Sembcorp Industries Limited Target Price: 5.02 SGD (+19.8%)

Transcription

1 Sembcorp Industries Limited Target Price: 5.02 SGD (+19.8%) 15 th February 2015 Last Closed Price: 4.19 SGD 12M Target: 5.02 SGD Synergizing Businesses; Creating Value Upside Potential: 19.8% GICS Sector: Industrials GICS Sub-Industry: Industrial Conglomerates Bloomberg Ticker SCI SP Equity 1Y Price v. Relative Index Sembcorp Ind Company Description Sembcorp Industries Ltd provides utilities and integrated services for industrial sites such as power, gas, steam, water, wastewater treatment and other on-site services. The Company's businesses also include marine & offshore engineering and urban development comprising industrial parks and business, commercial and residential spaces. Key Financials Market Capitalization (mil SGD) Shares Outstanding (mil) A.D. Value Traded (mil SGD) Dividend Yield (%) Beta 1.10 P/E (ttm) 9.7 (USD mil) FY11A FY12A FY13A FY14A P/E (x) P/B (x) ROE (%) m Gross Div Div Yield (%) D/E Key Executives Chairman CEO / Executive Director Lead Independent Director Chief Financial Officer Research Analysts: Darren Cheong Tong Yi Jue Xavier Dong Xiao Peng STI Index Ang Kong Hua Tang Kin Fei Goh Geok Ling Koh Chiap Khiong darrenc12@gmail.com tongyijue@u.nus.edu xavierxiaopeng.dong@gmail Emerging markets growth story: With its increasing industrialization and development, India is experiencing strong growth in power demand, driven by rapid growth in its manufacturing sector and increasing development. The power purchase agreement will not only provide a stable long-term revenue stream, but also enable the company to play an important role in helping to reduce the severe shortage of power supply in Andhra Pradesh. The state currently faces severe power shortage of up to 19% of unmet power demand during peak periods. In addition to the inadequate generation within the state, the transmission corridor, which brings power into southern India from the rest of the country, is also limited in its capacity. As such, the plant, located in southern India, will play an essential role in helping to mitigate this shortage when it commences operation by the second half of The project is a major strategic milestone for Sembcorp and marks its entry into the fast-growing Indian energy market. Thus, Sembcorp is well positioned to leverage on the growing Indian energy market and boost its marine and energy businesses. Strategic position on key resources: Against a backdrop of fast emerging economies in the region as mentioned above, it is a key concern for governments to develop a safe and reliable utilities network to support industrialisation. This will enable the efficient transportable and management of key resources such as land, water and energy. With business units capturing the entire value chain, Sembcorp Industries is strategically positioned to ride on the rapid industrialisation of such economies. The company possess strong market share in the Asia region, and plays a huge stake in many key projects in China, India, Indonesia and Vietnam. We expect to see overseas expansion as one of the main revenue drivers for Sembcorp Industries in the many years ahead. Rebound in oil prices: Amid the uncertainty in the oil and gas industry, huge volatility in oil prices is putting a dent on the Marine and Offshore Engineering business of the conglomerate. With the Marine business accounting for half of the company s revenue, the prospects of the oil and gas economy will have significant impacts on the profitability of Sembcorp Industries. Looking forward, we believe the oil prices will make a reversal in the third quarter of 2015, after the oversupply is curbed. Direction of oil prices stems from multidimensional factors, such as OPEC decisions as well as demand for these resources from emerging economies. As such, this remains a key risk of our research report. However, a strong order book with earnings projected till 2019 put Sembcorp in a good stead to ride the current volatility.

