Asean Telecom Sector. Regional Industry Focus. Spotting winners & losers. DBS Group Research. Equity 16 May 2016

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1 Regional Industry Focus Asean Telecom Sector Refer to important disclosures at the end of this report DBS Group Research. Equity 16 May 2016 Spotting winners & losers Nature and tenure of competition is different in Malaysia and Thailand; we prefer Thailand In Singapore, most negatives are priced in but wait till 9M16; top-line growth in Indonesia may disappoint over the next 2-3 years Top picks are JASIF and ADVANC, top SELLs are Maxis and Digi. M1 & StarHub are dark horses Prefer Thailand over Malaysia. Malaysia's telecom market is likely to remain intensely competitive due to Telekom Malaysia's entry as the fifth mobile operator in mid Meanwhile, Malaysian telcos could also end up paying up significantly more cash to renew their spectrums. In Thailand, we do not see structural rise in competition as a fourth mobile player has been ruled out. While True is leading the charge to secure 2G subscribers of AIS, competition is likely to cool down after AIS secures 900MHz spectrum on 27 May 2016, in our opinion. It is important to note that Thai telcos are trading at a discount to regional peers while Malaysian telcos are trading at a premium. In Singapore, most negatives are priced in but clarity will emerge in 9M16. Singapore telcos reduced their pricing for high-end data plans by 25-50% in March 2016 to discourage the entry of a new player whose business model is built on securing 10% market share in the long term. An auction for the reserved spectrum in 9M16 will clarify whether there will be a fourth mobile player. The big question is whether the players who are interested in the fourth mobile licence are able to raise funds for the spectrum and network rollout. M1 and StarHub have corrected significantly already in anticipation of the potential entry of a new player. Top-line growth in Indonesia may disappoint the street over the next 2-3 years. Indonesian telcos have been raising their rates for voice and SMS in the wake of declining usage as a short-term fix. However, more expensive voice and SMS is incentivising subscribers to switch to free messengers like Whatsapp and Line as smartphone penetration approaches the tipping point of 35% (Java 40-50%). Voice & SMS usage has declined sharply, especially for XL and Indosat, which derive 70-90% of their revenues from Java versus only 30-35% for Telkomsel. The latter is relatively more immune to this in the near term due to lower smartphone penetration in ex-java. Analyst Sachin Mittal Toh Woo Kim sachinmittal@dbs.com wookim@alliancedbs.com William Simadiputra william.simadiputra@id.dbsvickers.com Wasu MATTANAPOTCHANART wasum@th.dbsvickers.com 4G landscape in ASEAN STOCKS Source: DBS Bank, DBS Vickers, AllianceDBS Research Prices as of 12 May 2016 Price Mkt Cap Target Price Performance (%) Bt US$m Bt 3 mth 12 mth Rating Advanced Info (11.9) (38.1) , Service BUY Jasmine Broadband 10.1 (1.6) Internet , BUY Infrastructure Fund Digi.Com , (9.1) (27.0) HOLD M , (7.5) (33.5) HOLD StarHub , (6.7) (21.4) HOLD Maxis Bhd , (10.6) (21.8) FV ed: TH / sa: JC

2 Industry Focus Telecom Sector 4G landscape in ASEAN Source: DBS Bank, DBS Vickers, AllianceDBS Research Singapore has achieved almost full 4G population coverage followed by Malaysia at ~70%, Thailand at 40-50% and Indonesia at 10-15% in 1Q16. We derive Smartphone Affordability by dividing the GDP per capita of the country by the price of the popular 4G smartphone in that country. Popular smartphones, for example, are available for ~US$100 in Thailand and Indonesia. 4G was an opportunity to re-price data upwards in Singapore. Due to the latent demand for highly subsidised 4G smartphones, Singapore telcos were able to re-price data upwards since Singapore telcos have been encouraging subscribers to switch from unlimited data allowance in the 3G era to tiered data plans in the 4G era. 4G is a big theme in Malaysia but there is intense competition. At present, the country s top operators have achieved 70-75% population coverage. However, overall 4G migration has been low with only 20-25% subscribers using the 4G network. Much of the 4G network expansion happened in 2015, which could signal a much faster 3G to 4G migration in The pricing for 4G data was initially the same as for 3G but intensified competition has prompted telcos to allocate more data for the same price. In Thailand, telcos are not pushing hard for 4G subscribers and are focusing on 3G. In Thailand, 4G leader TRUE achieved 80% 4G population coverage by end of 2015, versus 40-50% for DTAC and less than 10% for AIS who suffered due to the lack of 1800MHz spectrum. However, none of the Thai telcos are aggressively pursuing 4G possibly due to the higher prices of 4G handsets. TRUE and DTAC have not been aggressive in targeting AIS's high-end customers by dropping data-pricing on 4G, as most high-end customers continue to prefer AIS for its perceived better quality. However, there is intense competition at the lower-end of the market. TRUE and DTAC are trying to win over AIS's 2G subscribers by offering them free 3G feature phones. In Indonesia, XL is pushing for 4G subscribers by offering cheaper data. Telkomsel has achieved 15-20% population coverage versus 10% for XL and 5-10% for Indosat. As 4G smartphone affordability is a big challenge, coupled with lower 4G coverage, XL has started to offer much lower data pricing to push 4G, which could hurt revenue growth prospects. We do not see much competition at the lower end of the market as Hutch faces funding shortage and XL is focussing on attracting high-end customers instead. Page 2 Page 2

