!!

First&Myanmar&Investment&! ! ! ! ! ! ! !

BUY$$ $ Initiate!Coverage! ! ! !!! ! ! !!!24!March!2016$

$$Share$Price:$Ks!26,000$$Target$Price:$Ks!42,000$$12M$hi/lo:$N.A.$$Shares$outstanding:$23,480,013!$Free$Float$(est.):$25%$$Market$cap:$Ks!608.4!B$$Average$daily$volume:$N.A.$$Major$shareholders:$!Serge!Pun:!! 33.79%!Yangon!Land:!! 30.99%!Phyo!Phyu!Noe:! 4.72%!!!

A$First$Mover$Advantage$$!Premium$ pricing:! FMI! should! trade! at! a! considerable! premium! to! its! intrinsic! value.!Empirical!evidence!and!academic!studies!suggest!that!pioneer!listings!on!a!“closed”!and!nascent!stock!market! like!YSX!could!command!substantial!scarcity!premium.!Thus,!FMI!should!have!a!first!mover!advantage!with!a!target!price!of!Ks!42,000.!!Good$track$record:!Management’s!strong!business!acumen!has!steered!the!company!to!thrive!despite!political!and!economic!uncertainties!in!the!last!24!years.!FMI!has!remained!profitable!and!never!missed!paying!its!investors!dividends.!!The!company!is!thus!in!good!hands! to! scale! new! heights! as!Myanmar! transits! into! an! emerging! economy! in! a!more!conducive!environment.!!Banking$on$growth:!Yoma!Bank!has!a!surprisingly!fast!pace!of!growth!two!years!after!its!license!was!reXinstated.!With!total!deposits!expected!to!cross!one!trillion!Kyats!in!FY2016!on! an! estimated! loan/deposit! ratio! of! 70%,!Yoma!Bank! is! poised! to!become!FMI’s!new!growth!engine.!!The$other$surprise,$Healthcare:!Though!the!bottom!line!is!small!now,!the!healthcare’s!rapid!turnaround!raises!optimism!that!this!division!could!contribute!sooner.!The!new!5Xtier!pricing!strategy!seems!to!be!working!well!in!bringing!in!patients.!!An$abundant$land$bank:!Taking!minority!stakes!to!diversify!its!property!exposure!may!have!proven!to!be!a!clever!strategy!in!the!midst!of!current!real!estate!slowdown.!Further,!FMI!has!a!sizeable!land!bank!at!low!historical!cost!to!capitalize!on!the!next!upturn.!!Quality$of$earnings$to$improve:$Past!earnings!came!mainly!from!its! jointXventure!real!estate!companies.!FY2016!earnings!could!see!a!sharp!decrease!due! to! the!slowdown! in!property! sales.! ! Nevertheless,! we! expect! both! the! banking! and! healthcare! divisions! to!contribute!significantly!from!FY2017.!!!!

Financials$$ 31$Mar$14A$ 31$Mar$15A$ 31$Mar$16E$ 31$Mar$17F$Revenue$$(Ks!‘000)$ 11,128,382!! 33,318,535!! 121,028,192!! 161,918,600!!Operating$Profit$$(Ks’000)$ 1,821,557!! (1,712,946)! 240,369!! 6,857,178!!Share$of$associates$income$(Ks’000)$ 11,430,867!! 15,452,800!!

!3,819,555!! 14,178,855!!

NonVoperating$profit(Ks’000)$ 0!! 60,490,657!! 7,000,000!! 0!!Profit$before$tax$(Ks’000)$ 13,252,424!! 74,230,511!! 11,059,923!! 21,036,032!!NPATMI$(Ks’000)$ 12,564,148!! 71,380,237!! 6,132,997!! 13,389,816!!EPS$(Ks)$ 890!! 3,811!! 261!! 570!!PER$(x)$ 29!! 7!! 100!! 46!!P/NTA$(x)$ 4.8!! 2.9!! 3.5!! 3.3!!!

$$$$$$$$$$$Analyst:$Michael$Ong$

APPENDIX$AT$THE$BACK$OF$THIS$REPORT$CONTAINS$IMPORTANT$DISCLOSURES$!

!!

!

