Morning Matters - RHB TradeSmart...The market is large, but has problems with price benchmarking and the actual objective of trading. For example, sellers don't know the real value

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18-Sep-2013

Morning Matters

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WHAT’S INSIDE

On The Platter

Energy- Overweight (Maintained): A World Less Reliant On Oil

We believe commodity prices will come under pressure in the longer term as the US becomes more self-sufficient. We think the world can be less reliant on oil in the future, but the fuel will remain an important component of the energy mix. We remain OVERWEIGHT on the energy sector given the defensiveness of energy stocks over the next 12 months. Top picks are: Thai Oil (TOP, BUY,TP: THB69.1), PTT Global Chemicals (PTTGC, BUY, TP THB82) and PTT ( PTT, BUY, THB388). CP ALL (CPALL TB; FVTHB48-Buy): More Clarity On Debt Refinancing

The news wires shed more light on the refinancing of CPALL’s USD6bn debt yesterday. As we believe some investors may have stayed on the sidelines due to uncertainty over the group’s debt plan, the improved clarity on its refinancing plan may be a positive. We are likely to maintain our call pending a discussion with its management.

MEDIA HIGHLIGHTS

THAI urged to come up with more options

CRC launches chain of household-item stores

KTB Leasing bids to stabilise used-car prices

SCG joint venture acquires 90% of Indonesia's Primacorr

Expressway authority to appeal compensation ruling

TAA chief takes on further China role

ECONOMIC HIGHLIGHTS

China Developer’s 20% Loan After Bank Rebuff Signals Risk

Stevens to Bear Abbott’s Stimulus Burden in Slowing Australia

Less Tapering Becomes Tighter Credit No Matter What Fed Says

China Increased Holdings of Treasuries in July as Yields Surged

Cyprus Plans to End Capital Controls in January, President Says

SET Intra-Day Graph

Source: Bloomberg

Key Market Indices (17 September 2013)

Value Chg % Chg % YTD

SET 1443.78 -1.33 -0.1% 3.7%

SET50 988.56 -0.81 -0.1% 4.6%

SET100 2174.39 -2.20 -0.1% 4.6%

Dow Jones 15529.73 34.95 0.2% 18.5%

S&P500 1704.76 7.16 0.4% 19.5%

Nasdaq 3745.70 27.85 0.7% 24.0%

FTSE 6570.17 -52.69 -0.8% 11.4%

FSSTI 3180.92 1.44 0.0% 0.4%

Hang Seng 23180.52 -71.89 -0.3% 2.3%

Nikkei 14445.98 41.34 0.3% 39.0%

KLCI 1774.94 4.14 0.2% 5.1%

SHANGHAI SE 2185.56 -45.84 -2.1% -3.7%

JCI 4517.62 -4.62 -0.1% 4.7%

SET 5-yr avg 2012 2013F

PE (x) 14.1 15.9 14.4

P/BV (x) 1.8 2.3 2.2

Yield (%) 4.1 3.0 3.2

Key Statistics

SET Value by investor Type: Daily

Buy (THBm) Sell (THBm) Net (THBm)

Institution 4,367.22 3,753.49 613.73

Proprietary 7,486.23 6,834.26 651.96

Foreign 10,741.50 9,878.24 863.26

Retail 23,161.63 25,290.58 -2,128.95

SET Value by investor Type

MTD (THBm) YTD (THBm) Institution 12,570.11 83,837.65

Proprietary 4,676.92 -6,133.31

Foreign 14,857.22 -101,168.10

Retail -32,104.26 23,463.76

SET50 Index Future

Long Short Net MTD YTD

Institution 6,893 8,326 -1,433 -3,994 16,447

Foreign 5,559 3,304 2,255 8,707 -13,064

Local 5,982 6,804 -822 -4,713 -3,383

Foreign Fund Flows (USDm) Last MTD YTD YTD(%) 27.2 464.4 -3,302.1 -253.6

See important disclosures at the end of this report 2

Media Highlights

THAI urged to come up with more options

Thai Airways International chairman Ampon Kittiampon is calling on the management to come up with more options on handling the airline's four Airbus A340-500 aircraft for the board's consideration. He explained that the management currently only had one option - selling the newest aircraft for US$23.5 million (Bt745 million), which is just a third of its $67.07 million book value. He said the management could either negotiate with prospective buyers or come up with new options to make use of the aircraft. Or it could come up with ways to prevent THAI from incurring big losses from the sale. "The board's opinion is not split regarding this sale, but there must be a way of explaining why we need to sell it at more than $40 million below book value. The board needs to explain to shareholders why it is incurring such a huge loss," he said. THAI's board will convene on Thursday and the sale of the long-haul aircraft is not on the agenda. (The Nation) CRC launches chain of household-item stores

Backed by Bt1.5 billion, Central Retail Corporation is rolling out Baan & Beyond, the country's first nationwide department-store chain for household products, under Thai Watsadu management. "An analysis of the property market revealed a growth rate that is on the rise," Suthisarn Chirathivat, president of Baan & Beyond as well as HomeWorks, Thai Watsadu and Power Buy for CRC Thai Watsadu, said yesterday. Baan & Beyond is expected to extend the group's home-decor range to attract customers from all segments. It aims to be a top-three player in three years with a strategy that lines up with the needs of the modern consumer and a clear trend of growth and expansion in the property and home-decor product markets. Branches will open in major provinces or cities with high growth potential. With plenty of room for growth still in the home-decor retail market, CRC Thai Watsadu - with more than 15 years of experience - is set to introduce a new business model under the "Everyday New Home" motto. (The Nation)

KTB Leasing bids to stabilise used-car prices

Krungthai Bank's leasing arm is talking with a strategic partner in the used-car business to raise the standards of this segment and trim non-performing loans. "The new programme is aimed at helping buyers get quality vehicles for reasonable prices. That will help us get quality borrowers and the NPLs from used cars will be reduced," Pinyawat Chantrakantanond, managing director of KTB Leasing, said yesterday. The details of the new business model will be available late this month, he said. The company wants help screening buyers after experiencing sour loans due to the lack of standards in the Bt300-billion used-car market, which has spawned speculation. The market is large, but has problems with price benchmarking and the actual objective of trading. For example, sellers don't know the real value of their vehicle, so they accept a low offer from used-car lots. Then the dealer sets a high price for the vehicle to be resold to a new buyer. KTB Leasing did not actively pursue used-car loans because of the rise in NPLs and the dubious methods of setting the prices of such vehicles. Its used-car loans have fallen to 12-13 per cent from 15 per cent of its portfolio this year. (The Nation)

SCG joint venture acquires 90% of Indonesia's Primacorr

am Cement Group is expanding its packaging-chain business by acquiring 90 per cent of Primacorr Mandiri, a producer of corrugated containers in Indonesia, as part of its stated vision of becoming a sustainable-business leader in Asean. Kan Trakulhoon, president and chief executive of SCG, said yesterday that the deal by Thai Containers Group Co, a 70:30 joint venture of SCG Paper and Rengo Co (Japan), was valued at Bt395 million. TCG acquired 90 per cent of Primacorr, with the remaining 10 per cent owned by existing shareholders. "SCG Paper focuses on two strategic chains, packaging and fibrous," he said. "This investment in Primacorr by Thai Containers Group is part of the expansion in the packaging chain, and is SCG's first strategic entry into the Indonesian packaging market, which is expected to grow rapidly, driven by both local consumption and foreign investment." With this addition, TCG's production capacity will increase from 976,000 tonnes per year to 1,013,000 tonnes from its ASEAN production bases in Thailand, Malaysia, Singapore, Vietnam and Indonesia. (The Nation) Expressway authority to appeal compensation ruling

Expressway Authority of Thailand (Exat) governor Aiyanat Tinapai vowed to appealed a court ruling that it must pay compensation to Bangkok Expressway (BECL) worth Bt5 billion. He said that the Attorney General’s Office will take care of the appeal. "This concerns the differing opinion on the opening date of the second-stage expressway," he said. Exat has a month to appeal the decision. On September 13, the Central Administrative Court ruled that Exat has to share revenue with BECL for the period from November 13, 1992-September 2, 1993. Plus interest, this amounts to Bt5 billion. (Bangkok Post)

TAA chief takes on further China role

Thai AirAsia (TAA) boss Tassapon Bijleveld has quietly put on another hat, seemingly a larger one with a dragon embroidered on it. The 47-year-old Thai is now tasked to look after the burgeoning Chinese market for the no-frills AirAsia group's affiliated airlines including the long-haul AirAsia X as chief executive of AirAsia Greater China. TAA's chief executive assumes the role played by Kathleen Tan, the Singaporean who left her post as AirAsia Group's commercial head and senior vice-president of Chinese operations early this year to become chief executive of AAE Travel. AAE Travel is a joint venture between AirAsia, the largest low-cost carrier (LCC) group in Asia, and Expedia, the world's largest online travel company. "My job is to oversee the growth of all AirAsia airlines in China, which offers vast market opportunities as more and more Chinese are flying," Mr Tassapon told the Bangkok Post. (Bangkok Post)


Economic Highlights

China Developer’s 20% Loan After Bank Rebuff Signals Risk

China property developer Zhang Fuguo was rejected by banks for a loan to help keep building two office towers in the central city of Zhengzhou. So he turned to a manufacturer of water and gas meters. The 50 million yuan ($8.2 million) loan last month at a 20 percent interest rate will help Zhang pay workers and buy materials and was like “delivering coal on a snowy day,” he said. It was less so for one board member at lender Henan Suntront Technology Co. (300259), who abstained from approval on concern that Zhang’s company would fail to repay the debt. So-called entrusted loans, in which banks are “entrusted” with funds as middlemen between companies, increasingly grease the wheels of China’s economy, withstanding a crackdown on shadow banking this year and rising to a record 293.8 billion yuan in August. The increase was part of a surge in non-bank credit that may add to default risks threatening Premier Li Keqiang’s efforts to sustain 7 percent expansion this decade. (Bloomberg) Stevens to Bear Abbott’s Stimulus Burden in Slowing Australia

Australia today sees the swearing in of its 28th prime minister, with Tony Abbott pledging to rein in spending even as the growth outlook weakens -- stepping up challenges for Glenn Stevens, who begins his final term as central bank governor with the cash rate at a record low. The divergence of monetary and fiscal policy in the world’s 12th largest economy raises the risk of tension between Abbott, 55, and Stevens, 55, who was reappointed by the previous administration. The Reserve Bank of Australia has to contend with the danger of distorting asset prices from any extension of a policy easing cycle already two years long. Stevens yesterday said 2.25 percentage points of reductions to a record low 2.5 percent are already providing “a substantial degree of policy stimulus.” Abbott has pledged to terminate 12,000 civil service positions and is targeting a budget surplus of 1 percent of gross domestic product in a decade. (Bloomberg) Less Tapering Becomes Tighter Credit No Matter What Fed Says

Federal Reserve Chairman Ben S. Bernanke sent bond yields a percentage point higher just by talking about adding stimulus at a slower pace. The rout serves as a warning to monetary policy makers that their exit from record accommodation won’t be easy to control. The jump in yields has pushed up the cost of mortgages for millions of Americans, curbed demand for homes and prompted thousands of job cuts at Bank of America Corp. and Wells Fargo & Co., all at a time when the Fed’s policies are aimed at creating jobs and supporting housing. Bernanke has stressed that any reduction in the amount of money the central bank pumps into the financial system each month doesn’t mean policy is getting any more restrictive. That message hasn’t been heeded by bond investors, demonstrating how hard it will be for the Fed to control long-term interest rates as it moves toward tightening, according to Lou Crandall, chief economist at Wrightson ICAP LLC in Jersey City, New Jersey. (Bloomberg)

China Increased Holdings of Treasuries in July as Yields Surged

China, the largest foreign lender to America, increased its holdings of Treasuries in July as speculation the Federal Reserve will slow purchases pushed U.S. bond yields to the highest level in two years. China’s stake increased by $1.5 billion in July, or 0.1 percent, to $1.277 trillion, after declining the prior month, according to Treasury Department data released yesterday. Treasuries held by Japanese investors, who have the second largest stake in U.S. government debt, rose to a record. The growth of China’s holdings comes as overseas holdings of Treasuries have grown $16.3 billion, or 0.3 percent, this year, the slowest pace since a 2 percent decline in the first seven months of 2006. Treasuries have lost 3.7 percent this year, according to Bank of America Merrill Lynch indexes, headed for the worst performance since 2009. (Bloomberg) Cyprus Plans to End Capital Controls in January, President Says

Cyprus plans to lift all restrictions on the movement of money in January, almost a year after becoming the first euro member to seize bank deposits and impose capital controls to avert a financial collapse. President Nicos Anastasiades said in an interview in Nicosia yesterday that his country will be “the best” at implementing its agreement with international creditors as it tries to claw back to growth after forcing losses on uninsured depositors in the Mediterranean island’s two largest banks. The third-smallest economy in the 17-nation euro area, Cyprus was approved for a 1.5 billion-euro ($2 billion) payout by euro-region finance ministers on Sept. 13. It was the second disbursement under a 10 billion-euro rescue program following the country’s financial meltdown mainly as a result of banking losses on Greek government bonds. (Bloomberg)


Outperform

Current Target Upside/

Rec. Price Price Downside PE (x) Yield (%) Remarks

(Bt) (Bt) (%) 2013F 2013F

ADVANC Buy 273.00 319.00 16.8 21.5 4.7

AOT Buy 193.50 222.00 14.7 25.6 1.6

BTS Trading Buy 8.50 10.20 20.0 39.2 6.4

INTUCH Trading Buy 84.25 104.00 23.4 17.9 5.1 .

