malaysia company focus eastern & oriental442.0259.0 442.0 159.8 159.8 nbvnbv market value market...

Refer to important disclosures at the end of this report

BUYBUYBUYBUY RMRMRMRM2.752.752.752.75 KLCIKLCIKLCIKLCI : : : : 1,884.911,884.911,884.911,884.91 PricePricePricePrice Target :Target :Target :Target : 12-month RM 3.80 (Prev RM 3.10)

Shariah Compliant :Shariah Compliant :Shariah Compliant :Shariah Compliant : Yes

Reason for Report :Reason for Report :Reason for Report :Reason for Report : Proposed land acquisition announcement

Potential Catalyst: Potential Catalyst: Potential Catalyst: Potential Catalyst: Better-than-expected property sales

AllianceDBSAllianceDBSAllianceDBSAllianceDBS vs vs vs vs Consensus:Consensus:Consensus:Consensus: Conservative sales assumption Analyst QUAH He Wei, CFA +603 2604 3966 [email protected]

Price RelativePrice RelativePrice RelativePrice Relative

Forecasts and Valuation FY FY FY FY MarMarMarMar ((((RMRMRMRM m) m) m) m) 2014201420142014AAAA 2015201520152015FFFF 2016201620162016FFFF 2017201720172017FFFF

Revenue 497 664 774 865 EBITDA 186 233 342 409 Pre-tax Profit 168 176 248 236 Net Profit 113 123 177 176 Net Pft (Pre Ex.) 83 123 177 176 EPS (sen) 10.0 10.8 15.6 15.5 EPS Pre Ex. (sen) 7.3 10.8 15.6 15.5 EPS Gth (%) (13) 9 44 (1) EPS Gth Pre Ex (%) (31) 49 44 (1) Diluted EPS (sen) 9.3 13.0 18.0 17.9 Net DPS (sen) 3.0 3.3 4.7 4.7 BV Per Share (sen) 129.9 138.3 150.5 162.6 PE (X) 27.5 25.4 17.6 17.7 PE Pre Ex. (X) 37.7 25.4 17.6 17.7 P/Cash Flow (X) 35.2 9.3 19.0 14.9 EV/EBITDA (X) 19.5 14.4 12.1 12.0 Net Div Yield (%) 1.1 1.2 1.7 1.7 P/Book Value (X) 2.1 2.0 1.8 1.7 Net Debt/Equity (X) 0.3 0.1 0.5 0.9 ROAE (%) 7.7 7.8 10.4 9.5 Earnings Rev (%):Earnings Rev (%):Earnings Rev (%):Earnings Rev (%): nm nm nm Consensus EPS Consensus EPS Consensus EPS Consensus EPS (sensensensen):::: 12.4 17.0 18.0 Other Broker Recs:Other Broker Recs:Other Broker Recs:Other Broker Recs: B: 6 S: 1 H: 1 ICB IndustryICB IndustryICB IndustryICB Industry : Real Estate ICB Sector: ICB Sector: ICB Sector: ICB Sector: Real Estate Principal Business:Principal Business:Principal Business:Principal Business: Largest niche high-end developer with exposure to prime landbank in Penang, KL & Iskandar Malaysia

Source of all data: Company, AllianceDBS, Bloomberg Finance L.P.

At A Glance Issued Capital (m shrs) 1,106 Mkt. Cap (RMm/US$m) 3,042 / 956 Major Shareholders Sime Darby Berhad (%) 22.1 Morning Crest Sdn Bhd (%) 9.9 GKG Investment Holdings (%) 7.3 Free Float (%) 54.8 Avg. Daily Vol.(‘000) 4,083

Malaysia Equity Research

7 Jul 2014

Malaysia Company Focus

Eastern & Oriental Bloomberg: EAST MK | Reuters: ENOB.KL Refer to important disclosures at the end of this report

Long-awaited catalyst • 135-acre Elmina West land acquisition to

spearhead engine growth in Greater KL

• >RM1.5bn GDV mixed development to showcase wellness-themed township

• Maintain Buy with revised RM3.80 TP

Sweet deal. The proposed land acquisition from Sime

Darby for RM239.8m (RM40.78psf) consists of

RM192.76m (RM32.78psf) gross land price and RM47m

(RM8psf) infrastructure construction price. A baseline GDV

of RM1.54bn has been established where Sime Darby

could share 20% of the actual GDV exceeding the baseline

GDV. Nevertheless, the acquisition price remains attractive,

given the much higher recent transacted prices within the

Sg. Buloh vicinity which has reached RM300psf.

