Amata Corp Public Co. Ltd.

Rating Change BUY

Equity | Thailand | Real Estate/Property
25 October 2007

Back in the game

Sirichai Chalokepunrat +66 2 305 9204
Research Analyst
Phatra Securities
„ Upgrade to BUY
We upgrade AMATA to Buy from Neutral. The share price is down 27% from its
sirichai@phatrasecurities.com

peak and down 10% since we initiated coverage. We think the worst is over for
domestic land sales this year, with a clearer political situation and better investor
confidence. Our 12M PO is Bt19.8/share based on sum-of-the-parts methodology.
„ Stock Data
Price Bt15.70
Our target does not include potential sales of RBFs into a property fund, or Price Objective Bt19.80
potential further power plant investments by AMATA. Date Established 25-Oct-2007
Investment Opinion C-2-7 to C-1-7
Earnings raised by 8% in 2008, 17% in 2009 Volatility Risk HIGH
52-Week Range Bt9.45-Bt17.70
We raised earnings by 8% for 2008 and 17% for 2009 to reflect our expectation of Mrkt Val / Shares Out (mn) US$530 / 1,067.0
better industrial estate land sales, strong backlog carried over from 2007, and Average Daily Volume 1,334,856
continuous investment from supply chain of new investors e.g. Kubota. ML Symbol / Exchange AMCXF / SET
Bloomberg / Reuters AMATA TB / AMAT.BK
Investment expected to return ROE (2007E) 20.3%
Net Dbt to Eqty (Dec-2006A) 76.3%
Confidence should rebound after investors have been in ‘wait-and-see’ mode
Est. 5-Yr EPS / DPS Growth 1.6% / 1.0%
since 2006 due to political uncertainties. We think expansion of current facilities is Free Float 63.4%
inevitable. AMATA is well-known among investors for its unique location and
should maintain its market share and outperform others in terms of land sales.

Vietnam represents additional, hidden value

We have changed our valuation method for AMATA from DCF to sum-of-the parts
to better incorporate the Vietnam operation, which has become more significant.
We expect a 20% YoY rise in land sales in 2008 to 60ha, supported by strong FDI
growth and premium location 30km from Ho Chi Minh City with light competition.

„ (Bt)
Estimates (Dec)
2005A 2006A 2007E 2008E 2009E
Net Income (Adjusted - mn) 1,058 781 790 954 1,093
EPS 0.991 0.732 0.740 0.894 1.02
EPS Change (YoY) 49.7% -26.2% 1.1% 20.9% 14.5%
Dividend / Share 0.650 0.450 0.444 0.537 0.615
Free Cash Flow / Share 0.422 (0.868) (0.117) 0.823 0.460

Valuation (Dec)
2005A 2006A 2007E 2008E 2009E
P/E 15.84x 21.45x 21.22x 17.55x 15.32x
Dividend Yield 4.14% 2.87% 2.83% 3.42% 3.92%
EV / EBITDA* 11.99x 14.12x 13.54x 11.98x 10.78x
Free Cash Flow Yield* 2.69% -5.53% -0.747% 5.24% 2.93%
* For full definitions of iQmethod SM measures, see page 19.

Issued by Phatra Securities Public Company Limited (Phatra) and distributed locally by Phatra, under a Research Co-Operation Agreement with Merrill Lynch.
Phatra does does and seeks to do business with companies covered in its research reports. As a result, investors should be aware that the firm may
have a conflict of interest that could affect the objectivity of this report. Investors should consider this report as only a single factor in making their
investment decision.
Refer to important disclosures on page 20 to 21. Analyst Certification on page 18. Price Objective Basis/Risk on page 18. 10664571
 Amata Co rp Public Co. Ltd.
2 5 Oc to be r 2 007

iQprofile Amata Corp Public Co. Ltd.

SM

Key Income Statement Data (Dec) 2005A 2006A 2007E 2008E 2009E Company Description
(Bt Millions) Amata Corp is a major industrial-estate developer with
Sales 4,344 3,346 3,646 3,998 4,353 two industrial parks in Thailand (in Chonburi and Rayong)
Gross Profit 2,091 1,802 1,882 2,100 2,285 and another in Bien Hoa province, Vietnam. Amata's
Sell General & Admin Expense (575) NA NA NA NA earnings are highly dependent on land sales and
Operating Profit 1,511 1,236 1,269 1,431 1,588 recurring income from the parks (ie, utilities/services
Net Interest & Other Income 2 (126) (146) (138) (109) income). Risks are rising land price, strong price
Associates NA NA NA NA NA competition and a change in the government investment
Pretax Income 1,513 1,110 1,122 1,292 1,479 policy. No ADRs.
Tax (expense) / Benefit (301) (210) (213) (194) (222)
Net Income (Adjusted) 1,058 781 790 954 1,093
Average Fully Diluted Shares Outstanding 1,067 1,067 1,067 1,067 1,067
Chart 1: AMATA – Domestic land sale
Key Cash Flow Statement Data (rai) (%)
Net Income (Reported) 1,058 781 790 954 1,093 1,600 100%
Depreciation & Amortization 82 117 142 163 184 1,400
Change in Working Capital 689 (1,235) 458 280 (245) 1,200 50%
Deferred Taxation Charge NA NA NA NA NA 1,000
Other Adjustments, Net (136) (117) (118) (144) (166)
800 0%
Cash Flow from Operations 1,692 (455) 1,271 1,254 866
Capital Expenditure (1,242) (472) (1,396) (375) (376) 600
(Acquisition) / Disposal of Investments (33) (3) (50) (30) (30) 400 -50%
Other Cash Inflow / (Outflow) 68 13 8 10 11 200
Cash Flow from Investing (1,207) (462) (1,437) (396) (395) - -100%
Shares Issue / (Repurchase) 0 0 0 0 0

