malaysia property neutral (unchanged) a post-gst survey

May 19, 2015

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SEE PAGE 23 FOR IMPORTANT DISCLOSURES AND ANALYST CERTIFICATIONS PP16832/01/2013 (031128)

Malaysia Property

Post-GST survey Cautious buying mood prevails.

Policy easing unlikely. Financing remains as the key issue.

The sector lacks of strong re-rating catalysts. Maintain

NEUTRAL, only BUY is SP Setia (SPSB).

What’s New At the recent Home & Property Investment Fair by iProperty.com,

we conducted our own survey on 35 randomly selected visitors, in

addition to conversations with property developers‟ sales forces.

Our findings: 1) 63% of the respondents intended to buy at least one

property over the next 12 months. 2) Most already have at least one

property in hand and were looking for new properties mainly for

investment purposes. 3) Many admitted that they were facing

difficulties in securing mortgage loans. 4) Landed property was still

the preferred property type. 5) Due to pricing issue, many opted to

stay in sub-urban areas. 6) Most respondents believe that property

prices will trend up over the next twelve months. 7) Top concerns

are pricing and financing. 8) Attractive discounts/ incentives were

still being offered by the developers.

What’s Our View While demand trend and buyers‟ concerns remain the same as our

last survey in July 2014, we sense a more cautious buying mood now.

We observed that demand on landed properties priced below

MYR1m/unit stays firm. Downside risks for the developers include:

1) higher-than-expected GST provisioning which would put pressure

on operating margins and 2) weaker-than-expected sales. Policy

easing is unlikely, we believe.

Presently, property stocks under our coverage trade at an average

35-63% discount to our RNAV estimates, which we believe fairly

reflect their near-term outlook. Our strategy remains a defensive

one in view of a more prolonged downcycle in demand which could

last between 9-24 months. SPSB is our only pick for the sector. We

like its earnings defensiveness and 4.4% net yield.

Analyst

Property sector – Peer valuation summary

Stock Rec Shr

px

Mkt cap TP PER (x) PER (x) PER (x) P/BV

(x)

P/BV

(x)

ROE

(%)

ROE

(%)

Net yield

(%) MYR MYR m MYR CY14A CY15F CY16F CY14A CY15F CY14A CY15F CY15F

Eco World Hold 1.73 3,408.5 1.95 61.1 47.6 22.6 1.3 1.1 2.1 2.4 0.5

Glomac Hold 0.95 690.5 1.03 7.9 6.4 5.0 0.7 0.7 9.4 10.8 6.0

Mah Sing Hold 2.15 4,129.0 2.22 9.2 10.2 8.8 1.4 1.1 15.0 13.8 4.6

SP Setia Buy 3.46 8,796.3 4.07 20.7 12.9 10.6 1.1 1.1 7.1 11.0 5.7

Sunway Hold 3.55 6,207.7 3.29 10.9 10.9 11.4 1.0 1.0 10.0 9.2 1.9

UEM Sunrise Hold 1.21 5,490.3 1.27 11.4 16.4 13.4 0.9 0.8 7.6 5.1 2.4

Simple avg 4,787.0 20.2 17.4 12.0 1.1 1.0 8.5 8.7 3.5

Source: Maybank KE

(Unchanged)NEUTRAL

Wong Wei Sum, CFA

(603) 2297 8679

[email protected]

May 19, 2015 2

Malaysia Property

Cautious buying mood prevails

The recent Home & Property Investment Fair by iProperty.com held on 17-

19 April in Kuala Lumpur Convention Centre was well represented by most

listed developers - Eco World, SP Setia, Tropicana, WCT Land, Titjaya

Land, Tropicana, UEM Sunrise, Hua Yang, Paramount, MRCB Land and

Sunsuria - and/or their subsidiaries. The soon-to be-listed Aspen Group

(one of the largest land owners in Batu Kawan, Penang mainland) was

there for the first time to showcase its Aspen Vision City project in Batu

Kawan.

Apart from discussions with the property developers‟ sales forces, we also

conducted our own survey on 35 randomly selected visitors of various age

groups during the property fair. We tried to identify the impact of GST

implementation on buying decision and buyers‟ sentiment as well as the

current trends in property demand with our questions focusing on buyers‟

purchase decision, preferred products, choice locations, key considerations

and concerns. The key findings of our survey are:

1) Buyers sentiment weakens, financing is an issue

While 77% of the respondents expected property prices to trend up further,

only 63% intended to buy at least one property over the next 12 months (a

decline from our previous pre-GST survey of 80% in June 2014 involving 30

respondents) as some of the respondents are adopting a wait-and-see

attitude. Close to half of the respondents (46%) faced difficulties in

securing mortgage loans.

Elsewhere, price discounts/rebates ranging from 5%-17% (depending on

furnishing/renovation packages chosen; GST will be charged on the

furnishing/renovation packages for residential properties) were offered

during the property fair, we observed.

Our views:

Confirm no rush into property purchases pre-GST. During our 2-days

at the property fair, we observed the fair had thinner crowds and was

relatively quiet as compared to what we observed in the previous fairs

in June 2014 and July 2013. Our conversations with property agents/

sales staff confirmed a known fact - that actual sales have been

lacklustre since 2H14 and the buying mood have been cautious with

most buyers putting home purchases on hold. A few of the agents/sales

staff admitted that there was no rush into property purchases pre-GST

implementation on 1 April, within our expectation. Key reasons

attributing to the lacklustre sales include tighter lending conditions by

the banks and weaker consumer sentiment on more subdued economic

outlook dragged by lower crude oil prices and the weaker MYR vs. USD.

We remain cautious on the Malaysia property sector and expect the

macro headwinds (GST implementation, volatile crude oil prices) and

prolonged tightening property and lending measures to continue

weighing on buyers‟ sentiment. The slowdown in demand could last

between nine months to two years, we believe.

