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PREPARED BY NON-US BROKER-DEALER(S): BNP PARIBAS SECURITIES (ASIA) CO LTDTHIS MATERIAL HAS BEEN APPROVED FOR U.S DISTRIBUTION. ANALYST CERTIFICATION AND IMPORTANT DISCLOSURES CAN BE FOUND AT APPENDIXON PAGE 18.

11 October 2013

**************************************************************************************UPGRADE

Japan:

Tokyo Electron: Merger hopes (Yoshitsugu Yamamoto)

8035 JP; U/g to HOLD from Reduce; CP: JPY5,230; TP: JPY5,500 (from JPY3,000)

High expectations about benefits of AMAT merger

2014E: P/E 110.3x, P/B 1.5x, Yield 1.0%

Click here for full story PAGE 3

**************************************************************************************MACRO-ECONOMICS & EQUITY STRATEGY

Asian Instant Insights

South Korea: BoK Decision - Oct 2013 (Mark Walton)


Asian Instant Insights

Australia: Labour Market - Sep 2013 (Mark Walton)


Asian Desknote: Malaysia Shuffling the deck chairs (Philip McNicholas)


Emerging Market Strategy: Quality improvers monthly review (Martial Godet)

Small EM outperformance in Q313 Slightly better profitability

Momentum of cyclical sectors is still weak


**************************************************************************************

COMPANY RESEARCH (N. ASIA, ASEAN, JAPAN, INDIA, TURKEY & SOUTH AFRICA)HK/China:

Agile Property Sales set to speed up (Ronney Cheung)

3383 HK; BUY (unchanged); CP: HKD9.35; TP: HKD11.55

September sales improved to RMB3.48b

2013E: P/E 4.8x, P/B 0.8x, Yield 5.2%


Biostime International: Another solid quarter (Charlie Y Chen)

1112 HK; BUY (unchanged); CP: HKD64.50; TP: HKD70.50

Active customer figure up 37.8%, keeping momentum

2013E: P/E 28.3x, P/B 11.8x, Yield 2.0%


.

Japan:

Advantest Corp: Rebound not until new year? (Yoshitsugu Yamamoto)

6857 JP; HOLD (unchanged); CP: JPY1,118; TP: JPY1,150 (from JPY1,700)

Tester orders unexpectedly weak recently 2014E: P/E (35.9)x, P/B 1.5x, Yield 1.8%


BNP Paribas Events

CONFERENCE / CORPORATE DAY

Taiwan October Corporate Day 17 Oct 13

Asia Pacific Industrials Conf. 21&22 Nov 13

COMPANY ROADSHOWS (By Location)

Hong Kong/China

Emperor InternationalHoldings (163 HK) NDR

25 Oct 13

Industry Expert Roadshow 6 Nov 13

Formosa PetrochemicalCorp (6505 TT)

14-15 Nov 13

SingaporeIndustry Expert Roadshow 10-11, 25 Oct 13

Ping An (2318 HK) 28 Oct 13

Ascendas India Trust(AIT SP)

30 Oct 13

Europe

Makalot (1477 TT) 28 Oct 1 Nov 13

Chunghwa Telecom (2412 TT) 4-8 Nov 13

Shinsei Bank (8303 JP) 13-15 Nov 13

Lion Air 15, 18-19 Nov 13

SMIC (981 HK ) 25-29 Nov

Advanced SemiconductorEngineering ASE (2311 TT)

Week of 2 Dec

USSanrio (8136 JP) 18-22 Nov 13

Shinsei Bank (8303 JP) 18-22 Nov 13

Japan

Samsung Life (032830 KS) 15-17 Nov 13
http://www.bnppresearch.com/?E=ciajjkovtulhttp://www.bnppresearch.com/?E=cibaekovttshttp://www.bnppresearch.com/?E=ciajhkovttshttp://www.bnppresearch.com/?E=ciajfkovttshttp://www.bnppresearch.com/?E=ciajakovttshttp://www.bnppresearch.com/?E=cibajkovttshttp://www.bnppresearch.com/?E=cibahkovttshttp://www.bnppresearch.com/?E=ciahhkovttshttp://www.bnppresearch.com/?E=ciahhkovttshttp://www.bnppresearch.com/?E=cibahkovttshttp://www.bnppresearch.com/?E=cibajkovttshttp://www.bnppresearch.com/?E=ciajakovttshttp://www.bnppresearch.com/?E=ciajfkovttshttp://www.bnppresearch.com/?E=ciajhkovttshttp://www.bnppresearch.com/?E=cibaekovttshttp://www.bnppresearch.com/?E=ciajjkovtul

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SALES MORNING MEETING IDEAS 11 OCTOBER 2013

BNP PARIBAS

Our research is available on Thomson One, Bloomberg, TheMarkets.com, Factset and on http://eqresearch.bnpparibas.com/index. Please contactyour salesperson for authorisation. Please see the important notice on the back page.

**************************************************************************************COMPANY RESEARCH (N. ASIA, ASEAN, JAPAN, INDIA, TURKEY & SOUTH AFRICA) (CONTD)

Dainippon Screen: Ready for industry reshuffle? (Yoshitsugu Yamamoto)

7735 JP; HOLD (unchanged); CP: JPY528; TP: JPY550

Tweaking estimates on growth in Jul-Sep SPE orders

2014E: P/E 22.4x, P/B 1.5x, Yield 0.6%


JSR Corp: Emergence of catalysts (Yoshitsugu Yamamoto)

4185 JP; BUY (unchanged); CP: JPY1,716; TP: JPY2,300

FY3/15 earnings drivers to emerge from 4QFY3/14

2014E: P/E 14.1x, P/B 1.2x, Yield 2.2%


Shin-Etsu Chemical: Modest slowdown in 2H (Yoshitsugu Yamamoto)

4063 JP; BUY (unchanged); CP: JPY5,680; TP: JPY8,000

PVC upbeat, limited wafer downside, tweaking estimates

2014E: P/E 18.5x, P/B 1.4x, Yield 1.8%


Sumitomo Metal Mining: Risk of underperformance (Toshiyuki Johno)

5713 JP; REDUCE (unchanged); CP: JPY1,336.00; TP: JPY1,100.00

Maintain JPY1,100 TP, REDUCE rating

2014E: P/E 11.2x, P/B 0.9x, Yield 2.4%


.

Thailand:

Siam Cement: 3Q13 earnings preview: Still solid (Somkij Oranchatchawan)

SCC TB; BUY (unchanged); CP: THB432.00; TP: THB480.00

Booking a non-recurring gain of THB1.5b in 3Q13

2013E: P/E 15.0x, P/B 3.2x, Yield 3.9%


.

India:

Bharat Heavy Electricals: Expecting another weak quarter (Girish Nair)

BHEL IN; REDUCE (unchanged); CP: INR147.65; TP: INR95.00

We expect another weak quarter

2014E: P/E 10.0x, P/B 1.1x, Yield 3.2%


IRB Infrastructure: Uneventful 2Q, but catalysts ahead (Vishal Sharma)

IRB IN; BUY (unchanged); CP: INR79.50; TP: INR152.00

2QFY14 results likely to be uneventful

2014E: P/E 5.7x, P/B 0.7x, Yield 4.4%


BNP Paribas Events

COMPANY ROADSHOWS (By Date)

10-11, 25 Oct 13

Industry Expert Roadshow SG

15-17 Oct 13

Samsung Life (032830 KS) JP25 Oct 13Emperor International Holdings (163HK) NDR

HK

28 Oct 13

Ping An (2318 HK) SG

28 Oct 1 Nov 13

Makalot (1477 TT) EU

30 OCT 13

Ascendas India Trust (AIT SP) SG

4-8 Nov 13

Chunghwa Telecom (2412 TT) EU

6 Nov 13

Industry Expert Roadshow HK

13-15 Nov 13Shinsei Bank (8303 JP) EU

14-15 Nov 13

Formosa Petrochemical Corp (6505 TT) HK

15, 18-19 Nov 13

Lion Air EU

18-22 Nov 13

Sanrio (8136 JP) US

Shinsei Bank (8303 JP) US

25-29 Nov 13

SMIC (981 HK ) EU

Week of 2 DecAdvanced Semiconductor EngineeringASE (2311 TT)

EU

2
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COMPANY REPORTEQUITIES RESEARCH

8035 JP

TOKYO ELECTRONJAPAN / SEMICONDUCTORS

HOLDFROM REDUCETARGET

PRIOR TP

CLOSE

UP/DOWNSIDE

INDUSTRY OUTLOOK

Merger hopesUPGRADE TO HOLDHigh expectations about benefits of AMAT merger

Our earnings estimates are unchanged: We forecast 1HFY3/14JPY6.5b (guidance the same) and FY3/14 OP of JPY10b (JPY18b). We think

the risk of missing full-year guidance is high, but that shortfalllimited impact on the share price, given high expectationsannouncement of the merger with Applied Materials (AMAT

CATALYSTAMAT share price a greater factor than order trends

With the announcement of the AMAT merger, we believe shortfundamentals are less likely to be a share price catalyst. In real terms, theshare swap ratio will be 3.25:1, where TEL shareholders receive 3.25shares while AMAT shareholders receive one share. In the near term, weexpect TEL stock to head for 3.25x the AMAT share price.

VALUATIONOur TP is JPY5,500, based on the merger ratio

Based on AMATs October 8 close of USD17.50, we expect TEL to head

toward JPY5,500 (17.5 x 3.25 x JPY/USD rate of 97.3 = JPY5,533). OurJPY5,500 TP equals a P/BV of 1.5x FY3/14E, a similar valuation toAdvantest (6857 JP), which also has low profit margins. We upgrade TELto HOLD from Reduce. Risks include failure to gain merger approval.

