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DBS Group Research . Equity                                                                                                                              31 January 2008

Spotlight on…                                                                                           Updates & Results
(SP)Transport Sector: Land Transport Review (Overweight)
Land Transport Review. Over the last 2 weeks and over three                                             SINGAPORE
speeches, Mr. Raymond Lim, Minister for Transport and second
Minister for Foreign Affairs, reviewed Singapore’s Land transport                                       Transport Sector: See Spolight
development over the last 10 years and also outlined a new
roadmap for the next 10 to 15 years.                                                                    Results Snapshot
                                                                                                        CDL Hospitality Trusts: Largest hotel owner continues to deliver
(TB) Thanachart Cap: Huge investment gain boost FY08 net profit                                         BUY; S$2.04; CDREIT SP; Price Target: S$2.90
BUY (Upgrade from Hold); Bt13.90; TCAP TB; Price Target: 12-
Month Bt17.50 (Prev Bt17.00)                                                                            Guocoland: Significant presence home and away
We raised FY08F earnings by 58.0% to reflect Bt2.0bn (after tax)                                        BUY; S$4.40; GUOL SP; Price Target: S$5.60 (Prev S$6.16)
gain on investment from the sale of TBANK shares to BNS. But
                                                                                                        Macquarie MEAG Prime Real Estate Investment Trust: Strong FY07
TCAP will book higher minority interest in 2H08 onwards. We are
                                                                                                        results
positive oabout TCAP’s long term prospects, because BNS will
enhance TBANK’s retail business, trade finance and corporate loans                                      BUY; S$1.04; MMP SP; Price Target: S$1.63 (Prev S$1.51)
segment. But FY09F earnings might fall due to absence of
                                                                                                        Singapore Petroleum: Strong dividend boosted by record profit
investment gain.
                                                                                                        BUY; S$6.10; SPC SP; Price Target: S$7.27
(IJ) Astra International: Sustainable diversified growth
                                                                                                        Singapore Post: Defensive but lacks excitement
BUY (Upgrade from Hold); Rp27,050; ASII IJ; Price Target: 12-Month
                                                                                                        HOLD; S$1.05; SPOST SP; Price Target: S$1.30
Rp34,000 (Prev Rp20,121)
ASII should register robust growth in 2008, driven by sturdy                                            Suntec REIT: A good first quarter post ORQ
domestic auto sales and higher commodity prices. We raised 2008                                         BUY; S$1.47; SUN SP; Price Target: S$2.46
CPO price assumptions by 17% and coal price by 25%. Coal mine
acquisitions will boost its longer term prospects and secure
utilisation of United Tractors mining contracting division. We                                          MALAYSIA
raised FY07-09F EPS, and target price.
                                                                                                        MyETF-DJIM25: Islamic appeal for ethical funds (New listing)
Key Indices                                                                                             CURRENT PRICE: RM0.968
                                         % ch g vs                                                      TARGET PRICE: RM1.18
                     C lo se d a s a t   p re v io u s
In d ices               3 0 .1.0 8          clo se       Y T D (% ) Q T D (% )        M T D (% )
A sia
                                                                                                        HONG KONG
JC I In d e x                 2 ,61 0             0 .1        -4 .9         -4 .9              -4 .9
M X F EJ in d e x                48 5            -2 .0       -1 4 .5       -1 4 .5            -1 4 .5
H S C C I In d e x            5 ,06 3            -2 .9       -1 7 .1       -1 7 .1            -1 7 .1   Esprit Holdings: Still on a solid track
Hang Seng                   2 3 ,65 4            -2 .6       -1 5 .0       -1 5 .0            -1 5 .0   BUY; HK$93.55; 0330 HK; Target price: HK$134.00
KLCI                          1 ,38 4            -0 .3        -4 .2         -4 .2              -4 .2
KO SPI                        1 ,58 9            -3 .0       -1 6 .2       -1 6 .2            -1 6 .2
PCO M P                       3 ,25 7             1 .0       -1 0 .1       -1 0 .1            -1 0 .1
                                                                                                        THAILAND
T aie x                       7 ,54 4            -0 .4       -1 1 .3       -1 1 .3            -1 1 .3
SET                              76 3             1 .1       -1 1 .0       -1 1 .0            -1 1 .0
FSSTI                         3 ,00 0            -1 .6       -1 3 .4       -1 3 .4            -1 3 .4   Thanachart Capital PCL – See Spotlight
H S C EI In d e x           1 2 ,75 5            -4 .7       -2 0 .9       -2 0 .9            -2 0 .9
N ik k ei 2 25              1 3 ,34 5            -1 .0       -1 2 .8       -1 2 .8            -1 2 .8   Results Snapshot
U .S ./O th e rs                                                                                        PTT Exploration & Production: Slower sales, higher charges in FY07
D o w Jo n e s              1 2 ,44 3            -0 .3        -6 .2         -6 .2              -6 .2
                                                                                                        BUY; Bt 142; PTTEP TB; Price Target: Bt 168
S&P                           1 ,35 6            -0 .5        -7 .7         -7 .7              -7 .7
NA SDA Q                      2 ,34 9            -0 .4       -1 1 .4       -1 1 .4            -1 1 .4
FTSE 100                      5 ,83 7            -0 .8        -9 .6         -9 .6              -9 .6
                                                                                                        INDONESIA
Market Data                                                                                             Astra International - See Spotlight
                                       E P S G th (% )                          P E (x )
                                     08F             09F               08F                 09F
Sin g a p o re                       2 3 .2         1 5 .8             1 2 .8              1 1 .1
HK HS                                1 2 .9         1 2 .6             1 5 .7              1 4 .2
H K H SC C I (R e d )                3 0 .7         2 0 .9             1 7 .5              1 7 .4
H K H SC E I (H )                    2 4 .2         1 1 .2             1 6 .3              1 4 .6
M a la ysia                          1 9 .1            -               1 5 .0                 -
T h a ila n d                        1 2 .7          2 .8              1 0 .6              1 0 .3
In d o n e sia                       1 3 .4         1 6 .5             1 7 .6              2 2 .2
Source: DBS Vickers



www.dbsvickers.com
"In Singapore, this research report may only be distributed to Institutional Investors as
defined in the Securities and Futures Act, Chapter 289 of Singapore."
 Singapore

 Industry Focus
 DBS Group Research . Equity                                                                                              31 Jan 2008

 Overweight                 FSFSSTI : 3,000.03                     Transport Sector
                                                                   Land Transport Review
 ANALYST                                                               Land Transport Review. Over the last 2 weeks and over
 Paul Yong CFA +65 6398 7951                                       three speeches, Mr. Raymond Lim, Minister for Transport and
 paulyong@dbsvickers.com                                           second Minister for Foreign Affairs, reviewed Singapore’s Land
                                                                   transport development over the last 10 years and also outlined
                                                                   a new roadmap for the next 10 to 15 years.
                                                                       The main aim is to increase public transport usage. In a
 SINGAPORE TRANSPORT                                               nutshell, the Government aims to increase and promote public
                               Price    Mkt Cap Target Price       transport usage to ease congestion to support future growth,
                                  S$       S$m            S$       by a) improving the quantity and quality of bus services
 ComfortDelgro                 1.51       3,148            2.33    available to the public, b) improving the standards and
 SMRT                          1.69       2,560            1.78    doubling of the rail network by 2020 and last but not least, c)
 Source: DBS Vickers
                                                                   ensuring smooth flowing roads by adjusting ERP rate
                                                                   structures and lowering vehicle growth rates.
                                                                       This should benefit land transport operators in the long-
                                                                   term. Whilst the new roadmap also involves the potential
 ComfortDelgro:     ComfortDelGro Corporation Limited
 provides taxi, bus and rail passenger transport services,
                                                                   introduction of new operators, we are of the view that the
 car rental and leasing, automotive engineering and                current incumbents, given their high level of efficiency and
 maintenance services, inspection and assessment services,         scale, should continue to dominate their existing spheres of
 and outdoor advertising. It is Singapore’s largest bus and        influence for some time to come. In the long run, higher public
 taxi operator.
                                                                   transport usage should be positive for both although
 SMRT:     SMRT is Singapore’s other significant public            immediate impact from this piece of news is immaterial. We
 transport operator and is primarily involved in operating         prefer ComfortDelgro (BUY, TP S$2.33) over SMRT (HOLD, TP
 the main MRT line in Singapore. Also provides bus and             S$1.78), as the former offers a more attractive yield at 6.1%.
 taxi services along with advertising and retail outlet
 rental services.
                                                                   Whilst the new roadmap essentially highlights the of government's
                                                                   long term plans to improve and encourage public transport usage, we
                                                                   believe that any significant change will take some time to effect and
 Valuations                                                        that there should be no immediate impact for operators, though
                                                                   both SMRT and ComfortDelgro will start to make plans for the future.
                       Price       PER    Hist.             Net
                                                                   We briefly address 3 key areas of impact:-
                        S$      CY07 CY08 P/B              Yield
                                                                   Revenue: Over the long term, this is positive for both land transport
                                                                   operators since these initiatives should help to improve public
 ComfortDelgro         1.51      13.2    11.5     1.7      6.1%
                                                                   transport ridership.
 SMRT*                 1.69      18.5    17.2     4.0      4.4%
                                                                   Cost: Given the push for greater comfort for commuters, and
  *Calendarised Valuation Multiples
                                                                   increased frequency for journeys, operators may face higher costs in
                                                                   order to fulfill the required standards. However, this may be offset by
                                                                   subsidies or incentives from the government in various forms or
                                                                   perhaps even higher fares (justifying higher service levels).
                                                                   Competition: Whilst the possibility of allowing new operators for
                                                                   the bus and rail sectors would now be real, we are of the opinion
                                                                   that the threat is still limited, given the incumbents’ familiarity
                                                                   and cost advantages of already operating in Singapore. Thus, we
                                                                   may see CD operating trains and SMRT operating buses rather
                                                                   than brand new entrants, who will find it harder to compete.

                                                                   We prefer ComfortDelgro over SMRT as the former is trading at
                                                                   13.2x CY07 PER and 11.5x CY08 PER, offering 6.1% net yield
                                                                   compared to SMRT, which is trading at 18.5x CY07 and 17.2x CY08
                                                                   PER, offering less than 4.5% net yield.



www.dbsvickers.com
Refer to important disclosures at the end of this report
Industry Focus                                                                                    Transport Sector


The three speeches that Mr Raymond Lim made were largely pertaining to how the Singapore Government
aims to improve the public transport system and public transport usage. We summarize the three speeches
below:-


18 Jan 2008, At the launch of the Land Transport Gallery
Roads take up 12% of Singapore’s total land area and demands on the land transport system are set to
increase by 60%, from 8.9m daily journeys to 14.3m by 2010.
The government aims to increase public transport usage through initiatives in the following areas:-
1) Bus Services
Investing not only in capacity but also in quality of the public bus system. This would include
    a)   Investing more in Hub and Spoke system, with 1) LTA undertaking Centralised Bus Planning, 2)
         distance-based through fares to facilitate transfers, 3) bus priority measures to speed up bus travel,
         4) integrated public transport hubs and service information
    b)   Introducing more competition to drive efficiency and service improvements by 1) enhancing the
         contestability of Bus Services i.e. gradually opening up the basic bus service sector and 2) more
         premium niche bus services and other non-basic services.


25 Jan 2008, At Visit to Kim Chuan Depot


By 2020, people in the city will be able to reach an MRT station within 400m on average, with a denser
network of MRT stations like Tokyo or London. Other areas not served today by MRT will be linked by MRT.
2) Doubling of Rail Network
Investing more in Singapore’s rail network. This would include.
         a)   New rail lines to be built, such as 1) the Thomson Line, which will run from the CBD to
              Woodlands, connecting estates that currently do not have a direct link and 2) the Eastern
              Regional Line, which would run from Marina Bay to Changi, serving eastern residential estates
              such as Tnajong Rhu and Siglap.
         b)   New extensions to North-South and East-West Lines, to be completed by 2015.
              Including the Circle Line and Downdown Line, the new rail lines will double Singapore’s rail
              network from 138km currently to 278km by 2020 and carry 3 times as many journeys.
         c)   Increasing capacity and frequency to improve comfort and the quality of rides and also reduce
              waiting time. Platform screen doors for above-ground stations will also be installed gradually.
         d)   Bringing forward the opening of the Circle Line (to mid-2009 from 2010) and Downtown Line 3
              (by 2 years) and opening more stations earlier.
         e)   Introducing more competition to drive efficiency and service improvements by 1) shortening the
              operating license from the current 30 years and 2) allowing operators to compete for the right
              to operate rail services.
There also initiatives to help and address public transport for the elderly and less mobile commuters, access
for poorer Singaporeans, cyclists and taxis.


30 Jan 2008, At Visit to Kallang-Paya Lebar Expressway
The LTA will continue to improve roads across Singapore but the pace will slow to 0.5% growth a year from
1% a year previously. To tackle congestion more efficiently, the government will, in addition to previously
mentioned initiatives to raise public transport usage, ensure that the ERP system remains effective in
managing traffic.

3) ERP system Update
In essence, more ERP gantries will be introduced and ERP charges will be raised to effect and ensure
continued smooth traffic in the city area. Additionally, vehicle population growth will be reduced from 3%
currently to 1.5% in the future i.e. less COEs handed out. However, road tax and Additional Registration Fees
will be reduced.




                                                                                                                  2 of 4
Industry Focus                                                                                                Transport Sector


DBSV recommendations are based an Absolute Total Return* Rating system, defined as follows:
STRONG BUY (>20% total return over the next 3 months, with identifiable share price catalysts within this time frame)
BUY (>15% total return over the next 12 months for small caps, >10% for large caps)
HOLD (0-15% total return over the next 12 months for small caps, 0-10% for large caps)
FULLY VALUED (negative total return i.e. > -10% over the next 12 months)
SELL (negative total return of > -20% over the next 3 months, with identifiable catalysts within this time frame)



Share price appreciation + dividends
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(www.thomson.com/financial);       Factset    (www.factset.com);     Reuters    (www.rbr.reuters.com);   Capital  IQ
(www.capitaliq.com) and Bloomberg (DBSR GO). For access, please contact your DBSV salesperson.


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The research is based on information obtained from sources believed to be reliable, but we do not make any
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does not have regard to the specific investment objectives, financial situation and the particular needs of any specific
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persons associated with any of them may from time to time have interests in the securities mentioned in this document.
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effect transactions in securities mentioned herein and may also perform or seek to perform broking, investment
banking and other banking services for these companies.
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banking transaction as a manager or co-manager in the past twelve months. Any US persons wishing to obtain further
information, including any clarification on disclosures in this disclaimer, or to effect a transaction in any security
discussed in this document should contact DBSVUSA exclusively.

ANALYST CERTIFICATION
The research analyst primarily responsible for the content of this research report, in part or in whole, certifies that the
views about the companies and their securities expressed in this report accurately reflect his/her personal views. The
analyst also certifies that no part of his/her compensation was, is, or will be, directly, or indirectly, related to specific
recommendations or views expressed in this report. As of 31 Jan 2008, the analyst and his / her spouse and/or relatives
who are financially dependent on the analyst, do not hold interests in the securities recommended in this report
(“interest” includes direct or indirect ownership of securities, directorships and trustee positions).

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             securities recommended in this report as of 29-Jan-2008.
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             U.S.-registered broker-dealer, may beneficially own a total of 1% or more of any class of common equity
             securities of the subject company as of 31 Jan 2008.
  3.         Compensation for investment banking services:
                   DBSVR, DBSVS, DBS Bank Ltd and/or other affiliates of DBSVUSA may have received compensation,
                   within the past 12 months, and within the next 3 months may receive or intends to seek
                   compensation for investment banking services from the subject company.
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                   participated in any investment banking transaction as a manager or co-manager in the past twelve
                   months. Any US persons wishing to obtain further information, including any clarification on
                   disclosures in this disclaimer, or to effect a transaction in any security discussed in this document
                   should contact DBSVUSA exclusively.




