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Retail Research

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Singapore

10 January 2012

CIMB Trader AM

Jonathan Ng +(65) 6210-8650 - jonathan.ng@cimb.com

What’s Relevant

Corporate News

CSE Global’s business diversification, quality management and strong focus on ROE and FCFF have shone through. We find it opportune to take some profits. Downgrade to Neutral (from Outperform) on the back of its recent outperformance. No changes to our earnings estimates though we raise our TP to S$0.88, now based on 7x CY13P/E, one SD below its 5-year mean to reflect its resilience (previously 6x, average during the last crisis). Keppel Corp has secured US$150m contract from Diamond Offshore to build and upgrade a moored semi-sub rig. The job will be performed on a cold stack rig hull of Diamond's Ocean Voyager (built in 1973, last upgraded in 1995). The delivery of the rig is expected in 3Q2013. We keep our NEUTRAL recommendation with S$8.90 TP. Share price could remain ranged bound in anticipation of more Petrobras newsflows. Ezra AMC has been awarded two contracts from Statoil for mooring chain and riser replacements in the North Sea. The combined contract is approx NOK425 (US$70m) or NOK600m (US$100m) if options are exercised. Engineering work will start immediately with the offshore operations to be performed in 3Q2012. Any negative surprises could send share price down to previous trough of 0.5x P/BV. We keep our Underperform call with S$0.93 TP. KSH Holdings has secured a S$110m condominium contract, raising its construction business order book to above S$467m. The 30-month contract was awarded by a JV between Far East Organization and Frasers Centrepoint.

Markets

US stocks squeezed out small gains Monday, adding to the previous week's robust rally, as investors turned their focus to fourth-quarter earnings season. The Dow tacked on 32.77 points, or 0.27%, to close at 12,392.69 In Europe, Sarkozy and Merkel said they want EU states to complete their negotiations on a planned new treaty in the coming days so it could be signed on March 1. Asian shares were mixed with Chinese and Hong Kong stocks surged on hopes Beijing will soon relax its monetary policies, but many other markets in the region slipped on euro-zone concerns; the Shanghai Composite Index jumped 2.9% after Premier Wen Jiabao’s pledge at the weekend that the government will boost stock market confidence and "perfect market systems" over the next five years. Hang Seng was climbed 1.5%. Singapore - After sinking to a low of 2,683 in early trading for a 32-point drop, the benchmark STI attempted to claw back some of its losses, boosted by a strong positive swing of 570 points in Hong Kong. But a second bout of late selling saw the index end the day at 2,691 for a 24.31 points loss. Australian shares already opened higher this morning, tracking a modest rise on Wall Street. But concerns over Europe's funding woes kept a lid on gains. There need to be positive news to restore confidence and spur investor interest back in stocks, in our opinion. Otherwise, a directional market would instill thin volume again in the market today.

Selected Statistics
Selected Statistics

Indices

Level

% chg

Ytd % chg

Straits Times Index

2,691.28

-0.9%

+2%

FSTC ST China Index

227.93

-0.6%

+3%

Dow Jones

12,392.69

+0.3%

+1%

S&P 500 Index

1,280.70

+0.2%

+2%

CSI 300 Index

2,368.57

+3.4%

+1%

Hang Seng Index

18,865.72

+1.5%

+2%

Crude Oil (US$/barrel)

101.34

+0.0%

+3%

Gold Spot (US$/oz)

1,609.33

-0.1%

+3%

Baltic Dry Index

1,308.00

-2.9%

-25%

CPO (US$/MT)

1,075.00

+0.5%

+3%

Top volume

Last price

% chg

Vol (m)

Scintronix Corp Ltd

SGD 0.023

-4.2%

142.6

Singx press Land Ltd

SGD

0.011

+10.0%

84.9

Noble Group Ltd

SGD 1.090

-3.5%

82.9

Golden Agri-Resources Ltd

SGD 0.730

-0.7%

77.3

Genting Singapore Plc

SGD 1.530

-2.2%

42.9

Gmg Global Ltd

SGD 0.119

-0.8%

41.3

Top gainers

Last price

% chg

Vol (m)

Centillion Env & Recy cling

SGD 0.003

+50.0%

13.21

China Titanium Ltd

SGD 0.004

+33.3%

0.40

Carriernet Global Ltd

SGD 0.006

+20.0%

11.29

Mfs Technology Ltd

SGD 0.083

+16.9%

0.05

Changtian Plastic & Chemi

SGD 0.080

+15.9%

0.01

Action Asia Ltd

SGD 0.160

+14.3%

0.10

Top losers

Last price

% chg

Vol (m)

Lifebrandz Ltd

SGD 0.004

-50.0%

0.00

Ultro Technologies Ltd

SGD 0.011

-42.1%

0.00

Vashion Group Ltd

SGD 0.005

-28.6%

0.00

China Auto Electronics Grp

SGD 0.050

-28.6%

0.38

Friv en & Co Ltd

SGD 0.018

-28.0%

0.16

Compact Metal Industries L

SGD 0.003

-25.0%

0.01

Trades for the Day

Fundamentally:

China Merchant Holdings (Pacific) (CMH SP; S$0.64; BUY) - Initiate with BUY, TP S$0.98 based on sector CY12 average P/BV of 1.1x. Trading below book, CMH is an attractive dividend yield stock driven by toll collection. Improved trading liquidity would reap better valuation as the liquidity premium dissipates.

STI Chart & Summary

Retail Research | Singapore 10 January 2012 CIMB Trader AM Jonathan Ng +(65) 6210-8650 - jonathan.ng@cimb.com

The STI ended marginally below its 30-day SMA yesterday. However, the uptrend channel from its mid- December low is still holding nicely. Going forward, the candles will need to push back above its 30-day and 50-day SMAs, now at 2,692 and 2,733 respectively, to keep the bullish momentum going. Otherwise, we expect the current sideways consolidation trend to prolong. If the 2,733 level is taken out, the benchmark would then charge towards the 2,800 level. Prices need to climb above this level to confirm that the downtrend has reversed. On the downside, support is at 2,646 and

2,606.

Please read carefully the important disclosures at the end of this publication.

China Merchant H’ldgs (Pacific) Ltd

Where will this road lead you?

CMH SP

CIMB Research Pte Ltd +(65)-6225-1228

SINGAPORE

INITIATION REPORT

 

10 January 2012

Recommendation:

BUY

Price / Tgt. Price:

SS$0.64/ S$0.98

Mkt. Cap:

S$459.4m

Board / Sector:

Main / Infrastructure

Stable dividend play. Given the nature of its toll road assets, China Merchants Holdings (Pacific) Limited (CMHP) has been generating good cash flow and has been a generous dividend paymaster for the past few years. Historical dividend yields ranged from 7.0% in FY09 to 6.3% in FY10. Going forward, with the Yongtaiwen acquisition and a management that does not believe in hoarding cash unnecessarily, we believe dividend yields could exceed 9.0% over FY12-FY13 at the current share price.

