maybank may 2013 issue

7/28/2019 Maybank May 2013 Issue

1/12SEE APPENDIX I FOR IMPORTANT DISCLOSURES AND ANALYST CERTIFICATIONS

Economics 21 March 2013

PP16832/01/2013 (031128)

Malaysia

Raise 2013 official growthforecastBNM raised 2013 growth forecast. Bank Negara Malaysia (BNM)

released its Annual Report 2012 yesterday. Key takeaway is the 0.5

percentage point upward revision to the 2013 real GDP growth forecast

to 5%-6%. Previous official forecast was 4.5%-5.5% published in the

Ministry of Finances Economic Report 2012/2013 that was released

together with the tabling of Budget 2013 on 28 Sep 2012.

Domestic demand remains the growth engine. The main factor for

the upgrade is the higher than previously projected domestic demandgrowth, although the revised number is slower than last years

expansion (2013E revised: +8.1%; 2013E previous: +5.6%; 2012:

+10.6%). The forecasts for all components of domestic demand were

raised i.e. consumer spending (2013E revised: +7.1%; 2013E previous:

+5.7%; 2012: +7.7%); gross fixed capital formation (2013E revised:

+12.2%; 2013E previous: +9.3%; 2012: +19.9%) and government

consumption expenditure (2013E revised: +3.6%; 2013E previous:

1.2%; 2012: +5.0%). The expected further double-digit investment

growth is sustained by both private sector (2013E revised: +15.6%;

2013E previous: +13.3%; 2012: +22.0%) and public sector (2013E

revised: +7.5%; 2013E previous: +4.2%; 2012: +17.1%).

External demand is slightly less of a drag this year vs last year.

Although net external demand is still expected to shrink for the seventh

year in a row in 2013, the quantum is narrower, though not as sharply

smaller as previously predicted (2013E revised: -19.1%; 2013E

previous: -4.3%; 2012: -29.4%). Further and bigger than previously

forecasted contraction in net external demand this year reflects

downward revision to and thus slower pace of growth in exports of

goods and services (2013E revised: +1.8%; 2013E previous: +2.8%;

2012: +0.1%) relative to the upgraded forecast for imports of goods and

services (2013E revised: +3.9%; 2013E previous: +3.6%; 2012: +4.5%).

Overall, the narrative is in line with our view. To note, we hadearlier (i.e. last month) adjusted our 2013 real GDP growth forecast to

+5.3% from +4.8% previously following the release of the better-than-

expected 4Q 2012 GDP which surged to +6.4% YoY (3Q 2012: +5.2%

YoY). The Malaysian economy has proven to be resilient and able to

withstand global headwinds in the past two years, thanks to the

strength in domestic demand which will be sustained this year, primarily

by the continuation of robust investment activities.

BNM Annual Report2012

Suhaimi [email protected](603) 2297 8682

Ramesh [email protected](603) 2297 8685

William Poh

[email protected](603) 2297 8683


2/1221 March 2013 Page 2 of 12

Malaysia: BNM Annual Repor t

Malaysia: Real GDP% chg ACTUAL MAYBANK KE OFFICIAL OFFICIAL DIFFERENCE

2011 2012 2013E 2013E Revised 2013E Previous (in ppts)

Real GDP 5.1 5.6 5.3 5.0-6.0 4.5-5.5 0.5

Manufacturing 4.7 4.8 5.1 4.9 4.9 0.0

Services 7.0 6.4 6.1 5.5 5.6 (0.1)

Agriculture 5.9 0.8 1.5 4.0 2.4 1.6

Mining (5.7) 1.4 2.3 5.0 2.7 2.3

Construction 4.6 18.5 10.5 15.9 11.2 4.7

Domestic Demand 8.2 10.6 8.5 8.1 5.6 2.5

Private Consumption 7.1 7.7 6.6 7.1 5.7 1.4

Public Consumption 16.1 5.0 4.6 3.6 (1.2) 4.8

Gross Fixed Capital Formation 6.5 19.9 14.2 12.2 9.3 2.9

Private Investment 12.2 22.0 15.1 15.6 13.3 2.3

Public Investment (0.3) 17.1 12.9 7.5 4.2 3.3

Net External Demand (7.4) (29.4) (16.1) (19.1) (4.3) (14.8)

Exports of Goods & Services 4.2 0.1 2.8 1.8 2.8 (1.0)

Imports of Goods & Services 6.2 4.5 4.7 3.9 3.6 0.3

Sources: Dept. of Statistics, BNM, MOF, Maybank KE

Malaysia: Other Key Economic Indicators

ACTUAL MAYBANK KE OFFICIAL2011 2012 2013E 2013E Revised 2013E Previous

Gross Exports (% chg) 9.2 0.6 4.5 1.4 3.9

Gross Imports (% chg) 8.5 5.9 8.0 5.7 4.6

Trade Balance (RMb) 124.2 94.8 77.8 70.1 100.8

Current Account Balance (RMb) 97.1 60.0 49.2 42.7 / 42.8 71.9

Current Account Balance (% of GDP) 11.0 6.6 5.0 4.4 7.2

Fiscal Balance (% of GDP) (4.8) (4.5) (4.1) (4.0) (4.0)

