DSG International (Thailand) – DSGT Compelling growth stock Bloomberg │ Reuters DSGT TB │DSGT.BK

Thailand Equities Research 11 September 2012 DSG International

Report type: Initial Coverage

Rating

Company Overview

2.00

- Previous Rating

-

Target Price (Bt)

15.50

- Previous Target Price (Bt)

DSGT is a producer and distributor of disposable baby and adult diapers. • DSGT delivered 1HCY12 net profit of Bt386mn, which surpassed the total amount in CY11. • We project CY12 revenue at Bt6,683mn, up 16% y-y, potentially resulting in net profit of Bt615mn, up 204% yy, which is expected to increase further to Bt619mn in CY13. • We rate DSGT shares an ‘ACCUMULATE’ stance with a CY13 target price of Bt15.50/share (pre-stock dividend) and Bt10.30/share (post-stock dividend), based on P/E of 15x.

Accumulate Not Rated

-

Closing Price (Bt)

15.10

Expected Capital Gains (%)

2.6%

Expected Dividend Yield (%)

2.7%

Expected Total Return (%)

5.4%

Raw Beta (Past 2yrs w eekly data)

0.90

Market Cap. (USD mn)

291

Enterprise Value (USD mn)

333

Market Cap. (Bt mn)

9,060

Enterprise Value (Bt mn)

10,391

3M Average Daily T/O (mn)

2.3

52 w eek range

6.4 - 15.6

Closing Price in 52 w eek range 0%

16.00

50%

100%

10

14.00

8

12.00

What is the news?

6

10.00 4

8.00 6.00

2

4.00

0 Sep-12

Aug-12

We rate DSGT shares an ‘ACCUMULATE’ with a CY13 target price of Bt15.50/share (pre-stock dividend) and Bt10.30/share (post-stock dividend), based on P/E of 15x.

DSGT TB EQUITY

Jul-12

Key Financial Summary FYE

Jun-12

Investment Actions?

May-12

Major Shareholders

Apr-12

Given DSGT’s high earnings growth performance in the past, we are optimistic about its ongoing growth in foreseeable future. Even though shares of DSGT rose considerably to have reflected its bright future outlook and offered capped upside, the stock will post XD sign on Sep 25, which would help propel the share prices.

Mar-12

Volume, mn

How do we view this?

Feb-12

Jan-12

Dec-11

Nov-11

Oct-11

Sep-11

Indonesia market is expected to become a key earnings growth driver in the long run as population is as high as 260mn, which is far higher than a combined population in Thailand, Malaysia and Singapore. Note that we don’t think Indonesia will contribute hefty revenue in 2-3 years ahead.

SETI rebased

(%)

1. DSG INTERNATIONAL LIMITED

65.7%

2. SOMERS (U.K.) LIMITED

9.6%

3. Miss. Suw anna Anuw ongnukror

3.4%

CG Report - 2011 N/R

12/12F

12/13F

Revenue (Btmn)

4,367

5,741

6,683

7,484

Net Profit (Btmn)

358

202

615

619

0.62

0.34

1.02

1.03

EPS (Bt) Net Profit, adj. (Btmn)

12/10

12/11

326

357

527

619

EPS, adj. (Bt)

1.11

0.60

0.88

1.03

P/E (X),adj.

13.6

25.4

17.2

14.6

BVPS (Bt)

4.96

2.64

3.48

3.88

P/B (X) DPS (Bt) Div. Yield (%)

3.0

5.7

4.3

3.9

0.43

0.24

0.41

0.41

2.8

1.6

2.7

2.7

Source: Bloomberg, PSR est. *All multiples & yields based on current market price Valuation Method P/E'13 (15x)

Analyst Sasikorn Charoensuwan Capital Market Investment Analyst #9744 Tel. 662-2-635-1700 Ext. 480 Rakpatai Narongsak Assistant Analyst Tel. 662-2-635-1700 Ext. 497

Ref. No.: CO2555_0742

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DSG International (Thailand) – DSGT Thailand Equities Research 11 September 2012

Business background DSGT is a producer and distributor of disposable diaper for baby and adult. The parent company of DSGT is DSG International Limited (“DSGIL”). DSGT has four subsidiaries 1) Disposable Soft Goods (Malaysia) SDN BHD (“DSGML”), 2) DSG (Malaysia) SDN BHD (“DSGMSB”), 3) PT DSG Surya Mas Indonesia (“PTDSG”), and 4) Disposable Soft Goods (S) Pte Limited (“DSGS”), which locate in Malaysia, Singapore and Indonesia. At end-CY11, DSGT had a total of 355 staff.