Strong potentials. Its land in Elmina West fringes a

2,700 acre forest reserve on the west and the 300-acre

Elmina Central Park on the southern side. It will feature a

mixed development of lifestyle residential and wellness

center. While the first launch would only materialize by

2HCY16, at the earliest (master layout plan, land title

conversion approvals to be secured in 21 months), we

conservatively estimate the proposed development will

enhance our RNAV by 18sen (3%). Meanwhile, funding

will be comfortably satisfied given its healthy net gearing

of 31% and favorable payment arrangement where gross

land price will be fully payable 2 years later and

infrastructure construction payment will be staggered over

36 months thereafter.

Maintain Buy. We nudged up our RNAV to RM5.40, after revising our land price assumption for its STP land

which was too conservative. Therefore, our TP is raised to

RM3.80, based on an unchanged 30% discount to RNAV.

We remain sanguine of E&O long-term prospects,

underlined by its quality land bank (Medini, STP, Elmina

West) and its strong, value-enhancing brand name.

90

110

130

150

170

190

210

230

0.8

1.3

1.8

2.3

2.8

Jul-10 Jul-11 Jul-12 Jul-13 Jul-14

Relative IndexRM

Eastern & Oriental (LHS) Relative KLCI INDEX (RHS)

Company Focus

Eastern & Oriental

City of Elmina – Wellness and liveable city

Elmina West falls under the 5,000-acre City of Elmina which

boasts a GDV of RM35bn over the next 10-15 years. It is a

short drive from the affluent Damansara and Petaling Jaya

and is easily accessible via various highways such as the

Guthrie Corridor Expressway and the proposed Damansara-

Shah Alam Highway. There will also be MRT connectivity via

Sg. Buloh stations at the nearby Rubber Research Institute

land.

The City of Elmina is developed based on the Mercer’s

Quality of Living Survey where various liveability features

measured by this internationally recognized standard will be

incorporated into the master plan. The City of Elmina

neighbours the 2,700-acre forest reserve which comes in

handy to exhibit its wellness concept. Existing ecosystem will

be integrated into the landscaping as well to further

enhance the sustainability of the township.

Some of the distinctive features include a 300-acre Elmina

Central Park which is situated at the southern section of

E&O’s land. Also, there will be a 70-kilometer cycling track, a

42-km jogging track, a wellness complex and a wellness

cluster that will cater for the new development community

and generational demands.

Flagship development in Klang Valley

The proposed land acquisition in Elmina West will be E&O’s

maiden township development in the Klang Valley to offer

wellness-themed products which are increasingly sought

after by the discerning property buyers. Elmina West is also

expected to be the heart of the City of Elmina as it will

comprise the main commercial hub, a wellness cluster and

shopping destination of the township.

Upon paying 10% deposit of the acquisition price, E&O will

only be required to pay the remaining 90% of the gross land

price upon fulfilment of conditions which are expected to

take 21 months. Thereafter, the 90% of the infrastructure

construction price will be payable in equal quarterly

instalments over a period of 36 months.

We understand that there will be more than 2,000 units of

properties to be offered to buyers under E&O’s Elmina West

mixed development. Taking cue from Sime Darby’s

resounding success at Elmina East township, we believe that

E&O’s established brand name and strong followings will

likely result in a sell-out.

