Company Overview. Key investment positives

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1 City Bank Capital - IPO Notes (DSE Ticker: NAHEEACP) Offer Price: BDT 10.0 per share [with no premium; and 11.3 million shares are saleable on debut trade] Key Data Summary Authorized Number of Shares, mn Authorized Capital, BDT mn 1,200.0 Pre IPO Number of Shares, mn 33.0 Pre IPO Paid Up Capital, BDT mn Post IPO Number of Shares, mn 48.0 Post-IPO Paid Up Capital, BDT mn Number of Share (Post IPO & 10% bonus adjusted), mn 52.8 Paid Up Capital (Post IPO & 10% bonus adjusted), BDT mn Face Value (BDT) 10.0 New shares Issued through IPO, mn 15.0 IPO Size including Premium, BDT mn Offer Price, BDT (including no premium) 10.0 Directors Holding (post IPO basis), % 39.6% Pre IPO General Holding (post IPO basis), % 29.2% Free Float (post IPO basis, IPO portion), % 31.3% Financial Year End Trailing Twelve Month PAT, BDT mn* 90.1 Trailing Twelve Month EPS, BDT (pre IPO)* 2.73 Out of 15.0 million IPO shares, 11.3 mn shares are sale able on debut trade (which is 75.0% of 15.0 million and 21.3% of 52.8 million shares). Issue date of the prospectus was on 28 th August 2017; so the lock-in provision will be free in 1 year for 14.0 mn shares and in 3 year for 19.0 mn shares. Issue Manager: Banco Finance and Investment Limited Auditor: Zoha Zaman Kabir Rashid & Co. Use of IPO Proceeds Price Multiple based on theoretical price (post IPO basis) Theoretical Market Price and Trailing EPS of BDT 1.4 Market Price T PE (post IPO) Relative Valuation for NACPL (BDT per share) June Trailing Twelve Month EPS, BDT (post IPO & 10% bonus adjusted)* 1.71 *Trailing PAT/EPS data is derived based on 3M end (Sept 2017) EPS made available by DSE. The company declared 10.0% stock and 5.0% cash dividend for the period of FY Record date for dividend was 12 December Particulars BDT mn % of Proceed Acquisition of Plant & Machinery % Construction of New Building % Loan Repayment % IPO Expanses % Total % Latest Financial Disclosure of NACPL Value, BDT ps Weight Weighted Value PE Multiple Valuation (DSEX) % 8.8 PE Multiple Valuation (Peers) % 6.3 PB Multiple Valuation (Peers) % 11.5 Weighted Average Valuation per share 26.7 *PE and PB multiple of peers were calculated considering risk adjusted PE and PB PAT BDT million EPS (BDT) FY FY % YoY FY FY Q % This IPO short note is initiated on (DSE Ticker: NAHEEACP) with no assigned rating. The company will be listed with the bourses on Monday, 24 th December 2017 under N category. NAHEEACP raised BDT million through IPO; and BDT 97.8 million (65.2%) will be utilized for capital machineries import & construction of new buildings, BDT 40.0 million (26.7%) for loan repayment and rest of the amount for IPO expenses that is BDT 12.2 million (8.2%). (NACPL) used moderate amount of interest bearing debt to finance the asset base of the company; as of end-march 2017 the interest bearing debt was BDT million. It means the debt to equity and debt to assets of the company was 34.9% and 21.9%, respectively. Debt to capital ratio was 0.25x only (25.8% of the capital base was financed through debt). On Post IPO basis, the company is going to be listed with ROE (trailing 12M) of 10.3%, ROA (trailing 12M) of 10.4%. NACPL will be trading at a trailing PE of 8.9x, PBV of 0.61x (at offer price of BDT 10.0). The company disclosed its 1Q end data for the period from July 17 to Sep 17. During this period company s PAT was BDT 24.8 mn (29.1% YoY growth). So on pre-ipo basis, T12M EPS is BDT 2.56 and the diluted EPS is BDT 1.71 (for T12M). The Book Value (BV) per share is BDT 26.4 on Pre-IPO basis and diluted BVPS is BDT 16.5 (including net IPO fund), as of 30 st September Company Overview (NACPL) is the pioneer of Aluminum Composite Panel (ACP) manufacturer in Bangladesh. The company was incorporated in 2010 and started its commercial operation on March The principal activity of the company is to carry on business of manufacturing world class aluminum composite panel (ACP) which is distributed as ALUCOTIGER brand. Aluminum composite panel mainly include PVDF coating aluminum composite panel, polyester coating aluminum composite panel, fire resistance aluminum composite panel, Nano PVDF coating aluminum composite panel, Brush finish aluminum composite panel, Mirror finish aluminum composite panel. There are different varieties of ACP in relation to color, thickness and in category such as - Brushed Silver & Flash Silver (3mm), Champagne, Flash Silver & Dark Champagne (4mm) etc. Main raw materials of are Alloy Aluminum Sheet, Protective Film and Adhesive Film which are procured from overseas market like China, Switzerland and Turkey. The registered office of the company is situated at Banani, Dhaka and factory located at Sreepur, Gazipur. Key investment positives In FY NACPL registered YoY revenue growth of 12.7% and PAT growth of 36.8% YoY. Meanwhile, in 9 month FY company s revenue growth was 35.8%. The company has been able to maintain decent profit margin. In 9-month FY , the company generated 33.0% GPM, 29.0% OPM, 38.9% EBITDA margin and 15.2% NPM. Source : IPO Prospectus, DSE and CBC Research, December 2017 * Disclosures: A section at the end of the report is furnished for important required disclosures, including potential conflict of interests.

2 Profit after tax (BDT mn) There are huge demand of aluminum composite panel in our country due to increase of manufacturing modern both commercial and residential building and its decoration purposes. Around 80% of the local demand were met up through import. Aluminum Composite Panel (ACP) manufacturing is a high capital-intensive industry and therefore, barriers to entry are high. Hence, first-mover s advantage is big and NACPL with its past experience and performance, will enjoy this advantage and it will be very difficult for new comers to make the quality Aluminum Composite Panel (ACP). Key risk and challenges for the company Shareholding Structures (post-ipo basis) IPO Shareholders, 31.3% Sponsor/Directors, 39.6% The paid-up capital of the company has increased by 660.0% to BDT mn (pre IPO basis) in last three years (BDT 50.0 mn was in The company has been raised million through private placement on June As large portion of market share of aluminum composite panel hold by the importers, so the company can be faced tough challenge in terms of pricing, designing and maintaining quality. Any substitute product can replace the demand of aluminum composite panel. NACPL never paid either cash or stock dividend in its recent operational history. Lock-in-provision Pre-IPO General Shareholders, 29.2% Key Shareholders (No of Shares 52.8 mn) Shareholders % Hold No of Shares Sponsor/Directors 39.6% 20,900,000 Pre-IPO General Shareholders 29.2% 15,400,000 IPO Shareholders 31.3% 16,500,000 Total Share 100.0% 52,800,000 Name of Directors % Hold No of Shares Monira Noman, Director & Chairman 11.4% 6,600,000 Engr. Abu Noman Howlader, Director & Managing Director 5.7% 3,300,000 Abu Neaim Howlader, Director 6.6% 3,850,000 Nahee SS Pipes Industries Ltd, Director 5.7% 3,300,000 Nahee Geo Textile Industries Ltd., Director 6.6% 3,850,000 Directors & sponsors 36.0% 20,900,000 Abdul Hannan Howlader 2.8% 1,650,000 Nurjan Begum 2.8% 1,650,000 Shamima Akter 1.9% 1,100,000 Md. Abul Hossen 2.8% 1,650,000 Forhard Hossion 2.8% 1,650,000 Others 13.3% 7,700,000 Other Key Shareholders 26.5% 15,400,000 *Total number of shares (52.8 mn) calculated considering 10.0% stock dividend on post IPO number of shares (48.0 mn) Source : IPO Prospectus, DSE and CBC Research, December 2017 Expiry of lock-in provision will create room for share sale by both directors and general public (who is now under lock-in provision). So, all issued shares of the issuer at the time of according this consent shall be subject to a lock-in period of 3-years from the date of issuance of prospectus or commercial operation, whichever comes later. Provided that the persons (other than directors and those who hold 5% or more shares in the company), who have subscribed to the shares of the company within immediately preceding two years of according consent shall be subject to a lock-in period of 1-year from the date of issuance of prospectus or commercial operation, whichever comes later. Lock-in free for EII & MF New shares on Issue stands at 15.0 million (of which EII & MF holds for 7.5 million shares). 50% allotted shares shall be tradable on debut trade, it means 3.75 million shares. 25% allotted shares shall be under lock-in for 6 months from issue date of prospectus; it means 1.88 million shares will be lock-free on/after 26 th February Rest of the 25% allotted shares all be under lock-in for 9 months from issue date of prospectus; it means 1.87 million additional shares will be lock-free on/after 28 th May 2018 Board and management The board of comprises of 05 members including chairmen and managing director. The directors and sponsor s hold 39.6% of the share (on post IPO shares 48.0 million). Mrs. Monira Noman is the Chairman of. She has completed her academic career from National University having M.Sc. in Mathematics. Mrs. Monira started her business career through a construction company named Speed Builder & Engineers Ltd. She has vast knowledge along with experience to handle foreign trading business. she is also the Chairman of Nahee Geo-Textile Industries Limited and also leading a business concern as Managing Director named Nahee SS Pipes Industries Ltd. Engineer Abu Noman Howlader holds the position of Managing Director in Nahee Aluminum Composite Panel Limited. He completed his graduation from BUET in Mechanical Engineering. As a Project Engineer he started his professional career in Mr. Noman established one of the leading brand in pre-engineered steel building in Bangladesh named Bangladesh Building Systems Ltd (BBS). He is the corporate member of Dhaka Chamber of Commerce & Industry (DCCI), Uttara Club, Bangladesh Electrical Association, Electrical Merchan-dise & Manufacturing Association. He is also the member of Bangladesh Malaysia Chamber of Commerce & Industry and National Association of Small & Cottage Indus-tries of Bangladesh. Mr. Noman is also a Managing Director of Managing Director of BBS Cables Ltd, Bangladesh Building Systems Ltd, BBS Metalurgic Industries Ltd., Helix Wire & Cables Industries Ltd. and Nahee Aluminum Composite Panel Ltd. He is also a Director of Xiamen Reflective Insulations Ltd., BBS Infrastructure Ltd. BBS Distribution Ltd. and BBS Developers Ltd. 2

3 Income Statement Source : IPO Prospectus, DSE and CBC Research,December 2017 (Year-end: June) BDT mn FY FY March'14 - June'14 FY FY M FY Revenue Cost of Sales and Services Gross Profit (Loss) Operating Expenses Administrative Expenses Selling & Distribution Expenses Operating Profit Financial Expenses Contribution to WPPF and Welfare Fund Net Profit before Tax Current Tax Deferred Tax Provision for Tax Net Profit after Tax Depreciations Balance Sheet BDT mn FY FY March'14 - June'14 FY FY M FY Property, Plant & Equipment Pre-operating Expenses Non-Current Assets Inventory Trade & other receivables Advances, deposits & pre-payments Cash & cash equivalent Current Assets Total Assets Long term bank loan - current portion Deferred Tax Liabilities Total non-current liabilities Short-term loan & Overdrafts Trade payable Secured Loan ( Current Portion) Income tax Payable WPPE & WF Payable Payable for expense Current Liabilities Share Capital (Paid up) Retained Earnings Share Money Deposit Shareholders' equity Total Equity & Liabilities