2007E
2008E
2003
2004
2005
2006
Cost of Dividends Paid (640) (633) (471) (523) (614)
Cash Flow from Financing (19) 818 334 (808) (471)
Free Cash Flow 450 (926) (125) 878 490
Domestic land sale % YoY
Net Debt 1,766 3,287 3,686 3,063 2,877
Change in Net Debt (190) 1,499 399 (623) (186)
Source: AMATA, Phatra Securities estimates
Key Balance Sheet Data
Property, Plant & Equipment 1,472 1,799 2,106 2,398 2,678
Other Non-Current Assets 2,365 2,397 3,389 3,334 3,271
Trade Receivables 654 632 688 755 822 Stock Data
Cash & Equivalents 702 582 750 800 800 Price to Book Value 4.1x
Other Current Assets 2,624 3,821 3,444 3,182 3,466
Total Assets 7,818 9,231 10,377 10,469 11,037
Long-Term Debt 1,639 2,728 2,828 2,828 3,078
Other Non-Current Liabilities 76 90 94 99 104
Short-Term Debt 830 1,141 1,608 1,035 598
Other Current Liabilities 1,026 965 1,102 1,187 1,293
Total Liabilities 3,570 4,924 5,633 5,149 5,074
Total Equity 4,248 4,307 4,745 5,320 5,964
Total Equity & Liabilities 7,818 9,231 10,377 10,469 11,037
iQmethod SM - Bus Performance*
Return On Capital Employed 19.2% 13.3% 11.7% 13.1% 14.2%
Return On Equity 30.8% 21.1% 20.3% 22.4% 23.2%
Operating Margin 34.8% 36.9% 34.8% 35.8% 36.5%
EBITDA Margin 36.7% 40.4% 38.7% 39.9% 40.7%
iQmethod SM - Quality of Earnings*
Cash Realization Ratio 1.6x -0.6x 1.6x 1.3x 0.8x
Asset Replacement Ratio 15.2x 4.0x 9.9x 2.3x 2.0x
Tax Rate (Reported) 19.9% 18.9% 18.9% 15.0% 15.0%
Net Debt-to-Equity Ratio 41.6% 76.3% 77.7% 57.6% 48.2%
Interest Cover 15.4x 6.1x 5.6x 6.3x 7.7x
Key Metrics
* For full definitions of iQmethod SM measures, see page 19.

2
 Amata Co rp Public Co. Ltd.
2 5 Oc to be r 2 007

Upgrade to BUY
We upgrade our recommendation on AMATA to Buy from Neutral. The share price
has weakened by 27% from its peak and declined 10% since our initiation of
coverage. We think the worst is over for AMATA’s domestic land sales performance
this year, with a clearer political situation and better investor confidence.

Our 12-month price objective is Bt19.8/share, implying total return of 27%

from the current share price. Our change in recommendation is underpinned
by the following:

„ Attractive valuation: We decided to value Vietnam business separately

after its performance has become significant to the company’s earnings. In
addition, given the improvement in investment outlook, we project AMATA’s
2008 earnings growth to be in the double-digits versus the industry’s
negative growth. This makes valuation look attractive.

„ Expectation of investment to return: We expect confidence to rebound

after investors have been in ‘wait-and-see’ mode since 2006 due to the
political uncertainties. We believe the expansion of current facilities is
inevitable. AMATA which is well-known among foreign investors for its
unique location should be able to maintain its market share and outperform
others in terms of land sales.

„ Vietnam should continue to outperform: We expect 20% YoY increase in

land sales in 2008 to 60 hectares. This is mainly supported by 1) strong FDI
growth in the past five years, 2) premium location (30km north of Ho Chi
Minh City) with light competition.

„ Potential upside lies ahead: In addition to improvement in its current

operation, we see further potential upside for AMATA. This includes 1) sales
of ready built factories (RBFs) into the property fund, 2) investment in power
plant project.

Earnings upgrade
We raised our earnings projection on AMATA by 8% for 2008 and 17% for
2009 to reflect our expectation of 1) improvement in industrial estate land
sales from a rebound in investment; 2) strong backlog carried over from 2007;
and 3) anticipation of continuous investment from supply chain of new
investors e.g. Kubota

Table 1: Change in basic assumptions

2008E 2009E
Domestic land sale (rai) Previous 675 592
Revised 894 980
% change 32% 66%
Revenue (Btmn) Previous 3,848 3,961
Revised 3,998 4,353
% change 4% 10%
Net income (Btmn) Previous 880 931
Revised 954 1,093
% change 8% 17%
Source: Phatra Securities estimates

3
 Amata Co rp Public Co. Ltd.
2 5 Oc to be r 2 007

Price objective is Bt19.80/share

We estimate AMATA’s price objective at Bt19.8/share which is based on sum-of-
the-parts valuation. Our new price objective implies 27% potential total return
from the current share price.
Table 2: AMATA - Sum-of-the-parts valuation
Value per share (Bt) Methodology
Equity value of land sale in Thailand 11.15 Target PER of 18x for 2008
Equity value of land sale in Vietnam 3.44 Target PER of 25x for 2008
Value per share for land sale business 14.60
Add: value of non-land sale activity 1.51 DCF valuation
Add: value of land bank at cost 3.72 Est. land bank at end 2008
Total value per share 19.80
Source: Phatra Securities estimates

Vietnam business should be valued separately

Different from peers, we believe sum-of-the-parts valuation is the most
appropriate method to value the Vietnam land sale business after the contribution
has become more significant to the company’s earnings. DCF valuation would
depress the value of Vietnam land sales and does not fully reflect the value of
AMATA’s land bank on hand.

We apply target 2008 PER of 18x for land sale business in Thailand which is a
30% premium to ROJANA (XJIPF, C-1-7, Bt17.8) based on 3-year historical
trading range. Meanwhile, we apply target 2008 PER of 25x based on the current
trading level of Tan Tao Industrial Park Corp., an industrial estate company in
Vietnam. Then we add the value of non-land sale activity (based on DCF
valuation) and value of land bank (at cost) to reflect value of other business and
land bank to AMATA’s valuation.

