2q earnings preview - kim eng · 2013-07-23 · 25% 30% 35% 40%-5,000 10,000 15,000 20,000 25,000...

SEE APPENDIX I FOR IMPORTANT DISCLOSURES AND ANALYST CERTIFICATIONS

Hong KongSector Report 23 July 2013

Macau Gaming 2Q Earnings Preview Benefiting from Cotai capacity & premium mass First half GGR ended on a high note, growing 15% YoY powered by the mass market segment growth of 31% YoY, which was more than three times the VIP segment growth of 10%. Unlike a rising tide that lifts all ships, the growth has not been uniform across all operators and instead has favored those with new supply capacity such as Sands China. Moreover, operators who are targeting the high limit premium mass market base through segmentation have begun to reap rewards, such as Melco who clinched the largest market share gains in 2Q. Casinos that are situated in Cotai are also benefiting from a greater shift of GGR away from the Peninsula.

Maintain Overweight, sector valuations attractive. The sector currently trades at 12x FY13 EV/EBITDA, far below the peak of 13x in May and presents an attractive opportunity to accumulate in a sector that continues to offer strong average EBITDA growth of 16% with selected counters offering up to 5% dividend yields. In order of preference, we like Sands for its mass market exposure, Melco Int’l for its diverse emerging pipeline and SJM for market’s undervaluation of Cotai. We have a HOLD rating on Galaxy due to its rich valuations and a SELL rating for Wynn as its market share continues to decline.

2Q Preview; Melco and Sands lead growth. Moving into 2Q earnings season, Melco and Sands are expected to show the highest YoY (+40% and +58%) and QoQ (+4% and +8%) percentage increments above our second quarter EBITDA relative to peers. Against this outlook, we forecast that Wynn will be the only operator to record a decline in EBITDA both on a YoY (-15%) and QoQ (-22%) basis, due to its market share falling to a record low of 10.6% and lower than expected win rates of 3.1% for 2Q13. SJM is also likely to record a slight 1% QoQ decline in EBITDA in the 2nd quarter despite its expected organic growth of 11% YoY.

More infrastructure to propel growth. Infrastructure will continue to drive mass market growth. Ocean Kingdom in Hengqin is scheduled to open in 2H13. The Gongbei’s border gate expansion works will increase efficiency and likely boost visitor arrivals. Furthermore, should the proposed 24 hour border crossing or stamp free electronic processing be introduced to help alleviate checkpoint bottlenecks and facilitate easy entry-exit, the time saved at immigration may well translate into more time spent in Macau.

Macau gaming consensus relative valuations

Target

PriceUpside/

Downside PER (x)

EBITDA growth (%)

EV/EBITDA (x)

ROA (%)

Dividend Yield (%)

Name Ticker Rating (HKD) (%) 13Y 14Y 13Y 14Y 13Y 14Y 13Y 14Y 13Y 14YGalaxy 27 Hold 42.80 2.5 19.2 14.2 13.5 28.8 13.8 10.2 16.6 15.6 0.0 0.0 Melco Int’l 200 Buy 18.60 24.2 11.8 9.3 n/m n/m n/m n/m 12.1 13.3 0.0 0.0 Sands 1928 Buy 46.00 13.4 19.6 16.1 37.1 19.8 15.9 13.5 11.9 17.0 4.1 5.0 SJM 880 Buy 23.80 25.2 14.2 12.5 10.1 12.2 10.8 9.6 17.9 19.0 5.3 6.0 Wynn 1128 Sell 18.60 (11.4) 16.9 14.5 3.4 15.3 13.2 12.1 24.1 24.4 5.4 6.2 MGM 2282 Not rated N/A N/A 16.8 14.8 15.6 11.5 13.1 12.0 27.8 37.5 4.0 4.0 Source: Bloomberg, Maybank Kim Eng

Overweight (unchanged)

Jeremy TAN [email protected] (852) 2268 0635

Absolute Performance (%) Name BB Rec 1 mth 3 mth 6 mth 1 year YTD Galaxy 27 Hold (0) 23 14 104 29 Melco 200 Buy (3) 9 23 166 66 Sands 1928 Buy 9 2 6 73 19 SJM 880 Buy 3 1 (12) 37 7 Wynn 1128 Sell (2) (3) (2) 27 0 MGM 2282 NR 11 28 32 107 65 HSI Index 6 (3) (9) 9 (5)

Source: Bloomberg

23 July 2013 of 25

Gaming Sector

Contents

Outlook .............................................................. P3

Market Share .................................................... P4

2Q Preview ....................................................... P5

Relative Valuation ............................................. P6

Sands China (1928 HK) .................................... P7

Melco Int’l Development (200 HK) .................. P10

SJM Holdings (880 HK) .................................. P13

Galaxy Entertainment (27 HK) ........................ P16

Wynn Macau (1128 HK) .................................. P19

23 July 2013 of 25

Gaming Sector

Outlook

Mass market growth outpaces VIP three times. Macau’s gross gaming revenue grew 15% YoY in the first half of the year, racking in a cumulative total GGR of MOP171.4b. The mass market segment stole the limelight in the first half by growing three times faster than the VIP segment. The mass market segment continues to grow strongly due to a variety of factors, which are predominantly infrastructure related. Run rates north of MOP0.9b per day point to GGR growth of 13% YoY which exceeds our estimated 11% YoY in 2013. However, we maintain our conservative estimates in light of China’s sluggish macro-economic conditions and the China government’s efforts to rein in excessive credit growth.

More infrastructure growth in 2H13. While no new casinos are expected to be added until 2015, the Ocean Kingdom in Hengqin will arguably be the next mass market attraction. The Ocean Kingdom theme park, operated by Chimelong group; is scheduled to open partially in the second half. Other non-gaming elements are expected to be developed as the government has opened tenders for plots of land around Lotus Bridge, connecting Macau to Cotai. Moreover, the high speed Guangzhou-Zhuhai intercity railway, which opened at the beginning of 2013, now provides the hitherto missing link between Guangzhou and Gongbei. In the second half of 2013, more capital and labour resources are to be progressively added at the Gongbei border crossing to enable immigration authorities there to double their processing capacity to 500,000 visitors per day from the current 260,000. Gongbei is a key entry-exit point and receives 54% of the total number of Chinese tourists to Macau. Cotai operators that are well placed to capitalize on mass market growth will benefit more from this initiative.

Figure 1: Macau gross gaming revenue (MOP m)

Source: Macau Gaming Inspection and Coordination Bureau (DICJ), Maybank Kim Eng

Figure 2: Gross gaming revenue forecast (%) Macau 2011A 2012A 2013F 2014F VIP GGR 44.6% 7.5% 5.0% 5.0% MM GGR 36.1% 30.0% 25.0% 30.0% Total GGR 42.2% 13.5% 11.0% 12.5% Source: Macau Gaming Inspection and Coordination Bureau (DICJ), Maybank Kim Eng

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23 July 2013 of 25

Gaming Sector

Market share

Melco the top market share gainer in 2Q13. On a QoQ basis, Melco Crown showed the most improvement in market share, up 1.4ppts to 14.9%. MGM also demonstrated strength, adding 1ppt QoQ to its market shares at the expense of Peninsula gaming operators – SJM and Wynn lost market share of 1.9ppts and 0.8ppts QoQ respectively to their historic lows. We expect operators with significant mass-market clientele and those with properties in Cotai to continue to gain market share at the expense of VIP-dominant, peninsula-based firms.

New gaming center of gravity. Gaming operators on Cotai continue to be prime beneficiaries of mass market gaming growth, as GGR on Cotai rose 2ppts to 43% QoQ at the expense of GGR on the peninsula. As more gaming and non-gaming infrastructure is added to Cotai, we are likely to see a shift in the centre of Macau’s gaming industry. The completion of the Taipa ferry terminal in 2014 would also likely give Cotai-exposed operators a boost in visitor arrivals.

Figure 3: GGR Market share 1Q13 (HKDm) Figure 4:GGR Market share 2Q13 (HKDm)

Source: Company data, Maybank Kim Eng Source: Company data, Maybank Kim Eng

Figure 5: Market share by operator (%) Figure 6: Market share by geography (%)


Figure 7: Projected supply under development in Macau Operator Ticker Property Hotel Rooms Tables Slots Costs (USDb) Expected Date Galaxy 27 Galaxy Macau Phase 2 1,350 500 1,000 2.6 Mid 2015 Galaxy Macau Phase 3&4 5,500 1,000 3,000 7.7 2017Wynn 1128 Wynn Cotai 2,000 400 TBD 4.0 2016MGM 2282 MGM Grand Cotai 1,600 500 2,500 2.6 2017Sands 1928 Sands Parisan 3,300 TBD TBD 2.6 2016Melco Crown 6883 / MPEL Macau Studio City 2,000 400 1,200 2.1 Mid 2015SJM 880 SJM Cotai 1,800 700 2,000 2.5 2017 Louis xiii 577 Louis xiii Casino 230 66 TBD 1.0 2016Macau Legend 1680 Babylon 1,344 350 TBD 0.7 2014Total 19,124 3,916 9,700 25.8Source: Company, Maybank Kim Eng

Sands China, 17,874 , 21.0%

Galaxy, 15,760 , 18.5%

Wynn Macau, 9,720 , 11.4%

SJM, 22,410 , 26.3%

Melco Crown, 11,491 , 13.5%

MGM, 8,029 , 9.4%

Sands China, 18,194 , 21.1%

Galaxy, 16,002 , 18.6%

Wynn Macau, 9,104 , 10.6%

SJM, 21,025 , 24.4%

Melco Crown, 12,825 , 14.9%

MGM, 9,013 , 10.5%

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23 July 2013 of 25

Gaming Sector

2Q preview

Melco and Sands lead EBITDA growth. Based on our estimates, Melco Int’l and Sands are expected to post the highest 2Q13 EBITDA growth compared to peers, both on a YoY (+40% and +58% respectively) and QoQ (+4% and +8% respectively) basis. Sands’ growth came mainly from the progressive ramp-up of its Cotai Central casino; since the opening of the final phase of some 2,000 hotel rooms at the Sheraton, 2Q visitor arrivals have picked up significantly based on our channel checks. Meanwhile, Melco’s strategy of targeting high-limit, premium mass-market customers resulted in the best market share gains in 2Q13.

