Sector Property Page 14 REITs: Rosier economic outlook, S-REITs in the spotlight? THAILAND

PLEASE CLICK ON THE PAGE NUMBER TO MOVE TO THE RELEVANT PAGE. CHINA Update Geely Auto (175 HK/HOLD/HK$11.66/Target: HK$10.50) Page 2 Parent company agrees to acquire 49.9% stake in Proton and 51% stake in Lotus. Maintain HOLD. MALAYSIA Initiate Coverage MY EG Services (MYEG MK /HOLD/RM2.22/Target: RM2.29) Page 5 Charting new heights with entry into accommodation services and GST monitoring system. Results CIMB Group (CIMB MK/HOLD/RM6.13/Target: RM6.20) Page 8 1Q17: Earnings are 8% above estimates, driven by lumpy writebacks. Against a more positive backdrop, we raise our earnings forecast by 8% and target price to RM6.20. Sunsuria (SSR MK/HOLD/RM1.41/Target: RM1.50) Page 11 2QFY17: Future earnings growth potential priced in. Downgrade to HOLD after 42% ytd run-up in share price. SINGAPORE Sector Property Page 14 REITs: Rosier economic outlook, S-REITs in the spotlight? THAILAND Update Total Access Communication (DTAC TB/BUY/Bt43.00/Target: Bt57.00) Page 17 Enters partnership with TOT, easing spectrum shortage concerns. KEY INDICES Prev Close 1D % 1W % 1M % YTD % DJIA 21012.4 0.4 2.0 0.1 6.3 S&P 500 2404.4 0.2 2.0 0.7 7.4 FTSE 100 7514.9 0.4 0.2 3.3 5.2 AS30 5811.6 0.2 (0.2) (1.5) 1.6 CSI 300 3424.2 (0.0) 0.4 (0.5) 3.4 FSSTI 3231.2 0.3 0.2 2.1 12.2 HSCEI 10390.9 (0.0) 0.1 1.2 10.6 HSI 25428.5 0.1 0.5 4.0 15.6 JCI 5703.4 (0.5) 1.6 0.4 7.7 KLCI 1771.0 0.2 (0.3) 0.3 7.9 KOSPI 2317.3 0.2 1.1 5.5 14.4 Nikkei 225 19743.0 0.7 (0.4) 3.5 3.3 SET 1566.2 0.1 1.2 0.2 1.5 TWSE 10044.4 0.4 0.3 2.1 8.5 BDI 934 (1.6) (2.7) (20.2) (2.8) CPO (RM/mt) 2904 (0.3) 2.3 8.7 (9.2) Brent Crude 54 (0.4) 3.4 4.6 (5.0) (US$/bbl) Source: Bloomberg TOP PICKS Ticker CP (lcy) TP (lcy) Pot. +/- (%) BUY Alibaba BABA US 122.81 139.00 13.2 Beijing Ent. Water 371 HK 6.11 7.60 24.4 Telekomunikasi TLKM IJ 4,360.00 5,000.00 14.7 Tiga Pilar AISA IJ 2,170.00 2,500.00 15.2 V.S. Industry VSI MK 1.98 2.20 11.1 OCBC OCBC SP 10.43 11.70 12.2 Siam Cement SCC TB 522.00 600.00 14.9 SELL Great Wall Motor 2333 HK 8.01 6.00 (25.1) MGM China 2282 HK 17.08 15.00 (12.2) Hartalega HART MK 6.39 4.07 (36.3) KEY ASSUMPTIONS GDP (% yoy) 2016 2017F 2018F US 1.6 2.7 2.5 Euro Zone 1.7 1.6 1.5 Japan 1.0 0.9 1.2 Singapore 2.0 2.4 2.8 Malaysia 4.2 4.5 4.7 Thailand 3.2 3.3 3.1 Indonesia 5.0 5.2 5.5 Hong Kong 1.9 2.0 2.0 China 6.7 6.3 6.3 Brent (Average) (US$/bbl) 45 55 60 CPO (RM/mt) 2,653 2,600 2,500 Source: Bloomberg, UOB ETR, UOB Kay Hian CORPORATE EVENTS Venue Begin Close Analyst Marketing on China Internet Kuala Lumpur 25 May 26 May Sector Roadshow with Singtel Canada 26 May 26 May Analyst Presentation on Singapore Canada/ 29 May 6 Jun Property & REITs Strategy US/UK Roadshow with Tongda Group Holdings Hong Kong 1 Jun 1 Jun Roadshow with United Overseas Bank Canada 2 Jun 2 Jun Group meeting with Fortune REIT Hong Kong 7 Jun 7 Jun Roadshow with Meidong Auto Holdings Taipei 8 Jun 8 Jun Roadshow with Tonly Electronics Holdings Taipei 8 Jun 9 Jun Roadshow with GFPT Public Company Hong Kong 8 Jun 9 Jun Roadshow with PT Siloam Int l Hospital Canada 5 Jun 16 Jun Analyst Presentation on Spore Strategy Kuala Lumpur 15 Jun 16 Jun Luncheon with United Overseas Bank Singapore 3 Jul 3 Jul Sarawak Oil Palms Site Visit Sarawak 3 Jul 5 Jul Roadshow with Top Glove Corporation US/Canada 5 Sep 12 Sep 1

COMPANY UPDATE Geely Auto (175 HK) Parent Company Agrees To Acquire 49.9% Stake In Proton Geely s parent company, Zhejiang Geely, has agreed to acquire a 49.9% stake in Malaysian automaker Proton and 51% stake in Lotus Cars from DRB-Hicom. We believe the acquisition could: a) pave the way for Geely s penetration into the ASEAN market, and b) help Geely meet tightening fuel-economy rules in China by obtaining technology know-how from Lotus Cars. However, since the deal is done at the parent company level, we expect limited impact on Geely. Maintain HOLD with a target price of HK$10.50. Entry price: HK$9.00. WHAT S NEW Parent company agrees to buy 49.9% stake in Proton and 51% stake in Lotus. Geely's parent company Zhejiang Geely Holding Group (Zhejiang Geely) has agreed to acquire a 49.9% stake in Malaysian automaker Proton from DRB-Hicom, according to a statement issued yesterday. Proton, founded in 1983 by former Malaysian premier Mahathir Mohamad, is now fully owned by Malaysian conglomerate DRB-Hicom. After the deal, Proton will be 50.1%-owned by DRB-Hicom and 49.9% by Geely. DRB-Hicom also owns British sportcar maker Lotus Cars. According to the agreement, DRB-Hicom would sell 51% stake of Lotus Cars to China s Zhejiang Geely, and 49% stake to Etika Automotive. Etika Automotive is controlled by Malaysian tycoon Syed Mokhtar Al- Bukhary, who also controls the DRB-Hicom conglomerate. The deal is expected to be sealed by Jul 17. The deal will be done by the parent company, not the listco. Note that Zhejiang Geely will sign the deal, not the listco. Zhejiang Geely is owned by Geely's Chairman, Mr Li Shu Fu, and it holds a 51.54% stake in the Hong Kong-listed Geely (175 HK). STOCK IMPACT Turning Proton around represents a challenge to Zhejiang Geely. After the acquisition, the biggest challenge for Zhejiang Geely is to turn around Proton. Proton has suffered sustained losses, and it received RM1.5b (US$338m) in government aid last year on condition that it pursues a turnaround plan and seeks a foreign partner. If Zhejiang Geely is unable to turn Proton around in foreseeable future, Proton would become a burden on the former. KEY FINANCIALS Year to 31 Dec (Rmbm) 2015 2016 2017F 2018F 2019F Net turnover 30,138 53,722 88,920 104,260 121,600 EBITDA 4,295 7,278 11,907 13,155 14,812 Operating profit 3,152 5,624 9,929 10,930 12,360 Net profit (rep./act.) 2,261 5,112 8,130 8,900 10,100 Net profit (adj.) 2,681 4,494 8,130 8,900 10,100 EPS (fen) 30.4 50.9 92.2 100.9 114.5 PE (x) 31.2 19.9 11.5 10.5 9.3 P/B (x) 5.9 5.0 3.9 3.1 2.5 EV/EBITDA (x) 26.6 14.9 8.4 7.2 5.7 Dividend yield (%) 0.3 1.1 1.7 1.9 2.2 Net margin (%) 8.9 8.4 9.1 8.5 8.3 Net debt/(cash) to equity (%) (47.0) (60.9) (74.6) (74.0) (83.4) Interest cover (x) 489.4 n.a. n.a. n.a. n.a. ROE (%) 14.6 20.4 29.0 25.3 23.5 Consensus net profit - - 7,588 9,510 11,423 UOBKH/Consensus (x) - - 1.07 0.94 0.88 Source: Geely, Bloomberg, UOB Kay Hian HOLD (Maintained) Share Price Target Price HK$11.66 HK$10.50 Upside -9.9% COMPANY DESCRIPTION Geely manufactures and sells automobiles under its proprietary brand GEELY in China and overseas. STOCK DATA GICS sector Automobile Bloomberg ticker: 175 HK Shares issued (m): 8,801 Market cap (HK$m): 102,624 Market cap (US$m): 13,241.8 3-mth avg daily t'over (US$m): 117.3 Price Performance (%) 52-week high/low HK$3.59/HK$12.62 1mth 3mth 6mth 1yr YTD 2.1 9.6 43.8 206.8 57.4 Major Shareholders % Mr Li Shufu 57.98 FY17 NAV/Share (HK$) 2.99 FY17 Net Cash/Share (HK$) 2.69 PRICE CHART (lcy) 14 12 10 8 6 4 2 300 200 100 Volume (m) GEELY AUTOMOBILE HOLDINGS LT GEELY AUTOMOBILE HOLDINGS LT/HSI INDEX (%) 0 May 16 Jul 16 Sep 16 Nov 16 Jan 17 Mar 17 May 17 Source: Bloomberg ANALYSTS Ken Lee +852 2236 6760 ken.lee@uobkayhian.com.hk Sophie Yu +852 2826 1392 sophie.yu@uobkayhian.com.hk 330 290 250 210 170 130 90 50 2