                                                                                                                                3 of 4
Industry Focus                                                                                              Transport Sector


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                                                                                                                                 4 of 4
Singapore

Results Snapshot
DBS Group Research . Equity                                                                                                        31 Jan 2008

 Guocoland (GUOL SP)                                                                                                                   Buy S$4.40
 Significant presence home and away                                                                              Price Target : S$ 5.60 (Prev S$ 6.16)
 Reporting           Performance     Mkt Cap              FY           EPS          EPS Revision        PE (x)         PBV (x)        Net Dividend
 Period                                                               (S cts)                                                          Yield (%)
 1H 2008             Below           S$3,905m         2008             26.0               -             16.9             1.8               1.5
                                     US$2,753m        2009             43.2               -             10.2             1.6               1.8

Result Summary                                                 Comment on Results                         Recommendation
FY Jun (S$ m)             1H07         1H08         yoy        GuocoLand reported 1H08 results            Currently,       potential      revenue
                                                    chg        with revenue and net profit growing        contributions of estimated S$3bn-
P&L Items                                                      by 114% and 420% to S$402m and             S$3.5bn that has not been booked from
Sales                     187.8        402.1      114%         S$61m respectively, mainly attributed      Singapore projects. Therefore earnings
Gross Profit                                      420%         to significant profit recognition from     for the next two years are likely to be
                          17.5         91.1                    West End Point project. Although           Singapore centric. Sophia Residences is
Associates/JV inc.        12.0          3.5       -71%         below expectations, we forecast full       likely to be launched in 3Q08, followed
Pretax Profit                                     78%          year earnings to be supported by           by the Leedon project in 4Q08.
                           48.0         85.2
                                                               profit recognition from Le Crescendo,      Beyond a two-year time frame, earnings
 Net Profit                52.7         60.6      15%
                                                               The View@ Meyer and launched units         contribution is likely to be from the
                                                               in the Quartz, as well as possible         China market, where residential sales
                                                               contributions     from     Goodwood        from      integrated     projects    in
                                                               Residence in which recently 97 units       Dongzhimen (Beijing) and Changfeng
                                                               were sold to Kuwait Finance House.         Putuo (Shanghai) are targeted for
BS & CF Items
NAV                        1.78         2.30      29%          Following completion of acquisitions       08/early 09. As for the construction
                                                               for Leedon Heights, Palm Beach             progress     of     Dongzhimen,     the
Net Cash/(Debt)            0.70         1.06       NA
                                                               Garden,     Sophia    Court     and        transportation hub and train operations
                                                               Dongzhimen sites, net gearing              are likely to complete by April 08, in
                                                               currently c.1.1x remains reasonable        time for the Beijing Olympics.
                                                               for a capital intensive real estate    Buy recommendation maintained with
                                                               developer.                             target price adjusted to S$5.60; fair
                                                                                                      value pegged at parity to RNAV.
                                                                                ANALYST: Cheng Wee Tan +6563987962 chengwee@dbsvickers.com
      RNAV estimate
                                                                                 Stake   Tenure     NLA (sf)       Valuation
                                                                                owned    (Years)                    (S$psf)       Valuation
        Investment Properties
        Tung Centre                                                             100.0%        999   142,202           3,200             455.0

        Less: Book Value of Investment properties                                                                                       312.8
        Surplus/(Deficit) (1)                                                                                                           142.3

        Development Properties (NPV Surplus)
          Singapore                                                                                                                    1219.2
          China                                                                                                                        1291.4

        NPV surplus (2)                                                                                                                2510.6

        Potential surplus from Integrated Developments (3)                                                                              977.2

        Cash from Rights Issue (4)                                                                                                      554.7

        Book Shareholder's Equity (5)                                                                                                  1406.0

        RNAV (1+2+3+4+5)                                                                                                               5590.8
        Fully Diluted Share base (m)                                                                                                    998.5
       RNAV per share ($)                                                                                                                5.60
      Source: DBS Vickers


www.dbsvickers.com
Refer to important disclosures at the end of this repor
         Results Snapshot


    CDL Hospitality Trusts (CDREIT SP)                                                                                         Buy S$2.04
    Largest hotel owner continues to deliver                                                                            Price Target : S$ 2.90
    Reporting           Performance   Mkt Cap           FY          DPU        DPS Revision     PE (x)    P/RNAV        Distribution
    Period                                                         (S cts)                                  (x)           Yield (%)
    4Q 2007             In line       S$1,679m        2008          10.9            -            19.4       1.6              5.3
                                      US$1,184m       2009          12.9            -            16.9       1.7              6.3
    Result Summary                                         Comment on Results                      Recommendation
    FY Dec (S$ m)             4Q06      4Q07      y-o-y    CDL HT delivered positive results in According to latest tourism statistics
                                                   chg     line with expectations. Strong DPU released by STB, the Singapore hotel
    P&L Items                                              growth was generated in 4Q07 with industry continues to see no letup in
    Gross revenue            16.9       28.0     65.2%     DPU of 2.76 cents, reflecting y-o-y terms of growth. Industry RevPAR
    NPI                                          73.1%     increase of 56.8% from 1.76 cents in reflects a 25.6% increase y-o-y for FY07;
                             15.6       26.9               4Q06. This was driven by strong the highest ever 10.3m visitors arrivals
    Revaluation gains        132.9     239.4     80.2%     RevPAR performance of Singapore to Singapore for the same period
    Distribution inc.        12.4       22.8     83.4%     assets    of    +34.5%   for    4Q07, registered y-o-y growth of 5.4%.
                                                           registering full year FY07 RevPAR We reiterate CDL HT’s position currently
                                                           growth of 30.8% to S$174 from as the largest hotel owner in Singapore
    DPU (Scts)               1.76       2.76    56.8%      S$133 in FY06. Apart from average with a portfolio of 2,324 rooms, and
    NPI Margin (%)          92.3%      96.0%     4.1%      room rate increase (+23.5%), RevPAR likely to remain Singapore-centric for
                                                           was also supported by firm occupancy the next two years. CDL HT remains our
                                                           performance which rose by 7.2% or key pick for the hotel sector with direct
    BS & CF Items                                          5.3ppts to 87.3%.                       leverage on the rising RevPAR in
                                                             With upward revaluations for the        Singapore. We have a BUY call on CDL
                                                             portfolio by S$296.8m for FY07          HT with DCF based target price of
    NAV                       1.03      1.61      56.3%
                                                             (+23% y-o-y excl Novotel Clark Quay),   S$2.90 per unit. The stock is trading at
    Leverage                 34.7%     18.7%        na       this further reflects the strength of   an attractive FY08 yield of 5.3% and
                                                             the Singapore hotel sector and asset    6.3% yield for FY09 on the premise of
                                                             valuations. Gearing now stands at       c.20% DPU growth.
                                                             18.7%, which translates to debt
                                                             headroom of S$792m 1 sufficient to
                                                             fund potential acquisitions for the
                                                             next two years.
                                                                          ANALYST: Cheng Wee Tan +6563987962 chengwee@dbsvickers.com
1
    Based on target leverage of 45%




                                                                                                                                         2 of 7
       Results Snapshot



Macquarie MEAG Prime Real Estate                                                                                             Buy S$1.04
Investment Trust (MMP SP)                                                                              Price Target : S$ 1.63 (Prev S$ 1.51)
Strong FY07 results
Reporting        Performance      Mkt Cap      FY       DPU     DPU       DPS Revision        PE (x)      P/RNAV           Distribution
Period                                                   (S    Growth                                       (x)             Yield (%)
                                                        cts)
FY07             In Line          S$989m      2008      7.4      13%        Up (1.3%)         15.2           0.6               7.1
                                  US$698m     2009      7.7      4%         Up (1.5%)         14.7           0.6               7.4

Result Summary                                       Comment on Results                        Recommendation
FY Dec (S$ m)          FY06         FY07    y-o-y    MMP REIT furnished a good set of
                                             chg     FY07 results that are in line with        Lease expiry profile benefits MMP.
P&L Items                                            expectations.     Gross      revenues     With up to 24.1% and 13.9% of the
Gross Revenues             89.9     103.0   14.6%    increased 14.6% yoy to S$103m while       REIT’s NLA due to expire in FY08 and
Net Property                                10.9%    NPI increased 10.9% y-o-y to              FY09 respectively, their lease expiry
Income                                               S$76.8m, the slight lower incremental     profile positions MMP to benefit from
                           69.3     76.8             change was mainly due to renovation       positive rental reversions in a strong
Distributable                               7.5%     works for AEI done in Wisma Atria.        retail outlook
Income                 54.9         59.1             DPU was up 6.9% to 6.2 cents.
Total Return           217.4        487.1   >100%                                              Toshin Master Lease renewal in June’08.
DPU                    5.79c        6.19c    6.9%    Revaluation gains of S$449m in FY08.
                                                                                               Under this lease arrangement, reversions
                                                     MMP also benefited from rising
                                                                                               are capped at 25% above preceding
                                                     capital values for its prime assets in
                                                                                               levels. We believe that MMP will be able
BS                     3Q07        4Q07     % Chg    Orchard, leading to increased NAV by
                                                                                               to enjoy 15% - 25% reversion upside. In
                                                     27% to S$1.61.
Gearing                34.2%       29.0%                                                       our assumptions, we have taken Toshin
NAV                     1.26        1.61    27%                                                reversions to be 15%.
                                                     Positive rental reversions observed.
                                                     In FY07, for 13% of total NLA             Share buy-back scheme approved.
                                                     expiring, MMP achieved an average         Currently trading at 7.1% FY08F yield,
                                                     of 20% increase in office rent            MMP intends to execute its share buy-
                                                     renewals (S$7.70 – S$12.10) above         back scheme, to the maximum of 10%
                                                     current rates (S$4.90 to S$5.30).         of share capital. We view this as a signal
                                                     Going forward, we expect MMP to           from management that the stock is
                                                     continue securing renewals at similar     undervalued from their perspective.
                                                     rate increases.
                                                                                               Maintain BUY with revised TP S$1.63
                                                                                               based on DCF. We have upped our TP
                                                     Gearing at 20%. Capacity for up to        based on I) higher reversion rates from
                                                     S$662m worth of debt-funded               Toshin, ii) lower discount rate (4.75%
                                                     acquisitions.                             based on current cap rates of prime
                                                                                               retail, office assets).
                                                          ANALYST: Singapore Research Team +65 6533 9688 research@dbsvickers.com




                                                                                                                                       3 of 7
        Results Snapshot



Singapore Petroleum (SPC SP)                                                                                                 Buy S$6.10
                                                                                                                           Price Target : S$ 7.27
Generous dividend boosted by record profit
Reporting          Results vs            Mkt Cap           FY         EPS (S cts)    EPS Revision    PE (x)        P/BV           Dividend
Period            Expectations                                                                                      (x)           Yield (%)
FY 2007              In line             S$3,150m         2008           96.0           none          6.4           1.6              7.9
                                        US$2,219m         2009           89.9           none          6.8           1.4              7.4


Results Summary                                            Comment on Results                               Recommendation
FY Dec (S$ m)            FY06           FY07          Chg •     FY07 results were in line with our          •    Although refining margin has
                                                     y-o-y expectations. Net profit surged 79% to a         softened    to   US$5-6/bbl    (Reuters’
P&L Items                                                  record high of S$508.3m. Final dividend of       complex margin) currently from last
Sales                    8,574.2        8,766.7      2.3% 40 cent for 2H07 was declared with XD on          year’s average of US$7.6/bbl, this is not
Gross profit               501.8          747.1     48.9% 25 Apr 2008. Including 20 cents interim           alarming but rather reflecting the high
EBIT                       349.4          575.4     64.7% dividend, full year dividend was 60 cents         volatile nature of the industry. We
Pretax profit              338.5          581.4     71.8% implying 61% payout.                              expect the balance between growing
Net profit                 284.6          508.3     78.6%                                                   oil demand and tight refining capacity
                                                           •    Sales rose slightly by 2% to S$8.77bn       to continue. We expect refining margin
                                                           as lower sales volume (due to refinery           to remain healthy in 2008, averaging
BS & CF Items                                              maintenance) was offset by higher oil            US$7.2/bbl, slightly softened from
Capex                     107.9           407.7    277.9% prices. The record profit was attributed          US$7.6/bbl in 2007
Net cash/(debt)           (22.7)        (361.7)            mainly to strong downstream business.
Net debt/equity (x)         0.01           0.20            SPC’s refining margin rose from US$4.5/bbl       •    SPC continues to focus new
                                                           in 2006 to US$7/bbl, in tandem with              investment in E&P. We expect earnings
                                                           regional trends.     Upstream (E&P) sales        contribution from E&P to rise sharply to
                                                           volume also jumped 51% on the back of            23% in 2008 on the back of full-year
                                                           new oil production and the acquisition of        contribution from Oyong field and
                                                           producing assets in Bohai Bay, China.            Bohai Bay.     Nonetheless, net profit
                                                           Refining remained the key operation              should fall slightly 3% due to lower
                                                           dominating 98% of sales and 91% of               refining margin and higher effective tax
                                                           operating profit.                                rate assumptions.
                                                           •   Capex rose sharply to S$407.7m from          •    SPC is attractive for its cheap
                                                           the acquisition of the Bohai assets. Net         valuation and high dividend yield.
                                                           debt/equity increased to fund the                Maintain Buy with a target price of
                                                           acquisition, but remained healthy at 0.2x.       S$7.27 (sum-of-parts).

                                                          ANALYST:              Singapore Research Team +65 6533 9688 researchzysew@dbsvickers.com


   Singapore Post (SPOST SP)                                                                                                           Hold S$1.05
   Defensive but lacks excitement                                                                                             Price Target : S$ 1.30
   Reporting           Performance        Mkt Cap                FY          EPS      EPS Revision      PE (x)        PBV (x)        Net Dividend
   Period                                                                  (S cts)                                                    Yield (%)
   3Q 2008             Inline             S$2,020m           2008            8.0           NIL           13.2           9.6               6.4
                                          US$1,424m          2009            8.0           NIL           13.1           8.6               6.4
   Result Summary                                                 Comment on Results                      Recommendation
   FY Mar (S$ m)          3Q2007         3Q2008          y-o-y    Net underlying profit of S$36.7m was Maintain HOLD with target price of
                                                          chg     up 8% y-o-y and inline with our S$1.30. Due to its healthy dividend yield
   P&L Items                                                      estimate of S$37m. Interim dividend of 6.4%, Singpost has defensive
   Sales                    111.8           122.0        9.2%     of 1.25 cents was also inline with our characteristics. However there are no
   Operating Profit                                      6.7%     expectations.                           significant catalysts in sight. Rather,
                            43.3            46.2
                                                                  Decline      in  operating    margins. chances are that margins will slide
   EBIT                     44.4            47.3         6.5%
                                                                  Margins declined by 90 basis points down further with competition from
   Exceptional Gain          0.1             0.1          0%      to 37.8% y-o-y due to rising wages new players.
   Pretax Profit                                         8.2%     and higher traffic expenses. Traffic Management has guided that they are
                             42.0            45.4
                                                                  expenses were higher due to higher looking           out      for      acquisition
   Net Profit                34.1            36.8        7.8%
                                                                  volume and partly because of higher opportunities for growth. As such we
   EPS (S cts)               1.78            1.91        7.5%     oil price.                              don’t think investors should expect
   Operating Margin         38.7%           38.7%                 4Q08 outlook does not seem dividends beyond the stipulated 85%
                                                                  interesting. Most of the 8% y-o-y payout ratio.
                                                                  growth in the current set of results
   BS & CF Items (m)                                              came from higher postal fee in 3Q08
                                                                  compared to 3Q07. However as
   Capex                         2.8         3.1         11%
                                                                  higher postal fee came into effect in
   Net Cash/(Debt)              (247)       (210)                 Dec 06 and is already factored in
                                                                  4Q07 results, we think that 4Q08
                                                                  earnings could decline slightly YoY
                                                                  with lower operating margins.
                                                                                        ANALYST: Sachin Mittal +65 6398 7950 sachin@dbsvickers.com
                                                                                                                                             4 of 7
      Results Snapshot



Suntec REIT (SUN SP)                                                                                                      Buy S$1.47
                                                                                                                   Price Target : S$ 2.46
A good first quarter post ORQ
Reporting          Performance   Mkt Cap           FY      DPU         DPU       DPS        PE (x)      P/RNAV         Distribution
Period                                                    (S cts)    growth Revision                       (x)          Yield (%)
1Q 2008            In Line       S$2,185m      2008        10.1        23%         -         17.1         0.7               6.8
                                 US$1,541m     2009        11.1         9%         -         16.0         0.8               7.5
Result Summary                                      Comment on Results                        Recommendation
FY Sep (S$ m)            1Q07       1Q08     yoy    Suntec REIT reported 1Q08 figures in Positive Rental contributions in FY08.
                                             chg    line with expectations. Net property We expect further upside from rental
P&L Items                                           Income was up 8% y-o-y to S$37.4m reversions in FY08 with up to 69% and
Gross Revenue            45.9       54.3    18%     on top of a 18% increase in gross 53% of total office and retail NLA
                                                    revenues to S$54.3m over the same expected to expire in FY08 and FY09
Net Property                                        period. This was mainly due to higher respectively.
Income                   34.7       37.4    8%      passing retail rents (+10% y-o-y to
                                                    S$32.7m)       post-AEI     initiatives Suntec       strata-titled  office    space
Income available                                    performed in Suntec City. Office rents purchases.         Suntec embarked on a
for distribution         27.0       33.5    24%     also increased 33.3% to S$21.7 due to strata-titled office space buy-up scheme
Total Return             20.9      163.9   >100%    strong reversions and replacement over the past few months, purchasing a
                                                    growth in rates. In addition, the further 11,786 sqf office space in 1Q08.
                                                    purchase of ORQ contributed S$6.4m We expect a further 16,082 sqf to be
DPU                      1.96       2.27   16.1%                                              completed in the near future.
                                                    to net income.
                                                    Gearing at 31%. Suntec’s current Will we see overseas assets soon? Past
                                                    gearing gives it a further S$790m its imposed target of S$5bn worth of
BS Items                 FY07       1Q08            worth of debt headroom till its local assets, management is looking at
Gearing                  20%         31%            targeted 45% gearing ratio for diversifying                 and    growing       its
NAV                      2.204      2.263           potential     acquisitions.   Average geographical asset base.
                                                    financing cost is 3.13%.
                                                                                              Maintain BUY with TP S$ 2.46 based on
                                                    As at 1Q08, NAV per unit stood at
                                                                                              DCF. We maintain our call on Suntec
                                                    S$2.26.
                                                                                              based on 1) upward rental reversions
                                                                                              expected in FY08 and FY09; 2) Positive
                                                                                              contributions expected from ORQ in
                                                                                              FY08, 3) Further upside surprise from
                                                                                              potential overseas acquisitions in the
                                                                                              future. 4) Trading at 65% its NAV.


