THIRD-PARTY AFFILIATED RESEARCH

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1 Vol m Property Devt & Invt Hong Kong November 28, 2017 Company Note Hong Kong ADD (no change) Consensus ratings*: Buy 5 Hold 0 Sell 0 Current price: HK$4.43 Target price: HK$5.88 Previous target: HK$5.88 Up/downside: 32.7% CIMB / Consensus: 13.1% Reuters: Bloomberg: Market cap: Average daily turnover: 0035.HK 35 HK US$1,300m HK$10,142m US$0.89m HK$6.94m Current shares o/s: 2,249m Free float: 46.0% *Source: Bloomberg Key changes in this note FY18-20F EPS increased by 3-6% Source: Bloomberg Price performance 1M 3M 12M Absolute (%) Relative (%) Major shareholders % held Mr. Chiu and his family 54.0 Insert Price Close Relative to HSI (RHS) Nov-16 Feb-17 May-17 Aug Far East Consortium International Insert Insert Limited Property sales and recurrent income boost earnings FEC posted a solid 1HFY18 core net profit, largely in line with our expectations. 1H core net profit made up 43% of our FY18F forecast; we expect a stronger 2H. FEC has 23 projects in the pipeline with total attributable saleable floor area of 8.3m sq. ft., which would support sales for the next 10 years, in our view. Presales hit a record of HK$13bn in 1HFY18; we expect about HK$6.4bn presales to be booked in FY18-20F. We are positive on FEC for its earnings visibility (presales secure 42% of FY18-20F property sales), compelling valuation (74% disc. to RNAV) and attractive yield (5.7%). Maintain Add with an unchanged SOP-based target price of HK$5.88. Solid net profit growth in 1HFY18 Excluding a hotel disposal gain of HK$320m and investment property revaluation gain of HK$116m, Far East Consortium s (FEC) 1HFY18 core net profit grew 25% yoy to HK$557m, largely in line. The solid earnings growth was driven by high-margin property sales, the recovery of hotel operations and stable growth of the car parks business. The group declare an interim dividend of HK$0.04 per share (HK$0.035 in 1HFY17). Presales value hits record-high of HK$13bn in 1HFY18 FEC has 23 projects in the pipeline with total attributable saleable floor area of 8.3m sq.ft; we believe this will support development for the next 10 years. The estimated gross value of the development property has reached HK$45.4bn. Thanks to the successful project launches (4 projects) during the Apr-Sep 17 period, the cumulative presales value hit a record-high of HK$13bn, of which, we estimate, approx. HK$6.4bn will be booked in FY18-20F, representing c.42% of the total property sales (HK$15bn) in FY18-20F. Secures mega residential project in Manchester, UK FEC continues to expand overseas with 2 new projects in 1H. FEC is participating in the development of Northern Gateway, Manchester s largest residential project, together with local government to build up to 10,000 new residential units over the next decade. The total project is set to be worth approx. GBP10bn. FEC was also selected by the Western Australian government as the preferred proponent to develop the Perth City Link. Hotel operations on recovery path Hotel operations showed a steady recovery in 1HFY18. Thanks to 2 new hotel openings, revenue from hotel operations rose 13% yoy to HK$695m. Gross margin improved by 1.5% pts to 61.5%, thanks to a 8% yoy growth in RevPAR (HK$497), driven by higher occupancy rate (+5.6% pts to 81.8%) and average room rate (+0.8% to HK$604). We expect the recovery of hotel operations to be sustainable, on the back of improving visitor arrivals in HK, and improvements in the China and Malaysia hotel markets. Car park business remains