China / Hong Kong Company Guide

Beijing Capital Intl Airport

Version 10 | Bloomberg: 694 HK EQUITY | Reuters: 0694.HK
Refer to important disclosures at the end of this report

DBS Group Research . Equity 2 Sep 2019

BUY Transitioning for a brighter future

Last Traded Price ( 30 Aug 2019):HK$6.58(HSI : 25,725)
Price Target 12-mth:HK$10.00 (52.0% upside) (Prev HK$11.10) Maintain BUY as BCIA transitions for longer term growth. While
the company’s earnings are expected to be on a decline over
Analyst
the next 2 to 3 years with the opening of Daxing Airport, it is
Paul YONG, CFA+65 6682 3712, [email protected]
planning to make use of this transition period to invest and
What’s New upgrade for the future, which is positive given its position in the
capital of China. We have cut our TP from HK$11.10 to HK$10
• Interim earnings were slightly below
to reflect the accelerated capital expenditure plan during 2019-
expectations, declining 13% y-o-y to RMB1.3bn
2021, but kept our recommendation as a BUY.
• Large jump in retail concession revenue helped
to offset the loss of airport fees Where we differ: We are more positive on the longer-term
outlook for Beijing Capital Airport as we see traffic rebounding
• The company plans to invest more during the
fairly quickly towards full utilisation.
transition period to upgrade for the future

• Maintain BUY with HK$10.00 TP Potential catalysts: BCIA’s share price could rebound if the
earnings impact from the opening of the new Daxing Airport in
Price Relative Beijing is not as pronounced as some investors have feared.
HK$ Relative Index

211
14.2
13.2 191
Valuation:
12.2
11.2
171 DCF-based TP of HK$10.00. Our TP for BCIA is based on
151
10.2
9.2
131 discounted cash flow, and assumes a WACC of 7.9% and
8.2
111
91
terminal growth rate of 1%.
7.2
6.2 71
5.2 51
Aug-15 Aug-16 Aug-17 Aug-18 Aug-19 Key Risks to Our View:
Beijing Capital Intl Airport (LHS) Relative HSI (RHS) Impact from new airport could be more negative than expected.
Forecasts and Valuation If a larger than expected decline in aircraft movements or
FY Dec (RMBm) 2018A 2019F 2020F 2021F passenger throughput occurs following the opening of Daxing
Turnover 11,263 10,339 8,600 7,825 airport, BCIA’s earnings would be further affected.
EBITDA 5,412 4,801 3,702 3,362
Pre-tax Profit 3,829 3,239 2,081 1,688
Net Profit 2,872 2,430 1,561 1,266 At A Glance
Net Profit Gth (Pre-ex) (%) 19.0 (17.5) (35.7) (18.9) Issued Capital (m shrs) 1,879
EPS (HK$) 0.73 0.61 0.39 0.32 - Non H shrs (m shs) 2,452
EPS Gth (%) 10.4 (15.4) (35.7) (18.9)
Core EPS Gth (%) 19.0 (17.5) (35.7) (18.9) Mkt Cap (HK$m/US$m) 28,497 / 3,633
Diluted EPS (HK$) 0.73 0.61 0.39 0.32 Major Shareholders (%)
DPS (HK$) 0.29 0.25 0.16 0.13 NWS Holdings Ltd 6.4
BV Per Share (HK$) 5.92 6.29 6.53 6.72 Matthews International Capital Management, L.L.C. 6.0
PE (X) 9.1 10.7 16.7 20.5
Hermes Investment Management Ltd. 6.0
P/Cash Flow (X) 5.5 17.3 9.0 9.8
P/Free CF (X) 16.9 nm 34.5 50.8 GIC Private Limited 5.1
EV/EBITDA (X) 5.4 6.4 8.2 9.0 Free Float (%) 76.6
Net Div Yield (%) 4.4 3.7 2.4 1.9 3m Avg. Daily Val. (US$m) 5.80
P/Book Value (X) 1.1 1.0 1.0 1.0 ICB Industry: Industrials / Industrial Transportation
Net Debt/Equity (X) 0.1 0.2 0.2 0.2
ROAE(%) 12.8 10.1 6.2 4.8 Bloomberg ESG disclosure score (2017)^ 40.9
- Environmental / Social / Governance 32.6 / 47.4 / 53.6
Earnings Rev (%): (6) (5) (8)
Consensus EPS (RMB) 0.51 0.38 0.33 ^ refer to back page for more information
Other Broker Recs: B: 6 S: 4 H: 9
Source of all data on this page: Company, DBS Bank (Hong Kong) Limited
(“DBS HK”), Thomson Reuters