Attractive valuation
At our target price, AMATA would be trading at 2008E PER of 20x. Although this
valuation is above its peers, we believe this is justified by 1) its superior earnings
growth of 21% in 2008E versus peers at -5%; 2) additional value from Vietnam
business; and 3) AMATA’s highest market cap which makes it a proxy for
industrial estate firms.

Chart 2: AMATA – PE Band (1Yr forward)

40 AMATA
PE Band 1YfW at 4x, 10x, 17x, 23x, 29x
35

30

29x
25
Price (Bt)

20 23x

15 17x

10 10x

5
4x

-
12/02 06/03 12/03 06/04 12/04 06/05 12/05 06/06 12/06 06/07 12/07

Source: Phatra Securities estimates

4
 Amata Co rp Public Co. Ltd.
2 5 Oc to be r 2 007

Table 3: Valuation comp

EPS fully diluted PER (x) EPS growth PE/G (x)
ML Ticker Rating Price (Bt) 2006 2007E 2008E 2009E 2007E 2008E 2007E 2008E 2007E 2008E
AMATA AMCXF C-1-7 15.70 0.73 0.74 0.89 1.02 21.22 17.55 1% 21% 19.03 0.84
ROJANA XJIPF C-1-7 17.80 1.06 1.30 1.40 1.59 13.70 12.68 22% 8% 0.62 1.58
HEMRAJ Not rated Not Rated 1.41 0.15 0.13 0.09 0.12 10.85 15.67 -13% -31% (0.81) (0.51)
TICON TCIPF C-1-7 21.00 1.53 1.57 1.70 1.87 13.37 12.37 3% 8% 4.95 1.54
Source: Bloomberg consensus for HEMRAJ, Phatra Securities estimates for ROJANA, TICON and AMATA

Laggard share price

AMATA’s share price has underperformed its peers by 10% in the past 12 months.
We attribute this to political uncertainties which have eroded the investment
atmosphere. AMATA is particularly sensitive to this since over 80% of its revenue
is derived from land sales.

Chart 3: Price Relative – AMATA, HEMRAJ, ROJANA Chart 4: Price Relative – AMATA vs SET
Relative of AMATA, HEMRAJ, ROJANA, TICON in 2006-2007 20 30%
70% 18
60% 16 20%
50%
14
40%
12 10%
30%
10
20%
8 0%
10%
6
0%
4 -10%
-10%
2
-20%
0 -20%
-30%
Oct-06

Nov-06

Oct-07
Dec-06

Jan-07

Feb-07

Jun-07

Jul-07

Aug-07
Apr-07

May-07
Oct-06

Nov-06

Oct-07
Dec-06

Jan-07

Feb-07

Jun-07

Jul-07

Aug-07
Apr-07

May-07

Sep-07
Mar-07

AMATA (LHS) %Relative to SET Index (RHS)

AMATA HEMRAJ ROJANA
Source: Phatra Securities
Source: Phatra Securities

Domestic land sale – strong improvement

We raise our forecast on AMATA’s 2007 domestic land sale target after its 9M07
domestic land sale performance was stronger than we expected. Also, we raise
2008 land sale target under the anticipation of strong investment from the
automotive sector from the government’s eco-car project. We believe AMATA will
be able to maintain its market share at 30% given its unique location and client
group which is highly concentrated in the auto sector. Another key factor would
be an improvement in investor confidence and rising private consumption index
following relaxing political tension.

Revised 2007 land sale target to 1,100 rai

We have raised our projection on AMATA’s 2007 land sales to 1,100 rai from 650
rai. This is mainly due to 9M07 land sales of 796 rai, up 100% YoY which beats
our previous projection after AMATA sold two big-lot land plots to Aapico Hitech
and Kubota, totalling 300 rai. Although strong land sales achieved this year was
at the expense of lower pricing power on land sales, it was large enough to offset
the negative impact and translate into double-digit earnings growth in 2008.

5
 Amata Co rp Public Co. Ltd.
2 5 Oc to be r 2 007

Chart 5: AMATA – 2007 land sale forecast

(rai) (%)
2,000 150%
100%
1,500
50%
1,000
0%
500 -50%
- -100%
2005 2006 2007E 9M06 9M07

Domestic land sale % YoY

Source: AMATA, Phatra Securities estimates

Relaxing political tension is the key

Improvement in the political outlook was the key reason for AMATA’s
improvement in domestic land sales performance this year after it experienced a
63% decline YoY in domestic land sales to 547 rai in 2006.

The easing of political tension would regain the confidence of investors who have
taken a ‘wait-and-see’ strategy to come back and invest in Thailand again. We
project 3,600 rai of industrial land to be sold in this year, of which 1,000 rai is
deferred land sales from 2006. According to CBRE, 1H07 domestic land sales
was 1,615 rai, (up 19% YoY) and it was 46% of our full-year estimate.

Chart 6: Total domestic land sales

(rai) (%)
5,000 80%
4,000 60%
40%
3,000
20%
2,000
0%
1,000 -20%
- -40%
1999 2000 2001 2002 2003 2004 2005 2006 2007E 1H06 1H07

Total domestic land sale % YoY

Source: CBRE, Phatra Securities estimates

Hefty backlog from big lot sale to 2008

Given two big lots that were sold this year, we believe AMATA should have higher
YoY backlog carried over at the end of 2007. Since AMATA realizes revenue
based on percentage of completion and it would take at least 6-12 months to
develop land plots, AMATA would defer revenue recognition from sales made this
year to 2008 which would be another earnings boost for the company next year.
We project AMATA to have an end-2007 backlog of Bt820mn (+80% YoY) which
is scheduled to be realized in 2008.

