UOBKayHian Regional Morning Notes Wednesday, March 31, 2010 Please see important notice on last page Page 1 of 33 REGIONAL Sector Plantation Page 3 Sustainability becoming a key issue for plantation companies and will lead to slower expansion and firmer palm oil prices. Positive for the sector. CHINA Strategy Expect a stronger market from 2Q10 onwards Page 5 Key concerns are subsiding and China stocks are likely to break out soon. Maintain year-end target of 16,710 for the HSCEI. Results Bank of Communications (HOLD/HK$8.86/Fair: HK$10.20) Page 7 4Q09: Strong net profit powered by surprising NIM expansion. China Communications Services (BUY/HK$3.97/Target: HK$5.20) Page 9 2009: Results slightly below expectations, future will rely on telcos’ opex and three networks convergence. China Taiping Insurance Holdings (BUY/HK$29.00/Target: HK$35.50)Page 11 2009: Premium restructuring results in stellar 56.4% NBV growth. Cosco Pacific (BUY/HK$11.60/Target: HK$15.00) Page 13 2009: Results below expectation but on track for recovery. Minmetals Land (BUY/HK$2.10/Target: HK$3.05) Page 15 2009: Despite volatile earnings, the company should enjoy strong growth on the back of asset injection, low gearing and strong background as a central SOE. Nine Dragons Paper (BUY/HK$13.12/Target: HK$15.80) Page 17 1HFY10: Results slightly below our expectations. Management guidance is encouraging. Post-results selling pressure provides buying opportunities. Ports Design (HOLD/HK$20.45/Fair: HK$23.00) Page 19 2009: Net profit goes up 11% yoy. We are cautious about intensified competition from international luxury brands. Maintain HOLD. Market Commentary Page 21 Impact of launch of margin trading, short selling and CSI 300 Index futures. HONG KONG Results Henderson Land (HOLD/HK$57.10/Fair: HK$60.67) Page 23 2009: Focus is on the bonus warrants and detailed landbank outlook. A re-rating is in place with the more proactive property development pipeline. TPV Technology (BUY/HK$5.22/Target: HK$6.54) Page 25 2009: Results beat market consensus. The Group is gaining market share in the global TFT-LCD TV market. KEY STORY China Strategy Expect a stronger market from 2Q10 onwards Page 5 Key concerns are subsiding and China stocks are likely to break out soon. Maintain year-end target of 16,710 for the HSCEI. Singapore Singapore Airlines (BUY/S$15.66/ Target S$18.00) Page 29 Return of pricing power. Upgrade to BUY. Prev Close 1D % 1W % 1M % YTD % DJIA 10907.4 0.1 0.2 5.6 4.6 S&P 500 1173.3 0.0 (0.1) 6.2 5.2 FTSE 100 5672.3 (0.7) (0.0) 5.9 4.8 AS30 4926.8 0.4 0.8 5.9 0.9 CSI 300 3366.7 0.2 2.8 2.6 (5.8) FSSTI 2933.4 0.1 1.0 6.6 1.2 HSI 21374.8 0.6 1.8 3.7 (2.3) JCI 2798.3 0.1 2.8 9.8 10.4 KLCI 1319.4 0.0 1.1 3.8 3.7 KOSPI 1700.2 0.5 1.1 6.6 1.0 Nikkei 225 11097.1 1.0 3.0 9.6 5.2 SET 788.8 2.3 0.8 9.3 7.4 TWSE 7962.2 0.2 1.9 7.1 (2.8) BDI 2982 (1.3) (9.1) 8.9 (0.8) CPO (RM/mt) 2603 (0.3) 0.2 0.1 0.5 Nymex Crude (US$/bbl) 82 0.2 0.6 3.4 3.8 Source: Bloomberg Key Indices Current Target Pot. +/- Price Price (%) Ticker (lcy) (lcy) Top BUYs China Merchants Bk 3968 HK 21.20 26.50 25.0 CNOOC 883 HK 12.92 17.80 37.8 Poly HK 119 HK 10.22 14.30 39.9 Hong Leong Fin Grp HLFG MK 8.40 8.55 1.8 KL Kepong KLK MK 16.62 19.00 14.3 Mah Sing MSGB MK 1.91 2.50 30.9 OCBC OCBC SP 8.91 12.65 42.0 S'pore Press Hldgs SPH SP 3.81 4.40 15.5 Bangkok Bank BBL TB 134.00 161.00 20.1 PTT PTT TB 255.00 316.00 23.9 Top SELLs TMB Bank TMB TB 1.42 0.63 (55.6) Source: UOB Kay Hian 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 Delloyd Ventures Bhd Luncheon Presentation KL 1 Apr 1 Apr UOB Luncheon Presentation S’pore 6 Apr 6 Apr Globetronics Bhd Plant Visit KL 6 Apr 6 Apr Comba Telecom Corporate Roadshow Shanghai 8 Apr 9 Apr Corporate Events Regional Morning Notes Wednesday, March 31, 2010 Please see important notice on last page Page 2 of 33 MALAYSIA St