Malaysia Gaming. Malaysia Industry Focus. No fun, no tricks, no hypes. DBS Group Research. Equity 11 Feb 2015 KLCI :1,811.12

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1 Malaysia Industry Focus Malaysia Gaming Refer to important disclosures at the end of this report DBS Group Research. Equity 11 Feb 2015 No fun, no tricks, no hypes Prospects to remain sluggish, dragged by weak consumer sentiment and GST implementation No significant developments on external front No visible re-rating rating catalysts KLCI :1, Analyst King Yoong CHEAH CFA No excitement. We remain convinced there is little scope for Malaysian gaming stocks to re-rate in the near term. The Consumer Sentiment Index for 4Q2014 fell 15 points q-o-q to the year s low of 83. The extended weak domestic consumer sentiment could further reduce discretionary spending, which could in turn, have a negative impact on Genting Malaysia s domestic leisure & hospitality operations and NFO ticket sales. External kickers still elusive. On the external front, there are no significant developments that could boost buying interest in domestic gaming players. Although, Genting Bhd might appeal to investors if Japan liberalises its gaming sector, as its subsidiary, Genting Singapore, is well positioned to bid for a casino licence there, there is still no committed timeline to pass the bill to legalise casinos in Japan. GST will be a drag. We believe both Genting Group and number forecasting operators (NFOs) would have to fully absorb the GST without a corresponding reduction in gaming tax. Although the GST impact on gaming operators will not be as severe as previously feared, because the GST computation would take into account prize payouts (see Figure 2), it could still drag forward earnings of gaming players. Indeed, the imminent implementation of GST has started to dampen alreadyfragile consumer sentiment. Adjusting earnings estimates, a boring game. We have revised forecast earnings and recommendations of gaming companies under our coverage, mainly to capture the impact of GST. These are reflected in the individual company reports. The sector will remain unexciting in the near term STOCKS Genting Berhad : Conglomerate with core businesses in leisure & hospitality and plantation as well as power and oil & gas. Genting Malaysia : Monopoly of Malaysian casino. Magnum Bhd : Market leader in NFO Berjaya Sports Toto : Principal activities include licensed toto betting, leasing of online lottery equipment and manufacture and distribution of computerised lottery equipment Tables or Charts Source: AllianceDBS Price RM Mkt Cap Target Price Performance (%) US$m RM 3 mth 12 mth Rating Genting Berhad , (6.2) (13.3) HOLD Genting Malaysia , (2.2) (4.0) HOLD Magnum Bhd , (6.6) (7.6) HOLD Berjaya Sports Toto , (3.4) (12.3) HOLD ed-sgc / sa- WMT

2 Industry Focus Malaysia Gaming Figure 1: MIER consumer sentiment index Figure 2: GST Taxation structure for gaming operators 125 Malaysia Consumer Sentiments Index Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 Source: MIER where A B is the total amount received for the supply less any tax or duty under any other written law except excise duty; is the amount of money, if any, payable to any person participating successfully in the bettings, sweepstakes, lotteries, gaming machines or games of chance; and C is the rate of tax fixed under section 10 Source: Laws of Malaysia, Act 762 Page 2

3 Malaysia Company Focus Berjaya Sports Toto Bloomberg: BST MK Reuters: BSTB.KL Refer to important disclosures at the end of this report DBS Group Research. Equity 11 Feb 2015 HOLD RM KLCI : 1, Price Target : 12- month RM 3.36 (Prev RM 3.70) Reason for Report : GST implications Potential Catalyst: New game variants AllianceDBS vs Consensus: Below consensus Analyst King Yoong CHEAH CFA cheahky@alliancedbs.com Price Relative RM Relative Index Feb-11 Feb-12 Feb-13 Feb-14 Feb-15 Berjaya Sports Toto (LHS) Relative KLCI INDEX (RHS) Forecasts and Valuation FY Apr (RM m) 2014A 2015F 2016F 2017F Revenue 4,341 5,075 5,040 5,074 EBITDA Pre-tax Profit Net Profit Net Pft (Pre Ex.) EPS (sen) EPS Pre Ex. (sen) EPS Gth (%) (16) EPS Gth Pre Ex (%) (2) (1) 1 3 Diluted EPS (sen) Net DPS (sen) BV Per Share (sen) PE (X) PE Pre Ex. (X) P/Cash Flow (X) EV/EBITDA (X) Net Div Yield (%) P/Book Value (X) Net Debt/Equity (X) CASH CASH ROAE (%) Earnings Rev (%): (4) (8) nm Consensus EPS (sen sen): Other Broker Recs: B: 7 S: 0 H: 8 ICB Industry : Consumer Services ICB Sector: Travel & Leisure Principal Business: Principal activities include licensed toto betting, leasing of online lottery equipment and manufacture and distribution of computerised lottery equipment Source of all data: Company, AllianceDBS, Bloomberg Finance L.P Lacks gaming excitement Cut FY15-17F earnings by 3%-9% after reflecting weaker consumer sentiment and GST Risk of PGMC not renewing contract; this could reduce annual earnings further by RM50m Maintain HOLD, trimmed TP to RM3.36 GST to drag earnings. The GST will have less severe impact on domestic NFOs than previously feared, given that the GST computation would take into account prize payouts, it would still drag forward earnings. The imminent implementation of GST could further weaken already-fragile consumer sentiment. Downside risk from the Philippines. Revenue from the leasing of lottery equipment by its subsidiary, Philippine Gaming Management Corporation (PGMC; 88% stake) accounted for about 15% of FY14 group earnings. There is risk of non-renewal of the contract which is expiring in Aug 2015, which could reduce annual earnings by about RM50m. Cut earnings. We cut FY15F/16F/17F earnings by 3%/8%/9% after accounting for the following: (1) a 1% drop (previously 2% growth) in FY16F gaming revenue as a result of weak consumer sentiment, with a recovery in subsequent years, and (2) NFOs will fully absorb the GST. Trimmed TP, maintain HOLD. Following the earnings downgrade, we trimmed TP to RM3.36, based on the dividend discount model and assuming (i) 75% dividend payout ratio, (ii) 7.3% cost of equity, and (iii) 1% terminal growth rate. Dividend yield of over 5% should continue to support the share price. At A Glance Issued Capital (m shrs) 1,344 Mkt. Cap (RMm/US$m) 4,611 / 1,297 Major Shareholders Vincent Tan CY (%) 49.2 Great Eastern Life (%) 3.0 (%) 0.0 Free Float (%) 47.8 Avg. Daily Vol.( 000) 1,008 ed: SGC / sa: WMT

