Briefing Note: CHIN WELL HOLDINGS BERHAD, Friday, March 23, 2012 R M 1 . 3 5

Highlights:

Lower 3Q Performance is expected Chin Well posted a decent 2QFY12 results, boosted by higher selling prices despite lower sales tonnage, improved efficiency in Vietnam operation and better gross margins from certain Europe orders. However, the group is expecting a lower performance in its 3QFY12 on softer orders from certain European countries, particularly Italy, Spain and France and part of the customers within the aforementioned countries requested for delay in deliveries. Despite slowdown in orders from some European countries, orders from Germany, its largest customers which accounted for about 22-25% of its total sales, remained solid. In addition, orders from the Netherlands and England are showing sustainable trend due to government-initiated infrastructure and housing projects.

US imposed anti-dumping rules on China-made wire product The United State has imposed anti-dumping duties on wire products imported from China. In late October 2011, the US's Department of Commerce announced its determination to impose anti-dumping duty on imports of steel wire from China. It was reported that Chinese producers/exporters have sold galvanized wire in the US at margins ranging from 76% to 235%. 16 exporters qualified for a separate dumping rate of 127% while other Chinese exporters received a preliminary dumping rate of 235%. Chin Well has benefited from the new anti-dumping rule. Its wire products segment has received orders from US starting from February, resulted a jump in production from 3,000T per month previously to 5,000T currently. The business is a relatively low margin business but we view this move positively as it does not require further investment on fixed assets, any increase in topline would allow the company to reap higher bottomline.

Valuation remained unchanged We continue to favor Chin Well as it is one of the eight companies in Malaysia that are being exempted from the anti-dumping duties imposed by EU. We have tweaked our forecast on the company but maintaining our BUY recommendation on Chin Well with a fair value of RM2.00.