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Platform 1

Strategy, 13 January 2014

Thailand Strategy Underweight

Remain Cautious on Thailand

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Veena Naidu 66 2862 9752 License No.24418

veena.na@th.oskgroup.com

In 2013, the SET Index fell 7.8% y-o-y and 21.7% from its high to end the year at 1290.6pts. It retraced by another 5% to 1224pts in the first week of January, in line with expectations set out in our 17 Dec 2013 strategy note, in which we predicted the index would drop to 1200-1220pts. Since hitting the new low, the SET has rebounded slightly to 1260-1270pts. However, we are not turning positive as yet, and remains cautious on Thailand.

Why we are still cautious on Thai stocks

The consensus earnings growth forecast of 13% for this year is still too optimistic. In previous crises, earnings declined by 12% in 2006, 16% in 2007 and 23% in 2009. Our earnings growth forecast of 8.4% for 2014 is currently in the process of being revised down further.

The political outcome is very difficult to predict but looking at the existing conditions, all possible scenarios point to dead ends: i) no election, ii) an election but the winning parties will not be able to form a Government, iii) a military coup or a coup by independent agencies leading to no election, iv) an appointed Government which will result in new groups of people taking to the streets.

Street protests and the lack of Government have led to delays in the disbursement of budgets in the first quarter of FY14 by 20% - with more delays expected to come as the conflict continues. The THB350bn water infrastructure projects and THB2trn infrastructure bill will not see the light of day, at least until 2015. Our GDP growth forecast of 4% for 2014 looks too optimistic. Based on guidance provided by companies, GDP growth for 2014 may be well below 3% - with a contraction in GDP growth in 1H14 and a slight recovery in 2H14.

The continued outflow of funds from Thailand from the quantitative easing (QE) taper is putting pressure on the currency, as the THB has now weakened to USD33.

With the increase in downside risks, the SET Index currently has room for a further correction, depending on the severity of the deceleration in GDP and earnings growth. At the SET Index level of 1,220-1,230, market is trading at a forward P/E of 10.18x and a forward P/BV of 1.59x.. At -1SD below the mean P/E of 9.5x and P/BV of 1.4x, the target SET Index is around 1,100. In a worst-case scenario, ie at -2SD below mean P/E of 7.3x and P/BV of 1.0x, the target SET Index is 800.

Stocks approaching attractive valuations are Central Plaza Hotel PCL (CENTEL), Sino-Thai Engineering PCL (STEC), Bangkok Dusit Medical (BGH) and Land and Houses PCL (LH).

13 January 2014

See important disclosures at the end of this report 2

2014 economic outlook dismal; recovery seen only in 2015

The ongoing political unrest is beginning to bite. News reports quoted the

Budget Bureau as saying that budget disbursements during the first quarter of

FY14 (Oct 2013-Sept 2014) missed the allocated amount of THB1trn by 20%.

GDP growth for 4Q13 is now expected to miss our estimate of 1%. FY13 GDP

growth should be at 2.3-2.5% instead of 3%. We recently visited Kasikornbank

and management provided the following forecasts for Thailand’s GDP and

export growth under different scenarios. In the worst-case scenario, GDP

growth is expected to be flat y-o-y.

A new Government is formed in 1H14: exports will grow 7%, GDP growth is

estimated at 4.5%

A new Government is formed in 2H14: exports will nudge up by 5%, GDP

growth is estimated at 3%

A new Government is formed in 2H14: exports will rise by 7%, but there is a

delay in the disbursement of the fiscal budget. GDP growth is estimated at

2.5%

Continued political conflict throughout 2014 with no functional Government:

exports will grow less than 3%, while GDP growth is estimated at 0.5%.

We are forecasting a GDP growth of 3% for 2013 and 4% for 2014, with a

downside bias. Our forecast is based on exports growth of 5.2-5.5% for 2014

vs flat growth in 2013.

The Budget Bureau is beginning to be concerned about the fiscal budget

timeline for 2015. In order for the 2015 budget to be approved by the

Government to be in time for disbursement from Oct 2014 onwards, the

process must start in Jan 2014. Assuming that a Government is formed by

mid-2014, the 2015 budget will be at least delayed by four months.

