Thailand Company Guide Version 6 Bloomberg: BH TB Reuters: BH.BK Refer to important disclosures at the end of this report DBS Group Research. Equity 4 May 2017 HOLD (Upgrade from FULLY VALUED) Last Traded Price ( 3 May 2017): Bt177 (SET : 1,564.12) Price Target 12-mth: Bt160 (-9% downside) Potential Catalyst: Potential revocation of recent healthcare budget cut Where we differ: We are more bearish than consensus Analyst Apichaya KETRUTTANABORVORN +66 2657 7823 apichayak@th.dbsvickers.com What s New Reported 1Q17 earnings of Bt1.0bn (+3% y-o-y, 22% q-o-q) despite 4% decrease in revenue This was on the back of improving margins, driven by 5%price increase and 6.3% increase in revenue intensity of Thai patients Potential revocation of recent healthcare budget cut in UAE Upgrade from FULLY VALUED to HOLD with an unchanged TP of Bt160, based on DCF valuation Price Relative 265.0 215.0 165.0 115.0 Bt 65.0 90 May-13 May-14 May-15 May-16 May-17 (LHS) Relative SET (RHS) Relative Index Forecasts and Valuation FY Dec (Bt m) 2015A 2016A 2017F 2018F Revenue 17,660 17,915 18,830 20,866 EBITDA 5,298 5,596 6,011 6,708 Pre-tax Profit 4,251 4,378 4,936 5,605 Net Profit 3,436 3,626 3,971 4,506 Net Pft (Pre Ex.) 3,390 3,604 3,971 4,506 Net Pft Gth (Pre-ex) (%) 26.3 6.3 10.2 13.5 EPS (Bt) 4.72 4.98 5.45 6.18 EPS Pre Ex. (Bt) 4.65 4.95 5.45 6.18 EPS Gth Pre Ex (%) 26 6 10 13 Diluted EPS (Bt) 4.72 4.98 5.45 6.18 Net DPS (Bt) 2.35 2.50 2.72 3.09 BV Per Share (Bt) 18.0 20.3 22.9 26.4 PE (X) 37.4 35.5 32.4 28.5 PE Pre Ex. (X) 37.9 35.7 32.4 28.5 P/Cash Flow (X) 34.3 25.0 24.2 21.4 EV/EBITDA (X) 23.9 22.4 20.7 18.0 Net Div Yield (%) 1.3 1.4 1.5 1.8 P/Book Value (X) 9.8 8.7 7.7 6.7 Net Debt/Equity (X) CASH CASH CASH CASH ROAE (%) 28.2 26.0 25.2 25.1 Earnings Rev (%): 0 0 Consensus EPS (Bt): 5.07 5.53 Other Broker Recs: B: 10 S: 8 H: 11 Source of all data on this page: Company, DBSVTH, Bloomberg Finance L.P 390 340 290 240 190 140 Eyeing reversal of budget cut in Middle East Upgrade to HOLD with an unchanged TP of Bt160. We are impressed with BH s margin enhancement in 1Q17 and the potential for a recovery of Middle East patients due to the healthcare budget cut reversal. However, we prefer to wait for the actual recovery of the Middle East patient group before revising our forecast. Thus, we upgrade our rating on BH from FULLY VALUED to HOLD with an unchanged DCF-based TP of Bt160. Light at the end of the tunnel from healthcare budget cut reversal in the Middle East. BH has been hit by the decline in Middle East patients since FY16, as revenue from such patients accounts for 20% of BH s total revenue. On 27 April 2017, the Health Authority of Abu Dhabi (HAAD) has waived the 20% copayment for holders of the Thiqa medical insurance card and will be completely covered when visiting a private healthcare facility in UAE capital. The HAAD s potential move to revoke the 50% co-payment for patients who visit a private healthcare facility overseas and 20% co-payment for the patient who visit a private healthcare facility overseas in the service that is not available in the UAE, could provide an upside surprise for BH. Note that revenue contribution from the UAE (that comes with high revenue intensity) accounted for 9% of BH s revenue. BH's management maintains its revenue guidance of 0% topline growth with +/- 2% target range (vs 