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7/31/2019 JSMR 05Jan2012
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7/31/2019 JSMR 05Jan2012
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Jasa MargaJanuary 5, 2012
2
PEER COMPARISON
Research CoverageBloomberg Code Market Recommendation Mkt Cap US$m Price Target Price Upside
Jasa Marga JSMR IJ ID OUTPERFORM 3,253 4,375 5,500 25.7%
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
Jan-07 Jan-08 Jan-09 Jan-10 Jan-11
Rolling P/BV (x)
Jasa Marga
0
5
10
15
20
25
30
35
40
45
50
Jan-07 Jan-08 Jan-09 Jan-10 Jan-11
Rolling FD Core P/E (x)
Jasa Marga
0%
3%
5%
8%
10%
13%
15%
18%
20%
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12
Peer Average: P/BV vs Recurring ROE
Rolling P/BV (x) (lhs) Recurring ROE (rhs)
-60%
-38%
-16%
6%
28%
50%
72%
94%
116%
138%
160%
0
5
10
15
20
25
30
35
40
45
50
Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12
Peer Average: FD Core P/E vs FD Core EPS Growth
Rolling FD Core P/E (x) (lhs) FD Core EPS Growth (rhs)
ValuationFD Core P/E (x) P/BV (x) EV/EBITDA (x)
Dec-10 Dec-11 Dec-12 Dec-10 Dec-11 Dec-12 Dec-10 Dec-11 Dec-12
Jasa Marga 25.27 20.46 19.58 3.84 3.51 3.26 14.53 12.50 12.11
Growth and ReturnsFD Core EPS Growth Recurring ROE Dividend Yield
Dec-10 Dec-11 Dec-12 Dec-10 Dec-11 Dec-12 Dec-10 Dec-11 Dec-12
Jasa Marga 32.4% 23.5% 4.5% 15.8% 17.9% 17.2% 2.00% 2.37% 2.93%
SOURCE: CIMB, COMPANY REPORTS
Calculations are performed using EFA Monthly Interpolated Annualisation and Aggregation algorithms to December year ends
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In line with recently
announced FY11 revenue of
Rp4.9tr. Tariff hikes in 4Q11
should have been
responsible, among others
75% probability for therealisation of capex in 2012,
going by history
Share price infoShare px perf. (%) 1M 3M 12M
Relative 11.7 0.4 20.2
Absolute 15.1 19.9 24.1
Major shareholders % held
Indonesian Government 70
0%
3%
5%
8%
10%
13%
15%
18%
20%
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12
P/BV vs Recurring ROE
Rolling P/BV (x) (lhs) Recurring ROE (rhs)
-50%-25%0%25%50%75%100%125%150%175%200%
05
101520253035404550
Jan-07 Jan-08 Jan -09 Jan-10 Jan-11 Jan-12
FD Core P/E vs FD Core EPS Growth
Rolling FD Core P/E (x) (lhs) FD Core EPS Growth (rhs)
Profit & Loss(Rpb) Dec-09A Dec-10A Dec-11F Dec-12F Dec-13F
Revenue 3,692 4,379 4,964 5,327 6,235
Cost Of Sales (1,528) (1,647) (1,793) (1,897) (2,229)
Gross Profit 2,164 2,732 3,171 3,430 4,006
Total Operating Costs (647.8) (743.8) (772.6) (848.8) (932.2)
Operating Profit 1,516 1,988 2,398 2,581 3,074
Operating EBITDA 1,871 2,413 2,817 3,044 3,551
Depreciation And Amortisation (354.5) (424.9) (419.2) (463.4) (477.7)
Operating EBIT 1,516 1,988 2,398 2,581 3,074
Net Interest Income (445.5) (532.1) (548.0) (588.7) (478.1)
Exchange Gains - - - - -
Other Income 23.13 20.21 0.00 0.00 0.00
Associates' Profit - - - - -
Profit Before Tax (pre-EI) 1,094 1,476 1,850 1,992 2,596
Exceptional Items 125.0 0.0 0.0 0.0 0.0
