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THAILAND EQUITY RESEARCH

Page | 1 | PHILLIP SECURITIES (THAILAND)

Closing Price(Bt) 12.10

Target Price(Bt) 15.00 (+25.46%)

COMPANY DATA

O/S Shares (mn) : 1,200

Market Cap. (Btmn) :

Market Cap. (USDmn) :

52-WK Hi/Lo (Bt) : 14.8/5.75

3M Average Daily T/O (mn) : 9.44

Par Value (Bt) : 0.25

MAJOR SHAREHOLDERS (%)

Mr. Sura Khanittaweekul 32.7

Mr. Bancha Pantumkomol 10.8

Mr. Pracha Dumrongsuthipong 7.7

PRICE PERFORMANCE (%)

1MTH 3MTH 1YR

ABS -6% -8% 109%

REL TO SET INDEX -6% -14% 71%

PRICE VS SET INDEX

Source: Bloomberg, PSR

KEY FINANCIALS

FYE Dec FY15 FY16E FY17E FY18E

Sales(Btmn) 14,989 16,544 18,406 20,234

Net Profit(Btmn) 268 407 538 631

EPS (Bt) 0.26 0.34 0.45 0.52

P/E (X) 46.5 35.8 27.1 23.1

BVPS (Bt) 1.47 1.72 2.03 2.38

P/B (X) 8.2 7.0 6.0 5.1

DPS (Bt) 0.15 0.09 0.18 0.24

Dividend Yield (%) 1.2 0.7 1.5 2.0

ROE (%) 23.46 21.25 24.18 24.45

Debt/Equity (X) 2.93 2.53 2.27 2.03

Source: Company, PSR Est.

**Multiples and yields are based on latest closing price

VALUATION METHOD

DCF (Ke=9%,g=3.5)

Thanatphat Suksrichavalit

Securities Investment Analyst # 84741

Tel: 66 2 635 1700 # 532

17 February 2017

14,520

415

12 May 2016

Buy

0

5

10

15

20

Feb-14 Feb-15 Feb-16 Feb-17

COM7 TB EQUITY SETI (rebased)

COM7

Deeper foray into service business seen as profit booster THAILAND | SET | COMM | RE-INITIATION OF COVERAGE BLOOMBERG COM7 TB l REUTERS COM7.BK Thailand’s leading digital lifestyle retail chain w ith nationwide network of 325 stores COM7 operates an IT store chain under ‘Banana IT’ brand and a network of mobile phone shops under ‘Banana Mobile’ brand and is an authorized reseller of Apple products in Thailand through ‘Studio7’ stores. In late FY16, COM7 took over 44 outlets from BKK Telecom 999, which sell mobile phones, tablets and other related products in a deal worth Bt184mn as part of its growth plan to boost its total store count to 500 by FY19 from the current 325 as of Dec 31, 2016, covering 77 provinces across Thailand. Deeper foray into service business seen as profit b ooster In addition to IT retail chain business, we expect service business will serve as another key profit booster for COM7 in FY17 after it clinched a deal with third-ranked mobile operator TRUE to (i) sell TRUE SIM cards in exchange for commission and revenue share percentage from mobile bills over the next 12 months, and (ii) manage 166 ‘True Shops.’ Currently COM7 manages 44 out of 166 True Shops. In light of steady growth in iCare services and higher margins for service business, we believe service revenue will likely play a key role in the next few years and push net profit margins higher to 2.9% and 3.1% in FY17-FY18 respectively from an estimate of 2.5% in FY16. Shopping tax break set to push profit to new highs in 4QFY16 We expect COM7 to deliver record profit in 4QFY16, largely benefiting from high seasonality, the successful launch of iPhone 7 & iPhone7 Plus in Nov 2016 and the government’s holiday shopping tax break in Dec 2016. Our forecast puts its 4QFY16 net profit at Bt147mn, up 40% from Bt105mn in 4QFY15. Based on the above 4QFY16 estimate, we estimate COM7 will achieve FY16 net profit of Bt407mn, up 52% y-y. Profit poised to set another record high in FY17 The outlook remains buoyant for COM7 in FY17 as continued economic recovery prospects would augur well for sales of IT products. SSSG is estimated at 10% y-y in FY17, boosted by the addition of new product lines and the plan to roll out 20 new outlets in FY17. COM7 should also benefit from full-year service revenue contribution from TRUE deal in FY17 on expectations that it will sell at least 100,000 mobile SIM cards in FY17, see full-year revenue contribution from management of 44 True Shops and earn additional revenue from management of another 122 True Shops during the year. On this basis, we expect COM7 to achieve another record net profit of Bt538mn, up 32% y-y. Re-Initiation of coverage with ‘BUY’ rating and FY1 7 target price of Bt15/share We reinitiate our coverage of COM7 with a ‘BUY’ rating and a FY17 DCF-on-FCFE based target price of Bt15/share. The rating reflects its strong earnings growth profile, driven by same store and new store sales growth and effective business management while overseas expansion plan, notably into CLMV market, which has strong growth potential could be an upside risk to the outlook ahead.

