Market UpdateJanuary 10, 2013

Strong outlook on LSX’s second anniversary The Lao Securities Exchange (LSX) will reach its second anniversary on January 11, 2013. The market has now surpassed US$1bn in market cap, and is gradually growing its domestic and regional investor base. Returns to the market have been strong, and we expect this will continue into 2013, while some key hurdles in the LSX’s expansion should be addressed this year.

Expecting strong returns to continue We calculate that an investor making a market cap weighted investment in the LSX on the first day of trading, January 11, 2011 would have returned 34.8% as of January 8, 2013, including capital gains and dividends. We forecast that these strong returns will continue this year, with an investor making a market cap weighted investment in the LSX on January 8, 2013 to return 63.9% over the next 18 months.

Several key developments coming in 2013 The market is expected to see several key developments in 2013; 1) global custodians are likely to enter the market this year, 2) the exchange plans to move to continuous time trading after a third stock is listed on the market, while 3) liquidity should be improved with several new listings planned.

New listings may broaden appeal of the marketThe LSX reports that 8 firms are planning to list over the next two years, which will create significantly more depth and breadth for the market. They comprise; two telecoms, 1) LTC and 2) ETL, 3) conglomerate Laos World Group, 4) oil distributor Petrotrade, 5) coffee producer and exporter Dao Coffee, 6) cassava producer Laos Indochina Group, 7) Laos Cement Industry and 8) Laos Development Bank.

Expecting strong growth for BCEL, EDL-GenThe two listed stocks on the LSX, Bank Pour Le Commerce Exterieur (BCEL) and EDL-Generation (EDL-Gen) have strong growth prospects for 2013-2014, and are market leaders in their respective fields of commercial banking and energy generation. However, the two still trade at undemanding valuations versus the region in part because of structural issues, including the lack of global custodians and low liquidity in the market. We target over 40% upside for the shares prices of both, while dividend yields remain strong. See the summaries on both companies at the end of this report for more detail.

Lao Securities Exchange

Indochina Research

Value % chg

BCEL 7,900 -1.25

EDL-Gen 5,900 0.00

LSX 1,241.2 -0.16

Source: Bloomberg

Valuation P/E P/B

BCEL 4.3 0.8

EDL-Gen 7.2 1.4

LSX 6.8 1.3

Source: Bloomberg, KT Zmico estimates

Market Cap (US$mn)

BCEL 136

EDL-Gen 915

LSX 1,049

Source: Bloomberg

Graeme Cunningham, CFA Head of Indochina Researchgraemec@ktzmico.com66 (0) 2695 - 5942

Patcharin Karsemarnuntana Indochina Energypatcharink@ktzmico.com66 (0) 2695 - 5837

Prapharas Nonthapiboon Indochina Banksprapharasn@ktzmico.com66 (0) 2695 - 5872

REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES

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January 10, 2013

REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES

Strong total shareholder returns since inceptionThe Laos Securities Exchange (LSX) will reach its second anniversary on January 11, 2013. Figure 1 shows the strong historical total returns to shareholders for the two stocks in the index, the largest commercial bank, Bank Pour Le Commerce Exterieur Du Laos (BCEL) and the leading electricity generation company, EDL-Gen.

EDL-Gen returns 42.3%, BCEL returns 13.9% since first trading dayEDL-Gen has enjoyed both strong capital gains and a high dividend payout, with the stock gaining 27.8% since its first trading day and yielding 14.5% from its listing to the most recent H1/12 payout, for a total TSR of 42.3%.

BCEL’s absolute share price performance has been broadly flat over the period, returning negative 1.3% from the first day of trading until January 8, 2013. However, this has been offset somewhat by a strong dividend payout, with the total yield since the first trading day including the last cash payout for H1/12 at 15.2%.

Market cap weighted investment returns 34.8%An investor with a market cap weighted portfolio of EDL and BCEL on the first day of trading on the LSX would have seen a total shareholder return of 34.8% as of January 8, 2013.

