CIMB Strategy Brief

December 9, 2015
Strategy
NAVIGATING SINGAPORE
Somewhere over the rainbow
Immediate-term outlook is not great but is reflected in prices.

Beyond 2016, we are confident that ASEAN will recover and Singapore will
ride on the coattails of an ASEAN upsurge.
Prosperity for ASEAN is about getting together as one, with tailwinds from
TPP and OBOR. Singapore will be a key hub.
Banks and property will be long-term winners. Balancing all factors, our top
picks are CAPL, CIT, DBS, SPOST, IHH and THBEV.
Leaning towards long-term trends that will play out for individual stocks as
well; other names we like are CEWL, GLL, HOBEE, IP, MAGIC, TIAN, VMS.
Analysts
Kenneth NG, CFA
T (65) 6210 8610
E kenneth.ng@cimb.com
Singapore Research Team
IMPORTANT DISCLOSURES, INCLUDING ANY REQUIRED RESEARCH CERTIFICATIONS, ARE PROVIDED
AT THE END OF THIS REPORT.
If this report is distributed in the United States it is distributed by CIMB Securities (USA), Inc. and is considered
Third-Party Affiliated Research.
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Navigating SingaporeStrategyEquity researchDecember 9, 2015
TABLE OF CONTENTS
Expecting a challenging first half in 2016 ....................................................................................... 5
Play the mega-trends: Its not doom and gloom forever ................................................................ 8
Investment implications: Long-term views, balanced by short-term headwinds .......................... 13
Banks: A credit cycle first, then regionalisation benefits .............................................................. 16
Property & REITs: Supply bump, then its all about demand ....................................................... 20
th
Telcos: Evolution as 4 telco and pay-TV cord-cutting threaten .................................................. 30

Transport & Logistics: Logistics only long-term play after land transport restructuring is done ... 33
Consumer, Gaming, Healthcare: Open markets mean more opportunities, more competitors ... 37
Capital goods: Challenges aplenty for yards, expect to transform into infrastructure plays ........ 42
Commodities: Optimism from slower supply growth ahead doused by rising production cost .... 47
Others: Companies that will thrive and fallen angels ................................................................... 49
2016 sector preferences and country top picks ........................................................................... 52
Company Briefs ........................................................................................................................ 57
Appendices ............................................................................................................................. 316
MCI (P) 072/08/2015
Strategy Note
Singapore
Singapore Strategy
Highlighted companies
City Developments
ADD, TP S$10.47, S$7.15 close
Property play on Singapore as a hub. Growing
recurrent rental income and freed-up capital
from Sentosa are added positives. Most
importantly, valuations are very attractive after
steep underperformance in 2015.
DBS Group
Banks will benefit from regional trade and
project financing (OBOR projects) as MNCs
expand into ASEAN. DBS, with its government
roots, could be involved more deals. Recent
weakness on concerns on credit quality
throws up value.
IHH Healthcare
Ageing population in Singapore and Hong
Kong are great long-term trends for IHH.
Presence in Turkey, India and China provide
exposure to populous, growing markets.
Poor near-term corporate earnings outlook is widely known and reflected in prices. It
is not all doom and gloom. Investing here just needs a longer-term perspective.
The positive mega-trends for Singapore/ASEAN are AEC, OBOR and TPP. These
will fan the winds of prosperity for ASEAN. Singapore will ride on ASEANs coattails.
Banks and property will be long-term winners. Balancing the long term, valuations
and current headwinds, top picks are CAPL, CIT, DBS, SPOST, IHH and THBEV.
Among smaller names, we like CEWL, GLL, HOBEE, IP, MAGIC, TIAN and VMS.
Challenging near-term outlook is priced in

Singapores corporate earnings trend is weak. A property-building binge 3-4 years ago is
contributing to an avalanche of completed supply. Rents are weak and occupancy is
falling. The offshore sector is suffering the aftermath of weak oil prices, with orders
getting cancelled. Both oil and gas and property-related NPLs for the banks are on the
rise, with the weakness in neighbouring ASEAN countries spilling over.
Focus on the future; AEC provides opportunity to leap out

These challenges are also reflected in share prices; there is no point to be overly
pessimistic. However, cheap stocks can stay cheap for a long time, if there are no
catalysts. At current valuations, it is sensible to focus on the outlook beyond 2016.
Ahead, we think that Singapore will sharpen its edge as a hub city in ASEAN. The first
important development is ASEANs commitment to move towards a common market.
Singapore to act as a bridge for Chinas One Belt, One Road policy
Sector ratings
Sector ratings
OVERWEIGHT
NEUTRAL
UNDERWEIGHT
Financials
Commodities
Consumer
Property
Telcos
Gaming
REITs
Transport
The second notable development is Chinas One Belt, One Road (OBOR) policy. China
wants to fund an infrastructure buildout of countries along the Maritime Silk Road.
Whether the intention is to secure resources, win new friends or export its excess
industrial capacity, Chinas resources cannot be ignored. Singapore will not be a direct
recipient of that buildout but as the only Chinese-speaking country in ASEAN, banks
stand as beneficiaries to facilitate that spending across developing ASEAN.
Attracting US MNCs as TPP comes into force

Capital Goods
Sector picks and least preferred

TOP PICKS
LEAST PREFERRED
Financials
OW
DBS, OCBC
UOB, SGX
Property
OW
CAPL, CIT, GL, HOBEE
Wing Tai
REITs
OW
MAGIC, CMT, FCT, CCT
KREIT, CREIT, SUN
Telcos
ST
M1, Starhub
Transport
SIA, SPOST
SMRT, NOL, Tiger
Capital Goods
UW
SCI, EZI
Vard, NCL, SMM
Commodities
FIRST
Wilmar, IFAR, GGR
Gaming/Health
UW
IHH, Tianjin Zhongxin
GENS, Raffles Med
Comsumer
UW
DFI, THBEV, Courts
Super, Petra Foods
Venture, Innovalues, CEWL
Silverlake
The third notable trend is the recent headway towards forging the US-led Trans-Pacific
Partnership. Internationally, the TPP will open up opportunities for companies to enter
new markets. In the context of ASEAN, the progressive opening up of markets under
AEC and TPP may attract more US MNCs to this region in search of Asias new low-cost
manufacturing centres in Indochina. Singapore is a useful hub from which US MNCs can
manage supply chains; offices, warehouses, logistics and banks stand as beneficiaries.
Longer-term winners are office space, banks and logistics

It is not all doom and gloom. Now is a good time to position for a future where Singapore
stands as a hub to manage supply chains in an emerging, low-cost manufacturing
th
th
region. During the 15 -18 centuries, the Spice Trade led to European colonial powers
st
fighting over Singapore as a trading port. The 21 century will be a period where the US
and China jostle for influence in Singapore as it becomes a gateway to the low-cost
manufacturing centres of ASEAN and its potentially sizeable consumer markets.
[X]
Figure 1: Singapore top picks
City
Development
DBS
Capitaland
Analyst
IHH
Kenneth NG, CFA

T (65) 6210 8610
SingPost
Thai
Beverage
AEC, OBOR, TPP will bring prosperity to developing ASEAN, enhance Singapore hub status
Pan Asian exposure will enable the Group to ride on the growth of ASEAN and China
Near-term catalyst include strong residential sales in Vietnam, and a pickup in sales in China
AEC, OBOR, TPP to cement Singapore hub status, City Dev is still the best Singapore proxy
Most attractive factor is valuations, monetisation of Sentosa frees up capital to redeploy
Banks grapple with credit costs near-term, but benefits most long-term on regionalisation
Its government-backed roots makes it best-positioned to fund OBOR inbound FDIs, benefit
from project financing, debt capital markets and eventual REIT listings.
Beneficiary of long-term trend of ageing population in Singapore and Hong Kong
Exposure in young, populous markets of Turkey, India, China provides growth markets
Only exposure to macro trend of preference for e-commerce vs. brick-and-mortar retail
US acquisitions, lowering of ASEAN custom barriers helps SingPost link US and ASEAN
One of the few with a ASEAN platform to ride on the growth of the ASEAN consumer
AEC lowers barriers and raises competition. Having a cash cow to fund that fight is good.
SOURCES: CIMB RESEARCH, COMPANY
IMPORTANT DISCLOSURES, INCLUDING ANY REQUIRED RESEARCH CERTIFICATIONS, ARE PROVIDED AT THE END OF THIS REPORT.
If this report is distributed in the United States it is distributed by CIMB Securities (USA), Inc. and is considered Third-Party Affiliated Research.
Powered by EFA
KEY CHARTS
ASEAN has reason to cheer beyond its
current gloom
Countries entering its demographic sweet spot

Laos
Singapore earnings have not been as badly hit by its own

domestic slowdown as much as it has been snagged by
the malaise in neighbouring ASEAN and China. To
recover, Singapore needs ASEAN to get back up on its
feet. The near-term outlook is tough but peek a little
beyond the horizon and trends look interesting. China is
reaching the end of its demographic sweet spot and it is
likely that parts of Indochina will replace China as a global
manufacturing hub ahead. Poor countries have always
been limited in their ability to level up by available capital.
With AEC kickstarted, there will be ASEAN partners who
are keen to invest in the regions growth.
2015
Philippines
Cambodia
Malaysia
Indonesia
Vietnam
Myanmar
Brunei
Thailand
China
South Korea
Singapore
Hong Kong
Japan
1960 1970 1980 1990 2000 2010 2020 2030 2040 2050 2060 2070 2080
AEC intertwines with OBOR and TPP
Trends
China
greying
population
AEC
Ahead, ASEAN will be a huge magnet for inbound FDIs

because of two other developments: Chinas OBOR and
the US-led TPP. China wants to invest in infrastructure
projects along two main trade routes, partly to forge ties,
partly to utilise its excess building capacities at home. US
wants access to markets so that US companies can boost
exports and create jobs at home. Singapore companies
value-add to China is a common language and local
knowledge. We would not be surprised if Temasek, GLCs
and China SOEs invested more in the region together.
The implication of TPP is that more regional HQs (from
the TPP nations companies) will set up in Singapore.
OBOR
TPP
Implications
IndoChina as new global manufacturing hub, Indonesia to follow
MNCs to shift manufacturing facilities from China to ASEAN
Developing ASEAN grows a middle class
Cross-border ASEAN M&A deals rise.
Supply chain to span across Thailand, Malaysia and Singapore
as custom duties ease; logistics and warehouse to benefit
Singapore SMEs expand to the region. More opportunities but
also more competition
More connectivity in trade and human flow; banks gain from trade
China-backed AIIB to fund developing ASEAN infrastructure
Singapore banks and SWFs has opportunity to act as
intemediaries for Chinese SOE investments
Singapore GLCs morph from shipyard-heavy corporates, to
infrastrcture-heavy
Companies from TPP nations set up ASEAN HQ in Singapore
Singapore office and banks to benefit
Implications for Singapore corporates

The natural beneficiaries in Singapore will be property
and banks and, to a lesser extent, industrial companies as
they evolve from shipyard-heavy to infrastructure-heavy
conglomerates. Demand for office space and business
parks looks bright two years ahead as more MNCs are
likely to soak up space to form a logistics chain that spans
low-cost Myanmar and Vietnam to higher-cost Thailand/
Iskandar-Singapore/Indonesia. Chinese money will aid
infrastructure building to enable connectivity in ASEAN.
Local SMEs will expand across regional markets. Banks
will be on hand to meet the project financing needs from
OBOR or the trade finance demands of businesses.
How to fit that into todays investment view
CIMBs sector calls and stock picks
Our Overweights remain banks, property and REITs.

These sectors already pick themselves on account of
valuations. Longer-term prospects of ASEAN integration
lead us to believe that these are the sectors that will gain
more too as ASEAN recovers. Most other sectors have
fragile near-term earnings prospects or new industry
challenges (telco) to worry about. Our large-cap picks are
CAPL, CIT, DBS, IHH, SPOST and THBEV. Other stocks
we like include China Everbright, GL Limited, Ho Bee,
Innovalues, Mapletree Greater China Commercial Trust,
Tianjin Zhongxin and Venture.
TOP PICKS
LEAST PREFERRED
UOB, SGX
Financials
OW
DBS, OCBC
Property
OW
Wing Tai
REITs
OW
KREIT, CREIT, SUN
Telcos
ST
M1, Starhub
Transport
SIA, SPOST
SMRT, NOL, Tiger
UW
SCI, EZI
Vard, NCL, SMM
Capital Goods
FIRST
Wilmar, IFAR, GGR
Gaming/Health
UW
GENS, Raffles Med
Comsumer
UW
DFI, THBEV, Courts
Super, Petra Foods
Commodities
Silverlake
SOURCE: CIMB, COMPANY REPORTS

Expecting a challenging first half in 2016
Short-term trends are mostly challenging
Corporate earnings trend have not been great. A property-building binge 3-4
years ago is contributing to an avalanche of completed supply in residential,
hotel, office and industrial over the next 12-18 months. Occupancy is falling.
Housing rents are weak and office rents are likely to stay soft. The offshore
sector is suffering the aftermath of low oil prices, with orders getting cancelled,
especially as Sete Brasil contracts (60-70% of order books) stand wobbly.
Offshore support services have seen vessel charter rates and utilisation fall;
those with extended balance sheets are uncomfortably trying to patch things. It
is little wonder that banks bad debt from these sectors has started to tick up.
Outside of these sectors, companies serving the domestic economy have had
to cope with cost pressures (land transport), less deal flow (banks) and lower
tourism receipts (hotels, food and beverage, retail) through the conduit of less
certain household income, a pullback in consumer sentiments and softer
household spending. Consumer companies selling to the region have been hit
by belt-tightening by ASEAN consumers as flailing ASEAN currencies hike
inflation and add to woes of restrained household income. Singapore corporate
earnings have seen its regional leg impaired as foreign subsidiaries show lower
operating and translated profits. In short, Singapore corporate profits have
been hit as the region slows and it can only recover as the region recovers. We
currently forecast almost no earnings growth for CY2016.
Figure 2: EPS upgrades /downgrades trend
Figure 3: Ratio of earnings surprises vs. disappointments
360
2.5
Title:
Source:
340
Positive-negative surprise ratio

Please fill in the values above to have them entered in your report
2.0
320
300
1.5
280
1.0
260
240
0.5
220
CY17
SOURCE: CIMB RESEARCH, COMPANY
3Q15
2Q15
1Q15
4Q14
3Q14
2Q14
1Q14
4Q13
3Q13
2Q13
1Q13
4Q12
3Q12
2Q12
1Q12
4Q11
3Q11
2Q11
Nov-15
1Q11
0.0
Sep-15
4Q10
Jul-15
3Q10
May-15
2Q10
CY16
1Q10
Mar-15
3Q09
Jan-15
4Q09
CY15
200
Figure 4: FSSTI valuations

STI
Core P/E (x)
FD Core P/E (x)
Core EPS growth (%)
Core Net Profit Growth (%)
P/BV (x)
Dividend yield (%)
EV/EBITDA (x)
P/FCF (x, equity)
P/FCF (x, firm)
Net gearing (%)
ROE (%, recurring)
FSSTI level
CIMB/consensus (x)
CY2013
CY2014
CY2015
CY2016
CY2017
14.6x
14.7x
-4%
-3%
1.5x
3.6%
12.6x
13.2x
31.3x
14.1%
10.2%
3,167
14.4x
14.4x
8%
2%
1.4x
3.5%
12.3x
11.6x
19.1x
15.2%
10.1%
3,365
12.6x
12.7x
-3%
-7%
1.2x
4.0%
12.4x
26.4x
21.8x
15.8%
9.2%
2,876
1.05
12.5x
12.6x
1%
1%
1.1x
4.0%
11.3x
10.7x
11.2x
14.2%
9.1%
2,876
0.96
11.2x
11.3x
11%
12%
1.1x
4.3%
10.5x
8.5x
11.0x
13.1%
9.6%
2,876
0.99
SOURCE: CIMB Research
Valuations are cheap but 2015 headwinds could carry over

The only reprieve is that valuations are not expensive. A scan of our stock
coverage universe produces two commonalities: 1) stocks are cheap, and 2)
they have ugly near-term prospects. We are cognisant that cheap stocks can
stay cheap for a long time if they lack catalysts. From the beginning of 2015,
most sectors have been cheap, with the exceptions being healthcare and
telcos. Over the course of the year, cheap valuations just got cheaper, as
evidenced by the second-tier oil and gas stocks, where earnings concerns
mutated into balance sheet concerns. Simply put, value does not work when
there are no catalysts to look forward to. And that seems to be the case
heading into 2016. Yet, the best time to find multi-baggers is when a company
has everything going against it.
Investment view now requires analysis of trends further

ahead
Our 2016 outlook piece tries to look beyond the near-term doom and gloom to
search for that pot of gold at the end of the rainbow. Amidst the reasons why
the stock market will disappoint further, there must also be a bright spot out
there (a case in point is how SingPost transformed from a dying old-economy
stock into a re-modeled e-fulfilment business model, five years on). Sure, some
of the de-rating factors look like they are here to stay. But, it is just as likely that
the cheap valuations of today reflect the fact that nobody has considered the
re-rating factors that can transpire.
The question we ask ourselves is whether earnings and valuation multiples will
go back to the old glory days. For example:
Is Singapore past its peak, with sky-high costs and a unloved, struggling
neighbourhood? Is ASEAN ever going to come back with a vengeance?
Is property over-building the past few years going to contribute to excess

capacity in all property sub-segments and sustained depressed rents?
Are airlines and liners overcapacity ever going to be resolved?
Are oil prices going to stay low for long as shale, solar and LNG comes
into play? Are yards going to be idle for a while?
Do banks have any macro developments to look forward to or are they

due to be overwhelmed by a wave of fintechs?
Is the threat of a fourth telco real? Can the incumbents evolve?
Somewhere over the rainbow, birds do fly high

We believe that in the current climate, it makes sense to think about longerterm trends. A summary of our short-term/long-term thoughts is shown, with
details further in the report. One of the key new developments we focus on is
the emergence of several trade blocs (AEC, Chinas One Belt One Road and
TPP) and the implications they carry for Singapore and ASEAN. We focus on
these global developments instead of the rather staid domestic happenings.
Our conclusion is that somewhere over the rainbows, the birds of ASEAN will
fly high if they fly together.
Structural negativ es
Near-term negativ es
> Ageing population and rising social

spending will necessiate a rise in GST
in future.
> High cost, shortgage of labor
particularly for blue-collar jobs
> Weak m anufacturing sector

> Singapore econom y close to a
technical recession
> Gov ernm ent is giv ing a lot of grants

for productiv ity initiativ es to keep
businesses com petitiv e
> Econom ic restructuring has failed to
lift productiv ity so far
> Strenghtened social safety nets

> Rolled out a progressiv e wage m odel
> Skills training to help keep
workforce skills relev ant with tim es
> Lower dem and from FIs as global

banks downsize am idst rising
regulatory requriem ents
> Spike in com pleted supply ; 7 80k sf

(2 H1 5), 3 ,63 0k sf (2 01 6), 93 0k sf
(2 01 7 ) in Grade A space.
> Up to an additional 1 m of shadow
space as financial institutions shrink
> Owners of new building prefer to

take tim e to build up occupancy ,
rather than to cut rents
> Benefit from hub status; free trade

deals like TPP and AEC, entrenches
Singapore attraction as a ASEAN hub
> Ageing population, high hom e

ownership ratio
> High household debt
> Prices and rental on a slow decline

> Vacancy is rising faster on high
num ber of units being com pleted
> Rising m ortgage rates
> Tenants undertake m ore co-rents
> Lower HDB prices hav e eased

> New sharing econom y (Airbnb)
pressure on the gov ernm ent, rem ov ed helps to part-fill up the slew of
tail-risk of gov ernm ent change
com pleted em pty units with tenants
> Lim ited m ortgage sales and
m ortgage NPLs when price drift down
> Online retailing offers products at

price points that cannot be m atched
> Weak retail sales

> Difficulty in finding staffing
> Retail tenants hav e seen the worst of > New DTL and Thom son line train
labour costs pressures.
network
> Falling rents (or lim ited hikes)
> Potential com petition from Airbnb
> Spike in m ass-m arket room supply

> China, ASEAN, Australia v isitors
account for half of tourism receipts,
and currencies are weak
> Haze from Indonesia
> Maintain high occupancy rate in

excess of 80%
> No new hotel land has been put up

for tender, indicating that post 2 01 7
new room supply could be lim ited
> Industry occupancy has rem ained

between 85-95%
> Lack of new business parks space

post 2 01 7
> Households in regional ASEAN hav e > Worst of cost pressures from labor
to grapple with rising inflation as
cost and rents, hav e already peaked
currencies spiral down
> Lack of dem and for discretionary
consum ption item s when incom es slow
> AEC opens up regional m arkets

> Rise in ASEAN m iddle class on the
back of AEC, OBOR and TPP
> Relativ ely untapped consum er
m arkets in IndoChina
> Anti-corruption driv e in China

unlikely to abate
> Weak ASEAN currencies affects

v isitation from Malay sians and
Indonesians
> High bad debt charges to rem ain
until 2 H1 6
> Expansion into new m arkets

(Resorts World Jeju)
> AEC to driv e m ore international

v isitor arriv als from ASEAN
> High cost in Singapore

> Regional com petition
> Growing num ber of large hospitals

in the region pose as com petition
> Weak currencies of neighbouring
countries, act as headwinds against
m edical tourism
> Pass-on effects from gov ernm ent

initiativ es (CHAS and PG)
> Ageing population

> Increased healthcare expenditure
with growing affluence
> Potential entry of 4 th m obile

operator by m id-2 01 7 could put
pressure on tariffs
> Pay TV 'cord-cutting'
> Rising interest rates are negativ e for
telco y ield play s
> No m obile growth as decline in IDD,

SMS & roam ing offsets data growth
> Pay TV business could face som e
pressure upon NetFlix's entry
> Weak sentim ent ahead of spectrum
auction for new entrant in 1 H1 6
> Fixed Broadband com petition

stabilising
> Telcos will continue to gradually
m anage handset subsidies lower
> Mobile Data usage growth on richer

content, faster networks & new use
cases
> Expansion into adjacent biz, e.g.
digital adv ertising, IoT/M2 M, Big
Data
> Em ergence of Fintechs gnaws on the > Rising NPLs in the region
relev ance of banks in som e aspects
> Slowing loan growth
> NIM expansion with a Fed rate hike
> AEC and OBOR giv e rise to the

opportunity for banks to fund crossborder inv estm ents
> Wealth m anagem ent to benefit from
relaxation of capital controls in China
> Ov ersupply of container ships

> Mid East Gulf carrier expansion
> Big ASEAN LCC orderbook
> Threat to taxi business from Uber
> Singapore bus m arket opens up to
foreign play ers
> European container im ports falling

> Airline y ield pressures negate som e
of the low oil price benefits
> Increasing cost pressure for labour
as well as repair and m aintenance
> Oil prices to rem ain low in 2 01 6

> Som e signs of airline capacity
discipline in ASEAN
> Growing ridership from expanding
bus and rail network
> Long-term av iation dem and growth

from ASEAN, India and China strong
> Container shipping consolidation
could lim it destructiv e com petition
> Bus/rail m ov es to an asset light
m odel with im pov ed m argins
> Prolonged low-oil price env ironm ent

> Alternativ e energy post threats to
offshore exploration
> Longer interv al, lesser m aintenance
needs for new aircraft and engines
> Brazilian contracts

> Weak operating m etrics
> Higher gearing to fund working
capital
> O&M activ ities are backed by Middle > Urbanisation trends in ASEAN new
East OPEC production
econom ies - My anm m ar and Vietnam
spurring property m arket and
dem and for infrastrucuture/ utilities
> Terrorism stokes security spending
> Rising costs, stagnating y ields

> Negativ e perception on palm oil
> Reducing cost com petitiv eness
against oilseeds
> Record palm oil and soy bean stocks

> Weak biodiesel and Chinese dem and
in 2 01 5
> New acctg standards will lead to
lower earnings in 2 01 6
> Higher biodiesel dem and from

Indonesia
> El Nino to reduce supply and
potential boost prices
> Strong dem and from India
re
ea
lth
ca
H
os
oo
ds
Tr
an
Lo sp o
gi rt
st
ic
s
iti
es
Ca
pi
ta
lG
m
od
Co
m
Structural positiv es
> Sm all m arkets for consum er nam es

that focus only on Singapore
> Threat of com petition from big
brands with AEC and TPP
> Changing tastes of new generation
Ba
nk
s
Te
lc
Near-term positiv es
> Structural changes to the Singapore > High incom ing supply of warehouse
econom y as it m ov es up the v alue-add and factory space
chain
> More regulated than other property
segm ents
Ga
m
in
Co
n
su
m
er
In
du
st
ria
ot
el
s
Re
ta
pr il
op
er
ty
Re
si
de
nt
ia
l
ffi
c
Ec
on
om
Figure 5: Summary of long-term vs. short-term views
> Slower new plantings rate to reduce

future supply
> Growing m iddle class group in Asia
will boost consum ption
> Rising biodiesel m andates in
Indonesia and Malay sia
SOURCE: CIMB RESEARCH
Play the mega-trends: Its not doom and gloom forever

Heading into 2016, the slowdown emanating from China and the weakness in
the region look set to weigh down corporate earnings and stock valuations.
Chinas transition from fixed asset investment-reliant economy to a
consumption-driven economy looks like it is here to stay, so net commodity
exporters such as Indonesia and Malaysia, will find it difficult to recover. The
indirect impact of weak Indonesian and Malaysia household incomes filters
through to Singapore via weak tourism receipts and weak investment demand.
Sure, these are difficult times but it is not going to be doom and gloom forever.
We are increasingly optimistic on the growth opportunities for Singapore-listed
corporates. That optimism is rooted in several converging trends, which we
think will: 1) raise the growth potential for ASEAN, and 2) cement Singapores
relevance as one of the hub cities of the world.
The converging mega-trends we have identified are:
Emergence of ASEAN as a viable manufacturing hub for the world as
Chinas supply of cheap labor peaks and it becomes more expensive.
ASEAN becoming a huge magnet for inbound FDIs as: 1) Chinese stateowned enterprises pile into ASEAN (One Belt, One Road policy), and 2) US
MNCs divert capex into ASEAN as the regions cheaper economics become
clear and countries become increasingly open to free trade (TPP).
ASEAN growing as a consumption market. The rise of the middle-income
class in ASEAN will come as infrastructure spend (One Belt, One Road)
accelerate urbanisation and manufacturing jobs gravitate to ASEAN
(Myanmar opening up, AEC, TPP) to fuel the emergence of a real middleclass.
From 2016 to 2020, we believe that Singapore stands to heighten its position
as a strategic hub (in ASEAN) to benefit from these trends as developments
such as AEC, OBOR and TPP play out.
ASEAN Economic Community (AEC): promise of a new day

ASEAN is due to launch its economic integration project, the ASEAN Economic
Community (AEC), at end-2015. The goal of ASEAN economic integration is to
become a single production base where goods can be manufactured anywhere
and distributed efficiently to anywhere within the region. ASEAN wants to work
towards the end goal of freer movement of labour and capital, although, in
reality, integration and the free flow of people and resources will only happen
step by step, sector by sector. The AEC will be a game-changer.
We understand that AEC is meant to achieve integration across some industrial
sectors first, before financial services and capital markets open up eventually.
Understandably, the integration of the financial services is harder to achieve as
some country leaders will try to protect their less-developed financial services
sectors. Among the hurdles that AEC needs to overcome are bringing together
diverging national interests and counteracting economic protectionist sentiment
in key members, like Indonesia. Other than Indonesia, political and military
power brokers in Thailand, Myanmar and Vietnam tend to focus on cementing
power than on facilitating regional integration.
Figure 6: ASEAN country statistics
Brunei
Singapore
Laos
Cambodia
Malaysia
Myanmar
Thailand
Vietnam
Philippines
Indonesia
GDP per capita (US$) Population (m)

73,233
0.4
82,762
5.5
4,987
6.9
3,263
16
24,654
31
4,706
51
14,354
65
5,635
92
6,962
102
10,641
255
Figure 7: Size of country (m population),

vs. GDP per capita (US$)
Figure 8: Where are Asia's cheapest

factory workers? Not China
GDP per capita (US$)

30,000
25,000
Yangon
Phnom Ponh
Dhaka
Vientiane
Hanoi
Ho Chi Minh City
Mumbai
Cebu
Jakarta
Manila
Chennai
Shenzhen
Kuala Lumpur
Bangkok
Guangzhou
Bangalore
Shanghai
Beijing
Malaysia
20,000
15,000
Thailand
Indonesia
10,000
5,000
Laos
Myanmar
Cambodia
Philippines
Vietnam
Monthly base
salary (US$)
100
200
300
400
500
SOURCES: CIMB, Bloomberg
We acknowledge that ASEAN has always been a diverse pot of countries that
are difficult to integrate. However, some notable trends have the potential to
combine to morph into tailwinds of better integration ahead, namely:
China reaching the tail-end of its demographic sweet spot. The supply of
cheap, abundant labour entering its workforce is coming to an end.
The availability of low-cost labor in Myanmar, Cambodia and Laos, plus the
fact that these previously-closed economies are opening to the global
market. Indochina stands to take over as the manufacturing region of Asia.
The availability of capital to spur the development of infrastructure to aid the
connectivity of these countries, particularly with One Belt, One Road. The
lack of capital had previously been an important limitation for developing
countries in their desire to step up to service global markets.
The availability of capital from corporates in other ASEAN markets investing
in the Mekong region as they look to expand from dominant home market
positions to capitalise on new growth markets.
Indonesias likely fading resistance to free markets as: 1) the US courts it to
join TPP, and 2) Indonesia realises the need to build up a manufacturing
sector (on top of infrastructure spending) in an environment where the
demand of its key exports looks flaccid and prices of coal, crude oil, palm oil,
tin and copper look likely to stay low.
Figure 9: Most ASEAN economies experiencing the
demographic sweet spot
Laos
Figure 10: Nominal GDP in billion US$ (% of overall ASEAN

GDP)
2015
Indonesia
Title:
Source:
Thailand
$365,966
Philippines
Cambodia
Malaysia
Malaysia
$878,043
(37.79%)
(15.75%)
$305,033
(13.13%)
Indonesia
Singapore
Vietnam
Myanmar
Philippines
Brunei
Thailand
Vietnam
$274,702
$250,182
(11.82%)
(10.77%)
$155,820 (6.71%)
China
South Korea
Singapore
Myanmar
$53,140 (2.29%)
Brunei
$16,954 (1.93%)
Cambodia
$14,038 (1.60%)
Hong Kong
Japan
1960 1970 1980 1990 2000 2010 2020 2030 2040 2050 2060 2070 2080
Laos
SOURCES: CIMB, UN World Population Prospect
Nominal GDP in Billion USD

(% of overall ASEAN GDP)
$9,418 (1.07%)
SOURCES: CIMB, World Bank data 2012
In our opinion, the changing winds are: 1) China has become expensive, 2)
Myanmar is entering the global economy and Vietnam and the Philippines are
trying to become more market-friendly, and 3) the lack of capital for
infrastructure development (in Indochina) is dissipating as a limitation to
9
development, with AEC, OBOR and TPP attracting FDIs from external
countries. We will touch on this point next. As populous Indochina neighbours
enable Southeast Asia to take up Chinas mantle as the factory of the world in
the next 10-15 years, Indonesia (255m population) also has to move towards
embracing open markets or risk being left behind. An increasingly integrated
ASEAN, with Indonesias participation, is an important tailwind for the region.
Chinas One Belt, One Road: a guide for the dragon

The second implication for ASEAN and Singapore is the ongoing initiative by
China to throw resources into Euroasia, known as the One Belt, One Road (
) policy or OBOR, for short. This started in 2013. At the heart of One Belt,
One Road lies the creation of an economic land belt that includes countries on
the original Silk Road through Central Asia, West Asia, the Middle East and
Europe as well as a maritime road that links Chinas port facilities with the
African coast, pushing up through the Suez Canal into the Mediterranean. The
latter is the one relevant to ASEAN.
Commentators have highlighted that the initiative is premised on geopolitics
and the export of Chinas under-utilised infrastructure building capacities. China
has developed from a poor agricultural country into a global manufacturing
powerhouse in three short decades but that export model is now reaching its
limits as a growth engine while large investments into steel, cement and
aluminum have saddled China with excess capacity in these industries.
Funding construction of overseas infrastructure, such as roads, railways, sea
ports and airports, can help solve the problem of excess capacity. The OBOR
project is funded via two key vehicles - the Asian Infrastructure Investment
Bank (AIIB) and the Silk Road Fund. China has actually started to fund the AIIB.
One of the reasons why we believe new sources of cheap labour in the
Indochina region can enter the global marketplace is the availability of capital.
Figure 11: Chinas One Belt, One Road
SOURCE: CIMB RESEARCH, XINHUA
Chinas One Belt, One Road promises free trade. From the perspective of
investee nations, it means cheap capital. China hopes that it can ultimately
create a broad free trade zone across Asia, parts of Africa and Europe. This is
partly to counter US-driven trade agreements, such as the Trans Pacific
Partnership (TPP). We think the geopolitical reasons are as important as the
st
economic reasons. The 21 century is Chinas century. For a country to
establish itself as a global leader, it needs both hard power (economic might,
military prowess) and soft power (friends, connectivity, well-accepted culture).
Chinas hard power is on the rise but the same cannot be said for its soft power.
10
We believe OBOR is one of Chinas means to finesse its raw economic might
to garner more global acceptance.
We move away from looking at One Belt, One Road from Chinas perspective
and delve further into Singapores and ASEANs perspective. As China makes
investment into ASEAN, what is the value-add of Singapore companies? What
are the implications for Singapore as a country and ASEAN?
Ability to play the middleman: Language is Singapores big advantage.

When Chinese officials seek a counterparty to formulate plans in ASEAN,
Singapore is the only country where that conversation can take place in
Chinese and nothing is lost in translation. Among the countries that the
st
21 century Maritime Silk Road will pass through, Chinas best
relationships are with Singapore, Myanmar and the Philippines.
Ability to soften the perception of China as the acquirer: Many of the

developing countries along the Belt and Road can be politically volatile
and economically vulnerable, including in developing ASEAN. While
Chinas financial assistance can be provided to countries of the OBOR
through AIIB and other mechanisms, these alone cannot guarantee that
counterparts will hold on to their end of the bargain or control public
opinion moving against China. Singapores value proposition is: 1) it will
have a better appreciation of the cultural sensitivities of different countries
in the region on the basis of sheer proximity, 2) Singapores sovereign
wealth fund and government-linked companies have sufficient experience
in rejected overtures (Suzhou Industrial Park, Temasek-Shin Corp, DBSDanamon) to help China manage the negative perceptions of OBORs
foreign direct investments, and 3) it has a successful joint-ownership
template with Malaysia (M+S) for joint-country investments to work.
As a natural check and balance: So far, more than 90% of Chinas

foreign investment has been done through state channels and SOEs. As
SOEs have only government stakeholders to answer to and enjoy state
financial support, there has been little incentive for these companies to
assess cost-benefits and investment returns have been known to be low,
e.g. Chinas overseas mining ventures. Singapore is known to be hardnosed about profitability and losses and a Singapore partner, with
Chinese money and ASEAN support/cooperation investing in developing
ASEAN countries, can achieve its ideal mix.
We believe that Singapore government-linked companies have a role to play in

co-investing in developing ASEAN countries, together with Chinese entities, in
Chinas One Belt, One Road initiatives. Certainly, the banks will have a role to
play in the provision of loan financing for these investments.
Figure 12: Sovereign wealth fund assets under management
Singapore SWF has been investing and facing walls
Rank
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
Country
Figure 13: Assessing Chinas relationship with ASEAN

countries (1 = best, 5 = worst)
Assets (US$Billion)
China
1,534.7
United Arab Emirates
1,214.8
Norway
824.9
Saudi Arabia
673.9
Kuwait
592.0
Singapore
537.6
Hong Kong
417.9
Qatar
256.0
Kazakhstan
156.5
Russia
152.2
United States
142.4
Australia
95.3
South Korea
84.7
Libya
66.0
Iran
62.0
Algeria
50.0
Malaysia
41.6
Brunei
40.0
Azerbaijan
37.3
France
25.5
SOURCES: CIMB Research, Wikipedia
11
SOURCES: CIMB, Various sources
Trans-Pacific Partnership = more inbound MNCs to SG

The third global development that will weigh in with implications for ASEAN and
Singapore is the US-led Trans-Pacific Partnership (TPP) negotiations. The TPP
is a wide-ranging, multi-country free trade agreement and meant to not only
reduce trade barriers but to also act as a treaty to oblige TPP countries to open
up access to home markets, adopt stricter labour and environmental rules,
provide stronger legal protection to drug companies and lengthen copyright
protection. Interestingly, China is not a signee, which suggests that the TPP is
also a vehicle for the US to leverage its soft power on Asia. TPP talks were
initiated as far back as November 2009 and an agreement was finally reached
on Oct 2015 by the twelve Pacific Rim countries after seven years of
negotiation. Although it has yet to be ratified, US President Obama has stated
his confidence in getting it through before his term ends.
TPP negotiations are closed-door in nature so outsiders have little knowledge
of the ongoing talks. Our impression of the TPP is that the wide spread of
negotiated areas suggests that TPP, once ratified, could significantly change
the way the member countries treat companies of other member countries (as
an example, Singapore currently has an existing FTA with the US, which
requires Singapore to treat property purchases by an American citizen the
same way as it does a local, i.e. an American is not subjected to additional
buyer stamp duty on his first property purchase). Our conspiracy theory about
why TPP negotiations seem to be making headway is that the US is feeling the
urgency after China announced its One Belt, One Road initiative.
In the ASEAN context, only Brunei, Malaysia and Singapore are TPP signees
now. Indonesia has been cited on its intention to join the TPP eventually. We
believe that the implication of TPP is that US MNCs, being leading global
companies generally, will extend their presence more into the TPP countries.
Inversely, with restrictions lifted, it will also make it easier for Singapore SMEs
to expand or sell to TPP markets.
Figure 14: The twelve TPP nations, plus South Korea (in talks)
Figure 15: Assessing US relationships with ASEAN countries

(1 = best, 5 = worst)
SOURCE: CIMB RESEARCH, Various sources
12
Investment implications: Long-term views, balanced by

short-term headwinds
Trend #1: Singapore as a node for US and China to project
into ASEAN
In the relations chart above, Singapore stands as the one country in ASEAN
that has good relationships with both China and the US. Its closeness with
China lies in its Chinese cultural heritage (since the bulk of Singapores earlier
generations are from China) and a track record of working together on issues
such as urban planning. Its closeness with the US lies in Singapores policy of
free trade and open markets, much aligned with the US. In the region, the
Philippines comes close as the second country with good relationships with
both China and the US while Myanmar is close to China but not with the US.
We think the triple development of AEC, OBOR and TPP has the potential to
strengthen Singapores position as a hub in ASEAN.
First, as the various ASEAN markets open up to each other under AEC, it will
spur local companies to head towards neighbouring markets on their own or
through M&As. The three sectors that we expect to see the most cross-border
deals are: 1) government-linked companies, like Keppel Corp and Sembcorp
Industries, making investments in infrastructure and utilities assets (in Dec 15,
Sembcorp announced it was building a power plant in Myanmar), 2) oil and gas
investments heading into Myanmar, and 3) consumer companies trying to go
regional. Some of these overseas ventures could have the backing of Chinese
capital in the form of funding from China-led AIIB and joint funding from other
banks (in Nov 15, the Chinese bought Malaysias 1MDB power assets).
Obviously, Singapore banks will have a hand in the game by being the
facilitator of project finance loans, debt paper issuance and the eventual listing
of business trusts for these infrastructure assets. Also, Singapore stands as an
important partner for Chinas One Belt, One Road investments for the various
reasons cited above. We view Singapore banks and industrials as longerterm beneficiaries of the AEC and OBOR developments.
Second, as the TPP becomes ratified, we think Singapore will be an important
platform from which US MNCs can expand their presence into ASEAN, to
manage their investments in ASEAN. The need for US MNCs to expand into
ASEAN lies in the quest to find the next cheap, efficient manufacturing centres
after China. China used to be the destination of choice but the global backdrop
of an increasingly-expensive China labour force and one that is soon past its
demographic sweet spot begets the future trend of developing ASEAN taking
over the mantle as the factory of the world. Today, the cheapest factory
workers in Asia are in Cambodia, Myanmar, Bangladesh, Laos and Vietnam.
Four out of these five countries are in Indochina and are part of AEC. Sure,
investments in low-cost manufacturing centres in ASEAN do not need to go
through Singapore but the financing of factories in Myanmar and such have
typically been done through Singapore, mainly because of an undeveloped
banking system in the target country. So, banks are natural beneficiaries if
Indochina becomes the next manufacturing hub of the world.
Among the ASEAN nations, Indonesia is almost just as cheap and certainly
much more populous. President Jokowis pro-market policies suggest that,
given time, Indonesia is likely to jump on the bandwagon. Alongside the
positives of cheap labour in Indochina and Indonesia, the catch was usually an
unstable political climate. That negative looks to be much in check today, with 1)
Vietnams and Indonesias business climates improving and views of the
government generally positive, and 2) Myanmar looking to head the right
direction as well after democratic elections. Stability is all the reason why
ASEAN is increasingly in focus as a manufacturing region. Singapore will not
be a manufacturing location but, with ASEANs emergence as a global
manufacturing centre, Singapore is useful as a credit facilitator and as a
regional office to manage MNCs multiple presence in various ASEAN
countries. We view offices, business parks, banks and logistics plays as
beneficiaries of the TPP/AEC development.
13
Figure 16: Singapore office has a supply peak but new supply
growth will be muted beyond 2017
Figure 17: Singapore industrial has a supply peak but new

supply growth will be muted beyond 2017
(000 sqm)
sf
4000000
2,250
3500000
2,000
100%
Title:
Source:
95%
1,750
3000000
Please fill in the values above to have them entered in your rep
1,500
2500000
90%
1,250
85%
2000000
1,000
1500000
750
80%
500
1000000
75%
250
500000
70%
0
2015
2016
CBD
2017
CBD Fringe
2018
2019
Decentralised
Supply
Demand
Occupancy
Trend #2: Urbanisation in developing ASEAN

Our second theme, looking further beyond the horizon, is stocks that can
benefit from urbanisation. As AEC implementation pushes ASEAN towards a
single market and production base and as China hits the end of the road for
bountiful supply of cheap labour, the triple development of AEC, OBOR and
TPP will see FDI inflows to developing ASEAN countries. The follow-on effects
we envision include: 1) a shift of global manufacturing centres from China to
developing ASEAN, and 2) infrastructure development partly funded by OBOR
and partly by MNCs foreign direct investments, which will create jobs in
ASEAN urban centres and stoke urbanisation in ASEAN. Anecdotally, no
country has moved from low-income to middle-income status without
experiencing significant rural-urban migration. Urbanisation and the emergence
of a real middle-income consumer class tend to come hand-in-hand. Studies
backing our view expect: 1) the rate of urbanisation in ASEAN to rise from 48%
to 56%, 2) ASEAN to experience a high 17% urbanisation growth rate, and 3)
65% of households to be brought up to middle-income status by 2030.
The initial beneficiaries of industrialisation will be the direct infrastructure,
utilities and property companies in each of these developing ASEAN countries.
The indirect beneficiaries from the Singapore stock market will be: 1)
government-linked companies Keppel Corp and Sembcorp Industries,
which may evolve from being shipyard-heavy conglomerates into utilities- and
infrastructure-focused conglomerates, and 2) property companies, which may
increasingly take up projects in neighbouring ASEAN countries given a degree
of over-building in Singapore and China over the past decade.
Figure 18: Urbanisation rates across
countries of different income tiers
Figure 19: ASEAN will enjoy one of the

fastest growth rates in urbanisation over
the next 15 years
% Grow th in Urbanisation
% Urbanisation
100
90
2015
80.4
Oceania
2030
83.2
80
%
100
Title:
Source:
0.8
N. America
3.2
S. America
3.3
60
51.3
50
Europe
55.8
38.2
40
30.8
30
Please fill in the values above80

to have them entered in your Please
report fill in the values above to ha
#VALUE!
60
6.0
53
47
50
9.0
40
World
11.1
30
20
10
East Asia
29
17.1
19
20
High-income Middle-income
countries
countries
ASEAN
Low-income
countries
SOURCE: CIMB, World Urbanisation Prospects 2014
69
65
70
Central Asia
ASEAN
2030
79
4.6
West Asia
47.6
Title:
2010
Source:
90
70
59.1
Figure 20: Proportion of middle-income

families - the rise of the middle-income
group in ASEAN
19.2
10
Sub-saharan
Africa
19.9
0.0
5.0
10.0
15.0
20.0
0
25.0
SOURCE: CIMB, World Urbanisation Prospects 2014
ASEAN
China
India
LatAm
SOURCES: CIMB, ADB Institute;

Note: Middle Income = daily expenditure of US$10 to US$100
14
Trend #3: Rise of the middle-income group in ASEAN

ASEAN is comprised of 600m people across ten countries. ASEANs
population is projected to reach 650m by 2020, with half of the population
under the age of 30. The ADB Institute projects 65% of ASEAN households to
be in the middle-income bracket by 2030. Macro projections aside, we do
believe that there is due cause for optimism for the reasons above. These
numbers put ASAEAN as one of the worlds few unsullied growth stories, i.e.
right population size, right age and the right stage to start consuming more as
they become middle class.
The question is: what do they consume? Our consumption preference graphs
below show that the bulk of Indochina and Indonesia is in the GDP per capita
range where consumption of meats will increase as incomes grow. Only as
incomes grow further, will consumer durables come into play. Regionally,
Charoen Pokphand Foods, Japfa, Malindo Feedmill, GFPT, Indofood,
Mayora Indah, Universal Robina and Super Group are all plays on basic
food consumption, i.e. plays on the rise in incomes of the masses. Here,
Singapore-listed names do have to contend with a fair bit of competition.
Figure 21: Food consumption patterns - more meat as incomes
grow; most of developing ASEAN is at the sweet spot for food
Figure 22: Potential for category of consumer goods to show

most growth and changes with GDP per capita brackets
Luxury Goods/Property
Household expenditure per Capita (PPP)
25,000
Singapore
20,000
15,000
Consumer
Durables
Brunei
Malay sia
10,000
Thailand
Consumer
Staples
Indonesia
5,000 Philippines
Laos Vietnam
My anmar
Cambodia
0
0
10,000 20,000
30,000
40,000
50,000
60,000
70,000
80,000
GDP per Capita ('000)
SOURCE: CIMB, FAOSTAT, IMF, WORLD BANK
SOURCES: CIMB RESEARCH
Trend #4: Intra-ASEAN M&As

Two indirect ways to play a more integrated ASEAN and the growing wallet of
the ASEAN masses are telcos and banks. Telcos, however, face an industrywide threat of over-the-top (OTT) services eating up old pricing models and we
think the threat will be accentuated with TPP bringing in more US players.
In ASEAN, we believe banks not only benefit from the scope for more retail
banking activities but also more M&As. Since 2011, a wave of M&A has been
taking place. Among the highest-profile acquisitions were: 1) Thai Beverage
buying F&N (US$11.2bn), 2) CP All buying retailer Siam Makro, and 3) Hello
Axiata, the Cambodian subsidiary of Axiata, buying Latelz in Cambodia. Prior
to this, UOB, OCBC, DBS, CIMB, Maybank and Bangkok Bank had all made
regional moves. The past two years have seen a marked decline in intraASEAN M&As as growth prospects tumble significantly. In our opinion, when
the region finds some stability and the impact of AEC becomes clear, regional
M&As will pick up. Banks will be beneficiaries.
Short-term headwinds
We do recognise that not everyone can focus on a long-term view of sectors in
order to make their investment decisions. At the end of the day, short-term
headwinds, whether we are at the trough of the earnings cycle or if things will
get worse from the latest quarters showing still bear weight. What we aim to
achieve in our 2016 outlook is to stoke some thinking about the long-term
potential of AEC, OBOR and TPP, and balance that against known short-term
headwinds. Our thinking on these longer-term potential and each sectors own
short-term pain points, as follows:15
Banks: A credit cycle first, then regionalisation benefits

Figure 23: Banks near-term and longer-term consideration factors
> Em ergence of Fintechs gnaws on the > Rising NPLs in the region
relev ance of banks in som e aspects
> Slowing loan growth
Banks
> AEC and OBOR giv e rise to the
opportunity for banks to fund crossborder inv estm ents
> Wealth m anagem ent to benefit from
relaxation of capital controls in China
Near-term headwinds and near-term positives

Near-term headwind #1: Poorer credit quality, higher credit costs
NPL ratios have started to creep up across the banks amidst the general
economic slowdown and lower commodity prices. While the banks continue
to guide for provisioning charges to increase only slightly from current levels,
we take a more bearish stance and factor in 2016 provisioning charges of
40bp for DBS, 38bp for OCBC and 65bp for UOB (vs. 25bp, 29bp and 32bp,
respectively, in 3Q15). We continue to be concerned about the banks
exposure to: 1) oil & gas, 2) ASEAN, and 3) Singapore property.
Figure 24: NPL ratios (%)
Figure 25: Provisions in GFC vs. FY15-17F

2015F
2.0%
Credit cost (% of loans)

DBS
1.5%
2016F
Title:
Source:
2017F
2008A
2009A
0.25%
0.40%
0.32%
1.20%
Please
fill in the
values above
to have0.68%
them entered
in your report
OCBC
0.23%
0.38%
0.27%
0.56%
0.53%
UOB
0.33%
0.65%
0.46%
0.81%
1.13%
DBS
0.24%
0.39%
0.31%
0.56%
0.99%
OCBC
0.22%
0.38%
0.27%
0.23%
0.33%
UOB
0.32%
0.64%
0.45%
0.61%
1.12%
DBS
692
1,169
971
841
1,552
OCBC
468
845
632
447
429
UOB
670
1,369
1,006
807
1,121
SP + GP (% of loans)
1.0%
0.5%
Total provisions (S$m)

0.0%
DBS
OCBC
UOB
SOURCES: CIMB, COMPANY REPORTS
Figure 26: Potential pots of NPLs

NPL concerns
Singapore
property
Oil & gas sector
Commodities,
developing
ASEAN,
developing Asia
Figure 27: Exposure to oil & gas and commodities
Is exposure big?
Who is most exposed?
Yes, mortgage is 19.2% of total

(DBS), 26.3% (OCBC), 27.3%
(UOB). Watch NPLs from high-end
properties and small-format
suburban units. Losses from
default likely low.
All three are almost equally

exposed to mortgages at peakprices (2013). UOB and OCBC
are more exposed to high-end.
No, exposure to sector is 5-8% of

total loans but loss when default is
likely high.
DBS is the most exposed,

followed by OCBC and UOB.
Average. South and Southeast Asia

exposure is 9.5% of total (DBS),
20.7% (OCBC), 22.4% (UOB). Not
all types of lending in developing
Asia will be prone to default
though.
UOB, then OCBC is most

exposed. DBS has had the
highest NPL ratio from a
relatively small pot (India).
Exposure to oil & gas

25
Exposure to commodities
9%
8%
8%
20
7%
6%
5%
15
7%
6%
15
5%
10
13
10
2%
4%
21
3%
5
15
16
0%
DBS
OCBC
UOB
Oil & gas loans (S$bn)

Oil & gas as % of loans
3%
2%
1%
0
9%
8%
7%
20
4%
22
8%
7%
6%
5%
10
25
1%
0
0%
DBS
OCBC
UOB
Commodities loans (S$bn)

Commodities as % of loans
Near-term headwind #2: Slowing loan growth

We expect loan growth to remain sluggish in 2016 (4.0-4.3%) on the back of:
1) Lower demand for trade loans as onshore rates (SHIBOR) and offshore
rates (CNH HIBOR) in China converge, thus removing the arbitrage trade,
and 2) the economic slowdown and political uncertainties in ASEAN,
prompting businesses to hold back on investments.
16
Figure 28: Slowdown in yoy loan growth led by a lower demand

for trade finance and moderating ASEAN economy
Figure 29: Convergence of onshore and offshore rates in China

has led to lower demand for trade finance
30%
Title:
Source:
25%
20%
15%
10%
5%
0%
DBS
OCBC
UOB
Near-term positive #1: Margin expansion, impending Fed rate hike

NIMs have bottomed out with the recent rise in the 3M SIBOR and SOR on
US$ strength. We think the impending Fed rate hike will lend further
tailwinds for NIMs ahead as banks continue to price up loans while keeping
cost of funding low.
Figure 30: The 3M SIBOR and SOR have risen with the
strengthening of US$/S$ and will rise with a Fed rate hike
Figure 31: NIM expansion should continue with a Fed rate hike
and rise in 3M SIBOR/SOR
%
1.6
1.60
1.4
1.55
4.0%
2.6%
3.5%
Title:
Source:
3.0%
Please fill in the values above to have them entered in your re
2.4%
1.50
1.2
1.45
1.0
2.5%
1.40
2.2%
0.8
1.35
2.0%
1.30
1.5%
0.6
0.4
1.25
0.2
2.0%
1.0%
1.8%
1.20
0.5%
1.15
-0.2
1.10
USDSGD (RHS)
SORF3M Index
0.0%
1.6%
1Q04
3Q04
1Q05
3Q05
1Q06
3Q06
1Q07
3Q07
1Q08
3Q08
1Q09
3Q09
1Q10
3Q10
1Q11
3Q11
1Q12
3Q12
1Q13
3Q13
1Q14
3Q14
1Q15
3Q15
0.0
SIBF3M Index (LHS)
SIBF3M Index
DBS (RHS)
OCBC (RHS)
UOB (RHS)
Structural challenges vs. longer-term macro tailwinds

Structural challenge #1: Emergence of fintechs
Increased competition from fintechs could put pressure on margins and eat
away at several of the banks income streams but will also bring out
efficiencies in the process. We think the threat of fintechs should not be
overblown there is room for both banks and fintechs to coexist. Banks
also have the scale that startups do not while regulators are likely to allow
fintechs to flourish in a managed environment while keeping the control of
critical banking functions largely with the banks.
Macro tailwind #1: Beneficiary of OBOR and AEC
The Singapore banks have built banking relationships with Chinese SOEs
and large corporates with their forays into Greater China and their extensive
ASEAN network places them in a prime position to finance these Chinese
companies investments in ASEAN as part of the One Belt, One Road policy.
The removal of trade barriers within ASEAN with the AEC should also
increase demand for intra-regional trade finance, the associated trade17
related and loan-related fees and working capital and hedging needs. In
terms of exposure, DBS has the biggest proportion of Greater China loans
(DBS: 35%, OCBC: 28%, UOB: 12%) while UOB has the biggest proportion
of loans to South and Southeast Asia (DBS: 10%, OCBC: 21%, UOB: 22%).
Figure 32: Loans by geography, as of 9M15 (S$m)
Loans by country
DBS
Figure 33: PBT by geography, as of 9M15 (S$m)
OCBC
UOB
PBT by country
Amt (S$m) % of loans Amt (S$m) % of loans Amt (S$m) % of loans

Singapore
133,154
46.1%
Malaysia
86,883
40.9%
114,260
56.2%
Singapore
27,841
13.1%
23,658
11.6%
Malaysia
11,151
5.5%
Thailand
Indonesia
Thailand
Indonesia
16,097
7.6%
10,796
5.3%
ASEAN ex-SG
27,381
9.5%
43,938
20.7%
45,605
22.4%
ASEAN ex-SG
Greater China
101,762
35.2%
59,477
28.0%
25,064
12.3%
Greater China
26,452
9.2%
22,384
10.5%
18,300
9.0%
Rest of the world
DBS
OCBC
UOB
Amt (S$m) % of PBT Amt (S$m) % of PBT Amt (S$m) % of PBT
Rest of the world
2,684
67.2%
2,006
54.9%
1,762
60.3%
616
16.9%
404
13.8%
145
5.0%
143
3.9%
45
1.5%
-0.1%
759
20.8%
594
20.3%
1,240
31.0%
741
20.3%
291
10.0%
73
1.8%
147
4.0%
275
9.4%
(2)
Macro tailwind #2: Positioned to capture wealth and fund flows out of
China with the relaxation of capital controls
Singapore has built up a reputation as a wealth management hub, with a
stable political system and ease of capital flows, among other advantages.
As China loosens capital controls and allows its citizens to invest their
wealth more freely overseas, we think the Singapore banks will benefit from
increased demand for wealth management services. In this respect, we
think OCBCs Greater China presence through Wing Hang Bank will
enhance its ability to capture cross-border wealth flows from Greater China
to ASEAN.
Investment implications
We expect a medium-term share price recovery for banks to be driven by a
mean reversion of P/BV multiples from the current 1.0x (1 s.d. below mean) to
its ten-year historical mean of 1.3x in 2-3 years. This will happen when NPL
concerns peak.
Figure 34: Singapore banks are trading at 1.0x CY16 P/BV, 1 s.d. below mean
2.10
1.90
1.70
1.50
1.30
1.10
0.90
0.70
P/BV (x)
Mean
-1 sd
+1 sd
At the current 1.0x CY16 P/BV, we think the negatives of higher NPLs and
slower growth in FY16 have been largely priced in. We take comfort that even
with: 1) aggressive provisioning assumptions, 2) expectations of 1-5% loan
growth, and 3) little non-NII growth in FY16, the banks can still achieve ROEs
that exceed cost of equity, which makes them good value at 1.0x P/BV.
Beyond the softer near-term outlook, we think the Singapore banks will be
beneficiaries of Chinas One Belt, One Road policy given their ability to capture
onshore-offshore loan demand with their diversified presence in both ASEAN
and China. This, together with the AEC, should drive loan demand and the
related fees in the medium term. Wealth management is also another key
beneficiary of liberalisation policies in China. With banks stronger earnings
growth and better ROEs, we think they deserve to trade at P/BV multiples
18
closer to the 10-year historical mean of 1.3x in the medium term. Among the
three banks, UOB looks to be the best bet on the ASEAN integration trend. We
view it to be in a good position to fund Chinas OBOR-led investments;
unfortunately, its ASEAN exposure is precisely what poses challenges as NPLs
in ASEAN show up in 2016. DBS can benefit most from its relationships with
government-related vehicles and government-linked companies, funding the
Singapore companies outbound capex and US companies heading to the
region; its downside risk is its oil and gas exposure. On balance, our top bank
pick switches from OCBC to DBS.
Figure 35: Banks near-term and longer-term consideration factors
> Em ergence of FinTechs m ay pose a

> DBS is the only bank that has not
> Manulife bancassurance deal will
threat to m argins and sev eral incom e recognised NPLs for oil & gas, though it contribute S$1 00m /y ear to fees
has the biggest exposure to the sector
DBS Group stream s
> India continues to see NPLs
> Slowdown in trade finance
OCBC
United
Ov erseas
Bank
Singapore
Ex change

> Slowing loan growth as ASEAN
threat to m argins and sev eral incom e econom y rem ains weak
stream s
> Sy nergies from cross-selling of WM

serv ices to WHB's SME client base
> Credit quality likely to be the m ost
resilient am ong the three banks

> Continued broadening out of NPLs;
> Building up relationships in the nonthreat to m argins and sev eral incom e likely to see the worst credity quality
bank FI space to im prov e US$ funding
stream s
giv en its exposure to SMEs and ASEAN
> Funding issues could lim it NIM
upside com pared to peers
> New form s of capital raising m ay
reduce the need for a listing on SGX
(e.g. startups m ay opt for VC funding
or crowdfunding)
> AEC and OBOR will create
opportunities to finance cross-border
inv estm ents and earn related fees
> Dem and for WM serv ices as China
loosens capital controls
> Dem and for WM serv ices as China
loosens capital controls
> Dem and for WM serv ices with rising
affluence in ASEAN
> Falling dem and for China A50

> Efforts to div ersify rev enue stream s > AEC will im prov e dem and for
futures, its key deriv ativ e product
by adding new products
listings in Singapore, which is seen as
> Low m arket v olum es and listing fees
an ASEAN hub
as sentim ent rem ains poor
19
Property & REITs: Supply bump, then its all about demand
Figure 36: Property & REITs near-term and longer-term consideration factors
Office
> Lower dem and from FIs as global

banks downsize am idst rising
regulatory requriem ents
> Spike in com pleted supply ; 7 80k sf

(2 H1 5), 3 ,63 0k sf (2 01 6), 93 0k sf
(2 01 7 ) in Grade A space.
> Up to an additional 1 m of shadow
space as financial institutions shrink
> Owners of new building prefer to

take tim e to build up occupancy ,
rather than to cut rents
> Prices and rental on a slow decline

> Vacancy is rising faster on high
num ber of units being com pleted
> Rising m ortgage rates
> Tenants undertake m ore co-rents
> Lower HDB prices hav e eased

> New sharing econom y (Airbnb)
pressure on the gov ernm ent, rem ov ed helps to part-fill up the slew of
tail-risk of gov ernm ent change
com pleted em pty units with tenants
> Lim ited m ortgage sales and
m ortgage NPLs when price drift down
> Online retailing offers products at

price points that cannot be m atched
> Weak retail sales

> Difficulty in finding staffing
> Retail tenants hav e seen the worst of > New DTL and Thom son line train
labour costs pressures.
network
> Falling rents (or lim ited hikes)
> Potential com petition from Airbnb
> Spike in m ass-m arket room supply

> China, ASEAN, Australia v isitors
account for half of tourism receipts,
and currencies are weak
> Haze from Indonesia
> Maintain high occupancy rate in

excess of 80%
> No new hotel land has been put up

for tender, indicating that post 2 01 7
new room supply could be lim ited
> Industry occupancy has rem ained

between 85-95%
> Lack of new business parks space

post 2 01 7
> Ageing population, high hom e

ownership ratio
Residential > High household debt
Retail
property
Hotels
Industrial
> Structural changes to the Singapore > High incom ing supply of warehouse
econom y as it m ov es up the v alue-add and factory space
chain
> More regulated than other property
segm ents
> Benefit from hub status; free trade
deals like TPP and AEC, entrenches
Singapore attraction as a ASEAN hub

Residential
Near-term headwinds #1: Looming oversupply. Large completions in
2015-16 will continue to drag on occupancy. An estimated 48,254 and
50,841 units of total public and private housing, are to be completed in 2015
and 2016, respectively. This large influx into the private housing sector will
drag on occupancy and hence rental rates. Moreover, rental demand is
adversely impacted by slower immigration due to the governments
economic restructuring activities and sub-par economic growth. Hence, we
project rental demand to be slower and occupancy within the private
housing segment to decline over the next 2 years.
Near-term headwinds #2: No lifting of policy restrictions. Investment
demand from both local and foreign buyers has been impacted by the
imposition of restrictive cooling measures, such as the Additional Buyers
Stamp Duty (ABSD) and reduced financing quantums. This was put in place
to deter multiple mortgage exposure in anticipation of rising interest rates.
Near-term positive #1: Household debt to GDP not at historic highs
and mortgage affordability still manageable. Household and mortgage
debt to GDP have started to turn down from its most recent peak, indicating
the success of the governments measures to avoid a property bubble. In
addition, mortgage affordability (assuming average household income)
remains below 30%, indicating that private homes remain generally
affordable. We do not anticipate a sharp correction or fire sale conditions in
the private home segment this time around.
20
Figure 37: URA vs. HDB resale PPI
Figure 38: Primary and secondary home volume transactions

6000
180
160
Title:
Source:
5000
140
4000
120
100
3000
80
2000
60
40
1000
20
0
Jun-07
0
1990Q1 1992Q3 1995Q1 1997Q3 2000Q1 2002Q3 2005Q1 2007Q3 2010Q1 2012Q3 2015Q1
URA PPI
HDB Resale
Jun-08
Jun-09
Jun-10
Jun-11
Jun-12
Primary
Secondary
Jun-13
Jun-14
Jun-15
Figure 39: Household and mortgage debt to GDP
Figure 40: Monthly mortgage as % of household income
100%
Title:
Source:
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
1995
1997
1999
2001
2003
2005
HH Debt to GDP
2007
2009
2011
2013
1Q15
Mortgage debt to GDP
Figure 41: Breakdown of supply by region
Figure 42: URA PPI vs. vacancy rate
60000
180
160
50000
12
Title:
Source:
10
140
40000
120
100
30000
6
80
20000
60
40
10000
2
20
0
2015
2016
CCR
2017
RCR
2018
OCR
EC
2019
0
0
1990Q1 1992Q3 1995Q1 1997Q3 2000Q1 2002Q3 2005Q1 2007Q3 2010Q1 2012Q3 2015Q1
>2019
HDB
URA PPI
Vacancy rate (RHS)
Office
Near-term headwinds #1: Lumpy completions over the next 2 years.
The key headwind to the office sector is oversupply, with an estimated 3.9m
sf of new inventory completing in 2016, or equivalent to 3-4 years worth of
demand. Pre-commitment rates have remained low and this will drag on
landlords pricing power. An estimated 49% of 2016 supply comes from the
Marine One building, which has yet to announce any takers for its office
space. Meanwhile, Guocolands strategy for Tanjong Pagar Centre is likely
to maintain rents at the cost of short-term occupancy. We expect the
availability of supply will continue to pose a drag on the rental outlook. We
think rents can retrace 15-20% over the next 2 years.
Near-term headwinds #2: Low GDP growth implies reduced demand
for office space. Demand for office space is closely correlated to GDP
growth. With near-term economic growth expected to remain below average,
the take-up of office space is likely to remain modest and this will mean a
longer gestation period for incoming office inventory. As a result, we think
21
islandwide occupancy could dip to closer to the 85% from the present 90%
before the additional space is properly absorbed.
Near-term positive #1: Non-traditional end users emerge to take up
some slack. While traditional office space end users, such as financial
institutions, have tempered their appetites, new business sectors, such as
commodities, media, legal and other financial services, have emerged and
provided a new source of demand. In addition, cap rates are unlikely to
expand, with interest rates to remain lower for longer. As such, capital
values are likely to remain stable and this will underpin book NAVs of
developers and S-REITs. Current cap rates for Grade-A offices in the CBD
is at 3.75%, its lowest in this cycle.
Figure 43: Office rents by segment
Figure 44: Breakdown of supply by region

sf
16
4000000
14
3500000
12
3000000
10
2500000
2000000
1500000
1000000
500000
0
2004Q1
Title:
Source:
2005Q3
2007Q1
2008Q3
Grade A ($psf pm)
2010Q1
2011Q3
2013Q1
Grade B ($psf pm)
2014Q3
2015
2016
CBD
Biz park ($psf pm)
2017
CBD Fringe
2018
2019
Decentralised
Figure 45: Annual demand, supply and occupancy rate
Figure 46: Office passing and spot yields
msf
7
8%
Title:
Source:
95%
7%
90%
6%
5%
85%
4%
2
80%
3%
2%
75%
1%
-1
-2
0%
70%
89
91
93
95
97
Annual supply
99
01
03
05
07
Annual demand
09
11
13
15F
1980
17F
1983
1986
1989
1992
1995
Current yields
Occupancy rate
1998
2001
2004
2007
2010
2013
Passing yields
Retail
Near-term headwinds #1: Slow retail sales from strong S$. Retail sales
in Singapore have been growing by low single-digits as the strong S$
dampen tourist arrivals and domestic consumption is limited by higher
household leverage. Tourist arrivals, particularly from Indonesia, Malaysia
and Australia, are down yoy.
Near-term headwinds #2: Boosting sales efficiency may mean more
consolidation. While the last of the changes in the foreign worker labour
ratio put in place in July 15 and the foreign worker levy hike is stabilising in
July 16, retailers are now focusing on growing sales efficiency. This may
mean some near-term consolidation activities.
Near-term positive #1: Lower-than-average incoming supply. New
incoming supply is averaging 0.7m sf p.a., which is lower than the annual
average of the past few years as the bulk of supply had been digested in
2014. In addition, most of the new inventory is scattered across many
locations and is not concentrated on one region. This should help bolster
retail sales performance. As such, we expect rents to continue tracking up
but by a very modest quantum annually.
22
Figure 47: DRC and foreign worker levy
Figure 48: Net take-up of shop space
DRC
60%
$1,400
$1,200
50%
$450
$450
$1,000
Title:
Source:
40%
$500
$300
30%
$600
$360/
$460
20%
$160/
$260
10%
$600/
$700
$600/
$800
$400/
$500
$400/
$550
$400/
$600
$300/
$400
$300/
$420
$300/
$450
1-Jul-13
1-Jul-15
1-Jul-16
$300/
$400
$180/
$280
$240/
$340
0%
$800
$600
$400
$200
$-
1-Jul-10
1-Jul-11
1-Jul-12
Tier 1
Tier 2
Tier 3
Figure 49: Supply of retail space
Figure 50: Rental reversion of retail S-REITs
sq ft
1,600,000
Title:
Source:
1,400,000
1,200,000
1,000,000
800,000
600,000
400,000
200,000
0
2015
2016
Primary Shopping Area
2017
2018
Secondary Shopping Area
Industrial
Near-term headwind #1: Manufacturing continues to be weak. We
expect demand for factories to be affected by a slowdown in manufacturing
activities. Singapores manufacturing sector had two consecutive quarters of
contraction, declining by 6% yoy and 3.6% qoq in 3Q15. Meanwhile, factory
supply is projected to rise by 4.3% in 2016 (2015F: 3%), with supply coming
from new strata-titled and JTC-led projects. Rents dived by 10% yoy to
c.S$1.90 psf/mth in 2015, with occupancies coming down by 0.5% pts to
91%. Hence, we think rents could dip by 5-10% in 2016.
Near-term positive #1: Bullish on business parks. Given the absence of
supply post 2016, we are most bullish on business parks. Business park
supply growth is expected to slide down to 8.2% in 2016 (2015F: 9.2%),
with no further supply in 2017. Although headline pre-commitment appears
lacklustre at 32%, our channel checks suggest that Mapletree Business City
Phase 2 (MBC 2) which accounts for c.60% of the incoming 2.1m sq m
supply in 2016 has been progressively securing tenants. The park has
already secured two anchor tenants, Google (c.25,000 sq m) and Covidien
(c.520,000 sq m). With average occupancies ticking up to 84.2% in 2015
(2014: 83.6%), rents have risen by 1% yoy to c.S$4.2 psf. We believe that
the rise (+3-5%) could continue in 2017 due to a lack of new supply.
23
Figure 51: Single-user factory: Supply-demand vs. occupancy
Figure 52: Multi-user factory: Supply-demand vs. occupancy

(000 sqm)
(000 sqm)
25,000
100%
20,000
95%
15,000
90%
Title:
Source:
12,000
100%
10,000
95%
8,000
90%
6,000
10,000
85%
85%
4,000
5,000
80%
75%
Supply
Demand
80%
2,000
75%
Supply
Occupancy
Demand
Occupancy
SOURCES: CIMB, URA
Figure 53: Warehouse: Supply-demand vs. occupancy
SOURCES: CIMB, URA
Figure 54: Business park: Supply-demand vs. occupancy
(000 sqm)
(000 sqm)
10,000
100%
Title:
Source:
2,250
2,000
8,000
95%
6,000
90%
100%
95%
1,750
1,500
90%
1,250
85%
1,000
4,000
85%
750
2,000
80%
500
80%
75%
250
75%
Supply
Demand
70%
Occupancy
Supply
Demand
Occupancy
SOURCES: CIMB, URA
SOURCES: CIMB, URA
Figure 55: Singapore industrial properties rental rate

(S$ psf)
4.50
4.16
4.00
3.50
3.00
2.50
2.03
2.00
1.91
1.50
1.00
0.50
2000
2001
2002
2003
2004
2005
Factory
2006
2007
2008
Warehouse
2009
2010
2011
2012
2013
2014 2015F
Business park
SOURCES: CIMB, URA
24
Hospitality
Near-term headwinds #1: watch the supply bump in 4Q15. On the back
of high upcoming supply coupled with stagnant tourist arrivals, we believe
that hotel owners may have to lower room rates further to maintain their
market shares. 9M15 RevPAR dropped by 6% yoy to S$208 while
occupancies dipped 0.7% pts yoy to 85%. Additionally, we believe that the
full impact of the new supply of 4,361 rooms will only be felt in 4Q15 with
the respective openings of Hotel Boss (1,500 rooms targeting the mid-tier
segment) and The South Beach (654 rooms targeting the upscale segment).
Together, these two hotels account for 50% of the upcoming supply for
2015. We only expect the competitive market dynamics to ease post 2017
as the last hotel GLS site was awarded in early-2014 and none since then.
For 2016, we project 3,899 new rooms (+6.3% growth).
Near-term headwinds #2: Regional tourism affected by strong S$. On
the demand side, regional tourism has been affected by weaker FX while
we have observed weaker corporate demand from select industries, such
as electronics manufacturing, oil & gas and banks. Given the sharp
appreciation of S$ vs. regional currencies, there was a drop-off in visitor
arrivals, particularly from Australia (-7% yoy) and Indonesia (-11% yoy).
Chinese visitors (+19% yoy) have made up for the slower arrivals.
Figure 56: 9M15 RevPAR dropped by 6% yoy to S$208 while
occupancies dipped 0.7% pts yoy to 85%
Figure 57: Visitor arrivals to Singapore: we anticipate 15.1m

visitors in 2015, flat yoy
(S$)
(%)
('m)
250.0
100.0
16.0
90.0
Title:
Source:
14.0
200.0
80.0
150.0
70.0
12.0
60.0
10.0
50.0
100.0
8.0
40.0
6.0
30.0
50.0
4.0
10.0
2.0
0.0
1Q01
3Q01
1Q02
3Q02
1Q03
3Q03
1Q04
3Q04
1Q05
3Q05
1Q06
3Q06
1Q07
3Q07
1Q08
3Q08
1Q09
3Q09
1Q10
3Q10
1Q11
3Q11
1Q12
3Q12
1Q13
3Q13
1Q14
3Q14
1Q15
3Q15
0.0
20.0
RevPAR
Occupancy (RHS)
SOURCES: CIMB, CEIC, STB
Figure 58: Current and expected hotel room supply in

Singapore: near-term environment is competitive
SOURCES: CIMB, CEIC, STB
Figure 59: Top 10 inbound markets: Yoy change for YTD Aug
2015 visitors from North Asia offset drop in ASEAN
SOURCE: CIMB RESEARCH, COMPANY, STB, HORWATH HTL
SOURCE: CIMB RESEARCH, COMPANY, STB
25
Figure 60: The upcoming supply of hotel rooms in Singapore is concentrated in the mid-tier segment
Nam e of Hotel
Gallery Hotel
Sw isstel Merchant Court
Genting Singapore
Park Hotel Alexandra
Hotel Chancellor @ Orchard
D'Resort@ Dow ntow n East
Aqueen Hotel Paya Lebar
Hotel Vagabond Singapore
The South Beach *
The Patina Capitol Singapore
Hotel Clover @ 7 HK St
Sofitel Sentosa Resort and Spa
Villa Samadhi
Hotel Boss
Hotel Grand Central
Oasia Dow ntow n Hotel
InterContinental Singapore Robertson
Quay (Gallery Hotel after refurbishment)
Clemont Hotel (Tanjong Pagar Centre)
Sw isstel Merchant Court
Laguna Dusit Thani
No. of
Rm s
223
150
557
442
488
397
162
41
Horw ath Rating
Location
Upscale/Luxury
Upscale/Luxury
Upscale/Luxury
Upscale/Luxury
Mid-Tier
Mid-Tier
Economy
Upscale/Luxury
City Centre
City Centre
Outside City Centre
Outside City Centre
City Centre
Outside City Centre
Outside City Centre
Outside City Centre
654
Upscale/Luxury
City Centre
157
22
30
20
1,500
264
314
Upscale/Luxury
Upscale/Luxury
Upscale/Luxury
Upscale/Luxury
Mid-Tier
Mid-Tier
Upscale/Luxury
City Centre
City Centre
Sentosa
Outside City Centre
City Centre
City Centre
City Centre
Expected
Opening
Closed
Closed
Opened
Opened
Opened
Opened
Opened
Opened
Partially
Opened
4Q 2015
4Q 2015
4Q 2015
4Q 2015
4Q 2015
4Q 2015
2016
225
Upscale/Luxury
City Centre
2016
202
150
200
Upscale/Luxury
Upscale/Luxury
Upscale/Luxury
City Centre
City Centre
Outside City Centre
2016
2016
2016
Nam e of Hotel
Hotel Indigo Singapore Katong
Mercure Singapore Middle Road
M Social
Holiday Inn Express Singapore Katong
Park Hotel Farrer Park
Crow ne Plaza Changi Airport
(extension)
OASIA West Residences
Premier Inn Singapore
The Warehouse Hotel
Ibis Styles
Aqueen Hotel Geylang
Aqueen Hotel Little India
Aqueen Hotel Lavender (Additional
Rooms)
Andaz Singapore (DUO Project)
Novotel Singapore on Stevens
Somerset Grand Gairnhill Singapore
Redevelopment
The Murray Hotel
Ibis Singapore on Stevens
Amoy (Phase 2) (Additional Rooms)
Courtyard Marriott at Novena
YOTEL Orchard Road
No. of
Rm s
131
400
293
451
300
Horw ath Rating

Upscale/Luxury
Mid-Tier
Mid-Tier
Mid-Tier
Mid-Tier
Expected
Opening
Outside City Centre
2016
City Centre
2016
City Centre
2016
Outside City Centre
2016
Outside City Centre
2016
Location
243
Mid-Tier
Outside City Centre
2016
116
300
37
298
100
70
Mid-Tier
Economy
Economy
Economy
Economy
Economy
Outside City Centre

City Centre
City Centre
Outside City Centre
Outside City Centre
Outside City Centre
2016
2016
2016
2016
2016
2016
69
Economy
Outside City Centre
2016
342
259
Upscale/Luxury
Upscale/Luxury
City Centre
City Centre
2017
2017
220
Upscale/Luxury
City Centre
2017
160
528
60
250
600
Upscale/Luxury
Mid-Tier
Mid-Tier
Mid-Tier
Economy
City Centre
City Centre
City Centre
Outside City Centre
City Centre
2017
2017
2017
2017
2017
Year
No. of Rms
Upscale/Luxury
Mid-Tier
Economy
2015
4,361
1,550
36%
2,649
61%
162
4%
2016
3,899
1,222
31%
1,803
46%
874
22%
2017
2,419
981
41%
838
35%
600
25%
Total (2015 - 2017)
10,679
3,753
35%
5,290
50%
1,636
15%
SOURCE: CIMB RESEARCH, COMPANY, HORWATH HTL

Structural challenges #1: Advent of technology and emergence of new
sharing economy. The impact of technology, resulting in trends such as
hot-desking, e-commerce and Airbnb, has been felt across all segments of
the real estate business. We believe a more flexible workplace environment
and ability to meet customer needs online will continue to erode the brickand-mortar share of the real estate business, forcing developers and
landlords to reinvent the way they do business or to develop new sources of
demand for their properties. In addition, the emergence of a new sharing
economy, as demonstrated by Airbnb, stokes up competition in the leisure
and corporate short-stay segment and erodes the pricing power of
traditional hospitality sectors.
Structural challenges #2: High home ownership, slower immigration.
Singapore has one of the highest home ownership ratios in the world of
about 93%. As such, the need for new housing will come from new
household formation as well as from immigration. Maintaining a tight
immigration policy as Singapore continues with its economic restructuring
process means a slower pace of population growth and this will impact the
demand for housing. In addition, keeping structural cooling policies, such as
the total debt service ratio (TDSR), will also limit the ability to purchase
properties for investment purposes.
Macro tailwinds #1: Singapores status as an ASEAN hub for both
business and leisure. Singapores status as a launch pad into the rest of
ASEAN is likely to prevail with its stable political regime and a pro-business
corporate HQ environment. With the advent of AEC, we think these factors
will continue to make Singapore a relevant hub for such purposes. As such,
we think demand for office space could improve in the longer term. In
addition, Singapore has always been a hub for air carriers in ASEAN. With
the secular growth of the regional economies and rising consumption power,
we think leisure travel, particularly from Indonesia, China and India, could
continue to grow.
Macro tailwinds #2: Under-investment in selected property sectors
post 2018. With the prospect of oversupply within all the major property
segments, the government has tweaked its land supply mechanism across
all sub-segments. There is an absence of new supply of land for
26
development of hotels and business parks. Essentially, this implies that

there is hardly any new supply of business parks space and hotel rooms
post 2017-18. In addition, supply of residential land has normalised to the
8,000-10,000 units p.a. We expect a new equilibrium to emerge post the
absorption of overbuilding over the next 2 years.
We think short-term concerns of oversupply outweigh in the office, hotel and
residential segments. Essentially, there is 8-9m sf of office space (10% of total
stock) to be completed over 2015-19, the bulk of which will come onstream in
2016-17. For the hotel sector, there are 10,530 keys (18% of total stock) to be
completed over the same period, of which most will be largely operational by
2017. The bulk of future private home inventory of 64,177 units (19.9% of total
private stock) to be completed over 2015-19 is also projected to come into the
market by 2017. This will drag on office rents, hotel room rates and private
home prices. We expect office rents to decline by 10-15% over the next 18
months while residential prices could track down by 5-10% annually over the
next two years. Hence, we would prefer developers with diversified business
models that can weather the short-term challenging environment while being
well placed to benefit from the longer-term structural positives in the sector.
We expect a share price recovery for property developers to be driven by two
catalysts: 1) a recovery in valuations from the present -1 s.d. discount to RNAV
to an average discount to mean as outlook on prices improve, and 2) sector
EPS growth to be more meaningful, estimated from a -7.3% in CY16 to 17.3%
in CY17, with the inclusion of overseas contributions, which are only
recognised wholly on completion.
Figure 61: Historical sector discount to RNAV
Figure 62: Sector P/RNAV vs. URA PPI

180
3.0
160
2.5
1.6
Title:
Source:
1.4
140
120
2.0
1.2

1.0
100
0.8
1.5
80
0.6
60
1.0
0.4
40
0.5
0.2
20
0
0.0
1990Q1 1992Q3 1995Q1 1997Q3 2000Q1 2002Q3 2005Q1 2007Q3 2010Q1 2012Q3 2015Q1
0.0
J-90 F-92 O-93 J-95 F-97 O-98 J-00 F-02 O-03 J-05 F-07 O-08 J-10 F-12 O-13 J-15
URA PPI (LHS)
P/RNAV (RHS)
Developers stocks trade at a 40% discount to RNAV or at a -1 s.d. discount to

mean. We expect stocks to be rangebound in the near term as capital values
continue to deteriorate. Historically, as capital values improved, the discount to
RNAV would narrow in anticipation of RNAV reflation.
Furthermore, developers have been investing overseas more aggressively in
the past few years, namely in Australia, UK and China. Contributions from
these projects are likely to be recognised over the next few years as
construction completes. This will spur earnings growth for Ho Bee Land
(Australia), City Dev (UK) and Capitaland (Vietnam, China).
The S-REIT sector is trading at 7.3% FY15 DPU yield or c.480bp spread above
the 10-year bond yields. This is above the historical average spread of 370400bp. We think office rents and hotel room rates will continue to decline over
the next 2 years while retail rental upside will be anaemic. In addition, the
prospect of rising interest rates could impact the leverage ratio of S-REITs.
Hence, we would be stock-selective, preferring S-REITs with low gearing and
which have the ability to organically grow DPU.
27
2.5
25%
4.0
20%
3.5
1.5
15%
3.0
10%
2.5
0.5
5%
2.0
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
0%
4.5
43%
42%
42%
41%
40%
39%
39%
38%
38%
37%
37%
37%
36%
36%
36%
35%
Title:
Source:
34%
34%
33%
30%
31%
35%
30%
3.5
5.0
FEHT
5.5
30%
40%
MINT
45%
28%
4.5
6.0
CCT
Figure 64: S-REIT leverage ratio
%
6.5
26%
Figure 63: S-REIT sector yield and spreads
KREIT
OUEHT
OUECT
MAGIC
ART
FHT
MLT
CACHE
AREIT
CREIT
SUN
CDREIT
MCT
FCOT
SGREIT
LMRT
CMT
FCT
FREIT
LT ave. spread (LHS)
FIRST
Spread over 10y GB (LHS)

10-yr bond yield (RHS)
SPHREIT
LT ave: 4.1%
Figure 65: Developers stock-specific near-term and longer-term consideration factors

> High proportion of properties under

dev elopm ent could drag on ROE
> Lack of Singapore residential

landbank
> Large inv estm ents into this growth

sector could m ean potential for som e
> Short term earnings v acuum as

business m odel transitions from pure
landlord to fund m anager / landlord
> Slightly slower China GDP growth
could m ean a slower pace of
consum ption growth
> Declining v olum e sales would m ean
slower earnings growth m om entum
from Singapore
> Poorer hotel perform ance in Asia
could drag on earnings growth outlook
for this segm ent
CapitaLand
Global
ov erbuilding in the m edium term
Logistic
Properties
> Dwindling low cost landbank in
Singapore
City Dev
> Slow earnings growth with lack of

> Lack of Singapore residential
Singapore and ov erseas dev elopm ents landbank to sustain earnings
v isibility , high land cost erodes
UOL Group
m argins
> Australia could be a drag if m acro- > Gearing of 0.83 x is higher than
Frasers
prudential m easures are im plem ented industry av erage
Centrepoint to cool the residential m arket
Ltd
> No landbank in Singapore
> High capex to com plete the Tanjong

Pagar dev elopm ent
Guocoland
> Residential dev elopm ent activ ities

lifted by strong sales in Vietnam and
pick up in take up in China
> JV between Ascott and Tujia could
prov ide another m anagem ent fee
incom e driv er with plans to expand
presence in China
> Value creation from both higher
earnings due to strong leasing dem and
and higher portfolio v aluation from
cap rate com pression
> Pan Asian exposure will enable the

group to ride on the growth in Asean
and China
> Strong incom e base with c7 0% of
assets generating recurrent incom e.
This will underpin the group's plan to
grow ROE to 8-1 2 % in the longer run
> Low stock of m odern logistics
warehouse in China and growing
dem and due to expanding e-com m erce
would m ean robust dem and for
m odern logistics space
> Recurrent rental incom e (c2 0% of

PBT) prov ides a stable incom e base
> Monetisation of Quay side Collection
assets include W Hotel and W
Residences unlocks v alue and
opportunity to redeploy capital
> Div ersification into m ore ov erseas

dev elopm ent activ ities should enable
the group to sustain m argins and
building fund m anagem ent
capabilities should enhance ROE in the
longer run
> Sustainable recurrent rental incom e

due to strong niche within the
Newton/Nov ena area
> Strong hospitality presence in Asia
through its Pan Pacific and Parkroy al
brand
> Strong residential sales in Australia
and good take up at North Park
Residences to boost earnings
> Div ersified business m odel

com prising residential, hotel
ownership and m anagem ent, rental
and div idend incom e
> Strong m anagem ent execution
track record
> Div ersified business with strong
REIT platform s
> Potential to unlock v alue from its
large industrial property portfolio in
Australia
> Sale of Beijing DZM dev elopm ent has > Com pletion and leasing of Tanjong
lowered group gearing to below 1 x.
Pagar Centre office space would enable
> Better take up at Leedon Residences group to build its recurring incom e
would continue to boost cashflow from base
this project
> Unlaunched dev elopm ents in China > Launch of its dev elopm ent projects
in China only from early 2 01 6
> Strong recurring incom e deriv ed

from rental of its Singapore properties
> Potential sale of strata office space in
Singapore could offer another wing of
earnings growth
> Well located properties near HSR

stations in China that can enjoy
strong traffic growth and boost
patronage at its m alls
Wing Tai
Holdings
> Residential inv estm ent options in

other countries with perceiv ed better
returns would lure ov erseas buy ing
away from high end residential
projects in Singapore
> Drag from QC penalties pay able for

unsold inv entory at its high-end
projects
> Lack of landbank to prov ide longer
term residential earnings v isibility
> Lowly geared balance sheet puts it

in strong position to reinv est into new
projects
> Well distributed geography base

with earnings from HK, Malay sia and
Singapore
Ho Bee
Land
> Residential inv estm ent options in

other countries with perceiv ed better
returns would lure ov erseas buy ing
away from high end residential
projects in Singapore
> Low buy ing interest in high end

dev elopm ents translates to slow sales
> No QC penalties for its Sentosa

projects to erode profits
> Transform ed business m odel to one

with strong recurrent incom e with the
com pletion of The Metropolis and
acquisition of a few properties in UK
> increasing com petition from

Airbnb.
> potential slower tourist arriv als due

to the near term terrorist threat.
> strong Rev Par growth driv en by the > globalization and increasing num ber
group's on-going refurbishm ent and
of v isitors from Asia
rebranding program m e.
> potential group restruturing and
m onetisation of non-core assets.
Perennial dragging on ROE

Real Estate
Holdings
GL Limited
28
Figure 66: REITs stock-specific near-term and longer-term consideration factors

> Retail spending im pacted by rise of e- > Retailers' rising operating cost and
com m erce and online shopping
higher occupancy cost of m alls v s
peers lim its ability to raise rents
CapitaLand
significantly
Mall Trust
> Reduced reliance on m anufacturing > Large incom ing supply of industrial
in Singapore m ay im pact dem and for space to drag on rental outlook in
light industrial space
Singapore
Ascendas
REIT
Suntec
REIT
> Retail spending im pacted by rise of e- > Lower than projected av erage rent
from Suntec Mall post AEI
> Ov ersupply of office space would
dam ped rental outlook ov er the next 2
y ears
> The state lease for Bugis Village
> Ov ersupply of office space would

dam pen rental outlook ov er the next 2
y ears
> Volatility of A$ from its Australian

portfolio could drag on earnings and
NAV
> Ov ersupply of CBD office space and

return of office space by FIs could drag
on earnings and growth outlook
CapitaLand
could be term inated in 2 01 9
Comm
Trust
Keppel
REIT
Mapletree
Comm
Trust
Mapletree
Industrial
Trust
Mapletree
Greater
China
Mapletree
Logistics
Trust
SPH REIT
Ascott
Residence
Trust
Frasers
Centrept
Trust
Starhill
Global
REIT
> First rental renewal cy cle for Bedok

Mall ov er the next 1 -2 y ears should
boost returns from this acquisition and
driv e earnings growth
> Ev aluating options to m axim ise plot
ratio at Funan Mall could unlock m ore
v alue creation from this property
> Positiv e, although narrowing, gap
between spot and renewal rents will
continue to spur topline growth
> Acquisition of Australian portfolio to
driv e earnings from FY1 6
> Largest retail landlord in Singapore

with c3 0% m arket share and a well
balanced portfolio with 7 5% exposed to
resilient suburban m alls
> Sponsor Capitaland could prov ide a
potential acquisition pipeline
> Rejuv enating portfolio with the sale

and redev elopm ent of Park Mall
> Additional incom e from the
com pletion of the Suntec Mall AEI
would boost earnings from FY1 5
onwards
> High occupancy of 9 6 .4 %
> Long WALE of 7 .7 y rs and m inim al
lease renewals in 2 01 6 prov ides
certainty of incom e
> High occupancy of 9 8.5% and strong
tenant retention of 9 0%
> No debt refinancing due till 2 01 7
> More dependent on third party

properties for acquisitions
> Lack of new business park

dev elopm ents post 2 01 7 will benefit
AREIT as one of the larger business
parks landlord
> Purchase of Australian portfolio has
propelled AREIT to the 8th largest
industrial property owner there and
prov ide it with a platform for growth
> One of the largest office landlords in

Singapore
> Strong balance sheet, gearing one of
the lowest am ongst S-REIT peers
> Portfolio concentrated on new
prem ium office properties in
Singapore CBD and Australia
> Long WALE of 6 y rs (8.5 y rs for top
1 0 anchor tenants) prov ide stability of
incom e stream
> Unique positioning of Viv ocity as a
large destination m all with div ersified
tenant base
> Strong sponsor Mapletree
Inv estm ents that can prov ide a pool of
potential acquisitions
> Flatted factories expected to rem ain
stable giv en the lack of com petition
> Retail spending im pacted by rise of e- > Slowdown in tourist arriv als has
also affected shopper traffic at
Viv ov ity
> Achiev ing still healthy double digit

positiv e rental rev ersions ov er pcp at
Viv ocity
> Reduced reliance on m anufacturing > Rising cost pressures could dam pen
in Singapore m ay im pact dem and for NPI m argin
> Factory m arket is subdued; av erage
rents for 2 01 5 hav e fallen by c.1 0%
y oy
> New Kallang Basin AEI to prov ide

m edium -term boost
> Current gearing of 2 9 .7 %
> 1 00% of assets located ov erseas, in

HK SAR and China. Any change in
socio-econom ic and political
env ironm ent in the country could
im pact earnings and v aluation of the
assets
> Resilient tenant sales perform ance

and shopper traffic at Festiv al Walk
> Stronger HK$ should boost earnings
and NAV on conv ersion
> Owner of Festiv al Walk, one of the

m ost resilient retail m all in HK
> Strong sponsor in Mapletree
Inv estm ents with a potential pipeline
of properties for acquisition
> Reduced reliance on m anufacturing > Mixed im pact from conv ersion of
in Singapore m ay im pact dem and for single-user asset to m ulti-tenanted
buildings
> Strong acquisition track record;

current gearing stands at 3 8.8%,
giv ing it debt headroom of S$4 6 0m
(based on m ax. 4 5% gearing)
> Extensiv e ROFR pipeline
> Portfolio concentration on two

properties in Singapore
> More dependent on tourist traffic
giv en its Orchard Rd location
> Passing rent at Clem enti Mall is still

lower than the supported rental lev el
> Positiv e rental rev ersion and AEI to

boost earnings
> Strong branding of Paragon as a goto m all along Orchard Rd belt which
has offerings for both local shoppers
and tourists
> Recently opened Seletar Mall
prov ides a potential acquisition
opportunity when stabilised
> Com petition would intensify with

the em ergence of a new sharing
econom y such as Airbnb
> Lim ited room to grow
> Key m arkets showed im prov em ent > Well-div ersified hospitality exposure
> Stable incom e from m aster lease and > Com petition could ease post-2 01 7 as
m inim um guarantees
the last hotel GLS site was awarded in
early -2 01 4
> Clam pdown in luxury spending by

m ainland Chinese shoppers drag on
ov erall HK retail sales
> Narrowing of gap between spot and
passing rents at Gateway Plaza would
m ean m ore m uted rental rev ersion
growth going forward
> Retail spending im pacted by rise of e- > Potential AEI of Northpoint could
m ean som e near term earnings
v olatility
> Lower occupancy cost v s peers could > Resilient Singapore-centric portfolio
m ean higher ability to grow rents
of resilient suburban shopping m alls
> Strong sponsor FCL with a pipeline of
quality assets that could be acquired
when com pleted and stabilised
> 4 0% of gross rev enue and 3 2 .5% of

asset v alue is located ov erseas, in
Australia, Malay sia, Japan and
China. Any forex v olatility would
im pact earnings and NAV
> Incom e from My er Centre Adelaide

from FY1 5 and renewal of m asterlease
at NAC and Starhill Gallery and Lot
1 0 in Malay sia could boost earnings
from FY1 6
> Potential asset dev elopm ent works
at Plaza Arcade in Perth would
enhance returns when com pleted
> Decline in tourist arriv als in

Singapore in the short term would
drag on tenant sales
> Strong sy nergies with sponsor YTL

Group
> Strong m anagem ent track record
with international and local retail and
real estate experience
29
Telcos: Evolution as 4th telco and pay-TV cord-cutting

threaten
Figure 67: Telcos near-term and longer-term consideration factors
Telcos
> Potential entry of 4th m obile

operator by m id-2 01 7 could put
pressure on tariffs
> Pay TV 'cord-cutting'
> Rising interest rates are negativ e for
telco y ield play s
> Flattish m obile rev enue growth as

decline in IDD, SMS & roam ing offsets
Data usage growth
> Pay TV business could face som e
pressure upon NetFlix's entry
> Fixed Broadband com petition
stabilising
> Telcos will continue to gradually
m anage handset subsidies lower
> Mobile Data usage growth on richer
content, faster networks & new use
cases
> Expansion into adjacent biz, e.g.
digital adv ertising, IoT/M2 M, Big
Data

Near-term headwind #1: Bidding price for mobile spectrum auction
The biggest near-term headwind is the weak investor sentiment ahead of
the mobile spectrum auction for new entrants. That should take place in
1H16. There are at least two companies (MyRepublic and Consistel)
interested in bidding for the package of spectrum being offered (2 x 10MHz
at 700MHz, 2 x 10MHz at 900MHz and 20MHz at 2.3GHz). While chances
are high for the entry of a fourth mobile player, there is still a possibility that
neither one is able to raise sufficient funding or meet the IDAs
prequalification criteria to bid.
Near-term headwind #2: No mobile revenue growth
The industry is expected to record only flattish to low-single digit mobile
revenue growth as the continued decline in voice, SMS, IDD and roaming
usage is offsetting data usage growth.
Near-term headwind #3: Pay-TV threatened
Netflix has announced officially that it will launch its services in Singapore in
early-2016. Singapore telcos say they are currently in negotiations with
Netflix to form partnerships. At this stage, telcos are not yet revealing how
those partnerships might be structured. Nevertheless, having an additional
IPTV service offered in the market will most likely be negative and compete
with existing Pay-TV operators, in our view.
Near-term positive #1: Fixed broadband competition stabilised
Fixed broadband competition has stabilised since early-2015. We believe
this will be sustained into 2016 as competition appears to be centred on the
higher-speed 1Gbps packages.
Near-term positive #2: Lower handset subsidies
We expect telcos to gradually reduce handset subsidies in 2016, although
Apples iPhone 7, which will be launched at end-3Q16, is expected to be
very popular and could dent EBITDA margins in 4Q16-1Q17.
Figure 68: Reserve prices for spectrum auction in 2016
Spectrum band
New MNO
spectrum setaside
Lot/package size
700 MHz: 2 x 10 MHz
900 MHz: 2 x 10 MHz
2.3 GHz: 20 MHz
(S$ m)
(%)
1,200
4.5
Reserve price
4.0
1,000
3.5
12-16 years
S$40m for entire block
12-16 years
S$20m per 5 MHz pair
800
3.0
2.5
600
700 MHz
900 MHz
EGSM in
900MHz
Spectrum
right duration
Figure 69: Industry mobile revenue flat in 9M15
2 x 5 MHz
3-5 years
2.0
400
Pro-rated based on reserve

price of 900 MHz band
1.5
1.0
200
2.3 GHz
2.5 GHz
0.5
5 MHz
12-16 years
S$5m per 5 MHz lot

0
0.0
4Q13
1Q14
2Q14
3Q14
4Q14
Industry mobile revenue
SOURCE: Infocomm Development Authority (IDA)
1Q15
2Q15
3Q15
Growth yoy
SOURCE: CIMB RESEARCH, SINGTEL, STARHUB, M1
30
Figure 70: Fixed broadband ARPU has stabilised
Figure 71: Handset subsidies are being managed lower
(S$)
(%)
75.0
50
Title:
Source:
45
70.0
40
35
65.0
30
60.0
25
20
55.0
15
10
50.0
45.0
0
1Q13
2Q13
3Q13
4Q13
1Q14
2Q14
3Q14
4Q14
1Q15
2Q15
1Q13
3Q15
2Q13
3Q13
4Q13
1Q14
2Q14
3Q14
4Q14
1Q15
SOURCE: STARHUB
2Q15
3Q15
SOURCE: STARHUB

Structural challenges #1: Fourth telco
If the 1H16 spectrum auction sees a new telco bid successfully, the winning
bidder will most likely be able to launch commercial mobile services within
12-18 months. This is structurally negative as we expect the fourth mobile
operator to focus on more affordable pricing or provide greater value
inclusions in its packages as the key selling point to attract subscribers. We
think it will be difficult for the new entrant to steal significant market share
from the incumbents (inferior network quality/coverage, existing subscribers
tied to 2-year contracts, incumbents bundling strategies) but still expect the
incumbents mobile ARPUs to come under pressure as they cut prices to
defend market share. We have factored in a 15% negative impact on mobile
ARPU from mid-2017 to mid-2020. This is lower than the c.30% decline in
fixed broadband ARPU seen in the first three years after new players
launched NBN services.
Structural challenges #2: Pay-TV cord-cutting
We see subscribers potentially engaging in more cord-cutting of traditional
linear Pay-TV services given the emerging plethora of OTT video streaming
services, both legal and illegal. While certain content like premium live
sports and locally-produced TV series/movies are harder (although not
impossible) to find on OTT video streaming websites, most content can
nowadays be easily accessible online.
Figure 72: Mobile data usage continues to grow healthily
Figure 73: Mobile Internet ad spending worldwide, 2013-19
(TB)
(%)
35,000
45.0
(US$ bn)
250.0
40.0
30,000
(%)
80.0
Title:
Source:
70.1
65.9
70.0
59.4
200.0
35.0
60.0
Please fill in 51.1

the values above to have them entered in your report
25,000
30.0
50.0
150.0
20,000
25.0
15,000
20.0
40.2
40.0
29.4
100.0
20.5
15.0
16.5
16.0
10,000
7.8
10.0
3.7
5,000
30.0
20.0
11.9
50.0
10.0
24.1
26.8
5.0
0.0
0
0.0
1Q13
2Q13
3Q13
4Q13
1Q14
Data traffic
2Q14
3Q14
4Q14
1Q15
0.0
2013
2Q15
2014
2015F
2016F
Mobile ad spending
Growth yoy
2017F
2018F
2019F
as % of digital ad spending
as % of total media ad spending
SOURCE: CIMB RESEARCH, IDA
SOURCE: CIMB RESEARCH, eMarketer, March 2015
Macro tailwind #1: Mobile data usage to keep growing

Mobile data usage will continue to grow over the medium-to-long term, even
though current average usage is already relatively high at 3.3Gb/month vs.
other markets in the region. This will be driven by richer content (e.g.
HD/UHD video streaming), the rollout of faster mobile networks (LTE-A, 5G)
31
and the emergence of new use cases (e.g. health monitoring, connected
cars). Once voice/SMS/IDD (prepaid) and roaming revenues have declined
to a relatively small percentage of total mobile revenue, then the positive
revenue impact of growing data usage will become more apparent.
Macro tailwind #2: Evolution of incumbents
Besides traditional mobile, Pay-TV and fixed broadband services, we expect
the Singapore telcos to expand into adjacent businesses over the longer
term. These include mobile/digital advertising, Internet-of-Things/Machineto-Machine solutions and monetising Big Data insights. That said, these
businesses are nascent and it is difficult to predict how much these can
contribute to revenue in 3-5 years time.
Figure 74: Big 3 mobile revenue to drop 10.5% across 2016-20
Figure 75: 10-year treasury yields rising again since Jan 2015
(%)
(S$ m)
4,400
4.0
4,200
Title:
Source:
3.5
4,000
3.0
3,800
2.5
3,600
2.0
3,400
1.5
3,200
1.0
Jan-09
3,000
2013
2014
2015F
2016F
2017F
2018F
2019F
2020F
Jan-10
Jan-11
Jan-12
Jan-13
Jan-14
Jan-15
SOURCE: BLOOMBERG
Share prices for Singapore telcos have largely de-rated in 2015 on the back of
concerns over the potential entry of a fourth mobile operator. While FY16
EV/OpFCF (13.4x) and EV/EBITDA (8.4x) multiples have come down, they are
now in line with the regional average (14.0x and 8.1x, respectively). FY16-17
dividend yields of 5.8-6.0% are higher than average (3.9-4.6%), which are
necessary to compensate investors for the medium-term earnings risk.
Assuming the spectrum auction in 1H16 sees a fourth mobile license awarded,
we believe Singapore telco share prices could see valuation multiples drift
lower. If the spectrum auction does not result in the entrance of a fourth mobile
operator, we expect the sector valuation multiples to bounce up as the market
has largely priced in the scenario of more intense competition in the mediumto-long term. Prior to the market factoring in these bearish expectations,
Singapore telcos were trading at 1-year forward EV/OpFCF and EV/EBITDA of
about 15x and 10x, respectively, while dividend yields were c.4-5%.
Figure 76: Telcos stock-specific near-term and longer-term consideration factors
SingTel
Starhub
M1 Limited

operator in SG by m id-2 01 7
> SG Enterprise business under
increm ental pressure from STH/M1
> High Optus capex to narrow
network gap v s Telstra
> Flattish SG m obile rev enue growth

> Earnings dilution from Trustwav e
> Robust associate earnings growth

> Healthy Optus EBITDA growth in
A$ term s
> Long-term associate earnings

growth; still low data penetration
> Optus could gain m arket share on
im prov ed m obile network & NBN

> 'Cord-cutting' of Pay TV
>
>
>
>
> Fixed Broadband to return to m odest

rev enue growth on steady com petition
> Lower handset subsidies will help
offset loss of NBN grants
> Growth in Fixed Network Serv ices as

Enterprise m arket share rise
> Continued growth in m obile data
usage

> Flattish SG m obile rev enue growth

> Higher EBITDA m argin as handset

subsidies are m anaged lower
> 1 00% div idend pay out, attractiv e
7 .5% y ield
> Growth in Hom e Fixed Broadband &

Enterprise Fixed Network Serv ices
> Continued growth in m obile data
usage
Flattish SG m obile rev enue growth

No m ore NBN grants starting FY1 6
Potential new m obile entrant
Pay TV pressure on NetFlix's entry
32
Transport & Logistics: Logistics only long-term play after

land transport restructuring is done
Figure 77: Transport & logistics near-term and longer-term consideration factors
> Ov ersupply of container ships

> Slow dem and growth in US/Europe
> Mid East Gulf carrier expansion
Transport > Big ASEAN LCC orderbook
& Logistics > Threat to taxi business from Uber
> Singapore bus m arket opens up to
foreign play ers
> European container im ports falling

> Airline y ield pressures negate som e
of the low oil price benefits
> Increasing cost pressure for labour
as well as repair and m aintenance

> Som e signs of airline capacity
discipline in ASEAN
> Growing ridership from expanding
bus and rail network
> Long-term av iation dem and growth
from ASEAN, India and China strong
> Container shipping consolidation
could lim it destructiv e com petition
> Bus/rail m ov es to an asset light
m odel with im pov ed m argins

Near-term headwind #1: Airline yield pressures
Airline yields remain under pressure, particularly from 2Q15 onwards. AsiaEurope yields have suffered from weak Europe demand while Asia-US
yields have seen pressure due to competitive capacity additions. Premium
cabin demand has also been weak due to poor global GDP growth.
Near-term headwind #2: Shrinking container shipping demand
European container imports have shrunk 4.7% yoy for 9M15, so although
US container imports have risen 5.7%, this has not been enough to
overcome excess container shipping capacity in a year with record
newbuilding deliveries. Chinese imports have also slowed down significantly.
Figure 78: Asia-North Europe container spot rates (US$/teu)
Figure 79: SIA mainline yield (Scts/RPK)

12.5
2,500
2010
2011
2012
2013
2014
Apr 11 - Mar 12
2015
12.0
2,000
11.5
1,500
Apr 12 - Mar 13
11.0
Apr 13 - Mar 14
Apr 14 - Mar 15
10.5
1,000
Apr 15 - Mar 16
10.0
500
9.5
0
9.0
J
Ap r
SOURCE: CIMB RESEARCH, COMPANY DATA
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
Jan
Feb
Mar
Near-term headwind #3: Cost pressure for land transport

ComfortDelGro and SMRT will still have cost pressures, as they meet higher
operating demand and tightened regulatory standards. Both operators are
currently facing a shortage of bus drivers due to the governments tightened
foreign labour quota. The frequent rail breakdowns and the enlarged train
fleets also call for more repair and maintenance works.
Near-term positive #1: Signs of airline capacity discipline in ASEAN
LCCs (Lion Air, AirAsia) have pulled back from aggressive capacity modes.
Full-service carriers in Malaysia have cut capacity to Australia, China, India
and Europe and further capacity cuts to SE Asia may come in 2016. Oil
prices are expected to remain low in 2016.
Near-term positive #2: Growing ridership from expanding rail network
ComfortDelGro is expected to benefit from fresh fare income from the
Downtown Line (DTL) stage II, which is slated to commence operation by
Dec 15. DTL stage III (16 stations, 21km), projected to open by early-17, is
expected to eventually turn the whole DTL profitable. The improved
connectivity for the overall Singapore rail network may be a net negative for
SMRT as ridership potentially diverts from SMRTs existing Northsouth and
Eastwest Lines.
33
Figure 80: ComfortDelGros rail daily ridership (000) growth in

FY16-18 is mainly driven by operations of DTL stages II & III
Figure 81: Significantly slower taxi revenue growth since 3Q14
1400
300
1200
1000
500
60
71
79
427
453
481
515
540
551
562
574
379
FY10
FY11
FY12
FY13
FY14F
FY15F
FY16F
FY17F
FY18F
LRT
50
2.5%
0.0%
DTL
Singapore Taxi revenue (S$'m), LHS
3Q15
2Q15
1Q15
4Q14
3Q14
2Q14
1Q14
4Q13
3Q13
2Q13
1Q13
4Q12
3Q12
2Q12
1Q10
0
NEL
5.0%
1Q12
200
100
4Q11
52
7.5%
3Q11
400
150
90
2Q11
90
10.0%
1Q11
90
200
4Q10
220
63
87
600
15.0%
12.5%
3Q10
70
90
270
launch of
GrabCar
250
2Q10
800
launch of
UberX
launch of
UberBlack
yoy growth, RHS

Structural challenge #1: Oversupply of container ships and planes
Overcapacity for shipping and aviation will not go away quickly, in our view.
New capacity addition is high, as airlines and container carriers need to
invest to grow and improve efficiencies. Container carriers have to invest in
18,000 teu vessels or above to maintain competitive unit costs in the AsiaEurope trade. Capacity additions for Middle East Gulf airlines, and the
ASEAN-based LCCs are large and have the potential to overwhelm demand.
Structural challenge #2: Intensifying competition for land transport
LTAs liberalisation of the public transport market will introduce competition
into the market. Of the 12 bus packages under the new framework, three
will be tendered out before Aug 2016, and the rest will be kept by local
incumbents until Aug 2021; all packages will be released for tendering then.
The three packages look likely to go to foreigners. Should SBS Transit and
SMRT fail to compete in efficiency, they may lose more market share after
2021. Apart from buses, the operators taxi businesses are threatened by
the rise of private car booking apps, mainly Uber and GrabCar.
Macro tailwind #1: ASEAN, China and India aviation demand remains
strong in the long term
The longer-term tailwind is for air carriers based in ASEAN to benefit from
the secular growth of the regions economies, and also to tap traffic flows
coming from India and China.
Macro tailwind #2: Bus and possible rail reform will lead to higher
capital efficiency and potentially higher operating margin
The LTA is in the process of implementing a new government contracting
model, under which the government will own all the infrastructure and
operating assets and operators will just be contractors. By selling the bus
assets back to the authority, ComfortDelGro (75% bus market share) and
SMRT (25%) stand to recoup significant amounts of capital from the zeroreturn Singapore public bus business and potentially deploy them into
higher-return businesses. With the contract payment indexed to various
costs, the new model also underpins a more commercially viable bus
operating margin. Rail reforms come next, where SMRT benefits more from
the unlocking-of-capital angle.
Macro tailwinds #3: Shift from brick-and-mortar retail to e-commerce
SingPosts new business model rides on trends of the preference for ecommerce channels over physical channels. In 2014, e-commerce formed
just 5.9% of total retail sales worldwide; this is expected to grow to 8.8% by
2018. As consumers shift from brick-and-mortar retail to e-commerce with
the help of rising internet penetration and better infrastructure, SingPost will
be a key beneficiary. In particular, we expect SingPost to see growth from: 1)
rising demand for Western brands to set up an e-commerce presence in
34
Asia Pacific, especially in the growing markets of ASEAN, 2) demand for

end-to-end e-commerce logistics services through its JV platform with
Alibaba, and 3) higher volume of e-commerce parcels handled through its
freight forwarding links and last mile delivery network worldwide. The added
benefit of TPP and AEC is that SingPosts current US and ASEAN platforms
(recent M&As) will enjoy better customs clearance, hence, aid volume
shipment growth.
Figure 82: Bus operating margins are likely to improve under
the new contracting model
60
Figure 83: ComfortDelGro's net cash position would be

substantially strengthened after the bus asset sale
9.0%
1500
8.0%
1300
Title:
Source:
1,370
50
7.0%
40
1100
6.0%
900
5.0%
30
700
4.0%
20
500
3.0%
2.0%
300
10
1.0%
23
100
0
89
41
0.0%
FY09
FY10
FY11
FY12
FY13
FY14F FY15F FY16F FY17F FY18F
SBS Transit bus EBIT (S$'m)
-100
FY12
-9
EBIT margin
FY13
FY14F
FY15F
FY16F
Net cash (debt), S$'m
In aviation and shipping, the M&A theme is playing out right now, with SIAs
voluntary general offer (VGO) for the remaining shares in Tiger Airways that it
does not own, and with Temaseks potential sale of its stake in NOL to either
CMA CGM or Maersk. Tigers share price is already trading at the offer price of
S$0.41/share, while NOLs share price is also seeing upward momentum on
the expectation that Temasek will not sell its stake at lower than NOLs book
value of S$1.35/share. We expect the M&A theme, more than any fundamental
sector recovery in the container shipping space, to drive NOLs share price
performance. Fundamentally, container shipping is very weak, with freight rates
at extremely low levels, as European demand contracted this year by 4.7% yoy
during 9M15, just as newbuilding deliveries hit a historic high. 2016 looks like a
potentially better year for container shipping, as newbuilding deliveries slow
and an eventual European restocking demand resumes, though the drivers are
hazy. If NOLs sale to CMA-CGM or Maersk fails to materialise, we expect a
short-term sell-off in its stock. Our NOL target price of S$0.95 has been set at
its trough P/BV multiple of 0.76x (-1 s.d.). SIA has been poor despite low oil
prices, as competitive pricing on Europe and US routes crimps yields. Our
analysts believes one should not be too negative on SIA, as 1) it is making
great strides in growing SilkAir and Scoot, 2) the VGO on Tiger Airways should
help optimise its landing rights portfolio, 3) SIA is taking delivery of more
efficient A350s soon, 4) it has introduced premium economy, which can boost
yields, and 5) share price trades at trough levels (0.9x P/BV, -1.s.d.). For both
airlines and shipping, valuations cap downside but a material improvement is
difficult to envision, if global growth stays weak.
For land transport, we expect double-digit earnings growth for ComfortDelGro
in FY16 and high-single-digit growth in FY17-18, driven by DTL contributions
and improved bus margins under the new contracting model (effective Aug-16).
The effects are not repeatable. We expect P/E multiples to drift lower, driven by
increasing concern over the threat posed by Uber and GrabCar. CDs current
FY16F P/E (19.0x, +1.5 s.d.) is way above mean (14.9x). It is tough to chase.
SMRTs profit is set to decline 11% in FY16 and stay flat in FY17, hurt by a
1.9% fare cut and repair and maintenance expenses. The reprieve for SMRT is
FY18, when fares finally catch up with rising costs, and repair and maintenance
intensity drops. We expect SMRTs P/E multiple to drift lower, on repeated
earnings disappointment. A possible rail reform is a positive for SMRT, but with
35
only c.S$460m net capital (20% of market cap) to be unlocked from the
possible rail sale, the gain is likely to be fully priced in. SMRTs current 27.3x
FY16F P/E (+3.5 s.d.) is way above its mean of 17.0x. Best to stay away.
The only segment that has a brighter future is logistics. We expect SingPosts
share price recovery to be driven by earnings rebound in FY18, as SPOST: 1)
realises synergies from its recent acquisitions of TradeGlobal and Jagged Peak,
2) acquires new e-commerce customers, 3) helps customers expand into new
markets in Asia Pacific, 4) sees volume growth alongside Alibabas expansion
into international markets (ex-China), 5) realises economies of scale with
volume growth, and 6) completes the redevelopment of the retail mall at
Singapore Post Centre, which will double the current GFA.
Figure 84: Transport & logistics stock-specific near-term and longer-term consideration factors
Singapore
Airlines
> US exposure less than Europe

> Strong com petition from Mid East
Gulf carriers to Europe
> Strong com petition from North
Asian carriers to US
> Price com petition on long-haul

routes to Europe and US
> Front-cabin dem and weak due to
slow global GDP growth

> SIA's m ost expensiv e fuel hedges
expire in 2 01 5
> SilkAir's and Scoot's financial results

hav e im prov ed
> Tigerair VGO to optim ise SIA group's
portfolio of air traffic rights
> New airlines in India and Thailand
> 1 .9% fare cut effectiv e Dec-1 5;
Comfort
DelGro
> increasingly com petitiv e taxi

operating landscape due to the rise of
Uber & Grabcar;
> opening up of singapore bus m arket
to foreign operators.
> new earnings contribution of DTL

stage II;
> potential M&A driv en growth in
ov erseas m arket.
> capital unlocking from bus reform

initiativ e;
> better profitability under new
m odel.
> Slow growth in China reduces Asia

Pacific's cargo v olum e
SATS Ltd
> Increased m arket share of low-cost

carriers v s. full-serv ice flights reduce
the need for inflight catering
> Self check-in trend reduces need for
ground handling serv ices
> Margin expansion from de> Singapore becom ing a hub for AEC
consolidating food distribution div ision and its driv e to boost Changi airport's
costs to JV
traffic
> Declining letter v olum es

> Rising labour costs
> Com petition from startups in

ecom m erce logistics
> Better growth profile as it shifts

from startup phase to execution
> Sy nergies from recent acquisitions
of TradeGlobal and Jagged Peak
> Volum e growth as Alibaba expands
> Shift from brick-and-m ortar retail

to ecom m erce and om nichannel retail
> AEC will allow freer flow of goods
within ASEAN
> Declining m arket share of transpacific and Asia-Europe trade

> No orders for 1 8-2 0,000 teu
newbuildings
> Very poor Asia-Europe and transpacific spot freight rates

> Continuing losses despite y ears of
restructuring
> European destocking in 2 01 5 could

m ake way for m ore stability in
dem and in 2 01 6
> Transpacific dem and to continue
growing on good US GDP growth
> Acquisition by CMA CGM or Maersk

will help NOL im prov e efficiencies,
gain econom ies of scale, and m arket
share
Singapore
Post Ltd
Neptune
Orient
Lines
> increasingly com petitiv e taxi

operating landscape due to the rise of
SMRT Corp Uber & Grabcar;
> opening up of singapore bus m arket
to foreign operators.
> upward cost presssure from labour

and repair and m aintenance expenses;
> 1 .9% fare cut effectiv e Dec-1 5;
> rail ridership div ersion from
operation of DTL stage II.
> Potential capital unlocking from

rail reform ;
> m ore sustainable rail profitability
after rail reform .
36
Consumer, Gaming, Healthcare: Open markets mean more

opportunities, more competitors
Figure 85: Consumer, gaming, healthcare near-term and longer-term consideration factors
Stru ctu ral negativ es
> Sm all m ar kets for consu m er nam es
that focu s only on Singapor e
Consumer > Thr eat of com petition fr om big
companies br ands w ith AEC and TPP
> Changing tastes of new gener ation
Stru ctu ral positiv es

> AEC opens u p r egional m ar kets
> Rise in ASEAN m iddle class on the
back of AEC, OBOR and TPP
> Relativ ely u ntapped consu m er
m ar kets in IndoChina
> Anti-cor r u ption dr iv e in China

u nlikely to abate
> Weak ASEAN cu r r encies affects

v isitation fr om Malay sians and
Indonesians
> High bad debt char ges to r em ain
u ntil 2 H1 6
> Expansion into new m ar kets

(Resor ts Wor ld Jeju )
> AEC to dr iv e m or e inter national

v isitor ar r iv als fr om ASEAN
> High cost in Singapor e

> Gr ow ing nu m ber of lar ge hospitals

in the r egion pose as com petition
> Weak cu r r encies of neighbou r ing
cou ntr ies, act as headw inds against
m edical tou r ism
> Pass-on effects fr om gov er nm ent

initiativ es (CHAS and PG)
> Ageing popu lation

> Incr eased healthcar e expenditu r e
w ith gr ow ing afflu ence
Gaming
Healthcare
> Hou seholds in r egional ASEAN hav e > Wor st of cost pr essu r es fr om labor
to gr apple w ith r ising inflation as
cost and r ents, hav e alr eady peaked
cu r r encies spir al dow n
> Lack of dem and for discr etionar y
consu m ption item s w hen incom es slow

Near-term headwinds #1: Weak ASEAN currencies kill purchasing
power, hit Indonesian arrivals (-11% 9M15 YTD)
Consumer names (Super and Petra) continue to suffer on two fronts: 1)
weak end consumption (removal of fuel price subsidy in Indonesia and GST
implementation in Malaysia likely to have reduced purchasing power), and 2)
translation losses from rupiah exposure. In Thailand, Thai Bevs white spirits
sales have fallen, as famers incomes are hit with the end of rice subsidies.
In Singapore, medical tourism and gaming visitation are also down,
especially given their reliance on Indonesians and Malaysians.
Figure 86: Overall tourist arrivals down 0.3% YTD, especially
from Indonesia (-11%)
10%
Figure 87: Regional currencies remain weak against SGD,

Rupiah depreciated 3.1% YTD, Ringgit -12.5%
YTD change in currency, vs SGD
Total tourist arrivals - yoy % growth

Malaysian arrivals - yoy % growth
Indonesian arrivals - yoy % growth
10%
Title:
Source:
THB/SGD
IDR/SGD
RM/SGD
5%
5%
Please fill in the values above to have them entered in your r

0%
0%
THB -1.7%
-0.3%
-5%
IDR -3.1%
-5%
-4.6%
-10%
-10%
RM -12.5%
-11.0%
-15%
-15%
-20%
-20%
Jan-15 Feb-15 Mar-15 Apr-15 May-15 Jun-15 Jul-15 Aug-15 Sep-15
9M15
YTD
SOURCES: CIMB, STB
SOURCES: CIMB, BLOOMBERG
Near-term headwinds #3: Margin pressure for Dairy Farm in ASEAN

Dairy Farm is suffering from poor execution in ASEAN. Despite being a
consumer staple, it has had to cut prices in ASEAN to meet competition and
its margins have collapsed. As a supermarket, it remains geared to drivers
such as income growth and population growth in ASEAN in the longer term
but it needs to prove that it can execute and reclaim margins amidst a trend
of able competition from nimbler local competitors and small-formats.
Near-term headwinds #2: Challenges for RWS to persist till 2H16
GENSs Resorts World Sentosa (RWS) continues to recognise high bad
debt provision charges amidst a worsening credit environment. Although it
has scaled back on credit extension to VIPs recently, bad debt charges are
expected to remain high until 2H16 as it provides for credit extended 12-18
months ago. We expect the trend of RWS losing market share (to MBS) to
37
persist as RWS cuts back on credit extension to VIPs, while MBS has the
double advantage of location and availability of hotel rooms.
Figure 88: Bad debt charges at GENSs Resorts World Sentosa
(RWS) continue to remain high at least until 2H16
Figure 89: RWSs market share of rolling chip volume, VIP

GGR, mass GGR and overall GGR continues to fall below 50%
S$m
100
75%
65%
Leading mkt share
Title:
Source:
70%
90
80
60%
70
Average =S$61m
55%
60
Losing mkt share
50%
50
45%
40
40%
30
35%
20
30%
10
0
1Q13
2Q13
3Q13
4Q13
1Q14
2Q14
3Q14
4Q14
1Q15
2Q15
3Q15
Rolling chip volume
VIP GGR
Mass GGR
Overall GGR

Structural challenge #1: Chinas anti-corruption drive is unlikely to end
Chinas anti-corruption drive has hit RWSs gaming volumes; this trend is
unlikely to relent as the Chinese government continues to clamp down.
Structural challenge #2: ASEAN attracting global competitors
AEC and TPP will allow a middle class to grow in developing ASEAN;
attacking new growth markets in developing ASEAN will become a priority
for both ASEAN home-grown brands as well as global brand names. For
listed consumer stocks, expansion to new Indochina markets may see
topline growth not matched with profitability or returns for a while.
Structural challenge #3: High healthcare prices in Singapore
Singapore has traditionally been a hub for medical tourism with major pull
factors including world-class infrastructure and quality of care. While these
factors are still valid, regional competitors (Thailand, Malaysia, Indonesia)
are quickly upgrading infrastructure and healthcare services and could
challenge Singapores hospitals in the longer term. Key differentiators in the
ASEAN medical tourism industry include: 1) type of surgery: Thai hospitals
are renowned for elective surgeries vs. non-elective surgeries in Singapore,
2) price: treatment costs in Malaysia and Thailand are c.50% lower than in
Singapore, and 3) country of origin: Singapore is heavily dependent on
Indonesia as a source of medical tourists whereas Thailand sees more
Middle Eastern patients.
Figure 90: Treatment costs are relatively higher in Singapore,
followed by Thailand, Malaysian and India
Figure 91: Major sources of medical tourists, by country of

residence
Average medical cost comparison (in US$ '000)

Type of Procedure
Heart Bypass
Angioplasty
Knee Replacement
Gastric Bypass
CABG
Valve Replacement
Hip Replacement
Knee Replacement
Spinal Fusion
Gastric Bypass
Average of total
Relative to Singapore
Singapore
23.0
27.8
16.7
20.0
54.5
49.0
21.4
19.2
27.8
13.5
27.3
100%
Malaysia
14.0
8.8
10.9
8.6
20.8
18.5
12.5
12.5
17.9
8.2
13.3
49%
Thailand
13.0
3.8
11.4
16.7
23.0
22.0
16.5
11.5
16.0
12.0
14.6
53%
India
7.0
3.3
6.8
5.5
14.4
11.9
8.0
7.5
9.5
6.8
8.1
30%
Singapore
Indonesia (50+%)
Malaysia (5-10%)
Vietnam (5-10%)
Malaysia
Indonesia (50+%)
Others
Thailand
UAE (10%)
Myanmar (5-10%)
Oman (5-10%)
*data contains repeating procedures as we collate data from multiple sources

SOURCES: CIMB, PATIENT BEYOND BORDER, BANGKOK DUSIT INVESTOR SLIDES,
MALAYSIA HEALTHCARE TRAVEL COUNCIL
38
SOURCES: CIMB, STB, BH & BDMS INVESTOR SLIDES, MALAYSIA HEALTHCARE

TRAVEL COUNCIL
Macro tailwinds #1: AEC opens up markets!

The AEC is expected to open up markets among the ten ASEAN member
nations. Consumer and healthcare services are easiest to cross borders;
gaming is clearly subjected to regulations. Consumer names with a strong
domestic brandsin any of the ASEAN markets will have the access to
expand their markets. Barriers are that each ASEAN market will have
brands that the consumers have long associated with and will be difficult for
new competitors to dislodge easily. A growing middle class in developing
ASEAN countries will first drive up demand for meats, then consumer
durables.
Macro tailwinds #2: Asias ageing population
The structural theme of the regions ageing population will continue to drive
demand for healthcare services. The growing elderly population is a
significant statistic: on average, a person aged 65 and above has a 42%
probability of being admitted into a hospital and is 5x more likely to be
hospitalised than one aged between 15 and 64.
Figure 92: An ageing population will accelerate healthcare
expenditure
% of population above 65 years old
Figure 93: The probability of being hospitalised after 65 y.o. is

42% vs 8% for 15-64 y.o.
Population CAGR (2013-19)
18%
85 & above
80 - 84
75 - 79
70 - 74
65 - 69
60 - 64
55 - 59
50 - 54
45 - 49
40 - 44
35 - 39
30 - 34
25 - 29
20 - 24
15 - 19
10 - 14
5- 9
0- 4
4%
1.7%
16%
0.7%
0.5%
1.4%
1.3%
0.4%
14%
15.5%
2%
13.0%
0%
12%
10.2%
10%
8%
9.7%
8.9%
7.3%
6.9%
3.8%
4%
-4%
6.6%
5.4%
6%
-2%
5.3%
5.2%
4.7%
4.4%
-6%
-8%
2%
0%
-10%
Singapore
China
2000
Malaysia
2013
Thailand Indonesia
India
OECD
members
Title:
Source:
65 & above age group average = 424.4 per 1,000
5x
15-64 age group average = 83.5 per 1,000
200
400
600
800
Hospital admission rate per 1,000 population
Population CAGR (2013-19)
SOURCE: CIMB, WORLD BANK, IMF
SOURCE: CIMB, MOH SINGAPORE
We expect weak consumer consumption to remain a drag throughout 2016.
With an impending rate hike, emerging market currencies could see further
devaluation. 3Q15 corporate results have already indicated 1) a clear
slowdown in discretionary spending (OSIM, Petra), 2) a pullback in staples as
consumers grappled with inflation (removal of fuel price subsidy in Indonesia
and GST implementation in Malaysia), and 3) negative forex impact (Super,
Petra). Signs of a slowdown in China are also more apparent. Overall, the
macro picture looks weak. Accordingly, our preference is for resilient names
like Sheng Siong and IHH. Consumer stocks are currently trading at 16.8x
forward P/E (below historical mean of 25x), which we think reflects the reality of
weak ASEAN consumer consumption. Share price recovery for consumer
stocks will require signs of an earnings rebound before valuation multiples can
recover to historical means; we think a more sustainable earnings recovery will
more likely come only in 2017. Although AEC and TPP bring the exciting
prospects of new markets, we believe near-term drags of weak demand will
outweigh.
In gaming, we expect GENSs adjusted EBITDA growth to remain tepid
through 2016-17, due to: 1) further pullback in credit extension to Chinese VIPs,
2) high bad debt charges, and 3) weak ASEAN currencies impacting visitation
from Malaysian and Indonesian mass players. As such, we think that share
price performance could be muted over the medium term. We see earnings rerating potential only in the longer term, with the full opening of Resorts World
Jeju in 2019 and as new expansion opportunities materialise.
39
Healthcare stocks, although currently trading at rich valuations (+1 s.d.), are
seeing similar valuations across the region. Valuations expanded in 2015 on
the back of 1) aggressive expansion plans, and 2) M&A. Given that the most of
the expansion plans will likely only result in earnings contribution in 2017 at the
earliest, we think current valuations already reflect: 1) the sectors stable
earnings, 2) relative price inelasticity, and 3) positive structural themes of an
ageing population and increasing healthcare expenditure. Baring more M&A or
expansion plans in new growth markets (e.g. IHH entering India, RFMD
entering China), we believe that share prices will be driven by earnings delivery
and earnings growth will be the driver for the healthcare sector in 2016.
Figure 94: Consumer stocks are currently trading at 16.8x P/E,
below their historical mean of 25x
60x
Figure 95: IHH is currently trading at more than 1 s.d. above its
historical trading band
IHHs 12m forward EV/EITDA
trading band (x)
29.0x
Consumer 12-mth Fwd

Rolling FD Core P/E (x)
27.0x
50x
+1 s.d. 24.5x
25.0x
+1 SD
40x
23.0x
21.0x
30x
average 21.9x
Mean
19.0x
-1 s.d. 19.3x
20x
17.0x
10x
-1 SD
15.0x
$A$1:$G$18
0x
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
EV/EBITDA
+1 s.d.
Average
-1 s.d.
Figure 96: Consumer stock-specific near-term and longer-term consideration factors

> Managem ent is not prov en in

com petitiv e business
> Weak tourism m arket in Thailand

> Potentially weak spirits business as
farm ers' incom e take a hit from the
rem ov al of rice subsidies
> Muted com petition (in term s of A&P > Enjoy m onopoly priv ileges from its
spend) as m arket is weak
spirits business, which generates free
cash flow to com pete in other business
> Vision 2 02 0 giv ing it a chance to
m orph into a regional business
> Structural decline in m argins with

m ore com petition in ASEAN
Dairy Farm > Fall of hy perm arkets
> E-com m erce threat
Int'l
> ASEAN operations y et to hav e

bottom ed out; Indonesia losing m oney
> Weak consum er sentim ent
> Weak ASEAN currencies v s. US$
> Expect stronger 2 H1 5

> Stronger-than-expected
contribution from Yonghui
> Div idends to be m aintained despite
turning into net gearing of 0.4x
> Traditional print m edia becom es

obsolete with new digital channels
> Gov ernm ent restrictions on
property and car ownership will curb
growth in adv ertisem ents
> Soft adv ertising m arket as retailers

cut A&P budgets
> Weaker Rupiah could hurt shopper
traffic and high-end retail spend at its
m alls
> Full-y ear contributions from The

Seletar Mall in FY1 6 (v s. 9M in FY1 5)
> Expansion into new m arkets m ay

burn resources
> Weak Indonesia consum ption

> Weak Rp hurting m argins
> Likely to claw back m argins from

price hikes to pass on higher m aterial
costs, from Rp effect
> Valuations getting attractiv e, on
tem porary depressed earnings
> Newer stores in HDB hubs are

sm aller (4k sf v s ~1 2 k sf of old stores)
> E-com m erce
> Lim ited sam e store sales growth

capped by weak retail sales
> New stores secured in 2 01 5 (+ 6.5%

to total GFA) will driv e topline growth
> Further GPM im prov em ent from
central distribution centre
Super
Group
> Preference of lifesty le caf chains to

consum e coffee in affluent cities, v s.
traditional 3 -in-1
> Weak ASEAN m arkets for both

branded consum er and ingredients
> Weak ASEAN currencies
> Weak clim ate for discretionary
spending
> Brand building expenses for TWG
> Cash pile to undertake acquisitions
OSIM Int'l
> Rise of cheap copy cats in China's

online sales channel, eroding brand
v alue and prem ium v alue of product
> Delay in ticket price hike to FY1 7

(from FY1 6 prev iously )
> Opening of Shanghai Disney land in > Growing dem and for dom estic
2 01 6 will benefit v isitation to SOA
tourism in China will benefit its
> UWX is likely to hav e bottom ed out attractions
> Redev elopm ent of retail term inal at
the Fly er will driv e better rents
Thai
Bev erage
Singapore
Press
Holdings
Petra
Foods
Sheng
Siong
Group
Straco
Corp
> Rise of sm all-form at superm arkets

> Inv estm ents in em erging m arkets
(Philippines, Cam bodia, China)
> Supply chain to im prov e with
inv estm ents in IT, DCs and better
infrastructure in ASEAN
> Shift to online channels will benefit
its inv estm ents in new m edia (e.g.
sgCarMart)
> Com bination of brands and

distribution giv e it a attractiv e
consum er franchise business in
Indonesia
> Has new products targeted towards

the m ass prem ium category
> Rising affluence in Asia's first tier

cities
40
Figure 97: Gaming and healthcare stock-specific near-term and longer-term consideration factors
Genting
Singapore
> Anti-corruption driv e in China

continues to driv e down v isitation
from Chinese VIPs
> Bad debt charges to rem ain high

until 2 H1 6
> Market share will likely erode
further as RWS continues to tighten
credit extension to VIPs
> Better v isitation to its attractions

with the opening of Genting Hotel
Jurong (GHJ) and new rides at USS
> Resorts World Jeju to open
progressiv ely from 2 01 7 -1 9
> Waning m edical tourism
> Organic growth in core m arkets as > Building up its presence in long
they ram p up capacity
term growth m arkets India and China
> Translation effects, strong S$ v s RM
> Saw its first-ev er decline in m edical

tourism in 3 Q1 5
> Cost pressures from ram ping up
capacity at new expansions
> Holland V will start contributing in

1 Q1 6
> Vendor sale concern
> Downward rev isions of profit targets > M&A rem ains a key agenda for
> Consolidation of priv ate dental
(of up to 2 0% seen so far)
m anagem ent
m arket in Singapore
> Slowing organic growth
> Outperform ance of profit guarantees > Expansion into China
IHH
Healthcare
Raffles
Medical
Group
Q&M
Dental
Group
> AEC to driv e m ore international
v isitor arriv als from ASEAN
> Expansion of current hospital in

1 H1 7
> Expansion into Shanghai (in 2 01 8)
41
Capital goods: Challenges aplenty for yards, expect to

transform into infrastructure plays
Figure 98: Capital goods near-term and longer-term consideration factors
Capital
Goods

> Longer interv al, lesser m aintenance
needs for new aircraft and engines

> Weak operating m etrics
capital
> O&M activ ities are backed by Middle > Urbanisation trends in ASEAN new
East OPEC production
spurring property m arket and
dem and for infrastrucuture/ utilities
> Terrorism stokes security spending
Near-term headwinds #1: Brazil- when it rains, it pours

KEP and SMM have various fires to fight in Brazil. Sete Brasils contracts
(totalling c.US$10bn) make up 60-70% of their order books. Construction of
the rigs will likely come to a pause by early-2016 as project cashflows sink
into the red given the long-drawn-out restructuring plans by Sete Brasil.
Outright cancellation of all 13 rigs (7 drillships for SMM, 6 semi-subs for
KEP) may not be realistic given the heavy investments sunk in (KEP and
SMM collected US$3bn of upfront payment). Although various stakeholders
and creditors (Petrobras, national banks, pension funds) have too much to
lose, we believe the process towards a settlement for these rigs will drag
on; the timeline has proven to be a moving target. In early-Nov 15,
Petrobras denied a formal restructuring plan with 18 rigs (down from 29
rigs) and said negotiations were still underway involving possible changes
to the total number of rigs already contracted, and other aspects. We
believe the problems of these rigs are beyond bridging loans and
restructuring at Sete Brasils level; issues loom, with the ongoing Petrobras
corruption probe, political uncertainty surrounding the impeachment of
President Dilma Rousseff as well as the much-needed fiscal shake-up for a
nation coping with plunging reals and economic turmoil. To spend
US$10bn on deepwater assets against a low-oil environment may spur
more unrest. Lastly, even on a best-case scenario of non-cancellation, we
see risks for provision of impairment of contract value. The rigs were
awarded at a cost of c.US$800m/each and meant to be chartered to
Petrobras at US$530k/day. Petrobrass deliberate effort to reduce capex,
has seen it slash day rates at least 20% across the new-generation rigs
(less than 10 years old); that makes the realisable value of the rigs being
built by KEP and SMM questionable.
Near-term headwinds #2: Weak operating metrics

A severe order drought, less profitable orders (as hungry yards chase for
orders) and operating leverage effects mean that forward earnings for
yards will come under even more pressure. We see more cancellations of
contracts, litigation and profit reversals among the yards. Elsewhere,
vessel owners earnings have plunged in tandem with the oil price rout.
Fleet utilisation has slid from c.80% to c.60% while charter rates have
dropped 10-30% yoy. We found that contracts were not sacrosanct as
vessel owners experienced contract terminations and rate cuts. That said,
to play the cycle recovery, we would lean towards the vessel owners as
any uptick would immediately translate into improved utilisation and charter
rates. For yards, the market still has to absorb the supply glut of equipment
before there is any chance of a next wave of order spree.
Near-term headwinds #3: Credit crunch

The O&M sector is experiencing a double whammy - deteriorating
fundamentals and rising interest rates. During the boom, many of the
small/mid-cap oil services companies took on more debt to fund fleet
expansions. Debt service and interest coverage are now coming under
pressure; we have seen small-caps (Dyna-Mac, Pacific Radiance, Marco
Polo Marine) seeking consent from their debt holders to amend their
respective financial covenants. Net gearing has also hiked up, more so for
42
the yards than vessel owners. A deferral of newbuilds has lengthened cash
conversion cycles and stretched working capital requirements. Customers
are also paying slower as they suffer a cash flow crunch. KEP and SMM
have seen net gearing deteriorate to 0.5x and 0.7x from 0.1x and 0.2x,
respectively, in 2014. Both yards may be forced to bail Sete Brasil out by
financing 2-3 units of the Brazilian rigs, putting more pressure on the
balance sheet. Meanwhile, vessel owners net gearings are also expected
to rise in 2016 due to their committed capex. Their capex cycle is only
expected to moderate in 2017, and leverage can recede only then. Our
credit study concludes that although credit risks are heightened, there is no
material risk of insolvency. Also, all our rated companies, except Ezra, do
not have bonds payable in 2016. Arguably, credit risks for tier-2 companies
are stretched and the likelihood for cash calls is high. They, however, will
not be the first, as both Ezra and Swiber re-capitalised in 2015 to buttress
their balance sheets. Generally, we think the likelihood of an insolvency is
low. Bearing in mind that insolvency is a process, and rarely hinges on a
trigger event, available levers for companies to save themselves include
committed undrawn banking lines, financial restructuring and cash calls.
Figure 99: Negative project cashflows for Sete Brasil projects
Name
Contract
(US$'m)
Figure 100: Deteriorating net gearing for O&M companies
Cum. completion Collected Project cashflow

@ 3Q15
**
(US$'m) as of 3Q15
B
A-B
KEP
Urca
809
90%
539
(189)
Unit 2
Unit 3
Frade
Bracuhy
823
823
66%
36%
362
251
(182)
(45)
100.0%
Unit 4
Unit 5
Unit 6
Portogalo
Mangaratiba
Botinas
823
823
823
11%
4%
0%
84
83
83
84
83
83
80.0%
1,403
(165)
SMM
Unit 1
Unit 2
Unit 3
Unit 4
Unit 5
Unit 6
Unit 7
Arproador
Guarapari
Camburi
Itaoca
Itaunas
Sahy
Siri
568
487
248
171
157
130
133
1,894
(129)
(139)
(267)
(138)
157
130
133
(254)
792
792
792
792
792
792
792
5,547
88%
79%
65%
39%
0%
0%
0%
2015
2016
120.0%
Unit 1
4,926
2014
140.0%
60.0%
40.0%
20.0%
0.0%
KEP
SCI
SMM
EZI
EZRA
MMT
NCL
PACRA SWCH
** Based on audited f/statements fr Sete Brasil as at 31/12/14

*** CIMB estimate
Figure 101: Tidewater as a bellwether for the global OSV:

falling day-rates and utilisation
Figure 102: When stressed, we conclude that although credit

risks are heightened, there is no material risk in cash calls
Company
FY16 net debt-to-total FY16F Net debt-to-EBITDA FY16F EBITDA-to-totalequity(x)

(x)
interest expense (x)
Stress test Base case Stress test Base case Stress test Base case
Ezion
0.8
0.7
4.3
3.1
6.0
8.6
MMT
0.7
0.6
8.8
6.5
7.7
11.1
Nam Cheong
0.4
0.4
5.5
3.0
1.3
2.9
PACRA
1.1
1.0
10.2
6.8
3.9
6.3
Swissco
1.1
0.9
6.3
4.3
2.9
4.5
Vard
0.0
0.0
0.7
0.2
4.8
8.5
Simple average
0.7
0.6
5.9
4.0
4.4
7.0
Near-term positives #1: Middle East, liftboats and LNG

Within the offshore & marine segment, we identify three pockets of
opportunities. First, activities in the Middle East remain elevated as OPEC
keeps up production. Companies that have significant exposure to the
Middle East, including Atlantic Navigation, Mermaid Maritime and Vallianz,
43
are reporting good earnings. We also continue to see secular long-term

demand for liftboats, which is touted to be a safer, more reliable and
productive maintenance solution to shallow-water oil platforms vs. the
traditional solution of maintenance work barges/boats. Similarly, LNGrelated equipment such as FLNG (Floating Liquefied Natural Gas) and
FRSU (Floating Storage Regasification Units) are needed as Asias
urbanisation theme prevails and power demand continues to grow.
Additionally, with an eye towards a greener future, gas is increasingly touted
as a replacement for coal in power generation.

