Documents
Resources
Learning Center
Upload
Plans & pricing Sign in
Sign Out

Regional Morning Pack - Download as PDF

VIEWS: 13 PAGES: 50

									Regional
Morning Pack
DBS Group Research . Equity                                                                                                                                       15 January 2008

Spotlight on…                                                                                                    Updates & Results
(SP) Jiutian: Earnings visibility has reduced                                                                    REGIONAL
BUY; S$0.27; JIUC SP; Price Target: 12-Month S$ 0.42 (Prev S$
                                                                                                                 Post Conference Notes: Key Takeaways from the Pulse of Asia
0.76)
                                                                                                                 Singapore Conference
Jiutian announced the acquisition of 24.5% stake in a new
methanol plant, and indicated a weak 4Q07 due to high                                                            SINGAPORE
methanol cost and slower ramp-up of its new DMF plant. This
prompted us to lower our earnings for FY07-09F, and also                                                         Ellipsiz: More downside expected
target price. But we believe the earnings risk have been                                                         SELL (Downgrade from HOLD); S$0.30; ELL SP; Price Target: 12-Month
factored into the share price.                                                                                   S$ 0.20 (Prev S$ 0.58)
                                                                                                                 Jiutian – See Spotlight
(HK) Li Ning: Room for expansion
BUY; HK$25.35; 2331 HK; Price Target: 12-Month HK$ 30.00                                                         Results Snapshot
                                                                                                                 SPH: Operating earnings firm as expected
We reaffirm our positive view on Li Ning. FY07 targets for
                                                                                                                 BUY; S$4.60; SPH SP; Price Target: S$ 5.80
same-store
sales and store expansion plans are on track, with
                                                                                                                 HONG KONG
management having raised its FY08 target to 5,600-5,700
stores. Meanwhile, sub-brand Z-do is performing well and                                                         Comba: Strengthening growth momentum
Aigle should breakeven in 2H08. There could be room for                                                          BUY; HK$2.65; 2342 HK; Price Target: 12-Month HK$ 4.60
upgrade to our earnings forecasts.
                                                                                                                 Li Ning – See Spotlight
(TB) Bangkok Expressway: Limited impact from Southern
Outer Ring Road                                                                                                  MALAYSIA
BUY; Bt23.00; BECL TB; Price Target: 12-month Bt 32.00
                                                                                                                 Post Conference NotesKey: Takeaways from the Pulse of Asia
BECL’s traffic volume grew 4.2% y-o-y in 2007, despite falling
                                                                                                                 Singapore Conference
0.3% y-o-y and 0.8% q-o-q in 4Q07 following the opening of
the Southern Outer Ring Road. The company is starting to feel
                                                                                                                 THAILAND
the impact of some traffic lost to the Southern Ring Road,
especially trucks from stage one of the expressway. But this                                                     Bangkok Expressway - See Spotlight
should be temporary.
                                                                                                                 TISCO Bank: Stronger hire purchase loan growth is key driver
                                                                                                                 BUY; Bt26.25; TISCO TB; Price Target: 12-Month Bt 33.50 (Prev Bt 34.50)
Key Indices                                                                                                      Post Conference NotesKey: Takeaways from the Pulse of Asia
                                              % ch g vs
                         C lo s e d a s a t   p re v io u s                                                      Singapore Conference
I n d ic e s                 1 4 .1 .0 8         c lo s e      Y T D (% )     Q T D (% )           M T D (% )
A s ia

KLCI                               1 ,5 0 7           - 0 .6           4 .3            4 .3               4 .3
J C I In d e x                     2 ,8 1 0           - 0 .7           2 .4            2 .4               2 .4
PCO M P                            3 ,4 8 2           - 0 .6         -3 .8           - 3 .8             -3 .8
T a ie x                           8 ,1 7 3             1 .8         - 3 .9          - 3 .9             - 3 .9
H S C E I In d e x               1 5 ,4 8 0           - 2 .2         -4 .0           - 4 .0             -4 .0
H S C C I In d e x                 5 ,8 4 7           - 2 .8         -4 .3           - 4 .3             -4 .3
M X F E J in d e x                    540             - 0 .8         -4 .8           - 4 .8             -4 .8
H ang Seng                       2 6 ,4 6 8           - 1 .5         -4 .8           - 4 .8             -4 .8
K O SPI                            1 ,7 6 6           - 0 .9         -6 .9           - 6 .9             -6 .9
FSSTI                              3 ,2 1 8           - 2 .1         -7 .1           - 7 .1             -7 .1
SET                                   791             - 0 .7         -7 .8           - 7 .8             -7 .8
N ik k e i 2 2 5                 1 4 ,1 1 1           - 1 .9         -7 .8           - 7 .8             -7 .8

U . S ./ O t h e r s
D o w Jo n e s                   1 2 ,7 7 8            1 .4          - 3 .7          - 3 .7             - 3 .7
S&P                                1 ,4 1 6            1 .1          - 3 .5          - 3 .5             - 3 .5
NASDAQ                             2 ,4 7 8            1 .6          - 6 .6          - 6 .6             - 6 .6
FTSE 100                           6 ,2 1 6            0 .2          - 3 .7          - 3 .7             - 3 .7



Market Data
                                         E P S G th (% )                       P E (x )
                                       08F             09F            08F                 09F
S in g a p o r e                       2 2 .4         1 4 .4          1 4 .0              1 2 .2
HK HS                                  1 3 .4         1 2 .5          1 7 .1              1 5 .1
H K H S C C I (R e d )                 3 0 .5         2 0 .0          2 0 .6              2 0 .5
H K H SC E I (H )                      2 4 .1         1 0 .9          2 0 .2              1 7 .8
M a la y s ia                          1 9 .1            -            1 6 .4                 -
T h a ila n d                          1 3 .6          3 .6           1 1 .0              1 0 .6
In d o n e s ia                        1 0 .6         1 1 .3          1 8 .3              1 6 .4

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."
Hong Kong / China

Market Focus
DBS Group Research . Equity                                                                                                                       15 January 2008


Singapore – 8 January 2008
The Ritz-Carlton Singapore                                  Post Conference Notes
                                                            Key Takeaways from the Pulse of Asia Singapore
                                                            Conference

                                                                  DBS Vickers hosted a conference in Singapore for 13
                                                              Hong Kong/mainland Chinese companies listed in Hong
                                                              Kong, and another 10 mainland Chinese companies listed
                                                              in Singapore. These companies are major players in the
                                                              energy, chemical, retailing, consumer product, property,
                                                              industrial, pharmaceutical, and tourism industries in Hong
                                                              Kong and mainland China.
                                                                  Representatives of these companies shared with
                                                              investors their growth strategies in 2008, provided up-to-
                                                              date information on business operations, and offered
                                                              their views on the impact of various economic and
Contributors to this piece:                                   legislative changes in China.
Dr Peter So · (852) 2820 4619
peter_so@hk.dbsvickers.com
                                                              In this report, we are presenting the key discussion points
                                                              of these companies that were brought out during the
Gideon Lo, CFA · (852) 2863 8880 ·                            conference. We have also attached detail write-ups on
gideon_lo@hk.dbsvickers.com                                   each, which were distributed to all investors who
                                                              attended the event.
Chong Lee Len (603) 2711 0972
leelen@hwangdbsvickers.com.my
                                                            PARTICIPATING COMPANIES
Mavis Hui · (852) 2863 8879 ·                               Company                      Stock Code   Currency   Share Price    Price   Mkt Cap    Rating     FY08     FY09
                                                                                                                 (14 Jan 08)   Target   (US$m)                PE (x)   PE (x)
mavis_hui@hk.dbsvickers.com                                 Hong Kong
                                                            CITIC 1616                    1883 HK      HKD         2.08         3.90      527       Buy        11.5     9.2
                                                            HKC (Holdings) Ltd            190 HK       HKD         1.82         3.00    1,916       Buy       225.7    36.5
Johnson Yuen · (852) 2971 1955 ·                            Huabao #                      336 HK       HKD         7.16         9.00     2,812      Buy        21.6    16.3
johnson_yuen@hk.dbsvickers.com                              Mingyuan                      233 HK       HKD         1.21         1.65      450       Buy        21.9    16.1
                                                            Nine Dragons                  2689 HK      HKD         16.34       24.50     8,989      Buy        22.8    16.1
                                                            Oriental Watch                398 HK       HKD         3.60         7.25      145       Buy         8.2    7.1
Patricia Yeung · (852) 2863 8908 ·                          Sino Biopharma                1177 HK      HKD         1.55         2.49      450       Buy        12.9    10.5
patricia_yeung@hk.dbsvickers.com                            Sinopec                       386 HK       HKD          9.98       13.18    21,455      Buy        10.4     9.8
                                                            SPG Land                      337 HK       HKD         6.49         8.92      863       Buy        12.0     8.0
                                                            Star Cruises                  678 HK       HKD         2.55         4.45     2,426      Buy        n.a.    82.1
Steven Liu, CFA (852) 2971 1780
                                                            Tianneng                      819 HK       HKD         1.53         2.50      196       Buy         4.7     3.4
steven_liu@hk.dbsvickers.com                                Walker Group                  1386 HK      HKD         3.52         5.65      281       Buy        15.6    12.3
                                                            Win Hanverky                  3322 HK      HKD         1.90         3.60      309       Buy         6.4     5.5
Chong Wee Lee, CFA (65) 6398 7971
                                                            # FY09 FY10 PE
weelee@dbsvickers.com
                                                            China – SGX Listed
Paul Yong, CFA (65) 6398 7951                               China Auto Electronics         CAE SP       S$         0.335       0.875      188       Buy       8.0      8.0
                                                            China Lifestyle                CLF SP       S$         0.435       0.69       146       Buy       7.8      6.3
paulyong@dbsvickers.com                                     China Sports International   CSPORT SP      S$          1.48       2.66       388       Buy       13.7     13.7
                                                            Cosco Corporation              COS SP       S$          5.13         -       8,006        -       22.6     16.4
Andy Sim, CFA (65) 6398 7969                                Ferro China                    FRC SP       S$          1.55       3.38       953       Buy       6.4      6.4
                                                            Hong Leong Asia                HLA SP       S$          3.38       4.30       899       Buy       11.1     9.5
andysim@dbsvickers.com                                      Midas Holdings               MIDAS SP       S$          1.47       1.84       866       Buy       19.2     14.4
                                                            Sihuan Pharmaceutical         SHPH SP       S$          0.71        n.a       239     Not Rated   8.3      6.7
Ho Pei Hwa, (65) 6398 7968                                  SP Chemical                   SINPU SP      S$          0.91       1.29       242       Hold      5.0      4.0
                                                            Yanlord                       YLLG SP       S$          2.68       4.27      3,385      Buy       13.1     13.0
peihwa@dbsvickers.com
                                                            Cosco Corporation Estimate from Bloomberg consensue
Singapore Research (65) 6398 7966
                                                            Source: DBS Vickers
research@dbsvickers.com
            HONG KONG/CHINA
www.dbsvickers.com
Refer to important disclosures at the end of this report.
Market Focus                                                                            Post Conference Notes



HONG KONG/CHINA
CITIC 1616 (BUY, TP: HK$: 3.90)

At our POA Singapore Conference, investors showed great interest towards CITIC 1616’s business model. A
few investors, in particular, had requested the company's management to conduct a non-deal roadshow
around the region for in-depth discussion.

As the company has been quite active in seeking business opportunities in South and Eastern Asia,
investors from these areas were coincidentally well informed about the company's business operations.

    •   Being the largest provider of telecom hub services in Asia, CITIC 1616 holds almost every
    advantage in capturing opportunities that have arisen in the region. Though telecom hub services
    have just emerged in recent years, great potential growth is in sight. Leveraging on its well-
    established hub services platform, CITIC 1616 has quite a sustainable growth outlook, underpinned by
    strong subscriber growth and growing international telecom traffic in China and the rest of the Asia-
    Pacific region.

    •    On fundamentals, we believe CITIC 1616 will continue to realise increasing economies of
    scale. Current valuation is least demanding as compared with major telecom plays in China. We
    believe the company's low-risk profile and sustainable business will add to its ongoing revaluation;
    while overseas expansion and potential assets injection will be major catalysts going forward.


HKC HOLDINGS (BUY, TP HK$3.0)

Sam Wong (Senior VP), Charlie Tian (Senior VP) and John Zhang (Deputy GM of Investment Department) of
HKC indicated that the company would benefit from the recent weakness in China’s property market to
expand its landbank for becoming a leading China property developer/investor. The US$725m investment
by Cerberus and existing shareholders as well as the US$500m loan facility from Cerberus have together
enhanced its financial strength in making more land acquisitions. Recently, it acquired one project in
Shenyang with aggregate gross floor area (GFA) of 92,000sm.

    •   HKC has started selling non-core assets in Shenzhen, Beijing, and Guangzhou to raise more
    proceeds for landbank expansion. HKC will also accelerate development of the alternative energy
    investments in wind power, waste-to-energy conversion and bio-diesel, which may have spin-off
    opportunities.


HUABAO (BUY, TP HK$9.00)

Edward Xiong (Assistant to President) of Huabao gave an overview of the company’s three major segments
and a review on its 1HFY08 results. Huabao maintains its top-line growth target of at least 30% for the
next few years and future growth will mainly come from strong organic growth plus acquisitions.

    •    On consolidation of tobacco market, Huabao will ride on the growth of its customers to achieve at
    least 20% organic growth. In addition, acquisitions will allow Huabao to solidify business relationship
    with certain top customers. The recent acquisitions, which enable Huabao to become a key flavours
    and fragrances (F&F) supplier of Zhonghua, is a good example. In addition, government has
    implemented policies to reduce the tar level. As a result, more F&F will be consumed to make up the
    loss in taste and flavour.

    •   Although Huabao’s market share in food F&F sector is still insignificant, it is establishing solid
    business relationship with large customers who are in a good market position to benefit from the
    robust consumer market. Huabao is also actively looking for acquisition targets to build a better
    platform for future growth.




                                                                                                              2
Market Focus                                                                                   Post Conference Notes




MINGYUAN MEDICARE (BUY, TP HK$1.65)

Development plans and strategy of Mingyuan were shared with investors by Henry Chien, CEO of
Mingyuan, at our POA Singapore Conference. Chien reiterated the company’s strategy of becoming the
“Partner of choice” for diagnostic technologies in China, riding on its strong technology and distribution
platform being set up for C-12 bio-chips. Being in alliance with key diagnostic companies in China,
Mingyuan has further strengthened its leadership in the early screening of diseases in China.

    •    Its C-12 is expected to maintain strong growth, on the back of expansion of co-operation with
    China Life. With the successful launch of co-developed cancer care policy in Shanghai, C-12 is
    anticipated to have achieved annual sales volume of 2.3m chips in 2007. Leveraging on the nationwide
    distribution network of China Life, Mingyuan targets to achieve sales of 3.4m C-12 chips in 2008. In
    addition to Shanghai, Mingyuan has intention of entering China Life’s network in Chengdu,
    Guangzhou and Shenyang in 2008.

    •   Strong pipeline of new products are on stream to drive earnings growth in the future. In 2008,the
    new product, HPV test for cervical cancer, is expected to be launched and the company’s focus will be
    steered towards setting up a hospital network by expanding hospital coverage from the existing 50 to
    2008 by year-end. Also on the company’s development plan is the HPV test kit being a key earnings
    driver from 2009 onwards. Moreover, Mingyuan will continue to enlarge its products portfolio;
    identified targets include the development of C-6 chips and tuberculosis detection tests.


NINE DRAGONS (BUY, TP HK$24.5)

Nine Dragons (ND), represented by Waltery Law (CFO) and Benjamin Ng (Deputy GM and Assistant to
Chairman), shared its development plans and strategies with investors. ND has at least five projects in
upstream business on the negotiation table. The key project is the one with a major international player
and is still under negotiation. Management targets to finalize the deal before June 2008.

    •    ND’s formula for success has always been sufficient supply of raw materials plus cost effective
    production. ND will replicate this formula in the development of upstream business. Thus, ND is now
    negotiating with a major international player to form a JV for upstream business with an initial
    production capacity of 1m in pulp. Given that this partner has good resources in forestry, proven track
    record in cloning technology and is one of the lowest cost producers in pulp, support from this partner
    will ensure ND’s success in diversification to the upstream business.

    •   The recent policy on paper and paperboard industry released by the government has shown
    supports to large players. Only small players are causing the environmental issues and must be closed
    down. Large players, on the other hand, are encouraged to further expand. Although a cap on market
    share has been imposed, ND is still well below the limit and has plans to develop more new products
    when market share on a particular product approaches the limit.


ORIENTAL WATCH (BUY, TP HK$7.25)

Allain Lam (Director of Finance) of Oriental Watch gave a review on its 1HFY08 results and shared the
outlook of the company’s operations. Overall, Oriental Watch has continued to stage a healthy performance in
FY08. Its profitability has strengthened further in recent months on upward price adjustments across luxury watches.

    •    In 1HFY08, the company registered strong earnings growth of 61%. But we see upside risks in our
    projection on full-year profit for FY08, owing to the potential enhancement in profit margin amid
    rising retail prices for luxury watches (against lower inventory costs). As the Euro continues to
    strengthen, retail prices of Rolex & Tudor watches have so far been lifted twice, by a total of 8% on
    average since October 2007. Retail prices of other luxury watches have also been adjusted upwards




                                                                                                                       3
Market Focus                                                                              Post Conference Notes



    recently by c.10%. Should Euro and gold prices continue to remain supportive, we see further
    potentials for retail prices of luxury watch to rise. Without signs of negative impact on overall sales
    volume, we believe such development could benefit the company’s earnings performance.

    •   Sales of watches, jewellery and gifts in Hong Kong have accelerated expansion and achieved
    record high growth rates in a decade, growing at 15.2% y-o-y in 2006 and 16.8% in 1H07, to 32.4% in
    3Q07, and 34.9% in October-November 2007. Besides, export sales of Swiss watches to both Hong
    Kong and China have also registered strong growth, up 43% and 70%, respectively for 11M07,
    according to Swiss Watch Federation. Such trend could continue for some time on better consumer
    sentiment in the region and an appreciating Renminbi in China, favouring Oriental Watch’s operations
    in Hong Kong and China.


SINO BIOPHARMACEUTICAL (BUY, TP HK$2.49)

Sino Biopharmaceutical’s (SBP) key development strategy was highlighted to our investors by Stephen Tse
(SBP’s Executive Director) at our POA Singapore Conference. Tse reiterated the promising growth outlook
of SBP, underpinned by its strong competitive advantages in R&D, distribution and rich new drug pipeline
in the prescription drugs market in China. SBP is targeting to achieve at least 30% organic earnings growth
in the coming few years, with further upside potential from M&A activities.

    •   Tse believes SBP is a key beneficiary of the latest industry reform, as the more stringent
    requirements on R&D and sales would propel market polarisation. SBP will take this opportunity to
    expand its market share on the back of its strong R&D capability and leading sales network. With 56
    new drugs to be launched in the next 2-3 years, it will create strong growth momentum for SBP to
    achieve its organic growth target of not less than 30% CAGR in the coming few years.

    •    Sitting on HK$1.8bn cash, the tightening industrial control and monetary policy in China will
    provide more M&A opportunities in the near-term. Last year, it invested c. HK$75m to acquire a stake
    in three small pharmaceutical enterprises, which will provide profit contributions this year. Moreover,
    some other bigger acquisition plans are in the final negotiation stage as well. SBP has submitted the
    application of listing its hepatitis drug division in the A-share market; if successful, this could unlock
    the company’s investment value.


SINOPEC (BUY, TP HK$13.18)

Sinopec’s Investor Relations Chief (HK), Evan Jia, joined our POA Singapore Conference. Jia presented an
overview on the company’s major operating divisions to investors and replied to questions on recent
rumours about the change of some key policies in the oil industry in China.

    •    Jia expects Sinopec to remain on the healthy earnings growth path with key catalysts from strong
    growth in gas output, higher gas price as well as Renminbi appreciation. Although the pricing reform
    of domestic product oil is still a wildcard, Sinopec believes the worst should be over for the refining
    segment. In the short-term, Sinopec is asking for government subsidy to compensate on the loss. While
    in the long-term, Sinopec is still optimistic that the Chinese Government would finally reform its
    pricing cap system for refined oil products.

    •    Regarding rumours on new resources tax, Sinopec stated that it is still under the discussion stage.
    But investors should not solely view implications of this policy, as it should be considered as a part of
    China’s upcoming new energy reform. We might see the Chinese Government changing other
    regulations simultaneously, like fuel tax, pricing control system, along with the change of its resources
    tax. Regarding overseas E&P expansion, Sinopec would probably acquire its parent’s overseas assets if
    they have are at the matured stage.




