2013 Asia Research Outlook

Deutsche Bank does and seeks to do business with companies covered in its research reports. Thus, investors should be aware that the firm may have a conflict of interest that could affect the objectivity of this report. Investors should consider this report as only a single factor in making their investment decision. DISCLOSURES AND ANALYST CERTIFICATIONS ARE LOCATED IN APPENDIX 1. MICA(P) 072/04/2012

Dear Client, We are pleased to present our 2013 Asia Outlook highlighting our views on all the major sectors and countries across the region. These summary views come from our team of experienced analysts with strong local market knowledge. We have ranked senior analysts located in 13 major Asian cities (ex-Japan) and cover more than 1,000 stocks. Our Country and Sector views are extremely well supported y a best-in-class macro & strategy gy team and our stock views benefit tremendously y from by cooperation within sectors on both a regional and global level as evident in the numerous FITT (Fundamental, Industry, Thematic, Thought Leading) reports published last year. Furthermore, our widespread geographical presence allows our analysts to develop strong local relationships, understand micro trends and spend more time with their corporates. These relationships underpin our Corporate Access offering: Our annual conference line-up features flagship events such as dbAccess Asia in Singapore; dbAccess China in Beijing; and dbAccess India in Mumbai. We look forward to seeing you at one (and hopefully more) of these events in 2013. 2012 was both interesting and challenging in equal measure but our team is generally upbeat going into 2013 given our expectations for lower policy uncertainty in the key economies, a recovery in economic growth from cyclical lows across the region and reasonable equity valuations. As such, we would very much like to take this opportunity to wish you all the very best for 2013 and to thank you for all your support over recent years. Please contact us should you have any research-related questions or feedback for our team and full contact details for our team heads are contained at the back of this report. report Best regards,

g Lynch Fergus Head of Asia Pacific Research

David Clark Head of Asia Ex-Japan Equity Research

William Bratton Assoc Director, Asia ExJapan Equity Research

Table of Contents
Macro / Strategy gy
Economics Equity Strategy FX & Rates Credit Strategy Quantitative Research p6 p7 p8 p9 p10

Countries
Australia A t li China Hong Kong India Indonesia Malaysia Philippines Singapore South Korea Taiwan Thailand p12 12 p13 p14 p15 p16 p17 p18 p19 p p20 p21 p22

Sectors
Autos Banks Conglomerates Consumer Gaming Healthcare Industrials Infrastructure Insurance Internet Metals & Mining Oil & Gas Power Property Small Cap Tech Hardware Tech IT Services & Software Tech Semis Telco Transport p24 p25 p26 p p27 p28 p29 p30 p31 p32 p33 p34 p35 p36 p37 p38 p39 p40 p41 p42 p43

Contact details

p44

Global FITT Research

Asia FITT Research

Macro/Strategy

Economics
The e Outlook Out oo
The difficult negotiations regarding the US fiscal cliff highlight the struggle the G3 face in reducing government debt and deficits. The risks this process poses for Asia are high given the regions exposure to global growth. But our baseline forecast for 2013/14 is one of progressively stronger growth abroad and in Asia We are especially bullish on China and see the Asia. more export-sensitive economies of Hong Kong, Singapore, South Korea and Taiwan as also likely to see much stronger growth. Conversely, we expect growth in ASEAN ex-Singapore will remain stable. The recovery in India will be less impressive than in China, but our forecasts are above consensus there too. With stronger growth, however, will likely come hi h higher i fl i inflation. W We expect exchange h rate appreciation will be the main anti-inflation policy tool, but expect rate hikes to resume, led by the Philippines, Indonesia and Thailand. India and Sri Lanka conversely, are expected to cut rates by 100bps and 75bps, respectively. Key risks to the region are the possibility of higher food price inflation and the risk that an aggressive reflationary policy in Japan might lead to a sharp JPY depreciation, undercutting other countries export competitiveness.

The Team
Chief Economist, Asia-Pacific - Michael Spencer Australia - Adam Boyton, Philip Odonaghoe HK / Chi China - Jun J Ma, M Mi Michael h lS Spencer, Li Lin Li India - Taimur Baig, Kaushik Das Indonesia - Taimur Baig Malaysia - Michael Spencer New Zealand - Darren Gibbs Philippines - Taimur Baig Singapore - Michael Spencer South Korea - Juliana Lee Taiwan - Juliana Lee Thailand - Juliana Lee Vietnam - Juliana Lee

Equity Strategy
The e Outlook Out oo
Asian equities should have a decent run in 2013, after being in a stealth bull market in 2012. While investors are weary of analyzing the policy zig-zags and weekend communiqus of the past few years, a key theme this year is likely to be a drop in economic policy uncertainty. This is a key driver of equity performance the stock-picking performance, stock picking opportunity and the relative performance of more cyclical stocks with less pristine balance sheets. It also means that the sin stock bubble might pop. We think that Asian margins should surprise positively as the terms of trade improve and we see a cyclical low in economic activity by early 2013. At the A h same time, i valuations l i f Asia for A i look l k reasonable bl 0.63 standard deviations below the long-term average, risk-love (sentiment) is neutral and policy is likely to ease selectively in the region. All these mean that this is a positive environment for equities. We retain our focus on combining value with growth and stay focused on risk-love, trying not to get too excited when it is euphoric, and not too depressed when it is in a panic. As such, we remain overweight on THAILAND & INDIA and underweight on KOREA & TAIWAN, positions that have helped our model portfolio in 2012.

The Team
Head of Equity Strategy - Ajay Kapur Regional - Ajay Kapur, Ritesh Samadhiya, Sanjeev Sanyal Australia - Tim Baker HK / China - Jun Ma, Lin Li India - Abhay Laijawala, Abhishek Saraf Indonesia - Heriyanto Irawan Malaysia - Joe Liew Philippines - Rafael Garchitorena Si Singapore - Greg G L Lui i South Korea - John Kim Taiwan - Joelian Tseng Thailand - Derek Bloomfield

FX & Rates
The e Outlook Out oo
As we ride the QE ship into 2013, there looks to be more left to play for in the Asian rates and currency complex. To be sure, the easing cycle is over in most of Asia and absolute levels of yields are close to, if not at, all time lows. With reduced carry, and the possibility of re-pricing inflation expectations in some of the G3 curves, curves duration is relatively less attractive to hold. But the search for yield in the context of global QE and the pull of credit re-rating for Asian sovereigns, continues to support Asian fixed income. A modest supply outlook, and the appetite from local real money investors to absorb risk in the event of cheapening of spreads, should allow Asian curves to outperform the US in a sell off. Currencies should pick up some of the slack in this diminishing pool of total returns. Asian FX should benefit from capital inflows in the context of global QE, a gradually improving growth outlook, reduction in tail risks and increased accommodation of currency strength by regional central banks. Returns will likely become more differentiated and risks possibly more linked to the shape and form of regulatory intervention. We enter 2013 with a more cautious stance on duration and a more constructive, though discerning, bias on currencies. For cash bond investors, we recommend overweight exposure to India and the Philippines; market weight in China, Indonesia, Malaysia and Thailand; and modest underweight in Korea and Singapore. FX trades we like include buying PHP and CNH (versus USD), and KRW versus JPY. We also favor buying 3M USD/INR RKO puts, and selling SGD versus the NEER.

The Team
Head of FX & Rates - Sameer Goel ASEAN / India - Sameer Goel, Arjun Shetty HK/China/Taiwan - Linan Liu South Korea - Ki Yong Seong Asia FX - Sameer Goel, Mallika Sachdeva

Credit Strategy
The e Outlook Out oo
As we tighten views for the year ahead we remain positive on Asian credit but we expect lower returns than in 2012 and certainly not without some volatility. We expect total returns for investment grade (IG) and high yield (HY) of around 4% and 8% respectively or about 1/3 of 2012s returns (where Asia credit was among the best performing credit markets globally). globally) Navigating market volatility with careful name selection will separate the winners and the losers. Valuations remain supportive. Credit may look less appealing from a yield perspective but the value is in the spread. Long term IG investors are adequately compensated for average default risk but perhaps less so for f HY. HY Asia A i continues i to offer ff an attractive i spread d pick-up relative to the US. In terms of key views: Philippines CDS offers better value than bonds and we prefer Indonesia over Philippines. We prefer Sri Lanka over Vietnam. In IG we buy BBBs but prefer shorter-dated paper. We like Chinese consumer and gas and also see relative value in India. We turn more neutral on China property mainly given valuation and monetary policy expectation. Stay invested in high-beta property credits for early 2013 to gain carry, but we would turn more defensive should the sector yield dip under 8%. We prefer cement names in Industrials and have a Credit Hold on most Indonesia Coal names.

The Team
Head of Asia Credit - Gene Cheon High g Yield Industrials - Devinda Paranathanthri HK/China Property - Jacphanie Cheung Investment Grade - Colin Tan Australia - Anthony Ip

Quant Research
The e Outlook Out oo
As we compute into 2013, it is appropriate to look back to 2012 during which stock pickers expressed preferences by focusing on classic stock characteristics. As such, momentum and short term reversal factors were among the best factors in 2012, as well as value factors including forward earnings yield and sentiment factors such as earnings diffusion. Perhaps most astonishing and remarkable was the emphasis on high yielding stocks. As we head into 2013, the environment remains benign, at least according to the Variance Risk Premium, stock dispersion and the market valuation that we are unable to explain via systematic drivers. According to our multi-factor valuation l i model, d l stocks k in i India I di and d Indonesia, I d i and d in the defensive and consumer cyclical sectors command a premium, whereas stocks in Singapore and Hong Kong, and in real Estate and resources are valued at a discount. Relative to history, Hong Kong and technology stocks look cheaper, whereas stocks in the Philippines and defensives as well as stocks with higher turnover look more expensive. A positive scenario in which market liquidity improves could lead to Chinese multiples expanding relative to the rest of Asia.