4 Berjaya Sports Toto INVESTMENT THESIS Profile BST is the largest number forecast operator (NFO) by market share, number of outlets and games. Rationale Earnings uncertainties with the implementation of GST GST will hurt margins from Weak consumer sentiment will continue to drag earnings Subdued investor interest on dividend-yielding assets Investor interest on dividend-yielding assets will be dampened by the ongoing US QE tapering and potential interest rate hike by Bank Negara Malaysia in the coming months. Valuation Following the earnings downgrade, we trimmed TP to RM3.36, based on the dividend discount model and assuming (i) 75% dividend payout ratio, (ii) 7.3% cost of equity, and (iii) 1% terminal growth rate. Dividend yield of over 5% should continue to support the share price. Risks Declining gross revenue/draw Rising competition from illegal NFOs (mainly 4D), but promotion of lotto games should help boostsales.consumer spending to moderate. Slower economic growth and rising inflationary pressures. While NFO sales may be affected, impact will be partiallycushioned by its small ticket-item nature and resilient historical track record. Malaysian gaming tax hike, impact of GST Domestic gaming operators remain vulnerable to potential gaming tax hike at the upcoming budget. GST from 2015 willhurt margins. Source: AllianceDBS Page 4

5 Berjaya Sports Toto Income Statement (RM m) FY Apr 2013A 2014A 2015F 2016F 2017F Revenue 3,628 4,341 5,075 5,040 5,074 Cost of Goods Sold (3,049) (3,750) (4,509) (4,480) (4,509) Gross Profit Other Opng (Exp)/Inc (27) (45) (33) (33) (32) Operating Profit Other Non Opg (Exp)/Inc Associates & JV Inc (3) (1) (1) (1) (1) Net Interest (Exp)/Inc (18) (29) (30) (21) (12) Exceptional Gain/(Loss) 19 (35) Pre-tax Profit Tax (166) (166) (125) (126) (130) Minority Interest (12) (15) (16) (17) (17) Preference Dividend Net Profit Net Profit before Except EBITDA Growth Revenue Gth (%) (0.7) 0.7 EBITDA Gth (%) (6.2) (0.6) (1.7) (1.0) 1.0 Opg Profit Gth (%) (6.5) (1.0) (2.5) (0.9) 1.2 Net Profit Gth (%) (3.5) (16.0) Margins & Ratio Gross Margins (%) Opg Profit Margin (%) Net Profit Margin (%) ROAE (%) ROA (%) ROCE (%) Div Payout Ratio (%) Net Interest Cover (x) Margins Trend 16.0% 15.0% 14.0% 13.0% 12.0% 11.0% 10.0% 9.0% 8.0% 7.0% 6.0% Gaming revenue to contract in FY16 due to weaker consumer sentiment 2013A 2014A 2015F 2016F 2017F Operating Margin % Net Income Margin % Page 5

6 Berjaya Sports Toto Quarterly / Interim Income Statement (RM m) FY Apr 2Q Q2014 4Q2014 1Q2015 2Q Revenue Trend 1,600 1,400 50% 40% Revenue 867 1,228 1,359 1,244 1,254 Cost of Goods Sold (722) (1,077) (1,245) (1,110) (1,107) Gross Profit Other Oper. (Exp)/Inc (6) (9) (8) (8) 0 Operating Profit Other Non Opg (Exp)/Inc Associates & JV Inc Net Interest (Exp)/Inc (7) (9) (9) (7) (5) Exceptional Gain/(Loss) (19) (10) (1) 0 0 Pre-tax Profit Tax (40) (49) (26) (39) (43) Minority Interest (5) (2) (4) (3) (1) Net Profit Net profit bef Except EBITDA ,200 1, Q2013 2Q2013 3Q2013 Revenue 4Q2013 1Q2014 2Q2014 3Q2014 4Q2014 1Q2015 Revenue Growth % (QoQ) 2Q % 20% 10% 0% -10% -20% Growth Revenue Gth (%) (2.3) (8.5) 0.8 EBITDA Gth (%) (9.3) 4.1 (24.5) Opg Profit Gth (%) (9.2) 2.4 (25.8) Net Profit Gth (%) (16.4) (11.5) (5.2) Margins Gross Margins (%) Opg Profit Margins (%) Net Profit Margins (%) Balance Sheet (RM m) FY Apr 2013A 2014A 2015F 2016F 2017F Asset Breakdown (2015) Net Fixed Assets Invts in Associates & JVs Other LT Assets Cash & ST Invts Inventory Debtors Other Current Assets Total Assets 1,543 2,150 2,145 2,142 2,194 ST Debt Creditor Other Current Liab LT Debt Other LT Liabilities Shareholder s Equity Minority Interests Total Cap. & Liab. 1,543 2,150 2,145 2,142 2,194 Non-Cash Wkg. Capital (217) (174) (182) (190) (199) Net Cash/(Debt) (117) (244) (122) Debtors Turn (avg days) Creditors Turn (avg days) Inventory Turn (avg days) Asset Turnover (x) Current Ratio (x) Quick Ratio (x) Net Debt/Equity (X) CASH CASH Net Debt/Equity ex MI (X) CASH CASH Capex to Debt (%) (1.0) Z-Score (X) Page 6

7 Berjaya Sports Toto Cash Flow Statement (RM m) FY Apr 2013A 2014A 2015F 2016F 2017F Pre-Tax Profit Dep. & Amort Tax Paid (166) (166) (125) (126) (130) Assoc. & JV Inc/(loss) Chg in Wkg.Cap. (59) (26) Other Operating CF Net Operating CF Capital Exp.(net) 5 (5) (29) (29) (29) Other Invts.(net) Invts in Assoc. & JV (40) (154) Div from Assoc & JV Other Investing CF (23) (20) Net Investing CF (58) (179) (16) (17) (17) Div Paid (260) (189) (267) (269) (277) Chg in Gross Debt (150) (150) (100) Capital Issues (40) (104) Other Financing CF (32) (42) (43) (33) (24) Net Financing CF (332) (152) (460) (452) (401) Currency Adjustments Chg in Cash (28) (27) 26 Opg CFPS (sen) Free CFPS (sen) Capital Expenditure A 2014A 2015F 2016F 2017F Capital Expenditure (-) Target Price & Ratings History RM S.No. Da te Closing Ta rge t Price Pric e Ra ting 1: 18 Mar Buy 2: 18 Jun Hold 3: 22 Sep Hold 4: 19 Dec Hold Feb-14 Jun-14 Oct-14 Feb-15 Note : Share price and Target price are adjusted for corporate actions. Page 7