Wynn expected to underperform. Against this backdrop, we forecast that Wynn is likely to be the only operator to record a decline in EBITDA both on a YoY (-15%) and QoQ (-22%) basis, as its market share falls to a record low of 10.6% and win rates of 3.1% for 2Q13 are lower than expected. SJM is likely record a slight 1% QoQ EBITDA decline in 2Q13 due to higher promotional expenses, though on a YoY basis, organic EBITDA growth is expected to be 11% YoY.

Figure 8: Quarterly EBITDA estimates EBITDA Forecast YoY Change QoQ Change Difference EBITDA Actual MBKE BB MBKE BB MBKE BB MBKE vs BBName Ticker Rating 1Q12A 2Q12A 1Q13A 2Q13F 2Q13F (%) (%) (%) (%) (2Q13F ppts)Galaxy 27 Hold 2,153 2,522 2,767 2,774 2,856 10 13 0 3 (3)Melco Int’l 200 Buy 243 204 274 286 292 40 43 4 7 (3)Sands 1928 Buy 451 429 626 678 657 58 53 8 5 5 SJM 880 Buy 1,914 1,898 2,129 2,101 2,043 11 8 (1) (4) 3 Wynn 1128 Sell 290 302 331 258 289 (15) (4) (22) (13) (11)MGM 2282 Not rated 1,382 1,555 1,517 NR 1,571 NR 1.0 NR 4 NRNote: Galaxy, SJM and MGM in HKD, remaining operators in USD Source: Bloomberg, Maybank Kim Eng

Figure 9: Sector VIP Rolling Chip (HKDm) and Win Rate (%) Figure 10: GGR breakdown by operator (%)

Mass VIP

Sands China 42% 58%

Galaxy 26% 74%

Wynn Macau 21% 79%

SJM 30% 70%

Melco Crown 27% 73%

MGM 23% 77%

Sector 30% 70%


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23 July 2013 of 25

Gaming Sector

Relative valuations

Compelling valuations. The sector’s average EV/EBITDA valuation has been de-rated from 13x (1SD above mean) to below 12x currently. We see the correction as an opportunity to accumulate the sector. Selected stocks in the sector offer an average FY13F YoY EBITDA growth of 16%, as well as an average yield of 5%. The sector as a whole has outperformed the HSI by 37% YTD. Of the stocks under our coverage, Melco International is the best performer, up 66% YTD, while Wynn is worst performer among the six operators. Other Cotai-exposed operators, namely Galaxy and Sands, have also performed well on a YTD basis, up 29% and 19% respectively. We believe that operators that have strong gaming supply as well as exposure to Cotai and the mass-market segment will continue to outperform.

Figure 11: Sector average EV/EBITDA (x)

Source: Bloomberg, Maybank Kim Eng

Figure 12: Share price performance (%)

Source: Bloomberg, Maybank Kim Eng

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Galaxy MGM Sands SJM

Wynn Melco Intl HSI Index


Hong KongResults Preview 23 July 2013

Sands China Stellar 2Q EBITDA Growth Reiterate BUY; top pick in the sector. We maintain our BUY call and HKD46.00 TP on Sands China, our top pick in the sector, as the market operator with the largest mass market presence on Cotai following the opening of Sands Cotai Central in 2012. With its plans to sell its apartment-hotel approved by the government, future plans to further monetise its immense retail assets will likely develop into a catalyst to its share value. Sands is also looking to recreate the iconic Eiffel Tower in its new casino, the Parisian, at a cost of USD2.5b. The casino should be completed by 2016, and will likely enhance our NAV estimates by 7%. Our target price implies 13% upside, coupled with a 4% dividend yield.

2Q preview. Las Vegas Sands (LVS, Not Rated) is expected to report 2Q results after market close on Wednesday, Jul 24. We expect Sands China to report 2Q EBITDA of USD678m, up 58% YoY and 8% QoQ. Our 2Q estimates are 3% above Bloomberg consensus forecasts, as we expect better blended win rates of 3.6% and stable 2Q market share.

Strong market share. With Sands ramping up Cotai Central to its full potential, we believe that the property will continue to drive market share and EBITDA margin improvements at the group. The ramp-up of Sands Cotai Central has been accelerating since Sands opened the final phase of its 2,000 Sheraton hotel rooms. Our channel checks indicate that arrivals have been more brisk in compared to 1Q13. Sands’ 2Q market share was 21.1%, up 0.16ppt from 1Q, with Sands Cotai Central reaching a 9.4% share of the mass market just over a year after its opening in Apr 2012.

Premium justified by good earnings quality. Sands trades at an FY13/14 EV/EBITDA of 15.9x/13.5x. The stock command a premium compared to peers as it has the strongest exposure to the resilient mass-market segment, and hence the highest earnings quality, vis-à-vis peers. It also holds the largest retail floor space and biggest inventory of hotels among the six Macau gaming operators, which we believe justifies the premium.

Sands China–Summary Earnings Table FYE Dec (USDm) 2011A 2012A 2013F 2014FRevenue 4,881 6,511 8,870 9,990 EBITDA 1,527 1,978 2,712 3,247 Recurring Net Profit 1,138 1,404 2,143 2,608 Recurring Basic EPS (USD) 0.1 0.2 0.3 0.3 EPS growth (%) 70.0 9.0 73.3 21.7 DPS (USD) 0.1 0.2 0.2 0.3 PER 20.1 28.5 19.6 16.1 EV/EBITDA (x) 15.9 18.3 15.9 13.5 Div Yield (%) 5.3 4.0 4.1 5.0 P/BV(x) 4.1 6.3 7.0 6.4 Net Gearing (%) 16.6 23.5 33.9 29.6 ROE (%) 20.6 22.2 35.7 40.0 ROA (%) 11.2 11.9 17.0 18.2 Consensus Net Profit (USDm) - - 2,008 2,497 Source: Company data, Maybank Kim Eng

Buy (unchanged)

Share price: HKD40.55 Target price: HKD46.00 (unchanged)


Stock Information

Description: Sands China engages in the operation of casino games of chance and operation of integrated resorts. Its reportable segments are The Venetian Macao, Sands Macao, The Plaza Macao, Sands Cotai Central and Ferry operations. Ticker: 1928 HK Shares Issued (m): 8,057 Market Cap (USDm): 42,272 3-mth Avg Daily Turnover (USDm): 58 HSI: 21,447 Free Float (%): 30 Major Shareholders: (%) Las Vegas Sands 70 Historical Chart

Performance: 52-week High/Low HKD43.7/HKD20.7 1-mth 3-mth 6-mth 1-yr YTD Absolute (%) 8.6 2.0 6.2 72.9 19.4 Relative (%) 2.9 4.9 15.6 63.9 24.9

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Source: Bloomberg

23 July 2013 of 25

Sands China Limited

Figure 1: Sum-of-the-parts valuation for Sands China EBITDA EV/EBITDA EV Value/sh (USD m) (x) (USD m) (USD) CommentThe Venetian Macao 1,390.3 15 20,855.2 2.6 13F EBITDASands Macao 581.4 15 8,720.6 1.1 13F EBITDAPlaza Macao 403.4 15 6,051.1 0.8 13F EBITDASands Cotai Central 421.0 15 6,314.3 0.8 13F EBITDAFerry and Others (84.4) 15 (1,265.4) (0.2) 13F EBITDATotal EV 40,675.8 5.0 Add: ROIC: 20%The Parisian Site 3 3,306.6 0.4 WACC: 9%Apart-Hotel 1,134.0 0.1 1m sqft @

HKD8.8k Retail Assets 4,832.5 0.6 1.5m sqft @

HKD25kNet cash / (Debt) (2,037.4) (0.3)Target Price (USD) 47,911.5 5.9 Target Price (HKD) 46.0 HKD7.76

RoundedSource: Maybank Kim Eng

Figure 2: Sands China Monthly Market Share (%)

Source: DICJ, Maybank Kim Eng

Figure 3: Sands China EV/EBITDA (x)


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23 July 2013 of 25

Sands China Limited

INCOME STATEMENT BALANCE SHEET FYE Dec (USDm) 2011A 2012A 2013F 2014F

FYE Dec (USDm) 2011A 2012A 2013F 2014F Revenue 4,881 6,511 8,870 9,990 Fixed Assets 6,997 8,643 9,460 9,987 EBITDA 1,527 1,978 2,712 3,247 Other LT Assets 68 (1,008) 72 73 Depreciation &Amortisation (273) (354) (432) (473) Cash/ST Investments 2,491 1,948 2,374 3,480 Operating Profit (EBIT) 1,254 1,624 2,280 2,774 Other Current Assets 571 804 732 825 Interest (Exp)/Inc (53) (54) (132) (162) Total Assets 10,128 10,387 12,639 14,365 Associates - - - -

One-offs 3 120 0 0 ST Debt 80 49 0 0 Pre-Tax Profit 1,135 1,238 2,147 2,612 Other Current Liabilities 1,182 1,505 2,177 2,381 Tax (2) (2) (4) (4) LT Debt 3,329 3,212 4,412 5,412 Minority Interest - - - - Other LT Liabilities 21 36 36 36 Net Profit 1,133 1,236 2,143 2,608 Minority Interest 0 0 0 0 Recurring Net Profit 1,138 1,404 2,143 2,608 Shareholders' Equity 5,516 5,586 6,015 6,536 Total Liabilities-Capital 10,128 10,387 12,639 14,365 Revenue Growth % 18 33 36 13 EBITDA Growth (%) 27 30 37 20 Share Capital (m) 22,747 35,225 42,104 42,104 EBIT Growth (%) 41 29 40 22 Gross Debt/(Cash) 3,409 3,261 4,412 5,412 Net Profit Growth (%) 70 9 73 22 Net Debt/(Cash) 918 1,312 2,037 1,932 Recurring Net Profit Growth (%) 61 23 53 22 Working Capital 1,800 1,199 929 1,923 Tax Rate % 12 12 12 12