8-10% revenue growth guidance before FY15). Management commented that it might revise up its revenue growth guidance if there is any healthcare budget cut reversal in the UAE and other Middle East countries. Valuation: We upgrade our rating from FULLY VALUED to HOLD with an unchanged TP of Bt160 that is based on DCF valuation (WACC: 8.4%, TG: 2%). Key Risks to Our View: The major risk factors for BH are weak oil prices, global economic slowdown and Thailand s political instability. At A Glance Issued Capital (m shrs) 729 Mkt. Cap (Btm/US$m) 128,614 / 3,723 Major Shareholders (%) Bangkok Dusit Medical Services 24.0 Bangkok Insurance 14.7 Uob Kay Hian (Hong Kong) Limited - Client 8.4 Free Account Float (%) 39.0 3m Avg. Daily Val (US$m) 4.0 ICB Industry : Health Care / Health Care Equipment & Servic ed: CK / sa:cs, PY
WHAT S NEW Impressive development for margin despite revenue shrinkage Reported 1Q17 earnings of Bt1.0bn (+3% y-o-y, +22% q-oq): BH reported a 1Q17 net profit of Bt1.0bn (+3% y-o-y, +22% q-o-q), which is in line with our forecast but missed consensus estimate by 6%. This was on the back of healthy gross profit margins of 44% (vs 43% in 1Q16) despite the 4% y-o-y revenue contraction. Thanks to BH s effective cost control system, it was able to benefit from a 5% price hike in January (vs its regular price policy of 4% p.a.) and the lack of major capacity expansion in the short term. Note that 1Q17 earnings accounted for 26% of our full-year forecast. Impressive increase in revenue intensity from Thai patient group: In 1Q17, the In-patient Department (IPD) volume decreased by 12%y-o-y but its revenue intensity was surprisingly up by 6.3%, representing a 0.6% decrease in revenue from Thai patients. This was on the back of the referral of intensity cases from its 36 network hospitals (which will be increased to 50 hospitals by the end of this year). Note that the IPD volume of the non-thai patient decreased by 6% and its revenue intensity slid by 8.5% in 1Q17, representing a 4.6% decrease in revenue from non-thai patients. Quarterly / Interim Income Statement (Btm) FY Dec 1Q2016 4Q2016 1Q2017 % chg yoy % chg qoq Revenue 4,634 4,333 4,452 (3.9) 2.8 Cost of Goods Sold (2,625) (2,609) (2,495) (5.0) (4.4) Gross Profit 2,009 1,724 1,957 (2.6) 13.5 Other Oper. (Exp)/Inc (815) (762) (739) (9.3) (3.0) Operating Profit 1,194 962 1,218 2.0 26.6 Other Non Opg (Exp)/Inc 24.8 19.6 20.7 (16.6) 5.6 Associates & JV Inc 0.02 1.54 0.87 3,665.2 (43.9) Net Interest (Exp)/Inc (17.0) (29.3) (18.8) (10.5) 35.9 Exceptional Gain/(Loss) 5.57 5.64 1.27 (77.2) (77.5) Pre-tax Profit 1,207 959 1,222 1.2 27.4 Tax (235) (141) (220) (6.3) 56.0 Minority Interest 5.21 7.40 3.19 (38.8) (56.9) Net Profit 978 826 1,005 2.8 21.8 Net profit bef Except. 972 820 1,004 3.3 22.4 EBITDA 1,495 1,274 1,535 2.7 20.5 Margins (%) Gross Margins 43.3 39.8 44.0 Opg Profit Margins 25.8 22.2 27.4 Net Profit Margins 21.1 19.1 22.6 Source of all data: Company, DBSVTH Page 2
BH: Patient Volume Trends BH: Revenue Contribution by Nationality, Services and Payor Page 3
BH: New equipment with latest technology to increase revenue intensity BH: International referral offices Page 4