2 Business Description Core Businesses Figure 1: Net profit by Business Segments The Group is primarily involved in the following businesses: Utilities Marine Urban Development 6% 4% 39% Utilities The utilities business provides energy and water to industrial and municipal customers. It operates in 15 countries with an established presence in Asia and a strong growing presence in emerging markets around the world. Key activities in the energy sector include power generation and retail, process steam production and supply, as well as natural gas import, supply and retail. 51% Marine Utilities Urban Development Other business Source: Sembcorp annual report In the water sector, the business offers industrial and municipal wastewater treatment, as well as the production and supply of reclaimed, desalinated and potable water and water for industrial use. Together with energy and water, the business also offers on-site logistics as part of a bundled offer to industrial customers, as well as solid waste management services. Marine The Marine business has a strong global reputation and a 50-year proven track record. It provides a full spectrum of integrated solutions from ship repair, ship conversion and rig building to offshore engineering and construction. With operations spanning Singapore, Brazil, Indonesia, India, the UK and China, it offers one of the largest marine and offshore engineering facilities in Asia. By leveraging on complementary facilities and capabilities, the business provides customers a full range of integrated customised solutions, from conceptualisation and design, engineering, procurement and construction, to commissioning and delivery. Industrial The Urban Development business owns, develops, markets and manages urban development comprising industrial parks as well as business, commercial and residential space in Vietnam, China and Indonesia. The business offers an integrated approach to delivering urban work and living environments that attract local and international investments. With over 20 years track record in undertaking master planning, land preparation and infrastructure development, as well as in transforming raw land into large-scale urban developments, the business stands in good stead to capitalise on urbanisation trends in developing countries. Corporate Governance The board and management of Sembcorp recognise that well-defined corporate governance processes are essential in enhancing corporate accountability and long-term sustainability, and remain committed to ensuring high standards of corporate governance to preserve and maximise shareholder value.

3 Industry & Competitive Analysis Figure 2: Geographic Segmentation Industry Prospects 15% 12% 13% 15% Singapore USA Other Source: Bloomberg 45% Europe Asia and Australia The Marine & Offshore Engineering industry is facing strong head-winds due to slowing economic activities as well as low oil prices. We may see a reversal in oil prices trend in the second half of 2015 when oil supply corrects. The utilities industry remains competitive with a small number of large, mature companies competing for market share. Singapore Singapore represents nearly half of the revenue and will remain a key segment to the company. Due to land scarcity, water and waste management remain key priorities for this nation-state. As a relatively mature economy, Singapore s economic growth hinges on the ability to raise productivity facing land and labour constraints. This suggests that developments and projects in Singapore will contribute to a strong pipeline for Sembcorp. Asia Emerging economies in the Asia region will serve as bright spots for future revenue growth. Key projects in Vietnam and India deliver consistent returns, on the back of higher demand for industrial developments and infrastructural amenities. Despite the moderated growth in China, the global industrialisation trend has continued at the lead of China. With energy demand remaining high in these regions, we will continue to see strong contributions in emerging countries in the coming years. Table 1 : SWOT analysis Strengths Weaknesses -Brand image -High capex, -Global Leader low revenue -Reputation -Increasing debts SWOT analysis Strengths Strong market position enhances brand image and boosts bargaining power Solid fundamentals of Sembcorp's businesses enable the group to have a strong market position in its field. Opportunities -contracts made this year Threats -Intense competition -government regulations -Environment issues In utilities segment, the group has established itself as a global leader in the provision of energy, water and on-site logistics and services to multiple customers in industrial sites. The utilities segment has strategic relationships with more than 140 multinational companies and has its operations in Singapore, the UK, China, Vietnam, and the UAE. Sembcorp's marine business is a global leader in the marine and offshore industry and its industrial parks business has established a strong reputation in Asia's emerging growth markets, with more than 650 multinational corporations and leading local enterprises as tenants, for its expertise in owning, developing, marketing and managing integrated townships and industrial parks. The group is the first commercial importer and retailer of natural gas and one of the leading electricity retailers in Singapore. It also the first mover in supplying and retailing compressed natural gas (CNG) to motorists in Singapore. Furthermore, Sembcorp Marine operates the largest ship repair and marine-related facilities in Asia, with a total docking capacity of 1.9 million deadweight tonnes and has a global network of shipyards strategically located near major shipping routes in Singapore, China, India, Brazil and the US. With this strong market position in its different businesses, the group is able to provide essential solutions for the growing needs of customers and deliver sustainable growth. Therefore, a strong market position helps the company enhance its brand image and boost its bargaining power.