6
 Amata Co rp Public Co. Ltd.
2 5 Oc to be r 2 007

Chart 7: AMATA – Estimated backlog from domestic land sale at the end of the year
(Btmn) (%)
1,000 100%
80%
800
60%
600 40%
400 20%
0%
200
-20%
- -40%
2006 2007E 2008E 2009E 2010E

Backlog % YoY

Source: AMATA, Phatra Securities estimates

2008 domestic land sale outlook – AMATA

should continue its run
We expect AMATA to post double-digit earnings growth in 2008. This can be
attributed to (1) AMATA’s 2008 land sales which should remain intact supported
by improvement in the political situation; (2) Investment (including new
manufacturers), led by the auto sector, should come back and AMATA should
regain its leading position due to its unique location; and (3) hefty backlog carried
over from big lot sales in 2007 would be another earnings driver for the company
in 2008.

Total industry - 3,500 rai to be sold in 2008

According to our ‘four-factor-model’, we expect land sales in 2008 to be 3,500 rai
which is higher than our previous estimate of 3,200 rai. This is due to our
expectation of pent-up demand carried over from 2006. Note that we also project
pent-up demand to increase industrial land sales from 2009-2010.

Chart 8: Domestic land sale

(rai)
5,000
4,000

3,000
2,000
1,000
-
2007 2008 2009 2010

Prev ious forecast Add: pent-up demand from 2006

Source: Phatra Securities estimates

AMATA - Another 900 rai to be sold next year

We expect industrial land demand in 2008-2009 would come from auto
manufacturers and their suppliers to support the eco-car program. We do not
expect any big-lot land sales and therefore project AMATA to sell approximately

7
 Amata Co rp Public Co. Ltd.
2 5 Oc to be r 2 007

900 rai and 950 rai respectively. This implies a market share for AMATA of 24%
and 27% in 2008 and 2009.

We believe investment is cyclical. Consequently, after anticipation of strong land

sales in 2008 and 2009 from auto investment, we project AMATA’s land sales to
decline in 2010 to 850 rai with market share lowered to 23%.

Chart 9: AMATA – Domestic land sales

(rai) (%)
2,000 60%
50%
1,500
40%
1,000 30%
20%
500
10%
- 0%
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

AMATA domestic land sale AMATA's market share

Source: AMATA, Phatra Securities estimates

Sub-compact vehicle - the next investment

wave
Following strong FDI in the petrochemical sector, we anticipate strong investment
from the automotive sector which would be a catalyst for industrial land sales in
2008. The BOI has revealed strong investment in the automotive sector over the
past three months which drove 8M07 investment value to Bt67bn, up 37% YoY.
We expect to see continuous applications made by the automotive sector leading
to future investment made by this sector in the next 6 months.

a) The government’s favorite - Eco-car project

The government is trying to promote the eco-car as another product champion
after the success of the pickup truck. Under the eco-car scheme, the government
will apply a 17% excise tax on the eco-car, versus 30% for regular sedans.

Honda making the first move with Bt6.2bn investment plan

Honda is the first auto-maker to announce its participation in the government’s
eco-car project. It plans to invest Bt6.2bn to double its production capacity from
120,000 units to 240,000 units by 2009.

…followed by Toyota and Nissan

Toyota and Nissan has recently made an announcement showing interest to
participate in the eco-car program. However, the investment value has not been
revealed yet.

b) Sub compact car – new model with same ‘benefit’ impact

Besides the eco-car project, auto makers are proposing sub-compact vehicles as
an alternative product. We believe the decision of auto makers to produce sub
compact models instead of the eco-car project is due to the requirement for the
eco-car that auto makers produce 100,000 units by the fifth year. Otherwise, they
will be penalized for not achieving the target.

8
 Amata Co rp Public Co. Ltd.
2 5 Oc to be r 2 007

AAT ready to spend Bt500mn to produce sub compact car

AAT, a JV between Ford and Mazda, recently announced a US$500mn
investment plan to increase their annual production capacity from 175,000 units
to 275,000 units by 2009. This is mainly to produce sub-compact vehicles, i.e. the
Mazda 2. According to the news, these models are not classified as eco-cars.

Table 4: Annual capacity expansion plan Production expansion = more land demand from auto
Current Future Benefit makers…
Honda 120,000 240,000 ROJANA Because the eco-car model requires a smaller platform compared to current
Toyota 550,000 N/A AMATA
Nissan 130,000 20,000 AMATA
models, manufacturers need to set up new facilities to produce this vehicle. This
Mitsubishi 180,000 20,000 HEMRAJ should lead to additional land acquisition in the next two years. Besides, the BOI
GM 110,000 160,000 HEMRAJ requires auto makers to ramp up their eco-car production to 100,000 units by the
AAT 175,000 275,000 HEMRAJ fifth year of production.
Source: Companies, Phatra Securities estimates

For sub-compact cars, we believe AAT and Nissan would expand their facility to
support the rising production plan.

…and auto suppliers

We believe auto manufacturers’ expansion plans would generate additional
demand for industrial land from OEM suppliers. We are certain that higher
demand on OEM parts would definitely trigger suppliers to expand their
production facility to match with higher orders in the future given the current
annual production is insufficient for the future demand.

The BOT’s utilization capacity figures on the auto sector support our hypothesis.
According to the BOT’s database, utilization capacity of the auto sector in 2Q07
was 78% versus the four-year peak at 81%, implying that auto part makers must
expand their production plants soon.

Chart 10: New models expected to be launched Chart 11: Utilization capacity – auto sector
(units (model (x )
500,000 5 85
400,000 4
80
300,000 3
75
200,000 2
100,000 1 70
Rising utilization
- 0 65
2007E 2008E 2009E 2010E 60
1Q03 3Q03 1Q04 3Q04 1Q05 3Q05 1Q06 3Q06 1Q07
Ex pected production of new model (LHS)
Number of new Model (RHS) Auto utilization

Source: Thai Summit, Phatra Securities estimates Source: BOT

AMATA – a contender for auto part makers

We rate AMATA as a strong contender to play a part in expansion of this sector.
Our rationale is underpinned by the following:

1) AMATA’s biggest cluster – automotive: The manufacturing plants of related

companies and supporting industries are frequently located together. We believe
AMATA with the biggest group of auto parts suppliers (32% of total customers)
will draw additional demand to AMATA’s sites.