Figure 2: Products offered in local and overseas markets

Figure 1: Corporate structure

Corporate strategy The corporate vision aims to become the leading diaper producer in South-East Asia. Goal • Ranking in the top two in the industry, in term of market share, in all competitive markets • Driving growth to outperform the industry • Aiming at sustainable growth by pursuing both shortand long-term strategies. Strategy • Brand strengthening: DSGT has set aside numerous outlays for marketing purposes in an effort to create brand awareness, which had been proved successfully. In 2011, Malaysia-based subsidiary got advertising and marketing communication awards, namely KANCIL and EFFIE, representing strong marketing potential. On top of that, Thailand and Malaysia achieved in top two ranks in the industry. • Effectiveness increase: DSGT implemented supply chain management system which aimed to reduce production cost to the lowest level. Further, the company has conducted consistently R&D to develop quality of products. Product innovative and raw material procurement has been centralized by the parent company DSGIL, which increased economies of scale and scope, giving the group companies to enjoy cost advantages.

Source: Annual report Product segment 1. Baby diaper 1.1. Tape diaper: DSGT produces several type of products to aim at wide target groups. ‘BabyLove Easy Tape’ is for mass market and ‘BabyLove Night’ for premium one with higher absorption, allowing baby to sleep longer without interrupted wake-up from wetness. 1.2. Pant diaper: Based on similar marketing strategy, DSGT offers products for both mass and premium markets BabyLove Play Pant and BabyLove Night, respectively. 2. Adult diaper: DSGT is the market leader of adult diaper under the brand of ‘Certainty’ which comprises of Certainty for mass market and Certainty Active for premium one.

Key success factor • Products matched well with customers’ requirements • Right marketing strategy • Easy access to products Nature of diaper market

Malaysia-based DSGMSB produces its own brand, namely Fitti basic (mass market) and Pet Pet (mid-range), which has largely served domestic market.

Seasonal factor: Diaper is considered as fast moving consumer goods (FMCG) where climate is affecting market demand. Demand appears to rise significantly during the rainy and winter seasons as frequency of urination is associated with body temperature lower body temperature leads to more frequencies of urination. Product pricing: Price ranges for each type of diapers comprise of several factors product features and benefits, brand loyalty, and rival’s price ranges. 2 of 12

DSG International (Thailand) – DSGT Thailand Equities Research 11 September 2012

Cost of raw material: Key materials used in disposable diaper are wood pulp, non-woven moisture transfer/blockage sheets, glues and super absorbent polymer (SAP). Cost of raw materials is fluctuating, in line with commodities, but the company can’t immediately pass on rising cost to consumers whereas the market demand is sensitive to price increase.

Key factors impacting diaper demand involve in population, age range, birthrate, per capita income and urbanization Figure 3: Key markets’ demography (Millions)

300 250

Marketing communication: Each local market has unique characteristic where individual marketing communication become an important tool to increase brand recognition and to understand consumer’s requirements. Marketing strategy for FMCG is typically involving in a launch of new product and promotion campaign to boost sales, and advertisement to increase brand recognition. Moreover, marketing communication will convince the target groups to believe in quality of products and have more understanding about benefits of diaper, especially hygiene, which eventually will help promote sales.

65 years and over 15-64 years

22.8

200 150

176.0

0-14 years

100 50

6.2 47.6

2.7 20.7 5.8

13.4

-

Thailand

0.5 3.8 1.1

49.4

Malaysia

Indonesia

Singapore

Source: World Fact Book (CIA)

Figure 4: Per capita income (USD), 2009 - 2011 $70,000

$60,500 $58,700 $52,200

$60,000 $50,000

Market structure Diaper market is oligopoly, dominated by (i) Unicharm producer of baby diaper under the brand of “Mamy Poko” and adult diaper “LiFree”; (ii) SCA a manufacturer of baby diaper “Drypers” in Asia; (iii) Kimberly-Clark a baby diaper “Huggies”; and (iv) Procter & Gamble “Pampers”. All of these rivals are key players which have strong influence relative to product pricing and trade promotional activities, as well as technology innovation. Based on marketing positioning-wise, the company succeeded in capturing market shares in the mass market.

$40,000 $30,000 $20,000 $10,000

$15,800 $15,300 $9,500 $9,500 $14,400 $8,900

2009 2010 2011 $4,700 $4,500 $4,300

$Thailand

Malaysia

Indonesia

Singapore

Source: World Fact Book (CIA)

Figure 5: Crude birthrate vs population growth rate

Target destination DSGT aims its target destination at Southeast Asia market where it has total population of 652mn and a birthrate is climbing. Growing economy and urbanization will be a catalyst to sustainable growth to diaper market. Key markets for DSGT include Thailand, Malaysia, Singapore, and Indonesia. DSGT’s subsidiaries also exports diaper products to regional markets, such as Singapore, Vietnam, Philippines, Brunei, India, Pakistan and countries in the Middle East.

