WEEKLY UPDATE Thailand

Commodities Update

Key messages Supply cuts beginning in January

Dubai crude price increased 3% WoW to
US$59.7/bbl after OPEC+ (includes Russia) agreed
to cut production by 1.2MBD at the Vienna
meeting; however, Russia and Saudi Arabia plan
to start cutting their output in January. For
refinery, Singapore GRM plunged 8% WoW to
US$2.7/bbl due to softer diesel spread while
gasoline spread remains low. We maintain our
positive view on the diesel outlook from IMO’s
policy to cap sulfur in fuel oil at 0.5%, and our
negative view on the gasoline market from
oversupply. Note, our top picks remain PTT
Exploration and Production (PTTEP.BK/PTTEP TB)*
and Indorama Ventures (IVL.BK/IVL TB)*.
Event
Weekly commodities update.
Impact
Crude market: Russia and Saudi Arabia plan to cut their output in January
Dubai crude price increased 3% WoW to US$59.7/bbl last Friday after OPEC+ (includes
Russia) agreed to cut production by 1.2MBD at the Vienna meeting. OPEC will cut by
800KBD and non7OPEC will cut by 400KBD, based on October output levels. However,
Russia guided that the country plans to reduce crude output by 50760KBD in January
2019, slower7than7expected, because it will gradually build to its target cut of 220KBD.
Saudi Arabia also expects to cut crude production to 10.2MBD in January 2019 although
the kingdom increased crude output by 377KBD MoM to 11.1MBD in November. We
believe crude price is likely to recover to above US$60/bbl in the next month as most
large producers will start their supply cuts. Meanwhile, US crude output declined by
100KBD WoW to 11.6MBD while US oil rig count declined by 4 WoW to 873.

Refinery market: No recovery

Singapore GRM plunged 8% WoW to US$2.7/bbl due to softer diesel spread while
gasoline spread remains low. Diesel spread dropped 3% WoW to US$11.9/bbl although
winter is the high season for demand. Meanwhile gasoline spread continues to stand at a
very bad level due to oversupply and high global inventories but it improved 12% WoW
to US$2.4/bbl. We maintain our positive view on the diesel outlook from IMO’s policy to
cap sulfur in fuel oil at 0.5%, and our negative view on the gasoline market from
oversupply.

Coal market: Inched up US$1.5/ton WoW

The Newcastle Export Index (NEX) recovered 2% WoW to US$103/ton. China’s coal
production increased 4.5% YoY to 320mn tons in November, leading to total coal output

Kaweewit Thawilwithayanon
of 3.2bn tons for the first 11 months, up 5.4% YoY. However, Beijing reduced coal
66.2658.8888 Ext.8847 import by 13% YoY in November, comparing to growth of 8.5% YoY in October after
kaweewitt@kgi.co.th
the country imposed further port restrictions on coal until the end of 2018 at ports across
the country. Note, NEX coal price 4QTD18 was at US$105/ton, down 12% from 3Q18’s
average.

Figure 1: US oil rig count dropped by 4 WoW to 873 and US Figure 2: OPEC crude production was flat MoM at 33.1MBD
crude output declined by 100KBD WoW to 11.6MBD in November
Number of US oil rigs, unit (LHS); US crude output, MBD (RHS) Crude production, MBD
1,000 12.0 36
New high of 34.1MBD in Nov 2016
900
11.0
800 34
700 10.0
600 32 Average of 31.5MBD
500 9.0
400 30
8.0
300
Botton of 316 rigs in late May 2016
200 7.0 28
Oct12

Oct13

Oct14

Oct15

Oct16

Oct17

Oct18
Apr12

Apr13

Apr14

Apr15

Apr16

Apr17

Apr18
Jan12

Jan13

Jan14

Jan15

Jan16

Jan17

Jan18
Jul12

Jul13

Jul14

Jul15

Jul16

Jul17

Jul18

Jan16 Apr16 Jul16 Oct16 Jan17 Apr17 Jul17 Oct17 Jan18 Apr18 Jul18 Oct18
US oil rig count US crude output

Source: Baker Hughes, Bloomberg, KGI Research Source: Bloomberg, KGI Research

*The Company may be issuer of Derivative Warrants on these securities. 1

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 Thailand Commodities Update