Figure 1: GDP by expenditure component (based on constant 1988 prices)

Source: National Economic & Social Development Board, RHB estimates.Note that e: RHB’s estimate F: RHB’s forecast

Figure 2: GDP by industrial origin (based on constant 1988 prices)

Source: National Economic & Social Development Board, RHB estimates. Note that e: RHB’s estimate F: RHB’s forecast

2012 2013 2012 2013e 2014F 1Q 2Q 3Q 4Q 1Q 2Q 3Q

Consumption Public sector -0.2 7.4 10.0 12.5 2.9 7.6 7.4 7.5 7.1 5.5 Private sector 2.9 5.3 6.0 12.4 4.4 2.5 -1.2 6.7 1.3 2.7 Gross Fixed Capital Formation 5.2 10.2 15.5 22.9 5.8 4.7 -6.5 13.2 0.2 2.8 Public sector -9.6 4.0 13.2 31.1 18.8 15.4 -16.2 8.9 2.2 1.5 Private sector 9.2 11.8 16.2 20.9 2.9 2.0 -3.3 14.4 -0.4 3.1 Aggregate Domestic Demand 3.1 6.8 9.0 15.0 4.6 3.6 -1.4 8.4 1.7 3.1 Export of Goods & Services -3.2 1.1 -2.8 19.6 8.3 2.9 3.8 3.1 5.2 5.5 Imports of Goods & Services 4.3 8.6 -1.8 15.0 8.1 4.5 0.7 6.2 3.5 5.8 GDP 0.4 4.4 3.1 19.1 5.4 2.9 2.7 6.5 3.0 4.0

2012 2013 2012 2013e 2014F 1Q 2Q 1Q 2Q 1Q 2Q 3Q Real Gross Domestic Product 0.4 4.4 3.1

19.1 5.4 2.9 2.7 6.5 3.0 4.0 Agriculture, forestry &

fishing 3.4 1.8 8.3 3.1 0.8 2.5 -0.7 3.8 0.6 2.2 Mining & quarrying -1.0 6.8 12.2 15.1 10.4 4.4 -2.5 8.2 2.6 1.6 Manufacturing -4.3 2.8 -1.1 37.0 4.9 -1.1 -0.4 6.9 -0.1 2.5 Construction 0.8 6.9 9.8 14.1 10.5 5.0 -2.2 7.8 2.9 2.6 Services 3.8 6.1 5.2 11.0 6.2 6.2 6.1 6.5 5.9 5.5

13 January 2014

See important disclosures at the end of this report 3

Figure 3: Exports chart Figure 4: Thailand’s policy rate trend

Source: Bank of Thailand Source: Bank of Thailand

Figure 5: Headline inflation

Figure 6: Core inflation in 2013

Source: Bank of Thailand Source: Bank of Thailand

Figure 7: Quarterly GDP growth

Figure 8: Quarterly GDP for 2013

Source: Bank of Thailand , RHB estimates Source: Bank of Thailand , RHB estimates