KEY CHARTQuarterly SPE and FPD orders

Sources: Tokyo Electron; BNP Paribas estimates

0

50

100

150200

250

3/99

9/99

3/00

9/00

3/01

9/01

3/02

9/02

3/03

9/03

3/04

9/04

3/05

9/05

3/06

9/06

3/07

9/07

3/08

9/08

(JPY b) SPE FPD

CHANGE IN RECOMMENDATION

Yoshitsugu [email protected]

+81 3 6377 2259

y

HOW WE DIFFER FROM T

Target Price (JPY)

EPS 2014 (JPY)

EPS 2015 (JPY)

Positive

Market Recs

TARGET

PRIOR TP

CLOSE

UP/DOWNSIDE

JPY5,500

JPY3,000

JPY5,230

+5.2%

High expectations about benefits of AMAT merger

Our earnings estimates are unchanged: We forecast 1HFY3/14 OP ofof JPY10b (JPY18b). We think

year guidance is high, but that shortfall will have ahigh expectations on the

announcement of the merger with Applied Materials (AMAT US).

AMAT share price a greater factor than order trends

With the announcement of the AMAT merger, we believe short-termfundamentals are less likely to be a share price catalyst. In real terms, theshare swap ratio will be 3.25:1, where TEL shareholders receive 3.25

are. In the near term, weexpect TEL stock to head for 3.25x the AMAT share price.

Our TP is JPY5,500, based on the merger ratio

Based on AMATs October 8 close of USD17.50, we expect TEL to head

te of 97.3 = JPY5,533). Our, a similar valuation to

, which also has low profit margins. We upgrade TELto HOLD from Reduce. Risks include failure to gain merger approval.

9/08

3/09

9/09

3/10

9/10

3/11

9/11

3/12

9/12

3/13

9/13E

KEY STOCK DATAYE Mar (JPY b) 2014

Revenue 552.0

Op profit

Prior op profit

Recurring profit

Net profit

EPS (JPY)

P/E (x) 110.3

Dividend yield (%)

EV/EBITDA (x)

Price/book (x)

Net debt/equity (%)

ROE (%)

Share price performance

Absolute (%)

Relative to country (%)

Next results

Mkt cap (USD m)

3m avg daily turnover (USD m)

Free float (%)

Major shareholder

12m high/low (JPY)

3m historic vol. (%)

ADR ticker

ADR closing price (USD)

Issued shares (b)

Sources: Bloomberg; Company estimates (C);estimates

1,050

2,050

3,050

4,050

5,050

6,050

Oct-12 Jan-13

(JPY) Tokyo Electron

HOW WE DIFFER FROM THE STREET

BNPP Consensus % Diff

5,500 5,059 8.7

47 87 (46.0)

102 220 (53.6)

Positive Neutral Negative

12 6 3

11 OCTOBER 2013

KEY STOCK DATA2014E 2014C 2015E 2016E

552.0 562.0 582.0 508.0

10.0 18.0 25.0 5.0

10.0 - 25.0 5.0

13.6 - 28.6 8.6

8.5 13.0 18.3 5.3

47 73 102 30

110.3 71.6 51.2 176.8

1.0 1.0 1.0 1.0

17.6 - 13.9 24.5

1.5 - 1.5 1.5

(7.1) - (8.6) (14.1)

1.4 - 3.0 0.9

Share price performance 1 Month 3 Month 12 Month

21.8 6.5 60.2

22.3 9.0 (0.2)

October 2013

9,628

3m avg daily turnover (USD m) 71.9

94

Master Trust Bank of Japan(11%)

5,980/3,265

45.3

-

) -

0.179

Sources: Bloomberg; Company estimates (C); BNP Paribas

(24)

(14)

(4)

6

16

26

36

Apr-13 Jul-13 Oct-13

(%)Tokyo Electron Rel to TOPIX Index

3
http://equities.bnpparibas.com/

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Market Economics 11 October 2013

Asian Instant Insight

South Korea: BoK Decision (Oct 2013)Key Facts

The policy rate was again left unchangedat 2.50%, as expected.

BoK sounds i ncrementally more re laxedwith each meeting.

China uptick and currency stabilisationlikely supplying succour.

Inflation outlook remains benign butunlikely to drive policy.

The BoK left its policy rate unchanged at 2.50% atthe October meeting. The Banks assessment ofboth the external and domestic growth outlooks ispredominantly positive, with special mention givento an uptick in China. Inflation is expected to below, a view carried over from previous meetings,but not sufficiently so to s uggest further policyaction is likely. Though we have misgivings aboutthe sustainability of Chinas recent growth spurt,the BoKs macro view is broadly similar to our own.

We expect the policy rate to be on hold during 2014.

With each successive decision since the 7-day repo ratewas last cut ( by 25bp) i n May, the Bank of Kore a hassounded incrementally more relaxed about the policybackdrop. This continued in October. In the accompanyingstatement, the B oKs Monetary Policy Committee retainedits view that the global economy will sustain its modestrecovery going forward while its assessment of currentexternal conditions was markedly more upbeat than inearlier months. In particular, China was noted as havingshown signs of recovery; by comparison, the Auguststatement singled China out as a potential policy concern.The BoK also sounded more optimistic about Europe (or, atleast, less pessimistic).

The Banks catalogue of external risks has also evolvedsomewhat. Octobers statement dropped mention of theissue of fiscal consolidation in major countries, insteadspecifically noting the heightening of uncertaintiessurrounding the US government budget bill and debt ceilingincrease. These risks are neither mutually exclusive nordirectly comparable but wed judge the BoKs overall worrylevel hasnt lifted appreciably compared to previous months.

China is the one possible blind spot in the BoKs externalrisk assessment, in our view. As w eve pointed o utpreviously, the recent lift in Chinas activity data was largelyinfrastructure-driven and credit-fuelled, serving only to delaythe needed rebalancing of the Chinese economy to m ore

sustainable growth drivers. This transition will inevitablymean lower Chinese overall growth, with the potential to bea major drag on Asian trading partners.

On the d omestic front, BoK seems as comfortable withKorean as with global prospects. It now judges exports tobe showing buoyancy, an upgrade from the languageused in September. Overall, the Committee appraises themoderate economic growth to be continuing. The tone isonly incrementally different from in September but is clearlymore positive than an earlier assessment that Koreangrowth was weak and driven exclusively by exports.

BoKs outlook of inflation is that it w ill remain low for the

time being, a view essentially unchanged from earlier. Thisis despite a sharp drop in headline inflation to 0.8% y/y inSeptember which the B ank attributes to falling commodityprices. This is a fair assessment, but it will make it thatmuch harder for the headline rate to climb back to the 2.5-3.5% target range, especially given the BoKsacknowledgement that commodity prices are likely tocontinue to compress headline inflation going forward.

At the same time, core inflation will also be under pressure,courtesy of a negative output gap. BoK notes that the outputgap will narrow but remain negative for a considerable timegoing forward. This is broadly in line with our view that theoutput gap will swing into positive territory only late nextyear. This means headline inflation wont return to the target

range until well into 2015 in our view.

Overall, the BoKs assessment of current and likely futureeconomic conditions is similar to our own. Koreas growthprospects are l ooking up, with demand for manufacturedexports set to increase next year in l ine with improvement inadvanced economies. If th ere is a particular motivation tocut rates again, it is the extremely soft inflation outlook. ButBoK has held expectations of low inflation for some timewithout feeling compelled to ease further. Furthermore, thecentral bank shares our v iew that inflati on will increase,albeit slowly and belatedly. This suggests that rates will beon hold for some time, though with risk skewed towardanother cut.

Mark Walton 852 2108 [email protected]

Key Chart: Soft inflation

0 0 0 1 0 2 0 3 0 4 0 5 0 6 0 7 08 0 9 1 0 1 1 1 2 1 30

1

2

3

4

5

6

B o K t a r g e t ra n g e

H e a d l i n e C P I

C o r e C P I

( % y / y )

Source: BNP Paribas, Reuters EcoWin Pro

4

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Market Economics 11 October 2013

Asian Instant Insight

Australia: Labour Market (Sep 2013)Key Facts

Employment rose by 9.1k, reversingAugusts decline.

Full-time employment edged up butcontinues to trend lower.

Unemployment drops t o 5.6%, driven byanother clear fall in participation.

Soft undertones are unlikely to alterRBAs view.

Total employment increased 9.1k in September,roughly in line with expectations, and effectivelycountered a similarly-sized fall the previous month.That helped the unemployment rate lower, to 5.6%.But the biggest driver of officially-measured

joblessness is falling participation, which declinedto a 7-year low, itself an indication of falling jobprospects. Hours worked fell slightly from a monthearlier but a positive trend suggests GDP growthwill remain around 0.6% QoQ in Q3. Ov erall thereport portrays a st ill-weakening labour market, in

our view, but will not prompt a f orward-lookingRBA to ease further.

Septembers Australian labour report was a mixed bag. Thetwo key data points were good: total employment increased9.1k, due to roughly equal gains in full- and part-time jobs,while the unemployment rate dropped to 5.6%, a four-monthlow. The latter w as better than market expectation forunemployment to remain unchanged at 5.8%.

Beyond these headlines, however, the bulk of Septembersfigures portrayed a still-soft labour market. Trendemployment, a bett er barometer of the un derlying state ofthe labour market than the inherently noisy headline figure,fell for th e fourth consecutive month. This is the l ongest

string of mo nthly trend em ployment declines since theglobal financial crisis, and is driven entirely by falls i n thenumber of full-time jobs. The substitution of part-time for full-time positions suggests businesses are uncertain abouttheir prospects, something also borne out by weak readingsin surveyed capex intentions.

The drop in t he unemployment rate similarly disguisedworsening fundamentals. Though helped by Septembersemployment increase, easily the bigg est influence on theunemployment rate was a drop in the rate of la bour forceparticipation to 64.9, its lowest level since the end of 2006.Falling participation effectively means fewer people to countas unemployed and, having looked to have stabilised inearly 2013, participation has fallen sharply since June.

Numerically, the c alculation of the u nemployment rate ishighly sensitive to changes in participation. We estimatethat without the 0.1 percentage point fall in participation inSeptember, for instance, the unemployment rate wouldhave remained unchanged from Augusts 5.8%. Longerterm, if t he labour force participation rate were now at its

mid-2011 level of 65.6 just 0.7 percentage points higherthan at present we calculate that the unemployment ratewould be around 6 .7%, not the 5.6% as recorded. Fallingparticipation is also a s ign of a weak labour market in itsown right, how ever, implying potential job seekers are sodiscouraged about employment prospects that theywithdraw from the job-hunt all together.