Structural challenges #1: Oil price direction
A higher oil price is needed to lift the dreariness across the sector. It would
also help to prompt capex spending again. Since the 1980s, this is the first
time that the industry has cut investment in two consecutive years. Given a
less-than-robust demand growth scenario (we still expect global demand
growth to be at least 1mmbd) and a resilient US shale industry, we stand by
the mantra of lower-for-longer. We expect oil prices to trade tightly within a
lower range of US$50-70/bbl for the next 3-5 years.
Hiding behind oil hedges and the deflation of the supply cost curve, US
shale has been surprisingly resilient. We guesstimate that the breakeven for
US shale has fallen from US$60-80 to US$40-60 as companies now focus
on the sweet spots. While we are incrementally encouraged by the drop in
US shale output of 0.5mmbd since Apr (as the effects of low oil prices and
supply cuts are finally being felt), we believe that deeper cuts are necessary
to bridge global supply-demand imbalance of 2mmbd (global demand at
c.95mmbd and global supply at c.97mmbd). Simple mathematics puts that it
would take the market at least two years to reach equilibrium, assuming that
supply stands still and that demand growth would be 1mmbd p.a.
Additionally, we are wary of a sharp recovery in prices as that would
stimulate more US shale production. The nature of shale with multiple,
inexpensive, short-lived wells means that producers can stop and start
drilling on a dime. A sharp uptick in oil prices would spur a sharp output
boost, and hence, renew downward pressures on prices.
In the nearer term, we expect oil prices to enjoy a better 2016 vs. the
US$55 it averaged in 2015 as the effects of low oil price are being felt. In its
recent market report, IEA expects demand growth for 2016 to slow to
1.2mmbd (2015: 1.8mmbd) but project non-OPEC supply to decline by
0.6mmbd.
Structural challenges #2: Newer planes+ hungrier OEMs = less MRO
Innovative breakthroughs in technology on the new-generation aircraft and
engines have generally improved the reliability of equipment, resulting in
declining maintenance needs. Improved aircraft health monitoring
technologies and predictive software also create better awareness among
airlines to control their maintenance schedules. The approach cuts labour
costs by reducing unscheduled repairs, out-of-service events, and costs for
employee time-on-tools. These savings will cut into MRO services,
progressively. New generation aircraft also provides OEMs the opportunity
to introduce licensing schemes and limit access to repair data for more
aftermarket services. More partnerships between independent MROs and
OEMs are crucial to preserve market share. Although the global fleet of
narrowbody aircraft will expand, especially in Asia Pacific, to mitigate the
lower maintenance scope, the uncertainty in the regions economic profile
could slow down the expansion mode.
Macro tailwinds #1: Industry consolidation is required for profitability to
return to the sector and material M&As could indicate that the industry has
bottomed. So far, the western world has seen three M&As, namely Shells
acquisition of BG, Halliburtons acquisition of Baker Hughes and
Schlumbergers acquisition of Cameron. We believe that more consolidation
could take place among the international oil companies to form even bigger
44
or mega-oil entities. As gleaned from the mergers of Halliburton and Baker

Hughes and the merger of Schlumberger and Cameron, consolidation at the
oil services sector also reflects the need for a truly streamlined, one-stop
shop for oil companies, plus more standardisation and less specialisation,
as well as the combination of technologies to drive further efficiency in
extracting hydrocarbons. We believe that the Ezra-Chiyoda subsea JV
could be considered the first of material M&As within Asia Pacific.
If this cycle turns out to be longer and harder, consolidation could be on the
cards for SMMs and KEPs offshore & marine arms. This could be a
nationalistic call in the next 5 years, to re-deploy yard capacity into other
innovative industries in Singapore. Case in point was the 1997 initiative to
merge Sembawang Shipyard with Jurong Shipyard to form todays SMM
and the reverse take-over of Hitachi Zosen by Keppel Shipyard. The failed
consolidation talks between SMM and KEP in 2001 were also another effort
to create a mega yard to fend off competition from regional yards.
Macro tailwinds #2: Terrorism inflates need for defence spending
The challenges posed by terrorism, cyber-threats and military buildups by
radical groups could mean larger defence budgets and homeland security
spending for government agencies. We see pockets of opportunities to
balance the diminishing demand for commercial heavy-industrial equipment
with defence-related equipment. We see STE as a key beneficiary over the
long term as defense capabilities span across the groups four segments
marine navy vessels, aerospace military aircraft maintenance, land
systems - weapons and ammunitions and electronics - IT solutions for cyber
security.
Macro tailwinds #3: Urbanisation trend and infrastructure investment
Urbanisation will be a long-term trend in Asia, fuelled by emerging
economies - Myanmar, Vietnam, India and Bangladesh, among others.
Second-tier cities in China will also benefit from the continued rise of the
middle-income class. Urbanisation will drive housing demand, need for town
planning, cleaner water, electricity, railway lines (mass transit systems),
roads (tolls), airports, renewable energy and waste management. We
believe the Singapore Inc. conglomerates such as KEP, SCI and STE will
benefit from the trend by exporting their expertise to the countries in need.
Figure 103: Global demand stands at 95mmbd. IEA estimates
demand growth to slow to 1.2mmbd in 2016 from the 5-year
record high of 1.8mmbd in 2015
Figure 104: Global supply demand stands at 97mmbd. IEA

estimates US shale to decline by 0.6mmbd in 2016. The wild
card is OPEC supply growth, which is at record of c.32mmbd
SOURCE: IEA NOV 2015 OIL MARKET REPORT
SOURCE: IEA NOV 2015 OIL MARKET REPORT
We believe the effects of the short-term negatives for the offshore & marine
sector will take at least two years to flush out. 2016-17s earnings will take the
brunt of order drought in 2015-16 as well as have to cope with negative
operating leverage. The earliest that earnings recovery will take place will be in
2018, starting from a lower base. Small-cap stocks with weak financial muscle
45
may be plagued by default risk as they get squeezed by customers; distress

valuations will be the result. Among the bigger players, valuations are likely to
remain at -1 s.d. from the historical average in the next two years (if Brazilian
contracts do not bomb out) on the back of execution of orders while P/BV could
trend lower due to deteriorating earnings and recent years capex (yard
expansion/ new acquisitions).
If oil prices remain low for longer, the two conglomerates (KEP, SCI) will
emerge from this cycle evolving towards 2018/19. We expect the earnings
profile of KEP and SCI to change significantly in 3-4 years. We expect KEPs
property division to dominate, accounting for more than 50% of its earnings, led
by real-estate projects in China and Vietnam. SCI will also see more power
plants coming on stream from India, China, Bangladesh and Myannmar. In
addition, we expect to see more investments in renewable energy, including
solar and wind power.
Figure 105: Capital Goods stock-specific near-term and longer-term consideration factors
Keppel
Corp

> Com petition from Japan, Korea and
China

> Ov ersupply of global rigs lead to
order drought
capital as deliv eries are deferred
> Relaxed property m easures in China > Property div ision to benefit from
sustaining hom e sale in second-tier
urbanisation trends in ASEAN new
cities in China
ST Eng
> Longer interv al and lesser

m aintenance scope for new aircraft
and engines
> Com m ercial offshore capex decline
on low-oil env ironm ent
> Slow down in construction sector in

Brazil and China affects dem and for
specialty v ehicles
> Cabin retrofit spending from higher > Beneficiery of regional hubbing
profitability am ong airlines
spending on inco-com m and
infrastructure
> Defense spending heigtened to cope
with incresing threats from terrorists
Sembcorp
Ind
Sembcorp
Marine
Y angzi
jiang
Shipbldg
SIA Eng
Ezion
Holdings
Y oma
Strategic
Holdings
> Power prices in Singapore to rem ain > Earnings drag from m arine
low on liberalisation of power m arket (cancellations, profit rev ersal)
> Start-up of two India power plants to > Dem and for utilities in dev eloping
grow utilities earnings
contries including India, Bangladesh
and My anm m ar

> Com petition from Japan, Korea and
China

capital as deliv eries are deferred
> Negativ e operating lev erage from
new y ard in Brazil
> Recov ery in cruise ship industry

helps to sustain repair jobs
> Wide range of product offering - rigs,

ship repair, platform s
> Com petition from Japanese and

Korean y ards with better technical
capability
> Cancellation and deferall risks of

bulk carriers
> Weak order m om entum
> Interest incom e from fund under

HTM inv estm ent
> Inv esting in new products- gas
carriers
> Well run with prov en track record

non state-owned Chinese y ard which
will benefit from the return of
shipping m arket
> Longer interv al and lesser

m aintenance scope for new aircraft
and engines
> In between cy cles for the next heav y

checks for new generation engines
aircraft and new-generation engines
> Stable line m aintenance from

Changi airport
> Baseload fleet m aintenance from

parent com pany , SIA
> Singapore becom ing a hub for AEC
and its driv e to boost Changi airport's
traffic
> 2 H1 6 to see im prov em ent with

m ore rig deliv eries
> Credit m etrics are resilient; lim ited
refinancing pressures in near-term
> Secular dem and for liftboats rem ain

intact
> Prolonged low-oil price env ironm ent > Poor execution as deliv eries are
> Lower returns on assets as custom ers repeatedly delay ed
becom e m ore dem anding
> Industry headwinds: contract
cancellations & rate cuts
> Im pairm ent & receiv ables risks
> Current net gearing of 1 .1 x
> a possible property price bubble
> subdued residential property sales
> poor education lev el
before the form ation of a new
gov ernm ent.
> strong growth in the non-real estate > My anm ar's political and econom ic
segm ents, including autom otiv e,
reform ;
consum ers and tourism .
> fav ourable dem ographics.
46
Commodities: Optimism from slower supply growth ahead

doused by rising production cost
> Rising costs, stagnating y ields

> Negativ e perception on palm oil
> Reducing cost com petitiv eness
against oilseeds
> Record palm oil and soy bean stocks

> Weak biodiesel and Chinese dem and
in 2 01 5
> New acctg standards will lead to
lower earnings in 2 01 6
Co
m
m
od
i
tie
s
Figure 106: Commodities near-term and longer-term consideration factors

> Higher biodiesel dem and from
Indonesia
> El Nino to reduce supply and
potential boost prices
> Strong dem and from India
> Slower new plantings rate to reduce
future supply
> Growing m iddle class group in Asia
will boost consum ption
> Rising biodiesel m andates in
Indonesia and Malay sia

Near-term headwinds #1: High stockpile is a drag on CPO prices
Palm oil stocks in Malaysia rose 31% yoy to a record 2.83m tonnes as at
end-Oct 2015. This, coupled with record global soybean stocks, has partly
contributed to the 20% decline in CPO prices to US$545 per tonne.
Near-term headwinds #2: Low oil prices dampen biodiesel demand
Lower discretionary biodiesel demand as current low crude oil prices make
biodiesel uncompetitive.
Near-term headwinds #3: Higher CPO levy cuts Indonesian CPO price
Indonesia started imposing a US$50 per tonne levy on palm oil exports on
16 July. This has reduced the CPO price in Indonesia.
Near-term headwinds #4: New accounting standards raise depreciation
charges. The amendments of FRS16 will lead to a one-off write-down in the
biological value of estates to cost and raise future depreciation charges as
planters will now be required to depreciate their estates in FY16. We
estimate this could reduce Singapore planters shareholders equity by up to
60% and cut planters profits by up to 20%.
Near-term positives #1: El Nino to cut 2016/17 palm oil supplies
The recent dry weather and haze in Indonesia (El Nino) are expected to cut
palm oil supplies from Malaysia and Indonesia in 2016 and 2017. This will
result in tighter palm oil supplies and boost CPO prices in 2016.
Near-term positives #2: Higher biodiesel consumption from Indonesia
Indonesia plans to raise biodiesel usage to 5m-7m kls from around 1.2m kls
in 2015 via the CPO levy fund. This will be positive for CPO prices in 2016.
Near-term positives #3: Strong palm oil demand from India
We project stronger palm oil demand from India due to rising income and
population growth, as well as lower domestic oilseeds supplies due to
reduced rainfall in the key planting areas.
Figure 107: Historical relationship, CPO prices and stocks
('000 tonnes)
Stock (LHS)
CPO price (RHS)
Figure 108: CPO price change during ENSO cycle
(US$ /tonne)
3,000
1,400
Type
Period
1,300
El Nino
May 97 - Apr 98
Title:
Intensity
Strong
Source:
% chg in CPO price*
2,800
22.5%
15.1%
2,600
1,200
La Nina
Jul 98 - Mar 01
Strong
-63.8%
-33.8%
2,400
1,100
El Nino
May 02 - Feb 03
El Nino
Jul 04 - Jan 05
Weak
-10.1%
2,200
1,000
La Nina
Nov 05 - Mar06
Weak
2.2%
6.2%
2,000
900
El Nino
Sep 06 - Jan 07
Weak
32.3%
19.3%
1,800
800
La Nina
Aug 07 - Jun 08
Moderate
50.8%
75.9%
1,600
700
La Nina
Dec 08 - Mar 09
Weak
26.3%
1.0%
El Nino
Jul 09 - Apr 10
32.1%
16.2%
% chg in soy oil price*
Moderate
26.5%
18.8%
Please
fill in the values above to have
them entered in your report
Moderate
Auto
update
-16.0%
1,400
600
La Nina
Jul 10 - Apr 11
Strong
45.1%
53.4%
1,200
500
La Nina
Sep 11 - Mar 12
Moderate
9.8%
-1.6%
1,000
Jan-08 Jul-08 Jan-09 Jul-09 Jan-10 Jul-10 Jan-11 Jul-11 Jan-12 Jul-12 Jan-13 Jul-13 Jan-14 Jul-14 Jan-15 Jul-15
400
* Changes are calculated using prices at the end of ENSO cycle and prices at the beginning of ENSO cycle
SOURCE: CIMB, MPOB
47
SOURCE: CIMB RESERACH

Macro tailwinds #1: Growing demand for palm oil
Demand for palm oil for food from China, India and many other emerging
and developing countries is projected to rise in the coming years, driven by
population growth and increasing consumption. Rising biodiesel mandates
in Indonesia and Malaysia will lift the growth in non-food usage for edible
oils over the next few years. Indonesia plans to implement a 20% biodiesel
blend by 2016. Malaysia has plans to raise its biodiesel blend to 10%.
Macro tailwinds #2: Slower palm oil supply growth
Slower new plantings in Indonesia over the past few years due to higher
land compensation costs and lower CPO prices will lead to lower palm oil
supply growth in the future. This is evidenced by the decline in germinated
seed sales in Indonesia.
Structural challenges #1: rising costs of production
Rising labour costs due to higher minimum wage in Indonesia and labour
shortage, plus stagnant FFB yields could erode the cost competitiveness of
palm oil against other edible oils.
Structural challenge #2: Anti-palm oil lobby
Palm oil continues to face challenges that could negatively impact the global
perception of palm oil products. If the negative campaign against palm oil
gains momentum, the long-term demand for CPO could be negatively
affected, hence widening its price discount to other edible oils.
We believe Singapore planters share prices could recover in 2H16, driven by
an earnings recovery. The earnings recovery is due to a low base effect after
most of the negative impact from the changes in the IAS41 policy is priced in.
We expect CPO prices to trend higher in 2016 driven by lower palm oil supplies
due to El Nino and higher biodiesel consumption in Indonesia. However, this
will be partially offset by lower FFB output from the planters. Among the
planters under our coverage, we prefer planters like First Resources that offer
young estates and low costs of production as the company will be a prime
beneficiary of the next upturn in CPO prices.
Figure 109: Commodities stock-specific near-term and longer-term consideration factors
Wilmar
Int'l
Golden
AgriResources
First
Resources
Ltd
CWT
Limited
Indofood
Agri
Resources
> Flattish FFB output growth due to

slower new planting
> Rising com petition from other palm
oil play ers in the downstream sector
> Weak RMB, Rupiah currencies will

negativ ely im pact earnings
> Ov ercapacity in refining and
crushing industries
> Better crush m argins prospects in

China
> Beneficiary of higher biodiesel usage
in Indonesia
> Growing m iddle class population in

Asia
> Expanding its consum er products
div ision
> Av g age of palm trees is 1 5 y ears

and slow new plantings
> Higher gearing ratio following IAS
41 am endm ents m ay lim it its M&A
ability
> Lower y ields/output due to El Nino

> IAS41 am endm ents led to higher
dep charges in FY1 6
> Higher CPO prices in FY1 6 due to

lower palm oil supply + higher
biodiesel usage
> Better downstream m argins due to
new palm oil lev y
> Growing m iddle class population in

Asia will boost palm oil consum ption
> Expanding downstream business to
grow earnings base
> Rising labour costs in Indonesia

> Stringent new planting criterias

> IAS41 am endm ents led to higher
dep charges in FY1 6
> Higher CPO prices in FY1 6

> One of the appointed biodiesel
suppliers for Pertam ina
> Young estates and large land bank to

driv e future growth
> Strong m anagem ent and low costs of
production
> Com m odity logistics likely to stay

soft as com m odity prices rem ain low
> Surge in financial serv ices rev enue

unlikely to sustain as arbitrage closes
> Dem and for copper concentrates and
naphtha unlikely to rebound
> Potential buy out could driv e share > Dem and for integrated logistics
price up
serv ices in Singapore to grow with its
> Opening of m ega integrated logistics location as an ASEAN hub
hub in m id-2 01 7 will driv e logistics
earnings
> Av g age of palm trees is 1 4 y ears

> Higher costs of production due to
older estates

> Higher CPO price in FY1 6
> Weak Rupiah led to translation forex > Stronger sugar prices to benefit its
losses on borrowings and IAS41
sugar div ision
resulted in higher dep charges
> Large unplanted land bank

> Potential growth prospects for its
sugar business
48
Others: Companies that will thrive and fallen angels

Figure 110: Others stock-specific near-term and longer-term consideration factors
> rising raw m aterial prices
> uncertainties related to the Chinese

gov ernm ent's procurem ent policies for
pharm aceuticals.
> sales growth from the upgrading of

m arketing and sales network;
> potential increasing ASP of Su Xiao
Jiu Xin pills.
> Succession issue

> Pricing pressure
> Wage pressure
> Higher tax rate

> Increasing working capital
requirem ents
> Fav ourable exchange rate tailwind > Non traditional tech nam es
> End of custom er consolidation issues (Alphabet, Am azon) capitalising on
their branding to create new products.
> New innov ation - IOT, 3 D Printing,
Life Sciences
> Rise of Fintechs

> Lack of R&D
> Short-seller allegations against

com pany to be addressed
> Concerns on IPTs im pact on
Silv erlake's profitability
> Possible order wins from Malay sian

bank
> Growing high m argin recurring
rev enue
> Capital-intensiv e business
> Stiffer com petition in China's water
> Estim ated net gearing of c.41 % as at > Upcom ing 1 3 th 5-y ear plan in
China to prov ide further stim ulus
> Water assets along coastal regions to
benefit from "One Belt, One Road"
Ev erbright International) and IFC
Tianjin
Zhongx in
Pharma
Venture
Corp
Silv erlake
Ax is Ltd
> China's ageing population
> China's SOE reform
> Opportunites in ASEAN as banks

consolidate and expand regionally
> Potential for penetration into the
China m arket
> Receiv ables risk from industrial and sector to weigh on IRRs and expansion end FY1 5 offers lev erage potential to
China
plans.
boost ROE.
Ev erbright m unicipal custom ers
> Reduction in VAT rebate from 1 00% > Strong ties with SOE (China
Water
to 7 0% effectiv e Jul-1 5
China
Merchants
Holdings
Pacific
> slowing Chinese econom ic growth.
> traffic div ersions from com peting

toll roads and high speed rail.
> increasing interest cost pressure.
> Capital-intensiv e business

> Stiffer com petition in China's water
> Receiv ables risk from industrial and sector to weigh on IRRs and expansion
CITIC
m unicipal custom ers
plans.
Env irotech
> Reduction in VAT rebate from 1 00%
to 7 0% effectiv e Jul-1 5
> traffic growth from 3 newly

acquired toll roads.
> continued growing autom obile

population
> Estim ated net gearing of c.46% as at

end FY1 5 offers lev erage potential to
boost ROE.
> Strong SOE backing from CITIC and
strategic inv estor (KKR)
> Upcom ing 1 3 th 5-y ear plan in

China to prov ide further stim ulus
> Greater gov ernm ent push for publicpriv ate partnerships (PPPs)
Figure 111: Small Cap stock-specific near-term and longer-term consideration factors
> potential industry -wise ov ersupply

Riv erstone due to aggressiv e capacity expansion
of all m ajor play ers in Malay sia.
Holdings
> Fav ourable FX translation from

weakened RM against US$;
> Low raw m aterial price.
> Dem and for healthcare glov es

continues to grow
> Continued delay in com pletion of its

logistics park in the Jilin food zone
> Asset recy cling through the REIT

will prov ide it with funds to speed up
its inv estm ents in new data centres
> Opening of new logistics facilities in
FY1 6 to driv e better earnings growth
> Growing dem and for data storage in

Singapore, ASEAN and selected
European m arkets
> High reliance on one doctor

> Rising m edical com petence of
regional doctors
> 3 0% associate loss m aking

> Strong S$ affecting foreign patients
> Div idend y ields of 3 .9% - 4.6%.

> Net cash balance sheet allows M&A
driv en growth
> Penetration into the China m arket

v ia its 3 0% owned HK associate
> WHO estim ates that AP region sees
m ore than 6m new cancer cases a
y ear
Del Monte
Pacific
> Rising health awareness of

consum ing unprocessed
fruits/v egetables ov er canned
products
> High gearing y et to be addressed
> Long drawn California drought to

reduce peach supply and rise pricing
> El Nino could reduce pineapple
supply , affecting profitability
> Low inv estor expectations

> Earnings turnaround in FY1 6
> Large m arket opportunity in the US

> Potential to penetrate the bev erage
m arket in the US
Sarine
Tech
> Indian m anufacturing custom ers

ham pered by credit av ailability
> High penetration rate in its
traditional business lim its growth
opportunity
> Weak dem and for diam onds

> High raw diam ond prices m ake it
difficult for diam ond m anufacturers to
m ake m oney
> Bad news priced in

> Could see som e contribution from
new products targeting diam ond
retailers
> Only prov en supplier in the

industry with a com plete and
integrated suite of products
> Potential to dev elop a new rev enue
stream in diam ond retailers
> Div idend y ields of 4.1 % - 5.5%.

> Net cash balance sheet
> Secular trend of rising sensor usage

will indirectly benefit Innov alues
> Innov alue's custom er ahs y et to tap
the potential in industrial sensors
> Value of its M1 stake could com e

under threat if a fourth telco operator
Keppel T&T enters the m arket
Talkmed
Group Ltd
> Reliance on CEO (key driv er behind > Exposure to Volkswagen (~1 0% of
sales)
Innov alues coy 's price com petitiv eness)

> Rising wages
Ltd
In the small-cap/others space, we highlight five names with better near-term

visibility and which benefit from secular long-term trends. We also highlight
three dark horses that could make a comeback if the current issues depressing
their share prices are resolved over the next three years.
49
Stocks we like now, on a balance of long-term views and

current developments
China Everbright Water is poised to ride Chinas water boom as the
governments push for more public-private partnerships (PPPs) and
th
upcoming 13 Five-Year Plan will provide further stimulus to the sector.
Tighter water discharge standards will drive upgrading works as c.27% of its
existing designed capacity has not met the highest Grade 1A standard,
allowing the company to negotiate for higher water tariffs. Its estimated net
gearing of 41% (by end-FY15) and SOE backing offer access to cheaper
funding and leverage potential to drive higher ROEs. CEWL is currently
trading at 12.2x CY17 EV/EBITDA, cheaper than Beijing Enterprises
Waters 14.0x and CITIC Envirotechs 13.3x. Catalysts include faster-thanexpected expansion plans and tariff hike; key risks are stiffer competition
leading to lower IRR and receivables risk.
GL Limited would benefit from the favourable market dynamics of the UK
hospitality sector. We expect the high-single-digit RevPAR growth of its
London hotels to beat the market in FY16-17, driven by the groups ongoing refurbishment and rebranding programme. The decentralised
decision-making at each hotel level should also work to improve its cost
efficiency and hence hotel profit. GL is currently trading at a hefty 48%
discount to CY16 RNAV. Potential re-rating catalysts include organic hotel
earnings growth, and possible monetisation of its non-core assets. Key risks
include possible weak travel sentiment due to Islamic State of Iraq and
Syria (ISIS) terrorism and a weak euro (which makes London a relatively
more expensive tourist destination).
Innovalues (through its customers, Sensata and Hilite) will benefit from the
secular trend of more sensors being required in automobiles for various
functions (driven by regulatory authorities safety and environmental
concerns). The industrial sensors market, which is 37% of the entire sensor
market (versus 21% for automotive sensors), is also an untapped
opportunity for the company. In the short term, concerns over the possibility
of a bankruptcy of Volkswagen (~ 10% of Innovalues sales) are an
overhang on the share price.
Tianjin Zhongxin is geared to the favourable macro trend of an ageing
China population. Its flagship and exclusive product, Su Xiao Jiu Xin pill (2530% group profit), is a household name in China for treatment of cardiovascular ailment. The companys S-share is trading at a sizeable 65%
discount to its A-shares and its 15.6x CY16 P/E is also cheaper than peers
average of c.20x. Catalysts include sales and margin expansion of Su Xiao.
Potentially stiffer competition under Chinas revised pharmaceutical
procurement framework is a key risk.
Venture Corporation is well positioned for the long term. The company has
always been focused on growing the bottomline instead of chasing revenue
growth. A net cash balance sheet has been the established trend and the
company manages its working capital diligently. At the same time, Venture
is careful in adding capacity and has stringent M&A criteria. Succession
may not be that much of an issue as key management has been tasked with
grooming their own successors. As such, the company has enough
professional management bandwidth. In the longer term, there is a rising
trend of tech companies, such as Amazon and Alphabet, creating new
products. This could create business opportunities for niche EMS
companies such as Venture. A more integrated ASEAN market may allow it
to benefit from regional (ASEAN) manufacturing facilities.
50
Fallen angels (possibility of strong re-rating over 3 years)

Del Montes short-term challenges are: 1) demonstrating (in FY16) to
investors that the US acquisition was not an albatross and the group is able
to return to the black after factoring in the hefty interest cost of funding the
acquisition, 2) growing trend towards fresh vegetables and fruits over their
canned peers, and 3) possible peach and pineapple shortages. Addressing
its high gearing, development of the Asian/Hispanic market segment in the
US and possible entry to the fruit beverage market in the US could be
longer-term positives.
Sarine Techs woes are widely understood by the market. Structurally,
market leader De Beers has been adamant about not lowering the pricing of
raw diamonds significantly. There is only that much pain both raw diamond
suppliers and Sarines Indian diamond manufacturing customers can bear.
The pricing imbalance may be resolved in 1H16. What is more exciting for
Sarine is the development of its third earnings stream, i.e. tools targeted at
diamond retail chains (online and brick-and-mortar). Given the large amount
of diamonds that can be processed by Sarines tools for the retail market
and the high margin of this new earnings engine, the earnings impact may
be significant. At this juncture though, both Sarine and its diamond retail
chain customers are still in the discovery process (customers are
experimenting with how Sarines tools can best aid them while Sarine is still
trying out various revenue-charging or -sharing schemes). We believe, if
successful, this could lead to Sarines multiple expansion once again,
although this could still be a few years away.
Silverlake Axiss longer-term opportunities are from 1) further
consolidation of the banking sector in Malaysia and Indonesia, and 2)
regional expansion ambitions of Malaysian and Indonesian banks. There is
also the possibility that Silverlake Axis may attract M&A attention. China
presents a huge opportunity, though not without challenges. In the short
term, investors are awaiting the Deloitte findings and recommendations to
help them get a better grasp of valuing Silverlake Axis.
51
2016 sector preferences and country top picks

Figure 112: CIMBs sector calls and stock picks
TOP PICKS
LEAST PREFERRED
UOB, SGX
Financials
OW
DBS, OCBC
Property
OW
Wing Tai
REITs
OW
ART, KREIT, CREIT, SUN
Telcos
ST
M1, Starhub
Transport
SIA, SPOST
SMRT, NOL, Tiger
Capital Goods
UW
SCI, EZI
EZRA, Vard, SMM
Commodities
FIRST
Wilmar, IFAR, GGR
Gaming/Health
UW
GENS, Raffles Med
Comsumer
UW
DFI, THBEV, Courts
Super, Petra Foods
Silverlake
Ahead in 1H16, a US rate hike cycle could depress sentiment. If the S&P500,
now back at record highs, stumbles, investment sentiment will look fragile. In
Asia, China and ASEAN are still reeling from a slowdown. The consumer in
developing ASEAN is pulling back. The commodity sector is seeing defaults
and a reneging of contracts. Banks NPLs are bound to be the next to be hit.
Investing at this point certainly exposes one to a long list of potential pitfalls.
That said, stocks are cheap and we reiterate that one needs a longer-term view
for specific catalysts to pan out. In our opinion, the biggest catalyst for
Singapore is the likelihood for it to prosper as an ASEAN hub as AEC, OBOR
investments and TPP developments materialise.
Sector preferences
Overweight banks, property and REITs. Our Overweight sectors remain
banks, property and REITs. Valuations are compelling, largely accounting
for known near-term negatives ahead, i.e. rising loan allowances for banks
and falling prices and decreasing rents for most property segments as they
digest the glut of completed supply entering the market. These sectors are
cheap, however, with the only question being what is the catalyst that can
drive a mean reversion. We believe that the catalyst is the prosperity of
ASEAN as the region becomes more integrated, driven by governments that
are more receptive to opening up and fuelled by FDIs from OBOR and TPP.
Singapore banks have multiple angles from which they can benefit. In a 1to 2-year timeframe. As ASEAN currencies stabilise, we expect to see more
local ASEAN consumer/services companies cross borders to attempt to
enter new markets because of AEC. Target markets will naturally be the
bigger markets of Indonesia or Indochina. Since the banking sector in
Indochina is relatively undeveloped, a lot of funding needs will likely be
financed by home market banks. A build-out of new manufacturing facilities
as MNCs realign the center of gravity of their logistics chains from China to
ASEAN also has to be funded by banks. Lastly, bigger infrastructure
building projects could be funded by a combination of Chinese SOEs (under
OBOR), Singapore or Malaysian sovereign wealth funds, bank lending and
debt papers all equate to more business for banks. These infrastructure
projects can also be subsequently converted into REITs or business trusts.
In the longer term, the combination of manufacturing jobs, urbanisation and
infrastructure investments has commonly led to a period of high GDP
growth and the birth of a middle-class consumer; we see these trends
blossoming in ASEAN and Singapore banks will benefit from this.
Singapore developers face a glut of completed supply in residential and
office space as well as hotels in Singapore and investors have asked what
can revive demand when the Singapore government seems to be content to
stick to its macro prudential property measures and restrictive immigration
policies. We think the answer lies in the creation of jobs linked to the
regionalisation of ASEAN. In the past decade, Singapore developers have
leaned outwards to China, then to Australia in recent years, as opportunities
52
in the home markets dried up. Ahead, we believe development projects in

ASEAN will become more attractive, especially if restrictive rules against
foreign developers are eased.
Underweight capital goods, gaming and consumer. Our Underweight
sectors are capital goods, gaming and consumer. Capital goods is a
concern because yards are running out of jobs while previously-secured
jobs are turning out to be hardly cast in stone. Meanwhile, the offshore
support sector faces a balance sheet problem. Valuations are cheap but the
propensity for negative surprises will give rise to more downside risks from
time to time. The likely development of the GLCs into more infrastructuredependent companies (vs. yard-dependent) will take time and capex; the
benefits of AEC and OBOR hardly look like they will be a catalyst soon.
On gaming, we find GENSs problems to be as much stock-specific as they
are due to the broad disappearance of the Chinese gambler globally. With
the Chinese export, property and commodities sectors in the doldrums, we
find it difficult to imagine that China will mint new billionaires at a pace
similar to the past. It is also difficult to imagine China discarding its anticorruption stance. On the consumer names, AEC technically opens up new
market opportunities for them but such benefits are outweighed by
increased competition (from neighbouring markets) and the adverse
conditions faced by the ASEAN consumer currently.
Figure 114: Developers valuations (x)
Figure 113: Banks valuations (x)

2.3x
P/BV (x)
Current ROE (RHS)
2.1x
1.9x
13.5%
13.0%
12.5%
1.7x
Figure 115: REITs valuations (x)
3.0x
P/BV (x)
Current ROE (RHS)
2.5x
1.5x
11.0%
1.1x
0.9x
0.7x
10.0%
0.0x
04 05 06 07 08 09 10 11 12 13 14 15 16
04
05
06
07
08
09
10
12-mth Fwd Rolling

FD Core P/E (x)
3.5
5.0
3.0
11
12
13
14
15
3.0
2%
2.5
0%
2.0
2003
16
14x
-1 SD
12x
6x
11x
4x
10x
05
06
07
08
09
10
11
12
13
14
15
12-mth Fwd Rolling FD

Core P/E (x)
21x
+1 SD
19x
17x
Mean
15x
Mean
13x
13x
8x
04
Spread over 10y GB (LHS) 1.0

LT ave. spread (LHS)
0.5
10-yr bond yield (RHS)
0.0
2009
2011
2013
2015
23x
14x
10x
2007
1.5
25x
+1 SD
15x
Mean
12x
2005
Sep-06
Oct-06
Nov-06
Dec-06
Jan-07
Feb-07
Mar-07
Figure 118: Plantations valuations (x)
16x
16x
2.0
LT ave:
Jul-06
4.1%
Aug-06
4%
12-mth Fwd Rolling FD

Core P/E (x)
17x
+1 SD
2.5
4.0
3.5
18x
18x
4.5
6%
Figure 117: Telcos valuations

19x
20x
4.5
$A$24:$G$41
20x
22x
5.5
10%
1.0x
0.5x
24x
4.0
16%
8%
10.5%
Figure 116: Capital goods valuations (x)
6.0
12%
11.5%
1.3x
%
6.5
18%
14%
2.0x
12.0%
1.5x
20%
-1 SD
11x
-1 SD
9x
7x
04
05
$A$1:$G$18
06 07 08 09
5x
10
11
12
13
14
15
53
04
05
06
$A$1:$G$18
07 08 09
10
11
12
13
14
15
Top picks
On the balance of 1) valuations, 2) likelihood of managing near-term
headwinds or negative surprises, and 3) the prospect of longer-term positive
catalysts if AEC, OBOR and TPP pan out, our large-cap picks are:
Capitaland. We view the property sector as a key beneficiary, if developing
ASEAN prospers and Singapore cements its status as a hub in the region.
Capitalands pan-Asian exposure will enable the group to ride the growth of
ASEAN and China. Its established REIT platforms will also allow it to
recycle mature assets into capital to fund the pursuit of new opportunities.
With 75% of its earnings derived from recurring sources, the group has a
steadily-growing income base to sustain its long-term ROE targets. Longerterm development in ASEAN notwithstanding, Capitaland also has nearterm catalysts, such as strong residential sales in Vietnam and a pick-up in
sales in China, to support the stock. Its valuation is decent at a 24%
discount to RNAV.
City Developments. Despite a dwindling landbank, City Developments is
still one of the best proxies for Singapore property and its most attractive
feature now is valuations. Rental income is underpinned by high portfolio
occupancy of 97.3% in Singapore and the upcoming completion of South
Beach. An estimated 96% of its office space has been leased, of which 70%
have commenced operations. Valuations are extremely attractive at 0.81x
P/BV and a 45% discount to RNAV. We view current valuations as reflective
of its lack of domestic opportunities plus heightened selling by key
shareholders. If ASEAN opportunities beckon, the previous monetisation of
its Sentosa assets had also freed up capital, which it can deploy.
DBS. DBS does not have a full ASEAN franchise compared to peers in
Singapore and Malaysia. It is not necessarily the best banking franchise to
profit from more intra-ASEAN activity as AEC blossoms. DBS does,
however, have: 1) Temasek as a shareholder, allowing it to benefit as a key
banking partner on regional infrastructure investments, be it in funding
Singapore GLCs or China SOEs (OBOR) heading into developing ASEAN,
2) a strong debt capital market franchise to support large corporates project
financing needs, and 3) strong treasury capabilities to appeal to US MNCs
seeking a banking partner in this region as more MNCs head into ASEAN
due to TPP and the need to find low-cost manufacturing centres. Valuations
of 1.0x CY16 P/BV and 9.9x CY16 P/E are attractive against a 2-year ROE
of 10.5% (FY16-17), where we pencil in heightened credit costs. Buying
opportunities are present after its recent share price weakness, driven by
concerns about its credit cycle.
IHH. IHH does not play to the AEC, OBOR or TPP trends but it benefits
from another structural long-term trend, i.e. that of an ageing population in
Singapore and Hong Kong. We view its entry to the Hong Kong market as
exciting; we see eventual contributions from Hong Kong potentially
matching Singapores. The threats to IHH are Singapores healthcare costs
(high) and the fact that hospitals are setting up regionally to satisfy local
demand and to cater to medical tourism. We believe that some
differentiation across geographies still exists and Singapore medical tourism
drivers can be intact. In the near term, more favourable currency
movements may help, including a stabilisation of the Turkish lira, which will
allow operational positives in local currency terms to show through.
SingPost. We view SingPost as a beneficiary of the irreversible trend of
consumer purchasing patterns migrating from brick-and-mortar outlets to ecommerce. SingPost is less about uncertain M&A-driven growth now and
more about driving synergies from its recent acquisitions of two US outfits.
The key to profitability is generating volumes by linking US retailers and
consumers, with ASEAN retailers and consumers. In this regard, the
lowering of customs restrictions in Indonesia (under AEC) will help.
Indonesia joining the TPP will also be helpful. Its valuation of 25.9x CY16
P/E is further supported by a CY16 dividend yield of 3.9%.
54
Thai Beverage. The opening up of ASEAN markets will allow the

establishment of true regional champions and regional brands. Thai
Beverage is slightly ahead of the trends, having put together acquisitions in
the past to build a regional distribution platform and a portfolio of brands.
The task now is to develop truly regional brands and we see it doing so for
Chang as part of its Vision 2020 strategy. Competition in consumer
products is notoriously stiff when markets open up. The companys edge is
the presence of a spirits monopoly, which acts as a cash cow to fund these
initiatives. Its valuation of 17.4x CY16 P/E is decent for a budding regional
consumer play.
Our best small-cap ideas are 1) China Everbright Water; 2) GL Limited; 3)
Ho Bee; 4) Innovalues; 5) Mapletree Greater China Commercial Trust; 6)
Tianjin Zhongxin; and 7) Venture Corp. Details are in the section above.
Figure 119: CIMBs top picks for 2016
Company
Price
Target
(local
Price
curr) (local curr)
Market
3-year
Recurring Dividend
Cap Core P/E (x)
EPS P/BV (x)
ROE (%) Yield (%)
(US$ m) CY2015 CY2016 CAGR (%) CY2015
CY2015
CY2015
Bbg Ticker
Recom.
Model portfolio names

CapitaLand
City Developments
DBS Group
IHH Healthcare
Singapore Post Ltd
Thai Beverage
Average
CAPL SP
CIT SP
DBS SP
IHH SP
SPOST SP
THBEV SP
Add
Add
Add
Add
Add
Add
3.26
7.15
16.61
2.11
1.79
0.70
4.06
10.47
19.58
2.52
2.04
0.83
9,802
4,602
29,419
12,281
2,728
12,352
19.3
11.4
9.3
52.3
24.6
15.7
13.8
18.8
10.4
9.9
40.9
24.9
17.7
14.0
70.5%
15.8%
1.2%
15.5%
2.3%
1.1%
7.6%
0.80
0.77
1.03
2.60
2.62
3.92
1.27
4.3%
7.1%
11.6%
5.6%
11.2%
27.4%
9.8%
4.0%
2.6%
4.2%
0.3%
3.8%
3.7%
3.3%
Small-cap picks
China Everbright Water
GL Limited
Ho Bee Land
Innovalues Ltd
Mapletree Greater China Commercial Trust
Tianjin Zhongxin Pharmaceutical Group
Venture Corporation
Average
CEWL SP
GLL SP
HOBEE SP
IP SP
MAGIC SP
TIAN SP
VMS SP
Add
Add
Add
Add
Add
Add
Add
0.67
0.85
2.00
0.75
0.93
1.12
8.44
0.94
1.26
2.68
0.93
1.20
1.40
10.11
1,228
818
941
173
1,800
2,078
1,653
23.8
15.6
20.2
10.6
18.1
16.8
15.3
17.5
16.4
14.4
16.9
9.5
17.2
14.7
13.8
15.3
22.7%
7.9%
38.9%
18.6%
3.4%
4.5%
8.6%
15.0%
1.29
0.67
0.51
2.80
0.71
1.42
1.24
0.87
5.7%
4.2%
2.6%
29.7%
4.2%
9.8%
8.4%
5.2%
0.0%
2.6%
3.1%
4.3%
7.7%
2.1%
5.9%
4.2%
55
Figure 120: Various infrastructure project, earmarked by Chinas One Belt, One Road policy
SOURCE: CIMB RESEARCH, SOUTH CHINA MORNING POST
56
Company Briefs
57
REITSingaporeEquity researchDecember 9, 2015
Company Note
Singapore
Ascendas REIT
ADD (no change)
Growth from organic and inorganic drivers
Current price:
Target price:
Previous target:
Up/downside:
S$2.38
S$2.57
S$2.57
7.9%
Reuters:
Bloomberg:
Market cap:
AEMN.SI
AREIT SP
US$4,059m
S$5,735m
US$16.26m
S$22.90m
2,406m
83.0%
Average daily turnover:

Current shares o/s
Free float:
Key changes in this note
No changes
Positive rental reversion from under-rented properties, uplift to persist through

2HFY16-FY17.
AEIs in China and Singapore could provide another avenue of growth.

Exposure to higher-value industrial sub-segments.
Full impact of Australian contributions from FY17.
Strong growth drivers underline our Add rating, with unchanged TP of S$2.57.
Positive rental reversions across all property segments

Property occupancy inched up to 89% in 2QFY16 and rental reversions registered
+9.1% over preceding levels. The strongest rental reversions were recorded for
business parks space (+13.2%), while other segments saw 2-5.5% uplift. AREIT guided
that it expects a mid-single digit uplift for rental reversions in FY16 as the average
passing rents across all segments of properties are below spot rates. It has a remaining
10.2% and 21.2% of rental income to be renewed between 2HFY16 and FY17.
AEIs to provide another growth avenue
Price Close
Relative to FSSTI (RHS)

119.4
2.50
112.3
2.30
105.1
2.10
40
30
20
10
98.0
Vol m
2.70
Dec-14
Mar-15
Jun-15
Sep-15
Source: Bloomberg
Price performance
Absolute (%)
Relative (%)
1M
3.5
8.0
3M
10.2
10.5
12M
3.9
16.7
AREIT is undertaking AEIs totaling S$94.9m at the Jiashan Logistics Facility in China
and four properties in Singapore. These projects are scheduled to be completed in
phases between 4Q15 to 2Q16. With a gearing ratio of 37.8% (post Australian
transaction), AREIT will have ample room, in our view, to explore more inorganic growth
opportunities.
Exposure to higher-value industrial sub-segments

Business and science parks as well as hi-spec industrials make up around 60% of the
trusts AUM. In addition, only 13.4% of AREITs tenants are from the traditional
manufacturing sector; while the remaining tenants include industry players from IT,
pharmaceutical, media, telecoms, data storage providers and logistics. Among the
industrial sub-segments, we are most positive on business parks given the easing
supply (no upcoming supply post-2016) and upticks in occupancy.
Full impact of Australian contributions from FY17

We expect the acquisition of the S$1bn Australian logistics real estate portfolio to be
completed in 4QCY15. The full impact of additional contributions is anticipated to be felt
from FY17 onwards. This portfolio is expected to generate an initial 6.4% post-tax NPI
yield with growth through inbuilt rental escalation clauses. The purchase has propelled
AREIT to be the eight-largest logistics property owner in Australia and provides a strong
platform to expand through partnerships with real estate partners in the country.
Strong growth drivers underline our Add rating

We expect continued positive rental reversions, AEIs and Australian contributions to
drive FY16 and FY17 DPU growth of 11% and 5%, respectively. We maintain our Add
rating with an unchanged DDM-based target price.
[X]
Financial Summary
Analyst
LOCK Mun Yee
T (65) 6210 8606
E munyee.lock@cimb.com
Gross Property Revenue (S$m)

Net Property Income (S$m)
Net Profit (S$m)
Distributable Profit (S$m)
Core EPS (S$)
Core EPS Growth
FD Core P/E (x)
DPS (S$)
Dividend Yield
Asset Leverage
BVPS (S$)
P/BV (x)
Recurring ROE
% Change In DPS Estimates
CIMB/consensus DPS (x)
Mar-14A
613.6
436.0
462.2
342.0
0.15
21.5%
16.16
0.14
5.98%
29.6%
2.02
1.18
7.44%
Mar-15A
673.5
462.7
445.3
351.1
0.13
(12.2%)
18.40
0.15
6.13%
28.9%
2.08
1.14
6.30%
Mar-16F
736.7
523.0
380.7
389.7
0.16
22.1%
15.07
0.16
6.78%
32.8%
2.27
1.05
7.26%
0%
1.04
Mar-17F
786.1
569.9
405.9
409.0
0.17
6.3%
14.18
0.17
7.10%
32.8%
2.26
1.05
7.41%
0%
1.04
Mar-18F
800.7
580.5
416.5
425.8
0.17
2.3%
13.86
0.18
7.37%
32.8%
2.25
1.06
7.61%
0%
1.06
SOURCE: COMPANY DATA, CIMB FORECASTS

IF THIS REPORT IS DISTRIBUTED IN THE UNITED STATES IT IS DISTRIBUTED BY CIMB SECURITIES (USA), INC. AND IS CONSIDERED THIRD-PARTY AFFILIATED RESEARCH.
Powered by
EFA
BY THE NUMBERS
Share price info

Share px perf. (%)
1M
3M
Relative
8.0
10.5
Absolute
3.5
10.2
12M
16.7
3.9
Major shareholders
% held
Ascendas Funds Mgt
17.0
CBRE
5.0
ING
4.5
P/BV vs Asset Leverage
Dividend Yield vs Net DPS - (S$)
1.600
1.400
1.200
1.000
0.800
0.600
0.400
0.200
0.000
Jan-12 Jan-13 Jan-14 Jan-15 Jan-16 Jan-17
Rolling P/BV (x) (lhs)
40.0%
35.0%
30.0%
25.0%
20.0%
15.0%
10.0%
5.0%
0.0%
0.2000
0.1800
0.1600
0.1400
0.1200
0.1000
0.0800
0.0600
0.0400
0.0200
0.0000
Asset Leverage (rhs)
DPS (lhs)
8.00%
7.20%
6.40%
5.60%
4.80%
4.00%
3.20%
2.40%
1.60%
0.80%
0.00%
Dividend Yield (rhs)
Profit & Loss

(S$m)
Rental Revenues
Other Revenues
Gross Property Revenue
Total Property Expenses
Net Property Income
General And Admin. Expenses
Management Fees
Trustee's Fees
Other Operating Expenses
EBITDA
Depreciation And Amortisation
EBIT
Net Interest Income
Associates' Profit
Other Income/(Expenses)
Exceptional Items
Pre-tax Profit
Taxation
Minority Interests
Preferred Dividends
Net Profit
Distributable Profit
Mar-14A
613.6
0.0
613.6
(177.6)
436.0
0.0
(35.6)
(5.2)
0.0
395.2
0.0
395.2
(36.0)
0.0
12.1
114.2
485.5
(23.2)
0.0
0.0
462.2
342.0
Mar-15A
673.5
0.0
673.5
(210.8)
462.7
0.0
(38.1)
(5.6)
0.0
419.0
0.0
419.0
(105.4)
0.0
2.0
136.4
452.0
(6.7)
0.0
0.0
445.3
351.1
Mar-16F
736.7
0.0
736.7
(213.6)
523.0
0.0
(53.9)
(6.8)
0.0
462.3
0.0
462.3
(78.5)
0.0
9.3
0.0
393.1
(1.8)
0.0
(10.6)
380.7
389.7
Mar-17F
786.1
0.0
786.1
(216.2)
569.9
0.0
(46.6)
(6.8)
0.0
516.5
0.0
516.5
(87.5)
0.0
0.0
0.0
429.0
(1.8)
0.0
(21.3)
405.9
409.0
Mar-18F
800.7
0.0
800.7
(220.2)
580.5
0.0
(46.6)
(6.8)
0.0
527.1
0.0
527.1
(87.5)
0.0
0.0
0.0
439.6
(1.8)
0.0
(21.3)
416.5
425.8
Mar-14A
485
24
5
(1)
(147)
367
(154)
22
(11)
(142)
170
(0)
(326)
(63)
(218)
6
230
333
Mar-15A
452
103
(10)
(2)
(180)
362
(102)
(289)
(252)
(643)
577
0
(261)
(63)
254
(27)
(272)
238
Mar-16F
393
69
0
(2)
(11)
450
0
(1,159)
0
(1,159)
698
0
(390)
395
703
(6)
(701)
(89)
Mar-17F
429
87
0
(2)
(20)
495
0
22
0
22
0
0
(409)
(87)
(496)
20
525
429
Mar-18F
440
87
0
(2)
(14)
512
0
0
0
0
0
0
(426)
(87)
(513)
(2)
520
424
Cash Flow
(S$m)
Pre-tax Profit
Depreciation And Non-cash Adj.
Change In Working Capital
Tax Paid
Others
Cashflow From Operations
Capex
Net Investments And Sale Of FA
Other Investing Cashflow
Cash Flow From Investing
Debt Raised/(repaid)
Equity Raised/(Repaid)
Dividends Paid
Cash Interest And Others
Cash Flow From Financing
Total Cash Generated
Free Cashflow To Firm
Free Cashflow To Equity
59
BY THE NUMBERS
Balance Sheet
(S$m)
Total Investments
Intangible Assets
Other Long-term Assets
Total Non-current Assets
Total Cash And Equivalents
Inventories
Trade Debtors
Other Current Assets
Total Current Assets
Trade Creditors
Short-term Debt
Other Current Liabilities
Total Current Liabilities
Long-term Borrowings
Other Long-term Liabilities
Total Non-current Liabilities
Shareholders' Equity
Minority Interests
Preferred Shareholders Funds
Total Equity
Mar-14A
6,923
0
301
7,224
66
0
66
2
134
127
946
33
1,107
1,231
171
1,402
4,849
0
Mar-16F
9,039
0
157
9,196
36
0
90
1
127
189
286
33
507
2,774
564
3,338
5,477
0
Mar-17F
9,039
0
135
9,174
56
0
90
1
147
189
286
33
507
2,774
564
3,338
5,475
0
Mar-18F
9,039
0
135
9,174
54
0
90
1
145
189
286
33
507
2,774
564
3,338
5,474
0
5,014
5,477
5,475
5,474
Mar-14A
6.56%
6.6%
71.1%
3.6%
5.95
4.79%
74%
0.12
0.12
0.06
6.46%
Mar-15A
9.76%
6.1%
68.7%
2.5%
3.69
1.49%
79%
0.26
0.26
0.08
5.74%
Mar-16F
9.38%
13.0%
71.0%
10.6%
5.33
0.45%
102%
0.25
0.25
0.07
4.35%
Mar-17F
6.71%
9.0%
72.5%
4.6%
5.39
0.41%
101%
0.29
0.29
0.11
4.35%
Mar-18F
1.86%
1.9%
72.5%
3.8%
5.50
0.40%
102%
0.29
0.29
0.11
4.47%
Mar-14A
2.3
N/A
N/A
N/A
95.0%
6,933.5
N/A
Mar-15A
2.8
N/A
N/A
N/A
91.1%
7,892.7
N/A
Mar-16F
2.5
N/A
N/A
N/A
92.3%
9,060.8
N/A
Mar-17F
2.5
N/A
N/A
N/A
93.0%
9,039.0
N/A
Mar-18F
2.6
N/A
N/A
N/A
93.0%
9,039.0
N/A
4,849
Mar-15A
7,868
0
160
8,028
42
0
90
1
133
189
286
33
507
2,076
564
2,640
5,014
0
Key Ratios
Gross Property Revenue Growth
NPI Growth
Net Property Income Margin
DPS Growth
Gross Interest Cover
Effective Tax Rate
Net Dividend Payout Ratio
Current Ratio
Quick Ratio
Cash Ratio
Return On Average Assets
Key Drivers
Rental Rate Psf Pm (S$)
Acq. (less development) (US$m)
RevPAR (S$)
Net Lettable Area (NLA) ('000 Sf)
Occupancy (%)
Assets Under Management (m) (S$)
Funds Under Management (m) (S$)
60
Company Note
Singapore
Ascott Residence Trust
HOLD (no change)
Stable but lacks growth drivers
Current price:
Target price:
Previous target:
Up/downside:
S$1.18
S$1.30
S$1.30
10.5%
Reuters:
Bloomberg:
Market cap:
ASRT.SI
ART SP
US$1,288m
S$1,820m
US$0.74m
S$1.04m
1,525m
61.2%

Current shares o/s
Free float:
110.0
1.250
105.0
1.200
100.0
1.150
95.0
1.100
8
6
4
2
90.0
Vol m
115.0
1.300
Jun-15
Absolute (%)
Relative (%)
More perpetual securities could be issued.

Maintain Hold as stability is priced in.
3Q15 boosted by acquisitions

In 3Q15, ARTs revenue rose 21% yoy and
acquisitions in 2014 and 2015. RevPAU
performances from the properties in China,
strengthening of the renminbi, US dollar and
dollar.
gross profit widened 13% yoy thanks to

increased 10% yoy due to stronger
Indonesia and Vietnam, as well as the
Vietnamese dong against the Singapore
1M
-2.9
1.6
3M
-1.7
-1.4
Acquisitions boost topline, but marginal impact on DPU

Organic growth is likely to be limited to Japan and Australia assets, while ARTs topline
will continue to benefit from the full-year contributions of properties acquired in FY14 and
additional contributions from the acquisitions of eight properties that were completed in
3Q15. That said, contribution to DPU may be marginal due to the higher financing costs
involved in the funding of these acquisitions.
More perpetual securities could be issued
Sep-15
Source: Bloomberg
Price performance
Acquisitions boost topline, but marginal impact on DPU.
1.350
Mar-15
Key markets including China, Japan, Singapore and Vietnam improved in 3Q15
Key markets including China (+2% yoy increase in RevPAU), Japan (+18% yoy),
Singapore (+3% yoy) and Vietnam (+7% yoy) more than offset weakness in the UK (-2%
yoy) and France (-2% yoy). In China, the ADR of refurbished apartment units at
Somerset Xu Hui Shanghai was lifted by c.35% in the latest completed phase of AEI in
2Q15. The remaining phases of AEI are on track for completion in 3Q16.
Dec-14
3Q15 boosted by acquisitions.
Key markets showed improvement in 3Q15
No change.
Price Close
12M
-6.4
6.4
We estimate that ART has debt head room of S$90m, assuming a target gearing limit of
40% vs. current gearing of 38.7%. As management continues to source for acquisitions,
we believe that more perpetual securities (which ART utilised last year) could be issued.
In terms of locations of potential assets, management could be looking at Europe,
Australia and Singapore.
Maintain Hold as stability is priced in

Though we acknowledge that c.45% of ARTs rental income is derived from master
leases and management contracts, with minimum guaranteed rents, the stability is
somewhat priced in. ART trades at CY15 dividend yield of 7%, the lowest yielding REIT
in the hospitality sector (>8%). Maintain Hold with unchanged DDM-based target price.
[X]
Financial Summary
Analyst
LOCK Mun Yee
T (65) 6210 8606

Net Profit (S$m)
Core EPS (S$)
Core EPS Growth
FD Core P/E (x)
DPS (S$)
Dividend Yield
Asset Leverage
BVPS (S$)
P/BV (x)
Recurring ROE
Dec-13A
316.6
161.2
208.7
114.8
0.058
(15.1%)
20.27
0.084
7.15%
33.7%
1.37
0.85
4.24%
Dec-14A
357.2
180.2
122.5
125.6
0.057
(2.1%)
20.70
0.079
6.74%
38.0%
1.47
0.80
3.99%
Dec-15F
423.0
211.4
100.6
128.5
0.065
15.0%
18.00
0.083
7.10%
40.4%
1.61
0.73
4.24%
0%
0.98
Dec-16F
475.0
235.8
107.5
131.6
0.069
6.0%
16.98
0.085
7.21%
42.2%
1.58
0.74
4.34%
0%
0.96
Dec-17F
493.1
244.4
102.2
130.8
0.064
(8.0%)
18.46
0.081
6.93%
45.1%
1.54
0.76
4.07%
0%
0.90

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Share price info

Share px perf. (%)
1M
3M
Relative
1.6
-1.4
Absolute
-2.9
-1.7
Major shareholders
12M
6.4
-6.4
% held
CapitaLand
38.7
AIA Group
4.2
1.200
45.0%
1.000
37.5%
0.800
30.0%
0.600
22.5%
0.400
15.0%
0.200
7.5%
0.000
0.0%
0.1000
0.0900
0.0800
0.0700
0.0600
0.0500
0.0400
0.0300
0.0200
0.0100
0.0000
DPS (lhs)
8.00%
7.20%
6.40%
5.60%
4.80%
4.00%
3.20%
2.40%
1.60%
0.80%
0.00%
Profit & Loss

(S$m)
Rental Revenues
Other Revenues
Net Property Income
Management Fees
Trustee's Fees
EBITDA
EBIT
Net Interest Income
Associates' Profit
Exceptional Items
Pre-tax Profit
Taxation
Minority Interests
Preferred Dividends
Net Profit
Dec-13A
316.6
0.0
316.6
(155.5)
161.2
(4.8)
(14.7)
(0.3)
(0.6)
140.6
0.0
140.6
(42.6)
(0.0)
0.0
153.5
251.6
(36.2)
(6.7)
0.0
208.7
114.8
Dec-14A
357.2
0.0
357.2
(177.0)
180.2
(5.0)
(17.2)
(0.4)
5.2
162.7
0.0
162.7
(41.2)
0.0
0.0
45.8
167.3
(36.9)
(7.9)
0.0
122.5
125.6
Dec-15F
423.0
0.0
423.0
(211.6)
211.4
(6.6)
(20.1)
(0.4)
(0.8)
183.5
0.0
183.5
(56.8)
0.0
0.0
0.0
126.7
(18.2)
(7.9)
0.0
100.6
128.5
Dec-16F
475.0
0.0
475.0
(239.3)
235.8
(6.9)
(20.8)
(0.5)
(1.0)
206.7
0.0
206.7
(65.6)
0.0
0.0
0.0
141.0
(25.7)
(7.9)
0.0
107.5
131.6
Dec-17F
493.1
0.0
493.1
(248.7)
244.4
(7.5)
(22.8)
(0.5)
(1.0)
212.6
0.0
212.6
(76.6)
0.0
0.0
0.0
136.0
(24.5)
(7.9)
(1.4)
102.2
130.8
Dec-13A
251.6
42.6
2.3
(27.6)
(116.8)
152.0
(42.2)
(179.3)
1.1
(220.4)
(89.8)
397.7
(107.0)
(52.3)
148.5
80.2
(68.4)
(203.3)
Dec-14A
167.3
41.2
(25.8)
(22.4)
(7.8)
152.6
(40.0)
(422.9)
2.3
(460.6)
314.8
148.5
(116.5)
(48.8)
298.1
(10.0)
(308.1)
(35.1)
Dec-15F
126.7
56.8
0.0
(18.2)
26.0
191.2
(63.0)
(559.7)
89.4
(533.4)
329.5
250.0
(128.5)
(66.6)
384.4
42.3
(342.1)
(71.3)
Dec-16F
141.0
65.6
0.0
(25.7)
28.0
209.0
(70.8)
(116.0)
2.4
(184.4)
136.6
0.0
(131.6)
(75.9)
(70.9)
(46.3)
24.7
93.2
Dec-17F
136.0
76.6
0.0
(24.5)
31.0
219.2
(40.5)
(405.0)
1.9
(443.6)
327.5
100.0
(130.8)
(87.9)
208.9
(15.5)
(224.4)
24.6
Cash Flow
(S$m)
Pre-tax Profit
Tax Paid
Others
Capex
Dividends Paid
62
BY THE NUMBERS
Balance Sheet
(S$m)
Total Investments
Intangible Assets
Inventories
Trade Debtors
Trade Creditors
Short-term Debt
Minority Interests
Total Equity
Dec-13A
3,201
0
57
3,258
205
0
35
87
327
115
50
6
172
1,158
68
1,226
2,093
94
2,187
Dec-14A
3,747
0
57
3,805
193
0
37
88
317
119
249
8
376
1,316
77
1,393
2,255
98
2,353
Dec-15F
4,350
0
67
4,417
235
0
37
0
272
119
79
8
205
1,816
77
1,893
2,485
106
Dec-16F
4,517
0
75
4,592
189
0
37
0
226
119
84
8
211
1,947
77
2,024
2,469
114
Dec-17F
4,939
0
84
5,024
173
0
37
0
210
119
98
8
224
2,261
77
2,338
2,550
122
2,591
2,582
2,671
Key Ratios
NPI Growth
DPS Growth
Effective Tax Rate
Current Ratio
Quick Ratio
Cash Ratio
Dec-13A
4.2%
1.3%
50.9%
(4.11%)
3.15
14.4%
55%
1.90
1.90
1.19
6.33%
Dec-14A
12.8%
11.8%
50.4%
(5.71%)
3.75
22.1%
103%
0.84
0.84
0.51
3.18%
Dec-15F
18.4%
17.3%
50.0%
5.30%
3.12
14.4%
128%
1.32
1.32
1.14
2.28%
Dec-16F
12.3%
11.5%
49.6%
1.58%
3.04
18.2%
122%
1.07
1.07
0.89
2.26%
Dec-17F
3.8%
3.6%
49.6%
(3.85%)
2.71
18.0%
128%
0.94
0.94
0.77
2.03%
Dec-13A
N/A
N/A
131.7
N/A
N/A
3,177.0
N/A
Dec-14A
N/A
N/A
133.9
N/A
N/A
3,724.0
N/A
Dec-15F
N/A
N/A
136.6
N/A
N/A
4,326.9
N/A
Dec-16F
N/A
N/A
138.1
N/A
N/A
4,493.1
N/A
Dec-17F
N/A
N/A
139.6
N/A
N/A
4,916.1
N/A
Key Drivers
RevPAR (S$)
Occupancy (%)
63
ConglomerateSingaporeEquity researchDecember 9, 2015
Company Note
Singapore
Boustead Singapore Ltd
ADD (no change)
To inject new energy
Current price:
Target price:
Previous target:
Up/downside:
S$0.91
S$1.06
S$1.06
17.1%
Reuters:
Bloomberg:
Market cap:
BTSS.SI
BOCS SP
US$332.1m
S$469.3m
US$0.15m
S$0.21m
520.2m
44.8%

Current shares o/s
Free float:
No change.
Healthy order book of S$233m for industrial real estate solutions segment; slower
energy-related engineering order book of S$120m.
Resilient growth outlook for geospatial technology division backed by demand.

Sound financial position to navigate oil & gas downcycle with flexibility.
Proposed acquisition of a distressed energy asset in Indonesia.
Maintain Add rating with a target price of S$1.06 (25% discount to FY3/16 RNAV).
Real estate: remain focused on leasehold portfolio expansion

We expect BSLs 51%-owned subsidiary Boustead Project (BP) to continue to expand
its industrial leasehold portfolio in the next 2-3 years towards an eventual REIT-listing.
We see no capital restriction for BP to pursue this goal, given its S$147m cash on hand
(end-2QFY16). The joint development partnership with ADIC (a Middle East sovereign
wealth fund) will also help reduce its capital outlay substantially. Besides the leasing
business, BP has a healthy design-and-build order book of S$233m as at end-2Q16.
Energy-related engineering: already in the midst of winter
Price Close
1.60
109.0
1.40
99.0
1.20
89.0
1.00
79.0
0.80
69.0
0.60
3
59.0
Vol m
1
Dec-14
Mar-15
Jun-15
Sep-15
Source: Bloomberg
Price performance
Absolute (%)
Relative (%)
1M
-12.1
-7.6
3M
11.0
11.3
12M
-39.8
-27.0
We expect a subdued outlook of the groups energy-related engineering division in FY16

and possibly FY17, in view of depressed global energy prices. The divisions current
order book (including that for wastewater engineering) of S$120m is close to a 5-year
low. Management expects continued delays in the award of sizeable energy contracts
and likely lower project margins in the rest of FY16. That said, BSL should be able to
navigate the oil & gas downcycle with flexibility, given its strong net cash position.
Geospatial: expect upbeat profit growth to be backed by demand

We expect the geospatial technology division to continue delivering high single-digit
profit growth in FY16-17, driven by the firm demand for the Esri technology, which is the
preferred geospatial technology (c.40% global market share) by governments across the
region for their national spatial data infrastructure system. Boustead has the exclusive
distributorship for Esri technology in Australia and the ASEAN region, and remains Esris
top three best-performing distributors globally.
Buying distressed Indonesian energy asset

BSL recently announced it has, via a 83%-consortium, entered into an agreement with
ASX-listed Triangle Energy, to acquire the latters 100% interest in a 992 sq km natural
gas concession in Aceh, Sumatra, Indonesia. The group believes the purchase price of
US$3.9m (1.2% of group market cap) has great value and the downside risks of the
acquisition can be comfortably managed. Subject to Triangles shareholder approval, the
deal would enable BSL to shift into upstream ownership and production of natural gas.
Very strong balance sheet; wait for the next bigger move
As at end-2QFY3/16, the group had a pure cash position of S$144m at BSL level,
representing 32% of its market cap (51%-owned BP has minimum net debt of S$15m
that is backed by its mature industrial real estate portfolio). We believe the strong cash
position will allow BSL to capitalise on the potential consolidation in the oil and gas
sector, when the right opportunities arise. Our FY16 SOP estimate stands at S$1.19 per
share, even if we fully write off the valuation for the energy division.
[X]
Financial Summary
Analysts
Roy CHEN
T (65) 6210 8685
E roy.chen@cimb.com
William TNG, CFA
T (65) 6210 8676
E william.tng@cimb.com
Revenue (S$m)
Operating EBITDA (S$m)
Net Profit (S$m)
Core EPS (S$)
Core EPS Growth
FD Core P/E (x)
DPS (S$)
Dividend Yield
EV/EBITDA (x)
P/FCFE (x)
Net Gearing
P/BV (x)
ROE
% Change In Core EPS Estimates
CIMB/consensus EPS (x)
Mar-14A
513.7
96.98
70.68
0.12
5.0%
7.64
0.070
7.73%
2.92
17.74
(49.4%)
1.32
18.5%
Mar-15A
556.4
96.39
63.28
0.12
(1.4%)
7.75
0.040
4.42%
4.00
6.44
(19.9%)
1.24
16.5%
Mar-16F
497.5
65.65
30.39
0.06
(47.5%)
14.75
0.020
2.21%
6.32
6.50
(31.8%)
1.51
9.2%
0%
0.98
Mar-17F
512.2
70.96
34.86
0.07
9.4%
13.49
0.025
2.76%
5.41
17.40
(35.2%)
1.41
10.8%
0%
0.96
Mar-18F
537.6
72.89
36.75
0.07
5.4%
12.79
0.030
3.31%
4.87
17.70
(37.7%)
1.32
10.7%
0%
1.01

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Share price info

Share px perf. (%)
1M
3M
12M
P/BV vs ROE
12-mth Fwd FD Core P/E vs FD Core EPS

Growth
2.50
25.0%
30.0
60%
2.00
20.0%
25.0
40%
15.0%
20.0
20%
% held
1.50
15.0
0%
33.0
1.00
10.0%
10.0
-20%
PUTRI WIDATI ERNAWAN
8.8
0.50
5.0%
CHARTERED ASSET
MANAGEMENT PTEPTE
5.0
-40%
7.6
0.00
0.0%
0.0
Jan-12 Jan-13
Relative
Absolute
-7.6
-12.1
Major shareholders
WONG FONG FUI
11.3
11.0
-27.0
-39.8
-60%
Jan-14
Jan-15 Jan-16 Jan-17
12-mth Fwd Rolling FD Core P/E (x) (lhs)
ROE (rhs)
FD Core EPS Growth (rhs)
Profit & Loss

(S$m)
Total Net Revenues
Gross Profit
Operating EBITDA
Operating EBIT
Financial Income/(Expense)
Pretax Income/(Loss) from Assoc.
Non-Operating Income/(Expense)
Profit Before Tax (pre-EI)
Exceptional Items
Pre-tax Profit
Taxation
Exceptional Income - post-tax
Profit After Tax
Minority Interests
Preferred Dividends
FX Gain/(Loss) - post tax
Other Adjustments - post-tax
Net Profit
Recurring Net Profit
Fully Diluted Recurring Net Profit
Mar-14A
522.7
184.4
97.0
(8.4)
88.6
2.6
(0.6)
0.0
90.6
Mar-15A
564.0
193.8
96.4
(9.2)
87.2
3.0
(1.2)
0.0
90.3
Mar-16F
497.2
151.5
65.6
(10.7)
55.0
(0.1)
0.0
0.0
54.8
Mar-17F
513.4
161.2
71.0
(10.7)
60.3
0.1
0.9
0.0
61.3
Mar-18F
538.8
167.7
72.9
(10.7)
62.2
0.4
2.7
0.0
65.3
90.6
(19.3)
2.7
74.0
(3.4)
89.0
(23.8)
1.1
66.3
(3.1)
54.8
(12.9)
0.0
42.0
(11.6)
61.3
(13.9)
0.0
47.4
(12.6)
65.3
(14.8)
0.0
50.5
(13.8)
70.7
60.4
60.4
63.3
60.4
60.4
30.4
31.9
31.9
34.9
34.9
34.9
36.8
36.8
36.8
Cash Flow
(S$m)
EBITDA
Cash Flow from Invt. & Assoc.
(Incr)/Decr in Total Provisions
Other Non-Cash (Income)/Expense
Other Operating Cashflow
Net Interest (Paid)/Received
Tax Paid
Capex
Disposals Of FAs/subsidiaries
Acq. Of Subsidiaries/investments
Proceeds From Issue Of Shares
Shares Repurchased
Dividends Paid
Preferred Dividends
Other Financing Cashflow
Mar-14A
97.0
Mar-15A
96.4
Mar-16F
65.6
Mar-17F
71.0
Mar-18F
72.9
26.1
(31.9)
49.7
(1.3)
(1.2)
(3.8)
(5.1)
0.5
(0.0)
(0.0)
2.6
(20.4)
101.4
(80.4)
38.9
(47.1)
(5.4)
(93.9)
18.5
0.1
0.0
(18.7)
3.0
(19.0)
43.4
(58.7)
12.7
(58.2)
0.0
(104.2)
133.5
0.0
0.0
(28.4)
(0.1)
(22.6)
93.1
(3.7)
0.0
(14.7)
0.0
(18.4)
(2.3)
0.0
0.0
(15.6)
0.1
(12.8)
56.9
(3.7)
0.0
(15.0)
0.0
(18.7)
(11.2)
0.0
0.0
(11.7)
0.4
(13.9)
58.3
(3.7)
0.0
(15.0)
0.0
(18.7)
(13.0)
0.0
0.0
(14.3)
(5.6)
(5.7)
1.8
26.0
8.3
(0.7)
104.5
43.7
72.7
(58.6)
0.0
(17.9)
56.9
72.5
79.3
0.0
(22.9)
15.3
27.0
42.5
0.0
(27.3)
12.3
26.6
43.6
65
BY THE NUMBERS
Balance Sheet
(S$m)
Total Debtors
Inventories
Total Other Current Assets
Fixed Assets
Total Investments
Intangible Assets
Total Other Non-Current Assets
Short-term Debt
Current Portion of Long-Term Debt
Total Creditors
Total Long-term Debt
Hybrid Debt - Debt Component
Total Other Non-Current Liabilities
Total Provisions
Total Liabilities
Minority Interests
Total Equity
Mar-14A
232.0
168.4
5.3
67.9
473.6
123.0
77.8
3.7
3.9
208.4
6.7
Mar-15A
264.1
193.5
6.1
106.7
570.4
176.6
87.9
1.5
16.6
282.5
12.1
Mar-16F
316.9
171.0
5.2
90.6
583.7
169.9
106.8
1.5
3.9
282.1
12.1
Mar-17F
332.3
171.0
5.2
90.6
599.1
163.3
122.7
1.5
3.9
291.3
12.1
Mar-18F
344.6
171.0
5.2
90.6
611.4
156.6
140.3
1.5
3.9
302.3
12.1
241.4
16.1
264.3
46.7
246.0
18.8
276.9
174.4
241.4
14.1
267.6
172.1
241.4
14.1
267.6
160.9
241.4
14.1
267.6
147.9
4.1
50.8
5.2
320.3
352.3
9.4
361.7
5.9
180.2
5.4
462.5
380.0
10.5
390.5
4.0
176.1
5.1
448.9
310.2
106.7
416.9
4.0
164.9
5.1
437.7
333.5
119.2
452.7
4.0
151.9
5.1
424.7
356.0
133.0
489.0
Mar-14A
0.1%
(3.3%)
18.9%
0.35
0.68
106.5
21.3%
53.1%
85.79
5.70
249.3
87.9%
23.9%
10.7%
Mar-15A
8.3%
(0.6%)
17.3%
0.15
0.73
40.4
26.7%
32.8%
76.19
5.64
234.5
64.1%
18.7%
8.4%
Mar-16F
(10.6%)
(31.9%)
13.2%
0.26
0.60
12.2
23.4%
34.2%
86.62
6.00
251.8
19.3%
10.0%
4.9%
Mar-17F
2.9%
8.1%
13.9%
0.31
0.64
14.1
22.6%
37.2%
85.52
5.40
246.8
26.8%
10.5%
5.4%
Mar-18F
5.0%
2.7%
13.6%
0.36
0.69
15.6
22.6%
42.3%
81.48
5.12
234.2
28.7%
10.4%
5.6%
Mar-14A
-16.9%
N/A
40.7%
N/A
51.8%
N/A
36.1%
N/A
-6.6%
N/A
20.8%
N/A
Mar-15A
22.1%
N/A
44.9%
N/A
6.2%
N/A
34.6%
N/A
9.3%
N/A
20.5%
N/A
Mar-16F
-1.6%
N/A
50.5%
N/A
-28.8%
N/A
28.1%
N/A
-9.0%
N/A
21.4%
N/A
Mar-17F
2.9%
N/A
50.5%
N/A
0.0%
N/A
27.3%
N/A
7.0%
N/A
22.2%
N/A
Mar-18F
2.9%
N/A
49.5%
N/A
7.1%
N/A
27.9%
N/A
7.0%
N/A
22.6%
N/A
Key Ratios
Revenue Growth
Operating EBITDA Growth
Operating EBITDA Margin
Net Cash Per Share (S$)
BVPS (S$)
Effective Tax Rate
Accounts Receivables Days
Inventory Days
Accounts Payables Days
ROIC (%)
ROCE (%)
Key Drivers
Rev. growth (%, main biz.)
EBITDA mgns (%, main biz.)
Rev. as % of total (main biz.)
EBITDA as % of total (main biz.)
Rev. growth (%, 2ndary biz.)
EBITDA mgns (%, 2ndary biz.)
Rev. as % of total (2ndary biz.)
EBITDA as % of total (2ndary biz.)
Rev. growth (%, tertiary biz.)
EBITDA mgns (%, tertiary biz.)
Rev.as % of total (tertiary biz.)
EBITDA as % of total (tertiary biz.)
66
Company Note
Singapore
Cache Logistics Trust
ADD (no change)
Attractive dividend yields
Current price:
Target price:
Previous target:
Up/downside:
S$0.91
S$1.08
S$1.23
19.2%
Reuters:
Bloomberg:
Market cap:
CALT.SI
CACHE SP
US$574.4m
S$811.6m
US$1.02m
S$1.44m
780.6m
88.3%

Current shares o/s
Free float:
Reduce FY15-17F DPS by 3-13%
Moving towards a multi-tenanted lease profile.
Maintain Add on attractive dividend yields.
Margins under pressure; but occupancy still resilient.

DHL BTS to offset cost pressures.
Proposed warehouse acquisition in Adelaide, Australia. Partially funded by private
placement
Moving towards multi-tenanted lease profile

Caches 3Q15 NPI was down 4% yoy to S$18.8m due to the conversion of several
properties from master lease to multi-tenancy, which led to a slight increase in vacancy
and the trust assuming direct obligation for property expenses. Cache derives 64% of its
revenue from single-tenant master leases with fixed rental escalations, and 36% from
multi-tenanted buildings. The Master Lessees (sponsors CWT and C&P) are expected
to gradually wind down their exposures to c.50% of the original space taken up.
Margins under pressure; but occupancy still resilient
Price Close
Post-conversion of four master-leased properties to multi-tenanted properties, NPI

margins have narrowed from 94% in 3Q14 to 81% in 3Q15. However, occupancy
remained relatively high at 95.2%. Given continued new supply (+5.6% growth in 2016
vs. +5.2% in 2015), and the imposition of several cooling measures in the industrial
market (e.g. revision in JTC subletting policy), we expect flat warehouse rents of S$2
psf.
101.4
1.100
98.3
1.000
95.2
0.900
92.1
DHL BTS to offset cost pressures
0.800
10
89.0
With DHL BTS receiving T.O.P in Jul 15 (contribution expected in FY16), we expect the
property to lift earnings and stabilise NPI margins. Its GFA accounts for c.15% of
Caches entire portfolio. Furthermore, as DHL will only take up 77% of the total GFA
from Jan 16 onwards, upside could come from leasing out the remaining space.
Vol m
1.200
Dec-14
Mar-15
Jun-15
Sep-15
Source: Bloomberg
Price performance
Absolute (%)
Relative (%)
1M
-6.7
-2.2
3M
-6.2
-5.9
12M
-22.2
-9.4
Proposed warehouse acquisition in Adelaide, Australia

Expanding its reach into Adelaide, Cache has proposed the acquisition of a distribution
warehouse for A$57.3m, which is expected to generate c.8.9% NPI yield in the first year
(GLA of 58,795 sq m). Upon completion of the acquisition, the property will be fully
master-leased to Metcash Trading, an ASX-listed company on a triple net lease
structure, with an annual rental escalation pegged to the CPI. The acquisition would be
partially funded by its recent private placement (106.3m new units at S$0.941/unit).
Attractive dividend yields underpin our Add rating

Cache offers forward dividend yields of 9-9.7%, the highest among the industrial REITs.
Moreover, it has one of the longest WALE (weighted average lease expiry) of 4.3 years
by NLA, with the lowest tenant lease expiries of 1% in 2015. We shave our FY15-17
DPU by 3-13% as we incorporate the recent dilutive effects from the S$100m-rights
issue, which is partially offset by the two recent acquisitions in Australia. That said, given
the recent share price correction, we maintain Add on the stock, with a lower DDMbased target price of S$1.08.
[X]
Financial Summary
Analyst
LOCK Mun Yee
T (65) 6210 8606

Net Profit (S$m)
Core EPS (S$)
Core EPS Growth
FD Core P/E (x)
DPS (S$)
Dividend Yield
Asset Leverage
BVPS (S$)
P/BV (x)
Recurring ROE
Dec-13A
81.0
76.8
63.63
65.56
0.077
28.3%
11.81
0.086
9.50%
28.8%
0.98
0.93
7.94%
Dec-14A
82.9
78.0
65.84
66.88
0.073
(5.1%)
12.45
0.086
9.42%
30.7%
0.98
0.93
7.45%
Dec-15F
90.4
77.7
52.90
60.81
0.063
(13.5%)
14.38
0.068
7.49%
39.0%
0.97
0.94
6.48%
(12.8%)
0.81
Dec-16F
110.5
95.0
65.82
73.92
0.074
16.4%
12.36
0.082
9.06%
39.0%
0.97
0.94
7.59%
(5.4%)
0.94
Dec-17F
117.8
101.3
71.20
79.38
0.079
7.6%
11.49
0.088
9.68%
39.0%
0.96
0.95
8.21%
(2.5%)
1.00

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EFA
BY THE NUMBERS
Share price info

Share px perf. (%)
1M
3M
Relative
-2.2
-5.9
Absolute
-6.7
-6.2
Major shareholders
12M
-9.4
-22.2
% held
CWT Ltd
8.9
JP Morgan
7.7
Bank of New York Mellon
6.6
1.60
1.40
1.20
1.00
0.80
0.60
0.40
0.20
0.00
45.0%
39.4%
33.8%
28.1%
22.5%
16.9%
11.3%
5.6%
0.0%
0.1000
0.0900
0.0800
0.0700
0.0600
0.0500
0.0400
0.0300
0.0200
0.0100
0.0000
DPS (lhs)
10.00%
9.00%
8.00%
7.00%
6.00%
5.00%
4.00%
3.00%
2.00%
1.00%
0.00%
Profit & Loss

(S$m)
Rental Revenues
Other Revenues
Net Property Income
Management Fees
Trustee's Fees
EBITDA
EBIT
Net Interest Income
Associates' Profit
Exceptional Items
Pre-tax Profit
Taxation
Minority Interests
Preferred Dividends
Net Profit
Dec-13A
81.0
0.0
81.0
(4.1)
76.8
0.0
(6.5)
(0.3)
(1.7)
68.2
0.0
68.2
(10.9)
0.0
0.0
6.7
64.1
(0.5)
0.0
0.0
63.6
65.6
Dec-14A
82.9
0.0
82.9
(4.9)
78.0
0.0
(6.7)
(0.3)
(1.6)
69.4
0.0
69.4
(12.3)
0.0
0.0
9.0
66.1
(0.3)
0.0
0.0
65.8
66.9
Dec-15F
90.4
0.0
90.4
(12.7)
77.7
0.0
(7.9)
(0.4)
(1.6)
67.9
0.0
67.9
(14.3)
0.0
0.0
0.0
53.6
(0.7)
0.0
0.0
52.9
60.8
Dec-16F
110.5
0.0
110.5
(15.5)
95.0
0.0
(8.1)
(0.4)
(1.6)
84.9
0.0
84.9
(18.3)
0.0
0.0
0.0
66.5
(0.7)
0.0
0.0
65.8
73.9
Dec-17F
117.8
0.0
117.8
(16.5)
101.3
0.0
(8.2)
(0.4)
(1.6)
91.1
0.0
91.1
(19.1)
0.0
0.0
0.0
71.9
(0.7)
0.0
0.0
71.2
79.4
Dec-13A
64.1
10.9
(0.0)
(0.5)
4.9
79.4
(0.0)
(120.0)
0.0
(120.0)
1.7
86.8
(65.6)
(7.0)
16.0
(24.7)
(40.6)
(45.9)
Dec-14A
66.1
12.3
(0.5)
(0.3)
5.0
82.6
(0.9)
(61.1)
(1.5)
(63.5)
42.2
0.0
(66.7)
(15.4)
(39.9)
(20.7)
10.6
46.0
Dec-15F
53.6
14.3
0.0
(0.7)
5.9
73.1
(0.0)
(222.5)
0.1
(222.4)
218.4
100.0
(60.8)
(14.4)
243.2
93.9
(149.3)
54.7
Dec-16F
66.5
18.3
0.0
(0.7)
6.1
90.3
(0.0)
0.0
0.1
0.1
0.0
0.0
(73.9)
(18.4)
(92.4)
(2.0)
90.3
71.9
Dec-17F
71.9
19.1
0.0
(0.7)
6.2
96.5
(0.0)
0.0
0.2
0.1
0.0
0.0
(79.4)
(19.3)
(98.7)
(2.0)
96.6
77.3
Cash Flow
(S$m)
Pre-tax Profit
Tax Paid
Others
Capex
Dividends Paid
68
BY THE NUMBERS
Balance Sheet
(S$m)
Total Investments
Intangible Assets
Inventories
Trade Debtors
Trade Creditors
Short-term Debt
Minority Interests
Total Equity
Dec-13A
1,035
0
1
1,036
41
0
1
0
42
5
0
0
5
310
0
310
762
0
762
Dec-14A
1,120
0
2
1,122
11
0
3
0
15
21
7
0
27
343
0
343
767
0
767
Dec-15F
1,343
0
2
1,345
107
0
3
0
111
21
7
0
27
561
0
561
867
0
Dec-16F
1,343
0
2
1,345
107
0
3
0
111
21
7
0
27
561
0
561
867
0
Dec-17F
1,343
0
2
1,345
107
0
3
0
111
21
7
0
27
561
0
561
867
0
867
867
867
Key Ratios
NPI Growth
DPS Growth
Effective Tax Rate
Current Ratio
Quick Ratio
Cash Ratio
Dec-13A
11.4%
11.1%
94.9%
3.3%
6.26
0.71%
103%
9.01
9.01
8.82
6.16%
Dec-14A
2.3%
1.5%
94.1%
(0.8%)
5.65
0.42%
102%
0.54
0.54
0.42
5.95%
Dec-15F
9.1%
(0.3%)
86.0%
(20.4%)
4.73
1.36%
115%
4.08
4.08
3.95
4.08%
Dec-16F
22.2%
22.2%
86.0%
20.9%
4.60
1.10%
112%
4.08
4.08
3.95
4.52%
Dec-17F
6.6%
6.6%
86.0%
6.8%
4.72
1.02%
111%
4.08
4.08
3.95
4.89%
Dec-13A
1.5
N/A
N/A
N/A
100.0%
N/A
N/A
Dec-14A
1.6
N/A
N/A
N/A
100.0%
N/A
N/A
Dec-15F
1.6
N/A
N/A
N/A
92.5%
N/A
N/A
Dec-16F
1.6
N/A
N/A
N/A
94.2%
N/A
N/A
Dec-17F
1.6
N/A
N/A
N/A
94.2%
N/A
N/A
Key Drivers
RevPAR (S$)
Occupancy (%)
69
Company Note
Singapore
Cambridge Industrial Trust
HOLD (no change)
MTB conversions in the offing
Current price:
Target price:
Previous target:
Up/downside:
S$0.58
S$0.73
S$0.73
25.6%
Reuters:
Bloomberg:
Market cap:
CMIT.SI
CREIT SP
US$532.8m
S$752.7m
US$0.36m
S$0.51m
1,253m
67.0%

Current shares o/s
Free float:
0.750
108.0
0.700
104.8
0.650
101.6
0.600
98.4
0.550
95.2
0.500
6
92.0
Vol m
Margin pressures and higher vacancies with MTBS conversions in the offing.
Pro-active capital management but gearing of 37.2% caps inorganic expansion.
Dividend yields exceed 8%, which should cap downside. Hold maintained, with
unchanged target price.
Healthy rental reversions and acquisitions support 3Q15 NPI

3Q15 NPI rose 10.5% yoy to S$21.7m thanks to YTD positive rental reversions (+8.5%)
as 718,567 sq ft of space was renewed (c.8% of portfolio), as well as contributions from
acquisitions. We expect rental reversions to moderate further, due to the tougher
operating climate.
We understand that nine STBs will be up for renewal in the next 12 months,
representing c.17% of total rental revenue. CREIT is expected to convert five of the
STBs to MTBs, renew the leases for three STBS and redevelop the last remaining unit.
With MTB conversions in the offing, we expect margin pressures and higher vacancies
for FY16. CREIT posted a slight dip in overall MTB occupancy in 3Q15: Portfolio
occupancy dipped to 95.4% (2Q15: 95.5%) while MTB slid to 89.2% (2Q15: 89.6%).
No change.
2
Dec-14
3Q15 NPI supported by healthy rental reversions and contributions from

acquisitions.
MTB conversions in the offing
Price Close
Pro-active capital management

CREIT has refinanced most of its loans expiring in FY15-16, with no major refinancing
until 2017. As at end-3Q15, it had a weighted average debt maturity of 3.3 years, at an
estimated cost of c.3.7%. The REIT has substantially hedged its interest rate exposure,
with 96.5% of its rates fixed over the next 3.2 years.
Gearing caps inorganic expansion

Mar-15
Jun-15
Sep-15
Source: Bloomberg
Price performance
Absolute (%)
Relative (%)
1M
-7.2
-2.7
3M
-3.3
-3.0
12M
-14.7
-1.9
CREITs gearing of 37.2% in 3Q15 suggests that there is limited room for acquisition
opportunities. Given limited yield-accretive deals in Singapore, the REIT has broadened
its targets to Australia, Japan and Malaysia.
Maintain Hold
CREIT trades at dividend yields in excess of 8% which should cap downside. However,
we see potential downside risks in our estimates due to conversions and have little
reason to be excited on the back of limited inorganic expansion plus rising pressure from
MTB conversions. We maintain our Hold call and DDM-based target price of S$0.73.
[X]
Financial Summary
Analyst
LOCK Mun Yee
T (65) 6210 8606

Net Profit (S$m)
Core EPS (S$)
Core EPS Growth
FD Core P/E (x)
DPS (S$)
Dividend Yield
Asset Leverage
BVPS (S$)
P/BV (x)
Recurring ROE
Dec-13A
96.5
80.41
118.9
61.29
0.028
(26.5%)
20.83
0.050
8.58%
28.1%
0.70
0.83
4.13%
Dec-14A
99.3
77.81
45.3
63.04
0.040
45.1%
14.25
0.050
8.63%
34.4%
0.69
0.84
5.84%
Dec-15F
108.3
84.44
50.9
64.36
0.041
1.1%
14.31
0.051
8.83%
36.9%
0.68
0.86
5.92%
0%
1.05
Dec-16F
110.8
86.40
52.8
66.02
0.042
3.3%
13.86
0.052
9.02%
37.3%
0.66
0.87
6.24%
0%
1.05
Dec-17F
112.8
87.97
53.7
65.95
0.042
1.4%
13.67
0.052
8.98%
38.5%
0.65
0.89
6.44%
0%
1.02

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Share price info

Share px perf. (%)
1M
3M
12M
1.40
40.0%
0.0600
10.00%
1.20
34.3%
0.0500
8.33%
0.0400
6.67%
0.0300
5.00%
Relative
-2.7
-3.0
-1.9
Absolute
-7.2
-3.3
-14.7
1.00
28.6%
% held
0.80
22.9%
16.4
0.60
17.1%
0.40
11.4%
0.0200
3.33%
0.20
5.7%
0.0100
1.67%
0.00
0.0%
0.0000
0.00%
Major shareholders
JinQuan Tong
Credit Suisse Grp AG
5.9
Chan Wai Kheong
5.6
DPS (lhs)
Profit & Loss

(S$m)
Rental Revenues
Other Revenues
Net Property Income
Management Fees
Trustee's Fees
EBITDA
EBIT
Net Interest Income
Associates' Profit
Exceptional Items
Pre-tax Profit
Taxation
Minority Interests
Preferred Dividends
Net Profit
Dec-13A
96.5
0.0
96.5
(16.1)
80.4
0.0
(6.5)
(2.5)
(13.9)
57.6
0.0
57.6
(23.6)
0.0
0.0
84.9
118.9
(0.0)
0.0
0.0
118.9
61.3
Dec-14A
99.3
0.0
99.3
(21.5)
77.8
0.0
(6.6)
(1.4)
(1.7)
68.1
0.0
68.1
(17.5)
0.0
0.0
(5.2)
45.4
(0.1)
0.0
0.0
45.3
63.0
Dec-15F
108.3
0.0
108.3
(23.8)
84.4
0.0
(8.0)
(2.3)
(4.0)
70.2
0.0
70.2
(19.3)
0.0
0.0
0.0
50.9
0.0
0.0
0.0
50.9
64.4
Dec-16F
110.8
0.0
110.8
(24.4)
86.4
0.0
(8.0)
(2.3)
(4.1)
72.1
0.0
72.1
(19.3)
0.0
0.0
0.0
52.8
0.0
0.0
0.0
52.8
66.0
Dec-17F
112.8
0.0
112.8
(24.8)
88.0
0.0
(8.0)
(2.3)
(4.1)
73.6
0.0
73.6
(19.9)
0.0
0.0
0.0
53.7
0.0
0.0
0.0
53.7
65.9
Dec-13A
118.9
23.6
4.0
0.0
(84.9)
61.6
(25.6)
158.5
(3.9)
128.9
(141.5)
0.0
(43.8)
(21.4)
(206.7)
(16.2)
190.6
25.4
Dec-14A
45.4
17.5
(4.2)
0.0
8.6
67.4
(41.6)
(153.3)
0.6
(194.3)
117.8
0.0
(42.6)
(15.7)
59.5
(67.4)
(126.8)
(26.6)
Dec-15F
50.9
19.3
(2.6)
0.0
4.0
71.5
0.0
(30.5)
16.6
(13.9)
45.5
0.0
(64.4)
(23.3)
(42.1)
15.5
57.7
83.9
Dec-16F
52.8
19.3
0.6
0.0
3.2
75.8
0.0
0.0
0.0
0.0
0.0
0.0
(66.0)
(22.5)
(88.5)
(12.7)
75.8
56.5
Dec-17F
53.7
19.9
0.4
0.0
2.8
76.8
0.0
0.0
0.0
0.0
20.0
0.0
(65.9)
(22.6)
(68.6)
8.2
76.8
76.9
Cash Flow
(S$m)
Pre-tax Profit
Tax Paid
Others
Capex
Dividends Paid
71
BY THE NUMBERS
Balance Sheet
(S$m)
Total Investments
Intangible Assets
Inventories
Trade Debtors
Trade Creditors
Short-term Debt
Minority Interests
Total Equity
Dec-13A
1,155
0
18
1,173
74
0
7
7
88
31
0
1
32
355
12
367
862
0
0
862
Dec-14A
1,335
0
16
1,352
6
0
11
12
29
26
50
0
76
425
12
438
866
0
0
866
Dec-15F
1,366
0
0
1,366
22
0
11
12
44
24
50
0
74
471
12
483
853
0
0
853
Dec-16F
1,366
0
0
1,366
9
0
11
12
32
24
50
0
74
471
12
483
840
0
0
840
Dec-17F
1,366
0
0
1,366
17
0
11
12
40
25
50
0
75
491
12
503
827
0
0
827
Dec-13A
8.44%
5.49%
83.3%
4.02%
2.43
0.009%
52%
2.70
2.70
2.26
9.27%
Dec-14A
2.96%
(3.24%)
78.3%
0.56%
3.86
0.225%
139%
0.38
0.38
0.08
3.43%
Dec-15F
8.97%
8.52%
78.0%
2.37%
3.64
0.000%
126%
0.60
0.60
0.29
3.65%
Dec-16F
2.32%
2.32%
78.0%
2.16%
3.74
0.000%
125%
0.43
0.43
0.12
3.76%
Dec-17F
1.82%
1.82%
78.0%
(0.44%)
3.70
0.000%
123%
0.53
0.53
0.23
3.83%
Dec-13A
N/A
N/A
N/A
8,014
97.4%
1,154.9
N/A
Dec-14A
N/A
N/A
N/A
8,014
96.3%
1,335.2
N/A
Dec-15F
N/A
N/A
N/A
8,014
96.3%
1,365.7
N/A
Dec-16F
N/A
N/A
N/A
8,014
96.3%
1,365.7
N/A
Dec-17F
N/A
N/A
N/A
8,014
96.3%
1,365.7
N/A
Key Ratios
NPI Growth
DPS Growth
Effective Tax Rate
Current Ratio
Quick Ratio
Cash Ratio
Key Drivers
RevPAR (S$)
Occupancy (%)
72
Property Devt & InvtSingaporeEquity researchDecember 9, 2015
Company Note
Singapore
CapitaLand
ADD (no change)
Multi-pronged drivers
Current price:
Target price:
Previous target:
Up/downside:
S$3.26
S$4.06
S$4.06
24.6%
Reuters:
Bloomberg:
Market cap:
CATL.SI
CAPL SP
US$9,802m
S$13,848m
US$25.85m
S$36.41m
4,250m
53.6%

Current shares o/s
Free float:
Price Close
108.3
3.00
101.1
2.50
60
94.0
Vol m
40
20
Jun-15
Sep-15
Source: Bloomberg
Price performance
Absolute (%)
Relative (%)
Shopping mall operations continue to trend up.
China residential sales improving; replenishing landbank via M&As and JVs to
optimise returns.
Targets to double serviced residence portfolio to 80,000 units by 2020.
Maintain Add with unchanged RNAV-based target price of S$4.06.
De-risking Singapore residential, lifting exposure in Vietnam

The group continues to de-risk its Singapore residential portfolio with an additional
S$412m sales in the first 9 months of this year. Looking ahead, it has another 432 new
units that could be timed to market. Meanwhile, the group has deepened its footprint in
Vietnam with two recent ventures in HCMC which will increase its residential pipeline
there by another c.1,350 units.
China residential sales have picked up pace, with 6,492 units valued at Rmb11.6bn sold
in 9M15, more than 2x stronger than a year ago. This extended the groups earnings
visibility from this division. Furthermore, with another 2,000 units to be completed in 4Q,
we expect China residential earnings to improve yoy. Going forward, it will replenish its
landbank via M&As and JVs, as well as look for urban renewal projects to enhance its
returns.
3.50
Mar-15
Slower Singapore residential offset by increased activity in Vietnam.
China residential activity up
No change
Dec-14
1M
0.9
5.4
3M
16.4
16.7
12M
0.0
12.8
Shopping mall operations remain upbeat

China malls continue to enjoy high committed occupancy rate of 93.4% while tenant
sales and shopper traffic improved 9.5% and 3.7% yoy, respectively. In Singapore,
shopper footfalls improved 6.3% while tenant sales ticked up 1.1% yoy. Meanwhile, the
Raffles City portfolio of properties is gaining momentum with four operational assets and
four more to be opened over the next few years.
Strategic initiatives to grow serviced residence portfolio

CapitaLand expects its serviced residence operations to double the keys under its
management to 80,000 by 2020. Recently, wholly-owned subsidiary Ascott has
partnered Qatar Investment Authority to establish a US$600m fund to invest in serviced
projects with an initial focus on Asia Pacific and Europe. It has also tied up with Tujia to
extend its market reach as well as set up a JV to manage new contracts to expand its
business in China.
Maintain Add
We reiterate our Add rating with an unchanged target price of S$4.06. With 75% of its
earnings derived from recurring sources, the group has a steadily growing income base
to sustain its long-term ROE targets.
[X]
Financial Summary
Analyst
LOCK Mun Yee
T (65) 6210 8606
Total Net Revenues (S$m)

Net Profit (S$m)
Core EPS (S$)
Core EPS Growth
FD Core P/E (x)
DPS (S$)
Dividend Yield
EV/EBITDA (x)
P/FCFE (x)
Net Gearing
P/BV (x)
ROE
Dec-13A
4,874
725
898
0.13
63%
28.4
0.07
2.12%
42.48
67.71
61.4%
0.88
3.66%
Dec-14A
3,177
907
591
0.04
(71%)
100.6
0.09
2.76%
38.28
6.52
76.7%
0.83
1.00%
Dec-15F
3,810
1,260
1,002
0.17
344%
22.7
0.13
3.99%
26.07
22.44
38.4%
0.80
4.23%
1.46
Dec-16F
4,144
1,449
736
0.17
2%
22.1
0.09
2.62%
20.69
5.80
24.9%
0.77
4.18%
0.97
Dec-17F
4,843
1,667
873
0.21
19%
18.7
0.10
2.92%
20.05
9.19
30.3%
0.69
4.60%
1.05

Powered by
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BY THE NUMBERS
Share price info

Share px perf. (%)
Relative
Absolute
Major shareholders
Temasek Holdings
Blackrock
1M
5.4
0.9
3M
16.7
16.4
12M
12.8
0.0
% held
39.5
6.9
P/BV vs ROE

Growth
1.200
4.50%
250
1,000%
1.000
3.75%
200
760%
0.800
3.00%
150
520%
0.600
2.25%
0.400
1.50%
100
280%
0.200
0.75%
50
40%
0.000
0.00%
0
-200%
ROE (rhs)
Profit & Loss

(S$m)
Total Net Revenues
Gross Profit
Operating EBITDA
Operating EBIT
Exceptional Items
Pre-tax Profit
Taxation
Profit After Tax
Minority Interests
Pref. & Special Div
Net Profit
Dec-13A
4,874
1,839
725
(52)
673
(368)
652
0
957
377
1,333
(124)
Dec-14A
3,177
1,199
907
(65)
842
(416)
506
0
932
525
1,457
(267)
Dec-15F
3,810
1,437
1,260
(60)
1,200
(477)
554
0
1,277
316
1,592
(167)
Dec-16F
4,144
1,564
1,449
(66)
1,382
(524)
499
0
1,358
0
1,358
(176)
Dec-17F
4,843
1,827
1,667
(73)
1,595
(477)
492
0
1,610
0
1,610
(208)
1,209
(311)
0
1,190
(599)
0
1,426
(423)
0
1,182
(446)
0
1,402
(529)
0
898
563
563
591
162
162
1,002
719
719
736
736
736
873
873
873
Cash Flow
(S$m)
EBITDA
Straight Line Adjustment
Tax Paid
Capex
Disposals of Investment Properties
Shares Repurchased
Dividends Paid
Preferred Dividends
Dec-13A
725
Dec-14A
907
Dec-15F
1,260
Dec-16F
1,449
Dec-17F
1,667
(1,933)
(3,210)
2,579
3,446
(789)
(608)
458
0
(140)
(1,498)
(2,607)
1,332
(300)
(229)
0
(137)
(2,969)
(2,329)
4,066
5
(479)
0
(140)
3,225
(1,890)
1,448
0
(567)
0
(214)
4,114
(791)
124
(52)
(471)
0
(135)
220
(1,309)
1,035
0
0
(1,275)
3,009
0
0
(294)
0
0
1,737
3,731
0
0
(266)
0
0
(442)
(2,057)
0
0
(329)
0
0
(667)
(635)
0
0
(514)
0
0
(274)
1,828
0
0
(253)
(461)
2,254
(487)
2,977
(606)
(2,991)
(540)
(1,690)
(520)
1,055
74
BY THE NUMBERS
Balance Sheet
(S$m)
Properties Under Development
Total Debtors
Inventories
Fixed Assets
Total Investments
Intangible Assets
Short-term Debt
Total Creditors
Total Provisions
Total Liabilities
Minority Interests
Total Equity
Dec-13A
4,767
Dec-14A
2,749
Dec-15F
6,963
Dec-16F
9,593
Dec-17F
9,004
2,003
10,149
603
17,522
1,361
23,987
696
0
26,045
948
1,283
10,737
409
15,179
1,085
28,250
463
0
29,798
1,797
1,650
8,880
569
18,062
1,092
29,929
602
0
31,622
1,603
1,751
6,549
755
18,648
1,091
31,800
752
0
33,643
1,544
1,109
6,150
473
16,737
1,083
35,730
422
0
37,235
1,716
3,606
601
5,155
16,241
2,614
428
4,838
17,280
3,695
594
5,893
15,417
4,904
788
7,236
14,841
3,087
494
5,297
16,497
1,950
18,190
0
23,345
15,684
4,538
20,222
1,577
18,857
0
23,695
16,755
4,526
21,281
2,190
17,606
0
23,499
17,249
8,936
26,185
2,906
17,747
0
24,983
17,988
9,320
27,308
1,823
18,320
0
23,617
19,996
10,360
30,355
Dec-13A
47.6%
(8.2%)
14.9%
(2.92)
3.69
1.46
9.3%
56%
130.6
1,062
358.7
6.1%
2.16%
2.74%
Dec-14A
(34.8%)
25.0%
28.5%
(3.84)
3.94
1.60
18.3%
582%
188.8
1,927
573.7
6.0%
2.45%
2.22%
Dec-15F
19.9%
39.0%
33.1%
(2.37)
4.06
2.09
10.5%
81%
140.5
1,509
485.3
8.3%
3.11%
3.11%
Dec-16F
8.8%
15.0%
35.0%
(1.60)
4.23
2.42
12.9%
50%
150.2
1,094
609.8
12.3%
3.29%
3.10%
Dec-17F
16.9%
15.1%
34.4%
(2.17)
4.70
2.96
12.9%
46%
107.8
768
483.6
47.9%
3.59%
4.04%
Dec-13A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
25.8%
25.7%
N/A
Dec-14A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
85.4%
21.7%
N/A
Dec-15F
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
40.4%
21.7%
N/A
Dec-16F
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
50.2%
21.7%
N/A
Dec-17F
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
114.8%
21.7%
N/A
Key Ratios
Revenue Growth
BVPS (S$)
Effective Tax Rate
Inventory Days
ROIC (%)
ROCE (%)
Key Drivers
Unbooked Presales (m) (S$)
Unbooked Presales (area: m sm)
Unbooked Presales (units)
Unsold attrib. landbank (area: m sm)
Gross Margins (%)
Contracted Sales ASP (per Sm) (S$)
Residential EBIT Margin (%)
Investment rev / total rev (%)
Residential rev / total rev (%)
Invt. properties rental margin (%)
SG&A / Sales Ratio (%)
75
Company Note
Singapore
CapitaLand Commercial Trust
ADD (no change)
Proactive leasing activities
Current price:
Target price:
Previous target:
Up/downside:
S$1.33
S$1.65
S$1.65
24.1%
Reuters:
Bloomberg:
Market cap:
CACT.SI
CCT SP
US$2,780m
S$3,927m
US$7.20m
S$10.14m
2,942m
67.9%

Current shares o/s
Free float:
No change.
CCT saw higher income from most of its properties in 9M15.
Adopting proactive leasing strategy ahead of rising incoming supply; CapitaGreens

committed occupancy rate stood at 87.7% at end-Sep.
Among the lowest-geared S-REITS; Potential S$1.3bn debt headroom for

purchases.
Muted office sentiment likely priced in. Reiterate Add, with an unchanged DDMbased target price.
Rental reversion remained positive in 9M15, with new lease demand from the
financial services, IT, media, telco and real estate sectors.
Higher rental income from most of its properties in 9M15

For 9M15, CCT booked a 3.8% yoy increase in NPI due mainly to revenue growth from
higher rents and occupancy rates across all its assets (with the exception of Twenty
Anson). CCTs portfolio achieved 96.4% occupancy rate in 9M15 versus CBD Cores
95.8%. Its Grade A offices achieved 94.7% occupancy in 9M15, in line with the markets
94.8%.
Reversions remain positive in 3Q15

Price Close
1.90
113.1
1.70
105.3
1.50
97.6
1.30
89.8
1.10
30
82.0
Proactive leasing strategy
Vol m
20
10
Dec-14
In 3Q15, CCT registered 226,000 sq ft of new and renewed space, of which 36% were
new leases. Demand came largely from the financial services, IT, media and telcos and
real estate sectors. Transacted rents ranged from S$9.30-12.30 psf/month for One
George St, S$10.50-13.50 psf/month for 6 Battery Rd and S$11.90-14.00 psf/month for
CapitaGreen. Overall, average portfolio rent inched up to S$8.89 psf/month.
CapitaGreen, which opened on 9 Sep, achieved 87.7% committed occupancy rate.
Mar-15
Jun-15
Sep-15
Source: Bloomberg
Price performance
Absolute (%)
Relative (%)
1M
-2.6
1.9
3M
0.8
1.1
12M
-20.6
-7.8
CCT has proactively re-contracted expiring leases, including those due in FY16. To
date, 2% of its office and retail leases are due to be renewed in FY15 and another 16%
in FY16. This provides the trust with good earnings visibility. Average expiring rents in
FY16 and FY17 range from S$9.69-10.26 psf/month. We expect the gap between
market and reversion rents to narrow, as market rents continue to slide over the next two
years due to above-average new supply.
Healthy balance sheet with low gearing

CCT has one of the lowest leverage ratios among the S-REITs, with net gearing of
30.1% at end-Sep. This gives it huge debt headroom of c.S$1.3bn (before hitting the
40% net gearing ratio) for future acquisitions. It has a call option to acquire the
remaining 60% of CapitaGreen from its JV partners, within three years after completion
in 2015. This option could provide an avenue for inorganic growth.
Muted office sentiment priced in

CCT currently trades at 0.74x FY15 P/BV and offers investors potential FY16 DPU yield
of 7.1%. We think that much of the muted sentiment in the office sector has been priced
in. We maintain our Add call, with an unchanged DDM-based target price of S$1.65.
[X]
Financial Summary
Analyst
LOCK Mun Yee
T (65) 6210 8606

Net Profit (S$m)
Core EPS (S$)
Core EPS Growth
FD Core P/E (x)
DPS (S$)
Dividend Yield
Asset Leverage
BVPS (S$)
P/BV (x)
Recurring ROE
Dec-13A
386.9
296.5
374.6
234.2
0.07
7.3%
17.92
0.081
6.12%
28.6%
1.71
0.78
4.41%
Dec-14A
262.6
205.2
448.8
249.2
0.13
69.9%
10.55
0.085
6.36%
19.0%
1.75
0.76
7.29%
Dec-15F
272.7
213.9
263.6
261.2
0.09
(29.2%)
14.89
0.089
6.66%
20.0%
1.75
0.76
5.11%
1.02
Dec-16F
287.6
224.4
305.4
272.7
0.10
15.7%
12.87
0.092
6.94%
20.7%
1.74
0.76
5.92%
1.03
Dec-17F
302.5
235.1
318.7
284.6
0.11
4.1%
12.36
0.096
7.23%
21.5%
1.74
0.76
6.18%
1.06

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Share price info

Share px perf. (%)
1M
3M
Relative
1.9
1.1
Absolute
-2.6
0.8
Major shareholders
CapitaLand
12M
-7.8
-20.6
% held
32.1
Capital Group
6.3
CBRE
6.1
1.200
35.0%
1.000
29.2%
0.800
23.3%
0.600
17.5%
0.400
11.7%
0.200
5.8%
0.000
0.0%
0.1000
0.0900
0.0800
0.0700
0.0600
0.0500
0.0400
0.0300
0.0200
0.0100
0.0000
DPS (lhs)
8.00%
7.20%
6.40%
5.60%
4.80%
4.00%
3.20%
2.40%
1.60%
0.80%
0.00%
Profit & Loss

(S$m)
Rental Revenues
Other Revenues
Net Property Income
Management Fees
Trustee's Fees
EBITDA
EBIT
Net Interest Income
Associates' Profit
Exceptional Items
Pre-tax Profit
Taxation
Minority Interests
Preferred Dividends
Net Profit
Dec-13A
386.9
0.0
386.9
(90.4)
296.5
0.0
(21.5)
(3.0)
0.0
272.1
(5.0)
267.1
(59.1)
4.4
0.0
162.3
374.6
(0.0)
0.0
0.0
374.6
234.2
Dec-14A
262.6
0.0
262.6
(57.4)
205.2
0.0
(13.6)
(2.7)
0.0
189.0
(4.1)
184.9
(32.7)
217.4
(2.5)
81.8
448.9
(0.0)
0.0
0.0
448.8
249.2
Dec-15F
272.7
0.0
272.7
(58.8)
213.9
0.0
(15.6)
(3.5)
0.0
194.8
(4.1)
190.7
(30.0)
102.5
0.0
0.5
263.6
(0.0)
0.0
0.0
263.6
261.2
Dec-16F
287.6
0.0
287.6
(63.2)
224.4
0.0
(15.6)
(3.5)
0.0
205.3
(0.5)
204.8
(31.5)
131.7
0.0
0.5
305.5
(0.0)
0.0
0.0
305.4
272.7
Dec-17F
302.5
0.0
302.5
(67.4)
235.1
0.0
(15.6)
(3.5)
0.0
216.0
(0.5)
215.5
(33.0)
135.7
0.0
0.5
318.8
(0.0)
0.0
0.0
318.7
284.6
Dec-13A
374.6
59.7
19.2
(0.0)
(144.2)
309.3
(0.0)
(0.6)
(61.2)
(61.9)
(11.2)
38.0
(224.1)
(60.2)
(257.5)
(10.0)
249.8
177.2
Dec-14A
448.9
(178.0)
(4.6)
(0.0)
(77.8)
188.5
0.0
(30.1)
81.5
51.5
50.3
0.0
(242.8)
(30.5)
(223.0)
17.0
240.2
259.8
Dec-15F
263.6
(68.4)
1.8
(0.0)
9.6
206.6
0.0
(0.5)
88.8
88.3
80.0
0.0
(254.5)
(35.0)
(209.4)
85.5
298.0
345.0
Dec-16F
305.5
(99.7)
2.7
(0.0)
9.6
218.0
0.0
(0.5)
91.4
90.9
60.0
0.0
(265.7)
(42.4)
(248.1)
60.7
311.9
337.4
Dec-17F
318.8
(102.3)
2.7
(0.0)
9.6
228.8
0.0
(0.5)
94.2
93.8
70.0
0.0
(277.3)
(45.5)
(252.8)
69.8
325.8
359.5
Cash Flow
(S$m)
Pre-tax Profit
Tax Paid
Others
Capex
Dividends Paid
77
BY THE NUMBERS
Balance Sheet
(S$m)
Total Investments
Intangible Assets
Inventories
Trade Debtors
Trade Creditors
Short-term Debt
Minority Interests
Total Equity
Dec-13A
7,090
8
2
7,100
104
0
15
0
118
97
0
18
116
2,061
129
2,190
4,913
0
Dec-15F
6,375
1
1
6,378
187
0
38
0
225
49
0
11
61
1,320
69
1,389
5,153
0
Dec-16F
6,375
1
1
6,378
247
0
38
0
286
52
0
11
63
1,380
69
1,449
5,151
0
Dec-17F
6,375
1
1
6,378
317
0
38
0
355
55
0
11
66
1,450
69
1,519
5,148
0
5,153
5,153
5,151
5,148
Dec-13A
3.0%
0.3%
76.6%
1.25%
4.35
0.005%
62.5%
1.02
1.02
0.90
5.27%
Dec-14A
(32.1%)
(30.8%)
78.2%
3.95%
5.07
0.011%
55.5%
0.42
0.42
0.31
6.53%
Dec-15F
3.9%
4.2%
78.4%
4.72%
5.78
0.011%
99.1%
3.71
3.71
3.08
4.02%
Dec-16F
5.4%
4.9%
78.0%
4.20%
5.93
0.011%
89.3%
4.51
4.51
3.91
4.60%
Dec-17F
5.2%
4.8%
77.7%
4.15%
5.95
0.011%
89.3%
5.39
5.39
4.81
4.76%
Dec-13A
8.1
N/A
N/A
N/A
94.1%
6,959.8
N/A
Dec-14A
8.2
N/A
N/A
N/A
99.6%
4,882.4
N/A
Dec-15F
8.4
N/A
N/A
N/A
99.6%
4,946.3
N/A
Dec-16F
8.8
N/A
N/A
N/A
99.6%
4,946.3
N/A
Dec-17F
9.2
N/A
N/A
N/A
99.6%
4,946.3
N/A
4,913
Dec-14A
6,375
5
1
6,382
101
0
38
0
139
47
270
11
329
970
69
1,039
5,153
0
Key Ratios
NPI Growth
DPS Growth
Effective Tax Rate
Current Ratio
Quick Ratio
Cash Ratio
Key Drivers
RevPAR (S$)
Occupancy (%)
78
Company Note
Singapore
CapitaLand Mall Trust
ADD (no change)
Newly acquired Bedok Mall to contribute from

4Q15 onwards
Current price:
Target price:
Previous target:
Up/downside:
S$1.91
S$2.28
S$2.28
19.4%
Reuters:
Bloomberg:
Market cap:
CMLT.SI
CT SP
US$4,787m
S$6,764m
US$9.70m
S$13.65m
3,462m
70.0%

Current shares o/s
Free float:
CT was affected by ongoing AEI works and lower occupancy, offset by lower
operating expenses and reduced interest charges.
Portfolio occupancy dipped to 96.8% on enhancement works. Post-completion, we

expect AEIs to be accretive.
Notwithstanding the anaemic retail spending, CTs malls produced shopper traffic
and tenant sales growth in 3Q15.
New contributions to be felt from Bedok Mall; recent divestment of Rivervale Mall
improves financial flexibility.
Maintain Add call, with an unchanged DDM-based target price.
Flat NPI
CTs NPI was flat yoy as lower contributions from IMM, JCube and Clarke Quay was
offset by lower property expenses, particularly from utilities and reduced interest charges
(on lower financing costs). There was also a release of income retained earlier.
No change.
AEIs to hold up rents

Price Close
2.300
114.0
2.200
110.8
2.100
107.6
2.000
104.4
1.900
101.2
1.800
30
98.0
Better shopper traffic and tenant sales growth
Vol m
20
10
Dec-14
As at end-Sep 15, portfolio occupancy was down 2% pts qoq to 96.8% due to assetenhancement works and reconfiguration works at IMM, Bukit Panjang Plaza, Clarke
Quay and JCube. Post these makeover activities, we expect occupancy to improve.
AEIs completed include the conversion of L5 open roof to a new education hub at
Tampines Mall. H&M also opened its store in the mall, its first in the eastern part of
Singapore.
Mar-15
Jun-15
Sep-15
Source: Bloomberg
Price performance
Absolute (%)
Relative (%)
1M
-2.8
1.7
3M
1.6
1.9
12M
-3.5
9.3
The leasing environment remains competitive, with rental reversions averaging a lower
4.1% in 3Q15 vs. 4.6% in 2Q15. However, tenant sales expanded 4.4% yoy for 9M15,
with 3Q showing stronger estimated growth of 7.9%. Shopper traffic also grew 4.2% for
9M, with 3Q performance coming in at an estimated stronger 5.8%. With a remaining
4.9% and a further 27.5% of rental income to be renewed in 4QFY15 and FY16
respectively, we anticipate the earnings outlook to remain stable.
New contributions from Bedok Mall to be felt from 4Q15 onwards

Going into 4QFY15, we expect earnings to be lifted by a full quarters contributions from
the recent acquisition of Bedok Mall. The mall was purchased at an FY14 NPI yield of
5.1%, with potential reversion upside from its first rental renewal cycle from FY17
onwards. CT also announced the divestment of Rivervale Mall for S$190.5m or at a 64%
premium over its latest book value. This should improve the groups financial flexibility,
including giving it the ability to pare down gearing.
Maintain Add rating

We maintain our Add rating with an unchanged DDM-based target price of S$2.28. A rerating catalyst could come from reassessing its options for Funan Mall. Apart from
selling it, the trust could redevelop the property to optimise the unutilised GFA.
[X]
Financial Summary
Analyst
LOCK Mun Yee
T (65) 6210 8606

Net Profit (S$m)
Core EPS (S$)
Core EPS Growth
FD Core P/E (x)
DPS (S$)
Dividend Yield
Asset Leverage
BVPS (S$)
P/BV (x)
Recurring ROE
Dec-13A
637.6
438.7
397.1
356.2
0.11
35.8%
16.63
0.10
5.38%
30.4%
1.74
1.10
6.78%
Dec-14A
658.9
448.4
614.0
375.3
0.13
13.7%
14.62
0.11
5.68%
32.1%
1.81
1.05
7.35%
Dec-15F
660.6
452.5
460.6
387.6
0.13
1.9%
14.36
0.11
5.86%
32.5%
1.81
1.05
7.33%
1.02
Dec-16F
720.6
493.6
407.2
408.4
0.12
(12.5%)
16.41
0.12
6.05%
32.8%
2.02
0.95
6.07%
0.99
Dec-17F
746.1
511.1
432.3
427.5
0.12
5.1%
15.62
0.12
6.33%
32.9%
2.02
0.95
6.05%
1.03

Powered by
EFA
BY THE NUMBERS
Share price info

Share px perf. (%)
1M
3M
12M
Relative
1.7
1.9
9.3
Absolute
-2.8
1.6
-3.5
Major shareholders
CapitaLand
% held
30.0
Capital Research
7.7
Capital Group
7.0
1.600
1.400
1.200
1.000
0.800
0.600
0.400
0.200
0.000
40.0%
35.0%
30.0%
25.0%
20.0%
15.0%
10.0%
5.0%
0.0%
0.1400
7.00%
0.1200
6.00%
0.1000
5.00%
0.0800
4.00%
0.0600
3.00%
0.0400
2.00%
0.0200
1.00%
0.0000
0.00%
DPS (lhs)
Profit & Loss

(S$m)
Rental Revenues
Other Revenues
Net Property Income
Management Fees
Trustee's Fees
EBITDA
EBIT
Net Interest Income
Associates' Profit
Exceptional Items
Pre-tax Profit
Taxation
Minority Interests
Preferred Dividends
Net Profit
Dec-13A
637.6
0.0
637.6
(198.9)
438.7
0.0
(39.0)
(3.7)
0.0
396.0
0.0
396.0
(102.7)
104.2
0.0
397.6
(0.5)
0.0
0.0
397.1
356.2
Dec-14A
658.9
0.0
658.9
(210.5)
448.4
0.0
(41.7)
(4.6)
0.0
402.1
0.0
402.1
(99.3)
149.2
0.0
162.0
614.0
(0.0)
0.0
0.0
614.0
375.3
Dec-15F
660.6
0.0
660.6
(208.1)
452.5
0.0
(45.3)
(4.5)
0.0
402.7
0.0
402.7
(91.4)
77.3
72.0
0.0
460.6
0.0
0.0
0.0
460.6
387.6
Dec-16F
720.6
0.0
720.6
(227.0)
493.6
0.0
(49.5)
(4.9)
0.0
439.2
0.0
439.2
(110.8)
78.8
0.0
0.0
407.2
0.0
0.0
0.0
407.2
408.4
Dec-17F
746.1
0.0
746.1
(235.0)
511.1
0.0
(49.6)
(4.9)
0.0
456.6
0.0
456.6
(104.9)
80.6
0.0
0.0
432.3
0.0
0.0
0.0
432.3
427.5
Dec-13A
397.6
(1.5)
18.2
(0.1)
(169.7)
244.5
(99.3)
(32.2)
60.4
(71.1)
(181.4)
(1.5)
(340.7)
(99.1)
(622.7)
(449.2)
177.6
(107.1)
Dec-14A
614.0
(50.0)
5.7
(0.5)
(162.0)
407.3
(64.7)
11.6
96.6
43.5
320.3
(5.1)
(370.3)
(97.5)
(152.5)
298.3
457.9
673.6
Dec-15F
460.6
(57.9)
0.6
0.0
0.0
403.3
(38.0)
(1.2)
0.0
(39.2)
45.2
0.0
(387.6)
(91.4)
(433.8)
(69.7)
378.7
317.9
Dec-16F
407.2
32.0
19.8
0.0
3.0
462.0
(38.0)
186.7
0.0
148.7
479.9
0.0
(408.4)
(110.8)
(39.3)
571.4
625.5
979.8
Dec-17F
432.3
24.3
8.4
0.0
0.0
465.0
(20.0)
(1.3)
0.0
(21.3)
20.0
0.0
(427.5)
(104.9)
(512.4)
(68.7)
466.9
358.8
Cash Flow
(S$m)
Pre-tax Profit
Tax Paid
Others
Capex
Dividends Paid
80
BY THE NUMBERS
Balance Sheet
(S$m)
Total Investments
Intangible Assets
Inventories
Trade Debtors
Trade Creditors
Short-term Debt
Minority Interests
Total Equity
Dec-13A
8,362
0
7
8,369
830
0
22
0
851
183
498
6
687
2,307
218
2,525
6,009
0
6,009
Dec-14A
8,644
0
60
8,704
1,130
0
25
0
1,155
217
762
36
1,016
2,407
153
2,560
6,282
0
6,282
Dec-15F
8,682
0
60
8,742
1,138
0
25
0
1,163
218
0
36
254
3,215
153
3,368
6,283
0
Dec-16F
9,384
0
60
9,444
1,790
0
25
0
1,815
238
0
36
274
3,694
153
3,848
7,137
0
Dec-17F
9,404
0
60
9,464
1,803
0
25
0
1,828
246
0
36
282
3,714
153
3,868
7,142
0
6,283
7,137
7,142
Key Ratios
NPI Growth
DPS Growth
Effective Tax Rate
Current Ratio
Quick Ratio
Cash Ratio
Dec-13A
(3.63%)
(1.47%)
68.8%
8.56%
3.71
0.126%
90%
1.24
1.24
1.21
4.16%
Dec-14A
3.33%
2.20%
68.1%
5.55%
3.53
0.006%
61%
1.14
1.14
1.11
6.44%
Dec-15F
0.26%
0.92%
68.5%
3.28%
3.80
0.000%
84%
4.58
4.58
4.48
4.66%
Dec-16F
9.09%
9.09%
68.5%
3.21%
3.50
0.000%
100%
6.63
6.63
6.54
3.85%
Dec-17F
3.54%
3.54%
68.5%
4.67%
3.56
0.000%
99%
6.48
6.48
6.39
3.83%
Dec-13A
11.7
N/A
N/A
N/A
84.6%
N/A
N/A
Dec-14A
12.3
N/A
N/A
N/A
85.8%
N/A
N/A
Dec-15F
10.5
N/A
N/A
N/A
83.5%
N/A
N/A
Dec-16F
11.1
N/A
N/A
N/A
85.0%
N/A
N/A
Dec-17F
11.4
N/A
N/A
N/A
85.3%
N/A
N/A
Key Drivers
RevPAR (S$)
Occupancy (%)
81
Company Note
Singapore
CDL Hospitality Trust
ADD (no change)
Weak Singapore & Maldives priced in
Current price:
Target price:
Previous target:
Up/downside:
S$1.32
S$1.59
S$1.59
20.2%
Reuters:
Bloomberg:
Market cap:
CDLT.SI
CDREIT SP
US$922.3m
S$1,303m
US$1.02m
S$1.43m
982.2m
67.0%

Current shares o/s
Free float:
No change.
104.4
1.60
97.3
1.40
90.1
1.20
15
83.0
Vol m
10
5
Mar-15
Jun-15
Sep-15
Source: Bloomberg
Price performance
Absolute (%)
Relative (%)
1M
-4.0
0.5
But offset by growth in Japan and new income from Hilton Cambridge.
Offering investors a dividend yield of 8%, we believe that weakness in Singapore
and Maldives has been priced in. Maintain Add with unchanged DDM-based TP.
Singapore and ANZ continue to be a drag

CDL-HT reported a 2.6% yoy decline in NPI (S$99.2m) for 9M15 as maiden income from
Japan hotels, higher NPI from Maldives (US$ strength) and increased rental income
from Claymore Connect were eroded by weak demand in Singapore and ANZ (Australia
New Zealand) as well as a one-off trust expense from the acquisition of the Cambridge
City Hotel in the UK.
Singapore operating conditions remain competitive
Weak outlook for Maldives
1.80
Dec-14
A mixed bag: Singapore, ANZ and Maldives continue to be weak.
Singapore hotel operating conditions remain challenging, with 9M15 RevPAR sliding
6.4% yoy to S$176. While occupancy remained resilient, averaging 88.2%, room rates
remained soft on new supply and weaker corporate demand (-6.1% yoy to S$199). On a
qoq basis, we believe that we could have seen some stabilisation as 3Q15 was 4.6%
higher qoq. Management guided that Oct RevPar was 1.4% higher yoy. Claymore
Connect is now 81% occupied and is expected to deliver steady recurrent income.
Price Close
3M
0.0
0.3
12M
-23.5
-10.7
Overseas contributions have been and will likely continue to be affected by FX volatility.
Weakness in the resources sector will continue to weigh on demand at hotels in
Australia (its 9M15 NPI is down 10% yoy). Maldives hotels reported an 18.3% decline in
RevPAR and are likely to remain adversely affected by slower tourist arrivals due to the
slowdown in Chinese luxury travel and weakening of the Russian rouble. The underlying
weakness in Maldives was only offset by the strong US dollar (its 9M15 NPI rose 6%
yoy).
...offset by growth in Japan and income from Hilton Cambridge

Japan hotels experienced a 30.9% jump in RevPAR in 3Q and the strong foreign tourist
arrival outlook will continue to underpin the upbeat performance in the country. Maiden
contributions from Cambridge City Hotel UK will be felt in 4Q15. CDL-HT plans to
rebrand this hotel into the Hilton Cambridge in Dec 2015 and we anticipate this to further
boost the hotels trading performance. The hotel was purchased at an annualised 1H15
NPI yield of c.5.6%, with scope to increase 6-7% post a recent AEI.
Weak Singapore and Maldives priced in, maintain Add

Offering investors a dividend yield of 8%/8.4% for FY15/16, we believe that underlying
weakness in Singapore and Maldives has been priced in. A stronger-than-expected
performance from Japan and contribution from Hilton Cambridge could catalyse the
stock. We maintain our Add call with an unchanged DDM-based target price.
[X]
Financial Summary
Analyst
LOCK Mun Yee
T (65) 6210 8606

Net Profit (S$m)
Core EPS (S$)
Core EPS Growth
FD Core P/E (x)
DPS (S$)
Dividend Yield
Asset Leverage
BVPS (S$)
P/BV (x)
Recurring ROE
Dec-13A
148.8
137.4
140.3
106.7
0.11
(3.37%)
12.30
0.11
8.31%
29.6%
1.63
0.81
6.61%
Dec-14A
166.8
140.5
122.5
107.6
0.11
(0.06%)
12.31
0.11
8.32%
31.6%
1.65
0.80
6.54%
Dec-15F
174.8
143.6
100.9
103.1
0.10
(4.55%)
12.89
0.10
7.90%
35.1%
1.65
0.80
6.20%
0%
1.01
Dec-16F
190.6
153.8
107.2
109.8
0.11
5.63%
12.20
0.11
8.37%
34.9%
1.66
0.80
6.53%
0%
1.03
Dec-17F
194.7
155.6
108.9
111.5
0.11
1.04%
12.08
0.11
8.45%
34.6%
1.67
0.79
6.57%
0%
1.03

Powered by
EFA
BY THE NUMBERS
Share price info

Share px perf. (%)
1M
3M
Relative
0.5
0.3
Absolute
-4.0
0.0
Major shareholders
Hospitality Holdings Pte Ltd
12M
-10.7
-23.5
% held
32.8
Aberdeen Investment
4.4
Bank of America
4.4
1.60
1.40
1.20
1.00
0.80
0.60
0.40
0.20
0.00
40.0%
35.0%
30.0%
25.0%
20.0%
15.0%
10.0%
5.0%
0.0%
0.1140
0.1120
0.1100
0.1080
0.1060
0.1040
0.1020
0.1000
0.0980
0.0960
DPS (lhs)
8.80%
8.62%
8.44%
8.27%
8.09%
7.91%
7.73%
7.56%
7.38%
7.20%
Profit & Loss

(S$m)
Rental Revenues
Other Revenues
Net Property Income
Management Fees
Trustee's Fees
EBITDA
EBIT
Net Interest Income
Associates' Profit
Exceptional Items
Pre-tax Profit
Taxation
Minority Interests
Preferred Dividends
Net Profit
Dec-13A
148.8
0.0
148.8
(11.4)
137.4
0.0
(12.4)
(0.3)
(1.7)
123.1
0.0
123.1
(16.6)
0.0
0.0
36.6
143.0
(2.7)
0.0
0.0
140.3
106.7
Dec-14A
166.8
0.0
166.8
(26.3)
140.5
0.0
(12.9)
(0.3)
(4.7)
122.7
0.0
122.7
(16.4)
0.0
0.0
17.6
123.9
(1.4)
0.0
0.0
122.5
107.6
Dec-15F
174.8
0.0
174.8
(31.2)
143.6
0.0
(14.5)
(0.3)
(1.9)
126.9
0.0
126.9
(24.1)
0.0
0.0
0.0
102.8
(1.9)
0.0
0.0
100.9
103.1
Dec-16F
190.6
0.0
190.6
(36.7)
153.8
0.0
(14.6)
(0.3)
(1.9)
137.1
0.0
137.1
(26.9)
0.0
0.0
0.0
110.2
(3.0)
0.0
0.0
107.2
109.8
Dec-17F
194.7
0.0
194.7
(39.1)
155.6
0.0
(14.6)
(0.3)
(1.9)
138.8
0.0
138.8
(26.8)
0.0
0.0
0.0
112.0
(3.1)
0.0
0.0
108.9
111.5
Dec-13A
143.0
16.6
(5.0)
(2.7)
(23.5)
128.4
(6.2)
(86.8)
0.4
(92.6)
158.4
0.0
(106.7)
(17.1)
34.7
70.6
36.3
177.7
Dec-14A
123.9
16.4
3.8
(1.4)
(3.3)
139.4
(27.4)
(65.5)
0.3
(92.6)
154.1
(0.9)
(105.6)
(86.6)
(39.1)
7.7
47.2
184.6
Dec-15F
102.8
24.1
(7.0)
(1.9)
14.2
132.2
(6.9)
(133.2)
0.6
(139.5)
135.3
0.0
(103.1)
(22.0)
10.2
2.8
(6.7)
103.9
Dec-16F
110.2
26.9
2.7
(3.0)
15.3
152.0
(7.4)
0.0
0.7
(6.7)
0.0
0.0
(109.8)
(24.6)
(134.4)
11.0
146.0
118.5
Dec-17F
112.0
26.8
0.7
(3.1)
15.5
152.0
(7.4)
0.0
0.8
(6.6)
0.0
0.0
(111.5)
(24.7)
(136.1)
9.2
146.1
118.6
Cash Flow
(S$m)
Pre-tax Profit
Tax Paid
Others
Capex
Dividends Paid
83
BY THE NUMBERS
Balance Sheet
(S$m)
Total Investments
Intangible Assets
Inventories
Trade Debtors
Trade Creditors
Short-term Debt
Minority Interests
Total Equity
Dec-13A
2,239
0
0
2,239
68
0
16
0
84
22
146
0
168
542
17
559
1,595
0
Dec-15F
2,429
0
67
2,496
75
0
22
0
97
29
317
0
347
593
19
612
1,633
0
Dec-16F
2,436
0
67
2,503
86
0
22
0
108
32
317
0
350
593
19
612
1,649
0
Dec-17F
2,443
0
67
2,510
95
0
22
0
117
33
317
0
350
593
19
612
1,665
0
1,619
1,633
1,649
1,665
Dec-13A
(0.5%)
(1.37%)
92.3%
(3.09%)
7.22
1.88%
76%
0.50
0.50
0.40
6.30%
Dec-14A
12.1%
2.28%
84.2%
0.09%
6.99
1.15%
88%
0.27
0.27
0.20
5.13%
Dec-15F
4.8%
2.17%
82.1%
(4.97%)
5.13
1.89%
102%
0.28
0.28
0.22
4.00%
Dec-16F
9.0%
7.14%
80.7%
5.85%
4.97
2.73%
102%
0.31
0.31
0.25
4.12%
Dec-17F
2.2%
1.16%
79.9%
0.94%
5.03
2.77%
102%
0.33
0.33
0.27
4.16%
Dec-13A
N/A
N/A
193.5
N/A
87.4%
2,238.8
N/A
Dec-14A
N/A
N/A
194.9
N/A
86.9%
2,288.5
N/A
Dec-15F
N/A
N/A
179.9
N/A
87.9%
2,428.6
N/A
Dec-16F
N/A
N/A
177.9
N/A
87.9%
2,435.9
N/A
Dec-17F
N/A
N/A
175.9
N/A
87.9%
2,443.3
N/A
1,595
Dec-14A
2,288
0
67
2,356
72
0
22
0
94
36
317
1
355
458
19
476
1,619
0
Key Ratios
NPI Growth
DPS Growth
Effective Tax Rate
Current Ratio
Quick Ratio
Cash Ratio
Key Drivers
RevPAR (S$)
Occupancy (%)
84
EnvironmentalSingaporeEquity researchDecember 9, 2015
Company Note
Singapore
ADD (no change)
Bright future for China water sector
Current price:
Target price:
Previous target:
Up/downside:
S$0.67
S$0.94
S$0.94
40.7%
Reuters:
Bloomberg:
Market cap:
CEWL.SI
CEWL SP
US$1,228m
S$1,734m
US$0.94m
S$1.32m
2,608m
17.6%

Current shares o/s
Free float:
No change
On track to becoming top-tier market player with 10mt/d by 2020.
Further stimulus from Chinas 13 5-year plan and Water 10 Plan.
Maintain Add with TP of S$0.94. Strong project pipeline to sustain earnings growth.
SOE-backed CEWL is poised to gain access to new projects through industry

consolidation and release of water assets by municipal governments.
th
VAT rebate reduction (wef Jul 15) will adversely affect operation income, but can be
mitigated through higher water tariffs.
On track to becoming top-tier water player with 10mt/d by 2020

Since the RTO of HanKore in Dec 14, CEWL has proven it is on track to achieving its
target of 10mt/d of water assets by 2020, via a sizeable acquisition of Dalian Dongda
Water (1.125mt/d) and other smaller project wins (mix of BOT/ TOT) in 2015. This
increases its designed capacity from 3.4mt/d to 4.6mt/d, with further expansion to drive
3-year EPS growth of 22.7%. The market leader, Beijing Enterprises Water, currently
owns 23mt/d of assets.
Highly-fragmented industry with increasing competition

Price Close
1.10
115.9
0.90
101.6
0.70
87.3
0.50
30
73.0
Vol m
Favourable industry policies: 13th 5-year Plan and Water 10 Plan

th
20
10
Dec-14
Chinas water sector remains highly fragmented, with the top 10 municipal WWT players
making up c.25% of market share. 50% of water assets are still owned by municipal
governments. With the push towards greater PPPs and higher environmental standards,
we see potential in CEWL with its SOE-backing to benefit from industry consolidation
and release of water projects. A risk is intensifying competition among peers which may
weigh on project IRRs (8-10% for municipal projects) and the bidding process.
Mar-15
Jun-15
Sep-15
Source: Bloomberg
Price performance
Absolute (%)
Relative (%)
1M
-7.6
-3.1
3M
-0.8
-0.5
12M
-31.8
-19.0
In a consultation document for the 13 5-year plan, we noted stricter requirements for
water standards to be complied with by 2017. Should this be implemented in 2016, it will
drive significant upgrading works as c.27% of combined capacity(1.26mt/d) have not met
the highest Grade 1A standard. These, in turn should substantiate water tariff hikes,
which we have already seen in some projects.
Effective Jul 15, VAT rebate reduced from 100% to 70%

A negative surprise came from the State Administration of Taxation in China when it
lowered the VAT rebate from 100% to 70% (based on 17% standard VAT rate), effective
Jul 15. CEWL estimates that it would have a c.5% downward impact on its 2H15 net
profit, which could be offset through negotiating for higher water tariffs.
Reiterate Add with strong project pipeline

CEWLs project pipeline remains strong, with 0.185mt/d of projects under construction
and 0.650mt/d in preparation. The recently-proposed share premium reduction may
pave the way for future dividends. FY15 forecast net gearing is c.41%, signifying
leverage potential to improve ROE. Ties with China Everbright International (SOE) and
IFC have also brought about more affordable financial resources to bring down overall
financing costs. Maintain Add with a DCF-based target price of S$0.94 (WACC: 6%).
[X]
Financial Summary
Analysts
NGOH Yi Sin
T (65) 6210 8604
E yisin.ngoh@cimb.com
Roy CHEN
T (65) 6210 8685
E roy.chen@cimb.com
Keith LI
T (852) 2532 1110
E keith.li@cimb.com
Revenue (HK$m)
Operating EBITDA (HK$m)
Net Profit (HK$m)
Core EPS (HK$)
Core EPS Growth
FD Core P/E (x)
DPS (HK$)
Dividend Yield
EV/EBITDA (x)
P/FCFE (x)
Net Gearing
P/BV (x)
ROE
Dec-13A
1,291
481
266.5
0.14
0.0%
26.56
0%
16.63
NA
28.8%
4.29
Dec-14A
1,051
534
292.8
0.15
7.4%
24.74
0%
16.13
14.3
17.5%
1.43
7.34%
Dec-15F
1,906
738
391.2
0.15
4.1%
23.76
0%
17.20
NA
41.2%
1.29
5.71%
0.99
Dec-16F
3,019
1,145
578.8
0.22
44.5%
16.44
0%
13.21
121.3
64.7%
1.20
7.55%
1.05
Dec-17F
3,567
1,453
709.4
0.27
22.6%
13.41
0%
11.98
42.2
84.3%
1.10
8.54%
1.04

Powered
by EFA
BY THE NUMBERS
Share price info

Share px perf. (%)
1M
3M
12M
Relative
-3.1
-0.5
-19.0
Absolute
-7.6
-0.8
-31.8
Major shareholders
% held
China Everbright Wat
74.4
Huei Alan Wang Yu
3.1
Dalvey Asset Holding
2.7
P/BV vs ROE
9.0
8.0
7.0
6.0
5.0
4.0
3.0
2.0
1.0
0.0
Jan-11
8.00%
7.11%
6.22%
5.33%
4.44%
3.56%
2.67%
1.78%
0.89%
0.00%
Jan-12
Jan-13
Jan-14
Jan-15
Jan-16

Growth
60.0
50.0%
50.0
41.7%
40.0
33.3%
30.0
25.0%
20.0
16.7%
10.0
8.3%
0.0
0.0%
ROE (rhs)
Profit & Loss

(HK$m)
Total Net Revenues
Gross Profit
Operating EBITDA
Operating EBIT
Exceptional Items
Pre-tax Profit
Taxation
Profit After Tax
Minority Interests
Preferred Dividends
Net Profit
Dec-13A
1,291
529
481
(17)
463
(72)
0
10
402
Dec-14A
1,051
596
534
(24)
510
(90)
0
13
433
Dec-15F
1,906
857
738
(71)
667
(127)
0
41
581
Dec-16F
3,019
1,285
1,145
(71)
1,074
(257)
0
41
859
Dec-17F
3,567
1,614
1,453
(71)
1,382
(368)
0
41
1,055
402
(112)
433
(119)
581
(165)
859
(249)
1,055
(306)
290
(24)
314
(21)
415
(24)
610
(31)
749
(40)
266
266
266
293
293
293
391
391
391
579
579
579
709
709
709
Cash Flow
Negative FCF for the first few years

due to capital- intensive nature of
water business.
(HK$m)
EBITDA
Tax Paid
Capex
Shares Repurchased
Dividends Paid
Preferred Dividends
Dec-13A
481
Dec-14A
534
Dec-15F
738
Dec-16F
1,145
Dec-17F
1,453
(190)
(1)
10
(173)
8
13
(290)
0
41
(899)
0
41
(1,092)
0
41
(72)
(56)
172
(12)
(90)
(65)
226
(3)
(127)
(165)
196
(2,856)
(257)
(249)
(218)
(1,971)
(368)
(306)
(271)
(1,971)
432
(12)
(228)
0
428
(149)
0
(2,856)
1,737
660
(1,971)
2,268
0
(1,971)
2,468
0
140
(88)
72
(69)
238
(247)
(396)
259
506
747
(127)
2,271
(389)
(923)
(2,533)
0
2,268
78
78
(1,932)
0
2,468
225
225
(1,875)
86
BY THE NUMBERS
Balance Sheet
Receivables grow as a result of

increasing capex (mix of acquisitions
and BOT/ TOT projects)
(HK$m)
Total Debtors
Inventories
Fixed Assets
Total Investments
Intangible Assets
Short-term Debt
Total Creditors
Total Provisions
Total Liabilities
Minority Interests
Total Equity
Dec-13A
290
720
7
4
1,022
170
0
158
4,041
4,369
278
Dec-14A
681
999
29
0
1,709
174
0
1,994
6,235
8,403
763
Dec-15F
292
1,526
105
0
1,923
174
0
1,944
9,088
11,206
763
Dec-16F
370
2,076
189
0
2,635
174
0
1,894
11,731
13,799
763
Dec-17F
595
2,449
189
0
3,233
174
0
1,844
14,400
16,418
763
642
0
920
586
619
23
1,405
1,062
951
23
1,737
2,672
1,379
23
2,165
4,940
1,379
23
2,165
7,407
1,587
2,174
306
3,399
1,649
343
1,991
264
1,326
829
3,560
6,325
226
6,551
264
2,937
829
5,502
7,377
250
7,626
264
5,204
829
8,198
7,955
281
8,236
264
7,672
829
10,666
8,665
321
8,985
Dec-13A
0.0%
0.0%
37.2%
(0.30)
0.85
5.88
27.7%
NA
119.4
3.43
297.2
7.80%
N/A
N/A
Dec-14A
(18.6%)
11.1%
50.8%
(0.46)
2.54
5.53
27.5%
NA
162.8
14.49
490.0
8.58%
8.28%
4.92%
Dec-15F
81.4%
38.1%
38.7%
(1.21)
2.83
5.25
28.5%
NA
117.4
23.32
266.2
5.69%
6.32%
4.39%
Dec-16F
58.4%
55.3%
37.9%
(2.04)
3.05
4.19
29.0%
NA
101.7
31.10
241.8
6.79%
8.06%
5.43%
Dec-17F
18.2%
26.9%
40.7%
(2.90)
3.32
3.76
29.0%
NA
102.8
35.39
254.0
7.07%
8.44%
5.68%
Dec-13A
N/A
0.0%
N/A
N/A
N/A
0.0%
Dec-14A
N/A
819.9%
N/A
N/A
N/A
2.2%
Dec-15F
N/A
1012.8%
N/A
N/A
N/A
4.3%
Dec-16F
N/A
-11.8%
N/A
N/A
N/A
4.2%
Dec-17F
N/A
0.0%
N/A
N/A
N/A
4.5%
Key Ratios
EBITDA margins fluctuate depending
on the mix of construction vs
operation/ finance income (higher
margins)
Revenue Growth
Net Cash Per Share (HK$)
BVPS (HK$)
Effective Tax Rate
Inventory Days
ROIC (%)
ROCE (%)
Key Drivers
Capex growth and water tariff growth
rates are the key drivers
ASP (% chg, main prod./serv.)