Ref. No.: CO2017_0107


COM7 RE-INITIATION OF COVERAGE

Investment thesis We initiate our coverage of COM7 with a ‘BUY’ rating in light of its solid earnings growth profile. In addition to new store rollout and improving economic prospects, which would be key drivers of sales growth for COM7, we believe its bottom-line should receive an additional boost from full-year revenue contribution from service business, notably through cooperation with its strategic partner TRUE in terms of commissions from sales of SIM cards and fees from management of True Shops in FY17. We estimate COM7 will deliver strong profit growth of up to 32% y-y to Bt538mn in FY17. We also set a FY17 target price of Bt15/share for COM7. The target is based on a DCF-on-FCFE model, using a Ke of 9% and G of 3.5%. Business profile COM7 is Thailand’s leading IT retail chain. It distributes IT products through its retail stores in leading department stores, shopping malls and hypermarkets across all regions of the country with a current nationwide network of 325 outlets. Its products can be grouped into the following five major categories: (1) laptop, (2) desktop, (3) mobile phone, (4) tablet, and (5) accessories. Product sales revenues aside, COM7 also earns service revenue from repair services and commissions from sales of SIM cards. Figure 1: Product mix in 3QFY16 and FY16E

3QFY16 FY16(E)

Source: COM7

Distribution channels Currently COM7 has 325 outlets in its portfolio. It has three main distribution channels as follows: (1) IT gadgets, computers and computer-related products through 143 Banana IT outlets. (2) Apple products through Studio7, iBeat and U-Store by Comseven. (3) Mobile phones and accessories through 21 Banana Mobile shops, 4 Samsung

Shop outlets and 44 BKK Telecom stores. COM7 has been appointed as an authorized Apple reseller to directly sell Apple products at its stores under ‘Studio7,’ ‘iBeat’ and ‘U-Store by Comseven’ brands. At end-Dec 2016, it operated a total of 94 ‘Studio7,’ ‘iBeat,’ and ‘U-Store by Comseven’ outlets. Due to an inadequate number of authorized Apple service centers amid a steady rise in Apple users in Thailand, COM7 also clinched a deal with Apple to become one of authorized Apple service providers to provide after-sales and repair services for Apple products under the name of ‘iCare’ in Thailand. iCare Services Centers accepts any Apple products, whether under or out of warranty. COM7 currently has a total of 19 iCare Services Centers.



Figure 2: COM7’s retail chain brands

Source: COM7

Branch expansion mode still on towards 500-store ta rget in FY19 Not only has COM7 maintained its focus on branch expansion to drive earnings growth, it also zeroes in on strong business fundamentals. For this reason, COM7 is selective in new store openings, which only target high-potential locations such as new promising department stores, and ready to shut its loss-making outlets. In a bid to achieve its 500-store target in FY19, COM7 is also on the prowl for M&A and strategic partnership deals to boost its store portfolio, as reflected by its recent acquisition of 44 BKK shops from BKK Telecom 999 and its strategic partnership deal with TRUE to manage 166 True Shops in Big C and Tesco Lotus. Branching out into new businesses to drive growth In addition to its core IT retail chain business, which supplies a wide array of IT gadgets from leading brands, COM7 has branched out into new businesses to tap demand from new consumer segments. To tap into the used computer market, it formed a JV with RT Global Group to sell used computer and electronic equipment from Japan at affordable prices under ‘Banana Sure’ brand. It also launched an online sales channel, BananaStore.com to capitalize on new generation customers that lead a digital lifestyle as part of the efforts to blend online and in-store sales channels. Moreover, it ventured into new high-potential corporate market through the launch of ‘Banana Business,’ which supplies IT products for SME customers and the acquisition of ‘iTEC Software,’ which provides software design and development services. The above new businesses currently contribute around Bt20mn-Bt30mn a month to COM7’s revenue and are likely to play a bigger role in the future. Figure 3: Monthly breakdown of revenue growth from new businesses in FY16

Source: COM7



Deeper foray into service business seen as profit b ooster In addition to IT retail chain business, we expect service business will serve as another key profit booster for COM7 in FY17 after it clinched a deal with third-ranked mobile operator TRUE to sell TRUE SIM cards and manage 166 True Shops. (1) Under the deal, TRUE allows COM7 to sell TRUE SIM cards at its stores in

exchange for commission and revenue share percentage from mobile bills over the next 12 months: COM7 started selling TRUE SIM cards in May 2016. It targets to sell 100,000 SIM cards a year, accounting for one fourth of 400,000 new SIM cards that TRUE will issue in FY17.