Against these weak fundamentals, aggregate hours workedprovided a slightly more positive tone. Though down slightlymonth-on-month, hours worked for th e three months to

September increased 0.6%, the fastest three-month pacesince the e nd of 2 011. This suggests Q3 GDP growth islikely hold at around its Q2 pace of 2 .6% YoY. From th eperspective of households, longer hours will also be helpingto offset the hit to incomes from lower participation, fallingemployment and slower wage growth.

Overall, Septembers employment report was not as go odas initial headlines suggested. Markets seemed to sharethis assessment; AUD rallied briefly following the datarelease before being caught in a w ider sell-off. From apolicy perspective, however, the fi gures are u nlikely tomake much difference to the view of the RBA which alreadyexpected the labour market to remain weak. More importantfor the policy outlook are nascent signs that the wider

Australian economy is improving. We retain our view thatrates will be on hold for the duration.

Mark Walton 852 2108 [email protected]

Key Chart: Poor participation

9 8 9 9 00 0 1 0 2 0 3 0 4 0 5 0 6 0 7 0 8 0 9 1 0 1 1 1 2 1 36 2 . 0

6 2 . 5

6 3 . 0

6 3 . 5

6 4 . 0

6 4 . 5

6 5 . 0

6 5 . 5

6 6 . 0

6 6 . 5

3. 5

4. 0

4. 5

5. 0

5. 5

6. 0

6. 5

7. 0

7. 5

8. 0

U n e m p l o y m e n t R a t e ( % )

P a r t i c ip a t i o n R a t e ( % , R H S )


Key Chart: but working harder

98 9 9 00 0 1 0 2 03 0 4 0 5 0 6 0 7 08 0 9 1 0 11 1 2 1 3-3

-2

-1

0

1

2

3

4

5

H o u r s w o r k e d ( % y / y , 3 m m a )

E m p l o y m e n t ( % y / y , 3 m m a )


5

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Philip McNicholas 11 October 2013

Asian Desknote

Malaysia: Shuffling the deck chairs

Rumours are circling the government may remove housing loans made to civil

servants from its balance sheet and transfer them to the DFIs and commercial banks.

If removed, the l oans lower Federal g overnment debt by 4.4pp of G DP, suggesting

additional headroom from the governments self-imposed debt ceiling at 55% of GDP.

This should not be v iewed as fiscal consolidation but rather a de sperate effort t o

avoid breaking the debt ceiling that risks further straining fiscal credibility.

While the government is well within its rights to take such action, it appears politically

motivated and, in our view, makes negative rating action more likely, not less.

Malaysian media has reported that a local analyst, in their 2014 Budget preview, flagged the

government may remove civil servant housing loans currently on its balance sheet and transfer

them to government-owned Development Financial Institutions (DFIs). Rumours are also

beginning to circulate that some commercial banks may be asked to take on some of the loans.

If implemented, this is the latest effort by the Malaysian government to avoid breaking of its self-

imposed debt ceiling at 55% of GDP. The previous effort, an MYR0.2 increase in domestic fuel

prices, was announced on the first business day after the release of Q2 fiscal data showing the

debt stock rose to 54.6% of GDP from 53.8% in Q1 (see Malaysia: Missing the Forest for the

Trees). Thus, it is hard to see this move as being fundamentally positive.

While acting within its rights, the government would be flouting the spirit of its own fiscal rules.

Moreover, the m otivations for the transfer appear political rather than economic. As such,

comments invoking a desire to be fiscally responsible will become harder to believe. In our view,

an act such as this makes negative action, be it a negative outlook or an outright downgrade, by

one or more of the rating agencies more likely, not less.

These housing loans are estimated to be worth MYR42bn (4.4% of GDP or 8% of public debt).

If all are sold to the banks, public debt would fall to 50.2% of GDP. However, as a portion of the

loans have been securitised, the g overnment may only be able to transfer 50%-75% of the

stock. In t he absence of further fiscal reform to b roaden the rev enue base and reduce

allocations to non-discretionary spending items such as fuel subsidies, this merely provides a

one-time downshift rather than reverse the upward grind of the public debt/GDP ratio (Chart 1).

Admittedly, a range of Malaysias other fiscal metrics would improve. The debt/revenues ratio

would fall from 254% to 233%. Moreover, the government would be more assured that interest

payments, currently equivalent to 9.9% of revenues, are kept below the 15% limit established

under their existing fiscal rules. Stopping the governments mortgage lending to civil servants

could also help arrest the escalation in off-budget borrowing of recent years and improve fiscal

transparency over the longer-term (Chart 2).

Chart 1: Debt trajectory Chart 2: Going off-budget - I

35

40

45

50

55

60

07 08 09 10 11 12 13 14 15

General Government Debt, % of GDP

Without housingloans

With housing loans

35

40

45

50

55

60

-1.5

-1.0

-0.5

0.0

0.5

1.0

1.5

06 07 08 09 10 11 12 13

% of GDP

C hange in net deb t s tck less f iscal de fi ci t ( LHS ) P ubl ic D ebt (RH S )

Source: CEIC, BNP Paribas Source: CEIC, BNP Paribas

Avoiding a break of thedebt ceiling is the goal

Government may sellmortgage loans to banks

but this goes against thespirit of having one!

Public debt drops butwould still grind higher

Admittedly, there are somepositives to be found

6
http://www.thestar.com.my/Business/Business-News/2013/10/09/Govt-housing-loan-transfer-expected-to-boost-commercial-lenders-growth.aspxhttps://globalmarkets.cib.echonet/fiweb/myportal/DocumentViewServlet/20130903_Malaysia.pdf?docType=pdf&docId=120419&source=Source+Web&viewSource=latestResearch&stream=truehttps://globalmarkets.cib.echonet/fiweb/myportal/DocumentViewServlet/20130903_Malaysia.pdf?docType=pdf&docId=120419&source=Source+Web&viewSource=latestResearch&stream=truehttps://globalmarkets.cib.echonet/fiweb/myportal/DocumentViewServlet/20130903_Malaysia.pdf?docType=pdf&docId=120419&source=Source+Web&viewSource=latestResearch&stream=truehttps://globalmarkets.cib.echonet/fiweb/myportal/DocumentViewServlet/20130903_Malaysia.pdf?docType=pdf&docId=120419&source=Source+Web&viewSource=latestResearch&stream=truehttp://www.thestar.com.my/Business/Business-News/2013/10/09/Govt-housing-loan-transfer-expected-to-boost-commercial-lenders-growth.aspx

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Quality improvers monthly review

Small EM outperformance in Q313

The rebound of cyclical sectors (led by Energy) and North Asian markets helped global emerging

markets to slightly outperform in Q3. The surprise of the Fed not tapering quantitative easing helped

current account deficit countries offset a portion of their YTD underperformance in September.

Slightly better profitability

The downward trend in profitability observed in Emerging Markets since 2011 seems to haveweakened over the past three months and EM ROE even improved slightly. A strong earnings season

in China and the absence of tapering gave some relief to Emerging Markets. EM Competitiveness has

been boosted by lower currencies, and still elevated energy and commodity prices also helped EM

resource stocks. Nonetheless, it is too early to call a reversal of the past three-year trend, as most of

the improvement came from higher leverage.

Momentum of cyclical sectors is still weak

Although the profitability picture is somewhat more balanced than three months ago, our quality

improvers screening for October indicates that Materials, Industrials and Energy are still unconvincing

compared to domestic growth sectors. Financials continue to top the ranking while Consumer Staples

stocks slightly declined and are now ranked below Consumer Discretionary stocks. IT profitability

trends continue to lag, confirming the recent relative deterioration.

Country-wise, China has improved to top the ranking for the third month in a row. Other noticeable

changes are concentrated on Russia (positive)and Korea andTurkey (negative).

Mixed performances of our profitability-based portfolios, strong performance of thelong/short approach

Performances of our portfolios based on quality improvement ranking were mixed in Q3

The quarterly rebalanced portfolio of the top-50 large cap quality improvers (with constrainedturnover) underperformed MSCI Emerging Markets by 3.1% in Q3.

The monthly rebalanced top-100 all-cap portfolio outperformed by 1.70% in Q3.

The long30/short30 portfolio made of the three best and three worst ranked stocks in each sector(monthly rebalancing) outperformed by 4% in Q3 and continues to show a remarkable ability to

generate alpha.

1OCTOBER 2013

EQUITIES RESEARCH

EMERGING MARKET STRATEGY

Martial [email protected]

+44 (0) 20 7595 8132

7

7/27/2019 BNP daily 20131011

8/21

EQUITIES RESEARCH

3383 HK

AGILE PROPERTYCHINA / REAL ESTATE



Target Price (HKD) 11.55 10.63 9%

EPS 2013 (RMB) 1.54 1.39 11%

EPS 2014 (RMB) 1.73 1.54 12%Positive Neutral Negative

Market Recs 22 12 1

BUY

TARGET

CLOSE

UP/DOWNSIDE

HKD11.55

HKD9.35

+23.5%

INDUSTRY OUTLOOK

Sales set to speed up

EVENTSeptember sales improved to RMB3.48b

Agiles September sales improved to RMB3.48b, up 6% m-m and 62% y-y,

with a sales volume of 323k sqm or an implied ASP of RMB10,760/sqm(down 12% m-m but up 43% y-y). Ytd, total sales value is still relativelylow at RMB25.5b, implying only 61% of its target (RMB42b) has been

achieved. This, however, already looks to us priced in.

SUMMARYSignificant sales pick-up likely; inventory gradually clearing

We expect a sequential improvement in sales in the coming months, withnew launches on the way and adoption of a more flexible pricing strategy.We believe October sales could reach as high as RMB4-5b, narrowing thegap in sales target shortfall. Inventory for projects in Nanjing andChengdu is also starting to show signs of clearance.

VALUATIONDeep NAV discount of 55%; Buy with TP of HKD11.55

With the adoption of a flexible pricing strategy and a refocus back onmid-end product development with smaller-sized units, we believe Agilessales are set to speed up. Despite the share price having risen slightlyover the past few days, it still looks inexpensive, trading at a 55% NAVdiscount and 4.8x 2013E P/E when comparable players such asGuangzhou R&F (2777 HK; BUY; CP: HKD13.36)and KWG Property (1813HK; HOLD; CP: HKD5.1) are trading at 35-42% NAV discounts and 5.7-6.3x

2013E P/E. Key risk is a hard landing in the property sector.

