DISCLOSURE APPENDIX CONTAINS ANALYST CERTIFICATIONS AND THE STATUS OF NON-US ANALYSTS. FOR OTHER IMPORTANT DISCLOSURES, visit www.credit-suisse.com/ researchdisclosures or call +1 (877) 291-2683. U.S. Disclosure: Credit Suisse does and seeks to do business with companies covered in its research reports. As a result, investors should be aware that the Firm may have a conflict of interest that could affect the objectivity of this report. Investors should consider this report as only a single factor in making their investment decision. 14 September 2012 Asia Pacific Equity Research Small Cap Companies David & Goliath WEEKLY ANALYSIS Raising hope on low expectations Share price performance of China small caps, which run their businesses in one of the world’s fastest growing economies, has been heartrending in the past three years – they have underperformed in the region for three consecutive years with a negative return of 31% since 2010. The 2012 consensus earnings growth has been revised from a growth of 22% to a decline of 13% so far. Although the lagging sell-side analysts should not have done their earnings downgrades for 2012, D&G believes the forward-looking market has. In view of a few more metrics that D&G keeps score of, D&G has turned bullish on China small caps, as explained in his new report “Hope and Recovery” (link to report). On the back of fuelling expectations of a Fed easing environment, some laggard markets, like Korea and HK are catching up, while the outperformance of ASEAN markets peaked in late July. In view of the high proportion of 66% of small caps trading below book and easier earnings comparison in 4Q12 and 1H13 with lower bases, D&G expects China small caps to catch up next. Amid an uncertain economic outlook, fundamental analysis continues to lag the stock price movement in the current market scenario, making D&G’s buy lists in the report look feebly convincing to some investors, and thus subject to scepticism. D&G understands that favourable risk-reward attributes after a significant stock price decline usually work exceptionally well during a market rebound. D&G also understands that when the fundamentals of small caps are confirmed to improve, their share prices may have already been moving for two months. As a small-cap analyst, D&G is lonely, as always. D&G also fears of being popular as it usually denotes a market peaking. Charts of the week Returns of MSCI large and small-caps (%) China small caps look attractive 2012 YTD -2M Market Small MSCI Small MSCI Thailand 31.8 19.2 11.1 2.8 Sing 28.7 22.0 8.3 4.4 Taiwan 17.3 8.1 6.3 8.6 India 14.6 11.9 -2.6 3.9 AxJ 9.8 9.0 3.9 5.7 Malaysia 8.4 6.5 0.1 2.4 HK 7.7 14.1 5.5 7.1 Korea 2.1 10.6 9.7 9.6 China -1.8 1.7 -1.7 2.6 Indonesia -4.2 -0.6 -7.1 3.9 S'pore HK Indo AxJ Korea M'sia China Taiwan Thailand India -40 -20 0 20 40 60 -2.0 0.0 2.0 4.0 6.0 P/E discount (%) PEG (x) Source: Datastream, Credit Suisse estimates Davids of the week: Hong Kong: Chow Sang Sang – we initiate coverage of the jeweler with margin improvement from the rising gold prices; 8.5x 13E P/E, 17% potential upside (p. 10) Taiwan: Spreadtrum – we raise our forecasts and target price on smartphones and modest GM recovery; 10.1x 13E P/E, 28% potential upside (p. 81) Research Analysts Kenny Lau, CFA 852 2101 7914 [email protected]Eva Wang 852 2101 7365 [email protected]Anantha Narayan 91 22 67773730 [email protected]Teddy Oetomo 6221 2553 7911 [email protected]Minseok Sinn 822 3707 8898 [email protected]Loke Foong Wai 603 2723 2082 [email protected]Su Tye Chua 65 6212 3014 [email protected]Chai Techakumpuch 662 614 6211 [email protected]
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DISCLOSURE APPENDIX CONTAINS ANALYST CERTIFICATIONS AND THE STATUS OF NON-US ANALYSTS. FOR OTHER IMPORTANT DISCLOSURES, visit www.credit-suisse.com/ researchdisclosures or call +1 (877) 291-2683. U.S. Disclosure: Credit Suisse does and seeks to do business with companies covered in its research reports. As a result, investors should be aware that the Firm may have a conflict of interest that could affect the objectivity of this report. Investors should consider this report as only a single factor in making their investment decision.
14 September 2012
Asia Pacific
Equity Research
Small Cap Companies
David & Goliath WEEKLY ANALYSIS
Raising hope on low expectations
Share price performance of China small caps, which run their businesses in one
of the world’s fastest growing economies, has been heartrending in the past
three years – they have underperformed in the region for three consecutive
years with a negative return of 31% since 2010. The 2012 consensus earnings
growth has been revised from a growth of 22% to a decline of 13% so far.
Although the lagging sell-side analysts should not have done their earnings
downgrades for 2012, D&G believes the forward-looking market has. In view of
a few more metrics that D&G keeps score of, D&G has turned bullish on China
small caps, as explained in his new report “Hope and Recovery” (link to report).
On the back of fuelling expectations of a Fed easing environment, some laggard
markets, like Korea and HK are catching up, while the outperformance of
ASEAN markets peaked in late July. In view of the high proportion of 66% of
small caps trading below book and easier earnings comparison in 4Q12 and
1H13 with lower bases, D&G expects China small caps to catch up next.
Amid an uncertain economic outlook, fundamental analysis continues to lag the
stock price movement in the current market scenario, making D&G’s buy lists in the
report look feebly convincing to some investors, and thus subject to scepticism.
D&G understands that favourable risk-reward attributes after a significant stock
price decline usually work exceptionally well during a market rebound. D&G also
understands that when the fundamentals of small caps are confirmed to improve,
their share prices may have already been moving for two months.
As a small-cap analyst, D&G is lonely, as always. D&G also fears of being
popular as it usually denotes a market peaking.
Charts of the week
Returns of MSCI large and small-caps (%) China small caps look attractive 2012 YTD -2M
Market Small MSCI Small MSCI
Thailand 31.8 19.2 11.1 2.8 Sing 28.7 22.0 8.3 4.4 Taiwan 17.3 8.1 6.3 8.6 India 14.6 11.9 -2.6 3.9 AxJ 9.8 9.0 3.9 5.7 Malaysia 8.4 6.5 0.1 2.4 HK 7.7 14.1 5.5 7.1 Korea 2.1 10.6 9.7 9.6 China -1.8 1.7 -1.7 2.6 Indonesia -4.2 -0.6 -7.1 3.9
S'pore
HK
IndoAxJ
Korea
M'siaChina
Taiwan
Thailand
India
-40
-20
0
20
40
60
-2.0 0.0 2.0 4.0 6.0
P/E
dis
coun
t (%
)
PEG (x)
Source: Datastream, Credit Suisse estimates
Davids of the week:
Hong Kong: Chow Sang Sang – we initiate coverage of the jeweler with margin
improvement from the rising gold prices; 8.5x 13E P/E, 17% potential upside (p. 10)
Taiwan: Spreadtrum – we raise our forecasts and target price on smartphones and modest GM recovery; 10.1x 13E P/E, 28% potential upside (p. 81)
D&G15 portfolio – the small-cap picks in the region
Mkt Cap Price Year P/E (x) Potential CS
Company Ticker (US$ mn) Cncy Price End FY1 FY2 TP Gain (%) Rating China/Hong Kong
ASM Pacific* 0522.HK 4,718 HKD 92.00 Dec 22.7 20.0 73.50 (20.1) U
Haitian* 1882.HK 1,624 HKD 7.89 Dec 11.0 10.9 6.50 (17.6) U
KWG Property 1813.HK 1,679 HKD 4.50 Dec 5.1 5.3 4.70 4.4 N
Lee & Man Paper* 2314.HK 1,935 HKD 3.20 Mar 10.4 9.0 2.75 (14.1) U
Skyworth 0751.HK 1,151 HKD 3.30 Mar 5.4 4.8 5.70 72.7 O
Techtronic* 0669.HK 2,981 HKD 12.68 Dec 14.7 13.2 9.65 (23.9) N
Varitronix 0710.HK 111 HKD 2.66 Dec 4.6 4.7 3.65 37.2 O
VTech 0303.HK 3,037 HKD 94.05 Mar 14.2 13.2 84.00 (10.7) N
Source: Company data, Credit Suisse estimates * ASM Pacific, Haitian, Lee & Man Paper, and Techtronic are SHORT ideas.
14 September 2012
David & Goliath 9
Hong Kong – Street talk * C C Land (1224.HK, HK$1.65, NR) announces Aug contracted sales. C C Land announced that it recorded contracted sales for the month Aug of Rmb645 mn, representing an increase of 185% YoY. (10-Sep)
40
60
80
100
120
09/11 12/11 03/12 06/12 09/12
C C Land MSCI Hong Kong
Yue Yuen (0551.HK, HK$24.60, N, TP HK$25.70) announces revenue for August. Yue Yuen announced that the net consolidated operating revenue for the month Aug 2012 was US$567 mn. And the net consolidated accumulative operating revenue for the eight months ended Aug 2012 amounted to US$4.81 bn. (11-Sep)
65
80
95
110
125
140
09/11 12/11 03/12 06/12 09/12
Yue Yuen Industrial Holding MSCI Hong Kong
Sunevision (8008.HK, HK$1.64, NR) announces final results. Sunvision recorded a profit attributable to owners of HK$450 mn for 1H12. The firm declared the payment of a final dividend of HK$0.082 per share in respect of the year. (12-Sep)
70
100
130
160
190
09/11 12/11 03/12 06/12 09/12
Sunevision Holdings MSCI Hong Kong
China Overseas Grand Oceans (0081.HK, HK$7.95, NR) sales value for August decreased by 8% to HK$1.06 bn. China Overseas Grand Oceans reported a property sales value of HK$1.06 bn for Aug, down 8% MoM. In the same month its property sales area jumped 33% MoM to 103,700 sqm. From Jan to Aug of this year the company reaped 695,700 sqm in property sales area and HK$10.22 bn in sales value, accounting for 79% of its yearly target of HK$13 bn. (13-Sep)
40
60
80
100
120
140
09/11 12/11 03/12 06/12 09/12
China Overseas Grand Oceans MSCI Hong Kong
*Source: China Press Digest, CIS, DataStream
14 September 2012
David & Goliath 10
Hong Kong – Company updates Luk Fook (0590.HK, HK$22.45, N [V], TP HK$23.30) Chow Sang Sang (0116.HK, HK$17.06, O, TP HK$20.00)
Major beneficiary of QE3
■ The low gold price hedging ratio of only 20% has led to a high
correlation between Luk Fook’s performance and the gold prices,
given 80% of the holding gain of inventory passes on directly to
the gross margin.
■ Therefore, we believe the less bearish gold price outlook should
justify the re-rating of Luk Fook from its current valuation of an 8-
9x CY13E P/E.
■ The worse-than-expected rental pressure has offset the benefits
from the recent positive gold price momentum. We have lowered
our FY3/13-FY3/14 earnings forecasts by 0.4-2.9%. Note,
potential gross margin improvement is not priced in yet, in our
view.
■ Luk Fook traded as high as a 16x CY13E P/E on the gold price
rally in July 2011. We set our target price of HK$23.3 based on a
10x CY13E P/E (previously 8x FY3/13E P/E), with the more
aggressive multiple assigned on the back of a less bearish gold
price outlook. However, with only 9% potential upside to our
target price, we maintain our NEUTRAL rating on the stock.
Most stable earnings growth, but cheapest valuation
■ We initiate coverage on Chow Sang Sang (CSS) with an
OUTPERFORM rating and a target price of HK$20.0 based on
10x CY2013 P/E, which implies 0.56x PEG. We like its stable
earnings outlook and 100% self-operated model which allows a
flexible expansion strategy as well as prudent inventory
management.
■ Despite the overall weakness in gold price as well as jewellery
demand, CSS still registered a solid SSSG of around 16% YoY in
June quarter 2012 in Hong Kong and outperformed the overall
Hong Kong market growth of 6.8% YoY. Stripping out the holding
gain/loss, net profits saw 10.6% YoY growth in 1H12.
■ With the negative YoY change in gold price narrowing, we expect
Chow Sang Sang’s earnings momentum to bottom out in 3Q2012
and recover from 4Q onward.
■ CSS is trading around lowest valuation range, which in our view
is not justified. We believe CSS stable earnings outlook deserves
to trade at least the same valuation of Luk Fook (~10x CY2013
P/E). Risks on CSS include unfavourable gold price movement
and strong reliance on mainland Chinese visitors to HK/Macau.
Bbg/RIC 21.35
23.30 (16.50)
589.11 9
3.4
8.5
Free float (%) 54.7 Performance 1M 3M 12M
Absolute (%) 12.1 42.9 (44.1)
Relativ e (%) 13.4 35.9 (43.6)
Year 03/11A 03/12A 03/13E 03/14E 03/15E
8,091 11,907 13,498 16,150 19,280
1,083 1,665 1,527 1,889 2,255
866 1,334 1,181 1,438 1,686
1.71 2.43 2.00 2.44 2.86
n.a. n.a. (3) 0 1
n.a. n.a. 2.15 2.56 3.01
58.3 42.0 -17.3 21.8 17.3
12.5 8.8 10.6 8.7 7.5
3.2 4.3 4.2 5.1 6.0
10.7 6.6 6.8 5.2 4.2
3.2 2.1 1.9 1.7 1.5
34.1 29.6 19.4 20.4 21.0
-27.9 -27.2 -32.8 -35.2 -36.2
38.2 - 14.7
12,577.5/ 1,621.6
ROE (%)
Note1:Luk Fook Holdings (International) Limited is an investment holding company. It is engaged in the sourcing, designing, wholesaling and retailing of a
range of gold jewellery, gold ornaments, gem-set jewellery, jadeite, gemstones, and other accessory items..
Mkt cap (HK$/US$ mn)Daily trad v al - 6m av g (US$ mn)
Major shareholders Luk Fook (Control) Limited
Net debt(cash)/equity (%)
Rev enue (HK$ mn)
52-w k range (HK$)
590 HK / 0590.HK
N (N) [V]
Daily trad v ol - 6m av g (mn)
Rating (prev. rating)
Shares outstanding (mn)
Price (07 Sep 12 , HK$)
TP (prev. TP HK$)
Est. pot. % chg. to TP
EBITDA (HK$ mn)
Net profit (HK$ mn)
EPS (HK$)
- Change from prev . EPS (%)
- Consensus EPS (HK$)
EPS grow th (%)
P/E (x )
Div idend y ield (%)
EV/EBITDA (x )
P/B (x )
Bbg/RIC 15.98
20.00 (NA)
676.92 25
0.8
1.8
Free float (%) 43.8 Performance 1M 3M 12M
Absolute (%) (1.4) 0.1 (38.9)
Relativ e (%) 0.0 (6.9) (38.3)
Year 12/10A 12/11A 12/12E 12/13E 12/14E
11,705 17,158 19,651 23,917 29,089
1,077 1,557 1,485 1,937 2,521
757 1,094 1,052 1,354 1,793
1.16 1.62 1.55 2.00 2.65
n.a. n.a. 0 0 0
n.a. n.a. 1.46 1.81 2.18
21.9 39.0 -3.8 28.7 32.5
13.7 9.9 10.3 8.0 6.0
2.7 3.8 3.9 5.0 6.6
10.8 7.9 8.4 6.2 5.1
1.8 1.7 1.5 1.3 1.1
15.8 18.2 15.5 17.3 19.8
14.8 23.0 21.6 14.7 19.3
26.2 - 15.0
10,817.2/ 1,394.6
ROE (%)
Note1:Chow Sang Sang mainly engaged in the manufacture and retail of gold, gem-set jewellery products and watches (> 70% of revenue in 2011),
wholesale of precious metals, securities and commodity broking, and gold bullion trading and property investment..
Mkt cap (HK$/US$ mn)Daily trad v al - 6m av g (US$ mn)
Major shareholders Ev erw in Co. Ltd. (17.73%)
Net debt(cash)/equity (%)
Rev enue (HK$ mn)
52-w k range (HK$)
116 HK / 0116.HK
O (NA)
Daily trad v ol - 6m av g (mn)
Rating (prev. rating)
Shares outstanding (mn)
Price (07 Sep 12 , HK$)
TP (prev. TP HK$)
Est. pot. % chg. to TP
EBITDA (HK$ mn)
Net profit (HK$ mn)
EPS (HK$)
- Change from prev . EPS (%)
- Consensus EPS (HK$)
EPS grow th (%)
P/E (x )
Div idend y ield (%)
EV/EBITDA (x )
P/B (x )
Price performance vs. MSCI Hong Kong Price performance vs. MSCI Hong Kong
30
50
70
90
110
09/11 11/11 01/12 03/12 05/12 07/12 09/12
Luk Fook MSCI Hong Kong
50
65
80
95
110
09/11 11/11 01/12 03/12 05/12 07/12 09/12
Chow Sang Sang MSCI Hong Kong
Gabriel Chan, CFA / Research Analyst / 852 2101 6523 /
exposure to synthetic yarns and fabrics which has less China-
international price difference; (2) usage of cheaper imported
cotton yarns from countries like Pakistan and India; (3) well
controlled inventory position and (4) rich cash on hand.
■ We found the company’s cash on hand is close to historical
highs, therefore there is a good chance for another special
dividend.
■ We cut FY13/14E EPS by 32/12% on lower ASP and sales
volume assumptions. We believe the industry recovery is more
likely to be the theme for FY3/14E. We roll over our valuation
basis to CY13. Our new target price of HK$5.60 (from HK$5.20)
is based on 9x CY13E EPS. We believe the stock’s high dividend
yield and strong balance sheet are attractive. Maintain
OUTPERFORM rating.
1H FY3/13E preview: Waiting for the worst to be over
■ Our recent channel checks indicated that the overall environment
remains tough for export textile manufacturers. Texwinca seems
to be among the worst given its recent profit warning.
■ This time the situation is even worse than the financial crisis in
2008. We expect Texwinca to record 15% ASP decline, 5%
volume drop and only 7% gross margin in 1H FY3/13E for its
textile business.
■ Figure 2 shows that Texwinca’s gross margin contraction was
among the worst in 2H FY3/12, which raises a question about its
product competitiveness. Its inventory increase added another
concern. Having said that, the positive is the company was still
keen to hold on to cash and was in a net cash position as of last
reported.
■ Texwinca’s stock price has dropped 24% since it issued a profit
warning in mid-August (already priced in, in our view). We slash
FY13/14E EPS by 56/46% on lower ASP, volume and margin
assumptions. Accordingly, we cut our target price to HK$5.50
(from HK$9.30), based on an unchanged 9.0x P/E and CY13E
EPS. Maintain NEUTRAL.
Bbg/RIC 4.99
5.60 (5.20)
1,433.21 12
0.6
0.4
Free float (%) 30.5 Performance 1M 3M 12M
Absolute (%) (10.1) (10.3) 13.2
Relativ e (%) (10.1) (17.0) 7.7
Year 03/11A 03/12A 03/13E 03/14E 03/15E
7,181 6,420 6,234 7,421 8,370
1,394 1,215 1,113 1,373 1,570
876 893 728 936 1,094
0.61 0.62 0.51 0.65 0.76
n.a. n.a. (32) 0 0
n.a. n.a. 0.61 0.63 0.62
9.1 1.9 -18.5 28.7 16.8
8.2 8.0 9.8 7.6 6.5
6.6 14.0 5.6 7.2 8.4
4.6 4.4 4.9 3.5 2.8
1.9 1.8 1.8 1.6 1.4
24.8 23.0 18.2 21.6 22.2
-19.9 -46.6 -40.5 -49.6 -51.4
- Consensus EPS (HK$)
EPS grow th (%)
P/E (x )
Div idend y ield (%)
EV/EBITDA (x )
P/B (x )
EBITDA (HK$ mn)
Net profit (HK$ mn)
EPS (HK$)
- Change from prev . EPS (%)
Price (12 Sep 12 , HK$)
TP (prev. TP HK$)
Est. pot. % chg. to TP
52-w k range (HK$)
1382 HK / 1382.HK
O (O)
Daily trad v ol - 6m av g (mn)
Rating (prev. rating)
Shares outstanding (mn)
5.65 - 3.93
7,151.7/ 922.2
ROE (%)
Note1:Pacific Textile focuses on the manufacturing of customised knitted fabrics with the cooperation with well-known international retailer brands. It has
production sites in China, Sri Lanka and Bangladesh. Most of its fabrics are for export garments..
Mkt cap (HK$/US$ mn)Daily trad v al - 6m av g (US$ mn)
Major shareholders Mr. lp Ping Im (28.3%)
Net debt(cash)/equity (%)
Rev enue (HK$ mn)
Bbg/RIC 5.38
5.50 (9.30)
1,363.37 2
1.1
1.1
Free float (%) 45.7 Performance 1M 3M 12M
Absolute (%) (24.8) (38.0) (41.1)
Relativ e (%) (23.2) (43.1) (40.9)
Year 03/11A 03/12A 03/13E 03/14E 03/15E
11,862 13,766 13,252 14,323 15,678
1,672 1,266 988 1,374 1,767
1,133 930 630 910 1,208
0.83 0.68 0.46 0.66 0.88
n.a. n.a. (56) (46) 0
n.a. n.a. 0.81 0.95 0.94
10.8 -18.8 -32.3 44.2 32.7
6.4 7.9 11.7 8.1 6.1
9.9 9.3 5.1 7.4 9.8
4.0 5.1 6.1 3.8 2.9
1.4 1.3 1.3 1.2 1.1
23.1 17.3 11.1 15.2 18.6
-11.7 -15.2 -20.9 -31.3 -31.1
- Consensus EPS (HK$)
EPS grow th (%)
P/E (x )
Div idend y ield (%)
EV/EBITDA (x )
P/B (x )
EBITDA (HK$ mn)
Net profit (HK$ mn)
EPS (HK$)
- Change from prev . EPS (%)
Price (10 Sep 12, HK$)
TP (prev. TP HK$)
Est. pot. % chg. to TP
52-w k range (HK$)
321 HK / 0321.HK
N (N)
Daily trad v ol - 6m av g (mn)
Rating (prev. rating)
Shares outstanding (mn)
10.08 - 5.27
7,334.9/ 945.9
ROE (%)
Note 1: Texwinca Holdings Limited produces knitted fabric and yarn, which accounts for 80-90% of its operating profits. The company is also engaged in the
retail and distribution business with over 4,000 outlets in Asia and ~80% of retail sales from China.
Mkt cap (HK$/US$ mn)Daily trad v al - 6m av g (US$ mn)
Major shareholders Mr. Poon Bun Chak (48.3%)
Net debt(cash)/equity (%)
Rev enue (HK$ mn)
Price performance vs. MSCI Hong Kong Price performance vs. MSCI Hong Kong
Convenience Retail 0831.HK 419 4.40 1.41 (68.0) Not rated Dec 19.4 18.3 3.4 3.2 6.1 (2.4) 2.1 (0.9) (2.0)
Cross-Harbour 0032.HK 304 6.33 6.48 2.3 Not rated Dec 9.7 9.4 0.8 0.7 (4.4) (13.1) 2.1 3.1 2.1
Dah Chong Hong 1828.HK 1,693 7.19 5.66 (21.3) Not rated Dec 9.9 9.7 1.7 1.5 7.5 0.4 2.6 2.9 (4.6)
Share price performance
HK$ term (%)P/B (x)P/E (x)
CalendarizedCalendarized
* Include the Hong Kong Industrial, consumer and media companies covered by Credit Suisse, and small-cap stocks in HOLT® database with market cap between US$150 mn and US$2 bn.
For stocks that are Not Rated, I/B/E/S consensus forecast are used. CFROI® is a registered trademark in the United States and other countries (excluding the United Kingdom) of Credit
Suisse or its subsidiaries or affiliates.
* Companies in bold and italic indicate constituents of Credit Suisse Hong Kong Small Cap Index
14 S
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Valuations of Credit Suisse HK small-cap watch list*
Market CS target/ Potential Credit Year HOLT CFROI
Cap Price HOLT warranted return Suisse end CFROI Spread
Hutchison Harbour Ring 0715.HK 763 0.66 0.40 (38.8) Not rated Dec 65.3 65.1 1.0 1.0 1.4 (6.4) 6.5 1.5 4.8
Hutchison Telecom HK 0215.HK 2,144 3.45 4.20 21.7 NEUTRAL Dec 16.3 13.4 1.6 1.5 6.8 (0.4) (2.3) (7.0) 1.5
I.T. 0999.HK 524 3.31 2.33 (29.7) Not rated Feb 8.7 8.0 1.8 1.5 7.9 0.2 (5.7) (7.0) 9.2
HK$ term (%)P/E (x) P/B (x)
Calendarized Calendarized Share price performance
* Include the Hong Kong Industrial, consumer and media companies covered by Credit Suisse, and small-cap stocks in HOLT® database with market cap between US$150 mn and US$2 bn.
For stocks that are Not Rated, I/B/E/S consensus forecast are used. CFROI® is a registered trademark in the United States and other countries (excluding the United Kingdom) of Credit
Suisse or its subsidiaries or affiliates.
* Companies in bold and italic indicate constituents of Credit Suisse Hong Kong Small Cap Index
14 S
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David
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Valuations of Credit Suisse HK small-cap watch list*
Market CS target/ Potential Credit Year HOLT CFROI
Cap Price HOLT warranted return Suisse end CFROI Spread
Min Xin 0222.HK 252 4.26 6.31 48.2 Not rated Dec 6.5 6.0 0.7 0.6 8.8 (0.8) 0.9 6.5 5.4
Mingfa 0846.HK 1,729 2.20 0.94 (57.3) Not rated Dec 6.8 12.4 1.5 1.3 3.7 (3.5) 4.8 10.0 4.8
Miramar 0071.HK 692 9.30 23.78 155.7 Not rated Dec 4.0 3.6 0.5 0.5 12.2 4.2 4.5 9.2 14.7
Mongolia Energy 0276.HK 261 0.30 1.15 283.4 Not rated Mar (0.5) (1.4) n.a. 0.2 (402.1) (409.6) (1.6) (15.5) (31.8)
Nagacorp 3918.HK 1,179 4.39 4.44 1.2 Not rated Dec 12.8 11.3 3.3 3.0 24.2 15.8 12.6 10.0 38.1
Natural Beauty 0157.HK 253 0.98 0.61 (37.8) Not rated Dec 16.9 16.7 2.5 2.6 15.9 7.3 (6.7) (15.5) (22.8)
New World Dept. St. China 0825.HK 915 4.21 2.75 (34.7) Not rated Jun 9.9 9.8 1.4 1.2 5.4 (2.1) 0.5 0.5 (3.0)
Nex t Media 0282.HK 212 0.68 0.42 (38.6) Not rated Mar n.a. (2.0) n.a. 0.5 (20.3) (28.9) 3.0 41.7 23.6
Oriental Press 0018.HK 244 0.79 0.70 (11.9) Not rated Mar n.a. 23.4 n.a. 0.6 1.5 (7.3) 0.0 0.0 (13.2)
Oriental Watch 0398.HK 175 2.38 2.32 (2.4) Not rated Mar 7.4 6.8 0.7 0.6 6.4 (2.1) 4.8 (1.7) 6.2
Calendarized Calendarized Share price performance
P/E (x) P/B (x) HK$ term (%)
* Include the Hong Kong Industrial, consumer and media companies covered by Credit Suisse, and small-cap stocks in HOLT® database with market cap between US$150 mn and US$2 bn.
For stocks that are Not Rated, I/B/E/S consensus forecast are used. CFROI® is a registered trademark in the United States and other countries (excluding the United Kingdom) of Credit
Suisse or its subsidiaries or affiliates.
* Companies in bold and italic indicate constituents of Credit Suisse Hong Kong Small Cap Index
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Valuations of Credit Suisse HK small-cap watch list*
Market CS target/ Potential Credit Year HOLT CFROI
Cap Price HOLT warranted return Suisse end CFROI Spread
* Include the Hong Kong Industrial, consumer and media companies covered by Credit Suisse, and small-cap stocks in HOLT® database with market cap between US$150 mn and US$2 bn.
For stocks that are Not Rated, I/B/E/S consensus forecast are used. CFROI® is a registered trademark in the United States and other countries (excluding the United Kingdom) of Credit
Suisse or its subsidiaries or affiliates.
* Companies in bold and italic indicate constituents of Credit Suisse Hong Kong Small Cap Index
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Valuations of Credit Suisse HK small-cap watch list*
Market CS target/ Potential Credit Year HOLT CFROI
Cap Price HOLT warranted return Suisse end CFROI Spread
* Include the Hong Kong Industrial, consumer and media companies covered by Credit Suisse, and small-cap stocks in HOLT® database with market cap between US$150 mn and US$2 bn.
For stocks that are Not Rated, I/B/E/S consensus forecast are used. CFROI® is a registered trademark in the United States and other countries (excluding the United Kingdom) of Credit
Suisse or its subsidiaries or affiliates.
* Companies in bold and italic indicate constituents of Credit Suisse Hong Kong Small Cap Index
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Hong Kong – Screening Absolute price performance - top & bottom 10 companies Absolute price performance - top & bottom 10 companies Absolute price performance - top & bottom 10 companies
Price 1W return Price 1M return Price 3M return Company RIC (HK$) (%) Company RIC (HK$) (%) Company RIC (HK$) (%)
Price-to-earnings - most & least expensive 10 companies Price-to-book - most & least expensive 10 companies CFROI® Spread - top & bottom 10 companies
Price 12 P/E Price 12 P/B Price CFROI® Spread Company RIC (HK$) (x) Company RIC (HK$) (x) Company RIC (HK$) (%)
Winners Winners Winners Paliburg 0617.HK 2.48 1.2 Lippo 0226.HK 3.24 0.2 Sitoy 1023.HK 3.50 34.2 Apollo Solar Energy 0566.HK 0.21 1.9 Paliburg 0617.HK 2.48 0.2 Huabao 0336.HK 4.20 27.3 HongKong Chinese 0655.HK 1.16 2.2 Tomson Group 0258.HK 1.70 0.2 Apollo Solar Energy 0566.HK 0.21 22.4 K. Wah Int'l 0173.HK 3.44 3.0 HongKong Chinese 0655.HK 1.16 0.2 Lee's Pharma. 0950.HK 5.08 18.2 Royale Furniture 1198.HK 0.86 3.0 Mongolia Energy 0276.HK 0.30 0.2 Nagacorp 3918.HK 4.39 15.8 Regal Hotels 0078.HK 3.25 3.2 Allied Group 0373.HK 17.92 0.2 RexLot 0555.HK 0.50 15.7 Allied Properties 0056.HK 0.97 3.2 Apollo Solar Energy 0566.HK 0.21 0.3 ASM Pacific 0522.HK 92.00 15.0 Miramar 0071.HK 9.30 3.6 TPV 0903.HK 1.58 0.3 Epro 8086.HK 0.72 9.9 VST 0856.HK 1.47 3.7 Victory City 0539.HK 0.78 0.3 Luk Fook 0590.HK 22.45 9.9 Lippo 0226.HK 3.24 4.1 HKC 0190.HK 0.30 0.3 Emperor Entertainment 0296.HK 1.54 9.7 Losers Losers Losers Honbridge 8137.HK 0.59 214.2 Epro 8086.HK 0.72 10.5 Mongolia Energy 0276.HK 0.30 (409.6) Hutchison Harbour Ring 0715.HK 0.66 65.1 Bonjour 0653.HK 1.02 10.0 Chaoyue 0147.HK 0.50 (56.5) Epro 8086.HK 0.72 39.0 Sa Sa 0178.HK 4.93 7.4 Next Media 0282.HK 0.68 (28.9) Comba Telecom Sys. 2342.HK 2.36 37.3 Honbridge 8137.HK 0.59 6.6 G-Resources 1051.HK 0.39 (21.1) ERA Mining 8043.HK 0.87 34.8 VTech 0303.HK 94.05 5.3 Hi Sun Tech. (China) 0818.HK 0.81 (17.1) CK Life Sciences 0775.HK 0.62 34.0 ASM Pacific 0522.HK 92.00 5.0 Asia Financial 0662.HK 2.94 (14.3) HK & S Hotels 0045.HK 9.25 32.5 Lee's Pharma. 0950.HK 5.08 4.6 Titan Petrochemicals 1192.HK 0.25 (13.4) Pacific Basin 2343.HK 3.84 30.1 Vitasoy 0345.HK 6.97 4.5 Cross-Harbour 0032.HK 6.33 (13.1) Value Partners 0806.HK 3.43 29.8 Titan Petrochemicals 1192.HK 0.25 4.1 Melco 0200.HK 6.40 (11.7) Shui On Con. & Mats. 0983.HK 7.17 27.8 Fairwood 0052.HK 17.12 4.0 TOM 2383.HK 0.82 (11.5)
* For stocks that are not rated, I/B/E/S consensus forecast numbers are used. CFROI® Spread is the difference between CFROI® and market implied discount rate. A larger number indicates
that more value is created by a company
14 September 2012
David & Goliath 19
China – Street talk * Central China Real Estate (0832.HK, HK$1.89, NR) contracted sales drop by 35% YoY. Central China Real Estate, a Henan Province-based and Hong Kong-listed property developer, announced that its contracted sales in Aug sat at Rmb978 mn, up 22% MoM but down 35% YoY. In the month its property contracted sales area decreased 14% MoM and 36% YoY to 165,345 sqm. In the first eight months of this year the company's contracted sales totalled Rmb6.9 bn, up 8% YoY and accounting for 77% of its sales target of Rmb9 bn. Meanwhile, its contracted sales area hit 1.07 mn sqm, up 3% YoY. (10-Sep)
70
80
90
100
110
120
09/11 12/11 03/12 06/12 09/12
Central China Real Estate MSCI China
China Molybdenum (3993.HK, HK$3.43, NR) receives formal written approval from CSRC. China Molybdenum announced that it received the formal written approval from the CSRC for the A share issue on 7 Sep. The A share issue will comprise the allotment and issue of not more than 542,000,000 A shares to qualified public investors. (10-Sep)
50
65
80
95
110
09/11 12/11 03/12 06/12 09/12
China Molybdenum MSCI China
SMIC (0981.HK, HK$.30, N [V], TP HK$.41) revenue increases SMIC has reported that revenues for 2Q12 climbed 27% QoQ and 20% YoY to a record US$422 mn. SMIC credited the positive sales performance to rising sales generated from its 65nm/55nm process technologies, and specialty processes for the manufacture of power management ICs, EEPROM and others. (12-Sep)
40
60
80
100
120
09/11 12/11 03/12 06/12 09/12
SMIC MSCI China
China Tianyi (0756.HK, HK$1.18, NR) net profit climbs 63%. China Tianyi registered a profit attributable to owners of Rmb250 mn for the year ended Jun 2012, jumping approximately 63%. The firm did not declare the payment of a final dividend to shareholders in respect of the year. (13-Sep)
50
65
80
95
110
09/11 12/11 03/12 06/12 09/12
China Tianyi Holdings MSCI China
*Source: China Press Digest, CIS, DataStream
14 September 2012
David & Goliath 20
China – Company updates Green Dragon Gas (GDG.L, $4.10, O [V], TP $11.70) Lonking (3339.HK, HK$1.34, N [V], TP HK$1.80)
New report: Darkest before dawn
■ 1H12 results—still loss making: With no major production gain,
the first-half loss was unsurprising, but all eyes likely turn to the
balance sheet—to see that near cash (cash + ‘other financial
assets’) reduced by US$56 mn in the half to US$80 mn.
■ Production update I—more wells drilled: GDG recorded 8,789
metres of in-seam drilling in 1H12; we assume that eight lateral
wells were drilled in the half.
■ Production update II—exit production waiting to ramp: We
update our drill-up/production forecasts—now exiting 2012 at
2.1Bcf, and reaching 18Bcf in 3Q14, assuming additional funding
is introduced on a timely basis.
■ Reiterate OUTPERFORM, new TP at $11.7/share: A recent site
visit confirmed a significant increase in on-site activity; however,
GDG has slipped from our earlier growth forecast. We update our
drill-up/production model, but retain our valuation methodology
i.e. de-risking our GSS DCF forecast via a percentage of total
wells drilled. Our new TP is arrived at US$11.7/sh (from
US$15.1/sh) and we retain our OUTPERFORM rating.
Comment on August sales
■ Lonking released its August sales on 11 September. Wheel
loader sales at 1,810 units, fell 25.4% YoY, moderating from 37%
YoY decline in July and largely within expectations. Sequentially,
unit sales grew by 4% MoM. We estimate Lonking’s market share
will remain below 15%, declining from above 18% in 2011.
■ The company’s excavator sales were stronger than expected.