Figure 4: Mobile subscriber numbers by operator (Un it: 0,000)

3Q15 4Q15 1Q16 2Q16 3Q16

DTAC 24,851 25,252 25,477 24,953 24,820

+ /(-) 400 225 (524) (132)

TRUE 18,465 19,107 20,359 21,473 22,607

+ /(-)

642 1,252 1,114 1,134

ADVANC 37,811 38,488 38,928 39,355 39,873

+ /(-) 677 440 427 518

Sources: ADVANC, DTAC, TRUE

Figure 5: TRUE subscriber growth (Unit: 0,000)

Source: TRUE

(2) COM7 under the deal also has the right to manage 166 True Shops in Big C and

Tesco Lotus nationwide for a period of three years. It will earn revenue from sales of IT products at True Shops while TRUE is responsible for inventory. Costs of running the stores will be borne by COM7. In addition, COM7 will also earn fee revenue from post-paid mobile bill payment services. Currently COM7 manages 44 out of 166 True Shops. It is expected to earn revenue of at least Bt100,000 per branch per year based on gross profit margin assumption of 13%-14%. COM7 expects to manage all 166 True Shops within FY17. In our view, the deal would give COM7 a new distribution channel and put it on track to achieve its 500-store target in FY17 through asset light expansion.



Figure 6: True Shop

To ride a wave of growth in sales of Apple products in Thailand, COM7 has launched repair service centers for Apple products under the name of ‘iCare Shop.’ It accepts damaged Apple products caused by either the manufacturer or the use of customers under and out of warranty. For any damaged Apple products under warranty, Apple will be responsible for the cost of repair or replacement and pay fees to COM7. For out of warranty Apple products, COM7 will repair or replace products but will directly charge customers spare part costs and service fees. Gross profit margins for iCare Shop are as high as 70%. Currently COM7 operates 19 iCare Shops with up to 9,000 repair jobs/ month. iCare Shop is expected to contribute around Bt65 a year to COM7’s revenue. Figure 7: Monthly breakdown of repair jobs at iCare Shop in FY16

Source: COM7

3QFY16 net profit up a whopping 200% y-y COM7 reported a set of stellar numbers for 3QFY16. Net profit swelled 200% y-y to Bt91mn as brisk smartphone sales growth drove revenue up 18.5% y-y and gross profit margins widened as much as 33% y-y to 13.8% in 3QFY16 from 12.2% in 3QFY15, helped by a richer mix of sales from high-margin products and economies of scale. For 9MFY16, net profit surged 66% y-y to Bt260mn.



Shopping tax break set to push profit to new highs in 4QFY16 We expect COM7 to deliver record profit in 4QFY16, largely benefiting from high seasonality, the successful launch of iPhone 7 & iPhone7 Plus in Nov 2016 and the government’s holiday shopping tax break in Dec 2016. Our forecast puts its 4QFY16 net profit at Bt147mn, up 40% from Bt105mn in 4QFY15. Based on the above 4QFY16 estimate, we estimate COM7 will achieve FY16 net profit of Bt407mn, up 52% y-y. Profit poised to set another record high in FY17 The outlook remains buoyant for COM7 in FY17 as continued economic recovery prospects would augur well for sales of IT products. SSSG is estimated at 10% y-y in FY17, boosted by the addition of new product lines and the plan to roll out 20 new outlets in FY17. COM7 should also benefit from full-year service revenue contribution from TRUE deal in FY17 on expectations that it will sell at least 100,000 mobile SIM cards in FY17, see full-year revenue contribution from management of 44 True Shops and earn additional revenue from management of another 122 True Shops during the year. On this basis, we expect COM7 to achieve another record net profit of Bt538mn, up 32% y-y. Figure 8: Revenue and net profit trends for FY15-FY 19

Sources: COM7, PST

Re-Initiation of coverage with ‘BUY’ rating and FY1 7 target price of Bt15/share We re-initiate our coverage of COM7 with a ‘BUY’ rating. The rating reflects its strong earnings growth profile, driven by same store and new store sales growth and effective business management while overseas expansion plan, notably into CLMV market, which has strong growth potential could be an upside risk to the outlook ahead. We also set a FY17 target price of Bt15/share for COM7. The target is based on a DCF-on-FCFE model, using a Ke of 9% and G of 3.5%.