                                                                                                                 4
Market Focus                                                                               Post Conference Notes



SPG LAND (BUY, TP HK$8.92)

Dr. Tam Lai Ling (Executive Director) indicated that SPG Land should see strong earnings improvement in
2008 and 2009, as new projects (both commercial and residential) would start to make contributions. He
also stated that the company’s landbank rose to 3.3m sm (up sharply from 1.2m sm during IPO in October
2006), which would further expand to 5.2m sm if the Memorandum of Understanding was executed.

    •    The company’s strategy would continue to focus on Yangtze River Delta area, but would extend
    its territory to the southwestern region (like Kunming), which has higher-than-national-average
    growth prospects. In addition, it would develop more world-class hotels in famous tourist spots such as
    Huangshan to benefit from the rising tourism trend in China.


STAR CRUISES LIMITED (BUY, TP HK$4.45)

Blondel So (CFO) and Choo Seng Nam (Senior VP of the Finance, Group Accounting & Treasury)
represented Star Cruises Limited at the Pulse of Asia Singapore Conference. The representatives presented
Star Cruises’ business model to a group of potential investors and also provided them with an update on
recent developments.

Key takeaways are as follows:
    •    Emphasised on the “cleaner” Group structure with the injection of US$1bn cash equity investment
    from private equity firm, Apollo Management, LP into Norwegian Cruise Line (NCL). The entry of
    Apollo will see two significant changes in Star Cruises. First, the US$1bn capital injection is expected to
    give rise to interest savings of US$60m p.a. to NCL (assuming interest cost of 6% p.a.). Secondly, Apollo
    will oversee daily operations of NCL going forward. We have confidence in Apollo (which has defined
    its investment strategy with targeted ROE of 20-25% within an investment horizon of at least 6-7
    years) to achieve superior operating matrix for NCL, given its line-up of experience in the cruise ship
    industry – having acquired Oceania in March 2007 and recent addition of Regent Seven Seas Cruises
    (slated for completion in 1Q08).

    •    Apart from updates on NCL, management also spoke extensively on Star Cruise Asia’s strategy
    going forward. The key message was: “a focus on gaming”. Capitalising on its “mobile” business
    model, the Group has since stopped its loss making Eastern Med and India routes. We understand that
    the Taiwan deployment has so far been very encouraging. The Group is also actively marketing its Asia
    product (i.e. leisure cruising and gaming facilities) to capture potential mainland Chinese clientele.
    Apart from this, Star Cruise Asia is positioning itself for the opening of the Taiwan/PRC cross strait
    cruise.

    •    As for the Macau casino project, we understand good progress is being made and is likely to
    spend US$150m in capital expenditure over the next two years for the project. Commercial operation
    is slated for 2011. We do not rule out another potential land-based casino, should the opportunity
    arise, in Macau.

    •   Key concerns for the stock remain to be high bunker cost (given runaway oil prices) and
    intensifying competition in Asia with the potential entry of Carnival and Royal Caribbean, among
    others.




                                                                                                                  5
Market Focus                                                                              Post Conference Notes



TIANNENG POWER (BUY, TP HK$2.50)

Representatives of Tianneng Power, Zhang Tianren (Chairman), Chen Minru (Deputy Chairman) and Yang
Yuanling (Secretary of Board), highlighted robust growth of the electric bike (e-bike) space as the core
engine driving its growth over the next 2-3 years, buoying it as the leading motive battery manufacturer in
China.
Essentially, investors should be attracted by Tianneng’s possession of 1) a leading market share and top
brand recognition across China; 2) extensive application of motive batteries in business diversification; 3)
strong R&D and technical know-how; and 4) a seasoned top management team, each with an average of
20 years of industrial experience.

    •    Riding on the booming accumulative e-bike population of over 100m units in 2010, Tianneng is
    set to continue such phenomenon as a lead-acid motive battery leader and price-maker with premium
    branding tagging along a good reputation of reliability and quality distinction, leading technical
    know-how and strong R&D capabilities. While enjoying an expanding total market share (combination
    of both primary and secondary markets) of about 12.44% in FY05, 17% in FY06, 20% in FY07 and
    confidently heading towards 30% by end-FY09 in a highly fragmented environment, the brand
    Tianneng is already well associated nationally. More importantly, increasing popularity of e-bikes
    across China (on the back of more affirmative and encouraging government policies) has continued to
    significantly enhance the leadership dominance and overall progress of Tianneng, from a macro
    perspective.

    •   Key development of new projects will concentrate on:
        1) Developing new energy projects using solar power and wind power (provision of energy
            storage products for proposed new urban lighting systems);
        2) Further developing Lithium-ion battery products (new motive energy batteries for electric-
            powered transport);
        3) Battery products for electric cars (more intensive R&D into batteries for electric cars, especially
            when Zhang had signed a letter of intent in FY07 with a Norwegian electric car maker to
            supply batteries).

    •  Longer-term growth driver in establishing strong foothold in a highly potential mega foreign
    market such as India (besides Vietnam and Indonesia) will be a step closer for Tianneng’s vision and
    towards its goal in becoming the top player in the motive battery space globally.


WALKER GROUP (BUY, TP HK$5.65)

Eamon Chu, CFO of Walker Group indicated that the company’s future plans will focus on three areas:

    •    Expansion of sales network. Walker plans to boost same-store sales growth (via renovating
    existing stores with new concepts), open more specialty sales points and multi-brand stores in Hong
    Kong and China.

    •    Improvement of marketing and promotion. Celebrities would be appointed as spokespersons for
    different brands, and VIP schemes would be introduced to build customer loyalty.

    •    Development of product lines. It would step up the development of licensed brands with the
    opening of 40 specialty sales points for Acupuncture in Hong Kong/China by 1Q09. It will also
    strengthen Acupuncture brand in Japan through business partner’s distribution network. A new sports
    series will be launched under OX-X-OX in 2008 before commencement of the Olympics.




                                                                                                                 6
Market Focus                                                                              Post Conference Notes



WIN HANVERKY (BUY, TP HK$3.60)

Wilson Cheung, CFO of Win Hanverky elaborated the company’s growth strategies for 2008 to sustain
business growth, which included:

    •   Sportswear manufacturing division – expanding capacity by 25% y-o-y, while he aimed at
    obtaining more orders (for domestic sales and new brands) to enhance utilisation.
    •   Distribution of Umbro products – increasing investment in brand promotion activities, product
    design and development, enhancing pricing of Umbro products, and in-house manufacturing of
    Umbro products to ensure quality and time-to-market.

    •   Sportswear retail - setting up football concept shops in major cities in China.

    •   Active & outer wear – actively looking for new customers to fill the slack season.


SGX CHINA LISTED
CHINA AUTO ELECTRONICS (BUY, TP S$0.875)

Mr. Rudy Schlais, CEO, and Mr. David Ng, CFO, shared their views on China Auto Electronics’ prospects with
investors. China Auto Electronics designs, assembles, and manufactures wire harnesses, connectors, moulds,
crimping machines, and electronic modules for the automobile industry. It is the largest Chinese provider
of wire harness to automobile manufacturers in China, with about 10% market share if foreign
competitors’ market shares are taken into account.

    •   Management argues for higher car penetration ratio in China, which is far below global average
    and the industrialized nations. This will continue to present a big and growing market for China Auto
    Electronics to build its automobile component business in the years ahead. In particular, the
    management will actively use its core wire harness business to open the door for the introduction of
    complex and customized electrical and electronic modules and system to customers’ new car models.

    •    Future price catalysts may come in the form of China Auto Electronics’ merger and acquisition
    activities to expand product offerings, distribution network in China and overseas, and accessibility to
    new customers in China, the USA and Europe. Management guides that the group is likely to see some
    merger and acquisition activities in 2008.

    •    In a note issued on 14 January, we revised our earnings estimates down to RMB90.6m (from
    RMB117.2m) in FY07 and RMb195.6m (from RMB259.9m) in FY08, to take into account lower than
    expected utilization rates at China Auto’s factories. The reduced numbers still reflect a strong 196% y-
    o-y recurring net profit growth in FY07 and 116% growth in FY08.


CHINA LIFESTYLE F & B (BUY, TP: S$0.69)

China Lifestyle F&B was no stranger to most investors at our conference. At the group presentation, it
drew strong interest from existing and potential investors keen to learn more about the industry’s
prospects and plans going forward. Management is optimistic of its prospects in 2008 arising from capacity
expansion and new product launches. They highlighted that, based on consensus estimates, CLF’s
prospective PER is only about 8 – 9x. Noteworthy points are as follows:

    •   New Capacity coming onstream from its Wuqing plant in Tianjin. Positive factors from this are
    that: (i) it will ease the capacity constraints for jelly desserts faced in 2007; and (ii) aid in bringing
    down effective tax rate for Group due to tax exemption from the new plant. In addition, production
    capacity for its “Yiduguoba” jelly desserts series is expected to increase by 150% from current 4,000
    mts to 10,000 mts per annum by 2H08. This additional capacity will be at its Fujian plant.




                                                                                                                 7
Market Focus                                                                             Post Conference Notes



    •    Establishing distribution channel. Management shared that their revenue split by distribution
    channels is 60:40 from supermarkets/hypermarkets and convenience/mom-and-pop stores, respectively.
    The distribution agreement with RT-Mart is progressing according to expectations. While its products
    are still not available in all of RT-Marts outlets, it will continue to work on this front.

    •    JVs product hitting shelves in early 2008. Management updated that progress on its new product
    range from JVs – potato chips with Super Coffeemix and gummy candies with Cocoaland – will be
    hitting the supermarket shelves in early 2008. Responses from distributors are encouraging.


CHINA SPORTS INT’L (BUY, TP S$2.66)

China Sports Int’l was represented by Mr. Alex Chan (CFO) and Mr. Parry Ng (VP, Investor Relations).

    •    A growing player in sports fashion footwear and apparel in China, focused on mass market. CSI is
    an emerging sports fashion player in the PRC that is focused on growing its own YELI brand of
    products, targeting the mass-market segment in China, with a retail price point of c. RMB200 per pair
    of shoes, compared to more established brands that are selling at between RMB250-500 a pair.

    •    Growing its distribution network. China Sports is on target to grow its distribution network by a
    third to 2,000 points-of-sales by end 2007 and aims to increase it by another 40% in 2008 to 2,800
    outlets. Whilst some of this expansion may be in tier-2 cities, the Group intends to maintain its focus
    on the mass-market, tier 3 and 4 cities, which are less competitive.

    •    More spending on advertising and promotion. Management highlighted that the Group intends
    to invest more in A&P, having spend just 4%-5% of revenue on such activities in 2007, compared to
    16%-18% for more established brands in the PRC. Guidance for spending on A&P over the next 2 years
    is for ‘high single digit’. This includes spending on media advertising, especially T.V., as well as
    sponsorships.


FERROCHINA (BUY, TP: S$3.38)

Mr Nelson Fong (Executive Director) and Mr. Soh Wai Kong (CFO) represented FerroChina.

    •   FerroChina is able to pass on rising material costs to customers. Management reiterated that as a
    value-add processor of a niche product (coated steel) that is in short supply in the PRC, FerroChina has
    been able to pass on rising steel and material costs to customers, thus margins should be preserved
    even as HRC input materials such as coal and iron ore experience an increase in pricing. Furthermore,
    the over-supply situation of HRC in China also alleviates pricing pressure for FerroChina’s main raw
    material.

    •   Full year consolidation of SuperbTeam’s numbers in 2008 with earnings crossing RMB1bn.
    FerroChina should be able to consolidate 2 months of SuperbTeam’s numbers in its 4Q07 results, and
    more importantly, a full year’s contribution from 2008 onwards. As a result, we project the Group’s
    earnings to cross RMB1.1bn in 2008 from just an estimated RMB426m in 2007.

    •   Expansion plans to continue. FerroChina has ambitions to become a global player, and with the
    complete acquisition of SuperbTeam, should have some 3.5m MT in coated steel capacity in 2008.
    Coupled with recent acquisitions in Dongguan, and a greenfield project in Vietnam (including
    upstream capabilities) as well as plans for more acquisitions within China, FerroChina has a well-laid
    out plan to reach its goal over the long-term.




                                                                                                               8
Market Focus                                                                              Post Conference Notes



HONG LEONG ASIA (BUY, TP: S$4.30)

Hong Leong Asia was represented by Mr Philip Ting (CFO) as well as Ms Jaslin Lau (Finance Manager).

    •   Outlook for China businesses Yuchai and Xinfei remains robust. Management shared with us that
    both Yuchai and Xinfei continue to enjoy robust volume gains in recent months, and for Yuchai,
    towards the higher margin medium and heavy duty engines in particular. Xinfei should continue to
    ride on strong consumption growth in China, especially in the year of the Olympics whilst for Yuchai,
    continued economic growth is expected to spur demand for more diesel engines.

    •    Building Materials Group riding on Singapore’s booming construction sector. Management once
    again reiterated their confidence that as the largest integrated building materials supplier, the Group
    is in a strong position to benefit from expected strong ongoing demand for building materials. This is
    expected to be driven by a slew of construction projects in Singapore, which includes the two
    Integrated Resorts projects, the new Business Financial Center as well as many residential
    developments (both private and government). As such, HLA expects that volume demand should
    remain robust as prices continue to firm upwards.

    •   GPAC: Still one for the future. Management also spent some time discussing GPAC, sharing with
    investors the performance and outlook for this environmentally friendly pallet business. Whilst
    management continues to be upbeat about its prospects, the take-up rate has been slow due to a)
    more relaxed enforcement of ISPM15 standards as well as b) locked-in supply contracts for wooden
    pallets. However, the situation should improve as demand and production move towards the
    breakeven 100,000 pallets a month mark as GPAC’s products gain more acceptance.


MIDAS HOLDINGS (BUY; TP: S$1.84)
Midas was represented by Mr. Patrick Chew (CEO) and Mr. Tan Kai Teck (CFO) at the conference.

    •    Core aluminium extrusion business on steady growth path. The Group’s core aluminium extrusion
    profile business has a current order book of c. S$130m to be delivered over the next 2 years. Midas
    continues to bid for upcoming train projects in China and is also currently evaluating the possibility of
    a third extrusion line as current capacity utilization is already hitting about 75%.

    •    Nanjing Puzhen should experience exponential growth the next few years. Meanwhile, 32.5%
    owned Nanjing Puzhen has an outstanding order book of c. RMB3.5bn, the bulk of which are to be
    delivered over FY09-FY11. Management also updated that Nanjing Puzhen is aiming for 5 or 6 more
    projects as PRC cities continue to build new or expand their metro systems, which we believe could
    double its current order book. This growth is also underpinned by a substantial increase in capacity to
    over 300 train cars in 2008 and 500 in 2009.

    •    Framework agreement with Chinalco could provide more growth opportunities. In terms of the
    first potential collaboration with Chinalco in respect of China Northeast Light Alloy (NELA)'s 'thick
    alunimium alloy plates and sheets project', management is working hard to finalise the structure and
    deal, which should provide further growth impetus for Midas beyond 2009.




                                                                                                                9
Market Focus                                                                              Post Conference Notes



SIHUAN PHARMACEUTICAL HOLDINGS (NOT RATED)

Deputy Chairman Guo Weicheng and CFO Choi Yiau Chong represented Sihuan at the Pulse of Asia
Singapore 2008 conference. Management presented this newly-listed company (listed in March ’07) to
potential investors, highlighting its core business focus on cardiocerebral vascular (CV) drugs, an update on
recent developments and company’s future plans. Key takeaways are as follows:

    •    Kelinao, its star product: Contributed more than 50% of its revenues since FY04 and is expected to
    continue its strong growth moving forward. Management answered queries on Kelinao’s
    administrative protection expiring in April’08 and reaffirmed that they are confident that competitors
    will find it tough breaking down the high barriers built by Kelinao, such as (i) its improved quality and
    purity of Kelinao, (ii) 20 year patent for the production process of its raw material, (iii) doctor’s
    familiarity and confidence in the product through Sihuan’s frequent marketing seminars and
    conferences, and (iv) its wide market acceptance due to its curative effectiveness with no side effects.
    Even if a competitor drug emerges, management views that the earliest it will pose a serious threat to
    Kelinao’s sales will be in 4 years (time taken for SFDA approval, clinical trials and effective marketing
    of the drug). In addition, management intends to extend its life-cycle through producing new
    formulations and constantly improve the quality and purity of the present drug.

    •   Expansion through acquisition. Sihuan has a war chest of RMB 285m, and is on a constant lookout
    to acquire R&D companies and product rights with good potential.

    •    Chinese Pharmaceutical Industry moving forward. Management gave an insight on the industry
    prospects, highlighting that outlook for this sector is stable and positive post prior year’s government
    price cuts and medical reforms. SFDA has also resumed its drug approval process that is a boost to
    Sihuan as it has an R&D pipeline of more than 70 drugs, expected to be launched over FY08 – FY2013.


SP CHEMICAL (HOLD, TP: S$1.29)

Wira Tjendana, CFO and Lee Wei Lin, Group Finance and Corporate Affairs Manager, highlighted the next
leap for SP Chemicals (“SINPU”) at the Pulse of Asia Singapore conference. Key takeaways from the
meetings are:

    •    On track PP5 expansion. The PP5 capacity expansion, which has commenced construction in 1Q07,
    is on track for trial production by 1Q08. Upon completion, SINPU’s annual capacities for caustic soda,
    chlorine and aniline will be increased by 50% to 450k tpa, 396k tpa and 135k tpa respectively. SINPU is
    confident that its expanded capacity would be fully absorbed by the market. This organic expansion
    would be the key growth driver for SINPU in 2008.

    •   Rolling out new product, styrene monomer, by 1Q2010. Management reiterated that the
    production facilities of 320,000 tpa styrene monomer is expected to commence construction by
    3Q2008 and trial production by 1Q2010. Styrene monomer, which uses ethylene and benzene as
    feedstock, is an intermediate raw chemical used in making polystyrene plastics, protective coatings,
    polyesters and resins. With its usage in a wide range of consumer and industrial applications, the
    supply is likely to remain tight over the next few years in view of the growing downstream demand in
    China.

    •   Cost-competitiveness is the key differentiator. While they acknowledge the less favorable market
    conditions especially the rising oil prices environment, management reassured investors that SINPU
    would continue to enhance its cost efficiency via economies of scale. Cost advantage is the key that
    enables the Group to be more resilient, especially during a chemical down-cycle.

    •   Key catalysts underpinning SINPU’s earnings performance are the more favorable macro
    environment, dip in oil prices and successful execution of its expansion plan.




                                                                                                                10
Market Focus                                                                             Post Conference Notes




YANLORD LAND GROUP (BUY, TP S$4.27)

Ms Michelle Sze (Assistant to CEO, Head of Investor Relations), Mr Edwin Hsu (Senior Manager, IR) and Mr
John Wong (Senior Manager, IR) represented Yanlord at the conference. Yanlord is a developer of high-
end real estate in China, with a presence across eight major PRC cities. The key takeaways are as follows:

    •    To discourage speculators in the market, there have been restrictions imposed on foreign
    investment with regards to particular site acquisitions. Foreign entities subjected to such restrictions
    would have to demonstrate that they have local experience in property development in the PRC, as
    well as the number and quality of their developments. However, Yanlord is treated as a local company
    in China and also operates through locally incorporated subsidiaries. As such, Yanlord is not affected
    by such policies. Also, because their developments are spread across 8 PRC cities, this minimizes policy
    risks at local state level.

    •   Some investors observed other PRC property developers cutting prices on their developments.
    However, these developers are more likely to be mass-market property developers. Yanlord has
    traditionally experienced very strong pricing power on their developments due to their established
    premium brand name, and are renowned for their well-built and maintained high-end residential
    developments. In fact, ASP grew 17% in 9M07 over that experienced in 2006, with one development
    in particular, Yanlord Riverside City Phase 2, experiencing robust ASP growth of 42% within a time
    span of less than a year.

    •   Investors were also concerned about the rising construction costs across the board. However, it
    was stressed that even if an additional RMB500 psm in construction costs was factored in, this will
    have a marginal effect on margins, with land premium still accounting for a significant portion of
    total costs.




                                                                                                               11
Market Focus                                                                                            Post Conference Notes



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.


GENERAL DISCLOSURE/DISCLAIMER
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"). [This report is intended for clients of DBSV Group only and no part of this document may be (i) copied,
photocopied or duplicated in any form by any means or (ii) redistributed without the prior written consent of DBSVR.]

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. 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. 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.
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.

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 15 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 11 Jan 2008.
   2.        DBS Bank Ltd has been appointed as the designated market maker of structured warrant(s) for Cosco
             Corporation issued by DBS Bank Ltd.
   3.        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
             Hong Leong Asia as of 15 Jan 2008.
   4.        Compensation for investment banking services:
                   DBSVR, DBSVS, DBS Bank Ltd and/or other affiliates of DBSVUSA may have received compensation,




                                                                                                                                      12
Market Focus                                                                                          Post Conference Notes



                   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.