NEWS FLASH

Ronney [email protected]

+852 2825 1812

Wee Liat [email protected]

+852 2825 1105

11 OCTOBER 2013

KEY STOCK DATA

YE Dec (RMB m) 2013E 2014E 2015E

Revenue 34,094 39,414 45,425

Rec. net profit 5,309 5,956 7,008

Recurring EPS (RMB) 1.54 1.73 2.03

EPS growth (%) 9 .1 12.2 17 .7

Disc/(Prem) to NAV (%) 55.5 - NA

Recurring P/E (x) 4.8 4.3 3.6

Dividend yield (%) 5.2 5.8 6.9

EV/EBITDA (x) 4.4 4.2 3.7

Price/book (x) 0.8 0.7 0.6

Net debt/Equity (%) 65.9 69.1 69.3

ROE (%) 17.5 16.9 17.2


Absolute (%) 4.6 24.3 10.0

Relative to country (%) 5 .2 9.7 0.1

Mkt cap (USD m) 4,159


Free float (%) 36

Major shareholder Chen Zhuolin (64%)

12m high/low (HKD) 12.68/7.31

3m historic vol. (%) 35.2

ADR ticker -

ADR closing price (USD) -

Issued shares (m) 3,449

Sources: Bloomberg consensus; BNP Paribas estimates

(17)

(7)

3

13

23

33

6

7

8

9

10

11

12

13

Oct-12 Jan-13 Apr-13 Jul-13 Oct-13

(%)(HKD) Agile Property Rel to MSCI China

8

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9/21

Another solid quarter

Active customer figure up 37.8%, keeping momentum

Biostime released its 3Q operational data, with the number of active

Mama100 members reaching 1.85m as of 30 September, growing

37.8% y-y. This was better than our forecast. With this nine-month

data in hand, managements official guidance of 30% growth in

revenue in 2013 seems conservative and we believe our FY13revenue forecast of RMB4.77b (or 41% y-y growth) is achievable.

POS increased 25.5%, drug stores catching up

Biostime is also keeping up its retail network expansion, with the total

number of points-of-sales increasing to 17,358 at the end of 3Q, from

13,832 a year ago. Notably, the number of drug stores with

Mama100 Members Zones increased 35.5%, the fastest among all

three channels.

Major risk: government policy likely to be announced in October

We expect the Chinese government to announce some pro-SOE

policies in October that would allow large SOEs to consolidate the

dairy market. As a result, Biostime may face more challenges and

increased operating costs in the new environment.

Valuation: TP of HKD70.50 and BUY rating maintained

Our TP of HKD70.50 is unchanged, based on 25x FY14E P/E with

47.2% and 22.2% recurring EPS growth in 2013E and 2014E. The

main risk is that government policy changes may increase Biostimes

operating expenses and hurt earnings accordingly.

Key chart: 3Q Mama100 members already exceed our full year forecast

* BNPP forecastsSources: Bloomberg consensus; BNP Paribas estimates

633 685770 825

1,0451,180

1,3451,4011,667 1,730

1,855 1,810

0

500

1,000

1,500

2,000

1Q11

2Q11

3Q11

4Q11

1Q12

2Q12

3Q12

4Q12

1Q13

2Q13

3Q13

4Q13E*

('000 people)

11 OCTOBER 2013

CHINA/ FOOD BEVERAGE & TOBACCO

BIOSTIME INTERNATIONAL 1112 HK

BUYUNCHANGED

TARGET PRICE HKD70.50

CLOSE HKD64.50

UP/DOWNSIDE +9.3%

PRIOR TP HKD70.50

CHANGE IN TP UNCHANGED

HOW WE DIFFER FROM CONSENSUS MARKET RECS

TARGET PRICE (%) 32.6 POSITIVE 10

EPS 2013 (%) 17.6 NEUTRAL 3

EPS 2014 (%) 8.4 NEGATIVE 0

Charlie Y [email protected]

+852 2825 1109

KEY STOCK DATA

YE Dec (RMB m) 2012A 2013E 2014E 2015E

Revenue 3,382 4,769 6,106 7,510

Rec. net profit 748 1,096 1,345 1,631

Recurring EPS (RMB) 1.22 1.80 2.20 2.66

Prior rec. EPS (RMB) 1.22 1.80 2.20 2.66

Chg. In EPS est. (%) 0.0 0.0 0.0 0.0

EPS growth (%) 52.9 47.2 22.2 20.8

Recurring P/E (x) 41.6 28.3 23.1 19.2

Dividend yield (%) 1.7 2.0 2.8 3.4

EV/EBITDA (x) 28.5 20.3 15.7 12.7

Price/book (x) 13.2 11.8 9.5 7.9

Net debt/Equity (%) (60.2) (59.8) (66.8) (71.9)

ROE (%) 34.8 44.4 45.8 45.3


Absolute (%) 31.8 95.5 230.4

Relative to country (%) 32.4 80.8 220.5

Next results March 2014



Free float (%) 25

Major shareholder Biostime Pharmaceutical (75%)

12m high/low (HKD) 64.20/19.28


ADR ticker -


Issued shares (m) 605


(7)

43

93

143

193

18

28

38

48

58

68


(%)(HKD) Biostime International Rel to MSCI China

9

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10/21


6857 JP

ADVANTEST CORPJAPAN / SEMICONDUCTORS



Target Price (JPY) 1,150 1,208 (4.8)

EPS 2014 (JPY) (31) 27 nm

EPS 2015 (JPY) 27 37 (27.0)Positive Neutral Negative

Market Recs 1 9 7

HOLDUNCHANGEDTARGET

PRIOR TP

CLOSE

UP/DOWNSIDE

JPY1,150

JPY1,700

JPY1,118

+2.9%

INDUSTRY OUTLOOK

Rebound not until new year?

ESTIMATE CHANGESTester orders unexpectedly weak recently

We lower our estimates due to weak tester orders from Taiwans OSAT.Orders: Apr-Jun JPY39.5b, Jul-Sep JPY27b, Oct-Dec JPY26b, Jan-Mar 2014

JPY34.8b. Revised numbers: FY3/14 orders JPY127.3b (from JPY162.5b),sales JPY125.8b (JPY157b), OP JPY3.4b (JPY11.2b); FY3/15 ordersJPY140.7b (JPY173.9b), sales JPY140.7b (JPY174.9b), OP JPY7.6b (JPY18.7b).

OUTLOOKOrders may rise after foundry production recovers; maintain HOLD

Quarterly orders are a potential catalyst for Advantests share price. Wehad previously envisioned higher orders for low-end smartphones in Oct-Dec, but the picture is now less clear. Foundry production cuts may be afactor. We expect foundry production to recover in Oct-Dec and for ordersfrom Taiwans OSAT to climb from Jan-Mar. Hence, our HOLD rating.

VALUATIONLower TP to JPY1,150 (FY3/14E P/BV 1.5x), from JPY1,700 (2.0x)

Back-end testers market growth potential looks lower than that of the

front-end, where 3D-tech could boost demand. Advantest may post a lossagain in FY3/14, reducing prospects of a rise in its P/BV to 3x. We see 2xP/BV seen in May-Jun 2013 as the upper limit and lower our target P/BVto 1.5x (1-2x mid-point), from 2.0x (1-3x mid-point), to derive our TP.

KEY CHARTAdvantest: OP trend

Sources: Company; BNP Paribas estimates

(60)(40)(20)

0204060

80100

3/90

3/91

3/92

3/93

3/94

3/95

3/96

3/97

3/98

3/99

3/00

3/01

3/02

3/03

3/04

3/05

3/06

3/07

3/08

3/09

3/10

3/11

3/12

3/13

3/14E

3/15E

3/16E

(JPY b)

CHANGE IN NUMBERS


+81 3 6377 2259

11 OCTOBER 2013

KEY STOCK DATAYE Mar (JPY b) 2014E 2014C 2015E 2016E

Revenue 125.8 143.0 140.7 135.9

Op profit (3.4) 0 7.6 4.0

Prior op profit 11.2 13.0 18.7 16.9

Pretax profit (2.9) 0.5 7.6 4.0

Net profit (5.4) (2.5) 4.6 2.6

EPS (JPY) (31) (14) 27 15

P/E (x) (35.9) (78.6) 42.1 74.5

Dividend yield (%) 1.8 - 1.8 1.8

EV/EBITDA (x) 36.0 - 10.6 13.6

Price/book (x) 1.5 - 1.5 1.5

Net debt/equity (%) (21.1) - (21.2) (22.9)

ROE (%) (4.1) - 3.4 2.0


Absolute (%) (12.8) (32.5) 28.1

Relative to country (%) (12.3) (30.0) (32.3)

Next results October 2013



Free float (%) 76

Major shareholderMitsubishi UFJ Financial Group

(13%)

12m high/low (JPY) 1,839/846


ADR ticker ATE US

ADR closing price (USD; 9 Oct 2013) 11.64

Issued shares (b) 0.173

Sources: Bloomberg; Company estimates (C); BNP Paribasestimates

(37)

(27)

(17)

(7)

3

13

23

33

43

53

239

439

639

839

1,039

1,239

1,439

1,639

1,839


(%)(JPY) Advantest Corp Rel to TOPIX Index

10

7/27/2019 BNP daily 20131011

11/21


7735 JP

DAINIPPON SCREENJAPAN / SEMICONDUCTORS



Target Price (JPY) 550 579 (5.0)

EPS 2014 (JPY) 24 21 14.3

EPS 2015 (JPY) 40 38 5.3Positive Neutral Negative

Market Recs 8 7 1

HOLDUNCHANGEDTARGET

PRIOR TP

CLOSE

UP/DOWNSIDE

JPY550

JPY550

JPY528

+4.2%

INDUSTRY OUTLOOK

Ready for industry reshuffle?

CHANGETweaking estimates on growth in Jul-Sep SPE orders

We raise our Jul-Sep SPE orders estimate to JPY37b after the recentuptick in foundry orders. We estimate JPY34b in Oct-Dec and JPY35b in

Jan-Mar and have tweaked our earnings forecasts accordingly. We expect1H and full year FY3/14 OP to beat guidance. We estimate 1H OP at JPY4b(guidance: JPY2.5b) and full-year OP at JPY8.6b (guidance: JPY6.5b).

