2013-3-12 Kim Eng Courts Initiation v4 Ed1

8/22/2019 2013-3-12 Kim Eng Courts Initiation v4 Ed1

1/28SEE APPENDIX I FOR IMPORTANT DI

Initiating Coverage

Buy(initiation)Share price: SGD0.91Target price: SGD1.49

Alison [email protected](65) 6432 1447

Stock Information

Description: A leading electrical and IT products as well asfurniture retailer in Singapore and Malaysia. It will make itsdebut in Indonesia in 2014 with the opening of its largest-everstore in Jakarta.

Ticker: COURTS SPShares Issued (m): 560.0Market Cap (USD m): 407.93-mth Avg Daily Turnover (USD m): 0.5ST Index: 3,293.0

Free float (%): 43.3

Major Shareholders:Singapore Retail Asia 68.2CEO Terence Connor 2.3

Key Indicators

ROE annualised (%) 13.9Net debt (SGD m): 145.8NTA/shr (SGD): 0.492Interest cover (x): 17.3

Historical Chart

Performance:

52-week High/Low SGD0.955/SGD0.655

1-mth 3-mth 6-mth 1-yr YTD

Absolute (%) -8.5 5.2 na na 5.2

Relative (%) -9.2 -0.4 na na 1.2

SCLOSURES AND ANALYST CERTIFICATI

Courts AsiaIll See You In Courts!Reincarnated High Prince of Retailers. CoCourts Singapore and Courts Malaysia, two swere privatised in 2007-2009 following theshareholder. Bought out by private investors,closed, its credit facility strengthened and prteams aligned, and relisted in 2012, Courts Asiconsumption story in Malaysia, Singapore anconsumer financier has been buttressed andboth customers and investors. Your Honour, Cof SGD1.49 for upside of 63.7%.

Courting the ASEAN big spenders. If ASEAamong the top 10 economies in the world. Itsevery day by large young populations salivatimost fashionable sofa. The biggest retailer offurniture in Singapore, No. 2 in Malaysia and sa direct play on this story. It has 59 storesSingapore with 1m sq ft of space. By 2014,Jakarta, Indonesia.

Financing the retail masses for a fat marginfinancing facility, offered for up to 60 months22% annually, adds additional margin allure foit to enjoy much higher margins than competitproviders. Via an innovative asset securitisatiloans, Courts is able to tap into cheap fundin

stream and earn a lucrative spread. Bad derigorous credit screening.

Growing through new stores, new marketsfew years earnings growth of 14-15% annuaopenings in Malaysia (adding six stores a yearSingapore to eke out higher revenue per squarCourts is ultra bullish on Indonesia. By 2014largest store throughout its regional networksuburb.

Valuations too cheap for this prince of retposition and sustainable growth model, Courtsfirst non-underwriter syndicate to cover Courhighest on the street, based on 16.4x FY3/14

best in Singapore for consumer products distrthan highly-priced regional retailers in higIndonesia, Thailand and the Philippines, we woon re-rating once investors warm to this prince

Courts Asia Summary Earnings TableFYE Mar (SGD m) 2011 201Revenue 674.1 724EBITDA 47.6 70

Recurring Net Profit 32.2 39Recurring Basic EPS (cents) 5.8 7EPS growth (%) 112.1 22

DPS (cents) 8.5 25

PER 15.6 12

EV/EBITDA (x) 12.4 9

Div Yield (%) 9.4 28P/BV(x) 2.2 2Net Gearing (%) 35.9% 65.2ROE (%) 13.8% 18.0ROA (%) 6.3% 7.0Consensus Net Profit (SGD m)

NS

12 March 2013

SingaporeCo. Reg No: 198700034E

MICA (P) : 099/03/2012

rts Asia is the reincarnation ofeparately listed companies that

bankruptcy of its controllingits loss-making Thai operationseviously-separate managementa is a direct play on the ASEANsoon, Indonesia. The angle of

remains a key selling point forurts is a BUY with a target price

N were a country, it would rankconsumption story is played outg for the latest gadget and theelectrical and IT products andon, Indonesia as well, Courts isin Malaysia and 13 stores in

it will open its largest outlet in

. Courts unique in-house creditand at interest rates exceedinginvestors, as this facility allowsrs that rely on third-party creditn programme for its consumerto grow this non-retail income

bt risks are controlled through

nd higher efficiency. The nextlly will be driven by new store) and by improving efficiency infoot of retail space. In addition,

, it will have opened its singlein Indonesias most populated

ilers. For its market leadershipis too cheap in our view. As thets, our TP of SGD1.49 is the

earnings, and on par with the

ibutors. Though still 20% lowerh consumption countries likeld not discount a rapid catch-upf retailers.

2 2013F 2014F 2015F.2 783.1 913.0 1063.1

.3 76.3 89.2 100.5

.4 42.4 50.9 58.2

.0 7.6 9.1 10.4

.2 7.7 20.0 14.3

.9 2.3 2.7 3.1

.8 11.9 9.9 8.7

.2 8.5 7.6 6.8

.8 2.5 3.0 3.5

.3 1.8 1.8 1.7

% 52.7% 61.7% 60.5%

% 15.4% 18.1% 19.9%

% 6.5% 7.5% 7.7%41.6 49.4 57.0


2/2812 March 2013

Investment merits

Initiate Courts Asia with a BUY. Our tar

63.7% upside from the current share price

of strong consumer consumption trends i

Singapore, Malaysia and by next year,

between 2007 and 2009 and relisted in 20up, restructured and ready for consumpti

proxy to ride ASEAN consumption growt

earnings compared to the superhea

consumption plays in Indonesia, Thailand

Macro stars aligned. The Singapore

population number of 6.9m by 2030 (up

from 5m now). To support the governme

Development Board (HDB), the public hou

the supply tap to accommodate young sta

prime beneficiary of the demand for furnitu

reeling consumers in with its in-house crexperiencing rising household income, a

forecast to grow at a CAGR of 7.6% from 2

Revamped, restructured and cleared

(under separate listings in Singapore and

mismanaged credit facility and misalign

which created large spikes in bad debt,

Malaysia. Following privatisation, Courts

rate down to all-time lows and the two

have been aggregated under one manag

relisted in 2012 and now boasts the high

its competitors, with concrete plans to retur

Bred for fast expansion and keen co

asset-light balance sheet. Despite fast e

capital costs down via supplier rebates for

store openings (up to 60% of relevant ca

for promotions and marketing materials o

through Courts. Courts also boasts a com

Singapore stores have a Price Promi

competitors pricing and refund customers i

Initiate with BUY and target price of S

position as the largest retailer of furnitu

Singapore, and it is the second largest

obviously robust growth prospects in A

equipped for expansion, Courts is on the

as a top regional retailer. Despite an upsid

SGD1.49 is based on 16.4x FY3/14F, stil

20% discount to regional retailers.

Page 2 of 28

Courts Asia

et price of SGD1.49 implies

. Courts Asia is a beneficiary

its key ASEAN markets of

Indonesia as well. Delisted

12, Courts has been cleanedn by investors looking for a

h but trading at just 10-12x

ed 20-30x valuations of

nd Philippines.

government is targeting a

1.91% on average annually

nts target, the Housing and

sing authority, has turned on

rter families. Courts will be a

re and electrical accessories,

edit facility. Malaysia is alsod consumer expenditure is

012 to 2016.

o go. The previous Courts

alaysia) was the victim of a

ed management incentives,

especially in Indonesia and

has brought its delinquency

eparately-managed markets

ement. Ready to go, it was

st operating margins among

n to Indonesia.

mpetition. Courts holds an

xpansion, it is able to keep

new refurbishments and new

ex). The suppliers also pay

their products that are sold

petitive business model. The

se where they will match

if they can find a better deal.

D1.49. Courts has the pole

e and household fittings in

in Malaysia. With clear and

EAN, and a balance sheet

arpath to secure its position

e of 63.7% our target price of

l conservatively pegged to a


3/2812 March 2013

Figure 1: Peer comparison

Ticker Name

Singapore consumer branded retailers

DFI SP Dairy Farm IntlEYSAN SP Eu Yan SangSSG SP Sheng SiongPRA SP Parkson Retail AsiaOSIM SP Osim InternationalSUPER SP Super GroupCHLG SP Challenger Tech

Credit servicesAEONTS TB Aeon Thana Sinsap900 HK Aeon Credit Service AsiaACSM MK Aeon Credit Service M

Regional department stores/ retailersPRA SP Parkson Retail AsiaISET SP Isetan Singapore

ROBINS TB Robinson Department

RALS IJRamayana LestariSentosa

AEON MK Aeon Co (M)HMPRO TB Home Product CenterCPALL TB Cp AllMAPI IJ Mitra Adiperkasa TbkACES IJ Ace Hardware

Regional supermarketsSSG SP Sheng SiongMAKRO TB Siam MakroPM TB Premier MarketingAMRT IJ Sumber Alfaria TrijayaHERO IJ Hero SupermarketDFI SP Dairy Farm Intl Hldgs

BIGC TB Big C Supercenter

COURTS SP Courts Asia Ltd

Source: Bloomberg

Valuations

Of its listed peers in Singapore, Challenger

to Courts. But we are also taking a m

considering its peers, as Courts is focus

Regional retailers, typically department

average of 20.5x FY13F PER, while local r18.4x FY13F PER. We have also taken i

financiers, AEON, which is trading at 13.

Courts deserves to be valued closer to th

growing market position in ASEAN and

price is pegged at a 20% discount to reg

16.4x FY3/14F PER.