May 19, 2015 3

Malaysia Property

Property data also shows weakening demand. Claims by the property

agents/sales staff are also confirmed by official figures released by

NAPIC. Latest statistics show that the value of residential property

transactions for the country had fallen by 7% QoQ in 4Q14 (3Q14: +4%

QoQ, 4Q13: +7% QoQ) while on YoY basis, property transactions

recorded a lower growth of 2% (3Q14: +17% YoY, 4Q13: +15% YoY).

Price wise, NAPIC‟s statistics also showed signs of easing with the

House Price Index (HPI) contracting marginally by 0.2% QoQ in 4Q14.

The official numbers provided by NAPIC did not capture the rebates/

discounts provided, we believe. The 1Q15 statistics are expected to be

release in June-July.

Contrary to the general expectation of higher residential property

prices post-GST, we expect flat growth or marginal decline in property

prices as: 1) most developers have already re-priced or re-cost their

products to include GST in 2014, ahead of the GST implementation this

April, 2) property price is a function of market forces – demand and

supply. Developers may have to offer more discounts/rebates to entice

property buyers in a weak market environment and 3) declining

housing affordability (residential properties) may put downward

pressures on property prices. Property price growth of 11% CAGR

between 2009-2014 was above income growth of 6.9%, driven by cheap

financing, ample of liquidity and attractive marketing incentives by

the developers after the global financial crisis.

Malaysia’s residential property transactions up 2% YoY (in value) but down 7% YoY (units) in 4Q14

Source: CEIC

-30%

-20%

-10%

0%

10%

20%

30%

40%

50%

60%

Unit Value

(YoY growth)

May 19, 2015 4

Malaysia Property

QoQ, Malaysia’s residential property transactions declined by 5% (in units) and 7% (value) in 4Q14

Source: CEIC

Property prices softened: 4Q14 Malaysia House Price Index (HPI) up 7% YoY but down 0.2% QoQ following queue from the decline in property transactions

Source: CEIC

-40%

-30%

-20%

-10%

0%

10%

20%

30%

40%

50%

Unit Value

QoQ growth

80

90

100

110

120

130

140

150

160

170

180

190

200

210

220

230

240

250

260

270

Malaysia KL Selangor Penang Johor

May 19, 2015 5

Malaysia Property

Buyers put off by tougher mortgage checks. Close to half of our

respondents (46%) were facing difficulties in securing mortgage loans

as most of them are below 30 years old (57%; relatively low income

earners) and many already own at least one property (63%). This

implies limited room to gear up for additional properties.

Our conversations with the bankers/sales people during the property

fair revealed that the loan rejection rate remains high at 40-50%

(depending on product types; affordable housing, where the buyers are

largely the first-time/genuine home buyers, has a lower loan rejection

rate) compared to 10-20% in our 2012-2013 surveys. To lower the

cancellation in unit booking on loan rejection, most bankers/sales

people have started conducting brief checks with the potential buyers

on their credit backgrounds, prior to purchase commitments.

The latest banking statistics data are also in line with our findings from

the property fair. The latest data show that residential mortgage and

non-residential loan applications failed to pick up in Mar 2015 before

the implementation of GST in Apr 2015 where the 3-month moving

average (3MMA) was down 3.7% YoY and 0.5% YoY respectively.

Meanwhile, the 3MMA loan approvals also declined YoY for residential

(-4.5%) and non-residential (-1.3%) property. Judging from our survey

and discussions with sales people and developers as well as bankers,

we expect April statistics for residential and non-residential mortgage

applications/approvals to remain in negative growth as buyers appear

to be less inclined to rush into buying properties post-GST.

3M MA (Jan - Mar 2015) residential mortgage applications declined at a slower pace (-3.7% YoY) compared to Nov-Dec 2014 (-17.4 to -17.7% YoY)

3M MA (Jan - Mar 2015) non-residential mortgage applications declined by 0.5% YoY after a positive 2% in Feb 2015

Source: BNM Source: BNM

3M MA residential property approvals down 4.5% YoY 3M MA non-residential property approvals down 1.3% YoY

Source: BNM Source: BNM

-40.0%

-20.0%

0.0%

20.0%

40.0%

60.0%

80.0%

100.0%

Mar-07 Mar-09 Mar-11 Mar-13 Mar-15

3M MA (YoY chg mortgage application)

(% YoY Chg)

-40.0%

-20.0%

0.0%

20.0%

40.0%

60.0%

80.0%

100.0%

Mar-07 Mar-09 Mar-11 Mar-13 Mar-15

3M MA (YoY chg in non residential property application)

(% YoY Chg)

-50.0%

0.0%

50.0%

100.0%

3M MA (YoY chg in residential property approvals)

(% YoY Chg)

-50.0%

0.0%

50.0%

100.0%

150.0%

3M MA (YoY chg in non-residential property approvals)

(% YoY Chg)

May 19, 2015 6

Malaysia Property

2) Still investment buying intention despite stricter ruling;

policy easing is unlikely

63% of our respondents already own at least one property and just as many

were looking to buy new properties for investment (57% versus 41% in our

survey in June 2014) instead of for owner occupation.

Our views:

Undeterred by stricter property cooling/lending measures. We were

not surprised by the survey outcome as 57% of our respondents are

aged below 30 years old and are in the beginning stage of wealth

accumulation where real estate is usually a popular investment choice.