                   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 received compensation and/or may within the
                   next 3 months seek to obtain compensation for investment banking services from Walker Group (1386
                   HK). DBSVS, DBS Bank Ltd and/or its affiliates have managed or co-managed a public offering of Walker
                   Group’s (1386 HK) securities within the last 12 months.
                    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.
 5.          DBSVR receives compensation from the SGX-MAS Research Incentive Scheme for coverage of SP Chemicals
             participating in the scheme. Coverage of this stock has been assigned to DBSVR by the Scheme administrator.

 RESTRICTIONS ON DISTRIBUTION
 General          This report is not directed to, or intended for distribution to or use by, any person or entity who is a
                  citizen or resident of or located in any locality, state, country or other jurisdiction where such
                  distribution, publication, availability or use would be contrary to law or regulation.

 Australia            This report is being distributed in Australia by DBSVR and DBSVS, which are exempted from the
                      requirement to hold an Australian financial services licence under the Corporation Act 2001 [“CA] in
                      respect of financial services provided to the recipients. DBSVR and DBSVS are regulated by the
                      Monetary Authority of Singapore [“MAS”] under the laws of Singapore, which differ from Australian
                      laws. Distribution of this report is intended only for “wholesale investors” within the meaning of the
                      CA.

 Hong Kong            This report is being distributed in Hong Kong by DBS Vickers (Hong Kong) Limited which is licensed
                      and regulated by the Hong Kong Securities and Futures Commission.

 Singapore            This report is being distributed in Singapore by DBSVR, which holds a Financial Adviser’s licence and is
                      regulated by the MAS. This report may additionally be distributed in Singapore by DBSVS (Company
                      Regn. No. 198600294G), which is an Exempt Financial Adviser as defined under the Financial Advisers
                      Act. Any research report published by any foreign DBS Vickers entities is distributed in Singapore
                      only to “institutional investors” as defined under the Securities and Futures Act. Distribution of
                      research reports published by a foreign-related corporation of DBSVR/DBSVS to “Accredited
                      Investors” as defined under the Financial Advisers Regulations is provided pursuant to the approval
                      by MAS of research distribution arrangements under Paragraph 11 of the First Schedule to the FAA.

 United               This report is being distributed in the UK by DBS Vickers Securities (UK) Ltd, who is an authorised
 Kingdom              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.

 United   Arab        This report is being distributed in United Arab Emirates by DBS Bank Ltd, Dubai (PO Box 506538, 3rd
 Emirates             Floor, Building 3, Gate Precinct, DIFC, Dubai, United Arab Emirates) and is intended only for
                      wholesale clients. DBS Bank Ltd, Dubai is regulated by the Dubai Financial Services Authority.

 United States        Neither this report nor any copy hereof may be taken or distributed into the United States or to any
                      U.S. person except in compliance with any applicable U.S. laws and regulations.

 Other                In any other jurisdictions, except if otherwise restricted by laws or regulations, this report is intended
 jurisdictions        only for professional, institutional or sophisticated investors as defined in the laws and regulations of
                      such jurisdictions.

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




                                                                                                                                   13
 Singapore

 Company Focus
 DBS Group Research . Equity                                                                                                                                    15 Jan 2008

 SELL S$0.30 FSSTI : 3,218.14
 (Downgrade from HOLD)                                                                              SGX MAS Research Incentive scheme
                                                                                                    Ellipsiz Ltd
 Price Target : 12-Month S$ 0.20 (Prev S$ 0.58)
 Reason for Report : Company update
 Potential Catalyst: Stronger than expected rebound in
 semicon demand.                                                                                    More downside expected
 ANALYST
 Ai Teng Tan +65 6398 7967
                                                                                                        Story: Ellipsiz warned that its upcoming 1HFY08 results would
 AiTeng@dbsvickers.com                                                                              be significantly lower compared to 1HFY07 although the company
                                                                                                    expects to remain profitable for now.
                                                                                                        Point: Apparently, the sluggish demand in 1HFY07 failed to
 FORECASTS AND VALUATION                                                                            rebound in 1HFY08 despite Jun-Dec months being a seasonally
 FY Jun (S$ m)       2006A                                  2007A          2008F           2009F    stronger period. To worsen matters, Ellipsiz faced strong margin
 Turnover             186.0                                  200.6         172.9           190.2
 EBITDA                35.9                                   25.1          18.4            19.5
                                                                                                    erosion as customers pressured suppliers to cut pricings. At this
 Pre-tax Profit        40.9                                   14.1            6.1            6.7    juncture, the outlook of the industry remains elusive given very
 Net Profit            26.1                                   15.0            4.8            5.3    low customer visibility and uncertain order indications.
 Net Pft (Pre Ex.)     13.1                                   15.0            4.8            5.3
 EPS (S cts)           10.3                                    5.9            1.9            2.1        Relevance: We have slashed FY08 and FY09 earnings by 63%
 EPS Pre Ex. (S cts)    5.2                                    5.9            1.9            2.1    and 67% respectively. Consequently, our target price based on
 EPS Gth Pre Ex (%)      16                                     14           (68)             11    sum-of-the-parts valuations is reduced to S$0.20 or 10.6x FY08
 Diluted EPS (S cts)   10.3                                    5.9            1.9            2.1
 Net DPS (S cts)        1.0                                    0.6            0.2            0.2
                                                                                                    earnings. Admittedly, our earnings forecasts could err on the
 BVPer Share (S cts)   44.1                                   48.4          49.7            51.6    conservative side but we prefer to upgrade estimates as visibility
 PE (X)                 2.9                                    5.1          15.8            14.3    improves over the quarters. For now, price downside is possible
 PE Pre Ex. (X)         5.8                                    5.1          15.8            14.3    given earning risks and market volatility. Downgrade to Sell.
 P/Cash Flow (X)        2.3                                    2.9            4.6            4.3
 EV/EBITDA (X)          1.3                                    2.3            2.2            2.1
 Net Div Yield (%)      3.3                                    2.0            0.6            0.7
 P/Book Value (X)       0.7                                    0.6            0.6            0.6
                                                                                                    Void of seasonal bounce as semicon weakness continues…Contrary to the
 Net Debt/Equity (X)  CASH                                   CASH          CASH            CASH     historical trend of a stronger first half fiscal year for Ellipsiz, our update
 ROAE (%)              26.9                                   12.8            3.9            4.2    with management suggests that orderflow in the past six months has been
                                                                                                    flattish despite this being a seasonally stronger period. The weaker than
 SHARE PRICE CHART                                                                                  expected demand was broad-based and due to continued semicon
     1   .0   0
                S$                                                                                  weakness and intensifying pricing pressure as customers push for more
     0
     0
         .9
         .8
              0
              0
                                                                                                    aggressive price cuts.
                                                                                                    Margin squeeze poses a bigger dent on bottomline. We expect gross
     0   .7   0
     0   .6   0
     0
     0
         .5
         .4
              0
              0
                                                                                                    margins for distribution and wafer reclaim businesses to contract further
     0
     0
         .3
         .2
              0
              0
                                                                                                    HoH from the 23.3% recorded in 2HFY07 even though revenue appears to
     0   .1   0                                                                                     have held steady. We believe Wafer Probe could be the only bright spot
     0   .0   0
              Ja n -0 7      M a r-0 7        Ju n -0 7   A u g -0 7     O c t-0 7      Ja n -0 8   with slightly improved margins, thanks to production transfer from the US
                          E llip s iz L t d                      1 0 0 -D a y M A
                                                                                                    and France to Vietnam. Consequently, we have cut our gross margin
                                                                                                    assumption to 22.6% from 29% previously.
 AT A GLANCE
 Issued Capital (m shrs)                                                                    256     Outlook remains murky. For now, management finds it difficult to assess
 Mkt. Cap (S$m/US$m)                                                                 76.7 / 53.7    the demand situation as customers’ visibility and order indications are
 Major Shareholders                                                                                 reportedly choppy amid recession fears. Although Ellipsiz is developing
    Chong Fook Choy (%)                                                                     11.3    new products such as advanced probe cards, which offer superior cost to
    Aegis Portfolio (%)                                                                     10.1    performance benefits and shorter leadtime than the competition, market
    Atlantis Investment (%)                                                                  5.0
                                                                                                    reception of new launches may still be unenthusiastic.
 Free Float (%)                                                                             73.6
 Avg. Daily Vol.(‘000)                                                                       348

 Earnings Rev (%):                             2008: (62.8)             2009: (66.6)
 Consensus EPS (S cts):                        2008: 3.8                2009: 5.5
 Variance vs Cons (%):                         2008: (50.1)             2009: (61.7)
 Sector : Technology
 Bloomberg/Reuters Code: ELL SP/ELPZ.SI
 Principal Business: A leading provider of integrated
 solutions to the semiconductor and electronics related
 industry.

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



Income Statement (S$ m)                                                    Balance Sheet (S$ m)
FY Jun                       2006A      2007A         2008F      2009F     FY Jun                      2006A   2007A    2008F   2009F
Turnover                       186.0      200.6        172.9      190.2    Net Fixed Assets             34.6    36.2     40.5    44.4
Cost of Goods Sold           (129.4)    (143.8)      (134.1)    (147.5)    Invts in Assocs & JVs         1.4     4.4      4.2     4.0
Gross Profit                    56.7       56.9         38.8       42.7    Other LT Assets              41.2    37.5     37.5    37.5
Other Opg (Exp)/Inc           (27.7)     (42.7)       (31.8)     (35.1)    Cash & ST Invts              46.4    27.8     46.2    47.0
Operating Profit                29.0       14.2           7.0        7.6   Other Current Assets         78.6    65.9     70.6    77.3
Other Non Opg (Exp)/Inc           0.0        0.0          0.0        0.0   Total Assets                202.3   171.8    198.9   210.1
Associates & JV Inc             (0.1)      (0.2)        (0.2)      (0.2)
Net Interest (Exp)/Inc          (0.8)        0.1        (0.7)      (0.7)   ST Debt                      14.1     5.7      5.7     5.7
Exceptional Gain/(Loss)         13.0         0.0          0.0        0.0   Other Current Liab           68.9    35.9     59.3    65.0
Pre-tax Profit                  40.9       14.1           6.1        6.7   LT Debt                       1.0     2.7      2.7     2.7
Tax                             (4.2)        1.5        (0.7)      (0.8)   Other LT Liabilities          5.6     2.7      2.7     2.7
Minority Interest             (10.6)       (0.5)        (0.5)      (0.5)   Shareholder’s Equity        111.8   122.9    126.2   131.0
Preference Dividend               0.0        0.0          0.0        0.0   Minority Interests            0.8     1.8      2.3     2.8
Net Profit                      26.1       15.0           4.8        5.3   Total Cap. & Liab.          202.3   171.8    198.9   210.1
Net profit before Except.       13.1       15.0           4.8        5.3
EBITDA                          35.9       25.1         18.4       19.5
                                                                           Non-Cash Wkg. Cap             9.7    30.0     11.3    12.3
Sales Gth (%)                   57.3        7.8       (13.8)       10.0    Net Cash/(Debt)              31.2    19.4     37.7    38.5
EBITDA Gth (%)                  61.4     (29.9)       (26.7)        6.0
Operating Profit Gth (%)        71.9     (51.0)       (50.9)        8.6
Effective Tax Rate (%)          10.4       N/A          12.0       12.0
Cash Flow Statement (S$ m)                                                 Rates & Ratios
FY Jun                       2006A      2007A         2008F      2009F     FY Jun                      2006A   2007A    2008F   2009F
Pre-Tax Profit                   40.9      14.1          6.1        6.7    Gross Margin (%)             30.5    28.3     22.5    22.5
Dep. & Amort.                     7.1      11.2         11.7       12.2    Operating Margin (%)         15.6     7.1      4.0     4.0
Tax Paid                        (2.9)     (5.9)        (2.5)      (0.7)    Net Profit Margin (%)        14.0     7.5      2.8     2.8
Assoc. & JV Inc/(loss)            0.1       0.2          0.2        0.2    ROAE (%)                     26.9    12.8      3.9     4.2
Non-Cash Wkg.Cap.                 6.0     (1.2)         20.4      (1.0)    ROA (%)                      15.6     8.0      2.6     2.6
Other Operating CF             (17.5)       2.2          0.0        0.0    ROCE (%)                     24.8    12.0      4.8     5.1
Net Operating CF                 33.7      20.6         35.9       17.3    Div Payout Ratio (%)          9.5    10.2     10.2    10.2
Capital Exp.(net)               (8.0)    (11.0)       (16.0)     (16.0)    Interest Cover (x)           34.6     NM      10.4    11.3
Other Invts.(net)                22.8       5.6          0.0        0.0    Asset Turnover (x)            1.1     1.1      0.9     0.9
Invts in Assoc. & JV              0.0       0.0          0.0        0.0    Debtors Turn (avg days)      79.0    82.1     91.6    92.9
Div from Assoc & JV               0.0       0.0          0.0        0.0    Creditors Turn (avg days)    89.5    96.6    104.7   127.7
Other Investing CF             (36.2)    (21.4)          0.0        0.0    Inventory Turn (avg days)    44.4    55.5     57.4    53.8
Net Investing CF               (21.4)    (26.9)       (16.0)     (16.0)    Current Ratio (x)             1.5     2.2      1.8     1.8
Div Paid                        (2.0)     (2.5)        (1.5)      (0.5)    Quick Ratio (x)               1.2     1.7      1.5     1.4
Chg in Gross Debt                21.2       6.3          0.0        0.0    Net Debt/Equity (X)         CASH    CASH     CASH    CASH
Capital Issues                    0.1       0.5          0.0        0.0    Capex to Debt (%)            52.5   130.3    189.2   189.2
Other Financing CF             (15.0)    (16.6)          0.0        0.0    N.Cash/(Debt)PS (S cts)      12.3     7.6     14.9    15.2
Net Financing CF                  4.3    (12.2)        (1.5)      (0.5)    Opg CFPS (S cts)             10.9     8.6      6.1     7.2
Net Cashflow                     16.6    (18.6)         18.3        0.8    Free CFPS (S cts)            10.2     3.8      7.8     0.5
PE Chart (x)
20.0

18.0

16.0

14.0

12.0

10.0

 8.0

 6.0

 4.0
   2004           2005         2006           2007


Source: Company, DBS Vickers


                                                                                                                                  2 of 4
Company Focus                                                                                                           Ellipsiz Ltd


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.

GENERAL DISCLOSURE/DISCLAIMER
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"). [This report is intended for clients of DBSV Group only and no part of this document may be (i) copied,
photocopied or duplicated in any form by any means or (ii) redistributed without the prior written consent of DBSVR.]

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. 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. 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.
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.

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 15 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 11-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
             Ellipsiz Ltd as of 15 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
                   investment banking services from Ellipsiz Ltd.
                   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.

   4.        DBSVR receives compensation from the SGX-MAS Research Incentive Scheme for coverage of Ellipsiz Ltd
             participating in the scheme. Coverage of this stock has been assigned to DBSVR by the Scheme administrator.


                                                                                                                                      3 of 4
Company Focus                                                                                                       Ellipsiz Ltd


 RESTRICTIONS ON DISTRIBUTION
 General          This report is not directed to, or intended for distribution to or use by, any person or entity who is a
                  citizen or resident of or located in any locality, state, country or other jurisdiction where such
                  distribution, publication, availability or use would be contrary to law or regulation.

 Australia          This report is being distributed in Australia by DBSVR and DBSVS, which are exempted from the
                    requirement to hold an Australian financial services licence under the Corporation Act 2001 [“CA] in
                    respect of financial services provided to the recipients. DBSVR and DBSVS are regulated by the
                    Monetary Authority of Singapore [“MAS”] under the laws of Singapore, which differ from Australian
                    laws. Distribution of this report is intended only for “wholesale investors” within the meaning of the
                    CA.

 Hong Kong          This report is being distributed in Hong Kong by DBS Vickers (Hong Kong) Limited which is licensed
                    and regulated by the Hong Kong Securities and Futures Commission.

 Singapore          This report is being distributed in Singapore by DBSVR, which holds a Financial Adviser’s licence and is
                    regulated by the MAS. This report may additionally be distributed in Singapore by DBSVS (Company
                    Regn. No. 198600294G), which is an Exempt Financial Adviser as defined under the Financial Advisers
                    Act. Any research report published by any foreign DBS Vickers entities is distributed in Singapore
                    only to “institutional investors” as defined under the Securities and Futures Act. Distribution of
                    research reports published by a foreign-related corporation of DBSVR/DBSVS to “Accredited
                    Investors” as defined under the Financial Advisers Regulations is provided pursuant to the approval
                    by MAS of research distribution arrangements under Paragraph 11 of the First Schedule to the FAA.

 United             This report is being distributed in the UK by DBS Vickers Securities (UK) Ltd, who is an authorised
 Kingdom            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.

 United   Arab      This report is being distributed in United Arab Emirates by DBS Bank Ltd, Dubai (PO Box 506538, 3rd
 Emirates           Floor, Building 3, Gate Precinct, DIFC, Dubai, United Arab Emirates) and is intended only for
                    wholesale clients. DBS Bank Ltd, Dubai is regulated by the Dubai Financial Services Authority.

 United States      Neither this report nor any copy hereof may be taken or distributed into the United States or to any
                    U.S. person except in compliance with any applicable U.S. laws and regulations.

 Other              In any other jurisdictions, except if otherwise restricted by laws or regulations, this report is intended
 jurisdictions      only for professional, institutional or sophisticated investors as defined in the laws and regulations of
                    such jurisdictions.

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




                                                                                                                                 4 of 4
 Singapore

 Company Focus
 DBS Group Research . Equity                                                                                                                                15 Jan 2008