9
 Amata Co rp Public Co. Ltd.
2 5 Oc to be r 2 007

Chart 12: AMATA – Client breakdown by industry

Others
Chemicals 9%
8%
Auto
Consumers 37%
products
9%

Electronics
13%

Steel
24%
Source: Company

2) Park location – close to Toyota and Nissan: Toyota and Nissan are also
interested in the eco-car program and we see the possibility of strong expansion
from their suppliers. This is due to Amata Nakorn’s unique location near two
Japanese auto-makers. This proximity would make AMATA Nakorn attractive for
suppliers to place their factories in AMATA’s industrial park.

10
 Amata Co rp Public Co. Ltd.
2 5 Oc to be r 2 007

Chart 13: AMATA – Amata’s Industrial park

Source: Company

Pent-up demand will add into 2008 growth

After political uncertainties in 2006, industrial land sales fell by 29% YoY to 2,865
rai. Since Thailand is competitive from its location and low labor costs, investors
have decided to ‘wait and see’ what develops in terms of politics before launching
their investment plans. This is proven by continuous YoY improvement in number
of BOI applications (a leading indicator for industrial estate land sales) in 2006 of
3%, while industrial estate land sales declined 29% YoY.

11
 Amata Co rp Public Co. Ltd.
2 5 Oc to be r 2 007

Chart 14: Industrial land sales vs. number of BOI applications

(rai) Implied pent-up demand (applications)
5,000 1,500
4,000
1,000
3,000

2,000
500
1,000

- -
2000 2001 2002 2003 2004 2005 2006 1H06 1H07

Total industrial estate land sale BOI application

Source: BOI, CBRE

Leading indicators show strong investment in

2008
We anticipate strong improvement in land sales in 2008, which is supported by
improvement in the investment atmosphere after the political situation is resolved.
Our leading indicators - private consumption, utilization capacity and BOI
application, predict 2008 to be another year with strong industrial land demand.

Rebound in private consumption expected

We expect consumer confidence to improve as the political situation grows more
stable. According to the BOT, growth in the private consumption index this year
has been minimal compared to 2000 (post-crisis period). Moreover, with the New
Year’s Eve bombing incident, private consumption in January 2007 worsened to
118.5 versus 122.0 in December 2006.

After a significant decline in private consumption in the wake of the New Year’s
Eve bombing, private consumption has gradually improved MoM. The private
consumption index in August 2007 was 123.2.

Chart 15: Private consumption index

(x )
124.0
122.0
120.0
118.0
116.0
114.0
Oct-05

Oct-06
Jan-05

Apr-05

Jul-05

Jan-06

Apr-06

Jul-06

Jan-07

Apr-07

Jul-07

Priv ate consumption index

Source: BOT

The improvement of private consumption should be a leading indicator for

industrial estate land demand. An improvement in private consumption translates
into increased domestic demand for products which suppliers/ manufacturers
must in turn produce.

12
 Amata Co rp Public Co. Ltd.
2 5 Oc to be r 2 007

We have found a positive correlation of 78% between private consumption and

industrial estate land sales. We are confident the improvement in private
consumption will encourage manufacturers to expand their facilities and acquire
more industrial estate land.

Chart 16: Private consumption vs. Industrial estate land sale

(x ) (rai)
140 5,000
120
4,000
100
80 3,000
60 2,000
40
1,000
20 Correlation 78%
- -
2000 2001 2002 2003 2004 2005 2006

Land sale Priv ate consumption

Source: BOT, CBRE

Utilization is reaching expansion level

With rising private consumption, manufacturers would look for an opportunity to
expand their production capacity to serve rising demand, both domestic and
international. This is illustrated by the BOT’s utilization capacity index which has
rebounded from 73 in 4Q06 to 75 in 2Q07.

We believe manufacturers will expand their facilities when utilization is low, so

that the new factories will be able to run when the current facility is reaching
threshold utilization. Since utilization capacity of the automotive sector was soft in
1H07, it should offer opportunities for them to expand their factories in the next
six months as we have already seen Honda announce their Bt6.2bn-expansion
plan to double production capacity in 2009.

Chart 17: Utilization capacity

(x )
80

75

70

65

60
1Q00 4Q00 3Q01 2Q02 1Q03 4Q03 3Q04 2Q05 1Q06 4Q06

Total utilization (ex . liquor)

Source: BOT

BOI application shows strong investment in 2008

BOI applications, considered a 6-12 month leading indicator for industrial estate
land sales, support our belief of improvement in industrial estate land sales in
2008. According to the BOI, despite a 2% YoY increase in applications in 8M07,
8M07 investment value was Bt419bn, up 53% YoY.

13
 Amata Co rp Public Co. Ltd.
2 5 Oc to be r 2 007

Although the value of BOI applications from the petrochemical sector was the
highest at Bt94bn, we have seen strong investment in Hemaraj Industrial Estate
since the beginning of this year and we expect petrochemical investment to be
soft in 2008.

Chart 18: BOI application breakdown

100%
80% 157 126 226 113
137 130 343 206
381
60%
135 56 72
40% 30 26 103 153 94
31 63 116 83
46 51 67
20% 103 83 79
43 62 61 145
31 57 55 38 52
0%
2000 2001 2002 2003 2004 2005 2006 8M06 8M07

Metal Processing Electronics & Electrical Chemical Plastic Paper Others

Source: BOI, Phatra Securities estimates

Regaining pricing power

We expect AMATA’s pricing power to return after discounts were given to its big-
lot customers this year. After the acquisition of the big players, there should be
additional industrial estate demand from its supply chain which would consider
investing in Thailand. The investment value from supply chain should be smaller
and AMATA would have pricing power over those small-lot customers.