Financials

Income Statement Cash Flow

FYE Dec, Btmn FY15 FY16E FY17E FY18E FYE Dec, Btmn FY15 FY16E FY17E FY18E

Revenue 14,989 16,544 18,406 20,234 CFO

EBITDA 523 773 986 1,161 PBT 337 507 670 787

Depreciati on & Amortis ation 143 255 307 367 Adjus tments 202 266 316 374

EBIT 380 518 679 794 WC changes 323 -146 -96 -98

Net Finance (Expens e)/Inc -43 -11 -9 -7 Cas h generated from ops 863 627 890 1,063

Other i tems 0 0 0 0 Others -98 -113 -143 -165

As sociates & JVs 0 0 0 0 Cashflow from ops 764 514 747 898

Exceptional i tems 0 0 0 0 CFI

Profit Before Tax 337 507 670 787 CAPEX, net -127 -260 -260 -300

Taxati on -75 -101 -134 -157 Others 2 0 0 0

Profit After Tax 262 405 536 629 Cashflow from investments -125 -260 -260 -300

Non-control l ing Interes t -6 -2 -2 -2 CFF

Net Income, reported 268 407 538 631 Share i s s uance 1,005 0 0 0

Net Income, adj. 268 407 538 631 Loans , net of repayments -1,138 -139 -111 -89

Dividends -180 -105 -216 -286

Per share data Others 0 0 0 0

FYE Dec, Bt FY15 FY16E FY17E FY18E Cashflow from financing -133 -244 -327 -375

EPS, reported 0.26 0.34 0.45 0.52 Net change in cash 506 10 160 223

EPS, adj. 0.26 0.34 0.45 0.52 Effects of exchange rates 0 0 0 0

DPS 0.15 0.09 0.18 0.24 CCE, end 730 741 900 1,178

BVPS 1.47 1.72 2.03 2.38

Valuation Ratios

Balance Sheet FYE Dec FY15 FY16E FY17E FY18E

FYE Dec, Btmn FY15 FY16E FY17E FY18E P/E (X), adj.** 46.5 35.8 27.1 23.1

Cash 730 741 900 1,178 P/B (X), adj.** 8.2 7.0 6.0 5.1

Investments 0 0 0 0 Dividend Yiel d (%) 1.2 0.7 1.5 2.0

Accounts Recei vables 344 380 421 463

Inventories 2,250 2,459 2,721 2,982 Growth

Others 72 72 72 72 FYE Dec, % FY15 FY16E FY17E FY18E

Total current assets 3,397 3,653 4,114 4,695 Revenue 6.27 10.37 11.26 9.93

PPE 327 397 350 283 EBITDA 23.73 47.85 27.57 17.76

Intangibles 14 14 14 14 EBIT 23.90 36.27 31.11 16.95

As sociates & JVs 0 0 0 0 Net Income, adj. 29.79 51.56 32.17 17.43

Investments 392 392 392 392

Others 272 272 272 272 Margins

Total non-current assets 1,005 1,075 1,028 961 FYE Dec, % FY15 FY16E FY17E FY18E

Total Assets 4,402 4,728 5,142 5,728 EBITDA margin 3.49 4.67 5.36 5.74

Short term loans 708 569 458 370 EBIT margin 2.54 3.13 3.69 3.93

Accounts Payables 1,768 1,932 2,137 2,343 Net Profi t Margin 1.79 2.46 2.92 3.12

Others 58 58 58 58

Total current liabilities 2,534 2,560 2,654 2,771 Key Ratios

Long term loans 55 55 55 55 FYE Dec FY15 FY16E FY17E FY18E

Others 49 49 49 49 ROE (%) 23.46 21.25 24.18 24.45

Total liabilities 2,638 2,663 2,758 2,874 ROA (%) 6.11 8.91 10.90 11.62

Non-control l ing interes ts 0 0 0 0 Net Debt/(Cash) (Btmn) 32 -117 -388 -754

Shareholder Equities 1,764 2,065 2,384 2,781 Net Gearing (X) 1.01 0.95 0.88 0.78

Source: Company Data , PSR es t

**Based on latest closing price



Fact Sheet

GENERAL INFORMATION RISK FACTORS

Addres s : 1. Slowing economic growth

2. Technologica l changes

3. Intens e competi tion in the indus try

Tel :

Fax:

URL:

Market/Sector:

BUSINESS DESCRIPTION KEY DEVELOPMENT

PRODUCT BREAKDOWN as of KEY FINANCIAL SUMMARY

Btmn 3Q16 2Q16 1Q16 4Q15 3Q15

Sa les 3,921 3,873 3,979 4,370 3,323

Gros s profi t 543 538 534 547 408

Net profi t 91 81 89 105 30

Ass ets 3,901 3,607 2,341 4,402 3,460

Liabi l i ties 2,027 1,823 2,155 2,638 1,804

Equities 1,874 1,784 186 1,764 1,656

EPS (Bt) 0.08 0.07 0.07 0.09 0.03

BVPS (Bt) 1.56 1.49 0.15 1.47 1.38

GPM (%) 14% 14% 13% 13% 12%

NPM (%) 2% 2% 2% 2% 1%

Source: Company, PSR Source: Company, PSR

BRAND MIX as of PEER COMPARISON * updated on

as of Mkt Cap. P/E P/BV Div Yield

(Btmn) (x) (x) (%)

Com7 PCL

COM7 TB 9/16 14,520 46.5 8.2 1.2

Jay Mart PCL

JMART TB 9/16 10,133 31.2 3.6 2.5

IT Ci ty PCL

IT TB 9/16 1,300 37.9 1.2 1.3

SVOA PCL

SVOA TB 9/16 1,152 18.4 0.7 3.4

Source: Bloomberg, PSR

Source: Company, PSR

549/1 Sappavuth Rd. Bangna

Bangkok

SET/Services /Commerce

COM7 is Tha i land’s leading IT retai l cha in. It mainly s el l s IT

products including laptop computers , des ktop computers , tablet

computers , mobi le phones, acces s ories and others .

Company

name

- Nov 2016: COM7 took over 44 BKK outlets from BKK Telecom 999,

which s el l s mobi le phones , tablets and other related products .

- Nov 2016: COM7 board gave a green l ight to the acquis i tion of

additional s take in ‘Banana Sure’ to bring i ts holding to 100%.

- Nov 2016: COM7 board approved the dives tment of i ts enti re

stake in Hobby Plus Co.