                                                             ANALYST: Singapore Research Team +65 6533 9688 research@dbsvickers.com




                                                                                                                                    5 of 7
Results Snapshot



DBSV recommendations are based an Absolute Total Return* Rating system, defined as follows:
STRONG BUY (>20% total return over the next 3 months, with identifiable share price catalysts within this time frame)
BUY (>15% total return over the next 12 months for small caps, >10% for large caps)
HOLD (0-15% total return over the next 12 months for small caps, 0-10% for large caps)
FULLY VALUED (negative total return i.e. > -10% over the next 12 months)
SELL (negative total return of > -20% over the next 3 months, with identifiable catalysts within this time frame)

Share price appreciation + dividends

DBS Vickers Research is available on the following electronic platforms: DBS Vickers (www.dbsvresearch.com); Thomson
(www.thomson.com/financial);       Factset    (www.factset.com);     Reuters    (www.rbr.reuters.com);   Capital  IQ
(www.capitaliq.com) and Bloomberg (DBSR GO). For access, please contact your DBSV salesperson.

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ANALYST CERTIFICATION
The research analyst primarily responsible for the content of this research report, in part or in whole, certifies that the
views about the companies and their securities expressed in this report accurately reflect his/her personal views. The
analyst also certifies that no part of his/her compensation was, is, or will be, directly, or indirectly, related to specific
recommendations or views expressed in this report. As of 31 Jan 2008, the analyst and his / her spouse and/or relatives
who are financially dependent on the analyst, do not hold interests in the securities recommended in this report
(“interest” includes direct or indirect ownership of securities, directorships and trustee positions).

  COMPANY-SPECIFIC / REGULATORY DISCLOSURES

   1.        DBS Vickers Securities (Singapore) Pte Ltd and its subsidiaries do not have a proprietary position in the
             securities recommended in this report as of 29-Jan-2008.
   2.        DBSVR, DBSVS, DBS Bank Ltd and/or other affiliates of DBS Vickers Securities (USA) Inc ("DBSVUSA"), a U.S.-
             registered broker-dealer, beneficially own a total of 1% or more of any class of common equity securities of
             CDL Hospitality Trusts, Macquarie MEAG Prime Real Estate Investment Trust, Suntec REIT as of 31 Jan 2008.
   3.        Compensation for investment banking services:
                   DBSVR, DBSVS, DBS Bank Ltd and/or other affiliates of DBSVUSA have received compensation, within the
                   past 12 months, and within the next 3 months may receive or intends to seek compensation for
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                   DBSVUSA does not have its own investment banking or research department, nor has it participated in
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                   persons wishing to obtain further information, including any clarification on disclosures in this
                   disclaimer, or to effect a transaction in any security discussed in this document should contact DBSVUSA
                   exclusively.




                                                                                                                                    6 of 7
Results Snapshot


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                                                                                                                                    7 of 7

7
Malaysia

Company Focus
 Company Focus




DBS Group Research . Equity                                                                                           31 Jan 2008


CURRENT PRICE: RM0.968@                                    MyETF-DJIM25
TARGET PRICE: RM1.18^                                      Islamic appeal for ethical funds
@ Based on its NAV per unit as at 30 Jan 08                    MyETF-DJIM25, which stands for MyETF Dow Jones Islamic
^ Derived from HDBSVR medium-term target prices for
the constituent stocks
                                                           Market Malaysia Titans 25, is the second equity-linked Exchange
                                                           Traded Fund (ETF) to be listed on the Malaysian bourse. It is a
ANALYST                                                    type of security that resembles a unit trust but is traded like
Goh Yin Foo, CFA · (603) 2711 2222                         equity shares, where investors could buy and sell the ETF units
yinfoo@hdbsvr.com.my                                       on a real-time basis when it makes its debut on the trading floor
                                                           today, 31 January 2008.
AT A GLANCE
Adviser:                                          CIMB
                                                               Designed to track the Dow Jones Islamic Market Malaysia
                                                           Titans 25 Index, MyETF-DJIM25 offers exposure to a portfolio of
Manager:                                       i-VCAP
                                                           25 quality stocks with a plantation flavour. The six plantation-
Participating dealers:                          - CIMB
                                                           related companies on the list make up slightly more than half of
                                                  - OSK
                                                           the total weighting in the basket.
Authorised fund size (units)                      10.0b
Number of units in                             840.0m          MyETF-DJIM25 will appeal to Islamic funds, as it will only
 circulation (on listing date)                             invest in companies that are in compliance with Shariah
                                                           principles. Our target price works out to be RM1.18 per unit,
Closing date: 28 Jan 08#                                   after penciling in the house fair valuations for 13 of the 25
Listing date: 31 Jan 08                                    stocks while keeping the share prices for the rest. This represents
                                                           a medium-term potential upside of 21.9% from its NAV-based
# - Offering is via placement subscription.                current price of RM0.968.

                                                           Second ETF on the block. After FBM30etf (which came on board in Jul last
                                                           year), MyETF-DJIM25 is the next equity-linked ETF to be traded on the
                                                           Malaysian stock exchange. With an authorised fund size of 10bn units,
                                                           the first tranche consists of 840m units, of which c.24% are currently in
                                                           the hands of institutional and retail investors following the placement
                                                           subscriptions.

                                                           Proxy to a basket of 25 companies. In one single investment vehicle,
                                                           MyETF-DJIM25 captures the diversified exposure of 25 listed Malaysian
                                                           companies with a combined market capitalisation of RM310bn. Its
                                                           weighting is dominated by the plantation sector, whereby the six
                                                           component stocks (namely Sime Darby, IOI Corporation, KL Kepong, PPB
                                                           Group, Batu Kawan and Asiatic) accounted for 53.7% of the total basket
                                                           weighting (based on closing prices on 24 Dec 07). Other key index-linked
                                                           counters measured by relative weights include DiGi (7.8%), MISC (6.2%)
                                                           and Gamuda (5.9%).
                                                           Medium-term target price is RM1.18. By feeding the house fair valuations
                                                           for 13 constituent stocks (and current market values for those outside our
                                                           research coverage) through our simulation model, we have derived a
                                                           target price of RM1.18 per MyETF-DJIM25 unit. Based on an initial unit in
                                                           circulation of 840m, this translates to an overall market value of
                                                           RM991.2m. Excluding any future income distribution, its medium-term
                                                           potential upside comes to 21.9%, from a current indicative price of
                                                           RM0.968, based on its latest net asset value (NAV).




www.dbsvickers.com
Refer to important disclosures at the end of this report
Company Focus                                                                                                          MyETF-DJIM25

     Highlights

     • ETF as an alternative asset class. MyETF Dow Jones Islamic Market Malaysia Titans 25 (or MyETF-
     DJIM25 in short) is the second Exchange Traded Fund (ETF) that tracks an underlying equity index to
     be listed (today, 31 Jan 08) on the Main Board of the Malaysian stock exchange. The first equity-linked
     ETF listing was FBM30etf on 19 Jul 07 (please refer to our research report dated 21 Jun 07).
     For those interested in knowing more about ETF (which essentially is a unit trust fund listed and traded on a
     stock exchange) as a financial instrument, a list of frequently asked questions (extracted from the Bursa
     Malaysia website) can be found in the appendix of this report.
     • Information summary of MyETF-DJIM25. With an authorised fund size of 10bn units, the investment
     scope of this ETF is to allocate:
              at least 90% of its assets in the shares of companies that are components of the underlying
              benchmark index;
              not more than 10% in cash or cash equivalents.
     For the first tranche, the total number of units in circulation stands at 840m units. Of which, we
     understand about 24% are presently held by institutional (other than the government-linked
     investment companies or GLICs) and retail investors via placement subscriptions.
     These ETF units are created by exchanging with the baskets of underlying shares that are supplied by
     seven GLICs (namely Valuecap, Khazanah, PNB, KWAP, EPF, LTAT and LTH). By doing so, the GLICs
     have unloaded part of their shareholdings in listed Malaysian companies, in line with the
     government’s objective to loosen its ownership of these counters. It is also not a coincidence to see i-
     VCAP Management (a wholly-owned licensed fund manager of Valuecap) as the manager of MyETF-
     DJIM25.
     Figure 1 shows the basic structure and information summary of MyETF-DJIM25.
     Figure 1(a): Overview of MyETF-DJIM25 structure


                  Shariah                                            Manager                   Trustee
            Adviser / Committee             Advisory           (i-VCAP Management         (Deutsche Trustees
          (CIMB Islamic Bank Bhd)             on                     Sdn Bhd)               Malaysia Bhd)
                                            Shariah
                                            matters
                                                                            MyETF-DJIM25


                                                       Basket of           New        Existing          Basket of
                                                       securities          ETF        ETF               securities
                                                                           units      units

                                              In-kind creation                                            In-kind redemption


                                                                            Participating Dealers
                                                                         CIMB Investment Bank Bhd
                                                                         OSK Investment Bank Bhd

                  Investors
                                                         Basket of            New        Existing         Basket of
                                                         securities           ETF        ETF              securities
                                                                              units      units

                                                In-kind creation                                          In-kind redemption
             Buy              Sell
             ETF              ETF
             units            units

                                        Buy / sell ETF units
              Stock Exchange                                                 Liquidity Providers
                                      Buy / sell basket of securities

     Source: Prospectus



                                                                                                                               2 of 10
Company Focus                                                                                                      MyETF-DJIM25

     Figure 1(b): Salient information of MyETF-DJIM25

      Particular                          Description
      Initial authorised fund size:       10b units
      Units in circulation (current):     840m units
                                          Based on the NAV of the fund on the dealing date immediately before the
                                          subscription date, except on the first day of the placement subscription period
      Initial issue price:                (which has been set at RM1.00 per unit).
      Basis of the retail price:          95% of the initial issue price
      Basis of the institution price:     98% of the initial issue price
      Creation unit block size:           1m units (currently)
      Benchmark index:                    The Dow Jones Islamic Market Malaysia Titans 25 Index
      Investment scope:                   - At least 90% in constituent stocks in the benchmark index; and
                                          - not more than 10% in cash or cash equivalents
                                          May also include other securities/investments in order to facilitate the fund's
                                          portfolio rebalancing activities.

      Fees and expenses:
      - Annual manager fee                0.40% (applied to the NAV of the fund, accrued daily)
      - Annual trustee fee                0.05% (applied to the NAV of the fund, accrued daily)
      - Licence fee                       0.04% (applied to the NAV of the fund, accrued daily)
      - Other fund expenses               0.05% (estimated, applied to the NAV of the fund p.a.)

      Source: Prospectus, MyETF-DJIM25 website.




     • Islamic screening. One salient feature of MyETF-DJIM25 (vis-à-vis FBM30etf or any other
     conventional ETF) is that the benchmark index that it tracks will only comprise constituent companies
     that are Shariah-compliant. As a general rule, Shariah investment policies and guidelines (which are
     established by a Shariah adviser/committee) only allow investments in securities and financial
     instruments that comply with the Shariah principles.
     Examples of the type of business activities that are prohibited include alcohol, tobacco, pork, music,
     pornographic production, restaurants & hotels/motels (except those not selling alcohol and non-halal
     food), casinos & gambling machines, the operation of movie theatres & cable television services as
     well as conventional financial services.
     However, investments in companies with mixed contributions from both permissible and non-
     permissible activities are authorised, provided the segmental contributions from non-permissible
     businesses are below certain tolerance levels (computed in terms of percentage of turnover and pre-
     tax profit). A Shariah adviser/committee will be responsible to ensure full compliance with these
     Shariah principles.
     • Mirroring the benchmark index. MyETF-DJIM25 is designed to track the Dow Jones Islamic Market
     Malaysia Titans 25 Index (DJIM25), as determined by Dow Jones (a global service provider that
     develops, maintains and licenses indexes for use as benchmarks and as the basis for investment
     products). Mathematically speaking, the ETF unit price should approximately equal to the prevailing
     DJIM25 Index value divided by a multiplier factor of 964.5. Its intention is to achieve a high positive
     correlation with a tracking error of less than 3% between NAV of the fund’s portfolio and the
     benchmark index, over time.
     Figure 2 shows a back-tested chart of the DJIM25 (which was constructed based on a reference value
     of 1,000 as of 17 January 2008). According to data made available on the website of Dow Jones, the
     basket of 25 component stocks is presently trading at a projected P/E multiple of 18.6x, a P/Book value
     of 3.7x and a dividend yield of 2.2%.




                                                                                                                            3 of 10
Company Focus                                                                                                                                                 MyETF-DJIM25

     Figure 2: DJIM25 index chart


        1020
        1000
         980
         960
         940
         920
         900
         880
         860
               17-Jan

                        18-Jan

                                 19-Jan

                                          20-Jan

                                                   21-Jan

                                                            22-Jan

                                                                     23-Jan

                                                                              24-Jan

                                                                                       25-Jan

                                                                                                26-Jan

                                                                                                           27-Jan

                                                                                                                    28-Jan

                                                                                                                             29-Jan

                                                                                                                                      30-Jan
     Source: Bloomberg



     • Plantation proxy. DJIM25 is made up of 25 constituents, weighted by market capitalisation and
     adjusted for free floats with a 20% cap on each security (see list in Figure 3). Their combined full
     market capitalisation stood at RM310bn as at 24 Dec 07 (representing c. 29.6% of the total RM1,048bn
     for the entire Malaysian stock market). Interestingly, there are six plantation counters in the list,
     namely Sime Darby, IOI Corporation, KL Kepong, PPB Group, Batu Kawan and Asiatic. Combined, they
     accounted for 53.7% of the total index weight (or a full market capitalisation of RM153.6bn) as at 24
     Dec 07.
     Figure 3: DJIM25 constituent stocks and their relative weights (as at 24 Dec 07)
      Stock Name                                                                                         Full market                               Relative
                                                                                                          cap (RMb)                            weight* (%)
      Sime Darby                                                                                                67.9                               19.80%
      IOI Corporation                                                                                           44.8                               18.69%
      DiGi.com                                                                                                  18.4                                7.78%
      KL Kepong                                                                                                 17.6                                6.76%
      MISC                                                                                                      37.6                                6.23%
      Gamuda                                                                                                     9.7                                5.92%
      PPB Group                                                                                                 12.4                                4.78%
      KNM Group                                                                                                  7.8                                4.66%
      PLUS                                                                                                      16.4                                3.24%
      SP Setia                                                                                                   4.8                                3.23%
      UMW                                                                                                        8.0                                2.75%
      Petronas Gas                                                                                              21.8                                2.23%
      Batu Kawan                                                                                                 4.8                                1.99%
      AirAsia                                                                                                    3.9                                1.95%
      Asiatic                                                                                                    6.0                                1.67%
      Dialog                                                                                                     2.6                                1.24%
      Lafarge M Cement                                                                                           4.7                                1.21%
      Zelan                                                                                                      3.1                                1.14%
      Maybulk                                                                                                    4.4                                1.09%
      Star                                                                                                       2.5                                0.83%
      Kencana                                                                                                    2.2                                0.81%
      Sarawak Energy                                                                                             3.7                                0.71%
      MPI                                                                                                        1.9                                0.54%
      Lion Diversified                                                                                           1.4                                0.47%
      TIME dotCom                                                                                                1.8                                0.28%

      Total                                                      310.2                   100.00%
     * - Relative weights are computed in proportion to their free float-adjusted market capitalisation (as at 24 Dec 07)
     Source: Prospectus, Bloomberg, HwangDBS Vickers Research




                                                                                                                                                                      4 of 10
Company Focus                                                                                                                                                                     MyETF-DJIM25

     • The FBM30etf experience. The example of FBM30etf has demonstrated that ETFs can be an
     attractive alternative investment vehicle, especially for investors with preference for dedicated
     exposure in passively managed index funds. Since its listing in the middle of last year, the unit price of
     FBM30etf has tumbled initially to a trough of RM7.41 (in mid-Aug 07) before trending up to peak at
     RM10.03 (in mid-Jan 08), a jump of 35.4% in a space of five months.
     The positive returns generated by FBM30etf actually tracks that of the underlying index (FBM30 in this
     case) (see Figure 4), as it is the job of the manager to replicate changes in the weightings and
     compositions in the benchmark index in the ETF portfolio of shares, so that the investment results will
     closely mirror the performance of the benchmark index. The FBM30etf unit price has since declined, in
     tandem with the fall in the FBM30 Index.
     In addition, the presence of arbitrage activities implies that the ETF unit price and NAV of the fund
     (which should be equal in theory) will not deviate substantially from each other, as illustrated in the
     case of FBM30etf in Figure 4.
     Figure 4 : Historical performance of FBM30etf (from 20 Jul 07 – 25 Jan 08)

                                                        FBM30etf                                                 FBM30 Index
       20%
       15%
       10%
        5%
        0%
       -5%
       -10%
       -15%
              19-Jul-07
                          2-Aug-07

                                     16-Aug-07

                                                 30-Aug-07
                                                             13-Sep-07
                                                                         27-Sep-07

                                                                                     11-Oct-07

                                                                                                 25-Oct-07
                                                                                                             8-Nov-07
                                                                                                                        22-Nov-07

                                                                                                                                    6-Dec-07

                                                                                                                                               20-Dec-07
                                                                                                                                                           3-Jan-08
                                                                                                                                                                      17-Jan-08




      Source: Bloomberg, HwangDBS Vickers Research


     Therefore, we believe MyETF-DJIM25 will be highly correlated to the performance of DJIM25 going
     forward. In comparison to FBM30etf, there are nine similar component stocks that are in MyETF-
     DJIM25, too. Also, it remains to be seen whether trading liquidity in MyETF-DJIM25 (based on the
     existing number of units created initially of 840m) will be better than FBM30etf (with 1.04m units in
     circulation presently), whose daily average volume has shrank significantly from 645,042 units in the
     first three months after listing to just 166,135 units in the last three months.