LAK EDL BCEL LSX

Share price at January 11, 2011 4,615 8,000

Share price at January 8, 2013 5,900 7,900

Capital Gain 27.8% -1.3%

Dividend/share 2011 498 777

Dividend/share H1/12 170 436

Total dividends 668 1,213

Dividend Yield 14.5% 15.2%

Total Shareholder Return (TSR) 42.3% 13.9%

Market cap at January 11, 2011 (LAK BN) 3,061,809 1,092,621 4,154,430

Weighting 73.7% 26.3% 100.0%

Market cap weighted TSR 34.8%

Figure 1: Historical return

Source: Lao Securities Exchange, KT Zmico estimates

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January 10, 2013Indochina Research

REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES

Expecting strong returns to continue in 2013We expect that strong market returns will continue in 2013, as shown in Figure 2. We forecast a strong gain in EDL-Gen this year, with an implied capital gain of 49.6% to our target price of LAK8,825, and a yield of 14.0% including the H2/12 dividend, for a total shareholder return of 63.5%.

Forecasting TSR of 63.9% for a market cap weighted portfolio Our target price for BCEL of LAK11,400, implies a capital gain of 44.3%. We also expect the company will maintain a strong dividend payout; investors can still get the H2/12 cash dividend, and adding the full year 2013 dividend, we forecast a yield of 22.3%, for a total shareholder return of 66.6%. Weighting the returns to the two stocks by market capitalization as of January 8, 2013, we forecast the total expected return to the market to be 63.9%.

Eight major new listings expected over next 24 monthsAlthough both BCEL and EDL-Gen are expected to remain strong in 2013, having just two listings on the LSX leaves the market with a considerable lack of breadth. This problem is expected to be alleviated with the expected listing of up to eight companies in the next 24 months, including: 1) coffee producer and exporter Dao Coffee, 2) telecom ETL, 3) Laos Cement Industry, 4) Laos Development Bank, 5) cassava producer Laos Indochina Group, 6) Laos Telecom 7) diversified conglomerate Laos World Group, and 8) oil distributor Petrotrade. A brief summary of each of the companies is shown in Figure 3.

Source: Lao Securities Exchange, KT Zmico estimates

Figure 2: Expected return

LAK EDL BCEL LSX

Share price at January 8, 2013 5,900 7,900

12 month target share price 8,825 11,400

Capital gain at target price 49.6% 44.3%

Dividend/share 2H/12 295 463

Dividend/share 2013 529 1,297

Total dividends 824 1,760

Forecast Yield 14.0% 22.3%

Total Forecast Shareholder Return 63.5% 66.6%

Market cap at January 8, 2012 (LAK BN) 7,237,040 1,078,966 8,316,007

Weighting 86.9% 13.1%

Market cap weighted return 63.9%

4REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES

January 10, 2013

Company Sector Detail

Dao Coffee Consumer Dao Coffee is the coffee production and export business of diversified conglomerate Dao Heuang Group. The company sells ground and instant coffees, as well as fresh sealed coffee beans.

ETL Telecoms Enterprise of Telecommunications Lao (ETL) is a wholly government-owned telecom, with the third largest mobile subscriber base in the country (560k subscribers as of end 2011), and it also operates a small fixed line (18k subscribers) and internet (3.5k subscribers) service.

Laos Airlines Airlines Laos Airlines is the country’s government-owned national airline, with domestic and regional flights, reaching as far as South Korea, China and Singapore. The airline currently has a fleet of over 12 aircraft, has additional planes on order and continues to expand its routes to meet growing demand.

Lao Cement Industry

Materials Lao Cement Industry is the largest cement producer in Laos, with an output of 700k-800k tonnes per year (about half the country’s total 1.5 tonnes in production) from a factory with a total capacity of 1mn tonnes, and currently targets doubling its existing capacity.

Lao Development Bank

Financials Laos Development Bank is the country’s second largest commercial bank, with 18 branches and 51 service units, and focusses on lending to small to medium enterprises. The bank had US$500mn in loans and US$600mn in deposits as of end 2011.

Lao Indochina Group

Agriculture Lao Indochina Group produces cassava, and has agreements with farmers for 13,000 hectares of land. The company also has a tapioca factory producing 250-320 tons/day (using about 1,000-1,200 tons/day of cassava) with China the main customer for the output.

Laos Telecom Telecoms Laos Telecom is a joint venture between the Laos government (holding 51%) and Thaicom (holding 49% through Shenington) The company is estimated to have had the second highest mobile telephone share in the Laos market in 2011 with 1.21mn subscribers.

Laos World Group

Real Estate Laos World Group is a diversified conglomerate operating in the agricultural, engineering, construction and hotel and tourism sectors. The company also operates the Laos International Trade Exhibition and Convention Center.

Petrotrade Energy Petrotrade distributes fuel and industrial lubricants through its own gas stations and to other industrial users, with Thailand the main supplier of its raw materials.