Yongtaiwen is just the beginning. We believe that Yongtaiwen is just a beginning. Management is likely to be looking at more acquisitions to grow its profit base and thus raise dividend level. To achieve this objective, management should consider raising funds via new share placement. Given its tight liquidity, a new share issue will serve three purposes; 1) improve liquidity; 2) make the Company investable to more funds and 3) raise cash fro debt repayment or further acquisitions. Any new share placement should also be at more than book value and there is no need for CMHP to rush into any fund raising.

Will corporate actions improve valuations? Given that the shares are trading below book, there will inevitably be suggestions of dual listing or a delisting from the SGX and re-list on another market where the Company could be valued higher. While these possibilities remain, we sense that management is focusing on growing the business and raising its profile to the investment community in Singapore.

Initiate with BUY and target price S$0.98, based on 1.1x CY12 P/BV. Revenue and net profit will post double digit growth in FY11 due to the consolidation of its 51% stake in Yongtaiwen. We expect at least a 50% payout ratio over FY11-FY13, leading to more than 9.0% dividend yields for FY12-FY13

Financial summary

FYE Dec

2009

2010

2011F

2012F

2013F

Revenue (S$ m)

38.2

21.6

129.7

220.3

233.0

Reported net profit (S$ m)

36.5

45.9

70.1

85.5

89.0

Fully diluted reported EPS (S cts)

4.3

5.4

8.2

10.0

10.4

Reported EPS growth

(37.2)

25.6

52.7

22.0

4.1

FD P/E (x)

15.0

11.9

7.8

6.4

6.1

DPS (S cts)

4.5

4.0

4.9

5.9

6.2

Dividend Yield

7.0

6.3

7.6

9.3

9.7

EV/EBITDA (x)

12.6

9.2

3.2

2.0

1.9

P/CF (x)

14.9

11.9

5.9

4.2

4.1

Net Gearing (%)

net cash

net cash

63.0

51.8

36.1

P/BV (x)

0.8

0.8

0.8

0.7

0.7

ROE

5.3

7.0

9.7

11.2

11.0

Source: Company, CIMB estimates

Market capitalisation & share price info

Market cap

S$459.4m

Share price perf. (%)

1M

3M

12-mth price range

S$0.46/S$0.75

Relative

7.0

10.4

3-mth avg daily volume

S$0.03m

Absolute

6.7

12.3

# of shares (m)

717.8

Major shareholders

Est. free float (%)

17

China Merchants

Wrts/ICULS o/s (m)

None

Mackenzie Financials

Conv. price (S$)

None

Source: Bloomberg, Company

Background

CMHP took its present form as a toll road player when it acquired five toll roads in China from parent China Merchants Group in 2004. The company was previously listed on the Mainboard of the Singapore Exchange since 1981 under various names; the more recent names being; China Everbright Pacific Limited and its current name, China Merchants Holdings (Pacific) Limited. China Merchant Holdings (Pacific) Limited currently operates four toll roads, spanning 412 kilometres in, the Guangxi Zhuang Autonomous Region, Guizhou province and Zhejiang province in the People’s Republic of China (PRC). The Group is also involved in the property development business in New Zealand, under its subsidiaries China Merchants Pacific (NZ) and Universal Homes Limited.

Figure 1: Corporate Structure

Background CMHP took its present form as a toll road player when it acquired five toll

Source: Company

Figure 2: Profit before Tax (HK$ m)

 

2010

2009

Toll Road Operations

258.78

381.34

Property Development & Others

-19.05

-10.13

Non-reccuring items

41.31

-168.01

281.05

203.21

Source: Company

Segments

CMHP derives the majority of its profits through the operation of its toll roads in the PRC. The Group has entered joint-venture agreements with various Sino-entities for control and operation of toll roads. These agreements allow the Group to receive a pre-agreed portion of the toll receipts for a period of twenty five to thirty years from the dates of commencement, after which the rights to these ventures will revert wholly back, without compensation, to the partners. The Group’s toll road joint-venture assets are located on major transportation routes in the GuangxiZhuang, and Guilin. As of July 2011, China Merchant Holdings (Pacific) has bought a 51% interest Yongtaiwen Expressway, from parent China Merchant Group, expanding its footprint to Fujian to Zhejiang province.

The Group’s property development arm in New Zealand; China Merchants Pacific (NZ) and its operating subsidiary, Universal homes Limited, is a residential developer which builds houses in the Greater Auckland region. These homes are pitched at the middle class as a target group.

The property development business is a legacy business. Given the Group’s focus on its toll road business, we do not expect CMHP to grow its property development business. Management has indicated that the Group will look to dispose this business when conditions are more favourable.

Toll Roads

Figure 3: Yongtaiwen Expressway

1200 10 Rev enue (RMB m) Traffic Volume (m) -RHS 1000 8 800 6 600 4
1200
10
Rev enue (RMB m)
Traffic Volume (m) -RHS
1000
8
800
6
600
4
400
2
200
0
0
2006
2007
2008
2009
2010
Cumul.3Q11

Source: Company

Yongtaiwen Expressway is a 138 kilometres expressway stretch, comprising of a East section (63.3 kilometers) and West section (74.9 kilometers), connecting Wenzhou, Taizhou and Fujian Province. The joint venture ends in September 2030, and the Group’s share of profits is 51%.

Figure 4: Guiliu Expressway

500 5 Rev enue (RMB m) Traffic Volume (m) -RHS 400 4 300 3 200 2
500
5
Rev enue (RMB m)
Traffic Volume (m) -RHS
400
4
300
3
200
2
100
1
0
0
2006
2007
2008
2009
2010
Cumul.3Q11

Source: Company

Guiliu Expressway is a dual direction expressway spanning 139 kilometres in the Guangxi Region, totaling four lanes, running from Guilin to Liuzhou. This Group’s share of operating profit till the end of the joint venture, ending in December 2024, is 40%. The share ratio was 90% previously, until the end of 2009.

Figure 5: Guihuang Highway

250 25 Rev enue (RMB m ) Traffic Volume (m ) -RHS 200 20 150 15
250
25
Rev enue (RMB m )
Traffic Volume (m ) -RHS
200
20
150
15
100
10
50
5
0
0
2006
2007
2008
2009
2010
Cumul.3Q11

Source: Company

Guihuang Highway is a 39 kilometres dual direction expressway, running from Guiyang to Qingzhen, located in Guizhou, The operating concession runs till 15 April 2027.The profit share ratio is currently 100% until end December 2014, after which the Group’s share will decline to 60% till the end of the agreement.