The Team
Strategist - Khoi LeBinh Strategist - Ada Lau

10

Countries

11

Australia
The e Outlook Out oo
As we say g'day to 2013 we hold a positive medium-term outlook for Australian equities. The macro backdrop has been plagued by uncertainty and Australian equities' performance has been amongst the worst in history. We expect some degree of mean reversion in 2013 rather than a continuation of such extremes. extremes Equities should be supported by a gradual rise in earnings from below-trend levels, cheap valuations (in PE terms and vs bonds), low gearing vs history and a reduction of investors' U/W positioning (equity exposure is at 15 year lows). We also expect the global policy uncertainty that impacted markets in 2012 to ease in the year ahead. Further, a gradual pick-up i k i Chinese in Chi growth h should h ld be b beneficial b fi i l for f the Australian resources sector. And on the domestic front, recent interest rate cuts should assist earnings in the year ahead. In short, we look for a solid 10% total return for the Australian market in 2013. We prefer exposure to ENERGY, HOUSING and INSURANCE.

The Team
Head of Research Tim King Economics - Adam Boyton, Darren Gibbs, Philip O'Donaghoe Equity Strategy Tim Baker Fixed Income, Credit , FX - David Plank, John Horner, Gus Medeiros, Anthony Ip Environmental, Social & Governance - Tim Jordan Banks, Insurance - James Freeman, Kieren Chidgey, Andrew Triggs Consumer, Gaming Mark Wilson, Michael Simotas, Arie Dekker* Health Care David Low, Stephen Ridgewell* Industrials - Emily Behncke, Mark Wilson, Dennis Lee* Metals & Mining - Paul Young, Brett McKay, Chris Terry Power, Oil/Gas - John Hirjee, Grant Swanepoel,* Hugh Morgan P Property t - Ian I Randall, R d ll Ch Christopher i t h B Byrne,* *J Jason W Weate t Small-Mid Cap - Dominic Rose, Wassim Kisirwani, Jennifer Kruk Telecoms -Vikas Gour, Arie Dekker* Transport & Infra - Cameron McDonald, Craig Wong-Pan
* New Zealand, Craigs Investment Partners

12

China
The e Outlook Out oo
Xin Nian Kuai Le from our China team who expect a good year ahead. Jun expects GDP growth to accelerate to 8.5% in 2H13 from 8.0% in 1H13 & 7.6% in 2H12 driven by corporate & infrastructure investment and a rebound in export growth in 2H13. Valuations look supportive (fwd P/E of 10.3x) and we see 15% upside to MSCI-China. MSCI China Key 2013 investment themes include: 1) growth recovery: cement, construction, infrastructure machinery, and shipping companies will likely outperform, as the recovery will be led mainly by investment and exports; 2) resource pricing reform: power, gas, water and oil refineries will be the main beneficiaries; 3) VAT reform, social spending, and urbanization: b i i h l h care and health d construction i will ill enjoy j the resulting upside potential; 4) NPL cycle: banks may continue to underperform for 1H13 given that the NPL ratio will likely rise further until Q3; 5) capacity rationalization: coal and steel will likely underperform cement due to slower pace of capacity rationalization; and 6) anti-corruption: Macau VIP gaming, watches, gift card sales at department stores will likely suffer from the new governments anti-corruption campaign. Based largely on these themes we like: BOC, SINOPEC, PING AN, UNICOM, COLI, CCC, HUANENG POWER, CR CEMENT, CSCL & MINDRAY.

The Team (HK/China)

Head of Research - Michael Tong Chief Economist & Strategist - Jun Ma

Economics & Strategy - Jun Ma, Lin Li Autos - Vincent Ha, Nora Min Banks Insurance - Tracy Yu Banks, Yu, Esther Chwei Chwei, Judy Zhang Zhang, Sophia Lee Conglomerates - Karen Tang, Michael Tong Consumer - Anne Ling, Lydia Ling Gaming - Karen Tang Health Care - Jack Hu Infrastructure / Industrials - Michael Tong, Joe Liew, Phyllis Wang Internet - Alan Hellawell, Alex Yao Metals & Mining - James Kan, Johnson Wan, Laura Zhai Oil/Gas - David Hurd Power/Utilities - Michael Tong, Eric Cheng, Kai-ting Wong Property - Tony Tsang, Jason Ching Small-Mid Cap - Vivian Hao Telecoms - Alan Hellawell Transport - Joe Liew, Vincent Ha, Sky Hong, Nora Min

13

Hong Kong
The e Outlook Out oo
We expect limited upside to the MSCI-HK index in 2013. HK GDP growth should stage a mild recovery in 2013 to 2.5% from 1.3% in 2012 driven largely by the modest improvement in external demand from the G2 and China which should reduce the credit risk facing the banking system and support steady growth in bank lending. lending Financials should also benefit from further progress in Chinas capital account liberalization and the internationalization of the RMB. However, we believe property prices will be under downward pressure due to a stronger government commitment to increase land supply and control speculative demand. Overall, we believe the HK equity market has already priced in a normalization of growth (the forward PE of MSCI-HK is on par with its historical average) while HK and global growth in 2013 will likely remain somewhat below potential. As a result, we only expect a modest upside (8%) to MSCI HK, in line with our bottoms-up forecast on 2013e EPS growth. By sector, we like BANKS (eg BOC HK) and select CONGLOMERATES with significant trade exposure (eg HUTCHISON). We believe DEVELOPERS will underperform.

The Team (HK/China)

Head of Research - Michael Tong Chief Economist & Strategist - Jun Ma

Economics & Strategy - Jun Ma, Lin Li Autos - Vincent Ha, Nora Min Banks Insurance - Tracy Yu Banks, Yu, Esther Chwei Chwei, Judy Zhang Zhang, Sophia Lee Conglomerates - Karen Tang, Michael Tong Consumer - Anne Ling, Lydia Ling Gaming - Karen Tang Health Care - Jack Hu Infrastructure / Industrials - Michael Tong, Joe Liew, Phyllis Wang Internet - Alan Hellawell, Alex Yao Metals & Mining - James Kan, Johnson Wan, Laura Zhai Oil/Gas - David Hurd Power/Utilities - Michael Tong, Eric Cheng, Kai-ting Wong Property - Tony Tsang, Jason Ching Small-Mid Cap - Vivian Hao Telecoms - Alan Hellawell Transport - Joe Liew, Vincent Ha, Sky Hong, Nora Min

14

India
The e Outlook Out oo
Nav Varsh ki Shubh Kaamnayein from Abhay & team who believe the Indian equity market is well poised to benefit from an imminent rate cut cycle, expected implementation of reform measures, a bottoming out of economic growth by 1Q, reasonable valuations (in line with LT average) and a likely more favorable global risk appetite for equities. equities There are already recent positive signs regarding growth with the latest IIP reading at 8.2% (vs. avg of 0.1% in preceding 6 months) and we believe stronger capex/approvals in 2013 will lay foundations for a more structural and pronounced growth recovery. Additionally, while the government h has managed d to t shrug h off ff the th bugbear b b of f policy li paralysis, it now has to follow up on the reform announcements with concrete implementation. We expect to see faster approvals flowing in from Cabinet Committee on Investment by 1H13 and further fuel price hikes. We suggest overweight on Banks, Industrials and select Consumption names. In terms of stocks, we like AXIS BANK, ICICI BANK, L&T, ULTRATECH and ITC.

The Team
Head of Research Abhay Laijawala Economics - Taimur Baig Baig, Kaushik Das Equity Strategy - Abhay Laijawala, Abhishek Saraf Autos - Srini Rao, Amyn Pirani Banks, Insurance - Manish Karwa, Manish Shukla Consumer - Manoj Menon, Gaurav Bhatia Industrials/Infra - Manish Saxena, Chockalingam Narayanan IT Services - Aniruddha Bhosale Metals & Mining - Abhay Laijawala, Anuj Singla Oil/Gas - Harshad Katkar, Amit Muraka P Power/Utilities /U ili i - Abhishek Abhi h k P Puri, i M Manish i hS Saxena, Property - Abhishek Saraf Telecoms - Srini Rao, Amyn Pirani

15

Indonesia
The e Outlook Out oo
Selamat tahun baru from Heri, Raymond and the rest of our team in Indonesia. We believe there are two macro scenarios to decide on before taking a view on stocks. The first suggests the economy has grown beyond its means, hence unpleasant adjustments are needed which would likely be negative for equities. equities The second suggests the economy has evolved from being consumptiondriven to investment-driven, paving the way for a virtuous growth cycle (as investment-driven growth should trigger job growth, pushing up discretionary spending which in turn is likely to lure investment for new demand). JCIs first marked underperformance in a decade underlines the consensus skepticism. k i i S ill we hold Still, h ld the h minority i i view of a virtuous growth cycle. We do not see inflation as a significant downside risk nor do we view a fuel price hike as likely and policy interest rates are likely to be stable. We are however concerned by potential for rupiah weakness. Overall, we expect macro concerns to weigh on stock performance near term but concerns should ease over the course of the year and we have a 12-month index target of 5,000. Near term, we would pay up for defensive growth stocks that are less exposed to IDR weakness, regulatory risk and rising competition. Top large cap picks are: BBCA, BMRI, SMGR, GGRM and CPIN. In the mid/small cap space we like BBTN, JSMR, RALS, ICBP and SMRA.