Property cooling measures in recent years

Mth-Year Property cooling measures

Jan-10 Budget 2010 reintroduced the RPGT at 5% for properties sold within the first 5

years of sale. This was announced in Sept 2009 and took effect in Jan 2010

Nov-10 LTV ratio for third residential properties reduced from 90% of property value

to 70% (remains at 90% for the first two properties)

Oct-11 Budget 2012 raised RPGT to 10% within first 2 years of sale and maintains at

5% between year 3 and 5 of sale

Jan-12 BNM introduced responsible lending measures where loans are disbursed based

on net income instead of gross income

Sep-12 Budget 2013 raised RPGT to 15% within first 2 years and 10% between year 3

and 5 of sale

Oct-13 Budget 2014 raised RPGT to 30% within first 3 years and 15-20% between year 4 and 5 of sale; ban on developer interest bearing scheme (DIBS); higher floor

price for foreign buyers; developers are required to display detailed selling

prices

Source: BNM, Budget 2010-2014

A cut in interest rate may not boost property demand. Our

economist expects the benchmark overnight policy rate (OPR) to stay

at 3.25% throughout 2015 for now, pending the release of 2Q15 GDP

data in Sep 2015 which would give a better indication on the impact of

the GST on domestic demand and inflation. Even if there is a potential

cut in interest rate, we do not expect a significant impact on property

demand (a 25bp OPR cut would reduce monthly instalment by MYR111

[-3.3%] for a property worth MYR800k assuming 90% loan financing at

an initial base rate of 4.45% and a 35-year loan tenure). In our view,

the key determining factor of property demand for now should be the

ability to secure mortgages, instead of interest rate, which is still

accommodative and attractive. Also, a lower OPR indicates a weaker

economic outlook which may not bode well for buyers‟ sentiment.

Policy easing unlikely. While the property sector has started showing

signs of weakness, we do not expect any policy easing to happen in the

short-term especially when household (HH) debt has remain high at

87.9% of nominal GDP at end-2014. This is despite the central bank‟s

continuous efforts in reining in HH debt expansion and curbing

speculative demand.

May 19, 2015 7

Malaysia Property

Household debt has been on the uptrend since 2008

Source: BNM, CEIC

3) Demand trend is the same - still on the landed

Landed properties priced <MYR1m/unit continue to receive strong demand,

based on our latest survey.

Our views:

Slowdown in luxury/high-rise segments. Our discussions with property

agents/sales staff revealed that the demand for high-rise general/high-

rise luxury properties remain weak especially those priced >MYR1m

each. See Hoy Chan‟s the Potpourri @ Ara Damansara (MYR800psf) was

only 60% sold since its launch in 2014 while another high-rise project in

Jalan Ipoh offers discounts of up to 17% for an semi-furnished unit, we

were told. Most developers under our coverage have continued to

focus on affordable housing and landed properties and put their high-

end/luxury projects on the backburner.

Follow the MRT/LRT lines. Rising prices are barriers to own properties

in the city centre. As such, 40% of the respondents prefer to stay in

sub-urban areas and this could lead to demand on properties with close

proximity to public transportation stations in the sub-urban areas,

albeit public transportation has yet to feature prominently as a

consideration on the Malaysian homebuyers‟ priority list for now.

A few new property hotspots have emerged in the southern Klang

Valley - Kajang, Semenyih, Bangi, Puchong South and Canal City. The

popularity of some of these areas will be enhanced by the upcoming

MRT/LRT lines. Beneficiaries include MKH Bhd (MKH MK), Eco World

Development (ECW MK), Mah Sing (MSGB MK), UEM Sunrise (UEMS MK)

and IOI Properties (IOIPG MK).

May 19, 2015 8

Malaysia Property

4) Aspen Group, a rising star in the northern Malaysia

During our 2-days at the property fair, we observed that Aspen Group‟s

(AG) property booth attracted quite a considerable crowd. Aspen Group is

a Penang-based property development and real estate investment group

with focus on affordable housing. The company, which is seeking for an IPO

listing by end-2015, is one of the largest land owners in Batu Kawan, an

upcoming and new growth area in Penang mainland. Batu Kawan is where

the 2nd Penang Bridge, opened last year, connects from the mainland.

During the property expo, AG showcased its maiden project in Batu Kawan

- Aspen Vision City Phase 1 comprising 441 units of shop offices (MYR776m

in GDV; from MYR1.2m/unit onwards). Phase 1 is 80% booked, we were

told. Aspen Vision City, which has an estimated GDV of MYR8b, will

comprise an IKEA store, a shopping mall, an international school, office

towers, shops, a hospital and hotels. The planned development period is

over 10 years.

Aspen Group’s Aspen Vision City in Batu Kawan

Source: Maybank KE

We were told that Aspen Vision City is 80% booked

Source: Maybank KE

May 19, 2015 9

Malaysia Property

Valuations and recommendations

The sector‟s lacklustre near-term outlook has resulted in a 10.5% fall in the

property index since Nov 2014. While the valuations of some property

stocks appear attractive, we advise investors to be selective, focusing on

those with healthy balance sheets and low exposure to Iskandar Malaysia

hotspots. The sector lacks of strong re-rating catalyst and the demand

slowdown could last for 9-24 months, we believe. Some developers

however expect demand to start picking up in 2H15 instead. The negative

lag impact on earnings will start to feature from 2H16-FY17, we estimate.

We think the most notable downside risks for the developers include: 1)

higher-than-expected GST provisioning which would put pressure on

operating margins. Thus far, SP Setia is the only company under our

coverage that has made provisions for the GST impact on ongoing projects,

and 2) weaker-than-expected sales. Tropicana has recently cut its sales

target by 30% after its weak 1Q15 results, we understand.

That said, we believe at this level, the share prices have already factored

in a lot of negative news flow and expectations for the sector. Hence, the

downside risks highlighted in the preceding paragraph should be contained.

From a top-down approach, we maintain our NEUTRAL call on the sector.

We do not expect any near-term policy changes with regard to mortgage

applications and approvals, and government cooling measures.