Proton to be a proxy to the ASEAN market. We believe Zhejiang Geely's acquisition of Proton is part of the group's plan to expand into the ASEAN market. Geely previously tried to penetrate the Malaysian market via the setup of a CKD plant with a local partner, but the deal failed. In the longer term, the parent company's acquisition of Proton would pave the way for Geely to penetrate the ASEAN market. Geely's presence in the ASEAN market is next to zero. In 2016, Geely only derived 0.4% of revenue from sales to ASEAN and other overseas markets. Proton now has two production plants in Malaysia with a total capacity of 350,000 units p.a. Now, with a stake in Proton, Geely will be able to utilise Proton's production capacity in Malaysia to make Geely cars or even Lynk & Co cars for sale to the ASEAN market. ASEAN is a promising auto market for China players. According to the ASEAN Free Trade Agreement (AFTA), tariff on automobiles made in ASEAN countries would only be 5%. With its low-cost production capability and Volvo's technologies, Geely could build cost-competitive cars for ASEAN market with Proton's plant, in our view. There is huge potential for Geely to penetrate the mid- to low-end segments occupied by Korean brands. The six major markets of ASEAN (Indonesia, Thailand, Malaysia, the Philippines, Vietnam and Singapore) sold 3.2m vehicles (passenger vehicles + commercial vehicles) in 2016, compared with 28m units in China. The sales growth of vehicles turned from negative in 2014-15 to positive in 2016 (+3% yoy) and 1Q17 (+8% yoy). Leverage on Lotus technologies. In addition, Zhejiang Geely would also obtain the technologies from Lotus Cars via its acquisition of the company. Lotus, well known for its lightweight chassis technology, may help Geely in meeting tightening fuel-economy rules in China. In addition, Geely may introduce Lotus into China market. Insignificant impact on the listco. Since the deal will be done by the parent company, the impact on the listco Geely (175 HK) would be very limited, if any. The price of the acquisition has not been disclosed. However, we think Zhejiang Geely will get financing from Chinese state-owned banks as in the case of its acquisition of Volvo in 2010. As such, the parent company will not be under pressure to take money from the listco. EARNINGS REVISION/RISK We maintain our 2017-18 net profit forecasts at Rmb8.13b/Rmb8.9b/Rmb10.1b, which imply yoy core net profit growths of 81%/10%/14% respectively. Our 2017 net profit forecast for Geely is 7% above consensus, while our net profit forecasts for 2018 and 2019 are 6%/12% below consensus, given our more conservative assumption on margins. VALUATION/RECOMMENDATION Maintain HOLD. Based on our EPS estimates, Geely is trading at 11.5x 2017F PE, slightly above its historical mean one-year forward PE of 10x. We believe the prospective earnings growth in 2017-19 should have been priced in. Given the stretched valuation, we maintain HOLD on Geely. Our target price of HK$10.50 is based on 10x 2017F PE, on par with historical average. Re-entry price: HK$9.00. 3

PROFIT & LOSS Year to 31 Dec (Rmbm) 2016 2017F 2018F 2019F Net turnover 53,722 88,920 104,260 121,600 EBITDA 7,278 11,907 13,155 14,812 Depreciation & amortization 734 869 935 1,001 EBIT 5,624 9,929 10,930 12,360 Total other non-operating income 619 0 (0) 0 Associate contributions (9) - - - Net interest income/(expense) (30) (15) (77) (43) Pre-tax profit 6,204 9,914 10,853 12,317 Tax (1,034) (1,685) (1,845) (2,094) Minorities (58) (99) (108) (123) Net profit 5,112 8,130 8,900 10,100 Net profit (recurrent) 4,494 8,130 8,900 10,100 BALANCE SHEET Year to 31 Dec (Rmbm) 2016 2017F 2018F 2019F Fixed assets 10,650 11,481 12,346 13,145 Other LT assets 9,684 10,875 11,985 12,934 Cash/ST investment 15,045 27,579 34,769 45,349 Other current assets 32,204 49,066 46,190 64,876 Total assets 67,583 99,002 105,290 136,305 ST debt 174 2,000 3,000 3,000 Other current liabilities 40,456 60,781 57,687 80,258 LT debt 2,068 4,068 5,068 5,068 Other LT liabilities 198 198 198 198 Shareholders' equity 24,437 31,607 38,881 47,201 Minority interest 249 348 456 579 Total liabilities & equity 67,583 99,002 105,290 136,305 CASH FLOW Year to 31 Dec (Rmbm) 2016 2017F 2018F 2019F Operating 8,338 13,684 11,092 16,603 Pre-tax profit 6,204 9,914 10,853 12,317 Tax (754) (1,685) (1,845) (2,094) Depreciation/amortization 734 869 935 1,001 Associates 9 - - - Working capital changes 1,538 3,462 (218) 3,885 Non-cash items 607 1,124 1,367 1,494 Other operating cashflows - - - 1 Investing (2,557) (3,787) (3,888) (3,799) Capex (growth) (486) (1,700) (1,800) (1,800) Investments (4,039) (2,300) (2,400) (2,400) Proceeds from sale of assets - - - 1 Others 1,968 213 312 400 Financing 29 2,637 (15) (2,224) Dividend payments (281) (960) (1,626) (1,780) Issue of shares 273 - - - Proceeds from borrowings 163 3,826 2,000 - Loan repayment - - - - Others/interest paid (126) (229) (389) (444) Net cash inflow (outflow) 5,810 12,534 7,189 10,580 Beginning cash & cash equivalent 9,167 15,045 27,579 34,769 Ending cash & cash equivalent 15,045 27,579 34,769 45,349 KEY METRICS Year to 31 Dec (%) 2016 2017F 2018F 2019F Profitability EBITDA margin 13.5 13.4 12.6 12.2 Pre-tax margin 11.5 11.1 10.4 10.1 Net margin 8.4 9.1 8.5 8.3 ROA 8.2 9.8 8.7 8.4 ROE 20.4 29.0 25.3 23.5 Growth Turnover 78.3 65.5 17.3 16.6 EBITDA 69.5 63.6 10.5 12.6 Pre-tax profit 115.8 59.8 9.5 13.5 Net profit 126.2 59.0 9.5 13.5 Net profit (adj.) 67.6 80.9 9.5 13.5 EPS 67.6 80.9 9.5 13.5 Leverage Debt to total capital 0.3 4.0 5.7 4.4 Debt to equity 0.7 12.7 15.4 12.7 Net debt/(cash) to equity (60.9) (74.6) (74.0) (83.4) Interest cover (x) 186.8 n.a. n.a. n.a. 4

