ed: KK / sa:WMT, CW, CS

Bumpy road ahead

Selling pressure from foreign institutional investors easing but

broader market remains weak

2Q18 corporate earnings and GDP disappointed

Weaker than expected government finances may crimp spending

going forward

Lower end-2018 target to 1,750 and introduce end-2019 target

of 1,910

Top picks: MAY, PBK, AXIATA, HLBK, GENT, KPJ, SDH and HIBI

KLCI outperforms amid receding selling pressure. KLCI’s 2.0%

gain in Aug outperformed regional markets, with net outflow from

foreign institutional investors easing after two consecutive months of

outflow. That said, performance of the broader market remained

lacklustre amid disappointing 2Q18 corporate earnings and Gross

Domestic Product (GDP).

Budget 2019 unlikely to boost market. We are changing our

previous view that Budget 2019 could boost the market, following

the new federal government’s recent revelation of RM35.4bn unpaid

tax refunds which could further weaken its finances. We believe this

could crimp the government’s spending going into 2019 which may

dampen overall economic growth prospects.

No catalysts, for now. Post 2Q18 earnings season, KLCI is currently

trading at 2018 PE of 17.9x which is above +1 SD of historical mean.

We cut end-2018 KLCI target to 1,750 (from 1,900) and introduce

end-2019 target of 1,910 based on 17x PE. While selling pressure

from foreign institutional investors has eased, we prefer

accumulation at lower levels given the lack of near term catalysts. We

continue to like banking, gaming and healthcare sectors which will

benefit from resilient domestic consumption. As such, we reiterate

Maybank, Public Bank, Hong Leong Bank, Genting Bhd and KPJ

Healthcare as our top picks. We drop British American Tobacco from

our top pick following our recent downgrade. We also like Axiata as

we believe negatives have been priced in. We remain upbeat on the

oil and gas sector on expected recovery in global capital expenditure

(capex) by oil majors. We prefer companies with overseas exposure

with strong earnings visibility given national oil company Petroliam

Nasional Berhad’s (Petronas) prudent spending stance. We add Serba

Dinamik while retaining Hibiscus as top picks for the sector. We drop

Sapura Energy and Wah Seong from our top picks until concerns

over share overhang from Sapura Energy’s massive cash call and Wah

Seong’s contract replenishment are lifted.

KLCI : 1,813.58 Analyst Bernard CHING Malaysian Research Team +603 2604 3918 +603 2604 3333 bernard@alliancedbs.com general@alliancedbs.com

Market Key Data

(%) EPS Gth Div Yield

2017A 7.2 3.0

2018F 5.8 3.0

2019F 10.1 3.1

(x) PER PB

2017A 18.9 1.8

2018F 17.9 1.8

2019F 16.2 1.7

Source: Bloomberg Finance L.P.

STOCKS

12-mth

Price Mkt Cap Target Performance (%)

RM US$m RM 3 mth 12 mth Rating

Maybank 10.02 26,540 11.80 0.4 5.9 BUY Public Bank 25.12 23,631 28.20 4.6 21.9 BUY

Hong Leong Bank

20.40 10,112 23.50 7.4 32.1 BUY

Axiata Group 4.71 10,351 5.05 7.1 (4.5) BUY Genting Berhad 8.42 7,832 12.15 (5.9) (13.3) BUY KPJ Healthcare 1.14 1,161 1.30 8.6 9.6 BUY Serba Dinamik Holdings

3.85 1,370 5.20 15.6 83.3 BUY Hibiscus Petroleum Berhad

1.02 393 1.46 12.1 142.9 BUY

Source: DBS Bank, AllianceDBS, Bloomberg Finance L.P.

Closing price as of 3 Sep 2018

DBS Group Research . Equity

4 Sep 2018

Malaysia Market Focus

Malaysia Strategy

Refer to important disclosures at the end of this report

Market Focus

Malaysia Strategy

Page 2

Market Review

KLCI continued its rebound in Aug with a gain of 2% despite a

disappointing 2Q18 GDP growth of 4.5% and lacklustre

corporate earnings. Given the strong performance, it is not

surprising that outflow from foreign institutional investors has

eased following three consecutive months of outflow in May-

Jul. However, the strong performance of the benchmark index

was not reflective of the broader market as the FBM Small Cap

Index and FBM ACE Index both fell 2.2% in Aug.

At the first parliamentary sessions after the 14th General

Elections (GE14), new legislation for the much awaited Sales

and Services Tax (SST) was passed while the Goods and

Services Tax (GST) was repealed. Uncertainty over the fiscal gap

of the nation has eased somewhat with Fitch reaffirming

Malaysia’s sovereign credit rating of A-. That said, the recent

revelation by the new federal government of unpaid GST input

tax refunds of RM19.3bn and income tax and real property

gain tax refunds of RM16.1bn has thrown a spanner into the

works.

YTD performance of FBM KLCI, Small Cap and ACE indices

Source: AllianceDBS, Bloomberg

Net foreign flow

Source: Bursa Malaysia

2Q18 earnings letdown

Corporate earnings disappointed again in 2Q18. Within

AllianceDBS’ coverage, 30% of companies reported negative

surprises, while 10% reported positive surprises. Companies

that met earnings expectations made up the remaining 60%

of our coverage universe vs 55% in 1Q18.

The automotive (higher sales volume), non-financial (solid

financing growth by AEON Credit Service Malaysia (ACSM)),

and gaming (driven by Genting Malaysia) sectors beat our

expectations.

The building materials (intense price competition, subdued

demand), construction (slower-than-expected work progress,

thinner margins), consumer (lower sales), electronic

manufacturing services or EMS (production hiccups), media

(weak advertising expenditure (adex)), plantation (low average

crude palm oil (CPO) prices), shipping (weak charter rates), oil

& gas (slower recovery) and telecommunications (foreign

exchange (FX) losses, lower average revenue per user (ARPU))

sectors posted negative surprises.

2Q18 summary of financial performance

Performance vs AllianceDBS (%) vs consensus (%)

Above 10% 8% In-line 60% 59% Below 30% 34%

Source: AllianceDBS

Following the 2Q18 earnings season, our CY18 and CY19 KLCI

earnings estimates have been cut by 2.9% and 1.7%, largely

due to earnings cuts on banking stocks such as Public Bank,

CIMB and Maybank on lower net interest margin (NIM) and

non-interest income. Post earnings revision, KLCI earnings

growth for CY18 and CY19 has been revised to 5.8% and

10.1%, respectively, from 9.1% and 8.7%, previously.

0.9%

-16.3%

-21.8%

-30.0%

-25.0%

-20.0%

-15.0%

-10.0%

-5.0%

0.0%

5.0%

10.0%

2-J

an

12

-Jan

22

-Jan

1-F

eb

11

-Feb

21

-Feb

3-M

ar

13

-Mar

23

-Mar

2-A

pr

12

-Ap

r

22

-Ap

r

2-M

ay

12

-May

22

-May

1-J

un

11

-Ju

n

21

-Ju

n

1-J

ul

11

-Ju

l

21

-Ju

l

31

-Ju

l

10

-Au

g

20

-Au

g

30

-Au

g

FBM KLCI FBM Small Cap FBM ACE

0.51.0

4.4

2.72.1

0.3 0.4

-0.8-0.2 -0.1

0.9

3.4

-1.1 -0.1

1.5

-5.6

-4.9

-1.7-0.7

-3.4

-1.3 -1.5

-0.2

1.00.4

-1.1

1.70.9

-0.5

3.24.0

1.5

0.3

-8.0

-6.0

-4.0

-2.0

0.0

2.0

4.0

6.0

Jan

-17

Feb

-17

Ma

r-17

Ap

r-1

7

Ma

y-1

7

Jun

-17

Jul-

17

Au

g-1

7

Sep

-17

Oct

-17

No

v-1

7

De

c-17

Jan

-18

Feb

-18

Ma

r-18

Ap

r-1

8

Ma

y-1

8

Jun

-18

Jul-

18

Au

g-1

8

Foreign Institutional Local InstitutionalInflow/(Outflow)RM bn

Market Focus

Malaysia Strategy

Page 3

FBMKLCI free float-weighted earnings change (calendarised)

