Maybank IB Research - ETP Economic Transformation...

Economics & Market Update 3 April 2012

SEE APPENDIX I FOR IMPORTANT DISCLOSURES AND ANALYST CERTIFICATIONS

Maybank IB Research PP16832/01/2013 (031128)

Report card time

Annual reports on transformation and strategic reform initiatives. PEMANDU released the inaugural Annual Report on the Economic Transformation Programme (ETP) which also contains the Strategic Reform Initiatives (SRI), and the second Annual Report on the Government Transformation Programme (GTP) yesterday. The ETP is now into the second year of implementation while the GTP is into its third year.

Progress so far – (1). By end-2011, 110 Entry Point Projects (EPPs) making up 83% of the 131 targeted EPPs under the ETP had been announced involving investment commitments totalling RM179.2b, that in turn are expected to raise RM129.5b in GNI and create 313,741 jobs. Of the 110 EPPs, 72 have taken off and 83% are either operational or have commenced work. As for the GTP, it has exceeded targets on all six National Key Result Areas (NKRAs) with outperformers being the Education, Crime and Corruption NKRAs.

Progress so far – (2). As for the SRI, the key milestones are the Competition Act 2010, which came into force on 1 January 2012, and additional tax revenues of RM25.3b in 2011 from improvements in tax compliance and collection via efficiency gains and better enforcement. The Government’s Role in Business SRI saw 11 out of a total 33 identified companies held by six Government Linked Investment Companies (GLIC) divested either via a listing, pare-down or outright sale in 2011.

Market-positive achievements. We are encouraged by the achievements so far. Programmes such as share divestments by the GLICs will raise market liquidity and breadth. Since early this year, the programme has progressed further with new share issuances by Malaysia Airports, which resulted in a paring down of Khazanah’s stake. The Greater KL/KV NKEA also saw significant progress, with RM10.5b worth of works awarded for the Sg Buloh-Kajang (SBK) MRT line. Within the oil, gas and energy NKEA, PETRONAS’ RM60b RAPID project in Johor saw the appointment Technip (of France) for front-end engineering design.

Nonetheless, there are still challenges. Key issues and challenges ahead include raising the bar on targets/KPIs and undertaking the big reforms. We feel that the ability of the GTP and ETP to broadly meet or exceed targets thus far is a function of realising the “low-hanging fruit”, “quantitative metrics” and “quick wins”. Going forward, “high-hanging fruit”, “qualitative metrics” and “tough fixes” will be the order of the day. A stronger mandate for the Prime Minister in the upcoming 13th General Election will be a major boost towards further reducing the implementation and execution risks on GTP, ETP and SRIs.

ETP & GTP

Suhaimi Ilias [email protected] (603) 2297 8682 Ramesh Lankanathan [email protected] (603) 2297 8685 William Poh [email protected] (603) 2297 8683

Wong Chew Hann [email protected] (603) 2297 8686

Table of Content

Page

Part 1: Report Cards 2

Part 2: Our Views 5

PART 3: Government Transformation Programme, Achievements and Targets

7

PART 4: Economic Transformation Programme, Achievements and Targets

9

Malaysia: GTP and ETP update

3 April 2012 of 27

PART 1: REPORT CARDS

Recap on ETP. The ETP, which was unveiled in Oct 2010, aims to catapult Malaysia into high-income nation status with a minimum Gross National Income (GNI) per capita of USD15,000 via RM1.4tr of investments over a period of 10 years (2011-2020) from 131 Entry Point Projects (EPPs) in 12 National Key Economic Areas (NKEAs i.e. sectors/industries). The ultimate target is to raise annual GNI to RM1.7tr (from RM739b in 2010) and generate 3.3m jobs by 2020.

ETP’s progress and achievements in 2011. By end-2011, 110 Entry Point Projects (EPPs – 83% of the 131 projects targeted) had been announced, involving investment commitments totalling RM179.2b that are expected to raise RM129.5b in GNI and create 313,741 jobs.

Of the 110 EPPs announced by end-2011, 72 have taken off and 83% are either operational or have commenced work.

Of the total RM179.2b in investment commitments, PEMANDU indicated that RM12.9b or 7.2% was realised in 2011 – slightly below the target of RM16b, leaving RM166.3b to be actualised from 2012 onwards. The bulk of the RM12.9b realized ETP investments last year were in E&E, agriculture (including palm oil & rubber) and services NKEAs (i.e. tourism, education, healthcare, business services, wholesale & retail, communication content & infrastructure). This year onwards, the big projects under the remaining NKEAs will be rolled out, namely the Mass Rapid Transit (MRT) under the Greater Kuala Lumpur (KL)/Klang Valley (KV) NKEA, and the EPPs under Oil, Gas & Energy NKEA, especially the development of marginal and deepwater oil fields, an independent deepwater petroleum terminal (in Pengerang, Johor), an LNG regasification project as well as business opportunities like the Refinery & Petrochemical Integrated Development (RAPID).

Tracking the ETP…

Key Variables Target Announced

2011-2020 by end-2011 % of Target

Number of EPPs 131 110 84.0

EPP Investments (RMb) 794.5 * 179.2 22.6

Incremental GNI (RMb) 961 129.5 13.5

New Job Creation 3.3m 313,741 9.5

* Difference with the total target of RM1.4tr reflects investments from non-EPPs and other business opportunities

Sources: PEMANDU (ETP Annual Report 2011), Maybank IB calculations

ETP’s economic impact and contributions. According to PEMANDU, the impact and contribution of the ETP to the economy in 2011 can be gauged from 4 main parameters: GDP growth, GNI, private investment and jobs. On these parameters, the ETP met or exceeded targets on the first three, and came close to meeting its employment target.

ETP Impact & Contribution to the Malaysian Economy in 2011

Target Achievement % of Target

Real GDP Growth (%) 5.0-6.0 5.1 100

Gross National Income (RMb) 797 830 * 104

Private Investment (RMb) 83 94 113

New Job Creation 330,000 313,741 95

* 71% or RM589b were from 11 NKEAs (ex-Greater KL/KV) Source: PEMANDU (ETP Annual Report 2011)


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Recap on GTP. The GTP, which was launched back in Apr 2009, represents an initiative by the Government to improve its performance and delivery in six National Key Result Areas (NKRAs) – reducing crime, improving urban public transport, providing rural basic infrastructure, education (improving student outcomes), social welfare (raising living standards of the low income households) and fighting corruption. In June 2011, the Government added Cost of Living as an additional (seventh) NKRA.

Overall, GTP exceeded targets on all NKRAs. PEMANDU reported the targets and KPIs set for 2011 in all the six NKRAs. The Education NKRA is leading the group by achieving 187% of the original target. We are pleased to see that both the Crime NKRA and Corruption NKRA are also showing great progress, having hit 130% and 133% of their respective targets in 2011. We expect to see more improvements in 2Q 2012 as there are signs that the next general election is approaching.

Government Transformation Programme’s (GTP) NKRA Overall Performance

NKRAs 2011 Target (%) 2011 Actual (%)

2011 Budget (RM m)

2011 Actual Budget (RM m)

Percentage (%) of Expenditure

Crime 100 130 473 349 74

Social Welfare 100 103 506 497 98

Education 100 187 375 265 71

Rural Infrastructure 100 123 6,480 6,086 94

Urban Public Transport 100 108 1,387 1,328 96

Corruption 100 133 7 4 49

Source: GTP Annual Report 2011

Recap on SRIs. Another key ingredient in Malaysia’s attempt at transformation are the Strategic Reform Initiatives (SRIs), unveiled in July 2011 to serve as the enablers to boost the country’s economic competitiveness. There are 51 measures in total, of which 14 are embedded directly into their “natural homes” under the GTP and ETP, while the remaining 37 are grouped into six implementation clusters i.e. International Standards & Liberalisation (9 policies); Human Capital Development (9 policies); Public Service Delivery (7 policies); Public Finance (5 policies); Government Role in Business (5 policies); Narrowing Disparities/Bumi SMEs (2 policies).