Inflation Rate (CP I, %) 3.2 1.6 2.5 2.0 -3.0 2.0 -3.0

Overnight Policy Rate (% p.a., end-period) 3.00 3.00 3.25 NA NA

Exchange Rate (RM/USD, end-period) 3.17 3.06 2.98 NA NA

Unemployment Rate (%) 3.1 3.0 3.1 3.1 3.1

Crude Petroleum (WTI USD/bbl, average) 95.0 94.1 95.0 110.0 95.0

Crude Palm Oil (RM/tonne, average) 3,279 2,865 3,000 2,500 3,000

Sources: Bloomberg, BNM, MOF, Dept. of Statistics, Maybank IB, Maybank FX Research


3/1221 March 2013 Page 3 of 12


Positive momentum in investment growth is sustainable in view of

whats in the pipeline. MIDAs approved manufacturing and services

investments are on an upward trajectory over the last three years,

pointing to a healthy investment pipeline. Meanwhile, the slow pace of

realised ETP investment in 2011-2012 should gather momentum from

2013 onwards. Of the ETP investment committed, MYR12.9b were

realised in 2011, followed by an estimated MYR10b in 2012 i.e. 10.8%

realisation rate. Realised ETP investment are expected to accelerate

this year onwards as the implementation of big ticket infrastructure

and investment projects gather momentum e.g. Klang Valley Mass

Rapid Transit (KVMRT) Phase 1; PETRONAS oil & gas capex.

The outlook for foreign direct investment (FDI) is also favourable,

judging from Malaysia's improved ranking in AT Kearney's FDI

Confidence Index to 10th last year from 21st in 2011, as well as

UNCTADs World Investment Prospect Survey that put Malaysia as one

of the Top 20 Investment Destinations for 2012-2014. MITI expects a

moderate recovery in FDI this year after the dip to MYR29.1b in 2012

(2011: USD36.6b).

MIDA Approved Investments (MYRb) ETP Investments: Committed vs Realised

46.0 59.9 62.8

32.647.2 56.1 41.0

55.5

66.447.8

36.3

36.7

70.4117.6

0

20

40

60

80

100

120

140

160

180

2006 2007 2008 2009 2010 2011 2012

Manufacturing Services

Total Committed ETP Investmentas at end-2012 =MYR211.34b

Reali sed i n 2011=MYR12.9b

Realised in 2012 = MYR10b (est)

Source: MIDA Source: PEMANDU

PETRONAS Capex: Committed vs Realised RDC Investments: Committed vs Realised

Total Petronas Capex Plan2011-2015 =MYR300b

Reali sed in 2011 = MYR41.2b

Realised in 2012

= MYR45.6bTotal

Committed

Investmentto-date

= MYR304.6b

Realised to-date= MYR113b

(37% of total)

Source: PETRONAS Source: Regional Development Corridors (RDCs)


4/1221 March 2013 Page 4 of 12


Sector Major Projects MYRb 2011 2012 2013 2014 2015

Oil & Gas Gumusut-Kakap Semi-Submersible FPS 5.6

Oil & Gas Tj. Langsat Tank Terminal Project 1.0

Transport Seremban-Gemas EDT 3.5

Transport Second Penang Bridge 4.5

Transport Ipoh-Padang Besar EDT 12.5

Utilities Pahang-Selangor Raw Water Transfer (ex-Langat 2 WTP) 2.1Oil & Gas Sabah-Sarawak Gas Pipeline 4.6

Transport KLIA2 4.0

Transport Klang Valley LRT Extension 7.7

Oil & Gas Melaka Regasification Terminal Plant 3.0

Oil & Gas Sabah Oil Gas Terminal 2.4

Utilities J anamanjung Power Plant 5.0

Utilities Kimanis Power Plant 1.5

Utilities Terengganu Hydro-Electric Dams 2.0

Oil & Gas Berantai RSC Project (until 2026) 3.0

Oil & Gas Balai RSC Project (until 2019) 3.0

Oil & Gas Lahad Datu Regasifaction Plant 1.0

Oil & Gas Malikai Tension-Legged Platform 2.0

Utilities Tanjung Bin Power Plant 6.5

Oil & Gas North Malay Basin Gas Project 15.0 - 16.0

Transport RAPID 60.0

Transport MRT1 (Sg Buloh - Kajang) 23.0

Utilities Prai Power Plant 2.5

Property Tun Razak Exchange (TRX) 26.0 (GDV)

Oil & Gas 7 Centralised Processing Platforms & 70 Smaller Platforms 7.0

Transport West Coast Expressway 6.0

Property Sg Buloh RRI Land @ Kwasa Damansara (10-15 Years Project) NA

Oil & Gas Pengerang LNG Tank Terminal Project 4.0

Oil & Gas Pengerang Tank Terminal Project 8.7

Start Phase

Active PhaseCompletion Phase

Source: Maybank KE

Moderating consumer spending growth is due to impact of rising

inflation. BNM expects inflation rate of +2% to +3% in 2013, up from

+1.6% in 2012. We are looking +2.5% inflation rate this year, assuming

subsidy rationalisation programme (SRP) that was suspended since

J uly 2011 to resume in 2H 2013, taking cue from the 11% cut Budget

2013 allocation for subsidies to MYR37.6b from the record-high of

MYR42.4b in 2012. We are also pricing in a 25bps increase in BNMs

Overnight Policy Rate (OPR) to 3.25% in 4Q 2103 as inflationaccelerates.