3 Industry Focus Telecom Sector Singapore - Most negatives are priced in, but wait till 9M16 Singapore incumbents intent on securing market share Singapore s incumbent mobile players slashed mobile data prices in March 2016 for post-paid users whereby effective monthly pricing for higher-end data subscribers (5GB plus) decreased by 25-50%. In addition, M1 has also introduced new S$15 and S$20 post-paid SIM-only plans to defend its share of low-end data subscribers (<2GB data usage/month) in case there is a new player in the market. StarHub's Upsized Plans 2 year StarHub mobile postpaid plan 4G 3 4G 4 4G 5 4G 6 4G 12 Monthly rate (S$) Local talk time (mins) Unlimited Local SMS Unlimited Local data 3 GB 4 GB 5 GB 6 GB 12 GB With new data add on Total cost* Local data allowance 6 GB 7 GB 8 GB 9 GB 15 GB *Add on fee will increase to S$6 from S$3 from April M1's Upsized Plans M1 mobile postpaid plan Lite Lite+ Reg Reg+ Max Max+ Monthly rate (S$) Local talk time (mins) Unlimited Local SMS Unlimited Local data 300 MB 3 GB 4 GB 5 GB 7 GB 13 GB Data add on Total cost Local data allowance 1 GB 2 GB 3 GB 4 GB 7 GB 10 GB Source: Companies, DBS Bank By starting the price war even before the spectrum auction in 3Q16, existing players are signalling to the potential new entrant that they will defend their market share even at the expense of revenue. The upsized data plans address the threat to the higher-end data users while cheaper SIM-only plans by M1 address the threat to the low-end data users. The idea, in our view, is to discourage the entry of the new player whose business model is built on securing 10% market share in the long term. There will be clarity on fourth player's entry by 3Q16 Spectrum auction, set to happen in 3Q16, will clarify whether a fourth telco will enter the market. The key bottleneck is the ability of the new player to raise the funding for network capex and spectrum. MyRepublic, one of the two key contenders, estimates S$250m in required funding but has publicly disclosed only S$23m in funding raised so far. We estimate if MyRepublic can secure 10% market share and 20% EBITDA margins in the next five years, it will lead to a healthy ROI of 24%. However, raising funds may be challenging in the current environment. The regulators have set aside 2x10MHz in 900MHz band and 40MHz in 2.3GHz band for a new mobile player at a price of S$35m, which will be auctioned initially. The new player will be required to provide nationwide outdoor service coverage within 18 months of service commencement (30 September 2018) and Road tunnels and in building service coverage within 30 months. Underground MRT stations/lines service coverage need to be accomplished by 54 months. Key Spectrum Parameters Spectrum band Lot size Lots Rights Reserve duration price New entrant spectrum auction 900 MHz 2x5MHz 2 16 Years 2.3 GHz TDD 5MHz 8 16 Years S$ 35m General spectrum auction with new entrant 700 MHz 2x5MHz 9 15 Years S$ 20m 900 MHz 2x5MHz 4 16 Years S$ 20m 2.5 GHz TDD 5MHz 9 16 Years S$ 3m General spectrum auction without new entrant 700 MHz 2x5MHz 9 15 Years S$ 20m 900 MHz 2x5MHz 6 16 Years S$ 20m 2.3 GHz TDD 5MHz 8 16 Years S$ 3m 2.5 GHz TDD 5MHz 9 16 Years S$ 3m Source: IDA, DBS Bank IDA will reserve 2x5MHz in 900MHz for incumbents to ensure the continuity of services at the reserve price level. In addition, IDA is yet to comment on the 1,800MHz spectrum rights expiry in Based on the pricing of 900MHz and 2.3GHz, we expect the reserve price for each 2x5MHz spectrum to be ~S$10-15m, implying additional spectrum outlays of S$50-75m for 1800MHz spectrum for each player. Page 3 Page 3

4 Industry Focus Telecom Sector Expiring spectrum rights 900 MHz Expiry date SingTel 15 MHzx2 31 Mar 17 StarHub 5 MHzx2 31 Mar 17 M1 10 MHzx2 31 Mar 17 1,800 MHz SingTel 25 MHzx2 31 Mar 17 StarHub 25 MHzx2 31 Mar 17 M1 25 MHzx2 31 Mar 17 Source: IDA, DBS Bank For StarHub, in our base case, we have assumed a 4% adverse impact on revenue due to the fourth player by 2022, with EBIT margins falling to 18% versus 20% at present, and gives a TP of S$3.30. Our bull-case TP assuming non-entry of 4 th mobile player is S$4.10 while our bear-case TP assuming an aggressive 4 th mobile player is S$3.00. Share prices have declined over the past year In the possible scenario that a fourth player does not enter the market, M1 has the most to gain given the relatively cheap valuations it is trading at currently and its higher exposure to mobile. Negatives for M1 and StarHub are mostly priced in M1 and StarHub have corrected significantly in anticipation of the potential entry. M1 and StarHub were down 34% and 23% in the 12 months' ending 31 March In our base case, we have assumed a 10% adverse impact on M1 s revenue due to the fourth player by 2022, with EBIT margins falling to 16% versus 20% at present and gives a TP of S$2.56. However, our bull-case TP assuming non-entry of 4 th mobile player is S$3.30 while our bear-case TP assuming an aggressive 4 th mobile player is S$2.15 Source: Yahoo finance Page 4 Page 4

5 Industry Focus Telecom Sector Thailand Competition tempered with absence of fourth player Non-entry of fourth player to benefit the sector The potential entry of a fourth mobile player, with JAS mobile broadband winning spectrum rights in late 2015, could lead to significantly higher competition in the Thai mobile space. However, in March 2016, the regulators revoked the fourth player's spectrum rights as JAS mobile was unable to pay the spectrum fee. Without a new player entering the market, the structural competition in the market is unlikely to increase. TRUE remains aggressive for the time being TRUE remains aggressive in the mobile segment as it has set an ambitious target of ~30% revenue share in the long term. The company has incrementally gained market share consistently over the past few years, chipping away mostly at DTAC s market share. As AIS is shutting down its 2G services, TRUE and DTAC are keen to secure its 2G subscribers. In our opinion, competition is likely to cool down once AIS secures the 900MHz spectrum on 27 May 2016 as existing 2G subscribers can continue to stay on the 2G network then. TRUE has consistently gained revenue share and potential auction will likely take more time. Meanwhile, AIS has signed a Memorandum of Understanding with TOT for noncommercial utilisation of TOT s 2.1GHz Spectrum. Success achieved during this trial period may lead to a deal between TOT and AIS, whereby AIS will utilise c.80% of TOT s 2.1GHz spectrum. Spectrum Allocations in Thailand Under concession Under licence (MHz) (MHz) 900MHz 1.8GHz 2.1GHz 850MHz 1.8GHz Total AIS DTAC TRUE ** 55.0 ** Wholesale deal with CAT Source: Companies, DBS Bank Negatives are already reflected in lower PER multiples Thai telco stocks suffered heavily over the last 12 months due to the news of the fourth player's potential entry and JAS subsequently winning spectrum rights. Although JAS mobile has pulled out of the market, the telco stocks are still trading at a relatively low levels due to an intense competition. We believe the negatives arising from competition in the segment is already priced in, which is indicated by the relatively low PER multiples. JASIF and ADVANC top picks JASIF offers highly secured streams of income and dividend yields of % in FY16-17F. NBTC is expected to decide by the middle of this month whether to impose any additional penalty on the JAS group after Jas Mobile reneged on the payment for the 900MHz licence. We believe that this is only a short-term overhang, and JASIF s operation should not be impacted by NBTC s final decision. More spectrum to enter the market With JAS s non-entry, the 900MHz spectrum allocated to JAS is likely to enter the market for incumbents to grab. AIS has shown willingness to secure the spectrum at the previous winning price of Bt76bn. TRUE has already secured 900MHz while DTAC has indicated that it is not interested in additional 900MHz at this price as it already has enough 900MHz from its previous concession. However, the final decision on allocation ADVANC offers dividend yield of 7.5%-7.0% in FY16F-17F which is fairly attractive versus the regional peers. WE have reduced dividend payout ratio from 100% to 90% from FY17F onwards to take into account the additional burden of the new 900 Mhz license licence. ADVANC is set to resume earnings growth from FY17F onwards as FY16F suffers from one-off handset subsidy of ~Bt8bn. Page 5 Page 5