Stock wise, property stocks under our coverage are presently trading at an

average 35-63% discount to our RNAV estimates. We advocate investors to

go defensive in stock selection. SP Setia (SPSB MK; BUY; MYR4.07 TP) is our

only BUY pick for the property sector.

SP Setia (SPSB MK; BUY; MYR4.07 TP): We like SPSB for its: 1)

earnings defensiveness backed by MYR10.2b of unbilled sales as at end-

Jan 2015 (1.8x of our FY10/15 revenue forecast) and strategically

located landbank secured at cheap land costs (which allows it to be

more flexible in pricing and product launches in times of uncertainty),

2) dividend payout policy of 50% (which offers a 4.4% net yield for the

current year, based on our earnings estimates). SPSB has been paying

more than 60% of its net profit over the last few years.

The „leadership/management‟ concerns are over, in our view. Staff

turnover has stabilised with a well-planned transition strategy being

executed since last year. A potential M&A is another catalyst.

May 19, 2015 10

Malaysia Property

Valuations

Stocks

Price (MYR/share)*

(a)

RNAV (MYR/share) (b)

P/RNAV TP (MYR/sh)

(b) x (c )

Upside (%)

Rating

Our valuation basis - P/RNAV Current

P/RNAV (x)

Our valuations

- P/RNAV (x) ( c)

Eco World

(ECW MK)

1.73 2.67 0.65 0.73 1.95 12.7 HOLD We value Eco World at 0.73x

P/RNAV (-0.1x to SPSB's historical P/RNAV mean).

While we like its strong

management team and track

record, its high land costs (since most of the land was

acquired during the property

upcycle in 2012-2013) may reduce its flexibility in

competitive pricing during

times of uncertainty. Glomac

(GLMC MK)

0.95 2.07 0.46 0.50 1.03 8.7 HOLD We value Glomac at its

historical P/RNAV mean of

0.5x.

Mah Sing

(MSGB MK)

2.15 3.47 0.62 0.64 2.22 3.3 HOLD We value Mah Sing at 0.64x

P/RNAV (-0.15x below its

historical mean). The discount is to reflect its

considerable exposure (59%

of its remaining GDV as at Sep 2014) to the high-rise

property segment e.g. Icon

City, Southville City

(offices), Puchong land, Southbay City and KKCC.

Mah Sing has the highest foreign shareholdings among

the stocks under our

coverage.

SP Setia

(SPSB MK)

3.46 5.58 0.62 0.73 4.07 17.7 BUY We value SP Setia at a

discounted valuation - 0.73x

P/RNAV, which is 0.1x below its historical mean. Potential

re-rating catalysts include

more clarity from PNB on management succession and

asset injections plans.

Sunway

(SWB MK)

3.55 5.57 0.64 0.590 3.29 -7.4 HOLD Large exposure to the luxury

property segment and Iskandar Malaysia, which is

currently facing stiff

competition with the entry of Chinese developers. We

value Sunway at its historical

P/RNAV mean of 0.59x. As

compared to UEMS, Sunway has a more diversified and

recurring earnings base.

UEM

Sunrise

(UEMS MK)

1.21 3.26 0.37 0.39 1.27 5.1 HOLD Large exposure to the

increasingly crowded

Iskandar Malaysia while its Klang Valley projects are

mostly high-end products.

We value UEM Sunrise at

0.39x P/RNAV (-0.2x below its historical mean).

* as at 18 May 2015

Source: Maybank KE

May 19, 2015 11

Malaysia Property

Foreign shareholdings for stocks under our coverage remain flat / declining

Source: Companies

5.6

6.0

6.0

6.0 6.1

6.17 6.25 6.20 6.10 6.13 5.90

18.5 18.5 19.0 18.8 18.6 18.4 19.218.5

17.6 17.717.1

8.4

8.5

8.0 8.0 8.1 8.1 8.1 8.2 8.28.1

8.06.86.7 6.8 6.8 6.9

7.58.1

8.4 8.48.8 8.7

13.6 13.4 13.2 13.1 13.0 13.1 13.1212.77 12.8 12.85 13.01

3.73.3 3.2 3.2

2.60.7 0.6 0.6 0.6

0.0

5.0

10.0

15.0

20.0

25.0

June 14 July 14 Aug 14 Sep 14 Oct 14 Nov 14 Dec 2014 Jan 15 Feb 15 Mar 15 Apr 15

Glomac Mah Sing SP Setia Sunway^ UEM Sunrise Eco World(%)

May 19, 2015 12

Malaysia Property

Our April 2015 survey: Respondents’ profile

Respondents’ profile: Mostly locals Age profile: Well split between the young and middle-aged

Source: Maybank KE Source: Maybank KE

Job profile: Judging from the job profile, 60% of our respondents (business men, managers and professionals) could be the high-income earners

Number of properties in hand: Most respondents have already at least one property in hand


94%

6%

Malaysian Non-Malaysian

34%

23%

17%

3%

3%

6%

14%

20-25 26-30 31-35 36-40 41-45 46-50 >50

9%

37%

3%

26%

14%

11%

Managerial professional

Government servants executive

Business Students/retiree

37%

37%

3%

23%

None 1 unit 2 units >2 units

May 19, 2015 13

Malaysia Property

Our April 2015 survey: Buying sentiment, preferred products, key considerations and concerns

Buying properties within the next 12 months? Most respondents were looking to buy a property within the next 12 months even though 63% already have at least one property in hand

Do you expect property prices to go up further? YES, from the majority


Preferred product type: Most of the respondents were looking to buy landed properties

Reason for purchase: Interestingly, many respondents were still looking to buy properties for investment despite the property curbs in place since early-Jan 2014


Do you face difficulties in securing mortgage loan? Close to half of the respondents said yes

Preferred location: Not a surprising response since we believe the majority of the respondents currently reside in Klang Valley


