UOBKayHian Regional Morning Notes Thursday, March 25, 2010 Please see important notice on last page Page 1 of 24 CHINA Sector Shipping Page 2 2009 results preview: CCH to breakeven and CSCL’s losses not widening in 4Q09. Results Belle Int’l Holdings (BUY/HK$9.40/Target: HK$12.50) Page 4 2009: Profit up 31%, greatly exceeding expectation. Upgrade from SELL to BUY on stronger-than-expected sales recovery and margin improvement. China Dongxiang (BUY/HK$5.40/Target: HK$7.30) Page 6 2009: Profit up 30% yoy, beating expectations. Outlook for 2010 remains bright. Guangzhou R&F (SELL/HK$12.22/Fair: HK$10.78) Page 8 2009: Net profit below expectations and management fails to meet its gearing target. Until investors regain confidence, R&F will continue to lag. Haitian International (BUY/HK$5.38/Target: HK$6.18) Page 10 2009: In line with expectations. Positive management guidance for 2010. Any post-results profit-taking activity provides good buying opportunities. KWG Property (HOLD/HK$5.44/Fair: HK$5.35) Page 12 2009: In line. Upgrade from SELL to HOLD for excellent sales performance, as well as strong capability to charge premium prices and thus good margins. INDONESIA Results Sampoerna Agro (HOLD/Rp2,650/Fair: Rp2,800) Page 14 4Q09: Expect margins to improve, driven by higher contribution from a bigger nucleus area. Upgrade from SELL to HOLD. MALAYSIA Strategy Page 16 Key takeaways from BNM briefing. Results Tanjong PLC (BUY/RM17.74/Target: RM19.80) Page 18 FY10: Core earnings of RM688m match our estimate of RM689m. RM11.1m revaluation gains from property. Higher absolute DPS of 100 sen. Maintain BUY. SINGAPORE Update People’s Food (HOLD/S$0.63/Fair: S$0.52) Page 20 Cost is escalating as a result of the establishment of a supermarket distribution channel. THAILAND Sector Refinery Page 22 Maintain MARKET WEIGHT with TOP as a favourite pick. KEY STORY China Belle Int’l Holdings (BUY/HK$9.40/Target: HK$12.50) Page 4 2009: Profit up 31%, greatly exceeding expectation. Upgrade from SELL to BUY on stronger-than-expected sales recovery and margin improvement. Prev Close 1D % 1W % 1M % YTD % DJIA 10836.2 (0.5) 1.0 4.5 3.9 S&P 500 1167.7 (0.5) 0.1 5.7 4.7 FTSE 100 5677.9 0.1 0.6 6.3 4.9 AS30 4903.2 0.3 0.7 6.2 0.4 CSI 300 3276.7 0.0 0.1 (0.5) (8.4) FSSTI 2886.4 (0.7) (1.1) 5.0 (0.4) HSI 21008.6 0.1 (1.8) 3.0 (3.9) JCI 2774.9 2.0 0.7 8.9 9.5 KLCI 1309.5 0.4 0.6 3.0 2.9 KOSPI 1681.0 (0.0) (0.1) 5.9 (0.1) Nikkei 225 10815.0 0.4 0.9 7.1 2.5 SET 786.5 0.5 2.7 9.7 7.1 TWSE 7822.7 0.1 (0.3) 5.3 (4.5) BDI 3243 (1.1) (5.4) 19.8 7.9 CPO (RM/mt) 2616 0.3 0.2 (0.9) 1.0 Nymex Crude (US$/bbl) 81 (1.6) (2.8) 0.8 1.6 Source: Bloomberg Key Indices Current Target Pot. +/- Price Price (%) Ticker (lcy) (lcy) Top BUYs Chalco 2600 HK 8.07 11.00 36.3 China Merchants Bk 3968 HK 19.54 26.50 35.6 PetroChina 857 HK 8.95 11.30 26.3 Poly HK 119 HK 9.53 14.30 50.1 Hong Leong Fin Grp HLFG MK 8.08 8.55 5.8 KL Kepong KLK MK 16.38 19.00 16.0 Mah Sing MSGB MK 1.86 2.50 34.4 OCBC OCBC SP 8.70 12.65 45.4 S'pore Press Hldgs SPH SP 3.78 4.40 16.4 Bangkok Bank BBL TB 135.00 161.00 19.3 PTT PTT TB 256.00 316.00 23.4 Top SELLs TMB Bank TMB TB 1.44 0.63 (56.3) Top BUYs/SELLs 2009 2010F 2011F GDP (% yoy) US (2.50) 3.00 3.00 Euro Zone (3.90) 1.20 1.50 Japan (5.30) 1.85 1.80 Singapore (2.08) 4.50 5.00 Malaysia (2.20) 4.90 n.a. Thailand (3.20) 4.00 4.30 Indonesia 4.40 5.64 6.08 Hong Kong (3.30) 3.50 n.a. China 8.70 8.00 8.50 Brent Crude Oil (US$/bbl) 62 75 85 Aluminium * (US$/mt) 1,671 2,117 2,247 Copper * (US$/mt) 5,178 6,958 7,341 Gold Price London * (US$/ounce) 974 1,180 1,194 Iron Ore * (USc/dmtu) 85 126 137 CPO (US$/mt) 670 776 716 BDI 2,617 3,000 3,300 * Bloomberg Source: UOB, UOB Kay Hian Key Assumptions Venue Beg Close Shenguan Holdings Corporate Roadshow S’pore 1 Apr 1 Apr Plant Visit to Globetronics Bhd KL 6 Apr 6 Apr Corporate Events Regional Morning Notes Thursday, March 25, 2010 Please see important notice on last page Page 2 of 24 Shipping – China 2009 results preview: CCH to breakeven and CSCL losses not widening in 4Q09 What’s New • China Shipping Container Lines (CSCL) and China Cosco Holdings (CCH) will release their 2009 results on 21-22 April respectively. 2009 Net Profit Estimates Source: Bloomberg, UOB Kay Hian Action • The results of CSCL and CCH 2009 should be in line with expectation. We see little chance of an earnings surprise. • Maintain HOLD on CCH. CCH i