CRITICAL DATA POINTS TO WATCH Earnings Drivers: High exposure to medical tourism. International patients contribute c.66% of BH s total revenue. The hospital should benefit from the growing medical tourism industry, as Thailand has gained international recognition for its high-quality and sophisticated medical treatments at relatively affordable prices. Ageing society a long-term catalyst. A higher population of older people is inevitable in Thailand, and this will help support demand for medical services in the long run despite its annual population growth of c.1%. The Office of the National Economic and Social Development Board (NESDB) expects 23% of the country s population (15m people) to be above 60 years old, up from 16% (10m) in 2016. Expect gradual recovery in BH s revenue from FY17F onwards. BH has ended FY16F with a 2.4% decrease in patient volume, brought about by a fall in the number of international patients on the back of the weak oil prices and a global economic slowdown. However, FY16 revenue increased by 1.4%, thanks to high revenue intensity. BH s strategy, which focuses more on higher-intensity cases, has led to margin expansion. We expect the situation to improve slightly this year with 0% volume growth from non-thai patients and 2% from Thai patients. Given the price increase policy (4% annually) and BH s focus on more high-revenue intensity cases, we expect its top-line to grow 6.4% this year. Term growth supported by expansion. Future increases in capacity will come from i) turning BH Residential into a clinical building called BI Tower (Bt800m), and ii) a second campus at Sukhumvit Soi 1 (Bt2bn). The renovation of six floors (9,000 sqm of usable areas) at BI Tower had already started on 16 November 2015 and should be completed in 1Q16. The construction of Soi 1 campus is expected to commence around mid-2016 and add 26,000 sqm of usable area upon completion in mid-2018. Based on 150k sqm of existing areas, these additions will lead to a 23% increase in usable area by the end of 2018. However, BH s biggest expansion plan for Petchburi Road (Bt6bn) is now on hold as management does not expect significant volume growth anytime soon, thus leading to the conclusion that the expansion of BIT and Soi 1 should suffice. 44.0% 43.0% 42.0% 41.0% 40.0% 39.0% 38.0% 37.0% 36.0% 50% 45% 40% 35% 30% 25% 20% 15% 10% 5% 0% 40 35 30 25 20 15 10 5 0 Projects 38.4% 39.2% Gross Profit Margin 41.1% 41.9% Revenue contribution by residency Interest Coverage 42.1% New capacities Value (Btm) Usable Area (sqm) BI Tower (BIT) 800 9,000 Second Campus (Soi 1) 2,000 26,000 Petchburi Building 6,000 78,233 Total 8,800 113,233 42.9% 2013A 2014A 2015A 2016A 2017F 2018F 46% 9% 9% 6% 4% 3% Thai Myanmar UAE Oman Cambodia Bangladesh 13.8 16.4 18.8 22.1 23.4 35.3 2012A 2013A 2014A 2015A 2016A 1Q17 Page 5
Balance Sheet: Like other healthcare players in Thailand, BH has a clean balance sheet. At the end of 1Q16, it had net cash balance position. Note that the spike in the interest coverage ratio from 23.4x in FY16 to 35.3x was on the back of the repayment of Bt1.5bn of the Series 1 debentures in December 2016. Share Price Drivers: Venturing into Myanmar and Indochina market On 28 June 2016, BH has opened a new high-end facility (80% stake) in Yangon, Myanmar, which will provide basic services such as primary care, laboratory, X-ray, mammography and ultrasound. BH hopes that the diagnostic clinic, which has 450 sqm of usable space and 20 Thai professional staff, would lead to an increase