 Buy S$0.27 FSSTI : 3,218.14                                                                       Jiutian
 Price Target: 12-Month S$ 0.42 (Prev S$ 0.76)
                                                                                                   Earnings visibility has reduced
 Reason for Report: Company update                                                                     Story: Together with the announcement of a further 24.5% stake
 Potential Catalyst: M&A activities                                                                acquisition in a new methanol plant to enhance integration, Jiutian
                                                                                                   also provides an operation update, indicating a weak 4Q07 owing to
 ANALYST
 Pei Hwa Ho +65 6398 7968                                                                          high methanol cost and slower ramp-up of its new DMF plant.
 PeiHwa@dbsvickers.com                                                                             Besides, our industry observation also suggests weak DMF prices since
                                                                                                   late 2007, which rings warning bells on our DMF price assumption.
 FORECASTS AND VALUATION                                                                               Point: We have adjusted our earnings estimates down by 40%,
 FY Dec (RMB m)       2006A                                      2007F       2008F        2009F    48%, and 23% for 2007, 2008 and 2009, respectively. This is to
 Turnover              236.8                                     297.5       889.8       1,203.9
 EBITDA                 79.5                                      84.0       216.8         422.3
                                                                                                   account for potential DMF price weakness, and slower than
 Pre-tax Profit         67.3                                      72.0       168.6         353.2   expected capacity ramp up at its new plant in 4Q 2007. Our 52%
 Net Profit             67.6                                      61.2       159.1         302.1   EPS CAGR estimate in FY07-09 is now based on more conservative
 Net Pft (Pre Ex.)      67.6                                      61.2       159.1         302.1   DMF-methanol price spread assumption of RMB2800 per tonne,
 EPS (S cts)             1.2                                        0.9         2.3          4.3
                                                                                                   which is at the lower end in the past two years.
 EPS Pre Ex. (S cts)     1.2                                        0.9         2.3          4.3
 EPS Gth Pre Ex (%)       33                                       (29)        160            90         Relevance: Our TP is down to S$0.42, with reduced earnings
 Diluted EPS (S cts)     1.2                                        0.7        1.9           3.6
                                                                                                   estimates, and using a lower valuation metric of 12x FY08/09 earnings
 Net DPS (S cts)         0.2                                        0.2        0.5           0.9
 BV Per Share (S cts)    4.8                                        8.5       10.6          14.5   (vs. 15x previously) to reflect a more challenging operating outlook.
 PE (X)                 21.8                                      30.9        11.9           6.3   Still, we believe that the potential earnings risk over volatile DMF
 PE Pre Ex. (X)         21.8                                      30.9        11.9           6.3   prices have already been factored into our new earnings estimates,
 P/Cash Flow (X)        19.2                                      26.3          9.6          5.3   and we are maintaining BUY call on the counter. Future earnings
 EV/EBITDA (X)          17.2                                      22.9         9.7           4.3
 Net Div Yield (%)       0.9                                        0.6        1.7           3.2   catalyst could come from positive updates on its M&A activities.
 P/Book Value (X)        5.6                                        3.2        2.5           1.9   Adding a further 24.5% stake in Jiulong. Jiutian’s stake in Jiulong, a JV
 Net Debt/Equity (X)   CASH                                         0.1         0.3        CASH    between the Group and Anyang to set up a 250k tpa methanol facility,
 ROAE (%)               38.2                                      13.5        23.8          34.4   would be raised from 51.0% to 75.5% after the successful acquisition. This
                                                                                                   is a strategic move to provide the Group with a stable and cost effective
 SHARE PRICE CHART
                                                                                                   supply of methanol, especially in the high methanol price environment.
              S$
     0 .8 0                                                                                        We estimate the acquisition to boost Jiutian’s FY09 earnings by 10%.
     0 .7 0
     0 .6 0                                                                                        New DMF plant has ramped up to 80% utilisation. From 30% in the early
     0 .5 0
     0 .4 0
                                                                                                   October07, the new 120,000 tpa DMF plant is now running at close to 80%
     0 .3 0                                                                                        utilisation on daily output of 300 tonnes. It is expected to fully ramp up
     0 .2 0                                                                                        towards the end of 1Q08. This was, in fact, slightly behind our
     0 .1 0
     0 .0 0
                                                                                                   expectation. Nonetheless, the successful operation of the world’s largest
         Ja n -0 7         M a r-0 7       Ju n -0 7       A u g -0 7     O c t-0 7    Ja n -0 8   single DMF production line is a key breakthrough for the group, in light of
              J iu t ia n C h e m ic a l G r o u p L im it e d             1 0 0 -D a y M A
                                                                                                   their ability to resolve the technical issues during the initial stage.
 AT A GLANCE                                                                                       Concern over fluctuating DMF prices. The DMF prices have been trending
 Issued Capital (m shrs)                                                                 1,380     down from their record high of RMB6700 a tonne in 4Q06 to below
 Mkt. Cap (S$m/US$m)                                                                  372 / 261    RMB6000 a tonne at the beginning of 2008. This led to our observation that
 Major Shareholders                                                                                DMF pricing by the “DMF cartel” among top Chinese producers does not
    Stateglory Investments Ltd (%)                                                        33.8
                                                                                                   appear to have worked out as expected. Indeed, feedback from industry
    Amer Intl Group (%)                                                                     8.2
    UOB Asset Mgmt (%)                                                                     6.8
                                                                                                   players seems to suggest there may be more DMF supply than initially
 Free Float (%)                                                                           39.5     expected in the domestic market. This is due to an influx of new DMF
 Avg. Daily Vol.(‘000)                                                                  16,947     capacity and potentially weaker exports from a US economy slowdown.
                                                                                                   Building in lower DMF-methanol price spread in our earnings model. In
 Earnings Rev (%):                           2008: (47.5)                 2009: (23.2)
 Consensus EPS (S cts):                      2008: 4.1                    2009: 5.4
                                                                                                   view of the DMF price weakness, we have built in a more conservative
 Variance vs Cons (%):                       2008: (44.0)                 2009: (20.4)             DMF-methanol spread assumption in our earnings model, at RMB2800 a
                                                                                                   tonne against RMB3300-RMB3400 before. This is below the lower end of
 Sector : Basic Materials
                                                                                                   the DMF-methanol price spread over the past two years, which was
 Bloomberg/Reuters Code: JIUC SP/JUTN.SI
 Principal Business: Engaged in the production of DMF.                                             estimated to be in the range of RMB3000-4000 a tonne.
 DMF is mainly used as solvent in the production of
 polyuthrene.


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


Trim 4Q07 earnings to reflect slower ramp up. We have cut our FY07 estimates by 40% to RMB62.1m, after
reducing capacity utilisation rate assumption from 60% to 40% at its new plant and factoring in a higher per
tonne overhead cost. This implies lower 4Q07 sales and earnings estimates of RMB115.0m and RMB8.2m,
respectively. The projected 4Q07’s net earnings indicate a plunge of 43% q-o-q, blamed on the operating loss
of RMB7m for the new DMF plant. We have also cut 2008 utilisation rate for the new plant from 100% to
90%, due to the slower than expected ramp up in 4Q 2007. Together with a much lower DMF-methanol
spread assumption, our FY08 and FY09 estimates are lowered by 48% and 23% to RMB159.1m and
RMB302.1m, respectively.

DMF vs Methanol prices 1Q06-1Q09F
                       Methanol, DMF Prices (RMB / Tonne) - Inclusive of




                                                                           8000

                                                                           7000

                                                                           6000

                                                                           5000

                                                                           4000
                                            VAT




                                                                           3000

                                                                           2000

                                                                           1000

                                                                              0
                                                                              2Q 6
                                                                              3Q 6
                                                                              4Q 6
                                                                                06

                                                                              2Q 7
                                                                              3Q 7
                                                                             4Q 7
                                                                             1Q F
                                                                             2Q 8F
                                                                             3Q 8F
                                                                             4Q 8F
                                                                             1Q F
                                                                             2Q 9F
                                                                             3Q 9F
                                                                             4Q F
                                                                                  F
                                                                               07




                                                                               08




                                                                               09
                                                                               09
                                                                                0
                                                                                0
                                                                                0


                                                                                0
                                                                                0
                                                                                0


                                                                               0
                                                                               0
                                                                               0


                                                                               0
                                                                               0
                                                                              1Q




                                                                              1Q




                                                                                                      Methanol Prices         DMF Prices
Source: Jiutian, DBS Vickers


Peers Comparison
Name                                                                         Px Last @    Adjusted        Est 2008      Est 2009    2Yr EPS       P/Bv    ROE     Prof
                                                                              14th Jan   Market Cap          PE            PE        CAGR                        Margin
                                                                               2008       (USD m)                                    (2007-
                                                                                                                                     2009)

JIUTIAN                                                                      SGD 0.27          261            11.7         6.3       119%         5.6     38.2    28.6

DMF Peers
SHANDONG HUALU                                                               CNY 29.78         2036           30.8         21.5          44%      7.7     17.7    13.0
ZHEJIANG JIANGSHAN                                                           CNY 24.66         476            NA           NA             NA      7.0     21.9    8.3

Methanol Peers
CHINA ENERGY                                                                 SGD 1.14          999            11.9         6.9           95%      5.1     24.3    28.2

Average (Excl Jiutian)                                                                                        21.4         14.2
Source: Bloomberg, DBS Vickers


Sales Breakdown by Products
FYE Dec                                                                    2002A     2003A            2004A      2005A           2006A         2007F     2008F    2009F
Sales (RMB m)
DMF                                                                            0           0             68          106           169          203       668       732
Methylamine                                                                    0           0             12           34            32           64       217       243
Methanol                                                                      51         101             86           46            39           25         0       224
Others                                                                         2           2              2            2            10            6         6         6
Total Sales                                                                   53         103            168          188           250          298       890      1204
Source: Bloomberg, DBS Vickers


                                                                                                                                                                                2 of 5
Company Focus                                                                                                                 Jiutian



Income Statement (RMB m)                                                 Balance Sheet (RMB m)
FY Dec                      2006A       2007F       2008F      2009F     FY Dec                       2006A    2007F      2008F     2009F
Turnover                      236.8       297.5      889.8    1,203.9    Net Fixed Assets             176.5    624.2       914.6     890.7
Cost of Goods Sold          (151.3)     (212.5)    (661.3)    (768.7)    Invts in Assocs & JVs          0.0      5.2         7.3       9.3
Gross Profit                   85.4        85.1      228.5      435.2    Other LT Assets                7.1      7.1         7.1       7.1
Other Opg (Exp)/Inc          (15.2)      (14.9)     (54.3)      (69.8)   Cash & ST Invts              146.9    121.0        40.4     307.5
Operating Profit               70.3        70.1      174.2      365.4    Other Current Assets          85.2     48.1       138.1     185.8
Other Non Opg (Exp)/Inc          0.0        0.0         0.0        0.0   Total Assets                 415.8    805.6     1,107.5   1,400.5
Associates & JV Inc              0.0        1.5         2.0        2.0
Net Interest (Exp)/Inc         (2.9)        0.3       (7.7)     (14.3)   ST Debt                        0.0     40.0        40.0      40.0
Exceptional Gain/(Loss)          0.0        0.0         0.0        0.0   Other Current Liab            67.6     52.4       106.2     139.4
Pre-tax Profit                 67.3        72.0      168.6      353.2    LT Debt                       37.0    117.0       217.0     167.0
Tax                              0.3     (10.8)       (8.2)     (11.6)   Other LT Liabilities           0.9      0.9         0.9       0.9
Minority Interest                0.0        0.0       (1.2)     (39.5)   Shareholder’s Equity         310.3    595.3       742.2   1,012.5
Preference Dividend              0.0        0.0         0.0        0.0   Minority Interests             0.0      0.0         1.2      40.7
Net Profit                     67.6        61.2      159.1      302.1    Total Cap. & Liab.           415.8    805.6     1,107.5   1,400.5
Net profit before Except.      67.6        61.2      159.1      302.1
EBITDA                         79.5        84.0      216.8      422.3
                                                                         Non-Cash Wkg. Cap             17.6     (4.2)       32.0     46.5
Sales Gth (%)                   25.8      25.7      199.1       35.3     Net Cash/(Debt)              109.9    (36.0)    (216.6)    100.5
EBITDA Gth (%)                  51.6        5.7     158.0       94.8
Operating Profit Gth (%)        57.7      (0.2)     148.4      109.8
Effective Tax Rate (%)          N/A       15.0        4.9        3.3
Cash Flow Statement (RMB m)                                              Rates & Ratios
FY Dec                      2006A        2007F      2008F      2009F     FY Dec                       2006A    2007F      2008F     2009F
Pre-Tax Profit                   67.3      72.0      168.6     353.2     Gross Margin (%)              36.1      28.6       25.7     36.2
Dep. & Amort.                     9.2      12.4       40.6       54.9    Operating Margin (%)          29.7      23.6       19.6     30.4
Tax Paid                          0.0        0.0    (10.8)      (8.2)    Net Profit Margin (%)         28.6      20.6       17.9     25.1
Assoc. & JV Inc/(loss)            0.0      (1.5)      (2.0)     (2.0)    ROAE (%)                      38.2      13.5       23.8     34.4
Non-Cash Wkg.Cap.               (7.3)      11.0     (33.6)     (17.8)    ROA (%)                       23.5      10.0       16.6     24.1
Other Operating CF              (0.5)        0.0        0.0       0.0    ROCE (%)                      33.2      12.7       20.8     35.1
Net Operating CF                 68.8      93.8      162.7     379.9     Div Payout Ratio (%)          21.8      20.0       20.0     20.0
Capital Exp.(net)              (84.6)   (460.0)    (331.0)     (31.0)    Interest Cover (x)            23.9      31.5       22.7     25.6
Other Invts.(net)                 0.0        0.0        0.0       0.0    Asset Turnover (x)              0.8      0.5        0.9      1.0
Invts in Assoc. & JV              0.0      (3.7)        0.0       0.0    Debtors Turn (avg days)       81.4      75.9       34.8     45.3
Div from Assoc & JV               0.0        0.0        0.0       0.0    Creditors Turn (avg days)     83.9      70.2       30.5     46.4
Other Investing CF              (3.4)        0.0        0.0       0.0    Inventory Turn (avg days)       2.7      3.2        3.0      4.5
Net Investing CF               (87.9)   (463.7)    (331.0)     (31.0)    Current Ratio (x)               3.4      1.8        1.2      2.8
Div Paid                          0.0    (14.8)     (12.2)     (31.8)    Quick Ratio (x)                 3.4      1.8        1.2      2.7
Chg in Gross Debt              (19.4)     120.0      100.0     (50.0)    Net Debt/Equity (X)          CASH        0.1        0.3    CASH
Capital Issues                 164.2      238.6         0.0       0.0    Capex to Debt (%)            228.5    293.0      128.8      15.0
Other Financing CF              (1.6)        0.0        0.0       0.0    N.Cash/(Debt)PS (RMBcts)        8.7    (2.6)     (15.7)      7.3
Net Financing CF               143.2      343.9       87.8     (81.8)    Opg CFPS (RMBcts)               7.1      6.0       14.2     28.8
Net Cashflow                   124.1     (26.0)     (80.6)     267.1     Free CFPS (RMBcts)            (1.5)   (26.5)     (12.2)     25.3
Quarterly / Interim Income Statement (RMB m)                             PE Chart (x)
FY Dec                     4Q2006 1Q2007 2Q2007 3Q2007
Turnover                         71.7      66.8       59.7       56.0    48.0
Cost of Goods Sold             (43.6)    (38.0)     (35.6)     (35.9)
Gross Profit                     28.1      28.8       24.1       20.0    43.0
Other Oper. (Exp)/Inc           (6.3)     (4.8)      (1.7)      (3.4)    38.0
Operating Profit                 21.8      24.0       22.4       16.7
Other Non Opg (Exp)/Inc           0.0       0.0        0.0        0.0    33.0
Associates & JV Inc               0.0       0.0        0.0        0.0    28.0
Net Interest (Exp)/Inc          (0.8)       0.0      (0.3)        0.3
Exceptional Gain/(Loss)           0.0       0.0        0.0        0.0    23.0
Pre-tax Profit                   20.9      24.0       22.1       16.9    18.0
Tax                               0.1     (4.0)      (3.4)      (2.9)
Minority Interest                 0.0       0.0        0.0        0.2    13.0
Net Profit                       21.0      20.0       18.7       14.3     8.0
Net profit bef Except.           21.0      20.0       18.7       14.3
                                                                          3.0
EBITDA                          21.8      24.0        22.4       19.1      May-06         Oct-06     Mar-07     Aug-07        Jan-08
Sales Gth (%)                   13.3      (6.8)     (10.7)      (6.2)
EBITDA Gth (%)                   8.1      10.1       (6.6)     (14.7)
Opg Profit Gth (%)               8.1      10.1       (6.6)     (25.6)
Gross Margins (%)               39.2      43.1        40.4       35.8
Opg Profit Margins (%)          30.4      35.9        37.5       29.8
Source: Company, DBS Vickers                                                                                                           3 of 5
Company Focus                                                                                                                 Jiutian


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.

GENERAL DISCLOSURE/DISCLAIMER
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"). [This report is intended for clients of DBSV Group only and no part of this document may be (i) copied,
photocopied or duplicated in any form by any means or (ii) redistributed without the prior written consent of DBSVR.]

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. 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. 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.
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.

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 15 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 11-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, may beneficially own a total of 1% or more of any class of common equity securities
             of the subject company as of 15 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.
                   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.
   4.        There are no company-specific disclosures for Jiutian Chemical Group Limited.




                                                                                                                                      4 of 5
Company Focus                                                                                                             Jiutian


 RESTRICTIONS ON DISTRIBUTION
 General          This report is not directed to, or intended for distribution to or use by, any person or entity who is a
                  citizen or resident of or located in any locality, state, country or other jurisdiction where such
                  distribution, publication, availability or use would be contrary to law or regulation.

 Australia          This report is being distributed in Australia by DBSVR and DBSVS, which are exempted from the
                    requirement to hold an Australian financial services licence under the Corporation Act 2001 [“CA] in
                    respect of financial services provided to the recipients. DBSVR and DBSVS are regulated by the
                    Monetary Authority of Singapore [“MAS”] under the laws of Singapore, which differ from Australian
                    laws. Distribution of this report is intended only for “wholesale investors” within the meaning of the
                    CA.

 Hong Kong          This report is being distributed in Hong Kong by DBS Vickers (Hong Kong) Limited which is licensed
                    and regulated by the Hong Kong Securities and Futures Commission.

 Singapore          This report is being distributed in Singapore by DBSVR, which holds a Financial Adviser’s licence and is
                    regulated by the MAS. This report may additionally be distributed in Singapore by DBSVS (Company
                    Regn. No. 198600294G), which is an Exempt Financial Adviser as defined under the Financial Advisers
                    Act. Any research report published by any foreign DBS Vickers entities is distributed in Singapore
                    only to “institutional investors” as defined under the Securities and Futures Act. Distribution of
                    research reports published by a foreign-related corporation of DBSVR/DBSVS to “Accredited
                    Investors” as defined under the Financial Advisers Regulations is provided pursuant to the approval
                    by MAS of research distribution arrangements under Paragraph 11 of the First Schedule to the FAA.

 United             This report is being distributed in the UK by DBS Vickers Securities (UK) Ltd, who is an authorised
 Kingdom            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.

 United   Arab      This report is being distributed in United Arab Emirates by DBS Bank Ltd, Dubai (PO Box 506538, 3rd
 Emirates           Floor, Building 3, Gate Precinct, DIFC, Dubai, United Arab Emirates) and is intended only for
                    wholesale clients. DBS Bank Ltd, Dubai is regulated by the Dubai Financial Services Authority.

 United States      Neither this report nor any copy hereof may be taken or distributed into the United States or to any
                    U.S. person except in compliance with any applicable U.S. laws and regulations.

 Other              In any other jurisdictions, except if otherwise restricted by laws or regulations, this report is intended
 jurisdictions      only for professional, institutional or sophisticated investors as defined in the laws and regulations of
                    such jurisdictions.

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




                                                                                                                                 5 of 5
Singapore

Results Snapshot
DBS Group Research . Equity                                                                                                                       15 Jan 2008

 SPH (SPH SP)                                                                                                                                       Buy S$4.60
 Operating earnings firm as expected                                                                                                       Price Target : S$ 5.80
 Reporting                  Performance             Mkt Cap                   FY              EPS    EPS Revision        PE (x)       PBV (x)      Net Dividend
 Period                                                                                    (S cts)                                                     Yield (%)
 1Q 2008                            In line        S$7,314m                  2008            32.9           unch          14.0           3.2                  7.0
                                                  US$5,118m                  2009            34.4           unch          13.4           3.1                  7.6

 Result Summary                                                               Comment on Results                        Recommendation
 FY Aug (S$ m)                     1Q07           1Q08            yoy         Results were in line with expectations    SPH’s core newspaper operations
                                                                  chg         as EBIT rose 20% yoy to S$127m on         continue to do well, with display and
 P&L Items                                                                    topline growth of 15% to S$315m.          classified revenue posting a combined
  Revenue                          274.2          315.1          +15%         Top line growth was led by an 8%          yoy growth of 10.2% (including
  EBIT                                                           +20%         increase in newspaper and magazine        magazines         10.5%),      Revenue
                                   105.6          126.5                       revenue whilst a S$16m revenue            contribution from Sky@Eleven of
 Investment Income                  29.7           9.8           -67%         recognition from Sky@Eleven helped        S$16.1m       was     slightly   below
                                                                              property revenue rise 70% yoy.            expectations compared to S$71m
 Pretax Profit                     135.1          135.4          +0.2%                                                  contribution in 4Q07 but property
                                                                              Investment income dipped by 67%
 Net Profit                                                       +1%                                                   development is inherently lumpy so we
                                   110.5          111.9                       yoy due to a) a more volatile equities
                                                                                                                        are comfortable with our full year
 EBIT Margin (%)                   38.5           40.5                        market and b) higher dividend
                                                                                                                        forecasts at this time (of S$228.6m
                                                                              income from M1 and capital
                                                                                                                        revenue).
                                                                              reduction exercise by Starhub in 1Q07
                                                                              last year.                                Maintain BUY, TP S$5.80. We like SPH as
                                                                                                                        a proxy for Singapore’s strong economy
                                                                              Overall bottom line growth was just
                                                                                                                        and also as a defensive play in this
                                                                              1% to S$112m due to lower
                                                                                                                        current volatile environment. Yield is
                                                                              investment income.
                                                                                                                        attractive at 7% net.



                                                                                                ANALYST: Paul Yong CFA +65 6398 7951 paulyong@dbsvickers.com



 Share Price Chart                                                                            RNAV Table for SPH (12-month Target Price)
           S$
     4 .8 0
     4 .6 0                                                                                                          Methodology      Val. (S$m)    Value (S$)
                                                                                              Newspaper &
     4 .4 0
                                                                                              Magazine                 20x PER          6213.3        3.92
     4 .2 0
                                                                                              Properties            RNAV Estimate       2297.0        1.45
     4 .0 0                                                                                   Cash and Investment
     3 .8 0                                                                                   Holdings              As at end FY07A     1256.1        0.79
     3 .6 0                                                                                    less: debt at end
     3 .4 0
                                                                                              FY07A                                     (574.7)       (0.36)
     3 .2 0
                                                                                              Total                                     9191.7         5.80
     3 .0 0
         Ja n -0 7     M a r-0 7      Ju n -0 7    A u g -0 7    O ct-0 7      Ja n -0 8
                     SP H                                 1 0 0 -D a y M A

Source: DBS Vickers




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


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.

GENERAL DISCLOSURE/DISCLAIMER
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"). [This report is intended for clients of DBSV Group only and no part of this document may be
(i) copied, photocopied or duplicated in any form by any means or (ii) redistributed without the prior written consent of
DBSVR.]

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.
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. 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.
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.