INITIATE COVERAGE MY EG Services (MYEG MK) Entering New Growth Portals Leveraging on its success as the country s leading e-service provider serving both the government and businesses/citizens, MYEG has enormous potential to capture a wide spectrum of foreign workers-related businesses. Key catalysts include the foreign worker amnesty programme, provision of accommodation and remittance services, and the GST monitoring system. This should ensure a 31.5% earnings CAGR for FY17-19. Initiate coverage with HOLD and target price of RM2.29. Entry price: RM2.06. Expanding its share of foreign workers wallet. As a natural extension of its successful monopolistic e-portal for foreign workers permit renewals, MY EG Services (MYEG) has embarked on a few new services for foreign workers over the past year, namely the foreign worker amnesty programme and telco services (via a JV with Celcom). The foreign worker segment was the key earnings driver in FY16, thanks in part to the implementation of the amnesty programme, and we expect the segment to remain MYEG s largest earnings contributor in the next three years, accounting for 39.0-65.9% of earnings in FY17-19. Roll-out of accommodation business a major growth catalyst. To further complement its foreign worker e-portal business, MYEG recently began its pilot hostel site in Malacca. This marks its foray into government-licensed accommodation clusters for foreign workers throughout the country, which will lead to other ancillary businesses such as remittance services. While we expect its maiden earnings contribution to come on stream in FY18 and the company to take a few years to open more sites, our sensitivity analysis suggests that at management s guidance of 500 accommodation sites in the next 4-5 years, this asset-light business would rake in over RM2.2b and RM540m in annual revenue and earnings respectively. Long-delayed GST monitoring system finally rolled out. The government has passed a new bill that empowers customs to install the GST Electronic Monitoring System (EMS) which is primarily aimed at facilitating the customs department s tax collection and curbing evasion. The ongoing roll-out of the system keeps MYEG in a strong growth phase moving forward. The trial project was kicked off in 2QFY17, involving some 5,000 sites. We conservatively estimate MYEG to begin installation of 50,000 sites in FY18 and 60,000 sites in FY19. The full roll-out of the targetted 500,000 sites would translate into turnover and earnings of RM500m and RM125m respectively p.a. up to six years, subject to MYEG meeting revenue targets. Initiate coverage with HOLD and target price of RM2.29, which implies 0.9x PEG and 30.6x FY18F PE. The share price could stretched to RM2.55 assuming a 1.0x PEG. Entry price is RM2.06. Click here for Blue Top dated 24 May 2017 KEY FINANCIALS Year to 30 Jun (RMm) FY15 FY16 FY17F FY18F FY19F Net turnover 141.5 281.6 384.0 583.9 828.9 EBITDA 84.6 164.3 230.3 304.5 376.5 Operating Profit 69.3 146.6 207.9 264.7 330.6 Net Profit (Reported/Actual) 68.1 142.8 200.7 258.2 324.7 Net Profit (Adjusted) 68.1 142.8 200.7 258.2 324.7 EPS (sen) 5.7 5.9 5.6 7.2 9.0 PE (x) 38.6 36.9 39.3 30.6 24.3 P/B (x) 10.1 13.8 15.1 11.2 8.5 EV/EBITDA (x) 92.0 47.4 33.6 25.2 19.8 Dividend Yield (%) 0.9 0.8 0.8 1.0 1.2 Net Margin (%) 48.2 50.7 52.3 44.2 39.2 Net Debt/(Cash) to Equity (%) (43.7) (25.6) (31.2) (33.1) (46.0) Interest Cover (x) 64.1 42.2 35.9 54.2 83.5 ROE (%) 24.9 35.7 37.1 35.8 34.2 Consensus Net Profit - - 196.5 262.7 333.0 UOBKH/Consensus (x) - - 1.02 0.98 0.97 Source: MYEG, Bloomberg, UOB Kay Hian HOLD Share Price RM2.22 Target Price RM2.29 Upside 3.2% COMPANY DESCRIPTION MY EG Services provides e-services between the Malaysian government and its citizens and businesses. Services include foreign workers work permit renewal, electronic delivery of driver and vehicle registration, licensing and summons services and utility bill payment. STOCK DATA GICS sector Information Technology Bloomberg ticker MYEG MK Shares issued (m) 3,606.3 Market cap (RMm) 8,006.0 Market cap (US$m) 1,862.5 3-mth avg daily turnover (US$m) 6.3 Price Performance (%) 52-week high/low RM2.37/RM1.14 1mth 3mth 6mth 1yr YTD 7.8 35.2 52.6 64.6 47.3 Major Shareholders % Asia Internet Holdings 29.69 Thean Soon Wong 7.21 JP Morgan Chase & Co. 6.46 FY17 NAV/Share (RM) 0.2 FY17 Net Cash/Share (RM) 0.04 PRICE CHART (lcy) MY EG SERVICES BHD MY EG SERVICES BHD/FBMKLCI INDEX (%) 2.40 180 170 2.20 160 2.00 150 1.80 140 130 1.60 120 1.40 110 100 1.20 90 1.00 80 80 60 Volume (m) 40 20 0 May 16 Jul 16 Sep 16 Nov 16 Jan 17 Mar 17 May 17 Source: Bloomberg ANALYSTS Vincent Khoo, CFA +603 2147 1998 vincentkhoo@uobkayhian.com Malaysia Research Team +603 2147 1988 research@uobkayhian.com 5

STOCK IMPACT Foreign worker amnesty programme to further anchor immigration segment. The immigration segment, which originally focused on the renewal of foreign workers work permits and sale of insurance policies to foreign workers, will benefit from the ongoing amnesty programme as the number of foreign worker renewal base is expected to grow from 1.5m in FY16 to 2.5m in FY19. Importantly, the amnesty programme would allow MYEG to clinch a higher average revenue of RM165 per foreign worker (RM100 under the renewal programme) based on mandatory processing fee of RM100 and optional insurance commission of RM130 with 50% PBT margin. Recurring revenue stream from foreign workers SIM card reload. The commencement of the foreign worker amnesty programme goes hand in hand with the joint marketing initiative with Celcom to provide SIM cards to the illegal workers upon their registration. Management guided that about half of these newly-legalised workers use SIM cards, bringing in an ARPU of RM30/month. This service has been extended to all foreign workers upon permit renewal. While the contribution from this segment remains relatively small, we expect it to further boost MYEG s recurring income once it gains traction. Roll-out of asset-light accommodation services to be one of the key earnings drivers from FY18. We expect accommodation services to begin its maiden contribution in FY18, bringing in PBT of RM32.4m and RM86.4m in FY18 and FY19 respectively. This is based on our conservative assumptions of 30 sites in FY18 and 80 sites in FY19 vs management s target of 500 sites in the next 4-5 years. Specifically, each site will have 2,000 beds rented out at RM200/bed and would deliver a potential PBT margin of 25%. Long-delayed GST monitoring system could serve as another key catalyst provided a 10% tax collection CAGR has been achieved. While the GST EMS appears to be another earnings catalyst for MYEG, it could carry a certain degree of execution risk as MYEG is mandated to maintain a six-year GST collection CAGR of 10% in order to be paid RM1,000 p.a. for every GST EMS device installed. Nevertheless, we believe the execution risk is low as MYEG has put in a lot of effort to meet the government s stringent requirements. Our estimate shows that a full roll-out of the targeted 500,000 sites would translate into turnover and earnings of RM500m and RM125m respectively p.a. Potential PBT of RM1b in the long term when all ventures are rolled out. MYEG s valuation could be lifted when initiatives such as accommodation services and the GST monitoring system are fully rolled out. Our sensitivity analysis suggests that MYEG s PBT potential could surge to about RM1b if we take into account management s guidance of 500 accommodation sites and 500,000 units of GST EMS. EARNINGS REVISION/RISK We forecast net profit in FY17-FY19 to grow 40.6%, 28.6% and 25.8% yoy to RM201m, RM258m and RM325m respectively (see RHS chart for key assumptions). Estimated yield of 0.8-1.3%. MYEG paid out 30.0-33.5% of core net profit as dividends in FY12-16. Against a backdrop of strong free cash flow and balance sheet (net cash position of RM102.4m as of FY16), MYEG will likely be able to sustain its dividend policy of 30.0% for FY17-19, translating into a dividend yield of 0.8-1.3%. VALUATION/RECOMMENDATION Initiate coverage with HOLD and target price of RM2.29, which implies 0.9x PEG and 30.6x FY18F PE. We think MYEG deserves a higher PE than its mean PE of 26.4x given its: a) sheer size and high liquidity compared with its peers, b) majority market share in the electronic government (E-Government) space (which has only two players - MYEG and Rilek), c) Shariah compliant stock, d) strong earnings prospects with 3-year earnings CAGR of 31.5% in FY17-19, and e) potential earnings base of RM1b if all the new growth strategies fully kick in. The share price could stretch to RM2.55 assuming a 1.0x PEG. Entry price: RM2.06. REVENUE CAGR OF 43.3% IN FY17-19 (RMm) 900 Others 12 800 Road Transportation 121 700 GST 60 600 Accomodation 11 Foreign Worker 500 112 383 400 11 50 300 11 103 143 3 200 96 93 92 100 15 45 175 266 268 254 0 FY14 FY15 FY16 FY17F FY18F FY19F Source: MYEG, UOB Kay Hian 51 PBT AND MARGIN TRENDS (RMm) PBT (LHS) PBT Margin (RHS) (%) 350 327 55 300 250 200 150 100 50 0 46 48 68 51 143 53 202 260 FY14 FY15 FY16 FY17F FY18F FY19F Source: MYEG, UOB Kay Hian (sen) 2.8 2.6 2.4 2.2 2.0 1.8 1.6 1.4 DPS AND PAYOUT RATIO OF NET PROFIT 2.5 30 DPS (LHS) Pay out Ratio (RHS) (%) 34 2.7 34 1.9 1.8 30 1.7 2.1 44 30 30 30 FY14 FY15 FY16 FY17F FY18F FY19F Source: MYEG, UOB Kay Hian KEY ASSUMPTIONS Year to 30 Jun FY17F FY18F FY19F Legalisation No. of foreign workers 0.5 0.2 0.0 Revenue/worker (RM) 165.0 165.0 165.0 Accommodation No. of sites 0 30 80 Rental/worker (RM) 0 2,400 2,400 GST monitoring system No. of devices 0 50,000 60,000 Source: MYEG, UOB Kay Hian 39 33 32 31 30 29 50 45 40 35 6