Figure 3: Commodities Table

Commodityprices Last 1 Week 2017 %Chg Average Related Stock
14Dec18 7Dec18 29Dec17 WoW YTD 4QTD18 3Q18 2Q18 1Q18 4Q17
Oil/Refining Margins
Brent (US$/bbl) 59.3 60.3 66.8 (1.6) (11.2) 69.6 75.5 74.7 67.2 61.9  PTTEP
Dubai (US$/bbl) 59.7 58.2 63.8 2.6 (6.4) 69.0 73.7 72.2 64.0 59.4 + PTTEP
WTI (US$/bbl) 51.2 52.6 60.4 (2.7) (15.3) 60.6 69.8 68.1 63.2 55.8  PTTEP
Tapis (US$/bbl) 62.0 59.8 68.4 3.7 (9.4) 71.6 76.9 76.7 68.7 63.4 + PTTEP
Singapore GRM (US$/bbl) 2.7 3.0 6.9 (7.8) (60.6) 4.6 6.1 6.1 7.0 7.2  TOP, PTTGC, BCP, IRPC, SPRC

Petrochemical
Olefins
Ethylene (US$/ton) 800 790 1,330 1.3 (39.8) 961 1,326 1,288 1,299 1,264 + PTTGC, SCC, IRPC
Propylene (US$/ton) 865 860 950 0.6 (8.9) 990 1,084 1,058 1,029 917 + PTTGC, SCC, IRPC
HDPE (US$/ton) 1,080 1,050 1,275 2.9 (15.3) 1,197 1,308 1,358 1,359 1,260  PTTGC, SCC, IRPC
PP (US$/ton) 1,070 1,060 1,180 0.9 (9.3) 1,195 1,243 1,270 1,262 1,156 + PTTGC, SCC, IRPC
MEG (US$/ton) 700 720 960 (2.8) (27.1) 787 944 979 982 910  PTTGC
Naphtha (US$/ton) 463 451 565 2.7 (18.1) 535 616 597 538 529  PTTGC, SCC, IRPC
Spread
Ethylene Spread (US$/ton) 337 339 765 (0.7) (55.9) 425 710 691 761 735  PTTGC, SCC, IRPC
Propylene Spread (US$/ton) 402 409 385 (1.8) 4.6 455 468 461 491 388  PTTGC, SCC, IRPC
HDPE Spread (US$/ton) 617 599 710 3.0 (13.0) 661 692 761 821 730 + PTTGC, SCC, IRPC
PP Spread (US$/ton) 607 609 615 (0.4) (1.2) 660 627 672 724 627  PTTGC, SCC, IRPC
MEG Spread (US$/ton) 237 269 395 (12.0) (39.9) 243 328 382 444 381  PTTGC

Aromatics
Paraxylene (US$/ton) 965 960 845 0.5 14.2 1,060 1,104 915 864 801 + PTTGC, TOP
Benzene (US$/ton) 605 610 875 (0.8) (30.9) 712 858 842 887 836  PTTGC, TOP
Spread
Paraxylene Spread (US$/ton) 502 509 280 (1.4) 79.6 525 488 317 326 272  PTTGC, TOP
Benzene Spread ( US$/ton) 142 159 310 (10.8) (54.1) 177 242 245 349 306  PTTGC, TOP

Coal
Coal  BJI (US$/ton) 102.7 101.2 104.9 1.5 (2.1) 104.6 118.4 105.6 103.6 99.3 + BANPU, LANNA, UMS

Agricultural
Broiler (Bt/kg.) 32.5 32.5 31.5 0.0 3.2 32.5 33.7 31.5 31.5 32.3 +/ CPF, GFPT, TFG
Swine (Bt/kg.) 63.5 63.5 41.5 0.0 53.0 65.1 63.4 60.7 47.2 49.3 +/ CPF, TFG
Shrimp 70 pieces/kg. (Bt/kg.) 144 138 169 4.5 (14.9) 133 149 130 177 169 + CPF, CFRESH
Corn (USc/bu.) 385 386 351 (0.2) 9.7 374 367 389 369 351  CPF, GFPT, TFG
Soybean Meal (US$/ton) 312 311 317 0.1 (1.6) 312 321 371 357 321  CPF, GFPT, TFG, + TVO
Sugar No.11 (USc/lb.) 12.7 12.9 15.2 (1.7) (16.6) 13.0 11.0 12.1 13.4 14.6  KSL, KTIS, KBS, BRR

Source: Bloomberg, BANPU Plc, PTTGC Plc, KGI Research, www.dit.go.th

*The Company may be issuer of Derivative Warrants on these securities. 2

December 18, 2018
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 Thailand Commodities Update