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 15 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 11-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, may beneficially own a total of 1% or more of any class of common equity securities
             of the subject company as of 15 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.
                   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.
   4.        There are no company-specific disclosures for SPH.

                                                                                                                                     2 of 3
Results Snapshot                                                                                                                 SPH


 RESTRICTIONS ON DISTRIBUTION
 General          This report is not directed to, or intended for distribution to or use by, any person or entity who is a
                  citizen or resident of or located in any locality, state, country or other jurisdiction where such
                  distribution, publication, availability or use would be contrary to law or regulation.

 Australia          This report is being distributed in Australia by DBSVR and DBSVS, which are exempted from the
                    requirement to hold an Australian financial services licence under the Corporation Act 2001 [“CA] in
                    respect of financial services provided to the recipients. DBSVR and DBSVS are regulated by the
                    Monetary Authority of Singapore [“MAS”] under the laws of Singapore, which differ from Australian
                    laws. Distribution of this report is intended only for “wholesale investors” within the meaning of the
                    CA.

 Hong Kong          This report is being distributed in Hong Kong by DBS Vickers (Hong Kong) Limited which is licensed
                    and regulated by the Hong Kong Securities and Futures Commission.

 Singapore          This report is being distributed in Singapore by DBSVR, which holds a Financial Adviser’s licence and is
                    regulated by the MAS. This report may additionally be distributed in Singapore by DBSVS (Company
                    Regn. No. 198600294G), which is an Exempt Financial Adviser as defined under the Financial Advisers
                    Act. Any research report published by any foreign DBS Vickers entities is distributed in Singapore
                    only to “institutional investors” as defined under the Securities and Futures Act. Distribution of
                    research reports published by a foreign-related corporation of DBSVR/DBSVS to “Accredited
                    Investors” as defined under the Financial Advisers Regulations is provided pursuant to the approval
                    by MAS of research distribution arrangements under Paragraph 11 of the First Schedule to the FAA.

 United             This report is being distributed in the UK by DBS Vickers Securities (UK) Ltd, who is an authorised
 Kingdom            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.

 United   Arab      This report is being distributed in United Arab Emirates by DBS Bank Ltd, Dubai (PO Box 506538, 3rd
 Emirates           Floor, Building 3, Gate Precinct, DIFC, Dubai, United Arab Emirates) and is intended only for
                    wholesale clients. DBS Bank Ltd, Dubai is regulated by the Dubai Financial Services Authority.

 United States      Neither this report nor any copy hereof may be taken or distributed into the United States or to any
                    U.S. person except in compliance with any applicable U.S. laws and regulations.

 Other              In any other jurisdictions, except if otherwise restricted by laws or regulations, this report is intended
 jurisdictions      only for professional, institutional or sophisticated investors as defined in the laws and regulations of
                    such jurisdictions.

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




                                                                                                                                   3 of 3
Regional

Market Focus
DBS Group Research . Equity                                                                                                          15 January 2008


Malaysia Companies
9th January 2008                                            Post-Conference Notes
The Ritz Carlton                                            Key Takeaways from the Pulse of Asia Singapore Conference

                                                             We hosted nine Malaysian companies at our “Pulse of
                                                             Asia” Conference in Singapore on 9th January. The small
                                                             group and one-on-one meetings by the companies were
                                                             well-received by investors. The companies were drawn
                                                             from among some of our favourite investment themes
                                                             including construction & building materials, palm oil,
                                                             gaming, oil & gas and real estate plays.
                                                             In this piece, we feature key takeaways for each
                                                             company. We also appended an information pack
                                                             containing succinct write-ups about each company’s
                                                             business, outlook and valuations, which was distributed
                                                             at the event.


Contributors to this piece:

Wong Ming Tek (603) 2711 0956
mingtek@hwangdbsvickers.com.my                              PARTICIPATING COMPANIES
                                                            Company                  Stock Code   Share Price    Price   Mkt Cap   Rating   FY08     FY09
June Ng (603) 2711 0970                                                                           (14 Jan 08)   Target   (US$m)             PE (x)   PE (x)
june@hwangdbsvickers.com.my                                 Malaysia

                                                            CB Industrial Product     CBP MK         6.20        7.90     262       Buy     11.7      9.4
Chong Lee Len (603) 2711 0972
                                                            Eastern and Oriental     EAST MK         2.56        3.80     329       Buy     17.2     13.7
leelen@hwangdbsvickers.com.my
                                                            Evergreen Fibreboard      EVF MK         1.58        3.20     233       Buy      6.0      5.1

Tan Siang Hing (603) 2711 1332                              Kinsteel                  KSB MK         1.50        1.70     415       Buy     10.7      8.6
sianghing@hwangdbsvickers.com.my
                                                            Malaysian Resources      MRC MK          3.00        3.60     836       Buy     20.4     13.5
                                                            Corporation
Ben Santoso (65) 6398 7976                                  Multi-Purpose Holdings   MPU MK          2.29        3.60     671       Buy      9.7      8.6
bensantoso@dbsvickers.com                                   TSH Resources             TSH MK         3.72        5.00     472       Buy     14.0     11.6

Juliana Ramli (603) 2711 2222                               Wah Seong Corporation    WSC MK          4.00        4.60     528       Buy     21.6     18.4

juliana@hwangdbsvickers.com.my                              WCT Engineering          WCT MK          9.80       10.70     1023      Buy     15.2     14.6


Azida Nor Azizi (603) 2711 2222                             Source: DBS Vickers
azida@hwangdbsvickers.com.my

Kok Chiew Sia (603) 2711 2222
chiewsia@hwangdbsvickers.com.my

Malaysia Research Team
general@hwangdbsvickers.com.my




www.dbsvickers.com
Refer to important disclosures at the end of this report.
Market Focus                                                                            Post Conference Notes



MALAYSIA


CB Industrial Product (BUY, TP RM7.90)
CB Industrial Product was represented by Business Development Director Mr. Sze Kok Sing who has more
than 20 years of experience in the oil palm industry. Mr.Sze gave investors a quick introduction on the
company’s background and business model. In his presentation, he also highlighted the advantages of its
patented continuous sterilisation process over the conventional sterilisation process, potential demand for
palm oil mills and its underlying risk, and the earnings prospect from its plantation segment expansion.
    •    Modipalm is gaining greater acceptance from industry players due to its ability to provide greater
    efficiency in the oil extraction process and save costs (e.g. labour and land usage for constructing a
    mill). The Group has received repeat orders from existing customers and also managed to attract new
    customers such as United Plantation Bhd (for building 60MT/hr modipalm valued at RM38.1m) and PT
    Smart Tbk (for building 80MT/hr modipalm valued at c. RM44.0m). The prospect for securing new
    orders on new mills and refurbishment of old mills is bright, buoyed by aggressive expansion in the oil
    palm industry, especially in Indonesia.
    •    CBIP has introduced a zero-effluent composting plant which is able to convert palm oil mill
    effluents (POME) and empty fruit bunches (EFB) into compost and subsequently be used as organic
    fertiliser. The EFB-POME co-composting process is eligible for the sale of carbon credits under the
    Kyoto Protocol’s clean development mechanism. This provides value-add to CBIP’s modipalm mill and
    enhances modipalm’s appeal to plantation players.
    •   We expect the Group to continue expanding its plantation segment. Further acquisitions will be
    considered as and when opportunity with reasonable price and strategic locations arises. We expect oil
    palm pretax profit contribution to pick up from 8% of Group’s profit in FY06 to 37% in FY08.


Eastern & Oriental (BUY, TP RM3.80)
Executive Director Mr Eric Chan and Senior Executive Ms Lisa Ten represented Eastern and Oriental (EAST)
at the Pulse of Asia Singapore conference. The Management shared with investors the proposed merger to
acquire the remaining stake in E&O Property. EAST also presented key property launches worth some
RM4b in the pipeline and the plans for growing its investment properties, leisure and hospitality segment.
We are positive on the longer term prospects of EAST. With the anticipated launches worth more than
RM4b in Penang and KL, we estimate earnings to grow by 28% CAGR for the next two years.
    •   Merger to complete by May 2008. The proposed merger, which was announced in Nov 2007, is
    scheduled for completion by May 2008. The preliminary feedback on the merger has been positive as
    most shareholders believe it will elevate the Group into a stronger platform to better seize growth
    opportunities.
    •   On track to launch projects worth RM4b. RM3b worth of properties are earmarked to be
    launched in Kuala Lumpur and the remaining from Penang projects i.e. Seri Tanjung Pinang Phase 1.
    Key launches include the 50:50 JV with Lion Group (est. GDV RM900m), Jalan Yap Kwan Seng office
    development (est. GDV RM320m) and the 50:50 JV with Selangor Properties (est. GDV RM1.1b) to
    develop a mixed development at Damansara Heights in Kuala Lumpur. In Penang, EAST is unveiling a
    seven-block luxury condominium (21 acres with seven-acre water park and estimated GDV of RM1.3b)
    in Seri Tanjung Pinang. We understand EAST is exploring options to leverage on its strong branding
    with landowners to develop similar upscale projects in other growth areas in Malaysia besides Kuala
    Lumpur and Penang.
    •   Other businesses to get bigger and better. We understand that EAST is expanding both its hotels -
    Eastern and Oriental Hotel and Lone Pine Hotel - to complement the soon to be completed service
    apartments in Seri Tanjung Pinang. EAST has also lined up over RM1b (in cost) of prime assets for its
    investment portfolio in five years time. We estimate the planned investment properties could
    contribute RM80m-90m in recurring income.




                                                                                                              2
Market Focus                                                                            Post Conference Notes



Evergreen Fibreboard (BUY, TP RM3.20)
Evergreen Fibreboard (EFB), represented by Executive Directors Mr. Kuo Jen Chiu and Ms. Mary Henerietta
Lim, is one of the largest MDF manufacturers in the region. Management highlighted that expected firm
global MDF demand will continue to drive EFB’s growth going forward, while the Group’s effort to be
more cost efficient through vertical integration will place EFB in a more competitive position. Key
takeaways from the conference include:
    •   Outlook for the MDF market remains bright with growing demand coming from the Middle East
    and Asia. In 2006, sales from the Middle East and Asian countries accounted for 17% and 65% of EFB’s
    revenue respectively. MDF prices are also expected to remain stable for the next 3-6 months on the
    back of expected firm demand. MDF prices are not entirely dependent on the change in plywood
    prices given its wider application e.g. in furniture, building interiors, and household products; as
    opposed to plywood which is largely used for housing construction.
    •   Construction of glue and biomass power plant on track. The construction of the glue plant in
    Johor, Malaysia, is on schedule and is expected to be operational by Mar 08, while the biomass power
    plant in Thailand is also on track and is expected to come on stream by Jan 08. We understand that
    EFB will be able to save some RM20-25m (or 34-42% of 2006 earnings) per year by consuming its own-
    produced glue and electricity from both plants. Glue and electricity are the main cost components of
    MDF manufacturing accounting for 25-28% and 10-15% of total operating costs respectively.
    •   Dividend on the rise. We expect dividend payout of 30% in 2007. Thus far, EFB had declared an
    interim dividend (tax-exempted) of 2.5 sen per share for the year. Based on our forecast, the Group is
    expected to pay out full year dividend of 6.5 sen per share in 2007 and 8.0 sen per share in 2008 which
    translates into 4% and 5% net dividend yield respectively.


Malaysian Resources Corporation Berhad (BUY, TP RM3.60)
Malaysian Resources Corporation Berhad (MRCB) was represented by En Arief Nasran (Head of Corporate
Finance) and En Zulkifli Mohd Salleh Sabai (Manager Corporate Finance). Many of the investors that MRCB
met with are familiar with the company and some are shareholders. As such, the meetings were focused
on the update on new developments, especially on KL Sentral and the potential new construction jobs. A
few investors also discussed with MRCB on the implementation of the projects under the Ninth Malaysia
Plan.
    •   Investors are generally upbeat about MRCB’s prospects and pleased with the growing value at KL
    Sentral. We understand that MRCB is working on plans to unlock the values of its property projects,
    which may include entry of new strategic investors. The plans to fast track the developments at KL
    Sentral and Penang Sentral are likely to be finalised over the next few months.
    •    We believe MRCB is poised to secure a few major construction jobs in the near term, which may
    include the Penang monorail (estimated at RM2b), Penang Outer Ring Road (estimated at RM1b),
    Bakun undersea cable (estimated at RM9b with RM3b for the construction portion) and a few river
    cleaning projects. We expect news flow to be positive for MRCB with more projects to be awarded
    over the next few months.
    •    We continue to favour MRCB for its good earnings visibility, supported by the KL Sentral
    development and high construction orderbook of RM2.8b. MRCB is also a good proxy to an asset-
    reflation play, Ninth Malaysia Plan spending and the Northern Corridor development.


Multi-Purpose Holdings (BUY, TP RM3.60)
COO Ms Kheoh And Yeng represented Multi-Purpose at the Pulse of Asia Singapore conference. Apart
from presenting the Multi-Purpose business model to potential investors, management also provided an
update on recent developments (i.e. the proposed privatisation of Magnum Corporation Berhad together
with CVC Asia Capital). Key takeaways are as follows:-
    •  Essentially, Ms Kheoh emphasised the “cleaner” Group structure. The privatisation of Magnum
    and injection of its Magnum stake into a special purpose vehicle – in which Multi-Purpose will



                                                                                                              3
Market Focus                                                                            Post Conference Notes



    continue to own 51% interest – may give rise to potential cash payment (to Multi-Purpose) of
    between RM422m and RM719m. We understand the Group will likely utilise the cash proceeds to par
    down its RM300-400m holding company debt. Also, the Group may receive a second cash proceed of
    approximately RM275m-375m, stemming from sale of non-core assets that the Group deems
    unsuitable for development in the near term. The privatization of Magnum is slated for completion by
    end-2Q08, subject to a 75% minority shareholder’s acceptance during its EGM to be held on 20 Feb
    2008.
    •    Management also spoke in length on the on-goings and prospects of the property sector, which is
    poised to be the Group’s new growth driver. First off, the privatisation of Magnum will likely see
    MPHB evaluating a few key developments like the Rawang landbank (slated for low-to-medium
    residential project), Mimaland (higher-end, low density residential project) and Flamingo (two blocks
    of medium end apartments). We also expect the Group to take over Magnum’s interest in the hotel
    property – in Kuala Lumpur and Penang.
    •   Likely sale or an M&A in the offing. The operating and financial performances of the Group’s
    insurance and stockbroking arm have been improving gradually over the years and we could
    potentially see some form of alliance tie up or enbloc sale.


TSH Resources (BUY, TP RM5.00)
TSH Resources, presented by Mr. Frederick Tan, Director of Operations and Planning, is a fast growing
palm oil player in the country having expanded into Indonesia. Mr. Tan emphasised the Group’s
aggressiveness in developing its newly acquired palm oil estates in Indonesia as well as plans to acquire
more; while benefiting from additional income by going green through its bio-integration projects. Key
takeaways from the conference include:-
    •    Half of CPO production locked in at RM2,900/MT for 1Q08, in line with TSH’s policy to sell forward
    half of its CPO production for the next 3-6 months. For 2007, TSH had achieved an average CPO price
    of c.RM2,400/ MT, close to the market average CPO prices of RM2,475/MT for the year.
    •    Fifth new palm oil mill to come on stream by 1Q09 in Kalimantan, Indonesia. The mill is scheduled
    to be constructed this year and will add another 30MT/hr (or 11% to 306MT/hr) of capacity by 2009.
    The new mill is vital to process the additional FFB production from its newly acquired palm oil estates
    in Indonesia, which are expected to produce double-digit FFB production growth for 2008-09. Despite
    the strong production growth, FFB yield is likely to be lower in 2008 due to the dilution effect of
    newly matured areas in Indonesia. We expect FFB yield to drop slightly to 19.2 MT/ha and 20.4 MT/ha
    in FY08 and FY09 respectively from 22.4MT/ha forecast in 2007.
    •   TSH’s biogas plant has been granted a conditional approval to qualify for Clean Development
    Mechanism (CDM) project under the Kyoto Protocol, while the applications for its two biomass power
    plants are still pending approval. The approval entitles them to carbon credits, which they can sell to
    other countries or companies that exceeded their emission quotas. We understand that the biogas
    power plant could contribute 100,000 tonnes of carbon credits per year. The Group will also submit
    application to qualify for CDM project for its palm pulp and paper plant, which is projected to be
    operational in 2009.


Wah Seong Corporation Berhad (BUY, TP RM4.60)
Wah Seong Corporation Berhad (Wah Seong) was represented by Mr Giancarlo Maccagno (Deputy Group
Managing Director) and Mr Goh Eng Hooi (Business Development Manager). Some of the investors that
Wah Seong met with are familiar with the company and a few of them are shareholders. Apart from
presenting the business plan, the management also shared with the investors the resilient outlook for the
oil and gas sector.

    •   Investors were interested to learn more about the EURO600-700m Nordstream deepwater pipe
    coating project. Wah Seong indicated that the project is likely to be awarded in Feb 08, a slight delay
    as compared to the earlier indication of Dec07 due to competitive bids submitted by the bidders. The
    Nordstream project is owned by Russian’s state-owned Gazprom and a German consortium. The other
    bidders for this project are Bredero Shaw, Socotherm and another German-based pipe coating



                                                                                                              4
Market Focus                                                                               Post Conference Notes



    company. We believe that Wah Seong stands a good chance in winning this job as two out of the four
    bidders are likely to secure the work.
    •    Wah Seong also explained why it has decided not to proceed with its plan to list the oil and gas
    division in Singapore, and instead, to spin-off and list its industrial division on the Bursa Malaysia.
    Management explained that the key reason is that there will be significant upside to the oil and gas
    division and the listing may lead to dilution for existing shareholders. As for the industrial services
    division, the listing in 3Q08 is timely to unlock the value as this division will benefit from the stronger
    steel pipe demand following the implementation of the Ninth Malaysia Plan projects. We remain
    upbeat on Wah Seong given the sizeable new order flows from pipe coating and gas compression
    units in FY08-09.


Kinsteel Berhad (BUY, TP RM1.70)
Local integrated steel player, Kinsteel was represented by Chief Executive Officer, Mr Henry Pheng and
Chief Accountant, Mr Cheok Kia Yong. Most of the investors who attended the meetings need no
introduction to the company as some were already shareholders and some followed the company’s
progress closely. In general, management presented the company’s updates, touching on expansion plans,
introduction of new product ranges and growth prospects. Meanwhile investors expressed their concerns
on higher raw material prices and the outlook on both domestic and international steel sector.
    •   In 2005, Malaysia imported 350k MT of beams and sections. Kinsteel’s beam and section mills in
    Gurun have a total production capacity of 700k MT—twice the amount imported. The company
    intends to cater to the local market by increasing the utilisation rate in its mills. Management is also
    looking to further increase its DRI production capacity from 1.5m MT to 1.8m MT.
    •   The Government’s recent increase in the local ceiling price has minimal impact on the company, as
    the price lift only applies to 15% of its products. Iron ore prices are expected to increase by 30-50%
    and in such a scenario, Kinsteel expects to increase its product prices accordingly. Kinsteel foresees
    earnings growth supported by the higher international steel prices as it exports 30% of its products.
    •   We expect construction activities from the Ninth Malaysia Plan projects to gain momentum in
    2008. The company expects higher steel consumption from local activities as well as in overseas.
    Kinsteel, which will start producing railway products, would be a potential beneficiary of the recently
    approved Double-Tracking railway project.


WCT Engineering (BUY, TP RM10.70)
WCT Engineering was represented by Mr Kenny Wong from the Group’s Corporate and Finance Division.
He presented an overview of the Group’s key business divisions and highlighted several of its completed
and existing construction/infrastructure projects. Going forward, we remain optimistic of the Group’s
earnings prospects in both the construction/infrastructure and property development business.
    •   The Group is well-positioned to benefit from the major construction/infrastructure expansion in
    the key markets, Malaysia and the Middle East, in our opinion. In the Middle East, we believe there is
    good opportunity to further increase orderbook from additional work on existing projects. Some of
    the Group’s projects represent a portion of bigger projects such as the Abu Dhabi F1 (ADF1) project on
    Yas Island, Meydan Racecourse, Dubai World Airport and New Doha International Airport. We believe
    2008 will mark a very exciting period for the Malaysian construction sector, as the government
    accelerates the roll out of Ninth Malaysia Plan (9MP) projects. Given its technical strength and
    execution track record, we believe the Group is in a good position to win some 9MP projects.
    •   For the property development business, the Group has secured a potential earnings stream for the
    future by securing the Investment Certificate to undertake the US$700m Platinum Plaza Development
    project in Ho Chi Minh City, Vietnam, on 9 January 2008. The Group has identified more potential
    projects in Vietnam – which could be secured before end-2008. Given their scale, these Vietnam
    projects could be a major earnings driver for the property division from FY2010 onwards.