Pre-tax Profit 1,219 1,476 1,850 1,992 2,596Taxation (211.7) (291.9) (401.0) (469.7) (588.5)
Profit After Tax 1,007 1,184 1,449 1,523 2,007
Minority Interests (14.51) 8.99 4.85 (3.09) (35.55)
Net Profit 993 1,193 1,454 1,520 1,972
Recurring Net Profit 889 1,177 1,454 1,520 1,972
Cash Flow
(Rpb) Dec-09A Dec-10A Dec-11F Dec-12F Dec-13F
Pre-tax Profit 1,219 1,476 1,850 1,992 2,596
Depreciation And Non-cash Adj. 800 957 967 1,052 956Change In Working Capital (23.5) (67.7) 128.4 2.5 4.0
Tax Paid 211.7 291.9 401.0 469.7 588.5
Other Operating Cashflow (793) (980) (1,439) (1,214) (1,564)
Cashflow From Operations 1,414 1,677 1,908 2,302 2,580
Capex (1,597) (1,981) (1,192) (2,758) (2,071)
Disposals Of FAs/subsidiaries - - - - -
Acq. Of Subsidiaries/investments 0.00 43.83 0.00 0.00 0.00
Other Investing Cashflow 177.5 12.5 0.0 0.0 0.0
Cash Flow From Investing (1,420) (1,925) (1,192) (2,758) (2,071)
Debt Raised/(repaid) 351 1,557 (6) 970 (280)
Equity Raised/(Repaid) - - - - -
Dividends Paid (381.5) (656.8) (706.3) (872.5) (911.8)
Net Cash Interest - - - - -
Other Financing Cashflow (26.68) 45.15 0.00 0.00 0.00
Cash Flow From Financing (57) 945 (712) 97 (1,192)
Total Cash Generated (63.2) 697.6 3.3 (358.5) (682.4)
Change In Net Cash (414) (859) 9 (1,328) (402)
Free Cashflow To Equity 345 1,309 710 514 229
BY THE NUMBERS
SOURCE: CIMB, COMPANY REPORTS
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The company should start
leveraging in 2012, by a
modest Rp1tr
Balance Sheet
(Rpb) Dec-09A Dec-10A Dec-11F Dec-12F Dec-13F
Fixed Assets 11,507 13,695 14,467 16,762 18,355
Intangible Assets 385.3 499.3 499.3 499.3 499.3
Other Long Term Assets 851.9 668.2 668.2 668.2 668.2
Total Non-current Assets 12,744 14,862 15,635 17,930 19,522
Total Cash And Equivalents 3,314 4,012 3,847 3,170 2,388
Inventories - - - - -
Accounts Receivable 64.7 23.6 81.4 87.4 102.4
Other Current Assets 51.66 54.92 54.92 54.92 54.92
Total Current Assets 3,430 4,090 3,984 3,312 2,546
Trade Creditors 103.7 130.3 59.8 63.2 74.3
Short-term Debt 2,183 1,439 164 414 1,133
Other Current Liabilities 679.2 908.6 908.6 908.6 908.6
Total Current Liabilities 2,966 2,478 1,132 1,385 2,116
Total Long-term Debt 4,586 7,258 8,528 9,247 8,247
Other Liabilities 467.1 452.6 452.6 452.6 452.6
Deferred Tax 409.8 404.0 404.0 404.0 404.0
Total Non-current Liabilities 5,462 8,114 9,384 10,104 9,104
Shareholders' Equity 7,183 7,740 8,488 9,135 10,195
Minority Interests 562.1 619.5 614.6 617.7 653.2
Preferred Shareholders Funds
Total Equity 7,745 8,359 9,102 9,753 10,848
Key Drivers
Dec-09A Dec-10A Dec-11F Dec-12F Dec-13F
Avg daily traffic grth (%, main) 3.8% 3.8% 7.0% 1.8% 3.6%
Base tollrate/km (% chg, main) N/A N/A N/A N/A N/A
Base tollrate/vehicle (%chg, main) 5.4% 14.2% 6.1% 5.4% 13.1%
Avg daily traffic grth (%, 2ndary) N/A N/A N/A N/A N/A
Base tollrate/km (% chg, 2ndary) N/A N/A N/A N/A N/A
Base tollrate/vehicle (%chg, 2ndary) N/A N/A N/A N/A N/A
Avg daily traffic grth (%, tertiary) N/A N/A N/A N/A N/A
Base tollrate/km (% chg, tertiary) N/A N/A N/A N/A N/A