CATALYSTOrders steady but CEO decision on industry realignment vital

We expect foundries capex to remain high in 2014, but because y-ygrowth will be small, we do not expect on-going increases in quarterlyorders. We expect quarterly SPE orders to hover around JPY35b. In viewof the TEL-AMAT merger announcement, the DNS CEOs decision on howto respond to industry realignment will likely be more important.

VALUATIONWe maintain our target price at JPY550: HOLD

Our JPY550 target price is based on a FY3/14E P/BV of 1.5x. This is the

midpoint of their 1-2x P/BV range since 2010. On-going frontloading offoundry orders is an upside risk to our view. The main downside risk isthat planned initiatives to improve earnings in 2H do not bear fruit.

KEY CHARTSPE orders

Source: Company; BNP Paribas estimates

0

10203040

50

60

1Q

2Q

3Q

4Q

1Q

2Q

3Q

4Q

1Q

2Q

3Q

4Q

1Q

2Q

3Q

4Q

1QA

2QE

3QE

4QE

FY3/10 FY3/11 FY3/12 FY3/13 FY3/14

(JPY b)

CHANGE IN NUMBERS


+81 3 6377 2259

11 OCTOBER 2013


Revenue 216.5 211.0 217.5 193.0

Op profit 8.6 6.5 13.1 5.1

Prior op profit 7.9 - 13.2 4.3

Recurring profit 7.6 5.5 12.1 4.1

Net profit 5.6 4.0 9.6 2.5

EPS (JPY) 24 17 40 11

P/E (x) 22.4 31.1 13.1 50.1

Dividend yield (%) 0.6 0.6 1.9 0.9

EV/EBITDA (x) 11.0 - 7.8 13.8

Price/book (x) 1.5 - 1.3 1.3

Net debt/equity (%) 21.8 - 12.7 7.5

ROE (%) 6.5 - 10.3 2.6


Absolute (%) 7.1 (5.6) 40.8

Relative to country (%) 7.6 (3.0) (19.6)

Next results November 2013



Free float (%) 83

Major shareholder Japan Trustee Services Bank (9%)

12m high/low (JPY) 635/375


ADR ticker -




(37)

(27)

(17)

(7)

3

13

23

33

43

53

210

260

310

360

410

460

510

560

610

660


(%)(JPY) Dainippon Screen Rel to TOPIX Index

11

7/27/2019 BNP daily 20131011

12/21


4185 JP

JSR CORPJAPAN / TECHNOLOGY HARDWARE & EQUIPMENT



Target Price (JPY) 2,300 2,111 9.0

EPS 2014 (JPY) 122 132 (7.6)


Market Recs 11 8 2

BUYUNCHANGEDTARGET

PRIOR TP

CLOSE

UP/DOWNSIDE

JPY2,300

JPY2,300

JPY1,716

+34.0%

INDUSTRY OUTLOOK

Emergence of catalystsOUTLOOKFY3/15 earnings drivers to emerge from 4QFY3/14

Our positive view on JSR is intact, but the share price may trade lower inthe near term as investors factor in weak conditions for tech materials

prior to the emergence of catalysts. JSR could lower its FY3/14 guidance.But, we believe FY3/15 earnings drivers (tyre materials, semi-materialsfor TMSCs 20nm) emerging from 4QFY3/14 will drive up JSRs share price.

ESTIMATE CHANGESBullish medium-term view intact, though tech materials weak now

While JSRs petrochemical business is healthy, momentum is weak for finechemicals and other business. We expect 1HFY3/14 to meet guidance butsee a chance of shortfalls in FY3/14. We had expected semiconductor andLCD to drive JSRs 2H results, but markets are sluggish. Our OP estimates:1H JPY19b, FY3/14 JPY40b vs JSRs guidance of JPY18.5b and JPY43b.

VALUATIONThe stock has traded in the 10-16x P/E range since 2010

We lower our estimates but keep our TP of JPY2,300, using unchanged P/E

of 16x but on FY3/15E EPS (previously FY3/14E). We expect the shares totrade at the top end of their P/E range, driven by emerging catalyststowards FY3/15. Risks: petrochemicals slump on lower tyre demand,prolonged LCD inventory adjustment, delay in TSMCs mass production.

KEY CHARTShare price and quarterly OP trend

Sources: Bloomberg; BNP Paribas estimates

24681012

1416

0500

1,0001,5002,0002,500

3,0003,500

Apr-06

Oct-06

Apr-07

Oct-07

Apr-08

Oct-08

Apr-09

Oct-09

Apr-10

Oct-10

Apr-11

Oct-11

Apr-12

Oct-12

Apr-13

Oct-13

Apr-14E

Oct-14E

(JPY b)(JPY) Share price (LHS) Quarterly OP (RHS)

CHANGE IN NUMBERS


+81 3 6377 2259

11 OCTOBER 2013


Revenue 390.0 415.0 413.0 429.0

Op profit 40.0 43.0 47.0 53.0

Prior op profit 45.5 - 53.0 57.0


Net profit 28.6 31.5 33.2 37.1

EPS (JPY) 122 133 144 163

P/E (x) 14.1 12.9 11.9 10.5

Dividend yield (%) 2.2 2.2 2.4 2.9

EV/EBITDA (x) 6.5 - 5.7 5.1

Price/book (x) 1.2 - 1.1 1.1

Net debt/equity (%) (3.1) - (4.0) (5.8)

ROE (%) 8.7 - 9.6 10.1


Absolute (%) (7.2) (15.4) 37.5





Free float (%) 77

Major shareholder Bridgestone Corp (16%)

12m high/low (JPY) 2,329/1,235


ADR ticker -




(17)

(7)

3

13

23

33

677

877

1,077

1,277

1,477

1,677

1,877

2,077

2,277

2,477


(%)(JPY) JSR Corp Rel to TOPIX Index

12

7/27/2019 BNP daily 20131011

13/21


4063 JP

SHIN-ETSU CHEMICALJAPAN / TECHNOLOGY HARDWARE & EQUIPMENT



Target Price (JPY) 8,000 7,091 12.8

EPS 2014 (JPY) 307 306 0.3


Market Recs 15 8 1

BUYUNCHANGEDTARGET

PRIOR TP

CLOSE

UP/DOWNSIDE

JPY8,000

JPY8,000

JPY5,680

+40.8%

INDUSTRY OUTLOOK

Modest slowdown in 2H

CHANGEPVC upbeat, limited wafer downside, tweaking estimates

We continue to expect Shin-Etsu to report 1H OP of JPY97b, exceedingguidance (JPY88b). The PVC business is upbeat, and wafers have not

significantly eroded yet. However, we expect lower h-h wafer profit in 2H,due to the SK Hynix (000660 KS) fire impact and other factors. Revised OPestimate: FY3/14 JPY192b (from JPY195b), FY3/15 JPY205b (from JPY213b).

CATALYSTPVC and wafers are OP variable factors

US Shintech is performing well, and has sold available output through Oct(Shin-Etsu books Shintechs Apr-Jun results in its July-Sept statement).We therefore expect stronger 1H results than at SUMCO (3436 JP), also ondifferences in customer composition. 300mm business: high memory salesratio sustains full-production, low exposure to TSMC (2330 TT).

VALUATIONMaintaining our JPY8,000 target price and BUY rating

We maintain our JPY8,000 target price, despite slight revisions to our

estimates, due to shifting the base year to FY3/15 from FY3/14, with anunchanged 25x P/E multiple. Primary risks are a drop in PVC prices andwafer inventory adjustments.

KEY CHARTSegment OP

Sources: Shin-Etsu Chemical; BNP Paribas estimates

0

20

40

60

6/09

9/09

12/09

3/10

6/10

9/10

12/10

3/11

6/11

9/11

12/11

3/12

6/12

9/12

12/12

3/13

6/13

9/13E

12/13E

3/14E

6/14E

9/14E

12/14E

3/15E

(JPYb ) PVC/Chlor-Alkali SiliconesSemi silicon Specialty chemicalsElec. & functional materials Others

CHANGE IN NUMBERS


+81 3 6377 2259

11 OCTOBER 2013


Revenue 1,089.0 1,060.0 1,135.0 1,167.0

Op profit 192.0 170.0 205.0 220.0

Prior op profit 195.0 - 213.0 229.0


Net profit 130.3 110.0 138.8 148.7

EPS (JPY) 307 259 327 350

P/E (x) 18.5 21.9 17.4 16.2

Dividend yield (%) 1.8 1.8 2.1 2.1

EV/EBITDA (x) 7.3 - 6.5 5.9

Price/book (x) 1.4 - 1.3 1.3

Net debt/equity (%) (17.5) - (19.0) (19.1)

ROE (%) 7.6 - 7.7 7.8


Absolute (%) (6.3) (18.0) 28.1





Free float (%) 96

Major shareholderJapan Trustee Services Bank

(9%)

12m high/low (JPY) 7,250/4,315


ADR ticker SHECY US

ADR closing price (USD; 9 Oct 2013) 14.66



(25)

(15)

(5)

5

15

25

1,320

2,320

3,320

4,320

5,320

6,320

7,320


(%)(JPY) Shin-Etsu Chemical Rel to TOPIX Index

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14/21


5713 JP

SUMITOMO METAL MININGJAPAN / METALS & MINING



Target Price (JPY) 1,100.00 1,305.56 (15.7)

EPS 2014 (JPY) 120 119 0.1


Market Recs 4 10 1

REDUCEUNCHANGEDTARGET

PRIOR TP

CLOSE

UP/DOWNSIDE

JPY1,100.00

JPY1,100.00

JPY1,336.00

-17.7%

INDUSTRY OUTLOOK

Risk of underperformanceCHANGEMaintain JPY1,100 TP, REDUCE rating

We lift our forecasts ahead of 8 Nov results. Mgmt. is likely to cut FYguidance with 1H results, as it left FY unchanged when cutting 1H targets

at 1Q. We maintain our REDUCE rating. Non-ferrous prices are stabilizingwith the lull in USD appreciation; we maintain our view that prices willweaken into 2014. We believe SMM remains overvalued.