22

10

3

0

5

10

15

20

25

Yes No Not sure

Respondents' Choices

27

7

1

0

5

10

15

20

25

30

Yes No Not sure


13

27

7

0

5

10

15

20

25

30

High rise Landed Commercial

Respondents' choice

24

17

1

0

5

10

15

20

25

30

Investment Own use For kids


16 16

3

0

5

10

15

20

Yes No Not sure


34

1

42

0

5

10

15

20

25

30

35

40

Klang Valley Iskandar Malaysia Penang Overseas


May 19, 2015 14

Malaysia Property

Preferred location: Many opt for sub-urban areas due to the high pricing for city centre properties

Preferred type of properties: Landed property is still the preferred choice


Preferred size: 1,001-1,500 sq.ft. was the most common size range for our respondents

Budget for property: Units priced below MYR1m are the focus of most respondents. Most developers under our coverage have been switching focus to affordable housing segment


Concerns: Pricing and financing were the key concerns of the 35 respondents

Key considerations: Location, pricing, security were the key considerations, similar to the outcome of our survey in June 2014


18

12

0

5

10

15

20

City Sub-urban


13

27

7

0

5

10

15

20

25

30

High rise Landed Commercial

Respondents' choice

1

14

18

78

0

5

10

15

20

<500 sq.ft. >500-1,000 sq.ft. 1,001-1,500 sq.ft. 1,501-2,000 sq.ft. >2,000 sq.ft.


13

19

32 2

0

5

10

15

20

< MYR500k MYR500k-MYR1.0m MYR1.05-MYR1.5m MYR1.51-MYR2.0m >MYR2.0m


22

1110

34

00

5

10

15

20

25

Pricing/Budget Financing Hard to find goodproperty/location

Developer'screditability

BNM stricter ruling Security


20

26

9 9

1

10

0

5

10

15

20

25

30

Pricing/Budget Location Developer'screditability

Infrastructure Marketingincentives

Security


May 19, 2015 15

Malaysia Property

Photos from the Home & Property Investment Fair by iProperty.com

Participants in iProperty Expo on 17 Apr-19 Apr 2015, KL Convention Centre

Saturday (18 Apr 2015), 2.30-2.45pm - The crowd was significantly smaller compared to the property expo we attended the last two years


Scene on Saturday (18 Apr 2015), 2.45pm Scene on Saturday (18 Apr 2015), 5.30pm


Scene on Saturday (18 Apr 2015), 5.30pm Scene on Sunday (19 Apr 2015), 3.30-5.00pm


May 19, 2015 16

Malaysia Property

Scene on Sunday (19 Apr 2015), 3.30-5.00pm Scene on Sunday (19 Apr 2015), 3.30-5.00pm


Some familiar names

SP Setia WCT Land


Titijaya UEM Sunrise


May 19, 2015 17

Malaysia Property

Newcomer –Aspen Group Eco World


May 19, 2015 18

Malaysia Property

Peer comparison 1 Company Eco World UEMS SP Setia Sunway Mah Sing Glomac

FYE Oct Dec Oct Dec Dec Apr

Share price (MYR/sh) @

18 May 2015 1.73 1.21 3.46 3.55 2.15 0.95

Number of shares ( m

shares) 1970.2 4,537.4 2,542.3 1,748.6 1,920.5 726.8

Market capitalisation

(MYR m) 3,408.4 5,490.3 8,796.4 6,207.5 4,129.1 690.5

Beta 2.7 1.5 0.5 0.8 0.7 0.8

Target price (MYR/sh) 1.95 1.27 4.07 3.29 2.22 1.03

RNAV (MYR/sh) 2.67 3.26 5.58 5.57 3.47 2.07

Our TP: premium /

discount to RNAV (%) -historical mean

-27 -61 -27 -41 -36 -50

Current disc/ premium

to RNAV (%) -35 -63 -38 -36 -38 -54

Potential upside (%) 12.7 5.1 17.7 -7.4 3.3 8.5

Recommendation HOLD HOLD BUY HOLD HOLD HOLD

Business background A fast-growing

property group

built up by former SP Setia

directors and

executives

One of the

largest

developers in Malaysia and land

owner in Iskandar

Malaysia

One of the

leading property

players in Malaysia; It is the

developer of

reputable Setia Alam and Setia

Eco Park

projects;

Currently, it has property projects

in Malaysia,

Singapore, Australia, UK,

China and

Vietnam

One of the

leading property

and construction groups in

Malaysia. It is

also the sponsor of SunREIT.

Reputable

projects

including Bandar Sunway

township. It is

one of the largest land owners in

Iskandar Malaysia

Developer of

Southville City,

Icon City and M City. It is famous

with its fast-

turnaround strategy

Small cap bumi-

developer. Key

projects include Lakeside

Residences and

Bandar Saujana Utama. Close to

50% of its

remaining GDV is

from affordable township

developments

Remaining GDV (MYR b) 61.2 103.3 73.6 30.3 43.8 7,636.0

Remaining landbank

(acres) 4,516 14,594.5 4,610.5 2,200.3 3,651 -

Company sales target

(MYR m ) - 2012 - 2,000.0 4,000.0 1,200.0 2,500.0 500.0

- 2013 - 3,000.0 5,500.0 1,400.0 3,000.0 800.0

- 2014 2,000.0 2,000.0 5,000.0 1,300.0 3,600.0 500.0

- 2015 3,000.0 2,000.0 4,600.0 1,200.0 3,432.5 600.0

Actual sales (MYR m)

