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No fast recovery in sight CY15F-17F CPO prices (US$, FOB) cut by 13-16% – as we

impute higher stockpile, lower soybean/crude oil prices

Palm oil is losing market share in China. With renewed export/import duty war looming – Malaysian refiners/ planters are at risk

Indonesia is facing B15 dilemma; as smallholders’ income plummeted

Cut LSIP, FGV, SGRO to Fully Valued. A repeat of CY01 down-cycle (bear-case scenario) would heighten liquidity risks without debt rollovers

Persistent inventory overhang. We cut CY15F-17F Crude Palm Oil (CPO) prices (US$, FOB) by 13-16% on weaker-than-expected demand this year and lower soybean oil price forecasts. We revised global palm oil stockpile higher – even though we now expect flat FFB yields next year from scattered dryness in Sabah/Sumatra/Kalimantan as well as a drop in smallholder fertiliser application in Indonesia this year. Implementation of Indonesia’s B15 programme should boost palm oil demand next year, but we conservatively assume partial adherence. Beware of near-term risks. Oil World expects China’s palm oil demand to drop for the second consecutive year in Oct/Sep-15; even as soybean oil demand is projected to expand. With Indonesia’s slipping consumption (due to drop in biodiesel output); palm oil demand growth is increasingly dependent on shipments to India. But cheap imports are competing with India’s oilseed farmers. We do not discount India hiking palm oil import duties – now that inflation is no longer an issue there. This is a risk to Malaysian planters/refiners, in our view. To blend or not to blend, that is the question. Indonesia’s US$50 export levy on CPO and US$30/MT for RBD Olein work out as 12% and 6% export taxes respectively. The implied 6% spread suggests Indonesian refiners are more profitable than their Malaysian counterparts; but vice versa for respective planters. Indonesian FFB prices are now below cost in some places – while Pertamina’s projected biodiesel off-take could prove insignificant to counter the drop in discretionary biodiesel demand and expanding soybean planted acreage. Beware of negative cash flow. We understand some planters have begun putting off new planting this year – not only to ensure sustainable practices, but also to preserve cash. If low prices were to linger longer; debt rollovers are inevitable. That said, it is now a buyers’ market for net-cash planters. We cut LSIP, FGV and SGRO to Fully Valued; and FR is cut to HOLD. BUY calls are reiterated for BAL and WIL; on recent sell-off, relatively strong balance sheets and steady dividends/earnings growth. Our bear-case scenario: a repeat of CY01 down-cycle. Similar to CY01 down-cycle, a commodities sell-down could yet drag both soybean and palm oil prices below cost – until inventory overhang is absorbed. Under such a scenario, CY16F/ CY17F palm oil prices (US$, FOB) would average 7-8% lower than our base case. Our bear case summary is presented on page 9.

JCI : 4,347.16 KLCI : 1,647.15 STI : 2,841.94 Analysts Ben SANTOSO +65 6682 3707 [email protected] Marvin KHOR +603 2604 3911 [email protected] Stock coverage

Source: DBS Bank, DBS Vickers, Alliance DBS *prices as at 15Sep15 closing CPO, Soybean, Soybean Oil, Rubber price revisions Source: DBS Bank, DBS Vickers, AllianceDBS Research

DBS Group Research . Equity 17 Sep 2015

Regional Industry Focus

Plantation Companies

Refer to important disclosures at the end of this report

Price* Mkt Cap Target

Price Performance (%)

LCY US$m LCY 3 mth 12 mth Rating

Rp Astra Agro Lestari 17,825 1,949 14,900 (22.2) (23.7) FV Eagle High Plantations 266 582 260 (28.3) (72.7) HOLD London Sumatra 1,195 566 990 (25.8) (34.0) FV Sampoerna Agro 1,300 171 1,110 (27.6) (39.5) FV RM Felda Global Ventures 1.61 1,377 1.05 (6.4) (56.1) FV Genting Plantations 9.90 1,801 9.60 (0.5) (1.6) HOLD IJM Plantation 3.20 661 3.25 (7.8) (12.6) HOLD IOI Corporation 4.06 6,000 3.20 1.3 (15.9) FV KL Kepong 22.00 5,494 19.25 2.8 0.4 HOLD Sime Darby 7.78 11,331 7.60 (9.3) (13.8) HOLD TSH Resources 1.81 575 1.95 (19.6) (16.7) HOLD S$ Bumitama Agri 0.755 938 0.88 (23.7) (31.4) BUY First Resources 1.625 1,830 1.69 (18.8) (19.2) HOLD Golden Agri Resources 0.31 2,806 0.27 (23.5) (38.6) NR Indofood Agri Resources 0.47 464 0.47 (31.9) (44.7) HOLD Wilmar International 2.61 11,758 3.70 (20.2) (18.2) BUY

14 15F 16F 17F 18F 19F 20FCPO price (RM/MT FOB P.Gudang) 2,413 2,200 2,350 2,450 2,610 2,740 2,880CPO price (US$/MT FOB P.Gudang) 738 543 538 561 596 627 659Prev. CPO price (RM/MT FOB P.Gudang) 2,413 2,270 2,370 2,490 2,580 2,700 2,830Prev. CPO price (US$/MT FOB P.Gudang) 738 626 632 666 693 724 759

Soybean price (US$/MT FOB Chicago) 457 338 322 318 321 335 350Soybean oil price (US$/MT FOB Chicago) 812 646 655 681 717 748 780Previous SB price (US$/MT FOB Chicago) 457 326 308 327 342 356 372Previous SBO price (US$/MT FOB Chicago) 812 679 691 734 762 795 830

TSR20 price (US$/MT) 1,721 1,408 1,460 1,502 1,527 1,552 1,578Prev. TSR20 px (US$/MT) 1,721 1,433 1,607 1,727 1,735 1,735 1,735

Sugar price (US$/MT) 421 300 310 310 320 330 340



Peer comparison

Source: Companies, Bloomberg Finance LP, DBS Bank, DBS Vickers, AllianceDBS Research



Page 2

Es t. la nd ba nk

15F own ma t.

15F own

p la nte dSha re pric e Ma rke t c a p

Adjuste d 15F

EV/pla nte d

Adjuste d 15F

EV/ma ture

15F-17F own FFB vo l

CAGR

15F-17F EPS

CAGR Re cTa rge t pric e Ba s i s

(ha .) (ha .) (ha .) 9-15-2015 (m) (own) (own) 15F 16F 15F 16F 15F 16F 15F 16F 15F 16F % %

Indone s ia

Astra Agro L. n/a 196,177 236,311 17,825Rp 1,949US$ 10,108US$ 12,176US$ 37.4 18.4 4.0 1.2 -70.0 103.7 43.7 35.3 15.5 9.8 5.5 50.1 FV 14,900Rp DCF

Eagle High P. 419,006 101,241 139,606 266Rp 582US$ 8,277US$ 11,414US$ neg neg 0.0 0.0 NM NM 106.5 106.5 21.0 14.3 17.9 NM H 260Rp DCF

London Sum.* 215,917 79,976 93,135 1,195Rp 566US$ 5,396US$ 6,284US$ 18.3 19.8 4.6 2.2 -51.4 -7.4 NC NC 13.0 14.2 4.5 (0.6) FV 990Rp DCF

Sampoerna A. 246,873 56,823 79,141 1,300Rp 171US$ 3,730US$ 5,195US$ 17.5 31.6 3.5 1.4 -58.8 -44.6 60.0 66.1 7.6 8.0 7.6 (46.8) FV 1,110Rp DCF

Simple a vg 3,268US$ 6 ,878US$ 8 ,767US$ 24.4 23.2 14.3 11.6

Ma la ys ia

Felda Global V. 355,864 267,805 329,683 1.61RM 1,377US$ 7,045US$ 8,672US$ 59.1 30.1 1.3 1.7 -69.5 96.3 57.8 67.3 12.3 11.4 3.3 45.9 FV 1.05RM DCF

Genting Plant. 150,912 92,457 126,251 9.90RM 1,801US$ 18,957US$ 25,885US$ 39.6 33.6 0.6 0.7 -48.9 17.7 NC 3.9 29.7 25.2 10.1 25.2 H 9.60RM SOP

IJM Plant. 78,484 44,340 58,389 3.20RM 661US$ 12,370US$ 16,289US$ 26.2 22.1 1.6 2.0 -6.8 25.4 21.2 24.3 16.7 13.3 12.9 20.8 H 3.25RM DCF

IOI Corp** 220,593 149,568 178,765 4.06RM 6,000US$ 10,729US$ 12,824US$ 57.7 30.4 1.3 1.4 -95.0 334.7 92.6 92.5 32.4 20.2 -0.1 141.0 FV 3.20RM DCF

KL Kepong 245,905 174,523 190,952 22.00RM 5,494US$ 11,151US$ 12,201US$ 25.7 23.2 2.3 2.6 -10.8 13.1 15.8 14.2 15.5 13.9 2.9 9.2 H 19.25RM DCF

Sime Darby 647,373 526,052 595,139 7.78RM 11,331US$ 6,681US$ 7,558US$ 20.9 19.7 2.4 2.4 -32.6 -0.2 46.4 38.7 14.1 12.3 3.3 5.9 H 7.60RM SOP

TSH Res. 82,841 27,177 45,301 1.81RM 575US$ 10,475US$ 17,460US$ 21.5 19.9 1.2 1.3 -8.5 7.9 79.7 82.4 16.8 15.9 12.4 9.0 H 1.95RM DCF

Simple a vg 27,238US$ 11,058US$ 14,413US$ 35.8 25.6 19.6 16.0

Singa pore

Bumitama A. 191,561 91,731 115,413 0.76S$ 938US$ 11,603US$ 14,599US$ 21.2 13.6 1.6 0.8 -46.8 56.3 58.8 57.9 15.1 9.1 15.2 35.8 B 0.88S$ DCF

First Resources 312,488 119,856 170,736 1.63S$ 1,830US$ 12,389US$ 17,648US$ 16.0 14.9 2.1 1.7 -33.0 7.8 9.2 3.9 9.1 7.9 8.3 13.4 H 1.69S$ DCF

Golden Agri R. 558,000 356,115 372,951 0.31S$ 2,806US$ 14,758US$ 15,456US$ 30.2 20.9 0.3 1.3 -20.7 44.7 26.1 64.8 12.5 9.1 4.7 34.2 NR 0.27S$ DCF

Indofood Agri* 541,224 199,187 250,483 0.47S$ 464US$ 4,694US$ 5,903US$ NM 17.3 0.0 0.0 -93.1 620.7 30.6 40.4 13.8 8.0 7.3 197.4 H 0.47S$ DCF

Wilmar Int'l 573,401 216,663 243,287 2.61S$ 11,758US$ 2,098US$ 2,355US$ 11.5 11.1 1.8 1.8 -8.8 3.3 69.1 67.9 11.3 10.2 2.3 5.0 B 3.70S$ DCF

Simple a vg 17,796US$ 10,861US$ 13,401US$ 19.7 15.5 12.4 8.9* Including rubber and other crops** Excluding effective stake in associates land bank

CY PER, x

FY Div. yie ld ,

%

EPS growth (inc . BA

ga ins ), %

FY Ne t ge a ring,

%FY EV/

EB ITDA, x



Analyst Ben SANTOSO +65 6682 3707 [email protected] Marvin KHOR +603 2604 3911 [email protected]

Table of contents Peer comparison 2 Strategy and stock picks 4

Our key message 4

Not quite 2001 déjà vu 4

Why we continue to recommend Wilmar 4

Changes to our ratings 5

2QCY15 results were mostly weaker than expected 5

Changes to our key assumptions 6

Changes to our earnings forecasts 7

Our bear-case scenario 8

Indonesia’s B15 policy dilemma 10

Have valuations gone too far? 11

Palm oil refining margin is recovering 13

Key risks to our call 14

Strong USD helped offset lower prices 16 Soybean inventory overhang continues 16

Lowering our soybean oil price forecasts 16

Oil palm new planting had accelerated in CY13-14 16

Expect a slower palm oil price recovery 16

Caveat emptor: more pain, no gain 17

Lesson from 1998 El Nino 17

Palm oil spot prices are dropping faster than futures 18

Appendix 19 2QCY15 results review and changes in forecasts 19

STOCK PROFILE 23

Astra Agro Lestari 24

Bumitama Agri 25

Eagle High Plantations 26

Felda Global Ventures 27

First Resources 28

Genting Plantations 29

Golden Agri Resources 30

IJM Plantations 31

Indofood Agri Resources 32

IOI Corporation 33

KL Kepong 34

London Sumatra Indonesia 35

Sampoerna Agro 36

Sime Darby 37

TSH Resources 38

Wilmar International 39



Strategy and stock picks Our key message

1. Slower recovery ahead. Indonesia’s efforts to replace lost discretionary biodiesel demand have not materialised this year. Together with global soybean inventory overhang, palm oil price recovery will be slower than we previously expected.

2. Scaling back our valuations. There is further downside potential for some counters; as palm oil prices are adjusted lower and risk premiums are raised. We recommend re-aligning any exposures in the sector.

3. Assessing a worst-case scenario. Current prices are close to production costs in Indonesia and soybean in the US. However, a protracted period of below-cost prices is possible if crude oil prices stay at current level. Similar to CY01 down-cycle, this does not mean smallholders will stop harvesting – as cash revenue is still better than none.

Not quite 2001 déjà vu

If history is any lesson, we should expect palm oil oversupply to linger for another 12 months. However, unlike the CY01 down-cycle, there is now a biodiesel plan to absorb the excess supply – at least in theory. In this report, we assume Indonesia’s B15 programme to absorb c.3.9m MT of CPO (using effective blending rate of 13%) in CY16F and 4.7m MT in CY17F (based on effective blending rate of 14%) – representing 231% and 19% y-o-y growth respectively. We assume partial adherence; as we are not entirely certain there would be enough funds to cover both B15 blending and replanting – as had been planned and reported in the media. 1. Next year’s B15 blending needs at least US$382m based

on 4.2m kl volume required to meet the 15% blend. This amount is needed to cover the difference between diesel prices at the pumps (Rp6,900/litre or US$484/kl) and the biodiesel purchase price (US$575/MT).

2. Assuming next year’s export levy proceeds are US$1.25bn (US$50/MT x 25m MT palm oil exports) then B15 will need 30% allocation (i.e. 70% for replanting and others). However, not all exports are in the crude form. If the exports are mostly RBD Olein, the collected fund would amount closer to US$750m (US$30/MT x 25m MT RBD Olein exports) – in which case the B15 blending would need at least a 50% allocation.

When fully implemented, this programme should at least work to narrow palm oil's price discount to soybean oil next year. However, if there is a fund misallocation; the programme will not have the desired effect. Why we still recommend Wilmar

We reiterate our BUY call on Wilmar for the following rationale: 1. Wilmar has the largest palm oil refining and biodiesel

capacities in Indonesia. The fixed US$20/MT spread in export levies between CPO and RBD Olein should enable the group to maximise its capacities (i.e. from 2H15 for refining and from CY16F for biodiesel).

2. Lower soybean prices (i.e. feedstock cost) and the absence of price disruptions caused by financial traders in China has put Wilmar’s core processing operations in a stronger position there.

3. Relative to Malaysian integrated peers, Wilmar is trading at a substantial discount for its size and dominance.

4. Excluding cumulative biological asset gains (losses), the group had accumulated c.US$5.8bn in retained earnings (c.US$0.90/share or S$1.27/share) since. In SGD terms Wilmar’s share price should therefore reflect S$1.27 higher valuation than 08 GFC low of S$1.76 or S$3.03/share. We think the sell-down has been excessive.

While CNY devaluation would adversely impact Wilmar’s revenues from China in USD terms, it is unlikely to translate into significantly weaker earnings. 1 Any significant CNY depreciation would be managed in

two ways: readjustment of local Consumer segment prices (with some lag) when cost-cutting efforts have already been exhausted. With significant economies of scale; it is unlikely that Wilmar would see market share losses.

2 Ignoring domestic price adjustments, translation of weaker CNY revenues is unavoidable. However, Wilmar’s earnings are not entirely dependent on China. In our estimates, FY15 EBIT contribution from China is c.49%.

3 Given China’s rising inflation (due to high pork prices), we believe demand for soybean meal should continue to ramp up – now that soybean prices have dropped – despite a weaker CNY.



4 If the concerns were on contagion impact to regional currencies (hence impacting Wilmar’s earnings in other countries), we should note that its products are USD based and its costs are partly in local currencies.

Changes to our ratings

In addition to Wilmar, we also maintain our BUY call on Bumitama Agri, as we believe the group’s balance sheet remains strong to endure low CPO prices and capital expenditure on immature estates. However, in our estimation, the group would need to refinance its RM500m Sukuk when it comes due in CY19F. As a reflection of lower CPO prices, higher risk premiums, rising costs and, to some extent, jump in USD-linked borrowing costs; we downgrade our calls for Felda Global Ventures, London Sumatra and Sampoerna Agro to FULLY VALUED from HOLD. Our rating for First Resources is also cut to HOLD from BUY, given limited return based on our adjusted valuation. Our HOLD calls are reiterated for Genting Plantations, IJM Plantations, Indofood Agri Resources, KL Kepong London Sumatra, Sime Darby and TSH Resources. We upgrade Eagle High Plantations to HOLD, as we believe the recent share price correction has reflected the group’s deteriorating outlook.

Our Fully Valued calls are maintained for Astra Agro and IOI Corporation given downside risks to our revised TPs. 2QCY15 results were mostly weaker than expected

2QCY15 results were characterised by a strong sequential recovery in FFB output – as yields had fully recovered from lower-than-normal 1QCY15. Yet, output for the full year was for the most part guided lower, as yields may be adversely affected by reduced rainfall in July through Aug-15. The q-o-q output recovery was accompanied by slightly weaker CPO ASP and inventory accumulation – given the jump in production. For some Indonesian planters, 2Q15 results also revealed higher-than-expected costs and ASP discount (relative to international spot prices) as domestic buyers began pricing-in the export tax levies (which did not officially go live until 16-Jul-15). Most planters had also lowered their guidance on new planting for the year; given the drop in CPO prices and stricter sustainability criteria. For integrated counters, refining margins remained weak in 2QCY15, as zero CPO export tax regimes in both Malaysia and Indonesia since Oct-14 had pushed up feedstock costs relative to end product prices. But as in 1QCY15, margins for specialty fats continued to perform relatively better. Provided below is a summary of 2QCY15 results:

Summary of 2QCY15 results Source: Companies, DBS Bank, AllianceDBS Research

Reported 2QCY15 earnings

(LCY)

Reported vs.

FY15F

FX gains

(losses) (LCY)

Other one-offs (LCY)

Earnings ex. gains (losses)/ one-offs

(LCY)

Core vs.

FY15FHist orica l

avg. Remarks

FFB yield

(MT/ha)chg. y-o-y

CPO ASP (RM/MT)

CPO ASP (US$/MT)

CPO ASP

(Rp/kg)chg. y-o-y

Astra Agro L. 288.0 12.6% -113.0 - 402.0 17.6% Below 5.8 -26.6% 7,469 -12.5%Bumitama A. 217.7 15.7% 217.7 15.7% Below 4.0 -16.7% -14.0%Eagle High P. 5.1 1.3% 5.1 1.3% Below 3.1 -22.0% 7,222 -11.9%Felda Global V. 46.1 45.2% - 30.0 16.1 1.6% 39.0% Below 4.7 6.1% 2,251 -14.8%First Resources 28.6 17.7% 28.6 17.7% Below 4.6 10.0% 593 -15.5%Genting Plant. 40.0 13.0% 41.0 13.3% Below 4.5 n.a. 2,171 -16.0%Golden Agri R. 39.0 13.2% 39.0 13.2% Below 5.6 0.0% 650 -23.0%IJM Plant. 22.9 17.2% -10.6 - 33.4 25.0% 23.5% In line 5.6 -11.1% 2,167 -15.5%Indofood Agri 2.0 0.2% 2.0 0.2% Below 4.6 7.0% 7,415 -12.0%IOI Corporation 159.7 19.2% Below 6.0 5.3% 2,247 -15.7%KL Kepong 247.0 28.2% 256.0 29.2% Above n.a. n.a. 2,126 -15.2%London Sum. 156.0 19.5% 156.0 19.5% Below 4.1 -8.9% 7,378 -12.7%Sampoerna A. 81.9 28.6% 81.9 28.6% Above 4.3 2.4% 7,656 -12.8%Sime Darby 988.7 51.3% 842.0 43.7% In line 6.1 n.a. 2,192 -11.4%TSH Res. 7.1 6.3% -10.6 - 17.7 15.6% 22.2% Below 5.7 -9.5% 2,107 -14.5%Wilmar Int'l 202.0 17.6% 194.0 16.9% Below 5.5 3.8% n.a.