Excavator sales in August were at 242 units, recording a 14.7%
YoY increase. Sequentially, sales rose 18.6% MoM (versus 17%
MoM decline in August last year), driven by higher exports (44
units versus 12 units in July). Domestic unit sales grew modestly
by 3% MoM. Lonking’s market share in excavator market is
showing solid improvement: from low of 2.5% in 1Q12 to 3.8% in
August.
■ Trading at 0.7x P/B with overhang from convertible bond
redemption removed coupled with prudent risk management, we
believe Lonking’s shares are cheap.
■ But the stock could face further earnings cuts and re-rating
requires improvement in industry fundamentals, which is not yet
within sight. We maintain our NEUTRAL rating on the stock.
Bbg/RIC 4.15
11.70 (15.10)
136.54 182
0.0
0.1
Free float (%) 35 Performance 1M 3M 12M
Absolute (%) (19.4) (30.6) (50.8)
Relativ e (%) (15.7) (29.7) (48.3)
Year 12/10A 12/11A 12/12E 12/13E 12/14E
49.7 75.2 80.7 154.4 228.9
1.3 -13.0 -4.9 2.9 44.9
-13.2 -27.6 -15.1 -16.9 11.6
(0.11) (0.20) (0.11) (0.12) 0.08
n.a. n.a. n.m n.m (87)
n.a. n.a. 0.03 0.15 1.14
n.m. n.m. n.m. n.m. n.m.
n.m. n.m. n.m. n.m. 48.9
0.0 0.0 0.0 0.0 0.0
401.7 -42.8 -122.2 254.7 18.9
0.8 0.9 0.9 0.9 0.9
-2.2 -4.2 -2.4 -2.7 1.9
-8.2 -1.3 4.1 29.3 44.1
10.13 - 3.70
566.5
ROE (%)
Note1: Green Dragon Gas (GDG) is the largest independent CBM producer in China. GDG holds 6 PSCs in China on its upstream side, owns its
transportation fleet and pipelines in midstream distribution, and sells its gas through CNG stations on its downstream side.
Mkt cap (US$ mn)Daily trad v al - 6m av g (US$ mn)
Major shareholders Randeep Grew al 64%
Net debt(cash)/equity (%)
Rev enue (US$ mn)
52-w k range (US$)
GDG LN / GDG.L
O (O) [V]
Daily trad v ol - 6m av g (mn)
Rating (prev. rating)
Shares outstanding (mn)
Price (10 Sep 12 , US$)
TP (prev. TP US$)
Est. pot. % chg. to TP
EBITDA (US$ mn)
Net profit (US$ mn)
EPS (US$)
- Change from prev . EPS (%)
- Consensus EPS (US$)
EPS grow th (%)
P/E (x )
Div idend y ield (%)
EV/EBITDA (x )
P/B (x )
Bbg/RIC 1.30
1.80 (1.80)
4,280.10 38
20.6
4.6
Free float (%) 39.3 Performance 1M 3M 12M
Absolute (%) (17.2) (35.6) (57.1)
Relativ e (%) (13.4) (34.7) (54.6)
Year 12/10A 12/11A 12/12E 12/13E 12/14E
12,020 12,721 9,472 10,551 10,551
2,560 2,358 1,410 1,628 2,166
1,766 1,730 544 738 1,191
0.41 0.40 0.13 0.17 0.28
n.a. n.a. 0 0 0
n.a. n.a. 0.19 0.23 0.27
120.7 -2.0 -68.5 35.6 61.4
2.6 2.6 8.4 6.2 3.8
2.9 7.8 13.3 4.2 5.7
2.9 3.5 5.1 4.2 2.7
0.9 0.7 0.7 0.7 0.6
39.1 29.7 8.5 11.1 16.2
55.5 57.4 42.6 32.3 15.8
3.50 - 1.01
5,564.1/ 717.6
ROE (%)
Note1:ORD/ADR=50.00.Note2:Lonking Holdings Limited is engaged in the manufacture and distribution of wheel loaders, road rollers, excavators, fork lifts,
and other infrastructure machinery and the provision of finance lease for the infrastructure machinery..
Mkt cap (HK$/US$ mn)Daily trad v al - 6m av g (US$ mn)
Major shareholders China Longgong (30.66%)
Net debt(cash)/equity (%)
Rev enue (Rmb mn)
52-w k range (HK$)
3339 HK / 3339.HK
N (N) [V]
Daily trad v ol - 6m av g (mn)
Rating (prev. rating)
Shares outstanding (mn)
Price (11 Sep 12 , HK$)
TP (prev. TP HK$)
Est. pot. % chg. to TP
EBITDA (Rmb mn)
Net profit (Rmb mn)
EPS (Rmb)
- Change from prev . EPS (%)
- Consensus EPS (Rmb)
EPS grow th (%)
P/E (x )
Div idend y ield (%)
EV/EBITDA (x )
P/B (x )
Price performance vs. MSCI China Price performance vs. MSCI China
Bosideng 3998.HK 2,375 2.30 1.98 (13.9) Not rated Mar 10.6 10.4 2.1 1.9 13.0 6.0 5.5 1.8 28.5
BYD Electronic 0285.HK 462 1.59 4.40 176.4 Not rated Dec 4.8 5.0 0.4 0.3 4.4 (3.4) 8.2 (1.9) (17.6)
Catic Shenzhen 0161.HK 96 2.69 2.16 (19.6) Not rated Dec 7.0 6.5 0.6 0.6 5.5 (3.0) 9.8 (6.3) (5.6)
Central China Real Estate 0832.HK 592 1.89 6.50 243.7 Not rated Dec 4.6 4.4 0.8 0.8 14.9 6.9 6.2 (5.5) 1.6
Chaowei Power 0951.HK 572 4.41 12.29 178.6 Not rated Dec 8.0 6.5 2.1 1.5 20.1 11.8 4.3 (4.1) 13.7
Chigo 0449.HK 186 0.17 0.19 9.0 Not rated Dec (8.4) 3.7 0.5 0.4 0.8 (7.2) 1.8 (13.6) (18.2)
Chiho-Tiande 0976.HK 524 3.89 1.70 (56.2) Not rated Dec 25.9 21.0 2.0 1.3 4.8 (3.1) 0.0 (1.5) (6.3)
China Aerospace 0031.HK 215 0.54 0.59 9.3 Not rated Dec 4.1 12.4 0.4 0.4 2.9 (5.8) 1.9 (5.3) (11.5)
China All Access 0633.HK 185 1.18 2.48 109.9 Not rated Dec 5.6 4.4 0.9 0.8 13.4 4.6 0.0 (22.9) (18.1)
China Aoyuan 3883.HK 327 0.97 0.77 (20.7) Not rated Dec 4.6 6.0 0.3 0.3 3.5 (4.7) 5.4 (3.0) (4.9)
China Automation 0569.HK 222 1.68 1.83 9.0 Not rated Dec 7.1 6.5 0.8 0.7 11.1 3.0 14.3 17.5 (15.2)
Share price performance
HK$ term (%)P/B (x)P/E (x)
CalendarizedCalendarized
* Include the China Industrial, consumer and media companies covered by Credit Suisse, and small-cap stocks in HOLT® database with market cap between US$150 mn and US$2 bn. For
stocks that are Not Rated, I/B/E/S consensus forecast are used. CFROI® is a registered trademark in the United States and other countries (excluding the United Kingdom) of Credit Suisse or
its subsidiaries or affiliates.
* Companies in bold and italic indicate constituents of Credit Suisse China Small Cap Index.
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Valuations of Credit Suisse China small-cap watch list *
Market CS target/ Potential Credit Year HOLT CFROI
Cap Price HOLT warranted return Suisse end CFROI Spread
China Datang RNP 1798.HK 242 0.75 1.97 162.7 OUTPERFORM Dec 5.2 4.4 0.5 0.5 4.4 (2.7) 5.6 (6.3) (34.8)
China Daye Non-Ferrous 0661.HK 704 0.32 0.02 (93.7) Not rated Dec (6.8) 5.9 2.1 2.1 (37.1) (45.7) 1.6 (8.7) (10.0)
China Dongxiang 3818.HK 557 0.78 1.17 50.2 Not rated Dec 35.1 15.9 0.5 0.5 4.3 (3.1) 2.6 25.8 (11.4)
China Everbright 0257.HK 1,988 3.83 2.50 (34.6) Not rated Dec 17.5 14.4 2.3 1.9 8.4 1.0 2.1 (1.5) 3.5
China Gas 0384.HK 2,506 4.30 3.90 (9.3) NEUTRAL Mar 24.6 18.3 2.0 1.8 7.2 0.0 0.7 0.7 15.9
China Glass 3300.HK 166 0.83 0.70 (15.1) Not rated Dec 5.5 8.3 0.5 0.4 3.3 (4.9) 12.2 6.4 (27.2)
China Gold Int'l Resources 2099.HK 1,462 28.60 15.70 (45.1) UNDERPERFORM Dec 18.4 26.0 1.1 1.1 6.1 (1.3) (0.7) 28.8 7.1
China Green 0904.HK 194 1.70 5.21 206.5 Not rated Apr 2.6 7.6 0.3 1.0 8.9 3.4 0.0 (5.0) 7.6
China High Speed 0658.HK 406 2.31 2.00 (13.4) UNDERPERFORM Dec 4.6 9.3 0.3 0.3 5.1 (2.2) 1.3 (13.8) (18.4)
China Huiyuan 1886.HK 431 2.26 0.38 (83.2) Not rated Dec 8.8 23.7 0.5 0.5 (2.8) (10.7) (0.9) (8.1) (8.9)
China ITS 1900.HK 244 1.15 1.07 (6.7) Not rated Dec 13.4 6.8 0.7 0.5 4.5 (3.7) 10.6 9.5 (5.0)
China Liansu 2128.HK 1,569 4.04 6.18 52.9 Not rated Dec 7.9 7.2 2.0 1.4 17.0 9.7 12.2 6.6 (0.7)
China Lilang 1234.HK 790 5.10 6.66 30.6 Not rated Dec 8.0 7.3 2.3 2.1 23.7 16.1 (1.0) (1.9) (7.4)
China Lumena 0067.HK 959 1.33 3.96 198.1 Not rated Dec 4.7 4.5 0.5 0.4 15.8 8.7 9.0 2.3 (7.0)
China Medical System 0867.HK 1,239 3.98 5.80 45.7 OUTPERFORM Dec 19.4 14.4 3.1 2.7 23.6 16.0 0.0 (3.9) 23.2
China Metal 0319.HK 175 1.35 3.12 131.4 Not rated Dec 5.6 4.4 0.6 0.6 8.8 (0.1) 0.7 0.0 9.8
China Metal Recycling 0773.HK 922 6.09 10.62 74.4 Not rated Dec 3.7 3.8 1.1 0.8 13.2 5.7 3.7 2.4 (3.0)
China Modern Dairy 1117.HK 1,269 2.05 3.25 58.5 OUTPERFORM Jun 20.9 11.9 1.5 1.4 3.8 (3.8) 1.5 2.0 5.7
China Molybdenum 3993.HK 580 3.43 2.78 (18.9) Not rated Dec 12.2 11.7 1.3 1.2 7.2 0.4 20.8 16.7 13.6
China National Materials 1893.HK 293 1.95 2.00 2.6 NEUTRAL Dec 3.9 6.2 0.5 0.5 9.0 2.1 6.6 (5.3) (22.3)
China Nickel 2889.HK 160 0.54 1.04 91.8 Not rated Dec 15.3 45.0 0.3 0.3 3.1 (5.4) 1.9 (1.8) (1.8)
China Oil And Gas 0603.HK 544 0.85 0.80 (6.0) Not rated Dec 20.1 14.9 1.5 1.3 11.3 2.9 4.9 9.0 21.4
China OS. GRD. Oceans 0081.HK 2,340 7.95 9.96 25.2 Not rated Dec 9.5 8.8 3.5 2.6 11.4 3.9 6.0 8.0 13.7
China Pharma. 1093.HK 434 2.20 2.54 15.7 Not rated Dec 14.4 (440.0) 0.6 0.5 2.1 (6.0) 2.3 15.2 13.4
China Power Int'l. 2380.HK 1,510 2.11 2.46 16.6 OUTPERFORM Dec 19.3 8.1 0.7 0.6 2.1 (5.3) 7.1 (0.5) 9.9
China Power New Energy 0735.HK 402 0.28 0.52 84.8 Not rated Dec 10.0 2.3 0.4 0.4 4.6 (3.4) 5.7 0.0 (11.1)
China Properties 1838.HK 527 2.26 11.95 428.7 Not rated Dec 2.0 (89.4) 0.1 0.1 (0.1) (8.2) 3.7 (12.7) (12.1)
China Qinfa 0866.HK 227 0.85 -0.15 (117.1) Not rated Dec 2.6 4.1 0.6 0.4 4.3 (3.8) 6.3 (9.6) (26.1)
China Rare Earth 0769.HK 377 1.75 3.22 83.9 Not rated Dec 5.7 5.0 0.7 0.7 10.8 2.4 6.7 2.3 (13.8)
China Rongsheng 1101.HK 993 1.10 0.66 (40.2) Not rated Dec 3.6 11.2 0.4 0.2 3.7 (2.6) 11.1 0.0 (43.0)
Share price performance
HK$ term (%)
Calendarized Calendarized
P/E (x) P/B (x)
* Include the Hong Kong Industrial, consumer and media companies covered by Credit Suisse, and small-cap stocks in HOLT® database with market cap between US$150 mn and US$2 bn.
For stocks that are Not Rated, I/B/E/S consensus forecast are used. CFROI® is a registered trademark in the United States and other countries (excluding the United Kingdom) of Credit
Suisse or its subsidiaries or affiliates.
* Companies in bold and italic indicate constituents of Credit Suisse China Small Cap Index.
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Valuations of Credit Suisse China small-cap watch list *
Market CS target/ Potential Credit Year HOLT CFROI
Cap Price HOLT warranted return Suisse end CFROI Spread
Chu Kong Steel Pipe 1938.HK 368 2.82 0.81 (71.3) Not rated Dec 10.0 7.7 1.1 0.8 4.4 (4.0) (0.7) 33.6 18.5
CIMC Enric 3899.HK 578 4.50 4.29 (4.6) Not rated Dec 12.1 10.8 0.9 0.8 11.2 2.5 6.4 16.3 3.9
CITIC Telecom. 1883.HK 462 1.50 2.03 35.3 Not rated Dec 7.8 7.5 1.1 1.1 13.9 5.7 2.0 (2.6) 7.1
Citic Dameng 1091.HK 285 0.73 0.08 (89.2) Not rated Dec 5.4 (9.7) 0.6 0.6 2.0 (5.9) (3.9) (15.1) (13.1)
Citic Resources 1205.HK 1,035 1.02 2.26 121.8 Not rated Dec 3.3 10.7 0.6 0.5 0.4 (6.9) 5.2 (8.9) (16.4)
Clear Media 0100.HK 280 4.10 7.02 71.1 Not rated Dec 11.6 10.7 0.7 0.7 6.5 (2.1) (1.2) (3.5) 0.0
COSCO 0517.HK 591 3.03 3.58 18.2 Not rated Dec 11.7 12.1 0.6 0.6 4.5 (3.6) 1.7 0.0 2.0
Costin New Materials 2228.HK 317 3.17 2.44 (23.1) Not rated Dec 8.2 7.0 2.0 1.6 13.1 4.9 1.3 (1.6) (4.2)
CPMC 0906.HK 573 5.35 0.82 (84.7) Not rated Dec 12.9 11.5 1.4 0.9 4.5 (3.7) 1.9 (0.4) 12.2
Credit China 8207.HK 187 0.68 0.64 (5.8) Not rated Dec 8.0 6.3 1.8 1.3 20.2 10.7 1.5 3.0 7.9
Da Ming 1090.HK 143 1.07 0.15 (85.9) Not rated Dec 8.8 5.1 0.6 0.5 3.8 (4.6) (7.0) 18.9 (17.7)
Dachan Food 3999.HK 144 1.10 3.83 248.1 Not rated Dec 4.6 2.3 0.5 0.5 7.6 (1.4) (4.3) (16.7) (23.1)
HK$ term (%)P/E (x) P/B (x)
Calendarized Calendarized Share price performance
* Include the Hong Kong Industrial, consumer and media companies covered by Credit Suisse, and small-cap stocks in HOLT® database with market cap between US$150 mn and US$2 bn.
For stocks that are Not Rated, I/B/E/S consensus forecast are used. CFROI® is a registered trademark in the United States and other countries (excluding the United Kingdom) of Credit
Suisse or its subsidiaries or affiliates.
* Companies in bold and italic indicate constituents of Credit Suisse China Small Cap Index. Valuations of Credit Suisse China small-cap watch list *
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Valuations of Credit Suisse China small-cap watch list *
Market CS target/ Potential Credit Year HOLT CFROI
Cap Price HOLT warranted return Suisse end CFROI Spread
Hilong 1623.HK 371 1.81 1.29 (29.0) Not rated Dec 7.0 6.7 1.3 1.0 10.0 1.5 0.6 12.4 2.3
Honghua 0196.HK 611 1.47 1.34 (8.6) Not rated Dec 23.1 8.0 0.9 0.9 1.8 (6.7) 15.7 24.6 16.7
Hopson Dev. 0754.HK 1,211 5.41 3.94 (27.1) Not rated Dec 6.6 6.7 0.2 0.2 1.8 (5.3) 13.4 8.2 18.9
Hua Han Bio-Pharma. 0587.HK 454 1.46 2.12 45.5 Not rated Jun 9.9 6.6 1.5 0.9 10.6 2.2 (0.7) (8.8) 8.1
Hunan Nonferrous 2626.HK 486 2.31 0.50 (78.4) Not rated Dec 23.6 18.4 1.6 1.5 1.9 (5.5) 1.8 (2.1) (3.8)
Calendarized Calendarized Share price performance
P/E (x) P/B (x) HK$ term (%)
* Include the Hong Kong Industrial, consumer and media companies covered by Credit Suisse, and small-cap stocks in HOLT® database with market cap between US$150 mn and US$2 bn.
For stocks that are Not Rated, I/B/E/S consensus forecast are used. CFROI® is a registered trademark in the United States and other countries (excluding the United Kingdom) of Credit
Suisse or its subsidiaries or affiliates.
* Companies in bold and italic indicate constituents of Credit Suisse China Small Cap Index.
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Valuations of Credit Suisse China small-cap watch list *
Market CS target/ Potential Credit Year HOLT CFROI
Cap Price HOLT warranted return Suisse end CFROI Spread
Ports Design 0589.HK 436 6.00 4.89 (18.5) Not rated Dec 6.5 6.9 1.5 1.4 8.4 0.8 (2.4) (25.1) (30.5)
Powerlong Real Estate 1238.HK 689 1.32 2.28 73.0 Not rated Dec 1.3 4.7 0.3 0.2 3.8 (3.8) 5.6 (1.5) (2.2)
Calendarized Share price performance
P/E (x) P/B (x) HK$ term (%)
Calendarized
* Include the Hong Kong Industrial, consumer and media companies covered by Credit Suisse, and small-cap stocks in HOLT® database with market cap between US$150 mn and US$2 bn.
For stocks that are Not Rated, I/B/E/S consensus forecast are used. CFROI® is a registered trademark in the United States and other countries (excluding the United Kingdom) of Credit
Suisse or its subsidiaries or affiliates.
* Companies in bold and italic indicate constituents of Credit Suisse China Small Cap Index.
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Valuations of Credit Suisse China small-cap watch list *
Market CS target/ Potential Credit Year HOLT CFROI
Cap Price HOLT warranted return Suisse end CFROI Spread
Sijia Group 1863.HK 176 1.60 3.31 107.1 Not rated Dec 3.3 2.9 0.7 0.4 17.1 8.6 (0.6) (12.1) (28.9)
Silv er Base 0886.HK 508 3.23 34.84 978.8 Not rated Mar 6.3 3.2 n.a. 1.7 25.1 17.4 5.6 (4.9) (1.8)
Sino Biopharm. 1177.HK 1,963 3.08 3.60 16.9 OUTPERFORM Dec 33.0 20.7 4.0 3.7 18.2 10.7 3.4 6.2 15.8
SinoCom Software 0299.HK 154 1.07 0.72 (32.6) Not rated Dec 6.4 14.3 1.6 1.3 10.6 0.9 0.0 0.0 (1.8)
Sinolink Worldwide 1168.HK 233 0.51 1.26 147.8 Not rated Dec 4.8 10.8 0.3 0.2 2.1 (6.5) 4.1 2.0 (1.9)
Sinomedia 0623.HK 232 3.22 4.65 44.5 Not rated Dec 6.2 5.9 1.4 1.3 21.5 12.3 4.5 (0.6) (1.2)
Share price performance
P/E (x) P/B (x) HK$ term (%)
Calendarized Calendarized
* Include the Hong Kong Industrial, consumer and media companies covered by Credit Suisse, and small-cap stocks in HOLT® database with market cap between US$150 mn and US$2 bn.
For stocks that are Not Rated, I/B/E/S consensus forecast are used. CFROI® is a registered trademark in the United States and other countries (excluding the United Kingdom) of Credit
Suisse or its subsidiaries or affiliates.
* Companies in bold and italic indicate constituents of Credit Suisse China Small Cap Index.
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Valuations of Credit Suisse China small-cap watch list *
Market CS target/ Potential Credit Year HOLT CFROI
Cap Price HOLT warranted return Suisse end CFROI Spread
Tian An China Investment 0028.HK 814 4.19 3.82 (8.8) Not rated Dec 7.3 10.4 0.5 0.4 (0.6) (8.4) 4.5 5.8 13.2
Tiangong Int'l. 0826.HK 363 1.48 1.63 10.0 Not rated Dec 5.6 5.1 0.9 0.8 8.7 0.2 8.0 (9.8) (6.3)
Tianjin Dev. 0882.HK 490 3.56 5.48 54.0 Not rated Dec 8.7 9.9 0.4 0.4 (1.6) (9.5) 1.7 (3.5) (6.8)
Tianjin Port 3382.HK 659 0.83 1.33 59.9 Not rated Dec 7.2 6.9 0.5 0.5 5.7 (1.8) 1.2 (1.2) (8.8)
Tianneng Power 0819.HK 676 4.77 8.98 88.2 Not rated Dec 6.9 6.0 1.7 1.3 16.2 8.0 3.5 (5.7) 18.1
Tong Ren Tang 1666.HK 473 14.00 6.19 (55.8) Not rated Dec 26.6 21.5 3.9 3.5 8.8 0.6 0.4 (2.9) 12.9
Trauson 0325.HK 332 3.32 1.92 (42.2) Not rated Dec 15.1 12.0 2.0 1.7 11.3 2.5 5.4 (1.8) 29.7
Travelsky 0696.HK 494 4.11 4.83 17.4 Not rated Dec 9.3 9.1 1.3 1.2 8.4 0.9 0.7 3.8 3.3
Vinda 3331.HK 1,510 11.72 5.92 (49.5) Not rated Dec 27.1 19.9 3.5 2.5 7.7 0.0 (1.7) (8.3) (3.0)
Wasion Meters 3393.HK 334 2.79 2.78 (0.5) Not rated Dec 8.5 7.6 0.9 0.8 8.0 (0.4) 2.2 (12.8) (1.8)
Weiqiao Textile 2698.HK 148 2.77 7.34 164.9 Not rated Dec 10.8 22.0 0.2 0.2 (0.6) (8.2) 1.5 (4.2) (14.5)
Share price performance
P/E (x) P/B (x) HK$ term (%)
Calendarized Calendarized
* Include the Hong Kong Industrial, consumer and media companies covered by Credit Suisse, and small-cap stocks in HOLT® database with market cap between US$150 mn and US$2 bn.
For stocks that are Not Rated, I/B/E/S consensus forecast are used. CFROI® is a registered trademark in the United States and other countries (excluding the United Kingdom) of Credit
Suisse or its subsidiaries or affiliates.
* Companies in bold and italic indicate constituents of Credit Suisse China Small Cap Index.
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Valuations of Credit Suisse China small-cap watch list *
Market CS target/ Potential Credit Year HOLT CFROI
Cap Price HOLT warranted return Suisse end CFROI Spread
Xiamen Int'l Port 3378.HK 101 0.79 1.21 53.3 Not rated Dec 6.2 6.9 0.4 0.4 4.0 (4.3) 5.3 (1.3) (4.8)
Xingda Int'l 1899.HK 437 2.22 2.56 15.4 Not rated Dec 6.6 8.6 0.6 0.5 5.5 (2.0) (0.4) (15.6) (22.1)
Xinhua Winshare 0811.HK 211 3.71 6.14 65.6 Not rated Dec 6.6 5.3 0.7 0.7 8.4 0.1 1.6 1.1 13.1
Xinjiang Xinxin Mining 3833.HK 138 1.41 1.47 4.2 Not rated Dec 13.3 29.6 0.5 0.5 (0.5) (8.3) 6.0 (7.8) (19.0)
Xinyi Glass 0868.HK 1,670 3.43 2.90 (15.3) Not rated Dec 9.8 11.1 1.5 1.2 9.7 2.8 4.6 (13.2) (23.3)
Xtep 1368.HK 735 2.62 4.18 59.6 Not rated Dec 4.8 5.1 1.2 1.0 18.7 11.0 4.4 2.7 (20.6)
Yashili 1230.HK 695 1.53 1.26 (17.5) Not rated Dec 14.4 10.4 1.1 1.0 6.2 (1.7) 2.0 23.4 26.4
Yingde Gases 2168.HK 1,440 6.18 4.47 (27.7) Not rated Dec 11.0 11.8 1.8 1.8 10.6 3.2 (0.2) (3.1) (15.5)
Youyuan 2268.HK 242 1.88 2.41 28.4 Not rated Dec 5.6 5.1 0.9 0.8 10.4 2.0 7.4 24.5 19.0
Yuexiu Property 0123.HK 2,301 1.92 2.23 16.2 Not rated Dec 2.8 7.4 0.7 0.7 2.7 (4.3) 6.1 3.8 0.0
Yuex iu REIT 0405.HK 522 3.80 3.42 (10.0) Not rated Dec 2.5 13.2 0.6 0.6 8.9 0.7 5.0 4.4 6.1
Yuexiu Transport Infra. 1052.HK 768 3.56 4.18 17.5 Not rated Dec 8.7 10.2 0.6 0.6 5.6 (2.3) 4.4 0.8 (2.2)
Yuzhou Properties 1628.HK 665 1.79 2.97 66.0 Not rated Dec 4.5 4.2 0.8 0.6 5.6 (2.3) (0.6) (2.7) 15.5
Zhong An Real Estate 0672.HK 244 0.80 0.57 (29.3) Not rated Dec 4.4 6.3 0.3 0.3 3.2 (5.1) (2.4) (5.9) (9.1)
Zhongy u Gas 3633.HK 381 1.17 0.50 (57.1) Not rated Dec 30.6 16.0 2.6 2.2 9.0 0.0 1.7 20.6 30.0
Calendarized Calendarized Share price performance
P/E (x) P/B (x) HK$ term (%)
* Include the Hong Kong Industrial, consumer and media companies covered by Credit Suisse, and small-cap stocks in HOLT® database with market cap between US$150 mn and US$2 bn.
For stocks that are Not Rated, I/B/E/S consensus forecast are used. CFROI® is a registered trademark in the United States and other countries (excluding the United Kingdom) of Credit
Suisse or its subsidiaries or affiliates.
* Companies in bold and italic indicate constituents of Credit Suisse China Small Cap Index.
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China – Screening Absolute price performance - top & bottom 10 companies Absolute price performance - top & bottom 10 companies Absolute price performance - top & bottom 10 companies
Price 1W return Price 1M return Price 3M return Company RIC (HK$) (%) Company RIC (HK$) (%) Company RIC (HK$) (%)
Winners Winners Winners Lonking 3339.HK 1.34 32.7 Sunny Optical 2382.HK 4.39 38.9 Sunny Optical 2382.HK 4.39 76.3 China Molybdenum 3993.HK 3.43 20.8 Chu Kong Steel Pipe 1938.HK 2.82 33.6 Anton Oilfield 3337.HK 1.94 67.2 Solargiga Energy 0757.HK 0.48 20.3 Anton Oilfield 3337.HK 1.94 31.1 Goldin Properties 0283.HK 4.45 45.9 China Wireless Techs. 2369.HK 1.55 17.4 China Gold Int'l Resources 2099.HK 28.60 28.8 Sunac China 1918.HK 3.91 37.2 China Singyes Solar Techs. 0750.HK 3.40 16.8 China Wireless Techs. 2369.HK 1.55 28.1 China Wireless Techs. 2369.HK 1.55 30.3 Anta Sports 2020.HK 5.51 16.0 Lijun Int'l Pharma. 2005.HK 2.31 26.9 Zhongyu Gas 3633.HK 1.17 30.0 Shengli Oil & Gas Pipe 1080.HK 0.66 15.8 Goodbaby 1086.HK 2.46 26.8 Trauson 0325.HK 3.32 29.7 Honghua 0196.HK 1.47 15.7 China Dongxiang 3818.HK 0.78 25.8 Bosideng 3998.HK 2.30 28.5 Kingdee 0268.HK 1.27 14.4 Honghua 0196.HK 1.47 24.6 Yashili 1230.HK 1.53 26.4 China Automation 0569.HK 1.68 14.3 Youyuan 2268.HK 1.88 24.5 Real Nutriceutical 2010.HK 2.35 25.7
Price-to-earnings - most & least expensive 10 companies Price-to-book - most & least expensive 10 companies CFROI® Spread - top & bottom 10 companies
Price 12 P/E Price 12 P/B Price CFROI® Spread Company RIC (HK$) (x) Company RIC (HK$) (x) Company RIC (HK$) (%)
Winners Winners Winners Global Bio-chem 0809.HK 0.83 2.0 China Properties 1838.HK 2.26 0.1 Shenguan 0829.HK 4.21 24.6 China Power New Energy 0735.HK 0.28 2.3 SRE 1207.HK 0.35 0.2 Dongyue 0189.HK 3.67 19.1 Dachan Food 3999.HK 1.10 2.3 Weiqiao Textile 2698.HK 2.77 0.2 Silver Base 0886.HK 3.23 17.4 Baoye 2355.HK 4.25 2.9 Renhe Commercial 1387.HK 0.31 0.2 361 Degrees 1361.HK 1.99 16.8 Sijia Group 1863.HK 1.60 2.9 Spg Land 0337.HK 1.48 0.2 China Lilang 1234.HK 5.10 16.1 Renhe Commercial 1387.HK 0.31 3.2 Hopson Dev. 0754.HK 5.41 0.2 China Medical System 0867.HK 3.98 16.0 Silver Base 0886.HK 3.23 3.2 China Rongsheng 1101.HK 1.10 0.2 Anta Sports 2020.HK 5.51 16.0 Beijing Capital Land 2868.HK 2.20 3.3 Powerlong Real Estate 1238.HK 1.32 0.2 Pacific Online 0543.HK 2.46 15.4 Fantasia 1777.HK 0.78 3.3 Sinolink Worldwide 1168.HK 0.51 0.2 Biostime Intl 1112.HK 20.95 14.3 361 Degrees 1361.HK 1.99 3.3 Global Bio-chem 0809.HK 0.83 0.3 Sinomedia 0623.HK 3.22 12.3 Losers Losers Losers Goldin Properties 0283.HK 4.45 363.8 Shenguan 0829.HK 4.21 4.9 Bawang 1338.HK 0.60 (71.9) Kingway Brewery 0124.HK 2.29 113.7 Biostime Intl 1112.HK 20.95 4.4 China Daye Non-Ferrous 0661.HK 0.32 (45.7) Shanghai Ind. Urban Dev. 0563.HK 1.27 63.5 Sino Biopharm. 1177.HK 3.08 3.7 SMIC 0981.HK 0.30 (15.6) Kingdee 0268.HK 1.27 51.9 Tong Ren Tang 1666.HK 14.00 3.5 Shougang Concord Int'l 0697.HK 0.35 (14.1) China Nickel 2889.HK 0.54 45.0 Pacific Online 0543.HK 2.46 3.2 China Huiyuan 1886.HK 2.26 (10.7) Ajisen 0538.HK 5.31 43.1 Tenfu 6868.HK 4.95 2.8 Shandong Chenming Paper 1812.HK 2.58 (10.6) Dynasty Fine Wines 0828.HK 1.31 33.6 China Medical System 0867.HK 3.98 2.7 Besunyen 0926.HK 0.62 (10.3) Guangzhou Pharma. 0874.HK 15.78 30.2 Guangzhou Pharma. 0874.HK 15.78 2.7 Nan Hai 0680.HK 0.03 (9.7) Xinjiang Xinxin Mining 3833.HK 1.41 29.6 Daphne 0210.HK 7.82 2.7 Goldin Properties 0283.HK 4.45 (9.7) Sinotruk (HK) 3808.HK 4.48 26.2 China OS. GRD. Oceans 0081.HK 7.95 2.6 Tianjin Dev. 0882.HK 3.56 (9.5)
* For stocks that are not rated, I/B/E/S consensus forecast numbers are used. CFROI® Spread is the difference between CFROI® and market implied discount rate. A larger number indicates
that more value is created by a company
14 September 2012
David & Goliath 30
India – Company updates Multi Commodities Exchange of India (MCEI.BO,
Rs1255.10, O [V], TP Rs1450.00)
Emami (EMAM.BO, Rs505.05, O, TP Rs619.00)
MCX-SX's equity product kicks off
■ MCX-SX has kickstarted roadshows for brokers across the
country for its equity products with its Mumbai roadshow being
extremely well attended. It plans to launch its first products in
November to coincide with the Diwali festival in India.
■ MCX has a 38% economic interest in MCX-SX (5% equity + 33%
warrants). MCX-SX started with currency derivatives in October
2008 and recently obtained regulatory approvals for its equity
products. Besides currency and equity products, MCX-SX will
have wholesale debt and interest rate products as well.
■ MCX-SX has announced 30-50% lower transaction fees as
compared to the NSE. It has also introduced discounted
membership fees until 18 October. Details of the number of
companies that will be initially listed and exact products are not
known at this stage.
■ We have not assumed any value for the MCX-SX holding at this
point. We continue to see MCX as an attractive stock and MCX-
SX represents an option value.
Key concerns to abate
■ Key concerns to abate in 2H. We expect key concerns on Emami
like mentha price inflation and declining international business to
be put to rest going into 2H FY13.
■ Mentha price correction driven by fundamentals. Emami saw
250% inflation in mentha oil prices in 15 months leading up to
March 2012. Prices have come off in the past six months by 40%
driven by fundamental supply side response as farmers have
increased acreage on the crop. With inventory levels at the peak
and commodity futures quoting much lower than spot, we could
see further reduction in prices and significant upside to our
earnings estimates.
■ International business decline to stem. Emami’s international
business decline is likely to stem in 2H as the base of
discontinuation of brands in Africa catches up. The
commissioning of Bangladesh and Egypt factories would be key
drivers in FY14.
■ Domestic business to deliver strong growth. Emami is seeing no
risks in delivering domestic growth of 18-20% in FY13.
Bbg/RIC 1,168.55
1,450 (1,450)
51.00 24
0.3
5.7
Free float (%) 74 Performance 1M 3M 12M
Absolute (%) 2.9 13.8 —
Relativ e (%) 1.7 8.6 —
Year 03/11A 03/12A 03/13E 03/14E 03/15E
3,689 5,262 5,857 6,921 8,184
1,918 3,347 3,787 4,625 5,609
1,757 2,862 3,366 4,063 4,862
34.60 56.40 66.30 80.00 95.80
n.a. n.a. 0 0 0
n.a. n.a. 64.50 70.80 81.50
-20.3 62.8 17.6 20.7 19.7
33.8 20.7 17.6 14.6 12.2
0.4 2.1 2.6 3.4 4.3
25.8 13.6 11.5 8.8 6.7
7.0 6.0 5.1 4.5 3.9
22.7 31.0 31.3 32.7 34.2
-119.5 -139.9 -139.6 -142.8 -143.9
1306.9 - 862.1
59,594.1/ 1,074.9
ROE (%)
Note 1: MCX is India's biggest multi commodity futures exchange.