sound The car park business remained sound with revenue up 7.6% yoy to HK$333m, supported by around 9,300 new car park bays. Gross profit increased by 17% yoy to HK$78m due to higher contributions from high-margin self-owned car parks. Maintain Add with target price of HK$5.88 We maintain Add on FEC and an SOP-based TP of HK$5.88. Our earnings revision (FY18-20F up by 3-6%) reflects changes in the property schedule. We are positive on FEC due to its high earnings visibility (presales secure 42% of FY18-20F property sales), compelling valuation (74% discount to its RNAV of HK$16.77) and attractive dividend yield of 5.7%. Share price catalysts include strong property presales and new property projects wins. Risks to our call are weak property markets in HK/China/Australia/UK. Analyst Ray KWOK T (852) E ray.kwok@cimb.com Financial Summary Mar-16A Mar-17A Mar-18F Mar-19F Mar-20F Total Net Revenues (HK$m) 3,995 5,005 5,764 6,614 10,594 Operating EBITDA (HK$m) 1,316 1,664 2,288 2,727 2,718 Net Profit (HK$m) 768 1,118 1,603 1,701 1,796 Normalised EPS (HK$) Normalised EPS Growth (5.8%) 26.9% 46.9% 31.9% 5.6% FD Normalised P/E (x) DPS (HK$) Dividend Yield 3.61% 4.18% 5.66% 6.00% 6.34% EV/EBITDA (x) P/FCFE (x) NA NA Net Gearing 77% 70% 78% 96% 117% P/BV (x) ROE 6.4% 8.1% 12.3% 16.9% 18.6% % Change In Normalised EPS Estimates 4.05% 5.71% 3.13% Normalised EPS/consensus EPS (x) SOURCE: COMPANY DATA, CIMB FORECASTS IMPORTANT DISCLOSURES, INCLUDING ANY REQUIRED RESEARCH CERTIFICATIONS, ARE PROVIDED AT THE END OF THIS REPORT. IF THIS REPORT IS DISTRIBUTED IN THE UNITED STATES IT IS DISTRIBUTED BY CIMB SECURITIES (USA), INC. AND IS CONSIDERED THIRD-PARTY AFFILIATED RESEARCH. Powered by the EFA Platform

2 Property Devt & Invt Hong Kong Far East Consortium International Limited November 28 Property sales and recurrent income boost earnings 1HFY18 results highlight Including a hotel disposal gain of HK$320m and investment property revaluation gain of HK$116m, Far East Consortium (FEC) posted a robust 1HFY18 net profit growth of 56% to HK$1.0bn, mainly driven by higher margins on property sales, the recovery of hotel operations, and stable growth in the car park business. Excluding the two exceptional items, core net profit grew 25% yoy to HK$557m. We deem the results in line (with core net profit forming 43% of our full-year forecast) as we expect strong property sales of approximately HK$2.0bn in 2HFY18F to boost earnings in the second half-year (Figure 1). Revenue declined by 6% yoy in 1HFY18 to HK$2.8bn due to lower of property sales which declined by 16% yoy to HK$1.66bn. FEC has 23 projects in the pipeline with total attributable saleable floor area of 8.3m sq.ft. The estimated gross value reached HK$45.4bn in Sep 2017, of which, approximately HK$15.3bn is expected to completed within the next three years (FY18-20F). Presales of property remained robust during the period. The cumulative presales values increased by 21% to HK$13bn (HK$10.7bn in Mar 2017), thanks to the successful projects launches of 1) Arta (Singapore), 2) Marin Point (HK), 3) West Side Place Tower 4 (Melbourne, Australia), and 4) The Star Residences (Gold Coast, Australia). Revenue from property sales declined by 16% to HK$1.66bn, owing to the completion of certain projects. Gross profit from property sales grew 28% yoy to HK$983m due to higher gross profit margin (GPM) achieved in the projects in China. The group completed two projects, namely Royal Crest II (Shanghai) and Dorsett Bukit Bintang (Kuala Lumper, Malaysia), and the partial completion of the FIFTH (Melbourne, Australia) during the period. The group expects to book the remaining floor area of the FIFTH in 2HFY18F. On the back of two new hotels which commenced operations (Silka Tsuen Wan in HK and Dorsett City in London) in 1HFY18 and stable recovery of the hotel market, hotel operations revenue increased by 12.8% yoy to HK$695m. The Hong Kong market was particularly strong due to improved visitor arrivals. Overall, the gross profit margin improved by 1.5% pts from 60.0% in 1HFY17 to 61.5% in 1HFY18, thanks to an 8.3% increase in RevPAR (from HK$456 in 1HFY17 to HK$494 in 1HFY18), driven by a higher occupancy rate (+5.6% pts from 76.2% in 1HFY17 to 81.8% in 1HFY18) and higher average room rate (increased by 0.8% to HK604). The car park business delivered a solid revenue growth of 7.6% to HK$333m while gross profit increased by 17% yoy to HK$78m due to higher contributions from high-margin self-owned car parks. In 1HFY18, the group added approximately 9,300 car park bays. As at Sep 2017, the group was operating 83,801 bays in Australia, New Zealand, the UK and Malaysia. The group added another 1,392 car park bays in Oct 2017 via an acquisition of a portfolio of car parks in Budapest, Hungary. Book value steadily increased by 9.6% to HK$11.9bn, or 5.28 per share (HK$4.82 in Mar 2017). The group has proposed an interim dividend of HK$0.04 per share (HK$0.035 per share in 1HFY17). 2

3 Property Devt & Invt Hong Kong Far East Consortium International Limited November 28 Figure 1: Results comparison FYE Mar (HK$ m) 1HFY18 1HFY17 yoy % 2HFY17 hoh % Prev. chg chg FY18F Comments Revenue 2,776 2,953 (6.0) 2, ,764 Revenue declined by 6% was due to lower of property sales. Operating costs (1,601) (2,018) (20.6) (1,324) 21.0 (3,476) EBITDA 1, ,288 EBITDA margin (%) China property sales achieved better margins Depn & amort. (172) (153) 12.4 (161) 7.1 (319) EBIT 1, ,970 Interest expense (147) (105) 39.2 (68) (220) Interest & invt inc N/M 35 Associates' contrib (2) 2 (182.7) (7) N/M 3 Exceptionals Included fair value change of inv prop of HK$116m and Pretax profit 1, ,102 a hotel disposal gain of HK$320m Tax (306) (233) 31.4 (201) 52.5 (487) Tax rate (%) Minority interests (14) (7) (8) 62.5 (12) Net profit 1, ,603 FY17 net profit was largely in line with CIMB/Bloomberg Core net profit ,289 consensus forecast. EPS (HK$ cts) Core EPS (HK$ cts) SOURCE: CIMB RESEARCH, COMPANY New projects secured FEC secured two new projects in the first half of FY18F. These are Perth City Link (Perth, Australia) and a mega city development project called Northern Gateway (Manchester, UK). Northern Gateway. In Apr 2017, FEC announced that it was selected by Manchester City Council in the UK to participate in developing the Northern Gateway. The project is the largest residential development for transformational change ever undertaken in Manchester. The project will be in partnership with local government to deliver up to 10,000 new residential units over the next decade with an emphasis on design quality and sustainability, open space, green walking trails and cycling routes. With over 13m sq.ft., the 10,000 new homes will be developed in phases over the next 10 years and the total project is estimated to be worth approximately GBP10bn (US$13.3bn). Figure 2: Site for Northern Gateway in Manchester, UK SOURCE: CIMB RESEARCH, COMPANY Perth City Link. In May 2017, FEC was selected by the local government in Western Australia as the preferred proponent to develop Lots 3B, 6 and 7 of the Perth City Link in Western Australia. This project is one of the major developments for the Western Australian Government for the purpose of connecting the Perth CBD with the entertainment district. 3