Plus the transitory effect of Budget / pre-election goodies . An

interesting observation from the quarterly consumer spending growth

during 2012 is the apparent transitory impact of the Budget 2012

goodies handed out in the earlier part of last year. Consumer

spending picked up from 7.4% YoY in 1Q 2012 to 8.8% YoY in 2Q

2012, and was sustained at 8.5% YoY in 3Q 2012 before tapering off to

6.1% YoY in 4Q 2012. The Government is continuing with the pre-

election goodies via round two of the cash assistance programmes

(2013E: MYR4.2b; 2012: MYR3.2b). However, we calculated that the

total amount combined with the civil service and pensionersremunerations and other fiscal initiatives like personal income tax

measures are significantly lower in 2013 (MYR8.6b) than in 2012

(MYR16.0b).


5/1221 March 2013 Page 5 of 12


Cash Assistance Programmes Details Beneficiaries Total (MYRm)

2012 2013BR1M 1.0 MYR500 per household earnings


6/1221 March 2013 Page 6 of 12


Meanwhile, making BR1M permanent is actually consistent w ith

our view of the resumption in subsidy rationalisation . PM Najib

recently announced that the Bantuan Rakyat 1 Malaysia (BR1M) the

one-off cash handout of MYR500 for households earning MYR3,000

per month or below will be turned into a permanent annual scheme.

BR1M was first announced in Budget 2012 and again in Budget 2013,

benefitting 4.3m households and costing the Government MYR2.2b per

annum. The move is in line with our view on the resumption of subsidy

rationalisation, as the annual BR1M programme can provide financial

assistance to the lower income households to negate the negative

purchasing power impact of cutting the subsidies on and hence

raising the costs of essential food items, fuels and energy.

At the same time, household debt is back in the spotlight. The

household debt to GDP ratio increased further to 80.5% in 2012 (2011:

75.8%), the highest since the data is made available from 2002. Total

household debt growth moderated slightly to +13% (2011: +13.4%).

The various pre-emptive macro-prudential measures by BNM (e.g. 70%

cap on loan-to-value (LTV) ratio for third mortgages; limits on creditcards to lower income households; responsible lending guidelines)

appeared successful in slowing the banking systems household loans

growth (2012: +11.6%; 2011: +12.9%) for the second year in a row.

However, household financing extended by the non-bank financial

institutions (NBFIs) surged (2012: +23.4%; 2011: +16.1%) driven

primarily by personal loans growth (i.e. +30% vs banking systems

personal loan growth of just 9%.

The stable job market condition and income growth is a key factor in

driving household debt growth. Together with the strong household

balance sheet, they keep the household debt risk to the banking sector

and the overall financial stability low and manageable. Nonetheless,we think the exposures among the lower income households to

shadow banking financing requires close monitoring as this group are

likely to be more vulnerable to job market and income shocks, as well

as having weaker balance sheet. In particular, we are concerned over

regulatory arbitrage where low-income and higher risks borrowers

take advantage of the easier credit standards and access to financing

from the NBFIs. Therefore, we expect BNM and other related agencies

to step up their vigilance, especially with the enhanced regulatory and

supervisory power of the central bank under the soon-to-be gazetted

Financial Services Act (FSA).

Malaysia: Household Debt to GDP Ratio Malaysia: Household Debt Growth (% chg)

60.4%

71.7%74.0% 75.8%

80.5%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

2008 2009 2010 2011 2012

(20)

(15)

(10)

(5)

0

5

10

15

20

25

30

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Total HH DebtHH Debt from Banking System

HH Debt from Non-Banking System

Sources: BNM Financial Stability & Payment Systems Report 2012,Maybank KE



7/1221 March 2013 Page 7 of 12


Malaysia: Household Financial Asset as Multiple ofHousehold Debt

Malaysia: Household Debt repayment Ratio (%)

2.32.4 2.4

2.2 2.2

1.4 1.5 1.5 1.4 1.5

0.0

0.5

1.0

1.5

2.0

2.5

3.0

2008 2009 2010 2011 2012

HH Total Financial Asset (X of HH Debt) HH Liquid Financial Asset (X of HH Debt)

45.0

42.5

41.3

39.1

41.1

39.7

43.1

44.1

45.2

43.9

36

37

38

39

40

41

42

43

44

45

46

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012



No change in our view on global economy. We expect global

economic growth to stabilise this year at +3.4% after two years of

slowdown in 2011 (+3.9%) and 2012 (+3.3%).The improvement in

global economic conditions seen in late-2012 continued into early 2013

as per the trends in the global purchasing managers indices (PMIs),

underpinned largely by the non-Eurozone economies. However, global

economy remains fragile and vulnerable to downside risks such as the

potential re-emergence of Eurozone crisis, although there are upside

risks e.g. pick up in US growth momentum on resolution of the fiscal

issues; J apans successful reflation of its economy.