Aug-18

Jul-18

Change

% Change

CY18 CY19

CY18 CY19

CY18 CY19

CY18 CY19

RM m RM m

RM m RM m

RM m RM m

Axiata Group Bhd 242.5 349.1 272.6 331.9 -30.1 17.2 -11.0% 5.2% CIMB Group Holdings Bhd 1,995.6 2,411.1 2,217.1 2,620.9 -221.5 -209.8 -10.0% -8.0% DiGi.Com Bhd 255.2 257.0 255.2 257.0 0.0 0.0 0.0% 0.0% Dialog Group 188.5 218.9 193.3 215.3 -4.8 3.6 -2.5% 1.7% Genting Malaysia Bhd 864.7 937.4 828.5 903.4 36.1 34.0 4.4% 3.8% Genting Bhd 1,551.9 1,697.1 1,480.3 1,606.3 71.5 90.8 4.8% 5.7% Hap Seng Consolidated 218.5 218.5 218.5 218.5 0.0 0.0 0.0% 0.0% Hartalega Holdings 136.2 154.6 136.2 154.6 0.0 0.0 0.0% 0.0% Hong Leong Bank Bhd 433.7 460.7 429.9 459.0 3.8 1.7 0.9% 0.4% Hong Leong Financial Group Bhd 323.3 348.0 321.7 347.1 1.6 1.0 0.5% 0.3% IHH Healthcare Bhd 60.2 137.7 105.5 130.0 -45.4 7.7 -43.0% 5.9% IOI Corp Bhd 247.4 247.1 248.4 247.1 -1.0 0.0 -0.4% 0.0% KLCCP Stapled Group 34.4 35.0 34.4 35.0 0.0 0.0 0.0% 0.0% Kuala Lumpur Kepong Bhd 305.9 337.8 305.9 337.8 0.0 0.0 0.0% 0.0% Malaysia Airports Holdings 239.6 320.6 239.6 320.6 0.0 0.0 0.0% 0.0% Maxis Bhd 243.0 250.5 243.0 250.5 0.0 0.0 0.0% 0.0% Malayan Banking Bhd 2,605.9 2,921.2 2,775.0 2,999.6 -169.1 -78.4 -6.1% -2.6% MISC Bhd 240.4 276.7 260.2 288.7 -19.9 -12.0 -7.6% -4.2% Nestle Malaysia Bhd 113.3 122.3 113.3 122.3 0.0 0.0 0.0% 0.0% Public Bank Bhd 3,590.4 3,922.8 3,775.6 4,147.9 -185.1 -225.1 -4.9% -5.4% Petronas Chemicals Group Bhd 853.6 886.5 820.1 858.5 33.5 28.1 4.1% 3.3% PPB Group Bhd 353.3 374.6 353.3 374.6 0.0 0.0 0.0% 0.0% Petronas Dagangan BHD 240.1 246.8 240.1 246.8 0.0 0.0 0.0% 0.0% Press Metal Bhd 240.5 328.4 244.0 332.1 -3.4 -3.8 -1.4% -1.1% Petronas Gas Bhd 407.3 420.4 407.3 420.4 0.0 0.0 0.0% 0.0% RHB Bank Bhd 423.4 458.0 415.7 456.6 7.7 1.3 1.8% 0.3% Sime Darby Plantation Bhd 461.0 477.4 500.6 517.3 -39.6 -39.9 -7.9% -7.7% Sime Darby Bhd 242.3 280.1 248.3 275.5 -6.0 4.5 -2.4% 1.6% Telekom Malaysia Bhd 157.7 156.0 171.9 172.7 -14.2 -16.7 -8.3% -9.7% Tenaga Nasional Bhd 2,470.7 2,484.1 2,471.5 2,457.4 -0.7 26.7 0.0% 1.1% FBMKLCI (Free-float weighted) 19,740.3 21,736.2 20,327.2 22,105.5 -586.9 -369.3 -2.9% -1.7%

* Earnings for stocks based on consensus estimates Source: AllianceDBS, Bloomberg Finance L.P

Market Focus

Malaysia Strategy

Page 4

Sector performance

Sector 2Q18

(RM m)

2Q17

(RM m)

Y-o-y

change %

vs

expectation

Comments

Automotive 286.262 11.072 2485% Above Sales volume were higher following the tax holiday period

Aviation 612.99 389.18 57.5% In line Pax growth eased in 2Q18 impacted by election-related uncertainties. Airlines saw margin compression from higher jet fuel costs with minimal pass-on via higher fares.

Banking 6,619.00 5,947.75 11.3% Inline Loan growth during the quarter was mainly driven by the retail segment, while NIMs were mostly lower due to deposit re-pricing following the OPR rate hike in January 2018. A softer capital market environment also resulted in lower non-interest income, particularly fee income, investment income and foreign exchange (forex) income.

Building Materials

(Cement)

7.85 15.05 (47.9%) Below Earnings were mainly affected by widening losses by

Lafarge due to price competition amid overcapacity in the

industry, as well as subdued demand.

Construction 337.24 510.58 (33.9%) Below Generally, a poor set of numbers apart from Muhibbah and IJM which met expectations.

Consumer 440.52 501.63 (12.2%) Below Mainly dragged by British American Tobacco (due to persistently high illicit cigarettes trade)

Electronics

Manufacturing Services

46.89 84.33 (44.4%) Below Temporary production hiccups dampened the local EMS strong growth momentum in the quarter. Nonetheless, we continue to be positive of the sector’s prospects and believe growth momentum will stabilise to c.30% in the next quarter.

Financial non-bank 129.60 114.73 13.0% Above Led by solid growth in personal financing and auto financing (including moped easy payments) at ACSM.

Gaming 1,131.06 1,069.61 5.7% Above The stronger-than-expected 4QCY17 results largely stemmed from the Genting group, due to Genting Malaysia’s higher-than-expected contributions from both its Malaysian and UK operations. Magnum’s quarterly earnings also came above expectations due to improved 4D Jackpot sales.

Glove 287.907 225.029 28% In-line Earnings supported by higher sales volume amidst compressing margins due to higher operation costs

Healthcare 55.06 510.12 (89.2%) Below IHH's 1H core earnings (excluding exceptional items) came below expectations, mainly impacted by forex fluctuations from the strengthening of the Ringgit and USD.

Media 117.44 169.08 (30.5%) Inline Newspaper media is still weak due to declining adex and circulation. Meanwhile, TV adex rebounded in 2Q18 due to Hari Raya festive season; GE14 and FIFA World Cup.

Oil & Gas 142.76 331.79 (57.0%) Below Although we see some bright spots in the mid-cap and niche segment players in the local oil & gas space, recovery for the bigger players has been slower than expected as margin compression and slowdown in work orders continued to drag down overall performance.

Plantation 851.38 1,164.71 (26.9%) Below Decline in average CPO prices was exacerbated by weaker production y-o-y by Malaysia-based estates. Certain players were cushioned by stabilised downstream margins or steady Indonesian operations.

Market Focus

Malaysia Strategy

Page 5

Sector performance (cont’d)

Sector 2Q18

(RM m)

2Q17

(RM m)

Y-o-y

change

%

vs

expectation

Comments

Port 123.80 140.89 (12.1%) In line Container handling throughput at Port Klang is stabilising as y-o-y transhipment decline is moderating, while gateway volumes remain strong.

Property 350.15 317.07 10.4% In line SP Setia missed expectations due to high operating cost and the absence of lumpy recognition from overseas projects.

REIT 524.88 384.62 36% In-line Lower contribution from the office and retail segment.

Shipping 311.70 539.78 (42.3%) Below Petroleum charter rates remained weak in the low season. Liquefied natural gas (LNG) charter rates not yet out of structural decline, but has started to improve due to Asia-based demand.

Technology 102.40 139.90 (26.8%) Inline Positive forex impact from the weakening Ringgit. Meanwhile, selective stocks were still temporarily affected by inventory adjustments in the smartphone supply chain before the ramp-up in the upcoming quarters

Telecommunication 1,224.83 1,458.54 (16.0%) Inline Mobile operators fared relatively well given stable competition in the domestic market. On the other hand, TM suffered from regulatory and competitive pressures due to the implementation of MSAP (Mandatory Standard on Access Pricing)

Utilities 2,372.27 2,107.79 12.5% In line Utilities players continued to deliver steady and resilient earnings in tandem with the regulated framework

Total 15,811.00 16,101.34 -3.4%

Source: AllianceDBS

Market Focus

Malaysia Strategy

Page 6

Market Outlook

We had previously anticipated that the unveiling of Budget

2019 by the new federal government would provide clarity on

the health of government’s finances and its ability for further

fiscal spending. The fiscal gap from the abolishment of GST

has been partly funded by the successful implementation of

SST effective 1 Sep. Furthermore, Petronas has revealed that it

will raise its dividend payment to the federal government from

RM16bn in 2017 to RM24bn given higher oil prices vs its

previous guidance of RM19bn. However, the recent revelation

of unpaid tax refunds totalling RM35.4bn, which is equivalent

to 8.7% of the government’s budgeted total expenditure in

2018 (3.0% of 2017’s real GDP), has significantly crimped the

government’s financial position. We now believe the

government will need to make deeper spending cuts in 2019

which will dampen the overall economic growth prospects.

DBS economists are projecting Malaysia’s GDP growth to

moderate from 5.9% in 2017 to 4.7% and 4.5% in 2018 and

2019 respectively.

Post 2Q18 earnings season, KLCI is currently trading at 2018

PE of 17.7x which is above +1 SD of historical mean. We cut

end-2018 KLCI target to 1,750 (from 1,900) and introduce

end-2019 target of 1,910 based on 17x PE. While selling

pressure from foreign institutional investors has eased, we

prefer accumulation at lower levels given the lack of near term

catalysts. We continue to like banking, gaming and healthcare

sectors which will benefit from resilient domestic consumption.

As such, we reiterate Maybank, Public Bank, Hong Leong

Bank, Genting Bhd and KPJ Healthcare as out top picks. We

drop British American Tobacco from our top pick following our

recent downgrade to hold. We also like Axiata as we believe

negatives have been priced in.