in check-ups by Myanmar clients (9% of BH s patient revenue) and eventually more referrals to the main campus in Thailand. If this concept is a success, management may invest in small facilities in other countries in Indochina countries as well. BH targets the growth in Indochina market to offset the slowdown in the Middle East market. Key Risks: Political instability in Thailand. Political unrest could discourage medical tourists from coming to Thailand. This would have an adverse impact on BH s earnings, as about 64% of its revenue is contributed by international patients. Weak oil prices and global economic slowdown. This would reduce purchasing power and people might spend less on medical care by going to less expensive private or public hospitals. Also, around one fourth of its revenue comes from Middle Easterners, so a prolonged decline in oil prices could hurt patient traffic from that region. As oil prices have declined since mid-2015, management is targeting no revenue growth from FY16 onwards, down from the previous guidance of 8-10% and slightly lower than our forecast of 11%. Shortage of medical professionals. The hospital business requires personnel with specific medical and technical expertise. As the demand for these professionals increases with the opening of new hospitals, new supply will remain limited. Company Background Public Company Limited (BH), through its subsidiaries, owns and operates the. Located in Bangkok, the hospital complies with international standards, and has 565 beds for inpatients and 125 clinic examination suites that can serve more than 3,000 outpatients daily. Leverage & Asset Turnover (x) 0.9 0.60 0.9 0.50 0.9 0.9 0.40 0.9 0.9 0.30 0.8 0.20 0.8 0.8 0.10 0.8 0.00 0.8 2013A 2014A 2015A 2016A 2017F Gross Debt to Equity (LHS) Asset Turnover (RHS) Capital Expenditure Btm 3,000.0 2,500.0 2,000.0 1,500.0 1,000.0 500.0 0.0 2013A 2014A 2015A 2016A 2017F Capital Expenditure (-) ROE (%) 25.0% 20.0% 15.0% 10.0% 5.0% 0.0% 2013A 2014A 2015A 2016A 2017F 56.3 Forward PE Band (x) (x) 51.3 46.3 +2sd: 46.7x 41.3 +1sd: 39.6x 36.3 31.3 Avg: 32.5x 26.3-1sd: 25.3x 21.3-2sd: 18.2x 16.3 May-13 May-14 May-15 May-16 May-17 PB Band (x) (x) 14.7 12.7 +2sd: 13.03x 10.7 8.7 6.7 +1sd: 11.08x Avg: 9.13x -1sd: 7.18x -2sd: 5.23x 4.7 May-13 May-14 May-15 May-16 May-17 Page 6
Income Statement (Btm) FY Dec 2014A 2015A 2016A 2017F 2018F Revenue 15,630 17,660 17,915 18,830 20,866 Cost of Goods Sold (9,496) (10,396) (10,400) (10,898) (11,911) Gross Profit 6,134 7,264 7,515 7,932 8,954 Other Opng (Exp)/Inc (2,806) (3,109) (3,135) (3,201) (3,547) Operating Profit 3,328 4,156 4,380 4,731 5,407 Other Non Opg (Exp)/Inc 96.8 85.1 75.4 79.2 83.1 Associates & JV Inc (2.8) 12.5 2.21 0.0 0.0 Net Interest (Exp)/Inc (48.3) (48.6) (102) 126 115 Exceptional Gain/(Loss) 46.3 46.0 22.4 0.0 0.0 Pre-tax Profit 3,420 4,251 4,378 4,936 5,605 Tax (685) (823) (774) (987) (1,121) Minority Interest (4.5) 8.31 22.1 22.1 22.1 Preference Dividend 0.0 0.0 0.0 0.0 0.0 Net Profit 2,730 3,436 3,626 3,971 4,506 Net Profit before Except. 2,684 3,390 3,604 3,971 4,506 EBITDA 4,467 5,298 5,596 6,011 6,708 Growth Revenue Gth (%) 8.9 13.0 1.4 5.1 10.8 EBITDA Gth (%) 12.6 18.6 5.6 7.4 11.6 Opg Profit Gth (%) 11.6 24.9 5.4 8.0 14.3 Net Profit Gth (Pre-ex) (%) 8.8 26.3 6.3 10.2 13.5 Margins & Ratio Gross Margins (%) 39.2 41.1 41.9 42.1 42.9 Opg Profit Margin (%) 21.3 23.5 24.4 25.1 25.9 Net Profit Margin (%) 17.5 19.5 20.2 21.1 21.6 ROAE (%) 26.2 28.2 26.0 25.2 25.1 ROA (%) 15.0 17.0 17.0 17.7 18.5 ROCE (%) 16.7 18.8 19.1 19.0 20.1 Div Payout Ratio (%) 52.0 49.8 50.2 50.0 50.0 Net Interest Cover (x) 69.0 85.6 43.0 NM NM Page 7