Mkt cap (Rs/US$ mn)Daily trad v al - 6m av g (US$ mn)
Major shareholders Promoter (26%)
Net debt(cash)/equity (%)
Rev enue (Rs mn)
52-w k range (Rs)
MCX IN / MCEI.BO
O (O) [V]
Daily trad v ol - 6m av g (mn)
Rating (prev. rating)
Shares outstanding (mn)
Price (10 Sep 12 , Rs)
TP (prev. TP Rs)
Est. pot. % chg. to TP
EBITDA (Rs mn)
Net profit (Rs mn)
EPS (Rs)
- Change from prev . EPS (%)
- Consensus EPS (Rs)
EPS grow th (%)
P/E (x )
Div idend y ield (%)
EV/EBITDA (x )
P/B (x )
Bbg/RIC 509.20
619.00
151.31 22
0.1
0.6
Free float (%) 30 Performance 1M 3M 12M
Absolute (%) 5.1 5.0 11.0
Relativ e (%) 3.3 (2.6) 2.1
Year 03/11A 03/12A 03/13E 03/14E 03/15E
12,590 14,535 17,291 20,537 24,446
2,534 2,968 3,342 4,170 5,181
2,287 2,588 3,108 3,712 4,468
15.10 17.10 20.50 24.50 29.50
n.a. n.a. 0 0 0
n.a. n.a. 20.40 24.20 28.10
34.8 13.2 20.1 19.4 20.4
33.7 29.8 24.8 20.8 17.2
0.7 1.6 1.6 1.9 2.3
30.5 25.6 22.4 17.6 13.8
11.2 10.9 8.8 7.2 5.9
34.8 37.1 39.3 38.2 37.5
2.7 -16.2 -24.3 -34.1 -42.7
- Consensus EPS (Rs)
EPS grow th (%)
P/E (x )
Div idend y ield (%)
EV/EBITDA (x )
P/B (x )
EBITDA (Rs mn)
Net profit (Rs mn)
EPS (Rs)
- Change from prev . EPS (%)
Price (11 Sep 12 , Rs)
TP (prev. TP Rs)
Est. pot. % chg. to TP
52-w k range (Rs)
HMN IN / EMAM.BO
O (O)
Daily trad v ol - 6m av g (mn)
Rating (prev. rating)
Shares outstanding (mn)
509.2 - 327.5
77,047.9/ 1,394.3
ROE (%)
Note1:Emami is a player in the fast moving consumer goods company in India with market leadership in niche catgeories like cooling oils, balms and boro
creams..
Mkt cap (Rs/US$ mn)Daily trad v al - 6m av g (US$ mn)
Major shareholders Promoter
Net debt(cash)/equity (%)
Rev enue (Rs mn)
Price performance vs. MSCI India Price performance vs. MSCI India
65
75
85
95
105
03/12 04/12 05/12 06/12 07/12 08/12 09/12
Multi Commodities Exchange of India MSCI India
70
80
90
100
110
120
09/11 11/11 01/12 03/12 05/12 07/12 09/12
Emami MSCI India
Anantha Narayan / Research Analyst / 91 22 67773730 /
India – Company updates Hexaware Technologies (HEXT.BO, Rs137.55, O, TP
Rs160.00)
Gujarat State Petronet (GSPT.BO, Rs78.40, O, TP
Rs110.00)
Management discussions indicate that the company remains well placed
■ Discussions with management indicate that Hexaware remains
well placed. The company seems on course to meet its 20%+
revenue growth guidance for 2012, has a decent pipeline for
2013 and near-term margins seem stable.
■ Hexaware management has reiterated that it has five large deals
in the pipeline and expects one of them to be signed in the next
two months. It expects little risk to revenue from top clients and
Peoplesoft 9.2 can be a catalyst.
■ It expects steady near-term margins. The available margin levers
are utilisation, the employee pyramid and G&A benefits.
However, it may reinvest in larger sales front-end, more domain
experts and investments in areas such as cloud technologies.
■ While the stock has risen by over 20% over the past six weeks,
we continue to consider this stock as our top midcap idea in the
sector. Revenue visibility is one of the most important criteria for
us in the case of midcaps and we have the most comfort with
Hexaware at this point of time. Valuations are attractive as well at
under 10x forward earnings and 4%+ dividend yield.
The new tariff order limits downside. Medium-term volume growth key to
upside
■ The PNGRB has published provisional interim tariffs of
Rs24/mmbtu for GSPL’s high pressure networks. This is 12%
below that realised since 3Q FY09 (including system use gas
recovery) and may lead to a Rs2.9 bn one-time reversal, we
think.
■ These are levelised tariffs. GSPL will have to apportion these into
tariff zones based on volume assumptions. Differences between
assumed zonal volumes and actuals can cause variance in
reported tariffs, though this should be adjusted upon review.
■ This order removes the large downside risk to earnings and cash
flow near term and allows the market to focus on the potential for
longer term volume growth at GSPL, which if not through a
reversal of domestic gas output, will be led by increased LNG.
■ We update our model for the annual report, roll forward the DCF,
assume new tariffs and reduce near- and long-term volume
assumptions. FY13E EPS falls materially due to the assumed
one-off reversal. We cut TP to Rs110; Maintain OUTPERFORM.
Bbg/RIC 137.15
160.00
295.33 17
1.6
3.5
Free float (%) 71.8 Performance 1M 3M 12M
Absolute (%) 15.9 11.1 91.1
Relativ e (%) 14.7 4.1 82.7
Year 12/10A 12/11A 12/12E 12/13E 12/14E
10,545 14,505 19,634 22,991 26,660
938 2,646 4,548 5,288 6,052
1,077 2,668 3,712 4,239 4,734
3.60 8.90 12.30 14.10 15.70
n.a. n.a. 0 0 0
n.a. n.a. 11.70 13.10 14.20
-19.6 146.8 38.2 14.2 11.7
37.9 15.4 11.1 9.7 8.7
2.0 2.9 4.3 4.1 4.7
38.2 13.6 7.8 6.5 5.5
4.1 4.0 3.5 3.0 2.5
11.7 26.6 33.9 33.0 31.2
-46.9 -45.3 -42.9 -42.8 -42.4
- Consensus EPS (Rs)
EPS grow th (%)
P/E (x )
Div idend y ield (%)
EV/EBITDA (x )
P/B (x )
EBITDA (Rs mn)
Net profit (Rs mn)
EPS (Rs)
- Change from prev . EPS (%)
Price (11 Sep 12 , Rs)
TP (prev. TP Rs)
Est. pot. % chg. to TP
52-w k range (Rs)
HEXW IN / HEXT.BO
O (O)
Daily trad v ol - 6m av g (mn)
Rating (prev. rating)
Shares outstanding (mn)
137.2 - 71.8
40,505.0/ 733.1
ROE (%)
Note1:Hexaware is a mid-sized Indian IT services company with a niche positioning in implementation of Peoplesoft..
Mkt cap (Rs/US$ mn)Daily trad v al - 6m av g (US$ mn)
Major shareholders Promoters - 28.2%
Net debt(cash)/equity (%)
Rev enue (Rs mn)
Bbg/RIC 77.80
110.00
562.70 41
1.5
1.9
Free float (%) 61 Performance 1M 3M 12M
Absolute (%) 7.6 21.3 (28.0)
Relativ e (%) 6.1 15.1 (35.7)
Year 03/11A 03/12A 03/13E 03/14E 03/15E
10,391 11,153 9,098 10,084 10,861
9,616 10,253 8,154 9,081 9,795
5,064 5,221 1,913 4,220 4,571
9.00 9.30 3.40 7.50 8.10
n.a. n.a. (65) (40) (41)
n.a. n.a. 8.60 8.60 9.10
22.4 3.1 -63.4 120.6 8.3
8.6 8.4 22.9 10.4 9.6
1.3 1.3 1.1 1.2 1.1
5.8 5.1 6.6 5.9 5.4
2.2 1.8 1.7 1.5 1.3
28.4 23.3 7.5 15.2 14.5
62.0 36.0 39.2 33.7 27.0
108.0 - 62.5
43,778.0/ 792.2
ROE (%)
Note 1: Gujarat State Petronet Ltd (GSPL), an India-based company, operates the gas transmission network in Gujarat totalling about 1,666 km. It has two
segments: gas transportation and windmill.
Mkt cap (Rs/US$ mn)Daily trad v al - 6m av g (US$ mn)
Major shareholders GSPC (38%)
Net debt(cash)/equity (%)
Rev enue (Rs mn)
52-w k range (Rs)
GUJS IN / GSPT.BO
O (O)
Daily trad v ol - 6m av g (mn)
Rating (prev. rating)
Shares outstanding (mn)
Price (12 Sep 12 , Rs)
TP (prev. TP Rs)
Est. pot. % chg. to TP
EBITDA (Rs mn)
Net profit (Rs mn)
EPS (Rs)
- Change from prev . EPS (%)
- Consensus EPS (Rs)
EPS grow th (%)
P/E (x )
Div idend y ield (%)
EV/EBITDA (x )
P/B (x )
Price performance vs. MSCI India Price performance vs. MSCI India
90
110
130
150
170
190
09/11 11/11 01/12 03/12 05/12 07/12 09/12
Hexaware Technologies MSCI India
60
75
90
105
120
09/11 11/11 01/12 03/12 05/12 07/12 09/12
Gujarat State Petronet MSCI India
Anantha Narayan / Research Analyst / 91 22 67773730 /
Asian Star ASAN.BO 182 629.00 518.47 (17.6) Not rated Mar 24.9 97.6 2.3 8.8 3.8 (0.6) 0.8 4.8 (6.9)
Astrazeneca Pharma ASTR.NS 805 1782.65 234.11 (86.9) Not rated Mar n.a. 132.9 n.a. 21.9 5.9 1.7 1.9 6.9 (3.2)
Aurobindo Pharma ARBN.NS 675 128.40 237.17 84.7 Not rated Mar 98.6 15.2 1.6 1.4 3.9 (1.8) 7.6 22.3 21.4
Av entis Pharma SANO.NS 947 2276.45 1408.65 (38.1) Not rated Dec 27.4 30.6 4.7 4.1 15.8 11.5 3.7 3.5 7.7
Calendarized Calendarized Share price performance
P/E (x) P/B (x) Rs term (%)
* Include the small-cap stocks in HOLT® database with market cap between US$150 mn and US$2 bn. For stocks that are Not Rated, I/B/E/S consensus forecast are used. CFROI® is a
registered trademark in the United States and other countries (excluding the United Kingdom) of Credit Suisse or its subsidiaries or affiliates.
* Companies in bold and italic indicate constituents of Credit Suisse India Small Cap Index.
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Valuations of Credit Suisse India small-cap watch list* Market CS target/ Potential Credit Year HOLT CFROI
Cap Price HOLT warranted return Suisse end CFROI Spread
BHIL BJAT.NS 1,519 755.20 858.79 13.7 Not rated Mar n.a. 4.3 n.a. 0.8 13.5 3.3 0.6 (5.4) (1.7)
Balkrishna Industries BLKI.NS 481 275.30 531.10 92.9 Not rated Mar 10.4 8.3 2.6 9.8 8.2 4.0 (3.0) (2.6) 5.3
BILT BILT.NS 232 19.60 66.90 66.9 Not rated Jun 6.1 7.6 0.5 0.5 2.1 (4.4) 1.3 6.2 (10.1)
Balmer Law rie BLMR.NS 169 575.80 1877.38 226.0 Not rated Mar 6.5 25.3 1.2 4.6 7.3 3.7 (6.8) (4.4) (0.3)
Balrampur Chini Mills BACH.NS 292 66.25 152.69 130.5 Not rated Mar 100.5 15.2 1.1 4.2 3.2 (1.6) (1.3) (1.9) 36.3
Bank Of Maharashtra BMBK.NS 466 43.70 41.34 (5.4) Not rated Mar n.a. 5.6 n.a. 0.5 5.1 (6.7) 0.9 (4.3) (19.5)
Basf India BASF.NS 520 664.35 972.40 46.4 Not rated Mar 21.6 83.0 2.4 9.1 5.1 1.8 2.9 6.6 14.7
Bata India BATA.NS 1,097 944.70 596.68 (36.8) Not rated Dec 23.5 26.8 10.6 9.7 10.2 5.3 8.0 3.4 14.3
Bayer Cropscience BAYE.NS 714 999.90 1174.88 17.5 Not rated Mar 23.6 18.0 4.6 17.1 11.1 8.2 1.9 8.2 23.3
BEML BEML.NS 204 271.75 1194.76 339.7 Not rated Mar 14.2 5.3 0.5 0.5 2.3 (3.1) (2.5) (6.3) (27.9)
Berger Paints BRGR.NS 866 138.50 129.31 (6.6) Not rated Mar 27.8 23.6 6.3 5.4 11.9 7.1 (1.0) 0.7 (7.5)
BGR Energy BGRE.NS 342 262.30 497.22 89.6 Not rated Mar 7.8 9.3 1.5 5.5 12.5 8.7 2.8 (5.0) (9.9)
Bharat Electronics BAJE.NS 1,701 1176.80 2265.29 92.5 Not rated Mar 11.0 10.7 1.7 1.5 7.4 2.7 (4.4) (7.0) (6.7)
Bharat Forge BFRG.NS 1,186 281.95 332.78 18.0 Not rated Mar 17.3 14.3 3.1 2.7 5.4 0.1 2.3 (7.3) (8.4)
Bhushan Steel BSSL.NS 1,771 461.65 -306.46 (166.4) Not rated Mar 10.9 10.0 1.3 4.7 (1.9) (8.1) (0.1) (2.0) 2.0
Biocon BION.NS 964 266.70 324.14 21.5 Not rated Mar 15.0 15.3 2.4 2.1 7.9 3.1 0.9 10.6 21.8
Birla BRLC.NS 292 210.05 693.20 230.0 Not rated Mar 6.2 6.0 0.7 0.6 3.6 (1.9) 1.7 (5.3) (11.1)
Blue Dart Ex press BLDT.NS 733 1710.60 1496.02 (12.5) Not rated Dec 32.7 27.5 6.1 5.1 10.1 5.6 0.1 (14.3) (13.7)
Blue Star BLUS.NS 270 166.10 173.68 4.6 Not rated Mar (57.5) 41.8 3.5 3.4 (7.1) (11.9) (3.0) (12.3) 1.2
BOC India BOC.NS 710 460.70 208.93 (54.6) Not rated Dec 32.3 31.0 3.1 3.4 1.6 (3.6) 5.2 9.2 11.3
Bombay Dy eing BDYN.NS 325 435.80 746.10 71.2 Not rated Mar n.a. 36.4 n.a. 1.0 3.9 (2.0) 1.7 (12.1) (13.7)
Bombay Ray on BRFL.NS 599 246.45 311.07 26.2 Not rated Mar 12.7 48.6 0.8 3.0 3.7 (1.5) (0.7) 1.4 1.8
Britannia BRIT.NS 1,053 487.95 306.72 (37.1) Not rated Mar 31.3 24.9 13.9 13.3 11.5 6.7 (3.4) 6.9 (9.5)
CUMI CRBR.NS 498 146.95 193.57 31.7 Not rated Mar 13.6 13.6 3.1 2.7 10.4 5.7 2.0 (0.4) (0.7)
Central Bank Of India CBI.NS 830 62.40 133.06 113.2 Not rated Mar 5.0 5.8 0.3 0.3 4.1 (6.2) (2.4) (10.2) (23.3)
Century Plyboards CNTP.NS 212 52.80 103.22 95.5 Not rated Mar 8.2 7.7 1.6 5.9 8.5 4.5 3.7 5.0 (2.5)
Century Textiles CNTY.NS 583 346.50 291.50 (15.9) Not rated Mar 41.9 24.5 1.7 1.5 (3.3) (9.9) 8.5 6.4 24.9
Calendarized Calendarized Share price performance
P/E (x) P/B (x) Rs term (%)
* Include the small-cap stocks in HOLT® database with market cap between US$150 mn and US$2 bn. For stocks that are Not Rated, I/B/E/S consensus forecast are used. CFROI® is a
registered trademark in the United States and other countries (excluding the United Kingdom) of Credit Suisse or its subsidiaries or affiliates.
* Companies in bold and italic indicate constituents of Credit Suisse India Small Cap Index.
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Valuations of Credit Suisse India small-cap watch list* Market CS target/ Potential Credit Year HOLT CFROI
Cap Price HOLT warranted return Suisse end CFROI Spread
Eicher Motors EICH.NS 1,092 2238.20 2909.00 30.0 Not rated Dec 19.6 16.7 4.0 3.3 12.6 8.3 8.4 7.6 7.3
EID Parry EIDP.NS 720 229.25 402.85 75.7 Not rated Mar 16.0 8.3 1.9 1.5 6.5 0.4 0.9 5.1 31.9
EIH EIHO.NS 817 79.10 99.05 25.2 Not rated Mar 48.8 34.9 1.7 1.6 2.8 (2.0) 4.0 (0.4) 1.9
Calendarized Calendarized Share price performance
P/E (x) P/B (x) Rs term (%)
* Include the small-cap stocks in HOLT® database with market cap between US$150 mn and US$2 bn. For stocks that are Not Rated, I/B/E/S consensus forecast are used. CFROI® is a
registered trademark in the United States and other countries (excluding the United Kingdom) of Credit Suisse or its subsidiaries or affiliates.
* Companies in bold and italic indicate constituents of Credit Suisse India Small Cap Index.
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Valuations of Credit Suisse India small-cap watch list* Market CS target/ Potential Credit Year HOLT CFROI
Cap Price HOLT warranted return Suisse end CFROI Spread
Glodyne Technoserve GLDY.NS 75 92.45 1059.07 1,045.6 Not rated Mar 1.9 1.4 0.6 2.1 24.4 20.6 12.4 (26.0) (75.8)
GMR Infrastructure GMRI.NS 1,403 19.95 -24.75 (224.0) Not rated Mar (16.0) (275.2) 1.1 0.9 (2.1) (9.3) 3.4 (7.0) (12.1)
Godfrey Phillips India GDFR.NS 607 3232.70 4614.81 42.8 Not rated Mar n.a. 16.6 n.a. 3.2 10.0 5.3 2.0 1.1 4.4
Godrej Industries GODI.NS 1,749 276.00 179.31 (35.0) Not rated Mar 30.0 25.6 n.a. 3.6 1.9 (3.4) 7.7 11.1 17.2
Godrej Properties GODR.NS 774 549.10 432.97 (21.1) Not rated Mar 36.2 30.9 3.2 2.1 5.8 0.4 5.5 8.1 (6.0)
Gokul Refoils GOKU.NS 101 42.25 159.58 277.7 Not rated Mar 7.0 27.1 1.0 3.6 11.4 7.6 (1.5) (12.2) (46.8)
Graphite GRPH.NS 293 83.10 208.68 151.1 Not rated Mar 7.8 7.0 1.0 0.9 4.3 (0.8) 5.0 0.9 (5.5)
Great Eastern GESC.NS 677 246.05 452.48 83.9 Not rated Mar 10.6 11.0 0.6 0.6 1.1 (5.7) (0.8) (6.4) (4.8)
Greaves Cotton GRVL.NS 297 67.30 124.90 85.6 Not rated Mar 9.5 10.5 2.7 2.2 13.0 8.7 2.0 3.5 (3.1)
Grindwell Norton GRNN.NS 250 250.05 531.91 112.7 Not rated Mar n.a. 12.0 n.a. 2.7 12.6 8.4 1.3 (0.4) 1.4
GACL GALK.NS 167 126.00 665.43 428.1 Not rated Mar 5.9 5.1 0.6 2.1 0.4 (3.6) (1.0) (1.9) 5.9
Calendarized Calendarized Share price performance
P/E (x) P/B (x) Rs term (%)
* Include the small-cap stocks in HOLT® database with market cap between US$150 mn and US$2 bn. For stocks that are Not Rated, I/B/E/S consensus forecast are used. CFROI® is a
registered trademark in the United States and other countries (excluding the United Kingdom) of Credit Suisse or its subsidiaries or affiliates.
* Companies in bold and italic indicate constituents of Credit Suisse India Small Cap Index.
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Valuations of Credit Suisse India small-cap watch list* Market CS target/ Potential Credit Year HOLT CFROI
Cap Price HOLT warranted return Suisse end CFROI Spread
HNG HNGI.NS 318 201.65 255.75 26.8 Not rated Mar 37.3 14.5 n.a. 1.4 0.1 (6.3) 0.9 1.4 (0.4)
Hnywell.Automation HONE.NS 396 2480.85 3555.27 43.3 Not rated Dec 20.5 15.5 3.5 3.0 12.1 7.9 3.2 1.1 (2.5)
Hotel Leela HTLE.NS 207 29.50 55.84 89.3 Not rated Mar (4.0) (4.2) 0.8 0.7 (2.3) (9.3) 5.9 (3.9) (10.3)
Housing Dev.&.Infra. HDIL.NS 525 69.30 379.70 447.9 Not rated Mar 3.5 3.2 0.3 0.2 8.3 2.3 0.8 (19.3) (7.8)
HSIL HSNT.NS 150 125.85 339.95 170.1 Not rated Mar 8.1 7.6 1.1 4.0 5.0 0.6 7.8 (1.1) (10.5)
HT Media HTML.NS 368 86.65 157.87 82.2 Not rated Mar 12.0 11.3 1.6 1.3 6.8 2.0 0.6 0.2 (9.7)
I N G Vysya Bank VYSA.NS 1,005 370.15 460.00 24.3 OUTPERFORM Mar 12.1 9.6 1.4 1.3 6.5 (4.6) (1.1) (4.1) 9.0
Icra ICRA.NS 213 1176.95 1542.00 31.0 Not rated Mar 22.4 17.8 4.1 3.5 11.7 7.5 2.1 1.2 (4.2)
IDBI Bank IDBI.NS 2,023 87.60 129.36 47.7 Not rated Mar 4.9 5.5 0.5 1.9 6.5 (0.1) 0.8 3.0 (6.1)
Il&FS ILFT.NS 553 157.50 455.96 189.5 Not rated Mar 6.4 5.9 1.2 0.9 16.4 9.4 (2.7) (4.5) (17.9)
Calendarized Calendarized Share price performance
P/E (x) P/B (x) Rs term (%)
* Include the small-cap stocks in HOLT® database with market cap between US$150 mn and US$2 bn. For stocks that are Not Rated, I/B/E/S consensus forecast are used. CFROI® is a
registered trademark in the United States and other countries (excluding the United Kingdom) of Credit Suisse or its subsidiaries or affiliates.
* Companies in bold and italic indicate constituents of Credit Suisse India Small Cap Index.
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Valuations of Credit Suisse India small-cap watch list* Market CS target/ Potential Credit Year HOLT CFROI
Cap Price HOLT warranted return Suisse end CFROI Spread
JM Financial JMSH.NS 199 14.65 6.90 (52.9) Not rated Mar 8.2 7.4 0.6 0.5 (1.2) (14.0) 1.4 6.2 15.4
Jagran Prakashan JAGP.NS 524 91.70 130.54 42.4 Not rated Mar 14.7 14.3 3.3 12.5 15.0 11.9 1.6 0.6 5.5
Jai Corp JAIC.NS 177 54.90 299.73 446.0 Not rated Mar 8.6 35.8 0.3 1.2 2.6 (0.2) 2.7 (5.1) (5.7)
Jain Irrigation Systems JAIR.NS 418 60.00 111.13 85.2 Not rated Mar 7.5 8.3 1.2 4.6 6.8 2.4 (1.8) (30.8) (19.9)
Jaiprakash Power JAPR.NS 1,432 30.20 43.00 42.4 NEUTRAL Mar 23.1 18.6 1.5 1.4 0.9 (4.4) 13.5 (4.9) (18.4)
Jammu & Kashmir Bank JKBK.NS 783 893.80 1250.00 39.9 OUTPERFORM Mar 5.7 4.8 1.1 0.9 13.1 1.6 (0.7) (3.4) (2.6)
Jaypee Infratech JYPE.NS 1,186 47.25 28.76 (39.1) Not rated Mar 5.1 5.9 0.9 3.3 10.7 6.0 7.8 (2.8) (1.3)
JBF Industries JBFI.NS 182 139.20 588.26 322.6 Not rated Mar 2.9 3.6 0.5 2.0 15.5 9.8 0.9 5.1 17.3
Jet Airways JET.NS 563 361.15 1217.33 237.1 Not rated Mar (2.9) (6.3) 3.4 34.3 (1.9) (9.5) 9.9 (7.2) (5.3)
Jindal Saw JIND.NS 579 116.10 281.67 142.6 Not rated Mar 9.4 8.7 0.6 2.4 4.6 0.3 0.1 (3.9) (8.5)
Jindal Stainless JIST.NS 242 70.40 -180.79 (356.8) Not rated Mar 4.7 19.8 0.5 1.8 0.8 (6.0) (2.0) 7.9 (3.0)
JK Cement JKCE.NS 275 217.85 698.64 220.7 Not rated Mar 10.4 6.8 n.a. 0.9 6.3 (0.1) 4.0 (0.8) 50.1
JSW Energy JSWE.NS 1,451 48.95 61.68 26.0 Not rated Mar 23.7 15.6 1.4 1.2 3.0 (3.2) 2.9 (4.6) 3.3
JSW Ispat Steel JSWI.NS 421 9.25 18.94 104.7 Not rated Jun n.a. (1.4) n.a. 2.1 (0.9) (7.7) 2.2 (9.3) (11.9)
Jubilant Foodworks JUBI.NS 1,428 1212.95 598.78 (50.6) Not rated Mar 82.5 55.2 29.2 20.9 14.8 10.2 (1.8) 0.4 (3.3)
Calendarized Calendarized Share price performance
P/E (x) P/B (x) Rs term (%)
* Include the small-cap stocks in HOLT® database with market cap between US$150 mn and US$2 bn. For stocks that are Not Rated, I/B/E/S consensus forecast are used. CFROI® is a
registered trademark in the United States and other countries (excluding the United Kingdom) of Credit Suisse or its subsidiaries or affiliates.
* Companies in bold and italic indicate constituents of Credit Suisse India Small Cap Index.
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Valuations of Credit Suisse India small-cap watch list* Market CS target/ Potential Credit Year HOLT CFROI
Cap Price HOLT warranted return Suisse end CFROI Spread
Merck MERK.NS 196 654.15 983.09 50.3 Not rated Dec 17.1 15.5 2.6 2.4 7.1 2.8 2.8 5.4 15.2
Calendarized Calendarized Share price performance
P/E (x) P/B (x) Rs term (%)
* Include the small-cap stocks in HOLT® database with market cap between US$150 mn and US$2 bn. For stocks that are Not Rated, I/B/E/S consensus forecast are used. CFROI® is a
registered trademark in the United States and other countries (excluding the United Kingdom) of Credit Suisse or its subsidiaries or affiliates.
* Companies in bold and italic indicate constituents of Credit Suisse India Small Cap Index.
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Valuations of Credit Suisse India small-cap watch list* Market CS target/ Potential Credit Year HOLT CFROI
Cap Price HOLT warranted return Suisse end CFROI Spread
* Include the small-cap stocks in HOLT® database with market cap between US$150 mn and US$2 bn. For stocks that are Not Rated, I/B/E/S consensus forecast are used. CFROI® is a
registered trademark in the United States and other countries (excluding the United Kingdom) of Credit Suisse or its subsidiaries or affiliates.
* Companies in bold and italic indicate constituents of Credit Suisse India Small Cap Index.
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Valuations of Credit Suisse India small-cap watch list* Market CS target/ Potential Credit Year HOLT CFROI
Cap Price HOLT warranted return Suisse end CFROI Spread
Shipping Corp. SCI.NS 432 51.35 97.71 90.3 Not rated Mar (14.1) (4.1) 0.4 0.3 (4.9) (11.9) 2.7 (4.6) (1.7)
Shopper's Stop SHOP.NS 527 351.85 104.38 (70.3) Not rated Mar 114.1 87.4 7.2 4.7 2.2 (3.6) 1.0 (2.6) 14.6
Shree Cement SHCM.NS 2,180 3463.30 5515.93 59.3 Not rated Mar 42.0 20.0 5.1 19.5 6.0 2.1 2.5 8.1 29.8
Shree Renuka Sugars SRES.NS 392 32.35 46.32 43.2 Not rated Mar n.a. 14.1 n.a. 0.8 4.7 (2.3) 1.9 (1.8) 16.4
Calendarized Calendarized Share price performance
P/E (x) P/B (x) Rs term (%)
* Include the small-cap stocks in HOLT® database with market cap between US$150 mn and US$2 bn. For stocks that are Not Rated, I/B/E/S consensus forecast are used. CFROI® is a
registered trademark in the United States and other countries (excluding the United Kingdom) of Credit Suisse or its subsidiaries or affiliates.
* Companies in bold and italic indicate constituents of Credit Suisse India Small Cap Index.
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Valuations of Credit Suisse India small-cap watch list* Market CS target/ Potential Credit Year HOLT CFROI
Cap Price HOLT warranted return Suisse end CFROI Spread
Solar Industries SLIN.NS 322 984.90 1725.15 75.2 Not rated Mar n.a. 14.1 n.a. 3.5 11.9 7.0 1.6 1.3 12.9
South Indian Bank SIBK.NS 443 21.60 22.78 5.4 Not rated Mar n.a. 5.4 n.a. 1.0 15.6 3.4 1.2 (5.7) (9.1)
SpiceJet SPJT.BO 289 33.05 63.36 91.7 Not rated Mar (5.5) (14.0) 15.3 538.5 5.7 0.5 13.4 (6.8) (1.6)
Srei Infra. SREI.NS 205 22.55 11.54 (48.8) Not rated Mar n.a. 9.3 n.a. 0.3 (2.8) (14.4) (1.1) (1.1) 3.4
SRF SRFL.NS 229 220.30 1291.44 486.2 Not rated Mar 3.2 2.8 0.7 0.6 6.2 0.4 3.3 2.6 7.0
State Bank Of My sore SBKM.NS 389 460.15 490.40 6.6 Not rated Mar n.a. 5.2 n.a. 0.5 2.5 (9.5) (0.9) (0.0) (7.2)
State Bank Of Trav ancore SBKT.NS 440 486.95 513.92 5.5 Not rated Mar n.a. 4.1 n.a. 0.6 5.9 (5.9) 1.2 (0.6) (3.7)
State BankOf Bin.& Jaipur SBKB.NS 424 334.95 544.39 62.5 Not rated Mar n.a. 3.2 n.a. 0.5 13.6 1.8 1.7 (5.5) (9.5)
State Trdg.Corp.Of India STCI.NS 290 267.95 160.01 (40.3) Not rated Mar (42.6) (93.0) 2.2 8.5 3.7 (0.8) 2.3 (3.7) 4.9
Sterlite Technologies STTE.NS 216 30.40 60.51 99.0 Not rated Mar 15.5 13.8 0.9 3.4 3.9 0.2 8.8 (2.6) (3.5)
Strides Arcolab STAR.NS 962 906.25 984.63 8.6 Not rated Dec 23.4 19.1 3.9 4.2 13.0 6.6 5.8 16.2 28.1
SPARC SPRC.NS 337 78.85 33.79 (57.2) Not rated Mar n.a. (23.0) n.a. (20.9) (3.5) (7.8) 9.6 3.7 15.5
Sun TV Network SUTV.NS 2,182 306.50 402.05 31.2 Not rated Mar 16.7 16.7 4.1 15.3 41.4 38.4 0.8 1.5 20.4
Sundram SNFS.NS 164 43.15 101.08 134.3 Not rated Mar 7.5 29.4 1.4 5.4 4.2 (0.4) (4.2) (9.9) (11.1)
Supreme SUPI.NS 655 285.55 392.64 37.5 Not rated Jun 16.6 14.3 5.8 4.8 14.9 11.7 1.0 5.7 34.9
Suzlon Energy SUZL.NS 512 15.95 5.71 (64.2) Not rated Mar (4.5) (3.9) 0.5 0.6 4.1 (2.8) 4.9 (9.9) (10.6)
Swan Energy SWAN.NS 240 139.85 72.13 (48.4) Not rated Mar 28.7 28.4 7.5 29.2 14.1 11.0 6.3 2.6 4.8
Sy ndicate Bank SBNK.NS 1,008 92.65 97.18 4.9 Not rated Mar 4.2 3.7 n.a. 0.5 2.4 (8.4) (1.4) (1.9) (9.5)
TVS Motor TVSM.NS 332 38.65 81.29 110.3 Not rated Mar 12.6 10.1 n.a. 2.5 4.5 (1.0) 1.7 (2.9) 15.4
Tata Chemicals TTCH.NS 1,480 321.45 433.86 35.0 Not rated Mar 10.3 9.2 1.3 1.3 7.1 0.9 2.4 4.3 2.7
Tata Communications TATA.NS 1,223 237.55 9.74 (95.9) Not rated Mar (8.6) (9.8) 2.6 2.9 (3.6) (10.7) 4.0 0.1 6.7
Tata Global Beverages TAGL.NS 1,496 133.90 77.66 (42.0) Not rated Mar 25.0 21.5 1.9 1.8 8.4 3.5 (1.3) (0.9) 23.4
Tata Inv estment TINV.NS 428 429.75 136.05 (68.3) Not rated Mar n.a. 13.8 n.a. 1.1 1.6 (10.4) 0.9 (2.0) (4.4)
Tata Tele Ma TTML.NS 370 10.80 1.84 (83.0) Not rated Mar (5.6) (4.1) (2.8) (10.8) (19.5) (24.8) (2.3) (12.2) (23.1)
Td Power Systems TDPS.NS 150 249.20 416.94 67.3 Not rated Mar n.a. 12.8 n.a. 1.5 9.9 5.6 (7.5) (9.9) (15.5)
Calendarized Calendarized Share price performance
P/E (x) P/B (x) Rs term (%)
* Include the small-cap stocks in HOLT® database with market cap between US$150 mn and US$2 bn. For stocks that are Not Rated, I/B/E/S consensus forecast are used. CFROI® is a
registered trademark in the United States and other countries (excluding the United Kingdom) of Credit Suisse or its subsidiaries or affiliates.
* Companies in bold and italic indicate constituents of Credit Suisse India Small Cap Index.
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Valuations of Credit Suisse India small-cap watch list* Market CS target/ Potential Credit Year HOLT CFROI
Cap Price HOLT warranted return Suisse end CFROI Spread
VST Industries VSTI.NS 477 1711.10 2055.27 20.1 Not rated Mar 20.2 16.3 9.3 8.2 24.4 20.2 2.6 (4.2) (7.1)
WABCO WABC.NS 549 1601.80 1995.85 24.6 Not rated Mar 20.7 17.8 6.2 4.9 16.0 11.7 0.1 6.7 4.3
Welspun WGSR.NS 416 100.05 254.03 153.9 Not rated Mar 5.3 7.2 0.5 2.0 8.0 3.0 2.8 (1.9) (17.3)
Whirlpool Of India WHIR.NS 573 249.90 289.64 15.9 Not rated Mar n.a. 21.3 n.a. 5.8 8.8 4.2 (1.7) (1.5) 23.7
Wockhardt WCKH.NS 2,642 1336.20 1676.84 25.5 Not rated Mar n.a. 15.6 n.a. 23.0 16.6 10.6 4.4 11.1 55.3
P/E (x) P/B (x) Rs term (%)
Calendarized Calendarized Share price performance
* Include the small-cap stocks in HOLT® database with market cap between US$150 mn and US$2 bn. For stocks that are Not Rated, I/B/E/S consensus forecast are used. CFROI® is a
registered trademark in the United States and other countries (excluding the United Kingdom) of Credit Suisse or its subsidiaries or affiliates.
* Companies in bold and italic indicate constituents of Credit Suisse India Small Cap Index.
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Valuations of Credit Suisse India small-cap watch list* Market CS target/ Potential Credit Year HOLT CFROI
Cap Price HOLT warranted return Suisse end CFROI Spread
Wy eth WLED.NS 406 989.15 2246.84 127.1 Not rated Mar n.a. 12.8 n.a. 4.1 18.8 14.6 5.8 7.6 16.3
Yes Bank YESB.NS 2,179 339.05 320.00 (5.6) UNDERPERFORM Mar 13.0 11.8 2.7 2.0 14.4 4.5 3.7 (6.3) (2.0)
Zensar Technologies ZENT.NS 220 279.60 688.27 146.2 Not rated Mar 8.0 6.3 2.2 1.9 14.3 8.5 12.1 6.2 20.5
Zydus Wellness ZYDS.NS 291 412.30 422.61 2.5 Not rated Mar 24.5 22.0 9.2 6.3 29.0 24.8 4.5 (1.7) 4.2
Calendarized Calendarized Share price performance
P/E (x) P/B (x) Rs term (%)
* Include the small-cap stocks in HOLT® database with market cap between US$150 mn and US$2 bn. For stocks that are Not Rated, I/B/E/S consensus forecast are used. CFROI® is a
registered trademark in the United States and other countries (excluding the United Kingdom) of Credit Suisse or its subsidiaries or affiliates.
* Companies in bold and italic indicate constituents of Credit Suisse India Small Cap Index.