Global Real GDP

% chg 2010 2011 2012E 2013E

Actual Actual Consensus / Maybank-KE

World 5.1 3.9 3.3 3.4

Adv anced Economies 3.0 1.6 1.3 1.4

US 2.4 1.8 2.2 2.5

Eurozone 2.0 1.4 (0.5) 0.0

J apan 4.5 (0.6) 2.0 1.0

UK 1.8 0.9 0.0 0.9

BRIC 8.1 6.1 4.5 5.2

Brazil 7.5 2.8 0.9 3.7

Russia 4.3 4.3 3.5 3.5

India 10.1 7.9 5.7 6.7

China 10.4 9.3 7.8 7.0

Asian NIEs 8.5 4.0 1.5 3.2

South Korea 6.3 3.6 2.0 3.1

Taiwan 10.7 4.0 1.2 3.3

Hong Kong 7.1 5.0 1.4 3.4

Singapore 14.8 4.9 1.3 3.0

ASEAN-5 7.0 4.5 6.0 5.6

Indonesia 6.2 6.5 6.2 6.7

Thailand 7.8 0.1 6.4 4.3

Malaysia 7.2 5.1 5.6 5.3

Vietnam 6.8 5.9 5.0 5.5

Philippines 7.6 3.9 6.6 6.4

World Trade Volume 12.6 5.9 3.8 5.5

Sources: IMF, Consensus, Maybank-KE (for US, Eurozone, China, India, Singapore,ASEAN)


8/1221 March 2013 Page 8 of 12


Global: Real GDP Growth vs Composite PMI

(5)

(4)

(3)

(2)

(1)

0

1

23

4

5

6

7

35

40

45

50

55

60

Jan-07

May-07

Aug-07

Nov-07

Feb-08

May-08

Aug-08

Nov-08

Feb-09

May-09

Aug-09

Nov-09

Feb-10

May-10

Aug-10

Nov-10

Feb-11

May-11

Aug-11

Nov-11

Feb-12

May-12

Aug-12

Nov-12

Feb-13

Global Composite PMI (LHS) Global GDP (% YoY, RHS)

Sources: Bloomberg, Maybank KE

Global PMI Dashboard

Jul-12

Aug-12

Sep-12

Oct-12

Nov-12

Dec-12

Jan-13

Feb-13

Composite 51.7 50.9 52.4 51.0 53.6 53.7 53.2 53.0

Manufacturing 48.4 48.1 48.8 48.8 49.6 50.1 51.4 50.8US 50.5 50.7 51.6 51.7 49.9 50.2 53.1 54.2

Eurozone 44.0 45.1 46.1 45.4 46.2 46.1 47.9 47.9Germany 43.0 44.7 47.4 46.0 46.8 46.0 49.8 50.3France 43.4 46.0 42.7 43.7 44.5 44.6 42.9 43.9Italy 44.3 43.6 45.7 45.5 45.1 46.7 47.8 45.8J apan 47.9 47.7 48.0 46.9 46.5 45.0 47.7 48.5UK 45.2 49.6 48.1 47.3 49.2 51.2 50.5 47.9China 50.1 49.2 49.8 50.2 50.6 50.6 50.4 50.1

China * 49.3 47.6 47.9 49.5 50.5 51.5 52.3 50.4Brazil 48.7 49.3 49.8 50.2 50.7 51.1 53.2 52.5India * 52.9 52.8 52.8 52.9 53.7 54.7 53.2 54.2

S. Korea* 47.2 47.5 45.7 47.4 48.2 50.1 49.9 50.9Taiwan* 47.5 46.1 45.6 47.8 47.4 50.6 51.5 50.2Singapore 49.8 49.1 48.7 48.3 48.8 48.6 50.2 49.4Indonesia * 51.4 51.6 50.5 51.9 51.5 50.7 49.7 50.5

Services 52.6 52.0 53.8 51.9 54.8 54.8 53.4 53.3

US 52.9 54.3 55.2 54.8 54.8 55.7 55.2 56.0

Eurozone 47.9 47.2 46.1 46.0 46.7 47.8 48.6 47.3Germany 50.3 48.3 49.7 48.4 49.7 52.0 55.7 54.1France 50.0 49.2 45.0 44.6 45.8 45.2 43.6 42.7Italy 43.0 44.0 44.5 46.0 44.6 45.6 43.9 43.9J apan * 47.5 49.3 48.9 50.0 51.4 51.5 51.5 -UK 51.0 53.7 52.2 50.6 50.2 48.9 51.5 51.5China 55.6 56.3 53.7 55.5 55.6 56.1 56.2 54.5

China * 53.1 52.0 54.3 53.5 52.1 51.7 54.0 52.1

India * 54.2 55.0 55.8 53.8 52.1 55.6 57.5 54.2

Sources: Bloomberg, Markit (* ), Maybank KE


9/1221 March 2013 Page 9 of 12


RESEARCHOFFICESREGIONAL

PKBASURegional Head, Research & Economics(65) 6432 1821 [email protected]

WONG Chew Hann, CAActing Regional Head of Institutional Research(603) 2297 8686 [email protected]

ONG Seng Yeow

Regional Products & Planning(65) 6432 1453 [email protected]

ECONOMICSSuhaimi ILIASChief Economist Singapore | Malaysia(603) 2297 8682 [email protected]

Luz LORENZO Philippines | Indonesia(63) 2 849 8836 [email protected]

Tim LEELAHAPHAN Thailand(662) 658 1420 [email protected]