25

3%

20

2%

15

2%

10

1%

5

1%

Birth rate(births/1,000)

0%

0 Thailand

Malaysia

Indonesia

Singapore

Source: World Fact Book (CIA)

Figure 6: Urbanization and rate of urbanization 100%

3.0%

80%

2.5% 2.0%

60%

1.5% 40%

Urbanization rate of urbanization

1.0%

20%

0.5%

0%

0.0% Thailand

Source: World Fact Book (CIA)

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Population growth rate

Malaysia Indonesia Singapore

DSG International (Thailand) – DSGT Thailand Equities Research 11 September 2012

Figure 7: Porter’s five forces analysis illustrates competition stance in the industry

Rising market growth and promising growth outlook bounded to lead to fiercer competition relative to price, quality of product and marketing campaign and motivating new players into the industry, translating to more brands and intensifying price Competitiveness

Threat of New Entry HIGH

Baby diaper outlook The baby diaper market has been enjoying the bullish growth momentum. Birthrate, particularly in Thailand, Malaysia and Indonesia, increased considerably. This, together with higher purchasing power and urbanization, has helped drive market growth in foreseeable future.

Bargaining Power of Suppliers Medium

Rivaly Among Existing Competitors HIGH

High population in Southeast Asia (652mn people) and elevated birthrate are also positive factors to help support sustainable growth in the future.

Threat of Substitutes LOW

Adult diaper situation Population is considered as growth indicator for adult diaper market. Thailand and Singapore have the largest proportion of senior citizenship (age more than 65 years), while Malaysia and Indonesia are expected to increase over time where the growth rate has been gradually increasing. On top of population, longer life expectancy and higher purchasing power are supportive factors to long-term growth in adult diaper market. •

•

•

•

•

Bargaining Power of Customers LOW

Source: PSR Revenue structure • Thailand was the key contributor to revenue growth, followed by Malaysia, as the company ranked in the top two market leaders. Singapore generated small amount of revenue which was normal, considering its low population. Contrarily, Indonesia has the highest population among other markets but revenue was still low as the company is now conducting marketing research in penetrating Indonesia market. • Based on product type, baby diaper generated the largest revenue. In Thailand, pant baby diaper appeared to match well with the market’s requirements, but tape diaper gained good feedback in the other three markets. Sales ratio between baby and adult diapers stood at 8.3 to 1.7. In regionally advanced countries, such as Japan and Korea, demand for adult paper has been on the rising trend.

High rivalry among current players In an effort to capture more market shares amid intense rivalry, current players have offered good quality of products and competitive prices to attract more customers. Marketing promotional campaign and even a launch of innovative product are also marketing mechanism to help promote sales and to attract new customer group. High threat of new entry Increasing market size and high growth potential would motivate new players to share cake in the industry, which will lead to more varieties of brands offered to customers thereby the company may have to reinforce some activity to build brand loyalty. Moderate bargaining power with supplier As raw material procurement is centralized by the parent company DSGIL, large-volume order gives more bargaining power to the company. Low bargaining power with customer Product pricing relies on market demand and supply, and rivals’ prices ranges, but customer is purely a price taker. Low threat of substituted product It is unlikely there will be other substituted product to replace disposable diaper in foreseeable future, while consumption demand has kept increasing, boosted by rising purchasing power and convenient lifestyle.

Figure 8: First six-month revenue, contributed by country and category 100% 6% 90% 0% 80% 42% 70% 60% 50% 40% 30% 20% 52% 10% 0%

100%

1% 16%

39%

80%

21%

25%

40% 62%

56%

58%

20% 0%

DSGM

2012 PTDSG

DSGS

Source: Opportunity day

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2% 15%

60%

2011 DSGT

5% 0%

2011 Baby Tape Adult Tape

2012 Baby Pants Adult Pants

DSG International (Thailand) – DSGT Thailand Equities Research 11 September 2012

Indonesia likely to become long-term growth driver with population of 260mn, higher than combined number of Thailand, Malaysia and Singapore DSGT expected Indonesia to become a long-term growth driver as the country has high population of 260mn, higher compared with combined population in Thailand, Malaysia and Singapore. Such elevated birthrate is crucial growth factor for diaper business. Marketing study is underway to capture more market shares; however a rapid growth may not be seen in the next 2-3 years as sales are yet to reach break even where the company expects learning curve to be accelerated over time supported by other companies in the group. This synergy will support sustainable growth in the long run. Nonetheless, the company still needs time to penetrate Indonesian market and to invest in supply chain system to increase overall effectiveness. Note that infrastructure and effective logistics system are important factors to help the company to accomplish the goal.