6 Industry Focus Telecom Sector Indonesia Top-line growth may disappoint over the next 2-3 years Per unit revenue trending up despite declining usage Short-term fixes don t last Indonesian telcos have been raising their rates for voice and SMS services in the wake of declining usage as a short-term fix. Minutes of Usage (MOU) and SMS volumes in Indonesia have declined at average rates of 1% and 6% respectively over the past eight quarters. Minutes of Usage per user has declined sharply for XL Source: Companies, DBS Bank Source: Companies, DBS Bank Indonesian telcos have managed to limit the impact of declining usage on the top line by raising prices of legacy services. However this short-term fix of increasing prices is unlikely to be sustainable, as expensive voice and SMS prices induce subscribers to try out free OTT services like Whatsapp and Line, thereby negating the impact of higher prices with further declines of usage. Hence, we expect a declining trend in the top line of Indonesian telcos over the next 2-3 years due to declines in non-data revenues. Rising smartphone penetration will add insult to injury As smartphone penetration approaches the tipping point of 35% in Indonesia (Java 40-50%), usage decline has accelerated sharply, especially for XL and Indosat, which derive 70-90% of their revenues from Java. Per subscriber MOU and SMS of Indosat and XL Axiata has declined by 3% and 7% respectively over the past six quarters. Extensive promotional campaigns outside the Java region (targeting voice and SMS services) and network corporation agreement between Indosat and XL Axiata to share LTE networks outside the Java region indicates a shift in focus by the two telcos to the ex-java region, in a bid to shield themselves from declining non-data revenues. Telkomsel offers some shelter from declining non-data revenues As over 60% of revenues are generated outside the Java region, we believe Telkomsel will be relatively more immune to declining non-data revenues than XL Axiata and Indosat. We estimate that Telkomsel holds a market share of over 60% in the island of Sumatra and Kalimantan where smartphone penetration levels are still low. This translates to improving Page 6

7 Industry Focus Telecom Sector growth in high-margin non-data revenues due to the lack of cannibalisation by OTT services. Telkomsel's non-data revenues have grown at a CAGR of 8% from 2013 to 2015, outpacing the mediocre 3% growth witnessed by XL Axiata over the same period. Telkomsel also has superior network coverage outside of the Java region when compared with its peers and continues to invest in network infrastructure and fibre networks. This will further help Telkomsel to retain its dominant position outside the Java region while providing some respite to declining nondata revenues. Telkomsel's healthy revenue growth Source: Companies, DBS Bank Page 7

8 Industry Focus Telecom Sector Malaysia New entrant and spectrum challenge Re-farming Spectrum In January 2016, the government announced plans to auction new licences by re-farming the 2G spectrums. Accordingly 60MHz of the 900MHz band, and 150MHz of the 1800MHz band will be re-farmed and allocated based on upfront spectrum re-assignment fees for 15 years. Fees for these allocations will be announced in August 2016 and the 900MHz and 1800MHz spectrum bands will be made available by 1 January 2017 and 1 July 2017 respectively. Planned Spectrum Allocations upfront fees, our back of the envelope calculation indicate that the government could net c.rm6bn. Assuming a 5-year payment period, this translates to yearly spectrum fees of 10-12% of operating cash flows of telcos, resulting in lower dividends and our TPs could be revised down by 3-4%. Entry of a fifth player to make matters worse Packet One Networks (P1), a subsidiary of leading fixed line operator Telekom Malaysia (TM), will enter the mobile market in July 2016, causing further disruption to an already rocky telecom market. P1 will be able to cross-sell its mobile services to over 2.3m of TM s fixed line customers by offering discounts for bundling, reaching out to 21% of the market immediately. With the 2G/3G domestic roaming agreement with Celcom, P1 will also have extensive 2G/3G network coverage (covering 95%/85% on 2G/3G) from day one while progressively building out its own LTE network coverage on 850MHz and 2600MHz bands. We believe P1 can also offer very competitive data pricing relative to the incumbents due to TM s superior fixed-line network and any aggressive reductions in data prices by the incumbents will not work as P1 would be able to match the prices easily. Expensive Valuations Malaysian telco stocks still continue to look expensive versus regional peers despite weaker outlook. Malaysian telcos trade at an average forward PER of 20x vs regional peers' 12-17x. Domestic-focused players such as Digi and Maxis trade at 21x 12-month forward PER despite been the most vulnerable to the entry of a fifth telco (Please see PER chart on page 9) Source: DBS Bank Competition will intensify; smaller players to benefit more The planned spectrum allocation favours smaller players like Digi and UMobile and will likely intensify competition, specifically in 4G network deployments (See table for planned allocations). UMobile previously only had spectrum in the 2.1GHz and 2.6GHz bands and Digi had only 4MHz in the coveted 900MHz band. With each losing 10MHz of the 900MHz band, Maxis and Celcom will be required to increase their capex to maintain the same quality of service. If the Malaysian regulator uses Singapore's 900MHz reserve prices as a benchmark for setting Page 8 Page 8

9 Industry Focus Telecom Sector PER is a popular metrics for ASEAN telcos Singapore & Thailand telcos are attractive on this metrics Source: DBS Bank; DBS Vickers; AllianceDBS Dividend yields of ASEAN Telcos Singapore & Thailand are attractive on this metrics Source: DBS Bank, DBS Vickers, AllianceDBS Research Page 9 Page 9