4 Figure 3 : Revenue and Capex comparison CAPEX Revenue Weaknesses Weak capital expenditure management impacting revenue and profitability Sembcorp s capital expenditure (capex) trends show considerable strains. During FY , the group s capex increased from S$407.4 million to S$1,156.3 million. Increase in capex should have resulted either in revenue expansion or profit expansion. During FY , the group s revenue increased marginally from S$9,572.4 million to S$10,798 million while the profit before taxes declined from S$1,218 million to S$1,160 million. This implies that the group s capex program is not achieving the intended results. As a result, the group s total debt increased from S$968 million to S$1,907 million during FY This in turn has impacted the group s financial flexibility and performance. Opportunities Some of the opportunities that are present for Sembcorp are the contracts that are made for the year. For instance, during November 3, 2014, Sembcorp Marine s PPL Shipyard secured a US$240 million contract to build a new jackup drilling rig from BOT Lease Co., Ltd, a leasing company of The Bank of Tokyo-Mitsubishi UFJ. In the previous month, Sembcorp Marine announced that its subsidiaries Sembmarine and Jurong Shipyard secured offshore energy related contracts valued at a combined S$222 million. In September 2014, SMOE secured a $190 million contract with Bechtel for the fabrication of liquefied natural gas processing modules for a resource project in Western Australia. In June 2014, Sembawang Shipyard secured a long-term Favoured Customer Contract (FCC) from GasLog LNG Services Ltd., to provide ship-repair, refurbishment, upgrading and related marine services for its managed fleet of 20 LNG carriers. With the number of contracts being confirmed for the year 2014, this will allow Sembcorp to maintain a steady flow of revenue for at least the next 2-3 years. Threats Intense competition Sembcorp Industries faces intense competition from abroad as well as in Singapore. As a significant large amount of revenue comes from China, there are many competitors that competes with the group. One example is China State Construction Engineering Corporation (CSCEC). It is ranked 1 st as the largest construction and engineering company in China and 3 rd in the world. Given its large size and numerous branches and subsidiaries, they will be able to enjoy large economies of scale which in turn lower the cost of production which translates to lower price. In Singapore, the marine offshore engineering segment faces stiff competition with Keppel Corp. Government regulations and environmental issues Government regulations often limit access to potential markets and impose extensive requirements concerning environmental protection and pollution control. These might discourage customers' activities, reducing demand for Sembcorp's marine and offshore engineering services. Sembcorp could be liable for damages resulting from pollution of offshore waters. Regulatory organizations are also considering additional operating constraints during the tropical storm season. Such constraints could limit the capability of many of the group's rigs to operate at certain locations during a significant portion of each year. Since the marine segment is the largest revenue contributor for the group, the impact of these additional regulations could affect its revenue growth.

5 Peers Comparison Table 2: List of peers CH CHINA SHIPBUILDING Equity INDUSTR-A KS HYUNDAI HEAVY Equity INDUSTRIES CH CHINA CSSC HOLDINGS Equity LTD-A SCI SP Equity SEMBCORP INDUSTRIES LTD SMM SP SEMBCORP MARINE LTD Equity KS SAMSUNG HEAVY Equity INDUSTRIES AST AU AUSNET SERVICES Equity YZJSGD SP YANGZIJIANG Equity SHIPBUILDING KS DAEWOO SHIPBUILDING Equity & MARINE CH ZHONGSHAN PUBLIC Equity UTILITIES-A KS HYUNDAI MIPO Equity DOCKYARD 7003 JP MITSUI ENGINEER & Equity SHIPBUILD 6269 JP MODEC INC Equity 1101 HK CHINA RONGSHENG Equity HEAVY INDUST COS SP COSCO CORP SINGAPORE Equity LTD CH CSSC STEEL STRUCTURE Equity ENGIN-A Source: Original data Figure 4: Market Capitalisation AUSNET SERVICES SEMBCOR P INDUSTRIE S LTD SEMBCOR P MARINE LTD COSCO CORP SINGAPOR E LTD YANGZIJIA NG SHIPBUILD ING We have identified a group of peers mainly from the Asian region due to the current divergence of macroeconomic conditions around the world. In comparison to the western counterparts, a peer profile from this region will serve as a closer reflection of business conditions for Sembcorp s operations. Table 2 shows a list of peers for comparison analysis. A suitable metric for comparison between transnational companies will be the EV/EBITDA. This will avoid the problem of accounting for taxation in different countries and allows us to compare across the peers. Using the TTM EBTDA, we arrive at 8.98x for Sembcorp Ind. At an average of 12.9x amongst the list of peers, this necessarily implies that Sembcorp may well be undervalued at this price. Stripping debt out of the equation to assess solely on P/E ratios, a 9.66x for Sembcorp is relatively low compared to an average of 54.4x, mainly due to Samsung Heavy Industries trading at 75.5x. However, close competitors such as Cosco Corp and Zhongshan Public Utilities are trading at 31.3x and 24.6x respectively. Based on the similar project pipelines, we do not expect Sembcorp to be trading at the current multiple, given the strong balance sheet of the company. Lastly, looking at the market capitalisation in SGD, Sembcorp ranked 4 th out of the 16 companies. However, with 25 subsidiaries based in China in Sembcorp s group structure, we believe that Sembcorp will be able to leverage on this reach to consolidate market share in the Chinese economy. Competitive Edge Strong line of expertise in energy and water resources As an industrial conglomerate, its three main businesses span from marine and utilities to urban development. As such, there may be many competitive edges specific to each industry. However, we find it useful to identify one of the stronger competitive edge possessed by Sembcorp in its specialty dealing with resources. Due to macroeconomic expansion in the region, water and waste management is also fast becoming increasingly important for any urban development plan. Sembcorp is able to tap on its experience of past projects as the main developer of Singapore s utilities network. The quality of such infrastructural systems will likely be a blueprint on which other countries build after. With a strong reputation of large successful projects, Sembcorp s operations in the utilities industry are highly sought-after. HYUNDAI HEAVY INDUSTRIE S CHINA SHIPBUILD ING INDUSTR- A CHINA CSSC HOLDINGS LTD-A DAEWOO SHIPBUILD ING & MARINE ZHONGSH AN PUBLIC UTILITIES- A SAMSUNG HEAVY INDUSTRIE S Source: Bloomberg