1HCY12 net profit of Bt386mn, exceeding whole year profits in CY11 Revenue grew 14% y-y in 1HCY12, while gross profit margin stood at 34%, near that a year ago. Net profit jumped 53% as the company booked Bt98mn floodclaimed insurance in 2QCY12. The company is expecting to receive more flood-claimed insurance, according to management’s guideline, but exact number has yet to be disclosed. We expect the company to book the remaining flood-claimed insurance in 2HCY12. Figure 10: Earnings performance in 1HCY12

Record high CY11 revenue of Bt5,741mn, up 31% y-y; net profit on the decline of Bt202mn, down 44% y-y Revenue jumped 31% y-y to Bt5,741mn, marking a record high, driven by overseas ventures, high birthrate and rising number of senior citizenship. Sales growth rate outnumbered the industry, which could translate to rising market shares. However, net profit dropped 44% y-y to Bt202mn, blaming higher cost of raw materials and provision for loss due to flood. Core profit grew 9.5% y-y to Bt357mn. In 2006-2011, DSGT recorded revenue growth of 17.5% and core profit of 12.9% CAGR, suggesting high market growth and DSGT’s strong profitability.

40% 35%

6,000 5,000 4,000

5,741

33%

35% 30%

4,367

25%

3,437

20% 3,000 1,249 9%

2,000 1,000

311286

1,547 8% 358 326

1,891

15% 10%

4% 357 202

-

5% 0%

2009 Revenues Net profit to share holders Gross profit margin

2010

y-y %

Revenues

3302.50

2900.27

14%

Gross Profit

1122.24

981.56

14%

Net profit to share holders

386.20

251.86

53%

Net profit to share holders (excluded extra items)

298.49

240.13

24%

Gross Profit margin

34.0%

33.8%

0.1%

Net profit margin Net profit margin (excluded extra items)

11.7%

8.7%

3.0%

9.0%

8.3%

0.8%

CY12 revenue to grow 16% y-y to Bt6,683mn; net profit to jump 204% y-y to Bt615mn and to increase further to Bt619mn in CY13 We expect earnings to grow sequentially in 2HCY12 as the company has launched new advertisement where a well-know actress Paula Taylor is a presenter. The advertisement theme is ‘Paula love BabyLove’, representing a modern mom who wants a baby to move freely which will encourage a baby to have good development. On top of good feedback from the advertisement, the company also conducted other marketing activities both traditional and social media, which is expected to promote sales. Consequently, marketing expense is expected to grow in line with activities. As the business will enter into high season effect in the final quarter of year, which is the winter season where low body temperature causes more frequencies of urination, implying of much often changes of diapers. For these reasons, we project CY12 revenue at Bt6,683mn. As cost of raw materials is likely to stay flat, net profit would jump 204% y-y to Bt615mn. Excluding extra item, core profit is expected to grow 48% y-y to Bt527mn and further to Bt619mn in CY13.

(Million Baht)

36%

1H11

Source: PSR

Figure 9: Earnings performance, 2009-2011 7,000

1H12

2011 Gross Profit Net profit (excluded extra items) Net profit margin

Source: PSR

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DSG International (Thailand) – DSGT Thailand Equities Research 11 September 2012

Figure 11: Earnings forecast, 2012-2012 (Million Baht)

8,000

6,000

40%

7,484

7,000

33%

6,683

35%

34%

5,741

35% 30%

5,000

25%

4,000

20%

3,000

1,891

2,000 4% 357 202

1,000

2,620

2,305 9% 615 527

8% 619 619

-

15% 10% 5% 0%

2011 Revenues Net profit to share holders Gross profit margin

2012(F)

2013(F) Gross Profit Net profit (excluded extra items) Net profit margin

Source: PSR est. CY13 target price of Bt15.50 (pre-stock dividend) and Bt10.30 (post-stock dividend), based on 15x P/E Looking at historical trading data over the past five years, the stock had traded at the lowest leading P/E (excluding extra gain) of 3.5x and the highest level of 17x. For 2012, we expect remarkable net profit growth of 204% when compared to exceptionally low base a year ago due to flood impact which turned out to benefit CY12 earnings as the company booked flood-claimed insurance in 2QCY12 and expects more insurance claims in 2HCY12. Consequently, this potentially significant growth put pressure on earnings growth outlook in 2013 where we project net profit to grow by a mere 3% y-y. Indonesia market where the company expects to be catalyst to earnings growth in the long term will unlikely to generate hefty revenue over the next 2-3 years. Under this scenario, a lack of trading cues to buoy the share prices, despite promising growth outlook, we compute CY13 P/E at 15x.

