Professional Documents
Culture Documents
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Philippines Asian Average Southeast Asia Indonesia India Japan China Philippines+India+Cambodia+Nepal
SOURCE: World Population Prospects: The 2012 Revision , UN Population Division
In fact, the Philippines is in the early stages of reaping the benefits of this
demographic sweet spot. Based on historical data, every time Asian economies
enter this demographic dividend, it always coincides with the strongest level of
economic growth.
For instance Japan entered this range back in 1965, South Korea in 1985, China
in 1990, and Indonesia in 2005, and in each case, a strong economic boom will
follow that could last for the subsequent few decades. For the Philippines, this
demographic window should open in 2015 and would probably last for the next
three decades.
Figure 31: Asian demographic windows
1960 1970 1980 1990 2000 2010 2020 2030 2040 2050 2060
Japan
Hong Kong
Singapore
South Korea
China
Thailand
Indonesia
Vietnam
Malaysia
India
Philippines
1965 1995
1980
2015
1980
2015
1985 2020
1990 2025
1995
2030
2005 2040
2005
2040
2010
2045
2010 2050
2015
2050
SOURCE: UN Population to 2030, UN World Population Prospects
Based on historical data, the
strongest level of economic growth
coincides with demographic
windows
8990 Holdings, Inc.
June 11, 2014
19
Demographic dividends only dipped during the 1970s which was due to efforts
in Asia to adopt population control. Since that time this has steadily increased
and is projected by the UN to peak by 2025 and trend lower by 2050. Even for
another high growth country like Indonesia, it will lose some of this
demographic dividend by 2050.
The Philippines, together with some Asian neighbours like India. Cambodia
and Nepal, are a different matter, with their steady population growth, high
fertility rates and growing share of working age population expected to remain
in place up to 2050, according to UN projections.
Figure 32: 20-64 age group 10yr annual growth rates (%)
Title:
Source:
Please fill in the values above to have them entered in your report
2.7
2.1
1.8 1.8
1.5
1.5
1.4
1.3
1.1
1.0 1.0
1.0
0.9
0.7
0.6
0.1
0.0
0.0
-0.2
-0.4
-0.8
-1.5
-1.0
-0.5
0.0
0.5
1.0
1.5
2.0
2.5
3.0
SOURCE: World Population Prospects: The 2012 Revision , UN Population Division
2.3 Credit rating upgrades confirm bullish outlook on the
Philippines
The rating upgrades by S&P, Moodys, and Fitch, of sovereign debt to
investment grade highlight the remarkable turnaround in growth. For quite a
few decades, the Philippines was regarded as the Sick Man of Asia whose
lethargic growth and capacity to consistently disappoint in a region of
fast-growing economies had basis. The figure below shows the variability of
growth, as the average growth from the post-World War 2 to the 1970s was
5.8%, then steeply dropped off in the 1980s to just 2% at a time when the rest of
Asia was averaging 7%, and then a steady three decade climb back to 6% by the
2010s.
Figure 33: Philippine GDP growth trend
Title:
Source:
Please fill in the values above to have them entered in your report
-4.0
-2.0
0.0
2.0
4.0
6.0
8.0
10.0
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Seasonally Adjusted GDP (YoY, %) Real GDP (YoY,%) Long-Term Historical Ave. = 5.3%
SOURCE: National Statistical Coordination Board
8990 Holdings, Inc.
June 11, 2014
20
Remittances are also seen to average at the $2bn per month mark next year
which is another milestone. Consider that it took 17 years (1990-2006) for
remittances to go from $100m per month to $1bn, and it took only 9 years
(2006-2014) to add another billion. About a fifth of consumption and more
than 15% of GDP is the share of remittances.