The Team
Head of Research - Raymond Kosasih Head of Strategy - Heriyanto Irawan

Economics - Taimur Baig Equity Strategy - Heriyanto Irawan, Nicholas Nugroho Autos - Rachman Koeswanto, Jovin Ng Banks - Raymond Kosasih, Arinta Harsono Consumer - Reggy Susanto, Adi Putra Energy (Palm Oil) - Rachman Koeswanto, Jovin Ng Industrials - Rachman Koeswanto, , Jovin Ng g Metals & Mining - Cherie Khoeng Power, Oil/Gas - Cheri Khoeng Property - Albert Saputro Small-Mid Cap - Nicholas Nugroho Telecoms - Raymond Kosasih

16

Malaysia
The e Outlook Out oo
As we say apa khabar to 2013, we highlight that the key event for Malaysia in 2013 will be the general election which has to be called before 28 April and held by 27 June. This may be an overhang on near-term market performance (in fact, the potential for political change may have contributed to Malaysia Malaysias s relatively lacklustre 2012 performance). We believe that over the near-term, investors will continue to stay in defensive names to take shelter from pre-election volatility but on a 12 month basis, our highest conviction ideas are: TENAGA (expected to re-rate on lower fuel costs as well as government restructuring initiatives); GAMUDA (on good prospects for new rail i f infrastructure order d wins); i ) GENTING MALAYSIA (on expected positive news-flow regarding its US expansion efforts); and RHB CAPITAL (relatively unloved but improving CASA deposit trends and capital adequacy ratios likely to be re-rating catalysts).

The Team
Country Head - Aun-Ling Chia Economics - Michael Spencer Strategy - Joe Liew Banks - Andrew Hill Commodities - Michelle Foong Gaming - Aun-Ling Chia Media - Wei-Shi Wu Property - Aun-Ling Chia Telecoms - Wei-Shi Wu Transport - Michelle Foong Utilities - Aun-Ling g Chia

17

Philippines
The e Outlook Out oo
As we say mabuhay to 2013, the macro backdrop for Philippine companies remains extraordinarily robust. One can argue, in fact, that current macro conditions (current account, inflation, interest rates, government debt, etc) are better than they have ever been in the past two decades (better even than the roaring nineties). nineties) A global (or regional) recovery, should it happen, will only add to the positive momentum. Having said that, the Philippines is hardly an "undiscovered" market anymore (up +33% in 2012 in local currency terms after being the best performer in the region over the last two years). The broad market PER multiple (17x for 2013) is near historic highs and there h are hardly h dl any bargains b i left. l f We W believe b li the h key investment themes for 2013 will be (1) the May elections and (2) the governments infrastructure program. Within the market, we like ALLIANCE GLOBAL (election spending boost), MERALCO (power demand linked to GDP), METRO PACIFIC (infrastructure + Meralco stake) and SECURITY BANK (highest ROE bank + improved credit demand).

The Team
C Country Head - Giovanni G Dela-Rosa Economics - Taimur Baig Strategy - Rafael Garchitorena Banks - Rafa Garchitorena Consumer - Michael Bengson Multi-Industry - Klyne Resullar Property - Carl Sy Telecoms - Giovanni Dela-Rosa Utilities - Iza Fernandez

18

Singapore
The e Out Outlook oo
As we sing into 2013, resilient domestic growth drivers should underpin the economy despite a weakening external environment we expect 3.0% GDP growth. Moreover, sustained low interest rates and an appreciating SGD should remain supportive of asset values. Market valuations are undemanding at 14x FY13e PE and 1.4x PB, below five-year averages, and we reiterate our 3250 STI target. In light of relative valuations, expectations of firmer capital values and an improving physical market, we shifted our preferences within the property sector from REITs to developers. We like CAPITALAND and KEPPEL LAND, while within the REITS we prefer AREIT for f its i development d l capability. bili El Elsewhere, h continued order wins and rising commodity prices should support the O&M sector (SEMBCORP INDUSTRIES & KEPPEL CORP) especially as recent margin contractions have been priced in. We also like OCBC for its sectorleading credit quality. Finally, strong balance sheets could continue to support strong dividends at ST ENGINEERING and SATS.

The Team
Country Head - Greg Lui Economics - Michael Spencer Strategy - Greg Lui Banks - Andrew Hill Commodities - Michelle Foong Conglomerates- Kevin Chong Property - Greg Lui, Elaine Khoo Telecoms - Wei Wei-Shi Shi Wu Transport - Joe Liew, Wei-Shi Wu

19

South Korea
The e Outlook Out oo
As we say an-nyung-ha-se-yo to 2013, Korea faces an interesting set of challenges and issues. The country is preparing to welcome a new president from late February (who will also be the nation's first female president) and hence, is eagerly awaiting announcements of new economic policies from the incoming administration. administration The president-elect president elect's s pledges during the campaign trail included a fairer dynamic between the conglomerates and SMEs, a better balance between export and domestic economies to achieve growth, as well as easing of the middle-class burden. Meanwhile, external factors that will continue to affect the market sentiments include: a) Ongoing macro issues in the U.S. and EU; b) resumption i of f economic i growth h in i China Chi under d the new leadership; and c) the new government's relationship with North Korea. Some of the team's high conviction stock ideas are: 1) SK HYNIX (favorable supply environment); 2) HANKOOK TIRE (recovering global demand with capacity expansion); 3) SEMCO (leverage to Samsung's smartphone growth); 4) SAMSUNG ENG (robust overseas business with margin normalization); and 5) LGUPLUS (rising ARPU with sharp earnings recovery).

The Team
Country Head - John Kim Economics - Juliana Lee

Autos - Sanjeev Rana, Chanwook Park Banks/Financials - Jeehoon Park Consumer - Jihyun Song Industrials / Infrastructure - Sanghi Han, Sanjeev Rana Internet - Hanjoon Kim Metals & Mining - Chanwook Park Oil & Gas - Shawn Park Tech - Seunghoon g Han, , Hanjoon j Kim Telecoms - John Kim Transport - Joe Liew, Sky Hong Utilities - Sanghi Han

20

Taiwan
The e Outlook Out oo
As we say ni hao to 2013, Taiwan is expected to be a beneficiary of the improving economic backdrop although we see limited upside to our 7,960 target on a 12 month basis. Nevertheless, there are four key themes which investors should be focused on: First, ongoing structural changes in tech as innovation becomes more important than volumes (winners expected to include TSMC, MEDIATEK, HON HAI & DELTA); second, China recovery should sustain growth, especially for consumer plays (for example, UNI-PRESIDENT); third, increased China investment and capex driven in part by higher labour costs should be positive for financial and industrial automation sectors (including (i l di MEGA FHC, FHC CHAILEASE & DELTA); and fourth, container shipping remains a good proxy for global economic recovery (EVERGREEN MARINE is our top pick across the container shippers). Our top tech picks into 2013 include DELTA, HON HAI, EPISTAR, MEDIATEK, SYNNEX, TPK and TSMC, while across non-tech, we like MEGA FHC, CHAILEASE, UNI-PRESIDENT, EVERGREEN MARINE, LUNGYEN LIFE and TSRC.

The Team
Country Head - Joelian Tseng Economics - Juliana Lee Strategy - Joelian Tseng Consumer - Joelian Tseng Financials - Pandora Lee Petrochemicals - Alden Lin Tech (hardware) - Ivy Lee, William Yang Tech (semis) - Michael Chou, Jessica Chang, Seunghoon Han T l Telecoms - William Willi Y Yang Transport - Vincent Ha, Sky Hong

21

Thailand
The e Outlook Out oo
As we say sawatdee to 2013, we see further upside to the Thai market with y/e SET target 1,450 driven by sustained capital liquidity, midsingle-digit GDP growth a more stable political environment and attractive valuations versus ASEAN peers. Banks offer the most target price upside and the investment cycle strength should sustain double-digit loan growth in 2013. Furthermore, the loan pricing environment remains favorable, LDR pressures are reduced following aggressive 2H12 deposit intakes, the margin outlook is favourable and valuations are compelling. Peach likes KBANK, KTB and BAY. The petrochemical sector offers upside potential f from b buoyant oil il prices i and d favorable f bl GRM outlook, while current Consensus expectations are, in our view, too bearish. We prefer TOP and SCC. We also view the telco sector as attractive with subscriber migration from high-revenueshare legacy concessions to low-revenue-share perpetual licenses set to commence in 2013. Our preferred telco is ADVANC. We are more selective in the commerce sector on stretched valuations and a higher risk of earnings misses but within the sector we like CPALL, ROBINS and CPN for structural upcountry growth potential and lower vulnerability to competition.

The Team
Country Head - Derek Bloomfield Economics - Juliana Lee Strategy - Derek Bloomfield Banks - Peach Patharavanakul Consumer - Chalinee Comgmuang, Sopicha Wattanasansanee Energy - Thapana Phanich Metals&Mining - Sansanee Srijamjuree Property - Nash Shivaruchiwong Telecoms - Thapana Phanich

22

Sectors

23

Autos
The e Outlook Out oo
Driving into 2013, Vincent expects a mild recovery in Chinese auto demand given an improving macro backdrop. We still expect the luxury segment to outperform in growth and our top OEM preference is BRILLIANCE, supported by a ramp-up in BMW 3-series sales and increasing engine local production. production Our top dealership pick is BAOXIN which should benefit from the integration of newly acquired dealers in Northern China. In Korea, after the 3% decline in domestic sales in 2012e, Sanjeev expects a recovery to 1% growth in 2013e driven by replacement demand and new model launches. We expect imports to continue to gain i market k share, h reaching hi 9% of f the h total l market k in 2013e. However, in the overseas market we expect Hyundai Motor to benefit from capacity expansion completed in 2012. We expect Hyundai Motors global sales volume to grow 7-8% and that of Kia Motors to grow 3-4% in 2013. Our top pick is HYUNDAI MOTOR. Srini believes investors need to be selective in their 2013e India picks as Indian auto stocks are trading at the higher end of their valuation bands and our preferences are driven by sales momentum and margin resilience. We like MARUTI the most while HERO is our preferred Sell. We expect recovery in all segments in India, with the revival in passenger vehicles volume growth at an estimated 16.5% for 2013 being the strongest driven by fuel price moderation, inflation and lower interest rates. Growth in demand for two-wheelers and commercial vehicles is likely to be more moderate.