CASH FLOW RATES & RATIOS

FYE Dec (USDm) 2011A 2012A 2013F 2014F FYE Dec 2011A 2012A 2013F 2014F Profit before taxation 1,133 1,236 2,143 2,608

EBITDA Margin % 31.3 30.4 30.6 32.5 Depreciation 324 390 432 473 Op. Profit Margin % 24.6 21.8 25.7 27.8 Net interest receipts/(payments) 0 0 (132) (162) Net Profit Margin % 23.2 19.0 24.2 26.1 Working capital change (174) 62 744 112 ROE % 20.6 22.2 35.7 40.0 Cash tax paid 0 0 0 0 ROA % 11.2 11.9 17.0 18.2 Others (incl'd exceptional items) (61) 139 0 0 Net Margin Ex. El % 23.2 19.0 24.2 26.1 Cash flow from operations 1,223 1,827 3,187 3,030 Dividend Cover (x) 0.9 0.9 1.3 1.3 Capex (781) (989) (1,250) (1,000) Interest Cover (x) 22.7 26.4 17.2 17.1 Disposal/(purchase) 5 1 0 0 Asset Turnover (x) 0.5 0.6 0.7 0.7 Others 770 (13) 0 0 Asset/Debt (x) 3.0 3.2 2.9 2.7 Cash flow from investing (5) (1,001) (1,250) (1,000) Debtors Turn (days) 0.0 0.0 0.0 0.0 Debt raised/(repaid) 313 (186) 1,151 1,000 Creditors Turn (days) 128.4 119.5 127.8 127.8 Equity raised/(repaid) 2 12 0 0 Inventory Turn (days) 1.1 1.2 1.1 1.1 Dividends (paid) 0 (1,201) (1,715) (2,086) Net Gearing % 16.6 23.5 33.9 29.6 Interest payments 0 0 132 162 Debt/ EBITDA (x) 2.2 1.6 1.6 1.7 Others (82) 8 (1,080) (1) Debt/ Market Cap (x) 0.1 0.1 0.1 0.1 Cash flow from financing 233 (1,368) (1,511) (925) Change in cash 1,451 (543) 426 1,105 PER SHARE DATA

FYE Dec (USD) 2011A 2012A 2013F 2014F EPS 0.7 1.8 2.0 2.8 CFPS 0.4 1.3 1.6 2.2 BVPS 3.6 5.3 8.4 11.2 SPS 10.0 13.5 14.5 16.1 EBITDA/share 1.1 2.3 2.6 3.3 DPS 0.0 0.0 0.0 0.0

Source: Company data, Maybank Kim Eng



Melco Int’l Development Greatest 2Q Market Share Gain BUY; 24% upside. We reiterate our BUY recommendation on Melco Int’l Development (MID). Share price catalysts will come from a pipeline of international casino ventures that will be completed in the Philippines and Russia by 2014, as well as the completion of Macau Studio City in 2015. Our target price implies a 24% discount to our NAV estimates.

Premium mass drives 2Q earnings. The group’s premium mass strategy has reaped rewards in 1H13. We forecast that Melco Crown will report 2Q13 EBITDA of USD286m, up 40% YoY and 4% QoQ. We expect average VIP win rates to come in at 3.4%, 22bps better compared to the previous quarter. Our 2Q13 estimates are 2% lower than Bloomberg consensus forecasts.

Best QoQ market share gainer. Our channel checks suggest that Melco’s market share was up 1.4ppts QoQ to 14.9% in 2Q13, making it the top market share gainer in 2Q. This was driven by both the mass market and VIP segment, where market share rose by 0.6ppts and 1.8ppts to 12.9% and 15.5% respectively.

Studio City on track for 2H15 opening. During our recent visit to Macau, we observed that the foundations for the site by the Lotus Bridge have been erected, and the project seems on track for completion by 2H15. The project is estimated to cost USD2.9b inclusive of opening expenses. Based on an ROIC of 20%, we estimate that it would add 13% to our NAV estimates for Melco Crown.

Casino partnerships in emerging Russia and Philippines. MID will soon hold an international portfolio of casino investments comprising assets in Macau and other emerging markets. Recently, it announced that it would buy a 5% stake in a casino in Vladivostok, Russia, together with Summit Ascent (102 HK Not Rated) which holds 46% in the project. The agreement with Russian authorities has been finalised, and the parties are expected to sign the agreement in September. Melco Crown is also developing the Belle Grande casino in the Philippines, on track to open in 2014, in partnership with Belle,.

Melco Int’l Development – Summary Earnings Table

FYE Dec (HKDm) 2011A 2012A 2013F 2014F Revenue 129.3 146.9 154.2 161.9 EBITDA (68.7) (86.9) (85.9) (98.1)Recurring Net Profit 281.2 1,583.5 1,481.3 1,880.1 Recurring Basic EPS (HKD) 0.2 0.9 1.1 1.4 EPS Growth (%) 159.1 73.1 24.3 21.2 DPS (cents) 0.0 1.5 0.0 0.0 PER (x) 25.2 10.6 11.8 9.3 EV/EBITDA (x) n/m n/m n/m n/mDiv Yield (%) 0.0 0.3 0.0 0.0 P/BV (x) 1.0 1.3 1.6 1.4 Net Gearing (%) 7.7 Net Cash Net Cash Net CashROE (%) 3.9 12.0 13.7 14.8 ROA (%) 3.3 11.3 12.1 13.3 Consensus Net Profit (HKDm) 1,142.8 1,848.4 Source: Company data, Maybank Kim Eng

Buy (unchanged)



Stock Information

Description: Melco International Development is an investment holding company focused on providing entertainment and property development services. The company operates in the following segments: leisure and entertainment as well as property and other investments. Ticker: 200 HK Shares Issued (m): 1,535 Market Cap (USDm): 2,963 3-mth Avg Daily Turnover (USDm): 13 HSI: 21,417 Free Float (%): 51 Major Shareholders: % Great Respect 19.48 Better Joy Overseas 18.80 Lasting Legend 7.53 Historical Chart

Performance: 52-week High/Low HKD18.18/HKD5.12 1-mth 3-mth 6-mth 1-yr YTD Absolute (%) (2.7) 9.0 23.0 166.1 66.3 Relative (%) (8.4) 11.9 32.5 157.0 71.7

0.05.0

10.015.020.025.030.035.040.045.050.0



Source: Bloomberg

23 July 2013 of 25

Melco International Development Limited

Figure 1: Sum-of-the-parts valuation for Melco International Development Ticker Interest Value Value/share % NAV (%) (HKDm) (HKD) (%) CommentMelco Crown 6883 HK 34% 33,971 22.15 95.37% TP: HKD70.4Entertainment Gaming EGT US 38% 178 0.12 0.50% Fair ValueMelcoLot Ltd 8198 HK 51% 733 0.48 2.06% Fair ValueMountain China Resorts MCG CN 19% 11 0.01 0.03% Fair ValueAdd: Net cash/(debt) 299 0.19 0.84% FY13Other Assets 429 0.28 1.20%Estimated NAV 35,621 23.22 100%Discount to NAV 20% Target Price 18.6 Rounded

Source: Maybank Kim Eng estimates

Figure 2: Melco Monthly Market Share (%)

Source: Maybank Kim Eng

Figure 3: Melco EV/EBITDA (x)


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MPEL US Equity Mean +1 SD -1 SD

23 July 2013 of 25

Melco International Development Limited

INCOME STATEMENT BALANCE SHEET FYE Dec (HKDm) 2011A 2012A 2013F 2014F

FYE Dec (HKDm) 2011A 2012A 2013F 2014F Revenue 129 147 154 162 Fixed Assets 187 254 102 103 EBITDA (69) (87) (86) (98) Other LT Assets 7,635 8,845 10,521 12,606 Depreciation &Amortisation (6) (6) (7) (7) Cash/ST Investments 680 730 1,548 1,342 Operating Profit (EBIT) (74) (93) (93) (105) Other Current Assets 76 96 77 78 Interest (Exp)/Inc (123) (99) (123) (123) Total Assets 8,578 9,925 12,248 14,128 Associates 459 1,308 1,675 2,085

One-offs 4 0 0 0 ST Debt 228 34 34 34 Pre-Tax Profit 267 1,116 1,467 1,865 Other Current Liabilities 94 127 94 94 Tax 15 7 16 17 LT Debt 1,005 455 1,215 1,215 Minority Interest (1) (2) (1) (1) Other LT Liabilities 40 11 40 40 Net Profit 280 1,122 1,481 1,880 Minority Interest 29 (77) 29 29 Recurring Net Profit 281 1,583 1,481 1,880 Shareholders' Equity 7,183 9,374 10,836 12,716 Total Liabilities-Capital 8,578 9,925 12,248 14,128 Revenue Growth % 3 14 5 5 EBITDA Growth (%) 27 26 (1) 14 Share Capital (m) 7,090 11,882 17,514 17,514 EBIT Growth (%) 18 24 0 13 Gross Debt/(Cash) 1,233 489 1,249 1,249 Net Profit Growth (%) 234 301 32 27 Net Debt/(Cash) 552 (240) (299) (92) Recurring Net Profit Growth (%) (285) 463 (6) 27 Working Capital 434 664 1,498 1,292 Tax Rate % N/A N/A N/A N/A


FYE Dec (HKDm) 2011A 2012A 2013F 2014F FYE Dec 2011A 2012A 2013F 2014F Profit before taxation 280 1,122 1,481 1,880