Source: Companies

Figure 3: Potential listings on the LSX, 2013-2014

Indochina Research

5REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES

January 10, 2013

Continuous, and block, trading expected for 2013In addition to the new listings, there are two other smaller changes in the pipeline that will help improve liquidity in the LSX. 1) The LSX already moved from auctions just two times day, to auctions six times per day in October of 2011. The next step is continuous trading, which the LSX plans to implement after the third listing on the stock market, and could happen by H2/13. 2) The LSX also plans to introduce block trading to the exchange, with a Q3/12 launch date targeted.

Global custodians visit Laos in recent monthsOne major constraint for some large institutions when considering investing in Laos is an absence of global custodians, which prevents them from entering the market due to internal compliance issues. However, two major global custodians have visited the country in recent months, and are expected to establish a presence in Laos as early as 2013. Combined with the planned new listings, we expect that we could see much more interest in the market, especially from foreign institutions.

Source: Lao Securities Exchange

Figure 4: LSX number of securities accounts

0

2,500

5,000

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10,000

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6,209 6,4437,249

8,210 8,260 8,688 8,756 8,910

Securities Accounts (LS) % chg yoy (RS)

Source: Lao Securities Exchange

Figure 5: LSX number of investors

2011 2012 % chg

Domestic Institution 32 33 3%

Domestic Individual 6,854 7,305 7%

Foreign Institution 24 39 63%

Foreign Individual 1,249 1,533 23%

Total 8,159 8,910 9%

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January 10, 2013

Source: Lao Securities Exchange

Figure 6: LSX foreign investors by country

Individual Institutional Total

Thailand 516 8 524

China 403 3 406

Japan 235 1 236

Vietnam 78 1 79

Republic of Korea 70 1 71

United States 45 3 48

Growth in trading accounts may pick up with more listingsThe qoq growth in trading accounts in Laos remained relatively low, but steady in 2012, at an average under 5%, after over 10% qoq growth in account openings over H2/11 (Figure 4). Domestic individual accounts make up the bulk of the accounts, comprising 7,305 (or 82%) of the 8,910 total at end-2012, although growth was quicker for foreign individual accounts, up 23% yoy to 1,533 accounts (Figure 5).

Number of foreign institutions grew rapidly in 2012 There are marginally more foreign institutional investors in the market, at 39, than domestic institutional investors, but the former is growing much more quickly, and we expect to see more interest from foreign institutions once global custodians start operating in Laos. Foreign institutions appear to be relatively widely dispersed geographically; the country with the highest concentration is Thailand, with 20%, but countries with between 1 to 3 institutions make up 80% of the total, suggesting potential exists for a growing foreign institutional presence from many other countries (Figure 6).

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January 10, 2013

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Source: Bloomberg, KT Zmico estimates

Figure 4: Price to book Figure 5: Currency

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Source: Bloomberg, KT Zmico estimates

Figure 2: Relative performance Figure 3: Price to earnings

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January 10, 2013

BCEL BUY

Share dataShare data

LSX code/Bloomberg BCEL.LS/BCEL LS

Sector Banks

Closing Price (US$, Kip) 0.98/7,900

Paid-up shares (mn) 136.60

Par (US$, Kip) 0.63/5,000

Mkt cap (Kip bn/US$mn) 1,079/136

Foreign limit/actual (%) 5%/5%

52 week High/Low (Kip) 8,000/6,000

Avg. daily T/O (000 shrs) 21.83

Estimated free float 20.00

Major ShareholdersMajor Shareholders

Laos government 70%

Public 15%

Cofibred 10%

BCEL staff 5%

Company Profile

State-owned Banque Pour Le Commerce Exterieur du Laos (BCEL) is the largest commercial bank in Laos by loan share. BCEL accepts deposits, runs the most extensive branch network in the country, lends to large corporates and SMEs and has the country’s largest trade finance business.

Prapharas Nonthapiboon Indochina Banksprapharasn@ktzmico.com66 (0) 2695 - 5872

Market leader to benefit from strong economyWe maintain our BUY rating on BCEL with a 2013E target price of LAK11,400/share, implying a target P/BV of 1.2x. This is underpinned by the bank’s number one position in the market with a 29% loan share, making it a likely prime beneficiary of Laos’ solid expected GDP growth (7.6% average growth for 2012-2016 based on IMF forecasts).

