holdings           3339.HK     N/N      unch    ↓ HK$5.36      HK$5.40    (0.6%)     Rmb0.28         Rmb0.34     Dec
                                           Sany Heavy                600031.SS    N/N      unch   ↑ Rmb25.85     Rmb25.20    2.6%       Rmb1.18         Rmb1.57     Dec

                                          Estimate changes
                                                                                    Rating/               Current Year                      Next Year
                                                                                                                                                                  Fiscal y/e
                                           Company                     Ticker    Coverage view      New          Old      % chg       New         Old     % chg
                                           Ctrip.com International    CTRP           N/N          ↑ US$1.51    US$1.46    3.6%    ↑ US$1.99   US$1.78 12.1%         Dec
                                           Guangxi Liugong           000528.SZ       S/N          ↑ Rmb0.90 Rmb0.75 19.2% ↑ Rmb1.01 Rmb0.84 19.3%                   Dec


                                          Other Headlines
                                          Portfolio Strategy
                                           Asia Pacific: Portfolio Strategy: Index Strategy: NIFTY rebalancing                                                            7

                                          Financial Services
                                           Pan Asia: Real Estate: Asia Property Weekly                                                                                    8
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Asia-Pacific Investment Research
+852-2978-1000

Analysts employed by non-US                The Goldman Sachs Group, Inc. does and seeks to do business with companies covered in its research
affiliates are not registered/qualified    reports. As a result, investors should be aware that the firm may have a conflict of interest that could
as research analysts with FINRA in         affect the objectivity of this report. Investors should consider this report as only a single factor in making
the U.S.                                   their investment decision. For Reg AC certification, see the end of the text. Other important disclosures
                                           follow the Reg AC certification, or go to www.gs.com/research/hedge.html.
Global Investment Research
China: Real Estate: Volume and ASP largely flat in the 1st week of Sept                               9

Industrials
Lonking Holdings (3339.HK): August volume: No sign of excavator volume breakthrough yet              10

Technology
NCsoft (036570.KS): 300,000 Aion US pre-sale volume                                                  11
Ctrip.com International (CTRP): Ticket pricing improving as expected, traffic higher than expected   12

Other
Pan Asia: Conviction Call Catch-up: Your 2-min refresher on our best ideas                           13
Pan Asia: RelVal Round-up: Your 2-min guide to our best relative value ideas                         14
Asia-Pacific Morning Summary                                                                                                               September 8, 2009




Focus Items

Chinatrust Financial Holdings (2891.TW): Strategic assessment of potential Chinatrust/Nan Shan Life deal                                                  1

2891.TW, NT$19.50                          Vincent Chang (Hong Kong): vincent.chang@gs.com, +852-2978-6681
Market cap               US$5,465 mn
                                           Goldman Sachs (Asia) L.L.C.
                                           Roxan Hsu (Taipei): roxan.hsu@gs.com, +886(2)2730-4184
Target price                  NT$19.00
                                           Goldman Sachs (Asia) L.L.C., Taipei Branch
Fiscal y/e Dec       2009E       2010E     What's changed
Net inc. (NT$)     2,676 mn 11,111 mn      On Sep 4, Chinatrust launched a private placement of 2.5bn common shares at NT$17.7/share (5%
EPS (NT$)              0.29        1.21
                                           discount), implying 21% dilution; the buyer’s name remains undisclosed. On Sep 5, Bloomberg reported that
                                           Chinatrust had won the bid for Nan Shan Life at US$2.4bn (NT$79.2bn), 0.6X 7M09 book; Chinatrust has not
EPS growth          (80.4%)     315.2%     confirmed this report.
P/E                   67.2X      16.2X     Implications
Dividend yield        0.8%        3.1%     If the Bloomberg news is confirmed as true, Chinatrust would become the 2nd largest FHC in Taiwan with a
                                           52:48 bank:life insurance split (based on assets) and total assets of NT$3.3trn. In the absence of actuarial
Investment Lists
                                           data on Nan Shan Life’s operation, we can only assess the potential deal on a strategic level for now. Key
                                Neutral    positives: Chinatrust may be able to create some synergies from cross-selling; N/T ROE may improve, as
Coverage view                   Neutral    Nan Shan Life may have unrealized gains from fixed income /equity investment that it can dispose and
                                           realize on its P&L during the portfolio re-balancing process; Key negatives: Chinatrust may need additional
                                           dilutive capital raising to close the funding gap. It would join other major life insurers in Taiwan in battling
                                           against the problem of negative interest spread. How well it might deal with widely reported resistance from
                                           Nan Shan’s labor union and quickly re-activate the productivity of the sales force would be key to integration
                                           success. Also, Chinatrust’s bancassurance distribution advantages might be cannibalized with such a
                                           strategic change (ie, from pure distributor to manufacturer).
                                           Valuation
                                           We await more detailed financial/actuarial information for a thorough assessment of this potential deal. Keep
                                           Neutral rating with 12-month SOTP-based TP of NT$19. Given the risks of further dilution and the uncertainty
                                           from this reported deal, we believe better risk/reward can be found in Cathay (2882.TW), Yuanta (2885.TW)
                                           and First FHC (2892.TW), all rated Buy.
                                           Key risks
                                           Faster-than-expected cross-straits breakthrough; M&A overhang.