Figure 34: Remittances in terms of GDP and domestic consumption
Title:
Source:
Please fill in the values above to have them entered in your report
0
5
10
15
20
25
1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
% of GDP % of Consumption
SOURCES: National Statistical Coordination Board
Figure 35: Economic buffers (as % GDP)
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
BPO Revenues 1.4 1.9 2.4 2.9 3.6 4.9 5.0 5.4 5.2 5.4 5.3 5.4 5.6 5.7
Change in Gross Reserves -0.9 2.2 3.7 7.2 2.2 4.0 8.9 6.1 3.3 -0.3 1.2 1.0 0.9 0.8
OFW Remittances 9.4 10.4 10.4 9.7 9.5 10.3 9.4 9.0 8.6 8.0 7.1 6.6 6.1 5.7
Tourism Receipts 2.2 2.2 2.7 3.2 1.4 1.3 1.2 1.3 1.5 1.8 1.8 1.8 1.8 1.8
Total Buffers 12.1 16.7 19.2 23.0 16.7 20.5 24.6 21.8 18.5 14.9 15.3 14.9 14.4 13.9
Total Buffers (in $ bn) 11.0 17.2 23.5 34.4 29.0 34.5 49.1 48.8 46.4 42.2 52.3 58.1 64.6 72.1
SOURCE: BSP, BPOAP, DOT, SB EQUITIES
2.4 Local industry competition
The local real estate development industry is primarily dominated by
publicly-listed developers in terms of size of developments and presence. A key
characteristic of this group is their focus on the PHP1.5m and up price range,
which puts them on the upper low-cost all the way to the high-end market
segments. As such, these companies do not compete directly with 8990, whose
selling prices fall within the PHP450,000 to PHP1.25m range.
Private developers, on the other hand, compete with 8990 in the PHP450,000
to PHP1.25m price range but they tend to be more fragmented across the areas
in which 8990 has some presence. It is also worth noting that this group does
not have the scale and scope that 8990 provides, as 8990 appears to be more of
a national mass housing player than a provincial one.
Larger publicly-listed developers
tend to be nationwide in scope and
focused on the upper low cost to
high-end segment
Private developers tend to be
localised and focused on the mass
market segment
8990 Holdings, Inc.
June 11, 2014
21
Figure 36: Publicly-listed developers Figure 37: Private developers
Company Location
Ayala Land Inc. Nationwide
Century Properties Group Inc Nationwide
Filinvest Land Inc Nationwide
Megaworld Corp Nationwide
Robinsons Land Corp Nationwide
SM Prime Holdings Inc Nationwide
Vista Land & Lifescapes Inc Nationwide
Company Location
Johndorf Cebu
ProHomes Cebu
Foothills Development Corp Davao
HLC Development Corp Davao
ProFriends Cavite, Iloilo
Ion Realty Iloilo
Happy Homes Iloilo
San Raphael Realty Iloilo
Hausland Pampanga
Fiesta Communities Pampanga
El Valerio Realty Pampanga
ProFriends Cavite
Homemark Development Cavite
Picar Development Cavite
Rudex Cavite
Masaito Cavite
New APEC Cavite
SOURCE: COMPANY REPORTS SOURCE: COMPANY REPORTS
8990 Holdings, Inc.
June 11, 2014
22
3. RISKS
3.1 Regulatory environment
Real estate development is highly-regulated and the company is no exception in
having to follow those rules. Approvals of development plans from regulatory
bodies are required prior to construction. The company is also expected to
adhere to environmental laws or else have their permits revoked.
Most of the regulation entails for close coordination with Housing and Land
Use Regulatory Board (HLURB) to cover development and sales of subdivisions
or condominiums.
Mass housing companies operating in the Philippines need to act in concert
with the Home Development Mutual Fund (Pag-IBIG Fund) as they provide
loans to fund members which are usually a necessity in the case of low cost
housing buyers.
The Pag-IBIG Fund has slowed down its loan take outs due to changes in the
administration, making processing stricter and longer, but has recently
indicated a desire to accept more loans to address the large housing backlog.
Figure 38: Pag-IBIG proceeds from member contributions (PHP bn)
Title:
Source:
Please fill in the values above to have them entered in your report
16.8
17.4
19.8
22.2
24.3
0
5
10
15
20
25
30
2008 2009 2010 2011 2012
SOURCE: COMPANY REPORTS
Another regulatory risk lies with the governments interpretation of Republic
Act 7279 or the Urban Development and Housing Act, which provides tax
incentives to private developers and government agencies engaged in the
development of socialised housing projects. The Executive Order No. 226, or
the Omnibus Investments Code of 1987, also has directed the Board of
Investments (BOI) to provide incentives such as Income Tax Holidays (ITH) to
private developers who will venture into mass housing projects.