EBITDA Margin % n/m n/m n/m n/m Depreciation 6 (6) (7) (7) Op. Profit Margin % n/m n/m n/m n/m Net interest receipts/(payments) 0 99 123 123 Net Profit Margin % n/m n/m n/m n/m Working capital change (0) (6) 14 (1) ROE % 3.9 12.0 13.7 14.8 Cash tax paid 0 0 0 0 ROA % 3.3 11.3 12.1 13.3 Others (incl'd exceptional items) (316) (1,128) (1,675) (2,085) Net Margin Ex. El % 216.6 857.1 960.7 1,161.2 Cash flow from operations (31) 81 (64) (90) Dividend Cover (x) N/A N/A N/A N/A Capex (1) (1) (1) (1) Interest Cover (x) 2.3 11.3 12.1 15.3 Disposal/(purchase) 0 0 0 0 Asset Turnover (x) 1.5 1.5 1.3 1.1 Others 18 (72) (13) (252) Asset/Debt (x) 7.0 20.3 9.8 11.3 Cash flow from investing 17 (73) (14) (253) Debtors Turn (days) 9.9 163.6 9.9 9.9 Debt raised/(repaid) 8 (28) 760 0 Creditors Turn (days) 11.0 121.0 8.9 8.2 Equity raised/(repaid) (24) 0 0 0 Inventory Turn (days) 9.3 6.4 9.3 9.3 Dividends (paid) (19) (20) 0 0 Net Gearing % 7.7 Net Cash Net Cash Net Cash Interest payments 0 99 123 123 Debt/ EBITDA (x) (18.0) (5.6) (14.5) (12.7) Others 0 0 0 0 Debt/ Market Cap (x) 17.4 4.1 7.1 7.1 Cash flow from financing (35) 51 883 123 Change in cash (48) 59 805 (220) PER SHARE DATA

FYE Dec (HKD) 2011A 2012A 2013F 2014F EPS 0.2 0.9 1.1 1.4 CFPS n/m n/m n/m n/m BVPS 5.9 7.1 8.2 9.7 SPS 0.1 0.1 0.1 0.1 EBITDA/share n/m n/m n/m n/m DPS 0.0 0.0 0.0 0.0 Source: Company data, Maybank KE estimates



SJM Holdings Anticipating Crystallisation of Cotai Value

BUY; 25% upside. SJM is the leading gaming operator in Macau by GGR. The investment angle on SJM is centered on its 1) cheap valuations relative to peers, 2) sustainable dividend yield, 3) MLD’s new table supply and 4) crystallization of underpriced Cotai. Our target price implies a 25% upside as well as a 5% dividend yield.

Lowest valuation. SJM trades at an FY13/14 EV/EBITDA 11x/10x, making it the cheapest Macau gaming stock, due to its constrained organic growth and perceived lower earnings quality owing to its exposure to the satellite casino segment. SJM is also seen as a VIP peninsula operator with poor governance. However, it is worth noting that: 1) SJM has the second-highest top line exposure to, and market share of, the resilient mass GGR, 2) it shares revenue from the satellite casino, thus its exposure to the satellite segment is only 21% of FY13F EBITDA.

2Q earnings preview. SJM is expected to report 2Q13 EBITDA of HKD2.1b, up 11% YoY and down 1% QoQ. Its market share fell 1.9ppts from 26.3% to 24.4% in 2Q in the face of competition from Cotai and a lack of capacity to capture the growing mass market segment. However, we think the market share loss has already been priced into its lower valuations, while EBITDA should continue to grow at a 3-year CAGR of 11%.

Crystallisation of Cotai value. SJM could be co-developing a Cotai site to the south of its gazetted land parcel, owned by Angela Leong, one of its executive directors. The site is three times larger than its current site and we believe a joint development would reinforce SJM’s footprint in Cotai. Investment into more non-gaming elements would also strengthen its position in negotiations with the government for its desired table quota of 700, which would almost double the 790 tables that it currently operates in self-promoted casinos. The 700 tables, 1,000 slots and 1,800 hotel rooms of SJM’s Cotai expansion are estimated to be worth HKD3.60 per share, and is currently not factored into SJM’s share price. We expect more details of its investment in Cotai, to be unveiled by the next quarter, to be a re-rating catalyst.

SJM Holdings – Summary Earnings Table

FYE Dec (HKDm) 2011A 2012A 2013F 2014F Revenue 76,092 79,519 87,440 97,174EBITDA 6,923 7,631 8,403 9,426Recurring Net Profit 5,344 6,733 7,105 8,104Recurring Basic EPS (HKD) 1.0 1.2 1.3 1.5EPS growth (%) 47.3 26.5 5.3 14.1DPS (HKD) 0.7 0.8 1.0 1.1PER 13.0 14.8 14.2 12.5EV/EBITDA (x) 8.5 11.9 10.8 9.6Div Yield (%) 5.8 4.4 5.3 6.0P/BV(x) 4.0 5.0 4.7 4.3Net Gearing (%) Net Cash Net Cash Net Cash Net CashROE (%) 30.8 33.9 32.8 34.2ROA (%) 16.1 18.1 17.9 19.0Consensus Net Profit (HKDm) 7,492 8,208Source: Company data, Maybank Kim Eng

Buy (unchanged)



Stock Information

Description: SJM Holdings is engaged in the operations of casino and gaming related activities. Ticker: 880 HK Shares Issued (m): 5,550 Market Cap (USDm): 13,593 3-mth Avg Daily Turnover (USDm): 24 HSI: 21,417 Free Float (%): 33 Major Shareholders: % STDM 55 Historical Chart

Performance: 52-week High/Low HKD22.38 / 13.00 1-mth 3-mth 6-mth 1-yr YTD Absolute (%) 3.4 1.1 (11.6) 37.4 7.1 Relative (%) (2.3) 4.0 (2.1) 28.4 12.5

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Source: Bloomberg

23 July 2013 of 25

SJM Holdings Limited

Figure 1: Sum-of-the-parts valuation for SJM Holdings EBITDA EV/EBITDA EV Value/sh (HKD m) (x) (HKD m) (HKD) CommentGrand Lisboa 5,055 12 60,662 10.9 13F EBITDA Third-Party Promoted 1,670 8 13,362 2.4 Self-Promoted 1,360 8 10,882 2.0 Other 317 8 2,539 0.5 Total EV 8,403 10 87,445 15.8 Add:

SJM Cotai 19,856 3.6 WACC: 9%ROIC: 20%

Net cash / (Debt) 24,761 4.5 Minority Interest (36) (0.0)Target Price 132,027 23.8 Source: Maybank Kim Eng estimates

Figure 2: SJM Holdings Monthly Market Share (%)


Figure 3: SJM Holdings EV/EBITDA (x)


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23 July 2013 of 25

SJM Holdings Limited


FYE Dec (HKDm) 2011A 2012A 2013F 2014F Revenue 76,092 79,519 87,440 97,174 Fixed Assets 9,552 8,871 8,745 8,620 EBITDA 6,923 7,631 8,403 9,426 Other LT Assets 1,189 3,140 3,140 3,140 Depreciation & Amortisation (1,121) (1,125) (1,125) (1,125) Cash/ST Investments 14,560 11,932 13,080 14,518 Operating Profit (EBIT) 5,803 6,506 7,278 8,301 Other Current Assets 7,719 13,352 14,681 16,316 Interest (Exp)/Inc (170) (354) (90) (105) Total Assets 33,020 37,294 39,647 42,594 Associates 0 0 0 0

One-offs 0 0 0 0 ST Debt 3,097 264 0 0 Pre-Tax Profit 5,346 6,827 7,188 8,196 Other Current Liabilities 11,702 14,644 14,907 15,329 Tax (35) (75) (82) (92) LT Debt 960 2,423 3,000 3,500 Minority Interest (3) (6) 0 0 Other LT Liabilities 15 49 49 49 Net Profit 5,308 6,745 7,105 8,104 Minority Interest 39 36 36 36 Recurring Net Profit 5,344 6,733 7,105 8,104 Shareholders' Equity 17,208 19,878 21,655 23,681 Total Liabilities-Capital 33,020 37,294 39,647 42,594 Revenue Growth % 32 5 10 11 EBITDA Growth (%) 43 10 10 12 Share Capital (m) 69,136 99,861 101,082 101,082 EBIT Growth (%) 58 12 12 14 Gross Debt/(Cash) 4,057 2,687 3,000 3,500 Net Profit Growth (%) 49 27 5 14 Net Debt/(Cash) (18,222) (22,596) (24,761) (27,334) Recurring Net Profit Growth (%) 51 26 6 14 Working Capital 17,247 19,914 21,690 23,716 Tax Rate % 12 12 12 12


FYE Dec (HKDm) 2011A 2012A 2013F 2014F FYE Dec 2011A 2012A 2013F 2014F Profit before taxation 5,346 6,827 7,188 8,196

EBITDA Margin % 9.1 9.6 9.6 9.7 Depreciation 1,121 1,125 1,125 1,125 Op. Profit Margin % 7.6 8.2 8.3 8.5 Net interest receipts/(payments) (170) (354) (90) (105) Net Profit Margin % 7.0 8.5 8.1 8.3 Working capital change 1,442 3,094 (1,066) (1,213) ROE % 30.8 33.9 32.8 34.2 Cash tax paid 0 0 (82) (92) ROA % 16.1 18.1 17.9 19.0 Others (incl'd exceptional items) 746 84 0 0 Net Margin Ex. El % 7.0 8.5 8.1 8.3 Cash flow from operations 8,484 10,776 7,074 7,911 Dividend Cover (x) 1.3 1.5 1.3 1.3 Capex (432) (389) (1,000) (1,000) Interest Cover (x) 31.1 19.1 78.9 77.2 Disposal/(purchase) 4 3 0 0 Asset Turnover (x) 2.3 2.1 2.2 2.3 Others (536) (7,223) 0 0 Asset/Debt (x) 8.1 13.9 13.2 12.2 Cash flow from investing (965) (7,609) (1,000) (1,000) Debtors Turn (days) 6.3 7.8 7.8 7.8 Debt raised/(repaid) (1,103) (1,377) 313 500 Creditors Turn (days) 11.5 14.5 14.5 14.5 Equity raised/(repaid) 100 83 0 0 Inventory Turn (days) 0.4 0.3 0.3 0.3 Dividends (paid) (2,095) (4,158) (5,329) (6,078) Net Gearing % Net Cash Net Cash Net Cash Net Cash Interest payments 0 0 90 105 Debt/ EBITDA (x) 0.6 0.4 0.4 0.4 Others 0 (343) 0 0 Debt/ Market Cap (x) 0.1 0.0 0.0 0.0 Cash flow from financing (3,098) (5,795) (4,926) (5,473)