!!Sum!of!parts!valuation!yields!a!fair!value!of!!Ks20,!750/share!but!it!should!trade!significantly!higher…!!!!!!!!!!!!!!!!!!!!!Empirical!evidence!and!past!experience!suggest!FMI!should!trade!at!a!big!premium!to!its!fair!value!!!!!!!!!!How!big!a!premium!could!FMI!command?!!!!!!!!!!!!We!think!a!premium!of!100%!is!still!reasonable,!hence!our!target!price!of!Ks!42,000.!

Premium!pricing!!FMI!is!a!conglomerate!with!three!distinct!core!businesses!–!banking,!healthcare!and!property.!We!think!that!an!appropriate!valuation!methodology!is!to!take!the!summation!of!the!valuation!of!each!of!those!businesses.!The!bulk!of!FMI’s!value!is!underpinned!by!revaluation!of!its!property!assets!and!land!bank.!!The!sum!of!parts!method!yields!a!fair!value!of!Ks!20,!750!per!share.!!Sector$ Valuation$

(‘000$Ks)$Basis$

Yoma$Bank$ 106,087,546!!

!2.5x!P/B!and!RNAV!of!bank’s!property!assets.!

Healthcare$ 30,206,025! 10x!EBITDA!and!RNAV!of!land!bank!Properties:$Development$/Investment$$Land$bank$

!181,861,093!!140,786,281!

RNAV!including!an!estimated!100!acres!of!land!bank!carried!in!its!joint!venture!company!

Others$ 28,268,644! All!at!book!cost!except!its!5%!in!MTSH!

Summation$ 487,209,589! !Valuation/share$ 20,750! Based!on!23,480,013!shares!! ! !!!However,!empirical!evidence!from!the!Vietnamese!and!Chinese!stock!markets!suggests!that!FMI!is!likely!to!overshoot!its!fair!value!by!a!big!margin!on!its!debut!on!the!YSX.!!When!the!Ho!Chi!Minh!Stock!Exchange!started!in!June!2000!with!two!listings,!the!index!shot!up!by!470%!in!the!first!year!of!trading.!There!were!only!five!stocks!listed!within!the!first!year.!!!!Selected!listed!Chinese!companies!were!allowed!to!have!a!dual!listing!in!Hong!Kong!in!2007,!created!two!classes!of!shares!!X!the!“A”!shares!that!only!Chinese!citizens!and!100%!Chinese!owned!companies!could!own,!and!the!“H”!shares!listed!in!Hong!Kong!and!is!opened!to!nonXChinese!citizens.!!Within!the!first!year!of!trading,!the!“A”/”H”!share!premium!shot!up!by!100%.!!That!means!the!“A”!shares!that!were!trading!in!a!closed!market!condition!were!more!valuable!than!the!“H”!shares!that!traded!on!an!international!exchange.!!!Both!cases!suggest!that!the!initial!group!of!companies!that!trade!in!a!closed!and!nascent!market,!where!regulatory!framework!is!still!evolving,!and!disclosure!of!information!is!inefficient,!would!command!large!premiums.!!!!Three!reasons!for!the!substantial!premium:!

1. Scarcity!premium,!the!limited!number!of!alternatives!within!the!stock!market!would!lead!to!capital!chasing!after!a!limited!number!of!listed!stocks;!

2. Herd!mentality!in!a!market!where!information!disclosure!is!extremely!inefficient,!and!thus!has!a!tendency!to!have!an!upward!bias!on!share!price;!and!

3. Market!segmentation!where!foreigners!cannot!participate.!!We!therefore!believe!that!FMI!will!have!the!first!mover!advantage!when!it!makes!its!debut!on!YSX!on!25!March.!!We!think!a!premium!of!100%!over!its!intrinsic!value!is!reasonable!considering!the!solid!track!record!of!the!company.!!Our!target!price!for!FMI!is!Ks!42,000.!!!!

!

!!FMI!has!a!solid!track!record!amidst!a!tough!economic!and!political!condition...!!When!the!going!gets!tough…!!!!!!!!!!!!!!!!Despite!all!of!the!adversity,!FMI!still!delivers!profits!and!pays!dividends!year!after!year.!It!demonstrated!the!kind!of!tenacity!and!resolve!needed!to!succeed.!!!!!!!!!!!!!!!!!!!!!!!!!!Just!imagine!what!FMI!could!do!when!peace!and!prosperity!returns!to!!the!Golden!Land!of!opportunities.!

