22 APRIL 2013

Ad
TP: Bt 11.40
Upside: 45.2% (From Bt 8.00)

Ho c

BUY

(Unchanged)

Re s

Change in Numbers

ea r

ch

Jasmine International Pcl

Thanachart Securities

(JAS TB)

Very strong growth momentum

We lift our 2013-15 earnings estimates for JAS by 13-18% given a higher operating leverage effect than wed expected. This leads to our normalized EPS growth forecast of 54% this year versus 35% previously. We maintain our view that the market is overly concerned about new competition. Reaffirm BUY to a higher 12-month DCF TP of Bt11.40.

SIRIPORN ARUNOTHAI
662 617 4900 siriporn.aru@thanachartsec.co.th

Earnings upgrades
We visited JAS last week and came away with a more bullish view on its business outlook and operating leverage effect. While revenue continues to grow by around 12% p.a. (stronger broadband alone at 16% p.a.), costs are up far less proportionately. We lift EBIT margin from 33% to 35% in 2013F and see a continued rising trend. We therefore boost earnings by 13-18% in 2013F-15F and raise our 12-month DCF TP from Bt8.0 to Bt11.40. The broadband business is highly capital intensive and JAS passed its heavy capex cycle in 2012 when capex was cut by half to Bt2bn p.a., allowing operating leverage to have a greater effect. We reaffirm BUY on JAS as we see it as one of the cheapest consumer plays in Thailand at PE of 17.8x in 2013F and 13.2x in 2014F versus forecast EPS growth of 54% and 35%.
COMPANY VALUATION
Y/E Dec (Bt m) Sales Net profit Consensus NP Diff frm cons (%) Norm profit Prev. Norm profit Chg frm prev (%) Norm EPS (Bt) Norm EPS grw (%) Norm PE (x) EV/EBITDA (x) P/BV (x) Div yield (%) ROE (%) Net D/E (%) 2012A 10,369 2,137 2013F 11,341 3,227 2,861 12.8 3,157 2,778 13.6 0.4 53.7 17.8 10.2 5.4 3.2 33.1 21.2 2014F 13,092 4,229 3,616 17.0 4,229 3,597 17.6 0.6 34.7 13.2 8.0 4.5 4.5 37.0 2.7 2015F 14,481 5,020 4,380 14.6 5,020 4,435 13.2 0.7 18.7 11.2 6.8 3.9 6.3 37.2 (10.6)

2,065

0.3 76.9 27.4 12.4 6.5 1.2 26.1 35.4

Good business momentum

We see broadband business as stable growth along with the countrys development and peoples incomes and believe our net new subscriber growth forecasts of 16-18% in 2013-15 are reasonable given Thailands 22% broadband penetration rate in 2012 with only three key players now and one potential new one. To try to secure its market position ahead of the new competition, JAS has begun service of its higher-speed product, Fiber-ToThe-Home (FTTH), in 2Q13 with backlog growing to 10,000 customers. We forecast FTTH subscribers to rise from 1% of the total in 2013 to 5% in 2015, helping support margin as FTTH pricing is 2x that of ADSL at similar cost.

PRICE PERFORMANCE
(B t/shr) 1 0 8 6 4 2 0 A pr-1 2 A ug-1 2 Dec-1 2 JA S Rel to SET Index (%) 200 1 50 1 00 50 0 A pr-1 3

Our view on the new competition

The market worry over JAS is potential new player Cable Thai Holding Pcl (CTH, unlisted) which plans to offer cable TV and broadband services. We dont expect CTH to be a real threat to JAS before 2015, beyond which CTH may opt for a friendly competitive environment. 1) CTH has just invested Bt10bn to get the English Premier League (EPL) broadcast rights so we see its cable TV business as its priority. 2) Fiber optic needs heavy capex and CTH may not invest itself given its already huge EPL payout. A partnership investment model would take time as CTH doesnt own cable TV subscribers itself but via hundreds of cable TV operator partners. The renting fiber-optic model isn't a solid long-term business model, in our view, and it needs lots of capex. 3) Assuming CTH can raise the funds, we expect it to still need two years to develop its own core fiber-optic network and build its service center.