PROFIT & LOSS Year to 30 Jun (RMm) FY16 FY17F FY18F FY19F Net turnover 281.6 384.0 583.9 828.9 EBITDA 164.3 230.3 304.5 376.5 Deprec. & amort. (17.7) (22.5) (39.8) (45.9) EBIT 146.6 207.9 264.7 330.6 Associate contributions 0.0 0.0 0.0 0.0 Net interest income/(expense) 0.0 0.0 0.0 0.0 Pre-tax profit 143.1 202.1 259.8 326.7 Tax (0.7) (1.0) (1.3) (1.6) Minorities 0.4 0.4 0.4 0.4 Net profit 142.8 200.7 258.2 324.7 Net profit (adj.) 142.8 200.7 258.2 324.7 BALANCE SHEET Year to 30 Jun (RMm) FY16 FY17F FY18F FY19F Fixed assets 250.8 298.3 358.5 412.7 Other LT assets 35.7 35.7 35.7 35.7 Cash/ST investment 209.7 241.9 296.6 477.8 Other current assets 228.1 252.2 341.5 451.0 Total assets 724.4 828.1 1,032.3 1377.1 ST debt 23.7 22.7 21.7 20.7 Other current liabilities 215.9 212.7 251.7 384.7 LT debt 83.6 69.6 54.6 39.6 Other LT liabilities 1.1 1.1 1.1 1.1 Shareholders' equity 400.3 540.8 721.5 948.8 Minority interest (0.2) 0.2 0.5 0.9 Total liabilities & equity 724.4 847.1 1,051.1 1,395.8 CASH FLOW Year to 30 Jun (RMm) FY16 FY17F FY18F FY19F Operating 162.7 196.0 248.1 394.6 Pre-tax profit 143.1 202.1 259.8 326.7 Tax (0.6) (1.0) (1.3) (1.6) Deprec. & amort. 17.7 22.5 39.8 45.9 Working capital changes 6.5 (27.7) (50.4) 23.6 Other operating cashflows (4.1) 0.1 0.1 0.1 Investing (163.0) (80.0) (100.0) (100.0) Capex (growth) (155.6) (80.0) (100.0) (100.0) Investments 0.0 0.0 0.0 0.0 Others (7.6) 0.0 0.0 0.0 Financing 77.9 (75.2) (93.4) (113.4) Dividend payments (28.9) (60.2) (77.4) (97.4) Proceeds from borrowings 101.8 2.0 1.0 1.0 Loan repayment (7.2) (17.0) (17.0) (17.0) Others/interest paid 12.2 0.0 0.0 0.0 Net cash inflow (outflow) 77.7 40.8 54.7 181.2 Beginning cash & cash equivalent 123.5 201.1 241.9 296.6 Changes due to forex impact 0.0 0.0 0.0 0.0 Ending cash & cash equivalent 201.1 241.9 296.6 477.8 KEY METRICS Year to 30 Jun (%) FY16 FY17F FY18F FY19F Profitability EBITDA margin 58.3 60.0 52.2 45.4 Pre-tax margin 50.8 52.6 44.5 39.4 Net margin 50.7 52.3 44.2 39.2 ROA 19.7 24.2 25.0 23.6 ROE 35.7 37.1 35.8 34.2 Growth Turnover 99.0 36.4 52.0 42.0 EBITDA 94.3 40.2 32.2 23.6 Pre-tax profit 109.8 41.2 28.6 25.7 Net profit 109.5 40.6 28.6 25.8 Net profit (adj.) 109.5 40.6 28.6 25.8 EPS 4.7 (6.3 28.6 25.8 Leverage Debt to total capital (0.1) (0.1) (0.1) (0.0) Debt to equity (0.3) (0.2) (0.1) (0.1) Net debt/(cash) to equity (0.3) (0.3) (0.3) (0.4) Interest cover (x) 42.2 35.9 54.2 83.5 7