ed-JS/ sa- CS /AH

Company Guide

Beijing Capital Intl Airport

WHAT’S NEW Transitioning for the future: While the company earnings are
Earnings disappoint slightly but healthy retail expected to be on a decline over the next 2 to 3 years with
concession revenue helps offset loss of airport fees the opening of Daxing Airport, it is planning to make use of
this transition period to invest and upgrade for the future,
Revenue up by 1.1% to RMB5.38bn despite loss of airport
which we believe remains bright given its position in the
fees. Aeronautical revenues dropped 23% y-o-y to
capital of China.
RMB2,034m as airport fees have ceased to be recognised as
revenues, but this was offset by a 66% increase in retailing
We have lowered FY19/20/21F earnings by 6%/5%/8% to
concession revenue to RMB1,773m.
take into account lower interest income and higher
depreciation from the increased capital expenditures in the
Operating profit however, fell by 8% y-o-y to RMB1,816m
near term.
since there are costs associated with higher retail concession
revenues, unlike airport fees. Net profit fell by a similar 13%
y-o-y to RMB1,290m. An interim dividend of RMB 0.0894
was declared.

Interim Income Statement (RMBm)

FY Dec 1H2018 2H2018 1H2019 % chg yoy % chg hoh

Revenue 5,322 5,940 5,380 1.1 (9.4)

Cost of Goods Sold (3,252) (3,971) (3,564) 9.6 (10.2)
Gross Profit 2,070 1,970 1,816 (12.2) (7.8)
Other Oper. (Exp)/Inc 0.0 0.0 0.0 nm nm
Operating Profit 2,070 1,970 1,816 (12.2) (7.8)
Other Non Opg (Exp)/Inc 8.00 (4.5) (14.8) nm 230.0
Associates & JV Inc 0.0 0.0 0.0 nm nm
Net Interest (Exp)/Inc (73.2) (69.3) (79.2) (8.2) (14.3)
Exceptional Gain/(Loss) (20.7) (50.9) (1.2) 94.3 (97.7)
Pre-tax Profit 1,984 1,845 1,721 (13.2) (6.7)
Tax (497) (460) (431) (13.3) (6.2)
Minority Interest 0.0 0.0 0.0 nm nm
Net Profit 1,487 1,385 1,290 (13.2) (6.9)
Net profit bef Except. 1,502 1,423 1,291 (14.1) (9.3)
EBITDA 2,777 2,635 2,487 (10.4) (5.6)
Margins (%)
Gross Margins 38.9 33.2 33.8
Opg Profit Margins 38.9 33.2 33.8
Net Profit Margins 27.9 23.3 24.0

Source: Company, DBS HK

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 Company Guide

Beijing Capital Intl Airport

CRITICAL FACTORS TO WATCH Aircraft movement growth (%)

Critical Factors
Aeronautical fees to decrease in importance. Aeronautical
revenue made up 46.7% of total net revenue in FY18 and
consisted of 1) passenger charges, 2) aircraft movements and
related charges, and 3) airport fees. With the announced policy
change that BCIA will cease to recognise airport fees from 29
Nov 2018 onwards, the contribution of aeronautical fees to
total revenue will decline to less than 40% in 2019F.
Passenger throughput growth (%)
Meanwhile, BCIA is expected to continue with its strategy of
improving the passenger throughput mix towards international
travellers, which generate higher aeronautical and non-
aeronautical revenue per pax.

Non-aeronautical revenues get a boost from higher concession

income. Non-aeronautical revenue includes revenue from 1)
concessions (from retailing, advertising, restaurants and food
shops, ground handling, VIP service and others), 2) rentals, and
3) car park charges and others. Among these, the larger
revenue contributors are retailing (47%), advertising (19%), Aeronautical revenue
and rentals (22%), with each making up nearly 20% or more
of non-aeronautical revenue in 2018.

