HNB N Rs.242.5, HNB X Rs.182.0 Sanjeewa Fernando email : sanjeewa@ctclsa.lk Phone : +94 777 427439 04 June 2018 Sri Lanka Banks, Finance & Insurance Key Highlights 1Q2018 Results Update HNB reported a net profit of Rs.4,620mn for 1Q2018 (+21% YoY, EPS growth of +5% YoY due to a 1:6 rights issue), in line with our expectations, driven by improved efficiency HNB s 60% owned insurance subsidiary, HNB Assurance (HASU) s Net Insurance Premium income contribution to the group rose +17% YoY to Rs.1,767mn in 1Q2018 Consequently HNB reported its lowest on record cost to income ratio of 41.5% in 1Q2018 NP forecasts for 2018E and 2019E are revised up by +1% and +2% to Rs.18,961mn (+19% YoY, +9% YoY EPS growth) and Rs.21,265mn (+12% YoY, +12% YoY EPS growth) respectively. Upward revisions are attributable to relatively high growth anticipated in Net II and Non II in the short to medium term HNB voting share outperformed the ASI during past 12 months and past 3 months, rising +3% and +1% vs. ASI s declines of -4% and -2% respectively. The non voting share however underperformed the market by falling -6% and -3% during the respective periods, increasing HNB s voting to non voting discount to 25% levels On revised earnings, HNB voting share trades at a discount to the market and sector on PE multiples of 6.3X (PBV - 0.9X) for 2018E and 5.6X (PBV - 0.8X) for 2019E. HNB is forecast to record ROEs of ~14% - 15% in the short to medium term HNB s relatively high spreads (over the sector) are expected from its improved CASA, and penetration into SME and micro finance related advances in the near term (even though likely to remain under pressure) given HNB s expertise in such sectors. We expect both voting and non-voting shares to only slightly outperform the market on account of anticipated increase in indirect taxes for the sector in the medium term Key Trading Information Vot Non-Vot Market Cap. (US$ mn) 610.8 112.7 Shares in Issue (mn) 395.5 97.2 Estimated Free Float (%) 64.0 99.0 3M Average Daily Vol 264,140 25,537 3M Avg Daily To (US$) 407,220 30,425 12M High / Low (Rs) 270/225 212/182 12M / 3M Price Chg (%) 3.2/0.6-6.4/-2.7 Relative Share Price Movement (%) 120 110 HNB - N 100 HNB - X ASPI 90 01-Jun-17 28-Nov-17 1-Jun-18 Financials - Year to 31 December 2015 2016 2017 2018E 2019E Net Profit (Rs mn) 10,554 14,756 15,947 18,961 21,265 Earnings per Share (Rs) 26.1 35.0 35.5 38.5 43.2 Earnings per Share Growth (%) 13.5 34.1 1.4 8.5 12.1 Price / Earnings Ratio - Voting (X) 8.1 6.4 7.0 6.3 5.6 Price / Earnings Ratio - Non voting (X) 6.8 5.4 5.5 4.7 4.2 Gross Dividends per Share (Rs) 8.5 8.5 8.5 9.6 10.8 Net Book Value per Share (Rs) 186.9 220.6 249.7 277.2 309.6 Price / Book Value - Voting (X) 1.1 1.0 1.0 0.9 0.8 Price / Book Value - Non voting (X) 1.0 0.9 0.8 0.7 0.6 Return on Equity (%) 14.7 17.4 14.5 14.5 14.8 Market Price per Share : Voting (Rs) 212.0 225.0 249.0 242.5 242.5 Market Price per Share : Non voting (Rs) 177.9 190.0 195.0 182.0 182.0 Net Interest Spread (%) 4.5 4.9 4.8 4.6 4.5 Note: Valuations are based on recurring EPS, Adj. for Capital Issues (if any); Historic Ratios are based on Y/E MPS 2018E Debt Repayment Levy is not factored in as we believe that the levy will not be implemented IFRS impact of Rs.4.5bn adjusted as a prior year adjustment for 31 Dec 2018 closing equity balance Forecast dividends are based on management s guidance which is equivalent to a payout of 25% CT CT CLSA SECURITIES (PVT) LIMITED A Member A of the of Colombo the Colombo Stock Stock Exchange Exchange Source: Company financials & CT CLSA 1