COMPANY RESULTS CIMB Group (CIMB MK) 1Q17: Lower Provisions And Commendable Non-Interest Income Growth 1Q17 earnings are 8% above estimates driven by lumpy writebacks. Management remains cautiously optimistic about achieving a 10% ROE vs our 9.8% forecast for 2017 and potentially 10.5-11.0% for 2018. Against a more positive backdrop, we raise our earnings forecast by 8% for 2017 and corresponding target price to RM6.20 (1.12x 2017F P/B). However, we maintain HOLD on CIMB as our earnings forecast already suggests a relatively robust 30% 2017 earnings growth recovery. Entry level: RM5.70. RESULTS Results above estimates. The group s 1Q17 earnings of RM1,180.3m (+45.1% yoy, - 38.1% qoq) was 8% above both consensus and our estimates due to: a) surprise provision writebacks which brought net credit cost to 52bp vs management s full-year guidance of 60-65bp (UOBKH forecast: 60bp), and b) strong qoq swing in forex income from a loss of RM884m in 4Q16 to a gain of RM234m in 1Q17. Writebacks unlikely to repeat over the course of the year. Management indicated that the writebacks pertained to a number of corporate recoveries across all its key geographical operations. As management does not expect the writebacks to repeat over the course of the year, it has retained its full-year net credit cost guidance at 60-65bp. This essentially infers that subsequent quarters run rate for net credit cost will hover at a much higher 63bp vs 1Q17 s 52bp. Commendable revenue drivers. Revenue expanded 12% yoy underpinned by: a) 11% net interest income growth which was supported by 6bp expansion in NIM and stable loans growth of 7%, b) 8% overall fee income growth which was supported by 26.8% commission and fees from loans advances, 8.5% growth in asset management income, 9.3% growth in brokerage income, and c) higher gains on investment securities. Earnings expanded by a stronger 45% quantum as a result of lower net credit cost of 52bp vs 64bp in 1Q16. Asset quality intact. Gross impaired loans balance improved 3.3% qoq with gross impaired loans ratio declining 10bp qoq to 3.17%. In terms of geographical breakdown, Malaysian operation s GIL balance declined 3.5% qoq while Indonesia declined 4.8% qoq. Loans-loss coverage ratio remained largely unchanged at 79.6%. EARNINGS REVISION/RISK Factoring in 1Q17 s lower-than-expected credit cost and stronger non-interest income momentum in 2H17 and 2018, we raise our 2017/18 earnings by 8%/7% VALUATIONS AND RECOMMENDATIONS Maintain HOLD with a higher target price of RM6.20 (1.10x 2017F P/B, 9.9% ROE). The operating dynamics for CIMB points to an improving outlook for 2017. That said, we believe much of this strong earnings recovery has been factored in as reflected by our 29% yoy earnings growth assumption. Potential share price upside from our target price. Just to give a sense of the upside potential, rolling forward our valuations to 2018 against a 10.6% ROE assumption could give rise to a RM7.00 (1.21x 2018 P/B) fair value. KEY FINANCIALS Year to 31 Dec (RMm) 2015 2016 2017F 2018F 2019F Net interest income 9,337 9,826 10,451 11,286 12,161 Non-interest income 4,489 4,386 5,145 5,442 5,687 Net profit (rep./act.) 2,850 3,564 4,664 5,207 5,793 Net profit (adj.) 3,332 3,564 4,664 5,207 5,793 EPS (sen) 39.5 41.8 52.8 57.7 62.8 PE (x) 15.5 14.7 11.6 10.6 9.8 P/B (x) 1.3 1.1 1.1 1.0 1.0 Dividend yield (%) 2.4 3.3 3.4 3.8 4.1 Net int margin (%) 2.7 2.7 2.6 2.6 2.6 Cost/income (%) 60.1 54.4 51.8 50.7 49.9 Loan loss cover (%) 84.7 79.8 81.6 87.7 92.7 Consensus net profit - - 4,321 4,820 5,384 UOBKH/Consensus (x) - - 1.08 1.08 1.08 Source: CIMB Group, Bloomberg, UOB Kay Hian HOLD (Maintained) Share Price Target Price RM6.13 RM6.20 Upside +1.1% (Previous TP RM5.60) COMPANY DESCRIPTION CIMB Group is Malaysia s largest investment bank and second-largest consumer bank and one of Southeast Asia s leading universal banking groups STOCK DATA GICS sector Financials Bloomberg ticker: CIMB MK Shares issued (m): 9,052.1 Market cap (RMm): 55,4889.4 Market cap (US$m): 12,925.6 3-mth avg daily t'over (US$m): 23.3 Price Performance (%) 52-week high/low RM5.99/RM4.13 1mth 3mth 6mth 1yr YTD 9.3 20.7 32.1 43.5 35.9 Major Shareholders % Khazanah Nasional Berhad 28.6 Employees Provident Fund Board 12.9 FY17 NAV/Share (RM) 5.57 FY17 CAR Tier-1 (%) 13.86 PRICE CHART 6.50 6.00 5.50 5.00 4.50 4.00 (lcy) 3.50 300 200 100 CIMB GROUP HOLDINGS BHD CIMB GROUP HOLDINGS BHD/FBMKLCI INDEX (%) 0 May 16 Jul 16 Sep 16 Nov 16 Jan 17 Mar 17 May 17 Source: Bloomberg ANALYSTS Volume (m) Keith Wee Teck Keong +603 2147 1981 keithwee@uobkayhian.com 150 140 130 120 110 100 90 80 8

TARGETS FOR 2017 & 1Q17 Achievement (%) 2017 Target 1Q17 yoy % chg ROE 9.5 10.3 Dividend Payout 40-60 - Total Loan Growth * 7.0 12.2* (6.8**) 1Q17 PBT BY DIVISION Commercial 8.8% Wholesale 45.0% KEY ASSUMPTIONS (%) 2017F 2018F 2019F Loan Growth 7.0 7.5 7.5 NIM 2.61 2.57 2.53 Credit Cost (bp) 60 55 50 ROE 9.8 10.5 11.0 Source: UOB Kay Hian Loan Loss charge (bps) 60-65 52 Cost to Income Ratio <53 52.6 CET1 >11.5 11.5 Consumer 34.8% Group Funding 9.2% GAMI 2.2% * Excluding bad bank, ** Excluding Forex fluctuation Source: CIMB Group Source: CIMB Group 1Q17 RESULTS Profit & Loss (RMm) 1Q17 1Q16 yoy % chg UOBKH Estimate Deviation (%) Remarks Net Interest Income 2,645.5 2,383.8 11.0 2,608.5 1.4 Supported by steady 7% loans growth (adjusted for forex) and positive 6bp yoy NIM expansion Islamic Banking 474.0 437.5 8.3 447.3 5.4 Fees & Commissions 674.7 624.3 8.1 704.9 (4.5) Supported by strong loans related fee, brokerage and asset management income growth Net Trading Income 237.1 114.7 106.7 265.2 (11.9) Higher gains on investment securities Other Operating Income 326.5 329.7 (1.0) 193.2 40.9 Total Income 4,357.8 3,890.0 12.0 4,218.2 3.2 Operating Expenses (2,295.7) (2,136.9) 7.4 (2,244.6) 2.2 1Q17 s 7.4% yoy growth hovering above our full year 4% growth driven largely by a 10.5% yoy growth in staff cost PPOP 2,062.1 1,753.1 17.6 1,973.4 4.2 Allowance for impairment (424.5) (464.6) (8.6) (517.2) (14.4) Net credit cost of 52bp below our 60bp full-year estimates due to writebacks. on loans Impairment on securities (30.9) (50.6) (38.8) - 100.0 PBT 1,613.6 1,123.1 43.7 1,485.8 7.9 Net Profit 1,180.3 813.8 45.0 1,083.1 8.2 Above due to lumpy writebacks and stronger-than-expected forex gains EPS (sen) 13.0 9.5 36.6 DPS (sen) 0.0 0.0 - BVPS (RM) 5.19 4.83 7.5 Financial Ratios (%) 1Q17 4Q16 qoq chg (ppt) 1Q16 yoy chg (ppt) NIM 2.73 2.76 (0.03) 2.67 0.06 Supported by strong CASA growth and slower fixed deposit growth Loan Growth, yoy 0.2 6.3 (6.08) (2.8) 3.03 Ex-forex impact loans expanded 6.8% driven mainly from Malaysia (+11.8%). Indonesia and Thailand recording slight contraction in loans trend. Deposit Growth, yoy 4.6 (0.1) 4.67 (0.2) 4.75 Loan/Deposit Ratio 90.0 93.8 (3.80) 89.1 0.93 Cost/Income Ratio 52.7 51.7 0.96 57.4 (4.68) Still hovering above T18 target of 50% but in line with 2017 targets of below 53% ROE 10.2 7.6 2.58 7.9 2.33 Above 2017 target of 9.5% partly fuelled by surprise writebacks. Excluding writebacks, it would have been closer to 9.5%. NPL Ratio 3.2 3.3 (0.12) 3.0 0.14 Stable due to broad based improvement across most key markets Credit Costs (bp) 52.3 92.8 (40.5) 64.2 (11.8) Loan Loss Coverage 79.6 79.8 (0.24) 84.8 (5.26) CET-1 CAR 11.3 11.6 (0.24) 10.6 0.71 Fully loaded CET1 at 11.5% Source: UOB Kay Hian 9

