REIT Sector. Report type: Update. Phillip Securities Research Pte Ltd. 12 June 2012

Transcription

1 Phillip Securities Research Pte Ltd Report type: Update Sector Overview The Real Estate Investment Trust (REIT) Sector in our Singapore coverage consists of 23 REITs listed on Singapore exchange with a market capitalization of USD3 billion. Decent earnings and stable DPU across S-REITs Healthy gearing arising from proactive portfolio and capital management Compelling dividend yield and positive on CDL HT for its favorable outlook Earnings Surprise? Despite mediocre 1Q12 corporate earnings, S-REITs have managed to report decent earnings across various property industries. Among the 23 S-REITs, Fraser Centrepoint Trust (FCT) stood out from its peers in the reporting quarter. The DPU of 2.5 cents was a new all-time high for FCT, with an increase of 2.8% from a year before. The strong y-o-y DPU growth was primarily attributable to the asset enhancement of Causeway Point and the acquisition of Bedok Point. The huge DPU gains in First REIT and K-REIT Asia are not taken into consideration due to the rights issuance that has distorted their performance. Under our coverage, DPU for CDL HT, PLife REIT and Sabana REIT were largely within with our estimates, forming 24%, 26% and 24% of our full year forecasts. 12 June 212 REIT Sector Company Rating Price TP Upside M.Cap. (S$) (S$) (%) (US$'mn) REIT CDLH Trust Accumulate % 1,366 Parkw ay Life REIT Accumulate % 851 Sabana REIT Buy % Jun-11 Source: Bloomberg Sep-11 Analyst Travis Seah travisseahhk@phillip.com.sg Dec-11 Mar-12 Jun-12 Volume, mn FSTREI INDEX STI rebased Capital management outlook Proactive portfolio and capital management have kept the REITs gearing on check No sign of red flag in credit tightening as liquidity is still ample Refinancing risks are kept at bay as REIT managers have been proactive to refinance their loan prior to maturity Recommendation P/B ratio has bounded off the mean level (.84) and now trading at.92 times the historical book. Whether the P/B ratio can continue to march forward +1 SD, it would largely hinge on to the market developments in the western countries. Investors may consider REITs PLife REIT, First REIT and Ascendas REIT with part of their lease structures pegged to the CPI. Risk-takers may go for higher-yielding industrial REITs such as Sabana REIT, AIMS AMP CAP Industrial REIT and Cambridge Industrial Trust with consensus FY1 yield (Fiscal year 212) at 1.6%, 9.9% and 9.1% respectively. CDL HT is also good candidate for investors who are gunning for passive income in Singapore hospitality play. MICA (P) 12/1/212 Ref. No.: SG212_149 1 of 11

2 12 June 212 Results summary Despite mediocre 1Q12 corporate earnings, S-REITs have managed to report decent and stable earnings across various property industries. Among the 23 S-REITs, Fraser Centrepoint Trust (FCT) stood out from its peers in the reporting quarter. The DPU of 2.5 cents was a new all-time high for FCT, with an increase of 2.8% from a year before. The strong y-o-y DPU growth was primarily attributable to the asset enhancement of Causeway Point and the acquisition of Bedok Point. The huge DPU gains in First REIT and K-REIT Asia are not taken into consideration due to the rights issuance that has distorted their performance. None of the REITs saw a drop in 1Q12 DPU compared to the corresponding period in previous year. The y-o-y DPUs for Starhill Global REIT, Ascott REIT and AIMS AMP CAP Industrial REIT were however unchanged. Flat rental growth could be due to a number of reasons: (1) the divestment of assets, (2) negative rental reversion from office market and (3) temporary leakage of rents arising from ongoing asset enhancement works, which offset the annual built-in rental growth and acquisitions made within the past one year. Lippo Malls is excluded from the assessment as the depreciation in DPU was largely affected by the fund raising in 4Q11. Fig 1: Earnings growth