While we remain sanguine on the oil & gas sector on

expectations global capex recovery by the oil majors supported

by higher crude oil prices, prospects for Malaysian-centric oil &

gas service providers have been dampened by Petronas’

continued prudent stance in its capex spending. Following the

release of its 1H18 financial results, Petronas has lowered its

capex guidance for 2018 from RM55bn to RM40-50bn. Poor

2Q18 corporate results for the sector have further dampened

sentiment. As such, we favour companies with overseas

exposure and strong earnings visibility. We add Serba Dinamik

while retaining Hibiscus as top picks for the sector. We drop

Sapura Energy although it remains a buy. While we believe its

recent selldown following the announcement of a massive

cash call was overdone, the stock is unlikely to perform in the

near term pending the completion of the cash call. Wah Seong

is also dropped but remains a buy, as we await better clarity

on contract replenishment while it runs down its existing order

book which is largely underpinned by the Nord Stream 2 gas

pipeline project.

FBMKLCI PE trend

Source: Bloomberg Finance L.P, AllianceDBS

FBMKLCI earnings growth trend

Source: AllianceDBS

KLCI earnings growth breakdown by sectors

Source: AllianceDBS

15.8x

14.7x

16.9x

14.00

14.50

15.00

15.50

16.00

16.50

17.00

17.50

18.00

Jan

-14

Ap

r-1

4

Jul-

14

Oct

-14

Jan

-15

Ap

r-1

5

Jul-

15

Oct

-15

Jan

-16

Ap

r-1

6

Jul-

16

Oct

-16

Jan

-17

Ap

r-1

7

Jul-

17

Oct

-17

Jan

-18

Ap

r-1

8

Jul-

18

P/EKLCI P/E Average +1 SD -1 SD

7.2%5.8%

10.1%

-50%

-40%

-30%

-20%

-10%

0%

10%

20%

30%

40%

50%

60%

0.8%

1.3%

1.8%

3.5%

3.9%

4.1%

4.4%

5.7%

6.0%

10.9%

57.6%

0% 10% 20% 30% 40% 50% 60% 70%

Consumer

Utilities

Shipping

Plantation

Healthcare

Aviation

Basic Materials

Telco

Others

Gaming

Banking

KLCI CY19 Earnings Growth Contributors

Market Focus

Malaysia Strategy

Page 7

Summary of sector call

Sector call Rationale

Overweight

Banks Retail-driven loan growth and pick up in corporate

activities towards the latter half of the year.

Gaming Progressive launches of the Genting Integrated Tourism

Plan (GITP) continue to attract visitors. Earnings

prospects of the number forecast operators (NFOs) could

improve, should the new administration intensify its

efforts in curbing illegal NFOs.

Healthcare Cyclical recovery for private healthcare amid improved

macro conditions.

Oil & gas Improving global capex spending amid rebound in crude

oil prices.

Neutral

Automotive Volume to go through some fluctuation from the

removal of GST and implementation of SST, but should

normalise thereafter. Given the favourable exchange

rates, auto players should be able to register better

margins.

Aviation Air travel boost from improvement in consumption but

offset by up-pricing as higher fuel prices are passed on.

Construction Sector discount to persist until there is clarity on existing

and new contract flows. The High Speed Rail (HSR)

project has been deferred for two years

Consumer () Rebound in consumer spending could drive growth of

the sector. Cost issues remain a key risk to watch.

EMS Proxy for electrical and electronics (E&E) exports growth

at cheaper valuation than the technology sector.

Media Uncertainties stemming from potential new entrants and

the government’s stance on media companies owned by

political parties. On the bright side, adex might recover

on improving consumer sentiment.

Plantation CPO price outlook remains lukewarm, although it could

see support if production growth wanes.

Property Weak sentiment, low affordability and increasing supply

will continue to dampen property sales.

REITs Improving consumer sentiment could be positive for real

estate investment trusts (REITs). However, we are still

cautious on oversupply in the market. Organic growth to

be flattish going forward; office REITs face greater risk.

Shipping Charter rates remain mild before major industry-wide

scrapping of capacity.

Technology Earnings growth remains supported by content wins

amid positive forex tailwinds. Nonetheless, sentiment

could be dampened if US-China trade war escalates

further.

Telco Stable competition but muted growth outlook due to

transition from legacy voice/SMS to data. Regulatory

pressure could be an issue especially for fixed-line

players.

Utilities Subdued earnings growth prospects for utilities players

in view of the lacklustre outlook for energy demand.

Underweight

Building

materials

(cement)

Margin erosion due to overcapacity, sluggish demand

and rising input costs.

Glove Stretched valuations unjustified as glove players face

headwinds from higher operation costs. Expect margin

compression in the near term.

Source: AllianceDBS

Market Focus

Malaysia Strategy

Page 8

Top Stock Picks

Maybank (TP: RM11.80): We find Maybank’s (MAY) position as

the largest bank in the nation to be highly advantageous in the

current operating environment. Its strong current account,

savings account (CASA) base shields its cost of funds from

upside pressures emanating from deposit competition and a

potential rate hike. MAY’s large balance sheet is strongly

anchored in corporate loans, whose growth will likely track the

pick-up in GDP growth. In the near term, MAY may benefit

from a short term auto loan recovery amid the 3-month tax

holiday before SST comes into effect. MAY is one of the few

relevant banks in auto loans. Its other sweet spot lies in its

attractive dividend yield of 5%.

Public Bank (TP: RM28.20): Public Bank’s (PBK) 2Q18 results

were still resilient and sustainable despite NIM pressure from

deposit competition and lower non-interest income. Its growth

drivers remain on the retail front (mortgages and small

medium enterprise (SME)), which have been key to industry

loan growth thus far. Further, PBK’s ability to maintain solid

asset-quality indicators even after the adoption of Malaysian

Financial Reporting Standard 9 (MFRS9) and its best-in-class

cost-to-income ratio, coupled with efficient capital

management, should keep valuations ahead of its peers. PBK

had received its Additional Tier-1 (AT1) capital programme

approved for up to RM10bn. PBK has approximately RM2bn of

capital instruments maturing in 2019. The approved AT1

capital programme should save PBK at least 2ppts of interest

cost. This, together with its active liability management, should

ensure that cost of funds remain low.

Hong Leong Bank (TP: RM23.50): Hong Leong Bank (HLB)

recorded strong FY18 earnings on the back of improvements

across the board, notably in its Islamic business and non-

interest income. Recoveries were also a crucial contributor to

its bottom line, which was also supported by income from its

associate Bank of Chengdu Limited (15% of HLB’s pre-tax

profit). Loan growth is guided to track the industry, while cost-

to-income ratio is targeted to be below 43% as it expects to

incur more IT-related expenses from its digitalisation initiative.

Over the medium term, this is expected to fall below 40%.

Genting Bhd (TP: RM12.15): Genting Bhd (GENT) is expected

to re-rate going forward, supported by the progressive

launches of key developments in the Genting Integrated

Tourism Plan (GITP) where the indoor and outdoor theme

parks are slated to open by end 2018 and 1H2019

respectively. An earnings recovery is also expected at Genting

Singapore (GENS). As the parent company of GENS and

Genting Malaysia (GENM), we believe that GENT offers a

cheaper exposure to both of these subsidiaries. Its valuation is

more attractive compared to GENS and GENM.

Axiata (TP: RM5.05): Share price has retreated by 21% YTD,

and we believe this has largely priced in the near term weak

performance by Axiata’s operating subsidiaries. We expect to

see gradual improvements in Celcom and XL’s results over the

next 12 months, which will be the key catalysts to drive the

recovery in share price. Asset monetisation of its stake in

edotco and Idea-Vodafone will be a bonus, if it materialises.

Axiata currently trades at an attractive valuation of 6.6x

EV/EBITDA, which is -1.5SD below its 5-year average.

KPJ Healthcare (TP: RM1.30): KPJ’s earnings prospects are

turning positive due to improving patients’ affordability

following a gestation period for new hospitals after the

implementation of GST in 2015. Recent performance has

shown nascent signs of inpatient volume recovery, in line with

a recovery in consumer sentiment. We expect the recovery to

gather momentum in FY18 which will be boosted further by

margin expansion, following the abolishment of GST and

lower costs of imported drugs due to the recent strengthening

of the Ringgit. Active share buy-backs by the company since

end-2017 should also help improve investor confidence.

Serba Dinamik (TP: RM5.20): Serba Dinamik’s focus is on its

operations and maintenance (O&M) business that has proven

to be resilient even during the low crude oil price environment.

We forecast revenue/earnings to grow at a 3-year CAGR of

22%/23% in FY18-FY20. This will be supported by, 1) stronger

market reputation and penetration, 2) higher demand for

maintenance services, and 3) expansion of engineering,

procurement, construction and commissioning (EPCC) work.

Middle East will still be one of Serba’s key markets with

revenue contribution c.40% (historical 60%).We believe there

is room for further upside to our earnings forecast, owing to

potential contract wins with higher margins.

Hibiscus (TP: RM1.46) managed to undertake opportunistic

acquisitions of the Anasuria Cluster in the North Sea and the

North Sabah enhanced oil recovery (EOR) production sharing

contract (PSC). The completion of the acquisition of the

Anasuria Cluster in March 2016 led to a turnaround for the

company from an FY16 core net loss of RM145m to an FY17

core net profit of RM29m. The completion of the acquisition of

the North Sabah EOR PSC on 31 Mar 2018 is set to more than

double its earnings in FY19. Recent enhancement works on

the Anasuria Cluster and an ongoing oil price rebound would

be further icing on the cake that underpins our FD core EPS

CAGR forecast of 85% over FY18-21F.