COMPANY INFORMATION
Price as of 22-Apr-13 (Bt) Market cap (US$ m) Listed shares (m shares) Free float (%) Avg daily turnover (US$ m) 12M price H/L (Bt) Sector Major shareholder 7.85 1,952.9 7,137.4 66.1 20.9 7.9/2.7 Telecom Bodharamik family 25.8%

Strong 1Q13F results a short-term catalyst

We forecast JASs 1Q13 core profits to grow 58% y-y and 19% q-q to Bt670m with key drivers of growing subscriber numbers, rising gross margin and falling SG&A to sales. JASs new subscribers in 1Q13 came to 43,000 with a 10,000 FTTH backlog, bringing total subscribers to 1.27m at end 1Q13 with flat ARPU from last year at Bt570/month.

Sources: Bloomberg, Company data, Thanachart estimates

Please see the important notice on the back page.

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Earnings upgrades
More bullish view on JASs business outlook and operating leverage effect We visited Jasmine International Pcl (JAS) last week and came away with a more bullish view on its business outlook and strength of the operating leverage effect. While revenue continues to grow by around 12% p.a., costs are up by far less proportionately. Note that JASs revenue growth is not very strong due to a falling contribution from its ICT turnkey business. The broadband business, however, still offers robust revenue growth which we estimate at 19% both in 2013 and 2014. Thanks to better-than-expected gross margin and SG&A to sales, we boost our assumptions for JASs EBIT margin from 33% to 35% in 2013F, 36% to 40% in 2014F and 39% to 42% in 2015F. Our earnings forecasts are thus raised by 13-18% in 201315 and our 12-month DCF-based TP lifted from Bt8.0 to Bt11.40/share. The broadband business is highly capital intensive and JAS passed its heavy capex cycle back in 2012 when capex was cut by half to Bt2bn p.a. Together with economies of scale from larger numbers of broadband subscribers, operating leverage has had a greater effect than wed previously expected.

We therefore raise our core earnings forecasts by 1318% in 2013-15

Ex 1: Changes In Key Assumptions And Earnings Revisions

2013F Additional subscribers (people) - New - Old - Change (%) EBIT margin (%) - New - Old - Change (pts) Normalized profit (Bt m) - New - Old - Change (%)
Source: Thanachart estimates Note: * We assume JASs ARPU is cut in 2015 to stimulate broadband demand after CTH enters the market

2014F 225,000 225,000

2015F 268,008* 205,000 30.7

218,000 235,000 (7.2)

35.2 33.2 2.0

39.7 36.3 3.4

41.6 38.7 2.9

3,157 2,778 13.6

4,229 3,597 17.6

5,020 4,435 13.2

We reaffirm our BUY rating on JAS for the following reasons: We reaffirm our BUY call to a higher TP of Bt11.40/share First, we believe the broadband industry in Thailand is still early on in its growth phase with strong and sustainable demand growth while broadband supply is still limited to three operators. Cable Thai Holding Pcl (CTH), which wants to diversify its business into the broadband market, is not a real threat to JAS, in our view. Second, given an increase in the number of broadband subscribers and benefits from the operating leverage effect, we estimate JASs three-year EPS CAGR at 35%. We also forecast ROE to keep rising from 26% in 2012 to 33% in 2013 and 37% in 2014. Third, with a strong, sustainable cash inflow business that has already passed its heavy capex cycle, we estimate JAS should turn to be a net cash company in 2015. We forecast JASs dividend yield at 3-6% in 2013-15. Lastly, we see JAS as one of the cheapest consumer plays in Thailand trading at PE multiples of 17.8x in 2013F and 13.2x in 2014F versus forecast EPS growth of 54% and 35% in those years.

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Ex 2: EBIT Margin Enjoys Operating Leverage Effect

(%) 45 40 35 30 25 20 15 10 5 0 2010 2011 2012 2013F 2014F 2015F Sales mix impact Operating leverage effect