Figure 6: Yuyao Highway 140 20 Rev enue (RMB m) Traffic Volume (m) -RHS 120 15
Figure 6: Yuyao Highway
140
20
Rev enue (RMB m)
Traffic Volume (m) -RHS
120
15
100
80
10
60
40
5
20
0
0
2006
2007
2008
2009
2010
Cumul.3Q11

Source: Company

Yuyao highway is a 96 kilometres dual direction expressway stretch, comprising of 3 highways, connecting Hangzhou city Cixi, Shangyu and Ningbo, in Zhejiang Province, The joint venture agreement expires on 12 March 2024.The Group’s share of profit is currently 50% till the end of 2015, before stepping up to 60% till the end of the joint venture agreement.

Competitors

There are 21 listed expressway/toll-road companies operating in China. Notable competitors are Jiangsu Expressway, Zhejiang Expresway, Anhui Expressway, China Communications Construction, Shenzhen Expressway and Henan Zhongyuan Expressway. Unlike competitors whom concentrate in a specific region, China Merchant Holdings (Pacific) has the benefit of a diversified portfolio of assets with roads along the developed coastal-east spanning Fujian to Zhejiang (Yongtaiwen), but also in the lesser developed, rapidly growing regions of Guangxi and Guizhou. The Group also boasts the backing of parent company, state-owned China Merchants Group, a large diversified conglomerate whom has synergistic interests in toll roads, transportation and logistics amongst their business holdings.

Industry outlook

Driven by economic growth. China continues its drive to connect the vast country, building roads and railways. The government’s road building is not only in response to growing demand for roads, but also to stimulate growth and provide the necessary infrastructure for growth to occur; this is more apparent in the less developed regions in central and western China, in line with the governments policy to spur development in the lesser developed Chinese hinterland, connecting the far ends of the Chinese republic; Kunming in the south, Sichuan, Tibet and Xinjiang in the west. Infrastructure projects have benefitted from the largesse of the RMB 4t stimulus package in 2008–2009; with RMB1.5t going to public infrastructure projects; including the development and construction of roads, railways, air transportation. The length of highways currently stands at 4b kilometres, growing at a 3-year CAGR of 3%.

Too much of a good thing? China’s massive road building endeavour is not without cost. Much of the funding for construction comes from banks loans to provincial governments, covered by the subsequent tolls levied. In order to recoup the construction costs, there has to be a ‘critical mass’ of traffic utilizing the roads to generate sufficient revenue. Aggressive construction of roads have left provincial governments burdened by debt, as they have been hit by the tightening of liquidity, and higher interest rates, due to tougher economic conditions, while the roads, when fully constructed may not fully utilized, resulting in revenue shortfall. The silver lining for CMHP is that cash-strapped provincial governments might be more flexible when it comes to negotiations on the sale of toll roads.

Vehicle numbers and freight are rising. Toll concessions are the primary means of financing the building of roads on such a large scale. Revenue from toll roads is dependant on the frequency of road use; this is in turn dependent on China’s growth. China’s GDP has been consistently growing above 8% annually, the number of motor vehicles have grown at a 3-year CAGR of 21% from 43m (2007) to 78m (2010). Demand for passenger cars is positively co-related with the wealth of Chinese citizens; as a means of transport, and as a status symbol.

Disposable income and consumption per capita has grown above 8% consistently. In absolute terms, disposable income currently stands at RMB 7,000 per capita in the more developed coastal regions and RMB 4,500 per capita in the inland regions, while consumption per capita is at RMB 4,200 and RMB3,100 respectively. We expect car ownership to continue to post positive growth as the Chinese population grows more affluent

Road use by commercial vehicles, primarily for the transportation of goods, continues to grow. The total freight carried has grown at a 3- year CAGR of 12%, with total tonnage year to date, till Oct 2011, stands at 28.7 bn tons. Based on the figures from the Ministry of Transport, we find that in the increase in freight numbers are mostly attributed to transportation by road, with transportation by rail accounting for only 10% of total tonnage hauled, though growing on average by 3% for the last 3 years.

Figure 7: GDP and Vehicle growth

17 100 GDP y oy (%) Number of motor v ehicles (m) -RHS 15 80 13
17
100
GDP y oy (%)
Number of motor v ehicles (m) -RHS
15
80
13
60
11
40
9
20
7
5
0
1Q06
1Q07
1Q08
1Q09
1Q10
1Q11

Source: CEIC

Figure 8: Length of Highways and Railways

Freight Transported

Cargo Carried: Railway (m Tons) Freight Carried (m Tons) 4.1 Length of Highways (bn km) Length
Cargo Carried: Railway (m Tons)
Freight Carried (m Tons)
4.1
Length of Highways (bn km)
Length of Railways ('000 km)- RHS
95
3500
Freight Carried: Highways(m Tons)
4.0
3000
3.9
90
2500
3.8
2000
3.7
85
3.6
1500
3.5
80
1000
3.4
500
3.3
75
0
3.2
3.1
70
2006
2007
2008
2009
2010
Jan/2006
Jan/2007
Jan/2008
Jan/2009
Jan/2010
Jan/2011

Source: CEIC

Figure 9: Disposable Income per capita (Rmb)

Disposable Income per capita (%yoy)

7,500

7,000

Coastal

6,500

Inland

6,000

5,500

5,000

4,500

 

4,000

 

3,500

 

3,000

 

2,500

 
18 16 Coastal Inland 14 12 10 8 6
18
16
Coastal
Inland
14
12
10
8
6
1Q07 3Q07 1Q08 3Q08 1Q09 3Q09 1Q10 3Q10 1Q11 1Q08 3Q08 1Q09 3Q09 1Q10 3Q10 1Q11
1Q07
3Q07
1Q08
3Q08
1Q09
3Q09
1Q10
3Q10
1Q11
1Q08
3Q08
1Q09
3Q09
1Q10
3Q10
1Q11
Source: CEIC, CIMB Research
Figure 10: Consumption per capita (Rmb)
Consumption per capita (%yoy)
4,500
24
Coastal
20
Inland
4,000
Coastal
Inland
16
3,500
12
3,000
8
4
2,500
0
2,000
-4
1,500
-8
1,000
-12
1Q02
1Q03
1Q04
1Q05
1Q06
1Q07
1Q08
1Q09
1Q10
1Q11
1Q04
1Q05
1Q06
1Q07
1Q08
1Q09
1Q10
1Q11