31 December 2016

31 December 2016 16 February 2017

*Data bas ed on tra i l ing 12 months earnings, book val ue and

dividend per s hare

31 December 2016

66 2 017 7777

66 2 017 7777

www.comseven.com

Apple

products

50%

Non-Apple

products

50%

Banana

50%iStudio

29%

BKK telecom

14%

Others

7%



Corporate Governance - 2016

AMATA AOT BAFS BAY BCP BIGC BTS BWG CK CPF

CPN CSL DELTA DEMCO DRT DTAC DTC EASTW EGCO GFPT

GPSC GRAMMY HANA HMPRO INTUCH IRPC IVL KBANK KCE KKP

KTB KTC LHBANK LPN MBK MCOT MINT MONO NKI NYT

OTO PHOL PPS PS PSL PTT PTTEP PTTGC QH QTC

RATCH SAMART SAMTEL SAT SC SCB SCC SCCC SE-ED SIM

SITHAI SNC SPALI SSSC STEC SVI TCAP THCOM TISCO TKT

TMB TNDT TOP TSC TTCL TU UV VGI WACOAL WAVE

2S AAV ACAP ADVANC AGE AH AHC AKP ALUCON AMANAH

ANAN AP APCO APCS ARIP ASIA ASIMAR ASK ASP AUCT

AYUD BANPU BBL BDMS BEM BFIT BLA BOL BROOK CEN

CENTEL CFRESH CGH CHG CHO CHOW CI CIMBT CKP CM

CNS CNT COL CPI DCC EA ECF EE ERW FORTH

FPI GBX GC GCAP GL GLOBAL GLOW GUNKUL HOTPOT HYDRO

ICC ICHI IFEC INET IRC JSP K KSL KTIS L&E

LANNA LH LHK LIT LOXLEY LRH LST M MACO MALEE

MBKET MC MEGA MFC MOONG MSC MTI MTLS NCH NOBLE

NSI NTV OCC OGC OISHI ORI PACE PAP PB PCSGH

PDI PE PG PJW PLANB PM PPP PR PRANDA PREB

PRG PRINC PT PTG PYLON Q-CON RICHY ROBINS RS RWI

S S & J SABINA SALEE SAMCO SCG SEAFCO SFP SIAM SINGER

SIS SMK SMPC SMT SNP SPI SPPT SPRC SR SSF

SST STA SUSCO SUTHA SWC SYMC SYNEX SYNTEC TAE TAKUNI

TASCO TBSP TCC TF TFI TGCI THAI THANA THANI THIP

THRE THREL TICON TIPCO TK TKS TMC TMI TMILL TMT

TNITY TNL TOG TPC TPCORP TRC TRU TRUE TSE TSR

TSTE TSTH TTA TTW TVD TVO TWPC UAC UP UPF

VIH VNT WINNER YUASA ZMICO

AEC AEONTS AF AIRA AIT AJ AKR AMARIN AMATAV AMC

APURE AQUA ARROW AS BA BEAUTY BEC BH BIG BJC

BJCHI BKD BR BROCK BRR BTNC CBG CGD CHARAN CITY

CMR COLOR COM7 CPL CSC CSP CSR CSS CTW DCON

DIMET DNA EARTH EASON ECL EFORL EPCO EPG ESSO FE

FER FOCUS FSMART FSS FVC GEL GIFT GLAND GOLD GSTEL

GYT HPT HTC HTECH IFS IHL ILINK INSURE IRCP IT

ITD J JMART JMT JUBILE JWD KASET KBS KCAR KGI

KKC KOOL KWC KYE LALIN LPH MAJOR MAKRO MATCH MATI

M-CHAI MDX MFEC MJD MK MODERN MPG NC NCL NDR

NEP NOK NUSA PATO PCA PDG PF PICO PIMO PL

PLAT PLE PMTA PPM PRIN PSTC QLT RCI RCL RICH

RML RPC SANKO SAPPE SAWAD SCI SCN SCP SEAOIL SENA

SIRI SKR SLP SMG SMIT SORKON SPA SPC SPCG SPVI

SSC STANLY STPI SUC TACC TCCC TCMC TEAM TFD TFG

TIC TIW TKN TLUXE TMD TNP TOPP TPA TPAC TPCH

TPIPL TPOLY TRITN TRT TTI TVI TWP U UBIS UMI

UPOIC UT UWC VIBHA VPO VTE WICE WIIK WIN XO

Score Range

< 50%

50-59%

60-69%

70-79%

80-89%

90-100%

The disclosure of the survey result of the Thai Institute of Directors Association (IOD)

regarding corporate governance is made pursuant to the Office of the Securities and

Exchange Commission. The survey of the IOD is based on the information of a company

l isted on the Stock Exchange of Thailand and the Market for Alternative disclosure to the

public and able to be accessed by a general public investor. The results, therefore, is from

the perspective of a third party. It is not an evaluation of operation and is not based on

inside information.

The survey result is as of the date appearing in the Corporate Governance Report of Thai

Listed Companies. As a result, the survey result may be changed after that data. Phil l ip

Securities (Thai land) of securities company does not confirm nor certify the accuracy of

such survey result.