The key milestones of the SRIs highlighted by PEMANDU included:

International Standards & Liberalisation – Passing of the Competition Act 2010, which came into force on 1 January 2012 and ongoing liberalisation of financial and non-financial services sectors and industries i.e. 100% foreign equity ownership. Of the 17 sub-sectors to be liberalised (announced in Budget 2012), 8 has been implemented and 9 will be implemented in stages in 2012.

Liberalisation of services

Healthcare Education Professional servicea

Private hospitals International schools Engineering services

Healthcare professional services

Vocational & technical schools

Legal services

Private higher education institutions

Architectural services

Accounting services

Source: PEMANDU


3 April 2012 of 27

Public Finance – Additional tax revenues of RM25.3b (direct taxes: RM23.2b; indirect taxes: RM2.1b) were collected in 2011 from improvement in tax compliance and collection via efficiency gains and better enforcement.

Public Sector Delivery – Business Process Re-engineering has yielded a business cost saving of RM729m in 2011 via the reduction in the number of business licences to 375 from 761.

Government Role in Business – 11 of the 33 identified companies under six GLICs earmarked for divestments either via a listing, pare-down or outright sale, completed their respective exercises in 2011. Another 13 exercises are targeted for completion this year. In addition, Johor has been identified to be the pilot state for the state-owned companies’ divestment programme. This starts with Johor Corp which is in the midst of privatising KFC Holdings and QSR Brands, amongst others.

Government Linked Investment Companies (GLIC) divestment plan

Total 2011-12 target

Completed in 2011

Target 2012 completion

Target 2013 completion

Pare down 5 5 0 5 0

List 7 5 5 0 2

Outright sale 21 14 6 8 7

Total 33 24 11 13 9

April 2011 Khazanah sold of its 32.2% stake in Pos Malaysia to DRB-Hicom

May 2011 EPF announced that it would trim its stake in RHB Capital to 45% by end-2011 from 57%

Jun 2011 FELDA’s MSM Malaysia Holdings was listed, incorporating 5 of the 7 companies identified for listing under the GLC divestment programme

July 2011 Boustead announced that it will pare down its 97.8% stake in Pharmaniaga to 55%

Oct 2011 Announcement on Felda Global Ventures Holdings listing in 2012

Nov 2011 Khazanah accepted a joint UEM-EPF offer for PLUS divestment

Source: PEMANDU


3 April 2012 of 27

PART 2: OUR VIEWS

Market-positive achievements – (1). We are encouraged by the ETP and SRI achievements so far, which are market-positive. Programmes such as share divestments by the GLICs will raise market liquidity and breadth. Since early this year, the GLIC divestment programme has continued with new share issuances by Malaysia Airports, as a result of which Khazanah’s stake was pared down to 55% from 49%. The Greater KL/KV NKEA also made significant progress with the appointment of the MMC-Gamuda JV as the project delivery partner for the Sg Buloh-Kajang (SBK) MRT line, for which RM10.5b worth of works (comprising 27 packages, including the underground work package worth RM8.2b) were awarded.

Market-positive achievements – (2). Within the oil, gas and energy NKEA, PETRONAS’ RM60b RAPID project in Johor saw the appointment Technip (of France) for front-end engineering design in March this year. The merger of SapuraCrest and Kencana is on track for a 2Q12 completion – this will raise the group’s profile as the world’s fourth-largest integrated oil & gas services provider by assets. In terms of market capitalisation, the merged entity offers a market value of RM10.6b (post RM1.8b cash repayment) which will catapult the group to becoming the fourth-largest listed oil & gas stock in Malaysia.

Nonetheless, there are still challenges on the macro front. Key issues and challenges ahead include raising the bar on targets/KPIs and undertaking the big reforms. We feel that the ability of the GTP and ETP to broadly meet or exceed targets/KPIs thus far has been a function of realising the “low-hanging fruit”, “quantitative metrics” and “quick wins”. Going forward, “high-hanging fruit”, “qualitative metrics” and “tough fixes” will be the order of the day.

On the GTP, we reckon among the key issues will be: 1) addressing serious and syndicated crimes; 2) improving the quality of the country’s education system (especially after the controversy surrounding the policy U-turn on the teaching of Mathematics and Science in English), and 3) intensifying the efforts to tackle corruption amid the still-prevalent negative public perception (Merdeka Centre’s survey in December 2011 highlighted “fighting corruption” as the top issue that needs the government’s attention).

The success of the ETP will be essentially and especially measured by the realisation of the total RM1.4tr in investment targets until 2020, which according to the targeted breakdown by investors is to be underpinned by the private sector (60% of total, of which 73% is to be domestic direct investment and 27% to be FDI), followed by Government-linked Companies/Government-Linked Investment Companies (GLCs/GLICs – 32% of total), with just a small role for Federal Government (8% of total).


3 April 2012 of 27

Breakdown of RM1.4tr ETP Total Investment in 2011-2020 by Investors

RM958b

RM352b

RM109b

Private DDI (Include GLCs, GLICs) Private FDI Public (Govt)

GLCs/GLICs: RM454b

Non-GLCs/GLICs: RM504b

Source: PEMANDU

On the SRIs, all eyes will be on the resolve to undertake the key reforms, namely the introduction of a Goods and Services Tax (GST) which PEMANDU has previously indicated may be implemented in 2014-15, and the Subsidy Rationalisation Programme (SRP). The SRP is currently frozen. The reason given by PEMANDU for this is that the Government is now focusing on the Cost of Living issue, which as mentioned earlier is a new NKRA for the GTP. To recap, a subsidy review was supposed to be implemented every six months beginning mid-2010, affecting the subsidies on fuel (petrol, diesel, LPG), essential food items (sugar, cooking oil, flour) and energy (power tariffs, gas prices). The last review was in mid-2011. These prices are targeted to be market-driven by 2014-2015. The freeze on the SRP may result in delays in the completion of this particular SRI measure to 2015-2017, unless the Government accelerates the SRP upon its resumption, to catch up with the original schedule.

It is heartening that the Government is aware of the need to step up and intensify the deliverables of GTP, ETP and SRIs. This can be seen by the listing of critical ETP targets for 2012, which we have displayed alongside the associated achievements in 2011 in Part 3 of the report.

Political development is also key. Amid the buzz on the 13th General Election which could be held as early as in 2Q 2012, a stronger mandate for the Prime Minister will be a major boost towards further reducing the implementation and execution risks on the GTP, ETP and SRIs. This could, in turn, re-rate the market as a stronger mandate adds confidence of a higher growth path in terms of broader corporate earnings delivery and consumption power.


3 April 2012 of 27

PART 3: Government Transformation Programme, achievements and targets

Highlights of Key Outcomes of Government Transformation Programme’s Second Year (GTP) PART 1

NKRAs KPIs Target 2010 Actual 2010 Target 2011 Actual 2011 Target 2012

Crime Reduction in Reported Index Crime (%) 15 15 5 11.1 5

Reduction in Reported Street Crime (%) 35 35 40 39.7 45

Reduction in TNS "Fear of Crime" Index 50 52.8 45

Arrest cases brought to trial 20 23.4 25

Increased public perception on police performance

60 70.5 65

Social Welfare Reduce number of extreme poor households 44,643 44,535

Reduce number of poor households 46,000 15,868

Train and develop women entrepreneurs 2,000 2,000 100.0% 110.0% 1,000

To verify and register all eKasih open registration by 31 Dec 2011

100.0% 96.0%

Increase home ownership among the poor 4,965 4,865

To ensure ekasih registered poor households participate in the 1 AZAM initiatives

57,793 63,147 39,600

New To ensure 13,237 existing 1 AZAM participants increase their per capita income above the poor Poverty Line Income (PLI)

13,237

New To ensure 7,480 existing 1 AZAM participants under KPWKM, increase their monthly income by RM200 per month

7,840

New To ensure 100% monthly updating of data in eKasih for all recipients registered under the 1 AZAM programme