- 2012 - 2,460.0 4,230.0 1,560.0 2,503.0 663.0

- 2013 - 2,989.1 8,241.0 1,400.0 3,001.0 802.0

- 2014^ 3,186.5 2,443.0 4,623.0 1,300.0 3,432.5 504.0

- 2015 621.0 0.0 1,019.0 0.0 0.0 86.0

% achieved - 2012 - 123% 106% 130% 100% 133%

- 2013 - 100% 150% 100% 100% 100%

- 2014 159% 122% 92% 100% 95% 101%

- 2015 21% 0% 22% 0% 0% 14%

Sales growth (%) - 2012 - 23% 28% -13% 11% 59%

- 2013 - 22% 95% -10% 20% 21%

- 2014 - -18% -44% -7% 14% -37%

Source: Companies, Maybank KE

May 19, 2015 19

Malaysia Property

Peer comparison 2 Company Eco World UEMS SP Setia Sunway Mah Sing Glomac

Unbilled sales MYR3.1b

unbilles sales as

at Jan 15, or

3.9x of our FY10/15

property

revenue

forecast

MYR3.9b unbilles

sales as at Dec

2014, or 2.6x of

our FY15 property revenue

forecast

MYR10.2b as at

end-Jan 2015,

or 1.8x of our

FY15 property revenue

forecasts

MYR1.9b as at

end-Dec 2014, or

1.1x of our FY15

property revenue forecasts

MYR5.3b as at

end-Dec 14, or

2.0x of our FY15

property revenue forecasts

MYR537m as at

end-Jan 2015, or

0.8x of our

FY4/15 property revenue forecasts

Foreign shareholdings (%)

## 0.6 13.0 8.0 8.7 17.1 5.9

Official/unofficial div

payout policy (%) NA 20-40% 50.0 20-30 40.0 Unofficial 40%

Forecasts EPS - 2013A 7.7 13.0 17.8 30.6 20.2 14.8

- 2014A 2.8 10.6 16.2 34.2 23.4 12.9

- 2015F 3.0 7.4 25.6 34.3 21.0 11.6

- 2016F 6.8 9.0 32.7 34.5 24.4 16.6

NDPS - 2013A 0.4 4.0 10.6 10.0 8.0 4.2

- 2014A 0.0 3.0 9.7 11.0 6.5 4.9

- 2015F 0.0 2.4 15.3 6.9 8.4 3.5

- 2016F 0.7 2.9 19.6 6.9 9.8 5.0

NTA* 0.65 1.40 2.37 3.44 1.54 1.27

Valuation

Earnings growth (%) - 2013 544% 26% -6% 13% -1% 14%

- 2014 -63% -19% -9% 12% 16% -13%

- 2015 6% -30% 58% 0% -10% -10%

- 2016 128% 22% 28% 0% 16% 43%

PER (x) - 2013 22.6 9.3 19.4 11.6 10.6 6.4

- 2014 61.1 11.4 21.3 10.4 9.2 7.4

- 2015** 32.7 16.4 13.5 10.3 10.2 8.2

- 2016** 14.3 13.5 10.6 10.3 8.8 5.7

Net div yield (%) - 2013 0.3 3.3 3.1 2.8 3.7 4.4

- 2014 0.0 2.5 2.8 3.1 3.0 5.2

- 2015** 0.0 2.0 4.4 1.9 3.9 3.7

- 2016** 0.7 2.4 5.7 1.9 4.6 5.3

P/NTA (x) 2.7 0.9 1.5 1.0 1.4 0.7

P/RNAV (x) 0.65 0.37 0.62 0.64 0.62 0.46

Net gearing (x)* 1.67 0.26 0.38 0.30 0.36 0.34

Major shareholders @ Liew Tian Xiong

(16.4%), EW Dev

Holdings

(38.5%), Syabas

Tropikal (30.7%)

Khazanah (66.1%), EPF

(5.0%), LTH

(5.1%)

PNB (68.2%), KWAP (9.4%)

Cheah family (49.8%), PNB

(7.2%)

Tan Sri Leong (29%), EPF (6.1%)

Tan Sri Dato' Mohamed Mansor

bin Fateh Din

(19.9%), Dato'

Fateh Iskandar bin Tan Sri Dato'

Mohamed Mansor

(15.6%), Datuk Fong Loong Tuck

(16.0%)

^ Eco World's 13MFY10/14 sales, ^^ Eco World and SP Setia's FYE is Oct while Glomac's FYE is April

Source: Companies, Maybank KE

May 19, 2015 20

Malaysia Property

SWOT analysis

Eco World UEMS SP Setia Sunway Mah Sing Glomac

Strength Strong

management team (former SP

Setia staffs) and

proven track

record (in SP Setia); Large

exposure in

township developments

e.g. EcoMajestic

at Semenyih and

projects in Tebrau, Iskandar

Malaysia and

mainland of Penang; mostly

landed

properties; Strong and loyal

followers (from

SP Setia)

Strong political

links (backed by Khazanah);

Largest land

owner in

Iskandar Malaysia with strategically

located landbank

(mostly freehold + close proximity

to the Second

Link); Strong

Sunrise brandname and

expertise in

high-rise integrated

development

Strategically

located landbank (urban

redevelopment

projects i.e. KL

Eco City, Setia Federal Hill +

resilient

townships like Setia Tropika and

Setia Alam);

backed by huge

unbilled sales of MYR10.2b

Strong Sunway

brandname; Diversified

earnings base e.g

construction and

quarry businesses;

Supported by

steady rental income from

investment

properties and

dividend income from 34%-owned

Sunway REIT;

Singapore projects are

supported by

strong JV partner, Hoi Hup

Strong Mah Sing

brandname; Aggressive and

flexible

management

team; Fast turnaround

strategy which

means lower holding cost and

strong cash flow

One of the few

bumi-developers with strong

political links;