Changes to our key assumptions

We lowered FY15F/16F/17F CPO price expectations (US$, FOB) by 13%/15%/16%; as we see more pressures from increased supplies from Indonesia. Further drops in crude oil prices have also had a positive correlation with soybean prices – thereby reducing our soybean oil price expectations. We cut CY15F and CY16F Brent prices to US$54/bbl and US$59/bbl (from US$61 and US$75 respectively), as we imputed recent forecasts published by US EIA (Energy Information Administration) Short Term Energy Outlook. Our CY17F Brent price assumption is likewise trimmed to US$64/bbl (from US$85) – based on World Bank Commodity Outlook. Cuts in Brent price forecasts have had corresponding

negative revisions for FY15F/16F/17F rubber (STR20, FOB) prices – which in this report we cut by 3%/8%/12%. In line with in-house currency forecasts, we also adjusted our SGD, MYR and IDR FX rates weaker. While local CPO prices and fertiliser prices were increased, this would be offset by FX translation losses for planters with significant exposure to USD borrowings. We also revised Indonesia palm oil export tax to impute changes in structure from percentage rates into absolute USD rates (still in sliding scale format). Changes to our earnings and TP estimates are summarised below:

Summary of CPO, soybean, and soybean oil price revisions Source: DBS Bank estimates Revisions to our currency exchange rates Source: DBS Bank estimates

14 15F 16F 17F 18F 19F 20FCPO price (RM/MT FOB P.Gudang) 2,413 2,200 2,350 2,450 2,610 2,740 2,880CPO price (US$/MT FOB P.Gudang) 738 543 538 561 596 627 659Prev. CPO price (RM/MT FOB P.Gudang) 2,413 2,270 2,370 2,490 2,580 2,700 2,830Prev. CPO price (US$/MT FOB P.Gudang) 738 626 632 666 693 724 759

Soybean price (US$/MT FOB Chicago) 457 338 322 318 321 335 350Soybean oil price (US$/MT FOB Chicago) 812 646 655 681 717 748 780Previous SB price (US$/MT FOB Chicago) 457 326 308 327 342 356 372Previous SBO price (US$/MT FOB Chicago) 812 679 691 734 762 795 830

TSR20 price (US$/MT) 1,721 1,408 1,460 1,502 1,527 1,552 1,578Prev. TSR20 px (US$/MT) 1,721 1,433 1,607 1,727 1,735 1,735 1,735

Sugar price (US$/MT) 421 300 310 310 320 330 340

FX ra te s (YE) 14 15F 16F 17F 18F 19F 20FUSD/MYR 3.48 4.34 4.37 4.37 4.37 4.37 4.37USD/IDR 12,440 14,470 14,640 14,460 14,460 14,460 14,460USD/SGD 1.32 1.42 1.46 1.45 1.45 1.45 1.45USD/THB 32.94 36.00 37.30 36.90 36.90 36.90 36.90

Pre vious FX ra te s (YE) 14 15F 16F 17F 18F 19F 20FUSD/MYR 3.48 3.69 3.77 3.73 3.73 3.73 3.73USD/IDR 12,440 13,660 14,070 13,870 13,870 13,870 13,870USD/SGD 1.32 1.38 1.42 1.40 1.40 1.40 1.40USD/THB 32.94 33.30 33.70 33.50 33.50 33.50 33.50

% stre ngthe n (we a ke n) 14 15F 16F 17F 18F 19F 20FUSD/MYR 0% -15% -14% -15% -15% -15% -15%USD/IDR 0% -6% -4% -4% -4% -4% -4%USD/SGD 0% -3% -3% -3% -3% -3% -3%USD/THB 0% -8% -10% -9% -9% -9% -9%



Changes to our earnings forecasts

In addition to changes in our CPO price and FX rate assumptions, we also revised SGX-listed planters’ earnings estimates from CY16F to include a revision in IAS 41 (Biological Assets) – which transfers bearer plants as per IAS 16 (Property

Plant & Equipment). Malaysian planters, we understand, will adopt this from CY17 onwards – hence we have not adjusted their numbers to re-state replanting expenses (i.e. to be capitalised into PPE). Overall, we cut FY15F-16F earnings by up to 85%, and our TP by up to 35%.

Summary of EPS and TP revisions Source: DBS Bank, AllianceDBS Research estimates

R

Pre v. CY15

F EPS

Pre v. CY16

F EPS

Ne w CY15

F EPS

Ne w CY16

F EPS

CY15F

EPS re v.

CY16F

EPS re v.

Pre v. TP

Ne w TP

TP re v. Comme nts

Indone s ia (EPS/TP)Astra Agro Lestari (Rp) FV 1,011 1,367 477 971 -53% -29% 17,900 14,900 -17% Cut ASP, cut IDR, cut new planting, debt rolloversEagle High Plant. (Rp) H 1 6 -3 -1 NM NM 320 260 -19% Cut ASP, cut IDR, cut new planting, new debtsLondon Sumatra (Rp) FV 92 90 65 60 -29% -33% 1,340 990 -26% Cut ASP, cut IDRSampoerna Agro (Rp) FV 151 148 74 41 -51% -72% 1,710 1,110 -35% Cut ASP, cut IDR, cut new planting, debt rollovers

Ma la ys ia (EPS/TP)Felda Global V. (sen/RM) H 2.7 5.8 2.7 5.3 0% -9% 1.20 1.05 -13% Cut CPO ASP, cut downstream marginsGenting Plant. (sen/RM) H 28.8 29.1 25.0 29.5 -13% 1% 9.70 9.60 -1% Cut M'sia/I'sia CPO ASP, cut MYRIJM Plantations (sen/RM) H 13.9 16.4 12.2 14.4 -12% -12% 3.45 3.25 -6% Cut M'sia/I'sia CPO ASP, cut MYRIOI Corporation (sen/RM) FV 7.5 13.9 7.0 13.4 -6% -4% 3.20 3.20 0% Cut CPO ASP, cut MYRKL Kepong (sen/RM) H 85.2 96.1 85.6 95.0 0% -1% 19.50 19.25 -1% Cut M'sia/I'sia CPO ASP, cut MYRSime Darby (sen/RM) H 36.1 37.0 37.2 39.5 3% 7% 7.40 7.60 3% Cut M'sia/I'sia CPO ASP, cut MYRTSH Resources (sen/RM) H 8.4 9.8 8.4 9.1 0% -7% 2.00 1.95 -3% Cut M'sia/I'sia CPO ASP, cut MYR

Singa pore (EPS/TP)Bumitama Agri (Rp/S$) B 586 773 349 545 -40% -29% 1.17 0.88 -24% Apply IAS16 on bio. assets, refin. Sukuk in FY19F, cut CPO ASPFirst Resources (US¢/S$) H 9.4 11.5 7.3 7.9 -22% -31% 2.04 1.69 -17% Apply IAS16 on bio. assets, refin. cut CPO ASPGolden Agri R. (US¢/S$) NR 1.1 2.5 0.7 1.1 -33% -57% 0.26 0.27 3% Apply IAS16 on bio. assets, refin. cut CPO ASPIndofood Agri (Rp/S$) H 243 452 37 266 -85% -41% 0.56 0.47 -16% Apply IAS16 on bio. assets, refin. cut CPO ASP, debt rolloversWilmar Int'l (US¢/S$) B 17.5 18.4 16.5 17.0 -6% -8% 3.80 3.70 -3% Apply IAS16 on bio. assets, refin. cut CPO ASP



Summary of biological asset adjustments for SGX-listed planters Source: Companies, DBS Bank estimates Our bear-case scenario

While we believe deterioration in Plantations’ earnings outlook has been mostly priced in, there remains a risk of further risk premium expansion and sell-down in soybean/palm oil prices should there be an extended volatility in the crude oil prices.

To assess the impact of this scenario, we put forward a bear-market scenario in which soybean price down-cycle lasts for an extended period – similar to the CY01 downturn. Similarities with CY01 include absence of China demand growth, steep devaluations in both Brazilian Real and Argentine Peso (black market), and drop in crude oil prices.

BAL FR GGR IFAR WILin Rp m In US$ '000 In US$ '000 in Rp m In US$ '000

FV ga ins ( los s es ) on biologica l as s etsa Gross cummulative FV gains (losses) 1,136,422 256,426 6,116,449 2,222,094 550,990 b Est. def'd tax liabilities of biological assets (285,992) (51,412) (1,463,914) (608,691) (174,454)

c = a - b Net cummulative FV ga ins ( los s es ) 850,430 205,014 4,652,535 1,613,403 376,536

Biologica l as s ets breakdownd Own mature (annual report) (ha) 77,177 114,377 344,778 185,181 215,345

f = d / j Share 67% 68% 93% 75% 88%g Own immature (annual report) (ha) 38,286 54,945 27,173 60,874 28,224

h = g / j Share 33% 32% 7% 25% 12%j Tota l planted (ha ) 115,463 169,322 371,951 246,055 243,569k Estimated bearer plant useful life - years 25 25 25 25 25l Average age of oil palm trees - years 7 8 14 13 12

m Biological assets value (Jun15) - under FRS 41 7,893,992 935,936 7,927,247 15,459,955 1,841,329 n = a Reversal of gross cummulative FV gains (losses) (1,136,422) (256,426) (6,116,449) (2,222,094) (550,990)

p = m - n Biologica l as s ets va lue ( Jun15) - under FRS 16 6,757,570 679,510 1,810,798 13,237,861 1,290,339 q = f x p Mature assets 4,516,849 459,009 1,678,510 9,962,815 1,140,819 r = h x p Immature assets 2,240,721 220,501 132,288 3,275,046 149,520

Deprecia tion cos ts = q / k Depreciation expense FY16F 180,674 18,360 67,140 398,513 45,633 t = l x s Accumulated depreciation FY15F 1,246,650 146,883 939,965 5,180,664 547,593

v = p - t Net biologica l as s ets va lue 5,510,920 532,627 870,833 8,057,197 742,746

Change in equityw Equity attributable to owners of the company 6,483,236 1,063,189 8,728,503 14,627,697 15,494,934

x = c Reversal of net cummulative FV gains (losses) (850,430) (205,014) (4,652,535) (1,613,403) (376,536) y = s x (1-tax) Accumulated depreciation (net of tax) (934,988) (110,162) (704,974) (3,885,498) (410,695)

w - x - y Equity a ttributable to owners of the company 4,697,818 748,013 3,370,994 9,128,796 14,707,703 % Change -27.5% -29.6% -61.4% -37.6% -5.1%

Change in ba lance s heet pos itionAs s ets

a + t Change in biological assets (2,383,072) (403,309) (7,056,414) (7,402,758) (1,098,583) Tota l (2,383,072) (403,309) (7,056,414) (7,402,758) (1,098,583)

Liabi l itie s + equityb - (t + y) Change in deferred tax liabilities (597,655) (88,133) (1,698,905) (1,903,857) (311,352)

c + y Change in equity attributable to owners (1,785,418) (315,176) (5,357,509) (5,498,901) (787,231) Tota l (2,383,072) (403,309) (7,056,414) (7,402,758) (1,098,583)



Even with lower expected yields from increasingly dry weather this year, we now expect global palm oil stock/usage ratio to settle at 19% by end-CY15 before gradually easing towards 17% by end-CY16 (vs. previous forecasts of 18% and 16% respectively). This mainly results from drop in crude oil prices and disappearance of discretionary biodiesel demand. In our bear-case scenario, we expect CPO prices to average US$496/MT in CY16F and US$521/MT in CY17F, while soybean oil prices are forecast to average US$605/MT in CY16F and US$635/MT in CY17F. At these prices, companies with significant USD debts would be most impacted.

Based on our estimates, AALI, GENP, IFAR and IOI would be impacted to varying degrees. A summary of USD debt exposures of planters in our coverage are provided below. As we assess bear-scenario impact on cash flow, we caution that a planter would need to undertake the following measures to preserve internal liquidity: 1. Cut new planting 2. Roll over debts maturing over the next 24 months 3. Shorten cash conversion cycle A summary of the impact on our earnings forecasts and valuations are shown in the following table:

Summary of CPO, soybean, and soybean oil prices (bear case) Source: DBS Bank estimates

Summary of earnings and TP under bear case scenario Source: DBS Bank, AllianceDBS Research estimates

14 15F 16F 17F 18F 19F 20FCPO price (RM/MT FOB P.Gudang) 2,413 2,200 2,170 2,280 2,540 2,700 2,840CPO price (US$/MT FOB P.Gudang) 738 546 496 521 581 617 649

Soybean price (US$/MT FOB Chicago) 457 334 298 296 313 328 343Soybean oil price (US$/MT FOB Chicago) 812 639 605 635 699 733 766

Bear case scenario R

Base FY16F

net profit

Base FY17F

net profit

Bear FY16F

net profit

Bear FY17F

net profit

CY16F net

profit rev.

CY17F net

profit rev.

Base TP

Bear TP

TP rev. Comment s

Indonesia (Earnings/TP)Astra Agro Lestari (Rp bn/Rp) FV 1,529 1,692 882 1,037 -42% -39% 14,900 13,850 -7% Cut CPO ASP, cut planting rollover debtsEagle High Plant. (Rp bn/Rp) H -39 26 -231 -190 NM NM 260 240 -8% Cut CPO ASP, cut planting rollover debtsLondon Sumatra (Rp bn/Rp) FV 413 440 211 228 -49% -48% 990 900 -9% Cut CPO ASPSampoerna Agro (Rp bn/Rp) FV 78 40 -39 -89 NM NM 1,110 970 -13% Cut CPO ASP, rollover debts

Malaysia (Earnings/TP)Felda G.V. (RM m/RM) FV 200 217 121 140 -40% -36% 1.05 1.00 -5% Cut CPO ASP, new debts, decl. cash balanceGenting Plant. (RM m/RM) H 196 269 162 233 -17% -13% 9.60 9.20 -4% Cut CPO ASP, net cash position, suff. cash flowIJM Plant. (RM m/RM) H 113 132 111 115 -2% -13% 3.25 3.15 -3% Cut CPO ASP, no new planting, suff. cash flowIOI Corp. (RM m/RM) FV 731 977 723 934 -1% -4% 3.20 3.10 -3% Cut CPO ASP, sufficient cash flowKL Kepong (RM m/RM) FV 1,000 1,055 936 973 -6% -8% 19.25 19.00 -1% Cut CPO ASP, sufficient cash flowSime Darby (RM m/RM) H 2,308 2,595 2,269 2,455 -2% -5% 7.60 7.55 -1% Cut CPO ASP, stand-by Sukuk, suff. cash flowTSH Resources (RM m/RM) H 122 135 107 117 -12% -13% 1.95 1.90 -3% Cut CPO ASP, cut planting, suff. cash flow

Singapore (Earnings/TP)Bumitama Agri (Rp bn/S$) H 958 1,130 717 876 -25% -22% 0.88 0.83 -5% Cut CPO ASP, rollover debtsFirst Resources (US$ m/S$) H 125 149 105 128 -16% -15% 1.69 1.62 -4% Cut CPO ASP, sufficient cash flowGolden Agri R. (US$ m/S$) NR 120 147 42 64 -65% -57% 0.27 0.25 -6% Cut CPO ASP, sufficient cash flowIndofood Agri (Rp bn/S$) H 379 465 50 147 -87% -68% 0.47 0.42 -11% Cut CPO ASP, cut planting rollover debtsWilmar Int'l (US$ m/S$) H 1,090 1,163 686 710 -37% -39% 3.70 2.75 -26% Cut FY16F Oilseeds/Consumer margins to 0.1%/1%



Summary of planters’ USD debt exposures Source: Companies, DBS Bank estimates, AllianceDBS Research estimates

Indonesia’s B15 policy dilemma

In our previous report; we pointed out several weaknesses to Indonesia’s B15 policy – some of which have materialised. The US$50/MT levy amounted to only 8% of CPO ASP when the levy concept was first introduced in late Mar-15 but it is now 12%, as prices have dropped 22% since then. At current domestic CPO price (net of export levy) of Rp5,950/kg, FFB are priced at c.Rp1,000-1,100/kg. In areas where smallholders rely on middlemen for collection, their FFB would be worth Rp200-500 less per kg – or close to production cost of Rp500-750/kg (without fertiliser application). Yet, there is no significant impact on supply. Cash income is still better than not harvesting – as Indonesian smallholders’ livelihoods have significantly diminished since export levies commenced. Given the US$50/MT price difference to neighbouring Malaysia, we do not rule out that some CPO may be smuggled, as fuel costs are cheaper now. However, volumes

should remain small – in percentage terms – given the traceability standards now being enforced. Further delays in B15 implementation (Pertamina is now expected to commence blending in Sep-15 – barring unforeseen circumstances) means that Indonesia will not achieve the biodiesel volume needed to absorb oversupply caused by expanding substitute oils and the disappearance of discretionary biodiesel demand. At current low prices, Indonesia should indeed step up its biodiesel output. However the cost may be too burdensome for smallholders. Meanwhile, the Indian government is now mulling over raising the import duties on cheap palm oil – to protect its oilseed farmers and refining industry’s interests. If this were to materialise in a big way, we believe refining margins will be hit. The first to be impacted are Malaysian refiners. Any hike in Malaysia’s export taxes to neutralise this will subsequently hit Malaysian upstream planters.

FY15F USD debts

(US$ m)

FY16F USDdebts

(US$ m)

USD debt maturing in next 12mths

(US$ m)

FY15F realised +

unrealised FX impact on P&L

(LCY m)

FY16F realised +

unrealised FX impact on P&L

(LCY m)

FY16F Netdebt/ total

equity (base case)

FY16F Net debt/ total

equity (bear case)

Astra Agro Lestari 423 423 0 -823,234 -67,129 35% 43%Bumitama Agri 335 335 0 -646,701 -37,238 58% 65%Eagle High Plantations 96 96 0 -207,459 -19,252 107% 113%Felda Global Ventures 0 0 0 0 0 67% 68%First Resources 607 607 0 0 0 4% 6%Genting Plantations 313 313 0 -121 -3 6% 7%Golden Agri Resources 1,558 1,571 390 -59 -11 65% 66%IJM Plantation 175 175 50 -42 -48 24% 24%Indofood Agri 204 204 0 -483,060 -34,757 40% 44%IOI Corporation 1,474 1,474 0 -735 -235 92% 92%KL Kepong 0 0 0 0 0 14% 15%London Sumatra 0 0 0 0 0 cash cashSampoerna Agro 0 0 0 0 0 66% 72%Sime Darby 2,228 2,228 0 -226 -568 39% 39%TSH Resources 0 0 0 0 0 82% 84%Wilmar International 20,457 21,530 n.a. n.a. n.a. 84% 87%



Indonesia biodiesel demand projections Sources: USDA, Handbook of Energy & Economic Statistics of Indonesia, Oil World, Pertamina, Kontan newspaper, DBS Bank estimates Biodiesel pricing formula: CPO price + US$125/MT Malaysia biodiesel demand projections Sources: USDA, MPOB, DBS Bank estimates Biodiesel pricing formula: RBD Palm Oil price + RM515/MT Have valuations gone too far?