Source: CEIC, CIMB Research

Company outlook

One down, possibly more to come? CMHP completed its acquisition of a 51% equity stake in Yongtaiwen Expressway, from parent China Merchant Group, for RMB2.23bn; HK$1.4bn from external bank borrowings and the balance coming from internal cash reserves. Prior to the acquisition of Yongtaiwen, CMHP was in a net cash position. Post-acquisition, the gearing ratio is 40%, but is offset by the strong earnings potential of Yongtaiwen. According to Mr Jiang, the CEO, he feels it is safe for CMHP to increase its gearing to 60% and is currently negotiating for five to six projects, with potentially one or two more acquisitions the following year. Benefits from a prized asset. The acquisition of Yongtaiwen Expressway, with FY2010 revenue of RMB 1,112m and profit of RMB 430m, will significantly add to CMHP’s bottom line and cash flow from 2H 2011 onwards. This was exemplified in the Group’s 3QFY11 results where the Group posted a 141%yoy jump in net profits on the back of a 778%yoy increase in revenue, due the inaugural inclusion of Yongtaiwen’s figures. Distinguished parentage helps. CMHP can leverage on parent CMG assets and expertise to acquire assets from CMG itself or from third parties. CMG has investments in 25 toll roads, bridges and tunnels, spanning 4,537 kilometres in 18 provinces, and has stakes in 12 listed toll road companies. The acquisition of the 51% stake in Yongtaiwen, from CMG was done at a relatively fair valuation of 1.02x NAV. This deal was also facilitated by CMG, as CMG did an asset swop for the majority stake in Yongtaiwen, before divesting it to CMHP. We expect CMHP to continue to benefit from the support of a strong parent for future negotiations and acquisitions. Property development could turn. The property development business in New Zealand has been challenging for the Group. Following the aftermath of the Economic crisis in 2009, prices for homes have almost reached 2007 highs, as inventory days and mortgage rates decline. Nevertheless, contributions from the property development segment to the Group’s bottom line, remains relatively minor.

Figure 11: Residential Sales and Median prices (Auckland)

Mortgage interest rates and Median days of inventory (NZ)

No. of Sales - LHS Median Sale Price ('000) - RHS 8 60 3,000 490 7
No. of Sales - LHS
Median Sale Price ('000) - RHS
8
60
3,000
490
7
480
50
2,500
470
6
460
40
2,000
5
450
1,500
440
4
30
430
1,000
3
Floating rate (%)
2 year fixed rate (%)
Median Days -RHS
420
20
410
2
500
400
10
1
0
390
0
0
Jan 2009
M
a r 2009
M
ay 2009
Ju l 2 0 0 9
Sep 2009
Nov 2009
Jan 2010
M
a r 2010
M
ay 2010
Ju l 2 0 1 0
Sep 2010
Nov 2010
Jan 2011
M
a r 2011
M
ay 2011
Ju l 2 0 1 1
Sep 2011
Jan-09
M
ar-09
M
ay-09
Ju l-0 9
S ep-09
N ov-09
Jan-10
M
ar-10
M
ay-10
Ju l-1 0
S ep-10
N ov-10
Jan-11
M
ar-11
M
ay-11
Ju l-1 1
S ep-11

Source: Real Estate Institute of New Zealand

Source: Reserve bank of New Zealand

Figure 12: SWOT analysis

Strengths

Opportunities

Strong backing from parent China Merchants Group Driven by growth in China Diversified road portfolio Lower gearing compared to peers

New acquisitions Increasing urbanization and vehicle ownership

Weaknesses

Threats

Loss-making legacy business Relatively small, compared to peers

Slowdown in Chinese growth Foreign exchange risks Overcapacity and duplication of expressways. Rise of alternative transportation modes and routes Toll rates are dictated by provincial governments

Source: CIMB Research

Risks

Slowdown in Chinese growth. China is seeing a moderation of growth as the country develops. Externally, a global slowdown will have negative spill-over effects, dampening global demand, affecting Chinese exports and consequently, impacting Chinese growth. The impact is mitigated somewhat, as China can rely on burgeoning domestic demand. A decrease in economic growth, is likely to impact the toll road business, due to a decrease in the growth of passenger cars (due to reduced consumer incomes), and freight transportation (due to lower demand for goods).

Rise of alternative transportation modes and routes. The Chinese government has also been developing the railroad network to complement its road-building initiatives, in its drive to improve the transportation infrastructure. The total length of the rail network is around 91,000 kilometres; according to the Chinese Ministry of Railways. The country-wide network operates in all provinces, linking all provincial capital cities in Mainland China. China has also been focusing on the ‘glamour’ segment; high speed rail, in recent years. High-speed rail track length is approximately 8,500 kilometres as of end-2010, the target for end-2011 is 13,000 kilometres. A growing train network could pose stiff competition for roads, especially if the area or route was previously accessible by road only. At this juncture, however, we feel that a rise in train transportation does not yet pose a big threat to roads, as the market for transportation sector in China is still growing strongly and transportation by train has its own disadvantages vis-à-vis by roads.

No changes to toll rate for the moment. There is currently no national oversight on toll rates, with provincial governments given almost complete autonomy. The majority of the “Class–A” roads are subject to tolls, though rates, however, are not standardized, nor integrated with the wider road infrastructure network, resulting in road users incurring high cumulative tolls. High toll rates increase the logistical costs to Chinese companies and possibly to their end customers, as approximately 80 percent of freight is done by road. Thus, there has been public outcry over what some view as excessively high toll rates, as tolls continue to be levied long after the initial investment of constructing the roads has been recouped. The toll road industry is under increasing scrutiny from the Ministry of Transport, which may lead to regulation on a national level and would likely result in a lowering tariff rates, affecting the Group’s bottom line. At the moment, no decisions have been taken and consulting continues.

Financials

Yongtaiwen, game changer. The Yongtaiwen acquisition was a game changer as the Group took a 51% stake leading to a significant jump in revenue and profit going forward.

Figure 13: Revenue (S$ mil) growth trend

 

Figure 14: Net profit (S$ mil) and net margin trend

 
 

234.6

 

250.0

221.8 501.5 129.7 38.2 71.1 21.6 (2.3) 5.8 (43.5)
221.8
501.5
129.7
38.2
71.1
21.6
(2.3)
5.8
(43.5)

600.0

500.0

100.0

89.6 52.7 86.1 70.1 25.6 22.8 45.9 4.1 36.5 (37.2)
89.6
52.7
86.1
70.1
25.6
22.8
45.9
4.1
36.5
(37.2)

60.0

200.0

90.0

50.0

400.0

80.0

40.0

150.0

300.0

70.0

30.0

60.0

20.0

100.0

200.0

50.0

10.0

0.0

50.0

100.0

0.0

40.0

30.0

(10.0)

(20.0)

20.0

(30.0)

0.0

(100.0)

10.0

(40.0)

2009

2010

2011F

2012F

2013F

0.0

(50.0)

 

2009

2010

2011F

2012F

2013F

Source: Company, CIMB Research

Dividend payout to continue. Management has been paying out more than 50% of profits as dividends in the past few years. Management does not believe in hoarding cash and will continue to pay out dividends unless the cash accumulated is large enough for the purchase of additional toll road assets. We believe a 50% payout target could continue to be pursued over our forecast period of FY11-FY13.