10 Industry Focus Telecom Sector EV/EBITDA of ASEAN Telcos Indonesian & Thai telcos are attractive on this metrics Source: DBS Bank; DBS Vickers; AllianceDBS Source: DBS Bank, DBS Vickers, Alliance DBS Research Page 10 Page 10

11 Industry Focus Telecom Sector Sector Valuations M k t Price Target CA GR Company FYE Cap S$ Price % PE (x) Div idend Yield (%) P/BV EV /EBITDA (US$m) 12-May LCL Upside Rcmd (%) 16F 17F 16F 17F 15A 16F 16F 17F China / Hong Kong SHCOMP Index 2,836 China Mobile Dec 225, % BUY % 3.7% 1.6x 1.5x 3.7x 3.3x China Telecom Dec 6, % BUY % 2.5% 0.8x 0.8x 3.5x 3.4x China Unicom Dec 27, % BUY % 2.3% 0.8x 0.7x 3.1x 2.9x Smartone Telecom Jun 1, % HOLD % 5.3% 3.5x 3.3x 5.1x 4.6x Hutchison Telecom Dec 1, % HOLD % 5.2% 1.2x 1.1x 6.3x 5.7x HKT Trust Dec 11, % HOLD % 5.3% 2.3x 2.3x 9.6x 9.4x Malaysia KLCI Index 1,649 Digi.Com Dec 8, % HOLD % 4.7% 65.9x 65.9x 12.3x 12.1x Maxis Bhd Dec 10, % FULLY VALUED % 4.0% 9.8x 9.0x 11.6x 11.7x Telekom Dec 6, % BUY % 4.5% 3.2x 3.2x 7.1x 6.7x Axiata Group Dec 12, % HOLD % 5.1% 2.1x 2.0x 8.1x 7.3x Singapore STI Index 2,745 M1 Dec 1, % HOLD % 6.8% 5.3x 5.0x 7.3x 7.3x Starhub Dec 4, % FULLY VALUED % 5.9% 30.9x 27.4x 8.2x 8.3x Thailand SET Index 1,399 Advanced Info Service Dec 12, % BUY % 7.3% 9.1x 9.5x 8.6x 7.5x Total Access Comm. Dec 2, % HOLD % 5.7% 2.8x 2.7x 4.1x 3.7x Indonesia JCI Index 4,803 Indosat Dec 2,743 6,700 5,900-12% HOLD nm % 0.0% 2.9x 2.7x 4.4x 3.9x PT Telekom Dec 28,557 3,760 3,800 1% HOLD % 4.1% 5.0x 4.9x 7.6x 7.3x XL Axiata Dec 2,158 3,350 4,970 48% BUY nm % 2.8% 2.0x 1.9x 6.0x 5.7x PT Sarana Menara Dec 3,083 4,010 4,900 22% BUY nm % 1.3% 5.3x 4.4x 12.3x 10.2x Tower Bersama Dec 2,241 6,200 6,400 3% HOLD % 0.7% 6.5x 5.8x 15.2x 13.5x Singapore Telecom 16 & 17 earnings respectively Source: DBS Bank; DBS Vickers; AllianceDBS Page 11 Page 11

12 Industry Focus Telecom Sector COMPANY GUIDES Page 12

13 Thailand Company Guide Advanced Info Service Version 4 Bloomberg: ADVANC TB Reuters: ADVA.BK Refer to important disclosures at the end of this report DBS Group Research. Equity 7 Apr 2016 BUY Last Traded Price: Bt163 (SET : 1,373.59) Price Target : Bt180 (10% upside) (Prev Bt193) Potential Catalyst: Cheaper-than-expected deal with TOT Where we differ: Factoring in the 900MHz licence at Bt75.57bn price Analyst Sachin Mittal sachinmittal@dbs.com Wasu MATTANAPOTCHANART wasum@th.dbsvickers.com Price Relative Bt Relative Index Apr-12 Apr-13 Apr-14 Apr-15 Apr-16 Advanced Info Service (LHS) Relative SET INDEX (RHS) Forecasts and Valuation FY Dec (Bt Btm) 2014A 2015A 2016F 2017F Revenue 149, , , ,105 EBITDA 65,988 71,100 62,903 74,192 Pre-tax Profit 45,910 49,165 43,706 45,706 Net Profit 36,033 39,152 34,108 35,669 Net Pft (Pre Ex.) 36,033 38,924 34,108 35,669 Net Pft Gth (Pre-ex) (%) (1.3) 8.0 (12.4) 4.6 EPS (Bt) EPS Pre Ex. (Bt) EPS Gth Pre Ex (%) (1) 8 (12) 5 Diluted EPS (Bt) Net DPS (Bt) BV Per Share (Bt) 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 (%): 3 (4) Consensus EPS (Bt): Other Broker Recs: B: 22 S: 4 H: 4 Corporate Governance CG Rating Anti-corruption Progress Indicator Level 3:Established (3A: Established by Declaration of Intent) Source of all data: Company, DBS Bank, Bloomberg Finance L.P Swallows Bitter Pill to Treat the Disease An about-face on 900MHz licence ADVANC recently submitted a letter to NBTC on 4 Apr, proposing to buy 900MHz licence outright at Bt75.57bn (JAS s last bid). The about-face sent ADVANC s share price down 6.9% on Tuesday. With the NBTC standing firm on its Bt75.6bn starting price for the re-auction, we believe that ADVANC has decided to buy the expensive licence to turn uncertainties (e.g. auction being delayed for another year in the case of no-show by the existing operators and future price adjustments) into the certainty of having more spectrum in its portfolio. In the meantime, ADVANC requests that there will not be any shutdown of 900MHz network. Raise the licence e price in our model to Bt75.6bn. Previously, we expected ADVANC to win the 900MHz licence in a re-auction at Bt45.75bn. With the new proposal to NBTC, we raise the licence price to Bt75.57bn as we believe that the Prime Minister can use the Section 44 to bypass the re-auction process and offer DTAC, the second-highest bidder, the option to buy the licence at JAS s price. If DTAC turns down the offer, ADVANC will then buy the licence. In our model, the amortisation of the new licence will start in FY17F, but ADVANC will no longer need to roam on DTAC, so our FY16F normalised profit is raised by 3%, but we cut our FY17F earnings by 4% for the Bt2bn increase in amortisation. Valuation: Our DCF-based TP is reduced from Bt193 to Bt180 due to higher licence price, but we maintain the BUY rating as the market price already reflects the news. Dividend payout ratio is cut from 100% to 90% from FY17F onwards to take into account the additional burden of the new licence. Key Risks to Our View: TRUE remains the aggressor in the market in terms of handset subsidy, as it is aiming for 33% market share, up from 22% now. At A Glance Issued Capital (m shrs) 2,973 Mkt. Cap (Btm/US$m) 484,615 / 13,752 Major Shareholders (%) Shin Corporation 40.5 Singtel Strategic Investments Pte Ltd Thai NVDR 5.2 Free Float (%) m Avg. Daily Val (US$m) 76.3 ICB Industry : Telecommunications / Mobile Telecommunications ed: CK / sa: CS Page 13