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India – Screening Absolute price performance - top & bottom 10 companies Absolute price performance - top & bottom 10 companies Absolute price performance - top & bottom 10 companies
Price 1W return Price 1M return Price 3M return Company RIC (Rs) (%) Company RIC (Rs) (%) Company RIC (Rs) (%)
Price-to-earnings - most & least expensive 10 companies Price-to-book - most & least expensive 10 companies CFROI® Spread - top & bottom 10 companies
Price 12 P/E Price 12 P/B Price CFROI® Spread Company RIC (Rs) (x) Company RIC (Rs) (x) Company RIC (Rs) (%)
Winners Winners Winners SKNL SKMK.NS 18.10 1.3 Kemrock KEMR.NS 76.50 0.2 Sun TV Network SUTV.NS 306.50 38.4 Glodyne Technoserve GLDY.NS 92.45 1.4 Housing Dev.&.Infra. HDIL.NS 69.30 0.2 Emami EMAM.NS 507.50 29.5 Kemrock KEMR.NS 76.50 1.6 AAL AMTK.NS 87.40 0.3 Eclerx ECLE.NS 888.70 28.3 Rain Commodities RACL.NS 37.30 2.0 NCC NCCL.NS 32.05 0.3 CRISIL CRSL.NS 929.40 26.1 Alok Industries ALOK.NS 10.95 2.2 Shipping Corp. SCI.NS 51.35 0.3 Muthoot Finance MUTT.NS 163.70 25.2 SRF SRFL.NS 220.30 2.8 Usha Martin USBL.NS 22.95 0.3 Zydus Wellness ZYDS.NS 412.30 24.8 United Bank Of India UBOI.NS 54.00 3.0 Srei Infra. SREI.NS 22.55 0.3 Engineers India ENGI.NS 236.30 22.7 Allahabad Bank ALBK.NS 120.55 3.0 Central Bank Of India CBI.NS 62.40 0.3 Glodyne Technoserve GLDY.NS 92.45 20.6 State Bank Of Bin.& Jaipur SBKB.NS 334.95 3.2 United Bank Of India UBOI.NS 54.00 0.4 VST Industries VSTI.NS 1,711.10 20.2 Housing Dev.&.Infra. HDIL.NS 69.30 3.2 Unitech UNTE.NS 20.30 0.4 Page Industries PAGE.NS 3,281.70 19.9
Losers Losers Losers Chettinad Cement CHET.NS 796.70 268.8 SpiceJet SPJT.BO 33.05 538.5 Max India MAXI.NS 192.30 (39.8) Max India MAXI.NS 192.30 224.1 Fert.& Chems.Travancore FCTL.NS 27.85 51.7 Tata Tele Ma TTML.NS 10.80 (24.8) SAOL SNWR.NS 45.55 169.2 United Breweries UBBW.NS 622.75 49.7 Piramal Healthcare PIRA.NS 472.30 (18.6) Fortis Healthcare FOHE.NS 96.50 151.5 Jet Airways JET.NS 361.15 34.3 MTNL MTNL.NS 39.40 (18.2) Astrazeneca Pharma ASTR.NS 1,782.65 132.9 Swan Energy SWAN.NS 139.85 29.2 Srei Infra. SREI.NS 22.55 (14.4) National Fertilizers NAFT.NS 75.30 100.1 Wockhardt WCKH.NS 1,336.20 23.0 JM Financial JMSH.NS 14.65 (14.0) Asian Star ASAN.BO 629.00 97.6 Astrazeneca Pharma ASTR.NS 1,782.65 21.9 India Infoline IIFL.NS 59.35 (12.2) Shopper's Stop SHOP.NS 351.85 87.4 Jubilant Foodworks JUBI.NS 1,212.95 20.9 Development Credit Bank DCBA.NS 40.70 (12.1) Basf India BASF.NS 664.35 83.0 VIP Industries VIPI.NS 82.20 19.9 Blue Star BLUS.NS 166.10 (11.9) United Breweries UBBW.NS 622.75 77.8 Shree Cement SHCM.NS 3,463.30 19.5 Magma Fincorp MAGM.NS 61.65 (11.9)
* For stocks that are not rated, I/B/E/S consensus forecast numbers are used. CFROI® Spread is the difference between CFROI® and market implied discount rate. A larger number indicates
that more value is created by a company.
14 September 2012
David & Goliath 45
Indonesia – Company updates ACE Hardware (ACES.JK, Rp6250.00, N, TP Rp5500.00) Mitra Adiperkasa (MAPI.JK, Rp7100.00, O [V], TP
Rp8400.00)
Consistently delivering results
■ We recently met with the ACE’s management and found that the
new franchise regulation launched last week will not be
applicable to it as it operates under license agreement, and not
as a franchise.
■ Although the situation might change, for now, ACES assures that
the business is not affected.
■ We are still waiting for another regulation to be issued that will
control company-owned outlets, and manage sub-franchise
arrangements. The new planned regulation will limit number of
company-owned outlets to 100-150 franchise outlets, for example
as of July 2012, ACES owned around 67 stores, with a total store
area of 188,000 sqm. Based on Antara news, (3 September
2012), this planned regulation is still being discussed between
the Ministry of Trade and industry players. Thus, we are waiting
for more clarity.
■ We maintain our NEUTRAL rating on the stock, and maintain our
target price of Rp5,500, implying 25.7x FY12E P/E and 0.88x
FY12E PEG ratio, on the back of 22% earnings CAGR 2012-14E.
MAPI’s F&B business may have limited impact from recent regulation
■ We recently spoke to the management on the recent changes on
franchise regulation. We found that most of MAPI’s brands are
under license agreement, except its F&B brands that hold
franchise agreement. Thus, we believe impact would be limited.
■ Under the new regulation, MAPI would need to meet the required
80% minimum of local content. The company believes they have
met most of the criteria required, and if needed, they may request
for special permit from the minister to be exempted. Thus, we
believe the impact would be relatively limited and manageable.
■ We still await another regulation that will control the company-
owned outlet, and manage sub-franchise arrangement to be
issued, in which it will limit the number of company-owned
franchise outlets at maximum between 100 and 150. It is still
under discussion between the Ministry of Trade and the industry
players. Thus, we are waiting for more clarity.
■ We maintain our OUTPERFORM rating and our target price of
Note1:Ace Hardware Indonesia retails tools, home improvement products, lawn and garden supplies, plumbing, furniture, sporting goods and pet supplies..
Mkt cap (Rp/US$ bn)Daily trad v al - 6m av g (US$ mn)
Major shareholders PT Kaw an Lama Sejahtera
Net debt(cash)/equity (%)
Rev enue (Rp bn)
52-w k range (Rp)
ACES IJ / ACES.JK
N (N)
Daily trad v ol - 6m av g (mn)
Rating (prev. rating)
Shares outstanding (mn)
Price (06 Sep 12 , Rp)
TP (prev. TP Rp)
Est. pot. % chg. to TP
EBITDA (Rp bn)
Net profit (Rp bn)
EPS (Rp)
- Change from prev . EPS (%)
- Consensus EPS (Rp)
EPS grow th (%)
P/E (x )
Div idend y ield (%)
EV/EBITDA (x )
P/B (x )
Bbg/RIC 7,050.00
8,400 (8,400)
1,660.00 19
2.6
—
Free float (%) 42.4 Performance 1M 3M 12M
Absolute (%) (3.4) 3.7 49.2
Relativ e (%) (4.7) (4.6) 45.8
Year 12/10A 12/11A 12/12E 12/13E 12/14E
4,712 5,890 7,301 8,691 10,245
711 898 1,091 1,273 1,484
201.1 360.4 493.3 605.5 751.2
121 217 297 365 453
n.a. n.a. 0 0 0
n.a. n.a. 283 359 444
22.6 79.3 36.9 22.7 24.1
58.2 32.5 23.7 19.3 15.6
0.2 0.3 0.5 0.7 0.9
17.5 14.0 11.4 9.6 8.0
8.0 6.5 5.2 4.2 3.4
14.6 22.1 24.5 24.3 24.4
49.7 46.2 30.7 20.4 6.4
7750.0 - 4000.0
11,703.0/ 1.2
ROE (%)
Note 1: ORD/ADR=50.00. Note 2: Mitra Adiperkasa Tbk operates department stores and specialty stores selling a broad range of goods.
Mkt cap (Rp/US$ bn)Daily trad v al - 6m av g (US$ mn)
Major shareholders PT Saty a Mulia Gema
Net debt(cash)/equity (%)
Rev enue (Rp bn)
52-w k range (Rp)
MAPI IJ / MAPI.JK
O (O) [V]
Daily trad v ol - 6m av g (mn)
Rating (prev. rating)
Shares outstanding (mn)
Price (07 Sep 12 , Rp)
TP (prev. TP Rp)
Est. pot. % chg. to TP
EBITDA (Rp bn)
Net profit (Rp bn)
EPS (Rp)
- Change from prev . EPS (%)
- Consensus EPS (Rp)
EPS grow th (%)
P/E (x )
Div idend y ield (%)
EV/EBITDA (x )
P/B (x )
Price performance vs. MSCI Indonesia Price performance vs. MSCI Indonesia
Indonesia – Company updates Lippo Cikarang (LPCK.JK, Rp3750.00, O [V], TP
Rp4500.00)
Surya Semesta Internusa (SSIA.JK, Rp1260.00, O [V], TP
Rp1580.00)
Mixing industrial with residential
■ We initiate coverage on LPCK with an OUTPERFORM rating and
a target price of Rp4,500/share. LPCK pursues a strategy of
township, providing water treatment, residential estates and other
facilities to its industrial land bank.
■ LPCK pursues a township strategy, which includes residential
estates and facilities including shopping mall, commercial centre
and international school, built in proximity to its industrial land
bank. Currently, it has 207 ha of residential land bank and 465 ha
of industrial land bank.
■ LPCK stands to benefit from increasing demand for industrial
estate on the back of upswing in Indonesia’s investment. The
company also benefits from higher purchasing power of
Indonesia on the back of the country’s robust economic growth,
supporting the demand and selling price of its residential estate.
■ Our target price for LPCK is based on its RNAV, derived from
DCF of its future cash flow. Our target price for LPCK implies
7.4x 2012E P/E and 6.2x 2013E P/E.
Additional land bank is the key
■ We initiate coverage of SSIA with an OUTPERFORM rating and
a target price of Rp1,580. We believe that the positive outlook of
industrial estates benefit SSIA with EBITDA contributions from
industrial estate increasing from 33% in 2010 to 75% by 2013E.
■ We expect EBITDA contribution from industrial land sales to
increase to 75% by 2013E on the back of surging demand for
industrial land bank. The other divisions, construction and
hospitality will benefit from Indonesia’s investment uptrend and
robust purchasing power growth.
■ The company has a solid reputation as an industrial estate
developer with high profile tenants. Our estimates assume the
company successfully adds 1,400ha net additional industrial land
bank in Bekasi by 2015. We believe that securing additional land
is imperative for SSIA.
■ Our target price for SSIA is based on the RNAV of the company,
derived from the DCF of its future cash flow. Our target price for
SSIA implies 11.6x 2012E P/E and 9.7x 2013E P/E.
Bbg/RIC 3,550.00
4,500 (NA)
696.00 27
6.1
2.0
Free float (%) 57.8 Performance 1M 3M 12M
Absolute (%) (2.1) 14.5 56.0
Relativ e (%) (3.4) 6.2 52.6
Year 12/10A 12/11A 12/12E 12/13E 12/14E
117.6 311.5 514.7 576.4 717.1
65.3 257.7 425.5 502.0 651.4
94 370 611 721 936
n.a. n.a. 0 0 0
n.a. n.a. 668 1,097 1,280
26.3 294.6 65.1 18.0 29.8
37.8 9.6 5.8 4.9 3.8
0.0 0.0 0.0 0.0 0.0
20.7 8.3 4.4 3.0 1.7
12.3 37.2 41.1 33.5 31.4
-6.3 12.5 -14.8 -41.4 -52.5
— — — — —
— — — — —
EPS grow th (%)
P/E (x )
Div idend y ield (%)
EV/EBITDA (x )
ROE (%)
Net debt(cash)/equity (%)
Net profit (Rp bn)
EPS (Rp)
- Change from prev . EPS (%)
- Consensus EPS (Rp)
Price (07 Sep 12 , Rp)
TP (prev. TP Rp)
Est. pot. % chg. to TP
52-w k range (Rp)
LPCK IJ / LPCK.JK
O (NA) [V]
Daily trad v ol - 6m av g (mn)
Rating (prev. rating)
Shares outstanding (mn)
4175.0 - 1240.0
2,470.8/ 0.3
NAV per share (Rp)
Note1:PT Lippo Cikarang Tbk operates in the industrial and real estate development activities. Through its subsidiaries, the company also provides public
transportation and recreational services..
Mkt cap (Rp/US$ bn)Daily trad v al - 6m av g (US$ mn)
Major shareholders PT. Kemuning Satiatama
Disc./(prem.) to NAV (%)
EBITDA (Rp bn)
Bbg/RIC 1,250.00
1,580 (NA)
4,705.25 26
35.3
3.9
Free float (%) 61.9 Performance 1M 3M 12M
Absolute (%) 11.6 40.4 194.1
Relativ e (%) 10.3 32.1 190.7
Year 12/10A 12/11A 12/12E 12/13E 12/14E
223.0 541.0 920.0 1,117.0 1,533.0
116.0 257.0 642.0 765.0 1,124.0
25 55 136 163 239
n.a. n.a. 0 0 0
n.a. n.a. 123 161 193
556.8 122.8 149.3 19.1 47.0
50.9 22.8 9.2 7.7 5.2
0.0 0.4 0.9 1.1 1.6
27.9 10.7 6.3 4.5 3.0
14.2 26.0 45.7 37.3 38.5
35.7 -7.3 -4.9 -34.4 -32.7
— — — — —
— — — — —
EPS grow th (%)
P/E (x )
Div idend y ield (%)
EV/EBITDA (x )
ROE (%)
Net debt(cash)/equity (%)
Net profit (Rp bn)
EPS (Rp)
- Change from prev . EPS (%)
- Consensus EPS (Rp)
Price (07 Sep 12 , Rp)
TP (prev. TP Rp)
Est. pot. % chg. to TP
52-w k range (Rp)
SSIA IJ / SSIA.JK
O (NA) [V]
Daily trad v ol - 6m av g (mn)
Rating (prev. rating)
Shares outstanding (mn)
1250.0 - 285.0
5,881.6/ 0.6
NAV per share (Rp)
Note1: PT Surya Semesta Internusa and its subsidiaries develop and manage industrial and residential real estates, provide construction services, and
manufacture building materials. The company also operates hotels and provides IT-related businesses.
Mkt cap (Rp/US$ bn)Daily trad v al - 6m av g (US$ mn)
Major shareholders PT Union Sampoerna
Disc./(prem.) to NAV (%)
EBITDA (Rp bn)
Price performance vs. MSCI Indonesia Price performance vs. MSCI Indonesia
60
100
140
180
220
09/11 11/11 01/12 03/12 05/12 07/12 09/12
Lippo Cikarang MSCI Indonesia
60
110
160
210
260
310
09/11 11/11 01/12 03/12 05/12 07/12 09/12
Surya Semesta Internusa MSCI Indonesia
Teddy Oetomo / Research Analyst / 6221 2553 7911 /
Bakrieland Dev. ELTY.JK 232 51 28 (44.7) Not rated Dec (106.3) 53.5 0.2 0.2 (1.8) (8.7) 2.0 0.0 (35.4)
Bank Bukopin BBKP.JK 511 620 817 31.8 Not rated Dec 6.5 6.0 1.1 1.0 11.3 2.4 (1.6) (7.5) (3.1)
Bank Mayapada MAYA.JK 636 1,990 543 (72.7) Not rated Dec 35.9 31.8 3.7 3.2 4.4 (4.5) (0.5) (0.5) (20.4)
Bank Mega MEGA.JK 1,187 3,150 2,795 (11.3) Not rated Dec 10.0 9.0 2.4 1.8 15.5 6.8 (0.8) 1.6 (4.5)
Bank OCBC NISP NISP.JK 1,043 1,180 887 (24.8) Not rated Dec 11.6 11.8 1.3 1.2 6.5 (2.2) 5.4 9.3 3.5
Bank Pan Indonesia PNBN.JK 1,643 660 672 1.8 Not rated Dec 8.7 9.0 1.1 1.0 7.0 (1.5) (4.3) (1.5) (13.2)
Bank Jabar Banten BJBR.JK 1,092 1,090 1,200 10.1 OUTPERFORM Dec 11.0 8.8 2.0 1.9 11.0 2.4 0.9 10.1 25.3
Bank Permata BNLI.JK 1,307 1,400 1,183 (15.5) Not rated Dec 10.9 9.3 1.4 1.2 6.1 (2.4) (1.4) (2.1) (4.1)
Bank Tabungan Negara BBTN.JK 1,161 1,270 1,300 2.4 NEUTRAL Dec 9.9 9.5 1.7 1.4 9.0 0.4 (3.1) (5.9) 5.0
Barito Pacific BRPT.JK 361 495 3,217 549.9 Not rated Dec (37.0) (24.1) 0.5 0.5 (5.3) (11.7) 1.0 (2.9) (8.3)
Benakat Petroleum BIPI.JK 659 180 124 (31.3) Not rated Dec (88.2) 496.3 1.7 1.4 11.6 6.5 (0.6) (7.7) (5.8)
Bentoel Int'l. RMBA.JK 431 570 522 (8.5) Not rated Dec 13.5 12.7 1.8 1.9 6.0 (0.2) (1.7) (6.6) (1.7)
Berau Coal Energy BRAU.JK 714 196 1,131 477.3 Not rated Dec 5.4 2.4 1.7 1.8 25.6 19.8 (1.5) (33.6) (39.7)
Bhakti Investama BHIT.JK 1,417 405 138 (65.9) Not rated Dec 47.6 40.1 2.1 2.0 6.8 (2.0) 1.3 2.5 2.5
BISI BISI.JK 354 1,130 848 (25.0) Not rated Dec 23.1 14.1 2.6 2.5 6.8 1.8 6.6 (2.6) 44.9
Bno.Lumbung Energi &Mtl. BORN.JK 896 485 605 24.8 Not rated Dec 4.7 5.7 1.0 0.8 12.3 7.1 (3.0) 0.0 (11.8)
Share price performance
Rp term (%)P/B (x)P/E (x)
CalendarizedCalendarized
* Include the small-cap stocks in HOLT® database with market cap between US$150 mn and US$2 bn. For stocks that are Not Rated, I/B/E/S consensus forecast are used. CFROI® is a
registered trademark in the United States and other countries (excluding the United Kingdom) of Credit Suisse or its subsidiaries or affiliates.
* Companies in bold and italic indicate constituents of Credit Suisse Indonesia Small Cap Index
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Valuations of Credit Suisse Indonesia small-cap watch list* Market CS target/ Potential Credit Year HOLT CFROI
Cap Price HOLT warranted return Suisse end CFROI Spread
Indah Kiat Pulp & Paper INKP.JK 623 1,090 (1,042) (195.6) Not rated Dec 38.9 44.9 0.3 0.3 (1.2) (9.8) 5.8 (7.6) 7.9
Indika Energy INDY.JK 849 1,560 1,228 (21.3) Not rated Dec 7.3 6.3 1.3 1.1 0.2 (5.6) 0.0 (7.7) (8.2)
Indomobil Sukses Intsl. IMAS.JK 1,660 5,750 4,838 (15.9) Not rated Dec 16.5 14.5 3.4 3.1 6.0 0.3 (1.7) (6.5) (26.3)
Inov isi Infracom INVS.JK 1,717 6,400 2,137 (66.6) Not rated Dec 64.6 n.a. 10.2 n.a. 8.3 3.9 (0.8) 1.6 21.9
Intiland Development DILD.JK 346 320 584 82.4 Not rated Dec 22.9 7.7 0.9 0.8 3.6 (2.5) 6.7 4.9 (11.1)
Jakarta Int'l Hotels & Dev. JIHD.JK 165 680 859 26.3 Not rated Dec 74.1 17.2 0.8 0.7 0.3 (5.8) 0.0 (1.4) 13.3
Jakarta Setiabudi JSPT.JK 182 750 1,622 116.2 Not rated Dec 12.3 12.5 1.4 1.3 1.5 (5.0) 0.0 0.0 0.0
Japfa Comfeed JPFA.JK 957 4,300 3,872 (9.9) Not rated Dec 14.4 10.0 2.7 2.3 6.1 0.2 0.6 2.4 0.6
Calendarized Calendarized Share price performance
P/E (x) P/B (x) Rp term (%)
* Include the small-cap stocks in HOLT® database with market cap between US$150 mn and US$2 bn. For stocks that are Not Rated, I/B/E/S consensus forecast are used. CFROI® is a
registered trademark in the United States and other countries (excluding the United Kingdom) of Credit Suisse or its subsidiaries or affiliates.
* Companies in bold and italic indicate constituents of Credit Suisse Indonesia Small Cap Index
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Valuations of Credit Suisse Indonesia small-cap watch list* Market CS target/ Potential Credit Year HOLT CFROI
Cap Price HOLT warranted return Suisse end CFROI Spread
Multi Bintang MLBI.JK 1,560 709,000 343,801 (51.5) Not rated Dec 29.5 25.3 28.2 19.9 34.7 29.8 0.0 0.1 2.8
Multistrada Arah Sarana MASA.JK 384 400 89 (77.8) Not rated Dec 17.1 18.7 1.4 1.2 0.5 (6.7) 0.0 (13.0) (19.2)
Nippon Indosari ROTI.JK 544 5,150 3,334 (35.3) Not rated Dec 45.0 31.3 9.5 7.8 11.7 6.6 (1.0) 3.5 34.6
Nusantara Infra. META.JK 293 205 71 (65.2) Not rated Dec (103.5) (103.0) 2.9 3.1 0.4 (5.4) 0.0 6.2 0.0
Pabrik Kertas Tjiwi Kimia TKIM.JK 345 2,475 (1,759) (171.1) Not rated Dec 4.9 5.0 0.5 0.4 1.3 (7.4) (4.8) (7.5) (10.8)
Pakuwon Jati PWON.JK 1,131 225 216 (3.8) Not rated Dec 26.1 15.0 4.9 4.0 8.5 2.9 0.0 2.3 23.6
Panin Financial PNLF.JK 360 123 279 127.2 Not rated Dec 3.2 3.3 0.5 0.4 8.5 (0.4) (3.9) (4.7) 0.8
Pembangunan Jaya Ancol PJAA.JK 154 920 1,264 37.4 Not rated Dec 9.1 8.3 1.3 1.2 4.5 (1.2) (1.1) (4.2) (8.9)
Pembangunan Perumahan PTPP.JK 319 630 569 (9.7) Not rated Dec 12.6 11.0 2.1 2.0 10.4 3.6 5.0 (3.1) 12.5
Plaza Indonesia Realty PLIN.JK 686 1,850 448 (75.8) Not rated Dec 72.4 33.5 2.9 2.8 (1.5) (7.0) 0.0 0.0 19.4
Polaris Investama PLAS.JK 168 1,360 92 (93.2) Not rated Dec 680.0 551.5 8.4 8.2 (3.7) (12.9) 0.7 0.7 0.0
Polychem Indonesia ADMG.JK 126 310 583 88.1 Not rated Dec 4.2 3.0 0.5 0.5 (1.4) (8.4) 0.0 (13.9) (22.5)
Ciputra Property CTRP.JK 385 600 991 65.1 Not rated Dec 23.1 18.8 1.0 1.0 1.2 (4.2) 5.3 3.4 (10.4)
Dian Swastatika DSSA.JK 1,046 13,000 13,067 0.5 Not rated Dec 31.6 24.1 1.4 1.3 3.0 (2.1) 0.0 0.0 0.0
Malindo Feedmill MAIN.JK 251 1,420 2,051 44.4 Not rated Dec 11.7 7.6 5.7 4.9 12.4 5.9 0.0 (4.1) 12.7
Selamat Sempurna SMSM.JK 338 2,250 1,663 (26.1) Not rated Dec 16.1 14.0 5.3 4.3 9.0 3.4 4.7 11.1 20.3
Surya Esa ESSA.JK 251 2,400 558 (76.8) Not rated Dec 13.3 24.2 10.1 23.9 21.3 15.7 1.1 (4.0) (10.3)
Ramayana RALS.JK 793 1,070 847 (20.9) Not rated Dec 20.1 16.5 2.7 2.7 4.7 (0.8) 1.9 (6.1) 12.6
Calendarized Calendarized Share price performance
P/E (x) P/B (x) Rp term (%)
* Include the small-cap stocks in HOLT® database with market cap between US$150 mn and US$2 bn. For stocks that are Not Rated, I/B/E/S consensus forecast are used. CFROI® is a
registered trademark in the United States and other countries (excluding the United Kingdom) of Credit Suisse or its subsidiaries or affiliates.
* Companies in bold and italic indicate constituents of Credit Suisse Indonesia Small Cap Index
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Valuations of Credit Suisse Indonesia small-cap watch list* Market CS target/ Potential Credit Year HOLT CFROI
Cap Price HOLT warranted return Suisse end CFROI Spread
Wijaya Karya WIKA.JK 716 1,130 784 (30.6) Not rated Dec 18.6 15.4 3.2 2.7 5.7 (0.4) 1.8 3.7 15.3
Wintermar Offshore Marine WINS.JK 154 415 436 5.1 Not rated Dec 11.1 8.7 1.2 1.1 4.3 (2.6) (1.2) (3.5) 0.0
Calendarized Calendarized Share price performance
P/E (x) P/B (x) Rp term (%)
* Include the small-cap stocks in HOLT® database with market cap between US$150 mn and US$2 bn. For stocks that are Not Rated, I/B/E/S consensus forecast are used. CFROI® is a
registered trademark in the United States and other countries (excluding the United Kingdom) of Credit Suisse or its subsidiaries or affiliates.
* Companies in bold and italic indicate constituents of Credit Suisse Indonesia Small Cap Index
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Indonesia – Screening Absolute price performance - top & bottom 10 companies Absolute price performance - top & bottom 10 companies Absolute price performance - top & bottom 10 companies
Price 1W return Price 1M return Price 3M return Company RIC (Rp) (%) Company RIC (Rp) (%) Company RIC (Rp) (%)
Winners Winners Winners Bumi Resources Minerals BRMS.JK 490.00 15.3 Matahari Putra MPPA.JK 1,470.00 25.6 Matahari Putra MPPA.JK 1,470.00 54.7 Fast Food FAST.JK 14,000.00 12.9 Surya Semesta SSIA.JK 1,260.00 17.8 BISI BISI.JK 1,130.00 44.9 BW Plantation BWPT.JK 1,510.00 11.9 Hexindo Adiperkasa HEXA.JK 7,950.00 13.6 Global Mediacom BMTR.JK 1,890.00 39.0 Timah TINS.JK 1,440.00 11.6 Asahimas Flat Glass AMFG.JK 6,850.00 12.3 Nippon Indosari ROTI.JK 5,150.00 34.6 Energi Mega ENRG.JK 91.00 11.0 Tempo Scan Pacific TSPC.JK 3,000.00 12.1 Enseval Putera EPMT.JK 1,660.00 32.8 Alam Sutera Realty ASRI.JK 460.00 10.8 Aneka Tambang ANTM.JK 1,350.00 11.6 Sarana Menara TOWR.JK 20,300.00 31.0 Ultrajaya Milk Ind. & Trco. ULTJ.JK 1,170.00 10.4 Sarana Menara TOWR.JK 20,300.00 11.5 Surya Semesta SSIA.JK 1,260.00 29.9 Tempo Scan Pacific TSPC.JK 3,000.00 9.1 Selamat Sempurna SMSM.JK 2,250.00 11.1 Indosiar Karya Media IDKM.JK 5,550.00 29.1 Summarecon Agung SMRA.JK 1,630.00 7.9 Mayora Indah MYOR.JK 22,850.00 10.9 Asahimas Flat Glass AMFG.JK 6,850.00 28.0 Tunas Ridean TURI.JK 840.00 7.7 Bank Jabar Banten BJBR.JK 1,090.00 10.1 Tower Bersama Infra. TBIG.JK 4,175.00 27.5 Losers Losers Losers Bakrie Telecom BTEL.JK 102.00 (24.4) Bakrie Telecom BTEL.JK 102.00 (34.2) Bakrie Telecom BTEL.JK 102.00 (52.6) Sarana Menara TOWR.JK 20,300.00 (14.0) Berau Coal Energy BRAU.JK 196.00 (33.6) Berau Coal Energy BRAU.JK 196.00 (39.7) Pabrik Kertas Tjiwi Kimia TKIM.JK 2,475.00 (4.8) Energi Mega ENRG.JK 91.00 (18.8) Bakrieland Dev. ELTY.JK 51.00 (35.4) Bank Pan Indonesia PNBN.JK 660.00 (4.3) Resource Alam KKGI.JK 2,875.00 (14.8) Energi Mega ENRG.JK 91.00 (32.1) Resource Alam KKGI.JK 2,875.00 (4.2) Delta Dunia Petroindo DOID.JK 245.00 (14.0) Bakrie Sumatera UNSP.JK 131.00 (30.7) Panin Financial PNLF.JK 123.00 (3.9) Polychem Indonesia ADMG.JK 310.00 (13.9) Delta Dunia Petroindo DOID.JK 245.00 (30.0) Tunas Baru Lampung TBLA.JK 520.00 (3.7) Multistrada Arah Sarana MASA.JK 400.00 (13.0) Indomobil Sukses Intsl. IMAS.JK 5,750.00 (26.3) Clipan Finance CFIN.JK 395.00 (3.7) London Sumatra LSIP.JK 2,500.00 (9.1) Polychem Indonesia ADMG.JK 310.00 (22.5) Jaya Konstruksi JKON.JK 1,580.00 (3.7) Bakrie Sumatera UNSP.JK 131.00 (9.0) Bumi Serpong Damai BSDE.JK 1,000.00 (21.3) Bank Tabungan Negara BBTN.JK 1,270.00 (3.1) Garuda GIAA.JK 620.00 (8.8) Bank Mayapada MAYA.JK 1,990.00 (20.4)
Price-to-earnings - most & least expensive 10 companies Price-to-book - most & least expensive 10 companies CFROI® Spread - top & bottom 10 companies
Price 12 P/E Price 12 P/B Price CFROI® Spread Company RIC (Rp) (x) Company RIC (Rp) (x) Company RIC (Rp) (%)
Winners Winners Winners Berau Coal Energy BRAU.JK 196.00 2.4 Bakrie Sumatera UNSP.JK 131.00 0.2 Resource Alam KKGI.JK 2,875.00 36.7 Polychem Indonesia ADMG.JK 310.00 3.0 Bakrieland Dev. ELTY.JK 51.00 0.2 Surya Citra Media SCMA.JK 10,500.00 32.9 Panin Financial PNLF.JK 123.00 3.3 Indah Kiat Pulp & Paper INKP.JK 1,090.00 0.3 Harum Energy HRUM.JK 6,250.00 30.6 Bakrie Sumatera UNSP.JK 131.00 3.8 Bakrie & Brothers BNBR.JK 50.00 0.4 Multi Bintang MLBI.JK 709,000.00 29.8 Greenwood GWSA.JK 240.00 4.6 Panin Financial PNLF.JK 123.00 0.4 Adira Dinamika Finance ADMF.JK 10,150.00 20.4 Clipan Finance CFIN.JK 395.00 4.6 Pabrik Kertas Tjiwi Kimia TKIM.JK 2,475.00 0.4 Merck MERK.JK 152,000.00 20.2 Adira Dinamika Finance ADMF.JK 10,150.00 4.9 Polychem Indonesia ADMG.JK 310.00 0.5 Berau Coal Energy BRAU.JK 196.00 19.8 Pabrik Kertas Tjiwi Kimia TKIM.JK 2,475.00 5.0 Barito Pacific BRPT.JK 495.00 0.5 Hexindo Adiperkasa HEXA.JK 7,950.00 17.7
Tunas Baru Lampung TBLA.JK 520.00 5.4 Medco Energi MEDC.JK 1,620.00 0.5 Surya Esa ESSA.JK 2,400.00 15.7
Bno.Lumbung Energi &Mtl. BORN.JK 485.00 5.7 Energi Mega ENRG.JK 91.00 0.6 Alam Sutera Realty ASRI.JK 460.00 9.9 Losers Losers Losers Polaris Investama PLAS.JK 1,360.00 551.5 Surya Esa ESSA.JK 2,400.00 23.9 Polaris Investama PLAS.JK 1,360.00 (12.9) Benakat Petroleum BIPI.JK 180.00 496.3 Multi Bintang MLBI.JK 709,000.00 19.9 Bakrie Telecom BTEL.JK 102.00 (12.8) Bumi Resources Minerals BRMS.JK 490.00 455.8 Indosiar Karya Media IDKM.JK 5,550.00 19.9 Indosiar Karya Media IDKM.JK 5,550.00 (12.5) Asahimas Flat Glass AMFG.JK 6,850.00 80.2 Surya Citra Media SCMA.JK 10,500.00 12.8 Barito Pacific BRPT.JK 495.00 (11.7) Matahari Putra MPPA.JK 1,470.00 65.4 Sarana Menara TOWR.JK 20,300.00 11.3 Energi Mega ENRG.JK 91.00 (10.2) Bakrieland Dev. ELTY.JK 51.00 53.5 Merck MERK.JK 152,000.00 8.2 Indah Kiat Pulp & Paper INKP.JK 1,090.00 (9.8) Sarana Menara TOWR.JK 20,300.00 47.2 Polaris Investama PLAS.JK 1,360.00 8.2 Bakrieland Dev. ELTY.JK 51.00 (8.7) Indah Kiat Pulp & Paper INKP.JK 1,090.00 44.9 Nippon Indosari ROTI.JK 5,150.00 7.8 Polychem Indonesia ADMG.JK 310.00 (8.4) Sumber Alfaria AMRT.JK 5,750.00 40.6 Sumber Alfaria AMRT.JK 5,750.00 7.4 Delta Dunia Petroindo DOID.JK 245.00 (8.1) Bhakti Investama BHIT.JK 405.00 40.1 Ace Hardware ACES.JK 6,250.00 7.0 Pabrik Kertas Tjiwi Kimia TKIM.JK 2,475.00 (7.4)
* For stocks that are not rated, I/B/E/S consensus forecast numbers are used. CFROI® Spread is the difference between CFROI® and market implied discount rate. A larger number indicates
that more value is created by a company
14 September 2012
David & Goliath 53
Korea – Company updates Shinsegae (004170.KS, W217,000, N, TP W250,000)
Weak trends so far due to time difference in Choosuk holiday
■ Due to the Choosuk holiday time difference, it is difficult to read
the August YoY results as a trend. Also, Shinsegae partly
renovated its cosmetics and luxury sections at its Gangnam and
Gyunggi branches which could have hurt the sales trends.
Hence, the SSS was -5% YoY in August and OP margins fell 60
bp YoY.
■ The new stores launched are stated to have exceeded
expectations. We think some of the new stores benefited as a
few of the nearby department stores or malls were being
renovated.
■ Risks: (1) Shinsegae could be a laggard department stores play
as it has weaker and slower expansion schedules than its
competitors; and (2) consensus numbers could fall on dim
anticipation of margin improvement from mix, with a high portion
of its online business that continues to erode margins.
■ It should benefit if the overall department stores sector
strengthens on high recovery expectations. However, we
maintain NEUTRAL on Shinsegae, as we believe margins have
not been strong enough and will not improve soon. We also find
its new stores pipeline less exciting than peers.
Bbg/RIC 216,000.00
250,000
9.85 16
0.0
7.0
Free float (%) 72.8 Performance 1M 3M 12M
Absolute (%) (0.2) (2.0) (26.5)
Relativ e (%) 1.1 (5.3) (32.4)
Year 12/10A 12/11A 12/12E 12/13E 12/14E
14,645 3,912 4,295 4,665 5,124
1,325 337 361 400 450
1,077 202 194 218 260
28,548 20,478 19,699 22,159 26,396
n.a. n.a. 0 0 0
n.a. n.a. 19,551 21,942 24,005
89.6 -28.3 -3.8 12.5 19.1
7.6 10.5 11.0 9.7 8.2
1.2 0.6 0.7 0.9 1.0
4.0 8.2 8.0 7.2 6.4
1.1 1.1 1.0 0.9 0.8
18.4 4.4 9.7 10.0 10.8
43.3 33.3 36.7 33.5 30.4
322500.0 - 183000.0
2,126.6/ 1.9
ROE (%)
Note 1: Shinsegae Co. is a Korea-based company engaged in the operation of department stores under two segments: Offline and online department stores.