     Valuation

     • Medium-term target price of RM1.18. This will be the unit price of MyETF-DJIM25 if we pencil in
     HDBSVR’s fair valuations for the 13 constituent stocks (which together represents approximately 90% of
     the total index weight) under our research coverage, while assuming constant share prices for the
     remaining 12 companies (refer to Figure 5 overleaf).

     The potential upside, versus its NAV-based current price of RM0.968, works out to be 21.9%. Incremental
     investment returns may come in the form of income distributions, as the fund intends to pay out
     substantially all of the net income (like dividends from the holding of shares and yields from cash
     component in its portfolio) after deducting relevant fees, expenses and taxes.




                                                                                                                                                                                          5 of 10
Company Focus                                                                                                      MyETF-DJIM25

     Figure 5: Our target price for MyETF-DJIM25 (based on HDBSVR's fair valuation for the constituent stocks)
      Stock Name                                                    Share price (RM)                      % upside/
                                                              Current                Target              (downside)
      Sime Darby                                                      11.60                   15.20               31.0%
      IOI Corporation                                                  7.05                    8.70               23.4%
      DiGi.com                                                        24.00                   30.30               26.3%
      KL Kepong                                                       17.20                   20.60               19.8%
      MISC                                                             9.60                   11.70               21.9%
      Gamuda                                                           4.90                    5.00                 2.0%
      PPB Group                                                       10.50                   13.70               30.5%
      KNM Group                                                        6.95                    9.70               39.6%
      PLUS                                                             3.20                    3.95               23.4%
      SP Setia                                                         5.00                    6.10               22.0%
      UMW                                                             14.30                   14.15                -1.0%
      Petronas Gas                                                    10.50                   10.50                     -
      Batu Kawan                                                      11.50                   11.50                     -
      AirAsia                                                          1.51                    1.70               12.6%
      Asiatic                                                          7.95                   11.95               50.3%
      Dialog                                                           1.57                    1.57                     -
      Lafarge M Cement                                                 4.98                    4.98                     -
      Zelan                                                            4.60                    4.60                     -
      Maybulk                                                          3.58                    3.58                     -
      Star                                                             3.44                    3.44                     -
      Kencana                                                          2.20                    2.20                     -
      Sarawak Energy                                                   2.14                    2.14                     -
      MPI                                                              9.05                    9.05                     -
      Lion Diversified                                                 1.55                    1.55                     -
      TIME dotCom                                                      0.68                    0.68                     -

      DJIM-25 Index Value#                                            933.98              1133.78                  21.4%
      MyETF-DJIM25 unit price^                                         0.968                 1.18                  21.9%

           Stocks currently not under our coverage, whose target prices are assumed to equal current share prices
      # - Target level is calculated using HDBSVR's own free-float adjustment estimates for the component stocks, as
      extrapolated from an index value of 981.21 and float-adjusted market cap for the basket of RM124.2b (as at 31 Dec 07).
      ^ - MyETF-DJIM25 unit price is projected to equal to {DJIM25 Index Value} divided by {a multiplier factor of 964.5}

      Source: Prospectus, Dow Jones website, Bloomberg, HwangDBS Vickers Research.




                                                                                                                               6 of 10
Company Focus                                                                                                                    MyETF-DJIM25


APPENDIX: Frequently asked questions
 A. WHAT IT IS…
 1. What is an Exchange Traded Fund (ETF)?
 •   An Exchange Traded Fund or ETF is an open-ended, index-tracking unit trust fund.
 •   Generally, the principal objective of an ETF is to track or replicate the performance of the benchmark index.
 •   An ETF provides investors, in a single transaction, with a cost-efficient and convenient way to gain exposure to the basket
     of securities represented in the index.
 •   Unlike other unit trust funds, ETF’s units are listed and traded on a stock exchange and are bought and sold during trading
     hours just like shares.
 2. Generally, how does an ETF operate?
 The following diagram depicts the generic structure of an ETF:




 •   The Manager: Manages/administers the ETF in line with the trust deed and securities laws.
 •   The Trustee: Acts as custodian of an ETF’s assets. Ensures ETF is administered in line with trust deed & securities laws.
 •   The Participating Dealer: Provides liquidity via the in-kind creation and redemption process, so that the ETF can be bought
     and sold on a real-time basis during stock exchange trading sessions.
 •   The other Liquidity Providers (if any): Aid in providing liquidity to the ETF.
 •   The Investors: Invest in ETF units via their brokers.
 3. What's "in-kind" creation and redemption?
 •   Unlike unit trust funds, new ETF units are not normally issued through cash subscriptions, but via in-kind creation by
     participating dealers.
 •   Participating dealers, at investors’ behests or on their own accord, may assemble the in-kind creation basket specified and
     tender it to the manager and trustee in return for new ETF units.
 •   In the cases of redemption, the participating dealers will accumulate and deliver to the manager and trustee the specified
     number of ETF units in exchange for the underlying basket of stocks.
 B. … AND HOW DIFFERENT IS IT FROM OTHER UNIT TRUSTS?
 4. What are the main differences between ETF and unit trust?
 •   ETFs are essentially unit trust funds that are listed and traded on a stock exchange. They are open-ended with a unique in-
     kind creation and redemption mechanism supported by a system of participating dealers and liquidity providers.
 •   The main difference between an ETF and a unit trust fund is in the manner of their units being bought and sold. ETFs are
     listed, their units can be bought and sold during stock exchange trading hours. Investors could buy and sell ETF units
     through their stockbroker rather than through unit trust agents or financial planners.
 •   Unlike unit trust funds, new ETF units are not normally issued through cash subscriptions, but via in-kind creation by
     participating dealers. Participating dealers, in turn, also function as, or work with, appointed liquidity providers to supply
     new units to investors or buy up excess supply from investors on the stock exchange.
 •   Like unit trust funds in many countries, the assets of an ETF are required by regulations to be placed under the custody of
     an approved trustee.


                                                                                                                                         7 of 10
Company Focus                                                                                                               MyETF-DJIM25

•     Other differences between an ETF and a unit trust are as follows:
                                     ETF                                     Unit trust
    Diversification                  √                                       √
    Transparency                     √                                       Less transparent
    Fund information                 Market price and trading activity       Information is usually available
                                     data is readily available on Bursa      from the fund manager and from
                                     Malaysia’s website or through           the fund’s appointed distributors.
                                     brokers and stock quotation
                                     system.
    Liquidity                        √                                       Less liquid
    Entry fee                        0.5% p.a. of the NAV or lower           0.75% - 2% p.a. of the NAV
    Purchase / Cash Settlement       T+3                                     Upfront
    Trade via                        Broker -- trading can be carried out    Agent -- buy and sell orders can
                                     via any firm or financial institution   only be handled by the unit trust
                                     licensed by or registered with Bursa    fund’s manager or its appointed
                                     Malaysia to deal in securities.         distributors.
    Trading Times                    Available for trading throughout        Each fund has its own set dealing
                                     Bursa Malaysia’s trading days;          days, which may not be every
                                     buying and selling can be carried       business day. Buy and sell orders are
                                     out on a real-time basis.               executed at the end of each dealing
                                                                             day.


5. What are the differences between an Islamic ETF and a conventional ETF? How does an Islamic ETF work?
•     An Islamic ETF tracks a benchmark index comprised wholly of constituent securities that are Shariah compliant, whereas a
      conventional ETF may track any benchmark index regardless of the Shariah status of its constituents.
•     Unlike a conventional ETF, an Islamic ETF will be managed under the Shariah principles and guidelines. It is required to
      appoint a Shariah adviser/committee and adhere to the Shariah investment policies and guidelines.
•     The Shariah adviser/committee will conduct regular reviews and audits on an Islamic ETF to ensure strict compliance with
      the Shariah principles and practices.
•     The following diagram depicts the basic structure of an Islamic ETF:




C. … PROS & CONS OF INVESTING IN AN ETF
6. Why invest in an index?
Investing in an index involves investing in a group of securities that represent the composition of a broad stock market or stock
industry sector. Index funds offer market level performance and they aim to generally match the performance of a specific
index. Index funds generally have lower management fees and operating expenses than actively managed funds.




                                                                                                                                    8 of 10
Company Focus                                                                                                                  MyETF-DJIM25

  7. What are the benefits of ETF units trading like a stock?
  •    Economy --- ETF offers investors an opportunity to gain immediate exposure to the securities that underlie its benchmark.
  •    Accessibility --- The mode of trading of ETF’s units should be familiar to many. No different than that of the trading of
       shares, investors are able to buy and sell units of an ETF at anytime during trading hours and these units are traded in
       board lots of 100.
  •    Transparency --- Investors can readily access real-time information such as prices and fund information, and as such are able
       to regularly monitor their investments.
  •    Lower cost --- ETFs are passively managed funds and therefore incur lower management fees and lower transaction costs as
       opposed to those that are actively managed.
  8. What are the risks of investing in an ETF?
  •    Investors should be aware of market risk where investors could experience losses from fluctuations in securities prices. Just
       like stocks, an ETF may experience the similar ups and downs of the underlying index market and as such, the performance
       of an ETF may be directly affected by the performance of its component stocks or bonds.
  •    Risk of tracking error where the performance of ETF is not representative of the performance of the underlying index.
  9. How liquid is an ETF?
  An ETF offers two different sources of liquidity: traditional liquidity as measured by secondary market trading volume, and
  liquidity provided by the creation and redemption process to match investors’ demand, enabling both large and small orders
  to be filled during a trading day. Therefore, it is possible for ETF with low trading volume to still be liquid.
  D. THINGS TO CONSIDER WHEN INVESTING IN AN ETF
  10. What are the expected returns of an ETF and does it pay dividends?
  The investment returns of an ETF generally correspond to the performance of its underlying index.
  11. Should I view an investment in an ETF as a long- or short-term investment?
  This would depend on the investment objective and strategy of the investors. Investing in an ETF is like investing in a stock.
  You can trade it actively in the short term or you can hold it for long-term investment.
  12. What should I do before investing in ETF?
  Investors should be aware of the following:
  i.   Investment objective and strategy of the ETF.
 ii.   Information about the index that the ETF is tracking.
iii.   Fees and charges that will be borne by the investor.
iv.    Channels through which trading information on the ETF will be disclosed.
 v.    Information about the management company.
  13. How can I start trading units of an ETF?
  Just like trading stocks, an investor would need a Central Depository System (CDS) account and a trading account maintained
  with a broker. Buying and selling of ETF can be executed through any of Bursa Malaysia Participating Organisations during
  trading hours.
  14. How easily can I buy or sell the units of an ETF?
  The units of an ETF are listed on the stock exchange and can be traded during trading hours, making it easy for investors to
  buy or sell an ETF.
  15. What is the minimum amount of units one needs to purchase?
  ETF is traded in board lots of 100 units.
  16. What transaction fees do I need to pay to buy and sell units of an ETF?
  Similar to buying and selling stocks, investors need to pay brokerage commission, stamp duty and clearing fees.
  17. When are transactions in ETF settled?
  Just like ordinary shares - no later than three working market days after the transaction date (T+3)
  18. Where can I get up-to-date price information on ETF?
  The pricing of ETF is on Bursa Malaysia Securities during normal trading hours. Investors can also obtain this information from
  their brokers and stock quotation systems.
  19. Can you please explain changes in constituents of the index?
  The index providers would periodically re-examine which securities to include or omit from the index and this is done
  according to the rules set by the provider. This method is known as rebalancing, and the purpose is to ensure that the index
  constituents are consistently assessed on their suitability and relevance to the index’s overall objective.




                                                                                                                                       9 of 10
Company Focus                                                                                                 MyETF-DJIM25




     DBSV recommendations are based an Absolute Total Return* Rating system, defined as follows:
     STRONG BUY (>20% total return over the next 3 months, with identifiable share price catalysts within this
     time frame)
     BUY (>15% total return over the next 12 months for small caps, >10% for large caps)
     HOLD (0-15% total return over the next 12 months for small caps, 0-10% for large caps)
     FULLY VALUED (negative total return i.e. > -10% over the next 12 months)
     SELL (negative total return of > -20% over the next 3 months, with identifiable catalysts within this time
     frame)

     * Share price appreciation + dividends

    DBS Vickers Research is available on the following electronic platforms: DBS Vickers (www.dbsvresearch.com);
    Thomson (www.thomson.com/financial); Factset (www.factset.com); Reuters (www.rbr.reuters.com); Capital IQ
    (www.capitaliq.com) and Bloomberg (DBSR GO). For access, please contact your DBSV salesperson.

    In Singapore, this research report may only be distributed to Institutional Investors as defined in the Securities
    and Futures Act, Chapter 289 of Singapore.

    ANALYST CERTIFICATION

    The research analyst primarily responsible for the content of this research report, in part or in whole certifies
    that the views about the companies and their securities expressed in this report accurately reflect his/her
    personal views. The analyst also certifies that no part of his/her compensation was, is, or will be, directly, or
    indirectly, related to specific recommendations or views expressed in this report.

    This document is published by DBS Vickers Research (Singapore) Pte Ltd ("DBSVR"), a direct wholly-owned
    subsidiary of DBS Vickers Securities (Singapore) Pte Ltd ("DBSVS") and an indirect wholly-owned subsidiary of
    DBS Vickers Securities Holdings Pte Ltd ("DBSVH"). The research is based on information obtained from
    sources believed to be reliable, but we do not make any representation or warranty as to its accuracy,
    completeness or correctness. Opinions expressed are subject to change without notice. This document is
    prepared for general circulation. Any recommendation contained in this document does not have regard to
    the specific investment objectives, financial situation and the particular needs of any specific addressee. This
    document is for the information of addressees only and is not to be taken in substitution for the exercise of
    judgement by addressees, who should obtain separate legal or financial advice. DBSVR accepts no liability
    whatsoever for any direct or consequential loss arising from any use of this document or further
    communication given in relation to this document. This document is not to be construed as an offer or a
    solicitation of an offer to buy or sell any securities. DBS Vickers Securities Holdings Pte Ltd is a wholly-owned
    subsidiary of DBS Bank Ltd. DBS Bank Ltd along with its affiliates and/or persons associated with any of them
    may from time to time have interests in the securities mentioned in this document. DBSVR, DBSVS, DBS Bank
    Ltd and their associates, their directors, and/or employees may have positions in, and may effect transactions in
    securities mentioned herein and may also perform or seek to perform broking, investment banking and other
    banking services for these companies. DBSVR, DBSVS, DBS Bank Ltd and/or other affiliates of DBS Vickers
    Securities (USA) Inc ("DBSVUSA"), a U.S.-registered broker-dealer, may beneficially own a total of 1% or more
    of any class of common equity securities of the subject company mentioned in this document. DBSVR, DBSVS,
    DBS Bank Ltd and/or other affiliates of DBSVUSA may, within the past 12 months, have received compensation
    and/or within the next 3 months seek to obtain compensation for investment banking services from the subject
    company. DBSVUSA does not have its own investment banking or research department, nor has it participated
    in any investment banking transaction as a manager or co-manager in the past twelve months. Any US persons
    wishing to obtain further information, including any clarification on disclosures in this disclaimer, or to effect a
    transaction in any security discussed in this document should contact DBSVUSA exclusively. DBS Vickers
    Securities (UK) Ltd is an authorised person in the meaning of the Financial Services and Markets Act and is
    regulated by The Financial Services Authority. Research distributed in the UK is intended only for institutional
    clients.