8 Malaysia Company Focus Genting Berhad Bloomberg: GENT MK EQUITY Reuters: GENT.KL Refer to important disclosures at the end of this report DBS Group Research. Equity 11 Feb 2015 HOLD RM KLCI : 1, Price Target : 12-Month RM 8.76 (Prev RM 8.90) Reason for Report : GST implications Potential Catalyst: Gaming liberalisation in Japan AllianceDBS vs Consensus: In line with consensus Analyst King Yoong CHEAH CFA cheahky@alliancedbs.com Price Relative RM Feb-11 Feb-12 Feb-13 Feb-14 Feb-15 Genting Berhad (LHS) Relative KLCI INDEX (RHS) Relative Index Forecasts and Valuation FY Dec (RM m) 2013F 2014F 2015F 2016F Revenue 17,112 17,737 19,466 21,126 EBITDA 5,977 6,528 6,892 7,397 Pre-tax Profit 4,452 4,566 4,775 5,221 Net Profit 1,810 1,642 1,633 1,766 Net Pft (Pre Ex.) 1,458 1,642 1,633 1,766 EPS (sen) EPS Pre Ex. (sen) EPS Gth (%) (55) (9) (1) 8 EPS Gth Pre Ex (%) (31) 13 (1) 8 Diluted EPS (sen) Net DPS (sen) BV Per Share (sen) PE (X) PE Pre Ex. (X) P/Cash Flow (X) EV/EBITDA (X) Net Div Yield (%) P/Book Value (X) Net Debt/Equity (X) CASH CASH CASH CASH ROAE (%) Earnings Rev (%): (10) (15) (16) Consensus EPS (sen sen): Other Broker Recs: B: 8 S: 2 H: Patiently awaiting catalysts Cut earnings after including GST impact No visible near-term catalyst Maintain HOLD, trimmed TP to RM8.76 Cut earnings. We cut FY15F/16F earnings for Genting Bhd by 4%/6%, after reducing earnings for subsidiary, Genting Malaysia to account for the GST impact. No visible near-term re-rating catalyst. However, Genting Bhd might appeal to investors if Japan liberalizes its gaming sector, since its subsidiary Genting Singapore is well-positioned to bid for a casino licence there. Nevertheless, there is no committed timeline to pass the bill to legalise casino operations there. GITP a longer-term catalyst. The group is progressing with the Genting Integrated Tourism Plan (GITP). The group is expected to launch (1) 1,300 new hotel rooms by mid-2015, (2) Sky Avenue & Sky Plaza shopping malls, and new cable car station by 2016, and (3) Twentieth Century Fox World theme park by end We understand the group has obtained regulatory approvals to set up a new casino at Sky Plaza, although management disclosed minimal information on the additional gaming capacity obtained. Maintain HOLD. Following the earnings downgrade, we trimmed TP to RM8.76, based on SOP valuation. At A Glance Issued Capital (m shrs) 3,718 Mkt. Cap (RMm/US$m) 32,421 / 9,116 Major Shareholders Tan Sri Lim Goh Tong & Family 55.0 Great Eastern Life (%) 1.0 (%) 0.0 Free Float (%) 44.0 Avg. Daily Vol.( 000) 2,455 ICB Industry : Consumer Services ICB Sector: Travel & Leisure Principal Business: Conglomerate with core businesses in leisure & hospitality and plantation as well as power and oil & gas. Source of all data: Company, AllianceDBS, Bloomberg Finance L.P. ed: SGC / sa: WMT

9 Genting Berhad INVESTMENT THESIS Profile GENT is a conglomerate with stakes in listed subsidiaries i.e. GENM (49%), GENS (52%), GENP (55%), and Landmarks (30%). GENT also has exposure to power (China, India), oil & gas (Indonesia) and property segments. Rationale Resilient diversified earnings Gaming contributed 89% of 2014F EBIT, plantation 6%, power 4%, and propert y 1%. The share of local and overseas contribution is similar. Long-term growth drivers This would be driven by the new Jawa power plant and Resorts World Las Vegas which will be completed in Potential US$2.2b proceeds from the exercise of warrants (currently in-the-money) will come in handy. Valuation Following the earnings downgrade, we trimmed TP to RM8.76, based on SOP valuation. There is no visible re-rating catalyst for the stock in the near term. Risks Facing similar risks as listed subsidiaries; other risks include: Higher operating risk in Las Vegas, given intense competition in a nascent market, absence of first-mover advantage, and less strategic location. Nevertheless, Genting can leverage on its large Asian VIP clientele and experience with Foxwood casino. High coal prices could dampen power contribution as tariff hikes are negotiated on ad hoc basis. Source: AllianceDBS Page 9

10 Genting Berhad Segmental Breakdown FY Dec 2012F 2013F 2014F 2015F 2016F Revenues (RM m) Leisure 15,030 15,375 15,876 17,513 18,894 Plantations 1,082 1,080 1,439 1,513 1,775 Power Property Others Total 16,462 17,112 17,737 19,466 21,126 (RM m) Leisure 6,316 5,821 6,132 6,511 6,951 Plantations Power Property Others (120) (302) (113) (145) (189) Total 6,739 5,977 6,528 6,892 7,397 Margins (%) Leisure Plantations Power N/A N/A N/A Property Others N/A N/A N/A N/A N/A Total Income Statement (RM m) FY Dec 2012F 2013F 2014F 2015F 2016F Revenue 16,462 17,112 17,737 19,466 21,126 Cost of Goods Sold (10,253) (11,627) (11,680) (13,047) (14,207) Gross Profit 6,209 5,484 6,057 6,418 6,919 Other Opng (Exp)/Inc (1,540) (1,693) (1,713) (1,825) (1,858) Operating Profit 4,668 3,791 4,345 4,593 5,061 Other Non Opg (Exp)/Inc Associates & JV Inc Net Interest (Exp)/Inc (166) (184) (249) (292) (318) Exceptional Gain/(Loss) 1, Pre-tax Profit 6,910 4,452 4,566 4,775 5,221 Tax (1,123) (747) (1,268) (1,306) (1,408) Minority Interest (1,571) (1,589) (1,350) (1,530) (1,742) Preference Dividend (232) (306) (306) (306) (306) Net Profit 3,983 1,810 1,642 1,633 1,766 Net Profit before Except. 2,107 1,458 1,642 1,633 1,766 EBITDA 6,739 5,977 6,528 6,892 7,397 Growth Revenue Gth (%) (11.4) EBITDA Gth (%) (10.6) (11.3) Opg Profit Gth (%) (20.2) (18.8) Net Profit Gth (%) 38.9 (54.6) (9.3) (0.6) 8.2 Margins & Ratio Gross Margins (%) Opg Profit Margin (%) Net Profit Margin (%) ROAE (%) ROA (%) ROCE (%) Div Payout Ratio (%) Net Interest Cover (x) Margins Trend 27.0% 22.0% 17.0% 12.0% 7.0% 2012F 2013F 2014F 2015F 2016F Operating Margin % Net Income Margin % Page 10