The Business 1Q2018 NP +21% YoY, EPS growth of +5% YoY (HNB) is the second largest privately owned Licensed Commercial Bank (LCB) in Sri Lanka after listed Commercial Bank of Ceylon (COMB), with 251 branches and 4,357 employees. HNB accounts for a deposits market share of ~10%, and provides full scale banking services with business focus centered on Trade and MSME Recent Financial Performance HNB reported a net profit of Rs.4,620mn for 1Q2018 (+21% YoY, EPS growth of +5% YoY due to a 1:6 rights issue), in line with our expectations. Profits were driven by improved overall efficiency Quarterly Highlights Key Figures & Ratios (Rs mn) 4Q2017 1Q2017 1Q2018 % YoY % QoQ 2016 2017 % YoY Net Interest Income (Net II) 11,573 10,722 12,156 13.4 5.0 39,089 45,461 16.3 Non Interest Income (Non II) 4,332 4,097 4,994 21.9 15.3 14,277 15,638 9.5 Non Interest Expenses 7,172 7,193 7,110-1.1-0.9 25,773 28,810 11.8 Net Interest Spread (%) Qtr NIS Cum NIS 5.1 4.9 4.7 4.5 13 Qtr Avg: 4.7% 4.3 QoQ Loans & Deposits Growth (%) QoQ Loan growth (%) QoQ Deposit growth (%) 9 7 5 3 1-1 CASA ratio (%) 46 Net Impairment Charges for Loans 1,020 440 1,261 >+ 100.0 23.6 508 3,926 >+ 100.0 Profit Before Tax 7,713 7,187 8,778 22.1 13.8 27,085 28,363 4.7 Net Profit 4,636 3,830 4,620 20.6-0.3 14,756 15,947 8.1 EPS (Rs.) 9.4 9.0 9.4 4.5-0.4 35.0 35.5 1.5 Non II : Net II (%) 37.4 38.2 41.1 2.9 3.6 36.5 34.4-2.1 Cost to Income Ratio (%) 45.1 48.5 41.5-7.1-3.6 48.3 47.2-1.1 Effective Tax Rate (%)* 36.6 43.9 43.0-0.9 6.4 45.0 41.6-3.4 Advances (Rs bn)^ 655.6 627.8 691.1 10.1 5.4 597.5 655.6 9.7 Deposits (Rs bn)^ 718.8 650.3 737.9 13.5 2.7 635.4 718.8 13.1 Advances : Deposits (%)^ 91.2 96.5 93.7-2.9 2.4 94.0 91.2-2.8 Gross NPA Ratio (%)^ 2.3 1.9 2.7 0.9 0.4 1.8 2.3 0.5 CASA Ratio (%)^ 37.2 35.2 37.3 2.1 0.1 35.7 37.2 1.5 Note: Valuations and ratios on a recurring basis; Adjusted for capital issues (if any) * Including Financial Value Added Tax and NBT ^ As at end period Advances grew by a strong +5% QoQ (+10% in 2017) to Rs.691bn as at 31 March 2018, despite declining demand for credit from high credit rated corporates. The management mentioned that ~80% of HNB s advances were index linked Deposits rose +3% QoQ (+13% in 2017) to Rs.738bn as at 31 March 2018 o HNB s CASA ratio improved to 37.3% as at 31 March 2018 from 37.2% as at 31 December 2017 and 34.7% as at 30 September 2017, despite relatively high rate differential between savings and FDs HNB s Net Interest Spreads (NISs) recovered +16bps QoQ to 4.7% in 1Q2018 given improved CASA ratio Source: Company interims 42 38 13 Qtr Avg: 38.6% AEIR & Spreads (%) 1Q2017 1Q2018 bps YoY bps QoQ 2016 2017 bps YoY AEIR Earned on Interest Earning Assets 11.6 11.5-1 -11 10.7 11.8 106 AEIR Paid on Interest Bearing Liabilities -6.8-6.8 3-27 -5.8-7.0-115 34 Net Interest Spread 4.8 4.7-4 16 4.9 4.8-9 Source: CT CLSA A CT HOLDINGS EQUITY GROUP REPORT AND AND CLSA TITLE CLSA GROUP GROUP Date COMPANY COMPANY 2