100

New To build 10,000 Rumah Mesra Rakyat under SPNB by 31 December 2012

10,000

New Operationalisation of Greater eKasih 30-Sep-12

Education Pre-school enrollment rate (%) 72 72.42 80.0 77.2 87

LINUS Literacy Rate (Cohort 1) 90.0 85.0 95.0 97.5

LINUS Numeracy Rate (Cohort 1) 90.0 91.0 95.0 98.6

LINUS Literacy Rate (Cohort 2) 90.0 91.0

LINUS Numeracy Rate (Cohort 2) 90.0 95.4

New LINUS Literacy Rate (Cohort 3) 100

New LINUS Numeracy Rate (Cohort 3) 100

High Performing Schools (number of schools) 50.0 52.0 50

New Deals - Primary school principals exceeding target (% )

3.0 5.2 4

New Deals - Secondary school principals exceeding target (% )

2.0 4.0

New Deals - Primary school principals performing below target (%)

< 8.0 1.2 6

New Deals - Secondary school principals performing below target (%)

<10.0 10.9

School Improvement Programme - Reduce Band 6 & 7 (% of schools)

20.0 40.3 20

School Improvement Programme - Increase Band 1 & 2 (% of schools)

8.0 21.9 8

Rural Infrastructure

Roads (km) 783.1 783.1 905.1 (Additional)

1,013 1,349 (Additional)

Water (unit of households) 36,273 36,273 58,087 (New Total)

73,227 20,1192 (Additional)

Electricity (unit of households) 27,266 27,266 26,882 (Additional)

27,004 39,442 (Additional)

Housing (units) 16,962 16,962 9,146 (Additional)

14,365 14,564 (Additional)



3 April 2012 of 27

Highlights of Key Outcomes of Government Transformation Programme’s Second Year (GTP) PART 2

NKRAs KPIs Target 2010 Actual 2010 Target 2011 Actual 2011 Target 2012

Urban Public Transport

Public transport modal share (%) 15 17 21 16 25

% of population within 400 metres of public transport route

66 63 70 67 72

Customer satisfactory survey 50 53 55

Bus peak hour load factor 50 44 56 96 70

KTM Komuter (train) load factor 135 130 125 105 100

RapidKL Kelana Jaya LRT line load factor 125 80 80 80 80

AM peak public transport ridership 251,184 238,412 346,148 321,487 600,000

Weighted average ratio of public journey time to private journey time

1.70 : 1 1.49 : 1 1.6 : 1

Road safety (Deaths per 10000 vehicle) (road fatalities/10,000 registered vehicles)

3.1 3.2 3.01

Corruption No of ministries scoring above 90% in the

Procurement Accountability Index 13 14 19 18 22

70% of companies announcing EPPs in Progress Update to sign the CIP

70 64 100

Number of people in the database of convicted offenders

84 284 100 496 300

Tis Corruption Perception Index 4.9 4.4 4.9 4.3 4.9

Global Corruption Barometer survey on Government actions to fight corruption (%)

37 48 50 49 52

Percentage of trials completed within a year 70.0 58.7 70

Percentage of government procurement with integrity Pact

80.0 77.0 100

TNS perception survey on how much enforcement agencies perceived tobe affected by corruption

3.5 2.9 2.75

Produce a clear procedure for effective implementation of Whistle Blower Act`

100% 100%

Begin the process of reporting of actual numbers of whistle Blower case

100% 100%

Percentage of completion of compliance unit activities

60 99 85

New Whistle blower protection awareness and satisfaction survey result

50

New Full-fledge implementation through a prescribed method of the political funding initiative

100



3 April 2012 of 27

PART 4: Economic Transformation Programme, achievements and targets

NKEA 1: Greater Kuala Lumpur / Klang Valley – 2011 Key Performing Indicators No KPI Target (FY) Actual (YTD) Achievements

EPP1 Conclude letter of intent with MNCs for location of HQs or regional HQs in Greater KL/KV.

6 6 100%

Employment generated 400 471 118%

EPP2 Returning Expert Programme, Resident Pass Programme and Employment Permit Programme

100% 94% 94%

Talent Corp website and portal improvements 100% 98% 98%

EPP3 Provision of a business case to Cabinet for a HSR project between Kuala Lumpur and Singapore

Dec '11 100% 100%

EPP4 Gazetting 90% of land acquisitions for the Sungai Buloh – Kajang Line by December 2011

90% 100% 111%

Commencement (Ground Breaking for the MRT Project) by July 2011

100% 100% 100%

EPP5 Percentage of completion of River Cleaning 15% 19% 127%

Number of firms participating in master planning competition 5 5 100%

International news articles on River of Life 70 98 140%

EPP6 Number of trees planted 30,000 31,447 105%

Shaded areas (‘000 square feet) 668 700.2 105%

Number of events in parks 10 10 100%

Number of trees funded by the private sector 5,000 5,098 102%

EPP7 Percentage of average completion of iconic Places 5% 57% 1140%

Number of master plans for iconic Places 5 5 100%

EPP8 Total pedestrian walkways improved (km) 12 10 83%

EPP9 Roll‐out separation at source (household wastes)m‐ distribution of bins to Kuala Lumpur households.

15% 15% 101%

Completion of Food Waste Plan (including approach to food waste disposal, inventory of eateries, economic feasibility of PFI/PPP approach)

100% 100% 100%

Biogas plant for food waste: finalization of pre‐tender process (site, business model and tender documents)

10% 0% 0%

151%

Source: ETP Annual Report 2011

NKEA 1: Greater Kuala Lumpur / Klang Valley – Critical targets for 2012 Greater Kuala Lumpur / Klang Valley 2020 Target

Incremental GNI Impact RM190 b

Additional jobs 300,000

MNC Attraction

∙ Conclude Letter of Intent for 10 MNCs operational headquarters (OHQ) relocation in Greater KL/KV for setting up on MNC HQs in Greater KL/KV

∙ 600 employment generation under Greater KL/KV

∙ 10 Branding InvestKL Activities

Talent Attraction

∙ The Returning Expat Programme aims to see 1,200 expats return to Malaysia

∙ The residence Pass Programme for 800 approved passes

∙ The employment Pass (Category II) intends to approve 300 passes.

∙ Development of a Diaspora Database

∙ The STAR Programme aspires to have 800 JPA scholars and 100 corporate partners.

High Speed Rail (HSR)

∙ Completion of HSR Phase 1B, which is detailed feasibility study, including recommendation for alignment and stations.

My Rapid Transit

∙ 100% completion of land required for SB‐K Line

∙ All elevated civil underground and depot packages are awarded

∙ Completion of feasibility studies and undertakes required freezing of the MRT alignment corridors.



3 April 2012 of 27

NKEA 1: Greater Kuala Lumpur / Klang Valley – Critical targets for 2012 River of Life

Target pollution level from 5 Wet Markets:

‐ BOD 50(mg/l)

‐ COD 100(mg/l)

‐ SS 100(mg/l)

‐ Ph 5.59

‐ O&G 10 mg/l

∙ Tonnage of Flotables in the River per day (tons/day), measured at downstream confluence will be 2.5 tons/day

∙ Oil and grease pollution from each hawker center after Communal Grease Traps installed will be 10mg/l

∙ 15% Completion of River Beautification Construction for Phase 1

Greener KL

∙ 30000 trees will be planted

∙ 5000 trees will be sponsored from the private sectors

Iconic Places

∙ 2km upgrade of non covered pedestrian network system

Solid Waste Management

∙ 100% roll‐out of Separation at Source Scheme (Household Wastes) in Kuala Lumpur through distribution of bins to landed property

∙ Issuance of Letter of Approval to successful contractor via Provate Public Partnership (PPP) for setting up of Food Water Treatment Plant (Composting of Anaerobic Digestion) for food waste ∙ Request for proposal (RFP) process completed and submissions received for setting up of Construction and Demolition Waste facility for construction waste. Sewage

∙ 45% construction progress for rationalization projects of Old Klang Road. Contract period is 18 months

∙ 20% sewer rehabilitation projects in Kuala Lumpur, Shah Alam, Subang Jaya and Petaling jaya. Contract period is 30 months.

∙ 18% regionalization of sewage treatment Lot 130, Klang. Contract period is 36 months.