.

Please refer to pages 9 -11 for detailed key investment merits

of these stock picks.

Market Focus

Malaysia Strategy

Page 9

Top stock picks

Source: AllianceDBS Price date: 3 Sep 2018

Top Stock Picks

Stocks Key Investment Merits

Maybank A strong base for growth. Maybank (MAY) has made efforts to stave off asset-quality pressure and more importantly

grow its top line. Despite softer loan growth, the bank’s top line growth has centred on its ability to price its loans and

deposits well. Expenses have also been under control. Its regional operations have recovered from a bad patch and

should be gearing for growth. Its strong capital position (at the highest levels vs peers) and sustained high dividend

payouts remain the sweeteners. While we are still positive on MAY’s 2018 prospects given its loan franchise in key

growth markets and a more managed credit cost level, the restructuring angle could provide positive surprises. Spinning

off its insurance business and potentially creating more value for its Islamic banking outfit are further re-rating catalysts if

they materialise.

Potential catalyst. Upside from possible spinoffs. We reiterate our view on the value creation from Maybank Islamic and

ETIQA Insurance spinoff, which could add RM0.40 to our TP that is based on sum-of-parts (SOP) valuation (refer to report

‘Maybank: Reduced uncertainties’ dated 20 April 2017). We complement our Gordon Growth Model valuation with an

SOP valuation that conservatively assumes 1.5x BV transaction price for ETIQA. For every 0.5x increase in BV transaction

price, we estimate that it adds another RM0.20 to our TP. Separately, we value Maybank Islamic at 1.9x BV, on par with

BIMB.

Valuation. BUY with TP of RM11.80 based on the Gordon Growth Model (assuming 11% ROE, 4% growth and 9.5%

cost of equity), equivalent to 1.6x FY19 BV.

Public Bank A sustained outperformer. Public Bank (PBK) remains an overachiever when it comes to earnings delivery. According to

Bloomberg data, PBK’s positive earnings surprise in terms of trouncing consensus estimates happened in 8 out of 10 of

its previous financial periods. PBK remains a dominant market leader in its target segment – residential, commercial

mortgages and hire purchase – given its above industry growth (2010 to date CAGR; PBK: +11.1% vs industry: +10.1%).

PBK’s non-performing loan (NPL) ratio has been maintained at <1.0% since 2011 (industry range: 0.9-3.2%). Given

PBK’s superior track record, its 10-year annualised return of c.15% far outperforms the return of peers in the Kuala

Lumpur Finance Index at c.5%. Better-than-expected NIM management could provide an upside to our earnings

forecasts. PBK should continue focusing on stronger fee income growth to ensure that its earnings growth does not

deteriorate significantly. Contribution from its asset-management business will continue to set the bank apart from its

peers.

Potential Catalyst. Sustained strong earnings delivery remains a catalyst for PBK in addition to its superior sustainable

asset-quality metrics. PBK is well positioned to withstand industry headwinds and also benefit from a macro recovery

given its superior operating efficiency (lowest cost-to-income ratio) and sustained profitability metrics (above industry

ROE).

Valuation. BUY with TP of RM28.20 based on the Gordon Growth Model (assuming 15% ROE, 9% cost of equity, 4%

long-term growth), equivalent to 2.4x FY19 BV.

Recommend

ationTarget Price Current Price

Market Cap

(RM)CY2018 CY2019 CY2018 CY2019 CY2018 CY2019 CY2018 CY2019 CY2018 CY2019

Maybank BUY 11.80 10.02 109,526.1 14.0x 12.7x (0%) 10% 5.4% 5.6% 1.4x 1.4x 10% 11%

Public Bank BUY 28.20 25.12 97,519.3 17.2x 15.7x 3% 9% 2.5% 2.7% 2.4x 2.2x 14% 14%

Hong Leong Bank BUY 23.50 20.40 41,730.2 15.4x 14.5x 14% 6% 2.6% 2.9% 1.7x 1.6x 11% 12%

Axiata BUY 5.05 4.71 42,718.3 39.0x 27.1x 19% 44% 2.2% 3.1% 1.7x 1.7x 4% 6%

Genting BUY 12.15 8.42 32,320.2 11.8x 10.8x 83% 9% 0.6% 0.6% 0.9x 0.8x 8% 8%

KPJ Healthcare BUY 1.30 1.14 4,790.2 26.4x 24.4x 9% 8% 1.5% 1.6% 2.6x 2.5x 10% 10%

Serba Dinamik BUY 5.20 3.85 5,653.7 14.7x 12.0x 24% 23% 2.2% 2.5% 2.5x 2.3x 22% 21%

Hibiscus Petroleum BUY 1.46 1.02 1,620.0 7.6x 7.0x 34% 9% 0.0% 0.0% 1.6x 1.4x 24% 22%

Price/ BVPS ROAEP/E EPS Growth (YoY) Dividend Yield

Market Focus

Malaysia Strategy

Page 10

Top Stock Picks (cont’d)

Stocks Key Investment Merits

Hong Leong Bank Conservative yet solid. Its financial year end is in June. With the adoption of MFRS9 on 1 Jul 2018, we are assuming

credit costs to be a little higher at 13bps and recoveries to gradually taper off. NIM is expected to stay stable. Loan

growth has been guided to track the industry in FY19. The bank is targeting to lower its cost-to-income ratio to <40%

over the medium term. More importantly, the bank remains solid in terms of capital and asset quality.

BOCD listed, finally. Bank of Chengdu (BOCD), HLB’s associate, has finally listed its shares on the Shanghai Stock

Exchange. As HLB did not participate in the initial public offering (IPO), its stake in BOCD was slightly diluted as the

issuance size was relatively small. From its previous stake of 19.99%, its stake was diluted to 18%. As such, there should

be minimal impact to HLB’s earnings. HLB continues to equity account for this investment. BOCD’s contribution to HLB’s

pre-tax profit remains at 15-16%.

Potential catalyst. Loosening its grip on liquidity. What remains a resistance is the bank’s conservative stance on tight

liquidity by keeping loan-to-deposit ratio one of the lowest in the industry. Should the bank decide to loosen this metric,

we believe there will be a lot more upside it can achieve in terms of NIM, earnings and ROE. HLB’s digital agenda could

also add a twist to valuations.

Valuation. BUY with TP of RM23.50 based on the Gordon Growth Model (assuming 12% ROE, 4% growth and 8% cost

of equity), equivalent to 1.9x CY19 BV.

Axiata Celcom – margins improvement. Margins should gradually improve from FY19 onwards, notwithstanding the fact that

margins could remain subdued in the near term due to digitisation initiatives and aggressive network investment in FY18.

This would be underpinned by cost optimisation efforts, while network investment should also start to taper off, as

Celcom has already caught up with its peers in terms of 4G network coverage.

XL – positive structural changes. Early signs are pointing towards a recovery for Indonesian mobile sector in 2H18 as

incumbents start to raise data pricing. With high service revenue exposure to data (60-70%), XL is well-positioned to

capitalise on improving data yields in Indonesia.

Key catalyst. A strong turnaround in Celcom and XL’s performance will be the key catalysts for the stock to re-rate.

Disposal of stakes in associates could also help to pare down Axiata’s gearing level and proceeds can be re-deployed for

other purposes. Lastly, the IPO of its tower arm edotco should also boost sentiment for the stock and provide price

discovery for the business unit.

BUY, TP of RM5.05 based on SOP valuation.

Genting Let’s enjoy the game! We maintain our BUY recommendation on Genting Bhd (GENT). We believe that progressive

launches of key developments in the Genting Integrated Tourism Plan (GITP) and expected earnings recovery in Genting

Singapore (GENS) will improve the growth prospects for the group.

Improving earnings prospects from GITP launches. We are positive on GITP launches as we foresee improving earnings

prospects for the group from, (1) additional gaming capacity arising from GITP’s launch and, (2) weak Ringgit to attract

more foreign tourist visitations and encourage more local visitations, which could benefit Genting Malaysia (GENM).

Ride on GENS’ sustained earnings recovery. Despite the recent rally, GENS still offers compelling value as it trades close to

–1SD of its EV/EBIDTA mean of 9x. In addition, it trades at a c.35% discount to its Macau peers on an EV/EBITDA basis.

With continued earnings recovery and potentially winning the Japanese casino bid in the medium term, we believe GENS

could re-rate closer to its average EV/EBITDA multiple of c.13x

BUY, TP of RM12.15. We keep our BUY recommendation for GENT with a target price of RM12.15, based on SOP

valuation. We believe that GENT offers a lower entry point for exposure to both subsidiaries.

Market Focus

Malaysia Strategy

Page 11

Top Stock Picks (cont’d)

Stocks Key Investment Merits

KPJ Healthcare Healthier prospects ahead. We are positive on KPJ Healthcare Bhd’s (KPJ) earnings prospects due to the, (1) waning effect

of declining patients’ affordability following the implementation of GST in 2015 and, (2) hospitals opened since 2012 are

all EBITDA positive. Furthermore, we do see value emerging as KPJ is currently trading at -1SD of its historical mean.

Operational statistics have improved. Recent performance has indicated >4% rebound in patient volume growth, in line

with the recovery in consumer sentiment. The strengthening private consumption and the new government’s proposed

healthcare scheme to provide RM500 per year for Bottom 40 (B40) families to visit private clinics could sustain the

sector’s recovery.