It was announced in July 2017 that BCIA’s retail concession

will receive a significant boost in revenue following the tender
of its duty-free concessions in T2 & T3. With the new
concession kicking in from 1Q18, we project non-aeronautical
revenue to grow from c. RMB6bn in FY18 to and RMB6.3bn
in FY19F. Non-aeronautical revenue will make up 61% of
revenue in FY19F, compared to less than 53% in FY18 and Non-Aeronautical revenue
less than 47% in FY17.

The Civil Aviation Administration of China published on 4 Jan

2019 its airline allocation plan in Beijing between the existing
Beijing Capital Airport and Daxing Airport, which is due to
begin operations in September 2019. Based on our estimates,
this will reduce the number of flights allocated to Beijing
Capital Airport by 1.6% in 2019F, and a further 19.1% in
2020F and 12.7% in 2021F before growth resumes in 2022 at
c. 15%
Source: Company, DBS HK

Earnings to decline from FY19F to FY21F before rebounding.

Including the impact of the removal of airport fees and taking
into account CAAC’s airline allocation plans for Capital and
Daxing airports, we now project the company’s operating
profits to decline by 16% in FY19F, and a further 33% in
FY20F and 18% in FY21F before rebounding by 30% in 2022F.

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 Company Guide

Beijing Capital Intl Airport

Balance Sheet:
Investing more in the few years to upgrade the airport’s Leverage & Asset Turnover (x)
infrastructure and capabilities. The company plans to take
advantage of the transition period over the next few years to
upgrade its facilities and infrastructure to cater for longer term
growth, and we estimate that average capital expenditure will
be RMB 2bn to RMB 2.2bn per year from 2019F to 2021F.

Share Price Drivers:

DCF-based target price of HK$10. Our target price for BCIA is
based on discounted cash flows, and assumes WACC of 7.9% Capital Expenditure
and terminal growth rate of 1%. Our DCF-based TP is lowered
to HK$10 to take into account the company’s more aggressive
capital expenditure plans in the next 3 years.

Second Beijing airport a longer-term catalyst. With Beijing’s

second airport slated to open in September 2019, which would
cater for longer-term air traffic growth in Beijing, a subsequent
potential asset injection of the second airport by BCIA’s parent
company could prove beneficial to BCIA – at the right price and
at the right time
Forward PE Band

Key Risks:
Impact from new airport could be more negative than
expected. If a larger than expected decline in aircraft
movements or passenger throughput occurs follow the
opening of Daxing airport, BCIA’s earnings would be further
affected.
Overpaying for acquisitions. There is a risk that BCIA will
overpay for any acquisition, which would lead to lower returns
for shareholders. PB Band

Environment, Social, Governance:

BCIA has been consistently scoring higher than its peers in
terms of ESG. To promote the green airport construction, BCIA
released the BCIA Three-year Action Plan to Build a Green
Airport with Collective Efforts in 2018, which clarifies the
development goals in terms of energy management, energy
conservation, water conservation and fuel conservation. In
2018, BCIA completed the work on carbon trade inspection,
Environment, Social, Governance
transaction and fulfillment as a carbon trading pilot in Beijing,
saving 10,560 tons of carbon more than the carbon quota.
50
40
Company Background
Beijing Capital International Airport (BCIA) owns and operates 30

Beijing Capital Airport, which is the busiest airport in Asia in 20

terms of passenger throughput, and the second busiest in the 10

world. Its revenue streams are segmented into aeronautical 0

Y2016 Y2017
revenues (passenger charges, airport movement fees and
694 HK Equity Peers
airport fees) and non-aeronautical (concessions, rentals and
car park) revenues. It is over 56% owned by the government.