Unit sales grth (%, main prod./serv.)
Util. rate (%, main prod./serv.)
ASP (% chg, 2ndary prod./serv.)
Unit sales grth (%,2ndary prod/serv)
Util. rate (%, 2ndary prod/serv)
87
Toll RoadsSingaporeEquity researchDecember 9, 2015
Company Note
China Merchants Holdings

Pacific
Singapore
ADD (no change)

Current price:
Target price:
Previous target:
Up/downside:
S$0.91
S$1.02
S$1.02
13.1%
Reuters:
Bloomberg:
Market cap:
CAEP.SI
CMH SP
US$1,150m
S$1,624m
US$0.57m
S$0.80m
1,795m
18.1%

Current shares o/s
Free float:
No change.
Still a preferred platform for toll investment
Being the only toll company with exposure to multiple provinces in China, CMHP
remains our preferred platform of toll investment.
We believe CMHP would continue to see strong support from China Merchant
Group (CMG), one of the top 10 SOEs directly under Chinas central government.
Our FY15-17F EPS have incorporated stepped-up interest cost, from 2.8% in FY15
to 3.5% in FY16, to 4.0% in FY17, to reflect the impact of potential Fed rate hikes.
Maintain Add with a TP of S$1.02 (based on CY16 residual income value).
The only toll company with multi-province exposure

Being the only toll company with exposure to multiple provinces, CMHP can be more
selective in choosing its investment targets. This, in our view, is a key advantage against
its provincial SOE peers whose investments are confined within their home provinces.
CMHP also has the flexibility to adopt a longer investment horizon and capitalize on the
opportunities when private investors who are under financial stress decide to sell off
their toll investments at bargain prices.
Strong heritage and support from parent CMG

Price Close
1.200
122.7
1.100
116.0
1.000
109.3
0.900
102.7
0.800
6
96.0
With a 76% stake in CMHP, CMG is one of Chinas 10 largest central government
SOEs. We see CMHP as a key beneficiary from CMGs wide footprint across China
(CMG has a toll investment portfolio with total length of c.6,700 km in 16 provinces in
China). CMHP has also been receiving strong financial support from CMG, as evidenced
by CMGs irrevocable undertaking of full subscription of CMHPs 1-for-2 preferential
offering (at S$1.00 per share) related to the recent acquisition of three toll roads.
Vol m
More diversified toll portfolio with traffic growth potential
2
Dec-14
Mar-15
Jun-15
Sep-15
Source: Bloomberg
Price performance
Absolute (%)
Relative (%)
1M
-6.2
-1.7
3M
-0.6
-0.3
12M
-6.7
6.1
CMH completed the acquisitions of Yangping in Sep 2015, Guixing and Guiyang in Oct
2015. After the acquisitions, the number of toll roads of CMHPs portfolio has increased
from five to eight and the average remaining concession period of the portfolio increased
from previously 13.6 years to 16.0 years. According to a traffic consultants report, the
traffic volume of the three new toll roads is expected to grow by a five-year CAGR of
15% in FY15-20.
Higher interest cost ahead, but can be comfortably managed

We estimate that CMHPs net gearing would ascend to 68% by end-15 (end-14: 36%),
due to the debt financing related to the above acquisitions. CMHP should be able to
comfortably service its debt, with its FY16-18F interest coverage at above 6x. Our FY1517F EPS have duly incorporated a step-up effective interest cost, from 2.8% in FY15, to
3.5% in FY16, and to 4.0% in FY17, to reflect the impact from the US rate hike.
Maintain Add with a target price of S$1.02

We maintain our Add call on CMHP, with a TP of S$1.02, based on CY16 residual
income value. We believe the negatives from rising interest cost have been priced in.
Potential traffic volume growth at the three newly acquired toll roads is a key re-rating
catalyst. We expect CMHP would continue paying out attractive dividend yield of 6.6% in
FY16.
[X]
Financial Summary
Analysts
Roy CHEN
T (65) 6210 8685
E roy.chen@cimb.com
William TNG, CFA
T (65) 6210 8676
Revenue (HK$m)
Operating EBITDA (HK$m)
Net Profit (HK$m)
Core EPS (HK$)
Core EPS Growth
FD Core P/E (x)
DPS (HK$)
Dividend Yield
EV/EBITDA (x)
P/FCFE (x)
Net Gearing
P/BV (x)
ROE
Dec-13A
1,886
1,462
607.5
0.71
40.9%
9.45
0.38
7.68%
6.34
9.51
28.6%
0.70
11.8%
Dec-14A
2,019
1,627
735.7
0.68
(4.4%)
9.18
0.38
7.68%
6.51
16.61
35.8%
0.81
10.3%
Dec-15F
2,266
1,812
642.8
0.45
(34.3%)
11.53
0.38
7.68%
10.43
NA
68.6%
0.85
6.8%
0%
1.02
Dec-16F
2,765
2,148
650.0
0.34
(23.4%)
14.46
0.33
6.59%
9.50
10.47
62.3%
0.86
5.9%
0%
0.87
Dec-17F
3,027
2,354
723.6
0.38
11.5%
12.97
0.35
7.14%
8.29
9.37
54.7%
0.85
6.6%
0%
0.84

Powered by
EFA
BY THE NUMBERS
Share price info

Share px perf. (%)
1M
3M
12M
Relative
-1.7
-0.3
6.1
Absolute
-6.2
-0.6
Major shareholders
China Merchants Group LTD
-6.7
P/BV vs ROE
1.400
14.0%
1.200
12.0%
1.000
10.0%
% held
0.800
8.0%
75.9
0.600
6.0%
0.400
4.0%
0.200
2.0%
0.000
0.0%
Liu Qiang
6.0
Value Partners Ltd
1.9
Growth
18.0
16.0
14.0
12.0
10.0
8.0
6.0
4.0
2.0
0.0
30.0%
23.9%
17.8%
11.7%
5.6%
-0.6%
-6.7%
-12.8%
-18.9%
-25.0%
ROE (rhs)
Profit & Loss

(HK$m)
Total Net Revenues
Gross Profit
Operating EBITDA
Operating EBIT
Exceptional Items
Pre-tax Profit
Taxation
Profit After Tax
Minority Interests
Preferred Dividends
Net Profit
Dec-13A
1,939
1,098
1,462
(477)
985
(154)
248
22
1,049
Dec-14A
2,133
1,226
1,627
(506)
1,121
(125)
264
24
1,172
Dec-15F
2,330
1,359
1,812
(564)
1,248
(178)
236
24
1,268
Dec-16F
2,775
1,588
2,148
(684)
1,465
(370)
243
24
1,352
Dec-17F
3,037
1,736
2,354
(747)
1,607
(384)
244
20
1,477
1,101
(253)
49
897
(283)
(6)
1,284
(289)
64
1,060
(320)
(4)
1,329
(333)
0
997
(354)
0
1,362
(347)
0
1,014
(364)
0
1,487
(388)
0
1,099
(375)
0
607
513
564
736
563
604
643
581
595
650
640
640
724
714
714
Cash Flow
(HK$m)
EBITDA
Tax Paid
Capex
Shares Repurchased
Dividends Paid
Preferred Dividends
Dec-13A
1,462
0
(28)
6
371
(406)
(101)
(198)
1,107
(17)
0
0
310
293
(839)
0
Dec-14A
1,627
0
88
2
404
(475)
(69)
(367)
1,209
(50)
356
(1,051)
476
(269)
(607)
25
Dec-15F
1,812
0
(497)
0
498
(497)
(176)
(162)
978
(23)
0
(4,029)
306
(3,746)
861
0
Dec-16F
2,148
0
99
0
618
(617)
(381)
(333)
1,534
(23)
0
0
270
247
(897)
0
Dec-17F
2,354
0
55
0
681
(684)
(395)
(347)
1,664
(23)
0
0
244
221
(897)
0
(421)
(6)
(750)
(4)
(1,100)
0
(967)
0
(951)
0
(1,266)
134
561
1,516
(1,335)
(395)
334
1,034
(238)
(3,006)
(1,906)
(2,612)
(1,864)
(83)
884
2,142
(1,848)
37
988
2,260
89
BY THE NUMBERS
Balance Sheet
(HK$m)
Total Debtors
Inventories
Fixed Assets
Total Investments
Intangible Assets
Short-term Debt
Total Creditors
Total Provisions
Total Liabilities
Minority Interests
Total Equity
Dec-13A
1,448
71
1
512
2,032
9,472
1,927
0
0
11,400
249
Dec-14A
1,049
200
1
0
1,250
12,638
1,702
0
0
14,341
402
Dec-15F
1,256
227
1
0
1,484
22,986
1,632
0
0
24,619
897
Dec-16F
1,173
277
1
0
1,450
22,326
1,606
0
0
23,932
897
Dec-17F
1,210
303
1
0
1,513
21,602
1,606
0
0
23,207
897
482
807
1,538
3,419
633
660
1,695
3,845
631
479
2,008
9,568
772
494
2,163
8,671
845
535
2,277
7,774
0
3,419
713
5,671
5,109
2,652
7,761
160
4,005
961
6,661
6,374
2,556
8,930
134
9,701
961
12,670
10,822
2,611
13,433
107
8,778
961
11,902
10,812
2,668
13,480
81
7,855
961
11,093
10,901
2,727
13,628
Dec-13A
30.6%
36.2%
74.8%
(3.09)
7.11
6.07
23.0%
57%
14.44
0.36
202.1
7.76%
7.67%
6.82%
Dec-14A
7.1%
7.4%
75.0%
(3.06)
6.10
8.08
22.5%
71%
24.45
0.36
224.6
8.63%
7.68%
6.74%
Dec-15F
12.2%
15.6%
77.3%
(4.94)
5.81
6.66
25.0%
122%
34.34
0.36
237.6
7.71%
6.09%
5.13%
Dec-16F
22.1%
22.2%
77.3%
(4.50)
5.80
3.94
25.5%
95%
33.29
0.30
216.2
4.94%
5.95%
4.98%
Dec-17F
9.5%
9.6%
77.4%
(4.00)
5.85
4.16
26.1%
93%
34.92
0.27
226.9
5.61%
6.76%
5.50%
Dec-13A
30.0%
N/A
0.0%
N/A
N/A
N/A
N/A
N/A
N/A
Dec-14A
6.6%
N/A
0.0%
N/A
N/A
N/A
N/A
N/A
N/A
Dec-15F
12.5%
N/A
0.0%
N/A
N/A
N/A
N/A
N/A
N/A
Dec-16F
22.3%
N/A
0.0%
N/A
N/A
N/A
N/A
N/A
N/A
Dec-17F
9.5%
N/A
0.0%
N/A
N/A
N/A
N/A
N/A
N/A
Key Ratios
Revenue Growth
Net Cash Per Share (HK$)
BVPS (HK$)
Effective Tax Rate
Inventory Days
ROIC (%)
ROCE (%)
Key Drivers
Avg daily traffic grth (%, main)
Base tollrate/km (% chg, main)
Base tollrate/vehicle (%chg, main)
Avg daily traffic grth (%, 2ndary)
Base tollrate/km (% chg, 2ndary)
Base tollrate/vehicle (%chg, 2ndary)
Avg daily traffic grth (%, tertiary)
Base tollrate/km (% chg, tertiary)
Base tollrate/vehicle (%chg, tertiary)
90
Water Treatment & ServicesSingaporeEquity researchDecember 9, 2015
Company Note
Singapore
CITIC Envirotech
ADD (no change)
Long-term winner in Chinas water sector
Current price:
Target price:
Previous target:
Up/downside:
S$1.45
S$1.80
S$1.80
24.2%
Reuters:
Bloomberg:
Market cap:
CITI.SI
CEL SP
US$1,157m
S$1,635m
US$0.47m
S$0.67m
1,127m
7.7%

Current shares o/s
Free float:
No change.
CEL has the makings of a long-term winner in Chinas water sector: SOE backing,
financing power, considerable track record and technological edge in MBR.
As an industrial wastewater expert, CEL enjoys higher project IRRs of 12-15%

which may come under threat in the midst of intensifying competition.
Upstream move into membrane production to benefit from Chinas 13 5-year plan.
th
Stronger financial capability for future expansion.

Maintain Add. Key risk is lumpy EPC revenue, and catalysts are faster-thanexpected expansion and tariff hike.
Has key attributes to be a long-term winner in Chinas water sector

We have identified the following attributes which CEL possesses to become a long-term
winner in the China wastewater treatment (WWT) sector: 1) SOE status (CITIC is the
major shareholder at 55%), 2) financing power as net gearing is estimated at c.46% by
end-FY15, 3) track record with more than 10 years experience in membrane bioreactor
(MBR) WWT projects, and 4) competitive edge in membrane-based technologies.
Higher IRR for industrial wastewater treatment

Price Close
1.900
126.0
1.700
114.3
1.500
102.7
1.300
15
91.0
Vol m
10
5
Dec-14
Mar-15
Jun-15
Sep-15
Source: Bloomberg
Price performance
Absolute (%)
Relative (%)
1M
4.7
9.2
3M
-6.5
-6.2
12M
-9.4
3.4
Given its strategic focus on industrial WWT, CEL typically enjoys a higher IRR of 1215%, vs. IRR of 8-10% for municipal WWT projects. While we expect stiffer competition
in the WWT landscape with an increasing number of SOEs being involved in the
business (CEWL, SIIC etc.) to weigh on project IRRs, CEL continues to deliver project
wins like its recent PPP project (worth c.Rmb549m) in Liaoyang City, China and MBR
WWT plant (Rmb400m) in Gansu Province, China.
Acceleration of MBR development

With over 10 years of experience in MBR projects (mix of EPC and O&M), CEL recently
moved upstream into membrane production after acquiring Memstar in 2014. Under
th
Chinas upcoming 13 5-year plan, stricter water discharge standards may result in a
higher penetration rate of membrane technology in WWT and increase water tariffs in
the long run. As membrane production capacity rises from its current 5m sqm/ year, we
see growth potential for membrane sales in international markets outside China.
Improved finance capability to fund expansion plans

Since CITIC and KKR came on board as strategic investors, CELs borrowing costs
have significantly tapered from 7.25% to below 4.7%. Their recent issuance of perpetual
securities (US$175m, 5.45%) could also lower overall finance costs from average cost of
8.4% previously. This optimized capital structure and estimated net gearing of c.46% as
at end-FY15 gives room for further leverage to boost ROE.
Maintain Add
CEL remains on track to achieve our capex assumptions of S$225m for FY15, and
S$250m p.a. in FY16-17. We maintain our Add rating with a DCF-based target price of
S$1.80 (WACC: 6%). Key risk is lumpy EPC revenue, while catalysts are faster-thanexpected acquisitions/project wins and tariff hikes.
[X]
Financial Summary
Analysts
NGOH Yi Sin
T (65) 6210 8604
Roy CHEN
T (65) 6210 8685
E roy.chen@cimb.com
Revenue (S$m)
Net Profit (S$m)
Core EPS (S$)
Core EPS Growth
FD Core P/E (x)
DPS (S$)
Dividend Yield
EV/EBITDA (x)
P/FCFE (x)
Net Gearing
P/BV (x)
ROE
Dec-13A
198.1
50.4
22.41
0.040
(17.0%)
46.03
0.005
0.311%
19.25
34.2
51.2%
2.90
8.24%
Dec-14A
312.8
91.7
49.61
0.043
7.5%
37.16
0.003
0.241%
16.46
456.1
37.7%
2.13
8.11%
Dec-15F
326.1
106.7
40.60
0.041
(4.9%)
36.98
0.006
0.396%
17.77
9.6
40.2%
1.92
5.50%
Dec-16F
432.6
155.6
58.19
0.052
26.5%
28.91
0.003
0.207%
14.02
146.5
53.9%
1.80
6.62%
0.79
Dec-17F
524.0
189.8
76.58
0.068
31.6%
21.97
0.003
0.207%
12.35
NA
65.6%
1.67
8.12%
0.83

Powered by
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BY THE NUMBERS
Share price info
P/BV vs ROE

Growth
Share px perf. (%)
1M
3M
12M
3.50
14.0%
60.0
140%
Relative
9.2
-6.2
3.4
3.00
12.0%
50.0
107%
Absolute
4.7
2.50
10.0%
-6.5
-9.4
40.0
73%
2.00
8.0%
1.50
6.0%
30.0
40%
1.00
4.0%
20.0
7%
0.50
2.0%
10.0
-27%
0.00
0.0%
Major shareholders
% held
CITIC Limited
55.0
KKR China Water Investment

Holdings Limited
23.8
Pan Shu Hong
5.1
0.0
-60%
ROE (rhs)
Profit & Loss

(S$m)
Total Net Revenues
Gross Profit
Operating EBITDA
Operating EBIT
Exceptional Items
Pre-tax Profit
Taxation
Profit After Tax
Minority Interests
Preferred Dividends
Net Profit
Dec-13A
202.3
94.8
50.4
(5.2)
45.2
(15.7)
3.6
0.0
33.2
Dec-14A
317.7
151.9
91.7
(11.4)
80.3
(25.0)
1.9
10.7
67.9
Dec-15F
337.2
198.0
106.7
(19.1)
87.6
(33.6)
0.3
3.5
57.9
Dec-16F
432.6
263.1
155.6
(33.6)
122.0
(35.3)
0.0
0.0
86.7
Dec-17F
524.0
320.7
189.8
(45.4)
144.4
(35.7)
0.0
0.0
108.8
33.2
(9.7)
67.9
(15.7)
57.9
(14.0)
86.7
(25.2)
108.8
(29.7)
23.5
(1.1)
52.2
(2.6)
43.9
(3.3)
61.5
(3.3)
79.1
(2.5)
22.4
22.1
28.8
49.6
36.8
42.4
40.6
42.9
44.2
58.2
58.2
58.2
76.6
76.6
76.6
Cash Flow
(S$m)
EBITDA
Tax Paid
Capex
Shares Repurchased
Dividends Paid
Preferred Dividends
Dec-13A
50.4
Dec-14A
91.7
Dec-15F
106.7
Dec-16F
155.6
Dec-17F
189.8
16.4
(77.7)
(27.6)
(18.8)
(28.9)
6.3
(0.8)
(11.3)
(3.3)
57.7
(111.5)
(1.8)
(0.4)
14.9
(98.8)
86.5
12.2
36.3
(0.3)
(20.4)
(5.1)
24.5
(130.4)
6.2
(16.9)
3.4
(137.7)
113.7
1.6
12.8
(0.0)
(32.3)
(11.0)
48.6
(260.4)
1.5
(31.7)
0.0
(290.6)
412.5
58.7
0.0
0.0
(35.3)
(25.2)
76.4
(254.9)
0.0
0.0
0.0
(254.9)
190.0
0.0
0.0
0.0
(35.7)
(29.7)
95.6
(252.8)
0.0
0.0
0.0
(252.8)
102.5
0.0
(2.6)
(2.8)
(6.3)
(3.4)
(3.4)
0.0
96.1
55.0
45.3
(29.1)
(0.1)
112.4
(0.8)
0.5
(91.6)
(0.0)
464.9
222.9
170.5
(203.6)
0.0
186.6
8.1
11.5
(141.6)
0.0
99.1
(58.2)
(54.8)
(120.0)
92
BY THE NUMBERS
Balance Sheet
(S$m)
Total Debtors
Inventories
Fixed Assets
Total Investments
Intangible Assets
Short-term Debt
Total Creditors
Total Provisions
Total Liabilities
Minority Interests
Total Equity
Dec-13A
121
164
0
3
288
364
70
1
9
444
20
Dec-15F
347
267
13
33
660
864
0
255
36
1,155
200
Dec-16F
164
318
14
8
504
1,081
0
255
36
1,373
60
Dec-17F
106
373
15
10
504
1,286
0
255
36
1,578
40
178
40
268
236
75
0
311
22
601
610
27
637
176
23
398
503
0
0
503
27
928
852
35
887
209
23
292
613
0
0
613
27
932
906
38
945
237
23
299
736
0
0
736
27
1,062
980
41
1,020
Dec-13A
23.3%
17.1%
25.5%
(0.27)
0.50
2.75
29.2%
11.6%
172.4
1.35
236.2
11.4%
8.9%
5.80%
Dec-14A
57.9%
81.9%
29.3%
(0.28)
0.68
3.07
23.1%
5.6%
168.3
11.55
222.9
16.6%
10.1%
7.41%
Dec-15F
4.2%
16.3%
32.7%
(0.32)
0.76
2.21
24.2%
15.5%
214.1
29.73
270.9
8.3%
6.8%
4.48%
Dec-16F
32.7%
45.9%
36.0%
(0.45)
0.80
3.31
29.1%
5.8%
188.1
28.50
244.0
8.0%
7.6%
4.92%
Dec-17F
21.1%
22.0%
36.2%
(0.59)
0.87
3.88
27.3%
4.4%
191.8
26.13
257.7
8.1%
8.4%
5.49%
Dec-13A
N/A
141
N/A
N/A
59.7%
N/A
N/A
0.0%
N/A
N/A
Dec-14A
N/A
185
N/A
N/A
61.1%
N/A
N/A
0.0%
N/A
N/A
Dec-15F
N/A
148
N/A
N/A
43.5%
N/A
N/A
-11.3%
N/A
N/A
Dec-16F
N/A
180
N/A
N/A
40.9%
N/A
N/A
9.5%
N/A
N/A
Dec-17F
N/A
220
N/A
N/A
22.4%
N/A
N/A
10.9%
N/A
N/A
126
13
159
134
125
0
259
7
425
297
11
307
Dec-14A
121
254
10
26
410
587
19
193
29
828
49
Key Ratios
Revenue Growth
BVPS (S$)
Effective Tax Rate
Inventory Days
ROIC (%)
ROCE (%)
Key Drivers
(S$m)
Outstanding Orderbook
Order Book Depletion
Orderbook Replenishment
ASP/tariff (% chg, main prod/serv)
ASP/tariff (%chg, 2ndary prod/serv)
Non Revenue Water (NRW, %)
93
Company Note
Singapore
City Developments
ADD (no change)
Attractive valuations
Current price:
Target price:
Previous target:
Up/downside:
S$7.15
S$10.47
S$10.47
46.4%
Reuters:
Bloomberg:
Market cap:
CTDM.SI
CIT SP
US$4,602m
S$6,502m
US$7.69m
S$10.83m
954.3m
42.5%

Current shares o/s
Free float:
Residential contributions from Singapore and overseas.

Acquisition of Stag Brewery site deepens UK footprint.
Weaker revPAR and higher costs eat into hotel contributions.
South Beach to boost rental income.
Maintain Add with an RNAV-based target price of S$10.47.
Residential drivers from Singapore and overseas

In addition to the launch of the Brownstone (45% sold) and Criterion (8% sold) ECs this
year, overseas residential contribution is expected to accelerate in FY16. Eling
Residences is scheduled for launch in Nov 15 and completion next year, while 381
residential/SOHO units in Suzhou have been sold and are to be handed over in 2016. It
will also book profits from the sale of Emerald House in Croydon in 4Q15.
Deepening UK footprint
No change.
Price Close
The recent acquisition of the sizeable 22-acre Stag Brewery site in Mortlake would
further add to the groups overseas diversification strategy. This mixed-use development
will accommodate a major residential project, a new school, a hotel and other
employment and leisure uses. When completed, it would create a completely new
riverside residential belt for Richmond with new, green parkland. The planning and
consultation process will begin in early 2016 and planning approval is expected to be
granted in 1Q18. We have not factored in any enhancement to RNAV from this
development
10.70
104.2
9.70
98.7
8.70
93.1
7.70
87.6
Weaker revPAR and higher costs erode hotel profits
6.70
15
82.0
Hotel operations, through M&C, saw a 32% dip in 3Q15 PBT to S$59.2, with PBT
margins slipping 6.2% pts to 13.5% due to Asia hotels weaker performance and
pressure from higher operating costs. This led to portfolio revPAR falling 1.4% yoy to
77.66 as Singapore saw per room revenue declining 7.5% while the rest of Asia lost
10.9%. To unlock value from its hotel real estate, it plans to redevelop some US hotels
and its Seoul land parcel and undertake AEI for its Auckland property over the next 2-3
years.
Vol m
10
5
Dec-14
Mar-15
Jun-15
Sep-15
Source: Bloomberg
Price performance
Absolute (%)
Relative (%)
1M
-10.7
-6.2
3M
-14.9
-14.6
12M
-27.9
-15.1
Ramping up rental income

Rental income is underpinned by high portfolio occupancy of 97.3% in Singapore and
the upcoming completion of South Beach. An estimated 96% of its office space has
been leased, of which 70% have commenced operations. Construction work at the
South Beach Avenue retail and F&B space is ongoing and should add to rental income
when completed.
Maintain Add rating

We maintain our Add call with an unchanged target price of S$10.47, premised on a
25% discount to RNAV. The stock is trading at an attractive 0.81x P/BV and 45% below
our RNAV. Catalysts could come in the form of realised profits from its overseas
development projects.
[X]
Financial Summary
Analyst
LOCK Mun Yee
T (65) 6210 8606

Net Profit (S$m)
Core EPS (S$)
Core EPS Growth
FD Core P/E (x)
DPS (S$)
Dividend Yield
EV/EBITDA (x)
P/FCFE (x)
Net Gearing
P/BV (x)
ROE
Dec-13A
3,162
837
683
0.46
(4.7%)
15.48
0.16
2.24%
13.75
4.46
26.5%
0.83
5.7%
Dec-14A
3,764
1,122
968
0.70
51.9%
10.19
0.16
2.24%
8.69
4.84
5.3%
0.81
8.0%
Dec-15F
3,462
1,040
600
0.63
(11.0%)
11.44
0.19
2.62%
10.08
27.22
7.0%
0.77
6.9%
1.02
Dec-16F
3,770
1,178
655
0.69
9.8%
10.42
0.21
2.88%
9.43
NA
10.6%
0.73
7.2%
1.02
Dec-17F
6,327
1,874
1,153
1.21
76.1%
5.92
0.36
5.07%
5.47
5.81
1.4%
0.68
11.9%
1.72

Powered by
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BY THE NUMBERS
Share price info

Share px perf. (%)
1M
3M
12M
Relative
-6.2
-14.6
-15.1
Absolute
-10.7
-14.9
-27.9
Major shareholders
% held
Hong Leong
35.3
Aberdeen
22.2
P/BV vs ROE
1.80
1.60
1.40
1.20
1.00
0.80
0.60
0.40
0.20
0.00
10.00%
8.89%
7.78%
6.67%
5.56%
4.44%
3.33%
2.22%
1.11%
0.00%

Growth
30.0
60.0%
25.0
45.0%
20.0
30.0%
15.0
15.0%
10.0
0.0%
5.0
-15.0%
0.0
-30.0%
ROE (rhs)
Profit & Loss

(S$m)
Total Net Revenues
Gross Profit
Operating EBITDA
Operating EBIT
Exceptional Items
Pre-tax Profit
Taxation
Profit After Tax
Minority Interests
Pref. & Special Div
Net Profit
Dec-13A
3,162
1,673
837
(159)
678
(36)
68
0
710
183
892
(69)
Dec-14A
3,764
1,992
1,122
(200)
922
7
76
0
1,005
351
1,356
(203)
Dec-15F
3,462
1,832
1,040
(220)
820
(71)
97
0
846
4
850
(127)
Dec-16F
3,770
1,995
1,178
(247)
931
(82)
86
0
935
0
935
(140)
Dec-17F
6,327
3,348
1,874
(252)
1,622
(103)
123
0
1,643
0
1,643
(246)
823
(140)
0
1,153
(184)
0
723
(123)
0
795
(140)
0
1,396
(243)
0
683
441
441
968
670
670
600
596
596
655
655
655
1,153
1,153
1,153
Cash Flow
(S$m)
EBITDA
Tax Paid
Capex
Shares Repurchased
Dividends Paid
Preferred Dividends
Dec-13A
837
Dec-14A
1,122
Dec-15F
1,040
Dec-16F
1,178
Dec-17F
1,874
(369)
(482)
834
(819)
139
(55)
122
(67)
(135)
334
(320)
(200)
261
(27)
(115)
560
(97)
190
(70)
(120)
(129)
1,745
(350)
243
(113)
(130)
(141)
217
(350)
231
(91)
(140)
(248)
1,764
(350)
0
534
214
980
0
0
(166)
0
236
139
711
0
0
(275)
0
(212)
(562)
(932)
0
0
(192)
0
(40)
(390)
(371)
0
0
(209)
0
55
(295)
(294)
0
0
(359)
(133)
(1,257)
(122)
(702)
(45)
(698)
(1,064)
(250)
302
739
95
BY THE NUMBERS
Balance Sheet
(S$m)
Total Debtors
Inventories
Fixed Assets
Total Investments
Intangible Assets
Short-term Debt
Total Creditors
Total Provisions
Total Liabilities
Minority Interests
Total Equity
Dec-13A
2,739
Dec-14A
3,898
Dec-15F
3,845
Dec-16F
2,995
Dec-17F
3,818
1,635
8
4,498
8,880
3,566
0
0
5,253
8,820
968
1,589
11
4,832
10,329
4,918
0
0
4,453
9,371
2,233
1,544
9
3,936
9,334
5,048
0
0
6,301
11,349
2,333
1,798
10
4,721
9,524
5,151
0
0
6,463
11,614
2,148
2,929
17
4,631
11,394
5,248
0
0
6,454
11,703
2,001
1,313
231
2,512
4,479
1,463
261
3,957
2,233
1,283
332
3,948
2,333
1,475
361
3,984
2,148
2,416
607
5,023
2,001
492
4,971
0
7,483
8,233
1,983
10,216
2,735
4,968
0
8,925
8,410
2,365
10,776
2,735
5,068
0
9,016
8,831
2,836
11,667
2,735
4,882
0
8,866
9,290
2,983
12,272
2,735
4,735
0
9,758
10,097
3,242
13,339
Dec-13A
(5.7%)
(8.4%)
26.5%
(2.84)
8.63
10.08
7.8%
30.5%
162.6
2.12
287.7
5.20%
4.83%
4.05%
Dec-14A
19.0%
34.0%
29.8%
(0.60)
8.81
34.40
15.0%
47.1%
156.3
2.02
285.8
6.22%
6.19%
4.25%
Dec-15F
(8.0%)
(7.3%)
30.0%
(0.86)
9.25
6.83
14.9%
30.0%
165.1
2.28
307.4
4.95%
5.50%
3.86%
Dec-16F
8.9%
13.3%
31.3%
(1.36)
9.73
7.16
15.0%
30.0%
162.2
1.99
284.3
5.20%
5.95%
4.13%
Dec-17F
67.8%
59.1%
29.6%
(0.19)
10.58
11.58
15.0%
30.0%
136.3
1.65
238.3
8.45%
9.79%
6.71%
Dec-13A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
0.0%
0.0%
N/A
Dec-14A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
42.0%
51.1%
N/A
Dec-15F
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
38.4%
58.7%
N/A
Dec-16F
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
41.4%
55.9%
N/A
Dec-17F
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
50.1%
48.3%
N/A
Key Ratios
Revenue Growth
BVPS (S$)
Effective Tax Rate
Inventory Days
ROIC (%)
ROCE (%)
Key Drivers
Gross Margins (%)
96
Public TransportationSingaporeEquity researchDecember 9, 2015
Company Note
Singapore
ComfortDelGro
HOLD (no change)
Lets go downtown
Current price:
Target price:
Previous target:
Up/downside:
S$3.05
S$3.17
S$3.17
4.0%
Reuters:
Bloomberg:
Market cap:
CMDG.SI
CD SP
US$4,642m
S$6,558m
US$9.95m
S$14.01m
2,110m
59.0%

Current shares o/s
Free float:
No change.
We believe that CDGs earnings growth in FY16-17 will be driven by fresh

contribution from the Downtown Line (DTL) stages II and III.
We expect the implementation of the Government Contracting Model (GCM) for

buses in Aug 2016 to unlock significant capital and improve operating margins.
The rise of Uber and GrabCar presents possible threats to CDGs taxi business.
Maintain Hold rating with target price of S$3.17, based on FY16 DCF.
CDG plans to continue expanding its overseas business, although management

guides for a slower M&A pipeline in 2016.
Rail: reduced losses and eventual turnaround of DTL

Due to its lack of scale, DTL stage I (six stations, 4.3km) has been loss-making and a
drag on CDGs overall rail profit since it commenced operations in Dec 2013. We expect
DTLs losses to narrow significantly in FY16, with an enlarged network and scale from
the commencement of stage II operations (12 stations, 16.6km) by Dec 2015. The DTL
is likely to turn around in 2017, when stage III commences operations.
Singapore bus: smooth transition to the GCM

Price Close

137.0
3.10
128.0
2.90
119.0
2.70
110.0
2.50
101.0
2.30
20
15
10
5
92.0
Vol m
3.30
Dec-14
Mar-15
Jun-15
Sep-15
Source: Bloomberg
Price performance
Absolute (%)
Relative (%)
1M
-1.3
3.2
3M
6.6
6.9
12M
16.4
29.2
We believe that FY16 will be an eventful year for the groups Singapore bus business,
with the anticipated launch of the GCM by the Land Transport Authority (LTA) in Aug
2016. The tendering process for the three public bus packages is progressing smoothly.
We expect the sale of bus assets to occur in early-2016, after transfer of BSEP buses by
end-2015. In our view, the new model will unlock significant CDG capital that was
previously attached to buses and result in commercially-viable bus operating margins.
Taxi: outlook threatened by Uber and GrabCar

We think that CDGs established dominance in the Singapore taxi market (60% market
share, price leader) will be undermined by the rise of Uber and GrabCar, which allows
drivers to opt to rent cars cheaply to take ride-bookings and provide private commuting
services. While management insists that its taxi fleet has been fully hired out, we foresee
increasing difficulties for CDG to maintain its current 100% hire-out rate.
Overseas M&A opportunities but likely slower activity in FY16

We continue to like CDGs overseas expansion initiatives, supported by the groups
good overseas operating track record and its strong balance sheet (CDGs net cash
position will be strengthened by the sale of bus assets). While the long-term outlook
remains promising, management guided for a slower M&A pipeline in FY16, as the
tougher economic conditions in China and Australia discourages potential sellers from
making decisions fast.
Maintain Hold, with target price of S$3.17

We keep our Hold rating on CDG, with a target price of S$3.17 based on FY16 DCF. We
expect decent EPS growth of 13% and 7% in FY16 and FY17, respectively, driven by
DTL expansion and improving bus operating profit but the threat from Uber and GrabCar
to the groups taxi business is an overhang. CDGs current FY16 P/E of 19.1x is 1.5 s.d.
above its historical 1-year forward P/E.
[X]
Financial Summary
Analysts
Roy CHEN
T (65) 6210 8685
E roy.chen@cimb.com
William TNG, CFA
T (65) 6210 8676
Revenue (S$m)
Net Profit (S$m)
Core EPS (S$)
Core EPS Growth
FD Core P/E (x)
DPS (S$)
Dividend Yield
EV/EBITDA (x)
P/FCFE (x)
Net Gearing
P/BV (x)
ROE
Dec-13A
3,748
763.7
263.2
0.12
5.3%
24.45
0.07
2.31%
9.23
24.92
(0.8%)
2.99
12.6%
Dec-14A
4,051
795.8
283.5
0.13
7.7%
22.70
0.08
2.74%
8.78
38.56
(3.1%)
2.94
13.1%
Dec-15F
4,140
831.8
297.2
0.14
4.8%
21.65
0.09
2.88%
8.53
23.26
(1.4%)
2.80
13.2%
0%
0.99
Dec-16F
4,184
857.0
336.4
0.16
13.2%
19.13
0.10
3.25%
6.80
6.87
(42.7%)
2.65
14.2%
0%
0.98
Dec-17F
4,167
838.5
358.6
0.17
6.6%
17.95
0.11
3.47%
6.80
15.01
(46.0%)
2.51
14.4%
0%
0.95

Powered by
EFA
BY THE NUMBERS
Share price info

Share px perf. (%)
Relative
Absolute
1M
3.2
-1.3
3M
6.9
6.6
12M
29.2
16.4
P/BV vs ROE
3.50
14.50%
3.00
14.07%
2.50
13.64%

Growth
25.0
14.0%
20.0
11.2%
8.4%
% held
2.00
13.21%
15.0
Blackrock
6.7
1.50
12.79%
10.0
5.6%
Capital Group
6.4
1.00
12.36%
5.0
2.8%
Silchester Int'l Investors
4.9
0.0
0.0%
Major shareholders
0.50
11.93%
0.00
11.50%
ROE (rhs)
Profit & Loss

(S$m)
Total Net Revenues
Gross Profit
Operating EBITDA
Operating EBIT
Exceptional Items
Pre-tax Profit
Taxation
Profit After Tax
Minority Interests
Preferred Dividends
Net Profit
Dec-13A
3,748
1,091
764
(337)
426
(16)
4
0
414
0
414
(87)
Dec-14A
4,051
1,164
796
(354)
442
(10)
4
0
436
0
436
(92)
Dec-15F
4,140
1,200
832
(367)
465
(14)
4
0
455
0
455
(97)
Dec-16F
4,184
1,243
857
(349)
508
4
4
0
517
0
517
(108)
Dec-17F
4,167
4,167
838
(295)
544
4
4
0
552
0
552
(115)
327
(64)
0
344
(61)
0
358
(61)
0
408
(72)
0
437
(79)
0
263
263
263
284
284
284
297
297
297
336
336
336
359
359
359
Cash Flow
(S$m)
EBITDA
Tax Paid
Capex
Shares Repurchased
Dividends Paid
Preferred Dividends
Dec-13A
764
(4)
6
Dec-14A
796
(4)
26
Dec-15F
832
(4)
(130)
Dec-16F
857
(4)
(18)
Dec-17F
838
(4)
(2)
(349)
360
(27)
(78)
670
(415)
0
(130)
14
(532)
120
0
0
(138)
(360)
360
(22)
(83)
713
(471)
0
(24)
11
(485)
(62)
0
0
(165)
(377)
393
(26)
(57)
632
(494)
0
0
0
(494)
140
0
0
(185)
(340)
357
(8)
(97)
747
(432)
1,224
0
0
792
(601)
0
0
(209)
(286)
303
(8)
(108)
732
(304)
0
0
0
(304)
0
0
0
(223)
7
(11)
128
258
166
(10)
(237)
(8)
167
250
0
(45)
92
277
163
0
(811)
728
937
1,547
0
(223)
206
429
437
98
BY THE NUMBERS
Balance Sheet
(S$m)
Total Debtors
Inventories
Fixed Assets
Total Investments
Intangible Assets
Short-term Debt
Total Creditors
Total Provisions
Total Liabilities
Minority Interests
Total Equity
Dec-13A
831
334
71
5
1,240
2,777
71
687
310
3,845
218
Dec-14A
826
341
72
0
1,239
2,895
82
686
329
3,991
243
Dec-15F
917
339
71
0
1,328
3,023
86
686
329
4,123
261
Dec-16F
1,645
362
73
0
2,080
1,882
90
686
329
2,987
261
Dec-17F
1,851
361
73
0
2,285
1,891
94
686
329
2,999
261
665
179
1,063
590
837
178
1,258
494
704
218
1,183
616
711
230
1,202
14
708
236
1,205
14
146
735
493
2,290
2,155
640
2,795
143
637
497
2,392
2,190
649
2,839
143
759
497
2,438
2,302
710
3,012
143
157
497
1,856
2,429
782
3,211
143
157
497
1,859
2,564
861
3,425
Dec-13A
5.71%
3.86%
20.4%
0.01
1.02
15.56
21.0%
56.5%
11.68
8.83
89.73
10.9%
11.0%
6.86%
Dec-14A
8.10%
4.20%
19.6%
0.04
1.04
20.10
21.2%
62.3%
10.30
9.03
94.92
11.0%
11.1%
6.83%
Dec-15F
2.19%
4.52%
20.1%
0.02
1.09
17.67
21.3%
62.3%
10.25
8.90
95.63
11.7%
11.3%
6.92%
Dec-16F
1.06%
3.03%
20.5%
0.65
1.15
61.56
21.0%
62.3%
11.08
8.97
88.06
12.0%
12.4%
7.70%
Dec-17F
(0.40%)
(2.16%)
20.1%
0.75
1.22
65.85
20.8%
62.3%
12.07
N/A
N/A
18.9%
13.6%
8.38%
Dec-13A
N/A
8.2%
N/A
7.5%
Dec-14A
N/A
10.4%
N/A
19.5%
Dec-15F
N/A
4.2%
N/A
5.1%
Dec-16F
N/A
-1.0%
N/A
21.1%
Dec-17F
N/A
0.0%
N/A
0.0%
Key Ratios
Revenue Growth
BVPS (S$)
Effective Tax Rate
Inventory Days
ROIC (%)
ROCE (%)
Key Drivers
Avg fare/trip (%chg,main prod/serv)
Ridership grth (%,main prod/serv)
Avg fare/trip (%chg,2ndary prod/serv)
Ridership grth (%,2ndary prod/serv)
99
Company Note
Singapore
Croesus Retail Trust
ADD (no change)
Inorganic earnings drivers
Current price:
Target price:
Previous target:
Up/downside:
S$0.79
S$1.00
S$1.00
26.8%
Reuters:
Bloomberg:
Market cap:
CROE.SI
CRT SP
US$356.2m
S$503.3m
US$0.54m
S$0.77m
519.0m
89.5%

Current shares o/s
Free float:
Growing portfolio value and income through acquisitions.

Torius acquisition provides geography and WALE diversification.
High percentage of locked-in leases in FY16-17.
New acquisitions to drive income growth.
Maintain Add with a DDM-based target price of S$1.00.
Strong expansion in portfolio AUM

CRTs portfolio value has expanded c44% to 93.7bn since its listing, thanks to new
acquisitions as well as an expansion in property values on the back of income growth
and cap rate compression. This was accompanied by a projected distribution income
growth of c.34%. Portfolio occupancy remains a high 88.4-100%, thus ensuring a stable
income base.
Acquisition of Torius property provides portfolio diversification

The recent acquisition of the Torius property expanded CRTs presence into Fukuoka.
The property is a suburban retail mall and is one of the largest retail facilities in Fukuoka
city. Apart from offering 7.8% NPI yield, the property has a shorter WALE of 6.8 years,
thus reducing CRTs portfolio WALE to 8.2 years. This allows the trust to capitalise on
any potential rental recovery when leases expire.
No change.
Price Close
1.000
114.0
High proportion of locked-in leases in FY16 and FY17
0.900
108.7
0.800
103.3
0.700
6
98.0
An estimated 95% of rentals are locked in for FY16 and 92% in FY17. As such, CRT has
a minimal 5.2% of rental income to be renewed in FY16 and 3.1% in FY17. This
provides the trust with strong earnings visibility. With about one-third of its leases having
a variable rent component and low occupancy cost in the high single digits, we believe
that income growth could be derived from higher shopper footfall and spending.
Vol m
2
Dec-14
Mar-15
Jun-15
New contributions from acquisitions to drive growth
Sep-15
Source: Bloomberg
Price performance
Absolute (%)
Relative (%)
1M
-4.3
0.2
3M
-7.1
-6.8
12M
-11.2
1.6
CRTs projected bottomline growth will come from a full years contribution from Ones
Mall and the Torius property. The latter was bought in Oct 15 at an NPI yield of 7.8%.
With compressing cap rates amid a buoyant property market, acquisition opportunities
should likely come from second tier cities. With a post-rights gearing of 46.5%, we
believe that any new purchases will have to be funded by a combination of debt and
equity.
Maintain Add rating

We retain our Add call with an unchanged DDM-based target price of S$1.00. CRT
offers investors an attractive FY16 DPU yield of 9.3%. The trust has hedged its income
until end-FY17, thus providing strong dividend visibility.
[X]
Financial Summary
Analyst
LOCK Mun Yee
T (65) 6210 8606
Gross Property Revenue (m)

Net Property Income (m)
Net Profit (m)
Distributable Profit (m)
Core EPS ()
Core EPS Growth
FD Core P/E (x)
DPS ()
Dividend Yield
Asset Leverage
BVPS ()
P/BV (x)
Recurring ROE
Jun-14A
6,222
3,841
999
3,180
2.32
0%
29.60
7.37
10.7%
51.7%
75.08
0.92
Jun-15A
7,520
4,792
1,077
3,358
2.27
(2%)
30.32
6.47
9.4%
47.3%
83.99
0.82
2.84%
Jun-16F
8,977
5,400
3,187
3,866
5.71
152%
12.04
6.47
9.4%
46.6%
82.41
0.83
6.87%
1.04
Jun-17F
9,649
5,741
3,546
4,155
5.65
(1%)
12.16
6.33
9.2%
46.7%
74.54
0.92
7.22%
1.00
Jun-18F
9,703
5,773
3,573
4,183
5.39
(5%)
12.75
6.25
9.1%
46.8%
72.82
0.94
7.32%
1.02
Powered by
EFA
BY THE NUMBERS
Share price info

Share px perf. (%)
1M
3M
Relative
0.2
-6.8
Absolute
-4.3
-7.1
Major shareholders
12M
1.6
-11.2
% held
Target Asset Management
8.0
AR Capital
6.3
Dividend Yield vs Net DPS - ()
1.200
53.0%
1.000
51.5%
0.800
50.0%
0.600
48.5%
0.400
47.0%
0.200
45.5%
0.000
44.0%
7.60
7.40
7.20
7.00
6.80
6.60
6.40
6.20
6.00
5.80
5.60
DPS (lhs)
12.0%
10.8%
9.6%
8.4%
7.2%
6.0%
4.8%
3.6%
2.4%
1.2%
0.0%
Profit & Loss

(m)
Rental Revenues
Other Revenues
Net Property Income
Management Fees
Trustee's Fees
EBITDA
EBIT
Net Interest Income
Associates' Profit
Exceptional Items
Pre-tax Profit
Taxation
Minority Interests
Preferred Dividends
Net Profit
Jun-14A
5,245
977
6,222
(2,380)
3,841
0
(565)
(22)
0
3,255
0
3,255
(705)
0
Jun-15A
6,102
1,418
7,520
(2,728)
4,792
0
(603)
(24)
0
4,165
0
4,165
(1,001)
0
Jun-16F
7,260
1,717
8,977
(3,578)
5,400
0
(751)
(26)
0
4,622
0
4,622
(1,005)
0
Jun-17F
7,810
1,839
9,649
(3,908)
5,741
0
(681)
(26)
0
5,034
0
5,034
(1,021)
0
Jun-18F
7,862
1,840
9,703
(3,930)
5,773
0
(682)
(26)
0
5,065
0
5,065
(1,021)
0
2,550
(1,551)
3,164
(2,087)
3,618
(431)
4,013
(468)
4,044
(471)
999
3,180
1,077
3,358
3,187
3,866
3,546
4,155
3,573
4,183
Jun-16F
3,618
1,005
128
(255)
676
5,170
(9,373)
0
0
(9,373)
4,000
5,922
(3,866)
1
6,057
1,855
(4,202)
(1,208)
Jun-17F
4,013
1,021
64
(431)
668
5,335
(25)
0
0
(25)
0
0
(4,155)
1
(4,155)
1,155
5,311
4,289
Jun-18F
4,044
1,021
5
(468)
668
5,270
(25)
0
0
(25)
0
0
(4,183)
1
(4,182)
1,063
5,246
4,224
Cash Flow
(m)
Pre-tax Profit
Tax Paid
Others
Capex
Dividends Paid
Jun-14A
2,550
705
1,328
(148)
(6,614)
(2,179)
(66,053)
0
0
(66,053)
14,428
29,404
(1,810)
22,259
64,280
(3,953)
(68,230)
(54,510)
Jun-15A
3,164
1,001
(344)
(173)
(5,939)
(2,291)
(11,712)
0
0
(11,712)
5,634
6,108
(3,101)
3
8,645
(5,357)
(13,999)
(9,369)
101
BY THE NUMBERS
Balance Sheet
(m)
Total Investments
Intangible Assets
Inventories
Trade Debtors
Trade Creditors
Short-term Debt
Minority Interests
Total Equity
Jun-14A
69,870
0
2,335
72,205
5,509
Jun-15A
87,930
0
5,063
92,993
6,242
Jun-16F
97,303
0
5,063
102,366
6,827
Jun-17F
97,328
0
5,063
102,391
6,627
Jun-18F
97,353
0
5,063
102,416
6,334
708
129
6,346
885
358
681
1,924
40,244
3,990
44,234
32,394
0
0
32,394
491
675
7,408
1,219
647
914
2,781
46,840
7,194
54,034
43,586
0
0
43,586
578
675
8,080
1,434
647
1,090
3,170
50,840
7,194
58,034
49,241
0
0
49,241
621
675
7,923
1,541
647
1,127
3,315
50,840
7,194
58,034
48,965
0
0
48,965
624
675
7,634
1,549
647
1,130
3,326
50,840
7,194
58,034
48,689
0
0
48,689
Jun-14A
0.0%
0.0%
61.7%
0.0%
4.60
60.8%
0.74%
3.30
3.30
2.86
N/A
Jun-15A
20.9%
24.7%
63.7%
(12.2%)
4.15
66.0%
0.60%
2.66
2.66
2.24
1.20%
Jun-16F
19.4%
12.7%
60.1%
(0.0%)
4.60
11.9%
0.20%
2.55
2.55
2.15
3.02%
Jun-17F
7.5%
6.3%
59.5%
(2.2%)
4.93
11.7%
0.18%
2.39
2.39
2.00
3.21%
Jun-18F
0.6%
0.5%
59.5%
(1.1%)
4.96
11.6%
0.18%
2.29
2.29
1.90
3.24%
Jun-14A
2,207.1
N/A
N/A
198,048
100.0%
69,870.0
N/A
Jun-15A
2,026.7
N/A
N/A
250,892
100.0%
87,930.0
N/A
Jun-16F
1,845.0
N/A
N/A
327,924
100.0%
97,303.2
N/A
Jun-17F
1,984.8
N/A
N/A
327,924
100.0%
97,328.2
N/A
Jun-18F
1,998.0
N/A
N/A
327,924
100.0%
97,353.2
N/A
Key Ratios
NPI Growth
DPS Growth
Effective Tax Rate
Current Ratio
Quick Ratio
Cash Ratio
Key Drivers
Rental Rate Psf Pm ()
RevPAR ()
Occupancy (%)
Assets Under Management (m) ()
Funds Under Management (m) ()
102
Supply Chain ManagersSingaporeEquity researchDecember 9, 2015
Company Note
Singapore
CWT Limited
HOLD (no change)
Will the buyout happen, and when?
Current price:
Target price:
Previous target:
Up/downside:
S$1.92
S$1.98
S$1.98
3.4%
Reuters:
Bloomberg:
Market cap:
CWTD.SI
CWT SP
US$813.7m
S$1,150m
US$0.49m
S$0.70m
600.3m
40.0%

Current shares o/s
Free float:
No change.
Price Close
141.0
2.00
127.0
1.80
113.0
1.60
99.0
1.40
10
85.0
Vol m
155.0
2.20
Mar-15
Jun-15
Sep-15
Source: Bloomberg
Price performance
Absolute (%)
Relative (%)
The focus for CWT in 2016 will be on news of a potential buyout.
Underlying business momentum remains weak for logistics, but commodity

marketing volumes appear to have stabilised.
Maintain Hold and SOP-based target price of S$1.98.
We think CWT could be worth S$2.54/share in such a scenario, though it could take
time to materialise as no potential buyer has been singled out.
Logistics remains soft, but new capacity in 1H17

Logistics revenue continues to be soft, dragged down by lower commodity logistics
contributions, while its warehouse and container yard in Tianjin was wiped out in a
series of blasts. This was offset by better freight margins as CWT took the opportunity to
defer buying rates as freight rates fell. Looking ahead, the catalyst will be the opening of
the mega integrated logistics hub in 1H17. The new facility will add c.33% capacity to its
current contract logistics warehouse space in Singapore.
Commodity marketing volume is unclear, but volatility is good
2.40
Dec-14
1M
-4.3
0.2
3M
-2.1
-1.8
12M
20.1
32.9
2015 saw the effect of lower commodity prices hitting CWTs topline, though gross profit
is a better indication of its traded volumes as it earns a locked-in spread on each trade.
CWT also saw the impact of lower naphtha volumes and lower demand for copper
concentrates in China, though the latter has somewhat stabilised in 3Q15. Going into
2016, there is little clarity on volumes, though continued volatility in commodity prices
will allow CWTs traders to lock in better profits.
Could be worth S$2.54 in a buyout scenario, but will still take time
We estimate that previous logistics M&A transactions were carried out at 22.4x historical
P/E. Applying this figure to CWTs estimated FY14 logistics net profit, CWTs shares
could be worth up to S$2.54 apiece (implies 20x FY17 logistics P/E) just for the logistics
business alone. We think the logistics business is CWTs prized possession, and a
motivated buyer would ascribe little value to the commodity marketing, financial services
and engineering segments.
Potential bidders
News sources report that potential bidders for CWT include PE firms Bain Capital,
Blackstone, KKR, and Japanese logistics companies Japan Post and Nippon Express.
According to Bloomberg, CWTs controlling shareholder, C&P Holdings, the Loi family
and directors of C&P Holdings have a combined 62.1% stake in CWT, hence a stake
sale would trigger a general offer for all the shares. We continue to believe a buyout may
take time to materialise, as CWT has not announced the start of any formal processes.
Maintain Hold
We maintain our Hold call on CWT, with a SOP-based target price of S$1.98. We see a
decent potential upside in a buyout scenario; however, we think that a buyout will still
take time to materialise, and a longer wait could lead to some pressure on the share
price in the near term.
Financial Summary
Analyst
Jessalynn CHEN
T (65) 6210 8672
E jessalynn.chen@cimb.com
Revenue (S$m)
Net Profit (S$m)
Core EPS (S$)
Core EPS Growth
FD Core P/E (x)
DPS (S$)
Dividend Yield
EV/EBITDA (x)
P/FCFE (x)
Net Gearing
P/BV (x)
ROE
Dec-13A
9,097
110.3
94.6
0.18
(1.80%)
10.85
0.035
1.83%
19.44
NA
145%
1.74
17.1%
Dec-14A
15,194
150.0
111.9
0.19
6.07%
10.23
0.040
2.09%
14.89
11.47
138%
1.50
15.8%
Dec-15F
8,324
128.3
109.3
0.18
(5.62%)
10.84
0.070
3.66%
16.31
3.26
111%
1.41
13.4%
0%
1.01
Dec-16F
8,697
146.2
113.7
0.19
7.13%
10.11
0.040
2.09%
15.69
NA
122%
1.29
13.3%
0%
0.92
Dec-17F
8,968
154.2
118.5
0.20
4.29%
9.70
0.040
2.09%
15.06
14.80
114%
1.18
12.7%
0%
0.99
Powered by
EFA
BY THE NUMBERS
Share price info

Share px perf. (%)
1M
3M
12M
Relative
0.2
-1.8
32.9
Absolute
-4.3
-2.1
20.1
Major shareholders
C&P Holdings Pte Ltd
% held
31.9
Kai Meng Loi
17.0
Pok Yen Loi
5.4
P/BV vs ROE
2.00
1.80
1.60
1.40
1.20
1.00
0.80
0.60
0.40
0.20
0.00
50.0%
45.0%
40.0%
35.0%
30.0%
25.0%
20.0%
15.0%
10.0%
5.0%
0.0%

Growth
14.0
300%
12.0
243%
10.0
186%
8.0
129%
6.0
71%
4.0
14%
2.0
-43%
0.0
-100%
ROE (rhs)
Profit & Loss

(S$m)
Total Net Revenues
Gross Profit
Operating EBITDA
Operating EBIT
Exceptional Items
Pre-tax Profit
Taxation
Profit After Tax
Minority Interests
Preferred Dividends
Net Profit
Dec-13A
9,097
292
110
0
110
(13)
10
8
116
Dec-14A
15,194
331
150
0
150
(37)
12
7
132
Dec-15F
8,324
335
128
0
128
(25)
13
17
134
Dec-16F
8,697
337
146
0
146
(34)
14
12
138
Dec-17F
8,968
349
154
0
154
(37)
15
13
145
116
(8)
(11)
97
(2)
132
(18)
(1)
113
(1)
134
(21)
3
115
(6)
138
(19)
0
120
(6)
145
(20)
0
125
(6)
95
106
106
112
112
112
109
106
106
114
114
114
119
119
119
Cash Flow
(S$m)
EBITDA
Tax Paid
Capex
Shares Repurchased
Dividends Paid
Preferred Dividends
Dec-13A
110.3
Dec-14A
150.0
Dec-15F
128.3
Dec-16F
146.2
Dec-17F
154.2
(484.2)
168.7
131.4
(155.8)
(29.8)
(24.2)
19.0
(7.6)
(386.6)
(181.0)
35.1
(26.7)
4.7
(167.9)
506.5
0.0
(27.8)
17.2
(12.0)
296.0
(111.4)
5.2
(20.5)
(61.8)
(188.5)
(7.3)
0.0
38.2
24.7
(21.4)
301.3
(83.2)
0.0
0.0
32.7
(50.6)
101.4
0.0
31.0
34.0
(18.7)
36.7
(173.9)
0.0
0.0
27.6
(146.3)
17.2
0.0
32.9
37.2
(20.3)
174.2
(134.5)
0.0
0.0
26.5
(108.0)
11.5
0.0
(21.1)
(23.4)
(42.4)
(24.0)
(24.0)
65.7
551.0
(3.5)
(48.1)
(587.1)
65.0
34.3
141.9
100.2
73.7
(57.4)
1.6
252.3
352.2
193.4
(61.6)
(68.4)
(178.0)
(92.4)
(171.3)
(63.8)
(76.3)
(10.1)
77.7
2.5
104
BY THE NUMBERS
Balance Sheet
(S$m)
Total Debtors
Inventories
Fixed Assets
Total Investments
Intangible Assets
Short-term Debt
Total Creditors
Total Provisions
Total Liabilities
Minority Interests
Total Equity
Dec-13A
197
2,152
825
116
3,290
495
58
128
91
771
1,116
Dec-14A
342
2,103
771
219
3,435
572
61
136
152
921
873
Dec-15F
591
2,098
415
219
3,323
619
61
130
152
962
974
Dec-16F
413
2,192
434
219
3,258
749
61
121
152
1,083
992
Dec-17F
403
2,260
447
219
3,330
835
61
112
152
1,160
1,003
1,832
139
3,087
77
1,940
111
2,924
558
1,710
111
2,796
558
1,668
111
2,771
558
1,720
111
2,834
558
166
243
44
3,374
660
28
687
33
591
50
3,565
765
26
791
33
591
50
3,437
816
33
849
33
591
50
3,411
892
39
930
33
591
50
3,475
971
45
1,016
Dec-13A
68.6%
24.3%
1.21%
(1.66)
1.10
2.46
6.6%
15.9%
63.63
24.11
52.58
7.66%
8.74%
4.03%
Dec-14A
67.0%
36.0%
0.99%
(1.81)
1.27
2.45
13.5%
16.1%
51.10
19.60
46.32
6.78%
8.30%
3.86%
Dec-15F
(45.2%)
(14.4%)
1.54%
(1.57)
1.36
2.24
16.0%
33.3%
92.10
27.10
83.40
5.60%
6.85%
3.57%
Dec-16F
4.5%
13.9%
1.68%
(1.89)
1.49
2.37
13.5%
18.1%
90.27
18.57
73.95
6.70%
7.01%
3.86%
Dec-17F
3.1%
5.5%
1.72%
(1.93)
1.62
2.42
14.0%
17.3%
90.61
18.66
71.74
6.13%
7.01%
3.99%
Key Ratios
Revenue Growth
BVPS (S$)
Effective Tax Rate
Inventory Days
ROIC (%)
ROCE (%)
Key Drivers
N/A
105
RetailSingaporeEquity researchDecember 9, 2015
Company Note
Singapore
Dairy Farm Int'l
ADD (no change)
The road to recovery is never smooth

US$5.82
US$10.00
US$10.00
71.8%
Dragged by poor ASEAN, all formats of Dairy Farm faced margin pressure in 1H15.
DAIR.SI
DFI SP
US$7,870m
US$7,870m
US$3.32m
US$3.32m
1,350m
22.0%
Potential synergies with Yonghui to boost bottomline.
Current price:
Target price:
Previous target:
Up/downside:
Reuters:
Bloomberg:
Market cap:
Current shares o/s
Free float:
No change.
We acknowledge the structural margins decline which Dairy Farm is experiencing.

Noting that Dairy Farms performance has become uneven, we are expecting a
stronger 2H.
Maintain Add with an unchanged Residual-Income based target price.
1H15: all formats saw margin pressures

In 1H15, Dairy Farm sales rose at a commendable rate of 3% yoy. At constant FX, the
increase would be 7% yoy. However, the sales growth was eroded by margins
deterioration. EBIT margin dived from 4.8% in 1H14 to 3.6% in 1H15 as all formats
experienced margin pressures. The group went from net cash as at end-14 into a net
gearing of 0.4x as it completed the 20% acquisition of Yonghui (US$914m) and the San
Miu supermarket chain in Macau (US$114m).
Dragged by poor ASEAN
Price Close
10.40
108.0
9.40
101.0
8.40
94.0
7.40
87.0
6.40
80.0
5.40
15
73.0
Vol m
10
5
Dec-14
Mar-15
Jun-15
Sep-15
Source: Bloomberg
Price performance
Absolute (%)
Relative (%)
1M
-5.5
-1.0
3M
-4.6
-4.3
12M
-37.4
-24.6
By geography, the supermarkets in Singapore continued to cede market share to

Fairprice and Sheng Shiong while PT Hero was loss-making. Convenience store EBIT
fell by 14% yoy due to a weak 7-Eleven Singapore. Even health & beauty, the groups
consistent star performer, declined 8% yoy in terms of EBIT owing to acute margin
erosion in Malaysia.
The road to recovery is never smooth

We acknowledge the structural margins decline which Dairy Farm is facing. We have
modeled in EBIT margins of 3.9-4.4% for FY15-17, and do not expect the group to touch
its 5-year average of 5.4% in FY10-14. Noting that 1H is a seasonally weaker half, and
that Dairy Farms performance has become uneven, we are expecting a stronger 2H.
Potential synergies with Yonghui to boost bottomline

The acquisition of a 19.99% stake of Yonghui for c.US$914m was completed in early
Apr. In Aug, in conjunction with JD.com acquiring a 10% stake in Yonghui for US$700m,
Dairy Farm subscribed to more shares for US$201m, so as to keep its interests at
19.99%. Yonghui achieved a solid 1H15 performance and added US$4.3m to Dairy
Farms bottomline. Propelled by store openings, Yonghuis 1H15 net profit expanded
16% yoy to Rmb0.53bn.
Maintain Add on proxy for Asian consumption

The recent share price weakness points to a favourable risk-reward. The stock is trading
at 16x CY16 P/E, more than 2 s.d below its 5-year mean. On a longer-term view, we
highlight that Dairy Farm is the largest Asian retailer ex-Japan, and is among the market
leaders in the key markets it operates in Hong Kong, Singapore, Malaysia and
Indonesia. Its investment in emerging markets, the Philippines and Cambodia, should
also help combat the rising threat of e-commerce.
[X]
Financial Summary
Analyst
YEO Zhi Bin
T (65) 6210 8669
E zhibin.yeo@cimb.com
Revenue (US$m)
Operating EBITDA (US$m)
Net Profit (US$m)
Core EPS (US$)
Core EPS Growth
FD Core P/E (x)
DPS (US$)
Dividend Yield
EV/EBITDA (x)
P/FCFE (x)
Net Gearing
P/BV (x)
ROE
Dec-13A
10,357
747.4
500.9
0.36
8.1%
16.38
0.23
3.95%
9.30
23.34
(46.3%)
6.14
38.8%
Dec-14A
11,008
736.8
509.1
0.37
4.1%
15.74
0.23
3.95%
9.64
29.82
(31.2%)
5.51
36.9%
Dec-15F
11,624
673.2
456.7
0.34
(8.4%)
17.19
0.23
3.95%
11.09
48.64
52.6%
5.00
30.5%
0%
1.02
Dec-16F
12,136
733.9
505.6
0.37
10.4%
15.56
0.23
3.95%
10.00
29.51
44.1%
4.45
30.2%
0%
1.04
Dec-17F
12,670
803.5
567.6
0.42
12.3%
13.86
0.26
4.47%
8.88
23.37
33.3%
3.90
30.0%
0%
1.03

Powered by
EFA
BY THE NUMBERS
Share price info

Share px perf. (%)
1M
3M
12M
Relative
-1.0
-4.3
-24.6
Absolute
-5.5
-4.6
Major shareholders
Jardine Strategic Holdings
-37.4
% held
77.6
Franklin Resources
7.4
Aberdeen Asset Management
2.1
P/BV vs ROE
18.0
16.0
14.0
12.0
10.0
8.0
6.0
4.0
2.0
0.0
70.0%
62.2%
54.4%
46.7%
38.9%
31.1%
23.3%
15.6%
7.8%
0.0%
Growth
40.0
35.0
30.0
25.0
20.0
15.0
10.0
5.0
0.0
20.0%
15.6%
11.3%
6.9%
2.5%
-1.9%
-6.3%
-10.6%
-15.0%
ROE (rhs)
Profit & Loss

(US$m)
Total Net Revenues
Gross Profit
Operating EBITDA
Operating EBIT
Exceptional Items
Pre-tax Profit
Taxation
Profit After Tax
Minority Interests
Preferred Dividends
Net Profit
Dec-13A
10,357
3,087
747
(196)
551
(3)
67
0
615
0
615
(102)
Dec-14A
11,008
3,291
737
(203)
534
(2)
69
0
601
0
601
(93)
Dec-15F
11,624
3,394
673
(221)
452
(14)
98
0
536
0
536
(86)
Dec-16F
12,136
3,616
734
(231)
503
(22)
118
0
600
0
600
(96)
Dec-17F
12,670
3,776
804
(241)
563
(20)
130
0
673
0
673
(108)
513
(12)
508
1
451
6
504
2
566
2
501
480
480
509
500
500
457
458
458
506
506
506
568
568
568
Cash Flow
(US$m)
EBITDA
Tax Paid
Capex
Shares Repurchased
Dividends Paid
Preferred Dividends
Dec-13A
747
45
(11)
0
Dec-14A
737
48
(17)
4
Dec-15F
673
47
(294)
0
Dec-16F
734
47
29
Dec-17F
804
47
39
(4)
(95)
683
(336)
51
0
(1)
(94)
676
(439)
30
(24)
(14)
(86)
326
(1,250)
0
(114)
(22)
(96)
692
(325)
0
0
(20)
(108)
762
(325)
0
0
(285)
(61)
0
(433)
21
0
(1,364)
1,200
0
(325)
(100)
0
(325)
(100)
0
(311)
(311)
(311)
(311)
(318)
56
(316)
82
337
409
(2)
(293)
(50)
264
252
0
889
(149)
162
(1,022)
0
(411)
(44)
267
391
0
(418)
19
337
460
107
BY THE NUMBERS
Balance Sheet
(US$m)
Total Debtors
Inventories
Fixed Assets
Total Investments
Intangible Assets
Short-term Debt
Total Creditors
Total Provisions
Total Liabilities
Minority Interests
Total Equity
Dec-13A
728
213
976
14
1,931
1,082
376
408
168
2,032
48
Dec-14A
662
252
1,011
5
1,930
1,219
393
566
207
2,386
93
Dec-15F
513
159
902
5
1,579
1,413
1,369
591
207
3,580
333
Dec-16F
468
166
934
5
1,574
1,482
1,441
616
207
3,746
283
Dec-17F
487
174
975
5
1,641
1,541
1,524
641
207
3,914
233
2,309
69
2,426
43
2,413
59
2,566
94
1,916
59
2,309
1,054
1,984
59
2,327
1,004
2,071
59
2,364
954
17
60
100
2,586
1,281
96
1,377
17
110
118
2,794
1,429
94
1,523
17
1,070
118
3,497
1,574
88
1,662
17
1,020
118
3,465
1,769
86
1,855
17
970
118
3,452
2,019
84
2,103
Dec-13A
5.68%
11.4%
7.22%
0.47
0.95
51.52
16.6%
62.1%
7.20
48.56
115.1
90.6%
37.2%
13.2%
Dec-14A
6.28%
(1.4%)
6.69%
0.35
1.06
62.09
15.5%
61.1%
7.71
46.99
111.7
92.1%
32.5%
12.3%
Dec-15F
5.59%
(8.6%)
5.79%
(0.65)
1.16
28.27
16.0%
68.1%
6.46
42.42
96.0
47.6%
18.4%
9.8%
Dec-16F
4.40%
9.0%
6.05%
(0.61)
1.31
20.97
16.0%
61.5%
4.91
39.43
83.8
32.1%
15.9%
10.0%
Dec-17F
4.40%
9.5%
6.34%
(0.52)
1.49
24.47
16.0%
61.9%
4.89
39.16
83.2
34.2%
17.1%
10.7%
Dec-13A
N/A
3.5%
4,863
N/A
N/A
N/A
N/A
N/A
Dec-14A
N/A
4.6%
4,982
N/A
N/A
N/A
N/A
N/A
Dec-15F
N/A
4.5%
5,001
N/A
N/A
N/A
N/A
N/A
Dec-16F
N/A
2.6%
5,115
N/A
N/A
N/A
N/A
N/A
Dec-17F
N/A
2.6%
5,229
N/A
N/A
N/A
N/A
N/A
Key Ratios
Revenue Growth
Net Cash Per Share (US$)
BVPS (US$)
Effective Tax Rate
Inventory Days
ROIC (%)
ROCE (%)
Key Drivers
No. of POS (main prod/serv)
SSS grth (%, main prod/serv)
No. of POS (2ndary prod/serv)
SSS grth (%, 2ndary prrod/serv)
108
BanksSingaporeEquity researchDecember 9, 2015
Company Note
Singapore
DBS Group
ADD (no change)
Positioned to capture China flows
Current price:
Target price:
Previous target:
Up/downside:
S$16.61
S$19.58
S$19.58
17.9%
Reuters:
Bloomberg:
Market cap:
DBSM.SI
DBS SP
US$29,419m
S$41,563m
US$62.15m
S$87.61m
2,474m
70.3%

Current shares o/s
Free float:
No change.
Price Close

105.7
19.0
101.1
17.0
96.6
15.0
30
92.0
Vol m
20
10
Mar-15
Jun-15
Sep-15
Source: Bloomberg
Price performance
Absolute (%)
Relative (%)
Biggest exposure to Greater China among Singapore banks, translating to slower

trade finance loans in the short term, but a beneficiary of OBOR in the long term.
We expect the Manulife bancassurance deal to prop up fees in 2016, while the
loosening of capital controls in China could lead to demand for wealth services.
NPLs from the oil & gas services sector a concern; it is the only bank that has yet to
recognise NPLs in this segment despite having the biggest exposure.
Maintain Add, with a GGM-based target price of S$19.58 (1.16x CY16 P/BV).
Fees to be propped up by Manulife deal near term

In an environment where capital markets-related fees (investment banking,
stockbroking, wealth management), trade fees and loan fees are slowing across the
banks, DBS has the added engine of a bancassurance deal with Manulife, which will add
c.S$100m per year in fixed payments to its fee income starting 2016 (c.5% of 2015 fee
income).
Beneficiary of China wealth flows and OBOR in the longer term
21.0
Dec-14
1M
-4.6
-0.1
3M
-6.2
-5.9
12M
-14.8
-2.0
Among the Singapore banks, DBS has the biggest exposure to Greater China at 35% of
loans (OCBC: 28%, UOB: 12%) and 31% of PBT (OCBC: 20%, UOB, 10%) as at 9M15.
We think this will make it a key beneficiary of Chinas One Belt, One Road (OBOR)
policy. As China loosens its capital controls and allows for more foreign investments, we
think DBS can also tap the increased demand for wealth management (WM) services.
Since its acquisition of SocGen, DBS now has the largest WM AUM at S$103bn.
Loan growth to slow but NIM should compensate

As onshore and offshore rates in China converge, demand for trade loans continues to
taper along with the arbitrage opportunity, dragging down overall loan growth. However,
offsetting this is the potential pickup in NIMs with a Fed rate hike, which should improve
customer loan spreads on US$ and S$ non-trade loans. That said, the impact of higher
US rates on NIMs will be less pronounced than the recent SIBOR hike, as DBS depends
more on expensive fixed deposits for US$ funding (US$ CASA: 42%, S$ CASA: 90%).
Look out for NPLs from oil & gas

Our biggest concern for DBS remains its exposure to small- and mid-cap oil & gas
services firms. While OCBC and UOB have started to recognise NPLs for some oil &
gas names, DBS has yet to do so despite having the biggest exposure to the oil & gas
sector at 8% of loans (OCBC: 6%, UOB: 5%). We expect DBSs credit costs to rise to
40bp in 2016 (up from 25bp in 3Q15), between OCBCs 38bp and UOBs 65bp.
Maintain Add
At its current valuation of 1.0x CY16 P/BV, the market has already priced in slowing loan
growth, lower fees and higher credit costs, in our view. Even assuming higher credit
costs of 40bp in 2016 (vs. 25bp in 3Q15), we are confident that DBS is able to achieve
ROEs that exceed cost of equity, which should limit share price downside from here.
Financial Summary
Analysts
Kenneth NG, CFA
T (65) 6210 8610
Jessalynn CHEN
T (65) 6210 8672
Net Interest Income (S$m)

Total Non-Interest Income (S$m)
Operating Revenue (S$m)
Total Provision Charges (S$m)
Net Profit (S$m)
Core EPS (S$)
Core EPS Growth
FD Core P/E (x)
DPS (S$)
Dividend Yield
BVPS (S$)
P/BV (x)
ROE
Dec-13A
5,569
3,358
8,927
(770)
3,672
1.54
(3.2%)
10.67
0.58
3.49%
14.02
1.18
11.2%
Dec-14A
6,321
3,297
9,618
(667)
4,046
1.66
7.5%
9.89
0.58
3.49%
15.24
1.09
11.3%
Dec-15F
7,095
3,625
10,720
(692)
4,412
1.78
7.4%
9.27
0.69
4.15%
16.12
1.03
11.3%
0%
1.02
Dec-16F
7,534
3,802
11,336
(1,169)
4,238
1.68
(5.5%)
9.82
0.67
4.03%
16.93
0.98
10.2%
0%
0.94
Dec-17F
8,149
3,954
12,103
(971)
4,765
1.87
11.0%
8.84
0.74
4.46%
17.83
0.93
10.7%
0%
0.94
Powered by
EFA
BY THE NUMBERS
Share price info

Share px perf. (%)
1M
3M
12M
Relative
-0.1
-5.9
-2.0
Absolute
-4.6
-6.2
-14.8
Major shareholders
Temasek Holdings
% held
29.7
P/BV vs ROE
1.600
1.400
1.200
1.000
0.800
0.600
0.400
0.200
0.000
14.00%
12.25%
10.50%
8.75%
7.00%
5.25%
3.50%
1.75%
0.00%

Growth
14.0
30.0%
12.0
23.6%
10.0
17.1%
8.0
10.7%
6.0
4.3%
4.0
-2.1%
2.0
-8.6%
0.0
-15.0%
ROE (rhs)
Profit & Loss

(S$m)
Net Interest Income
Total Non-Interest Income
Operating Revenue
Total Non-Interest Expenses
Pre-provision Operating Profit
Total Provision Charges
Operating Profit After Provisions
Operating EBIT (incl Associates)
Exceptional Items
Pre-tax Profit
Taxation
Consolidation Adjustments & Others
Profit After Tax
Minority Interests
Pref. & Special Div
FX And Other Adj.
Net Profit
Dec-13A
5,569
3,358
8,927
(3,918)
5,009
(770)
4,239
79
4,318
0
4,318
171
4,489
(615)
Dec-14A
6,321
3,297
9,618
(4,330)
5,288
(667)
4,621
79
4,700
0
4,700
198
4,898
(713)
Dec-15F
7,095
3,625
10,720
(4,899)
5,821
(692)
5,128
17
5,145
0
5,145
136
5,281
(755)
Dec-16F
7,534
3,802
11,336
(5,101)
6,235
(1,169)
5,066
18
5,084
0
5,084
0
5,084
(727)
Dec-17F
8,149
3,954
12,103
(5,447)
6,657
(971)
5,686
18
5,704
0
5,704
0
5,704
(816)
3,874
(202)
0
0
3,672
3,696
4,185
(139)
0
0
4,046
4,075
4,526
(114)
0
0
4,412
4,432
4,357
(119)
0
0
4,238
4,238
4,889
(123)
0
0
4,765
4,765
Dec-13A
83.7%
85.5%
91.3%
100.0%
61.9%
81.3%
15.6%
59.2%
0.166%
0.110%
0.25%
Dec-14A
85.6%
87.2%
89.3%
100.0%
62.5%
82.7%
15.4%
60.0%
0.173%
0.113%
0.16%
Dec-15F
88.7%
89.7%
89.6%
100.0%
64.0%
85.7%
16.0%
61.4%
0.175%
0.114%
0.30%
Dec-16F
88.7%
90.2%
90.5%
100.0%
64.4%
86.0%
16.6%
61.8%
0.274%
0.181%
0.50%
Dec-17F
88.7%
90.6%
90.5%
100.0%
64.8%
86.3%
17.2%
62.1%
0.203%
0.135%
0.40%
Balance Sheet Employment

Gross Loans/Cust Deposits
Avg Loans/Avg Deposits
Avg Liquid Assets/Avg Assets
Avg Liquid Assets/Avg IEAs
Net Cust Loans/Assets
Net Cust Loans/Broad Deposits
Equity & Provns/Gross Cust Loans
Asset Risk Weighting
Provision Charge/Avg Cust Loans
Provision Charge/Avg Assets
Total Write Offs/Average Assets
110
BY THE NUMBERS
Balance Sheet
(S$m)
Total Gross Loans
Liquid Assets & Invst. (Current)
Other Int. Earning Assets
Total Gross Int. Earning Assets
Total Provisions/Loan Loss Reserve
Total Net Interest Earning Assets
Intangible Assets
Other Non-Interest Earning Assets
Total Non-Interest Earning Assets
Cash And Marketable Securities
Long-term Investments
Total Assets
Customer Interest-Bearing Liabilities
Bank Deposits
Interest Bearing Liabilities: Others
Total Interest-Bearing Liabilities
Bank's Liabilities Under Acceptances
Total Non-Interest Bearing Liabilities
Total Liabilities
Minority Interests
Total Equity
Dec-13A
284,424
44,923
Dec-14A
313,767
46,689
Dec-15F
312,183
57,984
Dec-16F
323,985
59,678
Dec-17F
336,528
61,420
329,347
4,047
333,394
4,802
11,540
16,342
18,726
33,546
402,008
292,365
13,572
46,791
352,728
0
11,594
364,322
34,233
3,453
37,686
360,456
4,084
364,540
5,117
13,729
18,846
19,517
37,763
440,666
317,173
16,176
55,383
388,732
0
11,728
400,460
37,708
2,498
40,206
370,167
4,755
374,923
5,117
14,063
19,180
16,109
38,707
448,919
318,759
16,642
58,448
393,849
0
12,066
405,915
40,392
2,612
43,004
383,663
5,903
389,566
5,117
14,411
19,528
17,325
38,901
465,320
331,509
17,128
58,586
407,223
0
12,418
419,641
42,931
2,731
45,661
397,948
6,853
404,801
5,117
14,770
19,887
18,867
39,095
482,651
344,770
17,628
58,725
421,123
0
12,781
433,903
45,796
2,854
48,649
Key Ratios
Total Income Growth
Operating Profit Growth
Pretax Profit Growth
Net Interest To Total Income
Cost Of Funds
Return On Interest Earning Assets
Net Interest Spread
Net Interest Margin (Avg Deposits)
Net Interest Margin (Avg RWA)
Provisions to Pre Prov. Operating Profit
Interest Return On Average Assets
Effective Tax Rate
Dec-13A
4.9%
2.2%
8.0%
62.4%
0.75%
2.32%
1.56%
1.90%
2.46%
15.4%
1.48%
13.7%
40.5%
0.93%
Dec-14A
7.7%
5.6%
9.1%
65.7%
0.75%
2.38%
1.63%
1.99%
2.52%
12.6%
1.50%
14.6%
37.3%
0.91%
Dec-15F
11.5%
10.1%
7.8%
66.2%
0.70%
2.44%
1.74%
2.20%
2.63%
11.9%
1.60%
14.3%
40.4%
0.96%
Dec-16F
5.7%
7.1%
(3.7%)
66.5%
0.72%
2.50%
1.78%
2.25%
2.68%
18.7%
1.65%
14.3%
40.1%
0.93%
Dec-17F
6.8%
6.8%
12.2%
67.3%
0.75%
2.60%
1.86%
2.34%
2.78%
14.6%
1.72%
14.3%
39.9%
1.01%
Dec-13A
18.4%
1.6%
4.0%
43.9%
0.7%
140.4%
1.2%
13.7%
16.3%
15.3%
85.0%
1.2%
19.4%
Dec-14A
11.0%
1.7%
-1.8%
45.0%
0.5%
168.8%
1.1%
13.1%
15.3%
8.5%
86.9%
0.9%
7.5%
Dec-15F
4.1%
1.8%
9.9%
45.7%
0.5%
160.6%
1.1%
14.0%
16.1%
0.5%
90.2%
1.0%
6.8%
Dec-16F
4.0%
1.8%
4.9%
45.0%
0.9%
120.1%
1.2%
14.3%
16.3%
4.0%
90.4%
1.7%
7.5%
Dec-17F
4.1%
1.9%
4.0%
45.0%
0.9%
116.0%
1.2%
15.6%
17.5%
4.0%
90.7%
1.9%
4.0%
Key Drivers
Loan Growth (%)
Net Interest Margin (%)
Non Interest Income Growth (%)
Cost-income Ratio (%)
Net NPL Ratio (%)
Loan Loss Reserve (%)
GP Ratio (%)
Tier 1 Ratio (%)
Total CAR (%)
Deposit Growth (%)
Loan-deposit Ratio (%)
Gross NPL Ratio (%)
Fee Income Growth (%)
111
Food & BeveragesSingaporeEquity researchDecember 9, 2015
Company Note
Singapore
Del Monte Pacific
ADD (no change)
Sweet 16?
S$0.29
S$0.49
S$0.49
69.7%
Survived the loss-making FY15 transition year.
DMPL.SI
DELM SP
US$398.9m
S$563.5m
US$0.08m
S$0.11m
1,944m
26.5%
Short-term risks from drought in California and El Nino in the Philippines.
Current price:
Target price:
Previous target:
Up/downside:
Reuters:
Bloomberg:
Market cap:
Current shares o/s
Free float:
No change.
Expects a turnaround in FY16 even after factoring in the hefty interest expense.
Needs to refinance US$350m of debt with preference shares to lower net gearing.
We see eventual re-listing of DMFI as way out to recapitalise DMPL.
Cheap entry if DMFI reverts to historical performance and debt issue is resolved.
Time to deliver the goods

Management is guiding for a turnaround in FY16 even with the interest burden factored
in. Operationally, DMFI, the Philippines (the key market for the Del Monte brand) and the
S&W brand did well in FY15. On a proforma same period basis, DMFI sales grew 5%
yoy in FY15. The pre-acquisition business continued to do well with the Del Monte
branded sales in the Philippines growing 19% yoy, while the S&W brand in Asia and the
Middle East grew 17% yoy.
High net gearing still the concern
Price Close
0.510
108.0
0.460
99.0
0.410
90.0
0.360
81.0
0.310
72.0
0.260
15
63.0
Vol m
10
Investors remain concerned over DMPLs net gearing, which on its equity base was 6.2x
as at end-Apr 15. Note that DMPL has US$760m of intangible assets and is therefore in
a negative net tangible asset situation. Our analysis suggests that DMPL will be able to
meet its debt obligations in the absence of any further one-off charges.
The way out of debt

The company has one last outstanding refinancing transaction to switch US$350m of
bank debt into preference shares, which will count as equity and thus lower net gearing.
We assume that this will occur in FY18. We see the eventual listing of DMFI as the way
out to lower the groups net gearing to below 1.0x in the coming years.
5
Dec-14
Mar-15
Jun-15
Agricultural risks
Sep-15
Source: Bloomberg
Price performance
Absolute (%)
Relative (%)
1M
-4.9
-0.4
3M
-3.3
-3.0
12M
-37.1
-24.3
Short-term concerns are agricultural in nature. In the US, California has been
experiencing a bad drought for four years already. Peach harvest (Del Monte has a
strong market share in canned peaches) has been somewhat impacted by the lack of
water. Over in the Philippines, pineapple output will be affected by the El Nio weather.
DMPLs pineapple estate is solely in the Philippines.
Reiterate Add
At 6.1x FY17 entry multiple, this could be a cheap purchase into a well-known brand if
DMFI's performance reverts to the historical norm and new initiatives help grow market
share in the US. The DMPL business, consisting of the Del Monte brand in the
Philippines and S&W brand in Asia/Middle East, continues to do well. We keep our Add
call and target price that is based on 11.3x P/E.
[X]
Financial Summary
Analyst
William TNG, CFA
T (65) 6210 8676
Revenue (US$m)
Net Profit (US$m)
Core EPS (US$)
Core EPS Growth
FD Core P/E (x)
DPS (US$)
Dividend Yield
EV/EBITDA (x)
P/FCFE (x)
Net Gearing
P/BV (x)
ROE
Apr-14A
743
2.9
(32.22)
(0.025)
0.0%
NA
0%
746.1
6.32
728%
1.45
Apr-15A
2,159
86.6
(38.08)
(0.024)
(5.4%)
NA
0%
23.9
NA
505%
1.46
(16.7%)
Apr-16F
2,372
221.3
42.91
0.022
NA
9.30
0%
9.4
2.99
417%
1.26
14.5%
0%
1.05
Apr-17F
2,465
267.8
65.51
0.034
52.7%
6.09
0%
7.5
2.71
334%
1.04
18.7%
0%
0.99
Apr-18F
2,563
288.2
67.65
0.035
3.3%
5.90
0%
6.8
NA
127%
0.50
16.3%
0%
0.99

Powered by
EFA
BY THE NUMBERS
Share price info

Share px perf. (%)
1M
3M
12M
P/BV vs ROE

Growth
3.50
25.0%
140
900%
3.00
18.6%
120
743%
Relative
-0.4
-3.0
-24.3
Absolute
-4.9
-3.3
-37.1
2.50
12.1%
100
586%
Major shareholders
% held
2.00
5.7%
80
429%
NutriAsia Pacific Ltd
59.4
1.50
-0.7%
60
271%
1.00
-7.1%
40
114%
0.50
-13.6%
20
-43%
0.00
-20.0%
Bluebell Group Holdings
7.6
Lee Pineapple Co
5.5
0
-200%
ROE (rhs)
Profit & Loss

Profit recovery as acquisitions-related
one-off expenses come to an end
(US$m)
Total Net Revenues
Gross Profit
Operating EBITDA
Operating EBIT
Exceptional Items
Pre-tax Profit
Taxation
Profit After Tax
Minority Interests
Preferred Dividends
Net Profit
Apr-14A
743
150
3
(29)
(26)
(22)
(5)
(8)
(60)
0
(60)
23
0
(37)
5
0
0
0
(32)
(32)
(32)
Apr-15A
2,159
449
87
(59)
28
(99)
(2)
17
(58)
0
(58)
14
0
(43)
5
0
0
0
(38)
(38)
(38)
Apr-16F
2,372
580
221
(65)
156
(84)
(2)
3
73
0
73
(20)
0
52
(9)
0
0
0
43
43
43
Apr-17F
2,465
636
268
(70)
198
(88)
(2)
(3)
104
0
104
(29)
0
75
(10)
0
0
0
66
66
66
Apr-18F
2,563
663
288
(72)
216
(78)
(2)
5
142
0
142
(40)
0
102
(10)
(25)
0
0
68
68
68
Apr-14A
3
0
132
0
0
(29)
0
0
105
(37)
0
0
(1,711)
(1,749)
1,686
0
0
0
0
(19)
1,667
24
42
(1,643)
Apr-15A
87
2
Apr-16F
221
2
Apr-17F
268
2
Apr-18F
288
2
155
0
(12)
232
(75)
0
0
(79)
(154)
(134)
152
0
0
0
(88)
(71)
7
(57)
78
(2)
0
(12)
209
(65)
0
0
(0)
(65)
(10)
0
0
0
0
(85)
(95)
49
134
144
(18)
0
(29)
223
(65)
0
0
(0)
(65)
(10)
0
0
0
0
(89)
(99)
59
147
157
(21)
0
(40)
230
(65)
0
0
(0)
(65)
(360)
0
0
0
(25)
272
(113)
52
(195)
165
Cash Flow
Capex to normalise to US$65m range
(US$m)
EBITDA
Tax Paid
Capex
Shares Repurchased
Dividends Paid
Preferred Dividends
113
BY THE NUMBERS
Balance Sheet
Debt levels to remain high
(US$m)
Total Debtors
Inventories
Fixed Assets
Total Investments
Intangible Assets
Short-term Debt
Total Creditors
Total Provisions
Total Liabilities
Minority Interests
Total Equity
Apr-14A
28
216
814
118
1,177
501
21
748
81
1,351
920
0
258
13
1,191
934
0
152
1,087
0
2,277
183
68
251
Apr-15A
36
232
764
127
1,160
578
23
760
119
1,480
446
0
377
15
837
1,273
0
196
1,469
0
2,306
274
60
333
Apr-16F
98
390
611
134
1,232
586
20
752
119
1,477
446
0
390
23
858
1,263
0
203
1,465
0
2,324
317
69
386
Apr-17F
157
405
624
140
1,327
589
18
745
119
1,470
446
0
405
23
874
1,253
0
209
1,462
0
2,336
382
79
461
Apr-18F
210
421
649
147
1,427
589
16
737
119
1,461
446
0
421
23
890
893
0
216
1,109
0
1,999
800
89
889
Apr-14A
0%
0%
0.4%
(1.41)
0.14
(1.15)
0.0%
NA
106.0
500.8
158.5
(1.18%)
N/A
N/A
Apr-15A
190%
2894%
4.0%
(0.87)
0.14
0.28
0.0%
NA
37.9
168.4
67.7
1.25%
1.35%
2.17%
Apr-16F
10%
155%
9.3%
(0.83)
0.16
1.84
28.0%
NA
48.0
140.4
78.3
7.14%
7.57%
5.11%
Apr-17F
4%
21%
10.9%
(0.79)
0.20
2.22
28.0%
NA
58.9
123.2
79.3
9.08%
9.33%
5.93%
Apr-18F
4%
8%
11.2%
(0.58)
0.41
2.76
28.0%
NA
58.8
122.2
79.4
9.85%
9.89%
6.32%
Apr-14A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
Apr-15A
380.6%
N/A
N/A
17.6%
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
Apr-16F
10.0%
N/A
N/A
10.0%
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
Apr-17F
2.5%
N/A
N/A
10.0%
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
Apr-18F
2.5%
N/A
N/A
10.0%
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
Key Ratios
Revenue growth to revert to single
digits given the mature US market
Revenue Growth
BVPS (US$)
Effective Tax Rate
Inventory Days
ROIC (%)
ROCE (%)
Key Drivers
Asia to grow faster than the US
ASP (% chg, tertiary prod/serv)
Unit sales grth (%,tertiary prod/serv)
Util. rate (%, tertiary prod/serv)
Unit raw mat ASP (%chg,main)
Total Export Sales Growth (%)
Export Sales/total Sales (%)
114
Offshore & MarineSingaporeEquity researchDecember 9, 2015
Company Note
Singapore
Ezion Holdings
ADD (no change)
Liftboats to stay afloat despite the oil tumult
Current price:
Target price:
Previous target:
Up/downside:
S$0.59
S$0.95
S$0.95
61.8%
Reuters:
Bloomberg:
Market cap:
EZHL.SI
EZI SP
US$653.3m
S$923.0m
US$7.49m
S$10.53m
1,578m
58.6%

Current shares o/s
Free float:
No change.
Ezion disappointed in FY15 as it sought to keep its house in order.

Reiterate secular demand for liftboats.
Ezion is combating rate cuts and cancellations, but at the price of lower ROEs.
Stress-testing Ezion, we found that its credit metrics are robust.
We see a meaningful improvement in 2H16 with more rig deliveries. We maintain
our Add call with an unchanged target price, based on 0.8x CY16 P/BV.
2015: getting its house in order

Through 2015, Ezion has reported quarterly earnings which were below expectations,
owing to repeated vessel delivery delays, unexpected downtime plus more demands
from customers which required several rounds of upgrades. We view that 2015 is a
reflection of Ezions rapid built-up over the past 2-3 years which saw them amass an
asset-base of over US$2bn. However, this came at the cost of its foundations which may
not be deep enough. We believe that Ezion would focus on righting the ship in 2015-16.
Liftboats to stay afloat in the oil tumult
Price Close
1.40
118
1.00
102
0.80
86
0.60
70
0.40
80
60
40
20
54
Vol m
1.20
Dec-14
Mar-15
Jun-15
Sep-15
Source: Bloomberg
Price performance
Absolute (%)
Relative (%)
1M
-15.8
-11.3
3M
-15.8
-15.5
12M
-48.5
-35.7
Given the oil tumult, oil companies are more likely to focus on enhancing production,
rather than exploration and development activities. Liftboats, which are a more reliable,
safer and productive way to service shallow-water platforms, are best suited to meet the
oil companies needs. More importantly, liftboats are exposed to oil companies opex,
rather than capex which have suffered the deepest cuts. We reiterate that Ezion is the
first to successfully adapt and introduce liftboats to ASEAN National Oil Companies.
Not entirely insulated; also experiencing industry headwinds

Although Ezion has renewed four out of the five contracts due to expire in 2015 at
similar rates, some of the renewals have come at a cost as some units required
upgrading. This means higher capex, earnings vacuums in the interim and lower return
on assets. Plus, customers are paying more slowly. We estimate that another five
contracts are up for renewal in 2016.
Net gearing of 1.1x as at end-3Q15 (end-FY14: 0.9x)

YTD, Ezion incurred US$340m capex and we forecast c.US$250m in FY16-17. Post2017, Ezion does not have any committed capex. We project a net gearing of 1x for
FY15 and 0.9x for FY16. Stress-testing Ezion, we found that its credit metrics are robust.
The company does not face refinancing pressure in this tough operating environment as
its notes are only payable from 2018 onwards.
Finding a floor to earnings: 2H to see improvement

After consecutive quarterly disappointments, we think that earnings are not far off from
the floor. We envision 4Q15 to be a slightly weaker quarter with US$422m net profit, but
project 1Q16 to be incrementally better. We could see a meaningful improvement in
2H16 with more rig deliveries. We maintain Add on Ezion with an unchanged 0.8x CY16
P/BV-target price (20% discount to justified 1x P/BV, to account for receivables or
impairment risks). Positive earnings revisions are a potential catalyst.
[X]
Financial Summary
Analyst
YEO Zhi Bin
T (65) 6210 8669
E zhibin.yeo@cimb.com
Revenue (US$m)
Net Profit (US$m)
Core EPS (US$)
Core EPS Growth
FD Core P/E (x)
DPS (US$)
Dividend Yield
EV/EBITDA (x)
P/FCFE (x)
Net Gearing
P/BV (x)
ROE
Dec-13A
281.9
164.6
152.5
0.10
71.7%
4.28
0.001
0.241%
9.11
NA
115%
0.74
20.2%
Dec-14A
386.5
281.4
215.0
0.12
22.0%
3.47
0.001
0.241%
6.04
NA
86%
0.50
17.4%
Dec-15F
339.6
241.3
106.3
0.06
(48.1%)
6.70
0.001
0.241%
8.24
NA
104%
0.50
7.6%
0%
0.83
Dec-16F
393.3
284.8
133.6
0.08
34.9%
4.95
0.001
0.241%
6.64
182.0
88%
0.46
9.8%
0%
0.68
Dec-17F
506.2
348.9
189.7
0.12
41.5%
3.49
0.001
0.241%
4.85
6.1
65%
0.40
12.4%
0%
0.85

Powered by
EFA
BY THE NUMBERS
Share price info

Share px perf. (%)
1M
3M
12M
Relative
-11.3
-15.5
-35.7
Absolute
-15.8
-15.8
Major shareholders
Chew Thiam Keng
-48.5
% held
14.2
Commonwealth Bank of Australia
8.1
Quek Leng Chan
7.6
P/BV vs ROE
3.00
30.0%
2.50
25.0%
2.00
20.0%
1.50
15.0%
1.00
10.0%
0.50
5.0%
0.00
0.0%
Growth
20.0
18.0
16.0
14.0
12.0
10.0
8.0
6.0
4.0
2.0
0.0
200%
170%
140%
110%
80%
50%
20%
-10%
-40%
-70%
-100%
ROE (rhs)
Profit & Loss

(US$m)
Total Net Revenues
Gross Profit
Operating EBITDA
Operating EBIT
Exceptional Items
Pre-tax Profit
Taxation
Profit After Tax
Minority Interests
Preferred Dividends
Net Profit
Dec-13A
281.9
133.2
164.6
(45.4)
119.2
(6.8)
30.9
0.0
143.2
19.7
163.0
(2.6)
Dec-14A
386.5
196.0
281.4
(102.8)
178.6
(16.7)
28.0
0.0
190.0
35.8
225.8
(2.0)
Dec-15F
339.6
122.2
241.3
(138.8)
102.5
(21.5)
34.7
0.0
115.6
8.0
123.6
(1.2)
Dec-16F
393.3
152.2
284.8
(152.3)
132.5
(21.0)
32.5
0.0
144.0
0.0
144.0
(2.2)
Dec-17F
506.2
214.8
348.9
(159.5)
189.5
(21.0)
32.5
0.0
201.0
0.0
201.0
(3.0)
160.3
(0.1)
(7.8)
223.7
(0.1)
(8.6)
122.4
0.0
(16.1)
141.9
0.0
(8.3)
197.9
0.0
(8.3)
152.5
133.1
133.1
215.0
179.6
179.6
106.3
98.4
98.4
133.6
133.6
133.6
189.7
189.7
189.7
Cash Flow
(US$m)
EBITDA
Tax Paid
Capex
Shares Repurchased
Dividends Paid
Preferred Dividends
Dec-13A
164.6
Dec-14A
281.4
Dec-15F
241.3
Dec-16F
284.8
Dec-17F
348.9
(6.3)
(62.3)
(19.5)
1.0
(9.4)
(16.3)
15.8
(12.2)
(2.3)
143.2
(746.0)
75.8
(62.7)
0.0
(732.9)
530.2
73.9
0.0
(0.8)
0.0
12.0
615.3
25.7
(59.5)
(577.4)
(33.5)
29.6
(22.5)
(1.6)
191.1
(529.0)
17.7
(14.7)
0.0
(526.0)
289.7
157.5
0.0
(1.0)
0.0
83.8
530.1
195.2
(45.2)
(312.4)
0.0
0.0
0.0
(26.0)
(1.2)
194.5
(346.5)
0.0
0.0
0.0
(346.5)
100.0
0.0
0.0
(1.2)
(16.1)
(122.2)
(39.4)
(191.4)
(52.0)
(126.0)
(26.0)
(2.2)
257.6
(154.0)
0.0
0.0
0.0
(154.0)
(100.0)
0.0
0.0
(1.2)
(8.3)
(26.0)
(135.4)
(31.8)
3.6
129.6
(26.0)
(3.0)
310.5
(102.0)
0.0
0.0
0.0
(102.0)
(100.0)
0.0
0.0
(1.2)
(8.3)
(26.0)
(135.4)
73.1
108.5
234.5
116
BY THE NUMBERS
Balance Sheet
(US$m)
Total Debtors
Inventories
Fixed Assets
Total Investments
Intangible Assets
Short-term Debt
Total Creditors
Total Provisions
Total Liabilities
Minority Interests
Total Equity
Dec-13A
166
107
0
107
380
1,464
194
0
5
1,663
223
Dec-14A
372
160
0
128
659
2,136
173
0
14
2,322
288
Dec-15F
219
223
0
107
548
2,343
208
0
14
2,565
308
Dec-16F
218
237
0
107
561
2,345
240
0
14
2,599
288
Dec-17F
322
277
0
107
706
2,287
273
0
14
2,574
268
146
7
376
863
132
7
427
1,208
155
7
470
1,288
169
7
465
1,208
200
7
476
1,128
4
866
0
1,243
800
(0)
800
33
1,241
0
1,668
1,313
(0)
1,313
33
1,321
0
1,792
1,322
(0)
1,322
33
1,241
0
1,706
1,454
(0)
1,454
33
1,161
0
1,637
1,643
(0)
1,643
Dec-13A
77.7%
122%
58.4%
(0.65)
0.56
9.73
1.62%
0.82%
106.5
125.8
11.6%
8.33%
9.03%
Dec-14A
37.1%
71%
72.8%
(0.71)
0.83
7.94
0.90%
0.66%
125.9
133.1
9.7%
7.86%
8.03%
Dec-15F
(12.1%)
(14%)
71.1%
(0.87)
0.83
3.94
1.00%
1.19%
205.8
136.8
3.7%
3.74%
4.34%
Dec-16F
15.8%
18%
72.4%
(0.80)
0.91
5.10
1.50%
0.88%
214.2
152.4
4.4%
4.69%
5.08%
Dec-17F
28.7%
22%
68.9%
(0.67)
1.03
7.29
1.50%
0.62%
185.5
154.3
6.2%
6.49%
6.69%
Dec-13A
N/A
N/A
N/A
21,893.3
60
N/A
Dec-14A
N/A
N/A
N/A
26,740.2
72
N/A
Dec-15F
N/A
N/A
N/A
27,893.7
73
N/A
Dec-16F
N/A
N/A
N/A
40,262.6
74
N/A
Dec-17F
N/A
N/A
N/A
N/A
Key Ratios
Revenue Growth
BVPS (US$)
Effective Tax Rate
Inventory Days
ROIC (%)
ROCE (%)
Key Drivers
Outstanding Orderbook (US$m)
Order Book Wins (US$m)
Order Book Depletion (US$m)
Average Day Rate Per Ship (US$)
No. Of Ships (unit)
Average Utilisation Rate (%)
117
Company Note
Singapore
Far East Hospitality Trust
HOLD (no change)
Time to check out
Current price:
Target price:
Previous target:
Up/downside:
S$0.65
S$0.70
S$0.70
8.0%
Reuters:
Bloomberg:
Market cap:
FAEH.SI
FEHT SP
US$816.7m
S$1,154m
US$0.35m
S$0.49m
1,769m
61.4%

Current shares o/s
Free float:
0.900
104.0
0.800
97.8
0.700
91.5
0.600
85.3
0.500
6
79.0
Vol m
2
Dec-14
Mar-15
Jun-15
Sep-15
Source: Bloomberg
Price performance
Absolute (%)
Relative (%)
1M
-3.0
1.5
Softer macro conditions, strong S$ and haze led to decline in NPI.

Lower room rents prop up hotel occupancy.
Service residences comparatively worse off with fall in corporate demand.
We project 15m visitors for 2015 vs. 15.1m in 2014.
Watch the supply bump in 4Q; maintain Hold.
Softer macro conditions, strong S$ and haze led to decline in NPI

On the back of softer macro conditions, a strong S$ and the outbreak of the haze, FEHT
reported a 6% yoy dip in NPI for 9M15 (S$77.4m). On a qoq basis, a seasonal uptick in
tourist arrivals vs. 2Q and lower ADRs arrested the quarterly decline while NPI for 3Q15
grew 3% qoq to S$26.9m.
Lower room rents prop up hotel occupancy

On the back of sluggish visitor arrivals, FEHT charged a competitive room rent of
S$171/night for 9M15 (-9% yoy). In turn, this helped to prop up hotel occupancy, which
averaged 85.5% for 9M15 (+1.9% pts). As a result, 9M15 RevPAR slid 6.3% yoy to
S$146. For Jul-Aug 2015, STB estimates that RevPAR across all hotel segments
decreased by 2.1% yoy.
No changes.
Price Close
3M
4.0
4.3
12M
-21.8
-9.0
Service residences comparatively worse off with fall in corporate

demand
Affected by ongoing renovation at Regency House (completed by 1Q16) and a fall in
corporate demand, service residences were comparatively worse off. Average
occupancy for 9M15 dropped 0.5% pts yoy to 88.4% while FEHT lowered ADR by 6.8%
yoy to S$234 to attract group demand. RevPAR correspondingly fell by 7.3% yoy to
S$207. FEHT shared that contributions from FIs fell to 17.9% of service residences
revenue for 3Q15 (3Q14: 27.6%) while oil & gas dropped to 11.9% (3Q14: 28.4%).
We project 15m visitors for 2015 (2014: 15.1m)

In 8M15, visitor arrivals dipped 0.6% yoy to 10.2m. We are forecasting 15m visitors for
2015 vs. 15.1m in 2014. Given the currency weakness, STB reported that Indonesian
visitors dropped by 11.2% yoy while Australian visitors decreased by 6.5%. The shortfall
was made up by Chinese visitors, which rose by 19.3% yoy. The trend is in line with
what FEHT reported, as it saw contributions from North Asia increase by 2.1% pts in
3Q15 while contributions from Southeast Asia fell by 2.8% pts.
Watch the supply bump in 4Q15; maintain Hold

With South Beach (upscale segment) and Hotel Boss (mid-tier) expected to open in
4Q15, we believe that FEHT may have to lower room rates further to maintain
occupancies and market share. More importantly, South Beach and Hotel Boss account
for around half of the upcoming 4,361 rooms for 2015. Hence, we maintain our Hold
recommendation and keep our DDM-based target price unchanged.
[X]
Financial Summary
Analyst
LOCK Mun Yee
T (65) 6210 8606

Net Profit (S$m)
Core EPS (S$)
Core EPS Growth
FD Core P/E (x)
DPS (S$)
Dividend Yield
Asset Leverage
BVPS (S$)
P/BV (x)
Recurring ROE
Dec-13A
122.5
111.9
138.2
94.60
0.050
348%
12.78
0.056
8.74%
30.8%
0.98
0.66
5.13%
Dec-14A
121.7
106.3
67.7
91.50
0.042
(16%)
15.19
0.051
7.97%
26.8%
0.97
0.67
4.34%
Dec-15F
117.2
106.2
75.1
86.02
0.042
(1%)
15.32
0.048
7.48%
27.6%
0.96
0.67
4.35%
0%
1.00
Dec-16F
119.9
108.7
76.4
88.00
0.043
1%
15.15
0.049
7.61%
28.9%
0.96
0.67
4.43%
0%
1.07
Dec-17F
122.0
110.6
77.0
89.76
0.043
0%
15.11
0.050
7.71%
29.6%
0.95
0.68
4.47%
0%
1.04

Powered by
EFA
BY THE NUMBERS
Share price info

Share px perf. (%)
1M
3M
12M
1.40
32.00%
0.0600
10.0%
1.20
30.86%
0.0500
8.3%
0.0400
6.7%
0.0300
5.0%
Relative
1.5
4.3
-9.0
Absolute
-3.0
4.0
-21.8
1.00
29.71%
% held
0.80
28.57%
17.4
0.60
27.43%
0.40
26.29%
0.0200
3.3%
0.20
25.14%
0.0100
1.7%
0.00
24.00%
0.0000
0.0%
Major shareholders
Golden Development Pte Ltd
Golden Landmark Pte Ltd
10.9
Far East Organization
10.3
DPS (lhs)
Profit & Loss

(S$m)
Rental Revenues
Other Revenues
Net Property Income
Management Fees
Trustee's Fees
EBITDA
EBIT
Net Interest Income
Associates' Profit
Exceptional Items
Pre-tax Profit
Taxation
Minority Interests
Preferred Dividends
Net Profit
Dec-13A
122.5
0.0
122.5
(10.6)
111.9
0.0
(11.5)
(0.3)
(0.6)
99.5
0.0
99.5
(15.2)
0.0
0.0
53.8
138.2
0.0
0.0
0.0
138.2
94.6
Dec-14A
121.7
0.0
121.7
(15.4)
106.3
0.0
(12.0)
(0.3)
(1.4)
92.6
0.0
92.6
(17.5)
0.0
0.0
(7.4)
67.7
0.0
0.0
0.0
67.7
91.5
Dec-15F
117.2
0.0
117.2
(11.0)
106.2
0.0
(11.4)
(0.3)
(0.6)
94.0
0.0
94.0
(18.9)
0.0
0.0
0.0
75.1
0.0
0.0
0.0
75.1
86.0
Dec-16F
119.9
0.0
119.9
(11.3)
108.7
0.0
(11.4)
(0.3)
(0.6)
96.4
0.0
96.4
(20.0)
0.0
0.0
0.0
76.4
0.0
0.0
0.0
76.4
88.0
Dec-17F
122.0
0.0
122.0
(11.5)
110.6
0.0
(12.0)
(0.3)
(0.6)
97.7
0.0
97.7
(20.7)
0.0
0.0
0.0
77.0
0.0
0.0
0.0
77.0
89.8
Dec-13A
138.2
15.2
1.9
0.0
(44.7)
110.6
0.0
(200.3)
0.0
(200.3)
132.2
67.8
(102.9)
(13.9)
83.2
(6.6)
(89.8)
27.2
Dec-14A
67.7
17.5
2.6
0.0
18.2
105.9
0.0
(8.1)
0.0
(8.1)
215.6
0.0
(93.4)
(16.3)
105.9
203.7
97.8
295.9
Dec-15F
75.1
18.9
0.8
0.0
9.7
104.5
0.0
(32.7)
0.0
(32.7)
27.7
0.0
(86.0)
(18.9)
(77.2)
(5.4)
71.8
80.6
Dec-16F
76.4
20.0
0.1
0.0
9.7
106.2
0.0
(32.7)
0.0
(32.7)
47.7
0.0
(88.0)
(20.0)
(60.3)
13.2
73.5
101.2
Dec-17F
77.0
20.7
0.1
0.0
10.2
107.9
0.0
(32.8)
0.0
(32.8)
27.7
0.0
(89.8)
(20.7)
(82.7)
(7.6)
75.2
82.2
Cash Flow
(S$m)
Pre-tax Profit
Tax Paid
Others
Capex
Dividends Paid
119
BY THE NUMBERS
Balance Sheet
(S$m)
Total Investments
Intangible Assets
Inventories
Trade Debtors
Trade Creditors
Short-term Debt
Minority Interests
Total Equity
Dec-13A
2,475
0
0
2,475
29
0
22
6
57
4
0
5
9
779
8
787
1,735
0
0
1,735
Dec-14A
2,476
0
0
2,476
21
0
19
21
61
3
0
122
125
680
8
688
1,724
0
0
1,724
Dec-15F
2,509
0
0
2,509
17
0
19
21
57
4
0
122
126
707
8
716
1,724
0
0
1,724
Dec-16F
2,541
0
0
2,541
32
0
19
21
72
4
0
122
126
755
8
764
1,724
0
0
1,724
Dec-17F
2,574
0
0
2,574
27
0
19
21
67
4
0
122
126
783
8
791
1,724
0
0
1,724
Dec-13A
190%
188%
91.3%
170%
6.56
0%
137%
6.28
6.28
3.20
5.82%
Dec-14A
(1%)
(5%)
87.4%
(9%)
5.29
0%
265%
0.49
0.49
0.17
2.67%
Dec-15F
(4%)
(0%)
90.6%
(6%)
4.97
0%
229%
0.45
0.45
0.13
2.94%
Dec-16F
2%
2%
90.6%
2%
4.81
0%
230%
0.57
0.57
0.25
2.95%
Dec-17F
2%
2%
90.6%
1%
4.73
0%
233%
0.53
0.53
0.21
2.93%
Dec-13A
165.0
86.4%
2,474.7
-
Dec-14A
155.8
83.3%
2,476.1
-
Dec-15F
117.9
84.0%
2,508.8
-
Dec-16F
121.7
85.0%
2,541.5
-
Dec-17F
122.9
85.0%
2,574.3
-
Key Ratios
NPI Growth
DPS Growth
Effective Tax Rate
Current Ratio
Quick Ratio
Cash Ratio
Key Drivers
RevPAR (S$)
Occupancy (%)
120
Company Note
Singapore
First REIT
ADD (no change)
Acquisition in Kupang
Current price:
Target price:
Previous target:
Up/downside:
S$1.19
S$1.48
S$1.48
24.5%
Reuters:
Bloomberg:
Market cap:
FRET.SI
FIRT SP
US$631.7m
S$892.5m
US$0.56m
S$0.79m
727.3m
66.2%

Current shares o/s
Free float:
First AEI at Siloam Hospital Surabaya to enhance asset return.

Proposed acquisition of Siloam Hospital Kupang in the works.
Healthy balance sheet, visible acquisition growth potential.
We maintain our Add recommendation with a target price of S$1.48.
Organic and inorganic factors boosted 3Q15 performance

FIRTs 3Q15 6.2% yoy rise in distributable income to S$15.6m was due to the
acquisition of Siloam Sriwijaya in Dec 14 as well as better performance of its Indonesia
and Singapore properties. Although property expenses dipped due to lower expenses
from Sarang Hospital in South Korea, higher interest expense partly offset the gains.
Undertaking first AEI to enhance returns
Proposed acquisition of Siloam Hospital Kupang underway
1.500
120.0
1.400
113.8
1.300
107.5
1.200
101.3
1.100
30
95.0
20
Vol m
Organic and acquisition drivers boost 3Q performance.
FIRT announced its first asset enhancement exercise involving Siloam Hospital
Surabaya. The trust has identified two hospitals, including Siloam Hospitals Lippo
Cikarang in East Jakarta, that could yield asset-enhancement opportunities, thus
improving return on assets in the longer run. We have not factored in any accretion from
this exercise into our current numbers.
No change
Price Close
FIRT also announced the proposed acquisition of Siloam Hospital Kupang and Lippo
Plaza Kupang for S$70m, a 7.2% discount to independent valuation. The projected rental
income of S$6.94m pa translates to an attractive triple net yield of 9.91%. This property will
expand the trusts asset base to S$1.25bn and boost DPU by 2.7%. Siloam Hospital
Kupang commenced operations in 2014 and offers emergency & trauma, mother and
child, internal medicine, cardiology, O&G, neurology, and other specialities.
10
Dec-14
Mar-15
Jun-15
Inorganic expansion will remain a visible growth driver
Sep-15
Source: Bloomberg
Price performance
Absolute (%)
Relative (%)
1M
-1.7
2.8
3M
-3.3
-3.0
12M
-4.4
8.4
The purchase will be funded by a combination of debt (S$55m) and consideration units
(S$15m). This could potentially raise the trusts gearing to 36-37%, still well within the
45% ceiling guideline effective from Jan 2016. Acquisition growth will remain one of
FIRTs growth drivers, in our view, as the trust has the right of first refusal over Lippo
Karawaci hospital assets.
Maintain Add
We maintain our Add rating with an unchanged DDM-based target price of S$1.48. FIRT
offers investors FY16-17 DPU yield of 7.3-7.4%, with a stable earnings profile. Potential
yield accretive acquisitions and asset-enhancement activities could act as re-rating
catalysts.
[X]
Financial Summary
Analyst
LOCK Mun Yee
T (65) 6210 8606

Net Profit (S$m)
Core EPS (S$)
Core EPS Growth
FD Core P/E (x)
DPS (S$)
Dividend Yield
Asset Leverage
BVPS (S$)
P/BV (x)
Recurring ROE
Dec-13A
83.3
80.2
117.8
52.09
0.083
33.1%
14.25
0.075
6.32%
31.9%
0.97
1.23
9.29%
Dec-14A
93.3
91.9
90.6
58.22
0.073
(11.4%)
16.25
0.081
6.76%
32.7%
1.02
1.17
7.38%
Dec-15F
101.5
99.8
58.9
65.71
0.080
8.7%
14.95
0.086
7.22%
32.8%
0.99
1.21
7.94%
1.01
Dec-16F
103.4
101.8
60.4
67.19
0.080
0.9%
14.82
0.087
7.33%
33.0%
0.97
1.22
8.20%
1.00
Dec-17F
105.4
103.7
61.9
68.71
0.082
1.8%
14.56
0.089
7.44%
33.1%
0.96
1.24
8.47%
0.99
Powered by
EFA
BY THE NUMBERS
Share price info

Share px perf. (%)
1M
3M
Relative
2.8
-3.0
Absolute
-1.7
-3.3
Major shareholders
12M
8.4
-4.4
% held
LIPPO KARAWACI TBK PT
27.7
PT MENARA TIRTA INDAH
6.0
1.80
1.60
1.40
1.20
1.00
0.80
0.60
0.40
0.20
0.00
35.0%
31.1%
27.2%
23.3%
19.4%
15.6%
11.7%
7.8%
3.9%
0.0%
0.1000
0.0900
0.0800
0.0700
0.0600
0.0500
0.0400
0.0300
0.0200
0.0100
0.0000
DPS (lhs)
8.0%
7.2%
6.4%
5.6%
4.8%
4.0%
3.2%
2.4%
1.6%
0.8%
0.0%
Profit & Loss

(S$m)
Rental Revenues
Other Revenues
Net Property Income
Management Fees
Trustee's Fees
EBITDA
EBIT
Net Interest Income
Associates' Profit
Exceptional Items
Pre-tax Profit
Taxation
Minority Interests
Preferred Dividends
Net Profit
Dec-13A
83.3
0.0
83.3
(3.1)
80.2
0.0
(8.0)
(0.3)
(1.7)
70.2
0.0
70.2
(12.2)
Dec-14A
93.3
0.0
93.3
(1.4)
91.9
0.0
(9.1)
(0.3)
(1.9)
80.5
0.0
80.5
(15.0)
Dec-15F
101.5
0.0
101.5
(1.6)
99.8
0.0
(9.1)
(0.3)
(2.0)
88.3
0.0
88.3
(15.0)
Dec-16F
103.4
0.0
103.4
(1.7)
101.8
0.0
(9.1)
(0.3)
(2.1)
90.2
0.0
90.2
(15.1)
Dec-17F
105.4
0.0
105.4
(1.7)
103.7
0.0
(9.1)
(0.3)
(2.1)
92.1
0.0
92.1
(15.1)
0.0
61.3
119.4
(1.5)
0.0
47.2
112.7
(22.1)
0.0
0.0
73.3
(14.4)
0.0
0.0
75.2
(14.7)
0.0
0.0
77.0
(15.1)
117.8
52.1
90.6
58.2
58.9
65.7
60.4
67.2
61.9
68.7
Cash Flow
(S$m)
Pre-tax Profit
Tax Paid
Others
Capex
Dividends Paid
Dec-13A
119.4
12.2
(0.3)
(13.1)
(54.8)
63.3
Dec-14A
112.7
15.0
8.9
(16.2)
(39.7)
80.8
Dec-15F
73.3
15.0
(0.5)
(14.4)
0.0
73.5
Dec-16F
75.2
15.1
(0.1)
(14.7)
0.0
75.4
Dec-17F
77.0
15.1
(0.1)
(15.1)
0.0
76.9
(142.0)
0.2
(141.8)
140.6
0.0
(42.8)
(10.5)
87.3
8.8
(78.3)
49.9
(67.7)
0.2
(67.5)
39.3
0.0
(39.8)
(13.8)
(14.4)
(1.1)
13.5
37.5
0.0
0.2
0.2
0.0
0.0
(64.4)
(15.2)
(79.6)
(5.9)
73.9
58.6
0.0
0.2
0.2
0.0
0.0
(65.8)
(15.2)
(81.1)
(5.6)
75.7
60.5
0.0
0.1
0.1
0.0
0.0
(67.3)
(15.2)
(82.6)
(5.5)
77.1
61.9
122
BY THE NUMBERS
Balance Sheet
(S$m)
Total Investments
Intangible Assets
Inventories
Trade Debtors
Trade Creditors
Short-term Debt
Minority Interests
Total Equity
Dec-13A
1,052
0
0
1,053
29
Dec-14A
1,172
0
1
1,173
28
Dec-15F
1,172
0
1
1,173
22
Dec-16F
1,172
0
1
1,173
17
Dec-17F
1,172
0
1
1,173
11
25
2
56
30
0
20
50
354
22
376
683
9
3
40
20
26
21
68
370
29
399
745
10
3
35
21
26
21
69
370
29
399
740
10
3
29
21
26
21
69
370
29
399
734
10
3
24
21
26
21
69
370
29
399
729
683
745
740
734
729
Dec-13A
44.5%
40.1%
96.3%
3.58%
5.68
1.3%
44%
1.12
1.12
0.59
12.2%
Dec-14A
12.0%
14.5%
98.5%
7.05%
5.29
19.6%
64%
0.58
0.58
0.41
7.8%
Dec-15F
8.8%
8.7%
98.4%
6.71%
5.80
19.6%
109%
0.51
0.51
0.33
4.9%
Dec-16F
1.9%
1.9%
98.4%
1.52%
5.93
19.6%
109%
0.43
0.43
0.24
5.0%
Dec-17F
1.9%
1.9%
98.4%
1.52%
6.06
19.6%
109%
0.35
0.35
0.16
5.2%
Dec-13A
N/A
N/A
N/A
N/A
100.0%
1,052.3
N/A
Dec-14A
N/A
N/A
N/A
N/A
100.0%
1,172.0
N/A
Dec-15F
N/A
N/A
N/A
N/A
100.0%
1,172.0
N/A
Dec-16F
N/A
N/A
N/A
N/A
100.0%
1,172.0
N/A
Dec-17F
N/A
N/A
N/A
N/A
100.0%
1,172.0
N/A
Key Ratios
NPI Growth
DPS Growth
Effective Tax Rate
Current Ratio
Quick Ratio
Cash Ratio
Key Drivers
RevPAR (S$)
Occupancy (%)
123
PlantationsSingaporeEquity researchDecember 9, 2015
Company Note
Singapore
First Resources Ltd
ADD (no change)
Top pick among Singapore planters
Current price:
Target price:
Previous target:
Up/downside:
S$1.99
S$2.38
S$2.38
19.6%
Reuters:
Bloomberg:
Market cap:
FRLD.SI
FR SP
US$2,233m
S$3,155m
US$2.87m
S$4.04m
1,584m
31.3%

Current shares o/s
Free float:
Price Close
2.30
129.0
2.10
121.0
1.90
113.0
1.70
105.0
1.50
97.0
1.30
15
89.0
Vol m
10
5
Mar-15
Young estates offer strong output growth prospects.