                                                                                                                  5
Market Focus                                                                                Post Conference Notes




 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                                               6
                                      Company Regn. No. 198600295W
 Hong Kong / China

 Company Focus
  DBS Group Research . Equity                                                                                                                   15 January 2008

 Buy HK$2.65 HSI : 26,468
 Price Target: 12-Month HK$ 4.60
                                                                                              Comba
 Reason for Report: Company update                                                            Strengthening growth momentum
 Potential Catalyst: Telecom industry restructuring, TD-SCDMA
 trial network expansion, expect strong FY07 results.                                             Story: Being the largest provider of telecom wireless
                                                                                              enhancement products in China, Comba has established a solid
 ANALYST
                                                                                              foundation in China’s 2G wireless enhancement market and is
 Steven Liu CFA, +852 2971 1780
 steven_liu@hk.dbsvickers.com                                                                 well poised to take a lion’s share of the forthcoming 3G market
                                                                                              in China.
 FORECASTS AND VALUATION
 FY Dec (HK$ m)      2006A                        2007F            2008F             2009F        Point: With well-established R&D, distribution and sales
 Turnover             1,550                       1,942            2,679             3,248    network, we believe Comba would continue to realise economies
 EBITDA                 197                         263              420               536    of scale, which would more than offset the decline in gross
 Pre-tax Profit         148                         212              361               467
 Net Profit             131                         180              307               397
                                                                                              margin.
 Net Pft (Pre Ex.)      131                         180              307               397         Relevance: Trading at 7.5x FY08 PE, current valuation is at
 EPS (HK$)             0.16                        0.21             0.35              0.46
 EPS Gth (%)           59.2                        33.3             69.4              29.8
                                                                                              quite a discount to most of its global peers and has not reflected
 Diluted EPS (HK$)     0.16                        0.21             0.35              0.45    its promising growth outlook. We maintain BUY and target price
 DPS (HK$)             0.05                        0.06             0.11              0.14    of HK$4.6.
 BV Per Share (HK$)    1.67                        1.79             2.08              2.44
 PE (X)                16.9                        12.7               7.5               5.8   Sustainable industry growth momentum. Though telecom operators
 P/Cash Flow (X)       13.1                        10.2               6.5               5.1   in China have been prepared for building 3G networks for some
 EV/EBITDA (X)           9.5                         7.5              4.9               3.8   years, mobile operators’ investments in 2G networks have kept
 Net Div Yield (%)       1.7                        2.3              4.0               5.2    growing to meet the rapidly increasing number of mobile
 P/Book Value (X)        1.6                         1.5              1.3               1.1   subscribers. We believe 2G and 3G will co-exist in China for quite a
 Net Debt/Equity (X)  CASH                        CASH             CASH              CASH     few years in the future, in view of two-thirds of the population being
 ROAE (%)              10.1                        12.3             18.4              20.3
                                                                                              in rural areas. With intensifying competition in the future, we believe
 SHARE PRICE CHART                                                                            wireless enhancement would become increasingly important to
       HK$
    4 .0 0                                                                                    mobile telecom operators, especially for 3G services. According to
    3 .5 0
                                                                                              CCID research, the wireless coverage market (2G and 3G) in China will
                                                                                              reach RMB15.5bn by 2010, with CAGR of 12% from 2007. We believe
    3 .0 0
                                                                                              the actual market size could be much larger, in view of the
    2 .5 0                                                                                    potentially huge demand to be unleashed from industry
    2 .0 0                                                                                    restructuring.
    1 .5 0                                                                                    An emerging global player. While Comba has laid a solid foundation
    1 .0 0                                                                                    in the domestic market, it is poised to make inroads into overseas
        Ja n -0 7   M a r-0 7     Ju n -0 7   A u g -0 7     O c t-0 7   Ja n -0 8
                                                                                              markets. In the domestic market, Comba has maintained its
                     Com ba                     1 0 0 -D a y M A
                                                                                              leadership in R&D capacity, technology leadership, product portfolio
AT A GLANCE                                                                                   as well as customer relationship. As larger telecom vendors, like ZTE,
Issued Capital (m shrs)                                                    854
                                                                                              Huawei, Ericsson, etc, are focusing on core product lines, Comba has
Mkt. Cap (HK$m/US$m)                                               2,263 / 290
Major Shareholders                                                                            created its niche market in the wireless enhancement field in China
     Chen Jing Na (%)                                                     43.2                and soon to set strong foot in the global market. In view of the
     Zhang Yue Jun (%)                                                    14.1                higher entry barrier for 3G than 2G, we believe Comba would gain a
     Cai Hui Ni (%)                                                       11.4                larger share in China’s 3G wireless enhancement market. In this
Free Float (%)                                                            31.3                regard, we expect Comba to experience high growth over the next
Avg. Daily Vol.(‘000)                                                    1,826                few years, underpinned by strong industry growth, gaining market
Earnings Rev :                  2008: Nil                  2009: Nil                          share and increasing economies of scale.
Consensus EPS :                 2008:HK$ 0.31              2009:HK$ 0.38                      A rare undervalued growth play. In the wake of the global equity
Variance vs Cons:               2008: 13.93%               2009: 19.78%                       market setback, Comba’s share prices have suffered a deep pullback
Sector : Technology                                                                           over the past months. However, we see no major concerns in either
                                                                                              the industry side or the company’s fundamentals. Instead, we expect
Bloomberg/Reuters Code: 2342 HK EQUITY/ 2342.HK
                                                                                              to see accelerating progress with the telecom industry restructuring
Principal Business: Comba is the largest provider of                                          and 3G licensing in 2008, which would provide strong support for
wireless enhancement, antennas & subsystem and                                                Comba’s share price. The counter is trading at 7.5x FY08 PE, which
wireless transmission products in China, with market
                                                                                              has not reflected the company’s growth outlook. Maintain BUY.
share of over a quarter. Its major customers include
telecom operators and core telecom equipment vendors.



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



Income Statement (HK$ m)                                                                                                                  Balance Sheet (HK$ m)
FY Dec                                                                      2006A           2007F      2008F              2009F           FY Dec                  2006A     2007F     2008F     2009F
Turnover                                                                          1,550      1,942      2,679            3,248            Net Fixed Assets          258       325       401       487
Cost of Goods Sold                                                                (964)    (1,265)    (1,789)          (2,195)            Invts in Assocs & JVs       0         0         0         0
Gross Profit                                                                        587        676        890            1,053            Other LT Assets            76        73        72        71
Other Opg (Exp)/Inc                                                               (435)      (464)      (527)            (582)            Cash & ST Invts           493       506       452       534
Operating Profit                                                                    152        212        363              472            Other Current Assets    1,589     1,874     2,465     2,917
Other Non Opg (Exp)/Inc                                                                7          8          8                9           Total Assets            2,417     2,778     3,390     4,009
Associates & JV Inc                                                                    0          0          0                0
Net Interest (Exp)/Inc                                                              (12)        (7)       (10)             (13)           ST Debt                   153       183       220       264
Exceptional Gain/(Loss)                                                                0          0          0                0           Other Current Liab        857     1,043     1,363     1,633
Pre-tax Profit                                                                      148        212        361              467            LT Debt                     0         0         0         0
Tax                                                                                 (17)       (32)       (54)             (70)           Other LT Liabilities        0         0         0         0
Minority Interest                                                                      0          0          0                0           Shareholder’s Equity    1,399     1,543     1,798     2,103
Preference Dividend                                                                    0          0          0                0           Minority Interests          8         8         8         8
Net Profit                                                                          131        180        307              397            Total Cap. & Liab.      2,417     2,778     3,390     4,009
Net profit before Except.                                                           131        180        307              397

EBITDA                                                                              197        263        420                   536       Non-Cash Wkg. Cap         733      831      1,102     1,284
Sales Gth (%)                                                                      32.5       25.2       38.0                  21.2       Net Cash/(Debt)           340      322        232       270
EBITDA Gth (%)                                                                     47.9       33.4       59.7                  27.6
Opg Profit Gth (%)                                                                 54.4       39.7       71.2                  29.8
Effective Tax Rate (%)                                                             11.2       15.0       15.0                  15.0
Cash Flow Statement (HK$ m)                                                                                                               Rates & Ratios
FY Dec                                                                       2006A          2007F      2008F              2009F           FY Dec                   2006A     2007F     2008F    2009F
Pre-Tax Profit                                                                 148             212        361                467          Gross Margin (%)           37.8     34.8       33.2    32.4
Dep. & Amort.                                                                    38             43         49                 56          Opg Profit Margin (%)       9.8     10.9       13.6    14.5
Tax Paid                                                                       (28)           (32)       (54)               (70)          Net Profit Margin (%)       8.5      9.3       11.5    12.2
Assoc. & JV Inc/(loss)                                                            0              0          0                  0          ROAE (%)                   10.1     12.3       18.4    20.3
Non-Cash Wkg.Cap.                                                              (80)           (98)      (271)              (182)          ROA (%)                     5.7      6.9        9.9    10.7
Other Operating CF                                                               26             13         15                 19          ROCE (%)                   10.4     12.2       18.4    20.5
Net Operating CF                                                               104             139        100                289          Div Payout Ratio (%)       28.8     29.0       30.0    30.0
Capital Exp.(net)                                                              (93)          (107)      (123)              (141)          Interest Cover (x)         13.2     28.5       35.5    35.8
Other Invts.(net)                                                              178               0          0                  0          Asset Turnover (x)          0.7      0.7        0.9     0.9
Invts in Assoc. & JV                                                              0              0          0                  0          Debtors Turn (days)       171.7    172.6     159.1    164.3
Div from Assoc & JV                                                               0              0          0                  0          Creditors Turn (days)     115.0    123.5     123.3    132.8
Other Investing CF                                                                4              0          0                  0          Inventory Turn (days)     225.4    194.4     171.1    173.4
Net Investing CF                                                                 90          (108)      (123)              (141)          Current Ratio (x)           2.1      1.9        1.8     1.8
Div Paid                                                                       (25)           (38)       (52)               (92)          Quick Ratio (x)             1.5      1.3        1.2     1.2
Chg in Gross Debt                                                              (43)             31         37                 44          Net Debt/Equity (X)       CASH     CASH      CASH     CASH
Capital Issues                                                                   17              2          1                  0          Capex to Debt (%)          60.5     58.4       55.7    53.2
Other Financing CF                                                               36           (13)       (15)               (19)          N.Cash/(Debt)PS (HK$)       0.4      0.4        0.3     0.3
Net Financing CF                                                               (15)           (19)       (30)               (67)          Opg CFPS (HK$)             0.22     0.27       0.43    0.55
Net Cashflow                                                                   179              13       (54)                 82          Free CFPS (HK$)            0.01     0.04     (0.03)    0.17
Price Relative to Index                                                                                                                   PE Chart (x)

                                               C O M B A TEL EC O M SYS.                                         1 4 /1 /0 8
5.50
                                                                                                                                           41.0
5.00
                                                                                                                                           36.0
4.50
                                                                                                                                           31.0
4.00

3.50                                                                                                                                       26.0

3.00                                                                                                                                       21.0
2.50
                                                                                                                                           16.0
2.00
                                                                                                                                           11.0
1.50
                                                                                                                                            6.0
1.00
                                                                                                                                              2004         2005     2006            2007
0.50
                  2003                           2004                             2005        2006          2007
    P R IC E
    P R IC E R E L . T O H A N G S E N G - P R IC E IN D E X
  H IG H 5 .3 0 1 8 /2 /0 4 ,L O W 1 .5 4 2 /1 1 /0 5 ,L A S T 2 .6 0 9 /1 /0 8                           S o urce : D A T A S T RE A M




Source: Company, DBS Vickers                                                                                                                                                                            2 of 3
Company Focus                                                                                                   Comba




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

                                                                                                                        3 of 3
 Hong Kong / China

 Company Focus
   DBS Group Research . Equity                                                                                                                   15 January 2008

 Buy HK$25.35 HSI : 26,468
 Price Target: 12-Month HK$ 30.00
                                                                                               Li Ning
 Reason for Report: Company update                                                             Room for expansion
 Potential Catalyst: M&A, faster-than-expected network
 expansion                                                                                         Story: Our recent meeting with management and store visit
                                                                                               in Wuhan and Beijing re-confirmed our positive view on Li Ning.
 ANALYST
 Alice Hui CFA, +852 2971 1960                                                                      Point: Management maintains its FY07 target for same-store
 alice_hui@hk.dbsvickers.com                                                                   sales (SSS) growth at 16%. Store expansion has also been on
 FORECASTS AND VALUATION
                                                                                               track, with room for further acceleration as management
 FY Dec (RMB m)      2006A                          2007F            2008F             2009F   adjusted upwards its FY08 target to 5,600-5,700 stores.
 Turnover             3,181                         4,368            6,189             7,738   Meanwhile, sub-brand Z-do has been performing well and Aigle
 EBITDA                 438                           673              982             1,281   is also looking to start breaking even in 2H08.
 Pre-tax Profit         401                           593              862             1,149
 Net Profit             295                           440              630               842       Relevance: Our forecast on earnings of FY07-09 CAGR at 39%
 Net Pft (Pre Ex.)      295                           440              630               842   is kept unchanged, with room for further upgrade possible,
 EPS (HK$)             0.31                          0.46             0.66              0.88
 EPS Gth (%)           57.0                          48.7             43.3              33.6
                                                                                               considering the boost from the Olympics. We maintain BUY with
 Diluted EPS (HK$)     0.31                          0.46             0.66              0.88   target price unchanged at HK$30.
 DPS (HK$)             0.12                          0.18             0.26              0.35
                                                                                               Notable improvement in products and stores. Last week, we visited
 BV Per Share (HK$)    1.46                          1.77             2.22              2.81
 PE (X)                82.3                          55.3             38.6              28.9   some of Li Ning’s stores in Wuhan and Beijing. All of the stores we
 P/Cash Flow (X)       73.4                          46.9             32.3              24.8   visited are fourth generation stores, and are conveniently located in
 EV/EBITDA (X)         53.5                          34.9             23.9              17.9   prime locations (on shopping streets). We noted visible improvement
 Net Div Yield (%)       0.5                          0.7              1.0               1.4   in product design and store display, higher average selling prices
 P/Book Value (X)      17.4                          14.3             11.4               9.0   (ASPs), with the stores featuring more prominent area for shoe
 Net Debt/Equity (X)  CASH                          CASH             CASH              CASH    products, in line with the company’s strategy to raise footwear sales.
 ROAE (%)              23.0                          28.4             32.9              34.9   We also visited Li Ning’s new headquarters in Beijing, which (upon
 SHARE PRICE CHART                                                                             completion of the remaining phase in mid-FY08) would be able to
       HK$
    3 0 .0 0
                                                                                               cater for trade fairs in-house. With total investment of c.RMB230m,
                                                                                               impact on earnings is negligible, considering that the annual
    2 5 .0 0                                                                                   depreciation/amortisation would be offset by rental savings.
                                                                                               Progress on track. Management is confident in sustaining SSS at 16%,
    2 0 .0 0
                                                                                               with additional boost of c.6% estimated in FY08, due to the
    1 5 .0 0
                                                                                               Olympics. Margin target is also maintained at 47-48% at gross level,
                                                                                               and 9-10% for net profit (versus 8-10% previously). In terms of
    1 0 .0 0                                                                                   network expansion, its target of 5,000 stores in FY07 is on track, with
          Ja n -0 7   M a r-0 7     Ju n -0 7   A u g -0 7     O c t-0 7   Ja n -0 8           FY08 target raised slightly to 5,600-5,700 (versus the original 5,600),
                       L i N in g                 1 0 0 -D a y M A
                                                                                               indicating a possible acceleration in expansion. Meanwhile, its sub-
AT A GLANCE                                                                                    brand Z-do has performed well in FY07 with another 400 stores to be
Issued Capital (m shrs)                                                  1,037                 opened in FY08 (to a total of 800). As for Aigle, management is
Mkt. Cap (HK$m/US$m)                                            26,287 / 3,367
                                                                                               looking to break even in 2H08, as the company continued to increase
Major Shareholders
    Li Ning & Associates (%)                                                35.6               its localisation (currently less than 50% locally sourced).
    GIC (%)                                                                 10.0               Maintain BUY. Despite the hike in production cost, impact on margin
    Fidelity International (%)                                               6.1               is likely to be limited, considering the continual improvement in ASP
    JP Morgan Chase (%)                                                      5.5
                                                                                               and benefits of stronger economies of scale as volume increases.
Free Float (%)                                                              42.9
Avg. Daily Vol.(‘000)                                                      2,853
                                                                                               Following acquisition of Double Happiness (which is expected to be
                                                                                               completed in end-January), the company remains in a strong cash
Earnings Rev :                    2008: n.a.                 2009: n.a.                        position (net cash estimated at over RMB800m), hence further M&A is
Consensus EPS :                   2008:HK$ 0.66              2009:HK$ 0.91                     still a possibility. Recent pullback, in our view, represents good
Variance vs Cons:                 2008: (1.02)%              2009: (4.03)%                     opportunity to accumulate the counter.          Our forecast is kept
Sector : Consumer                                                                              unchanged with FY07-09 earnings CAGR estimated at 39% and target
                                                                                               price at HK$30, premised at 1.25x PEG.
Bloomberg/Reuters Code: 2331 HK EQUITY/ 2331.HK
Principal Business: One of the leading sports brands in
China




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



Income Statement (RMB m)                                                Balance Sheet (RMB m)
FY Dec                      2006A       2007F      2008F      2009F     FY Dec                   2006A     2007F      2008F    2009F
Turnover                      3,181      4,368      6,189      7,738    Net Fixed Assets           157       371        462      533
Cost of Goods Sold          (1,672)    (2,292)    (3,269)    (4,079)    Invts in Assocs & JVs       12        12         12       12
Gross Profit                  1,509      2,076      2,920      3,658    Other LT Assets            107       101        315      309
Other Opg (Exp)/Inc         (1,106)    (1,482)    (2,061)    (2,519)    Cash & ST Invts            849       875        913    1,414
Operating Profit                403        593        859      1,139    Other Current Assets     1,040     1,329      1,755    2,056
Other Non Opg (Exp)/Inc            0          0          0          0   Total Assets             2,165     2,688      3,456    4,325
Associates & JV Inc                0          0          0          0
Net Interest (Exp)/Inc           (1)          0          3          9   ST Debt                      0         0          0        0
Exceptional Gain/(Loss)            0          0          0          0   Other Current Liab         688       907      1,230    1,517
Pre-tax Profit                  401        593        862      1,149    LT Debt                      0         0          0        0
Tax                           (106)      (152)      (216)      (287)    Other LT Liabilities        60        60         60       60
Minority Interest                  0        (1)       (16)       (20)   Shareholder’s Equity     1,417     1,721      2,166    2,748
Preference Dividend                0          0          0          0   Minority Interests           0         0          0        0
Net Profit                      295        440        630        842    Total Cap. & Liab.       2,165     2,688      3,456    4,325
Net profit before Except.       295        440        630        842