Riding secular long term growth trend in loans/GDP Beyond the cyclical upswing in Laos the bank has also been riding a strong secular long-term trend of growth in the credit/GDP ratio as the economy expands. Regional comparables suggest a peak average ratio for loans/GDP around 130%; the ratio for Laos stood at just 29% as of 2011.

Projected earnings growth of 44% for 2013EWe project strong EPS growth of 24% for 2012E and 44% for 2013E, driven by; 1) rising net interest income growth boosted by rapid loan growth (+40% for 2012E and +30% for 2013E), and expanding NIM; and 2) strong growth in fee income (especially trade finance) and trading income.

Regulatory and regional macro risks BCEL faces some regulatory risk as the country eventually shifts to BIS regulatory standards. It also faces regional macro risks given the country’s export-led growth strategy with large energy and mining exports to Thailand and China. Declines in demand for Laos’ exports from these countries could slow economic growth, and affect loan and trade financing demand.

Inexpensive on P/E and P/B, with high yield BCEL trades on a 2013E PER and PBV of just 3.98x and 0.79x, respectively, below regional peers, and yields around 6% for 2H12E (we expect a DPS of LAK463/share for 2H12E) and ~16% for 2013E.

Financials and ValuationFinancials and ValuationFinancials and ValuationFinancials and ValuationFinancials and Valuation

FY Ended 31 Dec 2010 2011 2012E 2013E

PPOP (US$mn) 15.3 19.6 30.8 42.2

Net profit (US$mn) 13.6 18.9 23.4 33.8

EPS (US$) 0.10 0.14 0.17 0.25

EPS growth (%) 30% 40% 24% 44%

BVPS (US$) 0.71 0.86 1.01 1.25

DPS (US$) n.a. 0.10 0.11 0.16

PER (X) 9.88 7.11 5.75 3.98

PBV (X) 1.37 1.15 0.97 0.79

Div. Yield (%) n.a. 9.8% 11.4% 16.4%

ROE (%) 18.2% 17.6% 18.3% 21.9%

TP: LAK 11,400/US$ 1.44 Price: LAK 7,900/US$ 1.00

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January 10, 2013

BCEL Income Statement (US$mn)BCEL Income Statement (US$mn)BCEL Income Statement (US$mn)BCEL Income Statement (US$mn)BCEL Income Statement (US$mn)

FY ended 31 Dec 2010 2011 2012E 2013E

Interest income 33.7 55.2 76.8 96.7

Interest expense -18.3 -32.9 -44.6 -53.9

Net interest income 15.4 22.2 32.2 42.8

Fee & service income 12.3 17.7 19.8 23.8

Total non-interest income 21.2 29.4 34.5 42.2

Operating income 43.8 58.0 74.4 94.1

Operating expenses -21.1 -32.5 -35.9 -42.8

Operating profit before provision 22.7 25.6 38.5 51.4

Provision expense -2.4 0.9 -7.8 -7.1

Operating profit after provision 20.3 26.5 30.6 44.2

Exceptional items - - - -

Profit before income tax 20.3 26.5 30.6 44.2

Income tax -6.7 -7.6 -7.2 -10.4

Minority interest - - - -

Net profit 13.6 18.9 23.4 33.8

Reported EPS 0.1 0.1 0.2 0.3

Fully diluted EPS 0.1 0.1 0.2 0.3

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January 10, 2013

BCEL Balance Sheet (US$mn)