Large exposure

in township developments -

Bandar Saujana

Utama, Lakeside Residence,

Saujana Rawang

and Sepang

Weakness Demanding valuations (from

PER perspective)

as earnings will

only start coming in from 2015

onwards

(progress billings), at the

earliest, as first

phase of EcoSky

and EcoBotanic projects were

only launched in

Sep 2013; Higher net gearing as no

significant

earnings contributions in

the short term;

Relatively lower

margin due to heavy marketing

/ brand

awareness activities. Eco

World Dev S/B

was only set up in 2013. Also,

most of the lands

were acquired

over the last 1.5 years

Long gestation period and

considerable

infrastructure

works for Gerbang

Nusajaya;

Concentration risk as majority

of total landbank

and remaining

GDV are in Iskandar

Malaysia; Major

shareholder (Khazanah) may

have outright

decision-making power especially

in land sale;

Volatile earnings

performance due to heavy reliance

on land sales

Illiquid; Strong sales / earnings

performance

overshadowed by

execution management

risk; exposure to

currency risk given 21% of its

remaining GDV is

derived from its

UK and Vietnam projects.

Mostly high-end products, less

exposure in

affordable

township developments;

its recently-

acquired Pendas North and

Pendas South

land in Medini

require considerable

infrastructure

capex; >50% of total GDV is from

its Medini

project – Sunway Iskandar

Lack of a flagship project

which can define

Mah Sing; High

foreign shareholdings

may add to the

stock's vulnerability

amid volatility in

the external

markets

Small market capitalisation

Source: Maybank KE

May 19, 2015 21

Malaysia Property

SWOT analysis

Eco World UEMS SP Setia Sunway Mah Sing Glomac

Opportunity Potential RNAV-

accretive land

acquisition;

listing of Eco World SPAC (for

international

projects)

Potential RNAV-

accretive land

acquisitions;

better transportation

system between

Johor Bahru and Singapore;

Potential RNAV-

accretive land

acquisitions; the

KV MRT circle line may benefit

Setia Federal Hill

projects

Potential

jobwins from

MRT 2nd and 3rd

lines; potential RNAV-accretive

land acquisitions

Potential RNAV-

accretive land

acquisitions; the

KV MRT circle line may benefit

M City project

Potential RNAV-

accretive land

acquisition;

potential enbloc sales in Glomac

Damansara and

Plaza Kelana Jaya IV

Threat Downturn in

property sector

Political and

execution risks

involving

bilateral relations

between

Malaysia-Singapore;

Increasing

competition from local and

foreign

developers

especially in Iskandar

Malaysia's

hotspots; Downturn in

property sector

Downturn in

property sector;

Country and

currency risks (with projects in

UK, Australia,

Singapore and Vietnam);

Uncertainties in

China property

market (10% of

its remaining GDV is from

China);

Increasing competition

from local and

foreign developers

especially in

Iskandar

Malaysia; Downturn in

property sector

especially high-rise high-end

products

Downturn in

property sector

Downturn in

property sector

Source: Maybank KE

May 19, 2015 22

Malaysia Property

Research Offices

REGIONAL

Sadiq CURRIMBHOY

Regional Head, Research & Economics

(65) 6231 5836 [email protected]

WONG Chew Hann, CA

Regional Head of Institutional Research


ONG Seng Yeow

Regional Head of Retail Research

(65) 6432 1453

[email protected]

ECONOMICS

Suhaimi ILIAS Chief Economist Singapore | Malaysia


Luz LORENZO Philippines (63) 2 849 8836

[email protected]

Tim LEELAHAPHAN Thailand (66) 2658 6300 ext 1420

[email protected]

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

STRATEGY

Sadiq CURRIMBHOY

Global Strategist


Willie CHAN

Hong Kong / Regional


MALAYSIA

WONG Chew Hann, CA Head of Research (603) 2297 8686 [email protected] • Strategy

Desmond CH’NG, ACA (603) 2297 8680 [email protected] • Banking & Finance

LIAW Thong Jung (603) 2297 8688 [email protected] • Oil & Gas Services- Regional

ONG Chee Ting, CA (603) 2297 8678 [email protected] • Plantations - Regional

Mohshin AZIZ (603) 2297 8692 [email protected] • Aviation - Regional • 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

LEE Yen Ling (603) 2297 8691 [email protected] • Building Materials • Glove • Ports • Shipping

CHAI Li Shin, CFA (603) 2297 8684 [email protected] • Plantation • Construction & Infrastructure

Ivan YAP (603) 2297 8612 [email protected] • Automotive • Semiconductor • Technology

Kevin WONG (603) 2082 6824 [email protected] • REITs • Consumer Discretionary

LIEW Wei Han

(603) 2297 8676 [email protected] • Consumer Staples

LEE Cheng Hooi Regional Chartist (603) 2297 8694 [email protected]

Tee Sze Chiah Head of Retail Research


HONG KONG / CHINA

Howard WONG Head of Research (852) 2268 0648 [email protected] • Oil & Gas - Regional

Alexander LATZER (852) 2268 0647 [email protected] • Metals & Mining – Regional

Benjamin HO (852) 2268 0632 [email protected] • Consumer & Auto

Jacqueline KO, CFA (852) 2268 0633 [email protected] • Consumer Staples & Durables

Jessica NG (852) 2268 0678 [email protected] • Utilities & Renewable Energy

Ka Leong LO, CFA (852) 2268 0630 [email protected] • Consumer Discretionary & Auto

Mitchell KIM (852) 2268 0634 [email protected]

• Internet & Telcos

Osbert TANG, CFA (86) 21 5096 8370 [email protected] • Transport & Industrials

Ricky WK NG, CFA (852) 2268 0689 [email protected] • Utilities & Renewable Energy

Steven ST CHAN (852) 2268 0645 [email protected] • Banking & Financials - Regional

Warren LAU (852) 2268 0644 [email protected] • Technology – Regional

INDIA

Jigar SHAH Head of Research

(91) 22 6632 2632 [email protected]