13 January 2014

See important disclosures at the end of this report 4

Figure 9: Comparative studies: 2005-2006, 2008-2009 and 2013-2014

2005 2006 2008 2009 9M2013 2014F

gdp growth% 4.5 5.1 2.5 -2.3 2.7 1.0-5.0

Investment growth% 11 4 1.2 -9.2 -6.5 7.1

Private Investment growth% 11.2 3.9 3.2 -13.1 -3.3 5.8

Public Investment growth% 10.6 4.5 -4.7 2.7 -16.2 12

Private consumption growth% 4.4 3.1 2.9 -1.1 -1.2 2.7

Export Growth% 15 17.4 5.1 -12.5 -1.8 7

Import growth% 26 7 8.9 -21.5 -2.9 6.7

Trade balance USD -8.578 2.2 -0.4 32.6 4.7 5.8

Current account balance -3.714 3.2 2.2 21.9 -3.6 -2.5

current account as % of gdp 1.7 1.5 0.8 8.3 -0.9 -0.6

CPI 4.5 4.7 5.4 -0.9 1.7 2.1-3.1

Foreign Net Sell in Thai shares THB bn 118.541 83.445 -162 39 -193

Foreign Thai stock holding% 22.1 25.9 26 25 22

Foreign total bond holding THB bn 118.5 83.4 76.1 71.5 91.2

Earnings growth% 14.5 -11.57 -23 42 15.55 11.2

Earning Growth (exc. Energy and Petrochem) 14% -30% 8% 33% 13%

Earning Growth (exc. Banking and Finance) 14% -4% -43% 55% 6%

Loan growth% 5 7 17 8 8

NPL ratio% 8.16 8 6.4 6.4 3.2

NPL Coverage% 60 62 75 76 136

SET index High/Low 746.10/630.71 787.55/587.55 886.57/380.05 758.55/408.78 1649.77/1338.81

SET index % change 6.8 4.74 -47.6 63.2 7.9

SET P/E 10.14 9.44 7.01 25.56 17.05

SET P/BV 1.95 1.69 0.98 1.56 2.4

THB/USD 40.22 37.89 34.74 33.37 32.95 31.5-32.5

10Y Govt Bond Yield 5.47 5.44 2.69 4.34 3.94

International Reserve USD bn 52 67 111 138 172.29

Short term external debt USD bn 23 27 34 33 32

Short term external debt/international Reserve 43% 40% 30.60% 23.90% 37.03%

Dubai Fateh crude oil price High/Low (USD) 60.03/33.8 72.7/54.43 141.33/33.85 80.08/39.69 113.66/96.07

Rubber THB/kg 60.6 49.5 34.1 81 74.81

Rice Price THB/tonn 6744 6400 9618 9825 14300

Sugar Price USD/Pound 14.68 11.75 11.81 26.95 15.87

Tapica THB/kg 1.4 1.13 1.14 1.79 2.1

Retail sale growth% 9.36 4.63 -2.51 8.99 -3.04

Source: Bank of Thailand ,NESDB, Bloomberg , RHB OSK

SET Index’s support level based on historical crisis

During Thailand’s political crisis in 2005-2006, when the Yellow Shirt protests brought down the Thaksin Government and led to a 2006 military coup (after which the military installed a new prime minister and Government, and ruled the country for a year before a general election was called), the SET Index traded at a low of -1SD below its mean P/BV of 1.4x and mean P/E of 9.5x.

In 2005 and 2006, the market was negatively affected by the political situation, while the economy remained strong with a GDP growth of 4.5% in 2005 and 5.15% in 2006. Export growth was solid, expanding by 15% and 17.4% in 2005 and 2006 respectively. Private and public investment growth cooled down but remained positive.

Despite the strong economy, earnings of stocks listed on the SET declined 11.6% y-o-y.

During the 2008-2009 financial crisis, Thailand’s GDP was hit hard – growing only 2.5% in 2008 and -2.3% in 2009 due to the global economic slowdown. Exports rose 5.1% in 2008 and declined 12.5% in 2009. During this period, the political situation in Thailand was stable, with the Democrat Party in power. Due to the massive capital outflow and deceleration in economic growth, the Thai SET Index traded at a low of -2SD below the mean P/BV of 1.0x and mean P/E of 7.3x.

13 January 2014

See important disclosures at the end of this report 5

This time, the market is being negatively affected by all fronts, ie political, domestic and global economic conditions, along with the outflow of funds as a result of the QE tapering. We believe that there are downside risks to the market at the current level.

At the SET Index level of 1,220-1,230, market is trading at a forward P/E of 10.18x and a forward P/BV of 1.59x.

At -1SD below mean P/E of 9.5x and P/BV of 1.4x, the target SET Index is around 1,100.

At -2SD below mean P/E of 7.3x and P/BV of 1.0x, the target SET Index is 800.