Appointed as one of Pertaminas biodiesel suppliers.
Changes in IAS41 policy could raise depreciation charges by US$20m in 2016.
9M15 output growth of 15% is in line with its target and higher than peers.
Maintain Add, with target price of S$2.38 (13x forward P/E).
Efficient and young estates

We continue to favour the group for its young estate profile (average age of nine years)
as this bodes well for its output growth prospects, which will be led by the new mature
areas, improving yields from young estates (which covers 27% of the groups planted
area) and ongoing rehabilitation of its newly-acquired estates. The favourable yields
achieved by its estates, coupled with good cost controls, enabled the group to produce
CPO at a lower cost per tonne of approximately US$230 for FY15.
Appointed biodiesel supplier to Pertamina
No changes.
Dec-14
Jun-15
Sep-15
Source: Bloomberg
Price performance
Absolute (%)
Relative (%)
1M
0.5
5.0
3M
31.4
31.7
12M
9.3
22.1
The group owns 850k tonnes of refining capacity, allowing the group to refine all of its
CPO in-house and extract better profit margins for its palm products. Its biodiesel plant
in Indonesia stands to benefit from the higher demand in the country following the
governments moves to raise its biodiesel mandates to 20% blend in 2016 from 15%
currently. The group was recently appointed to supply 73,000 kilolitres of biodiesel to
Pertamina during Nov 15-Apr 16.
Potential IAS41 impact on depreciation

The group has revealed that the changes in accounting policy IAS41 for biological
assets will result in a one-off adjustment of its plantation assets back to historical costs
less accumulated depreciation and impairment. This will reduce its shareholders equity
and raise its depreciation charges as the revised policy requires the mature estates to
be depreciated over their useful lives. Our calculation reveals that the accounting
changes could lead to a US$20m rise in depreciation charges beginning 1 Jan 2016.
Hitting key production targets in FY15

FFB production growth from its nucleus estates rose 15% in 9M15, in line with the
groups guidance of 10-15% growth and above the achievement of most of its peers.
However, its new planting achievement of 4,127 ha is below its earlier target of 5,00010,000 ha per annum following the adoption of more stringent sustainable palm oil
policies.
Maintain Add
First Resources is our top pick among the regional planters due to its superior operating
efficiency compared to peers, strong FFB output growth prospects and attractive P/E
valuations vs. peers. We maintain our Add call and target price of S$2.38, based on
forward P/E of 13x (historical average).
[X]
Financial Summary
Analyst
Ivy NG Lee Fang, CFA
T (60) 3 2261 9073
E ivy.ng@cimb.com
Revenue (US$m)
Net Profit (US$m)
Core EPS (US$)
Core EPS Growth
FD Core P/E (x)
DPS (US$)
Dividend Yield
EV/EBITDA (x)
P/FCFE (x)
Net Gearing
P/BV (x)
ROE
Dec-13A
626.5
359.5
238.2
0.14
(0.4%)
10.27
0.032
2.29%
6.94
NA
20.9%
2.25
20.7%
Dec-14A
615.5
297.6
173.4
0.11
(20.2%)
12.87
0.036
2.58%
8.45
19.87
20.8%
2.10
16.9%
Dec-15F
458.6
233.0
129.8
0.08
(25.2%)
17.20
0.025
1.74%
10.89
80.25
20.0%
1.93
11.7%
0.98
Dec-16F
583.8
313.9
166.8
0.11
28.5%
13.38
0.032
2.24%
8.05
32.20
16.7%
1.76
13.8%
1.05
Dec-17F
710.3
371.4
207.3
0.13
24.3%
10.77
0.039
2.79%
6.71
19.73
11.5%
1.58
15.4%
1.06

Powered by
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BY THE NUMBERS
Share price info

Share px perf. (%)
Relative
Absolute
Major shareholders
Eight Capital Inc
1M
5.0
0.5
3M
31.7
31.4
12M
22.1
9.3
P/BV vs ROE
3.50
25.0%
3.00
21.4%
2.50
17.9%

Growth
25.0
60%
20.0
40%
20%
0%
% held
2.00
14.3%
15.0
63.2
1.50
10.7%
10.0
1.00
7.1%
FMR
6.3
DB Intl Trust Singapore
5.6
0.50
3.6%
0.00
0.0%
5.0
-20%
0.0
Jan-11 Jan-12
-40%
Jan-13
ROE (rhs)
Profit & Loss

(US$m)
Total Net Revenues
Gross Profit
Operating EBITDA
Operating EBIT
Exceptional Items
Pre-tax Profit
Taxation
Profit After Tax
Minority Interests
Preferred Dividends
Net Profit
Dec-13A
626.5
381.7
359.5
(27.6)
331.9
(18.3)
0.0
0.0
313.6
Dec-14A
615.5
323.4
297.6
(30.7)
266.9
(15.0)
0.0
0.0
251.9
Dec-15F
458.6
279.4
233.0
(31.9)
201.0
(18.2)
0.0
0.0
182.8
Dec-16F
583.8
355.8
313.9
(54.6)
259.4
(18.2)
0.0
0.0
241.1
Dec-17F
710.3
432.8
371.4
(55.4)
316.0
(18.2)
0.0
0.0
297.7
313.6
(67.5)
251.9
(71.2)
182.8
(43.9)
241.1
(62.7)
297.7
(76.3)
246.1
(7.9)
180.8
(7.4)
138.9
(9.2)
178.5
(11.7)
221.5
(14.2)
238.2
217.2
217.2
173.4
173.4
173.4
129.8
129.8
129.8
166.8
166.8
166.8
207.3
207.3
207.3
Cash Flow
(US$m)
EBITDA
Tax Paid
Capex
Shares Repurchased
Dividends Paid
Preferred Dividends
Dec-13A
359.5
Dec-14A
297.6
Dec-15F
233.0
Dec-16F
313.9
Dec-17F
371.4
(3.8)
(3.8)
(34.6)
15.0
16.9
(41.9)
(17.8)
(65.3)
200.0
(181.0)
0.8
(13.8)
(76.7)
222.9
(204.2)
0.0
(18.2)
(43.9)
187.8
(160.0)
0.0
(18.2)
(62.7)
229.3
(160.0)
0.0
(18.2)
(76.3)
273.1
(160.0)
(54.5)
(235.5)
(55.3)
0.2
(10.3)
(214.5)
103.9
0.3
0.0
(160.0)
0.0
0.0
0.0
(160.0)
0.0
0.0
0.0
(160.0)
0.0
0.0
(51.0)
(57.6)
(38.9)
(50.0)
(62.2)
16.4
(89.7)
(125.2)
(90.8)
(14.3)
23.2
69.8
78.2
112.3
26.9
0.0
(38.9)
(11.1)
27.8
51.1
0.0
(50.0)
19.3
69.3
92.6
0.0
(62.2)
50.9
113.1
136.4
125
BY THE NUMBERS
Balance Sheet
(US$m)
Total Debtors
Inventories
Fixed Assets
Total Investments
Intangible Assets
Short-term Debt
Total Creditors
Total Provisions
Total Liabilities
Minority Interests
Total Equity
Dec-13A
272
51
59
28
410
303
0
102
965
1,370
3
0
60
18
80
3
484
173
660
0
740
993
47
1,040
Dec-14A
351
46
49
30
475
338
0
86
1,099
1,523
11
0
57
20
88
3
569
222
794
0
882
1,063
53
1,116
Dec-15F
340
39
32
30
440
366
0
86
1,199
1,651
11
0
50
20
82
3
569
222
794
0
876
1,154
62
1,216
Dec-16F
359
47
41
30
477
372
0
86
1,299
1,756
11
0
64
20
96
3
569
222
794
0
889
1,271
73
1,344
Dec-17F
410
56
50
30
546
376
0
86
1,399
1,861
11
0
78
20
109
3
569
222
794
0
903
1,416
88
1,503
Dec-13A
3.8%
(3.0%)
57.4%
(0.14)
0.63
15.18
21.5%
21.4%
22.42
87.34
88.9
19.2%
20.8%
14.1%
Dec-14A
(1.8%)
(17.2%)
48.4%
(0.15)
0.67
13.26
28.2%
33.2%
24.02
67.32
73.0
15.5%
16.9%
10.2%
Dec-15F
(25.5%)
(21.7%)
50.8%
(0.15)
0.73
8.62
24.0%
30.0%
28.33
82.17
109.4
10.6%
11.8%
7.5%
Dec-16F
27.3%
34.8%
53.8%
(0.14)
0.80
11.12
26.0%
30.0%
22.87
58.54
92.0
12.8%
14.2%
9.0%
Dec-17F
21.7%
18.3%
52.3%
(0.11)
0.89
13.55
25.6%
30.0%
23.28
59.58
93.6
14.7%
16.0%
10.2%
Dec-13A
170,596
120,978
18.7
6.5%
857
Dec-14A
194,607
132,220
18.7
8.0%
821
Dec-15F
212,607
146,372
19.3
14.9%
670
Dec-16F
230,607
170,565
19.4
18.0%
750
Dec-17F
248,607
194,576
19.3
11.5%
800
Key Ratios
Revenue Growth
BVPS (US$)
Effective Tax Rate
Inventory Days
ROIC (%)
ROCE (%)
Key Drivers
Planted Estates (ha)
Mature Estates (ha)
FFB Yield (tonnes/ha)
FFB Output Growth (%)
CPO Price (US$/tonne)
126
Company Note
Singapore
Frasers Centrepoint Ltd
ADD (no change)
Revving all engines
Current price:
Target price:
Previous target:
Up/downside:
S$1.71
S$2.04
S$2.04
19.5%
Reuters:
Bloomberg:
Market cap:
FRCT.SI
FCL SP
US$3,504m
S$4,950m
US$0.19m
S$0.26m
2,889m
12.0%

Current shares o/s
Free float:
No change.
Strong development income visibility with S$3.1bn of unbilled revenue.
Hospitality portfolio expected to rise significantly by 2019.
Office and retail developments underway to provide room for medium-term rental
income expansion.
Foray into Thailand through a strategic stake in Golden Land.
Maintain Add with target price of S$2.04.
S$3.1bn of unrecognised residential sales lend visibility

Development earnings visibility is strong with total unrecognised revenue of S$3.1bn,
largely from Singapore (S$1.2bn), where North Park Residences is 66% sold. In
addition, FPA will launch a further 3,850 units in FY16 and this will augment the S$1.5bn
unbilled revenue in Australia. While landbanking in Singapore is challenging, FPA
increased its landbank in Australia by another 2,833 units in FY15 to reach a total
development pipeline GDV of S$8.5bn.
Development pipeline for rental income expansion
Price Close

121.0
1.800
112.7
1.600
104.3
1.400
4
3
2
1
96.0
Vol m
2.000
Dec-14
Mar-15
Jun-15
Sep-15
Source: Bloomberg
Price performance
Absolute (%)
Relative (%)
1M
3.3
7.8
3M
11.8
12.1
12M
3.6
16.4
Recurrent income makes up 58% of FCLs PBIT, in line with its target of 60-70%. This
segment will be underpinned by strong rental income from FPAs C&I portfolio as well as
the opening of Waterway Point, a suburban mall in Singapore. In the medium term, the
completion of Frasers Tower, Northpoint City and AEI works at Centrepoint should boost
rental income significantly.
Hospitality portfolio to increase strongly

On top of the acquisition of the Malmaison and Hotel du Vin portfolio of hotels in the UK
for 364m (S$760m), the hospitality division should also see the total number of keys
under management growing from the present 14,083 units to at least 22,783 keys by
2019. This should underpin hotel and management income, and also form a potential
acquisition pipeline for its hospitality REIT.
Foray into Thailand through stake in Golden Land

FCLs recent foray into Thailand is through a strategic investment in Thai-listed Golden
Land Property Development. The group will purchase a 29.5% stake in the enlarged
entity for THB4,971m (S$196m). Golden Land focuses on landed and medium-density
housing, and mixed-use commercial and hospitality projects in the Bangkok CBD.
Maintain Add
We maintain our Add rating on FCL with an unchanged target price of S$2.04, premised
on a 30% discount to RNAV. While its gearing of 83.6% is higher than its peers, we
believe that potential capital management efforts such as asset sales to its existing
REITs will enable it to recycle capital going forward. Other share price catalysts could
emerge should the group increase its free float.
[X]
Financial Summary
Analyst
LOCK Mun Yee
T (65) 6210 8606

Net Profit (S$m)
Core EPS (S$)
Core EPS Growth
FD Core P/E (x)
DPS (S$)
Dividend Yield
EV/EBITDA (x)
P/FCFE (x)
Net Gearing
P/BV (x)
ROE
Sep-14A
2,203
633
460.1
0.17
12.9%
10.02
0.085
4.97%
25.34
NA
88.2%
0.70
7.91%
Sep-15A
3,562
918
670.7
0.21
22.0%
8.21
0.050
2.92%
18.19
146.9
83.6%
0.63
8.12%
Sep-16F
3,632
1,042
598.2
0.21
(0.5%)
8.26
0.050
2.92%
16.11
NA
80.5%
0.60
7.45%
0.98
Sep-17F
4,926
1,317
777.8
0.27
30.0%
6.35
0.050
2.92%
12.82
NA
76.4%
0.55
9.06%
1.30
Sep-18F
4,437
1,380
849.4
0.29
9.2%
5.82
0.050
2.92%
12.30
NA
72.3%
0.51
9.15%
1.28

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BY THE NUMBERS
Share price info

Share px perf. (%)
1M
3M
12M
Relative
7.8
12.1
16.4
Absolute
3.3
11.8
3.6
Major shareholders
% held
TCC
59.5
Thai Bev
28.5
P/BV vs ROE
1.000
0.900
0.800
0.700
0.600
0.500
0.400
0.300
0.200
0.100
0.000
10.00%
9.00%
8.00%
7.00%
6.00%
5.00%
4.00%
3.00%
2.00%
1.00%
0.00%

Growth
12.00
50%
10.00
35%
8.00
20%
6.00
5%
4.00
-10%
2.00
-25%
0.00
-40%
ROE (rhs)
Profit & Loss

(S$m)
Total Net Revenues
Gross Profit
Operating EBITDA
Operating EBIT
Exceptional Items
Pre-tax Profit
Taxation
Profit After Tax
Minority Interests
Pref. & Special Div
Net Profit
Sep-14A
2,203
871
633
(12)
620
(44)
52
71
699
(43)
656
(156)
Sep-15A
3,562
1,408
918
(40)
878
(149)
126
0
854
90
944
(215)
Sep-16F
3,632
1,436
1,042
(87)
955
(202)
131
0
884
0
884
(230)
Sep-17F
4,926
1,948
1,317
(88)
1,230
(196)
106
0
1,139
0
1,139
(303)
Sep-18F
4,437
1,755
1,380
(88)
1,292
(147)
94
0
1,239
0
1,239
(329)
501
(41)
0
729
(29)
(29)
654
(27)
(29)
836
(29)
(29)
910
(32)
(29)
460
493
493
671
601
601
598
598
598
778
778
778
849
849
849
Cash Flow
(S$m)
EBITDA
Tax Paid
Capex
Shares Repurchased
Dividends Paid
Preferred Dividends
Sep-14A
633
(866)
Sep-15A
918
135
Sep-16F
1,042
Sep-17F
1,317
Sep-18F
1,380
511
1,136
(779)
(222)
30
(89)
(66)
(580)
(2,012)
(203)
(71)
(186)
(94)
498
(1,572)
158
(208)
(257)
(159)
1,087
(362)
151
(201)
(252)
(210)
1,942
(333)
114
(163)
(205)
(228)
119
(108)
(2,880)
(4,892)
4,711
1,598
171
(1,401)
936
696
131
(231)
(1,060)
0
106
(227)
(1,882)
0
94
(14)
(878)
0
(119)
(249)
(174)
(174)
(174)
(414)
5,775
(164)
1,219
(202)
(1,436)
(169)
(2,226)
(120)
(1,172)
128
BY THE NUMBERS
Balance Sheet
(S$m)
Total Debtors
Inventories
Fixed Assets
Total Investments
Intangible Assets
Short-term Debt
Total Creditors
Total Provisions
Total Liabilities
Minority Interests
Total Equity
Sep-14A
873
4,668
812
4
62
6,419
1,415
12,954
503
0
14,872
1,538
Sep-15A
1,373
3,943
844
7
174
6,340
1,991
14,014
721
0
16,726
1,020
Sep-16F
1,401
3,403
860
6
795
6,465
2,011
14,431
721
0
17,163
1,020
Sep-17F
1,429
2,235
878
8
2,048
6,596
2,031
15,049
721
0
17,801
1,020
Sep-18F
1,457
2,984
895
7
1,384
6,727
2,051
15,739
721
0
18,512
1,020
1,594
157
3,289
7,824
1,315
218
2,552
9,255
1,302
218
2,539
9,348
1,288
218
2,526
9,441
1,276
218
2,513
9,536
555
8,379
0
11,668
7,012
2,612
9,624
608
9,863
0
12,416
7,803
2,848
10,651
608
9,956
0
12,495
8,256
2,877
11,133
608
10,049
0
12,576
8,916
2,905
11,822
608
10,144
0
12,657
9,647
2,935
12,582
Sep-14A
7.3%
21.9%
28.7%
(2.94)
2.43
7.00
23.7%
23.7%
92.31
1.05
454.8
16.7%
5.07%
3.70%
Sep-15A
61.7%
45.0%
25.8%
(3.08)
2.70
4.71
22.8%
42.9%
84.81
0.98
246.5
15.4%
4.58%
3.56%
Sep-16F
2.0%
13.5%
28.7%
(3.10)
2.86
3.72
26.0%
29.0%
85.85
1.09
218.0
15.5%
4.76%
3.67%
Sep-17F
35.6%
26.4%
26.7%
(3.13)
3.09
4.88
26.6%
22.4%
64.39
0.80
158.7
19.6%
5.87%
4.30%
Sep-18F
(9.9%)
4.8%
31.1%
(3.15)
3.34
6.31
26.6%
20.5%
72.91
0.98
174.4
20.1%
5.94%
4.26%
Sep-14A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
15.0%
83.2%
51.0%
N/A
Sep-15A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
21.0%
66.4%
50.0%
N/A
Sep-16F
N/A
N/A
N/A
N/A
N/A
N/A
N/A
24.9%
63.7%
50.0%
N/A
Sep-17F
N/A
N/A
N/A
N/A
N/A
N/A
N/A
19.2%
72.2%
50.0%
N/A
Sep-18F
N/A
N/A
N/A
N/A
N/A
N/A
N/A
21.9%
68.3%
50.0%
N/A
Key Ratios
Revenue Growth
BVPS (S$)
Effective Tax Rate
Inventory Days
ROIC (%)
ROCE (%)
Key Drivers
Gross Margins (%)
129
Company Note
Singapore
Frasers Centrepoint Trust
ADD (no change)
Chugging along
Current price:
Target price:
Previous target:
Up/downside:
S$1.87
S$2.22
S$2.22
18.8%
Reuters:
Bloomberg:
Market cap:
FCRT.SI
FCT SP
US$1,214m
S$1,715m
US$1.24m
S$1.75m
915.4m
48.7%

Current shares o/s
Free float:
High occupancy underpins earnings momentum.
Maintain Add with a target price of S$2.22.
Shopper traffic and tenant sales are still rising.

Northpoint AEI to start early 2016.
Deep balance sheet capacity for acquisitions; low gearing of 28.2% translates to
significant debt headroom.
Portfolio occupancy remains at a healthy 96%

Portfolio occupancy remained relatively stable at 96%, with take-ups at Causeway Point
(CWP), Northpoint (NP) and Anchorpoint holding steady. Changi City Point (CCP) saw
some fluctuation in occupancy levels due to the ongoing tenant remixing. Bedok Point
occupancy remained at 84.2% and management will continue to look at avenues to
improve this position.
Shopper traffic and tenant sales trending up
No change.
Price Close
Portfolio shopper traffic grew 8.2% in 4QFY15, largely driven by double-digit growth in
patronage at CP and NP. Tenant sales improved in tandem. This helped to underpin
positive rental reversions of 7.1% during the quarter. CP and YewTee Point saw high
single-digit reversions while Anchorpoint enjoyed a 14.7% upside from lease renewals.
This bodes well for the 30% and 35% of portfolio gross rents due to be re-contracted in
FY16 and FY17 respectively.
2.200
121.0
2.100
114.8
2.000
108.5
Northpoint AEI to commence in Mar 16
1.900
102.3
1.800
6
96.0
NP AEI is scheduled to commence in Mar 16, and to be completed over the next 18
months. The AEI will focus on enhancing shopper experience by boosting diversity and
to enable the mall to benefit from the integration with the upcoming retail component of
Northpoint City. There could be some tenant displacements during this period, but FCT
has a good track record in managing these well and it expects to generate positive
return upon completion of the AEI. Previous AEI had generated >10% ROI.
Vol m
2
Dec-14
Mar-15
Jun-15
Sep-15
Source: Bloomberg
Price performance
Absolute (%)
Relative (%)
1M
-3.1
1.4
3M
-1.6
-1.3
12M
-2.1
10.7
Deep pipeline from sponsor

FCT has a deep potential acquisition pipeline from its sponsor. This includes the
Waterway Point and Northpoint City, which are currently under development. With a low
gearing of 28.2%, FCT has significant debt headroom to fund new purchases in the
longer run.
Maintain Add rating

We maintain our Add rating given FCTs stable outlook and FY16-17F dividend yield of
6.4-6.5%. Our DDM-backed target price of S$2.22 offers investors 18% upside. Potential
catalyst could come when more Northpoint AEI details are revealed or from continued
improvement in operating metrics.
[X]
Financial Summary
Analyst
LOCK Mun Yee
T (65) 6210 8606

Net Profit (S$m)
Core EPS (S$)
Core EPS Growth
FD Core P/E (x)
DPS (S$)
Dividend Yield
Asset Leverage
BVPS (S$)
P/BV (x)
Recurring ROE
Sep-14A
168.8
118.1
165.1
95.4
0.11
(1.5%)
17.75
0.11
5.98%
29.3%
1.85
1.01
5.80%
Sep-15A
189.2
131.0
171.5
106.4
0.11
4.9%
16.93
0.12
6.21%
28.2%
1.91
0.98
5.86%
Sep-16F
196.3
141.3
112.4
110.5
0.12
10.7%
15.29
0.12
6.43%
29.5%
1.87
1.00
6.46%
0.99
Sep-17F
200.0
143.9
114.6
112.8
0.12
1.7%
15.04
0.12
6.54%
29.8%
1.86
1.00
6.65%
1.02
Sep-18F
203.7
146.6
116.9
115.1
0.13
1.7%
14.79
0.12
6.66%
30.1%
1.86
1.01
6.79%
1.04

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Share price info

Share px perf. (%)
1M
3M
12M
Relative
1.4
-1.3
10.7
Absolute
-3.1
-1.6
-2.1
Major shareholders
Fraser Centrepoint Ltd
% held
41.2
Schroders Plc
6.0
Capital Group
4.1
1.600
1.400
1.200
1.000
0.800
0.600
0.400
0.200
0.000
32.00%
31.13%
30.25%
29.38%
28.50%
27.63%
26.75%
25.88%
25.00%
0.1400
7.00%
0.1200
6.00%
0.1000
5.00%
0.0800
4.00%
0.0600
3.00%
0.0400
2.00%
0.0200
1.00%
0.0000
0.00%
DPS (lhs)
Profit & Loss

(S$m)
Rental Revenues
Other Revenues
Net Property Income
Management Fees
Trustee's Fees
EBITDA
EBIT
Net Interest Income
Associates' Profit
Exceptional Items
Pre-tax Profit
Taxation
Minority Interests
Preferred Dividends
Net Profit
Sep-14A
149.5
19.3
168.8
(50.7)
118.1
0.0
(12.9)
(1.7)
0.0
103.5
0.0
103.5
(18.4)
6.5
0.0
73.4
165.1
0.0
0.0
0.0
165.1
95.4
Sep-15A
167.9
21.3
189.2
(58.2)
131.0
0.0
(14.1)
(1.6)
0.0
115.4
0.0
115.4
(19.2)
5.1
0.0
70.2
171.5
0.0
0.0
0.0
171.5
106.4
Sep-16F
178.2
18.1
196.3
(55.1)
141.3
0.0
(14.6)
(2.0)
0.0
124.7
0.0
124.7
(22.8)
10.4
0.0
0.0
112.4
0.0
0.0
0.0
112.4
110.5
Sep-17F
181.9
18.1
200.0
(56.1)
143.9
0.0
(14.7)
(2.0)
0.0
127.2
0.0
127.2
(23.1)
10.4
0.0
0.0
114.6
0.0
0.0
0.0
114.6
112.8
Sep-18F
185.6
18.1
203.7
(57.2)
146.6
0.0
(14.8)
(2.0)
0.0
129.8
0.0
129.8
(23.4)
10.4
0.0
0.0
116.9
0.0
0.0
0.0
116.9
115.1
Sep-14A
165.1
11.9
(6.4)
0.0
(72.9)
97.6
(1.5)
(294.2)
0.0
(295.7)
220.0
158.4
(94.5)
(86.4)
197.5
(0.6)
(198.0)
5.5
Sep-15A
171.5
14.1
2.3
0.0
(67.9)
119.9
(5.4)
4.6
0.0
(0.8)
98.0
(0.1)
(105.7)
(136.9)
(144.7)
(25.7)
119.3
199.1
Sep-16F
112.4
12.3
11.2
0.0
(7.5)
128.4
(14.8)
4.2
0.0
(10.5)
10.0
0.0
(110.5)
(22.8)
(123.3)
(5.4)
117.9
105.1
Sep-17F
114.6
12.6
0.8
0.0
(7.5)
120.6
(14.9)
4.2
0.0
(10.6)
10.0
0.0
(112.8)
(23.1)
(125.8)
(15.9)
109.9
96.9
Sep-18F
116.9
12.9
0.8
0.0
(7.5)
123.2
(15.0)
4.2
0.0
(10.7)
10.0
0.0
(115.1)
(23.4)
(128.4)
(16.0)
112.4
99.1
Cash Flow
(S$m)
Pre-tax Profit
Tax Paid
Others
Capex
Dividends Paid
131
BY THE NUMBERS
Balance Sheet
(S$m)
Total Investments
Intangible Assets
Inventories
Trade Debtors
Trade Creditors
Short-term Debt
Minority Interests
Total Equity
Sep-14A
2,475
0
0
2,475
42
0
0
5
47
40
95
18
153
644
26
670
1,699
0
Sep-16F
2,542
0
0
2,542
21
0
0
5
27
43
278
18
339
481
27
508
1,722
0
Sep-17F
2,557
0
1
2,557
16
0
0
5
21
44
278
18
340
491
27
518
1,721
0
Sep-18F
2,572
0
1
2,573
10
0
0
5
16
45
278
18
340
501
27
528
1,720
0
1,755
1,722
1,721
1,720
Sep-14A
6.8%
5.8%
70.0%
2.35%
5.60
0%
57.8%
0.31
0.31
0.27
7.09%
Sep-15A
12.1%
11.0%
69.2%
3.76%
5.97
0%
62.1%
0.07
0.07
0.05
6.76%
Sep-16F
3.8%
7.8%
72.0%
3.63%
5.48
0%
98.4%
0.08
0.08
0.06
4.39%
Sep-17F
1.9%
1.9%
72.0%
1.72%
5.51
0%
98.4%
0.06
0.06
0.05
4.45%
Sep-18F
1.9%
1.9%
71.9%
1.72%
5.55
0%
98.5%
0.05
0.05
0.03
4.52%
Sep-14A
13.2
N/A
N/A
1,086
99.1%
2,400.0
N/A
Sep-15A
13.4
N/A
N/A
1,086
99.3%
2,464.0
N/A
Sep-16F
13.7
N/A
N/A
1,086
99.3%
2,478.8
N/A
Sep-17F
14.0
N/A
N/A
1,086
99.3%
2,493.7
N/A
Sep-18F
14.3
N/A
N/A
1,086
99.3%
2,508.6
N/A
1,699
Sep-15A
2,527
0
0
2,527
16
0
0
5
22
32
278
18
328
440
27
467
1,755
0
Key Ratios
NPI Growth
DPS Growth
Effective Tax Rate
Current Ratio
Quick Ratio
Cash Ratio
Key Drivers
RevPAR (S$)
Occupancy (%)
132
Company Note
Singapore
Frasers Commercial Trust
ADD (no change)
Going from strength to strength

S$1.30
S$1.62
S$1.62
24.7%
FY15 earnings driven by ATP.
FRCR.SI
FCOT SP
US$723.8m
S$1,023m
US$0.65m
S$0.91m
676.8m
72.4%
FCOT will continue to drive earnings growth through proactive asset management.
Current price:
Target price:
Previous target:
Up/downside:
Reuters:
Bloomberg:
Market cap:
Current shares o/s
Free float:
No change.
Book NAV was eroded by the weaker A$ in FY15.

Occupancy remains high. Under-rented Singapore assets offer potential positive
rental revisions.
We continue to like FCOT for its under-rented Singapore assets and value-unlocking
activities. Maintain Add with an unchanged target price.
FY15 earnings driven by Alexander Technopark

FCOTs NPI rose 12% yoy in FY15 on the back of higher revenue from Alexandra
Technopark (ATP) due to the expiry of the master lease in Aug 2014, better occupancies
and rents at China Square Central (CSC) and 55 Market St (55MS), as well as maiden
contribution from 357 Collins St in Melbourne. The improved operational performance
helped to offset the weaker A$, as the trust recorded all-time high DPU.
Book NAV was eroded by weaker A$ in FY15
Price Close
1.700
111.0
1.500
105.7
1.300
100.3
1.100
6
95.0
Vol m
2
Dec-14
Mar-15
Jun-15
Sep-15
Source: Bloomberg
Price performance
Absolute (%)
Relative (%)
1M
-4.8
-0.3
3M
-1.2
-0.9
12M
-10.4
2.4
FCOTs book NAV dipped from S$1.61 at end-Sep 14 to S$1.54 at end-Sep 2015 due to
lower value of CSC and Central Park, as well as the drag from a weaker A$, which offset
the small compression in cap rate for its Australian properties. FCOTs portfolio value
stood at S$1.95bn at end-Sep 2015, including the recently-purchased 357 Collins St.
Occupancy remains high; Under-rented Singapore assets

FCOT achieved 94.6-96.2% occupancy for its Singapore properties in FY15; 88.6% for
Central Park and 98.4% for 357 Collins St. For FY15, Singapore properties renewal
rents rose 5.7-17.9%. In Australia, Hamersley Iron Pty Ltd (6.2% of portfolio income)
signed a heads of agreement for a 12-year lease until FY30. We estimate that 18.6% of
FY16 and 16.9% of FY17 rental income are due to be renewed. We expect reversion to
remain positive as current spit rates are 3-15% above passing levels.
Proactive asset management

FCOT will continue to drive earnings growth through proactive asset management. It
recently sold its rights to the hotel gross floor area (GFA) at CSC and plans to enhance
the property by relocating certain basement retail areas to the ground floor in order to
provide room for uplift in rents. The S$7m exercise is scheduled to start in early 2016.
Maintain Add
We continue to like FCOT for its under-rented Singapore assets and value-unlocking
activities, which are potential catalysts. We retain our Add rating, with an unchanged
DDM-based target price of S$1.62.
[X]
Financial Summary
Analyst(s)
LOCK Mun Yee
T (65) 6210 8606

Net Profit (S$m)
Core EPS (S$)
Core EPS Growth
FD Core P/E (x)
DPS (S$)
Dividend Yield
Asset Leverage
BVPS (S$)
P/BV (x)
Recurring ROE
Sep-14A
118.8
90.6
87.2
57.26
0.087
27.0%
14.97
0.08
6.51%
36.8%
1.61
0.81
5.42%
Sep-15A
142.2
101.9
75.2
67.81
0.097
11.4%
13.44
0.10
7.47%
36.0%
1.54
0.84
6.15%
Sep-16F
157.6
113.3
113.8
82.19
0.089
(8.3%)
14.65
0.10
8.00%
34.7%
1.63
0.80
5.60%
1.05
Sep-17F
161.2
115.9
72.2
84.53
0.091
2.5%
14.29
0.11
8.16%
34.8%
1.62
0.80
5.60%
1.06
Sep-18F
165.3
118.9
74.9
87.25
0.094
2.9%
13.89
0.11
8.36%
34.9%
1.60
0.81
5.82%
1.21
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Share price info

Share px perf. (%)
1M
3M
12M
Relative
-0.3
-0.9
2.4
Absolute
-4.8
-1.2
-10.4
Major shareholders
% held
Fraser and Neave Ltd
27.6
Nomura
18.7
First eagle Investment Mgm LLC
1.1
1.200
38.0%
0.1200
9.00%
1.000
36.5%
0.1000
7.50%
0.800
35.0%
0.0800
6.00%
0.600
33.5%
0.0600
4.50%
0.400
32.0%
0.0400
3.00%
0.200
30.5%
0.0200
1.50%
0.000
29.0%
0.0000
0.00%
DPS (lhs)
Profit & Loss

(S$m)
Rental Revenues
Other Revenues
Net Property Income
Management Fees
Trustee's Fees
EBITDA
EBIT
Net Interest Income
Associates' Profit
Exceptional Items
Pre-tax Profit
Taxation
Minority Interests
Preferred Dividends
Net Profit
Sep-14A
118.8
0.0
118.8
(28.3)
90.6
0.0
(11.9)
(2.0)
0.0
76.7
0.0
76.7
(20.5)
0.0
0.0
29.2
85.4
1.9
0.0
(0.0)
87.2
57.3
Sep-15A
142.2
0.0
142.2
(40.3)
101.9
0.0
(12.2)
(2.5)
0.0
87.1
0.0
87.1
(21.7)
0.0
0.0
4.6
70.0
5.2
0.0
0.0
75.2
67.8
Sep-16F
157.6
0.0
157.6
(44.3)
113.3
0.0
(12.6)
(2.8)
0.0
97.9
0.0
97.9
(22.6)
0.0
44.0
0.0
119.3
(5.4)
0.0
0.0
113.8
82.2
Sep-17F
161.2
0.0
161.2
(45.3)
115.9
0.0
(12.6)
(2.8)
0.0
100.5
0.0
100.5
(22.7)
0.0
0.0
0.0
77.8
(5.6)
0.0
0.0
72.2
84.5
Sep-18F
165.3
0.0
165.3
(46.5)
118.9
0.0
(12.6)
(2.8)
0.0
103.4
0.0
103.4
(22.7)
0.0
0.0
0.0
80.7
(5.8)
0.0
0.0
74.9
87.3
Sep-14A
85.4
20.5
9.8
(4.7)
(29.0)
82.0
(3.2)
(0.0)
(0.3)
(3.5)
14.4
(12.1)
(57.3)
(18.7)
(73.6)
5.0
78.8
72.5
Sep-15A
70.0
21.7
1.5
(0.2)
(4.4)
88.6
(2.0)
(195.7)
0.4
(197.3)
57.3
139.8
(53.9)
(19.0)
124.2
15.5
(108.3)
(70.7)
Sep-16F
119.3
(21.4)
2.6
0.0
48.6
149.1
0.0
44.8
0.4
45.2
0.0
0.0
(82.2)
(23.0)
(105.2)
89.1
194.7
171.7
Sep-17F
77.8
22.7
0.7
0.0
4.5
105.7
0.0
(3.0)
0.4
(2.6)
3.0
0.0
(84.5)
(23.1)
(104.6)
(1.5)
103.5
83.4
Sep-18F
80.7
22.7
0.8
0.0
4.3
108.6
0.0
(2.0)
0.4
(1.6)
2.0
0.0
(87.3)
(23.2)
(108.4)
(1.4)
107.4
86.2
Cash Flow
(S$m)
Pre-tax Profit
Tax Paid
Others
Capex
Dividends Paid
134
BY THE NUMBERS
Balance Sheet
(S$m)
Total Investments
Intangible Assets
Inventories
Trade Debtors
Trade Creditors
Short-term Debt
Minority Interests
Total Equity
Sep-14A
1,826
0
0
1,826
47
0
9
0
56
24
0
2
26
692
72
764
1,091
0
0
1,091
Sep-15A
1,963
0
0
1,963
62
0
9
0
71
30
0
10
39
732
56
788
1,207
0
0
1,207
Sep-16F
1,963
0
0
1,963
151
0
9
0
160
32
0
10
42
736
56
792
1,289
0
0
1,289
Sep-17F
1,966
0
0
1,966
150
0
9
0
159
33
0
10
43
739
56
795
1,287
0
0
1,287
Sep-18F
1,968
0
0
1,968
148
0
9
0
157
34
0
10
44
741
56
797
1,285
0
0
1,285
Sep-14A
0.5%
(0.4%)
76.2%
8.1%
3.69
0.00%
66%
2.15
2.15
1.81
4.66%
Sep-15A
19.6%
12.5%
71.6%
14.8%
3.95
0.00%
90%
1.80
1.80
1.58
3.84%
Sep-16F
10.8%
11.2%
71.9%
7.1%
4.25
4.56%
72%
3.81
3.81
3.60
5.48%
Sep-17F
2.3%
2.3%
71.9%
2.0%
4.35
7.23%
117%
3.71
3.71
3.51
3.40%
Sep-18F
2.5%
2.6%
71.9%
2.4%
4.47
7.21%
117%
3.61
3.61
3.41
3.52%
Sep-14A
6.6
N/A
N/A
2,279
97.0%
1,824.9
N/A
Sep-15A
7.0
N/A
N/A
2,623
96.8%
1,954.8
N/A
Sep-16F
7.2
N/A
N/A
2,623
96.8%
1,954.8
N/A
Sep-17F
7.3
N/A
N/A
2,623
96.8%
1,957.8
N/A
Sep-18F
7.4
N/A
N/A
2,623
96.8%
1,959.8
N/A
Key Ratios
NPI Growth
DPS Growth
Effective Tax Rate
Current Ratio
Quick Ratio
Cash Ratio
Key Drivers
RevPAR (S$)
Occupancy (%)
135
GamingSingaporeEquity researchDecember 9, 2015
Company Note
Singapore
Genting Singapore
HOLD (no change)
Slipping market share
Current price:
Target price:
Previous target:
Up/downside:
S$0.78
S$0.81
S$0.81
4.2%
Reuters:
Bloomberg:
Market cap:
GENS.SI
GENS SP
US$6,583m
S$9,300m
US$11.91m
S$16.77m
12,096m
40.0%

Current shares o/s
Free float:
No change.
Price Close

105.0
1.000
95.0
0.800
85.0
0.600
150
75.0
Vol m
100
50
Mar-15
Jun-15
Sep-15
Source: Bloomberg
Price performance
Absolute (%)
Relative (%)
GENSs Resorts World Sentosa (RWS) continues to lose market share to Marina
Bay Sands (MBS) across both VIP and mass gaming segments.
We expect this trend to continue as RWS cuts back on credit extensions to VIPs,
while MBS has the location advantage for mass.
Bad debt charges expected to remain high until 2H16, weighing on earnings.
Maintain Hold, given the challenging outlook in the VIP gaming segment.
VIP diverging trend from MBS to continue

3Q15 saw a sharp divergence in VIP gaming trends competitor MBS reported the best
rolling chip volume in six quarters of S$15bn (+20% qoq, +36% yoy in S$), while RWS
saw the opposite, with its rolling chip volume falling 20% qoq and 50% yoy to S$9bn.
This dragged RWSs market share to a new low of c.40%, and we expect the trend to
continue. Management explained that unlike Sands, its disadvantage is not having a
presence in other VIP gaming markets to better gauge customers creditworthiness.
VIP market share to erode further; bad debt to remain high till 2H16
1.200
Dec-14
1M
-9.9
-5.4
3M
5.4
5.7
12M
-29.2
-16.4
Looking into 2016, management guided that it will continue to scale back the VIP
business by tightening credit extension, in line with a new norm. It does not expect to
see an upturn in VIP business from China anytime soon but continues to pursue
business from ASEAN customers. As such, we expect RWS to continue to lose VIP
market share to MBS in the quarters ahead. We also expect bad debt charges to remain
high until 2H16, as it continues to provide for credit extended 12-18 months ago.
Mass a little more hope

RWSs market share of mass GGR has slipped to 40%, despite the opening of the 550room Genting Hotel Jurong (GHJ). GENS is in the process of realigning management in
its mass and premium mass segments, as it shifts focus away from VIP to mass. We
think more targeted efforts to draw in visitors from ASEAN could drive an improvement
in RWSs market share ahead, though upside could be limited as MBS continues to
have the competitive advantage in location and availability of hotel rooms nearby.
Resorts World Jeju (RWJ) a longer-term positive

RWJ is slated to open progressively from 2017, with completion target of 2019. RWJ will
feature a Myths & History Theme Park, an Adventure Water Park, a retail and F&B
complex, >2,000 hotel rooms, a foreigner-only casino and >2,8000 residential units.
While it has yet to receive a casino license, management is hopeful as the Jeju governor
is in support of RWJs plans. Given Jejus unique visa-free policy, RWJs target market is
Northern China. In 2014, Jeju received 2.9m Chinese tourists (Singapore: 1.7m).
Maintain Hold
We maintain our Hold call on GENS, with an unchanged DCF-based target price of
S$0.81. We expect the environment to remain challenging for GENS, at least in 1H16,
with 2H16 to see some reprieve from lower bad debt charges. We advise investors to
remain on the sidelines pending clearer signs of a bottom.
Financial Summary
Analysts
Jessalynn CHEN
T (65) 6210 8672
Kenneth NG, CFA
T (65) 6210 8610
Revenue (S$m)
Net Profit (S$m)
Normalised EPS (S$)
Normalised EPS Growth
FD Normalised P/E (x)
DPS (S$)
Dividend Yield
EV/EBITDA (x)
P/FCFE (x)
Net Gearing
P/BV (x)
ROE
% Change In Normalised EPS Estimates
Normalised EPS/consensus EPS (x)
Dec-13A
2,847
1,247
501.1
0.048
0.2%
16.11
0.010
1.29%
5.35
NA
(29.1%)
0.99
6.34%
Dec-14A
2,862
1,205
470.2
0.042
(12.3%)
18.38
0.010
1.29%
5.00
27.73
(35.5%)
0.98
5.35%
Dec-15F
2,481
721
297.1
0.014
(66.1%)
54.30
0.010
1.29%
7.64
14.81
(40.6%)
0.97
1.80%
0%
0.60
Dec-16F
2,525
900
347.1
0.028
98.1%
27.41
0.010
1.29%
5.49
13.77
(45.4%)
0.95
3.51%
0%
0.83
Dec-17F
2,575
989
427.1
0.035
23.0%
22.27
0.010
1.29%
4.48
14.92
(49.1%)
0.92
4.21%
0%
0.85
Powered by
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BY THE NUMBERS
Share price info

Share px perf. (%)
1M
3M
12M
Relative
-5.4
5.7
-16.4
Absolute
-9.9
5.4
Major shareholders
Genting Bhd
-29.2
% held
51.9
Vanguard Group
1.1
Teachers Advisors Inc
1.1
P/BV vs ROE
12-mth Fwd FD Normalised P/E vs FD
6.00
20.0%
5.00
16.7%
4.00
13.3%
3.00
10.0%
2.00
6.7%
1.00
3.3%
0.00
0.0%

80.0
70.0
60.0
50.0
40.0
30.0
20.0
10.0
0.0
3,000%
2,563%
2,125%
1,688%
1,250%
813%
375%
-63%
-500%
12-mth Fwd Rolling FD Normalised P/E (x) (lhs)
ROE (rhs)
Diluted Normalised EPS Growth (rhs)
Profit & Loss

(S$m)
Total Net Revenues
Gross Profit
Operating EBITDA
Operating EBIT
Exceptional Items
Pre-tax Profit
Taxation
Profit After Tax
Minority Interests
Preferred Dividends
Preference Dividends (Australia)
Net Profit
Normalised Net Profit
Fully Diluted Normalised Profit
Dec-13A
3,028
1,605
1,247
(422)
824
(15)
37
0
846
Dec-14A
2,964
1,515
1,205
(419)
786
8
11
0
805
Dec-15F
2,448
1,034
721
(334)
387
9
(5)
0
391
Dec-16F
2,574
1,214
900
(318)
582
18
(4)
0
596
Dec-17F
2,615
1,305
989
(314)
674
26
(2)
0
699
846
(138)
(88)
619
(0)
805
(170)
(47)
588
0
391
(98)
122
415
0
596
(131)
0
465
0
699
(154)
0
545
0
(118)
(118)
(118)
(118)
(118)
501
708
589
470
635
517
297
293
175
347
465
347
427
545
427
Cash Flow
(S$m)
EBITDA
Tax Paid
Capex
Shares Repurchased
Dividends Paid
Preferred Dividends
Dec-13A
1,247
(37)
(262)
Dec-14A
1,205
(11)
(358)
Dec-15F
721
5
30
Dec-16F
900
4
(40)
Dec-17F
989
2
(95)
107
(20)
(215)
821
(449)
271
1
(153)
956
(195)
370
9
(98)
1,038
(223)
339
18
(131)
1,090
(227)
274
26
(154)
1,042
(232)
(1,278)
927
(800)
(655)
2
(1,213)
1,477
70
(682)
(169)
0
0
(223)
(172)
0
0
0
(227)
(172)
0
0
0
(232)
(172)
0
(122)
(122)
(122)
(122)
(122)
(3)
(779)
(758)
(634)
75
(8)
(982)
43
343
1,067
8
(287)
528
642
869
0
(295)
568
691
917
0
(295)
515
638
865
137
BY THE NUMBERS
Balance Sheet
(S$m)
Total Debtors
Inventories
Fixed Assets
Total Investments
Intangible Assets
Short-term Debt
Total Creditors
Total Provisions
Total Liabilities
Minority Interests
Total Equity
Dec-13A
5,027
1,116
56
0
6,199
6,095
37
139
605
6,875
516
Dec-14A
5,150
1,101
54
0
6,305
5,809
133
119
306
6,367
518
Dec-15F
5,670
667
50
0
6,388
5,719
133
99
306
6,257
518
Dec-16F
6,238
429
48
0
6,716
5,649
133
78
306
6,166
518
Dec-17F
6,754
315
47
0
7,115
5,586
133
58
306
6,084
518
765
166
1,447
1,702
596
428
1,542
1,184
511
428
1,456
1,184
520
428
1,465
1,184
530
428
1,475
1,184
11
1,713
267
3,427
9,647
0
9,647
11
1,195
232
2,969
9,703
0
9,703
11
1,195
232
2,883
9,761
0
9,761
11
1,195
232
2,892
9,990
0
9,990
11
1,195
232
2,902
10,297
0
10,297
Dec-13A
(3.4%)
(2.9%)
43.8%
0.23
0.79
15.25
16.3%
20.7%
133.0
14.06
194.7
12.3%
7.16%
4.65%
Dec-14A
0.5%
(3.3%)
42.1%
0.28
0.79
18.66
21.1%
23.7%
141.3
13.82
170.5
11.1%
7.04%
3.95%
Dec-15F
(13.3%)
(40.2%)
29.1%
0.32
0.80
7.11
25.0%
69.9%
130.1
13.40
142.7
6.1%
3.86%
1.31%
Dec-16F
1.8%
24.8%
35.7%
0.37
0.81
10.69
22.0%
35.3%
79.5
13.23
138.4
9.9%
5.54%
2.58%
Dec-17F
2.0%
9.8%
38.4%
0.41
0.84
12.38
22.0%
28.7%
52.7
13.21
146.0
12.1%
6.25%
3.07%
Dec-13A
30.5%
2.5%
N/A
N/A
N/A
N/A
N/A
N/A
2,441
558
Dec-14A
-5.6%
2.6%
N/A
N/A
N/A
N/A
N/A
N/A
2,441
558
Dec-15F
-43.0%
2.5%
N/A
N/A
N/A
N/A
N/A
N/A
2,441
558
Dec-16F
-10.0%
2.8%
N/A
N/A
N/A
N/A
N/A
N/A
2,441
558
Dec-17F
0.5%
2.8%
N/A
N/A
N/A
N/A
N/A
N/A
2,441
558
Key Ratios
Revenue Growth
BVPS (S$)
Effective Tax Rate
Inventory Days
ROIC (%)
ROCE (%)
Key Drivers
VIP Chip Volume (% Change)
VIP Chip Win Percentage (%)
Mass mkt chip drop (% chg.)
Mass mkt chip win (%-tage)
Slot Handle (% Change)
Slot Hold Percentage (%)
Net Win Per Slot (% Change)
Net Win Per Table (% Change)
No. Of Slots
No. Of Tables
138
Company Note
Singapore
GL Limited
ADD (no change)
Hotel refurbishment bearing fruit
Current price:
Target price:
Previous target:
Up/downside:
S$0.85
S$1.26
S$1.26
48.8%
Reuters:
Bloomberg:
Market cap:
GUCL.SI
GLL SP
US$818.2m
S$1,156m
US$0.35m
S$0.49m
1,368m
33.3%

Current shares o/s
Free float:
No change.
GLs UK hotels continue to benefit from improving economic and travel backdrop.
The new Value Centre General Managers (VCGM) model adopted by management
is expected to enhance hotel operating efficiency.
Management plans to continue evaluating opportunities for monetisation of the

groups non-core businesses.
Maintain Add with target price of S$1.26, based on 25% discount to CY16 RNAV.
We expect high-single-digit RevPar growth for GL in FY16-17, driven by the

refurbishment and rebranding programme for the groups 15 London hotels.
Buoyant market dynamics for London hospitality sector in 2016

The market dynamics for the London hospitality sector are likely to remain buoyant in
2016, backed by the UKs improving economic and travel backdrop. PwC forecasts that
London hotel occupancy rate will improve by 1% yoy in 2015 and 0.3% in 2016 to 84%
in 2016, topping all other major European tourist destinations. PwC also expects London
hotel RevPar to expand by 2.7% yoy in 2015 and 2.3% yoy in 2016.
Upbeat hotel RevPar growth in FY16-17, driven by refurbishment

Price Close
1.100
119.0
1.000
112.8
0.900
106.5
0.800
100.3
0.700
6
94.0
Vol m
2
Dec-14
Mar-15
Jun-15
Sep-15
Source: Bloomberg
Price performance
Absolute (%)
Relative (%)
1M
-6.6
-2.1
3M
7.0
7.3
12M
-7.7
5.1
We expect GLs high-single-digit hotel RevPar growth to beat the market in FY16-17,
driven by the groups ongoing refurbishment and rebranding programme. FY16 is likely
to be an earnings sweet spot for the hotel segment, given the full-year income
contribution from the refurbished and rebranded Amba Hotel Charing Cross (239 rooms)
and Every Piccadilly (82 rooms), as well as the contribution from Amba Hotel Marble
Arch (692 rooms) that is due to start in 2QFY16.
VCGM model to improve hotel operating efficiency

Management is attacking the conventional hotel investment and management business
with a new Value Centre General Managers (VCGM) model. Unlike the large hotel
chains that have centralised decision making, GL advocates decentralisation. The
VCGM model allows for better employment of data science to improve yield control and
enhance guest experience. The VCGM model has yielded positive results to date,
evidenced by the 3% yoy decline in 1QFY16 hotel operating expenses.
Potential monetisation of non-core businesses

Management intends to continue evaluating opportunities for monetisation of the groups
non-core assets, including the Clermont Club (the only casino owned by GL), Molokai
property development, Bass Strait Oil and gas royalty income. Except for the Bass Strait
business (profit-making but adversely affected by low global oil prices), GLs non-core
businesses (casino and property development) have been loss-making or barely
breaking even. Potential monetisation would strengthen GLs balance sheet.
Maintain Add, with target price of S$1.26

We keep our Add rating on GL, with a target price of S$1.26, based on a 25% discount
to CY16 RNAV. Potential re-rating catalysts include organic earnings growth in the core
hotel business, new management contract wins and monetisation of non-core assets.
Key risks include possible unrest due to Islamic State of Iraq and Syria (ISIS) terrorism
and a weak Euro (makes London a more expensive tourist destination).
[X]
Financial Summary
Analysts
Roy CHEN
T (65) 6210 8685
E roy.chen@cimb.com
William TNG, CFA
T (65) 6210 8676
Revenue (US$m)
Net Profit (US$m)
Core EPS (US$)
Core EPS Growth
FD Core P/E (x)
DPS (US$)
Dividend Yield
EV/EBITDA (x)
P/FCFE (x)
Net Gearing
P/BV (x)
ROE
Jun-14A
461.9
109.9
39.00
0.033
9.8%
18.22
0.014
2.39%
10.18
84.84
28.0%
0.64
3.73%
Jun-15A
423.2
102.1
47.90
0.037
11.6%
16.23
0.016
2.63%
10.60
35.01
26.7%
0.67
4.06%
Jun-16F
429.6
110.1
62.72
0.040
7.7%
15.01
0.016
2.63%
9.81
71.17
25.5%
0.66
4.43%
0%
1.20
Jun-17F
449.2
119.0
56.76
0.043
8.4%
13.85
0.016
2.63%
8.90
16.55
22.5%
0.64
4.68%
0%
1.00
Jun-18F
469.6
125.3
60.01
0.045
4.3%
13.28
0.016
2.63%
8.29
15.42
19.4%
0.63
4.80%
0%
1.00

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Share price info

Share px perf. (%)
1M
3M
12M
Relative
-2.1
7.3
5.1
Absolute
-6.6
7.0
-7.7
Major shareholders
Hong Leong Co Malaysia Bhd
% held
66.6
Norges Bank
0.6
Fidelity International
0.4
P/BV vs ROE

Growth
1.200
5.00%
30.0
20.0%
1.000
4.17%
25.0
8.3%
0.800
3.33%
20.0
-3.3%
0.600
2.50%
15.0
-15.0%
0.400
1.67%
10.0
-26.7%
0.200
0.83%
5.0
-38.3%
0.000
0.00%
0.0
-50.0%
ROE (rhs)
Profit & Loss

(US$m)
Total Net Revenues
Gross Profit
Operating EBITDA
Operating EBIT
Exceptional Items
Pre-tax Profit
Taxation
Profit After Tax
Minority Interests
Preferred Dividends
Net Profit
Jun-14A
461.9
267.0
109.9
(28.8)
81.1
(25.3)
0.0
0.0
55.8
(1.9)
53.9
(15.3)
38.6
0.4
39.0
43.3
43.3
Jun-15A
423.2
243.6
102.1
(26.9)
75.2
(16.9)
0.0
0.0
58.3
1.0
59.3
(11.8)
Jun-16F
429.6
244.8
110.1
(31.4)
78.8
(12.0)
0.0
0.0
66.8
13.4
80.2
(17.9)
Jun-17F
449.2
258.4
119.0
(31.4)
87.6
(12.0)
0.0
0.0
75.6
0.0
75.6
(19.3)
Jun-18F
469.6
270.3
125.3
(31.7)
93.6
(12.0)
0.0
0.0
81.7
0.0
81.7
(22.0)
47.5
0.4
62.3
0.4
56.3
0.4
59.6
0.4
47.9
48.1
48.1
0.0
0.0
62.7
52.0
52.0
0.0
0.0
56.8
56.8
56.8
0.0
0.0
60.0
60.0
60.0
Cash Flow
(US$m)
EBITDA
Tax Paid
Capex
Shares Repurchased
Dividends Paid
Preferred Dividends
Jun-14A
109.9
Jun-15A
102.1
Jun-16F
110.1
Jun-17F
119.0
Jun-18F
125.3
17.3
0.0
0.7
(3.7)
(31.5)
(18.4)
74.3
(39.1)
10.2
19.0
0.0
0.9
(3.9)
(21.3)
(19.2)
77.6
(55.4)
0.8
(39.3)
0.0
0.0
0.0
(12.0)
(17.9)
41.0
(30.0)
0.0
(0.2)
0.0
0.0
0.0
(12.0)
(19.3)
87.5
(40.0)
0.0
0.4
0.0
0.0
0.0
(12.0)
(22.0)
91.7
(40.0)
0.0
(0.1)
(29.0)
(36.0)
0.0
0.0
(21.0)
0.0
(54.6)
(0.7)
0.0
0.0
(20.1)
0.0
(30.0)
0.0
0.0
0.0
(20.4)
0.0
(40.0)
0.0
0.0
0.0
(20.6)
0.0
(40.0)
0.0
0.0
0.0
(20.7)
3.1
(53.9)
(8.6)
9.3
76.9
9.5
(11.3)
11.7
22.3
44.4
0.0
(20.4)
(9.5)
11.0
24.1
0.0
(20.6)
26.9
47.5
60.6
0.0
(20.7)
30.9
51.7
64.8
140
BY THE NUMBERS
Balance Sheet
(US$m)
Total Debtors
Inventories
Fixed Assets
Total Investments
Intangible Assets
Short-term Debt
Total Creditors
Total Provisions
Total Liabilities
Minority Interests
Total Equity
Jun-14A
9
85
1
177
272
1,287
3
152
0
1,442
250
Jun-15A
22
66
1
177
265
1,220
13
126
0
1,359
21
Jun-16F
26
82
1
177
285
1,222
13
123
0
1,358
21
Jun-17F
53
85
1
177
315
1,234
13
120
0
1,366
21
Jun-18F
84
88
1
177
350
1,246
13
116
0
1,375
21
114
11
376
99
112
5
138
309
89
5
115
309
92
5
118
309
96
5
122
309
0
99
25
500
1,217
(3)
1,215
0
309
29
475
1,152
(3)
1,149
0
309
29
452
1,194
(3)
1,191
0
309
29
455
1,231
(4)
1,227
0
309
29
459
1,270
(4)
1,266
Jun-14A
21.5%
(2.14%)
23.8%
(0.26)
0.93
2.53
28.4%
49.1%
63.41
1.87
190.9
4.33%
5.75%
3.66%
Jun-15A
(8.4%)
(7.10%)
24.1%
(0.24)
0.89
3.53
19.9%
43.6%
64.99
2.03
230.1
3.77%
5.15%
3.58%
Jun-16F
1.5%
7.88%
25.6%
(0.23)
0.91
5.98
22.3%
41.7%
62.67
1.98
198.9
4.28%
5.26%
3.58%
Jun-17F
4.6%
8.01%
26.5%
(0.21)
0.93
6.65
25.5%
36.5%
67.50
1.91
172.4
4.64%
5.69%
3.96%
Jun-18F
4.5%
5.33%
26.7%
(0.18)
0.94
7.11
27.0%
35.3%
67.23
1.83
171.5
4.93%
5.93%
4.06%
Jun-14A
8.0%
19.4%
87.4%
69.6%
-7.0%
98.8%
9.0%
36.5%
N/A
N/A
N/A
N/A
Jun-15A
5.0%
22.2%
90.8%
82.8%
-23.6%
98.1%
7.5%
30.1%
N/A
N/A
N/A
N/A
Jun-16F
7.0%
27.9%
91.9%
89.0%
-30.6%
96.8%
5.1%
17.2%
N/A
N/A
N/A
N/A
Jun-17F
6.0%
24.8%
91.4%
85.5%
18.1%
97.3%
5.8%
21.3%
N/A
N/A
N/A
N/A
Jun-18F
4.5%
24.7%
91.3%
84.7%
7.2%
97.5%
5.9%
21.7%
N/A
N/A
N/A
N/A
Key Ratios
Revenue Growth
BVPS (US$)
Effective Tax Rate
Inventory Days
ROIC (%)
ROCE (%)
Key Drivers
141
Company Note
Singapore
Global Logistic Properties
ADD (no change)
Supported by many pillars
Current price:
Target price:
Previous target:
Up/downside:
S$2.03
S$3.18
S$3.18
56.7%
Reuters:
Bloomberg:
Market cap:
GLPL.SI
GLP SP
US$6,810m
S$9,620m
US$25.97m
S$36.56m
4,742m
57.0%

Current shares o/s
Free float:
Leading supplier of modern logistics warehouse space, growing fee income platform
a medium ROE driver
Leasing appetite in China still robust although incentives has risen a little
Active take-up in Japan, continued development momentum
Brazils underlying leasing momentum remains strong, US ahead of expectations
Retain Add rating with an RNAV-backed target price of S$3.18
Leading supplier of modern logistics warehouse facilities

GLP is one of the leading global providers of modern logistics warehouse space in Asia
with 4,000 tenants spread across 43m sq m of logistics facilities across China, Japan,
Brazil and the US. In addition, it has 12.45m sq m of land reserves in China. Its strategy
of growing its fee income platform should also boost ROE in the medium term.
Still robust leasing appetite in China
No change.
China makes up 55% of group NAV at present. Demand for space remained robust with
1m sq m of new leases signed in 2QFY16 at 8.6% higher renewal rents. Although tenant
retention declined marginally, occupancy remained at a high 89% on slightly higher rent
incentives. We expect contributions from China to be back-end loaded as only 20% of
the FY16 targeted development completions have been met at half time.
Price Close
2.80
107.8
2.30
97.4
1.80
600
87.0
Vol m
400
Active leasing in Japan, development targets on track

Japan makes up 24% of NAV. Japan experienced a record quarter of new leases of
0.322m sq m in 2QFY16 and a 14% hike in rents upon renewal. Tenant retention was
high at 78% and occupancy remained high at 99%. GLP is on track to meet its
development starts target of US$980m, with plans to build GLP Nagareyama. This will
underpin value creation, with a development margin of c.20-25%.
200
Dec-14
Mar-15
Jun-15
Good underlying momentum in Brazil, the US forging ahead
Sep-15
Source: Bloomberg
Price performance
Absolute (%)
Relative (%)
1M
-10.2
-5.7
3M
-0.5
-0.2
12M
-21.3
-8.5
Brazil and the US currently account for c.12% of NAV. Operationally, Brazil enjoys
robust demand which pushes up occupancy to 95% and raises same-store rent by 6.8%
yoy. However, a 65bp cap rate expansion resulted in a revaluation deficit. Meanwhile,
US income from GLP US Income Partners I and GLP US Income Partners II will boost
contribution from this geography.
Reiterate Add
The longer term prospects for the modern logistics warehouse sector remains intact in
GLPs key markets, led by strong domestic consumption and the lack of modern
warehouse space. In addition, increasing AUM would result in higher fee income and
boost ROE in the longer run. We maintain our Add rating with an RNAV-based target
price of S$3.18.
[X]
Financial Summary
Analyst
LOCK Mun Yee
T (65) 6210 8606
Total Net Revenues (US$m)

Net Profit (US$m)
Core EPS (US$)
Core EPS Growth
FD Core P/E (x)
DPS (US$)
Dividend Yield
EV/EBITDA (x)
P/FCFE (x)
Net Gearing
P/BV (x)
ROE
Mar-14A
625
393.4
701.0
0.062
(9%)
23.34
0.033
2.32%
23.80
NA
11.5%
0.78
3.42%
Mar-15A
708
392.8
481.1
0.016
(73%)
87.09
0.041
2.88%
31.41
3.68
11.0%
0.79
0.91%
Mar-16F
840
488.2
712.9
0.044
169%
32.37
0.041
2.88%
30.99
NA
29.3%
0.75
2.36%
2.31
Mar-17F
1,022
572.3
318.8
0.067
51%
21.37
0.041
2.88%
29.44
14.01
37.3%
0.74
3.50%
0.90
Mar-18F
1,174
644.7
368.1
0.078
15%
18.51
0.041
2.88%
26.52
9.92
34.0%
0.73
3.98%
1.00

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BY THE NUMBERS
Share price info

Share px perf. (%)
1M
3M
12M
Relative
-5.7
-0.2
-8.5
Absolute
-10.2
-0.5
Major shareholders
GIC
Hillhouse Capital
-21.3
% held
35.7
7.3
P/BV vs ROE
1.60
1.40
1.20
1.00
0.80
0.60
0.40
0.20
0.00
4.50%
3.94%
3.38%
2.81%
2.25%
1.69%
1.13%
0.56%
0.00%
Growth
2,000
1,800
1,600
1,400
1,200
1,000
800
600
400
200
0
3,500%
3,100%
2,700%
2,300%
1,900%
1,500%
1,100%
700%
300%
-100%
-500%
ROE (rhs)
Profit & Loss

(US$m)
Total Net Revenues
Gross Profit
Operating EBITDA
Operating EBIT
Exceptional Items
Pre-tax Profit
Taxation
Profit After Tax
Minority Interests
Pref. & Special Div
Net Profit
Mar-14A
625
625
393
(5)
388
(81)
25
16
348
535
883
(142)
Mar-15A
708
708
393
(8)
385
(87)
41
0
338
519
857
(194)
Mar-16F
840
840
488
(7)
481
(100)
89
0
470
578
1,048
(138)
Mar-17F
1,022
1,022
572
(8)
565
(136)
105
0
534
0
534
(85)
Mar-18F
1,174
1,174
645
(8)
636
(163)
111
0
585
0
585
(94)
741
(40)
0
663
(182)
0
911
(198)
0
448
(129)
0
491
(123)
0
701
293
293
481
80
80
713
210
210
319
319
319
368
368
368
Cash Flow
(US$m)
EBITDA
Tax Paid
Capex
Shares Repurchased
Dividends Paid
Preferred Dividends
Mar-14A
393
305
Mar-15A
393
473
Mar-16F
488
Mar-17F
572
Mar-18F
645
(154)
(85)
(114)
(416)
562
(89)
(14)
742
(853)
0
(500)
563
(93)
(28)
807
(2,131)
2,869
(560)
666
(106)
(17)
317
(2,553)
1,323
39
98
(136)
(9)
479
(2,906)
514
60
105
(164)
0
530
(3,357)
514
0
29
(824)
(221)
0
0
(150)
(1,340)
510
(92)
1,174
159
0
(174)
0
0
(1,230)
0
(253)
0
(196)
0
0
(2,392)
2,400
0
0
(196)
0
0
(2,843)
3,000
0
0
(196)
454
83
1,759
2,918
0
2,204
2
2,805
6
(443)
143
BY THE NUMBERS
Balance Sheet
(US$m)
Total Debtors
Inventories
Fixed Assets
Total Investments
Intangible Assets
Short-term Debt
Total Creditors
Total Provisions
Total Liabilities
Minority Interests
Total Equity
Mar-14A
1,501
Mar-15A
1,446
Mar-16F
90
Mar-17F
380
Mar-18F
874
406
0
3
1,910
58
11,883
491
0
12,431
158
475
0
1,467
3,387
52
13,535
488
0
14,075
371
545
0
1,613
2,248
97
16,522
488
0
17,107
1,692
664
0
1,775
2,819
142
18,453
488
0
19,082
2,350
763
0
1,952
3,589
186
18,880
488
0
19,554
2,459
645
22
824
2,504
811
22
1,204
2,476
866
29
2,587
2,336
1,055
35
3,440
3,245
1,211
41
3,712
3,396
890
3,394
0
4,218
8,758
1,366
10,123
1,019
3,496
0
4,700
8,780
3,983
12,762
933
3,269
0
5,856
9,044
4,381
13,425
1,136
4,380
0
7,820
9,167
4,819
13,986
1,304
4,701
0
8,412
9,339
5,301
14,640
Mar-14A
(2.7%)
6.4%
63.0%
(0.24)
1.84
4.39
16.1%
95%
207.4
N/A
N/A
113%
3.21%
1.98%
Mar-15A
13.3%
(0.2%)
55.5%
(0.29)
1.81
4.13
22.7%
NA
227.0
N/A
N/A
102%
2.75%
1.33%
Mar-16F
18.6%
24.3%
58.2%
(0.83)
1.91
4.53
13.1%
146%
222.4
N/A
N/A
25%
2.95%
2.28%
Mar-17F
21.7%
17.2%
56.0%
(1.10)
1.93
4.14
16.0%
62%
216.0
N/A
N/A
26%
3.05%
2.73%
Mar-18F
14.8%
12.6%
54.9%
(1.05)
1.97
3.88
16.0%
53%
221.8
N/A
N/A
27%
3.18%
2.79%
Mar-14A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
100.0%
N/A
58.2%
N/A
Mar-15A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
100.0%
N/A
46.5%
N/A
Mar-16F
N/A
N/A
N/A
N/A
N/A
N/A
N/A
100.0%
N/A
57.3%
N/A
Mar-17F
N/A
N/A
N/A
N/A
N/A
N/A
N/A
100.0%
N/A
55.2%
N/A
Mar-18F
N/A
N/A
N/A
N/A
N/A
N/A
N/A
100.0%
N/A
54.2%
N/A
Key Ratios
Revenue Growth
BVPS (US$)
Effective Tax Rate
Inventory Days
ROIC (%)
ROCE (%)
Key Drivers
Unbooked Presales (m) (US$)
Gross Margins (%)
Contracted Sales ASP (per Sm) (US$)
144
Company Note
Singapore
Golden Agri-Resources
REDUCE (no change)
Bracing for higher depreciation charges
Current price:
Target price:
Previous target:
Up/downside:
S$0.34
S$0.35
S$0.35
2.9%
Reuters:
Bloomberg:
Market cap:
GAGR.SI
GGR SP
US$3,065m
S$4,330m
US$6.40m
S$9.00m
12,838m
50.0%

Current shares o/s
Free float:
El Nino is expected to cloud the groups FFB output growth prospects.
Changes in IAS 41 could raise its depreciation charges by US$77m in FY16.
Plans to commission two biodiesel plants in 2016 to cater to Indonesias biodiesel

mandate.
Project GGR to post lower earnings in FY16 due to higher depreciation charges.
Maintain Reduce due to its unexciting near-term earnings prospects.
9M15 earnings impacted by lower CPO prices

GGRs 9M15 core earnings fell 17% yoy as better refining margins could not offset lower
CPO prices. Its palm and laurics business posted stronger 3Q earnings as it benefited
from the potential levy implementation as well as its efforts to optimise its downstream
business. Its oilseeds-crushing business in China stayed profitable due to positive crush
margins.
El Nino could lead to lower output in 2016
No changes.
The group maintained its output growth guidance of 0-5% for 2015. It also revealed that
70% of its estates were severely affected by the recent Indonesian drought and
preliminary indications were that the El Nino-induced drought could cut Indonesia palm
oil output by 10% in 2016 and raise CPO prices to around US$700 per tonne.
Price Close
0.520
103.0
0.470
96.0
0.420
89.0
0.370
82.0
0.320
75.0
0.270
150
68.0
Plans to commission two biodiesel plants in 2016

It is building two 300,000tpa biodiesel plants in Indonesia, which will be ready by 2016
and will benefit from Indonesias biodiesel policy. The group expects Indonesia to
consume 2m tonnes of biodiesel in 2016, which is conservative compared to the
governments target of 4m tonnes.
Vol m
100
IAS 41 changes will led to higher depreciation charges
50
Dec-14
Mar-15
Jun-15
Sep-15
Source: Bloomberg
Price performance
Absolute (%)
Relative (%)
1M
-9.3
-4.8
3M
13.3
13.6
12M
-24.5
-11.7
The accounting changes of IAS 41 will reduce GGRs shareholders equity by US$5bn to
US$3.71bn and raise the groups depreciation charges by around US$77m beginning in
FY16 as the new accounting policy requires the mature estates to be depreciated over
their useful lives. The group has also revealed that its debt-over-equity ratio will rise from
0.35x to 0.83x following the accounting changes but it will not affect any of its debt
covenants, which have a threshold debt-to-equity ratio of 1.5x.
Projecting weaker earnings in FY16

We expect Golden Agri to post lower earnings in FY16 as the higher depreciation
charges due to the changes in accounting standards are expected to more than offset
the benefits of higher CPO prices. However, there is potential upside to our earnings if
the group is successful in raising the value-add from its downstream business.
Maintain Reduce and target price of S$0.35

We maintain our Reduce call given the groups unexciting near-term earnings prospects
stemming from currently weak CPO prices and slower output growth. Our target price of
S$0.35, which is based on its historical average P/E of 15x, is intact.
Financial Summary
Analyst
T (60) 3 2261 9073
E ivy.ng@cimb.com
Revenue (US$m)
Net Profit (US$m)
Core EPS (US$)
Core EPS Growth
FD Core P/E (x)
DPS (US$)
Dividend Yield
EV/EBITDA (x)
P/FCFE (x)
Net Gearing
P/BV (x)
ROE
Dec-13A
6,585
612.9
311.3
0.024
(32.9%)
10.14
0.009
3.66%
8.64
10.9
22.7%
0.35
3.69%
Dec-14A
7,619
527.2
113.6
0.016
(32.9%)
14.59
0.004
1.84%
10.97
9.4
28.1%
0.35
2.45%
Dec-15F
8,034
542.5
169.0
0.015
(7.7%)
15.77
0.004
1.64%
10.45
23.7
26.4%
0.35
2.24%
0.90
Dec-16F
9,236
626.3
171.4
0.013
(13.0%)
18.03
0.004
1.66%
9.52
NA
29.2%
0.34
1.92%
0.71
Dec-17F
9,999
706.7
213.6
0.016
24.7%
14.58
0.005
2.07%
8.49
107.2
29.1%
0.34
2.36%
0.76

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BY THE NUMBERS
Share price info

Share px perf. (%)
1M
3M
12M
Relative
-4.8
13.6
-11.7
Absolute
-9.3
13.3
-24.5
Major shareholders
The Widjaja Family Master Trust
% held
50.0
P/BV vs ROE

Growth
1.20
9.0%
35.0
700%
1.00
7.5%
30.0
571%
0.80
6.0%
25.0
443%
20.0
314%
15.0
186%
10.0
57%
0.60
4.5%
0.40
3.0%
0.20
1.5%
5.0
-71%
0.00
Jan-11
0.0%
0.0
-200%
Jan-12
Jan-13
Jan-14
Jan-15
Jan-16
ROE (rhs)
Profit & Loss

(US$m)
Total Net Revenues
Gross Profit
Operating EBITDA
Operating EBIT
Exceptional Items
Pre-tax Profit
Taxation
Profit After Tax
Minority Interests
Preferred Dividends
Net Profit
Dec-13A
6,585
1,363
613
(134)
479
(85)
(1)
0
393
37
430
(114)
Dec-14A
7,619
1,311
527
(149)
378
(94)
(1)
0
284
(126)
158
(41)
Dec-15F
8,034
1,369
543
(161)
381
(130)
2
0
253
(35)
218
(44)
Dec-16F
9,236
1,576
626
(238)
388
(131)
2
0
259
0
259
(82)
Dec-17F
9,999
1,735
707
(255)
451
(136)
2
0
317
0
317
(97)
316
(5)
0
0
0
311
318
318
117
(3)
0
0
0
114
214
221
174
(5)
0
0
0
169
197
205
177
(5)
0
0
0
171
171
179
220
(7)
0
0
0
214
214
221
Dec-13A
612.9
0.0
(384.6)
0.0
0.0
0.0
(84.8)
(113.9)
29.6
(459.9)
0.0
0.0
0.0
(459.9)
726.3
0.0
0.0
(113.1)
Dec-14A
527.2
0.0
(188.3)
0.0
0.0
0.0
(93.7)
(40.9)
204.3
(349.5)
0.0
0.0
0.0
(349.5)
487.7
0.0
0.0
(56.9)
Dec-15F
542.5
0.0
135.9
0.0
0.0
0.0
(130.5)
(43.5)
504.3
(300.0)
0.0
0.0
0.0
(300.0)
(68.4)
0.0
0.0
(50.7)
Dec-16F
626.3
0.0
(351.3)
0.0
0.0
0.0
(131.2)
(82.2)
61.7
(300.0)
0.0
0.0
0.0
(300.0)
100.0
0.0
0.0
(51.4)
Dec-17F
706.7
0.0
(143.5)
0.0
0.0
0.0
(136.4)
(96.7)
330.1
(300.0)
0.0
0.0
0.0
(300.0)
0.0
0.0
0.0
(64.1)
(417.0)
196.1
(234.2)
296.0
(328.6)
0.0
430.8
285.6
342.4
(26.1)
0.0
(119.1)
85.2
135.9
342.4
0.0
48.6
(189.8)
(138.3)
(103.3)
0.0
(64.1)
(34.0)
30.1
169.6
Cash Flow
(US$m)
EBITDA
Tax Paid
Capex
Shares Repurchased
Dividends Paid
Preferred Dividends
146
BY THE NUMBERS
Balance Sheet
(US$m)
Total Debtors
Inventories
Fixed Assets
Total Investments
Intangible Assets
Short-term Debt
Total Creditors
Total Provisions
Total Liabilities
Minority Interests
Total Equity
Dec-13A
587
1,180
772
0
2,539
2,351
691
579
7,988
11,610
1,060
0
786
39
1,884
1,521
0
56
1,577
1,884
5,345
8,721
83
8,803
Dec-14A
591
1,353
851
0
2,794
2,552
813
606
7,902
11,872
1,641
0
830
30
2,501
1,427
0
77
1,504
1,844
5,848
8,729
90
8,818
Dec-15F
641
1,352
897
0
2,890
2,690
815
606
7,902
12,013
1,500
0
1,007
30
2,536
1,500
0
81
1,581
1,844
5,961
8,847
95
8,942
Dec-16F
451
1,616
1,031
0
3,099
2,752
817
606
7,902
12,077
1,600
0
1,042
30
2,672
1,500
0
93
1,593
1,844
6,108
8,967
100
9,067
Dec-17F
417
1,736
1,116
0
3,270
2,797
819
606
7,902
12,123
1,600
0
1,096
30
2,725
1,500
0
101
1,601
1,844
6,170
9,116
107
9,223
Dec-13A
8.8%
(17.7%)
9.31%
(0.16)
0.68
4.71
26.5%
41.2%
24.23
56.34
43.38
3.51%
3.87%
2.54%
Dec-14A
15.7%
(14.0%)
6.92%
(0.19)
0.68
3.18
25.9%
23.7%
23.96
46.94
31.80
2.58%
2.99%
2.22%
Dec-15F
5.4%
2.9%
6.75%
(0.18)
0.69
2.76
20.0%
24.9%
24.55
47.86
34.60
2.52%
2.83%
2.14%
Dec-16F
15.0%
15.4%
6.78%
(0.21)
0.70
2.87
31.8%
30.0%
23.81
46.07
35.26
2.56%
2.82%
1.89%
Dec-17F
8.3%
12.8%
7.07%
(0.21)
0.71
3.24
30.5%
30.0%
24.46
47.43
34.55
2.88%
3.23%
2.17%
Dec-13A
371,102
338,490
20.5
-5.3%
854
Dec-14A
371,951
344,778
21.8
8.2%
818
Dec-15F
375,951
352,566
21.8
1.5%
670
Dec-16F
379,951
357,880
23.2
8.0%
750
Dec-17F
383,951
357,694
24.0
3.4%
800
Key Ratios
Revenue Growth
BVPS (US$)
Effective Tax Rate
Inventory Days
ROIC (%)
ROCE (%)
Key Drivers
Mature Estates (ha)
147
Company Note
Singapore
Guocoland
ADD (no change)
Underpinned by divestment gains
Current price:
Target price:
Previous target:
Up/downside:
S$1.85
S$2.73
S$2.73
48.2%
Reuters:
Bloomberg:
Market cap:
GUOC.SI
GUOL SP
US$1,545m
S$2,183m
US$0.15m
S$0.22m
1,926m
32.0%

Current shares o/s
Free float:
124.3
2.00
113.2
1.80
102.1
1.60
4
3
2
1
91.0
Vol m
135.4
2.20
Mar-15
Jun-15
Sep-15
Source: Bloomberg
Price performance
Absolute (%)
Relative (%)
Completion of Tanjong Pagar Centre to boost recurrent income base.

More asset recycling at Guocoland Malaysia.
Strong balance sheet and lower gearing of 0.64x post divestment of Beijing DZM.
Retain Add with RNAV-backed target price of S$2.73.
Better take up at Singapore residential projects

The group has two ongoing residential developments Leedon Residence and Sims
Urban Oasis. The former is c.55% taken up at present while the 1,024-unit Sims Urban
Oasis has seen its take-up rate improving to 35% as at Oct 15. Progressive sales of
these projects will continue to underpin profit contributions.
Growing recurrent income base by FY17
2.40
Dec-14
Better take-up at ongoing residential projects.
Completion of the 1.7msf GFA Tanjong Pagar Centre (estimated GDV of S$3bn) will
likely boost the groups recurrent income base. The 80%-owned development comprises
890,000sf of office space, 100,000sf of retail area, 181 residential units, 222 hotel rooms
and 150,000sf of urban area. The office component is scheduled to be completed in
2Q16. Leasing activities are ongoing and it recently signed a 31,000sf rental contract
with Virgin Active for a state-of-the-art fitness space
No Change
Price Close
1M
-1.3
3.2
3M
-5.2
-4.9
12M
4.2
17.0
Asset recycling in Malaysia

Guocolands 68%-owned subsidiary, Guocoland Malaysia, has been on a divestment
spree recently. Following the sale of an office tower at Damansara City in KL for
RM189m, the latters 40% associate has announced that it is selling a 696ha land parcel
for RM475m. In addition, it has also announced the sale of certain commercial and car
park properties at Block C and D Menara Pandan for RM33m. Upon completion of these
transactions, Guocoland Malaysia is expected to recognise a gain of RM270m.
Balance sheet strengthened

Following the completion of the Beijing DZM project divestment, Guocolands balance
sheet has strengthened significantly with net gearing declining to 0.64x as at 1QFY16. It
has a gross cash balance of S$2bn. This puts the group in a strong position to redeploy
its capital into RNAV-enhancing new developments.
Maintain Add rating

We reiterate our Add call for Guocoland with a RNAV-backed target price of S$2.73.
With a strong balance sheet, re-rating catalysts could emerge when it recycles its capital
into new projects.
[X]
Financial Summary
Analyst
LOCK Mun Yee
T (65) 6210 8606

Net Profit (S$m)
Core EPS (S$)
Core EPS Growth
FD Core P/E (x)
DPS (S$)
Dividend Yield
EV/EBITDA (x)
P/FCFE (x)
Net Gearing
P/BV (x)
ROE
Jun-14A
1,251
254.1
294.8
0.10
369%
18.98
0.050
2.71%
25.15
3.0
146%
0.77
4.54%
Jun-15A
1,160
306.6
217.0
0.14
39%
13.66
0.073
3.97%
21.85
19.4
140%
0.70
5.75%
Jun-16F
708
206.1
643.5
0.07
(47%)
25.86
0.065
3.54%
21.07
0.7
58%
0.59
2.62%
6.04
Jun-17F
919
364.8
151.3
0.13
79%
14.43
0.058
3.12%
11.47
5.7
51%
0.58
4.26%
1.02
Jun-18F
1,276
412.0
298.1
0.25
97%
7.33
0.063
3.41%
8.95
587.9
37%
0.54
8.02%
1.29

Powered by
EFA
BY THE NUMBERS
Share price info

Share px perf. (%)
1M
3M
12M
Relative
3.2
-4.9
17.0
Absolute
-1.3
-5.2
Major shareholders
Guoco Group
4.2
P/BV vs ROE
1.40
7.0%
1.20
6.0%
1.00
5.0%
% held
0.80
4.0%
68.0
0.60
3.0%
0.40
2.0%
0.20
1.0%
0.00
Jan-12
0.0%
Jan-13
Jan-14
Jan-15
Jan-16
Jan-17
Growth
1,000
900
800
700
600
500
400
300
200
100
0
6,000%
5,300%
4,600%
3,900%
3,200%
2,500%
1,800%
1,100%
400%
-300%
-1,000%
ROE (rhs)
Profit & Loss

(S$m)
Total Net Revenues
Gross Profit
Operating EBITDA
Operating EBIT
Exceptional Items
Pre-tax Profit
Taxation
Profit After Tax
Minority Interests
Pref. & Special Div
Net Profit
Jun-14A
1,251
312
254
(13)
241
(74)
19
3
189
222
410
(77)
Jun-15A
1,160
398
307
(14)
293
(55)
1
5
244
75
319
(75)
Jun-16F
708
277
206
(14)
192
(80)
8
6
126
669
795
(131)
Jun-17F
919
461
365
(14)
351
(100)
8
6
265
0
265
(49)
Jun-18F
1,276
551
412
(14)
398
(96)
112
6
421
0
421
(60)
333
(29)
(9)
244
(17)
(9)
664
(12)
(9)
216
(55)
(9)
361
(54)
(9)
295
115
115
217
160
160
643
84
84
151
151
151
298
298
298
Cash Flow
(S$m)
EBITDA
Tax Paid
Capex
Shares Repurchased
Dividends Paid
Preferred Dividends
Jun-14A
254
(19)
(24)
13
Jun-15A
307
(1)
(140)
14
Jun-16F
206
(8)
368
14
Jun-17F
365
(8)
212
14
Jun-18F
412
(112)
356
14
87
(86)
(67)
144
(89)
30
(65)
(47)
83
(231)
677
(88)
(82)
1,073
(732)
21
(121)
(131)
338
(293)
126
(117)
(49)
615
(111)
254
10
175
400
163
(2)
3
(2)
(233)
262
0
2,100
0
2,100
3,468
(1,187)
0
233
0
233
174
(132)
0
0
0
(111)
(500)
0
(65)
(65)
(96)
(87)
(77)
(596)
(98)
(43)
155
0
(1,284)
0
(219)
0
(577)
149
BY THE NUMBERS
Balance Sheet
(S$m)
Total Debtors
Inventories
Fixed Assets
Total Investments
Intangible Assets
Short-term Debt
Total Creditors
Total Provisions
Total Liabilities
Minority Interests
Total Equity
Jun-14A
716
4,287
472
1
0
5,475
406
2,801
0
37
3,244
2,299
Jun-15A
663
4,711
561
0
150
6,085
435
2,948
0
43
3,426
1,607
Jun-16F
1,834
4,343
590
0
150
6,917
435
1,588
0
43
2,066
1,607
Jun-17F
1,908
3,991
766
0
150
6,815
435
1,656
0
43
2,134
1,607
Jun-18F
1,848
3,392
1,064
0
150
6,454
435
1,880
0
43
2,357
1,607
429
47
2,774
2,768
527
181
2,315
3,673
556
229
2,392
2,486
592
148
2,347
2,354
646
158
2,412
1,854
203
2,971
0
5,746
2,821
153
2,974
227
3,900
0
6,216
3,137
160
3,296
227
2,713
0
5,105
3,707
171
3,878
227
2,581
0
4,928
3,795
226
4,021
227
2,081
0
4,493
4,039
280
4,319
Jun-14A
84.7%
96.5%
20.3%
(3.68)
2.38
2.79
18.8%
75.7%
124.4
0.24
228.6
4.11%
3.12%
1.93%
Jun-15A
(7.3%)
20.7%
26.4%
(3.90)
2.65
4.53
23.5%
61.0%
162.6
0.15
228.8
5.14%
3.64%
2.35%
Jun-16F
(39.0%)
(32.8%)
29.1%
(1.91)
3.13
2.19
16.4%
NA
297.5
0.00
460.1
3.07%
2.41%
0.67%
Jun-17F
29.8%
77.0%
39.7%
(1.73)
3.21
2.90
18.6%
45.0%
269.2
0.00
457.6
6.10%
4.66%
3.33%
Jun-18F
38.8%
12.9%
32.3%
(1.36)
3.41
3.40
14.1%
25.0%
261.6
0.00
311.9
7.12%
5.32%
4.96%
Jun-14A
N/A
N/A
N/A
N/A
25.0%
N/A
N/A
N/A
N/A
N/A
N/A
Jun-15A
N/A
N/A
N/A
N/A
34.3%
N/A
N/A
N/A
N/A
N/A
N/A
Jun-16F
N/A
N/A
N/A
N/A
39.2%
N/A
N/A
N/A
N/A
N/A
N/A
Jun-17F
N/A
N/A
N/A
N/A
50.2%
N/A
N/A
N/A
N/A
N/A
N/A
Jun-18F
N/A
N/A
N/A
N/A
43.2%
N/A
N/A
N/A
N/A
N/A
N/A
Key Ratios
Revenue Growth
BVPS (S$)
Effective Tax Rate
Inventory Days
ROIC (%)
ROCE (%)
Key Drivers
Gross Margins (%)
150
Company Note
Singapore
Ho Bee Land
ADD (no change)
Banking on recurrent income
Current price:
Target price:
Previous target:
Up/downside:
S$2.00
S$2.68
S$2.68
34.3%
Reuters:
Bloomberg:
Market cap:
HBEE.SI
HOBEE SP
US$940.8m
S$1,329m
US$0.09m
S$0.13m
703.3m
26.6%

Current shares o/s
Free float:
2.400
120.0
2.200
111.7
2.000
103.3
1.800
3
95.0
Vol m
Building a recurring income base

Ho Bees business model has evolved into a more recurring profile, with 70% of its GAV
derived from investment properties. Of this, two thirds are derived from Singapore and
the remaining from London office properties. This is in line with managements long-term
strategy to build up its recurring rental income, given the weakness in local residential
markets. We expect resilient rental income to form the bulk of its FY15 earnings.
Investment properties make up c.70% of GAV
No change.
Price Close
More recurrent income profile provides a stable base.

UK and Singapore investment properties form the bulk of GAV.
Slow Singapore residential market.
Australia residential activities to fill in slack from FY16 onwards.
Maintain Add with unchanged target price of S$2.68.
In addition to having the almost fully-occupied The Metropolis at Buona Vista in its
stable, Ho Bee is one of the first movers in the London office property market. Since
then, it has built up a portfolio of six office buildings in London totalling c.1m sq ft of NLA.
In total, investment properties are valued at c.S$2.8bn as at Dec 15, of which cS$1.3bn
is from UK. Some of these properties are currently under-rented, with medium-term
upside potential when the leases are renewed.
Slower Singapore residential activities

Given the weak residential market in Singapore, management continues to rent out
completed units in Sentosa and taking a cautious stance towards landbanking. To date,
it has rented out >50% of Cape Royale. With a gearing of 0.5x, it is well placed to tap
new opportunities when they arise.
1
Dec-14
Mar-15
Jun-15
Australian development contributions from FY16
Sep-15
Source: Bloomberg
Price performance
Absolute (%)
Relative (%)
1M
0.8
5.3
3M
2.3
2.6
12M
2.8
15.6
FY16-17 development earnings are projected to improve with the expected completion
of the Australian residential projects, Pearl in Doncaster, Melbourne and Rhapsody in
Surfers Paradise in early 2016. The Pearl is c.86% sold with an ASP of A$8,000/sq m,
while Rhapsody is more than 70% taken up. These should produce healthy profit
margins in the high teens given the low land costs.
Maintain Add
We maintain our Add call on Ho Bee with an unchanged RNAV-backed target price of
S$2.68. Investment properties now account for c.70% of group GAV and the stable
income provides a good buffer for earnings before contributions from completed
overseas projects flow in from FY16 onwards. Potential catalysts are earnings delivery
from overseas development projects and further earnings-accretive acquisitions.
[X]
Financial Summary
Analyst
LOCK Mun Yee
T (65) 6210 8606

Net Profit (S$m)
Core EPS (S$)
Core EPS Growth
FD Core P/E (x)
DPS (S$)
Dividend Yield
EV/EBITDA (x)
P/FCFE (x)
Net Gearing
P/BV (x)
ROE
Dec-13A
139.3
21.6
591.8
0.03
(88%)
78.33
0.100
5.01%
79.75
5.76
15.0%
0.58
0.85%
Dec-14A
99.6
60.7
314.0
0.06
124%
34.33
0.063
3.13%
37.23
NA
34.6%
0.51
1.58%
Dec-15F
134.7
99.6
68.9
0.10
70%
20.20
0.063
3.13%
27.95
5.96
53.4%
0.51
2.52%
1.00
Dec-16F
192.3
120.6
78.7
0.12
19%
16.92
0.063
3.13%
23.38
17.21
53.8%
0.50
2.96%
0.68
Dec-17F
342.0
149.5
113.6
0.17
44%
11.72
0.063
3.13%
16.74
2.55
38.7%
0.48
4.17%
0.93
Powered by
EFA
BY THE NUMBERS
Share price info

Share px perf. (%)
1M
3M
12M
Relative
5.3
2.6
15.6
Absolute
0.8
2.3
2.8
Major shareholders
Ho Bee Holdings
% held
72.6
P/BV vs ROE
0.800
0.700
0.600
0.500
0.400
0.300
0.200
0.100
0.000
18.0%
15.8%
13.5%
11.3%
9.0%
6.8%
4.5%
2.3%
0.0%

Growth
120
200%
100
142%
80
83%
60
25%
40
-33%
20
-92%
0
-150%
ROE (rhs)
Profit & Loss

(S$m)
Total Net Revenues
Gross Profit
Operating EBITDA
Operating EBIT
Exceptional Items
Pre-tax Profit
Taxation
Profit After Tax
Minority Interests
Pref. & Special Div
Net Profit
Dec-13A
139.3
139.3
21.6
(0.9)
20.7
(0.6)
12.1
0.0
32.2
578.3
610.5
(4.3)
Dec-14A
99.6
99.6
60.7
(1.0)
59.8
(16.6)
(2.7)
0.0
40.5
281.4
321.9
(7.4)
Dec-15F
134.7
134.7
99.6
(1.0)
98.6
(23.2)
2.2
0.0
77.6
3.5
81.0
(11.3)
Dec-16F
192.3
192.3
120.6
(1.0)
119.6
(46.6)
21.8
0.0
94.8
0.0
94.8
(15.2)
Dec-17F
342.0
342.0
149.5
0.0
149.5
(52.1)
37.6
0.0
135.0
0.0
135.0
(20.3)
606.2
(14.4)
0.0
314.5
(0.5)
0.0
69.7
(0.8)
0.0
79.7
(1.0)
0.0
114.8
(1.2)
0.0
591.8
17.5
17.5
314.0
39.1
39.1
68.9
65.9
65.9
78.7
78.7
78.7
113.6
113.6
113.6
Cash Flow
(S$m)
EBITDA
Tax Paid
Capex
Shares Repurchased
Dividends Paid
Preferred Dividends
Dec-13A
21.6
Dec-14A
60.7
Dec-15F
99.6
Dec-16F
120.6
Dec-17F
149.5
244.7
(60.2)
(251.1)
(11.4)
315.4
0.0
(18.5)
247.7
(5.7)
0.0
(17.4)
(16.9)
(1.7)
0.0
(8.1)
(159.6)
(1.7)
0.0
(9.5)
99.8
(1.7)
0.0
(13.5)
451.4
(1.7)
(10.9)
(16.6)
7.6
(48.3)
(484.4)
(486.1)
315.2
(19.0)
(429.8)
(431.5)
814.5
0.0
(48.2)
(49.9)
27.5
0.0
(2.3)
(3.9)
74.5
0.0
(54.2)
(33.6)
(33.4)
(33.4)
(33.4)
(5.3)
(100.1)
(18.0)
244.6
(23.5)
757.6
(52.8)
(58.7)
(52.1)
(10.9)
152
BY THE NUMBERS
Balance Sheet
(S$m)
Total Debtors
Inventories
Fixed Assets
Total Investments
Intangible Assets
Short-term Debt
Total Creditors
Total Provisions
Total Liabilities
Minority Interests
Total Equity
Dec-13A
118
204
52
0
4
377
21
2,594
0
0
2,615
371
Dec-14A
10
80
43
0
169
302
22
3,361
0
0
3,382
164
Dec-15F
176
341
58
0
150
725
22
3,688
0
0
3,710
333
Dec-16F
168
435
83
0
150
836
23
3,773
0
0
3,796
339
Dec-17F
604
394
148
0
150
1,295
25
3,821
0
0
3,846
355
113
44
528
99
89
40
293
752
81
55
469
1,266
165
78
582
1,288
443
139
936
1,346
18
116
0
645
2,331
17
2,348
24
775
0
1,069
2,601
15
2,616
32
1,298
0
1,767
2,637
29
2,665
46
1,333
0
1,915
2,682
29
2,711
20
1,366
0
2,302
2,762
73
2,835
Dec-13A
(69.8%)
(84%)
15.5%
(0.52)
3.44
3.92
0.7%
401%
142.3
N/A
N/A
4.7%
1.00%
1.05%
Dec-14A
(28.5%)
182%
61.0%
(1.36)
3.90
3.32
2.3%
103%
173.8
N/A
N/A
40.3%
1.93%
1.40%
Dec-15F
35.2%
64%
73.9%
(2.13)
3.95
4.19
14.0%
51%
137.0
N/A
N/A
44.5%
2.54%
2.11%
Dec-16F
42.8%
21%
62.7%
(2.19)
4.02
2.27
16.0%
42%
134.3
N/A
N/A
22.8%
2.92%
2.61%
Dec-17F
77.8%
24%
43.7%
(1.64)
4.14
2.87
15.0%
29%
123.0
N/A
N/A
27.7%
3.37%
3.23%
Dec-13A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
18.5%
81.5%
N/A
N/A
Dec-14A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
100.0%
0.0%
N/A
N/A
Dec-15F
N/A
N/A
N/A
N/A
N/A
N/A
N/A
99.1%
0.9%
N/A
N/A
Dec-16F
N/A
N/A
N/A
N/A
N/A
N/A
N/A
76.3%
23.7%
N/A
N/A
Dec-17F
N/A
N/A
N/A
N/A
N/A
N/A
N/A
43.5%
56.5%
N/A
N/A
Key Ratios
Revenue Growth
BVPS (S$)
Effective Tax Rate
Inventory Days
ROIC (%)
ROCE (%)
Key Drivers
Gross Margins (%)
153
HospitalsSingaporeEquity researchDecember 9, 2015
Company Note
Singapore
IHH Healthcare
ADD (no change)
Best of stability and growth
Current price:
Target price:
Previous target:
Up/downside:
S$2.11
S$2.52
S$2.52
19.6%
Reuters:
Bloomberg:
Market cap:
IHHH.SI
IHH SP
US$12,281m
S$17,351m
US$0.08m
S$0.11m
8,223m
18.3%

Current shares o/s
Free float:
No change.
IHH's strong pipeline will increase bed capacity by more than 40% over the next
three years. The most significant will be Gleneagles HK (completion early-2017).
Management sees prices in HK being 30-50% higher than Singapore with similar
EBITDAR margins. For perspective, Singapore forms 45% of group net profit.
With a large portfolio of mature hospitals, we do not expect much margin pressure
despite the influx of new capacity.
Maintain Add. IHH is poised for a runway of growth. Beyond its core markets and
HK, IHH has also made inroads into India and China for its next phase of growth.
Attractive macro drivers

IHH remains largely unscathed by todays weak consumer market. While other
healthcare players in Singapore have been experiencing a more measured pace of
growth, we think IHH has been able to better navigate this because its Novena hospital
is still ramping up operating leverage. The long-term trends of rising affluence and an
ageing population are still intact while IHHs well-established brand and enlarged bed
capacity position the company to benefit from these trends.
Diversified geographical footprint

Price Close

128.3
2.00
116.9
1.80
105.4
1.60
40
30
20
10
94.0
Vol m
2.20
Dec-14
Mar-15
Jun-15
Sep-15
Source: Bloomberg
Price performance
Absolute (%)
Relative (%)
1M
1.0
5.5
3M
10.5
9.7
12M
14.4
27.9
An oft-overlooked positive is the complementary stages of maturity of IHHs operations.

Singapore and Malaysia are relatively mature markets generating free cashflow to fund
investments in new markets. Turkey is a high-growth market with multiple greenfield and
expansion projects in the pipeline. India is the latest growth market following the Global
Hospitals acquisition. Hong Kong is poised to be the next cash cow, with Gleneagles HK
opening in 2017. China is likely to be the groups next core market.
HK will be a significant earnings contributor within five years

Excluding IHHs international operations, Singapore only contributes ~920 beds or 16%
of total bed capacity. However, Singapore made up 45% of its 1H15 core net profit. The
similarities in terms of demographics and economic prosperity between Singapore and
Hong Kong lead us to believe that the 500-bed Gleneagles HK will form a significant
portion of the groups earnings going forward.
India and China will provide long-term growth

In 2015, IHH executed its inorganic strategy to enter India. The latest acquisition is a
73.4% stake in Global Hospitals for Rs12.8bn. This will expand IHHs presence in India
to ~1,800 beds (Singapore: ~920, Malaysia and Turkey: ~2,100 each). These are fairly
young assets and IHHs existing operations in India are currently loss-making. The
group has also recently secured an operating license in China. We expect India and
China to provide the next phases of growth.
Maintain Add, IHH is our top hospital pick

We maintain our Add rating and SOP-based target price of S$2.52. In the near term,
growth will likely come from a ramp-up in core markets, with a strong S$ providing
support. HK will start contributing from FY17, while India and China will contribute in the
longer term.
[X]
Financial Summary
Analysts
Jonathan SEOW
T (65) 6210 8671
E jonathanwp.seow@cimb.com
Kenneth NG, CFA
T (65) 6210 8610
Revenue (RMm)
Operating EBITDA (RMm)
Net Profit (RMm)
Core EPS (RM)
Core EPS Growth
FD Core P/E (x)
DPS (RM)
Dividend Yield
EV/EBITDA (x)
P/FCFE (x)
Net Gearing
P/BV (x)
ROE
Dec-13A
6,756
1,750
631
0.07
37.3%
91.28
0.020
0.31%
31.89
473.5
11.6%
2.86
3.21%
Dec-14A
7,344
1,943
754
0.09
24.0%
73.73
0.030
0.47%
28.63
100.6
8.5%
2.68
3.75%
Dec-15F
8,396
2,165
893
0.12
41.2%
52.14
0.022
0.34%
26.37
NA
12.3%
2.60
5.05%
0.94
Dec-16F
10,343
2,703
1,281
0.16
27.9%
40.86
0.031
0.49%
21.06
94.9
10.4%
2.47
6.19%
1.10
Dec-17F
11,771
3,002
1,465
0.18
14.3%
35.73
0.036
0.56%
18.85
64.1
7.8%
2.34
6.73%
1.04

Powered by
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BY THE NUMBERS
Share price info

Share px perf. (%)
1M
3M
12M
Relative
5.5
9.7
27.9
Absolute
1.0
10.5
14.4
Major shareholders
% held
Khazanah Nasional Bhd
43.5
Mitsui & Co Ltd
20.2
Employees Provident Fund
9.0
P/BV vs ROE

Growth
3.00
7.00%
60.0
50%
2.50
5.83%
50.0
32%
2.00
4.67%
40.0
13%
1.50
3.50%
30.0
-5%
1.00
2.33%
20.0
-23%
0.50
1.17%
10.0
-42%
0.00
0.00%
0.0
-60%
ROE (rhs)
Profit & Loss

(RMm)
Total Net Revenues
Gross Profit
Operating EBITDA
Operating EBIT
Exceptional Items
Pre-tax Profit
Taxation
Profit After Tax
Minority Interests
Preferred Dividends
Net Profit
Dec-13A
6,756
3,089
1,750
(601)
1,149
(270)
2
0
882
Dec-14A
7,344
3,298
1,943
(607)
1,336
(124)
10
0
1,221
Dec-15F
8,396
3,795
2,165
(620)
1,545
(211)
5
0
1,338
Dec-16F
10,343
4,717
2,703
(692)
2,011
(178)
5
0
1,838
Dec-17F
11,771
5,356
3,002
(757)
2,245
(171)
5
0
2,079
882
(148)
1,221
(278)
1,338
(303)
1,838
(399)
2,079
(447)
734
(103)
943
(189)
1,036
(143)
1,439
(158)
1,631
(167)
631
564
564
754
704
704
893
1,001
1,001
1,281
1,281
1,281
1,465
1,465
1,465
Cash Flow
(RMm)
EBITDA
Tax Paid
Capex
Shares Repurchased
Dividends Paid
Preferred Dividends
Dec-13A
1,750
Dec-14A
1,943
Dec-15F
2,165
Dec-16F
2,703
Dec-17F
3,002
(187)
(11)
28
41
47
(52)
(329)
(183)
999
(1,426)
(98)
(190)
(203)
1,441
(909)
0
(268)
(303)
1,622
(1,615)
0
(213)
(399)
2,131
(1,615)
0
(213)
(447)
2,388
(1,615)
(217)
87
(1,556)
665
0
(212)
375
(746)
(179)
83
0
(762)
(2,377)
0
0
0
35
(1,579)
0
0
0
42
(1,573)
0
0
(164)
(179)
(256)
(293)
(264)
(525)
170
516
885
(268)
(447)
(1,202)
(755)
(487)
(213)
(470)
82
552
765
(213)
(506)
309
816
1,029
0
122
787
230
109
(228)
155
BY THE NUMBERS
Balance Sheet
(RMm)
Total Debtors
Inventories
Fixed Assets
Total Investments
Intangible Assets
Short-term Debt
Total Creditors
Total Provisions
Total Liabilities
Minority Interests
Total Equity
Dec-13A
2,145
1,002
153
114
3,414
9,366
2,097
11,509
875
23,847
291
Dec-14A
2,468
1,028
172
74
3,741
9,148
2,212
11,692
1,847
24,900
677
Dec-15F
1,534
1,150
171
74
2,929
10,208
2,217
11,628
2,666
26,718
677
Dec-16F
1,829
1,417
209
74
3,529
11,193
2,222
11,565
2,666
27,646
677
Dec-17F
2,352
1,613
239
74
4,278
12,113
2,227
11,504
2,666
28,509
677
1,331
221
1,843
4,170
1,391
291
2,358
3,593
1,540
291
2,507
3,593
1,886
291
2,853
3,593
2,159
291
3,126
3,593
390
4,560
935
7,338
18,075
1,848
19,923
438
4,031
938
7,327
19,452
1,862
21,313
438
4,031
938
7,476
20,166
2,005
22,171
438
4,031
938
7,822
21,191
2,163
23,353
438
4,031
938
8,095
22,362
2,330
24,692
Dec-13A
17.4%
3.4%
25.9%
(0.28)
2.22
3.50
16.8%
25.8%
50.86
14.43
133.1
5.60%
4.90%
3.79%
Dec-14A
8.7%
11.0%
26.5%
(0.22)
2.38
7.04
22.8%
32.5%
50.44
14.65
122.8
6.22%
5.41%
3.82%
Dec-15F
14.3%
11.4%
25.8%
(0.33)
2.45
5.76
22.6%
20.0%
47.34
13.59
116.2
6.93%
5.94%
4.28%
Dec-16F
23.2%
24.9%
26.1%
(0.30)
2.58
9.42
21.7%
20.0%
45.42
12.36
111.4
8.36%
7.32%
5.32%
Dec-17F
13.8%
11.0%
25.5%
(0.23)
2.72
10.52
21.5%
20.0%
46.97
12.76
115.1
9.00%
7.82%
5.64%
Dec-13A
N/A
N/A
68.0%
N/A
4,194.0
N/A
N/A
Dec-14A
N/A
N/A
70.7%
N/A
4,521.0
N/A
N/A
Dec-15F
N/A
N/A
67.2%
N/A
4,918.2
N/A
N/A
Dec-16F
N/A
N/A
68.0%
N/A
5,114.6
N/A
N/A
Dec-17F
N/A
N/A
68.0%
N/A
5,337.6
N/A
N/A
Key Ratios
Revenue Growth
Net Cash Per Share (RM)
BVPS (RM)
Effective Tax Rate
Inventory Days
ROIC (%)
ROCE (%)
Key Drivers
No. Of Patient Admissions (m P.a.)
Revenue Per Patient Bed (RM)
Occupancy Rate Of Beds (%)
Average Length Of Stay (days)
Beds Opened (units)
Bed Turnover A Year (x)
% of fgn patients to patient load
156
Company Note
Singapore
Indofood Agri Resources
HOLD (no change)
Prefer SIMP for direct exposure to CPO
Current price:
Target price:
Previous target:
Up/downside:
S$0.50
S$0.60
S$0.60
20.5%
Reuters:
Bloomberg:
Market cap:
IFAR.SI
IFAR SP
US$489.1m
S$691.0m
US$0.26m
S$0.37m
1,448m
30.4%

Current shares o/s
Free float:
El Nino-induced drought to cut its 2016 FFB output.

Forex losses caused the group to post losses in 9M15.
We expect higher CPO prices and the absence of forex losses to lift FY16 earnings.
Changes in accounting policy for IAS 41 could cut its FY16 net profit by Rp150bn.
Maintain Hold and SOP-based target price. We prefer SIMP.
Current drought to cut 2016 production

The 2% yoy rise in 9M15 FFB output (nucleus) was driven by higher production at its
South Sumatra and Kalimantan estates. The group revealed that most of its estates
have been stressed by average monthly rainfall of less than 120mm for 3-4 months or
longer. This is also one of the worst droughts its estates have experienced and could
dampen its 1H16 FFB output by as much as 20% yoy.
Cutting production and new planting guidance
No change.
In view of this, it has lowered its 2015 FFB output guidance by 100k tonnes to 3.3m
tonnes and its new planting target from 5,000-8,000ha for 2015 to 2,000ha for palm oil
for 2015, due to the dry weather. The group expects the drought and haze that its
estates experienced in 2015 to reduce its 1H16 and 2H17 palm oil production.
Price Close
9M15 in the red due to forex losses
0.800
105.1
0.700
97.3
0.600
89.6
0.500
81.8
0.400
6
74.0
Vol m
Indofood Agri's (IFAR) 9M15 core net profit (excluding forex losses) fell 55% yoy due to
weaker plantation earnings as well as losses from CMAA (its 50%-owned sugar JV in
Brazil). The group posted higher forex losses of Rp482bn in 9M15 arising from
translation loss on its US$250m debt as the rupiah weakened to Rp/US$14,657 as at 30
Sep 2015. This caused the group to post losses on its reported earnings. The good
news is that the rupiah has since appreciated.
2
Dec-14
Mar-15
Jun-15
Higher earnings projected in FY16
Sep-15
Source: Bloomberg
Price performance
Absolute (%)
Relative (%)
1M
-12.4
-7.9
3M
6.5
6.8
12M
-31.3
-18.5
We project a stronger 4Q for IFAR thanks to the sale of inventory brought forward from
3Q, better performance from CMAA, and the absence of forex losses. For FY16, we
expect IFAR to deliver stronger earnings on the back of higher CPO and sugar prices.
We project CPO price to increase 12.5% to an average of RM2,450 per tonne for 2016.
Potential impact of IAS 41 on earnings

The group has said that the changes in accounting policy IAS 41 for biological assets
will result in a one-off adjustment of its plantation assets back to historical costs less
accumulated depreciation and impairment. Our estimate shows that shareholders equity
could be written down by 22%, following the adoption of the new accounting charges.
The estimated potential impact on our FY16 net profit is Rp150bn due to higher
depreciation charges.
Prefer SIMP for exposure to the plantation assets

IFAR remains a Hold as the share price is supported by the low implied EV/ha of the
group though this is partially offset by the weak near-tern earnings. We prefer its
plantation arm, SIMP for direct exposure to the groups plantation assets in Indonesia.
[X]
Financial Summary
Analyst
T (60) 3 2261 9073
E ivy.ng@cimb.com
Revenue (Rpb)
Operating EBITDA (Rpb)
Net Profit (Rpb)
Normalised EPS (Rp)
DPS (Rp)
Dividend Yield
EV/EBITDA (x)
P/FCFE (x)
Net Gearing
P/BV (x)
ROE
Dec-13A
13,280
2,620
550.4
476.2
(32.8%)
10.22
46.83
0.96%
7.82
NA
21.9%
0.50
4.99%
Dec-14A
14,963
3,505
809.7
559.2
17.4%
8.70
47.93
0.98%
6.26
99.59
26.3%
0.48
5.66%
Dec-15F
16,285
2,733
380.2
262.6
(53.0%)
18.54
22.51
0.46%
8.53
NA
28.9%
0.47
2.57%
0.90
Dec-16F
18,634
3,301
629.9
435.1
65.7%
11.19
37.29
0.77%
7.38
NA
29.2%
0.45
4.11%
0.93
Dec-17F
19,598
3,553
732.1
505.7
16.2%
9.63
43.35
0.89%
7.06
NA
28.5%
0.43
4.57%
0.83

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BY THE NUMBERS
Share price info

Share px perf. (%)
Relative
Absolute
1M
-7.9
-12.4
Major shareholders
Indofood Singapore Holdings
3M
6.8
6.5
12M
P/BV vs ROE
2.50
12.0%
2.00
9.6%
-18.5
-31.3

35.0
120%
30.0
91%
25.0
63%
% held
1.50
7.2%
20.0
34%
69.6
1.00
4.8%
15.0
6%
10.0
-23%
5.0
-51%
0.0
-80%
0.50
2.4%
0.00
0.0%
ROE (rhs)
Profit & Loss

(Rpb)
Total Net Revenues
Gross Profit
Operating EBITDA
Operating EBIT
Exceptional Items
Pre-tax Profit
Taxation
Profit After Tax
Minority Interests
Preferred Dividends
Net Profit
Dec-13A
13,280
3,204
2,620
(783)
1,837
(354)
(6)
0
1,478
(139)
1,338
(380)
Dec-14A
14,963
3,610
3,505
(813)
2,692
(512)
(121)
0
2,058
0
2,058
(679)
Dec-15F
16,285
3,929
2,733
(833)
1,900
(576)
(235)
0
1,088
0
1,088
(397)
Dec-16F
18,634
4,495
3,301
(855)
2,447
(618)
(175)
0
1,654
0
1,654
(549)
Dec-17F
19,598
4,728
3,553
(876)
2,677
(662)
(125)
0
1,890
0
1,890
(605)
959
(408)
0
0
0
0
550
1,098
689
1,379
(569)
0
0
0
0
810
1,379
810
691
(311)
0
0
0
0
380
691
380
1,105
(475)
0
0
0
0
630
1,105
630
1,285
(553)
0
0
0
0
732
1,285
732
Dec-13A
2,620
Dec-14A
3,505
Dec-15F
2,733
Dec-16F
3,301
Dec-17F
3,553
(78)
(147)
(105)
(235)
(576)
(397)
1,447
(2,500)
0
0
0
(2,500)
0
0
0
(33)
0
267
235
(819)
(1,053)
(273)
(175)
(618)
(549)
1,812
(2,500)
0
0
0
(2,500)
0
0
0
(54)
0
350
296
(392)
(688)
135
(124)
(662)
(605)
2,057
(2,500)
0
0
0
(2,500)
0
0
0
(63)
0
322
259
(184)
(443)
424
Cash Flow
(Rpb)
EBITDA
Tax Paid
Capex
Shares Repurchased
Dividends Paid
Preferred Dividends
298
329
(333)
(749)
2,166
(3,091)
15
0
(1,754)
(4,830)
1,719
0
(212)
(387)
0
0
1,119
(1,545)
(946)
(2,146)
412
103
(512)
(725)
2,783
(3,057)
0
0
(650)
(3,707)
995
0
(166)
(244)
0
122
707
(217)
71
(183)
158
BY THE NUMBERS
Balance Sheet
(Rpb)
Total Debtors
Inventories
Fixed Assets
Total Investments
Intangible Assets
Short-term Debt
Total Creditors
Total Provisions
Total Liabilities
Minority Interests
Total Equity
Dec-13A
3,803
1,433
1,568
134
6,938
9,781
1,263
3,248
16,476
30,767
4,490
0
1,937
77
6,504
4,305
Dec-14A
3,586
1,222
1,773
231
6,812
11,027
1,218
3,254
17,844
33,342
4,749
0
2,058
144
6,951
5,068
Dec-15F
2,767
1,330
1,930
252
6,279
12,693
1,045
3,254
18,017
35,009
4,749
0
2,265
144
7,159
5,068
Dec-16F
2,375
1,522
2,208
288
6,394
14,339
870
3,254
18,192
36,654
4,749
0
2,624
144
7,518
5,068
Dec-17F
2,192
1,601
2,323
303
6,418
15,963
745
3,254
18,317
38,278
4,749
0
2,727
144
7,621
5,068
555
4,860
3,508
14,872
13,996
8,837
22,833
615
5,684
3,802
16,437
14,629
9,088
23,717
670
5,738
3,983
16,879
15,009
9,400
24,408
766
5,835
4,181
17,533
15,639
9,875
25,514
806
5,874
4,399
17,894
16,372
10,428
26,800
Dec-13A
(4.1%)
(20.2%)
19.7%
(3,448)
9,667
3.41
28.4%
9.83%
29.99
62.62
68.66
6.65%
5.99%
4.00%
Dec-14A
12.7%
33.8%
23.4%
(4,304)
10,104
3.63
33.0%
8.57%
26.78
53.72
64.22
8.79%
8.06%
4.86%
Dec-15F
8.8%
(22.0%)
16.8%
(4,870)
10,367
2.43
36.5%
8.57%
24.72
54.70
63.86
5.73%
5.57%
3.11%
Dec-16F
14.4%
20.8%
17.7%
(5,140)
10,802
2.97
33.2%
8.57%
24.21
53.57
63.29
6.98%
6.82%
4.09%
Dec-17F
5.2%
7.6%
18.1%
(5,267)
11,308
3.09
32.0%
8.57%
25.13
55.61
65.68
7.23%
7.16%
4.44%
Dec-13A
239,921
176,624
14.3
-2.6%
857
Dec-14A
246,055
185,181
16.0
12.6%
821
Dec-15F
254,055
197,263
15.7
1.6%
670
Dec-16F
262,055
204,265
15.9
4.1%
750
Dec-17F
270,055
208,399
16.1
2.0%
800
Key Ratios
Revenue Growth
Net Cash Per Share (Rp)
BVPS (Rp)
Effective Tax Rate
Inventory Days
ROIC (%)
ROCE (%)
Key Drivers
Mature Estates (ha)
159
Company Note
Singapore
Keppel Corporation
HOLD (no change)
Asset recycling to ease O&M burden
Current price:
Target price:
Previous target:
Up/downside:
S$6.42
S$7.12
S$7.12
10.9%
Reuters:
Bloomberg:
Market cap:
KPLM.SI
KEP SP
US$8,230m
S$11,627m
US$22.11m
S$31.14m
1,798m
60.0%

Current shares o/s
Free float:
No change.
Deceleration of order book may be prolonged if cycle does not turn around in 2018.
Earnings downside remains if Brazilian woes worsen.
We maintain our Hold call, as we believe there could be value proposition from
divestment of non-core assets that would lead to dividend upside.
Order book could shrink 30% p.a.

KEP's order book stood at S$10bn as at end-9M15, with order wins of S$1.7bn YTD. A
prolonged dreariness in the offshore capex cycle beyond 2016 could erode KEPs order
book by c.30% p.a. to S$4bn by end-2017. Accordingly, O&M earnings will see a
significant plunge in FY17, shrinking by 20% from FY15.
Brazilian contracts too big to fail

Including the two FPSO topside integration contracts for Petrobras, KEPs exposure in
Brazil amounted to c.S$7bn or 70% of its order book. Outright cancellation may not be
realistic given the heavy investments that it had already sunk in. Various stakeholders
and creditors have too much to lose, including national banks and pension funds.
However, we believe that the contract settlement of the six semi-subs for Sete Brasil will
not come soon, as the timeline has been a moving target.
Rising net gearing

Price Close
10.10
114.0
9.10
107.8
8.10
101.5
7.10
95.3
6.10
30
89.0
Vol m
20
10
Dec-14
Mar-15
Jun-15
Sep-15
Source: Bloomberg
Price performance
Absolute (%)
Relative (%)
1M
-9.8
-5.3
3M
-5.9
-5.6
12M
-21.7
-8.9
Its net gearing rose from 0.11x at end-2014 to 0.52x at end-Sep 15, mainly to fund
O&Ms working capital and this trend is likely to be worsened by the drag from Sete
Brasil. We believe KEP is likely to unlock non-core assets in the near term to ease any
balance sheet stress.
Asset recycling
In the long term, KEP is considering partnering with private funds to grow its
infrastructure assets to achieve better returns. In addition, there will continue to be
periodic monetisation of assets across segments by injection into a REIT or trust
structure to attract higher valuations. We believe that he property assets in Alpha
Investments could be the candidates that have been earmarked.
Maintain Hold
Our RNAV-based target price is intact. KEP's share price is likely to be capped by
uncertainty from Sete Brasil contracts and the ongoing corruption probe by Petrobras.
However, upside surprise could come from major divestment of non-core assets. Its
valuation is not expensive at c.9x CY17 P/E, 1 s.d. below its 10-year trading band. We
would re-evaluate our recommendation if it can clinch higher order wins and the
settlement of Brazilian contracts.
[X]
Financial Summary
Analyst
LIM Siew Khee
T (65) 6210 8664
E siewkhee.lim@cimb.com
Revenue (S$m)
Net Profit (S$m)
Core EPS (S$)
Core EPS Growth
FD Core P/E (x)
DPS (S$)
Dividend Yield
EV/EBITDA (x)
P/FCFE (x)
Net Gearing
P/BV (x)
ROE
Dec-13A
12,380
2,377
1,790
1.00
(20.8%)
6.53
0.50
7.71%
7.18
5.63
11.2%
1.22
18.9%
Dec-14A
13,283
2,639
1,885
1.05
5.3%
6.24
0.48
7.54%
6.65
10.49
11.2%
1.12
18.8%
Dec-15F
10,452
1,444
1,473
0.68
(35.2%)
9.45
0.37
5.69%
13.78
NA
52.1%
1.04
11.5%
0%
1.02
Dec-16F
10,851
1,669
1,420
0.78
15.0%
8.22
0.35
5.48%
11.74
10.03
46.6%
0.97
12.3%
0%
1.01
Dec-17F
10,183
1,625
1,385
0.76
(2.5%)
8.43
0.34
5.35%
11.09
4.45
32.9%
0.92
11.2%
0%
0.99

Powered by
EFA
BY THE NUMBERS
Share price info

Share px perf. (%)
1M
3M
12M
Relative
-5.3
-5.6
-8.9
Absolute
-9.8
-5.9
Major shareholders
Temasek Holdings
P/BV vs ROE
3.50
30.0%
3.00
25.7%
-21.7
2.50
21.4%
% held
2.00
17.1%
21.3
1.50
12.9%
1.00
8.6%
0.50
4.3%
0.00
0.0%
Growth
16.0
14.0
12.0
10.0
8.0
6.0
4.0
2.0
0.0
100%
80%
60%
40%
20%
0%
-20%
-40%
-60%
ROE (rhs)
Profit & Loss

(S$m)
Total Net Revenues
Gross Profit
Operating EBITDA
Operating EBIT
Exceptional Items
Pre-tax Profit
Taxation
Profit After Tax
Minority Interests
Preferred Dividends
Net Profit
Dec-13A
12,380
2,109
2,377
(242)
2,134
19
626
14
2,794
0
2,794
(462)
Dec-14A
13,283
2,305
2,639
(265)
2,373
(1)
504
12
2,889
0
2,889
(462)
Dec-15F
10,452
1,249
1,444
(284)
1,160
27
334
8
1,529
287
1,816
(310)
Dec-16F
10,851
1,297
1,669
(303)
1,366
26
363
8
1,763
0
1,763
(313)
Dec-17F
10,183
1,217
1,625
(323)
1,302
21
386
7
1,717
0
1,717
(302)
2,331
(541)
0
2,426
(541)
0
1,506
(33)
1,450
(30)
1,414
(29)
1,790
1,790
1,790
1,885
1,885
1,885
1,473
1,235
1,235
1,420
1,420
1,420
1,385
1,385
1,385
Cash Flow
(S$m)
EBITDA
Tax Paid
Capex
Shares Repurchased
Dividends Paid
Preferred Dividends
Dec-13A
2,377
(308)
(734)
(46)
(105)
0
25
(585)
625
(936)
534
(576)
300
(678)
2,130
40
0
(843)
201
1,528
1,475
2,077
67
Dec-14A
2,639
(194)
(1,762)
0
(332)
(49)
(0)
(328)
(27)
(595)
125
(667)
2,014
877
272
34
0
(1,029)
3
(720)
129
1,121
980
Dec-15F
1,444
Dec-16F
1,669
Dec-17F
1,625
(3,150)
224
1,519
254
8
27
(310)
(1,727)
(650)
809
(2,771)
0
8
26
(313)
1,614
(650)
0
0
0
7
21
(302)
2,871
(650)
0
0
(2,612)
300
0
(650)
200
0
(650)
400
0
(663)
(639)
(623)
(363)
(4,702)
(4,039)
(4,100)
(439)
525
1,164
1,203
(223)
1,997
2,621
2,456
161
BY THE NUMBERS
Balance Sheet
(S$m)
Total Debtors
Inventories
Fixed Assets
Total Investments
Intangible Assets
Short-term Debt
Total Creditors
Total Provisions
Total Liabilities
Minority Interests
Total Equity
Dec-13A
5,565
1,916
8,995
1,482
17,957
3,798
0
86
8,214
12,098
517
Dec-14A
5,736
2,510
10,681
2,261
21,188
2,673
0
102
7,593
10,367
1,796
Dec-15F
1,034
5,749
9,930
1,002
17,715
3,039
0
102
7,927
11,068
1,796
Dec-16F
1,559
5,425
10,308
1,002
18,295
3,386
0
102
8,290
11,778
1,796
Dec-17F
3,556
4,073
9,674
1,002
18,305
3,713
0
102
8,675
12,490
1,796
5,409
3,416
9,342
6,583
5,581
3,597
10,974
5,587
4,703
3,363
9,862
5,887
4,883
3,463
10,141
6,087
4,582
3,296
9,674
6,487
442
7,025
0
16,367
9,701
3,988
13,689
266
5,853
0
16,828
10,381
4,347
14,728
266
6,153
0
16,015
11,191
1,576
12,767
266
6,353
0
16,494
11,972
1,606
13,578
266
6,753
0
16,427
12,734
1,635
14,369
Dec-13A
(11.3%)
(16.1%)
19.2%
(0.83)
5.26
17.11
16.5%
48.6%
55.4
295.9
193.2
12.5%
11.0%
7.80%
Dec-14A
7.3%
11.0%
19.9%
(0.91)
5.71
17.71
16.0%
46.2%
60.8
327.1
182.7
15.2%
11.7%
7.88%
Dec-15F
(21.3%)
(45.3%)
13.8%
(3.66)
6.16
4.86
17.1%
55.9%
144.2
408.7
204.0
7.0%
6.7%
3.95%
Dec-16F
3.8%
15.6%
15.4%
(3.48)
6.59
5.72
17.8%
45.0%
188.5
387.7
183.6
6.9%
7.8%
4.84%
Dec-17F
(6.2%)
(2.6%)
16.0%
(2.60)
7.01
5.52
17.6%
45.0%
170.2
406.7
192.7
6.5%
7.1%
4.58%
Dec-13A
-11.3%
-16.1%
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
Dec-14A
7.3%
11.0%
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
Dec-15F
-21.3%
-45.3%
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
Dec-16F
3.8%
15.6%
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
Dec-17F
-6.2%
-2.6%
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
Key Ratios
Revenue Growth
BVPS (S$)
Effective Tax Rate
Inventory Days
ROIC (%)
ROCE (%)
Key Drivers
162
Company Note
Singapore
Keppel REIT
ADD (no change)
Focus on leasing and retention activity
Current price:
Target price:
Previous target:
Up/downside:
S$0.96
S$1.15
S$1.15
20.4%
Reuters:
Bloomberg:
Market cap:
KASA.SI
KREIT SP
US$2,174m
S$3,071m
US$2.16m
S$3.04m
3,170m
55.1%

Current shares o/s
Free float:
No change.
KREIT displayed good underlying performance in 2015, with 9M15 distributable

income rising 2% yoy.
Focus on tenant retention, with portfolio occupancy fairly stable at 98.5% and 16%
positive rental reversion in 9M15.
Almost all FY15 renewals have been completed. Only 36% of leases are due to be
re-contracted/reviewed over the next two years.
Limited refinancing risk, A$ income hedged until 1Q16.