Mkt cap (W/US$ bn)Daily trad v al - 6m av g (US$ mn)
Chin Hung 002780.KS 375 941 (191) (120.3) Not rated Dec (0.3) (2.3) (5.4) (39.2) (38.8) (46.8) 4.0 (11.2) (14.1)
China Ocean Resources 900050.KS 257 3,855 50,301 1,204.8 Not rated Dec 4.3 1.8 0.8 0.7 22.1 15.0 2.1 (7.3) 6.1
Chong Kun Dang Pharma 001630.KS 289 24,900 49,571 99.1 Not rated Dec 5.7 9.2 0.9 0.8 10.2 2.6 (3.5) 5.3 58.1
Chosun Refractories 000480.KS 226 63,700 110,229 73.0 Not rated Dec 6.0 5.5 0.4 0.4 4.1 (3.8) 2.9 0.6 5.6
CJ 001040.KS 2,282 88,600 106,256 19.9 Not rated Dec 6.8 11.5 0.8 0.8 5.3 (2.5) 4.7 14.2 12.0
CJ CGV 079160.KS 537 29,350 22,363 (23.8) Not rated Dec 32.7 11.2 2.0 1.8 5.7 (2.2) 5.6 9.9 15.8
CJ E&M 130960.KQ 1,036 30,750 77,051 150.6 Not rated Dec 20.4 16.9 1.1 1.0 18.7 11.6 8.7 25.5 15.4
CJ Food System 051500.KQ 288 29,950 20,162 (32.7) Not rated Dec 17.5 17.0 3.1 2.9 8.9 1.3 1.7 21.3 46.5
CJ O Shopping 035760.KQ 1,256 228,100 220,000 (3.6) OUTPERFORM Dec 15.4 12.6 4.0 3.1 19.0 11.7 0.8 21.0 35.2
Com2us 078340.KQ 596 66,500 41,404 (37.7) Not rated Dec 125.2 33.1 8.9 7.9 7.6 0.5 13.5 35.0 74.1
Cosmax 044820.KS 463 38,400 13,126 (65.8) Not rated Dec 44.9 30.5 8.6 7.9 8.1 0.6 4.3 30.2 52.4
Credu 067280.KQ 202 40,500 15,943 (60.6) Not rated Dec 44.0 41.0 2.7 2.6 3.6 (3.5) 10.2 15.4 17.7
Crown Confectionery 005740.KS 225 172,000 119,401 (30.6) Not rated Dec 12.5 11.9 1.6 1.6 7.6 (0.6) (2.0) (3.6) 3.9
Crucialtec 114120.KQ 228 10,900 6,748 (38.1) Not rated Dec 14.4 15.6 2.3 1.2 14.6 7.4 (3.5) 18.5 32.9
CalendarizedCalendarized Share price performance
W term (%)P/B (x)P/E (x)
* Include the small-cap stocks in HOLT® database with market cap between US$150 mn and US$2 bn. For stocks that are Not Rated, I/B/E/S consensus forecast are used. CFROI® is a
registered trademark in the United States and other countries (excluding the United Kingdom) of Credit Suisse or its subsidiaries or affiliates.
* Companies in bold and italic indicate constituents of Credit Suisse Korea Small Cap Index.
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Valuations of Credit Suisse Korea small-cap watch list* Market CS target/ Potential Credit Year HOLT CFROI
Cap Price HOLT warranted return Suisse end CFROI Spread
Dongwon F&B 049770.KS 222 64,800 67,947 4.9 Not rated Dec 6.6 6.6 0.6 0.6 5.0 (2.9) (0.2) 3.0 4.3
Dongwon Industries 006040.KS 717 240,000 423,723 76.6 Not rated Dec 10.4 7.4 1.7 1.7 13.7 6.2 0.8 6.9 27.0
Dongyang Mechatronics 013570.KS 357 12,700 14,870 17.1 Not rated Dec 9.3 7.8 1.3 1.2 6.5 (0.9) 3.7 (2.7) (1.2)
Doosan E&C 011160.KS 434 2,815 3,247 15.3 Not rated Dec (1.7) (11.3) 0.4 0.4 (5.3) (13.3) 2.9 (0.9) (6.6)
Doosan Engine 082740.KS 648 10,500 6,217 (40.8) Not rated Dec 3.2 6.8 2.2 n.a. 38.9 32.4 3.4 (2.3) 1.0
Duk San Hi Metal 077360.KQ 568 21,750 26,874 23.6 Not rated Dec 15.8 14.8 4.0 3.2 30.5 23.6 0.0 2.8 (9.6)
E1 017940.KS 365 59,900 144,762 141.7 Not rated Dec 5.5 3.7 0.4 0.4 6.2 (2.0) 0.0 6.2 26.6
EO Technics 039030.KQ 347 31,950 24,214 (24.2) Not rated Dec 26.3 19.9 2.2 1.9 7.9 0.8 (4.3) (10.0) (10.5)
Eugene 023410.KQ 189 2,835 3,611 27.4 Not rated Dec (1.9) (49.7) (84.6) (84.6) 0.8 (7.4) (1.0) (1.6) (21.6)
Eugene Technology 084370.KQ 289 15,900 71,828 351.7 Not rated Dec 12.2 6.6 4.2 3.0 30.6 23.5 8.2 (8.6) (15.0)
Share price performance
W term (%)
Calendarized Calendarized
P/E (x) P/B (x)
* Include the small-cap stocks in HOLT® database with market cap between US$150 mn and US$2 bn. For stocks that are Not Rated, I/B/E/S consensus forecast are used. CFROI® is a
registered trademark in the United States and other countries (excluding the United Kingdom) of Credit Suisse or its subsidiaries or affiliates.
* Companies in bold and italic indicate constituents of Credit Suisse Korea Small Cap Index.
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Valuations of Credit Suisse Korea small-cap watch list* Market CS target/ Potential Credit Year HOLT CFROI
Cap Price HOLT warranted return Suisse end CFROI Spread
Pharmicell 005690.KS 247 6,650 0 (100.0) Not rated Dec (14.1) (15.3) 2.8 2.8 (56.6) (63.7) 0.9 (20.4) (3.1)
Fila Korea 081660.KS 631 71,500 139,065 94.5 Not rated Dec 311.4 6.4 2.2 1.8 22.2 14.7 1.1 2.1 (8.7)
Foosung 093370.KS 484 6,430 3,756 (41.6) Not rated Dec 27.5 13.7 4.1 3.6 8.0 0.8 0.3 14.8 23.9
Fursys 016800.KS 284 27,800 43,410 56.2 Not rated Dec 8.0 8.5 1.0 0.9 10.7 3.7 0.2 (4.3) (3.0)
GameHi 041140.KQ 276 9,130 8,114 (11.1) Not rated Dec 131.4 11.8 5.4 4.8 16.0 9.0 (1.3) (5.0) (7.8)
Gamevil 063080.KQ 500 101,500 85,429 (15.8) Not rated Dec 35.8 24.6 8.2 6.2 23.4 16.3 4.6 16.5 12.0
Gemvax & Kael 082270.KQ 925 42,250 783 (98.1) Not rated Dec (448.9) (477.2) 13.7 12.1 (0.6) (7.6) (1.7) 11.9 16.9
Genic 123330.KQ 255 57,900 35,314 (39.0) Not rated Dec 26.8 20.7 6.1 3.7 21.2 14.1 4.1 22.7 28.5
Global & Yuasa Battery 004490.KS 599 48,200 79,580 65.1 Not rated Dec 6.4 6.0 1.4 1.2 12.5 5.3 (0.6) (1.9) 4.8
Golfzon 121440.KQ 588 53,900 44,631 (17.2) Not rated Dec 14.2 8.4 1.9 1.1 13.2 6.2 1.3 (1.6) 2.3
Grand Korea Leisure 114090.KS 1,615 29,400 24,159 (17.8) Not rated Dec 28.7 14.6 8.2 7.7 20.1 13.2 5.0 25.4 43.1
Green Cross 006280.KS 1,354 150,500 135,339 (10.1) Not rated Dec 27.5 21.4 2.5 2.2 9.4 2.5 (3.2) 3.4 7.9
GS Global 001250.KS 277 13,850 (2,789) (120.1) Not rated Dec (50.2) 9.4 1.4 1.0 0.1 (7.9) 6.9 17.9 13.5
GS Home Shopping 028150.KQ 669 114,800 165,000 43.7 OUTPERFORM Dec 9.0 7.9 1.2 1.1 13.6 6.5 1.4 16.8 24.8
GS Retail 007070.KS 1,969 28,800 17,427 (39.5) Not rated Dec 23.7 18.5 1.6 1.5 5.2 (1.9) 1.1 15.7 17.6
Gwangju Shingsegae 037710.KS 316 222,500 336,971 51.4 Not rated Dec 6.8 6.5 1.1 1.0 12.7 5.4 (0.7) 2.8 3.5
Haansoft 030520.KQ 315 15,350 13,618 (11.3) Not rated Dec 25.3 17.8 2.9 2.4 20.4 13.3 10.0 25.3 38.3
HCC 018880.KS 2,275 24,000 27,441 14.3 Not rated Dec 11.5 10.9 2.1 1.9 11.7 4.8 0.0 (0.4) 17.4
Halla E&C 014790.KS 258 10,600 16,609 56.7 Not rated Dec 16.0 28.8 0.3 0.3 (3.9) (12.0) 6.0 7.5 22.0
Hanil E-WHA 007860.KS 301 8,600 15,004 74.5 Not rated Dec 5.0 5.3 0.8 0.7 3.6 (4.0) (0.7) (1.9) (2.3)
Hankook Shell Oil 002960.KS 271 234,500 220,450 (6.0) Not rated Dec 11.7 10.2 3.9 3.8 25.2 18.2 1.3 0.6 10.1
Hana Micron 067310.KQ 122 6,130 10,606 73.0 Not rated Dec 12.8 7.6 0.8 0.7 8.8 1.2 (2.5) (8.9) (31.0)
Hana Tour 039130.KS 571 55,400 50,286 (9.2) Not rated Dec 30.9 21.6 5.4 5.1 27.3 20.3 2.0 29.3 25.1
Hanall Biopharma 009420.KS 221 6,650 878 (86.8) Not rated Dec (16.7) (21.1) 4.9 4.6 (3.7) (10.9) (0.2) (7.6) (7.1)
Handsome 020000.KS 566 25,900 32,282 24.6 Not rated Dec 6.6 7.9 0.9 0.8 10.1 3.0 (3.0) 0.8 (1.3)
Hanil Cement 003300.KS 267 39,900 50,477 26.5 Not rated Dec 16.3 19.7 0.2 0.2 0.6 (7.4) (0.2) 16.0 10.2
Hanjin Heavy Holdings 003480.KS 203 7,740 34,089 340.4 Not rated Dec (19.1) (18.0) 0.2 0.2 0.2 (7.6) 8.1 2.8 5.6
Hanjin Heavy Inds. 097230.KS 540 12,600 14,629 16.1 Not rated Dec (6.3) 286.4 0.3 0.3 0.8 (7.2) 5.0 (4.5) (17.6)
Hanjin Shipping 117930.KS 1,715 15,450 9,173 (40.6) Not rated Dec (2.3) (13.2) 1.0 1.0 (8.8) (16.7) 4.7 8.4 14.4
Hanjin Shipping Holdings 000700.KS 258 6,630 12,664 91.0 Not rated Dec 2.4 n.a. 0.3 n.a. 4.9 (2.4) 8.9 15.5 7.1
P/E (x) P/B (x)
Share price performance
W term (%)
Calendarized Calendarized
* Include the small-cap stocks in HOLT® database with market cap between US$150 mn and US$2 bn. For stocks that are Not Rated, I/B/E/S consensus forecast are used. CFROI® is a
registered trademark in the United States and other countries (excluding the United Kingdom) of Credit Suisse or its subsidiaries or affiliates.
* Companies in bold and italic indicate constituents of Credit Suisse Korea Small Cap Index.
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Valuations of Credit Suisse Korea small-cap watch list* Market CS target/ Potential Credit Year HOLT CFROI
Cap Price HOLT warranted return Suisse end CFROI Spread
Ilsung Pharm. 003120.KS 198 84,000 158,114 88.2 Not rated Dec 3.3 25.1 0.4 0.3 0.9 (6.4) 3.8 2.4 7.0
Iljin Display 020760.KS 448 18,600 38,711 108.1 Not rated Dec 16.4 8.4 5.6 4.6 24.2 16.9 6.6 16.3 44.2
Iljin Materials 020150.KS 419 11,500 9,899 (13.9) Not rated Dec 33.1 20.0 1.4 1.1 1.3 (5.7) (2.1) 0.4 7.0
Il-Yang Pharm. 007570.KS 410 25,950 1,764 (93.2) Not rated Mar 161.0 622.7 2.7 10.8 2.5 (5.4) 0.2 9.5 9.5
iMarketKorea 122900.KS 836 26,200 13,503 (48.5) Not rated Dec 27.3 22.6 3.3 3.0 11.0 4.0 5.2 4.8 44.0
Infraware 041020.KQ 113 6,990 21,519 207.9 Not rated Dec 45.4 7.7 1.8 1.4 11.6 4.4 (3.3) (20.2) (21.2)
InnoChips Technology 080420.KQ 142 10,750 11,913 10.8 Not rated Dec 6.6 8.2 1.6 1.5 12.4 4.9 1.4 (10.0) (17.3)
Interflex 051370.KQ 869 70,000 51,178 (26.9) Not rated Dec 31.5 16.3 3.9 3.6 7.0 (0.3) (1.8) 14.4 29.9
P/E (x) P/B (x)
Share price performance
W term (%)
Calendarized Calendarized
* Include the small-cap stocks in HOLT® database with market cap between US$150 mn and US$2 bn. For stocks that are Not Rated, I/B/E/S consensus forecast are used. CFROI® is a
registered trademark in the United States and other countries (excluding the United Kingdom) of Credit Suisse or its subsidiaries or affiliates.
* Companies in bold and italic indicate constituents of Credit Suisse Korea Small Cap Index.
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Valuations of Credit Suisse Korea small-cap watch list* Market CS target/ Potential Credit Year HOLT CFROI
Cap Price HOLT warranted return Suisse end CFROI Spread
Jinsung TEC 036890.KQ 167 9,430 746 (92.1) Not rated Dec 11.7 8.8 3.8 3.7 6.0 (1.9) 7.2 13.8 (1.3)
Jusong Engineering 036930.KQ 226 7,340 3,454 (52.9) Not rated Dec (26.4) (7.7) 1.1 1.0 1.4 (6.1) 3.4 5.3 0.8
JVM 054950.KQ 225 39,950 8,158 (79.6) Not rated Dec 19.9 13.6 3.6 2.2 12.0 4.5 9.8 15.5 0.8
Kepco Plant Service 051600.KS 1,898 47,500 33,413 (29.7) Not rated Dec 20.4 17.7 4.3 4.0 13.7 6.8 (5.4) (5.2) 3.7
Kiswire 002240.KS 429 32,200 85,660 166.0 Not rated Dec 4.4 4.0 0.4 0.3 3.2 (4.2) (0.3) (6.8) (3.4)
Kisco 104700.KS 258 31,500 55,750 77.0 Not rated Dec (8.7) 9.7 0.4 0.4 (6.1) (13.4) (1.6) 8.6 52.9
Kiwoom Securities 039490.KS 1,217 62,000 37,503 (39.5) Not rated Mar 11.2 11.2 1.8 1.6 13.9 4.0 1.8 (4.8) 3.9
Koh Young Technology 098460.KQ 197 25,100 52,613 109.6 Not rated Dec 12.9 8.8 3.0 2.4 22.3 15.2 1.6 6.8 (2.7)
Kolon 002020.KS 202 18,850 65,172 245.7 Not rated Dec 5.5 n.a. 0.3 n.a. 6.7 (0.4) 0.3 (22.3) (17.7)
Kolon Global 003070.KS 289 3,960 4,904 23.8 Not rated Dec 26.3 4.8 0.2 0.2 0.7 (7.8) 1.3 (7.5) (21.1)
Kolon Industries 120110.KS 1,350 60,700 109,295 80.1 Not rated Dec 8.9 6.5 1.1 1.1 7.5 0.1 1.8 (10.5) (5.5)
Komipharm 041960.KQ 393 8,850 231 (97.4) Not rated Dec 18,507 24,149.7 11.0 9.6 (1.9) (8.9) (3.9) 5.4 0.8
Korea Circuit 007810.KS 288 17,300 20,320 17.5 Not rated Dec 26.9 7.7 1.7 1.6 0.5 (7.2) 5.8 8.5 39.5
Korea District Heating 071320.KS 662 64,400 85,890 33.4 Not rated Dec 47.4 8.8 0.5 0.5 0.9 (7.1) (2.7) 7.3 21.1
Korea Electric Terminal 025540.KS 227 24,600 56,229 128.6 Not rated Dec 9.1 6.1 0.7 0.7 7.3 0.2 3.8 6.7 17.7
Korea Express 000120.KS 1,880 92,800 75,429 (18.7) Not rated Dec 19.1 17.1 0.7 0.7 3.7 (3.8) 2.8 5.5 40.8
Korea Investment 071050.KS 1,821 36,800 33,928 (7.8) Not rated Mar 8.6 8.2 0.8 0.7 7.9 (2.0) 0.1 (3.5) 1.2
Korea Kolmar 024720.KS 350 13,650 9,282 (32.0) Not rated Mar 23.1 19.6 3.1 2.7 9.3 1.7 10.5 28.2 50.3
Korea Petrochem. 006650.KS 388 67,200 187,087 178.4 Not rated Dec 14.6 8.4 0.5 0.5 1.8 (5.6) 1.7 (7.2) (2.9)
Korean Reinsurance 003690.KS 1,211 11,550 14,567 26.1 Not rated Mar 23.8 8.2 1.4 5.6 13.0 3.9 4.5 6.0 0.0
KP Chemical 064420.KS 1,057 12,100 23,092 90.8 Not rated Dec 4.1 10.1 0.9 0.9 7.7 0.9 1.7 (5.5) (6.2)
KPX Chemical 025000.KS 217 50,500 132,844 163.1 Not rated Dec 4.8 3.9 0.8 0.7 11.6 4.4 1.0 0.2 7.7
KT Hitel 036030.KQ 172 5,630 3,133 (44.4) Not rated Dec (68.6) (54.6) 1.1 1.0 2.4 (4.7) (0.7) 5.2 3.1
P/E (x) P/B (x) W term (%)
Calendarized Calendarized Share price performance
* Include the small-cap stocks in HOLT® database with market cap between US$150 mn and US$2 bn. For stocks that are Not Rated, I/B/E/S consensus forecast are used. CFROI® is a
registered trademark in the United States and other countries (excluding the United Kingdom) of Credit Suisse or its subsidiaries or affiliates.
* Companies in bold and italic indicate constituents of Credit Suisse Korea Small Cap Index.
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Valuations of Credit Suisse Korea small-cap watch list* Market CS target/ Potential Credit Year HOLT CFROI
Cap Price HOLT warranted return Suisse end CFROI Spread
Kukdo Chemical 007690.KS 264 51,200 45,733 (10.7) Not rated Dec 12.2 10.6 1.0 0.9 2.2 (5.2) 6.7 13.5 16.1
Kumho Industrial 002990.KS 485 3,205 38,154 1,090.5 Not rated Dec 11.5 12.5 1.3 n.a. 3.9 (2.9) 6.8 (31.4) (49.9)
Kumho Tire 073240.KS 1,698 15,150 5,628 (62.9) Not rated Dec (48.0) (137.7) 3.6 3.6 4.3 (3.5) 0.0 (2.6) 0.7
Kwang Dong Pharm. 009290.KS 198 4,255 9,029 112.2 Not rated Dec 6.2 5.2 0.7 0.7 8.1 0.7 0.9 1.7 10.2
Kyungbang 000050.KS 188 102,000 93,132 (8.7) Not rated Dec (189.1) (153.4) 0.3 0.3 2.1 (6.0) 3.2 (1.0) 5.2
Kyungdong City Gas 012320.KS 216 69,900 172,546 146.8 Not rated Dec 4.9 4.1 0.6 0.5 8.1 0.6 7.0 8.5 21.6
Leeno Industrial 058470.KQ 197 27,600 39,349 42.6 Not rated Dec 11.5 8.7 2.1 2.1 15.9 8.8 (1.1) 12.9 21.6
LG Fashion 093050.KS 804 30,950 41,901 35.4 Not rated Dec 9.4 8.4 1.1 0.9 7.0 (0.6) 0.2 6.7 1.5
LG Hausys 108670.KS 578 72,600 16,291 (77.6) Not rated Dec 15.6 14.2 1.0 1.0 2.1 (5.6) 1.0 6.1 14.5
LG Innotek 011070.KS 1,551 86,600 58,000 (33.0) UNDERPERFORM Dec (12.0) (406.1) 1.4 1.4 3.2 (4.4) (0.5) (3.0) 0.5
LG Int'l. 001120.KS 1,561 45,350 65,891 45.3 Not rated Dec 7.1 9.2 1.3 1.2 13.4 5.8 15.5 13.9 13.7
LG Life Sciences 068870.KS 643 43,650 25,226 (42.2) Not rated Dec 126.6 259.8 3.0 2.7 3.4 (3.9) 7.1 18.6 42.4
LIG Insurance 002550.KS 1,369 25,700 25,551 (0.6) Not rated Mar 9.0 5.7 1.4 5.6 6.1 (3.0) 6.2 8.9 13.5
Lock&Lock 115390.KS 1,111 22,750 13,802 (39.3) Not rated Dec 24.5 17.1 2.2 1.9 6.3 (0.6) (8.1) (12.5) (29.7)
Lotte Chilsung 005300.KS 1,473 1,341,000 1,409,344 5.1 Not rated Dec 23.7 15.4 0.9 0.8 5.0 (2.4) (4.8) (2.0) (0.5)
Lotte Confectionery 004990.KS 2,074 1,643,000 1,628,274 (0.9) Not rated Dec 23.7 17.0 0.9 0.9 3.9 (3.2) 2.8 1.4 9.8
Lotte Midopa 004010.KS 740 12,800 11,850 (7.4) Not rated Dec 17.6 15.9 1.0 0.9 3.8 (3.1) (0.4) (3.0) (1.2)
Lotte Samkang 002270.KS 623 557,000 562,739 1.0 Not rated Dec 17.7 11.0 1.4 1.3 4.1 (3.3) 5.7 11.0 3.3
LS Industrial Sys. 010120.KS 1,798 67,500 59,521 (11.8) Not rated Dec 28.1 15.2 2.6 2.4 7.8 0.6 0.9 0.9 19.7
LS Networks 000680.KS 325 4,740 2,907 (38.7) Not rated Dec 29.4 25.0 0.5 0.4 4.7 (2.8) 6.8 9.7 13.4
Lumens 038060.KQ 266 7,410 13,742 85.5 Not rated Dec 19.9 11.4 2.4 2.2 15.4 8.2 6.6 10.6 38.8
Macquarie KR Infra. Fund 088980.KS 1,942 6,600 3,329 (49.6) Not rated Dec 20.7 18.4 1.3 n.a. 2.9 (6.0) 0.5 6.8 10.0
Maeil Dairy 005990.KQ 340 28,550 22,923 (19.7) Not rated Dec 71.4 15.9 1.3 1.2 0.4 (7.4) 17.2 38.6 52.3
Medipost 078160.KQ 643 101,000 4,801 (95.2) Not rated Dec 342.0 n.a. 10.4 n.a. 4.5 (3.7) (2.6) 5.9 5.1
Mega Study 072870.KQ 367 65,200 85,247 30.7 Not rated Dec 6.0 7.9 1.2 1.0 17.3 10.4 4.7 4.0 (15.9)
Melfas 096640.KQ 330 20,850 24,124 15.7 Not rated Dec 23.5 15.1 2.5 1.9 11.8 4.8 6.4 (0.7) 12.4
Meritz F&M 000060.KS 1,116 13,000 11,379 (12.5) Not rated Mar 9.4 6.7 1.7 6.7 12.9 3.6 1.6 11.1 22.1
Mirae Asset Securities 037620.KS 1,170 31,450 26,178 (16.8) Not rated Mar 9.6 10.4 0.7 2.6 3.0 (5.8) 1.5 (1.4) 0.8
Modetour Network 080160.KQ 258 23,050 15,195 (34.1) Not rated Dec 14.0 15.5 2.6 2.4 15.9 8.8 2.7 22.9 13.5
P/E (x) P/B (x) W term (%)
Calendarized Calendarized Share price performance
* Include the small-cap stocks in HOLT® database with market cap between US$150 mn and US$2 bn. For stocks that are Not Rated, I/B/E/S consensus forecast are used. CFROI® is a
registered trademark in the United States and other countries (excluding the United Kingdom) of Credit Suisse or its subsidiaries or affiliates.
* Companies in bold and italic indicate constituents of Credit Suisse Korea Small Cap Index.
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Valuations of Credit Suisse Korea small-cap watch list* Market CS target/ Potential Credit Year HOLT CFROI
Cap Price HOLT warranted return Suisse end CFROI Spread
Nong Woo Bio 054050.KQ 232 18,250 11,671 (36.0) Not rated Oct 17.5 18.7 2.7 n.a. 4.6 (3.8) 2.5 22.9 34.2
Nongshim Holdings 072710.KS 224 54,500 228,788 319.8 Not rated Dec 6.0 5.0 0.4 0.4 11.6 4.1 2.8 7.1 4.8
OCI Materials 036490.KQ 448 47,850 57,223 19.6 Not rated Dec 7.5 9.9 1.6 1.3 12.8 5.7 3.7 6.1 11.3
Osstem Implant 048260.KQ 320 25,400 15,125 (40.5) Not rated Dec 34.3 20.4 4.8 4.6 10.1 2.6 3.0 28.9 86.8
Ottogi 007310.KS 620 203,000 224,857 10.8 Not rated Dec 11.2 9.9 1.3 1.2 8.2 0.9 3.6 3.6 30.1
Paradise 034230.KQ 1,365 16,900 11,219 (33.6) Not rated Dec 40.3 19.2 2.4 2.3 5.3 (1.9) 9.7 30.0 26.1
Patron 091700.KQ 411 11,950 49,475 314.0 Not rated Dec 14.3 8.2 3.0 2.6 24.1 17.0 8.6 2.1 4.4
Poongsan 103140.KS 840 33,750 29,352 (13.0) Not rated Dec 23.2 11.0 1.0 1.0 1.9 (5.8) 14.2 9.6 26.9
POSCO Chemtech. 003670.KQ 808 154,000 187,733 21.9 Not rated Dec 9.8 10.6 2.8 2.5 14.5 7.5 3.7 10.4 25.7
Posco ICT 022100.KQ 896 7,360 4,022 (45.4) Not rated Dec 35.3 21.5 4.3 3.7 11.4 4.4 9.4 2.9 7.6
Busan City Gas 015350.KS 203 20,800 50,816 144.3 Not rated Dec 6.3 5.6 0.5 0.5 4.8 (2.5) 3.5 8.1 13.4
Pyeong Hwa Automotive 043370.KQ 319 17,100 22,737 33.0 Not rated Dec 8.2 7.2 1.2 1.0 8.4 1.1 1.5 (5.0) (7.1)
S&T Motiv 064960.KS 194 18,800 30,920 64.5 Not rated Dec 6.6 10.2 0.6 0.6 2.6 (4.6) 0.5 (7.2) (4.1)
S&T Dynamics 003570.KS 368 12,750 20,291 59.1 Not rated Dec 7.3 7.4 0.6 0.6 6.6 (0.5) 2.8 (6.3) 6.3
S1 012750.KS 2,176 64,500 44,292 (31.3) Not rated Dec 17.2 17.6 3.0 2.7 12.6 5.7 0.5 9.1 13.2
Sajo Industries 007160.KS 266 60,000 40,106 (33.2) Not rated Dec 5.6 7.3 1.0 1.0 5.9 (2.1) (0.5) 10.1 10.1
Samyang 000070.KS 408 59,600 182,135 205.6 Not rated Dec 2.0 1.8 0.3 0.3 3.6 (3.9) 7.2 3.3 18.7
Calendarized Calendarized Share price performance
P/E (x) P/B (x) W term (%)
* Include the small-cap stocks in HOLT® database with market cap between US$150 mn and US$2 bn. For stocks that are Not Rated, I/B/E/S consensus forecast are used. CFROI® is a
registered trademark in the United States and other countries (excluding the United Kingdom) of Credit Suisse or its subsidiaries or affiliates.
* Companies in bold and italic indicate constituents of Credit Suisse Korea Small Cap Index.
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Valuations of Credit Suisse Korea small-cap watch list* Market CS target/ Potential Credit Year HOLT CFROI
Cap Price HOLT warranted return Suisse end CFROI Spread
Shinsegae Food 031440.KS 276 90,700 131,694 45.2 Not rated Dec 9.9 9.5 1.7 n.a. 12.4 4.4 (2.4) 3.4 23.4
Shinsegae Int'l 031430.KS 547 86,200 68,029 (21.1) Not rated Dec 13.3 12.6 1.7 1.5 8.6 1.6 0.9 17.3 4.9
Silicon Works 108320.KQ 440 30,450 49,338 62.0 Not rated Dec 14.3 9.9 2.2 1.8 15.9 8.9 4.3 2.4 12.2
Silla 004970.KS 238 16,750 31,701 89.3 Not rated Dec 9.0 5.6 0.8 0.7 3.7 (3.6) 0.3 0.9 15.5
Simmetch 036710.KQ 342 12,400 15,000 21.0 Not rated Dec 8.5 7.6 2.1 1.7 12.4 4.9 18.7 13.8 9.7
Sindoricoh 029530.KS 602 67,300 87,203 29.6 Not rated Dec 10.0 8.1 0.8 0.8 4.9 (2.1) 6.2 4.8 20.8
SK Broadband 033630.KQ 953 3,625 3,200 (11.7) NEUTRAL Dec (75.6) 49.0 1.0 1.0 1.7 (6.0) 7.9 21.2 26.1
SK Chemicals 006120.KS 1,140 61,600 83,258 35.2 Not rated Dec 8.2 9.9 1.0 0.9 4.7 (2.8) 2.2 1.5 18.5
SK Comm. 066270.KQ 364 9,450 11,000 16.4 UNDERPERFORM Dec 96.3 (384.4) 1.8 1.9 3.1 (3.9) 2.7 18.6 22.7
SK Gas 018670.KS 657 85,700 61,011 (28.8) Not rated Dec 7.5 5.9 0.8 0.8 5.1 (2.9) 3.0 3.3 38.0
SK Securities 001510.KS 375 1,320 719 (45.5) Not rated Mar (66.0) (39.0) n.a. 0.9 (5.0) (14.9) 6.0 (1.1) 16.3
SKC 011790.KS 1,380 42,900 24,155 (43.7) Not rated Dec 12.2 10.4 1.4 1.3 6.8 (0.6) (1.2) (6.7) (0.8)
Calendarized Calendarized Share price performance
P/E (x) P/B (x) W term (%)
* Include the small-cap stocks in HOLT® database with market cap between US$150 mn and US$2 bn. For stocks that are Not Rated, I/B/E/S consensus forecast are used. CFROI® is a
registered trademark in the United States and other countries (excluding the United Kingdom) of Credit Suisse or its subsidiaries or affiliates.
* Companies in bold and italic indicate constituents of Credit Suisse Korea Small Cap Index
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Valuations of Credit Suisse Korea small-cap watch list* Market CS target/ Potential Credit Year HOLT CFROI
Cap Price HOLT warranted return Suisse end CFROI Spread
STX 011810.KS 455 8,550 (48,154) (663.2) Not rated Dec 8.5 n.a. 0.1 n.a. 2.8 (4.2) 5.8 (8.7) (10.4)
STX Engine 077970.KS 235 9,210 9,975 8.3 Not rated Dec 3.9 8.3 0.4 0.3 4.2 (3.6) 5.0 (13.5) (11.0)
STX Shipbuilding 067250.KS 651 9,190 16,321 77.6 Not rated Dec 10.1 5.0 0.5 0.5 6.8 (1.1) 2.7 (11.6) (10.3)
STX Pan Ocean 028670.KS 673 3,680 (246) (106.7) Not rated Dec (170.9) (3.9) 0.3 0.3 (2.5) (10.3) 4.5 (12.0) (13.9)
Sung Jin Geotec 051310.KS 620 13,400 (848) (106.3) Not rated Dec (11.0) 35.8 5.7 4.3 (6.0) (13.6) 1.9 20.2 33.3
Sung Kwang 014620.KQ 604 23,800 19,135 (19.6) Not rated Dec 29.6 13.3 2.2 2.0 5.2 (1.9) (0.2) 5.5 33.7
Sungwoo Hitech 015750.KQ 577 13,000 18,848 45.0 Not rated Dec 12.7 4.7 1.0 0.9 4.2 (3.4) (4.8) 3.6 (5.5)
TK 023160.KQ 612 28,400 21,994 (22.6) Not rated Dec 24.0 14.5 1.9 1.7 5.3 (1.6) 2.9 6.2 29.1
Taekwang Ind. 003240.KS 898 908,000 4,285,688 372.0 Not rated Dec 2.6 2.1 0.3 0.3 8.7 1.5 3.7 0.9 15.2
Taewoong 044490.KQ 327 22,200 15,087 (32.0) Not rated Dec 23.9 20.8 0.8 0.8 0.7 (6.6) (0.2) 15.0 7.8
Taeyoung E&C 009410.KS 368 5,430 3,105 (42.8) Not rated Dec 10.6 12.9 0.4 0.4 3.0 (5.0) 1.7 8.4 27.3
Taihan Electric Wire 001440.KS 256 1,640 755 (54.0) Not rated Dec (0.4) n.a. 0.3 n.a. (5.0) (12.0) (1.5) (15.5) (41.6)
Tbroad Hanvit Broadcasting 043890.KQ 349 28,000 67,558 141.3 Not rated Dec 5.8 4.1 1.4 1.3 17.3 10.1 0.7 1.6 24.7
Soulbrain 036830.KQ 537 37,300 53,998 44.8 Not rated Dec 77.1 9.1 2.4 2.0 10.8 3.5 (4.2) 7.8 35.1
Tera Semicon 123100.KQ 179 24,900 22,642 (9.1) Not rated Dec 21.7 16.3 5.0 3.7 21.1 14.0 (3.7) (2.0) (21.2)
The Basic House 084870.KS 275 14,850 11,942 (19.6) Not rated Dec (206.8) 14.1 1.9 1.9 2.0 (5.5) (0.7) 17.4 38.1
Tong Yang Life Insurance 082640.KS 965 10,100 10,544 4.4 Not rated Mar 8.6 7.8 0.9 3.5 11.7 2.6 1.4 (2.4) 13.2
Tongyang Securities 003470.KS 448 4,040 5,303 31.3 Not rated Mar 4.5 8.4 0.3 1.2 (1.3) (10.4) 3.3 (0.9) 0.7
Tongyang 001520.KS 182 839 (436) (151.9) Not rated Dec (3.0) (3.9) 0.8 0.8 (1.4) (9.7) (2.1) (2.4) 3.8
Uju Electronics 065680.KQ 196 22,250 21,387 (3.9) Not rated Dec 21.8 12.5 1.5 1.2 3.9 (3.3) 5.0 (4.9) (6.3)
UNID 014830.KS 206 35,300 75,320 113.4 Not rated Dec 4.7 4.0 0.6 0.5 6.1 (1.5) 0.4 (7.0) (5.6)
Unison 018000.KQ 358 9,620 (1,381) (114.4) Not rated Dec (2.4) (10.1) 12.9 12.9 (1.6) (9.5) (0.8) 17.3 37.6
ViroMed 084990.KQ 348 28,350 385 (98.6) Not rated Dec (35.1) (69.7) 7.1 7.1 (15.1) (22.4) 2.7 20.1 31.9
Calendarized Calendarized Share price performance
P/E (x) P/B (x) W term (%)
* Include the small-cap stocks in HOLT® database with market cap between US$150 mn and US$2 bn. For stocks that are Not Rated, I/B/E/S consensus forecast are used. CFROI® is a
registered trademark in the United States and other countries (excluding the United Kingdom) of Credit Suisse or its subsidiaries or affiliates.