Quarterly Highlights Non II and Non II : Net II ratio Non II (Rs bn) - LHS 5.1 Non II: Net II (%) 50 4.6 45 4.1 40 3.6 3.1 35 2.6 30 2.1 25 Staff Cadre vs. Staff / Branch ratio Staff cadre Staff / Branch (RHS) 4,550 17.9 17.7 4,450 17.5 17.3 4,350 17.1 4,250 16.9 16.7 4,150 16.5 Non-Interest Income (Non II) rose +22% YoY (and +15% QoQ) to Rs.4,994mn in 1Q2018. Within Non II, net commission and fee income rose +12% YoY to Rs.2,405mn in 1Q2018, with credit cards, remittances, guarantees and trade finance contributing for a majority of income o HNB s 60% owned insurance subsidiary, HNB Assurance (HASU) s Net Insurance Premium income contribution to the group rose +17% YoY to Rs.1,767mn in 1Q2018, partly due to a revaluation gain recognized on the life fund (as per the management) Group s Cost to Income Ratio (CIR) improved to 41.5% in 1Q2018 (lowest recurring CIR on record for HNB) from 45.1% in 4Q2017 (and from 48.5% in 1Q2017). During the past three year period HNB managed to reduce its employee cadre, whilst increasing its number of branches, although synergies emanating from same seem to be bottoming out amid an increase in its staff cadre and employee/branch ratio since early 2017 (refer graph) Asset quality (gross NPA%) worsened QoQ to 2.7% as at 31 March 2018 from 2.3% as at 31 December 2017. HNB s loan loss impairment meanwhile rose +24% QoQ to Rs.1,261mn in 1Q2018, due to adverse weather affected facilities attracting higher impairment. Individual impairment in 4Q2017 was negatively impacted by a ~Rs3bn facility given on oil bunkering relevant to the Hambantota port, turning bad despite a Government (Sri Lanka Port s Authority - SLPA) guarantee According to management estimates, 2018E National Budget proposal on Debt Repayment Levy (DRL on cash transactions) is likely to have an estimated impact of Rs.1.8bn p.a. on HNB w.e.f. 1 April 2018 (for a period of three years) Cost to Income Ratio (CIR - %) CIR Qtr CIR Cum 58 o The banking sector has lobbied against the above proposal and will likely succeed in its lobby, given that LCB systems have to be amended only for a period of three years. The GoSL may however increase the Financial Value Added Tax (for LCBs) in order to gain revenue that was proposed via the DRL 52 46 40 Asset Quality (%) GNPA (%) - RHS 2.0 NNPA (%) 3.7 1.5 The Central Bank of Sri Lanka (CBSL) on 29 Dec 2016 issued guidelines for bank capital requirements. As per the guidelines, LCBs with assets over Rs.500bn should have a Common Equity Tier I (CET-I) of 7.38%, with Tier I (T-I) Capital Adequacy Ratio (CAR) at 8.88% while the Total CAR (T-I+II) above 12.88% as at 31 Dec 2018 Bank s CET-I, T-I and T-I + II CARs stood well above the minimum requirements at 12.8%, 12.8% and 15.8% as at 31 March 2018 respectively, following HNB s successful completion of the rights issue o HNB listed 56mn voting shares and 9.6mn non voting shares on 15 August 2017 whilst the remaining non voting shares (of 2mn) related to rights were listed w.e.f. 7 September 2017 (for a total rights value of Rs.14.5bn). Bank s scrip dividend shares (for 2017) were listed on 09 April 2018. The impact on IFRS 09 on CARs are estimated at -40bps (as per the management) 1.0 2.7 0.5-1.7 Loan Loss Impairment (Rs bn) and Credit Costs (LLI/Net Loans %) Loan Loss Imp. -LLI (Rs bn) 2.0 1.0 0.0 LLI / Net Loans (%) - RHS 0.5 0.3 0.1-0.1-1.0 1Q2015 4Q2015 3Q2016 2Q2017 1Q2018-0.3 CT CT CLSA SECURITIES (PVT) EQUITY LIMITED REPORT A Member A Member TITLE of the of Date Colombo the Colombo Stock Exchange Stock Exchange 3