PTT Buy 339.00 388.00 14.5 8.6 4.1

PTTGC Buy 73.00 82.00 12.3 9.8 4.6

Underperform

Current Target Upside/

Rec. Price Price Downside PE (x) Yield (%) Remarks

(Bt) (Bt) (%) 2013F 2013F

AP Neutral 5.80 6.30 14.0 6.7 3.3

KTB Buy 20.80 28.30 36.1 9.6 3.7

TCAP Neutral 34.75 41.00 18.0 4.6 3.8

TISCO Sell 40.50 41.00 1.2 7.6 6.3

Rank Symbol Rank Symbol17-Sep 16-Sep 12-Sep 11-Sep 10-Sep 17-Sep 16-Sep 12-Sep 11-Sep 10-Sep

1 KBANK 543.4 396.7 129.0 94.4 685.6 1 TMB (210.1) (93.0) 35.3 37.3 20.4

2 PTT 304.8 321.5 81.0 111.0 470.8 2 LH (70.9) 73.9 22.6 42.1 9.1

3 BAY 166.7 68.9 53.2 (82.6) 282.4 3 IVL (69.3) 33.7 21.5 59.4 18.8

4 PTTEP 165.2 242.7 78.7 159.5 387.4 4 BGH (68.4) 27.8 (22.9) 11.4 52.7

5 CPALL 136.6 (76.2) 38.2 64.1 48.4 5 TCAP (66.6) 41.1 (76.4) (72.4) 129.1

6 ADVANC 121.0 (113.0) 248.2 (243.9) 90.7 6 TPIPL (59.7) 0.2 5.3 9.3 0.9

7 BANPU 108.1 34.8 186.2 20.5 60.2 7 TOP (50.2) 99.8 17.3 29.8 46.6

8 PTTGC 98.8 95.5 50.6 83.5 205.7 8 JAS (50.1) (17.6) 15.3 8.5 28.8

9 SCB 89.9 219.2 108.5 100.5 578.4 9 DTAC (40.2) (17.8) (86.1) 15.3 92.8

10 STEC 84.4 109.3 210.4 85.8 44.2 10 MAJOR (37.9) (24.0) 0.7 14.7 (39.3)

11 EGCO 72.4 54.1 8.0 (6.1) 24.1 11 TRUE (22.5) 13.8 15.7 24.9 41.7

12 KTB 72.2 144.0 64.7 12.0 78.2 12 AMATA (20.4) 6.5 (12.7) (1.5) 11.6

13 CPN 57.3 32.6 23.7 1.8 35.1 13 ERW (18.7) 19.0 11.4 2.9 25.1

14 INTUCH 51.5 345.8 66.6 (103.6) (6.0) 14 IRPC (18.3) 24.2 9.8 13.0 37.4

15 BEC 41.0 56.3 47.6 27.6 24.5 15 TASCO (17.7) (0.6) 0.2 0.3 (0.2)

16 CPF 38.1 114.3 21.5 42.0 88.7 16 CK (15.8) 5.1 (43.7) (13.5) (3.1)

17 TUF 31.8 9.3 4.7 (19.5) (27.3) 17 BECL (12.9) (10.9) 5.3 2.0 3.2

18 AOT 31.6 202.6 51.3 95.5 174.6 18 SPALI (6.2) 19.9 (10.6) (75.3) 4.4

19 AP 23.2 87.7 0.3 (10.2) 0.0 19 RATCH (6.2) 7.4 2.1 7.1 4.8

20 CCET 22.9 17.2 23.1 7.9 1.7 20 MINT (4.6) 24.0 13.4 0.3 69.0

% No.of Shars

Symbol BUY SELL Total NET Turnover Symbol In Hand

1 KBANK 1,043.6 500.3 1,543.9 543.4 39.1 1 TISCO-P 0.02 0.03 66.2

2 ADVANC 460.7 339.8 800.5 121.0 24.4 2 BBL 578.3 1,908.8 30.3

3 BBL 404.3 393.3 797.5 11.0 53.7 3 KBANK 652.5 2,393.3 27.3

4 SCC 312.6 290.1 602.6 22.5 41.8 4 INTUCH 745.5 3,206.4 23.3

5 TMB 84.5 294.6 379.2 (210.1) 12.8 5 E-W1 75.0 347.0 21.6

6 PTT 329.5 24.7 354.2 304.8 15.8 6 SPALI 370.8 1,716.6 21.6

7 KTB 206.3 134.1 340.5 72.2 12.3 7 GOLD-W1 74.2 392.1 18.9

8 IVL 132.8 202.1 335.0 (69.3) 24.2 8 LH 1,815.6 10,025.9 18.1

9 INTUCH 188.5 137.0 325.5 51.5 13.1 9 THRE 634.9 3,512.5 18.1

10 STEC 203.9 119.4 323.3 84.4 24.8 10 LPN 253.9 1,475.7 17.2

11 TOP 110.2 160.5 270.7 (50.2) 23.1 11 TWFP 15.9 95.1 16.8

12 CPALL 198.3 61.7 260.0 136.6 7.9 12 DTAC 372.2 2,367.8 15.7

13 DTAC 97.5 137.7 235.3 (40.2) 39.1 13 TCAP 194.1 1,277.8 15.2

14 SCB 159.2 69.4 228.6 89.9 8.0 14 THIP 1.2 8.0 14.5

15 LH 73.3 144.2 217.4 (70.9) 52.3 15 LALIN 114.5 825.0 13.9

16 CPN 135.6 78.3 213.8 57.3 35.1 16 AP 391.7 2,859.9 13.7

17 AOT 121.2 89.5 210.7 31.6 12.4 17 BAY 816.6 6,074.1 13.4

18 PTTEP 186.2 21.0 207.1 165.2 13.3 18 GBX 139.2 1,089.1 12.8

19 BAY 183.5 16.9 200.4 166.7 13.5 19 PRANDA 52.0 409.1 12.7

20 TRUE 71.9 94.4 166.3 (22.5) 2.5 20 LRH 21.0 166.7 12.6

Source: SET,RHB OSK

Capital Shares

Paid Up Capital % of Paid Up

--------------NVDR Most Active Values (Bt m)--------------- -----------NVDR Outstanding Share (m shares)-----------

Top 20 Net SellNVDR Net Sell Value (Bt mn)

NVDR Daily Trading by Stock

Top 20 Net BuyNVDR Net Buy Value (Bt mn)

Sector Update, 17 September 2013

Energy Overweight (Maintained)

A World Less Reliant On Oil

Macro Risks Growth Value

We believe commodity prices will come under pressure in the longer term as the US becomes more self-sufficient. We think the world can be less reliant on oil in the future, but the fuel will remain an important component of the energy mix. We remain OVERWEIGHT on the energy sector given the defensiveness of energy stocks over the next 12 months. Top picks are: Thai Oil (TOP, BUY,TP: THB69.1), PTT Global Chemicals (PTTGC, BUY, TP THB82) and PTT ( PTT, BUY, THB388).

For now and the shorter term, we think the current demand and supply

situation for each commodity will have a more immediate impact on prices as well as the performance of the stocks under our coverage.

We are bullish on the energy sector over the next 12 months. With the

overall slowing down of the Thai economy, energy stocks provide a good defensive play.

The pace of growth in Thailand‟s domestic economy influences the

growth of demand for primary energy. Positive and strong economic growth will lead to similar growth in the demand for primary energy. However, note that even with negative economic growth (as in 2009), the demand for primary energy still rose, albeit at a slower pace.

A slowdown in economic activity does not materially impact the earnings

of the energy companies under our coverage. As Thailand is a net

importer of most petroleum commodities, most of the energy companies‟ plants are running at full or optimal levels to cater to the domestic market. The factors that have a material impact on companies‟ earnings

are crude oil prices, product spreads, plant utilisation rates and forex volatility.

Overall, we see the seasonally stronger crude oil prices in 2H13

benefiting most of the energy companies under our coverage (through stock gains). The overall weakening of the THB/USD is also a positive since most of the energy companies that we cover have sales and costs denominated in US dollars..

Com pany Nam e

Price

Targe t

P/E (x)

De c-13F P/B (x)

De c-13F Yie ld (%)

De c-13F

Rating

Bangchak Petroleum THB33 THB41 10.3 1.3 3.9 NEUTRAL Banpu THB301 THB357 40.2 1.0 2.4 BUY Electricity Generating THB127 THB142 10.4 0.9 4.2 NEUTRAL Esso (Thailand) THB7 THB7 13.7 1.0 2.9 NEUTRAL Glow Energy THB70 THB69 12.8 2.5 4.0 NEUTRAL Indorama Ventures PCL THB23 THB26 37.1 1.8 0.8 BUY

Kannika Siamwalla, CFA 66 2862 9744 Licence No.23517

IRPC PCL THB3 THB4 18.2 0.9 3.4 SELL

[email protected] PTT THB340 THB388 8.6 1.4 4.0 BUY

PTT Exploration & Production THB174 THB159 11.4 1.8 3.5 NEUTRAL

PTT Global Chemical THB74 THB82 9.9 1.4 4.5 BUY

Thai Oil THB61 THB69 9.9 1.3 4.0 BUY Source: Company data, RHB estimates

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Oil & Gas 17 September 2013


Introduction

The oil market’s ability to withstand crisis has been tested many times over the past two years by civil uprising, terrorist attacks, natural disasters, production outages and trade embargoes within the MENA region. Yet the oil market and oil prices never really reached the sky-high levels we all witnessed in 1H08. This is a result of the North American supply revolution and cyclical factors (economic weakness) as well as effective and timely response by policy makers in major producing and consuming countries. The MENA region will remain the wild card for the oil/gas markets for many years to come, but we believe that it is the US supply revolution that will, to a certain extent, keep markets calmer than before.

In this report, we highlight the peak demand concept – where the abundance of

natural gas as well as technological innovation in the automotive industry will dampen the global thirst for oil. We also highlight that oil as a percentage of total global primary demand has been declining over the past 40 years, and giving way to coal, natural gas and to a certain extent, renewables.

Finally, one of the most important revolutions in the energy industry in recent history is unfolding in the place where it matters the most. That is the shale gas and oil revolution in the world‟s largest consumer and importer of the world - the US. As the US becomes more self-reliant, more oil and gas is freed up in the global supply. This, coupled with more discoveries of both conventional and unconventional resources around the world, will put downward pressure or at least cap the petroleum, related- commodity prices globally.

We believe that immediate impact of this shale gas/shale oil revolution will be felt in the US and its benefits will be in the electricity, petrochemicals, manufacturing and transportation sectors. We believe that the repercussions of this revolution will be felt globally over the next decade.

Longer-term pressure on global commodity prices. The US is the world‟s largest consumer and importer of oil and natural gas. Given the significant increases in oil and gas production in that country due to its shale gas and oil revolution, US imports of both commodities have declined over the past several years. This has freed up global supplies and provided more price stability, to some extent. This trend will continue as the US and the world continue to search for and unlock more conventional and unconventional resources. We believe that over the longer term, this will put downward pressure on global commodity prices.

We may be less reliant on oil in the future. It remains debatable as to how oil demand will develop amid an ever-changing landscape in the oil & gas and automotive industries, which accounts for 60-70% of today‟s consumption of

oil. What is certain is that the future will be less dependent on oil than it is currently. We think the unlocking of unconventional oil & gas will undoubtedly benefit consumers globally and change the geopolitical landscape. Meanwhile, technological innovation in the automotive industry will make vehicles consume less oil, thus curbing oil demand growth to some extent. However, we believe that oil will still remain an important component of the global energy mix for many years to come.

Impact on the energy sector: As we believe longer term commodity prices may come under pressure as more countries (starting with the US) become more self-sufficient in their primary energy needs, we maintain our NEUTRAL call on the energy sector in the longer term. However, we are bullish on the energy sector over the next 12 months, as we believe the stocks under our coverage are good defensive plays.