8990 enjoys some degree of tax incentives as most of its projects are licensed
under BP 220 or the mass housing law. In recent years, however, the
governments tax authority has been reviewing this legislation, with the
intention of cracking down on unscrupulous private developers who take
advantage of these incentives but do not hold up their end of the bargain, i.e.
mass housing for the lower income segment. This has resulted in stricter
processing of applications for social housing projects by developers.
The company is confident that its current projects fall under the mass housing
category, as it has applied for mass housing status from the Housing and Land
Use Regulatory Board (HLURB) for its low cost housing projects and have also
gotten approvals for the same.
8990 coordinates with HLURB and
Pag-IBIG, among others, on
housing regulation and policies
8990 Holdings, Inc.
June 11, 2014
23
3.2 Financial
The companys CTS Gold financing programmes have been very successful in
enticing qualified buyers to purchase units from 8990 with a monthly
amortisation of around PHP8,000 a month with an interest rate of 8.5% for
CTS Gold Convertible and 11.5%. for CTS Gold Straight. The company is able to
offer reasonable rates by stretching its mortgage duration to 25 years. Strong
collection measures enable the company to reduce its customer default risk by
taking proactive approaches and keep delinquency rates at 3.2% in 2013.
The CTS Gold scheme, while extremely efficient in luring mass housing
customers and allowing buyers the opportunity to build up their credit profile
for at least two years before the company can transfer their contracts-to-sell,
has also the downside of increasing accounts receivables at a pace in lock step
with its increase in annual sales.
The company realises that it can unlock value from its growing receivables by
trying to push for large loan take-outs for its buyers under the governments
Pag-IBIG Fund and exploring securitisation options. These measures, should it
prove successful, would serve a dual purpose, by providing the company with
more cash to fund its expansion and also to keep the companys balance sheet
in a healthy position.
3.3 Industry
The real estate industry in the Philippines is a tale of open market and mass
housing sub-industries. Land acquisitions of the right size and price will
continue to be a challenge even in the provinces. 8990s landholdings are
mostly within the outskirts of the city proper, which lessens the price
acquisition costs of the company.
There is also a risk of a larger property developer trying to enter the mass
housing business. The company is confident that its pre-cast building
technology, CTS Gold financing programme, and experience in the mass
housing market, makes it a frontrunner in the segment, allowing it to defend its
market share in the country.
3.4 Economic
We do not discount the possibility that the company will be affected by changes
in the economic climate as the real estate housing industry is prone to property
cycles where there is a characteristic boom-slump-recovery cycle.
The mass housing market is currently looking at a historical housing backlog of
3.1m from 2001 to 2011, and a conservative estimate of 1.5m from 2012 to 2022.
Despite this, market sentiment on real estate can shift depending on the
interaction of supply and demand, as well as external factors (e.g. property
financing, media coverage, regulatory issues, etc.), which could then affect the
take up of new real estate developments.
The company has existing take-out
arrangements with Pag-IBIG to
unlock value from receivables
8990 Holdings, Inc.
June 11, 2014
24
4. SWOT ANALYSIS
4.1 SWOT table
Figure 39: SWOT analysis
Strengths Opportunities
Pre-cast technology allows for construction efficiencies and scalability Mass housing backlog expected to reach 4.6m by 2022
Innovative in-house financing scheme expands customer base and caters
to mass housing market
Expansion in other key cities nationwide, especially Luzon
Founding partners with several decades of mass housing experience
Creation of in-house construction company to control the construction
process from end-to-end
Weaknesses Threats
High proportion of installment sales increases receivables at a fast rate
Larger property developers may be enticed by mass market undersupply
and enter aggressively
Relatively smaller in scale than established publicly-listed developers Reliability of outsourced contractors and machinery
Reliance on outsourced contractors to build developments
Regulatory environment might have unforseen changes that could alter the
industry dynamics
SOURCE: CIMB RESEARCH, COMPANY
8990 Holdings, Inc.
June 11, 2014
25
5. FINANCIALS
5.1 38% earnings CAGR between 2013 and 2016
8990 is expected to see a 38% compounded annual earnings growth rate from
between 2013 and 2016 due to a combination of low cost production technique
amidst a huge demand in the mass housing market.