trends (YoY % and QoQ %) REIT Revenue Revenue NPI NPI DPU DPU YoY % QoQ% YoY % QoQ% YoY % QoQ% Industrial AIMS AMP CAPITAL ASCENDAS REAL ES CACHE LOGISTICS CAMBRIDGE REIT MAPLETREE INDUST MAPLETREE LOG TR SABANA SHARIAH N.A. 8.8 N.A. 8.8 N.A. 4.1 Residential SAIZEN REIT N.A. N.A. Hospitality ASCOTT RESIDENCE CDL REIT Healthcare FIRST REIT PARKWAYLIFE REIT Office CAPITACOMMERCIAL FRASERS COMMERCI K-REIT ASIA Retail CAPITAMALL TRUST CAPITARETAIL FORTUNE REIT FRASERS CENTREPO LIPPO MALLS Mixed Commercial MAPLETREE COMMER N.A..4 N.A. 5.9 N.A. 8.8 STARHILL GLOBAL SUNTEC REIT Source: Trusts, PSR Under our coverage, DPU for CDL HT, PLife REIT and Sabana REIT were largely within with our estimates, forming 24%, 26% and 24% of our full year forecasts. Industrial REIT Acquisitions in the past one year and positive rental reversion continued to underpin the DPU growth across the industrial REITs. Reshaping of portfolio (acquisitions and divestments) and introduction of reinvestment distribution scheme are the two main initiatives taken place among the industrial plays. Cambridge Industrial Trust (CIT) and AIMS AMP CAP Industrial REIT (AIMS) have made available distribution reinvestment plan for its shareholders, another alternative to cash dividend. On one hand, this allows the shareholders to reinvest their dividend return at a discount without any transaction costs incurred. On the other hand, the REITs can utilize the retained income as working capital and allocate for capital expenditure. CIT, AIMS and Ascendas REIT (A-REIT) have since divested some of their properties to recycle their capital to acquire better quality buildings and/or use part of their net sales proceeds to defray some of the loans and/or to use as capital distributions to support income shortfalls arising from asset enhancement program. AIMS had completed the sale of 31 Admiralty Road. The net sales proceeds will be used to repay the trust s revolving credit facility. CIT had launched a tender of Lam Soon Industrial Building situated at 63 Hillview Avenue for an indicative price of $33 million. The tender will close on 28 June 212. Ascendas also recently announced the sale of 6 Pioneer walk for $32 million. Mapletree Logistics Trust (MLT) is on shopping spree. It has been very aggressive by acquiring 11 properties in Japan (JPY 17.5bn), South Korea (KRW 63.5bn) and Malaysia (MYR 31.5bn). The deals have been concluded in March, April and May respectively. Mapletree Industrial Trust (MINT) achieved 15.4% and 28.9% upward rental revision for 1Q12. Besides organic growth, the trust is to develop a build-to-suit (BTS) facility a five-storey high specification light industrial building for Kulicke & Soffa along Serangoon North Ave 5. Total development cost is estimated to be S$5 million. Cache did a private placement and raised S$57mn in equity proceeds to be deployed for the purchase of Pan Asia Logistics HQ at 21 Changi North Way as well as to pare down the debt. In May, the trust also bought Pandan Logistics Hub for S$66mn. MINT management guided the rents for industrial space to remain flattish in the near term, and rents for business parks space to ease before stabilizing barring any shocks to the economy. This is much in-line with our outlook on the 2 of 11

3 12 June 212 industrial rents. Any correction in rents will be capped at 3-5% for conventional industrial space. Hospitality REIT The market turbulence has not diminished the growth in Singapore tourism and hospitality markets. Singapore received a total of 3.5 million visitors for the first three months, up 14.6% compared to the same period last year. The robust growth will benefit CDL HT given the bulk of the gross revenue coming from Singapore s hotel portfolio. CDL HT registered the highest 1Q RevPAR of S$213 for its Singapore s hotel portfolio in 1Q12 since the inception. We believe the already high RevPAR will continue to gain traction for the subsequent quarters, with tourism hot spots