Maintain Add, with DDM-based target price of S$1.15.
Good underlying performance

KREITs 9M15 distributable income rose 2% yoy due to better performance by Ocean
Financial Centre (OFC), Bugis Junction Towers and 8 Chifley Square in Sydney. The
improvements offset the income vacuum resulting from the sale of Prudential Tower in
3Q14 and the absence of income support from Marina Bay Financial Centre 1 (MBFC
1).
Increase in leasing appetite from new and expansion sources

Price Close

104.0
1.200
100.4
1.100
96.8
1.000
93.2
0.900
89.6
0.800
20
15
10
5
86.0
Vol m
1.300
Dec-14
Mar-15
Jun-15
Sep-15
Source: Bloomberg
Price performance
Absolute (%)
Relative (%)
1M
-1.6
2.9
3M
0.5
0.8
12M
-21.1
-8.3
The trust leased 470,000 sq ft of space in 3Q15, keeping portfolio occupancy fairly
stable at 98.5% (vs. 99.3% in 2Q) and achieving 16% positive rental reversion. Of the
new leases secured, around 1/3 were new tenants for KREIT, 1/3 were expansion
leases and the remaining 1/3 were tenants setting up presence in Singapore. These are
largely Asia-based companies in the financial services, commodities and real estate
sectors.
Focus on tenant retention

Looking ahead, the trust intends to focus on tenant retention amid rising incoming supply
in the next 2-3 years. It has renewed/reviewed almost 100% of leases due in FY15 and
only 20.8%/15.9% of renewal/review leases remain to be re-contracted in FY16/FY17.
Current market rents are above expiring levels but stiff competition for tenants means
that the trust could see positive but narrower rental revision spreads. Management said
the bulk of the 100,000 sq ft space returned to date has been re-leased.
Limiting impact of rising interest rates and forex volatility

Although its net gearing of 42.6% at end-Sep is one of the highest among its peers, the
trust has taken steps to limit the negative impact of rising interest rates, with 72% of its
borrowings comprising fixed rate loans and very little refinancing due before 2017. It has
hedged almost 100% of its distribution payment from Australia until 1Q16.
Maintain Add
We believe that much of the dampened office market sentiment is already reflected in
the share price. We maintain Add, with an unchanged DDM-based target price. The
stock offers FY15/FY16 DPU yields of 7.3%
[X]
Financial Summary
Analyst
LOCK Mun Yee
T (65) 6210 8606

Net Profit (S$m)
Core EPS (S$)
Core EPS Growth
FD Core P/E (x)
DPS (S$)
Dividend Yield
Asset Leverage
BVPS (S$)
P/BV (x)
Recurring ROE
Dec-13A
174.0
138.3
534.9
214.0
0.058
25.5%
16.42
0.079
8.25%
39.6%
1.40
0.68
4.28%
Dec-14A
184.1
151.4
371.9
206.1
0.053
(9.4%)
18.91
0.072
7.57%
36.4%
1.41
0.68
3.60%
Dec-15F
179.1
143.0
201.6
218.2
0.057
8.5%
16.73
0.069
7.18%
34.6%
1.39
0.69
4.08%
0.98
Dec-16F
197.1
157.4
200.8
220.8
0.063
9.5%
15.27
0.069
7.20%
34.5%
1.38
0.69
4.51%
1.03
Dec-17F
213.1
170.1
219.1
236.8
0.068
8.2%
14.12
0.073
7.66%
34.5%
1.37
0.70
4.92%
1.11

Powered by
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BY THE NUMBERS
Share price info

Share px perf. (%)
1M
3M
Relative
2.9
0.8
Absolute
-1.6
0.5
Major shareholders
Keppel Land
12M
-8.3
-21.1
% held
44.9
1.200
45.0%
1.000
37.5%
0.800
30.0%
0.600
22.5%
0.400
15.0%
0.200
7.5%
0.000
0.0%
0.0900
0.0800
0.0700
0.0600
0.0500
0.0400
0.0300
0.0200
0.0100
0.0000
DPS (lhs)
9.00%
8.00%
7.00%
6.00%
5.00%
4.00%
3.00%
2.00%
1.00%
0.00%
Profit & Loss

(S$m)
Rental Revenues
Other Revenues
Net Property Income
Management Fees
Trustee's Fees
EBITDA
EBIT
Net Interest Income
Associates' Profit
Exceptional Items
Pre-tax Profit
Taxation
Minority Interests
Preferred Dividends
Net Profit
Dec-13A
174.0
0.0
174.0
(35.7)
138.3
0.0
(42.9)
(6.8)
0.0
88.5
(44.9)
43.7
(18.2)
64.2
72.9
389.1
551.7
(16.8)
0.0
0.0
534.9
214.0
Dec-14A
184.1
0.0
184.1
(32.7)
151.4
0.0
(45.5)
(7.5)
0.0
98.5
(37.4)
61.1
(26.6)
70.6
50.0
228.4
383.5
(11.6)
0.0
0.0
371.9
206.1
Dec-15F
179.1
0.0
179.1
(36.1)
143.0
0.0
(47.0)
(5.7)
0.0
90.3
(30.4)
59.9
(2.2)
103.2
30.4
20.9
212.2
(10.5)
0.0
0.0
201.6
218.2
Dec-16F
197.1
0.0
197.1
(39.7)
157.4
0.0
(47.2)
(5.7)
0.0
104.5
(12.8)
91.7
(4.9)
109.4
12.8
0.0
208.9
(8.1)
0.0
0.0
200.8
220.8
Dec-17F
213.1
0.0
213.1
(42.9)
170.1
0.0
(47.6)
(5.7)
0.0
116.8
(10.3)
106.5
(4.1)
114.6
10.3
0.0
227.4
(8.3)
0.0
0.0
219.1
236.8
Dec-13A
551.7
(1.2)
(50.5)
(16.8)
(355.4)
127.9
0.0
(380.5)
174.4
(206.1)
260.2
170.6
(214.0)
(55.2)
161.5
83.3
(78.3)
126.7
Dec-14A
383.5
(6.7)
(0.9)
(11.6)
(181.2)
183.1
0.0
(850.9)
83.6
(767.3)
(17.5)
413.2
(206.1)
(160.0)
29.5
(554.7)
(584.3)
(661.9)
Dec-15F
212.2
(70.6)
18.6
(10.5)
38.7
188.4
0.0
(21.1)
158.2
137.0
(178.9)
0.0
(218.2)
(79.3)
(476.4)
(151.0)
325.4
91.8
Dec-16F
208.9
(91.7)
10.4
(8.1)
60.4
179.9
0.0
0.0
143.5
143.5
0.0
0.0
(220.8)
(79.5)
(300.3)
23.2
323.4
268.7
Dec-17F
227.4
(100.2)
9.2
(8.3)
61.3
189.4
0.0
0.0
146.4
146.4
0.0
0.0
(236.8)
(76.4)
(313.2)
22.6
335.8
281.1
Cash Flow
(S$m)
Pre-tax Profit
Tax Paid
Others
Capex
Dividends Paid
164
BY THE NUMBERS
Balance Sheet
(S$m)
Total Investments
Intangible Assets
Inventories
Trade Debtors
Trade Creditors
Short-term Debt
Minority Interests
Total Equity
Dec-13A
6,600
47
3
6,650
91
0
34
1
126
94
282
23
399
2,401
76
2,477
3,897
2
Dec-15F
7,087
26
2
7,115
49
0
25
1
74
103
275
21
399
2,212
99
2,311
4,457
2
Dec-16F
7,087
13
2
7,103
72
0
25
1
98
113
275
21
409
2,212
99
2,311
4,457
2
Dec-17F
7,087
0
2
7,089
94
0
25
1
120
123
275
21
419
2,212
99
2,311
4,457
2
4,459
4,459
4,459
4,459
Dec-13A
10.9%
10.9%
79.5%
1.42%
0.79
3.04%
40%
0.32
0.32
0.23
8.28%
Dec-14A
5.8%
9.5%
82.3%
(8.25%)
1.02
3.03%
55%
0.59
0.59
0.52
5.27%
Dec-15F
(2.7%)
(5.6%)
79.9%
(5.21%)
1.10
4.97%
108%
0.19
0.19
0.12
2.78%
Dec-16F
10.0%
10.0%
79.9%
0.31%
1.68
3.87%
110%
0.24
0.24
0.18
2.79%
Dec-17F
8.1%
8.1%
79.8%
6.34%
1.95
3.65%
108%
0.29
0.29
0.23
3.04%
Dec-13A
8.1
N/A
N/A
3,268
98.3%
N/A
N/A
Dec-14A
8.7
N/A
N/A
3,276
99.1%
N/A
N/A
Dec-15F
7.8
N/A
N/A
3,276
99.4%
N/A
N/A
Dec-16F
8.5
N/A
N/A
3,276
99.4%
N/A
N/A
Dec-17F
9.0
N/A
N/A
3,276
99.4%
N/A
N/A
3,899
Dec-14A
7,045
57
2
7,104
200
0
25
1
225
84
275
21
380
2,390
99
2,490
4,457
2
Key Ratios
NPI Growth
DPS Growth
Effective Tax Rate
Current Ratio
Quick Ratio
Cash Ratio
Key Drivers
RevPAR (S$)
Occupancy (%)
165
LogisticsSingaporeEquity researchDecember 9, 2015
Company Note
Singapore
Keppel T&T
ADD (no change)
New capacity to drive earnings in 2016
Current price:
Target price:
Previous target:
Up/downside:
S$1.43
S$1.91
S$1.91
33.3%
Reuters:
Bloomberg:
Market cap:
KTEL.SI
KPTT SP
US$562.8m
S$795.1m
US$0.04m
S$0.05m
554.9m
19.3%

Current shares o/s
Free float:
No change.
KPTT is on track to divest T27 to Keppel DC REIT in early 2016, which will allow it
to recycle capital and speed up its investments in DC assets.
It has ambitious plans to double its data centre AUM in 4-5 years on a combined
platform with the REIT.
Ramp-up in occupancy and opening of new logistics facilities will relieve pressure
from startup costs and drive better earnings growth in 2016.
We maintain our Add rating with a SOP-based target price of S$1.91.
Logistics to see improvement in 2016 with new facilities

Logistics disappointed in 2015, due to: 1) startup costs for its new facilities, 2) lower
associates contributions, 3) slowdown in bulk cargo in China, and 4) increased
competition in ASEAN. We expect 2016 to be better, driven by: 1) ramp-up in occupancy
at Tampines Logistics Hub as tenants move in, 2) the opening of Tianjin Eco-city
distribution centre in end-2015 and LuAn logistics park in early 2016, and 3) execution
of e-commerce logistics contracts in Singapore and Indonesia.
Data centre to remain the key driver; targets doubling of AUM

Price Close
1.90
111.1
1.70
103.3
1.50
95.6
1.30
87.8
1.10
80.0
Source: Bloomberg
Price performance
Absolute (%)
Relative (%)
1M
-1.7
2.8
3M
10.0
10.3
12M
-16.1
-3.3
Data centre contributed 42% of net profit in 9M15, and we expect this figure to rise with:
1) the opening of Almere 2 in 4Q15, 2) phase 1 completion of Keppel Datahub 3 in end2016, 3) growth in management fees from Keppel DC REIT, and 4) higher associates
contributions from the REIT as its portfolio grows. KPTT has an ambitious target of
doubling its data centre AUM in 4-5 years on a combined platform with the REIT.
Asset recycling to spur more data centre investments

KPTT is on track to divest T27 to Keppel DC REIT in early 2016. We estimate that the
carrying value of T27 on KPTTs balance sheet is S$127m-137m (recognised at cost
and subsequently remeasured at fair value). This compares with an appraised value of
S$224m in Dec 2014, which translates into a potential disposal gain of S$61m-68m for
KPTTs 70% stake. We expect most of the funds to be kept for reinvestments into new
data centre projects, to meet KPTTs target of injecting one asset per year into the REIT.
Beneficiary of digital growth

Together with Keppel DC REIT, KPTT is the third largest carrier-neutral data centre
player in Singapore. KPTT continues to see strong demand for data centre space, with
growth to come from the rise of big data, the shift to cloud computing, Singapores Smart
Nation vision and as more companies outsource their data storage requirements.
Singapore is also seen as a data and connectivity hub for Southeast Asia, and currently
accounts for 60% of the regions data centre capacity, according to Broadgroup.
Maintain Add, with better earnings growth in 2016

KPTT trades at 10x forward P/E for 18% earnings growth, which we think is attractive.
We also expect asset recycling to spur more aggressive investments in the data centre
space, which remains its key growth engine. KPTT continues to trade at a discount to
the market value of its stakes in M1 and Keppel DC REIT, which means no value is
ascribed to its core data centre and logistics businesses. We maintain our Add call, with
a SOP-based target price of S$1.91.
Financial Summary
Analyst
Jessalynn CHEN
T (65) 6210 8672
Revenue (S$m)
Net Profit (S$m)
Core EPS (S$)
Core EPS Growth
FD Core P/E (x)
DPS (S$)
Dividend Yield
EV/EBITDA (x)
P/FCFE (x)
Net Gearing
P/BV (x)
ROE
Dec-13A
161.7
52.61
63.2
0.11
13.8%
12.53
0.04
2.4%
15.64
33.87
77.0%
1.68
14.1%
Dec-14A
224.6
66.97
310.5
0.13
13.8%
11.01
0.15
10.5%
7.98
59.05
25.0%
1.12
12.2%
Dec-15F
201.3
41.37
63.2
0.11
(12.3%)
12.55
0.04
2.4%
17.16
NA
51.7%
1.29
9.6%
0%
1.04
Dec-16F
233.0
58.09
74.7
0.13
18.1%
10.63
0.04
2.4%
13.96
NA
65.8%
1.33
12.3%
0%
1.04
Dec-17F
271.2
74.61
84.0
0.15
12.4%
9.45
0.04
2.4%
12.09
NA
77.5%
1.36
14.2%
0%
1.01
Powered by
EFA
BY THE NUMBERS
Share price info

Share px perf. (%)
1M
3M
12M
Relative
2.8
10.3
-3.3
Absolute
Major shareholders
Keppel Corp
-1.7
10.0
P/BV vs ROE
2.50
20.0%
2.00
16.0%
% held
1.50
12.0%
-16.1
79.8
1.00
8.0%
Kapital Asia Pte Ltd
5.3
0.50
4.0%
Anwar Agus
0.8
0.00
0.0%
Growth
18.0
16.0
14.0
12.0
10.0
8.0
6.0
4.0
2.0
0.0
20.0%
16.1%
12.2%
8.3%
4.4%
0.6%
-3.3%
-7.2%
-11.1%
-15.0%
ROE (rhs)
Profit & Loss

(S$m)
Total Net Revenues
Gross Profit
Operating EBITDA
Operating EBIT
Exceptional Items
Pre-tax Profit
Taxation
Profit After Tax
Minority Interests
Preferred Dividends
Net Profit
Dec-13A
168.9
168.9
52.6
(19.3)
33.3
(6.9)
56.7
0.0
83.0
0.0
83.0
(13.4)
Dec-14A
231.6
231.6
67.0
(26.5)
40.4
(11.4)
61.1
0.0
90.1
238.5
328.6
(20.4)
Dec-15F
210.0
210.0
41.4
(15.4)
26.0
(10.2)
72.0
0.0
87.8
0.0
87.8
(17.6)
Dec-16F
241.8
241.8
58.1
(18.4)
39.7
(10.8)
74.8
0.0
103.7
0.0
103.7
(20.7)
Dec-17F
280.3
280.3
74.6
(21.3)
53.3
(10.9)
74.4
0.0
116.9
0.0
116.9
(23.4)
69.7
(6.5)
308.2
(61.6)
70.2
(7.0)
83.0
(8.3)
93.5
(9.5)
63.2
63.2
63.2
63.9
310.5
72.0
72.0
0.0
63.2
63.2
63.2
0.0
74.7
74.7
74.7
0.0
84.0
84.0
84.0
Cash Flow
(S$m)
EBITDA
Tax Paid
Capex
Shares Repurchased
Dividends Paid
Preferred Dividends
Dec-13A
52.6
(6.3)
Dec-14A
67.0
14.2
Dec-15F
41.4
Dec-16F
58.1
Dec-17F
74.6
2.6
(6.2)
(7.5)
(3.0)
4.0
(6.8)
(2.4)
38.2
(130.4)
0.0
(13.2)
(17.7)
(161.2)
146.4
0.1
(234.0)
0.9
(12.0)
(2.5)
(166.5)
(229.7)
0.0
(17.0)
449.8
203.0
(23.1)
0.3
0.0
0.0
(10.2)
(17.6)
16.3
(100.7)
0.0
0.0
0.0
(100.7)
50.0
0.0
0.0
0.0
(10.8)
(20.7)
20.3
(93.2)
0.0
0.0
0.0
(93.2)
50.0
0.0
0.0
0.0
(10.9)
(23.4)
32.9
(94.9)
0.0
0.0
0.0
(94.9)
50.0
0.0
(20.8)
(80.2)
(83.2)
(19.4)
(19.4)
12.4
138.1
15.1
23.4
(115.5)
26.5
(76.5)
(40.0)
13.4
48.4
0.0
(33.2)
(117.6)
(34.4)
(72.7)
0.0
30.6
(42.3)
(22.9)
(60.4)
0.0
30.6
(31.5)
(12.1)
(49.4)
167
BY THE NUMBERS
Balance Sheet
(S$m)
Total Debtors
Inventories
Fixed Assets
Total Investments
Intangible Assets
Short-term Debt
Total Creditors
Total Provisions
Total Liabilities
Minority Interests
Total Equity
Dec-13A
80
97
1
0
178
507
463
0
0
970
38
Dec-14A
281
129
1
0
410
432
543
18
0
993
53
Dec-15F
163
116
2
0
281
517
543
18
0
1,078
53
Dec-16F
121
134
3
0
257
592
543
18
0
1,153
53
Dec-17F
89
155
3
0
247
666
543
18
0
1,226
53
86
1
126
461
106
25
184
426
97
25
175
476
109
25
187
526
123
25
201
576
0
461
16
604
470
74
545
0
426
1
610
707
86
793
0
476
1
652
615
93
708
0
526
1
714
595
101
696
0
576
1
778
585
111
696
Dec-13A
17.6%
28.9%
32.5%
(0.76)
0.85
4.44
16.1%
31%
152.0
N/A
N/A
9.67%
3.62%
7.6%
Dec-14A
38.9%
27.3%
29.8%
(0.36)
1.27
3.41
6.2%
27%
170.8
N/A
N/A
7.81%
3.50%
11.4%
Dec-15F
(10.4%)
(38.2%)
20.6%
(0.66)
1.11
2.22
20.0%
132%
214.8
N/A
N/A
5.78%
2.19%
5.8%
Dec-16F
15.7%
40.4%
24.9%
(0.83)
1.07
3.17
20.0%
26%
189.8
N/A
N/A
7.47%
3.30%
6.8%
Dec-17F
16.4%
28.4%
27.5%
(0.97)
1.05
4.21
20.0%
23%
188.7
N/A
N/A
8.70%
4.24%
7.2%
Dec-13A
20.1%
-9.9%
N/A
Dec-14A
5.5%
25.5%
N/A
Dec-15F
10.6%
-7.0%
N/A
Dec-16F
17.0%
-2.0%
N/A
Dec-17F
5.4%
-2.0%
N/A
Key Ratios
Revenue Growth
BVPS (S$)
Effective Tax Rate
Inventory Days
ROIC (%)
ROCE (%)
Key Drivers
(S$)
Volumes Moved (% Change)
Rates Charged (% Change)
Acquisitions (m)
168
Company Note
Lippo Malls Indonesia Retail

Trust
Singapore
ADD (no change)

Current price:
Target price:
Previous target:
Up/downside:
S$0.31
S$0.40
S$0.40
29.5%
Reuters:
Bloomberg:
Market cap:
LMRT.SI
LMRT SP
US$613.9m
S$867.3m
US$0.48m
S$0.68m
2,702m
76.0%

Current shares o/s
Free float:
No change
Positive rental boost
Acquisitions of three new malls helped boost earnings .

Robust rental reversion of 22.9% while occupancy stands at a high 93.9%.
Long WALE underpins income stability
Healthy gearing of 35%, FY16 refinancing should extend debt maturity profile.
We maintain our Add recommendation with a target price of S$0.40.
New acquisitions an added boost to bottom line

LMRT posted a 32.7% gain for 3Q15 gross revenue to S$44.1m, despite a 5.1%
depreciation of the Indonesian rupiah, thanks to the acquisition of Lippo Mall Kemang,
Lippo Plaza Batu and Palembang ICON as well as positive rental reversions within
existing malls. After taking into account higher interest expense and a slightly higher
effective tax rate of 30%, distribution income expanded 25.9% to S$21.5m (DPU: 0.77
Scts).
Robust organic rental improvement

Price Close

111.0
0.350
107.0
0.330
103.0
0.310
99.0
0.290
40
30
20
10
95.0
Vol m
0.370
Dec-14
Mar-15
Jun-15
Absolute (%)
Relative (%)
1M
-6.1
-1.6
Resilient tenant base underpins long WALE

LMRTs portfolio is relatively stable with top 10 tenants making up c23% of gross rental
income and includes tenants in the non-discretionary trade sectors such as Matahari
Department Store, Hypermart, Carrefour, Gramedia, Solaria and Giant Supermarket.
These underpin the trusts weighted average lease expiry (WALE) of 5.13 years.
Sep-15
Source: Bloomberg
Price performance
LMRT enjoyed a 22.9% positive rental reversion for the 36,026sm renewed in 3Q15,
while portfolio occupancy remained high at 93.9%. With a remaining 4% and 8% of
leases to be renewed in FY15 and FY16, respectively, we anticipate the trust to continue
to enjoy positive rental uplift when re-contracting these leases.
3M
0.0
0.3
12M
-15.1
-2.3
Healthy balance sheet

LMRTs gearing stood at 35% as at Sep 15 while its debt maturity profile is 1.84 years.
An estimated 50% of its outstanding loans, totaling S$350m, is due to be renewed in
FY16, and we expect the trust to maintain its current interest cost due to the still low
interest rate environment.
Maintain Add
At 10.1% FY15 DPU yield and at 0.84x P/BV, we see LMRT as inexpensive vs other
overseas-centric S-REITs. LMRT offers investors a pure-play exposure to the long-term
rising Indonesian consumer story that is underpinned by the rapidly expanding
consumer class and increasing disposable income. We retain our Add call with an
unchanged DDM-based target price of S$0.40.
[X]
Financial Summary
Analyst
LOCK Mun Yee
T (65) 6210 8606

Net Profit (S$m)
Core EPS (S$)
Core EPS Growth
FD Core P/E (x)
DPS (S$)
Dividend Yield
Asset Leverage
BVPS (S$)
P/BV (x)
Recurring ROE
Dec-13A
152.6
143.4
70.44
73.02
0.030
(55.4%)
10.22
0.030
9.6%
34.0%
0.41
0.75
6.29%
Dec-14A
137.0
126.0
59.47
68.01
0.023
(23.9%)
13.44
0.025
8.1%
30.9%
0.42
0.73
5.52%
Dec-15F
171.8
161.7
79.09
86.74
0.029
25.2%
10.73
0.031
10.1%
34.0%
0.42
0.74
6.83%
1.04
Dec-16F
177.5
165.2
81.87
90.08
0.029
2.0%
10.52
0.032
10.4%
33.5%
0.42
0.74
7.01%
1.08
Dec-17F
176.0
165.7
82.24
90.89
0.030
0.3%
10.49
0.033
10.5%
33.5%
0.42
0.74
7.06%
1.09
Powered by
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BY THE NUMBERS
Share price info

Share px perf. (%)
1M
3M
12M
Relative
-1.6
0.3
-2.3
Absolute
-6.1
0.0
-15.1
Major shareholders
Lippo Karawaci Tbk PT
% held
24.0
JinQuan Tong
8.1
APG Asset Management
6.0
1.200
40.0%
0.0350
12.0%
1.000
33.3%
0.0300
10.3%
0.800
26.7%
0.0250
8.6%
0.0200
6.9%
0.0150
5.1%
0.0100
3.4%
0.600
20.0%
0.400
13.3%
0.200
6.7%
0.0050
1.7%
0.000
0.0%
0.0000
0.0%
DPS (lhs)
Profit & Loss

(S$m)
Rental Revenues
Other Revenues
Net Property Income
Management Fees
Trustee's Fees
EBITDA
EBIT
Net Interest Income
Associates' Profit
Exceptional Items
Pre-tax Profit
Taxation
Minority Interests
Preferred Dividends
Net Profit
Dec-13A
152.6
0.0
152.6
(9.2)
143.4
4.4
(10.3)
(0.3)
(1.2)
135.9
0.0
135.9
(30.0)
0.0
(24.9)
0.0
81.1
(10.7)
0.0
0.0
70.4
73.0
Dec-14A
137.0
0.0
137.0
(11.0)
126.0
0.0
(9.4)
(0.3)
(1.2)
115.1
0.0
115.1
(32.6)
0.0
1.2
0.0
83.7
(24.3)
0.0
0.0
59.5
68.0
Dec-15F
171.8
0.0
171.8
(10.2)
161.7
0.0
(10.7)
(0.5)
(1.7)
148.7
0.0
148.7
(36.9)
0.0
(13.0)
0.0
98.9
(19.8)
0.0
0.0
79.1
86.7
Dec-16F
177.5
0.0
177.5
(12.3)
165.2
0.0
(10.8)
(0.5)
(1.7)
152.1
0.0
152.1
(36.8)
0.0
(13.0)
0.0
102.3
(20.5)
0.0
0.0
81.9
90.1
Dec-17F
176.0
0.0
176.0
(10.3)
165.7
0.0
(10.8)
(0.5)
(1.7)
152.6
0.0
152.6
(36.8)
0.0
(13.0)
0.0
102.8
(20.6)
0.0
0.0
82.2
90.9
Dec-13A
81.1
54.0
8.6
(27.9)
(4.3)
111.4
(3.7)
0.0
(0.9)
(4.6)
150.0
97.7
(75.4)
(47.9)
124.5
231.3
106.8
232.0
Dec-14A
83.7
32.6
10.0
(26.7)
6.9
106.5
(9.9)
(362.0)
(0.4)
(372.2)
7.5
83.1
(64.2)
(29.1)
(2.6)
(268.4)
(265.8)
(288.0)
Dec-15F
98.9
36.9
(43.0)
(19.1)
242.5
316.2
0.0
(106.8)
(4.1)
(110.9)
81.8
25.0
(86.7)
(37.5)
(17.4)
187.9
205.3
254.6
Dec-16F
102.3
36.8
32.0
(19.7)
21.0
172.4
0.0
0.0
(3.9)
(3.9)
0.0
0.0
(90.1)
(33.2)
(123.3)
45.1
168.4
135.9
Dec-17F
102.8
36.8
(0.1)
(19.8)
3.8
123.4
0.0
0.0
(4.0)
(4.0)
0.0
0.0
(90.9)
(33.2)
(124.1)
(4.6)
119.5
87.0
Cash Flow
(S$m)
Pre-tax Profit
Tax Paid
Others
Capex
Dividends Paid
170
BY THE NUMBERS
Balance Sheet
(S$m)
Total Investments
Intangible Assets
Inventories
Trade Debtors
Trade Creditors
Short-term Debt
Minority Interests
Total Equity
Dec-13A
1,412
0
3
1,416
371
0
15
12
398
24
147
34
205
470
130
600
1,010
1,010
Dec-14A
1,836
0
5
1,841
104
0
68
0
172
71
199
35
305
424
138
562
1,146
1,146
Dec-15F
1,707
0
8
1,714
292
0
68
0
360
28
200
35
263
505
138
642
1,169
Dec-16F
1,689
0
10
1,699
337
0
68
0
405
60
200
35
295
505
138
642
1,167
Dec-17F
1,689
0
11
1,700
332
0
68
0
400
60
200
35
295
505
138
642
1,164
1,169
1,167
1,164
Key Ratios
NPI Growth
DPS Growth
Effective Tax Rate
Current Ratio
Quick Ratio
Cash Ratio
Dec-13A
1.5%
14.5%
93.9%
1.7%
4.44
13.1%
104%
1.95
1.95
1.81
3.76%
Dec-14A
(10.2%)
(12.1%)
92.0%
(15.4%)
3.34
29.0%
114%
0.56
0.56
0.34
3.11%
Dec-15F
25.4%
28.3%
94.1%
24.2%
3.98
20.0%
110%
1.36
1.36
1.11
3.87%
Dec-16F
3.3%
2.2%
93.1%
3.6%
4.07
20.0%
110%
1.37
1.37
1.14
3.92%
Dec-17F
(0.8%)
0.3%
94.1%
0.7%
4.09
20.0%
111%
1.35
1.35
1.13
3.91%
Dec-13A
1.5
N/A
N/A
N/A
95.1%
N/A
N/A
Dec-14A
1.3
N/A
N/A
N/A
96.6%
N/A
N/A
Dec-15F
1.3
N/A
N/A
N/A
98.3%
N/A
N/A
Dec-16F
1.3
N/A
N/A
N/A
98.8%
N/A
N/A
Dec-17F
1.3
N/A
N/A
N/A
99.1%
N/A
N/A
Key Drivers
RevPAR (S$)
Occupancy (%)
171
Telco - MobileSingaporeEquity researchDecember 9, 2015
Company Note
Singapore
M1 Limited
HOLD (no change)
Most at risk from a fourth mobile operator
Current price:
Target price:
Previous target:
Up/downside:
S$2.79
S$3.10
S$3.10
11.1%
Reuters:
Bloomberg:
Market cap:
MONE.SI
M1 SP
US$1,850m
S$2,614m
US$1.83m
S$2.58m
1,003m
39.2%

Current shares o/s
Free float:
No change.
M1 has the most to lose from a new competitor given its largely Singapore mobile
focus and weaker position to defend its market share from sans quad-play offerings.
FY15-17 dividend yields of 7.1-7.5% should help support current valuations. Special
dividends are unlikely, in our view.
Modest 3-year EBITDA CAGR of +2.8% in FY15-17, and -2.9% in FY18-20.

Maintain Hold with unchanged DCF-based target price of S$3.10. Scenario analysis
suggests target price of S$2.30 in a bear-case and S$3.70 in a bull-case.
Most to lose due to largely Singapore mobile focus

M1 stands to lose the most from new competition given its largely Singapore mobile
focus. Similar to the other two Singapore telco incumbents, we expect M1s mobile
network coverage/quality to be superior to the fourth mobile operator in the first five
years after service launch. However, M1s relatively higher prepaid revenue mix
(including IDD calls) and inability to bundle pay TV services in a quad-play offering may
put it in a weaker position to defend its market share against a fourth mobile operator.
Sensitivity analysis on target price

Price Close

112.1
3.60
102.8
3.10
93.4
2.60
8
6
4
2
84.0
Vol m
4.10
Dec-14
Mar-15
Jun-15
Sep-15
Source: Bloomberg
Price performance
Absolute (%)
Relative (%)
1M
-0.7
3.8
3M
-3.1
-2.8
12M
-21.6
-8.8
We have factored in a negative 15% impact to M1s mobile ARPU between mid-2017 to
2020. The impact could be worse if the new entrant employs more aggressive pricing
strategies, or more limited if the new entrants execution is poor (network, branding). Our
sensitivity analysis suggests that our target price would fall to S$2.30 if its mobile ARPU
is negatively impacted by 30% (bear-case) by FY20. If the negative impact on its mobile
ARPU is only 5% (bull-case), our target price would be S$3.70.
Dividend yield should provide some valuation support

Based on a 100% payout ratio, we forecast M1 to pay 19.9/21.0/20.7 Scts DPS in
FY15/16/17. This translates into decent dividend yields of 7.1-7.5%. Given net
debt/EBITDA of 0.6-0.7x over the next three years and spectrum payments in FY16 and
likely FY17, we do not see room for M1 to gear up its balance sheet to pay special
dividends. M1 will probably also want to conserve some flexibility in its balance sheet to
face any headwinds with the upcoming entry of a fourth mobile player.
Short- and longer-term earnings outlook

We keep our core EPS for FY15-17 unchanged, which has factored in the initial impact
from the fourth mobile network operator (MNO) launching services in mid-2017. M1s
EBITDA is expected to rise at a modest 3-year CAGR of 2.8% in FY15-17, driven by
low-single digit service revenue growth but gradually rising marginally on lower handset
subsidies. In FY18-20, we forecast EBITDA to decline at a 3-year CAGR of 2.9%
factoring in pricing pressure from intensified competition.
Maintain Hold with unchanged DCF-based target price of S$3.10

Our DCF-based target price (WACC: 7.1%) of S$3.10 is intact. Maintain Hold. M1 trades
at FY16 EV/OpFCF of 10.9x, which is at a 20% discount to the average for ASEAN
telcos, while its FY16 EV/EBITDA of 7.9x is in line. Its dividend yield of 7.1-7.5% should
help support current valuations. Key upside risk is the non-entry of a fourth mobile player
into Singapore. Key downside risk is higher-than-expected negative impact on M1s
mobile ARPU from new competition.
[X]
Financial Summary
Analyst
FOONG Choong Chen, CFA
T (60) 3 2261 9081
E choongchen.foong@cimb.com
Revenue (S$m)
Net Profit (S$m)
Core EPS (S$)
Core EPS Growth
FD Core P/E (x)
DPS (S$)
Dividend Yield
EV/EBITDA (x)
P/FCFE (x)
Net Gearing
ROE
Dec-13A
1,008
310.6
30.8%
160.2
0.17
8.32%
15.99
0.21
7.53%
8.88
16.24
49.5%
43.1%
Dec-14A
1,076
333.9
31.0%
176.1
0.19
8.85%
14.69
0.19
6.77%
8.58
17.63
70.8%
44.6%
Dec-15F
1,044
347.3
33.3%
185.1
0.20
4.67%
14.03
0.20
7.13%
8.21
16.51
61.9%
46.0%
(0.000%)
1.02
Dec-16F
1,110
364.9
32.9%
195.6
0.21
5.77%
13.27
0.21
7.53%
7.85
15.38
62.5%
46.9%
(0.001%)
1.05
Dec-17F
1,056
362.2
34.3%
192.2
0.21
(1.76%)
13.50
0.21
7.40%
7.79
12.92
51.3%
44.5%
(0.000%)
1.03

Powered by
EFA
BY THE NUMBERS
Share price info

Share px perf. (%)
Relative
Absolute
1M
3.8
-0.7
3M
-2.8
-3.1
Major shareholders
12M
-8.8
-21.6
% held
Sunshare (Axiata)
29.7
Keppel T&T
19.0
Singapore Press Holdings
13.9
P/BV vs ROE
10.00
9.00
8.00
7.00
6.00
5.00
4.00
3.00
2.00
1.00
0.00
60.0%
54.0%
48.0%
42.0%
36.0%
30.0%
24.0%
18.0%
12.0%
6.0%
0.0%

Growth
25.0
10.0%
20.0
5.0%
15.0
0.0%
10.0
-5.0%
5.0
-10.0%
0.0
-15.0%
ROE (rhs)
Profit & Loss
Initial negative revenue impact from

fourth mobile operators service
launch in 2H17.
(S$m)
Total Net Revenues
Gross Profit
Operating EBITDA
Operating EBIT
Exceptional Items
Pre-tax Profit
Taxation
Profit After Tax
Minority Interests
Preferred Dividends
Net Profit
Dec-13A
1,008
1,008
311
(115)
196
(3)
0
0
193
0
193
(33)
Dec-14A
1,076
1,076
334
(114)
220
(2)
0
0
217
0
217
(41)
Dec-15F
1,044
1,044
347
(120)
227
(4)
0
0
223
0
223
(38)
Dec-16F
1,110
1,110
365
(125)
240
(4)
0
0
236
0
236
(40)
Dec-17F
1,056
1,056
362
(127)
235
(3)
0
0
232
0
232
(39)
160
0
176
0
185
0
196
0
192
0
160
160
160
176
176
176
185
185
185
196
196
196
192
192
192
Cash Flow
100% dividend payout ratio.
(S$m)
EBITDA
Tax Paid
Capex
Shares Repurchased
Dividends Paid
Preferred Dividends
Dec-13A
310.6
Dec-14A
333.9
Dec-15F
347.3
Dec-16F
364.9
Dec-17F
362.2
23.5
(30.8)
0.0
0.0
0.0
2.1
(4.5)
(29.7)
302.1
(125.3)
3.6
0.0
(0.7)
(122.4)
(22.0)
21.5
3.0
(4.0)
(29.0)
273.1
(139.6)
1.3
0.0
(40.1)
(178.4)
52.0
18.8
3.0
(4.9)
(37.9)
307.4
(120.0)
0.0
0.0
(0.1)
(120.1)
(30.0)
15.0
3.0
(4.8)
(40.1)
323.0
(100.0)
0.0
0.0
(64.1)
(164.1)
10.0
15.0
3.0
(4.7)
(39.4)
321.2
(100.0)
0.0
0.0
(0.1)
(100.1)
(20.0)
15.0
(136.3)
(196.9)
(177.8)
(187.0)
(197.5)
0.0
(136.8)
42.9
157.7
184.2
0.0
(126.1)
(31.4)
146.7
98.7
0.0
(192.8)
(5.5)
157.3
192.3
0.0
(162.0)
(3.0)
168.9
163.7
0.0
(202.5)
18.6
201.1
225.8
173
BY THE NUMBERS
Balance Sheet
Net debt/EBITDA at 0.6x-0.7x in

FY15-16.
(S$m)
Total Debtors
Inventories
Fixed Assets
Total Investments
Intangible Assets
Short-term Debt
Total Creditors
Total Provisions
Total Liabilities
Minority Interests
Total Equity
Dec-13A
54.5
165.3
29.1
0.2
249.1
649.4
0.0
13.9
74.0
737.3
0.0
Dec-14A
22.8
172.3
30.3
0.5
225.9
685.9
0.0
13.9
102.2
802.0
52.0
Dec-15F
18.5
158.3
25.4
0.5
202.7
698.6
0.0
13.9
102.2
814.7
52.0
Dec-16F
16.4
190.3
34.2
0.5
241.5
687.7
0.0
13.9
166.2
867.8
52.0
Dec-17F
36.5
143.7
21.3
0.5
202.0
678.4
0.0
13.9
166.2
858.5
52.0
181.0
53.8
234.8
250.0
157.3
65.2
274.5
250.0
159.9
65.2
277.1
220.0
179.3
65.2
296.5
230.0
136.8
65.2
254.0
210.0
106.6
356.6
0.0
591.4
395.0
0.0
395.0
108.7
358.7
0.0
633.2
394.6
0.0
394.6
110.7
330.7
0.0
607.8
409.6
0.0
409.6
158.1
388.1
0.0
684.6
424.6
0.0
424.6
156.9
366.9
0.0
620.9
439.6
0.0
439.6
Dec-13A
(6.38%)
4.76%
30.8%
(0.21)
0.43
43.44
16.9%
121%
58.79
N/A
N/A
22.5%
31.2%
16.6%
Dec-14A
6.80%
7.50%
31.0%
(0.30)
0.42
54.88
19.0%
100%
49.91
N/A
N/A
25.8%
33.0%
17.7%
Dec-15F
(3.05%)
4.01%
33.3%
(0.27)
0.44
45.84
17.0%
100%
49.91
N/A
N/A
23.8%
33.1%
18.4%
Dec-16F
6.32%
5.07%
32.9%
(0.29)
0.46
50.15
17.0%
100%
50.05
N/A
N/A
25.4%
34.6%
18.7%
Dec-17F
(4.81%)
(0.73%)
34.3%
(0.24)
0.47
50.06
17.0%
100%
49.91
N/A
N/A
22.7%
33.5%
18.0%
Dec-13A
2.11
N/A
0.09
N/A
55.6
N/A
46
N/A
Dec-14A
1.85
N/A
0.10
N/A
56.0
N/A
44
N/A
Dec-15F
1.90
N/A
0.12
N/A
56.4
N/A
45
N/A
Dec-16F
1.95
N/A
0.13
N/A
55.3
N/A
45
N/A
Dec-17F
1.98
N/A
0.15
N/A
52.7
N/A
45
N/A
Key Ratios
Rising operating EBITDA margin as

M1 and its industry peers gradually
reduce handset subsidies.
Revenue Growth
BVPS (S$)
Effective Tax Rate
Inventory Days
ROIC (%)
ROCE (%)
Key Drivers
We expect mobile ARPU to be
adversely affected by 15% between
mid-2017 to 2020.
Group Mobile Subscribers (m)

Group Fixed Voice Subscribers (m)
Grp fixed brdband subscribers (m)
Group Pay TV Subs (m)
Group Mobile ARPU (US$/mth)
Grp fixed voice ARPU (US$/mth)
Grp fixed brdband ARPU (US$/mth)
Group Pay TV ARPU (US$/mth)
174
Company Note
Singapore
Mapletree Commercial Trust
HOLD (no change)
Stable earnings outlook
Current price:
Target price:
Previous target:
Up/downside:
S$1.32
S$1.44
S$1.44
9.7%
Reuters:
Bloomberg:
Market cap:
MACT.SI
MCT SP
US$1,974m
S$2,789m
US$2.27m
S$3.19m
2,112m
62.8%

Current shares o/s
Free float:
No change.
1HFY03/16 earnings performance lifted by Vivocity and higher rents from MLHF.
Recovery in shopper traffic and tenant sales growth in Vivocity in 2Q.
Portfolio occupancy rose in 2Q and could pick up in 2H due to higher committed

take-up.
Outlook remains stable, with 25.9% of leases due to be renewed in 2HFY16-FY17.
With the stable outlook, we maintain Hold with unchanged DDM-based target price.
NPI improvement from Vivocity and higher rents from MLHF

NPI for 1HFY16 improved 5.1% yoy. The improvement came from increased revenue
from Vivocity and higher rents from Merrill Lynch Harbour Front (MLHF) post-rent review
in Dec 2014. Better cost control across its portfolio, largely due to savings from utilities
consumption and tariff rates, also boosted NPI margin from 74.5% in 2QFY15 to 77% in
2QFY16. These more than offset the higher interest expenses from slightly-higher
borrowing costs after the refinancing of longer-tenor debt.
Portfolio occupancy to improve with higher committed take-up
Price Close

113.0
1.600
109.4
1.500
105.8
1.400
102.2
1.300
98.6
1.200
10
95.0
Vol m
1.700
Dec-14
Mar-15
Jun-15
Sep-15
Source: Bloomberg
Price performance
Absolute (%)
Relative (%)
1M
-2.6
1.9
3M
3.1
3.4
12M
-8.7
4.1
Portfolio occupancy inched up to 96.6% in Sep, with greater occupancy at Vivocity and
Mapletree Anson. We expect occupancy to improve moving forward, with higher
committed occupancy at the properties. Retail rental reversion was healthy at +13.2%
over preceding levels in 1HFY16, while office renewals were 10.6% higher than previous
rates.
Higher shopper traffic and tenant sales at Vivocity

Vivocity remained the largest revenue contributor, accounting for 66% of MCTs topline.
Vivocitys rental revenue rose 4% yoy in 1HFY16 on the back of a 13.2% positive rental
reversion over preceding levels, positive impact from the completed AEI at Basement 1,
higher tenant sales (+5.5% yoy) and better shopper footfall (+3.1% yoy). More events
and additional holidays caused an increase in shopper visits to this property, reversing
the decline experienced in 1Q.
Earnings outlook remains stable

Looking ahead, the trust intends to continue to drive DPU growth by improving
operational efficiency and optimising tenant mix. With the 4.5% of retail and 25.1% of
portfolio leases due to be renewed in 2HFY16-FY17, we anticipate earnings to be
relatively stable in FY16-17. Balance sheet remains healthy, with 36.4% net gearing at
end-Sep.
Hold maintained
Although MCTs earnings outlook remains stable, we keep our Hold recommendation
due to the moderation in rental reversions (Vivocitys passing rents track closer to
market levels) and office headwinds. Our DDM-based target price of S$1.44 is
unchanged.
[X]
Financial Summary
Analyst
LOCK Mun Yee
T (65) 6210 8606

Net Profit (S$m)
Core EPS (S$)
Core EPS Growth
FD Core P/E (x)
DPS (S$)
Dividend Yield
Asset Leverage
BVPS (S$)
P/BV (x)
Recurring ROE
Mar-14A
267.2
195.3
343.3
153.0
0.068
17.5%
19.32
0.074
5.61%
38.6%
1.16
1.13
6.11%
Mar-15A
282.5
211.7
312.1
168.3
0.074
9.2%
17.70
0.080
6.08%
36.3%
1.24
1.06
6.18%
Mar-16F
289.9
219.9
161.0
170.7
0.076
2.4%
17.28
0.080
6.12%
36.3%
1.23
1.07
6.15%
0.99
Mar-17F
295.2
223.9
164.1
173.8
0.077
1.5%
17.03
0.082
6.21%
36.2%
1.23
1.07
6.27%
0.98
Mar-18F
300.2
227.7
167.0
176.8
0.078
1.3%
16.80
0.083
6.29%
36.2%
1.22
1.07
6.38%
0.97

Powered by
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BY THE NUMBERS
Share price info

Share px perf. (%)
1M
3M
Relative
1.9
3.4
Absolute
-2.6
3.1
Major shareholders
Temasek Holdings
12M
4.1
-8.7
% held
37.2
AIG
6.0
Schroders
6.0
1.600
1.400
1.200
1.000
0.800
0.600
0.400
0.200
0.000
42.00%
40.88%
39.75%
38.63%
37.50%
36.38%
35.25%
34.13%
33.00%
0.0900
0.0800
0.0700
0.0600
0.0500
0.0400
0.0300
0.0200
0.0100
0.0000
DPS (lhs)
7.00%
6.22%
5.44%
4.67%
3.89%
3.11%
2.33%
1.56%
0.78%
0.00%
Profit & Loss

(S$m)
Rental Revenues
Other Revenues
Net Property Income
Management Fees
Trustee's Fees
EBITDA
EBIT
Net Interest Income
Associates' Profit
Exceptional Items
Pre-tax Profit
Taxation
Minority Interests
Preferred Dividends
Net Profit
Mar-14A
267.2
0.0
267.2
(71.9)
195.3
0.0
(17.6)
(0.5)
(1.2)
175.9
0.0
175.9
(34.7)
0.0
0.0
202.1
343.3
0.0
0.0
0.0
343.3
153.0
Mar-15A
282.5
0.0
282.5
(70.8)
211.7
0.0
(18.7)
(0.6)
(0.8)
191.6
0.0
191.6
(35.8)
0.0
0.0
156.3
312.1
0.0
0.0
0.0
312.1
168.3
Mar-16F
289.9
0.0
289.9
(70.0)
219.9
0.0
(19.3)
(0.6)
(1.3)
198.8
0.0
198.8
(37.8)
0.0
0.0
0.0
161.0
0.0
0.0
0.0
161.0
170.7
Mar-17F
295.2
0.0
295.2
(71.3)
223.9
0.0
(19.5)
(0.6)
(1.3)
202.6
0.0
202.6
(38.5)
0.0
0.0
0.0
164.1
0.0
0.0
0.0
164.1
173.8
Mar-18F
300.2
0.0
300.2
(72.5)
227.7
0.0
(19.6)
(0.6)
(1.3)
206.3
0.0
206.3
(39.3)
0.0
0.0
0.0
167.0
0.0
0.0
0.0
167.0
176.8
Mar-14A
343.3
34.7
3.4
0.7
(193.2)
188.8
(3.9)
0.0
0.2
(3.7)
0.0
(3.5)
(126.4)
(32.0)
(161.8)
23.3
185.3
153.3
Mar-15A
312.1
35.8
3.1
0.0
(147.4)
203.5
(7.8)
0.0
0.0
(7.8)
(40.0)
(2.0)
(136.4)
(32.9)
(211.2)
(15.6)
195.8
122.9
Mar-16F
161.0
37.8
2.5
0.0
9.6
211.0
0.0
0.0
0.1
0.1
0.0
0.0
(170.7)
(37.9)
(208.6)
2.5
211.2
173.3
Mar-17F
164.1
38.5
1.7
0.0
9.7
214.1
0.0
0.0
0.1
0.1
0.0
0.0
(173.8)
(38.7)
(212.5)
1.7
214.3
175.7
Mar-18F
167.0
39.3
1.6
0.0
9.8
217.7
0.0
0.0
0.1
0.1
0.0
0.0
(176.8)
(39.4)
(216.2)
1.6
218.0
178.5
Cash Flow
(S$m)
Pre-tax Profit
Tax Paid
Others
Capex
Dividends Paid
176
BY THE NUMBERS
Balance Sheet
(S$m)
Total Investments
Intangible Assets
Inventories
Trade Debtors
Trade Creditors
Short-term Debt
Minority Interests
Total Equity
Mar-14A
4,034
0
1
4,035
70
0
4
1
75
54
339
8
400
1,249
35
1,284
2,426
0
Mar-16F
4,199
0
5
4,204
57
0
3
1
61
58
0
5
63
1,547
39
1,585
2,617
0
Mar-17F
4,199
0
5
4,204
59
0
3
1
63
59
0
5
64
1,547
39
1,586
2,617
0
Mar-18F
4,199
0
5
4,204
61
0
3
1
65
60
0
5
65
1,547
40
1,586
2,617
0
2,617
2,617
2,617
2,617
Mar-14A
21.7%
25.2%
73.1%
13.6%
5.04
0%
45%
0.19
0.19
0.18
8.59%
Mar-15A
5.7%
8.4%
74.9%
8.5%
5.33
0%
54%
0.23
0.23
0.21
7.45%
Mar-16F
2.6%
3.9%
75.9%
0.6%
5.25
0%
106%
0.97
0.97
0.91
3.78%
Mar-17F
1.8%
1.8%
75.9%
1.4%
5.24
0%
106%
0.98
0.98
0.92
3.85%
Mar-18F
1.7%
1.7%
75.8%
1.3%
5.23
0%
106%
0.99
0.99
0.93
3.91%
Mar-14A
7.3
N/A
N/A
2,106
99.0%
N/A
N/A
Mar-15A
7.6
N/A
N/A
2,106
98.1%
N/A
N/A
Mar-16F
7.7
N/A
N/A
2,106
98.3%
N/A
N/A
Mar-17F
7.8
N/A
N/A
2,106
98.3%
N/A
N/A
Mar-18F
7.9
N/A
N/A
2,106
98.3%
N/A
N/A
2,426
Mar-15A
4,199
0
5
4,204
55
0
3
1
59
62
189
5
255
1,358
32
1,390
2,617
0
Key Ratios
NPI Growth
DPS Growth
Effective Tax Rate
Current Ratio
Quick Ratio
Cash Ratio
Key Drivers
RevPAR (S$)
Occupancy (%)
177
Company Note
Mapletree Greater China

Commercial Trust
Singapore
ADD (no change)

Current price:
Target price:
Previous target:
Up/downside:
S$0.93
S$1.20
S$1.20
30.1%
Reuters:
Bloomberg:
Market cap:
MAPE.SI
MAGIC SP
US$1,800m
S$2,542m
US$2.28m
S$3.21m
3,260m
28.0%

Current shares o/s
Free float:
No change.
Resilient portfolio
1HFY16 performance underpinned by improvement across all assets and positive

currency effect.
Outlook for Festival Walk remains robust with 20% upward rental reversion; tenant
remixing to widen shopper appeal.
Steady growth from China properties with bulk of FY16 leases due re-contracted.
Positive rental reversions and potential new acquisitions to drive outlook.
Maintain Add with unchanged DDM-based target price of S$1.20.
Boosted by better asset performance and positive currency effect

Underpinned by improvement across all assets and new contribution from Sandhill Plaza
(SP) and a stronger HK$ and Rmb, MAGIC booked 22% growth in NP. To date, 81% of
leases expiring in FY16 have been re-contracted. Portfolio occupancy remained robust
at 98.4%. Higher interest charges ate into distributable income as the acquisition of SP
was fully funded by debt. As at end-Sep 15, gearing rose to 41%.
Strong showing from Festival Walk

Price Close
1.100
112.1
1.000
106.4
0.900
100.7
0.800
40
30
20
10
95.0
Bulk of China lease renewals in FY16 locked in
Vol m
Dec-14
For 1HFY16, Festival Walks (FW) NPI climbed 18% yoy due to a strong 20% rental
uplift on retail lease renewals. This was despite a marginal yoy drop in tenant sales
while shopper traffic grew positively. The robust demand for space at FW bodes well for
renewal of the remaining 6.2% and 18.9% of lease income expiring in 2HFY16 and
FY17 respectively. Ongoing tenant remixing, such as introducing more family-focused
offerings to appeal to a wider shopper pool, is expected to continue to draw traffic.
Mar-15
Jun-15
Sep-15
Source: Bloomberg
Price performance
Absolute (%)
Relative (%)
1M
-4.2
0.3
3M
-2.1
-1.8
12M
-2.1
10.7
In China, Gateway Plaza (GW) achieved 25% upside on re-leasing activities in 2Q while
occupancy remained at 96.3%. While the spread between passing and market rents has
narrowed, we expect this property to remain stable as there is only a minimal 0.8% and
5.9% of rental income due to be re-contracted in 2HFY16 and FY17 respectively. In SP,
we expect the renewal of the 4.3% of rental income in FY17 to be positive given the 1520% gap in current and passing rents.
Organic and inorganic growth to drive outlook

Looking ahead, positive rental reversions, particularly at FW and SP, are expected to
continue to drive bottomline growth. The trust will also continue to look for inorganic
growth via acquisitions, especially in China. Based on a gearing of 45%, it has a debt
headroom of c.S$430m.
Maintain Add
We continue to like MAGIC for its resilient portfolio. Its earnings stream is visible, with
81% of FY16 distributable income hedged and 86% of debt cost fixed for FY16. We
reiterate our Add call, with unchanged DDM-based target price of S$1.20.
[X]
Financial Summary
Analyst
LOCK Mun Yee
T (65) 6210 8606

Net Profit (S$m)
Core EPS (S$)
Core EPS Growth
FD Core P/E (x)
DPS (S$)
Dividend Yield
Asset Leverage
BVPS (S$)
P/BV (x)
Recurring ROE
Mar-14A
267.6
216.2
117.3
170.3
0.044
112%
21.11
0.063
6.86%
38.0%
1.06
0.87
4.44%
Mar-15A
281.1
229.3
123.0
178.0
0.046
4%
20.32
0.065
7.07%
36.2%
1.20
0.77
4.03%
Mar-16F
325.6
259.1
171.5
203.7
0.053
17%
17.37
0.074
7.99%
38.0%
1.35
0.69
4.18%
1.03
Mar-17F
348.6
277.2
148.7
214.6
0.054
1%
17.24
0.077
8.32%
37.0%
1.40
0.66
3.90%
1.04
Mar-18F
363.6
288.9
152.4
218.5
0.054
1%
17.00
0.078
8.39%
36.0%
1.47
0.63
3.79%
1.05

Powered by
EFA
BY THE NUMBERS
Share price info

Share px perf. (%)
1M
3M
Relative
0.3
-1.8
Absolute
-4.2
-2.1
Major shareholders
Mapletree Investments
Norges Bank
Schroders
12M
10.7
1.400
44.0%
1.200
42.3%
-2.1
1.000
40.6%
% held
0.800
38.9%
39.3
0.600
37.1%
0.400
35.4%
0.200
33.7%
0.000
32.0%
10.4
6.0
0.090
0.080
0.070
0.060
0.050
0.040
0.030
0.020
0.010
0.000
DPS (lhs)
9.0%
8.0%
7.0%
6.0%
5.0%
4.0%
3.0%
2.0%
1.0%
0.0%
Profit & Loss

(S$m)
Rental Revenues
Other Revenues
Net Property Income
Management Fees
Trustee's Fees
EBITDA
EBIT
Net Interest Income
Associates' Profit
Exceptional Items
Pre-tax Profit
Taxation
Minority Interests
Preferred Dividends
Net Profit
Mar-14A
267.6
0.0
267.6
(51.4)
216.2
(2.2)
(21.6)
(0.6)
0.0
191.8
0.0
191.8
(42.0)
0.0
(2.0)
0.0
147.8
(30.5)
117.3
170.3
Mar-15A
281.1
0.0
281.1
(51.8)
229.3
(2.5)
(22.0)
(0.5)
0.0
204.2
0.0
204.2
(40.4)
0.0
(7.0)
0.0
156.8
(33.8)
123.0
178.0
Mar-16F
325.6
0.0
325.6
(66.5)
259.1
(3.4)
(27.1)
(0.6)
0.0
228.1
0.0
228.1
(50.4)
0.0
0.0
31.2
209.0
(37.4)
171.5
203.7
Mar-17F
348.6
0.0
348.6
(71.4)
277.2
(3.6)
(26.3)
(0.6)
0.0
246.6
0.0
246.6
(57.9)
0.0
0.0
0.0
188.8
(40.0)
148.7
214.6
Mar-18F
363.6
0.0
363.6
(74.7)
288.9
(3.8)
(26.0)
(0.6)
0.0
258.5
0.0
258.5
(64.1)
0.0
0.0
0.0
194.4
(41.9)
152.4
218.5
Cash Flow
(S$m)
Pre-tax Profit
Tax Paid
Others
Capex
Dividends Paid
Mar-14A
148
42
(59)
(30)
72
172
(2,034)
0
0
(2,034)
(297)
2,403
(85)
(33)
1,988
126
(1,862)
(2,201)
Mar-15A
157
40
19
(27)
33
222
(5)
0
(0)
(5)
(26)
0
(169)
(34)
(229)
(12)
217
150
Mar-16F
209
50
10
(37)
(50)
182
(415)
0
0
(415)
450
39
(204)
0
285
51
(233)
166
Mar-17F
189
58
5
(40)
(58)
154
0
0
0
0
20
31
(215)
0
(164)
(10)
155
116
Mar-18F
194
64
3
(42)
(64)
156
0
0
0
0
20
31
(219)
0
(167)
(11)
157
112
179
BY THE NUMBERS
Balance Sheet
(S$m)
Total Investments
Intangible Assets
Inventories
Trade Debtors
Trade Creditors
Short-term Debt
Minority Interests
Total Equity
Mar-14A
4,730
0
0
4,730
133
1
8
1
143
64
0
38
102
1,853
79
1,932
2,840
0
Mar-16F
6,214
0
0
6,214
177
1
13
1
192
88
274
48
410
2,160
122
2,283
3,713
0
Mar-17F
6,446
0
0
6,446
168
1
14
1
184
95
274
50
419
2,180
122
2,303
3,908
0
Mar-18F
6,708
0
0
6,708
158
1
14
1
174
99
274
52
425
2,200
122
2,323
4,134
0
3,260
3,713
3,908
4,134
Mar-14A
137%
141%
80.8%
139%
4.52
20.6%
145%
1.41
1.40
1.31
2.51%
Mar-15A
5%
6%
81.6%
3%
5.00
21.6%
145%
0.35
0.35
0.32
2.37%
Mar-16F
16%
13%
79.6%
13%
4.49
17.9%
119%
0.47
0.47
0.43
2.88%
Mar-17F
7%
7%
79.5%
4%
4.21
21.2%
144%
0.44
0.44
0.40
2.28%
Mar-18F
4%
4%
79.5%
1%
3.99
21.6%
143%
0.41
0.41
0.37
2.26%
Mar-14A
11.5
N/A
N/A
1,939,610
98.5%
4,722.1
N/A
Mar-15A
12.1
N/A
N/A
1,939,610
98.8%
5,349.3
N/A
Mar-16F
14.0
N/A
N/A
1,939,610
98.8%
6,213.2
N/A
Mar-17F
15.0
N/A
N/A
1,939,610
98.8%
6,444.7
N/A
Mar-18F
15.6
N/A
N/A
1,939,610
98.8%
6,706.6
N/A
2,840
Mar-15A
5,350
0
0
5,350
125
1
11
1
138
76
274
45
395
1,710
122
1,833
3,260
0
Key Ratios
NPI Growth
DPS Growth
Effective Tax Rate
Current Ratio
Quick Ratio
Cash Ratio
Key Drivers
RevPAR (S$)
Occupancy (%)
180
Company Note
Singapore
Mapletree Industrial Trust
HOLD (no change)
Cost pressures & limited rental reversions to

weigh in the near term
Current price:
Target price:
Previous target:
Up/downside:
S$1.52
S$1.66
S$1.66
9.2%
Reuters:
Bloomberg:
Market cap:
MAPI.SI
MINT SP
US$1,921m
S$2,713m
US$2.64m
S$3.72m
1,747m
69.7%

Current shares o/s
Free float:
No changes
Gap between passing and new rent narrows, indicating limited scope for positive
rental reversions in the near term.
Rising cost pressure to dampen NPI margin.

Stable operations but factory market is subdued.
New Kallang Basin AEI to provide medium-term booster
MINT is trading at a P/BV of 1.14x, on the higher end of its peers trading range. We
maintain our Hold recommendation.
Narrowing gap between passing and new rents

Though all sub-segments (with the exception of business parks), recorded qoq
improvement during its 2QFY16 results, we note that the gap between renewal and
passing rents for flatted factories (45% of MINTs AUM) and hi-tech buildings (24% of
AUM) narrowed significantly. Hence, we deem that there is limited scope for positive
rental reversions in the coming quarters. Additionally, NPI for business parks was
dragged by lower renewal rents, despite an increase in occupancy to 89% in 2QFY16.
Rising cost pressure to dampen NPI margin

Price Close

120.0
1.600
113.8
1.500
107.5
1.400
101.3
1.300
40
30
20
10
95.0
Vol m
1.700
Dec-14
Mar-15
Jun-15
Sep-15
Source: Bloomberg
Price performance
Absolute (%)
Relative (%)
1M
-0.3
4.2
3M
-1.0
-0.7
12M
2.0
14.8
Thanks to stringent cost management, the NPI margin in 2QFY16 came in at 73.7% vs.
72.1% in 2QFY15. However, going into 2HFY16, we anticipate continued cost pressure
on property expenses (i.e. maintenance), and we expect NPI margin to be dampened.
Stable operations but factory market is subdued

Though flatted factories provide a stable base of operations, the outlook is subdued, in
our view. Average rents for multi-user factories have dropped by 10% yoy. We believe
that rents could ease further in 4QCY15, on the back of supply. Multi-user factory space
is projected to grow by 5.2% in 2016 (+4.2% in 2015).
New Kallang Basin AEI to provide medium-term boost

MINT plans to develop a new 11-storey hi-tech building at an existing open car park space
and undertake upgrading works on existing buildings in the Kallang Basin Cluster 4 property.
This speculative build S$77m exercise would add c.317,000 sf of GFA. On completion in
4QCY17, MINT targets to generate an 8% yield on cost for this project. This cluster is located
within Kallang iPark, an upcoming industrial hub for high value-add and knowledge-based
businesses. MINT has debt headroom to undertake this exercise, with a current gearing of
29.7%.
Maintain Hold
We expect cost pressures and limited rental reversion to weigh in the nearer term, and
only foresee stronger earnings growth from FY17 onwards with the completion of the
Hewlett Packard BTS project. Also, MINT is trading at a P/BV of 1.14x, on the higher
end of its peers trading range. Hence, we maintain our Hold rating, with an unchanged
DDM-based target price of S$1.66.
[X]
Financial Summary
Analyst
LOCK Mun Yee
T (65) 6210 8606

Net Profit (S$m)
Core EPS (S$)
Core EPS Growth
FD Core P/E (x)
DPS (S$)
Dividend Yield
Asset Leverage
BVPS (S$)
P/BV (x)
Recurring ROE
Mar-14A
299.3
214.7
314.3
166.1
0.10
10.8%
15.48
0.10
6.53%
34.4%
1.20
1.27
8.54%
Mar-15A
313.9
228.6
375.4
180.8
0.10
5.5%
14.68
0.10
6.86%
30.5%
1.32
1.15
8.20%
Mar-16F
319.4
232.7
178.4
182.8
0.10
(1.4%)
14.88
0.10
6.88%
33.3%
1.32
1.15
7.72%
0%
0.96
Mar-17F
331.9
241.7
186.5
190.1
0.11
4.5%
14.24
0.11
7.16%
33.9%
1.32
1.15
8.07%
0%
0.99
Mar-18F
397.2
287.5
230.7
234.6
0.13
23.7%
11.51
0.13
8.84%
33.9%
1.32
1.15
9.98%
0%
1.12

Powered by
EFA
BY THE NUMBERS
Share price info

Share px perf. (%)
1M
3M
12M
Relative
4.2
-0.7
14.8
Absolute
-0.3
-1.0
2.0
Major shareholders
Temasek Holdings
% held
30.3
Capital Research
5.8
Capital Group
5.6
1.600
1.400
1.200
1.000
0.800
0.600
0.400
0.200
0.000
40.0%
35.0%
30.0%
25.0%
20.0%
15.0%
10.0%
5.0%
0.0%
0.140
9.00%
0.120
7.71%
0.100
6.43%
0.080
5.14%
0.060
3.86%
0.040
2.57%
0.020
1.29%
0.000
0.00%
DPS (lhs)
Profit & Loss

(S$m)
Rental Revenues
Other Revenues
Net Property Income
Management Fees
Trustee's Fees
EBITDA
EBIT
Net Interest Income
Associates' Profit
Exceptional Items
Pre-tax Profit
Taxation
Minority Interests
Preferred Dividends
Net Profit
Mar-14A
299.3
0.0
299.3
(84.5)
214.7
0.0
(23.2)
(0.5)
(1.8)
189.3
0.0
189.3
(25.6)
0.0
0.0
150.7
314.3
(0.1)
0.0
0.0
314.3
166.1
Mar-15A
313.9
0.0
313.9
(85.3)
228.6
0.0
(24.8)
(0.5)
(1.8)
201.5
0.0
201.5
(23.6)
0.0
0.0
197.4
375.4
0.0
0.0
0.0
375.4
180.8
Mar-16F
319.4
0.0
319.4
(86.7)
232.7
0.0
(24.7)
(0.5)
(1.6)
205.8
0.0
205.8
(27.4)
0.0
0.0
0.0
178.4
0.0
0.0
0.0
178.4
182.8
Mar-17F
331.9
0.0
331.9
(90.3)
241.7
0.0
(25.0)
(0.5)
(1.6)
214.5
0.0
214.5
(28.0)
0.0
0.0
0.0
186.5
0.0
0.0
0.0
186.5
190.1
Mar-18F
397.2
0.0
397.2
(109.7)
287.5
0.0
(26.7)
(0.5)
(1.6)
258.6
0.0
258.6
(28.0)
0.0
0.0
0.0
230.7
0.0
0.0
0.0
230.7
234.6
Mar-14A
314.3
25.6
3.4
(1.1)
(152.2)
190.0
(90.2)
(47.6)
0.0
(137.9)
94.1
0.0
(97.3)
(25.5)
(28.7)
23.4
52.2
120.7
Mar-15A
375.4
23.6
7.1
(1.9)
(199.3)
204.9
(34.2)
(20.3)
0.0
(54.5)
(54.3)
0.0
(97.5)
(22.4)
(174.2)
(23.8)
150.4
73.7
Mar-16F
178.4
27.4
0.0
0.0
0.0
205.8
(125.0)
0.0
0.0
(125.0)
145.0
0.0
(182.8)
(106.2)
(144.0)
(63.2)
80.9
198.4
Mar-17F
186.5
28.0
0.0
0.0
0.0
214.5
0.0
0.0
0.2
0.2
31.3
0.0
(190.1)
(24.5)
(183.4)
31.3
214.7
217.8
Mar-18F
230.7
28.0
0.0
0.0
0.0
258.6
0.0
0.0
0.2
0.2
0.0
0.0
(234.6)
(24.2)
(258.8)
0.0
258.8
230.7
Cash Flow
(S$m)
Pre-tax Profit
Tax Paid
Others
Capex
Dividends Paid
182
BY THE NUMBERS
Balance Sheet
(S$m)
Total Investments
Intangible Assets
Inventories
Trade Debtors
Trade Creditors
Short-term Debt
Minority Interests
Total Equity
Mar-14A
3,094
0
77
3,171
96
0
9
0
105
68
344
1
413
784
50
834
2,029
0
Mar-16F
3,267
0
369
3,636
9
0
16
0
25
70
139
0
209
1,081
59
1,140
2,312
0
Mar-17F
3,267
0
369
3,636
40
0
16
0
56
70
50
0
120
1,201
59
1,260
2,312
0
Mar-18F
3,267
0
369
3,636
40
0
16
0
56
70
125
0
195
1,126
59
1,185
2,312
0
2,312
2,312
2,312
2,312
Mar-14A
8.3%
9.9%
71.8%
7.1%
7.31
0.023%
53%
0.25
0.25
0.23
10.1%
Mar-15A
4.9%
6.5%
72.8%
5.1%
8.47
0.000%
48%
0.45
0.45
0.37
11.0%
Mar-16F
1.7%
1.8%
72.9%
0.3%
7.50
0.000%
102%
0.12
0.12
0.04
5.0%
Mar-17F
3.9%
3.9%
72.8%
4.0%
7.62
0.000%
102%
0.47
0.47
0.33
5.1%
Mar-18F
19.7%
19.0%
72.4%
23.4%
9.19
0.000%
102%
0.29
0.29
0.21
6.2%
Mar-14A
2.2
N/A
N/A
N/A
96.5%
N/A
N/A
Mar-15A
2.2
N/A
N/A
N/A
96.5%
N/A
N/A
Mar-16F
2.2
N/A
N/A
N/A
96.5%
N/A
N/A
Mar-17F
2.2
N/A
N/A
N/A
96.5%
N/A
N/A
Mar-18F
2.2
N/A
N/A
N/A
96.5%
N/A
N/A
2,029
Mar-15A
3,267
0
164
3,431
72
0
16
0
88
70
125
0
196
949
59
1,008
2,312
0
Key Ratios
NPI Growth
DPS Growth
Effective Tax Rate
Current Ratio
Quick Ratio
Cash Ratio
Key Drivers
RevPAR (S$)
Occupancy (%)
183
Company Note
Singapore
Mapletree Logistics Trust
ADD (no change)
Inorganic growth continues
Current price:
Target price:
Previous target:
Up/downside:
S$1.01
S$1.17
S$1.17
16.0%
Reuters:
Bloomberg:
Market cap:
MAPL.SI
MLT SP
US$1,767m
S$2,496m
US$2.56m
S$3.61m
2,474m
59.0%

Current shares o/s
Free float:
No change.
1.200
104.0
1.100
100.0
1.000
96.0
0.900
20
15
10
5
92.0
Vol m
108.0
Mar-15
Jun-15
Absolute (%)
Relative (%)
1M
-1.0
3.5
Inorganic growth to continue, keep our Add rating with an unchanged target price.
Expect lease renewals to remain positive, albeit at a slower pace

MLT renewed 572,000 sq m of space at an average rental reversion of 3% in 2QFY16
(vs. 5% in 1QFY16), while portfolio occupancy crept up to 96.9% as more of the MTB
space was taken up. An estimated 5.4% of leases are due to be renewed in FY16 and a
further 16.3% in FY17. We expect rental reversion quantums to remain positive, albeit at
a slower pace, given the more competitive leasing environment in Singapore and China.
More asset conversion in the works
3M
-0.5
-0.2
YTD, MLT has completed three yield-accretive acquisitions of c.S$295m to scale up its
presence in growth markets. It acquired Dakonet Logistics Centre in South Korea
(S$21m), Mapletree Logistics Park Bac Ninh Phase 1 in Vietnam (S$21m) and Coles
Chilled Distribution Centre in Sydney (S$253m). With 100% occupancy at all three
properties and NPI yields of 8%, 10% and 5.6% respectively, these acquisitions are
expected to boost FY17 DPU by c.4%.
Inorganic growth continues, maintain Add
Sep-15
Source: Bloomberg
Price performance
We expect the higher income from the redevelopment of its older properties to more
than offset the higher expenses from asset conversion.
Strong acquisition track record
1.300
Dec-14
We expect lease renewals to remain positive, albeit at a slower pace.
MLT has two assets to be converted to MTB (multi-tenanted building), another two
properties earmarked for redevelopment/divestment in Singapore in FY16 and nine
single-user leases that are expiring in FY17. However, we expect the higher income
from the redevelopment of its older properties to more than offset the higher expenses
from asset conversions. The first redeveloped property the enlarged 63,500 sq m Toh
Guan Estate is slated for completion in 1QFY17.
Price Close
12M
-13.4
-0.6
In the meantime, MLT continues to expand via inorganic means such as tapping on
third-party assets and its sponsors extensive pipeline. Its gearing stands at 38.8%,
giving it debt headroom of S$460m (based on maximum 45% gearing). We maintain our
Add call on the stock, with an unchanged DDM-based target price of S$1.17.
[X]
Financial Summary
Analyst
LOCK Mun Yee
T (65) 6210 8606

Net Profit (S$m)
Core EPS (S$)
Core EPS Growth
FD Core P/E (x)
DPS (S$)
Dividend Yield
Asset Leverage
BVPS (S$)
P/BV (x)
Recurring ROE
Mar-14A
310.7
267.6
292.7
179.7
0.078
16.7%
12.92
0.074
7.31%
33.1%
0.97
1.03
8.23%
Mar-15A
330.1
277.4
241.0
184.9
0.073
(6.4%)
13.80
0.075
7.46%
34.1%
1.03
0.98
7.29%
Mar-16F
362.3
300.4
175.0
191.2
0.077
5.1%
13.12
0.077
7.69%
39.6%
1.03
0.98
7.47%
0%
1.02
Mar-17F
377.7
313.9
179.6
195.7
0.078
2.4%
12.81
0.079
7.87%
39.8%
1.03
0.98
7.64%
0%
1.03
Mar-18F
381.8
317.2
182.7
198.8
0.080
1.6%
12.61
0.080
8.00%
39.8%
1.03
0.98
7.77%
0%
1.02

Powered by
EFA
BY THE NUMBERS
Share price info

Share px perf. (%)
1M
3M
Relative
3.5
-0.2
Absolute
-1.0
-0.5
Major shareholders
12M
-0.6
-13.4
% held
Temasek Holdings
41.0
Bank of New York
6.4
Columbia Wanger
5.0
1.600
1.400
1.200
1.000
0.800
0.600
0.400
0.200
0.000
45.0%
39.4%
33.8%
28.1%
22.5%
16.9%
11.3%
5.6%
0.0%
0.0900
0.0800
0.0700
0.0600
0.0500
0.0400
0.0300
0.0200
0.0100
0.0000
DPS (lhs)
9.00%
8.00%
7.00%
6.00%
5.00%
4.00%
3.00%
2.00%
1.00%
0.00%
Profit & Loss

(S$m)
Rental Revenues
Other Revenues
Net Property Income
Management Fees
Trustee's Fees
EBITDA
EBIT
Net Interest Income
Associates' Profit
Exceptional Items
Pre-tax Profit
Taxation
Minority Interests
Preferred Dividends
Net Profit
Mar-14A
310.7
0.0
310.7
(43.1)
267.6
0.0
(30.8)
(0.6)
13.2
249.4
0.0
249.4
(28.7)
0.0
0.0
108.5
329.2
(17.0)
(0.6)
(18.8)
292.7
179.7
Mar-15A
330.1
0.0
330.1
(52.7)
277.4
0.0
(32.7)
(0.6)
9.1
253.2
0.0
253.2
(32.3)
0.0
0.0
68.6
289.4
(29.1)
(0.5)
(18.8)
241.0
184.9
Mar-16F
362.3
0.0
362.3
(62.0)
300.4
0.0
(38.9)
(0.8)
0.0
260.7
0.0
260.7
(38.7)
0.0
0.0
(15.4)
206.6
(12.3)
(0.5)
(18.8)
175.0
191.2
Mar-17F
377.7
0.0
377.7
(63.7)
313.9
0.0
(39.0)
(0.8)
0.0
274.1
0.0
274.1
(47.3)
0.0
0.0
(15.4)
211.4
(12.6)
(0.5)
(18.8)
179.6
195.7
Mar-18F
381.8
0.0
381.8
(64.5)
317.2
0.0
(39.0)
(0.8)
0.0
277.4
0.0
277.4
(47.3)
0.0
0.0
(15.4)
214.7
(12.8)
(0.5)
(18.8)
182.7
198.8
Mar-14A
329.2
28.7
(24.9)
(8.8)
(109.5)
214.7
0.0
(100.3)
0.0
(100.3)
73.7
0.0
(176.0)
(27.2)
(129.5)
(15.0)
114.5
161.0
Mar-15A
289.4
32.3
(0.8)
(11.6)
(69.3)
240.0
0.0
(246.5)
0.0
(246.5)
206.8
0.0
(176.0)
(29.9)
0.9
(5.6)
(6.5)
170.3
Mar-16F
206.6
38.7
0.0
(12.3)
16.0
249.0
0.0
(434.1)
0.0
(434.1)
434.7
0.0
(210.0)
(39.3)
185.4
0.3
(185.1)
210.3
Mar-17F
211.4
47.3
0.0
(12.6)
16.0
262.2
0.0
(15.6)
0.0
(15.6)
16.2
0.0
(214.5)
(47.9)
(246.3)
0.3
246.6
214.9
Mar-18F
214.7
47.3
0.0
(12.8)
16.0
265.3
0.0
0.6
0.0
0.6
0.0
0.0
(217.7)
(47.9)
(265.6)
0.3
265.9
218.0
Cash Flow
(S$m)
Pre-tax Profit
Tax Paid
Others
Capex
Dividends Paid
185
BY THE NUMBERS
Balance Sheet
(S$m)
Total Investments
Intangible Assets
Inventories
Trade Debtors
Trade Creditors
Short-term Debt
Minority Interests
Total Equity
Mar-14A
4,235
0
0
4,235
114
0
16
31
162
140
149
11
300
1,307
59
1,365
2,382
6
344
2,732
Mar-15A
4,631
0
0
4,631
107
0
21
29
156
164
57
24
245
1,575
80
1,655
2,538
6
344
2,888
Mar-16F
5,066
0
0
5,066
107
0
21
29
156
164
57
24
245
2,010
80
2,090
2,538
6
344
2,888
Mar-17F
5,082
0
0
5,082
107
0
21
29
156
164
57
24
245
2,026
80
2,106
2,538
6
344
2,888
Mar-18F
5,082
0
0
5,082
107
0
21
29
156
164
57
24
245
2,026
80
2,106
2,538
6
344
2,888
Mar-14A
0.95%
(0.16%)
86.1%
7.14%
8.50
5.2%
61%
0.54
0.54
0.38
6.78%
Mar-15A
6.25%
3.67%
84.0%
2.04%
7.63
10.1%
77%
0.64
0.64
0.44
5.25%
Mar-16F
9.76%
8.26%
82.9%
3.04%
6.64
5.9%
109%
0.64
0.64
0.44
3.50%
Mar-17F
4.24%
4.52%
83.1%
2.37%
5.72
5.9%
109%
0.64
0.64
0.44
3.43%
Mar-18F
1.09%
1.05%
83.1%
1.58%
5.79
5.9%
109%
0.64
0.64
0.44
3.49%
Mar-14A
N/A
N/A
N/A
N/A
98.3%
4,235.1
N/A
Mar-15A
N/A
N/A
N/A
N/A
98.3%
4,631.2
N/A
Mar-16F
N/A
N/A
N/A
N/A
97.0%
5,065.9
N/A
Mar-17F
N/A
N/A
N/A
N/A
97.0%
5,082.1
N/A
Mar-18F
N/A
N/A
N/A
N/A
97.0%
5,082.1
N/A
Key Ratios
NPI Growth
DPS Growth
Effective Tax Rate
Current Ratio
Quick Ratio
Cash Ratio
Key Drivers
RevPAR (S$)
Occupancy (%)
186
Container ShippingSingaporeEquity researchDecember 9, 2015
Company Note
Singapore
Neptune Orient Lines
HOLD (no change)
Take CMA CGMs offer
Current price:
Target price:
Previous target:
Up/downside:
S$1.22
S$1.30
S$1.30
6.6%
Reuters:
Bloomberg:
Market cap:
NEPS.SI
NOL SP
US$2,246m
S$3,174m
US$10.94m
S$15.45m
2,596m
30.0%

Current shares o/s
Free float:
No change.
We advise NOLs minority shareholders to accept CMA CGMs offer of S$1.30/share

as it is almost certain to succeed. Without the offer, NOLs shares will languish.
Container shipping is likely to do poorly in the near future, barring short cyclical
bounces, and NOL is unprepared for the competitive future without 20k teu ships.
We maintain Hold, and upgrade the target price to the offer price of S$1.30. Our
previous target was based on trough P/BV valuation of 0.76x (1 s.d. below average).
If the acquisition gains the approval of the US, EU and Chinese regulators
(expected by mid-2016), the deal should be completed by August 2016.
CMA CGM to purchase NOL

CMA CGM plans to make a voluntary offer for 100% of NOL. With Temasek giving an
irrevocable undertaking to tender its entire 66.8% stake, CMA CGM will easily clear the
acceptance condition of 50% + 1 share. Hence, the acquisition is basically a done deal,
subject to regulatory approvals by the US, EU and China, expected by mid-2016. We
expect the acquisition to clear the regulators and be completed around Aug 2016.
Regulatory authorities should give the go-ahead

Price Close

167
1.100
140
0.900
114
0.700
80
60
40
20
87
Vol m
1.300
Dec-14
Mar-15
Jun-15
Sep-15
Source: Bloomberg
Price performance
Absolute (%)
Relative (%)
1M
16.7
21.2
3M
41.9
42.2
12M
49.7
62.5
We expect the regulatory authorities to give the go-ahead for the CMA CGM acquisition
of NOL, as it will not disturb the competitive position of the alliances too greatly. The
Ocean Threes (O3) capacity share of the transpacific trade will rise from 14.5%
currently to 18.8% with NOL inside, while its share of the Asia-Europe trade will rise from
21% to 24.9% - still below the 30% threshold that would attract EU regulatory concern.
CSCLs potential departure would shrink the O3 again

If CSCL ultimately leaves the O3 alliance to join compatriot COSCON in the CKYHE
alliance, the O3s capacity share of the transpacific and Asia-Europe trades would fall
down to 14.6% and 19.7%, respectively, which is not too dissimilar to the current
capacity share position of the alliance. The long and short of this, is that we do not
believe that the regulators will have anything against CMA CGMs purchase of NOL, and
the deal will almost certainly proceed.
NOL minorities will not get anything better

CMA CGM is the only credible buyer for NOL, and without this deal, we expect NOLs
share price to collapse to a 20-30% discount to below its book value of S$1.35/share,
not just because of the persistent weakness of the container shipping industry, but also
because without 20,000 teu ships, NOL is unprepared for the future. Although we had
expected a minimum offer price at its book value, the S$1.30 offer is close enough. As
such, we believe minorities will most likely accept CMA CGMs offer.
CMA CGM likely to own 100% of NOL

CMA CGM will compulsorily acquire all remaining shares of NOL and delist NOL if it
succeeds in obtaining at least 90% of NOL shares, which will happen if more than 70%
of minorities tender their shares to CMA CGM when it launches the offer in mid-2016
(estimated) on the assumption that it obtains the necessary regulatory approvals by that
time. We think that Temaseks support for the transaction is a powerful encouragement
for minorities to accept the offer.
[X]
Financial Summary
Analyst
Raymond YAP, CFA
T (60) 3 2261 9072
E raymond.yap@cimb.com
Revenue (US$m)
Net Profit (US$m)
Core EPS (US$)
Core EPS Growth
FD Core P/E (x)
DPS (US$)
Dividend Yield
EV/EBITDA (x)
P/FCFE (x)
Net Gearing
P/BV (x)
ROE
Dec-13A
8,831
110.2
(75.6)
(0.12)
(16.0%)
NA
0%
53.50
185.1
182%
1.08
(14.2%)
Dec-14A
8,617
280.2
(259.8)
(0.09)
(19.4%)
NA
0%
21.68
12.6
225%
1.28
(12.8%)
Dec-15F
5,829
310.6
692.6
(0.07)
(21.1%)
NA
0%
15.84
NA
116%
0.92
(9.3%)
(5.03)
Dec-16F
5,496
346.7
(119.9)
(0.05)
(38.4%)
NA
0%
13.76
7.4
115%
0.97
(5.0%)
9.21
Dec-17F
5,662
265.6
(175.9)
(0.07)
46.7%
NA
0%
17.19
8.1
115%
1.05
(7.9%)
(5.63)
Powered by
EFA
BY THE NUMBERS
Share price info

Share px perf. (%)
1M
3M
12M
Relative
21.2
42.2
62.5
Absolute
16.7
41.9
49.7
Major shareholders
Temasek Holdings
% held
67.4
P/BV vs ROE
1.60
1.40
1.20
1.00
0.80
0.60
0.40
0.20
0.00
15.0%
10.6%
6.3%
1.9%
-2.5%
-6.9%
-11.3%
-15.6%
-20.0%


Growth
1,000%
500%
0%
-500%
-1,000%
-1,500%
-2,000%
-2,500%
ROE (rhs)
Profit & Loss

(US$m)
Total Net Revenues
Gross Profit
Operating EBITDA
Operating EBIT
Exceptional Items
Pre-tax Profit
Taxation
Profit After Tax
Minority Interests
Preferred Dividends
Net Profit
Dec-13A
8,831
850
110
(321)
(211)
(41)
8
0
(244)
229
(15)
(56)
Dec-14A
8,617
988
280
(393)
(112)
(106)
12
0
(207)
(14)
(221)
(35)
Dec-15F
5,829
779
311
(410)
(100)
(97)
7
0
(189)
887
698
0
Dec-16F
5,496
784
347
(390)
(43)
(79)
7
0
(115)
0
(115)
0
Dec-17F
5,662
724
266
(367)
(101)
(77)
7
0
(171)
0
(171)
0
(71)
(4)
0
(256)
(4)
0
698
(5)
0
(115)
(5)
0
(171)
(5)
0
(76)
(304)
(304)
(260)
(246)
(246)
693
(194)
(194)
(120)
(120)
(120)
(176)
(176)
(176)
Dec-13A
110
Dec-14A
280
Dec-15F
311
Dec-16F
347
Dec-17F
266
10
(11)
13
Cash Flow
(US$m)
EBITDA
Tax Paid
Capex
Shares Repurchased
Dividends Paid
Preferred Dividends
126
(96)
(51)
(58)
32
(1,305)
393
0
3
(910)
890
0
0
(3)
(19)
(126)
(69)
69
(350)
28
0
5
(317)
425
0
0
(4)
111
(111)
0
321
(105)
1,238
0
0
1,133
(1,676)
0
0
0
91
(91)
0
335
(105)
0
0
0
(105)
74
0
0
0
92
(92)
0
279
0
0
0
0
0
0
0
0
0
75
962
84
12
(827)
72
493
245
177
(122)
(97)
(1,773)
(319)
(222)
1,565
(79)
(6)
225
304
322
(77)
(77)
202
279
371
188
BY THE NUMBERS
Balance Sheet
(US$m)
Total Debtors
Inventories
Fixed Assets
Total Investments
Intangible Assets
Short-term Debt
Total Creditors
Total Provisions
Total Liabilities
Minority Interests
Total Equity
Dec-13A
981
1,073
254
158
2,467
6,098
275
190
0
6,562
599
Dec-14A
1,226
1,080
175
128
2,610
6,012
288
189
0
6,490
615
Dec-15F
707
580
116
128
1,531
5,707
295
189
0
6,192
615
Dec-16F
932
547
108
128
1,715
5,423
302
189
0
5,914
615
Dec-17F
1,134
563
113
128
1,939
5,056
309
189
0
5,554
615
1,252
460
2,312
4,267
1,178
435
2,229
4,676
780
435
1,830
3,000
728
435
1,778
3,074
763
435
1,813
3,074
319
4,586
0
6,898
2,077
54
2,131
387
5,063
0
7,292
1,750
58
1,808
387
3,387
0
5,217
2,443
63
2,505
387
3,460
0
5,238
2,323
68
2,391
387
3,460
0
5,273
2,147
73
2,220
Dec-13A
(7.2%)
174%
1.25%
(1.50)
0.80
(4.15)
0%
NA
44.73
11.93
57.17
(3.29%)
(3.04%)
(2.43%)
Dec-14A
(2.4%)
154%
3.25%
(1.57)
0.67
(0.89)
0%
NA
45.61
10.27
58.14
(1.54%)
(1.32%)
(1.31%)
Dec-15F
(32.4%)
11%
5.33%
(1.12)
0.94
(0.89)
0%
NA
51.98
10.53
70.76
(1.38%)
(1.29%)
(1.30%)
Dec-16F
(5.7%)
12%
6.31%
(1.06)
0.89
(0.47)
0%
NA
37.51
8.71
58.55
(0.65%)
(0.50%)
(0.64%)
Dec-17F
3.0%
(23%)
4.69%
(0.98)
0.82
(1.10)
0%
NA
35.77
8.19
55.08
(1.60%)
(1.43%)
(1.42%)
Dec-13A
2,317.6
1,158.8
-7.6%
2.95
-2.5%
(0.05)
-278.0%
166.0
166
Dec-14A
2,264.6
1,132.3
-2.3%
2.83
-4.0%
(0.08)
64.9%
176.0
176
Dec-15F
1,917.8
958.9
-15.3%
2.43
-13.9%
(0.28)
245.0%
176.0
176
Dec-16F
1,955.9
978.0
2.0%
2.54
4.6%
0.09
-132.7%
176.0
176
Dec-17F
1,932.9
966.4
-1.2%
2.66
4.6%
0.09
0.4%
176.0
176
Key Ratios
Revenue Growth
BVPS (US$)
Effective Tax Rate
Inventory Days
ROIC (%)
ROCE (%)
Key Drivers
Average Revenue (US$/FEU)
Average Revenue (US$/TEU)
Liner rates (yoy chg. %)
Cargo Carried (m FEU)
Cargo carried (FEU, yoy chg. %)
Cargo Carried (m TEU)
Cargo carried (TEU, yoy chg. %)
Fleet Size (no. Of Vessels)
No. Of Container Ships
189
Company Note
Singapore
OCBC
ADD (no change)
Resilience and diversity amid adversity
Current price:
Target price:
Previous target:
Up/downside:
S$8.75
S$10.88
S$10.88
24.3%
Reuters:
Bloomberg:
Market cap:
OCBC.SI
OCBC SP
US$25,487m
S$36,007m
US$36.60m
S$51.56m
3,993m
65.0%

Current shares o/s
Free float:
No change.
Price Close

104.0
10.40
100.7
9.40
97.3
8.40
30
94.0
Vol m
20
10
Mar-15
Jun-15
Sep-15
Source: Bloomberg
Price performance
Absolute (%)
Relative (%)
Maintained best-in-class credit quality even through the GFC; we expect the trend to
continue amid a deterioration in credit cycle.
Most balanced exposure to ASEAN and China, placing it in a good position to

benefit from both the AEC and the One Belt, One Road policy.
Maintain Add, with a GGM-based target price of S$10.88 (1.22x CY16 P/BV).
Remains our sector top pick.
NPLs starting to surface, but not alarming

As the credit cycle begins to deteriorate, we are most comfortable with OCBC, given its
track record of having the best-in-class credit quality even through downturns and its
proactive policies in recognising NPLs. We continue to worry about NPLs in 1) oil & gas,
2) ASEAN, and 3) Singapore property. But in terms of exposure to these sectors, OCBC
is on middle ground, with neither the least nor biggest exposure. We forecast 38bp of
loan loss provision charges for OCBC in FY16 (lower than DBS: 40bp, UOB: 65bp).
Longer-term beneficiary of Chinas One Belt, One Road policy
11.40
Dec-14
1M
-3.5
1.0
3M
-2.7
-2.4
12M
-14.2
-1.4
OCBC has built a stronger foothold in Greater China with the acquisition of Wing Hang
Bank (WHB). Its strategy of financing cross-border investments between Greater China
and ASEAN places it in a prime position to benefit from Chinas One Belt, One Road
(OBOR) policy as Chinese corporates look to finance infrastructure projects in ASEAN.
WHB has also become a funding base for US$ and renminbi, in preparation for greater
onshore-offshore loan demand in China.
A recognised wealth management franchise

OCBC has built a strong reputation in the wealth management (WM) space with its
acquisition of Bank of Singapore. Besides focusing on high net worth individuals,
OCBCs strategy is also to target the mass affluent segment, both in Singapore and by
cross-selling to WHBs SME customer base. In the longer term, we think its ability to link
Greater China and ASEAN will bode well for its WM franchise as demand for WM
services grows with the relaxation of capital controls by the Chinese government.
Best balance of ASEAN and China exposure

Among the Singapore banks, DBS has the biggest exposure to Greater China (DBS:
35% of loans, OCBC: 28%, UOB: 12%), while UOB has the largest exposure to ASEAN
ex-Singapore (DBS: 9%, OCBC: 21%, UOB: 22%). OCBC, being in the centre, has the
best balance of ASEAN and China exposure. We think this will allow it to reap benefits
from both the ASEAN Economic Community (AEC) as cross-border trade, capital, and
investment flow more freely within ASEAN, as well as from OBOR.
Maintain Add
We maintain our Add rating on OCBC, with a GGM-based target price of S$10.88 (1.22x
CY16 P/BV). OCBC remains our top pick in the sector for its resilient credit quality and
best mix of exposure to ASEAN and China which allows it to benefit from both the AEC
and OBOR.
Financial Summary
Analysts
Kenneth NG, CFA
T (65) 6210 8610
Jessalynn CHEN
T (65) 6210 8672

Net Profit (S$m)
Core EPS (S$)
Core EPS Growth
FD Core P/E (x)
DPS (S$)
Dividend Yield
BVPS (S$)
P/BV (x)
ROE
Dec-13A
3,883
2,738
6,621
(266.0)
2,768
0.80
(2.1%)
10.87
0.34
3.89%
7.30
1.20
10.9%
Dec-14A
4,736
3,604
8,340
(357.0)
3,842
0.92
14.3%
9.16
0.36
4.11%
7.79
1.12
12.2%
Dec-15F
5,200
3,387
8,587
(467.8)
3,858
0.94
2.2%
8.99
0.36
4.11%
8.39
1.04
11.6%
0%
1.04
Dec-16F
5,646
3,398
9,044
(844.8)
3,787
0.95
0.9%
9.23
0.40
4.57%
8.94
0.98
10.9%
0%
1.00
Dec-17F
6,011
3,496
9,507
(631.7)
4,205
1.05
11.1%
8.31
0.39
4.46%
9.61
0.91
11.4%
0%
1.06
Powered by
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BY THE NUMBERS
Share price info

Share px perf. (%)
1M
3M
12M
Relative
1.0
-2.4
-1.4
Absolute
-3.5
-2.7
-14.2
Major shareholders
Lee family
% held
25.8
P/BV vs ROE
1.80
1.60
1.40
1.20
1.00
0.80
0.60
0.40
0.20
0.00
12.50%
12.17%
11.83%
11.50%
11.17%
10.83%
10.50%
10.17%
9.83%
9.50%

Growth
14.0
50%
12.0
36%
10.0
21%
8.0
7%
6.0
-7%
4.0
-21%
2.0
-36%
0.0
Jan-11 Jan-12
-50%
Jan-13
ROE (rhs)
Profit & Loss

(S$m)
Net Interest Income
Operating Revenue
Exceptional Items
Pre-tax Profit
Taxation
Profit After Tax
Minority Interests
Pref. & Special Div
FX And Other Adj.
Net Profit
Dec-13A
3,883
2,738
6,621
(2,784)
3,837
(266)
3,571
54
3,625
(58)
3,567
0
3,567
(597)
Dec-14A
4,736
3,604
8,340
(3,258)
5,082
(357)
4,725
112
4,837
(74)
4,763
0
4,763
(687)
Dec-15F
5,200
3,387
8,587
(3,607)
4,981
(468)
4,513
386
4,899
(98)
4,801
0
4,801
(744)
Dec-16F
5,646
3,398
9,044
(3,789)
5,255
(845)
4,410
405
4,815
(98)
4,717
0
4,717
(731)
Dec-17F
6,011
3,496
9,507
(3,965)
5,543
(632)
4,911
426
5,337
(98)
5,239
0
5,239
(812)
2,970
(202)
0
0
2,768
2,768
4,076
(234)
0
0
3,842
3,419
4,057
(199)
0
0
3,858
3,753
3,986
(199)
0
0
3,787
3,787
4,427
(221)
0
0
4,205
4,205
Dec-13A
84.8%
85.8%
74.9%
100.0%
49.6%
77.2%
16.2%
44.4%
0.048%
0.026%
0.111%
Dec-14A
83.6%
84.7%
76.1%
100.0%
51.7%
78.0%
16.2%
46.9%
0.094%
0.053%
0.231%
Dec-15F
82.7%
84.0%
76.0%
100.0%
51.8%
76.8%
17.0%
49.9%
0.142%
0.075%
0.220%
Dec-16F
81.6%
83.3%
78.4%
100.0%
52.0%
76.3%
17.8%
53.2%
0.187%
0.099%
0.399%
Dec-17F
80.7%
82.7%
77.5%
100.0%
52.1%
75.8%
18.6%
56.5%
0.195%
0.104%
0.287%

191
BY THE NUMBERS
Balance Sheet
(S$m)
Total Gross Loans
Intangible Assets
Total Assets
Bank Deposits
Total Liabilities
Minority Interests
Total Equity
Dec-13A
205,677
40,212
Dec-14A
246,508
45,715
Dec-15F
255,166
49,785
Dec-16F
268,877
49,776
Dec-17F
276,983
49,771
245,889
1,750
247,639
3,741
67,727
71,468
19,341
0
338,448
195,974
21,549
33,276
250,799
0
59,570
310,369
25,115
2,964
28,079
292,223
2,247
294,470
5,157
76,285
81,442
25,314
0
401,226
245,519
20,503
36,492
302,514
0
64,527
367,041
31,097
3,088
34,185
304,951
2,715
307,666
7,773
76,864
84,636
24,001
0
416,303
257,795
23,328
34,199
315,322
0
64,152
379,475
33,517
3,287
36,804
318,653
3,560
322,213
7,675
77,219
84,894
24,396
0
431,502
270,685
23,445
34,015
328,144
0
64,152
392,296
35,707
3,486
39,193
326,754
4,191
330,945
7,577
77,595
85,171
31,707
0
447,824
284,219
23,562
33,793
341,574
0
64,152
405,726
38,355
3,708
42,062
Dec-13A
(16.8%)
(27.1%)
(28.1%)
58.6%
1.03%
2.60%
1.57%
1.98%
2.77%
6.9%
1.22%
16.7%
42.3%
0.87%
Dec-14A
26.0%
32.4%
33.5%
56.8%
1.07%
2.70%
1.63%
1.93%
2.80%
7.0%
1.28%
14.4%
37.4%
1.04%
Dec-15F
3.0%
(2.0%)
0.8%
60.6%
1.12%
2.76%
1.64%
2.02%
2.63%
9.4%
1.27%
15.5%
37.3%
0.94%
Dec-16F
5.3%
5.5%
(1.7%)
62.4%
1.13%
2.80%
1.67%
2.09%
2.58%
16.1%
1.33%
15.5%
42.2%
0.89%
Dec-17F
5.1%
5.5%
11.1%
63.2%
1.13%
2.88%
1.75%
2.11%
2.49%
11.4%
1.37%
15.5%
37.0%
0.96%
Dec-13A
18.0%
1.6%
-35.0%
42.0%
0.6%
141.2%
0.9%
14.6%
32.3%
18.7%
85.7%
0.7%
13.8%
Dec-14A
23.6%
1.7%
31.6%
39.1%
0.5%
175.7%
0.9%
13.8%
29.2%
25.3%
84.5%
0.6%
9.5%
Dec-15F
3.8%
1.7%
-6.0%
42.0%
0.6%
142.9%
1.0%
14.8%
28.1%
5.0%
83.7%
0.9%
9.7%
Dec-16F
3.7%
1.7%
0.3%
41.9%
0.5%
158.6%
1.1%
14.0%
25.9%
5.0%
82.9%
1.0%
0.0%
Dec-17F
3.8%
1.8%
2.9%
41.7%
0.5%
163.2%
1.1%
13.8%
24.5%
5.0%
82.1%
1.1%
3.9%
Key Ratios
Total Income Growth
Cost Of Funds
Net Interest Spread
Effective Tax Rate
Key Drivers
Loan Growth (%)
Net NPL Ratio (%)
GP Ratio (%)
Tier 1 Ratio (%)
Total CAR (%)
Deposit Growth (%)
Gross NPL Ratio (%)
192
LifestylesSingaporeEquity researchDecember 9, 2015
Company Note
Singapore
OSIM International
REDUCE (no change)
Going through some tough times
Current price:
Target price:
Previous target:
Up/downside:
S$1.06
S$1.13
S$1.40
7.0%
Reuters:
Bloomberg:
Market cap:
OSIL.SI
OSIM SP
US$556.4m
S$786.1m
US$2.11m
S$2.97m
772.9m
37.1%

Current shares o/s
Free float:
No change
OSIM is going through some tough times at the moment. Sales of its core OSIM
massage equipment has declined yoy in all five key markets.
Part of the problem is currency. OSIM stuck to a same US$ pricing formula for all its
regions. Where the local currency has fallen, local prices have been jacked up.
The real problem is weak income growth and competition. Real income growth in
Asia is weak. In China, cheap copycats have spawned in online retail channels
2015 saw spending on TWG rollout and legal expenses. That should end in 2016.
Our target price is lowered to S$1.13, based on 13x CY17 P/E .
Poor OSIM sales make a weak investment case

OSIM spends on advertising and promotion to create a desire for an aspirational
product (massage chair), sell it at premium pricing at 70% gross margins and outsell any
competitors products on its premium positioning. In good times, slight topline growth
had effects of operational leverage. In lean times like now, sales of discretionary
consumption products stumble and negative operating leverage weigh in.
Slow China, Malaysia and Singapore

Price Close
1.90
101.9
1.40
80.4
0.90
15
59.0
Vol m
10
5
Dec-14
Mar-15
Jun-15
Sep-15
Source: Bloomberg
Price performance
Absolute (%)
Relative (%)
1M
-21.8
-17.3
3M
-28.1
-27.8
12M
-48.0
-35.2
The weak macro retail environment is the real challenge. 3Q group sales was -11% yoy,
Ex-TWG, core OSIM sales probably shrank 13-14% yoy. Management guided that North
Asia sales contracted double-digit (mostly China) while the markets that did even worse
were ASEAN (Singapore and Malaysia). Malaysias retail pricing jumped on the RM
crashed, so the effect of weak sales could last a while longer.
One-off expenses every other quarter, that should end in 2016

Over the last four quarters, there has been additional expenses in the form of legal
expenses (two legal cases) and TWG rollout expenses. We believe that TWG rollout
expenses probably peaked in 2015 while legal expenses will taper off by 2Q16. The
negatives of extra costs will ease off, but the challenge is still making the topline grow.
Pickup in store closure momentum warns of things to come

Management does prune stores when individual stores are persistently unprofitable. We
were previously hopeful when store pruning seems to have stopped in 4Q14-2Q15.
Unfortunately, 3Qs jump in store closures suggests more stores have struggles to
breakeven recently.
No short-term turnaround
Typically, the business model is to launch new products whenever sales of old ones
become tired. The touted blockbuster of the year, uMagic, was already launched in midyear. While it did show initial promise on launch, sales have come crashing down in 3Q.
There are new accessory products (uCrown3, uPamper2, uGallop2) slated for launch
ahead, we see these as necessary actions to fight a weak macro tide.
[X]
Financial Summary
Analyst
Kenneth NG, CFA
T (65) 6210 8610
Revenue (S$m)
Net Profit (S$m)
Core EPS (S$)
Core EPS Growth
FD Core P/E (x)
DPS (S$)
Dividend Yield
EV/EBITDA (x)
P/FCFE (x)
Net Gearing
P/BV (x)
ROE
Dec-13A
647.6
140.4
101.6
0.13
13.5%
8.60
0.060
5.66%
4.16
7.95
(69.2%)
2.83
41.7%
Dec-14A
691.1
151.6
102.2
0.13
(0.3%)
8.21
0.060
5.66%
3.96
16.15
(49.2%)
1.84
28.8%
Dec-15F
599.1
91.1
52.7
0.06
(51.6%)
16.17
0.060
5.66%
6.89
11.67
(53.9%)
1.95
12.0%
0%
0.80
Dec-16F
631.9
107.8
66.2
0.08
22.0%
13.19
0.065
6.13%
5.95
13.70
(54.7%)
1.95
14.8%
0%
0.84
Dec-17F
665.4
117.8
72.9
0.09
10.1%
12.16
0.065
6.13%
5.28
12.35
(56.3%)
1.87
15.7%
0%
0.83

Powered by
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BY THE NUMBERS
Share price info

Share px perf. (%)
1M
3M
12M
Relative
-17.3
-27.8
-35.2
Absolute
-21.8
-28.1
-48.0
Major shareholders
% held
Ron Sim Chye Hock
62.9
P/BV vs ROE
10.0
9.0
8.0
7.0
6.0
5.0
4.0
3.0
2.0
1.0
0.0
60.0%
54.0%
48.0%
42.0%
36.0%
30.0%
24.0%
18.0%
12.0%
6.0%
0.0%

Growth
35.0
100%
30.0
77%
25.0
54%
20.0
31%
15.0
9%
10.0
-14%
5.0
-37%
0.0
-60%
ROE (rhs)
Profit & Loss

(S$m)
Total Net Revenues
Gross Profit
Operating EBITDA
Operating EBIT
Exceptional Items
Pre-tax Profit
Taxation
Profit After Tax
Minority Interests
Preferred Dividends
Net Profit
Dec-13A
647.6
455.1
140.4
(13.7)
126.7
(0.4)
2.9
0.0
129.2
Dec-14A
691.1
486.3
151.6
(21.8)
129.8
1.5
1.0
0.0
132.3
Dec-15F
599.1
421.7
91.1
(23.0)
68.1
1.7
1.6
0.0
71.4
Dec-16F
631.9
444.8
107.8
(23.5)
84.3
2.2
1.7
0.0
88.1
Dec-17F
665.4
468.4
117.8
(23.9)
93.9
2.4
1.7
0.0
98.0
129.2
(27.6)
132.3
(30.1)
71.4
(20.6)
88.1
(23.8)
98.0
(26.9)
101.6
(0.0)
102.2
(0.0)
50.9
1.9
64.3
1.9
71.0
1.9
101.6
97.4
97.4
102.2
102.2
102.2
52.7
52.7
52.7
66.2
66.2
66.2
72.9
72.9
72.9
Cash Flow
(S$m)
EBITDA
Tax Paid
Capex
Shares Repurchased
Dividends Paid
Preferred Dividends
Dec-13A
140.4
7.3
(15.0)
Dec-14A
151.6
0.0
(16.0)
Dec-15F
91.1
0.0
18.9
Dec-16F
107.8
0.0
(5.3)
Dec-17F
117.8
0.0
(5.4)
7.4
(5.8)
(29.2)
105.2
(13.9)
2.7
(3.5)
(26.0)
108.9
(24.1)
2.0
(4.9)
(20.6)
86.6
(13.5)
3.5
(5.0)
(23.8)
77.3
(13.5)
5.1
(5.3)
(26.9)
85.2
(13.5)
(2.1)
11.7
(4.4)
4.5
0.4
(7.8)
(36.2)
1.6
(0.4)
(23.0)
(34.0)
0.0
(12.0)
(45.5)
0.0
0.0
(13.5)
0.0
0.0
0.0
(48.7)
0.0
0.0
(13.5)
0.0
0.0
0.0
(54.3)
0.0
0.0
(13.5)
0.0
0.0
0.0
(54.3)
(2.2)
(41.4)
59.4
105.3
106.6
164.9
73.4
159.4
51.9
89.4
0.0
(48.7)
24.3
73.1
78.0
0.0
(54.3)
9.4
63.8
68.7
0.0
(54.3)
17.4
71.7
77.1
194
BY THE NUMBERS
Balance Sheet
(S$m)
Total Debtors
Inventories
Fixed Assets
Total Investments
Intangible Assets
Short-term Debt
Total Creditors
Total Provisions
Total Liabilities
Minority Interests
Total Equity
Dec-13A
267.3
42.0
72.5
36.0
417.8
25.2
18.5
189.9
28.6
262.1
29.5
Dec-14A
427.6
43.5
71.6
44.2
586.9
36.4
18.4
180.6
30.1
265.6
17.2
Dec-15F
451.9
38.1
58.2
44.2
592.3
36.0
18.4
177.9
30.1
262.4
17.2
Dec-16F
461.3
40.2
61.3
44.2
607.0
34.1
18.4
175.1
30.1
257.7
17.2
Dec-17F
478.7
42.3
64.6
44.2
629.8
30.8
18.4
172.3
30.1
251.6
17.2
101.6
165.7
296.9
0.0
0.0
39.2
39.2
0.0
336.0
271.2
72.7
343.9
96.5
42.9
156.6
0.0
168.3
35.7
204.0
0.0
360.5
438.4
53.6
491.9
96.5
42.9
156.5
0.0
168.3
35.7
204.0
0.0
360.5
442.5
51.7
494.2
96.5
42.9
156.5
0.0
168.3
35.7
204.0
0.0
360.5
454.3
49.8
504.2
96.5
42.9
156.5
0.0
168.3
35.7
204.0
0.0
360.5
472.9
48.0
520.9
Dec-13A
7.6%
10.9%
21.7%
0.33
0.37
21.89
21.3%
35.6%
23.09
119.7
50.5
104%
36.9%
17.7%
Dec-14A
6.7%
8.0%
21.9%
0.32
0.58
37.52
22.8%
44.7%
22.57
128.4
112.3
85%
25.7%
13.2%
Dec-15F
(13.3%)
(39.9%)
15.2%
0.33
0.54
13.85
28.8%
92.4%
24.86
133.6
198.6
21%
11.0%
5.8%
Dec-16F
5.5%
18.2%
17.1%
0.33
0.54
16.97
27.0%
82.1%
22.66
116.9
188.8
29%
13.4%
7.3%
Dec-17F
5.3%
9.3%
17.7%
0.35
0.57
17.65
27.5%
74.5%
22.62
116.7
178.8
32%
14.6%
7.9%
Dec-13A
N/A
7.6%
N/A
N/A
N/A
N/A
861
N/A
N/A
Dec-14A
N/A
6.7%
N/A
N/A
N/A
N/A
875
N/A
N/A
Dec-15F
N/A
-13.3%
N/A
N/A
N/A
N/A
891
N/A
N/A
Dec-16F
N/A
5.5%
N/A
N/A
N/A
N/A
911
N/A
N/A
Dec-17F
N/A
5.3%
N/A
N/A
N/A
N/A
931
N/A
N/A
Key Ratios
Revenue Growth
BVPS (S$)
Effective Tax Rate
Inventory Days
ROIC (%)
ROCE (%)
Key Drivers
Outlets #/POS (main prod./serv.)
Outlets #/POS (2ndary prod./serv.)
A&P As % Of Sales
195
Company Note
Singapore
OUE Commercial REIT
ADD (no change)
A big step forward
Current price:
Target price:
Previous target:
Up/downside:
S$0.69
S$0.81
S$0.81
17.7%
Reuters:
Bloomberg:
Market cap:
OUEC.SI
OUECT SP
US$628.0m
S$887.2m
US$0.13m
S$0.18m
1,292m
44.3%

Current shares o/s
Free float:
Price Close

114.0
0.700
105.7
0.600
97.3
0.500
200
150
100
50
89.0
Vol m
0.800
Mar-15
Jun-15
Sep-15
Source: Bloomberg
Price performance
Absolute (%)
Relative (%)
Higher occupancy and average rents boost performance.
Contributions from ORP to be felt from 4Q15 onwards.
OUE Bayfront and Lippo Plaza enjoyed positive rental reversions of 22.3% and
7.7%, respectively.
Robust balance sheet with no refinancing till 2017.
Maintain Add with unchanged target price of S$0.81.
Strong operational performance

OUECT reported a 5.7% increase in gross revenue to S$20.6m, thanks to higher
portfolio occupancy of 97.1% as well as higher renewal rents achieved on reversion at
OUE Bayfront and Lippo Plaza, which was 22.3% and 7.7% higher than preceding
levels, respectively. Distribution income came in at S$413.1m, translating into a DPU of
1.02 Scts.
Higher occupancy, positive rental reversion
No changes.
Dec-14
1M
0.7
5.2
3M
9.5
9.8
12M
-4.6
8.2
Portfolio occupancy crept up 1.8% pts to 97.1% as Lippo Plazas occupancy rose to
100% while, at OUE Bayfront, backfilling two-thirds of the space vacated by one tenant
earlier helped boost take-up at the property to 97.4%. In terms of lease expiries, the trust
has a minimal 0.1% of income to be renewed for FY15 and a further 21% in FY16,
largely from Lippo Plaza in Shanghai.
Contributions from ORP to be felt from 4Q15 onwards

With the acquisition of c.68% of One Raffles Place (ORP), OUECTs portfolio has
expanded to 1.54m sf and is valued at cS$3.4bn, putting the trust on a more level
playing field versus other office REITs and increasing its Singapore exposure to 85.3%
of the portfolio, with a quality well-located property in the CBD. ORP comprises 774,567
sf of office and 102,530 sf of retail space.
No refinancing requirements till 2017

With the completion of the purchase of ORP in Oct 15, OUECTs gearing is expected to
reach 40.9%, slightly higher than the industry average. However, balance sheet metrics
remain healthy, with a weighted average debt maturity profile of 3.07 years, c.64% of
interest cost hedged and no refinancing requirements till 2017.
Maintain Add
Although FY15 DPU is affected by dilution from its recent rights issue, we expect the
income stream from ORP to impact positively and boost FY16 DPU. We retain our Add
call, with an FY16 DPU yield of 7.6%, and our DDM-based target price of S$0.81.
[X]
Financial Summary
Analyst
LOCK Mun Yee
T (65) 6210 8606

Net Profit (S$m)
Core EPS (S$)
Core EPS Growth
FD Core P/E (x)
DPS (S$)
Dividend Yield
Asset Leverage
BVPS (S$)
P/BV (x)
Recurring ROE
Dec-15F
98.3
74.8
34.30
50.70
0.031
NA
22.71
0.046
6.67%
40.0%
1.30
0.53
2.60%
0.96
Dec-16F
164.1
124.1
51.08
68.43
0.039
26.4%
17.54
0.053
7.64%
39.4%
1.29
0.53
3.04%
1.05
Dec-17F
171.0
129.4
53.73
70.91
0.041
4.2%
16.84
0.054
7.84%
39.3%
1.28
0.54
3.18%
1.04
Powered by
EFA
BY THE NUMBERS
Share price info

Share px perf. (%)
1M
3M
12M
Relative
5.2
9.8
8.2
Absolute
0.7
9.5
-4.6
Major shareholders
% held
OUE
42.7
Gordon Tang
13.0
0.800
0.700
0.600
0.500
0.400
0.300
0.200
0.100
0.000
40.50%
39.94%
39.38%
38.81%
38.25%
37.69%
37.13%
36.56%
36.00%
0.0600
9.0%
0.0500
7.5%
0.0400
6.0%
0.0300
4.5%
0.0200
3.0%
0.0100
1.5%
0.0000
0.0%
DPS (lhs)
Profit & Loss

(S$m)
Rental Revenues
Other Revenues
Net Property Income
Management Fees
Trustee's Fees
EBITDA
EBIT
Net Interest Income
Associates' Profit
Exceptional Items
Pre-tax Profit
Taxation
Minority Interests
Preferred Dividends
Net Profit
Dec-15F
98.3
0.0
98.3
(23.6)
74.8
0.0
(6.1)
(0.4)
(1.9)
66.2
(4.2)
62.0
(26.2)
Dec-16F
164.1
0.0
164.1
(39.9)
124.1
0.0
(9.2)
(0.4)
(1.9)
112.6
(3.4)
109.2
(34.5)
Dec-17F
171.0
0.0
171.0
(41.6)
129.4
0.0
(9.2)
(0.4)
(1.9)
117.8
(2.7)
115.1
(34.5)
8.9
0.0
44.7
(6.9)
(3.4)
3.1
0.0
77.8
(13.2)
(13.5)
1.0
0.0
81.6
(13.8)
(14.0)
34.3
50.7
51.1
68.4
53.7
70.9
Cash Flow
(S$m)
Pre-tax Profit
Tax Paid
Others
Capex
Dividends Paid
Dec-15F
45
30
18
(7)
0
86
(1,286)
0
0
(1,286)
Dec-16F
78
38
41
(13)
0
143
0
0
0
0
Dec-17F
82
37
4
(14)
0
109
0
0
0
0
734
(51)
532
1,216
16
(1,200)
(1,226)
9
(68)
(35)
(94)
50
143
109
9
(71)
(35)
(96)
13
109
75
197
BY THE NUMBERS
Balance Sheet
(S$m)
Total Investments
Intangible Assets
Inventories
Trade Debtors
Trade Creditors
Short-term Debt
Minority Interests
Total Equity
Dec-15F
2,917
0
10
2,927
47
Dec-16F
2,917
0
7
2,923
96
Dec-17F
2,917
0
4
2,921
110
2
49
38
0
4
42
1,191
63
1,254
1,679
3
100
65
0
4
69
1,191
78
1,269
1,685
4
113
68
0
4
72
1,191
80
1,271
1,691
1,679
1,685
1,691
Dec-15F
NA
NA
76.0%
NA
2.37
15.6%
151%
1.15
1.15
1.10
1.47%
Dec-16F
66.9%
66.1%
75.7%
14.6%
3.16
17.0%
143%
1.44
1.44
1.39
1.70%
Dec-17F
4.2%
4.2%
75.7%
2.6%
3.33
16.9%
141%
1.57
1.57
1.52
1.77%
Dec-15F
N/A
N/A
N/A
1,685
N/A
3,273.1
N/A
Dec-16F
N/A
N/A
N/A
1,685
N/A
3,273.1
N/A
Dec-17F
N/A
N/A
N/A
1,685
N/A
3,273.1
N/A
Key Ratios
NPI Growth
DPS Growth
Effective Tax Rate
Current Ratio
Quick Ratio
Cash Ratio
Key Drivers
RevPAR (S$)
Occupancy (%)
198
Company Note
Singapore
OUE Hospitality Trust
ADD (no change)
Worth a revisit
Current price:
Target price:
Previous target:
Up/downside:
S$0.79
S$0.98
S$0.98
23.9%
Reuters:
Bloomberg:
Market cap:
OUER.SI
OUEHT SP
US$746.7m
S$1,055m
US$0.27m
S$0.39m
1,313m
58.0%

Current shares o/s
Free float:
No change.
Price Close

103.3
0.900
99.9
0.800
96.4
0.700
6
93.0
Vol m
2
Mar-15
Jun-15
Sep-15
Source: Bloomberg
Price performance
Absolute (%)
Relative (%)
CPCA enhanced the diversification of OUE-HT as 3Q15 distributable income rose

6% yoy.
MOS and MG are quality assets which could offer resilience for RevPARs and
positive rental revisions.
We have factored in the dilutive impact of CPEX.

Maintain Add on OUE-HT being the highest yielding hospitality REIT.
CPCA enhanced the diversification of OUE-HT

OUE-HTs 3Q15 distributable income rose 6% yoy thanks to contribution from Crowne
Plaza@Changi Airport (CPCA). Gross revenue was also 22% yoy higher due to a better
operating performance from Mandarin Orchard Singapore (MOS) and an additional
S$4m of master lease income from the newly-acquired CPCA. MOS recorded a higher
RevPAR of $243 in 3Q15 vs. S$241 in 3Q14. Meanwhile, CPCA achieved a RevPAR of
S$250. The trusts retail segment largely remained the same.
Worth a revisit
1.000
Dec-14
1M
-4.3
0.2
3M
1.3
1.6
12M
-13.7
-0.9
MOS and Mandarin Gallery (MG) are strategically located at the heart of Orchard Road,
Singapores premier shopping belt. We believe that the location will give MOS RevPARs
more resilience vs. peers. Meanwhile, notwithstanding the challenging retail scene in
Singapore as well as more expected fit outs (as a result of tenancy changes), we expect
MG to achieve positive rental reversion for the remaining 21% of leases (by gross rent)
due later in the year. MG achieved rental reversion of +6% for 3Q15.
Acquisition of CPEX
OUE-HT is set to acquire the Crowne Plaza Extension (CPEX) for S$205m by Jun 16,
when the asset is expected to be completed. Given that OUE-HTs gearing level would
be able to fund 75% of the acquisition via debt (before hitting gearing level of 45%), we
have factored in a S$110m dilution. In addition, AEI for MOS which commenced in end2013 will continue into 2016. The remaining 270 out of 430 guest rooms would be
renovated in phases. The refurbishment is funded by the sponsor, OUE Ltd.
Highest yielding hospitality REIT

We believe that near-term concerns from the potential dilution of the funding of the
upcoming CPEX acquisition have been over-played. Currently offering FY15 dividend
yield of 8.5% and FY16 yield of 9%, OUE-HT is one of the highest yielding hospitality
REITs in Singapore. We maintain our Add call with an unchanged DDM-based target
price.
[X]
Financial Summary
Analyst
LOCK Mun Yee
T (65) 6210 8606

Net Profit (S$m)
Core EPS (S$)
Core EPS Growth
FD Core P/E (x)
DPS (S$)
Dividend Yield
Asset Leverage
BVPS (S$)
P/BV (x)
Recurring ROE
Dec-13A
50.6
44.8
80.46
38.2
0.023
0%
35.03
0.029
3.67%
31.7%
0.93
0.85
Dec-14A
115.9
103.2
78.58
89.0
0.060
166%
13.18
0.067
8.53%
32.5%
0.91
0.87
6.53%
Dec-15F
125.6
111.2
73.38
89.5
0.055
(8%)
14.26
0.068
8.55%
41.4%
0.90
0.88
6.13%
0%
1.04
Dec-16F
141.3
125.9
85.12
100.5
0.061
10%
13.01
0.072
9.08%
41.9%
0.89
0.89
6.82%
0%
1.07
Dec-17F
154.2
138.0
97.29
110.5
0.066
9%
11.99
0.067
8.53%
41.7%
0.88
0.89
7.45%
0%
1.04

Powered by
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BY THE NUMBERS
Share price info

Share px perf. (%)
1M
3M
Relative
0.2
1.6
-0.9
Absolute
-4.3
1.3
-13.7
Major shareholders
OUE Ltd
Credit Suisse AG
12M
% held
40.3
9.5
1.200
45.0%
1.000
37.5%
0.800
30.0%
0.600
22.5%
0.400
15.0%
0.200
7.5%
0.000
0.0%
0.0800
10.9%
0.0750
8.2%
0.0700
5.5%
0.0650
2.7%
0.0600
0.0%
DPS (lhs)
Profit & Loss

(S$m)
Rental Revenues
Other Revenues
Net Property Income
Management Fees
Trustee's Fees
EBITDA
EBIT
Net Interest Income
Associates' Profit
Exceptional Items
Pre-tax Profit
Taxation
Minority Interests
Preferred Dividends
Net Profit
Dec-13A
50.6
0.0
50.6
(5.8)
44.8
0.0
(4.2)
(0.1)
(0.9)
29.5
0.0
29.5
(10.1)
0.0
50.9
80.5
0.0
0.0
0.0
80.5
38.2
Dec-14A
115.9
0.0
115.9
(12.7)
103.2
0.0
(9.5)
(0.3)
(1.2)
78.7
0.0
78.7
(13.4)
0.0
(0.1)
78.6
0.0
0.0
0.0
78.6
89.0
Dec-15F
125.6
0.0
125.6
(14.4)
111.2
0.0
(12.8)
(0.4)
(1.2)
73.4
0.0
73.4
(23.4)
0.0
0.0
73.4
0.0
0.0
0.0
73.4
89.5
Dec-16F
141.3
0.0
141.3
(15.4)
125.9
0.0
(13.3)
(0.5)
(1.2)
85.1
0.0
85.1
(25.8)
0.0
0.0
85.1
0.0
0.0
0.0
85.1
100.5
Dec-17F
154.2
0.0
154.2
(16.3)
138.0
0.0
(12.3)
(0.5)
(1.2)
97.3
0.0
97.3
(26.7)
0.0
0.0
97.3
0.0
0.0
0.0
97.3
110.5
Cash Flow
(S$m)
Pre-tax Profit
Tax Paid
Others
Capex
Dividends Paid
Dec-13A
80
10
9
0
(47)
53
0
(1,149)
0
(1,149)
587
600
0
(31)
1,156
61
(1,095)
(518)
Dec-14A
79
13
(14)
0
10
88
(0)
0
0
(0)
Dec-15F
73
23
24
0
13
133
(0)
(290)
0
(290)
Dec-16F
85
26
1
0
12
124
(0)
(205)
0
(205)
Dec-17F
97
27
1
0
10
135
(0)
0
0
(0)
0
(104)
(14)
(117)
(30)
89
74
0
(89)
265
175
19
(157)
(180)
0
(100)
179
79
(3)
(81)
(107)
0
(99)
(27)
(126)
8
134
108
200
BY THE NUMBERS
Balance Sheet
(S$m)
Total Investments
Intangible Assets
Inventories
Trade Debtors
Trade Creditors
Short-term Debt
Minority Interests
Total Equity
Dec-13A
1,756
0
0
1,756
61
0
17
0
78
1
0
8
9
581
32
613
1,212
Dec-14A
1,756
0
0
1,756
31
0
9
0
41
2
0
7
10
583
5
588
1,198
Dec-15F
2,046
0
0
2,046
50
0
9
0
59
2
0
7
9
871
30
901
1,195
Dec-16F
2,251
0
0
2,251
47
0
9
0
56
2
0
7
9
966
30
997
1,302
Dec-17F
2,252
0
0
2,252
55
0
9
0
64
2
0
7
9
966
31
997
1,309
1,212
1,198
1,195
1,302
1,309
Dec-13A
0%
0%
88.6%
0%
N/A
0%
47%
8.51
8.51
6.62
N/A
Dec-14A
129%
130%
89.0%
132%
N/A
0%
113%
4.16
4.16
3.21
4.33%
Dec-15F
8%
8%
88.5%
0%
N/A
0%
122%
6.44
6.44
5.43
3.76%
Dec-16F
12%
13%
89.1%
6%
N/A
0%
118%
6.11
6.11
5.10
3.86%
Dec-17F
9%
10%
89.5%
(6%)
N/A
0%
102%
6.96
6.96
5.96
4.21%
Dec-13A
24.7
N/A
254.0
N/A
N/A
N/A
N/A
Dec-14A
25.3
N/A
256.5
N/A
N/A
N/A
N/A
Dec-15F
25.9
N/A
238.7
N/A
N/A
N/A
N/A
Dec-16F
26.6
N/A
242.3
N/A
N/A
N/A
N/A
Dec-17F
27.3
N/A
245.9
N/A
N/A
N/A
N/A
Key Ratios
NPI Growth
DPS Growth
Effective Tax Rate
Current Ratio
Quick Ratio
Cash Ratio
Key Drivers
RevPAR (S$)
Occupancy (%)
201
Company Note
Singapore
Parkway Life REIT
ADD (no change)
Offering resilience and growth
Current price:
Target price:
Previous target:
Up/downside:
S$2.26
S$2.56
S$2.56
13.3%
Reuters:
Bloomberg:
Market cap:
PWLR.SI
PREIT SP
US$967.8m
S$1,367m
US$0.59m
S$0.84m
605.0m
57.4%

Current shares o/s
Free float:
2.400
108.8
2.300
102.5
2.200
96.3
2.100
10
90.0
Vol m
115.0
Mar-15
Jun-15
Absolute (%)
Relative (%)
1M
-2.2
2.3
Healthy balance sheet with balance sheet capacity to make acquisitions.

Successful capital recycling unlocks value.
Maintain Add with DDM-based target price of S$2.56.
Boosted by organic income growth

PREIT reported a 2.5% rise in 3QFY15 revenue to c.S$26m, driven by higher-yielding
properties and higher rent from Singapore properties. Distribution to unitholders was
15.6% higher yoy, with a divestment gain distribution of S$2.3m from asset recycling
activities.
Resilient portfolio
3M
2.3
2.6
PREITs balance sheet remains healthy, with a net gearing of 35.2%. An estimated 78%
of its interest rate exposure is hedged and there are no refinancing requirements till
2017. Additionally, there is still room for inorganic growth given its debt headroom of
S$118m and S$281.4m, which correspond with gearing levels of 40% and 45%
respectively. Management had previously highlighted Malaysia, Australia, Japan and
China properties as potential targets.
Successful capital recycling
Sep-15
Source: Bloomberg
Price performance
Resilient portfolio with long WALE and downside risk protection.
Healthy balance sheet
2.500
Dec-14
Organic income growth and divestment gains lifted 3QFY15 results .
PREITs portfolio remains one of the most resilient among the S-REITs, with a long
weighted lease expiry of 9.39 years and downside protection for 93% of its leases by
gross revenue. While its revenue growth is relatively muted, c.1.05% for the Singapore
hospitals till Aug 16, due to lower inflation, this is compensated by the lower downside
risk.
No change.
Price Close
12M
-7.4
5.4
Management has successfully created value via its recent capital recycling in Dec 14.
The sale, at an exit yield of 5.9%, is 16% and 8% above the assets book values and
independent valuations respectively. Aside from financial gains, the portfolio also
benefited from reduced tenant concentration risks with an improved WALE. At the same
time, PREIT acquired seven other Japan nursing homes at 6.4% yield. This has
unlocked value for unitholders, while the new purchases added to income visibility.
Maintain Add
We maintain our Add call on PREIT, which offers an FY15 dividend yield of 5.9%. We
continue to like its resilient portfolio and managements ability to add value via asset
recycling despite the competitive acquisition landscape in Japan. Further yield accretive
acquisitions could catalyse the stock.
[X]
Financial Summary
Analyst(s)
LOCK Mun Yee
T (65) 6210 8606

Net Profit (S$m)
Core EPS (S$)
Core EPS Growth
FD Core P/E (x)
DPS (S$)
Dividend Yield
Asset Leverage
BVPS (S$)
P/BV (x)
Recurring ROE
Dec-13A
93.7
87.6
98.3
65.05
0.11
(0.5%)
21.52
0.11
4.76%
32.8%
1.63
1.39
6.56%
Dec-14A
100.4
93.8
107.4
69.70
0.11
2.4%
21.02
0.12
5.10%
35.0%
1.71
1.32
6.44%
Dec-15F
109.4
102.0
73.0
80.95
0.12
12.2%
18.74
0.13
5.92%
38.6%
1.70
1.33
7.08%
1.05
Dec-16F
112.2
104.2
74.6
73.50
0.12
2.3%
18.32
0.12
5.38%
38.5%
1.70
1.33
7.26%
1.00
Dec-17F
114.3
106.1
76.4
75.32
0.13
2.4%
17.89
0.12
5.51%
38.5%
1.70
1.33
7.43%
1.01
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BY THE NUMBERS
Share price info

Share px perf. (%)
1M
3M
Relative
2.3
2.6
Absolute
-2.2
2.3
Major shareholders
Parkway Pantai Limited
12M
5.4
-7.4
% held
35.7
Bank of New York Mellon Corp
9.9
Britten Holdings Pte Ltd
6.4
1.800
1.600
1.400
1.200
1.000
0.800
0.600
0.400
0.200
0.000
39.0%
37.9%
36.8%
35.7%
34.6%
33.4%
32.3%
31.2%
30.1%
29.0%
0.1600
0.1400
0.1200
0.1000
0.0800
0.0600
0.0400
0.0200
0.0000
DPS (lhs)
7.00%
6.13%
5.25%
4.38%
3.50%
2.63%
1.75%
0.88%
0.00%
Profit & Loss

(S$m)
Rental Revenues
Other Revenues
Net Property Income
Management Fees
Trustee's Fees
EBITDA
EBIT
Net Interest Income
Associates' Profit
Exceptional Items
Pre-tax Profit
Taxation
Minority Interests
Preferred Dividends
Net Profit
Dec-13A
93.7
0.0
93.7
(6.1)
87.6
0.0
(9.4)
(2.5)
0.0
75.8
0.0
75.8
(8.1)
0.0
0.0
37.0
104.6
(6.3)
0.0
0.0
98.3
65.1
Dec-14A
100.4
0.0
100.4
(6.6)
93.8
0.0
(10.1)
(2.7)
0.0
81.0
0.0
81.0
(8.2)
0.0
0.0
47.4
120.1
(12.7)
0.0
0.0
107.4
69.7
Dec-15F
109.4
0.0
109.4
(7.4)
102.0
0.0
(9.4)
(2.8)
0.0
89.9
0.0
89.9
(9.3)
0.0
0.0
0.0
80.6
(7.7)
0.0
0.0
73.0
81.0
Dec-16F
112.2
0.0
112.2
(8.0)
104.2
0.0
(9.5)
(2.8)
0.0
91.9
0.0
91.9
(9.3)
0.0
0.0
0.0
82.6
(8.0)
0.0
0.0
74.6
73.5
Dec-17F
114.3
0.0
114.3
(8.2)
106.1
0.0
(9.6)
(2.8)
0.0
93.8
0.0
93.8
(9.4)
0.0
0.0
0.0
84.5
(8.0)
0.0
0.0
76.4
75.3
Dec-13A
104.6
8.1
2.6
(3.6)
(35.3)
76.4
(3.8)
(86.3)
0.0
(90.0)
86.4
0.0
(64.3)
(7.0)
15.2
1.6
(13.6)
65.9
Dec-14A
120.1
8.2
0.5
(4.2)
(58.8)
66.0
(4.2)
8.8
0.0
4.6
115.6
0.0
(69.2)
(7.4)
39.0
109.6
70.6
178.8
Dec-15F
80.6
9.3
(7.6)
(7.7)
0.0
74.7
(3.4)
(86.8)
0.4
(89.7)
86.8
0.0
(81.0)
(9.7)
(3.9)
(18.9)
(14.6)
62.5
Dec-16F
82.6
9.3
0.1
(8.0)
0.0
84.1
(3.4)
0.0
0.4
(3.0)
0.0
0.0
(73.5)
(9.7)
(83.2)
(2.1)
81.5
71.8
Dec-17F
84.5
9.4
(0.1)
(8.0)
0.0
85.7
(3.4)
0.0
0.4
(3.0)
0.0
0.0
(75.3)
(9.7)
(85.0)
(2.3)
83.1
73.4
Cash Flow
(S$m)
Pre-tax Profit
Tax Paid
Others
Capex
Dividends Paid
203
BY THE NUMBERS
Balance Sheet
(S$m)
Total Investments
Intangible Assets
Inventories
Trade Debtors
Trade Creditors
Short-term Debt
Minority Interests
Total Equity
Dec-13A
1,484
0
7
1,491
27
0
10
0
37
15
4
2
21
497
24
521
986
0
Dec-14A
1,501
0
11
1,512
146
0
10
0
157
21
81
1
104
503
27
530
1,035
0
Dec-15F
1,591
0
11
1,602
128
0
11
0
139
14
20
1
36
651
27
678
1,027
0
Dec-16F
1,594
0
11
1,605
125
0
11
0
137
15
20
1
36
651
27
678
1,029
0
Dec-17F
1,597
0
11
1,609
123
0
11
0
135
15
20
1
36
651
27
678
1,030
0
986
1,035
1,027
1,029
1,030
Dec-13A
(0.41%)
(0.01%)
93.5%
4.2%
9.31
6.0%
66%
1.77
1.77
1.30
6.56%
Dec-14A
7.14%
7.05%
93.4%
7.1%
9.81
10.6%
65%
1.52
1.52
1.41
6.72%
Dec-15F
9.03%
8.81%
93.2%
16.1%
9.24
9.5%
111%
3.89
3.89
3.58
4.28%
Dec-16F
2.53%
2.09%
92.8%
(9.2%)
9.45
9.6%
98%
3.80
3.80
3.48
4.29%
Dec-17F
1.89%
1.91%
92.8%
2.5%
9.64
9.5%
99%
3.73
3.73
3.40
4.39%
Dec-13A
N/A
N/A
N/A
2,265
100.0%
1,483.8
N/A
Dec-14A
N/A
N/A
N/A
2,265
100.0%
1,500.6
N/A
Dec-15F
N/A
N/A
N/A
2,265
100.0%
1,590.8
N/A
Dec-16F
N/A
N/A
N/A
2,265
100.0%
1,594.1
N/A
Dec-17F
N/A
N/A
N/A
2,265
100.0%
1,597.5
N/A
Key Ratios
NPI Growth
DPS Growth
Effective Tax Rate
Current Ratio
Quick Ratio
Cash Ratio
Key Drivers
RevPAR (S$)
Occupancy (%)
204
Property DevelopmentSingaporeEquity researchDecember 9, 2015
Company Note
Singapore
Perennial Real Estate Holdings
ADD (no change)
Building earnings momentum
Current price:
Target price:
Previous target:
Up/downside:
S$0.98
S$1.39
S$1.39
41.5%
Reuters:
Bloomberg:
Market cap:
PERE.SI
PREH SP
US$1,148m
S$1,622m
US$0.16m
S$0.22m
1,265m
21.4%

Current shares o/s
Free float:
No change.
Recurrent leasing income with a boost from development profit.
Maintain Add with an unchanged target price of S$1.39.
Singapore assets are operational and now generate c.65% of topline.