Outlook & Valuations HNB s NP forecasts for 2018E and 2019E are revised up by +1% and +2% to Rs.18,961mn (+19% YoY, +9% YoY EPS growth) and Rs.21,265mn (+12% YoY, +12% YoY EPS growth) respectively. Upward revisions are attributable to relatively high growth anticipated in Net II and Non II in the short to medium term Given HNB s strong advances growth of +5% QoQ in 1Q2018, we revise up its 2018E forecast credit growth to +15% (slightly above the sector average of ~13% for 2018E), driven by SME, construction and consumption. HNB s 2019E credit growth forecast is also revised up to +12% (given its recent aggressive advances growth), largely driven by consumption and construction HNB s deposit growth forecasts are maintained at +13% YoY for both 2018E and 2019E (+3% growth in 1Q2018). Despite anticipated supply side shocks on the economy, owing to prevailing adverse weather conditions, we still believe the banking system will be able to sustain a sector deposit growth rate of around +13% YoY in the near to medium term The increased investment (in advances) requirement of HNB is anticipated to be funded via market borrowings and thus we have revised borrowing forecasts to +28% and +14% for 2018E and 2019E respectively Non II (Rs bn) Fees & Com. Income Trading & Other Income 2017 2018E 2019E 9.0 10.0 10.6 0.3 0.5 0.5 Ins Premium 6.3 7.3 7.7 Total 15.6 17.7 18.9 HNB: TTM PER (x) 8.0 7.5 7.0 6.5 6.0 5.5 5.0 HNB - N HNB - X Source: CT CLSA 4.5 01-Jun-17 30-Nov-17 1-Jun-18 Source: CT CLSA HNB: Non Voting to Voting Discount % 26 23 19 16 HNB s NIS forecast for 2018E is revised up by +10bps to 4.6% given better than expected 1Q2018 spreads despite anticipated margin pressure in the short to medium term on account of forecast increase in competition for deposits. We however maintain HNB s forecast NIS at 4.5% levels for 2019E, given anticipated trend on competition for deposits in the medium term HNB s Non II forecast for 2018E is revised up to Rs.17.7bn (+14% YoY) and to Rs.18.9bn (+6% YoY, off a high base) for 2019E, on account of anticipated growth in fees, commission and insurance premium income HNB s opex growth forecasts are maintained at +10% for 2018E and +9% for 2019E (vs. +12% in 2017) on account of moderating wage pressures in the economy HNB s gross NPA ratio is revised up (by 80bps) to 2.8% as at end 2018 while its 2019 Y/E NPA ratio is forecast to improve to 2.1% (still revised up by 30bps) given recent NPA trends. Even though IFRS 9 implementation will likely result in an estimated ~Rs.4.5bn for 2018E (for HNB), the banking sector is allowed to adjust the respective impact as a prior year adjustment. As a result, nominal ROEs may have a positive impact. HNB s overall credit cost forecasts are revised up to 65bps each from 