Price (Baht)

Figure 12: Leading P/E band (excluding gain)

Price P/E 3X P/E 6.5X P/E 10X P/E 13.5X

1Q13 4Q12 3Q12 2Q12 1Q12 4Q11 3Q11 2Q11 1Q11 4Q10 3Q10 2Q10 1Q10 4Q09 3Q09 2Q09 1Q09 4Q08 3Q08 2Q08 1Q08 4Q07 3Q07 2Q07 1Q07

18 16 14 12 10 8 6 4 2 0

P/E 17X

Source: PSR Assumptions 1. Potential flood-claimed insurance has not yet included in our projection where we expect DSGT to book additional insurance claim in 2HCY12. 2. We expect DSGT to pay annual dividend for CY12 performance, given the company’s policy at 40% of net profit and historical record of both stock and cash dividend payment.

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Investment risk 1. Intensifying competition: High growth potential market leads existing players to intense competition to capture higher market shares and motivate new players to share cakes in the industry. 2. Fluctuation cost of raw materials: Raw material prices moved in line with commodities, which would affect the company’s profit margin. 3. Volatility in currencies: Most raw materials used to produce diapers are imported; thus varying exchange rates will affect earnings performance. 4. Political risk: If the government implements measures or regulations which have impact on consumer’s spending, consumer products will be affected directly. Scenario analysis We conduct scenario analysis on our fair value for DSGT based on two factors: 1. Revenue growth rate 2. Gross profit margin, relying on fluctuating cost of raw materials. Our base case is a 12% sales growth and 35% gross profit margin. We compute fair value at Bt15.5/share, giving 2.7% upside and expected dividend of Bt0.41/share or yielding 2.7%, which offers total return of 5.4%. Table 2: Fair value varies upon changes in revenue growth rate and gross profit margin 12%

15%

18%

Fair value

Div.

Fair value

Div.

Fair value

Div.

33.0%

12.10

0.32

12.50

0.33

12.80

0.34

35.0%

15.50

0.41

15.90

0.42

16.40

0.44

36.5%

18.00

0.48

18.50

0.49

19.00

0.51

Source: PSR est.

DSG International (Thailand) – DSGT Thailand Equities Research 11 September 2012 FYE Dec Valuation Ratios P/E (X), adj. P/B (X) EV/EBITDA (X), adj. Dividend Yield (%) Per share data (Bt) EPS, reported EPS, adj. DPS BVPS Growth & Margins (%) Growth Revenue EBITDA EBIT Net Income, adj. Margins EBITDA margin EBIT margin Net Profit Margin

CY09

CY10

CY11

CY12F

CY13F

15.3 3.6 42.7 2.6

13.6 3.0 41.8 2.8

25.4 5.7 32.6 1.6

17.2 4.3 20.0 2.7

14.6 3.9 17.1 2.7

1.07 0.99 0.40 4.19

0.62 1.11 0.43 4.96

0.34 0.60 0.24 2.64

1.02 0.88 0.41 3.48

1.03 1.03 0.41 3.88

18.4 22.3 20.7 28.2

27.1 2.2 9.0 14.1

31.5 28.1 20.7 9.3

16.4 63.4 51.6 47.8

12.0 16.8 15.2 17.4

7.1 9.5 9.4

5.7 8.1 8.2

5.5 7.5 3.5

7.8 9.7 9.2

8.1 10.0 8.3

Key Ratios ROE (%) ROA (%)

26.7 15.3

26.1 13.6

13.1 5.5

33.5 13.4

28.0 12.4

Net Debt-Cash Net Gearing(X)

146 0.1

548 0.4

1,376 0.9

1,230 0.6

1,272 0.5

Income Statement (Bt mn) Revenue EBITDA Depreciation & Amortisation EBIT Net Finance (Expense)/Income Other items Associates & JVs Profit Before Tax Taxation Profit After Tax Non-controlling Interest Net Income, reported Net Income, adj. Source: PSR est.

3,436.82 243.12 82.82 325.94 (11.21) 6.56

4,367.16 248.46 106.90 355.36 (12.04) 21.50

5,741.48 318.31 110.69 429.00 (32.65) 33.32

6,682.50 519.97 130.32 650.29 (61.62) 33.92

7,484.39 607.12 141.75 748.87 (61.48) 37.42

340.07 17.86 322.21 10.84 311.37 286.03

375.04 16.95 358.09 358.09 326.37

241.33 39.69 201.64 201.64 356.67

676.38 61.67 614.71 614.71 527.00

687.40 68.74 618.66 618.66 618.66

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DSG International (Thailand) – DSGT Thailand Equities Research 11 September 2012 FYE Dec Balance Sheet (Bt mn) Cash ST Investments Accounts Receivables Inventories Others Total current assets PPE Intangible assets Associates & JVs Investments Others Total non-current assets Total Assets Short term loans Accounts Payables Others Total current liabilities Long term loans Others Total liabilities Non-controlling interest Shareholder Equity Cashflow Statements (Bt mn) CFO Profit before tax Adjustments Cash from ops before WC changes WC changes Cash generated from ops Taxes paid, net Interest paid Cashflow from ops CFI CAPEX, net Dividends from associates & JVs Dividends/Interest from Investments Purchase/sale of investments Investments in subs & associates Others Cashflow from investments CFF Share issuance Purchase of treasury shares Loans, net of repayments Dividends to minority interests Dividends to shareholders & capital reduction Others Cashflow from financing Net change in cash Effects of exchange rates CCE, end Source: PSR est.