           DBS Vickers Research (Singapore) Pte Ltd – 8 Cross Street, #02-01 PWC Building, Singapore 048424
                                        Tel. 65-6533 9688, Fax: 65-6226 8048
                                                                                                                           10 of 10
                                          Company Regn. No. 198600295W
 Hong Kong / China

 Results Snapshot
  DBS Group Research . Equity                                                                                           31 January 2007
Esprit Holdings (0330 HK)                                                                                                       BUY HK$93.55
Still on a solid track
                                                                                                                          Target price: HK$134.00
Reporting               Results vs       Mkt Cap                FY            EPS             EPS              PE             PBV        Div Yield
Period               Expectations                                           (HK$)        Revision             (x)              (x)            (%)
1H FY08             Slightly above   HK$116,252m             06/08F          5.35              Nil           17.5              7.9             4.3
                                      US$14,901m             06/09F          6.55              Nil           14.3              6.6             5.3

 Result Summary                                          Comment on Results                           Recommendation
 FY June (HK$m)              1H07      1H08    yoy chg   Esprit’s 37% growth in 1H08 earnings was     Despite recent macro concerns, Esprit
                                                         slightly ahead of our expectations, driven   should be on track to deliver our forecast
 Turnover                  14,590     18,527       27    by strong topline growth (27% y-o-y) and     two-year CAGR of 25%.           Wholesale
 Gross profit               7,604      9,920       30    margin expansion (net margin up 1.4ppt).     orderbook (till April) managed a decent
 EBIT                       3,061      4,020       31                                                 low double-digit growth (against a high
                                                         Euro appreciation (up 10% y-o-y) has
 Pretax Profit              3,171      4,203       33                                                 base), indicating momentum has been on
                                                         helped, but growth has been strong even
 Net Profit                 2,400      3,293       37                                                 track. This, coupled with network
                                                         on local currency terms (est. 15%+ for
 EPS (HK$)                   1.96       2.67       36                                                 expansion (in both core and under-utilised
                                                         Europe), with all major markets reporting
 DPS (HK$)                   0.70       0.95       36                                                 markets) and margin improvement (better
                                                         strong performance. Wholesale growth
                                                                                                      economies of scale, improvement in
                                                         reached 30%, against previous orderbook
                                                                                                      underperforming markets), should drive
 Gross margin (%)            52.1       53.5             of mid-teens, indicating positive impact
                                                                                                      earnings ahead.
 EBIT margin (%)             21.0       21.7             from the injection programme.
                                                                                                      We maintain our forecast and Buy rating
                                                         Retail comp-store of 8% was in line, but
 Turnover by segment                                                                                  unchanged.      Cash position has further
                                                         retail EBIT margin dropped mildly by
 Wholesale                  6,441      7,972       24                                                 improved (net cash HK$5.5bn+), hinting
                                                         1.5ppt, as impact of the aggressive store
 Retail                     8,060     10,450       30                                                 possibilities of higher payout and M&A.
                                                         openings kicked in. Better 2H is expected
 Others                        89        105       18                                                 Meanwhile, resignation of co-founder
                                                         as these new stores start contributing.
                                                                                                      Michael Ying (last position as non-
                                                         Meanwhile, this was compensated by
                                                                                                      executive director) should be of no impact
                                                         stronger wholesale margin (up 1.1ppt),
                                                                                                      to operation, though movement (if any) of
                                                         with overall operating margin improved by
                                                                                                      his remaining stakes (8.7%) could be a near
                                                         0.7ppt
                                                                                                      term overhang.
                                                                         ANALYST: Alice Hui, CFA · (852) 2971 1960 · alice_hui@hk.dbsvickers.com




  www.dbsvickers.com
  Refer to important disclosures at the end of this report
Results Snapshot                                                                                                        Esprit Holdings




DBSV recommendations are based an Absolute Total Return* Rating system, defined as follows:
STRONG BUY (>20% total return over the next 3 months, with identifiable share price catalysts within this time frame)
BUY (>15% total return over the next 12 months for small caps, >10% for large caps)
HOLD (0-15% total return over the next 12 months for small caps, 0-10% for large caps)
FULLY VALUED (negative total return i.e. > -10% over the next 12 months)
SELL (negative total return of > -20% over the next 3 months, with identifiable catalysts within this time frame)

* Share price appreciation + dividends
DBS Vickers Research is available on the following electronic platforms: DBS Vickers (www.dbsvresearch.com); Thomson
(www.thomson.com/financial); Factset (www.factset.com); Reuters (www.rbr.reuters.com); Capital IQ (www.capitaliq.com) and Bloomberg
(DBSR GO). For access, please contact your DBSV salesperson.




ANALYST CERTIFICATION
The research analyst primarily responsible for the content of this research report, in part or in whole certifies that the views
about the companies and their securities expressed in this report accurately reflect his/her personal views. The analyst also
certifies that no part of his/her compensation was, is, or will be, directly, or indirectly, related to specific recommendations or
views expressed in this report. The analyst and DBS Vickers (Hong Kong) Limited (“DBSVHK”) certify that no compensation or
benefits in connection with this research report is received from the listed corporation or other 3rd party. DBSVHK and the
research analyst will not be held responsible if this investment research, or recommendation is published or otherwise
reproduced in whole or in part by the mass media without the relevant disclosures.
This document is published by DBSVHK, a direct wholly-owned subsidiary of DBS Vickers Securities Holdings Pte Ltd. (“DBSVH”).
The research is based on information obtained from sources believed to be reliable, but we do not make any representation or
warranty as to its accuracy, completeness or correctness. Opinions expressed are subject to change without notice. This
document is prepared for general circulation. Any recommendation contained in this document does not have regard to the
specific investment objectives, financial situation and the particular needs of any specific addressee. This document is for the
information of addressees only and is not to be taken in substitution for the exercise of judgement by addressees, who should
obtain separate legal or financial advice. DBSVHK accepts no liability whatsoever for any direct or consequential loss arising
from any use of this document or further communication given in relation to this document. This document is not to be
construed as an offer or a solicitation of an offer to buy or sell any securities. DBSVH is a wholly-owned subsidiary of DBS Bank
Ltd. DBS Bank Ltd along with its affiliates and/or persons associated with any of them may from time to time have interests in
the securities mentioned in this document. DBSVHK, DBS Vickers Securities (Singapore) Pte Ltd (“DBSVS”), DBS Bank Ltd and
their associates, their directors, and/or employees may have positions in, and may effect transactions in securities mentioned
herein and may also perform or seek to perform broking, investment banking and other banking services for these companies.
As of the latest available date and information, DBSVHK, DBSVS, DBS Bank Ltd and/or its affiliates, including of DBS Vickers
Securities (USA) Inc ("DBSVUSA"), a U.S.-registered broker-dealer, have not beneficially owned a total of 1% or more of any
class of common equity securities of the subject company mentioned in this document. As of the latest available date and
information, DBSVHK, DBSVS, DBS Bank Ltd and/or its affiliates, including of DBSVUSA, within the past 12 months, have not
received compensation and/or may within the next 3 months seek to obtain compensation for investment banking services from
the subject company.
DBSVUSA does not have its own investment banking or research department, nor has it participated in any investment banking
transaction as a manager or co-manager in the past twelve months. Any US persons wishing to obtain further information,
including any clarification on disclosures in this disclaimer, or to effect a transaction in any security discussed in this document
should contact DBSVUSA exclusively. DBS Vickers Securities (UK) Ltd is an authorised person in the meaning of the Financial
Services and Markets Act and is regulated by The Financial Services Authority. Research distributed in the UK is intended only
for institutional clients.


                                                                 DBS Vickers (Hong Kong) Limited
                                           18th Floor Man Yee Building, 68 Des Voeux Road Central, Central, Hong Kong
                                                            Tel: (852) 2820-4888, Fax: (852) 2868-1523
                                                                                                                                   2 of 2
 Thailand

 Company Focus
 DBS Group Research . Equity                                                                                                                               31 Jan 2008

 BUY Bt13.90
 (Upgrade from Hold)
                                                       SET : 763.48                                  Thanachart Capital PCL
                                                                                                     Huge gain on investment boosts net profit in 2008
 Price Target : 12-Month Bt 17.50 (Prev Bt 17.00)                                                          Story: Thanachart Capital’s (TCAP) management has
 Reason for Report : Company visit                                                                   revealed its three-year business plan to 2010. It includes (i) asset
 Potential Catalyst: (i) Strong loan growth, especially in hire                                      growth target of 20% CAGR in 2008-2010 to Bt500bn, and
 purchase and corporate segments, (ii) strong hire purchase                                          focusing on the hire purchase business and corporate segment,
 business due to its leading market share, and (iii) stronger
                                                                                                     (ii) sustainable spread at 3.0-3.5%, cost to income ratio at 55.0%
 banking business from co-operation with new partners (BNS)
                                                                                                     and NPL ratio at 4.5%, and (iii) ROE target of 15.0% in 2010,
 ANALYST                                                                                             with the plan to grow inorganically. Following the option for
 Sugittra Kongkhajornkidsuk +662 657 7825                                                            BNS to raise stake to 49.0% in TBANK, TCAP will book c.Bt3.0bn
 sugittrak@th.dbsvickers.com                                                                         gains from the sale of 2nd tranche of TBANK shares in 1H08.
                                                                                                         Point: We have raised our forecast on FY08F earnings by
 FORECASTS AND VALUATION
                                                                                                     58.0% to reflect huge gain on investment of c. Bt2.0bn (after
 FY Dec (Bt m)      2006A                                2007A             2008F            2009F
 Pre-prov. Profit    2,230                                5,835            7,302            8,187    tax) from the sale of TBANK shares to BNS. But TCAP will book
 Net Profit          1,467                                2,818            3,731            1,934    higher minority interest in 2H08 onwards. We are positive on
 Net Pft (Pre Ex.)   1,467                                2,818            3,731            1,934    TCAP’s long-term prospects, because BNS will enhance TBANK’s
 EPS (Bt)               1.1                                  2.1             2.8               1.5   retail business, trade finance and corporate loans segment.
 EPS Pre Ex. (Bt)       1.1                                  2.1             2.8               1.5
 EPS Gth Pre Ex (%)    (53)                                   92               32             (48)
                                                                                                     However, we are concerned FY09F earnings would be lower, due
 Diluted EPS (Bt)       1.1                                  2.1              2.8              1.5   to absence of gain on investments.
 PE Pre Ex. (X)       12.6                                   6.6             5.0               9.6
 Net DPS (Bt)           0.8                                  1.0              1.3              0.8       Relevance: Upgrade to BUY. Our new target price is Bt17.50
 Div Yield (%)          5.8                                  7.2             9.3               6.1   (0.85x 2008 P/BV). TCAP now offers 26.0% upside from our new
 ROAE Pre Ex. (%)       6.5                                11.6             13.8               7.0   target price, and attractive dividend yield of 7.2% and 9.3 % for
 ROAE (%)               6.5                                11.6             13.8               7.0   FY07F and FY08F, respectively.
 ROA (%)                0.5                                 0.9              1.0               0.4
 BV Per Share (Bt)       17                                   20               21               21   24.0% internal loan growth target for FY08F. TCAP expects the Bank of
 RNAV per shr (Bt)     N/A                                  N/A              N/A              N/A    Nova Scotia (BNS) to enhance its consumer segment, especially in hire
 P/Book Value (x)       0.8                                  0.7              0.7              0.7   purchase, and its targeting higher corporate loans for banking business
 SHARE PRICE CHART
                                                                                                     in FY08F, and 20.0% CAGR asset growth for 2008-2010. Following
                                                                                                     increased    corporate     loans,   loan    breakdown      would    be
           Bt
     18 . 00
                                                                                                     62%:20%:10%:8% for Corporate: SME: Retail: Others, from
     17 . 00                                                                                         80%:9%:5%:6% currently. However, hire purchase loans should
     16 . 00
     15 . 00                                                                                         continue to grow 21% or Bt40bn from Bt190bn for FY07 to Bt230bn for
     14 . 00
     13 . 00
                                                                                                     FY08F in anticipation of 5% new car sale growth in Thailand, and 24%
     12 . 00                                                                                         overall loan growth for FY08F. We conservatively forecast FY08F and
     11 . 00
     10 . 00                                                                                         FY09F overall loan to grow by 15.0% and 14.5%, respectively due to
      9 . 00
           Jan    - 07      Apr   - 07    Jun   - 07    Sep   - 07   Nov    - 07      Jan   - 08
                                                                                                     stronger competition in hire purchase segment from large competitors
                 Thanachart Capital PCL                              100   - Day MA                  e.g. TOYOTA leasing, TISCO, SCB Leasing and AYCL (subsidiary of BAY).
                                                                                                     We are concerned TBANK does not compete in the corporate segment
 AT A GLANCE                                                                                         with other large banks, due to higher funding cost and strong
 Issued Capital (m shrs)                                                           1,333             competition in this segment.
 Mkt. Cap (Btm/US$m)                                                         18,531 / 592
 Major Shareholders                                                                                  Huge gain on investment from sale of TBANK shares to BNS in 2008.
    Com-Link (%)                                                                         10.0        BNS has the option to raise its stake in TBANK to 49% within four years,
    MBK Pcl (%)                                                                           9.8        following completion of holding 25% stake in TBANK in July 2007. The
    Thai NVDR (%)                                                                         9.0        management said that BNS would buy the 2nd tranche of TBANK shares
 Free Float (%)                                                                          66.0        of c.420m shares from TCAP at 1.7 times of the net book value per
 Avg. Daily Vol.(‘000)                                                                  3,979
                                                                                                     share of TBANK (or c. Bt18.5 per share) within 1H08 after the new
 Earnings Rev (%):                        2008: 58.0                 2009: (34.2)                    Financial Institutions Business Act becomes effective. We estimate TCAP
 Consensus EPS (Bt):                      2008: 1.9                  2009: 1.8                       will book gains from the sale of TBANK shares to BNS of c. Bt2.0bn
 Variance vs Cons (%):                    2008: 50.5                 2009: (21.4)                    (after tax) in 2Q08. However, its reduced stake in TBANK means TCAP
                                                                                                     will book higher minority interest from 3Q08 onwards.
 Sector : Finance & Securities
 Bloomberg/Reuters Code: TCAP TB /TCAP.BK
 Principal Business: Holding company, which hold 75%
 stake in Thanachart Bank.

www.dbsvickers.com
Refer to important disclosures at the end of this report
Company Focus                                                                         Thanachart Capital PCL


Highlights
Revert to normal LLP in FY08F. The bank booked net loan loss provision (LLP) of Bt2.1bn in 2007, higher
than the Bt231m net LLP (including some LLP reversal) in 2006. TCAP reclassified losses from repossession
to LLP; it was previously booked as other expenses in FY06. For FY08F, we do not expect the company to
book LLP reversal revenue, and there should be normal LLP in line with business growth. Hence, we raised
FY08F LLP assumption to Bt3.2bn, from Bt2.5bn.
ROE target of 15.0% in 2010. TCAP targets its ROE should improve to 15% by YE2010, led by organic
growth, with double-digit asset and profit growth within three years. Nonetheless, the bank also has plans
to grow inorganically by improving asset and ROE growth. However, we have projected ROE of 13.8% for
FY08F, and lowered to 7.0% for FY09F, due to lower FY09F net profit following absence of gains from the
sale of its investment. Despite this, we expect to lower FY09F net profit. But we believe that TCAP may
have concerns in this point and should stabilise its bottomline with the sale of other investments. It is
premature to factor higher gains on other investments into our FY09 projection, until more details from
management later.