Figure 4: Crude Price Figure 5: Singapore GRM

US$/bbl US$/bbl
140 12
120 10
100
8
80
6
60
4
40
20 2

0 0
Jan
13 Dec
13 Dec
14 Dec
15 Dec
16 Dec
17 Dec
18 Jan
13 Jan
14 Dec
14 Dec
15 Dec
16 Dec
17 Dec
18
Brent Dubai WTI Singapore GRM

Source: Bloomberg Source: Biznews

Figure 6: Ethylene Price, Ethylene Spread Figure 7: Propylene Price, Propylene Spread
US$/ton US$/ton
1,800 1,600
1,600 1,400
1,400 1,200
1,200
1,000
1,000
800
800
600
600
400 400
200 200
0 0
Jan
13 Dec
13 Dec
14 Dec
15 Dec
16 Dec
17 Dec
18 Jan
13 Dec
13 Dec
14 Dec
15 Dec
16 Dec
17 Dec
18
Ethylene Ethylene
Spread Propylene Propylene
Spread

Source: Bloomberg Source: Bloomberg

Figure 8: HDPE price, HDPE Spread Figure 9: PP price , PP Spread

US$/ton US$/ton
1,800 1,800
1,600 1,600
1,400 1,400
1,200 1,200
1,000 1,000
800 800
600 600
400 400
200 200
0 0
Jan
13 Dec
13 Dec
14 Dec
15 Dec
16 Dec
17 Dec
18 Jan
13 Dec
13 Dec
14 Dec
15 Dec
16 Dec
17 Dec
18
HDPE HDPE
Spread PP PP
Spread

Source: Bloomberg Source: Bloomberg

Figure 10: PX Price, PX Spread Figure 11: BZ Price, BZ Spread

US$/ton US$/ton
1,800 1,600
1,600 1,400
1,400 1,200
1,200 1,000
1,000
800
800
600
600
400
400
200 200
0 0
Jan
13 Dec
13 Dec
14 Dec
15 Dec
16 Dec
17 Dec
18 Jan
13 Dec
13 Dec
14 Dec
15 Dec
16 Dec
17 Dec
18
PX PX
Spread BZ BZ
Spread

Source: Bloomberg Source: Bloomberg

*The Company may be issuer of Derivative Warrants on these securities. 3

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 Thailand Corporate Governance

Corporate Governance Report of Thai Listed Companies

Companies with Excellent CG Scoring

Stock Company name Stock Company name Stock Company name

EGCO ELECTRICITY GENERATING KTB KRUNG THAI BANK TISCO TISCO FINANCIAL GROUP
KBANK KASIKORNBANK RATCH RATCHABURI ELECTRICITY GENERATING HOLDING
KKP KIATNAKIN BANK SCB THE SIAM COMMERCIAL BANK

Companies with Very Good CG Scoring

Stock Company name Stock Company name Stock Company name

ADVANC ADVANCED INFO SERVICE ERW THE ERAWAN GROUP SCC THE SIAM CEMENT
AOT AIRPORTS OF THAILAND GFPT GFPT SPALI SUPALAI
AP ASIAN PROPERTY DEVELOPMENT IFEC INTER FAR EAST ENGINEERING STEC SINO-THAI ENGINEERING AND CONSTRUCTION
BBL BANGKOK BANK LPN L.P.N. DEVELOPMENT SVI SVI
BH BUMRUNGRAD HOSPITAL MINT MINOR INTERNATIONAL TASCO TIPCO ASPHALT
BIGC BIG C SUPERCENTER PS PRUKSA REAL ESTATE TCAP THANACHART CAPITAL
CK CH. KARNCHANG QH QUALITY HOUSES TMB TMB BANK
CPALL CP ALL ROBINS ROBINSON DEPARTMENT STORE TRUE TRUE CORPORATION
CPN CENTRAL PATTANA RS RS
DRT DIAMOND ROOFING TILES SAMART SAMART CORPORATION

Companies with Good CG Scoring

Stock Company name Stock Company name Stock Company name

CENTEL CENTRAL PLAZA HOTEL HMPRO HOME PRODUCT CENTER MAKRO SIAM MAKRO
DCC DYNASTY CERAMIC ILINK INTERLINK COMMUNICATION MODERN MODERNFORM GROUP
GL GROUP LEASE KTC KRUNGTHAI CARD TRT TIRATHAI
GLOW GLOW ENERGY MAJOR MAJOR CINEPLEX GROUP TVO THAI VEGETABLE OIL