Baoshan Iron & Steel (600019.SS): October price cut better than expected; maintain Conviction Buy                                                         2

600019.SS, Rmb7.03                         Song Shen (Hong Kong): song.shen@gs.com, +852-2978-1131
Market cap              US$18,025 mn
                                           Goldman Sachs (Asia) L.L.C.
                                           Joanna Mak (Hong Kong): joanna.mak@gs.com, +852-2978-1276
Target price                  Rmb15.00
                                           Goldman Sachs (Asia) L.L.C.
Fiscal y/e Dec       2009E       2010E     News
Net inc. (Rmb)     5,081 mn 11,632 mn      As per Mysteel reports, Baosteel has cut its Oct hot rolled (HR) price by 4% from Sept level, by Rmb234/t
EPS (Rmb)              0.29        0.66
                                           (US$34/t, incl. VAT) to Rmb5,197/t (US$761/t).
                                           Analysis
EPS growth          (21.6%)     128.9%
                                           (1) This is the first price cut since May this year, after three consecutive price hikes of 9%-15% mom between
P/E                   24.2X      10.6X     July and September.
Dividend yield        2.0%        4.6%     (2) We expected a price cut, but a decrease of Rmb234/t is better than expected as it puts Baosteel’s HR
                                           price 37% above the current market spot price, the largest premium since 2004, vs. an average historical
Investment Lists
                                           premium of 10%. This indicates management’s 4Q09 outlook for flat steel is positive.
                   Asia Pacific Buy List   (3) The market’s HR spot price has dropped by 14% since Baosteel announced its September price hike on
       Asia Pacific Conviction Buy List
                                           August 11.
Coverage view                   Neutral
                                           Implications
                                           The less-than-expected October price cut is a positive surprise to us, as the market spot has dropped by
                                           Rmb612/t in 4 consecutive weeks since early August, vs. Baosteel’s larger-than-expected Sept price hike of
                                           Rmb702/t. We believe this cycle of price correction is mainly inventory adjustment and will not be as long or
                                           as deep as the previous down cycle, which lasted for 10 weeks post Chinese New Year until the trough in
                                           mid-April, given the end-demand for steel is stronger now vs. 1Q09.
                                           − GFA newly started yoy growth turned positive in June after 11 months in negative territory; auto sales in




Goldman Sachs Global Investment Research
Asia-Pacific Morning Summary                                                                                                  September 8, 2009



                                 July are up 63% yoy, vs. April +25% yoy.
                                 − Property capex is expected to stay strong in the 4Q construction season, as property inventory continues to
                                 come down and ASPs keep rising.
                                 Signs that further big price drops in this adjustment cycle not likely:
                                 − Per tonne gross profit for HR has dropped to Rmb100/t from an early August peak of 600/t, and below the
                                 mid-cycle level of 500/t.
                                 − Traders’ inventory build has slowed to 3% wow vs. Aug 7% wow addition.
                                 − Raw material spot iron ore price has dropped 14% to Rmb770/t from a recent high of Rmb900/t, close to
                                 marginal producers’ cost of Rmb750/t.
                                 We maintain our earnings, rating and target price on Baosteel.


Asia Pacific: Technology: Semiconductors - Foundry: ATIC's acquisition of Chartered to intensify foundry                                     3
competition

