Price Multiples/Ratios FY-2013 FY-2012 FY-2011 FY-2010 FY-2009

COMPANY PROFILE DANGOTE SUGAR REFINERY PLC commenced business in March 2000 as the sugar division of Dangote Industries Limited. DSR is a market leader in the Nigerian Sugar industry with operations spanning over 13 years. The Company is primarily into refining, marketing and distribution of raw sugar for both domestic and industrial consumptions. DSR has an installed capacity of 1.44million metric tons production facility, operates at near 75 per cent of its installed capacity and controls about 70 per cent of the domestic market share (by sales revenue). DSR also has presence in Algeria with investment in Green Field Refinery Project which has a capacity of 1.25m Mtpa. DSR is the largest sugar refinery in sub Saharan Africa and second largest in the world. DSR acquired Savannah Sugar Ltd in December 2012 in order to achieve its growth strategy of becoming a global force in sugar production. Financial Highlights (Five-Year Summary) FY-2013 FY-2012 FY-2011 FY-2010 FY-2009 5-Year Growth (%) Turnover (Nbn) 103.153 106.888 107.218 89.980 82.395 5.78 PAT (Nbn) 10.845 10.796 7.403 11.282 13.185-4.77 Net Assets (Nbn) 46.977 46.269 39.133 39.089 41.612 3.08 Total Assets (Nbn) 83.159 50.530 42.886 42.651 43.668 17.47 Source: DSR s Annual Report & FCSL Research As shown in the above five-year summary table, a steady growth was maintained by DSR between 2009 and 2013 as revenue grew by 5.78% during the five-year period. PAT growth had a negative return of - 4.77% due to declining income, DSR is yet to record significant PAT as it did in 2009. However, PAT has been on a gradual increase after reaching a low of N7.4bn in 2011. The company s net assets grew marginally by 3.08% within a five-year period, while its assets experienced the most growth by 17.47%. Per Share Data FY-2013 FY-2012 FY-2011 FY-2010 FY-2009 EPS 0.90 0.90 0.62 0.94 1.10 DPS 0.60 0.50 0.30 0.60 1.00 Div Yield (%) 7.41 n/a n/a n/a n/a BVPS 3.86 3.86 3.26 3.26 3.47 Price Multiples/Ratios FY-2013 FY-2012 FY-2011 FY-2010 FY-2009 Shares Outstanding (bn) 12.000 12.000 12.000 12.000 12.000 P/E 8.96 n/a n/a n/a n/a P/BV 1.81 n/a n/a n/a n/a PAT MARGIN 10.51% 10.10% 6.90% 12.54% 16.00% ROE 23.09% 23.33% 18.92% 28.86% 31.69% ROA 13.04% 21.37% 17.26% 26.45% 30.19% Dividend Payout Ratio 66.39% 55.58% 48.63% 63.82% 91.01%

Valuation Metrics Recommendation BUY Target Price 10.00 Current Price 8.10 Downside/Upside to Price +23.46% YTD -28.32% Shares Outstanding (bn) 12.00 Market Cap. (N bn) 97.2 Q2 14 EPS (N) 0.57 PE Ratio 14.22 FY 13 EPS 0.90 FYE 14 EPS 1.14 Shareholders % Holding Dangote Industries Ltd 67.70% Aliko Dangote 5.4% Public Float 26.9% Rebased Dangsugar Share Price vs NSE ASI 1.20 1.00 0.80 0.60 0.40 0.20 DANGSUGAR 0.00 INDEX UNAUDITED REPORT FOR THE PERIOD ENDED JUNE 30, 2014 (Q2) 2014 N 000 2013 N 000 (%) Profit & Loss Account Revenue 49.601 55.034-9.87 Cost of Sales 36.642 39.606-7.48 Operating Expenses 2.925 6.570-55.48 PBT 10.263 10.859-5.49 PAT 6.835 7.013-2.54 Balance Sheet Jun-14 Dec-13 Total Asset 88.812 89.545-0.82 Shareholders' Fund 46.839 47.395-1.17 Per Share Data 2014 2013 Y-o-Y (%) Current Price (22.09.2014/2013) 8.10 10.75-24.65 EPS 0.57 0.58-2.54 Earnings Yield (%) 3.90 3.95-1.17 BVPS 8.10 10.75-24.65 Price Multiples / Ratios 2014 2013 Shares Outstanding (bn) 12.000 12.000 P/E 14.22 18.39 P/BV 2.08 2.72 PAT MARGIN 13.78% 12.74% ROE 14.59% 14.80% ROA 7.70% 7.83% Half year 2014 financials of DSR showed a flat growth in performance when compared to the corresponding period of 2013. A 9.87% decline in revenue from N55.034bn in 2013 to N49.601bn in 2014 reflected lower selling price and gas shortages disruptions at its Apapa