3 April 2012 of 27

NKEA 2: Oil, Gas & Energy – 2011 Key Performing Indicators No KPI Target (FY) Actual (YTD) Achievements

EPP1 Addition resources ‐ Million stock tank barrel (mmstb) Information kept confidential at request

of involved party

196%

EPP2 Production from marginal fields ‐ Thousand barrel of oil equivalent per day (kboed)

99%

Production from marginal fields (oil) – thousand barrel per day (kbd)

99%

EPP3 Number of explored wells 103%

EPP4 Committed amount of land‐based oil storage capacity – million cubic metre

7,000,000 7,300,000 104%

Number of oil trading companies based in Malaysia 2 5 250%

EPP5 Number of additional confirmed gas requirement (mmscfd) 140 139 99%

EPP6 and 8 Amount of investments made by OFSE MNCs‐RM million 320 454 142%

Number of MNC or JVs between local OFSE companies with global MNCs

2 2 100%

EPP7 Number of suddessful merger of fabricators 1 1 100%

EPP9 Percentage reduction in electricity bill for top 120 government entities against electricity bill for the year.

3% 3% 100%

Market share of 5‐star appliances ‐ 1. Refrigerator 13% 13% 101%

2. Air‐conditioner 8% 9% 107%

3.Chiller 35% 11% 32%

EPP10 Amount of grid‐connected solar power generation capacity installed (MW)

24 2.55 11%

EPP12 Generated electricity capacity (MW) 300 300 100%

109%


NKEA 2: Oil, Gas & Energy – Critical targets for 2012 Oil, Gas and Energy 2020 Target

Incremental GNI Impact RM131.4b


‐ To ensure enhanced oil recovery (EOR) techniques are implemented in existing oil fields

‐ Malaysia to win the bid as the host of Offshore Technology Conference

‐ Energy Performance Contract (EPC) implementation in all top 120 government buildings

‐ GIFT international promotion to attract at least four trading companies to be based in Malaysia

‐ To ensure commissioning of regasification terminal by Q4

‐ To enhance discovery of new wells by Petronas

‐ To increase production from marginal oil fields

‐ To increase investments from Multinational Companies into OFSE industries

‐ Increasing the penetration rate of SAVE awareness

‐ Ensure two mergers or acquisitions between offshore structure fabricators

‐ To ensure two additional partnership[s or joint ventures in the OFSE industry

‐ To ensure the Feed In Tariff (FiT) allocation for biomass, biogas and small hydroelectricity are fully utilized.



3 April 2012 of 27

NKEA 3: Financial Services 2011 – Key Performing Indicators No KPI Target (FY) Actual (YTD) Achievements

EPP1 Average Daily Value (ADV) Traded (RM b) 1.6 1.74 109%

Value of REITs including national REITs (pooling properties of GLCs) (RMb)

RM5b RM5.6b 113%

Increased number of foreign listings 5 3 60%

Mandate GLICs to hedge using derivatives – Educational & Awareness programmes

Q4 2011 Completed in Nov 2011

100%

Licensing : Opening up of retail access to foreign brokers Q4 2011 Completed in Q2 2011 100%

Licensing: allow all brokers to open branches Q4 2011 Completed in Q2 2011 100%

Licensing: Liberalise licensing of Proprietary Day Traders (PDTs)‐Approval

Q1 2011 Completed in Q1 2011 100%

Licensing: Dual licensing of equity and futures dealers 650 684 105%

EPP2 Widen the credit spectrum of bond market: Benchmark domestic credit rating agencies against international standards and best practices

Q1 2011 Completed in March 2011

100%

Increase participation of foreign issuers and investors: Internationally‐rated local companies to be allowed to sue international ratings for RM bonds

Q3 2011 Completed in July 2011

100%

Increase participation of foreign issuers and investors: Enhanced disclosure standards (Launching)

Q3 2011 Completed in July 2011

100%

Increase participation of foreign issuers and investors : Foreign holdings in PDS (RMbn)

RM16b (3Q 2011) RM15.3b (Sept 2011) 96%

EPP3 Revisit DFI mandates and rationalize: Complete review of DFI mandates Q4 2011 Completed in March 2011

100%

Sustainable DFIs that do not require additional capital injection in the form of bailouts from the government.

Q4 2012 Completed in March 2011

100%

Shift emphasis of DFIs towards Islamic Finance: Islamic financing portfolio of DFIs increased to 70% of total financing portfolio.

Q4 2011 YTD: 66% increased 94%

EPP4 Expand merchant acceptance: Increase in the number of POS terminals by 15% (as at Dec 2010: 196,210 terminals)

Increased in the number of POS

terminals by 15% by Q411

As at end September 2011 = increased by

9.4%

63%

Expand merchant acceptance: Government to waive the import duty for POS terminals

Q4 2011 Completed in Sept 2011

100%

Expand strategic partnership with regional ATM switches: Expand ATM Link to Korea

Q1 2011 Completed in Dec 2011

100%

Deploying 1 Malaysia Payment (from CCI NKEA): Roll‐out of the pilot interoperable mobile banking and payment platform.

Q4 2011 70% 70%

Deploying 1 Malaysia Payment (from CCI NKEA): Increase volume of mobile banking transactions by 15% in 2011 (as at end Dec 2010: 717,038 transactions)

Increase volume of mobile banking

transactions by 15% in 2011

As at end Nov 2011 = 1532582 (increased by

214%)

214%

EPP5 Launched micro‐insurance scheme: Roll out of 1 Malaysia Micro Protection Plan (1MMPP)

Q1 2011 Rolled out in April 2011

100%

EPP9 Expand within ASEAN in meaningful manner and beyond ASEAN: Identify priority/strategic countries for expansion.

Q1 2011 Completed in Q1 2011 100%

Expand within ASEAN in meaningful manner and beyond ASEAN: Domestic banks with capacity to expand regionally

Q4 2011 6 banking groups have presence in 19

countries worldwide

100%

Expand within ASEAN in meaningful manner and beyond ASEAN: G2G or regulator‐regulator engagement to remove market access impediments

Q4 2011 MOUs signed with 4 regulatory authorities.

100%

Successful signing of FTAs to the net benefit of Malaysia in regards to Financial Services chapter

Q4 2011 100% 100%

EPP10 Expand Islamic banking to priority markets: Identify key priority countries to expand Islamic banking where Malaysian banks have significant presence.

Q4 2011 100% 100%

Actively participate in the enhancement of global Islamic liquidity management: Expand scope and global acceptance of Bursa Suq Al‐Sila’ by extending the opening hours and having greater number of participants (Bursa to provide details)

Q4 2011 Bursa Suq Al‐Silla' is operating at a 6 days market since 1 Nov 2010. Year 2011: 40 members (29 local, 11 foreign participants)

100%

Actively participate in the enhancement of global Islamic liquidity management: Encourage fund raising for 10MP via FX Islamic instrument (First‐right‐of‐refusal for Islamic instruments)

Q2 2011 The government of Malaysia issued

USD2b Wakala Global Sukuk (June 2011),

attracting subscription worth more than

USD9b

100%



3 April 2012 of 27

NKEA 3: Financial Services 2011 – Key Performing Indicators…con’t No KPI Target (FY) Actual (YTD) Achievements

EPP10 Con’t

Actively participate in the enhancement of global Islamic liquidity management: Operationalise International Islamic Liquidity Management Corporation (IILM)

Q2 2011 Operationalised in Jan 2011

100%

Develop Islamic fund management: Attract leading international fund managers to establish in Malaysia

Q4 2011 There are 16 Islamic fund management

companies of which 9 are fully foreign

owned and 3 are joint venture

100%

Expand takaful products overseas: Increase takaful penetration in the domestic market and foreign currency share of retakaful business.

Q4 2011 Takaful penetration rate increased from 11.1% (Dec 2010) to 11.7% (Mar 2010). Data available only

annually but expected to increase in 2011

100%

101%


NKEA 3: Financial Services 2011 – Critical targets for 2012

Financial Services 2020 Target

Incremental GNI Impact RM121.5 b

Additional jobs 275,400 ‐ To achieve value of new listings of GLCs to RM20bn by 2012

‐ Further sell‐down of Government‐Linked Investment Companies (GLICs)

‐ International Trading Board‐ To allow quotation and trading of foreign stocks or products with foreign underlying on Bursa.