Margins could expand. Profit margins could have room to expand due to, (1) the abolishment of GST as KPJ have been

absorbing the 6% GST input tax on drugs and medicine under the exempt supply and, (2) lower cost of imported drugs

due to recent strengthening of the Ringgit.

BUY, TP of RM1.30. We maintain our BUY recommendation for KPJ with a target price of RM1.30, based on SOP

valuation. The active share buy-back by the group since end-2017, should also help to improve investor confidence in the

stock.

Serba Dinamik O&M segment to drive growth. The O&M segment contributed c.86%/87% of revenue/operating profit in FY17. As oil

prices recover and stabilise over the longer term, we expect operational activities to return which would lead to more

demand for maintenance work. We forecast this segment to remain Serba’s main revenue/operating profit contributor

with a 5-year CAGR of 20%/18% in FY15-FY20. We expect Malaysia’s revenue contribution to grow to c.50% in

FY19/20 from historical c.30% due to the execution of the large scale Pengerang maintenance hub project. Having said

that, we believe Middle East will still be one of Serba’s key markets with revenue contribution c.40% (historical 60%).

Sizeable order book wins. Total contract wins announced YTD amount to RM1.6bn (O&M: RM600m, EPCC RM1bn). Our

order book replenishment assumption is at RM2.5bn for FY18. EPCC wins will ultimately support Serba’s O&M segment

as the group tends to package its EPCC tenders together with long term maintenance contracts. Furthermore, over

RM1bn expiring O&M contracts have been renewed YTD.

Active tenders to support growth. Total outstanding order book is estimated at RM6.9bn (O&M: RM4.6bn, EPCC

RM2.3bn). This will provide good earnings visibility until 2021. The group’s tender book stands at RM10bn. On tendering

activities, we understand that the majority of contract bids are in Malaysia, Southeast Asia, Central Asia (Turkmenistan,

Kazakhstan and Uzbekistan) and Africa (Senegal, Côte d'Ivoire and Guinea).

BUY, TP of RM5.20. Our SOP target price stands at RM5.20, based on 9% WACC for its utility assets, while its O&M and

EPCC segments are pegged to an FY19F PE of 15x. Serba’s premium valuation is justified by its strong EPS CAGR of 23%

over FY18-20F which remains at a discount to global O&M peers.

Hibiscus

Petroleum

Enhancement works on Anasuria Cluster to increase daily production. In FY18, Hibiscus’s net production came in at an

average of c.2,945 boe/day (oil: c.2,705 bbl/day and gas 240 boe/day). It targets to increase its net oil production to

3,500 bbl/day in FY19. Management is currently working on enhancement projects throughout 2018-2020 with a

budgeted capex of USD109m to be funded by internally generated funds and proceeds from its recent private

placement. The estimated net oil production after completion of the enhancement projects is 5,000 bbl/day. A 1%

increase in total production for the Anasuria Cluster will improve earnings by 1.4% in FY19.

Earnings accretion from North Sabah EOR PSC to double earnings from FY19. The acquisition was completed as at end-

March 2018. As such, the North Sabah EOR PSC started to contribute marginally in 4QFY18. We expect PAT

contributions from North Sabah EOR PSC to grow at a 3-year CAGR of 66% from FY18-21. North Sabah EOR PSC’s PAT

contribution will grow from 36% in FY18 to c.51% in FY19.

BUY, TP of RM1.46. Our TP is based on the DCF of the Anasuria Cluster and North Sabah PSC. We do not ascribe any

value to the Australian assets at this juncture. We forecast a FD core EPS CAGR of 85% over FY18-21F for Hibiscus,

which is underpinned by its growing asset portfolio.

Market Focus

Malaysia Strategy

Page 12

Revisions to recommendations

Company Revision to Recommendation Revision Date Reason

Current Previous

Upgrade

Astro Malaysia

Holdings

BUY HOLD 1-Aug We believe that regulatory concerns over Astro are

overblown given that its exclusive direct-to-home (DTH)

licence had already expired in early 2017. Despite being

the dominant pay-TV operator, we think the regulator

recognises that Astro faces competition from other

platforms as well. We also note that its subscription prices

are actually quite in line with regional peers. Its share

price is currently trading at an undemanding valuation of

12.5x FY20 PE and offers 6% net dividend yield. Upgrade

to BUY with unchanged RM2.25 TP. Our TP implies 15.6x

FY20 PE, which is about -1SD of its 5-year mean,

reflecting its exclusion as a constituent of the FBM KLCI.

Axiata Group BUY HOLD 8-Aug Axiata’s share price has retreated by 21% YTD, and we

believe this has largely priced in the near term weak

performance by its operating subsidiaries. We expect to

see gradual improvements in Celcom and XL’s results over

the next 12 months, which will be the key catalysts to

drive share price recovery. Axiata currently trades at an

attractive valuation of 6.6x EV/EBITDA, which is -1.5SD

below its 5-year average. We upgrade our

recommendation to BUY

UMW Holdings HOLD FULLY

VALUED

30-Aug We increased our FY18F-20F forecast by c.18% to

account for stronger auto segment earnings.

Following our earnings upgrade, our revised SOP-based

TP is RM6.19. New launches such as the all-new Toyota

Harrier, two new variants for Toyota Hilux, Alphard and

Toyota Velfire (which were introduced in 1Q18) could

help support volume in the coming quarters. The all new

Toyota CH-R started delivery since end-March with high

orders, posting 1,500 bookings as of March 2018. Given

the improved earnings visibility, we upgrade our Fully

Valued call to Hold.

Downgrade

Star Media Group FULLY

VALUED

HOLD 20-Aug To reflect the poor adex outlook and potential

uncertainties in the media sector given the change of the

federal government, we use a target P/B of 0.8x and

derive a RM0.92 TP for Star. With 25% potential

downside, we downgrade our recommendation to Fully

Valued

British American

Tobacco

HOLD BUY 27-Aug Since our upgrade in mid-May, British American

Tobacco’s (BAT) share price has rallied by 16% on the

back of its, 1) attractive valuation and, 2) better earnings

prospects going forward, mainly driven by the new

federal government’s promises to tighten controls at

Malaysian borders to curb smuggling activities, as well as

its initiatives to reduce cost of living, such as the removal

of the GST which would benefit BAT as a market leader in

the tobacco industry. Now that the SST is at a higher rate

Market Focus

Malaysia Strategy

Page 13

Company Revision to Recommendation Revision Date Reason

Current Previous

of 10%, margin growth could be at risk. Hence,

downgrade to HOLD.

Padini FULLY

VALUED

HOLD 28-Aug We downgrade our recommendation for Padini to FULLY

VALUED with an unchanged TP of RM5.05. Despite its

bright earnings prospects, we believe that the group’s risk

reward profile has turned unfavourable in view of its rich

valuation. The stock is currently trading at 18x FY19 PE,

which is about +2SD of its historical mean.

Inari Amertron FULLY

VALUED

HOLD 29-Aug Having rebounded 49% from its April low, Inari Amertron

is currently trading at 23.8x CY19 EPS which is +1.5 SD

above its historical average. As such, we are downgrading

our recommendation to Fully Valued with revised RM2.00

Target Price (TP) that is pegged to 20x CY19 EPS.

FGV Holdings FULLY

VALUED

HOLD 29-Aug FGV reported sharp 2Q18 core losses as softer fresh fruit

bunches (FFB) production coincided with lower CPO

prices, overcoming steadier profits from its Sugar arm.

Crucially, internal and external audits have revealed

adverse findings and serious issues related to the group’s

past operational practices, investments and governance.

A Special Board Committee has now been set up to play

an active role in reviewing and reorganising the group’s

operations. While we view these events as a good start to

structurally revamp the group, we think near term risks to

earnings and equity value are likely to be elevated as

correctional actions are taken. Downgrade to FULLY

VALUED.

Tenaga Nasional HOLD BUY 3-Sep While we continue to like TNB for its quality recurring

cash flow, underpinned by steady electricity demand as

well as stable income from its regulated transmission and

distribution business, its share price has rallied recently to

within reach of our TP. Therefore, we downgrade our

rating to HOLD in view of the limited upside potential.