China malls performance gaining momentum.
Launch and sale of Singapore strata office space to provide another source of
income.
Stable income base plus potential development value creation

PREH derives the bulk of its recurrent income from leasing its completed Singapore and
China properties, giving the group a steady recurrent income base. These assets make
up 62% of its portfolio value and 31% of its GFA. The planned launch and sale of its
development projects, largely in China, should provide another source of income and
value creation in the medium term, thus narrowing the gap between the share price and
its RNAV.
Singapore assets are operational and well occupied
Price Close
1.400
106.0
1.200
94.3
1.000
82.7
0.800
30
71.0
Vol m
20
10
Dec-14
Mar-15
Jun-15
Sep-15
Source: Bloomberg
Price performance
Absolute (%)
Relative (%)
1M
-2.0
2.5
3M
4.3
4.6
12M
-24.6
-11.8
PREHs properties in Singapore enjoy a high occupancy rate. CHIJMES is 88% preleased of which 77% of its tenants are operational. In addition, Capitol Piazza is over
80% pre-committed and most of the tenants, including a number of new concepts and
new-to-Singapore fashion and F&B names have commenced operations. Rental income
is expected to expand when more of its tenants become operational.
China malls are stabilising

In China, the Perennial Jihua malls occupancy rate has hit 99.7% while the Perennial
Qingyang malls is 98.6%. We expect the latters performance to improve as the
upcoming completion of three office blocks nearby enlarges its potential catchment pool.
In addition, securing a key hospital anchor tenant for c.53% of the 90,000 sq m
earmarked for healthcare use at the Perennial International Health and Medical Hub will
complement retail activities at the Chengdu HSR integrated project in the long run.
Sale of office space could provide another earnings driver

The launch of the strata office space at TripleOne Somerset and AXA Tower would
enable the group to monetise some of its properties. Both properties have received
planning permits and are awaiting other development approvals for its AEIs, which
include building a medical suites block, increasing the retail area and offering strata
office space for sale. These works could start in 1Q16. Show suites for the strata offices
are being set up. When launched, this would form another income source for the group.
Reiterate Add
We reiterate our Add call with a target price of S$1.39, pegged at a 35% discount to
RNAV. A potential catalyst for the stock is the monetisation of its strata office space in
Singapore.
[X]
Financial Summary
Analyst
LOCK Mun Yee
T (65) 6210 8606

Net Profit (S$m)
Core EPS (S$)
Core EPS Growth
FD Core P/E (x)
DPS (S$)
Dividend Yield
EV/EBITDA (x)
P/FCFE (x)
Net Gearing
P/BV (x)
ROE
Jun-14A
19.3
(8.9)
(6.0)
(0.005)
(132%)
NA
0.00%
NA
NA
(202%)
1,147
(0.64%)
Jun-15A
58.6
15.0
22.0
0.001
NA
726.6
0.003
0.34%
134.1
NA
46%
1
0.16%
Jun-16F
87.2
44.0
39.4
0.018
1223%
54.9
0.006
0.61%
65.9
NA
57%
1
1.39%
Jun-17F
117.5
72.5
71.3
0.043
142%
22.7
0.011
1.10%
48.8
NA
73%
1
2.49%
0.72
Jun-18F
204.7
114.8
135.1
0.082
89%
12.0
0.020
2.09%
32.6
NA
78%
1
4.58%
1.06

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Share price info

Share px perf. (%)
Relative
Absolute
Major shareholders
Kuok Khoon Hong
1M
2.5
-2.0
3M
4.6
4.3
12M
P/BV vs ROE

Growth
2,500
3.50%
25,000
5,000%
2,000
2.60%
20,000
3,600%
% held
1,500
1.70%
15,000
2,200%
59.2
1,000
0.80%
10,000
800%
-0.10%
5,000
-600%
-11.8
-24.6
500
0
-1.00%
0
-2,000%
ROE (rhs)
Profit & Loss

(S$m)
Total Net Revenues
Gross Profit
Operating EBITDA
Operating EBIT
Exceptional Items
Pre-tax Profit
Taxation
Profit After Tax
Minority Interests
Pref. & Special Div
Net Profit
Jun-14A
19.3
13.0
(8.9)
0.0
(8.9)
(0.0)
(0.2)
3.2
(6.0)
0.0
(6.0)
0.1
Jun-15A
58.6
32.3
15.0
0.0
15.0
(17.4)
9.2
8.3
15.0
23.0
38.0
(5.0)
Jun-16F
87.2
68.3
44.0
0.0
44.0
(26.8)
24.3
8.5
50.0
11.6
61.6
(8.1)
Jun-17F
117.5
106.9
72.5
0.0
72.5
(45.5)
66.4
8.7
102.1
0.0
102.1
(13.4)
Jun-18F
204.7
156.1
114.8
0.0
114.8
(60.4)
120.9
8.7
184.0
0.0
184.0
(24.1)
(5.9)
(0.1)
0.0
33.0
(11.0)
0.0
53.5
(14.1)
0.0
88.7
(17.4)
0.0
159.9
(24.8)
0.0
(6.0)
(6.0)
(6.0)
22.0
2.0
2.0
39.4
29.3
29.3
71.3
71.3
71.3
135.1
135.1
135.1
Cash Flow
(S$m)
EBITDA
Tax Paid
Capex
Shares Repurchased
Dividends Paid
Preferred Dividends
Jun-14A
(8.9)
0.2
0.9
Jun-15A
15.0
(9.2)
(17.9)
Jun-16F
44.0
(24.3)
(157.2)
Jun-17F
72.5
(66.4)
(157.5)
Jun-18F
114.8
(120.9)
5.3
3.3
(0.1)
(0.1)
(4.6)
(0.5)
(12.5)
(17.6)
(1.4)
(43.5)
(37.0)
(26.0)
(26.9)
(3.3)
(193.9)
(314.3)
(66.4)
(45.6)
(8.2)
(271.5)
(540.7)
(120.9)
(60.5)
(13.4)
(195.7)
(345.1)
0.0
0.5
0.0
(1.3)
(91.1)
0.1
(128.0)
134.7
(45.9)
0.1
(360.2)
490.6
0.0
0.0
(540.7)
675.3
0.0
0.0
(345.1)
524.8
(4.1)
(11.2)
(17.8)
0.0
664.0
0.0
507.0
0.0
0.0
(0.2)
(1.5)
(37.2)
97.5
(18.8)
467.7
206
BY THE NUMBERS
Balance Sheet
(S$m)
Total Debtors
Inventories
Fixed Assets
Total Investments
Intangible Assets
Short-term Debt
Total Creditors
Total Provisions
Total Liabilities
Minority Interests
Total Equity
Jun-14A
3
0
2
1
0
5
2
2
0
0
4
0
Jun-15A
64
1,139
81
0
0
1,284
2
2,781
60
0
2,843
158
Jun-16F
90
1,713
107
0
0
1,910
2
4,498
90
0
4,589
237
Jun-17F
86
1,713
94
0
0
1,893
2
5,105
90
0
5,196
237
Jun-18F
306
1,713
164
0
0
2,182
2
5,571
90
0
5,662
237
5
0
5
0
261
4
422
1,085
227
8
472
2,055
56
13
307
2,731
131
24
393
3,255
2
2
0
7
1
0
1
57
1,142
0
1,564
1,863
700
2,562
84
2,139
0
2,612
2,827
1,061
3,888
84
2,815
0
3,122
2,889
1,078
3,968
84
3,340
0
3,732
3,009
1,103
4,112
Jun-14A
(77%)
(140%)
(46.1%)
0.00
0.00
(106.0)
0.0%
NA
386.8
25.47
7,924
(3%)
(0.50%)
(0.29%)
Jun-15A
203%
NA
25.6%
(0.71)
1.13
0.9
13.1%
NA
258.3
8.22
1,848
(1308%)
0.60%
1.00%
Jun-16F
49%
194%
50.4%
(1.33)
1.71
1.6
13.1%
35.4%
395.6
2.87
4,710
4%
0.98%
1.43%
Jun-17F
35%
65%
61.7%
(1.74)
1.75
1.6
13.1%
25.0%
312.8
0.00
4,896
4%
1.11%
1.98%
Jun-18F
74%
58%
56.1%
(1.93)
1.82
1.9
13.1%
25.0%
229.9
0.00
704
6%
1.58%
2.95%
Jun-14A
N/A
N/A
N/A
N/A
67.2%
N/A
N/A
N/A
N/A
N/A
N/A
Jun-15A
N/A
N/A
N/A
N/A
59.2%
N/A
N/A
N/A
N/A
N/A
N/A
Jun-16F
N/A
N/A
N/A
N/A
72.6%
N/A
N/A
N/A
N/A
N/A
N/A
Jun-17F
N/A
N/A
N/A
N/A
91.0%
N/A
N/A
N/A
N/A
N/A
N/A
Jun-18F
N/A
N/A
N/A
N/A
80.9%
N/A
N/A
N/A
N/A
N/A
N/A
Key Ratios
Revenue Growth
BVPS (S$)
Effective Tax Rate
Inventory Days
ROIC (%)
ROCE (%)
Key Drivers
Gross Margins (%)
207
Company Note
Singapore
Petra Foods
REDUCE (no change)
Needs Indonesia to find its footing
Current price:
Target price:
Previous target:
Up/downside:
S$2.23
S$1.79
S$1.79
-19.8%
Reuters:
Bloomberg:
Market cap:
PEFO.SI
PETRA SP
US$964.7m
S$1,363m
US$0.31m
S$0.44m
611.2m
37.3%

Current shares o/s
Free float:
Quarterly core profit has slumped to its worst since the Asian Crisis.
Management has moved to reclaim its traditional 30% gross margins, by hiking
selling prices to pass on the higher costs. A stable or rising Rp would help greatly.
We have a Reduce rating with target price based on 25x CY17 P/E.
Chief blame lies in the Rps plunge. Inflation rose, impacting consumer sentiment.
Shops thinned out inventory on poor sales. Margins was hit by rising US$ costs
Indonesia sales have fallen in worryingly quantum

Petra Foods Indonesia sales and profitability started going on a downtrend in 2Q15.
Things got progressively worse in 3Q15. Indonesia sales was -21%yoy in local currency
terms, as consumers were hit by rising inflation when the Rp nosedived again. Poorer
sales and a decline in gross margins had an outsized effect on core profits, even if we
ignore one-offs.
Indonesia margins affected, price hikes implemented
No change.
Price Close

107.0
4.00
99.0
3.50
91.0
3.00
83.0
2.50
75.0
2.00
10
67.0
Vol m
4.50
Dec-14
Mar-15
Jun-15
Absolute (%)
Relative (%)
1M
-10.8
-6.3
Regional markets, particularly the Philippines doing well

The bright spot is that it has done very well in a second key market after Indonesia. The
business started from it buying local brand Goya and Petra has grown that from a singledigit market share to a double-digit share. The success of the Philippines probably
spurred managements decision to focus resources on core markets. In 2014-15, Petra
culled several third-party distribution business to focus on its core markets and brands.
Sep-15
Source: Bloomberg
Price performance
3Q gross margins have fallen to 28% vs. a more normal 31-32% usually. Petra initially
resisted passing on higher US$ costs and suffered in the quarter, before it implemented
3-4% price hikes in late August. We expect margins to improve, post-price hikes and
especially as the Rp has rebounded and looks more stable recently. Other costs that
add up were higher SG&A costs, as higher logistics costs and more trade promotion
costs weighed in.
3M
-19.5
-19.2
12M
-39.7
-26.9
2016 could see its M&A search in China throw up something

After selling off its ingredients business, the intention all along was to look for a third
market to grow its chocolate business. China has been identified as one such market.
The market has all the right characteristics to see a period of strong growth in the next 510 years, and there is no clear leading brands yet. With the settlement of the Barry
Callebaut case, management can focus on leaping into its third core market in 2016.
Will do well if Rp stabilises, 2016 budgeting pegs RP at 14,500

The lynchpins of the consumer business has always been its heritage brands and its
distribution network in Indonesia. However, those strengths are nullified when the Rp
keeps falling and the Indonesia consumer is under duress, like in 2015. We see a better
2015 on the premise that the Rp stabilizes, once President Jokowis plans for
infrastructure building gets rolled out and jobs are created.
[X]
Financial Summary
Analyst
Kenneth NG, CFA
T (65) 6210 8610
Revenue (US$m)
Net Profit (US$m)
Core EPS (US$)
Core EPS Growth
FD Core P/E (x)
DPS (US$)
Dividend Yield
EV/EBITDA (x)
P/FCFE (x)
Net Gearing
P/BV (x)
ROE
Dec-13A
508.8
91.65
59.31
0.10
16.9%
15.30
0.081
5.14%
8.81
5.33
(54.2%)
3.32
20.4%
Dec-14A
504.0
80.87
48.73
0.08
(20.6%)
19.27
0.075
4.75%
10.72
98.76
(33.0%)
3.25
17.0%
Dec-15F
399.8
37.00
7.98
0.04
(54.4%)
42.28
0.030
1.93%
24.05
NA
(29.9%)
3.84
8.3%
0%
0.62
Dec-16F
441.0
50.51
31.80
0.05
39.4%
30.33
0.034
2.19%
17.48
42.21
(31.0%)
3.64
12.3%
0%
1.04
Dec-17F
520.7
67.79
44.11
0.07
38.7%
21.87
0.048
3.06%
13.09
57.26
(27.1%)
3.38
16.0%
0%
0.96

Powered by
EFA
BY THE NUMBERS
Share price info

Share px perf. (%)
1M
3M
12M
Relative
-6.3
-19.2
-26.9
Absolute
-10.8
-19.5
Major shareholders
Chuang family
-39.7
% held
50.5
Tiger Global
6.4
5.8
P/BV vs ROE
30.0
900%
25.0
750%
20.0
600%
15.0
450%
10.0
300%
5.0
150%
0.0
0%
Growth
90.0
80.0
70.0
60.0
50.0
40.0
30.0
20.0
10.0
0.0
60%
44%
29%
13%
-2%
-18%
-33%
-49%
-64%
-80%
ROE (rhs)
Profit & Loss

(US$m)
Total Net Revenues
Gross Profit
Operating EBITDA
Operating EBIT
Exceptional Items
Pre-tax Profit
Taxation
Profit After Tax
Minority Interests
Preferred Dividends
Net Profit
Dec-13A
508.8
162.8
91.7
(8.7)
82.9
(1.7)
(0.1)
6.9
88.1
(5.2)
82.9
(23.5)
Dec-14A
504.0
160.8
80.9
(9.8)
71.1
(3.1)
0.5
3.6
72.0
(1.9)
70.1
(21.3)
Dec-15F
399.8
117.2
37.0
(8.2)
28.8
(4.1)
0.5
5.7
30.9
(20.1)
10.8
(2.8)
Dec-16F
441.0
131.9
50.5
(8.5)
42.0
(4.1)
0.5
6.0
44.4
0.0
44.4
(12.5)
Dec-17F
520.7
158.8
67.8
(8.8)
59.0
(4.1)
0.5
6.3
61.7
0.0
61.7
(17.6)
59.3
(0.0)
0.0
48.8
(0.0)
0.0
8.0
(0.0)
0.0
31.8
(0.0)
0.0
44.1
(0.0)
0.0
59.3
63.1
63.1
48.7
50.1
50.1
8.0
22.8
22.8
31.8
31.8
31.8
44.1
44.1
44.1
Cash Flow
(US$m)
EBITDA
Tax Paid
Capex
Shares Repurchased
Dividends Paid
Preferred Dividends
Dec-13A
91.7
Dec-14A
80.9
Dec-15F
37.0
Dec-16F
50.5
Dec-17F
67.8
32.1
(33.9)
36.0
4.4
(14.7)
(109.2)
(3.3)
(18.5)
(7.3)
(35.4)
0.0
0.0
645.4
610.0
(421.8)
0.0
0.0
(25.6)
5.8
(6.2)
(24.2)
22.2
(29.0)
0.0
0.0
0.0
(29.0)
16.5
0.0
0.0
(38.4)
(2.3)
(8.2)
(2.8)
59.7
(30.0)
0.0
0.0
(38.8)
(68.8)
0.0
0.0
0.0
(13.8)
18.7
(8.2)
(12.5)
52.9
(30.0)
0.0
0.0
0.0
(30.0)
0.0
0.0
0.0
(15.6)
19.5
(8.2)
(17.6)
46.8
(30.0)
0.0
0.0
0.0
(30.0)
0.0
0.0
0.0
(21.9)
0.0
(447.4)
155.4
180.9
604.4
0.0
(21.9)
(28.6)
9.8
(3.6)
0.0
(13.8)
(22.9)
(9.1)
(5.0)
0.0
(15.6)
7.2
22.9
27.0
0.0
(21.9)
(5.0)
16.8
21.0
209
BY THE NUMBERS
Balance Sheet
(US$m)
Total Debtors
Inventories
Fixed Assets
Total Investments
Intangible Assets
Short-term Debt
Total Creditors
Total Provisions
Total Liabilities
Minority Interests
Total Equity
Dec-13A
196.7
110.8
65.5
0.0
373.0
81.8
0.0
5.0
5.7
92.5
39.0
Dec-14A
172.0
103.1
72.8
0.0
347.8
111.1
0.0
4.9
6.6
122.7
64.8
Dec-15F
149.1
75.8
64.6
0.0
289.5
139.3
0.0
4.9
6.6
150.8
64.8
Dec-16F
156.3
81.4
57.6
0.0
295.3
156.5
0.0
4.9
6.6
168.1
64.8
Dec-17F
151.3
92.4
67.4
0.0
311.1
172.8
0.0
4.9
6.6
184.3
64.8
122.7
0.0
161.7
0.4
85.2
0.0
150.0
9.2
101.1
0.0
165.9
9.2
109.9
0.0
174.7
9.2
121.7
0.0
186.5
9.2
8.1
8.5
5.0
175.2
290.2
0.2
290.4
9.6
18.8
4.3
173.2
297.2
0.1
297.3
9.6
18.8
4.3
189.0
251.0
0.2
251.2
9.6
18.8
4.3
197.8
265.4
0.2
265.6
9.6
18.8
4.3
209.7
285.5
0.2
285.7
Dec-13A
6.5%
8.1%
18.0%
0.26
0.47
50.21
28.4%
57.0%
51.74
66.94
40.25
6.3%
11.4%
7.8%
Dec-14A
(0.9%)
(11.8%)
16.0%
0.16
0.49
22.78
30.4%
69.8%
57.50
73.51
39.40
40.4%
20.0%
11.4%
Dec-15F
(20.7%)
(54.2%)
9.3%
0.12
0.41
7.00
26.0%
49.2%
62.46
88.70
41.62
11.2%
8.2%
6.9%
Dec-16F
10.3%
36.5%
11.5%
0.13
0.43
10.22
28.3%
49.1%
47.79
72.33
40.31
18.3%
12.5%
7.8%
Dec-17F
18.1%
34.2%
13.0%
0.13
0.47
14.36
28.5%
49.6%
46.17
63.05
38.94
24.8%
16.7%
9.9%
Dec-13A
N/A
4.7%
N/A
N/A
N/A
N/A
N/A
11.7%
N/A
N/A
N/A
N/A
Dec-14A
N/A
-1.2%
N/A
N/A
N/A
N/A
N/A
-0.2%
N/A
N/A
N/A
N/A
Dec-15F
N/A
-24.4%
N/A
N/A
N/A
N/A
N/A
-10.7%
N/A
N/A
N/A
N/A
Dec-16F
N/A
10.0%
N/A
N/A
N/A
N/A
N/A
11.0%
N/A
N/A
N/A
N/A
Dec-17F
N/A
19.0%
N/A
N/A
N/A
N/A
N/A
16.0%
N/A
N/A
N/A
N/A
Key Ratios
Revenue Growth
BVPS (US$)
Effective Tax Rate
Inventory Days
ROIC (%)
ROCE (%)
Key Drivers
210
Health Care Providers & SvsSingaporeEquity researchDecember 9, 2015
Company Note
Singapore
Q&M Dental Group
ADD (no change)
Largest in Singapore, with inroads into China
Current price:
Target price:
Previous target:
Up/downside:
S$0.72
S$0.84
S$0.84
16.9%
Reuters:
Bloomberg:
Market cap:
QMDT.SI
QNM SP
US$394.9m
S$557.9m
US$0.80m
S$1.12m
778.6m
39.0%

Current shares o/s
Free float:
No change.
2015 has been a great year for Q&M as it executed its M&A strategy and earnings
flowed through from the China acquisitions in 2H14.
3Q15 showed signs of slowing domestic growth, but earnings growth will likely
remain robust after an active year of acquisitions in 2015.
Inorganic growth remains the theme for Q&M. Upside to our numbers exists as
profit guarantees/targets only form base-case earnings.
Q&M is our top small/mid-cap healthcare pick. Maintain Add with a target price of
S$0.84 (based on 34.5x CY17 P/E, 1 s.d. below average 12m forward).
#1 private dental player in Singapore (10-15% market share)

With the acquisition of nine dental clinics in Singapore this year alone, Q&M has further
strengthened its position as the largest private dental group in Singapore (more than 70
clinics with a 10-15% market share). The group has also recently completed the
acquisition of TP Dental (a dental clinic targeting the premium segment), which we
estimate will add at least 20% to Q&Ms dental profits in Singapore.
China could form up to 40% of group earnings

Price Close

243
0.90
203
0.70
163
0.50
123
0.30
80
60
40
20
83
Vol m
1.10
Dec-14
Mar-15
Jun-15
Sep-15
Source: Bloomberg
Price performance
Absolute (%)
Relative (%)
1M
-6.5
-2.0
3M
0.7
1.0
12M
70.2
83.0
In addition to acquisitions in Singapore contributing to earnings, the other driver is

earnings from China flowing through. The acquisitions of Aoxin and Aidite in 2H14 not
only added another stream of earnings for Q&M, it placed the group on a new growth
trajectory where earnings CAGR over FY15-17F is expected to be in the 20-30% range
(vs. historical 5-10%). We see China making up ~40% of the groups earnings.
Aidite (crown manufacturer) will be a key driver of group earnings

Aidites FY14 net profit of ~S$1.3m formed 15% of total earnings despite it making up
only five months of contribution. We think Aidite will become increasingly important to
group earnings, driven by 1) a new production plant that will close to double current
capacity (expected completion end-15), and 2) increasing penetration rates of CAD/CAM
technology, which will drive demand for Aidites zirconia crowns.
Upside potential to profit guarantees/targets

As part of Q&Ms M&A strategy, the company often inserts profit guarantees or targets
into the agreements where the acquiree has to make up for any shortfall in earnings. We
remind investors there is upside potential as we have factored in acquisitions at their
profit guarantees/targets. These only form the base case and it is not unreasonable to
anticipate some outperformance.
Still has cash for inorganic opportunities

With ~S$26m still untapped from its S$60m MTN issue, we look forward to more
acquisitions. Other catalysts include the potential listing of its China business.
[X]
Financial Summary
Analysts
Jonathan SEOW
T (65) 6210 8671
Kenneth NG, CFA
T (65) 6210 8610
Revenue (S$m)
Net Profit (S$m)
Core EPS (S$)
Core EPS Growth
FD Core P/E (x)
DPS (S$)
Dividend Yield
EV/EBITDA (x)
P/FCFE (x)
Net Gearing
P/BV (x)
ROE
Dec-13A
71.2
9.09
6.46
0.008
(1.0%)
87.62
0.013
1.82%
52.09
1,597
(42.4%)
10.76
14.4%
Dec-14A
100.3
15.06
8.56
0.012
56.1%
57.81
0.007
1.02%
34.27
462
(4.1%)
6.67
14.2%
Dec-15F
131.0
24.26
13.59
0.015
19.9%
46.16
0.008
1.18%
24.72
10
10.4%
5.58
13.1%
0%
1.12
Dec-16F
146.0
23.85
15.53
0.019
31.7%
37.16
0.010
1.35%
26.04
NA
24.3%
5.19
14.5%
0%
0.92
Dec-17F
161.9
28.05
19.56
0.024
26.0%
29.50
0.012
1.69%
21.77
22
12.0%
4.77
16.8%
0%
0.93

Powered by
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BY THE NUMBERS
Share price info

Share px perf. (%)
1M
3M
12M
Relative
-2.0
1.0
83.0
Absolute
-6.5
0.7
70.2
Major shareholders
Quan Min Holdings
% held
47.1
Heritas Helios
8.2
Dr Kelvin Koh Shunjie
4.3
P/BV vs ROE
10.00
9.00
8.00
7.00
6.00
5.00
4.00
3.00
2.00
1.00
0.00
20.00%
18.00%
16.00%
14.00%
12.00%
10.00%
8.00%
6.00%
4.00%
2.00%
0.00%

Growth
60.0
60.0%
50.0
50.0%
40.0
40.0%
30.0
30.0%
20.0
20.0%
10.0
10.0%
0.0
0.0%
ROE (rhs)
Profit & Loss

(S$m)
Total Net Revenues
Gross Profit
Operating EBITDA
Operating EBIT
Exceptional Items
Pre-tax Profit
Taxation
Profit After Tax
Minority Interests
Preferred Dividends
Net Profit
Dec-13A
71.2
19.5
9.1
(2.0)
7.1
(0.3)
0.1
0.0
7.0
Dec-14A
100.3
30.2
15.1
(2.8)
12.2
(0.5)
0.0
0.0
11.8
Dec-15F
131.0
42.4
24.3
(4.9)
19.4
(1.4)
0.2
0.0
18.2
Dec-16F
146.0
45.8
23.9
(5.3)
18.5
(3.0)
0.2
0.0
15.7
Dec-17F
161.9
51.0
28.1
(5.2)
22.8
(3.0)
0.2
0.0
20.0
7.0
(0.5)
11.8
(1.3)
18.2
(2.5)
15.7
(2.1)
20.0
(2.7)
6.5
(0.0)
10.5
(1.9)
15.7
(2.7)
13.5
(3.1)
17.3
(3.5)
6.5
5.4
5.4
8.6
8.7
8.7
0.6
13.6
11.8
11.8
5.1
15.5
15.5
15.5
5.8
19.6
19.6
19.6
Cash Flow
(S$m)
EBITDA
Tax Paid
Capex
Shares Repurchased
Dividends Paid
Preferred Dividends
Dec-13A
9.09
Dec-14A
15.06
Dec-15F
24.26
Dec-16F
23.85
Dec-17F
28.05
(3.48)
(4.16)
(2.86)
(0.18)
(0.19)
(1.15)
0.26
(0.49)
4.23
(3.43)
(0.46)
0.47
(0.61)
10.30
(17.20)
(0.75)
1.38
(2.49)
19.53
(11.90)
2.03
3.04
(2.15)
26.59
(4.30)
2.73
3.04
(2.74)
30.89
(4.30)
(5.44)
5.22
(3.64)
(0.29)
16.78
(21.57)
0.33
(38.43)
29.23
12.78
(28.85)
14.10
(26.65)
60.00
0.00
(30.00)
0.10
(34.20)
0.00
0.00
0.00
0.10
(4.20)
0.00
0.00
(6.15)
(6.54)
(6.79)
(7.76)
(9.78)
(0.66)
9.68
10.26
0.30
0.22
(0.40)
35.07
6.93
1.09
(28.65)
(1.48)
51.73
44.61
52.88
(8.60)
(3.14)
(10.90)
(18.51)
(7.61)
(10.75)
(3.14)
(12.92)
13.78
26.70
23.56
212
BY THE NUMBERS
Balance Sheet
(S$m)
Total Debtors
Inventories
Fixed Assets
Total Investments
Intangible Assets
Short-term Debt
Total Creditors
Total Provisions
Total Liabilities
Minority Interests
Total Equity
Dec-13A
28.7
7.7
4.1
1.5
42.1
15.4
3.5
5.5
1.3
25.6
0.2
Dec-14A
35.7
16.3
8.6
6.2
66.9
37.4
0.0
35.3
1.1
73.8
3.7
Dec-15F
80.3
16.2
9.5
6.2
112.2
30.4
0.2
55.3
30.0
115.9
3.7
Dec-16F
61.8
18.0
11.2
6.2
97.2
29.4
0.4
55.3
60.0
145.1
3.7
Dec-17F
75.6
20.0
13.0
6.2
114.7
28.5
0.6
55.3
60.0
144.4
3.7
10.8
0.1
11.1
8.7
21.2
1.0
25.8
28.5
19.0
1.0
23.7
88.5
22.4
1.0
27.1
88.5
25.9
1.0
30.6
88.5
0.0
8.7
1.2
20.9
46.1
0.6
46.7
0.0
28.5
1.3
55.6
76.6
8.4
85.0
0.0
88.5
1.3
113.5
103.5
11.1
114.6
0.0
88.5
1.3
116.8
111.2
14.2
125.5
0.0
88.5
1.3
120.4
121.0
17.7
138.7
Dec-13A
24.7%
30.6%
12.8%
0.029
0.07
19.47
7.0%
122%
34.22
19.83
73.10
40.5%
15.1%
11.6%
Dec-14A
40.9%
65.8%
15.0%
0.005
0.11
23.72
10.8%
66%
43.76
33.19
83.19
49.7%
14.1%
10.5%
Dec-15F
30.6%
61.1%
18.5%
(0.015)
0.13
13.13
13.7%
50%
45.22
37.34
82.71
23.4%
12.0%
9.6%
Dec-16F
11.5%
(1.7%)
16.3%
(0.038)
0.14
5.90
13.7%
50%
42.80
37.78
75.57
14.5%
8.7%
9.2%
Dec-17F
10.9%
17.6%
17.3%
(0.021)
0.15
7.28
13.7%
50%
42.79
39.74
79.48
14.6%
10.2%
10.4%
Dec-13A
N/A
0.3
N/A
N/A
235.6
N/A
N/A
Dec-14A
N/A
0.3
N/A
N/A
322.8
N/A
N/A
Dec-15F
N/A
0.3
N/A
N/A
336.0
N/A
N/A
Dec-16F
N/A
0.3
N/A
N/A
349.2
N/A
N/A
Dec-17F
N/A
0.3
N/A
N/A
362.4
N/A
N/A
Key Ratios
Revenue Growth
BVPS (S$)
Effective Tax Rate
Inventory Days
ROIC (%)
ROCE (%)
Key Drivers
Revenue Per Patient Bed (S$)
Beds Opened (units)
213
Company Note
Singapore
Raffles Medical Group
HOLD (no change)
A proxy for China healthcare
Current price:
Target price:
Previous target:
Up/downside:
S$4.24
S$4.67
S$4.67
10.2%
Reuters:
Bloomberg:
Market cap:
RAFG.SI
RFMD SP
US$1,725m
S$2,437m
US$1.69m
S$2.37m
574.3m
47.7%

Current shares o/s
Free float:
No change.
New capacity coming on stream: 1) Holland Village in 1Q16, 2) hospital extension

in 2Q17, and 3) Shanghai hospital in mid-2018.
Negative impact of slowing medical tourism started to show in 2015. A slowing

Indonesian economy and weak rupiah do not bode well for medical tourism.
A more measured pace of topline growth and margin pressure as the group
increases headcount for its expansion projects will likely be a drag on earnings.
Maintain Hold with a SOP-based target price of S$4.67. We prefer IHH in the
hospital space.
Holland Village will provide healthcare and rental revenue in 1Q16

Raffles Holland Village, a 5-storey commercial building, is slated for completion in 1Q16.
RFMD will utilise 9k sq ft of the 65k sq ft total GFA (~20% of estimated NLA) for the
expansion of its medical and specialist services, and lease the remaining space to
retailers and other food and beverage (F&B) tenants. The biggest positive is the
immediate rental income, although the medical centre may be a drag on earnings until it
achieves operating leverage.
Hospital extension in Singapore to be completed in 2Q17

Price Close
4.70
124.7
4.20
106.9
3.70
3
89.0
Vol m
1
Dec-14
Mar-15
Jun-15
Sep-15
Source: Bloomberg
Price performance
Absolute (%)
Relative (%)
1M
-0.9
3.6
3M
-3.6
-3.3
12M
8.7
21.5
The hospital extension (S$310m cost, ~40% paid) will add 220k sq ft (+73%) of space to
its existing hospital wing. This is expected to underpin topline growth and improve its
hospital margins as the group is better able to allocate facilities and wards across the old
and new wings. Management sees this as the runway for the next 10 years. The
dampener here is waning medical tourism numbers (medical tourists typically account
for 1/3 of total patient load), exacerbated by the weakening ASEAN currencies.
Shanghai hospital will be the groups biggest overseas venture

Expansion into China has been a theme across hospital groups in 2015, and is justifiably
so after 1) the liberalisation of the Chinese healthcare space, 2) its large population
base, and 3) ageing population. While there are obvious long-term prospects, it remains
unchartered territory. The total development cost for RFMDs 400-bed hospital (70:30
JV) is Rmb800m, which is likely to be funded by equity (1/3) and debt (2/3). Completion
is slated for mid-2018.
Near-term margin pressure

Given the groups expansion pipeline and slowdown in medical tourism (medical tourists
typically have higher intensity), there could be some pressure on margins in FY16-17,
especially as the demand for nurses in Singapore remains high. In the longer term, a
ramp-up in capacity should improve operating leverage.
Minimal financial contribution from recent acquisitions

In 3Q15, RFMD 1) opened a 5.4k sq ft medical centre in Osaka, Japan via a 51% JV
(effective stake of 40.8%), and 2) acquired International SOS for US$24.5m (55%
stake). International SOS operates a total of 10 clinics in China (6 clinics), Vietnam (3),
and Cambodia (1). We do not expect any meaningful financial contribution from these
two ventures and view the Chinese clinics as providing hub and spoke patient referral
for the eventual completion of its Shanghai hospital.
[X]
Financial Summary
Analysts
Jonathan SEOW
T (65) 6210 8671
Kenneth NG, CFA
T (65) 6210 8610
Revenue (S$m)
Net Profit (S$m)
Core EPS (S$)
Core EPS Growth
FD Core P/E (x)
DPS (S$)
Dividend Yield
EV/EBITDA (x)
P/FCFE (x)
Net Gearing
P/BV (x)
ROE
Dec-13A
341.0
78.3
84.89
0.11
11.3%
38.43
0.050
1.18%
26.48
13.93
(55.1%)
4.97
14.1%
Dec-14A
374.6
85.7
67.64
0.12
4.9%
36.67
0.055
1.30%
26.00
NA
(26.6%)
4.44
12.8%
Dec-15F
405.8
91.3
67.77
0.12
0.0%
36.37
0.055
1.30%
26.11
NA
(9.1%)
4.23
11.9%
0%
0.96
Dec-16F
461.1
103.7
77.41
0.13
16.6%
31.45
0.055
1.30%
23.53
NA
0.8%
3.92
12.9%
0%
0.97
Dec-17F
522.6
118.1
85.84
0.15
10.9%
28.37
0.055
1.30%
20.62
64.20
(0.2%)
3.61
13.2%
0%
0.93

Powered by
EFA
BY THE NUMBERS
Share price info

Share px perf. (%)
1M
3M
Relative
3.6
-3.3
Absolute
-0.9
-3.6
Major shareholders
12M
21.5
8.7
% held
Raffles Medical Holdings Pte Ltd
38.3
Loo Choon Yong
10.0
Aberdeen
5.0
P/BV vs ROE
6.00
18.00%
5.00
15.00%
4.00
12.00%
3.00
9.00%
2.00
6.00%
1.00
3.00%
0.00
0.00%
Growth
40.0
35.0
30.0
25.0
20.0
15.0
10.0
5.0
0.0
60%
49%
38%
26%
15%
4%
-8%
-19%
-30%
ROE (rhs)
Profit & Loss

(S$m)
Total Net Revenues
Gross Profit
Operating EBITDA
Operating EBIT
Exceptional Items
Pre-tax Profit
Taxation
Profit After Tax
Minority Interests
Preferred Dividends
Net Profit
Dec-13A
341.0
341.0
78.3
(8.3)
70.0
0.9
0.0
24.3
95.2
Dec-14A
374.6
374.6
85.7
(9.6)
76.1
1.0
0.0
4.2
81.3
Dec-15F
405.8
405.8
91.3
(12.1)
79.2
1.0
0.0
1.4
81.5
Dec-16F
461.1
461.1
103.7
(13.2)
90.5
1.0
0.0
0.0
91.5
Dec-17F
522.6
522.6
118.1
(17.7)
100.4
1.0
0.0
0.0
101.4
95.2
(9.9)
81.3
(13.3)
81.5
(13.5)
91.5
(13.7)
101.4
(15.2)
85.3
(0.4)
68.0
(0.3)
68.1
(0.3)
77.7
(0.3)
86.2
(0.3)
84.9
60.6
60.6
67.6
64.6
64.6
67.8
66.4
66.4
77.4
77.4
77.4
85.8
85.8
85.8
Cash Flow
(S$m)
EBITDA
Tax Paid
Capex
Shares Repurchased
Dividends Paid
Preferred Dividends
Dec-13A
78.3
Dec-14A
85.7
Dec-15F
91.3
Dec-16F
103.7
Dec-17F
118.1
4.1
0.3
13.1
(2.2)
3.7
3.0
(0.0)
(10.4)
71.2
(8.2)
4.6
0.0
(10.0)
93.5
(17.7)
1.4
1.0
(13.5)
78.0
(38.0)
0.0
1.0
(13.7)
94.6
(88.0)
0.0
1.0
(15.2)
107.9
(30.0)
119.3
111.2
(15.2)
6.1
(188.3)
(206.0)
1.4
7.8
(100.0)
(138.0)
(0.4)
0.0
(32.0)
(120.0)
0.0
0.0
(40.0)
(70.0)
0.0
0.0
(10.0)
(12.6)
(31.6)
(31.6)
(31.6)
(19.0)
163.4
167.2
182.4
(3.3)
(115.8)
(111.1)
(112.4)
(32.0)
(91.9)
(60.4)
(59.9)
(31.6)
(56.9)
(25.4)
(25.3)
(31.6)
6.3
37.9
38.0
215
BY THE NUMBERS
Balance Sheet
(S$m)
Total Debtors
Inventories
Fixed Assets
Total Investments
Intangible Assets
Short-term Debt
Total Creditors
Total Provisions
Total Liabilities
Minority Interests
Total Equity
Dec-13A
265.9
44.2
9.1
0.0
319.2
153.7
100.4
0.2
0.0
254.2
4.8
Dec-14A
150.2
37.0
8.5
0.0
195.7
228.2
228.3
0.2
2.7
459.4
6.4
Dec-15F
58.2
44.5
9.8
0.0
112.5
254.1
294.3
0.2
36.7
585.2
6.0
Dec-16F
1.3
50.5
11.1
0.0
62.9
328.8
326.3
0.2
36.7
692.0
6.0
Dec-17F
7.6
57.3
12.6
0.0
77.5
341.1
366.3
0.2
36.7
744.3
6.0
72.7
20.1
97.5
0.0
74.5
24.0
104.9
0.0
81.1
24.0
111.1
0.0
92.1
24.0
122.1
0.0
104.4
24.0
134.4
0.0
0.0
0.0
2.1
99.6
472.5
1.3
473.8
6.9
6.9
3.0
114.8
538.8
1.5
540.3
6.9
6.9
3.0
121.0
575.0
1.8
576.8
6.9
6.9
3.0
132.0
620.8
2.1
622.9
6.9
6.9
3.0
144.3
675.1
2.4
677.5
Dec-13A
9.4%
11.4%
23.0%
0.47
0.85
1,428
10.4%
32.6%
44.10
N/A
N/A
51.0%
15.9%
15.8%
Dec-14A
9.9%
9.6%
22.9%
0.25
0.96
1,312
16.4%
45.9%
39.55
N/A
N/A
55.2%
15.0%
10.9%
Dec-15F
8.3%
6.5%
22.5%
0.09
1.00
1,584
16.5%
46.6%
36.62
N/A
N/A
36.9%
14.1%
10.0%
Dec-16F
13.6%
13.6%
22.5%
(0.01)
1.08
1,810
15.0%
40.8%
37.71
N/A
N/A
31.3%
15.0%
10.6%
Dec-17F
13.3%
13.8%
22.6%
0.00
1.18
2,008
15.0%
36.8%
37.65
N/A
N/A
26.8%
15.4%
10.8%
Dec-13A
N/A
N/A
60.0%
N/A
180.0
N/A
N/A
Dec-14A
N/A
N/A
65.0%
N/A
190.0
N/A
N/A
Dec-15F
N/A
N/A
68.0%
N/A
200.0
N/A
N/A
Dec-16F
N/A
N/A
68.0%
N/A
220.0
N/A
N/A
Dec-17F
N/A
N/A
68.0%
N/A
240.0
N/A
N/A
Key Ratios
Revenue Growth
BVPS (S$)
Effective Tax Rate
Inventory Days
ROIC (%)
ROCE (%)
Key Drivers
Revenue Per Patient Bed (S$)
Beds Opened (units)
216
Company Note
Singapore
Religare Health Trust
HOLD (no change)
Twin engines of growth
Current price:
Target price:
Previous target:
Up/downside:
S$0.99
S$1.06
S$1.06
7.6%
Reuters:
Bloomberg:
Market cap:
RELI.SI
RHT SP
US$556.3m
S$785.9m
US$0.51m
S$0.72m
790.0m
72.0%

Current shares o/s
Free float:
110.7
0.900
105.1
0.800
99.6
0.700
8
6
4
2
94.0
Vol m
116.2
1.000
Mar-15
Jun-15
Sep-15
Source: Bloomberg
Price performance
Absolute (%)
Relative (%)
High portfolio occupancy of 80% and robust ARPOB to underpin earnings.

Development and AEI activities to drive near-term growth.
Acquisition of new land should expand Mohali operations in the longer run.
Maintain Hold with DDM-backed target price of S$1.06.
Long WALE provides income visibility

RHTs portfolio comprises 12 clinical establishments, four greenfield projects and two
operating hospitals, with a total operating capacity of 2,644 beds and that are valued at
S$991m. RHTs properties have a long portfolio WALE that averages 12 years with the
operator. This provides the trust with good earnings visibility.
Steadily growing in 2QFY16
1.100
Dec-14
Long portfolio WALE to provide earnings visibility.
In 2QFY16, portfolio occupancy averaged a higher 80% (vs. 74% a year ago) while
ARPOB grew 2.2% yoy. At the same time, the number of operational bed capacity rose
3.7% to 2,644. This helped to underpin revenue growth of 10% to S$35.6m while net
service fee and hospital income improved a better 6.5% yoy. At the bottomline,
distributable income rose a higher 8.8% yoy, thanks to a more favourable Rs/S$
exchange rate of 50.27.
No change.
Price Close
1M
-4.8
-0.3
3M
7.1
7.4
12M
-1.0
11.8
Development activities to drive growth

RHT has a number of development activities and AEIs planned that will bear fruit over
the next two years. These include adding a total of 150 beds for the Jaipur, Mulund and
Nagarbhavi CE, at a capex cost of S$5.7m. In 2017, the addition of 142 beds at Amritsar
and Noida CE, and the opening of the Ludhiana Greenfield and BG Road Brownfield CE
with a total capex of S$56.4m, should further boost bed capacity. When completed, we
expect these developments to propel double-digit fee income growth in rupee terms.
Expanding Mohali operations

The trust has recently won the bid for a piece of freehold land slated for hospital use
offered by the Greater Mohali Area Development Authority via a public auction for Rs73
crores (S$15.7m). This will enable RHT to expand the capacity of its existing Mohali CE
by another 500 beds vs. 355 units at present. This should allow the trust to further
extend its income visibility. We have not factored in any impact from this development,
as no timeline nor projected capex cost has been indicated as yet,
Maintain Hold
We like RHTs growth profile and healthy balance sheet with a gearing of 23.9%
(estimated including the latest Mohali acquisition). However, its projected FY16 DPU
yield of 7.9% is in line with the S-REIT average. Hence, we maintain our Hold rating with
a DDM-based target price of S$1.06.
[X]
Financial Summary
Analyst
LOCK Mun Yee
T (65) 6210 8606

Net Profit (S$m)
Core EPS (S$)
Core EPS Growth
FD Core P/E (x)
DPS (S$)
Dividend Yield
Asset Leverage
BVPS (S$)
P/BV (x)
Recurring ROE
Mar-14A
108.5
77.4
41.47
46.69
0.053
NA
18.49
0.082
8.31%
6.7%
0.89
1.10
5.92%
Mar-15A
136.4
92.2
37.42
58.17
0.052
(1.7%)
18.81
0.073
7.43%
11.2%
0.97
1.02
5.63%
Mar-16F
140.1
94.7
45.63
62.12
0.057
9.4%
17.19
0.078
7.92%
15.9%
0.95
1.04
5.98%
0.99
Mar-17F
165.8
112.1
59.02
70.37
0.074
29.0%
13.34
0.088
8.94%
16.3%
0.93
1.05
7.85%
1.00
Mar-18F
180.7
122.1
66.92
78.35
0.083
13.0%
11.80
0.093
9.43%
16.3%
0.92
1.07
8.98%
0.97
Powered by
EFA
BY THE NUMBERS
Share price info

Share px perf. (%)
1M
3M
Relative
-0.3
7.4
Absolute
-4.8
7.1
Major shareholders
Fortis Healthcare
Mitsubishi UFJ Financial Group
12M
11.8
-1.0
% held
28.0
6.2
1.200
18.0%
1.000
15.0%
0.800
12.0%
0.600
9.0%
0.400
6.0%
0.200
3.0%
0.000
0.0%
0.100
0.090
0.080
0.070
0.060
0.050
0.040
0.030
0.020
0.010
0.000
DPS (lhs)
10.0%
9.0%
8.0%
7.0%
6.0%
5.0%
4.0%
3.0%
2.0%
1.0%
0.0%
Profit & Loss

(S$m)
Rental Revenues
Other Revenues
Net Property Income
Management Fees
Trustee's Fees
EBITDA
EBIT
Net Interest Income
Associates' Profit
Exceptional Items
Pre-tax Profit
Taxation
Minority Interests
Preferred Dividends
Net Profit
Mar-14A
108.5
0.0
108.5
(31.2)
77.4
0.0
(5.2)
(0.9)
0.0
71.2
(12.7)
58.5
(1.6)
Mar-15A
136.4
0.0
136.4
(44.2)
92.2
0.0
(6.7)
(3.4)
0.0
82.2
(13.9)
68.3
(5.4)
Mar-16F
140.1
0.0
140.1
(45.4)
94.7
0.0
(6.2)
(1.3)
0.0
87.2
(13.4)
73.8
(8.4)
Mar-17F
165.8
0.0
165.8
(53.7)
112.1
0.0
(6.7)
(1.3)
0.0
104.1
(13.4)
90.7
(8.2)
Mar-18F
180.7
0.0
180.7
(58.5)
122.1
0.0
(6.9)
(1.3)
0.0
114.0
(13.4)
100.6
(8.1)
0.0
(0.8)
56.2
(14.7)
0.0
0.0
41.5
46.7
0.0
(6.2)
56.7
(19.3)
0.0
0.0
37.4
58.2
0.0
0.0
65.4
(19.8)
0.0
0.0
45.6
62.1
0.0
0.0
82.5
(23.4)
0.0
0.0
59.0
70.4
0.0
0.0
92.5
(25.5)
0.0
0.0
66.9
78.3
Mar-14A
56.16
14.26
(19.32)
(19.35)
3.66
35.42
0.00
(4.60)
8.60
4.00
(0.89)
0.00
(43.18)
(1.97)
(46.04)
(6.62)
39.42
36.56
Mar-15A
56.72
19.28
(2.69)
(20.45)
2.84
55.69
0.00
(68.55)
5.37
(63.18)
58.49
0.00
(52.24)
(3.09)
3.16
(4.33)
(7.49)
47.91
Mar-16F
65.44
21.74
9.26
(19.82)
0.00
76.63
Mar-17F
82.47
21.67
2.97
(23.45)
0.00
83.67
Mar-18F
92.47
21.52
1.72
(25.55)
0.00
90.15
(55.54)
0.08
(55.46)
61.89
3.37
(62.12)
(8.46)
(5.32)
15.86
21.17
74.61
(3.86)
0.40
(3.46)
3.96
2.67
(70.37)
(8.64)
(72.38)
7.83
80.21
75.53
0.00
0.56
0.56
0.10
2.75
(74.43)
(8.64)
(80.22)
10.49
90.71
82.17
Cash Flow
(S$m)
Pre-tax Profit
Tax Paid
Others
Capex
Dividends Paid
218
BY THE NUMBERS
Balance Sheet
(S$m)
Total Investments
Intangible Assets
Inventories
Trade Debtors
Trade Creditors
Short-term Debt
Minority Interests
Total Equity
Mar-14A
0
136
723
858
8
0
22
70
100
6
3
79
87
62
105
166
705
0
0
705
Mar-15A
0
141
885
1,026
4
0
25
69
98
7
62
88
158
64
133
197
769
0
0
769
Mar-16F
0
141
927
1,068
20
0
25
69
114
16
8
88
113
180
133
313
756
0
0
756
Mar-17F
0
141
918
1,058
28
0
25
69
122
19
9
88
116
183
133
317
747
0
0
747
Mar-18F
0
141
904
1,045
38
0
25
69
132
21
9
88
118
183
133
317
743
0
0
743
Mar-14A
119%
115%
71.3%
131%
22.99
26.2%
113%
1.15
1.15
0.09
4.32%
Mar-15A
26%
19%
67.6%
(11%)
11.23
34.0%
155%
0.62
0.62
0.03
3.59%
Mar-16F
3%
3%
67.6%
7%
8.73
30.3%
136%
1.01
1.01
0.18
3.96%
Mar-17F
18%
18%
67.6%
13%
10.50
28.4%
119%
1.05
1.05
0.24
5.00%
Mar-18F
9%
9%
67.6%
5%
11.64
27.6%
117%
1.12
1.12
0.33
5.68%
Mar-14A
N/A
N/A
N/A
N/A
77.3%
0.7
N/A
Mar-15A
N/A
N/A
N/A
N/A
75.3%
0.8
N/A
Mar-16F
N/A
N/A
N/A
N/A
75.1%
0.9
N/A
Mar-17F
N/A
N/A
N/A
N/A
73.1%
0.9
N/A
Mar-18F
N/A
N/A
N/A
N/A
74.1%
0.8
N/A
Key Ratios
NPI Growth
DPS Growth
Effective Tax Rate
Current Ratio
Quick Ratio
Cash Ratio
Key Drivers
RevPAR (S$)
Occupancy (%)
219
Rubber GlovesSingaporeEquity researchDecember 9, 2015
Company Note
Singapore
Riverstone Holdings
HOLD (no change)
Expansion is on track
Current price:
Target price:
Previous target:
Up/downside:
S$2.20
S$2.15
S$2.15
-2.4%
Reuters:
Bloomberg:
Market cap:
RVHL.SI
RSTON SP
US$577.0m
S$815.2m
US$0.39m
S$0.55m
370.5m
33.2%

Current shares o/s
Free float:
No change.
We expect Riverstones topline to rise by a 3-year CAGR of 17% in FY16-18, driven

by capacity expansion from 5.2bn pieces p.a. to 8.2bn pieces by FY18.
The phase II expansions 1bn pieces p.a. has been fully taken up by new customer
orders and another 1bn pieces from phase III are slated to come on stream in 3Q16.
We expect sales expansion in FY16-18 to be mainly led by the healthcare segment.

Stiff competition is a key risk and may lead to GPM reversion in FY16-18.
Maintain Hold with a target price of S$2.15, based on 17.5x CY17 core P/E.
Growing topline driven by capacity expansion

We expect Riverstones topline to expand by a 3-year CAGR of 17% in FY16-18, mainly
driven by production capacity expansion. To recap, Riverstone is undergoing a multiyear programme to expand its rubber glove production capacity. The group plans to
expand its production capacity in phases, adding capacity of 1bn pieces per year during
FY14-18, towards an eventual total capacity of 8.2bn pieces by end-FY18.
Phase II capacity fully taken up; launching phase III in FY16
Price Close
Riverstones phase II capacity expansion of 1bn pieces was completed in Nov 15,
raising the groups total production capacity to 5.2bn pieces p.a. (FY14: 4.2bn pieces).
We understand that the phase II capacity has been fully taken up by new customer
orders. There have also been indications of commitment for phase III capacity of another
1bn pieces which management expects to complete by 3Q16.
330
2.20
268
1.70
205
Faster sales expansion of healthcare gloves
1.20
143
0.70
4
3
2
1
80
We expect revenue growth to be mainly led by the more generic healthcare glove
segment. In terms of dollar value, cleanroom gloves formed c.40% of sales in 3Q15
while healthcare gloves comprised c.60% of sales in the same period (FY14: c.50%
each). We expect c.10% yoy sales growth for cleanroom gloves and 17-27% yoy growth
for healthcare gloves in FY16-18, driven by increasing demand and supported by
expanded capacity.
Vol m
2.70
Dec-14
Mar-15
Jun-15
Sep-15
Source: Bloomberg
Price performance
Absolute (%)
Relative (%)
1M
2.8
7.3
3M
33.3
33.6
12M
128.0
140.8
GPM is at a 5-year high, reversion is likely in FY16-18

Fueled by favourable FX and benign raw material prices, Riverstones GPM surged to a
5-year high of 32% in 3Q15 (3Q14: 26%). We deem the high GPM unsustainable as the
group may have to surrender part, if not all, of the benefits from favourable FX and low
raw material prices to end customers due to keen competition. Our forecasts have
factored in a gradual GPM reversion from 31% in FY15 to 27.6% in FY18.
Maintain Hold, with a target price of S$2.15

We maintain our Hold rating with a target price of S$2.15, based on 17.5x CY17 core
P/E (pegging to Malaysia peer average) While we continue to like Riverstone for its
leading 60% market share in the niche cleanroom segment and its meaningful capacity
expansion ahead, we believe that the positives have been priced in. Competition is a
key risk.
[X]
Financial Summary
Analysts
Roy CHEN
T (65) 6210 8685
E roy.chen@cimb.com
William TNG, CFA
T (65) 6210 8676
Revenue (RMm)
Operating EBITDA (RMm)
Net Profit (RMm)
Core EPS (RM)
Core EPS Growth
FD Core P/E (x)
DPS (RM)
Dividend Yield
EV/EBITDA (x)
P/FCFE (x)
Net Gearing
P/BV (x)
ROE
Dec-13A
357.9
87.0
54.0
0.14
17.1%
47.83
0.07
1.02%
26.31
52.57
(35.3%)
7.62
17.8%
Dec-14A
399.3
95.4
66.6
0.16
9.3%
42.69
0.07
1.04%
24.94
NA
(21.4%)
6.62
16.6%
Dec-15F
577.9
161.0
112.5
0.28
77.0%
24.12
0.15
2.25%
14.60
55.78
(23.1%)
5.24
24.3%
0%
0.96
Dec-16F
714.3
195.0
135.1
0.33
21.5%
19.85
0.17
2.49%
11.84
37.17
(25.8%)
4.25
23.6%
0%
0.99
Dec-17F
822.3
216.2
147.8
0.37
10.3%
18.00
0.18
2.72%
10.59
28.13
(25.8%)
3.73
22.0%
0%
0.95
Powered by
EFA
BY THE NUMBERS
Share price info

Share px perf. (%)
Relative
Absolute
Major shareholders
1M
7.3
2.8
3M
33.6
33.3
12M
140.8
128.0
% held
Wong Teek Son
50.8
Lee Wai Keong
11.7
Wong Teck Choon
4.0
P/BV vs ROE

Growth
6.00
30.0%
25.0
100%
5.00
25.0%
20.0
72%
4.00
20.0%
15.0
44%
3.00
15.0%
2.00
10.0%
10.0
16%
1.00
5.0%
5.0
-12%
0.00
0.0%
0.0
-40%
ROE (rhs)
Profit & Loss

(RMm)
Total Net Revenues
Gross Profit
Operating EBITDA
Operating EBIT
Exceptional Items
Pre-tax Profit
Taxation
Profit After Tax
Minority Interests
Preferred Dividends
Net Profit
Dec-13A
357.9
97.8
87.0
(19.0)
68.0
0.7
0.0
0.0
68.6
Dec-14A
399.3
108.9
95.4
(19.4)
76.0
0.8
0.0
0.0
76.8
Dec-15F
577.9
179.1
161.0
(25.7)
135.3
0.6
0.0
0.0
135.9
Dec-16F
714.3
213.5
195.0
(30.5)
164.5
0.6
0.0
0.0
165.2
Dec-17F
822.3
234.1
216.2
(34.8)
181.4
0.7
0.0
0.0
182.1
68.6
(14.6)
76.8
(10.2)
135.9
(23.5)
165.2
(30.0)
182.1
(34.3)
54.0
66.6
112.5
135.1
147.8
54.0
51.5
51.5
66.6
57.6
57.6
112.5
102.0
102.0
135.1
123.9
123.9
147.8
136.6
136.6
Cash Flow
(RMm)
EBITDA
Tax Paid
Capex
Shares Repurchased
Dividends Paid
Preferred Dividends
Dec-13A
87.0
Dec-14A
95.4
Dec-15F
161.0
Dec-16F
195.0
Dec-17F
216.2
(2.1)
(25.2)
(19.1)
(24.5)
(20.2)
1.0
0.0
0.7
(10.3)
76.2
(29.5)
2.3
0.0
0.8
(14.8)
58.5
(73.7)
0.0
0.0
0.6
(23.5)
119.1
(75.0)
0.0
0.0
0.6
(30.0)
141.2
(75.0)
0.0
0.0
0.7
(34.3)
162.4
(75.0)
0.1
(29.4)
0.0
31.0
(0.7)
(22.5)
0.2
(73.5)
0.0
0.0
0.0
(25.4)
0.0
(75.0)
0.0
0.0
0.0
(25.4)
0.0
(75.0)
0.0
0.0
0.0
(25.8)
0.0
(75.0)
0.0
0.0
0.0
(67.8)
0.0
7.9
54.7
46.8
46.8
1.0
(24.4)
(39.4)
(15.0)
(15.0)
0.0
(25.4)
18.7
44.1
44.1
0.0
(25.8)
40.4
66.2
66.2
0.0
(67.8)
19.7
87.4
87.4
221
BY THE NUMBERS
Balance Sheet
(RMm)
Total Debtors
Inventories
Fixed Assets
Total Investments
Intangible Assets
Short-term Debt
Total Creditors
Total Provisions
Total Liabilities
Minority Interests
Total Equity
Dec-13A
114.0
64.1
35.7
0.9
214.7
153.4
0.0
0.0
12.4
165.8
0.0
Dec-14A
79.4
88.2
42.1
0.3
210.1
227.6
0.0
0.0
0.0
227.6
0.0
Dec-15F
108.4
115.6
54.6
0.3
279.0
276.9
0.0
0.0
0.0
276.9
0.0
Dec-16F
149.6
142.9
68.6
0.3
361.4
321.4
0.0
0.0
0.0
321.4
0.0
Dec-17F
170.1
164.5
80.6
0.3
415.5
361.6
0.0
0.0
0.0
361.6
0.0
39.3
5.6
44.9
0.0
50.4
5.7
56.1
0.0
71.2
5.7
76.9
0.0
88.1
5.7
93.7
0.0
101.4
5.7
107.1
0.0
0.0
0.0
13.0
57.8
322.7
0.0
322.7
0.0
0.0
10.0
66.1
371.5
0.0
371.6
0.0
0.0
10.0
86.9
468.9
0.0
468.9
0.0
0.0
10.0
103.7
579.1
0.0
579.1
0.0
0.0
10.0
117.0
660.0
0.0
660.0
Dec-13A
15.5%
35.8%
24.3%
0.31
0.87
N/A
21.3%
46.7%
61.49
46.35
61.18
27.8%
22.8%
15.3%
Dec-14A
11.6%
9.7%
23.9%
0.21
1.00
N/A
13.2%
38.4%
68.21
48.87
56.37
28.5%
21.4%
16.1%
Dec-15F
44.7%
68.8%
27.9%
0.29
1.27
N/A
17.3%
49.1%
62.39
44.28
55.70
37.2%
31.6%
22.5%
Dec-16F
23.6%
21.1%
27.3%
0.40
1.56
N/A
18.2%
45.3%
63.49
45.02
58.21
36.9%
30.9%
21.7%
Dec-17F
15.1%
10.9%
26.3%
0.46
1.78
N/A
18.8%
45.2%
65.41
46.29
58.78
34.3%
28.9%
20.2%
Dec-13A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
Dec-14A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
Dec-15F
N/A
21.7%
N/A
N/A
34.1%
N/A
N/A
N/A
Dec-16F
N/A
10.0%
N/A
N/A
27.3%
N/A
N/A
N/A
Dec-17F
N/A
10.0%
N/A
N/A
21.2%
N/A
N/A
N/A
Key Ratios
Revenue Growth
BVPS (RM)
Effective Tax Rate
Inventory Days
ROIC (%)
ROCE (%)
Key Drivers
Unit raw mat ASP (%chg,2ndary)
222
Tech Manufacturing ServicesSingaporeEquity researchDecember 9, 2015
Company Note
Singapore
Sarine Technologies Ltd
HOLD (no change)
Getting back its shine in 2016?
Current price:
Target price:
Previous target:
Up/downside:
S$1.34
S$1.77
S$1.77
32.8%
Reuters:
Bloomberg:
Market cap:
SARI.SI
SARINE SP
US$329.8m
S$465.9m
US$0.33m
S$0.47m
349.1m
58.5%

Current shares o/s
Free float:
Downside risks priced in.

Normalcy expected in 2016.
Full throttle on efforts to develop third profit engine.
Only viable supplier in town, with no significant competitor.
Maintain Hold. Investors unlikely to re-rate the stock until greater clarity from 1Q16
earnings.
Woes are well documented

Sarines woes are well understood by now. The company issued two profit warnings in
2015. The three key challenges were 1) disproportionately high rough diamond prices
versus polished diamond prices, 2) high polished diamond inventory levels, resulting in a
cut back in polished diamond production, and 3) continued squeezed working capital
and credit lines of manufacturers.
Expecting normalcy in 2016
No change.
On the demand front, Sarine sees no indications of lower consumer demand for
diamond jewellery from any significant market. The company expects normalcy to return
in 2016 given that polished diamond inventories are expected to be whittled off by early
2016 and that rough diamond pricing will ease further.
Price Close
3.10
105.0
Diamond retailers to be third profit engine
2.60
92.5
2.10
80.0
1.60
67.5
1.10
6
55.0
Sarine Profile, targeted at diamond retailers, has commenced trials with leading brick
and mortar and online retailers in the US and the Far East. Targeted at smaller stones,
Meteor has also been commercially launched. Targeted at non-diamond gemstones,
Allegro will be launched at a service centre in India, with additional service centres in
Israel, South America and Thailand slated for 2016.
Vol m
2
Dec-14
Mar-15
Jun-15
Only viable game in town
Sep-15
Source: Bloomberg
Price performance
Absolute (%)
Relative (%)
1M
-12.5
-8.0
3M
1.5
1.8
12M
-51.5
-38.7
Sarine remains entrenched as the market leader. The company has no new
developments to report on its competitors and the current industry conditions do not
favour new competing product introductions and launches. At the same time, Sarine has
the most complete and compelling solutions for the industry.
Maintain Hold
The companys willingness to exercise some flexibility in its operating expenses and
guidance of lower R&D expense into FY16 will help improve profitability. Our target price
of S$1.77 is perched on 12.5x CY17 earnings.
[X]
Financial Summary
Analyst
William TNG, CFA
T (65) 6210 8676
Revenue (US$m)
Net Profit (US$m)
Core EPS (US$)
Core EPS Growth
FD Core P/E (x)
Price To Sales (x)
DPS (US$)
Dividend Yield
EV/EBITDA (x)
P/FCFE (x)
Net Gearing
P/BV (x)
ROE
Dec-13A
77.67
24.88
0.071
15%
13.6
4.18
0.057
6.08%
8.28
19.58
(49.1%)
5.07
39.4%
Dec-14A
87.70
27.14
0.078
10%
12.3
3.75
0.050
5.29%
7.50
18.54
(57.1%)
4.13
36.9%
Dec-15F
46.83
1.90
0.005
(93%)
173.4
7.04
0.030
3.17%
33.16
21.84
(70.5%)
4.64
2.5%
0%
Dec-16F
80.81
25.44
0.073
1240%
13.0
4.08
0.040
4.23%
7.60
15.79
(69.1%)
3.99
33.1%
0%
Dec-17F
97.11
34.12
0.098
34%
9.7
3.40
0.040
4.23%
5.54
10.43
(72.7%)
3.21
36.8%
0%

Powered by
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BY THE NUMBERS
Share price info

Share px perf. (%)
1M
3M
12M
Relative
-8.0
1.8
-38.7
Absolute
-12.5
1.5
Major shareholders
-51.5
% held
Mondrian Investments
9.2
FIL Limited
8.8
Harel Ehud
7.4
P/BV vs ROE
12.0
45.0%
10.0
37.5%
8.0
30.0%
6.0
22.5%
4.0
15.0%
2.0
7.5%
0.0
0.0%
Growth
400
350
300
250
200
150
100
50
0
1,400%
1,200%
1,000%
800%
600%
400%
200%
0%
-200%
ROE (rhs)
Profit & Loss

Expecting narrower loss in 4Q15
(US$m)
Total Net Revenues
Gross Profit
Operating EBITDA
Operating EBIT
Exceptional Items
Pre-tax Profit
Taxation
Profit After Tax
Minority Interests
Preferred Dividends
Net Profit
Dec-13A
77.67
55.53
35.20
(4.41)
30.79
0.02
0.00
0.00
30.81
Dec-14A
87.70
61.88
37.77
(4.91)
32.86
(0.21)
0.00
0.00
32.65
Dec-15F
46.83
30.18
8.43
(6.25)
2.18
0.10
0.00
0.00
2.28
Dec-16F
80.81
59.48
35.88
(5.41)
30.48
0.10
0.00
0.00
30.58
Dec-17F
97.11
70.91
46.01
(5.10)
40.91
0.10
0.00
0.00
41.01
30.81
(5.93)
32.65
(5.51)
2.28
(0.38)
30.58
(5.14)
41.01
(6.89)
24.88
0.00
27.14
0.00
1.90
0.00
25.44
0.00
34.12
0.00
24.88
24.30
24.30
27.14
27.14
27.14
1.90
1.90
1.90
25.44
25.44
25.44
34.12
34.12
34.12
Cash Flow
Limited capex
(US$m)
EBITDA
Tax Paid
Capex
Shares Repurchased
Dividends Paid
Preferred Dividends
Dec-13A
35.20
Dec-14A
37.77
Dec-15F
8.43
Dec-16F
35.88
Dec-17F
46.01
(8.85)
(1.16)
10.49
(5.78)
(3.41)
1.41
0.23
0.79
(7.45)
21.33
(7.30)
2.80
(0.14)
0.08
(4.96)
34.38
(3.14)
0.00
(0.20)
0.10
0.44
19.26
(1.50)
0.00
0.00
0.10
(5.14)
25.06
(1.50)
0.00
0.00
0.10
(6.89)
35.81
(1.50)
4.10
(1.25)
(4.46)
(12.10)
(1.06)
(16.31)
0.00
(2.69)
(4.19)
0.00
(2.69)
(4.19)
0.00
(2.69)
(4.19)
1.45
0.97
0.00
0.00
0.00
(18.10)
(17.40)
(10.47)
(13.96)
(13.96)
1.48
(15.17)
1.71
16.88
16.88
(1.03)
(17.47)
0.61
18.08
18.40
0.00
(10.47)
4.61
15.07
15.07
0.00
(13.96)
6.92
20.87
20.87
0.00
(13.96)
17.67
31.62
31.62
224
BY THE NUMBERS
Balance Sheet
Net cash balance sheet
(US$m)
Total Debtors
Inventories
Fixed Assets
Total Investments
Intangible Assets
Short-term Debt
Total Creditors
Total Provisions
Total Liabilities
Minority Interests
Total Equity
Dec-13A
33.1
19.6
8.5
0.0
61.2
10.7
0.0
8.4
1.4
20.4
Dec-14A
45.5
16.0
10.1
0.0
71.6
11.5
0.0
6.8
2.2
20.5
Dec-15F
50.1
8.4
5.9
0.0
64.4
9.7
0.0
6.8
2.2
18.6
Dec-16F
57.0
13.1
7.6
0.0
77.7
8.5
0.0
6.8
2.2
17.4
Dec-17F
74.7
15.3
9.3
0.0
99.3
7.5
0.0
6.8
2.2
16.5
13.1
0.8
13.9
11.7
0.6
12.3
10.4
1.4
11.9
11.0
1.4
12.4
11.5
1.4
12.9
0.3
0.3
0.0
14.3
67.3
0.2
0.2
0.0
12.4
79.6
0.2
0.2
0.0
12.0
71.1
0.2
0.2
0.0
12.5
82.5
0.2
0.2
0.0
13.1
102.7
67.3
79.6
71.1
82.5
102.7
Dec-13A
21.8%
26%
45.3%
0.09
0.19
N/A
19.2%
83%
54.52
126.8
44.09
116%
49.9%
33.3%
Dec-14A
12.9%
7%
43.1%
0.13
0.23
N/A
16.9%
64%
61.02
131.6
43.61
71%
44.7%
31.4%
Dec-15F
(46.6%)
(78%)
18.0%
0.14
0.20
N/A
16.8%
551%
77.55
175.4
52.10
5%
2.9%
2.1%
Dec-16F
72.5%
326%
44.4%
0.16
0.24
N/A
16.8%
55%
39.60
116.1
37.49
108%
39.7%
28.5%
Dec-17F
20.2%
28%
47.4%
0.21
0.29
N/A
16.8%
41%
45.80
117.9
38.10
119%
44.2%
32.3%
Dec-13A
N/A
45.8%
N/A
N/A
N/A
12.2%
N/A
N/A
Dec-14A
N/A
35.7%
N/A
N/A
N/A
6.5%
N/A
N/A
Dec-15F
N/A
6.3%
N/A
N/A
N/A
-51.3%
N/A
N/A
Dec-16F
N/A
24.8%
N/A
N/A
N/A
50.0%
N/A
N/A
Dec-17F
N/A
19.8%
N/A
N/A
N/A
10.0%
N/A
N/A
Key Ratios
Revenue growth to resume once
industry conditions normalise
Revenue Growth
BVPS (US$)
Effective Tax Rate
Inventory Days
ROIC (%)
ROCE (%)
Key Drivers
Growth drive by Galaxy
ASP Change (%, Main Product)
Unit sales growth (%, main prod)
No. Of Lines (main Product)
Rev per line (US$, main prod)
ASP chg (%, 2ndary prod)
Unit sales grth (%, 2ndary prod)
No. Of Lines (secondary Product)
Rev per line (US$, 2ndary prod)
225
AirportsSingaporeEquity researchDecember 9, 2015
Company Note
Singapore
SATS Ltd
HOLD (no change)
As good as it gets
Current price:
Target price:
Previous target:
Up/downside:
S$3.80
S$3.98
S$3.98
4.7%
Reuters:
Bloomberg:
Market cap:
SATS.SI
SATS SP
US$2,989m
S$4,222m
US$5.46m
S$7.69m
1,107m
56.0%

Current shares o/s
Free float:
135.8
3.20
113.9
2.70
8
6
4
2
92.0
Vol m
157.6
3.70
Mar-15
Jun-15
Sep-15
Source: Bloomberg
Price performance
Absolute (%)
Relative (%)
1M
-4.5
0.0
Long-term Singapore Changi growth story intact.

The stock is trading at FY17F P/E of 19x, or +1s.d. of its historical valuations, fairly
reflecting the underlying earnings growth of 4-5%in FY17-18F
Margin expansion may be capped

Group EBIT margin improved to 14% in 2Q16 (FY15: 10%), which we attribute it mainly
to the deconsolidation of low-margin food distribution business from SFI to BRF JV.
Historically, the food distribution arm generated EBIT margin of c. 7%. SATS overall
costs dropped by S$36m yoy from S$400m in 2Q15 to S$363m in 2Q16, but we saw an
increase in the amount due from assoc/ JV of S$32m, which could have reflected the
deconsolidation of costs.
Our top-line growth forecast of 4-6% in FY17-18 has captured 1) the short to medium
growth in Singapore Changi Airport volumes, and 2) TFKs turning around as market
share increases and with Deltas new contract. We have also factored in lower licensing
fees at Changi Airport, which is still subject to negotiation with airlines for full passthrough effects. Rising labour cost is a constant challenge, and we believe the
quantitative effects from process automation is a slow process.
4.20
Dec-14
The effects of sharp qoq margin expansion may not repeat post de-consolidating
BRFs costs to JV. EBIT margin is likely, in our view, to be capped at 12-13%.
Underlying growth factored in
No change
Price Close
3M
2.7
3.0
12M
30.6
43.4
Stiff competition in cargo

In the short-term, SATSs cargo volume may also be capped on weakness in Chinas
economy that may affect intra-Asia trade. Its cargo volume handled in 2Q16 shrank 0.2%
qoq 1% yoy to 389.1m tonnes in Singapore. Competition is intensifying for its Hong Kong
cargo associate, Asia Airfreight Terminal (AAT), as Cathay Pacific started its own cargo
terminal in 2014, flooding the market with 2.6m tonnes of additional cargo capacity. AAT also
faces increasing labour costs, as the market is struggling with a labour shortage.
Maintain Hold
The stock has outperformed by 32% in the past 12 months, and we believe the positives
from its volume growth are in the price. Cost transfer to the BRF JV may be a one-off
benefit, and further improvements from its automation process will be gradual. We
maintain our Hold recommendation. Potential re-rating catalysts include earningsaccretive M&As and stronger-than-expected pick up in aviation travel.
[X]
Financial Summary
Analyst
LIM Siew Khee
T (65) 6210 8664
Revenue (S$m)
Net Profit (S$m)
Core EPS (S$)
Core EPS Growth
FD Core P/E (x)
DPS (S$)
Dividend Yield
EV/EBITDA (x)
P/FCFE (x)
Net Gearing
P/BV (x)
ROE
Mar-14A
1,787
248.0
180.4
0.16
(2.6%)
24.15
0.13
3.42%
16.54
46.29
(15.0%)
2.99
12.8%
Mar-15A
1,753
246.2
195.7
0.18
10.5%
21.92
0.14
3.69%
16.15
15.81
(20.1%)
2.92
13.8%
Mar-16F
1,774
294.4
226.3
0.20
14.5%
19.08
0.16
4.31%
13.54
29.81
(18.6%)
2.78
15.3%
0%
1.02
Mar-17F
1,851
307.2
235.3
0.21
4.0%
18.36
0.17
4.48%
13.00
24.26
(17.7%)
2.68
15.3%
0%
0.99
Mar-18F
1,954
324.3
247.7
0.22
5.3%
17.44
0.18
4.71%
12.31
22.50
(17.3%)
2.59
15.5%
0%
0.99

Powered by
EFA
BY THE NUMBERS
Share price info

Share px perf. (%)
Relative
Absolute
Major shareholders
Temasek Holdings
1M
0.0
-4.5
3M
3.0
2.7
12M
43.4
30.6
P/BV vs ROE
3.50
18.00%
3.00
15.43%
2.50
12.86%

Growth
25.0
25.0%
20.0
17.0%
9.0%
% held
2.00
10.29%
15.0
44.0
1.50
7.71%
10.0
1.0%
1.00
5.14%
5.0
-7.0%
0.0
-15.0%
0.50
2.57%
0.00
0.00%
ROE (rhs)
Profit & Loss

(S$m)
Total Net Revenues
Gross Profit
Operating EBITDA
Operating EBIT
Exceptional Items
Pre-tax Profit
Taxation
Profit After Tax
Minority Interests
Preferred Dividends
Net Profit
Mar-14A
1,787
619
248
(77)
171
0
47
0
218
(3)
216
(33)
Mar-15A
1,753
603
246
(68)
178
1
48
0
227
(2)
225
(34)
Mar-16F
1,774
623
294
(72)
222
1
52
0
275
0
275
(47)
Mar-17F
1,851
650
307
(77)
230
1
55
0
286
0
286
(49)
Mar-18F
1,954
686
324
(83)
242
1
58
0
301
0
301
(51)
182
(2)
0
191
5
0
228
(2)
0
237
(2)
0
250
(2)
0
180
180
180
196
198
198
226
226
226
235
235
235
248
248
248
Cash Flow
(S$m)
EBITDA
Tax Paid
Capex
Shares Repurchased
Dividends Paid
Preferred Dividends
Mar-14A
248.0
(47.2)
35.0
Mar-15A
246.2
(48.1)
21.3
Mar-16F
294.4
(51.9)
(34.5)
Mar-17F
307.2
(55.1)
(2.1)
Mar-18F
324.3
(58.4)
(2.8)
50.5
(2.9)
(38.5)
244.9
(57.1)
0.0
(117.7)
27.8
(147.0)
(4.0)
5.8
(1.0)
34.4
0.5
(35.3)
218.0
(61.3)
27.9
0.0
89.9
56.5
(0.5)
0.3
0.2
52.8
(0.2)
(46.7)
214.2
(70.0)
0.0
0.0
0.7
(69.3)
0.0
(0.0)
56.0
(0.1)
(48.6)
257.4
(80.0)
0.0
0.0
0.7
(79.3)
0.0
0.0
59.3
(0.0)
(51.1)
271.3
(80.0)
0.0
0.0
0.7
(79.3)
0.0
0.0
(169.3)
(146.5)
(155.0)
(181.1)
(188.2)
4.9
(162.6)
(64.7)
93.9
100.8
(52.9)
(199.6)
74.9
274.0
275.6
0.0
(155.0)
(10.1)
144.9
146.5
0.0
(181.1)
(3.0)
178.1
179.6
0.0
(188.2)
3.8
192.0
193.6
227
BY THE NUMBERS
Balance Sheet
(S$m)
Total Debtors
Inventories
Fixed Assets
Total Investments
Intangible Assets
Short-term Debt
Total Creditors
Total Provisions
Total Liabilities
Minority Interests
Total Equity
Mar-14A
341
288
46
50
725
568
0
185
542
1,295
18
Mar-15A
411
283
19
81
793
552
0
166
510
1,227
16
Mar-16F
401
286
53
81
820
549
0
166
562
1,276
16
Mar-17F
398
298
56
81
832
551
0
166
617
1,333
16
Mar-18F
401
315
59
81
855
547
0
166
675
1,388
16
267
45
330
97
287
43
346
90
291
43
349
90
303
43
362
90
320
43
379
90
79
176
0
505
1,417
98
1,514
67
156
0
502
1,441
77
1,518
67
156
0
505
1,512
78
1,591
67
156
0
518
1,567
80
1,647
67
156
0
535
1,626
82
1,708
Mar-14A
(1.78%)
(13.0%)
13.9%
0.20
1.27
58.9
15.5%
79.1%
60.08
15.50
78.78
10.8%
10.7%
9.2%
Mar-15A
(1.87%)
(0.7%)
14.0%
0.28
1.30
148.3
15.2%
78.2%
59.34
10.32
88.02
10.8%
11.1%
9.5%
Mar-16F
1.17%
19.6%
16.6%
0.27
1.37
140.8
17.0%
80.0%
58.65
11.43
91.88
14.4%
13.5%
11.1%
Mar-17F
4.34%
4.3%
16.6%
0.26
1.42
145.7
17.0%
80.0%
57.61
16.52
90.25
14.0%
13.5%
11.1%
Mar-18F
5.55%
5.6%
16.6%
0.27
1.47
153.0
17.0%
80.0%
57.29
16.43
89.74
14.1%
13.7%
11.3%
Mar-14A
N/A
N/A
9.0%
N/A
N/A
N/A
-6.8%
Mar-15A
N/A
N/A
-6.0%
N/A
N/A
N/A
1.3%
Mar-16F
N/A
N/A
3.0%
N/A
N/A
N/A
5.6%
Mar-17F
N/A
N/A
4.5%
N/A
N/A
N/A
7.0%
Mar-18F
N/A
N/A
5.0%
N/A
N/A
N/A
7.0%
Key Ratios
Revenue Growth
BVPS (S$)
Effective Tax Rate
Inventory Days
ROIC (%)
ROCE (%)
Key Drivers
(S$)
Int'l Passenger Traffic Growth (%)
Domestic Pax Traffic Growth (%)
International Flight Traffic Growth (%)
Domestic Flight Traffic Growth (%)
Int'l Pax Service Charge
Dom Pax Serv Charge
Unit Meals Produced (% Change)
228
Company Note
Singapore
Sembcorp Industries
ADD (no change)
All eyes on India
Current price:
Target price:
Previous target:
Up/downside:
S$3.03
S$3.85
S$3.85
26.9%
Reuters:
Bloomberg:
Market cap:
SCIL.SI
SCI SP
US$3,829m
S$5,410m
US$11.33m
S$15.96m
1,784m
50.0%

Current shares o/s
Free float:
India will dominate 20% of utilities earnings by 2017 of our forecast with two coalfired plants.
We think the utilities business has been overly discounted, as it is trading at a

2017F P/E of 6x, below its historical average of 7x.
We maintain our Add rating and target price based on SOP valuations. Re-rating
catalysts could come from stronger-than-expected profitability in India and Singapore.
TPCIL in full force in 2016

We expect TPCIL to turn around from losses to contribute about S$25m-30m of profit in
2016, as both unit unit 1 and 2 have been operating above a 90% plant load factor since
Sep 15. India will contribute c. 10% of utilities earnings according to our forecast.
NCCPP on track
The second power plant, NCC Power Projects Limited (NCCPP), is a 1,320MW unit that
will achieve phase 1 completion by 2H16. Given the learning curve encountered in
TPCIL, we deem the targeted completion for NCCPP achievable. SCI is bidding for a
500MW long-term PPA in Andhra Pradesh, securing baseload ahead of the completion
of NCCPPs first unit.

No changes.
Spark spread may remain stable in 2016

Price Close
5.30
116.0
4.80
109.0
4.30
102.0
3.80
95.0
3.30
88.0
2.80
20
15
10
5
81.0
Steep discount for utilities business
Vol m
Dec-14
We expect spark spread to remain stable in 2016 despite a lower vesting contract level
of 20%, as gencos may behave rationally to preserve cash profits. We see potential for
earnings upside in FY16-17, as we have factored in wider losses of S$7m-8m
losses/quarter. However, pending the ongoing restructuring of JAC, there might be a
need for further provision for doubtful debts in 4Q15 and 1Q16.
Mar-15
Jun-15
Sep-15
Source: Bloomberg
Price performance
Absolute (%)
Relative (%)
1M
-13.4
-8.9
3M
-11.2
-10.9
Excluding SMMs contribution to SCIs SOP valuation, its utilities business is trading at
an implied 6x CY17 P/E, below its historical average of 7x forward. It is also trading at
0.6x P/BV or -2 s.d of its historical average, suggesting that market is discounting the
utilities for the potential share price overhang from SMM.
12M
-26.8
-14.0
[X]
Financial Summary
Analyst
LIM Siew Khee
T (65) 6210 8664
Revenue (S$m)
Net Profit (S$m)
Core EPS (S$)
Core EPS Growth
FD Core P/E (x)
DPS (S$)
Dividend Yield
EV/EBITDA (x)
P/FCFE (x)
Net Gearing
P/BV (x)
ROE
Dec-13A
10,798
1,463
820.4
0.46
8.9%
6.56
0.17
5.67%
3.06
7.9
(5.5%)
1.03
16.9%
Dec-14A
10,895
1,436
801.1
0.45
(3.6%)
6.76
0.16
5.31%
5.62
453.1
42.5%
0.96
14.8%
Dec-15F
8,828
1,194
922.5
0.30
(31.6%)
9.95
0.16
5.25%
7.66
NA
50.2%
0.87
9.2%
1.47
Dec-16F
10,037
1,532
626.0
0.35
14.2%
8.71
0.13
4.13%
6.25
8.8
48.3%
0.81
9.7%
0.95
Dec-17F
10,562
1,697
704.0
0.39
12.5%
7.75
0.14
4.65%
5.66
5.6
41.9%
0.76
10.2%
1.03

Powered by
EFA
BY THE NUMBERS
Share price info

Share px perf. (%)
1M
3M
Relative
-8.9
-10.9
Absolute
-13.4
-11.2
Major shareholders
Temasek Holdings
12M
-14.0
-26.8
% held
49.5
P/BV vs ROE
3.00
25.0%
2.50
20.8%
2.00
16.7%
1.50
12.5%
1.00
8.3%
0.50
4.2%
0.00
0.0%
Growth
18.0
16.0
14.0
12.0
10.0
8.0
6.0
4.0
2.0
0.0
30%
21%
12%
3%
-6%
-14%
-23%
-32%
-41%
-50%
ROE (rhs)
Profit & Loss

(S$m)
Total Net Revenues
Gross Profit
Operating EBITDA
Operating EBIT
Exceptional Items
Pre-tax Profit
Taxation
Profit After Tax
Minority Interests
Preferred Dividends
Net Profit
Dec-13A
10,798
1,287
1,463
(303)
1,160
(101)
155
0
1,214
0
1,214
(117)
Dec-14A
10,895
1,415
1,436
(297)
1,139
(51)
158
0
1,246
0
1,246
(162)
Dec-15F
8,828
1,022
1,194
(357)
837
(94)
106
0
849
422
1,271
(145)
Dec-16F
10,037
1,360
1,532
(383)
1,149
(111)
120
0
1,158
0
1,158
(195)
Dec-17F
10,562
1,520
1,697
(399)
1,298
(124)
127
0
1,300
0
1,300
(216)
1,097
(277)
0
1,084
(283)
0
1,127
(204)
0
963
(337)
0
1,084
(380)
0
820
820
820
801
801
801
923
548
548
626
626
626
704
704
704
Cash Flow
(S$m)
EBITDA
Tax Paid
Capex
Shares Repurchased
Dividends Paid
Preferred Dividends
Dec-13A
1,463
141
Dec-14A
1,436
Dec-15F
1,194
Dec-16F
1,532
Dec-17F
1,697
(1,414)
(869)
(206)
(89)
(111)
(195)
1,020
(1,000)
0
0
0
(1,000)
600
0
0
(225)
(124)
(216)
1,267
(800)
0
0
0
(800)
500
0
0
(253)
207
69
(12)
(125)
1,743
(1,189)
41
(296)
(9)
(1,453)
392
3
(49)
(268)
65
59
(119)
27
(1,306)
0
(249)
(31)
(1,587)
1,571
4
(32)
(393)
(94)
(145)
86
(1,200)
0
0
0
(1,200)
900
0
0
(286)
(109)
(31)
260
683
397
(186)
963
(596)
12
(1,497)
0
614
(500)
(214)
(1,012)
0
375
395
620
141
0
247
714
967
602
230
BY THE NUMBERS
Balance Sheet
(S$m)
Total Debtors
Inventories
Fixed Assets
Total Investments
Intangible Assets
Short-term Debt
Total Creditors
Total Provisions
Total Liabilities
Minority Interests
Total Equity
Dec-13A
2,256
1,140
2,241
53
5,689
5,127
2,217
308
412
8,064
414
Dec-14A
1,661
1,200
3,205
64
6,130
7,725
2,413
391
517
11,046
1,086
Dec-15F
1,584
1,236
3,531
64
6,415
8,568
2,519
391
517
11,995
1,086
Dec-16F
1,979
1,405
4,015
64
7,462
9,186
2,639
391
517
12,733
1,086
Dec-17F
2,693
1,479
4,225
64
8,460
9,586
2,766
391
517
13,260
1,086
4,140
347
4,902
1,485
3,774
497
5,357
3,649
3,266
497
4,850
4,549
3,714
497
5,297
5,149
3,908
497
5,491
5,649
364
1,849
473
7,224
5,230
1,300
6,530
419
4,068
519
9,944
5,616
1,616
7,232
419
4,968
519
10,336
6,253
1,820
8,073
419
5,568
519
11,384
6,653
2,158
8,811
419
6,068
519
12,078
7,104
2,538
9,642
Dec-13A
6.0%
5.7%
13.6%
0.20
2.95
9.84
9.6%
37.2%
39.14
79.2
106.0
19.1%
13.7%
8.87%
Dec-14A
0.9%
(1.9%)
13.2%
(1.72)
3.14
16.24
13.0%
36.1%
39.21
104.8
104.7
19.7%
10.9%
7.28%
Dec-15F
(19.0%)
(16.9%)
13.5%
(2.27)
3.50
8.17
11.4%
57.2%
50.36
157.5
122.0
7.9%
6.4%
4.39%
Dec-16F
13.7%
28.3%
15.3%
(2.38)
3.73
9.48
16.8%
36.0%
48.15
159.1
111.4
9.0%
7.8%
5.47%
Dec-17F
5.2%
10.8%
16.1%
(2.26)
3.98
9.62
16.6%
36.0%
49.83
166.3
116.4
9.5%
8.1%
5.66%
Dec-13A
4.7%
24.7%
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
Dec-14A
1.1%
5.6%
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
Dec-15F
3.7%
-27.1%
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
Dec-16F
3.7%
7.1%
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
Dec-17F
0.0%
0.0%
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
Key Ratios
Revenue Growth
BVPS (S$)
Effective Tax Rate
Inventory Days
ROIC (%)
ROCE (%)
Key Drivers
231
Company Note
Singapore
Sembcorp Marine
REDUCE (no change)
When it rains, it pours
Current price:
Target price:
Previous target:
Up/downside:
S$1.82
S$1.88
S$1.88
3.2%
Reuters:
Bloomberg:
Market cap:
SCMN.SI
SMM SP
US$2,691m
S$3,801m
US$3.84m
S$5.41m
2,088m
37.2%

Current shares o/s
Free float:
117.0
3.10
105.8
2.60
94.5
2.10
83.3
1.60
15
72.0
Vol m
Maintain Reduce, with unchanged target price, still based on a CY17F P/E of 11x
Reputation risk affects future orders

SMMs proprietary Baker Marine Pacific Class jack-up rigs are known as one of the
widely accepted industry workhorses, dominating c. 15% of the global drilling rigs. Marco
Polos recent allegation of cracks found on all three legs of the jack-up rig during a round
of testing could be detrimental to its long-term reputation and future orders if the
litigation outcome is in Marco Polos favour.
We expect future order wins to be of lower-margin, involving more specialized turnkey

projects to replace the high-margin commoditized rigs. The S$3bn order wins in 2015
are of lower EBIT margin of high single digits to 10% in our estimate.
Reiterate Reduce
We are keeping our Reduce recommendation, given the uncertainty surrounding the
Sete Brasil contracts (50% of its order book). Our worst-case scenario (all seven units
are cancelled) shows possible 20-30% downside to our FY16-17 net profit estimates.
10
5
Jun-15
SMMs reputation could be at stake, affecting future orders (if rig cycle returns) as
attention is drawn to recent allegation about the quality of its proprietary jack-up legs.
Lower-margin contracts
3.60
Mar-15
Rigbuilding capex will likely remain anemic as the industry faces a supply glut, lower
utilisation and rates over the next two years. We expect operating leverage to be
stretched as SMM struggles to fill up sufficient work for its two mega yards in Singapore
and Brazil. Depreciation had only begun in 2015 for Singapore integrated yard phase 1
(S$900m capex).
No changes.
Dec-14
No re-rating catalysts in sight as SMM struggles with litigation, profit reversals and
more deferral of deliveries in 4Q15 and 1H16.
Negative operating leverage
Price Close
Sep-15
Source: Bloomberg
Price performance
Absolute (%)
Relative (%)
1M
-21.6
-17.1
3M
-22.6
-22.3
12M
-37.5
-24.7
[X]
Financial Summary
Analyst
LIM Siew Khee
T (65) 6210 8664
Revenue (S$m)
Net Profit (S$m)
Core EPS (S$)
Core EPS Growth
FD Core P/E (x)
DPS (S$)
Dividend Yield
EV/EBITDA (x)
P/FCFE (x)
Net Gearing
P/BV (x)
ROE
Dec-13A
5,526
741.7
556.0
0.27
2.6%
6.84
0.13
7.16%
3.45
4.44
(33.1%)
1.42
21.7%
Dec-14A
5,833
817.9
560.1
0.27
0.8%
6.79
0.13
7.14%
5.09
NA
21.2%
1.28
19.9%
Dec-15F
4,251
527.0
223.1
0.11
(57.6%)
16.01
0.06
3.03%
10.95
NA
67.9%
1.23
7.8%
0%
0.76
Dec-16F
4,551
619.4
331.6
0.16
39.7%
11.46
0.08
4.19%
9.61
7.44
68.4%
1.16
10.4%
0%
0.93
Dec-17F
4,821
657.5
356.5
0.17
7.5%
10.66
0.08
4.50%
9.08
8.04
64.5%
1.10
10.6%
0%
0.98

Powered by
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BY THE NUMBERS
Share price info

Share px perf. (%)
1M
3M
12M
Relative
-17.1
-22.3
-24.7
Absolute
-21.6
-22.6
-37.5
Major shareholders
% held
SembCorp Industries
61.0
P/BV vs ROE
5.00
4.50
4.00
3.50
3.00
2.50
2.00
1.50
1.00
0.50
0.00
40.0%
36.0%
32.0%
28.0%
24.0%
20.0%
16.0%
12.0%
8.0%
4.0%
0.0%

Growth
35.0
60%
30.0
40%
25.0
20%
20.0
0%
15.0
-20%
10.0
-40%
5.0
-60%
0.0
Jan-11 Jan-12
-80%
Jan-13 Jan-14 Jan-15 Jan-16
ROE (rhs)
Profit & Loss

(S$m)
Total Net Revenues
Gross Profit
Operating EBITDA
Operating EBIT
Exceptional Items
Pre-tax Profit
Taxation
Profit After Tax
Minority Interests
Preferred Dividends
Net Profit
Dec-13A
5,526
805
742
(97)
644
2
16
3
665
0
665
(77)
Dec-14A
5,833
844
818
(111)
707
(10)
10
0
707
0
707
(106)
Dec-15F
4,251
483
527
(131)
396
(39)
(43)
(17)
297
(17)
279
(44)
Dec-16F
4,551
575
619
(137)
482
(58)
(10)
0
415
0
415
(62)
Dec-17F
4,821
581
658
(143)
515
(69)
0
0
446
0
446
(67)
589
(33)
0
601
(41)
0
235
(12)
0
352
(21)
0
379
(22)
0
556
556
556
560
560
560
223
237
237
332
332
332
357
357
357
Cash Flow
(S$m)
EBITDA
Tax Paid
Capex
Shares Repurchased
Dividends Paid
Preferred Dividends
Dec-13A
742
243
3
(0)
(54)
933
(815)
0
0
0
(815)
738
0
0
(272)
467
585
857
129
Dec-14A
818
Dec-15F
527
Dec-16F
619
Dec-17F
658
(1,267)
(1,128)
(188)
(49)
25
(9)
(83)
(516)
(739)
0
(30)
0
(768)
964
1
(12)
(285)
(39)
(44)
(685)
(739)
0
0
0
(739)
700
0
0
(115)
(58)
(62)
311
(300)
0
0
0
(300)
500
0
0
(159)
(69)
(67)
473
(300)
0
0
0
(300)
300
0
0
(171)
668
(616)
(320)
(1,264)
585
(839)
(724)
(1,374)
341
352
511
79
129
302
473
252
233
BY THE NUMBERS
Balance Sheet
(S$m)
Total Debtors
Inventories
Fixed Assets
Total Investments
Intangible Assets
Short-term Debt
Total Creditors
Total Provisions
Total Liabilities
Minority Interests
Total Equity
Dec-13A
1,695
442
2,084
0
4,221
2,394
553
30
52
3,029
166
Dec-14A
1,079
469
3,005
14
4,567
3,009
561
53
49
3,671
434
Dec-15F
223
1,063
2,952
14
4,252
3,617
518
53
49
4,236
434
Dec-16F
574
1,264
3,161
14
5,014
3,780
508
53
49
4,389
434
Dec-17F
876
1,607
3,080
14
5,577
3,937
508
53
49
4,546
434
1,813
1,551
3,530
600
1,888
1,127
3,449
1,308
1,480
948
2,861
2,008
1,580
1,069
3,083
2,508
1,669
1,192
3,296
2,808
187
787
123
4,441
2,677
132
2,810
220
1,527
130
5,106
2,965
167
3,132
220
2,227
130
5,219
3,090
179
3,269
220
2,727
130
5,941
3,262
199
3,462
220
3,027
130
6,453
3,448
222
3,670
Dec-13A
24.7%
15.8%
13.4%
0.44
1.28
79.81
11.5%
49.0%
30.1
147.5
134.1
57.5%
19.5%
8.99%
Dec-14A
5.6%
10.3%
14.0%
(0.32)
1.42
33.73
15.0%
48.5%
28.5
186.2
131.9
43.2%
16.5%
7.89%
Dec-15F
(27.1%)
(35.6%)
12.4%
(1.06)
1.48
7.96
15.9%
48.0%
65.7
288.5
157.0
11.0%
7.5%
3.48%
Dec-16F
7.1%
17.5%
13.6%
(1.13)
1.56
7.12
15.0%
48.0%
93.6
281.3
135.0
9.1%
8.0%
4.58%
Dec-17F
5.9%
6.2%
13.6%
(1.13)
1.65
6.46
15.0%
48.0%
108.7
268.7
134.5
9.1%
7.7%
4.59%
Dec-13A
12,300
5,000.0
4,845
N/A
N/A
N/A
Dec-14A
11,432
4,200.0
5,210
N/A
N/A
N/A
Dec-15F
11,450
2,800.0
3,722
N/A
N/A
N/A
Dec-16F
9,706
1,800.0
4,023
N/A
N/A
N/A
Dec-17F
7,736
2,500.0
4,180
N/A
N/A
N/A
Key Ratios
Revenue Growth
BVPS (S$)
Effective Tax Rate
Inventory Days
ROIC (%)
ROCE (%)
Key Drivers
Outstanding Orderbook (S$m)
Order Book Wins (S$m)
Order Book Depletion (S$m)
No. Of Ships (unit)
234
Company Note
Singapore
Sheng Siong Group
ADD (no change)
2015 was a bumper year for new stores, 2016?
Current price:
Target price:
Previous target:
Up/downside:
S$0.85
S$0.95
S$0.95
11.6%
Reuters:
Bloomberg:
Market cap:
SHEN.SI
SSG SP
US$904.6m
S$1,278m
US$1.21m
S$1.71m
1,504m
28.0%

Current shares o/s
Free float:
No change.
After two years of zero new stores, SSG secured six stores since Dec 14, adding
~7% to existing GFA. This should drive growth for FY16.
Store growth typically come in spurts and during market downturns when rents
come off. We are hopeful of more new stores in 2016.
With the investment in China capped at S$6m (SSG has net cash of S$126m), risks
are tilted to the upside.
Maintain Add with a target price of S$0.95 (based on 22x CY17 P/E, average 12m
forward). The stock offers attractive yields of 4%.
New stores to drive growth in 2016

In 2014, Sheng Siong saw ~20% earnings growth even without new stores as they
turned their stores into 24-hour stores and reaped efficiency gains from its central
distribution centre. But 2015 was a bumper year for new stores. Since Dec 14, the group
has secured six new stores (+~7% to existing GFA). This should help fuel growth going
into 2016, and we are hopeful the group will be able to continue to secure more stores
next year as it stands to benefit from a greater supply of housing blocks coming on
stream.
Other income to be a feature in 2016, but little visibility thereafter

Price Close
0.900
146.4
0.800
129.3
0.700
112.1
0.600
20
15
10
5
95.0
China investment risks are tilted to the upside
Vol m
Dec-14
Another feature of 2015 has been other income. In 9M15, SSGs other income close to
doubled yoy, and formed 17% of net profit. Other income in 9M15 was supplemented by
1) rental income (37% of other income) from the leasing of excess space at its Tampines
store, 2) government grants (32% of other income), and 3) a one-off advertising event
for suppliers (11% of other income). Apart from the one-off event, other components of
other income are likely to continue in FY16 but may taper off in FY17.
Mar-15
Jun-15
Sep-15
Source: Bloomberg
Price performance
Absolute (%)
Relative (%)
1M
1.2
5.7
3M
1.8
2.1
12M
28.8
41.6
There have been investor concerns over managements plans to enter China which
could possibly burn a capital hole. We understand the concerns given a slowing Chinese
economy and intense competition in the supermarket space. However, management has
assured us that they will be cautious and are still looking for suitable sites with the
possibility of opening 1-2 stores in FY16, while maintaining its asset-light stance. With
the investment in China capped at S$6m, risks are tilted to the upside, in our view.
Net cash, FCF generative and healthy yields

Sheng Siong has a big net cash pile (~10% of market cap) and a strong FCF business
model that supports a 4% dividend yield. It also has a track record of seeing store
growth in spurts, especially when there is a market downturn. 2015 and 2016 could be
these growth spurt years. Coupled with its focus on the budget end, Sheng Siong
provides a good hedge to any portfolio in these times.
[X]
Financial Summary
Analysts
Kenneth NG, CFA
T (65) 6210 8610
Jonathan SEOW
T (65) 6210 8671
Revenue (S$m)
Net Profit (S$m)
Core EPS (S$)
Core EPS Growth
FD Core P/E (x)
DPS (S$)
Dividend Yield
EV/EBITDA (x)
P/FCFE (x)
Net Gearing
P/BV (x)
ROE
Dec-13A
687.4
51.70
38.91
0.028
17.8%
30.23
0.026
3.06%
20.82
58.49
(66.6%)
7.85
25.8%
Dec-14A
726.0
63.09
47.65
0.033
19.0%
25.75
0.030
3.53%
17.11
NA
(55.2%)
5.41
24.7%
Dec-15F
769.5
77.38
55.52
0.037
10.3%
23.02
0.033
3.91%
14.97
32.57
(49.5%)
5.28
23.2%
0%
0.97
Dec-16F
854.6
85.85
61.28
0.041
10.4%
20.85
0.037
4.32%
13.40
20.17
(51.6%)
5.15
25.0%
0%
0.99
Dec-17F
930.6
92.43
64.86
0.043
5.8%
19.70
0.039
4.57%
12.40
20.61
(51.7%)
5.02
25.8%
0%
0.98

Powered by
EFA
BY THE NUMBERS
Share price info

Share px perf. (%)
Relative
Absolute
1M
5.7
1.2
3M
2.1
1.8
12M
41.6
28.8
P/BV vs ROE
7.00
40.0%
6.00
34.3%
5.00
28.6%

Growth
25.0
25.0%
20.0
14.0%
3.0%
% held
4.00
22.9%
15.0
SS Holdings
36.6
3.00
17.1%
10.0
-8.0%
Lim Hock Eng
12.3
2.00
11.4%
5.0
-19.0%
Lim Hock Leng
12.3
0.0
-30.0%
Major shareholders
1.00
5.7%
0.00
0.0%
ROE (rhs)
Profit & Loss

(S$m)
Total Net Revenues
Gross Profit
Operating EBITDA
Operating EBIT
Exceptional Items
Pre-tax Profit
Taxation
Profit After Tax
Minority Interests
Preferred Dividends
Net Profit
Dec-13A
687.4
158.2
51.7
(10.1)
41.6
1.1
0.0
4.9
47.6
0.0
47.6
(8.7)
Dec-14A
726.0
175.7
63.1
(10.9)
52.2
0.9
0.0
4.7
57.8
0.0
57.8
(10.1)
Dec-15F
769.5
188.5
77.4
(19.3)
58.1
0.8
0.0
8.4
67.3
0.0
67.3
(11.8)
Dec-16F
854.6
211.9
85.8
(18.8)
67.1
0.6
0.0
6.6
74.3
0.0
74.3
(13.0)
Dec-17F
930.6
231.7
92.4
(18.9)
73.5
0.6
0.0
4.5
78.6
0.0
78.6
(13.8)
38.9
0.0
0.0
47.6
0.0
0.0
55.5
0.0
0.0
61.3
0.0
0.0
64.9
0.0
0.0
38.9
38.9
38.9
47.6
47.6
47.6
55.5
55.5
55.5
61.3
61.3
61.3
64.9
64.9
64.9
Cash Flow
(S$m)
EBITDA
Tax Paid
Capex
Shares Repurchased
Dividends Paid
Preferred Dividends
Dec-13A
51.70
Dec-14A
63.09
Dec-15F
77.38
Dec-16F
85.85
Dec-17F
92.43
(3.79)
10.56
(20.66)
2.21
2.04
4.88
1.05
(8.73)
45.11
(26.30)
0.00
0.00
1.29
(25.00)
0.00
0.00
0.00
(40.81)
4.63
0.92
(7.48)
71.72
(80.94)
0.00
0.00
1.08
(79.87)
0.00
79.02
0.00
(40.12)
8.40
0.80
(11.68)
54.24
(15.00)
0.00
0.00
0.00
(15.00)
0.00
0.00
0.00
(49.97)
6.60
0.60
(11.90)
83.36
(20.00)
0.00
0.00
0.00
(20.00)
0.00
0.00
0.00
(55.16)
4.50
0.60
(17.55)
82.02
(20.00)
0.00
0.00
0.00
(20.00)
0.00
0.00
0.00
(58.37)
(1.05)
(41.87)
(21.76)
20.11
20.11
(0.92)
37.99
29.84
(8.15)
(8.15)
(0.80)
(50.77)
(11.53)
39.24
39.24
(0.60)
(55.76)
7.61
63.36
63.36
(0.60)
(58.97)
3.05
62.02
62.02
236
BY THE NUMBERS
Balance Sheet
(S$m)
Total Debtors
Inventories
Fixed Assets
Total Investments
Intangible Assets
Short-term Debt
Total Creditors
Total Provisions
Total Liabilities
Minority Interests
Total Equity
Dec-13A
99.7
12.2
45.6
0.0
157.5
90.8
0.0
0.0
0.0
90.8
0.0
Dec-14A
130.5
10.7
43.1
0.0
184.4
160.7
0.0
0.0
0.0
160.7
0.0
Dec-15F
119.7
10.5
47.8
0.0
178.0
156.4
0.0
0.0
0.0
156.4
0.0
Dec-16F
127.9
11.7
52.8
0.0
192.5
157.6
0.0
0.0
0.0
157.6
0.0
Dec-17F
131.6
12.7
57.4
0.0
201.8
158.7
0.0
0.0
0.0
158.7
0.0
88.2
7.9
96.2
0.0
95.8
10.7
106.5
0.0
79.6
10.6
90.2
0.0
88.0
11.7
99.7
0.0
95.7
8.7
104.4
0.0
0.0
0.0
2.3
98.5
149.8
0.0
149.8
0.0
0.0
2.2
108.7
236.3
0.0
236.3
0.0
0.0
2.4
92.6
241.8
0.0
241.8
0.0
0.0
2.4
102.1
248.0
0.0
248.0
0.0
0.0
1.6
106.0
254.4
0.0
254.4
Dec-13A
7.9%
19.6%
7.5%
0.072
0.11
N/A
18.2%
92.5%
5.03
29.51
57.92
105%
27.9%
15.5%
Dec-14A
5.6%
22.0%
8.7%
0.087
0.16
N/A
17.6%
90.9%
5.78
29.42
61.05
83%
27.2%
15.8%
Dec-15F
6.0%
22.6%
10.1%
0.080
0.16
N/A
17.5%
90.0%
5.05
28.55
55.11
45%
24.4%
16.1%
Dec-16F
11.0%
10.9%
10.0%
0.085
0.16
N/A
17.5%
90.0%
4.76
28.64
47.73
45%
27.4%
17.8%
Dec-17F
8.9%
7.7%
9.9%
0.088
0.17
N/A
17.5%
90.0%
4.80
28.79
47.99
50%
29.3%
18.1%
Dec-13A
N/A
7.9%
N/A
3.0%
N/A
N/A
N/A
N/A
Dec-14A
N/A
5.6%
N/A
0.0%
N/A
N/A
N/A
N/A
Dec-15F
N/A
6.0%
N/A
3.3%
N/A
N/A
N/A
N/A
Dec-16F
N/A
11.0%
N/A
1.5%
N/A
N/A
N/A
N/A
Dec-17F
N/A
8.9%
N/A
1.5%
N/A
N/A
N/A
N/A
Key Ratios
Revenue Growth
BVPS (S$)
Effective Tax Rate
Inventory Days
ROIC (%)
ROCE (%)
Key Drivers
No. of POS (main prod/serv)
SSS grth (%, main prod/serv)
No. of POS (2ndary prod/serv)
SSS grth (%, 2ndary prrod/serv)
237
Airport ServicesSingaporeEquity researchDecember 9, 2015
Company Note
Singapore
SIA Engineering
HOLD (no change)
Flying off course
Current price:
Target price:
Previous target:
Up/downside:
S$3.57
S$4.02
S$4.02
12.5%
Reuters:
Bloomberg:
Market cap:
SIAE.SI
SIE SP
US$2,836m
S$4,007m
US$0.90m
S$1.27m
1,091m
19.0%

Current shares o/s
Free float:
Structural headwinds could last for the next two years before heavy checks return
for aircraft and engines as the aviation is seeing more durable equipment.
Airlines are also milking the low oil price in the near term to increase flying hours
and profitability, deferring heavy checks but split minor checks into smaller parcels.
We maintain our Hold call and target price DCF valuation (WACC: 6.7%).
Aircraft checks are prolonged

The evolution of designs on new aircraft has led to longer intervals in between
scheduled checks, as much as 10-20%. Heavy-equipment content checks such as the
conventional 2-year C checks and 5-year D checks have largely been pushed back to
three years and six years. Short-term A-checks work are also split into smaller parcels
done at the apron to enhance airlines flying hours.
Airlines milking low-oil-price environment
With an uncertain aviation outlook (terrorists attacks and slowing global economy), many
airlines are also extending flying hours of aircraft as much as possible, with the low-oilprice environment helping to boost profitability in an industry ravaged by losses.
No change.
Line maintenance growth limited by space

Price Close
4.10
107.9
3.60
98.9
3.10
3
90.0
Vol m
1
Dec-14
Mar-15
Jun-15
Sep-15
Source: Bloomberg
Price performance
Absolute (%)
Relative (%)
1M
-9.6
-5.1
3M
2.0
2.3
12M
-9.6
3.2
Even with more checks shifted from hangars to apron, SIE is challenged by the space
constraints in Changi airport as there is a limit to the number of aircraft being allowed to
be grounded for overnight checks. Therefore, we see moderate growth of line
maintenance growth in the near term, in line with traffic growth in Changi. The next stepup will only kick in by 2018 with the new Terminal 4.
Engine lives are extended

The lifecycle of the new-era engines is extended while older engine models are being
retired on an accelerated pace. SIEs key engine centres, Eagles Services and SAESL
will continue to see low engine visits in the next 18 months, as Pratt & Whitney's P4000
market share in the B747s shrinks while SAESLs Rolls Royce engines are lasting
longer and only expect to return in 2018.
Boeing JV takes time to grow

The 51/49 Boeing/SIE JV, Boeing Asia Pacific Aviation Services will expand SIEs fleet
management segment, allowing it to support B737s, 747s,777s and 787s in Asia Pacific.
By teaming up with SIE, Boeing in theory can offer a total aftermarket care as part of the
aircraft purchase agreement. Initial work will start off with SIAs fleet before expanding to
third-party aircraft. Management expects the segment to take a few years to grow
meaningfully.
Maintain Hold
Re-rating catalysts could come from earlier-than-expected return of engines overhaul
and heavy airframe MRO. In the near term, SIE could benefit from a stronger US$ trend
as engine MRO contracts are priced in US$.
[X]
Financial Summary
Analyst
LIM Siew Khee
T (65) 6210 8664
Revenue (S$m)
Net Profit (S$m)
Core EPS (S$)
Core EPS Growth
FD Core P/E (x)
DPS (S$)
Dividend Yield
EV/EBITDA (x)
P/FCFE (x)
Net Gearing
P/BV (x)
ROE
Mar-14A
1,178
153.1
265.5
0.24
(2.1%)
14.87
0.25
7.00%
19.78
15.43
(37.0%)
2.90
19.9%
Mar-15A
1,121
126.8
183.3
0.17
(31.0%)
21.54
0.15
4.12%
24.29
20.05
(31.9%)
2.98
13.6%
Mar-16F
1,192
134.5
184.5
0.17
0.7%
21.40
0.15
4.16%
23.64
20.49
(34.0%)
2.93
13.8%
0.94
Mar-17F
1,238
143.5
198.3
0.18
7.5%
19.92
0.16
4.52%
21.94
19.90
(35.6%)
2.86
14.5%
1.09
Mar-18F
1,286
150.4
210.7
0.19
6.3%
18.74
0.17
4.80%
20.66
17.69
(37.8%)
2.79
15.1%
1.04

Powered by
EFA
BY THE NUMBERS
Share price info

Share px perf. (%)
1M
3M
12M
Relative
-5.1
2.3
3.2
Absolute
-9.6
2.0
-9.6
Major shareholders
SIA
% held
80.7
P/BV vs ROE
4.50
4.00
3.50
3.00
2.50
2.00
1.50
1.00
0.50
0.00
25.0%
22.2%
19.4%
16.7%
13.9%
11.1%
8.3%
5.6%
2.8%
0.0%

Growth
35.0
10.0%
30.0
3.6%
25.0
-2.9%
20.0
-9.3%
15.0
-15.7%
10.0
-22.1%
5.0
-28.6%
0.0
-35.0%
ROE (rhs)
Profit & Loss

(S$m)
Total Net Revenues
Gross Profit
Operating EBITDA
Operating EBIT
Exceptional Items
Pre-tax Profit
Taxation
Profit After Tax
Minority Interests
Preferred Dividends
Net Profit
Mar-14A
1,178
933
153
(37)
116
1
163
14
294
0
294
(23)
Mar-15A
1,121
944
127
(43)
84
1
106
14
205
0
205
(20)
Mar-16F
1,192
989
135
(45)
90
1
108
8
207
0
207
(21)
Mar-17F
1,238
1,028
144
(47)
96
1
117
8
223
0
223
(22)
Mar-18F
1,286
1,068
150
(49)
101
1
126
8
237
0
237
(24)
271
(5)
0
185
(2)
0
187
(2)
0
201
(2)
0
213
(2)
0
266
266
266
183
183
183
185
185
185
198
198
198
211
211
211
Cash Flow
(S$m)
EBITDA
Tax Paid
Capex
Shares Repurchased
Dividends Paid
Preferred Dividends
Mar-14A
153.1
Mar-15A
126.8
Mar-16F
134.5
Mar-17F
143.5
Mar-18F
150.4
(20.0)
(19.4)
1.3
0.8
0.9
34.2
172.4
(31.9)
307.8
(67.9)
0.0
0.0
0.0
(67.9)
16.1
0.0
0.0
(243.4)
40.0
1.3
(23.3)
125.4
(49.5)
0.0
0.0
112.3
62.8
8.8
0.0
0.0
(269.0)
9.3
(20.7)
124.3
(40.0)
0.0
0.0
108.4
68.4
0.0
9.3
(22.3)
131.3
(50.0)
0.0
0.0
117.1
67.1
0.0
9.3
(23.7)
136.8
(40.0)
0.0
0.0
126.5
86.5
0.0
(162.6)
(164.2)
(178.4)
(227.3)
12.6
256.0
240.1
(260.2)
(72.0)
197.0
188.5
(162.6)
30.1
192.8
193.1
(164.2)
34.2
198.4
198.8
(178.4)
44.9
223.3
223.6
239
BY THE NUMBERS
Balance Sheet
(S$m)
Total Debtors
Inventories
Fixed Assets
Total Investments
Intangible Assets
Short-term Debt
Total Creditors
Total Provisions
Total Liabilities
Minority Interests
Total Equity
Mar-14A
536
97
107
125
865
337
451
54
0
842
8
Mar-15A
464
83
125
101
773
344
479
62
0
884
9
Mar-16F
494
101
132
89
816
341
478
60
0
879
2
Mar-17F
528
104
138
89
859
345
478
59
0
882
2
Mar-18F
573
108
143
89
912
337
478
57
0
873
2
242
26
276
14
227
20
257
24
242
27
271
24
251
27
280
24
261
27
290
24
27
40
0
317
1,361
30
1,391
27
51
0
307
1,325
25
1,350
27
51
0
321
1,347
27
1,374
27
51
0
331
1,381
29
1,410
27
51
0
341
1,413
32
1,445
Mar-14A
2.73%
(6.4%)
13.0%
0.46
1.23
580.5
7.83%
104%
26.14
159.5
363.0
24.4%
8.56%
16.2%
Mar-15A
(4.87%)
(17.2%)
11.3%
0.39
1.20
280.0
9.74%
89%
29.35
239.1
484.8
15.4%
6.69%
11.0%
Mar-16F
6.33%
6.1%
11.3%
0.42
1.22
256.2
10.00%
89%
26.24
232.7
424.8
15.9%
6.55%
11.1%
Mar-17F
3.90%
6.7%
11.6%
0.45
1.25
275.6
10.00%
90%
26.47
234.6
428.4
17.6%
6.91%
11.6%
Mar-18F
3.90%
4.8%
11.7%
0.49
1.28
288.8
10.00%
90%
26.47
234.6
428.4
18.4%
7.06%
12.0%
Mar-14A
3.6%
8.2%
Mar-15A
1.3%
-17.9%
Mar-16F
2.0%
6.1%
Mar-17F
3.0%
2.9%
Mar-18F
3.0%
2.9%
Key Ratios
Revenue Growth
BVPS (S$)
Effective Tax Rate
Inventory Days
ROIC (%)
ROCE (%)
Key Drivers
240
IT ServicesSingaporeEquity researchDecember 9, 2015
Company Note
Singapore
Silverlake Axis Ltd
HOLD (no change)
What will Deloitte say?
Current price:
Target price:
Previous target:
Up/downside:
S$0.70
S$0.65
S$0.65
-7.0%
Reuters:
Bloomberg:
Market cap:
SLVX.SI
SILV SP
US$1,321m
S$1,866m
US$1.57m
S$2.21m
639.3m
33.2%

Current shares o/s
Free float:
Price Close
Maintain Hold.
Fintechs may pose some challenge.

Deloittes independent review report on short-seller allegations expected soon.
Could be a share price catalyst.
Short term: not expecting major orders

In the short term, Silverlake does not expect banks to have the appetite to place major
new orders for core banking software. Revenue growth will come from MES (~20%
growth expectations) and Software Project Services. The possibility of smaller order
wins remains.

122.0
1.10
108.0
0.90
94.0
0.70
80.0
0.50
66.0
0.30
100
52.0
Vol m
Longer-term opportunities from banks needing to digitise their operations.
In the longer term, Silverlake believes that the previously expected large order win from
RHB is still a possibility. The company also sees opportunities in the region as banks
invest in digital technologies to drive revenue growth, manage costs and provide easy
banking access to customers. China also presents a huge opportunity for Silverlake
though it is a challenging market.
1.30
50
Mar-15
Not expecting major order wins in the short term.
Long term: opportunities are still there
No change.
Dec-14
Jun-15
Absolute (%)
Relative (%)
1M
1.4
5.9
3M
28.4
28.7
Financial technology, also known as Fintechs, is a line of business based on using

software to provide financial services. Financial technology companies are generally
startups founded with the purpose of disrupting incumbent financial systems and
corporations that rely less on software. OCBC and UOB have both made initial
investments into Fintechs.
Market awaiting Deloitte report
Sep-15
Source: Bloomberg
Price performance
What challenges will Fintechs pose?
12M
-32.8
-20.0
The market is also awaiting the findings of the Deloitte study commissioned by
Silverlake in response to a previous short-seller report. This report is expected to be out
by end-Nov 2015 at the earliest. The findings and suggestions which Silverlake may
adopt will help investors better assess how to value the company.
Maintain Hold
The Deloitte report could be a short-term catalyst. Our numbers will have upside risk as
we are less bullish than consensus on new order wins and we have also yet to factor in
contributions from Silverlakes new acquisition. Our target price is DCF-derived
(WACC:11.7%). Dividend yields of 4.1-4.8% in FY15-17 are backed by strong free
cashflow (minimal capex) and a net cash balance sheet. Unless there are changes to its
business structure, Silverlakes high dividend payout ratio should continue.
[X]
Financial Summary
Analyst
William TNG, CFA
T (65) 6210 8676
Revenue (RMm)
Net Profit (RMm)
Core EPS (RM)
Core EPS Growth
FD Core P/E (x)
Price To Sales (x)
DPS (RM)
Dividend Yield
EV/EBITDA (x)
P/FCFE (x)
Net Gearing
P/BV (x)
ROE
Jun-14A
500.7
240.5
0.10
34.1%
20.33
9.46
0.12
5.54%
15.86
32.56
(56.1%)
9.23
38.7%
Jun-15A
516.0
282.6
0.10
1.0%
20.12
11.02
0.10
4.77%
18.18
15.23
(51.4%)
8.90
45.0%
Jun-16F
578.7
274.4
0.10
(2.6%)
20.66
9.80
0.09
4.37%
17.41
23.63
(48.8%)
8.84
42.9%
0%
0.87
Jun-17F
565.2
255.3
0.10
(6.7%)
22.15
10.00
0.09
4.06%
17.85
23.18
(48.2%)
8.50
39.1%
0%
0.74
Jun-18F
760.6
363.1
0.14
42.2%
15.57
7.43
0.12
5.78%
12.64
23.58
(46.8%)
8.06
53.1%
0%
0.92

Powered by
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BY THE NUMBERS
Share price info

Share px perf. (%)
1M
3M
12M
P/BV vs ROE

Growth
14.0
70.0%
35.0
60.0%
12.0
60.0%
30.0
50.0%
Relative
5.9
28.7
-20.0
Absolute
1.4
28.4
-32.8
10.0
50.0%
25.0
40.0%
% held
8.0
40.0%
20.0
30.0%
66.3
6.0
30.0%
15.0
20.0%
4.0
20.0%
10.0
10.0%
2.0
10.0%
5.0
0.0%
0.0
0.0%
0.0
-10.0%
Major shareholders
Goh Peng Ooi
Artemis Investment Management
1.0
RBS Luxembourg
0.9
ROE (rhs)
Profit & Loss

Revenue driven by MES.
(RMm)
Total Net Revenues
Gross Profit
Operating EBITDA
Operating EBIT
Exceptional Items
Pre-tax Profit
Taxation
Profit After Tax
Minority Interests
Preferred Dividends
Net Profit
Jun-14A
500.7
306.7
272.3
(13.5)
258.7
(0.4)
7.4
0.0
265.8
0.0
265.8
(25.2)
Jun-15A
516.0
337.1
287.6
(13.2)
274.4
1.5
5.5
25.4
306.8
0.0
306.8
(24.2)
Jun-16F
578.7
352.8
300.0
(13.4)
286.7
1.4
4.0
12.9
305.0
0.0
305.0
(30.5)
Jun-17F
565.2
345.5
290.9
(13.6)
277.3
1.4
5.0
0.0
283.7
0.0
283.7
(28.4)
Jun-18F
760.6
466.0
409.8
(13.8)
396.0
1.4
6.0
0.0
403.4
0.0
403.4
(40.3)
240.6
(0.0)
0.0
282.7
(0.0)
0.0
274.5
(0.0)
0.0
255.3
(0.0)
0.0
363.1
(0.0)
0.0
240.5
233.1
233.1
282.6
282.6
282.6
274.4
274.4
274.4
255.3
255.3
255.3
363.1
363.1
363.1
Cash Flow
Strong free cashflow on limited capex.
(RMm)
EBITDA
Tax Paid
Capex
Shares Repurchased
Dividends Paid
Preferred Dividends
Jun-14A
272.3
0.0
26.1
0.0
0.0
5.1
1.9
(22.6)
282.8
(1.9)
1.4
(45.5)
(68.3)
(114.3)
(23.0)
0.0
0.0
(223.6)
Jun-15A
287.6
(5.5)
29.3
0.0
0.0
16.4
3.5
(25.7)
305.5
(3.0)
0.0
(46.6)
119.1
69.5
(1.6)
0.0
(7.9)
(285.8)
Jun-16F
300.0
(4.0)
(17.2)
0.0
0.0
58.4
1.4
(23.4)
315.3
(4.0)
0.0
0.0
(72.8)
(76.8)
1.5
0.0
0.0
(271.2)
Jun-17F
290.9
(5.0)
1.7
0.0
0.0
37.7
1.4
(30.5)
296.2
(4.0)
0.0
0.0
(48.3)
(52.3)
0.0
0.0
0.0
(247.0)
Jun-18F
409.8
(6.0)
(9.2)
0.0
0.0
(31.6)
1.4
(28.4)
336.1
(4.0)
0.0
0.0
(92.3)
(96.3)
0.0
0.0
0.0
(229.8)
(0.6)
(247.3)
(78.7)
145.5
169.1
0.0
(295.2)
79.7
373.3
374.8
0.0
(269.7)
(31.2)
239.9
240.4
0.0
(247.0)
(3.1)
243.9
245.8
0.0
(229.8)
10.0
239.8
241.7
242
BY THE NUMBERS
Balance Sheet
Net cash balance sheet.
(RMm)
Total Debtors
Inventories
Fixed Assets
Total Investments
Intangible Assets
Short-term Debt
Total Creditors
Total Provisions
Total Liabilities
Minority Interests
Total Equity
Jun-14A
349.8
163.5
Jun-15A
330.9
146.3
Jun-16F
316.2
159.0
Jun-17F
324.9
156.8
Jun-18F
332.2
188.9
3.1
516.4
13.1
74.1
161.5
1.7
250.4
1.3
0.0
477.2
12.9
130.5
156.4
2.1
301.8
0.8
0.0
475.2
12.9
134.5
168.0
1.7
317.0
1.3
0.0
481.7
12.9
139.5
181.5
1.7
335.5
1.3
0.0
521.2
12.9
145.5
195.3
1.7
355.3
1.3
72.3
41.4
115.0
2.6
117.3
115.7
115.2
138.1
118.0
1.6
117.0
2.6
116.5
2.6
139.4
2.6
20.4
23.0
12.4
150.4
616.3
0.1
616.4
19.9
21.6
0.0
139.6
639.3
0.1
639.4
32.8
35.4
0.0
152.4
639.7
0.1
639.8
32.8
35.4
0.0
151.8
665.2
0.1
665.3
32.8
35.4
0.0
174.8
701.5
0.1
701.6
Jun-14A
25.6%
25.4%
54.4%
0.13
0.23
78.7
9.48%
109%
74.22
98.8
117%
41.7%
31.9%
Jun-15A
3.1%
5.6%
55.7%
0.12
0.24
147.0
7.88%
96%
66.52
123.9
120%
43.6%
36.4%
Jun-16F
12.1%
4.3%
51.8%
0.12
0.24
150.9
10.00%
90%
57.11
100.0
143%
45.1%
34.8%
Jun-17F
(2.3%)
(3.1%)
51.5%
0.12
0.25
145.9
10.00%
90%
60.72
106.7
123%
42.7%
31.6%
Jun-18F
34.6%
40.9%
53.9%
0.12
0.26
208.4
10.00%
90%
52.29
92.2
167%
58.1%
42.7%
Jun-14A
N/A
11.4%
N/A
N/A
N/A
21.2%
N/A
N/A
Jun-15A
N/A
-10.8%
N/A
N/A
N/A
-16.7%
N/A
N/A
Jun-16F
N/A
-31.7%
N/A
N/A
N/A
67.6%
N/A
N/A
Jun-17F
N/A
-44.4%
N/A
N/A
N/A
-50.1%
N/A
N/A
Jun-18F
N/A
100.0%
N/A
N/A
N/A
100.0%
N/A
N/A
Key Ratios
MES sales to increase.
Revenue Growth
BVPS (RM)
Effective Tax Rate
Inventory Days
ROIC (%)
ROCE (%)
Key Drivers
Software licensing sales to decline on
lack of order wins.