6 Investment Thesis Figure 5: India s GDP growth from 2006 to Source: Trading economics Figure 6: India s population from 1960 to Emerging Markets Growth Story Expansion in Indian market Sembcorp intended to expand its operations in the emerging markets like India. Sembcorp Industries (Sembcorp) announces that its shareholding in Thermal Powertech Corporation India (TPCIL) has increased from 49% to 65%. The total investment for the incremental 16% stake amounts to approximately Rs 400 crores (approximately S$83.7 million), financed by a mix of internal funds and borrowings. The investment amount was arrived at by taking into account mainly the book value of the project. With this increase in stake, TPCIL now becomes a subsidiary of Sembcorp. The remaining 35% is owned by Gayatri Energy Ventures, a wholly-owned subsidiary of Gayatri Projects. TPCIL owns and is developing a 1,320-megawatt coal-fired power plant located in Krishnapatnam in Andhra Pradesh s SPSR Nellore District, India. This is Sembcorp s first power project in India and is scheduled to commerce commercial operation of its first unit in the fourth quarter of this year. The second unit is expected to be completed in Sembcorp has two power projects with a total capacity of 2,640 megawatts in India: the TPCIL project, as well as another 1,320-megawatt coal-fired power plant that is currently under development by NCC Power Projects. With both these projects, the Group is well-positioned in India s growing power sector. Souce: Worldometers Figure 7: Total waste generated, Singapore Source: Ministry of the Environment and Water Resources, Singapore Strategic Position on Key Resources In this section, we focus on the two businesses of the company, namely the utilities division and the urban development division. Back at home, Sembcorp Industries has been actively involved in numerous projects at Jurong Island. The multi-facilities centre provide one-stop services to industrial plants and is able to conduct a full range of industrial utilities functions at the Banyan facility. Overseas, there is an increasing need for complex water treatment and management systems, especially in China. Despite the slowdown in construction and property activities in China, the heavy industrial sector remains resilient due to government policies aimed at increasing production output. Four water plants are scheduled to begin operations in 2015, with three of them based in China s industrial parks. Another rising area of particular interest is alternative fuel. Governments of both developing and developed countries are facing mounting pressures to be environmentally-friendly by make better use of industrial waste. Based on Figure 7, we are able to see that waste generation has been on a climb every year, as total production output increases. Management of these wastes is paramount, with the lifespan of Singapore s landfill at about 35 years. The current investment in the Energy-from-Waste Facility at Jurong Island addresses this concern by complementing their existing solid waste management operations. With these developments in place, Sembcorp aims to maintain leadership by investing and acquiring technologies to enhance its capabilities to manage large-scale multi-functional projects.