                                 Donald Lu, Ph.D (Beijing): donald.lu@ghsl.cn, +86(10)6627-3123
                                 Beijing Gao Hua Securities Company Limited
                                 Evan Xu (Beijing): evan.xu@ghsl.cn, +86(10)6627-3176
                                 Beijing Gao Hua Securities Company Limited
                                 ATIC to acquire Chartered Semi
                                 On Sep 7, Chartered Semi and Advanced Technology Investment Company of Abu Dhabi (ATIC) announced
                                 a definitive agreement whereby ATIC would acquire entire Chartered shares for a total value of US$3.9bn
                                 ($1.8bn for equity and US$2.2bn for debt). Temasek, which owns 62% of Chartered, supports the deal. The
                                 CEO of GLOBALFOUNDRIES, which is a foundry JV between ATIC and AMD, would serve as the CEO of
                                 the combined operation. The involved parties expect the transaction to close in 4Q09. We estimate the deal
                                 values Chartered at 1.13X trailing P/B and 2.35X EV/2008 Sales.
                                 Acquisition to accelerate the ramp up of GLOBALFOUNDRIES
                                 Based on the CEO appointment, we believe that Chartered and GLOBALFOUNDRIES will work closely post
                                 the deal. Launched on March 2, 2009, GLOBALFOUNDRIES still lacks basic foundry infrastructure and
                                 would be able to leverage Chartered’s existing team in global sales and design service for a fast ramp up, in
                                 our view. We also expect Chartered and GLOBALFOUNDRIES to offer a potentially unified design process
                                 and fab exact manufacturing to leverage their scale. We estimate that Chartered and GLOBALFOUNDRIES
                                 together represent 24.3% of current total foundry 12” capacity, next to only TSMC of 49.8% and above UMC
                                 of 20.6%.
                                 Deal likely to intensify rather than reduce competition
                                 Unlike most consolidations that often moderate industry competition, we expect this deal to intensify foundry
                                 competition by augmenting the impact of GLBALFOUNDRIES, a new entrant. Our checks indicate that some
                                 top foundry customers have been pushing for this deal because they like additional suppliers, but were
                                 reluctant to invest in the new design process of GLOBALFOUNDRIES. The deal could help bring Chartered’s
                                 existing top customers (Qualcomm, Broadcom, Mediatek, and Marvell) to GLOBALFOUNDRIES. In addition,
                                 ATIC’s investment should alleviate midsized companies’ concerns over limited capacity at Chartered. We
                                 view execution and strategy as key challenges for GLOBALFOUNDRIES. GLOBALFOUNDRIES operates in
                                 dispersed locations (Germany, NY, Texas, CA, & Singapore), which could represent a management
                                 challenge. Furthermore, it is unclear if GLOBALFOUNDRIES would offer a TSMC compatible process at
                                 28nm. If not, it would not be able to attract midsized customers. Overall, we view ATIC’s acquisition of
                                 Chartered as incrementally negative to TSMC (2330.TW) and UMC (2303.TW) shares due to intensifying
                                 competition.



Asia Pacific: Machinery: Construction: China construction machinery company visit takeaways                                                  4

                                 Tommy Wong (Taipei): tommy.wong@gs.com, +886(2)2730-4194
                                 Goldman Sachs (Asia) L.L.C., Taipei Branch
                                 Fine-tuning numbers following China machinery trip
                                 We recently visited the following construction machinery companies in China: Komatsu, HCM, Hyundai
                                 Heavy, Sany, Sunward Intelligent, Zoomlion, Liugong, and Cummins. Following this trip and 1H results
                                 announcements, we adjust our target prices for the three companies covered in this report by -1% to +17%.
                                 Although we leave Sany’s and Lonking’s earnings forecasts unchanged, we adjust Liugong’s 2009E-2011E
                                 EPS forecasts by 12%-19%, on the back of better-than-expected gross margins, stable prices, and market
                                 share gains over weaker participants.




Goldman Sachs Global Investment Research
Asia-Pacific Morning Summary                                                                                                    September 8, 2009



                                 Positive outlook driven by infrastructure construction spending
                                 In general, the companies believe that government-led infrastructure construction spending will serve as a
                                 baseline growth driver going forward. However, while they see a gradual pick-up in overall mining demand,
                                 visibility in relation to demand for property development remains low. These companies expect their net
                                 margins to remain stable as lower material costs are offset by increased investment in distribution channels
                                 and marketing expenses.
                                 4Q demand should pick up after National Day
                                 Most of the companies we visited believe that demand will strengthen in 4Q after the National Day holiday, as
                                 construction and mining activities have been carefully controlled by local governments up to that point.
                                 Prefer Sany over Liugong; Lonking (H) lacks catalysts, in our view
                                 We prefer Sany over Liugong (Sell) due to Sany’s market leadership position. Moreover, highly favorable
                                 comments on Sany by international participants reaffirm our preference for the company. Nevertheless, we
                                 think this view has already been factored in by the market, as such, we maintain our Neutral rating on Sany.
                                 We see potential near-term downside risk if the asset-injection of the excavator business from its parent
                                 company falls through given the closing deadline of Oct. 20. For Lonking (Neutral), we would be more
                                 positive if we saw more evidence of better market penetration into the excavator segment.
                                 Risks
                                 Upside risks include: (1) stronger-than-expected macro growth accelerating property construction and mining
                                 activities and (2) favorable government policies for domestic brands. Downside risks include: (1) material
                                 price shocks and (2) a slowdown in infrastructure construction spending.



South Korea: Banks: Strengthened DTI rule: Impact on banks & household asset quality                                                           5