FY ended 31 Dec 2010 2011 2012E 2013E

Amounts due from other banks 215.1 246.1 295.4 354.4

Investment in securities - net 177.8 266.7 307.9 338.7

Loans & accrued interest receivable-net 336.5 639.4 898.6 1,168.2

Other assets 449.0 426.6 454.7 517.8

Total assets 1,191.2 1,593.6 1,975.6 2,401.8

Deposits 974.8 1309.2 1,667.5 2,028.6

Amounts due to other banks 84.9 144.6 144.8 173.5

Total liabilities 1,093.6 1,477.1 1,837.0 2,231.6

Chartered capital 71.6 80.1 80.1 80.1

Retained earnings 3.0 12.4 22.0 39.4

Shareholders equity 97.6 116.5 138.6 170.2

Total liab.& shareholders' equity 1,191.2 1,593.6 1,975.6 2,401.8

Key financial ratios

Operating income growth 25.8% 32.4% 27.7% 26.6%

PPOP growth 28.1% 12.6% 50.0% 33.5%

EPS growth 22.4% 39.0% 23.6% 44.3%

Net loan growth 42.2% 90.0% 40.0% 30.0%

Provision expense to loans 0.7% -0.1% 0.9% 0.6%

Net interest margin (NIM) 2.3% 2.5% 2.4% 2.7%

Cost to income ratio 48.2% 56.0% 48.3% 45.4%

Non interest income/total income 64.9% 61.7% 56.7% 54.5%

Effective tax rate 33.2% 28.7% 23.6% 23.6%

ROA 1.4% 1.4% 1.3% 1.5%

ROE 18.2% 17.6% 18.3% 21.9%

Loan to deposit ratio 34.5% 48.8% 53.9% 57.6%

NPLs/loans 2.5% 0.9% 2.1% 2.9%

Loan loss reserve/NPLs 86.3% 157.6% 143.8% 144.7%

Loan loss reserve/Loans 2.1% 1.5% 3.1% 4.2%

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Share dataShare data

LSX code/Bloomberg EDL-GEN/ EDL LS

Sector Power

Closing Price (US$, Kip) 0.75/5,900

Paid-up shares (mn) 1,226.22

Par (US$, Kip) 0.51 / 4,000

Markt cap (Kip bn/US$mn) 7,237/914

Foreign limit/actual (%) 20%/14%

52 week High/Low (Kip) 5,950/4,150

Avg. daily T/O (000 shrs) 75.84

Estimated free float (%) 25.00

Beta 1.21

Major ShareholdersMajor Shareholders

Electricite Du Laos 75.00%

Ratch-Laos Service 6.46%

RH International 2.88%

BCEL 2.68%

Company Profile

EDL-Gen owns/operates all power plant assets separated and privatized from EDL.

Patcharin Karsemarnuntana Indochina Energypatcharink@ktzmico.com66 (0) 2695 - 5837

Financials and Valuation Financials and Valuation Financials and Valuation Financials and Valuation Financials and Valuation FY Ended 31 Dec 2011 2012E 2013E 2014E

Revenues (US$mn) 111 135 208 212

Net Profit (US$mn) 70 84 108 113

EPS (USD) - Diluted 0.08 0.07 0.09 0.09

EPS growth (%) n/a (15.6) 28.8 4.2

DPS (USD) 0.06 0.06 0.07 0.07

BV (USD) 0.56 0.52 0.54 0.57

FY Ended 31 Dec 2011 2012E 2013E 2014E

PER (x) 9.1 10.8 8.4 8.0

PBV (x) 1.3 1.4 1.4 1.3

EV/EBITDA (x) 7.7 10.5 6.9 6.4

Dividend Yield (%) 8.4 7.9 9.0 9.3

ROE (%) 17.2 14.9 16.6 16.6

Net Gearing (%) 24.0 52.1 49.2 39.1

Undemanding valuation We rate EDL-Generation Pcl. (EDL-GEN) a BUY, with a 2013 target price of LAK8,825/share (US$1.1/share). Despite strong forecast earnings growth, underpinned by a 128% increase in power capacity to 881 MW, EDL trades at undemanding 2013E valuations below regional peers, even while its 9% projected 2013E yield and ROE is above comparables.

Entering the earnings growth cycle until 2014E We forecast a 146% hoh rise in EDL-Gen’s 2H12E net profit to US$59mn (on seasonally high 2H power generation and the five month consolidation of four transferred IPPs), to a FY profit USD84mn, up 19% yoy. We expect continued earnings momentum with a 16% 2013-14E CAGR growth to US$113mn by 2014E. EDL-Gen’s 7 existing 100%-owned hydropower plants (totalling 387 MW) and the FY contribution of 4 hydropower plants (equity capacity: 494 MW) will drive growth.

Soaring capacity growth in long-term EDL-Gen’s long-term growth will be driven by acquisitions from state-owned EDL, which has sizeable hydropower generation assets under construction and in development. These include 218MW from EDL’s 100%-owned assets - Huauy Lampan Ngai and Nam Khan 2 (set to start COD in 2014-2015E), and 1,289 MW in hydropower assets from EDL’s 100%-owned assets and EDL’s equity share in IPPs over the next eight years. Upside from these projects are not included in our projections.

D/E well below ceiling policy With the four transferred IPPs with the THPC project to be 60% proportionately consolidated, as well as the recent capital raising of US$200mn to fund the four IPPs, we expect EdL-Gen’s interest-bearing debt to equity ratio to rise from an abnormally low 0.33x in 2011 to 0.78x in 2013E, well below the company’s policy of a 1.5x ceiling.