Mkt Cap(SGD m)

Last price(SGD m)

EPSGrowth

(%)Hist. P/E

(x)F

20,707.9 15.333 -7.1 37.6267.8 0.605 -35.7 14.0857.8 0.620 36.2 20.8

1,043.0 1.540 19.3 22.21,345.9 1.850 16.4 15.32,102.0 3.770 27.7 27.2

167.4 0.485 3.5 10.63,784.5 3.458 8.6 21.1

1,065.8 4.3 -83.9 75.0569.6 1.4 19.5 11.3727.9 5.1 50.7 14.5787.8 3.6 -4.6 33.6

1,043.0 1.540 19.3 22.2202.1 4.900 -21.6 20.9

3,697.2 3.329 42.0 41.8

1,206.6 0.170 6.2 23.11,858.6 5.295 7.3 21.84,880.1 0.693 34.1 49.4

17,639.8 1.964 38.2 38.81,635.8 0.985 79.3 32.21,745.2 0.102 66.8 37.43,767.6 2.109 30.2 32.0

857.8 0.620 36.2 20.85,504.2 22.934 36.6 34.8

242.5 0.405 41.7 15.03,160.8 0.837 41.0 52.32,142.9 0.651 10.8 56.1

20,707.9 15.333 -7.1 37.6

7,554.4 9.157 13.8 29.45,738.6 7.134 24.7 35.1

509.6 0.910 22.2 12.8

Page 3 of 28

Courts Asia

is the most direct competitor

re regional approach when

d on expanding in ASEAN.

stores, are trading at an

etailers are trading at a lowernto account consumer credit

0x forward P/E. We believe

e regional retailers given its

uperior margins. Our target

ional retailers, which implies

rwardP/E (x) P/B (x) ROE (%)

25.6 14.2 42.618.3 2.2 16.019.4 5.7 27.815.6 4.4 25.212.5 6.7 48.119.3 5.4 20.6

3.9 42.318.4 6.1 31.8

14.6 3.9 5.11.7 15.2

11.5 4.6 35.213.0 3.4 18.5

15.6 4.4 25.20.0 1.0 5.3

26.4 8.6 21.9

18.6 3.2 14.519.0 3.2 15.427.9 11.7 29.826.3 16.0 45.722.2 6.4 21.928.9 9.5 28.320.5 7.1 23.1

19.4 5.7 27.826.4 11.6 35.010.6 4.6 34.633.4 8.5 21.435.3 10.2 19.725.6 14.2 42.6

20.6 5.7 21.924.5 8.6 29.0

10.3 2.3 17.4


4/2812 March 2013

Figure 2: Shareho

Source: IPO Prospectus*JF Asset Management,

Institutional invest(13.75%)

Courts 1.0 The Grande Dame

New kid on the block? Hardly! Co

Mammoth (Malaysia) were separately liste

and 2000, respectively. The controlling s

plc, a UK-based company which went into

led to a long-drawn-out process in the breThe two Courts operations in Singapo

Indonesia were sold to a group of privat

Equity Asia III and Topaz Investment

SGD221m between 2007 and 2009.

The current owners. Asia Retail Group

Barings Private Equity Asia III (BPEA) a

Investment, a Middle Eastern fund, curren

Courts Asia. BPEA is a private equity

management. It specialises in mid-market

for expansion, recapitalisation and acquisiti

lding structure

New Silk Road Investment, Target Asset Management, Valu

Fraught with problems. Prior to deli

difficulties, chief of which was a rigid

encouraged short-term profit-driven strate

shored up by a deficient credit infrastruc

synchronisation between countries. Moscredit control facility and the company sub

debts spiked during the financial downturn

Revamp of operations.After both comp

overhauled its credit facilities and operati

matter of five years.

Barings Private Equity AsiaBPEA 67.2%

Topaz Inv32.

Asia Retail Group(100%)

Singapore RetGroup(68.2%

Public(15.45%)

Courts Asia Limited(Singapore)

rs*

Page 4 of 28

Courts Asia

rts Singapore and Courts

d on two exchanges in 1992

hareholder then was Courts

administration in 2004. This

kup of Courts global empire.re, Malaysia, Thailand and

e investors, Barings Private

Worldwide, for a total of

, which is 67.2% owned by

nd 32.8% owned by Topaz

ly holds the majority stake in

fund with USD5b under its

companies requiring capital

ions.

e Partners Hong Kong

ting, Courts faced several

management structure that

ies. This led to growth being

ture and a lack of strategic

importantly, there was nosequently suffered when bad

in 2008.

nies were privatised, Courts

ns, and revamped itself in a

estment%

il)

Management(2.6%)


5/2812 March 2013

Courts 2.0 The Fresh Prince

Centralised management structur

management teams in each country m

strategies for regional expansion efforts.

the management structure to ensure co

business segments on a cross-countryOConnor, the previous Singapore CEO

Singapore since 1993, as the CEO in ch

well as Ms Kee Kim Eng as the chief fin

hired Mr Chan Yuen Kiong as credit direc

facility. Mr Chan previously worked with A

charge of credit function operations.

Closure of non-performing operations.

down operations in Thailand and Indo

operations in Singapore and Malaysia. It

stores in Malaysia but kept Malaysia as a

products to boost sales volume despite the

Figure 3: Courts in ASEAN since 1974

Source: IPO Prospectus

Redesigned credit facility. Inadequate

resulted in a sharp increase in bad debt

Thailand. Since delisting, Courts has over

in Singapore and Malaysia through (1) har

approvals, and (2) centralising and ininfrastructure in monitoring and collection

Improvement on operating efficiency.

chain, Courts has been able to achieve

and reduced transportation costs. It cu

warehousing and deliveries to DHL in

logistics are handled by SCS Logistic

Enterprise Resource Planning (ERP) sy

real-time changes are made to in-st

implementing this system in Malaysia by

incur capex of SGD1.5m, the system will

and allow uniform monitoring of cross-coun

Page 5 of 28

Courts Asia

. Previously, separate

de it difficult to coordinate

Now, Courts has centralised

hesion between the various

basis. It kept Mr Terencewho has been with Courts

rge of overall operations, as

ancial officer. Additionally, it

or to oversee regional credit

erican Express Malaysia, in

Post-delisting, Courts closed

esia to focus on its core

further closed or relocated

ore market, reintroducing IT

lower margins.

xternal party credit controls

in Malaysia, Indonesia and

auled its credit infrastructure

dening its approach to credit

ternalising its entire creditf credit.

By centralising the supply

etter inventory management

rently outsources its entire

Malaysia, while Singapore

. Courts has adopted the

tem in Singapore, whereby

re inventories. It will be

nd-FY3/14. Though this will

ynchronise overall efficiency

try operating processes.


6/2812 March 2013

Going The Expansionary Route

Focus on store expansion. Courts has

each countrys expansion strategy. We

average of 106,255 sq ft of store space pa

far, it is on track, having opened a total of

to open next quarter in Kedah, Malaysia.stores in Singapore and 59 stores in Malay

Figure 4: Number of stores on the rise

Source: IPO Prospectus, *2012- since IPO

Singapore improve store productivit

in Singapore are more limited due to land

the bulk of Courts earnings will continue t

as its base market, and management wi

productivity by optimising product mix, in

concepts and by continual refurbishmeincrease of 26,255 sq ft in store space o

and FY3/15F. Courts will open a new stor

in 1QFY3/14 and 3QFY3/14, respectively.

Malaysia focus on the suburbs. In M

focus on penetration of the suburbs in t

competition is lower and credit use mo

Courts have added stores in Jerteh,

Pahang, and will add one more store in

plans to open six new stores a year, we

average of 80,000 sq ft pa, after factoring

electronics distribution industry is more frwhich offers more room for growth in cre

open three new stores in Teluk Intan, Pera

9 11

4652

0

10

20

30

40

50

60

70

80

2010 2011

Singapore Ma

+8 +5

Page 6 of 28

Courts Asia

made its intention clear on

estimate it will open a net

between 2014 and 2015. So

six stores with one expected

In total, Courts will have 13sia by end-FY3/13.

. Retail growth opportunities

area limitations. We expect

be generated by Singapore

ill improve on existing store

crease the number of retail

nts. We have ascribed anaverage between FY3/14F

each in JEM and Westgate

laysia, Courts strategy is to

e Klang Valley area, where

re common. Since its IPO,

erengganu, and Mentakab,

Sungai Petani, Kedah. With

ave ascribed a conservative

in store closures. Malaysias

agmented than Singapores,it sales. Courts is slated to

n and Pontian in 1QFY3/14.

13 13

55 59

2012* By end FYMar13

laysia

+4


7/2812 March 2013

Renewed Foray Into Indonesia

Largest store in its regional network in

in Bekasi, eastern Jakarta, has been secu

in 2014. It will be its largest store in the re

addition to retail space, the store will

warehouse that will serve as a distribuopenings.

Not new to Indonesia. Although Court

previously profitable, management decide

to focus on developing its core operation

Indonesian sales also accounted for less

Now, with a fully developed in-house cre

the expertise developed in Singapore a

robust consumer consumption trends in In

The larger the better.In order to stay ass

discussions with developers in Jakartasubsequently lease the warehouse and

Megastore formats with retail space in exc

of saying that it is here to stay. With a ne

will be fully set to expand in Jakarta

average sale price per sq ft stands at S

30% discount to the industry ASP per sq f

We have also ascribed an addition of 15,0

the warehouse.