Market Focus

Malaysia Strategy

Page 14

Significant reports

Date Report

Strategy report

14-Aug Better clarity ahead

Sector report

7-Aug Malaysian Consumer: Strong appetite, sustainability an issue

8-Aug Malaysia NFOs: Fewer special draws for NFOs

Source: AllianceDBS Best- and worst-performing stocks in AllianceDBS’ coverage in Aug

Big Caps (>USD2bn) Small & Mid-Caps (<USD2bn)

Source: AllianceDBS, Bloomberg Finance L.P

-20% -10% 0% 10% 20%

TM

SP Setia

MISC

IHH Healthcare Bhd

YTL Power

Astro

Gamuda

AirAsia

QL Resources

IOI Corporation

Genting Malaysia

Digi

CIMB Group

Public Bank

Dialog Group Bhd

Hong Leong Bank

Hong Leong Financial Group

AXIATA

Top Glove

Hartalega

-50.0%-40.0%-30.0%-20.0%-10.0% 0.0% 10.0%20.0%

Sapura Energy

Yong Tai

Media Prima

Bumi Armada

Star

SKP Resources

Magnum

Felda Global Ventures

Kimlun Corporation

Sasbadi Holdings

Kossan

Matrix Concepts

Sunway

Lafarge

Muhibbah Engineering

KPJ Healthcare

Cahya Mata Sarawak

UNISEM

Globetronics

Malaysian Pacific Industries

Market Focus

Malaysia Strategy

Page 15

Appendix: 2Q18 earnings summary

Financial EPS vs ADBS vs consensus

Company Sector quarters Change estimates estimates

UMW Holdings Automotive 2QFY18 ▲ Above Above

Bermaz Auto Automotive 4QFY18 ▲ Above Inline

AirAsia Aviation 2QFY18 ▼ Below Below

AirAsia X Aviation 2QFY18 ▼ Below Below

MAHB Aviation 1QFY18 ◄► Inline Inline

Affin Holdings Banking 2QFY18 ◄► Inline Below

AMMB Banking 1QFY19 ◄► Inline Inline

BIMB Holdings Banking 2QFY18 ◄► Inline Inline

CIMB Group Banking 2QFY18 ▼ Below Inline

Hong Leong Bank Banking 4QFY18 ◄► Inline Inline

Hong Leong Financial Group Banking 4QFY18 ◄► Inline Inline

Maybank Banking 2QFY18 ▼ Inline Inline

Public Bank Banking 2QFY18 ▼ Inline Inline

RHB Bank Bhd Banking 1QFY18 ▲ Inline Inline

Cahya Mata Sarawak Building Materials 2QFY18 ◄► Inline Inline

Lafarge Building Materials 2QFY18 ▼ Below Below

MMC Conglomerate 2QFY18 ▼ Below Below

Gamuda Construction 3QFY18 ▲ Above Above

IJM Corp Construction 1QFY19 ▼ Below Below

Muhibbah Engineering Construction 2QFY18 ◄► Inline Inline

Kimlun Corporation Construction 2QFY18 ▼ Below Below

Sunway Construction Construction 2QFY18 ▼ Below Below

WCT Holdings Construction 2QFY18 ▼ Below Below

BAT Consumer 2QFY18 ▼ Below Below

Padini Consumer 4QFY18 ◄► Inline Inline

Petronas Dagangan Consumer 2QFY18 ◄► Inline Inline

Sasbadi Holdings Consumer 2QFY18 ◄► Below Below

SKP Resources EMS 1QFY19 ▼ Below Below

VS Indsutry EMS 3QFY18 ▼ Below Below

QL Resources Consumer 1QFY19 ◄► Inline Inline

AEON Credit Finance non-bank 1QFY19 ◄► Above Above

Bursa Malaysia Finance non-bank 2QFY18 ▲ Above Inline

Berjaya Sports Toto Gaming 3QFY18 ▼ Below Below

Genting Gaming 2QFY18 ◄► Inline Inline

Genting Malaysia Gaming 2QFY18 ◄► Inline Inline

Magnum Gaming 2QFY18 ◄► Inline Inline

Hartalega Glove 1QFY19 ◄► Inline Inline

Kossan Glove 2QFY18 ◄► Inline Inline

Top Glove Glove 3QFY18 ▲ Above Above

IHH Healthcare Healthcare 2QFY18 ▼ Inline Below

KPJ Healthcare Healthcare 2QFY18 ◄► Inline Inline

Astro Media 1QFY19 ◄► Below Below

Media Chinese Media 1QFY19 ◄► Inline Inline

Media Prima Media 2QFY18 ◄► Inline Inline

Star Media 2QFY18 ▼ Below Below

Market Focus

Malaysia Strategy

Page 16

Financial EPS vs ADBS vs consensus

Company Sector quarters Change estimates estimates

Bumi Armada Oil & Gas 2QFY18 ▼ Below Below

Hibiscus Oil & Gas 4QFY18 ▲ Below Below

Dialog Group Bhd Oil & Gas 4QFY18 ◄► Inline Inline

Pantech Group Oil & Gas 1QFY19 ▼ Inline Inline

Sapura Energy Oil & Gas 1QFY19 ▼ Below Below

Serba Dinamik Oil & Gas 2QFY18 ◄► Inline Inline

Wah Seong Oil & Gas 2QFY18 ▼ Below Below

CB Industrial Product Plantation 2QFY18 ◄► Inline Inline

Genting Plantation Plantation 2QFY18 ▼ Below Below

IOI Corporation Plantation 4QFY18 ◄► Inline Inline

KL Kepong Plantation 3QFY18 ◄► Inline Below

Sime Darby Plantation Plantation 4QFY18 ▼ Below Below

Felda Global Ventures Plantation 2QFY18 ▼ Below Below

PPB Group Plantation 2QFY18 ◄► Inline Inline

TSH Resources Plantation 2QFY18 ◄► Inline Inline

Westports Holdings Port 2QFY18 ▲ Inline Inline

Eastern & Oriental Property 1QFY19 ◄► Inline Below

MKH Property 3QFY18 ◄► Inline Inline

SP Setia Property 2QFY18 ▼ Below Below

UEM Sunrise Property 2QFY18 ◄► Inline Inline

Eco World Development Property 2QFY18 ▼ Inline Inline

Matrix Concepts Property 1QFY19 ◄► Inline Inline

Yong Tai Property 4QFY18 ◄► Inline Inline

Sunway Property 2QFY18 ◄► Inline Inline

Axis REIT REIT 2QFY18 ◄► Inline Inline

CapitaMall Malaysia Trust REIT 2QFY18 ◄► Inline Inline

KLCC Stapled REIT 2QFY18 ◄► Inline Inline

Pavilion REIT REIT 2QFY18 ◄► Inline Inline

MRCB-Quill REIT REIT 2QFY18 ◄► Inline Inline

Sunway REIT REIT 4QFY18 ◄► Inline Inline

MISC Shipping 2QFY18 ▼ Below Below

Malaysian Pacific Industries Technology 4QFY18 ◄► Inline Inline

Globetronics Technology 2QFY18 ◄► Inline Inline

Inari Amertron Technology 2QFY18 ▼ Below Below

Unisem Technology 2QFY18 ◄► Inline Inline

Axiata Telecommunication 2QFY18 ◄► Inline Inline

Digi Telecommunication 2QFY18 ◄► Inline Inline

Maxis Telecommunication 2QFY18 ▼ Inline Inline

TIME dotCom Telecommunication 2QFY18 ▲ Above Above

TM Telecommunication 2QFY18 ▼ Below Below

Gas Malaysia Utilities 2QFY18 ◄► Inline Inline

Petronas Gas Utilities 2QFY18 ◄► Inline Inline

Tenaga Utilities 2QFY18 ◄► Inline Inline

YTL Power Utilities 4QFY18 ◄► Above Above

Market Focus

Malaysia Strategy

Page 17

Macro Data

Key Data Period m-o-m / y-o-y

chg

Prev. / Consensus

(y-o-y)

GDP 2Q18 0.3% / 4.5% +5.2% In 2Q18, growth was driven mainly by improvement in Manufacturing

(+4.9%), Services (+6.5%) and Construction (+4.7%). On the other

hand, the demand side was supported by private consumption (+8.0%),

private investment (+6.1%) and public consumption (+3.1%). Private

consumption remains the main driver of growth (55.2% of total GDP);

expanding faster at 8.0% y-o-y, benefiting from the one-month tax free

period. Additionally, net exports of goods and services expanded

significantly lower by 1.7% in 2Q18, from a 62.4% growth y-o-y in

1Q18. Nonetheless, we expect private consumption to remain

expansionary, given that the current fiscal reforms by the government

such as GST removal and the standardisation of minimum wage would

provide favourable domestic demand conditions to support Malaysia’s

private consumption growth towards the end of the year, contributing

positively towards 3Q18 GDP growth.

CPI Jul 18 +0.2% / +0.9% +0.8% / +0.9% During the month, price pressures were driven by key items in the basket

of goods, namely Food and Non-alcoholic Beverages (+0.7%), Housing

and Utilities (+2.0%) and Transport (+6.7%) sectors. On a seasonally

adjusted m-o-m basis, the consumer price index (CPI) expanded 0.2%

(Jun: +1.2%), mainly attributed to lower prices of goods, as July was the

second month of the 3-month tax holiday following the zero-rating of

GST effective 1 June. Nevertheless, we expect price pressures to pick up

slightly in 4Q18 after the reintroduction of Sales and Services Tax (5%-

10% Sales Tax and 6% Services Tax) effective 1 September 2018.

OPR Jul 18 3.25%^ 3.25% / 3.25% Bank Negara Malaysia (BNM) kept rates unchanged in its July meeting.

BNM expects inflation to average lower than earlier projections in 2018,

due to the impact of recent policy changes affecting domestic cost

factors. Additionally, BNM expects greater clarity in domestic policies in

the coming months to further strengthen growth prospects. Overall, we

believe that BNM will likely maintain the current OPR until end-2018.

Exports June 18 -4.2% / +7.6% +3.4% / +10.3% During the month, expansion in exports growth was due to an increase

in major segments: E&E (+6.9%), refined petroleum products (+40.6%),

crude petroleum (+25.3%), while exports of palm oil and palm oil-based

products (-20.4%) and LNG (-31.2%) declined. The reduction on a m-o-

m basis was mainly due to lower trading activities amidst Hari Raya

festive holidays in mid-June. We revised our exports growth projection to

5.0% - 6.0% y-o-y in 2018 (previously +4.0%).