243
AirlinesSingaporeEquity researchDecember 9, 2015
Company Note
Singapore
Singapore Airlines
ADD (no change)
Dont be too pessimistic
Current price:
Target price:
Previous target:
Up/downside:
S$10.98
S$12.83
S$12.83
16.8%
Reuters:
Bloomberg:
Market cap:
SIAL.SI
SIA SP
US$9,041m
S$12,773m
US$9.37m
S$13.19m
1,169m
44.0%

Current shares o/s
Free float:
No changes.
Although SIAs 1H16 results disappointed, investors need not be overly pessimistic,
as a cyclical upturn may yet arrive and structural reforms are being implemented.
European passenger weakness, and the air freight slowdown were the key cyclical
drags, but it would be unusual for the weakness to last beyond the next six months.
Long-term initiatives like SilkAirs and Scoots expansion are bearing fruit, while the
privatisation of Tiger Airways would yield even more group-wide synergies.
We stay Add as we see upside surprises given the depressed share price, with our
target still based on P/BV of 1.1x (average since 2001).
SIA mainline passenger business hit by European weakness

In the past two quarters, the mainline carriers yield weakness was primarily due to weak
European demand, which was not surprising given the continents especially weak
business environment this year. The Australian market was strong despite the weak
Australian dollar, which we attribute to capacity reductions by two Malaysian carriers.
While US demand was good, North Asian competitors had added capacity which caused
fare compression. Competition to Europe from Gulf carriers also added to the mix.
SilkAir and Scoot were the shining stars

Price Close
13.30
116.0
12.30
109.8
11.30
103.5
10.30
97.3
9.30
6
91.0
Vol m
2
Dec-14
Mar-15
Jun-15
Sep-15
Source: Bloomberg
Price performance
Absolute (%)
Relative (%)
1M
-1.4
3.1
3M
8.0
8.3
12M
-0.2
12.6
In contrast, the intra-Asia market was stable, and SilkAir benefitted from an improved
competitive standing after excessive regional LCC expansion in 2012-13 was partially
reversed in 2014. Both SilkAir and Scoot saw significant 4-7% yoy unit cost reductions
for 1HFY16 on the back of their 9-10% yoy ASK growth (which spread out fixed costs)
and improved fleet efficiencies as their older aircraft were replaced with new ones.
Tiger Airways privatisation is an important strategic move

We view SIAs move to privatise Tiger as being very beneficial against the small cost of
doing so, particularly as SIA reallocates traffic rights across different airlines in the group
to maximise revenue potential. Already, SIA and SilkAir have announced the transfer of
several less-premium destinations to Scoot to improve profits. More will follow.
Other structural moves to yield dividends later

SIAs A350s which start delivery soon will improve profits on smaller European routes as
they replace larger B777-300ERs. SIAs recent order for seven ultra long-range A350s
for 2018 delivery will enable it to compete for non-stop transpacific passengers and open
up new direct US points. Premium economy, only introduced from August, is already
seeing strong demand on the Kangaroo route, with impressive loads in the mid-80s. Its
lounges and cabin products are also being refreshed to stay ahead of the competition.
Cyclical factors could improve

Erstwhile weak cargo demand is currently ramping up for the year-end peak season. We
think European passenger demand may improve next year, as weak trading conditions
cannot last forever. With SIAs shares trading at trough levels of 0.9x P/BV (1 s.d. below
mean), downside risks have been reflected and the market is ready for upside surprise.
[X]
Financial Summary
Analyst
Raymond YAP, CFA
T (60) 3 2261 9072
Revenue (S$m)
Net Profit (S$m)
Core EPS (S$)
Core EPS Growth
FD Core P/E (x)
DPS (S$)
Dividend Yield
EV/EBITDA (x)
P/FCFE (x)
Net Gearing
P/BV (x)
ROE
Mar-14A
15,118
1,711
359.5
0.22
(24.5%)
49.76
0.46
4.19%
5.45
4.61
(28.9%)
0.98
1.97%
Mar-15A
15,500
1,883
367.9
0.28
25.5%
39.64
0.22
2.00%
5.10
3.56
(28.9%)
1.03
2.53%
Mar-16F
15,515
2,169
710.5
0.45
61.6%
24.54
0.25
2.28%
4.54
4.81
(25.9%)
0.98
4.10%
1.10
Mar-17F
15,450
2,533
701.6
0.56
24.4%
19.72
0.25
2.28%
4.06
4.57
(22.1%)
0.94
4.88%
0.84
Mar-18F
16,213
2,690
701.7
0.60
7.8%
18.30
0.25
2.28%
4.58
4.98
(7.9%)
0.90
5.04%
0.78
Powered by
EFA
BY THE NUMBERS
Share price info

Share px perf. (%)
1M
3M
12M
P/BV vs ROE

Growth
1.400
6.00%
60.0
80%
1.200
5.14%
50.0
50%
40.0
20%
30.0
-10%
Relative
3.1
8.3
12.6
Absolute
-1.4
8.0
-0.2
1.000
4.29%
% held
0.800
3.43%
55.4
0.600
2.57%
0.400
1.71%
20.0
-40%
0.200
0.86%
10.0
-70%
0.000
0.00%
Major shareholders
Temasek Holdings
0.0
-100%
ROE (rhs)
Profit & Loss

(S$m)
Total Net Revenues
Gross Profit
Operating EBITDA
Operating EBIT
Exceptional Items
Pre-tax Profit
Taxation
Profit After Tax
Minority Interests
Preferred Dividends
Net Profit
Mar-14A
15,118
2,178
1,711
(1,576)
135
25
93
22
275
100
375
49
Mar-15A
15,500
2,413
1,883
(1,539)
344
25
17
13
400
43
443
(36)
Mar-16F
15,515
2,717
2,169
(1,595)
574
16
(13)
115
693
187
880
(118)
Mar-17F
15,450
3,091
2,533
(1,691)
843
12
(3)
25
877
50
927
(149)
Mar-18F
16,213
3,263
2,690
(1,815)
876
(5)
46
25
941
0
941
(160)
424
(65)
0
407
(39)
0
762
(52)
0
778
(76)
0
781
(79)
0
359
259
259
368
325
325
711
523
523
702
651
651
702
702
702
Cash Flow
(S$m)
EBITDA
Tax Paid
Capex
Shares Repurchased
Dividends Paid
Preferred Dividends
Mar-14A
1,711
Mar-15A
1,883
Mar-16F
2,169
Mar-17F
2,533
Mar-18F
2,690
(55)
(79)
47
(198)
1,521
650
0
(65)
2,098
0
420
0
332
752
(53)
27
0
(375)
(1,220)
0
(116)
2,067
0
998
0
(3)
995
552
39
0
(553)
0
0
(118)
1,996
0
672
0
0
672
0
0
0
(117)
0
0
(149)
2,305
0
504
0
0
504
0
0
0
(117)
0
0
(160)
2,577
0
0
0
0
0
0
0
0
(117)
(35)
(436)
2,414
2,797
2,850
(175)
(137)
2,925
3,614
3,062
131
15
2,683
2,668
2,668
37
(80)
2,730
2,809
2,809
20
(97)
2,480
2,577
2,577
245
BY THE NUMBERS
Balance Sheet
(S$m)
Total Debtors
Inventories
Fixed Assets
Total Investments
Intangible Assets
Short-term Debt
Total Creditors
Total Provisions
Total Liabilities
Minority Interests
Total Equity
Mar-14A
4,884
1,605
243
579
7,311
13,027
2,082
223
0
15,332
61
Mar-15A
5,254
1,487
202
522
7,465
13,523
2,435
498
0
16,456
147
Mar-16F
5,037
1,488
198
522
7,245
14,223
2,423
498
0
17,143
147
Mar-17F
4,666
1,482
192
522
6,862
15,179
2,419
498
0
18,096
147
Mar-18F
2,696
1,555
201
522
4,974
17,814
2,465
498
0
20,777
147
2,978
2,353
5,391
904
2,907
3,729
6,783
1,370
2,849
3,729
6,725
1,370
2,757
3,729
6,633
1,370
2,887
3,729
6,763
1,370
2,772
3,677
0
9,068
13,237
337
13,575
2,839
4,209
0
10,991
12,464
467
12,930
2,839
4,209
0
10,933
13,057
518
13,575
2,839
4,209
0
10,842
13,642
594
14,236
2,839
4,209
0
10,971
14,227
674
14,901
Mar-14A
0.13%
(5.9%)
11.3%
3.33
11.26
3.60
0.0%
209%
38.43
7.30
87.14
1.33%
1.37%
1.33%
Mar-15A
2.52%
10.1%
12.1%
3.20
10.66
6.94
8.2%
79%
36.40
6.21
82.06
3.33%
2.89%
1.45%
Mar-16F
0.10%
15.2%
14.0%
3.01
11.17
9.46
13.4%
56%
35.09
5.72
82.29
5.98%
4.41%
2.31%
Mar-17F
(0.42%)
16.8%
16.4%
2.69
11.67
13.89
16.1%
45%
35.09
5.75
82.77
8.14%
5.94%
2.90%
Mar-18F
4.94%
6.2%
16.6%
1.01
12.17
14.43
17.0%
42%
34.19
5.53
79.53
7.69%
5.79%
3.10%
Mar-14A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
Mar-15A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
Mar-16F
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
Mar-17F
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
Mar-18F
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
Key Ratios
Revenue Growth
BVPS (S$)
Effective Tax Rate
Inventory Days
ROIC (%)
ROCE (%)
Key Drivers
Av. Seat Km (ASK, Yoy Chg %)
Rev. Psg Km (RPK, Yoy Chg %)
Passenger Load Factor (%)
Pax yld per RPK (S$)
Pax rev. per ASK (S$)
Total Cost Per ATK (S$)
Fuel Cost Per ATK (S$)
Non-fuel Cost Per ATK (S$)
Jet Fuel Price (US$/barrel)
Fleet Size (no. Of Planes)
246
Stockbroking & ExchangesSingaporeEquity researchDecember 9, 2015
Company Note
Singapore
Singapore Exchange
HOLD (no change)
Unexciting near term; potential in longer term
Current price:
Target price:
Previous target:
Up/downside:
S$7.54
S$7.98
S$7.98
5.8%
Reuters:
Bloomberg:
Market cap:
SGXL.SI
SGX SP
US$5,719m
S$8,080m
US$12.88m
S$18.14m
1,074m
63.0%

Current shares o/s
Free float:
No change.
112.0
7.80
104.0
6.80
15
96.0
Vol m
10
5
Jun-15
Absolute (%)
Relative (%)
Aims to attract new listings in the digital and consumer sectors, which could drive
listing revenue after the recent dry spell.
Maintain Hold, with a DDM-based target price of S$7.98.
Securities ADVT to remain around S$1.2bn; lower clearing rate

Securities average daily traded value (ADVT) has remained in the S$1.1bn-1.2bn range
in recent quarters, given weaker investor sentiment amid the slowdown in China and the
region. We continue to expect securities ADVT to remain around S$1.2bn in FY16, in
the absence of an extended period of market volatility. We also expect a slight tapering
of the securities clearing rate compared to FY15 as SGX continues to give out rebates to
participants of the market maker and liquidity provider programme (MMLP).
1M
-1.1
3.4
3M
1.8
2.1
Diversifying revenue streams

Managements goal is to diversify SGXs revenues to reduce its reliance on single
products (e.g. China A50 futures, Nikkei 225 futures). Future areas of focus include: 1)
FX futures, 2) fixed income, and 3) market data. It recently launched SGX Index Edge, a
provider of Asian-focus index services, and will launch its bond trading platform, SGX
Bond Pro, in the next few months.
Targeting listings in digital and consumer sectors
Sep-15
Source: Bloomberg
Price performance
Derivatives volume growth to slow as demand for China A50 futures moderates,
partially offset by ramp-up in new products volume.
FY15 saw a record 42% yoy growth rate in derivative revenue, driven by a surge in
demand for the China A50 index futures amid an A-share market boom and bust. We
expect growth in derivatives to slow in FY16 given falling traded volume of the China
A50 product, albeit partially offset by growth in new derivative products (e.g. FX futures).
8.80
Mar-15
We expect securities ADVT to remain around S$1.2bn in FY16.
Record derivative growth unlikely to sustain
Price Close
Dec-14
12M
2.6
15.4
Singapores IPO market was dreary in 2015. Market conditions aside, SGXs inability to
attract new listings has to do with poor liquidity. It introduced initiatives such as the
MMLP and reduction in board lot sizes to improve liquidity, and will continue to roll out
more programmes. For new listings, SGX is targeting companies in the digital and
consumer sectors, in addition to its niche in REITs and healthcare.
Potential beneficiary of AEC, but further out

Looking ahead, we think the ASEAN Economic Community (AEC) could be beneficial for
SGX in terms of new listings, which will in turn drive better trading volumes. As
Singapore is viewed as an ASEAN hub, more companies are likely to set up shop in
Singapore and look for listings on SGX to raise capital. However, we think the positives
are likely to be further out.
Maintain Hold
SGX is trading at 20x forward P/E (0.5 s.d. below mean), which we believe is a fair
valuation for flat securities ADVT, moderating derivative volumes and a weak IPO
market in FY16. We maintain our Hold rating, with an unchanged DDM-based target
price of S$7.98.
Financial Summary
Analyst
Jessalynn CHEN
T (65) 6210 8672
Kenneth NG, CFA
T (65) 6210 8610
Revenue (S$m)
Net Profit (S$m)
Core EPS (S$)
Core EPS Growth
FD Core P/E (x)
DPS (S$)
Dividend Yield
EV/EBITDA (x)
P/FCFE (x)
Net Gearing
P/BV (x)
ROE
Jun-14A
686.9
417.3
320.4
0.30
(8.10%)
25.23
0.28
3.71%
17.39
29.33
(87.6%)
8.78
35.4%
Jun-15A
778.9
459.5
348.6
0.32
8.72%
23.22
0.28
3.71%
15.77
23.86
(86.1%)
8.29
36.7%
Jun-16F
854.4
494.6
377.3
0.35
8.22%
21.46
0.30
3.98%
14.42
19.53
(90.8%)
7.69
37.2%
0%
1.03
Jun-17F
898.0
519.3
398.2
0.37
5.54%
20.33
0.31
4.11%
13.76
25.93
(83.8%)
7.20
36.6%
0%
1.01
Jun-18F
939.5
541.1
416.9
0.39
4.70%
19.42
0.31
4.11%
13.22
25.01
(77.3%)
6.70
35.7%
0%
0.95
Powered by
EFA
BY THE NUMBERS
Share price info

Share px perf. (%)
1M
3M
12M
Relative
3.4
2.1
15.4
Absolute
-1.1
1.8
2.6
Major shareholders
SEL Holdings
% held
23.4
Temasek Holdings
5.6
Nomura Securities
5.0
P/BV vs ROE

Growth
12.00
41.0%
30.0
20.0%
10.00
39.5%
25.0
15.0%
8.00
38.0%
20.0
10.0%
6.00
36.5%
15.0
5.0%
4.00
35.0%
10.0
0.0%
2.00
33.5%
5.0
-5.0%
0.00
32.0%
0.0
-10.0%
ROE (rhs)
Profit & Loss

(S$m)
Total Net Revenues
Gross Profit
Operating EBITDA
Operating EBIT
Exceptional Items
Pre-tax Profit
Taxation
Profit After Tax
Minority Interests
Preferred Dividends
Net Profit
Jun-14A
686.9
686.9
417.3
(45.6)
371.7
4.9
2.4
0.0
379.0
0.0
379.0
(58.6)
Jun-15A
778.9
778.9
459.5
(57.3)
402.2
5.7
1.9
1.7
411.5
0.0
411.5
(62.9)
Jun-16F
854.4
854.4
494.6
(57.3)
437.3
8.6
1.4
1.3
448.6
0.0
448.6
(71.3)
Jun-17F
898.0
898.0
519.3
(57.3)
462.0
9.0
1.5
1.0
473.5
0.0
473.5
(75.3)
Jun-18F
939.5
939.5
541.1
(57.3)
483.8
9.4
1.5
1.0
495.7
0.0
495.7
(78.8)
320.4
0.0
0.0
348.6
0.0
0.0
377.3
0.0
0.0
398.2
0.0
0.0
416.9
0.0
0.0
320.4
320.4
320.4
348.6
348.6
348.6
377.3
377.3
377.3
398.2
398.2
398.2
416.9
416.9
416.9
Cash Flow
(S$m)
EBITDA
Tax Paid
Capex
Shares Repurchased
Dividends Paid
Preferred Dividends
Jun-14A
417.3
Jun-15A
459.5
Jun-16F
494.6
Jun-17F
519.3
Jun-18F
541.1
15.6
11.7
63.1
(61.0)
(68.7)
1.0
(10.8)
(4.7)
(74.7)
343.6
(71.8)
0.0
0.0
3.9
(67.9)
0.0
0.0
0.0
(299.5)
8.6
6.1
(5.7)
(63.7)
416.4
(82.4)
0.0
0.0
5.2
(77.2)
0.0
(8.0)
0.0
(299.9)
10.7
0.0
(8.6)
(71.3)
488.5
(82.4)
0.0
0.0
8.6
(73.9)
0.0
0.0
0.0
(322.6)
10.7
1.0
(9.0)
(75.3)
385.7
(82.4)
0.0
0.0
9.0
(73.4)
0.0
0.0
0.0
(332.9)
10.7
2.0
(9.4)
(78.8)
396.7
(82.4)
0.0
0.0
9.4
(73.0)
0.0
0.0
0.0
(332.9)
0.0
(299.5)
(23.8)
275.7
275.7
0.0
(307.9)
31.3
339.2
339.2
0.0
(322.6)
92.1
414.7
414.7
0.0
(332.9)
(20.6)
312.3
312.3
0.0
(332.9)
(9.1)
323.8
323.8
248
BY THE NUMBERS
Balance Sheet
(S$m)
Total Debtors
Inventories
Fixed Assets
Total Investments
Intangible Assets
Short-term Debt
Total Creditors
Total Provisions
Total Liabilities
Minority Interests
Total Equity
Jun-14A
808
572
0
60
1,440
173
27
0
0
201
0
Jun-15A
841
654
0
60
1,555
201
9
0
36
247
0
Jun-16F
957
770
0
60
1,787
226
9
0
36
272
0
Jun-17F
943
881
0
60
1,885
251
9
0
36
297
0
Jun-18F
934
998
0
60
1,992
277
9
0
36
322
0
616
83
699
0
718
86
805
0
890
96
986
0
935
102
1,037
0
978
107
1,085
0
5
5
15
719
922
0
922
2
2
19
825
976
0
976
2
2
19
1,006
1,053
0
1,053
2
2
19
1,057
1,125
0
1,125
2
2
19
1,106
1,209
0
1,209
Jun-14A
(4.0%)
(8.2%)
60.7%
0.75
0.86
N/A
15.5%
93.8%
353.1
N/A
N/A
535%
40.9%
18.4%
Jun-15A
13.4%
10.1%
59.0%
0.78
0.91
N/A
15.3%
86.3%
287.2
N/A
N/A
376%
42.2%
19.9%
Jun-16F
9.7%
7.6%
57.9%
0.89
0.98
N/A
15.9%
85.5%
304.9
N/A
N/A
298%
43.1%
19.1%
Jun-17F
5.1%
5.0%
57.8%
0.88
1.05
N/A
15.9%
83.6%
335.7
N/A
N/A
429%
42.5%
18.4%
Jun-18F
4.6%
4.2%
57.6%
0.87
1.13
N/A
15.9%
79.9%
365.0
N/A
N/A
251%
41.6%
18.1%
Jun-14A
286,292
249
1,150
178.4
0.06%
104
209
2.00
300
Jun-15A
274,331
249
1,102
163.5
0.06%
160
296
1.84
320
Jun-16F
304,507
249
1,223
177.2
0.06%
187
339
1.82
338
Jun-17F
322,778
249
1,296
187.9
0.06%
200
357
1.79
353
Jun-18F
342,145
249
1,374
199.1
0.06%
212
372
1.76
368
Key Ratios
Revenue Growth
BVPS (S$)
Effective Tax Rate
Inventory Days
ROIC (%)
ROCE (%)
Key Drivers
Total Traded Value (S$m)
Trading Days In The Period
Avg Daily Traded Value (S$m)
Securities Clearing Fees (S$m)
Effective Clearing Rate (%)
Derivatives Contracts Traded (S$m)
Derivatives Clearing Revenue (S$m)
Avg Fees Per Contract (S$)
Other Revenue (S$m)
249
SingaporeEquity researchDecember 9, 2015
Company Note
Singapore
Singapore Post Ltd
ADD (no change)
Game face on
Current price:
Target price:
Previous target:
Up/downside:
S$1.79
S$2.04
S$2.04
14.3%
Reuters:
Bloomberg:
Market cap:
SPOS.SI
SPOST SP
US$2,728m
S$3,854m
US$3.97m
S$5.58m
2,147m
74.0%

Current shares o/s
Free float:

115.0
2.000
106.7
1.800
98.3
1.600
20
15
10
5
90.0
Vol m
2.200
Dec-14
Mar-15
Jun-15
Sep-15
Source: Bloomberg
Price performance
Absolute (%)
Relative (%)
1M
-5.8
-1.3
We see stronger earnings growth in the medium term as SPOST moves on from the
startup phase to executing its strategy of being a global ecommerce logistics player.
We also see volume growth opportunities as Alibaba expands aggressively outside

China, and as goods flow more freely across borders with the AEC.
Maintain Add; 4% yield pending earnings re-rating in the medium term.
SingPost 3.0: From start-up to MNC

SPOST is entering phase 3.0, an accelerated growth phase, in FY3/16-20 where its
focus will be on: 1) growing its freight and e-commerce logistics business globally, 2)
enhancing productivity, 3) leveraging partnerships, 4) unlocking full asset value, and 5)
widening its customer-centric go-to-market products. Its goal is to become a true MNC
by 2020. Since FY3/12, SPOST has been actively involved in M&As to build up its ecommerce logistics network, but its focus will now shift to post-merger integrations.
TradeGlobal and Jagged Peak to kick-start growth
No change.
Price Close
3M
1.4
1.7
12M
-7.0
5.8
With the acquisitions of TradeGlobal and Jagged Peak, SPOST will have more than 100
customers of monobrands, including the likes of fashion brands Calvin Klein, Hugo Boss
and Tory Burch, and brands of FMCG companies Nestle and Kimberly Clark. We think a
key growth area for SPOST would be to help these brands execute an end-to-end
ecommerce logistics strategy in Australasia. Its bigger scale will also allow it to have an
edge over startups trying to compete in the same space in ASEAN.
Alibabas aggressive international growth targets a plus

Jack Mas 10-year target for Alibaba is to grow its international revenue to 50% of total
revenue, up from todays 8%. We think this is beneficial for SPOST, Alibabas preferred
shipping partner in ASEAN. SPOST now handles Alibabas inbound and outbound
shipments in China, is the preferred supplier for its premium products, and works closely
with it in Indonesia and Brazil. We see more opportunities for collaboration to drive
volume growth ahead as Alibaba expands outside China.
AEC will remove cross-border inefficiencies

One of the key inefficiencies in ASEAN ecommerce today is the different customs
clearance processes and amount of duties charged in each country, hindering growth of
cross-border ecommerce transactions. We think the ASEAN Economic Community
(AEC) will be beneficial for ecommerce volume growth in the long run, as processes are
streamlined and goods can flow freely across borders.
Reiterate Add
We reiterate Add, with a DCF-based target price of S$2.04 (7% WACC). As SPOST
transitions from the startup phase to executing its strategy of becoming a global
ecommerce logistics player, we think earnings will finally see better growth momentum
in the medium term. That said, we acknowledge that near-term earnings may still be
under some pressure as it completes the tail end of its investments. The stock offers 4%
yield while waiting for earnings to re-rate.
Financial Summary
Analyst
Jessalynn CHEN
T (65) 6210 8672
Revenue (S$m)
Net Profit (S$m)
Normalised EPS (S$)
DPS (S$)
Dividend Yield
EV/EBITDA (x)
P/FCFE (x)
Net Gearing
P/BV (x)
ROE
Mar-14A
821
215.8
104.9
0.055
(26.1%)
42.32
0.063
3.50%
14.50
21
(15.9%)
3.06
11.8%
Mar-15A
920
219.6
152.0
0.071
28.6%
30.34
0.063
3.50%
15.31
1,816
(25.1%)
2.62
11.8%
Mar-16F
1,062
248.4
157.9
0.073
3.4%
26.15
0.070
3.92%
14.31
NA
(13.5%)
2.62
10.8%
0%
0.92
Mar-17F
1,174
235.9
160.8
0.071
(3.0%)
25.69
0.070
3.92%
15.38
36
(19.6%)
2.46
10.3%
0%
0.83
Mar-18F
1,305
271.9
183.7
0.081
14.2%
22.49
0.070
3.92%
13.50
27
(17.5%)
2.46
11.2%
0%
0.89
Powered by
EFA
BY THE NUMBERS
Share price info

Share px perf. (%)
1M
3M
12M
Relative
-1.3
1.7
5.8
Absolute
-5.8
1.4
-7.0
Major shareholders
Singapore Telecommunications Ltd
% held
25.9
Deutsche Bank AG
3.0
Aberdeen
2.9
P/BV vs ROE
4.00
3.50
3.00
2.50
2.00
1.50
1.00
0.50
0.00
35.0%
30.6%
26.3%
21.9%
17.5%
13.1%
8.8%
4.4%
0.0%

35.0
50%
30.0
36%
25.0
21%
20.0
7%
15.0
-7%
10.0
-21%
5.0
-36%
0.0
Jan-12 Jan-13
-50%
Jan-14
ROE (rhs)
Profit & Loss

(S$m)
Total Net Revenues
Gross Profit
Operating EBITDA
Operating EBIT
Exceptional Items
Pre-tax Profit
Taxation
Profit After Tax
Minority Interests
Preferred Dividends
Net Profit
Mar-14A
866
866
216
(30)
185
(7)
4
0
183
Mar-15A
970
970
220
(35)
185
(4)
7
0
187
Mar-16F
1,146
1,146
248
(26)
222
(10)
7
0
220
Mar-17F
1,220
1,220
236
(30)
206
(10)
8
0
204
Mar-18F
1,367
1,367
272
(38)
234
(10)
9
0
233
183
(34)
187
(33)
220
(36)
204
(35)
233
(40)
149
(2)
154
(2)
183
(3)
170
(9)
193
(10)
(43)
(0)
(22)
105
149
105
152
154
152
158
183
158
161
170
161
184
193
184
Cash Flow
(S$m)
EBITDA
Tax Paid
Capex
Shares Repurchased
Dividends Paid
Preferred Dividends
Mar-14A
215.8
Mar-15A
219.6
Mar-16F
248.4
Mar-17F
235.9
Mar-18F
271.9
55.6
49.9
(0.3)
19.3
22.4
8.7
8.7
(18.9)
6.5
6.2
(6.7)
(29.2)
244.2
(37.8)
(4.4)
(35.5)
238.5
(104.4)
(10.0)
(36.2)
183.1
(201.8)
(10.0)
(34.7)
216.9
(105.7)
(10.0)
(39.6)
250.9
(104.4)
(1.1)
1.3
(37.6)
(119.8)
(11.7)
(235.9)
0.0
3.0
(198.8)
0.0
3.5
(102.2)
0.0
3.8
(100.6)
14.8
0.0
(118.8)
330.8
0.0
(128.1)
187.1
0.0
(128.1)
0.0
0.0
(151.0)
0.0
0.0
(158.6)
(324.2)
(428.2)
(221.5)
206.6
213.3
(22.1)
180.6
183.2
2.5
6.9
(24.1)
34.9
19.1
(15.7)
(5.8)
(24.8)
(175.9)
(61.1)
114.7
124.7
(24.8)
(183.4)
(33.1)
150.3
160.2
251
BY THE NUMBERS
Balance Sheet
(S$m)
Total Debtors
Inventories
Fixed Assets
Total Investments
Intangible Assets
Short-term Debt
Total Creditors
Total Provisions
Total Liabilities
Minority Interests
Total Equity
Mar-14A
411
127
5
13
556
255
98
184
649
1,185
14
Mar-15A
606
164
6
21
798
330
105
303
662
1,400
17
Mar-16F
438
175
8
21
641
506
105
303
662
1,576
18
Mar-17F
564
193
8
21
787
582
105
303
662
1,652
18
Mar-18F
531
215
9
21
776
648
105
303
662
1,719
18
294
43
352
220
352
46
415
221
364
46
427
221
402
46
466
221
447
46
511
221
33
253
21
626
1,112
2
1,114
11
232
83
730
1,464
4
1,468
11
232
83
742
1,468
7
1,475
11
232
83
781
1,642
16
1,658
11
232
83
826
1,643
25
1,669
Mar-14A
24.6%
0.4%
26.3%
0.09
0.58
27.80
18.6%
113%
57.15
N/A
N/A
35.7%
14.3%
6.86%
Mar-15A
12.0%
1.8%
23.9%
0.17
0.68
42.35
17.6%
84%
57.78
N/A
N/A
20.7%
11.9%
8.04%
Mar-16F
15.5%
13.1%
23.4%
0.09
0.68
22.32
16.5%
81%
58.35
N/A
N/A
20.4%
12.8%
7.76%
Mar-17F
10.6%
(5.0%)
20.1%
0.14
0.72
20.70
17.0%
94%
57.13
N/A
N/A
16.3%
11.3%
7.71%
Mar-18F
11.2%
15.3%
20.8%
0.13
0.73
23.50
17.0%
86%
56.99
N/A
N/A
17.7%
12.2%
8.24%
Mar-14A
N/A
0.0%
1.1
Mar-15A
N/A
0.0%
119.8
Mar-16F
N/A
0.0%
-
Mar-17F
N/A
0.0%
-
Mar-18F
N/A
0.0%
-
Key Ratios
Revenue Growth
BVPS (S$)
Effective Tax Rate
Inventory Days
ROIC (%)
ROCE (%)
Key Drivers
(S$)
Volumes Moved (% Change)
Rates Charged (% Change)
Acquisitions (m)
252
NewspaperSingaporeEquity researchDecember 9, 2015
Company Note

Weak macro environment does not bode well
REDUCE (no change)

S$3.85
S$3.85
S$3.85
-0.1%
Traditional media operations continue to be affected by falling A&P spend by

retailers amid a weak macro environment.
Efforts to boost topline through investments in new media and hosting one-off
events are unlikely to offset the decline in traditional media revenue.
SPRM.SI
SPH SP
US$4,353m
S$6,150m
US$10.37m
S$14.61m
1,597m
90.0%
We see risk of further DPS cuts in FY16-17 as earnings continue to come under
pressure.
Maintain Reduce, with a SOP-based target price of S$3.85.
Current price:
Target price:
Previous target:
Up/downside:
Reuters:
Bloomberg:
Market cap:
Current shares o/s
Free float:
No change.
Weak macro environment continues to weigh on media segment

The media segment (77% of revenue, 61% of core PBT) continues to face headwinds
from the soft advertising market in Singapore. This is due to: 1) the weakening of
ASEAN currencies against the S$, which weighs on tourist arrivals and retail spending,
2) cuts in retailers A&P budgets, 3) cooling measures on property and cars, 4) fewer
IPOs, and 5) overall weakness in the domestic economy. We continue to forecast a
decline of 3-4% in media revenue in FY16-17 (vs. -6% in FY15).
Property to remain the stable contributor

Price Close
4.300
116.0
4.200
111.8
4.100
107.7
4.000
103.5
3.900
99.3
3.800
95.2
3.700
15
91.0
Lack of sustainability in operating profit
10
Vol m
The property segment (20% of revenue, 38% of core PBT) remains the stable earnings
contributor, with FY15 seeing maiden contributions from The Seletar Mall, which opened
on 28 Nov 2014. We expect FY16 property revenue and PBT to see a small uplift of 6%
and 4% respectively, mainly due to full-year contributions from The Seletar Mall vs. 9M
in FY15. AEIs at Paragon will also increase NLA by 7,000 sq ft progressively from FY1618, though this could be partially offset by the challenging outlook for retail sales.
5
Dec-14
Mar-15
Jun-15
Sep-15
Source: Bloomberg
Price performance
Absolute (%)
Relative (%)
1M
-4.5
0.0
3M
-1.5
-1.2
12M
-7.2
5.6
FY15 saw some positives that are unlikely to repeat: 1) The newsprint charge-out price
has contracted by 6% CAGR in FY12-15 and helped to alleviate cost pressures, but
guidance was for prices to trough close to current levels. 2) SPH has also derived other
income by hosting events (e.g. ST Run, Jubilee Walk) to buffer the fall in earnings, but
some of these are linked to SG50 festivities and are unlikely to repeat ahead. In view of
this, we expect a 3-5% decline in operating profit in FY16-17.
Risk of more dividend cuts

DPS has been cut by 1-2 Scts per year since FY13 and we continue to expect further
cuts in DPS going forward. Dividend payout ratios are becoming increasingly stretched,
with the 20 Scts DPS declared in FY15 implying a 102% payout ratio. Given the
declining core media earnings and lack of meaningfully-accretive investments to counter
the decline, we think dividends continue to be at risk.
Maintain Reduce
We maintain our Reduce call on SPH, with a SOP-based target price of S$3.85. We
prefer SPOST, which offers a slightly lower yield of 4% but has earnings re-rating
potential.
Financial Summary
Analyst
Jessalynn CHEN
T (65) 6210 8672
Revenue (S$m)
Net Profit (S$m)
Core EPS (S$)
Core EPS Growth
FD Core P/E (x)
DPS (S$)
Dividend Yield
EV/EBITDA (x)
P/FCFE (x)
Net Gearing
P/BV (x)
ROE
Aug-14A
1,215
438.4
404.3
0.22
(17.1%)
17.43
0.21
5.45%
16.40
17.11
7.6%
1.69
9.89%
Aug-15A
1,177
436.7
321.7
0.20
(9.9%)
19.35
0.20
5.19%
16.93
7.27
11.9%
1.72
8.81%
Aug-16F
1,154
417.1
265.7
0.16
(17.4%)
23.43
0.19
4.94%
17.89
19.51
12.5%
1.77
7.45%
0%
0.91
Aug-17F
1,140
403.1
261.0
0.16
(1.7%)
23.85
0.18
4.68%
18.66
20.76
12.8%
1.82
7.53%
0%
0.87
Aug-18F
1,138
398.4
263.7
0.16
1.0%
23.61
0.18
4.68%
19.00
21.02
12.7%
1.86
7.79%
0%
0.82
Powered by
EFA
BY THE NUMBERS
Share price info

Share px perf. (%)
1M
3M
12M
P/BV vs ROE

Growth
2.500
18.0%
30.0
60%
2.000
14.4%
25.0
45%
10.8%
20.0
30%
% held
1.500
15.0
15%
DBSN Services
3.6
1.000
7.2%
10.0
0%
Daiwa
1.1
0.500
3.6%
5.0
0.000
0.0%
0.0
Jan-12 Jan-13
Relative
Absolute
Major shareholders
0.0
-4.5
-1.2
-1.5
5.6
-7.2
-15%
-30%
Jan-14
ROE (rhs)
Profit & Loss

(S$m)
Total Net Revenues
Gross Profit
Operating EBITDA
Operating EBIT
Exceptional Items
Pre-tax Profit
Taxation
Profit After Tax
Minority Interests
Preferred Dividends
Net Profit
Aug-14A
1,231
1,231
438
(54)
384
(35)
(31)
157
476
53
528
(58)
Aug-15A
1,205
1,205
437
(50)
387
(34)
(11)
88
430
0
430
(60)
Aug-16F
1,186
1,186
417
(47)
370
(33)
(14)
50
372
0
372
(57)
Aug-17F
1,176
1,176
403
(44)
359
(33)
(10)
51
367
0
367
(55)
Aug-18F
1,178
1,178
398
(40)
358
(33)
(6)
51
371
0
371
(55)
471
(66)
370
(49)
315
(50)
312
(51)
315
(52)
404
357
357
322
322
322
266
266
266
261
261
261
264
264
264
Cash Flow
(S$m)
EBITDA
Tax Paid
Capex
Shares Repurchased
Dividends Paid
Preferred Dividends
Aug-14A
438.4
3.8
Aug-15A
436.7
15.4
Aug-16F
417.1
Aug-17F
403.1
Aug-18F
398.4
6.2
(0.9)
(0.1)
17.9
(35.1)
(65.9)
359.0
(18.9)
797.5
(852.9)
18.0
(56.4)
61.3
0.6
(4.0)
(390.0)
28.3
(33.6)
(58.3)
388.4
(13.6)
710.1
(275.0)
(30.4)
391.2
76.2
0.0
(18.0)
(380.6)
0.0
(33.2)
(57.2)
333.0
(13.9)
0.0
0.0
0.0
(13.9)
0.0
0.0
0.0
(339.3)
0.0
(33.2)
(55.5)
313.6
(13.7)
0.0
0.0
0.0
(13.7)
0.0
0.0
0.0
(307.2)
0.0
(33.2)
(55.3)
309.8
(13.7)
0.0
0.0
0.0
(13.7)
0.0
0.0
0.0
(291.1)
(37.9)
(370.0)
(67.3)
363.9
337.7
(640.0)
(962.3)
(182.7)
855.8
813.2
(33.2)
(372.5)
(53.4)
319.1
352.3
(33.2)
(340.4)
(40.5)
299.9
333.1
(33.2)
(324.2)
(28.0)
296.2
329.3
254
BY THE NUMBERS
Balance Sheet
(S$m)
Total Debtors
Inventories
Fixed Assets
Total Investments
Intangible Assets
Short-term Debt
Total Creditors
Total Provisions
Total Liabilities
Minority Interests
Total Equity
Aug-14A
1,472
144
24
0
1,640
286
4,549
173
4
5,011
926
Aug-15A
767
192
12
0
972
250
4,650
189
4
5,093
337
Aug-16F
747
158
22
0
927
216
4,650
189
4
5,060
337
Aug-17F
740
156
22
0
918
186
4,650
189
4
5,030
337
Aug-18F
745
156
22
0
923
160
4,650
189
4
5,003
337
298
61
1,286
879
271
69
677
947
253
69
659
947
250
69
656
947
249
69
655
947
44
923
47
2,255
3,687
709
4,396
48
995
51
1,723
3,619
728
4,347
48
995
51
1,705
3,509
777
4,287
48
995
51
1,702
3,422
828
4,250
48
995
51
1,702
3,350
880
4,229
Aug-14A
(1.96%)
(4.57%)
36.1%
(0.21)
2.28
10.95
10.9%
101%
43.89
N/A
N/A
104%
7.06%
6.96%
Aug-15A
(3.14%)
(0.38%)
37.1%
(0.32)
2.24
11.51
13.9%
105%
52.19
N/A
N/A
143%
7.36%
6.35%
Aug-16F
(1.94%)
(4.48%)
36.1%
(0.33)
2.17
11.15
15.4%
116%
55.53
N/A
N/A
120%
7.42%
5.78%
Aug-17F
(1.25%)
(3.36%)
35.4%
(0.34)
2.12
10.84
15.1%
112%
50.32
N/A
N/A
134%
7.32%
5.78%
Aug-18F
(0.19%)
(1.17%)
35.0%
(0.33)
2.07
10.81
14.9%
110%
50.05
N/A
N/A
151%
7.35%
5.87%
Aug-14A
-6.8%
N/A
-5.1%
N/A
N/A
N/A
N/A
N/A
N/A
-4.2%
Aug-15A
-5.4%
N/A
-5.7%
N/A
N/A
N/A
N/A
N/A
N/A
-11.7%
Aug-16F
-4.8%
N/A
-5.0%
N/A
N/A
N/A
N/A
N/A
N/A
-3.0%
Aug-17F
-2.7%
N/A
-4.0%
N/A
N/A
N/A
N/A
N/A
N/A
-2.0%
Aug-18F
-1.6%
N/A
-3.0%
N/A
N/A
N/A
N/A
N/A
N/A
-2.0%
Key Ratios
Revenue Growth
BVPS (S$)
Effective Tax Rate
Inventory Days
ROIC (%)
ROCE (%)
Key Drivers
Adex rev. grth (%, main newsppr)
ASP (% chg, main newsppr)
Circulation grth (%, main newsppr)
Adex rev. grth (%, 2ndary newsppr)
ASP (% chg, 2ndary newsppr)
Circulation grth (%, 2ndary newsppr)
Adex rev. grth (%, tertiary newsppr)
ASP (% chg, tertiary ppr)
Circulation grth (%, tertiary newsppr)
Newsprint Cost (% Change)
255
Telco - IntegratedSingaporeEquity researchDecember 9, 2015
Company Note
Singapore
SingTel
ADD (no change)
Diversification pays
Current price:
Target price:
Previous target:
Up/downside:
S$3.85
S$4.50
S$4.50
16.9%
Reuters:
Bloomberg:
Market cap:
STEL.SI
ST SP
US$43,448m
S$61,383m
US$61.16m
S$86.22m
15,944m
43.6%

Current shares o/s
Free float:
No changes
SingTel is the least at risk among its local peers of being negatively impacted by the
entry of a fourth mobile operator in Singapore due to its diversified operations.
We are longer-term positive on Trustwave due to growing demand for cyber security
services. But Trustwave will be EPS-dilutive in FY16-18.
Optus should gain further market traction as its network coverage/quality gap
narrows vs Telstra. Service revenue is expected to grow, but at a measured pace.
We forecast overall core net profit to grow by a decent 6.0%/5.6% in FY17/18.

Maintain Add with an unchanged SOP-based target price of S$4.50.
Least at risk from entry of a fourth mobile operator in Singapore

SingTel will be the least impacted among its local peers by the entry of a fourth mobile
operator in Singapore, as its mobile business only makes up c.11% of its FY03/16
Group EBITDA. Our sensitivity analysis suggests that our target price for SingTel would
fall to S$4.30 if its Singapore mobile ARPU is negatively impacted by 30% (bear-case)
by FY21. If the negative impact on mobile ARPU is only 5% (bull-case), our target price
would be at S$4.60.
Dilutive new investments

Price Close

111.7
3.90
103.3
3.40
100
95.0
Vol m
4.40
Still optimistic on Optus
50
Dec-14
We are longer-term positive on the S$1.07bn acquisition of Trustwave as we see

growing demand for cyber security services. However, it will be EBITDA-dilutive in FY16
and EPS-dilutive in FY16-18. Also, SingTel has raised its FY16 accrued capex to
S$3.0bn (FY15: S$2.4bn) to enhance Optuss mobile network, build a new Singapore
data centre and upgrade its billing/customer care system. The resulting higher funding
costs and depreciation will weigh on earnings in the short term, in our view.
Mar-15
Jun-15
Sep-15
Source: Bloomberg
Price performance
Absolute (%)
Relative (%)
1M
-1.8
2.7
3M
5.5
5.8
12M
-0.3
12.5
Optus is starting to gain greater market traction with its My Plan packages and better
coverage from its new 4G-700MHz network. With higher capex to upgrade the network,
we believe Optus will further narrow the network coverage/quality gap with Telstra and
gain market share. We expect Optuss service revenue growth to be better but
measured, at 1.8% p.a. in FY16-17 (FY15: +1.1%, FY14: -4.1%), as network
improvements take time and rivals could react to defend their market share.
Decent mid-single digit core net profit growth in FY17-18

We expect SingTels core net profit growth to be flattish (-0.4%) in FY16 (FY15: +3.6%),
mainly due to weaker regional currencies vs. S$, before hitting 6.0% in FY17 and 5.6%
in FY18, driven by higher associate and Optus earnings. Our FY16-18F forex rates for
the A$ and Rp are 6.5% and 5.1% lower, respectively, vs. the FY15 average. In constant
currency, our FY16 core net profit growth forecast is 2.5%.
Maintain Add with unchanged SOP-based target price of S$4.50

SingTel trades at FY17F EV/OpFCF of 16.1x and offers decent FY16F-18F dividend
yields of 4.6-5.2%. The shares have slumped 14.0% from its peak in mid-Apr on the
back of general market weakness and now offer 23% total returns (including 4.6%
dividend yield). Maintain Add with an unchanged SOP-based target price of S$4.50.
Potential catalysts include a rebound in regional currencies and earnings improvements
at Optus.
[X]
Financial Summary
Analyst
T (60) 3 2261 9081
Revenue (S$m)
Net Profit (S$m)
Core EPS (S$)
Core EPS Growth
FD Core P/E (x)
DPS (S$)
Dividend Yield
EV/EBITDA (x)
P/FCFE (x)
Net Gearing
ROE
Mar-14A
16,848
5,155
30.6%
3,652
0.23
(0.05%)
16.99
0.17
4.36%
11.38
25.64
31.0%
15.1%
Mar-15A
17,223
5,090
29.6%
3,782
0.24
4.66%
16.24
0.17
4.52%
11.58
23.58
34.0%
15.6%
Mar-16F
16,748
4,968
29.7%
3,727
0.23
(1.39%)
16.46
0.17
4.54%
11.97
22.24
36.7%
14.8%
0%
0.95
Mar-17F
17,667
5,104
28.9%
3,950
0.25
5.99%
15.53
0.19
4.82%
11.51
21.31
34.8%
15.0%
0%
0.95
Mar-18F
17,873
5,172
28.9%
4,170
0.26
5.57%
14.71
0.20
5.08%
11.12
20.97
31.6%
15.2%
0%
0.94

Powered by
EFA
BY THE NUMBERS
Share price info

Share px perf. (%)
1M
3M
12M
Relative
2.7
5.8
12.5
Absolute
-1.8
5.5
Major shareholders
Temasek Hldgs
-0.3
% held
54.3
P/BV vs ROE
3.00
15.80%
2.50
15.57%
2.00
15.33%
1.50
15.10%
1.00
14.87%
0.50
14.63%
0.00
14.40%
Growth
20.0
18.0
16.0
14.0
12.0
10.0
8.0
6.0
4.0
2.0
0.0
8.0%
6.8%
5.6%
4.4%
3.2%
2.0%
0.8%
-0.4%
-1.6%
-2.8%
-4.0%
ROE (rhs)
Profit & Loss
Lower Optus contribution on weaker

A$
(S$m)
Total Net Revenues
Gross Profit
Operating EBITDA
Operating EBIT
Exceptional Items
Pre-tax Profit
Taxation
Profit After Tax
Minority Interests
Preferred Dividends
Net Profit
Mar-14A
16,848
5,155
5,155
(2,132)
3,023
(181)
2,201
0
5,043
42
5,085
(1,428)
Mar-15A
17,223
5,090
5,090
(2,161)
2,929
(216)
2,579
0
5,291
3
5,294
(1,510)
Mar-16F
16,748
4,968
4,968
(2,194)
2,774
(255)
2,815
0
5,334
0
5,334
(1,604)
Mar-17F
17,667
5,104
5,104
(2,288)
2,816
(271)
3,124
0
5,670
0
5,670
(1,717)
Mar-18F
17,873
5,172
5,172
(2,322)
2,851
(259)
3,405
0
5,996
0
5,996
(1,823)
3,657
(5)
3,785
(3)
3,730
(3)
3,953
(3)
4,173
(3)
3,652
3,610
3,610
3,782
3,779
3,779
3,727
3,727
3,727
3,950
3,950
3,950
4,170
4,170
4,170
Cash Flow
Higher capex to enhance Optuss

mobile network, build a new
Singapore data centre and upgrade its
billing/ customer care system.
(S$m)
EBITDA
Tax Paid
Capex
Shares Repurchased
Dividends Paid
Preferred Dividends
Mar-14A
5,155
1,157
(305)
Mar-15A
5,090
1,215
86
Mar-16F
4,968
1,346
0
Mar-17F
5,104
1,445
0
Mar-18F
5,172
1,529
0
(148)
(660)
(518)
4,681
(2,102)
7
(362)
(37)
(2,494)
205
0
(1)
(1,306)
(598)
4,487
(2,238)
15
(451)
52
(2,621)
737
0
(1)
(352)
(665)
5,296
(2,268)
0
(1,269)
0
(3,537)
1,000
0
(1)
(463)
(684)
5,401
(2,523)
0
0
0
(2,523)
0
0
(1)
(356)
(703)
5,641
(2,215)
0
0
0
(2,215)
(500)
0
(2,678)
(2,678)
(2,789)
(2,788)
(2,955)
(2,473)
(285)
2,393
2,540
(1,940)
(75)
2,602
2,235
(1,789)
(30)
2,759
2,154
(2,788)
91
2,879
3,292
(3,455)
(29)
2,926
3,830
257
BY THE NUMBERS
Balance Sheet
Net debt/EBITDA at manageable 1.1x
(S$m)
Total Debtors
Inventories
Fixed Assets
Total Investments
Intangible Assets
Short-term Debt
Total Creditors
Total Provisions
Total Liabilities
Minority Interests
Total Equity
Mar-14A
623
3,556
170
3
4,351
11,096
10,420
10,740
2,713
34,969
814
Mar-15A
563
3,885
290
30
4,768
10,683
11,115
11,949
3,553
37,299
174
Mar-16F
533
3,351
156
30
4,070
10,757
11,644
12,307
3,553
38,261
174
Mar-17F
624
4,282
319
30
5,255
10,991
12,290
12,772
3,553
39,607
174
Mar-18F
595
3,440
161
30
4,226
10,885
13,046
13,155
3,553
40,639
174
4,442
435
5,690
7,227
5,078
504
5,757
8,804
3,499
504
4,178
9,804
5,324
504
6,002
9,804
3,595
504
4,274
9,304
2,066
9,293
445
15,428
23,868
24
23,893
2,216
11,020
522
17,299
24,733
35
24,768
2,119
11,923
522
16,622
25,671
38
25,709
1,660
11,464
522
17,988
26,833
41
26,874
2,674
11,978
522
16,774
28,048
44
28,092
Mar-14A
(7.34%)
(0.87%)
30.6%
(0.47)
1.50
9.88
28.1%
75.2%
78.38
5.98
145.8
9.73%
9.51%
9.46%
Mar-15A
2.23%
(1.26%)
29.6%
(0.53)
1.55
9.47
28.5%
74.4%
78.85
6.91
143.2
9.32%
8.93%
9.69%
Mar-16F
(2.76%)
(2.41%)
29.7%
(0.59)
1.61
8.05
30.1%
75.0%
79.06
6.93
133.2
8.23%
7.99%
9.28%
Mar-17F
5.49%
2.75%
28.9%
(0.59)
1.68
7.77
30.3%
75.0%
78.85
6.90
128.2
7.88%
7.78%
9.52%
Mar-18F
1.17%
1.34%
28.9%
(0.56)
1.76
8.06
30.4%
75.0%
78.85
6.90
128.2
7.95%
7.68%
9.72%
Mar-14A
13.85
1.62
1.09
0.41
38.2
1.0
66
99.1
Mar-15A
14.26
1.57
1.11
0.42
38.9
1.0
67
104.1
Mar-16F
14.66
1.53
1.12
0.43
39.0
1.0
67
109.3
Mar-17F
15.05
1.49
1.14
0.44
38.9
0.9
68
114.8
Mar-18F
15.05
1.49
1.14
0.44
38.9
0.9
68
114.8
Key Ratios
Dividend policy is 60-75% payout ratio
Revenue Growth
BVPS (S$)
Effective Tax Rate
Inventory Days
ROIC (%)
ROCE (%)
Key Drivers
258
Company Note
Singapore
SMRT Corporation
REDUCE (no change)
Bumpy ride ahead
Current price:
Target price:
Previous target:
Up/downside:
S$1.50
S$1.37
S$1.37
-8.6%
Reuters:
Bloomberg:
Market cap:
SMRT.SI
MRT SP
US$1,618m
S$2,286m
US$2.26m
S$3.18m
1,522m
38.0%

Current shares o/s
Free float:
No changes.
We expect SMRT to incur higher maintenance-related expenses (MRE) in FY16-17

to cater to its aging rail system.
FY16-17F earnings outlook further subdued by 1.9% fare cut effective Dec 15.
While the potential rail reform is a positive, market views that the government will
grant favourable terms to SMRT are unwarranted.
Maintain Reduce with a TP of S$1.37 based on FY16 DCF.
The operation of the Downtown Line (DTL) stage II (starting in Dec 2015) may add
further downside risk to our FY16-17F EPS.
Lifted repair & maintenance expenses

We expect SMRT to incur higher MRE in FY16-17 to cater to an aging rail system as
well as a larger train fleet. Due to the lifted MRE, the rail fare business ran into a third
consecutive quarterly loss in 2QFY16. Management expects the rail MRE to continue
increasing in the coming quarters, from currently 41% of rail revenue to c.50% of rail
revenue by end-FY16. The intensity of repair and maintenance works may return to
normal level in FY18 onwards.
FY16-17 fare outlook subdued by 1.9% fare cut

Price Close

112.1
1.60
104.3
1.40
96.6
1.20
88.8
1.00
10
81.0
Vol m
1.80
Dec-14
Mar-15
Jun-15
Sep-15
Source: Bloomberg
Price performance
Absolute (%)
Relative (%)
1M
0.3
4.8
3M
23.0
23.3
12M
-6.0
6.8
Apart from lifted MRE, SMRTs FY16-17 EPS are also likely to be adversely affected by
the LTAs 1.9% fare cut, effective from Dec 2015. In FY15, 53% of group revenue was
derived from rail fare business and 28% from bus fare business. Given SMRTs largely
fixed operating cost structure, we believe most of the fare cut will flow to the groups
bottom line.
Potential traffic diversion from DTL

Connecting the Northwest to the central region of Singapore, the Downtown Line (DTL)
stage II (operated by SMRTs competitor SBS Transit) is likely to divert some traffic load
from the existing rail network when it commences operations in Dec 2015. Our current
FY17F EPS assumes no yoy growth for SMRT rail ridership due to the diversion, in
contrast to the 2.8% yoy growth in FY15 and 1H16. We estimate that every 1%
decrease in rail ridership would lower our FY17F EPS by 4.8%.
Rail reform is good but one should not hope for too much
While we acknowledge that SMRT should benefit from potential capital-unlocking if a rail
reform materialises, we doubt if the company will receive favourable terms for the asset
transfer. Two issues that must be taken into consideration are the authoritys treatment
of SMRTs asset purchase obligation under the old rail regime and the governments
balancing of public and operator interests. Such issues point to the risk of an
undesirable outcome for SMRT.
Maintain Reduce, with a target price of S$1.37

We maintain our Reduce rating on SMRT. Our target price of S$1.37, based on FY16
DCF (WACC: 8.0%), has incorporated a scenario where SMRT transfers S$970m worth
of rail operating assets at book value to the government in FY19. Key upside risks to our
call include SMRT managing to receive a favourable term for rail reform.
[X]
Financial Summary
Analysts
Roy CHEN
T (65) 6210 8685
E roy.chen@cimb.com
William TNG, CFA
T (65) 6210 8676
Revenue (S$m)
Net Profit (S$m)
Core EPS (S$)
Core EPS Growth
FD Core P/E (x)
DPS (S$)
Dividend Yield
EV/EBITDA (x)
P/FCFE (x)
Net Gearing
P/BV (x)
ROE
Mar-14A
1,164
265.4
61.9
0.041
(25.8%)
36.85
0.022
1.47%
10.21
NA
60.0%
2.85
7.9%
Mar-15A
1,236
324.0
91.0
0.060
47.0%
25.08
0.033
2.17%
8.93
44.37
77.5%
2.66
11.0%
Mar-16F
1,293
322.4
80.8
0.053
(11.3%)
28.26
0.027
1.77%
9.35
NA
88.2%
2.54
9.2%
0%
0.95
Mar-17F
1,294
306.8
80.7
0.053
(0.0%)
28.28
0.027
1.77%
8.86
6.14
53.4%
2.43
8.8%
0%
0.87
Mar-18F
1,336
323.3
104.1
0.068
28.9%
21.93
0.034
2.28%
8.25
14.92
45.7%
2.30
10.8%
0%
0.90

Powered by
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BY THE NUMBERS
Share price info

Share px perf. (%)
1M
3M
12M
Relative
4.8
23.3
6.8
Absolute
0.3
23.0
Major shareholders
Temasek Holdings
Invesco
-6.0
% held
54.4
0.7
P/BV vs ROE
4.00
3.50
3.00
2.50
2.00
1.50
1.00
0.50
0.00
18.0%
15.8%
13.5%
11.3%
9.0%
6.8%
4.5%
2.3%
0.0%
Growth
45.0
40.0
35.0
30.0
25.0
20.0
15.0
10.0
5.0
0.0
60%
49%
38%
27%
16%
4%
-7%
-18%
-29%
-40%
ROE (rhs)
Profit & Loss

(S$m)
Total Net Revenues
Gross Profit
Operating EBITDA
Operating EBIT
Exceptional Items
Pre-tax Profit
Taxation
Profit After Tax
Minority Interests
Preferred Dividends
Net Profit
Mar-14A
1,164
300
265
(181)
84
(9)
(0)
0
75
0
75
(13)
Mar-15A
1,236
344
324
(203)
121
(11)
1
0
111
0
111
(20)
Mar-16F
1,293
344
322
(216)
107
(13)
4
0
98
0
98
(18)
Mar-17F
1,294
344
307
(200)
107
(13)
4
0
98
0
98
(18)
Mar-18F
1,336
376
323
(188)
136
(14)
4
0
126
0
126
(23)
61
0
0
90
1
0
80
1
0
80
1
0
104
1
0
62
62
62
91
91
91
81
81
81
81
81
81
104
104
104
Cash Flow
(S$m)
EBITDA
Tax Paid
Capex
Shares Repurchased
Dividends Paid
Preferred Dividends
Mar-14A
265.4
Mar-15A
324.0
Mar-16F
322.4
Mar-17F
306.8
Mar-18F
323.3
(12.8)
(10.0)
(166.6)
0.1
4.9
26.9
(10.2)
(4.5)
264.8
(651.9)
7.6
0.0
1.8
(642.6)
28.7
0.0
0.0
(30.4)
25.5
(12.0)
(9.0)
318.5
(462.5)
6.6
(1.5)
1.6
(455.8)
188.8
0.0
0.0
(41.1)
30.9
(14.0)
(4.9)
167.8
(215.5)
0.0
0.0
1.3
(214.3)
0.0
0.0
0.0
(40.4)
31.3
(14.4)
(17.6)
306.3
(199.9)
264.3
0.0
1.3
65.6
0.0
0.0
0.0
(40.4)
43.5
(14.8)
(17.6)
339.3
(187.5)
0.0
0.0
1.3
(186.3)
0.0
0.0
0.0
(52.1)
18.9
17.2
(360.6)
(349.1)
(367.5)
30.5
178.2
40.9
51.4
(125.4)
0.0
(40.4)
(86.8)
(46.4)
(32.5)
0.0
(40.4)
331.6
372.0
386.3
0.0
(52.1)
101.0
153.1
167.8
260
BY THE NUMBERS
Balance Sheet
(S$m)
Total Debtors
Inventories
Fixed Assets
Total Investments
Intangible Assets
Short-term Debt
Total Creditors
Total Provisions
Total Liabilities
Minority Interests
Total Equity
Mar-14A
156
99
84
5
344
1,642
53
14
21
1,729
156
Mar-15A
156
168
81
0
405
2,042
56
14
21
2,132
9
Mar-16F
29
106
95
0
230
2,042
59
23
21
2,146
9
Mar-17F
320
106
95
0
522
1,778
63
32
21
1,894
9
Mar-18F
369
110
98
0
577
1,778
67
41
21
1,907
9
355
54
566
480
568
63
640
813
354
76
439
813
355
75
439
813
366
81
456
813
69
549
156
1,271
802
(0)
802
60
873
166
1,678
860
(1)
859
60
873
166
1,477
900
(1)
899
60
873
166
1,477
940
(2)
939
60
873
166
1,494
992
(2)
990
Mar-14A
3.97%
(2.2%)
22.8%
(0.32)
0.53
8.08
17.6%
54.1%
29.01
30.47
197.0
7.01%
5.49%
3.22%
Mar-15A
6.16%
22.1%
26.2%
(0.44)
0.56
9.64
18.4%
54.4%
39.38
33.82
189.0
6.89%
7.12%
4.32%
Mar-16F
4.66%
(0.5%)
24.9%
(0.52)
0.59
7.65
18.0%
50.0%
38.77
33.91
177.9
5.23%
5.79%
3.69%
Mar-17F
0.10%
(4.8%)
23.7%
(0.33)
0.62
7.44
18.0%
50.0%
29.99
36.50
136.2
4.78%
5.68%
3.80%
Mar-18F
3.21%
5.4%
24.2%
(0.30)
0.65
9.18
18.0%
50.0%
29.53
36.71
137.0
7.03%
7.02%
4.68%
Mar-14A
-0.3%
2.9%
-1.1%
4.5%
Mar-15A
0.5%
2.8%
4.0%
5.1%
Mar-16F
1.8%
1.8%
1.3%
3.0%
Mar-17F
-0.9%
0.0%
-0.9%
3.0%
Mar-18F
1.5%
2.5%
1.5%
3.0%
Key Ratios
Revenue Growth
BVPS (S$)
Effective Tax Rate
Inventory Days
ROIC (%)
ROCE (%)
Key Drivers
Avg fare/trip (%chg,main prod/serv)
Ridership grth (%,main prod/serv)
Avg fare/trip (%chg,2ndary prod/serv)
Ridership grth (%,2ndary prod/serv)
261
Company Note
Singapore
SPH REIT
HOLD (no change)
Limited catalysts
Current price:
Target price:
Previous target:
Up/downside:
S$0.94
S$1.07
S$1.07
14.0%
Reuters:
Bloomberg:
Market cap:
SPHR.SI
SPHREIT SP
US$1,686m
S$2,382m
US$0.46m
S$0.65m
2,514m
24.9%

Current shares o/s
Free float:
FY8/15 earnings aided by better cost management.

Sustainable improvement in NPI margins, with updating of older M&E equipment.
Paragon and Clementi Mall still enjoyed higher shopper footfall.
Positive rental reversions and AEI to boost forward earnings.
Maintain Hold call, with an unchanged DDM-based target price of S$1.07.
FY15 earnings aided by better cost management

SPH REITs FY15 NPI rose 3% yoy due to better cost management and a 1%
improvement in topline. This was despite the loss of income during Paragons fitting-out
periods, which were part of its tenancy revitalisation programme. The trusts book NAV
rose to S$0.95 thanks to revaluation gains from Paragon.
More efficient cost management boosted NPI in FY15

NPI margin rose to 75.9% in FY15 (FY14: 74.5%), thanks to savings in utilities (from
lower tariff rates and more efficient consumption by new chillers) and lower maintenance
costs, partly offset by higher property taxes and marketing expenses. We expect the
improved margins to be sustained going forward.
No change.
Higher footfall at both malls

Price Close

107.0
1.000
102.3
0.900
97.7
0.800
10
93.0
Vol m
1.100
Positive rental reversion and AEI to boost earnings
Dec-14
In terms of operations, Paragon saw a 2% yoy rise in visitor traffic for FY15 but tenant
sales dipped by 3.2% yoy. Hence, occupancy costs rose to 19% in FY15. Meanwhile,
the Clementi Mall saw a 3.6% yoy rise in FY15 tenant sales and a corresponding 4.7%
rise in shopper traffic, with occupancy costs at 14.6%. Businesses in the latter that
continue to do well include the supermarket, F&B and lifestyle sectors.
Mar-15
Jun-15
Sep-15
Source: Bloomberg
Price performance
Absolute (%)
Relative (%)
1M
-0.5
4.0
3M
0.5
0.8
12M
-10.9
1.9
We expect SPH REIT to continue enjoying positive rental reversions, with 9.8% and
31.9% of rental income (mainly from Clementi Mall) due to be renewed in FY16 and
FY17, respectively. Current occupancy cost at Clementi Mall is below the 16-18% range
of its peers. In addition to higher rents, decanting 7,000 sqf of space from replacement
of Paragons air-handling unit will increase leasable area gradually in Sep 2015-Mar
2018 and boost rental income. Gearing remains low at 25.7% at end-FY15.
Maintain Hold rating

Given the limited potential catalysts, we maintain our Hold rating and DDM-based target
price of S$1.07. SPH Reit trades at 1x FY15 P/BV and offers investors FY16 DPU yield
of 5.8%, in line with its S-REIT peers. We would revisit the stock once the acquisition of
the fully-occupied Seletar Mall is completed.
[X]
Financial Summary
Analyst
LOCK Mun Yee
T (65) 6210 8606

Net Profit (S$m)
Core EPS (S$)
Core EPS Growth
FD Core P/E (x)
DPS (S$)
Dividend Yield
Asset Leverage
BVPS (S$)
P/BV (x)
Recurring ROE
Aug-14A
222.9
165.9
228.0
150.3
0.050
(0.04%)
18.80
0.060
6.38%
25.8%
0.94
1.00
5.47%
Aug-15A
205.1
155.6
153.5
138.0
0.046
(7.31%)
20.29
0.055
5.82%
25.5%
0.95
0.99
4.92%
Aug-16F
211.7
158.5
120.5
142.6
0.047
2.33%
19.83
0.056
5.97%
25.5%
0.94
1.00
5.03%
1.00
Aug-17F
217.7
163.4
125.6
146.2
0.049
3.94%
19.07
0.057
6.10%
25.6%
0.94
1.00
5.26%
1.01
Aug-18F
224.2
168.3
130.8
148.9
0.051
4.07%
18.33
0.058
6.21%
25.6%
0.94
1.00
5.48%
1.01

Powered by
EFA
BY THE NUMBERS
Share price info

Share px perf. (%)
1M
Relative
Absolute
4.0
-0.5
Major shareholders
Times Properties Private Ltd
3M
0.8
0.5
12M
1.9
-10.9
1.150
29.00%
1.100
27.90%
0.0700
7.00%
0.0600
6.00%
0.0500
5.00%
% held
1.050
26.80%
0.0400
4.00%
69.7
1.000
25.70%
0.0300
3.00%
0.0200
2.00%
0.0100
1.00%
0.0000
0.00%
NTUC Enterprise
5.4
Norges Bank Investment

Management
3.1
0.950
24.60%
0.900
23.50%
DPS (lhs)
Profit & Loss

(S$m)
Rental Revenues
Other Revenues
Net Property Income
Management Fees
Trustee's Fees
EBITDA
EBIT
Net Interest Income
Associates' Profit
Exceptional Items
Pre-tax Profit
Taxation
Minority Interests
Preferred Dividends
Net Profit
Aug-14A
222.9
0.0
222.9
(57.0)
165.9
0.0
(17.1)
(1.7)
0.0
147.0
0.0
147.0
(21.7)
0.0
0.0
102.6
228.0
0.0
0.0
0.0
228.0
150.3
Aug-15A
205.1
0.0
205.1
(49.5)
155.6
0.0
(16.0)
(1.7)
0.0
138.0
0.0
138.0
(21.0)
0.0
0.0
36.6
153.5
0.0
0.0
0.0
153.5
138.0
Aug-16F
211.7
0.0
211.7
(53.2)
158.5
0.0
(16.0)
(1.8)
0.0
140.7
0.0
140.7
(19.6)
0.0
0.0
0.0
121.1
(0.6)
0.0
0.0
120.5
142.6
Aug-17F
217.7
0.0
217.7
(54.3)
163.4
0.0
(16.0)
(1.8)
0.0
145.7
0.0
145.7
(19.6)
0.0
0.0
0.0
126.1
(0.5)
0.0
0.0
125.6
146.2
Aug-18F
224.2
0.0
224.2
(55.9)
168.3
0.0
(16.0)
(1.8)
0.0
150.5
0.0
150.5
(19.6)
0.0
0.0
0.0
130.9
(0.1)
0.0
0.0
130.8
148.9
Aug-14A
228
22
21
0
(96)
175
(3)
(1,306)
(18)
(1,327)
841
485
(115)
(18)
1,193
40
(1,152)
(329)
Aug-15A
154
21
1
0
(17)
158
(15)
0
0
(15)
0
0
(138)
(19)
(157)
(13)
144
125
Aug-16F
121
20
0
(1)
20
160
0
0
0
0
0
0
(143)
(20)
(162)
(2)
160
141
Aug-17F
126
20
0
(0)
19
164
0
0
0
0
0
0
(146)
(20)
(166)
(2)
165
145
Aug-18F
131
20
0
(0)
17
167
0
0
0
0
0
0
(149)
(20)
(169)
(1)
168
148
Cash Flow
(S$m)
Pre-tax Profit
Tax Paid
Others
Capex
Dividends Paid
263
BY THE NUMBERS
Balance Sheet
(S$m)
Total Investments
Intangible Assets
Inventories
Trade Debtors
Trade Creditors
Short-term Debt
Minority Interests
Total Equity
Aug-14A
3,159
12
1
3,172
91
0
6
0
97
35
0
0
35
843
38
881
2,353
0
Aug-16F
3,211
6
5
3,221
75
0
5
0
80
30
0
0
30
843
37
880
2,392
0
Aug-17F
3,211
3
5
3,218
73
0
5
0
79
30
0
0
30
843
37
880
2,387
0
Aug-18F
3,211
2
5
3,217
72
0
5
0
78
30
0
0
30
843
37
880
2,385
0
2,398
2,392
2,387
2,385
Aug-14A
2.80%
4.35%
74.4%
5.05%
6.71
0.00%
66%
2.75
2.75
2.58
7.14%
Aug-15A
(7.99%)
(6.20%)
75.9%
(8.77%)
6.37
0.00%
90%
0.30
0.30
0.28
4.67%
Aug-16F
3.20%
1.84%
74.9%
2.61%
7.10
0.53%
118%
2.66
2.66
2.48
3.65%
Aug-17F
2.86%
3.13%
75.1%
2.19%
7.35
0.37%
116%
2.60
2.60
2.43
3.81%
Aug-18F
2.97%
2.94%
75.0%
1.83%
7.60
0.11%
114%
2.56
2.56
2.39
3.97%
Aug-14A
19.6
N/A
N/A
900
100.0%
N/A
N/A
Aug-15A
20.0
N/A
N/A
900
100.0%
N/A
N/A
Aug-16F
20.5
N/A
N/A
905
100.0%
N/A
N/A
Aug-17F
21.1
N/A
N/A
910
99.0%
N/A
N/A
Aug-18F
21.6
N/A
N/A
910
100.0%
N/A
N/A
2,353
Aug-15A
3,213
9
5
3,227
77
0
5
0
83
30
249
0
280
596
37
632
2,398
0
Key Ratios
NPI Growth
DPS Growth
Effective Tax Rate
Current Ratio
Quick Ratio
Cash Ratio
Key Drivers
RevPAR (S$)
Occupancy (%)
264
Company Note
Singapore
ST Engineering
HOLD (no change)
Conglomerate pains
Current price:
Target price:
Previous target:
Up/downside:
S$2.90
S$3.33
S$3.33
14.7%
Reuters:
Bloomberg:
Market cap:
STEG.SI
STE SP
US$6,369m
S$8,997m
US$7.01m
S$9.87m
3,120m
37.8%

Current shares o/s
Free float:
Structural challenges of new aircraft and engines still prevail.
Order drought in marine could drag longer than expected in a low-oil environment
Share price could trade sideways pending the provisions for stock obsolescence
that aerospace may be hit with in 4Q15.
Re-rating catalysts could come from defence /government-related order wins.
Delayed maintenance
Margins could be under pressure as the new 15-pallate PTF conversion goes through a
learning curve (first few deliveries in 2016). In the longer-term, aerospace could face
lower maintenance scope and longer interval for heavy checks for new generation
aircraft like the B737NG and A320neo. Better durability of the CFM engines is also
pushing back the overhaul cycle to 2017/18.
Marine lower for longer
We do not expect the commercial offshore capex to recover in the near term on the back
of a low oil price environment. In addition, defence contracts are taking longer to come
to fruition which could put pressure on its operating leverage in the US and Singapore
yards. Earnings gap in marine could be bigger-than-expected if no contracts are secured
in the next 12 months. The division has not won any major contracts since 2014.
No change
Price Close
Premium valuation questionable

3.60
106.9
3.10
100.4
2.60
15
94.0
Vol m
10
Since 3Q13, STE has been hit by various events contract award delays, impairment
charges, restructuring, provisions for stock obsolescence, doubtful debts and cost
overruns, mainly in the aerospace and marine sectors. The endless negative surprises
could be a long-term derating catalyst and multiple reversions to +1s.d trading band of
20-21x is unlikely in the near-term, especially on the back of lackluster earnings growth.
5
Dec-14
Mar-15
Jun-15
Electronics only bright spark
Sep-15
Source: Bloomberg
Price performance
Absolute (%)
Relative (%)
1M
-9.9
-5.4
3M
-2.4
-2.1
12M
-13.4
-0.6
Electronics is the key growth driver, supported by demand for infor-com, mass-rapid
train infrastructure. satellite and homeland security spending by government agencies.
STE is still contending for the ERP2 contract which is likely to be announced in 2016.
We believe the project size, including maintenance contracts could amount to S$800m1bn.
Maintain Hold
Relative to other conglomerates in Singapore (KEP and SCI), STEs order book of
S$12.2bn is secured mainly from long-term contracts which are less susceptible to
cancellations. Order win is still decent: aerospace and electronics have secured S$1.7bn
and S$1.1bn of orders YTD. We believe the momentum is likely to continue in FY16.
Dividend yield is attractive, backed by net cash of c.S$600m (incl. cash in investments).
Our target price is intact, still based on blended 18x CY17 P/E, DCF and dividend yield.
[X]
Financial Summary
Analyst
LIM Siew Khee
T (65) 6210 8664
Revenue (S$m)
Net Profit (S$m)
Core EPS (S$)
Core EPS Growth
FD Core P/E (x)
DPS (S$)
Dividend Yield
EV/EBITDA (x)
P/FCFE (x)
Net Gearing
P/BV (x)
ROE
Dec-13A
6,633
845.2
580.8
0.19
(1.16%)
15.43
0.15
5.17%
9.30
14.30
(38.3%)
4.27
29.0%
Dec-14A
6,539
760.8
532.0
0.17
(8.39%)
17.01
0.15
5.17%
10.82
NA
(20.8%)
4.24
25.0%
Dec-15F
6,302
744.2
504.5
0.16
(5.20%)
17.93
0.14
4.74%
11.04
22.63
(18.8%)
4.10
23.2%
0%
0.96
Dec-16F
6,501
764.3
534.7
0.17
5.98%
16.92
0.14
4.73%
10.74
23.21
(16.4%)
3.91
23.6%
0%
0.98
Dec-17F
6,750
730.1
579.5
0.19
8.39%
15.61
0.15
5.12%
11.31
24.71
(11.9%)
3.72
24.4%
0%
1.00

Powered by
EFA
BY THE NUMBERS
Share price info

Share px perf. (%)
1M
3M
12M
Relative
-5.4
-2.1
-0.6
Absolute
-9.9
-2.4
-13.4
Major shareholders
Temasek
% held
50.8
6.0
Capital Research Global Investor
5.5
P/BV vs ROE
8.00
7.00
6.00
5.00
4.00
3.00
2.00
1.00
0.00
35.0%
30.6%
26.3%
21.9%
17.5%
13.1%
8.8%
4.4%
0.0%

Growth
30.0
15.0%
25.0
10.0%
20.0
5.0%
15.0
0.0%
10.0
-5.0%
5.0
-10.0%
0.0
-15.0%
ROE (rhs)
Profit & Loss

(S$m)
Total Net Revenues
Gross Profit
Operating EBITDA
Operating EBIT
Exceptional Items
Pre-tax Profit
Taxation
Profit After Tax
Minority Interests
Preferred Dividends
Net Profit
Dec-13A
6,633
5,233
845
(138)
707
(9)
31
0
730
0
730
(138)
Dec-14A
6,539
5,159
761
(166)
595
(2)
57
0
651
0
651
(114)
Dec-15F
6,302
4,972
744
(146)
599
(11)
50
0
638
0
638
(126)
Dec-16F
6,501
5,128
764
(148)
616
4
54
0
674
0
674
(132)
Dec-17F
6,750
5,325
730
(69)
661
5
56
0
722
0
722
(137)
592
(11)
0
537
(5)
0
512
(8)
0
541
(6)
0
585
(6)
0
581
581
581
532
532
532
504
504
504
535
535
535
580
580
580
Cash Flow
(S$m)
EBITDA
Tax Paid
Capex
Shares Repurchased
Dividends Paid
Preferred Dividends
Dec-13A
845
Dec-14A
761
Dec-15F
744
Dec-16F
764
Dec-17F
730
100
(92)
55
(0)
28
242
(21)
(110)
1,057
(282)
10
(84)
98
(258)
(173)
52
(11)
(133)
526
(224)
5
(90)
152
(157)
(472)
17
(11)
(126)
663
(250)
0
0
(13)
(263)
0
0
4
(132)
635
(250)
0
0
5
(245)
0
0
5
(137)
626
(250)
0
0
(10)
(260)
0
0
(521)
(499)
(429)
(428)
(464)
(642)
158
627
840
(954)
(586)
(104)
403
(429)
(29)
400
455
(428)
(38)
390
443
(464)
(98)
366
421
266
BY THE NUMBERS
Balance Sheet
(S$m)
Total Debtors
Inventories
Fixed Assets
Total Investments
Intangible Assets
Short-term Debt
Total Creditors
Total Provisions
Total Liabilities
Minority Interests
Total Equity
Dec-13A
1,930
1,873
1,808
151
5,761
1,520
628
638
158
2,945
433
Dec-14A
1,471
1,927
1,802
126
5,326
1,578
606
671
139
2,993
74
Dec-15F
1,442
1,809
1,727
126
5,104
1,682
669
671
139
3,161
74
Dec-16F
1,404
1,884
1,786
126
5,201
1,784
718
671
139
3,312
74
Dec-17F
1,306
1,918
1,852
126
5,203
1,965
784
671
139
3,559
74
2,484
1,177
4,094
631
2,477
1,166
3,716
926
2,424
1,139
3,636
926
2,502
1,155
3,731
926
2,597
1,161
3,832
926
1,627
2,258
95
6,447
2,116
144
2,260
1,304
2,230
108
6,055
2,132
132
2,265
1,246
2,172
108
5,917
2,208
140
2,348
1,286
2,212
108
6,051
2,315
147
2,462
1,312
2,238
108
6,179
2,431
153
2,583
Dec-13A
3.97%
0.83%
12.7%
0.28
0.68
9.10
18.9%
89.7%
65.84
486.0
218.8
30.3%
22.8%
7.16%
Dec-14A
(1.41%)
(9.99%)
11.6%
0.15
0.68
13.17
17.5%
93.8%
71.58
477.1
223.2
19.9%
18.8%
6.32%
Dec-15F
(3.63%)
(2.18%)
11.8%
0.14
0.71
10.85
19.7%
85.0%
74.08
484.1
221.8
19.1%
18.8%
6.29%
Dec-16F
3.15%
2.71%
11.8%
0.13
0.74
11.54
19.7%
80.0%
70.99
468.5
216.9
19.7%
19.2%
6.41%
Dec-17F
3.84%
(4.47%)
10.8%
0.10
0.78
12.05
19.0%
80.0%
70.94
466.0
214.7
20.1%
19.9%
6.73%
Dec-13A
3.4%
N/A
31.7%
N/A
6.6%
25.4%
N/A
N/A
N/A
N/A
N/A
N/A
Dec-14A
-0.8%
N/A
31.5%
N/A
-4.1%
24.7%
N/A
N/A
N/A
N/A
N/A
N/A
Dec-15F
0.4%
N/A
31.7%
N/A
9.0%
27.9%
N/A
N/A
N/A
N/A
N/A
N/A
Dec-16F
5.0%
N/A
33.0%
N/A
10.0%
29.8%
N/A
N/A
N/A
N/A
N/A
N/A
Dec-17F
3.5%
N/A
33.6%
N/A
0.0%
5.4%
N/A
N/A
N/A
N/A
N/A
N/A
Key Ratios
Revenue Growth
BVPS (S$)
Effective Tax Rate
Inventory Days
ROIC (%)
ROCE (%)
Key Drivers
267
Company Note
Singapore
Starhill Global REIT
HOLD (no change)
Moving along
Current price:
Target price:
Previous target:
Up/downside:
S$0.77
S$0.87
S$0.87
12.4%
Reuters:
Bloomberg:
Market cap:
STHL.SI
SGREIT SP
US$1,189m
S$1,680m
US$0.74m
S$1.04m
2,181m
54.1%

Current shares o/s
Free float:
105.3
0.700
100.1
0.600
8
6
4
2
95.0
Vol m
110.4
0.800
Mar-15
Jun-15
Sep-15
Source: Bloomberg
Price performance
Absolute (%)
Relative (%)
1M
-2.5
2.0
Singapore income expanding, offsetting weaker China and Malaysia.

Lease renewals at numerous properties drive near-term growth.
Phase 1 of Plaza Arcade redevelopment pending finalisation.
Maintain Hold with DDM-based target price of S$0.87.
Well located portfolio

SGREIT offers investors a diversified portfolio that spans across Singapore, Australia,
Malaysia and Japan. These assets are well located within prime shopping areas.
Overseas assets account for estimated 32.5% of asset value and 39.9% of gross
revenue.
Singapore revenue and NPI grew 4.5% and 3.6%, respectively, in 1QFY6/16. Although
there was a 7.3% negative rental reversion for Wisma Atria retail, to accommodate new
retail concepts, this was more than offset by a 1% point increase in occupancy to 100%
and higher office income thanks to a 3.5% rental uplift on reversion. Wisma Atria also
saw tenant sales rising 1.1% yoy despite a 9.7% drop in shopper traffic. Ngee Ann City
(NAC) continued to enjoy rental improvements amid fully-leased office spaces.
0.900
Dec-14
Well located portfolio; overseas exposure account for 33-40% of asset value and
revenue.
Singapore income expanding
No change
Price Close
3M
3.4
3.7
12M
-4.4
8.4
Lease renewals to drive near-term growth

SGREIT has 24.5% of its retail and 22.9% of its office rental income up for renewal
towards late-FY16. This includes renewal of the master lease of Starhill Gallery in
Malaysia and rent review of NAC, both in Jun 16, and expiry of office and retail leases in
Singapore and Myer Centre Adelaide (MAC). We anticipate SGREIT to continue
benefiting from the slightly positive office rental reversion in Singapore due to limited
supply in the vicinity of its assets. Better renewal rents and occupancy at MCA should
also lift earnings.
Phase 1 Plaza Arcade redevelopment pending finalisation

Phase 1 of the redevelopment of Plaza Arcade in Perth is pending and talks are ongoing
to secure and accommodate anchor tenants and optimise its upper storey space. With a
gearing of 35.7%, the REIT has significant debt headroom to undertake any capex to
enhance the returns of its properties.
Retain Hold call

SGREITs medium-term outlook remains positive with numerous earnings drivers from
its existing assets. However, in the near term, given its FY16 DPU yield of 6.8%, in line
with peers) and forex risks, we retain our Hold call and DDM-based target price of
S$0.87.
[X]
Financial Summary
Analyst
LOCK Mun Yee
T (65) 6210 8606

Net Profit (S$m)
Core EPS (S$)
Core EPS Growth
FD Core P/E (x)
DPS (S$)
Dividend Yield
Asset Leverage
BVPS (S$)
P/BV (x)
Recurring ROE
Jun-14A
198.9
158.4
184.1
106.8
0.052
1.88%
14.70
0.042
5.45%
31.1%
0.93
0.83
5.79%
Jun-15A
197.1
158.9
116.8
108.8
0.051
(2.24%)
15.03
0.034
4.38%
35.4%
0.91
0.85
5.56%
Jun-16F
221.5
173.2
114.0
111.8
0.052
2.01%
14.74
0.051
6.65%
35.3%
0.91
0.85
5.74%
0.97
Jun-17F
227.6
176.9
117.6
117.0
0.054
3.19%
14.28
0.054
6.97%
35.3%
0.91
0.85
5.92%
0.98
Jun-18F
235.0
182.5
123.0
122.0
0.056
4.59%
13.66
0.056
7.26%
35.3%
0.91
0.85
6.19%
1.02

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Share price info

Share px perf. (%)
1M
3M
12M
Relative
2.0
3.7
8.4
Absolute
-2.5
3.4
-4.4
Major shareholders
YTL Corp Bhd
AIA Co. Ltd
% held
37.1
8.8
1.200
40.0%
0.0600
8.00%
1.000
33.3%
0.0500
6.67%
0.800
26.7%
0.0400
5.33%
0.600
20.0%
0.0300
4.00%
0.400
13.3%
0.0200
2.67%
0.200
6.7%
0.0100
1.33%
0.000
0.0%
0.0000
0.00%
DPS (lhs)
Profit & Loss

(S$m)
Rental Revenues
Other Revenues
Net Property Income
Management Fees
Trustee's Fees
EBITDA
EBIT
Net Interest Income
Associates' Profit
Exceptional Items
Pre-tax Profit
Taxation
Minority Interests
Preferred Dividends
Net Profit
Jun-14A
198.9
0.0
198.9
(40.5)
158.4
0.0
(14.6)
(3.0)
0.0
140.7
0.0
140.7
(30.0)
0.0
0.0
74.5
185.3
(1.3)
0.0
0.0
184.1
106.8
Jun-15A
197.1
0.0
197.1
(38.2)
158.9
0.0
(15.0)
(3.0)
0.0
140.9
0.0
140.9
(30.3)
0.0
0.0
5.8
116.4
0.4
0.0
0.0
116.8
108.8
Jun-16F
221.5
0.0
221.5
(48.3)
173.2
0.0
(15.0)
(3.0)
0.0
155.2
0.0
155.2
(35.9)
0.0
0.0
0.0
119.3
(5.4)
0.0
0.0
114.0
111.8
Jun-17F
227.6
0.0
227.6
(50.7)
176.9
0.0
(15.0)
(3.0)
0.0
159.0
0.0
159.0
(35.7)
0.0
0.0
0.0
123.3
(5.7)
0.0
0.0
117.6
117.0
Jun-18F
235.0
0.0
235.0
(52.4)
182.5
0.0
(15.0)
(3.0)
0.0
164.6
0.0
164.6
(35.6)
0.0
0.0
0.0
128.9
(6.0)
0.0
0.0
123.0
122.0
Jun-14A
185.3
30.0
3.2
(3.0)
(74.0)
141.5
(2.8)
(141.0)
9.5
(134.4)
121.5
0.0
(107.4)
(32.3)
(18.2)
(11.1)
7.9
97.1
Jun-15A
116.4
30.3
2.9
(2.5)
(5.1)
142.0
(2.5)
(218.0)
9.3
(211.1)
205.9
0.0
(109.6)
(29.7)
66.7
(2.5)
(68.1)
108.1
Jun-16F
119.3
35.9
15.6
(5.4)
0.0
165.5
(0.3)
(8.9)
2.5
(6.7)
8.1
0.0
(111.8)
(37.0)
(140.7)
18.1
159.8
130.9
Jun-17F
123.3
35.7
1.5
(5.7)
0.0
154.7
(0.3)
(4.3)
2.1
(2.5)
3.5
0.0
(117.0)
(37.1)
(150.6)
1.6
153.6
120.0
Jun-18F
128.9
35.6
1.7
(6.0)
0.0
160.4
(0.3)
(0.8)
2.2
1.1
0.0
0.0
(122.0)
(37.1)
(159.1)
2.4
162.9
125.8
Cash Flow
(S$m)
Pre-tax Profit
Tax Paid
Others
Capex
Dividends Paid
269
BY THE NUMBERS
Balance Sheet
(S$m)
Total Investments
Intangible Assets
Inventories
Trade Debtors
Trade Creditors
Short-term Debt
Minority Interests
Total Equity
Jun-14A
2,941
11
10
2,962
56
0
9
0
64
41
84
2
127
856
42
898
2,001
0
Jun-16F
3,125
11
13
3,149
70
0
5
0
75
53
147
2
202
990
47
1,037
1,985
0
Jun-17F
3,128
11
14
3,154
71
0
5
0
77
54
147
2
204
993
48
1,041
1,986
0
Jun-18F
3,129
11
15
3,155
74
0
5
0
79
56
147
2
206
993
49
1,042
1,987
0
1,983
1,985
1,986
1,987
Jun-14A
3.0%
3.56%
79.6%
(10.5%)
4.58
0.68%
58.0%
0.51
0.51
0.44
6.25%
Jun-15A
(0.9%)
0.32%
80.6%
(19.5%)
4.50
0.00%
93.2%
0.31
0.31
0.28
3.81%
Jun-16F
12.4%
9.02%
78.2%
51.8%
4.20
4.50%
98.1%
0.37
0.37
0.34
3.55%
Jun-17F
2.8%
2.17%
77.7%
4.7%
4.29
4.64%
99.5%
0.38
0.38
0.35
3.64%
Jun-18F
3.2%
3.16%
77.7%
4.3%
4.44
4.62%
99.2%
0.38
0.38
0.36
3.80%
Jun-14A
11.7
N/A
N/A
1,681
97.6%
N/A
N/A
Jun-15A
11.9
N/A
N/A
2,273
93.9%
N/A
N/A
Jun-16F
12.0
N/A
N/A
2,273
93.4%
N/A
N/A
Jun-17F
12.3
N/A
N/A
2,273
93.7%
N/A
N/A
Jun-18F
12.7
N/A
N/A
2,273
93.9%
N/A
N/A
2,001
Jun-15A
3,116
11
9
3,137
52
0
5
0
57
37
146
2
185
983
42
1,025
1,983
0
Key Ratios
NPI Growth
DPS Growth
Effective Tax Rate
Current Ratio
Quick Ratio
Cash Ratio
Key Drivers
RevPAR (S$)
Occupancy (%)
270
Company Note
Singapore
Starhub
HOLD (no change)
Not a starry-starry night
Current price:
Target price:
Previous target:
Up/downside:
S$3.58
S$3.80
S$3.80
6.1%
Reuters:
Bloomberg:
Market cap:
STAR.SI
STH SP
US$4,379m
S$6,186m
US$3.81m
S$5.37m
2,826m
33.2%

Current shares o/s
Free float:
No change.
Price Close
3.80
98.0
3.30
8
6
4
2
93.0
Vol m
103.0
Mar-15
Jun-15
Sep-15
Source: Bloomberg
Price performance
Absolute (%)
Relative (%)
StarHubs mobile business is at risk of being impacted from FY17 onwards by the
potential entry of a fourth mobile operator.
Impact should be lesser vs. M1, as the mobile business accounts for a smaller 56%
of StarHubs total service revenue and given its ability to bundle quad-play services.
Annual DPS should stay at S$0.20 in FY15-17. Special dividends are unlikely.
Maintain Hold with unchanged DCF-based target price of S$3.80. Scenario analysis
suggest a target price of S$3.00 in bear case and S$4.25 in bull case.
At risk from fourth mobile operator but impact should be lesser

While we expect fixed broadband revenue to bottom out in FY15, StarHubs mobile
business is at risk of being impacted from FY17 by the potential entry of a fourth mobile
operator. Nevertheless, the impact to StarHub should be lesser than M1, as its mobile
business accounts for only 56% of its service revenue and its ability to bundle quad-play
services may put it in a stronger position to defend its mobile market share.
Sensitivity analysis on target price
4.30
Dec-14
1M
-2.5
2.0
3M
-0.8
-0.5
12M
-11.8
1.0
We have factored in a negative 15% impact to StarHubs mobile ARPU between mid2017 and 2020. The impact could be worse if the new entrant employs more aggressive
pricing strategies, or lesser if the new entrants execution is poor (network, branding).
Our sensitivity analysis suggests that our target price for StarHub would fall to S$3.00 if
its mobile ARPU is negatively impacted by 30% (bear-case) by FY20. If the negative
impact on its mobile ARPU is only 5% (bull-case), our target price would be at S$4.25.
Broadband flattening out

On the positive side, StarHubs broadband business has started to stabilise. Revenue
rose 4.3% qoq (+3.9% yoy) in 3Q15, the third consecutive quarter of qoq improvement.
Given the significant price adjustments made last year and current competition centred
around higher-speed packages (e.g. 1Gbps for S$49/month), we believe that ARPU has
bottomed out at the current levels of S$33-34. We forecast broadband revenue to fall
3.8% yoy in FY15, and then recover 3.1%/1.5% yoy in FY16/17.
Dividends to stay the same

Overall, we forecast EBITDA to rise 3.8% in FY15 on higher service revenue, then hit
slower growth rates of 1.9%/2.1% in FY16/17 as NBN grants come to an end. In terms
of dividends, we do not expect StarHub to raise its annual S$0.20 DPS as FCF/share
will stay at S$0.21-0.23 in FY15-17 due to high capex and spectrum payments
(1800MHz, 900MHz). Given the business headwinds, we believe StarHub will not pay
any special dividends during FY15-17 to maintain some flexibility in its balance sheet.
Maintain Hold with unchanged DCF-based target price of S$3.80

Maintain Hold with an unchanged DCF-based target price (WACC: 7.1%). StarHub
trades at FY16 EV/OpFCF of 12.5x, 9% discount to ASEAN telcos average, while its
FY16 EV/EBITDA of 8.3x is in line. Its dividend yield of 5.6% p.a. is decent. Key upside
risk is the non-entry of a fourth mobile player into Singapore. Key downside risk is
higher-than-expected negative impact on StarHubs mobile ARPU from new competition.
[X]
Financial Summary
Analyst
T (60) 3 2261 9081
Revenue (S$m)
Net Profit (S$m)
Core EPS (S$)
Core EPS Growth
FD Core P/E (x)
DPS (S$)
Dividend Yield
EV/EBITDA (x)
P/FCFE (x)
Net Gearing
ROE
Dec-13A
2,370
743.0
31.4%
379.5
0.22
5.52%
16.29
0.20
5.59%
8.86
22.36
480%
601%
Dec-14A
2,387
747.9
31.3%
370.5
0.21
(2.56%)
16.72
0.20
5.59%
8.83
19.76
272%
320%
Dec-15F
2,444
776.3
31.8%
386.4
0.22
4.17%
16.05
0.20
5.59%
8.51
19.51
212%
228%
0%
1.05
Dec-16F
2,461
791.0
32.1%
375.0
0.22
(2.96%)
16.54
0.20
5.59%
8.35
19.01
183%
183%
0%
1.02
Dec-17F
2,526
807.7
32.0%
391.8
0.23
4.49%
15.83
0.20
5.59%
8.03
13.40
106%
161%
0%
1.07

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Share price info

Share px perf. (%)
1M
3M
12M
P/BV vs ROE

Growth
250
1,200%
25.0
25.0%
200
960%
20.0
16.0%
% held
150
720%
15.0
7.0%
STT Com Ltd
49.2
100
480%
10.0
-2.0%
NTT Communication
10.1
50
240%
5.0
-11.0%
0%
0.0
-20.0%
Relative
Absolute
Major shareholders
Temasek Capital
2.0
-2.5
-0.5
-0.8
1.0
-11.8
7.5
0
ROE (rhs)
Profit & Loss

Slower growth as there are no NBN
grants from FY16 onwards
(S$m)
Total Net Revenues
Gross Profit
Operating EBITDA
Operating EBIT
Exceptional Items
Pre-tax Profit
Taxation
Profit After Tax
Minority Interests
Preferred Dividends
Net Profit
Dec-13A
2,370
693
743
(270)
474
(16)
0
0
458
Dec-14A
2,387
701
748
(271)
477
(21)
0
0
456
Dec-15F
2,444
727
776
(290)
486
(21)
0
0
466
Dec-16F
2,461
791
791
(319)
472
(21)
0
0
452
Dec-17F
2,526
808
808
(316)
492
(20)
0
0
472
458
(78)
456
(86)
466
(79)
452
(77)
472
(80)
380
0
371
0
386
0
375
0
392
0
380
380
380
371
371
371
386
386
386
375
375
375
392
392
392
Cash Flow
High capex for 4G network, fibre

rollout and TV broadcasting centre
(S$m)
EBITDA
Tax Paid
Capex
Shares Repurchased
Dividends Paid
Preferred Dividends
Dec-13A
743.0
(17.5)
Dec-14A
747.9
8.1
Dec-15F
776.3
0.0
0.0
Dec-16F
791.0
0.0
0.0
Dec-17F
807.7
0.0
0.0
(41.8)
(18.8)
(89.0)
575.9
(302.8)
0.6
0.0
2.8
(299.4)
0.0
0.8
(35.8)
(22.6)
(65.3)
632.3
(321.6)
0.8
0.0
2.0
(318.8)
0.0
0.6
(41.0)
(22.6)
(79.1)
633.5
(317.7)
0.0
0.0
2.0
(315.7)
0.0
0.0
8.0
(22.6)
(76.8)
699.6
(295.3)
0.0
0.0
(78.0)
(373.3)
0.0
0.0
8.0
(22.6)
(80.2)
712.9
(252.6)
0.0
0.0
2.5
(250.1)
0.0
0.0
(344.2)
(345.2)
(345.1)
(345.1)
(345.1)
2.5
(340.9)
(64.4)
276.5
295.3
5.6
(339.0)
(25.5)
313.5
336.1
7.4
(337.7)
(19.8)
317.8
340.4
(2.6)
(347.7)
(21.4)
326.3
348.9
(22.6)
(367.7)
95.1
462.7
485.3
272
BY THE NUMBERS
Balance Sheet
Net debt/EBITDA of 0.5x
(S$m)
Total Debtors
Inventories
Fixed Assets
Total Investments
Intangible Assets
Short-term Debt
Total Creditors
Total Provisions
Total Liabilities
Minority Interests
Total Equity
Dec-13A
291
124
43
154
612
857
0
381
0
1,238
0
Dec-14A
282
162
42
186
672
911
0
405
0
1,316
200
Dec-15F
284
125
45
186
640
971
0
372
0
1,343
200
Dec-16F
286
158
40
186
670
980
0
419
0
1,400
200
Dec-17F
403
126
47
186
763
950
0
387
0
1,337
200
754
148
902
688
796
197
1,193
488
746
197
1,144
488
721
197
1,118
488
757
197
1,154
488
21
709
157
1,767
83
0
83
7
495
151
1,838
149
0
149
7
495
154
1,792
190
0
190
7
495
236
1,849
220
0
220
7
495
184
1,833
267
0
267
Dec-13A
(2.15%)
3.22%
31.4%
(0.23)
0.05
25.19
17.0%
91.1%
20.47
7.76
161.3
64.9%
52.5%
21.5%
Dec-14A
0.74%
0.66%
31.3%
(0.23)
0.09
21.09
18.8%
93.5%
21.80
9.27
167.7
58.9%
50.0%
20.2%
Dec-15F
2.37%
3.79%
31.8%
(0.23)
0.11
21.51
17.0%
89.7%
21.38
9.27
164.0
56.6%
48.4%
20.3%
Dec-16F
0.69%
1.89%
32.1%
(0.23)
0.13
20.90
17.0%
92.4%
21.01
9.29
160.8
51.9%
43.6%
19.4%
Dec-17F
2.65%
2.12%
32.0%
(0.16)
0.15
21.78
17.0%
88.4%
20.55
9.27
156.9
47.2%
43.3%
19.6%
Dec-13A
2.35
N/A
0.45
0.53
35.5
N/A
35
41.6
Dec-14A
2.15
N/A
0.47
0.54
36.1
N/A
28
41.0
Dec-15F
2.17
N/A
0.49
0.55
35.4
N/A
24
38.0
Dec-16F
2.24
N/A
0.50
0.55
34.3
N/A
23
37.2
Dec-17F
2.29
N/A
0.50
0.56
33.3
N/A
23
38.2
Key Ratios
Lower handset subsidies largely offset

by expiry of NBN grants
Revenue Growth
BVPS (S$)
Effective Tax Rate
Inventory Days
ROIC (%)
ROCE (%)
Key Drivers
Broadband competition has stabilised
273
Company Note
Singapore
Straco Corporation
ADD (no change)
2017 is the year to watch
Current price:
Target price:
Previous target:
Up/downside:
S$0.86
S$1.00
S$1.00
16.5%
Reuters:
Bloomberg:
Market cap:
STRA.SI
STCO SP
US$517.8m
S$731.5m
US$0.01m
S$0.02m
847.5m
18.1%

Current shares o/s
Free float:
No change.
Price Close
Catalysts ahead include: 1) opening of Shanghai Disneyland in 2016, which will

drive higher visitation to SOA, and 2) ticket price hike at SOA and UWX in 2017.
STCO has strong operating cashflow generation, with sufficient net cash of S$64m
to fund redevelopment of the retail terminal at the Singapore Flyer (S$20m-30m).
Strong operating leverage as c.80% of its costs for its aquariums are fixed.
Maintain Add, with a DCF-based target price of S$1.00 (12% WACC).
Underwater World Xiamen to bottom out in 1Q16

Underwater World Xiamen (UWX) has seen 25-30% yoy fall in visitor arrivals in 2Q153Q15, due to: 1) cap on daily visitation to Gulangyu island where it is located, and 2)
relocation of the ferry terminal to the opposite end of the island from the aquarium. We
expect a bottoming out of visitor arrivals at UWX in 1Q16, with mitigating measures put
in place such as extended operating hours and completion of landscape improvement
works in early 2016.
Shanghai Disneyland to be the catalyst in FY16
Shanghai Disneyland is slated to open in the spring of 2016, and is expected to receive
7m-10m visitors annually. This compares to the 7.5m and 14.2m visitors that Hong Kong
Disneyland and Paris Disneyland received, respectively, in 2014. We expect the opening
of Shanghai Disneyland to drive stronger visitation at Shanghai Ocean Aquarium (SOA)
in 2H16.
149.0
1.000
129.0
Ticket price hike in FY17 to be the key catalyst
0.800
109.0
0.600
2
2
1
1
89.0
We have factored in a 15% ticket price hike at SOA and a 12.5% price hike at UWX in
2017, in line with previous price hikes. We expect this to be the key reason driving
17.5% earnings growth in FY17. We view the ticket price hikes as the key catalyst to
look out for, as the entire amount of the price hike will flow through to the bottomline.
Vol m
1.200
Dec-14
Mar-15
Jun-15
Redevelopment at the Flyer
Sep-15
Source: Bloomberg
Price performance
Absolute (%)
Relative (%)
1M
-1.7
2.8
3M
-4.5
-5.3
12M
14.0
27.5
Redevelopment plans for the retail terminal of the Flyer remain underway, with
construction expected to commence in 2016. The development cost is estimated at
S$20m-30m which can be funded via internal cash. As at end-3Q15, STCO has net
cash of S$64.0m. We also expect better rental income at the Flyer post-redevelopment,
which we have yet to factor in our forecast, pending details on the redevelopment plans.
Maintain Add
We maintain our Add call with an unchanged DCF-based target price of S$1.00 (WACC:
12%). STCO remains a beneficiary of rising domestic consumption and demand for
travel in China. We continue to like it for its strong operating cashflow generation and
operating leverage, as c.80% of its costs for its aquariums are fixed. The key catalyst to
look out for is the ticket price hike in FY17. Its dividend yield of 3% is also decent.
[X]
Financial Summary
Analyst
Jessalynn CHEN
T (65) 6210 8672
Revenue (S$m)
Net Profit (S$m)
Normalised EPS (S$)
DPS (S$)
Dividend Yield
EV/EBITDA (x)
P/FCFE (x)
Net Gearing
P/BV (x)
ROE
Dec-13A
72.8
48.6
34.10
0.040
74.4%
21.23
0.020
2.34%
12.66
52.19
(65.9%)
4.48
23.4%
Dec-14A
92.3
57.1
37.69
0.044
9.9%
19.17
0.020
2.34%
12.50
NA
(9.8%)
3.88
21.7%
Dec-15F
127.8
82.2
49.72
0.058
30.5%
14.65
0.025
2.92%
8.30
12.74
(26.6%)
3.34
24.5%
0%
1.00
Dec-16F
134.8
88.5
54.26
0.063
9.1%
13.50
0.028
3.22%
7.39
14.34
(34.9%)
2.91
23.0%
0%
1.01
Dec-17F
156.2
101.3
63.75
0.074
17.5%
11.49
0.030
3.51%
5.95
9.73
(47.4%)
2.51
23.4%
0%
1.01

Powered by
EFA
BY THE NUMBERS
Share price info

Share px perf. (%)
1M
3M
12M
Relative
2.8
-5.3
27.5
Absolute
-1.7
-4.5
Major shareholders
14.0
% held
Straco Holding Pte Ltd
37.4
China Poly Group Corporation
22.5
Straco (HK) Limited
17.1
P/BV vs ROE
5.00
4.50
4.00
3.50
3.00
2.50
2.00
1.50
1.00
0.50
0.00
30.0%
27.0%
24.0%
21.0%
18.0%
15.0%
12.0%
9.0%
6.0%
3.0%
0.0%

18.0
16.0
14.0
12.0
10.0
8.0
6.0
4.0
2.0
0.0
100%
87%
73%
60%
47%
33%
20%
7%
-7%
-20%
ROE (rhs)
Profit & Loss

(S$m)
Total Net Revenues
Gross Profit
Operating EBITDA
Operating EBIT
Exceptional Items
Pre-tax Profit
Taxation
Profit After Tax
Minority Interests
Preferred Dividends
Net Profit
Dec-13A
72.8
72.8
48.6
(3.9)
44.7
3.2
0.0
2.3
50.3
Dec-14A
92.3
92.3
57.1
(4.5)
52.5
3.2
0.0
2.0
57.6
Dec-15F
127.8
127.8
82.2
(11.2)
70.9
1.1
0.0
1.9
74.0
Dec-16F
134.8
134.8
88.5
(11.6)
76.8
1.9
0.0
2.0
80.7
Dec-17F
156.2
156.2
101.3
(11.6)
89.7
2.8
0.0
2.3
94.9
50.3
(14.9)
57.6
(18.4)
74.0
(21.5)
80.7
(23.4)
94.9
(27.5)
35.4
(1.3)
39.3
(1.6)
52.5
(2.8)
57.3
(3.1)
67.4
(3.6)
34.1
35.4
34.1
37.7
39.3
37.7
49.7
52.5
49.7
54.3
57.3
54.3
63.8
67.4
63.8
Cash Flow
(S$m)
EBITDA
Tax Paid
Capex
Shares Repurchased
Dividends Paid
Preferred Dividends
Dec-13A
48.6
Dec-14A
57.1
Dec-15F
82.2
Dec-16F
88.5
Dec-17F
101.3
1.3
(3.1)
1.7
0.3
1.0
(3.3)
(2.3)
3.2
(14.3)
33.3
(1.4)
(3.3)
1.7
3.2
(20.7)
34.9
(1.2)
(2.9)
0.0
1.1
(21.5)
60.6
(6.4)
(3.7)
0.0
1.9
(23.4)
63.6
(16.2)
(4.6)
0.0
2.8
(27.5)
73.0
(2.3)
(18.0)
(19.5)
(111.8)
(113.1)
2.9
(3.5)
3.7
(12.5)
4.6
2.3
0.4
(0.1)
(11.8)
0.8
(0.6)
(18.2)
0.0
0.0
(16.9)
0.0
0.0
(21.7)
0.0
0.0
(23.8)
2.1
(9.5)
4.4
13.9
13.9
96.2
78.3
0.1
(78.2)
(78.0)
0.0
(16.9)
40.2
57.2
58.9
0.0
(21.7)
29.4
51.1
52.9
0.0
(23.8)
51.5
75.3
77.1
275
BY THE NUMBERS
Balance Sheet
(S$m)
Total Debtors
Inventories
Fixed Assets
Total Investments
Intangible Assets
Short-term Debt
Total Creditors
Total Provisions
Total Liabilities
Minority Interests
Total Equity
Dec-13A
108.1
4.1
1.0
21.7
134.8
47.1
0.0
1.4
0.0
48.5
0.0
Dec-14A
112.5
3.9
2.8
1.4
120.6
139.6
49.9
4.6
0.0
194.1
19.5
Dec-15F
147.1
5.4
3.9
1.4
157.8
134.8
49.9
4.6
0.0
189.3
12.0
Dec-16F
178.6
5.7
4.1
1.4
189.8
139.3
49.9
4.6
0.0
193.8
12.0
Dec-17F
232.4
6.6
4.7
1.4
245.2
130.1
49.9
4.6
0.0
184.6
12.0
10.2
7.0
17.2
0.0
11.1
2.7
33.2
73.9
15.4
2.7
30.0
73.9
16.2
2.7
30.9
73.9
18.8
2.7
33.4
73.9
0.2
0.2
1.9
19.3
160.9
3.1
164.0
0.2
74.1
13.1
120.3
186.6
7.7
194.4
0.2
74.1
13.1
117.1
219.4
10.5
230.0
0.2
74.1
13.1
118.0
252.0
13.6
265.6
0.2
74.1
13.1
120.5
292.0
17.2
309.2
Dec-13A
32.0%
57.4%
66.8%
0.13
0.19
22,342
29.6%
49.4%
17.30
N/A
N/A
91.9%
31.7%
19.7%
Dec-14A
26.7%
17.3%
61.8%
0.02
0.22
322
31.9%
45.0%
15.87
N/A
N/A
75.1%
23.9%
14.7%
Dec-15F
38.4%
44.0%
64.3%
0.07
0.26
40
29.0%
43.1%
13.32
N/A
N/A
42.5%
23.5%
15.6%
Dec-16F
5.5%
7.6%
65.6%
0.11
0.29
43
29.0%
43.4%
15.11
N/A
N/A
48.3%
23.2%
15.3%
Dec-17F
15.9%
14.5%
64.8%
0.17
0.34
50
29.0%
40.3%
14.41
N/A
N/A
54.6%
24.4%
16.0%
Dec-13A
0.0%
32.7%
23.3%
14.9%
13.0%
22.9%
1
1
N/A
Dec-14A
0.0%
20.0%
27.9%
4.9%
24.9%
28.6%
1
1
N/A
Dec-15F
0.0%
12.5%
31.4%
2.5%
-23.0%
22.0%
1
1
N/A
Dec-16F
0.0%
10.0%
34.6%
0.0%
2.0%
22.4%
1
1
N/A
Dec-17F
15.0%
5.0%
36.3%
12.5%
2.0%
22.9%
1
1
N/A
Key Ratios
Revenue Growth
BVPS (S$)
Effective Tax Rate
Inventory Days
ROIC (%)
ROCE (%)
Key Drivers
Outlets #/POS (main prod./serv.)
Outlets #/POS (2ndary prod./serv.)
A&P As % Of Sales
276
Company Note
Singapore
Suntec REIT
HOLD (no change)
Ramping up retail
Current price:
Target price:
Previous target:
Up/downside:
S$1.57
S$1.73
S$1.73
10.4%
Reuters:
Bloomberg:
Market cap:
SUNT.SI
SUN SP
US$2,802m
S$3,958m
US$5.09m
S$7.17m
2,506m
92.6%

Current shares o/s
Free float:
No change.
Suntec City Mall P3 opened in Jun 2015, boosting SUNs revenue and NPI for 9M15
by 18% yoy and 20% yoy, respectively.
Suntec Malls retail occupancy stood at 96.5% at end-Sep but overall passing rent of
S$12.03 psf/month as at 3QFY15 was lower than it originally anticipated.
Office portfolio continues to enjoy high occupancy, with positive rental reversion.
Park Mall sale and redevelopment are still in the works.
We are wary of the office downcycle, retail leasing risks and earnings vacuum from
the redevelopment of Park Mall. Hence, we maintain our Hold recommendation.
Suntec City Mall Phase 3 opens

SUNs revenue and NPI for 9M15 were up by 18% yoy and 20% yoy, respectively, due
to the opening of Suntec City Mall P2 and P3, as well as the stronger performance by
Suntec Singapore. The office portfolio achieved an average occupancy rate of 98.9%,
while retail achieved 96.5%. Overall, Suntec City has 96.4% committed occupancy.
Retail continues to ramp up but rent lower than anticipated
Price Close
Given the ongoing retail headwinds, overall committed passing retail rent of
S$12.0psf/month in 3Q15 was lower than the companys target of S$12.59psf/month.
With only 1.6% of retail net lettable area (NLA) remaining to be renewed for the rest of
2015, we think SUNs 4Q15 earnings will remain steady. Another 27.7% of space is due
to be renewed in FY15, largely from Suntec City Mall P1. We will continue to closely
monitor its renewal activities.
2.00
103.4
1.80
96.3
1.60
89.1
Office portfolio remains resilient
1.40
60
82.0
Committed occupancy for Suntec office towers rose marginally qoq to 99.5% in 3Q15,
with the latest leases securing rents of S$9.21psf/month. Park Malls committed
occupancy stood at 97.8% at end-Sep 2015. With only 1.4% of leases due to expire in
FY15 and another 21.4% in FY16, we think that the office portfolio will be fairly resilient.
Vol m
40
20
Dec-14
Mar-15
Jun-15
Sep-15
Source: Bloomberg
Price performance
Absolute (%)
Relative (%)
1M
-3.7
0.8
3M
1.9
2.2
12M
-17.4
-4.6
Unlocking value from Park Mall

SUN is set to sell Park Mall for S$411.8m to a JV company that plans to redevelop the
building into a commercial property comprising two office blocks with an ancillary retail
component. Post-development, SUN will have the option to buy one of the office towers.
The sale is subject to approval for the redevelopment and extension of the underlying
land lease to 99 years. With present net gearing of 35.8% and recycling of capital from
the sale, SUN is well positioned to undertake the exercise.
Maintain Hold
We are wary of the office downcycle, even though SUNs office portfolio remains
resilient. This, coupled with retail leasing risk from Phase 1 tenants entering their second
leasing cycle, and earnings vacuum from the redevelopment of Park Mall lead us to
maintain our Hold call, with an unchanged DDM-based target price.
[X]
Financial Summary
Analyst
LOCK Mun Yee
T (65) 6210 8606

Net Profit (S$m)
Core EPS (S$)
Core EPS Growth
FD Core P/E (x)
DPS (S$)
Dividend Yield
Asset Leverage
BVPS (S$)
P/BV (x)
Recurring ROE
Dec-13A
234.1
148.7
353.4
211.2
0.095
(18.2%)
16.55
0.09
5.94%
38.2%
2.13
0.74
4.51%
Dec-14A
282.4
191.6
320.8
230.3
0.094
(0.7%)
16.67
0.09
5.99%
34.8%
2.12
0.74
4.43%
Dec-15F
309.9
205.3
184.0
251.7
0.073
(22.3%)
21.47
0.10
6.35%
35.2%
2.14
0.74
3.44%
1.02
Dec-16F
345.3
233.9
200.8
252.7
0.079
8.4%
19.81
0.10
6.33%
35.2%
2.12
0.74
3.73%
0.99
Dec-17F
362.9
247.1
217.7
269.6
0.085
7.7%
18.40
0.11
6.71%
35.2%
2.10
0.75
4.05%
1.03

Powered by
EFA
BY THE NUMBERS
Share price info

Share px perf. (%)
1M
3M
Relative
0.8
2.2
Absolute
-3.7
1.9
Major shareholders
12M
-4.6
-17.4
% held
BLACKROCK INC
7.4
RAFFLES INVESTMENTS LTD
7.1
JINQUAN TONG
4.6
1.000
0.900
0.800
0.700
0.600
0.500
0.400
0.300
0.200
0.100
0.000
39.00%
38.40%
37.80%
37.20%
36.60%
36.00%
35.40%
34.80%
34.20%
33.60%
33.00%
0.1020
0.1000
0.0980
0.0960
0.0940
0.0920
0.0900
0.0880
0.0860
DPS (lhs)
6.50%
6.38%
6.25%
6.13%
6.00%
5.88%
5.75%
5.63%
5.50%
Profit & Loss

(S$m)
Rental Revenues
Other Revenues
Net Property Income
Management Fees
Trustee's Fees
EBITDA
EBIT
Net Interest Income
Associates' Profit
Exceptional Items
Pre-tax Profit
Taxation
Minority Interests
Preferred Dividends
Net Profit
Dec-13A
234.1
0.0
234.1
(85.4)
148.7
0.0
(39.6)
(3.1)
0.0
105.9
(15.0)
90.9
(55.3)
171.7
20.1
138.8
366.3
4.7
(17.6)
0.0
353.4
211.2
Dec-14A
282.4
0.0
282.4
(90.8)
191.6
0.0
(43.3)
(19.5)
0.0
128.8
(14.4)
114.4
(44.8)
139.1
19.3
98.0
326.1
(7.0)
1.8
0.0
320.8
230.3
Dec-15F
309.9
0.0
309.9
(104.7)
205.3
0.0
(43.2)
(3.2)
0.0
158.8
(10.0)
148.7
(43.2)
74.2
16.1
0.0
195.9
(7.0)
(4.9)
0.0
184.0
251.7
Dec-16F
345.3
0.0
345.3
(111.4)
233.9
0.0
(43.6)
(3.3)
0.0
187.0
0.0
187.0
(56.4)
80.7
0.0
0.0
211.3
(5.5)
(5.1)
0.0
200.8
252.7
Dec-17F
362.9
0.0
362.9
(115.8)
247.1
0.0
(43.6)
(3.3)
0.0
200.3
0.0
200.3
(61.6)
89.8
0.0
0.0
228.5
(5.6)
(5.2)
0.0
217.7
269.6
Dec-13A
366.3
(101.4)
(1.3)
(4.1)
(108.7)
150.8
0.0
(244.1)
0.0
(244.1)
333.9
0.0
(209.4)
(51.2)
73.3
(20.1)
(70.7)
189.3
Dec-14A
326.1
(79.9)
14.4
(0.0)
(66.1)
194.5
0.0
(96.6)
0.0
(96.6)
(208.2)
341.9
(227.8)
(34.8)
(129.0)
(31.0)
128.7
(145.1)
Dec-15F
195.9
(21.0)
(47.7)
(7.0)
31.9
152.1
(135.2)
211.8
0.0
76.6
73.4
0.0
(251.7)
(36.2)
(214.4)
14.3
272.0
266.0
Dec-16F
211.3
(24.3)
6.7
(5.5)
32.2
220.4
0.0
32.3
0.0
32.3
0.0
0.0
(252.7)
(49.4)
(302.1)
(49.3)
279.7
203.4
Dec-17F
228.5
(28.2)
3.4
(5.6)
32.2
230.2
0.0
89.7
0.0
89.7
0.0
0.0
(269.6)
(54.6)
(324.2)
(4.2)
341.7
265.4
Cash Flow
(S$m)
Pre-tax Profit
Tax Paid
Others
Capex
Dividends Paid
278
BY THE NUMBERS
Balance Sheet
(S$m)
Total Investments
Intangible Assets
Inventories
Trade Debtors
Trade Creditors
Short-term Debt
Minority Interests
Total Equity
Dec-13A
8,045
24
42
8,112
181
0
29
0
210
91
772
21
884
2,406
46
2,453
4,844
141
4,985
Dec-14A
8,320
10
105
8,436
150
0
17
0
166
107
0
23
130
2,996
58
3,054
5,305
113
5,418
Dec-15F
8,433
0
105
8,538
164
0
17
0
181
59
0
23
82
3,069
58
3,127
5,392
118
Dec-16F
8,481
0
105
8,587
114
0
17
0
131
66
0
23
89
3,069
58
3,127
5,379
123
Dec-17F
8,481
0
105
8,587
110
0
17
0
127
69
0
23
92
3,069
58
3,127
5,366
128
5,510
5,502
5,494
Key Ratios
NPI Growth
DPS Growth
Effective Tax Rate
Current Ratio
Quick Ratio
Cash Ratio
Dec-13A
(10.6%)
(9.0%)
63.5%
(1.71%)
1.17
0.00%
60%
0.24
0.24
0.20
4.40%
Dec-14A
20.6%
28.9%
67.9%
0.77%
1.51
2.15%
72%
1.28
1.28
1.15
3.79%
Dec-15F
9.7%
7.1%
66.2%
6.07%
1.72
3.58%
137%
2.20
2.20
1.99
2.12%
Dec-16F
11.4%
14.0%
67.7%
(0.30%)
2.24
2.61%
126%
1.48
1.48
1.29
2.30%
Dec-17F
5.1%
5.7%
68.1%
5.94%
2.40
2.45%
124%
1.38
1.38
1.19
2.50%
Dec-13A
8.7
N/A
N/A
3,544
86.1%
N/A
N/A
Dec-14A
9.1
N/A
N/A
3,544
87.5%
N/A
N/A
Dec-15F
9.6
N/A
N/A
3,544
95.0%
N/A
N/A
Dec-16F
9.9
N/A
N/A
3,544
98.8%
N/A
N/A
Dec-17F
10.3
N/A
N/A
3,544
99.5%
N/A
N/A
Key Drivers
RevPAR (S$)
Occupancy (%)
279
Company Note
Singapore
Super Group
REDUCE (no change)
In an ASEAN downturn amid weak currencies
Current price:
Target price:
Previous target:
Up/downside:
S$0.86
S$0.74
S$0.74
-13.7%
Reuters:
Bloomberg:
Market cap:
SPGP.SI
SUPER SP
US$678.8m
S$959.0m
US$0.49m
S$0.69m
1,152m
26.8%

Current shares o/s
Free float:
No change.
Super is struggling in both its branded consumer and food ingredient businesses, as
weak end-consumption and currencies have hit earnings.
The regional macro outlook remains poor, and we remain wary about the success of
new product launches in such a climate.
Premiumisation in its food ingredient business was supposed to boost sales in 2015,
but this did not materialise.
Near-term earnings pressure is likely to come from weak sales and increased
marketing spend. Maintain Reduce.
Weak end-markets plus falling ASEAN currencies

Super Groups struggles in 2014 has continued into 2015, and the current outlook for
2016 remains bleak. The twin problems remain: 1) a slowdown in consumption in
ASEAN, and 2) weaker ASEAN currencies. Both branded consumer and food ingredient
segments are struggling. Compounding the poor macro is the groups expansion into the
premium end of the ingredients business. That has so far failed to materialise into sales,
while increased depreciation continues to be a drag on earnings.
Consumer headwinds
Price Close
1.60
146.0
1.40
132.0
1.20
118.0
1.00
104.0
0.80
90.0
0.60
15
76.0
Vol m
10
5
Dec-14
Mar-15
Jun-15
Sep-15
Source: Bloomberg
Price performance
Absolute (%)
Relative (%)
1M
-10.4
-5.9
3M
13.9
14.2
12M
-23.9
-11.1
The impending rate hike does not bode well for EM currencies and we are wary that a
turnaround will not be forthcoming with US$ strength. 2015 was a year when earnings
were further dampened from translation losses. Its biggest market, Thailand, had to
grapple with slowing domestic consumption. Malaysia and Philippines were down. The
bright spot was Myanmar which remained competitive even with its falling kyat, as Super
benefited from volume growth as it cut prices to compensate for the kyat.
Depending on new products in an increasingly ugly environment

Super has introduced two new products in its branded consumer segment, 1) Essenso,
and 2) Owl Kopitiam Roast. These were introduced in late-3Q15/early-4Q15 and are
targeted at the mass premium category, as Super intends to ride on Asias rising middle
income group. We are, however, cautious on the take-up in the current climate. We think
there will be more near-term pressures as SG&A rises with the group rolling out new
products in 2016.
Food ingredient (FI) dragged down by Southeast Asia

In 2014, FI sales fared better than its consumer business. However, 2015 proved to be a
particularly challenging year for FI due to the weak Indonesian economy. Supers US$denominated prices in Indonesia and a weakening rupiah did not help, with customers
delaying purchases. The roll-out of premium FI products has also been slow.
Reduce, challenging outlook ahead

We believe Super remains sandwiched between todays weak ASEAN consumer
incomes and rising inflation (caused by weak local currencies). We maintain our Reduce
rating, with a target price of S$0.74 (based on 15x CY17 P/E, peer average).
[X]
Financial Summary
Analysts
Kenneth NG, CFA
T (65) 6210 8610
Jonathan SEOW
T (65) 6210 8671
Revenue (S$m)
Net Profit (S$m)
Core EPS (S$)
Core EPS Growth
FD Core P/E (x)
DPS (S$)
Dividend Yield
EV/EBITDA (x)
P/FCFE (x)
Net Gearing
P/BV (x)
ROE
Dec-13A
557.0
107.8
99.92
0.076
11.8%
11.35
0.045
5.23%
8.10
37.96
(20.2%)
2.05
19.5%
Dec-14A
539.5
87.0
68.76
0.062
(18.7%)
13.95
0.031
3.60%
10.23
17.58
(15.7%)
1.93
14.3%
Dec-15F
493.5
77.4
40.45
0.036
(41.2%)
23.71
0.031
3.60%
11.27
17.65
(19.0%)
1.91
8.1%
0%
0.86
Dec-16F
530.7
93.0
50.95
0.046
26.0%
18.82
0.034
3.97%
9.30
20.29
(20.2%)
1.86
10.0%
0%
0.95
Dec-17F
574.4
98.7
55.16
0.049
8.3%
17.39
0.036
4.17%
8.70
20.64
(20.8%)
1.81
10.6%
0%
0.90

Powered by
EFA
BY THE NUMBERS
Share price info

Share px perf. (%)
1M
3M
12M
Relative
-5.9
14.2
-11.1
Absolute
-10.4
13.9
Major shareholders
Teo & Te Family
P/BV vs ROE
7.00
25.0%
6.00
21.4%
-23.9
5.00
17.9%
% held
4.00
14.3%
33.2
3.00
10.7%
2.00
7.1%
1.00
3.6%
0.00
0.0%
Sam Goi & Tee Yih Jia Food
16.2
Yeo Hiap Seng Investment
11.7
Growth
45.0
40.0
35.0
30.0
25.0
20.0
15.0
10.0
5.0
0.0
50%
39%
28%
17%
6%
-6%
-17%
-28%
-39%
-50%
ROE (rhs)
Profit & Loss

(S$m)
Total Net Revenues
Gross Profit
Operating EBITDA
Operating EBIT
Exceptional Items
Pre-tax Profit
Taxation
Profit After Tax
Minority Interests
Preferred Dividends
Net Profit
Dec-13A
557.0
209.5
107.8
(14.8)
93.0
(0.2)
(2.4)
7.1
97.4
17.1
114.5
(11.1)
Dec-14A
539.5
189.6
87.0
(17.0)
70.0
12.0
(0.6)
0.0
81.3
0.0
81.3
(9.8)
Dec-15F
493.5
169.3
77.4
(24.8)
52.6
3.8
(0.5)
0.0
55.9
0.0
55.9
(14.3)
Dec-16F
530.7
193.1
93.0
(24.4)
68.6
3.3
(0.5)
0.0
71.5
0.0
71.5
(19.3)
Dec-17F
574.4
208.8
98.7
(24.0)
74.7
3.6
(0.5)
0.0
77.8
0.0
77.8
(21.4)
103.4
(3.4)
0.0
71.6
(2.8)
0.0
41.6
(1.2)
0.0
52.2
(1.2)
0.0
56.4
(1.3)
0.0
99.9
84.5
84.5
68.8
68.8
68.8
40.4
40.4
40.4
51.0
51.0
51.0
55.2
55.2
55.2
Cash Flow
(S$m)
EBITDA
Tax Paid
Capex
Shares Repurchased
Dividends Paid
Preferred Dividends
Dec-13A
107.8
Dec-14A
87.0
Dec-15F
77.4
Dec-16F
93.0
Dec-17F
98.7
(35.7)
(18.9)
6.4
(9.2)
(12.9)
0.4
0.0
(9.7)
62.8
(48.3)
13.3
0.0
(2.5)
(37.6)
0.0
0.0
0.0
(39.6)
(5.5)
10.2
(10.7)
62.0
(39.6)
4.0
(1.1)
9.2
(27.5)
20.0
0.0
0.0
(50.2)
3.3
3.5
(14.3)
76.3
(22.0)
0.0
0.0
0.0
(22.0)
0.0
0.0
0.0
(36.3)
2.9
3.0
(19.3)
70.4
(23.1)
0.0
0.0
0.0
(23.1)
0.0
0.0
0.0
(38.1)
3.1
3.2
(21.4)
70.7
(24.3)
0.0
0.0
0.0
(24.3)
0.0
0.0
0.0
(40.0)
(2.3)
(41.9)
(16.6)
25.3
25.3
(3.6)
(33.8)
0.8
54.5
34.5
0.0
(36.3)
18.0
54.3
54.3
0.0
(38.1)
9.2
47.3
47.3
0.0
(40.0)
6.4
46.5
46.5
281
BY THE NUMBERS
Balance Sheet
(S$m)
Total Debtors
Inventories
Fixed Assets
Total Investments
Intangible Assets
Short-term Debt
Total Creditors
Total Provisions
Total Liabilities
Minority Interests
Total Equity
Dec-13A
98.5
123.5
101.6
2.4
326.0
250.6
19.4
3.0
0.0
273.1
0.0
Dec-14A
101.3
124.7
115.1
2.8
343.9
276.3
7.6
3.0
0.3
287.2
20.0
Dec-15F
119.4
97.1
93.3
2.8
312.5
271.5
7.7
3.0
0.3
282.5
20.0
Dec-16F
128.5
103.9
97.1
2.8
332.4
267.1
7.9
3.0
0.3
278.3
20.0
Dec-17F
135.0
111.9
105.2
2.8
354.9
263.1
8.0
3.0
0.3
274.5
20.0
97.5
7.9
105.4
0.0
79.5
7.8
107.3
0.0
36.4
7.8
64.3
0.0
37.9
7.8
65.8
0.0
41.1
7.8
68.9
0.0
0.2
0.2
7.0
112.5
466.9
19.7
486.6
0.0
0.0
6.7
114.1
497.6
19.5
517.0
1.6
1.6
6.8
72.7
501.7
20.7
522.4
1.6
1.6
6.9
74.3
514.5
21.9
536.4
0.7
0.7
7.0
76.5
529.7
23.2
552.9
Key Ratios
Revenue Growth
BVPS (S$)
Effective Tax Rate
Inventory Days
ROIC (%)
ROCE (%)
Dec-13A
7.27%
9.4%
19.4%
0.09
0.42
N/A
9.7%
60.6%
62.33
96.8
40.40
27.1%
20.3%
15.1%
Dec-14A
(3.15%)
(19.3%)
16.1%
0.07
0.45
N/A
12.0%
50.3%
72.00
113.0
60.70
15.5%
15.8%
10.0%
Dec-15F
(8.52%)
(11.0%)
15.7%
0.09
0.45
N/A
25.5%
89.7%
77.22
117.3
65.23
10.0%
10.3%
6.3%
Dec-16F
7.54%
20.2%
17.5%
0.10
0.46
N/A
27.0%
74.8%
64.83
103.2
40.29
13.4%
12.9%
8.2%
Dec-17F
8.23%
6.1%
17.2%
0.10
0.47
N/A
27.5%
72.5%
64.45
101.0
39.44
14.5%
13.7%
8.6%
Dec-13A
N/A
2.6%
N/A
N/A
N/A
N/A
N/A
17.3%
N/A
N/A
N/A
N/A
Dec-14A
N/A
-3.6%
N/A
N/A
N/A
N/A
N/A
-2.3%
N/A
N/A
N/A
N/A
Dec-15F
N/A
-7.5%
N/A
N/A
N/A
N/A
N/A
-10.4%
N/A
N/A
N/A
N/A
Dec-16F
N/A
6.0%
N/A
N/A
N/A
N/A
N/A
10.5%
N/A
N/A
N/A
N/A
Dec-17F
N/A
7.0%
N/A
N/A
N/A
N/A
N/A
10.5%
N/A
N/A
N/A
N/A
Key Drivers
282
Company Note
Singapore
Talkmed Group Ltd
ADD (no change)
Niche healthcare play
Current price:
Target price:
Previous target:
Up/downside:
S$1.00
S$1.30
S$1.30
30.3%
Reuters:
Bloomberg:
Market cap:
TALK.SI
TKMED SP
US$465.1m
S$657.1m
US$0.02m
S$0.03m
657.1m
16.0%

Current shares o/s
Free float:
Price Close
1.200
123.6
1.100
114.7
1.000
105.8
0.900
96.9
0.800
600
88.0
Vol th
400
200
Mar-15
Jun-15
Sep-15
Source: Bloomberg
Price performance
Absolute (%)
Relative (%)
Long-term healthcare business model with OPM of c.70% and minimal capex
needs.
Medical tourism temporarily hit by Singapore dollars appreciation.

Inorganic expansion into stem cell and Hong Kong to generate rewards later.
Cash-generative business to support dividend yields of 4.0-4.7% in FY15-17.
Reiterate Add. Catalysts are earnings-accretive acquisitions, vs. key man risk.
Long-term healthcare play with high operating margins

A medical oncology specialist, Talkmed operates a strong franchise that counts the
collective medical expertise of its doctors as high entry barriers. Thanks to the consulting
nature of its business and collaboration with Parkway Cancer Centre, its operating
margins have consistently exceeded 70% and the business in Singapore has minimal
capex needs.
Effects of AEC on medical tourism
No change.
Dec-14
1M
-1.0
3.5
3M
-1.0
-0.7
12M
4.2
17.0
Besides riding on the increasing incidence of cancer in the region, Talkmed is also a
medical tourism play with over 50% of revenue contributed by foreign patients, mainly
from Indonesia, Malaysia and Vietnam. We see further opportunities from the Asean
Economic Community (AEC) to benefit the company in the long run, but the stronger S$
against regional currencies will be a key pushback for medical tourists in the near term,
should this trend persist.
Making inroads into complementary business and overseas

Talkmed made two strategic investments in 2015 1) a S$1.8m investment into Stem
Med, a private stem cell bank in Singapore, and 2) a 30% stake acquisition in Hong
Kong Integrated Oncology Centre Holdings Limited (HKIOC) for S$11.5m. HKIOC is a
specialty centre offering VIP chemo services. Both investments are currently in early
phases and management expects to see meaningful income contribution from FY17
onwards.
Strong balance sheet, dividend yield of c.4%

With a healthy balance sheet (no debt), strong free cash flow and relatively stable
margins, the company is able to deliver a dividend payout ratio of 75%. This translates
into an attractive dividend yield of 4.0-4.7% in FY15-17.
Maintain Add, inorganic expansion likely to be a potential catalyst

We maintain our Add rating and DCF-based target price of S$1.30 (WACC: 8.4%).
While Talkmed continues to seek new medical professionals, its CEO and founder Dr
Ang still accounts for more than 60% of total revenue, which is a key risk in itself.
Organic growth potential is limited, and re-rating catalysts will come from earningsaccretive M&A activities and a faster-than-expected turnaround of the HKIOC business.
[X]
Financial Summary
Analysts
William TNG, CFA
T (65) 6210 8676
NGOH Yi Sin
T (65) 6210 8604
Revenue (S$m)
Net Profit (S$m)
Core EPS (S$)
Core EPS Growth
FD Core P/E (x)
DPS (S$)
Dividend Yield
EV/EBITDA (x)
P/FCFE (x)
Net Gearing
P/BV (x)
ROE
Dec-13A
56.30
38.58
28.23
0.055
(4.92%)
18.16
0.063
6.34%
13.66
13.33
(194%)
43.12
244%
Dec-14A
63.17
46.36
38.66
0.060
8.22%
16.78
0.046
4.57%
12.90
20.80
(102%)
13.21
124%
Dec-15F
62.80
45.15
38.15
0.058
(2.58%)
17.23
0.040
4.01%
13.25
15.56
(101%)
11.23
70%
0%
1.00
Dec-16F
64.01
46.34
38.93
0.059
2.05%
16.88
0.042
4.24%
12.70
14.64
(101%)
9.69
62%
0%
1.00
Dec-17F
67.23
48.68
40.47
0.062
3.98%
16.23
0.047
4.68%
11.88
13.85
(101%)
8.42
55%
0%
0.99

Powered by
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BY THE NUMBERS
Share price info

Share px perf. (%)
Relative
Absolute
1M
3.5
-1.0
Major shareholders
Ladyhill Holdings Pte Ltd
3M
-0.7
-1.0
12M
17.0
4.2
P/BV vs ROE
35.0
400%
30.0
343%
25.0
286%

Growth
25.0
10.0%
20.0
6.8%
3.6%
% held
20.0
229%
15.0
65.4
15.0
171%
10.0
0.4%
10.0
114%
5.0
-2.8%
0.0
-6.0%
Dr Khoo Kei Siong
7.6
Dr Teo Cheng Peng
7.5
5.0
57%
0.0
0%
ROE (rhs)
Profit & Loss

Slight organic growth as scalability
is a key challenge.
(S$m)
Total Net Revenues
Gross Profit
Operating EBITDA
Operating EBIT
Exceptional Items
Pre-tax Profit
Taxation
Profit After Tax
Minority Interests
Preferred Dividends
Net Profit
Dec-13A
56.30
56.30
38.58
(0.01)
38.57
0.00
0.00
0.01
38.58
(2.75)
35.83
(7.60)
28.23
0.00
0.00
0.00
0.00
28.23
30.40
30.40
Dec-14A
63.17
63.17
46.36
(0.01)
46.36
0.14
0.00
0.23
46.72
0.00
46.72
(8.06)
38.66
0.00
0.00
0.00
0.00
38.66
38.66
38.66
Dec-15F
62.80
62.80
45.15
(0.01)
45.15
0.00
0.00
0.20
45.35
0.00
45.35
(7.20)
38.15
0.00
0.00
0.00
0.00
38.15
38.15
38.15
Dec-16F
64.01
64.01
46.34
(0.01)
46.33
0.00
0.00
0.20
46.53
0.00
46.53
(7.61)
38.93
0.00
0.00
0.00
0.00
38.93
38.93
38.93
Dec-17F
67.23
67.23
48.68
(0.01)
48.67
0.00
0.00
0.20
48.87
0.00
48.87
(8.39)
40.47
0.00
0.00
0.00
0.00
40.47
40.47
40.47
Cash Flow
Strong cash-generative ability with

minimal capex requirements to
support a 75% dividend payout ratio.
(S$m)
EBITDA
Tax Paid
Capex
Shares Repurchased
Dividends Paid
Preferred Dividends
Dec-13A
38.58
3.00
6.91
0.00
0.00
Dec-14A
46.36
4.00
(11.97)
0.00
0.00
Dec-15F
45.15
5.00
0.18
0.00
0.00
Dec-16F
46.34
6.00
(0.26)
0.00
0.00
Dec-17F
48.68
7.00
(0.62)
0.00
0.00
0.00
(7.03)
41.47
(0.06)
0.00
0.00
0.00
(0.06)
0.00
0.00
0.00
(27.50)
0.00
0.00
(27.50)
13.91
41.41
41.41
(0.14)
(7.07)
31.19
0.00
0.00
0.00
0.00
0.00
0.00
20.00
0.00
(21.49)
0.00
0.00
(1.49)
29.70
31.19
31.19
0.00
(8.10)
42.24
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
(26.37)
0.00
0.00
(26.37)
15.87
42.24
42.24
0.00
(7.20)
44.88
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
(27.85)
0.00
0.00
(27.85)
17.03
44.88
44.88
0.00
(7.61)
47.45
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
(30.74)
0.00
0.00
(30.74)
16.71
47.45
47.45
284
BY THE NUMBERS
Balance Sheet
Consulting nature of business results

in asset-light model as key assets to
business are the medical
professionals.
(S$m)
Total Debtors
Inventories
Fixed Assets
Total Investments
Intangible Assets
Short-term Debt
Total Creditors
Total Provisions
Total Liabilities
Minority Interests
Total Equity
Dec-13A
24.89
7.47
0.00
0.00
32.37
0.05
0.00
0.00
0.00
0.05
0.00
0.00
8.03
11.59
19.62
0.00
0.00
0.00
0.00
0.00
19.62
12.80
0.00
12.80
Dec-14A
50.90
9.18
0.00
0.00
60.07
0.03
0.00
0.00
0.00
0.03
0.00
0.00
1.33
9.01
10.34
0.00
0.00
0.00
0.00
0.00
10.34
49.76
0.00
49.76
Dec-15F
58.97
8.26
0.00
0.00
67.22
0.00
0.00
0.00
0.00
0.00
0.00
0.00
1.00
7.70
8.70
0.00
0.00
0.00
0.00
0.00
8.70
58.52
0.00
58.52
Dec-16F
68.40
8.42
0.00
0.00
76.81
0.00
0.00
0.00
0.00
0.00
0.00
0.00
1.00
8.01
9.01
0.00
0.00
0.00
0.00
0.00
9.01
67.81
0.00
67.81
Dec-17F
78.81
8.84
0.00
0.00
87.65
0.00
0.00
0.00
0.00
0.00
0.00
0.00
1.00
8.59
9.59
0.00
0.00
0.00
0.00
0.00
9.59
78.05
0.00
78.05
Dec-13A
8.6%
0.2%
68.5%
0.05
0.02
N/A
21.2%
113%
43.79
N/A
N/A
(828%)
310%
112%
Dec-14A
12.2%
20.2%
73.4%
0.08
0.08
N/A
17.2%
78%
48.11
N/A
N/A
(383%)
149%
83%
Dec-15F
(0.6%)
(2.6%)
71.9%
0.09
0.09
N/A
15.9%
69%
50.67
N/A
N/A
(3981%)
83%
60%
Dec-16F
1.9%
2.6%
72.4%
0.10
0.10
N/A
16.3%
72%
47.68
N/A
N/A
(10497%)
73%
54%
Dec-17F
5.0%
5.0%
72.4%
0.12
0.12
N/A
17.2%
76%
46.85
N/A
N/A
(8268%)
67%
49%
Key Ratios
Consistently high margins as a result
of high trade barriers to entry and
Talkmed being a services-oriented
business.
Revenue Growth
BVPS (S$)
Effective Tax Rate
Inventory Days
ROIC (%)
ROCE (%)
285
BrewersSingaporeEquity researchDecember 9, 2015
Company Note
Singapore
Thai Beverage
ADD (no change)
Beer leaps forward, spirits provide cover
Current price:
Target price:
Previous target:
Up/downside:
S$0.70
S$0.83
S$0.83
19.1%
Reuters:
Bloomberg:
Market cap:
TBEV.SI
THBEV SP
US$12,352m
S$17,451m
US$4.18m
S$5.89m
29,000m
33.0%

Current shares o/s
Free float:
No change
The investment thesis of Thai Beverage was all about an aspiring regional F&B
player, with ambitions funded by the free cash flow of its spirits monopoly business.
Beer has shown promising signs early in 2015, as prior rebranding efforts have
culminated in price hikes that was closed Changs prices to key competitor Leo.
2016 will show the effect of the rebranding effort to collapse sub-brands into one
and launch Chang globally.
100Plus sales in Thailand should gain traction and help gain CSD market share.
Our only worry is initial signs of weakness in spirits, a staple product. Maintain Add,
with unchanged sum-of-parts target price of S$0.83
Beer has shown promising signs in 2015 and will go global in 2016
3Q beer sales was understandably weak because of a rebranding effort. Prior to that,
beer sales and profitability was consistently improving, on the back of hiked prices,
better logistics and growing export sales. The collapsing of four sub-brands into one is
part of its plan to build a single, global brand. 2016 will see the execution of plans to
launch Chang Classic into Singapore, Hong Kong, the UK, US and Australia.
Non-alcoholic should also gradually do better

Price Close

121.0
0.800
115.0
0.750
109.0
0.700
103.0
0.650
97.0
0.600
100
91.0
Vol m
0.850
50
Dec-14
Mar-15
Jun-15
Sep-15
Source: Bloomberg
Price performance
Absolute (%)
Relative (%)
1M
2.2
6.7
3M
0.0
0.3
12M
-3.5
9.3
Non-alcoholic should gradually do better. There were initial positive signs for 100Plus
launch in Thailand in 1H15, but that fizzled out in the seasonally weak 3Q. A quarter
should not be deemed as a trend. Over time, if 100Plus does well in Thailand. It will help
Thai Bev achieve dominance in the carbonated soft drink (CSD) market as well. Better
utilization of Serm Suks currently under-utilised capacity, will shore up profits.
Spirits is our new concern, albeit minor at this stage

A new nagging concern for us, is yoy decline in spirits sales. Recent guidance is a tad
worrying. Management guides that white spirits, previously a staple among farmers, has
seen some sales weakness as farmers struggle after the removal of the rice subsidies.
We will be watchful to note that this does not develop into something more menacing.
Expansion plans ahead

Beer looks like the main battering ram to drive growth ahead. The cultivation of other
export markets for Chang Classic, would be beneficial for beers profitability, especially
as Thailands domestic beer market is not growing in recent years. est cola looks like a
long-drawn battle with little hopes of turning around soon. 100Plus in Thailand and Oishi
in Malaysia look like better bets, though that will also take time. Lastly, more M&As on
beer and non-alcholic drinks business outside of Thailand, is always likely.
[X]
Financial Summary
Analyst
Kenneth NG, CFA
T (65) 6210 8610
Revenue (THBm)
Operating EBITDA (THBm)
Net Profit (THBm)
Core EPS (THB)
Core EPS Growth
FD Core P/E (x)
DPS (THB)
Dividend Yield
EV/EBITDA (x)
P/FCFE (x)
Net Gearing
P/BV (x)
ROE
Dec-13A
155,771
25,058
18,739
0.75
328%
23.70
0.44
2.49%
16.95
9.68
53.5%
4.71
21.3%
Dec-14A
162,040
29,828
23,570
0.94
26%
18.84
0.61
3.45%
13.87
20.07
32.3%
4.39
24.1%
Dec-15F
168,135
28,089
28,211
1.12
20%
15.74
0.65
3.68%
14.01
14.95
14.1%
3.92
26.3%
0%
1.15
Dec-16F
177,904
30,813
25,059
1.00
(11%)
17.72
0.68
3.85%
12.49
21.79
6.2%
3.65
21.3%
0%
0.99
Dec-17F
189,493
32,693
26,894
1.07
7%
16.51
0.70
3.96%
11.48
20.89
(1.3%)
3.39
21.3%
0%
1.02

Powered by
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Share price info

Share px perf. (%)
1M
3M
12M
Relative
6.7
0.3
9.3
Absolute
2.2
0.0
Major shareholders
-3.5
% held
Siriwana Company Ltd
45.3
MM Group Ltd
20.6
First Eagle Investment
2.0
P/BV vs ROE
6.00
30.0%
5.00
25.0%
4.00
20.0%
3.00
15.0%
2.00
10.0%
1.00
5.0%
0.00
0.0%
Growth
40.0
35.0
30.0
25.0
20.0
15.0
10.0
5.0
0.0
350.0%
293.8%
237.5%
181.3%
125.0%
68.8%
12.5%
-43.8%
-100.0%
ROE (rhs)
Profit & Loss

(THBm)
Total Net Revenues
Gross Profit
Operating EBITDA
Operating EBIT
Exceptional Items
Pre-tax Profit
Taxation
Profit After Tax
Minority Interests
Preferred Dividends
Net Profit
Dec-13A
155,771
43,737
25,058
(3,933)
21,125
(2,251)
3,434
795
23,104
0
23,104
(4,236)
Dec-14A
162,040
47,330
29,828
(3,986)
25,842
(1,447)
3,389
600
28,383
0
28,383
(4,552)
Dec-15F
168,135
50,058
28,089
(3,929)
24,160
(903)
8,311
690
32,258
0
32,258
(3,976)
Dec-16F
177,904
52,765
30,813
(3,929)
26,884
(753)
3,734
700
30,565
0
30,565
(5,433)
Dec-17F
189,493
56,073
32,693
(3,929)
28,764
(603)
3,920
711
32,792
0
32,792
(5,821)
18,868
(128)
23,831
(261)
28,282
(71)
25,132
(74)
26,971
(77)
18,739
18,739
18,739
23,570
23,570
23,570
28,211
28,211
28,211
25,059
25,059
25,059
26,894
26,894
26,894
Dec-13A
25,058
Dec-14A
29,828
Dec-15F
28,089
Dec-16F
30,813
Dec-17F
32,693
(4,848)
(1,013)
1,473
(1,936)
(2,273)
127
(2,251)
(5,005)
13,082
(4,824)
(2,961)
(1,447)
(4,884)
19,522
(4,763)
4,060
(903)
(3,976)
28,743
(3,500)
(3,273)
(753)
(5,433)
19,418
(3,500)
(3,698)
(603)
(5,821)
20,297
(3,500)
37,622
32,798
7,370
2,607
4,465
965
4,465
965
4,465
965
(10,546)
(11,300)
(16,322)
(17,075)
(17,577)
(40,602)
(51,148)
(5,269)
45,880
48,199
(18,521)
(29,820)
(7,691)
22,130
23,683
(6,115)
(22,436)
7,272
29,708
30,861
(12,000)
(29,075)
(8,692)
20,383
21,386
(12,000)
(29,577)
(8,315)
21,262
22,115
Cash Flow
(THBm)
EBITDA
Tax Paid
Capex
Shares Repurchased
Dividends Paid
Preferred Dividends
287
BY THE NUMBERS
Balance Sheet
(THBm)
Total Debtors
Inventories
Fixed Assets
Total Investments
Intangible Assets
Short-term Debt
Total Creditors
Total Provisions
Total Liabilities
Minority Interests
Total Equity
Dec-13A
5,108
4,508
34,837
5,271
49,724
46,827
75,558
7,213
4,008
133,606
2,167
Dec-14A
2,230
4,291
35,084
5,462
47,068
46,251
67,614
7,194
3,860
124,919
8,536
Dec-15F
13,478
3,685
33,967
536
51,667
42,121
70,435
7,197
3,866
123,619
2,377
Dec-16F
10,219
3,899
35,999
536
50,654
41,692
70,391
7,197
3,866
123,146
2,377
Dec-17F
7,725
4,153
38,381
536
50,796
41,263
70,281
7,197
3,866
122,607
2,377
9,142
14,922
26,230
55,343
9,181
18,319
36,036
27,555
9,389
15,088
26,853
27,600
9,699
17,167
29,242
15,600
10,062
18,946
31,385
3,600
2,448
57,791
1,315
85,336
94,286
3,707
97,993
2,755
30,310
965
67,311
101,263
3,414
104,676
2,755
30,355
1,374
58,582
113,361
3,343
116,704
2,755
18,355
1,374
48,971
121,559
3,269
124,828
2,755
6,355
1,374
39,114
131,097
3,192
134,289
Dec-13A
(3.27%)
0.0%
16.1%
(2.09)
3.75
9.11
18.3%
59.0%
8.76
110.5
16.80
31.3%
12.4%
11.0%
Dec-14A
4.02%
19.0%
18.4%
(1.35)
4.03
16.64
16.0%
65.0%
8.51
111.2
15.92
38.6%
17.4%
14.4%
Dec-15F
3.76%
(5.8%)
16.7%
(0.66)
4.51
20.95
12.3%
57.9%
7.98
106.7
15.42
36.3%
16.8%
16.9%
Dec-16F
5.81%
9.7%
17.3%
(0.31)
4.84
26.80
17.8%
68.1%
7.80
102.3
15.59
47.3%
18.6%
14.9%
Dec-17F
6.51%
6.1%
17.3%
0.07
5.22
33.72
17.8%
65.4%
7.76
101.7
15.50
51.1%
20.3%
15.9%
Dec-13A
0.0%
7.3%
N/A
N/A
N/A
N/A
Dec-14A
0.0%
4.7%
N/A
N/A
N/A
N/A
Dec-15F
0.0%
2.5%
N/A
N/A
N/A
N/A
Dec-16F
0.0%
4.2%
N/A
N/A
N/A
N/A
Dec-17F
0.0%
4.9%
N/A
N/A
N/A
N/A
Key Ratios
Revenue Growth
Net Cash Per Share (THB)
BVPS (THB)
Effective Tax Rate
Inventory Days
ROIC (%)
ROCE (%)
Key Drivers
(THB)
ASP (% Change)
Unit Sales Growth (%)
Utilisation Rate (%)
A&P Expenses (as % Of Revenue)
Excise Duties (litre)
Sales Tax (%)
288
PharmaceuticalsSingaporeEquity researchDecember 9, 2015
Company Note
Tianjin Zhongxin Pharmaceutical

Group
Singapore
ADD (no change)

Current price:
Target price:
Previous target:
Up/downside:
US$1.12
US$1.40
US$1.40
25.3%
Reuters:
Bloomberg:
Market cap:
TIAN.SI
TIAN SP
US$2,078m
US$2,078m
US$0.27m
US$0.27m
768.9m
100.0%

Current shares o/s
Free float:
No change.