refinery during the period. Lower sugar costs and other cost optimization strategies mitigated the impact of higher fuel costs over the period. Cost of sales reduced by -7.48% compared with the corresponding period, this was as a result of reduction in products promotions/advertising and distribution cost. There is currently a glut in the international sugar market which invariably will cause sugar prices to decline further and at such local prices are also expected to reduce. Furthermore, security situation in the northern part of the country might affect its production and distribution channels, as the north remains a dominant market for the company s sales. In the medium to long term, DSR s financials is expected to improve considerably in near term due to anticipated increase in local demand for its products as a result of the ban on imported cubed and granulated sugar by the Federal Government as a way of protecting and encouraging local contents consumption. This policy in turn will yield to increased capacity utilization for DSR. Our valuation methods suggest that DSR is valued at a target price of N10.00 which is about +23.46% upside in price compared with the current market price of N8.10.

COMPANY PROFILE STERLING BANK PLC is a full service national commercial bank in Nigeria with focus on consumer banking, investment banking and trade finance. Its market segment includes retail, corporate and institutional clients. It also provides wholesale banking services and offers wide range of banking products through its 168 branch networks nationwide, over 5,000 Point of Sale (POS) terminals, 440 automated teller machines (ATMs), telephone banking and other e- banking channels services. The bank recently raised N12.48 billion through a rights issue which was 103.3% oversubscribed. Valuation Metrics Recommendation BUY Target Price 3.50 Current Price (22-Sep-2014) 2.14 Downside/Upside to Price +63.55% YTD -14.40% Shares Outstanding (bn) 21.593 Market Cap. (N bn) 46.209 FY EPS 0.52 Q2 14 EPS 0.26 PE Ratio 8.36 FYE2014 0.52 Shareholders % Holding State Bank of India 11.81 Dr. Mike Adenuga 7.50 SNNL/AMCON 7.37 Ess-ay Investments Ltd 6.28 STB Building Society Ltd 5.02 Public Float 62.02 1.20 1.00 0.80 0.60 0.40 0.20 0.00 Rebased Sterlnbank Share Price vs NSE ASI 02/01/2014 02/02/2014 02/03/2014 02/04/2014 02/05/2014 02/06/2014 02/07/2014 02/08/2014 02/09/2014 STERLNBANK INDEX UNAUDITED REPORT FOR THE PERIOD ENDED JUNE 30, 2014 (Q2) Financial Highlights 2014 N 000 2013 N 000 Y-o-Y (%) Profit & Loss Account Gross Earnings 48.697 41.855 16.35 Interest Income 37.435 31.080 20.45 Interest Expense 16.154 15.905 1.57 Net Interest Income 21.281 15.174 40.25 Other Operating Income 11.261 10.774 4.52 Operating Expenses 23.811 18.527 28.52 PBT 6.337 6.272 1.04 PAT 5.527 5.922-6.67 Balance Sheet Jun-14 Dec-13 Loans & Advances 321.806 321.743 0.02 Total Asset 731.096 707.797 3.29 Deposits 556.279 570.511-2.49 Shareholders' Fund 63.829 63.458 0.58 Gross earnings rose by 16.3% to N48.7bn as against N41.9bn attained in Q2 2013. Net Interest Income recorded a big leap by 40.2% to N21.28bn. Sterling bank s earnings for half year 2014 was driven largely by interest income, which contributed 78% in Q2 2014. Operating expenses went up by a significant percentage of 28.5% to N23.8bn from N18.5bn. This was attributed to the bank s on-going investments in branch refits and expansion and rollout of alternative channels. Pre-tax profits rose marginally by about 15 while PAT declined to 6.6% to N5.52bn. The bank grew its loan book marginally between December 2013 and June 2014 by 0.02%. The bank s balance sheet witnessed a marginal increase of 3.29% between December 2013 and June 2014.