11 Genting Berhad Quarterly / Interim Income Statement (RM m) FY Dec 3Q2013 4Q2013 1Q2014 2Q Q2014 Revenue 4,478 4,404 4,693 4,409 4,492 Cost of Goods Sold (3,019) (3,178) (2,876) (3,051) (3,005) Gross Profit 1,459 1,226 1,817 1,358 1,487 Other Oper. (Exp)/Inc (420) (295) (449) (449) (445) Operating Profit 1, , ,042 Other Non Opg (Exp)/Inc Associates & JV Inc Net Interest (Exp)/Inc (57) (39) (33) (16) (13) Exceptional Gain/(Loss) (37) (11) (136) Pre-tax Profit 1,114 1,155 1, Tax (202) (151) (355) (234) (275) Minority Interest (374) (438) (502) (274) (253) Net Profit Net profit bef Except EBITDA 1,546 1,375 1,951 1,431 1,550 Revenue Trend 4,800 4,600 4,400 4,200 4,000 3,800 3,600 3,400 2Q2012 3Q2012 4Q2012 1Q2013 Revenue 2Q2013 3Q2013 4Q2013 1Q2014 2Q2014 Revenue Growth % (QoQ) 3Q % 10% 8% 6% 4% 2% 0% -2% -4% -6% -8% -10% Growth Revenue Gth (%) 3.8 (1.7) 6.6 (6.1) 1.9 EBITDA Gth (%) (6.4) (11.0) 41.8 (26.6) 8.3 Opg Profit Gth (%) (5.6) (10.4) 46.8 (33.5) 14.6 Net Profit Gth (%) (0.9) (25.2) (5.2) Margins Gross Margins (%) Opg Profit Margins (%) Net Profit Margins (%) Balance Sheet (RM m) FY Dec 2012F 2013F 2014F 2015F 2016F Asset Breakdown (2014) Net Fixed Assets 22,404 24,809 26,208 27,473 25,615 Invts in Associates & JVs 794 1,050 1,120 1,194 1,272 Other LT Assets 13,514 15,283 15,283 15,283 15,283 Cash & ST Invts 24,855 23,840 22,902 23,776 29,416 Inventory Debtors 3,408 3,993 3,836 4,209 4,568 Other Current Assets 164 2,136 2,139 2,142 2,145 Total Assets 65,615 71,495 71,919 74,561 78,825 ST Debt 1,892 2,561 2,561 2,561 2,561 Creditor 3,782 4,099 4,084 4,482 4,865 Other Current Liab 696 1,621 1,621 1,621 1,621 LT Debt 12,701 10,824 8,825 7,576 7,576 Other LT Liabilities 2,076 1,818 1,486 2,037 2,634 Shareholder s Equity 21,700 25,314 26,734 28,144 29,688 Minority Interests 22,769 25,259 26,608 28,139 29,880 Total Cap. & Liab. 65,615 71,495 71,919 74,561 78,825 Non-Cash Wkg. Capital (429) Net Cash/(Debt) 10,262 10,455 11,515 13,639 19,278 Debtors Turn (avg days) Creditors Turn (avg days) Inventory Turn (avg days) Asset Turnover (x) Current Ratio (x) Quick Ratio (x) Net Debt/Equity (X) CASH CASH CASH CASH CASH Net Debt/Equity ex MI (X) CASH CASH CASH CASH CASH Capex to Debt (%) (12.7) Z-Score (X) Page 11

12 Genting Berhad Cash Flow Statement (RM m) FY Dec 2012F 2013F 2014F 2015F 2016F Pre-Tax Profit 6,910 4,452 4,566 4,775 5,221 Dep. & Amort. 1,540 1,693 1,713 1,825 1,858 Tax Paid (1,038) (1,302) (1,268) (1,306) (1,408) Assoc. & JV Inc/(loss) (36) (67) (70) (74) (78) Chg in Wkg.Cap. (1,291) (741) 93 (29) (23) Other Operating CF (780) 633 (151) (108) (82) Net Operating CF 5,305 4,668 4,882 5,083 5,489 Capital Exp.(net) 1,846 (1,466) (3,112) (3,090) 0 Other Invts.(net) Invts in Assoc. & JV (5,131) (5,076) Div from Assoc & JV Other Investing CF Net Investing CF (2,822) (6,025) (2,715) (2,737) 373 Div Paid (222) (1,510) (222) (222) (222) Chg in Gross Debt 5,968 (864) (1,999) (1,249) 0 Capital Issues 0 1, Other Financing CF 1,569 1,481 (885) 0 0 Net Financing CF 7, (3,106) (1,471) (222) Currency Adjustments Chg in Cash 9,798 (1,015) (939) 875 5,639 Opg CFPS (sen) Free CFPS (sen) Capital Expenditure F 2013F 2014F 2015F 2016F Capital Expenditure (-) Target Price & Ratings History RM S.No. Da te Closing Ta rge t Price Pric e Ra ting 1: 30 May Hold 2: 29 Aug Hold 3: 24 Nov Hold Feb-14 Jun-14 Oct-14 Feb-15 Note : Share price and Target price are adjusted for corporate actions. Page 12