‐ To further strengthen retail participation

‐ To highlight financing to targeted sectors for DFIs

‐ To improve turnaround time for loans for DFIs

‐ To establish a sustainable social lending framework for DFIs

‐ Further increase number of POS terminals

‐ To ensure that all government payments made payable via electronic funds transfer

‐ Tax incentives to promote use of e‐payment

‐ To expand ATM links to Vietnam & Philippines

‐ To increase volume of mobile banking transactions

‐ To increase insurance penetration rate for low‐income households

‐ To make private pension available for the public as supplement to public pensions

‐ To increase range of wealth management products

‐ To further expand GLIC role in stimulation industry

‐ Carve niche in Islamic asset management

‐ Issuance of syariah parameters on Mudharabah, Musharakah and Ijarah

‐ To allow greater flexibility for foreign legal firms to provide services in Malaysia



3 April 2012 of 27

NKEA 4: Wholesale And Retail – 2011 Key Performing Indicators No KPI Target (FY) Actual (YTD) Achievements

EPP2 Number of establishments modernized under the TUKAR programme

500 518 104%

EPP3 Percentage of completion for 20 sites 100 49.5 50%

EPP4 Number of workshops modernized 50 55 110%

EPP9 Percentage increase of Cost, Insurance and Freight (CIF) for 328 selected imported finished products

15% 64% 427%

EPP11 Number of programmes implemented 1 1 100%

Number of sub‐sectors involved in 1 Malaysia Unified Sale 50 50 100%

EPP7 Operational by 2012 1 1 100%

114%


NKEA 4: Wholesale And Retail – Critical targets for 2012 Wholesale and Retail 2020 Target



‐ 500 TUKAR shops

‐ 50 ATOM Workshops

‐ End‐to‐end nationwide virtual mall

‐ 35% increase in CIF compared to 2010 baseline

‐ Completion of 20 PAKAR sites



3 April 2012 of 27

NKEA 5: Palm Oil And Rubber – 2011 Key Performing Indicators No KPI Target (FY) Actual (YTD) Achievements

EPP1 Area of backlog cleared by plantations and organized smallholders (ha) 100,000 83,200 83%

Area of replanting and new planting by smallholders (ha) 26,500 19,768.54 75%

EPP2 Number of TUNAS Officers recruited and trained 100 100 100%

Number of smallholders cooperatives 10 11 110%

Area of plantations/smallholders complying with COP/NSGAP/RSPO/best practice (ha)

125,000 124,294 99%

EPP3 Number of Cantas TM sold to plantations and smallholders 3,000 2,189 73%

Number of diamond sharpening tool taken up by plantations and smallholders

3,000 3,633 121%

EPP4 Mills with dedicated MPOB Quality Enforcement Officer 186 186 100%

Number of POM certified MPOB for Code of Practice 20 20 100%

Oil extraction rate 20.75% 20% 98%

EPP5 Total number of mills built with biogas facility 36 48 133%

EPP6 Take‐up‐rate for the pre‐commercialization and technology acquisition funds

254.2 225.3 89%

Total amount of investments on oleo‐derivatives (RM m) 57.6 81.177 141%

EPP7 Percentage of Completion of (1) bio oil plant project development and construction

40% 22% 56%

EPP8 Take up funds for food and health based products 100% 92% 92%

Number of SMEs participating in anchor model 2 2 100%

New revenue generated from MPOB’s commercialized Food and Health based products (RM m)

20 22.8 114%

EPP1 Malaysia export revenue of Latex Product (RMm) 11,770 11,290 96%

Malaysian export revenue of natural rubber and compound rubber (RM m)

16,550 17,520 106%

Percentage of completion of one Ekoprena plant. 100% 80% 80%

98%


NKEA 5: Palm Oil And Rubber – Critical targets for 2012 Palm Oil and Rubber 2020 Target

Incremental GNI Impact RM230.9b (Inclusive Rubber)


Palm Oil

‐ Accelerate the replanting of oil palm plantation backlog and development of new palm oil areas to 140,000 hectares

‐ From 7 new regional cooperatives to group more independent smallholders together

‐ Improve labour productivity via sales of Cantas and diamond sharpening tool

‐ Improve national oil extraction rate to 21.05%

‐ Encourage uptake of connection to the Feed in Tariff system by biogas plants

‐ Ensure completion of 21 biogas plants under construction

Rubber

‐ Accelerating the replanting of rubber estates backlog and development of new rubber areas by smallholders to 51,000 hectares

‐ Ensure 12,000 tonnes of production of Ekoprena and Pureprena



3 April 2012 of 27

NKEA 6: Tourism – 2011 Key Performing Indicators No KPI Target (FY) Actual (YTD) Achievements

EPP1 Percentage of shopping spend 29% 32% 110%

Total Tourist Spend per Arrival (RM per tourist) 694 736.5 106%

EPP2 Retail revenue per sq ft (RM/square feet) 1,732 1,762 102%

Length of covered walkways (meters) 1,350 1,350 100%

EPP3 Percentage of completion of construction of Johor Premium Outlets

100% 100% 100%

EPP4 Upgrade of sites to meet Malaysia Mega Biodiversity Hub certified standards

5 98% 98%

EPP5 Percentage of pre‐booking received for beachfront & golf course villas

40% 43.9% 110%

EPP6 Passenger Sea Ports Infrastructure and Cruise Tourism Blueprint Formulation of a Cruise and Ferry Integrated Sea‐port Infrastructure Blueprint for Malaysia

Blueprint completed 100%

EPP7 Total revenue from international events (RM mil) (percent increase)

519 845 163%

EPP8 Establish entertainment zones 1 1 100%

EPP9 Revenue generated from spas (RM m) 20.74 20.7 100%

Revenue generated from golf tourism (RM m) 249.5 286 115%

EPP10 Number of events secured (with minimum size of 650 delegates) 20 49 245%

Percentage of business travelers/arrivals 5.24% 5.2% 99%

EPP11 Increment of weekly seats to identified priority countries as follows: China, Japan, Taiwan, India, Australia, South Korea

9,097 8,619 95%

Increase in number of international passenger traffic from all airports

7.2% 11.4% 158%

EPP12 Approval of incentives for 4 & 5 star hotels Treasury approval 100%

118%


NKEA 6: Tourism – Critical targets for 2012 Tourism 2020 Target



‐ Coordinated promotional programme along the BB‐KLCC area

‐ Development of the second phase of Johor Premium Outlets

‐ Physical commencement of the Integrated Resorts projects in Sabah

‐ Availability of preliminary cruise infrastructure and attractions

‐ Implementation of the tracking mechanism for international Events

‐ Setting up an additional Entertainment Zones

‐ Setting up additional Centre of Excellence to train spa therapists

‐ Increase in numbers of bids won for MICE

‐ Greater proportion of medium haul tourists into Malaysia

‐ More investments in four‐star and five‐star hotels



3 April 2012 of 27

NKEA 7: Electrical And Electronics – 2011 Key Performing Indicators No KPI Target (FY) Actual (YTD) Achievements

EPP1 Percent completion of construction of 200mm wafer fab 100% by Dec 2011 100% 100%

Number of MoUs signed with local companies for vendor development program

1 1 100%

EPP2 Total number of Advance Packaging firms set up 1 1 100%

EPP3 Total number of IC design firms set‐up 10 5 50%

Fabless IC Design CoE by 2011 = 1 (MOSTI) 1 1 100%

Failure Analysis lab by 2011 = 1 (MOSTI) 1 100% 100%

Contactless testing lab by 2011 = 1 (MOSTI) 1 0% 0%

EPP4 Total number of Substrates manufacturer set up 1 100% 100%

MOU signed with local supplier by 2011 = 2 (MITI) 2 2 100%

EPP5 Number of MoU signed with Silicon Substrate 1 1 100%

Percentage of completion of land acquisition 100% by June 2011 100% 100%

Percentage of completion of construction 30% by Dec 2011 30% 100%

EPP6 Solar cell production (GW) 1.05 4.01 382%

EPP7 Total number of Solar Module Plants set‐up 2 2 100%

Total number of local companies engaged for vendor development program

2 2 100%

EPP8 Total number of LED front‐end companies set up 1 90% 90%

Number of sites secured 1 1 100%

EPP9 Percentage increase of LED packaging growth capacity in Malaysia 15% 15% 100%