40bps and 50bps in 2018E and 2019E respectively HNB s ETRs are forecast at 45% for 2018E and 2019E, in line with the sector average. We have however not factored in the potential increase in Financial VAT for both years HNB voting share outperformed the ASI during past 12 months and past 3 months, rising +3% and +1% vs. ASI s declines of -4% and -2% respectively. The non voting share however underperformed the market by falling -6% and -3% during the respective periods, increasing HNB s voting to non voting discount to 25% levels On revised earnings, HNB voting share trades at a discount to the market and sector on PE multiples of 6.3X (PBV - 0.9X) for 2018E and 5.6X (PBV - 0.8X) for 2019E. HNB is forecast to record ROEs of ~14% - 15% in the short to medium term HNB s relatively high spreads (over the sector) are expected from its improved CASA, and penetration into SME and micro finance related advances in the near term (even though likely to remain under pressure) given HNB s expertise in such sectors. We expect both voting and non-voting shares to only slightly outperform the market on account of anticipated increase in indirect taxes for the sector in the medium term 12 1-Jun-17 29-Nov-17 1-Jun-18 A CT HOLDINGS EQUITY GROUP REPORT AND AND CLSA TITLE CLSA GROUP GROUP Date COMPANY COMPANY 4
HNB Forecast Financials and Relative Peer Valuations Key Figures : Income Statement (Rs mn) Key Figures : Balance Sheet (Rs bn) 2017 % YoY 2018E^ % YoY^ 2018E % YoY 2019E^ % YoY^ 2019E % YoY Net Interest Income (Net II) 45,461 16.3 47,989 5.6 49,658 9.2 53,990 8.7 55,906 12.6 Non Interest Income (Non II) 15,638 9.5 17,295 10.6 17,748 13.5 18,724 5.5 18,853 6.2 Non Interest Expenses 28,810 11.8 28,350 10.0 28,350 10.0 30,901 9.0 30,901 9.0 Impairment Charges 3,926 672.6 2,754-29.9 4,581 16.7 3,786-17.4 5,195 13.4 Profit Before Tax 28,363 4.7 34,181 20.5 34,475 21.5 38,026 10.3 38,663 12.1 Net Profit 15,947 8.1 18,799 17.9 18,961 18.9 20,914 10.3 21,265 12.1 Earnings per Share (Rs) 35.5 1.4 38.2 7.6 38.5 8.5 42.5 10.4 43.2 12.1 Non II : Net II (%) 34.4-2.1 36.0 1.6 35.7 1.3 34.7-1.0 33.7-2.0 Cost to Inc. Ratio CIR (%) 47.2-1.1 43.4-3.7 42.1-5.1 42.5 0.4 41.3-0.8 ETR Incl.Fin. VAT + NBT (%) 41.6-3.4 45.0 3.4 45.0 3.4 45.0 0.0 45.0 0.0 Gross NPA Ratio (%) 2.3 0.5 2.0-0.3 2.8 0.5 1.8-1.0 2.1-0.8 2017 %YoY 2018E^ % YoY^ 2018E % YoY 2019E^ % YoY^ 2019E % YoY Total Loans and Advances 656 9.7 721 10.0 754 15.0 829.4 10.0 844 11.9 Other Interest Earning Investments 262 0.7 304 16.2 304 16.2 357 17.4 357 17.4 Total Assets 1,008 11.8 1,120 11.2 1,153 14.4 1,250 8.4 1,302 12.9 Deposits 719 13.1 812 13.0 812 13.0 918 13.1 918 13.1 Other Interest Bearing Borrowings 140-8.4 147 5.0 180 28.3 154-14.4 205 13.9 Shareholder Funds 126 33.2 136* 8.4 135 7.8 151 11.8 151 11.8 ^ Previous forecast Source : HNB Financials, CT CLSA Note: Valuations and ratios on a recurring basis; Adjusted for the rights issue 2018E Debt Repayment Levy of Rs.1.8bn p.a. is not factored in as we believe that the levy may not be implemented in the near term *IFRS 9 estimated impairment impact of Rs.4.5bn is adjusted as a prior year adjustment as at 31 Dec 2018E AEIR and Spread Forecast (%) 2017 bps YoY 2018E bps