Revenue growth from horizontal mass housing projects is expected to grow
from PHP4.7bn in 2013 to PHP7.1bn in 2016 or a compounded growth rate of
14.9% p.a.
Another source of growth will come from its ventures in the middle rise
building (MRB) and high-rise building markets in Metro Manila.
Admittedly, this may raise some concerns that the company may be venturing
out from its core competence. However, this is not the case.
Figure 40: Revenue composition (2011 to 2016)
Title:
Source:
Please fill in the values above to have them entered in your report
2,349
3,831
5,356
7,457
9,649
12,380
-
2,000
4,000
6,000
8,000
10,000
12,000
14,000
2011A 2012A 2013A 2014F 2015F 2016F
Low cost mass housing Medium-ri se condominium units High-rise condominium uni ts Others
SOURCES: COMPANY REPORTS, SB EQUITIES
Metro Manila has not been penetrated by the company in the past. Keeping
true to its low-cost origins, 8990 will be designing 13 sq m units with a target
price of just PHP875,000, with a monthly amortisation of around PHP7,500,
pricing it under the mass housing category and making it eligible under the
companys CTS Gold financing programme as well as through the governments
housing programme.
These units are targeted to professionals who are either renting out in Metro
Manila or to those who have to take a one-to-two hour commute from adjacent
suburbs
We expect that these high-rise projects to start to contribute to the companys
revenue streams by 2016, while medium-rise condominium units should
comprise 14% of the companys revenues by 2014.
All of these should allow the company to grow its revenues at a compounded
rate of 32.2% between 2013 and 2016.
5.2 Margins seen to remain high over forecast period
The companys margins are expected to remain high over our forecast period
due to a confluence of factors. The primary factor is the companys cheaper and
more efficient pre-cast construction method that allows it to have cheaper raw
material and labour costs over a shorter period of time.
Another advantage of pre-cast construction is that the company can maintain
consistent quality over all of its projects. With a strength four times that of the
traditional cinder block approach, home buyers are more willing to buy at a
premium. This is the reason why the company has been able to raise its prices
Revenue from horizontal projects
expected to grow 14.9% p.a. in the
next three years
8990 Holdings, Inc.
June 11, 2014
26
during the past three years without any effect on its ability to sell its housing
units.
8990s land acquisition strategy also remains as a strong point by focusing on
property that are in the periphery of urbanised cities, making acquisition costs
cheaper than comparable properties in the middle of the city. The company also
tries to time its purchases so that it is ready to commence development as soon
as a new parcel of land is bought, limiting the landholdings non-revenue
generating status in the companys portfolio.
These factors will allow 8990 to enjoy a gross margin of greater than 60% from
2014 to 2016.
Another factor on the expense side is the companys low SG&A spending owing
from its low-key marketing strategy which tends to be more word of mouth and
buyer referrals rather than via heavy advertising spending.
Lastly, the company is also benefitting from the tax incentives that the
government provides to mass housing developers. Mass housing developers
are given as much as a 4-year income tax holiday on every new mass housing
project that a developer launches.
These factors allow 8990 to enjoy net margins that hover above 40%. EBITDA
margin is expected to be steady at around 47% in the next three years.
Figure 41: Key Financials
2011A 2012A 2013A 2014F 2015F 2016F
Revenue (PHP m) 2,349 3,831 5,356 7,457 9,649 12,380
ROE (%) 43.4 65.4 41.4 33.5 28.7 31.5
EBITDA margin (%) 20.7 45.0 42.8 44.1 44.2 44.0
Gross margin (%) 42.9 62.2 63.3 63.0 63.0 63.0
Net margin (%) 18.7 44.5 40.8 47.7 46.9 46.2
Net sales growth (%) 5.9 63.1 39.8 39.2 29.4 28.3
SOURCES: COMPANY REPORTS, SB EQUITIES
5.3 Cashflow analysis
One of the key risks of 8990, as a function of its CTS Gold financing scheme, is
the increase of its receivables as its sales increase. We estimate the companys
total receivables to reach PHP10.8bn by the end of 2014.