* Companies in bold and italic indicate constituents of Credit Suisse Korea Small Cap Index
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Valuations of Credit Suisse Korea small-cap watch list* Market CS target/ Potential Credit Year HOLT CFROI
Cap Price HOLT warranted return Suisse end CFROI Spread
Youl Chon Chemical 008730.KS 186 8,450 10,641 25.9 Not rated Dec 9.5 11.9 0.7 0.7 4.4 (2.8) 0.5 4.1 8.6
Yungjin Pharm. 003520.KS 273 1,730 349 (79.8) Not rated Dec 119.1 94.4 3.4 3.3 1.6 (5.7) 5.2 8.8 12.3
Young Poong 000670.KS 1,701 1,040,000 1,257,550 20.9 Not rated Dec 7.7 6.0 0.9 0.9 0.1 (6.9) 14.9 11.3 17.4
Youngone 111770.KS 1,297 35,800 51,524 43.9 Not rated Dec 12.5 10.6 2.7 2.3 15.5 8.4 9.1 22.8 11.9
Youngone 009970.KS 718 59,300 152,668 157.5 Not rated Dec 6.2 5.6 1.4 1.2 17.5 10.4 (2.6) (1.0) 3.7
Yuhan 000100.KS 1,332 134,500 109,514 (18.6) Not rated Dec 15.1 19.6 1.3 1.2 6.5 (0.4) 0.4 5.1 5.9
Calendarized Calendarized Share price performance
P/E (x) P/B (x) W term (%)
* Include the small-cap stocks in HOLT® database with market cap between US$150 mn and US$2 bn. For stocks that are Not Rated, I/B/E/S consensus forecast are used. CFROI® is a
registered trademark in the United States and other countries (excluding the United Kingdom) of Credit Suisse or its subsidiaries or affiliates.
* Companies in bold and italic indicate constituents of Credit Suisse Korea Small Cap Index
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Korea – Screening Absolute price performance - top & bottom 10 companies Absolute price performance - top & bottom 10 companies Absolute price performance - top & bottom 10 companies
Price 1W return Price 1M return Price 3M return Company RIC (W) (%) Company RIC (W) (%) Company RIC (W) (%)
* For stocks that are not rated, I/B/E/S consensus forecast numbers are used. CFROI® Spread is the difference between CFROI® and market implied discount rate. A larger number indicates
that more value is created by a company
14 September 2012
David & Goliath 65
Malaysia – Company updates SP Setia (SETI.KL, RM3.78, N, TP RM3.60)
Lower earnings forecasts from dilution of proposed placement
■ SP Setia’s 9M FY12 net profit of RM267 mn rose 9% YoY and
was in line with market expectations. 3QFY12 EBIT margins rose
2.7 pp to 20.5% and were close to pre-GFC levels. Property
sales for 10MFY12 reached RM3.3 bn, up 43% YoY, and are on
track to meet the FY12 sales target of RM4 bn.
■ Phase 1 of Battersea is expected to have a GDV of £1 bn and is
mainly residential. Maiden profits from Battersea are only
expected in FY17, as the profits can only be recognised upon
completion.
■ SP Setia’s proposed placement of 15% of share capital (about
300 mn new shares) is expected to be completed by 4Q12 and
will allow them to comply with the required public spread of 25%
(vs 21% currently).
■ We maintain our NEUTRAL rating on SP Setia and have lowered
our FY12-14 earnings by 13-17% mainly due to dilution from the
proposed placement. Our new target price is RM3.60 (lowered
from RM3.95). SP Setia trades at an FY2013 PE of 20x, which is
fairly valued vs the market PE of 14x.
Bbg/RIC 3.78
3.60 (3.95)
2,001.03 (5)
0.9
1.1
Free float (%) 50 Performance 1M 3M 12M
Absolute (%) 8.3 1.1 21.2
Relativ e (%) 9.8 (2.0) 7.9
Year 10/10A 10/11A 10/12E 10/13E 10/14E
258.0 375.9 471.2 601.3 707.9
251.8 328.0 361.1 450.9 516.6
0.15 0.17 0.16 0.19 0.22
n.a. n.a. (17) (16) (13)
n.a. n.a. 0.20 0.23 0.27
42.4 9.3 (6.1) 24.1 14.2
24.8 22.7 24.2 19.5 17.1
4.0 2.8 2.8 3.2 3.7
31.6 19.9 18.3 15.1 13.3
11.9 11.6 8.7 9.3 10.4
26.4 -2.4 22.4 30.9 36.3
— — — — —
— — — — —
4.01 - 3.06
7,563.9/ 2,454.2
NAV per share (RM)
Note1:S P Setia Berhad is a Malaysia-based investment holding company engaged in business as building contractors. Its subsidiaries are engaged in
property development, property investment holding, project management and other different services..Note2:NAV = Book value.
Mkt cap (RM/US$ mn)Daily trad v al - 6m av g (US$ mn)
Amway (MY) AMWA.KL 576 10.80 6.49 (39.9) Not rated Dec 19.7 18.3 9.2 7.9 36.4 30.6 (0.9) 2.9 11.3
Ann Joo ANNJ.KL 239 1.41 1.09 (22.7) Not rated Dec 11.5 12.8 0.7 0.7 1.0 (6.4) (3.4) (7.2) (15.6)
APM Automotive APMA.KL 325 4.97 8.46 70.3 Not rated Dec 8.1 7.7 1.2 1.1 9.1 2.8 (0.6) 0.0 3.5
Atlan ATLA.KL 358 4.35 2.76 (36.6) Not rated Feb n.a. 19.5 n.a. 2.8 4.3 (2.7) (0.7) (2.2) (2.2)
Bandar Raya BRDS.KL 461 2.85 2.33 (18.2) Not rated Dec 15.9 26.1 0.8 0.7 2.6 (4.7) 0.7 8.0 22.3
Berjay a Assets BERJ.KL 329 0.91 1.58 73.6 Not rated Jun n.a. 5.6 n.a. 0.5 3.3 (3.4) 1.1 0.0 9.6
Berjay a BGRO.KL 877 0.63 1.20 91.0 Not rated Apr 6.6 18.4 0.5 1.5 6.5 1.2 (3.1) (7.4) (16.0)
Berjay a Land BLAD.KL 1,282 0.79 1.05 32.6 Not rated Apr 49.3 155.9 0.8 2.4 3.2 (1.9) 0.0 (2.5) (6.0)
Berjaya Sports Toto BSTB.KL 1,903 4.34 4.75 9.4 NEUTRAL Apr 15.4 14.3 10.8 9.1 62.8 58.1 0.9 (1.1) 2.8
Bintulu Port BPOT.KL 928 7.15 7.02 (1.9) Not rated Dec 16.8 18.1 4.3 3.9 5.4 (1.2) 1.7 1.4 2.1
Boustead Heavy Inds. BHIB.KL 161 2.00 0.82 (58.8) Not rated Dec 38.9 37.7 1.2 1.2 2.7 (4.3) (2.4) (16.7) (29.3)
Boustead BOUS.KL 1,692 5.04 5.69 13.0 Not rated Dec 8.5 12.4 1.2 1.1 4.9 (1.3) (3.6) (6.0) (2.7)
Bursa Malaysia BMYS.KL 1,055 6.11 8.00 30.9 OUTPERFORM Dec 22.2 19.0 3.8 3.4 12.9 8.1 (1.8) (3.8) 0.3
Cahya Mata CMSM.KL 359 3.34 5.51 64.8 Not rated Dec 9.2 9.5 0.8 0.8 4.7 (2.6) 3.1 10.6 34.7
Capitamalls Malaysia CAMA.KL 999 1.74 1.75 0.6 OUTPERFORM Dec 23.6 21.8 1.3 1.5 6.0 (0.1) 3.0 (1.7) 6.7
Carlsberg (MY) CBMS.KL 1,194 11.94 6.39 (46.5) Not rated Dec 22.0 20.4 5.8 10.1 20.0 14.6 (0.7) (3.2) 8.0
CB Industrial Product CBIP.KL 235 2.66 4.07 53.1 Not rated Dec 6.8 8.4 2.8 1.5 21.9 15.1 (5.0) 0.4 7.3
Chemical Malaysia CLMS.KL 181 1.38 0.77 (44.1) Not rated Dec 25.1 41.6 0.7 0.7 2.1 (5.9) 2.2 (8.0) (6.8)
Chin Teck Plantations CTPB.KL 268 9.04 12.22 35.2 Not rated Aug 10.7 15.4 1.4 2.0 11.5 5.2 0.2 0.6 3.4
Coastal Contracts CTAL.KL 279 1.78 3.73 109.3 Not rated Dec 4.5 6.1 1.1 0.9 20.9 14.8 (0.6) (3.3) (2.7)
CSC Steel CSTH.KL 147 1.19 2.22 86.6 Not rated Dec 15.0 12.5 0.6 0.6 0.8 (5.9) (0.8) 2.6 (11.2)
Dayang Enterprise DEHB.KL 357 2.00 1.60 (20.1) Not rated Dec 13.0 11.5 2.1 1.6 9.0 2.1 0.0 0.0 0.0
Dialog DIAL.KL 1,797 2.30 1.13 (50.7) Not rated Jun 32.8 31.6 8.6 5.8 14.9 10.1 (2.1) (5.3) (3.4)
DRB-Hicom DRBM.KL 1,487 2.37 3.28 38.5 Not rated Mar 4.2 6.9 0.8 0.7 2.4 (4.1) (2.1) (7.8) (2.9)
Dutch Lady Milk DBMS.KL 878 42.24 44.45 5.2 Not rated Dec 25.0 21.3 10.4 11.1 22.7 16.9 (0.3) 3.5 26.0
Eastern & Oriental ENOB.KL 594 1.61 1.42 (12.0) Not rated Mar 17.5 14.4 1.2 1.1 2.6 (4.2) 2.5 4.5 15.0
ECM Libra Financial ECMA.KL 233 0.87 0.56 (34.8) Not rated Jan n.a. 23.7 n.a. 0.7 0.8 (8.3) 1.2 0.0 0.6
CalendarizedCalendarized Share price performance
RM term (%)P/B (x)P/E (x)
* Include the small-cap stocks in HOLT® database with market cap between US$150 mn and US$2 bn. For stocks that are Not Rated, I/B/E/S consensus forecast are used. CFROI® is a
registered trademark in the United States and other countries (excluding the United Kingdom) of Credit Suisse or its subsidiaries or affiliates.
* Companies in bold and italic indicate constituents of Credit Suisse Malaysia Small Cap Index
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Valuations of Credit Suisse Malaysia small-cap watch list* Market CS target/ Potential Credit Year HOLT CFROI
Cap Price HOLT warranted return Suisse end CFROI Spread
Jobstreet JOBT.KL 244 2.34 2.27 (2.9) Not rated Dec 17.2 16.6 4.0 3.3 25.2 18.8 4.0 6.4 1.7
JT Int'l. JTIN.KL 566 6.67 4.97 (25.4) Not rated Dec 14.2 13.6 3.8 4.5 13.0 7.2 (0.1) (4.7) (0.1)
Keck Seng (MY) KSMS.KL 459 3.91 5.99 53.2 Not rated Dec 18.6 15.1 0.8 0.8 2.4 (3.4) (1.0) (3.9) 1.3
KFC (MY) KFCK.KL 994 3.86 2.56 (33.6) Not rated Dec 21.2 21.0 2.8 2.5 5.4 (0.6) 1.0 1.6 0.8
Kian Joo Can KJCS.KL 346 2.40 3.41 42.1 Not rated Dec 10.2 9.4 1.2 1.1 4.4 (2.2) (6.3) (7.7) 21.2
Kim Loong Resources KIML.KL 246 2.46 4.35 77.0 Not rated Jan 8.1 8.4 1.5 1.4 13.9 7.4 (0.4) 1.7 (0.8)
Kinsteel KSTE.KL 133 0.39 0.08 (79.2) Not rated Dec (2.9) 10.0 0.6 0.6 (11.0) (18.8) (1.3) (3.7) (10.3)
KLCC Property KCCP.KL 1,656 5.46 8.13 48.9 Not rated Dec 5.8 20.2 0.8 0.8 4.1 (1.9) (2.5) 4.8 43.3
Share price performance
RM term (%)
Calendarized Calendarized
P/E (x) P/B (x)
* Include the small-cap stocks in HOLT® database with market cap between US$150 mn and US$2 bn. For stocks that are Not Rated, I/B/E/S consensus forecast are used. CFROI® is a
registered trademark in the United States and other countries (excluding the United Kingdom) of Credit Suisse or its subsidiaries or affiliates.
* Companies in bold and italic indicate constituents of Credit Suisse Malaysia Small Cap Index
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Valuations of Credit Suisse Malaysia small-cap watch list* Market CS target/ Potential Credit Year HOLT CFROI
Cap Price HOLT warranted return Suisse end CFROI Spread
Oriental Holdings OTLS.KL 1,577 7.83 10.13 29.3 Not rated Dec 18.0 17.6 1.1 1.0 3.9 (1.5) (0.3) (1.4) 17.2
OSK OSKH.KL 451 1.44 1.07 (25.4) Not rated Dec 27.0 15.2 1.0 0.9 4.0 (4.8) (1.4) (2.7) 5.1
Padiberas Nasional PNAS.KL 504 3.30 2.88 (12.8) Not rated Dec 9.4 7.7 1.4 1.3 5.6 (1.6) 0.3 (9.1) 5.4
Padini PDNI.KL 449 2.10 1.56 (25.5) Not rated Jun 18.3 16.0 4.9 4.4 11.5 4.4 1.0 (4.1) 20.7
P/E (x) P/B (x) RM term (%)
Calendarized Calendarized Share price performance
* Include the small-cap stocks in HOLT® database with market cap between US$150 mn and US$2 bn. For stocks that are Not Rated, I/B/E/S consensus forecast are used. CFROI® is a
registered trademark in the United States and other countries (excluding the United Kingdom) of Credit Suisse or its subsidiaries or affiliates.
* Companies in bold and italic indicate constituents of Credit Suisse Malaysia Small Cap Index
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Valuations of Credit Suisse Malaysia small-cap watch list* Market CS target/ Potential Credit Year HOLT CFROI
Cap Price HOLT warranted return Suisse end CFROI Spread
Star Publications (MY) STAR.KL 770 3.21 2.91 (9.2) Not rated Dec 12.7 12.8 2.3 2.1 9.2 3.6 0.9 1.6 2.2
Starhill REIT SRHL.KL 439 1.02 1.47 44.5 Not rated Jun 15.4 11.4 0.9 0.9 4.5 (1.0) (1.9) (4.7) 7.4
Sunway SWAY.KL 944 2.25 2.57 14.3 Not rated Dec 7.8 8.5 1.0 0.9 4.9 (1.6) 0.4 1.8 (6.3)
Sunw ay REIT SUNW.KL 1,288 1.47 1.42 (3.4) NEUTRAL Jun 22.1 20.7 1.4 1.3 6.4 0.3 2.8 (3.9) 12.2
Supermax SUPM.KL 444 2.01 1.85 (8.2) Not rated Dec 13.1 10.6 1.8 1.6 5.9 (0.6) (0.5) (7.8) 8.6
Ta Ann TAAN.KL 483 4.01 6.08 51.7 OUTPERFORM Dec 9.6 9.0 1.6 1.4 12.4 6.1 (1.5) (12.8) (11.2)
TA Enterprise TAES.KL 286 0.52 0.73 41.1 Not rated Jan 9.0 8.2 0.6 0.5 1.4 (5.4) 0.0 (1.9) (3.7)
Tan Chong TNCS.KL 1,003 4.60 3.10 (32.6) UNDERPERFORM Dec 14.1 13.5 1.7 1.5 6.2 0.6 3.8 4.5 1.1
Tasek TKCS.KL 411 10.24 11.13 8.7 Not rated Dec 12.3 13.2 1.3 1.3 3.1 (3.1) (9.2) 2.6 19.2
TDM TDMS.KL 294 3.68 10.45 183.9 Not rated Dec 5.5 4.6 0.8 0.8 8.6 2.1 1.1 (5.2) (3.7)
Tebrau Teguh TEBA.KL 142 0.66 0.65 (1.2) Not rated Dec 167.9 165.6 0.9 0.9 0.3 (6.4) 0.0 (8.4) (13.2)
TH Plantations THPB.KL 404 2.40 3.53 47.1 Not rated Dec 9.8 12.5 2.0 2.0 4.2 (2.3) 2.1 (5.1) 2.6
Share price performance
P/E (x) P/B (x) RM term (%)
Calendarized Calendarized
* Include the small-cap stocks in HOLT® database with market cap between US$150 mn and US$2 bn. For stocks that are Not Rated, I/B/E/S consensus forecast are used. CFROI® is a
registered trademark in the United States and other countries (excluding the United Kingdom) of Credit Suisse or its subsidiaries or affiliates.
* Companies in bold and italic indicate constituents of Credit Suisse Malaysia Small Cap Index
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Valuations of Credit Suisse Malaysia small-cap watch list* Market CS target/ Potential Credit Year HOLT CFROI
Cap Price HOLT warranted return Suisse end CFROI Spread
Time Dotcom TCOM.KL 609 3.28 5.70 73.7 Not rated Dec 14.1 14.2 0.9 0.8 3.4 (2.4) (2.1) (2.1) (1.5)
Top Glove TPGC.KL 1,033 5.14 4.53 (11.9) Not rated Aug 23.1 16.4 2.8 3.9 5.8 0.7 (1.2) (4.8) 10.8
Tradewinds TWMM.KL 722 7.50 19.72 162.9 Not rated Dec 4.7 4.0 0.9 0.8 7.6 0.9 (1.3) (10.7) (16.4)
Tradewinds Corp. TWSB.KL 305 0.85 1.08 27.4 Not rated Dec 16.2 17.7 0.4 0.5 0.5 (6.9) 14.9 7.6 21.4
Tradewinds Plantation TWSP.KL 770 4.48 6.62 47.7 Not rated Dec 7.1 9.8 1.3 1.2 6.9 0.5 0.4 0.2 (8.6)
TSH Resources TSHR.KL 630 2.31 1.57 (31.8) Not rated Dec 16.0 17.2 2.2 2.1 5.9 (0.9) (0.9) (11.8) (4.5)
Uchi Techs. UCHI.KL 139 1.14 1.13 (0.5) Not rated Dec 8.6 9.7 2.2 2.3 20.8 14.0 1.8 (3.4) (8.1)
Unisem UNSM.KL 223 1.02 1.28 25.3 Not rated Dec 34.8 (340.0) 0.6 0.6 (0.2) (7.0) 0.0 (11.3) (23.3)
United Malacca UMRS.KL 498 7.53 7.97 5.9 Not rated Apr 18.0 16.6 1.5 1.4 5.8 (0.1) (1.7) (4.7) 3.6
United Plantations UTPS.KL 1,785 26.42 28.33 7.2 Not rated Dec 14.7 15.2 2.8 2.6 10.6 5.7 0.5 (3.1) 6.4
Wah Seong WAHE.KL 440 1.75 1.40 (20.2) Not rated Dec 12.1 13.5 1.3 1.2 5.8 (0.9) (3.3) (4.9) (4.9)
WCT WCTE.KL 695 2.60 1.89 (27.3) Not rated Dec 12.9 11.9 1.4 1.3 3.4 (3.0) 2.4 2.0 11.1
Wing Tai Malay sia WITM.KL 172 1.63 3.21 96.9 Not rated Jun n.a. 4.9 n.a. 0.6 6.2 (1.8) (3.0) (11.4) (11.9)
WTK WTKH.KL 148 1.04 2.45 135.5 Not rated Dec 6.6 10.1 0.4 0.4 2.4 (5.0) (3.7) (11.9) (13.3)
Yeo Hiap Seng (MY) YHMS.KL 174 3.49 3.15 (9.8) Not rated Dec 21.3 19.5 2.0 1.9 2.8 (5.1) 0.9 2.3 (0.6)
YTL E-Solutions YTLE.KL 324 0.74 0.44 (39.9) Not rated Jun n.a. 30.8 n.a. 5.3 18.9 13.0 0.0 (0.7) 1.4
YTL Land & Development YTLL.KL 262 0.96 0.57 (40.4) Not rated Jun 41.9 35.6 1.4 1.4 1.3 (5.0) (3.0) (7.3) (0.5)
Zhulian ZHCO.KL 354 2.37 2.00 (15.8) Not rated Nov 11.3 10.1 2.8 2.8 15.4 9.0 0.4 (3.7) 18.5
P/E (x) P/B (x) RM term (%)
Calendarized Calendarized Share price performance
* Include the small-cap stocks in HOLT® database with market cap between US$150 mn and US$2 bn. For stocks that are Not Rated, I/B/E/S consensus forecast are used. CFROI® is a
registered trademark in the United States and other countries (excluding the United Kingdom) of Credit Suisse or its subsidiaries or affiliates.
* Companies in bold and italic indicate constituents of Credit Suisse Malaysia Small Cap Index.
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Malaysia – Screening Absolute price performance - top & bottom 10 companies Absolute price performance - top & bottom 10 companies Absolute price performance - top & bottom 10 companies
Price 1W return Price 1M return Price 3M return Company RIC (RM) (%) Company RIC (RM) (%) Company RIC (RM) (%)
* For stocks that are not rated, I/B/E/S consensus forecast numbers are used. CFROI® Spread is the difference between CFROI® and market implied discount rate. A larger number indicates
that more value is created by a company
14 September 2012
David & Goliath 72
Singapore – Company updates CDL Hospitality Trusts (CDLT.SI, S$1.98, O, TP S$2.32)
Most asked question: 'FEHT or CDLHT?'; industry 7M12 REVPAR up strongly,
by 9.4% YoY
■ 7M12 REVPAR rose strongly YoY (+9.4%) to S$226 led by
upscale and mid-tier hotels versus industry’s expectation of 5–
10% for 2012 (CS forecasts 6.5% for 2012 REVPAR growth).
■ During our recent marketing trip, investors often asked “Far East
HT or CDLHT?” While both portfolios appear similar, investors
were mainly concerned about CDLHT’s overseas exposure and
whether it is less of a proxy to Singapore hotels because its
revenues are based on a lower percentage of REVPAR and
gross operating profits, compared to FEHT.
■ Figure 3 shows that despite the lower percentage used in the
calculation of revenue, CDLHT’s earnings are still highly
correlated to the SG hotels sector. Also, 90% of the Australia
income is from fixed components, mitigating volatility risk.
■ We maintain OUTPERFORM rating on CDLHT with 6.1% yield.
DPU growth is supported by strong sector fundamentals:
favourable demand-supply outlook (STB forecasting 6.6% 4-year
visitor arrivals CAGR versus 3.8% 3-year hotel supply CAGR of
3.8%), against the backdrop of high system occupancies, which
is supportive of higher room rates.
Bbg/RIC 1.97
2.32 (2.32)
967.53 18
1.6
2.5
Free float (%) 59.4 Performance 1M 3M 12M
Absolute (%) 0.3 4.2 17.6
Relativ e (%) 1.8 (4.5) 7.1
Year 12/10A 12/11A 12/12E 12/13E 12/14E
115.1 135.2 144.3 149.8 153.8
103.5 120.7 132.7 137.9 141.6
84.5 103.1 116.7 122.0 125.7
100.6 113.6 125.5 131.0 134.9
0.09 0.11 0.12 0.13 0.13
n.a. n.a. 0.12 0.12 0.13
19.7 14.0 12.6 4.0 2.6
20.9 18.3 16.3 15.7 15.3
0.1 0.1 0.1 0.1 0.1
n.a. n.a. 0.0 0.0 0.0
5.2 5.6 6.1 6.4 6.5
1.3 1.2 1.2 1.2 1.1
6.4 6.9 7.4 7.5 7.6
20.4 25.2 24.3 23.5 22.7
2.08 - 1.36
1,906.0/ 1,550.9Mkt cap (S$/US$ mn)Daily trad v al - 6m av g (US$ mn)
Major shareholders M&C (40.6%)
Daily trad v ol - 6m av g (mn)
Shares outstanding (mn)
Price (11 Sep 12 , S$)
TP (prev. TP S$)
Est. pot. % chg. to TP
52-w k range (S$)
Net property income (S$ mn)
CDREIT SP / CDLT.SI
O (O)
Debt/Asset (%)
Note1:CDLHT is a hospitality REIT with hotels in Singapore, Australia and New Zealand..
* Include the small-cap stocks in HOLT® database with market cap between US$150 mn and US$2 bn. For stocks that are Not Rated, I/B/E/S consensus forecast are used. CFROI® is a
registered trademark in the United States and other countries (excluding the United Kingdom) of Credit Suisse or its subsidiaries or affiliates.
* Companies in bold and italic indicate constituents of Credit Suisse Singapore Small Cap Index
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Valuations of Credit Suisse Singapore small-cap watch list* Market CS target/ Potential Credit Year HOLT CFROI
Cap Price HOLT warranted return Suisse end CFROI Spread
G.K. Goh GKHS.SI 189 0.74 0.70 (5.3) Not rated Dec 4.1 36.9 0.6 0.7 (1.2) (10.3) 2.1 1.4 6.5
Gallant Venture GLVT.SI 569 0.29 0.38 30.5 Not rated Dec 85.3 87.5 0.6 0.6 0.3 (6.6) 0.0 1.8 7.4
GMG Global GMGG.SI 774 0.12 0.14 14.3 Not rated Dec 9.3 13.8 1.2 1.1 8.0 1.2 2.5 5.1 7.8
Goodpack GPAK.SI 743 1.84 1.65 (10.0) Not rated Jun 17.7 16.6 2.9 2.7 10.6 3.6 2.5 4.6 7.3
GP Industries GPEI.SI 170 0.40 0.60 48.8 Not rated Mar n.a. 14.0 n.a. 0.6 0.9 (6.7) 1.3 1.3 1.3
Guocoland GUOC.SI 1,704 1.77 1.57 (11.3) Not rated Jun 13.8 8.6 0.8 0.9 1.3 (4.9) 4.7 6.0 11.7
Guthrie GTS GTGS.SI 530 0.61 0.50 (17.3) Not rated Dec 2.8 12.0 0.7 0.6 3.1 (4.0) 3.4 3.4 12.0
Haw Par HPAR.SI 1,055 6.55 14.32 118.7 Not rated Dec 16.1 12.8 0.7 0.6 4.2 (2.7) 2.0 5.3 11.2
Hiap Hoe HIAP.SI 235 0.61 0.65 7.1 Not rated Dec 6.1 4.8 1.1 1.0 6.0 (1.6) 5.2 13.0 18.4
Hi-P HIPI.SI 718 1.00 0.91 (8.2) Not rated Dec 18.8 14.2 1.4 1.4 4.0 (3.1) 9.3 16.4 32.7
Ho Bee HBEE.SI 849 1.42 1.75 23.5 Not rated Dec 5.1 8.4 0.6 0.6 5.1 (1.7) 9.7 13.7 26.3
Hong Leong Asia HLAA.SI 517 1.70 2.64 55.3 Not rated Dec 7.6 11.0 0.8 0.7 7.0 0.1 2.4 0.3 7.6
Hong Leong Finance HLSF.SI 879 2.45 2.20 (10.2) UNDERPERFORM Dec 11.2 17.0 0.7 0.7 1.5 (7.2) 2.5 1.2 8.4
Hotel Grand Central HGCS.SI 371 0.80 2.04 154.8 Not rated Dec 15.3 5.6 0.6 0.6 7.8 0.4 0.0 1.9 5.3
Hotel Properties HPPS.SI 1,182 2.87 2.74 (4.4) Not rated Dec 20.6 19.3 1.0 0.9 2.2 (4.5) 10.8 23.7 49.9
Hour Glass HRGS.SI 268 1.40 2.98 113.0 Not rated Mar n.a. 5.4 n.a. 1.0 13.1 5.5 0.0 (4.4) 8.5
P/E (x) P/B (x)
Share price performance
S$ term (%)
Calendarized Calendarized
* Include the small-cap stocks in HOLT® database with market cap between US$150 mn and US$2 bn. For stocks that are Not Rated, I/B/E/S consensus forecast are used. CFROI® is a
registered trademark in the United States and other countries (excluding the United Kingdom) of Credit Suisse or its subsidiaries or affiliates.
* Companies in bold and italic indicate constituents of Credit Suisse Singapore Small Cap Index
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Valuations of Credit Suisse Singapore small-cap watch list* Market CS target/ Potential Credit Year HOLT CFROI
Cap Price HOLT warranted return Suisse end CFROI Spread
NSL NATS.SI 421 1.39 2.39 72.8 Not rated Dec 5.2 5.0 0.9 0.9 1.9 (5.4) 0.7 3.0 7.4
Orchard Parade FARE.SI 699 2.28 4.43 94.2 Not rated Dec 6.6 6.3 0.8 0.7 7.5 0.4 0.0 (1.7) 24.3
OSIM OSIL.SI 826 1.35 1.85 37.0 OUTPERFORM Dec 13.3 12.2 6.0 4.8 15.1 8.2 3.1 3.1 20.0
Otto Marine OTTO.SI 198 0.09 -0.05 (152.8) Not rated Dec (2.7) 7.8 0.5 0.4 (7.8) (15.0) (1.1) 0.0 (1.1)
Overseas Union Enterprise OVES.SI 2,084 2.61 2.85 9.3 OUTPERFORM Dec 28.5 19.7 0.8 0.8 2.0 (4.3) 6.5 4.4 26.1
PAC Andes PACF.SI 577 0.15 0.27 83.6 Not rated Sep 5.2 5.9 0.4 0.5 6.9 0.1 0.0 (0.7) 0.0
P/E (x) P/B (x) S$ term (%)
Calendarized Calendarized Share price performance
* Include the small-cap stocks in HOLT® database with market cap between US$150 mn and US$2 bn. For stocks that are Not Rated, I/B/E/S consensus forecast are used. CFROI® is a
registered trademark in the United States and other countries (excluding the United Kingdom) of Credit Suisse or its subsidiaries or affiliates.
* Companies in bold and italic indicate constituents of Credit Suisse Singapore Small Cap Index
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Valuations of Credit Suisse Singapore small-cap watch list* Market CS target/ Potential Credit Year HOLT CFROI
Cap Price HOLT warranted return Suisse end CFROI Spread
STX Pan Ocean STXPx.SI 707 4.22 6.48 53.6 Not rated Dec (179.2) (2.2) 0.3 0.3 (2.5) (8.8) 6.0 (10.2) (11.3)
Super Group SPGP.SI 916 2.02 1.34 (33.8) Not rated Dec 18.2 17.0 3.1 2.9 9.7 2.6 (1.5) (6.0) (6.0)
Swiber SWBR.SI 311 0.63 0.34 (46.0) Not rated Dec 8.0 8.2 0.7 0.6 2.6 (4.6) 5.9 6.8 9.6
Calendarized Calendarized Share price performance
P/E (x) P/B (x) S$ term (%)
* Include the small-cap stocks in HOLT® database with market cap between US$150 mn and US$2 bn. For stocks that are Not Rated, I/B/E/S consensus forecast are used. CFROI® is a
registered trademark in the United States and other countries (excluding the United Kingdom) of Credit Suisse or its subsidiaries or affiliates.
* Companies in bold and italic indicate constituents of Credit Suisse Singapore Small Cap Index
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Valuations of Credit Suisse Singapore small-cap watch list* Market CS target/ Potential Credit Year HOLT CFROI
Cap Price HOLT warranted return Suisse end CFROI Spread
* Include the small-cap stocks in HOLT® database with market cap between US$150 mn and US$2 bn. For stocks that are Not Rated, I/B/E/S consensus forecast are used. CFROI® is a
registered trademark in the United States and other countries (excluding the United Kingdom) of Credit Suisse or its subsidiaries or affiliates.
* Companies in bold and italic indicate constituents of Credit Suisse Singapore Small Cap Index
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Singapore – Screening Absolute price performance - top & bottom 10 companies Absolute price performance - top & bottom 10 companies Absolute price performance - top & bottom 10 companies
Price 1W return Price 1M return Price 3M return Company RIC (S$) (%) Company RIC (S$) (%) Company RIC (S$) (%)
Winners Winners Winners Raffles Education RLSE.SI 0.43 39.3 Sakari Resources SAKR.SI 1.87 28.1 Hotel Properties HPPS.SI 2.87 49.9 Singapore Land SLND.SI 6.86 13.6 Tat Hong TAT.SI 1.30 25.0 Ezion EZHL.SI 1.26 49.1 Ezion EZHL.SI 1.26 13.5 Midas MIDA.SI 0.41 24.6 Sakari Resources SAKR.SI 1.87 47.2 Midas MIDA.SI 0.41 12.5 Hotel Properties HPPS.SI 2.87 23.7 Midas MIDA.SI 0.41 42.1 SC Global SCGO.SI 1.10 11.7 Ezion EZHL.SI 1.26 22.9 Fortune REIT FORT.SI 5.82 33.5 STATS ChipPAC STTS.SI 0.36 10.9 Wing Tai WTHS.SI 1.65 18.7 Hi-P HIPI.SI 1.00 32.7 Hotel Properties HPPS.SI 2.87 10.8 Hi-P HIPI.SI 1.00 16.4 Tat Hong TAT.SI 1.30 32.7 Ho Bee HBEE.SI 1.42 9.7 Ezra EZRA.SI 1.15 15.0 K1 Ventures KMAR.SI 0.13 32.7 CSE Global CSES.SI 0.92 9.6 Raffles Education RLSE.SI 0.43 14.9 Yeo Hiap Seng YHSS.SI 1.87 31.7 Ying Li Int'l Real Estate YING.SI 0.35 9.5 Chip Eng Seng CESE.SI 0.47 14.6 Wing Tai WTHS.SI 1.65 30.4
Losers Losers Losers China Animal Healthcare CAHC.SI 0.25 (5.8) Yeo Hiap Seng YHSS.SI 1.87 (18.7) KS Energy KSTL.SI 0.74 (21.7) Chemoil Energy CHEL.SI 0.35 (5.4) Sarin Techs. SARI.SI 0.94 (14.2) Sarin Techs. SARI.SI 0.94 (21.0) Manhattan Resources MANH.SI 0.62 (3.1) Elec & Eltek EELT.SI 2.32 (10.4) Manhattan Resources MANH.SI 0.62 (16.9) Raffles Medical RAFG.SI 2.34 (2.5) STX Pan Ocean STXPx.SI 4.22 (10.2) United Fiber System UFSL.SI 0.05 (14.3) Li Heng Chemical Fibre LHCF.SI 0.14 (2.1) Super Group SPGP.SI 2.02 (6.0) Elec & Eltek EELT.SI 2.32 (14.1) Straits Trading STCM.SI 2.95 (2.0) China Animal Healthcare CAHC.SI 0.25 (5.8) China Fishery CNFG.SI 0.76 (13.6) Jaya JAYA.SI 0.55 (1.8) Manhattan Resources MANH.SI 0.62 (5.4) Sinarmas Land SINA.SI 0.27 (11.5) Parkway Life REIT PWLR.SI 1.95 (1.8) China Fishery CNFG.SI 0.76 (5.0) STX Pan Ocean STXPx.SI 4.22 (11.3) China XLX Fertiliser CXLX.SI 0.30 (1.6) Sound Global SOGL.SI 0.57 (5.0) China Animal Healthcare CAHC.SI 0.25 (10.9) Ascott Residence Trust ASRT.SI 1.22 (1.6) China XLX Fertiliser CXLX.SI 0.30 (4.8) Creative Technology CREA.SI 3.10 (10.7)
Price-to-earnings - most & least expensive 10 companies Price-to-book - most & least expensive 10 companies CFROI® Spread - top & bottom 10 companies
Price 12 P/E Price 12 P/B Price CFROI® Spread Company RIC (S$) (x) Company RIC (S$) (x) Company RIC (S$) (%)
Winners Winners Winners Mermaid Maritime MMPC.SI 0.28 1.1 Mermaid Maritime MMPC.SI 0.28 0.1 Silverlake Axis SLVX.SI 0.43 62.1 Chip Eng Seng CESE.SI 0.47 2.0 STX Pan Ocean STXPx.SI 4.22 0.3 China Merchants CAEP.SI 0.73 37.5 Low Keng Huat (SG) LKH.SI 0.47 3.2 Li Heng Chemical Fibre LHCF.SI 0.14 0.3 ARA Asset Management ARAM.SI 1.51 29.9 China Minzhong Food CMFC.SI 0.75 3.4 China New Town Dev. CNTW.SI 0.05 0.4 Sarin Techs. SARI.SI 0.94 23.7 Lian Beng LIBG.SI 0.42 4.1 Otto Marine OTTO.SI 0.09 0.4 Aspial ASPA.SI 0.41 21.1 Hiap Hoe HIAP.SI 0.61 4.8 PAC Andes PACF.SI 0.15 0.5 STX OSV STXO.SI 1.65 14.8 NSL NATS.SI 1.39 5.0 DMX Technologies DMXT.SI 0.22 0.5 Biosensors BIOS.SI 1.23 12.5 China Fishery CNFG.SI 0.76 5.4 United Engineers UTES.SI 2.39 0.5 Sakari Resources SAKR.SI 1.87 11.6 Hour Glass HRGS.SI 1.40 5.4 Gallant Venture GLVT.SI 0.29 0.6 Bumitama Agri BUMI.SI 1.12 9.0 Yongnam YNAM.SI 0.24 5.6 Hotel Grand Central HGCS.SI 0.80 0.6 OSIM OSIL.SI 1.35 8.2 Losers Losers Losers Banyan Tree BANY.SI 0.58 116.0 Silverlake Axis SLVX.SI 0.43 9.5 United Fiber System UFSL.SI 0.05 (23.0) People's Food PPFH.SI 0.64 88.0 M1 MONE.SI 2.73 7.1 Manhattan Resources MANH.SI 0.62 (18.9) Gallant Venture GLVT.SI 0.29 87.5 ARA Asset Management ARAM.SI 1.51 5.1 Mermaid Maritime MMPC.SI 0.28 (16.4) Straits Trading STCM.SI 2.95 57.4 Cerebos CERE.SI 6.55 5.0 KS Energy KSTL.SI 0.74 (15.5) Hwa Hong HWHS.SI 0.36 51.4 OSIM OSIL.SI 1.35 4.8 Otto Marine OTTO.SI 0.09 (15.0) G.K. Goh GKHS.SI 0.74 36.9 Sheng Siong SHEN.SI 0.48 4.1 Creative Technology CREA.SI 3.10 (14.9) Yeo Hiap Seng YHSS.SI 1.87 30.0 Sarin Techs. SARI.SI 0.94 3.8 K1 Ventures KMAR.SI 0.13 (14.8) Frasers Commercial Trust FRCR.SI 1.16 27.8 Singapore Post SPOS.SI 1.09 3.5 Tiger Airways TAHL.SI 0.74 (14.6) K-REIT KASA.SI 1.14 23.9 Raffles Medical RAFG.SI 2.34 3.4 China New Town Dev. CNTW.SI 0.05 (10.5) Hyflux HYFL.SI 1.40 23.4 Bumitama Agri BUMI.SI 1.12 3.3 G.K. Goh GKHS.SI 0.74 (10.3)
* For stocks that are not rated, I/B/E/S consensus forecast numbers are used. CFROI® Spread is the difference between CFROI® and market implied discount rate. A larger number indicates
that more value is created by a company
14 September 2012
David & Goliath 79
Taiwan – Company updates E Ink (8069.TWO, NT$32.40, N [V], TP NT$35.00) Hiwin (2049.TW, NT$212.00, U [V], TP NT$195.00)
ePaper shipment recovery to drive the year-end rally
■ E Ink’s August sales of NT$2.55 bn were up 41% MoM, driven by
EPD shipment recovery. We believe the strong EPD monthly
sales momentum should continue into October. We now estimate
3Q12 sales of NT$7.7 bn, up 73% QoQ from the low base in
2Q12.