Figure 5: Courts will open its first store in Ind

Source: Google map

Page 7 of 28

Courts Asia

Indonesia. Courts first site

ed and is scheduled to open

ion at over 140,000 sq ft. In

also have a 100,000-sq-ft

tion centre for future store

Indonesian business was

to close down all operations

in Singapore and Malaysia.

than 5% of total sales then.

it facility, it intends to apply

d Malaysia to tap into the

onesia.

et-light, Courts is currently in

to build the facility, andstore space. It is eyeing

ess of 60,000 sq ft its way

warehouse in place, Courts

y 2014. Currently, industry

D250. We have ascribed a

oot given its large store size.

00 sq ft pa after the debut of

onesia at Bekasi, East Jakarta


8/2812 March 2013

Figure 6: Gross margin comparison

Source: Factset, Maybank KE

Figure 8: Net margin comparison


12.2% 11.9% 11

19.7% 20.2%

31.2% 30.4%

0%

5%

10%

15%

20%

25%

30%

35%

2010 2011

Challenger Best Denki Court

5.7%4.9% 4.

-10.8%

0.3%

2.6%

4.8%

-12%

-10%

-8%

-6%

-4%

-2%

0%

2%

4%

6%

2010 2011

Challenger Best Denki Cour

Charge It To My Credit Card

Superior margins. Courts EBITDA m

Challengers. We believe the wide differen

earned from its in-house credit facility as

No other direct competitors have an in-

usually opt for third-party services such acredit card companies.

Figure 7: Operating margin com


Figure 9: ROE trends


.6%

19.4%

32.0%

2012

s Asia

6.5%6.0

-1.5%

4.3%

-2%

0%

2%

4%

6%

8%

10%

2010

Challenger Best

.8%

0.2%

5.4%

2012

ts Asia

20.1%

2.4%

7.3%

-15%

-10%

-5%

0%

5%

10%

15%

20%

25%

2010

Challenger

Page 8 of 28

Courts Asia

rgin is 3.1ppt higher than

ce is due to service charges

well as economies of scale.

ouse credit facility, as they

s those offered by the major

parison

5.6%

2.0%

1.0%

6.0%

8.6%

2011 2012

Denki Courts Asia

17.6%17.4%

1.3%

-13.5%

13.8%

18.0%

2011 2012

est Denki Courts Asia


9/2812 March 2013

Figure 10: Singapore direct sales vs credi

Source: Company data, Maybank KE

Cash89%

Credit11%

Flexible in-house credit facility. Court

facility which provides a range of paymen

Plan in Singapore and Courts Flexi Cr

payments can be made up to 60 months

ranges from 11.6% to 27.9% pa, dependin

applicant.

Why is in-house credit facility better t

plan?Courts target audience for credit fa

cannot afford credit card loans or meet th

credit card sign-ups. Any tightening in nat

highly beneficial to Courts in-house credit

t, 9MFY3/13 Figure 11: Malaysia direct

Source: Company data, Maybank

Home Club loyalty programme. In addi

discounts on products and updates on p

members. Through the information collec

gauge the preferences of its customer bas

has more than 1.2m customers.

Figure 12: Product concepts

Service Concept

Countdown Corner Offers limited-time discounSleep Clinic Offers customers expert aDr. Digital Similar to Geek Squad of

offers customers a cservices.


Launch of eCourts. Courts Asia first l

shopping portal in Singapore, in October

on sale 7,000 products vs its smaller st

1,000 products. In 3QFY3/12, Courts reco

commerce sales, as it is starting from a lo

extended its offerings into Malaysia. Althou

to have a significant impact on our ear

through to FY3/15F, this strategy is in line

trends, which is moving into cyberspace.

Credit57%

Page 9 of 28

Courts Asias offers an in-house credit

t options under Courts Flexi

dit in Malaysia. Installment

and the annual interest rate

g on the qualifications of the

an credit card installment

ility is made up of those who

e minimum requirements for

ional credit measures will be

acility.

sales vs credit, 9MFY3/13

KE

tion, Courts offers exclusive

romotions to its Home Club

ted, it is also better able to

e. As of FY3/12, Courts Asia

s or promotion on productsvice on choices of bedBest Buy in the US, Dr. Digitalmprehensive IT consultation

unched eCourts, an online

012. The online website has

res which may carry below

rded a tripling in growth of e-

w base. In Jan 2013, Courts

gh we do not expect eCourts

ings estimates for FY3/13F

with most modern shopping

Cash43%


10/2812 March 2013

Figure 14: Snapshot of online websi

Source: Courts.com.sg, Maybank KE

igure 13: Brand offerings

ource: Maybank KE

te

Page 10 of 28

Courts Asia


11/2812 March 2013

Figure 15:

YE Mar

Singapore

Sale of goods

Sale of goods

Earned servic

Total net sale

Malaysia

Sale of goods

Sale of goodsEarned servic

Total net sale

Earned servic

Source: Com

Retail Consumer Financier

Monetising on in-house credit facili

margins have its vulnerabilities as they are

By internalizing its credit system, Courts is

between interest charged to its retail custo

its loan facilities. We estimate net interestWhile it does not report how much inter

earnings, it accounts for 16.5% of total sal

Breakdown of sales. Courts sales are

earned serviced charges. Sale of goods i

by customers, whilst the credit sales are d

credit purchases by customers.

Earned service charges. Service charg

which is made in installment over the ter

charges will only be recognised if it

progressively. Singapores credit sales acMalaysia accounts for 34% of sale of go

makes up 16.5% of overall net sales as of

reakdown of sales

2010 2011 2012

- cash 78.4% 83.6% 83.5%

- credit 12.5% 9.3% 8.5%

charges 9.2% 7.1% 8.0%

100.0% 100.0% 100.0%

- cash 21.6% 23.8% 25.1%

- credit 41.4% 43.8% 40.7%charges 37.0% 32.4% 34.1%

100.0% 100.0% 100.0%

charges 18.3% 15.4% 16.5%

any data, MKE estimates

Figure 16: Breakdown of gross margin


46.4% 48.6% 47.2

53.6% 51.4% 52.8

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2011 2012 2013

Singapore Malaysia

Page 11 of 28

Courts Asia

ty. Electronics distributors

price takers in the business.

able to collect the difference

ers and interest charged on

income to be 46.4% of PBT.st income contributes to its

s as of FY3/12.

split into sale of goods and

the direct purchases made

erived from principal paid via

es relate to the repayment

of facility, of which service

is paid for by customers

count for 8% of sales, whileds as of FY3/12. Overall, it

Y3/12.

2013E 2014E 2015E

83.3% 83.2% 83.2%

8.7% 8.7% 8.7%

8.0% 8.0% 8.0%

100.0% 100.0% 100.0%

26.5% 26.5% 26.5%

39.7% 39.7% 39.7%33.8% 33.8% 33.8%

100.0% 100.0% 100.0%

16.9% 17.2% 17.4%

46.2% 44.6%

53.8% 53.6%

2014 2015

Indonesia


12/2812 March 2013

Rapid payback of principal. For a 12-

principal will be fully repaid in 10 months

plan and 9 months under the SmartRent

can be fully repaid sooner the longer the

takes just 24 months for a 36-month Flexi

just 19 months for a SmartRental plan.

Figure 17: Estimated Flexi credit plan for a SSingapore Assuming an average annual EIR o

Loantenure(months)

Loanamount

Paymentper

monthTotal l

(principal+

36 3000 115 4,1224 3000 159 3,8012 3000 287 3,43

Malaysia Assuming an average annual EIR o

Loantenure(months)

Loanamount

Paymentper

monthTotal l

(principal+

36 3000 126 4,5224 3000 169 4,06

12 3000 297 3,56Source: KE estimate

Figure 18: SmartRental plan on a SGD1,000 iSmart RentalRates

EIR(%)

No. of month to paybaprincipal

48 months 19.836 months 21.5 124 months 23.7 112 months 26.4

Source: From Courts website tool, KE estimate

Page 12 of 28

Courts Asiaonth loan, we estimate that

nder the normal Flexi credit

plan. However, the principal

loan tenure. For example, it

credit plan to be repaid and

GD3,000/MYR3,000 loan22%

oaninterest)

Interestonly

Months toprincipalpayback

5 1,125 267 807 199 439 10

29%

oaninterest)

Interestonly

Months toprincipalpayback

6 1,526 243 1,063 18

3 563 10

temk Term within loan to take

back principal

2 46%9 53%5 64%9 77%


13/2812 March 2013

Hardened Approach To Credit Co

Rebuilding of credit infrastructure. Th

poorly designed credit infrastructure. Inad

a sharp jump in bad debts, especially

Thailand. This led to the eventual closureoperations. Courts has since overhaule

Singapore and Malaysia through (1) hard

approvals, and (2) centralising and in

infrastructure in the monitoring and collecti

Stringent procedures implemented. C

shortened its credit approval process by a

have a record of timely payments and

limits based on monthly salaries and o

around 84% and 68% of credit users are r

and Malaysia, respectively. For first-time

process will be drawn out. Consolidated dabasis to keep risk levels manageable.

Centralised credit system to monitor

currently has a Credit Management-Inf

supports both its Singapore and Malaysia

its credit system, it can synchronise its cre

in both countries, as well as detect signs

and pinpoint key credit performance ben

2012, delinquency rates fell from a high o

and from 4.4% to 3.2% in Singapore.

Figure 19: Delinquency rate (Top: Malaysia,


Page 13 of 28

Courts Asiallection

old Courts was a victim of

quate credit controls caused

in Malaysia, Indonesia and

f Thailands and Indonesiasits credit infrastructure in

ening its approach to credit

ternalising its entire credit

n of credit.

ourts has streamlined and

cepting only customers who

eet certain pre-determined

ther factors. As of FY3/12,

peat customers in Singapore

customers, a more detailed

ta is reviewed on a bi-annual

rise in bad debt. Courts

rmation-System (MIS) that

n operations. By centralising

it portfolio risk management

of credit deterioration early

chmark. Between 2010 and

f 15.4% to 9.6% in Malaysia

ottom: Singapore)


14/2812 March 2013

How Courts finances its credit fa

Asset-light balance sheet.Courts holds

where 68% of its total assets are held

inventories. Fixed assets only accounted f

all of its debt is tied to its in-house credit

revenue. Since IPO, it has held a low netCourts to utilize its funds progressively to

Indonesia operation begins.