MALAYSIAWONG Chew Hann, CAHead of Research(603) 2297 8686 [email protected] Strategy Construction & InfrastructureDesmond CHNG, ACA(603) 2297 8680 [email protected] Banking - RegionalLIAW Thong Jung(603) 2297 8688 [email protected] Oil & Gas Automotive ShippingONG Chee Ting, CA(603) 2297 8678 [email protected] Plantations- RegionalMohshin AZIZ(603) 2297 8692 [email protected]

Aviation PetrochemYIN Shao Yang, CPA(603) 2297 8916 [email protected] Gaming Regional MediaTAN CHI WEI, CFA(603) 2297 8690 [email protected] Power TelcosWONG Wei Sum, CFA(603) 2297 8679 [email protected] Property & REITsLEE Yen Ling(603) 2297 8691 [email protected] Building Materials Manufacturing Technology

LEE Cheng Hooi Head of [email protected] Technicals

HONG KONG / CHINAEdward FUNGHead of Research

(852) 2268 0632 [email protected] ConstructionIvan CHEUNG,CFA(852) 2268 0634 [email protected] Property IndustrialIvan LI,CFA(852) 2268 0641 [email protected] Banking & FinanceJacqueline KO,CFA(852) 2268 0633 [email protected] Consumer

Andy POON(852) 2268 0645 [email protected] Telecom & equipment

Alex YEUNG(852) 2268 0636 [email protected] IndustrialWarren LAU(852) 2268 0644 [email protected] Technology - RegionalKaren Kwan(852) 2268 0640 [email protected]

China PropertyINDIA

Jigar SHAHHead of Research(91) 22 6623 2601 [email protected] Oil & Gas Automobile Cement

Anub hav GUPTA(91) 22 6623 2605 [email protected] Metal & Mining Capital goods PropertyGanesh RAM(91) 226623 2607 [email protected] Telecom Contractor

SINGAPOREGregory YAP Head of Research(65) 6432 1450 [email protected] Technology & Manufacturing Telcos - RegionalWilson LIEW(65) 6432 1454 [email protected] Hotel & Resort Property & ConstructionJames KOH(65) 6432 1431 [email protected] Logistics Resources Consumer Small & Mid CapsYEAK Chee Keong, CFA(65) 6432 1460 [email protected] Offshore & Marine

Ali son FOK(65) 6432 1447 [email protected] Services S-chipsBernard CHIN(65) 6432 1146 [email protected] Transport (Land, Shipping & Aviation)ONG Kian Lin(65) 6432 1470 [email protected] REITs / PropertyWei Bin(65) 6432 1455 [email protected] S-chips Small & Mid Caps

INDONESIAKatarina SETIAWANHead of Research(62) 21 2557 1125 [email protected] Consumer Strategy TelcosLucky ARIESANDI,CFA(62) 21 2557 1127 [email protected] Base metals

Mining Oil & Gas WholesaleRahmi MARINA(62) 21 2557 1128 [email protected] Banking MultifinancePandu ANUGRAH(62) 21 2557 1137 [email protected] Automotive Heavy equipment Plantation Toll road

Adi N. WICAKSONO(62) 21 2557 1128 [email protected] Generalist

Anth ony YUNUS(62) 21 2557 1139 [email protected] Cement Infrastructure Property

Arw ani PRANADJAYA(62) 21 2557 1129 [email protected] Technicals

PHILIPPINESLuz LORENZOHead of Research(63) 2 849 8836 [email protected] StrategyLaura DY-LIACCO(63) 2 849 8840 [email protected] Utilities Conglomerates TelcosLovell SARREAL(63) 2 849 8841 lovell_ [email protected] Consumer Media CementKenneth NERECINA(63) 2 849 8839 [email protected] Conglomerates Property Ports/ LogisticsKatherine TAN(63) 2 849 8843 [email protected] Banks Construction

Ramon ADVIENTO(63) 2 849 8845 [email protected] Mining

THAILANDSukit UDOMSIRIKUL Head of Research(66) 2658 6300 ext [email protected]

Maria LAPIZ Head of Institutional ResearchDir (66) 2257 0250 | (66) 2658 6300 ext [email protected] Consumer/ Big Caps

Andrew STOTZ Strategist(66) 2658 6300 ext [email protected]

Mayuree CHOWVIKRAN(66) 2658 6300 ext 1440 [email protected] Strategy

Suttatip PEERASUB(66) 2658 6300 ext 1430 [email protected]

Media CommerceSutthichai KUMWORACHAI(66) 2658 6300 ext 1400 [email protected] Energy PetrochemTermporn TANTIVIVAT(66) 2658 6300 ext 1520 [email protected] PropertyWoraphon WIROONSRI(66) 2658 6300 ext 1560 [email protected] Banking & FinanceJaroonpan WATTANAWONG(66) 2658 6300 ext 1404 [email protected] Transportation Small cap.Chatchai JINDARAT(66) 2658 6300 ext 1401 [email protected] ElectronicsPongrat RATANATAVA NANANDA (66) 2658 6300 ext 1398 [email protected] Services/ Small Caps

VIETNAMMichael KOKALARI, CFA Head of Research(84) 838 38 66 47 [email protected] StrategyNguyen Thi Ngan Tuyen(84) 844 55 58 88 x 8081 [email protected] Food and Beverage Oil and GasNgo Bich Van(84) 844 55 58 88 x 8084 [email protected] BankingTrinh Thi Ngoc Diep(84) 844 55 58 88 x 8242 [email protected] Technology Utilities ConstructionDang Thi Kim Thoa(84) 844 55 58 88 x 8083 [email protected] ConsumerNguyen Trung Hoa+84 844 55 58 88 x 8088 [email protected] Steel Sugar Resources