YTD, plantation counters have de-rated, largely in reaction to the drop in CPO prices (somewhat offset by weaker Ringgit) on top of weaker China imports. While valuations of IDX and SGX-listed planters have reflected this, Bursa-listed planters have remained resilient, thus catapulting their PE ratios closer

towards +1SD above historical mean due to reduced earnings expectations. The current high PE ratios of Malaysian counters were last seen in 1998 prior to their collapse during the Asian Financial Crisis. We believe current levels are unsustainable as:

2012 2013 2014 2015F 2016F 2017F 2018FDiesel consumption (m litres) 4,677 4,911 5,156 5,414 5,673 5,942 6,221 growth 5% 5% 5% 5% 5% 5% 5% Biodiesel exports (m litres) 34 206 129 - - - - Domestic on-road biodiesel (m litres) 84 117 188 379 397 416 435 implied blend 2% 2% 4% 7% 7% 7% 7% Domestic biodiesel non subsidised (m litres) 47 66 106 106 106 106 106 implied blend 1% 1% 2% 2% 2% 2% 2%Total biodiesel produced (m lit res) 166 388 424 485 503 522 541 growth 171% 134% 9% 14% 4% 4% 4%Nameplate capacity (m litres) 2,747 2,747 2,747 2,747 2,747 2,747 2,747 utilisation rate 6% 14% 15% 18% 18% 19% 20%Malaysia palm oil production (MT) 18,785,139 19,216,459 19,666,993 19,730,037 20,237,274 20,619,812 21,193,642 growth -1% 2% 2% 0% 3% 2% 3%Palm oil required for biodiesel production (MT) 160,627 376,112 410,263 469,500 487,080 505,317 524,228Non biodiesel domestic palm oil consumption (MT 1,922,517 1,938,881 2,367,036 2,467,980 2,575,377 2,687,448 2,804,396Total domest ic palm o il consumpt ion (MT) 2,083,144 2,314,993 2,777,299 2,937,481 3,062,457 3,192,765 3,328,624 growth 16% 11% 20% 6% 4% 4% 4%Malaysia palm oil available for exports (MT) 16,701,995 16,901,466 16,889,694 16,792,557 17,174,817 17,427,047 17,865,018 growth -2% 1% 0% -1% 2% 1% 3%

2012 2013 2014 2015F 2016F 2017F 2018FDiesel consumption (m litres) 18,699 19,426 22,986 25,492 28,256 31,514 35,176 growth 14% 4% 18% 11% 11% 12% 12% Biodiesel exports (m litres) 1,515 1,356 1,000 - - - - Domestic biodiesel PSO (m litres) 670 930 1,644 892 3,673 4,412 5,276 implied blend 4% 5% 7% 4% 13% 14% 15% Domestic biodiesel non subsidised (m litres) - 118 981 327 362 404 451 implied blend 0.6% 4.3% 1.3% 1.3% 1.3% 1.3%Total biodiese l produced (m lit res) 2,185 2,404 3,625 1,219 4,036 4,816 5,728 growth 22% 10% 51% -66% 231% 19% 19%Nameplate capacity (m litres) 4,881 5,670 5,670 5,670 6,270 6,270 6,270 utilisation rate 45% 42% 64% 22% 64% 77% 91%Indonesia palm oil production (MT) 26,900,000 28,500,000 30,810,000 32,586,375 34,801,939 36,976,996 39,203,572 growth 11% 6% 8% 6% 7% 6% 6%Palm oil required for biodiesel production (MT) 2,115,080 2,327,653 3,509,876 1,180,499 3,907,536 4,663,274 5,545,645Non biodiesel domestic palm oil consumption (MT 5,012,920 5,755,347 5,244,124 5,377,300 5,692,738 6,057,038 6,457,571Total domest ic palm o il consumpt ion (MT) 7,128,000 8,083,000 8,754,000 6,557,800 9,600,274 10,720,312 12,003,216 growth 13% 13% 8% -25% 46% 12% 12%Indonesia palm oil available for exports (MT) 19,772,000 20,417,000 22,056,000 26,028,575 25,201,664 26,256,685 27,200,356 growth 10% 3% 8% 18% -3% 4% 4%



1. We expect CPO prices to remain below US$600/MT through CY18F – hence no quick recovery. This means earnings growth would be limited to volume.

2. Structurally, we also see risks of downstream profits being further eroded if India decides to hike its import duties on refined edible oils to protect its oilseed farmers’ interests.

We believe Malaysian valuations are not reflective of higher required risk premiums, as dividend yields erode. Elsewhere, forward PE ratios of SGX-listed planters now reflect slightly lower earnings – after we adjusted for depreciation charges on biological assets from CY16F onwards.

Malaysian planters’ sector PE continues to diverge Source: Bloomberg Finance LP, DBS Bank estimates

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Malaysia 1-year Forward PE

+1sd: 21.5x

Avg: 17.7x

-1sd: 13.9x

-2sd: 10.1x

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Regional 1-year forward PE

+1sd: 19.1x

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Singapore 1-year Forward PE

+1sd: 16.8x

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+1sd: 23.6x

Avg: 16.4x

+2sd: 30.7x

-1sd: 9.3x

-2sd: 2.1x



Singapore’s P/BV valuation is the cheapest regionally, as GGR, IFAR and WIL are trading below book Source: Bloomberg Finance LP, DBS Bank estimates Palm oil refining margin is recovering

According to the Economic Times, the Indian Agriculture Ministry is mulling increasing import duties on crude and refined edible oils to protect farmers’ interests and level the playing field for domestic oilseed processors. Based on our database, India’s current import tax for crude palm oil is 7.73% and that for RBD Olein is 15.45%, while the Solvent Extractors’ Association (SEA) is demanding the government to raise import duty on crude edible oil to 25% and that of refined edible oil to 45%. With crude palm oil (CPO) and RBD Olein (cooking oil) prices plunging to US$467/MT and US$495/MT FOB Pasir Gudang, Indonesia’s domestic CPO and RBD Olein prices are now 11% and 6% lower than international spot prices – given the US$50/MT and US$30/MT B15 export levies for CPO and RBD Olein respectively. This is naturally advantageous to Indonesian refineries over Malaysian/Indian refineries through some price discounts (similar to the situation which occurred between Sep-11 and

Jul-12 when the export tax spread between CPO and RBD Olein was 7.5%). While the situation was not as significant as when prices were at higher level, the recent price drop has brought urgency to the governments of India and Malaysia for competitive reasons. It is therefore not inconceivable that another round of export/import tax war may erupt, in reaction to Indonesia’s export tax policy. If India moves to impose higher import duties and refiners offer discounts to compensate, Malaysian refiners could lose market share. To compensate, Malaysian export tax may need to be adjusted higher. However this would adversely affect Malaysian domestic CPO prices and Malaysian planters alike. As before, the equilibrium can be reached only when Malaysia adopts the same export tax policy as Indonesia, in our view. The recent drops in Brazilian Real and crude oil prices have had a net positive impact on soybean farmers there, so we

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Malaysia 1-year Forward PB(X)

-2sd: 1.7x

-1sd: 2x

+2sd: 3x

+1sd: 2.7x

Avg: 2.4x

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Avg: 1.7x

+1sd: 2.1x

+2sd: 2.4x

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-2sd: 1.1x

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-2sd: 1.2x

Avg: 3.3x

+2sd: 5.5x

+1sd: 4.4x

-1sd: 2.2x



anticipate South American soybean planted acreage to continue expanding at the expense of US soybean production.

Against falling prices, we believe both Indonesia and Malaysia may have no choice but to burn their excess palm oil into biodiesel – until the USD stabilises.

Palm oil refining margins Source: Bloomberg Finance LP, SEA of India, MPOB, DBS Bank estimates Quarterly palm oil refining margin (in US$/MT - calculated based on spot CPO, RBD Olein, RBD Stearin, PFAD prices) Source: Bloomberg finance LP, SEA of India, MPOB, DBS Bank estimates

Key risks to our call

Risks to our view are summarised below: 1. Energy price volatility. In our forecasts, we employed

long-term Brent crude oil prices based on EIA and World Bank forecasts. Energy price volatility would impact demand for palm and soybean oil for energy use, subject to biodiesel subsidies.

2. USD strength. In our forecasts, we assume a strong USD. A reversal of this trend would have an adverse impact on soybean and crude oil prices in USD terms as well as CPO prices in Ringgit and Rupiah terms. Conversely, a weak USD may boost crude oil prices. Strong USD would also

make planting soybeans in South America more profitable, given the drop in crude oil prices.

3. Weather anomalies. Dry weather in 1Q15 and 3Q15 may

disrupt supply in the affected estates with a time lag (typically two years thereafter) and influence palm oil prices. Dryness/flooding in soybean growing regions would likewise influence the price of soybean oil.

4. China’s economic growth. We imputed demand growth

for both soybean and palm oil based on Jul-15 IMF global GDP growth forecasts. Weaker-than-expected economic growth forecasts globally would have adverse consequences on our price forecasts. In this sector, Chinese

3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15Indonesia 77.0 55.2 74.7 42.0 23.0 40.7 24.7 15.6 3.1 8.1 -5.4 -12.0 20.5 gross refining margin 9% 7% 10% 5% 3% 5% 3% 2% 0% 1% -1% -2% 4%Malaysia 13.2 33.2 17.6 32.1 35.6 30.9 36.8 45.0 46.4 -6.9 -5.5 -1.8 3.6 gross refining margin 1% 4% 2% 4% 5% 4% 4% 5% 6% -1% -1% 0% 1%

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Indonesia refining margin (US$/MT)

Malaysia refining margin (US$/MT)

Change in Indonesian export tax rates effective 15 Sep11

India RBD Olein import duty

(US$/MT)

India unfreezed the import base prices

for refined oils Jul12

Malaysia applied new CPO export tax

structure Jan13

Indonesia imposed export tax levies to support B15

programme on 16 Jul15



economic growth is an important demand proxy. China occupies 14% and 47% shares of global palm oil and soybean oil (implied) imports respectively.

5. Change in export/import tax structure. Changes in

Indian soybean and palm oil import taxes would have implications on Indian demand. India accounts for 19% of both palm oil and soybean oil imports globally.

6. The pace of South American soybean sales may also

have some bearing on palm oil price direction. Recent USD strength may lead to an increase in soybean exports and result in further price pressures. A release of Argentine soybean stocks to an already oversupplied market would send soybean prices tumbling further. Based on our revised forecasts, we expect soybean prices to average below US$9.00/bu. in CY16F.

7. Shift in seasonal planting patterns. The price divergence in soybean and corn prices may shift farmers’ planting to corn for the 2015/16 marketing year.

8. Changes in import/export taxes. Any move by the

Indian Government to raise refined edible oil import taxes would have adverse consequences on Malaysian refiners' margins, and any hike in export taxes in response would have a negative impact on Malaysian planters.

9. Faster-than-expected rise in production cost. The unit

cost of producing one MT of CPO in Indonesia is rising faster than inflation. Recent increases in workers' wages have all taken a toll on cost and may further erode margins. Likewise, labour shortages in Malaysia would continue to affect productivity and palm oil unit cost over the long term.



Strong USD helped offset lower prices Soybean inventory overhang continues

Recently, a combination of low crude oil prices, strong USD and fears of a protracted economic slowdown in China prompted a sell-down in soybeans. The sell-off was further fuelled by expectations of expansion in South American soybean acreage – given Brazilian Real and Argentine Peso (black market) devaluations – as well as a drop in biodiesel demand. We believe Chinese soybean demand will continue to remain strong. Hence, in our view, the sell-down may have been an adjustment from previous expectations of lower yields from wet weather. Indeed, our previous forecasts were calling for

lower soybean prices than levels seen earlier this year – due to substantial inventory overhang. Lowering our soybean oil price forecasts

As YTD prices are taken into account, we adjusted CY15F soybean supplies by +2%. For CY16F, we imputed higher planting in Brazil, although this is more than offset by lower US yields and lower output from Argentina. On lower supply prospects, CY16F soybean prices are adjusted +5%. Our revised soybean supply and demand is summarised below:

Soybean supply and demand forecast Source: USDA, Oil World, EIA short-term outlook (Jan15), Bloomberg Finance LP, DBS Bank estimates

Oil palm new planting had accelerated in CY13-14

Contrary to our previous expectations, recent data from Indonesian Agriculture Ministry suggests that planted area has expanded since CY12 – despite Moratorium on Forest Conversion since CY12 – as we understand licences issued prior to 2012 had remained valid. Consequently, we no longer see the Moratorium as having any impact on palm oil supplies until at least CY18F. Our revised estimates now point to higher than initially anticipated global palm oil production growths in CY15F. However CY16F/17F palm oil supply growths are reduced from previous forecasts – as we now impute flat FFB yield. Growth thereafter will accelerate vs. previous forecasts. Expect a slower palm oil price recovery

CY15F-17F CPO price forecasts (US$/MT, FOB Pasir Gudang) were cut by 13-16%; as we imputed lower soybean oil price

forecasts and higher output from Indonesia from CY17F onwards. Applying our new FX rate assumptions, our revised palm oil prices therefore translated to CY15F/16F/17F Ringgit prices of RM2,200/RM2,340/RM2,450. Our revised forecasts hence imply average CPO price of RM2,260/MT or US$522/MT for the remainder of the year. We expect some price recovery in 4Q15 on seasonally lower supplies. Yet, we believe prices should remain range-bound thereafter, as Indonesian supply growth is expected to accelerate towards 7% y-o-y from 6% this year on increased maturity – despite flat FFB yields from lower fertiliser application and scattered dry weather in Sumatra and Kalimantan. We maintain Malaysia’s palm oil output at 19.73m MT this year but cut CY16F and CY17F production by 3% and 5% respectively, as we cut FFB yields on dry weather in Sabah and Pahang this year.Our palm oil supply and demand forecasts are summarised below:

Price of soybeans (US$/MT)

(FOB)

Ending Stocks (k MT)

Global demand (k MT)

Global supply (k MT)

Stock/ usage

rat io (%)

Crude o il price

(US$/bbl)

Price of soybeans (US$/MT)

(FOB)

Ending Stocks (k MT)


Global supply (k MT)

Stock/ usage

rat io (%)

Crude oil price

(US$/bbl)

PSB K QD QS K CRUD PSB K QD QS K CRUD2015 334 87,240 295,210 318,560 29.6% 54.1 2015 326 88,800 291,000 312,160 30.5% 61.02016 322 89,220 313,800 315,780 28.4% 58.6 2016 308 98,149 308,756 318,104 31.8% 75.02017 318 94,800 327,954 333,534 28.9% 63.7 2017 327 101,431 324,714 327,996 31.2% 85.02018 321 91,793 339,792 336,785 27.0% 66.3 2018 342 99,500 339,527 337,596 29.3% 85.02019 335 92,683 351,935 352,826 26.3% 69.1 2019 356 96,620 353,308 350,427 27.3% 85.02020 350 91,114 364,242 362,672 25.0% 71.9 2020 372 90,701 366,053 360,135 24.8% 85.0

New forecasts - Soybeans Prev. forecasts - Soybeans



Palm oil supply and demand forecast Source: USDA, Oil World, DBS Bank estimates Caveat emptor: more pain, no gain

It is no surprise that El Nino has become the last hope to cut palm oil oversupply (i.e. through reduced supply or increased substitution). However, even with slower palm oil supply growth, the digestion process of soybean inventory overhang will take time. We caution against a painful period of low prices and flat yields next year. Soybean inventory to remain elevated through 2017 Source: USDA, Oil World, Bloomberg Finance LP, DBS Bank estimates The current headwinds (low palm oil/soybean prices, dry weather, USD debt exposures, rising risk premiums and – in Indonesia’s case, high export taxes) are setting apart efficient and financially strong planters from the rest. Even so, acquisitions of reasonably priced good quality estates still remain hard to come by.

A lesson from 1998 El Nino

The strong 1997/98 El Nino affected Malaysian and Indonesian FFB yields differently (i.e. more intense in Malaysia). However, both showed initial drops in FFB yields in 1998 and again in 2000. In Indonesia, FFB yield declined by 5% y-o-y in 1998, followed by 1% y-o-y recovery in 1999 and a severe 19% y-o-y drop in 2000. Indonesia also saw a 28% jump in maturity in 2000, which diluted yields. In Malaysia, FFB yield dropped by 16% y-o-y in 1998, followed by a strong 20% y-o-y recovery in 1999 and a 5% y-o-y drop in 2000. Malaysia was the top producer in 1998. So a steep 8% y-o-y drop in Malaysian production caused global palm oil output to drop by 2% y-o-y – even though Indonesian output still expanded by 9% y-o-y. Yet, even as the lagged impact of dry weather reduced FFB yield in 2000, prices did not react positively – but continued to drop (as soybean inventory continued to expand) and only bottomed in 2001. Between 2000 and 2003, global soybean inventories were rising as South American production expanded rapidly on the back of currency devaluations. Brazil boosted its soybean harvests by 18% CAGR between 1999 and 2002; while Argentina expanded its soybean output by 38% CAGR over the same period. Despite rising inventory, both CPO and soybean oil prices started to recover in 2003, as crude oil prices recovered strongly. While El Nino is an important factor in limiting palm oil supplies, pricing of substitutes and crude oil remain a significant influence. These factors and FX rate volatility remain the biggest risks factors in determining prices.

0.0%

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20.0%

25.0%

30.0%

35.0%

-

100

200

300

400

500

600

1979

1981

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1985

1987

1989

1991

1993

1995

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Stock/usage ratio (LHS)

Soybean price (RHS)

US$/MT (FOB)

CPO price

(US$/MT) FOB

Ending Stocks (k

MT)


Global supply (k

MT)

Stock/ usage

rat io (%)

Soybean o il price (US$/MT)

FOB

CPO price

(US$/MT) FOB

Ending Stocks (k

MT)


Global supply (k

MT)

Stock/ usage

rat io (%)

Soybean o il price (US$/MT)

FOB2015 546 11,673 60,248 61,462 19.4% 639 2015 626 10,688 60,901 61,130 17.6% 6792016 537 11,740 64,465 64,532 18.2% 655 2016 632 10,342 64,775 64,428 16.0% 6962017 561 11,778 67,358 67,396 17.5% 681 2017 666 10,596 67,167 67,422 15.8% 7342018 596 12,107 70,203 70,532 17.2% 717 2018 693 11,000 69,412 69,816 15.8% 7602019 627 12,587 72,959 73,440 17.3% 748 2019 724 11,541 71,500 72,041 16.1% 7922020 659 12,874 75,603 75,891 17.0% 780 2020 759 11,675 73,425 73,558 15.9% 828

New forecasts - Palm Oil Prev. forecasts - Palm Oil



Palm oil hectarage forecasts

Source: Oil World, MPOB, Ministry of Agriculture of Indonesia, DBS Bank estimates Palm oil supply forecasts

Source: Oil World, MPOB, Ministry of Agriculture of Indonesia, DBS Bank estimates Palm oil spot prices are dropping faster than futures

The precipitous drop in palm oil spot prices now implies divergence vs. futures. We believe this may be explained by the following reasons: 1. Palm oil production is now in peak season, while demand

is softening. Only some of this production has been sold forward, while the rest struggle to find spot buyers.

2. There were rumours of defaults by Chinese buyers – probably triggered by the CNY devaluation. If true, the

defaulted volumes must theoretically find a new buyer in the spot market at a discount.

3. We understand some short selling had occurred in the futures market over the past months. These positions are now being unwound (i.e. short covering).

While palm oil futures may resume its downward trend, we expect the slide to flatten or reverse in 4Q15 – on expectations of weaker yields due to dry weather.