Change in cash 4,421 (2,628) 1,148 1,438 PER SHARE DATA

FYE Dec (HKD) 2011A 2012A 2013F 2014F

EPS 1.0 1.2 1.3 1.5 CFPS 2.6 2.2 2.4 2.6 BVPS 3.1 3.6 3.9 4.3 SPS 13.8 14.3 15.8 17.5 EBITDA/share 1.3 1.4 1.5 1.7 DPS 0.7 0.8 1.0 1.1




Galaxy Entertainment Fairly Priced Maintain HOLD. We maintain our HOLD recommendation and HKD42.80 TP on Galaxy Entertainment. Galaxy is trading at 14x/10x FY13/14 EV/EBITDA, which we think is a fair valuation. We are optimistic of Galaxy’s long-term development plans; it will unveil three more phases of its highly successful Galaxy Macau casino property in 2017. We believe the market will progressively price the earnings accretion and future earnings outperformance as the casino opening approaches.

2Q earnings preview. Galaxy is expected to report a 2Q13 EBITDA of HKD2.8b, up 10% YoY and flat QoQ. VIP rolling chips increased 8% QoQ to HKD358b, but was offset by the lower average win rate of 3.16%, which fell 0.22ppts QoQ. Our EBITDA margin projection for the year stands at 18.3%.

Market share and margins driven by the mass segment. Galaxy’s 2Q13 market share was up 0.1ppts QoQ to 18.6%. This is predominantly due to the the mass-market segment, where Galaxy saw its share rise by 0.8ppts QoQ to 16.7%. We expect the company to continue to gain market share in this segment, thereby boosting overall EBITDA margins.

Entrenched Cotai footprint. During our channel checks we observed that the construction progress at Galaxy Macau was faster than at other operators in Cotai. We expect that it is on track for a mid-2015 completion. Galaxy had also previously implied that it had been looking to acquire projects such as sports stadiums, golf courses or a marina on Hengqin Island. Galaxy’s acquisition of Grand Waldo casino from Get Nice Holdings is expected to be completed at the cost of HKD3.25b. Grand Waldo’s operations have ceased temporarily for a revamp; its 38 tables are likely to be operated more efficiently under Galaxy’s management.

Galaxy Entertainment– Summary Earnings Table

FYE Dec (HKDm) 2011A 2012A 2013F 2014F Revenue 41,186 56,746 60,799 67,900EBITDA 5,749 9,774 11,096 14,289Recurring Net Profit 3,004 7,378 8,623 11,660Recurring Basic EPS (HKD) 0.7 1.8 2.0 2.8EPS growth (%) 219.3 140.9 16.9 35.2DPS (HKD) 0.0 0.0 0.0 0.0PER 19.6 17.3 19.2 14.2EV/EBITDA (x) 13.8 12.5 13.8 10.2Div Yield (%) 0.0 0.0 0.0 0.0P/BV(x) 4.0 5.7 4.7 3.5Net Gearing (%) 31.5 Net Cash Net Cash Net CashROE (%) 20.5 33.1 24.3 24.7ROA (%) 8.4 16.6 15.6 18.3Consensus Net Profit (HKDm) - - 9,089 10,957Source: Company data, Maybank Kim Eng

Hold (unchanged)



Stock Information

Description: Galaxy operates StarWorld Hotel on the Macau peninsula, Galaxy Macau on Cotai, and four other City Club casinos in Macau namely Waldo, President, Rio and Grand Waldo casino. The company also operates a Construction Materials segment distributing ground granulated blast-furnace slag. Ticker: 27 HK Shares Issued (m): 4,210 Market Cap (USDm): 21,302 3-mth Avg Daily Turnover (USDm): 64 HSI: 21,417 Free Float (%): 54 Major Shareholders: % City Lion Profits 31.21 Historical Chart

Performance: 52-week High/Low HKD44.95/HKD16.98 1-mth 3-mth 6-mth 1-yr YTD Absolute (%) (0.3) 23.2 13.8 103.6 29.3 Relative (%) (5.9) 26.1 23.2 94.5 34.8

0.010.020.030.040.050.060.070.080.090.0

100.0



Source: Bloomberg

23 July 2013 of 25

Galaxy Entertainment Group Limited

Figure 1: Sum-of-the-parts valuation for Galaxy Entertainment

EBITDA HKDm

EV/EBITDA(x)

EV HKDm

Value/sh HKD Comment

Galaxy Macau 7,411.0 13.0 96,343.6 22.9 2013F Star World 3,419.6 11.0 37,615.3 8.9 2013F City Clubs 135.9 11.0 1,494.9 0.4 2013F Construction materials 575.9 11.0 6,334.5 1.5 2013F Net corporate cost (446.5) 11.0 (4,911.3) (1.2) 2013FTotal EV 11,095.9 12.3 136,877.0 32.5 Add: Galaxy Macau Phase 2 17,715.4 4.2 ROIC:20%; WACC:

9%, g: 2%Cotai land bank 10,500.0 2.5 10m sqft @ HKD1k psfNet cash/(debt) 15,597.7 3.7 End-2013Minority interest (441.0) (0.1) End-2013TP 180,249.1 42.8 rounded


Figure 2: Galaxy Entertainment Monthly Market Share (%)


Figure 3: Galaxy Entertainment EV/EBITDA (x)


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Galaxy Entertainment Group Limited


FYE Dec (HKDm) 2011A 2012A 2013F 2014F Revenue 41,186 56,746 60,799 67,900 Fixed Assets 17,518 18,264 20,437 23,393 EBITDA 5,749 9,774 11,096 14,289 Other LT Assets 8,963 7,302 8,724 8,758 Depreciation & Amortisation (1,248) (1,835) (1,978) (2,195) Cash/ST Investments 7,260 16,300 24,628 29,939 Operating Profit (EBIT) 4,501 7,938 9,118 12,094 Other Current Assets 2,024 2,523 1,590 1,793 Interest (Exp)/Inc (248) (266) (456) (391) Total Assets 35,764 44,389 55,379 63,883 Associates 170 109 165 186

One-offs N/A N/A N/A N/A ST Debt 1,210 4,966 3,156 1,000 Pre-Tax Profit 2,891 7,316 8,496 11,518 Other Current Liabilities 8,783 10,368 10,368 10,368 Tax (32) (45) (39) (44) LT Debt 10,531 6,291 5,875 4,875 Minority Interest (26) (3) 0 0 Other LT Liabilities 597 469 469 469 Net Profit 3,004 7,378 8,623 11,660 Minority Interest 421 441 441 441 Recurring Net Profit 3,004 7,378 8,623 11,660 Shareholders' Equity 14,222 21,853 35,071 46,730 Total Liabilities-Capital 35,764 44,389 55,379 63,883 Revenue Growth % 114 38 7 12 EBITDA Growth (%) 158 70 14 29 Share Capital (m) 58,734 127,683 165,757 165,757 EBIT Growth (%) 158 76 15 33 Gross Debt/(Cash) 11,741 11,257 9,031 5,875 Net Profit Growth (%) 234 146 17 35 Net Debt/(Cash) 4,481 (5,042) (15,598) (24,064) Recurring Net Profit Growth (%) 234 146 17 35 Working Capital (710) 3,489 12,694 20,364 Tax Rate % 12 12 12 12



EBITDA Margin % 14.0 17.2 18.3 21.0 Depreciation 1,248 1,835 1,978 2,195 Op. Profit Margin % 10.9 14.0 15.0 17.8 Net interest receipts/(payments) 0 0 649 579 Net Profit Margin % 7.3 13.0 14.2 17.2 Working capital change 1,555 835 934 (203) ROE % 20.5 33.1 24.3 24.7 Cash tax paid 0 0 (39) (44) ROA % 8.4 16.6 15.6 18.3 Others (incl'd exceptional items) 74 226 0 0 Net Margin Ex. El % 7.3 13.0 14.2 17.2 Cash flow from operations 5,881 10,274 12,018 14,046 Dividend Cover (x) N/A N/A N/A N/A Capex (4,522) (2,227) (4,000) (5,000) Interest Cover (x) 12.1 27.7 18.9 29.8 Disposal/(purchase) 22 0 (3,250) 0 Asset Turnover (x) 1.2 1.3 1.1 1.1 Others (2,255) (5,507) 0 0 Asset/Debt (x) 3.0 3.9 6.1 10.9 Cash flow from investing (6,755) (7,734) (7,250) (5,000) Debtors Turn (days) 5.3 12.7 6.2 6.7 Debt raised/(repaid) 3,130 (524) (1,500) (3,156) Creditors Turn (days) 9.7 0.2 0.2 0.1 Equity raised/(repaid) 0 0 0 0 Inventory Turn (days) 0.8 3.0 3.0 2.7 Dividends (paid) 0 0 0 0 Net Gearing % 31.5 Net Cash Net Cash Net Cash Interest payments 0 0 (649) (579) Debt/ EBITDA (x) 2.0 1.2 0.8 0.4 Others 167 98 0 0 Debt/ Market Cap (x) 0.2 0.1 0.1 0.0 Cash flow from financing 3,298 (426) (2,149) (3,735)

Change in cash 2,424 2,114 2,619 5,310 PER SHARE DATA

FYE Dec (HKD) 2011A 2012A 2013F 2014F





Wynn Macau Trailing The Pack Reiterate SELL. We maintain our SELL call on Wynn Macau with a target price of HKD18.60. Wynn’s market share continues to decline as competition from Cotai operators intensifies. VIP turnover too is facing YoY declines due to uncompetitive junket rates, only mitigated by its premium mass-market business at Encore. Wynn has the largest GGR exposure to the VIP segment at 79%, making it the most vulnerable to a deterioration of the Chinese economy as well as a clampdown on corruption by authorities. Our target price implies 11% downside to our NAV estimate.