PMI Aug 18 51.2^ 49.7/ - Nikkei reported Malaysia’s manufacturing conditions showing growth

within positive territory for the first time since January, where new orders

and output expanded higher. On the other hand, firms experienced

higher input costs due to weakness in the Ringgit, while increasing

output charges marginally for the second month.

IPI Jun 18 -0.5% / +1.1% +3.0% / +3.4% Industrial production index (IPI) growth was supported by expansion in

the Manufacturing (+4.5%) and Electricity (+3.0%) sectors, while the

Mining sector contracted 9.4%. However, the 3-month moving average

growth of 2.8% (May: +3.5%) suggests that the underlying growth

momentum continues to moderate. For now, the impact of the US-China

trade war on Malaysian manufactured goods will likely be muted and

manageable. However, prolonged trade tensions between the US and its

major trading partners, especially China, will dampen global trade

activities, which will indirectly affect external demand for Malaysia’s

manufactured products, particularly manufactured E&E products.

CPO Output Jul 18 +12.8% / -

17.7%

-12.0% / n.a. Production snapped out of a 3-month consecutive m-o-m decline in Jul

2018, yet widened its y-o-y decline as FFB yields remain far below mean

on the normalisation of the post-El Nino recovery surge. Output in the

coming months is expected to remain mild.

CPO Inventory Jul 18 +1.3% /

+24.1%

+43.2% / n.a. Stockpiles again rose c.1% m-o-m to 2.21m MT at end-Jul 2018. Lower

output was offset by still-soft exports, which were lower y-o-y to most

major destinations except the European Union (EU) in Jul 2018. A

seasonal pick-up in biodiesel blending from the winter period and

Indonesia’s biodiesel programme will help shore up demand, keeping

inventories in check.

Source: AllianceDBS, Bloomberg Finance L.P * q-o-q ^ latest reading

Market Focus

Malaysia Strategy

Page 18

Macro Graphs

Malaysia GDP and Consumer Price Index growth Malaysia exports growth

Source: Department of Statistics Source: Department of Statistics

Malaysia industrial production and PMI index Malaysia palm oil output

Source: Department of Statistics, Markit Source: Department of Statistics

Malaysia palm oil inventory MGS 10-year and US Treasury 10-year yield spread

Source: Malaysian Palm Oil Board Source: Bloomberg Finance L.P

0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

Jan

-14

Ap

r-1

4

Jul-

14

Oct

-14

Jan

-15

Ap

r-1

5

Jul-

15

Oct

-15

Jan

-16

Ap

r-1

6

Jul-

16

Oct

-16

Jan

-17

Ap

r-1

7

Jul-

17

Oct

-17

Jan

-18

Ap

r-1

8

Jul-

18

%y-o-y%y-o-yGDP growth CPI

-60

-40

-20

0

20

40

60

80

-50

-40

-30

-20

-10

0

10

20

30

40

50

Jan

-16

Mar

-16

May

-16

Jul-

16

Sep

-16

No

v-1

6

Jan

-17

Mar

-17

May

-17

Jul-

17

Sep

-17

No

v-1

7

Jan

-18

Mar

-18

May

-18

% y-o-y% y-o-y

Others

E&E

O&G

40.0

45.0

50.0

55.0

0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

8.0

9.0

Jan

-15

Ap

r-1

5

Jul-

15

Oct

-15

Jan

-16

Ap

r-1

6

Jul-

16

Oct

-16

Jan

-17

Ap

r-1

7

Jul-

17

Oct

-17

Jan

-18

Ap

r-1

8

Jul-

18

% y-o-yIPI growth (lhs)Mfg IPI growth (lhs)Mfg PMI (rhs)

0

50

100

150

200

250

300

Jan

-16

Mar

-16

May

-16

Jul-

16

Sep

-16

No

v-1

6

Jan

-17

Mar

-17

May

-17

Jul-

17

Sep

-17

No

v-1

7

Jan

-18

Mar

-18

May

-18

Jul-

18

bps

BrexitTrump election

Market Focus

Malaysia Strategy

Page 19

DBS Bank, AllianceDBS 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 (-10% to +15% total return over the next 12 months for small caps, -10% to +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

Completed Date: 4 Sep 2018 08:14:47 (MYT) Dissemination Date: 5 Sep 2018 08:43:09 (MYT)

Sources for all charts and tables are DBS Bank, AllianceDBS unless otherwise specified.

GENERAL DISCLOSURE/DISCLAIMER

This report is prepared by DBS Bank Ltd, AllianceDBS Research Sdn Bhd (''AllianceDBS''). This report is solely intended for the clients of DBS Bank

Ltd, its respective connected and associated corporations and affiliates only and no part of this document may be (i) copied, photocopied or

duplicated in any form or by any means or (ii) redistributed without the prior written consent of DBS Bank Ltd, AllianceDBS Research Sdn Bhd

(''AllianceDBS'').

The research set out in this report is based on information obtained from sources believed to be reliable, but we (which collectively refers to DBS

Bank Ltd, its respective connected and associated corporations, affiliates and their respective directors, officers, employees and agents (collectively,

the “DBS Group”) have not conducted due diligence on any of the companies, verified any information or sources or taken into account any other

factors which we may consider to be relevant or appropriate in preparing the research. Accordingly, we do not make any representation or

warranty as to the accuracy, completeness or correctness of the research set out in this report. Opinions expressed are subject to change without

notice. This research 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 independent legal or financial

advice. The DBS Group accepts no liability whatsoever for any direct, indirect and/or consequential loss (including any claims for loss of profit)

arising from any use of and/or reliance upon this document and/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. The DBS Group, 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. The DBS Group, 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.

Any valuations, opinions, estimates, forecasts, ratings or risk assessments herein constitutes a judgment as of the date of this report, and there can

be no assurance that future results or events will be consistent with any such valuations, opinions, estimates, forecasts, ratings or risk assessments.

The information in this document is subject to change without notice, its accuracy is not guaranteed, it may be incomplete or condensed, it may

not contain all material information concerning the company (or companies) referred to in this report and the DBS Group is under no obligation to

update the information in this report.

This publication has not been reviewed or authorized by any regulatory authority in Singapore, Hong Kong or elsewhere. There is no planned

schedule or frequency for updating research publication relating to any issuer.

The valuations, opinions, estimates, forecasts, ratings or risk assessments described in this report were based upon a number of estimates and

assumptions and are inherently subject to significant uncertainties and contingencies. It can be expected that one or more of the estimates on

which the valuations, opinions, estimates, forecasts, ratings or risk assessments were based will not materialize or will vary significantly from actual

results. Therefore, the inclusion of the valuations, opinions, estimates, forecasts, ratings or risk assessments described herein IS NOT TO BE RELIED

UPON as a representation and/or warranty by the DBS Group (and/or any persons associated with the aforesaid entities), that:

(a) such valuations, opinions, estimates, forecasts, ratings or risk assessments or their underlying assumptions will be achieved, and

(b) there is any assurance that future results or events will be consistent with any such valuations, opinions, estimates, forecasts, ratings or risk

assessments stated therein.

Please contact the primary analyst for valuation methodologies and assumptions associated with the covered companies or price targets.

Market Focus

Malaysia Strategy

Page 20

Any assumptions made in this report that refers to commodities, are for the purposes of making forecasts for the company (or companies)

mentioned herein. They are not to be construed as recommendations to trade in the physical commodity or in the futures contract relating to the

commodity referred to in this report.

DBSVUSA, a US-registered broker-dealer, does not have its own investment banking or research department, has not participated in any public

offering of securities as a manager or co-manager or in any other investment banking transaction in the past twelve months and does not engage

in market-making.

ANALYST CERTIFICATION

The research analyst(s) 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(s) 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 the report. The research analyst (s)

primarily responsible for the content of this research report, in part or in whole, certifies that he or his associate1 does not serve as an officer of the

issuer or the new listing applicant (which includes in the case of a real estate investment trust, an officer of the management company of the real

estate investment trust; and in the case of any other entity, an officer or its equivalent counterparty of the entity who is responsible for the

management of the issuer or the new listing applicant) and the research analyst(s) primarily responsible for the content of this research report or

his associate does not have financial interests2 in relation to an issuer or a new listing applicant that the analyst reviews. DBS Group has

procedures in place to eliminate, avoid and manage any potential conflicts of interests that may arise in connection with the production of

research reports. The research analyst(s) responsible for this report operates as part of a separate and independent team to the investment

banking function of the DBS Group and procedures are in place to ensure that confidential information held by either the research or investment

banking function is handled appropriately. There is no direct link of DBS Group's compensation to any specific investment banking function of the

DBS Group.

COMPANY-SPECIFIC / REGULATORY DISCLOSURES

1. DBS Bank Ltd, DBS HK, DBS Vickers Securities (Singapore) Pte Ltd (''DBSVS'') or their subsidiaries and/or other affiliates do not have a

proprietary position in the securities recommended in this report as of 31 Jul 2018.

2. Neither DBS Bank Ltd nor DBS HK market makes in equity securities of the issuer(s) or company(ies) mentioned in this Research Report.