14 Advanced Info Service CRITICAL DATA POINTS TO WATCH Earnings Drivers: Weak 1H16F before seeing a recovery in 2H16F Although we expect a rather flat service income ex. IC of Bt30.3bn (+0% y-o-y, +1.4% q-o-q), there should be a significant decline in 1Q16E normalised profit (-15% y-o-y, - 22% q-o-q) due to the Bt3.5bn spending on handset giveaways to 2G clients. We expect the free-handset campaign to continue well into 2Q16, leading the company to spend Bt bn during the quarter. Also, the roaming deal with DTAC will kick in on 15 Apr These two factors, together with the seasonally low income in 2Q, should result in lacklustre 2Q16E profit. Handset subsidies should subside in 3Q-4Q16 when revenues are also expected to recover. New deals and subsidy to hurt FY16F; recovery in FY17F For the full-year forecast of FY16F, we assume 0.5% growth for service income (management has a flat guidance) and 39.2% EBITDA margin, down from 45.8% in FY15. EBITDA margin will be dragged by i) ~Bt10bn payment to TOT, and ii) Bt5.5bn handset subsidy. We expect net profit to rise in FY17F (+4.6%) on the back of income recovery (+3%) and absence of extraordinary handset subsidy. Early adopters of 4G packages generate higher ARPU ADVANC launched attractive 3G/4G packages, all of which were limited data plans, on 26 Jan 2016, leading the street to expect lower ARPU for the company in the long run. However, ADVANC has seen a surprising 10-15% increase in overall ARPU of the 200k subscribers who switched from the old packages to the new limited data plans. Sixty percent of the switchers have upgraded to higher-priced packages, and the Bt488 monthly plan with 10GB mobile broadband data quota has been the best seller. Prior to the licence auction in late-2015, the best seller had been the Bt299 plan with 750MB data quota. ADVANC, TOT still hold hands On 26 Jan 2016, ADVANC and TOT officially announced a partnership on TOT s 2.1GHz network (15MHz). The terms have been agreed by both parties, and the contract is being reviewed by the Office of the Attorney General. The deal should help ease concerns of an overcrowded network once ADVANC s 2G migration is complete because ADVANC will have 60MHz of bandwidth, including 15MHz from 900MHz license that JASMBB failed to obtain. We expect ADVANC to pay Bt10bn to TOT per year. Revenue Norm. profit Example of ADVANC s new phone plans Monthly cost (Bt) 3G/4G (GB) Minutes of talk time , ,500 Original timeline for 900MHz re-auction Source: Company, DBS Bank Page 14

15 Advanced Info Service Balance Sheet: Net gearing ratio is expected to go up from 1.1x in FY15 to 2.0x in FY16F. Higher debt loads are for i) Bt38-Bt40bn 3G/4G capex p.a., and ii) instalments of licence fees, assuming Bt46bn for 900MHz at the potential re-auction. Share Price Drivers: Lower-than than-expected expenses to TOT We have assumed that ADVANC will have to pay Bt10bn p.a. to rent TOT s network. However, the expenses will be incurred later than we expected (likely in 2Q16). Key Risks: TRUE remains the aggressor TRUE remains the aggressor in the market in terms of handset subsidy, as it is aiming for 33% market share, up from 22% now. To retain its clients, ADVANC might have to continue giving free handsets to its 2G clients longer than expected. Company Background ADVANC is the largest cellular operator in Thailand with over 40% market share. Leverage & Asset Turnover (x) A 2014A 2015A 2016F 2017F Gross Debt to Equity (LHS) Asset Turnover (RHS) Capital Expenditure Btm 90, , , , , , , , , A 2014A 2015A 2016F 2017F Capital Expenditure (-) 80.0% 70.0% 60.0% 50.0% 40.0% 30.0% 20.0% 10.0% ROE (%) % 2013A 2014A 2015A 2016F 2017F (x) Forward PE Band (x) sd: 22.8x +1sd: 20.5x Avg: 18.2x -1sd: 15.9x -2sd: 13.6x 10.2 Apr-12 Apr-13 Apr-14 Apr-15 (x) PB Band (x) sd: 18.53x +1sd: 16.56x Avg: 14.59x -1sd: 12.61x -2sd: 10.64x 7.2 Apr-12 Apr-13 Apr-14 Apr-15 Source: Company, DBS Bank Page 15

16 Advanced Info Service Income Statement (Btm) FY Dec 2013A 2014A 2015A 2016F 2017F Revenue 142, , , , ,105 Cost of Goods Sold (81,141) (83,548) (84,819) (82,214) (88,983) Gross Profit 61,642 65,781 70,457 73,276 72,122 Other Opng (Exp)/Inc (15,040) (19,044) (20,301) (26,511) (21,749) Operating Profit 46,602 46,737 50,157 46,765 50,373 Other Non Opg (Exp)/Inc Associates & JV Inc Net Interest (Exp)/Inc (454) (1,157) (1,668) (3,507) (5,022) Exceptional Gain/(Loss) (233) Pre-tax Profit 46,238 45,910 49,165 43,706 45,706 Tax (10,008) (10,080) (9,999) (9,596) (10,035) Minority Interest (2.4) (2.1) (2.2) Preference Dividend Net Profit 36,274 36,033 39,152 34,108 35,669 Net Profit before Except. 36,507 36,033 38,924 34,108 35,669 EBITDA 63,466 65,988 71,100 62,903 74,192 Growth Revenue Gth (%) EBITDA Gth (%) (11.5) 17.9 Opg Profit Gth (%) (6.8) 7.7 Net Profit Gth (Pre-ex) (%) 5.0 (1.3) 8.0 (12.4) 4.6 Margins & Ratio Gross Margins (%) Opg Profit Margin (%) Net Profit Margin (%) ROAE (%) ROA (%) ROCE (%) Div Payout Ratio (%) Net Interest Cover (x) Source: Company, DBS Bank Page 16