CATALYSTLikely to cut FY guidance even if 1H outperforms

1H RP is likely to recover to JPY55b versus guidance of JPY47b as priceswere higher in Aug-Sep. We revise up our price assumption for copperfrom USD6,800/t to USD7,200/t, but maintain nickel at USD6.2/lb, gold atUSD1,300/oz, JPY100/USD and increase our FY3/14 RP estimate fromJPY90b to JPY95b, this is below the guidance target of JPY106b.

VALUATIONJPY1,100 TP is FY3/14E 9x, BPS 0.7x

We lower our target P/E from 10x to 9x, P/B is unchanged. Non-ferrousprices rose in September but supply-demand is unlikely to improve and

prices are unlikely to rise from here, so we do not think expectations ofprofit expansion will increase. The shares, at a P/E of over 10x, have moredownside risk than upside potential, in our view.

KEY CHARTNickel and copper prices remain lacklustre

Sources: Bloomberg; BNP Paribas

0

1,000

2,000

3,000

4,000

0

10,000

20,000

30,000

40,000

50,000

2000 2002 2004 2006 2008 2010 2012

(JPY)(USD/mtonnes)

LME Nickel spot SMM

CHANGE IN NUMBERS

Toshiyuki [email protected]

+81 3 6377 2236

11 OCTOBER 2013

KEY STOCK DATAYE Mar (JPY b) 2014E 2015E 2016E

Revenue 843.0 862.0 871.0

Op profit 72.0 80.0 85.0

Prior op profit 75.0 72.0 77.0

Recurring profit 95.0 95.0 100.0

Net profit 66.0 66.0 69.0

EPS (JPY) 120 120 125

P/E (x) 11.2 11.2 10.7

Dividend yield (%) 2.4 2.4 2.4

EV/EBITDA (x) 6.8 6.6 6.5

Price/book (x) 0.9 0.8 0.8

Net debt/equity (%) 8.1 8.9 9.3

ROE (%) 8.2 7.7 7.6


Absolute (%) (2.8) 11.0 27.2

Relative to country (%) (2.3) 13.5 (33.1)




Free float (%) 90

Major shareholder Japan Trustee (6%)

12m high/low (JPY) 1,607.00/1,013.00


ADR ticker -


Issued shares (m) 552.2


(37)

(27)

(17)

(7)

3

13

23

33

43

53

554

754

954

1,154

1,354

1,554

1,754


(%)(JPY) Sumitomo Metal Mining Rel to TOPIX Index

14

7/27/2019 BNP daily 20131011

15/21

3Q13 earnings preview: Still solid

Booking a non-recurring gain of THB1.5b in 3Q13

We have a BUY call on SCC with a DCF-based TP of THB480. We

estimate 3Q13 net profit rose 42% y-y to THB9.1b (BBG consensus:

THB9.2b) driven by a THB1.5b non-recurring gain from the fair value

adjustment of investments in Siam Sanitary Ware(not listed) andSiam Fitting (not listed).

We maintain our full year forecasts

We estimate 9M13 recurring net profit of THB26.3b to account for

76% of our full year forecast of THB34.6b (BBG consensus:

THB34.5b). We expect 4Q13 net profit to remain solid due dividend

income from investments especially in automotive business, which

are generally booked in the second and fourth quarters.

Recurring profit to drop 23% q-q, but rise 18.6% y-y

We estimate 3Q13 recurring net profit fell 23% q-q to THB7.6b due to

seasonality and soft domestic demand in its cement and paper

businesses caused by floods and slow exports. However, this would

be a 18.6% y-y increase because of improved earnings contributionfrom the chemical business.

Chemical earnings to fall 10% q-q, but rise 30% y-y

We expect 3Q13 chemical business earnings fell 10% q-q, because

of rising ethylene and propylene costs (due to PTTs GSP#5 accident

and slightly declining product spreads. However, this would be a 30%

y-y increase as spreads have improved significantly y-y.

Results announcement: 30 October 2013

Key points to watch Impact/Action

Bloomberg spot HDPE and PP prices in 3Q13rose slightly q-q, but spreads fell slightly.

Ethylene and propylene costs have risen dueto PTTs GSP#5 accident.

We expect SCC booked little inventory gain in3Q13, but that its chemical business recurring

earnings fell 10% q-q . However, that wouldbe a 30% y-y rise as spreads have improvedsignificantly y-y.

We expect 3Q13 cement sales volume fell q-qdue to seasonality, while ex-factory priceswere flat or up slightly q-q to THB1,850-1,900/tonne.

We expect cement earnings to have fallen aslight 4% q-q.

Sources: Bloomberg consensus; BNP Paribas/FSS estimates

PREPARED BY THE INTERNATIONAL INVESTMENT ADVISORY TEAM OF FINANSIA SYRUS SECURITIES PUBLIC COMPANY LIMITED, A NON-

US BROKER-DEALER. CO-DISTRIBUTED WITH BNP PARIBAS. PLEASE REFER TO FIRST PARAGRAPH OF GENERAL DISCLAIMER FOR DETAIL.

11 OCTOBER 2013

THAILAND/ CONSTRUCTION

SIAM CEMENT SCC TB

BUYUNCHANGED

TARGET PRICE THB480.00

CLOSE THB432.00

UP/DOWNSIDE +11.1%

PRIOR TP THB480.00



TARGET PRICE (%) (7.7) POSITIVE 25

EPS 2013 (%) 0.3 NEUTRAL 1

EPS 2014 (%) (6.7) NEGATIVE 4

Somkij [email protected]

+66 2 611 3535

KEY STOCK DATA

YE Dec (THB m) 2012A 2013E 2014E 2015E

Revenue 407,601 409,204 454,795 467,784

Rec. net profit 23,580 34,574 37,296 38,804

Recurring EPS (THB) 19.65 28.81 31.08 32.34

Prior rec. EPS (THB) 19.65 28.81 31.08 32.34

Chg. In EPS est. (%) 0.0 0.0 0.0 0.0

EPS growth (%) (13.2) 46.6 7.9 4.0

Recurring P/E (x) 22.0 15.0 13.9 13.4

Dividend yield (%) 2.5 3.9 4.2 4.4

EV/EBITDA (x) 15.5 10.9 10.7 10.5

Price/book (x) 3.6 3.2 2.8 2.6

Net debt/Equity (%) 88.6 92.8 96.1 97.3

ROE (%) 16.6 22.5 21.4 20.1


Absolute (%) 2.4 0.9 22.4

Relative to country (%) 1.2 (1.2) 16.6




Free float (%) 68

Major shareholder Crown Property of Bureau (30%)

12m high/low (THB) 500.00/349.00


ADR ticker -



Sources: Bloomberg consensus; BNP Paribas/FSS estimates

0

10

20

30

349

399

449

499

549


(%)(THB) Siam Cemen t Rel to MSCI Th ailand

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Expecting another weak quarter

We expect another weak quarter

We expect BHELs 2Q results to remain weak as the execution

issues which surfaced in 1Q due to stalled projects have continued,

with the exception of Bajaj Hindusthans Lalithpur project where

BHEL has resumed work. We estimate 2Q revenues to fall 12.3% y-y

but to rise 43.5% q-q as 1Q is typically a lean quarter.

We are below consensus on lower margins

While we are 5% above the Bloomberg consensus on sales, our

recurring EPS estimate of INR2.89 is 22% below consensus as we

assume lower margins due to sluggish execution and higher

employee expenses related to the BHPV amalgamation. We estimate

a one-time INR1.08/share charge related to the amalgamation.

Zero power segment orders in 2Q

Despite continued weak orders in 2Q, the stock rebounded on

tendering for setting up two UMPPs worth INR400b.While developers

may be selected in 4QFY14, equipment orders wont come before

3QFY15, as land acquisition for the projects will take time.

We reiterate our REDUCE rating and INR95 TP

We reiterate our REDUCE on BHEL given our concerns of stretched

working capital, potential bad debt and potential order cancellations.

Our DCF-based TP of INR95 is based on free cash flows for the next

10 years discounted at a cost of equity of 15.1%. We assume a

terminal growth rate of 3%.

Results announcement: date TBC

Key points to watch Impact/action

Order in-take/order pipeline There were no major orders in 1HFY14. We would look formanagement comments on the new UMPP endering and SDB norms.

Outstanding receivables Update on the recent legal action taken by the company against fewcustomers to recover outstanding dues.

Liquidated damages Execution remains poor. We would look for provisions made forliquidated damages on delays in executing orders.

BHPV Amalgamation We are interested in how confident management is about aturnaround of BHPV by FY16.

Source: BNP Paribas estimates

11 OCTOBER 2013

INDIA/ CAPITAL GOODS

BHARAT HEAVY ELECTRICALS BHEL IN

REDUCEUNCHANGED

TARGET PRICE INR95.00

CLOSE INR147.65

UP/DOWNSIDE -35.7%

PRIOR TP INR95.00



TARGET PRICE (%) (29.2) POSITIVE 6

EPS 2014 (%) (21.5) NEUTRAL 15

EPS 2015 (%) (33.7) NEGATIVE 37

Girish [email protected]

+91 22 33704380

Shailendra Kumar [email protected]

+91 22 33704381

KEY STOCK DATA

YE Mar (INR m) 2013A 2014E 2015E 2016E

Revenue 476,177 366,412 300,638 306,446

Rec. net profit 66,147 35,987 24,064 18,618

Recurring EPS (INR) 27.03 14.70 9.83 7.61

Prior rec. EPS (INR) 27.03 14.70 9.83 7.61

Chg. In EPS est. (%) 0.0 0.0 0.0 0.0

EPS growth (%) (6.0) (45.6) (33.1) (22.6)

Recurring P/E (x) 5.5 10.0 15.0 19.4

Dividend yield (%) 4.6 3.2 2.3 1.8

EV/EBITDA (x) 2.8 5.6 7.4 8.3

Price/book (x) 1.2 1.1 1.1 1.0

Net debt/Equity (%) (20.7) (2.7) (12.2) (9.0)

ROE (%) 23.7 11.4 7.2 5.4


Absolute (%) 3.3 (19.8) (39.8)


Next results Novermber 2013



Free float (%) 32

Major shareholder Government of India (68%)

12m high/low (INR) 251.65/101.35


ADR ticker -




(72)

(52)

(32)

(12)

8

75

125

175

225

275


(%)(INR) Bharat Heavy Electricals Rel to MSCI India

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Uneventful 2Q, but catalysts ahead

2QFY14 results likely to be uneventful

Seasonally the weakest period for both toll and construction

business, 2QFY14 is unlikely to have witnessed material growth. We

forecast 18% top line growth brought about by the addition of new

roads, but a 3% earnings decline on additional fixed costs

(depreciation + interest).