Ex 3: EPS Grows Strongly Over The Next Few Years

(Bt/share) 0.8 0.7 0.6 0.5 0.4 0.3 0.2 0.1 0.0 2010 2011 2012 2013F 2014F 2015F

Sources: Company data; Thanachart estimates

Sources: Company data; Thanachart estimates

Good business momentum

We see JASs subscribers continuing to grow by 1618% in 2013F-15F The broadband business in Thailand, in our view, should continue to see stable growth over the next few years and we forecast JASs broadband subscribers to rise by 16-18% in 2013-15 due to strong broadband demand and limited new supply. With only a 22% broadband internet penetration rate in Thailand in 2012, given peoples rising incomes and changes in consumer behavior, we see broadband internet demand in Thailand as still having lots of room to grow. supported by strong demand, limited supply Meanwhile, broadband competition in Thailand is still limited to three operators, JAS, the loss-making True Corporation Pcl (TRUE TB, Bt8.30, SELL) and state-owned enterprise TOT, as the broadband business is by nature capital intensive. Meanwhile, CTH, which wants to diversify its business into the broadband market, does not pose a real threat to JAS, in our view, as we discuss in the next section. In addition, in an attempt to secure market position ahead of the new competition, JAS began service of its higher-speed product, Fiber-To-The Home (FTTH) which provides a speed of 30Mb @ Bt1,200/subscriber/month in 2Q13. Note that JAS started to promote its FTTH product in early 1Q13 and it was able to get around 10,000 customer applications as of the end of 1Q13. We forecast the FTTH proportion to rise from 1% of JASs total subscribers in 2013 to 5% in 2015, which would help support margin as FTTH pricing is 2x that of ADSL (10Mb speed @ Bt590/subscriber/month) at a similar service cost.

and JASs new higherspeed product, FTTH

Ex 4: Broadband Penetration Rate In Thailand Is Low

(%) 120 100 80 60 40 20 0 Hong Kong Thailand Phillippines Singapore S. Korea Vietnam Taiwan

Ex 5: JAS Gains Share In Broadband Market

(%) 120 100 80 60 40 20 0 2009 3Q12 22 35 28 TRUE 5 38 JAS TOT Others 3 33

36

Source: TRUE

Source: National Broadcasting and Telecommunications Commission

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Ex 6: JASs Broadband Subscribers Still Growing

(m subs.) 3.0 2.5 2.0 1.5 1.0 0.5 0.0 2012 2013F 2014F 2015F 2016F 2017F 2018F ADSL FTTH

Ex 7: Proportion Of FTTH Subscribers Is Rising

(%) 100 90 80 70 60 50 40 30 20 10 0 2012 2013F 2014F 2015F 2016F 2017F 2018F ADSL FTTH

Sources: Company data; Thanachart estimates

Sources: Company data; Thanachart estimates

Our view on the new competition

We dont see CTH presenting a real threat to JAS The market concern over JAS involves the potential new player, non-listed CTH, which plans to offer both cable and broadband services. We still dont believe CTH would present a real threat to JAS before 2015, beyond which CTH may opt for a friendly competitive environment. First, CTH has just invested Bt10bn to get the rights to broadcast the English Premier League (EPL) for three seasons from August 2013-May 2016. We thus see CTHs cable TV business as its first priority with its broadband business coming later. Secondly, fiber-optic (backbone and last mile) requires heavy capex and CTH may not invest by itself given its already huge payout for the EPL rights. A partnership investment model would take time as CTH doesnt own cable subscribers itself but via hundreds of local cable TV operator partners. The renting fiber-optic model isn't a solid long-term business model, in our view, and it still requires a lot of network capex. Note that CTH has leased its core fiber optics from Symphony Pcl (SYMC TB, Bt19.90, SELL) and TOT to provide its cable TV service. However, given that the lastmile copper of CTHs local cable TV partners is unable to provide high definition (HD) service, CTH therefore needs to lease satellite bandwidth to provide this service. 3) We expect CTH to need two years to develop its core network Thirdly, assuming CTH can raise the funds to finance its new investment in the broadband business, we see it still needing two years to develop its own core fiberoptic network and build its broadband service team and service center.

1) Cable TV business is CTHs priority, in our view

2) Broadband business requires heavy capex

Strong 1Q13F results a short-term catalyst

We forecast JASs 1Q13 core profits to grow strongly We forecast JASs 1Q13 core profits to grow by 58% y-y and 19% q-q to Bt670m with key earnings growth drivers being growing broadband subscriber numbers, rising gross margin and falling SG&A to sales. According to JAS, the companys new ADSL subscribers came to around 43,000 with an FTTH backlog of around 10,000 in 1Q13, bringing JASs total subscribers to 1.27m at the end of 1Q13. Meanwhile, we expect ARPU to be flat from last year at Bt570/month. With the companys operating leverage effect, we project JASs operating margin to rise from 27.2% in 1Q12 and 31.0% in 4Q12 to 33.0% in 1Q13. We expect the companys strong forecast operational performance in 1Q13 to be a key catalyst for its share price apart from our expectation for it to enjoy robust fundamentals over the longer term.