EBITDA                          438        673        982     1,281     Non-Cash Wkg. Cap          351          421    524       539
Sales Gth (%)                  29.8       37.3       41.7      25.0     Net Cash/(Debt)            849          875    913     1,414
EBITDA Gth (%)                 47.9       53.5       45.9      30.5
Opg Profit Gth (%)             48.3       47.4       44.7      32.6
Effective Tax Rate (%)         26.4       25.7       25.0      25.0
Cash Flow Statement (RMB m)                                             Rates & Ratios
FY Dec                      2006A       2007F      2008F      2009F     FY Dec                    2006A 2007F 2008F 2009F
Pre-Tax Profit                 401         593        862     1,149     Gross Margin (%)            47.4    47.5    47.2 47.3
Dep. & Amort.                   36          80        123        142    Opg Profit Margin (%)       12.7    13.6    13.9 14.7
Tax Paid                     (102)       (106)      (152)      (216)    Net Profit Margin (%)        9.3    10.1    10.2 10.9
Assoc. & JV Inc/(loss)            0          0           0          0   ROAE (%)                    23.0    28.4    32.9 34.9
Non-Cash Wkg.Cap.             (43)       (134)      (182)      (102)    ROA (%)                     15.7    18.1    20.5 21.6
Other Operating CF                1          0         (3)        (9)   ROCE (%)                    22.8    28.1    33.1 34.8
Net Operating CF               293         433        648        964    Div Payout Ratio (%)        39.9    39.9    39.9 39.9
Capital Exp.(net)             (98)       (280)      (200)      (200)    Interest Cover (x)         294.9 1,895.6 1,134.8 N/A
Other Invts.(net)                 0          0           0          0   Asset Turnover (x)           1.7     1.8     2.0  2.0
Invts in Assoc. & JV              0          0           0          0   Debtors Turn (days)         54.6    57.4    56.7 59.8
Div from Assoc & JV               0          0           0          0   Creditors Turn (days)       42.5    49.4    48.6 51.3
Other Investing CF              10          10      (209)         17    Inventory Turn (days)       70.0    61.2    51.6 45.9
Net Investing CF              (88)       (270)      (409)      (183)    Current Ratio (x)            2.7     2.4     2.2  2.3
Div Paid                      (88)       (137)      (201)      (280)    Quick Ratio (x)              2.2     2.0     1.8  1.9
Chg in Gross Debt                 0          0           0          0   Net Debt/Equity (X)        CASH CASH CASH CASH
Capital Issues                    9          0           0          0   Capex to Debt (%)           N/A     N/A     N/A  N/A
Other Financing CF              (9)          1           1          1   N.Cash/(Debt)PS (RMB)        0.9     0.9     1.0  1.5
Net Financing CF              (88)       (137)      (200)      (279)    Opg CFPS (RMB)              0.35    0.59    0.86 1.11
Net Cashflow                   118          25         38        501    Free CFPS (RMB)             0.20    0.16    0.47 0.80
Interim Income Statement (RMB m)                                        PE Chart (x)
FY Dec                    2H2005 1H2006 2H2006 1H2007
Turnover                    1,346.2 1,371.9 1,808.6 1,909.4
Cost of Goods Sold          (750.7) (703.5) (968.5) (979.0)              64.0
Gross Profit                  595.6   668.4   840.1   930.4
Other Oper. (Exp)/Inc       (437.2) (495.9) (610.1) (663.8)
                                                                         54.0
Operating Profit              158.3   172.5   230.0   266.6
Other Non Opg (Exp)/Inc          0.0     0.0     0.0     0.0
Associates & JV Inc              0.0     0.0     0.0     0.0             44.0
Net Interest (Exp)/Inc         (4.4)     0.8   (2.2)   (0.1)
Exceptional Gain/(Loss)          0.0     0.0     0.0     0.0
                                                                         34.0
Pre-tax Profit                153.9   173.3   227.8   266.5
Tax                           (44.4)  (43.4)  (62.7)  (67.9)
Minority Interest              (1.1)     0.0   (0.2)   (0.4)             24.0
Net Profit                    108.5   129.9   164.9   198.3
Net profit bef Except.        108.5   129.9   164.9   198.3
EBITDA                        170.8   190.5   247.9   306.4              14.0
Sales Gth (%)                     24      24      34      39                2004          2005           2006           2007
EBITDA Gth (%)                    68      52      45      61
Opg Profit Gth                    73      52      45      55
Gross Margins (%)               44.2    48.7    46.5    48.7
Opg Profit Margins (%)          11.8    12.6    12.7    14.0


Source: Company, DBS Vickers                                                                                                           2 of 3
Company Focus                                                                                                   Li Ning




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

                                                                                                                          3 of 3
 Thailand

 Company Focus
 DBS Group Research . Equity                                                                                                                           15 Jan 2008

 Buy Bt23.00 SET : 791.15
 Price Target : 12-month Bt 32.00
                                                                                                 Bangkok Expressway
 Reason for Report : Company Update
                                                                                                 Limited impact from Southern Outer Ring Road
 Potential Catalyst: Listing of TTW and rising toll rates                                            Story: BECL’s traffic volume grew 4.2% y-o-y in 2007,
 ANALYST                                                                                         despite falling 0.3% y-o-y and 0.8% q-o-q in 4Q07 following
 Chaipat Thanawattano +66 2657 7820                                                              the opening of the Southern Outer Ring Road.
 chaipatt@th.dbsvickers.com
                                                                                                     Point: The company is starting to feel the impact of some
                                                                                                 traffic lost to the Southern Ring Road, especially trucks from
 FORECASTS AND VALUATION
                                                                                                 stage one of the expressway. But this should be temporary.
 FY Dec (Btm)        2006A                           2007F             2008F             2009F
 Turnover             6,944                          7,237             8,077             9,166        Relevance: We are retaining our 12-month target price at
 EBITDA               5,592                          5,556             6,529             7,508   Bt32/share using sum-of-parts valuation, comprising Bt28 for
 Pre-tax Profit       2,216                          1,977             2,883             3,900
 Net Profit           1,543                          1,384             1,996             2,713   its core business and Bt4 for investments. BECL now offers 40%
 Net Pft (Pre Ex.)    1,543                          1,384             1,996             2,713   upside to our target price. Its dividend yield remains attractive
 EPS (Bt)                2.0                            1.8              2.6               3.5   at 4.7% for FY08F. Further upside to our valuation could come
 EPS Pre Ex. (Bt)        2.0                            1.8              2.6               3.5   from the listing of Thai Tap Water and the ETA compensation
 EPS Gth Pre Ex (%)        4                           (10)                44               36
 Diluted EPS (Bt)        2.0                            1.8              2.6               3.5   related to the dispute over toll-rate increases.
 Net DPS (Bt)            1.2                            1.2               1.1              1.6   Traffic volume continued to rise in 2007. BECL’s combined traffic
 BVPer Share (Bt)      20.2                           21.0              22.6              24.6
                                                                                                 volume for 4Q07 fell 0.3% y-o-y and 0.8% q-o-q to c. 984,800
 PE (X)                11.5                           12.8                8.9              6.5
 PE Pre Ex. (X)        11.5                           12.8               8.9               6.5   cars/day. (-0.5% for BECL only; +2.3% for NECL). Traffic growth eased
 P/Cash Flow (X)        4.8                             4.8              4.0               3.4   in 4Q07 compared to the first three quarters of the year due to (i)
 EV/EBITDA (X)           8.1                            7.9              6.2               4.9   high base in Sector D of the second stage expressway system
 Net Div Yield (%)       5.0                            5.2               4.7              6.8   following the opening of the new international airport in 4Q06, and
 P/Book Value (X)        1.1                            1.1              1.0               0.9   (ii) opening of Southern Outer Ring Road on November 15, 2007 for
 Net Debt/Equity (X)     1.8                            1.6              1.3               1.0   one-year test run. Full year traffic growth for 2007 was 4.2% y-o-y,
 ROAE (%)              10.1                             8.7             11.9              15.0   led by 6.2% increase in traffic volume on the NECL. 2007 traffic
 SHARE PRICE CHART                                                                               growth suggests that more motorists are using toll roads either to
           Bt
                                                                                                 save time or fuel cost because it outpaced growth of domestic car
                                                                                                 sales (-7.1% y-o-y in 11M07).
     25 . 00

     24 . 00                                                                                     Impact of Southern Outer Ring Road. The Expressway Authority of
     23 . 00                                                                                     Thailand (ETA) has opened the Southern Outer Ring Road for free for
     22 . 00                                                                                     one year until the installation of tollbooth systems by end 2008. It
     21 . 00                                                                                     connects to the Outer Ring Road between Suksawat and Bangplee
     20 . 00                                                                                     areas. This new road will draw some traffic away from the first stage
           Jan   - 07     Mar   - 07   Jun   - 07   Aug   - 07    Oct    - 07      Jan   - 08
                 Bangkok Expressway                              100    - Day MA
                                                                                                 expressway, especially between southern Bangkok and the eastern
                                                                                                 area. This will mainly affect tollbooths at Suksawat and Dao Kanong.
 AT A GLANCE                                                                                     Note that prior to the Southern Outer Ring Road, traffic volume at
 Issued Capital (m shrs)                                                            770          Suksawat tollbooth was already affected by the commencement of
 Mkt. Cap (Btm/US$m)                                                       17,710 / 595          the Industrial Ring Road in October 2006, which connects
 Major Shareholders                                                                              Samutprakarn area to southern Bangkok. But the impact on BECL
    Ch. Karnchang (%)                                                                 14.7       should be temporary given that the ETA will eventually charge for
    Bangkok Bank (%)                                                                   7.2       the use of the highway.
    HSBC (Singapore) Nominees Pte Ltd (%)                                              6.2
 Free Float (%)                                                                       65.4       Maintain profit forecast for FY07. Despite some impact from the
 Avg. Daily Vol.(‘000)                                                               1,122       Southern Outer Ring Road, we are retaining our profit forecast for
                                                                                                 FY07F at Bt1.384bn, a drop of 10.3% y-o-y. Our conservative
 Earnings Rev (%):                     2008: 0.0                  2009: 0.0
                                                                                                 assumptions for traffic volume for 2008-09 are also unchanged, at
 Consensus EPS (Bt):                   2008: 2.4                  2009: 3.0
 Variance vs Cons (%):                 2008: 7.1                  2009: 15.6
                                                                                                 4.3% and 2.1% y-o-y growth, respectively. The improving traffic
                                                                                                 volume coupled with an adjustment to toll rates and lower interest
 Sector : Industrials                                                                            expense are key earning drivers for FY08F.
 Bloomberg/Reuters Code: BECL TB/BECL.BK
 Principal Business: BECL operates expressways in
 Bangkok. It has a 30-year contract with the Expressway
 and Rapid Transit Authority of Thailand.


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


BECL: Average Traffic Volume                                                   NECL: Average Traffic Volume
 '000 cars per day                                                              '000 cars per day
 1,000                                                                          70

  950
                                                                                60
  900
                                                                                50
  850
                                                                                40
  800
                                                                                                                        2005           2006       2007
                                     2005           2006        2007
  750                                                                           30
         Jan   Feb Mar Apr May Jun    Jul    Aug Sep       Oct Nov Dec               Jan    Feb   Mar   Apr May Jun     Jul    Aug Sep     Oct Nov    Dec


Source: Company


BECL – Preview of quarterly result
FY Dec (Btm)                 4Q06       3Q07 4Q07F % chg % chg                       12M06 12M07F % chg                                         Comment
                                                    y-o-y q-o-q                                    y-o-y
Sales                        1,832     1,840         1,820       -0.6     -1.1         6,944        7,237        4.2     Traffic volume rose 4.2%
                                                                                                                               y-o-y in 2007; 4Q07
                                                                                                                         revenue was affected by
                                                                                                                         the Southern Outer Ring
                                                                                                                                             Road.
Gross Profit                 1,166     1,150         1,130       -3.1     -1.7         4,406        4,512        2.4
EBITDA                       1,460     1,245         1,454       -0.4     16.8         5,611        5,582        -0.5      Penalty for the issue of
                                                                                                                          bonds resulted in higher
                                                                                                                                         expenses.
EBIT                          892           667        876       -1.8     31.3         3,463        3,311        -4.4
Pretax Profit                 529           330        572        8.1     73.3         2,219        1,977       -10.9               Higher interest rate.
Norm Profit                   366           227        421       15.2     85.5         1,546        1,384       -10.5
Net Profit                    353           227        421       19.5     85.5         1,543        1,384       -10.3
EPS (Bt)                      0.46          0.30      0.55       19.5     85.5             2.00         1.80    -10.3
Gross Margin (%)              63.7          62.5      62.1                                 63.5         62.3
EBITDA Margin (%)             79.7          67.7      79.9                                 80.8         77.1
Net Profit Margin (%)         19.3          12.3      23.2                                 22.2         19.1
Source: Company, DBS Vickers


Peer Comparison
Company Name                                       Ticker         P/E (x)               P/BV (x)               EV/EBITDA (x)               ROE (%)
                                                              2007F 2008F            2007F 2008F               2007F 2008F              2007F 2008F
Bangkok Expressway Pub Co                      BECL TB         12.8      8.9           1.1          1.0         7.9           6.2        8.7         11.9
Hopewell Highway Infrastruct                   737 HK          12.5      12.6          1.7          1.6        11.2       10.3           15.6        12.6
Hopewell Holdings                                  54 HK       5.7       19.2          1.5          1.4         5.8       10.6           18.2        8.4
Jiangsu Express Co Ltd-H                       177 HK          24.8      19.0          2.7          2.6        13.2       11.5           11.4        14.4
Macquarie Infrastructure Grp                   MIG AU          20.9      19.1          1.1          1.1         9.5           9.1        8.7         9.1
                                                PLUS
Plus Expressways Bhd                                           14.1      13.8          3.3          3.0        11.4       10.7           23.3        21.3
                                                 MK
Yue Da Holdings Ltd                            629 HK          17.0      6.6           1.3          1.1         3.7           2.6        18.1        22.8
Zhejiang Expressway Co-H                       576 HK          19.7      17.9          3.4          3.2         6.4           6.3        17.0        18.3
Average                                                        15.9      14.7          2.0          1.9         8.6           8.5        15.2        14.7
Source: Bloomberg, DBS Vickers




                                                                                                                                                            2 of 4
Company Focus                                                                                          Bangkok Expressway


Income Statement (Btm)                                                 Balance Sheet (Btm)
FY Dec                      2006A      2007F     2008F       2009F     FY Dec                       2006A     2007F      2008F     2009F
Turnover                      6,944      7,237     8,077      9,166    Net Fixed Assets             42,127    40,566     38,150    35,667
Cost of Goods Sold          (2,116)    (2,236)   (2,421)    (2,489)    Invts in Assocs & JVs             0         0          0         0
Gross Profit                  4,828      5,002     5,656      6,677    Other LT Assets               3,046     3,246      3,446     3,646
Other Opg (Exp)/Inc         (1,424)    (1,745)   (1,620)    (1,736)    Cash & ST Invts                 549       222        343       392
Operating Profit              3,404      3,257     4,036      4,941    Other Current Assets             17        17         17        17
Other Non Opg (Exp)/Inc          39         28        35         40    Total Assets                 45,739    44,052     41,955    39,722
Associates & JV Inc               0          0         0          0
Net Interest (Exp)/Inc      (1,227)    (1,308)   (1,188)    (1,081)    ST Debt                       2,647     2,709      3,096     3,096
Exceptional Gain/(Loss)           0          0         0          0    Other Current Liab              446       444        591       741
Pre-tax Profit                2,216      1,977     2,883      3,900    LT Debt                      25,736    23,586     19,863    16,070
Tax                           (673)      (593)     (887)    (1,186)    Other LT Liabilities          1,382     1,172      1,038       890
Minority Interest                 0          0         0          0    Shareholder’s Equity         15,527    16,141     17,367    18,925
Preference Dividend               0          0         0          0    Minority Interests                0         0          0         0
Net Profit                    1,543      1,384     1,996      2,713    Total Cap. & Liab.           45,739    44,052     41,955    39,722
Net profit before Except.     1,543      1,384     1,996      2,713
EBITDA                        5,592      5,556     6,529      7,508
                                                                       Non-Cash Wkg. Cap              (429)    (427)    (574)    (724)
Sales Gth (%)                  3.4         4.2     11.6        13.5    Net Cash/(Debt)             (27,834) (26,072) (22,616) (18,774)
EBITDA Gth (%)                 2.3       (0.6)     17.5        15.0
Operating Profit Gth (%)       0.3       (4.3)     23.9        22.4
Effective Tax Rate (%)        30.4       30.0      30.8        30.4
Cash Flow Statement (Btm)                                              Rates & Ratios
FY Dec                      2006A       2007F     2008F      2009F     FY Dec                       2006A     2007F      2008F     2009F
Pre-Tax Profit                2,216      1,977     2,883      3,900    Gross Margin (%)                69.5     69.1       70.0       72.8
Dep. & Amort.                 2,149      2,271     2,457      2,527    Operating Margin (%)            49.0     45.0       50.0       53.9
Tax Paid                      (673)      (593)     (887)    (1,186)    Net Profit Margin (%)           22.2     19.1       24.7       29.6
Assoc. & JV Inc/(loss)             0         0          0          0   ROAE (%)                        10.1      8.7       11.9       15.0
Chg in Wkg.Cap.               (507)      (702)     (553)      (650)    ROA (%)                          3.3      3.1        4.6        6.6
Other Operating CF              422        490       566        652    ROCE (%)                         5.4      5.3        6.8        8.9
Net Operating CF              3,607      3,442     4,467      5,242    Div Payout Ratio (%)            57.9     66.9       41.6       44.1
Capital Exp.(net)               (33)     (710)       (41)       (45)   Interest Cover (x)               2.8      2.5        3.4        4.6
Other Invts.(net)             (946)      (200)     (200)      (200)    Asset Turnover (x)               0.2      0.2        0.2        0.2
Invts in Assoc. & JV               0         0          0          0   Debtors Turn (avg days)         N/A      N/A        N/A        N/A
Div from Assoc & JV                0         0          0          0   Creditors Turn (avg days)       19.8     20.4       22.0       20.5
Other Investing CF                 0         0          0          0   Inventory Turn (avg days)       N/A      N/A        N/A        N/A
Net Investing CF              (979)      (910)     (241)      (245)    Current Ratio (x)                0.2      0.1        0.1        0.1
Div Paid                      (770)      (770)     (770)    (1,155)    Quick Ratio (x)                  0.2      0.1        0.1        0.1
Chg in Gross Debt           (1,587)    (2,088)   (3,336)    (3,793)    Net Debt/Equity (X)              1.8      1.6        1.3        1.0
Capital Issues                     0         0          0          0   Capex to Debt (%)                0.1      2.7        0.2        0.2
Other Financing CF                 0         0          0          0   N.Cash/(Debt)PS (Bt)          (36.1)   (33.9)     (29.4)     (24.4)
Net Financing CF            (2,357)    (2,858)   (4,106)    (4,948)    Opg CFPS (Bt)                    5.3      5.4        6.5        7.7
Net Cashflow                    271      (326)       120          50   Free CFPS (Bt)                   4.6      3.5        5.7        6.8
Quarterly / Interim Income Statement (Btm)                             PE Chart (x)
FY Dec                     4Q2006 1Q2007 2Q2007 3Q2007                  16.0
Turnover                     1,832      1,814     1,764      1,840      15.0
Cost of Goods Sold           (665)      (680)     (665)      (690)
                                                                        14.0
Gross Profit                 1,166      1,134     1,099      1,150
Other Oper. (Exp)/Inc        (294)      (244)     (258)      (488)      13.0
EBIT                           872        890       841        661      12.0
Other Non Opg (Exp)/Inc          2          2        22          2
                                                                        11.0
Associates & JV Inc              0          0         0          0
Net Interest (Exp)/Inc       (358)      (341)     (339)      (334)      10.0
Exceptional Gain/(Loss)          0          0         0          0       9.0
Pre-tax Profit                 516        551       524        330
Tax                          (163)      (172)     (167)      (103)       8.0
Minority Interest                0          0         0          0       7.0
Net Profit                     353        378       357        227         2004         2005          2006        2007            2008
Net profit bef Except.         353        378       357        227

EBITDA                       1,442      1,457     1,414      1,241
Sales Gth (%)                  5.8       (1.0)     (2.7)        4.3
EBITDA Gth (%)                 3.0         1.0     (3.0)     (12.2)
EBIT Gth (%)                   3.7         2.0     (5.5)     (21.4)
Gross Margins (%)             63.7       62.5      62.3        62.5
EBIT Margins (%)              47.6       49.1      47.7        35.9
Source: Company, DBS Vickers

                                                                                                                                         3 of 4
Company Focus                                                                                          Bangkok Expressway




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.