Long-Term Outlook

The issue in the O&G industry has changed

from peak oil production to peak demand for oil

Natural gas reserves have surged sharply,

following the discoveries of unconventional and conventional natural gas

Automotive technology makes cars more

efficient

Peak demand for oil

Since the discovery of oil, there have been debates on when oil supply will peak. The peak oil concept is a belief that the rate of global oil production will peak and start to decline at some point in the future. However, this thinking has changed somewhat due to the increase in global oil/gas reserves and production currently. The new concept of “peak demand for oil”, which was featured in The Economist on 3 Aug 2013, has now taken centre-stage.

The peak in oil demand is near. Oil demand in rich, developed countries, which have already peaked, has been falling since 2005. Two revolutions are expected to quench the world‟s thirst for oil.

Firstly, hydraulic fracturing (fracking) has unleashed huge supplies of „unconventional‟ natural gas from shale beds. This, along with new discoveries of conventional gas, has helped increase world reserves from 50 years to 200 years. Gas has the potential to replace oil in ships, power stations, petrochemical plants and domestic and industrial heating systems – which could displace a few million barrels

of oil a day by 2020.

The other change is automotive technology. Both petrol and diesel engines have become more efficient, covering more mileage on less petrol. The materials used to make cars are becoming lighter and stronger. Electric, hybrid, natural gas and hydrogen fuel cell cars are increasingly popular. With 60% of global oil demand going to fuel tanks, these changes could somewhat curtail oil demand. A study shows that if fuel efficiency of cars and trucks improves by an average of 2.5% p.a., it will be

Oil demand will continue to grow

We do envision a world less dependent on

oil, but this will likely occur gradually and not overnight

enough to rein in oil demand. The study also predicts that a peak of less than 92mbpd (million barrels per day) will come in over the next few years.

The oil „super majors‟ and the International Energy Agency (IEA) point out that most

of the emerging economies have a long way to go before their car ownership and vehicle miles per capita are on par with the US. However, such comparisons may not be accurate as some emerging markets, particularly China, are determined to reduce dependence on oil and have imposed policies that are designed to leapfrog the country‟s transportation system to hybrids. As such, demand for oil will come under pressure.

We find the idea of peak demand interesting, as this thinking is supported by a significant rise in natural gas reserves and better fuel efficiency driven by vehicle technologies. However, we believe that it will take a long time for an oil-reliant world to transition into one based on natural gas. That said, we do envision a world less dependent on oil, but this will likely occur gradually rather than overnight.

Figure 1: Oil and gas reserves

Source: BP Statistical Review of World Energy, 2013



What The Statistics Show

The share of oil used in global primary energy consumption has declined

Oil as a share of global primary energy declines Statistics clearly indicate that oil as a share of global primary energy has declined over the past 40 years from almost 50% to c. 30% presently. Coal made up around 30% of total global primary energy over the period, but this proportion has risen in

recent years. Natural gas started at around 20% and is slowly gaining a greater share of the global primary energy mix. After the Japanese nuclear power incident in 2011, the share of nuclear power in the global primary energy mix is expected to decline in the future from the current c.5%. On the other hand, renewable energy has increased from virtually 0% 40 years ago to around c. 5% currently.

Figure 2: Share of global primary energy


The US is the world‟s largest petroleum

consumer

29% of its petroleum imports come from the

Persian Gulf countries

Lower US imports has freed up global oil

supply

The US is also the largest consumer and

importer of natural gas

Why the US matters

Why the US is crucial for the oil industry: The US is the world‟s largest petroleum

consumer at c. 19 million barrels per day (mbpd), or c. 20% of the world demand. The IEA estimates that US petroleum consumption will remain below 19mbpd through to 2040 due to continuing progress made in fuel economy and alternative fuel consumption. Its oil imports peaked at 10mbpd from 2004-2007. In 2012, oil imports declined from its peak of 10mbpd to 8.4mbpd (44% of total consumption).

Why the Middle East matters to the US. Over 50% of US‟ crude oil and petroleum

imports are from North, South and Central Americas and the Caribbean. Around 29% are from the Persian Gulf countries of Bahrain, Iraq, Kuwait, Qatar, Saudi Arabia and the United Arab Emirates (UAE). Its largest sources of net crude oil and petroleum product imports are from Canada and Saudi Arabia.

Lower US imports have freed up global oil supply. Oil supply in the US has

increased significantly over the past five years as a result of shale oil production. Over the past two years, US oil output increased by an additional 2mbpd, the highest additional increase in nearly 20 years. This has significantly lowered its overall imports of both refined products and crude oil. As a result, there is now a greater global oil supply for other markets, which has helped stabilise prices in recent years.

The US is the world’s largest natural gas consumer and the biggest importer of natural gas, according to The World Factbook. The US imports piped gas from

Canada and Mexico and imports liquefied natural gas (LNG) from all over the world. The shale gas revolution has led to US natural gas production increasing over the past few years, and in turn paring down its natural gas imports and lowering US gas prices. Overall, this has led to the switching of fuel choices from coal to gas for power generation.



mil

lion

cu

bic

Figure 3: US oil production increases, lowering imports Figure 4: Emerging oil trade patterns

Source: EIA Source: BP Statistical Review of World Energy, 2013

Figure 5: US oil supply: cause and effect


Figure 6: US natural gas consumption and imports Figure 7: Natural gas consumption growth

30,000,000

25,000,000

20,000,000

15,000,000

10,000,000

5,000,000

-

Production Import

Source: EIA Source: BP Statistical Review of World Energy, 2013



Looking Ahead

Downward pressure on commodity prices as the US becomes more self-sufficient

Natural gas and coal to gain more share in

the global primary energy mix

Oil will remain an important component of the

energy mix going forward, but the world will be less dependent on it

The US

In the longer term (five to 10 years), we see downward pressure on commodity prices as the US becomes more self-sufficient in its energy needs. We believe that immediate benefits of shale gas and oil revolution will be felt in the US‟ electricity, petrochemicals, manufacturing and transportation sectors. We believe that the repercussions of this revolution will be felt in globally in the next decade. We think that crude oil and other related commodities are likely to come under pressure as a result of this revolution. (re: Shale gas: The game changer, November 29,2012) The world

We believe the trend going forward will be for both natural gas and coal to gain greater shares of the global primary energy mix, with oil losing ground. While we expect renewables to increase in absolute terms (as with other energy sources), as a share of total global primary energy, it is expected to remain at around 5-10%. Renewables (wind/solar energy, in particular) will have a difficult time competing with more conventional types of energy, unless some technological innovations in renewable energy storage systems are made in the future.

Oil will remain an important component of the energy mix going forward, but we will be less dependent on this „‟black gold‟‟. In our view, it remains debatable whether the demand for oil will change as the oil & gas and automotive industries transform. What is certain is that the future will be less dependent on oil than currently. We think the technological revolution in the oil & gas industry – the unlocking the unconventional

oil & gas - will most certainly benefit consumers globally as well as change the geopolitical landscape. Technological innovations in the automotive industry will certainly make vehicles less reliant on oil, thereby curbing oil demand growth to a certain extent. However, oil will remain an important component of the global energy mix for many years to come.

Figure 8: Long-term energy trends

Source: BP Statistical Review of World Energy 2013



A Peek Into 2014 Non-OPEC supply growth will hit a historical

high

Demand growth to pick up

Uncertainties remain, and revisions to

forecasts are expected

Nothing is certain in the oil market

Initial forecasts by the IEA indicate that the growth of supply from non-Organisation of the Petroleum-Exporting Countries (Opec) will hit a 20-year high next year, with an additional 1.4mbpd bumping up the number to 55.9mbpd. This was a level reached only once in 2002, on an annual basis in the last 20 years.

Demand growth is expected to pick up by an additional 1.2mbpd to 92mbpd in 2014, which is an increase from this year‟s additional demand of 1mbpd to 90.8mbpd. As a result of this view, the call on Opec plus stock change will be slightly lower at 29.4mbpd, versus 29.6mbpd this year.

However, uncertainties remain in the crude oil market:

Demand forecasts, being mainly dependent on global economic growth, are always subject to revisions. China will remain the main engine of demand growth, with demand increasing +385 thousand barrels per day (kbpd), while the Middle East‟s demand is expected to increase by an additional 225kbpd.

On the supply side, the Arab Spring that started two years ago was just the beginning. Unrest remains a constant within the Middle East and North Africa (MENA) region, with Egypt currently experiencing unrest. Although it is not a major oil producer, the country plays a vital role in international energy markets via the operation of the Suez Canal and Suez-Mediterranean (SUMED) pipeline. In 2012, about 7% of all seaborne-traded oil and 13% of the LNG traded worldwide transited through the Suez Canal, or the SUMED pipeline. The North American supply outlook also has its own uncertainties, as it is premised on high crude oil prices.

(Source: IEA, August 2013)

We expect that as the year progresses, more revisions will be made on these numbers. However, based on current estimates, we believe that crude oil prices should not move too far from this year‟s average/trading range as demand seems to be sufficiently met by supply.

Figure 9: OPEC and Non-OPEC oil supply Figure 10: Non-OPEC supply

Source: IEA, August 2013 Source: EIA, August 2013



Impact On Sectors We Cover

NEUTRAL over the long run

Longer-term commodity prices will come under pressure

Thailand will see more imports of LNG as

local natural gas reserves are depleted.

As the US is the world‟s largest consumer and importer of natural gas and oil, we see

downward pressure on commodity prices as the country becomes more self-sufficient in its energy needs. Over the medium- to long-term, we see crude oil prices and related commodity prices coming under pressure; the pace at which this happens will depend how the US manages its resources.

Thailand is now most likely to move away from locally-sourced natural gas (which is already depleting rapidly) and look towards imported LNG as a primary fuel source for electricity generation over the next decade. We think the country stands to benefit from the abundance of natural gas supply in the future in the form of LNG, if the shale gas story unfolds the way we envision. The primary beneficiaries will, therefore, be the electricity users. However, we think that Thailand can also benefit from moving away from crude oil-based transportation to vehicles that use compressed natural gas (CNG) as well as electric vehicles. However, it will also have to price all commodities - be it crude oil or CNG - at competitive rates so as not to give rise to any discrepancy in market forces.

Energy stocks are a good defensive play

Even with negative economic growth, the

demand for primary energy still grew, albeit at a slower pace

Slowdown in economic activity does not

materially impact the earnings of energy companies

Stronger earnings expected in 2H13

OVERWEIGHT in the short term

For now and the shorter term, we think the current demand and supply situation for each commodity will have a more immediate impact on prices as well as the performance of the stocks under our coverage.

We are bullish on the energy sector over the next 12 months. W ith the overall slowing down of the Thai economy, energy stocks provide a good defensive play.

The pace of growth in Thailand‟s domestic economy influences the growth of demand

for primary energy. Positive and strong economic growth will lead to similar growth in the demand for primary energy. However, note that even with negative economic growth (as in 2009), the demand for primary energy still rose, albeit at a slower pace.

A slowdown in economic activity does not materially impact the earnings of the energy companies under our coverage. As Thailand is a net importer of most petroleum commodities, most of the energy companies‟ plants are running at full or optimal levels to cater to the domestic market. The factors that have a material

impact on companies‟ earnings are crude oil prices, product spreads, plant utilisation rates and forex volatility. Overall, we see the seasonally stronger crude oil prices in 2H13 benefiting most of the energy companies under our coverage (through stock gains). The overall weakening of the THB/USD is also a positive since most of the energy companies that we cover have sales and costs denominated in US dollars. Our top picks for the sector are Thai Oil Pcl. (TOP, BUY, TP:THB69), PTT Global Chemicals (PTTGC, BUY, TP:THB82) and PTT (PTT, BUY, TP:THB388). TOP (BUY, TP: THB69.14)

We believe TOP‟s current share price is a good entry point for investors as it has retraced to attractive levels and now offers a decent dividend yield of 4%. The stock is trading at a 9x P/E and 1.2x P/BV, compared with its regional peers‟ 69x

P/E and 1.89x P/BV respectively. As TOP is now below its mean SD of 1.5x P/BV, we believe it should be moving towards its mean SD trading band over the next 3-6 months.

As the continuing tension in the Middle East will keep crude oil prices at the

higher end of our expected USD100-110/bbl range for the remaining part of this year, this should lead to stock gains for refineries. The seasonally higher demand for refined products has improved the refining spreads of each product (quarter to day).