                                 Philippa Rogers, CFA (Tokyo): philippa.rogers@gs.com, +81(3)6437-9970
                                 Goldman Sachs Japan Co., Ltd.
                                 Eunice Lee (Seoul): eunice.k.lee@gs.com, +82(2)3788-1724
                                 Goldman Sachs (Asia) L.L.C., Seoul Branch
                                 Now LTV and DTI ratios all strengthened
                                 Following the announcement of more restrictive loan-to-valuation (LTV) ratios on July 7, the FSS has decided
                                 to put in place an additional curb on mortgage loans by strengthening the rule related to the debt-to-income
                                 ratio (DTI). Currently, 40%-50% DTI ratios are applied to designated speculative areas in Seoul. The FSS will
                                 now require banks to apply DTI ratios of 50% and 60% to non-speculative areas of Seoul and Incheon,
                                 Kyunggi province, respectively, effective from September 7. The announced measures are no surprise to us
                                 given the government has repeatedly expressed its concern over the recent rise in mortgage loans and
                                 property prices. In our view, the government has taken the appropriate policy step by attempting to restrict
                                 further excessive growth in mortgage loans rather than raising interest rates which might increase the
                                 vulnerability of household asset quality.
                                 Impact on banks should be limited in our view
                                 We believe these government regulations will have a limited impact on the Korean banks as: 1) banks have
                                 already been applying internal caps that would be within the confines of the new regulation and 50%-60%
                                 interest coverage caps seem consistent with internal measures by many banks globally; 2) it should help halt
                                 any excessive leverage build-up amidst the still weak economic backdrop with uncertainty as to the peaking
                                 of the NPL cycle; 3) lastly, the government may feel less pressure to increase interest rates pre-emptively if
                                 these micro-regulations help keep property prices under control. We expect both household and corporate
                                 lending markets to stay dormant, with banks under our coverage guiding for low single-digit growth for 2H09.
                                 Risks
                                 The new regulations may force some banks to practice more prudent lending practices which in turn might
                                 further limit their growth opportunities in 2H09. The other key risks facing the sector are a reacceleration in
                                 NPLs and disappointing margins.




Goldman Sachs Global Investment Research
Asia-Pacific Morning Summary                                                                                                              September 8, 2009




Cheil Worldwide (030000.KS): No concern from temporary setback in Aug TV/radio billing growth                                                            6

030000.KS, W276,500                        Paul Hwang (Seoul): paul.hwang@gs.com, +82(2)3788-1176
Market cap               US$1,025 mn
                                           Goldman Sachs (Asia) L.L.C., Seoul Branch
                                           Jeehye Song (Seoul): jeehye.song@gs.com, +82(2)3788-1773
Target price                 W328,000
                                           Goldman Sachs (Asia) L.L.C., Seoul Branch
Fiscal y/e Dec       2009E       2010E     What's changed
Net inc. (W)         81 bn        98 bn    According to monthly ad billing data released by KOBACO, Cheil Worldwide’s (CW) combined domestic
EPS (W)             17,554      21,307
                                           TV/radio billing declined 26% yoy in Aug 09 (vs. +17% yoy in Jul 09), while overall domestic TV/radio ad
                                           market size was down 17% yoy in Aug 09 (vs. -7% yoy in Jul 09).
EPS growth          (7.6%)       21.4%
                                           Implications
P/E                  15.8X       13.0X     Though CW’s domestic monthly TV/radio billing growth deteriorated in Aug 09 (vs. Jul 09), we are not too
Dividend yield        2.0%        2.6%     concerned, given: 1) CW’s QTD domestic TV/radio billing growth of -5% yoy, which is in line with our current
                                           estimate of -5% yoy in 3Q09E; 2) continuous sequential improvement in CW’s domestic TV/radio billing
Investment Lists
                                           growth from -24% yoy in 1Q09 to -9% yoy in 2Q09 and -5% yoy in 3Q09 QTD; and 3) volatility of monthly
                   Asia Pacific Buy List   billing growth. Moreover, CW continues to post stronger domestic TV/radio billing growth vs. overall market
       Asia Pacific Conviction Buy List
                                           size growth of -32%/-28% yoy/-12% yoy in 1Q09/2Q09/3Q09 QTD.
Coverage view                   Neutral    Despite continued outperformance vs. KOSPI, we re-iterate our Buy rating (on Conviction list) on CW, given:
                                           1) still attractive valuation – trading at FY10 P/E of 12.7x vs. historical average P/E of 15.4x since 2001; 2)
                                           strong earnings growth in FY10E – EPS growth of +21% yoy; 3) benefit from deregulation of domestic TV ad
                                           market in long-term; and 4) Samsung Electronics (005930.KS, Buy (Conviction List), W773,000) continuous
                                           focus on increasing global market share.
                                           Valuation
                                           We maintain our Buy rating (on Conviction list) and 12-m price target of W328,000, derived by applying
                                           historical average (since 2001) P/E of 15X to FY10E estimates.
                                           Key risks
                                           Weaker-than-expected domestic economy; lower-than-expected Samsung Electronics’ advertising spending;
                                           and unfavorable regulatory changes.
Other Headlines
Portfolio Strategy

Asia Pacific: Portfolio Strategy: Index Strategy: NIFTY rebalancing                                                                                      7

                                           Kenneth Kok, CFA (Hong Kong): kenneth.kok@gs.com, +852-2978-0960
                                           Goldman Sachs (Asia) L.L.C.
                                           Richard Tang (Hong Kong): richard.tang@gs.com, +852-2978-0722
                                           Goldman Sachs (Asia) L.L.C.
                                           Ramasubramanian Dharmaraj (Bangalore): ramasubramanian.d@gs.com, (212) 934-9678
                                           Goldman Sachs India SPL
                                           Sunil Koul (Bangalore): sunil.koul@gs.com, (212) 934-6971
                                           Goldman Sachs India SPL
                                           Praveen B (Bangalore): praveen.b@gs.com, (212) 934-8370
                                           Goldman Sachs India SPL