                                                                                                             2 of 2
Company Focus                                                                                               Thanachart Capital PCL


Income Statement (Bt m)                                                  Balance Sheet (Bt m)
FY Dec                        2006A      2007A     2008F       2009F     FY Dec                          2006A      2007A     2008F       2009F
Net Interest Income          6,909    9,099 12,314             13,909    Cash/Bank Balance                2,466      3,275     3,962       4,483
Non-Interest Income          6,931    9,586 9,903              10,677    Government Securities            6,300      2,500    27,733      31,380
Operating Income            13,840 18,684 22,217               24,586    Inter Bank Assets               27,064     40,462    49,898      56,460
Operating Expenses        (11,610) (12,849) (14,915          (16,399)    Total Net Loans & Advs.        201,319    231,034   263,810     300,460
Pre-provision Profit         2,230    5,835 7,302 )             8,187    Investment                      33,540     27,566    34,540      39,083
Provisions                   (231) (2,052) (3,200)            (3,200)    Associates                       1,226      1,308     1,068       1,209
Associates                     223      271     280               280    Fixed Assets                     1,758      2,308     2,308       2,308
Exceptionals                     0        0       0                 0    Goodwill                            10         44        44          44
Pre-tax Profit               2,597    4,874 7,362               5,527    Other Assets                    12,545     12,759    12,816      12,856
Taxation                     (978) (1,705) (2,350)            (1,658)    Total Assets                   286,229    321,256   396,180     448,282
Minority Interests           (152)    (351) (1,282)           (1,934)    Customer Deposits              198,527    190,626   260,031     296,181
Preference Dividend              0        0       0                 0    Inter Bank Deposits              4,507      4,769     6,320       7,199
Net Profit                   1,467    2,818 3,731               1,934    Debts/Borrowings                45,035     76,445    75,842      86,386
Net Profit bef Except        1,467    2,818 3,731               1,934    Others                          14,729     17,154    18,961      21,597
                                                                         Minorities                         865      6,054     7,336       9,270
                                                                         Shareholders' Funds             22,565     26,208    27,690      27,650
                                                                         Total Liab& S/H’s Funds        286,229    321,256   396,180     448,282


Profitability & Efficiency Ratios (%)                                    Financial Stability Measures (%)
FY Dec                     2006A        2007A      2008F       2009F     FY Dec                           2006A     2007A      2008F      2009F
Margins, Costs & Efficiency                                              Balance Sheet Structure
Yld. On Earnings Assets        6.82        6.37      6.14        5.94    Loan-to-Deposit Ratio             105.6     125.6     105.9       106.5
Avg Cost Of Funds              4.55        3.73      3.02        2.98    Net Loans / Total Assets           70.3      71.9      66.6        67.0
Spread                         2.27        2.64      3.13        2.96    Investment / Total Assets          11.7       8.6       8.7         8.7
Net Interest Margin            2.78        3.08      3.51        3.33    Cust . Dep./Int. Bear. Liab.       80.0      70.1      75.9        75.9
Cost-to-Income Ratio           80.4        65.0      58.5        65.3    Interbank Dep / Int. Bear.          1.8       1.8       1.8         1.8
Employees ( Year End)          N/A         N/A       N/A         N/A     Asset Quality
Effective Tax Rate             37.7        35.0      31.9        30.0    NPL / Total Gross Loans             5.2       4.7       4.1         3.6
Business Mix                                                             NPL / Total Assets                  3.8       3.5       2.8         2.5
Net Int. Inc / Opg Inc.        49.9        48.7      55.4        56.6    Capital Strength
Non-Int. Inc / Opg inc.        50.1        51.3      44.6        43.4    Total CAR                          10.2      10.1       8.9         8.3
Fee Inc / Opg Income           34.4        44.2      40.5        39.2    Tier-1 CAR                          9.2       9.2       8.2         7.7
Oth Non-Int Inc/Opg            15.7         7.1       4.1         4.2
                                                                         Growth
Inc
Profitability                                                            Total Net Loans                     29        15         14          14
ROAE Pre Ex.                    6.5        11.6      13.8         7.0    Customer Deposits                   34        (4)        36          14
ROAE                            6.5        11.6      13.8         7.0
ROA Pre Ex.                     0.6         1.0       1.4         0.9
ROA                             0.5         0.9       1.0         0.4
Quarterly / Interim Income Statement (Btm)                               PE Chart (x)
FY Dec                    1Q2007 2Q2007 3Q2007 4Q2007
                                                                          17.0
Net Interest Income          1,772        2,126      2,467      2,732
Non-Interest Income          1,866        1,990      2,487      3,243     15.0
Operating Income             3,639        4,117      4,954      5,975
Operating Expenses         (2,906)      (2,752)    (3,324)    (3,867)     13.0
Pre-Provision Profit           733        1,364      1,630      2,108     11.0
Provisions                     465        (631)      (667)    (1,218)
Associates                      70            64        80          57     9.0
Exceptionals                     0             0         0           0
Pretax Profit                1,235          911      1,735        992      7.0
Taxation                     (660)        (257)      (709)        (79)
Minority Interests               1          (19)     (202)      (131)      5.0
Net Profit                     577          635        824        782
                                                                           3.0
                                                                             2004           2005          2006        2007        2008
Source: Company, DBS Vickers




                                                                                                                                          3 of 3
Company Focus                                                                                      Thanachart Capital PCL



DBSV recommendations are based an Absolute Total Return* Rating system, defined as follows:
STRONG BUY (>20% total return over the next 3 months, with identifiable share price catalysts within this time frame)
BUY (>15% total return over the next 12 months for small caps, >10% for large caps)
HOLD (0-15% total return over the next 12 months for small caps, 0-10% for large caps)
FULLY VALUED (negative total return i.e. > -10% over the next 12 months)
SELL (negative total return of > -20% over the next 3 months, with identifiable catalysts within this time frame)

Share price appreciation + dividends

DBS Vickers Research is available on the following electronic platforms: DBS Vickers (www.dbsvresearch.com); Thomson
(www.thomson.com/financial); Factset (www.factset.com); Reuters (www.rbr.reuters.com); Capital IQ (www.capitaliq.com)
and Bloomberg (DBSR GO). For access, please contact your DBSV salesperson.



In addition to the disclaimer at the end of this report, please note that DBS Bank Ltd has been appointed as
the designated market maker of structured warrant(s) for Thanachart Capital PCL issued by DBS Bank Ltd.

As of 30 Jan 2008, the analyst and his / her immediate family do not hold positions in the securities
recommended in this report.

DBS Vickers Securities (Singapore) Pte Ltd and its subsidiaries do not have a proprietary position in the
securities recommended in this report as of 30 Jan 2008.

ANALYST CERTIFICATION
The research analyst primarily responsible for the content of this research report, in part or in whole certifies
that the views about the companies and their securities expressed in this report accurately reflect his/her
personal views. The analyst also certifies that no part of his/her compensation was, is, or will be, directly, or
indirectly, related to specific recommendations or views expressed in this report.

This document is published by DBS Vickers Research (Singapore) Pte Ltd ("DBSVR"), a direct wholly-owned
subsidiary of DBS Vickers Securities (Singapore) Pte Ltd ("DBSVS") and an indirect wholly-owned subsidiary of
DBS Vickers Securities Holdings Pte Ltd ("DBSVH"). The research is based on information obtained from
sources believed to be reliable, but we do not make any representation or warranty as to its accuracy,
completeness or correctness. Opinions expressed are subject to change without notice. This document is
prepared for general circulation. Any recommendation contained in this document does not have regard to
the specific investment objectives, financial situation and the particular needs of any specific addressee. This
document is for the information of addressees only and is not to be taken in substitution for the exercise of
judgement by addressees, who should obtain separate legal or financial advice. DBSVR accepts no liability
whatsoever for any direct or consequential loss arising from any use of this document or further
communication given in relation to this document. This document is not to be construed as an offer or a
solicitation of an offer to buy or sell any securities. DBS Vickers Securities Holdings Pte Ltd is a wholly-
owned subsidiary of DBS Bank Ltd. DBS Bank Ltd along with its affiliates and/or persons associated with any
of them may from time to time have interests in the securities mentioned in this document. DBSVR, DBSVS,
DBS Bank Ltd and their associates, their directors, and/or employees may have positions in, and may effect
transactions in securities mentioned herein and may also perform or seek to perform broking, investment
banking and other banking services for these companies. DBSVR, DBSVS, DBS Bank Ltd and/or other affiliates
of DBS Vickers Securities (USA) Inc ("DBSVUSA"), a U.S.-registered broker-dealer, may beneficially own a
total of 1% or more of any class of common equity securities of the subject company mentioned in this
document. DBSVR, DBSVS, DBS Bank Ltd and/or other affiliates of DBSVUSA may, within the past 12 months,
have received compensation and/or within the next 3 months seek to obtain compensation for investment
banking services from the subject company. DBSVUSA does not have its own investment banking or research
department, nor has it participated in any investment banking transaction as a manager or co-manager in
the past twelve months. Any US persons wishing to obtain further information, including any clarification on
disclosures in this disclaimer, or to effect a transaction in any security discussed in this document should
contact DBSVUSA exclusively. DBS Vickers Securities (UK) Ltd is an authorised person in the meaning of the
Financial Services and Markets Act and is regulated by The Financial Services Authority. Research distributed
in the UK is intended only for institutional clients.


      DBS Vickers Research (Singapore) Pte Ltd – 8 Cross Street, #02-01 PWC Building, Singapore 048424
                                   Tel. 65-6533 9688, Fax: 65-6226 8048                                                 4 of 4
                                     Company Regn. No. 198600295W
 Thailand

 Results Snapshot
 DBS Group Research . Equity                                                                                            31 January 2008

PTT Exploration & Production (PTTEP TB)                                                                                      BUY Bt 142
                                                                                                                          Price Target: Bt 168
Slower sales, higher charges in FY07
Reporting           Results vs         Mkt Cap               FY       EPS (S cts)   EPS Revision        PE (x)        P/BV         Dividend
Period             Expectations                                                                                        (x)         Yield (%)
FY 2007               Below          Bt468,234m              2008       10.56           none            13.4           3.5            2.8
                                     US$14,960m              2009       12.25           none            11.6           2.9            3.0


Results Summary                                     Comment on Results                               Recommendation
FY Dec (Bt m)           FY06      FY07        Chg • FY07        results   were     below     our     • Despite unimpressive FY07 results,
                                             y-o-y expectation. Net profit grew only 2% to           PTTEP’s    earnings   growth    should
P&L Items                                          Bt28.46bn due to high dried-well expenses         accelerate from 2008 onwards driven by
Sales                   89,267    94,059     5.4% written-off, oil hedging loss, and higher          the start-up of several key projects,
Gross profit            51,392    53,819     4.7% effective tax rate.                                namely Arthit and Vietnam Block 9-2 in
EBIT                    64,754    67,839     4.8%                                                    2008, MTJDA and Vietnam Block 16-1 in
Pretax profit           49,672    51,401     3.5% • Sales grew only 5% to Bt94.06bn, as              2009. Sales volume should grow at 19%
Net profit              28,047    28,455     1.5% higher oil prices and a moderate increase in       CAGR during 2008-10 and earnings at
                                                   sales volume were offset by the strong            14% CAGR, despite our assumptions of
BS & CF Items                                      appreciation of the Thai baht against US$.        softening oil prices.
Capex                   35,052    39,052    11.4% Exploration expenses were Bt3.54bn in
Net cash/(debt)          9,314     5,513   -40.8% FY07, slightly below 2006’s but sharply            • PTTEP is attractive for several reasons:
                                                   higher than prior years when expenses were        (i) it is a direct beneficiary of resilient
                                                   below Bt1bn. And the surge in the oil price       crude oil prices, and (ii) it has a strong
                                                   to above its hedged prices led to Bt857m          production growth profile. The counter
                                                   loss in 4Q07. Effective tax rate rose to 47%      offers 18% upside to our target price of
                                                   in 4Q07 and averaged 45% in 2007, up              Bt168 (DCF, WACC: 10.05%). Maintain
                                                   slightly from 44% in 2006.                        Buy.
                                                    • Capex rose 11% and will remain high as
                                                    there are several development projects in
                                                    the pipeline. Its Balance sheet is strong with
                                                    a net cash position.
                                                             ANALYST: Vichitr Kuladejkhuna +66 (0) 2657 7826 vichitrk@th.dbsvickers.com




  www.dbsvickers.com
  Refer to important disclosures at the end of this report
    Results Snapshot




DBSV recommendations are based an Absolute Total Return* Rating system, defined as follows:
STRONG BUY (>20% total return over the next 3 months, with identifiable share price catalysts within this time frame)
BUY (>15% total return over the next 12 months for small caps, >10% for large caps)
HOLD (0-15% total return over the next 12 months for small caps, 0-10% for large caps)
FULLY VALUED (negative total return i.e. > -10% over the next 12 months)
SELL (negative total return of > -20% over the next 3 months, with identifiable catalysts within this time frame)

Share price appreciation + dividends

DBS Vickers Research is available on the following electronic platforms: DBS Vickers (www.dbsvresearch.com); Thomson
(www.thomson.com/financial); Factset (www.factset.com); Reuters (www.rbr.reuters.com); Capital IQ (www.capitaliq.com) and
Bloomberg (DBSR GO). For access, please contact your DBSV salesperson.

As at 30 January 2008,DBSVS and its affiliates hold a proprietary position in PTT Exploration & Production.

ANALYST CERTIFICATION
The research analyst primarily responsible for the content of this research report, in part or in whole certifies that the views about
the companies and their securities expressed in this report accurately reflect his/her personal views. The analyst also certifies that no
part of his/her compensation was, is, or will be, directly, or indirectly, related to specific recommendations or views expressed in this
report.

This document is published by DBS Vickers Securities (Thailand) Co., Ltd. ("DBSVT"), a direct wholly-owned subsidiary of DBS Vickers
Securities Holding Pte Ltd. The research is based on information obtained from sources believed to be reliable, but we do not make
any representation or warranty as to its accuracy, completeness or correctness. Opinions expressed are subject to change without
notice. This document is prepared for general circulation. Any recommendation contained in this document does not have regard
to the specific investment objectives, financial situation and the particular needs of any specific addressee. This document is for the
information of addressees only and is not to be taken in substitution for the exercise of judgement by addressees, who should obtain
separate legal or financial advice. DBSVT accepts no liability whatsoever for any direct or consequential loss arising from any use of
this document or further communication given in relation to this document. This document is not to be construed as an offer or a
solicitation of an offer to buy or sell any securities. DBS Vickers Securities Holdings Pte Ltd is a wholly-owned subsidiary of DBS Bank
Ltd. DBS Bank Ltd along with its affiliates and/or persons associated with any of them may from time to time have interests in the
securities mentioned in this document. DBSVT, DBS Vickers Securities (Singapore) Pte Ltd (“DBSVS”). DBS Bank Ltd and their
associates, their directors, and/or employees may have positions in, and may effect transactions in securities mentioned herein and
may also perform or seek to perform broking, investment banking and other banking services for these companies. DBSVT, DBSVS,
DBS Bank Ltd and/or other affiliates of DBS Vickers Securities (USA) Inc ("DBSVUSA"), a U.S.-registered broker-dealer, may
beneficially own a total of 1% or more of any class of common equity securities of the subject company mentioned in this document.
DBSVT, DBSVS, DBS Bank Ltd and/or other affiliates of DBSVUSA may, within the past 12 months, have received compensation and/or
within the next 3 months seek to obtain compensation for investment banking services from the subject company. DBSVUSA does
not have its own investment banking or research department, nor has it participated in any investment banking transaction as a
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                                                                                                                                            2 of 2
 Indonesia

 Company Focus
 DBS Group Research . Equity                                                                                                    31 Jan 2008