Rich valuation not justified. The stock trades at rich FY13/14 EV/EBITDA valuations of 13.2x/12.1x, a premium compared to its sector average of 12x. Wynn’s 2Q13 market share continued to be under pressure, falling to its record low of 10.6% (2Q12: 12.0%). With declining market share and growth that trails that of other operators, we believe that Wynn’s premium valuations will eventually narrow relative to peers.

1Q surprises positively. Wynn is expected to report 2Q13 results before the end of July. We estimate Wynn to record EBITDA of USD258m, down -15% YoY and -22% QoQ. Our EBITDA estimates are 11% below Bloomberg consensus estimates. Although 1Q13 results surprised on the upside, VIP win rates fell 0.42ppts QoQ to 3.12% in 2Q13, which would likely result in a miss in consensus earnings estimates.

Construction cost on the high end; delays in Cotai. Wynn has invested approximately HKD1.1b in Wynn Cotai to date, with the cost of all piling and pre-foundation work expected to reach HKD1.6b. We expect cost for the entire project to be at the top end of USD4b, a 5% overrun from initial projections. Wynn Cotai is likely to open at the end of 2016, later than Galaxy Macau (2015) and Macau Studio City (2015).

Wynn Macau – Summary Earnings Table FYE Dec (HKDm) 2011A 2012F 2013F 2014FRevenue 29,498 28,452 29,560 32,178 EBITDA 7,951 7,738 8,000 9,227 Recurring Net Profit 5,921 6,512 6,512 7,548 Recurring Basic EPS (HKD) 1.3 1.3 1.3 1.5 EPS Growth (%) 48.1 (2.6) 0.3 15.9 DPS (HKD) 1.2 1.2 1.1 1.3 PER (x) 15.2 16.7 16.9 14.5 EV/EBITDA (x) 12.7 13.3 13.2 12.1 Div Yield (%) 7.3 6.4 5.4 6.2 P/BV (x) 25.1 10.3 9.8 9.2 Net Gearing (%) (8.8) (54.8) (33.6) 19.9 ROE (%) 160.1 89.4 60.1 65.5 ROA (%) 42.0 31.7 24.1 24.4 Consensus Net Profit (HKDm) - - 7,132 7,736 Source: Company data, Maybank Kim Eng

Sell (unchanged)



Stock Information

Description: Wynn Macau operates two luxury hotel towers featuring 1,008 spacious rooms and suites, in addition to a casino, casual and fine dining restaurants, retail space as well as other leisure amenities. Ticker: 1128 HK Shares Issued (m): 5,188 Market Cap (USDm): 14,042 3-mth Avg Daily Turnover (USDm): 25 HSI: 21,417 Free Float (%): 28 Major Shareholders: (%) Wynn Resorts Limited 72 Historical Chart

Performance: 52-week High/Low HKD26.50/HKD14.62 1-mth 3-mth 6-mth 1-yr YTD Absolute (%) (1.9) (3.0) (2.3) 27.3 0.2 Relative (%) (7.6) (0.2) 7.2 18.2 5.7

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35.0



Source: Bloomberg

23 July 2013 of 25

Wynn Macau Limited

Figure 1: Sum-of-the-parts valuation for Wynn Macau EBITDA EV/EBITDA EV Value/sh (HKD m) (x) (HKD m) (HKD) CommentWynn Macau 7,999.7 11.0 87,996.4 17.0 FY13 EBITDA Add: Net cash / (Debt) 3,745.0 0.7 Available for Sale Investments 385.5 0.1 Wynn Cotai (Capitalized Cost) 4,462.5 0.9 Target Price (HKD) 96,589.4 18.6 Source: Maybank Kim Eng

Figure 2: Wynn Macau Monthly Market Share (%)


Figure 3: Wynn Macau EV/EBITDA (x)


0.0%

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n 11

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ar 1

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r 11

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Wynn Macau Limited


FYE Dec (HKDm) 2011A 2012A 2013F 2014F Revenue 29,498 28,452 29,560 32,178 Fixed Assets 9,969 10,203 13,343 20,284 EBITDA 7,951 7,738 8,000 9,227 Other LT Assets 1,089 693 693 693 Depreciation & Amortisation (1,016) (968) (1,060) (1,109) Cash/ST Investments 5,157 11,244 14,745 8,634 Operating Profit (EBIT) 5,982 6,770 6,939 8,119 Other Current Assets 1,145 1,476 1,658 1,736 Interest (Exp)/Inc (210) (262) (347) (484) Total Assets 17,360 23,616 30,438 31,347 Associates - - - -

One-offs 122 19 0 0 ST Debt 2,303 0 0 0 Pre-Tax Profit 5,894 6,527 6,593 7,635 Other Current Liabilities 7,023 6,355 7,307 7,748 Tax 27 (15) (81) (87) LT Debt 2,501 5,494 11,000 11,000 Minority Interest - - - - Other LT Liabilities 1,505 1,266 978 689 Net Profit 5,921 6,512 6,512 7,548 Minority Interest 0 0 0 0 Recurring Net Profit 6,665 6,493 6,512 7,548 Shareholders' Equity 4,028 10,501 11,153 11,910

Total Liabilities-Capital 17,360 23,616 30,438 31,347 Revenue Growth % 31 (4) 4 9 EBITDA Growth (%) 35 (3) 3 15 Share Capital (m) 101,157 108,679 109,717 109,717 EBIT Growth (%) 27 13 3 17 Gross Debt/(Cash) 4,803 5,494 11,000 11,000 Net Profit Growth (%) 34 10 (0) 16 Net Debt/(Cash) (353) (5,750) (3,745) 2,366 Recurring Net Profit Growth (%) 48 (3) 0 16 Working Capital (3,024) 6,365 9,096 2,622 Tax Rate % 12 12 12 12



EBITDA Margin % 27.0 27.2 27.1 28.7 Depreciation 1,016 968 1,060 1,109 Op. Profit Margin % 20.3 23.8 23.5 25.2 Net interest receipts/(payments) 210 262 347 484 Net Profit Margin % 20.1 22.9 22.0 23.5 Working capital change 1,608 (966) 385 66 ROE % 160.1 89.4 60.1 65.5 Cash tax paid (16) (309) 16 (79) ROA % 42.0 31.7 24.1 24.4 Others (incl'd exceptional items) 703 0 0 0 Net Margin Ex. El % 22.6 22.8 22.0 23.5 Cash flow from operations 9,417 7,082 8,400 9,214 Dividend Cover (x) 1.1 1.0 1.1 1.1 Capex (924) (1,202) (4,200) (8,050) Interest Cover (x) 31.7 24.8 18.8 15.6 Disposal/(purchase) (630) 409 0 0 Asset Turnover (x) 1.7 1.2 1.0 1.0 Others 48 84 92 101 Asset/Debt (x) 3.6 4.3 2.8 2.8 Cash flow from investing (1,506) (2,079) (4,108) (7,949) Debtors Turn (days) 9.3 9.3 9.3 9.3 Debt raised/(repaid) (187) 700 5,506 0 Creditors Turn (days) 17.8 17.8 17.8 17.8 Equity raised/(repaid) 1 0 0 0 Inventory Turn (days) 3.0 3.0 3.0 3.0 Dividends (paid) (6,225) (6,433) (5,859) (6,791) Net Gearing % Net Cash Net Cash Net Cash 19.9 Interest payments (196) (346) (439) (585) Debt/ EBITDA (x) 0.6 0.7 1.4 1.2 Others 0 0 0 0 Debt/ Market Cap (x) 0.0 0.1 0.1 0.1 Cash flow from financing (6,608) 316 (791) (7,376)

Change in cash 1,304 5,319 3,501 (6,111) PER SHARE DATA

FYE Dec (HKD) 2011A 2012A 2013F 2014F



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RESEARCH OFFICES

REGIONAL P K BASU Regional Head, Research & Economics (65) 6432 1821 [email protected]

WONG Chew Hann, CA Acting Regional Head of Institutional Research (603) 2297 8686 [email protected]

ONG Seng Yeow Regional Products & Planning (65) 6432 1453 [email protected]

ECONOMICS Suhaimi ILIAS Chief Economist Singapore | Malaysia (603) 2297 8682 [email protected]

Luz LORENZO Philippines (63) 2 849 8836 [email protected]

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

JUNIMANChief Economist, BII Indonesia (62) 21 29228888 ext 29682 [email protected]

Josua PARDEDE Economist / Industry Analyst, BII Indonesia (62) 21 29228888 ext 29695 [email protected]

MALAYSIA WONG Chew Hann, CA Head of Research (603) 2297 8686 [email protected] Strategy Construction & Infrastructure Desmond CH’NG, ACA (603) 2297 8680 [email protected] Banking - Regional LIAW Thong Jung (603) 2297 8688 [email protected] Oil & Gas Automotive Shipping ONG Chee Ting, CA (603) 2297 8678 [email protected] Plantations- Regional Mohshin AZIZ (603) 2297 8692 [email protected] Aviation Petrochem YIN Shao Yang, CPA (603) 2297 8916 [email protected] Gaming – Regional Media TAN CHI WEI, CFA (603) 2297 8690 [email protected] Power Telcos WONG Wei Sum, CFA (603) 2297 8679 [email protected] Property & REITs LEE Yen Ling (603) 2297 8691 [email protected] Building Materials Manufacturing Technology LEE Cheng Hooi Head of Retail [email protected] Technicals