EPP10 Number of SSL companies which are able to penetrate the global market

2 3 150%

EPP11 Development of WSN, Complete PoC by 2011 = 100% complete (MOSTI)

100% 100% 100%

EPP14 Completion of MOU and subsequently leading to formation of JV between the parties involved in setting up the High Power Test Lab

Dec‐11 21‐02‐2011 signed MoU Pending JV

100%

108%


NKEA 7: Electrical And Electronics – Critical targets for 2012 Electrical and Electronic 2020 Target

Incremental GNI Impact RM53.4 b


‐ Drive the setting‐up of Failure Analysis Lab‐ To complete level 2 Failure Analysis‐ Embedded Defects Failure Analysts

‐ Executing a smart follower strategy for wafer fabrication

o Percentage of completion of 1 new plant – 30%

o Percentage completion of 1 expansion – 100%

‐ Developing assembly and test using advanced packaging technology

o Number of R&D Centre for Advance Packaging implemented ‐2

o Complete installation of (Silver/Gold) bumping line – 100%

‐ Developing integrated Circuits (IC) design firms

o Additional IC design firms (Approved) – 10

o Additional IC design firms (Implemented) – 5

‐ Supporting the growth of substrates manufacturers and related industries

o Substrates manufacturer approved (from acceptance of offer) – 1

‐ Increasing the number of silicon production

o Progress completion of the 2 approved silicon producers (Land clearing) – 100%

o Progress completion of the 2 approved silicon producers (Begin construction) – 100%

‐ Growing solar wafer and cell producers

o Progress completion for the 2 Cell producers (In operation) – 100%

o Progress completion for the 2 Cell producers (Begin construction) – 100%

o Production of solar cell capacity (GW) – 2.08

‐ Increase Solar Module production

o Progress completion for Solar Module Plants (In operation) – 100%

o Progress completion for Solar Module Plants (Begin construction) – 100%

‐ Developing LED Front end operation

o LED Wafer fabrication plant approved (Approved) – 100%

o LED Wafer fabrication plant approved (Complete construction) – 100%



3 April 2012 of 27

NKEA 7: Electrical And Electronics – Critical targets for 2012 …con’t ‐ LED packaging and equipment

o Set up for 1 R&D Centre for LED packaging – 100 percent

‐ Creating local Solid State Lighting (SSL) champions

o 1 local SSL company in operation – 1

o Establish MS for solid state of lighting products – Dec‐12

o Develop government procurement policy for local SSL products – Dec 12

‐ Growing test and measurement hub

o Implement vendor development programme – 100%

‐ Growing automation equipment manufacturing

o Number of consortium set up to provide total automation solutions for manufacturing – 2

‐ Building transmission and distribution companies

o Pending target

‐ Building a home appliance manufacturing hub and international distribution network – pending target.



3 April 2012 of 27

NKEA 8: Business Services – 2011 Key Performing Indicators No KPI Target (FY) Actual (YTD) Achievements

EPP1 Revenue from fleet technical management –RMm 140 219.9 157%

Revenue from training centers – RMm 12.68 12.3 97%

Revenue from airframe MRO (Line and Base maintenance) – RMm 787 793.8 101%

Revenue from engine MRO – RMm 1,689 901.9 53%

Revenue from components MRO – RMm 742.2 1,176.5 159%

EPP2 Number of MNCs to outsource non‐core operations 5 24 480%

Overseas sales revenue – RMm 610 848 139%

EPP3 Percentage of market share from Asia Pacific Data Centers excluding Japan

6% 3.30% 55%

Sales of floor space – square feet 100,000 208,000 208%

EPP4 Number of green tech jobs created 3,000 3,203 107%

Development of Occupational analysis (OA) in Green Technology Sector

1 OA 1 OA and 71 job titles 100%

Development of National Competency Standard (NCS) in Green Technology Sector

1 NCS 1 NCS, 6 groups and 21 abilities

100%

EPP5 Revenue from Engineering Services (strand) – RMm 6.2 4.67 75%

Revenue from Engineering Services (DESB) – RMm 6.2 6.2 100%

138%


NKEA 8: Business Services – Critical targets for 2012 Business Services 2020 Target



‐ 3 announced data centres to provide over 350 jobs, mainly in technical and engineering fields and be fully operational by the first or second quarter 2012 ‐ Overseas sales revenue (for the outsourcing industry) RM1.011b

‐ Creation of 8,000 jobs (for the outsourcing industry)

‐ Projected increment rack‐space: Data Centre White Floor Space – 150,000 square feet

‐ 11 Data Centre Organizational Certifications

‐ Total data Centre services revenue – RM395m

‐ Number of jobs created for Data Centre – 4,000 jobs

‐ To complete the accreditation framework for energy service Companies by 2012 ‐100%



3 April 2012 of 27

NKEA 9: Communications Content And Infrastructure – 2011 Key Performing Indicators No KPI Target (FY) Actual (YTD) Achievements

EPP1 Content export revenue uplift (USDm) Uplift is USD10m or RM32m 32 108.2 338%

Number of hours of digitized content (hour) 28,000 35,702 128%

EPP3 Telepresence sites/end points (unit) 20 37 185%

EPP5 Health facilities connected (%) 25 28.9 116%

EPP6 Online services (%) 25 36.9 158%

Completion of Digital Document Management System (%) 100 30 30%

EPP7 Household broadband penetration (%) 60 62.5 104%

EPP8 Non urban broadband subscription (%) 30 18.9 63%

Number of cumulative programme sites commissioned (unit) 902 1,588 176%

EPP9 Tiered pricing plans offered by Service Providers – supply (%) 15 27 180%

Internet Smart Network (SN) plan users – demand (%) 3 14.9 497%

EPP10 Data‐centre bandwith revenue (USD m) 73 94.34 129%

Completion of legal entity set‐up to fix Buy‐Build timeline for additional bandwith (%)

100 100 100%

EPP11 Number of JKDM sites installed with container tracking system 10 18 180%

170%


NKEA 9: Communications Content And Infrastructure – Critical targets for 2012 Communications Content and Infrastructure 2020 Target



‐ Revenue from exporting creative content tot total RM660m

‐ Accumulative digitized content to total 50,000 hours

‐ To commission 1,904 cumulative programme sites

‐ Data centre bandwith revenue to total RM300m

‐ To create 100 Telepresence sites/endpoints

‐ Ensuring 65% broadband penetration

‐ Ensuring 10% of bandwith price reduction

‐ To provide 50% accumulative online government services

‐ To ensure two agencies adopt the Digital Document Management System

‐ To ensure 200,000 containers transacted using Smartag readers



3 April 2012 of 27

NKEA 10: Education – 2011 Key Performing Indicators No KPI Target (FY) Actual (YTD) Achievements

EPP1 Student enrolment for pre‐school and childcare 387,000 348,874 90%

Student Assitant scheme (RM m) 6 11 183%

Number of pre‐school centres set up 8,000 5,997 75%

Number of childcare centres set up 1,000 770 77%

EPP2 Number of pre‐school teachers trained 4,500 4,996 111%

Number of childcare minders trained 1,950 9,261 475%

EPP3 Number of students enrolled 21,160 26,860 127%

Number of new schools in operation 57 68 119%

EPP4 Number of teachers trained by private Teacher Training Institute 221 200 90%

EPP5 Number of SKM qualified students (including successful PTPK funding) (private students only)

22,100 33,722 153%

Number of skills programs accredited by JPK using COPSPA (Code of Practice Skill Program Accreditation)

300 769 256%

Number of foreign TEVT (Technical education and vocational training) students studying in Malaysia