13 Malaysia Company Focus Genting Malaysia Bloomberg: GENM MK Reuters: GENM.KL Refer to important disclosures at the end of this report DBS Group Research. Equity 11 Feb 2015 HOLD RM KLCI : 1, Price Target : 12-month RM 4.10 (Prev RM 4.35) Reason for Report : GST implications Potential Catalyst: Earlier than expected completion of GITP AllianceDBS vs Consensus: Below consensus Analyst King Yoong CHEAH CFA cheahky@alliancedbs.com Price Relative RM Feb-11 Feb-12 Feb-13 Feb-14 Feb-15 Genting Malaysia (LHS) Relative KLCI INDEX (RHS) Forecasts and Valuation FY Dec (RM m) 2013F 2014F 2015F 2016F Revenue 8,328 8,292 9,552 10,613 EBITDA 2,378 2,157 2,266 2,537 Pre-tax Profit 1,766 1,559 1,597 1,864 Net Profit 1,603 1,276 1,338 1,554 Net Pft (Pre Ex.) 1,678 1,276 1,338 1,554 EPS (sen) EPS Pre Ex. (sen) EPS Gth (%) 14 (20) 5 16 EPS Gth Pre Ex (%) 2 (24) 5 16 Diluted EPS (sen) Net DPS (sen) BV Per Share (sen) PE (X) PE Pre Ex. (X) P/Cash Flow (X) EV/EBITDA (X) Net Div Yield (%) P/Book Value (X) Net Debt/Equity (X) CASH CASH CASH CASH ROAE (%) Earnings Rev (%): 0 (8) (10) Consensus EPS (sen sen): Other Broker Recs: B: 9 S: 1 H: 15 ICB Industry : Consumer Services ICB Sector: Travel & Leisure Principal Business: Monopoly of Malaysian casino. Relative Index No near term catalyst 4Q14 results expected to be dampened by oneoff provision charge Successful execution of GITP a long term catalyst Cut FY15-16F earnings by 8%-11% HOLD, trimmed TP to RM4.10 One off provision charge in 4Q. The group expects to book a large provision in 4Q for its failed bid for a New York Upstate casino licence. But the charge is oneoff and therefore, will not affect core earnings. GITP to be a longer term catalyst. The group is progressing with the Genting Integrated Tourism Plan (GITP). The group is expected to launch (1) 1,300 new hotel rooms by mid-2015, (2) Sky Avenue & Sky Plaza shopping malls, and new cable car station by 2016, and (3) Twentieth Century Fox World theme park by end We understand the group has obtained regulatory approvals to set up a new casino at Sky Plaza, although management disclosed minimal information on the additional gaming capacity obtained. But unexciting in the near term, cut earnings. Despite improving prospects with the successful execution of GITP, the group s near term earnings will be dragged by GST and weaker consumer sentiment. We cut FY15F/16F earnings by 8%/11% after accounting for the GST impact. Maintain HOLD. Following the earnings downgrade, we trimmed TP to RM4.10, based on SOP valuation. There is no visible re-rating catalyst for the stock in the near term. At A Glance Issued Capital (m shrs) 5,670 Mkt. Cap (RMm/US$m) 23,135 / 6,505 Major Shareholders Genting Berhad (%) 50.0 Great Eastern Life (%) 3.0 (%) 0.0 Free Float (%) 47.0 Avg. Daily Vol.( 000) 3,856 Source of all data: Company, AllianceDBS, Bloomberg Finance L.P. ed: SGC / sa: WMT

14 Genting Malaysia INVESTMENT THESIS Profile GENM has the casino monopoly in Malaysia. GENM also owns Genting UK (GENUK), one of the largest casino operators in UK, and US racino Resorts World in New York (RWNY). Rationale Lacks near term re-rating rating catalysts There are no near term catalysts, given that (i) GITP is a longer term growth story, (ii) Miami is unlikely to liberalise its gaming industry this year. Earnings uncertainties with the implementation of GST GST (effective April 2015) will hurt profit margins of domestic operations. Valuation We have a Hold call on GENM with a target price of RM4.10 based on SOP valuation. Ther eis no visible re-rating catalyst for the stock in the near term. Risks Declining revenue on weakening consumer sentiment Larger-than-expected weakness in consumer sentiment could impact domestic gaming operations. Malaysian gaming tax hike, impact of GST Gaming was spared in the recent budget, but domestic gaming players remain vulnerable to such tax hikes in the upcoming budget. GST will hurt margins from Negative surprises from overseas venture To sustain earnings growth going forward, GENM has been actively expanding its gaming operations to the UK and US. As such, the group's overall financial performance is increasingly exposed to risks in these countries. Source: AllianceDBS Page 14

15 Genting Malaysia Segmental Breakdown FY Dec 2012A 2013F 2014F 2015F 2016F Revenues (RM m) Leisure - Msia 7,758 8,217 8,182 9,442 10,502 Properties Others N/A N/A N/A N/A N/A Others N/A N/A N/A N/A N/A Total 7,893 8,328 8,292 9,552 10,613 Operating Profit (RM m) Leisure - Msia 2,411 2,390 2,104 2,213 2,484 Properties Others 87 (15) Total 2,548 2,378 2,157 2,266 2,537 Operating Profit Margins Leisure - Msia Properties Others (33.0) Total Income Statement (RM m) FY Dec 2012A 2013F 2014F 2015F 2016F Revenue 7,893 8,328 8,292 9,552 10,613 Cost of Goods Sold (5,377) (5,953) (6,185) (7,336) (8,126) Gross Profit 2,515 2,374 2,107 2,216 2,487 Other Opng (Exp)/Inc (517) (552) (589) (649) (667) Operating Profit 1,999 1,822 1,518 1,567 1,820 Associates & JV Inc 1 (13) Net Interest (Exp)/Inc (9) (20) (5) Exceptional Gain/(Loss) (240) (75) Pre-tax Profit 1,817 1,766 1,559 1,597 1,864 Tax (415) (182) (302) (278) (329) Minority Interest Net Profit 1,403 1,603 1,276 1,338 1,554 Net Profit before Except. 1,642 1,678 1,276 1,338 1,554 EBITDA 2,548 2,378 2,157 2,266 2,537 Growth Revenue Gth (%) (0.4) EBITDA Gth (%) 7.8 (6.7) (9.3) Opg Profit Gth (%) 1.5 (8.9) (16.7) Net Profit Gth (%) (1.8) 14.3 (20.4) Margins & Ratio Gross Margins (%) Opg Profit Margin (%) Net Profit Margin (%) ROAE (%) ROA (%) ROCE (%) Div Payout Ratio (%) Net Interest Cover (x) NM NM Margins Trend 27.0% 25.0% 23.0% 21.0% 19.0% 17.0% 15.0% 13.0% 2012A 2013F 2014F 2015F 2016F Operating Margin % Net Income Margin % Page 15