such as Garden by the Bay (Phase 1), the River Safari, and the Marine Park at Resorts World Sentosa opening in the rest of 212. These new attractions are expected to draw more visitor arrivals barring any negative major events. Ascott REIT s RevPAR rose 3% to $137 driven by strong performance from The Philippines, China and United Kingdom. Ascott management indicated that the macroeconomic outlook for 212 will continue to remain volatile. However, the trust s geographically diversified portfolio with exposure to different economic cycles provides income stability. Extended-stay business model, master leases and service residence contracts with minimum guaranteed income will also mitigate the income volatility. Healthcare REIT REITs in Healthcare sector are rather muted as there are fewer activities. Parkway Life REIT s DPU was up by 3.3% q-o-q owing to the one-off adjustment of $.59mn by IRAS for the assessment year 28 to 21 and interest cost savings. Commercial FCOT continued to outperform amongst the office play, posting 8.1% q-o-q and 15.2% y-o-y DPU growth. Higher contribution from Central Park and share of profits from master lessee of China Square Central are two factors backing the increase in DPU. In April, FCOT divested KeyPoint for a sale consideration of S$36.mn and realized a gain of S$72.8mn after completion. The net proceeds from the sale could be used to reduce the outstanding loan. In the retail scene, FCT surpassed its peers in the reporting quarter. The sterling performance has been discussed above under the results summary. CapitaMall Trust (CMT) has entered into a sale agreement with Oxley Bloom Pte Ltd to sell Hougang Plaza for a total consideration of approximately S$119.1 million. Apart from above, CapitaCommercial Trust was granted the approval of share buyback to repurchase the issued units. This will support the share price and improve return on equity and book value per share. Capital Management Fig 2: Debt information REIT Gearing Avg. Cost of Debt Interest Coverage Avg. Debt to Maturity (%) (%) (X) (yrs) Industrial CY Mar-11 CY Mar-11 CY Mar-11 CY Mar-11 AIMS AMP CAPITAL 3.% 2.34% ASCENDAS REAL ES 36.6% 2.83% CACHE LOGISTICS 27.7% 3.94% 8. - CAMBRIDGE REIT 35.9% 4.2% MAPLETREE INDUST 37.8% 2.3% MAPLETREE LOG TR 35.2% 2.4% SABANA SHARIAH 33.9% 4.4% Residential SAIZEN REIT 32.% Hospitality ASCOTT RESIDENCE 41.6% 3.4% CDL REIT 25.6% Healthcare FIRST REIT 14.9% PARKWAYLIFE REIT 35.3% 1.61% Office CAPITACOMMERCIAL 3.5% 3.1% FRASERS COMMERCI 36.1% 3.9% K-REIT ASIA 41.8% 2.3% Retail CAPITAMALL TRUST 38.3% 3.3% CAPITARETAIL 3.% 2.63% FORTUNE REIT FRASERS CENTREPO 3.9% 3.4% LIPPO MALLS 9.2% Mixed Commercial MAPLETREE COMMER 37.6% 1.96% STARHILL GLOBAL 3.4% 3.26% SUNTEC REIT 37.4% 2.78% Source: Trusts, PSR Fig 3: Singapore swap offer rates /1/27 5/1/27 9/1/27 1/1/28 5/1/28 9/1/28 1/1/29 5/1/29 9/1/29 1/1/21 3M SOR (%) 1Y SOR (%) 2Y SOR (%) 5Y SOR (%) Proactive portfolio and capital management have kept the REITs gearing on check. To take advantage of low interest rate environment, MLT has issued perpetual securities to 5/1/21 9/1/21 1/1/211 5/1/211 9/1/211 1/1/212 5/1/212 3 of 11

4 12 June 212 raise equity from the capital market. It is used to fund acquisitions and simultaneously bring down the gearing ratio. As a result, MLT will have more capacity to shore up capital through credit facilities and place them in a better position for future acquisitions. As mentioned earlier, some REITs have been actively restructuring their portfolio by unlocking the values of the properties that have reached the optimal stage. Properties like Hougang Plaza and Key Point sold by CMT and FCOT respectively are way above their property valuation. The sales proceeds will help to cut down their gearing and amplify the debtroom for inorganic growth. At this juncture, there is no sign of red flag in credit tightening as liquidity is still ample arising from healthy loanto-deposit ratio for loan denominated in