Strategic location of Elmina West

Source: Company

Company Focus

Eastern & Oriental

Unique selling point of 300-acre park

Source: Company

Company Focus

Eastern & Oriental

RNAV

Source: Company, AllianceDBS

SummarySummarySummarySummary RMmRMmRMmRMm

NPV of unbilled sales @ 10% WACC

- STP 404.6

- Mews@Yap Kwang Seng 38.1

Surplus on revaluation

- Landbank 4,921.1

- Hotel 62.3

- Other investment properties 159.8

Reclamation cost for Gurney Drive (856.0)

Shareholders Funds 1,438.4

RNAVRNAVRNAVRNAV 6,179.36,179.36,179.36,179.3

No of shares 1,135.6

RNAV /shareRNAV /shareRNAV /shareRNAV /share 5.445.445.445.44

ProjectProjectProjectProject A cresA cresA cresA cres StakeStakeStakeStake Ef f SurplusEf f SurplusEf f SurplusEf f Surplus

RMpsfRMpsfRMpsfRMpsf RMmRMmRMmRMm RMpsfRMpsfRMpsfRMpsf RMmRMmRMmRMm RMmRMmRMmRMm

Jln Conlay, KL 1 100% 684 43.0 1,500 94.3 51.3

The Peak, Damansara Heights 4 100% 319 52.9 900 149.0 96.1

Kemensah Heights, Ulu Klang 310 88% 8 106.6 45 606.7 437.6

Others, KL 10 100% 80 36.1 80 36.3 0.2

Tanjung Pinang Phase 1, Penang 12 94% 200 104.5 600 313.6 196.5

Tanjung Pinang Phase 2, Penang 253 79% 200 2,204.1 600 6,612.4 3,473.7

Gertak Sanggul, Penang 365 100% 8 133.2 25 397.5 264.3

Medini 210 50% 38 350.0 126 1,152.6 401.3

1,1651,1651,1651,165 3,030.53,030.53,030.53,030.5 9,362.59,362.59,362.59,362.5 4,921.14,921.14,921.14,921.1

HotelsHotelsHotelsHotels RoomsRoomsRoomsRooms StakeStakeStakeStake Ef f SurplusEf f SurplusEf f SurplusEf f Surplus

RMm/ RMm/ RMm/ RMm/

roomroomroomroom RMmRMmRMmRMm

RMm/ RMm/ RMm/ RMm/

roomroomroomroom RMmRMmRMmRMm RMmRMmRMmRMm

E&O Hotel 222 100% 0.9 197.7 1.17 260.0 62.3

Lone Pine 90 100% 0.8 69.0 0.77 69.0 -

266.7266.7266.7266.7 329.0329.0329.0329.0 62.362.362.362.3

Inv estment Propert iesInv estment Propert iesInv estment Propert iesInv estment Propert ies SizeSizeSizeSize StakeStakeStakeStake Ef f SurplusEf f SurplusEf f SurplusEf f Surplus

sfsfsfsf RMpsfRMpsfRMpsfRMpsf RMmRMmRMmRMm RMpsfRMpsfRMpsfRMpsf RMmRMmRMmRMm RMmRMmRMmRMm

Dua Residency Annexe (Delicious) 29,568 100% 676 20.0 1,500 44.4 24.4

Straits Quay 575,289 100% 405 233.0 600 345.2 112.2

St Mary Place 35,000 50% 173 6.0 1,500 52.5 23.2

259.0259.0259.0259.0 442.0442.0442.0442.0 159.8159.8159.8159.8

NBVNBVNBVNBV Market V alueMarket V alueMarket V alueMarket V alue

NBVNBVNBVNBV

NBVNBVNBVNBV Market V alueMarket V alueMarket V alueMarket V alue

Market V alueMarket V alueMarket V alueMarket V alue

Company Focus

Eastern & Oriental

Key Assumptions

FY FY FY FY MarMarMarMar 2013201320132013AAAA 2014201420142014AAAA 2015201520152015FFFF 2016201620162016FFFF 2017201720172017FFFF

Property sales N/A N/A 1,021.0 358.2 291.0 Segmental Breakdown

FY FY FY FY MarMarMarMar 2013201320132013AAAA 2014201420142014AAAA 2015201520152015FFFF 2016201620162016FFFF 2017201720172017FFFF Revenues (RM m)