The company recognises this issue and has put in measures to reduce its
receivables by increasing the Pag-IBIG loan take-outs of its seasoned buyers. As
at end March, 8990 has delivered 4,759 housing loan folders to Pag-IBIG, an
estimated value of PHP4bn worth of receivables, of which 45% of the total was
issued Notice of Approvals (NOA) or in the process of issuing NOAs, with
approximately 22% of the value of submitted receivables already paid for.
The company is also exploring sale of part of its receivables portfolio (with no
recourse) to private banks. Another avenue which 8990 is actively pursuing is
the securitisation of seasoned CTS home loans, which will allow the company to
receive around PHP800m of cash for every PHP1bn in loans that will be
securitised.
This should keep the companys total accounts receivable at manageable levels,
despite additions from new house sales, with an average of around 54% of total
assets in the next three years.
5.4 Comparison with local competitors
In terms of forward earnings growth rates for the period from 2014 to 2015,
8990 leads the way with a 44% rate, above Ayala Land (ALI PM) and
Megaworld (MEG PM) at 30% and 24%, respectively.
In terms of forward profit margins, 8990 leads the group with a 47.7% rate,
followed by SM Prime Holdings (SMPH PM) at 32.2% and Megaworld at 31.2%.
Gross margins expected to remain
at greater than 60% from 2014 to
2016
Measures to reduce receivables
include increasing Pag-IBIG loan
take-outs, sale of part of its
receivable portfolio (with no
recourse), and securitisation of
seasoned CTS home loans
8990 Holdings, Inc.
June 11, 2014
27
This fact flies in the face of conventional wisdom that low-cost housing
developers have lower margins compared to open market players.
Lastly, in terms of net income, 8990 is ranked 7th of 8 developers for 2014F
earnings, edging out Century Properties (CPG PM), with PHP3.6bn.
This puts 8990 in an enviable position of having robust profit margins while
enjoying an earnings growth rate percentage in the 40s.
Figure 42: Competitive positioning
Title:
Source:
Please fill in the values above to have them entered in your report
ALI
CPG
FLI
HOUSE
MEG
Scale
Net income
= Php1bn
RLC
SMPH
VLL
-
10.0
20.0
30.0
40.0
50.0
60.0
- 5.0 10.0 15.0 20.0 25.0 30.0 35.0 40.0 45.0 50.0
P
r
o
f
i
t
m
a
r
g
i
n
2
0
1
4
F
(
%
)
CAGR %, (2014-2015)
CAGR = 44%, Profit
Margin = 48%, Net
Income 2014F =
Php3.6bn
SOURCES: COMPANY REPORTS, SB EQUITIES
8990 leads its peers in profit
margins and forward earnings
growth
8990 Holdings, Inc.
June 11, 2014
28
6. VALUATION AND RECOMMENDATION
6.1 Reasonably valued amidst robust growth and returns
On a P/E basis, 8990 trades at a slight premium relative to its peers in the
region. However, this is justified as the company has better profitability metrics.
Its 2-year average EPS growth of 33% is far superior than the peer average of
19%. 8990 also provides higher return on equity at 32% versus regional
average of 18%.