Financed through loan securitisation.

facility by packaging its consumer credi

separate asset securitisation arrangement

with HSBC Bank in Singapore and a sy

(HSBC Bank, OCBC Bank and Hwa

Essentially, the credit receivables are s

Vehicle (SPV) called Assetrust in Singap

Bhd (VLSB) in Malaysia, and the banks

facilities backed by the cashflow from thes

For Singapore, Courts can draw down

receivables sold to Assetrust, with the am

dependent on the size and quality o

receivables are packaged into Senior, Me

monthly repayments are deposited into

and are made available to Courts as worki

the yields payable to the Senior and M

pays a fixed interest rate of 5.5% pa

Singapore SOR+spread on the balance. T

For Malaysia, the three banks have prLoan Facility of up to MYR350m (with a fi

amounts up to MYR265m and KLIBOR+sp

the same basis as the Singapore ar

Malaysian receivables must be rated AA

Malaysia (Singapore receivables do not ne

Quality of receivables matters. Trade r

AAA ratio to qualify before packaged i

Malaysia. Singapore receivables do not

subject to review. Inherently, there is cr

assumes 100% liability for the SPVs. Ho

stringent procedures which Courts have i

keep its delinquency rates low.

Collection of payments. For receivable

collect, it will first utilize field collection

agencies.If such methods are unsuccessf

the small claims tribunal. Even when the re

continues to pursue impairment losses.

How impairment losses are handled.

policy with the treatment of impairment l

gross receivables as of 3QYMar 2-13. Any

will be recorded under Other Income i

earnings.

Page 14 of 28

Courts Asiaility

an asset-light balance sheet,

in receivables and 11% in

or 3% of total assets. Almost

facility, which in turn drives

gearing of 0.59x. We expectset up its credit facility after

Courts finances its credit

t loan receivables into two

in Singapore and Malaysia,

dicate of banks in Malaysia

ngDBS Investment Bank).

old into a Special Purpose

re and Vista Lavender Sdn

ill provide Courts with credit

receivables.

up to 70% of the eligible

ount available for drawdown

f eligible receivables. The

zanine and Junior tranches,

central collections account

ng capital after deducting for

zzanine beneficiary. Courts

for the first SGD94m and

e program expires in 2017.

vided Courts with a Seniorxed interest rate of 6.6% for

read for the rest). It works on

angement except that the

by the Ratings Agency of

ed to be rated).

ceivables are rated at least

nto Senior Loan Facility in

need to be rated but are

edit risk involved as Courts

wever, we argue that highly

plemented will be enough to

which Courts is unable to

units or external collection

l, it may take legal action via

ceivable is written off, Courts

ourts has a 100% write-off

ss which averages 4.6% of

payment done after write-off

n the P&L, and will boost


15/2812 March 2013

Figure 20: Credit facility financing arr Asset

Country SingapType Packagi

Vehiclebe sold,70% of

Tenure5 yearsHow much can be drawn down? Depend

Effective rate of interest (%) 5.5%balance

Who bears the risk? CourtsSafety measures Packag

tranche

Credit rating Not nec

Source: IPO prospectus

Figure 21:

YE Mar

SingaporeAllowance foSGDmActual impaiMalaysiaAllowance foSGDmActual impai

Source: Com

ngementsecuritisation Program 2012 Senior Loan F

re Malaysiaing of receivables into Special Purpose(Assetrust) where eligible receivables can

, and capital can be drawn down for up tothe eligible receivables.

Senior Loancommitted by trevolving crediinto a fully-amo

from 2012 3 + 2 years froent on amount of eligible receivables Up to MYR350 a on first SGD94m, SOR+spread on 6.6% pa on fir

balanceCourts

d receivables packed into variouss.

1) Absoluteacquired

2) A debentcharge oCMB & V

3) Corporateowed und

4) Maintenaas consolthan 1.40during co

5) Main sharessary AAA by RAM R

elinquency losses

2010 2011

r impairment (%) 3.4% 3.5%4.9 5.0

rment loss (%) 3.1% 2.2%

r impairment (%) 10.5% 6.8%25.2 18.1

rment loss (%) 7.6% 6.1%

any data

Page 15 of 28

Courts Asiaacility

acility up to RM350m has beenhe lenders. First 3 years is under

facility, and by 4th year, it turnsrtising term loan facility.

2012mst MYR253m, KLIBOR+spread on

agreement to the receivablesy VLSB from CMB

ure creating a fixed and floatinger present and future assets ofSBguarantee by CMB for all liabilitiesr the loance of certain financial ratios, such

idated gearing ratio can't be moreduring revolving period, and 1.25xsolidated period

eholder ARG can't fall below 20%ating Service Berhad

012 9M11 9M12

.6% 2.8% 2.7%4.1 4.2 5.0

.7% 2.1% 2.0%

.6% 6.6% 5.7%19.9 19.9 17.8.1% 4.4% 4.2%


16/2812 March 2013

Figure 22

Sales bre

Singapore

Malaysia

Indonesia

% of saleSingapore

Malaysia

Indonesia

Sales per

Singapore

Malaysia

Indonesia

Growth (

Singapore

Malaysia

Singapor

Megastore

Superstor

Small-for

Malaysia

Megastore

Superstor

Small-for

GFA incr

Singapore

Malaysia

Indonesia

Total GF

Singapore

Malaysia

Indonesia

Total

Source: M

Earnings Projections

Net earnings CAGR of 13.9%.We expe

year sales and net earnings CAGR of 13.

Malaysias contribution looks set to inc

further into the Klang Valley suburbs, whe

In Indonesia, it will take some time beforeper sq ft sales, but we expect the IPO pro

solid credit infrastructure like that in Singa

key driver of Courts business model. In ti

the industrys sales growth.

: Sales assumptions per sq ft

2010 2011 2012

kdown

83.6 95.2 112.7

97.5 109.8 119.2

0.0 0.0 0.0

46.2% 46.4% 48.6%

53.8% 53.6% 51.4%

0.0% 0.0% 0.0%

100% 100% 100%

sq ft

913 972 1,092

171 192 194

)

6.5% 12.3%

12.8% 1.0%

SSSG (%)

11.6% 11.3%

store 6.0% 14.1%

at store -4.9% 1.8%

SSG (%)

-1.2% 1.9%

12.3% 0.7%

at store 31.1% 0.9%

ase (sq ft)

approx.

392,626*

811,069*

0

aybank KE estimates *Since IPO

Page 16 of 28

Courts Asia

t Courts will deliver a three-

7% and 13.9%, respectively.

ease as Courts penetrates

re credit sales are preferred.

it achieves industry averageceeds will be used to build a

ore and Malaysia as this is a

e, this will allow it to match

2013F 2014F 2015F

118.4 135.2 151.5

132.5 157.6 182.1

0.0 0.0 6.0

47.2% 46.2% 44.6%

52.8% 53.8% 53.6%

0.0% 0.0% 1.8%

100% 100% 100%

1,182 1,267 1,341

211 232 247

200

8.2% 7.3% 5.8%

8.8% 9.8% 6.3%

9.0% 7.0% 7.0%

8.0% 7.0% 6.0%

1.0% 2.0% 1.0%

8.0% 8.0% 8.0%

8.0% 7.0% 7.0%

7.0% 6.0% 6.0%

6,573* 27,509 25,000

36,000* 80,000 80,000

0* 0 140,000

42,573* 107,509 245,000

399,199 426,708 451,708

847,069 927,069 1,007,069

0 0 140,000


17/2812 March 2013

Figure 23: Quarterly resul

SalesCost of salesGross profitOther incomeDistribution and marketingAdministrativeFinanceProfit before taxTaxNet profit

EPS ( SG ct)Source: Company data, Mayb

ts

1Q12 2Q12 3Q12 4Q12 1Q13

171.0 191.4 178.7 183.0 194.0-116.7 -129.7 -124.1 -121.8 -135.5

54.3 61.8 54.5 61.3 58.50.8 0.8 1.7 2.2 0.9

-14.9 -16.4 -14.4 -13.1 -15.6-28.7 -27.2 -31.2 -29.0 -30.4-2.7 -4.8 -4.3 -2.7 -5.28.9 14.2 6.4 18.7 8.3

-1.0 -3.2 -1.3 -3.1 -1.67.8 10.9 5.1 15.6 6.7

1.39 1.95 0.91 2.78 1.20nk KE estimates *Forecast

Seasonality changes. The second and

strongest quarters due to the festival of

celebrations. We expect 4QFY3/13F t

seasonal strength. But there could be a sof a one-off corporate service agreemen

currency gains in 4QFY3/12. In FY3/12

strongest quarter for Courts, accounting f

We also expect continual improvement in

opened stores, especially the relaunch of

Page 17 of 28

Courts Asia2Q13 3Q13 4Q13*

215.8 195.5 177.8-142.4 -137.7 -116.5

73.3 57.8 61.30.8 3.4 0.7

-15.9 -16.3 -15.2-35.0 -33.1 -27.2-3.4 -4.4 -3.319.8 7.5 16.3-3.9 -1.3 -2.615.9 6.2 13.7

2.84 1.10 2.44

fourth quarters are Courts

Eid and Chinese New Year

post robust numbers on

all dip QoQ in the absencet charge paid by ARG and

, 4QFY3/12 should be the

r 40% of full-year earnings.

ame store sales for its newly

egastore in Tampines.