Source: Bloomberg Finance L.P., Company, DBS HK

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Beijing Capital Intl Airport

Key Assumptions
FY Dec 2017A 2018A 2019F 2020F 2021F
Aircraft movement growth (%) (1.5) 2.8 (3.4) (19.4) (11.8)
Passenger throughput growth (%) 1.5 5.4 (2.3) (18.2) (10.6)
Aeronautical revenue 5,100.7 5,309.4 4,039.7 3,312.7 2,969.5
Non-Aeronautical revenue 4,473.8 5,953.1 6,299.5 5,287.8 4,855.8
Source: Company, DBS HK

Segmental Breakdown (RMB m)

FY Dec 2017A 2018A 2019F 2020F 2021F
Revenues (RMB m)
Aeronautical 5,101 5,309 4,040 3,313 2,970
Non-Aeronautical 4,474 5,953 6,299 5,288 4,856
Total 9,575 11,263 10,339 8,600 7,825

Income Statement (RMB m)

FY Dec 2017A 2018A 2019F 2020F 2021F
Revenue 9,575 11,263 10,339 8,600 7,825
Cost of Goods Sold (6,026) (7,223) (6,950) (6,343) (5,963)
Gross Profit 3,549 4,039 3,389 2,258 1,862
Other Opng (Exp)/Inc 0 0 0 0 0
Operating Profit 3,549 4,039 3,389 2,258 1,862
Other Non Opg (Exp)/Inc 4 4 4 4 5
Associates & JV Inc 3 0 0 0 0
Net Interest (Exp)/Inc (213) (142) (154) (180) (179)
Dividend Income 0 0 0 0 0
Exceptional Gain/(Loss) 127 (72) 0 0 0
Pre-tax Profit 3,470 3,829 3,239 2,081 1,688
Tax (870) (957) (809) (520) (422)
Minority Interest 0 0 0 0 0
Preference Dividend 0 0 0 0 0
Net Profit 2,600 2,872 2,430 1,561 1,266
Net Profit before Except. 2,473 2,944 2,430 1,561 1,266
EBITDA 4,960 5,412 4,801 3,702 3,362
Growth
Revenue Gth (%) 10.3 17.6 (8.2) (16.8) (9.0)
EBITDA Gth (%) 11.5 9.1 (11.3) (22.9) (9.2)
Opg Profit Gth (%) 22.7 13.8 (16.1) (33.4) (17.5)
Net Profit Gth (%) 46.0 10.4 (15.4) (35.7) (18.9)
Margins & Ratio
Gross Margins (%) 37.1 35.9 32.8 26.3 23.8
Opg Profit Margin (%) 37.1 35.9 32.8 26.3 23.8
Net Profit Margin (%) 27.2 25.5 23.5 18.2 16.2
ROAE (%) 12.7 12.8 10.1 6.2 4.8
ROA (%) 8.1 8.8 7.0 4.5 3.6
ROCE (%) 9.3 11.0 8.6 5.5 4.4
Div Payout Ratio (%) 40.0 40.0 40.0 40.0 40.0
Net Interest Cover (x) 16.7 28.4 22.1 12.5 10.4
Source: Company, DBS HK

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Beijing Capital Intl Airport

Interim Income Statement (RMB m)

FY Dec 1H2017 2H2017 1H2018 2H2018 1H2019

Revenue 4,614 4,960 5,322 5,940 5,380

Cost of Goods Sold (2,823) (3,203) (3,252) (3,971) (3,564)
Gross Profit 1,792 1,757 2,070 1,969 1,816
Other Oper. (Exp)/Inc 0 0 0 0 0
Operating Profit 1,792 1,757 2,070 1,969 1,816
Other Non Opg (Exp)/Inc (32) 36 8 (4) (15)
Associates & JV Inc (1) 5 0 0 0
Net Interest (Exp)/Inc (120) (93) (73) (69) (79)
Exceptional Gain/(Loss) 49 78 (21) (51) (1)
Pre-tax Profit 1,687 1,783 1,984 1,845 1,721
Tax (423) (447) (497) (460) (431)
Minority Interest 0 0 0 0 0
Net Profit 1,264 1,336 1,487 1,385 1,290
Net profit bef Except. 1,227 1,278 1,502 1,423 1,291

Growth
Revenue Gth (%) 9.9 10.7 15.3 19.8 1.1
Opg Profit Gth (%) 23.9 21.5 15.5 12.1 (12.2)
Net Profit Gth (%) 39.6 52.6 17.6 3.7 (13.2)