Good!track!record!!The!management!of!FMI!has!so!far!proven!its!ability!to!not!only!survive!in!periods!of!economic!difficulty!and!political!uncertainty;!it!has!also!shown!the!tenacity!to!thrive!in!a!prolonged!crisis.!!In!its!24Xyear!history,!FMI!has!not!only!remained!profitable!but!has!also!paid!dividends!to!its!shareholders!every!year.!!!!In!order!to!appreciate!the!resourcefulness!of!FMI’s!management!in!steering!the!company!to!where!it!is!today,!we!have!to!understand!the!kind!of!condition!the!company!operated!in.!U!Theim!Wai!@!Serge!Pun!(Serge!Pun)!and!a!group!of!entrepreneurs!set!up!FMI!in!1992.!It!was!one!of!the!earliest!public!companies!formed!in!Myanmar!at!that!time.!!Strong!business!acumen!enabled!FMI!to!rapidly!build!a!successful!diversified!business!portfolio!from!real!estate!to!banking!to!automotive!trading,!and!many!more.!However,!the!history!of!FMI!also!coincided!with!one!of!the!most!difficult!times!in!Myanmar’s!recent!history!–!there!were!political!volatility!and!unsuccessful!economic!reforms!from!within,!and!also!international!sanctions!led!by!the!United!States.!!The!US!not!only!stopped!its!citizens!and!companies!from!investing!in!Myanmar!since!1997,!it!also!pressured!those!companies!with!existing!businesses!in!Myanmar!to!quit!the!country.!!And!to!top!it!all,!Myanmar!suffered!a!national!banking!crisis!in!2003.!Several!banks!were!closed.!FMI’s!51%Xowned!Yoma!Bank!had!its!commercial!banking!operations!severely!curtailed.!!!

!!Note:!Income!here!defines!as!dividend!income!plus!interest!income!and!any!gain!from!disposal!of!assets.!!Two!examples!to!show!FMI’s!single!mindedness!in!optimizing!the!long!X!term!returns!for!its!shareholders.!The!company!may!not!have!gotten!it!right!the!first!time!as!in!the!case!of!the!hospital!investment,!but!it!waited!for!the!right!partner!to!help!the!company!to!realise!the!potential!of!its!investment:!!!Example!1.!Yoma!Bank!was!reduced!to!a!remittance!agent!post!2003!banking!crisis!but!FMI!kept!the!business.!Its!patience!paid!off!when!the!bank!regained!its!full!banking!license!in!2012.!!FMI!has!since!raised!its!stake!to!51%!and!brought!in!the!IFC!to!help!reXstart!its!banking!operation.!Example!2,!Pun!Hlaing!Hospital,!an!idea!of!a!high!end!hospital!that!was!way!too!early!for!Myanmar!–!the!masses!could!not!afford!while!the!wellXoff!would!rather!fly!overseas!for!their!medical!treatments.!Again,!FMI!never!gave!up!and!in!June!2015!brought!in!Indonesia’s!Lippo!Group!to!revamp!the!operation.!!!Myanmar!with!a!democratically!elected!government!will!attract!the!muchXneeded!Foreign!Direct!Investment.!!The!lifting!of!the!international!sanction!will!certainly!lift!the!outlook!for!businesses!in!the!country.!If!FMI!could!thrive!under!the!most!oppressive!environment,!it!should!do!even!better!going!forward.!!

0!500!1000!1500!2000!2500!3000!3500!4000!

FY1994!

FY1996!

FY1998!

FY2000!

FY2002!

FY2004!

FY2006!

FY2008!

FY2010!

FY2012!

FY2014!

FMI$Income$(Ks$million)$

FMI!Income!(Ks!million)!

!

!!!Yoma!Bank!first!full!year!contribution!to!FMI!from!FY!2016…!!!!!!!!In!less!than!3!years!after!getting!back!banking!license,!Yoma!Bank!made!impressive!progress!!!!!!!!!!We!expect!Loan/Deposit!ratio!to!hit!70%!this!year!!!!!!!!!!!!!!!!The!bank’s!willingness!to!embrace!new!technology!and!foreign!partnership!put!it!in!good!stead!to!continue!its!robust!growth!path!!!!!!!!!!!