HONG KONG / CHINA Ivan CHEUNG, CFA (852) 2268 0634 [email protected] Industrial Jacqueline KO, CFA (852) 2268 0633 [email protected] Consumer Andy POON (852) 2268 0645 [email protected] Telecom & equipment Alex YEUNG (852) 2268 0636 [email protected] Industrial Karen KWAN (852) 2268 0640 [email protected] HK & China Property Jeremy TAN (852) 2268 0635 [email protected] Gaming Warren LAU (852) 2268 0644 [email protected] Technology – Regional Philip TSE (852) 2268 0643 [email protected] HK & China Property

INDIA Jigar SHAH Head of Research (91) 22 6623 2601 [email protected] Oil & Gas Automobile Cement Anubhav GUPTA (91) 22 6623 2605 [email protected] Metal & Mining Capital goods Property Urmil SHAH (91) 22 6623 2606 [email protected] Technology Media Varun VARMA (91) 226623 2611 [email protected] Banking

SINGAPORE Gregory YAP Head of Research (65) 6432 1450 [email protected] Technology & Manufacturing Telcos - Regional Wilson LIEW (65) 6432 1454 [email protected] Property & REITs James KOH (65) 6432 1431 [email protected] Logistics Resources Consumer Small & Mid Caps YEAK Chee Keong, CFA (65) 6432 1460 [email protected] Offshore & Marine Alison FOK (65) 6432 1447 [email protected] Services S-chips ONG Kian Lin (65) 6432 1470 [email protected] REITs / Property Wei Bin (65) 6432 1455 [email protected] S-chips Small & Mid Caps

INDONESIA Katarina SETIAWAN Head of Research (62) 21 2557 1125 [email protected] Consumer Strategy Telcos Lucky ARIESANDI, CFA (62) 21 2557 1127 [email protected] Base metals Mining Oil & Gas Wholesale Rahmi MARINA (62) 21 2557 1128 [email protected] Banking Multifinance Pandu ANUGRAH (62) 21 2557 1137 [email protected] Automotive Heavy equipment Plantation Toll road Adi N. WICAKSONO (62) 21 2557 1128 [email protected] Generalist Anthony YUNUS (62) 21 2557 1139 [email protected] Cement Infrastructure Property Arwani PRANADJAYA (62) 21 2557 1129 [email protected] Technicals

PHILIPPINES Luz LORENZO Head of Research (63) 2 849 8836 [email protected] Strategy Laura DY-LIACCO (63) 2 849 8840 [email protected] Utilities Conglomerates Telcos Lovell SARREAL (63) 2 849 8841 [email protected] Consumer Media Cement Luz LORENZO / Mark RACE (63) 2 849 8844 [email protected] Conglomerates Property Ports/ Logistics Gaming Katherine TAN (63) 2 849 8843 [email protected] Banks Construction Ramon ADVIENTO (63) 2 849 8845 [email protected] Mining

THAILAND Sukit UDOMSIRIKUL Head of Research (66) 2658 6300 ext 5090 [email protected]

Maria LAPIZ Head of Institutional Research Dir (66) 2257 0250 | (66) 2658 6300 ext 1399 [email protected] Consumer/ Big Caps

Andrew STOTZ Strategist (66) 2658 6300 ext 5091 [email protected]

Mayuree CHOWVIKRAN (66) 2658 6300 ext 1440 [email protected] Strategy

Suttatip PEERASUB (66) 2658 6300 ext 1430 [email protected] Media Commerce Sutthichai KUMWORACHAI (66) 2658 6300 ext 1400 [email protected] Energy Petrochem Termporn TANTIVIVAT (66) 2658 6300 ext 1520 [email protected] Property Woraphon WIROONSRI (66) 2658 6300 ext 1560 [email protected] Banking & Finance Jaroonpan WATTANAWONG (66) 2658 6300 ext 1404 [email protected] Transportation Small cap. Chatchai JINDARAT (66) 2658 6300 ext 1401 [email protected] Electronics Pongrat RATANATAVANANANDA (66) 2658 6300 ext 1398 [email protected] Services/ Small Caps

VIETNAM Michael KOKALARI, CFA Head of Research (84) 838 38 66 47 [email protected] Strategy Nguyen Thi Ngan Tuyen (84) 844 55 58 88 x 8081 [email protected] Food and Beverage Oil and Gas Ngo Bich Van (84) 844 55 58 88 x 8084 [email protected] Banking Trinh Thi Ngoc Diep (84) 844 55 58 88 x 8242 [email protected] Technology Utilities Construction Dang Thi Kim Thoa (84) 844 55 58 88 x 8083 [email protected] Consumer Nguyen Trung Hoa +84 844 55 58 88 x 8088 [email protected] Steel Sugar Resources

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APPENDIX I: TERMS FOR PROVISION OF REPORT, DISCLAIMERS AND DISCLOSURES

DISCLAIMERS

This research report is prepared for general circulation and for information purposes only and under no circumstances should it be considered or intended as an offer to sell or a solicitation of an offer to buy the securities referred to herein. Investors should note that values of such securities, if any, may fluctuate and that each security’s price or value may rise or fall. Opinions or recommendations contained herein are in form of technical ratings and fundamental ratings. Technical ratings may differ from fundamental ratings as technical valuations apply different methodologies and are purely based on price and volume-related information extracted from the relevant jurisdiction’s stock exchange in the equity analysis. Accordingly, investors’ returns may be less than the original sum invested. Past performance is not necessarily a guide to future performance. This report is not intended to provide personal investment advice and does not take into account the specific investment objectives, the financial situation and the particular needs of persons who may receive or read this report. Investors should therefore seek financial, legal and other advice regarding the appropriateness of investing in any securities or the investment strategies discussed or recommended in this report.

The information contained herein has been obtained from sources believed to be reliable but such sources have not been independently verified by Maybank Investment Bank Berhad, its subsidiary and affiliates (collectively, “MKE”) and consequently no representation is made as to the accuracy or completeness of this report by MKE and it should not be relied upon as such. Accordingly, MKE and its officers, directors, associates, connected parties and/or employees (collectively, “Representatives”) shall not be liable for any direct, indirect or consequential losses or damages that may arise from the use or reliance of this report. Any information, opinions or recommendations contained herein are subject to change at any time, without prior notice.

This report may contain forward looking statements which are often but not always identified by the use of words such as “anticipate”, “believe”, “estimate”, “intend”, “plan”, “expect”, “forecast”, “predict” and “project” and statements that an event or result “may”, “will”, “can”, “should”, “could” or “might” occur or be achieved and other similar expressions. Such forward looking statements are based on assumptions made and information currently available to us and are subject to certain risks and uncertainties that could cause the actual results to differ materially from those expressed in any forward looking statements. Readers are cautioned not to place undue relevance on these forward-looking statements. MKE expressly disclaims any obligation to update or revise any such forward looking statements to reflect new information, events or circumstances after the date of this publication or to reflect the occurrence of unanticipated events.

MKE and its officers, directors and employees, including persons involved in the preparation or issuance of this report, may, to the extent permitted by law, from time to time participate or invest in financing transactions with the issuer(s) of the securities mentioned in this report, perform services for or solicit business from such issuers, and/or have a position or holding, or other material interest, or effect transactions, in such securities or options thereon, or other investments related thereto. In addition, it may make markets in the securities mentioned in the material presented in this report. MKE may, to the extent permitted by law, act upon or use the information presented herein, or the research or analysis on which they are based, before the material is published. One or more directors, officers and/or employees of MKE may be a director of the issuers of the securities mentioned in this report.

This report is prepared for the use of MKE’s clients and may not be reproduced, altered in any way, transmitted to, copied or distributed to any other party in whole or in part in any form or manner without the prior express written consent of MKE and MKE and its Representatives accepts no liability whatsoever for the actions of third parties in this respect.

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. This report is for distribution only under such circumstances as may be permitted by applicable law. The securities described herein may not be eligible for sale in all jurisdictions or to certain categories of investors. Without prejudice to the foregoing, the reader is to note that additional disclaimers, warnings or qualifications may apply based on geographical location of the person or entity receiving this report.

Malaysia

Opinions or recommendations contained herein are in the form of technical ratings and fundamental ratings. Technical ratings may differ from fundamental ratings as technical valuations apply different methodologies and are purely based on price and volume-related information extracted from Bursa Malaysia Securities Berhad in the equity analysis.

Singapore

This report has been produced as of the date hereof and the information herein may be subject to change. Maybank Kim Eng Research Pte. Ltd. (“Maybank KERPL”) in Singapore has no obligation to update such information for any recipient. For distribution in Singapore, recipients of this report are to contact Maybank KERPL in Singapore in respect of any matters arising from, or in connection with, this report. If the recipient of this report is not an accredited investor, expert investor or institutional investor (as defined under Section 4A of the Singapore Securities and Futures Act), Maybank KERPL shall be legally liable for the contents of this report, with such liability being limited to the extent (if any) as permitted by law.

Thailand

The disclosure of the survey result of the Thai Institute of Directors Association (“IOD”) regarding corporate governance is made pursuant to the policy of the Office of the Securities and Exchange Commission. The survey of the IOD is based on the information of a company listed on the Stock Exchange of Thailand and the market for Alternative Investment disclosed to the public and able to be accessed by a general public investor. The result, therefore, is from the perspective of a third party. It is not an evaluation of operation and is not based on inside information. The survey result is as of the date appearing in the Corporate Governance Report of Thai Listed Companies. As a result, the survey may be changed after that date. Maybank Kim Eng Securities (Thailand) Public Company Limited (“MBKET”) does not confirm nor certify the accuracy of such survey result.

Except as specifically permitted, no part of this presentation may be reproduced or distributed in any manner without the prior written permission of MBKET. MBKET accepts no liability whatsoever for the actions of third parties in this respect.