4 Property Devt & Invt Hong Kong Far East Consortium International Limited November 28 Figure 3: Perth City Link, Acquired new lots (Lots 3B, 6 and 7) FEC has acquired Lots 2 and 3A The Tower a Elizabeth Quay in 2016, which will be developed into a 270-room Dorsett hotel and 350 residential apartments. SOURCE: CIMB RESEARCH, COMPANY Figure 4: Projects in the pipeline Project name Country Attributable sellable floor area (sq.ft.) No. of apartments / houses Cumulative Presold % of contracted the project presales (HK$m) Est average selling price (HK$ / psf) Est gross value (HK$m) Expected fiscal year of completion Completed property for sals Hong Kong, Malaysia, China 275,000 n.a. 100% n.a. n.a. 1,490 Completed The FIFTH Melbourne, Australia 214, % 981 4, Mar-18 Royal Riverside (tower 1, 2, 3 and 4) Guangzhou, China 477, % 1,173 3,080 1,469 Mar-19 Aspen Crest Wong Tai Sin, Hong Kong 64, % 1,060 16,563 1,060 Mar-19 Marin Point Sha Tau Kok, Hong Kong 103, % ,501 1,082 Mar-19 Royal Riverside (tower 5) Guangzhou, China 207, % 0 4, Mar-19 Tan Kwai Tsuen Yuen Long, Hong Kong 48, houses 0% 0 13, Mar-20 Tai Wai Sha Tin, Hong Kong 30,000 n.a. 0% 0 18, Mar-20 Sham Shui Po Kowloon, Hong Kong 28, % 0 14, Mar-20 Artra Alexandra View 289, % 1,076 9,342 2,709 Mar-20 Angel Meadow at NOMA (partial) Manchester 277, % 0 4,400 1,219 Mar-20 The Tower a Elizabeth Quay Perth, Australia 366, % 1,908 7,797 2,854 Mar-20 Sub - total (FY18-20F) 2,378,968 42% 6,384 15,247 West Side Place - Tower 1-2 Melbourne, Australia 1,072,000 1,400 89% 5,148 5,220 5,595 Mar-21 West Side Place - Tower 4 Melbourne, Australia 565, % 1,295 5,056 2,856 Mar-22 West Side Place - Tower 3 Melbourne, Australia 564, % 0 4,800 2,707 Mar-2024 and onward Angel Meadow at NOMA (partial) Manchester 277, % 0 4,400 1,219 Mar-21 The Star Residences Gold Coast 98,000 n.a. 39% 213 5, Mar-22 Shatin Heights Sha Tin, Hong Kong 70,000 n.a. 0% 0 17,000 1,190 Mar-2021 and onward Alpha Square London, UK 388,000 n.a. 0% 0 10,500 4,074 Mar-2021 and onward Hornsey Townhall London, UK 105,000 n.a. 0% 0 9, Mar-2021 and onward Perth City Link (Lot 2 and 3A) Perth, Australia 320,000 n.a. 0% 0 4,500 1,440 Mar-2021 and onward Queen's Wharf (Tower 4) Brisbane 259,000 n.a. 0% 0 4,000 1,036 Mar-2021 and onward Queen's Wharf (Tower 5) Brisbane 224,000 n.a. 0% 0 5,000 1,120 Mar-2021 and onward Queen's Wharf (Tower 6) Brisbane 439,000 n.a. 0% 0 5,000 2,195 Mar-2021 and onward Northern Gateway project Manchester 1,500,000 10,000 0% 0 3,500 5,250 Mar-2021 and onward Sub - total (beyond FY20F) 5,881,000 6,656 30,134 Grand total 8,259,968 13,040 45,382 SOURCE: CIMB RESEARCH, COMPANY Raise net profit forecasts by 3-6% in FY18-20F We raise our FY18-20F net profit forecasts by 3-6% due to the change in the property projects completion schedule (Figures 4 & 5). 4

5 Property Devt & Invt Hong Kong Far East Consortium International Limited November 28 Figure 5: Earnings revision Mar-17A Mar-18F Mar-19F Mar-20F FYE Dec (HK$m) Old New % chg Old New % chg Old New % chg Revenue 5,005 5,698 5, % 7,363 6, % 9,162 10, % Gross profit 1,990 2,558 2, % 2,979 3, % 3,214 3, % Gross profit margin 39.7% 44.9% 45.4% 0.5% pts 40.5% 46.4% 5.9% pts 35.1% 29.9% -5.2% pts EBITDA 1,777 2,242 2, % 2,626 2, % 2,824 2, % Net profit 1,118 1,553 1, % 1,609 1, % 1,742 1, % Core net profit 852 1,239 1, % 1,609 1, % 1,742 1, % EPS % % % Core EPS % % % SOURCE: CIMB RESEARCH, COMPANY SOP valuations We value FEC using an SOP valuation. Our target price of HK$5.88 is based on an SOP valuation, in which we assume a 50% discount to RNAV for the development properties, a 20% discount for the investment properties (its book value), a 70% discount to the market value of the hotel assets, 2.0x P/BV for the car park business and 9x EV/EBITDA for the Brisbane project (NPV, 10% discount rate). 