UOBKayHian Regional Morning Notes Tuesday, March 02, 2010 Please see important notice on last page Page 1 of 26 CHINA Economics PMI Page 2 China’s PMI slips to 52 in February from 55.8 in January due to seasonal adjustment. Sector Property Page 4 February sales drop 48% mom. Sales in the coming spring season is key. Update China Pacific Insurance (BUY/HK$31.80/Target:HK$38.00) Page 6 A solid franchise trading at a discount. Initiate coverage with BUY. HONG KONG Results Kingboard Chemical (BUY/HK$34.10/Target: HK$42.05) Page 8 2009: Results in line with expectations. Positive management guidance for 2010. Post-results share price weakness provides re-entry opportunities. MALAYSIA Update Sunway Holdings (BUY/RM1.39/Target: RM1.65) Page 10 Better earnings visibility from construction, property and quarry activities suggests potential earnings upside. UPGRADE TO BUY. SINGAPORE Sector Banking Page 12 Jan 10: Sequential expansion continues. Results First Resources (SELL/S$1.04/Fair: S$0.97) Page 14 2009: Results above expectations. Underlying net profit declines 6% yoy on lower revenue offsetting gains from forex and cross currency swap. Sino Grandness Food (BUY/S$0.28/Target: S$0.620) Page 16 2009: Results in line; growth on track. Synear Food Holdings (HOLD/S$0.315/Fair: S$0.325) Page 18 FY09: Results below expectation. Margins under pressure in 2010 due to rising raw material costs. THAILAND Results Sino-Thai Engineering & Construction (BUY/Bt5.50/Target: Bt7.28) Page 20 4Q09: Satisfactory results. The good performance is expected to continue into 2010. Maintain BUY. Update Land and Houses (HOLD/Bt5.95/Fair: Bt6.50) Page 22 To develop more condominiums and to try to penetrate the low-end segment. Profit growth likely to be flat in 2010. Maintain HOLD for annual yield of 6-7%. Major Cineplex (BUY/Bt9.00/Target: Bt11.20) Page 24 Meaningful recovery in cinema income, pick-up in private consumption and CCI, declining expenses and no loss from associates are growth catalysts. KEY STORY China China Pacific Insurance (BUY/HK$31.80/Target:HK$38.00) Page 6 A solid franchise trading at a discount. Initiate coverage with BUY. Prev Close 1D % 1W % 1M % YTD % Key Indices DJIA 10403.8 0.8 0.2 2.1 (0.2) S&P 500 1115.7 1.0 0.7 2.4 0.1 FTSE 100 5405.9 1.0 1.0 3.0 (0.1) AS30 4694.9 0.9 (0.8) 1.4 (3.8) CSI 300 3324.4 1.3 2.8 5.7 (7.0) FSSTI 2774.1 0.8 0.6 2.0 (4.3) HSI 21056.9 2.2 3.3 3.9 (3.7) JCI 2554.7 0.2 0.0 (1.0) 0.8 KLCI 1283.4 1.0 2.0 1.6 0.8 KOSPI 1594.6 0.4 0.0 (0.7) (5.2) Nikkei 225 10172.1 0.5 (2.2) (1.9) (3.5) SET 721.4 0.6 3.0 3.4 (1.8) TWSE 7577.8 1.9 0.2 2.0 (7.5) BDI 2760 0.8 1.4 0.5 (8.2) CPO (RM/mt) 2600 (0.9) (0.2) 7.1 0.4 Nymex Crude (US$/bbl) 79 (1.0) (1.6) 6.0 (0.6) Source: Bloomberg Key Indices Current Target Pot. +/- Price Price (%) Ticker (lcy) (lcy) Top BUYs Chalco 2600 HK 7.78 11.00 41.4 China Merchants Bk 3968 HK 19.80 26.50 33.8 Hidili 1393 HK 8.52 13.10 53.8 PetroChina 857 HK 8.85 11.30 27.7 Hong Leong Fin Grp HLFG MK 7.69 8.55 11.2 MRCB MRC MK 1.40 1.67 19.3 Tanjong Plc TJN MK 17.66 19.66 11.3 OCBC OCBC SP 8.49 12.65 49.0 S'pore Press Hldgs SPH SP 3.75 4.40 17.3 Ban