The Team
Sector Heads - Sanjeev Rana, Vincent Ha HK/China - Vincent Ha, Nora Min India - Srini Rao, Amyn Pirani Indonesia - Rachman Koeswanto, Jovin Ng South Korea - Sanjeev Rana, Chanwook Park

24

Banks
The e Outlook Out oo
A strong year of performance for Asian banks is in the vault - the sector delivered a 2012 absolute return of almost 25%. Policy-induced liquidity benefited both the large cap yield plays (post the LTRO) and growth stocks, namely India and Thailand banks and China insurers after the announcement of QE3, leading to the normalization of valuations. valuations We also saw a general underperformance of Chinese banks vs. insurers due in large part to the impact of slowing deposit growth in China and interest rate deregulation. From Dec 2012, the Chinese bank stocks have been supported by a recovery in China GDP, a trend that we expect to continue into 1Q 2013. With stock prices of other h Asian A i b k poised banks i d to benefit b fi from f continued i d improvement in the US housing market and the unwinding of the yen trade in favor of more risky assets, we are positive on banks in Australia, Singapore, Indonesia, Thailand and India, with the latter three markets expected to deliver high double digit profit growth in FY13. However, we have identified a notable slowdown in sales of wealth management products in China as a key risk going into 2H 2013 as it could potentially impact the growth in non-bank financing and thereby limit the full recovery process in China. Our sector top picks are BANK MANDIRI, KRUNG THAI BANK, BOC and ANZ.

The Team
Sector Head Tracy Yu Australia - James Freeman, Andrew Triggs China - Tracy Yu, Judy Zhang Hong Kong - Tracy Yu, Sophia Lee India - Manish Karwa, Manish Shukla Indonesia - Raymond Kosasih, Arinta Harsono Philippines - Rafael Garchitorena Si Singapore, M Malaysia l i - Andrew A d Hill South Korea - Jeehoon Park Taiwan - Pandora Lee Thailand - Peach Patharavanakul

25

Conglomerates
The e Outlook Out oo
As we lift into 2013, our top pick in the HK Conglomerate sector is HUTCHISON WHAMPOA. We believe a negative outlook on Hutch's European business (c.30% of GAV) is already reflected in the share price, whereas we hold a more optimistic view. On the back of a better global economic outlook (particularly in Europe and China) we estimate consolidated earnings growth of 18% yoy in 2013. For Swire and Wharf, we maintain our Hold ratings as slower office & retail rentals are likely to be a drag on earnings. Our preferred names within the Philippine conglomerate l sector are METRO PACIFIC and d FIRST PHIL HOLDINGS. We are bullish about one of their key common holdings (Meralco) and believe they are the most undervalued within the conglomerate sector relative to their underlying assets with significant NAV discounts.

The Team
Sector Head Karen Tang China Michael Tong Philippines Michael Bengson Singapore Kevin Chong

26

Consumer
The e Out Outlook oo
Shopping for returns in the HK/China consumer sector is likely to be easier in 2H13 than 1H13. China consumption should improve in 2013 on: 1) Ongoing urbanization and development of the middle-income class; 2) wealth effect (better A-shr market outlook and relatively stable property market); and 3) policy support post the 18th Party Congress. Congress DISCRETIONARY should perform better than STAPLES with better sales growth and more attractive valuations. HK faces more challenges given high rentals and low income growth, although we also expect conditions to improve by 2H13. We prefer CTF, LI & FUNG and HENGAN. In Korea, Jihyun expects a gradual 2013 consumption recovery given government initiatives to boost d domestic i demand d d and d due d to the h recovery of f the h Seoul S l property market (helping the middle-income class). We prefer HDS given its organic growth potential (offsetting a softer macro environment in 1H). In India, high inflation and poor job creation are headwinds, but for select companies we see positive drivers in 2013: 1) return of pricing power in a more rational competitive environment; 2) benefits of distribution expansion; 3) rural consumption tailwinds; 4) ability to expand their way out of a slowdown; and 5) continuing strong premiumization trends. We prefer ITC, MARICO and TITAN. In Indonesia, we expect consumption to remain strong (driven by the c. 17% increase in minimum wages) which should benefit mass-market mass market companies such as GUDANG GARAM, INDOFOOD CBP and RAMAYANA. Increased competition and a weaker rupiah should lead to margin pressure on companies such as KALBE FARMA.

Th Team The T
Anne Ling - Sector Head

Aust. / NZ - Michael Simotas, Arie Dekker HK / China - Anne Ling, Lydia Ling India - Manoj Menon, Gaurav Bhatia Indonesia - Reggy Susanto, Adi Putra M l Malaysia i - Michelle Mi h ll Foong F Philippines - Michael Bengson, Carissa Mangubat South Korea - Jihyun Song Taiwan - Joelian Tseng Thailand - Chalinee Congmuang, Sopicha Wattanasansanee

27

Gaming
The e Outlook Out oo
Showing our cards for 2013 - we prefer Macau to Singapore and Malaysia gaming stocks given a better growth outlook and more attractive valuations. Karen expects Macau gaming revenue to grow 11% in 2013, driven by 25% mass revenue growth (5% VIP revenue growth). growth) Karen Karen's s top picks in Macau are GALAXY, MELCO CROWN & WYNN MACAU. The opening of Zhuhai South Station in 1Q13 should boost visitor arrivals to Macau, and the casinos that focus on raising minimum bet sizes (such as Galaxy and Melco Crown) should lift table yield (revenue per table). Galaxy and Melco Crown are trading at 0.8x and 0.7x PEG, which seems undemanding for a growth sector. For Singapore, Aun-Ling expects gaming revenue to turn from negative growth in 2012 to 3% growth in 2013, due to a bottoming out in the VIP segment in 4Q12. That said, at current valuations the upside potential for Genting Singapore and Genting Bhd looks limited and we maintain Hold ratings. Aun-Ling prefers GENTING MALAYSIA (Buy) given an undemanding valuation and given expected positive catalysts in 2013 including the General Election (which should remove an overhang) and accelerating US gaming liberalization. And in the Philippines, our preferred gaming stock is BELLE on valuation, new partnership and forthcoming new casino opening.

The Team
Sector Head - Karen Tang Australia - Mark Wilson HK / China / Macau - Karen Tang Philippines pp - Michael Bengson g Sing / Malaysia - Aun-Ling Chia

28

Healthcare
The e Outlook Out oo
Our 2013 prognosis for Chinas healthcare market is healthy. We are forecasting significant revenue growth across both the drug and device sectors, with the drug sector to grow relatively faster. The overall sector is expected to benefit from ongoing end-user demand growth, higher drug reimbursement funding and some potential consolidation. Policy pressures are an ever-present risk (especially on the drug sector and high-end medical consumables) but we believe most 2013 policy risks are manageable. Our preferred picks within the sector are SHINEWAY (as the successful turnaround in its operations / performance should drive a re-rating), SINO BIOPHARM and MINDRAY ( organic (on i growth h potential). i l)

Th Team The T
Sector Head - Jack Hu Australia - David Low, Stephen Ridgewell China - Jack Hu Malaysia - Gregory Lui

29

Industrials
The e Outlook Out oo
As we gear up for 2013, while the negative view on Korean shipbuilding is now a consensus one, we believe such negatives are adequately reflected in current prices with valuations near 2009 lows. We recommend investors adopt a trading approach as substantial downside looks limited and any positive newsflow on orders/pricing after a long lull could easily result in a valuation mean reversal. Sanjeev likes HYUNDAI HEAVY in the short term due to expected new orders, margin recovery and the IPO of Hyundai Oilbank. In the longer term, however, he prefers SAMSUNG HEAVY due to its competitiveness i offshore in ff h structures. We W remain i positive ii on Singapores Offshore & Marine sector in 2013 due to the industry strength and fundamentals. Recent comments from the offshore drillers suggest continued optimism with strong demand and firm day rates. Within the sector, however, Kevins preference is for KEPPEL CORP, especially as their near-market customer strategy appears to be paying off.

The Team
Sector Head - Joe Liew Australia - Emily Behncke, Mark Wilson, Dennis Less HK/China - Joe Liew, Michael Tong India - Manish Saxena, Chockalingam Narayanan Indonesia - Rachman Koeswanto Singapore - Kevin Chong

South Korea - Sanghi Han, Sanjeev Rana

30

Infrastructure
The e Outlook Out oo
As we build into 2013, Phyllis has a positive view on the China rail sector due to the expected strong order pick-up, continued robust railway investment, accelerating earnings growth, a better outlook on railway and subway investment, and potential VAT reform We prefer constructors to equipment reform. producers over the near-term on better earnings outlook and valuations. Our top picks are CHINA RAILWAY GROUP and CHINA COMMUNICATIONS CONSTRUCTION. In Korea, SAMSUNG ENGINEERING is Sanghis top pick as we expect the company's earnings growth to accelerate through 2013 into 2014 in part due d to margin i recovery as well ll as a better b overseas demand environment. In addition, consensus expectations have been adjusted to more realistic levels and valuations are attractive. On the other hand, we remain cautious on Chinas construction machinery sector due to a poor earnings outlook for 1H13 as incremental demand from accelerating construction of ongoing projects is limited while the uncertain outlook in mining investment clouds the sector. We think demand is likely to decline further in 1H 2013 and recommend selling LONKING.

The Team
Sector Heads - Sanghi Han & Phyllis Wang Australia - Cameron McDonald China - Phyllis Wang, Sky Hong India - Manish Saxena, Chockalingam Narayanana Indonesia - Jovin Ng Malaysia - Aun-Ling Chia Philippines - Klyne Resullar South Korea - Sanghi Han

31

Insurance
The e Outlook Out oo
Esther and team wish you a happy and especially safe New Year. We enter 2013 with a positive view on the Chinese insurance sector given longterm structural growth potential and a better outlook for Chinas A-share market. Notwithstanding near-term growth challenges, we believe the sector could re-rate re rate on the back of improved investment returns and favorable government policies which should boost insurance demand in China. We prefer PING AN and NEW CHINA LIFE given their relatively high leverage to equity markets and attractive valuations. W are positive We ii on the h Indian I di i insurance sector given a more favorable regulatory environment and the government's renewed push to raise insurance penetration. In addition, new and improved product offerings should also help to boost penetration levels. Manish likes both MAX INDIA and RELIANCE CAPITAL. Pandora is relatively cautious on Taiwanese insurers as she expects interest rates to remain flat in 2013 and believes the negative spread issue will continue to be a drag. For investors seeking exposure to Taiwan, she prefers FUBON (although Hold rated) for its improving product mix, diversified earnings stream and wellthought-out thought out China strategy.