                                           Minimal flow impact expected
                                           What's happening?
                                           India Index Services & Products (IISL) announced on Friday, September 4, 2009 changes to the S&P CNX
                                           Nifty (NIFTY). Changes announced will take effect after the close of Monday, October 19 (or the open on
                                           Tuesday, October 20). This is different from the last trading day (LTD) of Indian October futures on October
                                           29 (Thursday). In the last rebalancing when NIFTY was transitioned to free-float adjusted weighting scheme,
                                           implementation date was set to coincide with futures LTD (please refer to Asia Pacific Portfolio Strategy:
                                           Index Strategy: NIFTY transition to free-float weighting scheme, March 25 for details).
                                           Changes: 2 additions, 2 deletions; flow impact minimal
                                           Unlike last year, when we believed index arbitrageurs were long futures, short stocks, we think they are now




Goldman Sachs Global Investment Research
Asia-Pacific Morning Summary                                                                                                  September 8, 2009



                                 holding minimal positions and hence, have minimal impact on flow. As such, any buying or selling should
                                 mainly come from passive funds or selected active funds that are highly benchmark-aware.
                                 In this index rebalancing, National Aluminium (NACL IS) and Tata Communications (TCOM IS) will be
                                 removed, which we expect to see US$1.1mn (0.47X 1M ADVT) and US$1.3mn (0.29X 1M ADVT) of passive
                                 selling respectively.
                                 In replacement, Jaiprakash Associates (JPA IS) and Infrastructure Development Finance (IDFC IS) will be
                                 added to the index, with pro forma weightings of 1.3% and 0.9% respectively. We estimate this could result in
                                 US$6.5mn and US$4.7mn of passive buying, which are worth 0.08 days and 0.18 days of trading.



Financial Services

Pan Asia: Real Estate: Asia Property Weekly                                                                                                    8

                                 Anthony Wu (Hong Kong): anthony.wu@gs.com, +852-2978-0634
                                 Goldman Sachs (Asia) L.L.C.
                                 Key news and updates
                                 HK: 117 primary residential units were sold in the week to Sep 6 (vs. 156 units previous week). Secondary
                                 market prices down 0.3% wow.
                                 China: 9 of 15 cities with data available saw volumes down (median -5%). 5 of 10 cities with data available
                                 saw prices down (median -3%).
                                 India HDFC Property Ventures and Temasek are in talks to invest about US$130 mn in the Bangalore-
                                 headquartered Prestige Group. (The Times of India, Sep 7).
                                 China: Vanke’s (000002.SZ) Aug contract sales were Rmb4.8bn, up 18% yoy, taking ytd sales to Rmb41bn,
                                 up 30%. (Company news, Sep 4).
                                 SG: The Singapore government is likely to reintroduce land sales through its 1H 2010 Confirmed List.
                                 (Channel NewsAsia, Sep 3).
                                 HK: July retail sales value fell by 5.5% yoy (vs. 4.8% drop in June). (SCMP, Sep 1).
                                 Japan: The DPJ won a victory in the lower house elections, which may result in policy changes in property
                                 sector. (Nikkei, Aug 31).



                                 Upcoming events
                                 China: Money & credit (Sep 10-15), CPI/PPI, Trade, FAI and retail sales (Sep 11).
                                 Earnings: SOHO China, Franshion (Sep 8); Agile, Shenzhen Inv., Sino Land (Sep 9).



China: Real Estate: Volume and ASP largely flat in the 1st week of Sept                                                                        9

                                 Yi Wang, CFA (Shanghai): yi.wang@ghsl.cn, +86(21)2401-8930
                                 Beijing Gao Hua Securities Company Limited
                                 Jason Sun (Beijing): jason.sun@ghsl.cn, +86(10)6627-3187
                                 Beijing Gao Hua Securities Company Limited
                                 Wendy (Yunting) Luo (Shanghai): yunting.luo@ghsl.cn, +86(21)2401-8921
                                 Beijing Gao Hua Securities Company Limited
                                 Vicky Li (Shanghai): vicky.li@ghsl.cn, +86(21)2401-8926
                                 Beijing Gao Hua Securities Company Limited
                                 Aug 31- Sept 6 transaction volume and ASP
                                 On a wow basis, 9 of the 15 cities with data available saw volumes decrease with a group median of -2%
                                 (versus -5% for the week ended Aug 30). On a yoy basis, 13 of the 15 cities saw volumes rise with a group
                                 median of 88% (versus 128%). Compared with the Aug 2009 weekly average, 9 out of the 15 cities saw
                                 volumes decline with a group median of -3% (versus -13%). Except PRD region, the volume level across
                                 other regions are still at March level or even higher, despite the GFA available for sale being 8%-50% lower
                                 than average March level (except Xi’an).
                                 In terms of ASP, on a wow basis, 5 of the 10 cities with data available saw price decline with a group median
                                 of -3% (versus 2% increase for the week ended Aug 30); on a yoy basis, 8 of the 10 cities saw prices rise
                                 with a group median of 12% (versus 14%).