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Ex 8: DCF-based TP Calculation
(Bt m) EBITDA Free cash flow PV of free cash flow 2013F 5,731 2,962 2,954 2014F 7,022 4,105 3,333 2015F 7,957 5,097 3,730 2016F 9,631 5,922 3,904 2017F 11,137 7,154 4,249 2018F 11,578 7,808 4,179 2019F 13,004 8,749 4,219 2020F 14,134 9,769 4,244 2021F 14,989 10,558 4,133 2022F 15,676 11,192 3,948 2023F 16,219 11,701 3,719 2024F 16,708 12,130 3,473 Terminal value 137,783 39,447

Risk-free rate (%) Market risk premium (%) Beta Wacc (%) Terminal growth (%)

4.0 8.0 1.0 11.0 2.0

Enterprise value - add investments Net debt Minority interest Equity value

85,532 3,433 1,020 81,078

# of shares Equity value / share

7,137 11.40

Source: Thanachart estimates

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COMPANY DESCRIPTION
JASs major businesses today are classified into four groups: 1) broadband business providing broadband internet services under the brand 3BB; 2) telecom network and service provider businesses offering services on optical fiber networks; 3) system integration business providing turnkey solutions; and 4) other businesses such as property and offices for rent. They contributed 76%, 12% and 12% and 1% in 2012, respectively. JASs major shareholder is Mr. Pete Bodharamik who owns around a 25.5% stake in the company.
Source: Thanachart

COMPANY RATING
F ina nc ia l m a na ge m e nt

Rating Scale
Very Strong
R is k m a na ge m e nt

M a na ge m e nt

5 4 3 2 1 0

5 4 3 2 1 0

Strong Good Fair

Liquidit y

*C o rp. go v e rna nc e

Weak None

Source: Thanachart; *CG Awards

THANACHARTS SWOT ANALYSIS S Strength One of the big three broadband internet providers. Strong sustainable cash-flow stream business. Full core fiber-optic network nationwide coverage. W Weakness No other complementary services such as mobile services on 2G and 3G networks.

O Opportunity Low internet usage penetration rate in Thailand. Rising incomes and changes in consumer lifestyles, particularly in the provinces.

T Threat Fully integrated service of TRUE (broadband, Wi-Fi, mobile phone (2G and 3G), fixed-line phone and cable TV). Lower 3G service prices in the future. More new players entering the broadband internet market over the long term.

Rising demand for higher-speed internet due to increasing heavy multimedia, content and applications.

Cheaper fiber-optic network investment costs.

CONSENSUS COMPARISON
Consensus Target price (Bt) Net profit 13F (Bt m) Net profit 14F (Bt m) Consensus REC 7.75 2,861 3,616 BUY: 11 Thanachart 11.40 3,227 4,229 HOLD: 1 Diff 47% 13% 17% SELL: 1

RISKS TO OUR INVESTMENT CASE

Lower number of subscribers either for its broadband or Wi-Fi businesses. Fiercer-than-expected competition in the broadband business which may lead to price cuts.

HOW ARE WE DIFFERENT FROM THE STREET?

Our earnings forecast and DCF-based TP are above the Streets due to our more bullish view on JASs operating leverage effect and higher numbers of broadband subscribers.

Sources: Bloomberg consensus, Thanachart

Source: Thanachart

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FINANCIAL SUMMARY
Incom e State m e nt
FY ending Dec (Bt m) Sales Cost of sales Gro ss pro f it SG&A Operating pro fit Depre & amortization EB IT D A Other income Other expenses Interest expense Pre-tax profit Income tax After-tax profit Equity income M inority interests Extraordinary items N ET P R OF IT N o rmalized pro fit EPS (Bt) Normalized EPS (Bt) (consolidated) Quar te rly Earnings (consolidated)

2011A 2012A
9,498 4,638 4,860 2,504 2,356 1 ,851 4,207 85 (337) (468) 1 ,636 494 1 ,1 43 (0) 27 (97) 1,073 1,170 0.1 0.2 1 0,369 4,686 5,683 2,558 3,126 1 ,71 5 4,841 61 (266) (404) 2,51 6 530 1 ,987 0 78 71 2,137 2,065 0.3 0.3