The Team
Sector Head - Esther Chwei Australia - Kieren Chidgey HK/China - Esther Chwei, Tracy Yu India - Manish Shukla, Manish Karwa South Korea - Jeehoon Park Taiwan - Pandora Lee

32

Internet
The e Outlook Out oo
As we surf into 2013, we remain relatively cautious on the outlook for Chinas online advertising revenues and therefore maintain our preference for internet stocks with lower sensitivity to brand ads. Companies with higher exposure to brand advertising revenues include SINA SOHU and RENREN. SINA, RENREN We are therefore more focused on internet names with a higher proportion of revenues and profits from nonadvertising sources, especially online gaming. Our sector top picks in China are TENCENT and SOUFUN (for reference, SOUFUNs robust performance is driven by campaign ad spend rather than online brand advertising). In Korea, we recommend d investors i f focus more on companies which are executing well to grow overseas revenues. This underpins our preference for NCSOFT.

The Team
Sector Head - Alan Hellawell China - Alan Hellawell, Alex Yao South Korea - Hanjoon Kim

33

Metals & Mining

The e Outlook Out oo
As we dig into 2013, we remain cautious on the sector in China especially as the ongoing economic structural changes and relatively high inventory levels across non-ferrous metals and thermal coal raise further price downside risks. Our China preferences are therefore driven by demand/supply assessments as well as potential for capacity rationalisation. We like the cement (Eastern China) and coking coal sectors most and our top picks are FUSHAN, CNBM and SHENHUA. In India, we are selective on the cement sector but expect accelerating growth by 2HFY14 and prefer names with exposure to west & north India Chockalingams top picks are ULTRATECH & SHREE We SHREE. W are also l positive ii on Indias I di steel l sector and Abhay recommends SAIL and TATA STEEL. Elsewhere, we prefer the Indonesian coal sector over both China and India peers with VALE INDONESIA being Cheries top pick in Indonesian coal. And finally, we continue to like exposure to gold and silver across the precious metals sector and highlight ZIJIN MINING and KOREA ZINC for their exposure to these metals.

The Team
Sector Head - James Kan Australia - Paul Young, Brett McKay, Chris Terry China - James Kan, Laura Zhai, Johnson Wan India - Abhay Laijawala, Chockalingam Narayanana, Manish Saxena, Anuj Singla Indonesia - Cherie Khoeng Philippines - Klyne Resullar South Korea - Chanwook Park Thailand - Sansanee Srijamjuree

34

Oil & Gas

The e Outlook Out oo
As we drill into 2013, we find more interesting ideas downstream than upstream. Specifically, given our expectations of either flat or lower oil prices over the next few years, our stock preferences are based on other drivers including capacity expansions/production growth, policy reforms and/or corporate restructurings. restructurings Across the big-caps, we like RELIANCE INDUSTRIES (on its increased petrochem capacity), SINOPEC (on reversals of its refining losses), OIL SEARCH (on production and earnings growth) and WOODSIDE (on production driven earnings growth). In smallcaps, we prefer HUCHEMS (on higher sales volume), MIE HOLDINGS (on production growth and d valuations), l i ) TSRC (on ( new production d i capacity), SINOFERT (on restructuring leading to higher margins) & PETRONET LNG (on a significant increase in production capacity).

The Team
Sector Head - David Hurd Australia - John Hirjee, Hugh Morgan, Grant Swanepoel China - David Hurd India - Harshad Katkar, Amit Murarka Indonesia Cherie Khoeng South Korea - Shawn Park Taiwan - Alden Lin Thailand - Thapana Phanich

35

Power
The e Outlook Out oo
As we power into 2013, we retain our preference for electric utilities across the region as we expect them to be beneficiaries of lower input fuel prices. We like CR POWER and HUANENG POWER in China, KEPCO in Korea and TENAGA in Malaysia. Moreover, we see a higher chance of policy reforms in many countries (including China) as a further re-rating catalyst. We tend to be selective on China downstream gas distributors given their hefty valuations with potential headwinds from slowing connection fees and upstream price hikes. BEIJING ENTERPRISES is Erics preferred China gas play while we are cautious on CR GAS In GAS. I India, I di we prefer f JPVL (leverage (l to falling interest rates) and JSW ENERGY (higher exposure to favorable spot market) among the private IPPs and NTPC (more compelling valuation) among regulated utilities.

The Team
Sector Head - Michael Tong Australia - John Hirjee, Hugh Morgan China - Michael Tong, Eric Cheng, Kai-Ting Wong India - Abhishek Puri, Manish Saxena Indonesia - Cherie Khoeng Malaysia - Aun-Ling Chia Philippines - Gio Dela-Rosa, Iza Fernandez South Korea - Sanghi Han

36

Property
The e Outlook Out oo
As we develop views for 2013, we expect the policy overhang for the HK property market will continue and should drive lower primary volumes and weaker secondary demand. We recommend rotating from HK to China stocks given Chinas relatively more stable policy environment and more favourable residential demand-supply demand supply balance. balance Our top picks in China are COLI, EVERGRANDE, R&F, CC LAND and KWG. In Singapore we recently shifted our sector preference to the property developers over the REITs. Gregs top picks in Singapore property are CAPITALAND, WING TAI & AREIT. In Indonesia, Albert stays positive with a preference for landed residential developers but notes the h need d to see strong sales l momentum and d landbank acquisition for the sector to perform. His top sector picks include BUMI SERPONG DAMAI and SUMMARECON. In the Philippines, we have a preference for landlords, infrastructure plays and developers with predominantly end-user clientele.

The Team
Sector Head - Tony Tsang Australia - Ian Randell, Christopher Byrne, Jason Weate HK/China - Tony Tsang, Jason Ching Indonesia - Albert Saputro Malaysia - Aun-Ling Chia Philippines - Carl Sy Singapore g p - Greg g Lui, , Elaine Khoo Thailand - Nash Shivaruchiwong

37

Small-cap
The e Outlook Out oo
As we take our first small steps into 2013, our small-cap preferences are determined by stock-specific circumstances. We like NEW ORIENTAL in the education sector given its strong brand name, increasing management focus on margins which should underpin earnings and attractive valuation. valuation We have a relative preference for HOME INNS in the economy hotel segment as we expect it to be a key beneficiary of the secular growth in Chinas leisure tourist sector given it has the largest network and a strong brand presence. Furthermore, the on-track motel integration should drive robust FY13 earnings growth. In A Asean, Mi h ll highlights Michelle hi hli h SUPERMAX in i Malaysia as a preferred small cap as we expect it to benefit from moderating raw material prices, stable FX, resilient demand and improved operational cost efficiencies / utilisation rates.

The Team
Sector Head - Vivian Hao Australia - Dominic Rose, Rose Wassim Kisirwani, Jennifer Kruk China - Vivian Hao, Lydia Ling Indonesia - Nicholas Nugroho Malaysia - Michelle Foong

38

Tech (hardware)
The e Outlook Out oo
As the components of 2013 come together, the overriding theme for the tech hardware sector remains the ongoing development of and demand for smartphones (including increasingly lower-end / lower-cost handsets). However, the fortunes of the handset vendors are increasingly polarised and we stay relatively cautious on both LGE and HTC as we believe both need more time to develop successful handset strategies. In both Korea and Taiwan, therefore, we are more focused on the smartphone component plays. Specifically, we like SAMSUNG SDI as we expect it to maintain its industry leadership in the rechargeable battery sector and SEMCO given its FC-CSP primary SEC supplier status. In I Taiwan, T i I likes Ivy lik HON HAI as the h primary i beneficiary of ongoing Apple product demand as well as DELTA ELECTRONICS given its competitive position in power supply and good progress on its business transition. William also likes EPISTAR on an expected recovery in LED sales in 1H13. Longerterm, it should be noted that increasing demand for tablets and Win8 products may be a stronger catalyst in 2H13 as the product pipeline improves. Industry consolidation may also be an increasingly important sector theme in 2013.

The Team
Sector Head - Hanjoon Kim South Korea - Hanjoon Kim Taiwan - Ivy Lee, William Yang

39

Tech (IT services/software)

The e Outlook Out oo
As we integrate our thoughts on 2013, we maintain a general preference within India for IT service/software companies which have better revenue visibility especially given the uncertainties over 2013 IT budgets, particularly in financial services. Consequently our Indian sector preferences Consequently, remain TCS in the large-cap segment and TECH MAHINDRA across the mid-caps. In China, Vivian likes DIGITAL CHINA as it builds on its core systems integration business and focuses more on meeting public infrastructure requirements through its Sm@rt City projects.

The Team
Sector Heads - Alan Hellawell, Aniruddha Bhosale China - Alan Hellawell Hellawell, Vivian Hao India - Aniruddha Bhosale

40

Tech (semiconductors)
The e Outlook Out oo
As we chip in 2013, we expect ongoing structural changes across the semiconductor complex. Within the foundry sector, for example, the changes over the next two years are expected to entrench TSMCs leadership and lead to a more polarized industry with the smaller tier two tier-two foundries increasingly disadvantaged. For the memory sector, capex discipline, supply reductions and strong mobile growth should help a DRAM recovery with SEC and SK HYNIX best positioned to benefit (although on balance we prefer SK HYNIX). Mobile will remain a key growth area for the IC design sector with MEDIATEK & SPREADTRUM our top picks. i k Mobility M bili is i also l a key k di driver f for the IC packaging & testing sector with ASE a likely beneficiary of this trend. In contrast, packaging companies with higher exposure to the PC suppliers will face ongoing pressures.