Goldman Sachs Global Investment Research
Asia-Pacific Morning Summary                                                                                                            September 8, 2009



                                         Ytd performance
                                         Ytd as of the week ended Sept 6, all the 15 cities saw volumes go up with a group median of 108% yoy
                                         (versus 109% as of the week ended Aug 30).
                                         Inventory levels
                                         According to the rolling 12-month GFA sold, the average inventory take-up time (for the 16 cities we track) fell
                                         marginally to 12.8 months from 13.0 months for the week ended Aug 31. Currently, Shanghai, Nanjing,
                                         Suzhou, Hangzhou, Guangzhou, Shenzhen, Xiamen, Chongqing and Beijing’s inventory months are lower
                                         than 12 months, while Shenyang and Xian’s are higher than 18 months; Tianjin, Dongguan, Wuhan, Dalian
                                         and Chengdu are in between. On the new supply side, 4 of the 8 cities with data available saw decreased
                                         supply in terms of GFA, compared with the average weekly new release in Aug 2009, for a group median of -
                                         1%.
                                         Trade ideas
                                         Our Buy ideas: Agile (3383.HK; on Conviction List), Shimao (0813.HK; on Conviction List), R&F (2777.HK),
                                         Yanlord (YNLG.SI), Shenzhen Investment (0604.HK), Vanke A/B (000002.SZ/200002.SZ), Gemdale
                                         (600383.SS), Huafa (600325.SS) and E-house (EJ). Our Sell ideas: China Resources Land (1109.HK),
                                         Franshion (0817.HK), and China World Trade Center (600007.SS). We maintain our Attractive coverage
                                         view. Downside risks: Unexpected government tightening, a slower-than-expected macro recovery in China.
                                         Upside risks: Faster or stronger-than-expected property price appreciation.



Industrials

Lonking Holdings (3339.HK): August volume: No sign of excavator volume breakthrough yet                                                               10

3339.HK, HK$4.66                         Tommy Wong (Taipei): tommy.wong@gs.com, +886(2)2730-4194
Market cap              US$1,301 mn
                                         Goldman Sachs (Asia) L.L.C., Taipei Branch
                                         What's changed
Target price                  HK$5.40
                                         Lonking released August construction machinery shipments, flat from July levels and in-line with our
Fiscal y/e Dec       2009E     2010E     expectation. Loader sales reached 1872 units (+4% yoy, +3% mom, and -26% ytd), and excavator sales
Net inc. (Rmb)     599.8 mn 730.6 mn     reached 151 units (+185% yoy, +7% mom, and +201% ytd). Roller and forklifts increased by 66% yoy and
                                         129% yoy, respectively.
EPS (Rmb)              0.28      0.34
                                         Implications
EPS growth           (9.9%)    21.8%
                                         We think the company’s valuation reflects its recovering loader business and strong growth of excavators
P/E                  14.8X      12.2X    year to date. We believe its key share price catalyst is the excavator business, for which we need to see
Dividend yield        2.4%       3.0%    further market penetration, as its sales volume in the past three months has been lackluster given high
                                         expectations as a result of strong ramp up during 1H09. Our view is that visibility is low given the company’s
Investment Lists
                                         limited track record while competition is intense.
                               Neutral
                                         Valuation
Coverage view                  Neutral   Our 12m HK$5.36 target price is based on EV/GCI vs CROCI/WACC; our target price implies 19X 2009E P/E
                                         and 16X 2010E P/E.
                                         Key risks
                                         Upside risks: Further expansion of current infrastructure construction program, which we think would be
                                         unlikely given the already aggressive investment level (i.e. railway) plus clear indications of slower loan
                                         growth. Downside risks: Competitive price action, material cost, failure to further penetrate secondary product
                                         categories (i.e. excavators, forklifts, rollers).




Goldman Sachs Global Investment Research
Asia-Pacific Morning Summary                                                                                                               September 8, 2009



Technology

NCsoft (036570.KS): 300,000 Aion US pre-sale volume                                                                                                      11