PROFIT & LOSS Year to 31 Dec (RMm) 2016 2017F 2018F 2019F Interest income 18,826 20,088 21,718 23,601 Interest expense (9,000) (9,637) (10,432) (11,440) Net interest income 9,826 10,451 11,286 12,161 Fees & commissions 2,611 2,820 3,017 3,168 Other income 1,775 2,325 2,425 2,519 Non-interest income 4,386 5,145 5,442 5,687 Income from islamic banking 1,704 1,823 1,914 2,010 Total income 15,916 17,419 18,643 19,858 Staff costs (4,821) (5,081) (5,396) (5,733) Other operating expense (3,831) (3,936) (4,055) (4,177) Pre-provision profit 7,264 8,402 9,192 9,948 Loan loss provision (2,409) (2,010) (2,049) (2,002) Other provisions (236) 0 0 1 Associated companies 116 25 0 0 Other non-operating income 149 0 0 0 Pre-tax profit 4,884 6,418 7,143 7,947 Tax (1,251) (1,644) (1,830) (2,036) Minorities (69) (110) (106) (118) Net profit 3,564 4,664 5,207 5,793 Net profit (adj.) 3,564 4,664 5,207 5,793 BALANCE SHEET Year to 31 Dec (RMm) 2016 2017F 2018F 2019F Cash with central bank 8,484 12,129 13,039 14,016 Govt treasury bills & securities 13,854 14,131 14,414 14,702 Interbank loans 2,308 2,534 2,765 3,016 Customer loans 315,373 336,990 361,793 388,507 Investment securities 70,826 80,028 90,299 101,765 Derivative receivables 12,006 13,447 15,061 16,868 Associates & JVs 251 264 277 291 Fixed assets (incl. prop.) 2,140 2,019 1,894 1,767 Other assets 60,523 70,670 79,816 90,042 Total assets 485,767 532,211 579,357 630,975 Interbank deposits 28,736 29,717 30,736 31,797 Customer deposits 336,246 364,826 397,661 435,439 Derivative payables 16,535 17,318 18,138 18,997 Debt equivalents 21,361 21,361 21,361 21,361 Other liabilities 35,810 48,705 57,344 65,054 Total liabilities 438,688 481,927 525,240 572,648 Shareholders' funds 45,508 48,604 52,330 56,422 Minority interest - accumulated 1,571 1,681 1,787 1,905 Total equity & liabilities 485,767 532,211 579,357 630,975 OPERATING RATIOS Year to 31 Dec (%) 2016 2017F 2018F 2019F Capital Adequacy Tier-1 CAR 13.6 13.9 14.0 14.0 Total CAR 19.4 20.5 20.3 20.0 Total assets/equity (x) 10.7 10.9 11.1 11.2 Tangible assets/tangible common equity (x) 13.6 13.7 13.6 13.5 Asset Quality NPL ratio 3.3 3.4 3.3 3.2 Loan loss coverage 79.8 81.6 87.7 92.7 Loan loss reserve/gross loans 2.6 2.8 2.9 3.0 Increase in NPLs 17.2 10.0 4.6 5.4 Credit cost (bp) 83.9 58.0 55.0 50.0 Liquidity Loan/deposit ratio 93.8 92.4 91.0 89.2 Liquid assets/short-term liabilities 6.7 7.2 7.0 6.7 Liquid assets/total assets 5.1 5.4 5.2 5.0 KEY METRICS Year to 31 Dec (%) 2016 2017F 2018F 2019F Growth Net interest income, yoy chg 5.2 6.4 8.0 7.8 Fees & commissions, yoy chg (4.1) 8.0 7.0 5.0 Pre-provision profit, yoy chg 18.2 15.7 9.4 8.2 Net profit, yoy chg 25.1 30.8 11.6 11.3 Net profit (adj.), yoy chg 7.0 30.8 11.6 11.3 Customer loans, yoy chg 8.6 6.9 7.4 7.4 Customer deposits, yoy chg 5.9 8.5 9.0 9.5 Profitability Net interest margin 2.7 2.6 2.6 2.6 Cost/income ratio 54.4 51.8 50.7 49.9 Adjusted ROA 0.8 0.9 0.9 1.0 Reported ROE 8.2 9.9 10.3 10.7 Adjusted ROE 8.2 9.9 10.3 10.7 Valuation P/BV (x) 1.1 1.1 1.0 1.0 P/NTA (x) 1.5 1.4 1.3 1.2 Adjusted P/E (x) 14.7 11.6 10.6 9.8 Dividend Yield 3.3 3.4 3.8 4.1 Payout ratio 47.8 40.0 40.0 40.0 10

COMPANY RESULTS Sunsuria (SSR MK) 2QFY17: Earnings Growth On Track Sunsuria reported a 2QFY17 net profit of RM18.0m, lifting 1HFY17 earnings to RM28.6m. While 1HFY17 earnings account for only 29% of our forecast, we deem the results in line as we expect 2H numbers to be significantly stronger. In 1HFY17, the group raked in RM200m in property sales on the back of RM147m in launches. While fundamentals remain intact, we advise investors to capitalise, given the share price run-up of over 42% ytd. Downgrade to HOLD with a target price of RM1.50. Entry price: RM1.20. 2QFY17 RESULTS Year to 30 qoq yoy yoy Sep (RMm) 2QFY17 1QFY17 % chg % chg 1HFY17 % chg Revenue 103.7 63.8 62.5 167.1 167.5 174.2 Property Development 103.5 63.6 62.7 172.4 167.2 209.2 Others 0.2 0.2 (0.6) (80.0) 0.3 (95.3) COGS (58.1) (31.6) 83.7 100.2 (89.7) 109.3 EBIT 32.2 18.8 71.5 >100.0 50.9 267.8 Property development 34.8 20.0 73.9 >100.0 54.9 >100.0 Manufacturing (2.7) (1.3) 109.9 (204.6) (3.9) (141.8) PBT 31.5 18.2 73.7 492.8 49.7 197.9 Property development 34.4 19.7 74.7 >100.0 54.1 >100.0 Others (2.8) (1.5) 86.8 (198.3) (4.4) (144.4) Taxation (9.4) (4.0) 137.8 347.0 (13.4) 235.0 PATMI 18.0 10.6 69.4 >100.0 28.6 125.9 Margins +/- ppt +/- ppt +/- ppt EBIT 31.0% 29.4% 1.6 17.3 30.4% 7.7 PBT 30.4% 28.5% 2.0 16.7 29.7% 2.4 Source: Sunsuria Bhd, UOB Kay Hian RESULTS Sunsuria s results are within expectations, with 2QFY17 net profit coming in at RM18.0m (+69.4% qoq, +>100.0% yoy) on revenue of RM103.7m (+62.5% qoq, +>100% yoy). Top-line and net profit growth were mainly being driven by the ongoing progress of its key developments. While its 1HFY17 net profit of RM28.6m (+>100.0% yoy) accounts for only 29% of our full-year estimate, we deem the results in line as we expect 2HFY17 results to be significantly stronger due to more accelerated property development billings. KEY FINANCIALS Year to 30 Sep (RMm) 2015 2016 2017F 2018F 2019F Net turnover 66 202 536 843 921 EBITDA 7 57 135 156 180 Operating profit 8 57 135 156 180 Net profit (rep./act.) 8 68 98 119 138 Net profit (adj.) 8 68 98 119 138 EPS (sen) 1.0 8.5 12.2 14.9 17.2 PE (x) 143.8 16.5 11.5 9.5 8.2 P/B (x) 1.9 1.7 1.5 1.3 1.2 EV/EBITDA (x) 148.5 18.6 7.8 6.7 5.8 Dividend yield (%) 0.0 0.0 1.7 2.1 2.4 Net margin (%) 12.0 33.6 18.2 14.1 14.9 Net debt/(cash) to equity (%) (9.9) 19.3 (10.8) (11.7) (20.2) Interest cover (x) n.a. n.a. 21.9 n.a. n.a. ROE (%) 2.3 10.8 13.6 14.7 15.1 Consensus net profit - - 98 138 182 UOBKH/Consensus (x) - - 1.00 0.86 0.76 Source: Sunsuria Bhd, Bloomberg, UOB Kay Hian HOLD (Downgraded) Share Price Target Price RM1.41 RM1.50 Upside +6.4% COMPANY DESCRIPTION Sunsuria is a property developer with development exposure in the Klang Valley and Iskandar Malaysia. STOCK DATA GICS sector Real Estate Bloomberg ticker: SSR MK Shares issued (m): 798.8 Market cap (RMm): 1,126.4 Market cap (US$m): 262.5 3-mth avg daily t'over (US$m): 0.1 Price Performance (%) 52-week high/low RM1.50/RM0.815 1mth 3mth 6mth 1yr YTD (3.4) 8.5 50.0 63.0 42.4 Major Shareholders % Datuk Ter Leong Yap 57.5 Ruby Technique Sdn Bhd 5.7 FY18 NAV/Share (RM) 1.07 FY18 Net Cash/Share (RM) 0.12 PRICE CHART 1.60 1.40 1.20 1.00 0.80 0.60 3 (lcy) SUNSURIA BHD SUNSURIA BHD/FBMKLCI INDEX 2 1 Volume (m) (%) 0 May 16 Jul 16 Sep 16 Nov 16 Jan 17 Mar 17 May 17 Source: Bloomberg ANALYSTS Ridhwan Effendy +603 2147 1989 ridhwaneffendy@uobkayhian.com 190 170 150 130 110 90 70 11