Margins
Gross Margins (%) 38.8 35.4 38.9 33.2 33.8
Opg Profit Margins (%) 38.8 35.4 38.9 33.2 33.8
Net Profit Margins (%) 27.4 26.9 27.9 23.3 24.0
Source: Company, DBS HK
Balance Sheet (RMB m)
FY Dec 2017A 2018A 2019F 2020F 2021F

Net Fixed Assets 26,051 26,973 27,560 28,291 28,968

Invts in Associates & JVs 0 0 0 0 0
Other LT Assets 1,428 3,593 3,554 3,528 3,502
Cash & ST Invts 1,615 1,806 886 1,014 1,020
Inventory 0 0 0 0 0
Debtors 1,315 1,387 1,292 1,075 978
Other Current Assets 229 940 940 940 940
Total Assets 30,637 34,698 34,231 34,848 35,407

ST Debt 161 3,147 3,147 3,147 3,147

Creditors 3,646 6,083 3,658 3,338 3,138
Other Current Liab 406 103 103 103 103
LT Debt 4,838 1,759 2,259 2,259 2,259
Other LT Liabilities 156 192 192 192 192
Shareholder’s Equity 21,430 23,413 24,871 25,808 26,567
Minority Interests 0 0 0 0 0
Total Cap. & Liab. 30,637 34,698 34,231 34,848 35,407

Non-Cash Wkg. Capital (2,508) (3,860) (1,529) (1,427) (1,324)

Net Cash/(Debt) (3,384) (3,100) (4,520) (4,392) (4,386)
Debtors Turn (avg days) 46.8 43.8 47.3 50.2 47.9
Creditors Turn (avg days) 268.3 303.3 320.8 260.5 264.5
Inventory Turn (avg days) N/A N/A N/A N/A N/A
Asset Turnover (x) 0.3 0.3 0.3 0.2 0.2
Current Ratio (x) 0.7 0.4 0.5 0.5 0.5
Quick Ratio (x) 0.7 0.3 0.3 0.3 0.3
Net Debt/Equity (X) 0.2 0.1 0.2 0.2 0.2
Net Debt/Equity ex MI (X) 0.2 0.1 0.2 0.2 0.2
Capex to Debt (%) 17.3 64.3 36.2 39.7 39.7
Z-Score (X) 3.2 2.3 3.0 3.2 3.7
Source: Company, DBS HK

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Beijing Capital Intl Airport

Cash Flow Statement (RMB m)

FY Dec 2017A 2018A 2019F 2020F 2021F

Pre-Tax Profit 3,470 3,829 3,239 2,081 1,688

Dep. & Amort. 1,404 1,369 1,409 1,440 1,495
Tax Paid (870) (957) (809) (520) (422)
Assoc. & JV Inc/(loss) (3) 0 0 0 0
(Pft)/ Loss on disposal of FAs 0 0 0 0 0
Chg in Wkg.Cap. 262 1,352 (2,331) (102) (103)
Other Operating CF 8 (903) 0 0 0
Net Operating CF 4,271 4,690 1,507 2,899 2,658
Capital Exp.(net) (866) (3,153) (1,956) (2,146) (2,146)
Other Invts.(net) 0 0 0 0 0
Invts in Assoc. & JV 0 0 0 0 0
Div from Assoc & JV 0 0 0 0 0
Other Investing CF 322 (63) 0 0 0
Net Investing CF (545) (3,215) (1,956) (2,146) (2,146)
Div Paid (1,040) (1,149) (972) (624) (507)
Chg in Gross Debt (5,804) (93) 500 0 0
Capital Issues 0 0 0 0 0
Other Financing CF 0 49 0 0 1
Net Financing CF (6,642) (1,234) (472) (624) (507)
Currency Adjustments 0 (49) 0 0 0
Chg in Cash (2,916) 191 (921) 129 6
Opg CFPS (RMB) 0.93 0.77 0.89 0.69 0.64
Free CFPS (RMB) 0.79 0.36 (0.10) 0.17 0.12

Source: Company, DBS HK

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Beijing Capital Intl Airport

Target Price & Ratings History

HK$ S.No. Dat e Closing 12- mt h Rat ing

10.0 Price T arget
9.5 Price
9.0 1: 31-Aug-18 HK$9.08 HK$12.50 Buy
2: 8-J an-19 HK$6.36 HK$11.10 Buy
8.5
8.0 1
7.5
7.0
6.5
6.0 2
5.5
5.0
Dec-18