No logo given

Number of Logo

Results Presentation



Declared

2S A ABC ABICO ACAP AEC AF AGE AH AI

AIE AIRA ALUCON AMARIN AMATA ANAN AOT AP APCO APCS

APURE AQUA AS ASIA ASIAN ASIMAR ASK BCH BEAUTY BFIT

BH BIGC BJCHI BKD BLAND BROCK BROOK BRR BSBM BTNC

CEN CGH CHARAN CHO CHOTI CHOW CI CM COL CPALL

CPF CPL CSC CSR CSS DELTA DNA EA ECF EE

EFORL EPCO ESTAR EVER FC FER FNS FPI FSMART FVC

GC GEL GFPT GIFT GLOBAL GPSC GREEN GUNKUL HMPRO HOTPOT

ICHI IEC IFS ILINK INET INOX INSURE IRC J JAS

JMART JMT JTS JUBILE JUTHA K KASET KBS KC KCAR

KSL KTECH KYE L&E LALIN LPN LRH LTX LVT M

MAKRO MALEE MBAX MC MCOT MEGA MFEC MIDA MILL MINT

MJD MK ML MPG MTLS NBC NCH NCL NDR NINE

NMG NNCL NPP NTV NUSA OCC OGC PACE PAF PCA

PCSGH PDG PDI PIMO PK PLANB PLAT PRANDA PREB PRG

PRINC PSTC PYLON QH RML ROBINS ROCK ROH ROJNA RP

RWI SAMCO SANKO SAUCE SC SCCC SCN SEAOIL SE-ED SENA

SGP SITHAI SKR SMIT SMK SORKON SPALI SPCG SPPT SPRC

SR SRICHA STA STANLY SUPER SUSCO SYMC SYNEX SYNTEC TAE

TAKUNI TASCO TBSP TEAM TFG TFI THAI TIC TICON TIP

TKT TLUXE TMC TMI TMILL TMT TPA TPP TRT TRU

TRUE TSE TSI TSTE TTW TU TVD TVO TVT TWPC

U UBIS UKEM UNIQ UOBKH UREKA UWC VGI VIBHA VNG

VNT WAVE WHA WICE WIIK WIN XO ZMICO

Certified

ADVANC AKP AMANAH ASP AYUD BAFS BANPU BAY BBL BCP

BKI BLA BTS BWG CENTEL CFRESH CIMBT CNS CPI CPN

CSL DCC DEMCO DIMET DRT DTAC DTC EASTW ECL EGCO

ERW FE FSS GBX GCAP GLOW HANA HTC ICC IFEC

INTUCH IPRC IVL KBANK KCE KGI KKP KTB KTC LANNA

LHBANK LHK MBK MBKET MFC MINT MONO MOONG MSC MTI

NKI NSI OCEAN PB PE PG PHOL PM PPP PPS

PR PSL PT PTG PTT PTTEP PTTGC Q-CON QLT RATCH

S & J SABINA SAT SCB SCC SCG SINGER SIS SMPC SNC

SNP SPC SPI SSF SSI SSSC SVI TCAP TCMC TF

TGCI THANI THCOM THRE THREL TIPCO TISCO TMB TMD TNITY

TNL TOG TOP TPC TPCORP TSC TSTH TTCL TVI WACOAL

Non-participation

AAV ACC ADAM AEONTS AHC AFC AIT AJ AJD AKR

ALLA ALT AMATAV AMC APX AQ ARIP ARROW ASEFA ASN

ATP30 AUCT BA BAT-3K BCPG BDMS BEC BEM BGT BIG

BIZ BJC BLISS BM BOL BPP BR BRC BSM BTC

BTW BUI CBG CCET CCN CCP CGD CHEWA CHG CHUO

CIG CITY CK CKP CMO CMR CNT COLOR COM7 COMAN

CPH CPR CRANE CSP CTW CWT DAII DCON DCORP DRACO

DSGT DTCI EARTH EASON EIC EKH EMC EPG ESSO F&D

FANCY FMT FN FOCUS FORTH GENCO GJS GL GLAND GOLD

GRAMMY GRAND GSTEL GTB GYT HARN HFT HPT HTECH HYDRO

IHL IRCP IT ITD ITEL JCT JSP JWD KAMART KCM

KDH KIAT KKC KOOL KTIS KWC KWG LDC LEE LH

LIT LOXLEY LPH LST MACO MAJOR MANRIN MATCH MATI MAX

M-CHAI MCS MDX MODERN MPIC NC NEP NETBAY NEW

NEWS NFC NOBLE NOK NPK NWR NYT OHTL OISHI ORI

OTO PAE PAP PATO PERM PF PICO PJW PL PLE

PMTA POLAR POMPUI POST PPM PRAKIT PRECHA PRIN PRO PSH

PTL QTC RAM RCI RCL RICH RICHY RJH RPC RS

S S11 SAFARI SALEE SAM SAMART SAMTEL SAPPE SAWAD SAWANG

SCI SCP SEAFCO SELIC SF SFP SGF SHANG SIAM SIM

SIMAT SIRI SLP SMART SMM SMT SOLAR SPA SPG SPORT

SPVI SQ SSC SST STAR STEC STHAI STPI SUC SUTHA

SVH SVOA SWC T TACC TAPAC TC TCB TCC TCCC

TCJ TCOAT TFD TGPRO TH THANA THE THIP THL TIW

TK TKN TKS TM TMW TNDT TNH TNP TNPC TNR

TOPP TPAC TPBI TPCH TPIPL TPOLY TPROP TR TRC TRITN

TRUBB TSF TSR TTA TTI TTL TTTM TUCC TWP TWZ

TYCN UAC UEC UMI UMS UP UPA UPF UPOIC UT

UTP UV UVAN VARO VI VIH VPO VTE WG WINNER

WORK WORLD WP WR YCI YNP YUASA

Companies participating in Thailand's Private Sector Collective Action Coalition Against

Corruption programme (Thai CAC) under Thai Institute of Directors (as of October 28, 2016)

PHILLIP SECURITIESS (THAILAND) | 11 | P a g e


The SEC has a pol icy to promote l isted companies and intermediaries, i .e. securities companies, asset management companies, derivative business companies

(“intermediaries”) to establ ish anti-corruption measures as part of their business operation. The SEC has supported Thaipat Institute in developing the Anti-corruption

Progress Indicator of l isted companies and intermediaries. The Indicator comprises five levels: Level 1: Committed, Level 2: Declared, Level 3: Establ ished,

Level 4: Certified, and Level 5: Extended.