Base tollrate/vehicle (%chg, tertiary) N/A N/A N/A N/A N/A
BY THE NUMBERS
Key Ratios
Dec-09A Dec-10A Dec-11F Dec-12F Dec-13F
Revenue Growth 10.1% 18.6% 13.4% 7.3% 17.0%
Operating EBITDA Growth 9.9% 29.0% 16.8% 8.1% 16.6%
Operating EBITDA Margin 50.7% 55.1% 56.8% 57.2% 57.0%
Net Cash Per Share (Rp) (508) (689) (712) (955) (1,028)
BVPS (Rp) 1,056 1,138 1,248 1,343 1,499
Gross Interest Cover 2.04 2.60 3.50 4.17 5.06
Tax Rate 17.4% 19.8% 21.7% 23.6% 22.7%
Net Dividend Payout Ratio 35.6% 49.9% 48.6% 57.4% 46.2%
Accounts Receivables Days 4.78 3.68 3.86 5.80 5.56
Inventory Days - - - - -
Accounts Payables Days 18.06 25.93 19.35 11.86 11.26
ROIC (%) 11.1% 12.3% 13.1% 12.4% 13.3%
ROCE (%) 13.3% 14.1% 14.5% 14.0% 16.2%
SOURCE: CIMB, COMPANY REPORTS
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Opening the way1. OUTLOOK
1.1 Road growth of 32% by 2015Upon the completion of its nine projects by 2015/16, Jasa Margas toll assetscould lengthen by 32% to 763km of the total roads under operation. The newland law has substantial ramifications for Jasa Marga, whose projects are in theprocess of acquiring land (70% of total length). Jasa Marga is negotiating withthe government for financial support for Stage 2 development of Semarang-Solo.
This will comprise 49.5km of new roads of 68% of the total new roads in theSemarang-Solo section.
Figure 1: Jasa Margas toll-road evolution
410 410 410448 448 448 463 463 463
481
536 536 536 536 545 555581 581 581 581 581
10
159
272
0
100
200
300
400
500
600
700
800
900
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
km
Jasa Marga existing operation Jasa Marga new project
SOURCES: CIMB, COMPANY REPORTS
1.2 ConstructionJasa Marga has a number of projects set for groundbreaking: three in 4Q11, two
in Jan 12 and potentially two more in 2012. According to our calculations, atleast Rp8tr worth of contracts have started construction at end-2011 or couldstart in 2012.
Table of Contents1. OUTLOOK p.5
2. VALUATION AND RECOMMENDATION p.9
Notes from the Field
The land acquisition lawstates, more clearly anddecisively, that thegovernment is obliged to
provide land.
Frans Sunito, CEO
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Figure 2: 2012 construction
Operating
Underconstruction Undeveloped
Semarang Solo Stage 1 Section 2 14.1 12.5 49.6 3Q13 Ground breaking Nov11
Gempol-Pasuruan Section 1 - 13.9 20.3 1Q14 Start 1Q12
Bogor Ring Road Section 2A 3.8 2.0 5.2 1Q14 Start Jan12
Nusa Dua Benoa - 9.7 9.7 2013 Started cons truction Dec11
JORR W2 - 7.6 7.6 2013 Started cons truction Oct11
Surabaya-Mojokerto Section 4 2.3 18.5 15.5 2013 Potentially starting construction 2012
Gempol-Pandaan Section 1 - 3.0 10.6 1Q14 Potentially starting construction 1Q12
Length (km)
Project
Operation
date Notes
0 SOURCES: CIMB, COMPANY REPORTS
1.3 Single operator
Jasa Marga has ongoing cost-management programmes such as zero employeegrowth and early retirement plans. Longer term, we believe it will continue toconsolidate toll-road sections where it has market leadership of networks.