 Buy Rp27,050 JCI : 2,610
 (Upgrade from Hold)
 Price Target : 12-Month Rp34,000 (Prev Rp20,121)
                                                                      Astra International
 Reason for Report : Company update
                                                                      Sustainable diversified growth
 Potential Catalyst: Acquisition of large coal mines                      Story: Astra International (ASII) has been seeking coal
                                                                      mining acquisition targets since early last year. It is expected to
 ANALYST                                                              post a robust EPS growth of c.58% in 2007, following the
 Agus Pramono CFA +6221 3983 2668                                     recovery in automotive sales and higher prices in crude palm oil
 agus.pramono@id.dbsvickers.com
                                                                      (CPO) and coal.
                                                                          Point: We believe ASII would register robust growth in 2008,
                                                                      to be driven by prospectively sturdy domestic auto sales and
                                                                      higher commodity prices. Strong expected GDP growth of 6.5%
 FORECASTS AND VALUATION                                              and low interest rate environment in 2008 will become the
 FY Dec (Rpbn)         2006F    2007F    2008F    2009F               catalysts in stimulating domestic auto sales. Meanwhile, we have
 Turnover            55,508.1 68,075.8 82,037.0 95,132.3              upgraded our forecast on CPO price by 17% to US$1,050/tonne
 EBITDA               7,595.7 10,658.3 13,949.0 16,235.6
 Pre-tax Profit       5,871.5 9,171.0 12,445.3 14,471.0               for 2008 and also revised up our estimate on coal price by 25%
 Net Profit           3,712.1 5,882.4 8,432.9 9,709.3                 to US$100/tonne for 2008. Coal mining acquisition will provide
 Net Pft (Pre Ex.)    3,712.1 5,882.4 8,432.9 9,709.3                 diversification for ASII, which is positive for its long-term
 EPS (Rp)               916.9 1,453.0 2,083.0 2,398.3                 performance. It would also secure capacity utilisation of United
 EPS Gth (%)             (32)       58       43       15
 Diluted EPS (Rp)       916.9 1,453.0 2,083.0 2,398.3
                                                                      Tractors (UNTR)’s mining contracting division.
 Net DPS (Rp)           490.0    275.1    435.9    624.9                  Relevance: We have tuned up our FY07F, FY08F and FY09F
 BVPer Share (Rp)     5,527.1 6,705.1 8,352.2 10,125.6                EPS estimates by 7.1%, 37.9% and 42.1%, respectively. Hence,
 PE (X)                  29.6     18.7     13.0     11.3
 P/Cash Flow (X)         29.9     19.9     13.8     12.1              we raise our valuation on the counter to Rp34,000, representing
 EV/EBITDA (X)           17.2     12.0      9.4      8.3              16.4x FY08F PE. The stock is currently trading at 13.0x FY08F PE.
 Net Div Yield (%)        1.8      1.0      1.6      2.3              We recommend BUY.
 P/Book Value (X)         4.9      4.0      3.2      2.7
 Net Debt/Equity (X)      0.6      0.4      0.4      0.4
                                                                      Continued robust growth. We believe robust EPS growth will continue
 ROAE (%)                17.3     23.8     27.7     26.0              in 2008, to be driven by low interest rate, strong expected GDP growth
                                                                      of 6.5% y-o-y in 2008 (the fastest since 1996), and higher CPO and coal
 SHARE PRICE CHART                                                    prices. Car and motorcycle sales grew by 36.2% y-o-y and 5.9% y-o-y in
                                                                      FY07, respectively. Meanwhile, UNTR’s Komatsu heavy equipment sales
        Rp
     29385.00
                                                                      posted robust growth of 54% in 2007. As such, we are confident that
     27385.00                                                         ASII would be able to continue its strong growth in FY08F.
     25385.00
     23385.00                                                         Diversifying to coal business. ASII is diversifying its business to the coal
     21385.00
     19385.00
                                                                      mining sector. It has acquired two coal mining companies through its
     17385.00                                                         subsidiary UNTR, while acquisition of a large mine will be conducted
     15385.00
     13385.00                                                         directly by ASII (parent company). Coal mining acquisition is expected to
     11385.00
            Jan-07   Apr-07    Jun-07   Sep-07    Nov-07   Jan-08
                                                                      become one of the catalysts for ASII, it would enhance its business
             Astra International                 100-Day MA           diversification, offsetting part of the cyclicality of the automotive
                                                                      business. In terms of operating profit, contributions from the
 AT A GLANCE                                                          automotive division have declined from 57.3% in 2003 to 22.8% in
 Issued Capital (m shrs)                                    4,048     9M07.
 Mkt. Cap (Rpbn/US$m)                            109,710 / 11,761
 Major Shareholders                                                   High CPO price sustainable. We believe the global supply-demand
    Cycle & Carriage (%)                                       50.1   imbalance in major oilseeds and vegetable oil (in addition to several
 Free Float (%)                                                49.9   factors such as adverse weather, limited availability, and persistently
 Avg. Daily Vol.(‘000)                                        5,214   high crude oil price) has intensified pressure on CPO price in the coming
                                                                      year. Hence, we are upbeat on the outlook of Astra Agro Lestari (AALI).
 Earnings Rev (%):            2008: 37.9         2009: 42.1
 Consensus EPS (Rp):          2008: 1,724.3      2009: 2,031.9
                                                                      Target price upgraded to Rp34,000. We have revised up our target price
 Variance vs Cons (%):        2008: 20.8         2009: 18.0           by 69.0% to Rp34,000 (rounded from Rp34,168), based on sum-of-the-
                                                                      parts (SOTP) valuation. ASII deserves our BUY call on the back of its
 Sector : Consumer Goods                                              solid management, good corporate governance and diversified business
 Bloomberg/Reuters Code: ASII IJ/ASII.JK                              with exposure to automotive, CPO and coal. It is also expected to
 Principal Business: Conglomerate with business focus on              benefit from those commodity prices that are still surging.
 automotive, plantation, heavy equipment and coal
 mining.


www.dbsvickers.com
Refer to important disclosures at the end of this report
Company Focus                                                                                                                                                                             Astra International


Highlights
Strong economic growth acceleration positive for ASII. Indonesia’s economy has registered the fastest
growth in three years of 6.3% y-o-y in 9M07, in line with DBS economist’s estimates. The economy’s
momentum in 2007 has been surprising and it has since been steadily accelerating. Private consumer
spending and investment reached 5.3% in 3Q07, higher than our expectation. This momentum has been
supported by the Central Bank’s decision of slashing policy rate by 475bps in the past two years.


Growth to rise on domestic demand                                                                            Inflation vs 1M SBI rate


 %-pt contribute to YoY GDP growth                                                                             20.0                                                                                             13.0
 10
                                                                                                                                                                             1M SBI (RHS)
                         Revival in
                         investments                                            DBSf
  8
                                                                                                                                                                                                                11.0
  6                                                                                                            15.0

  4                                                                                                                                                                                                             9.0

  2                                                                                                            10.0
                                                                                                                                                                                                                7.0
  0
                                                                                                                                                             yoy Inflation (LHS)
  -2
                                                                                                                5.0                                                                                             5.0
   Mar-05           Dec-05 Sep-06                      Jun-07 Mar-08 Dec-08
                   Consumptn                                Govt spendg
                                                                                                                      Jan- Jul- Jan- Jul- Jan- Jul- Jan- Jul-
                   Investment                               Net exports                                                04 04 05 05 06 06 07 07
Source: DBS                                                                                                  Source: BI. BPS


From being automotive-focused to becoming a commodity player. ASII has emerged from being an
automotive-focused conglomerate to become a more diversified company with exposure to CPO and coal.
Revenue contributions from heavy equipment have increased from 1.2% in 2003 to 26.1% in 9M07. In
terms of operating profit, contributions from agribusiness and heavy equipment divisions increased from
22.5% and 5.2% in 2003 to 32.5% and 28.9% in 9M07. As such, revenue contributions from automotive
division have declined from 81.1% in 2003 to 54.8% in 2006, while operating profit contribution fell from
57.3% in 2003 to 22.8% in 9M07.

                                                     Agribusiness has become the largest contributor to
Automotive’s revenue contribution has been declining operating profit
                                                                                                                  100%            54                   52                   50                   77                79
  100%
                                                       3,371                3,758              2,799
                2,543             3,473                                                                                                                                                                            845
                                                                                                                                 626
                                                                                                                                                   1,180                  1,719
                                  3,646                7,311                                                                                                                                   1,475
                2,287                                                       7,367              5,532
                 379                                                                                               75%
                                                                                                                                                                                                                  1,330
  75%                             5,995
                                                       13,281
                                                                           13,720                                                                  1,426                  1,762                 859
                                                                                              10,462

                                                                                                                   50%           1,924
                                                                                                                                                                                                                  1,684

  50%                                                                                                                                                                                          1,340
                                                                                                                                                   864
                                                                                                                                                                          1,700
            25,597
                                                                                                                   25%
                                 30,736                                                                                           17
                                                       37,488                                                                                                                                                     1,893
                                                                           30,259                                                                  1,295                                       1,199
                                                                                              21,958                             754                                      1,199
  25%

                                                                                                                      0%
                                                                                                                                 2003              2004                    2005                 2006              9M07



   0%
                2003              2004                  2005                2006               9M07               -25%

   Automotive     Heavy Equip/Mining   Financial Services   Agribusiness   Information Technology   Others        Agribusiness    Heavy Equip/Mining        Automotive   Financial Services   Information Technology     Others

Source: Company




Riding on the strong automotive sales recovery. Domestic demand for cars grew by 36.2% y-o-y and ASII’s
car (four wheelers) sales grew 27.6% y-o-y in 2007. At the same time, domestic motorcycle (two wheelers)
                                                                                                                                                                                                                                  2 of 9
Company Focus                                                                                       Astra International


sales were up 5.9%. However, ASII’s overall sales fell by 8.5%. Low interest rate environment, strong
economic growth as well as low base of 2006 sales have boosted 2007 automotive sales. Nevertheless, we
also saw stiffer competition in both the car and motorcycle markets. ASII’s market share in cars and
motorcycles slid from 54.8% and 52.9% in 2006 to 51.4% and 45.7% in 2007, respectively. In 2007, Nissan
and Yamaha had emerged as tough competitors for ASII in the car and motorcycle markets.

4W and 2W sales on an uptrend
  Units                                                                                                           Units
 550,000                                                                                                         55,000


 480,000                                                                                                         48,000


 410,000                                                                                                         41,000


 340,000                                                                                                         34,000


 270,000                                                                                                         27,000


 200,000                                                                                                     20,000
           Jan-05            Jun-05   Nov-05         Apr-06      Sep-06     Feb-07       Jul-07        Dec-07

                                          2W (LHS)        4W (RHS)
Source: Gaikindo


Still dominates 4W market                                     2W market share to normalise at 45% last year
                                                                                        Suzuki
                    Others                                                               14%      Kawasaki
                     12%                                                                            1%

                                                                                                         Others
                                                                                                          1%
     Suzuki
      13%

                                                               Yamaha
                                                 Astra Intl     39%
                                                   52%


  Mitsubishi
    14%                                                                                                      Astra Intl
                                                                                                               45%


                    Honda
                     9%
Source: Gaikindo


Robust demand for heavy equipment. Strong commodity price had boosted demand for heavy equipment
in 2007. Total sales of Komatsu heavy equipment for the year reached 3,454 units, up 54% y-o-y and
already surpassed the level of 2,250 units sold for FY06. Agricultural and mining equipment was the
frontrunner, in line with the surging price of coal and CPO commodities. Of the total number of Komatsu
units sold, 41% was mining machinery, while agricultural contributed 33%. ASII’s subsidiary, UNTR, is on
track to meeting our FY07 target of 3,488 units.

Strengthening coal mining business. ASII has acquired two small-to-medium-sized coal mining
companies through its subsidiary UNTR, while for acquisition of large mining group, it would be
conducted directly by ASII’s parent. UNTR acquired Dasa Eka Jasatama (DEJ) that sold a total of 3.5m
tonnes of coal as of 2007 and generated revenue of Rp1.1tr in 9M07 with 15.8% gross margin.
UNTR has also recently acquired Tuah Turangga Agung (TTA) that has an estimated coal reserves of
40m tonnes with estimated annual production of 3-4m tonnes p.a. The mine is expected to be fully
                                                                                                                          3 of 9
Company Focus                                                                                                                                                      Astra International


operational in 3-4 years’ time and it will double UNTR’s annual coal production from the current 3.5m
tonnes. In 4Q07, ASII had planned on acquiring Bayan’s coal mining, Gunung Bayan Pratama Coal
(Bayan). Bayan produces 1.5m tonnes of coal with high calorie and contributes c.Rp626bn. It has been
reported that Bayan’s coal assets are worth US$1.6-1.8bn.

Coal price jumped 74.8% in the past one year                                                 DEJ's coal sales volume steadily improving
   US$/tonne
                                                                                                         '000 tonnes
     95.0                                                                                             400



                                                                                                      340

     75.0
                                                                                                      280



                                                                                                      220
     55.0


                                                                                                         160


     35.0                                                                                                100
        Dec-04              Jun-05      Dec-05     Jun-06      Dec-06     Jun-07    Dec-07
                                                                                                                Jan-07          M ar-07    M ay-07     Jul-07     Sep-07     No v-07

Source: Bloomberg                                                                                    Source: UNTR


CPO - the new hot commodity. CPO price had increased by 61.3% to US$1,000/tonne (CIF Rotterdam) in
2007, driven by deficit production in most of the major oilseeds and vegetable oils. In addition, CPO price
tended to move in line with crude oil price, as the former is the most efficient form of material for
producing bio-diesel. As such, the strong CPO price has increased AALI’s average selling price by 65% y-o-y
to Rp5,673/kg in 9M07, despite its lower production volume of 7.3% to 2,618,000 tonnes. AALI also posted
stronger-than-expected 9M07 results with net profit of Rp1.29tr (up 106 y-o-y).


Before 2002: No correlation at all *                                                         Since 2002: Showing positive correlation*
         1,200                                                                                          1,200


         1,000                                                                                          1,000
  US$ per tonne




                  800
                                                                                             US$ per tonne




                                                                                                             800

                  600                                                                                        600

                  400                                                                                        400

                  200                                                                                        200

                   0                                                                                           0
                   Jan-97      Jan-99     Jan-01      Jan-03      Jan-05       Jan-07
                                                                                                               Jan-97          Jan-99     Jan-01     Jan-03     Jan-05     Jan-07
                        Palm          ap
                                     R eseed           yb
                                                     So ean              ren ru e il
                                                                        B tC d O
                                                                                                                        Palm         ap
                                                                                                                                    R eseed            yb
                                                                                                                                                     So ean         ren ru e il
                                                                                                                                                                   B tC d O


* Taken from Dr. James Fry presentation “ Do Biofuels Set a Ceiling to Oil Prices?” to the 2007 GAPKI Conference.
Dr. James Fry is chairman of LMC International
Source: LMC International



Prospects
Robust economic growth. DBS economist believes that Indonesia will register the strongest GDP growth
(since 1996 of 6.5%) in 2008, to be driven by domestic consumption and investment. Meanwhile, despite
our economist forecasts on inflation of 6.5% in 2008, the lower Fed Fund rate should give a breather for
Bank Indonesia to exercise more accommodative policy. As such, it will boost the performance of ASII’s
automotive division as well as its financial division.


                                                                                                                                                                                       4 of 9
Company Focus                                                                                                                     Astra International


Automotive sales will directly benefit from a low interest rate environment, while the financial division has
a high correlation with the performance of automotive sales. High investment spending is also a driver for
sales of heavy equipment.

Coal business expansion. Coal mine acquisitions are expected to become one of the catalysts for ASII, as it
would diversify the company’s business and coal price is anticipated to hover at a high level. We have
thereby raised our forecast on coal price for FY08-09 by 25% and 28% to US$100/tonne and US$90/tonne,
respectively. ASII will have at least 7m tonnes p.a. of coal production over the next 3-4 years (through
UNTR), while it has also planned on acquiring large coal mines such as Bayan.

Strong growth from mining contracting business. Along with the uptrend in coal mining, the mining
contracting business is also on the rise. UNTR’s subsidiary Pama is a core beneficiary of this situation.
Acquisitions of coal mines by ASII and UNTR is a positive move for Pama, as it would secure capacity
utilisation as in the future, some of UNTR’s clients may in-source mining contracting services to its
affiliates.

CPO price has shown sustainable uptrend. As our CPO analyst takes a very bullish view on the outlook of
CPO price, the same can be applied to the outlook of AALI. We believe that the global supply-demand
imbalance in major oilseeds and vegetable oil (in addition to several factors such as adverse weather,
limited availability, and persistently high crude oil price) will intensify pressure on CPO price in the coming
year.

Another good year for automotive sale. Strong economic growth, new product launching and low interest
rate environment will boost car and motorcycle sales in 2008. We forecast 17.5% and 7.5% sales volume
growth of cars and motorcycles in 2008, respectively, while we are optimistic on both segments being able
to post 10% growth in 2009F. We believe motorcycle sales should grow stronger in 2009, in line with
stronger recovery in purchasing power.

However, with consolidation and tighter competition in the market, ASII’s market share in cars in 2007
declined to 51.4% from 54.8% in 2006. As for the motorcycle market, ASII’s share fell to 45.7% in 2007
from 52.9% in 2006. We forecast ASII’s long-term market share in cars and motorcycles to stabilise at 49%
and 45%, respectively. ASII’s market share in motorcycles was below 50% during the pre-crisis period.
During the crisis, ASII managed to snatch market share easily, as many of its competitors’ distributors were
in distress. Hence, now its market share falls back to its normal level.

Sustainable diversified growth. Automotive sales are highly cyclical; in 2006, ASII suffered from a
slowdown in the sale of cars and motorcycles. We take a positive view on the company’s strategy in
overcoming this cyclicality by expanding its business to infrastructure and the energy sector such as coal.
Though some might argue that diversification can be exercised at investors’ portfolio level, stability of
revenue and earnings stream are crucial for both the operation of the company and the financial market.
We believe ASII will be able to maintain its dominancy in automotive, CPO and coal businesses.


Projected revenue breakdown                                                  Projected gross profit
  100%                                                                         100%     427         518         624         748        893
                     6,386       6,373      7,010                                                                                                 1,061
           6,680                                        7,711        8,482
                                                                                                    3,352      3,199       3,519       3,871      4,258
           8,942     10,732     11,512      11,981     12,430       12,316             3,845

   75%                                                                         75%                             5,090       5,361
                                                                                                    4,794                              5,576
                     26,450     28,037      29,583     30,792       30,251             4,188                                                      7,002
          22,768


   50%                                                                         50%                             7,045       7,617
                                                                                                    5,936                              8,188
                                                                                       4,952                                                      7,594



          42,737     50,519     57,868      62,584     67,275       66,037
   25%                                                                         25%

                                                                                       6,047        7,698      8,196       8,734       9,129      9,177


    0%                                                                          0%
          2008       2009        2010        2011        2012         2013              2008         2009       2010       2011        2012        2013
      Automotive              Heavy Equip/Mining       Financial Services         Financial Services        Automotive               Heavy Equip/Mining
      Agribusiness            Information Technology   Others                     Agribusiness              Information Technology   Others
Source: DBSVI



                                                                                                                                                          5 of 9
Company Focus                                                                                            Astra International


Forecast
Forecast revision. We have revised up our forecast on earnings by 7.1% in 2007F, 37.9% in 2008F and
42.1% in 2009F. The higher earnings estimates are to be supported by higher-than-expected revenue from
automotive, finance, agribusiness as well as heavy equipment and mining contracting businesses. We have
revised up our projection on revenue from the financial service division, as we believe ASII’s automotive
sales are poised to grow stronger, which will boost the business of its multi-finance division.