Price Multiples/Ratios 2014 2013 P/E 9.06 6.97 P/BV 0.08 0.09 PAT MARGIN 11.35% 14.15% ROE 0.83% 0.92% ROA 0.76% 0.84% Loan to Deposit Ratio 57.85% 56.40% Cost-to-income Ratio 73.2% 71.4% Despite the biting effect of the tight liquidity policy of the apex bank, Sterling Bank has been able to moderate the anticipated negative impacts of regulatory pronouncements on its financial performance. The additional capital funding and the drive for financial inclusion in financial intermediation guarantee a sustainable growth in interest and other non-interest income. The bank also hope to generate more income as it begins it private banking business targeted at high net worth individuals. Additionally, reintroduction of the ATM service charge fee of N65 by the apex bank will boost the bank s income statement in the areas of fees and commission. Albeit gradual phasing out of Commission on Turnover (COT) by the Central bank of Nigeria (CBN) that will lead to reduction in the growth of non-interest income, the bank is poised for growth as evidenced in its drive to build its loan books (FY 2013 loans and advances grew by 54.71% to N407.34bn from N263.29bn in 2012) From our price movement chart, the NSE ASI out-performed Sterling Bank moving higher than the bank s share price (as reflected in our rebased chart above). This can be attributed to low investors sentiments towards banking stocks in general. Our valuation suggests that the share price of Sterling Bank Plc is currently trading at an upside of 63.55% to our target price of N3.50, though YTD, the stock is down by -14.4%. We strongly recommend a BUY on Sterling Bank Plc.

COMPANY PROFILE HONEYWELL FLOUR MILLS PLC is part of the Honeywell Group conglomerate which specialises in select business segment of the Nigerian economy, namely; foods and agro-allied, real estate, energy services and infrastructure. The company is a foremost indigenous company on the Nigerian Stock Exchange in the consumer goods sector with the ticker symbol HONYFLOUR. HONYFLOUR is into manufacturing and marketing of wheat based products including flour, semolina, whole wheat meal, noodles and pasta. Valuation Metrics Recommendation BUY Target Price 4.10 Current Price (22-Sep-2014) 4.02 Downside/Upside to Price +1.99% YTD 1.44% Shares Outstanding (bn) 7.93 Market Cap. (N bn) 31.878 EPS (N) 0.42 PE Ratio 9.51 Shareholders % Holding Siloam Global Services Ltd 75 First Bank of Nigeria Plc 7 BGL Sec urities Ltd/First Bank of Nig 6 Public Float 12 1.40 1.20 1.00 0.80 0.60 0.40 0.20 0.00 Rebased HonyFlour Share Price vs NSE ASI HONYFLOUR INDEX Audited Result (FY 2014) 2014 N 000 2013 N 000 % Profit & Loss Account Revenue 55.084 45.709 20.51 Cost of Sales 44.626 37.788 18.10 Operating Expenses 5.281 4.344 21.57 PBT 4.237 3.814 11.09 PAT 3.351 2.843 17.87 Balance Sheet Total Asset 63.830 55.437 15.14 Shareholders' Fund 20.605 18.553 11.06 Source: Company data & FCSL Research HONYFLOUR s financial results for the year ended March 31, 2014 depicts growth on all fronts. Revenue grew by 20.5% to N55.084bn in 2014. The revenue growth was mainly driven by increased production levels and intensive advertising/marketing campaign especially in products like Honeywell Noodles which has risen to prominence from obscurity among children. Cost of sales rose by 18.10% compared with 19.74% recorded in FY2013. OPEX also increased by about 21%. Both PBT and PAT achieved topline growths of 11.09% and 17.87%. Net profit margin declined to 6.08% from 6.22% in FY2013 for the second consecutive year.