Jasa Marga has the largest market share of close to 75% (50% by 2015,assuming the completion of Trans Java and JORR 2). It has also been acquiringnew projects that are adjacent to its existing projects. Jasa Marga is also knownto have minority shares in several operating toll-road sections all over thenation.
Trans Java. Jasa Marga is responsible for two projects in the Trans Javanetwork (20% market share) that are in various project stages. It had deliveredthe first section of Semarang-Solo and Surabaya-Mojokerto in 2011. The lattercontributed to 9M11 revenue. Surabaya-Mojokerto is in a much more advanced
stage being a shorter toll road and is set for completion in 2014. Semarang-Solois still the subject of discussions, particularly for its second stage. Feasibility willrequire government support. Jasa Marga is negotiating for Rp2tr of capitalinjection by the government for the remaining 49.5km of the toll road.
Figure 3: Trans Java network
1. CikampekPalimanan
(116km) Investor:PLUS
Expressway(55%)
2. PalimananKanci(28.8km
Operate1998)
Investor:JasaMarga(100%)
3. KanciPejagan(35km
operate2010)
Investor:BakrieTollRoad
4. PejaganPemalang
(57.5km)
Investor:BakrieTollRoad
5. Pemalang Batang
(39km)
Investor:BakrieTollRoad
6. BatangSemarang(75km)
Investor:BakrieTollRoad
(potential)
7A. SemarangBawen(23km
Operate2011)
Investor:JasaMarga(60%)
7B. BawenSolo(49km)
Investor:Jasamarga
(60%)
8. SoloKertosono
(118km)
Investor:Thiess
9. KertosonoMojokerto
(41km)
Investor:Astratel
10. Surabaya
Mojokerto(34km
Operate1stsection
2011)
Investor:JasaMarga
(55%)
SOURCES: CIMB, BJPT
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Greater Surabaya. Jasa Marga is building a toll road adjacent to its Surabayatoll network. It has operated Surabaya Gempol for 27 years and will add twoextensions in the fork: Gempol-Pandaan and Gempol-Pasuruan. Both will be
under construction in 2012. Groundbreaking for Gempol-Pandaan should takeplace in Jan 12.
JORR 2. Two of Jasa Margas toll sections in JORR 2 are set for operation in1H14, assuming 1.5 years of construction, with a total length of 26.4km. At thecurrent pace of land acquisition and taking into account the new land law, thetwo sections should finish land clearing by 3Q12 and directly start constructionthereafter.
Figure 4: JORR 2 network
2.KunciranSerpong
(11.2km)Investor:JasaMarga
andAstratel
3.SerpongCinere
(10.1km)
Investor:ThiessWaskita
1.Kunciran
Cengkareng (15.2km)
Investor:JasaMarga
4.Cinere Cimanggis
(14.7km)
Investor:Kompas
Waskita
5.Cimanggis
Cibitung(25.4km)
Investor:BakrieToll
Road(potential)
6.Cibitung
Cilincing(34.5km)
Investor:MTD
7.TjPriokAcess(12km)
Investor:Departmentof
PublicWorks
SOURCES: CIMB, BJPT
There are several other projects in the Trans Java and JORR 2 networks thatinterest Jasa Marga. However, with the current pipeline, we think acquisitionswill happen later than sooner unless the government intervenes, such as inTrans Java.
1.4 More to come after 2015We think Jasa Margas premium should continue after 2015 considering thenumber of projects that the government is offering. Aside from Trans Java andJORR 2, the government has announced 2,000 km of toll roads for Sumateraand Kalimantan (not included in the table below). Combined with balance-sheetcapability, we believe Jasa Marga will continue to acquire new projects.