1,000 1,043 104%

EPP6 Number of international online students 3,208 1,497 47%

EPP7 Number of students enrolled 2,370 5,047 213%

Total percentage of employability (job within 3 months) 81% 60% 74%

EPP8 Number of total medical and allied health students 63,000 108,000 171%

Total percentage of employability (job within 3 months) 72% 71% 98%

EPP9 Number of advanced engineering students with cluster contact 1,300 15 1%

Total percentage of university income from R&D 1% 0 0%

EPP10 Number of students 18,700 35,181 188%

EPP11 Number of tertiary students enrolled in Iskandar 1,600 115 7%

EPP12 Number of international students 85,000 93,300 110%

EPP5 Target number of PPP schools 2 0 0%

120%


NKEA 10: Education – Critical targets for 2012 Education 2020 Target



‐ Align industry demand for skills with TEVT programmes and disciplines that are being supported by the government

‐ Increase the number of students involved in TEVT

‐ Enhance involvement of public sector institutions of higher learning online and distance learning to open up opportunities for these institutions to tap on international online student revenue ‐ Increase number of researchers involved in cluster initiatives and enhance research commercialisation efforts

‐ Set up one stop centre for preschool and childcare licensing

‐ Increase the number of students involved in ECCE diploma and Kursus Asuhan Awal Kanak Kanak (KAAK) certificate

‐ Re‐train and provide course option for surplus in‐service teachers

‐ Develop new curriculum for Islamic finance and business education which meets industry requirements



3 April 2012 of 27

NKEA 11: Agriculture – 2011 Key Performing Indicators

No KPI Target (FY) Actual (YTD) Achievements

EPP1 Total number of clinical trial to be conducted for nutraceutical and cosmeceduticals

5 5 100%

Mobilization of CoE to conduct research for product development 13 23 177%

Establishment of marketing plan for nutraceuticals and botanical drugs

5 7 140%

Establishment of Herbal Cultivation Park at Pasir Raja and Chegar Perai

100% 100% 100%

EPP2 Total sales value for edible birds nest (RMm) 100 81 81%

Total number of newly registered EBN premise 2,000 3,379 169%

Total newly certified processing plant (VHM) 15 7 47%

Total newly certified EBN premises (SALT) 1,000 807 81%

To establish new EBN website traceability 100% 100% 100%

To establish R&D referral centre with UPM 100% 100% 100%

To establish new EBN Collection and raw‐clean EBN processing centre

8 10 125%

To establish new EBN international trading house 100% 100% 100%

EPP3 Tonnage of dried seaweed produced (MT) 22,000 23,941 109%

Total land areas gazette for seaweed farming 3,000 3,000 100%

Total mini estate established 15 11 73%

To establish database for identified areas 100% 70% 70%

To begin construction of R&D centre 1 1 100%

EPP4 Total production of farmed fish (MT) 19,458 27,209 140%

Total number of cages in operations 40 20 50%

EPP5 Total number of inseminated cows 1,000 0 0%

Average success rate for conception 70% 0 0%

Total land area available (ha) 340,000 543,525 160%

EPP6 Total export from IZAQ 2 IZAQs Under Construction ‐ 50%

97% 97%

Total areas earmarked for IZAQ 500 4,107 821%

EPP7 Total export volume of premium fruits and vegetables (MT) 14,000 21,628 154%

Intercrop Development (Banana) (MT) 1,825 1,891 104%

Intercrop Development (Pineapple) (MT) 550 602.5 110%

Total investments by anchor companies (RMm) 268.8 316.2 118%

EPP8 Total investments by anchor companies (RM m) 76.2 23 30%

Completion of food park 100% 100% 100%

EPP9 Total tonnage of fragrant rice produced (MT) 580 246 42%

Total area planted (ha) 180 164.5 91%

R&D for production of new jasmine and Basmati type varieties and agronomic packages for both type by 2013.

25% 25% 100%

EPP10 Total of land area amalgamated (ha) 5,000 5,016 100%

Total land areas approved to be acquired for infrastructure (ha) 121 119 98%

EPP11 Total land areas amalgamation (ha) 50 77.7 155%

R&D activities to document local rice varieties 3 3 100%

EPP12 Ratio of domestic production vs total consumption 1:3.3 (51,161 MT) (170,475)MT)

1:3.07 (38,310 MT) (117,592)MT)

108%

Total number of heads 19,800 16,826 85%

Total kg of beef produced (MT) 2,800 1,428.7 51%

EPP13 Total production of fresh milk (mil liter) 12 15.9 133%

Total heads of dairy cow 25,500 31,997 125%

Production of milk per cow per lactation (liters per day) 15 10.5 70%

EPP14 Total production of seed (MT) 600 2,444 407%

Total number of validations achieved 10 10 100%

Establishment of national Seed Council 100% 100% 100%

Revision of policies to attract private sector’s participation 100% 100% 100%

EPP15 Total sales from MNC’s products (RM m) 256 270 105%

Total investment by MNC (RM m) 92 110 120%

Sites secured for construction/move in 1 1 100%

EPP16 Total revenue generated from oversea ventures (RM m) 21 24 114%

119%



3 April 2012 of 27

NKEA 11: Agriculture – Critical targets for 2012 Agriculture 2020 Target



‐ 5 clinical trials started for herbal products (nutraceutical/cosmeceutical/botanical drugs)

‐ 5 pre clinical trials started for herbal products (nutraceutical/cosmeceutical/botanical drugs)

‐ 15 pre‐requisites research by universities and research institution for companies

‐ Establishment of Herbal Cultivation Park in Pasir Raja and Chegar Perah (Phase 1) – 100%

‐ Total revenue generated from sales of herbs from seven herbal clusters in Pulau Pinang, Perak, Selangor, N.Sembilan, Melaka and Johor set up in 2011 – RM1,000,000 ‐ Total production of Edible Bird’s Nest products by registered premises (MT) – 100

‐ Total number of newly registered premises – 3,000

‐ Total newly certified EBN premises (SALT) – 1,100

‐ Tonnage of dried seaweed produced (MT) – 35,000

‐ Total new mini estate operational – 20

‐ Total seaweed products to be developed from R&D activity – 15

‐ Total land areas gazette for seaweed farming – 3,000

‐ Total production of farmed fish (MT) – 30,258

‐ Total number of cages in operation – 1,000

‐ Total production of shrimps (MT) – 10,464

‐ Total area earmarked for IZAQ replication (ha) – 1,000

‐ Total export value for premium fruits and vegetables – RM304m

‐ Establishment of new area for planting of premium fruits (ha) – 5,000

‐ Total investment by private companies (premium fruits) – RM395m

‐ Total investment by anchor companies (premium fruits) – RM70m

‐ Total revenue generated from sales of products from participating (premium fruits) companies – RM1m

‐ Total tonnage of fragrant rice produced (MT) – 2,500

‐ Total area planted (ha) – 750

‐ R&D activity conducted for production of new jasmine and Basmati type varieties and agronomic packages for both type by 2013. – 40%

‐ Total new land area amalgamated (ha)‐ 5,000

‐ Total land areas approved to be acquired for infrastructure (ha) – 77 (hectares)

‐ Completion of construction for irrigation infrastructure – 20%

‐ R&D conducted to improve local seed variety to be planted in Batang Lupar – 25%

‐ Total beef produced from satellite farms (MT) – 4,750

‐ Total fresh milk produced from cluster under NKEA (million liters)‐ 10

‐ Average production of milk per cow per lactation from clusters under NKEA (litres per day)‐15

‐ Total number of seeds validated by CMDV – 2,000

‐ Total production of seeds validated by CMDV – 4,500

‐ Total types of certified seeds produced through MAS – 10

‐ Formation of Seed Act – 30% completed

‐ Total investments by agriculture biotechnology companies (foreign & domestic) (RM m) – 250

‐ Total revenue generated from overseas ventures and acquisition (RM m) – 42



3 April 2012 of 27

NKEA 12: Healthcare – 2011 Key Performing Indicators No KPI Target (FY) Actual (YTD) Achievements

EPP1 Number of foreign workers with health insurance 1205000 1407919 117%

EPP2 Number of researches conducted 260 321 123%

EPP3 Export growth of pharmaceutical products (RM m) 15% (RM610m) 12% (594m) 80%

EPP4 Revenue generated from healthcare travel (RM m) 431 436 (*As of 30 Nov 2011)

110%

EPP5 Survey on radiology services in MOH hospitals All MOH hospitals with radiologist (39 hospitals)