138.27 909.66 359.98 53.46 1,461.37 676.58 14.62 89.32 780.52 2,241.89 266.75 317.49 342.10 926.34 17.85 41.78 985.97 22.78 1,255.92

127.33 1,186.46 746.22 59.11 2,119.12 870.97 15.61 37.52 924.10 3,043.22 561.44 447.09 412.85 1,421.38 114.05 18.43 1,553.86 1,489.36

235.46 1,347.81 1,172.18 50.66 2,806.11 1,183.73 21.92 296.71 1,502.36 4,308.46 1,330.93 626.71 467.52 2,425.15 280.13 17.54 2,722.83 1,585.64

387.94 1,596.58 1,020.00 54.72 3,059.24 1,514.40 19.21 247.43 1,781.04 4,840.28 1,262.27 738.21 375.88 2,376.36 355.53 19.45 2,751.34 2,088.94

345.50 1,784.26 1,142.40 54.72 3,326.88 1,555.88 18.57 244.85 1,819.29 5,146.17 1,262.27 804.51 376.16 2,442.95 355.53 19.45 2,817.93 2,328.24

340.07 107.48 447.55 (133.50) 314.05 (23.40) (9.19) 281.46

375.04 115.94 490.98 (521.69) (30.71) (6.88) (9.18) (46.77)

241.33 293.55 534.88 (495.81) 39.07 (45.23) (31.55) (37.71)

676.38 186.84 863.22 (191.71) 671.51 (41.89) (59.90) 569.72

687.40 203.22 890.62 (243.49) 647.13 (68.74) (61.48) 516.91

(78.58) (78.58) (0.84) (158.01)

(248.94) (248.94) (30.35) 222.42 (305.80)

(473.76) (397.79) (45.20) 236.02 (680.72)

(297.15) (292.15) 272.09 (317.21)

(180.00) (170.00) 170.00 (180.00)

(2.43) 45.02 (136.31) (1.15) (94.86) 28.59 0.44 141.35

80.15 390.94 (126.66) (2.66) 341.76 (10.81) (2.95) 127.34

21.78 933.19 (132.00) (2.71) 820.25 101.83 (0.13) 235.51

10.50 (108.00) (1.05) (98.55) 153.96 6.35 387.94

(379.35) (379.35) (42.44) (1.48) 345.50

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DSG International (Thailand) – DSGT Thailand Equities Research 11 September 2012 Ratings History Target Price Market Price

18 16

Source: Bloomberg, PSR

14 12 10 8 6 4 2

Phillip Group Rating System Total Returns Recommendation Rating > +20% Buy 1 +5% to +20% Accumulate/Trading Buy 2 -5% to +5% Neutral 3 -5% to -20% Reduce/Trading Sell 4 >-20% Sell 5 Remarks We do not base our recommendations entirely on the above quantitative return bands. We consider qualitative factors like (but not limited to) a stock's risk rew ard profile, market sentiment, recent rate of share price appreciation, presence or absence of stock price catalysts, and speculative undertones surrounding the stock, before making our final recommendation

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Dec-12

Sep-12

Jun-12

Mar-12

Dec-11

Sep-11

Jun-11

Mar-11

Dec-10

Sep-10

Jun-10 1 2 3 4 5

DSG International (Thailand) – DSGT Thailand Equities Research 11 September 2012

Research Department Fundamental: Name Sasikorn Charoensuwan Rutsada Tweesaengsakulthai Danai Tunyaphisitchai Naree Apisawaittakan Siam Tiyanont Preeyanun Tripetchchuporn Ornmongkol Tantitanatorn Rakpatai Narongsak*

Analyst Reg No. Capital Market Investment Analyst #97446 Securities Investment Analyst#17972 Capital Market Investment Analyst #2375 Securities Investment Analyst #17971 Securities Investment Analyst #17970 Securities Investment Analyst #17973 Securities Investment Analyst #34100

Strategy: Name Teerada Charnyingyong Chutikarn Santimetvirul Werajak Jungkiatkajorn* Technical: Name Sasima Hattakitnikorn Kanoksak Vutipan

Tel 6 2 635 1700 #480

Banking,Consumer Finance

66 2 635 1700 #482

ICT, Energy, Health Care Services

66 2 635 1700 #481

Construction Materials, Property Development

66 2 635 1700 #484

Agro & Food, Electronics

66 2 635 170 0#483

Transportation, Media & Publishing

66 2 635 1700 #488

Petrochemicals, Commerce, Tourism

66 2 635 1700 #491

Securities, Automotive, Energy, Packaging

Analyst Reg No. Securities Investment Analyst #9501 Derivatives Investment Analyst #37928