• Oil & Gas • Automobile • Cement

Anubhav GUPTA


• Metal & Mining • Capital Goods • Property

Vishal MODI


• Banking & Financials

Abhijeet KUNDU


• Consumer

Neerav DALAL


• Software Technology • Telcos

Ritesh POLADIA


• Media & Entertainment

SINGAPORE

NG Wee Siang Head of Research (65) 6231 5838 [email protected] • Banking & Finance

Gregory YAP (65) 6231 5848 [email protected] • SMID Caps • Technology & Manufacturing • Telcos

YEAK Chee Keong, CFA (65) 6231 5842 [email protected] • Offshore & Marine

Derrick HENG, CFA (65) 6231 5843 [email protected]

• Transport • Property • REITs (Office)

Joshua TAN (65) 6231 5850 [email protected] • REITs (Retail, Industrial)

WEI Bin (65) 6231 5844 [email protected] • Commodity • Logistics • S-chips

John CHEONG (65) 6231 5845 [email protected] • Small & Mid Caps • Healthcare

TRUONG Thanh Hang (65) 6231 5847 [email protected] • Small & Mid Caps

INDONESIA

Wilianto IE Head of Research (62) 21 2557 1125 [email protected] • Strategy

Rahmi MARINA (62) 21 2557 1128 [email protected] • Banking & Finance

Aurellia SETIABUDI (62) 21 2953 0785 [email protected] • Property

Isnaputra ISKANDAR (62) 21 2557 1129 [email protected] • Metals & Mining • Cement

Pandu ANUGRAH (62) 21 2557 1137 [email protected] • Infra • Construction • Transport• Telcos

Janni ASMAN (62) 21 2953 0784 [email protected] • Cigarette • Healthcare • Retail

Adhi TASMIN (62) 21 2557 1209 [email protected] • Plantations

PHILIPPINES

Luz LORENZO Head of Research (63) 2 849 8836 [email protected] • Strategy • Utilities • Conglomerates • Telcos

Lovell SARREAL (63) 2 849 8841 [email protected] • Consumer • Media • Cement

Rommel RODRIGO (63) 2 849 8839 [email protected] • Conglomerates • Property • Gaming • Ports/ Logistics

Katherine TAN (63) 2 849 8843 [email protected] • Banks • Construction

Ramon ADVIENTO (63) 2 849 8845 [email protected] • Mining

Michael BENGSON (63) 2 849 8840 [email protected]

• Conglomerates

Jaclyn JIMENEZ (63) 2 849 8842 [email protected] • Consumer

Arabelle MAGHIRANG (63) 2 849 8838 [email protected] • Banks

THAILAND

Maria LAPIZ Head of Institutional Research Dir (66) 2257 0250 | (66) 2658 6300 ext 1399 [email protected] • Consumer • Materials • Ind. Estates

Sittichai DUANGRATTANACHAYA (66) 2658 6300 ext 1393 [email protected] • Services Sector • Transport

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

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

Padon VANNARAT (66) 2658 6300 ext 1450 [email protected] • Strategy

Surachai PRAMUALCHAROENKIT (66) 2658 6300 ext 1470 [email protected] • Auto • Conmat • Contractor • Steel

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

Jaroonpan WATTANAWONG (66) 2658 6300 ext 1404 [email protected] • Transportation • Small cap

Chatchai JINDARAT (66) 2658 6300 ext 1401 [email protected]

• Electronics

VIETNAM

NGUYEN Thi Ngan Tuyen, Head of Retail Research (84) 8 44 555 888 x 8081 [email protected] • Food & Beverage • Oil&Gas • Banking

TRINH Thi Ngoc Diep (84) 4 44 555 888 x 8208 [email protected] • Technology • Utilities • Construction

PHAM Nhat Bich (84) 8 44 555 888 x 8083 [email protected] • Consumer • Manufacturing • Fishery

NGUYEN Thi Sony Tra Mi (84) 8 44 555 888 x 8084 [email protected] • Port operation • Pharmaceutical • Food & Beverage

May 19, 2015 23

Malaysia Property

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, connec ted 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.

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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

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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

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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.

May 19, 2015 24

Malaysia Property

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 8 January 2014, 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 8 January 2014, 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.

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.

May 19, 2015 25

Malaysia Property

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

50 North Canal Road

Singapore 059304

Tel: (65) 6336 9090

London Maybank Kim Eng Securities

(London) Ltd

5th Floor, Aldermary House

10-15 Queen Street

London EC4N 1TX, UK

Tel: (44) 20 7332 0221

Fax: (44) 20 7332 0302

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 Maybank 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 Maybank Kim Eng Securities Limited

4A-15+16 Floor Vincom Center Dong

Khoi, 72 Le Thanh Ton St. District 1

Ho Chi Minh City, Vietnam

Tel : (84) 844 555 888

Fax : (84) 8 38 271 030

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

Regional Head Sales Trading

[email protected]

Tel: (65) 6336-5157

US Toll Free: 1-866-406-7447

North Asia Sales Trading Alex Tsun

[email protected]

Tel: (852) 2268 0228

US Toll Free: 1 877 837 7635

Malaysia Rommel Jacob [email protected]

Tel: (603) 2717 5152

Thailand Tanasak Krishnasreni [email protected]

Tel: (66)2 658 6820

Indonesia Harianto Liong

[email protected] Tel: (62) 21 2557 1177

New York Andrew Dacey

[email protected] Tel: (212) 688 2956

India Manish Modi

[email protected] Tel: (91)-22-6623-2601

Vietnam Tien Nguyen [email protected]

Tel: (84) 44 555 888 x8079

Philippines Keith Roy [email protected]

Tel: (63) 2 848-5288

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

malaysia property neutral (unchanged) a post-gst survey

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