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Figure 5: Jasa Marga has yet to announce any intention to participate in the following projects
Length
(Rpbn) (US$m) (km) Investment tender
Land acquisition
process
Priority project Medan-Kualanamu 1,350 150 18 Project award
As of Dec11 is on financial
closing process
Palembang-Indralaya 1,053 117 22 Tender preparation
Tegineneng-Babatan 2,727 303 50 Tender preparation
Medan-Binjai 1,293 144 16 Tender preparation
Cileunyi-Dawuan 5,102 567 59 Tender preparation
PPP project with soft loan from
China
Sukabumi-Ciranjang 1,856 206 28 Tender preparation
Pasirkoja-Soreang 1,022 114 15 Tender preparation Finalized in 2011
Pandaan-Malang 2,528 281 38 Tender preparation Ongoing
Kemayoran-Kampung Melayu 6,954 773 10
Sunter-Batu Ceper 9,761 1,085 23
Ulujami-Tanah Abang 4,255 473 8Ps. Minggu-Casablanca 5,720 636 10
Sunter-Tembelang 7,378 820 26
Duri Pulo-Kampung Melayu 5,960 662 11
Terusan Pasteur-Gedebage 6,917 769 27
Potential project Pekanbaru-Dumai 8,446 938 135 Govt proposal
Manado-Bitung 5,612 624 46 Govt proposal
Kisaran-Bukit Tinggi 5,280 587 60 Feasibility study
Bukit Tinggi-Padang 10,230 1,137 55 Feasibility study
Terbanggi Besar-Pematang Panggan 5,780 642 100 Feasibility study
Bakauheni-Terbanggi Besar 8,200 911 1,000 Feasibility study
Cilegon-Bojonegara 920 102 16 Feasibility study
Kamal-Batu Ceper 3,590 399 32 Feasibility study
Gede Bage-Majalaya 900 100 13 Feasibility study
Semarang-Demak 296 33 24 Feasibility study
Yogyakarta-Bawen 6,085 676 104 Feasibility study
Yogyakarta-Solo 2,330 259 40 Feasibility study
Bandara Juanda-Tj. Perak 5,030 559 23 Feasibility study
Probolinggo Banyuwangi 8,000 889 170 Feasibility study
Batu Ampar-Bandara Hang Nadim 2,200 244 25
Tota l 136,773 15,197 2,203
Fit and proper evaluation; Govt
endorsed
Link
Investment cost Status
Remarks
Invesment Tender
The project is of high interest
from Jakarta municipal Govt.
Most likely will create aconsortium to handle Rp40tr
work with Jaya Real and Jaya
Konstruksi (JRPT and JKON)
Tender preparation
at feasibility study
SOURCES: CIMB, BJPT
1.5 Working up the balance sheetThe company should start to gear up significantly in 2012 for constructionworking capital. It may need to spend at least Rp4.2tr in 2012 (21% of its assets),assuming construction is divided evenly between 2012 and 2013. With DER of70% per project, it may have to raise Rp2.7tr annually in 2012/13, bringing itsgearing to 1x and 1.3x respectively (9M11: 0.6x).
2. VALUATION AND RECOMMENDATION
2.1 Premiums justifiedWe are keeping our forecasts for FY11-12 and adjusting for higher debt in 2013.We are keeping our DCF target price as we have started including new toll roadsin Bali from 2014 onwards. The project has one of the better IRRs, based on ourcalculations, due to its higher tariff base.
The company is trading at 17x P/E CY12 vs. regional peers 9.8x. We believe thepremium is justified by growth prospects. Our current 5-year net-profit CAGRestimate is 24% (FY11-16) vs. 9% for selected regional players.
Our target price is derived from DCF valuation after applying a discount of 45%to NPV. We may remove this discount upon the completion and operation of itsprojects, as risks dwindle.
