Survivors & Thrivers – The update
• We reiterate our preference for 28 bomb-proof stock picks.
• We believe there are buying opportunities now in SKT, China Steel
and Hyundai Mobis
• Case study of our Motors picks supports our S&T thesis
Belts and braces
We published our list of 28 Survivors & Thrivers on 25 November 2008,
providing our top stress-tested picks across Asian markets for a long
term portfolio. We approached the selection process with an expectation
that the full brunt of the global economic crisis still lay before us, and
would bring prolonged earnings uncertainty. We still firmly believe this.
Motors picks proving the thesis
We run a short case study looking at our Motors picks of S&T-Hyundai
Mobis, Hero Honda and Astra International. These picks brought lots of
questions when initially made, given the deterioration of the global auto
industry. But, as a group, they have shown some of the best
performance among the 28 S&T picks. More importantly, these
companies are proving their worth as Thrivers picks: Hero Honda
continues to demonstrate its ability to take market share in a slowing
two-wheeler market, and Hyundai Mobis increased profitability to a
record in 4Q08. Meanwhile, Astra International is powering ahead in its
three business lines.
Performance since publication
In absolute terms, our group of 28 stocks have performed well since our
25 November publication date. Only four stocks are down, with HSBC
being the stand out underperformer. We should stress that this is a
group of stocks for a long-term Asian portfolio so we don’t want to put
too much emphasis on short-term performance – except in the context of
attractive entry points.
Three for now – Hyundai Mobis, China Steel and SK Telecom
Hyundai Mobis is our preferred way to play the momentum in the
Hyundai Motor Group. Its cashflows are driven by replacement demand
for parts and it benefits from increased unit sales of the group globally,
while remaining insulated from much of the risk. Catalysts come from
very strong 4Q08 results and group sales success in the US.
SK Telecom has come off some 6% since our original publication,
underperforming the KOSPI by 21%. We think this is unjustified and
offers opportunity. The company is set to benefit from lower churn rate
and a reduction in marketing costs.
China Steel has traded sideways since our original publication. The
stock is a conservative value play. It boasts low gearing, high ROE,
capex flexibility and an attractive dividend yield.

Contents
Belts and braces............................................................................................................ 1
Performance since publication....................................................................................... 3
The motors picks ........................................................................................................... 5
Company notes
Astra International 7
China Steel 16
Hero Honda Motors 25
Hyundai Mobis 28
SK Telecom 34