7 Figure 8: Order Book Rebound in Oil Prices With crude oil at US$51.09 per barrel, there is a stifling effect on oil and gas activities globally. Investments in the industry has been dampened considerably, with the Canadian Association of Petroleum Producers forecasting a 33% cut in capital spending on future projects. However, both the OPEC and the U.S government shared bullish forecasts for the demand of crude in their January oil-market report, coupled with the lowest level of operating rigs since December Apart from the key concerns of oil prices, Sembcorp is involved in a full suite of integrated solutions. As oil prices are not likely to remain low, we do not foresee a sustained level of divestments. This may be a good opportunity for Sembcorp to enhance its proprietary arsenal of rigs, drillships and container vessels. With reference to Figure 8, the orderbook provides a steady stream of income for Sembcorp and we believe that Sembcorp will remain resilient against current challenges. As such, when oil prices bottom, we may see a renewed interest as soon as the third quarter of 2015, and we expect a strong momentum of recovery for Sembcorp s operations given the strategic reach of its global network of shipyards. Source: Sembcorp AR13 Figure 9: Segment Growth 20% 15% 10% 5% 0% -5% -10% -15% -20% Business Segment Growth (CAGR) Utilities Marine Urban Development 5 years (15-24) 10 years (15-24) Source: Our Estimates Others/ Corporate Valuation & Key Investment Risks Valuation Discounted Cash Flow (DCF) model was employed to produce a valuation for Sembcorp. As a check, we have validated the target price by conducting sensitivity analysis. The Enterprise Value (EV) of Sembcorp is determined using the Free Cash Flow to Firm (FCFF) method and discounting the cash flows by Weighted Average Cost of Capital (WACC). This method is suitable as it will account for the cash flow to both debt holders and equity holders. Revenue Growth Driven by Utilities Business Segment Well-positioned as the market leader in Utilities business, we foresee Sembcorp s Utilities revenue to increase at a CAGR of 12% in the next 5 years. This is mainly driven by power capacity to increase by 76% and water capacity to increase by 21% between 2015 and 2016 period. As Sembcorp extends itself further into emerging markets like India and China, we expected this growth in capacity to continue but at a slower pace after From 2020 onwards, the growth in power capacity will tapper to 10% while water capacity to 3% as demands for Utilities move closer to market saturation. Revenue due to Marine business segment will drop, mainly because of lesser new book orders for rig constructions in the next five years. With oil price remained less than half its last peak; at US$ per barrel, clients of Sembcorp like Noble Corporation and Perisai (L) Inc are all cutting back their capital expenditure budgets for the near future. However, we do believe that this low oil price is not to stay and rebound in oil price will come eventually; rig construction business will then pick up. Hence, we predicted a CAGR of 3% growth in Marine Business over the 10 years period from 2015 to 2024.

8 For more than 20 years, Sembcorp have demonstrated a strong track record in developing large-scale Urban Developments. Their strategic presence in China and Vietnam will continue to ensure their Urban Development business grows at a fast rate in these two countries and hence we forecasted a CAGR of 14% revenue growth. However due to the segment s relative small size as compared to Marine and Utilities, this segment only contributes around 0.3% to Sembcorp s total revenue in our forecast period. Capital Expenditure (CAPEX) as a percentage of Revenue to be lower at 11.5%, signalling a higher Return on Asset (ROA). Over the last 3 years, CAPEX as a percentage of revenue has been around 13.2%. As compare to 7.4% in 2010, this higher percentage means more Capex has been employed but smaller amount of turnover has been generated. We believed that the revenue generation ability of the new CAPEX, maybe a lagging factor, and turnover per CAPEX would be improved in the future hence 11.5% was assigned. Figure 10: WACC Assumptions Source: Our Estimates Gearing Ratio (Debt to Equity) to remain at 29.1% Gearing ratio of Sembcorp has been decreasing over last two years, from as high as 41.1% in We believed that by keeping gearing ratio to be the same as 2013 at 29.1%, we are in-line with how the management is planning to run the business. Weighted Average Cost of Capital (WACC) A risk free rate of 2.3% was used based on yield to maturity of a Singapore government bond (Issue code: NA12100N) that has 30 years maturity. A beta of 1.31 was plugged from Thomsons Reuters. We believed it is reasonable as Sembcorp s Marine business is much more volatile that the market while its utilities business is as volatile as the market. Market risk premium of 8.0% was used; based on Bloomberg s data for Singapore market. Sembcorp s cost of debt is estimated by dividing FY2013 interest expenses over the total debt. With its current debt to capital of 20%, a WACC of 11.0% was derived. Long Term Growth Rate We estimated long run growth rates based on a revenue-weighted GDP growth rates of each country Sembcorp operated in during FY2013 (Figure 11). Consequently, we have a consolidated long run growth rate of 3.85%. Figure 11: Estimating Long Term Growth Rate Geography Revenue/ $M % Revenue 2030 GDP Weighted Singapore % 2.40% 1% China % 5.50% 1% India % 6.50% 1% Vietnam 6 0% 6.56% 0% Indonesia 1 0% 5.10% 0% World % 3.30% 1% Brazil % 3.90% 1% Total revenue Long Term Growth Rate 3.85% Source: OECD & Trading Economics