17 Advanced Info Service Quarterly / Interim Income Statement (Btm) FY Dec 4Q2014 1Q2015 2Q Q2015 4Q2015 Revenue 40,444 40,579 38,135 36,778 39,784 Cost of Goods Sold (22,816) (23,439) (20,569) (20,399) (20,412) Gross Profit 17,628 17,140 17,566 16,379 19,372 Other Oper. (Exp)/Inc (5,068) (4,716) (4,933) (4,935) (5,717) Operating Profit 12,560 12,424 12,633 11,445 13,656 Other Non Opg (Exp)/Inc Associates & JV Inc Net Interest (Exp)/Inc (457) (332) (366) (416) (555) Exceptional Gain/(Loss) (26.0) (132) 196 Pre-tax Profit 12,211 12,296 12,352 11,112 13,404 Tax (3,100) (2,400) (2,507) (2,495) (2,598) Minority Interest 11.0 (0.2) (3.1) 1.42 (0.5) Net Profit 9,122 9,897 9,849 8,616 10,791 Net profit bef Except. 9,148 9,760 9,821 8,748 10,595 EBITDA 17,734 17,947 18,190 17,611 17,351 Growth Revenue Gth (%) (6.0) (3.6) 8.2 EBITDA Gth (%) (3.2) (1.5) Opg Profit Gth (%) 9.8 (1.1) 1.7 (9.4) 19.3 Net Profit Gth (Pre-ex) (%) (10.9) 21.1 Margins Gross Margins (%) Opg Profit Margins (%) Net Profit Margins (%) Balance Sheet (Btm) FY Dec 2013A 2014A 2015A 2016F 2017F Net Fixed Assets 56,422 69,441 84, , ,684 Invts in Associates & JVs Other LT Assets 20,639 17,783 59, , ,803 Cash & ST Invts 16,831 19,510 14,617 13,877 6,843 Inventory 2,865 2,520 5,059 3,120 3,089 Debtors 10,264 10,415 16,389 11,178 11,066 Other Current Assets 5,005 6,682 1,942 5,450 5,395 Total Assets 112, , , , ,880 ST Debt 9,303 2,572 12, Creditor 11,718 11,903 27,751 11,223 11,448 Other Current Liab 24,470 28,431 16,927 17,772 18,661 LT Debt 15,355 34,478 52,577 97, ,000 Other LT Liabilities 5,287 2,101 23,158 98,928 80,952 Shareholder s Equity 45,748 46,750 48,376 46,135 48,699 Minority Interests Total Cap. & Liab. 112, , , , ,880 Non-Cash Wkg. Capital (18,054) (20,718) (21,288) (9,248) (10,558) Net Cash/(Debt) (7,827) (17,540) (50,815) (83,123) (113,157) 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 (%) Z-Score (X) Source: Company, DBS Bank Page 17

18 Advanced Info Service Cash Flow Statement (Btm) FY Dec 2013A 2014A 2015A 2016F 2017F Pre-Tax Profit 46,238 45,910 49,165 43,706 45,706 Dep. & Amort. 16,541 18,922 20,495 15,690 23,464 Tax Paid (10,008) (10,080) 0.0 (9,596) (10,035) Assoc. & JV Inc/(loss) Chg in Wkg.Cap. 651 (233) (778) (12,163) 1,181 Other Operating CF (21.2) 536 (7,252) 3,745 5,272 Net Operating CF 53,401 55,054 61,629 41,382 65,588 Capital Exp.(net) (31,690) (30,964) (76,369) (34,991) (58,166) Other Invts.(net) (499) 302 (3.1) Invts in Assoc. & JV Div from Assoc & JV Other Investing CF 504 2,165 22,801 1, Net Investing CF (31,174) (28,731) (54,067) (33,529) (57,495) Div Paid (33,889) (35,052) (37,760) (36,349) (33,105) Chg in Gross Debt 4,308 12,392 27,214 31,568 23,000 Capital Issues Other Financing CF (2,264) (2,526) (1,410) (3,507) (5,022) Net Financing CF (31,845) (25,186) (11,955) (8,288) (15,127) Currency Adjustments Chg in Cash (9,617) 1,136 (4,393) (435) (7,034) Opg CFPS (Bt) Free CFPS (Bt) (5.0) Source: Company, DBS Bank Target Price & Ratings History B t S.No. Dat e Closing Pric e T arget Pric e Rat ing 1: 07 Apr HOLD 2: 11 May HOLD 3: 10 Aug HOLD 4: 27 Aug HOLD 5: 07 Sep HOLD : 21 Oct HOLD : 06 Nov HOLD 8: 11 Nov HOLD : 13 Nov HOLD 15 10: 21 Dec FULLY VALUED : 22 Dec FULLY VALUED 12: 06 Jan HOLD : 27 Jan HOLD Apr-15 Aug-15 Dec-15 14: 01 Feb BUY Note : Share price and Target price are adjusted for corporate actions. 15: 05 Feb BUY 16: 14 Mar BUY 17: 22 Mar BUY 18: 01 Apr BUY Source: DBS Bank Score Range Number of Logo Description Excellent Very Good Good Satisfactory Pass <50 No logo given N/A Page 18