In the best-case scenario, in which we assume: i) the political conflict is resolved quickly, and ii) GDP growth does not fall below 3%, the SET Index target would be 1,374 pts, with the market trading at a mean P/E of 11.7x and mean P/BV of 1.8x.

Figure 10: 1HFY14 target for the SET Index

Source: RHB OSK estimate

13 January 2014

See important disclosures at the end of this report 6

Downside risks to 2014 earnings continue

We are forecasting 2014 earnings growth of 8.44% for stocks under our

coverage vs the 13% estimate from the consensus. During the last crises,

earnings growth declined by 12% in 2006, 16% in 2007 and 23% in 2008.

We believe that there are still downside risks to earnings particularly in the

following sectors:

i. Commerce and consumer: continued weakness in domestic spending will

hurt companies in the consumer sector.

ii. Aviation: ongoing political impasses will negatively impact inbound tourism

numbers. Several airlines have cut flights to Thailand.

iii. Hotels: occupancy rates and revenue per available room (RevPAR) rates,

which are affected by domestic and international tourism, will decline.

iv. Construction materials: delays in private investment and public

investments will hurt demand for cement and construction.

v. Industrial estates: until there is a stable Government, foreign direct

investment (FDI) will be affected, hurting land sales and rental of factories

at the industrial estates.

vi. Media sector: ad spending growth was extremely weak in 2013 at 1% and

will continue to be hurt by weak domestic consumption and disruptions to

normal business activities due to street protests.

Figure 11: Downside risks to 2014 earnings by sector

Earnings 2010 2011 2012 2013F 2014F 2012 Growth 2013F Growth 2014F Growth

Agro&Food 19,535.9 24,767.4 14,034.1 8,461.9 21,312.3 -43.34% -39.70% 151.86%

Auto 2,472.6 1,445.4 2,724.0 3,040.0 3,192.0 88.46% 11.60% 5.00%

Bank 107,122.5 129,264.3 160,698.3 188,998.7 191,676.0 24.32% 17.61% 1.42%

ConMat 39,010.1 28,984.2 25,381.0 33,935.0 36,505.0 -12.43% 33.70% 7.57%

Commerce 15,171.5 19,517.2 28,387.8 26,568.4 31,890.2 45.45% -6.41% 20.03%

Consumer Products/Fashion 243.0 456.0 449.0 426.0 521.0 -1.54% -5.12% 22.30%

Information & Commu 40,332.8 44,899.5 61,911.7 66,276.0 75,879.0 37.89% 7.05% 14.49%

Electronic 4,019.4 475.1 3,619.0 5,236.0 5,095.0 661.78% 44.68% -2.69%

Energy 189,437.3 209,934.0 209,257.9 224,754.2 239,116.3 -0.32% 7.41% 6.39%

Media 6,686.3 7,109.3 8,650.3 9,742.8 11,072.3 21.68% 12.63% 13.65%

Healthcare 4,192.0 6,647.0 11,514.0 9,295.0 10,669.0 73.22% -19.27% 14.78%

Industrial Estate 3,594.0 1,320.0 6,229.0 6,251.0 7,354.0 371.89% 0.35% 17.65%

Residential Property 19,481.2 19,390.9 23,922.0 29,359.0 33,298.0 23.37% 22.73% 13.42%

Construction 3,839.8 3,884.7 4,377.0 6,786.4 7,813.9 12.67% 55.05% 15.14%

Petrochem 26,733.4 45,589.4 38,612.5 34,470.6 41,971.0 -15.30% -10.73% 21.76%

Services/ Professional Services 41.0 97.0 76.0 155.0 179.0 -21.65% 103.95% 15.48%

Transportation 8,167.0 4,229.0- 11,370.0 13,702.0 20,661.0 N.A. 20.51% 50.79%

Tourism 5,259.2 7,399.8 13,593.9 16,539.4 15,465.8 83.71% 21.67% -6.49%

Infrastructure 2,433.0 4,402.6 4,164.0 4,453.9 5,054.5 -5.42% 6.96% 13.48%

Others 268.0 282.0 542.0 655.0 705.0 92.20% 20.85% 7.63%

Market total 498,039.9 551,636.9 629,513.6 689,106.4 759,430.3 14.12% 9.47% 10.21%