18/2812 March 2013

Financial Analysis

Margin trend. Courts margins have sho

between 2010 and 2012, thanks to increas

agreement charges and better managem

margin trend has remained highly stable a

expect gross margin to hold steady evenup in Malaysia and Indonesia, where credi

product mix is skewing towards electronic

Malaysia commands stronger gross ma

three-year average gross margin of 21.9

three-year average gross margin of 50

charges imposed on credit purchases in e

igure 24: Margin trend

ource: Company data, Maybank Kim Eng

Operating expenses. We expect operat

heading slightly up by 0.1-0.2ppts betw

labour and rental cost pressures, as wel

market. Courts has hired consultancy gr

2QFY3/13 and 3QFY3/13 to improve its

pressures, Courts current operating

undoubtedly superior to Challengers.

igure 25: SG&A ratio trend

ource: Company data, Maybank Kim Eng

31.2% 30.4% 32.0% 32

21.5% 21.0% 23.1% 2

51.0% 49.9% 50.5% 49.

10%

20%

30%

40%

50%

60%

2010 2011 2012 201

Gross profit margin Singapore gross mar

8.9%8.1% 8.1%

16.1% 16.0% 16.1%

6.0%

8.0%

10.0%

12.0%

14.0%

16.0%

18.0%

2011 2012 2013

Distribution and m exp

Page 18 of 28

Courts Asia

n progressive improvement

ed contributions from service

nt of operating costs. Gross

between 30% and 32%. We

s business expansion rampst use is more common, while

oods.

rgin.Singapore generated a

, as opposed to Malaysias

.5%. This includes service

ch country.

ing cost to maintain stable,

en 2013 and 2015 due to

l as penetration into a new

up Bain Company between

cost efficiency. Despite cost

argin spread of 5.5ppt is

.0% 32.2% 32.1%

3.1% 23.0% 23.0%

0% 48.5% 48.5%

3F 2014F 2015F

gin Malaysia gross margin

8.1% 8.2%

16.2% 16.2%

2014 2015

Admin exp


19/2812 March 2013

Salary structure.Courts relies on a low

salary structure to incentivise its worker

expect labour costs to increase, as Singa

on the rise, and Courts will be making its f

will require additional manpower. As of

employees in Singapore and 1,261 employ

Rental costs. Following a restructuring

Courts has rationalised its store footprint i

closing unprofitable ones and refurbishing

fails to achieve a certain percentage

existence will be reviewed. Small-sized

quickly as three months, while larger o

deliberation of up to 12 months.

Capital expenditure.We estimate Courts

of SGD10m over 2013-15 for its store e

regionally. We anticipate a small spike in

the warehouse in Indonesia.

No fixed dividend policy as yet. Cour

dividend policy. However, it plans to pay

FY3/13F and FY3/14F. We believe Court

dividend payout after FY3/14F, given its st

estimate FY3/14F dividend yield at 3%.

Figure 26: Dividend per share (SG cts) vs yield

Source: Company data, Maybank KE estimates

0.0

5.0

10.0

15.0

20.0

25.0

30.0

2010 2011 2012 2013

DPS Yiel

Page 19 of 28

Courts Asiaixed base, high commission

s to make more sales. We

pores foreign worker levy is

ray into a new market, which

nd-FY3/12, Courts has 695

ees in Malaysia.

xercise from 2009 to 2012,

Singapore and Malaysia by

r relocating others. If a store

f operational efficiency, its

outlets could be closed as

utlets would require further

will need an average capex

xpansion and refurbishment

2015 for the construction of

s does not have an official

out 30% of its net profit in

will be able to deliver 30%

ong operating cash flow. We

%)

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

35.0%

2014 2015

d (%)


20/2812 March 2013

Risks

Stakeholder to reduce its stake. Cou

Group, holds a 68.2% stake in Courts As

until April 15th2013, of which we are exp

their grip on Courts to free up liquidity.

share price pressure.

Credit risk from in-house credit facility

credit facility. During economic downtur

receivables may spike up and lead to hi

hence, bad debt write-offs. This may force

for higher interest rates or apply m

receivables to reduce their risk exposure.

detrimental to Courts earnings model.

Interest rate sensitivity. Courts has som

at variable rates with no fixed hedging.

Programme of Singapore, 10.9% of eligiblunder a variable interest rate scheme. In

RM253m, will be based on KIBOR and a s

Highly competitive landscape. Cou

competitive landscape where the sale pric

the same across the industry.

Rental risks. Courts strives to hold on

model, preferring to lease from landlords.

rental increases, depending on how well th

Page 20 of 28

Courts Asia

ts stakeholder, Asia Retail

ia. The lockup period will be

cting the investors to loosen

This may create temporary

. Courts relies heavily on its

ns, credit risk on its trade

igher delinquency rates and

lending banks to renegotiate

re stringent measures on

If this eventuates, it will be

borrowings, which are held

In the Asset Securitisation

receivables drawn down arealaysia, the remainder after

read.

ts operates in a highly

s of products are essentially

to an asset-light business

owever, this puts it at risk of

e economy is doing.


21/2812 March 2013

Figure 27: Electronic and IT offerings in C

Electrical roductsMajor white goods VisionRefrigerators/ freezer Television s

Washing machines Video playeAir conditioners Vision acceDryers

IT

Computers AccessoriDesktops MonitorsLaptops Keyboards

Peripherals

Source: IPO prospectus

Figure 28: Singapore sales mix as of FY3/

Source: Company data, Maybank KE

Electricalproducts

42%

IT Products35%

Furniture19%

Services4%

Business Overview

Company background.Courts Asia is on

and furniture product retailers in Singa

presence for more than 35 years in Singa

in Malaysia. As of 3QFY3/13, it has 55 sto

in Singapore, spanning more than 1m sq ft

Moving into electronics industry.Court

enter the IT industry in Malaysia in 200

volume. Electrical and IT products account

of FY3/12, while furniture accounted for 1

we expect sales contribution will contin

products, as ASEAN consumers become

urts

Small appliancesets Vacuum cleaners

rs, recorders Toasters & blenderssories Fans

Electric ironsCordless phones

s PhotographyDigital cameraCamcorders

(printer) Photographic accessories

12 Figure 29: Malaysia sales

Source: Company data, Mayban

ITProdu

24%

Furniture21%

Ser10

Page 21 of 28

Courts Asia

e of the leading electrical, IT

pore and Malaysia, with a

ore and more than 25 years

es in Malaysia and 13 stores

in total.

Asia made the move to re-

because of the high sales

ed for 76.9% of total sales as

9% of sales. Going forward,

e to come from electronic

ore technology conscious.

AudioHome theatre systems

AmplifiersSpeakersPortable audio equipment

MobileMobile phonesMobile accessoriesSmart phonesTablets

mix as of FY3/12

KE

Electricalproducts

45%

ts

ices%


22/2812 March 2013

Industry Overview

Largest player in Singapore. According

the electronics and furniture industries in

with the top five players accounting for on

in 2011. In Malaysia, they are even more

players accounting for only 24.8% in thlargest retailer in Singapore, taking 9.8

names in both countries would include

respectively 7.2% and 3.1% of market sh

and 1.6% of market share in Malaysia in 2

Figure 30: Singapore top five retailers by r

200

Courts (Singapore) 8.5Best Denki (Singapore) 7.6Pertama Holdings 7.0Challenger Technologies 4.4Ikano Pte. (Ikea) 3.0

Others 69.5 100Source: IPO Prospectus, Euromonitor International

Figure 31: Malaysia top five retailers by ret

200

Senheng Electric (KL) 7.0Courts Mammoth Sdn 5.8Elitetrax Marketing Sdn (HarveyNorman)

2.5

Ikano Corp Sdn (Ikea) 3.1Best Denki Malaysia 1.9Others 79.6

100Source: IPO Prospectus, Euromonitor International

Electronics market trend. The electroni

consumer confidence and spending, w

economic recovery. Demand for elec

consumers become more technologically

retailers must be careful in managing th

have no qualms about moving on to the l

Singapore, Challenger appears to be the c

it saw the largest jump in market share of

whereas Best Denki and Harvey Norm

Malaysia, Senheng registered the highes

2009 to 2011 by offering a strong custome

Furniture market trend. In the furnitur

Courts biggest competitor in both Sing

provides an integrated experience with an

area for children. The company grew a

Denki, which fell 7.6% between 2009 and

be opening its first store in Jakarta.

Retail space expanding. In general, retai

larger as consumers love the convenienc

same store. Retail space is expectedSingapore over 2012 to 2016, and by 0.

2012 and 2016.

Page 22 of 28

Courts Asia

to Euromonitor International,

Singapore are fragmented,

ly 33.1% of total market size

fragmented with the top five

same year. Courts is theof market share. Common

IKEA and Best Denki, with

are in Singapore, and 3.1%

11.

tail sales value

2010 2011

9.7% 9.8%7.5% 7.2%6.8% 6.7%5.3% 6.2%3.1% 3.1%

67.6% 66.9%100% 100%

ail sales value

2010 2011

8.1% 9.9%6.5% 7.0%3.0% 3.2%

3.2% 3.1%2.1% 1.6%

77.2% 75.2%

100% 100%

s market is highly driven by

ich grows in tandem with

tronics products rises as

savvy. However, this means

eir inventory as consumers

test and greatest product. In

ompetitor to watch out for, as

5% between 2009 and 2011,

n grew more modestly. In

t value CAGR of 21% from

experience.

e industry, IKEA would be

apore and Malaysia. IKEA

in-house restaurant and play

3.3% CAGR compared to

2011. In 2014, IKEA will also

il space is getting larger and

of finding everything in the

o grow at 0.3% CAGR in6% pa in Malaysia between


23/2812 March 2013

Management Structure

Mr Terence Donald OConnor, ExecutiveMr OConnor has been with Courts SingaManaging Director from 2000 to 2007, asome of its most difficult times. Mr OConn

April 2011. He is also the President ofSingapore.