39 100%

Pilot project on outsourcing of radiology services By July 2011 * (extended to Sept 30,

2011)

95% 95%

EPP6 Construction of Health Metropolis to begin in Q4 2011 Q4 2011 G 95% 95%

103%


NKEA 12: Healthcare – Critical targets for 2012 Healthcare 2020 Target



‐ Expansion of Foreign Workers Health Insurance to foreign workers in Sabah and Sarawak

‐ Corporatisation of Clinical Research Malaysia

‐ Incentives to encourage the establishment of more bioequivalence centres

‐ Implementation of Pharmaceutical Off Take Agreement

‐ Amendment to Patent Act

‐ Increase in the expansion of hospitals and ambulatory centres

‐ Expansion of the Diagnostic Services Nexus (DSN) to more public and private hospitals

‐ Completion of earthworks for the construction of UM Health metropolis

‐ Establishment of Medical Device Authority by May 2012

‐ Enforcement of National Regulations for Medical Device by October 2012

‐ Conversion of Seniors Living BO to EPPs



3 April 2012 of 27

ANALYSTS’ COVERAGE / RESEARCH OFFICES

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 (603) 2297 8678 [email protected] Plantations Mohshin AZIZ (603) 2297 8692 [email protected] Aviation Petrochem Power YIN Shao Yang, CPA (603) 2297 8916 [email protected] Gaming – Regional Media Power 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 KON� / CHINA Edward FUNG Head of Research (852) 2268 0632 [email protected] Construction Ivan CHEUNG (852) 2268 0634 [email protected] Property Industrial Ivan LI (852) 2268 0641 [email protected] Banking & Finance Jacqueline KO (852) 2268 0633 [email protected] Consumer Staples Andy POON (852) 2268 0645 [email protected] Telecom & equipment Samantha KWONG (852) 2268 0640 [email protected] Consumer Discretionaries Alex YEUNG (852) 2268 0636 [email protected] Industrial Catherine CHAN (852) 2268 0631 [email protected] Cement

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 Haripreet BATRA (91) 226623 2606 [email protected] Software Media Ganesh RAM (91) 226623 2607 [email protected] Telecom Contractor Gagan KWATRA (91 )226623 2612 [email protected] Small Cap

SINGAPORE Stephanie WONG Head of Research (65) 6432 1451 [email protected] Strategy Small & Mid Caps Gregory YAP (65) 6432 1450 [email protected] Technology & Manufacturing Telcos - Regional Rohan SUPPIAH (65) 6432 1455 [email protected] Airlines Marine & Offshore Wilson LIEW (65) 6432 1454 [email protected] Hotel & Resort Property & Construction Anni KUM (65) 6432 1470 [email protected] Conglomerates REITs James KOH (65) 6432 1431 [email protected] Logistics Resources Small/ Mid cap Eric ONG (65) 6432 1857 [email protected] Marine & Offshore Transportation Energy OOI Yi Tung (65) 6433 5712 [email protected] Property & Construction YEAK Chee Keong, CFA (65) 6433 5730 [email protected] Retail & Consumer Engineering Infrastructure Alison FOK (65) 6433 5745 [email protected] Services Bernard CHIN (65) 6433 5726 [email protected] Conglomerates Industrials

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 Coal Heavy Equipment Oil & Gas Rahmi MARINA (62) 21 2557 1128 [email protected] Banking Multifinance Pandu ANUGRAH (62) 21 2557 1137 [email protected] Auto Heavy equipment Plantation Toll road Adi N. WICAKSONO (62) 21 2557 1130 [email protected] Generalist Anthony YUNUS (62) 21 2557 1134 [email protected] Cement Infrastructure Property Arwani PRANADJAYA (62) 21 2557 1129 [email protected] Technicals

REGIONAL WONG Chew Hann, CA Regional Head of Research (603) 2297 8686 [email protected] THAM Mun Hon (852) 2268 0630 [email protected] Regional Strategist ONG Seng Yeow (852) 2268 0644 [email protected] Regional Products & Planning

THAILAND Mayuree CHOWVIKRAN Head of Research (66)-2658-6300 ext 1440 [email protected] Strategy Maria BRENDA SANCHEZ LAPIZ Co-Head of Research Dir (66)-2257-0250 | (66)-2658-6300 ext 1399 [email protected] 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. Suchot THIRAWANNARAT (66)-2658-6300 ext 1550 [email protected] Automotive Construction Materials Soft commodity

PHILIPPIN�S 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 Mining Kenneth NERECINA (63) 2 849 8839 [email protected] Conglomerates Property Ports/ Logistics Katherine TAN (63) 2 849 8843 [email protected] Banks Construction

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] Confectionary and Beverage Oil and Gas Ngo Bich Van +84 844 55 58 88 x 8084 [email protected] Banking Insurance Nguyen Quang Duy +84 844 55 58 88 x 8082 [email protected] Resources Property Trinh Thi Ngoc Diep +84 444 55 58 88 x 8208 [email protected] Property & Construction Power Dang Thi Kim Thoa +84 844 55 58 88 x 8083 [email protected] Consumer & Services Technology & Telecom Nguyen Trung Hoa +84 844 55 58 88 Pharmaceutical Fishery

ECONOMICS Suhaimi ILIAS Chief Economist (603) 2297 8682 [email protected] Singapore | Malaysia Luz LORENZO Economist (63) 2 849 8836 [email protected] Philippines | Indonesia


3 April 2012 of 27

APPENDIX 1

Definition of Ratings

Maybank Investment Bank Research uses the following rating system:

BUY Total return is expected to be above 15% in the next 12 months

HOLD Total return is expected to be between -15% to 15% in the next 12 months

SELL Total return is expected to be below -15% in the next 12 months

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

Disclaimer

This report is for information purposes only and under no circumstances is it to 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 income from 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 Bursa Malaysia Securities Berhad in the equity analysis.Accordingly, investors may receive back less than originally 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 and consequently no representation is made as to the accuracy or completeness of this report by Maybank Investment Bank Berhad and it should not be relied upon as such. Accordingly, no liability can be accepted for any direct, indirect or consequential losses or damages that may arise from the use or reliance of this report. Maybank Investment Bank Berhad, its affiliates and related companies and their officers, directors, associates, connected parties and/or employees 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. 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. Maybank Investment Bank Berhad 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.

This report is prepared for the use of Maybank Investment Bank Berhad'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 Maybank Investment Bank Berhad and Maybank Investment Bank Berhad 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.


3 April 2012 of 27

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

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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

Kim Eng Vietnam Securities Company 1st Floor, 255 Tran Hung Dao St. District 1 Ho Chi Minh City, Vietnam Tel : (84) 838 38 66 36 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 Connie TAN [email protected] Tel: (65) 6333 5775 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.kimengresearch.com.sg

APPENDIX 1 Additional Disclaimer (for purpose of distribution in Singapore) This report has been produced as of the date hereof and the information herein maybe subject to change. Kim Eng Research Pte Ltd ("KERPL") in Singapore has no obligation to update such information for any recipient. Recipients of this report are to contact 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), 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. As of 3 April 2012, KERPL does not have an interest in the said company/companies.

Additional Disclaimer (for purpose of distribution in the United States) This research report prepared by Maybank Investment Bank Berhad 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 Kim Eng Securities USA, 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 Kim Eng Securities USA in the US shall be borne by Kim Eng. All resulting transactions by a US person or entity should be effected through a registered broker-dealer in the US. 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. This report is not directed at you if Kim Eng Securities 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 Kim Eng Securities is permitted to provide research material concerning investments to you under relevant legislation and regulations. Without prejudice to the foregoing, the reader is to note that additional disclaimers, warnings or qualifications may apply if the reader is receiving or accessing this report in or from other than Malaysia. As of 3 April 2012, Maybank Investment Bank Berhad and the covering analyst does not have any interest in in any companies recommended in this Market themes report. Analyst Certification: 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.

Additional Disclaimer (for purpose of distribution in the United Kingdom) This document is being distributed by Kim Eng Securities Limited, which is authorised 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.

Published / Printed by

Maybank Investment Bank Berhad (15938-H)

(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 Stockbroking Business:

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

http://www.maybank-ib.com

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