74% discount to its RNAV of HK$ FEC trades at a 33% discount to its SOP per share, a 74% discount to its RNAV of HK$16.77 and 16% discount to its book value of HK$5.28 (Figure 6). Figure 6: SOP valuations Revaluation net asset value (HK$m) Book NAV RNAV SOP valuation SOP (per share) Valuation methodology Development properties 9,983 20,357 10, % discount to RNAV Investment properties 3,200 3,200 2, % discount to RNAV Hotel operation 7,616 20,966 6, % discount to market value Car parks and facilities management (76.05%) , x P/BV Queen's Wharf Brisbane project 300 2,410 2, x EV/EBITDA (NPV at 10% discount rate) Other assets/liabilities (2,997) (2,997) (2,997) at book Net cash / (debt) (6,841) (6,841) (6,841) at book Minority interests (174) (174) at book Issued shares (million) 2, , , ,249.3 Total NAV / RNAV / SOP (HK$ m) 11,887 37,721 13,200 Total NAV / RNAV / SOP (HK$/share) Discount to NAV / RNAV / SOP (%) 16% 74% 25% Current price (HK$) 4.43 Price upside (%) 33% SOURCE: CIMB RESEARCH, COMPANY 5

6 Property Devt & Invt Hong Kong Far East Consortium International Limited November 28 Figure 7: Revenue breakdown by segment FYE Mar (HK$m) Mar-16A 1HFY17 2HFY17 Mar-17A 1HFY18 Revenue breakdown by segment Property development 1,971 1, ,937 1,655 Australia 721 1, , Hong Kong Malaysia China 1, , United Kingdom Property investment Hong Kong China Singapore 0 0 (0) 0 1 Hotel operation and management 1, , Hong Kong Malaysia China Singapore United Kingdom Car park operations and facility mgt Australia Malaysia Others Total revenue 3,995 2,953 2,052 5,005 2,776 Growth (yoy %) Revenue breakdown by segment Property development -33% 120% -10% 49% -16% Australia -42% 114% 792% 139% -75% Hong Kong -97% -100% N/M N/M N/M Malaysia N/M N/M N/M N/M N/M China 89% 178% -30% -1% 92% United Kingdom n.a. n.a. n.a. n.a. n.a. Property investment 5% -7% -8% -8% 32% Hong Kong 0% -2% -1% -2% 20% China 3% -18% -4% -11% 16% Singapore N/M N/M N/M N/M N/M Hotel operation and management -12% -3% 6% 2% 13% Hong Kong -16% -8% 1% -3% 19% Malaysia -18% 6% -11% -3% 3% China 0% 5% 16% 11% 14% Singapore -2% 1% -15% -7% -5% United Kingdom 61% -6% 12% 2% 13% Car park operations and facility mgt 1% 3% 3% 3% 8% Australia 1% 4% 3% 3% 6% Malaysia -11% -13% -50% -33% 86% Others 171% 374% -58% 10% 43% Total revenue -22% 59% -4% 25% -6% SOURCE: CIMB RESEARCH, COMPANY 6

7 Property Devt & Invt Hong Kong Far East Consortium International Limited November 28 Figure 8: Operating profit breakdown by segment FYE Mar (HK$m) Mar-16A 1HFY17 2HFY17 Mar-17A 1HFY18 Operating profit by segment Property development , Australia Hong Kong (49) 111 (133) (22) (17) Malaysia (25) 2 (3) (1) 178 China United Kingdom 3 (1) (0) (1) 0 Property investment Hong Kong China (29) (12) (7) (19) (13) Singapore (1) Hotel operation and management Hong Kong Malaysia China 7 (10) 1 (9) 3 Singapore United Kingdom 12 8 (0) 8 9 Car park operations and facility mgt Australia Malaysia Others Total operating profit 1,279 1, ,794 1,084 Growth (yoy %) Operating profit by segment Property development -26% 247% -44% 38% 1% Australia -29% 151% 2936% 175% -74% Hong Kong -111% -476% 575% -56% -116% Malaysia N/M N/M N/M N/M N/M China 63% 196% -34% n.a. 