YoY 2019E bps YoY AEIR Earned on Interest Earning Assets 11.8 106 11.4-37 11.5 10 AEIR Paid on Interest Bearing Liabilities -7.0 115-6.8-19 -7.0 20 Net Interest Spread 4.8-9 4.6-18 4.5-10 Group: DuPont Analysis 2017 YoY 2018E YoY 2019E YoY Asset Utilization Ratio (%) 12.5 1.0 12.1-0.5 12.1 0.1 Expense Ratio (%) 9.6 1.3 8.9-0.7 9.0 0.1 Tax Ratio (%) 1.3-0.2 1.4 0.1 1.4 0.0 Return On Assets (%) 1.7-0.1 1.8 0.1 1.7 0.0 Leverage (X) 8.7-1.1 8.3-0.4 8.6 0.3 Return On Equity (%) 14.5-2.9 14.5 0.0 14.8 0.3 Relative Valuations vs. Select Licensed Commercial Banks - 2018E HNB N COMB N SAMP NDB SEYB-N Market Price per Share (Rs) 242.5 132.0 304.3 84.5 136.0 Earnings per Share (Rs) 38.5 17.0 58.1 14.8 26.0 Earnings per Share Growth (%) 8.5-1.8 3.0 12.8 17.6 Price Earnings Ratio (X) 6.3 7.9 5.2 5.8 5.2 Price Earnings Growth Ratio (X) 0.7 N/A 1.7 0.5 0.3 Price to Book Value (X) 0.9 1.1 1.0 0.8 0.7 Gross Dividend Yield (%) 4.0 5.2 6.2 4.9 9.2 Return on Equity (%) 14.5 16.2 19.2 14.3 12.9 Total Assets (Rs bn)^ 1,044.3 1,230.7 826.7 415.4 400.9 Total Deposits (Rs bn)^ 737.9 913.1 634.6 310.9 283.8 Branches^ 251 280 229 168 107 ^As at 31 Mar 2018 Source: Company Financials and CT CLSA CT CT CLSA SECURITIES (PVT) EQUITY LIMITED REPORT A Member A Member TITLE of the of Date Colombo the Colombo Stock Exchange Stock Exchange 5
Major Voting Shareholder Movements Major Shareholder Movements as at 31 March 2018 No. Name No. of Shares % Change (Shares)* Comment 1 Employees Provident Fund 38,544,738 9.8 GoSL Related Party 2 Sri Lanka Insurance Corporation Ltd-Life Fund 32,693,132 8.3 GoSL Related Party 3 Milford Exports (Ceylon) (Pvt) Limited 31,270,422 7.9 4 Stassen Exports (Pvt) Limited 27,104,164 6.9 5 Mr. S.E. Captain 25,745,495 6.5 Director Related Party** 6 HSBC Intl Nominees Ltd-JPMLU-Franklin Templeton Investment Funds 21,588,566 5.5 +4,030 7 Sonetto Holdings Limited. 19,436,026 4.9 8 Sri Lanka Insurance Corporation Ltd-General Fund 16,740,449 4.2 GoSL Related Party 9 Distilleries Company of Sri Lanka Plc 12,126,746 3.1 10 National Savings Bank 11,346,652 2.9 GoSL Related Party 11 Standard Chartered Bank Singapore S/A HL Bank Singapore Branch 7,422,269 1.9 12 Ms. L.A. Captain 7,390,583 1.9 +1,550,790 RBC Investor Services Bank-Coeli SICAV i- 13 6,774,810 1.7 Frontier Markets Fund 14BNYM SANV Re-CF Ruffer Total Return Fund 6,220,950 1.6 Director Related Party** HSBC Intl Nom Ltd-HSBC Bank PLC-CMG First 15 5,638,975 1.4 state global umbrella Fund PLC 16 Citibank Newyork S/A Norges Bank Account 2 5,038,142 1.3 17 BNYM SANV Re-CF Ruffer Absolute Return Fund 4,175,684 1.1 18 HSBC Intl Nominees Ltd-JPMLU-T Rowe Price Funds Sicav 3,573,800 0.9-375,496 19 Mrs. C.S. De Fonseka 3,536,294 0.9 20 HSBC International Nominees Ltd-JPMCB- Templeton Global Investment Trust-Templeton Emerging Markets s 3,397,647 0.9 Total Top 20 289,765,544 73 *Change since 28 February 2018 ^Mr. Harry Jayawardene connected parties: Total voting rights limited to 10% of the Bank w.e.f. 15 Mar 2012 **Related party to Mr. Rusi Captain who is a Director at HNB: Captains collectively own 8.0% of voting share capital Adjusted for the Scrip Dividend of 1:134.1667 for FY2017 A CT HOLDINGS EQUITY GROUP REPORT AND AND CLSA TITLE CLSA GROUP GROUP Date COMPANY COMPANY 6