Figure 43: Regional peer comparison
2014 PE 2 yr ave growth PEG ROE
AP (Thailand) PCL (THB) 8.1 10 0.8 14
Supalai PCL (THB) 8.6 34 0.3 26
Mah Sing Group (MYR) 9.2 20 0.5 17
Sansiri Public Co (THB) 9.7 20 0.5 12
Quality Houses (THB) 9.7 10 1.0 18
Ananda Development (THB) 10.1 42 0.2 13
Pruksa Real Estate (THB) 10.8 9 1.2 21
SC Asset Corporation (THB) 11.0 15 0.7 10
Lippo Karawaci (IDR) 11.1 27 0.4 17
LPN Development (THB) 11.6 20 0.6 24
8990 Holdings, Inc. (PHP) 11.5 33 0.3 32
Metropolitan Land (IDR) 12.8 16 0.8 14
Land And Houses (THB) 15.8 4 4.0 19
Summarecon Agung (IDR) 16.1 4 3.8 22
Average 11.2 19 1.1 18
SOURCES: CIMB, SB EQUITIES
Even on the domestic front, the company fares favourably well vis--vis its
earnings growth and ROE.
Figure 44: Domestic peer comparison
PE 2 yr average growth PEG ROE
Ayala Land 28.9 23 1.3 15
SM Prime Holdings 23.1 18 1.3 11
Robinsons Land 17.8 19 0.9 10
Megaworld 16.4 13 1.3 10
8990 Holdings Inc 11.5 33 0.3 32
Filinvest Land 9.8 12 0.8 8
Vista Land 9.4 15 0.6 11
Average 16.7 19 0.9 14
SOURCES: SB EQUITIES, BLOOMBERG
6.2 DCF-based price target set at PHP11.20
We used the DCF valuation method in determining the companys target price.
We believe that between the two valuation methods of P/E multiple and DCF,
DCF appears to be better suited to ascertain the value of 8990. Using peer P/E
multiples may not reflect the true value of the company, as some of the
domestic companies low or high valuation is a result of their historical dealings
with the market rather than their growth potential.
In addition, the company has no direct comparison with the current crop of
listed property companies as most them have limited exposure to the low-cost
housing market.
Also, a DCF valuation more accurately captures 8990s current business model
as a real estate company with a constant and fast turnover of housing units in
line with demand, as opposed to traditional real estate companies who might
take longer to realise cash flows from their developments. This method also
takes into account the potential for growth as well as the attractive margins that
the company is enjoying right now.
8990 Holdings, Inc.
June 11, 2014
29
Lastly, applying a discount of 30% to NAV is a way to include the risks inherent
in the property sector as well as the risk of 8990 as a new issue.
Discounting the companys free cashflow at an estimated WACC of 8.8%, we
arrive at an equity value of PHP61.8bn or PHP11.20/share.
Figure 45: WACC assumptions
% (except for Beta)
WACC 8.8
Ke 11.4
Equity/(Debt + Equity) 37.4
Kd 7.2
Debt/(Debt + Equity) 62.6
Cost of equity 11.4
Risk free equity 5.0
Beta 1.07
Equity risk premium 6.0
Cost of debt (after-tax) 7.2
Debt premium 3.5
Statutory tax rate 15.0
SOURCES: CIMB, COMPANY REPORTS
Figure 46: Summary of equity valuation
PV of Forecasted Cash Flows 95,303
Add: Cash 249
Total Firm Value 95,552
Less: Bank & Other Debt (7,313)
Net Asset Value (NAV) 88,239
Discount to NAV (30%) (26,472)
Total Value to Equity 61,768
Value per share 11.20
SOURCES: SB EQUITIES
8990 Holdings, Inc.
June 11, 2014
30
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8990 Holdings, Inc.
June 11, 2014
31
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8990 Holdings, Inc.
June 11, 2014
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Spitzer Chart for stock being researched ( 2 year data )
8990 Holdings, Inc. (HOUSE PM)
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As at the time of publishing this report CIMB is phasing in an absolute recommendation structure for stocks (Framework #1). Please refer to all frameworks for a definition of any
recommendations stated in this report.
CIMB Recommendation Framework #1
Stock Ratings Definition
Add The stocks total return is expected to exceed 10% over the next 12 months.
Hold The stocks total return is expected to be between 0% and positive 10% over the next 12 months.
Reduce The stocks total return is expected to fall below 0% or more over the next 12 months.
The total expected return of a stock is defined as the sum of the: (i) percentage difference between the target price and the current price and (ii) the forward net dividend yields of the
stock.
Stock price targets have an investment horizon of 12 months.