19 Thailand Company Guide Jasmine Broadband Internet Infrastructure Fund Version 1 Bloomberg: JASIF TB Reuters: JASIFu.BK DBS Group Research. Equity 28 Mar 2016 Refer to important disclosures at the end of this report BUY Last Traded Price: Bt8.25 (SET : 1,405.41) Price Target : Bt11.00 (33% upside) Potential Catalyst: Strong quarterly results and dividends Where we differ: - Analyst Wasu MATTANAPOTCHANART wasum@th.dbsvickers.com Price Relative Bt 7.2 Feb-15 Jul-15 Dec-15 Jasmine Broadband Internet Infrastructure Fund (LHS) Relative SET INDEX (RHS) Relative Index Forecasts and Valuation FY Dec (Bt Btm) 2015A 2016F 2017F 2018F Revenue 4,377 5,457 5,829 5,940 EBITDA 4,126 5,004 5,346 5,447 Pre-tax Profit 4,729 5,016 5,370 5,471 Net Profit 4,729 5,016 5,370 5,471 Net Pft (Pre Ex.) 2,372 2,934 3,406 3,539 Net Pft Gth (Pre-ex) (%) nm EPS (Bt) EPS Pre Ex. (Bt) EPS Gth Pre Ex (%) nm Diluted EPS (Bt) Net DPS (Bt) BV Per Share (Bt) PE (X) PE Pre Ex. (X) P/Cash Flow (X) EV/EBITDA (X) Net Div Yield (%) P/Book Value (X) Net Debt/Equity (X) 0.0 CASH CASH CASH ROAE (%) N/A Earnings Rev (%): Consensus EPS (Bt): N/A N/A N/A Other Broker Recs: B: 4 S: 0 H: 1 Source of all data: Company, DBS Vickers, Bloomberg Finance L.P Still offering decent yields FOC lessor that offers lofty yield. Jasmine Broadband Infrastructure Fund was founded on 10 Feb The fund bought 800k core km of fibre optic cable (FOC) network at IPO. As part of the IPO deal, it has been procuring around 7.5k core km more each month. JAS s subsidiary, Triple Three Broadband (TTB), has agreed to lease 100% of the network until 22 Feb Due to the gradual FOC transfer into the fund, it is expected to have 23% earnings growth in FY16F (10.7% yield) and 7% earnings growth in FY17F (11.2% yield). Too much concern on impact of JAS s 4G default. The market has been overly concerned over two issues and its implications for JASIF: i) additional penalty on Jas Mobile Broadband (JASMBB), after its failure to pay for the 900MHz licence, and ii) the potential revocation of JAS s existing licences (i.e. TTB s fixed-broadband licence). We believe that the penalty not yet finalised by the NBTC will only affect JASMBB and JAS, the mother company. Also, TTB is a separate legal entity that has done nothing wrong, so the outright revocation of the fixed-broadband licence (expiring in 2026) is highly unlikely, especially when the revocation has not been stated in the pre-auction documents. Valuation: We have a DCF-based TP of Bt11.00 (WACC: 9.7%, no more rent from 2043 onwards). With 33% upside to our TP and an 11.6% yield, we recommend a BUY on JASIF. Although we believe that JASIF should trade at 20-25% discount to DIF due to shorter useful life of FOC compared to towers and JASIF s rental rate uncertainty after Feb 2026, JASIF seems to be oversold as evidenced in its FY16F EV/EBITDA of 8.7x, 38% lower than DIF s 15.1x. Key Risks to Our View: Lingering issues around JASMBB s debacle could weigh on JASIF s share price performance in the next 1-2 months. Nevertheless, NBTC plans to decide the fate of the fixedbroadband licence at TTB by the end of Apr At A Glance Issued Capital (m shrs) 5,500 Mkt. Cap (Btm/US$m) 45,375 / 1,284 Major Shareholders (%) JAS BBL 9.09 State Street Bank And Trust Company 7.93 Free Float (%) 3m Avg. Daily Val (US$m) 45.9 ICB Industry : Technology / Software & Computer Services ed: CK / sa: CS Page 19

20 Jasmine Broadband Internet Infrastructure Fund CRITICAL DATA POINTS TO WATCH Earnings Drivers: Listed in Feb JASIF raised Bt55bn from its IPO on 16 Feb 2015 to invest in 980k core km of fibre optic cable (FOC) network; 800k core km FOC obtained at IPO and the rest 180k during next two years until Feb Triple Three Broadband (TTB) has contractually agreed to lease 100% of JASIF s capacity until 22 Feb 2026, which coincides with the expiration of TTB s fixed-broadband licence. We expect TTB to renew its licence and continue renting the network until FOC usually has a useful life of 30 years, which implies 26 years of remaining useful life for JASIF s network; as a result, we expect no rent from 2043 onwards. Fibre optic cable Net investment income and dividend yield New fibre injection to support FY16/17F growth. We expect TTB to continue transferring 7,500 core km of FOC per month to JASIF, which should end FY16F with 973k core km of cable, up from 883k at end-2015 and 800k at IPO. The new fibre capacity will be coming in until Feb 2017, leading us to project 23% and 7% earnings growth in FY16F and FY17F, respectively. Growth after FY17F depends on increase in rental rate. With no new asset injection, we expect net investment income to grow only 1.9% in FY18F and 1.5% p.a. from FY19F onwards. Although we assume the rental increase of only 1.5% per year, the increase in rental rate is, in fact, contractually tied to Thailand s change in CPI with the floor/ceiling of 0/3%. Nevertheless, the fund is open to new investments in any kind of telecommunications infrastructure, so new assets with strong yield and IRR could be a positive surprise. Too much concern on JAS s default on 900MHz licence. The market has been overly concerned over two issues and its implications for JASIF: i) additional penalty for Jas Mobile Broadband (JASMBB), after its failure to pay for the 900MHz licence, and ii) the potential revocation of JAS s existing licences (i.e. TTB s fixed-broadband licence). We believe that the penalty not yet finalised by the NBTC will only affect JASMBB and JAS, the mother company. Also, TTB is a separate legal entity that has done nothing wrong, so the outright revocation of the fixed-broadband licence (expiring in 2026) is highly unlikely, especially when the revocation has not been stated in the preauction documents. The worst-case scenario: no licence renewal for TTB. The highly unlikely worst-case scenario is NBTC s refusal to renew TTB s fixed-broadband licence after its expiry in Feb In that case, we expect no more lease income from 2027 onwards, and the TP would be Bt8.10, implying only 2% downside from the current market price vs 33% upside to the base-case TP of Bt The worst-case IRR for JASIF is 6.9% vs 12.4% basecase IRR. Special dividends from advance rental To be paid in year Btm Resulting dividend payout ratio (%) Resulting yield (%) Scenario analysis Base case Best case Worst case OR, % 100% 100% OR, OR, 2043 onward Rental rate inc p.a., Rental rate inc p.a., Rental rate inc., 2043 onward declining to 80% by % 0% [NO MORE RENT BY TTB] 1.5% 1.50% 1.50% 0.6% 1.50% NO RENT [NO MORE RENT BY TTB] Target price Major shareholders Source: Company, DBS Vickers Page 20