Property development 520 372 527 623 701

Hotel operations 84 113 124 137 151 Property investment & others

2 12 13 13 14

TotalTotalTotalTotal 606606606606 497497497497 664664664664 774774774774 865865865865

Operating Profit (RM m) Property development 212 206 209 264 262

Hotel operations (4) (21) 6 14 15 Property investment & others

(24) 7 3 3 3

Others (15) (41) (24) (19) (19)

TotalTotalTotalTotal 169169169169 151151151151 194194194194 262262262262 261261261261

Opg Profit Margins (%) Property development 40.9 55.4 39.7 42.4 37.4

Hotel operations (4.9) (18.5) 5.0 10.0 10.0 Property investment & others

(1,143.6) 57.7 20.0 20.0 20.0

TotalTotalTotalTotal 27.927.927.927.9 30.430.430.430.4 29.229.229.229.2 33.833.833.833.8 30.130.130.130.1

Income Statement (RM m)


Revenue 606 497 664 774 865

Cost of Goods Sold (421) (323) (447) (461) (498)

Gross ProfitGross ProfitGross ProfitGross Profit 184184184184 175175175175 217217217217 313313313313 367367367367 Other Opng (Exp)/Inc (15) (24) (23) (51) (107)

Operating ProfitOperating ProfitOperating ProfitOperating Profit 169169169169 151151151151 194194194194 262262262262 261261261261 Other Non Opg (Exp)/Inc 0 0 0 0 0

Associates & JV Inc 33 11 16 29 41

Net Interest (Exp)/Inc (24) (35) (34) (43) (66)

Exceptional Gain/(Loss) 9 41 0 0 0

PrePrePrePre----tax Profittax Profittax Profittax Profit 187187187187 168168168168 176176176176 248248248248 236236236236 Tax (50) (48) (40) (55) (49)

Minority Interest (7) (7) (13) (16) (11)

Preference Dividend 0 0 0 0 0

Net ProfitNet ProfitNet ProfitNet Profit 130130130130 113113113113 123123123123 177177177177 176176176176 Net Profit before Except. 120 83 123 177 176

EBITDA 217 186 233 342 409

Growth

Revenue Gth (%) 23.0 (17.9) 33.5 16.6 11.9

EBITDA Gth (%) 57.8 (14.5) 25.2 47.2 19.5

Opg Profit Gth (%) 87.4 (10.7) 28.4 34.9 (0.3)

Net Profit Gth (%) 5.2 (12.5) 8.6 44.0 (0.6)

Margins & Ratio

Gross Margins (%) 30.4 35.1 32.7 40.5 42.5

Opg Profit Margin (%) 27.9 30.4 29.2 33.8 30.1

Net Profit Margin (%) 21.4 22.8 18.6 22.9 20.4

ROAE (%) 9.3 7.7 7.8 10.4 9.5

ROA (%) 5.2 4.6 4.6 5.4 4.3

ROCE (%) 5.5 4.6 6.2 6.8 5.5

Div Payout Ratio (%) 29.6 30.0 30.0 30.0 30.0

Net Interest Cover (x) 7.0 4.4 5.8 6.1 3.9


Sensitivity Analysis 2012012012015555

Sales +/- 1% Net Profit +/- 0.5%

Margins Trend

17.0%

19.0%

21.0%

23.0%

25.0%

27.0%

29.0%

31.0%

33.0%

35.0%

2013A 2014A 2015F 2016F 2017F

Operating Margin % Net Income Margin %

Driven by ongoing projects in Penang, Johor, KL and London with RM900m unbilled sales.