Total 498,039.9 551,636.9 629,513.6 689,106.4 745,760.5 14.12% 9.47% 8.22%

Earnings Growth 10.76% 14.12% 9.47% 8.22%

5.05% 28.88% 12.64% 11.27%Earnings Growth (exc. Energy and Petrochem)

2010 2011 2012 2013F 2014F

P/E (x) 16.02   14.46   12.67   11.58   10.51  

PEG (x) 0.32   1.34   0.90   1.22   1.03  

ROE (%) 18.72   17.12   17.07   16.35   16.30  

ROA (%) 3.85   3.56   3.52   3.43   3.53  

P/BV (x) 2.61   2.35   2.00   1.79   1.64  

P/E (x) - exc. Energy and Petrochem) 19.64   18.70   14.51   12.88   11.57   Source: RHB estimates

13 January 2014

See important disclosures at the end of this report 7

Figure 12: SET earnings

Source: Company data, RHB estimates

Political outlook very difficult to predict

The outcome for all the possible scenarios related to the ongoing political conflict points to a dead end:

Even if we did have a general election on 2 Jan 2014, it is required by law that the winning candidate must have obtained at least 20% of the votes. Due to the boycott of the election by the Democrat Party, it is possible that some constituencies may have just one party vying to win the seat. Due to the fact that only one party ends up contesting the seat, it may be possible that the winning candidate may not get the minimum 20% of the votes required to be elected - similar to the situation in the 2006 election. In such cases, the Election Commission (EC) will have to continue to hold elections in that constituency until a successful candidate is found.

Due to the blockage of the registration offices in seven provinces in the south, members of parliament (MPs) were not able to register in 28 constituencies. This implies that even if we have a general election, the parliament will be 95% short of the MPs required to hold a session to choose the PM.

The anti-Government protestors have called for a shutdown in Bangkok on 13 Jan, while the Red Shirts are said to be planning to deter them on the same day. We have to wait and see if any violent confrontation happens.

A possible military coup to end the deadlock will imply the appointment of a prime minister, as well as a Government that will govern the country for 15-18 months during which amendments to the constitution - under the political reform agenda - will be undertaken. This may initially be taken as a positive sign as conditions could normalise. However, we fear that the Red Shirts and other anti-coup groups will come out to the streets to protest against military rule, which may lead to violence against the people.

The independent agencies, the Constitutional Court and the National Counter Corruption Committee (NCCC) may rule against the Government on several cases lodged – which will ultimately take away the legal status of these MPs. This is being termed as a coup against an elected Government by the independent agencies. The pro-Government Red Shirts will be dissatisfied with such a move and protest against it.

Dec 2013 market round-up

The SET Index closed at 1,298.71 pts at end-December, down 5.28% m-o-m. YTD, the market generated total returns of -5.22%. The outperformers during the month were KCE Electronic (+23.68%) , DELTA Electronics Thai PCL (+13.83%) ,Charoen Pokphand Foods PUB (+12.28%) , Bangkok Life Assurance (+9.68%) (BLA TB, NR), Thai Union Frozen Products (+8.71%) and Thoresen Thai Agencies (+7.41%).The top losers were Sino Thai Engineering and Construction (-32.31%), Hemaraj Land Development

(-27.23%) , Italian-Thai Development (-23.92%),Central Plaza Hotel

(-23.61%) , WHA Corp (-21.68%) and Bank of Ayudhya (-20.78%)

13 January 2014

See important disclosures at the end of this report 8

Figure 13: Total returns of Thai indices

Source: RHB estimates

Figure 14: Top 20 gainers and losers in Dec 2013

Source: RHB estimates

The outperforming sectors in December were electronics components (+15.21%), food & beverage (+5.68%), construction materials (+0.75%) and automotive (0.00%), while the underperformers were tourism & leisure (-23.61%), ICT (-11.53%), property development (-11.30%), transportation & logistics (-10.96%), banking (-9.65%), and healthcare services (-8.36%),