The SEC continues to develop business sustainabil ity among l isted companies and intermediaries with a focus on anti-corruption by supporting them to join Thailand’s

Private Sector Col lective Action Coalition Against Corruption (CAC) and to disclose their corporate governance progress on http://www.cgthailand.org.

Levels of Commitment

Companies participating in Thailand's Private Sector Collective Action Coalition Against Corruption

programme (Thai CAC) under Thai Institute of Directors (as of October 28, 2016)

PHILLIP SECURITIESS (THAILAND) | 12 | P a g e


Industry Group Name Sector Name Sector Index

Agro & Food Industry[AGRO] Agribusiness AGRI

Food & Beverage FOOD

Consumer Products[CONSUMP] Fashion FASHION

Home & Office Products HOME

Personal Products & Pharmaceuticals PERSON

Financials [FINCIAL] Banking BANK

Finance & Securities FIN

Insurance INSUR

Industrials [INDUS] Automotive AUTO

Industrial Materials & Machinery IMM

Packaging PKG

Paper & Printing Materials PAPER

Petrochemicals & Chemicals PETRO

Steel STEEL

Property & Construction[PROPCON] Construction Materials CONMAT

Construction Services CONS

Property Development PROP

Property Fund & REITs PF&REIT

Resources [RESOURC] Energy & Uti l ities ENERG

Mining MINE

Services [SERVICE] Commerce COMM

Media & Publishing MEDIA

Health Care Services HELTH

Tourism & Leisure TOURISM

Professional Services PROF

Transportation & Logistics TRANS

Technology [TECH] Electronic Components ETRON

Information & Communication Technology ICT

PSR Rating SystemCapital Gain Recommendation

> 15% BUY

> 5% - 15% ACCUMULATE / TRADING BUY

> 0% - 5% NEUTRAL

0 <= SELL

Remarks

We do not base our recommendations entirely on the above quantitative return bands. We consider qual itative factors l ike (but

not l imited to) a stock's risk reward profi le, market sentiment, recent rate of share price appreciation, presence or absence of

stock price catalysts, and speculative undertones surrounding the stock, before making our final recommendation

Contact Information of Hong Kong Representatives

Research

Benny WANG

Dealing Director

(852) 2277 6720

[email protected]

ZHANG Jing

Research Analyst

Transportation and Automobiles

(86) 21 51699400-103

[email protected]

Sales

FAN Guohe

Research Analyst

Pharmaceutical, Health Care, TMT

(86) 21 51699400-110

[email protected]

Aric AU Matthew WONG

Manager, Corporate & Institutional Sales Manager, International Sales

(852) 2277 6783 (852) 2277 6678

[email protected] [email protected]

Yoshikazu SHIKITA

Manager, International Sales

(Japan Team)

(852) 2277 6624

[email protected]

PHILLIP RESEARCH STOCK SELECTION SYSTEMS

Total Return Recommendation Rating Remarks

> +20% Buy 1 >20% upside from the current price

+5% to +20% Accumulate 2 +5% to +20% upside from the current price

-5% to +5% Neutral 3 Trade within +/- 5% from the current price

-5% to -20% Reduce 4 -5% to -20% downside from the current price

< -20% Sell 5 -20% downside from the current price

We do not base our recommendations entirely on the above quantitative return bands. We consider qualitative factors like (but not limited to) a stock’s risk reward profile, market sentiment, recent rate of share price appreciation, presence or absence of stock price catalysts, and speculative undertones surrounding the stock, before making our final recommendation

GENERAL DISCLAIMER

This publication is distributed in Hong Kong by Phillip Securities (Hong Kong) Limited (“PSHK”), which is licensed in Hong Kong by the Securities and Futures Commission for regulated activities, including Type 4 regulated activity (advising on securities). This publication was originally prepared by analysts from our overseas affiliates. The information contained herein is based on sources that PSHK and its affiliates believe to be accurate and any analysis, forecasts, projections, expectations and opinions contained in this publication are based on such information and are expressions of belief only. This material is prepared for general circulation to clients and is not intended to provide tailored investment advice and does not take into account the individual financial situation and objectives of any specific

person who may receive this report. Investors should seek financial advice regarding the appropriateness of any investments or securities discussed or recommended in this report. This report is not (and should not be construed as) a solicitation to act as securities broker or dealer in any jurisdiction by any person or company that is not legally permitted to carry on such business in that jurisdiction. This research report may not be redistributed, retransmitted or disclosed, in whole or in part or and any form or manner, without the express written consent of PSHK. Please direct any enquiries to [email protected].

Investment involves risks. For details of product risks, please view the Risk Disclosures Statement on http://www.phiIlip.com.hk.

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