16 Genting Malaysia Quarterly / Interim Income Statement (RM m) FY Dec 3Q2013 4Q2013 1Q2014 2Q Q2014 Revenue 2,121 2,120 2,026 1,911 2,235 Cost of Goods Sold (1,581) (1,613) (1,449) (1,476) (1,687) Gross Profit Other Oper. (Exp)/Inc (134) (149) (149) (153) (148) Operating Profit Associates & JV Inc (13) Net Interest (Exp)/Inc (6) Exceptional Gain/(Loss) (76) 64 (3) (4) (65) Pre-tax Profit Tax (48) (46) (114) (76) (120) Minority Interest Net Profit Net profit bef Except EBITDA Revenue Trend 2,500 2,000 1,500 1, Q2012 3Q2012 4Q2012 1Q2013 Revenue 2Q2013 3Q2013 4Q2013 1Q2014 2Q2014 Revenue Growth % (QoQ) 3Q % 20% 15% 10% 5% 0% -5% -10% Growth Revenue Gth (%) (4.7) 0.0 (4.4) (5.7) 16.9 EBITDA Gth (%) (19.4) (11.5) 17.6 (23.9) 24.7 Opg Profit Gth (%) (26.7) (11.8) 19.5 (33.9) 41.4 Net Profit Gth (%) (29.9) 24.1 (10.5) (29.0) 4.6 Margins Gross Margins (%) Opg Profit Margins (%) Net Profit Margins (%) Balance Sheet (RM m) FY Dec 2012A 2013F 2014F 2015F 2016F Asset Breakdown (2014) Net Fixed Assets 5,201 6,088 7,782 8,450 9,333 Invts in Associates & JVs Other LT Assets 7,146 8,346 9,244 9,065 8,887 Cash & ST Invts 4,011 4,812 3,480 3,931 4,445 Inventory Debtors Other Current Assets Total Assets 16,863 19,852 21,063 22,086 23,371 ST Debt Creditor 1,472 1,616 1,604 1,903 2,108 Other Current Liab LT Debt 895 1,483 1,845 1,627 1,549 Other LT Liabilities Shareholder s Equity 13,157 15,458 16,338 17,281 18,439 Minority Interests Total Cap. & Liab. 16,863 19,852 21,063 22,086 23,371 Non-Cash Wkg. Capital (1,163) (1,237) (1,274) (1,490) (1,628) Net Cash/(Debt) 2,899 3,132 1,438 2,107 2,699 Debtors Turn (avg days) Creditors Turn (avg days) Inventory Turn (avg days) Asset Turnover (x) Current Ratio (x) Quick Ratio (x) Net Debt/Equity (X) CASH CASH CASH CASH CASH Net Debt/Equity ex MI (X) CASH CASH CASH CASH CASH Capex to Debt (%) Z-Score (X) Page 16

17 Genting Malaysia Cash Flow Statement (RM m) FY Dec 2012A 2013F 2014F 2015F 2016F Pre-Tax Profit 1,817 1,766 1,559 1,597 1,864 Dep. & Amort Tax Paid (494) (479) (302) (278) (329) Assoc. & JV Inc/(loss) (1) Chg in Wkg.Cap. (87) Other Operating CF (41) (30) (45) Net Operating CF 1,929 2,102 1,842 2,154 2,295 Capital Exp.(net) (444) (1,366) (2,283) (1,317) (1,550) Invts in Assoc. & JV (58) (199) Div from Assoc & JV Other Investing CF 54 (213) Net Investing CF (448) (1,778) (2,242) (1,287) (1,505) Div Paid (366) (396) (396) (396) (396) Chg in Gross Debt (670) (21) 119 Capital Issues 26 (4) Other Financing CF (10) 562 (791) 0 0 Net Financing CF (1,020) 658 (627) (416) (276) Currency Adjustments (4) Chg in Cash 457 1,033 (1,027) Opg CFPS (sen) Free CFPS (sen) (7.5) Capital Expenditure A 2013F 2014F 2015F 2016F Capital Expenditure (-) Target Price & Ratings History RM S.No. Da te Closing Ta rge t Price Pric e Ra ting 1: 30 May Hold 2: 29 Aug Hold 3: 24 Nov Hold 4: 05 Dec Hold 5: 19 Dec Hold 3.60 Feb-14 Jun-14 Oct-14 Feb-15 Note : Share price and Target price are adjusted for corporate actions. Page 17

18 Malaysia Company Focus Magnum Bloomberg: MAG MK Reuters: MAGM.KL Refer to important disclosures at the end of this report DBS Group Research. Equity 11 Feb 2015 HOLD RM KLCI : 1, Price Target : 12-Month RM 2.45 (Prev RM 2.74) Reason for Report : GST implications Potential Catalyst: New game variants AllianceDBS vs Consensus: Below consensus Analyst King Yoong CHEAH CFA cheahky@alliancedbs.com Price Relative RM Feb-11 Feb-12 Feb-13 Feb-14 Feb-15 Magnum (LHS) Relative KLCI INDEX (RHS) Forecasts and Valuation FY Dec (RM m) 2013A 2014A 2015A 2016F Revenue 2,991 2,885 2,955 2,985 EBITDA Pre-tax Profit Net Profit Net Pft (Pre Ex.) EPS (sen) EPS Pre Ex. (sen) EPS Gth (%) (21) (3) (4) 1 EPS Gth Pre Ex (%) 26 (20) (4) 1 Diluted EPS (sen) Net DPS (sen) BV Per Share (sen) PE (X) PE Pre Ex. (X) P/Cash Flow (X) EV/EBITDA (X) Net Div Yield (%) P/Book Value (X) Net Debt/Equity (X) ROAE (%) Earnings Rev (%): (4) (22) (25) Consensus EPS (sen sen): N/A Other Broker Recs: B: 2 S: 0 H: 7 ICB Industry : Financials ICB Sector: General Financial Principal Business: Market leader in NFO Relative Index A taxing game Weak consumer sentiment, high effective tax rate and GST to drag earnings Cut FY14-FY16F earnings by 3%-30% HOLD, trimmed TP to RM2.45 FY14 earnings might disappoint the market. We expect FY14 core earnings to miss consensus estimate of RM275m, dragged by (1) a continued challenging environment, (2) persistent high effective tax rate, and, (3) fair value loss of quoted investments. Double tax whammy. Although the GST impact will be less severe than feared, given that the GST computation would take into account prize payouts, it could still drag forward earnings. Besides, we understand Magnum s effective tax rate would remain high at above 30% going forward because interest expense for a portion of its loan is not tax-deductible Cut earnings. We cut FY14/15F/16F earnings by 3%/28%/30% after accounting for the following: (1) assuming 1% drop (previously 2% growth) in FY15F gaming revenue due to weak consumer sentiment, and a recovery in subsequent years, (2) assume NFOs will fully absorb the GST, and (3) higher effective tax rate (32% in FY15 and 31% in FY16 vs 25% assumed previously). Trimmed TP, maintain HOLD. Following the earnings downgrade, we trimmed TP to RM2.45, based on the dividend discount model and assuming (i) 85% dividend payout ratio, (ii) 7.3% cost of equity, and (iii) 1% terminal growth rate. Dividend yield of over 5% should continue to support the share price. At A Glance Issued Capital (m shrs) 1,425 Mkt. Cap (RMm/US$m) 4,003 / 1,126 Major Shareholders Casi Management Sdn Bhd (%) 28.4 Asia 4D Holdings Ltd (%) 11.2 (%) 0.0 Free Float (%) 60.4 Avg. Daily Vol.( 000) 642 Source of all data: Company, AllianceDBS, Bloomberg Finance L.P. ed: SGC / sa: WMT

