David & Goliath
Research Analyst
Kenny Lau, CFA
(Regional Sector Head)
852 2101 7914
Gabriel Chan, CFA
(Hong Kong Small Caps/Macau Gaming)
852 2101 6523
Adrian Chan
(Hong Kong Small Caps)
852 2101 6469
Jinsong Du
(China Small Caps/Healthcare)
852 2101 6589
Justin Liu
(China Small Caps)
852 2101 7350
Teddy Oetomo
(Indonesia Small Caps)
62 21 2553 7911
Minseok Sinn
(Korea Small Caps)
822 3707 8898
Sanghoon Kim
(Korea Small Caps)
822 3707 3737
Foong Wai Loke
(Malaysia Small Caps)
603 2723 2082
Su Tye Chua
(Singapore Small Caps)
65 6212 3014
Clarice Khoo
(Singapore Small Caps)
852 2101 6035
Sidney Yeh
(Taiwan Small Caps)
886 2 2715 6368
Chai Techakumpuch
(Thailand Small Caps)
662 614 6211
WEEKLY ANALYSIS
High yield trap
When investors ask D&G for a list of high yield stocks recently, D&G has given
out the list grudgingly. It is not difficult to compile the list, but D&G is uncertain
about the usefulness of it.
Naturally, many investors are taking a defensive investment approach in this
chaotic market. A company, which is financially sound with good dividend yield,
seems to be an ideal relative safe haven stock. However, perhaps the world is
too hazy and the liquidity crunch is intensified by the banks’ problems, many
low-leveraged or even net cash companies have become cautious and
enforcing cash preservation programmes for contingency. Unlike the previous
bear cycles, assuming “financially sound” companies will continue to distribute
generous dividends this year is a convenient way to disappoint yourself.
The recent dividend cuts by net cash companies ASM Pacific and Pacific Basin
hurt the hearts of high yield lovers, but cannot be interpreted as baseless.
Dividend yield of Asia small caps has reached 6%, a 10-year high. While D&G
can list a handful of stocks with “high” yield effortlessly (charts of the week and
Got to Know on P.5-7), investors may want to add their own judgement as well.

The tales of Davids
Hong Kong
Lifestyle – 2008 underlying profit 6.7% ahead of pre one-offs; deep NAV discount 12
Pacific Basin – FY08 results broadly in line; no dividends declared, the key negative surprise 12
HTIL – Developed markets (Israel, Hong Kong) remain strong; Hong Kong spin-off approved 13
MPEL – City of Dreams is fully on track to grab market share 13
China
Shanda – 4Q08 results: above guidance, but below CS forecast; concerns on growth sustainability 19
Anta Sports – Guidance, post FY08 results, remains positive albeit market concerns 19
China Medical – December 2008 quarter review 20
Home Inns – 4Q08 results: feeling the soft economy by year-end 20
Perfect World – 4Q08: high end of guidance due to strong game revenue 21
BYD – Severe competition in the electric car market makes its hefty valuation unjustifiable 21
VisionChina – 4Q08: in line with the guidance; 2009 guidance in-line; implied revenue +36-51% YoY 22
New Oriental Education – Operations healthy despite select soft patches; next catalyst in May/June 22
Indonesia
United Tractors – 4Q08 earnings confirmed the positive effect of weaker rupiah and coal sector 29
Bank Pan Indonesia – Soft FY08 due to soft loan growth and higher-than-expected credit costs 29
Indosat – A key beneficiary of easing price competition in Indonesia 30
Korea
Hyundai Development – Still too early to buy 34
Taeyoung E&C – Results below expectations, but valuation looks attractive 34
Nong Shim – 4Q08: weak sales, but good margins; 2009 guidance too optimistic, in our view 35
Daelim Industrial – Management takes necessary actions to improve liquidity 35
Malaysia
AirAsia – FY08 results: additional provisions clear path for a better FY09 43
Muhibbah – FY08 results: Poor margins from Middle East projects 43
Scomi – FY08 results boosted by lower effective tax rates 44
Sinagpore
Epure – FY08 earnings slightly higher than expected owing to lower taxes 50
Yongnam – Record orderbook underpins strong growth outlook 50
Hong Leong Asia – Weak results; seeking firmer ground with Tasek 51
Parkway – Highlights from post-results session with the Chairman 51
Allgreen Properties – No more a dividend cash cow 52

Taiwan
Taishin Financial – Waiting for capital raising 58
Chang Hwa Comm. Bank – Downgrade to UNDERPERFORM 58
Delta – 4Q08 results in line; no excitement for 1Q09 outlook 59
SinoPac Financial – Conservative 2009 guidance 59
I-Chiun – Implication of a rebound in I-Chiun’s February sales for LED downstream packagers 60
Taiwan Fertilizer – First crack in potash? Taiwan Fertilizer should be little impacted 60
Thailand
Asian Property – Very strong 4Q08 results with improvement continuing into 2009 67
Central Pattana – Good 2008 results with better 2009 outlook 67
TT&T – 4Q08: collapsing EBITDA and high debts leave gearing unsustainably high 68
Thai Tap Water – A winning formula 68
True – True Move – addicted to capital raisings – needs to restructure, shut down or a new partner 69