Singapore dollars. Borrowing rate for REITs is likely to remain low for the next two years as Federal Reserve pledged to keep interest rates near zero percent till late 214. Refinancing risks are kept at bay as REIT managers have been proactive to refinance their loan prior to maturity and diversify their source of debts. Financial position of REITs is in the pink, with comfortable gearing and longer weighted average debt to maturity. First REIT secured a 4-year S$168 million transferable term loan facility. Approximately S$5 million will be used to refinance the outstanding loans and remaining S$118 million to be used to finance any future acquisitions MLT issued S$35 million of perpetual securities for general corporate funding purposes, including the funding acquisitions CMT refinanced S$783. million CMBS:US$ % p.a. fixed rate notes (swapped to S$55.2 million at fixed rate of 3.29% p.a.) in March 212 A-REIT carried out a private placement of 15,, new units to raise gross proceeds of between c.s$298.5 million and c.s$36. million and separately issued 1. billion 2.55% per annum notes Valuation and conclusion The fears of Greek exit from Eurozone have stoked volatility in the market and sent the STI down again in May. It is not surprising to see S-REITs (+ 11.%) outperformed the broad market (+ 5.3%) from January to now. In May, S-REIT fell 2.5%, compared to sharper fall of 7.8% in STI. The weak corporate earnings especially in commodity sector also exacerbated the plunge in STI. This evidenced the resilience of S-REIT s price movement during a correction. Suntec REIT and KREIT hanged on to their top five positions. CDL HT has made its way up and clinched the fifth place. These five REITs are quite distinctive stemming from various industries, besides Suntec REIT and KREIT as they have greater exposure in Singapore Grade A office segment. Fig 4: YTD return for S-REITs FCOT AIMS Suntec KREIT CDL HT Fortune First MLT CCT Cambridge FCT FSTREI MCT CRCT Lippo Malls Ascendas Starhill Cache MINT Sabana Ascott Capitamall PLife Saizen P/B ratio has bounded off the mean level (.84) and now trading at.92 times the historical book. Whether the P/B ratio can continue to march forward +1 SD, it would largely hinge on to the market developments in the western countries. 1 out of the 23 REITs traded above their book value per share, with Plife REIT (+21.1%) and Saizen REIT (-56.8%) on the two extremes. Fig 5: FSREI Price-to-book ratio /17/7 3/17/8 6/17/8 9/17/8 12/17/8 3/17/9 6/17/9 P/B Mean +1 STD -1 STD 9/17/9 12/17/9 Fig 6: NAV Premium/Discount NAV Premium/Discount (%) /17/1 PLife FCT MINT CDL HT Capitamall MLT First Ascendas MCT Cache CRCT Sabana Cambridge AIMS Ascott KREIT CCT Starhill Lippo Malls FCOT Suntec Fortune Saizen 6/17/1 9/17/1 12/17/1 3/17/11 6/17/11 9/17/11 12/17/11 3/17/ Year to date, AIMS (+ 2.6%) has lost its pole position to FCOT (+ 26.4%) in terms of price return, taking reference from our last report updated on 12 March 212. AIMS, 4 of 11

5 12 June 212 Recommendation Market volatility has become a norm and it is getting harder to time the market. Rather than sitting on the bench and having your savings eroded by inflation, REITs have what it takes to provide you the value protection barring any major exogenous shocks. Defensive play would be better option taking into condition of the current erratic climate. Above all, the compelling yield will support the price and smoothen the overall individual s portfolio returns. S-REITs fundamentals are largely intact with stable and visible distributions arising from lease agreements except for hospitality play with shorter turnover rate (Average length of stay is about 3-4 days). Security deposits will serve another layer of safety net in the event of default payment though we do not see this happening. There are some silver linings behind the dark cloud. The rerating catalyst may come from hospitality sector given the strong visitor arrivals achieved in the