Companies classified Not in the three highest score groups

Stock Company name Stock Company name Stock Company name

AAV ASIA AVIATION CHG CHULARAT HOSPITAL NOK NOK AIRLINES

ANAN ANANDA DEVELOPMENT CKP CK POWER PACE PACE DEVELOPMENT CORPORATION
BA BANGKOK AIRWAYS DTAC TOTAL ACCESS COMMUNICATION SAWAD SRISAWAD POWER 1979
BCH BANGKOK CHAIN HOSPITAL GLOBAL SIAM GLOBAL HOUSE TMT THAI METAL TRADE
BDMS BANGKOK DUSIT MEDICAL SERVICES GPSC GLOBAL POWER SYNERGY TPCH TPC POWER HOLDING
BEM BANGKOK EXPRESSWAY AND METRO GUNKUL GUNKUL ENGINEERING WHA WHA CORPORATION
BJCHI BJC HEAVY INDUSTRIES LPH LADPRAO GENERAL HOSPITAL WORK WORKPOINT ENTERTAINMENT
CBG CARABAO GROUP MTLS MUANGTHAI LEASING

Source: www.thai-iod.com
Disclaimer: The disclosure of the survey result of the Thai Institute of Directors Association ("IOD") regarding corporate governance is made pursuant to the policy of the Office of the
Securities and Exchange Commission. The survey of the IOD is based on the information of a company listed on the Stock Exchange of Thailand and the Market for Alternative Investment
disclosed to the public and able to be accessed by a general public investor. The result, therefore, is from the perspective of a third party. It is not an assessment 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 date or when there is any change to the relevant information. Nevertheless, KGI Securities (Thailand) Public Company Limited (KGI) does not confirm, verify, or certify the
accuracy and completeness of such survey result.

*The Company may be issuer of Derivative Warrants on these securities. 4

December 18, 2018
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 Thailand Anticorruption Progress

Anticorruption Progress Indicator

Level 5: Extended
Stock Company name Stock Company name Stock Company name
CPN CENTRAL PATTANA SCC THE SIAM CEMENT

Level 4: Certified
Stock Company name Stock Company name Stock Company name
ADVANC ADVANCED INFO SERVICE IFEC INTER FAR EAST ENGINEERING SVI SVI
BBL BANGKOK BANK KBANK KASIKORNBANK TCAP THANACHART CAPITAL
DCC DYNASTY CERAMIC KKP KIATNAKIN BANK TISCO TISCO FINANCIAL GROUP
DRT DIAMOND ROOFING TILES KTB KRUNG THAI BANK TMB TMB BANK
EGCO ELECTRICITY GENERATING MINT MINOR INTERNATIONAL
ERW THE ERAWAN GROUP SCB THE SIAM COMMERCIAL BANK

Level 3: Established
Stock Company name Stock Company name Stock Company name
AAV ASIA AVIATION DTAC TOTAL ACCESS COMMUNICATION PACE PACE DEVELOPMENT CORPORATION
ANAN ANANDA DEVELOPMENT GFPT GFPT PS PRUKSA REAL ESTATE
AP ASIAN PROPERTY DEVELOPMENT GL GROUP LEASE RATCH RATCHABURI ELECTRICITY GENERATING HOLDING
BA BANGKOK AIRWAYS GLOW GLOW ENERGY ROBINS ROBINSON DEPARTMENT STORE
BDMS BANGKOK DUSIT MEDICAL SERVICES GPSC GLOBAL POWER SYNERGY SAMART SAMART CORPORATION
BIGC BIG C SUPERCENTER HMPRO HOME PRODUCT CENTER SPALI SUPALAI
BJCHI BJC HEAVY INDUSTRIES KTC KRUNGTHAI CARD STEC SINO-THAI ENGINEERING AND CONSTRUCTION
CENTEL CENTRAL PLAZA HOTEL LPN L.P.N. DEVELOPMENT TASCO TIPCO ASPHALT
CHG CHULARAT HOSPITAL MAKRO SIAM MAKRO TMT THAI METAL TRADE
CK CH. KARNCHANG MODERN MODERNFORM GROUP TPCH TPC POWER HOLDING
CKP CK POWER NOK NOK AIRLINES WHA NOK AIRLINES