13 January 2014

See important disclosures at the end of this report 9

Source: RHB estimates

Figure 15: Total returns of SET100 components by sector

Figure 16: Total returns of SET100 components by market cap

13 January 2014

See important disclosures at the end of this report 10

Figure 17: Top Picks

Stock Current Target P/E(x) P/BV(x) Yield(%)

Price Price High Low High Low 2014F 2014F 2014F Remarks

(Bt) (Bt) (Bt) (Bt) (Bt) (Bt)

BGH 117.0 176.0 177.0 111.5 116.5 70.3 29.3 4.6 1.7 BGH’s higher-than-expected expenses from opening new hospitals in 3Q13

may lead to core earnings of just THB1.7bn (-4% y-o-y). Nonetheless, w e

view this as a short-term anomaly as contributions from its new hospitals

w ill lead to stronger grow th next year, reflecting its healthy portfolio mix of

existing and new hospitals. Maintain BUY, w ith a THB176 TP.

LH 8.4 10.3 14.1 8.7 10.1 6.2 11.6 2.6 7.3 Amid toughening operating environment, LH – w ith its: i) strong brand

name, ii) resilient earnings, iii) solid balance sheet, and iv) experienced

management – w ill stand out. The company’s share price looks

attractive now that its P/E has dipped below -1SD from its long-term

mean, w hile its dividend yield stands at an appealing 6-7%.

CENTEL 25.0 40.0 43.3 26.0 28.3 10.1 16.9 2.6 1.0 While w e are turning cautious on the tourism sector and CENTEL’s

share price has retreated by almost 40% in the last tw o months, current

valuation is still not compelling for a risk-rew ard tradeoff given FY14

earnings risk and a slew of negative new s flow . We see grow ing risk of

violence and prolonged deadlock to hurt its high season 1Q14 earnings.

We cut FY14 earnings and TP by 13% to THB40 (pegged to EV/EBITDA

15x) and see entry level at ~THB22 (at EV/EBITDA 8.5x).

STEC 13.2 32.0 38.8 13.1 27.3 12.3 20.0 4.2 2.5 3Q13 results beat street estimates, w ith sales and earnings up by 7% and

29% respectively. The strong performance is set to continue into 4Q13 and

beyond. STEC’s orderbook looks primed to hit new highs too, supported by

the Government’s THB2trn infrastructure bill. The recent share price

correction gives an opportunity to take a position in STEC – a contractor

w ith sound fundamentals and net cash – at a 30% discount to its THB32 TP.

2013 2012

Source: RHB OSK

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RHBSHK, RHBIB and/or other affiliates may, within the past 12 months, have received compensation and/or within the next 3 months seek to obtain compensation for investment banking services from the subject company. Risk Disclosure Statements The prices of securities fluctuate, sometimes dramatically. The price of a security may move up or down, and may become valueless. It is as likely that losses will be incurred rather than profit made as a result of buying and selling securities. Past performance is not a guide to future performance. RHBSHK does not maintain a predetermined schedule for publication of research and will not necessarily update this report