In our projection, the company’s 2007 average selling price per rai for Amata
Nakorn and City would lower to Bt3.0mn and Bt1.7mn. Then we estimate 2008
average selling price to pick up YoY to Bt3.2mn and Bt1.7mn in 2008 for Amata
Nakorn and Amata City respectively.

Chart 19: AMATA – Average selling price per rai

(Btmn/rai) Discount to big-lot customers
4.0

3.0

2.0

1.0

-
2005 2006 2007E 2008E 2009E

Amata Nakorn Amata City

Source: AMATA, Phatra Securities estimates

Vietnam land sale – Still on track

We expect continuous strong land sales performance in Vietnam, given
exponential growth in FDI inflow.

14
 Amata Co rp Public Co. Ltd.
2 5 Oc to be r 2 007

Chart 20: Vietnam FDI

(US$mn) (%)
10,000 150%

8,000
100%
6,000
50%
4,000

2,000 0%

- -50%
2001 2002 2003 2004 2005 2006 9M06 9M07

Vietnam FDI % YoY

Source: CEIC

20% YoY growth in 2008 land sales

We have revised down our projection on AMATA’s 2007 Vietnam land sales from
55 hectares to 50 hectares after the company posted soft Vietnam land sales in
1H07 of 18 hectares (-49% YoY), which can be attributed to the delay in
infrastructure development.

Despite lowering our 2007 forecast on AMATA’s Vietnam land sales from delays
in infrastructure development, we are confident AMATA will be able to post 20%
YoY growth in land sales in 2008 to 60 hectares. Our rationale is supported by 1)
exponential growth of Vietnam FDI growth and 2) AMATA’s superior location (30-
km north from Ho Chi Minh City) with light competition.

Chart 21: AMATA – Vietnam land sale

(hectare) (%)
80 80%
60%
60 40%
20%
40
0%
20 -20%
-40%
- -60%
2002 2003 2004 2005 2006 2007E 2008E 1H06 1H07

Vietnam land sale % YoY

Source: AMATA, Phatra Securities estimates

Non-land sale activity – rising as expected

After the political crisis in 2006, AMATA is well aware that its non-land sales
revenue is relatively low compared to peers. It is looking for opportunities to
increase the non-land sale proportion in order to have a revenue cushion in the
future. This would be another growth opportunity for the company.

Pick-up in ready-built factory demand in Thailand

We expect auto makers to expand their production plant next year shown by the
rise in value of investment of BOI applications made by auto sector in 8M07. In
our opinion, the ready-built factory business should perform well in the next two

15
 Amata Co rp Public Co. Ltd.
2 5 Oc to be r 2 007

years mainly from second- and third- tier auto part suppliers which should expand
their investment to supply auto makers’ demand for producing the eco-car.

Chart 22: BOI application - Value of investment made by auto sector

(Btmn)
60
50
40
30
20
10
0
Jan Feb Mar Apr May Jun Jul Aug

2006 2007

Source: BOI, Phatra Securities estimates

Although TICON (TCIPF, C-1-7, Bt21) should significantly benefit from this
expansion from its diversified locations, AMATA’s RBFs should be able to gain
market share from TICON for RBF demand in Amata Nakorn and Amata City.

In our projection, we expect AMATA’s rental income in Thailand to have 5-year

CAGR growth of 11%.

Chart 23: AMATA – Rental income

(Btmn) (%)
350 25%
300
20%
250
200 15%
150 10%
100
5%
50
- 0%
2006 2007E 2008E 2009E 2010E 2011E

Rental income % YoY

Source: AMATA, Phatra Securities estimates

16
 Amata Co rp Public Co. Ltd.
2 5 Oc to be r 2 007

Chart 24: AMATA’s 2012 revenue breakdown Future project

target Management targets revenue contribution between land sale and non-land sale at
50:50 by 2012. To reach its 2012 target, AMATA must increase the number of
non-land sale projects in both Thailand and Vietnam. However, we do not factor
these projects into our earnings forecast since they are only plans and have not
been finalized. We believe any concrete decision to launch projects would
35%
generate additional upside to the company’s earnings. These potential projects
are as follows:
50%
Thailand’s recurring income – Projects in the pipeline
AMATA also plans to operate three additional business lines that will enhance
revenue contribution. These are expected to be future revenue drivers in the next
five years:
15%
a) Amata Aeropark – AMATA will use the advantage of transportation
Rental Utilities Land sales convenience to Suwannabhumi Airport by launching 100,000 sq.m. of
commercial leased area, together with the logistic center, in Amata
Source: AMATA
Nakorn. The investment is estimated to be roughly around Bt1bn and it
is expected to hold 60% in the Aeropark.

b) Amata Financial Street – Offering commercial leasing for financial

institutions i.e. banks, insurance, leasing companies.

c) Amata logistics park – Offering a center for logistics firms i.e. VIA
Logistic, K Line (Thailand), TTK Logistic.

AMATA Commercial City – New recurring income in Vietnam

AMATA Commercial City is another recurring income source located in Bian Hoa,
Vietnam. It will be located at the front of the park to draw demand from
employees. The 1,250-rai project will be composed of business center rentals and
residential rentals. AMATA revealed that it has already signed an MOU with its
Vietnam strategic partner at the end of May.

The company has not revealed details on this future project, but since the
commercial city will be ready and commercially operated in 2H07 with a residential
area, we expect a small portion of revenue contribution in the next two years.

Amata Express City – Plan to capture demand from new Vietnam airport
AMATA is planning to implement a 200-hectare Amata Express City to be another
rental income source. It is planning to capture demand from the relocation of Ho
Chi Mihn’s airport which is targeted to be completed by 2011. Like Amata
Commercial City, details of rental and rentable space have not been finalized and
we expect more than two years will be required to complete construction and be
ready for operation.