2013F
1 1 ,341 4,773 6,569 2,580 3,988 1 ,743 5,731 65 0 (308) 3,745 674 3,071 0 86 70 3,227 3,157 0.4 0.4

2014F
1 3,092 5,1 85 7,907 2,71 0 5,197 1 ,825 7,022 72 0 (202) 5,068 938 4,1 30 0 99 0 4,229 4,229 0.6 0.6

2015F
1 4,481 Sales 5,604 Cost of sales 8,877 6,024 7,957 Gro ss pro fit Operat ing pro fit EB IT D A 2,853 SG&A 1 ,933 Depre & amortization 97 Other income 0 Other expenses (96) Interest expense 6,025 Pre-tax profit 1 ,1 1 5 Income tax 4,91 0 After-tax profit 0 Equity income 1 09 M inority interests 0 Extraordinary items 5,020 N ET P R OF IT 5,020 N o rmalized pro fit 0.7 EPS (Bt) 0.7 Normalized EPS (Bt)

4Q11
2,41 3 1 ,075 1,338 729 609 422 1,031 22 (1 5) (1 21 ) 503 1 22 381 (0) (5) (37) 339 376 0.0 0.1

1Q12
2,371 1 ,054 1,317 673 644 41 5 1,060 5 0 (1 01 ) 558 1 37 420 0 3 42 466 424 0.1 0.1

2Q12
2,425 1 ,041 1,384 633 751 425 1,176 4 0 (1 04) 661 1 1 3 548 0 (9) (67) 472 539 0.1 0.1

3Q12
2,565 1 ,1 30 1,435 636 799 432 1,231 7 0 (1 03) 708 1 60 548 0 (1 0) 79 616 537 0.1 0.1

4Q12
3,007 1 ,460 1,547 61 6 931 443 1,374 1 2 (266) (95) 590 1 1 9 471 0 95 1 7 582 566 0.1 0.1

Balance She e t
FY ending Dec (Bt m) Cash & equivalent A/C receivables Inventories Other current assets Investment Fixed assets Other assets T o tal assets S-T debt A/C payables Other current liabilities L-T debt Other liabilities T o tal liabilit ies

(consolidated) Financial Ratios And V aluations

2011A 2012A
1 ,581 3,970 70 1 ,691 38 1 1 ,573 537 19,460 3,206 5,760 886 1 ,320 1 88 11,360 1 ,479 3,685 49 2,072 685 1 1 ,078 354

2013F
1 ,500 3,729 50 2,1 81 685 1 1 ,335 387

2014F
1 ,500 3,946 54 2,378 685 1 1 ,51 1 447

2015F
2,500 Norm profit (y-y%) 3,967 Normalized EPS (%) 58 Net profit (y-y%) 2,535 EPS (%) 685 Dividend payout (%) 1 1 ,578 494 Gross margin (%) 21,818 Operating margin (%) EBITDA margin (%) 463 Net margin (%) 3,071 1 ,847 ROA (%) 41 9 ROE (%) 81 7 Net D/E (x) 6,617 Norm PE (x)

2011A 2012A
1 08.8 1 20.1 61 .7 70.4 1 6.9 51 .2 24.8 44.3 1 2.0 6.0 1 7.1 0.4 48.5 70.5 52.9 1 4.2 8.0 0.3 1 .0 0.0 76.6 76.9 99.2 99.5 30.5 54.8 30.1 46.7 1 9.2 1 0.6 26.1 0.4 27.4 39.8 26.5 1 2.4 6.5 1 .2 1 .2 0.1

2013F
52.8 53.7 51 .0 51 .9 55.0 57.9 35.2 50.5 27.1 1 6.1 33.1 0.2 1 7.8 25.9 1 7.5 1 0.2 5.4 3.2 1 .5 0.2

2014F
34.0 34.7 31 .1 31 .8 60.0 60.4 39.7 53.6 31 .5 20.9 37.0 0.0 1 3.2 1 9.2 1 3.2 8.0 4.5 4.5 1 .7 0.4

2015F
1 8.7 1 8.7 1 8.7 1 8.7 70.0 61 .3 41 .6 54.9 33.9 23.7 37.2 (0.1 ) 1 1 .2 1 6.2 1 1 .2 6.8 3.9 6.3 2.0 0.5

19,401 19,867 20,520 1 ,676 2,656 1 ,536 3,236 585 9,690 1 ,761 2,61 5 1 ,369 2,1 39 640 8,525 91 0 2,841 1 ,760 954 739 7,204