Paraxylene (PX) spread is stronger than expected due to the delay in the starting up of some PX plants in the region. Benzene spreads are expected to soften slightly due to lower plant turnaround within the region, while lube base spreads

are supported by low high-sulfur fuel oil (HSFO) prices. All of TOP‟s plants are expected to run at optimal capacity in 2H13.

PTTGC (BUY, TP: THB82)

We like PTT Global Chemical (PTTGC) as we believe that there is still upside to our TP of THB82 at the current trading price.

Fundamentally, refining spreads have improved on seasonal demand. With the

crude oil price higher due to tensions in the Middle East, PTTGC will most likely see stock gains in 3Q13. We expect its petrochemical business to see overall stable spreads. We believe that unfortunate incidents – ie the shutdown of its low-density polyethylene (LDPE) plant for repairs and the oil spill into the Gulf of

Thailand – negative as they were, will be mostly covered by insurance.

In the longer term, PTTGC is partnering with PT Pertamina (Indonesia) to build a world-class petrochemical complex in Indonesia, with commercial operation date (COD) scheduled for 2017. We think this is a positive for the company as it increases its presence in Indonesia – the most populated and fastest-growing economy in Asean. We believe the partnership with PT Pertamina is a good strategic move as it is the equivalent to the PTT group in Indonesia.

PTT (BUY, TP: THB388)

• We like PTT‟s monopoly on the lucrative natural gas business and the fact that it is Thailand‟s largest oil trader. We think that over the next six months, PTT will

benefit from rising crude oil prices due to growing tension in the Middle East, as well as from seasonally higher demand for both crude oil and petrochemicals. Its subsidiaries and affiliates will benefit as will it, through higher spreads and stock gains.

• We think PTT‟s share price had been somewhat pressured by the cap on its LPG and NGV prices. However, we believe that the Government has already started in earnest to resolve the problem, firstly by slowly lifting the price of LPG to boost its own coffers. We believe that the benefits will subsequently flow to

PTT. Although pricing discrepancy is a politically sensitive issue, we do believe this will be resolved over the next few years. If LPG and NGV prices were fully floated, we expect to add around THB40/share to our valuation. However, we expect only PTT‟s LPG and NGV selling prices to be partially floated. Maintain BUY, with TP of THB388, based on sum-of-parts valuation.

PTTEP (NEUTRAL, TP: THB159)

PTTEP was seen as a good proxy for crude oil. However, since 2010, after the company invested in Montara & Cash Maple (Australia), and tar sands in Canada, the correlation seems to be slackening. The stock has only recently started to move somewhat in tandem with crude oil price on the back of continuing tension in Syria. We think that for the near term, PTTEP may reach THB170+, fuelled by escalating Middle East tension.

Will PTTEP outperform the market over the next 12 months to warrant a BUY?

PTTEP has entered a new phase, whereby its reserves, both local and in neighbouring countries, are not sufficient. It therefore needs to start looking abroad for investments. We remain concern with its overseas acquisition:

• The Montara (Australia) project was delayed, having encountered many

problems prior to its recent start up. The Cash Maple (Australia) project seems likely to receive its reserve certificate soon and move forward. However, it has not been able to sign on a strategic partner with the necessary technological knowhow. PTTEP does not have any experience in LNG and even the most experienced players have seen major cost over-runs in their LNG projects in Australia.

• Mozambique‟s Off-shore Area 1 project is close to project sanction, probably by

next year. We have high hopes for this project but believe that delays would be inevitable given that this is a large project involving many investors and interests.



In addition, the government of Mozambique is also requesting for joint operations with third parties in its onshore facilities.

• Overall, more than USD4bn has been invested, with not much to show for it at

the moment.

• Our view is that over the next 12 months, oil price will not stay at USD110+/bbl

(Dubai) over long periods of time, as prices will spike when tensions in the Middle East escalate. Therefore, if PTTEP were a proxy to crude oil prices, fundamentally, its share price will not outperform the market should crude oil price not rally over a sustained period of time. We maintain our NEUTRAL recommendation, with THB159 TP, (based on DCF valuation) over the next 12 months.

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Results Review, 13 August 2013

PTT (PTT TB) Buy (Maintained)

Energy - Oil & Gas Target Price: THB388

Market Cap: USD29,999m Price: THB340

Macro

Earnings Drop But Expect a Better 2HFY13 Risks Growth Value

380

370

360

350

340

330

320

310

18

Source: Bloomberg

PTT (PTT TB)

Price Close Relative to Stock Exchange of Thailand Index (RHS)

103

97

92

86

81

75

69

64

PTT’s 2QFY13 earnings plunged 66% q-o-q to THB12.2bn from forex losses, a higher tax and weaker associate contributions, while its

1HFY13 earnings of THB48bn (+5% y-o-y) made up 43% of our FY13 forecast. We expect a strong 2HFY13, due to a better showing from its associate companies and subsidiaries. We continue to like PTT for its strong core businesses and maintain a BUY with a TP of THB388.

PTT’s 2QFY13 earnings declined by 66% q-o-q to THB12.2bn. It felt

the impact of: i) forex losses, ii) a higher tax, iii) a weaker performance from PTT Exploration and Production (PTTEP TB, NEUTRAL TP159), and iv) a softer showing from its refinery and petrochemical businesses.

Sales dipped 4% q-o-q to THB669.6bn. This was on the back of lower

crude oil prices – USD100 per barrel (bbl) (1QFY13: USD108 per bbl). Its operating profit was THB39.1bn, down by 4% q-o-q.

The sales volume for its gas business was relatively stable. Its

transmission business booked 4,674 million standard cu ft per day while its gas separation plants generated 1,624,000 tons. Meanwhile, PTT’s oil business improved marginally (+1-2% q-o-q). However, its natural gas vehicle (NGV) business incurred a THB4.9bn operating loss (-6% q-o-q), while its oil marketing segment booked a THB2bn inventory loss.

Associates’ contributions plunged by 87% q-o-q to THB1.3bn. This

arose from a poorer showing from its refinery and petrochemical Avg Turnover (THB/USD) 1,459m/47.5m

Cons. Upside (%) 20.7

Upside (%) 18.3

52-wk Price low/high (THB) 309 - 367

Free float (%) 49

Shareholders (%)

Ministry of Finance 51.1

Vayupak Fund 15.3

Thai NVDR 4.3

Kannika Siamwalla, CFA 66 2862 9744

License No.23517

[email protected]

Other major items. PTT recognised a forex loss of THB3.4bn vs a forex

gain of THB6.7bn in 1QFY13. Its tax expenses surged by 63% this quarter to THB15.5bn due to higher taxes imposed on PTTEP.

1HFY13 earnings increased 5% y-o-y to THB48bn. This accounted for

43% of our FY13 forecast. We continue to like PTT, given its strong natural gas transmission, gas separation plant, oil trading and marketing

(Thailand’s largest) core businesses. We expect a stronger 2H from its subsidiaries/affiliates, given the expected decrease in the volatility of the crude oil price, and better downstream spreads and operations.


Platform 1

Source: Company data, RHB estimates

Forecasts and Valuations Dec-10 Dec-11 Dec-12 Dec-13F Dec-14F

Total turnover (THBm) 1,898,682 2,428,126 2,793,833 2,539,219 2,672,156

Reported net profit (THBm) 83,992 106,260 104,666 112,443 119,800

Recurring net profit (THBm) 83,992 106,260 104,666 112,443 119,800

Recurring net profit growth (%) 41.1 26.5 (1.5) 7.4 6.5

Core EPS (THB) 29.6 37.2 36.6 39.4 41.9

DPS (THB) 10.2 13.0 13.0 13.8 14.7

Dividend Yield (%) 3.0 3.8 3.8 4.0 4.3

Core P/E (x) 11.5 9.1 9.3 8.6 8.1

Return on average equity (%) 18.5 20.5 18.0 17.5 16.7

P/B (x) 2.02 1.75 1.60 1.43 1.28

P/CF (x) 7.53 7.57 6.88 5.55 5.43

EV/EBITDA (x) 5.61 5.17 5.45 5.25 4.88

Net debt to equity (%) 41.2 46.9 46.6 38.2 30.1

Our vs consensus EPS (%) (2.7) (2.6)


PTT (PTT TB) 13 August 2013


Figure 1: 2Q13 results review

FYE Dec. 2Q13 1Q13 q-o-q chg YTD 2013 YTD 2012 y-o-y chg

Revenue 669,610 699,932 -4% 1,369,541 1,374,923 0%

EBIT 39,102 40,617 -4% 79,719 83,108 -4%

Net int.exp. (5,070) (4,938) 3% (10,007) (9,263) 8%

Associates 1,347 10,151 -87% 11,498 5,995 92%

Net profit 12,279 36,105 -66% 48,384 46,102 5%

EPS (Bt) 4.3 12.6 -66% 16.9 16.1 5%

EBITDA margin 8.0% 7.8% 2% 15.8% 8.1% 96%

Source: RHB estimates

Figure 2: Operating variables

2Q13 1Q13 2Q12 % q-o-q % y-o-y

Natural gas transmission business (mmscfd)

EGAT 1,355 1,380 1,341 (2) 1

IPP 851 866 900 (2) (5)

SPP 610 528 415 16 47

Industry 600 630 624 (5) (4)

GSP 952 988 954 (4) -

NGV 306 303 273 1 12

Total sales volume 4,674 4,695 4,507 - 4

NGV EBIT (THBm) (4,984) (4,700) (4,426) 6 13

Gas separation plant (ktons)

LPG 765 676 733 13 4

NGL 187 184 179 2 4

Ethane 523 552 530 (5) (1)

Propane 150 220 154 (32) (2)

Total production 1,626 1,632 1,596 - 2

Prices (USD/ton)

LPG 775 920 856 (16) (9)

HDPE 1,443 1,482 1,387 (3) 4

PP 1,473 1,539 1,445 (4) 2

Naphtha 780 887 1,387 (12) (44)

Cost of gas 379 403 1,445 (6) (74)

Oil marketing

Sales volume (ml) 6,000 5,956 5,859 1 2

Margins (THB/l) 0.89 0.98 0.95 (9) (6)

Inventory g/l (THBm) (2,130) (1,140) (2,900) 87 (27)

Oil trading

Sales volume (ml) 16,988 16,610 15,878 2 7

Margins (THB/l) 0.08 0.10 0.06 (20) 33

Coal business

Sales volume (mt) 2.5 2.5 2.7 - (9)

Coal price (USD/ton) 74.30 76.48 94.50 (3) (21)




Financial Exhibits

Profit & Loss (THBm) Dec-10 Dec-11 Dec-12 Dec-13F Dec-14F

Total turnover 1,898,682 2,428,126 2,793,833 2,539,219 2,672,156

Cost of sales (1,747,970) (2,242,776) (2,604,774) (2,345,259) (2,466,729)

Gross profit 150,712 185,350 189,059 193,960 205,426 Gen & admin expenses (36,648) (45,048) (49,049) (48,804) (49,321) Operating profit 114,064 140,302 140,010 145,156 156,106 Operating EBITDA 160,769 195,617 205,248 210,393 221,343 Depreciation of fixed assets (46,705) (55,315) (65,237) (65,237) (65,237) Operating EBIT 114,064 140,302 140,010 145,156 156,106 Net income from investments 18,816 29,463 27,091 26,305 27,427 Other recurring income 13,026 16,575 17,179 17,179 17,179 Interest expense (16,803) (18,035) (19,763) (10,039) (9,106) Exchange gains 6,362 1,099 7,615 - - Pre-tax profit 135,465 169,405 172,132 178,601 191,606 Taxation (33,961) (43,226) (46,516) (45,689) (49,254) Minority interests (17,512) (19,919) (20,950) (20,469) (22,552) Profit after tax & minorities 83,992 106,260 104,666 112,443 119,800 Reported net profit 83,992 106,260 104,666 112,443 119,800 Recurring net profit 83,992 106,260 104,666 112,443 119,800


Cash flow (THBm) Dec-10 Dec-11 Dec-12 Dec-13F Dec-14F Operating profit 114,064 140,302 140,010 145,156 156,106 Depreciation & amortisation 46,705 55,315 65,237 65,237 65,237 Change in w orking capital 5,201 (22,756) (15,029) 3,190 (1,329) Other operating cash flow 13,026 16,575 17,179 17,179 17,179 Operating cash flow 178,996 189,437 207,398 230,762 237,193 Interest paid (16,803) (18,035) (19,763) (10,039) (9,106) Tax paid (33,961) (43,226) (46,516) (45,689) (49,254) Cash flow from operations 128,233 128,176 141,118 175,034 178,833 Capex (76,859) (202,878) (201,163) (49,485) (100,612) Other new investments (15,057) 14,807 4,654 - - Other investing cash flow (15,833) 19,763 55,313 (62,190) (2,572) Cash flow from investing activities (107,749) (168,307) (141,196) (111,676) (103,183) Dividends paid (24,004) (28,947) (37,144) (37,136) (39,305) Proceeds from issue of shares (3,522) 5,943 (17,509) - - Increase in debt 25,719 46,612 50,392 (83,772) (6,640) Other financing cash flow 3,185 1,698 - 0 (0) Cash flow from financing activities 1,378 25,306 (4,261) (120,908) (45,946) Cash at beginning of period 104,056 135,801 116,132 136,918 79,368 Total cash generated 21,861 (14,825) (4,339) (57,550) 29,704 Forex effects 6,362 1,099 7,615 - - Implied cash at end of period 132,279 122,075 119,408 79,368 109,072