!Banking!on!growth!!FMI!raised!its!stake!in!Yoma!Bank!from!35.6%!to!51%!on!24!December!2014!for!Ks25.6!billion.!!Thus,!we!will!see!the!first!full!year!impact!of!Yoma!Bank!in!FMI’s!FY2016!financials!ending!31!March.!!And!we!expect!Yoma!Bank!to!contribute!significantly!to!FMI’s!revenue!and!profit!going!forward.!!!!Despite!not!being!able!to!function!as!a!fully!fledged!commercial!bank!for!nearly!a!decade!due!to!the!strict!limitations!placed!on!the!bank’s!activities!post!the!Myanmar’s!banking!crisis,!Yoma!Bank!wasted!no!time!in!rebuilding!its!banking!business!after!its!banking!license!was!restored!in!2012.!!!Yoma!Bank!reported!FY2015!(ending!31!March)!revenue!and!net!afterXtax!profit!of!Ks!26.7!billion!and!Ks!5.4!billion!respectively,!achieving!a!CAGR!of!83%!and!169%!in!span!of!just!two!years.!!The!impressive!results,!especially!after!a!decade!of!zero!commercial!banking!operation,!were!achieved!on!the!back!a!fast!growing!loan!book!and!deposit!base.!As!at!31!March!2015,!Yoma!bank’s!total!deposits!stood!at!Ks!689.6!billion!compared!to!Ks!747!million!in!FY2012.!!Net!interest!margins!and!loan/deposit!ratio!grew!to!2.9%!and!60%!respectively.!!We!expect!a!targeted!lending!strategy!to!a!huge!addressable!market!of!Small!and!Medium!Sized!Enterprises!(SMEs)!will!underpin!the!bank’s!growth!in!FY2016!and!FY2017.!!We!expect!Yoma!Bank’s!total!deposits!to!exceed!Ks1!trillion!and!total!loans!to!be!close!to!Ks!700!billion.!!

!!!The!bank’s!successful!recommencement!of!its!commercial!banking!business!could!be!largely!attributed!to!FMI’s!willingness!to!embrace!new!technology!and!to!work!with!international!partners.!!The!bank!moved!swiftly!to!put!together!a!management!team!with!both!international!banking!experience!as!well!as!local!knowledge.!It!sought!expert!advice!and!funding!from!the!IFC,!a!member!of!the!World!Bank!Group.!!IFC!lent!an!estimated!Ks!4.9!billion!to!Yoma!Bank!via!a!convertible!loan!agreement!to!boost!the!lending!activities!to!SMEs.!!The!bank!invested!in!new!technologies!including!a!tieXup!with!Mysis!for!a!new!Core!Banking!System!on!which!it!would!build!its!electronic!banking!system,!and!also!partnered!with!the!Telenor!group!to!build!a!mobile!financial!services!business.!!These!strategic!collaborations!could!translate!into!new!and!exciting!sources!of!growth.!!!Its!fee!based!income!or!nonXinterest!income!(which!currently!accounts!for!just!under!50%!of!bank’s!revenue)!will!grow!significantly!in!the!next!few!years.!We!did!not!factor!in!any!significant!contribution!from!the!new!feeXbased!operations!in!our!FY2017!forecast.!!!!!!!

0!!

200,000,000!!

400,000,000!!

600,000,000!!

800,000,000!!

1,000,000,000!!

1,200,000,000!!

FY2013! FY2014! FY2015F! FY2016F!

Loans!(Ks!'000)!

Deposits!(Ks'000)!

!!!!!!!!!!!!!!!!!!!!Separate!the!wheat!from!the!chaff!as!the!Myanmar!banking!industry!develops…!

!!!