first three months. There is still room for RevPAR to inch up backed with higher occupancy and room rates. Although the office rents are expected to ease further at moderate pace, we don t see it to fall below the trough level in 29. At this juncture, the office market rents are above the rents signed two and three years ago. Thus, we are expecting modest positive rental reversion from 3Q12 onwards. Fig 8: Consensus yield estimates for FY Consensus FY1 Yield (%) Sabana AIMS Cambridge Lippo Malls Cache First Ascott Saizen MINT CRCT KREIT MLT Suntec Ascendas FCOT Fortune Starhill MCT CDL HT CCT FCT Capitamall PLife Fig 9: Spread between forward S-REIT dividend yield and 1yr bond yield /17/27 3/17/28 6/17/28 9/17/28 12/17/28 3/17/29 6/17/29 9/17/29 12/17/29 3/17/21 6/17/21 Forward dividend yield (%) 1yr SG Gov. Bond Yield (%) Spread (%) 9/17/21 12/17/21 3/17/211 6/17/211 9/17/211 12/17/211 3/17/212 Our recommendation is broadly unchanged as the market condition remained unstable compared to a quarter ago. Investors may consider REITs PLife REIT, First REIT and Ascendas REIT with part of their lease structures pegged to the CPI which will gain from the high inflation. Risk-takers may go for higher-yielding industrial REITs such as Sabana REIT, AIMS and Cambridge Industrial Trust with consensus FY1 yield (Fiscal year 212) at 1.6%, 9.9% and 9.1% respectively. CDL HT is also good candidate for investors who are gunning for passive income in Singapore hospitality play. Fig 7: Yield Comparison Yield (%) 1.4 SREIT CPI (YoY) STI CPF rate 1Yr SG Govt Bond.3 Fixed Deposit (12m) 5 of 11

6 12 June 212 Fig 1: SREIT valuation and dividend information REIT Last Free Dividend Latest reported T12M Div. Consen. FY1 Consen. FY2 FY1 FY2 Market price as of: Rating Crncy Price TP Upside Mkt Cap. Float Crncy Bvps P/B Frequency Crncy DPU Yield DPU DPU Yield Yield Gearing 11-Jun-12 (%) (US$mn) (%) (Cents) (%) (Cents) (Cents) (%) (%) (%) Industrial (7) AIMS AMP CAPITAL N.R. SGD SGD Quarter SGD ASCENDAS REAL ES N.R. SGD SGD Quarter SGD CACHE LOGISTICS N.R. SGD SGD Quarter SGD CAMBRIDGE REIT N.R. SGD SGD Quarter SGD MAPLETREE INDUST N.R. SGD SGD Quarter SGD MAPLETREE LOG TR N.R. SGD SGD Quarter SGD SABANA SHARIAH Buy SGD SGD Quarter SGD Total: Average: Average: 8.31 Average: Residential (1) SAIZEN REIT N.R. SGD SGD Semi-Anl SGD Total: Average: Average: 8.4 Average: Hospitality (2) ASCOTT RESIDENCE N.R. SGD SGD Semi-Anl SGD CDL REIT Accumulate SGD SGD Semi-Anl SGD Total: Average: Average: 7.9 Average: Healthcare (2) FIRST REIT N.R. SGD SGD Quarter SGD PARKWAYLIFE REIT Accumulate SGD SGD Quarter SGD Total: Average: Average: 6.93 Average: Office (3) CAPITACOMMERCIAL N.R. SGD SGD Semi-Anl SGD FRASERS COMMERCI N.R. SGD SGD Semi-Anl SGD K-REIT ASIA N.R. SGD SGD Semi-Anl SGD Total: Average: Average: 6.26 Average: Retail (5) CAPITAMALL TRUST N.R. SGD SGD Quarter SGD CAPITARETAIL N.R. SGD SGD Semi-Anl SGD FORTUNE REIT N.R. HKD #N/A N/A HKD Semi-Anl HKD FRASERS CENTREPO N.R. SGD SGD Quarter SGD LIPPO MALLS N.R. SGD SGD Quarter SGD Total: 824. Average: Average: 6.36 Average: Mixed Commercial (3) MAPLETREE COMMER N.R. SGD SGD Quarter SGD STARHILL GLOBAL N.R. SGD SGD Quarter SGD SUNTEC REIT N.R. SGD SGD Quarter SGD Total: Average: Average: 6.66 Average: S-REIT Aggregate 23 REITs Total Average: Average: 7.17 Average: estimates N.R.: Non-rated 6 of 11

7 12 June 212 Fig 11: S-REIT Price performance REIT Market price as of: Crncy Last Price Mkt Cap. Free Float 52 Wk High 52Wk Low WTD 1M 3M 6M 1Y YTD 11-Jun-12 (US$mn) (%) % % % % % % Industrial (7) AIMS AMP CAPITAL SGD ASCENDAS REAL ES SGD CACHE LOGISTICS SGD CAMBRIDGE REIT SGD MAPLETREE INDUST SGD MAPLETREE LOG TR SGD SABANA SHARIAH SGD Total: Average: Residential (1) SAIZEN REIT SGD Total: Average: Hospitality (2) ASCOTT RESIDENCE SGD CDL REIT SGD Total: Average: Healthcare (2) FIRST REIT SGD PARKWAYLIFE REIT SGD Total: Average: Office (3) CAPITACOMMERCIAL SGD FRASERS COMMERCI SGD K-REIT ASIA SGD Total: Average: Retail (5) CAPITAMALL TRUST SGD CAPITARETAIL SGD FORTUNE REIT HKD #N/A N/A FRASERS CENTREPO SGD LIPPO MALLS SGD Total: 824. Average: Mixed Commercial (3) MAPLETREE COMMER SGD N.A STARHILL GLOBAL SGD SUNTEC REIT SGD Total: Average: S-REIT Aggregate 23 REITs Total Average: estimates 7 of 11