Property development PBT margin continues to normalise. Sunsuria reported a PBT margin of about 30.4% (+2.0 ppt qoq, +16.7 ppt yoy) which is above our full year expectation of 24%. However, we expect margins in the subsequent quarters to trend down, as the group begins to recognise additional marketing expenses for its development launches. STOCK IMPACT RM147m worth of launches undertaken with another RM1.4b to go. For the full year, the group has earmarked about RM1.57b worth of properties to be launched, mainly at Sunsuria City (RM1.03b), followed by Sunsuria Forum (RM459m) and Suria Hills (RM83m). As of 1HFY17, the group has launched about 9% (RM147m) of its full-year target. The remaining properties that are being earmarked for launch include the remaining phases at Sunsuria City and Sunsuria Forum. The projects which are to be offered at Sunsuria City are mostly within the affordable range, with 50% of the properties lined up for launch priced below the RM500,000 mark, while 76% would be below the RM700,000 mark. Sold RM76m worth of properties in 2QFY17, lifting 1HFY17 sales to RM200m. In 2QFY17, Sunsuria had locked in about RM76m in property sales, driven by The Olive development in Sunsuria City (RM45m), followed by the shop offices in Sunsuria City (RM16m). Cumulatively for 1HFY17, the group locked in about RM200m worth of property sales on the back of RM147m worth of launches. Aside from that, it also has bookings of over RM153m that have yet to be converted into sales. RNAV DCF of Projects RMm RM/share Sunsuria City 1,231.9 1.54 Sunsuria Forum (Forum 2) 65.8 0.08 Suria Hills - Bungalow Lots 13.7 0.02 Shareholders Funds 687.8 0.86 RNAV 1,999.2 2.50 Discount 40% Target Price 999.6 1.50 Source: UOB Kay Hian ASSUMPTIONS (RMm) FY17F FY18F FY19F Sales 950.1 1,009.7 1,103.3 Revenue 536.3 843.0 921.1 PATMI 97.7 118.8 137.6 Source: UOB Kay Hian FY17 LAUNCHES Project (RMm) Sunsuria City 1,031 Sunsuria Forum 459 Suria Hills 83 Total 1,573 Source: Sunsuria, UOB Kay Hian Unbilled sales of RM510m to set strong earnings base for FY17-18. As of May 17, the group s unbilled sales stood tall at RM510m, representing a revenue cover of 2.5x against its FY16 revenue. In terms of an unbilled sales breakdown, Sunsuria City accounts for 67% of unbilled sales, Suria Residence 16% and Sunsuria Forum 17%. Suria Residence s revenue of RM16m is expected to be fully booked in 2HFY17. Assuming a 20% PAT margin, Suria Residence alone would set a RM20m base for net profit in FY17. In addition, phases of Sunsuria City and Sunsuria Forum that have yet to be billed amount to about RM341m (which would be recognised progressively) and could bring in PATMI contributions of about RM34m yearly in FY17F/18F. EARNINGS REVISION/RISK No change to our earnings estimates. Key risks include: a) execution risks, b) tighter lending policies by banks, and c) changes in prices of raw materials that could impact margins. VALUATION/RECOMMENDATION Downgrade to HOLD with an unchanged target price of RM1.50, based on a 40% discount to our RNAV of RM2.50/share and implying 10x FY18F PE. We advocate investors capitalise their gains as we believe the share price, which has risen 42% ytd, has fully reflected the earnings growth and value potential. Entry price: RM1.20. SHARE PRICE CATALYST Good take-up rates for developments. 12

PROFIT & LOSS Year to 30 Sep (RMm) 2016 2017F 2018F 2019F Net turnover 202 536 843 921 EBITDA 57 135 156 180 Deprec. & amort. (1) 0 0 0 EBIT 57 135 156 180 Associate contributions 1 0 0 0 Net interest income/(expense) 17 (6) 0 1 Pre-tax profit 75 129 156 181 Tax (12) (31) (38) (43) Minorities 5 0 0 0 Net profit 68 98 119 138 Net profit (adj.) 68 98 119 138 BALANCE SHEET Year to 30 Sep (RMm) 2016 2017F 2018F 2019F Fixed assets 113 113 113 113 Other LT assets 404 404 404 404 Cash/ST investment 90 304 321 416 Other current assets 595 653 881 931 Total assets 1,202 1,474 1,719 1,864 ST debt 9 9 9 9 Other current liabilities 192 386 536 571 LT debt 213 213 213 213 Other LT liabilities 101 101 101 101 Shareholders' equity 681 759 854 964 Minority interest 7 7 7 7 Total liabilities & equity 1,202 1,474 1,719 1,864 CASH FLOW Year to 30 Sep (RMm) 2016 2017F 2018F 2019F Operating (18) 237 45 126 Pre-tax profit 61 129 156 181 Tax (8) (31) (38) (43) Deprec. & amort. 1 0 0 0 Working capital changes (243) 139 (74) (11) Other operating cashflows 171 0 0 0 Investing (230) (4) (4) (4) Capex (growth) (273) 0 0 0 Investments 37 0 0 0 Proceeds from sale of assets 9 0 0 0 Others (4) (4) (4) (4) Financing 224 (20) (24) (28) Dividend payments 0 (20) (24) (28) Issue of shares 55 0 0 0 Proceeds from borrowings 193 0 0 0 Loan repayment (3) 0 0 0 Others/interest paid (22) 0 0 0 Net cash inflow (outflow) (25) 214 17 95 Beginning cash & cash equivalent 89 90 304 321 Changes due to forex impact 26 0 0 0 Ending cash & cash equivalent 90 304 321 416 KEY METRICS Year to 30 Sep (%) 2016 2017F 2018F 2019F Profitability EBITDA margin 27.9 25.1 18.5 19.6 Pre-tax margin 36.9 24.0 18.5 19.7 Net margin 33.6 18.2 14.1 14.9 ROA 6.1 7.3 7.4 7.7 ROE 10.8 13.6 14.7 15.1 Growth Turnover 208.8 165.0 57.2 9.3 EBITDA 698.4 138.2 15.8 15.5 Pre-tax profit 625.5 72.0 21.6 15.8 Net profit 769.4 43.5 21.6 15.8 Net profit (adj.) 769.4 43.5 21.6 15.8 EPS 769.4 43.5 21.6 15.8 Leverage Debt to total capital 24.3 22.4 20.5 18.6 Debt to equity 32.5 29.2 25.9 23.0 Net debt/(cash) to equity 19.3 (10.8) (11.7) (20.2) Interest cover (x) n.a. 21.9 n.a. n.a. 13