US

This research report prepared by MKE is distributed in the United States (“US”) to Major US Institutional Investors (as defined in Rule 15a-6 under the Securities Exchange Act of 1934, as amended) only by Maybank Kim Eng Securities USA Inc (“Maybank KESUSA”), a broker-dealer registered in the US (registered under Section 15 of the Securities Exchange Act of 1934, as amended). All responsibility for the distribution of this report by Maybank KESUSA in the US shall be borne by Maybank KESUSA. All resulting transactions by a US person or entity should be effected through a registered broker-dealer in the US. This report is not directed at you if MKE is prohibited or restricted by any legislation or regulation in any jurisdiction from making it available to you. You should satisfy yourself before reading it that Maybank KESUSA is permitted to provide research material concerning investments to you under relevant legislation and regulations.

UK

This document is being distributed by Maybank Kim Eng Securities (London) Ltd (“Maybank KESL”) which is authorized and regulated, by the Financial Services Authority and is for Informational Purposes only. This document is not intended for distribution to anyone defined as a Retail Client under the Financial Services and Markets Act 2000 within the UK. Any inclusion of a third party link is for the recipients convenience only, and that the firm does not take any responsibility for its comments or accuracy, and that access to such links is at the individuals own risk. Nothing in this report should be considered as constituting legal, accounting or tax advice, and that for accurate guidance recipients should consult with their own independent tax advisers.

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DISCLOSURES Legal Entities Disclosures

Malaysia: This report is issued and distributed in Malaysia by Maybank Investment Bank Berhad (15938-H) which is a Participating Organization of Bursa Malaysia Berhad and a holder of Capital Markets and Services License issued by the Securities Commission in Malaysia. Singapore: This material is issued and distributed in Singapore by Maybank KERPL (Co. Reg No 197201256N) which is regulated by the Monetary Authority of Singapore. Indonesia: PT Kim Eng Securities (“PTKES”) (Reg. No. KEP-251/PM/1992) is a member of the Indonesia Stock Exchange and is regulated by the BAPEPAM LK. Thailand: MBKET (Reg. No.0107545000314) is a member of the Stock Exchange of Thailand and is regulated by the Ministry of Finance and the Securities and Exchange Commission. Philippines: Maybank ATRKES (Reg. No.01-2004-00019) is a member of the Philippines Stock Exchange and is regulated by the Securities and Exchange Commission. Vietnam: Maybank Kim Eng Securities JSC (License Number: 71/UBCK-GP) is licensed under the State Securities Commission of Vietnam. Hong Kong: KESHK (Central Entity No AAD284) is regulated by the Securities and Futures Commission. India: Kim Eng Securities India Private Limited (“KESI”) is a participant of the National Stock Exchange of India Limited (Reg No: INF/INB 231452435) and the Bombay Stock Exchange (Reg. No. INF/INB 011452431) and is regulated by Securities and Exchange Board of India. KESI is also registered with SEBI as Category 1 Merchant Banker (Reg. No. INM 000011708) US: Maybank KESUSA is a member of/ and is authorized and regulated by the FINRA – Broker ID 27861. UK: Maybank KESL (Reg No 2377538) is authorized and regulated by the Financial Services Authority.

Disclosure of Interest Malaysia: MKE and its Representatives may from time to time have positions or be materially interested in the securities referred to herein and may further act as market maker or may have assumed an underwriting commitment or deal with such securities and may also perform or seek to perform investment banking services, advisory and other services for or relating to those companies.

Singapore: As of 23 July 2013, Maybank KERPL and the covering analyst do not have any interest in any companies recommended in this research report.

Thailand: MBKET may have a business relationship with or may possibly be an issuer of derivative warrants on the securities /companies mentioned in the research report. Therefore, Investors should exercise their own judgment before making any investment decisions. MBKET, its associates, directors, connected parties and/or employees may from time to time have interests and/or underwriting commitments in the securities mentioned in this report.

Hong Kong: KESHK may have financial interests in relation to an issuer or a new listing applicant referred to as defined by the requirements under Paragraph 16.5(a) of the Hong Kong Code of Conduct for Persons Licensed by or Registered with the Securities and Futures Commission.

As of 23 July 2013, KESHK and the authoring analyst do not have any interest in any companies recommended in this research report.

MKE may have, within the last three years, served as manager or co-manager of a public offering of securities for, or currently may make a primary market in issues of, any or all of the entities mentioned in this report or may be providing, or have provided within the previous 12 months, significant advice or investment services in relation to the investment concerned or a related investment and may receive compensation for the services provided from the companies covered in this report.

OTHERS Analyst Certification of Independence

The views expressed in this research report accurately reflect the analyst’s personal views about any and all of the subject securities or issuers; and no part of the research analyst’s compensation was, is or will be, directly or indirectly, related to the specific recommendations or views expressed in the report.

Reminder

Structured securities are complex instruments, typically involve a high degree of risk and are intended for sale only to sophisticated investors who are capable of understanding and assuming the risks involved. The market value of any structured security may be affected by changes in economic, financial and political factors (including, but not limited to, spot and forward interest and exchange rates), time to maturity, market conditions and volatility and the credit quality of any issuer or reference issuer. Any investor interested in purchasing a structured product should conduct its own analysis of the product and consult with its own professional advisers as to the risks involved in making such a purchase.

No part of this material may be copied, photocopied or duplicated in any form by any means or redistributed without the prior consent of MKE.

Definition of Ratings

Maybank Kim Eng Research uses the following rating system:

BUY Return is expected to be above 10% in the next 12 months (excluding dividends)

HOLD Return is expected to be between - 10% to +10% in the next 12 months (excluding dividends)

SELL Return is expected to be below -10% in the next 12 months (excluding dividends)

Applicability of Ratings

The respective analyst maintains a coverage universe of stocks, the list of which may be adjusted according to needs. Investment ratings are only applicable to the stocks which form part of the coverage universe. Reports on companies which are not part of the coverage do not carry investment ratings as we do not actively follow developments in these companies.

Some common terms abbreviated in this report (where they appear):

Adex = Advertising Expenditure FCF = Free Cashflow PE = Price Earnings BV = Book Value FV = Fair Value PEG = PE Ratio To Growth CAGR = Compounded Annual Growth Rate FY = Financial Year PER = PE Ratio Capex = Capital Expenditure FYE = Financial Year End QoQ = Quarter-On-Quarter CY = Calendar Year MoM = Month-On-Month ROA = Return On Asset DCF = Discounted Cashflow NAV = Net Asset Value ROE = Return On Equity DPS = Dividend Per Share NTA = Net Tangible Asset ROSF = Return On Shareholders’ Funds EBIT = Earnings Before Interest And Tax P = Price WACC = Weighted Average Cost Of Capital EBITDA = EBIT, Depreciation And Amortisation P.A. = Per Annum YoY = Year-On-Year EPS = Earnings Per Share PAT = Profit After Tax YTD = Year-To-Date EV = Enterprise Value PBT = Profit Before Tax

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Malaysia Maybank Investment Bank Berhad (A Participating Organisation of Bursa Malaysia Securities Berhad) 33rd Floor, Menara Maybank, 100 Jalan Tun Perak, 50050 Kuala Lumpur Tel: (603) 2059 1888; Fax: (603) 2078 4194

Singapore Maybank Kim Eng Securities Pte Ltd Maybank Kim Eng Research Pte Ltd 9 Temasek Boulevard #39-00 Suntec Tower 2 Singapore 038989 Tel: (65) 6336 9090 Fax: (65) 6339 6003

London Maybank Kim Eng Securities (London) Ltd 6/F, 20 St. Dunstan’s Hill London EC3R 8HY, UK Tel: (44) 20 7621 9298 Dealers’ Tel: (44) 20 7626 2828 Fax: (44) 20 7283 6674

New York Maybank Kim Eng Securities USA Inc 777 Third Avenue, 21st Floor New York, NY 10017, U.S.A. Tel: (212) 688 8886 Fax: (212) 688 3500

Stockbroking Business: Level 8, Tower C, Dataran Maybank, No.1, Jalan Maarof 59000 Kuala Lumpur Tel: (603) 2297 8888 Fax: (603) 2282 5136

Hong Kong Kim Eng Securities (HK) Ltd Level 30, Three Pacific Place, 1 Queen’s Road East, Hong Kong Tel: (852) 2268 0800 Fax: (852) 2877 0104

Indonesia PT Kim Eng Securities Plaza Bapindo Citibank Tower 17th Floor Jl Jend. Sudirman Kav. 54-55 Jakarta 12190, Indonesia

Tel: (62) 21 2557 1188 Fax: (62) 21 2557 1189

India Kim Eng Securities India Pvt Ltd 2nd Floor, The International 16, Maharishi Karve Road, Churchgate Station, Mumbai City - 400 020, India Tel: (91).22.6623.2600 Fax: (91).22.6623.2604

Philippines Maybank ATR Kim Eng Securities Inc. 17/F, Tower One & Exchange Plaza Ayala Triangle, Ayala Avenue Makati City, Philippines 1200 Tel: (63) 2 849 8888 Fax: (63) 2 848 5738

Thailand Maybank Kim Eng Securities (Thailand) Public Company Limited 999/9 The Offices at Central World, 20th - 21st Floor, Rama 1 Road Pathumwan, Bangkok 10330, Thailand Tel: (66) 2 658 6817 (sales) Tel: (66) 2 658 6801 (research)

Vietnam In association with

Maybank Kim Eng Securities JSC 1st Floor, 255 Tran Hung Dao St. District 1 Ho Chi Minh City, Vietnam Tel : (84) 844 555 888 Fax : (84) 838 38 66 39

Saudi Arabia In association with

Anfaal Capital Villa 47, Tujjar Jeddah Prince Mohammed bin Abdulaziz Street P.O. Box 126575 Jeddah 21352 Tel: (966) 2 6068686 Fax: (966) 26068787

South Asia Sales Trading Kevin FOY [email protected] Tel: (65) 6336-5157 US Toll Free: 1-866-406-7447

North Asia Sales Trading Eddie LAU [email protected] Tel: (852) 2268 0800 US Toll Free: 1 866 598 2267

www.maybank-ke.com | www.maybank-keresearch.com | www.kimeng.com.hk

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