Ms Kee Kim Eng,Executive Director andMs Kee has been with Courts Singapore sipositions of Deputy Managing Director, FiSecretary. She was appointed an Executivjoined the board of directors in May 2012years of experience in various public listerange of industries. She holds an ACCA quMr Jack Hennessy,Non-independent andMr Hennessy is the managing director of

which is the controlling stakeholder of Couof the Remuneration Committee, as well aPreviously, Mr Hennessy was a GenBuckeridge, an Australian private equityprofessor at INSEAD from 2006 to 2008,leveraged buyout.

Mr James Edward Friel,Chief OperatingMr Friel has been with the Courts family siway up the ranks from Electrical Buyingto Managing Director and CEO of Courts2008. He was appointed Chief Operating2011. Previously, he has held positions s

and Country Director in Courts Singapore.

Mr Chan Yuen Kiong, Regional Credit DirMr Chan was previously the Country ManServices at American Express (M) Sdn incharge of credit functions. SubsequentlyBusiness Controller, Head of BankcardOperations and Technology at CitibankCourts Malaysia since 2006 and wasDirector in April 2011.


Page 23 of 28

Courts Asia

Director and CEOore since 1993. He was thed led the company through

or was appointed the CEO in

the Institute of Advertising

FOnce 1996, holding concurrentance Director and Company

e Director in March 2010 and. Ms Kee has more than 25d companies from a diversealification.

Non-Executive DirectorBarings Private Equity Asia,

rts Asia. He is the Chairmanthe Nominating Committee.

eral Partner with Allen &firm, as well as an adjuncthere he taught a course on

fficerce 1997. He has worked hisirector at Courts (Mauritius),Malaysia between 2005 andfficer of Courts Asia in April

uch as Commercial Director

ectorager and Head of Consumer

Malaysia, where he was in, he has held positions asead Business, and Head oferhad. He has worked withappointed Regional Credit


24/2812 March 2013

PROFIT AND LOSS (SGD m)

FY Mar 2011 2012 2

Sales 674.1 724.2 7

Cost of goods sold (469.1) (492.2) (5

Gross profit 205.0 231.9 2

Operating expenses (168.0) (174.9) (1

Operating Profit 37.0 57.0

Other income 3.6 5.5

Net interest (10.9) (14.4) (1

Interest income 0.0 0.0

interest expense (10.9) (14.4) (1

Pretax income 29.7 48.1

Income taxes 2.5 (8.7)

Net profit 32.2 39.4

EBITDA 47.6 70.3

EPS (S cts) 5.8 7.0

CASH FLOW (SGD m)

FY Mar 2011 2012 2

Operating cash flow 25.4 6.5 (1

Operating profit 32.2 39.4

Depreciation & amortisation 7.0 7.8

Change in working capital (12.8) (47.8) (

Others (1.1) 7.2Investment cash flow (2.3) (0.5)

Net capex (7.4) (8.6) (1

Change in LT investment 5.1 8.1

Change in other assets 23.1 6.0 (

Cash flow after invt. (3.5) 2.5

Financing cash flow 0.0 0.0

Change in share capital 39.7 56.2

Net change in debt (17.1) (51.7) (1

Change in other LT liab. (26.1) (1.9) (1

Net cash flow 19.6 8.5

Source: Company, Maybank KE

BALANCE SHEET (SGD m)

13F 2014F 2015F FY Mar 201

83.1 913.0 1063.1 Total assets 510.

2.2) (620.2) (723.4) Current assets 289.

50.9 292.9 339.7 Cash & ST investment 57.

8.7) (220.0) (257.3) Inventories 59.

62.2 72.8 82.4 Accounts receivable 170.

5.9 7.3 8.5 Others 2.

6.3) (17.6) (19.5) Other assets 220.

0.0 0.0 0.0 LT investments 178.

6.3) (17.6) (19.5) Net fixed assets 15.

51.8 62.5 71.5 Others 26.

(9.4) (11.6) (13.2) Total liabilities 276.

42.4 50.9 58.2 Current liabilities 173.

76.3 89.2 100.5 Accounts payable 124.

7.6 9.1 10.4 ST borrowings 43.

Others 6.

Long-term liabilities 102.

Long-term debts 98.

Others 4.Shareholder's equity 233.

Paid-in capital 221.

Reserve 12.

KEY RATIOS

13F 2014F 2015F FY Mar 201

3.2) 14.2 48.3 Growth (% YoY)

42.4 50.9 58.2 Sales 16

8.1 9.1 9.6 Operating profit 75

6.7) (14.9) (26.5) EBITDA 41

(7.1) (31.0) 7.0 Net profit 779.0) (9.8) (14.6) EPS 112.

0.0) (10.2) (15.0) Profitability (%)

1.0 0.3 0.4 Gross margin 30.4

2.1) 4.4 33.7 Operating margin 5.5

47.5 (14.2) (11.2) EBITDA margin 7.1

43.5 0.0 0.0 Net margin 4.8

27.9 18.5 25.5 ROA 6.3

2.7) (15.3) (17.5) ROE 13.8

1.1) (17.4) (19.2) Stability

25.4 (9.9) 22.4 Gross debt/equity (%) 60.6

Net debt/equity (%) 35.9 Int. coverage (X)

Int. & ST debt coverage (X)

Cash flow int. coverage (X)

Cash flow int. & ST debt (X)

Current ratio (X) 1. Quick ratio (X) 1. Net cash/(debt) (SGD m) 84 Per share data (SGD)

EPS 5.

CFPS 3.

BVPS 41.

SPS 1.

EBITDA/share 8.

DPS 8.

Page 24 of 28

Courts Asia1 2012 2013F 2014F 2015F

.1 561.7 651.7 677.8 755.0

.9 308.8 372.6 377.7 430.9

.9 59.2 84.6 74.7 97.2

.7 66.6 73.0 82.3 97.1

.0 183.0 215.0 220.7 236.6

.4 0.0 0.0 0.0 0.0

.2 252.9 279.1 300.0 324.1

.8 208.5 232.4 251.7 269.8

.1 16.3 18.1 19.2 24.6

.3 28.1 28.6 29.1 29.7

.3 342.4 375.8 396.2 462.6

.4 201.5 147.0 167.3 196.1

.4 127.0 133.1 152.4 174.7

.0 66.5 5.5 6.1 12.2

.0 8.0 8.4 8.8 9.3

.8 140.9 228.7 228.9 266.5

.8 135.7 224.5 242.5 261.9

.0 5.2 4.2 (13.6) 4.6

.9 219.3 275.9 281.6 292.4

.1 221.1 270.4 270.4 270.4

.7 (1.8) 5.5 11.2 21.9

1 2012 2013F 2014F 2015F

.3 7.4 8.1 16.6 16.4

.7 53.9 9.1 17.1 13.1

.1 47.7 8.5 16.9 12.7

.7 22.2 7.7 20.0 14.3

.1 22.2 7.7 20.0 14.3

32.0% 32.0% 32.1% 32.0%

7.9% 7.9% 8.0% 7.8%

9.7% 9.7% 9.8% 9.5%

5.4% 5.4% 5.6% 5.5%

7.0% 6.5% 7.5% 7.7%

18.0% 15.4% 18.1% 19.9%

92.2% 83.4% 88.3% 93.7%

65.2% 52.7% 61.7% 60.5%

a na na na na

a na na na na

a na na na na

a na na na na

.7 1.5 2.5 2.3 2.2

.3 1.2 2.0 1.8 1.7

.0 143.0 145.5 173.9 176.9

.8 7.0 7.6 9.1 10.4

.5 1.5 4.5 (1.8) 4.0

.8 39.2 49.3 50.3 52.2

.2 1.3 1.4 1.6 1.9

.5 12.6 13.6 15.9 17.9

.5 25.9 2.3 2.7 3.1


25/2812 March 2013

REGIONALPKBASURegional Head, Research & Economics(65) 6432 1821 [email protected]

WONGChew Hann, CAActing Regional Head of Institutional Research(603) 2297 8686 [email protected]

ONGSeng YeowRegional Products & Planning(65) 6432 1453 [email protected]

MALAYSIAWONGChew Hann, CAHead of Research(603) 2297 8686 [email protected] Strategy Construction & InfrastructureDesmond CHNG, ACA(603) 2297 8680 [email protected] Banking - RegionalLIAWThong Jung(603) 2297 8688 [email protected] Oil & Gas Automotive ShippingONGChee Ting, CA(603) 2297 8678 [email protected] Plantations- RegionalMohshin AZIZ(603) 2297 8692 [email protected] Aviation PetrochemYINShao Yang, CPA(603) 2297 8916 [email protected] Gaming Regional MediaTAN CHI WEI, CFA(603) 2297 8690 [email protected] Power TelcosWONGWei Sum, CFA(603) 2297 8679 [email protected] Property & REITsLEEYen Ling(603) 2297 8691 [email protected] Building Materials Manufacturing Technology

LEECheng Hooi Head of [email protected] Technicals

HONG KONG / CHINATodd MARTINHead of Research

(852) 2268 0638 [email protected] Banking & FinanceIvan CHEUNG,CFA(852) 2268 0634 [email protected] HK Property IndustrialJacqueline KO,CFA(852) 2268 0633 [email protected] ConsumerAndy POON(852) 2268 0645 [email protected] Telecom & equipmentAlex YEUNG(852) 2268 0636 [email protected] IndustrialWarren LAU(852) 2268 0644 [email protected] Technology - RegionalKaren KWAN(852) 2268 0640 [email protected] China PropertyJeremy TAN(852) 2268 0635 [email protected] Gaming

INDIAJigar SHAHHead of Research(91) 22 6623 2601 [email protected] .in Oil & Gas Automobile CementAnubhav GUPTA(91) 22 6623 2605 [email protected] Metal & Mining Capital goods PropertyUrmil SHAH(91) 22 6623 2606 [email protected] Technology MediaVarun VARMA(91) 226623 2611 varun@maybank-ke .co.in Banking

ECON

Suhaimi ILIASChief Economist Singapore | Malaysia(603) 2297 8682 [email protected]

Luz LORENZO Philippines | Indonesia(63) 2 849 8836 luz_lorenzo@maybank-atrke.