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 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 Securities (Thailand) – 989 Siam Tower, 9th ,14th –15th Floor,
                                                                                                                                  4 of 4
                                   Rama1 Road, Pathumwan, Bangkok Thailand 10330
                                        Tel. 66 (0) 2657 7831, Fax: 66 (0) 2658 1269
 Thailand

 Company Focus
 DBS Group Research . Equity                                                                                                                                      15 Jan 2008

 BUY Bt26.25                                             SET : 791.15

 Price Target : 12-Month Bt 33.50 (Prev Bt 34.50)
                                                                                                          TISCO Bank
 Reason for Report : Company visit
                                                                                                          Stronger hire purchase loan growth is key driver
 Potential Catalyst: (i) Stronger HP loan growth of 15.0% in                                                  Story: TISCO is targeting 15-16% loan growth for FY08, close to
 FY08F in anticipation of strengthening Thai economy and                                                  FY07 level, with continued focus on growing hire purchase loans. It
 consumer confidence after general election, and (ii) maintain                                            aims to expand the used car business to 20% of total hire purchase
 high dividend payout, (iii) high ROE of >15.0%.                                                          loans in FY08 from 17% in FY07, and expects 3.6% net interest
                                                                                                          margin for the year.
 ANALYST
 Sugittra Kongkhajornkidsuk +662 657 7825                                                                     Point: We lowered FY08F and FY09F net profit by 9.0% and
 sugittrak@th.dbsvickers.com                                                                              7.1%, respectively, to reflect higher LLP in line with higher loan
                                                                                                          growth and minor adjustments in other expenses. TISCO’s prospects
                                                                                                          remain strong. Despite rising competition in the hire purchase
 FORECASTS AND VALUATION                                                                                  segment, it should be able to maintain high loan growth in FY08F
 FY Dec (Bt m)      2006A                                    2007F               2008F           2009F    led by its strong penetration rate in the new car hire purchase
 Pre-prov. Profit    1,697                                   2,589               3,206           3,659    market, at c.8.0% for the next three years due to its strong
 Net Profit          1,546                                   1,651               1,870           2,200
                                                                                                          relationship with Thai car dealers.
 Net Pft (Pre Ex.)   1,546                                   1,651               1,870           2,200
 EPS (Bt)               2.1                                     2.3                 2.6            3.0        Relevance: Maintain BUY. Our new target price is Bt33.5, based
 EPS Pre Ex. (Bt)       2.1                                     2.3                 2.6            3.0
                                                                                                          on 1.9x 2008 P/BV (8% long-term growth; 15% ROE). TISCO now
 EPS Gth Pre Ex (%)    (14)                                       7                  13              18
 Diluted EPS (Bt)       2.1                                     2.3                 2.6            3.0    offers 27.6% upside to our new target price, and attractive dividend
 PE Pre Ex. (X)       12.3                                    11.6                10.2             8.7    yield of 7.6% for FY08F.
 Net DPS (Bt)           0.0                                     2.0                 2.0             2.3
 Div Yield (%)          0.0                                     7.6                 7.6            8.6    TISCO targets 15.0% loan growth for FY08. This is premised on stronger
 ROAE Pre Ex. (%)     12.4                                    13.4                14.9            16.7    Thai economy and consumer confidence after the general election,
 ROAE (%)             12.4                                    13.4                14.9            16.7    especially the hire purchase segment. TISCO will continue to focus on
 ROA (%)                1.9                                    1.8                 1.7             1.8    growing hire purchase loans, and aims to expand used car loans to 20%
 BV Per Share (Bt)       17                                      17                  18              19   of total hire purchase loans for FY08, from 17.3% in 2007. Net loans is
 RNAV per shr (Bt)     N/A                                     N/A                 N/A             N/A    expected to grow 15% in FY08, led by 18% hire purchase loan growth.
 P/Book Value (x)       1.6                                     1.5                 1.5            1.4
                                                                                                          3.6% NIM for FY08F. TISCO expects NIM of 3.6% for FY08F, lower than
 SHARE PRICE CHART                                                                                        3.9% for FY07 due to full impact from a change in accounting
           Bt                                                                                             recognition of initial commission and direct expenses. These are now
     34 . 00
                                                                                                          amortized using the effective interest rate method, deducted from
     32 . 00
     30 . 00                                                                                              interest income over the installment period from booked as expenses
     28 . 00                                                                                              when they occur. Hence, effective loan yield narrowed by c. 40 bps
     26 . 00
     24 . 00
                                                                                                          within two years. We expect the bank to register 3.8% NIM for FY08F.
     22 . 00
     20 . 00                                                                                              Revert to normal LLP in FY08F. The bank booked net loan loss provision
     18 . 00
           Jan   - 07         Mar    - 07   Jun   - 07     Aug   - 07         Oct   - 07   Jan   - 08
                                                                                                          (LLP) of Bt699m (Bt723m LLP and Bt24m LLP write-back) in 2007, higher
                        Tisco Bank                                      100   - Day MA                    than the Bt50m LLP reversed in 2006 (Bt549m LLP and Bt599m LLP
                                                                                                          write-back). TISCO reclassified losses from repossession to LLP; it was
 AT A GLANCE                                                                                              previously booked as other expenses in FY06 and FY07. For FY08F, we
 Issued Capital (m shrs)                                                                      727         do not expect the bank to book LLP reversal revenue, and there should
 Mkt. Cap (Btm/US$m)                                                                 19,094 / 576         be normal LLP in line with business growth. Hence, we raised FY08F LLP
 Major Shareholders                                                                                       assumption to Bt1,000m, from Bt600m.
    SET (%)                                                                                   12.6
    Thai NVDR (%)                                                                              6.7        Re-submits restructuring plan to the BoT in 2Q08. The Mof tuned down
    Chase Nominees Limited 42 (%)                                                              6.5        TISCO’s restructuring plan in January 2007, but the company will re-
 Free Float (%)                                                                               81.7        submit in 2Q08 after the new Financial Institutions Business Act
 Avg. Daily Vol.(‘000)                                                                       2,568
                                                                                                          becomes effective. It expects an approval in 4Q08. Under the plan,
 Earnings Rev (%):                          2008: (9.0)                       2009: (7.1)                 TISCO Corporation Plc. will set up a holding company as the parent
 Consensus EPS (Bt):                        2008: 2.6                         2009: 2.9                   company of TISCO Group, instead of TISCO Bank. TISCO Corporation
 Variance vs Cons (%):                      2008: (0.6)                       2009: 5.3                   will hold shares in the subsidiaries, including TISCO Bank. The
                                                                                                          restructuring will benefit TISCO Group as follows: (i) reduced risks, (ii)
 Sector : Banking                                                                                         lower capital requirement, and (iii) better business opportunities.
 Bloomberg/Reuters Code: TISCO TB/TISC.BK
 Principal Business: Banking and financial service


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


Income Statement (Bt m)                                             Balance Sheet (Bt m)
FY Dec                        2006A     2007F    2008F    2009F     FY Dec                         2006A        2007F      2008F        2009F
Net Interest Income          2,806        3,488 3,988       4,599   Cash/Bank Balance                 210          440        291          326
Non-Interest Income          1,838        2,040 2,393       2,623   Government Securities           1,718        2,400      4,660        5,216
Operating Income             4,644        5,528 6,381       7,222   Inter Bank Assets               1,024        1,050      2,330        2,608
Operating Expenses         (2,947)      (2,939) (3,174)   (3,563)   Total Net Loans & Advs.        72,658       85,176     97,577      109,705
Pre-provision Profit         1,697        2,589 3,206       3,659   Investment                      4,393        5,781      6,991        7,825
Provisions                       50       (699) (1,000)   (1,000)   Associates                          0            0          0            0
Associates                        0           0       0         0   Fixed Assets                    1,603        1,563      1,563        1,563
Exceptionals                      0           0       0         0   Goodwill                                         0          0            0
Pre-tax Profit               2,203        2,289 2,566       3,019   Other Assets                    3,175        2,544      3,097        3,166
Taxation                     (633)        (638)   (697)     (820)   Total Assets                   84,781       98,953    116,509      130,410
Minority Interests             (24)           0       0         0   Customer Deposits              40,568       35,714     58,095       65,454
Preference Dividend               0           0       0         0   Inter Bank Deposits             2,157        5,852      3,112        3,506
Net Profit                   1,546        1,651 1,870       2,200   Debts/Borrowings               26,082       40,750     36,932       41,610
Net Profit bef Except        1,546        1,651 1,870       2,200   Others                          3,292        4,263      5,602        6,312
                                                                    Minorities                        427            0          0            0
                                                                    Shareholders' Funds            12,256       12,374     12,768       13,527
                                                                    Total Liab& S/H’s Funds        84,781       98,953    116,509      130,410


Profitability & Efficiency Ratios (%)                               Financial Stability Measures (%)
FY Dec                     2006A        2007F    2008F    2009F     FY Dec                          2006A       2007F       2008F       2009F
Margins, Costs & Efficiency                                         Balance Sheet Structure
Yld. On Earnings Assets        7.27       7.70     6.69     6.62    Loan-to-Deposit Ratio           186.0        246.3      174.5        174.9
Avg Cost Of Funds              4.56       4.57     3.49     3.41    Net Loans / Total Assets         85.7         86.1       83.8         84.1
Spread                         2.71       3.12     3.20     3.22    Investment / Total Assets         5.2          5.8        6.0          6.0
Net Interest Margin            3.57       3.87     3.74     3.74    Cust . Dep./Int. Bear. Liab.     59.0         43.4       59.2         59.2
Cost-to-Income Ratio           57.8       49.6     47.1     47.0    Interbank Dep / Int. Bear.        3.1          7.1        3.2          3.2
Employees ( Year End)         1,999                                 Asset Quality
Effective Tax Rate             28.8       27.9     27.1     27.1    NPL / Total Gross Loans             4.6        4.3           3.6       3.2
Business Mix                                                        NPL / Total Assets                  4.1        3.8           3.1       2.8
Net Int. Inc / Opg Inc.        60.4       63.1     62.5     63.7    Capital Strength
Non-Int. Inc / Opg inc.        39.6       36.9     37.5     36.3    Total CAR                          15.0       12.8          11.1      10.3
Fee Inc / Opg Income           33.1       33.0     32.8     32.5    Tier-1 CAR                         13.8       11.8          10.3       9.5
Oth Non-Int Inc/Opg             6.5        4.0      4.7      3.8
                                                                    Growth
Inc
Profitability                                                       Total Net Loans                     17          17           15         12
ROAE Pre Ex.                   12.4       13.4     14.9     16.7    Customer Deposits                   18        (12)           63         13
ROAE                           12.4       13.4     14.9     16.7
ROA Pre Ex.                     2.0        1.8      1.7      1.8
ROA                             1.9        1.8      1.7      1.8
Quarterly / Interim Income Statement (Btm)                          PE Chart (x)
FY Dec                    1Q2007 2Q2007 3Q2007 4Q2007
Net Interest Income             756       885       885      962     15 .0
Non-Interest Income             402       474       572      593
Operating Income              1,158     1,359     1,457    1,555     13 .0
Operating Expenses            (633)     (712)     (753)    (841)
Pre-Provision Profit            525       646       704      714     11 .0
Provisions                    (129)       (86)    (249)    (235)
Associates                        0          0        0        0       9.0
Exceptionals                      0          0        0        0
Pretax Profit                   495       597       606      590       7.0
Taxation                      (139)     (159)     (166)    (173)
Minority Interests                0          0        0        0       5.0
Net Profit                      356       438       440      417         2004            2005            2006            2007

Source: Company, DBS Vickers




                                                                                                                                        2 of 3
Company Focus                                                                                                        Tisco Bank




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.

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 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 Securities (Thailand) – 989 Siam Tower, 9th ,14th –15th Floor,
                                   Rama1 Road, Pathumwan, Bangkok Thailand 10330
                                                                                                                                  3 of 3
                                        Tel. 66 (0) 2657 7831, Fax: 66 (0) 2658 1269
Thailand

Market Focus
DBS Group Research . Equity                                                                                                          15 January 2008


Thailand Companies
9th January 2008                                            Post Conference Notes
The Ritz Carlton                                            Key Takeaways from the Pulse of Asia Singapore Conference

                                                              We hosted five listed companies from Thailand at DBSV’s
                                                              Pulse of Asia Conference Day held at The Ritz Carlton
                                                              Hotel in Singapore on 9 January 2008. All the companies
                                                              received positive responses for both one-on-one meetings
                                                              and group presentation session. The companies are from
                                                              different industries, and offered investors diverse
                                                              investment alternatives ranging from industrial property
                                                              to residential property, electronics export, oil & gas, and
                                                              container shipping.
                                                              In this piece, we highlight the key takeaways for each
                                                              company. We maintain our positive view and BUY ratings
                                                              for these companies. We also append an information
                                                              pack containing a write-up of each company’s business,
                                                              prospects and valuation that was distributed to our
                                                              clients who attended the events.

Contributors to this piece:

Chanpen Sirithanarattanakul            66 0 2657 7824       PARTICIPATING COMPANIES
chanpens@th.dbsvickers.com                                  Company                    Currency   Share Price    Price   Mkt Cap   Rating   FY08     FY08
                                                                                                  (11 Jan 08)   Target   (US$m)             PE (x)   PE (x)

Vichitr Kuladejkhuna                   66 0 2657 7826
vichitrk@th.dbsvickers.com                                  Thailand
                                                            Amata Corporation            THB        17.50       20.49      554      BUY     13.2     13.2
Chaipat Thanawattano                   66 0 2657 7820
chaipatt@th.dbsvickers.com                                  Quality Houses               THB         2.10        2.57      455      BUY     13.0     13.0


Parin Kitchatornpitak                  66 0 26577 826
parink@th.dbsvickers.com                                    Delta Electronics            THB        21.30       28.62      789      BUY      8.2      8.2
                                                            (Thailand)

                                                            PTT                          THB        368.00       454     34,699     BUY     10.7     10.7
Thailand Research
research@dbsvickers.com
                                                            Regional Container Lines     THB        28.75       35.75      635      BUY      7.0      7.0



                                                            Source: DBS Vickers




www.dbsvickers.com
Refer to important disclosures at the end of this report.
Market Focus                                                                             Post Conference Notes



THAILAND
Amata Corporation (AMATA BK, BUY, TP Bt20.49)
Khun Varaporn Vatcharanukroh (Treasurer) and Khun Songchom Tangnawapan (VP, Land and Sales
Operation) represented AMATA at the Pulse of Asia Singapore 2008 conference. Management remained
positive about the company’s long-term prospects in Thailand and Vietnam, both of which are preferred
foreign direct investment (FDI) destinations especially among Japanese investors. Key takeaways are as
follows:
    •   FDI in Thailand remains strong. Despite the political instability in Thailand, AMATA’s land sales
        last year totaled 1,719 rais (1 rai = 1,600 sqm). This is up sharply from 547 rais sold in 2006.
        AMATA has yet to release its forecast for 2008, citing that it was premature to do so. The political
        uncertainty is likely to remain for a while until the new government takes office, and is likely to
        hurt sentiment and domestic consumption in the near term. But management believes FDI should
        remain on an upward trend. Net applications for the Board of Investment (BOI) privileges, a
        leading indicator for FDI, grew 33% y-o-y to Bt655.8bn last year. Showing strongest growth was
        the metal processing industry, which also included the vehicle sector. By nationality, Japanese and
        Europeans remained key direct investors in Thailand.
    •   Vietnam listing. AMATA plans to list Amata Vietnam, its 62.9% owned subsidiary on the Vietnam
        Stock Exchange possibly by mid 2008. The company has appointed a financial advisor for the
        listing, and details should be available soon.
    •   Volatile earnings. AMATA’s current revenue is highly dependent on industrial land sales, which
        made up 74% of group revenue in 9M07. This implies its earnings are volatile. Hence, AMATA is
        looking to increase its recurring income portion (particularly rental and utilities income) to create
        a more balanced revenue portfolio. It is targeting for 50:50 revenue from development and
        recurring income by 2012.


Quality Houses (QH BK, BUY, TP Bt2.57)
Khun Suwanna Buddhaprasart (Senior Executive Vice President) and Khun Somchai Warunpantulak (Vice
President – Financial & Accounting Department) represented QH. Management remains upbeat about the
company’s prospects for the next few years. Key takeaways are as follows:
    •   Housing sales. Management expects its housing sales to grow c. 20% p.a. over the next few years.
        This would be supported by the continued launch of new projects in strategic areas. QH’s
        successful expansion into the mid-priced market via the launch of products under Casa Ville and
        Casa City brands has been a major contributor to the strong sales growth in the past year. And the
        Casa brands should continue to be a major growth driver for the company for the next few years.
    •   Turning serviced apartments into residential condo for sale. Management highlighted its plan to
        turn its serviced apartments that is under construction, into residential condominiums for sale,
        given strong demand for luxury condominiums in prime locations. The project is located in Soi
        Langsuan, in the Central Business District of Bangkok. Hence, management expects sales to be
        good. Based on an estimated average selling price of Bt200,000 per sqm, the project is expected to
        generate Bt3bn revenue.
    •   Injecting more assets into QHPF. QH plans to inject four more assets into Quality Houses Property
        Fund (QHPF). They include three serviced apartments on Petchburi, Sukhumvit, and Saladaeng
        Roads and one office building on Sathorn Road. The assets are expected to generate about Bt3bn
        revenue. QH plans to invest one-third in the asset, which means net proceeds would be c. Bt2bn.




                                                                                                                2 of 5
Market Focus                                                                             Post Conference Notes



Delta Electronics (DELTA BK, BUY, TP Bt28.62)
Khun Kulwadee Kawayawong (Investor Relation Manager) represented DELTA at the conference. Besides
talking about the synergies of Delta Thailand and Delta Taiwan, management highlighted the turnaround
of wholly-owned Delta Energy System (DES), which will be the group’s major growth driver going forward.
Key takeaways are as follows:
    •   DES to be a key growth driver. Management expects DES’ sales to continue to grow at 15% p.a.
        over the next few years. DELTA will also try to climb up the value chain by focusing on higher
        value-added products that command higher margins, and dropping products that yield very low
        margins. This would allow the company to expand its gross margin and bottom line.
    •   Diversified revenue base. DELTA’s revenue is diversified, with Europe accounting for 35% of
        group revenue in 1H07, followed by Asia Pacific 33% and the U.S. 32%. The acquisition of DES has
        boosted sales in Europe and also reduced its exposure to the U.S. market in the past few years.
        The U.S. pie should continue to shrink, given that DES will focus more on growth areas such as
        Europe and Asia, particularly EMEA and India, in the next few years.
    •   A growth company with high dividend yield. DELTA’s balance sheet remains strong with net cash
        position of Bt6.8bn, or US$200m at end of Sep 2007. The stock also offers generous 9% dividend
        yield at the current price, one of the highest yields on the SET.


PTT (PTT TB, BUY, TP: Bt454)
Penchun Jarikasem (Executive VP - Corp Finance), Pannalin Mahawongtikul (VP - Investor Relations), and
Sarutt Sombatsiri (Investor Relations Officer) represented PTT at the conference. Key takeaways are as
follows:
    •   Impact of pipeline transfer. Most of the questions from investors were focused on the impact of
        the recent court instruction to PTT to return part of its natural gas pipeline network to the
        government. Management reiterated that the proposed transfer plan and pipeline rental charge
        were in accordance with the court order. Although the issue remains unresolved, investors had
        the opportunity to ask detailed questions and get management’s view on the issue, which might
        ease some concerns. We maintain our view that the impact on PTT’s valuations would be limited
        at Bt2-8 per share (our current target price factors in the impact at Bt4 per share).
    •   Impact of government’s energy policy. Management stated that there had been minimum
        government intervention in Thailand’s oil & gas industry. Apart from the cap on domestic LPG
        price and the regulated natural pipeline tariff, domestic oil prices in Thailand are unregulated.
        However, soaring oil prices sometime prevent PTT from raising domestic petrol prices to match
        regional prices, which resulted in narrower oil trading margins. Nonetheless, this has only limited
        impact as oil trading account for only 5-6% of group EBITDA. Management believes there is little
        risk of the new government altering the plan to float domestic LPG price and the implementation
        of new pipeline tariff.
    •   Reiterate strategic roadmap. Management reiterated PTT’s strategic plans to (i) continue to
        expand core natural gas business to meet rising domestic demand, (ii) expand its overseas
        foothold via PTTEP’s growing petroleum exploration portfolio, (iii) expand existing refining
        capacity and integrate the group’s refining portfolio to fully realise synergistic benefits, and (iv)
        horizontal expansion of upstream petrochemical capacity as well as increasing downward
        integration into more value-added products to reduce cyclical volatility of chemical commodities.




                                                                                                                3 of 5
Market Focus                                                                           Post Conference Notes



Regional Container Lines (RCL TB, BUY, TP Bt35.75)
Mr. Kenneth Chiu (Executive Vice President - Support) represented Regional Container Lines at conference.
Mr. Chiu presented RCL business model, and an update on recent developments and prospects for the
container shipping industry. Key takeaways are as follows:
    •   Freight rates for smaller vessels should remain positive. Management remains optimistic about
        the container freight rates, especially for smaller vessel. Although additional capacity will
        gradually flow into the market from now until 2011, most are large vessels with capacities of
        more than 4,000 TEUs. Hence, freight rates for smaller vessels should be at least maintained at
        2007 levels. RCL still expects global demand/supply balance for 2007-08 to remain healthy.
    •   Demand from Europe is underestimated. Management also mentioned that the market was
        underestimating demand for cargo space on ships leaving Asia for Europe. The head-haul
        utilization rate for Far East to North Europe had been running at >90% in 2007. This should also
        be the key driver for freight rates going forward. The company expects average freight rate to
        increase by 2-3% p.a. in 2008-09.
    •   Rising oil price remains the key concern. Management is concerned about the continued rise of
        bunker oil price, which would affect container shipping companies. Meanwhile, the surcharge for
        oil price has been raised at a slower rate than the bunker oil price.
    •   Impact of slower US economy should be offset by demand from Europe. The adverse impact of a
        U.S. economic slowdown on the container shipping industry should be somewhat offset by strong
        demand from Europe. In addition, port congestion is likely to become more of an issue during
        2008-09. Management reiterated that freight rates for Asia-Europe routes are likely to increase at
        double-digit rates.




                                                                                                             4 of 5
       Market Focus                                                                                          Post Conference Notes




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.

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
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 Securities (Thailand) – 989 Siam Tower, 9th ,14th –15th Floor,
                                        Rama1 Road, Pathumwan, Bangkok Thailand 10330                                                       5 of 5
                                             Tel. 66 (0) 2657 7831, Fax: 66 (0) 2658 1269

								
To top