Mar-19

Jun-19
Sep-18

Apr-19

May-19
Nov-18

Jan-19

Jul-19
Feb-19
Aug-18

Oct-18

Aug-19

Source: DBS HK Aug-19

Analyst: Paul YONG, CFA

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Beijing Capital Intl Airport

^ Bloomberg ESG Disclosure Scores rate companies annually based on their disclosure of quantitative and policy-related ESG data. It is based on a
scoring scale of 0-100, and calculated using a subset of more than 100 raw data points it collects on ESG. It is designed to measure the robustness
of companies' disclosure of ESG information in their reporting/the public domain. Based on Bloomberg disclosures, as of 25 Jan 2019, the global
ESG disclosure average score is 24.92 and 22.14, 28.26, 49.97 for Environmental, Social and Governance, respectively.
DBS HK recommendations are based on an Absolute Total Return* Rating system, defined as follows:
STRONG BUY (>20% total return over the next 3 months, with identifiable share price catalysts within this time frame)
BUY (>15% total return over the next 12 months for small caps, >10% for large caps)
HOLD (-10% to +15% total return over the next 12 months for small caps, -10% to +10% for large caps)
FULLY VALUED (negative total return, i.e., > -10% over the next 12 months)
SELL (negative total return of > -20% over the next 3 months, with identifiable share price catalysts within this time frame)

*Share price appreciation + dividends

Completed Date: 2 Sep 2019 07:30:45 (HKT)
Dissemination Date: 2 Sep 2019 09:38:58 (HKT)
Sources for all charts and tables are DBS HK unless otherwise specified.
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This report is prepared by DBS Bank (Hong Kong) Limited (“DBS HK”). This report is solely intended for the clients of DBS Bank Ltd., DBS HK, DBS
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The research set out in this report is based on information obtained from sources believed to be reliable, but we (which collectively refers to DBS
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has not participated in any public offering of securities as a manager or co-manager or in any other investment banking transaction in the past
twelve months and does not engage in market-making.

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Beijing Capital Intl Airport

ANALYST CERTIFICATION
The research analyst(s) primarily responsible for the content of this research report, in part or in whole, certifies that the views about the
companies and their securities expressed in this report accurately reflect his/her personal views. The analyst(s) also certifies that no part of his/her
compensation was, is, or will be, directly or indirectly, related to specific recommendations or views expressed in the report. The research analyst (s)
primarily responsible for the content of this research report, in part or in whole, certifies that he or his associate 1 does not serve as an officer of
the issuer or the new listing applicant (which includes in the case of a real estate investment trust, an officer of the management company of the
real estate investment trust; and in the case of any other entity, an officer or its equivalent counterparty of the entity who is responsible for the
management of the issuer or the new listing applicant) and the research analyst(s) primarily responsible for the content of this research report or
his associate does not have financial interests2 in relation to an issuer or a new listing applicant that the analyst reviews. DBS Group has
procedures in place to eliminate, avoid and manage any potential conflicts of interests that may arise in connection with the production of
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COMPANY-SPECIFIC / REGULATORY DISCLOSURES

1. DBS Bank Ltd, DBS HK, DBSVS or their subsidiaries and/or other affiliates have a proprietary position in Beijing Capital International
Airport Co Ltd (694 HK) recommended in this report as of 28 Aug 2019.

2. Neither DBS Bank Ltd nor DBS HK market makes in equity securities of the issuer(s) or company(ies) mentioned in this Research
Report.

3. Compensation for investment banking services:

DBSVUSA does not have its own investment banking or research department, nor has it participated in any public offering of securities
as a manager or co-manager or in any other investment banking transaction 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 document should contact DBSVUSA exclusively.

4. Disclosure of previous investment recommendation produced:

DBS Bank Ltd, DBSVS, DBS HK, their subsidiaries and/or other affiliates of DBSVUSA may have published other investment
recommendations in respect of the same securities / instruments recommended in this research report during the preceding 12
months. Please contact the primary analyst listed in the first page of this report to view previous investment recommendations
published by DBS Bank Ltd, DBS HK, DBSVS, their subsidiaries and/or other affiliates of DBSVUSA in the preceding 12 months.

