UBS: Asia Oil and Chemicals Alpha Preferences

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UBS Investment Research
Asia Oil and Chemicals 
Alpha Preferences 
 
„ Remove PTT Chemical from Least Preferred
We remove PTT Chemical from our Alpha preference list after the 3%
underperformance vs. Thai Oil & Chem peers since we added the stock into the
list. According to the Nation newspaper, PTT is considering merging PTTCH with
PTTAR. While we think this could be considered potentially dilutive to the
perceived value of PTTCH's stable cashflow, high return business over the longterm, we believe near-term uncertainty regarding M&A price may drive share price
performance.  
„ Reiterate our preference in Thailand
Thai Oil is our most preferred stock in Thailand given the company's cheap
valuation vs. attractive earnings growth profile in 2011-2012E. Our least preferred
stock in Thailand is PTT Exploration and Production based on the company's
relatively high PE and increasing earnings and balance sheet risk in 2011E.
„ Most & Least Preferred
Currently we have COSL, SinoTech, Thai Oil and Essar Oil on our Most Preferred.
And our Least Preferred list contains Hindustan Petroleum, PTT Exploration &
Production.