50:50 JV for Avira@Medini

Company Focus

Eastern & Oriental

Quarterly / Interim Income Statement (RM m)

FY FY FY FY MarMarMarMar 4Q4Q4Q4Q2013201320132013 1Q1Q1Q1Q2014201420142014 2Q2Q2Q2Q2014201420142014 3Q3Q3Q3Q2014201420142014 4Q4Q4Q4Q2014201420142014

Revenue 165 95 75 98 230

Cost of Goods Sold (101) (68) (48) (61) (144)

Gross ProfitGross ProfitGross ProfitGross Profit 64646464 27272727 27272727 37373737 85858585 Other Oper. (Exp)/Inc (4) (5) (6) (6) (6)

Operating ProfitOperating ProfitOperating ProfitOperating Profit 60606060 22222222 21212121 30303030 79797979 Other Non Opg (Exp)/Inc 0 0 0 0 0

Associates & JV Inc 8 2 1 5 3

Net Interest (Exp)/Inc (9) (10) (9) (9) (8)

Exceptional Gain/(Loss) 0 20 13 1 6

PrePrePrePre----tax Profittax Profittax Profittax Profit 59595959 35353535 25252525 28282828 80808080 Tax (19) (7) (8) (8) (25)

Minority Interest (2) (1) (1) (1) (4)

Net ProfitNet ProfitNet ProfitNet Profit 38383838 27272727 16161616 19191919 51515151 Net profit bef Except. 38 7 4 18 45

EBITDA 72 29 27 42 88

Growth

Revenue Gth (%) 13.9 (42.3) (21.4) 31.0 134.9

EBITDA Gth (%) 94.0 (60.1) (4.8) 53.7 109.9

Opg Profit Gth (%) 91.9 (63.8) (4.3) 45.4 161.5

Net Profit Gth (%) 43.8 (28.3) (39.5) 15.8 165.9

Margins Gross Margins (%) 38.6 28.1 35.9 37.4 37.1

Opg Profit Margins (%) 36.4 22.9 27.8 30.9 34.4

Net Profit Margins (%) 23.1 28.7 22.0 19.5 22.1 Balance Sheet (RM m)

FY FY FY FY MarMarMarMar 2013201320132013AAAA 2014201420142014AAAA 2015201520152015FFFF 2016201620162016FFFF 2017201720172017FFFF Net Fixed Assets 365 354 350 1,219 2,032

Invts in Associates & JVs 114 95 111 140 181

Invt & Devt Properties 1,033 1,088 1,088 1,088 1,088

Other LT Assets 7 23 23 23 23

Cash & ST Invts 283 277 565 170 21

Dev Props held for sale 226 264 316 374 421

Inventory 110 87 37 38 41

Debtors 311 251 190 221 247

Other Current Assets 30 25 25 25 25

Total AssetsTotal AssetsTotal AssetsTotal Assets 2,4782,4782,4782,478 2,4652,4652,4652,465 2,7062,7062,7062,706 3,2993,2993,2993,299 4,0804,0804,0804,080

ST Debt

281 184 184 184 184

Creditor 212 105 237 276 309

Other Current Liab 23 38 38 38 38

LT Debt 491 544 544 944 1,544

Other LT Liabilities 46 76 76 76 76

Shareholder’s Equity 1,390 1,475 1,571 1,709 1,846

Minority Interests 36 43 55 71 82

Total Cap. & Liab.Total Cap. & Liab.Total Cap. & Liab.Total Cap. & Liab. 2,4782,4782,4782,478 2,4652,4652,4652,465 2,7062,7062,7062,706 3,2993,2993,2993,299 4,0804,0804,0804,080

Non-Cash Wkg. Capital 442 485 293 344 387

Net Cash/(Debt) (489) (451) (163) (958) (1,708)

Debtors Turn (avg days) 187.7 184.6 104.3 104.3 104.3

Creditors Turn (avg days) 183.9 193.3 147.2 229.0 273.0

Inventory Turn (avg days) 66.4 120.1 53.5 33.7 37.3

Asset Turnover (x) 0.2 0.2 0.2 0.2 0.2

Current Ratio (x) 1.9 2.8 2.5 1.7 1.4

Quick Ratio (x) 1.2 1.6 1.6 0.8 0.5

Net Debt/Equity (X) 0.3 0.3 0.1 0.5 0.9

Net Debt/Equity ex MI (X) 0.4 0.3 0.1 0.6 0.9

Capex to Debt (%) 5.3 2.2 2.7 81.6 53.2

Z-Score (X) 2.6 2.8 2.7 2.3 NA


Revenue Trend

Asset Breakdown (2015)