The Team
Sector Heads - Michael Chou, Seunghoon Han South Korea Seunghoon Han Taiwan - Jessica Chang, Michael Chou

41

Telecoms
The e Outlook Out oo
As we ring in 2013, there is no over-arching regional theme for the telco sector, especially as we are relatively cautious on the financial impact of continued data growth. As such, our sector preferences are predicated on market or company specific trends: In China, our top pick remains CHINA UNICOM on expected market share gains; in Korea, John likes LGU+ on ARPU gains from LTE migration and improved competitiveness; in India, we recommend buying IDEA on target price upside and lower long-term regulatory costs; and in Indonesia, Raymonds top pick remains PT TELKOM especially as its 2013 guidance is slightly ahead of our forecasts. Elsewhere, we expect FAR EASTONES momentum in i T i Taiwan to be b maintained and it is our preferred telco in that market, while Wei-Shis sole Buy rating in Malaysia is on AXIATA. We also continue to like both AIS and INTUCH in Thailand on a combination of earnings growth, yield and expected benefits from 3G build.

The Team
Sector Head - Alan Hellawell Australia - Vikas Gour, Arie Dekker India - Srini Rao Indonesia - Raymond Kosasih Malaysia - Wei-Shi Wu Philippines - Gio Dela Rosa Singapore - Wei-Shi Wu South Korea - John Kim Taiwan -William Yang Thailand - Thapana Phanich

42

Transport
The e Outlook Out oo
As we fly into 2013, we are generally more enthusiastic on the shipping companies than the airlines across the regional transport sector. In shipping, we prefer dry bulk over container with CHINA SHIPPING DEVELOPMENT our top Buy idea, but within containers containers, current valuations appear excessively bearish particularly as we expect rates to improve. Sky likes CSCL, HANJIN & OOIL. Within airlines, while the macro backdrop remains difficult (leading to softer yields), we prefer the Chinese names over their regional peers. Our top airline picks remain CHINA EASTERN & AIR CHINA and we are sellers ll of f SIA & CATHAY PACIFIC. PACIFIC

The Team
Sector Head - Joe Liew Australia - Cameron McDonald, Craig Wong-Pan China - Sky Hong, Vincent Ha Malaysia - Michelle Foong Philippines - Klyne Resullar Singapore - Joe Liew South Korea - Joe Liew, Sky Hong Taiwan - Sky Hong, Vincent Ha

43

Contact details
Equity Research - Country Australia China / Hong Kong China / Hong Kong India Indonesia Korea Malaysia Philippines Singapore Taiwan Thailand Equity Research - Sector Autos Conglomerates & Gaming Consumer & Media Financials Healthcare Infrastructure Insurance Metals & Mining Oil & Gas Property p y Property REITs Small Cap Transportation & Industrials TMT (telco, internet) Tech - Hardware Tech IT Services / Software Tech Semis Utilities / Power Macro / Strategy Regional Economics Equity Strategy Greater China Rates/FX (Regional) Corporate Credit Research (Regional) Quantitative Research Michael Spencer Ajay Kapur Jun Ma Sameer Goel Gene Cheon Khoi LeBinh +852 2203 8305 +852 2203 6196 +852 2203 8308 +65 6423 6973 +65 6423 6967 +852 2203 6990 michael.spencer@db.com ajay.kapur@db.com jun.ma@db.com sameer.goel@db.com gene cheon@db com gene.cheon@db.com khoi.lebinh@db.com Vincent Ha Sanjeev Rana Karen Tang Anne Ling Tracy Yu Jack Hu Sanghi Han Phyllis Wang Esther Chwei James Kan David Hurd Tony y Tsang g Gregory Lui Vivian Hao Joe Liew Alan Hellawell Hanjoon Kim Alan Hellawell Aniruddha Bhosale Michael Chou Seunghoon Han Michael Tong +852 2203 6247 +822 316 8910 +852 2203 6147 +852 2203 6177 +852 2203 6191 +852 2203 6208 +822 316 8900 +86213896 2839 +852 2203 6200 +852 2203 6146 +852 2203 6242 +852 2203 6256 +65 6423 5958 +852 2203 6241 +65 6423 8507 +852 2203 6240 +822 316 8909 +852 2203 6240 +9122 7158 4037 +8862 2192 2836 +822 316 8907 +852 2203 6167 vincent.ha@db.com sanjeev-r.rana@db.com karen.tang@db.com anne.ling@db.com tracy.yu@db.com jack.hu@db.com sanghi.han@db.com phyllis.wang@db.com esther.chwei@db.com james.kan@db.com david.hurd@db.com tony.tsang@db.com y g@ gregory.lui@db.com vivian.hao@db.com joe.liew@db.com alan.hellawell@db.com hanjoon.kim@db.com alan.hellawell@db.com aniruddha.bhosale@db.com michael chou@db com michael.chou@db.com seunghoon.han@db.com michael.tong@db.com Tim King Jun Ma Michael Tong Abhay Laijawala Raymond Kosasih John Kim Aun Ling Chia Gio dela Rosa Gregory Lui Joelian Tseng Derek Bloomfield* +612 8258 1633 +852 2203 8308 +852 2203 6167 +9122 7158 4031 +6221 318 9525 +822 316 8979 +603 2053 6768 +632 894 6642 +65 6423 5958 +8862 2192 2841 +662 633 6468 tim.king@db.com jun.ma@db.com michael.tong@db.com abhay.laijawala@db.com raymond.kosasih@db.com john-kr.kim@db.com aun-ling.chia@db.com giovanni.dela-rosa@db.com gregory.lui@db.com joelian.tseng@db.com derek.bloomfield@db.com

44

Appendix: Comps (1)