4 (Year-end: June) Other Key Indicators Debt Burden FY FY March'14 - June'14 FY FY M FY Interest bearing liabilities Debt to Capital 0.0% 0.0% 52.1% 49.2% 33.9% 25.8% Debt to Equity - 0.0% 170.1% 106.2% 51.3% 34.9% Debt to Assets - 0.0% 86.8% 48.7% 30.1% 21.9% EBIT/Interest, X - NA NOCFPS (pre-ipo basis) EPS (restated - pre IPO basis), BDT EPS (restated - post IPO basis), BDT Book Value per share, BDT Book Value per share (tangible), BDT Margin Gross Profit Margin NA NA 24.1% 33.4% 33.6% 33.0% Operating Profit Margin NA NA 18.9% 29.1% 29.7% 29.0% EBITDA Margin NA NA 18.9% 42.1% 43.7% 38.9% Net Profit Margin NA NA 6.0% 10.6% 12.9% 15.2% COGS as % of Revenue NA NA 75.9% 66.6% 66.4% 67.0% Effective Tax Rate NA NA 53.8% 44.9% 42.8% 37.5% Growth Revenue Growth NA NA NA 680.7% 12.7% NA Gross Profit Growth NA NA NA 981.8% 13.3% NA Op. Profit Growth NA NA NA % 14.9% NA PAT Growth NA NA NA % 36.8% NA Receipt from customers NA NA NA Payment to suppliers & Employees NA NA NA Return and valuation ROE, % 0.0% 0.0% 2.4% 19.0% 16.1% 12.6% ROA, % 0.0% 0.0% 1.2% 8.7% 8.6% 7.9% PE, X (pre IPO basis) NA NA P/BV, Source : X IPO (pre Prospectus, IPO basis) DSE and CBC Research, November 2017 NA NA P/TBV, X (pre IPO basis) Dividend History Cash dividend (as % of paid-up cap) Nil Nil Nil Nil Nil Nil Stock dividend (as % of paid-up cap) Nil Nil Nil Nil Nil Nil Source : IPO Prospectus, DSE and CBC Research,December

5 Analyst Certification All of the views expressed in this document accurately reflect the personal views of the responsible analyst(s) about any and all of the subject securities or issuers. No part of the compensation of the responsible analyst(s) named herein is, or will be, directly or indirectly, related to the specific recommendations or views expressed by the responsible analyst(s) in this report. Disclaimer This Document/Report has been prepared and issued by City Bank Capital Resources Limited (CBC) on the basis of the public information available in the market, internally developed data and other sources believed to be reliable. Whilst all reasonable care has been taken to ensure that the facts and information stated in the Documents are accurate as on the date mentioned herein. Neither CBC nor any of its director, shareholder, member of the management or employee in the research team or employee represents or warrants expressly or impliedly that the information or data of the sources used in the document are genuine, accurate, complete, authentic, and correct. Moreover, none of the director, shareholder, member of the management or employee in the research team or employee represents in any way be responsible about the completeness, authenticity and correctness of the sources that are publicly available to prepare the Document. It does not solicit any action based on the materials contained herein and should not be construed as an offer or solicitation to BUY or SELL or SUBSCRIBE to any security. If any person takes any action relying on this Document, shall be responsible solely by himself/herself/themselves for the consequences thereof any claim or demand for such consequences shall be rejected outright by CBC or by any court of law. Analyst Mehedee Hasan Head of Research Moinul Amin Analyst Nahid Hasan Research Associate Afeef Ahmed Research Associate Contact City Bank Capital Resources Limited (subsidiary of The City Bank Limited) 10, Dilkusha, Jibon Bima Tower (1st Floor), Motijheel, Dhaka -1000, Bangladesh Land Line: + (880) Fax: + (880) Web: 5