M inority interest Shareho lders' equity Working capital Total debt Net debt Free cash flow Year End Shares (m)

985 7,114 (1 ,720) 4,526 2,945 (720) 7,228

1 ,020 8,692 1 ,078 4,91 2 3,433 597 7,21 6

934 10,408 1 ,1 63 3,901 2,401 2,452 7,1 76

835

726 Norm PE at TP (x) EV/EBITDA (x)

12,481 14,475 PE (x) 1 ,1 59 1 ,864 364 4,1 54 7,1 37 955 P/BV (x) 882 Dividend yield (%) (1 ,61 8) 4,977 BV/share (Bt) 7,1 37 DPS (Bt)

Sources: Company data, Thanachart estimates

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This report is not intended or directed for distribution to, or use by any person, citizen or entity which is resident or located in any state or country or jurisdiction where such publication, distribution or use would be contrary to any statutory legislation, or regulation which would require Thanachart Securities, DAIWA and their affiliates/ group companies to any registration or licensing requirements. The views expressed in the report accurately reflect the analysts personal views about the securities and issuers that are subject of the Report, and that no part of the analysts compensation was, is or will be directly or indirectly, related to the recommendations or views expressed in the Report. This report does not recommend to US recipients the use of Daiwa Capital Markets India Private Limited or any of its non US affiliates to effect trades in any securities and is not supplied with any understanding that US recipients will direct commission business to Daiwa Capital Markets India Private Limited. Taiwan This research is distributed in Taiwan by Daiwa-Cathay Capital Markets Co., Ltd and it may only be distributed in Taiwan to institutional investors or specific investors who have signed recommendation contracts with Daiwa-Cathay Capital Markets Co., Ltd in accordance with the Operational Regulations Governing Securities Firms Recommending Trades in Securities to Customers. Recipients of this research in Taiwan may contact Daiwa-Cathay Capital Markets Co., Ltd in respect of any matter arising from or in connection with the research. Philippines This research is distributed in the Philippines by DBP-Daiwa Capital Markets Philippines, Inc. which is regulated by the Philippines Securities and Exchange Commission and the Philippines Stock Exchange, Inc. Recipients of this research in the Philippines may contact DBP-Daiwa Capital Markets Philippines, Inc. in respect of any matter arising from or in connection with the research. DBP-Daiwa Capital Markets Philippines, Inc. recommends that investors independently assess, with a professional advisor, the specific financial risks as well as the legal, regulatory, tax, accounting, and other consequences of a proposed transaction. DBP-Daiwa Capital Markets Philippines, Inc. may have positions or may be materially interested in the securities in any of the markets mentioned in the publication or may have performed other services for the issuers of such securities. For relevant securities and trading rules please visit SEC and PSE Link at http://www.sec.gov.ph/irr/AmendedIRRfinalversion.pdf and http://www.pse.com.ph/ respectively. United Kingdom This research report is distributed by Daiwa Capital Markets Europe Limited in the European Union, Iceland, Liechtenstein, Norway and Switzerland. Daiwa Capital Markets Europe Limited is authorised and regulated by The Financial Conduct Authority (FCA) and is a member of the London Stock Exchange, Eurex and NYSE Liffe. Thanachart Securities, Daiwa Capital Markets Europe Limited and their respective affiliates may, from time to time, to the extent permitted by law, participate or invest in other financing transactions with the issuers of the securities referred to herein (the Securities), perform services for or solicit business from such issuers, and/or have a position or effect transactions in the Securities or options thereof and/or may have acted as an underwriter during the past twelve months for the issuer of such securities. In addition, employees of Thanachart Securities, Daiwa Capital Markets Europe Limited and their respective affiliates may have positions and effect transactions in such securities or options and may serve as Directors of such issuers. Thanachart Securities and Daiwa Capital Markets Europe Limited may, to the extent permitted by applicable UK law and other applicable law or regulation, effect transactions in the Securities before this material is published to recipients. This publication is intended for investors who are not Retail Clients in the United Kingdom within the meaning of the Rules of the FCA and should not therefore be distributed to such Retail Clients in the United Kingdom. Should you enter into investment business with Daiwa Capital Markets Europes affiliates outside the United Kingdom, we are obliged to advise that the protection afforded by the United Kingdom regulatory system may not apply; in particular, the benefits of the Financial Services Compensation Scheme may not be available. Daiwa Capital Markets Europe Limited has in place organisational arrangements for the prevention and avoidance of conflicts of interest. Our conflict management policy is available at http://www.uk.daiwacm.com/about-us/corporate-governance-and-regulatory . Regulatory disclosures of investment banking relationships are available at https://daiwa3.bluematrix.com/sellside/Disclosures.action .