79 67 55 50 50 50 Figure 15: Payout ratio (%) trend 2011F 2012F 2013F 2010
79
67
55
50
50
50
Figure 15: Payout ratio (%) trend
2011F
2012F
2013F
2010
2009
2008
90
80
60
40
20
50
70
30
10
0
9.3 9.7 7.8 7.0 7.6 6.3 Figure 16: Attractive dividend yields 2011F 2012F 2013F 2010 2009
9.3
9.7
7.8
7.0
7.6
6.3
Figure 16: Attractive dividend yields
2011F
2012F
2013F
2010
2009
2008
12.0
10.0
0.0
8.0
6.0
4.0
2.0

Source: Company, CIMB Research

Valuation and recommendation

We initiate coverage on CMHP with a BUY recommendation and target price of S$0.98. This is derived based on 1.1x CY12 P/BV, in line with the toll road sector average P/BV of 1.1x.

With the Yongtaiwen acquisition, CMHP has turned from a net cash Company into a geared Company. We believe CMHP will be interested in placing new shares at above book value to increase liquidity and therefore make it easier for funds to invest into the Company. A secondary objective would be using the proceeds to reduce its gearing. Separately, on the possibility of a dual listing, delisting and re-listing in Hong Kong, we believe these alternatives may have landed on the CEO’s table. However, based on our interaction with the management, we sense that the priority remains on getting more interest in the Company and growing the Company. Any corporate actions regarding de-listing/dual listings are likely to be considered only at a later stage or if the market continues to ignore the Company.

Figure 17: Peer comparisons

 

Target

Core

3-yr EPS

P/BV

ROE

Div

 

Bloomberg

Price

price

Mkt cap

P/E (x)

CAGR

(x)

(%)

yield (%)

ticker

Recom.

(Local)

(Local)

(US$ m)

CY2012

CY2013

(%)

CY2012

CY2012

CY2012

Anhui Expressway Co

995 HK

NR

4.28

NA

1,026.1

6.0

5.8

7.7

0.8

14.5

7.2

Hopewell Highway Infrastructur

737 HK

NR

3.89

NA

1,483.4

12.3

11.7

1.5

1.3

10.8

8.1

Jiangsu Expressway Co Ltd

177 HK

NR

6.97

NA

4,520.5

10.1

9.7

5.5

1.6

15.7

7.0

Road King Infrastructure Ltd

1098 HK

NR

4.38

NA

418.4

3.2

2.9

21.3

na

9.1

12.3

Sichuan Expressway Co Ltd

107 HK

NR

3.05

NA

1,505.0

5.8

6.1

2.9

0.7

13.5

5.4

Yue Da Mining Holdings Ltd

629 HK

NR

0.60

NA

53.1

2.9

2.5

51.9

na

na

na

Yuexiu Transport Infrastructur

1052 HK

NR

3.38

NA

728.2

6.9

6.2

11.4

0.5

7.8

8.3

Zhejiang Expressway Co Ltd

576 HK

NR

5.13

NA

2,868.8

9.5

9.7

0.0

1.2

12.2

7.6

Beijing Capital Co Ltd

600008 CH

NR

4.96

NA

1,733.8

17.5

16.0

12.2

2.1

12.4

5.4

Chongqing Road & Bridge Co

600106 CH

NR

7.12

NA

511.4

21.6

20.3

5.9

na

na

na

Dongguan Development Holdings

000828 CH

NR

4.35

NA

715.6

8.1

6.9

23.0

na

na

na

Fujian Expressway Development

600033 CH

NR

2.38

NA

1,033.6

9.3

9.5

9.1

na

na

3.8

Guangdong Provincial Expresswa

200429 CH

NR

2.30

NA

561.8

6.7

na

na

na

na

na

Guangxi Wuzhou Communications

600368 CH

NR

5.15

NA

453.0

6.2

5.7

33.8

0.9

14.3

na

Hainan Expressway Co Ltd

000886 CH

NR

3.03

NA

474.1

9.8

8.4

44.6

na

na

na

Hubei Chutian Expressway Co Lt

600035 CH

NR

3.24

NA

477.7

6.6

5.4

11.7

na

na

na

Jiangxi Ganyue Expressway Co L

600269 CH

NR

3.79

NA

1,400.7

7.1

6.5

2.8

0.8

10.6

2.4

Shandong Expressway Co Ltd

600350 CH

NR

3.35

NA

2,550.6

6.5

7.0

8.6

na

10.8

5.4

Shenzhen Expressway Co Ltd

600548 CH

NR

3.92

NA

1,198.1

8.7

8.0

12.8

0.9

9.4

5.1

Xiandai Investment Co Ltd

000900 CH

NR

11.95

NA

754.9

6.7

na

na

na

na

na

Simple average

8.6

8.2

14.8

1.1

11.8

6.5

Source: Bloomberg, Company, CIMB Research

Board of Directors

Mr Dong Xue Bo

Chairman

Mr Dong was appointed Chairman of the Board in February 2009. He is the Assistant to the President of China Merchants Group Limited, Executive Vice Chairman and Chief Executive Officer of Huajian Transportation Economic Development Center, a wholly-owned subsidiary of China Merchants Group Limited. Mr Dong has extensive experience in China’s national expressway network planning and management. He successively served as Deputy Section Director, Section Director, Deputy Director and Director in the Strategic Planning Department of the Ministry of Transportation in the PRC before taking up his current appointment in the China Merchants Group. He was also previously a vice-mayor of Luoyang City in Henan Province. In the last few years, he was actively involved in China’s development of a long-term framework for its highways and waterways transportation system. Mr Dong graduated from Liaoning University in the PRC with a Bachelor’s Degree in Economics and holds an MBA from China Europe International Business School. He is currently the Vice Chairman of China Highway Society, Chairman of the Operation and Management Sub-society of the China Highway Society, Deputy President of the National Defence Transportation Society, standing member of China Young Entrepreneur Society as well as an adjunct professor at Nankai University and Dalian Maritime University.