Oi l palm planted area ('000 hectares )2010 2011 2012 2013 2014F 2015F 2016F 2017F 2018F 2019F 2020F

Mature 4,202.2 4,281.8 4,352.9 4,526.1 4,689.3 4,783.4 4,880.1 5,015.6 5,127.0 5,194.5 5,233.7 Immature 651.6 718.3 724.1 703.7 702.9 708.3 676.3 582.8 498.7 448.9 421.3 New planting+replanting 279.4 232.2 165.7 242.6 249.6 201.0 169.8 150.9 140.9 135.6 132.7Malaysia 4,853.8 5,000.1 5,076.9 5,229.7 5,392.2 5,491.7 5,556.4 5,598.4 5,625.7 5,643.5 5,655.0

Mature 5,562.3 6,550.8 6,989.7 7,197.4 7,401.6 7,988.8 8,840.8 9,732.2 10,307.8 10,627.7 10,765.6 Immature 2,823.1 2,442.0 2,583.1 3,267.6 3,554.7 3,520.4 3,027.8 2,370.0 1,946.3 1,725.0 1,651.3 New planting+replanting 639.2 698.4 688.7 1,244.8 942.8 649.1 464.8 430.9 372.3 335.7 374.1Indonesia 8,385.4 8,992.8 9,572.7 10,465.0 10,956.2 11,509.2 11,868.6 12,102.2 12,254.0 12,352.7 12,416.9

Mature 9,764.5 10,832.6 11,342.5 11,723.5 12,090.9 12,772.2 13,720.9 14,747.8 15,434.7 15,822.3 15,999.3 Immature 3,474.6 3,160.3 3,307.1 3,971.2 4,257.6 4,228.7 3,704.1 2,952.7 2,445.0 2,173.9 2,072.6 New planting+replanting 918.6 930.6 854.4 1,487.4 1,192.4 850.2 634.6 581.8 513.2 471.3 506.9Total 13,239.2 13,992.9 14,649.6 15,694.8 16,348.5 17,000.9 17,424.9 17,700.6 17,879.7 17,996.2 18,071.9 % growth 5.4 5.7 4.7 7.1 4.2 4.0 2.5 1.6 1.0 0.7 0.4

CPO product ion (m MT)2010 2011 2012 2013 2014F 2015F 2016F 2017F 2018F 2019F 2020F

Malaysia 16.994 18.912 18.785 19.216 19.667 19.538 19.832 19.941 20.193 20.485 20.896 vol. growth -0.6 1.9 -0.1 0.4 0.5 -0.1 0.3 0.1 0.3 0.3 0.4 % growth -3.3 11.3 -0.7 2.3 2.3 -0.7 1.5 0.5 1.3 1.4 2.0Indonesia 22.100 24.300 26.900 28.720 31.300 33.087 35.476 37.880 40.378 42.647 44.408 vol. growth 1.1 2.2 2.6 1.8 2.6 1.8 2.4 2.4 2.5 2.3 1.8 % growth 5.2 10.0 10.7 6.8 9.0 5.7 7.2 6.8 6.6 5.6 4.1Others 6.820 7.580 8.198 8.378 8.619 8.838 9.224 9.576 9.961 10.308 10.587 vol. growth 0.3 0.8 0.6 0.2 0.2 0.2 0.4 0.4 0.4 0.3 0.3 % growth 3.9 11.1 8.1 2.2 2.9 2.5 4.4 3.8 4.0 3.5 2.7Total 45.914 50.792 53.883 56.314 59.586 61.462 64.532 67.396 70.532 73.440 75.891 vol. growth 0.8 4.9 3.1 2.4 3.3 1.9 3.1 2.9 3.1 2.9 2.5 % growth 1.7 10.6 6.1 4.5 5.8 3.1 5.0 4.4 4.7 4.1 3.3



Appendix

2QCY15 results review and remarks/changes to forecasts

Company Results vs forecasts

1QCY15 results highlights Realised FFB yield

Realised CPO ASP

Realised CPO Cost

Remarks/changes in forecasts

Astra Agro Lestari Below Excluding FX translation losses of

Rp113bn, 2Q15 earnings were Rp402bn (-44% y-o-y; flat q-o-q). This brought 1H15 earnings (excluding FX translation losses) to Rp804bn (-40% y-o-y). In addition to lower CPO/PK ASP, AALI’s tax rate was higher than expected at 32% in 2Q15 (30% in 1H15).

c.5.8 MT/ha

Rp7,469 /kg

n.a. Imputing the faster cost escalation, higher tax rates (i.e. 28% vs. 25% previously) and lower CPO ASP relative to spot prices, FY15F and FY16F earnings were cut by 30% and 23% respectively.

Eagle High Plantations

Below EHP booked 2Q15 earnings of Rp5.1bn (-87% y-o-y; -29% q-o-q). This translated into 1H15 earnings of Rp12.2bn (-91% q-o-q) – representing only 3% of our initial full-year forecast. 2Q15 CPO sales volume expanded by only 6% q-o-q as 7k MT of inventory was drawn down from 1Q15 sales. Realised CPO and PK ASP of Rp7,222/kg and Rp4,853/kg were also 2-3% below benchmarks.

c.3.1 MT/ha

c.Rp7,222 /kg

n.a. We adjusted our forecasts to impute: (1) 8% lower FFB yields; (2) 10% lower CPO ASP; and (3) 11% higher CPO unit cost than previously assumed. We continue to expect Rp125bn in translation FX losses by year-end arising from its USD debts. All in, these resulted in 91%/58% cuts in EHP’s FY15F/16F earnings.

London Sumatra Indonesia

Below 2Q15 earnings of Rp156bn (-37% y-o-y; +2% q-o-q), taking 1H15 earnings to Rp309bn (-34% y-o-y), 39% of our initial full year target – principally due to higher costs. Partly reflecting 43% and 48% q-o-q jumps in CPO and PK sales volumes respectively, Lonsum’s unit cost expanded faster than anticipated. This was amplified by the steeper rise in operating expenditure.

c.4.1 MT/ha

Rp7,378 /kg

n.a. We adjusted our forecasts to impute: (1) higher labour costs, (2) 5% lower CPO ASP and (3) higher operating expenses. All in, these resulted in 21%/22% cuts in Lonsum’s FY15F/16F earnings.

Sampoerna Agro

Above 2Q15 net income of Rp81.9bn (-37% y-o-y; c.4x q-o-q) – ahead of our Rp49-65bn target range. The strong sequential recovery was driven by a strong pick-up in volumes as expected, but more importantly, lower unit cost – despite Lebaran allowance payment during the quarter.

c.4.3 MT/ha

Rp7,656 /kg

n.a. We are keeping our forecasts because they are conservative. 3Q15 output may see a boost, given last year’s seasonal pattern and slight pick-up in post-Lebaran productivity, but implementation of B15 export tax levy would undermine 3Q15 ASP.



2QCY15 results review and remarks/changes to forecasts (Cont’d)


Results highlights Realised FFB yield

Realised CPO ASP

Realised CPO Cost


Felda Global Ventures

Below Core net profit was RM16m in 2Q15, after stripping out RM30m of net LLA impact. 1H15 recorded a core net loss of RM28m, missing expectations. While FFB production recovered to 838.5k MT (+48% q-o-q, +10% y-o-y), the trading of palm oil and products saw thin gross margins of 0.5-1%.

c. 4.7 MT/ha

c.RM2,251 /MT

n.a. We factor in the acquisition of the Eagle High Plantation stake, sugar concession land and Golden Land plantations; the divestment of the Canadian soy crushing unit; and lower ASPs into our forecasts. Collectively, these are expected to dilute earnings, and hence we slashed FY15/16/17F earnings by 65%/40%/43%..

Genting Plantations

Below Excluding FX translation losses and gains (losses) on disposal, core 2Q15 earnings came in at RM41m (-52% y-o-y; -14% q-o-q). 1H15 reported earnings were RM92.7, (-46% y-o-y) – below expectations on annualised basis. Earnings were adversely impacted by weather-struck FFB output, lower ASPs and weak property sales.

c.4.5 MT/ha

RM2,171 /MT

n.a. Having cut CPO/PK ASP, reduced FFB output, lowered Property contribution, and adjusted interest expense/income on the group’s US$313m borrowings and newly issued RM1bn Sukuk, we cut FY15F/16F earnings by 34% each.

IJM Plantations In line Excluding RM10.6m of forex

losses, IJMP’s core earnings were in line at RM33.4m or 25% of our forecasts. CPO production recovered to 61.8k MT (+49% q-o-q, flat y-o-y) together with processed FFB volumes to 308k MT (+41% q-o-q, +2% y-o-y).

c. 5.6 MT/ha

c. RM2,167 /MT

n.a. We keep our earnings forecasts, and continue to expect robust internal FFB growth of 12%, led by IJMP’s Indonesian plantations with an additional c.6k ha maturing in FY16.

IOI Corporation Below IOI booked 4Q15 earnings of RM159.7m (-61% y-o-y) excluding FX translation losses, 4QFY15 underlying pretax of RM280m was also behind our RM401m estimate, due to higher-than-expected Plantations costs, lower Manufacturing margins, and lower contribution from other operations.

c.6.0 MT/ha

RM2,247 /MT

n.a. We lowered Manufacturing contribution on reduced refining margins, and adjusted Plantation costs higher. Together with lower contributions from other operations, these adjustments resulted in 37%/31% cuts in FY16F/17F earnings. We expect smaller FX losses in FY16F – although we have yet to impute the weaker Ringgit at current levels.

KL Kepong Above Excluding derivatives fair value losses and interest income from the disposal of a subsidiary, core earnings were RM256m (+10% y-o-y; +22% q-o-q). Despite a 4% q-o-q drop (-15% y-o-y) in CPO ASP, Plantations segment managed to book sequential 18% jump (-18% y-o-y) in operating profit on 16% q-o-q rise in output, lower production cost and higher volumes of CPO and PK sold.

n.a. RM2,126 /MT

n.a. We left our numbers unchanged as we expect sequentially weaker 4QFY15 earnings contribution as CPO ASP has fallen again this quarter (steeper in Indonesia because of B15 export levy since Jul-16).






Realised CPO ASP

Realised CPO Cost


Sime Darby

In line Excluding one-off gains from disposals and adjustments, we estimate that underlying earnings in 4Q were RM842m (-12% y-o-y; +339% q-o-q), translating into underlying FY15 earnings of RM1,886m (-50% y-o-y) – in line with our expectations.

c.6.1 MT/ha

RM2,192 /MT

n.a. We cut FY16F/17F earnings cut by 3%/4% for thinner margins on Industrial, Property and Motor segments – in view of the challenging near-term outlook. While the group does not rule out raising more capital to strengthen its balance sheet, we understand it would continue to dispose its non-core assets over the next 6-9 months.

TSH Resources

Below 2Q15 core earnings was RM17.7m after reversing RM10.6m of unrealised forex losses, taking 1H15 earnings to RM47.8m, missing expectations at 35% of full-year estimates. CPO production recovered 19% q-o-q but was 18% lower y-o-y, due to lower external FFB volume. However, the company has pared down its USD debt to <0.1% of overall (from 38% before), given the weakening Ringgit.

c.5.7 MT/ha

c.RM2,107 /MT

n.a. We lower forecast yields from TSH’s own hectarage and external FFB, and trim gross margins. Consequently, FY15/16/17F earnings are reduced by 14.6%/8.9%/9.2%.

Bumitama Agri Below 2Q15 net profit of Rp217.7bn (-26% y-o-y; +20% q-o-q) was below expectations on annualised basis. This brought 1H15 earnings to Rp398.7bn – representing 33% of initial expectations. The weaker-than-expected 2Q15 earnings was attributable to 14% y-o-y lower CPO ASP (-4% q-o-q), losses from associates, and margin dilution due to 88% y-o-y jump in external FFB processed to compensate for deceleration in own production.

c.4.0 MT/ha

Rp7,634 /kg

n.a. We adjust FY15F/16F earnings by -14%/-12% after imputing lower ASP relative to spot. We understand amendments to IAS 41 (biological assets accounting) from 1-Jan-16 would clip the group’s equity through one-off adjustments, but the resultant net gearing ratio should remain below debt covenant of the group’s Sukuk.

First Resources Below Reported 2Q15 earnings came in at US$28.6m (+10% y-o-y; +3% q-o-q) – taking 1H15 earnings to US$56.3m (-21% y-o-y) – representing 35% of our FY15 target (vs. 45% average historical).Underperformance was mainly due to lower-than-expected Refining & Processing EBITDA, which dropped 46% q-o-q (-95% y-o-y).

c.4.6 MT/ha

US$593 /MT

n.a. We tweaked FY15F/16F earnings by -8%/-3% to account for lower projected biodiesel output (previously assumed to commence 1-Jul-15), lower domestic ASP, and slightly higher tax rate while leaving our FFB and CPO production volumes unchanged.

Golden Agri Resources

Below 2Q15 earnings of US$39m (+42% y-o-y; +125% q-o-q) were below expectations.This brought 1H15 earnings to US$56m, representing only 24% of our initial FY15 expectations. Performance was dragged by a 23% y-o-y drop in CPO ASP (-5% q-o-q), 5% y-o-y drop in 1H15 FFB output (vs. our initial forecast of +7% growth), and flat EBITDA contribution from Oilseeds & Others.

c.5.6 MT/ha

US$650 /MT

n.a. Imputing the lower-than-expected output, palm oil export levy in 2H15, and lower contribution from Oilseeds & Others, we slashed FY15F and 16F earnings by 44% and 3% respectively.






Realised CPO ASP

Realised CPO Cost


Indofood Agri Below 2Q15 earnings plunged 99% q-o-

q to just Rp2bn (-94% q-o-q). Earnings were dragged by a 12% y-o-y drop in CPO ASP, Rp44bn in FX losses, and 12% y-o-y higher minimum wages and losses from its joint venture in CMAA (on weaker-than-expected sugar prices). This brought 1H15 earnings to Rp37bn (-91% y-o-y) – representing only c.5% of our initial full-year target.

c.4.6 MT/ha

Rp7,415 /kg

n.a. We cut FY15F CPO ASP by 5% (resulting in lower downstream product prices), but raised PK ASP by 4% from previous forecasts. FY15F sugar prices are likewise cut 19% to US$300/MT (based on World Bank outlook). Imputing this, we now expect CMAA to record losses this year and next (from profits previously). Upkeep and harvesting costs are raised by 3% (on higher labour cost assumption), while tax rate is nudged up to reflect charges YTD. All in, FY15F and FY16F earnings were cut by 51% and 35% respectively.

Wilmar International

Below Core 2Q15 earnings of US$194m (+19% y-o-y; -26% q-o-q) were below our expectations on an annualised basis. Tropical Oils pretax earnings were ahead, while Sugar and Other pretax were in line. However, Oilseeds & Grains were below expectations, as we suspect China soybean crush margins had sequentially eased on lower soybean meal prices, in addition to seasonally lower volumes for both Manufacturing and Consumer subsegments.

c.5.5 MT/ha

n/a n/a We trim FY15F/16F earnings by 2%/2%. Imputing sugar price movements to date, we lowered FY15/16 sugar price forecasts to US$300/MT and US$310/MT (based on World Bank's commodity price outlook) from US$370/MT each. This is offset by higher expected sugar M&P volumes this year.

Sources: Companies, DBS Bank estimates



STOCK PROFILES


Astra Agro Lestari

Astra Agro Lestari (FULLY VALUED; Rp17,825; AALI IJ; Price Target : Rp14,900 (Prev: Rp17,900))

Forecasts and Valuation General Data FY Dec (Rp bn) 2014A 2015F 2016F 2017F Revenue 16,306 14,847 17,137 17,605 Issued Capital (m shrs) 1,575 EBITDA 4,539 2,163 3,370 3,684 Mkt. Cap (Rpbn/US$m) 28,070 / 1,949 Pre-tax Profit 3,690 1,091 2,222 2,458 Major Shareholders Net Profit 2,504 751 1,529 1,692 PT Astra International Tbk (%) 79.7 Net Pft (Pre Ex.) 2,504 751 1,529 1,692 EPS (Rp) 1,590 477 971 1,074 Free Float (%) 20.3 EPS Pre Ex. (Rp) 1,590 477 971 1,074 Avg. Daily Vol.(‘000) 1,041 EPS Gth (%) 39 (70) 104 11 EPS Gth Pre Ex (%) 39 (70) 104 11 Diluted EPS (Rp) 1,590 477 971 1,074 Price Relative Net DPS (Rp) 599 716 215 437 BV Per Share (Rp) 7,252 7,012 7,769 8,406 PE (X) 11.2 37.4 18.4 16.6 PE Pre Ex. (X) 11.2 37.4 18.4 16.6 P/Cash Flow (X) 10.2 13.1 10.1 9.3 EV/EBITDA (X) 7.1 15.5 9.8 8.7 Net Div Yield (%) 3.4 4.0 1.2 2.5 P/Book Value (X) 2.5 2.5 2.3 2.1 Net Debt/Equity (X) 0.3 0.4 0.4 0.3 ROAE (%) 23.5 6.7 13.1 13.3 Earnings Rev (%): (74.4) (58.8) (58.3) Consensus EPS (Rp): 1,054 1,366 1,469 Income Statement (Rp bn) Balance Sheet (Rp bn) FY Dec 2014A 2015F 2016F 2017F FY Dec 2014A 2015F 2016F 2017F

Turnover 16,306 14,847 17,137 17,605 Net Fixed Assets 8,335 9,206 9,722 9,719 Cost of Goods Sold (11,354) (11,591) (13,292) (13,613) Invts in Associates & JVs 0 0 0 0 Gross Profit 4,952 3,256 3,845 3,991 Other LT Assets 7,820 8,079 8,384 8,525 Other Opng (Exp)/Inc (1,229) (1,428) (1,651) (1,714) Cash & ST Invts 611 1,091 1,687 1,212 Operating Profit 3,722 1,828 2,194 2,277 Inventory 1,278 1,062 1,218 1,248 Other Non Opg (Exp)/Inc 41 (653) 105 236 Debtors 33 17 20 20 Associates & JV Inc 0 0 0 0 Other Current Assets 481 299 345 355 Net Interest (Exp)/Inc (73) (84) (78) (56) Total Assets 18,558 19,754 21,375 21,079 Exceptional Gain/(Loss) 0 0 0 0 Pre-tax Profit 3,690 1,091 2,222 2,458 ST Debt 2,299 1,528 1,546 1,527 Tax (1,069) (305) (622) (688) Other Current Liab 1,812 1,615 1,857 1,904 Minority Interest (118) (35) (71) (78) LT Debt 2,128 4,587 4,641 3,183 Preference Dividend 0 0 0 0 Other LT Liabilities 482 529 574 625 Net Profit 2,504 751 1,529 1,692 Shareholder’s Equity 11,419 11,043 12,234 13,237 Net Profit before Except. 2,504 751 1,529 1,692 Minority Interests 418 453 524 602 Net Pft (ex. BA gains) 2,504 751 1,529 1,692 Total Cap. & Liab. 18,558 19,754 21,375 21,079 EBITDA 4,539 2,163 3,370 3,684 Sales Gth (%) 28.6 (8.9) 15.4 2.7 Non-Cash Wkg. Capital (19) (237) (274) (282) EBITDA Gth (%) 39.3 (52.4) 55.8 9.3 Net Cash/(Debt) (3,816) (5,024) (4,500) (3,498) Opg Profit Gth (%) 23.9 (50.9) 20.0 3.8 Net Profit Gth (%) 39.0 (70.0) 103.7 10.6 Effective Tax Rate (%) 29.0 28.0 28.0 28.0 Cash Flow Statement (Rp bn) Segmental Breakdown FY Dec 2014A 2015F 2016F 2017F FY Dec 2014A 2015F 2016F 2017F

Pre-Tax Profit 3,690 1,091 2,222 2,458 Revenues (Rpbn) Dep. & Amort. 776 988 1,070 1,171 CPO 11,384 9,041 10,830 11,210 Tax Paid 0 0 0 0 PK 1,866 1,607 1,827 1,869 Assoc. & JV Inc/(loss) 0 0 0 0 PKO 0 44 48 46 Chg in Wkg.Cap. (645) 375 119 73 Refined products 2,980 4,156 4,432 4,480 Other Operating CF (1,076) (305) (622) (688) Others 76 0 0 0 Net Operating CF 2,746 2,148 2,789 3,014 Total 16,306 14,847 17,137 17,605 Capital Exp.(net) (3,739) (2,174) (1,905) (1,315) Other Invts.(net) 0 0 0 0 Invts in Assoc. & JV 0 0 0 0 Div from Assoc & JV 0 0 0 0 Other Investing CF 91 (51) (53) (56) Net Investing CF (3,648) (2,226) (1,958) (1,371) Div Paid (943) (1,128) (338) (688) Chg in Gross Debt 1,719 1,633 72 (1,476) Capital Issues 0 0 0 0 Other Financing CF 28 52 31 48 Net Financing CF 804 558 (235) (2,117) Source: Company, DBS Bank; Bloomberg Finance L.P.