Quarterly / Interim Income Statement (Btm) FY Dec 1Q2016 2Q2016 3Q2016 4Q2016 1Q2017 Revenue 4,634 4,353 4,595 4,333 4,452 Cost of Goods Sold (2,625) (2,548) (2,618) (2,609) (2,495) Gross Profit 2,009 1,804 1,978 1,724 1,957 Other Oper. (Exp)/Inc (815) (759) (798) (762) (739) Operating Profit 1,194 1,045 1,179 962 1,218 Other Non Opg (Exp)/Inc 24.8 15.0 15.9 19.6 20.7 Associates & JV Inc 0.02 0.0 0.65 1.54 0.87 Net Interest (Exp)/Inc (17.0) (25.5) (30.1) (29.3) (18.8) Exceptional Gain/(Loss) 5.57 9.90 1.32 5.64 1.27 Pre-tax Profit 1,207 1,044 1,167 959 1,222 Tax (235) (187) (212) (141) (220) Minority Interest 5.21 (0.5) 10.0 7.40 3.19 Net Profit 978 857 965 826 1,005 Net profit bef Except. 972 847 964 820 1,004 EBITDA 1,495 1,344 1,482 1,274 1,535 Growth Revenue Gth (%) 1.6 (6.1) 5.6 (5.7) 2.8 EBITDA Gth (%) 21.5 (10.1) 10.3 (14.1) 20.5 Opg Profit Gth (%) 28.2 (12.5) 12.8 (18.4) 26.6 Net Profit Gth (Pre-ex) (%) 27.8 (12.8) 13.8 (14.9) 22.4 Margins Gross Margins (%) 43.3 41.5 43.0 39.8 44.0 Opg Profit Margins (%) 25.8 24.0 25.7 22.2 27.4 Net Profit Margins (%) 21.1 19.7 21.0 19.1 22.6 Balance Sheet (Btm) FY Dec 2014A 2015A 2016A 2017F 2018F Net Fixed Assets 9,948 10,472 11,579 13,006 12,082 Invts in Associates & JVs 0.0 0.0 0.0 0.0 0.0 Other LT Assets 697 737 948 948 948 Cash & ST Invts 6,598 7,361 6,678 7,601 10,225 Inventory 292 309 310 345 381 Debtors 1,525 2,318 1,695 1,583 1,457 Other Current Assets 84.6 101 120 102 113 Total Assets 19,145 21,299 21,331 23,585 25,207 ST Debt 0.0 1,497 0.0 0.0 0.0 Creditor 860 830 876 987 1,089 Other Current Liab 1,466 1,729 1,482 1,769 1,960 LT Debt 5,148 3,664 3,670 3,670 2,500 Other LT Liabilities 410 477 493 493 493 Shareholder s Equity 11,260 13,100 14,809 16,688 19,209 Minority Interests 0.0 0.0 0.0 (22.1) (44.3) Total Cap. & Liab. 19,145 21,298 21,329 23,584 25,206 Non-Cash Wkg. Capital (424) 169 (233) (726) (1,097) Net Cash/(Debt) 1,449 2,200 3,009 3,931 7,725 Debtors Turn (avg days) 33.1 39.7 40.9 31.8 26.6 Creditors Turn (avg days) 37.1 33.0 33.6 35.1 35.4 Inventory Turn (avg days) 12.9 11.7 12.2 12.3 12.4 Asset Turnover (x) 0.9 0.9 0.8 0.8 0.9 Current Ratio (x) 3.7 2.5 3.7 3.5 4.0 Quick Ratio (x) 3.5 2.4 3.6 3.3 3.8 Net Debt/Equity (X) CASH CASH CASH CASH CASH Net Debt/Equity ex MI (X) CASH CASH CASH CASH CASH Capex to Debt (%) 36.5 29.6 59.0 68.8 8.9 Z-Score (X) 12.8 12.7 12.5 12.1 15.9 Page 8
Cash Flow Statement (Btm) FY Dec 2014A 2015A 2016A 2017F 2018F Pre-Tax Profit 3,420 4,251 4,378 4,936 5,605 Dep. & Amort. 1,045 1,045 1,139 1,201 1,218 Tax Paid (721) (859) (821) (975) (1,111) Assoc. & JV Inc/(loss) 2.75 (12.5) (2.2) 0.0 0.0 Chg in Wkg.Cap. (6.1) (661) 690 270 371 Other Operating CF (112) (12.5) (247) (117) (81.9) Net Operating CF 3,629 3,751 5,136 5,314 6,001 Capital Exp.(net) (1,878) (1,527) (2,164) (2,523) (222) Other Invts.