1
An associate is defined as (i) the spouse, or any minor child (natural or adopted) or minor step-child, of the analyst; (ii) the trustee of a trust of
which the analyst, his spouse, minor child (natural or adopted) or minor step-child, is a beneficiary or discretionary object; or (iii) another person
accustomed or obliged to act in accordance with the directions or instructions of the analyst.
2
Financial interest is defined as interests that are commonly known financial interest, such as investment in the securities in respect of an issuer or a
new listing applicant, or financial accommodation arrangement between the issuer or the new listing applicant and the firm or analysis. This term
does not include commercial lending conducted at arm's length, or investments in any collective investment scheme other than an issuer or new
listing applicant notwithstanding the fact that the scheme has investments in securities in respect of an issuer or a new listing applicant.

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RESTRICTIONS ON DISTRIBUTION
General This report is not directed to, or intended for distribution to or use by, any person or entity who is a citizen or resident of or
located in any locality, state, country or other jurisdiction where such distribution, publication, availability or use would be
contrary to law or regulation.
Australia This report is being distributed in Australia by DBS Bank Ltd, DBSVS or DBSV HK. DBS Bank Ltd holds Australian Financial
Services Licence no. 475946.
DBSVS and DBSV HK are exempted from the requirement to hold an Australian Financial Services Licence under the
Corporation Act 2001 (“CA”) in respect of financial services provided to the recipients. Both DBS Bank Ltd and DBSVS are
regulated by the Monetary Authority of Singapore under the laws of Singapore, and DBSV HK is regulated by the Hong
Kong Securities and Futures Commission under the laws of Hong Kong, which differ from Australian laws.
Distribution of this report is intended only for “wholesale investors” within the meaning of the CA.

Hong Kong This report is being distributed in Hong Kong by DBS Bank Ltd, DBS Bank (Hong Kong) Limited and DBS Vickers (Hong Kong)
Limited, all of which are registered with or licensed by the Hong Kong Securities and Futures Commission to carry out the
regulated activity of advising on securities.

Indonesia This report is being distributed in Indonesia by PT DBS Vickers Sekuritas Indonesia.
Malaysia This report is distributed in Malaysia by AllianceDBS Research Sdn Bhd ("ADBSR"). Recipients of this report, received from
ADBSR are to contact the undersigned at 603-2604 3333 in respect of any matters arising from or in connection with this
report. In addition to the General Disclosure/Disclaimer found at the preceding page, recipients of this report are advised
that ADBSR (the preparer of this report), its holding company Alliance Investment Bank Berhad, their respective connected
and associated corporations, affiliates, their directors, officers, employees, agents and parties related or associated with any
of them may have positions in, and may effect transactions in the securities mentioned herein and may also perform or seek
to perform broking, investment banking/corporate advisory and other services for the subject companies. They may also
have received compensation and/or seek to obtain compensation for broking, investment banking/corporate advisory and
other services from the subject companies.

Wong Ming Tek, Executive Director, ADBSR

Singapore This report is distributed in Singapore by DBS Bank Ltd (Company Regn. No. 196800306E) or DBSVS (Company Regn No.
198600294G), both of which are Exempt Financial Advisers as defined in the Financial Advisers Act and regulated by the
Monetary Authority of Singapore. DBS Bank Ltd and/or DBSVS, may distribute reports produced by its respective foreign
entities, affiliates or other foreign research houses pursuant to an arrangement under Regulation 32C of the Financial
Advisers Regulations. Where the report is distributed in Singapore to a person who is not an Accredited Investor, Expert
Investor or an Institutional Investor, DBS Bank Ltd accepts legal responsibility for the contents of the report to such persons
only to the extent required by law. Singapore recipients should contact DBS Bank Ltd at 6327 2288 for matters arising from,
or in connection with the report.
Thailand This report is being distributed in Thailand by DBS Vickers Securities (Thailand) Co Ltd.
United This report is produced by DBS HK which is regulated by the Hong Kong Monetary Authority
Kingdom This report is disseminated in the United Kingdom by DBS Vickers Securities (UK) Ltd (“DBSVUK”). DBSVUK is authorised
and regulated by the Financial Conduct Authority in the United Kingdom.
In respect of the United Kingdom, this report is solely intended for the clients of DBSVUK, its respective connected and
associated corporations and affiliates only and no part of this document may be (i) copied, photocopied or duplicated in any
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relating to investments should not rely on this communication.
Dubai This research report is being distributed by DBS Bank Ltd., (DIFC Branch) having its office at units 608-610, 6th Floor, Gate
International Precinct Building 5, PO Box 506538, Dubai International Financial Centre (DIFC), Dubai, United Arab Emirates. DBS Bank
Financial Ltd., (DIFC Branch) is regulated by The Dubai Financial Services Authority. This research report is intended only for
Centre professional clients (as defined in the DFSA rulebook) and no other person may act upon it.