Financial Highlights (Five-Year Summary) FY-2014 FY-2013 FY-2012 FY-2011 FY-2010 5-Year Growth (%) Turnover (N bn) 44.626 45.709 32.949 29.310 28.483 17.93 PAT (N bn) 3.351 2.843 2.6 2.412 1.948 14.52 Net Assets (N bn) 20.605 18.553 17.385 15.815 14.275 9.61 Total Assets (N bn) 63.83 55.437 49.02 32.983 25.527 25.75 HONYFLOUR s five-year financial summary shows the company s business growth strategy. Revenue has been growing steadily on a compounded annual growth rate of 17.93% while its post-tax profits have seen growth of 14.52% which is commendable considering the high level of operating expenses in the manufacturing industry. Both Shareholders funds and total assets also achieved growths of 9.61% and 25.75% respectively. Price Multiples/Ratios FY-2014 FY-2013 FY-2012 FY-2011 FY-2010 5-Year Growth (%) Shares Outstanding (bn) 7.93 7.93 7.93 7.93 7.93 P/E 9.51 n/a n/a n/a n/a P/BV 1.47 n/a n/a n/a n/a EPS 0.42 0.36 0.33 0.30 0.25 DPS 0.17 0.16 0.15 0.13 0.11 11.50 BVPS 2.74 2.98 2.20 1.92 2.09 Dividend Payout Ratio 40.23 44.63 45.75 42.74 44.78 PAT Margin % 6.08 6.22 7.89 8.23 6.84 ROE (%) 16.26 15.32 14.96 15.25 16.26 ROA (%) 5.25 5.13 5.30 7.31 5.25-2.94 The company currently trades on FY2014 earnings multiples and book value per share of 9.51 and 2.74 respectively. Since listing its shares on the Nigerian Bourse, the company has consistently paid dividend every financial year. Its dividend growth over a fiver-year period is 11.50%. However, over the same period, dividend payout ratio has declined by -2.94%. HONYFLOUR s growth opportunities hinged on improved perception of its brand, growing market share and regional expansion opportunities outside the borders of Nigeria. Additionally, the growing fast food restaurants across Nigeria supported by preferences for eating out among Nigerians has driven up demand for pastries and other flour based products. HONYFLOUR is expected to benefit from these aforementioned opportunities. Based on our valuation, HONYFLOUR s share price is currently trading at a discount of 1.99% to our target of N4.10 and we therefore place a BUY recommendation on it.