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United States This report is distributed in the U.S. by Daiwa Capital Markets America Inc. (DCMA). It may not be accurate or complete and should not be relied upon as such. It reflects the preparers views at the time of its preparation, but may not reflect events occurring after its preparation; nor does it reflect Thanachart Securities or DCMAs views at any time. Neither Thanachart Securities, DCMA nor the preparer has any obligation to update this report or to continue to prepare research on this subject. This report is not an offer to sell or the solicitation of any offer to buy securities. Unless this report says otherwise, any recommendation it makes is risky and appropriate only for sophisticated speculative investors able to incur significant losses. Readers should consult their financial advisors to determine whether any such recommendation is consistent with their own investment objectives, financial situation and needs. This report does not recommend to U.S. recipients the use of any of Thanachart Securities or DCMAs non-U.S. affiliates to effect trades in any security and is not supplied with any understanding that U.S. recipients of this report will direct commission business to such non-U.S. entities. Unless applicable law permits otherwise, non-U.S. customers wishing to effect a transaction in any securities referenced in this material should contact a Daiwa entity in their local jurisdiction. Most countries throughout the world have their own laws regulating the types of securities and other investment products which may be offered to their residents, as well as a process for doing so. As a result, the securities discussed in this report may not be eligible for sales in some jurisdictions. Customers wishing to obtain further information about this report should contact DCMA: Daiwa Capital Markets America Inc., Financial Square, 32 Old Slip, New York, New York 10005 (telephone 212-612-7000). Ownership of Securities For Ownership of Securities information please visit BlueMatrix disclosure Link at https://daiwa3.bluematrix.com/sellside/Disclosures.action . Investment Banking Relationships For Investment Banking Relationships please visit BlueMatrix disclosure link at https://daiwa3.bluematrix.com/sellside/Disclosures.action . DCMA Market Making For DCMA Market Making please visit BlueMatrix disclosure link at https://daiwa3.bluematrix.com/sellside/Disclosures.action . Research Analyst Conflicts For updates on Research Analyst Conflicts please visit BlueMatrix disclosure link at https://daiwa3.bluematrix.com/sellside/Disclosures.action. The principal research analysts who prepared this report have no financial interest in securities of the issuers covered in the report, are not (nor are any members of their household) an officer, director or advisory board member of the issuer(s) covered in the report, and are not aware of any material relevant conflict of interest involving the analyst or DCMA, and did not receive any compensation from the issuer during the past 12 months except as noted: no exceptions. Research Analyst Certification For updates on Research Analyst Certification and Rating System please visit BlueMatrix disclosure link at https://daiwa3.bluematrix.com/sellside/Disclosures.action . The views about any and all of the subject securities and issuers expressed in this Research Report accurately reflect the personal views of the research analyst(s) primarily responsible for this report (or the views of the firm producing the report if no individual analysts[s] is named on the report); and no part of the compensation of such analyst(s) (or no part of the compensation of the firm if no individual analyst[s)] is named on the report) was, is, or will be directly or indirectly related to the specific recommendations or views contained in this Research Report. For stocks in Thailand covered by Thanachart Securities, the following rating system is in effect: Ratings are based on absolute upside or downside, which is the difference between the target price and the current market price. If the upside is 10% or more, the rating is BUY. If the downside is 10% or more, the rating is SELL. For stocks where the upside or downside is less than 10%, the rating is HOLD. Unless otherwise specified, these ratings are set with a 12-month horizon. Thus, it is possible that future price volatility may cause a temporary mismatch between upside/downside for a stock based on the market price and the formal rating. For the sector, Thanachart looks at two areas, ie, the sector outlook and the sector weighting. For the sector outlook, an arrow pointing up, or the word Positive, is used when Thanachart sees the industry trend improving. An arrow pointing down, or the word Negative, is used when Thanachart sees the industry trend deteriorating. A double-tipped horizontal arrow, or the word Unchanged, is used when the industry trend does not look as if it will alter. The industry trend view is Thanacharts top-down perspective on the industry rather than a bottom-up interpretation from the stocks that Thanachart covers. An Overweight sector weighting is used when Thanachart has BUYs on majority of the stocks under its coverage by market cap. Underweight is used when Thanachart has SELLs on majority of the stocks it covers by market cap. Neutral is used when there are relatively equal weightings of BUYs and SELLs]. Ownership of Securities For Ownership of Securities information, please visit BlueMatrix disclosure Link at https://daiwa3.bluematrix.com/sellside/Disclosures.action . Investment Banking Relationships For Investment Banking Relationship, please visit BlueMatrix disclosure Link at https://daiwa3.bluematrix.com/sellside/Disclosures.action . Relevant Relationships (TNS) TNS may from time to time have an individual employed by or associated with it serves as an officer of any of the companies under its research coverage. TNS market making TNS may from time to time make a market in securities covered by this research. Additional information may be available upon request.