Analyst Reg No. 8328 2423

Sector

Tel 66 2 635 1700 #487 66 2 635 1700 #491

Tel 66 2 635 1700 #490 66 2 635 1700 #485

Database & Production: Name Manunpat Yuenyongwatanakorn Sutiporn Oupkaew Translation: Name Chaiyot Ingkhasorarat Naowarat Angurasuchon *Assistant Analyst

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DSG International (Thailand) – DSGT Thailand Equities Research 11 September 2012

Bangkok Offices Head Office Srinakarindr Viphavadi Yaowarat Bangkapi 1 Bangkapi 2 Hua Lumphong Rangsit Sindhorn Siam Discovery

11st Fl., Unit 1102, 14th Fl., Unit 1404 and 15th Fl., Vorawat Bldg., 849 Silom Rd. Silom, Bangrak, Bangkok 10500 Tel : 0 2635 1700 , 0 2268 0999 Fax : 0 2635 1615 17th Fl., Modernform Tower, 699 Srinakarindr Rd., Suan Luang, Suan Luang, Bangkok 10250 Tel : 0 2722 8344-53 Fax : 0 2722 8343 15th Fl., Lao Peng Nguan Tower 1, 333 Soi Chuaypuang, Viphavadi- Rangsit Rd., Ladyao, Chatuchak, Bangkok 10900 Tel : 0 2618 8400 Fax : 0 2618 8344 , 0 2618 8381 19th Fl., Kanchanadhat Bldg., 308 Yaowarat Rd., Jakawat, Sampantawong, Bangkok 10100 Tel : 0 2622 7833 , 0 2226 2777 Fax : 0 2622 7844 8th Fl., The Mall Office Tower-Bangkapi 3522 Lad Prao Rd., Klongchan Bangkapi, Bangkok 10240 Tel : 0 2363 3263 Fax : 0 2363 3275 8th Fl., The Mall Office Tower-Bangkapi 3522 Lad Prao Rd., Klongchan Bangkapi, Bangkok 10240 Tel : 0 2363 3469 Fax : 0 2363 3464 4th Fl., Tang Hua Pak Bldg., 320 Rama 4 Rd., Mahaprutharam, Bangrak, Bangkok 10500 Tel : 0 2639 1200 Fax : 0 2639 1340-1 G Fl., Room#PLZ.G.SHP065A Future Park Rangsit, 94 Paholyothin Rd., Prachathipat, Thunyaburi, Pathumthani 12130 Tel : 0 2958 5040 Fax : 0 2567 3311 130-132 Sindhorn Tower 3 Building, 19 Floor, Wireless Rd., Lumpini, Pathumwan, Bangkok 10330 Tel : 0 2650 9717 Fax : 0 2657 9722 989 Siam Tower, 11st Floor, Unit A2, Rama 1 Rd., Pathumwan, Pathumwan, Bangkok 10330 Tel : 02 658 0776 Fax : 02 658 0773

Provincial Offices Khon Kaen Khon Kaen – Rim Bueng Phisanulok Had Yai Had Yai Petkasem Suratthani Laemchabang Chumporn Investor Center

4th Fl., Kow Yoo Hah Bldg., 359/2 Mittapap Rd., Nai Muang, Muang , Khon Kaen 40000 Tel : 0 4332 5044-8 Fax : 0 4322 5687 3rd Fl., Arokaya Bldg., 52 Rop Bueng Rd., Nai Muang, Muang , Khon Kaen 40000 Tel : 0 4322 6026 Fax : 0 4322 6796 2nd Fl., Thai Sivarat Bldg., 59/15 Baromtrilokanad Rd., Naimuang, Muang, Phisanulok 65000 Tel : 0 5524 3646 Fax : 0 5524 5082 4th Fl., Southland Rubber Bldg., 55 Ratyindee Rd., Had Yai, Had Yai, Songkla 90110 Tel : 0 7423 4095-99, 0 7423 0537-8 Fax : 0 7422 0908 3rd Fl., Unit 3D, Redar Group Bldg., 607 Petkaseam Rd., Had Yai, Had Yai, Songkla 90110 Tel : 0 7422 3044 Fax : 0 7422 3620 62/9 Donnok Rd., Talad, Muang Suratthani, Suratthani 84000 Tel : 077 206 131 Fax : 077 206 151 83/112, 114 Moo 9, Tungsukla, Sriracha, Chonburi 20110 Tel : 0 3849 0669 Fax : 0 3849 3125 25/45 Krom Luang Chumporn Rd., Tatapao, Muang, Chumporn 86000 Tel : 0 7757 0652-3 Fax : 0 7757 0441