6-Jan Com pany Ticker Rating Price local AIS Alliance Global ANZ Ascendas Real Estate Axis Bank Bank Mandiri Bank of Ayudhya Bank of China Bank Tabungan Negara Baoxin Auto Group BCA j g Enterprises p Beijing BOC Hong Kong Holdings Brilliance China Bumi Serpong Damai C C Land CapitaLand Ltd Central Pattana Chailease Holding Charoen Pokphand Foods China Comms Construct CHINA EASTERN AIRLINES China Railw ay Group China Resources Pow er gy China Shenhua Energy China Shinew ay China Shipping Container China Shipping Development Co. Ltd. China Southern Airlines China Unicom Chow Tai Fook CNBM COLI CP All CR Cement Delta Electronics Digital China Epistar Evergrande Evergrande Evergreen Marine Far EasTone Telecom First Philippine Hldgs Fubon Financial Holding Galaxy Gamuda Genting Malaysia BHD Guangzhou R&F Prop Gudang Garam Hanjin Shipping Hankook Tire HDS Hengan Intl. Hon Hai Precision Huaneng Pow er Intl Huchems Hutchison Whampoa Hyundai Glovis Hyundai Heavy Hyundai Motor ICICI Bank Idea Cellular Indofood Indofood CBP ITC Jaiprakash Pow er Ventures Ltd Jasa Marga JSW Energy JSW Steel Kasikornbank Kepco ADVA.BK AGI.PS ANZ.AX AEMN.SI AXBK.BO BMRI.JK BAY.BK 3988.HK BBTN.JK 1293.HK BBCA.JK 0392.HK 2388.HK 1114.HK BSDE.JK 1224.HK CATL.SI CPN.BK 5871.TW CPF.BK 1800.HK 0670.HK 0390.HK 0836.HK 1088.HK 2877.HK 2866.HK 1138.HK 1055.HK 0762.HK 1929.HK 3323.HK 0688.HK CPALL.BK 1313.HK 2308.TW 0861.HK 2448.TW 3333.HK 3333.HK 2603.TW 4904.TW FPH.PS 2881.TW 0027.HK GAMU.KL GENM.KL 2777.HK GGRM.JK 117930.KS 161390.KS 069960.KS 1044.HK 2317.TW 0902.HK 069260.KS 0013.HK 086280.KS 009540.KS 005380.KS ICBK.BO IDEA.BO INDF.JK ICBP.JK ITC.BO JAPR.BO JSMR.JK JSWE.BO JSTL.BO KBAN.BK 015760.KS Buy Buy Buy Buy Buy Buy Buy Buy Buy Buy Buy Buy y Buy Buy Buy Buy Buy Buy Buy Hold Buy Buy Buy Buy Buy y Buy Buy Buy Buy Buy Buy Buy Buy Buy Buy Buy Buy Buy Buy Buy Buy Buy Buy Hold Buy Buy Buy Buy Buy Buy Buy Buy Buy Buy Buy Buy Buy Buy Buy Buy Buy Buy Buy Buy Buy Buy Buy Buy Buy Buy Buy 205.00 16.84 25.26 2.39 1,378.20 8,250.00 33.25 3.62 1,500.00 7.19 9,050.00 51.00 24.85 10.58 1,160.00 2.81 3.80 83.25 65.00 35.00 7.74 3.19 4.68 20.05 34.80 12.82 2.44 4.85 3.89 12.78 13.20 12.14 24.70 44.75 5.27 105.50 13.70 51.40 4.50 4.5 18.80 73.70 90.20 35.00 31.80 3.74 3.69 15.14 55,000.00 12,650.00 44,500.00 170,500.00 73.15 88.00 7.12 25,050.00 83.00 210,500.00 243,500.00 206,000.00 1,182.20 109.70 5,950.00 8,000.00 282.40 38.30 5,600.00 67.95 826.60 199.00 31,300.00 PE (x) (DB EPS) 16.6 15.6 10.2 15.2 11.2 12.5 13.8 6.1 11.5 18.1 19.2 18.8 12.9 18.0 18.6 10.4 37.9 38.4 12.0 11.7 8.9 9.8 11.7 14.8 11.8 12.0 76.4 -26.9 15.7 37.5 19.8 9.0 12.1 37.3 16.3 16.5 11.3 640.7 6.1 6.1 27.7 21.3 9.4 14.6 18.0 14.0 13.3 7.1 25.3 -25.3 8.2 12.3 25.6 11.5 12.6 16.5 16.1 14.1 9.9 5.2 16.5 39.5 16.0 21.1 24.9 22.3 21.0 29.4 8.9 13.3 -12.3 Ratios 2012F PB ( (x) ) 15.4 2.1 1.6 1.1 2.1 2.6 1.8 1.0 1.7 3.8 4.3 1.5 1.8 4.6 2.6 0.5 1.0 7.1 2.0 3.0 1.2 1.2 1.0 1.6 2.2 2.1 0.9 0.6 0.9 1.2 4.2 1.7 2.4 16.6 1.6 2.5 2.4 1.0 1.5 1.5 1.0 3.8 0.8 1.1 6.2 1.8 1.7 1.5 4.0 0.8 1.5 1.4 7.0 1.7 1.4 2.1 0.9 4.4 1.0 1.0 1.7 2.5 2.6 4.1 9.7 2.0 4.0 1.8 1.0 2.6 0.4 Div yield % 6.0 2.1 6.6 6.8 1.4 1.5 2.4 4.5 2.7 0.0 1.1 1.7 4.4 0.0 1.0 1.8 1.6 1.2 3.2 2.2 2.8 0.0 1.7 2.7 3.3 2.5 0.0 0.0 3.0 1.0 0.7 1.6 1.5 2.0 0.6 4.7 3.1 2.1 6.6 6.6 0.0 4.7 2.2 2.8 0.0 3.5 1.9 4.9 1.8 0.0 0.9 0.4 2.4 1.7 4.0 3.2 2.7 0.7 1.4 1.0 1.8 0.0 2.4 2.1 2.2 0.0 1.9 1.7 1.7 1.8 0.6 EV/ EBITDA (x) 9.7 12.0 NA 1.1 NA NA NA NA NA 12.9 NA 12.0 NA 467.4 12.8 4.5 15.9 21.6 NA 14.6 7.4 7.4 8.4 9.3 6.9 6.8 15.6 36.9 7.8 4.6 14.8 7.8 7.2 21.6 10.2 9.3 6.2 8.5 5.6 5.6 10.0 9.2 9.1 NA 13.3 11.6 6.5 6.0 15.7 15.1 5.5 8.3 18.5 4.8 8.1 9.7 10.5 14.9 8.1 5.6 NA 8.2 6.9 13.2 16.1 16.2 12.3 12.4 5.4 NA 8.3 PE (x) (DB EPS) 14.8 13.1 11.3 17.3 11.8 10.7 11.2 6.0 9.5 11.3 17.0 14.6 11.7 14.0 14.6 7.0 28.6 30.7 10.4 15.7 8.4 8.3 9.9 10.9 12.3 10.3 11.7 29.8 15.0 23.5 22.3 7.3 8.6 30.8 10.0 15.6 10.1 22.2 4.9 4.9 10.7 17.7 7.4 13.2 14.3 14.1 12.6 6.8 19.7 9.3 7.6 11.1 20.4 8.7 8.0 12.4 13.6 12.3 9.3 4.7 17.3 31.8 13.7 19.0 28.6 14.5 18.8 16.9 8.4 11.0 19.4 Ratios 2013F PB ( (x) ) 15.4 1.9 1.6 1.3 2.2 2.2 1.6 0.9 1.6 2.8 3.6 1.4 1.7 3.4 2.3 0.5 1.0 6.2 2.0 2.7 1.1 1.0 1.0 1.4 2.0 1.8 0.8 0.6 0.8 1.1 3.8 1.4 1.9 14.7 1.4 2.4 1.9 1.0 1.2 1.2 0.9 3.7 0.7 1.1 4.3 1.8 1.5 1.3 3.5 0.7 1.3 1.3 6.2 1.4 1.3 1.9 0.9 3.6 0.9 0.8 2.1 2.6 2.3 3.6 11.0 1.6 3.5 1.8 1.0 2.2 0.4 Div yield % 6.7 2.1 5.9 5.8 1.5 1.8 2.8 4.6 3.3 0.0 1.0 2.1 4.7 0.0 1.3 2.1 1.6 1.3 3.6 3.2 3.0 0.0 2.0 3.7 3.2 2.9 0.0 1.1 4.9 1.0 0.9 2.0 1.7 2.4 0.9 5.0 3.4 1.9 8.3 8.3 0.0 5.7 2.2 3.1 0.0 3.2 2.0 4.9 2.0 0.0 1.1 0.4 3.0 2.3 6.3 4.0 3.2 0.7 1.4 1.1 1.7 0.0 2.5 2.4 2.3 0.0 2.1 1.2 0.9 2.0 1.0 EV/ EBITDA (x) 9.3 10.8 NA 3.7 NA NA NA NA NA 7.8 NA 10.2 NA 240.6 9.6 4.9 15.9 19.3 NA 10.1 7.1 6.7 7.8 7.3 6.6 5.7 7.6 16.0 7.3 3.9 15.3 6.8 4.6 18.5 7.0 8.1 5.8 4.8 4.4 4.4 7.5 8.3 9.1 NA 10.8 11.5 5.7 4.4 12.7 10.2 4.9 7.6 14.7 3.8 6.2 7.4 9.0 12.7 7.3 4.9 NA 7.9 5.7 11.5 18.8 11.3 10.8 8.7 5.3 NA 6.0

Source: Deutsche Bank, Bloomberg Finance LP

45

Appendix: Comps (2)