036570.KS, W143,000                        Han Joon Kim (Seoul): hanjoon.kim@gs.com, +82(2)3788 1779
Market cap               US$2,195 mn
                                           Goldman Sachs (Asia) L.L.C., Seoul Branch
                                           Hyunwoo Nam (Seoul): hyunwoo.nam@gs.com, +82(2)3788-1704
Target price                   W218,000
                                           Goldman Sachs (Asia) L.L.C., Seoul Branch
Fiscal y/e Dec       2009E       2010E     News
Net inc. (W)        162 bn       191 bn    According to CFO JH Lee during a press interview hosted on September 4 in Seattle, US, US pre-sale
EPS (W)               7,376       8,729
                                           volume for Aion is at 300,000 box sales. According to the CFO, of the 300,000 volume, one-third has been
                                           fully paid for by customers while two-thirds is deposit-only. Anticipated revenue was in excess of W10 bn,
EPS growth          493.7%       18.4%     according to the CFO, who added that the game has been localized in content and storyline to better cater to
P/E                  19.4X        16.4X    the US audience.
Dividend yield        1.8%         2.0%    Analysis
                                           We currently assume 250,000 Aion box sales in 3Q and 250,000 in 4Q09 for US and Europe combined,
Investment Lists
                                           although we had been expecting the possibility of a greater proportionate sell-through in 3Q over 4Q. We
                   Asia Pacific Buy List   maintain our current estimates and would watch for higher sales volume into the game release on September
Coverage view                    Neutral   22 (US) and September 25 (Europe).
                                           We recognize the possibility of order cancellations and refunds (that we have seen with competitors’ recent
                                           titles such as Warhammer Online), but nevertheless feel the incremental data is a comfort and gives higher
                                           visibility on 2H earnings outlook, which is a positive.
                                           Implications
                                           We maintain our Buy rating and 12-month, 25X 2010E EPS-based target price of W218,000. The key
                                           downside risk to our view and target price is further deterioration of Aion in China and high cancellation of
                                           pre-sale volume in US/Europe



Ctrip.com International (CTRP): Ticket pricing improving as expected, traffic higher than expected                                                       12

CTRP, US$53.83                             Kathy Chen (Hong Kong): kathy.chen@gs.com, +852-2978-1291
Market cap               US$3,738 mn
                                           Goldman Sachs (Asia) L.L.C.
                                           James Mitchell, CFA (New York): james.mitchell@gs.com, (212) 357-1849
Target price                   US$46.00
                                           Goldman, Sachs & Co.
Fiscal y/e Dec       2009E       2010E     Michelle Sun (Hong Kong): michelle.sun@gs.com, +852-2978-2679
Net inc. (US$)     88.7 mn 116.9 mn        Goldman Sachs (Asia) L.L.C.
EPS (US$)              1.51        1.99    What's changed
                                           Our recent meeting with mgmt yielded the following key takeaways: (1) Air ticket pricing is now flat yoy vs.
EPS growth           25.6%       31.7%
                                           down 10% yoy earlier in the qtr. (2) Based on July data reported by the 3 major Chinese airlines, domestic
P/E                  35.5X        27.0X    traffic volume grew 21% yoy, accelerating from 2Q growth of 18% yoy. Ctrip maintained its air ticket booking
Dividend yield            --          --   growth guidance of 25-30% yoy. (3) On the hotel side, Ctrip indicated that both booking and pricing trends
                                           are inline with its guidance of volume up 20-25% yoy and pricing down 10% yoy. However, mgmt mentioned
Investment Lists                           that hotel pricing trends usually lag air and thus hotel pricing may begin to improve in the coming quarter. (3)
                                 Neutral   Package tour revenue trend qtd has fared better than Ctrip’s expectation around 2Q results, as H1N1 impact
Coverage view                    Neutral   was much less than that in 2Q.
                                           Implications
                                           (1) Flat yoy air ticket pricing is inline with our 3Q forecast of up 2% qoq and up 2% yoy. However, the
                                           improving trend gives us more confidence of pricing recovery going forward and thus we raise our 2010/11E
                                           air revenue per ticket forecast by 6%/9%. (2) Domestic air traffic growth continues to surprise positively.
                                           Given Ctrip’s ability to grow at a multiple (2X+ in last couple qtrs) of industry growth, we raise our air ticket
                                           booking growth in 2H09 by 8% (2010/11E by 7%/6%) and model above-guidance growth of 43% yoy in
                                           3Q09. (3) We raise our hotel pricing forecasts from flat qoq to +3% qoq in 4Q09 as we expect hotel pricing to
                                           follow air pricing recovery and possibly bottom in 3Q09 (we raise 2010/11E hotel pricing by 5%/7%). Net-net,
                                           we raise our 2009-2011E non-GAAP EPS by 4%/12%/12%.
                                           Valuation
                                           Our new 12m TP is $46 (from $41) on 23X (unchanged) 2010E non-GAAP EPS, against our 2010-2013E
                                           EPS CAGR of 21% and 2010E ROE of 28%. We stay Neutral as we believe valuation fully reflects the growth




Goldman Sachs Global Investment Research
Asia-Pacific Morning Summary                                                                                                   September 8, 2009



                                 outlook.
                                 Key risks
                                 Upside and downside risks: air and hotel pricing trends.