Mr Zheng Hai Jun

Vice Chairman

Mr Zheng was appointed Vice Chairman of the Board In February 2011. Mr Zheng joined the China Merchants Group in 1998 and is currently the General Manager of Huajian Transportation Economic Development Center, a wholly-owned subsidiary of China Merchants Group Limited. Mr Zheng has been actively involved in transportation management in the PRC since the 1990s. He brings with him an extensive knowledge and skills in infrastructure management having held senior project and corporate management roles in several of China’s infrastructure projects including expressways and ports. Mr Zheng is the Chairman of Huabei Expressway Co., Ltd, a company listed on Shenzhen Stock Exchange. He is also the Vice Chairmen of two other companies listed on Shanghai Stock Exchange. Mr Zheng holds a Master’s Degree in Investment Management from the Graduate School of China Academy of Social Science and an MBA from the University of South Australia International Graduate School of Management. He is a senior economist and a standing member of China Highway Society

Mr Jiang Yan Fei

Vice Chairman & Chief Executive Officer

Mr Jiang was appointed Director and Chief Executive officer of the Company in December 2004 and further assumed the position of Vice Chairman in February 2011. He also assumed the concurrent position of Executive Deputy General Manager of Huajian Transportation Economic Development Centre. Mr Jiang joined China Merchants Holdings (International) Company Limited (“CMHI”) in 2001 as a Deputy General Manager, whose main area of responsibility was the toll road business. Prior to joining CMHI, he was the Deputy General Manager of China Merchants Shekou Holdings Co. Ltd. He has extensive experience in the development of toll roads and transportation systems including investment management, technology and communications in the PRC and was a senior manager of the Shandong Provincial Transport Development and Investment Company. Mr Jiang is a telecommunication engineer and a senior economist and a standing member of the Operation and Management Sub-society of the China Highway Society. He holds an MBA from Murdoch University, Australia, and graduated from Chongqing Communication College in the PRC.

Board of Directors

Mr Wu Xin Hua

Executive Director & Chief Operating Officer

Mr Wu joined the Company as an Executive Director and Chief Operating Officer in February 2011. He is concurrently a Deputy General Manager of Huajian Transportation Economic Development Center where he is responsible for developing Huajian’s business through new acquisitions and overseeing the integration of Huajian’s various businesses. Mr Wu has extensive experience in corporate finance, specialising in asset restructuring and equity and debt financing. He has held senior management positions at financial institutions including CITIC Securities Co., Ltd, Shandong Securities Co., Ltd and China Merchants Securities Co., Ltd with responsibilities in the areas of general management and investment banking. Prior to joining Huajian, Mr Wu was the General Manager of the Investment Banking Department of China Merchants Securities Co., Ltd. Mr Wu graduated from Renmin University of China with a Bachelor’s Degree in Economics. He is currently the Vice Chairman of the Operation and Management Sub-society of the China Highway Society

Dr Lim Heng Kow

Independent Director

Dr Lim was appointed to the Board in July 1996. Dr Lim has more than 30 years experience in the hotel, property development and retail industries as well as consultancy businesses. He has served as managing/executive directors and/or senior consultants to many listed and non-listed companies in Singapore, Malaysia and China over the past 30 years. In the early part of his career, he was an academic, having lectured in the universities of Malaysia and Singapore, and then worked briefly as a journalist. Dr Lim holds a PhD from the University of London, a Master’s Degree in Arts from University of Ibadan (formerly London University, Ibadan College), Nigeria and a Bachelor’s Degree in Arts from the Nanyang University of Singapore.

Dr Hong Hai

Independent Director

Dr Hong joined the Board in May 2005. He is a Professorial Fellow at the Nanyang Technological University. Prior to joining the academia, he was President and CEO of Haw Par Corporation Limited, a leading public listed group in Singapore, from 1990 to 2003. He was also previously a Member of Parliament. Dr Hong serves as an honorary council member of the Singapore Chinese Chamber of Commerce & Industry and a council member of the Nanyang Academy of Fine Arts. Dr Hong obtained a Bachelor of Electrical Engineering Degree from the University of Canterbury, New Zealand. He also holds a Master’s Degree in Public Administration from Harvard University, a PhD in Economics from Carnegie Melon University, USA and a Master’s Degree in Chinese Language and Literature from Beijing Normal University.

Retail Research

|

Singapore

10 January 2012

Insider Transactions

Updated: 31/12/2011

Shareholding

Stock

Transacted

Substantial

Buy/Sell/

No of Shs

Price Per

% Before

% After

Date

Shareholder/Director

Conv

('000)

Share $

Change

Change

Buy

Li Heng Chem Fibre Tech

29-Dec-11

Pan Zhungzhi

*

Buy

95,200

0.12

-

5.60

CMZ Hldgs Ltd

29-Dec-11

Value Harmony Ltd

Buy

1,516

n.a.

9.8

10.35

CMZ Hldgs Ltd

29-Dec-11

Shao Kesheng

*

Buy

1,516

0.19

74.8

75.33

Sim Lian Grp Ltd

28-Dec-11

Lim Ah Kie

Buy

8,702

n.a.

10.0

10.13

Oxley Hldgs Ltd

23-Dec-11

Ching Chiat Kwong

Buy

312

0.34

41.6

41.60

Qingmei Grp Hldgs

22-Dec-11

High Crown Ltd

Buy

35,016

n.a.

60.4

62.02

Pacific Shipping Trust

22-Dec-11

SPIH

*

Buy

6,190

n.a.

88.1

89.14

Pacific Shipping Trust

22-Dec-11

YCCS

*

Buy

6,190

n.a.

88.1

89.14

Pacific Shipping Trust

22-Dec-11

Y C Chang

*

Buy

6,190

n.a.

88.1

89.14

Pacific Shipping Trust

22-Dec-11

PIL

Buy

6,190

n.a.

88.1

89.14

Swing Media Tech Grp

21-Dec-11

Hui Yan Moon

Buy

1,000

n.a.

2.4

2.64

Swing Media Tech Grp

21-Dec-11

Ip Ming Yan

*

Buy

1,000

n.a.

26.6

26.91

Tai Sin Electric Ltd

21-Dec-11

Lim Boon Chin Benjamin

Buy

1,693

n.a.

6.8

6.96

Tai Sin Electric Ltd

21-Dec-11

Chan Kum Lin

Buy

472

n.a.

1.9

1.94

Tai Sin Electric Ltd

21-Dec-11

Lim Chai Lai

Buy

900

n.a.

3.6

3.70

Tai Sin Electric Ltd

21-Dec-11

Pang Yoke Chun

*

Buy

2,569

n.a.

10.3

10.56

Tai Sin Electric Ltd

21-Dec-11

Lim Boon Hock B

Buy

2,569

0.16

10.3

10.56

Tai Sin Electric Ltd

21-Dec-11

Goh Soo Luan

Buy

1,319

n.a.

5.3

5.42

Tai Sin Electric Ltd

21-Dec-11

Lim Chye Huat

Buy

1,878

0.16

7.5

7.72

Source: The Business Times ST: Shares transfer, IP: Investment purposes, PL: Placement, ST: Shares transfer, IP: Investment purposes, PL: Placement, B/R: Bonus/ Rights, OE: Options Exercise, SA: Share Allotment, *: Deemed Interests

Please read carefully the important disclosures at the end of this publication.