10/1221 March 2013 Page 10 of 12


APPENDIX I: TERMS FOR PROVISION OF REPORT, DISCLAIMERS AND DISCLOSURES

DISCLAIMERS

This research report is prepared for general circulation and for information purposes only and under no circumstances should it be considered or intended as anoffer to sell or a solicitation of an offer to buy the securities referred to herein. Investors should note that values of such securities, if any, may fluctuate and thateach securitys price or value may rise or fall. Opinions or recommendations contained herein are in form of technical ratings and fundamental ratings.Technical ratings may differ from fundamental ratings as technical valuations apply different methodologies and are purely based on price and volume-related

information extracted from the relevant jurisdictions stock exchange in the equity analysis. Accordingly, investors returns may be less than the original suminvested. Past performance is not necessarily a guide to future performance. This report is not intended to provide personal investment advice and does nottake into account the specific investment objectives, the financial situation and the particular needs of persons who may receive or read this report. Investorsshould therefore seek financial, legal and other advice regarding the appropriateness of investing in any securities or the investment strategies discussed orrecommended in this report.

The information contained herein has been obtained from sources believed to be reliable but such sources have not been independently verified by MaybankInvestment Bank Berhad, its subsidiary and affiliates (collectively, MKE) and consequently no representation is made as to the accuracy or completeness ofthis report by MKE and it should not be relied upon as such. Accordingly, MKE and its officers, directors, associates, connected parties and/or employees(collectively, Representatives) shall not be liable for any direct, indirect or consequential losses or damages that may arise from the use or reliance of thisreport. Any information, opinions or recommendations contained herein are subject to change at any time, without prior notice.

This report may contain forward looking statements which are often but not always identified by the use of words such as anticipate, believe, estimate,intend, plan, expect, forecast, predict and project and statements that an event or result may, will, can, should, could or might occur or beachieved and other similar expressions. Such forward looking statements are based on assumptions made and information currently available to us and aresubject to certain risks and uncertainties that could cause the actual results to differ materially from those expressed in any forward looking statements.Readers are cautioned not to place undue relevance on these forward-looking statements. MKE expressly disclaims any obligation to update or revise any suchforward looking statements to reflect new information, events or circumstances after the date of this publication or to reflect the occurrence of unanticipated

events.MKE and its officers, directors and employees, including persons involved in the preparation or issuance of this report, may, to the extent permitted by law, fromtime to time participate or invest in financing transactions with the issuer(s) of the securities mentioned in this report, perform services for or solicit businessfrom such issuers, and/or have a position or holding, or other material interest, or effect transactions, in such securities or options thereon, or other investmentsrelated thereto. In addition, it may make markets in the securities mentioned in the material presented in this report. MKE may, to the extent permitted by law,act upon or use the information presented herein, or the research or analysis on which they are based, before the material is published. One or more directors,officers and/or employees of MKE may be a director of the issuers of the securities mentioned in this report.

This report is prepared for the use of MKEs clients and may not be reproduced, altered in any way, transmitted to, copied or distributed to any other party inwhole or in part in any form or manner without the prior express written consent of MKE and MKE and its Representatives accepts no liability whatsoever for theactions of third parties in this respect.

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 orother jurisdiction where such distribution, publication, availability or use would be contrary to law or regulation. This report is for distribution only under suchcircumstances as may be permitted by applicable law. The securities described herein may not be eligible for sale in all jurisdictions or to certain categories ofinvestors. Without prejudice to the foregoing, the reader is to note that additional disclaimers, warnings or qualifications may apply based on geographicallocation of the person or entity receiving this report.

MalaysiaOpinions or recommendations contained herein are in the form of technical ratings and fundamental ratings. Technical ratings may differ from fundamentalratings as technical valuations apply different methodologies and are purely based on price and volume-related information extracted from Bursa MalaysiaSecurities Berhad in the equity analysis.

Singapore

This report has been produced as of the date hereof and the information herein may be subject to change. Maybank Kim Eng Research Pte. Ltd. (MaybankKERPL) in Singapore has no obligation to update such information for any recipient. For distribution in Singapore, recipients of this report are to contactMaybank KERPL in Singapore in respect of any matters arising from, or in connection with, this report. If the recipient of this report is not an accredited investor,expert investor or institutional investor (as defined under Section 4A of the Singapore Securities and Futures Act), Maybank KERPL shall be legally liable for thecontents of this report, with such liability being limited to the extent (if any) as permitted by law.

Thailand

The disclosure of the survey result of the Thai Institute of Directors Association (IOD) regarding corporate governance is made pursuant to the policy of theOffice of the Securities and Exchange Commission. The survey of the IOD is based on the information of a company listed on the Stock Exchange of Thailandand the market for Alternative Investment disclosed to the public and able to be accessed by a general public investor. The result, therefore, is from theperspective of a third party. It is not an evaluation of operation and is not based on inside information.The survey result is as of the date appearing in the

Corporate Governance Report of Thai Listed Companies. As a result, the survey may be changed after that date. Maybank Kim Eng Securities (Thailand)Public Company Limited (MBKET) does not confirm nor certify the accuracy of such survey result.