6-Jan Com pany Ticker Rating P i Price local l l Keppel Corp Ltd Keppel Land Korea Zinc Krung Thai Bank KWG Property Larsen & Toubro Ltd LG Uplus Li & Fung Lung Yen Lif e Service Manila Electric Company Marico Limited Maruti Suzuki Limited Max India MediaTek Mega Financial Holding Melco Crow n Metro Pacific Investments MIE Holdings Corp Mindray Medical NCI NCsoft New Oriental NTPC Limited OCBC Oil Search Orient Overseas Int'l P Petronet LNG Li Limited i d Ping An Ramayana Reliance Capital Reliance Industries RHB Capital Robinson Dept. Store Samsung Eng. Samsung Heavy Samsung SDI SATS Security Bank Corp Sembcorp Industries Ltd SEMCO S Semen G Gresik ik Semirara Mining Shin Corp. Shougang Fushan Shree Cement Sino Biopharmaceutical Sinofert Sinopec-H SK Hynix SouFun Spreadtrum ST Engineering Steel Authority of India Summarecon S Supermax Synnex Technology Tata Consultancy Tata Steel Limited Tech Mahindra Ltd Telkom Tenaga Nasional Tencent Thai Oil Pcl Titan Industries Ltd TPK Holding TSMC TSRC UltraTech Cement U i P id t Uni-President Vale Indonesia Wing Tai Hldgs Woodside XL Axiata Zijin Mining KPLM.SI KLAN.SI 010130.KS KTB.BK 1813.HK LART.BO 032640.KS 0494.HK 5530.TWO MER.PS MRCO.BO MRTI.BO MAXI.BO O 2454.TW 2886.TW MPEL.OQ MPI.PS 1555.HK MR.N 1336.HK 036570.KS EDU.N NTPC.BO OCBC.SI OSH.AX 0316.HK PLNG BO PLNG.BO 2318.HK RALS.JK RLCP.BO RELI.BO RHBC.KL ROBI.BK 028050.KS 010140.KS 006400.KS SATS.SI SECB.PS SCIL.SI 009150.KS SMGR JK SMGR.JK SCC.PS INTUCH.BK 0639.HK SHCM.BO 1177.HK 0297.HK 0386.HK 000660.KS SFUN.N SPRD.OQ STEG.SI SAIL.BO SMRA.JK SUPM KL SUPM.KL 2347.TW TCS.BO TISC.BO TEML.BO TLKM.JK TENA.KL 0700.HK TOP.BK TITN.BO 3673.TW 2330.TW 2103.TW ULTC.BO 1216 TW 1216.TW INCO.JK WTHS.SI WPL.AX EXCL.JK 2899.HK Buy Buy Buy Buy Buy Buy Buy Buy Buy Buy Buy Buy Buy Buy Buy Buy Buy Buy Buy Buy Buy Buy Buy Buy Buy Buy B Buy Buy Buy Buy Buy Buy Buy Buy Buy Buy Buy Buy Buy Buy B Buy Hold Buy Buy Buy Buy Buy Buy Buy Buy Buy Buy Buy Buy B Buy Buy Buy Buy Buy Buy Buy Buy Buy Buy Buy Buy Buy Buy B Buy Buy Buy Buy Hold Buy 11.09 4.12 378,000.00 20.30 6.33 1,627.70 7,690.00 14.50 92.80 270.00 224.40 1,544.00 250.80 305.50 22.95 18.21 4.90 2.48 32.47 32.55 158,500.00 20.00 158.60 9.84 7.06 51.60 162 9 162.95 69.65 1,230.00 501.70 860.75 7.77 65.75 172,500.00 38,300.00 157,000.00 2.87 160.90 5.30 99,000.00 15 750 00 15,750.00 238.00 67.50 3.18 4,586.05 3.79 2.03 9.14 26,350.00 26.63 17.17 3.85 95.20 1,910.00 2 00 2.00 55.00 1,297.50 433.40 942.00 9,100.00 6.91 259.20 69.25 285.45 531.00 101.50 57.20 2,036.10 54 40 54.40 2,625.00 1.89 34.56 5,750.00 3.08 PE ( (x) ) (DB EPS) 10.2 16.1 11.1 10.8 6.4 19.2 596.6 23.7 18.1 17.7 28.7 20.4 29.5 23.1 13.4 23.4 16.5 6.7 18.2 25.7 24.8 31.9 14.6 11.2 59.2 18.7 11 1 11.1 21.5 19.6 28.6 13.9 11.6 35.3 11.4 10.0 4.6 14.9 10.5 13.9 15.8 19 6 19.6 14.0 15.1 10.1 NA 22.7 12.4 11.2 -73.5 14.6 9.6 19.9 13.2 25.5 10 1 10.1 14.7 20.7 15.4 7.7 13.4 10.6 28.3 10.5 30.7 13.7 15.7 16.2 12.8 21 7 21.7 18.7 NA 12.7 15.4 11.2 Ratios 2012F PB ( (x) ) 2.4 1.1 1.7 1.6 1.0 2.7 0.9 3.2 4.5 4.5 9.0 2.6 1.8 2.1 1.2 3.0 1.4 1.4 2.9 2.3 3.5 6.1 1.8 1.3 3.1 0.9 36 3.6 3.0 2.8 0.8 1.5 1.8 7.6 3.9 1.6 1.0 1.8 2.2 2.1 2.0 54 5.4 5.1 10.2 0.9 NA 4.3 0.8 1.3 1.9 20.9 2.4 6.4 1.0 4.0 15 1.5 2.0 7.0 1.8 2.3 2.9 1.0 9.4 1.7 14.0 3.9 3.7 2.5 3.2 32 3.2 1.5 NA 1.9 3.1 1.9 Div y yield % 4.9 1.9 0.7 3.3 4.3 1.0 0.0 2.5 3.5 4.5 0.5 0.6 0.0 3.1 3.7 0.0 0.5 2.2 1.2 0.6 0.4 0.0 2.5 3.8 0.5 2.7 16 1.6 0.7 2.6 1.9 1.0 3.1 1.6 2.0 1.3 0.6 10.9 1.2 2.7 1.3 26 2.6 5.0 6.6 4.5 NA 1.7 1.2 3.2 0.0 3.8 2.1 4.5 1.7 0.9 30 3.0 4.1 2.8 2.4 0.7 4.0 3.3 0.3 4.3 0.8 1.9 3.0 4.0 0.7 23 2.3 3.0 NA 4.3 2.6 2.6 EV/ EBITDA (x) 6.2 25.5 6.4 NA 3.8 16.1 4.0 17.5 15.5 9.4 20.6 9.7 15.2 13.3 NA 11.8 8.4 3.5 12.0 NA 12.5 23.4 11.9 NA 27.5 9.8 7.7 NA 8.5 NA 8.5 NA 17.7 7.5 5.6 3.6 7.8 NA 6.1 6.1 13 9 13.9 10.0 69.5 4.1 NA 9.9 4.5 5.7 7.4 10.9 5.8 14.0 10.6 13.0 90 9.0 18.0 14.6 7.8 7.2 4.8 5.4 21.1 6.8 21.1 8.3 8.3 8.4 7.9 60 7 60.7 8.3 NA 6.4 5.7 5.6 PE ( (x) ) (DB EPS) 12.2 15.4 7.0 9.9 6.4 20.5 8.2 16.1 15.7 15.9 32.7 22.2 22.8 19.3 12.8 18.1 14.8 6.0 16.0 18.6 15.4 23.6 12.2 10.9 44.2 10.2 10 9 10.9 16.6 17.2 19.5 12.8 9.8 27.2 10.8 9.3 10.5 15.7 12.5 12.3 13.6 15 2 15.2 12.2 13.2 11.0 20.5 19.3 9.7 9.4 15.3 11.6 7.3 18.3 9.9 20.9 91 9.1 12.4 18.5 13.5 9.7 12.4 10.7 20.8 7.8 32.6 11.8 13.6 11.8 19.6 20 8 20.8 13.1 8.8 11.3 14.0 9.0 Ratios 2013F PB ( (x) ) 2.2 1.1 1.4 1.4 0.9 2.3 0.8 2.9 3.8 4.2 7.0 2.6 2.3 2.2 1.2 2.5 1.3 1.2 2.5 2.1 2.9 4.0 1.6 1.2 2.9 0.9 28 2.8 2.6 2.7 1.0 1.5 1.6 6.7 3.1 1.4 0.9 2.2 1.9 1.8 1.7 44 4.4 4.4 10.2 0.8 4.4 3.9 0.8 1.2 1.7 6.7 1.9 6.2 0.9 3.5 14 1.4 1.8 6.3 1.6 2.6 2.6 1.0 6.7 1.5 12.9 3.1 3.1 2.2 3.6 31 3.1 1.4 0.7 1.7 2.7 1.6 Div y yield % 4.1 1.9 0.7 4.1 4.3 1.1 3.7 2.7 5.3 4.8 0.3 0.7 0.0 3.8 3.9 0.0 0.5 2.4 1.2 0.8 0.6 1.4 3.0 4.0 0.5 4.9 1 1.7 0.9 3.6 2.2 1.0 3.5 2.0 2.3 1.3 0.5 4.8 1.2 3.1 1.5 33 3.3 5.0 7.6 4.1 0.4 3.1 1.6 3.8 0.0 0.0 2.1 4.9 2.0 1.2 33 3.3 4.8 2.2 2.3 0.5 5.2 3.0 0.3 5.8 0.9 2.1 3.0 5.5 0.4 27 2.7 3.1 3.7 4.4 2.9 3.3 EV/ EBITDA (x) 7.0 19.4 4.1 NA 4.3 14.0 2.6 12.3 12.6 9.2 22.9 11.4 9.6 11.7 NA 10.5 6.8 3.2 10.6 NA 7.6 15.0 10.0 NA 25.4 6.9 7.4 4 NA 7.6 NA 8.2 NA 14.2 6.8 5.1 11.2 8.9 NA 5.3 5.5 10 3 10.3 9.7 62.7 3.9 7.9 8.4 3.3 5.2 4.5 8.4 3.9 12.6 8.0 10.9 79 7.9 16.0 13.3 6.8 7.7 4.4 5.3 15.5 5.5 22.6 7.1 6.6 6.8 11.6 50 8 50.8 6.4 3.7 5.8 5.2 4.5

Source: Deutsche Bank, Bloomberg Finance LP

46

Appendix: Valuation & Risks

Please refer to our Research website for important disclosures regarding our valuation methodology and risks for each of the stocks mentioned in this report. http://gmr.db.com

47

Global Disclaimer
The information and opinions in this report were prepared by Deutsche Bank AG or one of its affiliates (collectively "Deutsche Bank"). The information herein is believed to be reliable and has been obtained from public sources believed to be reliable. Deutsche Bank makes no representation as to the accuracy or completeness of such information. Deutsche Bank may engage in securities transactions, on a proprietary basis or otherwise, in a manner inconsistent with the view taken in this research report. In addition, others within Deutsche Bank, including strategists and sales staff, may take a view that is inconsistent with that taken in this research report. Opinions, estimates and projections in this report constitute the current judgement of the author as of the date of this report. They do not necessarily reflect the opinions of Deutsche Bank and are subject to change without notice. Deutsche Bank has no obligation to update, modify or amend this report or to otherwise notify a recipient thereof in the event that any opinion, forecast or estimate set forth herein, changes or subsequently becomes inaccurate. Prices and availability y of financial instruments are subject j to change g without notice. This report p is p provided for informational p purposes p only. y It is not an offer or a solicitation of an offer to buy y or sell any y financial instruments or to participate in any particular trading strategy. Target prices are inherently imprecise and a product of the analyst judgement. As a result of Deutsche Banks March 2010 acquisition of BHF-Bank AG, a security may be covered by more than one analyst within the Deutsche Bank group. Each of these analysts may use differing methodologies to value the security; as a result, the recommendations may differ and the price targets and estimates of each may vary widely. In August 2009, Deutsche Bank instituted a new policy whereby analysts may choose not to set or maintain a target price of certain issuers under coverage with a Hold rating. In particular, this will typically occur for "Hold" rated stocks having a market cap smaller than most other companies in its sector or region. We believe that such policy will allow us to make best use of our resources. Please visit our website at http://gm.db.com to determine the target price of any stock. The financial instruments discussed in this report may not be suitable for all investors and investors must make their own informed investment decisions. Stock transactions can lead to losses as a result of price fluctuations and other factors. If a financial instrument is denominated in a currency other than an investor's currency, a change in exchange rates may adversely affect the investment. Past performance is not necessarily indicative of future results. Deutsche Bank may with respect to securities covered by this report, sell to or buy from customers on a principal basis, and consider this report in deciding to trade on a proprietary basis. Unless governing law provides otherwise, all transactions should be executed through the Deutsche Bank entity in the investor's home jurisdiction. In the U.S. this report is approved and/or distributed by Deutsche Bank Securities Inc., a member of the NYSE, the NASD, NFA and SIPC. In Germany this report is approved and/or communicated by Deutsche Bank AG Frankfurt authorized by the BaFin. In the United Kingdom this report is approved and/or communicated by Deutsche Bank AG London, a member of the London Stock Exchange and regulated by the Financial Services Authority for the conduct of investment business in the UK and authorized by the BaFin. This report is distributed in Hong Kong by Deutsche Bank AG, Hong Kong Branch, in Korea by Deutsche Securities Korea Co. This report is distributed in Singapore by Deutsche Bank AG, Singapore Branch or Deutsche Securities Asia Limited, Singapore Branch, and recipients in Singapore of this report are to contact Deutsche Bank AG, Singapore Branch or Deutsche Securities Asia Limited, Singapore Branch in respect of any matters arising from, or in connection with, this report. Where this report is issued or promulgated in Singapore to a person who is not an accredited investor, expert investor or institutional investor (as defined in the applicable Singapore laws and regulations), Deutsche Bank AG, Singapore Branch or Deutsche Securities Asia Limited, Singapore Branch accepts legal responsibility to such person for the contents of this report. In Japan this report is approved and/or distributed by Deutsche Securities Inc. The information contained in this report does not constitute the provision of investment advice. In Australia, retail clients should obtain a copy of a Product Disclosure Statement (PDS) relating to any financial product referred to in this report and consider the PDS before making any decision about whether to acquire the product. Deutsche Bank AG Johannesburg is incorporated in the Federal Republic of Germany (Branch Register Number in South Africa: 1998/003298/10). Additional information relative to securities, other financial products or issuers discussed in this report is available upon request. This report may not be reproduced, distributed or published by any person for any purpose without Deutsche Bank's prior written consent. Please cite source when quoting. Copyright 2013 Deutsche Bank AG

48