19 Magnum INVESTMENT THESIS Profile Magnum is the second largest NFO by market share. Rationale Earnings uncertainties with the implementation of GST GST from 2015 will impact margins (unless passed on via lower prize payout). Challenging operating environment Declining revenue with rising competition and weak consumer sentiment Valuation Following the earnings downgrade, we trimmed TP to RM2.45, based on the dividend discount model and assuming (i) 85% dividend payout ratio, (ii) 7.3% cost of equity, and (iii) 1% terminal growth rate. Dividend yield of over 5% should continue to support the share price. Risks Declining revenue with rising competition and weak consumer sentiment Increased industry competition and weak consumer sentiment could significantly impact ticket sales Malaysian gaming tax hike, impact of GST Gaming was spared in the recent budget, but NFOs remain vulnerable to potentially higher gaming tax going forward (pool betting tax was last raised in 2010, gaming tax in 1998). GST from 2015 will impact margins (unless passed on via lower prize payouts). Source: AllianceDBS Page 19

20 Magnum Key Assumptions Segmental Breakdown FY Dec 2012A 2013A 2014A 2015A 2016F Revenues (RM m) Gaming 3,086 2,989 2,982 2,952 2,982 Corporate and Others 3 3 (97) 3 3 Total 3,089 2,991 2,885 2,955 2,985 Operating profit (RM m) Gaming Corporate and Others 4 (5) (18) (5) (5) Total Operating Margins (%) Gaming Corporate and Others (164.5) 18.1 (151.8) (151.8) Total Income Statement (RM m) FY Dec 2012A 2013A 2014A 2015A 2016F Revenue 3,089 2,991 2,885 2,955 2,985 Cost of Goods Sold (2,574) (2,439) (2,358) (2,456) (2,494) Gross Profit Other Opng (Exp)/Inc (99) (93) (95) (95) (95) Operating Profit Net Interest (Exp)/Inc (94) (54) (44) (38) (32) Exceptional Gain/(Loss) 80 (59) Pre-tax Profit Tax (64) (73) (128) (117) (113) Minority Interest 2 (5) Net Profit Net Profit before Except EBITDA Growth Revenue Gth (%) (12.4) (3.2) (3.6) EBITDA Gth (%) (32.5) 9.0 (6.9) (6.3) (1.8) Opg Profit Gth (%) (31.1) 10.4 (6.0) (6.5) (2.0) Net Profit Gth (%) (29.2) (21.2) (3.1) (4.3) 0.9 Margins & Ratio Gross Margins (%) Opg Profit Margin (%) Net Profit Margin (%) ROAE (%) ROA (%) ROCE (%) Div Payout Ratio (%) Net Interest Cover (x) Margins Trend 17.0% 16.0% 15.0% 14.0% 13.0% 12.0% 11.0% 10.0% 9.0% 8.0% 7.0% Gaming revenue to drop in 2015 before recovering 2012A 2013A 2014A 2015A 2016F Operating Margin % Net Income Margin % Page 20

21 Magnum Quarterly / Interim Income Statement (RM m) FY Dec 3Q2013 4Q2013 1Q2014 2Q Q2014 Revenue Trend % 15% Revenue Cost of Goods Sold (589) (625) (642) (578) (559) Gross Profit Other Oper. (Exp)/Inc (23) (18) (19) (11) (24) Operating Profit Other Non Opg (Exp)/Inc Associates & JV Inc Net Interest (Exp)/Inc (13) (13) (13) (13) (13) Exceptional Gain/(Loss) 0 (13) Pre-tax Profit Tax (12) (16) (34) (25) (29) Minority Interest 0 0 (2) (1) (1) Net Profit Net profit bef Except EBITDA Q2012 3Q2012 4Q2012 Revenue 1Q2013 2Q2013 3Q2013 4Q2013 1Q2014 2Q2014 Revenue Growth % (QoQ) 3Q % 5% 0% -5% -10% -15% -20% Growth Revenue Gth (%) (12.1) (3.8) EBITDA Gth (%) (9.1) (18.2) (17.9) Opg Profit Gth (%) (9.2) (18.5) (18.4) Net Profit Gth (%) 9,880.6 (13.4) 47.2 (17.6) (33.2) Margins Gross Margins (%) Opg Profit Margins (%) Net Profit Margins (%) Balance Sheet (RM m) FY Dec 2012A 2013A 2014A 2015A 2016F Asset Breakdown (2014) Net Fixed Assets Invts in Associates & JVs Other LT Assets 4,141 2,984 2,984 2,984 2,984 Cash & ST Invts 1, Inventory Debtors Other Current Assets Total Assets 5,898 3,719 3,871 3,664 3,522 ST Debt Creditor Other Current Liab LT Debt 1, Other LT Liabilities Shareholder s Equity 3,405 2,480 2,807 2,781 2,818 Minority Interests Total Cap. & Liab. 5,898 3,719 3,871 3,664 3,522 Non-Cash Wkg. Capital Net Cash/(Debt) (178) (515) (217) (287) (291) Debtors Turn (avg days) Creditors Turn (avg days) Inventory Turn (avg days) Asset Turnover (x) Current Ratio (x) Quick Ratio (x) Net Debt/Equity (X) Net Debt/Equity ex MI (X) Capex to Debt (%) (10.8) (41.7) (0.9) (1.1) (1.4) Z-Score (X) Page 21