-60%

-40%

-20%

0%

20%

40%

60%

80%

100%

120%

140%

160%

0

50

100

150

200

250

3Q

201

2

4Q

201

2

1Q

201

3

2Q

201

3

3Q

201

3

4Q

201

3

1Q

201

4

2Q

201

4

3Q

201

4

4Q

201

4

Revenue Revenue Growth % (QoQ)

Progressive billings of on-going projects

31% net gearing as at Mar14

Company Focus

Eastern & Oriental

Cash Flow Statement (RM m)


Pre-Tax Profit 187 168 176 248 236

Dep. & Amort. 15 24 23 51 107

Tax Paid (43) (62) (40) (55) (49)

Assoc. & JV Inc/(loss) (33) (11) (16) (29) (41)

Chg in Wkg.Cap. (66) (1) 192 (51) (43)

Other Operating CF (18) (29) 0 0 0

Net Operating CFNet Operating CFNet Operating CFNet Operating CF 41414141 89898989 336336336336 164164164164 210210210210 Capital Exp.(net) (41) (16) (20) (920) (920)

Other Invts.(net) (121) (18) 0 0 0

Invts in Assoc. & JV 0 28 0 0 0

Div from Assoc & JV 0 0 0 0 0

Other Investing CF 0 0 0 0 0

Net Investing CFNet Investing CFNet Investing CFNet Investing CF (162)(162)(162)(162) (5)(5)(5)(5) (20)(20)(20)(20) (920)(920)(920)(920) (920)(920)(920)(920) Div Paid (35) (37) (27) (39) (39)

Chg in Gross Debt 167 (23) 0 400 600

Capital Issues 2 0 0 0 0

Other Financing CF (18) 28 0 0 0

Net Financing CFNet Financing CFNet Financing CFNet Financing CF 116116116116 (32)(32)(32)(32) (27)(27)(27)(27) 361361361361 561561561561

Currency Adjustments 18 (29) 0 0 0

Chg in Cash 14 23 288 (395) (149)

Opg CFPS (sen) 9.5 7.9 12.6 19.0 22.2

Free CFPS (sen) 0.0 6.4 27.8 (66.6) (62.5)


Capital Expenditure

Target Price & Ratings History

Source: AllianceDBS

0

100

200

300

400

500

600

700

800

900

1000

2013A 2014A 2015F 2016F 2017F

Capital Expenditure (-)

S.No.S.No.S.No.S.No. Da teDa teDa teDa teClos ing Clos ing Clos ing Clos ing

Pr icePr icePr icePr ice

Ta rge t Ta rge t Ta rge t Ta rge t

Pri cePri cePri cePri ceRa ting Ra ting Ra ting Ra ting

1: 12 Aug 13 2.08 2.90 Buy

2: 27 Aug 13 1.98 3.10 Buy

3: 27 Nov 13 1.92 3.10 Buy

4: 13 Feb 14 1.97 3.10 Buy

5: 27 Feb 14 1.97 2.65 Buy

6: 15 Apr 14 2.54 2.65 Buy

7: 26 May 14 2.35 3.10 Buy

Note Note Note Note : Share price and Target price are adjusted for corporate actions.