Financial Exhibits

Balance Sheet (THBm) Dec-10 Dec-11 Dec-12 Dec-13F Dec-14F Total cash and equivalents 157,869 132,100 143,420 85,773 115,477 Inventories 42,333 39,161 42,254 39,161 40,491 Accounts receivable 159,153 203,987 278,821 278,821 278,821 Other current assets 4,578 5,877 7,650 7,650 7,650 Total current assets 363,933 381,124 472,145 411,406 442,439 Total investments 226,711 241,430 250,130 276,435 303,862 Tangible fixed assets 576,346 723,909 859,834 844,082 879,456 Total other assets 62,119 55,384 49,211 49,211 49,211 Total non-current assets 865,176 1,020,722 1,159,175 1,169,728 1,232,529 Total assets 1,229,109 1,401,846 1,631,320 1,581,133 1,674,968 Short-term debt 45,101 96,855 87,023 6,641 12,522 Accounts payable 149,250 231,755 287,209 287,209 287,209 Other current liabilities 75,313 6,912 6,665 6,665 6,665 Total current liabilities 269,664 335,522 380,897 300,514 306,396 Total long-term debt 342,467 337,324 397,549 394,159 381,636 Other liabilities 59,565 85,286 121,211 61,190 61,190 Total non-current liabilities 402,031 422,610 518,759 455,349 442,826 Total liabilities 671,695 758,133 899,656 755,863 749,222 Share capital 28,490 28,563 28,563 28,563 28,563 Retained earnings reserve 424,628 497,989 548,010 621,147 699,070 Other reserves 27,585 29,211 29,211 29,211 29,211 Shareholders' equity 480,704 555,763 605,784 678,921 756,844 Minority interests 76,710 87,950 125,880 146,350 168,902 Total equity 557,414 643,713 731,664 825,271 925,746 Total liabilities & equity 1,229,109 1,401,846 1,631,320 1,581,133 1,674,968


Key Ratios (THB) Dec-10 Dec-11 Dec-12 Dec-13F Dec-14F Revenue growth (%) 19.7 27.9 15.1 (9.1) 5.2 Operating profit growth (%) 27.6 23.0 (0.2) 3.7 7.5 Net profit growth (%) 41.1 26.5 (1.5) 7.4 6.5 EPS growth (%) 40.4 26.0 (1.6) 7.4 6.5 Bv per share growth (%) 11.4 15.3 9.0 12.1 11.5 Operating margin (%) 6.0 5.8 5.0 5.7 5.8 Net profit margin (%) 4.4 4.4 3.7 4.4 4.5 Return on average assets (%) 7.2 8.1 6.9 7.0 7.4 Return on average equity (%) 18.5 20.5 18.0 17.5 16.7 Net debt to equity (%) 41.2 46.9 46.6 38.2 30.1 DPS 10.2 13.0 13.0 13.8 14.7 Recurrent cash flow per share 45.1 44.9 49.4 61.3 62.6


Company Profile

PTT is the Thai Government’s petroleum business arm. The company operates its petroleum and petrochemical complex through subsidiaries and affiliated companies which cover the natural gas business (exploration & production, pipeline systems, gas separation plants), oil trading and marketing, refining, petrochemicals and other related businesses both domestic and abroad.



Recommendation Chart

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Recommendations & Target Price

Price Close

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310

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Buy Neutral Sell Trading Buy Take Profit Not Rated

Aug-08 Nov-09 Feb-11 Jun-12

Source: RHB estimates, Bloomberg

Date Recommendation Target Price Price 2013-05-20 Buy 388 343 2012-11-27 Buy 378 314 2012-08-14 Trading Buy 378 344


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Corporate News Flash, 16 August 2013

PTT Global Chemical (PTTGC TB) Buy (Maintained)

Basic Materials - Chemicals Target Price: THB82.1

Market Cap: USD10,123m Price: THB74.0

Macro

Hit By Series Of Mishaps Risks

Growth

Value

85

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75

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Source: Bloomberg

PTT Global Chemical (PTTGC TB)


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In the past two months, PTT Global (PTTGC) has encountered a series of mishaps, including a shutdown of its LDPE plant, an oil spill at Rayong and on Wednesday, GSP#5 plant stopped operating after being hit by lightening. We maintain our forecasts and rating for now, since most of the financial impact will be covered by insurance. BUY, with our TP at 82.

Gas separation plant#5 incident, repairs to take 3-5months. On 14

Aug 2013, lightening struck PTT Pcl’s (PTT, major shareholder of PTTGC) waste heat recovery unit (WHRU) at its gas separation plant unit 5 (GSP#5) during a thunderstorm, resulting in the unit ceasing operation. The PTT expects repairs to take three to five months. GSP#5, which has a total natural gas processing capacity of 530 mmscfd, also supplies gas to PTTGC for olefins production of 450,000 tons per annum.

Impact on PTTGC. PTTGC plans to co-ordinate with related parties to

procure natural gas from other sources. It will also allocate natural gas to PTTGC’s olefins plants to maximize value and reallocate olefins products to ensure efficient operation at its upstream and downstream segments. The company estimates the maximum impact of Wednesday’s mishap on its net profit at around THB400m per month. Should the plant close for five months, our net profit forecast for PTTGC would be shaved by THB2bn, or 6%. The group is looking to claim

Avg Turnover (THB/USD) 1,023m/33.1m


Upside (%) 16.8

52-wk Price low/high (THB) 58.0 - 80.8

Free float (%) 51

Shareholders (%)

PTT Plc. 48.9

Thai NVDR 7.2

insurance for “property damage and business interruption’’, which also extends coverage to suppliers.

Marred by mishaps, but covered by insurance. PTTGC’s operations

have been marred by a series of mishaps over the past two months. These included a 3½-month shutdown of its LDPE plant to fix its booster/primary compressor (impact not more than 2% of net profit), the oil spill at Rayong and the latest - a possible 3-5 month shutdown of PTT’s GSP#5 plant, affecting its olefins production. We maintain our forecasts and recommendation for the time being, as much of the impact will be covered by insurance. However, we expect a lag time before the

HSBC (Singapore) Nominees PTE LTD

2.8 company receives compensation from its insurers.

Forecasts and Valuations Dec-10 Dec-11 Dec-12 Dec-13F Dec-14F Total turnover (THBm) 375,304 500,305 565,617 522,729 523,233 Reported net profit (THBm) 16,320 30,033 34,001 33,661 34,820 Recurring net profit (THBm) 16,320 30,033 34,001 33,661 34,820 Recurring net profit growth (%) na 84.0 13.2 (1.0) 3.4 Core EPS (THB) 3.61 6.65 7.54 7.47 7.72 DPS (THB) 0.00 2.33 3.40 3.37 3.48 Dividend Yield (%) 0.0 3.3 4.8 4.8 5.0

Kannika Siamwalla, CFA 66 2862 9744 Core P/E (x) 20.5 11.1 9.8 9.9 9.6 License No.23517 Return on average equity (%) 0.0 14.3 16.2 14.9 14.4

[email protected] P/B (x) 1.50 1.68 1.50 1.45 1.32

P/CF (x) na 12.1 18.5 6.3 6.4

EV/EBITDA (x) 13.7 8.5 7.8 6.8 6.5


Our vs consensus EPS (%) 2.9 0.9



Platform 1


PTT Global Chemical (PTTGC TB)

16 August 2013


85 Recommendations & Target Price

80

Price Close

75

70

65

60

55

Buy Neutral Sell Trading Buy Take Profit Not Rated

Oct-11 Apr-12 Oct-12 Mar-13


Date Recommendation Target Price Price 2013-07-03 Buy 82.1 68.5 2013-05-20 Neutral 82.1 76.0 2013-05-20 Sell 60.2 76.0 2013-04-10 Neutral 82.1 68.0 2012-11-16 Buy 68.5 60.0 2012-08-09 Neutral 68.2 62.5

Source : RHB estimates, Bloomberg


Forecasts and Total turnover Reported net profit Recurring net profit Recurring net profit growth Core EPS DPS Dividend Yield Core P/E Return on average equity P/B P/CF EV/EBITDA Net debt to equity Our vs consensus EPS


Vol m

Aug-1

2

Oct-

12

Dec-1

2

Feb-1

3

Apr-

13

Jun-1

3

Company Update, 7 August 2013

PTT Exploration & Production (PTTEP TB) Neutral (Maintained)

Energy - Oil & Gas Target Price: THB159

Market Cap: USD20,033m Price: TH174

Macro

2020 Production Volume Revised Risks Growth Value

175

170

165

160

155

150

145

140

135

25

PTT Exploration & Production (PTTEP TB)


105

100

95

90

85

80

75

70

65

PTTEP has revised downwards its 2020 production target to 600,000 barrels of oil equivalent per day (boe/d) – a more reasonable goal, as, while still challenging, will not overly stretch its resources. PTTEP should now focus on bringing projects to commercialisation – on time and on budget – with our concerns now on its two large liquefied natural gas (LNG) projects in hand. Maintain NETURAL, THB159 TP.

Revised 2020 target – 600,000boe/d: In its analyst meeting yesterday,

PTTEP announced its revised 2020 target production level of 600,000boe/d (900,000boe/d previously). We agree with the company’s view that this new target is a challenging one, but one that will not overly stretch its resources.

Projects under development will be able to deliver 9%-10% sales

volume growth annually to 2014. PTTEP’s Montara project (Australia) has already started production in June at a rate of 10,000 barrels per day (bpd). This will increase and reach a maximum of 30,000bpd once two more wells are completed. Meanwhile, the company’s Zawtika project (Myanmar) is on track to produce first gas by end-2013. Its production capacity will reach 300 million standard cu ft per day (mmscfd) in 2014. Construction on PTTEP’s Algeria 433a & 416b project is still in progress, with some delays encountered due to attacks in nearby areas.

Source: Bloomberg

Avg Turnover (THB/USD) 948m/30.9m


Upside (%) 0.5

52-wk Price low/high (THB) 141 - 171

Free float (%) 35

Shareholders (%)

PTT Plc 65.3

Thai NVDR 3.2

HSBC (Singapore) Nominee 2.3

Kannika Siamwalla, CFA 66 2862 9744

License No.23517

[email protected]

Long-term projects will contribute to growth: PTTEP has two

Canadian tar sands projects in progress (the Leismer expansion and Corner), with first production slated to begin in 2017. Tar sand is a challenging segment, given the high costs involved, but the company is working with partner Statoil to mitigate this impact. Meanwhile, PTTEP’s Rovuma Offshore Area 1 (Mozambique) is expected to see first gas in 2018-2019, with reserve certification expected by end-2013.

Projects in the pipeline. Projects in the exploration phase (with

discoveries of natural gas/oil in place): i) Algeria HBR, ii) Cash Maple, and iii) Myanmar M3. Projects still under exploration with high potentials: i) Myanmar M11, ii) Mozambique, and iii) Kenya. PTTEP plans 50 exploration wells in 2HFY13: 30 exploration, 20 appraisals. In 1HFY13 PTTEP drilled 30 wells (with a success ratio of 13:20).


Platform 1


PTT Exploration & Production (PTTEP TB) 7 August 2013


Two LNG projects in hand:

PTTEP has two large LNG projects in hand: i) Mozambique Offshore

Area-1, and ii) Cash Maple (Australia). Reserve certification should be by end-2013 for the Mozambique project and 2014 for Cash Maple.

PTTEP expects its total proven reserves to increase 55% to 1,401m boe (P1 & P2) from 901m boe currently, as it expects reserve certification of

170m boe-200m boe for its Rovuma Offshore Area 1 (Mozambique) and ~300m boe for its Cash Maple (Australia) project. Using its production volume of 291,000boepd, this translates into its average reserve life increasing to 13.2 years from 8.4 years previously.