21 Jasmine Broadband Internet Infrastructure Fund Balance Sheet: The 980k-core-km FOC (Bt55bn) was already paid for at IPO. We currently project no new investment going forward, and the company is expected to be debt-free, starting from 1Q16E. Share Price Drivers: Thanks to the monthly fibre transfers, we expect its net investment income and dividend to be stronger every quarter this year Leverage & Asset Turnover (x) 2016F 2017F 2018F Key Risks: Lingering issues around JASMBB s debacle could weigh on JASIF s share price performance. Nevertheless, NBTC plans to decide the fate of the related businesses, including Digital TV licence at MONO and fixed-broadband licence at TTB, by the end of Apr When the implication of TTB becomes clear, the overhang on JASIF share price should be removed. Btm 60, , , , , ,000.0 Gross Debt to Equity (LHS) Asset Turnover (RHS) Capital Expenditure Lower rental rate is a long-term risk When JASIF renews its lease contract with TTB, we expect the rental rate to drop by 12% in 2027 as part of the asset portfolio (20% of the FOC network) has a lofty monthly rental rate of Bt750 per core km in 2016 (inflation-adjusted annually); we believe the high rate could not be maintained when the contract expires in If the rate drops more than the expected 12%, our valuation could be negatively impacted. Company Background Jasmine Broadband Internet Infrastructure Fund (JASIF) was established on 10 Feb 2015 as a closed-end infrastructure fund. JASIF raised Bt55bn from its IPO on 16 Feb 2015 to invest in 980k core km of fibre optic cable (FOC) network; 800k core km FOC obtained at IPO and the rest 180k during next two years until Feb % 8.0% 7.0% 6.0% 5.0% 4.0% 3.0% 2.0% 1.0% 0.0% (x) A 2016F 2017F 2018F Capital Expenditure (-) ROE (%) 2016F 2017F 2018F Forward PE Band (x) +2sd: 13.4x +1sd: 12.3x Avg: 11.2x -1sd: 10.2x -2sd: 9.1x 7.8 Feb-15 Jul-15 Dec-15 (x) 1.0 PB Band (x) sd: 0.89x +1sd: 0.86x Avg: 0.84x -1sd: 0.81x -2sd: 0.78x 0.7 Dec-15 Source: Company, DBS Vickers Page 21

22 Jasmine Broadband Internet Infrastructure Fund Key Assumptions FY Dec 2015A 2016F 2017F 2018F FOC at year end (core km) 883, , , ,500 Increase in rental rate 0% 1.5% 1.5% 1.5% Average rental rate (Btm/month) Occupancy rate 100% 100% 100% 100% Income Statement (Btm) FY Dec 2015A 2016F 2017F 2018F Revenue 4,377 5,457 5,829 5,940 Cost of Goods Sold (184) (355) (379) (386) Gross Profit 4,193 5,102 5,451 5,554 Other Opng (Exp)/Inc (67.4) (98.2) (105) (107) Operating Profit 4,126 5,004 5,346 5,447 Other Non Opg (Exp)/Inc Associates & JV Inc Net Interest (Exp)/Inc (37.8) Exceptional Gain/(Loss) Pre-tax Profit 4,729 5,016 5,370 5,471 Tax Minority Interest Preference Dividend Net Profit 4,729 5,016 5,370 5,471 Net Profit before Except. 2,372 2,934 3,406 3,539 EBITDA 4,126 5,004 5,346 5,447 Growth Revenue Gth (%) N/A EBITDA Gth (%) nm Opg Profit Gth (%) nm Net Profit Gth (Pre-ex) (%) nm Margins & Ratio Gross Margins (%) Opg Profit Margin (%) Net Profit Margin (%) ROAE (%) N/A ROA (%) N/A ROCE (%) N/A Div Payout Ratio (%) Net Interest Cover (x) NM NM NM Source: Company, DBS Vickers Page 22

23 Jasmine Broadband Internet Infrastructure Fund Quarterly / Interim Income Statement (Btm) FY Dec 1Q2015 2Q Q2015 4Q2015 Revenue Cost of Goods Sold Gross Profit Other Oper. (Exp)/Inc (28.4) (50.3) (53.1) (52.3) Operating Profit (22.7) (41.7) (44.4) (44.7) Other Non Opg (Exp)/Inc 0.34 (0.2) (0.2) 641 Associates & JV Inc Net Interest (Exp)/Inc 605 1,130 1,160 1,192 Exceptional Gain/(Loss) 0.38 (0.2) (0.2) 641 Pre-tax Profit 583 1,088 1,115 2,430 Tax Minority Interest Net Profit 583 1,088 1,115 2,430 Net profit bef Except ,088 1,115 2,430 EBITDA (22.3) (41.9) (44.6) 596 Growth Revenue Gth (%) N/A (12.4) EBITDA Gth (%) nm (87.6) (6.4) nm Opg Profit Gth (%) nm (84.0) (6.5) (0.5) Net Profit Gth (Pre-ex) (%) nm nm nm nm Margins Gross Margins (%) Opg Profit Margins (%) (396.1) (485.4) (511.5) (587.4) Net Profit Margins (%) 10, , , ,966.8 Balance Sheet (Btm) FY Dec 2015A 2016F 2017F 2018F Net Fixed Assets 55,641 55,641 55,641 55,641 Invts in Associates & JVs Other LT Assets Cash & ST Invts 2,120 1,599 1,543 1,539 Inventory Debtors Other Current Assets 3, Total Assets 61,616 57,245 57,190 57,186 ST Debt 3, Creditor Other Current Liab LT Debt Other LT Liabilities Shareholder s Equity 56,869 56,283 56,218 56,211 Minority Interests Total Cap. & Liab. 61,616 57,245 57,190 57,185 Non-Cash Wkg. Capital 2,958 (956) (966) (969) Net Cash/(Debt) (1,730) 1,599 1,543 1,539 Debtors Turn (avg days) N/A Creditors Turn (avg days) N/A Inventory Turn (avg days) N/A N/A N/A N/A Asset Turnover (x) NM Current Ratio (x) Quick Ratio (x) Net Debt/Equity (X) 0.0 CASH CASH CASH Net Debt/Equity ex MI (X) 0.0 CASH CASH CASH Capex to Debt (%) 1,428.6 N/A N/A N/A Z-Score (X) NA NA NA NA Source: Company, DBS Vickers Page 23