Retail Research

|

Singapore

10 January 2012

Insider Transactions

Updated: 31/12/2011

Shareholding

Stock

Transacted

Substantial

Buy/Sell/

No of Shs

Price Per

% Before

% After

Date

Shareholder/Director

Conv

('000)

Share $

Change

Change

Sell

PSL Hldgs Ltd

29-Dec-11

Tan Ong Huat

*

Sell

60,000

n.a.

19.4

-

Li Heng Chem Fibre Tech

29-Dec-11

Dee William

*

Sell

95,200

n.a.

5.6

-

Van Der Horst Energy

28-Dec-11

Kwan Chee Seng

Sell

116,000

0.21

29.5

4.45

Eucon Hldg Ltd

27-Dec-11

Chen Ming Hsing

Sell

33,723

n.a.

5.9

-

Sarin Tech Ltd

27-Dec-11

Interhightech (1982) Ltd

*

Sell

600

n.a.

17.0

16.76

Sarin Tech Ltd

27-Dec-11

Daniel Benjamin Glinert

*

Sell

500

0.81

17.4

17.21

Asia-Pacific Strategic

27-Dec-11

The Nassim Fund

*

Sell

2,726

n.a.

6.9

2.30

Ascendas India Trust

23-Dec-11

The Cap Grp Co Inc

*

Sell

8,131

n.a.

5.8

4.79

Others

S Chance Prop Ltd

29-Dec-11

Mohamed Hasan Marican

B/R

524

0.32

1.0

1.04

S Chance Prop Ltd

29-Dec-11

Mohamed Salleh

B/R

26,170

n.a.

49.3

50.21

Karin Tech Hldgs

28-Dec-11

Lee Yiu Chung

OE

500

0.13

1.5

1.67

Sim Lian Grp Ltd

28-Dec-11

Kuik Ah Han

SA

814

0.47

0.9

0.95

Healthway Med Corp

27-Dec-11

Jong Hee Sen

ST

12,000

n.a.

0.8

0.19

Metal Comp Engg

27-Dec-11

Tan Soo Yong

*

ST

2,550

n.a.

0.4

1.82

Scintronix Corp Ltd

23-Dec-11

Long Lian Leng J

B/R

2,000

0.03

0.7

0.98

Scintronix Corp Ltd

23-Dec-11

Tan Kee Liang

B/R

326,825

0.03

13.8

59.62

GMG Global Ltd

22-Dec-11

Joseph Gondobintoro

*

B/R

232,208

n.a.

18.3

12.18

GMG Global Ltd

22-Dec-11

Mieke Bintati G

B/R

4,604

n.a.

0.1

0.12

GMG Global Ltd

22-Dec-11

Yudson Gondobintoro

B/R

6,604

n.a.

0.2

0.2

GMG Global Ltd

22-Dec-11

Jeffrey Gondobintoro

B/R

1,000

n.a.

0.2

0.1

GMG Global Ltd

22-Dec-11

GMG Hldg (HK) Ltd

B/R

220,000

n.a.

14.6

10.2

GMG Global Ltd

22-Dec-11

Tau Puan Siong

B/R

2,000

n.a.

0.1

0.1

GMG Global Ltd

22-Dec-11

Ong Kian Min

B/R

2,000

n.a.

0.1

0.1

China New Town Devt

22-Dec-11

Yang Yonggang

OE

1,275

n.a.

0.1

0.1

China New Town Devt

22-Dec-11

Yue Wai Leung Stan

OE

1,482

n.a.

0.1

0.1

China New Town Devt

22-Dec-11

Li Yao Min

OE

1,481

n.a.

0.1

0.1

China New Town Devt

22-Dec-11

Mao Yiping

OE

619

n.a.

0.0

0.0

China New Town Devt

22-Dec-11

Gu Biya

OE

750

n.a.

0.0

0.1

Qingmei Grp Hldgs

22-Dec-11

Su Qingyuan

SA

1,155

n.a.

0.9

1.1

Source: The Business Times ST: Shares transfer, IP: Investment purposes, PL: Placement, ST: Shares transfer, IP: Investment purposes, PL: Placement, B/R: Bonus/ Rights, OE: Options Exercise, SA: Share Allotment, *: Deemed Interest

Please read carefully the important disclosures at the end of this publication.

evt4

Retail Research

Singapore

10 January 2012

Important Dates

January 2012

SUN

MON

TUE

WED

THU

FRI

SAT

  • 1 2

 

3

4

5

6

7

4Q11 Advance GDP Estimate*

Dec11 Electronics Sector Index

Dec11 Purchasing Managers Index

  • 8 9

 

10

11

12

13

14

Dec11 Foreign Reserves

Result: SPH

Nov11 Retail Sales Index

15

16

17

18

19

20

21

Result: M1, SGX

Dec11 Trade Performance

Result: Cache, CMT, Keppel

Result: Keppel Land

Result: K-REIT

T&T

22

23

24

25

26

27

28

Dec11 Consumer Price Index

Dec11 Industrial Production

4Q11Real Estate Info

Result: KepCorp, Mapletree Industrial

Dec11 Producer & Int’l Trade Price

29

30

31

     

31

Dec11 Money & Banking Dec11 Public Finance Data 4Q11 Unemployment Rate 41Q11 Business Expectations

Source: Company, Bloomberg, SGX

* Not later than

February 2012

SUN

MON

TUE

WED

THU

FRI

SAT

     

1

2

3

4

Result: StarHub

5

6

7

8

9

10

11

Jan12 Foreign Reserves

Result: DBS Group

  • 12 13

 
  • 14 15

 

16

17

18

Dec11 Retail Sales Index

Jan12 Trade Performance

  • 19 20

 
  • 21 22

 

23

24

25

4Q11 Wholesale Trade Index

Jan12 Consumer Price Index

4Q11 GDP Final*

Result: SembCorp Marine

4Q11 Balance of Payments*

4Q11 Wages Data* Jan12 Industrial Production

Result: VMS

  • 26 27

4Q11 Business Receipt Index

  • 28 29

Jan12 Public Finance Data

     

Result: SembCorp Industries

Jan12 Producer & Int’l Trade Price

Source: Company, Bloomberg, SGX

* Not later than

Please read carefully the important disclosures at the end of this publication.

Retail Research

|

Singapore

10 January 2012

Corporate Actions

 

Date Paid/

Company Name

Particulars

Expiry Date

Record Date

Payable

POPULAR HOLDINGS LIMITED

DIVIDEND:SGD 0.005 ONE-TIER TAX

10-Jan-12

12-Jan-12

31-Jan-12

HISAKA HOLDINGS LTD.