Research Sanjeewa Fernando sanjeewa@ctclsa.lk +94 77 742 7439 Chayanika Ranasinghe chayanika@ctclsa.lk +94 77 237 9731 Yasas Wijethunga yasas@ctclsa.lk +94 77 053 2059 Shahan De Silva shahan@ctclsa.lk Subecca Sothylingam subecca@ctclsa.lk Madhusha Sivanathan madusha@ctclsa.lk Shahana Kanagaratnam shahana@ctclsa.lk Trading & Sales Lasantha Iddamalgoda lasantha@ctclsa.lk +94 11 255 2295 +94 77 778 2103 Dyan Morris dyan@ctclsa.lk +94 11 255 2320 +94 77 722 4951 Manura Hemachandra manura@ctclsa.lk +94 77 261 4797 Ryan Janz ryan@ctclsa.lk +94 77 547 9233 Rosco Todd rosco@ctclsa.lk +94 77 262 7233 Dhammika de Silva dhammika@ctclsa.lk +94 77 356 2699 Arusha Michael arusha@ctclsa.lk +94 77 395 6765 Nuwan Madusanka nuwan@ctclsa.lk +94 76 858 9722 Consultant / Sales Rohan Fernando rohan@ctclsa.lk +94 11 255 2297 +94 76 778 2101 Disclaimer : This document has been prepared and issued by CT CLSA Securities (Pvt) Ltd. on the basis of publicly available information, internally developed data and other sources, believed to be reliable. Whilst all reasonable care has been taken to ensure that the facts stated are accurate and the opinions given are fair and reasonable, neither CT CLSA Securities (Pvt) Ltd. nor any director, officer or employee, shall in any way be responsible for the contents. CT CLSA Securities (Pvt) Ltd. may act as a Broker in the investments which are the subject of this document or in related investments and may have acted upon or used the information contained in this document, or the research or analysis on which it is based, before its publication. CT CLSA Securities (Pvt) Ltd., its directors, officers or employees may also have a position or be otherwise interested in the investments referred to in this document. This is not an offer to buy or sell the investments referred to in this document. It is not intended to provide professional, investment or any other type of advice or recommendation and does not take into account the particular investment objectives, financial situation or needs of individual recipients. Before acting on any information in this publication/communication, you should consider whether it is suitable for your particular circumstances and, if appropriate, seek your own professional advice, including tax advice. The markets in which CT CLSA Securities (Pvt) Ltd. operates may not have regulation governing conflict of interest over preparation and publication of research reports (including but not limited to disclosure of perceived or actual conflict of interest) as may be found in more developed markets. Please contact your investment advisor / analyst should you require further information over the relevant regulation and particular disclosure over perceived or actual conflict of interest. CT CLSA SECURITIES (PVT) LTD A Member of the Colombo Stock Exchange 4-14 Majestic City, 10 Station Road, Colombo 4, Sri Lanka General: to 2294 Facsimile: +94 11 255 2289 Email: info@ctclsa.lk Web: www.ctclsa.lk CT CT CLSA SECURITIES A CT (PVT) HOLDINGS EQUITY LIMITED GROUP REPORT A Member AND CLSA A Member TITLE of GROUP the of Date Colombo COMPANY the Colombo Stock Exchange Stock Exchange 7