Looking for details on toll rate hikes, refinancing options

During 2QFY14, a couple of projects underwent a toll-rate hike that

we assume was around 6-8%. We expect more details on IRBs

refinancing and take-out financing options that IRB was looking to

explore at the end of 1QFY14.

Catalysts: Restructuring of premium and resumption of awards

We see two potential positive catalysts in the next two quarters

restructuring of premium by NHAI and resumption of award activity.

Recently, the CCEA has also in-principle approved the proposal for

restructuring of premium by NHAI for certain projects. A couple of

IRBs projects could benefit from this development.

We maintain our TP of INR152

We make no changes to our target price; BOT contributes

INR113/share and the construction business INR39. Company-

specific downside risks include lower-than-expected traffic or toll

increases, slower execution, higher-than-expected capex, continued

negative publicity, and an adverse outcome from the CBI

investigation. We adjust our FY14/15 estimates by +7%/-3% after

incorporation of 1QFY14 toll collections.

Result announcement: November 2013

Key points to watch Impact/Action

Expecting 13% increase in net tollrevenue y-y

A 5% change in toll revenue growth impactsconsolidated 2Q profits by 7%

Expecting 13% increase inconstruction revenue y-y

A 5% change in construction revenue growth impactsconsolidated 2Q profits by 6.5%

Expecting 30% constructionEBITDA margin

A 100bp change in margin impacts consolidated Q2profits by 4.4%

Source: BNP Paribas estimates

11 OCTOBER 2013

INDIA/ CAPITAL GOODS

IRB INFRASTRUCTURE IRB IN

BUYUNCHANGED

TARGET PRICE INR152.00

CLOSE INR79.50

UP/DOWNSIDE +91.2%

PRIOR TP INR152.00



TARGET PRICE (%) 11.8 POSITIVE 31

EPS 2014 (%) (14.7) NEUTRAL 3

EPS 2015 (%) (16.1) NEGATIVE 1

Vishal Sharma, [email protected]

+91 22 33704377

KEY STOCK DATA

YE Mar (INR m) 2013A 2014E 2015E 2016E

Revenue 38,174 40,385 44,267 43,067

Rec. net profit 5,567 4,601 4,448 4,410

Recurring EPS (INR) 16.75 13.85 13.39 13.27

Prior rec. EPS (INR) 16.75 12.95 13.85 -

Chg. In EPS est. (%) - 6.9 (3.3) N/A

EPS growth (%) 12.2 (17.4) (3.3) (0.9)

Recurring P/E (x) 4.7 5.7 5.9 6.0

Dividend yield (%) 4.4 4.4 4.4 6.3

EV/EBITDA (x) 5.1 5.7 5.9 5.2

Price/book (x) 0.8 0.7 0.7 0.6

Net debt/Equity (%) 217.1 232.1 250.6 236.5

ROE (%) 18.2 13.4 11.8 10.8


Absolute (%) 16.7 (16.7) (46.6)



Mkt cap (USD m) 427


Free float (%) 40

Major shareholder Promoter group (63%)

12m high/low (INR) 155.70/54.35


ADR ticker -


Issued shares (m) 332


(82)

(62)

(42)

(22)

(2)

39

89

139


(%)(INR) I RB Infrastruc ture Rel to MSCI In dia

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SPOTLIGHT ON ASIA 11 OCTOBER 2013

BNP PARIBAS

Disclaimers and Disclosures

APPENDIX

DISCLAIMERS AND DISCLOSURES APPLICABLE TO NON-US BROKER-DEALER(S) (BNP Paribas Securities (Asia) Ltd)

The analyst(s) or strategist(s) herein each referred to as analyst(s) named in this report certify(ies) that (i) all views expressed in this report accurately

reflect the personal view of the analyst(s) with regard to any and all of the subject securities, companies or issuers mentioned in this report; and (ii) no partof the compensation of the analyst(s) was, is, or will be, directly or indirectly, related to the specific recommendations or views expressed by the researchanalyst herein.Analysts mentioned in this disclaimer are employed by a non-US affiliate of BNP Paribas Securities Corp., and are not registered/ qualified pursuant to NYSEand/or FINRA regulations.

IMPORTANT DISCLOSURES REQUIRED IN THE UNITED STATES BY FINRA RULES AND OTHER JURISDICTIONS"BNP Paribas is the marketing name for the global banking and markets business of BNP Paribas Group. No portion of this report was prepared by BNPParibas Securities Corp (US) personnel, and it is considered Third-Party Affiliate research under NASD Rule 2711. The following disclosures relate torelationships between companies covered in this research report and the BNP entity identified on the cover of this report, BNP Securities Corp., and otherentities within the BNP Paribas Group (collectively, "BNP Paribas").

The disclosure column in the following table lists the important disclosures applicable to each company that has been rated and/or recommended in thisreport:

Company Ticker Disclosure (as applicable)

N/A N/A N/A

BNP Paribas represents that:1. Within the past year, it has managed or co-managed a public offering for this company, for which it received fees.2. It had an investment banking relationship with this company in the last 12 months.3. It received compensation for investment banking services from this company in the last 12 months.4. It expects to receive or intends to seek compensation for investment banking services from the subject company/ies in the next 3 months.5. It beneficially owns 1% or more of any class of common equity securities of the subject company.6. It makes a market in securities in respect of this company.7. The analyst(s) or an individual who assisted in the preparation of this report (or a member of his/her household) has a financial interest position in

securities issued by this company. The financial interest is in the common stock of the subject company, unless otherwise noted.8. The analyst (or a member of his/her household) is an officer, director, or advisory board member of this company or has received compensation from the

company.

IMPORTANT DISCLOSURES REQUIRED IN KOREAThe disclosure column in the following table lists the important disclosures applicable to each Korea listed company that has been rated and/orrecommended in this report:

1. The performance of obligations of the Company is directly or indirectly guaranteed by BNP Paribas Securities Korea Co. Ltd (BNPPSK) by means ofpayment guarantees, endorsements, and provision of collaterals and/or taking over the obligations.

2. BNPPSK owns 1/100 or more of the total outstanding shares issued by the Company.3. The Company is an affiliate of BNPPSK as prescribed by Item 3, Article 2 of the Monopoly Regulation and Fair Trade Act.4. BNPPSK is the financial advisory agent of the Company for the Merger and Acquisition transaction or of the Target Company whereby the size of the

transaction does not exceed 5/100 of the total asset of the Company or the total number of outstanding shares.5. BNPPSK has taken financial advisory service regarding listing to the Company within the past 1 year.6. With regards to the tender offer initiated by the Company based on Item 2, Article 133 of the Financial Investment Services and Capital Market Act,

BNPPSK acts in the capacity of the agent for the tender offer designated either by the Company or by the target company, provided that this provisionshall apply only where tender offer has not expired.7. the listed company which issued the stocks in question in case where 40 days has not passed since the new shares were listed from the date of entering

into arrangement for public offering or underwriting-related agreement for issuance of stocks8. The Company is recognized as having considerable interests with BNPPSK.9. The analyst or his/her spouse owns (including delivery claims of marketable securities based on legal regulations and trading and misc. contracts) the

following securities or rights (hereinafter referred to as Securities, etc. in this Article) regardless of whose name is used in the trading.1) Stocks, bond with stock certificate, and certificate of pre-emptive rights issued by the Company whose securities dealings are being solicited.2) Stock options of the Company whose securities dealings are being solicited.3) Individual stock future, stock option, and warrants that use the stocks specified in Item 1) as underlying.

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BNP PARIBAS

GENERAL DISCLAIMERThis report was produced by BNP Paribas Securities (Asia) Ltd, member company(ies) of the BNP Paribas Group.This report is for the use of intended recipients only and may not be reproduced (in whole or in part) or delivered or transmitted to any other person withoutour prior written consent. By accepting this report, the recipient agrees to be bound by the terms and limitations set forth herein.This report does not constitute a personal recommendation or take into account the particular investment objectives, financial situations, or needs ofindividual clients. Customers are advised to use the information contained herein as just one of many inputs and considerations prior to engaging in anytrading activity. This report does not constitute a prospectus or other offering document or an offer or solicitation to buy or sell any securities or otherinvestments. This report is not intended to provide the sole basis of any evaluation of the subject securities and companies mentioned in this report.

Information and opinions contained in this report are published for reference of the recipients and are not to be relied upon as authoritative or without therecipients own independent verification, or taken in substitution for the exercise of judgment by the recipient. Additionally, the products mentioned in thisreport may not be available for sale in certain jurisdictions.As an investment bank with a wide range of activities, BNP Paribas may face conflicts of interest, which are resolved under applicable legal provisions andinternal guidelines. You should be aware, however, that BNP Paribas may engage in transactions in a manner inconsistent with the views expressed in thisdocument, either for its own account or for the account of its clients.

Australia: This report is being distributed in Australia by BNP Paribas Sydney Branch, registered in Australia as ABN 23 000 000 117 at 60 Castlereagh StreetSydney NSW 2000. BNP Paribas Sydney Branch is licensed under the Banking Act 1959 and the holder of Australian Financial Services Licence no. 238043 andtherefore subject to regulation by the Australian Securities & Investments Commission in relation to delivery of financial services. By accepting this documentyou agree to be bound by the foregoing limitations, and acknowledge that information and opinions in this document relate to financial products or financialservices which are delivered solely to wholesale clients (in terms of the Corporations Act 2001, sections 761G and 761GA; Corporations Regulations 2001,division 2, reg. 7.1.18 & 7.1.19) and/or professional investors (as defined in section 9 of the Corporations Act 2001).