8 12 March 212 Important Information This publication is prepared by Phillip Securities Research Pte Ltd., 25 North Bridge Road, #6-, Raffles City Tower, Singapore (Registration Number: N), which is regulated by the Monetary Authority of Singapore ( Phillip Securities Research ). By receiving or reading this publication, you agree to be bound by the terms and limitations set out below. This publication has been provided to you for personal use only and shall not be reproduced, distributed or published by you in whole or in part, for any purpose. If you have received this document by mistake, please delete or destroy it, and notify the sender immediately. Phillip Securities Research shall not be liable for any direct or consequential loss arising from any use of material contained in this publication. The information contained in this publication has been obtained from public sources, which Phillip Securities Research has no reason to believe are unreliable and any analysis, forecasts, projections, expectations and opinions (collectively, the Research ) contained in this publication are based on such information and are expressions of belief of the individual author or the indicated source (as applicable) only. Phillip Securities Research has not verified this information and no representation or warranty, express or implied, is made that such information or Research is accurate, complete, appropriate or verified or should be relied upon as such. Any such information or Research contained in this publication is subject to change, and Phillip Securities Research shall not have any responsibility to maintain or update the information or Research made available or to supply any corrections, updates or releases in connection therewith. In no event will Phillip Securities Research or persons associated with or connected to Phillip Securities Research, including but not limited its officers, directors, employees or persons involved in the preparation or issuance of this report, (i) be liable in any manner whatsoever for any consequences (including but not limited to any special, direct, indirect, incidental or consequential losses, loss of profits and damages) of any reliance or usage of this publication or (ii) accept any legal responsibility from any person who receives this publication, even if it has been advised of the possibility of such damages. You must make the final investment decision and accept all responsibility for your investment decision, including, but not limited to your reliance on the information, data and/or other materials presented in this publication. Any opinions, forecasts, assumptions, estimates, valuations and prices contained in this material are as of the date indicated and are subject to change at any time without prior notice. Past performance of any product referred to in this publication is not indicative of future results. This report does not constitute, and should not be used as a substitute for, tax, legal or investment advice. This publication should not be relied upon exclusively or as authoritative, without further being subject to the recipient s own independent verification and exercise of judgment. The fact that this publication has been made available constitutes neither a recommendation to enter into a particular transaction, nor a representation that any product described in this material is suitable or appropriate for the recipient. Recipients should be aware that many of the products, which may be described in this publication involve significant risks and may not be suitable for all investors, and that any decision to enter into transactions involving such products should