51

71

91

111

131

151

171

191

211

11,970.0

16,970.0

21,970.0

26,970.0

31,970.0

Sep-11 Sep-12 Sep-13 Sep-14 Sep-15

Relative IndexRp

Astra Agro Lestari (LHS) Relative JCI INDEX (RHS)


Bumitama Agri

Page25

Bumitama Agri (BUY; S$0.755; BAL SP; Price Target : S$0.88; (Prev: S$1.17))

Forecasts and Valuation General Data FY Dec (Rp bn) 2014A 2015F 2016F 2017F Revenue 5,757 5,472 5,878 6,416 Issued Capital (m shrs) 1,757 EBITDA 1,987 1,238 2,008 2,350 Mkt. Cap (S$m/US$m) 1.24 / 893 Pre-tax Profit 1,805 925 1,464 1,735 Major Shareholders Net Profit 1,153 613 958 1,130 Fortune Holdings Ltd (%) 51.0 Net Pft (Pre Ex.) 1,153 613 958 1,130 IOI Corp Bhd (%) 31.4 EPS (S cts) 6 3 5 6 Free Float (%) 17.6 EPS Pre Ex. (S cts) 6 3 5 6 Avg. Daily Vol.(‘000) 537 EPS Gth (%) 35 (47) 56 18 EPS Gth Pre Ex (%) 35 (47) 56 18 Diluted EPS (S cts) 6 3 5 6 Price Relative Net DPS (S cts) 1 1 1 1 BV Per Share (S cts) 36 38 33 38 PE (X) 11.7 22.1 14.1 12.0 PE Pre Ex. (X) 11.7 22.1 14.1 12.0 P/Cash Flow (X) 6.6 14.1 8.1 7.1 EV/EBITDA (X) 9.1 15.1 9.1 7.6 Net Div Yield (%) 1.6 1.6 0.8 1.3 P/Book Value (X) 2.1 2.0 2.3 2.0 Net Debt/Equity (X) 0.6 0.6 0.6 0.4 ROAE (%) 19.0 9.2 14.9 17.6 Earnings Rev (%): (58.2) (44.8) (40.3) Consensus EPS (S cts): 7 8 10 Income Statement (Rp bn) Balance Sheet (Rp bn) FY Dec 2014A 2015F 2016F 2017F FY Dec 2014A 2015F 2016F 2017F

Turnover 5,757 5,472 5,878 6,416 Net Fixed Assets 2,866 3,438 3,961 4,394 Cost of Goods Sold (3,416) (3,414) (3,830) (4,144) Invts in Associates & JVs 84 84 84 84 Gross Profit 2,342 2,058 2,048 2,272 Other LT Assets 9,509 9,796 7,431 7,479 Other Opng (Exp)/Inc (357) (408) (445) (475) Cash & ST Invts 311 501 1,064 1,006 Operating Profit 1,984 1,650 1,603 1,797 Inventory 527 452 508 549 Other Non Opg (Exp)/Inc (164) (647) (48) 20 Debtors 140 115 123 135 Associates & JV Inc (17) 9 9 9 Other Current Assets 367 367 367 367 Net Interest (Exp)/Inc 1 (87) (100) (92) Total Assets 13,803 14,753 13,538 14,014 Exceptional Gain/(Loss) 0 0 0 0 Pre-tax Profit 1,805 925 1,464 1,735 ST Debt 589 12 12 12 Tax (433) (207) (342) (411) Other Current Liab 1,334 1,024 1,133 1,229 Minority Interest (219) (105) (164) (193) LT Debt 3,691 4,968 5,014 4,219 Preference Dividend 0 0 0 0 Other LT Liabilities 1,081 1,135 541 568 Net Profit 1,153 613 958 1,130 Shareholder’s Equity 6,483 6,885 5,945 6,899 Net Profit before Except. 1,153 613 958 1,130 Minority Interests 625 730 894 1,087 Net Pft (ex. BA gains) 1,182 613 958 1,130 Total Cap. & Liab. 13,803 14,753 13,538 14,014 EBITDA 1,987 1,238 2,008 2,350 Sales Gth (%) 41.7 (5.0) 7.4 9.1 Non-Cash Wkg. Capital (300) (90) (135) (178) EBITDA Gth (%) 37.2 (37.7) 62.2 17.0 Net Cash/(Debt) (3,969) (4,479) (3,961) (3,225) Opg Profit Gth (%) 47.7 (16.8) (2.8) 12.1 Net Profit Gth (%) 34.8 (46.8) 56.3 18.0 Effective Tax Rate (%) 24.0 22.4 23.4 23.7 Cash Flow Statement (Rp bn) Segmental Breakdown FY Dec 2014A 2015F 2016F 2017F FY Dec 2014A 2015F 2016F 2017F

Pre-Tax Profit 1,805 925 1,464 1,735 Revenues (Rpbn) Dep. & Amort. 186 226 444 523 CPO 5,199 4,919 5,284 5,767 Tax Paid (433) (207) (342) (411) PK 559 553 594 649 Assoc. & JV Inc/(loss) 0 0 0 0 Total 5,757 5,472 5,878 6,416 Chg in Wkg.Cap. 49 (36) 45 43 Other Operating CF 453 53 56 26 Net Operating CF 2,060 961 1,667 1,916 Capital Exp.(net) (1,778) (1,364) (1,085) (1,149) Other Invts.(net) (53) 0 0 0 Invts in Assoc. & JV 0 0 0 0 Div from Assoc & JV 0 0 0 0 Other Investing CF (344) 278 48 144 Net Investing CF (2,175) (1,086) (1,037) (1,005) Div Paid (211) (211) (112) (176) Chg in Gross Debt 136 700 45 (795) Capital Issues (55) 0 0 0 Other Financing CF 98 (174) 1 1 Net Financing CF (32) 314 (66) (970) Source: Company, DBS Bank, Bloomberg Finance L.P.

85

105

125

145

165

185

205

0.6

0.7

0.8

0.9

1.0

1.1

1.2

1.3

1.4

Apr-12 Apr-13 Apr-14 Apr-15

Relative IndexS$

Bumitama Agri (LHS) Relative STI INDEX (RHS)


Eagle High Plantations

Eagle High Plantations (HOLD , upgrade from FULLY VALUED; Rp266; BWPT IJ; Price Target : Rp260 (Prev: Rp320)) Forecasts and Valuation General Data FY Dec (Rp bn) 2014A 2015F 2016F 2017F Revenue 2,264 3,103 3,637 4,277 Issued Capital (m shrs) 31,525 EBITDA 595 752 1,103 1,385 Mkt. Cap (Rpbn/US$m) 9,079 / 637 Pre-tax Profit 274 (142) (54) 36 Major Shareholders Net Profit 189 (104) (39) 26 Rajawali Corp PT (%) 65.5 Net Pft (Pre Ex.) 189 (104) (39) 26 PTBW Investindo (%) 5.0 EPS (Rp) 6 (3) (1) 1 Free Float (%) 29.5 EPS Pre Ex. (Rp) 6 (3) (1) 1 Avg. Daily Vol.(‘000) 88,015 EPS Gth (%) N/A N/A 62 N/A EPS Gth Pre Ex (%) N/A N/A 62 N/A Diluted EPS (Rp) 6 (3) (1) 1 Price Relative Net DPS (Rp) 0 0 0 0 BV Per Share (Rp) 217 213 212 213 PE (X) 44.3 nm nm 318.3 PE Pre Ex. (X) 44.3 nm nm 318.3 P/Cash Flow (X) 22.7 16.7 17.3 12.8 EV/EBITDA (X) 26.3 21.0 14.3 11.2 Net Div Yield (%) 0.0 0.0 0.0 0.0 P/Book Value (X) 1.2 1.2 1.3 1.2 Net Debt/Equity (X) 1.0 1.1 1.1 1.0 ROAE (%) 4.3 (1.5) (0.6) 0.4 Earnings Rev (%): (113.3) (103.1) (98.3) Consensus EPS (Rp): 4 9 16 Income Statement (Rp bn) Balance Sheet (Rp bn) FY Dec 2014A 2015F 2016F 2017F FY Dec 2014A 2015F 2016F 2017F

Turnover 2,264 3,103 3,637 4,277 Net Fixed Assets 3,636 3,818 3,990 4,135 Cost of Goods Sold (1,635) (2,185) (2,594) (3,034) Invts in Associates & JVs 0 0 0 0 Gross Profit 629 917 1,043 1,242 Other LT Assets 11,129 11,178 10,939 10,590 Other Opng (Exp)/Inc (275) (408) (456) (503) Cash & ST Invts 179 225 482 720 Operating Profit 354 509 587 740 Inventory 304 287 341 399 Other Non Opg (Exp)/Inc 44 (189) 0 36 Debtors 47 47 56 65 Associates & JV Inc 0 0 0 0 Other Current Assets 1,086 1,238 1,466 1,715 Net Interest (Exp)/Inc (124) (462) (641) (740) Total Assets 16,380 16,794 17,273 17,626 Exceptional Gain/(Loss) 0 0 0 0 Pre-tax Profit 274 (142) (54) 36 ST Debt 1,769 681 877 934 Tax (80) 35 13 (9) Other Current Liab 1,336 1,641 1,931 2,257 Minority Interest (5) 3 1 (1) LT Debt 5,533 6,826 6,850 6,781 Preference Dividend 0 0 0 0 Other LT Liabilities 795 805 816 826 Net Profit 189 (104) (39) 26 Shareholder’s Equity 6,828 6,724 6,685 6,711 Net Profit before Except. 189 (104) (39) 26 Minority Interests 119 116 115 116 Net Pft (ex. BA gains) 189 (104) (39) 26 Total Cap. & Liab. 16,380 16,794 17,273 17,626 EBITDA 595 752 1,103 1,385 Sales Gth (%) 30.8 37.0 17.2 17.6 Non-Cash Wkg. Capital 100 (69) (68) (77) EBITDA Gth (%) 129.6 26.4 46.7 25.6 Net Cash/(Debt) (7,123) (7,282) (7,244) (6,995) Opg Profit Gth (%) 126.7 43.6 15.4 26.0 Net Profit Gth (%) N/A N/A 62.1 N/A Effective Tax Rate (%) 29.1 N/A N/A 25.0 Cash Flow Statement (Rp bn) Segmental Breakdown FY Dec 2014A 2015F 2016F 2017F FY Dec 2014A 2015F 2016F 2017F

Pre-Tax Profit 274 (142) (54) 36 Revenues (Rpbn) Dep. & Amort. 196 432 516 609 FFB 164 0 0 0 Tax Paid 0 0 0 0 CPO 1,578 2,810 3,301 3,885 Assoc. & JV Inc/(loss) 0 0 0 0 PK 155 292 336 391 Chg in Wkg.Cap. (294) 169 0 9 Others 368 0 0 0 Other Operating CF 192 43 24 1 Total 2,264 3,103 3,637 4,277 Net Operating CF 369 501 485 655 Capital Exp.(net) (2,011) (663) (441) (399) Other Invts.(net) 0 0 0 0 Invts in Assoc. & JV 0 0 0 0 Div from Assoc & JV 0 0 0 0 Other Investing CF (1,609) 0 (10) (10) Net Investing CF (3,620) (663) (451) (409) Div Paid 0 0 0 0 Chg in Gross Debt 1,249 206 219 (11) Capital Issues 2,322 0 0 0 Other Financing CF (470) 3 3 3 Net Financing CF 3,101 209 222 (8) Source: Company, DBS Bank, Bloomberg Finance L.P.

14

64

114

164

214

198.0

398.0

598.0

798.0

998.0

1,198.0

1,398.0

1,598.0

1,798.0


Relative IndexRp

Eagle High Plantations (LHS) Relative JCI INDEX (RHS)


Felda Global Ventures

Felda Global Ventures (FULLY VALUED, downgrade from HOLD; RM1.61; FGV MK; Price Target : RM1.05 (Prev: RM1.20))

Forecasts and Valuation General Data FY Dec (RM m) 2014A 2015F 2016F 2017F Turnover 16,369 15,556 15,578 16,052 Issued Capital (m shrs) 3,648 EBITDA 1,268 1,013 1,162 1,227 Mkt. Cap (RMm/US$m) 5,874 / 1,377 Pre-tax Profit 829 432 500 528 Major Shareholders Net Profit 325 102 200 217 Federal Land Development (%) 33.7 Net Pft (Pre Ex.) 176 102 200 217 Lembaga Tabung Haji (%) 7.8 EPS (sen) 8.9 2.7 5.3 5.8 Koperasi Permodalan Felda (%) 5.8 EPS Pre Ex. (sen) 4.8 2.7 5.3 5.8 Free Float (%) 42.7 EPS Gth Pre Ex (%) (74) (44) 96 8 Avg. Daily Vol.(‘000) 4,857 Diluted EPS (sen) 8.9 2.7 5.3 5.8 Net DPS (sen) 10.1 2.0 2.8 3.3 Price Relative BV Per Share (sen) 174.8 173.0 175.6 178.5 PE (X) 18.0 59.1 30.1 27.8 PE Pre Ex. (X) 33.3 59.1 30.1 27.8 P/Cash Flow (X) 3.7 9.3 7.8 8.1 EV/EBITDA (X) 7.2 12.3 11.4 11.3 Net Div Yield (%) 6.3 1.3 1.7 2.1 P/Book Value (X) 0.9 0.9 0.9 0.9 Net Debt/Equity (X) 0.1 0.6 0.7 0.7 ROAE (%) 5.0 1.6 3.1 3.3 Earnings Rev (%): (65.5) (44.8) (49.2) Consensus EPS (sen): 4.3 7.2 9.7 Income Statement (RM m) Balance Sheet (RM m) FY Dec 2014A 2015F 2016F 2017F FY Dec 2014A 2015F 2016F 2017F

Turnover 16,369 15,556 15,578 16,052 Net Fixed Assets 6,349 5,920 6,491 6,697 Cost of Goods Sold (14,249) (13,728) (13,590) (14,003) Invts in Associates & JVs 961 3,638 3,672 3,715 Gross Profit 2,120 1,829 1,988 2,049 Other LT Assets 6,170 6,733 6,733 6,733 Other Opng (Exp)/Inc (1,413) (1,301) (1,346) (1,392) Cash & ST Invts 3,673 2,738 2,054 1,667 Operating Profit 707 528 642 657 Inventory 1,764 1,688 1,671 1,722 Other Non Opg (Exp)/Inc 0 0 0 0 Debtors 1,089 1,160 1,161 1,197 Associates & JV Inc 31 32 54 84 Other Current Assets 718 723 726 743 Net Interest (Exp)/Inc (57) (128) (195) (213) Total Assets 20,723 22,600 22,508 22,474 Exceptional Gain/(Loss) 149 0 0 0 Pre-tax Profit 829 432 500 528 ST Debt 2,066 2,066 2,066 2,066 Tax (291) (122) (137) (148) Other Current Liab 2,305 2,219 2,211 2,258 Minority Interest (213) (208) (163) (163) LT Debt 2,415 4,415 4,415 4,415 Preference Dividend 0 0 0 0 Other LT Liabilities 5,114 4,771 4,423 4,071 Net Profit 325 102 200 217 Shareholder’s Equity 6,376 6,475 6,575 6,683 Net Profit before Except. 176 102 200 217 Minority Interests 2,448 2,655 2,818 2,981 EBITDA 1,268 1,013 1,162 1,227 Total Cap. & Liab. 20,723 22,600 22,508 22,474 Sales Gth (%) 30.2 (5.0) 0.1 3.0 Non-Cash Wkg. Capital 1,265 1,352 1,348 1,404 EBITDA Gth (%) 64.4 (20.1) 14.8 5.6 Net Cash/(Debt) (807) (3,742) (4,426) (4,813) Opg Profit Gth (%) (38.4) (25.3) 21.5 2.5 Net Profit Gth (%) (66.9) (68.7) 96.3 8.4 Effective Tax Rate (%) 35.0 28.3 27.4 28.1 Cash Flow Statement (RM m) Segmental Breakdown FY Dec 2014A 2015F 2016F 2017F FY Dec 2014A 2015F 2016F 2017F

Pre-Tax Profit 859 432 500 528 Revenues (RM m) Dep. & Amort. 391 428 463 510 Plantations 5,864 4,976 5,936 6,184 Tax Paid (277) (90) (104) (116) Sugar 2,281 2,323 2,366 2,390 Assoc. & JV Inc/(loss) (31) (32) (54) (84) Downstream 6,445 6,055 5,006 5,155 Chg in Wkg.Cap. 382 (58) 1 (58) Others 1,778 2,203 2,269 2,323 Other Operating CF 243 (33) (33) (33) Total 16,369 15,556 15,578 16,052 Net Operating CF 1,566 648 774 748 Capital Exp.(net) (819) 0 (1,033) (716) Other Invts.(net) 0 0 0 0 Invts in Assoc. & JV (11) (2,652) 0 0 Div from Assoc & JV 0 0 0 0 Other Investing CF (716) (556) 18 38 Net Investing CF (1,547) (3,209) (1,015) (679) Div Paid (753) (175) (100) (109) Chg in Gross Debt 850 0 0 0 Capital Issues 19 172 0 0 Other Financing CF (1,491) 1,628 (343) (348) Net Financing CF (1,375) 1,625 (443) (456) Net Cashflow (1,356) (935) (684) (387)

Source: Company, AllianceDBS, Bloomberg Finance L.P.

24

44

64

84

104

124

144

164

184

204

1.1

1.6

2.1

2.6

3.1

3.6

4.1

4.6

5.1

5.6

6.1

Jun-12 Jun-13 Jun-14 Jun-15

Relative IndexRM

Felda Global Ventures (LHS) Relative KLCI INDEX (RHS)


First Resources

First Resources (HOLD S$1.625; FR SP; Price Target : S$1.69 (Prev: S$1.17))

Forecasts and Valuation General Data FY Dec (US$ ‘000) 2014A 2015F 2016F 2017F Turnover 615,524 478,624 536,118 600,801 Issued Capital (m shrs) 1,584 EBITDA 301,992 219,955 245,323 279,331 Mkt. Cap (S$m/US$m) 2,565 / 1,830 Pre-tax Profit 251,945 165,856 171,678 204,937 Major Shareholders Net Profit 173,409 116,131 125,148 149,392 Eight Capital Inc (%) 63.2 Net Pft (Pre Ex.) 173,409 116,131 125,148 149,392 King Fortune International Inc (%) 5.6 EPS (S cts) 15.3 10.3 11.1 13.2 Free Float (%) 31.3 EPS Pre Ex. (S cts) 15.3 10.3 11.1 13.2 Avg. Daily Vol.(‘000) 1,891 EPS Gth Pre Ex (%) (27) (33) 8 19 Diluted EPS (S cts) 15.3 10.3 11.1 13.2 Net DPS (S cts) 5.1 3.3 2.8 3.1 Price Relative BV Per Share (S cts) 94.1 101.0 81.4 91.6 PE (X) 10.6 15.8 14.6 12.3 PE Pre Ex. (X) 10.6 15.8 14.6 12.3 P/Cash Flow (X) 8.1 10.3 9.6 8.4 EV/EBITDA (X) 7.0 9.1 7.9 6.6 Net Div Yield (%) 3.1 2.1 1.7 1.9 P/Book Value (X) 1.7 1.6 2.0 1.8 Net Debt/Equity (X) 0.2 0.1 0.0 CASH ROAE (%) 16.9 10.5 12.1 15.3 Earnings Rev (%): (28.2) (33.6) (32.4) Consensus EPS (S cts): 12.9 15.6 18.6 Income Statement (US$ ‘000) Balance Sheet (US$ ‘000) FY Dec 2014A 2015F 2016F 2017F FY Dec 2014A 2015F 2016F 2017F

Turnover 615,524 478,624 536,118 600,801 Net Fixed Assets 338,415 374,176 414,891 449,549 Cost of Goods Sold (292,125 (255,150 (290,277) (321,804 Invts in Associates & JVs 0 0 0 0 Gross Profit 323,399 223,474 245,842 278,996 Other LT Assets 1,184,53 1,118,34 703,598 688,503 Other Opng (Exp)/Inc (52,406) (39,840) (59,962) (64,808) Cash & ST Invts 350,916 502,968 574,138 348,928 Operating Profit 270,993 183,634 185,880 214,189 Inventory 48,563 47,066 53,546 59,362 Other Non Opg (Exp)/Inc (1,251) 0 0 0 Debtors 39,081 31,493 35,276 39,532 Associates & JV Inc 0 0 0 0 Other Current Assets 36,349 32,016 36,424 40,380 Net Interest (Exp)/Inc (17,797) (17,778) (14,202) (9,252) Total Assets 1,997,85 2,106,06 1,817,87 1,626,25Exceptional Gain/(Loss) 0 0 0 0 Pre-tax Profit 251,945 165,856 171,678 204,937 ST Debt 10,946 0 323,839 0 Tax (71,154) (44,781) (41,203) (49,185) Other Current Liab 77,345 66,161 75,040 83,366 Minority Interest (7,382) (4,944) (5,328) (6,360) LT Debt 572,173 612,729 288,890 288,890 Preference Dividend 0 0 0 0 Other LT Liabilities 221,641 228,163 146,879 149,663 Net Profit 173,409 116,131 125,148 149,392 Shareholder’s Equity 1,063,18 1,141,50 920,393 1,035,14Net Profit before Except. 173,409 116,131 125,148 149,392 Minority Interests 52,561 57,505 62,832 69,192 EBITDA 301,992 219,955 245,323 279,331 Total Cap. & Liab. 1,997,85 2,106,06 1,817,87 1,626,25 Sales Gth (%) (1.8) (22.2) 12.0 12.1 Non-Cash Wkg. Capital 46,648 44,415 50,206 55,907 EBITDA Gth (%) (16.5) (27.2) 11.5 13.9 Net Cash/(Debt) (232,203 (109,761 (38,591) 60,038 Opg Profit Gth (%) (20.5) (32.2) 1.2 15.2 Net Profit Gth (%) (27.2) (33.0) 7.8 19.4 Effective Tax Rate (%) 28.2 27.0 24.0 24.0 Cash Flow Statement (US$ ‘000) Segmental Breakdown FY Dec 2014A 2015F 2016F 2017F FY Dec 2014A 2015F 2016F 2017F

Pre-Tax Profit 251,945 165,856 171,678 204,937 Revenues (US$ ‘000) Dep. & Amort. 32,250 36,321 59,443 65,143 CPO 431,857 358,007 377,909 434,241 Tax Paid (71,154) (44,781) (41,203) (49,185) Palm kernel 60,904 44,288 48,221 55,214 Assoc. & JV Inc/(loss) 0 0 0 0 Olein, RBDPO, biodesel 264,813 178,777 228,449 238,365 Chg in Wkg.Cap. 13,604 2,233 (5,791) (5,701) PKO 27,234 34,187 35,054 35,204 Other Operating CF (236) 18,278 5,933 1,823 Elimination (169,284 (136,636 (153,514 (162,222Net Operating CF 226,409 177,907 190,060 217,016 Total 615,524 478,624 536,118 600,801 Capital Exp.(net) (245,896 (22,476) (87,757) (82,480) Other Invts.(net) 0 0 0 0 Invts in Assoc. & JV (1,467) 0 0 0 Div from Assoc & JV 0 0 0 0 Other Investing CF 65,943 4,151 (749) (2,005) Net Investing CF (181,420 (18,325) (88,506) (84,485) Div Paid (57,098) (37,810) (31,088) (34,642) Chg in Gross Debt 93,390 29,610 0 (323,839 Capital Issues (47,444) 0 0 0 Other Financing CF 44,927 671 704 739 Net Financing CF 33,775 (7,530) (30,384) (357,742 Net Cashflow 78,764 152,052 71,170 (225,210 Source: Company, DBS Bank, Bloomberg Finance L.P.