Results Presentation Score Range

Number of Logo

Less than 50

No logo given

50 - 59 60 - 69 70 - 79 80 - 89 90 - 100

The disclosure of the survey result of the Thai Institute of Directors Association (IOD) regarding corporate governance is made pursuant to the Office of the Securities and Exchange Commission. The survey of the IOD is based on the information of a company listed on the Stock Exchange of Thailand and the Market for Alternative disclosure to the public and able to be accessed by a general public investor. The results, therefore, is from the perspective of a third party. It is not an evaluation of operation and is not based on inside information. The survey result is as of the date appearing in the Corporate Governance Report of Thai Listed Companies. As a result, the survey result may be changed after that data. Phillip Securities (Thailand) of securities company does not confirm nor certify the accuracy of such survey result.

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DSG International (Thailand) – DSGT Thailand Equities Research 11 September 2012

Overseas Offices SINGAPORE

Phillip Securities Pte Ltd Raffles City Tower 250, North Bridge Road #06-00, Singapore 179101 Tel : (65) 6533 6001 Fax : (65) 6535 6631 Website: www.poems.com.sg

HONG KONG

Phillip Securities (HK) Ltd Exchange Participant of the Stock Exchange of Hong Kong 11/F United Centre 95 Queensway, Hong Kong Tel (852) 22776600 Fax (852) 28685307 Website: www.phillip.com.hk

MALAYSIA

Phillip Capital Management Sdn Bhd B-3-6 Block B Level 3 Megan Avenue II, No. 12, Jalan Yap Kwan Seng, 50450 Kuala Lumpur Tel (603) 21628841 Fax (603) 21665099 Website: www.poems.com.my

JAPAN

PhillipCapital Japan K.K. Nagata-cho Bldg., 8F, 2-4-3 Nagata-cho, Chiyoda-ku, Tokyo 100-0014 Tel (81-3) 35953631 Fax (81-3) 35953630 Website:www.phillip.co.jp

INDONESIA

PT Phillip Securities Indonesia ANZ Tower Level 23B, Jl Jend Sudirman Kav 33A Jakarta 10220 – Indonesia Tel (62-21) 57900800 Fax (62-21) 57900809 Website: www.phillip.co.id

THAILAND

Phillip Securities (Thailand) Public Co. Ltd 15th Floor, Vorawat Building, 849 Silom Road, Silom, Bangrak, Bangkok 10500 Thailand Tel (66-2) 6351700 / 22680999 Fax (66-2) 22680921Website www.phillip.co.th

CHINA

Phillip Financial Advisory (Shanghai) Co. Ltd No 550 Yan An East Road, Ocean Tower Unit 2318, Postal code 200001 Tel (86-21) 51699200 Fax (86-21) 63512940 Website: www.phillip.com.cn

FRANCE

King & Shaxson Capital Limited 3rd Floor, 35 Rue de la Bienfaisance 75008 Paris France Tel (33-1) 45633100 Fax (33-1) 45636017 Website: www.kingandshaxson.com

UNITED KINGDOM

King & Shaxson Capital Limited 6th Floor, Candlewick House, 120 Cannon Street, London, EC4N 6AS Tel (44-20) 7426 5950 Fax (44-20) 7626 1757 Website: www.kingandshaxson.com

UNITED STATES

Phillip Futures Inc 141 W Jackson Blvd Ste 3050 The Chicago Board of Trade Building, Chicago, IL 60604 USA Tel +1.312.356.9000 Fax +1.312.356.9005

AUSTRALIA

PhillipCapital Australia Level 37, 530 Collins Street, Melbourne, Victoria 3000, Australia Tel (613) 96298380 Fax (613) 96148309 Website: www.phillipcapital.com.au

SRI LANKA

Asha Phillip Securities Ltd Level 4, Millennium House, 46/58, Navam Mawatha, Colombo 2, Sri Lanka Tel: (+94) 11 2429 100 Fax: (+94) 11 2429 199 Email: [email protected]

TURKEY

Hak Menkul Kiymetler A.Ş Dr.Cemil Bengü Cad. HAK Is Merkezi No:2 Floor :6A 34403 Çaglayan-ISTANBUL Tel: (+90) (212) 296 84 84 (pbx) Fax: (+90) (212) 233 69 29 - (+90) (212) 232 98 23 Emails: [email protected] ; [email protected]

The information contained herein is based on sources which Phillip Securities(Thailand) believes reliable. We do not guarantee its accuracy or completeness. Opinions and estimates expressed herein are subject to change without notice. This report is for information only and should not be construed as an offer or solicitation for the purchase or sale of any securities referred to herein. We accept no liability for any loss, direct or indirect, from the use of this document. The directors and/or employees of Phillip Securities and or its associates may have an interest in the securities mentioned in the securities mentioned herein.

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