not be made, unless all such risks are understood and an independent determination has been made that such transactions would be appropriate. Any discussion of the risks contained herein with respect to any product should not be considered to be a disclosure of all risks or a complete discussion of such risks. Nothing in this report shall be construed to be an offer or solicitation for the purchase or sale of any product. Any decision to purchase any product mentioned in this research should take into account existing public information, including any registered prospectus in respect of such product. Phillip Securities Research, or persons associated with or connected to Phillip Securities Research, including but not limited to its officers, directors, employees or persons involved in the preparation or issuance of this report, may provide an array of financial services to a large number of corporations in Singapore and worldwide, including but not limited to commercial / investment banking activities (including sponsorship, financial advisory or underwriting activities), brokerage or securities trading activities. Phillip Securities Research, or persons associated with or connected to Phillip Securities Research, including but not limited to its officers, directors, employees or persons involved in the preparation or issuance of this report, may have participated in or invested in transactions with the issuer(s) of the securities mentioned in this publication, and may have performed services for or solicited business from such issuers. Additionally, Phillip Securities Research, or persons associated with or connected to Phillip Securities Research, including but not limited to its officers, directors, employees or persons involved in the 8 of 11

9 12 March 212 preparation or issuance of this report, may have provided advice or investment services to such companies and investments or related investments, as may be mentioned in this publication. Phillip Securities Research or persons associated with or connected to Phillip Securities Research, including but not limited to its officers, directors, employees or persons involved in the preparation or issuance of this report may, from time to time maintain a long or short position in securities referred to herein, or in related futures or options, purchase or sell, make a market in, or engage in any other transaction involving such securities, and earn brokerage or other compensation in respect of the foregoing. Investments will be denominated in various currencies including US dollars and Euro and thus will be subject to any fluctuation in exchange rates between US dollars and Euro or foreign currencies and the currency of your own jurisdiction. Such fluctuations may have an adverse effect on the value, price or income return of the investment. To the extent permitted by law, Phillip Securities Research, or persons associated with or connected to Phillip Securities Research, including but not limited to its officers, directors, employees or persons involved in the preparation or issuance of this report, may at any time engage in any of the above activities as set out above or otherwise hold a interest, whether material or not, in respect of companies and investments or related investments, which may be mentioned in this publication. Accordingly, information may be available to Phillip Securities Research, or persons associated with or connected to Phillip Securities Research, including but not limited to its officers, directors, employees or persons involved in the preparation or issuance of this report, which is not reflected in this material, and Phillip Securities Research, or persons associated with or connected to Phillip Securities Research, including but not limited to its officers, directors, employees or persons involved in the preparation or issuance of this report, may, to the extent permitted by law, have acted upon or used the information prior