!!!The!outlook!for!the!banking!industry!is!very!positive!simply!because!there!exists!so!much!inefficiency,!much!of!which!is!policy!induced.!!A!case!in!mind!is!the!restriction!placed!on!banks!on!how!much!they!can!charge!borrowers!(no!more!than!13%)!and!how!much!they!must!pay!depositors!(at!least!8%).!!Another!factor!is!mandatory!collateralised!lending,!thus!borrowers!with!good!track!records!are!penalized.!!Nevertheless,!we!are!hopeful!that!the!banking!rules!and!regulations!would!evolve!as!Myanmar!transits!into!a!more!open!and!competitive!economy,!and!banks!like!Yoma!Bank!are!poised!to!gain!from!it.!!!Yoma!Bank’s!financial!stats!! FY2014A! FY2015A! FY2016F! FY2017F!Net!Interest!Income!!(Ks’000)! 3,886,842! 13,860,345! 22,494,927! 31,885,882!NonXInterest!Income!(K’000)! 9,634,995! 13,000,000! 11,909,760! 16,914,734!Total!Income!(Ks!‘000)! 13,521,837! 26,860,345! 34,404,687! 48,800,616!Net!Profit!After!Tax!(Ks’000)! 1,163,229! 5,352,959! 5,876,659! 8,664,260!ROE!(%)! 6.0! 17.1! 13.6! 13.2!NIM!(%)! 2.0! 3.0! 2.9! 3.0!L/D!Ratio!(%)! 23.1! 60.2! 70.0! 73.1!!!

FY2015$Breakdown$of$Income$

NonXinterest!income!

Remittance!

Net!Interest!income!

!!!60%Xowned!Pun!Hlaing!Siloam!is!poised!for!a!turnaround!in!FY2017,!a!record!considering!it!was!revamped!only!in!FY2015!!!!Strategy!of!expanding!its!pricing!range!to!cater!to!middleXlow!income!is!working!out!well…!

Healthcare…so!far!so!good!!FMI’s!60%Xowned!Pun!Hlaing!Siloam!is!poised!for!a!turnaround!by!FY2017!on!the!back!of!significantly!higher!inpatient!volume!growth.!!Under!the!new!management!team!brought!in!by!the!Lippo!Group,!the!hospital!operations!have!been!revamped!and!the!fiveXtiered!pricing!strategy!appears!to!be!a!critical!turnaround!factor!with!occupancy!near!40%.!!Considering!that!most!newly!setXup!hospitals!take!at!least!three!years!to!breakeven,!what!the!new!team!at!Pun!Hliang!Silaom!has!achieved!is!impressive.!!!!In!June!2015,!FMI!announced!a!60:40!joint!venture!with!Indonesian!Lippo!Group!to!operate!its!healthcare!business!here!in!Myanmar!helmed!by!Dr!Gershu!Paul,!who!has!been!credited!with!building!Lippo’s!listed!Siloam!Hospital!Group.!USD5.7!million!was!spent!to!revamp!the!hospital!into!a!174Xbed!facility!with!stateXof!the!art!equipment.!!The!new!management!also!introduced!full!salaried!nurses!and!doctors!to!better!service!its!patients.!!It!has,!to!date,!24!specialists!working!full!time!with!the!hospital.!!A!key!reason!for!past!failure!was!the!premier!positioning!of!the!hospital.!The!hospital!was!then!targeting!at!a!patient!class!that!had!the!means!to!seek!treatment!overseas,!while!at!the!same!time!it!was!being!priced!outXofXreach!of!most!citizens.!The!5Xtier!pricing!strategy,!which!ranges!from!USD210/night!at!the!high!end!for!a!grand!suite!to!USD10/night!for!sliver!class!ward!is!clearly!working!out!well.!!This!coupled!with!the!pool!of!full!time!nurses!and!doctors!should!not!only!improve!the!experience!of!its!patients,!but!also!more!importantly,!build!and!spread!trust!for!the!hospital.!!!!In!addition!to!the!Pun!Hlaing!Siloam!hospital!in!Hlaing!Thayar!Township,!FMI!has!another!18Xbed!clinic!located!at!its!FMI!Centre!and!a!third!in!Mandalay.!!The!longXterm!plan!is!to!build!a!chain!of!hospitals!comprising!three!categories!of!hospitals/clinics,!300Xbed!general!hospitals,!100Xbed!hospitals!and!40Xbed!clinics!across!the!country.!!Considering!the!extremely!low!ratio!of!0.6!beds/1000,!compared!with!2.9!beds/1000!in!developed!countries,!the!longXterm!outlook!is!very!promising.!!!!5Vtier$pricing$strategy:!$Bed&classes& Number&of&beds& USD/night&

Grand&Suite& 6! 210!Executive&Suite& 26! 110!Suite& 22! 70!Standard& 10! 40!Double& 10! 30!Silver&Class& 36! 10!& ! !!!!!!!!