22 Magnum Cash Flow Statement (RM m) FY Dec 2012A 2013A 2014A 2015A 2016F Pre-Tax Profit Dep. & Amort Tax Paid (101) (106) (128) (117) (113) Assoc. & JV Inc/(loss) Chg in Wkg.Cap (37) (52) 0 Other Operating CF (34) (28) Net Operating CF Capital Exp.(net) Other Invts.(net) Invts in Assoc. & JV Div from Assoc & JV Other Investing CF (20) (20) (44) (38) (32) Net Investing CF (36) (30) (23) Div Paid (172) (256) (285) (211) (213) Chg in Gross Debt (793) (199) (125) (130) (130) Capital Issues Other Financing CF (80) (697) Net Financing CF (1,045) (1,152) (410) (341) (343) Currency Adjustments Chg in Cash (426) (285) 195 (199) (135) Opg CFPS (sen) Free CFPS (sen) Capital Expenditure A 2013A 2014A 2015A 2016F Capital Expenditure (-) Target Price & Ratings History RM S.No. Da te Closing Ta rge t Price Pric e Ra ting 1: 26 Feb Buy 2: 04 Mar Buy 3: 22 May Hold 4: 22 Aug Hold 5: 10 Nov Hold 6: 28 Nov Hold Feb-14 Jun-14 Oct-14 Feb-15 Note : Share price and Target price are adjusted for corporate actions. Page 22

23 Magnum AllianceDBS Research recommendations are based an Absolute Total Return* Rating system, defined as follows: STRONG BUY (>20% total return over the next 3 months, with identifiable share price catalysts within this time frame) BUY (>15% total return over the next 12 months for small caps, >10% for large caps) HOLD (-10% to +15% total return over the next 12 months for small caps, -10% to +10% for large caps) FULLY VALUED (negative total return i.e. > -10% over the next 12 months) SELL (negative total return of > -20% over the next 3 months, with identifiable catalysts within this time frame) Share price appreciation + dividends GENERAL DISCLOSURE/DISCLAIMER This report is prepared by AllianceDBS Research Sdn Bhd ( ADBSR ) (formerly known as HwangDBS Vickers Research Sdn Bhd), a subsidiary of Alliance Investment Bank Berhad ( AIBB ) and an associate of DBS Vickers Securities Holdings Pte Ltd ( DBSVH ). This report is solely intended for the clients of DBS Bank Ltd and DBS Vickers Securities (Singapore) Pte Ltd, its respective connected and associated corporations and affiliates (collectively, the DBS Vickers Group ) only and no part of this document may be (i) copied, photocopied or duplicated in any form or by any means or (ii) redistributed without the prior written consent of ADBSR. The research set out in this report is based on information obtained from sources believed to be reliable and ADBSR, its holding company AIBB, their respective connected and associated corporations, affiliates and their respective directors, officers, employees and agents (collectively, the Alliance Bank Group ) do not make any representation or warranty as to its accuracy, completeness or correctness. Opinions expressed are subject to change without notice. This document is prepared for general circulation. Any recommendation contained in this document does not have regard to the specific investment objectives, financial situation and the particular needs of any specific addressee. This document is for the information of addressees only and is not to be taken in substitution for the exercise of judgement by addressees, who should obtain separate independent legal or financial advice. The Alliance Bank Group accepts no liability whatsoever for any direct, indirect and/or consequential loss (including any claims for loss of profit) arising from any use of and/or reliance upon this document and/or further communication given in relation to this document. This document is not to be construed as an offer or a solicitation of an offer to buy or sell any securities. The Alliance Bank Group, along with its affiliates and/or persons associated with any of them may from time to time have interests in the securities mentioned in this document. The Alliance Bank Group may have positions in, and may effect transactions in securities mentioned herein and may also perform or seek to perform broking, investment banking/corporate advisory and other banking services for these companies. They may also have received compensation and/or seek to obtain compensation for broking, investment banking/corporate advisory and other services from the subject companies. Any valuations, opinions, estimates, forecasts, ratings or risk assessments herein constitutes a judgment as of the date of this report, and there can be no assurance that future results or events will be consistent with any such valuations, opinions, estimates, forecasts, ratings or risk assessments. The information in this document is subject to change without notice, its accuracy is not guaranteed, it may be incomplete or condensed and it may not contain all material information concerning the company (or companies) referred to in this report. The valuations, opinions, estimates, forecasts, ratings or risk assessments described in this report were based upon a number of estimates and assumptions and are inherently subject to significant uncertainties and contingencies. It can be expected that one or more of the estimates on which the valuations, opinions, estimates, forecasts, ratings or risk assessments were based will not materialize or will vary significantly from actual results. Therefore, the inclusion of the valuations, opinions, estimates, forecasts, ratings or risk assessments described herein IS NOT TO BE RELIED UPON as a representation and/or warranty by the Alliance Bank Group (and/or any persons associated with the aforesaid entities), that: (a) (b) such valuations, opinions, estimates, forecasts, ratings or risk assessments or their underlying assumptions will be achieved, and there is any assurance that future results or events will be consistent with any such valuations, opinions, estimates, forecasts, ratings or risk assessments stated therein. Any assumptions made in this report that refers to commodities, are for the purposes of making forecasts for the company (or companies) mentioned herein. They are not to be construed as recommendations to trade in the physical commodity or in the futures contract relating to the commodity referred to in this report. DBS Vickers Securities (USA) Inc ("DBSVUSA")"), a U.S.-registered broker-dealer, does not have its own investment banking or research department, nor has it participated in any investment banking transaction as a manager or co-manager in the past twelve months. ANALYST CERTIFICATION The research analyst primarily responsible for the content of this research report, in part or in whole, certifies that the views about the companies and their securities expressed in this report accurately reflect his/her personal views. The analyst also certifies that no part of his/her compensation was, is, or will be, directly, or indirectly, related to specific recommendations or views expressed in this report. As of the date the report is published, the analyst and his/her spouse and/or relatives who are financially dependent on the analyst, do not hold interests in the securities recommended in this report ( interest includes direct or indirect ownership of securities). COMPANY-SPECIFIC / REGULATORY DISCLOSURES 1. DBS Bank Ltd., DBS Vickers Securities (Singapore) Pte Ltd ( DBSVS ), their subsidiaries and/or other affiliates do not have a proprietary position in the securities recommended in this report as of 9 Feb DBS Bank Ltd., DBSVS, DBSVUSA, their subsidiaries and/or other affiliates may beneficially own a total of 1% of any class of common equity securities of the company mentioned as of 11 Feb Compensation for investment banking services: DBS Bank Ltd., DBSVS, DBSVUSA, their subsidiaries and/or other affiliates may have received compensation, within the past 12 months, and within the next 3 months may receive or intends to seek compensation for investment banking services fromthe Page 23