Compensation for investment banking services:

3. DBS Bank Ltd, DBS HK, DBSVS their subsidiaries and/or other affiliates of DBSVUSA, within the next 3 months, will receive or intend to seek

compensation for investment banking services from Maybank as of 31 Jul 2018.

4. DBSVUSA does not have its own investment banking or research department, nor has it participated in any public offering of securities as a

manager or co-manager or in any other investment banking transaction 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.

Disclosure of previous investment recommendation produced:

5. DBS Bank Ltd, DBS Vickers Securities (Singapore) Pte Ltd (''DBSVS''), their subsidiaries and/or other affiliates may have published other

investment recommendations in respect of the same securities / instruments recommended in this research report during the preceding 12

months. Please contact the primary analyst listed in the first page of this report to view previous investment recommendations published by

DBS Bank Ltd, DBS Vickers Securities (Singapore) Pte Ltd (''DBSVS''), their subsidiaries and/or other affiliates in the preceding 12 months.

1 An associate is defined as (i) the spouse, or any minor child (natural or adopted) or minor step-child, of the analyst; (ii) the trustee of a trust of which the analyst, his spouse, minor child (natural or adopted) or minor step-child, is a beneficiary or discretionary object; or (iii) another person accustomed or obliged to act in accordance with the directions or instructions of the analyst.

2 Financial interest is defined as interests that are commonly known financial interest, such as investment in the securities in respect of an issuer or a new listing applicant, or financial accommodation arrangement between the issuer or the new listing applicant and the firm or analysis. This term does not include commercial lending conducted at arm's length, or investments in any collective investment scheme other than an issuer or new listing applicant notwithstanding the fact that the scheme has investments in securities in respect of an issuer or a new listing applicant.

Market Focus

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Page 21

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 DBS Bank Ltd. (“DBS”) or DBS Vickers Securities (Singapore) Pte Ltd (“DBSVS”). DBS holds Australian Financial Services Licence no. 475946.

DBSVS is 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. DBSVS is regulated by the Monetary Authority of Singapore 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 has been prepared by a person(s) who is not licensed by the Hong Kong Securities and Futures Commission to carry on the regulated activity of advising on securities in Hong Kong pursuant to the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong). This report is being distributed in Hong Kong and is attributable to DBS Bank (Hong Kong) Limited, a registered institution registered with the Hong Kong Securities and Futures Commission to carry on the regulated activity of advising on securities pursuant to the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong).

This report has been prepared by an entity(ies) which is not licensed by the Hong Kong Securities and Futures Commission to carry on the regulated activity of advising on securities pursuant to the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong). This report is being distributed in Hong Kong and is attributable to DBS Bank (Hong Kong) Limited, a registered institution registered with the Hong Kong Securities and Futures Commission to carry on the regulated activity of advising on securities pursuant to the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong).

For any query regarding the materials herein, please contact Carol Wu (Reg No. AH8283) at equityresearch@dbs.com

Indonesia This report is being distributed in Indonesia by PT DBS Vickers Sekuritas Indonesia.

Malaysia This report is distributed in Malaysia by AllianceDBS Research Sdn Bhd ("ADBSR"). Recipients of this report, received from ADBSR are to contact the undersigned at 603-2604 3333 in respect of any matters arising from or in connection with this report. In addition to the General Disclosure/Disclaimer found at the preceding page, recipients of this report are advised that ADBSR (the preparer of this report), its holding company Alliance Investment Bank Berhad, their respective connected and associated corporations, affiliates, their directors, officers, employees, agents and parties related or associated with any of them may have positions in, and may effect transactions in the securities mentioned herein and may also perform or seek to perform broking, investment banking/corporate advisory and other services for the subject companies. They may also have received compensation and/or seek to obtain compensation for broking, investment banking/corporate advisory and other services from the subject companies.

Wong Ming Tek, Executive Director, ADBSR

Singapore This report is distributed in Singapore by DBS Bank Ltd (Company Regn. No. 196800306E) or DBSVS (Company Regn No. 198600294G), both of which are Exempt Financial Advisers as defined in the Financial Advisers Act and regulated by the Monetary Authority of Singapore. DBS Bank Ltd and/or DBSVS, may distribute reports produced by its respective foreign entities, affiliates or other foreign research houses pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the report is distributed in Singapore to a person who is not an Accredited Investor, Expert Investor or an Institutional Investor, DBS Bank Ltd accepts legal responsibility for the contents of the report to such persons only to the extent required by law. Singapore recipients should contact DBS Bank Ltd at 6327 2288 for matters arising from, or in connection with the report.

Thailand This report is being distributed in Thailand by DBS Vickers Securities (Thailand) Co Ltd.

Market Focus

Malaysia Strategy

Page 22

United Kingdom

This report is produced by DBS Bank Ltd which is regulated by the Monetary Authority of Singapore.

This report is disseminated in the United Kingdom by DBS Vickers Securities (UK) Ltd, ("DBSVUK"). DBSVUK is authorised and regulated by the Financial Conduct Authority in the United Kingdom.

In respect of the United Kingdom, this report is solely intended for the clients of DBSVUK, its respective connected and associated corporations and affiliates only and no part of this document may be (i) copied, photocopied or duplicated in any form or by any means or (ii) redistributed without the prior written consent of DBSVUK. This communication is directed at persons having professional experience in matters relating to investments. Any investment activity following from this communication will only be engaged in with such persons. Persons who do not have professional experience in matters relating to investments should not rely on this communication.

Dubai International Financial Centre

This research report is being distributed by DBS Bank Ltd., (DIFC Branch) having its office at PO Box 506538, 3rd Floor, Building 3, East Wing, Gate Precinct, Dubai International Financial Centre (DIFC), Dubai, United Arab Emirates. DBS Bank Ltd., (DIFC Branch) is regulated by The Dubai Financial Services Authority. This research report is intended only for professional clients (as defined in the DFSA rulebook) and no other person may act upon it.

United Arab Emirates

This report is provided by DBS Bank Ltd (Company Regn. No. 196800306E) which is an Exempt Financial Adviser as defined in the Financial Advisers Act and regulated by the Monetary Authority of Singapore. This report is for information purposes only and should not be relied upon or acted on by the recipient or considered as a solicitation or inducement to buy or sell any financial product. It does not constitute a personal recommendation or take into account the particular investment objectives, financial situation, or needs of individual clients. You should contact your relationship manager or investment adviser if you need advice on the merits of buying, selling or holding a particular investment. You should note that the information in this report may be out of date and it is not represented or warranted to be accurate, timely or complete. This report or any portion thereof may not be reprinted, sold or redistributed without our written consent.

United States This report was prepared by DBS Bank Ltd, AllianceDBS Research Sdn Bhd (''AllianceDBS''). DBSVUSA did not participate in its preparation. The research analyst(s) named on this report are not registered as research analysts with FINRA and are not associated persons of DBSVUSA. The research analyst(s) are not subject to FINRA Rule 2241 restrictions on analyst compensation, communications with a subject company, public appearances and trading securities held by a research analyst. This report is being distributed in the United States by DBSVUSA, which accepts responsibility for its contents. This report may only be distributed to Major U.S. Institutional Investors (as defined in SEC Rule 15a-6) and to such other institutional investors and qualified persons as DBSVUSA may authorize. Any U.S. person receiving this report who wishes to effect transactions in any securities referred to herein should contact DBSVUSA directly and not its affiliate.

Other jurisdictions

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

Market Focus

Malaysia Strategy

Page 23

DBS Regional Research Offices

HONG KONG DBS Bank (Hong Kong) Ltd Contact: Carol Wu 18th Floor Man Yee Building 68 Des Voeux Road Central Central, Hong Kong Tel: 65 6878 8888 Fax: 65 65353 418 e-mail: equityresearch@dbs.com Participant of the Stock Exchange of Hong Kong

MALAYSIA AllianceDBS Research Sdn Bhd Contact: Wong Ming Tek (128540 U) 19th Floor, Menara Multi-Purpose, Capital Square, 8 Jalan Munshi Abdullah 50100 Kuala Lumpur, Malaysia. Tel.: 603 2604 3333 Fax: 603 2604 3921 e-mail: general@alliancedbs.com

SINGAPORE DBS Bank Ltd Contact: Janice Chua 12 Marina Boulevard, Marina Bay Financial Centre Tower 3 Singapore 018982 Tel: 65 6878 8888 Fax: 65 65353 418 e-mail: equityresearch@dbs.com Company Regn. No. 196800306E

INDONESIA PT DBS Vickers Sekuritas (Indonesia) Contact: Maynard Priajaya Arif DBS Bank Tower Ciputra World 1, 32/F Jl. Prof. Dr. Satrio Kav. 3-5 Jakarta 12940, Indonesia Tel: 62 21 3003 4900 Fax: 6221 3003 4943 e-mail: research@id.dbsvickers.com

THAILAND DBS Vickers Securities (Thailand) Co Ltd Contact: Chanpen Sirithanarattanakul 989 Siam Piwat Tower Building, 9th, 14th-15th Floor Rama 1 Road, Pathumwan, Bangkok Thailand 10330 Tel. 66 2 857 7831 Fax: 66 2 658 1269 e-mail: research@th.dbs.com Company Regn. No 0105539127012 Securities and Exchange Commission, Thailand