12

Indonesia This report is published and distributed in Indonesia by PT RHB OSK Securities Indonesia (formerly known as PT OSK Nusadana Securities Indonesia), a subsidiary of OSK Investment Bank Berhad, Malaysia, which have since merged into RHB Investment Bank Berhad, which in turn is a wholly-owned subsidiary of RHB Capital Berhad. Thailand This report is published and distributed in Thailand by RHB OSK Securities (Thailand) PCL (formerly known as OSK Securities (Thailand) PCL), a subsidiary of OSK Investment Bank Berhad, Malaysia, which have since merged into RHB Investment Bank Berhad, which in turn is a wholly-owned subsidiary of RHB Capital Berhad. Other Jurisdictions In any other jurisdictions, this report is intended to be distributed to qualified, accredited and professional investors, in compliance with the law and regulations of the jurisdictions. DMG & Partners Research Guide to Investment Ratings Buy: Share price may exceed 10% over the next 12 months Trading Buy: Share price may exceed 15% over the next 3 months, however longer-term outlook remains uncertain Neutral: Share price may fall within the range of +/- 10% over the next 12 months Take Profit: Target price has been attained. Look to accumulate at lower levels Sell: Share price may fall by more than 10% over the next 12 months Not Rated: Stock is not within regular research coverage DISCLAIMERS This research is issued by DMG & Partners Research Pte Ltd and it is for general distribution only. It does not have any regard to the specific investment objectives, financial situation and particular needs of any specific recipient of this research report. You should independently evaluate particular investments and consult an independent financial adviser before making any investments or entering into any transaction in relation to any securities or investment instruments mentioned in this report. The information contained herein has been obtained from sources we believed to be reliable but we do not make any representation or warranty nor accept any responsibility or liability as to its accuracy, completeness or correctness. Opinions and views expressed in this report are subject to change without notice. This report does not constitute or form part of any offer or solicitation of any offer to buy or sell any securities. DMG & Partners Research Pte Ltd is a wholly-owned subsidiary of DMG & Partners Securities Pte Ltd, a joint venture between OSK Investment Bank Berhad, Malaysia which have since merged into RHB Investment Bank Berhad (the merged entity is referred to as “RHBIB” which in turn is a wholly-owned subsidiary of RHB Capital Berhad) and Deutsche Asia Pacific Holdings Pte Ltd (a subsidiary of Deutsche Bank Group). DMG & Partners Securities Pte Ltd is a Member of the Singapore Exchange Securities Trading Limited. DMG & Partners Securities Pte Ltd and their associates, directors, and/or employees may have positions in, and may effect transactions in the securities covered in the report, and may also perform or seek to perform broking and other corporate finance related services for the corporations whose securities are covered in the report. This report is therefore classified as a non-independent report. As of 20 June 2013, DMG & Partners Securities Pte Ltd and its subsidiaries, including DMG & Partners Research Pte Ltd, do not have proprietary positions in the subject companies, except for: a) - As of 20 June 2013, none of the analysts who covered the stock in this report has an interest in the subject companies covered in this report, except for: a) - DMG & Partners Research Pte. Ltd. (Reg. No. 200808705N)

Kuala Lumpur Hong Kong Singapore

Malaysia Research Office

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Jalan Tun Razak Kuala Lumpur

Malaysia Tel : +(60) 3 9280 2185 Fax : +(60) 3 9284 8693

RHB OSK Securities Hong Kong Ltd.

(formerly known as OSK Securities Hong Kong Ltd.) 12th Floor

World-Wide House 19 Des Voeux Road Central, Hong Kong

Tel : +(852) 2525 1118 Fax : +(852) 2810 0908

DMG & Partners

Securities Pte. Ltd. 10 Collyer Quay

#09-08 Ocean Financial Centre Singapore 049315

Tel : +(65) 6533 1818 Fax : +(65) 6532 6211

Jakarta Shanghai Phnom Penh

PT RHB OSK Securities Indonesia

(formerly known as PT OSK Nusadana Securities Indonesia)

Plaza CIMB Niaga 14th Floor

Jl. Jend. Sudirman Kav.25 Jakarta Selatan 12920, Indonesia

Tel : +(6221) 2598 6888 Fax : +(6221) 2598 6777

RHB OSK (China) Investment Advisory Co. Ltd.

(formerly known as OSK (China) Investment Advisory Co. Ltd.)

Suite 4005, CITIC Square 1168 Nanjing West Road

Shanghai 20041 China

Tel : +(8621) 6288 9611 Fax : +(8621) 6288 9633

RHB OSK Indochina Securities Limited

(formerly known as OSK Indochina Securities Limited) No. 1-3, Street 271

Sangkat Toeuk Thla, Khan Sen Sok Phnom Penh

Cambodia Tel: +(855) 23 969 161 Fax: +(855) 23 969 171

Bangkok

RHB OSK Securities (Thailand) PCL

(formerly known as OSK Securities (Thailand) PCL) 10th Floor, Sathorn Square Office Tower