EDL Generation BUY TP: LAK 8,825/US$ 1.12Price: LAK 5,900/US$ 0.75

January 10, 2013Indochina Research

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EDL Income Statement (US$mn)

FY ended 31 Dec 2011 2012E 2013E 2014E

Sales 110.0 126.0 195.0 196.0

Cost of sales -26.0 -30.0 -55.0 -56.0

Gross profit 85.0 96.0 140.0 140.0

Share of profit from associates 0.0 7.0 14.0 15.0

Dividend income 0.0 0.0 0.0 0.0

Other income 1.0 0.0 1.0 1.0

Currency exchange gains 0.0 1.0 -3.0 0.0

Total revenue 111.0 135.0 208.0 212.0

Gain before expenses 85.0 104.0 152.0 156.0

Administrative expenses -6.0 -9.0 -10.0 -10.0

Profit before financial costs and tax 79.0 96.0 142.0 146.0

Finance costs -5.0 -7.0 -25.0 -23.0

Income tax -4.0 -5.0 -9.0 -10.0

Net profit for the year 70.0 84.0 108.0 113.0

Balance Sheet

Cash and cash equivalents 43.0 206.0 191.0 200.0

Current assets 106.0 259.0 253.0 262.0

Property, plant and equipment-Net 492.0 873.0 879.0 842.0

Investment in Joint ventures - 64.0 72.0 80.0

Non-current assets 54.0 23.0 23.0 23.0

Total assets 653.0 1,218.0 1,226.0 1,207.0

Current liabilities 31.0 36.0 60.0 54.0

Long term loans 133.0 516.0 472.0 431.0

Non-current liabilities - 27.0 27.0 27.0

Total liabilities 164.0 579.0 560.0 512.0

Paid up capital 433.0 613.0 613.0 613.0

Retained earnings 46.0 53.0 74.0 96.0

Total equities 488.0 639.0 666.0 695.0

January 10, 2013Indochina Research

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EDL Financial Ratios

Growth (%) 2011 2012E 2013E 2014E

Sales Growth n/a 14.7 54.3 0.5

Net Profit Growth n/a 19.1 28.9 4.3

EPS growth (%) n/a -15.6 28.9 4.3

EBITDA Growth n/a 19.3 51.6 2.7

Profitability Ratios (%)

EBIT margin 71.5 70.7 68.5 68.6

EBITDA margin 88.9 87.5 85.8 86.3

Net profit margin 63.5 62.4 52.0 53.1

ROE 17.2 14.9 16.6 16.6

ROA 11.0 9.0 8.9 9.3

ROCE 12.6 9.3 9.2 9.7

Asset Utilization

Days receivable (days) 166.7 79.7 67.3 67.4

Days Inventory (days) 41.8 31.9 15.8 16.3

Days payable (days) 5.8 33.9 25.8 26.3

Leverage, Solvency Ratios

Total debt/Equity ratio 0.3 0.9 0.8 0.7

Interest coverage ratio 15.4 14.4 5.7 6.3

Asset/Equity (Equity multiplier) 1.3 1.9 1.8 1.7

Net debt/Equity 0.2 0.5 0.5 0.4

January 10, 2013Indochina Research

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STOCK RECOMMENDATIONS

BUY: Expecting positive total returns of 15% or more over the next 12 months

TRADING BUY: Expecting positive total returns of 10% or more over the next 3 months

SELL INTO STRENGTH: Expecting total returns of not more than 10% over the next 3 months; share price has largely priced in fundamentals

BUY ON WEAKNESS: Expecting negative total returns of not more than -10% over the next 3 months, while expecting positive developments in the medium to longer term

SELL: Expecting negative total returns of 15% or more over the next 12 months

SECTOR RECOMMENDATIONS

OVERWEIGHT: The industry, as defined by the analyst’s coverage universe, is expected to outperform the relevant primary market index by at least 10% over the next 12 months.

NEUTRAL: The industry, as defined by the analyst’s coverage universe, is expected to perform in-line relevant primary market index by at least 10% over the next 12 months.

UNDERWEIGHT: The industry, as defined by the analyst's coverage universe, is expected to underperform the relevant primary market index by 10% over the next 12 months.

Disclaimer

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KT ZMICO RESEARCH - RECOMMENDATION DEFINITIONS