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Figure 6: Growth to accelerate in 2015/16
0.75 0.97 0.80 0.58 0.38
20.4619.58
15.09
11.76
9.79
0.00
0.20
0.40
0.60
0.80
1.00
1.20
0
5
10
15
20
25
2011 2012 2013 2014 2015
PEG at current price (RHS) PER SOURCES: CIMB, COMPANY REPORTS
Figure 7: Sector Comparisons
Price Tgt Px Mkt Cap P/BV (x) Div. Yield (%)
(local curr) (local curr) (US$ m) CY2012 CY2013 CY2012 CY2012
Jasa Marga JSMR IJ Outperform 4,375 5,500 3,253 19.6 13.9 3.45 3%
Bangkok Expressways BECL TB NR 18.10 n.a. 443 9.8 8.1 0.70 7%
Average (all) 14.7 11.0 2.1 5%
Company Bloomberg Ticker Recom.Core P/E (x)
SOURCES: CIMB, BLOOMBERG
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This publication is strictly confidential and is for private circulation only to clients of CIMB. This publication is being supplied to you strictly on the basis that it will remain confidential. No partof this material may be (i) copied, photocopied, duplicated, stored or reproduced in any form by any means or (ii) redistributed or passed on, directly or indirectly, to any other person in
whole or in part, for any purpose without the prior written consent of CIMB.New Zealand: In New Zealand, this report is for distribution only to persons whose principal business is the investment of money or who, in the course of, and for the purposes of theirbusiness, habitually invest money pursuant to Section 3(2)(a)(ii) of the Securities Act 1978.
Singapore: This report is issued and distributed by CIMB Research Pte Ltd (CIMBR). Recipients of this report are to contact CIMBR in Singapore in respect of any matters arising from,or in connection with, this report. The views and opinions in this research report are our own as of the date hereof and are subject to change. If the Financial Services and Markets Act ofthe United Kingdom or the rules of the Financial Services Authority apply to a recipient, our obligations owed to such recipient therein are unaffected. CIMBR has no obligation to update
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its opinion or the information in this research report.
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As of January 4, 2012, CIMB Research Pte Ltd does not have a proprietary position in the recommended securities in this report.
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Corporate Governance Report:
The disclosure of the survey result of the Thai Institute of Directors Association (IOD) regarding corporate governance is made pursuant to the policy of the Office of the Securities andExchange 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 Investment disclosed
to the public and able to be accessed by a general public investor. The result, therefore, is from the perspective of a third party. It is not an evaluation of operation and is not based oninside 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 date. CIMBS doesnot confirm nor certify the accuracy of such survey result.
Score Range 90 100 80 89 70 79 Below 70 or No Survey Result
Description Excellent Very Good Good N/A
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United Kingdom: This report is being distributed by CIMB Securities (UK) Limited only to, and is directed at selected persons on the basis that those persons are (a) persons falling withinArticle 19 of the Financial Services and Markets Act 2000 (Financial Promotions) Order 2005 (the Order) who have professional experience in investments of this type or (b) high networth entities, and other persons to whom it may otherwise lawfully be communicated, falling within Article 49(1) of the Order, (all such persons together being referred to as relevantpersons). A high net worth entity includes a body corporate which has (or is a member of a group which has) a called-up share capital or net assets of not less than (a) if it has (or is a
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Other jurisdictions: In any other jurisdictions, except if otherwise restricted by laws or regulations, this report is only for distribtion to professional, institutional or sophisticated investorsas defined in the laws and regulations of such jurisdictions.
Recommendation Framework #1 *
Stock SectorOUTPERFORM: The stock's total return is expected to exceed a relevantbenchmark's total return by 5% or more over the next 12 months.
OVERWEIGHT: The industry, as defined by the analyst's coverage universe, isexpected to outperform the relevant primary market index over the next 12 months.
NEUTRAL: The stock's total return is expected to be within +/-5% of a relevantbenchmark's total return.
NEUTRAL: The industry, as defined by the analyst's coverage universe, is expectedto perform in line with the relevant primary market index over the next 12 months.
UNDERPERFORM: The stock's total return is expected to be below a relevantbenchmark's total return by 5% or more over the next 12 months.
UNDERWEIGHT: The industry, as defined by the analyst's coverage universe, isexpected to underperform the relevant primary market index over the next 12 months.