Tim LEELAHAPHAN Thailand(662) 658 1420 [email protected]

SINGAPOREGregory YAP Head of Research(65) 6432 1450 [email protected] Technology & Manufacturing Telcos - RegionalWilson LIEW(65) 6432 1454 [email protected] Hotel & Resort Property & ConstructionJames KOH(65) 6432 1431 [email protected] Logistics Resources Consumer Small & Mid CapsYEAKChee Keong, CFA(65) 6432 1460 [email protected] Offshore & MarineAlison FOK(65) 6432 1447 [email protected] Services S-chipsBernard CHIN(65) 6432 1446 [email protected] Transport (Land, Shipping & Aviation)ONGKian Lin(65) 6432 1470 [email protected] REITs / PropertyWei Bin(65) 6432 1455 [email protected] S-chips Small & Mid Caps

INDONESIAKatarina SETIAWANHead of Research(62) 21 2557 1125 [email protected] Consumer Strategy TelcosLucky ARIESANDI,CFA(62) 21 2557 1127 [email protected] Base metals Mining Oil & Gas WholesaleRahmi MARINA(62) 21 2557 1128 [email protected] Banking MultifinancePandu ANUGRAH(62) 21 2557 1137 [email protected] Automotive Heavy equipment Plantation Toll roadAdi N. WICAKSONO(62) 21 2557 1128 [email protected] GeneralistAnthony YUNUS(62) 21 2557 1139 [email protected] Cement Infrastructure PropertyArwani PRANADJAYA (62) 21 2557 1129 [email protected] Technicals

PHILIPPINESLuz LORENZOHead of Research(63) 2 849 8836 [email protected] StrategyLaura DY-LIACCO(63) 2 849 8840 [email protected] Utilities Conglomerates TelcosLovell SARREAL(63) 2 849 8841 [email protected] Consumer Media CementKenneth NERECINA(63) 2 849 8839 kenneth_nerecina@maybank-at rke.com Conglomerates Property Ports/ LogisticsKatherine TAN(63) 2 849 8843 [email protected] Banks Construction

Ramon ADVIENTO(63) 2 849 8845 ramon_adviento@maybank-atrke .com Mining

Sukit UDOMSIRI(66) 2658 6300Sukit.u@mayba

Maria LAPIZ HeDir (66) 2257 02 |Maria.L@mayba Consumer/ i

Andrew STOTZ(66) 2658 6300Andrew@mayb

Mayuree CHOW(66) 2658 6300 Strategy

Suttatip PEERA(66) 2658 6300 i Media

CommerceSutthichai KUM(66) 2658 6300 i i Energy PetrochemTermporn TANT(66) 2658 6300 PropertyWoraphon WIR(66) 2658 6300 Banking & FiJaroonpan WA(66) 2658 6300 Transportati Small cap.Chatchai JIND(66) 2658 6300 ElectronicsPongrat RATAN(66) 2658 6300 Services/ S l l

Michael KOKAL(84) 838 38 66 4 i l l i StrategyNguyen Thi Ng(84) 844 55 58 8 Food and B Oil and GasNgo Bich Van(84) 844 55 58 8 BankingTrinh Thi Ngoc(84) 844 55 58 8 i i Technology Utilities ConstructioDang T hi Kim T(84) 844 55 58 8 ConsumerNguyen Trung+84 844 55 58 8 Steel Sugar Resources

Page 25 of 28

Courts Asia

OMICS

i m

om

THAILANDKUL Head of Researchxt 5090

nk-ke.co.th

ad of Institutional Researchi 50 | (66) 2658 6300 ext 1399

i nk-ke.co.thig Caps

Strategistxt 5091nk-ke.co.th

IKRANxt 1440 [email protected]

UBxt 1430 [email protected]

WORACHAIxt 1400 [email protected]

IVIVATxt 1520 [email protected]

ONSRIxt 1560 [email protected]

i inanceTANAWONGxt 1404 [email protected]

ion

RATxt 1401 [email protected]

TAVANANANDA xt 1398 [email protected]

i all Caps

VIETNAM

RI, CFAHead of Research7 [email protected]

n Tuyen8 x 8081 [email protected]

il

8 x 8084 [email protected]

Diep8 x 8242 [email protected]

i nhoa8 x 8083 [email protected]

Hoa8 x 8088 [email protected]


26/2812 March 2013

APPENDIX I: TERMS FOR PROVISION OF R

DISCLAIMERS

This research report is prepared for general circulation aoffer to sell or a solicitation of an offer to buy the securitieach securitys price or value may rise or fall. OpiniTechnical ratings may differ from fundamental ratings a

information extracted from the relevant jurisdictions stinvested. Past performance is not necessarily a guide ttake into account the specific investment objectives, thshould therefore seek financial, legal and other advicerecommended in this report.

The information contained herein has been obtained frInvestment Bank Berhad, its subsidiary and affil iates (cthis report by MKE and it should not be relied upon a(collectively, Representatives) shall not be liable for areport. Any information, opinions or recommendations c

This report may contain forward looking statements whintend, plan, expect, forecast, predict and projachieved and other similar expressions. Such forward lsubject to certain risks and uncertainties that could cReaders are cautioned not to place undue relevance onforward looking statements to reflect new information,

events.MKE and its officers, directors and employees, includingtime to time participate or invest in financing transactiofrom such issuers, and/or have a position or holding, orrelated thereto. In addition, it may make markets in theact upon or use the information presented herein, or theofficers and/or employees of MKE may be a director of t

This report is prepared for the use of MKEs clients anwhole or in part in any form or manner without the prioractions of third parties in this respect.

This report is not directed to or intended for distribution tother jurisdiction where such distribution, publication, acircumstances as may be permitted by applicable law.investors. Without prejudice to the foregoing, the readlocation of the person or entity receiving this report.

MalaysiaOpinions or recommendations contained herein are inratings as technical valuations apply different methodoSecurities Berhad in the equity analysis.

Singapore

This report has been produced as of the date hereof aKERPL) in Singapore has no obligation to update suMaybank KERPL in Singapore in respect of any mattersexpert investor or institutional investor (as defined undercontents of this report, with such liability being limited to

Thailand

The disclosure of the survey result of the Thai InstituteOffice of the Securities and Exchange Commission. Thand the market for Alternative Investment disclosed tperspective of a third party. It is not an evaluation of

Corporate Governance Report of Thai Listed CompaniPublic Company Limited (MBKET) does not confirm no

Except as specifically permitted, no part of this presentMBKET accepts no liability whatsoever for the actions of

US

This research report prepared by MKE is distributed iSecurities Exchange Act of 1934, as amended) only b(registered under Section 15 of the Securities Exchangthe US shall be borne by Maybank KESUSA. All resulUS. This report is not directed at you if MKE is prohibitshould satisfy yourself before reading it that Maybanlegislation and regulations.

UK

This document is being distributed by Maybank KimServices Authority and is for Informational Purposes onl

Services and Markets Act 2000 within the UK. Any incresponsibility for its comments or accuracy, and thatconstituting legal, accounting or tax advice, and that for

EPORT, DISCLAIMERS AND DISCLOSURES

nd for information purposes only and under no circumstances shies referred to herein. Investors should note that values of such sns or recommendations contained herein are in form of techs technical valuations apply different methodologies and are pur

ck exchange in the equity analysis. Accordingly, investors retuo future performance. This report is not intended to provide perfinancial situation and the particular needs of persons who ma

regarding the appropriateness of investing in any securities or t

m sources believed to be reliable but such sources have not bllectively, MKE) and consequently no representation is madesuch. Accordingly, MKE and its officers, directors, associates

ny direct, indirect or consequential losses or damages that mantained herein are subject to change at any time, without prior n

ich are often but not always identified by the use of words succt and statements that an event or result may, will, can, ooking statements are based on assumptions made and informuse the actual results to differ materially from those expressthese forward-looking statements. MKE expressly disclaims anyvents or circumstances after the date of this publication or to

persons involved in the preparation or issuance of this report, mns with the issuer(s) of the securities mentioned in this report,other material interest, or effect transactions, in such securities osecurities mentioned in the material presented in this report. Mresearch or analysis on which they are based, before the materi

he issuers of the securities mentioned in this report.

may not be reproduced, altered in any way, transmitted to, coxpress written consent of MKE and MKE and its Representative

o or use by any person or entity who is a citizen or resident of orvailability or use would be contrary to law or regulation. This re

he securities described herein may not be eligible for sale in allr is to note that additional disclaimers, warnings or qualificati

the form of technical ratings and fundamental ratings. Techniclogies and are purely based on price and volume-related infor

d the information herein may be subject to change. Maybankh information for any recipient. For distribution in Singapore,arising from, or in connection with, this report. If the recipient of t