Canada: The information contained herein is not, and under no circumstances is to be construed as, a prospectus, an advertisement, a public offering, anoffer to sell securities described herein, or solicitation of an offer to buy securities described herein, in Canada or any province or territory thereof. Any offeror sale of the securities described herein in Canada will be made only under an exemption from the requirements to file a prospectus with the relevantCanadian securities regulators and only by a dealer properly registered under applicable securities laws or, alternatively, pursuant to an exemption from the

dealer registration requirement in the relevant province or territory of Canada in which such offer or sale is made. The information contained herein is underno circumstances to be construed as investment advice in any province or territory of Canada and is not tailored to the needs of the recipient. To the extentthat the information contained herein references securities of an issuer incorporated, formed or created under the laws of Canada or a province or territoryof Canada, any trades in such securities must be conducted through a dealer registered in Canada. No securities commission or similar regulatory authority inCanada has reviewed or in any way passed judgment upon these materials, the information contained herein or the merits of the securities described herein,and any representation to the contrary is an offence.

Hong Kong: This report is prepared for professional investors and is being distributed in Hong Kong by BNP Paribas Securities (Asia) Limited to persons whosebusiness involves the acquisition, disposal or holding of securities, whether as principal or agent. BNP Paribas Securities (Asia) Limited, a subsidiary of BNPParibas, is regulated by the Securities and Futures Commission for the conduct of dealing in securities, advising on securities, providing automated tradingservices, dealing in futures contacts and advising on corporate finance. For professional investors in Hong Kong, please contact BNP Paribas Securities (Asia)Limited for all matters and queries relating to this report.

India: In India, this document is being distributed by BNP Paribas Securities India Pvt. Ltd. ("BNPPSIPL"), having its registered office at 5th floor, BNP ParibasHouse, 1 North Avenue, Maker Maxity, Bandra Kurla Complex, Bandra (East), Mumbai 400 051 (Tel. no. +91 22 3370 4000 / 6196 4000). BNPPSIPL is registeredwith the Securities and Exchange Board of India (SEBI) as a stockbroker in the Equities and the Futures & Options segments of National Stock Exchange ofIndia Ltd. and Bombay Stock Exchange Ltd. (SEBI regn. nos. INB/INF231474835, INB/INF011474831).

Indonesia: This report is being distributed by PT BNP Paribas Securities Indonesia and is delivered by licensed employee(s) to its clients. PT BNP ParibasSecurities Indonesia, having its registered office at Menara BCA, 35th Floor, Grand Indonesia, Jl. M.H.Thamrin No.1, Jakarta, 10310, Indonesia, is a fullysubsidiaries company of BNP Paribas SA and is licensed under Capital Market Law No. 8 of 1995 and the holder of broker-dealer and underwriter licensesissued by the Capital Market and Financial Institutions Supervisory Agency (BAPEPAM-LK). PT BNP Paribas Securities Indonesia is also a member of IndonesiaStock Exchange. Neither this research publication nor any copy hereof may be distributed in Indonesia or to any Indonesian citizens except in compliancewith applicable Indonesian capital market laws and regulations. This research publication is not an offer of securities in Indonesia. Some of the securitiesreferred to in this research publication have not been registered with the Capital Market and Financial Institutions Supervisory Agency (BAPEPAM-LK)pursuant to relevant capital market laws and regulations, and may not be offered or sold within the territory of the Republic of Indonesia or to Indonesiancitizens through a public offering or in circumstance which constitute an offer within the meaning of Indonesian capital market laws and regulations.

Japan: This report is being distributed to Japanese based firms by BNP Paribas Securities (Japan) Limited or by a subsidiary or affiliate of BNP Paribas notregistered as a financial instruments firm in Japan, to certain financial institutions defined by article 17-3, item 1 of the Financial Instruments and ExchangeLaw Enforcement Order. BNP Paribas Securities (Japan) Limited is a financial instruments firm registered according to the Financial Instruments andExchange Law of Japan and a member of the Japan Securities Dealers Association, the Financial Futures Association of Japan and the Type II FinancialInstruments Firms Association. BNP Paribas Securities (Japan) Limited accepts responsibility for the content of a report prepared by another non-Japanaffiliate only when distributed to Japanese based firms by BNP Paribas Securities (Japan) Limited. Some of the foreign securities stated on this report are notdisclosed according to the Financial Instruments and Exchange Law of Japan.

Malaysia: This report is issued and distributed by BNP Paribas Capital (Malaysia) Sdn Bhd. The views and opinions in this research report are our own as ofthe date hereof and are subject to change. BNP Paribas Capital (Malaysia) Sdn Bhd has no obligation to update its opinion or the information in this researchreport. This publication is strictly confidential and is for private circulation only to clients of BNP Paribas Capital (Malaysia) Sdn Bhd. This publication isbeing provided to you strictly on the basis that it will remain confidential. No part of this material may be (i) copied, photocopied, duplicated, stored orreproduced in any form by any means or (ii) redistributed or passed on, directly or indirectly, to any other person in whole or in part, for any purposewithout the prior written consent of BNP Paribas Capital (Malaysia) Sdn Bhd.

Philippines:This report is being distributed in the Philippines by BNP Paribas Manila Branch, an Offshore Banking Unit (OBU) of BNP Paribas whose headoffice is in Paris, France. BNP Paribas Manila OBU is registered as an offshore banking unit under Presidential Decree No. 1034 (PD 1034), and regulated bythe Bangko Sentral ng Pilipinas. This report is being distributed in the Philippines to qualified clients of OBUs as allowed under PD 1034, and is qualified in itsentirety to the products and services allowed under PD 1034.

Singapore: This report is distributed in Singapore by BNP Paribas Securities (Singapore) Pte Ltd ("BNPPSSL") and may be distributed in Singapore only to anAccredited or Institutional Investor, each as defined under the Financial Advisers Regulations ("FAR") and the Securities and Futures Act (Chapter 289) ofSingapore, as amended from time to time. In relation to the distribution to such categories of investors, BNPPSSL and its representatives are exempted underRegulation 35 of the FAR from the requirements in Section 36 of the Financial Advisers Act of Singapore, regarding the disclosure of certain interests in, orcertain interests in the acquisition or disposal of, securities referred to in this report. For Institutional and Accredited Investors in Singapore, please contactBNP Paribas Securities (Singapore) Ptd Ltd for all matters and queries relating to this report.

South Africa: In South Africa, BNP Paribas Cadiz Securities (Pty) Ltd and BNP Paribas Cadiz Stock Broking (Pty) Ltd (hereinafter referred to as BNPP Cadiz)are licensed members of Johannesburg Stock Exchange and are authorised Financial Services Providers and subject to regulation by the Financial ServicesBoard. BNPP Cadiz does not expressly or by implication represent, recommend or propose that the financial products referred to in this report areappropriate to the particular investment objectives, financial situation or particular needs of the recipient.

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BNP PARIBAS

Switzerland: This report is intended solely for customers who are Qualified Investors as defined in article 10 paragraphs 3 and 4 of the Swiss Federal Acton Collective Investment Schemes of 23 June 2006 (CISA) and the relevant provisions of the Swiss Federal Ordinance on Collective Investment Schemes of 22November 2006 (CISO). Qualified Investors includes, among others, regulated financial intermediaries such as banks, securities dealers, fund managementcompanies and asset managers of collective investment schemes, regulated insurance companies as well as pension funds and companies with professionaltreasury operations. This document may not be suitable for customers who are not Qualified Investors and should only be used and passed on to QualifiedInvestors. For specification purposes, a Swiss Corporate Customer is a Client which is a corporate entity, incorporated and existing under the laws ofSwitzerland and which qualifies as Qualified Investor as defined above." BNP Paribas (Suisse) SA is authorised as bank and as securities dealer by the SwissFederal Market Supervisory Authority FINMA. BNP Paribas (Suisse) SA is registered at the Geneva commercial register under No. CH-270-3000542-1. BNPParibas (Suisse) SA is incorporated in Switzerland with limited liability. Registered Office: 2 place de Hollande, CH-1204 Geneva.

Taiwan: Information on securities that trade in Taiwan is distributed by BNP Paribas Securities (Taiwan) Co., Ltd. Such information is for your reference only.The reader should independently evaluate the investment risks and is solely responsible for their investment decision. Information on securities that do nottrade in Taiwan is for informational purposes only and is not to be construed as a recommendation or a solicitation to trade in such securities. BNP ParibasSecurities (Taiwan) Co., Ltd. may not execute transactions for clients in these securities. This publication may not be distributed to the public media orquoted or used by the public media without the express written consent of BNP Paribas.

Thailand: Research relating to Thailand and Thailand based issuers is produced pursuant to an arrangement between BNP PARIBAS (BNPP) and FinansiaSyrus Securities Public Company Limited (FSS). The International Investment Advisory Team at FSS prepares and distributes research under the brandname BNP PARIBAS/FSS. FSS is not an affiliate of BNPP. FSS also publishes a different research product under the brand name FINANSIA SYRUS, which isprepared by research analysts who are not part of the International Investment Advisory Team and who may cover the same securities, issuers, or industriesthat are the subject of this report. The ratings, recommendations, and views expressed in this report may differ from the ratings, recommendations, andviews expressed by other research analysts or research teams employed by FSS. This report is being distributed outside Thailand by members of BNPParibas.

Turkey:This report is being distributed in Turkey by TEB Investment and outside Turkey jointly by TEB Investment and BNP Paribas.Notice Published inaccordance with Communiqu Regarding the Principles on Investment Consultancy Activities and the Investment Consultancy Institutions Series: V, No: 55issued by the Capital Markets Board. The investment related information, commentary and recommendations contained herein do not constitute investmentconsultancy services. Investment consultancy services are provided in accordance with investment consultancy agreements executed between investors and

brokerage companies or portfolio management companies or non-deposit accepting banks. The commentary and recommendations contained herein arebased on the personal views of the persons who have made such commentary and recommendations. These views may not conform to your financialstanding or to your risk and return preferences. Therefore, investment decisions based solely on the information provided herein may fail to produce resultsin accordance with your expectations.

United States: This report may be distributed in the United States only to U.S. Persons who are major U.S. institutional investors (as such term is defined inRule 15a-6 under the Securities Exchange Act of 1934, as amended) and is not intended for the use of any person or entity that is not a major U.S.institutional investor. U.S persons who wish to effect transactions in securities discussed herein must do so through BNP Paribas Securities Corp., a US-registered broker dealer and member

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