to or immediately following its publication. Phillip Securities Research, or persons associated with or connected to Phillip Securities Research, including but not limited its officers, directors, employees or persons involved in the preparation or issuance of this report, may have issued other material that is inconsistent with, or reach different conclusions from, the contents of this material. The information, tools and material presented herein are not directed, intended for distribution to or use by, any person or entity in any jurisdiction or country where such distribution, publication, availability or use would be contrary to the applicable law or regulation or which would subject Phillip Securities Research to any registration or licensing or other requirement, or penalty for contravention of such requirements within such jurisdiction. Section 27 of the Financial Advisers Act (Cap. 11) of Singapore and the MAS Notice on Recommendations on Investment Products (FAA-N1) do not apply in respect of this publication. This material is intended for general circulation only and does not take into account the specific investment objectives, financial situation or particular needs of any particular person. The products mentioned in this material may not be suitable for all investors and a person receiving or reading this material should seek advice from a professional and financial adviser regarding the legal, business, financial, tax and other aspects including the suitability of such products, taking into account the specific investment objectives, financial situation or particular needs of that person, before making a commitment to invest in any of such products. Please contact Phillip Securities Research at [ ] in respect of any matters arising from, or in connection with, this document. This report is only for the purpose of distribution in Singapore. 9 of 11

10 12 March 212 Contact Information (Singapore Research Team) Chan Wai Chee Lee Kok Joo, CFA Joshua Tan CEO, Research Head of Research Strategist Special Opportunities S-Chips, Strategy Magdalene Choong Go Choon Koay, Bryan Derrick Heng Investment Analyst Investment Analyst Investment Analyst Gaming, US Property Transportation, Telecom Ken Ang Travis Seah Peter Lee Investment Analyst Investment Analyst Research Assistant Financials REITS General Enquiries (Phone) (Fax) 1 of 11

11 12 March 212 Contact Information (Regional Member Companies) SINGAPORE Phillip Securities Pte Ltd Raffles City Tower 25, North Bridge Road #6- Singapore Tel : (65) Fax : (65) Website: HONG KONG Phillip Securities (HK) Ltd Exchange Participant of the Stock Exchange of Hong Kong 11/F United Centre 95 Queensway Hong Kong Tel (852) Fax (852) Websites: INDONESIA PT Phillip Securities Indonesia ANZ Tower Level 23B, Jl Jend Sudirman Kav 33A Jakarta 122 Indonesia Tel (62-21) 5798 Fax (62-21) Website: THAILAND Phillip Securities (Thailand) Public Co. Ltd 15th Floor, Vorawat Building, 849 Silom Road, Silom, Bangrak, Bangkok 15 Thailand Tel (66-2) / Fax (66-2) Website UNITED KINGDOM King & Shaxson Capital Limited 6th Floor, Candlewick House, 12 Cannon Street, London, EC4N 6AS Tel (44-2) Fax (44-2) Website: MALAYSIA Phillip Capital Management Sdn Bhd B-3-6 Block B Level 3 Megan Avenue II, No. 12, Jalan Yap Kwan Seng, 545 Kuala Lumpur Tel (63) Fax (63) Website: JAPAN Phillip Securities Japan, Ltd. 4-2 Nihonbashi Kabuto-cho Chuo-ku, Tokyo Tel (81-3) Fax (81-3) Website: CHINA Phillip Financial Advisory (Shanghai) Co. Ltd No 55 Yan An East Road, Ocean Tower Unit 2318, Postal code 21 Tel (86-21) Fax (86-21) Website: FRANCE King & Shaxson Capital Limited 3rd Floor, 35 Rue de la Bienfaisance 758 Paris France Tel (33-1) Fax (33-1) Website: UNITED STATES Phillip Futures Inc 141 W Jackson Blvd Ste 35 The Chicago Board of Trade Building Chicago, IL 664 USA Tel Fax AUSTRALIA Octa Phillip Securities Ltd Level 12, 15 William Street, Melbourne, Victoria 3, Australia Tel (3) Fax (3) Website: 11 of 11