SECTOR UPDATE Property Singapore REITs: Rosier Economic Outlook, S-REITs In The Spotlight? We have raised our target prices by about 8% on average on the back of a rosier economic outlook in Singapore, as we raise our long-term growth expectations by 60bp. We opine that S-REITs may be viewed as growth vehicles (instead of the more conventional yield plays). We upgrade FCT and Parkway Life REIT to BUY and downgrade Cache to HOLD. We remain OVERWEIGHT on REITs with AREIT, CCT, FLT and FHT as our top picks. WHAT S NEW Upward revision of S-REIT terminal growth forecasts on the back of strengthening Singapore economic data and estimates. OVERWEIGHT (Maintained) SECTOR PICKS Company Rec Target Price Share Price AREIT BUY 2.97 2.62 CCT BUY 1.94 1.68 FLT BUY 1.11 1.005 FHT BUY 0.80 0.705 Source: UOB Kay Hian Robust US non-farm payroll data released last week exceeded consensus estimates by 14.1%. US unemployment has also hit a record low (since May 07) Bloomberg Fed Fund Futures indicate 100% probability of a rate hike next month. ACTION Maintain OVERWEIGHT, shift towards upcycle as REITs viewed as growth vehicles. We raise our target prices by an average 8% by imputing growth of 60bp into our terminal growth assumption, taking into account our UOB economists rosier Singapore GDP growth targets. Downgrade Cache Logistics to a HOLD (lower occupancies at multi-tenanted buildings) and upgrade FCT and Parkway Life REIT to BUY on valuation grounds. AREIT, CCT and FLT remain our top picks. ESSENTIALS Increasing terminal growth assumptions by 60bp across our S-REIT coverage (excluding FLT). This mirrors UOB Global Economics and Markets 60bp upward revision in 2017 GDP growth target (from 1.8% to 2.4%). We have, however, revised terminal growth rates by 30bp for retail REITs under our coverage over sector headwind concerns. GDP growth targets picking up steam in Singapore. The UOB Global Economics and Markets team recently lifted its 2017 Singapore GDP growth target, with the increased optimism stemming from growth in the tradeables sector (electronics segment). We note that a resilient global economy would have positive ramifications on Singapore, especially as exports accounted for 176% of GDP in 2016, according to the World Bank. We also note that Singapore has seen inflation turn positive since Dec 16, reversing 24 consecutive months of negative inflation (Nov 14-Oct 16). ANALYSTS Vikrant Pandey +65 6590 6623 vikrant@uobkayhian.com Derek Chang +65 6590 6614 derekchang@uobkayhian.com PEER COMPARISON Company Ticker Rec Price @ Target Upside/ (Downside) Market Current Forward Current Forward Book Price/ RNAV Net 24May17 Price to TP Cap PE PE Yield Yield NAV ps Book Ps ROE Gearing (S$) (S$) (%) (S$m) (x) (x) (%) (%) (S$) (x) (S$) (%) (%) Ascendas Reit AREIT SP BUY 2.62 2.97 13.2 7,412 18.7 18.7 6.2 6.2 2.06 1.27 2.21 6.1 33.8 Ascott REIT ART SP HOLD 1.12 1.17 4.5 2,349 19.6 16.6 5.5 6.4 1.29 0.87 1.07 2.8 41.1 CACHE CACHE SP HOLD 0.89 0.96 7.9 803 13.6 13.2 8.2 8.3 0.77 1.15 1.04 6.8 43.1 CapitaL Com Trust CCT SP BUY 1.68 1.94 15.5 4,811 16.6 16.4 5.6 5.7 1.75 0.96 2.59 4.1 38.1 CapitaL Mall Trust CT SP HOLD 1.985 2.04 2.8 6,949 19.0 19.6 5.4 5.2 1.89 1.05 1.84 5.5 35.6 CDL Htrust CDREIT SP HOLD 1.615 1.62 0.2 1,537 18.6 19.0 5.7 5.6 1.54 1.05 1.45 5.9 36.8 FrasersCT FCT SP BUY 2.08 2.26 8.7 1,880 19.1 19.3 5.6 5.5 1.93 1.08 1.92 5.6 29.4 Frasers HTrust FHT SP BUY 0.705 0.80 13.5 1,341 14.4 14.5 7.2 7.2 0.75 0.95 0.81 6.0 33.6 Frasers L&I Tr FLT SP BUY 1.005 1.11 10.4 1,465 18.5 16.9 6.5 6.6 0.91 1.10 0.91 6.6 29.7 Kep REIT KREIT SP BUY 1.095 1.30 18.7 3,528 25.1 24.1 5.7 5.6 1.44 0.76 1.51 3.0 38.4 MapletreeInd MINT SP HOLD 1.815 1.78 (2.1) 3,244 16.1 15.5 6.3 6.6 1.41 1.29 1.55 7.6 29.2 MapletreeLog MLT SP BUY 1.155 1.29 11.8 2,763 16.5 15.9 6.3 6.4 1.04 1.12 0.98 7.5 38.4 PLife REIT PREIT SP BUY 2.58 2.82 9.2 1,555 21.9 21.7 4.7 4.7 1.72 1.50 1.64 7.2 37.6 Suntec REIT SUN SP HOLD 1.8 1.90 5.6 4,471 23.3 24.2 5.7 5.5 2.14 0.84 2.01 3.7 37.7 Source: Bloomberg, UOB Kay Hian 14

S-REITs to transition from being viewed as yield vehicles to growth vehicles, especially in light of encouraging US and Singapore economic data, with Fed fund futures implying a 100% likelihood of a hike next month. Despite the prospects of a rate hike in June, the market could likely view REITs as growth vehicles (instead of the more conventional yield play) and we opine that REITs could continue to be an attractive asset class. Yield compression to the upcycle average spread of 2.8% implies over 23% upside potential for REITs. We prefer deep-value and diversified REITs like CCT and FLT, and those with significant business park exposure, namely AREIT. We opine that AREIT s business/science park and hi-tech portfolio (48% of overall portfolio value) will position it defensively against the slowdown in Singapore from the unprecedented simultaneous supply glut across other industrial segments. RECOMMENDATION, TARGET PRICE AND ASSUMPTION CHANGES Price Recommendation Target Price (TP) Target Price Required Rate Terminal 24 May 17 Old New Old New Change of Return Growth Comments Company (S$) (S$) (S$) (%) (%) (%) Ascendas Reit 2.62 BUY BUY 2.75 2.97 7.9 6.4 1.8 Key changes include: Ascott REIT 1.12 HOLD HOLD 1.15 1.17 1.7 7.7 2.0 CACHE 0.89 BUY HOLD 0.95 0.96 1.1 6.9 1.5 CapitaCom Trust 1.68 BUY BUY 1.75 1.94 10.9 6.7 2.0 CapitaMall Trust 1.985 HOLD HOLD 1.95 2.04 4.6 6.3 1.5 CDL Htrust 1.615 HOLD HOLD 1.47 1.62 10.1 7.4 2.0 FrasersCT 2.08 HOLD BUY 2.15 2.26 5.1 6.3 1.5 Frasers HTrust 0.705 BUY BUY 0.74 0.80 8.1 8.5 2.0 Frasers L&I Tr 1.005 BUY BUY 1.11 1.11 unchanged 7.1 2.5 Kep REIT 1.095 BUY BUY 1.18 1.30 10.2 6.7 2.0 MapletreeInd 1.815 HOLD HOLD 1.69 1.78 5.1 6.6 1.7 MapletreeLog 1.155 BUY BUY 1.20 1.29 7.6 6.7 1.7 PLife REIT 2.58 HOLD BUY 2.50 2.82 12.7 5.9 1.8 Suntec REIT 1.8 HOLD HOLD 1.80 1.90 5.6 6.7 2.0 Source: UOB Kay Hian a) 60bp increase in terminal growth, 30bp for retail REITs due to labour cost pressures and online retail threat. b) Cache Logistics: Lower occupancies at multi-tenanted buildings. c) FLT s TP unchanged due to pure Australian exposure. SENSITIVITY OF TARGET PRICES ------------ Change in Risk Free Rate ------------ ------------ Change in Borrowing Costs ------------ Company Ticker +50bp +75bp +100bp +50bp +75bp +100 bp % chg in TP % chg in TP % chg in TP % chg in TP % chg in TP % chg in TP AscendasREIT AREIT SP (6.5) (9.6) (12.4) (3.4) (5.0) (6.9) AscottREIT ART SP (7.7) (11.2) (14.4) (4.8) (6.9) (9.8) CACHE CACHE SP (5.4) (7.9) (10.3) (4.3) (6.0) (8.0) CapitaComm CCT SP (8.5) (12.2) (15.6) (2.8) (4.2) (5.5) CapitaMall CT SP (8.7) (12.4) (15.9) (5.2) (7.6) (10.1) CDL Htrust CDREIT SP (7.5) (10.9) (14.0) (3.4) (4.6) (6.3) FrasersCT FCT SP (8.7) (12.5) (16.0) (3.3) (5.2) (6.6) Frasers Hosp FHT SP (6.8) (9.5) (12.2) (4.1) (5.4) (8.1) Frasers Log FLT SP (8.5) (12.2) (15.6) (2.8) (4.2) (5.5) Kep REIT KREIT SP (8.5) (12.2) (15.6) (6.8) (9.7) (13.8) MapletreeInd MINT SP (6.7) (9.8) (12.8) (3.3) (4.5) (6.4) MapletreeLog MLT SP (7.3) (10.5) (13.6) (3.9) (5.4) (7.8) PLife REIT PREIT SP (11.7) (16.6) (21.0) (3.3) (5.0) (6.6) Starhill Gbl SGREIT SP (8.3) (12.0) (15.3) (4.9) (7.7) (10.3) Suntec REIT SUN SP (8.5) (12.2) (15.7) (6.1) (9.2) (12.3) Average (7.8) (11.3) (14.5) (4.2) (6.2) (8.4) Source: UOB Kay Hian 15