■ EPD is the key to drive 2H12 recovery and gross margin should
also improve on a greater scale of EPD shipments. However,
2012 EPD GM will still be lower than 2011 30%+ given product
mix and structure change (touch is a pass-through cost). We
estimate EPD to account for 46% of sales in 2012 vs 68% in
2011.
■ We note there are positive reviews for Amazon’s new tablets but
think there is limited upside for E Ink’s FFS shipments given
lower market share vs in 2011. However, E Ink is in talks with
other panel-makers for potential licensing or partnerships which
could bring more royalty income and help it to gain shares longer
term.
■ We raise 2012E earnings on better 3Q and raise our TP to
NT$35, based on 1.5x 12M P/B. Maintain our NEUTRAL rating
but think the stock will rebound on better revenue momentum.
Inventory remains an issue
■ We remain concerned about Hiwin’s high inventory. Its 2Q12
finished goods inventory was up 370% YoY, 38% of total
inventory vs 12% in 1Q. Our checks with equipment-makers and
distributors suggest channel inventory is still at a relatively high
level, and lead time has been shortened to 2-4 weeks from 3-4
months in 2011.
■ We also learned ASP has dropped 10%+ YTD, and the high
channel inventory could potentially trigger more ASP cuts. Some
distributors also said channel inventory is still piling up given
upstream continues to stuff the channel to maintain top-lines.
■ Based on preliminary August export data, Taiwan’s linear motion
exports remain challenging as they dropped 40% YoY to US$39
mn. Exports to China (~50% of total) remain weak with a 34%
YoY decline in August, while Germany and US saw sequential
growth.
■ We remain UNDERPERFORM with a NT$195 TP on 15x 12M
P/E. We agree Hiwin has good technology but continue to see
high inventory, ASP cuts, solar investment and low dividend as
key concerns. Trading at 18x 2012E P/E (vs 11-22x since 2011),
we do not see a re-rating catalyst absent a macro recovery.
Bbg/RIC 31.70
35.00 (30.00)
1,080.46 10
4.1
4.8
Free float (%) 71.2 Performance 1M 3M 12M
Absolute (%) (3.9) 9.9 (55.0)
Relativ e (%) (3.7) 5.6 (52.5)
Year 12/10A 12/11A 12/12E 12/13E 12/14E
25,179 38,428 23,591 38,061 42,113
6,726 9,268 505 4,277 4,961
4,028 6,527 -775 2,889 3,899
3.81 6.05 (0.72) 2.67 3.61
n.a. n.a. n.m 0 0
n.a. n.a. (0.58) 1.50 2.52
n.m. 58.5 n.m. n.m. 35.0
8.3 5.2 n.m. 11.9 8.8
8.4 9.5 0.0 5.5 7.4
5.4 4.2 70.7 8.1 7.0
1.4 1.2 1.4 1.3 1.2
18.1 24.7 -3.0 11.4 14.0
8.3 16.3 6.1 2.0 2.4
72.0 - 27.8
34,250.5/ 1,154.0
ROE (%)
Mkt cap (NT$/US$ mn)Daily trad v al - 6m av g (US$ mn)
Major shareholders Yuen Foong Yu (10.52%)
Net debt(cash)/equity (%)
Rev enue (NT$ mn)
52-w k range (NT$)
8069 TT / 8069.TWO
N (N) [V]
Daily trad v ol - 6m av g (mn)
Rating (prev. rating)
Shares outstanding (mn)
Price (07 Sep 12 , NT$)
TP (prev. TP NT$)
Est. pot. % chg. to TP
EBITDA (NT$ mn)
Net profit (NT$ mn)
EPS (NT$)
- Change from prev . EPS (%)
- Consensus EPS (NT$)
EPS grow th (%)
P/E (x )
Div idend y ield (%)
EV/EBITDA (x )
P/B (x )
Bbg/RIC 212.00
195.00
246.43 (8)
1.9
18.0
Free float (%) 75 Performance 1M 3M 12M
Absolute (%) (15.9) (23.6) (23.2)
Relativ e (%) (15.7) (27.9) (20.8)
Year 12/10A 12/11A 12/12E 12/13E 12/14E
8,210 14,134 11,683 14,004 16,156
2,550 4,779 4,268 5,066 5,869
1,689 3,809 2,947 3,594 4,163
6.90 15.50 12.00 14.60 16.90
n.a. n.a. 0 0 0
n.a. n.a. 13.50 14.80 19.00
476.6 125.5 -22.6 21.9 15.8
30.9 13.7 17.7 14.5 12.5
1.4 2.6 2.0 2.4 2.8
21.8 12.1 14.0 11.3 10.2
8.4 5.6 5.7 4.6 3.8
31.2 48.9 31.8 34.9 33.0
56.5 60.8 80.9 45.7 54.5
323.8 - 191.9
52,242.7/ 1,760.2
ROE (%)
Note 1: Established in 1989, Hiwin is an automation equipment and machine supplier in Taiwan.
Mkt cap (NT$/US$ mn)Daily trad v al - 6m av g (US$ mn)
Major shareholders Ta Yin Inv estment (8.3%)
Net debt(cash)/equity (%)
Rev enue (NT$ mn)
52-w k range (NT$)
2049 TT / 2049.TW
U (U) [V]
Daily trad v ol - 6m av g (mn)
Rating (prev. rating)
Shares outstanding (mn)
Price (07 Sep 12 , NT$)
TP (prev. TP NT$)
Est. pot. % chg. to TP
EBITDA (NT$ mn)
Net profit (NT$ mn)
EPS (NT$)
- Change from prev . EPS (%)
- Consensus EPS (NT$)
EPS grow th (%)
P/E (x )
Div idend y ield (%)
EV/EBITDA (x )
P/B (x )
Price performance vs. MSCI Taiwan Price performance vs. MSCI Taiwan
Taiwan – Company updates Novatek (3034.TW, NT$103.50, O, TP NT$118.00) Lextar (3698.TW, NT$30.65, N [V], TP NT$37.00)
New report: Resolution migration, mid-sized devices, and share gains driving
future growth
■ We raise Novatek’s 2012-14 EPS estimates by 1-4% to reflect
the rapid growth potential in mid-sized 7-13” devices, and
potential market share gain in smartphone and non-driver IC
segments. We lift our TP to NT$118 (from NT$107), based on
13x 2013E P/E and NT$5.5 cash dividend (same multiple).
■ Besides the ongoing resolution migration, we think the street has
underestimated Novatek’s growth potential from mid-size
devices. We estimate mid-sized devices to see ~25% CAGR in
2012-2015 and Novatek’s growth potential could be similar to
that.
■ Besides share gain in large size driver IC, Novatek is also gaining
share in the smartphone and non-driver IC market, thanks to the
higher specification for smartphone drivers, and growth from TV
chipset business given customers’ supplier diversification
strategy.
■ The stock is trading at 11.6x 2013E P/E and is supported by a
5.5% cash dividend yield. Near-term catalysts are better 3Q sales
and margin, Apple’s iPad min launch, and share gain in mid-size
devices, smartphone, and TV chipsets.
Uncertain synergy from the Wellypower acquisition
■ Lextar announced its plans to acquire Wellypower based on a 1:2
share swap (1.5% premium). Lextar will issue additional 85 mn
shares (17% dilution) for the deal and expects to conclude the
transaction on 1 February 2013, post regulatory approvals.
■ Post the transaction, Lextar’s LED packaging capacity will
increase from 800 mn units/month to 1 bn units/month while
maintaining an LED wafer capacity of ~100,000/month on 2”
equivalent basis. Lextar thinks the Wellypower acquisition will
enhance its LED packaging, lightbar and lighting
competitiveness.
■ Lextar outsources LED packaging and lightbar assembly to
Wellypower. Wellypower’s 2011 sales mix was 60% LED, 27%
CCFL and 6% lighting. Main customers are AUO related (~30%
of sales), Forehouse (~20%) and Radiant (~19%) in 1Q12.
■ We are less positive on the deal given uncertain synergy.
Wellypower is still in operating loss in 1H12, it will require
significant turnaround (i.e. ~8% GM) in 2013 to make the deal
accretive. We see downside to our earnings forecast if Lextar
fails to turn Wellypower’s business around in 2013.
Bbg/RIC 100.00
118.00
603.20 18
1.7
5.0
Free float (%) 75.5 Performance 1M 3M 12M
Absolute (%) 9.5 16.3 33.9
Relativ e (%) 9.0 10.5 35.5
Year 12/10A 12/11A 12/12E 12/13E 12/14E
36,261 35,034 35,231 39,729 42,506
5,622 4,619 5,729 6,730 7,186
4,584 3,695 4,392 5,192 5,573
7.70 6.10 7.30 8.60 9.20
n.a. n.a. 1 4 4
n.a. n.a. 6.95 7.97 8.72
13.3 -20.2 18.6 18.2 7.3
13.0 16.3 13.7 11.6 10.8
5.8 4.6 5.5 6.5 6.6
9.3 11.3 8.9 7.4 6.9
2.7 2.7 2.9 2.8 2.7
21.9 16.8 20.6 24.6 25.2
-36.7 -36.8 -45.9 -47.0 -48.6
- Consensus EPS (NT$)
EPS grow th (%)
P/E (x )
Div idend y ield (%)
EV/EBITDA (x )
P/B (x )
EBITDA (NT$ mn)
Net profit (NT$ mn)
EPS (NT$)
- Change from prev . EPS (%)
Price (10 Sep 12 , NT$)
TP (prev. TP NT$)
Est. pot. % chg. to TP
52-w k range (NT$)
3034 TT / 3034.TW
O (O)
Daily trad v ol - 6m av g (mn)
Rating (prev. rating)
Shares outstanding (mn)
100.0 - 68.5
60,320.4/ 2,032.6
ROE (%)
Note1:Novatek is a fabless chip design company specializing in the design, development and sales of a wide range of display driver ICs & SoC solutions.
Mkt cap (NT$/US$ mn)Daily trad v al - 6m av g (US$ mn)
Major shareholders UMC (10.27%)
Net debt(cash)/equity (%)
Rev enue (NT$ mn)
Bbg/RIC 30.65
37.00 (37.00)
419.50 21
1.5
1.7
Free float (%) 48.4 Performance 1M 3M 12M
Absolute (%) 10.6 (5.5) 40.0
Relativ e (%) 9.3 (11.5) 35.1
Year 12/10A 12/11A 12/12E 12/13E 12/14E
8,058 9,103 10,535 13,333 16,141
2,387 1,641 2,543 3,298 3,646
1,231 -138 426 880 1,095
3.28 (0.35) 1.02 2.10 2.61
n.a. n.a. 0 0 0
n.a. n.a. 1.05 1.74 2.61
n.a. n.m. n.m. 106.5 24.4
9.3 n.m. 30.2 14.6 11.7
0.0 0.0 0.0 1.3 3.4
7.1 11.1 7.8 5.3 4.5
1.6 1.6 1.5 1.4 1.3
15.6 -1.7 5.2 10.1 11.8
52.5 67.4 83.9 50.6 37.0
41.7 - 17.3
12,857.8/ 434.8
ROE (%)
Note1:Lextar is involved in LED wafer production, LED chip packaging and light bar assembly for display backlights..
Mkt cap (NT$/US$ mn)Daily trad v al - 6m av g (US$ mn)
Major shareholders AUO group (45.4%)
Net debt(cash)/equity (%)
Rev enue (NT$ mn)
52-w k range (NT$)
3698 TT / 3698.TW
N (N) [V]
Daily trad v ol - 6m av g (mn)
Rating (prev. rating)
Shares outstanding (mn)
Price (13 Sep 12 , NT$)
TP (prev. TP NT$)
Est. pot. % chg. to TP
EBITDA (NT$ mn)
Net profit (NT$ mn)
EPS (NT$)
- Change from prev . EPS (%)
- Consensus EPS (NT$)
EPS grow th (%)
P/E (x )
Div idend y ield (%)
EV/EBITDA (x )
P/B (x )
Price performance vs. MSCI Taiwan Price performance vs. MSCI Taiwan
Ali 3041.TW 397 38.60 34.79 (9.9) Not rated Dec 17.2 16.0 2.1 1.9 9.2 1.8 16.4 27.8 23.5
Alpha Networks 3380.TW 375 21.45 30.38 41.6 Not rated Dec 10.7 10.6 1.1 0.9 4.7 (2.8) 0.2 (0.5) (2.5)
Altek 3059.TW 238 17.80 44.21 148.4 Not rated Dec 34.9 13.2 0.6 0.6 (0.6) (7.9) 8.5 11.3 (12.3)
Ambassador Hotel 2704.TW 395 31.85 20.97 (34.2) Not rated Dec 27.2 33.6 1.4 1.4 2.7 (4.6) 2.7 6.2 8.9
Amtran Technology 2489.TW 671 24.20 21.30 (12.0) Not rated Dec 16.0 11.3 1.3 1.2 2.9 (4.4) 5.7 13.9 2.3
Apex Biotechnology 1733.TW 249 74.60 81.63 9.4 Not rated Dec 13.6 12.5 4.1 3.5 24.6 16.9 (2.2) (3.3) 1.8
Arcadyan Technology 3596.TW 153 32.20 39.34 22.2 Not rated Dec 7.8 15.9 0.9 0.8 7.4 (0.5) (2.0) (4.0) 2.2
Ardentec 3264.TWO 325 20.85 26.83 28.7 Not rated Dec 11.3 10.6 1.2 1.1 5.3 (2.2) 2.5 (1.8) 5.3
Arima Comm. 8101.TW 191 13.70 7.35 (46.4) Not rated Dec 13.2 (25.1) 1.3 1.2 2.8 (5.0) 0.4 5.0 (18.9)
Asia Optical 3019.TW 305 32.05 36.55 14.0 Not rated Dec (4.3) (4.2) 0.7 0.7 (7.7) (15.2) 6.8 (1.7) 21.9
Asia Polymer 1308.TW 450 28.30 55.18 95.0 Not rated Dec 8.2 6.7 1.5 1.3 13.6 6.4 2.7 (8.4) 11.3
Asia Vital Components 3017.TW 199 17.55 31.70 80.6 Not rated Dec 8.8 6.9 0.8 0.8 5.3 (2.3) 0.3 2.3 17.0
ASRock 3515.TW 409 105.00 116.03 10.5 Not rated Dec 9.2 10.4 1.9 1.7 17.5 10.2 (1.4) (2.8) (7.5)
Aten Int'l 6277.TW 209 51.70 54.95 6.3 Not rated Dec 12.0 10.8 2.1 1.9 11.7 4.1 (0.4) (6.8) (3.5)
Aurora 2373.TW 516 45.25 29.60 (34.6) Not rated Dec 13.2 13.7 2.3 2.3 10.0 2.9 1.9 (0.9) (5.2)
AV Tech 8072.TW 308 91.20 95.13 4.3 Not rated Dec 10.3 10.0 2.0 1.8 16.3 8.9 1.6 2.5 0.8
Avermedia Technologies 2417.TW 126 18.00 21.54 19.7 Not rated Dec 6.6 35.9 0.9 0.8 1.4 (6.3) 2.0 (4.3) (21.2)
BES Engineering 2515.TW 386 7.48 5.38 (28.1) Not rated Dec 68.0 1,249.1 0.6 0.6 0.5 (7.0) 2.3 11.5 8.4
Cando 8056.TWO 315 10.25 7.15 (30.2) Not rated Dec (7.4) (9.2) 1.3 1.2 (9.4) (16.6) (0.5) 1.0 (5.5)
Capital Securities 6005.TW 837 10.45 8.51 (18.6) Not rated Dec 29.9 28.1 0.9 0.8 1.2 (7.5) 3.5 (1.9) 9.3
Share price performance
NT$ term (%)P/B (x)P/E (x)
CalendarizedCalendarized
* Include the small-cap stocks in HOLT® database with market cap between US$150 mn and US$2 bn. For stocks that are Not Rated, I/B/E/S consensus forecast are used. CFROI® is a
registered trademark in the United States and other countries (excluding the United Kingdom) of Credit Suisse or its subsidiaries or affiliates.
* Companies in bold and italic indicate constituents of Credit Suisse Taiwan Small Cap Index.
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Valuations of Credit Suisse Taiwan small-cap watch list* Market CS target/ Potential Credit Year HOLT CFROI
Cap Price HOLT warranted return Suisse end CFROI Spread
Chong Hong 5534.TW 651 77.70 90.16 16.0 Not rated Dec 8.4 6.1 2.1 2.1 13.4 6.0 1.8 15.1 33.5
Chroma ATE 2360.TW 794 62.30 89.00 42.9 OUTPERFORM Dec 15.4 16.0 3.1 2.9 15.0 8.1 1.0 (0.3) (9.4)
Chun Yuan Steel 2010.TW 250 11.40 5.67 (50.3) Not rated Dec 12.8 11.7 0.7 0.6 2.2 (5.6) 0.9 (0.2) (4.7)
Chung Hsin E&M 1513.TW 257 15.80 16.44 4.1 Not rated Dec 13.0 12.2 1.0 1.0 5.0 (2.7) 0.6 (7.3) (5.4)
Chung Hung Steel 2014.TW 415 8.55 1.39 (83.7) Not rated Dec (5.0) (4.4) 1.0 1.2 (9.3) (16.8) 18.6 11.6 6.7
Chung Hwa Pulp 1905.TW 208 9.96 12.78 28.3 Not rated Dec 498.0 26.9 0.7 0.7 (0.8) (8.5) 2.9 3.2 8.9
Chunghwa Picture 2475.TW 182 0.83 7.27 776.4 Not rated Dec (0.4) (0.4) 0.2 0.2 (12.6) (20.1) 2.5 (9.8) (18.6)
Clevo 2362.TW 885 41.00 1.75 (95.7) Not rated Dec 19.5 18.8 3.0 2.6 4.4 (2.7) 5.1 0.0 (0.5)
CMC Magnetics 2323.TW 455 4.89 9.54 95.0 Not rated Dec (8.0) (8.6) 0.4 0.4 (3.9) (11.3) 0.8 3.6 2.1
Share price performanceCalendarized Calendarized
P/E (x) P/B (x) NT$ term (%)
* Include the small-cap stocks in HOLT® database with market cap between US$150 mn and US$2 bn. For stocks that are Not Rated, I/B/E/S consensus forecast are used. CFROI® is a
registered trademark in the United States and other countries (excluding the United Kingdom) of Credit Suisse or its subsidiaries or affiliates.
* Companies in bold and italic indicate constituents of Credit Suisse Taiwan Small Cap Index.
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Valuations of Credit Suisse Taiwan small-cap watch list* Market CS target/ Potential Credit Year HOLT CFROI
Cap Price HOLT warranted return Suisse end CFROI Spread
* Include the small-cap stocks in HOLT® database with market cap between US$150 mn and US$2 bn. For stocks that are Not Rated, I/B/E/S consensus forecast are used. CFROI® is a
registered trademark in the United States and other countries (excluding the United Kingdom) of Credit Suisse or its subsidiaries or affiliates.
* Companies in bold and italic indicate constituents of Credit Suisse Taiwan Small Cap Index.
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Valuations of Credit Suisse Taiwan small-cap watch list* Market CS target/ Potential Credit Year HOLT CFROI
Cap Price HOLT warranted return Suisse end CFROI Spread
Farglory Land 5522.TW 1,422 54.50 64.46 18.3 Not rated Dec 7.1 7.9 1.3 1.3 13.0 6.3 2.8 12.1 14.0
Federal 2102.TW 284 20.85 18.77 (10.0) Not rated Dec 16.3 15.2 1.0 0.9 4.3 (3.6) 5.8 26.4 53.1
Feng Hsin Iron & Steel 2015.TW 948 48.20 42.07 (12.7) Not rated Dec 10.5 14.6 1.7 1.8 11.1 4.2 4.0 (3.1) (1.9)
Feng Tay Enterprises 9910.TW 538 29.70 35.03 17.9 Not rated Dec 11.1 10.5 1.8 1.7 7.8 0.4 2.6 3.8 11.2
Firich Enterprises 8076.TWO 229 40.15 10.28 (74.4) Not rated Dec 121.7 65.2 2.8 2.6 3.0 (4.7) 4.0 5.9 20.4
First Hotel 2706.TW 234 20.70 16.86 (18.5) Not rated Dec 30.4 28.7 1.1 1.1 3.9 (3.6) 3.2 0.7 13.7
First Steamship 2601.TW 286 30.50 31.72 4.0 Not rated Dec 15.3 10.1 1.2 1.0 8.3 1.0 4.8 (5.1) (13.6)
Flexium 6269.TW 789 123.00 158.35 28.7 Not rated Dec 17.7 14.6 4.8 3.8 22.2 14.9 (3.1) (2.6) 17.3
Flytech Technology 6206.TW 220 64.90 72.10 11.1 Not rated Dec 12.1 12.3 2.6 2.3 14.5 6.7 0.2 (1.9) 8.2
Forhouse 6120.TW 262 16.10 21.50 33.5 Not rated Dec 22.7 27.0 0.7 0.7 1.8 (5.8) 0.6 0.9 5.9
Formosa Epitaxy 3061.TW 344 21.15 9.58 (54.7) Not rated Dec (52.9) (55.1) 0.9 0.7 (2.9) (10.3) 1.9 3.4 (0.2)
Formosa Int'l. Hotels 2707.TW 1,020 312.00 161.73 (48.2) Not rated Dec 31.2 24.8 9.6 8.8 20.9 14.3 3.8 4.0 6.9
Formosa Sumco Tech. 3532.TW 897 34.20 18.31 (46.5) Not rated Dec 180.0 184.7 1.4 1.4 (1.8) (8.4) 2.4 21.3 17.7
Formosa Taffeta 1434.TW 1,576 27.65 48.68 76.1 Not rated Dec 22.3 19.3 0.9 0.8 5.6 (1.0) 2.6 0.2 5.7
Formosan Rubber 2107.TW 344 20.45 31.25 52.8 Not rated Dec 8.4 7.8 1.1 1.0 10.6 3.3 4.1 8.2 7.6
FSP Technology 3015.TW 220 28.30 49.25 74.0 Not rated Dec 7.1 n.a. 1.2 n.a. 13.0 5.6 (0.2) 11.6 4.8
Gamania Digital Entertainment6180.TWO 132 24.80 34.20 37.9 Not rated Dec 21.6 23.7 1.4 1.2 14.3 6.5 3.3 (8.0) (14.6)
Gemtek 4906.TW 328 31.80 40.36 26.9 Not rated Dec 795.0 12.1 1.2 1.1 3.0 (4.7) (1.9) 9.7 29.8
Genesis Photonics 3383.TW 251 25.45 -0.80 (103.1) Not rated Dec 23.2 16.0 1.2 1.0 1.2 (6.1) 11.1 8.1 (3.9)
Genius Electronic 3406.TW 643 213.00 137.34 (35.5) Not rated Dec 19.5 22.7 2.9 2.3 10.6 3.7 0.2 (6.0) (5.8)
Geovision 3356.TW 221 116.50 98.02 (15.9) Not rated Dec 14.1 13.2 4.1 3.8 22.0 14.2 3.6 2.2 7.1
Getac Technology 3005.TW 423 21.60 24.66 14.2 Not rated Dec 26.7 21.0 1.0 0.9 1.7 (5.9) (1.4) (5.1) (5.5)
Giant Mfg. 9921.TW 1,998 157.50 132.14 (16.1) Not rated Dec 19.6 17.6 3.9 3.7 11.4 4.7 7.5 (5.4) 15.8
Giga-Byte Technology 2376.TW 551 26.10 47.45 81.8 Not rated Dec 10.6 8.8 0.8 0.8 5.1 (2.0) 0.4 1.2 (5.8)
Gintech Energy 3514.TW 356 31.10 23.73 (23.7) Not rated Dec (6.6) (14.8) 0.8 0.7 (8.7) (16.0) 0.2 8.2 (19.2)
Global Brands Mfg. 6191.TW 211 11.75 9.47 (19.4) Not rated Dec 7.0 6.6 0.6 0.5 1.1 (6.9) 1.3 (4.0) (4.0)
Calendarized Calendarized Share price performance
P/E (x) P/B (x) NT$ term (%)
* Include the small-cap stocks in HOLT® database with market cap between US$150 mn and US$2 bn. For stocks that are Not Rated, I/B/E/S consensus forecast are used. CFROI® is a
registered trademark in the United States and other countries (excluding the United Kingdom) of Credit Suisse or its subsidiaries or affiliates.
* Companies in bold and italic indicate constituents of Credit Suisse Taiwan Small Cap Index.
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Valuations of Credit Suisse Taiwan small-cap watch list* Market CS target/ Potential Credit Year HOLT CFROI
Cap Price HOLT warranted return Suisse end CFROI Spread
Global Mixed-Mode 8081.TW 302 103.50 108.21 4.6 Not rated Dec 12.7 12.3 2.3 2.0 17.0 9.5 5.2 11.1 18.4
Global Unichip 3443.TW 519 114.50 74.76 (34.7) Not rated Dec 29.1 26.0 4.6 4.4 10.5 3.4 (1.7) 9.0 11.2
Globe Union 9934.TW 179 17.75 5.02 (71.7) Not rated Dec 17.4 23.2 1.0 1.0 0.1 (7.7) (1.9) (16.1) (6.6)
Gloria Material 5009.TWO 389 27.25 20.46 (24.9) Not rated Dec 10.9 8.9 1.5 1.4 4.9 (2.8) (1.6) (8.1) (0.9)
Goldsun Dev. 2504.TW 558 10.85 11.63 7.2 Not rated Dec 20.9 11.9 0.7 0.7 1.9 (5.3) 2.4 4.8 4.8
Gourmet Master 2723.TW 1,057 221.50 114.76 (48.2) Not rated Dec 27.9 23.7 5.4 4.5 16.7 10.0 (0.7) 0.0 6.7
Grand Pacific Petrochem. 1312.TW 465 15.15 16.91 11.6 Not rated Dec 12.3 8.9 1.0 1.0 8.6 1.3 5.6 7.8 28.4
Great China Metal Industry 9905.TW 344 33.30 34.74 4.3 Not rated Dec 13.4 12.1 1.6 1.6 7.6 0.2 (0.4) (2.9) 1.1
Greatck Electronics 2441.TW 435 23.20 33.33 43.7 Not rated Dec 14.2 10.3 1.2 1.1 6.4 (0.9) 0.4 (4.3) 4.0
Greatwall Enteprise 1210.TW 506 27.15 27.32 0.6 Not rated Dec 12.8 16.4 1.3 1.1 6.4 (0.9) 1.3 (6.4) 3.8
Green Energy Technology 3519.TW 233 21.40 -4.87 (122.7) Not rated Dec (2.5) (2.9) 0.5 0.3 (8.4) (15.7) 3.6 12.6 (12.5)
G-Tech Optoelectronics 3149.TW 701 88.00 43.31 (50.8) Not rated Dec 21.4 20.8 2.7 1.8 8.7 1.7 2.8 2.9 4.8
Hannstar Board 5469.TW 252 16.25 2.27 (86.1) Not rated Dec 15.4 9.1 0.7 0.6 0.5 (7.7) (0.9) 10.5 12.8
Hannstar Display 6116.TW 335 3.38 6.87 103.1 Not rated Dec (2.6) 84.5 0.7 0.6 (22.9) (30.3) 12.7 (18.8) (26.8)
Hey Song 1234.TW 850 46.90 18.85 (59.8) Not rated Dec 64.2 58.0 2.0 1.9 1.7 (5.5) 14.7 23.7 31.2
Highwealth Construction 2542.TW 1,290 51.10 117.85 130.6 Not rated Dec 5.6 4.5 1.8 1.5 12.6 5.6 4.3 7.2 9.2
Ho Tung Chemical 1714.TW 457 17.40 16.62 (4.5) Not rated Dec 11.4 9.4 1.3 1.2 6.2 (1.3) 0.6 (1.1) 5.8
Holiday Entertainment 9943.TW 236 47.30 49.68 5.0 Not rated Dec 9.8 9.0 2.1 2.0 15.0 7.1 (1.5) (16.1) (3.1)
Soltck Semiconductor 6202.TW 241 31.90 28.00 (12.2) Not rated Dec 13.5 13.4 2.0 1.8 9.4 1.8 2.6 4.6 (0.6)
Holy Stone Enterprise 3026.TW 279 25.75 24.51 (4.8) Not rated Dec 10.8 11.1 0.9 0.9 4.6 (2.9) 2.8 1.2 (2.1)
Hsin Kuang Steel 2031.TW 175 18.65 9.73 (47.8) Not rated Dec 26.3 15.8 0.9 0.9 2.7 (5.2) 11.0 2.2 (5.3)
Hua Eng Wire & Cable 1608.TW 211 9.84 6.36 (35.4) Not rated Dec (328.0) 28.0 0.7 0.6 0.1 (8.1) 0.8 9.5 25.2
Huaku Construction 2548.TW 667 71.20 93.53 31.4 OUTPERFORM Dec 6.5 6.4 1.7 1.5 12.9 5.7 2.6 14.7 8.1
Huang Hsiang Construction 2545.TW 875 78.90 8.98 (88.6) Not rated Dec 18.8 15.4 3.4 2.9 5.1 (2.3) 8.7 30.8 27.5
Huga Optotech 8199.TW 224 12.75 9.61 (24.6) Not rated Dec (5.7) (6.2) 0.7 0.7 (12.1) (19.7) 7.6 6.3 (0.8)
Hung Poo Real Estate Dev. 2536.TW 325 30.10 35.38 17.5 Not rated Dec 12.0 6.8 0.9 n.a. 7.2 0.4 3.4 19.0 26.2
Hung Sheng Construction 2534.TW 330 16.55 5.47 (66.9) Not rated Dec 11.3 50.1 0.9 0.9 1.2 (6.6) 3.4 14.5 10.3
Ichia Technologies 2402.TW 177 15.55 12.31 (20.9) Not rated Dec 59.8 16.2 0.8 0.8 0.6 (7.4) (1.0) 5.4 0.3
ICP Electronics 3022.TW 413 53.80 87.12 61.9 Not rated Dec 8.9 8.0 2.0 1.8 11.3 3.8 2.1 5.5 20.2
Industrial Bank of Taiw an 2897.TWO 554 6.85 8.48 23.8 Not rated Dec 10.8 n.a. 0.7 n.a. 6.4 (0.2) 0.7 2.2 (0.9)
Calendarized Calendarized Share price performance
P/E (x) P/B (x) NT$ term (%)
* Include the small-cap stocks in HOLT® database with market cap between US$150 mn and US$2 bn. For stocks that are Not Rated, I/B/E/S consensus forecast are used. CFROI® is a
registered trademark in the United States and other countries (excluding the United Kingdom) of Credit Suisse or its subsidiaries or affiliates.
* Companies in bold and italic indicate constituents of Credit Suisse Taiwan Small Cap Index.
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Valuations of Credit Suisse Taiwan small-cap watch list* Market CS target/ Potential Credit Year HOLT CFROI
Cap Price HOLT warranted return Suisse end CFROI Spread
Lien Hw a Industrial 1229.TW 555 19.35 26.34 36.1 Not rated Dec 11.0 9.7 0.8 0.8 1.0 (6.2) 2.7 5.7 12.2
P/E (x) P/B (x) NT$ term (%)
Calendarized Calendarized Share price performance
* Include the small-cap stocks in HOLT® database with market cap between US$150 mn and US$2 bn. For stocks that are Not Rated, I/B/E/S consensus forecast are used. CFROI® is a
registered trademark in the United States and other countries (excluding the United Kingdom) of Credit Suisse or its subsidiaries or affiliates.
* Companies in bold and italic indicate constituents of Credit Suisse Taiwan Small Cap Index.
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Valuations of Credit Suisse Taiwan small-cap watch list* Market CS target/ Potential Credit Year Calendarized Calendarized HOLT CFROIShare price performance
Cap Price HOLT warranted return Suisse end P/E (x) P/B (x) CFROI SpreadNT$ term (%)
Opto Tech 2340.TW 229 12.40 12.59 1.5 Not rated Dec 14.9 11.5 0.9 0.9 3.3 (4.4) (0.4) 3.3 2.9
Oriental Union Chemical 1710.TW 1,031 34.40 24.56 (28.6) Not rated Dec 10.4 19.6 1.8 1.9 10.9 4.1 4.2 (1.7) 8.7
Pacific Hospital Supply 4126.TWO 189 84.50 81.78 (3.2) Not rated Dec 17.2 14.3 3.7 3.4 19.0 11.3 1.2 4.3 9.6
Pan Int'l Industrial 2328.TW 528 30.65 13.00 (57.6) Not rated Dec (65.2) (104.7) 1.7 1.6 0.5 (6.7) 4.3 2.2 8.7
PChome Online 8044.TWO 471 170.00 69.00 (59.4) Not rated Dec 33.1 30.7 10.3 9.2 15.3 8.0 2.4 (2.0) 22.5
Phihong Technology 2457.TW 257 27.45 59.39 116.4 Not rated Dec 5.3 5.5 1.1 1.1 17.0 9.8 4.0 6.4 (9.6)
Phison 8299.TWO 1,398 229.50 281.44 22.6 Not rated Dec 15.6 14.1 3.8 3.1 21.0 14.2 4.3 (4.4) 6.0 * Include the small-cap stocks in HOLT® database with market cap between US$150 mn and US$2 bn. For stocks that are Not Rated, I/B/E/S consensus forecast are used. CFROI® is a
registered trademark in the United States and other countries (excluding the United Kingdom) of Credit Suisse or its subsidiaries or affiliates.
* Companies in bold and italic indicate constituents of Credit Suisse Taiwan Small Cap Index.
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Valuations of Credit Suisse Taiwan small-cap watch list* Market CS target/ Potential Credit Year HOLT CFROI
Cap Price HOLT warranted return Suisse end CFROI Spread
Shihlin Paper 1903.TW 479 54.50 1.21 (97.8) Not rated Dec (160.3) (163.1) 3.5 3.6 (2.8) (10.0) 10.1 32.0 37.1
Shin Zu Shing 3376.TW 600 112.00 78.77 (29.7) Not rated Dec 49.1 16.6 2.3 2.2 2.8 (4.8) 9.8 5.7 33.5
Calendarized Calendarized Share price performance
P/E (x) P/B (x) NT$ term (%)
* Include the small-cap stocks in HOLT® database with market cap between US$150 mn and US$2 bn. For stocks that are Not Rated, I/B/E/S consensus forecast are used. CFROI® is a
registered trademark in the United States and other countries (excluding the United Kingdom) of Credit Suisse or its subsidiaries or affiliates.