Amata Express City to unlock Vietnam value

AMATA is acquiring a new industrial park in Vietnam, called Amata Express City,
to capture rising in FDI in Vietnam. Being aware of the importance of non-land
sale revenue, it is planning to develop this park mainly for rental purposes.

We believe in order to develop the park for rental purposes, this project would be
capital-intensive. This would trigger AMATA to list its Amata Vietnam on the stock
exchange in Vietnam.

17
 Amata Co rp Public Co. Ltd.
2 5 Oc to be r 2 007

Price objective basis & risk

Our 12-month price objective is Bt19.8/share, which is based on sum-of-the-parts
valuation. We apply target 2008 PER of 18x for land sale business in Thailand
which is at a 30% premium to ROJANA based on 3-year historical trading range.
Meanwhile, we apply target 2008 PER of 25x based on the current trading level of
Tan Tao Industrial Park Corp., an industrial estate company in Vietnam. Then we
add value of non-land sale activity (based on DCF valuation) and value of land bank
(at cost) to reflect value of other business and land bank to AMATA’s valuation.

Risks: 1) continued political turmoil, 2) significant economic slowdown, and 3)

rising land cost and development cost.

Ticon Industrial (TCIPF)

Our price objective is based on DCF valuation. At our price objective of
Bt23.6/share, TICON would trade at a PER of 13.8x on 2008E. Our DCF
valuation incorporates a discount rate of 7.4% and terminal growth rate of 3%
over a 7-year time frame. We believe this is justified by its consistent earnings
growth from rental income and success in selling ready-built factories (RBFs) to
its property fund (TFUND).

Risks:
Investment risks to achieving our share price objective are competition from new
entrants, higher interest rates, a sharp economic slowdown, rising construction
cost and difficulties in selling its RBFs to its property fund (TFUND).

Our 12-month price objective for Rojana is Bt20.29/share, which is based on

sum-of-the-parts valuation. Our sum-of-the-parts valuation is associated with DCF
valuation which incorporates a discount rate of 9.3% and terminal growth rate of
3% over a seven-year timeframe and factors in a 20% stake in TICON. At our
target price of Bt20.29/share, Rojana would be trading at 14x 2008E P/E. We
believe this is justified by its strong earnings growth from consistent power plant
expansion and water supply services. In addition, the valuation is justified by its
EPS growth, which is higher than market EPS growth.

Risks: (1) Unfavorable investment atmosphere, ie, political uncertainties, (2) rising
land cost and interest rate, and (3) future cash call for power plant expansion.

Analyst Certification
I, Sirichai Chalokepunrat, hereby certify that the views expressed in this research
report accurately reflect my personal views about the subject securities and
issuers. I also certify that no part of my compensation was, is, or will be, directly
or indirectly, related to the specific recommendations or view expressed in this
research report.

18
 Amata Co rp Public Co. Ltd.
2 5 Oc to be r 2 007

Special Disclosures
Phatra Securities does and seeks to do business with companies covered in its
research reports. As a result, investors should be aware that the firm may have a
conflict of interest that could affect the objectivity of this report. This report is issued
and distributed outside Thailand solely by Merrill Lynch. Phatra Securities is not
licensed to provide advisory services outside Thailand. Investors should contact
their Merrill Lynch representative if they have questions concerning this report.

iQmethod SM Measures Definitions

Business Performance Numerator Denominator
Return On Capital Employed NOPAT = (EBIT + Interest Income) * (1 - Tax Rate) + Goodwill Total Assets – Current Liabilities + ST Debt + Accumulated Goodwill
Amortization Amortization
Return On Equity Net Income Shareholders’ Equity
Operating Margin Operating Profit Sales
Earnings Growth Expected 5-Year CAGR From Latest Actual N/A
Free Cash Flow Cash Flow From Operations – Total Capex N/A
Quality of Earnings
Cash Realization Ratio Cash Flow From Operations Net Income
Asset Replacement Ratio Capex Depreciation
Tax Rate Tax Charge Pre-Tax Income
Net Debt-To-Equity Ratio Net Debt = Total Debt, Less Cash & Equivalents Total Equity
Interest Cover EBIT Interest Expense
Valuation Toolkit
Price / Earnings Ratio Current Share Price Diluted Earnings Per Share (Basis As Specified)
Price / Book Value Current Share Price Shareholders’ Equity / Current Basic Shares
Dividend Yield Annualised Declared Cash Dividend Current Share Price
Free Cash Flow Yield Cash Flow From Operations – Total Capex Market Cap. = Current Share Price * Current Basic Shares
Enterprise Value / Sales EV = Current Share Price * Current Shares + Minority Equity + Net Debt + Sales
Other LT Liabilities
EV / EBITDA Enterprise Value Basic EBIT + Depreciation + Amortization
iQmethod SMis the set of Merrill Lynch standard measures that serve to maintain global consistency under three broad headings: Business Performance, Quality of Earnings, and validations. The key features of iQmethod are: A consistently
structured, detailed, and transparent methodology. Guidelines to maximize the effectiveness of the comparative valuation process, and to identify some common pitfalls.
iQdatabase ® is our real-time global research database that is sourced directly from our equity analysts’ earnings models and includes forecasted as well as historical data for income statements, balance sheets, and cash flow statements for
companies covered by Merrill Lynch.
iQprofile SM, iQmethod SM are service marks of Merrill Lynch & Co., Inc.iQdatabase ®is a registered service mark of Merrill Lynch & Co., Inc.