DIVIDEND:SGD 0.005 ONE-TIER TAX

11-Jan-12

13-Jan-12

27-Jan-12

WBL CORPORATION LIMITED

DIVIDEND:SGD 0.05 ONE-TIER TAX

17-Jan-12

19-Jan-12

13-Feb-12

A SIA PACIFIC BREWERIES LTD

DIVIDEND:SGD 0.155 ONE-TIER TAX

25-Jan-12

27-Jan-12

13-Feb-12

A SIA PACIFIC BREWERIES LTD

DIVIDEND:SGD 0.63 ONE-TIER TAX

25-Jan-12

27-Jan-12

13-Feb-12

ETIKA INTERNATIONAL HLDGS LTD

DIVIDEND:SGD 0.007 ONE-TIER TAX

27-Jan-12

31-Jan-12

20-Feb-12

BEYONICSTECHNOLOGY LIMITED

ENTITL.:SCHEME SGD 0.26

27-Jan-12

31-Jan-12

12-Feb-12

GOODLAND GROUP LIMITED

DIVIDEND:SGD 0.01 TAX EXEMPT

30-Jan-12

1-Feb-12

10-Feb-12

FRASER AND NEAVE, LIMITED

DIVIDEND:SGD 0.12 ONE-TIER TAX

31-Jan-12

2-Feb-12

17-Feb-12

PNE INDUSTRIES LTD

DIVIDEND:SGD 0.003 ONE-TIER TAX

1-Feb-12

3-Feb-12

28-Feb-12

THAI VILLAGE HOLDINGS LTD

DIVIDEND:SGD 0.008 ONE-TIER TAX

3-Feb-12

7-Feb-12

22-Feb-12

NY01100F 160901

INTEREST:0.0375

21-Feb-12

23-Feb-12

1-Mar-12

NY03100A 180901

INTEREST:0.04

21-Feb-12

23-Feb-12

1-Mar-12

NY05100N 200901

INTEREST:0.0325

21-Feb-12

23-Feb-12

1-Mar-12

NY07100X 220901

INTEREST:0.03125

21-Feb-12

23-Feb-12

1-Mar-12

NY09100H 240901

INTEREST:0.03

21-Feb-12

23-Feb-12

1-Mar-12

NZ07100S 270301

INTEREST:0.035

21-Feb-12

23-Feb-12

1-Mar-12

NZ10100F 300901

INTEREST:0.02875

21-Feb-12

23-Feb-12

1-Mar-12

EASTGATE TECHNOLOGY LTD

DIVIDEND:SGD 0.001 ONE-TIER TAX

23-Feb-12

27-Feb-12

15-Mar-12

COSMOSTEEL HOLDINGS LIMITED

DIVIDEND:SG D 0.01 TAX EXEMPT

27-Feb-12

29-Feb-12

14-Mar-12

N507100A 120401

INTEREST:0.02625

22-Mar-12

26-Mar-12

2-Apr-12

N507101E 121001

INTEREST:0.025

22-Mar-12

26-Mar-12

2-Apr-12

N508100V 130401

INTEREST:0.01625

22-Mar-12

26-Mar-12

2-Apr-12

N509100N 141001

INTEREST:0.01375

22-Mar-12

26-Mar-12

2-Apr-12

N511100W 160401

INTEREST:0.01125

22-Mar-12

26-Mar-12

2-Apr-12

N710100Z 170401

INTEREST:0.02375

22-Mar-12

26-Mar-12

2-Apr-12

NX09100W 190601

INTEREST:0.025

23-May-12

25-May-12

1-Jun-12

NX11100X 210601

INTEREST:0.0225

23-May-12

25-May-12

1-Jun-12

N708100S 150701

INTEREST:0.02875

21-Jun-12

25-Jun-12

2-Jul-12

NX02100S 120701

INTEREST:0.035

21-Jun-12

25-Jun-12

2-Jul-12

NX03100Z 130701

INTEREST:0.0225

21-Jun-12

25-Jun-12

2-Jul-12

NX04100F 140701

INTEREST:0.03625

21-Jun-12

25-Jun-12

2-Jul-12

NY01100F 160901

INTEREST:0.0375

23-Aug-12

27-Aug-12

3-Sep-12

NY03100A 180901

INTEREST:0.04

23-Aug-12

27-Aug-12

3-Sep-12

NY05100N 200901

INTEREST:0.0325

23-Aug-12

27-Aug-12

3-Sep-12

NY07100X 220901

INTEREST:0.03125

23-Aug-12

27-Aug-12

3-Sep-12

NY09100H 240901

INTEREST:0.03

23-Aug-12

27-Aug-12

3-Sep-12

NZ07100S 270301

INTEREST:0.035

23-Aug-12

27-Aug-12

3-Sep-12

NZ10100F 300901

INTEREST:0.02875

23-Aug-12

27-Aug-12

3-Sep-12

N507101E 121001

INTEREST:0.025

20-Sep-12

24-Sep-12

1-Oct-12

N508100V 130401

INTEREST:0.01625

20-Sep-12

24-Sep-12

1-Oct-12

N509100N 141001

INTEREST:0.01375

20-Sep-12

24-Sep-12

1-Oct-12

N511100W 160401

INTEREST:0.01125

20-Sep-12

24-Sep-12

1-Oct-12

N710100Z 170401

INTEREST:0.02375

20-Sep-12

24-Sep-12

1-Oct-12

NX09100W 190601

INTEREST:0.025

22-Nov-12

26-Nov-12

3-Dec-12

NX11100X 210601

INTEREST:0.0225

22-Nov-12

26-Nov-12

3-Dec-12

Source: SGX - Corporate Actions By Ex-Date

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  • (a) - Keppel Corporation

(ii)

As of 10 January 2012, the analyst, Jonathan Ng, who prepared this report, has / have an interest in the securities (which may include but not limited to shares, warrants, call warrants and/or any other derivatives) in the following company or companies covered or recommended in this report:

(a) -

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RETAIL RESEARCH RECOMMENDATION FRAMEWORK

STOCK RECOMMENDATIONS

BUY: The stock's total return is expected to be +15% or better over the next three months.

HOLD: The stock's total return is expected to range between +15% and -15% over the next three months.

SELL: The stock's total return is expected to be -15% or worse over the next three months.

CIMB Research Pte Ltd (Co. Reg. No. 198701620M)

SECTOR RECOMMENDATIONS

OVERWEIGHT: The industry, as defined by the analyst's coverage universe, has a high number of stocks that are expected to have total returns of +15% or better over the next three months.

NEUTRAL: The industry, as defined by the analyst's coverage universe, has either (i) an equal number of stocks that are expected to have total returns of +15% (or better) or -15% (or worse), or (ii) stocks that are predominantly expected to have total returns that will range from +15% to -15%; both over the next three months.

UNDERWEIGHT: The industry, as defined by the analyst's coverage universe, has a high number of stocks that are expected to have total returns of -15% or worse over the next three months.