Section 4A of the Singapore Securities and Futures Act), Maybathe extent (if any) as permitted by law.

of Directors Association (IOD) regarding corporate governancsurvey of the IOD is based on the information of a company listthe public and able to be accessed by a general public inveperation and is not based on inside information.The survey re

es. As a result, the survey may be changed after that date. Mr certify the accuracy of such survey result.

ation may be reproduced or distributed in any manner without tthird parties in this respect.

in the United States (US) to Major US Institutional Investorsy Maybank Kim Eng Securities USA Inc (Maybank KESUSA)

Act of 1934, as amended). All responsibility for the distributioning transactions by a US person or entity should be effected thed or restricted by any legislation or regulation in any jurisdictio

KESUSA is permitted to provide research material concerni

ng Securities (London) Ltd (Maybank KESL) which is auth. This document is not intended for distribution to anyone define

lusion of a third party link is for the recipients convenience onlaccess to such links is at the individuals own risk. Nothing iccurate guidance recipients should consult with their own indep

Page 26 of 28

Courts Asia

ould it be considered or intended as anecurities, if any, may fluctuate and thatical ratings and fundamental ratings.

ely based on price and volume-related

rns may be less than the original sumsonal investment advice and does noty receive or read this report. Investorshe investment strategies discussed or

en independently verified by Maybankas to the accuracy or completeness of, connected parties and/or employees

arise from the use or reliance of thistice.

h as anticipate, believe, estimate,hould, could or might occur or be

ation currently available to us and ared in any forward looking statements.obligation to update or revise any sucheflect the occurrence of unanticipated

ay, to the extent permitted by law, fromerform services for or solicit business

r options thereon, or other investmentsE may, to the extent permitted by law,l is published. One or more directors,

ied or distributed to any other party inaccepts no liability whatsoever for the

located in any locality, state, country orport is for distribution only under suchjurisdictions or to certain categories ofns may apply based on geographical

l ratings may differ from fundamentalmation extracted from Bursa Malaysia

im Eng Research Pte. Ltd. (Maybankecipients of this report are to contacthis report is not an accredited investor,nk KERPL shall be legally liable for the

is made pursuant to the policy of theed on the Stock Exchange of Thailandtor. The result, therefore, is from theult is as of the date appearing in the

aybank Kim Eng Securities (Thailand)

he prior written permission of MBKET.

(as defined in Rule 15a-6 under the, a broker-dealer registered in the USof this report by Maybank KESUSA inough a registered broker-dealer in then from making it available to you. Youg investments to you under relevant

rized and regulated, by the Financiald as a Retail Client under the Financial

, and that the firm does not take anythis report should be considered asndent tax advisers.


27/2812 March 2013

DISCLOSURES

Legal Entities Disclosures

Malaysia: This report is issued and distributed in MalMalaysia Berhad and a holder of Capital Markets andand distributed in Singapore by Maybank KERPL (Co.Eng Securities (PTKES) (Reg. No. KEP-251/PM/199MBKET (Reg. No.0107545000314) is a member of thExchange Commission. Philippines:Maybank ATRKESecurities and Exchange Commission. Vietnam: MayCommission of Vietnam.Hong Kong: KESHK (CentralIndia Private Limited (KESI) is a participant of the Nati(Reg. No. INF/INB 011452431) and is regulated by Sec(Reg. No. INM 000011708) US: Maybank KESUSA is(Reg No 2377538) is authorized and regulated by the Fi

Disclosure of Interest

Malaysia: MKE and its Representatives may from timeas market maker or may have assumed an underwritingservices, advisory and other services for or relating to th

Singapore: As of 12 March 2013, Maybank KERPL and

Thailand: MBKET may have a business relationship wresearch report. Therefore, Investors should exercise thparties and/or employees may from time to time have int

Hong Kong:KESHK may have financial interests in rel16.5(a) of the Hong Kong Code of Conduct for Persons

As of 12 March 2013, KESHK and the authoring analyst

MKE may have, within the last three years, served asissues of, any or all of the entities mentioned in this repservices in relation to the investment concerned or a relin this report.

OTHERS

Analyst Certification of Independence

The views expressed in this research report accuratelythe research analysts compensation was, is or will be, d

Reminder

Structured securities are complex instruments, typically

of understanding and assuming the risks involved. Thefactors (including, but not limited to, spot and forward intissuer or reference issuer. Any investor interested in pprofessional advisers as to the risks involved in making

No part of this material may be copied, photocopied

Ong Seng Yeow | Executive Director, Maybank Kim Eng Re

Definition of Ratings

Maybank Kim Eng Research uses the following rating

BUY Return is expected to be above 10% in

HOLD Return is expected to be between - 10

SELL Return is expected to be below -10% in

Applicability of Ratings

The respective analyst maintains a coverage unive

applicable to the stocks which form part of the covera

as we do not actively follow developments in these c

Some common terms abbreviated in this

Adex = Advertising Expenditure

BV = Book Value

CAGR = Compounded Annual Growth Rate

Capex = Capital Expenditure

CY = Calendar Year

DCF = Discounted CashflowDPS = Dividend Per Share

EBIT = Earnings Before Interest And Tax

EBITDA = EBIT, Depreciation And Amortisation

EPS = Earnings Per Share

EV = Enterprise Value

ysia by Maybank Investment Bank Berhad (15938-H) which iservices License issued by the Securities Commission in MalaysReg No 197201256N) which is regulated by the Monetary Auth) is a member of the Indonesia Stock Exchange and is regul

e Stock Exchange of Thailand and is regulated by the MinistS (Reg. No.01-2004-00019) is a member of the Philippines Stank Kim Eng Securities JSC (License Number: 71/UBCK-GP)Entity No AAD284) is regulated by the Securities and Futuresonal Stock Exchange of India Limited (Reg No: INF/INB 231452urities and Exchange Board of India. KESI is also registered with

member of/ and is authorized and regulated by the FINRA nancial Services Authority.

to time have positions or be materially interested in the securitiecommitment or deal with such securities and may also perform

ose companies.

the covering analyst do not have any interest in any companies

ith or may possibly be an issuer of derivative warrants on the sir own judgment before making any investment decisions. MBK

erests and/or underwriting commitments in the securities mentio

tion to an issuer or a new listing applicant referred to as defineLicensed by or Registered with the Securities and Futures Comm

do not have any interest in any companies recommended in this

anager or co-manager of a public offering of securities for, or crt or may be providing, or have provided within the previous 12

lated investment and may receive compensation for the services

reflect the analysts personal views about any and all of the subjirectly or indirectly, related to the specific recommendations or vi

involve a high degree of risk and are intended for sale only to s

market value of any structured security may be affected by chanerest and exchange rates), time to maturity, market conditions archasing a structured product should conduct its own analysisuch a purchase.

or duplicated in any form by any means or redistributed wit

earch

system:

the next 12 months (excluding dividends)

to +10% in the next 12 months (excluding dividends)

the next 12 months (excluding dividends)

rse of stocks, the list of which may be adjusted according to

ge universe. Reports on companies which are not part of the cov

mpanies.

eport (where they appear):

FCF = Free Cashflow PE = Price Earnings

FV = Fair Value PEG = PE Ratio To Gr

FY = Financial Year PER = PE Ratio

FYE = Financial Year End QoQ = Quarter-On-Qu

MoM = Month-On-Month ROA = Return On Ass

NAV = Net Asset Value ROE = Return On EquiNTA = Net Tangib le Asset ROSF = Return On Sh l

P = Price WACC = Weighted Av i l

P.A. = Per Annum YoY = Year-On-Year

PAT = Profit After Tax YTD = Year-To-Date

PBT = Profit Before Tax

Page 27 of 28

Courts Asia

a Participating Organization of Bursaia. Singapore:This material is issuedrity of Singapore. Indonesia: PT Kimted by the BAPEPAM LK. Thailand:

ry of Finance and the Securities andck Exchange and is regulated by theis licensed under the State Securitiesommission. India: Kim Eng Securities35) and the Bombay Stock ExchangeSEBI as Category 1 Merchant Banker

Broker ID 27861. UK: Maybank KESL

referred to herein and may further actor seek to perform investment banking

ecommended in this research report.

ecurities /companies mentioned in theT, its associates, directors, connecteded in this report.

by the requirements under Paragraphission.

research report.

urrently may make a primary market inonths, significant advice or investmentprovided from the companies covered

ct securities or issuers; and no part ofws expressed in the report.

phisticated investors who are capable

ges in economic, financial and politicald volatility and the credit quality of anyf the product and consult with its own

out the prior consent of MKE.

needs. Investment ratings are only

erage do not carry investment ratings

i wth

rter

t

ityreholders Funds

i rage Cost Of Cap ita l


28/28

MalaysiaMaybank Investment Bank Berhad(A Participating Organisation ofBursa Malaysia Securities Berhad)33rd Floor, Menara Maybank,

100 Jalan Tun Perak,50050 Kuala LumpurTel: (603) 2059 1888;Fax: (603) 2078 4194

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Stockbroking Business:Level 8, Tower C, Dataran Maybank,No.1, Jalan Maarof59000 Kuala LumpurTel: (603) 2297 8888Fax: (603) 2282 5136

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Maybank ATR Kim Eng SecuritiesInc.17/F, Tower One & Exchange PlazaAyala Triangle, Ayala AvenueMakati City, Philippines 1200

Tel: (63) 2 849 8888Fax: (63) 2 848 5738

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k 10330, Thailand

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2013-3-12 Kim Eng Courts Initiation v4 Ed1

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