Level 2: Declared
Stock Company name Stock Company name Stock Company name
AOT AIRPORTS OF THAILAND GUNKUL GUNKUL ENGINEERING QH QUALITY HOUSES
BH BUMRUNGRAD HOSPITAL ILINK INTERLINK COMMUNICATION TRT TIRATHAI
GLOBAL
TRUE
SIAM GLOBAL HOUSE MTLS MUANGTHAI LEASING TVO THAI VEGETABLE OIL

Level 1: Committed
Stock Company name Stock Company name Stock Company name
CBG CARABAO GROUP RS RS SAWAD SRISAWAD POWER 1979
MAJOR MAJOR CINEPLEX GROUP

No progress
Stock Company name Stock Company name Stock Company name
BCH BANGKOK CHAIN HOSPITAL CPALL CP ALL WORK WORKPOINT ENTERTAINMENT
BEM BANGKOK EXPRESSWAY AND METRO LPH LADPRAO GENERAL HOSPITAL

Source: www.cgthailand.org
Disclaimer: The disclosure of the Anti.Corruption Progress Indicators of a listed company on the Stock Exchange of Thailand, which is assessed by the relevant institution as disclosed by
the Office of the Securities and Exchange Commission, is made in order to comply with the policy and sustainable development plan for the listed companies. The relevant institution made
this assessment based on the information received from the listed company, as stipulated in the form for the assessment of Anti.corruption which refers to the Annual Registration
Statement (Form 56.1), Annual Report (Form 56.2), or other relevant documents or reports of such listed company . The assessment result is therefore made from the perspective of a
third party. It is not an assessment of operation and is not based on any inside information. Since this assessment is only the assessment result as of the date appearing in the assessment
result, it may be changed after that date or when there is any change to the relevant information. Nevertheless, KGI Securities (Thailand) Public Company Limited (KGI) does not confirm,
verify, or certify the accuracy and completeness of the assessment result.

*The Company may be issuer of Derivative Warrants on these securities. 5

December 18, 2018
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 Thailand Contact

KGI Locations China Shanghai Room 1507, Park Place, 1601 Nanjing West Road, Jingan District, Shanghai,

PRC 200040

Shenzhen Room 24D1, 24/F, A Unit, Zhen Ye Building, 2014 Bao’annan Road,

Shenzhen, PRC 518008

Taiwan Taipei 700 Mingshui Road, Taipei, Taiwan

Telephone 886.2.2181.8888 ‧ Facsimile 886.2.8501.1691

Hong Kong 41/F Central Plaza, 18 Harbour Road, Wanchai, Hong Kong

Telephone 852.2878.6888 Facsimile 852.2878.6800

Thailand Bangkok 8th L 11th floors, Asia Centre Building

173 South Sathorn Road, Bangkok 10120, Thailand

Telephone 66.2658.8888 Facsimile 66.2658.8014

Singapore 4 Shenton Way #13L01 SGX Centre 2

Singapore 068807

Telephone 65.6202.1188 Facsimile 65.6534.4826

KGI's Ratings Rating Definition

Outperform (OP) The stock's excess return over the next twelve months is ranked in the top 40% of KGI's coverage
universe in the related market (e.g. Taiwan)..

Neutral (N) The stock's excess return over the next twelve months is ranked in the range between the top 40%
and the bottom 40% of KGI's coverage universe in the related market (e.g. Taiwan)

Under perform (U) The stock's excess return over the next twelve months is ranked in the bottom 40% of KGI's
coverage universe in the related market (e.g. Taiwan).

Not Rated (NR) The stock is not rated by KGI.

Restricted (R) KGI policy and/or applicable law regulations preclude certain types of communications, including an
investment recommendation, during the course of KGI's engagement in an investment banking
transaction and in certain other circumstances.

Excess return = 12M target price/current price

Note When an analyst publishes a new report on a covered stock, we rank the stock's excess return with
those of other stocks in KGI's coverage universe in the related market. We will assign a rating based
on its ranking. If an analyst does not publish a new report on a covered stock, its rating will not be
changed automatically.

Disclaimer KGI Securities (Thailand) Plc. ( “The Company” ) disclaims all warranties with regards to all information contained herein. In no event
shall the Company be liable for any direct, indirect or any damages whatsoever resulting from loss of income or profits, arising by
utilization and reliance on the information herein. All information hereunder does not constitute a solicitation to buy or sell any
securities but constitutes our sole judgment as of this date and are subject to change without notice.

*The Company may be issuer of Derivative Warrants on these securities. 6

December 18, 2018
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