Despite the potential to increase its total proven reserves by 55% by

2014, PTTEP’s share price does not seem to reflect this upside potential. We believe this is because there are still many uncertainties in the LNG market over the next decade and no one can say how the market will play out. The US has an abundance of shale gas, some of which will enter the export market. Similarly, China too has the potential to be a major player in the shale gas market, as it is sitting on the world’s largest shale gas reserves at the moment. PTTEP’s returns on its LNG investments will be more dependent than ever on how efficiently and effectively it brings its two LNG projects on-line, on time and within budget.

Mozambique Offshore Area 1 project concerns: Reserve certification is

expected by the end of the year, this should not be a problem. The off-take agreement for LNG is still being negotiated. PTT is expected to negotiate for 1mtpa-2mtpa of LNG from this field (10%-20% of total sales volume). India may take another 10%-20% of total sales volume. Japan has not yet signed on, and it is more likely Japan will be looking to the US shale gas exports for its LNG requirements. The project needs to secure at least 70% of its total off-take before project financing can be achieved. At this point it remains

uncertain if they can secure customers for the remaining portion. The debt/equity portion will be 60:40, where PTTEP’s portion is USD500mn for upstream and USD800-900mn for mid- stream. PTTEP is looking at possibilities of whether or not to let PTT invest in mid-stream portion of this project.

The two projects have not yet been reflected in our earnings or

valuations forecasts.

Industry update:

Crude oil prices are expected to remain relatively high for the rest of the year. Key upside drivers are: i) Middle-East geopolitics, ii) Saudi Arabia

tightening spare crude capacity, and iii) the US economic recovery. Downside drivers are: i) non-OPEC supply resumption – where US shale oil production reduces its total crude oil imports, and ii) a weakening Chinese economy, where slower economic growth will translate into decelerating crude oil demand.

Exploration spending and activities in the industry declined in 2008- 2010. However, it has since picked-up. In 2013, total industry exploration

expenses are expected to be around the USD90bn level. The exploration and production (E&P) industry is now spending more on exploration activities and, with an increased supply of new deep water drilling units, there will also be a greater focus on deep water drilling. Most of the mergers and acquisition (M&A) deals (71% of all deals) in 1HCY13 were focused on unconventional and deep water plays, with most activities in the US and Africa.

The LNG industry and its changing dynamics. Currently, LNG supply is

dominated by Asia, Qatar and West Africa, with prices indexed to crude oil. There are six US LNG export facilities that have filed for export licenses, with only one granted in 1HCY13. It is expected that LNG price indexation will become more hybrid, ie with links to both the Henry Hub and Oil indexes. The hybrid proportions will depend on the magnitude of the US LNG supply, which comes into the export market. With supplies coming up in Qatar, Australia, and Mozambique it is expected that overall LNG export prices should be lower than current levels moving forward.



Financial Exhibits

Profit & Loss (THBm) Dec-10 Dec-11 Dec-12 Dec-13F Dec-14F Total turnover 141,978 169,646 212,537 216,028 234,023 Cost of sales (72,424) (79,422) (95,711) (94,185) (103,866) Gross profit 69,555 90,224 116,826 121,844 130,158 Gen & admin expenses (6,157) (8,022) (9,827) (8,146) (8,146) Operating profit 63,397 82,201 106,999 113,697 122,011 Operating EBITDA 100,223 116,256 149,691 160,568 171,342 Depreciation of fixed assets (36,825) (34,055) (42,692) (46,871) (49,330) Operating EBIT 63,397 82,201 106,999 113,697 122,011 Net income from investments (45) 75 145 145 145 Other recurring income 2,001 3,068 4,704 - - Interest income 374 157 494 839 1,181 Interest expense (2,541) (3,771) (5,812) (4,658) (4,187) Exchange gains 2,763 (1,938) (728) - - Exceptional income - net - - (6,366) - - Pre-tax profit 65,950 79,793 99,436 110,023 119,150 Taxation (24,211) (35,045) (42,120) (49,445) (53,553) Profit after tax & minorities 41,739 44,748 57,316 60,578 65,598 Reported net profit 41,739 44,748 57,316 60,578 65,598 Recurring net profit 41,739 44,748 60,985 60,578 65,598


Cash flow (THBm) Dec-10 Dec-11 Dec-12 Dec-13F Dec-14F

113,697 122,011

46,871 49,330

(6,490) (4,158)

- -

Operating profit 63,397 82,201 106,999 Depreciation & amortisation 36,825 34,055 42,692 Change in w orking capital 10,863 183 (9,993) Other operating cash flow 2,001 3,068 4,704 Operating cash flow 113,087 119,508 144,402 154,079 167,184 Interest received 374 157 494 839 1,181 Interest paid (2,541) (3,771) (5,812) (4,658) (4,187) Tax paid (24,211) (35,045) (42,120) (49,445) (53,553) Cash flow from operations 86,709 80,849 96,963 100,814 110,626 Capex (56,414) (145,007) (164,338) (79,474) (67,182) Other investing cash flow (9,233) 21,380 27,594 21,768 145 Cash flow from investing activities (65,647) (123,627) (136,744) (57,706) (67,037) Dividends paid (16,695) (17,944) (22,984) (24,292) (26,305) Proceeds from issue of shares 403 231 96,633 - - Increase in debt 6,068 44,907 (7,173) (4,053) 17,092 Other financing cash flow - - (0) - - Cash flow from financing activities (10,225) 27,195 66,476 (28,345) (9,212) Cash at beginning of period 48,677 59,514 42,800 70,205 83,877 Total cash generated 10,837 (15,584) 26,695 14,764 34,376 Implied cash at end of period 59,515 43,930 69,495 84,969 118,253




Financial Exhibits

Balance Sheet (THBm) Dec-10 Dec-11 Dec-12 Dec-13F Dec-14F Total cash and equivalents 59,514 42,800 70,205 83,877 118,127 Inventories 8,548 9,143 9,916 10,801 11,701 Accounts receivable 11,728 27,371 36,985 34,565 37,444 Other current assets 5,285 8,320 6,378 10,595 11,477 Total current assets 85,076 87,634 123,484 139,837 178,749 Total investments 1,468 1,439 1,574 1,574 1,574 Tangible fixed assets 230,271 341,224 462,871 495,474 513,326 Total other assets 25,404 18,415 13,585 13,585 13,585 Total non-current assets 257,144 361,078 478,030 510,633 528,485 Total assets 342,220 448,711 601,513 650,470 707,234 Short-term debt 7,945 31,796 5,010 11,694 39,863 Accounts payable 1,958 2,313 3,498 3,024 3,276 Other current liabilities 48,293 66,264 64,241 59,815 59,941 Total current liabilities 58,196 100,374 72,749 74,534 103,080 Total long-term debt 69,893 90,949 110,562 99,825 88,749 Other liabilities 41,836 57,365 90,098 90,098 90,098 Total non-current liabilities 111,729 148,314 200,660 189,923 178,846 Total liabilities 169,926 248,687 273,409 264,456 281,926 Share capital 3,317 3,320 3,970 3,970 3,970 Retained earnings reserve 154,794 182,292 213,740 271,650 310,943 Other reserves 14,183 14,412 110,394 110,394 110,394 Shareholders' equity 172,294 200,024 328,104 386,014 425,307 Total equity 172,294 200,024 328,104 386,014 425,307 Total liabilities & equity 342,220 448,711 601,513 650,471 707,234


Key Ratios (THB) Dec-10 Dec-11 Dec-12 Dec-13F Dec-14F Revenue growth (%) 19.0 19.5 25.3 1.6 8.3 Operating profit growth (%) 24.6 29.7 30.2 6.3 7.3 Net profit growth (%) 88.4 7.2 28.1 5.7 8.3 EPS growth (%) 88.1 7.1 28.0 (11.6) 8.3 Bv per share growth (%) 20.3 15.9 63.9 (1.6) 10.2 Operating margin (%) 44.7 48.5 50.3 52.6 52.1 Net profit margin (%) 29.4 26.4 27.0 28.0 28.0 Return on average assets (%) 13.0 11.3 10.9 9.7 9.7 Return on average equity (%) 26.5 24.0 21.7 17.0 16.2 Net debt to equity (%) 10.6 40.0 13.8 7.2 2.5 DPS 5.04 5.41 6.92 6.12 6.63 Recurrent cash flow per share 26.2 24.4 29.2 25.4 27.9

Source: Company data, RHB estimates Source: Company data, RHB estimates

Company Profile

PTT Exploration & Production (PTTEP) is the Government arm involved in the exploration and production of oil & gas. Many of the Company’s projects are in the production, development and exploration phases. Most of its assets are in Asia, but it has also diversified into Australia, Canada and Africa.

Vol m

Sep-1

2

Nov-1

2

Jan-1

3

Mar-

13

May-1

3

Jul-13

Company Update, 2 September 2013

Thai Oil (TOP TB) Buy (from Neutral)

Energy - Oil & Gas Target Price: THB69.1


Macro

Stronger 2H13 Ahead, Spreads Expected To Improve Risks Growth Value

77

72

67

62

57

30

Source: Bloomberg

Thai Oil (TOP TB)


107

98

89

80

71

Thai Oil (TOP)’s share price has declined to an attractive level that does not reflect the strong fundamentals of its refinery and petrochemicals divisions. We expect stronger earnings for both these units over the next six months as we enter into the festive and winter seasons. We upgrade TOP to BUY (from NEUTRAL), with our TP unchanged at THB69.14, based on 1.5x 2013 P/BV.

Upgrade to BUY. We believe TOP’s current share price is a good entry

point for investors as it has declined to attractive levels, offering a decent dividend yield of 4%. The stock is trading at 9x P/E and 1.2x P/BV, compared to regional trading multiples of 69x P/E and 1.89x P/BV respectively. As TOP is now below its mean SD of 1.5x P/BV, we believe it should be moving towards its mean SD trading band over the next 3-6 months. We upgrade the stock to a BUY, with a THB69.14 TP, based on 1.5x 2013 P/BV.

Fundamentals improve in 2H13. We believe TOP's fundamentals will

improve in 2H13. As fluctuating tensions in the Middle East will keep crude oil prices on the higher end of our expected range of USD100- 110/bbl for the remaining part of this year, this should lead to stock gains for the refineries. The seasonally higher demand for refined products has improved the refining spreads of each product (quarter to day). Paraxylene (PX) spread is stronger than expected, due to the delay in

Avg Turnover (THB/USD) 403m/12.9m


Upside (%) 26.8


Free float (%) 50

Shareholders (%)

PTT Pcl. 49.1

Thai NVDR 7.1

State Street Bank Europe 3.7

the start-up of some PX plants around the region. Benzene spreads are expected to soften slightly due to lower plant turnaround within the region, while lube base spreads are supported by low high-sulfur fuel oil

(HSFO) prices. All of TOP’s plants are expected to run at optimal capacity in 2H13.

Constant improvements. TOP constantly looks to improve its existing

facilities and seeks investment opportunities domestically and regionally. It is revamping several of its plants in 2013, boosting efficiency and product yields. Total capex is forecasted at USD1.7bn for 2013-15, with the largest cash outflow of USD629.8m in 2013. It is also looking at strategic investment potential in three countries: Myanmar, Vietnam and Indonesia.

Forecasts and Valuations Dec-10 Dec-11 Dec-12 Dec-13F Dec-14F Total turnover (THBm) 318,391 446,241 447,432 412,069 412,069 Reported net profit (THBm) 8,956 14,853 12,320 12,463 12,815 Recurring net profit (THBm) 8,956 14,853 12,320 12,463 12,815 Recurring net profit growth (%) (25.7) 65.8 (17.1) 1.2 2.8 Core EPS (THB) 4.39 7.28 6.04 6.11 6.28 DPS (THB) 2.00 3.30 2.42 2.44 2.51

Kannika Siamwalla, CFA 66 2862 9744 Dividend Yield (%) 3.7 6.1 4.4 4.5 4.6 Licence No.23517 Core P/E (x) 13.8 8.3 10.0 9.9 9.6 [email protected] Return on average equity (%) 13.1 19.9 14.8 13.8 13.1

P/B (x) 1.76 1.55 1.43 1.31 1.21

P/CF (x) 11.1 8.7 45.9 81.0 3.9

EV/EBITDA (x) 9.45 5.68 7.54 6.57 6.49





Platform 1


Thai Oil (TOP TB) 2 September 2013


Upgrade to BUY TP maintained.

We believe the current share price, at 9x P/E and 1.2x P/BV, is a good entry point for this company as it also provides a decent dividend yield of 4%. In comparison, the regional trading multiples are 69x P/E and 1.89x P/BV. TOP is now trading at below its mean SD of 1.5x P/BV but we believe it should be moving towards its mean SD trading band over the next 3-6 months. Fundamentally, we expect 2H13 earnings to be boosted as a result of stock gains from higher crude oil price (relative to 2Q13), improved gross refining margins and relatively stable petrochemicals business. We upgrade this stock to BUY, with a TP of THB69.14, based on 1.5x FY13 P/BV.