19
 Amata Co rp Public Co. Ltd.
2 5 Oc to be r 2 007

Important Disclosures
AMCXF Price Chart
30-Jul
Chalokepunrat
Bt30 31-Jul:N
Bt27
Bt24
Bt21
Bt18
Bt15
Bt12
Bt9
Bt6
Bt3
Bt0
1-Jan-05 1-Jan-06 1-Jan-07
AMCXF
B : Buy, N : Neutral, S : Sell, PO : Price objective, NA : No longer valid
The Investment Opinion System is contained at the end of the report under the heading "Fundamental Equity Opinion Key". Dark Grey shading indicates the security is restricted with the opinion suspended. Light Grey shading indicates the security
is under review with the opinion withdrawn. Chart current as of September 30, 2007 or such later date as indicated.

TCIPF Price Chart

30-Jul 26-Jul
Chalokepunrat PO:Bt24
PO:Bt21
Bt30 31-Jul:B
Bt27
Bt24
Bt21
Bt18
Bt15
Bt12
Bt9
Bt6
Bt3
Bt0
1-Jan-05 1-Jan-06 1-Jan-07
TCIPF
B : Buy, N : Neutral, S : Sell, PO : Price objective, NA : No longer valid
The Investment Opinion System is contained at the end of the report under the heading "Fundamental Equity Opinion Key". Dark Grey shading indicates the security is restricted with the opinion suspended. Light Grey shading indicates the security
is under review with the opinion withdrawn. Chart current as of September 30, 2007 or such later date as indicated.

20
 Amata Co rp Public Co. Ltd.
2 5 Oc to be r 2 007

XJIPF Price Chart

27-May:B
Chalokepunrat
PO:Bt16
10-Jul
Bt21 PO:Bt19
27-Aug
Bt18 PO:Bt20
Bt15

Bt12
Bt9

Bt6

Bt3

Bt0
1-Jan-05 1-Jan-06 1-Jan-07
XJIPF
B : Buy, N : Neutral, S : Sell, PO : Price objective, NA : No longer valid
The Investment Opinion System is contained at the end of the report under the heading "Fundamental Equity Opinion Key". Dark Grey shading indicates the security is restricted with the opinion suspended. Light Grey shading indicates the security
is under review with the opinion withdrawn. Chart current as of September 30, 2007 or such later date as indicated.

Investment Rating Distribution: Real Estate/Property Group (as of 01 Oct 2007)

Coverage Universe Count Percent Inv. Banking Relationships* Count Percent
Buy 48 40.34% Buy 11 25.58%
Neutral 56 47.06% Neutral 8 14.81%
Sell 15 12.61% Sell 2 15.38%
Investment Rating Distribution: Global Group (as of 01 Oct 2007)
Coverage Universe Count Percent Inv. Banking Relationships* Count Percent
Buy 1701 47.03% Buy 437 29.15%
Neutral 1611 44.54% Neutral 425 29.11%
Sell 305 8.43% Sell 58 21.09%
* Companies in respect of which MLPF&S or an affiliate has received compensation for investment banking services within the past 12 months.
FUNDAMENTAL EQUITY OPINION KEY: Opinions include a Volatility Risk Rating, an Investment Rating and an Income Rating. VOLATILITY RISK
RATINGS, indicators of potential price fluctuation, are: A - Low, B - Medium, and C - High. INVESTMENT RATINGS, indicators of expected total return
(price appreciation plus yield) within the 12-month period from the date of the initial rating, are: 1 - Buy (10% or more for Low and Medium Volatility Risk
Securities - 20% or more for High Volatility Risk securities); 2 - Neutral (0-10% for Low and Medium Volatility Risk securities - 0-20% for High Volatility
Risk securities); 3 - Sell (negative return); and 6 - No Rating. INCOME RATINGS, indicators of potential cash dividends, are: 7 - same/higher (dividend
considered to be secure); 8 - same/lower (dividend not considered to be secure); and 9 - pays no cash dividend.

OPINION KEY: Opinions include a Volatility Risk Rating, an Investment Rating and an Income Rating. VOLATILITY RISK RATINGS,
indicators of potential price fluctuation, are: A - Low, B - Medium, and C - High. INVESTMENT RATINGS, indicators of expected total return
(price appreciation plus yield) within the 12-month period from the date of the initial rating, are: 1 - Buy (10% or more for Low and Medium
Volatility Risk Securities - 20% or more for High Volatility Risk securities); 2 - Neutral (0-10% for Low and Medium Volatility Risk securities - 0-
20% for High Volatility Risk securities); 3 - Sell (negative return); and 6 - No Rating. INCOME RATINGS, indicators of potential cash dividends,
are: 7 - same/higher (dividend considered to be secure); 8 - same/lower (dividend not considered to be secure); and 9 - pays no cash dividend.
Copyright 2006 Merrill Lynch, Pierce, Fenner & Smith Incorporated (MLPF&S). All rights reserved. Any unauthorized use or disclosure is
prohibited. This report has been prepared and issued by Phatra Securities Company Limited (“Phatra”) under the Research Co-Operation
Agreement with Merrill Lynch. The information herein was obtained from various sources; we do not guarantee its accuracy or completeness.
Neither the information nor any opinion expressed constitutes an offer, or an invitation to make an offer, to buy or sell any securities or any
options, futures or other derivatives related to such securities ("related investments"). Officers of Phatra or one of its affiliates may have a
financial interest in securities of the issuer(s) or in related investments.
This research report is prepared for general circulation and is circulated for general information only. It does not have regard to the specific
investment objectives, financial situation and the particular needs of any specific person who may receive this report. Investors should seek
financial advice regarding the appropriateness of investing in any securities or investment strategies discussed or recommended in this report
and should understand that statements regarding future prospects may not be realized. Investors should note that income from such securities,
if any, may fluctuate and that each security's price or value may rise or fall. Accordingly, investors may receive back less than originally
invested. Past performance is not necessarily a guide to future performance.
Foreign currency rates of exchange may adversely affect the value, price or income of any security or related investment mentioned in this
report. In addition, investors in securities such as ADRs, whose values are influenced by the currency of the underlying security, effectively
assume currency risk.

21