1

2

3

4

5

6

7

1.76

1.96

2.16

2.36

2.56

2.76

Jul-13 Nov-13 Mar-14

RMRMRMRM

Reclamation of STP2

Company Focus

Eastern & Oriental

DISCLOSURE

Stock rating definitions STRONG BUY - > 20% total return over the next 3 months, with identifiable share price catalysts within this time frame BUY - > 15% total return over the next 12 months for small caps, >10% for large caps HOLD - -10% to +15% total return over the next 12 months for small caps, -10% to +10% for large caps FULLY VALUED - negative total return > -10% over the next 12 months SELL - negative total return of > -20% over the next 3 months, with identifiable catalysts within this time frame Commonly used abbreviations Adex = advertising expenditure EPS = earnings per share PBT = profit before tax bn = billion EV = enterprise value P/B = price / book ratio BV = book value FCF = free cash flow P/E = price / earnings ratio CF = cash flow FV = fair value PEG = P/E ratio to growth ratio CAGR = compounded annual growth rate FY = financial year q-o-q = quarter-on-quarter Capex = capital expenditure m = million RM = Ringgit CY = calendar year M-o-m = month-on-month ROA = return on assets Div yld = dividend yield NAV = net assets value ROE = return on equity DCF = discounted cash flow NM = not meaningful TP = target price DDM = dividend discount model NTA = net tangible assets trn = trillion DPS = dividend per share NR = not rated WACC = weighted average cost of capital EBIT = earnings before interest & tax p.a. = per annum y-o-y = year-on-year EBITDA = EBIT before depreciation and amortisation PAT = profit after tax YTD = year-to-date

Company Focus

Eastern & Oriental

DISCLAIMER

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In particular, it is highlighted that this report is not intended for nor does it have regard to the specific investment objectives, financial situation and particular needs of any specific person who may receive this report. Investors are therefore advised to make their own independent evaluation of the information contained in this report, consider their own individual investment objectives, financial situations and particular needs and consult their own professional advisers (including but not limited to financial, legal and tax advisers) regarding the appropriateness of investing in any securities or investments that may be featured in this report. ADBSR, AIBB, DBSVH and DBS Bank Ltd, their directors, representatives and employees or any of their affiliates or their related parties may, from time to time, have an interest in the securities mentioned in this report. AIBB, DBSVH and DBS Bank Ltd, their affiliates and/or their related persons may do and/or seek to do business with the company(ies) covered in this report and may from time to time act as market maker or have assumed an underwriting commitment in securities of such company(ies), may sell or buy such securities from customers on a principal basis and may also perform or seek to perform significant investment banking, advisory or underwriting services for or relating to such company(ies) as well as solicit such investment, advisory or other services from any entity mentioned in this report. AIBB, DBSVH, DBS Bank Ltd (which carries on, inter alia, corporate finance activities) and their activities are separate from ADBSR. AIBB, DBSVH and DBS Bank Ltd may have no input into company-specific coverage decisions (i.e. whether or not to initiate or terminate coverage of a particular company or securities in reports produced by ADBSR) and ADBSR does not take into account investment banking revenues or potential revenues when making company-specific coverage decisions. ADBSR, AIBB, DBSVH, DBS Bank Ltd and/or other affiliates of DBS Vickers Securities (USA) Inc (“DBSVUSA”), a U.S.-registered broker-dealer, may beneficially own a total of 1% or more of any class of common equity securities of the subject company mentioned in this report. ADBSR, AIBB, DBSVH, DBS Bank Ltd and/or other affiliates of DBSVUSA may, within the past 12 months, have received compensation and/or within the next 3 months seek to obtain compensation for investment banking services from the subject company. DBSVUSA does not have its own investment banking or research department, nor has it participated in any investment banking transaction as a manager or co-manager in the past twelve months. Any US persons wishing to obtain further information, including any clarification on disclosures in this disclaimer, or to effect a transaction in any security discussed in this report should contact DBSVUSA exclusively. DBS Vickers Securities (UK) Ltd is an authorised person in the meaning of the Financial Services and Markets Act and is regulated by The Financial Services Authority. Research distributed in the UK is intended only for institutional clients. In reviewing this report, an investor should be aware that any or all of the foregoing, among other things, may give rise to real or potential conflicts of interest. Additional information is, subject to the overriding issue of confidentiality, available upon request to enable an investor to make their own independent evaluation of the information contained herein.

Wong Ming Tek, Executive Director

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malaysia company focus eastern & oriental442.0259.0 442.0 159.8 159.8 nbvnbv market value market...

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