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Japan - additional notification items pursuant to Article 37 of the Financial Instruments and Exchange Law (This Notification is only applicable where report is distributed by Daiwa Securities Co. Ltd.)

If you decide to enter into a business arrangement with us based on the information described in materials presented along with this document, we ask you to pay close attention to the following items. In addition to the purchase price of a financial instrument, we will collect a trading commission* for each transaction as agreed beforehand with you. Since commissions may be included in the purchase price or may not be charged for certain transactions, we recommend that you confirm the commission for each transaction. In some cases, we may also charge a maximum of 2 million (including tax) per year as a standing proxy fee for our deposit of your securities, if you are a non-resident of Japan. For derivative and margin transactions etc., we may require collateral or margin requirements in accordance with an agreement made beforehand with you. Ordinarily in such cases, the amount of the transaction will be in excess of the required collateral or margin requirements. There is a risk that you will incur losses on your transactions due to changes in the market price of financial instruments based on fluctuations in interest rates, exchange rates, stock prices, real estate prices, commodity prices, and others. In addition, depending on the content of the transaction, the loss could exceed the amount of the collateral or margin requirements. There may be a difference between bid price etc. and ask price etc. of OTC derivatives handled by us. Before engaging in any trading, please thoroughly confirm accounting and tax treatments regarding your trading in financial instruments with such experts as certified public accountants.

*The amount of the trading commission cannot be stated here in advance because it will be determined between our company and you based on current market conditions and the content of each transaction etc. When making an actual transaction, please be sure to carefully read the materials presented to you prior to the execution of agreement, and to take responsibility for your own decisions regarding the signing of the agreement with us. Corporate Name: Daiwa Securities Co. Ltd. Financial instruments firm: chief of Kanto Local Finance Bureau (Kin-sho) No.108 Memberships: Japan Securities Dealers Association, The Financial Futures Association of Japan Japan Investment Advisers Association Type II Financial Instruments Firms Association

Thanachart Securities Pcl. Research Team 28 Floor, Siam Tower Unit A1 989 Rama 1, Pathumwan Road, Bangkok 10330 Tel: 662 617-4900

Pimpaka Nichgaroon, CFA Head of Research Economics & Strategy pimpaka.nic@thanachartsec.co.th Sarachada Sornsong Banks, Telecom sarachada.sor@thanachartsec.co.th Phannarai Tiyapittayarut Property, Retail phannarai.von@thanachartsec.co.th Warayut Luangmettakul, CFA Assistant Analyst warayut.lua@thanachartsec.co.th

Supanna Suwankird Energy, Utilities supanna.suw@thanachartsec.co.th

Siriporn Arunothai Ad Hoc Research, Healthcare siriporn.aru@thanachartsec.co.th

Saksid Phadthananarak Electronics, Construction, Transportation saksid.pha@thanachartsec.co.th Kalvalee Thongsomaung Food, Hotel, Media kalvalee.tho@thanachartsec.co.th

Noppadol Pririyawut Senior Technical Analyst noppadol.pri@thanachartsec.co.th Adisak Phupiphathirungul, CFA Retail Market Strategy adisak.phu@thanachartsec.co.th

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