(net) 0.0 0.0 0.0 0.0 0.0 Invts in Assoc. & JV 0.0 0.0 0.0 0.0 0.0 Div from Assoc & JV 0.0 0.0 0.0 0.0 0.0 Other Investing CF 0.0 0.0 0.0 0.0 0.0 Net Investing CF (1,878) (1,527) (2,164) (2,523) (222) Div Paid (1,424) (911) (1,712) (1,822) (1,985) Chg in Gross Debt (5.9) (12.6) 1,491 0.0 1,170 Capital Issues 0.0 0.0 0.0 0.0 0.0 Other Financing CF 373 67.2 (3,111) (1,043) (2,340) Net Financing CF (1,056) (856) (3,332) (2,865) (3,155) Currency Adjustments 46.3 46.0 22.4 0.0 0.0 Chg in Cash 741 1,413 (338) (73.3) 2,624 Opg CFPS (Bt) 4.99 6.06 6.10 6.92 7.73 Free CFPS (Bt) 2.40 3.05 4.08 3.83 7.93 Target Price & Ratings History 212.00 202.00 192.00 182.00 172.00 162.00 152.00 Bt 1 2 3 4 5 6 7 8 9 S.No. Date of Report Closing Price 12-mth T arget Price Rating 1: 10 May 16 201.00 190.01 FULLY VALUED 2: 01 Aug 16 184.00 190.00 FULLY VALUED 3: 14 Sep 16 168.00 143.00 FULLY VALUED 4: 13 Oct 16 160.00 143.00 FULLY VALUED 5: 04 Nov 16 182.00 160.00 FULLY VALUED 6: 23 Jan 17 180.50 160.00 FULLY VALUED 7: 01 Mar 17 177.50 160.00 FULLY VALUED 8: 22 Mar 17 178.00 160.00 FULLY VALUED 9: 02 May 17 175.00 160.00 FULLY VALUED 142.00 May-16 Jul-16 Sep-16 Nov-16 Jan-17 Mar-17 May-17 Note : Share price and Target price are adjusted for corporate actions. Source: DBSVTH Analyst: Apichaya KETRUTTANABORVORN THAI-CAC Corporate Governance CG Rating 2016 n/a THAI-CAC is Companies participating in Thailand's Private Sector Collective Action Coalition Against Corruption programme (Thai CAC) under Thai Institute of Directors (as of October 28, 2016) are categorised into: Score Declared Certified Description Companies that have declared their intention to join CAC Companies certified by CAC. Corporate Governance CG Rating is based on Thai Institute of Directors (IOD) s annual assessment of corporate governance practices of listed companies. The assessment covers 235 criteria in five categories including board responsibilities (35% weighting), disclosure and transparency (20%), role of stakeholders (20%), equitable treatment of shareholders (10%) and rights of shareholders (15%). The IOD then assigns numbers of logos to each company based on their scoring as follows: Score Range Number of Logo Description 90-100 Excellent 80-89 Very Good 70-79 Good 60-69 Satisfactory 50-59 Pass <50 No logo given N/A Page 9
DBSVTH recommendations are based an Absolute Total Return* Rating system, defined as follows: STRONG BUY (>20% total return over the next 3 months, with identifiable share price catalysts within this time frame) BUY (>15% total return over the next 12 months for small caps, >10% for large caps) HOLD (-10% to +15% total return over the next 12 months for small caps, -10% to +10% for large caps) FULLY VALUED (negative total return i.e. > -10% over the next 12 months) SELL (negative total return of > -20% over the next 3 months, with identifiable catalysts within this time frame) Share price appreciation + dividends Completed Date: 4 May 2017 08:09:20 (THA) Dissemination Date: 4 May 2017 08:10:33 (THA) Sources for all charts and tables are DBSVTH unless otherwise specified. GENERAL DISCLOSURE/DISCLAIMER This report is prepared by DBS Vickers Securities (Thailand) Co Ltd (''DBSVTH''). This report is solely intended for the clients of DBS Bank Ltd, its respective connected and associated corporations and affiliates only and no part of this document may be (i) copied, photocopied or duplicated in any form or by any means or (ii) redistributed without the prior written consent of DBS Vickers Securities (Thailand) Co Ltd (''DBSVTH''). The research