Except as specifically permitted, no part of this presentation may be reproduced or distributed in any manner without the prior written permission of MBKET.MBKET accepts no liability whatsoever for the actions of third parties in this respect.

US

This research report prepared by MKE is distributed in the United States (US) to Major US Institutional Investors (as defined in Rule 15a-6 under theSecurities Exchange Act of 1934, as amended) only by Maybank Kim Eng Securities USA Inc (Maybank KESUSA), a broker-dealer registered in the US(registered under Section 15 of the Securities Exchange Act of 1934, as amended). All responsibility for the distribution of this report by Maybank KESUSA inthe US shall be borne by Maybank KESUSA. All resulting transactions by a US person or entity should be effected through a registered broker-dealer in theUS. This report is not directed at you if MKE is prohibited or restricted by any legislation or regulation in any jurisdiction from making it available to you. Youshould satisfy yourself before reading it that Maybank KESUSA is permitted to provide research material concerning investments to you under relevantlegislation and regulations.

UK

This document is being distributed by Maybank Kim Eng Securities (London) Ltd (Maybank KESL) which is authorized and regulated, by the FinancialServices Authority and is for Informational Purposes only. This document is not intended for distribution to anyone defined as a Retail Client under the Financial

Services and Markets Act 2000 within the UK. Any inclusion of a third party link is for the recipients convenience only, and that the firm does not take anyresponsibility for its comments or accuracy, and that access to such links is at the individuals own risk. Nothing in this report should be considered asconstituting legal, accounting or tax advice, and that for accurate guidance recipients should consult with their own independent tax advisers.


11/1221 March 2013 Page 11 of 12


DISCLOSURES

Legal Entities Disclosures

Malaysia: This report is issued and distributed in Malaysia by Maybank Investment Bank Berhad (15938-H) which is a Participating Organization of BursaMalaysia Berhad and a holder of Capital Markets and Services License issued by the Securities Commission in Malaysia. Singapore: This material is issuedand distributed in Singapore by Maybank KERPL (Co. Reg No 197201256N) which is regulated by the Monetary Authority of Singapore. Indonesia: PT KimEng Securities (PTKES) (Reg. No. KEP-251/PM/1992) is a member of the Indonesia Stock Exchange and is regulated by the BAPEPAM LK. Thailand:

MBKET (Reg. No.0107545000314) is a member of the Stock Exchange of Thailand and is regulated by the Ministry of Finance and the Securities andExchange Commission.Philippines:MATRKES (Reg. No.01-2004-00019) is a member of the Philippines Stock Exchange and is regulated by the Securitiesand Exchange Commission. Vietnam: Kim Eng Vietnam Securities Company ( KEVS) (License Number: 71/UBCK-GP) is licensed under theStateSecuritiesCommission of Vietnam.Hong Kong: KESHK (Central Entity No AAD284) is regulated by the Securities and Futures Commission. India: KimEng Securities India Private Limited (KESI) is a participant of the National Stock Exchange of India Limited (Reg No: INF/INB 231452435) and the BombayStock Exchange (Reg. No. INF/INB 011452431) and is regulated by Securities and Exchange Board of India. KESI is also registered with SEBI as Category 1Merchant Banker (Reg. No. INM 000011708) US: Maybank KESUSA is a member of/ and is authorized and regulated by the FINRA Broker ID 27861. UK:Maybank KESL (Reg No 2377538) is authorized and regulated by the Financial Services Authority.

Disclosure of Interest

Malaysia: MKE and its Representatives may from time to time have positions or be materially interested in the securities referred to herein and may further actas market maker or may have assumed an underwriting commitment or deal with such securities and may also perform or seek to perform investment bankingservices, advisory and other services for or relating to those companies.

Singapore: As of 21 March 2013, Maybank KERPL and the covering analyst do not have any interest in any companies recommended in this research report.

Thailand: MBKET may have a business relationship with or may possibly be an issuer of derivative warrants on the securities /companies mentioned in the

research report. Therefore, Investors should exercise their own judgment before making any investment decisions. MBKET, its associates, directors, connectedparties and/or employees may from time to time have interests and/or underwriting commitments in the securities mentioned in this report.

Hong Kong: KESHK may have financial interests in relation to an issuer or a new listing applicant referred to as defined by the requirements under Paragraph16.5(a) of the Hong Kong Code of Conduct for Persons Licensed by or Registered with the Securities and Futures Commission.

As of 21 March 2013, KESHK and the authoring analyst do not have any interest in any companies recommended in this research report.

MKE may have, within the last three years, served as manager or co-manager of a public offering of securities for, or currently may make a primary market inissues of, any or all of the entities mentioned in this report or may be providing, or have provided within the previous 12 months, significant advice or investmentservices in relation to the investment concerned or a related investment.

OTHERS

Anal yst Certi fication o f Ind ependence

The views expressed in this research report accurately reflect the analysts personal views about any and all of the subject securities or issuers; and no part ofthe research analysts compensation was, is or will be, directly or indirectly, related to the specific recommendations or views expressed in the report.