Figure 1: Forward SD P/BV


Improving fundamentals in 2H13

Elevated crude oil prices on Middle East tension volatility. We believe that the

on-again-off-again Middle East tension will keep crude oil prices on the higher end of our expected range of USD100-110/bbl for the remaining part of this year. Fundamentally, the rapid rise in crude oil prices will cause a narrowing of petrochemical margins, as costs rise faster than the end-product prices. However, as demand for petrochemical products is projected to remain healthy for the rest of this year, we believe that overall end-product prices will also increase to reflect the higher costs, thus leveling the petrochemical margins for this year.

Crude oil price up, stock gains. Crude oil settled at USD100.2/bbl at end-2Q13.

We expect prices to end higher in 3Q13. Crude oil prices had already edged up to USD108/bbl, as 3Q is a seasonally stronger quarter and as tensions in the Middle East brews up again. We expect stock gains to be recorded in 3Q13 and if the Middle East tension does not simmer down, there will be potentially more gains in 4Q13. We forecast an average crude oil price of USD105/bbl for the full year, without taking into consideration the impact of the Middle East tension.

Product spreads up, improved refinery earnings. Product spreads to Dubai for jet,

diesel and gasoline have all edged up quarter to date. This should lead to overall improvement in TOP’s gross refining margin (GRM), as these three products make up as much as 74% of its total refinery output. The improved product spreads was a result of steady high demand during summer in Europe, Middle East and US. Moreover, there were also refinery outages in India and Taiwan from end-May to August.

Petrochemicals margin relatively stable, hence stable earnings. Paraxylene-

ULG95 spreads were stronger in 3Q13 than expected. This was a result of continued strong demand for polyester in Asia and as the commissioning of new PX plants are delayed due to technical issues. Benzene spread is expected to be softer in 3Q13, with higher supply coming from China Petroleum and Chemical Corporation (Sinopec)'s new 160k-ton capacity olefin cracker plant. In the meantime, downside should be limited in view of the incoming seasonal demand for Styrene Monomer (SM) while lube base spreads is supported by continued lower high-sulfur fuel oil (HSFO) prices.



Figure 2: Crude oil price rises Figure 3: Refining product spreads improve

USD/bbl 140

120

100

80

60

40

20

-

Crude oil price USD/bbl

25

20

15

10

5

0

-5

-10

Refining product spreads

1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 QTD

1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 YTD -15

WTI Brent Dubai Jet-Dubai Diesel-Dubai

Source: Bloomberg Source: PTTGC

Figure 4: Paraxylene spread stronger than expected… Figure 5: …due to the delay in PX supply in 2013

Source: TOP Source: TOP

Figure 6: Benzene spread to soften… Figure 7: …due to less planned shutdowns in 2H13

Source: TOPRHB estimates Source: TOP



THB/USD

m)

20 25 30 35

Revenue 284,648 348,359 412,069 475,779 539,489

ch. -31% -15% 0% 15% 31%

EBITDA 6,846 15,288 23,729 32,171 40,612

ch. -71% -36% 0% 36% 71%

profit 12,720 12,768 12,815 12,863 12,911

ch. -1% 0% 0% 0% 1%

Figure 8: Weak HSFO to support bitumen spread Figure 9: Sensitivity of THB to USD

Source: TOP Source: RHB estimates



Financial Exhibits

Profit & Loss (THBm) Dec-10 Dec-11 Dec-12 Dec-13F Dec-14F Total turnover 318,391 446,241 447,432 412,069 412,069 Cost of sales (307,903) (423,307) (432,312) (392,348) (392,348) Gross profit 10,488 22,933 15,119 19,720 19,720 Gen & admin expenses (2,380) (2,460) (2,631) (2,631) (2,631) Operating profit 8,108 20,474 12,488 17,089 17,089 Operating EBITDA 14,770 27,078 19,128 23,729 23,729 Depreciation of fixed assets (6,662) (6,604) (6,640) (6,640) (6,640) Operating EBIT 8,108 20,474 12,488 17,089 17,089 Net income from investments (72) 37 73 - - Other recurring income 3,239 2,179 2,240 1,350 1,350 Interest income - - - 867 706 Interest expense (1,796) (2,126) (2,343) (3,353) (2,714) Exchange gains 2,722 (82) 1,987 - - Pre-tax profit 12,201 20,481 14,445 15,953 16,432 Taxation (3,035) (5,274) (1,789) (3,191) (3,286) Minority interests (209) (354) (336) (300) (330) Profit after tax & minorities 8,956 14,853 12,320 12,463 12,815 Reported net profit 8,956 14,853 12,320 12,463 12,815 Recurring net profit 8,956 14,853 12,320 12,463 12,815


Cash flow (THBm) Dec-10 Dec-11 Dec-12 Dec-13F Dec-14F Operating profit 8,108 20,474 12,488 17,089 17,089 Depreciation & amortisation 6,662 6,604 6,640 6,640 6,640 Change in w orking capital (2,094) (7,742) (14,548) (17,879) 11,600 Other operating cash flow 3,239 2,179 2,240 1,350 1,350 Operating cash flow 15,914 21,515 6,820 7,200 36,679 Interest received - - - 867 706 Interest paid (1,796) (2,126) (2,343) (3,353) (2,714) Tax paid (3,035) (5,274) (1,789) (3,191) (3,286) Cash flow from operations 11,083 14,115 2,688 1,524 31,386 Capex (5,538) (4,269) (8,086) (19,557) (12,593) Other new investments 653 (726) 2,120 82 - Other investing cash flow 3,013 (1,792) 1,231 (57) (141) Cash flow from investing activities (1,871) (6,786) (4,735) (19,532) (12,734) Dividends paid (5,202) (4,080) (6,732) (4,928) (4,985) Proceeds from issue of shares (1,507) 1,191 (326) - - Increase in debt 589 1,664 1,110 23,996 (13,388) Other financing cash flow - - - - (0) Cash flow from financing activities (6,120) (1,225) (5,949) 19,068 (18,373) Cash at beginning of period 8,618 13,217 18,129 10,460 11,520 Total cash generated 3,092 6,104 (7,996) 1,060 279 Implied cash at end of period 11,710 19,320 10,133 11,520 11,798




Financial Exhibits

Balance Sheet (THBm) Dec-10 Dec-11 Dec-12 Dec-13F Dec-14F Total cash and equivalents 32,347 19,292 28,412 40,982 29,661 Inventories 32,995 34,039 40,004 41,967 41,967 Accounts receivable 8,564 26,102 28,745 30,939 30,939 Other current assets 818 4,715 3,220 3,220 3,220 Total current assets 74,724 84,149 100,381 117,108 105,786 Total investments 2,603 2,787 2,370 2,287 2,287 Tangible fixed assets 67,467 65,132 66,577 79,494 85,447 Total other assets 2,355 3,019 1,348 1,348 1,348 Total non-current assets 72,424 70,938 70,295 83,129 89,082 Total assets 147,148 155,086 170,676 200,237 194,868 Short-term debt 2,962 5,717 4,635 13,213 11,696 Accounts payable 18,984 17,271 28,857 26,263 26,263 Other current liabilities 5,428 3,911 1,679 2,060 2,060 Total current liabilities 27,374 26,900 35,171 41,536 40,019 Total long-term debt 41,062 39,970 42,162 57,580 45,709 Other liabilities 3,142 3,183 2,619 2,619 2,619 Total non-current liabilities 44,204 43,153 44,781 60,199 48,328 Total liabilities 71,577 70,053 79,952 101,735 88,348 Share capital 20,400 20,400 20,400 20,400 20,400 Retained earnings reserve 47,301 56,613 63,678 71,156 78,845 Other reserves 2,456 2,456 2,456 2,456 2,456 Shareholders' equity 70,157 79,470 86,535 94,013 101,702 Minority interests 5,413 5,564 4,189 4,489 4,819 Other equity - (0) - - - Total equity 75,570 85,033 90,724 98,501 106,521 Total liabilities & equity 147,148 155,086 170,676 200,237 194,868


Key Ratios (THB) Dec-10 Dec-11 Dec-12 Dec-13F Dec-14F Revenue growth (%) 12.1 40.2 0.3 (7.9) 0.0 Operating profit growth (%) (39.2) 152.5 (39.0) 36.8 0.0 Net profit growth (%) (25.7) 65.8 (17.1) 1.2 2.8 EPS growth (%) (25.7) 65.8 (17.1) 1.2 2.8 Bv per share growth (%) 5.0 13.3 8.9 8.6 8.2 Operating margin (%) 2.5 4.6 2.8 4.1 4.1 Net profit margin (%) 2.8 3.3 2.8 3.0 3.1 Return on average assets (%) 6.3 9.8 7.6 6.7 6.5 Return on average equity (%) 13.1 19.9 14.8 13.8 13.1 Net debt to equity (%) 15.5 31.0 20.3 30.3 26.0 DPS 2.00 3.30 2.42 2.44 2.51 Recurrent cash flow per share 5.4 6.9 1.3 0.7 15.4

Source: Company data, RHB estimates Source: Company data, RHB estimates

Company Profile

Thai Oil is Thailand’s largest oil refinery, with a total capacity of 275kbpd. It also engaged in the aromatics, lubricant base, power, solvents as well as marine transportation businesses.


Platform 1

Corporate News Flash, 18 September 2013

CP ALL (CPALL TB) Buy (Maintained) Consumer Cyclical - Retail Target Price: THB48.0


More Clarity On Debt Refinancing

Macro

1.00

Risks

1.00

Growth

2.00

Value

3.00

83

95

107

119

131

143

30

35

40

45

50

55

CP ALL (CPALL TB)Price Close Relative to Stock Exchange of Thailand Index (RHS)

100

200

300

400

500

600

Sep

-12

No

v-1

2

Jan-1

3

Mar-

13

May-1

3

Jul-13

Vo

l m

Source: Bloomberg

Avg Turnover (THB/USD) 1,103m/34.9m


Upside (%) 34.3


Free float (%) 50

Shareholders (%)

Charoen Pokphand Group 44.3

AIA 2.7

GIC 1.0

Shariah compliant

Thailand Research Team

+66 (0) 2862 9999 ext 2030

Forecasts and Valuations Dec-10 Dec-11 Dec-12 Dec-13F Dec-14F

Total turnover (THBm) 140,739 161,890 197,816 290,402 403,618

Reported net profit (THBm) 6,663 8,008 11,023 11,082 14,286

Recurring net profit (THBm) 6,663 8,008 11,023 11,082 14,286

Recurring net profit growth (%) 33.5 20.2 37.7 0.5 28.9

Core EPS (THB) 0.74 0.89 1.23 1.23 1.59

DPS (THB) 0.70 0.63 0.90 0.90 1.17

Dividend Yield (%) 2.0 1.7 2.5 2.5 3.3

Core P/E (x) 48.2 40.1 29.1 29.0 22.5

Return on average equity (%) 36.5 40.8 45.7 37.5 39.8

P/B (x) 18.1 14.9 12.0 10.0 8.1

P/CF (x) 26.6 25.3 13.7 15.3 9.9

EV/EBITDA (x) 25.3 21.0 16.7 21.8 15.0

Net debt to equity (%) net cash net cash net cash 449.6 320.6


Source: Company data, OSK-DMG estimates

The news wires shed more light on the refinancing of CPALL’s USD6bn debt yesterday. As we believe some investors may have stayed on the sidelines due to uncertainty over the group’s debt plan, the improved clarity on its refinancing plan may be a positive. We are likely to maintain our call pending a discussion with its management.

In the news. It was reported yesterday that CPALL is planning to use

the proceeds from its first bond sales to repay short-term loans taken to acquire Siam Makro (MAKRO TB, NR). The key details are:

o The bonds will be secured by its shares in MAKRO.

o Book-building will commence on 17 Oct while the subscription deadline is 30

Oct.

o It is targeting EPS growth of 20% over five years.

o It aims to cut its debt-to-equity ratio to less than 2.0 from an estimated 5.5-6.0 in FY13.

o It plans to establish a property fund, backed by MAKRO stores and land, to repay its short-term debt.

o It has about USD2bn in unhedged foreign debts.

Our thoughts. As CPALL’s board had approved the issuance of bonds

of up to THB90bn at the time the group announced its 2Q13 results, the proposed debt exercise does not come as a surprise. From recent discussions with investors, we note that they were concerned over the lack of clarity on the portion of CPALL’s USD-denominated debt that is hedged in THB, especially in view of the c.10% depreciation in THB vs USD recently. Nonetheless, we believe the impact on CPALL may have been milder than expected given that the group would have drawn down most of its loans in late-June and mid-Aug, after which the THB declined by less than 5% vis-à-vis the USD. For instance, we note that its USD6bn debt was equivalent to THB188bn as of 30 June at an exchange rate of 31.3, which is close to yesterday's 31.8.