TRADING BUY: The stock's total return is expected to exceed a relevantbenchmark's total return by 5% or more over the next 3 months.
TRADING BUY: The industry, as defined by the analyst's coverage universe, isexpected to outperform the relevant primary market index over the next 3 months.
TRADING SELL: The stock's total return is expected to be below a relevantbenchmark's total return by 5% or more over the next 3 months.
TRADING SELL: The industry, as defined by the analyst's coverage universe, isexpected to underperform the relevant primary market index over the next 3 months.
* This framework only applies to stocks listed on the Singapore Stock Exchange, Bursa Malaysia, Stock Exchange of Thailand and Jakarta Stock Exchange. Occasionally, it is permitted for the total expected
returns to be temporarily outside t he prescribed ranges due to extreme market volatility or other justifiable company or industry-specific reasons.
CIMB Research Pte Ltd (Co. Reg. No. 198701620M)
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Recommendation Framework #2 **
Stock Sector
OUTPERFORM: Expected positive total returns of 15% or more over the next 12months.
OVERWEIGHT: The industry, as defined by the analyst's coverage universe, has ahigh number of stocks that are expected to have total returns of +15% or better over
the next 12 months.
NEUTRAL: Expected total returns of between -15% and +15% over the next 12months.
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 returnsthat will range from +15% to -15%; both over the next 12 months.
UNDERPERFORM: Expected negative total returns of 15% or more over the next 12months.
UNDERWEIGHT: The industry, as defined by the analyst's coverage universe, has ahigh number of stocks that are expected to have total returns of -15% or worse overthe next 12 months.
TRADING BUY: Expected positive total returns of 15% or more over the next 3months.
TRADING BUY: The industry, as defined by the analyst's coverage universe, has ahigh number of stocks that are expected to have total returns of +15% or better overthe next 3 months.
TRADING SELL: Expected negative total returns of 15% or more over the next 3months.
TRADING SELL: The industry, as defined by the analyst's coverage universe, has ahigh number of stocks that are expected to have total returns of -15% or worse overthe next 3 months.
** This framework only applies to stocks listed on the Hong Kong Stock Exchange and China listings on the Singapore Stock Exchange. Occasionally, it is permitted for the total expected returns to be temporarily
outside the prescribed ranges due to extreme market volatility or othe r justifiable company or industry-specific reasons.
Corporate Governance Report of Thai Listed Companies (CGR). CG Rating by the Thai Institute of Directors Association (IOD) in 2010.
ADVANC - Excellent, AMATA - Excellent, AOT - Excellent, AP - Very Good, BANPU - Excellent , BAY - Excellent , BBL - Very Good, BCP - Excellent, BEC - Very Good, BECL -Excellent, BGH - Very Good, BH - Very Good, BIGC - Very Good, BTS - Good, CCET - Very Good, CK - Very Good, CPALL - Very Good, CPF - Excellent, CPN - Excellent, DELTA -Very Good, DTAC - Very Good, GLOBAL - not available, GLOW - Very Good, HANA - Very Good, HEMRAJ - Excellent, HMPRO - Very Good, ITD - Very Good, IVL - not available,KBANK - Excellent, KTB - Excellent, LH - Very Good, LPN - Excellent, MAJOR - Very Good, MCOT - Excellent, MINT - Very Good, PS - Very Good, PSL - Excellent, PTT -Excellent, PTTAR - Excellent, PTTCH - Excellent, PTTEP - Excellent, QH - Very Good, RATCH - Excellent, ROBINS - Excellent, ROJNA - Very Good, SAMART - Excellent,SAMTEL - Excellent, SCB - Excellent, SCC - Excellent, SCCC - Very Good, SIRI - Very Good, SPALI - Very Good, STA - Good, STEC - Very Good, TASCO - Very Good, THAI -Very Good, TMB - Excellent, TOP - Excellent, TRUE - Very Good, TTA - Excellent, TTW - Very Good, TUF - Very Good.