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United Arab This report is provided by DBS Bank Ltd (Company Regn. No. 196800306E) which is an Exempt Financial Adviser as defined
Emirates in the Financial Advisers Act and regulated by the Monetary Authority of Singapore. This report is for information purposes
only and should not be relied upon or acted on by the recipient or considered as a solicitation or inducement to buy or sell
any financial product. It does not constitute a personal recommendation or take into account the particular investment
objectives, financial situation, or needs of individual clients. You should contact your relationship manager or investment
adviser if you need advice on the merits of buying, selling or holding a particular investment. You should note that the
information in this report may be out of date and it is not represented or warranted to be accurate, timely or complete. This
report or any portion thereof may not be reprinted, sold or redistributed without our written consent.
United States This report was prepared by DBS HK. DBSVUSA did not participate in its preparation. The research analyst(s) named on this
report are not registered as research analysts with FINRA and are not associated persons of DBSVUSA. The research
analyst(s) are not subject to FINRA Rule 2241 restrictions on analyst compensation, communications with a subject company,
public appearances and trading securities held by a research analyst. This report is being distributed in the United States by
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contact DBSVUSA directly and not its affiliate.
Other In any other jurisdictions, except if otherwise restricted by laws or regulations, this report is intended only for qualified,
jurisdictions professional, institutional or sophisticated investors as defined in the laws and regulations of such jurisdictions.
DBS Bank (Hong Kong) Limited
13 th Floor One Island East, 18 Westlands Road, Quarry Bay, Hong Kong
Tel: (852) 3668-4181, Fax: (852) 2521-1812

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DBS Regional Research Offices

HONG KONG MALAYSIA SINGAPORE

DBS Bank (Hong Kong) Ltd AllianceDBS Research Sdn Bhd DBS Bank Ltd
Contact: Carol Wu Contact: Wong Ming Tek (128540 U) Contact: Janice Chua
13th Floor One Island East, 19th Floor, Menara Multi-Purpose, 12 Marina Boulevard,
18 Westlands Road, Capital Square, Marina Bay Financial Centre Tower 3
Quarry Bay, Hong Kong 8 Jalan Munshi Abdullah 50100 Singapore 018982
Tel: 852 3668 4181 Kuala Lumpur, Malaysia. Tel: 65 6878 8888
Fax: 852 2521 1812 Tel.: 603 2604 3333 Fax: 65 65353 418
e-mail: [email protected] Fax: 603 2604 3921 e-mail: [email protected]
e-mail: [email protected] Company Regn. No. 196800306E

INDONESIA THAILAND
PT DBS Vickers Sekuritas (Indonesia) DBS Vickers Securities (Thailand) Co Ltd
Contact: Maynard Priajaya Arif Contact: Chanpen Sirithanarattanakul
DBS Bank Tower 989 Siam Piwat Tower Building,
Ciputra World 1, 32/F 9th, 14th-15th Floor
Jl. Prof. Dr. Satrio Kav. 3-5 Rama 1 Road, Pathumwan,
Jakarta 12940, Indonesia Bangkok Thailand 10330
Tel: 62 21 3003 4900 Tel. 66 2 857 7831
Fax: 6221 3003 4943 Fax: 66 2 658 1269
e-mail: [email protected] e-mail: [email protected]
Company Regn. No 0105539127012
Securities and Exchange Commission, Thailand

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