!!!Involved!in!high!profile!and!scalable!projects!via!joint!venture!companies.!!!!!!!!!!!!!!!!!!!!!!!!Land!bank!underpinned!a!significant!part!of!FMI’s!revaluation!!!

Diversification!in!properties!works!out!well…!!FMI!is!involved!in!several!high!profile!and!sizeable!property!projects!where!it!mostly!takes!a!minority!stake.!!Taking!a!minority!stake!is!a!clever!strategy!of!getting!exposure!to!major!projects!without!putting!too!much!strain!on!its!balance!sheet.!!The!company!is!currently!involved!in!three!major!projects:!!

1. The!135Xacre!Star!City!project!undertaken!by!Thanlyin!Estate!where!FMI!has!a!30%!stake.!!It!contributed!significantly!to!FMI’s!profits!in!the!last!couple!of!years,!and!it!is!currently!in!phase!three!to!develop!the!Galaxy!Towers!comprising!six!residential!towers!totaling!954!apartments.!!The!slower!sales!achieved!on!the!launch!of!the!first!two!towers!were!due!to!the!prevalent!cautious!mood!in!the!run!up!to!the!recent!general!election.!We!expect!contribution!from!Galaxy!Tower!to!kickXin!in!FY2017.!!!

2. The!1.2!–acre!KrisPLAZA!project!in!Nay!Pyi!Taw.!!This!is!a!luxury!condominium!project!comprising!twin!towers!of!114!apartments!and!a!29,579!sq!ft!of!commercial!space.!Yoma!Bank!will!occupy!the!bulk!of!the!commercial!space.!We!did!not!factor!in!any!profit!contribution!in!our!earnings!forecast.!!!

3. The!Landmark!project,!which!comprises!two!distinct!parts!–!the!former!headquarters!of!the!Myanmar!Railway!Company!to!be!restored!into!the!Yangon!Peninsula!Hotel,!and!a!mixed!development!of!luxury!residences,!hotel!and!commercial!space.!!The!entire!development!will!sit!on!a!10Xacre!site!with!an!estimated!gross!floor!area!of!2!million!sq!ft.!The!whole!project!should!take!an!estimated!four!years!to!complete.!FMI!will!have!a!6%!equity!stake!of!Yangon!Peninsula!Hotel.!!!A!separate!consortium!comprising!FMI,!Yoma!Strategic!and!the!Mitsubishi!group!will!undertake!the!other!part!of!the!development.!!The!potential!equity!investment!has!yet!to!be!finalized.!!

!Apart!from!those!high!profile!projects,!FMI!through!its!joinXventure!companies!still!has!a!very!substantial!land!bank.!!We!understand!that!the!total!size!of!the!land!bank!is!at!least!100!acres.!!This!will!ensure!sufficient!land!for!further!development.!!We!estimated!the!land!bank!to!be!worth!Ks!141!billion!based!on!an!estimated!average!land!price!of!Ks!40,000!psf!.!!!

!!

!

!FMI!will!consolidate!the!full!year’s!earnings!of!both!51%Xowned!Yoma!Bank!and!60%Xowned!healthcare!business.!!!!!!!!!!!!!!Profit!from!“Real!Estate”!is!expected!to!decrease!in!FY2016!due!to!slower!sales!of!the!Galaxy!Tower!project.!!