109% United Kingdom n.a. n.a. n.a. n.a. n.a. Property investment 82% -31% 164% 86% -19% Hong Kong 27% -32% 26% 66% -11% China 10% -23% -47% -34% 10% Singapore N/M N/M N/M N/M N/M Hotel operation and management 33% 70% -28% -8% -34% Hong Kong 7% 984% -67% -32% -75% Malaysia -60% 41% -52% -13% 40% China N/M N/M N/M N/M N/M Singapore -10% -14% 15% 3% -9% United Kingdom N/M N/M N/M -36% N/M Car park operations and facility mgt -4% -1% 17% 8% 93% Australia -5% 2% 10% 6% 72% Malaysia 6% -24% -8% -15% 43% Others N/M N/M N/M N/M N/M Total operating profit -13% 180% -19% 40% 1% SOURCE: CIMB RESEARCH, COMPANY 7

8 Property Devt & Invt Hong Kong Far East Consortium International Limited November 28 Figure 9: Peer comparisons Price Target price Market Cap P/E 3-year P/BV ROE EV/EBITDA Yield Company Code Recom. (local curr) (local curr) Upside EPS CAGR (US$m) CY2017 CY2018 (%) % CY2017 CY2018 CY2017 CY2018 CY2017 CY2018 CY2017 CY2018 Far East Consortium 35 HK Add % 1, % % 15.8% % 5.9% Mid-sized property developer / conglomerate Great Eagle 41 HK Not Rated N/A N/A 3, % % 3.6% % 2.1% Hysan 14 HK Hold % 5, % % 4.0% % 3.5% K Wah Initernational 173 HK Not Rated 4.70 N/A N/A 1, % % 13.2% % 4.1% Kerry Prop 683 HK Not Rated N/A N/A 5, % % 5.4% % 4.3% Average % % 6.5% % 3.5% Large-sized property developer / conglomerate Cheung Kong Property 1113 HK Add % 31, % % 9.1% % 3.2% Hang Lung Property 101 HK Reduce % 10, % % 5.2% % 4.2% Henderson Land 12 HK Add % 26, % % 6.5% % 3.3% New World Dev 17 HK Add % 14, % % 3.5% % 4.2% Sino Land 83 HK Reduce % 11, % % 5.1% % 4.1% SHK Property 16 HK Add % 48, % % 6.6% % 4.1% Sw ire Pacific 19 HK Not Rated N/A N/A 13, % % 3.1% % 3.3% Wharf 4 HK Hold % 9, % % 4.9% % 9.8% Average % % 5.5% % 4.5% SOURCE: CIMB RESEARCH, BLOOMBERG 8

9 Property Devt & Invt Hong Kong Far East Consortium International Limited November 2 BY THE NUMBERS P/BV vs ROE Jan-14AJan-15AJan-16AJan-17A Jan-18F Jan-19F 20.3% 17.3% 14.3% 11.3% 8.3% 5.3% 2.3% 12-mth Fwd FD Normalised P/E vs FD 12.9 Normalised EPS Growth Jan-14A Jan-15A Jan-16A Jan-17A Jan-18F Jan-19F 170% 145% 120% 95% 70% 45% 20% -5% -30% Rolling P/BV (x) (lhs) ROE (rhs) 12-mth Fwd Rolling FD Normalised P/E (x) (lhs) Diluted Normalised EPS Growth (rhs) Profit & Loss (HK$m) Mar-16A Mar-17A Mar-18F Mar-19F Mar-20F Total Net Revenues 3,995 5,005 5,764 6,614 10,594 Gross Profit 1,706 1,990 2,617 3,068 3,166 Operating EBITDA 1,316 1,664 2,288 2,727 2,718 Depreciation And Amortisation Operating EBIT 1,002 1,351 1,970 2,401 2,385 Financial Income/(Expense) Pretax Income/(Loss) from Assoc Non-Operating Income/(Expense) Profit Before Tax (pre-ei) 866 1,301 1,788 2,212 2,184 Exceptional Items Pre-tax Profit 866 1,301 1,788 2,212 2,184 Taxation Exceptional Income - post-tax Profit After Tax 792 1,133 1,615 1,713 1,810 Minority Interests Pref. & Special Div FX Gain/(Loss) - post tax Other Adjustments - post-tax Preference Dividends (Australia) Net Profit 768 1,118 1,603 1,701 1,796 Normalised Net Profit ,301 1,713 1,810 Fully Diluted Normalised Profit ,289 1,701 1,796 Cash Flow (HK$m) Mar-16A Mar-17A Mar-18F Mar-19F Mar-20F EBITDA 1,316 1,664 2,288 2,727 2,718 Cash Flow from Invt. & Assoc Change In Working Capital Straight Line Adjustment (Incr)/Decr in Total Provisions Other Non-Cash (Income)/Expense Other Operating Cashflow Net Interest (Paid)/Received Tax Paid Cashflow From Operations ,151 2,067 2,247 2,985 Capex ,731-3,199-3,468 Disposals Of FAs/subsidiaries Disposals of Investment Properties Acq. Of Subsidiaries/investments Other Investing Cashflow Cash Flow From Investing ,703-3,170-3,445 Debt Raised/(repaid) 3, Proceeds From Issue Of Shares Shares Repurchased Dividends Paid Preferred Dividends Other Financing Cashflow -1, Cash Flow From Financing 1, SOURCE: CIMB RESEARCH, COMPANY DATA 9

