Top Down Strategy and Large Cap Stock Picks - the DBS Vickers ...

Regional Equity Strategy Q4 2007
Country Assessment
Top picks: CM for near-term and CT for longer-term
Given the many uncertainties regarding industry restructuring and 3G licensing, we do not
suggest investors to speculate. Instead, we believe it is more rational and sustainable to
make investments on a selective basis.
We prefer CM (where we see no major near-term downside risks) for near-term investment;
CT will continue to be our long-term top pick, as it will benefit from delays in 3G licensing.
In the long run, CM will have to face more competitors. On the other hand, we believe CM
can continue to be the most competitive player in China’s 3G era in China, given its wellestablished
competitive advantages in the wireless telecom market in China.
For CT, we see limited downside, given its attractive valuation, while any progress in the
industry restructuring and 3G licensing can be a catalyst for the company. In the long run,
CT’s growth outlook will be boosted considerably by entering the wireless business.
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