Earnings$Forecast$(Ks$‘000)$ 31$Mar$14A$ 31$Mar$15A$ 31$Mar$16E$ 31$Mar$17F$Revenue$ 11,128,382$$ 33,318,535$$ 121,028,192$$ 161,918,600$$Real!Estate! 3,046,760!! 3,042,176!! 0!! 0!!Financial! 9,909!! 18,387,270!! 106,624,124!! 141,798,632!!Healthcare! 0!! 4,122,875!! 14,404,068!! 20,119,968!!Discontinued! 8,071,713!! 7,766,214!! 0!! 0!!COGS$ 6,706,449$$ 20,400,760$$ 98,297,979$$ 121,884,392$$Real!Estate! 326,789!! 351,862!! 0!! 0!!Financial! 0!! 10,711,821!! 87,494,928!! 107,398,015!!Healthcare! 0!! 3,246,756!! 10,803,051!! 14,486,377!!Discontinued! 6,379,660!! 6,090,321!! 0!! 0!!Gross$Profit$ 4,421,933$$ 12,917,775$$ 22,730,213$$ 40,034,207$$Other!income! 320,250!! 0!! 1,550,000!! 350,000!!Exceptional!gain! 0!! 60,490,657!! 7,000,000!! 0!!Admin!Expenses! (2,880,419)! (14,007,206)! (23,699,473)! (33,186,658)!Finance!expenses! (40,207)! (623,515)! (340,372)! (340,372)!Share$of$associates$ ! ! ! !Real!Estate! 11,430,867!! 15,452,800!! 3,819,555!! 14,178,855!!Financial! 10,198,252!! 11,132,127!! 0!! 0!!Healthcare! 409,953!! 1,703,786!! 0!! 0!!Discontinued/others! (236,106)! 3,287,418!! 0!! 0!!PreVtax$Profit$ 13,252,424!! 74,230,511!! 11,059,923!! 21,036,032!!Tax! (704,395)! (1,107,342)! (1,958,886)! (2,888,087)!Minority!Interest! (16,119)! (1,742,932)! (2,968,040)! (4,758,130)!Net$Profit$$ 12,564,148!! 71,380,237!! 6,132,997!! 13,389,816!!EPS$(Ks)$ 890!! 3,811!! 261!! 570!!!Summary$Balance$Sheet$

(Ks$‘000)$ 31$Mar$14A$ 31$Mar$15A$ 31$Mar$16E$ 31$Mar$17F$Current$assets$ 36,823,642$$ 557,911,385$$ 895,408,999$$ 1,230,177,991$$Cash!&!equivalent! 1,177,323!! 129,014,320!! 176,616,718!! 245,277,356!!Fixed$assets$ 49,723,247$$ 403,603,323$$ 390,443,958$$ 386,622,812$$Total$asset$ 86,546,889$$ 961,514,708$$ 1,285,852,956$$ 1,616,800,804$$Current$liabilities$ 4,119,247$$ 722,640,795$$ 1,043,789,793$$ 1,365,786,806$$Total!borrowings!

0! 17,123,429! 13,192,700! 9,492,774!

NonVcurrent$liabilities$ 404,856$$ 13,916,855$$ 10,816,855$$ 7,716,855$$Total$Liabilities$ 4,524,103$$ 736,557,650$$ 1,054,606,648$$ 1,373,503,661$$Equity$ 82,022,786$$ 224,957,058$$ 231,246,308$$ 243,297,143$$

!Summary$Cash$Flow$

(Ks$‘000)$ 31$Mar$14A$ 31$Mar$15A$ 31$Mar$16E$ 31$Mar$17F$Cash$provided$by$(used$in)$operating$activities$ (20,420,088)$ 71,143,095$$ 39,498,619$$ 58,231,746$$Cash$provided$by$(used$in)$investing$activities$ (17,606,657)$ 19,152,392$$ 5,764,666$$ 7,108,246$$Cash$provided$by$financing$activities$ 37,915,064$$ 35,809,748$$ 4,046,328$$ 3,320,646$$Net$incr/(decr)$in$cash$and$near$cash$ (111,681)! 126,105,235!! 49,309,613!! 68,660,638!!Cash$&$near$cash$at$beginning$of$FY$ 1,313,551!! 1,201,870!! 127,307,105!! 176,616,718!!

Cash$$at$end$of$FY$ 1,201,870!! 127,307,105!! 176,616,718!! 245,277,356!!!

Appendix:!Disclaimer!

This! research! report! is! prepared,! distributed! and! used! by! the!KBZ! Stirling! Coleman! Securities!

Company!Limited! (“KBZSC”)! in! relating! to! the! services!provided!by! the! same! for! the! reporting!

purposes!only.!All!information!in!this!research!report!has!been!prepared!by!good!faith!and!based!

on!the!available!publicly,!available!information!internal!data!and!other!reliable!sources!believed!

to!be!true.!This!report!is!provided!for!assistance!and!is!not!intended!to!be!and!must!not!alone!be!

taken!as!the!basis!for!an!investment!decision.!

The! report! does! do! not! take! into! account! the! particular! investment! objectives,! financial!

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third!party!or!any!individual!or!entity!!to!make!any!judgment!or!decision!or!preconception!with!

respect!to!any!business!operation!or!settlement!or!procurement!of!or!purchasing!and!selling!or!

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!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!