Forecast revision
                                       2007F                         2008F                              2009F
                               Old       New        %         Old      New          %       Old           New           %
 Sales                      67,185     68,076      1.3     77,524    82,037        5.8   88,237         95,132         7.8
 Gross Profit               14,599     15,491      6.1     16,319    19,484       19.4   18,234         22,326        22.4
 Operating Profit            6,841      7,726     12.9      7,827    10,959       40.0    8,934         12,979        45.3
 Pretax Profit               8,585      9,171      6.8      9,675    12,445       28.6   10,958         14,471        32.1
 Net Profit                  5,493      5,882      7.1      6,113     8,433       37.9    6,833          9,709        42.1

 Gross profit margin (%)      21.7         22.8              21.0      23.7                20.7           23.5
 Opg profit margin (%)        10.2         11.3              10.1      13.4                10.1           13.6
 Net operating margin (%)      8.2          8.6               7.9      10.3                 7.7           10.2
Source: DBSVI


Forecast assumptions
                                                            2008F             2009F         2010F                   2011F
 Automotive
 Domestic 4W growth                    %                      17.5              10            12.5                     7.5
 ASII market share                     %                        51              51              50                      49

 ASII 's 4W sales                    Units                260,344         299,395          330,215                347,882

 Domestic 2W sales growth              %                       7.5              10                10                   7.5
 ASII market share                     %                        45              45                45                    45

 ASII's 2W sales                     Units               2,267,947      2,494,742        2,744,216               2,950,032

 Heavy Equipment
 Sales volume                         Unit                  5,286             5,750          5,865                   5,983

 Mining Contracting
 Coal produced                  million/tonne                 62.1             68.3           71.7                    75.3

 Coal Mining
 Coal produced                  million/tonne                  3.7              5.5               6.4                  7.2

 Agribusines
 Sales Volume (ton)                  Tonnes               986,813       1,031,546        1,078,515               1,186,367
 CPO Price                            Rp m                     6.2             5.6              5.3                     5.2
Source: DBSVI




Key risks
Macro economic risk. The risk to our forecast is higher-than-expected inflationary pressure that could
dampen purchasing power and push up interest rate. Those factors could result in slower economic growth
and a volatile currency.

Weak coal and CPO prices. One of the key assumptions in our forecast is strong coal and CPO prices. Coal
prices have soared since the middle of last year, driven by higher energy cost in general as well as specific
problem in coal delivery. At the same time, high CPO price could be under pressure, as some governments
have banned the use of CPO for producing bio-diesel or banned CPO for export.

Stiffening competition. Fiercer competition in both the car and motorcycle markets could hurt ASII’s
profitability should competition become irrational. However, we believe ASII will still be able to weather
competition, though it could result in lower gross and operating margins.


                                                                                                                              6 of 9
Company Focus                                                                                              Astra International


Valuation
Attractive investment proposition, BUY. We believe ASII deserves our BUY call on the back of:

             Solid management and good corporate governance. ASII is majority owned and controlled by
             Jardine Group.
             ASII is the best proxy for investors whom are seeking both high commodity prices and recovery
             in domestic consumer demand.
             ASII is the market leader in its businesses: automotive, CPO plantation, heavy equipment and
             mining contracting.
             Indonesia’s macro economy has long been on track for the fastest growth since 1996, while
             commodity prices are peaking.

Target price upgraded to Rp34,000. We have revised up our target price by 69.0% to Rp34,000 (rounded
from Rp34,168), based on sum-of-the-parts (SOTP) valuation methodology. It represents 16.4x FY08F PE.
From our valuation, it seems that AALI has a significant contribution to the valuation, at par with Astra
Honda Motor (AHM).

We believe contributions from UNTR will increase in the future, to be driven by acquisitions and high
energy price. We have valued AHM, Toyota Astra Motor (TAM), Astra Daihatsu Motor (ADM) with
dividend discount model (DDM) and we believe those companies deserve high valuation for their
dominance of the market and global brand equity. Our valuation has not included net present value (NPV)
of potential coal mine acquisitions.


Valuation
 Operation                           Equity          Valuation             NAV     NAV to AI       NAV per           % of
                                   interest       methodology         2008E (Rp      (Rpbn)          share           total
                                        (%)                                 bn)                       (Rp)             EV
 Dealership (parent)                  100%             DCF                8,931           8,931      2,206            6%
 Distribution / assembly
   Astra Honda Motor                 50%             DDM*                86,725          43,363      10,711          31%
   Toyota Astra Motor                51%             DDM*                 8,433           4,301       1,062           3%
   Astra Daihatsu Motor              32%             DDM*                12,772           4,070       1,005           3%
   Astra Otoparts                    86%        Market cap                2,468           2,122         524           2%
   Various car divisions          Various       Book value                1,024           1,024         253           1%
 Finance companies
   Astra Sedaya Finance              53%           2x 08BV                3,095        1,640            405            1%
   Federal Int’l Finance            100%           2x 08BV                4,543        4,543          1,122            3%
   Other finance companies        Various          2x 08BV                1,049        1,049            259            1%
   Bank Permata                      32%        Market cap                6,582        2,106            520            2%
   Astra Agro Lestari                80%    18x FY07 PER**               50,144       40,115          9,909           29%
 United Tractors                     58%             DCF**               41,354       23,985          5,925           17%
 Astra Graphia                       77%        Market cap                  668          514            127            0%
 Total enterprise value                                                              137,764         34,030          100%
  Parent net cash/(debt)                                                                 561            139
  Equity value (Rpbn)                                                                138,325
  Shares outstanding (mn)                                                              4,048
 NAV per share (Rp)                                                                   34,168
 Implied FY08F PER (x)                                                                  16.4
* Assuming DPR=1, (AHM ), 0.6 (TAM and ADM); Ke=17.5%; G=15%
** Based on DBSVI target price
Source: DBSVI


Peers Comparison
                                              Mkt Cap            PE           CAGR          EV/EBITDA         P/BV      ROE
                                Ticker        (US$m)      08F         09F    07-09 (%)      08F     09F        08F      07E

 Astra International            ASII IJ       11,761      13.0        11.3          28       9.4     8.3       3.2      22%
 Brilliance China              1114 HK          714       11.2         7.0        103        4.3     2.9       0.9       n.a.
 Denway Motors                 203 HK          4006       10.5         8.7          24     413.9   396.4       2.3      24%
 Dongfeng Motor Group          489 HK          1865       12.2        12.2           8       6.5     5.5       2.2      16%
 UMW Holdings                UMWH MK           2421       14.9        13.5          14       7.6     7.6       2.5      16%
 Proton                       PROH MK           691      246.9        25.6        N.A.       2.3     2.1       0.4     -11%
Note: With exception for ASII, we have used data from 24 Jan 2008
Source: DBSV

                                                                                                                                7 of 9
Company Focus                                                                                                       Astra International



Income Statement (Rpbn)                                                       Balance Sheet (Rpbn)
FY Dec                         2006F       2007F        2008F       2009F     FY Dec                       2006F      2007F       2008F     2009F
Turnover                    55,508.1     68,075.8    82,037.0     95,132.3    Net Fixed Assets           13,030.3   14,242.8   14,876.5   15,192.8
Cost of Goods Sold           (43,386.     (52,584.    (62,553.     (72,806.   Invts in Assocs & JVs       8,504.3   10,777.9   13,835.7   18,168.4
Gross Profit                12,122.0     15,491.2    19,483.5     22,325.8    Other LT Assets            20,663.2   19,275.7   24,419.8   28,748.8
Other Opg (Exp)/Inc         (7,130.7)    (7,764.7)   (8,524.8)    (9,347.0)   Cash & ST Invts             5,148.4    4,278.2    3,526.1    4,746.5
Operating Profit              4,991.3      7,726.5   10,958.7     12,978.8    Other Current Assets       10,583.1   11,587.7   14,492.8   18,036.9
Other Non Opg (Exp)/Inc         (72.3)       340.7       162.4        117.3   Total Assets               57,929.3   60,162.2   71,150.8   84,893.4
Associates & JV Inc           1,359.9      1,482.5     1,647.6      1,898.2
Net Interest (Exp)/Inc        (407.4)      (378.7)     (323.4)      (523.3)   ST Debt                    12,502.5 8,600.1 7,500.0          7,000.0
Exceptional Gain/(Loss)            0.0         0.0         0.0          0.0   Other Current Liab          7,568.0 8,999.9 10,049.3        11,396.4
Pre-tax Profit                5,871.5      9,171.0   12,445.3     14,471.0    LT Debt                     9,451.2 8,357.8 11,769.1        16,325.8
Tax                         (1,380.7)    (2,201.0)   (2,426.8)    (2,821.8)   Other LT Liabilities        1,976.8 1,971.9 2,023.3          2,075.8
Minority Interest             (778.7)    (1,087.6)   (1,585.6)    (1,939.8)   Shareholder’s Equity       22,375.8 27,144.5 33,812.6       40,992.1
Preference Dividend                0.0         0.0         0.0          0.0   Minority Interests          4,055.1 5,088.0 5,996.4          7,103.3
Net Profit                    3,712.1      5,882.4     8,432.9      9,709.3   Total Cap. & Liab.         57,929.3 60,162.2 71,150.8       84,893.4
Net profit before Except.     3,712.1      5,882.4     8,432.9      9,709.3
EBITDA                        7,595.7    10,658.3    13,949.0     16,235.6
                                                                              Non-Cash Wkg. Cap           3,015.0 2,587.8 4,443.4 6,640.5
Sales Gth (%)                  (10.1)        22.6        20.5         16.0    Net Cash/(Debt)            (16,805. (12,679. (15,743. (18,579.
EBITDA Gth (%)                 (20.4)        40.3        30.9         16.4
Operating Profit Gth (%)       (22.2)        54.8        41.8         18.4
Effective Tax Rate (%)           23.5        24.0        19.5         19.5

Cash Flow Statement (Rpbn)                                                    Rates & Ratios
FY Dec                         2006F        2007F       2008F       2009F     FY Dec                       2006F      2007F       2008F     2009F
Pre-Tax Profit                5,871.5      9,171.0   12,445.3     14,471.0    Gross Margin (%)               21.8      22.8      23.7      23.5
Dep. & Amort.                 1,316.8      1,108.6     1,180.3      1,241.4   Operating Margin (%)            9.0      11.3      13.4      13.6
Tax Paid                           0.0         0.0          0.0         0.0   Net Profit Margin (%)           6.7       8.6      10.3      10.2
Assoc. & JV Inc/(loss)             0.0         0.0          0.0         0.0   ROAE (%)                       17.3      23.8      27.7      26.0
Chg in Wkg.Cap.               6,671.8      1,660.7   (6,925.1)    (6,471.3)   ROA (%)                         6.2      10.0      12.8      12.4
Other Operating CF          (1,286.0)    (1,939.4)   (2,842.8)    (3,203.9)   ROCE (%)                        8.5      13.3      17.6      17.1
Net Operating CF            10,589.2       7,727.4       799.8      1,704.4   Div Payout Ratio (%)           53.4      18.9      20.9      26.1
Capital Exp.(net)           (2,803.8)    (2,250.0)   (1,750.0)    (1,500.0)   Interest Cover (x)             12.3      20.4      33.9      24.8
Other Invts.(net)               (49.7)       288.7       (25.1)        12.5   Asset Turnover (x)              0.9       1.2       1.2       1.2
Invts in Assoc. & JV               0.0         0.0          0.0         0.0   Debtors Turn (avg days)        32.7      30.2      36.5      44.5
Div from Assoc & JV                0.0         0.0          0.0         0.0   Creditors Turn (avg days)      30.8      26.2      26.7      27.1
Other Investing CF              353.4        325.1       331.1        279.2   Inventory Turn (avg days)      38.4      27.3      22.1      17.9
Net Investing CF            (2,500.1)    (1,636.3)   (1,444.0)    (1,208.3)   Current Ratio (x)               0.8       0.9       1.0       1.2
Div Paid                    (1,983.7)    (1,113.6)   (1,764.7)    (2,529.9)   Quick Ratio (x)                 0.6       0.7       0.8       1.1
Chg in Gross Debt           (4,565.7)    (4,995.7)     2,311.2      4,056.7   Net Debt/Equity (X)             0.6       0.4       0.4       0.4
Capital Issues                     0.0         0.0          0.0         0.0   Capex to Debt (%)              12.8      13.3       9.1       6.4
Other Financing CF            (748.4)      (613.5)     (654.5)      (802.5)   N.Cash/(Debt)PS (Rp)      (4,151.1) (3,132.1) (3,888.8) (4,589.3)
Net Financing CF            (7,297.8)    (6,722.8)     (108.0)        724.3   Opg CFPS (Rp)                 967.7 1,498.5 1,908.2 2,019.5
Net Cashflow                    791.3      (631.7)     (752.2)      1,220.4   Free CFPS (Rp)              1,923.1 1,353.0 (234.7)          50.5
Quarterly / Interim Income Statement (Rpbn)                                   PE Chart (x)
FY Dec                       4Q2006 1Q2007 2Q2007 3Q2007                       20.0
Turnover                    55,508.1 14,731.0 31,571.0 50,621.0
Cost of Goods Sold           (43,386. (11,414. (24,443. (38,836.               18.0
Gross Profit                12,122.0 3,316.6 7,127.1 11,784.1                  16.0
Other Oper. (Exp)/Inc       (7,130.7) (1,693.4) (3,814.5) (5,929.1)
EBIT                          4,991.3 1,623.2 3,312.6 5,854.9                  14.0
Other Non Opg (Exp)/Inc         (72.3)    113.7     363.1     654.1            12.0
Associates & JV Inc           1,359.9     384.9     771.3 1,269.3
Net Interest (Exp)/Inc        (407.4) (114.7) (196.5) (230.2)                  10.0
Exceptional Gain/(Loss)            0.0      0.0       0.0       0.0
                                                                                 8.0
Pre-tax Profit                5,871.5 2,007.1 4,250.5 7,548.2
Tax                         (1,380.7) (482.1) (1,058.1) (1,939.8)                6.0
Minority Interest             (778.7) (249.5) (564.7) (1,027.8)
Net Profit                    3,712.1 1,275.5 2,627.7 4,580.5                    4.0
Net profit bef Except.        3,712.1 1,275.5 2,627.7 4,580.5                    2.0
EBITDA                    8,430.6         2,737.6     5,743.4      9,730.5         2004         2005         2006          2007            2008
Sales Gth (%)                38.0           (73.5)      114.3         60.3
EBITDA Gth (%)               32.1           (67.5)      109.8         69.4
EBIT Gth (%)                 30.7           (67.5)      104.1         76.7
Gross Margins (%)            21.8             22.5       22.6         23.3
EBIT Margins (%)              9.0             11.0       10.5         11.6
Source: Company, DBS Vickers                                                                                                                  8 of 9
Company Focus                                                                                            Astra International




DBSV recommendations are based an Absolute Total Return* Rating system, defined as follows:
STRONG BUY (>20% total return over the next 3 months, with identifiable share price catalysts within this time frame)
BUY (>15% total return over the next 12 months for small caps, >10% for large caps)
HOLD (0-15% total return over the next 12 months for small caps, 0-10% for large caps)
FULLY VALUED (negative total return i.e. > -10% over the next 12 months)
SELL (negative total return of > -20% over the next 3 months, with identifiable catalysts within this time frame)

Share price appreciation + dividends

DBS Vickers Research is available on the following electronic platforms: DBS Vickers (www.dbsvresearch.com); Thomson
(www.thomson.com/financial); Factset (www.factset.com); Reuters (www.rbr.reuters.com); Capital IQ (www.capitaliq.com)
and Bloomberg (DBSR GO). For access, please contact your DBSV salesperson.

ANALYST CERTIFICATION
The analyst certifies that the views about the companies and their securities expressed in this report
accurately reflect his/her personal views. The analyst also certifies that no part of his/her compensation was,
is, or will be, directly, or indirectly, related to specific recommendations or views expressed in this report.

This document is published by PT DBS Vickers Securities Indonesia (“DBSVI”), a direct subsidiary of DBS
Vickers Securities Holdings Pte Ltd ("DBSVH"). The research is based on information obtained from sources
believed to be reliable, but we do not make any representation or warranty as to its accuracy, completeness
or correctness. Opinions expressed are subject to change without notice. This document is prepared for
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