set out in this report is based on information obtained from sources believed to be reliable, but we (which collectively refers to DBS Bank Ltd, its respective connected and associated corporations, affiliates and their respective directors, officers, employees and agents (collectively, the DBS Group ) have not conducted due diligence on any of the companies, verified any information or sources or taken into account any other factors which we may consider to be relevant or appropriate in preparing the research. Accordingly, we do not make any representation or warranty as to the accuracy, completeness or correctness of the research set out in this report. Opinions expressed are subject to change without notice. This research is prepared for general circulation. Any recommendation contained in this document does not have regard to the specific investment objectives, financial situation and the particular needs of any specific addressee. This document is for the information of addressees only and is not to be taken in substitution for the exercise of judgement by addressees, who should obtain separate independent legal or financial advice. The DBS Group accepts no liability whatsoever for any direct, indirect and/or consequential loss (including any claims for loss of profit) arising from any use of and/or reliance upon this document and/or further communication given in relation to this document. This document is not to be construed as an offer or a solicitation of an offer to buy or sell any securities. The DBS Group, along with its affiliates and/or persons associated with any of them may from time to time have interests in the securities mentioned in this document. The DBS Group, may have positions in, and may effect transactions in securities mentioned herein and may also perform or seek to perform broking, investment banking and other banking services for these companies. Any valuations, opinions, estimates, forecasts, ratings or risk assessments herein constitutes a judgment as of the date of this report, and there can be no assurance that future results or events will be consistent with any such valuations, opinions, estimates, forecasts, ratings or risk assessments. 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Therefore, the inclusion of the valuations, opinions, estimates, forecasts, ratings or risk assessments described herein IS NOT TO BE RELIED UPON as a representation and/or warranty by the DBS Group (and/or any persons associated with the aforesaid entities), that: (a) such valuations, opinions, estimates, forecasts, ratings or risk assessments or their underlying assumptions will be achieved, and (b) there is any assurance that future results or events will be consistent with any such valuations, opinions, estimates, forecasts, ratings or risk assessments stated therein. Please contact the primary analyst for valuation methodologies and assumptions associated with the covered companies or price targets. Any assumptions made in this report that refers to commodities, are for the purposes of making forecasts for the company (or companies) mentioned herein. They are not to be construed as recommendations to trade in the physical commodity or in the futures contract relating to the commodity referred to in this report. Page 10
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