87

107

127

147

167

187

207

1.1

1.3

1.5

1.7

1.9

2.1

2.3

2.5

2.7


Relative IndexS$

First Resources (LHS) Relative STI INDEX (RHS)


Genting Plantations

Genting Plantations (HOLD; RM9.90; GENP MK; Price Target : RM9.35 (Prev: RM9.70))

Forecasts and Valuation General Data FY Dec (RM m) 2014A 2015F 2016F 2017F Turnover 1,643 1,366 1,572 1,754 Issued Capital (m shrs) 776 EBITDA 545 285 310 425 Mkt. Cap (RMm/US$m) 7,680 / 1,783 Pre-tax Profit 520 267 266 365 Major Shareholders Net Profit 377 197 196 269 Genting Berhad (%) 52.5 Net Pft (Pre Ex.) 377 177 196 269 Employees Provident Fund (%) 14.6 EPS (sen) 49.0 25.5 25.5 34.9 Kumpulan Wang Persaraan (%) 5.3 EPS Pre Ex. (sen) 49.0 22.9 25.5 34.9 Free Float (%) 27.7 EPS Gth Pre Ex (%) 63 (53) 11 37 Avg. Daily Vol.(‘000) 317 Diluted EPS (sen) 49.0 25.5 25.5 34.9 Net DPS (sen) 10.8 5.6 5.6 7.7 Price Relative BV Per Share (sen) 505.9 522.0 541.8 570.5 PE (X) 20.2 38.8 38.9 28.4 PE Pre Ex. (X) 20.2 43.2 38.9 28.4 P/Cash Flow (X) 15.5 24.7 28.5 23.2 EV/EBITDA (X) 14.2 27.6 26.2 19.5 Net Div Yield (%) 1.1 0.6 0.6 0.8 P/Book Value (X) 2.0 1.9 1.8 1.7 Net Debt/Equity (X) CASH CASH 0.0 0.1 ROAE (%) 10.3 5.0 4.8 6.3 Earnings Rev (%): (36.0) (41.9) (37.9) Consensus EPS (sen): 35.2 44.8 53.2 Income Statement (RM m) Balance Sheet (RM m) FY Dec 2014A 2015F 2016F 2017F FY Dec 2014A 2015F 2016F 2017F

Turnover 1,643 1,366 1,572 1,754 Net Fixed Assets 1,339 1,595 1,882 2,171 Cost of Goods Sold (960) (963) (1,140) (1,208) Invts in Associates & JVs 62 82 105 134 Gross Profit 683 403 432 546 Other LT Assets 2,570 2,602 2,709 2,790 Other Opng (Exp)/Inc (201) (188) (204) (219) Cash & ST Invts 1,177 2,058 1,813 1,632 Operating Profit 481 214 228 327 Inventory 105 97 114 121 Other Non Opg (Exp)/Inc 0 0 0 0 Debtors 265 206 236 262 Associates & JV Inc 18 19 23 30 Other Current Assets 73 71 72 72 Net Interest (Exp)/Inc 21 13 16 7 Total Assets 5,590 6,711 6,931 7,182 Exceptional Gain/(Loss) 0 20 0 0 Pre-tax Profit 520 267 266 365 ST Debt 27 27 27 27 Tax (136) (67) (67) (91) Other Current Liab 341 335 398 424 Minority Interest (7) (3) (3) (5) LT Debt 1,000 2,000 2,000 2,000 Preference Dividend 0 0 0 0 Other LT Liabilities 69 69 69 69 Net Profit 377 197 196 269 Shareholder’s Equity 3,898 4,022 4,175 4,396 Net Profit before Except. 377 177 196 269 Minority Interests 255 259 262 267 EBITDA 545 285 310 425 Total Cap. & Liab. 5,590 6,711 6,931 7,182 Sales Gth (%) 18.7 (16.8) 15.1 11.6 Non-Cash Wkg. Capital 102 40 24 32 EBITDA Gth (%) 73.6 (47.8) 8.7 37.2 Net Cash/(Debt) 149 31 (215) (395) Opg Profit Gth (%) 85.4 (55.5) 6.2 43.9 Net Profit Gth (%) 65.6 (47.8) (0.2) 37.0 Effective Tax Rate (%) 26.2 25.0 25.0 25.0 Cash Flow Statement (RM m) Segmental Breakdown FY Dec 2014A 2015F 2016F 2017F FY Dec 2014A 2015F 2016F 2017F

Pre-Tax Profit 520 267 266 365 Revenues (RM m) Dep. & Amort. 64 70 82 97 Plantation 1,185 1,180 1,368 1,537 Tax Paid (136) (67) (67) (91) Property 372 186 205 217 Assoc. & JV Inc/(loss) (18) (19) (23) (30) Others 86 0 0 0 Chg in Wkg.Cap. (34) 63 13 (8) Total 1,643 1,366 1,572 1,754 Other Operating CF 96 (6) (4) (5) Net Operating CF 491 308 268 328 Capital Exp.(net) (407) (420) (470) (461) EBIT (RM m) Other Invts.(net) 0 0 0 0 Plantation 393 242 301 398 Invts in Assoc. & JV 0 0 0 0 Property 155 52 32 31 Div from Assoc & JV 0 0 0 0 Others (55) (52) (50) (47) Other Investing CF 18 0 0 0 Total 493 242 283 382 Net Investing CF (389) (420) (470) (461) Div Paid (23) (73) (43) (48) Chg in Gross Debt 138 1,000 0 0 EBIT Margins (%) Capital Issues 93 0 0 0 Plantation 33.1 20.5 22.0 25.9 Other Financing CF (65) 66 0 0 Property 41.7 27.7 15.5 14.5 Net Financing CF 144 993 (43) (48) Total 30.0 17.7 18.0 21.8 Net Cashflow 246 881 (245) (181) Source: Company, DBS Bank, Bloomberg Finance L.P.

88

108

128

148

168

188

208

6.1

7.1

8.1

9.1

10.1

11.1

12.1


Relative IndexRM

Genting Plantations (LHS) Relative KLCI INDEX (RHS)


Golden Agri Resources

Golden Agri Resources (NOT RATED; S$0.31; GGR SP; Price Target : S$0.27 (Prev: S$0.26))

Forecasts and Valuation General Data FY Dec (US$ m) 2014A 2015F 2016F 2017F Turnover 7,619 5,533 5,597 5,937 Issued Capital (m shrs) 12,735 EBITDA 531 406 561 633 Mkt. Cap (S$m/US$m) 3,934 / 2,806 Pre-tax Profit 158 121 175 219 Major Shareholders Net Profit 114 90 130 162 Massingham Internaional Ltd (%) 36.8 Net Pft (Pre Ex.) 240 90 130 162 Silchester Intl Investors LLP (%) 11.1 EPS (S cts) 1.3 1.0 1.5 1.9 Golden Moment Limited (%) 9.8 EPS Pre Ex. (S cts) 2.8 1.0 1.5 1.9 Free Float (%) 36.1 EPS Gth Pre Ex (%) (16) (62) 45 25 Avg. Daily Vol.(‘000) 27,665 Diluted EPS (S cts) 1.3 1.0 1.5 1.9 Net DPS (S cts) 1.1 0.1 0.4 0.5 Price Relative BV Per Share (S cts) 100.8 101.7 41.0 42.4 PE (X) 23.6 29.7 20.5 16.5 PE Pre Ex. (X) 11.2 29.7 20.5 16.5 P/Cash Flow (X) 19.1 3.2 6.9 6.5 EV/EBITDA (X) 10.4 12.5 9.1 8.1 Net Div Yield (%) 3.5 0.3 1.3 1.7 P/Book Value (X) 0.3 0.3 0.8 0.7 Net Debt/Equity (X) 0.3 0.3 0.6 0.6 ROAE (%) 1.3 1.0 2.1 4.5 Earnings Rev (%): (30.2) (56.7) (59.2) Consensus EPS (S cts): 2.1 2.9 3.4 Income Statement (US$ m) Balance Sheet (US$ m) FY Dec 2014A 2015F 2016F 2017F FY Dec 2014A 2015F 2016F 2017F

Turnover 7,619 5,533 5,597 5,937 Net Fixed Assets 2,552 2,752 2,914 3,032 Cost of Goods Sold (6,308) (4,504) (4,409) (4,706) Invts in Associates & JVs 65 65 65 65 Gross Profit 1,311 1,029 1,188 1,231 Other LT Assets 9,256 9,287 2,195 2,152 Other Opng (Exp)/Inc (914) (737) (884) (911) Cash & ST Invts 330 257 217 270 Operating Profit 397 293 305 320 Inventory 851 607 595 635 Other Non Opg (Exp)/Inc (14) (59) (11) 20 Debtors 1,353 920 930 987 Associates & JV Inc (1) (1) (1) (1) Other Current Assets 261 261 261 261 Net Interest (Exp)/Inc (98) (111) (118) (121) Total Assets 14,667 14,148 7,177 7,401 Exceptional Gain/(Loss) (126) 0 0 0 Pre-tax Profit 158 121 175 219 ST Debt 1,641 1,123 1,132 1,181 Tax (41) (30) (44) (55) Other Current Liab 859 744 729 779 Minority Interest (3) (1) (1) (2) LT Debt 1,428 1,457 1,445 1,447 Preference Dividend 0 0 0 0 Other LT Liabilities 1,920 1,924 229 233 Net Profit 114 90 130 162 Shareholder’s Equity 8,729 8,810 3,549 3,667 Net Profit before Except. 240 90 130 162 Minority Interests 90 91 92 94 EBITDA 531 406 561 633 Total Cap. & Liab. 14,667 14,148 7,177 7,401 Sales Gth (%) 15.7 (27.4) 1.2 6.1 Non-Cash Wkg. Capital 1,605 1,044 1,057 1,104 EBITDA Gth (%) (13.9) (23.4) 37.9 12.9 Net Cash/(Debt) (2,739) (2,323) (2,360) (2,359) Opg Profit Gth (%) (23.1) (26.2) 4.1 5.0 Net Profit Gth (%) (63.5) (20.7) 44.7 24.5 Effective Tax Rate (%) 25.9 25.0 25.0 25.0 Cash Flow Statement (US$ m) Segmental Breakdown FY Dec 2014A 2015F 2016F 2017F FY Dec 2014A 2015F 2016F 2017F

Pre-Tax Profit 158 121 175 219 Revenues (US$ m) Dep. & Amort. 149 174 267 294 CPO 2,191 1,795 1,777 1,851 Tax Paid (41) (30) (44) (55) Palm kernel 11 0 19 11 Assoc. & JV Inc/(loss) 1 1 1 1 RBD Olein 1,615 1,557 1,602 1,768 Chg in Wkg.Cap. (219) 562 (13) (48) Soybean products 1,044 804 806 827 Other Operating CF 93 (1) (1) (1) Others 2,758 1,377 1,393 1,481 Net Operating CF 140 826 386 410 Total 7,619 5,533 5,597 5,937 Capital Exp.(net) (346) (411) (385) (361) Other Invts.(net) (129) 0 0 0 Invts in Assoc. & JV (49) 0 0 0 Div from Assoc & JV 0 0 0 0 Other Investing CF (24) 6 (9) (7) Net Investing CF (548) (405) (394) (369) Div Paid (92) (9) (33) (44) Chg in Gross Debt 493 (489) (2) 51 Capital Issues (11) 0 0 0 Other Financing CF 21 4 4 4 Net Financing CF 410 (494) (32) 11 Net Cashflow 2 (73) (40) 52 Source: Company, DBS Bank, Bloomberg Finance L.P.

37

57

77

97

117

137

157

177

197

217

0.3

0.4

0.5

0.6

0.7

0.8

0.9


Relative IndexS$

Golden Agri Resources (LHS) Relative STI INDEX (RHS)


IJM Plantations

IJM Plantations (HOLD RM3.20; IJMP MK; Price Target : RM3.25 (Prev: RM3.45))

Forecasts and Valuation General Data FY Mar (RM m) 2014A 2015A 2016F 2017F Turnover 647 668 751 851 Issued Capital (m shrs) 881 EBITDA 224 188 241 272 Mkt. Cap (RMm/US$m) 2,818 / 661 Pre-tax Profit 109 89 147 171 Major Shareholders Net Profit 89 90 113 132 IJM Corporation Bhd (%) 55.2 Net Pft (Pre Ex.) 109 133 113 132 Employees Provident Fund (%) 12.1 EPS (sen) 11.0 10.3 12.9 15.0 Desa Plus Sdn Bhd (%) 0.0 EPS Pre Ex. (sen) 13.6 15.1 12.9 15.0 Free Float (%) 32.7 EPS Gth Pre Ex (%) (9) 11 (15) 16 Avg. Daily Vol.(‘000) 173 Diluted EPS (sen) 11.0 10.3 12.9 15.0 Net DPS (sen) 6.5 5.1 6.4 7.5 Price Relative BV Per Share (sen) 157.2 182.6 190.3 198.9 PE (X) 29.0 31.2 24.8 21.4 PE Pre Ex. (X) 23.5 21.2 24.8 21.4 P/Cash Flow (X) 20.6 12.1 21.4 15.7 EV/EBITDA (X) 12.7 16.7 13.3 11.8 Net Div Yield (%) 2.0 1.6 2.0 2.3 P/Book Value (X) 2.0 1.8 1.7 1.6 Net Debt/Equity (X) 0.2 0.2 0.2 0.2 ROAE (%) 6.4 6.0 6.9 7.7 Earnings Rev (%): (14.7) (10.8) Consensus EPS (sen): 15.0 18.7 Income Statement (RM m) Balance Sheet (RM m) FY Mar 2014A 2015A 2016F 2017F FY Mar 2014A 2015A 2016F 2017F

Turnover 647 668 751 851 Net Fixed Assets 822 884 1,036 1,097 Cost of Goods Sold (425) (428) (508) (577) Invts in Associates & JVs 0 128 128 128 Gross Profit 222 239 242 274 Other LT Assets 880 1,052 979 981 Other Opng (Exp)/Inc (48) (99) (59) (65) Cash & ST Invts 344 375 358 351 Operating Profit 174 141 183 209 Inventory 80 58 82 93 Other Non Opg (Exp)/Inc 0 0 0 0 Debtors 93 63 88 99 Associates & JV Inc 0 0 0 0 Other Current Assets 7 10 9 9 Net Interest (Exp)/Inc (44) (9) (36) (38) Total Assets 2,226 2,570 2,679 2,757 Exceptional Gain/(Loss) (21) (42) 0 0 Pre-tax Profit 109 89 147 171 ST Debt 138 211 225 226 Tax (26) (7) (37) (43) Other Current Liab 69 90 95 107 Minority Interest 6 8 3 3 LT Debt 473 504 537 538 Preference Dividend 0 0 0 0 Other LT Liabilities 163 167 159 151 Net Profit 89 90 113 132 Shareholder’s Equity 1,384 1,608 1,676 1,751 Net Profit before Except. 109 133 113 132 Minority Interests (3) (10) (13) (16) EBITDA 224 188 241 272 Total Cap. & Liab. 2,226 2,570 2,679 2,757 Sales Gth (%) 33.0 3.2 12.4 13.3 Non-Cash Wkg. Capital 110 41 84 94 EBITDA Gth (%) 11.4 (15.8) 27.9 12.8 Net Cash/(Debt) (267) (339) (405) (413) Opg Profit Gth (%) 9.1 (19.1) 30.1 14.4 Net Profit Gth (%) (25.9) 2.0 25.4 16.2 Effective Tax Rate (%) 23.8 8.0 25.0 25.0 Cash Flow Statement (RM m) Segmental Breakdown FY Mar 2014A 2015A 2016F 2017F FY Mar 2014A 2015A 2016F 2017F

Pre-Tax Profit 109 89 147 171 Revenues (RM m) Dep. & Amort. 50 48 58 62 CPO 547 547 623 722 Tax Paid (26) (7) (37) (43) CPKO 67 73 103 105 Assoc. & JV Inc/(loss) 0 0 0 0 PK cake 9 8 17 17 Chg in Wkg.Cap. (7) 51 (37) (12) Others 24 39 8 7 Other Operating CF 0 52 1 1 Total 647 668 751 851 Net Operating CF 125 233 132 179 Capital Exp.(net) (197) (282) (144) (126) Other Invts.(net) 0 0 0 0 Invts in Assoc. & JV 0 0 0 0 Div from Assoc & JV 0 0 0 0 Other Investing CF 1 (86) 3 3 Net Investing CF (196) (369) (141) (123) Div Paid (56) (57) (45) (57) Chg in Gross Debt 98 103 48 1 Capital Issues (41) 190 0 0 Other Financing CF (10) (72) (8) (8) Net Financing CF (9) 164 (5) (63) Net Cashflow (79) 29 (15) (7) Source: Company, AllianceDBS, Bloomberg Finance L.P.