* Companies in bold and italic indicate constituents of Credit Suisse Taiwan Small Cap Index.
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Valuations of Credit Suisse Taiwan small-cap watch list* Market CS target/ Potential Credit Year HOLT CFROI
Cap Price HOLT warranted return Suisse end CFROI Spread
Simplo 6121.TWO 1,903 182.50 187.43 2.7 Not rated Dec 15.3 14.2 3.5 2.9 15.6 9.2 3.4 (3.2) (3.5)
Sincere Navigation 2605.TW 488 25.40 30.58 20.4 Not rated Dec 8.2 8.8 1.0 1.0 9.2 1.8 (0.4) (1.7) (1.9)
Sinmag Equipment 1580.TWO 176 122.00 123.22 1.0 Not rated Dec 13.0 11.9 4.8 n.a. 26.9 19.2 4.7 1.7 8.6
Sino American Silicon 5483.TWO 697 39.40 37.98 (3.6) Not rated Dec 17.5 (16.8) 0.8 n.a. 15.3 8.8 3.1 16.2 (21.7)
Sintek Photronic 3049.TW 362 12.10 0.85 (92.9) Not rated Dec (6.1) (6.3) 1.6 1.6 (18.2) (25.7) (0.4) 0.8 (9.0)
Sinyi Realty 9940.TW 638 40.50 36.12 (10.8) Not rated Dec 14.4 12.3 2.8 2.6 16.7 9.6 2.5 3.1 4.2
Soft World 5478.TWO 243 56.40 64.12 13.7 Not rated Dec 17.2 21.3 1.5 1.3 11.8 4.5 (2.8) (12.0) (26.8)
Solar Applied Mats. Tech. 1785.TWO 540 39.05 17.73 (54.6) Not rated Dec 19.9 16.7 1.7 1.5 4.9 (2.4) 3.9 0.8 21.7
Solartech Energy 3561.TW 208 21.40 -7.67 (135.9) Not rated Dec (4.4) (7.2) 0.7 0.6 (9.6) (17.2) 4.6 14.4 (34.8)
Sonix Technology 5471.TW 250 44.00 39.88 (9.4) Not rated Dec 13.3 11.5 2.3 2.0 8.7 1.2 2.0 2.3 (2.2)
Southeast Cement 1110.TW 269 13.90 10.37 (25.4) Not rated Dec 347.5 76.0 1.0 0.9 (2.4) (10.1) 4.9 13.5 17.3
SportOn 6146.TWO 186 67.60 85.35 26.3 Not rated Dec 8.3 11.0 3.0 n.a. 25.6 17.9 (0.6) (5.5) (4.1)
SpringSoft 2473.TW 398 56.70 47.29 (16.6) Not rated Dec 20.4 19.4 2.4 2.1 13.5 5.8 0.7 1.8 46.1
ST Shine Optical 1565.TWO 609 357.00 289.24 (19.0) Not rated Dec 16.9 16.2 6.4 4.4 31.5 24.4 1.1 (1.7) 10.7
Standard Foods 1227.TW 1,505 77.40 65.87 (14.9) Not rated Dec 18.0 15.0 5.0 4.4 19.8 13.1 2.1 (8.4) 16.5
Sunonwealth Elec. Ind. 2421.TW 157 18.55 22.56 21.6 Not rated Dec 11.1 10.4 1.2 1.1 7.0 (0.7) 2.5 (5.6) (11.0)
Sunplus 2401.TW 203 10.05 15.79 57.1 Not rated Dec (3.0) (4.7) 0.7 0.6 (7.7) (15.2) 5.9 12.9 15.3
Sunrex 2387.TW 172 13.75 21.15 53.8 Not rated Dec 15.4 6.9 0.7 0.6 2.6 (5.0) 2.2 1.1 (0.7)
Sunspring Metal 2062.TW 155 28.05 28.59 1.9 Not rated Dec 11.1 10.9 1.1 1.0 5.2 (2.6) (2.1) (9.2) (6.5)
Syncmold Enterprise 1582.TW 228 49.30 67.59 37.1 Not rated Dec 13.3 9.1 1.7 1.6 11.6 3.8 (0.6) 1.9 10.5
Sy stex 6214.TW 268 30.50 43.28 41.9 Not rated Dec 50.0 52.4 0.6 0.5 0.9 (6.6) 1.0 1.2 1.5
Ta Chen Stainless Pipe 2027.TW 365 15.25 5.33 (65.1) Not rated Dec 23.1 18.0 1.0 1.0 2.7 (5.0) 6.3 5.2 (1.9)
Ta Chong Bank 2847.TW 718 9.45 9.03 (4.5) NEUTRAL Dec 10.7 12.0 0.8 0.8 2.6 (6.1) 2.1 4.3 7.0
Taichung Commercial Bank 2812.TW 792 10.10 16.20 60.4 Not rated Dec 13.3 7.3 0.9 0.8 4.8 (3.9) 7.4 6.8 17.2
Taiflex Scientific 8039.TW 258 37.70 29.51 (21.7) Not rated Dec 13.5 10.3 1.5 1.3 5.3 (2.3) 1.1 (11.7) (13.0)
Calendarized Calendarized Share price performance
P/E (x) P/B (x) NT$ term (%)
* Include the small-cap stocks in HOLT® database with market cap between US$150 mn and US$2 bn. For stocks that are Not Rated, I/B/E/S consensus forecast are used. CFROI® is a
registered trademark in the United States and other countries (excluding the United Kingdom) of Credit Suisse or its subsidiaries or affiliates.
* Companies in bold and italic indicate constituents of Credit Suisse Taiwan Small Cap Index.
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Valuations of Credit Suisse Taiwan small-cap watch list* Market CS target/ Potential Credit Year HOLT CFROI
Cap Price HOLT warranted return Suisse end CFROI Spread
Tonlin Dept. St. 2910.TW 176 25.00 5.02 (79.9) Not rated Dec 35.7 31.1 1.9 1.8 2.3 (5.8) 4.4 4.6 13.4
Topco Scientific 5434.TW 245 48.55 51.45 6.0 Not rated Dec 7.6 8.0 1.5 1.4 16.8 9.1 0.6 (1.3) (2.0)
Transcend Info. 2451.TW 1,155 79.30 71.97 (9.2) Not rated Dec 11.8 12.6 1.8 1.7 14.4 7.7 1.3 (4.3) (2.9)
Calendarized Calendarized Share price performance
P/E (x) P/B (x) NT$ term (%)
* Include the small-cap stocks in HOLT® database with market cap between US$150 mn and US$2 bn. For stocks that are Not Rated, I/B/E/S consensus forecast are used. CFROI® is a
registered trademark in the United States and other countries (excluding the United Kingdom) of Credit Suisse or its subsidiaries or affiliates.
* Companies in bold and italic indicate constituents of Credit Suisse Taiwan Small Cap Index.
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Valuations of Credit Suisse Taiwan small-cap watch list* Market CS target/ Potential Credit Year HOLT CFROI
Cap Price HOLT warranted return Suisse end CFROI Spread
Wistron Neweb 6285.TW 566 55.10 79.73 44.7 Not rated Dec 9.7 11.1 1.8 1.6 11.4 4.3 4.8 (1.6) 9.6
Wowprime 2727.TW 1,004 437.00 198.98 (54.5) Not rated Dec 34.4 27.3 14.7 7.2 23.7 16.7 0.9 (3.1) (0.1)
Calendarized Calendarized Share price performance
P/E (x) P/B (x) NT$ term (%)
* Include the small-cap stocks in HOLT® database with market cap between US$150 mn and US$2 bn. For stocks that are Not Rated, I/B/E/S consensus forecast are used. CFROI® is a
registered trademark in the United States and other countries (excluding the United Kingdom) of Credit Suisse or its subsidiaries or affiliates.
* Companies in bold and italic indicate constituents of Credit Suisse Taiwan Small Cap Index.
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Valuations of Credit Suisse Taiwan small-cap watch list* Market CS target/ Potential Credit Year HOLT CFROI
Cap Price HOLT warranted return Suisse end CFROI Spread
Zig Sheng Ind. 1455.TW 207 10.10 10.40 2.9 Not rated Dec 39.3 25.8 0.8 0.8 1.3 (6.6) 1.5 (8.2) 12.1
Zinwell 2485.TW 321 29.90 36.57 22.3 Not rated Dec 10.6 8.8 1.4 1.3 9.2 2.0 2.7 2.6 (1.0)
Calendarized Calendarized Share price performance
P/E (x) P/B (x) NT$ term (%)
* Include the small-cap stocks in HOLT® database with market cap between US$150 mn and US$2 bn. For stocks that are Not Rated, I/B/E/S consensus forecast are used. CFROI® is a
registered trademark in the United States and other countries (excluding the United Kingdom) of Credit Suisse or its subsidiaries or affiliates.
* Companies in bold and italic indicate constituents of Credit Suisse Taiwan Small Cap Index.
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Taiwan – Screening Absolute price performance - top & bottom 10 companies Absolute price performance - top & bottom 10 companies Absolute price performance - top & bottom 10 companies
Price 1W return Price 1M return Price 3M return Company RIC (NT$) (%) Company RIC (NT$) (%) Company RIC (NT$) (%)
Winners Winners Winners Via Technologies 2388.TW 11.05 21.6 China Metal Products 1532.TW 25.10 40.2 Federal 2102.TW 20.85 53.1 Chung Hung Steel 2014.TW 8.55 18.6 King S Town Construction 2524.TW 33.20 35.6 SpringSoft 2473.TW 56.70 46.1 Ali 3041.TW 38.60 16.4 Via Technologies 2388.TW 11.05 34.6 China Metal Products 1532.TW 25.10 44.3 Elan Microelectronics 2458.TW 54.50 15.7 Shihlin Paper 1903.TW 54.50 32.0 King S Town Construction 2524.TW 33.20 38.0 Hey Song 1234.TW 46.90 14.7 Huang Hsiang Construction 2545.TW 78.90 30.8 Coxon Precise Industrial 3607.TW 53.00 37.8 Walsin Lihwa 1605.TW 10.25 13.8 Ali 3041.TW 38.60 27.8 Shihlin Paper 1903.TW 54.50 37.1 Ruentex Industries 2915.TW 66.80 12.8 AcBel Polytech 6282.TW 21.25 26.9 AcBel Polytech 6282.TW 21.25 36.2 Hannstar Display 6116.TW 3.38 12.7 Federal 2102.TW 20.85 26.4 Elan Microelectronics 2458.TW 54.50 34.2 Neo Solar Power 3576.TW 19.80 11.5 Hey Song 1234.TW 46.90 23.7 Shin Zu Shing 3376.TW 112.00 33.5 ITE Technology 3014.TW 28.60 11.3 Yunshin Con. & Dev. 5508.TWO 53.20 22.7 Chong Hong 5534.TW 77.70 33.5 Losers Losers Losers Nanya Technology 2408.TW 1.81 (8.1) Elitegroup Computer Sys. 2331.TW 9.62 (22.4) Taiwan Prosperity Chemical 4725.TW 45.70 (34.9) Nantex Industry 2108.TW 21.80 (7.7) Taiwan Prosperity Chemical 4725.TW 45.70 (19.7) Solartech Energy 3561.TW 21.40 (34.8) Taiwan Prosperity Chemical 4725.TW 45.70 (6.7) Hannstar Display 6116.TW 3.38 (18.8) Inotera Memories 3474.TW 4.97 (31.6) Rechi Precision 4532.TW 22.00 (6.6) Holiday Entertainment 9943.TW 47.30 (16.1) Nanya Technology 2408.TW 1.81 (27.0) Chin-Poon 2355.TW 34.80 (6.2) Globe Union 9934.TW 17.75 (16.1) Hannstar Display 6116.TW 3.38 (26.8) International Games 3293.TWO 108.00 (5.3) Young Optics 3504.TW 90.40 (15.9) Soft World 5478.TWO 56.40 (26.8) Yunshin Con. & Dev. 5508.TWO 53.20 (4.5) Taiwan Navigation 2617.TW 25.60 (15.8) Motech Industries 6244.TWO 31.55 (23.8) Taiwan Navigation 2617.TW 25.60 (3.4) Les Enphants 2911.TW 23.10 (14.2) Sino American Silicon 5483.TWO 39.40 (21.7) Waterland Financial 2889.TW 8.57 (3.2) Johnson Health Tech 1736.TW 68.00 (13.9) Avermedia Technologies 2417.TW 18.00 (21.2) Flexium 6269.TW 123.00 (3.1) Soft World 5478.TWO 56.40 (12.0) E-Ton 3452.TWO 12.65 (19.4)
Price-to-earnings - most & least expensive 10 companies Price-to-book - most & least expensive 10 companies CFROI® Spread - top & bottom 10 companies
Price 12 P/E Price 12 P/B Price CFROI® Spread Company RIC (NT$) (x) Company RIC (NT$) (x) Company RIC (NT$) (%)
* For stocks that are not rated, I/B/E/S consensus forecast numbers are used. CFROI® Spread is the difference between CFROI® and market implied discount rate. A larger number indicates
that more value is created by a company.
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Thailand – Company updates Major Cineplex (MAJO.BK, Bt18.10, N, TP Bt20.00)
Ticket sales likely to fall YoY again in 3Q
■ Based on Box Office Mojo data, ticket sales during July-August
have fallen 8% YoY. This implies that Major’s ticket sales
revenue could again fall short of expectation in 3Q.
■ We thus see an increased risk of Major missing our ticket sales
growth forecast this year. Assuming that Major’s 3Q ticket sales
fall in line with Box Office Mojo data, Major must generate growth
of 55% YoY in 4Q12 to meet our full-year forecast; this is a tough
target to meet, in our view.
■ The area that could surprise us on the upside is advertising
income, which could offset weaker-than-expected ticket sales.
However, we believe that, at best, this should help Major to meet
our full-year profit forecast, but we maintain there is risk of market
disappointment as 2012E consensus is 10% above our forecast.
■ We maintain NEUTRAL. Beyond 2012, potentially rising
competition from its key rival, SF Cinema, could emerge as a
new threat. So far this year, SF has already enjoyed much
stronger revenue growth than Major due to market share gains.
Bbg/RIC 18.50
20.00 (20.00)
886.27 8
3.6
2.1
Free float (%) 54.2 Performance 1M 3M 12M
Absolute (%) 1.1 6.3 17.8
Relativ e (%) (2.0) (2.7) (4.1)
Year 12/10A 12/11A 12/12E 12/13E 12/14E
5,937 6,730 7,159 7,582 8,008
1,754 1,792 1,979 2,178 2,312
617 721 833 1,052 1,178
0.73 0.83 0.93 1.18 1.32
n.a. n.a. 0 0 0
n.a. n.a. 1.05 1.25 1.46
167.2 13.9 12.9 26.3 11.9
25.5 22.4 19.8 15.7 14.0
4.3 4.5 4.6 5.8 6.5
11.2 10.5 9.3 8.2 7.4
2.8 2.8 2.7 2.6 2.6
11.4 12.6 14.0 17.2 18.7
57.8 40.9 33.1 21.8 9.5
- Consensus EPS (Bt)
EPS grow th (%)
P/E (x )
Div idend y ield (%)
EV/EBITDA (x )
P/B (x )
EBITDA (Bt mn)
Net profit (Bt mn)
EPS (Bt)
- Change from prev . EPS (%)
Price (12 Sep 12 , Bt)
TP (prev. TP Bt)
Est. pot. % chg. to TP
52-w k range (Bt)
MAJOR TB / MAJO.BK
N (N)
Daily trad v ol - 6m av g (mn)
Rating (prev. rating)
Shares outstanding (mn)
20.8 - 10.5
16,396.1/ 529.9
ROE (%)
Note1:Major Cineplex Group Public Company Limited is a Thailand-based lifestyle entertainment company. Its core businesses include cinema, bowling,
karaoke, ice skating rink, retails space, film distribution and advertising media..
Mkt cap (Bt/US$ mn)Daily trad v al - 6m av g (US$ mn)
Major shareholders Poolv araluck Family (43%)
Net debt(cash)/equity (%)
Rev enue (Bt mn)
Price performance vs. MSCI Thailand
60
80
100
120
140
09/11 11/11 01/12 03/12 05/12 07/12 09/12
Major Cineplex MSCI Thailand
Thaniya Kevalee / Research Analyst / 662 614 6219 /
Cal-Comp CCET.BK 364 2.76 0.74 (73.0) Not rated Dec 21.2 8.2 0.7 0.7 1.4 (5.6) (0.7) 6.2 3.0
Central Plaza Hotel CENT.BK 746 17.10 8.75 (48.9) Not rated Dec 41.7 21.6 4.0 3.5 3.7 (3.2) (1.2) 11.0 39.0
CH Karnchang CK.BK 416 7.80 0.95 (87.8) Not rated Dec 13.9 36.1 2.0 2.0 (1.0) (8.1) 3.3 11.4 10.6
Bank Thai CIMBT.BK 1,206 1.77 0.83 (53.4) Not rated Dec 25.8 22.3 2.5 2.4 3.8 (4.8) 0.0 (3.8) (16.9)
CPN Retail CPNRu.BK 867 16.40 22.46 36.9 Not rated Dec 14.2 13.8 1.6 1.5 9.6 4.8 0.0 5.1 15.5
Delta Electronics DELT.BK 1,058 26.25 50.10 90.9 Not rated Dec 11.4 10.4 1.6 1.6 7.1 2.6 4.0 10.8 20.4
Diamond Roofing Tiles DRT.BK 228 6.85 8.22 20.0 Not rated Dec 14.9 12.5 3.4 3.0 10.2 4.7 (2.8) 4.6 7.0
Dynasty Ceramic DCC.BK 662 50.25 46.03 (8.4) Not rated Dec 16.5 15.5 7.8 7.5 15.0 10.4 (1.0) (2.4) 0.0
Eastern Water Resources EASW.BK 683 12.70 11.19 (11.9) Not rated Dec 20.8 19.2 3.0 2.8 7.9 2.0 3.3 16.5 27.0
Electricity Generating EGCO.BK 2,126 125.00 211.30 69.0 Not rated Dec 13.2 10.5 1.1 1.1 (1.5) (6.3) 5.9 7.8 17.4
Erawan ERW.BK 203 2.80 2.81 0.2 Not rated Dec 12.7 50.9 1.8 1.7 6.5 (0.7) 5.3 7.7 8.5
Esso (TJ) ESSO.BK 1,219 10.90 10.95 0.5 Not rated Dec 40.4 10.8 1.5 1.7 (0.9) (7.1) 2.8 (0.9) 9.5
G J Steel GJS.BK 193 0.15 0.56 273.9 Not rated Dec (5.0) (4.6) 0.5 0.5 0.0 (5.1) 7.1 7.1 7.1
GFPT GFPT.BK 298 7.35 7.35 0.0 Not rated Dec 7.7 32.2 1.6 1.6 9.9 4.3 0.7 (6.4) (23.8)
GMM Grammy GRAM.BK 355 20.70 10.37 (49.9) Not rated Dec 17.5 36.6 3.7 3.2 5.1 (1.1) (2.4) (11.5) (22.6)
G Steel GSTE.BK 265 0.38 1.07 182.0 Not rated Dec (2.5) (2.3) 0.9 1.2 0.0 (5.7) 2.7 (2.6) 5.6
Share price performance
Bt term (%)P/B (x)P/E (x)
CalendarizedCalendarized
* Include the small-cap stocks in HOLT® database with market cap between US$150 mn and US$2 bn. For stocks that are Not Rated, I/B/E/S consensus forecast are used. CFROI® is a
registered trademark in the United States and other countries (excluding the United Kingdom) of Credit Suisse or its subsidiaries or affiliates
* Companies in bold and italic indicate constituents of Credit Suisse Thailand Small Cap Index
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Valuations of Credit Suisse Thailand small-cap watch list*
Market CS target/ Potential Credit Year HOLT CFROI
Cap Price HOLT warranted return Suisse end CFROI Spread
Ramkhamhaeng Hospital RAM.BK 721 1860.00 1216.86 (34.6) Not rated Dec 24.4 23.6 7.0 6.1 10.7 5.1 (1.9) 12.9 77.8
Ratchaburi Electricity RATC.BK 2,249 48.00 54.70 14.0 Not rated Dec 14.4 12.7 1.5 1.4 2.9 (2.5) 2.1 3.2 14.3
Regional Containers RCL.BK 183 6.85 13.12 91.6 Not rated Dec (7.3) (8.7) 0.4 0.5 (10.4) (17.2) (1.4) 4.6 (1.4)
Robinson Dept. Store ROBI.BK 2,287 63.75 59.00 (7.5) NEUTRAL Dec 48.7 32.2 8.1 7.2 12.3 8.0 0.8 6.3 5.4
Share price performance
Bt term (%)
Calendarized Calendarized
P/E (x) P/B (x)
* Include the small-cap stocks in HOLT® database with market cap between US$150 mn and US$2 bn. For stocks that are Not Rated, I/B/E/S consensus forecast are used. CFROI® is a
registered trademark in the United States and other countries (excluding the United Kingdom) of Credit Suisse or its subsidiaries or affiliates.
* Companies in bold and italic indicate constituents of Credit Suisse Thailand Small Cap Index
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Valuations of Credit Suisse Thailand small-cap watch list*
Market CS target/ Potential Credit Year HOLT CFROI
Cap Price HOLT warranted return Suisse end CFROI Spread
Thai Cane Paper TCP.BK 186 16.10 24.63 53.0 Not rated Dec 18.3 17.9 1.1 1.1 1.7 (3.8) (3.6) (4.7) 5.2
Thai Carbon Black TCB.BK 262 27.00 38.65 43.2 Not rated Dec 10.0 9.2 0.9 0.8 3.9 (2.5) 0.9 (5.3) 8.4
Thai Central Chemical TCCC.BK 416 22.00 25.27 14.8 Not rated Dec 12.7 11.0 2.4 2.3 9.1 4.1 (2.2) 20.2 41.0
Thai Plastic TPC.BK 841 29.75 48.22 62.1 Not rated Dec 13.8 10.6 1.9 1.9 4.6 (0.3) 0.0 8.2 3.5
Thai Ray on TR.BK 365 56.00 215.08 284.1 Not rated Sep 3.9 4.8 0.5 0.7 13.6 8.8 (1.3) (3.0) (5.1)
Calendarized Calendarized Share price performance
P/E (x) P/B (x) Bt term (%)
* Include the small-cap stocks in HOLT® database with market cap between US$150 mn and US$2 bn. For stocks that are Not Rated, I/B/E/S consensus forecast are used. CFROI® is a
registered trademark in the United States and other countries (excluding the United Kingdom) of Credit Suisse or its subsidiaries or affiliates.
* Companies in bold and italic indicate constituents of Credit Suisse Thailand Small Cap Index
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Valuations of Credit Suisse Thailand small-cap watch list*
Market CS target/ Potential Credit Year HOLT CFROI
Cap Price HOLT warranted return Suisse end CFROI Spread
Vanachai VNG.BK 194 4.60 5.09 10.7 Not rated Dec 12.8 11.1 1.0 0.9 2.1 (5.0) (3.4) 6.5 19.2
Vinythai VNT.BK 697 18.20 35.66 95.9 Not rated Dec 10.8 8.4 1.3 1.3 6.6 1.6 (1.6) 1.7 3.4
Workpoint Entertainment WORK.BK 245 29.50 22.01 (25.4) Not rated Dec 22.5 18.0 6.3 5.2 18.8 13.2 0.0 (4.1) 7.3
Calendarized Calendarized Share price performance
P/E (x) P/B (x) Bt term (%)
* Include the small-cap stocks in HOLT® database with market cap between US$150 mn and US$2 bn. For stocks that are Not Rated, I/B/E/S consensus forecast are used. CFROI® is a
registered trademark in the United States and other countries (excluding the United Kingdom) of Credit Suisse or its subsidiaries or affiliates.
* Companies in bold and italic indicate constituents of Credit Suisse Thailand Small Cap Index.
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Thailand – Screening Absolute price performance - top & bottom 10 companies Absolute price performance - top & bottom 10 companies Absolute price performance - top & bottom 10 companies
Price 1W return Price 1M return Price 3M return Company RIC (Bt) (%) Company RIC (Bt) (%) Company RIC (Bt) (%)
* For stocks that are not rated, I/B/E/S consensus forecast numbers are used. CFROI® Spread is the difference between CFROI® and market implied discount rate. A larger number indicates
that more value is created by a company
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David & Goliath 101
Companies Mentioned (Price as of 13 Sep 12)
ACE Hardware Indonesia (ACES.JK, Rp6,250.00, NEUTRAL, TP Rp5,500.00) ASM Pacific Tech. (0522.HK, HK$92.00, UNDERPERFORM, TP HK$73.50) Bekasi Fajar Industrial Estate (BEST.JK, Rp660.00, OUTPERFORM [V], TP Rp770.00) C C Land Holdings (1224.HK, HK$1.65, NOT RATED) CDL Hospitality Trusts (CDLT.SI, S$1.98, OUTPERFORM, TP S$2.32) Central China Real Estate (0832.HK, HK$1.89, NOT RATED) China Molybdenum Co Ltd. (3993.HK, HK$3.43) China Overseas Grand Oceans Group (0081.HK, HK$7.95, NOT RATED) China Tianyi Holdings (0756.HK, HK$1.18, NOT RATED) Chow Sang Sang (0116.HK, HK$17.06, OUTPERFORM, TP HK$20.00) E Ink Holdings, Inc. (8069.TWO, NT$32.40, NEUTRAL [V], TP NT$35.00) Emami (EMAM.BO, Rs507.50, OUTPERFORM, TP Rs619.00) Green Dragon Gas (GDG.L, $4.10, OUTPERFORM [V], TP $11.70) Gujarat State Petronet Ltd. (GSPT.BO, Rs78.45, OUTPERFORM, TP Rs110.00) Haitian International Holdings Ltd. (1882.HK, HK$7.89, UNDERPERFORM, TP HK$6.50) Hexaware Technologies (HEXT.BO, Rs137.55, OUTPERFORM, TP Rs160.00) Hiwin (2049.TW, NT$212.00, UNDERPERFORM [V], TP NT$195.00) Kawasan Industri Jababeka (KIJA.JK, Rp200.00, OUTPERFORM, TP Rp250.00) KWG Property Holding Ltd. (1813.HK, HK$4.50, NEUTRAL [V], TP HK$4.70) Lee & Man Paper (2314.HK, HK$3.20, UNDERPERFORM [V], TP HK$2.75) Lextar (3698.TW, NT$30.65, NEUTRAL [V], TP NT$37.00) Lippo Cikarang (LPCK.JK, Rp3,750.00, OUTPERFORM [V], TP Rp4,500.00) Lonking Holdings Ltd. (3339.HK, HK$1.34, NEUTRAL [V], TP HK$1.80) Luk Fook Holdings International (0590.HK, HK$22.45, NEUTRAL [V], TP HK$23.30) Major Cineplex Group Pcl (MAJO.BK, Bt18.10, NEUTRAL, TP Bt20.00) Mitra Adiperkasa (MAPI.JK, Rp7,100.00, OUTPERFORM [V], TP Rp8,400.00) Multi Commodities Exchange of India (MCEI.BO, Rs1,255.10, OUTPERFORM [V], TP Rs1,450.00) Novatek Microelectronics Corp Ltd. (3034.TW, NT$103.50, OUTPERFORM, TP NT$118.00) Pacific Basin Shipping Ltd. (2343.HK, HK$3.84, UNDERPERFORM [V], TP HK$3.40) Pacific Textiles Group (1382.HK, HK$5.01, OUTPERFORM, TP HK$5.60) Semiconductor Manufacturing International Corp. (0981.HK, HK$0.30, NEUTRAL [V], TP HK$0.41) Shinsegae Co. (004170.KS, W217,000, NEUTRAL, TP W250,000) Skyworth Digital (0751.HK, HK$3.30, OUTPERFORM [V], TP HK$5.70) SP Setia (SETI.KL, RM3.78, NEUTRAL, TP RM3.60) Spreadtrum Communication (SPRD.OQ, $20.27, OUTPERFORM [V], TP $26.50) Sunevision Holdings Ltd. (8008.HK, HK$1.64) Surya Semesta Internusa (SSIA.JK, Rp1,260.00, OUTPERFORM [V], TP Rp1,580.00) Taiwan Surface Mounting Technology (6278.TW, NT$49.80, NEUTRAL, TP NT$54.00) Techtronic Inds. (0669.HK, HK$12.68, NEUTRAL, TP HK$9.65) Texwinca Holdings (0321.HK, HK$5.33, NEUTRAL, TP HK$5.50) Varitronix International (0710.HK, HK$2.66, OUTPERFORM, TP HK$3.65) VTech Holdings (0303.HK, HK$94.05, NEUTRAL, TP HK$84.00) Yue Yuen Industrial Holding (0551.HK, HK$24.60, NEUTRAL, TP HK$25.70) Liping Zhang, an employee of Credit Suisse, is an independent non-executive director of Zhejiang Expressway.
Disclosure Appendix Important Global Disclosures
The analysts identified in this report each certify, with respect to the companies or securities that the individual analyzes, that (1) the views expressed in this report accurately reflect his or her personal views about all of the subject companies and securities and (2) no part of his or her compensation was, is or will be directly or indirectly related to the specific recommendations or views expressed in this report. The analyst(s) responsible for preparing this research report received compensation that is based upon various factors including Credit Suisse's total revenues, a portion of which are generated by Credit Suisse's investment banking activities.
Analysts’ stock ratings are defined as follows: Outperform (O): The stock’s total return is expected to outperform the relevant benchmark* by at least 10-15% (or more, depending on perceived risk) over the next 12 months. Neutral (N): The stock’s total return is expected to be in line with the relevant benchmark* (range of ±10-15%) over the next 12 months. Underperform (U): The stock’s total return is expected to underperform the relevant benchmark* by 10-15% or more over the next 12 months. *Relevant benchmark by region: As of 29th May 2009, Australia, New Zealand, U.S. and Canadian ratings are based on (1) a stock’s absolute total return potential to its current share price and (2) the relative attractiveness of a stock’s total return potential within an analyst’s coverage universe**, with Outperforms representing the most attractive, Neutrals the less attractive, and Underperforms the least attractive investment opportunities.
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Some U.S. and Canadian ratings may fall outside the absolute total return ranges defined above, depending on market conditions and industry factors. For Latin American, Japanese, and non-Japan Asia stocks, ratings are based on a stock’s total return relative to the average total return of the relevant country or regional benchmark; for European stocks, ratings are based on a stock’s total return relative to the analyst's coverage universe**. For Australian and New Zealand stocks, 12-month rolling yield is incorporated in the absolute total return calculation and a 15% and a 7.5% threshold replace the 10-15% level in the Outperform and Underperform stock rating definitions, respectively. The 15% and 7.5% thresholds replace the +10-15% and -10-15% levels in the Neutral stock rating definition, respectively. **An analyst's coverage universe consists of all companies covered by the analyst within the relevant sector. Restricted (R): In certain circumstances, Credit Suisse policy and/or applicable law and regulations preclude certain types of communications, including an investment recommendation, during the course of Credit Suisse's engagement in an investment banking transaction and in certain other circumstances.
Volatility Indicator [V]: A stock is defined as volatile if the stock price has moved up or down by 20% or more in a month in at least 8 of the past 24 months or the analyst expects significant volatility going forward.
Analysts’ coverage universe weightings are distinct from analysts’ stock ratings and are based on the expected performance of an analyst’s coverage universe* versus the relevant broad market benchmark**: Overweight: Industry expected to outperform the relevant broad market benchmark over the next 12 months. Market Weight: Industry expected to perform in-line with the relevant broad market benchmark over the next 12 months. Underweight: Industry expected to underperform the relevant broad market benchmark over the next 12 months. *An analyst’s coverage universe consists of all companies covered by the analyst within the relevant sector. **The broad market benchmark is based on the expected return of the local market index (e.g., the S&P 500 in the U.S.) over the next 12 months.
Credit Suisse’s distribution of stock ratings (and banking clients) is:
Global Ratings Distribution Outperform/Buy* 45% (52% banking clients) Neutral/Hold* 42% (49% banking clients) Underperform/Sell* 11% (40% banking clients) Restricted 2%
*For purposes of the NYSE and NASD ratings distribution disclosure requirements, our stock ratings of Outperform, Neutral, and Underperform most closely correspond to Buy, Hold, and Sell, respectively; however, the meanings are not the same, as our stock ratings are determined on a relative basis. (Please refer to definitions above.) An investor's decision to buy or sell a security should be based on investment objectives, current holdings, and other individual factors.
Credit Suisse’s policy is to update research reports as it deems appropriate, based on developments with the subject company, the sector or the market that may have a material impact on the research views or opinions stated herein.
Credit Suisse's policy is only to publish investment research that is impartial, independent, clear, fair and not misleading. For more detail please refer to Credit Suisse's Policies for Managing Conflicts of Interest in connection with Investment Research: http://www.csfb.com/research-and-analytics/disclaimer/managing_conflicts_disclaimer.html
Credit Suisse does not provide any tax advice. Any statement herein regarding any US federal tax is not intended or written to be used, and cannot be used, by any taxpayer for the purposes of avoiding any penalties.
Important Regional Disclosures
Singapore recipients should contact a Singapore financial adviser for any matters arising from this research report.
Restrictions on certain Canadian securities are indicated by the following abbreviations: NVS--Non-Voting shares; RVS--Restricted Voting Shares; SVS--Subordinate Voting Shares. Individuals receiving this report from a Canadian investment dealer that is not affiliated with Credit Suisse should be advised that this report may not contain regulatory disclosures the non-affiliated Canadian investment dealer would be required to make if this were its own report. For Credit Suisse Securities (Canada), Inc.'s policies and procedures regarding the dissemination of equity research, please visit http://www.csfb.com/legal_terms/canada_research_policy.shtml.
As of the date of this report, Credit Suisse acts as a market maker or liquidity provider in the equities securities that are the subject of this report.
Principal is not guaranteed in the case of equities because equity prices are variable.
Commission is the commission rate or the amount agreed with a customer when setting up an account or at anytime after that.
For Thai listed companies mentioned in this report, the independent 2010 Corporate Governance Report survey results published by the Thai Institute of Directors Association are being disclosed pursuant to the policy of the Office of the Securities and Exchange Commission: Major Cineplex Group Pcl(Very Good). Taiwanese Disclosures: This research report is for reference only. Investors should carefully consider their own investment risk. Investment results are the responsibility of the individual investor. Reports may not be reprinted without permission of CS. Reports written by Taiwan-based analysts on non-Taiwan listed companies are not considered recommendations to buy or sell securities under Taiwan Stock Exchange Operational Regulations Governing Securities Firms Recommending Trades in Securities to Customers.
To the extent this is a report authored in whole or in part by a non-U.S. analyst and is made available in the U.S., the following are important disclosures regarding any non-U.S. analyst contributors:
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The non-U.S. research analysts listed below (if any) are not registered/qualified as research analysts with FINRA. The non-U.S. research analysts listed below may not be associated persons of CSSU and therefore may not be subject to the NASD Rule 2711 and NYSE Rule 472 restrictions on communications with a subject company, public appearances and trading securities held by a research analyst account. • Kenny Lau, CFA, non-U.S. analyst, is a research analyst employed by Credit Suisse (Hong Kong) Limited. • Eva Wang, non-U.S. analyst, is a research analyst employed by Credit Suisse (Hong Kong) Limited. • Anantha Narayan, non-U.S. analyst, is a research analyst employed by Credit Suisse Securities (India) Private Limited. • Teddy Oetomo, non-U.S. analyst, is a research analyst employed by PT Credit Suisse Securities Indonesia. • Minseok Sinn, non-U.S. analyst, is a research analyst employed by Credit Suisse Securities (Europe) Limited, Seoul Branch. • Loke Foong Wai, non-U.S. analyst, is a research analyst employed by Credit Suisse Securities (Malaysia) Sdn Bhd.. • Su Tye Chua, non-U.S. analyst, is a research analyst employed by Credit Suisse AG, Singapore Branch. • Chai Techakumpuch, non-U.S. analyst, is a research analyst employed by Credit Suisse Securities (Thailand) Limited.
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For Credit Suisse disclosure information on other companies mentioned in this report, please visit the website at www.credit-suisse.com/researchdisclosures or call +1 (877) 291-2683. Disclaimers continue on next page.
14 September 2012
Asia Pacific
Equity Research
DG_120914-final.doc
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