98, North Sathorn Road,Silom Bangrak, Bangkok 10500

Thailand Tel: +(66) 862 9999 Fax : +(66) 108 0999

Thai Institute of Directors Association (IOD) – Corporate Governance Report Rating 2013

ADVANC BCP CPF ERW IVL NKI PS ROBINS SCB SNC TCAP TMB UV AOT BECL CPN GRAMMY KBANK NOBLE PSL RS SCC SPALI THAI TNITY VGI ASIMAR BKI CSL HANA KKP PAP PTT S&J SCSMG SPI THCOM TOP WACOAL BAFS BROOK DRT HEMRAJ KTB PG PTTEP SAMART SE-ED SSI THRE TRC BANPU BTS DTAC ICC LPN PHOL PTTGC SAMTEL SIM SSSC TIP TRUE BAY CIMB EASTW INTUCH MCOT PR QH SAT SIS SVI TASCO TTW BBL CK EGCO IRPC MINT PRANDA RATCH SC SITHAI SYMC TKT TVO

2S AYUD CNT GL KKC MBK OISHI SABINA STANLY TK TTCL zZMICO ACAP BEC CPALL GLOW KSL MBKET PB SAMCO STEC TLUXE TUF AF BFIT CSC GOLD KWC MFC PDI SCCC SUC TMILL TWFP AHC BH DCC GSTEL L&E MFEC PE SCG SUSCO TMT TYM AIT BIGC DELTA GUNKUL LANNA MODERN PF SEAFCO SYNTEC TNL UAC AKP BJC DTC HMPRO LH MTI PJW SFP TASCO TOG UMI AMANAH BLA ECL HTC LHBANK NBC PM SIAM TCP TPC UMS AMARIN BMCL EE IFEC LHK NCH PPM SINGER TF TPCORP UP AMATA BWG EIC INET LIVE NINE PPP SIRI TFD TPIPL UPOIC AP CCET ESSO ITD LOXLEY NMG PREB SKR TFI TRT UT APCO CENTEL FE JAS LRH NSI PRG SMT THANA TRU VIBHA APCS CFRESH FORTH JUBILE LST NWR PT SNP THANI TSC VIH ASIA CGS GBX KBS MACO OCC PYLON SPCG THIP TSTE VNG ASK CHOW GC KCE MAJOR OFM QTC SPPT TICON TSTH VNT ASP CM GFPT KGI MAKRO OGC RASA SSF TIPCO TTA YUASA *** PHATRA was voluntarily delisted from the Stock Exchange of Thailand effectively on September 25,2012

A BCH CRANE FPI IT MBAX PICO SGP TBSP TPP WIN AAV BEAUTY CSP FSS JMART MDX PL SIMAT TCCC TR WORK AEC BGI CSR GENCO JMT PRINC POST SLC TEAM TTI AEONTS BLAND CTW GFM JTS MJD PRECHA SMIT TGCI TVD AFC BOL DEMCO GJS JUTHA MK PRIN SMK TIC TVI AGE BROCK DNA GLOBAL KASET MOONG Q-CON SOLAR TIES TWZ AH BSBM DRACO HFT KC MPIC QLT SPC TIW UBIS AI CHARAN EA HTECH KCAR MSC RCI SPG TKS UEC AJ CHUO EARTH HYDRO KDH NC RCL SRICHA TMC UOBKH AKR CI EASON IFS KTC NIPPON ROJNA SSC TMD UPF ALUCON CIG EMC IHL KWH NNCL RPC STA TMI UWC ANAN CITY EPCO ILINK LALIN NTV SCBLIF SUPER TNDT VARO ARIP CMR F&D INOX LEE OSK SCP SVOA TNPC VTE AS CNS FNS IRC MATCH PAE SENA SWC TOPP WAVE BAT-3K CPL FOCUS IRPC MATI PATO SF SYNEX TPA WG *** CIMBI was voluntarily delisted from the Stock Exchange of Thailand effectively on September 25, 2012.

IOD (IOD Disclaimer)

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

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