Reminder

Structured securities are complex instruments, typically involve a high degree of risk and are intended for sale only to sophisticated investors who are capableof understanding and assuming the risks involved. The market value of any structured security may be affected by changes in economic, financial and politicalfactors (including, but not limited to, spot and forward interest and exchange rates), time to maturity, market conditions and volatility and the credit quality of anyissuer or reference issuer. Any investor interested in purchasing a structured product should conduct its own analysis of the product and consult with its ownprofessional advisers as to the risks involved in making such a purchase.

No part of this material may be copied, photocopied or duplic ated in any form by any means or redistributed with out the prior consent of MKE.

Definiti on of Ratings

Maybank Kim Eng Research uses the following rating system:

BUY Total return is expected to be above 10% in the next 12 months

HOLD Total return is expected to be between -10% to +10% in the next 12 months

SELL Total return is expected to be below -10% in the next 12 months

App lic abil it y of Ratings

The respective analyst maintains a coverage universe of stocks, the list of which may be adjusted according to needs. Investment ratings are only

applicable to the stocks which form part of the coverage universe. Reports on companies which are not part of the coverage do not carry investment ratingsas we do not actively follow developments in these companies.

Some common terms abbreviated in this report (where they appear):

Adex = Advertising Expenditure FCF = Free Cashflow PE = Price Earnings

BV = Book Value FV = Fair Value PEG = PE Ratio To Growth

CAGR = Compounded Annual Growth Rate FY = Financial Year PER = PE Ratio

Capex = Capital Expenditure FYE = Financial Year End QoQ = Quarter-On-Quarter

CY = Calendar Year MoM = Month-On-Month ROA = Return On Asset

DCF = Discounted Cashflow NAV = Net Asset Value ROE = Return On EquityDPS = Dividend Per Share NTA = Net Tangible Asset ROSF = Return On Shareholders Funds

EBIT = Earnings Before Interest And Tax P = Price WACC = Weighted Average Cost Of CapitalEBITDA = EBIT, Depreciation And Amortisation P.A. = Per Annum YoY = Year-On-Year

EPS = Earnings Per Share PAT = Profit After Tax YTD = Year-To-Date

EV = Enterprise Value PBT = Profit Before Tax


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MalaysiaMaybank Investment Bank Berhad(A Participating Organisation ofBursa Malaysia Securities Berhad)33rd Floor, Menara Maybank,100 Jalan Tun Perak,

50050 Kuala LumpurTel: (603) 2059 1888;Fax: (603) 2078 4194

SingaporeMaybank Kim Eng Securities Pte LtdMaybank Kim Eng Research Pte Ltd9 Temasek Boulevard#39-00 Suntec Tower 2Singapore 038989

Tel: (65) 6336 9090Fax: (65) 6339 6003

LondonMaybank Kim Eng Securities(London) Ltd6/F, 20 St. Dunstans HillLondon EC3R 8HY, UK

Tel: (44) 20 7621 9298Dealers Tel: (44) 20 7626 2828Fax: (44) 20 7283 6674

New YorkMaybank Kim Eng SecuritiesUSA Inc777 Third Avenue, 21st FloorNew York, NY 10017, U.S.A.

Tel: (212) 688 8886Fax: (212) 688 3500

Stockbroking Business:Level 8, Tower C, Dataran Maybank,No.1, Jalan Maarof59000 Kuala LumpurTel: (603) 2297 8888Fax: (603) 2282 5136

Hong KongKim Eng Securities (HK) LtdLevel 30,Three Pacific Place,1 Queens Road East,Hong Kong

Tel: (852) 2268 0800Fax: (852) 2877 0104

IndonesiaPT Kim Eng SecuritiesPlaza BapindoCitibank Tower 17th FloorJl Jend. Sudirman Kav. 54-55Jakarta 12190, Indonesia

Tel: (62) 21 2557 1188Fax: (62) 21 2557 1189

IndiaKim Eng Securities India Pvt Ltd2nd Floor, The International 16,Maharishi Karve Road,Churchgate Station,Mumbai City - 400 020, India

Tel: (91).22.6623.2600Fax: (91).22.6623.2604

PhilippinesMaybank ATR Kim Eng Securities

Inc.17/F, Tower One & Exchange PlazaAyala Triangle, Ayala AvenueMakati City, Philippines 1200

Tel: (63) 2 849 8888Fax: (63) 2 848 5738

ThailandMaybank Kim Eng Securities

(Thailand) Public CompanyLimited999/9 The Offices at Central World,20th- 21st Floor,Rama 1 Road Pathumwan,Bangkok 10330, Thailand

Tel: (66) 2 658 6817 (sales)Tel: (66) 2 658 6801 (research)

VietnamIn association with

Kim Eng Vietnam SecuritiesCompany1st Floor, 255 Tran Hung Dao St.District 1Ho Chi Minh City, Vietnam

Tel : (84) 838 38 66 36Fax : (84) 838 38 66 39

Saudi ArabiaIn association with

Anf aal Capi talVilla 47, Tujjar JeddahPrince Mohammed bin AbdulazizStreet P.O. Box 126575Jeddah 21352

Tel: (966) 2 6068686Fax: (966) 26068787

South Asia Sales TradingConnie [email protected]: (65) 6333 5775US Toll Free: 1 866 406 7447

North Asia Sales TradingEddie [email protected]: (852) 2268 0800US Toll Free: 1 866 598 2267

www.maybank-ke.com | www.kimengresearch.com.sg

maybank may 2013 issue

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