10 Property Devt & Invt Hong Kong Far East Consortium International Limited November 2 BY THE NUMBERS cont d Balance Sheet (HK$m) Mar-16A Mar-17A Mar-18F Mar-19F Mar-20F Total Cash And Equivalents 3,774 5,653 5,763 4,554 5,527 Properties Under Development 8,056 8,890 9,273 8,331 14,107 Total Debtors 1, ,352 Inventories Total Other Current Assets ,727 2,204 Total Current Assets 13,701 15,782 16,345 17,466 23,211 Fixed Assets 7,720 7,482 7,663 7,836 8,003 Total Investments 3,688 4,023 4,023 4,023 4,023 Intangible Assets Total Other Non-Current Assets Total Non-current Assets 12,460 12,509 12,549 12,700 12,844 Short-term Debt 2,933 2,755 2,964 3,183 4,140 Current Portion of Long-Term Debt Total Creditors 3,289 2,999 3,520 4,235 8,181 Other Current Liabilities Total Current Liabilities 6,471 6,177 6,982 7,968 12,885 Total Long-term Debt 7,863 7,376 7,695 8,014 9,356 Hybrid Debt - Debt Component Total Other Non-Current Liabilities 1,197 3,504 3,504 3,504 3,504 Total Non-current Liabilities 9,060 10,881 11,199 11,518 12,860 Total Provisions Total Liabilities 15,893 17,453 18,636 20,008 26,580 Shareholders' Equity 10,140 10,792 10,101 9,997 9,309 Minority Interests Total Equity 10,267 10,944 10,258 10,158 9,475 Key Ratios Mar-16A Mar-17A Mar-18F Mar-19F Mar-20F Revenue Growth (21.8%) 25.3% 15.2% 14.7% 60.2% Operating EBITDA Growth (11.8%) 26.5% 37.5% 19.2% (0.3%) Operating EBITDA Margin 32.9% 33.2% 39.7% 41.2% 25.7% Net Cash Per Share (HK$) BVPS (HK$) Gross Interest Cover Effective Tax Rate 25.6% 33.3% 27.3% 22.6% 17.1% Net Dividend Payout Ratio 53.7% 41.6% 43.5% 35.0% 35.0% Accounts Receivables Days Inventory Days Accounts Payables Days ROIC (%) 6.4% 7.4% 10.8% 13.3% 11.9% ROCE (%) 4.72% 5.83% 8.12% 9.80% 9.25% Return On Average Assets 3.43% 3.67% 5.12% 6.37% 6.02% Key Drivers Mar-16A Mar-17A Mar-18F Mar-19F Mar-20F Unbooked Presales (m) (HK$) 6.8 N/A N/A N/A N/A Unbooked Presales (area: m sm) N/A N/A N/A N/A N/A Unbooked Presales (units) N/A N/A N/A N/A N/A Unsold attrib. landbank (area: m sm) N/A N/A N/A N/A N/A Gross Margins (%) 50.6% 43.3% 51.3% 50.7% 27.6% Contracted Sales ASP (per Sm) (HK$) N/A N/A N/A N/A N/A Residential EBIT Margin (%) N/A N/A N/A N/A N/A Investment rev / total rev (%) 1.1% 1.5% 1.1% 1.1% 1.0% Residential rev / total rev (%) 58.0% 49.3% 58.7% 62.6% 67.1% Invt. properties rental margin (%) N/A N/A N/A N/A N/A SG&A / Sales Ratio (%) 17.6% 12.8% 11.2% 10.1% 7.4% SOURCE: CIMB RESEARCH, COMPANY DATA 10

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12 Property Devt & Invt Hong Kong Far East Consortium International Limited November 2 (a) CK Asset Holdings Limited, Sun Hung Kai Properties Ltd (ii) As of November 28, 2017, the analyst(s) who prepared this report, and the associate(s), has / have an interest in the securities (which may include but not limited to shares, warrants, call warrants and/or any other derivatives) in the following company or companies covered or recommended in this report: (a) - This report does not purport to contain all the information that a prospective investor may require. CIMB or any of its affiliates does not make any guarantee, representation or warranty, express or implied, as to the adequacy, accuracy, completeness, reliability or fairness of any such information and opinion contained in this report. 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