81

101

121

141

161

181

201

221

2.2

2.7

3.2

3.7

4.2


Relative IndexRM

IJM Plantations (LHS) Relative KLCI INDEX (RHS)


Indofood Agri Resources

Indofood Agri Resources (HOLD S$0.47; IFAR SP; Price Target : S$0.47 (Prev: S$0.56))

Forecasts and Valuation General Data FY Dec (Rp bn) 2014A 2015F 2016F 2017F Revenue 14,963 13,785 15,344 16,144 Issued Capital (m shrs) 1,396 EBITDA 3,329 1,679 2,975 3,319 Mkt. Cap (S$m/US$m) 0.67 / 483 Pre-tax Profit 2,007 158 890 1,165 Major Shareholders Net Profit 759 53 379 465 PT Indofood Sukses Makmur (%) 70.4 Net Pft (Pre Ex.) 759 53 379 465 (direct / indirect) EPS (S cts) 5 0 3 3 Free Float (%) 29.6 EPS Pre Ex. (S cts) 5 0 3 3 Avg. Daily Vol.(‘000) 595 EPS Gth (%) 45 (93) 621 23 EPS Gth Pre Ex (%) 45 (93) 621 23 Diluted EPS (S cts) 5 0 3 3 Price Relative Net DPS (S cts) 0 0 0 0 BV Per Share (S cts) 100 100 65 69 PE (X) 9.0 129.6 18.0 14.7 PE Pre Ex. (X) 9.0 129.6 18.0 14.7 P/Cash Flow (X) 3.4 7.8 3.5 3.0 EV/EBITDA (X) 6.7 13.8 8.0 7.2 Net Div Yield (%) 0.0 0.0 0.0 0.0 P/Book Value (X) 0.5 0.5 0.7 0.7 Net Debt/Equity (X) 0.3 0.3 0.4 0.4 ROAE (%) 5.3 0.4 3.1 4.8 Earnings Rev (%): (95.4) (78.5) (73.9) Consensus EPS (S cts): 4 6 8 Income Statement (Rp bn) Balance Sheet (Rp bn) FY Dec 2014A 2015F 2016F 2017F FY Dec 2014A 2015F 2016F 2017F

Turnover 14,963 13,785 15,344 16,144 Net Fixed Assets 11,027 12,226 13,157 13,778 Cost of Goods Sold (10,595) (10,654) (11,774) (12,309) Invts in Associates & JVs 0 0 0 0 Gross Profit 4,368 3,131 3,570 3,835 Other LT Assets 22,316 22,111 14,673 14,505 Other Opng (Exp)/Inc (1,711) (2,193) (1,856) (1,880) Cash & ST Invts 3,586 2,597 1,843 1,642 Operating Profit 2,657 938 1,714 1,955 Inventory 1,773 1,792 1,960 2,029 Other Non Opg (Exp)/Inc 0 0 0 0 Debtors 1,056 1,110 1,223 1,274 Associates & JV Inc (121) (103) (89) (87) Other Current Assets 397 377 413 428 Net Interest (Exp)/Inc (529) (678) (735) (703) Total Assets 40,155 40,213 33,269 33,656 Exceptional Gain/(Loss) 0 0 0 0 Pre-tax Profit 2,007 158 890 1,165 ST Debt 4,749 4,733 4,761 4,731 Tax (679) (78) (274) (351) Other Current Liab 2,202 2,135 2,384 2,517 Minority Interest (569) (27) (237) (349) LT Debt 5,068 5,150 4,728 4,291 Preference Dividend 0 0 0 0 Other LT Liabilities 4,418 4,397 2,483 2,389 Net Profit 759 53 379 465 Shareholder’s Equity 14,629 14,681 9,561 10,027 Net Profit before Except. 759 53 379 465 Minority Interests 9,088 9,116 9,352 9,701 Net Pft (ex. BA gains) 734 53 379 465 Total Cap. & Liab. 40,155 40,213 33,269 33,656 EBITDA 3,329 1,679 2,975 3,319 Sales Gth (%) 12.7 (7.9) 11.3 5.2 Non-Cash Wkg. Capital 1,024 1,143 1,213 1,214 EBITDA Gth (%) 37.4 (49.6) 77.2 11.6 Net Cash/(Debt) (6,232) (7,286) (7,646) (7,380) Opg Profit Gth (%) 56.5 (64.7) 82.6 14.1 Net Profit Gth (%) 45.0 (93.1) 620.7 22.8 Effective Tax Rate (%) 33.8 49.5 30.8 30.1 Cash Flow Statement (Rp bn) Segmental Breakdown FY Dec 2014A 2015F 2016F 2017F FY Dec 2014A 2015F 2016F 2017F

Pre-Tax Profit 2,007 158 890 1,165 Revenues (Rpm) Dep. & Amort. 792 843 1,350 1,451 Plantations 5,868 5,297 5,793 6,106 Tax Paid (679) (78) (274) (351) Edible Oil & Fats 9,095 8,488 9,551 10,037 Assoc. & JV Inc/(loss) 0 0 0 0 Total 14,963 13,785 15,344 16,144 Chg in Wkg.Cap. 97 (118) (70) (2) Other Operating CF (143) 71 75 (15) Net Operating CF 2,014 875 1,971 2,248 Capital Exp.(net) (2,577) (2,474) (2,263) (1,917) Other Invts.(net) 0 0 0 0 Invts in Assoc. & JV 0 0 0 0 Div from Assoc & JV 0 0 0 0 Other Investing CF (667) 666 47 44 Net Investing CF (3,245) (1,809) (2,216) (1,874) Div Paid 0 0 0 0 Chg in Gross Debt 1,023 66 (395) (466) Capital Issues 0 0 0 0 Other Financing CF (10) (121) (115) (109) Net Financing CF 1,013 (55) (509) (575) Source: Company, DBS Bank, Bloomberg Finance L.P.

28

48

68

88

108

128

148

168

188

208

0.4

0.6

0.8

1.0

1.2

1.4

1.6

1.8


Relative IndexS$

Indofood Agri Resources (LHS) Relative STI INDEX (RHS)


IOI Corporation

IOI Corporation (FULLY VALUED; RM4.06; IOI MK; Price Target : RM3.20 (Prev: RM3.20))

Forecasts and Valuation General Data FY Jun (RM m) 2014A 2015A 2016F 2017F Turnover 11,911 11,621 14,506 14,738 Issued Capital (m shrs) 6,302 EBITDA 2,501 958 1,560 1,862 Mkt. Cap (RMm/US$m) 25,587 / 6,000 Pre-tax Profit 3,924 457 1,065 1,319 Major Shareholders Net Profit 3,373 168 731 977 Vertical Capacity Sdn Bhd (%) 46.6 Net Pft (Pre Ex.) 1,486 168 731 977 Employees Provident Fund (%) 9.5 EPS (sen) 52.8 2.6 11.4 15.3 First State Investments (%) 0.0 EPS Pre Ex. (sen) 23.2 2.6 11.4 15.3 Free Float (%) 43.9 EPS Gth Pre Ex (%) (31) (89) 335 34 Avg. Daily Vol.(‘000) 4,780 Diluted EPS (sen) 22.9 2.6 11.3 15.0 Net DPS (sen) 19.8 5.2 5.6 7.4 Price Relative BV Per Share (sen) 93.8 78.6 87.0 95.8 PE (X) 7.7 154.4 35.5 26.6 PE Pre Ex. (X) 17.5 154.4 35.5 26.6 P/Cash Flow (X) 8.1 77.2 203.8 24.2 EV/EBITDA (X) 11.9 32.4 20.2 16.8 Net Div Yield (%) 4.9 1.3 1.4 1.8 P/Book Value (X) 4.3 5.2 4.7 4.2 Net Debt/Equity (X) 0.6 0.9 0.9 0.8 ROAE (%) 34.3 3.0 13.7 16.6 Earnings Rev (%): (37.5) (27.6) Consensus EPS (sen): 17.7 20.0 Income Statement (RM m) Balance Sheet (RM m) FY Jun 2014A 2015A 2016F 2017F FY Jun 2014A 2015A 2016F 2017F

Turnover 11,911 11,621 14,506 14,738 Net Fixed Assets 6,410 6,650 6,826 6,989 Cost of Goods Sold (9,227) (9,262) (12,556) (12,540) Invts in Associates & JVs 920 974 1,126 1,314 Gross Profit 2,684 2,359 1,949 2,199 Other LT Assets 616 684 684 685 Other Opng (Exp)/Inc (884) (1,012) (801) (816) Cash & ST Invts 3,988 1,789 1,880 2,113 Operating Profit 2,117 612 1,148 1,383 Inventory 2,155 2,083 2,873 2,869 Other Non Opg (Exp)/Inc 0 0 0 0 Debtors 1,102 1,106 1,378 1,400 Associates & JV Inc 160 113 150 186 Other Current Assets 142 148 150 151 Net Interest (Exp)/Inc (240) (268) (234) (250) Total Assets 15,332 13,434 14,918 15,521 Exceptional Gain/(Loss) 1,887 0 0 0 Pre-tax Profit 3,924 457 1,065 1,319 ST Debt 2,454 813 813 813 Tax (534) (285) (325) (333) Other Current Liab 1,043 1,053 1,392 1,391 Minority Interest (17) (4) (9) (9) LT Debt 5,069 5,836 6,425 6,440 Preference Dividend 0 0 0 0 Other LT Liabilities 533 484 494 504 Net Profit 3,373 168 731 977 Shareholder’s Equity 6,037 5,059 5,595 6,166 Net Profit before Except. 1,486 168 731 977 Minority Interests 196 189 198 208 EBITDA 2,501 958 1,560 1,862 Total Cap. & Liab. 15,332 13,434 14,918 15,521 Sales Gth (%) (2.4) (2.4) 24.8 1.6 Non-Cash Wkg. Capital 2,356 2,285 3,008 3,029 EBITDA Gth (%) (16.3) (61.7) 62.9 19.4 Net Cash/(Debt) (3,536) (4,860) (5,358) (5,140) Opg Profit Gth (%) (16.8) (71.1) 87.7 20.4 Net Profit Gth (%) 55.6 (95.0) 334.7 33.7 Effective Tax Rate (%) 13.6 62.3 30.5 25.2 Cash Flow Statement (RM m) Segmental Breakdown FY Jun 2014A 2015A 2016F 2017F FY Jun 2014A 2015A 2016F 2017F

Pre-Tax Profit 3,924 457 1,065 1,319 Revenues (RM m) Dep. & Amort. 224 232 261 293 Plantation 260 186 390 383 Tax Paid (534) (285) (325) (333) Resource-based 11,585 11,338 14,016 14,254 Assoc. & JV Inc/(loss) (160) (113) (150) (186) Others 65 97 99 101 Chg in Wkg.Cap. (248) 51 (721) (20) Total 11,911 11,621 14,506 14,738 Other Operating CF (10) (6) (1) (1) Net Operating CF 3,196 336 127 1,072 Capital Exp.(net) (1,335) (457) (437) (456) EBIT (RM m) Other Invts.(net) (1) 1 0 0 Plantation 1,086 915 950 967 Invts in Assoc. & JV 0 0 0 0 Resource-based 760 398 399 395 Div from Assoc & JV 0 0 0 0 Others 271 (701) (201) 22 Other Investing CF (36) (71) (2) (3) Total 2,117 612 1,148 1,383 Net Investing CF (1,372) (527) (440) (459) Div Paid (8,615) (1,049) (192) (406) Chg in Gross Debt 199 (875) 589 15 EBIT Margins (%) Capital Issues (2,362) (81) (2) 0 Plantation 49.3 45.3 44.9 44.7 Other Financing CF 9,971 (3) 10 10 Resource-based 6.6 3.5 2.8 2.8 Net Financing CF (806) (2,008) 404 (381) Total 17.8 5.3 7.9 9.4 Net Cashflow 1,018 (2,199) 92 232 Source: Company, DBS Bank, Bloomberg Finance L.P.

74

94

114

134

154

174

194

214

2.7

3.2

3.7

4.2

4.7

5.2

5.7


Relative IndexRM

IOI Corporation (LHS) Relative KLCI INDEX (RHS)


KL Kepong

KL Kepong (HOLD RM22.00; KLK MK; Price Target : RM19.25 (Prev: RM19.50))

Forecasts and Valuation General Data FY Sep (RM m) 2014A 2015F 2016F 2017F Turnover 11,130 12,141 13,822 14,462 Issued Capital (m shrs) 1,065 EBITDA 1,732 1,636 1,817 1,913 Mkt. Cap (RMm/US$m) 23,429 / 5,494 Pre-tax Profit 1,318 1,197 1,358 1,437 Major Shareholders Net Profit 992 884 1,000 1,055 Batu Kawan Bhd (%) 46.6 Net Pft (Pre Ex.) 986 884 1,000 1,055 Employees Provident Fund (%) 13.9 EPS (sen) 92.9 82.8 93.7 98.8 Skim Amanah Saham Bumiputera (%) 6.2 EPS Pre Ex. (sen) 92.3 82.8 93.7 98.8 Free Float (%) 33.3 EPS Gth Pre Ex (%) 11 (10) 13 5 Avg. Daily Vol.(‘000) 634 Diluted EPS (sen) 92.9 82.8 93.7 98.8 Net DPS (sen) 55.7 49.7 56.2 59.3 Price Relative BV Per Share (sen) 726.2 755.1 797.1 838.8 PE (X) 23.7 26.6 23.5 22.3 PE Pre Ex. (X) 23.8 26.6 23.5 22.3 P/Cash Flow (X) 31.8 17.7 20.7 17.1 EV/EBITDA (X) 14.7 15.5 13.9 13.1 Net Div Yield (%) 2.5 2.3 2.6 2.7 P/Book Value (X) 3.0 2.9 2.8 2.6 Net Debt/Equity (X) 0.2 0.2 0.1 0.1 ROAE (%) 13.0 11.2 12.1 12.1 Earnings Rev (%): (3.5) 0.4 (6.1) Consensus EPS (sen): 84.9 98.7 111.2 Income Statement (RM m) Balance Sheet (RM m) FY Sep 2014A 2015F 2016F 2017F FY Sep 2014A 2015F 2016F 2017F

Turnover 11,130 12,141 13,822 14,462 Net Fixed Assets 6,301 6,475 6,660 6,844 Cost of Goods Sold (9,008) (10,091) (11,504) (12,016) Invts in Associates & JVs 173 179 185 191 Gross Profit 2,122 2,050 2,319 2,446 Other LT Assets 1,903 1,859 1,816 1,774 Other Opng (Exp)/Inc (723) (767) (872) (919) Cash & ST Invts 1,296 1,534 1,577 1,789 Operating Profit 1,399 1,282 1,447 1,527 Inventory 1,441 1,599 1,823 1,904 Other Non Opg (Exp)/Inc (42) (31) (39) (42) Debtors 1,592 1,545 1,759 1,840 Associates & JV Inc 6 6 6 6 Other Current Assets 181 181 181 181 Net Interest (Exp)/Inc (51) (60) (55) (54) Total Assets 12,888 13,373 14,001 14,524 Exceptional Gain/(Loss) 6 0 0 0 Pre-tax Profit 1,318 1,197 1,358 1,437 ST Debt 1,094 1,067 1,040 1,014 Tax (285) (275) (316) (337) Other Current Liab 1,155 1,321 1,484 1,544 Minority Interest (41) (37) (42) (45) LT Debt 1,816 1,816 1,816 1,816 Preference Dividend 0 0 0 0 Other LT Liabilities 639 639 639 639 Net Profit 992 884 1,000 1,055 Shareholder’s Equity 7,752 8,060 8,509 8,954 Net Profit before Except. 986 884 1,000 1,055 Minority Interests 431 469 511 556 EBITDA 1,732 1,636 1,817 1,913 Total Cap. & Liab. 12,888 13,373 14,001 14,524 Sales Gth (%) 21.7 9.1 13.8 4.6 Non-Cash Wkg. Capital 2,060 2,004 2,279 2,382 EBITDA Gth (%) 11.0 (5.6) 11.1 5.3 Net Cash/(Debt) (1,615) (1,349) (1,280) (1,042) Opg Profit Gth (%) 10.4 (8.4) 12.8 5.6 Net Profit Gth (%) 8.1 (10.8) 13.1 5.5 Effective Tax Rate (%) 21.6 23.0 23.2 23.5 Cash Flow Statement (RM m) Segmental Breakdown FY Sep 2014A 2015F 2016F 2017F FY Sep 2014A 2015F 2016F 2017F

Pre-Tax Profit 1,318 1,197 1,358 1,437 Revenues (RM m) Dep. & Amort. 333 354 370 386 Plantation 5,235 4,584 4,947 4,960 Tax Paid (285) (275) (316) (337) Manufacturing 5,634 7,386 8,674 9,274 Assoc. & JV Inc/(loss) (6) (6) (6) (6) Property 117 140 162 186 Chg in Wkg.Cap. (577) 56 (275) (103) Others 144 31 39 42 Other Operating CF (44) 0 0 0 Total 11,130 12,141 13,822 14,462 Net Operating CF 739 1,325 1,132 1,376 Capital Exp.(net) (1,078) (520) (547) (563) EBIT (RM m) Other Invts.(net) (66) 31 31 30 Plantation 1,006 898 1,027 1,044 Invts in Assoc. & JV 0 0 0 0 Manufacturing 288 259 304 357 Div from Assoc & JV 0 0 0 0 Property 46 70 60 69 Other Investing CF (18) 5 5 5 Others 55 55 56 57 Net Investing CF (1,162) (484) (512) (528) Total 1,395 1,282 1,447 1,527 Div Paid (532) (576) (551) (610) Chg in Gross Debt 575 (27) (27) (26) EBIT Margins (%) Capital Issues (241) 0 0 0 Plantation 19.2 19.6 20.8 21.0 Other Financing CF 161 0 0 0 Manufacturing 5.1 3.5 3.5 3.9 Net Financing CF (38) (603) (578) (636) Property 39.0 50.0 37.3 37.3 Net Cashflow (461) 238 43 212 Total 12.5 10.6 10.5 10.6 Source: Company, DBS Bank, Bloomberg Finance L.P.

68

88

108

128

148

168

188

208

17.6

19.6

21.6

23.6

25.6

27.6


Relative IndexRM

KL Kepong (LHS) Relative KLCI INDEX (RHS)


London Sumatra Indonesia

London Sumatra Indonesia (FULLY VALUED, downgrade from HOLD; Rp1,195; LSIP IJ; Price Target : Rp990 (Prev: Rp1,340)) Forecasts and Valuation General Data FY Dec (Rp bn) 2014A 2015F 2016F 2017F Revenue 4,727 4,108 4,274 4,487 Issued Capital (m shrs) 6,823 EBITDA 1,125 526 473 501 Mkt. Cap (Rpbn/US$m) 8,119 / 569 Pre-tax Profit 1,189 586 543 579 Major Shareholders Net Profit 917 445 413 440 Salim Ivomas Pratama TBK PT (%) 59.5 Net Pft (Pre Ex.) 917 445 413 440 EPS (Rp) 134 65 60 65 Free Float (%) 40.5 EPS Pre Ex. (Rp) 134 65 60 65 Avg. Daily Vol.(‘000) 16,131 EPS Gth (%) 19 (51) (7) 7 EPS Gth Pre Ex (%) 19 (51) (7) 7 Diluted EPS (Rp) 134 65 60 65 Price Relative Net DPS (Rp) 46 55 27 25 BV Per Share (Rp) 1,058 1,065 1,099 1,138 PE (X) 8.9 18.3 19.8 18.5 PE Pre Ex. (X) 8.9 18.3 19.8 18.5 P/Cash Flow (X) 5.9 10.1 9.4 8.7 EV/EBITDA (X) 6.0 13.0 14.2 13.0 Net Div Yield (%) 3.8 4.6 2.2 2.1 P/Book Value (X) 1.1 1.1 1.1 1.0 Net Debt/Equity (X) CASH CASH CASH CASH ROAE (%) 13.3 6.2 5.6 5.8 Earnings Rev (%): (44.4) (47.6) (53.9) Consensus EPS (Rp): 110 128 139 Income Statement (Rp bn) Balance Sheet (Rp bn) FY Dec 2014A 2015F 2016F 2017F FY Dec 2014A 2015F 2016F 2017F

Turnover 4,727 4,108 4,274 4,487 Net Fixed Assets 3,239 3,568 3,743 3,805 Cost of Goods Sold (3,090) (3,048) (3,267) (3,467) Invts in Associates & JVs 0 0 0 0 Gross Profit 1,636 1,060 1,007 1,020 Other LT Assets 3,553 3,322 3,375 3,412 Other Opng (Exp)/Inc (396) (459) (466) (459) Cash & ST Invts 1,357 1,337 1,414 1,664 Operating Profit 1,241 601 541 562 Inventory 380 369 391 411 Other Non Opg (Exp)/Inc (116) (75) (68) (61) Debtors 85 87 89 93 Associates & JV Inc 0 0 0 0 Other Current Assets 42 67 70 73 Net Interest (Exp)/Inc 64 60 70 78 Total Assets 8,655 8,750 9,082 9,457 Exceptional Gain/(Loss) 0 0 0 0 Pre-tax Profit 1,189 586 543 579 ST Debt 0 0 0 0 Tax (272) (141) (130) (139) Other Current Liab 748 757 816 873 Minority Interest 0 0 0 0 LT Debt 0 0 0 0 Preference Dividend 0 0 0 0 Other LT Liabilities 688 731 774 819 Net Profit 917 445 413 440 Shareholder’s Equity 7,219 7,262 7,493 7,765 Net Profit before Except. 917 445 413 440 Minority Interests 0 0 0 0 Net Pft (ex. BA gains) 917 445 413 440 Total Cap. & Liab. 8,655 8,750 9,082 9,457 EBITDA 1,125 526 473 501 Sales Gth (%) 14.3 (13.1) 4.0 5.0 Non-Cash Wkg. Capital (241) (235) (265) (296) EBITDA Gth (%) 18.0 (53.2) (10.0) 5.9 Net Cash/(Debt) 1,357 1,337 1,414 1,664 Opg Profit Gth (%) 20.9 (51.5) (10.0) 3.9 Net Profit Gth (%) 19.1 (51.4) (7.4) 6.7 Effective Tax Rate (%) 22.9 24.0 24.0 24.0 Cash Flow Statement (Rp bn) Segmental Breakdown FY Dec 2014A 2015F 2016F 2017F FY Dec 2014A 2015F 2016F 2017F

Pre-Tax Profit 1,189 586 543 579 Revenues (Rpbn) Dep. & Amort. 298 330 385 425 Crude palm oil 3,712 3,102 3,196 3,387 Tax Paid (272) (141) (130) (139) Palm kernel 560 496 511 542 Assoc. & JV Inc/(loss) 0 0 0 0 Rubber 276 279 313 306 Chg in Wkg.Cap. 34 (7) 31 31 Seeds 95 118 134 140 Other Operating CF 4 0 0 0 Others 84 112 119 113 Net Operating CF 1,381 811 872 942 Total 4,727 4,108 4,274 4,487 Capital Exp.(net) (1,164) (554) (626) (530) Other Invts.(net) 119 0 0 0 Invts in Assoc. & JV 0 0 0 0 Div from Assoc & JV 0 0 0 0 Other Investing CF (68) 126 12 6 Net Investing CF (1,114) (428) (614) (524) Div Paid (314) (374) (182) (168) Chg in Gross Debt 0 0 0 0 Capital Issues 2 (28) 0 0 Other Financing CF 0 0 0 0 Net Financing CF (312) (402) (182) (168) Source: Company, DBS Bank, Bloomberg Finance L.P.