Other

Pan Asia: Conviction Call Catch-up: Your 2-min refresher on our best ideas                                                                   13

                                 Mike Warren (Hong Kong): mike.warren@gs.com, +852-2978-1383
                                 Goldman Sachs (Asia) L.L.C.
                                 Christopher Vilburn (Tokyo): christopher.vilburn@gs.com, +81(3)6437-9897
                                 Goldman Sachs Japan Co., Ltd.
                                 Joy Nguyen (Hong Kong): joy.nguyen@gs.com, +852-2978-1106
                                 Goldman Sachs (Asia) L.L.C.
                                 Asia Ex-Japan Conviction List performance for week ended Sept 4
                                 The Asia Ex-Japan Conviction List (AEJ CL) increased by 1.9% during the week compared with a 1.3% rise
                                 for the MSCI AEJ Index. Year-to-date, AEJ CL is up 28.0% compared with a 52.3% increase for the MSCI
                                 AEJ Index. Major outperformers during the week were: Total Access Communications (+15%), Unitech
                                 (+9%), HTHK (+6%), Shimao Property (+6%). Major underperformers were: Zhaojin Mining (-7%), HK &
                                 China Gas (-6%), Hutchison Whampoa (-6%), Cairn India (-4%).
                                 AEJ CL additions, removals, reiterations for week ended Sept 4
                                 We added Hanjin Shipping (Sept 1) to our Conviction Buy List. We removed StarHub (Sept 3), Mediatek
                                 (Sept 4) from our Conviction Buy List, and Hana Tour Service (Sept 2) from our Conviction Sell List. We
                                 reiterated our Conviction Calls on Buy-rated SINA Corporation, China Steel Corporation, Unitech and on Sell-
                                 rated Ranbaxy Laboratories.
                                 Japan CL performance for week ended Sept 4
                                 The Japan CL decreased by 3.0% during the week compared with a 3.5% decline for the TOPIX. Year-to-
                                 date, Japan CL is up 0.2% compared with a 10.2% increase for the TOPIX. Major outperformers during the
                                 week were: Tokyo Steel Manufacturing (+4%), Citizen Holdings (+3%), Jupiter Telecommunications (+3%),
                                 Point (+2%). Major underperformers were: Alps Electric (-18%), Sumitomo Heavy Industries (-4%), Canon (-
                                 3%), ORIX JREIT (-3%).
                                 Japan CL additions, removals, reiterations for week ended Sept 4
                                 There were no additions or removals to the Conviction List during the week. We reiterated our Conviction
                                 Calls on Buy-rated Canon, Citizen Holdings and Nissan Chemical Industries.
                                 AEJ and Japan Conviction Calls in focus for week ending Sept 11
                                 We will be focused on the following stock which we expect to report Q1/H1 results: State Bank of India (Buy,
                                 Sept 7) and Agile Property (Buy, Sept 9).



Pan Asia: RelVal Round-up: Your 2-min guide to our best relative value ideas                                                                 14

                                 Mike Warren (Hong Kong): mike.warren@gs.com, +852-2978-1383
                                 Goldman Sachs (Asia) L.L.C.
                                 Pulkit Patni (Hong Kong): pulkit.patni@gs.com, +852-2978-0723
                                 Goldman Sachs (Asia) L.L.C.
                                 Relative value product for both long-only and long/short investors
                                 Our Investment Review Committee (IRC), comprising Directors of Research and senior sector analysts,
                                 works closely with our analysts to source ideas. Relative value situations such as stub and pair trades
                                 regularly arise in IRC discussions with our analysts. This product focuses on stub situations that have arisen
                                 in IRC meetings and is aimed not only at long/short investors. We believe our stub ideas can also provide
                                 long-only investors with buy/sell signals in shares of both the holdco and its listed holdings.
                                 We have holdco research on all 32 stubs we cover in Asia
                                 This allows us to provide fundamental insights into catalysts and valuation factors that could cause holdco
                                 stub prices to rise/fall. Inside, we provide a click-through facility to latest GS research on all 32 holdcos.
                                 Detailed models on all stubs are also available on request. We see scope to expand our stub coverage when
                                 we initiate on relevant holdcos.




Goldman Sachs Global Investment Research
Asia-Pacific Morning Summary                                                                                                                   September 8, 2009



                                    Reiterations and stance changes during the week ended Sep 4
                                    During the week, our analysts published reports in which they reiterated their investment stance on Formosa
                                    Plastics (Neutral), Uni-President Enterprise (Neutral), and Hyundai Mobis (Neutral). These reports reinforced
                                    our existing investment stance on the stubs for each of these stocks. During the week, there were no
                                    investment stance changes on any of the 32 stub situations that we cover in Asia.




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Each equity and strategy research report excerpted herein was certified under Reg AC by the analyst primarily responsible for such report as follows: I, Name
of Analyst, hereby certify that all of the views expressed in this report accurately reflect my personal views about the subject company or companies and its or
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expressed in this report.




Goldman Sachs Global Investment Research
Asia-Pacific Morning Summary                                                                                                                      September 8, 2009




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Goldman Sachs Global Investment Research
Asia-Pacific Morning Summary                                                                                                                     September 8, 2009



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Goldman Sachs Global Investment Research
Asia-Pacific Morning Summary                                                                                                                           September 8, 2009



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