Sector Ratings Definition
Overweight An Overweight rating means stocks in the sector have, on a market cap-weighted basis, a positive absolute recommendation.
Neutral A Neutral rating means stocks in the sector have, on a market cap-weighted basis, a neutral absolute recommendation.
Underweight An Underweight rating means stocks in the sector have, on a market cap-weighted basis, a negative absolute recommendation.
Country Ratings Definition
Overweight An Overweight rating means investors should be positioned with an above-market weight in this country relative to benchmark.
Neutral A Neutral rating means investors should be positioned with a neutral weight in this country relative to benchmark.
Underweight An Underweight rating means investors should be positioned with a below-market weight in this country relative to benchmark.
CIMB Stock Recommendation Framework #2 *
Outperform The stock's total return is expected to exceed a relevant benchmark's total return by 5% or more over the next 12 months.
Neutral The stock's total return is expected to be within +/-5% of a relevant benchmark's total return.
Underperform The stock's total return is expected to be below a relevant benchmark's total return by 5% or more over the next 12 months.
Trading Buy The stock's total return is expected to exceed a relevant benchmark's total return by 3% or more over the next 3 months.
Trading Sell The stock's total return is expected to be below a relevant benchmark's total return by 3% or more over the next 3 months.
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Exchange, Taiwan Stock Exchange and National Stock Exchange of India/Bombay Stock Exchange. Occasionally, it is permitted for the total expected returns to be temporarily
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CIMB Research Pte Ltd (Co. Reg. No. 198701620M)
CIMB Stock Recommendation Framework #3 **
Outperform Expected positive total returns of 10% or more over the next 12 months.
Neutral Expected total returns of between -10% and +10% over the next 12 months.
Underperform Expected negative total returns of 10% or more over the next 12 months.
Trading Buy Expected positive total returns of 10% or more over the next 3 months.
Trading Sell Expected negative total returns of 10% or more over the next 3 months.
** This framework only applies to stocks listed on the Korea Exchange, Hong Kong Stock Exchange and China listings on the Singapore Stock Exchange. Occasionally, it is
permitted for the total expected returns to be temporarily outside the prescribed ranges due to extreme market volatility or other justifiable company or industry-specific reasons.
Corporate Governance Report of Thai Listed Companies (CGR). CG Rating by the Thai Institute of Directors Association (IOD) in 2013.
AAV Good, ADVANC - Excellent, AMATA - Very Good, ANAN Good, AOT - Excellent, AP - Very Good, BANPU - Excellent , BAY - Excellent , BBL - Excellent, BCH Good,
BCP - Excellent, BEC - Very Good, BGH - not available, BJC Very Good, BH - Very Good, BIGC - Very Good, BTS - Excellent, CCET Very Good, CENTEL Very Good, CK -
Excellent, CPALL - Very Good, CPF Excellent, CPN - Excellent, DELTA - Very Good, DTAC - Excellent, EGCO Excellent, GLOBAL - Good, GLOW - Very Good, GRAMMY
Excellent, HANA - Excellent, HEMRAJ - Excellent, HMPRO - Very Good, INTUCH Excellent, ITD Very Good, IVL - Excellent, JAS Very Good, KAMART not available,
KBANK - Excellent, KKP Excellent, KTB - Excellent, LH - Very Good, LPN - Excellent, MAJOR Very Good, MAKRO Very Good, MCOT - Excellent, MEGA not available,
MINT - Excellent, PS - Excellent, PSL - Excellent, PTT - Excellent, PTTGC - Excellent, PTTEP - Excellent, QH - Excellent, RATCH - Excellent, ROBINS - Excellent, RS Excellent,
SAMART Excellent, SC Excellent, SCB - Excellent, SCC - Excellent, SCCC - Very Good, SIRI Very Good, SPALI - Excellent, STA - Good, STEC - Very Good, TCAP -
Excellent, THAI - Excellent, THCOM Excellent, TICON Very Good, TISCO - Excellent, TMB - Excellent, TOP - Excellent, TRUE - Excellent, TTW Excellent, TUF - Very Good,
VGI Excellent, WORK Good.
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