CP ALL (CPALL TB) 17 September 2013


Likely to maintain recommendation. We believe our current assumptions are still

relevant, ie we expect earnings to grow at a CAGR of 18% for FY12A-18F, which is slightly below the 20% stated in the news report. If we lift our existing FY13F total debt assumption by 10% to THB187m to factor in a stronger USD, this would give rise to a debt-to-equity ratio of 5.8 for FY13F that would be progressively reduced to 1.6 by FY17F, in line with the above-reported numbers.

We are also assuming a borrowing cost of 5.0% for FY13 and 5.5% for FY14, which would be at the upper end of THB-denominated bonds issued since Sept 2013.

That said, we are likely to maintain our estimates and BUY recommendation with a THB48 TP, pending a discussion with the company management.

CP ALL (CPALL TB) 17 September 2013



0

10

20

30

40

50

60

Sep-08 Dec-09 Apr-11 Jul-12

Price Close

NR

27.5

27.5

29.5

31.5

31.5

36.6

48.5

68.0

48.0

Recommendations & Target Price

Buy Neutral Sell Trading Buy

Take Prof it Not Rated

Source: OSK-DMG estimates, Bloomberg

Date Recommendation Target Price Price

2013-08-08 Buy 48.0 36.0

2013-05-10 Buy 68.0 41.0

2013-04-24 Buy 68.0 39.0

2013-04-23 Neutral 48.5 43.5

2013-02-20 Neutral 48.5 52.0

2013-01-04 Neutral 36.6 44.8

2012-11-23 Neutral 36.6 40.0

2012-11-10 Neutral 36.6 40.3

2012-11-07 Neutral 36.6 39.8

2012-08-08 Neutral 31.5 32.8

Source : OSK-DMG estimates, Bloomberg

4

RHB Guide to Investment Ratings Buy: Share price may exceed 10% over the next 12 months Trading Buy: Share price may exceed 15% over the next 3 months, however longer-term outlook remains uncertain Neutral: Share price may fall within the range of +/- 10% over the next 12 months Take Profit: Target price has been attained. Look to accumulate at lower levels Sell: Share price may fall by more than 10% over the next 12 months Not Rated: Stock is not within regular research coverage Disclosure & Disclaimer All research is based on material compiled from data considered to be reliable at the time of writing, but RHB does not make any representation or warranty, express or implied, as to its accuracy, completeness or correctness. No part of this report is to be construed as an offer or solicitation of an offer to transact any securities or financial instruments whether referred to herein or otherwise. This report is general in nature and has been prepared for information purposes only. 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Further, RHB, its affiliates and related companies do and seek to do business with the company(ies) covered in this research report and may from time to time act as market maker or have assumed an underwriting commitment in securities of such company(ies), may sell them or buy them from customers on a principal basis and may also perform or seek to perform significant investment banking, advisory or underwriting services for or relating to such company(ies), as well as solicit such investment, advisory or other services from any entity mentioned in this research report. 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DMG & Partners Securities Pte Ltd may have received compensation from the company covered in this report for its corporate finance or its dealing activities; this report is therefore classified as a non-independent report. As of 16 September 2013, DMG & Partners Securities Pte Ltd and its subsidiaries, including DMG & Partners Research Pte Ltd, do not have proprietary positions in the securities covered in this report, except for: a) - As of 16 September 2013, none of the analysts who covered the securities in this report has an interest in such securities, except for: a) - Special Distribution by RHB Where the research report is produced by an RHB entity (excluding DMG & Partners Research Pte Ltd) and distributed in Singapore, it is only distributed to "Institutional Investors", "Expert Investors" or "Accredited Investors" as defined in the Securities and Futures Act, CAP. 289 of Singapore. If you are not an "Institutional Investor", "Expert Investor" or "Accredited Investor", this research report is not intended for you and you should disregard this research report in its entirety. In respect of any matters arising from, or in connection with this research report, you are to contact our Singapore Office, DMG & Partners Securities Pte Ltd. Hong Kong This report is published and distributed in Hong Kong by RHB OSK Securities Hong Kong Limited (“RHBSHK”) (formerly known as OSK Securities Hong Kong Limited), a subsidiary of OSK Investment Bank Berhad, Malaysia which have since merged into RHB Investment Bank Berhad (the merged entity is referred to as “RHBIB”), which in turn is a wholly-owned subsidiary of RHB Capital Berhad. RHBSHK, RHBIB and/or other affiliates may beneficially own a total of 1% or more of any class of common equity securities of the subject company. RHBSHK, RHBIB and/or other affiliates may, within the past 12 months, have received compensation and/or within the next 3 months seek to obtain compensation for investment banking services from the subject company. Risk Disclosure Statements The prices of securities fluctuate, sometimes dramatically. The price of a security may move up or down, and may become valueless. It is as likely that losses will be incurred rather than profit made as a result of buying and selling securities. Past performance is not a guide to future performance. RHBSHK does not maintain a predetermined schedule for publication of research and will not necessarily update this report

DMG & Partners Research Guide to Investment Ratings Buy: Share price may exceed 10% over the next 12 months Trading Buy: Share price may exceed 15% over the next 3 months, however longer-term outlook remains uncertain Neutral: Share price may fall within the range of +/- 10% over the next 12 months Take Profit: Target price has been attained. Look to accumulate at lower levels Sell: Share price may fall by more than 10% over the next 12 months Not Rated: Stock is not within regular research coverage DISCLAIMERS This research is issued by DMG & Partners Research Pte Ltd and it is for general distribution only. It does not have any regard to the specific investment objectives, financial situation and particular needs of any specific recipient of this research report. You should independently evaluate particular investments and consult an independent financial adviser before making any investments or entering into any transaction in relation to any securities or investment instruments mentioned in this report. The information contained herein has been obtained from sources we believed to be reliable but we do not make any representation or warranty nor accept any responsibility or liability as to its accuracy, completeness or correctness. Opinions and views expressed in this report are subject to change without notice. This report does not constitute or form part of any offer or solicitation of any offer to buy or sell any securities. DMG & Partners Research Pte Ltd is a wholly-owned subsidiary of DMG & Partners Securities Pte Ltd, a joint venture between OSK Investment Bank Berhad, Malaysia which have since merged into RHB Investment Bank Berhad (the merged entity is referred to as “RHBIB” which in turn is a wholly-owned subsidiary of RHB Capital Berhad) and Deutsche Asia Pacific Holdings Pte Ltd (a subsidiary of Deutsche Bank Group). DMG & Partners Securities Pte Ltd is a Member of the Singapore Exchange Securities Trading Limited. DMG & Partners Securities Pte Ltd and their associates, directors, and/or employees may have positions in, and may effect transactions in the securities covered in the report, and may also perform or seek to perform broking and other corporate finance related services for the corporations whose securities are covered in the report. This report is therefore classified as a non-independent report. As of 16 September 2013, DMG & Partners Securities Pte Ltd and its subsidiaries, including DMG & Partners Research Pte Ltd, do not have proprietary positions in the subject companies, except for: a) - As of 16 September 2013, none of the analysts who covered the stock in this report has an interest in the subject companies covered in this report, except for: a) - DMG & Partners Research Pte. Ltd. (Reg. No. 200808705N)

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Thai Institute of Directors Association (IOD) – Corporate Governance Report Rating 2012

ADVANC BCP DRT IRPC NOBLE QH SC SYMC TOP AOT BECL EASTW KBANK PHOL RATCH SCB THAI TSTE ASIMAR BKI EGCO KK PS ROBINS SCC TIP TTA BAFS BMCL ERW KTB PSL RS SE-ED TIPCO

BANPU BTS GRAMMY LPN PTT SAMART SIM TISCO BAY CPN HEMRAJ MCOT PTTEP SAMTEL SIS TKT BBL CSL ICC NKI PTTGC SAT SNC TMB

2S BROOK DTAC HMPRO MACO OFM S&J SSSC THRE TSC ACAP BWG DTC HTC MAKRO OGC S&P STANLY TIC TSTH AF CENTEL ECL IFEC MBK OSIHI SABINA STEC TICON TTW AIT CFRESH EE INTUCH MBKET PAP SAMCO SUC TIW TUF AKR CGS EIC ITD MFC PDI SCCC SUSCO TK TVO AMATA CHOW ESSO IVL MFEC PE SCG SVI TLUXE UAC AP CIMBT FE JAS MINT PG SCSMG SYNTEC TMT UMI ASK CK FORTH KCE MODERN PHATRA*** SFP TASCO TNITY UP ASP CM GBX KGI MTI PJW SITHAI TCAP TNL UPOIC AYUD CPALL GC KSL NBC PM SMT TCP TOG UV BEC CPF GFPT L&E NCH PR SPALI TFD TPC VIBHA BFIT CSC GL LANNA NINE PRANDA SPCG TFI TRC VNT BH DCC GLOW LH NMG PRG SPI THANA TRT WACOAL BIGC DELTA GUNKUL LRH NSI PT SPPT THCOM TRU YUASA BJC DEMCO HANA LST OCC PYLON SSF THIP TRUE ZMICO *** PHATRA was voluntarily delisted from the Stock Exchange of Thailand effectively on September 25, 2012.

AEONTS BGT CMO GENCO JTS LHBANK NC PTL SGP SWC TPAC UT AFC BLA CNS GFM JUBILE LHK NNCL Q-CON SIAM SYNEX TPCORP VARO AGE BNC CNT GLOBAL JUTHA LIVE NTV QLT SIMAT TBSP TPIPL WAVE AH BOL CPL GOLD KASET LOXLEY OSK QTC SINGER TCB TPP WG AHC BROCK CRANE HFT KBS MAJOR PAE RASA SIRI TEAM TR WIN AI BSBM CSP HTECH KC MATCH PATO RCL SKR TF TTCL WORK AJ BTNC CSR HYDRO KDH MATI PB RICH SMIT TGCI TWFP

ALUCON BUI CTW IFS KIAT MBAX PICO ROJNA SMK THANI TYCN AMANAH CCET DRACO IHL KKC M-CHAI PL RPC SOLAR TKS UBIS APCO CEN EASON ILINK KTC MDX POST SAM SPC TMD UEC APCS CHUO EMC INET KWC MJD PPM SCBLIF SPG TMI UIC APRINT CI EPCO IRC KWH MK PREB SCP SSC TNH UMS ARIP CIG FNS IRCP KYE MOONG PRECHA SEAFCO SST TNPC UOBKH AS CIMBI*** FOCUS IT LALIN MPIC PRIN SENA STA TOPP UPF ASIA CITY FSS JMART LEE MSC PSAAP SF SVOA TPA US

*** CIMBI was voluntarily delisted from the Stock Exchange of Thailand effectively on September 25, 2012.

IOD (IOD Disclaimer)

การเปิดเผลผลการส ารวจของสมาคมส่งเสริมสถาบันกรรมการบรษิัทไทย (IOD) ในเรื่องการก ากับดูแลกิจการ (Corporate Governance) นี้เป็นการด าเนินการตามนโยบายของส านักงานคณะกรรมการก ากับหลักทรัพย์และตลาดหลักทรัพย์ โดยการส ารวจของ IOD เป็นการส ารวจและประเมินจากข้อมูลของบรษัทจดทะเบียนในตลาดหลักทรัพย์แห่งประเทศไทยและตลาดหลกัทรัพย์เอ็มเอไอ ที่มีการเปิดเผยต่อสาธารณะและเป็นข้อมูลที่ผูล้งทุนทั่วไปสามารถเข้าถงึได้ ดังนั้นผลส ารวจดังกล่าวจึงเป็นการน าเสนอในมุมมองของบุคคลภายนอกโดยไม่ได้เป็นการประเมินการปฏิบัติและมิได้มีการใช้ข้อมูลภายในในการประเมิน

อนึ่ง ผลการส ารวจดังกล่าว เป็นผลการส ารวจ ณ วนัที่ปรากฎในรายงานการก ากับดแูละกิจการบริษัทจดทะเบียนไทยเท่านั้น ดังนั้นผลการส ารวจจึงอาจเปลี่ยนแปลงได้ภายหลังวันดังกล่าว ทัง้นี้บริษัทหลักทรัพย์ อาร์เอสบี โอเอส เค จ ากัด (มหาชน) มิได้ยืนยันหรือรับรองถึงความถูกต้องของผลการส ารวจดงักล่าวแต่อย่างใด

Morning Matters - RHB TradeSmart...The market is large, but has problems with price benchmarking and the actual objective of trading. For example, sellers don't know the real value

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