COMPANY PROFILE CEMENT COMPANY OF NORTHERN NIGERIA (CCNN) PLC is a company that engages in the construction materials industry sector. The Company is primarily involved in the manufacture and sale of cement. CCNN operates under the brand name Sokoto Cement. Its existing cement grade level is 32.5. In line with evolving competition within the industry, the company recently launched a $300 (N48bn) expansion project to modernise and increase the capacity of its 30- year old cement plant. The expansion would increase the company s installed capacity by 200 percent to 1.5 million metric tonnes. The majority shareholder Damnaz Cement Company who holds 50.72% equity stake is providing the funds for the project due to the company s inability to float equity issue in the primary issue market as a result of lingering investors apathy. Financial Highlights (Five-Year Summary) FY-2013 FY-2012 FY-2011 FY-2010 FY-2009 5-Year Growth (%) Turnover (Nbn) 15.787 15.125 13.915 11.181 11.868 7.39 PAT (Nbn) 1.423 1.196 2.304 1.269 1.812-5.86 Source: CCNN s Annual Report & FCSL Research Over a five year period, turnover achieved a growth of 7.39% compounded annually, while post-tax profits returned a negative growth rate of -5.86% due to inconsistency in reported income. The negative growth maybe attributed to high operating costs (unstable power). Per Share Data FY-2013 FY-2012 FY-2011 FY-2010 FY-2009 EPS 1.33 0.95 1.83 1.01 1.44 DPS 0.70 Nil 0.45 Nil Nil Div Yield (%) 4.84 n/a n/a n/a n/a The company only declared dividend twice within the five-year period Price Multiples/Ratios FY-2013 FY-2012 FY-2011 FY-2010 FY-2009 Shares Outstanding (bn) 1.256 1.256 1.256 1.256 1.256 P/E 12.75 n/a n/a n/a n/a P/BV n/a n/a n/a n/a PAT MARGIN 9.01% 7.91% 16.56% 11.35% 15.27% ROE 23.09% 23.33% 18.92% 28.86% 31.69% ROA 13.04% 21.37% 17.26% 26.45% 30.19% Dividend Payout Ratio 61.78% Nil 24.53% Nil nil

Valuation Metrics Recommendation BUY Target Price 16.00 Current Price (22-Sep-2014) 14.45 Downside/Upside to Price +10.73% YTD 22.98% Shares Outstanding (bn) 1.257 Market Cap. (N bn) 18.149 FY EPS 1.13 Q2 14 EPS 1.26 PE Ratio 11.44 FYE2014 2.52 Shareholders % Holding Damnaz Cement Company 50.72 Nasdal Bap Nigeria Limited 11.48 Public Float 37.80 UNAUDITED REPORT FOR THE PERIOD ENDED JUNE 30, 201 (Q2) 2014 N 000 2013 N 000 Y-o-Y (% Profit & Loss Account Revenue 9.395 8.811 6.6 Cost of Sales 5.711 5.746-0.6 Operating Expenses 1.324 2.348-43.6 PBT 2.336 1.223 91.0 PAT 1.588 0.832 90.8 Balance Sheet Jun-14 Dec-13 Total Asset 17.641 15.058 17.1 Shareholders' Fund 9.771 9.062 7.8 Per Share Data 2014 2013 Y-o-Y (%) Current Price (22.09.2014/2013) 14.45 9.09 58.97 EPS 1.26 0.66 90.87 Earnings Yield (%) 8.74 7.28 20.07 BVPS 7.78 7.21 7.82 1.50 1.00 0.50 0.00 02/01/2014 02/02/2014 02/03/2014 Rebased CCNNShare Price vs NSE ASI 02/04/2014 02/05/2014 02/06/2014 02/07/2014 02/08/2014 02/09/2014 CCNN INDEX Price Multiples/ 2014 Ratios 2013 Shares Outstanding (bn) 1.257 1.257 P/E 11.44 13.73 P/BV 1.86 1.26 PAT MARGIN 16.90% 9.44% ROE 16.25% 9.18% ROA 9.00% 5.53% For second quarter 2014 earnings report, CCNN s revenue increased by a modest 6.63% to N9.395bn, while Cost of Sales declined marginally by -0.61%, this can be attributed to the effective cost measures employed by the company. A significant topline growth was achieved by the company in PAT in Q2:14 as profits rose by 90.87% to N1.588bn from N0.832bn in the corresponding year. We anticipate that the increased installed capacity would enable the company maintain its current market share and also expand into new markets. CCNN has carved a niche in three northern states as the major supplier of cement in the Sokoto, Kebbi and Zamfara State axis. Recent company initiatives to boost capacity suggest that the company wants to remain competitive and reduce cost to the barest minimum. Latest results from the company show improved profitability in earnings hence our decision to place a BUY recommendation on CCNN as it currently trades at +10.73% upside to its market price. The share price has climbed by22.98% YTD, thus out-performing the NSE ASI benchmark which has seen a reversal in growth of -1.26%. Our fair value for this stock is N16 and it is currently trading at N14.