9 Figure 12: Sensitivity Analysis Table Source: Our Estimates Sensitivity Analysis Sensitivity Analysis Table We conducted a sensitivity analysis on our valuation to test for its robustness. We varied two important drivers of the Enterprise Value; the WACC and the Long Term Growth Rate respectively. The WACC was varied by 1% and the Long term Growth Rate by 0.5% and the range of DCF valuations obtained was between SGD3.8 to SGD7.9. We are pleased that only in extreme cases such as WACC to be more than 12% will our valuation price per share falls below the current price. Tornado Chart Analysis Our Tornado Chart has shown the top three drivers of the equity value are 1) How fast can power capacity grow, 2) What rate of returns do equity holders want, 3)How much capital does Sembcorp spend on Fix Assets to generate revenues. The first driver is in line with our first investment thesis that Utilities revenue growth in emerging markets such as India is an important value driver for Sembcorp going forward. While the third most important driver reminds us that if Sembcorp is able to reduce their CAPEX per revenue in the future, its equity value will grow tremendously. Figure 13: Estimating Long Term Growth Rate Impact on Equity Value Revenue- Power capacity growth Discount rate - CoE Capex - Purchase of property, plant and equipment (Note (a)) Exit - Gordon Growth Rate Capex -Additional investments in associates and joint ventures Discount rate - CoD Revenue - New order - Drillship, jack-ups, sumersible tappering Revenue -Power capacity growth tappering Revenue - Water & wastewater capacity growth Revenue - New order - Drillship, jack-ups, sumersible combined Orderbook Revenue - New order - Ship & Conversion & offshore Orderbook Revenue - New order - Ship & Conversion & offshore tappering Source: Our Estimates Risk Analysis Revenue - Water & wastewater capacity tappering Revenue -Growth of net orderbook of landsold Debt - Gearing Ratio (2,000) (1,500) (1,000) (500) ,000 1,500 2,000 2,500 Delay in Power Capacity Growth Power capacity growth could be delayed by two possible reasons. Firstly, it could be due to delays in the construction of the transmission lines laid by the local government. Secondly, it could be due to higher coal price as India s Supreme Court has in 2014 cancelled 214 out of 2018 coal-block licenses issued since Since coal is the main source of input fuel for India s Andhra Pradesh power plant, Sembcorp may react by cutting back power capacity growth. Cost of Debt to Increase With US unemployment rate at a healthy level and consumer expenditure continue to increase; US Federal Reserve may increase its interest rate. It is likely that Singapore Overnight Rate will follow suit and the cost of borrowing for Sembcorp will inevitably increase. As shown in Figure 13 that Cost of Debt is the fifth largest factor that could alter Sembcorp s Equity Value, an increase in Cost of debt, will see Sembcorp s valuation dropping.

10 Appendixes Appendix 1 Forecasted Income Statement Appendix 2 Forecasted Cash Flow Statement

11 Appendix 3 Forecasted Balance Sheet Appendix 4 - DCF Valuation This research material has been prepared by NUS Invest. NUS Invest specifically prohibits the redistribution of this material in whole or in part without the written permission of NUS Invest. The research officer(s) primarily responsible for the content of this research material, in whole or in part, certifies that their views are accurately expressed and they will not receive direct or indirect compensation in exchange for expressing specific recommendations or views in this research material. Whilst we have taken all reasonable care to ensure that the information contained in this publication is not untrue or misleading at the time of publication, we cannot guarantee its accuracy or completeness, and you should not act on it without first independently verifying its contents. Any opinion or estimate contained in this report is subject to change without notice. We have not given any consideration to and we have not made any investigation of the investment objectives, financial situation or particular needs of the recipient or any class of persons, and accordingly, no warranty whatsoever is given and no liability whatsoever is accepted for any loss arising whether directly or indirectly as a result of the recipient or any class of persons acting on such information or opinion or estimate. You may wish to seek advice from a financial adviser regarding the suitability of the securities mentioned herein, taking into consideration your investment objectives, financial situation or particular needs, before making a commitment to invest in the securities. This report is published solely for information purposes, it does not constitute an advertisement and is not to be construed as a solicitation or an offer to buy or sell any securities or related financial instruments. No representation or warranty, either expressed or implied, is provided in relation to the accuracy, completeness or reliability of the information contained herein. The research material should not be regarded by recipients as a substitute for the exercise of their own judgement. Any opinions expressed in this research material are subject to change without notice NUS Invest