178
1.20
128
0.70
6
78
Vol m
Tianjin Zhongxins upbeat growth outlook is underpinned by the macro trend of an

ageing population in China.
Flagship product, Su Xiao Jiu Xin Pill, is likely to benefit from the authoritys removal
of the price ceiling for low-priced drugs.
Expansion projects may translate to an additional operating profit of Rmb120m160m in FY18 onwards.
The S-share price of US$1.20 is at a 65% discount to its A-share price at US$3.40.
Maintain Add, with target price of US$1.40 based on CY16 DCF.
Long term outlook underpinned by Chinas ageing population
Sustainable high growth for Su Xiao Jiu Xin Pill
1.70
2
Dec-14
With its ownership of several of Chinas most time-honoured traditional Chinese

medicine (TCM) branches, e.g. Da Ren Tang and Le Ren Tang, Tianjin Zhongxin is
geared to Chinas increasing pharmaceutical demand from its ageing population. A
number of Tianjin Zhongxins exclusive products are included in Chinas national
essential drug catalogue and are fully reimbursable by the nations medical insurance
programme.
Price Close
Capitalising on Chinas ageing population
Tianjin Zhongxins flagship and exclusive product, Su Xiao Jiu Xin Pill, is a household
name in China for the treatment of cardio-vascular ailments. Its sales achieved a fiveyear CAGR of 13% in FY09-14. We believe Su Xiaos high growth is sustainable in the
medium term given the anticipated rising incidence rate of cardiovascular diseases as
the nations population ages (Chinas age distribution currently peaks at 45-50 years).
Benefit from NDRCs removal of price ceiling for low-priced drugs

Mar-15
Jun-15
Sep-15
Source: Bloomberg
Price performance
Absolute (%)
Relative (%)
1M
-4.3
0.2
3M
7.7
8.0
12M
12.0
24.8
We believe Tianjin Zhongxin is a key beneficiary of the National Development and

Reform Committee (NDRC)s removal of the price ceiling for low-priced drugs. Su Xiao
JIu Xin Pill (c.30% of the groups manufacturing sales) may see a boost in its price and
hence margin, given that its selling price has stagnated at the previous price ceiling set
by NDRC years ago. Under a blue sky scenario, the groups bottomline could potentially
double in the next 2-3 years, solely on the expansion of Su Xiao ASP and margin.
Expansion projects on track

The group raised Rmb814m via a placement in the A-share market in Jul 2015 to
finance: 1) the upgrading of its marketing and sales network, 2) construction of Bozhou
Industrial Park, and 3) development of vegetable beverage projects. To date, Rmb33m
of the capital raised has been invested and the remainder is expected to be deployed in
FY15-17. Based on managements IRR guidance of 15-20%, we estimate that the
investments will generate operating profits of Rmb120m-160m p.a. in FY18 onwards.
More compelling valuations than China and Hong Kong peers

Tianjins S-share currently trades at a 63% discount to its A-share. The S-shares CY16
P/E of 14.7x is more compelling than the 16.7x average for its Hong Kong peers and
26.6x for its China peers. Organic earnings growth driven by the rising pharmaceutical
demand in China is a key potential re-rating catalyst.
[X]
Financial Summary
Analysts
Roy CHEN
T (65) 6210 8685
E roy.chen@cimb.com
William TNG, CFA
T (65) 6210 8676
Revenue (Rmbm)
Operating EBITDA (Rmbm)
Net Profit (Rmbm)
Core EPS (Rmb)
Core EPS Growth
FD Core P/E (x)
DPS (Rmb)
Dividend Yield
EV/EBITDA (x)
P/FCFE (x)
Net Gearing
P/BV (x)
ROE
Dec-13A
6,010
497.1
352.3
0.41
14.6%
17.54
0.15
2.09%
12.76
12.59
21.1%
2.20
13.3%
Dec-14A
7,087
498.2
357.8
0.46
11.2%
15.77
0.15
2.09%
10.96
NA
9.9%
1.92
13.0%
Dec-15F
6,988
569.9
425.0
0.43
(6.0%)
16.77
0.15
2.09%
10.34
NA
(7.2%)
1.42
9.7%
0%
0.96
Dec-16F
7,295
557.3
375.4
0.49
13.9%
14.72
0.15
2.09%
9.40
NA
1.7%
1.36
9.5%
0%
0.70
Dec-17F
7,713
632.7
410.6
0.53
9.4%
13.46
0.16
2.23%
7.89
16.01
(3.8%)
1.26
9.7%
0%
1.01

I IMPORTANT DISCLOSURES, INCLUDING ANY REQUIRED RESEARCH CERTIFICATIONS, ARE PROVIDED AT THE END OF THIS REPORT.
Powered by
EFA
BY THE NUMBERS
Share price info

Share px perf. (%)
Relative
Absolute
1M
0.2
-4.3
3M
8.0
7.7
Major shareholders
12M
24.8
12.0
% held
Greenwood Asset Management Ltd
4.9
Value Partners Ltd
4.9
Pure Heart Value Investment Fund
4.7
P/BV vs ROE

Growth
3.00
14.00%
25.0
20.0%
2.50
11.67%
20.0
14.0%
2.00
9.33%
15.0
8.0%
1.50
7.00%
1.00
4.67%
10.0
2.0%
0.50
2.33%
5.0
-4.0%
0.00
0.00%
0.0
-10.0%
ROE (rhs)
Profit & Loss

(Rmbm)
Total Net Revenues
Gross Profit
Operating EBITDA
Operating EBIT
Exceptional Items
Pre-tax Profit
Taxation
Profit After Tax
Minority Interests
Preferred Dividends
Net Profit
Dec-13A
6,010
1,873
497
(89)
408
(49)
58
0
351
Dec-14A
7,087
2,102
498
(89)
409
(45)
67
0
411
Dec-15F
6,988
2,121
570
(87)
483
(27)
35
0
382
Dec-16F
7,295
2,268
557
(126)
431
(27)
40
0
444
Dec-17F
7,713
2,430
633
(165)
467
(27)
45
0
485
417
(46)
(10)
361
(9)
431
(55)
4
379
(22)
491
(59)
(7)
425
0
444
(69)
0
375
0
485
(75)
0
411
0
352
303
303
358
337
337
425
323
323
375
375
375
411
411
411
Cash Flow
(Rmbm)
EBITDA
Tax Paid
Capex
Shares Repurchased
Dividends Paid
Preferred Dividends
Dec-13A
497.1
177.9
(139.4)
Dec-14A
498.2
73.6
(160.0)
Dec-15F
569.9
35.0
(42.4)
Dec-16F
557.3
40.0
(59.3)
Dec-17F
632.7
45.0
(65.4)
(12.8)
(46.2)
(43.4)
(81.4)
351.8
(72.4)
60.5
(332.3)
0.0
(344.2)
414.4
6.3
(16.3)
(43.2)
(58.8)
299.8
(70.2)
2.0
96.6
0.0
28.4
(375.0)
0.0
0.0
(0.5)
(26.7)
(66.0)
469.3
(575.5)
0.0
0.0
0.5
(575.0)
(90.1)
0.0
(0.5)
(26.9)
(68.7)
441.9
(614.6)
0.0
0.0
0.5
(614.1)
0.0
0.0
(0.5)
(26.9)
(74.9)
510.0
(165.3)
0.0
0.0
0.5
(164.8)
0.0
(108.0)
(73.8)
(110.9)
(192.2)
(100.0)
9.9
316.3
323.9
422.1
57.4
6.9
(442.0)
(113.8)
(46.8)
377.2
0.0
(201.0)
(306.7)
(195.8)
(72.7)
0.0
(192.2)
(364.4)
(172.2)
(138.9)
0.0
(100.0)
245.1
345.1
378.4
290
BY THE NUMBERS
Balance Sheet
(Rmbm)
Total Debtors
Inventories
Fixed Assets
Total Investments
Intangible Assets
Short-term Debt
Total Creditors
Total Provisions
Total Liabilities
Minority Interests
Total Equity
Dec-13A
745
1,449
817
177
3,188
1,112
877
0
85
2,075
1,289
Dec-14A
631
1,694
860
198
3,382
1,090
877
0
88
2,055
922
Dec-15F
1,125
1,664
901
198
3,888
1,578
877
0
88
2,544
832
Dec-16F
761
1,737
931
198
3,626
2,067
877
0
88
3,032
832
Dec-17F
1,006
1,837
978
198
4,018
2,067
877
0
88
3,032
832
1,319
1,494
1,463
1,507
1,588
2,608
0
2,416
0
2,295
0
2,339
0
2,420
0
75
75
4
2,687
2,417
158
2,575
66
66
9
2,491
2,764
183
2,947
66
66
9
2,370
3,879
183
4,062
66
66
9
2,413
4,062
183
4,245
66
66
9
2,495
4,373
183
4,555
Dec-13A
17.2%
7.0%
7.16%
(0.74)
3.27
6.15
11.1%
37.5%
79.26
70.08
109.5
12.4%
9.9%
7.05%
Dec-14A
17.9%
11.2%
6.75%
(0.39)
3.74
7.64
12.8%
33.2%
80.93
61.38
102.2
12.6%
10.2%
7.29%
Dec-15F
(1.4%)
(3.7%)
6.60%
0.38
5.04
11.33
12.0%
35.7%
87.68
66.04
110.2
11.5%
8.7%
5.78%
Dec-16F
4.4%
20.9%
7.64%
(0.09)
5.28
12.96
15.5%
30.7%
85.31
66.70
107.5
10.9%
8.8%
6.04%
Dec-17F
5.7%
13.5%
8.20%
0.23
5.69
14.05
15.4%
30.0%
84.55
65.96
106.3
10.0%
9.0%
6.28%
Dec-13A
N/A
17.2%
N/A
N/A
N/A
N/A
1.0%
Dec-14A
N/A
17.9%
N/A
N/A
N/A
N/A
1.0%
Dec-15F
N/A
-1.4%
N/A
N/A
N/A
N/A
1.1%
Dec-16F
N/A
4.4%
N/A
N/A
N/A
N/A
1.1%
Dec-17F
N/A
5.7%
N/A
N/A
N/A
N/A
1.1%
Key Ratios
Revenue Growth
Net Cash Per Share (Rmb)
BVPS (Rmb)
Effective Tax Rate
Inventory Days
ROIC (%)
ROCE (%)
Key Drivers
R&D Cost/sales (%)
291
Company Note
Singapore
Tiger Airways
HOLD (no change)
Take SIAs offer
Current price:
Target price:
Previous target:
Up/downside:
S$0.41
S$0.41
S$0.41
0.0%
Reuters:
Bloomberg:
Market cap:
TAHL.SI
TGR SP
US$725.5m
S$1,025m
US$1.87m
S$2.64m
2,497m
44.2%

Current shares o/s
Free float:
We maintain Hold, and our target price which is pegged to the cash offer price, as
we believe there is a strong likelihood of the SIA offer succeeding.
If necessary, we believe that SIA will raise the offer price, as it cannot afford to delay
the execution of its long-term strategic goals
Conditional upon 90% ownership of Tiger

SIA currently owns 55.7% of Tiger Airways, while minorities hold the remaining 44.23%.
SIAs voluntary offer of S$0.41/share is conditional upon SIA securing at least a 90%
holding of Tiger. This means that a minimum 77.4% of minorities need to accept SIAs
offer. Holders of Tigers 14.1m perpetual debt, which are all in the hands of minorities,
will also be bought out at the same price, representing a value of S$0.776 per unit.

168
150
132
114
96
78
0.320
0.220
150
A higher offer price is not impossible

Should SIA run the risk of not succeeding in getting at least 77.4% of minorities accept
the cash offer, we strongly believe that the offer price will be raised, hence, we believe
that Tigers delisting and privatisation is almost certain.
SIA group cannot be optimised without a wholly-owned Tiger
100
Vol m
The equity cash offer also comes with an option, valid for 15 market days commencing
after the settlement of the cash offer, to subscribe for SIA shares at a price of S$11.1043
per SIA share. This gives an opportunity for Tigers minorities to participate in the SIA
groups future, if they so wish. If not, they can exit entirely from Tiger, at a price which
they are unlikely to obtain from the secondary market in the foreseeable future.
0.420
50
Dec-14
We advise shareholders to accept SIAs cash offer of S$0.41, as the prospects of

Tiger on its own merits are poor.
SIAs offer opens a way out for Tigers beleaguered minorities
No changes.
Price Close
Mar-15
Jun-15
Sep-15
Source: Bloomberg
Price performance
Absolute (%)
Relative (%)
1M
0.0
4.5
3M
51.9
52.2
12M
49.1
61.9
Without a 100% ownership of Tiger, SIA will continue to face impediments in

restructuring the intangible assets of the group, primarily relating to the cross-transfer or
reorganisation of airport landing/takeoff slots among the various group airlines. This is
because Tigers independent directors have to protect the interests of Tigers minorities,
even if it results in a less-than-optimal outcome for the SIA group as a whole.
such as in the best use of assets and scarce landing slots

One example is Tigers landing slots at congested regional airports, like Hong Kong and
Jakarta. The SIA group can maximise revenue potential by switching away from Tigers
180-seat A320s to widebody 335-seat B787-8s or 375-seat B787-9s operated by Scoot,
if demand warrants the aircraft switch. Alternatively, landing slots can be swapped
between different group airlines, in the interests of improving flight connections. Once
Tigers minorities are bought out, conflict of interest situations will no longer arise.
Go for it
Our advice to Tigers minority interests is to accept SIAs offer. Take the money and
invest in something else, or throw in your lot with the rest of the SIA group by taking up
the options to buy SIA shares. Either option is better than staying invested in a suboptimal airline that has few prospects for independent success.
[X]
Financial Summary
Analyst
Raymond YAP, CFA
T (60) 3 2261 9072
Revenue (S$m)
Net Profit (S$m)
Core EPS (S$)
Core EPS Growth
FD Core P/E (x)
DPS (S$)
Dividend Yield
EV/EBITDA (x)
P/FCFE (x)
Net Gearing
P/BV (x)
ROE
Mar-14A
746.5
(14.46)
(223.0)
(0.11)
145%
NA
0%
NA
NA
67.6%
1.77
(54.4%)
Mar-15A
677.4
(2.52)
(268.9)
(0.06)
(50%)
NA
0%
NA
NA
(1.5%)
4.75
(38.2%)
Mar-16F
704.0
58.48
9.4
0.00
NA
109.0
0%
16.08
9.55
(37.1%)
4.56
4.3%
1.88
Mar-17F
710.3
99.73
57.6
0.02
513%
17.8
0%
8.78
11.16
(52.8%)
3.63
22.7%
1.21
Mar-18F
782.9
96.22
58.0
0.02
1%
17.6
0%
8.28
9.83
(66.9%)
3.02
18.7%
1.37

Powered by
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BY THE NUMBERS
Share price info

Share px perf. (%)
1M
3M
Relative
4.5
52.2
Absolute
0.0
51.9
Major shareholders
SIA
12M
61.9
49.1
% held
55.8
P/BV vs ROE
5.00
4.50
4.00
3.50
3.00
2.50
2.00
1.50
1.00
0.50
0.00
30%
21%
12%
3%
-6%
-15%
-24%
-33%
-42%
-51%
-60%


Growth
90
80
70
60
50
40
30
20
10
0
3,500%
2,944%
2,389%
1,833%
1,278%
722%
167%
-389%
-944%
-1,500%
ROE (rhs)
Profit & Loss

(S$m)
Total Net Revenues
Gross Profit
Operating EBITDA
Operating EBIT
Exceptional Items
Pre-tax Profit
Taxation
Profit After Tax
Minority Interests
Preferred Dividends
Net Profit
Mar-14A
746.5
(14.5)
(14.5)
(34.1)
(48.6)
(4.6)
(95.1)
0.0
(148.2)
(83.3)
(231.6)
8.6
0.0
(223.0)
0.0
Mar-15A
677.4
(2.5)
(2.5)
(36.9)
(39.4)
(5.6)
(35.3)
0.0
(80.4)
(196.8)
(277.2)
8.3
Mar-16F
704.0
58.5
58.5
(41.6)
16.9
(7.2)
0.0
0.0
9.7
0.0
9.7
(0.3)
Mar-17F
710.3
99.7
99.7
(33.8)
66.0
(6.6)
0.0
0.0
59.4
0.0
59.4
(1.8)
Mar-18F
782.9
96.2
96.2
(30.4)
65.8
(6.0)
0.0
0.0
59.8
0.0
59.8
(1.8)
(268.9)
0.0
9.4
0.0
57.6
0.0
58.0
0.0
(223.0)
(129.9)
(129.9)
(268.9)
(94.5)
(94.5)
9.4
9.4
9.4
57.6
57.6
57.6
58.0
58.0
58.0
Mar-14A
(14.5)
Mar-15A
(2.5)
Cash Flow
(S$m)
EBITDA
Tax Paid
Capex
Shares Repurchased
Dividends Paid
Preferred Dividends
Mar-16F
58.5
Mar-17F
99.7
Mar-18F
96.2
9.7
(104.1)
42.4
(7.0)
(6.2)
31.9
(4.6)
8.6
(82.7)
(365.2)
577.9
(4.9)
(5.6)
(0.6)
28.7
(40.7)
52.1
6.2
(6.2)
(0.3)
51.1
0.0
56.0
5.6
(5.6)
(1.8)
91.7
0.0
0.0
5.0
(5.0)
(1.8)
104.1
0.0
0.0
(202.7)
10.0
(154.4)
292.2
(64.3)
(53.0)
(64.3)
227.4
0.0
56.0
(0.0)
0.0
0.0
0.0
(0.0)
0.0
0.0
0.0
(0.0)
0.0
0.0
0.0
0.0
0.0
(10.7)
127.1
54.4
(227.1)
(61.9)
0.0
(0.3)
162.8
138.6
(88.5)
(16.6)
(6.5)
(6.5)
100.6
107.1
116.4
(5.9)
(5.9)
85.8
91.7
100.9
(5.3)
(5.3)
98.8
104.1
113.3
293
BY THE NUMBERS
Balance Sheet
(S$m)
Total Debtors
Inventories
Fixed Assets
Total Investments
Intangible Assets
Short-term Debt
Total Creditors
Total Provisions
Total Liabilities
Minority Interests
Total Equity
Mar-14A
171.6
115.4
0.0
22.4
309.4
569.5
0.0
0.2
78.8
648.5
53.1
Mar-15A
310.2
30.2
0.0
102.9
443.3
453.5
0.0
0.1
125.5
579.1
83.7
Mar-16F
390.3
31.4
0.0
102.9
524.6
338.4
0.0
0.1
125.5
464.0
83.7
Mar-17F
455.6
31.7
0.0
102.9
590.2
304.7
0.0
0.1
125.5
430.3
83.7
Mar-18F
533.9
34.9
0.0
102.9
671.7
274.3
0.0
0.1
125.5
399.9
83.7
158.4
112.3
323.8
307.0
115.6
140.8
340.1
223.2
109.8
140.8
334.3
223.2
103.8
140.8
328.3
223.2
116.8
140.8
341.3
223.2
48.4
355.4
0.0
679.2
278.7
0.0
278.7
243.6
466.9
0.0
807.0
215.4
0.0
215.4
206.6
429.9
0.0
764.1
224.5
0.0
224.5
187.1
410.4
0.0
738.7
281.8
0.0
281.8
167.6
390.9
0.0
732.1
339.5
0.0
339.5
Mar-14A
(13.8%)
(132%)
(1.9%)
(0.16)
0.23
(4.47)
0.00%
NA
35.04
0.061
80.04
(6.2%)
(6.3%)
(14.4%)
Mar-15A
(9.2%)
(83%)
(0.4%)
0.00
0.09
(5.15)
0.00%
NA
39.23
73.55
(6.3%)
(6.4%)
(7.6%)
Mar-16F
3.9%
NA
8.3%
0.03
0.09
1.66
3.01%
NA
16.02
63.89
3.1%
3.8%
1.5%
Mar-17F
0.9%
71%
14.0%
0.06
0.11
6.48
3.01%
NA
16.22
63.84
15.7%
12.4%
6.3%
Mar-18F
10.2%
(4%)
12.3%
0.09
0.14
6.46
3.01%
NA
15.53
58.63
17.1%
11.3%
6.0%
Mar-14A
0.2%
-5.9%
78.8%
7.3
5.8
0.6
0.3
0.4
126.5
52
Mar-15A
-8.7%
-4.8%
82.1%
7.0
5.7
0.6
0.3
0.4
123.7
42
Mar-16F
-2.2%
-1.2%
83.0%
7.1
5.9
0.6
0.2
0.4
89.0
40
Mar-17F
-2.1%
-2.1%
83.0%
7.3
6.1
0.6
0.2
0.4
77.4
40
Mar-18F
9.5%
9.5%
83.0%
7.4
6.3
0.6
0.2
0.4
80.0
39
Key Ratios
Revenue Growth
BVPS (S$)
Effective Tax Rate
Inventory Days
ROIC (%)
ROCE (%)
Key Drivers
Av. Seat Km (ASK, Yoy Chg %)
Rev. Psg Km (RPK, Yoy Chg %)
Passenger Load Factor (%)
Pax yld per RPK (S$)
Pax rev. per ASK (S$)
Total Cost Per ATK (S$)
Fuel Cost Per ATK (S$)
Non-fuel Cost Per ATK (S$)
Jet Fuel Price (US$/barrel)
Fleet Size (no. Of Planes)
294
Company Note
Singapore
United Overseas Bank
HOLD (no change)
Headwinds from ASEAN
Current price:
Target price:
Previous target:
Up/downside:
S$19.46
S$20.00
S$20.00
2.8%
Reuters:
Bloomberg:
Market cap:
UOBH.SI
UOB SP
US$22,064m
S$31,172m
US$38.74m
S$54.55m
1,603m
80.0%

Current shares o/s
Free float:
No change.
Price Close

101.2
23.0
97.7
21.0
94.1
19.0
90.6
17.0
15
87.0
Vol m
10
5
Mar-15
Jun-15
Sep-15
Source: Bloomberg
Price performance
Absolute (%)
Relative (%)
Biggest exposure to a slowing ASEAN among Singapore banks, which could lead to
near-term challenges in loan growth and asset quality.
Over the longer term, could be a prime beneficiary of increased intra-regional trade
flows with the establishment of AEC.
Maintain Hold, with a GGM-based target price of S$20.00 (1.06x CY16 P/BV).
Remains our least favourite Singapore bank for its least resilient asset quality.
Near-term headwinds from ASEAN to persist

UOB has the biggest exposure to South and Southeast Asia, at 22% of loans (DBS:
10%, OCBC: 21%). ASEAN has seen challenges which we expect to persist in the near
term: 1) The softer economic outlook and political uncertainty has led to slower loan
demand in Malaysia and Indonesia as businesses hold back on investments. 2)
Weakening of ASEAN currencies against the S$ has led to lower translated loan
balances. 3) Asset quality continues to deteriorate amid lower commodity prices.
Credit quality likely to remain the worst among the three banks
25.0
Dec-14
1M
-4.9
-0.4
3M
0.8
1.1
12M
-20.0
-7.2
We expect UOBs credit cost to spike to 65bp in 2016 (3Q15: 32bp), higher than DBSs
40bp and OCBCs 38bp. UOB has traditionally seen the worst credit quality in a
downturn, and we expect the same this cycle given that has a larger proportion of SME
loans vs. MNCs. We continue to expect a broadening out of NPLs across sectors in
ASEAN for UOB into 2016.
Escalating costs amid a slowing environment

While competitors DBS and OCBC have been stepping up investments in technology to
stay relevant amidst the emergence of FinTechs, UOB has been late to the game, and is
now seeing rising cost pressures from investments in digital banking, IT systems, cybersecurity and also compliance. In an environment where loan growth is slowing and fee
engines are faltering, escalating costs from technology investments and loan loss
provisions do not bode well for UOBs near-term outlook.
Beneficiary of AEC in the longer term

Looking past near-term challenges, we think UOBs ASEAN presence will allow it to
benefit from the ASEAN Economic Community (AEC) in the longer term. As trade
barriers are lifted, we think UOBs geographical reach across Malaysia, Thailand and
Indonesia will allow it to benefit from increased intra-regional trade flows in ASEAN, in
terms of trade loans, trade fees, loan-related fees and treasury customer income.
Maintain Hold
We maintain a Hold call on UOB, with a GGM-based target price of S$20.00 (1.06x
CY16 P/BV). UOB remains our least preferred Singapore bank as it has the poorest
asset quality and lacks growth engines.
[X]
Financial Summary
Analysts
Kenneth NG, CFA
T (65) 6210 8610
Jessalynn CHEN
T (65) 6210 8672

Net Profit (S$m)
Core EPS (S$)
Core EPS Growth
FD Core P/E (x)
DPS (S$)
Dividend Yield
BVPS (S$)
P/BV (x)
ROE
Dec-13A
4,120
2,601
6,721
(430)
3,007
1.91
7.2%
10.19
0.75
3.85%
15.38
1.27
12.7%
Dec-14A
4,558
2,899
7,457
(635)
3,248
2.04
7.0%
9.48
0.75
3.85%
16.31
1.19
12.9%
Dec-15F
4,906
3,035
7,941
(670)
3,190
1.99
(2.6%)
9.74
0.72
3.70%
17.66
1.10
11.7%
0%
1.02
Dec-16F
5,223
2,985
8,208
(1,369)
2,750
1.72
(13.8%)
11.34
0.62
3.19%
18.81
1.03
9.4%
0%
0.85
Dec-17F
5,555
3,053
8,608
(1,006)
3,253
2.03
18.3%
9.59
0.74
3.80%
20.18
0.96
10.4%
0%
0.94

Powered by
EFA
BY THE NUMBERS
Share price info

Share px perf. (%)
1M
3M
12M
Relative
-0.4
1.1
-7.2
Absolute
-4.9
0.8
-20.0
Major shareholders
Wee family
Lien family
% held
16.5
5.4
P/BV vs ROE
1.80
1.60
1.40
1.20
1.00
0.80
0.60
0.40
0.20
0.00
16.0%
14.2%
12.4%
10.7%
8.9%
7.1%
5.3%
3.6%
1.8%
0.0%

Growth
14.00
40.0%
12.00
31.4%
10.00
22.9%
8.00
14.3%
6.00
5.7%
4.00
-2.9%
2.00
-11.4%
0.00
-20.0%
ROE (rhs)
Profit & Loss

(S$m)
Net Interest Income
Operating Revenue
Exceptional Items
Pre-tax Profit
Taxation
Profit After Tax
Minority Interests
Pref. & Special Div
FX And Other Adj.
Net Profit
Dec-13A
4,120
2,601
6,721
(2,898)
3,823
(430)
3,393
190
3,583
0
3,583
0
3,583
(559)
Dec-14A
4,558
2,899
7,457
(3,146)
4,311
(635)
3,675
149
3,824
0
3,824
0
3,824
(561)
Dec-15F
4,906
3,035
7,941
(3,518)
4,423
(670)
3,753
105
3,858
0
3,858
0
3,858
(656)
Dec-16F
5,223
2,985
8,208
(3,624)
4,584
(1,369)
3,215
112
3,328
0
3,328
0
3,328
(566)
Dec-17F
5,555
3,053
8,608
(3,788)
4,821
(1,006)
3,815
120
3,935
0
3,935
0
3,935
(669)
3,024
(17)
0
0
3,007
3,007
3,263
(15)
0
0
3,248
3,248
3,202
(12)
0
0
3,190
3,190
2,762
(12)
0
0
2,750
2,750
3,266
(13)
0
0
3,253
3,253
Dec-13A
81.8%
83.8%
89.3%
100.0%
62.9%
78.4%
17.0%
58.0%
0.076%
0.051%
0.17%
Dec-14A
82.2%
84.2%
90.3%
100.0%
63.9%
80.0%
17.3%
58.3%
0.121%
0.081%
0.30%
Dec-15F
80.0%
82.3%
88.7%
100.0%
62.5%
78.1%
18.4%
58.3%
0.178%
0.115%
0.43%
Dec-16F
79.2%
82.2%
88.5%
100.0%
62.4%
77.7%
19.4%
59.4%
0.387%
0.249%
0.83%
Dec-17F
79.2%
82.7%
88.9%
100.0%
62.5%
78.0%
20.3%
60.9%
0.288%
0.186%
0.59%

296
BY THE NUMBERS
Balance Sheet
(S$m)
Total Gross Loans
Intangible Assets
Total Assets
Bank Deposits
Total Liabilities
Minority Interests
Total Equity
Dec-13A
206,861
30,366
Dec-14A
220,866
30,076
Dec-15F
228,369
31,980
Dec-16F
237,550
34,018
Dec-17F
247,616
36,198
237,227
3,408
240,635
4,144
12,570
16,714
26,881
0
284,230
214,548
13,705
20,016
248,269
0
9,382
257,651
26,389
190
26,579
250,942
3,729
254,671
4,149
12,833
16,982
35,083
0
306,736
233,750
11,226
21,904
266,880
0
10,084
276,964
29,569
203
29,772
260,349
4,399
264,748
4,149
13,121
17,270
40,636
0
322,654
246,606
11,787
21,923
280,317
0
10,286
290,602
31,836
215
32,051
271,568
5,768
277,335
4,149
13,420
17,569
41,628
0
336,532
257,704
12,377
21,942
292,023
0
10,491
302,514
33,791
227
34,018
283,814
6,773
290,587
4,149
13,730
17,879
40,509
0
348,975
266,981
12,995
21,962
301,939
0
10,701
312,640
36,096
240
36,336
Dec-13A
3.5%
2.0%
6.9%
61.3%
1.03%
2.71%
1.69%
1.92%
2.76%
11.2%
1.53%
15.6%
39.3%
1.12%
Dec-14A
10.9%
12.8%
6.7%
61.1%
1.02%
2.69%
1.67%
1.95%
2.65%
14.7%
1.54%
14.7%
37.0%
1.10%
Dec-15F
6.5%
2.6%
0.9%
61.8%
1.06%
2.79%
1.74%
1.99%
2.68%
15.1%
1.56%
17.0%
36.2%
1.01%
Dec-16F
3.4%
3.6%
(13.8%)
63.6%
1.08%
2.84%
1.77%
2.03%
2.69%
29.9%
1.58%
17.0%
36.1%
0.83%
Dec-17F
4.9%
5.2%
18.3%
64.5%
1.09%
2.87%
1.79%
2.08%
2.69%
20.9%
1.62%
17.0%
36.5%
0.95%
Dec-13A
17.3%
1.7%
0.9%
43.1%
0.6%
164.3%
1.4%
13.2%
24.7%
17.9%
83.4%
1.2%
14.8%
Dec-14A
9.5%
1.7%
11.5%
42.2%
0.8%
158.1%
1.5%
13.9%
25.6%
8.9%
83.8%
1.2%
1.0%
Dec-15F
2.7%
1.8%
4.7%
44.3%
0.7%
167.7%
1.6%
14.3%
25.4%
5.5%
81.8%
1.3%
7.3%
Dec-16F
3.4%
1.8%
-1.6%
44.2%
1.0%
144.7%
1.8%
14.4%
24.9%
4.5%
81.4%
2.0%
1.2%
Dec-17F
3.6%
1.8%
2.3%
44.0%
1.1%
137.9%
1.9%
14.6%
24.5%
3.6%
81.7%
2.3%
2.0%
Key Ratios
Total Income Growth
Cost Of Funds
Net Interest Spread
Effective Tax Rate
Key Drivers
Loan Growth (%)
Net NPL Ratio (%)
GP Ratio (%)
Tier 1 Ratio (%)
Total CAR (%)
Deposit Growth (%)
Gross NPL Ratio (%)
297
Company Note
Singapore
UOL Group
ADD (no change)
Multiple engines
Current price:
Target price:
Previous target:
Up/downside:
S$6.15
S$8.24
S$8.24
34.0%
Reuters:
Bloomberg:
Market cap:
UTOS.SI
UOL SP
US$3,466m
S$4,897m
US$5.49m
S$7.74m
787.2m
52.0%

Current shares o/s
Free float:
Principal Gardens to extend residential earnings visibility

New property and still-positive rental spreads to underpin rental income
Pan-Asian hotel presence, with plans to expand into Europe
Maintain Add with unchanged RNAV-backed target price of S$8.24
Diversified business model with strong cashflow generation

UOL has a diversified business model spanning across residential, commercial and
retail as well as hotel operations. In addition, it derives dividend income from its stake in
UOB shares. This provides the group with a strong recurrent cashflow base (56% of
9M15 topline), with earnings boost from residential development activities.
The recent launch of Principal Gardens, which has a 20% take-up rate at an average
selling price of S$1,630psf, has extended the groups development earnings pipeline.
This is in addition to progressive billings from Botanique at Bartley (71% sold),
Riverbanks @ Fernvale (64% sold) and Seventy St Patricks (96% sold). Overseas, its
398-unit residential project in Changfeng is also slated for launch in 1Q16.
8.60
117.0
7.60
110.3
6.60
103.7
5.60
6
97.0
Vol m
Diversified business model with strong cashflow generation from investment

properties and hotel operations
Launch of Principal Gardens to boost 2H16 earnings
No changes.
Price Close
Rental income boost from One KM

In addition to positive rental reversions for its office and retail properties, a full years
contributions from One KM also helped lift rental contributions. Meanwhile, with an
estimated one-third of its leasable area due to be renewed in 2016, the still-marginally
positive spreads between spot and passing rents for its office space should lead to a
slight uplift in rental income.
2
Dec-14
Mar-15
Jun-15
Strong hotel brands, pan Asian presence
Sep-15
Source: Bloomberg
Price performance
Absolute (%)
Relative (%)
1M
-6.5
-2.0
3M
-1.0
-0.7
12M
-8.4
4.4
UOL operates the Pan Pacific and Parkroyal hotels and serviced suites brands. As at
3Q15, it owned 6,163 rooms and managed a further 9,865 keys across Singapore,
Malaysia, Australia, Myanmar and Vietnam. The group is also diversifying
geographically with its first 190-room Pan Pacific-branded hotel in London. The latter is
part of a mixed-use development comprising 109 residential units with a retail and hotel
component.
Maintain Add
We retain our Add call with an unchanged target price of S$8.24. We continue to like
UOLs diversified business model and its strong cashflow generation. Given UOLs
healthy balance sheet and gearing of 0.31x, we believe it is well positioned to replenish
its land bank to extend its earnings visibility.
[X]
Financial Summary
Analyst
LOCK Mun Yee
T (65) 6210 8606

Net Profit (S$m)
Core EPS (S$)
Core EPS Growth
FD Core P/E (x)
DPS (S$)
Dividend Yield
EV/EBITDA (x)
P/FCFE (x)
Net Gearing
P/BV (x)
ROE
Dec-13A
1,059
410.5
785.8
0.45
(7.4%)
13.63
0.20
3.25%
17.57
NA
28.0%
0.70
5.37%
Dec-14A
1,361
675.9
947.7
0.79
75.3%
7.77
0.15
2.44%
11.77
NA
33.0%
0.63
8.54%
Dec-15F
1,280
438.7
489.1
0.55
(30.6%)
11.20
0.16
2.65%
17.68
11.34
25.7%
0.61
5.53%
1.19
Dec-16F
1,465
450.2
460.5
0.58
6.5%
10.52
0.18
2.85%
15.82
6.24
17.4%
0.58
5.64%
1.04
Dec-17F
2,102
570.3
506.8
0.64
10.1%
9.56
0.19
3.14%
11.92
25.37
12.9%
0.56
5.96%
1.12

Powered by
EFA
BY THE NUMBERS
Share price info

Share px perf. (%)
1M
3M
12M
Relative
-2.0
-0.7
4.4
Absolute
-6.5
-1.0
Major shareholders
Wee related vehicles (incl Haw Par)
-8.4
% held
31.2
9.8
Schroders
7.0
P/BV vs ROE
1.000
0.900
0.800
0.700
0.600
0.500
0.400
0.300
0.200
0.100
0.000
12.0%
10.8%
9.6%
8.4%
7.2%
6.0%
4.8%
3.6%
2.4%
1.2%
0.0%
Growth
18.0
16.0
14.0
12.0
10.0
8.0
6.0
4.0
2.0
0.0
140%
118%
96%
73%
51%
29%
7%
-16%
-38%
-60%
ROE (rhs)
Profit & Loss

(S$m)
Total Net Revenues
Gross Profit
Operating EBITDA
Operating EBIT
Exceptional Items
Pre-tax Profit
Taxation
Profit After Tax
Minority Interests
Pref. & Special Div
Net Profit
Dec-13A
1,059
408
410
(59)
352
(28)
115
0
439
513
952
(70)
Dec-14A
1,361
525
676
(60)
616
(29)
158
0
745
353
1,099
(77)
Dec-15F
1,280
494
439
(71)
368
(37)
191
0
522
61
583
(42)
Dec-16F
1,465
565
450
(74)
376
(31)
216
0
562
0
562
(45)
Dec-17F
2,102
811
570
(77)
494
(18)
142
0
618
0
618
(49)
881
(96)
0
1,022
(74)
0
541
(52)
0
517
(56)
0
569
(62)
0
786
346
346
948
615
615
489
432
432
460
460
460
507
507
507
Cash Flow
(S$m)
EBITDA
Tax Paid
Capex
Shares Repurchased
Dividends Paid
Preferred Dividends
Dec-13A
410
Dec-14A
676
Dec-15F
439
Dec-16F
450
Dec-17F
570
54
(925)
505
731
168
(541)
574
(32)
(47)
418
(154)
(423)
196
(35)
(97)
(608)
(157)
(144)
187
(43)
(28)
915
(125)
(111)
153
(42)
(27)
1,154
(125)
(48)
88
(41)
(30)
708
(125)
(423)
(577)
156
0
0
(157)
658
4
(297)
(422)
(67)
1
(184)
(309)
(69)
0
(36)
(161)
(355)
0
(154)
(92)
(128)
(138)
(152)
(32)
(30)
(36)
534
(43)
(237)
(42)
(249)
(41)
(548)
299
BY THE NUMBERS
Balance Sheet
(S$m)
Total Debtors
Inventories
Fixed Assets
Total Investments
Intangible Assets
Short-term Debt
Total Creditors
Total Provisions
Total Liabilities
Minority Interests
Total Equity
Dec-13A
294
Dec-14A
287
Dec-15F
544
Dec-16F
1,140
Dec-17F
1,138
378
1
1,517
2,190
1,169
7,037
0
26
8,232
1,131
248
1
2,383
2,918
1,241
7,664
0
26
8,930
1,292
351
1
1,959
2,854
1,295
8,190
0
32
9,517
1,358
281
1
1,295
2,717
1,347
8,603
0
36
9,986
1,325
634
1
894
2,667
1,395
8,787
0
52
10,234
1,151
447
100
1,678
1,184
282
75
1,649
1,679
421
121
1,900
1,421
401
138
1,864
1,386
461
198
1,810
1,204
333
1,516
0
3,194
6,760
467
7,227
390
2,069
0
3,718
7,643
488
8,131
366
1,787
0
3,686
8,004
680
8,685
418
1,804
0
3,668
8,327
708
9,035
467
1,671
0
3,481
8,682
738
9,420
Dec-13A
(7.6%)
2.8%
38.8%
(2.63)
8.80
10.93
7.40%
56.3%
100.0
0.42
203.5
12.7%
3.87%
3.94%
Dec-14A
28.5%
64.7%
49.7%
(3.41)
9.71
17.74
6.98%
20.1%
83.9
0.33
159.1
22.0%
6.02%
6.24%
Dec-15F
(5.9%)
(35.1%)
34.3%
(2.84)
10.16
8.62
7.16%
30.0%
85.3
0.38
163.1
9.6%
3.31%
4.25%
Dec-16F
14.4%
2.6%
30.7%
(1.99)
10.57
9.03
8.00%
30.0%
78.9
0.37
167.2
11.2%
3.34%
4.35%
Dec-17F
43.5%
26.7%
27.1%
(1.54)
11.02
12.14
8.00%
30.0%
79.4
0.33
121.8
18.8%
4.39%
4.57%
Dec-13A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
56.7%
38.7%
N/A
N/A
Dec-14A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
46.7%
49.7%
N/A
N/A
Dec-15F
N/A
N/A
N/A
N/A
N/A
N/A
N/A
54.7%
41.2%
N/A
N/A
Dec-16F
N/A
N/A
N/A
N/A
N/A
N/A
N/A
48.7%
47.5%
N/A
N/A
Dec-17F
N/A
N/A
N/A
N/A
N/A
N/A
N/A
33.3%
63.9%
N/A
N/A
Key Ratios
Revenue Growth
BVPS (S$)
Effective Tax Rate
Inventory Days
ROIC (%)
ROCE (%)
Key Drivers
Gross Margins (%)
300
Company Note
Singapore
Venture Corporation
ADD (no change)
US recovery play
Current price:
Target price:
Previous target:
Up/downside:
S$8.44
S$10.11
S$10.11
19.8%
Reuters:
Bloomberg:
Market cap:
VENM.SI
VMS SP
US$1,653m
S$2,336m
US$3.51m
S$4.94m
274.7m
91.6%

Current shares o/s
Free float:
No change.
Tailwinds for Venture include recovering US economy, strong US$ and weak Asian
currencies.
FY17 earnings will be boosted by the completion of a S$16.8m amortisation charge

for the acquisition of GES 10 years back
TPP and new demand from non-traditional tech companies keen to leverage their
customer base could present long-term opportunities.
Backed by strong FCF, base-case DPS of S$0.50 has been the established record.
Maintain Add. 5.9% dividend yields can limit any share price downside.
Growth normalising, risks remain

Ventures earnings momentum was hurt by customer consolidation in recent years. Most
of these have passed and normalcy has returned. Further M&As of its customers in the
US cannot be ruled out but Venture now has ample experience in dealing with such
situations. The stronger US$, though a boon to Venture, does have a flip side as US
exports become more expensive. Global economic conditions will affect Ventures
customers but the consensus view of a US recovery helps.
New niche opportunities

Price Close
8.40
118.0
7.90
105.5
7.40
3
93.0
Vol m
1
Dec-14
Mar-15
Jun-15
Sep-15
Source: Bloomberg
Price performance
Absolute (%)
Relative (%)
1M
2.1
6.6
3M
1.7
2.0
12M
8.5
21.3
A blue ocean strategy places Venture in good stead to address new opportunities. The
company is already engaged in life sciences products and 3D printing. Non-traditional
tech companies such as Alphabet and Amazon are also capitalising on their user base
to push new devices. This could spell opportunities for Venture given its excellent track
record in product design.
TPP could boost US tech exports

A feature of the TPP agreement requires members to join the WTO Information
Technology Agreement (ITA), a key trade pact that eliminates tariffs on tech products.
The Semiconductor Industry Association estimates that the ITA could eliminate tariffs on
roughly US$1tr worth of tech products.
Improving FCF has also caught customers attention

Over the years, there has been a trend of customers asking their manufacturing
partners/suppliers to hold more inventories or act as hubs on their behalf. This has led to
longer cash cycle days at Venture. Over FY05-09, the average inventory days were 66
versus 101 days over FY10-14. Rising working capital requirements is one impediment
to a higher dividend payout for Venture.
Reiterate Add
We reiterate our Add call on Venture, with an unchanged target price that is based on
14x CY17 earnings. The market views Venture as a proxy play for the recovering US
economy and US$ strength. Its base-case DPS of S$0.50 (5.9% dividend yield) will
support the share price as the company continues to grow in a sustainable manner. A
fragmented shareholding structure could tempt private equity funds more than industry
peers that have no need for extra capacity.
[X]
Financial Summary
Analyst
William TNG, CFA
T (65) 6210 8676
Revenue (S$m)
Net Profit (S$m)
Core EPS (S$)
Core EPS Growth
FD Core P/E (x)
Price To Sales (x)
DPS (S$)
Dividend Yield
EV/EBITDA (x)
P/FCFE (x)
Net Gearing
P/BV (x)
ROE
Dec-13A
2,330
127.5
0.46
(9.1%)
18.96
0.99
0.50
5.92%
11.71
33.48
(12.5%)
1.27
7.0%
Dec-14A
2,465
136.8
0.51
9.6%
16.97
0.94
0.50
5.92%
10.62
16.82
(12.0%)
1.24
7.5%
Dec-15F
2,668
157.9
0.55
8.5%
15.31
0.87
0.50
5.92%
9.14
17.22
(11.7%)
1.24
8.1%
1.02
Dec-16F
2,819
169.2
0.61
11.5%
13.77
0.83
0.50
5.92%
8.32
15.61
(11.8%)
1.22
8.9%
1.00
Dec-17F
2,970
199.5
0.72
17.9%
11.68
0.78
0.50
5.92%
7.62
13.98
(12.4%)
1.18
10.3%
1.07

Powered by
EFA
BY THE NUMBERS
Share price info

Share px perf. (%)
1M
3M
12M
Relative
6.6
2.0
21.3
Absolute
2.1
1.7
Major shareholders
Aberdeen Asset
8.5
% held
18.9
Sprucegrove Investment
7.0
Wong Ngit Liong
6.9
P/BV vs ROE
1.60
1.40
1.20
1.00
0.80
0.60
0.40
0.20
0.00
12.00%
10.50%
9.00%
7.50%
6.00%
4.50%
3.00%
1.50%
0.00%
Growth
20.0
18.0
16.0
14.0
12.0
10.0
8.0
6.0
4.0
2.0
0.0
30.0%
25.0%
20.0%
15.0%
10.0%
5.0%
0.0%
-5.0%
-10.0%
-15.0%
-20.0%
ROE (rhs)
Profit & Loss

FY17 boosted by end of intangible
amortisation
(S$m)
Total Net Revenues
Gross Profit
Operating EBITDA
Operating EBIT
Exceptional Items
Pre-tax Profit
Taxation
Profit After Tax
Minority Interests
Preferred Dividends
Net Profit
Dec-13A
2,330
289
172
(46)
126
0
4
5
136
0
136
(9)
Dec-14A
2,465
572
190
(44)
145
2
5
2
153
0
153
(17)
Dec-15F
2,668
625
222
(46)
176
1
1
7
186
0
186
(28)
Dec-16F
2,819
663
243
(48)
195
1
1
1
199
0
199
(30)
Dec-17F
2,970
698
263
(32)
231
1
1
1
234
0
234
(35)
127
0
0
137
0
0
158
0
0
169
0
0
199
0
0
127
127
127
137
139
139
158
152
152
169
169
169
199
199
199
Cash Flow
Expecting limited capex
(S$m)
EBITDA
Tax Paid
Capex
Shares Repurchased
Dividends Paid
Preferred Dividends
Dec-13A
172.0
(4.4)
(61.4)
Dec-14A
189.7
(4.6)
(10.5)
Dec-15F
222.3
(1.0)
(38.5)
Dec-16F
243.2
(1.0)
(39.5)
Dec-17F
262.9
(1.0)
(39.8)
16.6
0.3
(3.9)
119.3
(34.9)
1.5
(3.0)
0.2
(36.2)
(11.1)
3.6
0.0
(137.5)
17.2
1.5
(17.2)
176.0
(56.7)
0.0
0.0
19.5
(37.2)
1.7
0.0
0.0
(137.4)
2.5
1.5
(15.1)
171.7
(30.0)
0.0
0.0
(0.5)
(30.5)
(6.2)
0.0
0.0
(137.4)
2.4
1.5
(27.8)
178.8
(30.0)
0.0
0.0
(0.5)
(30.5)
1.0
0.0
0.0
(138.1)
2.4
1.5
(29.8)
196.2
(30.0)
0.0
0.0
(0.5)
(30.5)
1.0
0.0
0.0
(138.1)
10.2
(134.8)
(51.8)
71.9
84.2
0.2
(135.5)
3.3
140.5
139.8
0.0
(143.6)
(2.3)
135.0
142.2
0.0
(137.1)
11.2
149.3
149.3
0.0
(137.1)
28.6
166.7
166.7
302
BY THE NUMBERS
Balance Sheet
Carrying more inventories on

customers behalf
(S$m)
Total Debtors
Inventories
Fixed Assets
Total Investments
Intangible Assets
Short-term Debt
Total Creditors
Total Provisions
Total Liabilities
Minority Interests
Total Equity
Dec-13A
391
562
528
0
1,481
153
101
701
7
961
162
435
6
603
0
Dec-14A
393
593
553
0
1,539
188
142
640
20
989
169
Dec-15F
383
702
560
0
1,644
192
124
640
20
975
163
Dec-16F
389
742
591
0
1,722
194
108
640
20
962
164
Dec-17F
409
781
622
0
1,813
194
110
640
20
964
165
556
7
725
0
587
7
758
0
618
7
790
0
0
0
10
613
1,827
2
1,829
479
10
657
0
0
0
0
6
663
1,862
2
1,865
0
0
10
735
1,882
2
1,884
0
0
10
768
1,913
2
1,915
0
0
10
800
1,975
2
1,977
Dec-13A
(2.44%)
(1.5%)
7.38%
0.84
6.66
108.1
6.6%
111%
74.75
91.7
55.79
8.8%
6.4%
5.65%
Dec-14A
5.83%
10.3%
7.69%
0.82
6.78
143.2
10.9%
90%
79.75
104.1
69.46
9.6%
7.3%
6.10%
Dec-15F
8.22%
17.2%
8.33%
0.80
6.82
173.4
15.0%
74%
83.10
99.4
73.63
11.7%
8.7%
7.15%
Dec-16F
5.67%
9.4%
8.63%
0.82
6.93
192.5
15.0%
69%
87.83
97.6
76.54
12.6%
9.5%
7.44%
Dec-17F
5.34%
8.1%
8.85%
0.89
7.15
227.6
15.0%
59%
87.72
97.5
76.44
14.5%
11.0%
8.53%
Dec-13A
-1.0%
11.1%
N/A
N/A
N/A
N/A
N/A
N/A
Dec-14A
0.0%
6.8%
N/A
N/A
N/A
N/A
N/A
N/A
Dec-15F
0.0%
6.8%
N/A
N/A
N/A
N/A
N/A
N/A
Dec-16F
0.0%
6.8%
N/A
N/A
N/A
N/A
N/A
N/A
Dec-17F
0.0%
6.8%
N/A
N/A
N/A
N/A
N/A
N/A
Key Ratios
Effective tax rate of 15% may drop, as
higher value-added activities
contribution increase
Revenue Growth
BVPS (S$)
Effective Tax Rate
Inventory Days
ROIC (%)
ROCE (%)
Key Drivers
Revenue growth aided by favourable
exchange rate

303
Company Note
Singapore
Wilmar International
HOLD (no change)
Asias leading agribusiness group
Current price:
Target price:
Previous target:
Up/downside:
S$2.94
S$3.36
S$3.36
14.4%
Reuters:
Bloomberg:
Market cap:
WLIL.SI
WIL SP
US$13,152m
S$18,581m
US$17.31m
S$24.39m
6,403m
29.5%

Current shares o/s
Free float:
Strong crush margins boosted 9M15 oilseeds and grains profit.

Tropical oils business to benefit from higher biodiesel sales and CPO prices.
We project minimal impact from the unwinding of carry trade.
Maintain Hold, as share price is supported by attractive 0.8x FY16 P/BV.
Resilient earnings despite lower commodity prices in 9M15

The group posted a 1% increase in its 9M15 core net profit, thanks to the sharp rise in
its oilseeds and grains profit. This is commendable, given the lower selling prices for all
its key products. We believe this demonstrates that Wilmars earnings are more resilient
than those of its peers, as its business model is more integrated.
Oilseeds and grains posted the best quarterly earnings ever in 3Q
3.40
106.0
2.90
98.5
2.40
30
91.0
20
Vol m
Earnings were resilient against lower commodity prices in 9M15.
The oilseeds and grains division posted a 39% yoy jump in its 3Q15 pretax profit to
US$244m, the best quarterly earnings for the division since listing. This was due to
higher sales volumes, as well as stronger crush margins (due to significantly lower
commodity financing activities by financial traders in China) and consumer product
margins (due to lower feedstock costs). This helped to cushion weaker tropical oils
earnings.
No change.
Price Close
Beneficiary of Indonesia biodiesel mandate

The group is expected to be a key beneficiary of Indonesias plans to raise its biodiesel
blend from 15% in 2015 to 20% of diesel in 2016. This is because the group is the
largest biodiesel producer in Indonesia and has been allocated 50% of the biodiesel
volumes that Pertamina plans to purchase from Nov 15- Apr 16. This would boost its
tropical oils earnings in FY16.
10
Dec-14
Mar-15
Jun-15
Project better earnings in 2016
Sep-15
Source: Bloomberg
Price performance
Absolute (%)
Relative (%)
1M
-3.9
0.6
3M
13.1
13.4
12M
-8.1
4.7
We project that Wilmar will deliver stronger earnings in FY16, driven by higher
contributions from tropical oils, oilseeds and grains, as well as sugar. The groups
tropical oils division is likely to benefit from higher CPO selling prices and biodiesel sales
volumes, while the sugar division may benefit from stronger sugar prices. We expect the
oilseeds and grains business to gain from the groups expansion into the consumer
products business in order to raise the value added.
Minimal impact from unwinding of carry trade

Wilmar explained that the earnings impact from the unwinding of carry trade would not
be meaningful. The carry trade refers to the groups treasury activities of borrowing in
US$ and parking its cash in Rmb deposits that fetch higher interest rates to achieve
lower funding costs. Wilmar has no issue meeting maturing short-term debt obligations
of US$15.1bn, as total available liquid assets stood at US$18bn at end-Sep 2015.
Maintain Hold due to lack of strong catalysts

We believe the stock is attractive at 0.8x FY16 P/BV but it lacks strong catalysts. We
continue to advocate a Hold rating and would turn more positive on the stock if we see
more significant earnings contribution from its expansion into consumer products in
recent years.
[X]
Financial Summary
Analyst
T (60) 3 2261 9073
E ivy.ng@cimb.com
Revenue (US$m)
Net Profit (US$m)
Normalised EPS (US$)
DPS (US$)
Dividend Yield
EV/EBITDA (x)
P/FCFE (x)
Net Gearing
P/BV (x)
ROE
Dec-13A
44,085
2,285
1,319
0.20
6.4%
10.46
0.063
3.03%
11.54
13.79
89.4%
0.89
8.89%
Dec-14A
43,084
2,067
1,156
0.18
(11.4%)
11.80
0.058
2.77%
12.96
NA
89.6%
0.86
7.58%
Dec-15F
40,859
2,119
1,057
0.17
(8.5%)
12.90
0.050
2.38%
11.75
6.20
74.5%
0.82
6.67%
0.92
Dec-16F
46,646
2,333
1,234
0.19
16.7%
11.06
0.058
2.78%
11.30
NA
78.7%
0.78
7.40%
0.97
Dec-17F
51,605
2,680
1,384
0.22
12.2%
9.86
0.065
3.12%
10.14
NA
78.7%
0.74
7.87%
1.02
Powered by
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BY THE NUMBERS
Share price info

Share px perf. (%)
1M
3M
12M
Relative
0.6
13.4
4.7
Absolute
-3.9
13.1
-8.1
Major shareholders
% held
PPB Group & Kuok group
33.4
Archer Daniels Midland
18.1
Kuok Khoon Hong
12.0
P/BV vs ROE

3.00
12.00%
30.0
100%
2.50
10.00%
25.0
73%
2.00
8.00%
20.0
47%
1.50
6.00%
15.0
20%
1.00
4.00%
10.0
-7%
0.50
2.00%
5.0
-33%
0.00
0.00%
0.0
-60%
ROE (rhs)
Profit & Loss

(US$m)
Total Net Revenues
Gross Profit
Operating EBITDA
Operating EBIT
Exceptional Items
Pre-tax Profit
Taxation
Profit After Tax
Minority Interests
Preferred Dividends
Net Profit
Dec-13A
44,085
3,725
2,285
(608)
1,676
(18)
104
0
1,762
14
1,775
(385)
Dec-14A
43,084
3,816
2,067
(660)
1,407
50
81
0
1,538
0
1,538
(314)
Dec-15F
40,859
3,619
2,119
(620)
1,499
(137)
73
0
1,435
0
1,435
(316)
Dec-16F
46,646
4,132
2,333
(661)
1,672
(52)
76
0
1,697
0
1,697
(390)
Dec-17F
51,605
4,571
2,680
(714)
1,966
(118)
80
0
1,928
0
1,928
(463)
1,391
(72)
0
0
0
0
1,319
1,377
1,305
1,224
(68)
0
0
0
0
1,156
1,224
1,156
1,119
(62)
0
0
0
0
1,057
1,119
1,057
1,306
(72)
0
0
0
0
1,234
1,306
1,234
1,465
(81)
0
0
0
0
1,384
1,465
1,384
Dec-13A
2,285
28
(288)
0
0
113
(88)
(460)
1,590
(1,376)
174
(310)
53
(1,460)
859
20
0
(312)
Dec-14A
2,067
43
423
0
0
(231)
25
(318)
2,008
(1,093)
128
(144)
(162)
(1,272)
(1,139)
7
0
(414)
0
292
(1,253)
(517)
(402)
1,295
Dec-15F
2,119
0
1,535
0
0
0
(137)
(316)
3,202
(1,000)
0
0
0
(1,000)
0
0
0
(317)
0
0
(317)
1,885
2,202
2,671
Dec-16F
2,333
0
(1,994)
0
0
0
(52)
(390)
(103)
(1,000)
0
0
0
(1,000)
0
0
0
(370)
0
0
(370)
(1,473)
(1,103)
(634)
Dec-17F
2,680
0
(1,497)
0
0
0
(118)
(463)
602
(1,000)
0
0
0
(1,000)
0
0
0
(415)
0
0
(415)
(814)
(398)
71
Cash Flow
(US$m)
EBITDA
Tax Paid
Capex
Shares Repurchased
Dividends Paid
Preferred Dividends
2,248
2,816
2,946
990
649
305
BY THE NUMBERS
Balance Sheet
(US$m)
Total Debtors
Inventories
Fixed Assets
Total Investments
Intangible Assets
Short-term Debt
Total Creditors
Total Provisions
Total Liabilities
Minority Interests
Total Equity
Dec-13A
11,993
7,066
7,221
1,562
27,842
9,337
2,048
4,421
2,985
18,790
19,392
0
2,705
1,095
23,191
6,804
0
129
6,933
620
30,745
15,005
882
15,887
Dec-14A
7,661
8,040
6,581
2,234
24,515
9,477
2,166
4,402
2,998
19,043
15,204
0
2,938
1,055
19,197
7,158
0
169
7,327
623
27,147
15,495
916
16,411
Dec-15F
9,545
6,557
6,241
2,234
24,577
9,857
2,239
4,402
2,998
19,496
15,204
0
2,651
1,055
18,909
7,158
0
169
7,327
623
26,859
16,235
978
17,213
Dec-16F
8,072
7,889
7,125
2,234
25,319
10,196
2,315
4,402
2,998
19,911
15,204
0
2,872
1,055
19,131
7,158
0
169
7,327
623
27,081
17,099
1,050
18,149
Dec-17F
7,258
8,879
7,883
2,234
26,254
10,483
2,395
4,402
2,998
20,277
15,204
0
3,123
1,055
19,382
7,158
0
169
7,327
623
27,332
18,068
1,131
19,199
Dec-13A
(3.0%)
1.4%
5.18%
(2.22)
2.34
3.11
21.7%
31.0%
33.27
42.32
13.49
6.05%
5.44%
3.15%
Dec-14A
(2.3%)
(9.5%)
4.80%
(2.30)
2.42
2.55
20.4%
31.9%
34.44
64.15
14.64
4.89%
4.89%
2.60%
Dec-15F
(5.2%)
2.5%
5.19%
(2.00)
2.54
3.19
22.0%
30.0%
34.70
62.84
15.71
5.04%
4.60%
2.87%
Dec-16F
14.2%
10.1%
5.00%
(2.23)
2.67
3.56
23.0%
30.0%
31.55
57.53
13.51
5.85%
5.14%
3.04%
Dec-17F
10.6%
14.9%
5.19%
(2.36)
2.82
4.19
24.0%
30.0%
32.16
58.23
14.01
6.36%
5.56%
3.45%
Dec-13A
241,048
215,257
18.8
-4.0%
857
Dec-14A
238,287
210,063
20.6
7.1%
821
Dec-15F
244,287
223,991
21.0
5.8%
670
Dec-16F
250,287
232,717
21.5
6.1%
750
Dec-17F
256,287
240,534
22.0
5.9%
800
Key Ratios
Revenue Growth
BVPS (US$)
Effective Tax Rate
Inventory Days
ROIC (%)
ROCE (%)
Key Drivers
Mature Estates (ha)
306
Company Note
Singapore
Wing Tai Holdings
HOLD (no change)
Take a longer term view
Current price:
Target price:
Previous target:
Up/downside:
S$1.73
S$2.05
S$2.05
18.9%
Reuters:
Bloomberg:
Market cap:
WTHS.SI
WINGT SP
US$953.4m
S$1,347m
US$0.81m
S$1.14m
785.7m
49.7%

Current shares o/s
Free float:
Price Close
2.10
123.0
1.90
113.0
1.70
103.0
1.50
15
93.0
Vol m
10
5
Mar-15
Jun-15
Sep-15
Source: Bloomberg
Price performance
Absolute (%)
Relative (%)
Subdued Singapore residential market a drag on volume sales .

Overseas performance could improve in the medium term.
Stable rental income from investment properties
Retail division performance to remain modest.
Maintain Hold with an unchanged RNAV-based target price of S$2.05.
Challenging Singapore residential market

High supply of new completed inventory coupled with restrictive policies had reduced
volume transactions and prices of high-end projects. We expect this to persist in the
short to medium term, affecting Wing Tais 50%-owned Nouvel 18 and Le Nouvel
Ardmore. However, in a worst-case scenario where Wing Tai is unable to make any
sales for the two projects, an extension premium penalty in 2016 and 2017 will only
reduce its RNAV by 2% and 3%, respectively.
Overseas contributions to improve in the medium term
No change
Dec-14
1M
2.7
7.2
3M
5.8
6.1
12M
4.2
17.0
In Malaysia, cautious buying sentiment remains. Meanwhile, relaxation of home

purchase restrictions in certain cities in China should lift sentiment and enable Wing Tai
to tap the opportunity to sell units at its Horizon Lakeview and market its Luodian project
in 2HCY16. In Hong Kong, associate contributions will continue to drive recurrent
income from its commercial property portfolio, grow its hospitality income and identify
right market windows to market and sell its residential projects.
Stable investment properties

Investment properties account for 34% of its total assets and occupancies are healthy,
at 91% for Singapore commercial properties and 81% for serviced residences in
Singapore and Malaysia. These are likely to support earnings given the weakness in the
residential market.
Modest retail division performance

Retail operations (including associate contributions) generated total PBT of c.S$2m in
FY15. Despite good performance from selected brands such as Uniqlo, the general retail
sector remains fairly challenging as retailers continue to battle with the slow retail sales
environment and high labour cost. As such, we expect contributions from this division to
remain modest.
Maintain Hold
We think Wing Tais share price could remain range-bound in the near term. Meanwhile,
its healthy balance sheet with 0.1x gearing and valuations at 52% discount to RNAV
could limit downside risks. Hence, despite the 20% upside to our target price, we
maintain our Hold call due to the lack of potential near-term catalysts.
[X]
Financial Summary
Analyst
LOCK Mun Yee
T (65) 6210 8606

Net Profit (S$m)
Core EPS (S$)
Core EPS Growth
FD Core P/E (x)
DPS (S$)
Dividend Yield
EV/EBITDA (x)
P/FCFE (x)
Net Gearing
P/BV (x)
ROE
Jun-14A
803.4
49.3
254.4
0.15
(57%)
11.21
0.12
6.93%
40.62
NA
14.9%
0.46
4.19%
Jun-15A
676.7
(10.0)
150.3
0.05
(70%)
37.13
0.06
3.50%
NA
31.00
9.2%
0.42
1.19%
Jun-16F
507.1
124.9
63.1
0.11
134%
15.83
0.02
1.41%
14.91
14.88
9.5%
0.42
2.67%
0.78
Jun-17F
602.3
134.0
97.3
0.12
14%
13.84
0.04
2.17%
13.02
6.12
5.8%
0.41
2.99%
0.90
Jun-18F
621.9
110.0
105.4
0.14
8%
12.77
0.04
2.35%
15.12
7.08
3.3%
0.40
3.17%
1.42
Powered by
EFA
BY THE NUMBERS
Share price info

Share px perf. (%)
1M
3M
12M
60.0
250%
0.600
12.0%
50.0
192%
0.500
10.0%
40.0
133%
% held
0.400
8.0%
6.0%
75%
50.3
0.300
30.0
0.200
4.0%
20.0
17%
0.100
2.0%
10.0
-42%
0.000
0.0%
7.2
6.1
17.0
Absolute
2.7
5.8
4.2
Mr Cheng Wai Keung (deemed

interest)

Growth
14.0%
Relative
Major shareholders
P/BV vs ROE
0.700
0.0
-100%
ROE (rhs)
Profit & Loss

(S$m)
Total Net Revenues
Gross Profit
Operating EBITDA
Operating EBIT
Exceptional Items
Pre-tax Profit
Taxation
Profit After Tax
Minority Interests
Pref. & Special Div
Net Profit
Jun-14A
803.4
803.4
49.3
(14.4)
35.0
(27.2)
154.8
0.0
162.5
149.9
312.5
(36.1)
Jun-15A
676.7
676.7
(10.0)
(14.4)
(24.4)
(39.8)
119.3
0.0
55.1
120.2
175.3
(9.4)
Jun-16F
507.1
507.1
124.9
(13.8)
111.0
(35.3)
23.8
0.0
99.5
(24.6)
74.9
(7.5)
Jun-17F
602.3
602.3
134.0
(13.1)
120.9
(35.9)
32.5
0.0
117.5
0.0
117.5
(11.7)
Jun-18F
621.9
621.9
110.0
(12.4)
97.6
(35.5)
62.7
0.0
124.7
0.0
124.7
(12.5)
276.3
(22.0)
0.0
165.9
(15.6)
0.0
67.4
(4.3)
0.0
105.7
(8.5)
0.0
112.3
(6.8)
0.0
254.4
121.8
121.8
150.3
36.5
36.5
63.1
85.2
85.2
97.3
97.3
97.3
105.4
105.4
105.4
Cash Flow
(S$m)
EBITDA
Tax Paid
Capex
Shares Repurchased
Dividends Paid
Preferred Dividends
Jun-14A
49.3
Jun-16F
124.9
Jun-17F
134.0
Jun-18F
110.0
184.4
(38.2)
125.9
108.9
(112.8)
0.0
(46.8)
(112.1)
(20.4)
0.0
(2.8)
0.0
(25.2)
146.4
(7.0)
0.0
24.6
0.0
(10.8)
100.4
(7.0)
0.0
0.0
0.0
(16.9)
243.1
(7.0)
0.0
0.0
0.0
(17.9)
200.9
(7.0)
0.0
0.0
99.3
79.0
(136.6)
0.0
0.0
(94.3)
0.0
15.2
8.2
(110.9)
(12.6)
0.0
(47.3)
0.0
(19.4)
(26.4)
16.6
0.0
0.0
(18.9)
0.0
(41.7)
(48.7)
25.6
0.0
0.0
(29.2)
0.0
(31.6)
(38.5)
27.7
0.0
0.0
(31.6)
(72.0)
(302.9)
(57.4)
(228.0)
(43.3)
(45.7)
(43.9)
(47.5)
(44.8)
(48.8)
(1.8)
Jun-15A
(10.0)
308
BY THE NUMBERS
Balance Sheet
(S$m)
Total Debtors
Inventories
Fixed Assets
Total Investments
Intangible Assets
Short-term Debt
Total Creditors
Total Provisions
Total Liabilities
Minority Interests
Total Equity
Jun-14A
835
Jun-15A
881
Jun-16F
884
Jun-17F
1,031
Jun-18F
1,145
80
1,511
52
2,478
131
2,274
0
0
2,406
186
29
1,285
47
2,241
119
2,527
0
0
2,646
36
21
1,285
35
2,226
112
2,529
0
0
2,641
36
25
1,181
42
2,279
106
2,626
0
0
2,733
37
26
1,076
43
2,291
101
2,736
0
0
2,837
38
260
66
513
1,116
177
51
264
1,155
133
38
207
1,171
157
46
240
1,196
163
47
248
1,223
112
1,228
0
1,741
2,970
173
3,143
106
1,261
0
1,525
3,173
189
3,362
79
1,251
0
1,458
3,217
192
3,409
94
1,291
0
1,531
3,285
196
3,481
97
1,320
0
1,568
3,359
200
3,559
Jun-14A
(39.7%)
(67%)
6.1%
(0.59)
3.78
0.88
11.6%
90%
55.91
N/A
N/A
2.00%
1.07%
3.02%
Jun-15A
(15.8%)
(120%)
(1.5%)
(0.40)
4.07
(0.52)
5.3%
157%
29.29
N/A
N/A
(1.40%)
(0.37%)
1.61%
Jun-16F
(25.1%)
NA
24.6%
(0.41)
4.12
2.56
10.0%
22%
18.08
N/A
N/A
7.36%
2.60%
2.49%
Jun-17F
18.8%
7%
22.3%
(0.26)
4.21
2.75
10.0%
30%
14.22
N/A
N/A
7.82%
2.76%
2.74%
Jun-18F
3.2%
(18%)
17.7%
(0.15)
4.30
2.18
10.0%
30%
15.20
N/A
N/A
7.03%
2.24%
2.80%
Jun-14A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
4.5%
67.9%
N/A
N/A
Jun-15A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
5.5%
63.6%
N/A
N/A
Jun-16F
N/A
N/A
N/A
N/A
N/A
N/A
N/A
6.9%
55.8%
N/A
N/A
Jun-17F
N/A
N/A
N/A
N/A
N/A
N/A
N/A
5.9%
64.2%
N/A
N/A
Jun-18F
N/A
N/A
N/A
N/A
N/A
N/A
N/A
5.9%
65.2%
N/A
N/A
Key Ratios
Revenue Growth
BVPS (S$)
Effective Tax Rate
Inventory Days
ROIC (%)
ROCE (%)
Key Drivers
Gross Margins (%)
309
Company Note
Singapore
Yangzijiang Shipbuilding
HOLD (no change)
Declining earnings
Current price:
Target price:
Previous target:
Up/downside:
S$1.10
S$1.21
S$1.21
10.5%
Reuters:
Bloomberg:
Market cap:
YAZG.SI
YZJSGD SP
US$2,970m
S$4,196m
US$9.68m
S$13.64m
3,832m
38.0%

Current shares o/s
Free float:

119.7
1.300
111.1
1.100
102.6
0.900
60
94.0
40
Vol m
Earnings will continue to deteriorate in 2016-17 on lower margin jobs, deferral of

deliveries, weak order momentum and investment in lower-return investments.
Weak dry bulk shipping outlook

The dry bulk shipping market will remain in recession in 2016-17, in our view, due to
contracting demand for iron ore and coal, especially in China. Other than coping with
lower order momentum, YZJ could also face deferrals and cancellation of the 71 units of
bulk carriers on order, amounting to US$2.34bn. Some customers in Japan and the US
have downsized their operations and may not be able to take on delivery. Management
expects to see deferral of deliveries and cancellations in 2016.
Containerships tough competition
Lower return from HTM investments
1.500
20
Dec-14
C.50% of YZJs US$4.8bn order book is dominated by bulk carriers which face
heightened cancellation and deferral risks amidst recession in the dry bulk sector.
We believe larger containerships will dominate the future trend in the industry, and YZJ
faces stiff competition from the Japanese and Korean yards, which have stronger track
records and faster delivery timeframes. The weakening yen also serves as a competitive
disadvantage for Chinese yards. Being new in the large-scale containerships segment,
YZJ may need to sacrifice margins for contract wins. As such, we revise downward our
shipbuilding margin estimates from 16% to 14.5% for FY16-17.
No change
Price Close
Iinvestment in held-to-maturity (HTM) financial assets will be gradually be replaced with

equity stakes in venture capital funds / government-hybrid funds which yield lower
return (c.10%, down from 15-20%). As such, investment income, which used to
contribute c.40% of the companys profit, is likely to slide, in tandem with shipbuilding
profit, in our view.
Maintain Hold
Mar-15
Jun-15
Sep-15
Source: Bloomberg
Price performance
Absolute (%)
Relative (%)
1M
-9.5
-5.0
3M
-0.5
-0.2
12M
-9.5
3.3
We have reduced our EPS forecast by 3-14% for FY15-17 on the back of fewer orders
and lower margin. Our target price is based on 0.9x P/BV, -1s.d. of its historical average,
and a 10% premium over Singapore-listed smaller yards, which are struggling through
an order drought. Potential re-rating catalysts could come from a shipbuilding sector
turnaround or an upside surprise in Chinas demand growth.
[X]
Financial Summary
Analyst
LIM Siew Khee
T (65) 6210 8664
Revenue (Rmbm)
Operating EBITDA (Rmbm)
Net Profit (Rmbm)
Core EPS (Rmb)
Core EPS Growth
FD Core P/E (x)
DPS (Rmb)
Dividend Yield
EV/EBITDA (x)
P/FCFE (x)
Net Gearing
P/BV (x)
ROE
Dec-13A
14,339
4,814
3,096
0.81
(13.5%)
6.16
0.22
4.43%
6.41
96.84
65.3%
1.07
18.6%
Dec-14A
15,354
3,989
3,483
0.91
12.5%
5.47
0.25
4.99%
6.08
8.68
25.6%
0.93
18.2%
Dec-15F
16,163
4,382
3,087
0.81
(11.4%)
6.17
0.24
4.86%
4.99
6.71
14.7%
0.84
14.3%
1.03
Dec-16F
13,798
3,738
2,708
0.71
(12.3%)
7.04
0.21
4.26%
5.08
5.74
3.6%
0.78
11.5%
0.97
Dec-17F
12,215
3,219
2,148
0.56
(20.7%)
8.88
0.19
3.78%
5.02
7.42
(5.9%)
0.73
8.5%
0.79
Powered by
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BY THE NUMBERS
Share price info

Share px perf. (%)
1M
3M
12M
Relative
-5.0
-0.2
3.3
Absolute
-9.5
-0.5
Major shareholders
-9.5
% held
Newyard Worldwide
24.2
Lido Point Investment
14.0
Hongkong Hengyua
10.8
P/BV vs ROE
4.00
3.50
3.00
2.50
2.00
1.50
1.00
0.50
0.00
40.0%
35.0%
30.0%
25.0%
20.0%
15.0%
10.0%
5.0%
0.0%
Growth
10.00
9.00
8.00
7.00
6.00
5.00
4.00
3.00
2.00
1.00
0.00
35.0%
29.5%
24.0%
18.5%
13.0%
7.5%
2.0%
-3.5%
-9.0%
-14.5%
-20.0%
ROE (rhs)
Profit & Loss

(Rmbm)
Total Net Revenues
Gross Profit
Operating EBITDA
Operating EBIT
Exceptional Items
Pre-tax Profit
Taxation
Profit After Tax
Minority Interests
Preferred Dividends
Net Profit
Dec-13A
14,339
4,762
4,814
(285)
4,529
92
(1)
0
4,620
0
4,620
(1,542)
Dec-14A
15,354
4,144
3,989
(430)
3,559
386
8
0
3,953
0
3,953
(472)
Dec-15F
16,163
3,734
4,382
(465)
3,917
79
10
0
4,006
0
4,006
(921)
Dec-16F
13,798
3,233
3,738
(395)
3,342
161
10
0
3,514
0
3,514
(808)
Dec-17F
12,215
9,708
3,219
(349)
2,870
(18)
10
0
2,862
0
2,862
(717)
3,077
18
0
3,481
2
0
3,085
2
0
2,706
2
0
2,145
2
0
3,096
3,096
3,096
3,483
3,483
3,483
3,087
3,087
3,087
2,708
2,708
2,708
2,148
2,148
2,148
Cash Flow
(Rmbm)
EBITDA
Tax Paid
Capex
Shares Repurchased
Dividends Paid
Preferred Dividends
Dec-13A
4,814
Dec-14A
3,989
Dec-15F
4,382
Dec-16F
3,738
Dec-17F
3,219
(7,639)
5,331
266
1,091
1,276
264
(331)
(1,001)
(3,893)
(1,031)
576
(321)
(492)
9,082
(729)
10
79
(921)
3,817
(500)
161
(808)
4,182
(500)
(84)
(1)
(1,116)
5,206
91
0
(938)
(256)
(379)
(1,364)
(5,523)
0
0
(960)
(404)
0
(904)
(71)
0
0
(926)
(364)
0
(864)
0
0
0
(812)
(80)
(717)
3,698
(500)
(315)
(315)
0
(1,131)
0
0
0
(720)
0
4,358
(650)
197
(4,678)
(19)
(6,502)
1,216
2,195
8,040
0
(997)
1,915
2,841
2,833
0
(812)
2,505
3,318
3,156
0
(720)
1,847
2,567
2,332
311
BY THE NUMBERS
Balance Sheet
(Rmbm)
Total Debtors
Inventories
Fixed Assets
Total Investments
Intangible Assets
Short-term Debt
Total Creditors
Total Provisions
Total Liabilities
Minority Interests
Total Equity
Dec-13A
1,436
6,879
1,463
18,310
28,089
5,793
605
0
8,725
15,122
12,241
Dec-14A
2,653
6,721
2,015
14,374
25,762
6,117
809
2
8,088
15,016
5,414
Dec-15F
4,568
7,273
1,491
12,439
25,771
6,151
1,213
2
6,985
14,352
2,707
Dec-16F
7,083
6,209
1,268
12,384
26,944
6,256
1,577
2
6,324
14,160
2,707
Dec-17F
9,571
5,497
1,140
11,988
28,196
6,407
1,893
2
5,761
14,064
2,707
10,201
9,950
7,208
6,294
5,772
22,442
1,133
15,364
2,636
9,915
5,272
9,001
5,272
8,479
5,272
1,363
2,496
0
24,938
17,801
472
18,273
1,702
4,338
0
19,702
20,473
603
21,076
1,702
6,974
0
16,889
22,634
601
23,235
1,702
6,974
0
15,975
24,530
598
25,128
1,702
6,974
0
15,453
26,210
596
26,807
Dec-13A
(3.1%)
(0.2%)
33.6%
(3.12)
4.65
18.82
33.4%
22.7%
161.6
46.7
168.7
17.0%
17.6%
7.86%
Dec-14A
7.1%
(17.1%)
26.0%
(1.41)
5.34
14.51
11.9%
22.7%
161.7
56.6
184.9
9.5%
13.8%
7.53%
Dec-15F
5.3%
9.9%
27.1%
(0.89)
5.91
17.75
23.0%
24.9%
158.0
51.5
147.9
11.9%
14.0%
7.46%
Dec-16F
(14.6%)
(14.7%)
27.1%
(0.23)
6.40
16.83
23.0%
24.9%
178.8
47.8
139.4
10.2%
11.5%
6.33%
Dec-17F
(11.5%)
(13.9%)
26.4%
0.42
6.84
26.07
25.0%
27.8%
174.9
175.3
511.2
9.1%
8.7%
5.18%
Dec-13A
N/A
2,880.0
14,339
N/A
N/A
N/A
Dec-14A
N/A
1,980.0
15,354
N/A
N/A
N/A
Dec-15F
N/A
2,070.0
16,163
N/A
N/A
N/A
Dec-16F
N/A
1,530.0
13,798
N/A
N/A
N/A
Dec-17F
N/A
1,800.0
12,215
N/A
N/A
N/A
Key Ratios
Revenue Growth
Net Cash Per Share (Rmb)
BVPS (Rmb)
Effective Tax Rate
Inventory Days
ROIC (%)
ROCE (%)
Key Drivers
Outstanding Orderbook (Rmbm)
Order Book Wins (Rmbm)
Order Book Depletion (Rmbm)
No. Of Ships (unit)
312
Company Note
Singapore
Yoma Strategic Holdings
HOLD (no change)
Hope for a new future
Current price:
Target price:
Previous target:
Up/downside:
S$0.47
S$0.49
S$0.49
3.6%
Reuters:
Bloomberg:
Market cap:
YOMA.SI
YOMA SP
US$577.1m
S$815.4m
US$1.62m
S$2.28m
1,157m
58.1%

Current shares o/s
Free float:
No changes.
Possible political reform towards a democratic government in Myanmar may pave

the way for continuous economic growth.
Despite a slower FY3/16F, property sales may come back in FY3/17F, pending a
peaceful handover of power.
The group to open more KFC stores in the remaining part of FY16 and FY17.
Management is committed to continuing to expand its non-real estate businesses.
Maintain Hold with a target price of S$0.49 based on 35% discount to FY16 RNAV.
Positive readings from Nov 2015 general election

The general election held on 8 Nov 2015 was an historic milestone in Myanmar. The
National League for Democracy (NLD), led by Aung San Suu Kyi, won a landslide
victory. President Thein Sein vowed that the government and military would respect and
accept the results, and cooperate with the NLD for the formation of a new government.
International observers rated the election process as overall above expectations, citing
the orderly voting process and transparent counting.
Benefit from Myanmars growth outlook

Price Close
0.590
105.9
0.490
91.6
0.390
77.3
0.290
30
63.0
Vol m
20
10
Dec-14
Mar-15
Jun-15
Sep-15
Source: Bloomberg
Price performance
Absolute (%)
Relative (%)
1M
4.4
8.9
3M
27.0
27.3
12M
-16.9
-4.1
Back from years of military rule and western sanctions, Myanmar has enormous scope
to catch up with its ASEAN peers. The World Bank and IMF expect Myanmars GDP to
expand at a high single-digits growth rate in 2015/2016, topping the rest of the ASEAN
bloc. Independent researchers believe that there are plenty of investment opportunities
in various areas such as consumer goods, education, financial services, infrastructure,
telecommunication, tourism, etc.
Expect slow property sales in FY3/16 but a pickup in FY3/17

Yoma has seen a significant slowdown in its residential property sales since early-2015
as buyers adopted a wait-and-see attitude ahead of the countrys general election.
Management believes that Myanmars residential property market is likely to remain
slow in the coming quarters until the new government is formed by Apr 16. As such, the
group would phase its project developments according to market conditions.
Continue to build non-real estate businesses

Management has the vision of continuing to build up the groups non-real estate division
to match the scale of the groups real estate business by 2020. As of 2QFY16, the nonreal estate division, mainly the automotive and food & beverage businesses, formed
39% of group revenue. We expect the growth momentum of the groups non-real estate
businesses to remain strong in the medium term, underpinned by the strong demand for
the New Holland tractors and the opening of more KFC stores.
Hope for a new future

Yoma is a Hold. Our target price of S$0.49 is based on a not-so-heavy 35% discount to
FY16 RANV, as we are hopeful that a peaceful handover of power in Myanmar would
pave the way for Myanmars continuous economic growth and increase property
demand. Positive newsflow on Myanmars democratic reform process is a key near-term
catalyst.
[X]
Financial Summary
Analysts
Roy CHEN
T (65) 6210 8685
E roy.chen@cimb.com
William TNG, CFA
T (65) 6210 8676
Revenue (S$m)
Net Profit (S$m)
Core EPS (S$)
Core EPS Growth
FD Core P/E (x)
DPS (S$)
Dividend Yield
EV/EBITDA (x)
P/FCFE (x)
Net Gearing
P/BV (x)
ROE
Mar-14A
100.5
25.63
16.39
0.011
(17%)
41.2
0%
24.76
NA
1.5%
1.46
3.90%
Mar-15A
110.9
20.06
28.05
0.006
(47%)
77.1
0%
35.35
NA
2.5%
1.23
1.67%
Mar-16F
107.5
11.65
9.73
0.003
(45%)
139.2
0%
71.80
31.03
(0.3%)
1.26
0.89%
0%
0.56
Mar-17F
172.2
36.48
24.41
0.014
317%
33.4
0%
21.93
20.54
(5.3%)
1.21
3.70%
0%
0.88
Mar-18F
332.2
82.13
53.84
0.031
121%
15.2
0%
8.77
8.80
(16.0%)
1.12
7.70%
0%
0.69

Powered by
EFA
BY THE NUMBERS
Share price info

Share px perf. (%)
1M
3M
Relative
8.9
27.3
Absolute
4.4
27.0
Major shareholders
12M
-4.1
-16.9
% held
Serge Pun
37.1
Aberdeen
10.1
Capital Group Companies Inc
8.1
P/BV vs ROE
3.00
8.0%
2.50
6.7%
2.00
5.3%
1.50
4.0%
1.00
2.7%
0.50
1.3%
0.00
Jan-12
0.0%
Jan-13
Jan-14
Jan-15
Jan-16
Jan-17
Growth
160
140
120
100
80
60
40
20
0
350%
294%
238%
181%
125%
69%
13%
-44%
-100%
ROE (rhs)
Profit & Loss

(S$m)
Total Net Revenues
Gross Profit
Operating EBITDA
Operating EBIT
Exceptional Items
Pre-tax Profit
Taxation
Profit After Tax
Minority Interests
Preferred Dividends
Net Profit
Mar-14A
101.3
45.4
25.6
(1.7)
23.9
(0.5)
(0.1)
(0.3)
23.1
Mar-15A
113.2
47.9
20.1
(3.0)
17.0
(0.9)
(0.3)
9.8
25.6
Mar-16F
107.5
46.5
11.7
(5.2)
6.5
(4.8)
1.8
6.8
10.3
Mar-17F
172.2
75.3
36.5
(5.2)
31.3
(1.9)
1.8
0.0
31.2
Mar-18F
332.2
139.9
82.1
(5.2)
76.9
(1.9)
1.8
0.0
76.9
23.1
(1.6)
2.5
23.9
(7.5)
25.6
(3.9)
17.6
39.3
(11.3)
10.3
(0.2)
0.0
10.1
(0.4)
31.2
(4.3)
0.0
26.9
(2.5)
76.9
(11.2)
0.0
65.7
(11.9)
16.4
14.2
14.2
28.1
8.6
8.6
9.7
5.9
5.9
24.4
24.4
24.4
53.8
53.8
53.8
Cash Flow
(S$m)
EBITDA
Tax Paid
Capex
Shares Repurchased
Dividends Paid
Preferred Dividends
Mar-14A
25.6
Mar-15A
20.1
Mar-16F
11.7
Mar-17F
36.5
Mar-18F
82.1
(52.4)
(41.4)
9.6
9.1
23.3
(1.2)
5.1
8.0
1.2
1.2
0.6
(0.2)
29.7
(3.4)
0.0
0.0
0.0
(3.4)
0.0
0.0
0.6
(4.3)
43.1
(3.4)
0.0
0.0
0.0
(3.4)
0.0
0.0
0.6
(11.2)
96.1
(3.4)
0.0
0.0
0.0
(3.4)
0.0
0.0
0.0
0.0
0.0
(5.4)
(5.4)
20.9
26.3
26.3
(2.5)
(2.5)
37.2
39.7
39.7
(2.5)
(2.5)
90.2
92.7
92.7
0.2
(1.6)
(29.3)
(2.6)
0.0
(33.5)
(10.7)
(46.8)
(6.1)
0.0
(5.8)
(1.4)
(13.2)
(89.3)
(82.2)
(76.1)
0.2
(4.4)
(20.4)
(12.1)
0.2
(224.1)
(9.4)
(245.5)
11.3
258.9
0.0
(1.2)
269.0
3.2
(254.6)
(265.9)
314
BY THE NUMBERS
Balance Sheet
(S$m)
Total Debtors
Inventories
Fixed Assets
Total Investments
Intangible Assets
Short-term Debt
Total Creditors
Total Provisions
Total Liabilities
Minority Interests
Total Equity
Mar-14A
16.7
86.1
0.7
72.7
176.2
4.6
275.8
12.7
14.0
307.1
0.0
Mar-15A
20.0
89.2
14.1
219.2
342.5
16.6
417.2
32.2
25.6
491.6
10.0
Mar-16F
40.9
89.2
14.1
219.2
363.4
16.6
411.9
0.0
25.6
454.1
10.0
Mar-17F
78.1
89.2
14.1
219.2
400.6
16.6
401.5
0.0
25.6
443.8
10.0
Mar-18F
168.3
89.2
14.1
219.2
490.8
16.6
377.1
0.0
25.6
419.3
10.0
39.4
3.0
42.4
22.9
59.5
3.8
73.3
28.6
59.5
3.8
73.3
28.6
59.5
3.8
73.3
28.6
59.5
3.8
73.3
28.6
0.0
22.9
0.0
65.2
371.5
46.5
418.0
0.0
28.6
0.0
101.9
661.8
70.4
732.2
0.0
28.6
0.0
101.9
647.7
67.9
715.6
0.0
28.6
0.0
101.9
672.1
70.4
742.5
0.0
28.6
0.0
101.9
725.9
82.3
808.2
Mar-14A
66.2%
59%
25.5%
(0.005)
0.32
39.28
7.0%
NA
220.5
7.75
243.4
39.1%
5.55%
4.64%
Mar-15A
10.4%
(22%)
18.1%
(0.011)
0.38
13.67
15.3%
NA
288.4
41.30
276.1
11.5%
2.87%
3.43%
Mar-16F
(3.1%)
(42%)
10.8%
0.001
0.37
1.19
1.5%
NA
303.7
84.63
356.7
1.9%
0.92%
1.81%
Mar-17F
60.2%
213%
21.2%
0.023
0.39
12.51
13.8%
NA
189.1
53.17
224.1
10.4%
4.15%
3.46%
Mar-18F
93.0%
125%
24.7%
0.075
0.42
30.77
14.5%
NA
98.0
26.78
112.9
25.5%
9.53%
7.71%
Mar-14A
16.3%
27.0%
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
Mar-15A
-44.5%
31.4%
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
Mar-16F
13.4%
9.3%
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
Mar-17F
124.2%
19.5%
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
Mar-18F
171.7%
24.0%
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
Key Ratios
Revenue Growth
BVPS (S$)
Effective Tax Rate
Inventory Days
ROIC (%)
ROCE (%)
Key Drivers
315
Appendices
316
Figure 121: Singapore Valuation

Prices as at
BBG code
08/12/2015
Closing
Price
Company name
Aviation
SIA Engineering
SIE SP
3.57
Singapore Airlines
SIA SP
10.98
Tiger
Airways
TGR SP
0.41
Commodities
CWT Limited
CWT SP
1.92
First Resources Ltd
FR SP
1.99
Golden Agri-Resources
GGR SP
0.34
Indofood Agri Resources
IFAR SP
0.50
WIL SP
2.94
Conglomerates
BOCS SP
0.91
GL Limited
GLL SP
0.85
Keppel Corporation
KEP SP
6.42
Sembcorp Industries
SCI SP
3.03
ST Engineering
STE SP
2.90
YOMA SP Yoma Strategic Holdings
0.47
Consumer Discretionary
COURTS SP Courts Asia
0.38
DFI SP
Dairy Farm Int'l
5.82
EYSAN SP Eu Yan Sang Int'l Ltd
0.43
OSIM SP
OSIM International
1.06
SSG SP
Sheng Siong Group
0.85
STCO SP
Straco Corporation
0.86
Consumer Staples
DELM SP
Del Monte Pacific
0.29
FNN SP
Fraser & Neave
2.18
PETRA SP Petra Foods
2.23
SUPER SP Super Group
0.86
THBEV SP Thai Beverage
0.70
Financial Services
DBS SP
DBS Group
16.61
OCBC SP
OCBC
8.75
SGX SP
Singapore Exchange
7.54
UOB SP
19.46
Health Care
IHH SP
IHH Healthcare
2.11
QNM SP
Q&M Dental Group
0.72
RFMD SP
Raffles Medical Group
4.24
TKMED SP Talkmed Group Ltd
1.00
TIAN SP
1.12
Industrial Goods and Services
CEWL SP
0.67
RSTON SP Riverstone Holdings
2.20
Target % up /
price (down)
Recom.
Free
Float
(%)
Market
Cap
(US$m)
Month
end
Mar 15
Mar 15
Mar 15
2.94x
0.99x
4.61x
2.88x
0.95x
3.83x
2.81x
0.91x
3.15x
13.7%
3.7%
-10.8%
14.4%
4.7%
18.7%
15.0%
5.0%
19.5%
21.5x
27.1x
-42.0x
20.2x
20.7x
22.4x
19.0x
18.6x
17.7x
0.7%
30.8%
na.
-32%
-29%
-1%
-34%
-26%
-37%
4.1%
2.2%
0.0%
4.4%
2.3%
0.0%
Dec
Dec
Dec
Dec
Dec
14
14
14
14
14
1.41x
1.93x
0.35x
0.47x
0.82x
1.29x
1.76x
0.34x
0.45x
0.78x
1.18x
1.58x
0.34x
0.43x
0.74x
13.4%
11.7%
2.1%
2.2%
6.7%
13.3%
13.8%
1.8%
4.1%
7.4%
12.7%
15.4%
2.3%
4.6%
7.9%
10.8x
17.2x
15.8x
21.9x
12.9x
10.1x
13.4x
18.0x
11.2x
11.1x
9.7x
10.8x
14.6x
9.6x
9.9x
1.8%
6.1%
0.0%
-3.3%
6.2%
111%
20%
26%
29%
74%
122%
17%
29%
29%
79%
3.7%
1.7%
1.6%
0.5%
2.4%
2.1%
2.2%
1.7%
0.8%
2.8%
Price/ BVPS (X)

2015
2016
2017
ROAE (recurring) %
2015
2016
2017
3-Yr
P/E (Recurrent FD) (X)
forward
2015
2016
2017 EPS Cagr
Net Gearing
Net Div Yield %
FY15
FY16
2015
2016
4.02
12.83
0.41
13%
17%
0%
Hold
Add
Hold
19%
44%
44%
2,836
9,041
726
1.98
2.38
0.35
0.60
3.36
3%
20%
3%
20%
14%
Hold
Add
Reduce
Hold
Hold
40%
31%
50%
30%
30%
814
2,233
3,065
489
13,152
1.06
1.26
7.12
3.85
3.33
0.49
17%
49%
11%
27%
15%
4%
Add
Add
Hold
Add
Hold
Hold
45%
33%
60%
50%
38%
58%
332
818
8,230
3,829
6,369
577
Mar 15
Jun 15
Dec 14
Dec 14
Dec 14
Mar 15
1.43x
0.67x
1.04x
0.87x
4.10x
1.25x
1.43x
0.65x
0.97x
0.81x
3.91x
1.22x
1.34x
0.64x
0.92x
0.76x
3.72x
1.14x
11.1%
4.2%
11.5%
9.2%
23.2%
1.1%
10.4%
4.6%
12.3%
9.6%
23.6%
3.0%
10.7%
4.7%
11.2%
10.2%
24.4%
6.8%
12.1x
15.6x
9.4x
9.9x
17.9x
116.4x
13.8x
14.4x
8.2x
8.7x
16.9x
41.1x
13.0x
13.6x
8.4x
7.7x
15.6x
17.5x
-15.9%
8.2%
-9.5%
-4.4%
2.9%
53.6%
-20%
27%
52%
50%
-19%
3%
-32%
25%
47%
48%
-16%
0%
2.8%
2.6%
5.7%
5.2%
4.7%
0.0%
2.6%
2.6%
5.5%
4.1%
4.7%
0.0%
0.46
10.00
0.25
1.13
0.95
1.00
21%
72%
-42%
7%
12%
16%
Add
Add
Reduce
Reduce
Add
Add
18%
22%
58%
37%
28%
18%
141
7,870
136
556
905
518
Mar 15
Dec 14
Jun 15
Dec 14
Dec 14
Dec 14
0.66x
5.00x
1.19x
1.95x
5.28x
3.34x
0.62x
4.45x
1.16x
1.95x
5.15x
2.91x
0.59x
3.90x
1.12x
1.87x
5.02x
2.51x
6.5%
30.5%
-1.5%
11.6%
23.2%
24.4%
8.1%
30.2%
5.0%
14.6%
25.0%
23.0%
9.5%
30.0%
7.5%
15.7%
25.8%
23.4%
10.4x
17.2x
-80.1x
16.2x
23.0x
14.7x
7.9x
15.6x
23.5x
13.2x
20.9x
13.5x
6.4x
13.9x
15.3x
12.2x
19.7x
11.5x
17.7%
4.3%
159.7%
-12.3%
9.3%
18.6%
72%
53%
92%
-54%
-50%
-27%
61%
44%
50%
-55%
-52%
-35%
3.9%
4.0%
1.4%
5.7%
3.9%
2.9%
5.1%
4.0%
2.3%
6.1%
4.3%
3.2%
0.49
1.85
1.79
0.74
0.83
70%
-15%
-20%
-14%
19%
Add
Reduce
Reduce
Reduce
Add
26%
12%
37%
27%
33%
399
2,229
965
679
12,352
Apr 15
Sep 14
Dec 14
Dec 14
Dec 14
1.32x
1.73x
3.84x
1.91x
3.92x
1.11x
1.57x
3.64x
1.86x
3.65x
0.60x
1.42x
3.38x
1.81x
3.39x
4.8%
8.2%
8.3%
8.1%
26.3%
17.5%
8.4%
12.3%
10.0%
21.3%
13.1%
9.2%
16.0%
10.6%
21.3%
29.1x
22.1x
42.3x
23.7x
15.7x
6.9x
19.5x
30.3x
18.8x
17.7x
6.0x
16.1x
21.9x
17.4x
16.5x
na.
-0.8%
-4.1%
-7.1%
4.5%
505%
-12%
-30%
-19%
14%
417%
-23%
-31%
-20%
6%
0.0%
2.3%
1.9%
3.6%
3.7%
0.0%
2.6%
2.2%
4.0%
3.8%
19.58
10.88
7.98
20.00
18%
24%
6%
3%
Add
Add
Hold
Hold
70%
65%
63%
80%
29,419
25,487
5,719
22,064
Dec 14
Dec 14
Jun 15
Dec 14
1.03x
1.04x
7.98x
1.10x
0.98x
0.98x
7.43x
1.03x
0.93x
0.91x
6.94x
0.96x
11.4%
11.6%
36.9%
11.7%
10.2%
10.9%
36.9%
9.4%
10.7%
11.4%
36.1%
10.4%
9.3x
9.0x
22.3x
9.7x
9.8x
9.2x
20.9x
11.3x
8.8x
8.3x
19.9x
9.6x
3.8%
3.3%
6.8%
-0.4%
N.A>
N.A>
-86%
N.A>
N.A>
N.A>
-91%
N.A>
4.2%
4.1%
3.8%
3.7%
4.0%
4.6%
4.1%
3.2%
2.52
0.84
4.67
1.30
1.40
20%
17%
10%
30%
25%
Add
Add
Hold
Add
Add
18%
39%
48%
16%
100%
12,281
395
1,725
465
2,078
Dec
Dec
Dec
Dec
Dec
14
14
14
14
14
2.60x
5.58x
4.23x
11.23x
1.42x
2.47x
5.19x
3.92x
9.69x
1.36x
2.34x
4.77x
3.61x
8.42x
1.26x
5.0%
12.4%
11.8%
70.5%
9.8%
6.2%
14.5%
12.9%
61.6%
9.5%
6.7%
16.8%
13.2%
55.5%
9.7%
52.1x
46.2x
36.4x
17.2x
16.8x
40.9x
37.2x
31.5x
16.9x
14.7x
35.7x
29.5x
28.4x
16.2x
13.5x
27.3%
25.1%
8.9%
1.1%
5.4%
12%
10%
-9%
-101%
-7%
10%
24%
1%
-101%
2%
0.3%
1.2%
1.3%
4.0%
2.1%
0.5%
1.3%
1.3%
4.2%
2.1%
0.94
2.15
41%
-2%
Add
Hold
18%
33%
1,228
577
Dec 14
Dec 14
1.29x
5.24x
1.20x
4.25x
1.10x
3.68x
5.7%
24.3%
7.5%
23.6%
8.5%
21.9%
23.8x
24.1x
16.4x
19.9x
13.4x
18.0x
22.6%
33.4%
41%
-23%
65%
-26%
0.0%
2.0%
0.0%
2.2%
317
Figure 122: Singapore Valuation - cont'd

Prices as at
BBG code
08/12/2015
Closing
Price
Company name
Land Transport
CD SP
ComfortDelGro
MRT SP
SMRT Corporation
Media
SPH SP
Oil Equipment and Services
CSE SP
CSE Global
EZI SP
Ezion Holdings
EZRA SP
Ezra Holdings
MMT SP
Mermaid Maritime
MTQ SP
MTQ Corporation Ltd
NCL SP
Nam Cheong
PACRA SP Pacific Radiance
SMM SP
Sembcorp Marine
SWIB SP
Swiber Holdings
SWCH SP Swissco Holdings
VARD SP
Vard Holdings Ltd
YZJSGD SP Yangzijiang Shipbuilding
Property
CAPL SP
CapitaLand
CIT SP
City Developments
FCL SP
GLP SP
GUOL SP
Guocoland
HOBEE SP Ho Bee Land
OUE SP
Overseas Union Enterprise
PREH SP
UEM SP
United Engineers
UOL SP
UOL Group
WINGT SP Wing Tai Holdings
REITS
AREIT SP
Ascendas REIT
ART SP
CACHE SP Cache Logistics Trust
CREIT SP
CCT SP
CT SP
CDREIT SP CDL Hospitality Trust
CRT SP
FEHT SP
FIRT SP
First REIT
FCT SP
Frasers Centrepoint Trust
FCOT SP
Frasers Commercial Trust
KREIT SP
Keppel REIT
Target % up /
price (down)
Recom.
Free
Float
(%)
Market
Cap
(US$m)
Month
end
Price/ BVPS (X)

2015
2016
2017
ROAE (recurring) %
2015
2016
2017
3-Yr
forward
2015
2016
2017 EPS Cagr
Net Gearing
Net Div Yield %
FY15
FY16
2015
2016
3.05
1.50
3.17
1.37
4%
-9%
Hold
Reduce
59%
38%
4,642
1,618
Dec 14
Mar 15
2.80x
2.57x
2.65x
2.45x
2.51x
2.33x
13.2%
9.6%
14.2%
8.9%
14.4%
10.3%
21.7x
27.5x
19.1x
28.2x
17.9x
23.2x
8.1%
5.5%
-1%
77%
-43%
88%
2.9%
1.9%
3.3%
1.8%
3.85
3.85
0%
Reduce
90%
4,353
Aug 15
1.74x
1.79x
1.83x
8.4%
7.5%
7.6%
20.6x
23.5x
23.8x
-8.8%
12%
13%
5.1%
4.9%
0.47
0.59
0.10
0.16
0.50
0.13
0.31
1.82
0.21
0.22
0.27
1.10
0.55
0.95
0.12
0.23
0.59
0.11
0.41
1.88
0.50
0.52
0.23
1.21
18%
62%
18%
41%
18%
-15%
35%
3%
144%
137%
-13%
10%
Add
Add
Reduce
Add
Hold
Reduce
Add
Reduce
Reduce
Add
Reduce
Hold
64%
59%
64%
23%
41%
49%
24%
37%
70%
42%
44%
38%
170
653
216
160
55
187
156
2,691
67
105
226
2,970
Dec 14
Dec 14
Aug 14
Dec 14
Mar 15
Dec 14
Dec 14
Dec 14
Dec 13
Dec 14
Dec 14
Dec 14
1.05x
0.50x
0.18x
0.27x
0.62x
0.66x
0.36x
1.23x
0.17x
0.35x
0.55x
0.84x
0.99x
0.46x
0.18x
0.26x
0.63x
0.64x
0.35x
1.16x
0.18x
0.36x
0.56x
0.78x
0.93x
0.40x
na
0.24x
0.61x
0.62x
0.34x
1.10x
na
0.35x
0.58x
0.73x
13.6%
7.5%
1.2%
4.4%
-0.1%
5.5%
2.4%
7.8%
0.4%
15.6%
-0.3%
14.3%
11.9%
9.6%
1.3%
4.7%
1.8%
5.2%
3.4%
10.4%
-4.1%
7.4%
-2.1%
11.5%
12.5%
8.0x
12.3%
6.7x
na
15.7x
7.8%
6.2x
5.4% -611.3x
4.2%
11.9x
4.6%
15.1x
10.6%
16.0x
na
55.6x
10.0%
2.5x
-4.2% -200.8x
8.5%
6.2x
8.5x
5.0x
13.7x
5.6x
34.7x
12.4x
10.4x
11.5x
-5.5x
5.0x
-26.5x
7.0x
7.7x
3.5x
na
3.2x
11.5x
14.9x
7.5x
10.7x
na
3.6x
-13.5x
8.9x
-3.9%
-0.2%
na.
7.3%
-17.4%
-43.8%
-33.3%
-14.0%
na.
-11.7%
na.
-14.9%
-8%
104%
110%
12%
12%
58%
82%
68%
146%
71%
353%
15%
-25%
88%
115%
68%
9%
63%
92%
68%
199%
78%
386%
4%
5.9%
0.2%
0.0%
4.0%
5.0%
1.5%
1.7%
3.0%
0.0%
9.5%
0.0%
4.9%
4.8%
0.2%
0.0%
4.4%
4.0%
1.5%
2.6%
4.2%
0.0%
9.5%
0.0%
4.3%
3.26
7.15
1.71
2.03
1.85
2.00
1.77
0.98
2.03
6.15
1.73
4.06
10.47
2.04
3.18
2.73
2.68
3.32
1.39
3.03
8.24
2.05
25%
46%
19%
57%
48%
34%
88%
42%
49%
34%
19%
Add
Add
Add
Add
Add
Add
Add
Add
Add
Add
Hold
54%
43%
12%
57%
32%
27%
33%
21%
70%
52%
50%
9,802
4,602
3,504
6,810
1,545
941
1,128
1,148
916
3,466
953
Dec 14
Dec 14
Sep 15
Mar 15
Jun 15
Dec 14
Dec 12
Jun 14
Dec 14
Dec 14
Jun 15
0.80x
0.77x
0.62x
0.76x
0.64x
0.51x
0.38x
0.58x
0.70x
0.61x
0.42x
0.77x
0.73x
0.59x
0.75x
0.58x
0.50x
0.38x
0.57x
0.68x
0.58x
0.41x
0.69x
0.68x
0.54x
0.73x
0.56x
0.48x
na
0.55x
0.67x
0.56x
0.41x
4.2%
6.9%
7.9%
2.0%
3.8%
2.5%
2.8%
0.1%
3.5%
5.5%
1.9%
4.2%
7.2%
7.9%
3.2%
3.3%
3.0%
1.8%
2.0%
5.1%
5.6%
2.8%
4.6%
11.9%
9.1%
3.9%
5.9%
4.2%
na
3.0%
3.6%
6.0%
3.1%
22.7x
11.4x
8.2x
38.4x
17.9x
20.2x
13.6x
726.6x
20.1x
11.2x
22.2x
22.1x
10.4x
7.7x
23.3x
18.5x
16.9x
20.5x
28.4x
13.6x
10.5x
14.7x
18.7x
5.9x
6.2x
19.1x
9.7x
11.7x
na
18.8x
19.0x
9.6x
13.3x
75.3%
19.8%
15.2%
39.6%
17.9%
43.1%
na.
na.
na.
-6.7%
9.2%
38%
7%
84%
11%
140%
53%
28%
46%
58%
26%
9%
25%
11%
81%
29%
58%
54%
20%
67%
55%
17%
9%
4.0%
2.6%
2.9%
2.9%
3.7%
3.1%
3.7%
0.3%
3.4%
2.7%
2.4%
2.6%
2.9%
2.9%
2.9%
3.3%
3.1%
2.5%
0.9%
3.4%
2.9%
1.8%
2.38
1.18
0.91
0.58
1.33
1.91
1.32
0.79
0.65
1.19
1.87
1.30
0.96
2.57
1.30
1.08
0.73
1.65
2.28
1.59
1.00
0.70
1.48
2.22
1.62
1.15
8%
10%
19%
26%
24%
19%
20%
27%
8%
25%
19%
25%
20%
Add
Hold
Add
Hold
Add
Add
Add
Add
Hold
Add
Add
Add
Add
83%
61%
88%
67%
68%
70%
67%
90%
61%
66%
49%
72%
55%
4,059
1,288
574
533
2,780
4,787
922
356
817
632
1,214
724
2,174
Mar 15
Dec 14
Dec 14
Dec 14
Dec 14
Dec 14
Dec 14
Jun 15
Dec 14
Dec 14
Sep 15
Sep 15
Dec 14
1.07x
0.73x
0.94x
0.86x
0.76x
1.05x
0.80x
0.83x
0.67x
1.21x
0.98x
0.83x
0.69x
1.05x
0.74x
0.94x
0.87x
0.76x
0.95x
0.80x
0.88x
0.67x
1.22x
1.00x
0.80x
0.69x
1.06x
0.76x
0.95x
0.89x
0.76x
0.95x
0.79x
0.93x
0.68x
1.24x
1.00x
0.81x
0.70x
7.0%
4.2%
6.5%
5.9%
5.1%
7.3%
6.2%
4.9%
4.4%
7.9%
6.0%
6.0%
4.1%
7.4%
4.3%
7.6%
6.2%
5.9%
6.1%
6.5%
7.0%
4.4%
8.2%
6.5%
5.6%
4.5%
7.6%
4.1%
8.2%
6.4%
6.2%
6.1%
6.6%
7.3%
4.5%
8.5%
6.7%
5.7%
4.9%
15.8x
18.0x
14.4x
14.3x
14.9x
14.4x
12.9x
17.2x
15.3x
15.0x
16.5x
13.7x
16.7x
14.4x
17.0x
12.4x
13.9x
12.9x
16.4x
12.2x
12.1x
15.1x
14.8x
15.2x
14.5x
15.3x
13.9x
18.5x
11.5x
13.7x
12.4x
15.6x
12.1x
12.4x
15.1x
14.6x
15.0x
14.2x
14.1x
8.5%
3.9%
2.7%
1.4%
-5.1%
-2.2%
0.6%
34.0%
0.2%
3.7%
5.4%
0.8%
10.2%
46%
64%
53%
59%
22%
33%
51%
95%
40%
51%
40%
55%
55%
55%
71%
53%
61%
22%
27%
50%
91%
42%
52%
43%
45%
54%
6.6%
7.1%
7.5%
8.8%
6.7%
5.9%
7.9%
9.4%
7.5%
7.2%
6.3%
7.6%
7.2%
7.0%
7.2%
9.1%
9.0%
6.9%
6.1%
8.4%
9.3%
7.6%
7.3%
6.5%
8.0%
7.2%
318
Figure 123: Singapore Valuation - cont'd

Prices as at
BBG code
08/12/2015
Closing
Price
Company name
REITS - cont'd
LMRT SP
Lippo Malls Indonesia Retail Trust0.31
0.40
MCT SP
1.32
1.44
MAGIC SP Mapletree Greater China Commercial
0.93Trust 1.20
MINT SP
1.52
1.66
MLT SP
1.01
1.17
OUECT SP OUE Commercial REIT
0.69
0.81
OUEHT SP OUE Hospitality Trust
0.79
0.98
PREIT SP
Parkway Life REIT
2.26
2.56
RHT SP
0.99
1.06
SPHREIT SP SPH REIT
0.94
1.07
SGREIT SP Starhill Global REIT
0.77
0.87
SUN SP
Suntec REIT
1.57
1.73
Services
KPTT SP
Keppel T&T
1.43
1.91
OEL SP
Overseas Education Ltd
0.52
0.74
SPOST SP Singapore Post Ltd
1.79
2.04
Shipping
NOL SP
1.22
1.30
Technology
IP SP
Innovalues Ltd
0.75
0.93
MTEC SP
Memtech International
0.13
0.20
SARINE SP Sarine Technologies Ltd
1.34
1.77
SILV SP
Silverlake Axis Ltd
0.70
0.65
UMSH SP
UMS Holdings Ltd
0.51
0.66
VMS SP
Venture Corporation
8.44
10.11
Telecommunications
APTT SP
Asian Pay Television Trust
0.71
1.28
M1 SP
M1 Limited
2.79
3.10
ST SP
SingTel
3.85
4.50
STH SP
StarHub
3.58
3.80
Transport Infrastructure
CMH SP
China Merchants Holdings Pacific0.91
1.02
SATS SP
SATS Ltd
3.80
3.98
Travel and Leisure
GENHK SP Genting Hong Kong
0.32
0.44
GENS SP
Genting Singapore
0.78
0.81
Utilities
CEL SP
CITIC Envirotech
1.45
1.80
FSSTI
Recom.
Free
Float
(%)
Market
Cap
(US$m)
Month
end
29%
10%
30%
9%
16%
18%
24%
13%
8%
14%
12%
10%
Add
Hold
Add
Hold
Add
Add
Add
Add
Hold
Hold
Hold
Hold
76%
63%
28%
70%
59%
44%
58%
57%
72%
25%
54%
93%
614
1,974
1,800
1,921
1,767
628
747
968
556
1,686
1,189
2,802
Dec 14
Mar 15
Mar 15
Mar 15
Mar 15
Dec 14
Dec 14
Dec 14
Mar 15
Aug 15
Dec 15
Dec 14
0.74x
1.06x
0.71x
1.15x
0.98x
0.53x
0.88x
1.33x
1.03x
1.00x
0.85x
0.74x
0.74x
1.07x
0.67x
1.15x
0.98x
0.53x
0.89x
1.33x
1.05x
1.00x
0.85x
0.74x
0.74x
1.07x
0.64x
1.15x
0.98x
0.54x
0.89x
1.33x
1.06x
1.00x
0.85x
0.75x
6.8%
6.1%
4.1%
7.8%
7.4%
2.7%
6.1%
7.1%
5.9%
5.0%
5.7%
3.4%
7.0%
6.3%
4.0%
8.0%
7.6%
3.0%
6.8%
7.3%
7.4%
5.1%
5.8%
3.7%
7.1%
6.4%
3.8%
9.5%
7.7%
3.2%
7.5%
7.4%
8.7%
5.3%
6.1%
4.1%
10.7x
17.4x
18.1x
14.9x
13.3x
22.7x
14.3x
18.7x
18x
20x
14.9x
21.5x
10.5x
17.1x
17.2x
14.4x
12.9x
17.5x
13.0x
18.3x
14.1x
19.6x
14.5x
19.8x
10.5x
16.9x
17.1x
12.1x
12.7x
16.8x
12.0x
17.9x
12.1x
18.8x
14.0x
18.4x
8.6%
2.4%
6.3%
7.2%
2.3%
na.
3.2%
5.5%
15.5%
0.8%
2.5%
-3.2%
35%
57%
57%
43%
53%
68%
69%
53%
16%
32%
54%
53%
32%
57%
61%
52%
68%
65%
71%
53%
22%
32%
54%
54%
10.1%
6.1%
7.7%
6.9%
7.6%
6.7%
8.5%
5.9%
7.8%
5.9%
5.5%
6.4%
10.4%
6.2%
8.3%
7.1%
7.8%
7.6%
9.1%
5.4%
8.7%
6.0%
6.8%
6.3%
33%
43%
14%
Add
Add
Add
19%
36%
74%
563
151
2,728
Dec 14
Dec 14
Mar 15
1.29x
1.30x
2.62x
1.33x
1.26x
2.50x
1.36x
1.21x
2.46x
9.6%
8.8%
10.8%
12.3%
6.3%
10.3%
14.2%
8.4%
10.9%
12.6x
15.2x
27.1x
10.6x
20.2x
25.7x
9.5x
14.7x
23.2x
5.2%
-12.9%
12.0%
52%
43%
-25%
66%
33%
-13%
2.4%
3.3%
3.8%
2.4%
2.5%
3.9%
7%
Hold
30%
2,246
Dec 14
0.92x
0.97x
1.05x
-9.3%
-5.0%
-7.9%
-11.5x
-18.7x
-12.8x
-10.7%
116%
115%
0.0%
0.0%
24%
54%
33%
-7%
30%
20%
Add
Add
Hold
Hold
Add
Add
55%
50%
58%
33%
76%
92%
173
65
330
1,321
155
1,653
Dec 14
Dec 14
Dec 14
Jun 15
Dec 14
Dec 14
2.80x
0.56x
4.64x
8.87x
1.11x
1.24x
2.39x
0.53x
3.99x
8.66x
1.06x
1.22x
2.05x
0.51x
3.21x
8.27x
1.01x
1.18x
29.0%
5.9%
2.5%
43.9%
14.4%
8.1%
27.1%
7.2%
33.1%
41.0%
14.7%
8.9%
26.5%
7.8%
36.8%
46.3%
15.5%
10.3%
10.8x
9.6x
173.5x
20.4x
7.8x
15.3x
9.6x
7.6x
13.0x
21.4x
7.4x
13.8x
8.4x
6.7x
9.7x
18.3x
6.7x
11.7x
22.3%
15.2%
8.5%
3.5%
9.6%
13.2%
-36%
-32%
-71%
-51%
-25%
-12%
-45%
-31%
-69%
-49%
-28%
-12%
4.3%
5.2%
3.2%
4.6%
9.8%
5.9%
5.1%
6.6%
4.2%
4.2%
9.8%
5.9%
80%
11%
17%
6%
Add
Hold
Add
Hold
97%
39%
44%
33%
722
1,850
43,448
4,379
Dec 14
Dec 14
Mar 15
Dec 14
0.81x
6.34x
2.41x
32.6x
0.83x
6.12x
2.31x
28.2x
0.86x
5.91x
2.21x
23.2x
5.4%
46.0%
14.9%
228%
7.1%
46.9%
15.0%
183%
8.2%
44.5%
15.2%
161%
14.8x
14.0x
16.4x
16.1x
11.5x
13.3x
15.7x
16.5x
10.3x
13.5x
14.9x
15.8x
-5.7%
2.8%
3.3%
1.8%
88%
62%
34%
212%
93%
63%
37%
183%
11.6%
7.1%
4.5%
5.6%
12.1%
7.5%
4.8%
5.6%
13%
5%
Add
Hold
23%
56%
1,150
2,989
Dec 14
Mar 15
0.85x
2.81x
0.86x
2.71x
0.85x
2.61x
7.5%
14.9%
5.9%
15.3%
6.6%
15.5%
11.5x
19.8x
14.5x
18.5x
13.0x
17.7x
-10.9%
8.3%
68%
-20%
62%
-19%
7.7%
4.1%
6.6%
4.4%
38%
4%
Add
Hold
20%
40%
2,714
6,583
Dec 13
Dec 14
0.77x
0.97x
1.18x
0.95x
na
0.92x
7.9%
1.8%
10.4%
3.5%
na
4.2%
10.6x
54.3x
9.6x
27.4x
na
22.3x
na.
-6.2%
-15%
-41%
14%
-45%
0.0%
1.3%
0.0%
1.3%
24%
Add
8%
1,157
Dec 14
1.92x
1.80x
1.67x
5.7%
6.6%
8.1%
37.0x
28.9x
22.0x
19.1%
36%
54%
0.4%
0.2%
Target % up /
price (down)
Price/ BVPS (X)

2015
2016
2017
ROAE (recurring) %
2015
2016
2017
3-Yr
forward
2015
2016
2017 EPS Cagr
Net Gearing
Net Div Yield %
FY15
FY16
2015
2016
2,876
Note: Calendarized data unless otherwise stated

319
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CBG, CENTEL, CK, CPALL, CPF, CPN, DELTA, DEMCO, DTAC, EARTH, EGCO, ERW, GFPT, GLOBAL, GLOW, GUNKUL, HANA, HMPRO,
ICHI, INTUCH, IRPC, ITD, IVL, JAS, KBANK, KCE, KKP, KTB, KTC, LH, LHBANK, LOXLEY, LPN, M, MAJOR, MC, MINT, MONO, NOK, PACE,
PS, PSL, PTT, PTTEP, PTTGC, QH, RATCH, RCL, ROBINS, RS, S, SAMART, SAPPE, SAWAD, SCB, SCC, SF, SGP, SIRI, SOLAR, SPALI,
SPCG, STEC, STPI, SVI, TCAP, THAI, THCOM, TICON, TISCO, TMB, TOP, TPIPL, TRC, TRUE, TTA, TTCL, TTW, TUF, U, UNIQ, UV, VGI,
WHA
Corporate Governance Report:
The disclosure of the survey result of the Thai Institute of Directors Association (IOD) regarding corporate governance is made pursuant to the
policy of the Office of the Securities and Exchange Commission. The survey of the IOD is based on the information of a company listed on the
Stock Exchange of Thailand and the Market for Alternative Investment disclosed to the public and able to be accessed by a general public
investor. The result, therefore, is from the perspective of a third party. It is not an evaluation of operation and is not based on inside information.
The survey result is as of the date appearing in the Corporate Governance Report of Thai Listed Companies. As a result, the survey result may
be changed after that date. CIMBS does not confirm nor certify the accuracy of such survey result.
Score Range:
Description:
90 - 100
Excellent
80 - 89
Very Good
70 - 79
Good
Below 70 or
N/A
No Survey Result
United Arab Emirates: The distributor of this report has not been approved or licensed by the UAE Central Bank or any other relevant licensing
authorities or governmental agencies in the United Arab Emirates. This report is strictly private and confidential and has not been reviewed by,
deposited or registered with UAE Central Bank or any other licensing authority or governmental agencies in the United Arab Emirates. This report
is being issued outside the United Arab Emirates to a limited number of institutional investors and must not be provided to any person other than
the original recipient and may not be reproduced or used for any other purpose. Further, the information contained in this report is not intended to
lead to the sale of investments under any subscription agreement or the conclusion of any other contract of whatsoever nature within the territory
of the United Arab Emirates.
United Kingdom: In the United Kingdom and European Economic Area, this report is being disseminated by CIMB Securities (UK) Limited
(CIMB UK). CIMB UK is authorized and regulated by the Financial Conduct Authority and its registered office is at 27 Knightsbridge, London,
323
SW1X7YB. This report is for distribution only to, and is solely directed at, selected persons on the basis that those persons: (a) are eligible
counterparties and professional clients of CIMB UK; (b) have professional experience in matters relating to investments falling within Article 19(5)
of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (as amended, the Order), (c) fall within Article 49(2)(a) to (d)
(high net worth companies, unincorporated associations etc) of the Order; (d) are outside the United Kingdom, or (e) are persons to whom an
invitation or inducement to engage in investment activity (within the meaning of section 21 of the Financial Services and Markets Act 2000) in
connection with any investments to which this report relates may otherwise lawfully be communicated or caused to be communicated (all such
persons together being referred to as relevant persons). This report is directed only at relevant persons and must not be acted on or relied on
by persons who are not relevant persons. Any investment or investment activity to which this report relates is available only to relevant persons
and will be engaged in only with relevant persons.
Where this report is labelled as non-independent, it does not provide an impartial or objective assessment of the subject matter and does not
constitute independent investment research under the applicable rules of the Financial Conduct Authority in the UK. Consequently, any such
non-independent report will not have been prepared in accordance with legal requirements designed to promote the independence of investment
research and will not subject to any prohibition on dealing ahead of the dissemination of investment research. Any such non-independent report
must be considered as a marketing communication.
United States: This research report is distributed in the United States of America by CIMB Securities (USA) Inc, a U.S. registered broker-dealer
and a related company of CIMB Research Pte Ltd, CIMB Investment Bank Berhad, PT CIMB Securities Indonesia, CIMB Securities (Thailand)
Co. Ltd, CIMB Securities Limited, CIMB Securities (India) Private Limited, and is distributed solely to persons who qualify as U.S. Institutional
Investors as defined in Rule 15a-6 under the Securities and Exchange Act of 1934. This communication is only for Institutional Investors whose
ordinary business activities involve investing in shares, bonds, and associated securities and/or derivative securities and who have professional
experience in such investments. Any person who is not a U.S. Institutional Investor or Major Institutional Investor must not rely on this
communication. The delivery of this research report to any person in the United States of America is not a recommendation to effect any
transactions in the securities discussed herein, or an endorsement of any opinion expressed herein. CIMB Securities (USA) Inc, is a FINRA/SIPC
member and takes responsibility for the content of this report. For further information or to place an order in any of the above-mentioned
securities please contact a registered representative of CIMB Securities (USA) Inc.
CIMB Securities (USA) Inc does not make a market on the securities mentioned in the report.
Other jurisdictions: In any other jurisdictions, except if otherwise restricted by laws or regulations, this report is only for distribution to
professional, institutional or sophisticated investors as defined in the laws and regulations of such jurisdictions.
Distribution of stock ratings and investment banking clients for quarter ended on 30 September 2015
1528 companies under coverage for quarter ended on 30 September 2015
Rating Distribution (%)
Investment Banking clients (%)
Add
58.1%
6.0%
Hold
30.4%
3.5%
Reduce
10.9%
1.0%
Corporate Governance Report of Thai Listed Companies (CGR). CG Rating by the Thai Institute of Directors Association (Thai IOD) in
2015.
AAV Very Good, ADVANC Excellent, AEONTS Good, AMATA Very Good, ANAN Very Good, AOT Very Good, AP - Good, ASK Very
Good, ASP Very Good, BANPU Very Good , BAY Very Good , BBL Very Good, BCH not available, BCP - Excellent, BDMS Very
Good, BEAUTY Good, BEC - Good, BECL Very Good, BH - Good, BIGC - Excellent, BJC Good, BLA Very Good, BMCL - Very Good,
BTS - Excellent, CBG Good, CCET not available, CENTEL Very Good, CHG Good, CK Excellent, COL Very Good, CPALL Good,
CPF Very Good, CPN - Excellent, DELTA - Very Good, DEMCO Very Good, DTAC Excellent, EA not available, ECL Good, EGCO Excellent, EPG not available, GFPT - Very Good, GLOBAL Very Good, GLOW - Good, GRAMMY - Excellent, GUNKUL Very Good, HANA Excellent, HEMRAJ Very Good, HMPRO - Excellent, ICHI Very Good, INTUCH - Excellent, ITD Good, IVL - Excellent, JAS not available,
JASIF not available, JUBILE Good, KAMART not available, KBANK - Excellent, KCE - Excellent, KGI Good, KKP Excellent, KSL Very
Good, KTB - Excellent, KTC Very Good, LH - Very Good, LPN Excellent, M - Good, MAJOR - Good, MAKRO Good, MBKET Good, MC
Very Good, MCOT Excellent, MEGA Very Good, MINT - Excellent, MTLS Good, NYT Good, OISHI Very Good, PLANB Good, PS
Excellent, PSL - Excellent, PTT - Excellent, PTTEP - Excellent, PTTGC - Excellent, QH Very Good, RATCH Excellent, ROBINS Excellent,
RS Very Good, SAMART - Excellent, SAPPE - Good, SAT Excellent, SAWAD Good, SC Excellent, SCB - Excellent, SCBLIF not
available, SCC Excellent, SCCC - Good, SIM - Excellent, SIRI - Good, SPALI - Excellent, STA Very Good, STEC Very Good, SVI Very
Good, TASCO Very Good, TCAP Very Good, THAI Very Good, THANI Very Good, THCOM Excellent, THRE Very Good, THREL
Very Good, TICON Very Good, TISCO - Excellent, TK Very Good, TMB - Excellent, TPCH Good, TOP - Excellent, TRUE Very Good, TTW
Very Good, TU Very Good, VGI Excellent, WORK not available.
324
CIMB Recommendation Framework

Stock Ratings
Definition:
Add
The stocks total return is expected to exceed 10% over the next 12 months.
Hold
The stocks total return is expected to be between 0% and positive 10% over the next 12 months.
Reduce
The stocks total return is expected to fall below 0% or more over the next 12 months.
The total expected return of a stock is defined as the sum of the: (i) percentage difference between the target price and the current price and (ii) the forward
net dividend yields of the stock. Stock price targets have an investment horizon of 12 months.
Sector Ratings
Overweight
Neutral
Underweight
Definition:
An Overweight rating means stocks in the sector have, on a market cap-weighted basis, a positive absolute recommendation.
A Neutral rating means stocks in the sector have, on a market cap-weighted basis, a neutral absolute recommendation.
An Underweight rating means stocks in the sector have, on a market cap-weighted basis, a negative absolute recommendation.
Country Ratings
Overweight
Neutral
Underweight
Definition:
An Overweight rating means investors should be positioned with an above-market weight in this country relative to benchmark.
A Neutral rating means investors should be positioned with a neutral weight in this country relative to benchmark.
An Underweight rating means investors should be positioned with a below-market weight in this country relative to benchmark.
*Prior to December 2013 CIMB recommendation framework for stocks listed on the Singapore Stock Exchange, Bursa Malaysia, Stock Exchange of Thailand,
Jakarta Stock Exchange, Australian Securities Exchange, Taiwan Stock Exchange and National Stock Exchange of India/Bombay Stock Exchange were
based on a stocks total return relative to the relevant benchmarks total return. Outperform: expected to exceed by 5% or more over the next 12 months.
Neutral: expected to be within +/-5% over the next 12 months. Underperform: expected to be below by 5% or more over the next 12 months. Trading Buy:
expected to exceed by 3% or more over the next 3 months. Trading Sell: expected to be below by 3% or more over the next 3 months. For stocks listed on
Korea Exchange, Hong Kong Stock Exchange and China listings on the Singapore Stock Exchange. Outperform: Expected positive total returns of 10% or
more over the next 12 months. Neutral: Expected total returns of between -10% and +10% over the next 12 months. Underperform: Expected negative total
returns of 10% or more over the next 12 months. Trading Buy: Expected positive total returns of 10% or more over the next 3 months. Trading Sell: Expected
negative total returns of 10% or more over the next 3 months.
325
Analysts Coverage SINGAPORE

Kenneth NG, CFA (Head of Equity Research)
+65 6210-8610 | kenneth.ng@cimb.com
Strategy
Banking & Finance
DBS Group
OCBC
Singapore Exchange
Consumer Discretionary (Lifestyles)
OSIM International
Consumer Discretionary (Retail)
Courts Asia
Sheng Siong Group
Consumer Staples (Brewers)
Fraser & Neave
Thai Beverage
Consumer Staples (Food & Beverage)
Petra Foods
Super Group
Mun Yee LOCK
+65 6210-8606 | munyee.lock@cimb.com
Property
CapitaLand Ltd
City Developments Ltd
Guocoland
Ho Bee Investment
Overseas Union Enterprise
United Engineers Ltd
UOL Group
Wing Tai Holdings Ltd
Property (REIT)
Ascendas REIT
Cache Logistics Trust
CDL Hospitality Trust
First REIT
Fraser Centrepoint Trust
Fraser Commercial Trust
Keppel REIT
Lippo Malls Indonesia Retail Trust
Mapletree Greater China Commercial Trust
OUE Commercial REIT
OUE Hospitality Trust
Parkway Life REIT
SPH REIT
Starhill Global REIT
Suntec REIT
Siew Khee LIM

+65 6210-8664 | siewkhee.lim@cimb.com
Conglomerates
Keppel Corporation
SembCorp Industries
ST Engineering Ltd
Offshore & Marine
Cosco Corporation
Ezra Holdings Ltd
SembCorp Marine Ltd
Swiber Holdings
Swissco Holdings
Yangzijiang Shipbuilding
Aviation (Airport Services)
SIA Engineering
Transport Infrastructure (Airports)
SATS Ltd
Zhi Bin YEO
+65 6210-8669 | zhibin.yeo@cimb.com
Consumer Discretionary (Retail)
Dairy Farm Int'l
Offshore & Marine
Ezion Holdings Ltd
Mermaid Maritime PCL
MTQ Corporation Ltd
Nam Cheong
Pacific Radiance
Vard Holdings Ltd
Oil Equipment and Services
CSE Global
William TNG, CFA
+65 6210-8676 | william.tng@cimb.com
Eu Yan Sang Int'l Ltd
Consumer Staples (Food & Beverage)
Del Monte Pacific
Healthcare
Talkmed Group Ltd
Services (Education)
Overseas Education Ltd
Technology
Sarine Tech
Silverlake Axis Ltd
UMS Holdings Ltd
Venture Corporation Ltd
Roy CHEN
+65 6210-8685 | roy.chen@cimb.com
Conglomerates
Guocoleisure
Yoma Strategic Holdings
Healthcare
Industrial Goods and Services
Riverstone Holdings
Land Transport
ComfortDelGro Corporation
SMRT Corporation Ltd
Transport Infrastructure
China Merchants Holdings Pacific
Utilities (Water Treatment & Services)
CITIC Envirotech Ltd
326
Jessalynn CHEN
+65 6210-8672 | jessalynn.chen@cimb.com
Commodities
CWT Ltd
Straco Corporation
Gaming
Genting Hong Kong
Genting Singapore
Media
Services (Logistics)
Keppel Tel & Trans
Singapore Post Ltd
Jonathan SEOW
+65 6210-8671 | jonathanwp.seow@cimb.com
Healthcare
IHH Healthcare
Q&M Dental Group
Raffles Medical
+60 (3) 2261-9081 | choongchen.foong@cimb.com
Telecommunications
M1 Ltd
Singapore Telecoms Ltd
Starhub Ltd
Raymond YAP, CFA
+60 (3) 2261-9072 | raymond.yap@cimb.com
Aviation (Airlines)
Singapore Airlines
Tiger Airways Holdings Ltd
Shipping (Container Shipping)
Ivy NG, CFA
+60 (3) 2261-9073 | ivy.ng@cimb.com
Plantations
First Resources Ltd
Golden Agri
Indofood Agri
Bertram LAI
+852 2532-1111 | bertram.lai@cimb.com
Telecommunications
Asian Pay Television Trust
Asia
China
Unit 802 AZIA Center
1233 Lujiazui Ring Road
Pudong New District
Shanghai 200120
T: +86 (21) 6194-0212 / +86 (21) 6194-0218
Hong Kong
Units 7706-08, Level 77
International Commerce Centre
1 Austin Road West Kowloon
T: +852 2868-0380
F: +852 2537-1928
India
CIMB Securities (India) Private Limited
1203, The Capital
Bandra Kurla Complex
Mumbai 400 051, India
T: +91 (22) 6602-5252
Indonesia
The Indonesia Stock Exchange Building
Tower II, 20th Floor
Jl. Jend. Sudirman, Kav. 52-53
Jakarta 12190
T: +62 (21) 515-1330
F: +62 (21) 515-1335
Malaysia
Level 17, Menara CIMB
Jalan Stesen Sentral 2
Kuala Lumpur Sentral
50470 Kuala Lumpur.
T: +60 (3) 2261 8888
F: +60 (3) 2261 8899
Singapore
50 Raffles Place
#19-00
Singapore Land Tower (S048623)
T: +65 6225-1228
F: +65 6224-6906
South Korea
CIMB Securities Limited, Korea Branch
15F, S-Tower, 116 Shinmun-ro 1-ga
Jongro-gu, Seoul 110-700
T: +82 (2) 6730-6000
F: +82 (2) 6730-6183
Sri Lanka
Level 33, West Tower
World Trade Center
Echelon Square
Colombo 01
Taiwan
CIMB Securities Limited, Taiwan Branch
76F, No. 7, Xin-Yi Road Sec. 5
Taipei City
T: +886 (2) 8729-8388
F: +886 (2) 8729-8391
Thailand
132 Sindhorn Tower 3, 12th Floor
Wireless Road, Lumpini, Pathumwan
Bangkok 10330
T: +66 (2) 841-9000
F: +66 (2) 657-9240
Vietnam
CIMB Securities International Ltd.
90 Pasteur Street
District 1, HCMC
Vietnam
T: +84 839146925
F: +84 839 146924
Philippines
SB Equities, Inc.
(a strategic partner with CIMB Securities)
18F Security Bank Centre
6776 Ayala Ave.
Makati 0719
T: +63 (2) 891-1243 / +63 (2) 891-1258
F: +63 (2) 813-3349
Sri Lanka
John Keells Stock Brokers (Pvt) Ltd
(a strategic partner with CIMB Securities)
130 Glennie Street
Colombo 00200
T: +94 (0) 11 230 6271
F: +94 (0) 11 234 2068
Europe
Americas
United Kingdom
(2719607)
27 Knightsbridge
London, SW1X 7YB
T: +44 (20) 7201-2199
F: +44 (20) 7201-2191
USA
(52-1971703)
540 Madison Avenue
11th Floor, New York, N.Y. 10022
T: +1 (212) 616 8600
F: +1 (212) 616 8639
327
328

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December 9, 2015

Somewhere over the rainbow

Immediate-term outlook is not great but is reflected in prices.

Navigating SingaporeStrategyEquity researchDecember 9, 2015

Telcos: Evolution as 4 telco and pay-TV cord-cutting threaten .................................................. 30

MCI (P) 072/08/2015

Navigating SingaporeStrategyEquity researchDecember 9, 2015

Challenging near-term outlook is priced in

Focus on the future; AEC provides opportunity to leap out

Attracting US MNCs as TPP comes into force

Sector picks and least preferred

CAPL, CIT, GL, HOBEE

MAGIC, CMT, FCT, CCT

KREIT, CREIT, SUN

SMRT, NOL, Tiger

Vard, NCL, SMM

Wilmar, IFAR, GGR

IHH, Tianjin Zhongxin

GENS, Raffles Med

DFI, THBEV, Courts

Super, Petra Foods

Venture, Innovalues, CEWL

Longer-term winners are office space, banks and logistics

Figure 1: Singapore top picks

Kenneth NG, CFA

Navigating SingaporeStrategyEquity researchDecember 9, 2015

Countries entering its demographic sweet spot

Singapore earnings have not been as badly hit by its own

AEC intertwines with OBOR and TPP

Ahead, ASEAN will be a huge magnet for inbound FDIs

Implications for Singapore corporates

How to fit that into todays investment view

CIMBs sector calls and stock picks

Our Overweights remain banks, property and REITs.

CAPL, CIT, GL, HOBEE

MAGIC, CMT, FCT, CCT

KREIT, CREIT, SUN

SMRT, NOL, Tiger

Vard, NCL, SMM

Wilmar, IFAR, GGR

IHH, Tianjin Zhongxin

GENS, Raffles Med

DFI, THBEV, Courts

Super, Petra Foods

Venture, Innovalues, CEWL

SOURCE: CIMB, COMPANY REPORTS

Navigating SingaporeStrategyEquity researchDecember 9, 2015

Somewhere over the rainbow

Figure 3: Ratio of earnings surprises vs. disappointments

Positive-negative surprise ratio

SOURCE: CIMB RESEARCH, COMPANY

SOURCE: CIMB RESEARCH, COMPANY

Figure 4: FSSTI valuations

SOURCE: CIMB Research

Navigating SingaporeStrategyEquity researchDecember 9, 2015

Valuations are cheap but 2015 headwinds could carry over

Investment view now requires analysis of trends further

Is property over-building the past few years going to contribute to excess

Are airlines and liners overcapacity ever going to be resolved?

Do banks have any macro developments to look forward to or are they

Is the threat of a fourth telco real? Can the incumbents evolve?

Somewhere over the rainbow, birds do fly high

Navigating SingaporeStrategyEquity researchDecember 9, 2015

> Ageing population and rising social