UOBKayHian Regional Morning Notes Tuesday, April 20, 2010 Please see important notice on last page Page 1 of 22 REGIONAL Sector Aviation Page 2 Biggest disruption to air travel since 9-11. CHINA Sector Property Rebound in last week’s sales unlikely to sustain. Page 4 Results China Pacific Insurance (BUY/HK$33.95/Target: HK$38.00) Page 6 2009: Strong NBV growth; further room for valuation gap to narrow. Update First Tractor (BUY/HK$5.58/Target: HK$6.39) Page 8 Remain positive given the turnaround of construction machinery segment and restructuring with Sinomach. Fushan Energy (BUY/HK$5.64/Target: HK$7.00) Page 10 A solid coal play with attractive valuation. INDONESIA Update Bank Mandiri (BUY/Rp5,100/Target: Rp6,750) Page 12 Targets 25% ROE for the next few years, driven by improved fundamentals. SINGAPORE Results Ascendas REIT (HOLD/S$1.98/Fair: S$2.15) Page 14 FY10: Lengthy floor-finding process. K-REIT Asia (BUY/S$1.13/Target: S$1.30) Page 16 1Q10: Pure play on the office sector’s turnaround. THAILAND Strategy Page 18 Waiting for the government’s law enforcement. Our top BUYs: BBL, SCB, KBANK, ADVANC, PTT and PTTEP are already below their five-year mean P/B. Results Tisco Bank (BUY/Bt23.60/Target: Bt28.00) Page 20 1Q10: Net profit surges 57% yoy to Bt712m, 14% ahead of expectations on stronger-than-expected fee performance. KEY STORY Regional Aviation Biggest disruption to air travel since 9-11. Page 2 China Fushan Energy (BUY/HK$5.64/Target: HK$7.00) Page 10 A solid coal play with attractive valuation. Indonesia Bank Mandiri (BUY/Rp5,100/Target: Rp6,750) Page 12 Targets 25% ROE for the next few years, driven by improved fundamentals. 2009 2010F 2011F GDP (% yoy) US (2.40) 3.00 3.00 Euro Zone (4.10) 1.15 1.50 Japan (5.20) 1.90 1.90 Singapore (2.00) 5.80 4.50 Malaysia (1.70) 4.90 5.10 Thailand (2.30) 4.30 4.70 Indonesia 4.50 6.00 6.20 Hong Kong (2.70) 4.00 4.50 China 8.50 9.50 8.30 Brent Crude Oil (US$/bbl) 62 75 85 Aluminium * (US$/mt) 1,671 2,133 2,228 Copper * (US$/mt) 5,178 7,028 7,508 Gold Price London * (US$/ounce) 974 1,163 1,192 Iron Ore * (USc/dmtu) 85 126 137 CPO (US$/mt) 670 776 716 BDI 2,617 3,000 3,300 * Bloomberg Source: UOB, UOB Kay Hian Key Assumptions Venue Beg Close Tsingtao Brewery US 14 Apr 20 Apr Corporate Roadshow Thailand Politics Spore 21 Apr 21 Apr Luncheon Presentation TPV Technology Spore 26 Apr 27 Apr Corporate Roadshow Golden Meditech Hldgs KL 26 Apr 26 Apr Corporate Roadshow Spore 27 Apr 28 Apr Palm Oil Sector Europe 27 Apr 29 Apr Corporate Roadshow PT Pembangunan Perumahan HK 26 Apr 27 Apr Corporate Roadshow KL 28 Apr 28 Apr Spore 29 Apr 30 Apr Corporate Events Key Indices Prev Close 1D % 1W % 1M % YTD % DJIA 11092.1 0.7 0.8 3.3 6.4 S&P 500 1197.5 0.5 0.1 3.2 7.4 FTSE 100 5727.9 (0.3) (0.9) 1.4 5.8 AS30 4939.4 (1.4) (1.4) 1.0 1.2 CSI 300 3176.4 (5.4) (5.2) (3.6) (11.2) FSSTI 2960.9 (1.5) (0.5) 1.6 2.2 HSI 21405.2 (2.1) (3.3) 0.2 (2.1) JCI 2840.4 (1.3) (1.4) 3.6 12.1 KLCI 1326.7 (0.5) (1.0) 2.3 4.2 KOSPI 1705.3 (1.7) (0.3) 1.1 1.3 Nikkei 225 10908.8 (1.7) (3.0) 0.8 3.4 SET 726.3 (1.3) (10.6) (6.2) (1.1) TWSE 7854.2 (3.2) (3.2) (0.6) (4.1) BDI 3002 (0.2) 3.1 (11.2) (0.1) CPO (RM/mt) 2537 0.1 (0.6) (2.8) (2.1) Nymex Crude (US$/bbl) 81 (2.2) (3.4) 1.0 2.6 Source: Bloomberg Top BUYs/SELLs Current Target Pot. +/- Price Price (%) Ticker (lcy) (lcy) Top BUYs China Merchants Bk 3968 HK 19.26 26.50 37.6 CNOOC 883 HK 13.46 17.80 32.2 Poly HK 119 HK 8.12 14.30 76.1 Zhuzhou CSR 3898 HK 15.90 18.58 16.9 Hong Leong Bank HLBK MK 8.69 10.00 15.1 KL Kepong KLK MK 16.86 19.00 12.7 Mah Sing MSGB MK 1.66 2.10 26.5 OCBC OCBC SP 8.98 12.65 40.9 SATS SATS SP 2.79 3.60 29.0 S'pore Press Hldgs SPH SP 4.01 4.60 14.7 Bangkok Bank BBL TB 117.00 161.00 37.6 PTT PTT TB 245.00 316.00 29.0 Top SELLs BAT ROTH MK 43.54 39.20 (10.0) TMB Bank TMB TB 1.22 0.63 (48.4) Regional Morning Notes Tuesday, April 20, 2010 Please see important notice on last page Page 2 of 22 Aviation – Regional Biggest travel disruption since 9-11. Too soon to bottom pick What’s New • Icelandic volcanic plumes have resulted in the closures of 313 airports throughout Europe. Thus far, meteorologists have not been able to estimate how long magma will continue to erupt. • When the same Icelandic volcano last erupted in 1821, it lasted a year. Action • Until further clarity emerges, we do not recommend buying airlines a