35

55

75

95

115

135

155

175

195

215

841.5

1,341.5

1,841.5

2,341.5

2,841.5

3,341.5


Relative IndexRp

London Sumatra Indonesia (LHS) Relative JCI INDEX (RHS)


Sampoerna Agro

Sampoerna Agro (FULLY VALUED, upgrade from HOLD; Rp1,300; SGRO IJ;

Price Target : Rp1,110 (Prev: Rp1,710)) Forecasts and Valuation General Data FY Dec (Rp bn) 2014A 2015F 2016F 2017F Revenue 3,242 2,941 3,105 3,248 Issued Capital (m shrs) 1,890 EBITDA 799 573 567 567 Mkt. Cap (Rp bn/US$m) 2,618 / 184 Pre-tax Profit 510 203 111 57 Major Shareholders Net Profit 340 140 78 40 Sampoerna Agri Resources (%) 67.1 Net Pft (Pre Ex.) 340 140 78 40 EPS (Rp) 180 74 41 21 Free Float (%) 33.0 EPS Pre Ex. (Rp) 180 74 41 21 Avg. Daily Vol.(‘000) 738 EPS Gth (%) 186 (59) (45) (49) EPS Gth Pre Ex (%) 186 (59) (45) (49) Diluted EPS (Rp) 180 74 41 21 Price Relative Net DPS (Rp) 15 45 19 10 BV Per Share (Rp) 1,575 1,605 1,627 1,638 PE (X) 7.2 17.5 31.6 61.8 PE Pre Ex. (X) 7.2 17.5 31.6 61.8 P/Cash Flow (X) 3.4 6.1 6.6 6.6 EV/EBITDA (X) 5.0 7.6 8.0 8.2 Net Div Yield (%) 1.2 3.5 1.4 0.8 P/Book Value (X) 0.8 0.8 0.8 0.8 Net Debt/Equity (X) 0.5 0.6 0.7 0.7 ROAE (%) 12.1 4.7 2.5 1.3 Earnings Rev (%): (62.4) (84.4) (91.9) Consensus EPS (Rp): 130 172 206 Income Statement (Rp bn) Balance Sheet (Rp bn) FY Dec 2014A 2015F 2016F 2017F FY Dec 2014A 2015F 2016F 2017F

Turnover 3,242 2,941 3,105 3,248 Net Fixed Assets 1,706 1,770 1,813 1,827 Cost of Goods Sold (2,374) (2,307) (2,488) (2,645) Invts in Associates & JVs 0 0 0 0 Gross Profit 869 634 617 604 Other LT Assets 2,976 3,271 3,506 3,587 Other Opng (Exp)/Inc (296) (323) (338) (361) Cash & ST Invts 195 262 328 257 Operating Profit 573 311 278 243 Inventory 298 274 292 308 Other Non Opg (Exp)/Inc 0 0 0 0 Debtors 208 193 202 209 Associates & JV Inc 0 0 0 0 Other Current Assets 85 72 75 79 Net Interest (Exp)/Inc (62) (108) (167) (186) Total Assets 5,467 5,841 6,217 6,266 Exceptional Gain/(Loss) 0 0 0 0 Pre-tax Profit 510 203 111 57 ST Debt 383 338 338 638 Tax (160) (60) (32) (16) Other Current Liab 595 490 529 565 Minority Interest (10) (3) (2) (1) LT Debt 1,307 1,768 2,053 1,738 Preference Dividend 0 0 0 0 Other LT Liabilities 164 170 177 185 Net Profit 340 140 78 40 Shareholder’s Equity 2,978 3,033 3,075 3,096 Net Profit before Except. 340 140 78 40 Minority Interests 40 43 44 45 Net Pft (ex. BA gains) 340 140 78 40 Total Cap. & Liab. 5,467 5,841 6,217 6,266 EBITDA 799 573 567 567 Sales Gth (%) 26.6 (9.3) 5.6 4.6 Non-Cash Wkg. Capital (6) 49 41 31 EBITDA Gth (%) 79.6 (28.3) (1.0) (0.1) Net Cash/(Debt) (1,496) (1,844) (2,063) (2,119) Opg Profit Gth (%) 142.4 (45.6) (10.7) (12.7) Net Profit Gth (%) 185.7 (58.8) (44.6) (48.9) Effective Tax Rate (%) 31.4 29.5 28.8 28.8 Cash Flow Statement (Rp bn) Segmental Breakdown FY Dec 2014A 2015F 2016F 2017F FY Dec 2014A 2015F 2016F 2017F

Pre-Tax Profit 510 203 111 57 Revenues (Rp bn) Dep. & Amort. 226 262 289 324 CPO 2,719 2,415 2,560 2,675 Tax Paid (160) (60) (32) (16) PK 375 336 358 376 Assoc. & JV Inc/(loss) 0 0 0 0 Germinated Seeds 50 82 74 78 Chg in Wkg.Cap. 143 (4) 6 8 Others 99 108 113 119 Other Operating CF 0 0 0 0 Total 3,242 2,941 3,105 3,248 Net Operating CF 719 401 375 372 Capital Exp.(net) (1,081) (683) (600) (432) Other Invts.(net) 0 0 0 0 Invts in Assoc. & JV 0 0 0 0 Div from Assoc & JV 0 0 0 0 Other Investing CF (6) 11 33 14 Net Investing CF (1,088) (673) (568) (418) Div Paid (28) (85) (35) (19) Chg in Gross Debt 393 416 285 (15) Capital Issues 0 0 0 0 Other Financing CF 36 9 9 10 Net Financing CF 401 339 259 (25) Source: Company, DBS Bank, Bloomberg Finance L.P.

30

50

70

90

110

130

150

170

190

210

1,188.0

1,688.0

2,188.0

2,688.0

3,188.0

3,688.0


Relative IndexRp

Sampoerna Agro (LHS) Relative JCI INDEX (RHS)


Sime Darby

Sime Darby (HOLD RM7.78; SIME MK; Price Target : RM7.60 (Prev: RM7.40))

Forecasts and Valuation General Data FY Jun (RM m) 2014A 2015A 2016F 2017F Turnover 43,908 43,729 46,356 48,841 Issued Capital (m shrs) 6,211 EBITDA 5,375 4,520 5,065 5,462 Mkt. Cap (RMm/US$m) 48,323 / 11,331 Pre-tax Profit 4,228 3,003 3,168 3,562 Major Shareholders Net Profit 3,353 2,313 2,308 2,595 Skim Amanah Saham Bumiputera (%) 39.7 Net Pft (Pre Ex.) 3,089 2,313 2,308 2,595 Employees Provident Fund (%) 13.0 EPS (sen) 55.3 37.2 37.2 41.8 Permodalan Nasional Bhd (%) 8.5 EPS Pre Ex. (sen) 50.9 37.2 37.2 41.8 Free Float (%) 38.9 EPS Gth Pre Ex (%) (5) (27) 0 12 Avg. Daily Vol.(‘000) 3,683 Diluted EPS (sen) 55.3 37.2 37.2 41.8 Net DPS (sen) 36.1 18.6 18.6 20.9 Price Relative BV Per Share (sen) 471.4 488.7 507.2 530.4 PE (X) 14.1 20.9 20.9 18.6 PE Pre Ex. (X) 15.3 20.9 20.9 18.6 P/Cash Flow (X) 17.0 14.8 13.0 13.5 EV/EBITDA (X) 10.2 14.1 12.3 11.4 Net Div Yield (%) 4.6 2.4 2.4 2.7 P/Book Value (X) 1.7 1.6 1.5 1.5 Net Debt/Equity (X) 0.2 0.5 0.4 0.4 ROAE (%) 11.7 7.6 7.3 7.9 Earnings Rev (%): (2.9) (2.0) Consensus EPS (sen): 38.0 44.5 Income Statement (RM m) Balance Sheet (RM m) FY Jun 2014A 2015A 2016F 2017F FY Jun 2014A 2015A 2016F 2017F

Turnover 43,908 43,729 46,356 48,841 Net Fixed Assets 14,347 16,488 17,281 18,038 Cost of Goods Sold (40,748) (41,607) (43,753) (46,035) Invts in Associates & JVs 3,111 3,846 3,880 4,032 Gross Profit 3,160 2,121 2,603 2,806 Other LT Assets 9,085 15,463 13,833 14,012 Other Opng (Exp)/Inc 958 1,278 1,013 1,038 Cash & ST Invts 4,382 3,645 6,139 5,225 Operating Profit 4,119 3,399 3,616 3,845 Inventory 9,511 9,663 9,981 10,398 Other Non Opg (Exp)/Inc 0 0 0 0 Debtors 6,526 7,487 7,354 7,671 Associates & JV Inc 100 (122) 34 152 Other Current Assets 3,974 5,002 5,127 5,255 Net Interest (Exp)/Inc (254) (274) (483) (434) Total Assets 50,936 61,594 63,595 64,632 Exceptional Gain/(Loss) 263 0 0 0 Pre-tax Profit 4,228 3,003 3,168 3,562 ST Debt 3,072 6,324 7,689 8,451 Tax (708) (567) (744) (837) Other Current Liab 8,997 9,258 9,535 10,005 Minority Interest (168) (123) (115) (130) LT Debt 8,255 11,885 11,089 9,349 Preference Dividend 0 0 0 0 Other LT Liabilities 1,147 2,760 2,649 2,623 Net Profit 3,353 2,313 2,308 2,595 Shareholder’s Equity 28,589 30,355 31,506 32,947 Net Profit before Except. 2,826 2,313 2,308 2,595 Minority Interests 877 1,012 1,127 1,257 EBITDA 5,375 4,520 5,065 5,462 Total Cap. & Liab. 50,936 61,594 63,595 64,632 Sales Gth (%) (4.8) (0.4) 6.0 5.4 Non-Cash Wkg. Capital 11,014 12,894 12,928 13,320 EBITDA Gth (%) (8.7) (15.9) 12.0 7.8 Net Cash/(Debt) (6,946) (14,564) (12,638) (12,574) Opg Profit Gth (%) (8.3) (17.5) 6.4 6.3 Net Profit Gth (%) (9.4) (31.0) (0.2) 12.5 Effective Tax Rate (%) 16.7 18.9 23.5 23.5 Cash Flow Statement (RM m) Segmental Breakdown FY Jun 2014A 2015A 2016F 2017F FY Jun 2014A 2015A 2016F 2017F

Pre-Tax Profit 3,965 3,003 3,168 3,562 Revenues (RM m) Dep. & Amort. 1,156 1,243 1,414 1,465 Plantations 10,954 10,269 10,880 11,353 Tax Paid (708) (567) (744) (837) Property 2,792 3,455 3,801 4,162 Assoc. & JV Inc/(loss) (100) 122 (34) (152) Industrial 11,665 10,558 11,090 11,649 Chg in Wkg.Cap. (868) (1,880) (34) (392) Motor 17,745 18,646 19,708 20,721 Other Operating CF (673) 1,333 (61) (62) Others 752 801 877 957 Net Operating CF 2,772 3,254 3,708 3,584 Total 43,908 43,729 46,356 48,841 Capital Exp.(net) (2,303) (7,577) (2,239) (2,260) EBIT (RM m) Other Invts.(net) 238 (22) (27) (27) Plantations 1,905 1,181 1,554 1,634 Invts in Assoc. & JV 0 0 0 0 Property 529 929 912 984 Div from Assoc & JV 0 0 0 0 Industrial 998 512 539 567 Other Investing CF 830 (2,804) 25 (72) Motor 631 467 446 479 Net Investing CF (1,236) (10,403) (2,241) (2,359) Others 57 311 166 181 Div Paid (1,477) (2,192) (1,156) (1,154) Total 4,119 3,399 3,616 3,845 Chg in Gross Debt 1,242 6,882 2,190 (978) EBIT Margins (%) Capital Issues 306 1,665 0 0 Plantations 17.4 11.5 14.3 14.4 Other Financing CF (1,319) 57 (6) (6) Property 18.9 26.9 24.0 23.6 Net Financing CF (1,248) 6,412 1,027 (2,138) Industrial 8.6 4.9 4.9 4.9 Net Cashflow 288 (737) 2,494 (913) Motor 3.6 2.5 2.3 2.3 Total 9.4 7.8 7.8 7.9 Source: Company, DBS Bank, Bloomberg Finance L.P.

68

88

108

128

148

168

188

208

6.3

6.8

7.3

7.8

8.3

8.8

9.3

9.8

10.3

10.8


Relative IndexRM

Sime Darby (LHS) Relative KLCI INDEX (RHS)


TSH Resources

TSH Resources (HOLD RM1.81; TSH MK; Price Target : RM1.95 (Prev: RM2.00))

Forecasts and Valuation General Data FY Dec (RM m) 2014A 2015F 2016F 2017F Turnover 1,071 944 1,030 1,099 Issued Capital (m shrs) 1,356 EBITDA 235 218 239 258 Mkt. Cap (RMm/US$m) 2,454 / 575 Pre-tax Profit 168 157 170 187 Major Shareholders Net Profit 124 113 122 135 Aik Pen Tan (%) 12.4 Net Pft (Pre Ex.) 132 113 122 135 Tunas Lestari Sdn Bhd (%) 6.3 EPS (sen) 9.2 8.4 9.1 10.0 Embun Yakin Sdn Bhd (%) 5.6 EPS Pre Ex. (sen) 9.8 8.4 9.1 10.0 Free Float (%) 75.8 EPS Gth Pre Ex (%) 3 (14) 8 10 Avg. Daily Vol.(‘000) 434 Diluted EPS (sen) 9.2 8.4 9.1 10.0 Net DPS (sen) 2.5 2.1 2.3 2.5 Price Relative BV Per Share (sen) 88.0 93.9 100.9 108.6 PE (X) 19.7 21.5 19.9 18.1 PE Pre Ex. (X) 18.4 21.5 19.9 18.1 P/Cash Flow (X) 20.5 14.2 14.6 13.1 EV/EBITDA (X) 15.0 16.8 15.9 15.1 Net Div Yield (%) 1.4 1.2 1.3 1.4 P/Book Value (X) 2.1 1.9 1.8 1.7 Net Debt/Equity (X) 0.8 0.8 0.8 0.8 ROAE (%) 11.0 9.3 9.3 9.6 Earnings Rev (%): (14.6) (15.4) (17.5) Consensus EPS (sen): 8.4 10.6 12.4 Income Statement (RM m) Balance Sheet (RM m) FY Dec 2014A 2015F 2016F 2017F FY Dec 2014A 2015F 2016F 2017F

Turnover 1,071 944 1,030 1,099 Net Fixed Assets 1,740 1,955 2,170 2,353 Cost of Goods Sold (712) (654) (708) (745) Invts in Associates & JVs 147 155 160 168 Gross Profit 359 290 322 353 Other LT Assets 285 281 277 272 Other Opng (Exp)/Inc (175) (124) (138) (154) Cash & ST Invts 59 115 94 107 Operating Profit 184 166 183 200 Inventory 191 189 204 215 Other Non Opg (Exp)/Inc 0 0 0 0 Debtors 146 145 158 169 Associates & JV Inc 7 8 5 8 Other Current Assets 22 22 22 22 Net Interest (Exp)/Inc (15) (17) (19) (21) Total Assets 2,590 2,861 3,085 3,306 Exceptional Gain/(Loss) (8) 0 0 0 Pre-tax Profit 168 157 170 187 ST Debt 569 569 569 569 Tax (32) (30) (33) (38) Other Current Liab 137 135 145 152 Minority Interest (11) (13) (14) (15) LT Debt 467 647 754 849 Preference Dividend 0 0 0 0 Other LT Liabilities 128 128 128 128 Net Profit 124 113 122 135 Shareholder’s Equity 1,183 1,263 1,357 1,461 Net Profit before Except. 132 113 122 135 Minority Interests 106 119 133 148 EBITDA 235 218 239 258 Total Cap. & Liab. 2,590 2,861 3,085 3,306 Sales Gth (%) 5.2 (11.9) 9.2 6.7 Non-Cash Wkg. Capital 221 220 239 254 EBITDA Gth (%) 27.2 (7.0) 9.4 8.2 Net Cash/(Debt) (976) (1,102) (1,228) (1,311) Opg Profit Gth (%) 36.1 (10.1) 10.7 9.1 Net Profit Gth (%) (18.0) (8.5) 7.9 10.1 Effective Tax Rate (%) 19.4 19.4 19.8 20.2 Cash Flow Statement (RM m) Segmental Breakdown FY Dec 2014A 2015F 2016F 2017F FY Dec 2014A 2015F 2016F 2017F

Pre-Tax Profit 176 157 170 187 Revenues (RM m) Dep. & Amort. 51 53 56 59 Oil Palm Plantation 967 842 929 998 Tax Paid (32) (30) (33) (38) Wood Products 43 46 44 42 Assoc. & JV Inc/(loss) (7) (8) (5) (8) Cocoa 61 55 57 59 Chg in Wkg.Cap. 8 1 (19) (15) Total 1,071 944 1,030 1,099 Other Operating CF (76) 0 0 0 Net Operating CF 119 172 167 186 Capital Exp.(net) (274) (262) (265) (238) EBIT (RM m) Other Invts.(net) 89 0 0 0 Oil Palm Plantation 194 175 190 209 Invts in Assoc. & JV 0 0 0 0 Wood Products (6) (5) (4) (4) Div from Assoc & JV 0 0 0 0 Cocoa 3 3 3 3 Other Investing CF 8 0 0 0 Total 191 174 189 208 Net Investing CF (177) (262) (265) (238) Div Paid (31) (34) (28) (31) Chg in Gross Debt 98 181 106 95 EBIT Margins (%) Capital Issues 0 0 0 0 Oil Palm Plantation 20.1 20.8 20.5 20.9 Other Financing CF (4) 0 0 0 Wood Products (14.2) (9.9) (9.6) (9.3) Net Financing CF 63 147 78 65 Cocoa 5.0 5.0 5.0 5.0 Net Cashflow 5 57 (20) 12 Total 17.8 18.4 18.3 18.9 Source: Company, AllianceDBS, Bloomberg Finance L.P.

85

105

125

145

165

185

205

0.8

1.3

1.8

2.3

2.8


Relative IndexRM

TSH Resources (LHS) Relative KLCI INDEX (RHS)


Wilmar International

Wilmar International (BUY; S$2.61; WIL SP; Price Target : S$3.70 (Prev: S$3.80))

Forecasts and Valuation General Data FY Dec (US$ m) 2014A 2015F 2016F 2017F Turnover 43,085 39,796 42,469 45,654 Issued Capital (m shrs) 6,337 EBITDA 2,185 2,181 2,423 2,553 Mkt. Cap (S$m/US$m) 16,484 / 11,758 Pre-tax Profit 1,538 1,422 1,475 1,579 Major Shareholders Net Profit 1,156 1,055 1,090 1,163 Kuok Brothers Sdn Bhd (%) 18.4 Net Pft (Pre Ex.) 1,221 1,055 1,090 1,163 Archer-Daniels-Midland Co (%) 18.1 EPS (S cts) 25.3 23.1 23.9 25.5 Khoon Hong Kuok (%) 12.0 EPS Pre Ex. (S cts) 26.7 23.1 23.9 25.5 Free Float (%) 31.9 EPS Gth Pre Ex (%) (5) (14) 3 7 Avg. Daily Vol.(‘000) 7,167 Diluted EPS (S cts) 25.3 23.1 23.9 25.5 Net DPS (S cts) 8.4 4.6 4.8 5.1 Price Relative BV Per Share (S cts) 339.2 355.1 357.1 377.6 PE (X) 10.3 11.3 10.9 10.2 PE Pre Ex. (X) 9.7 11.3 10.9 10.2 P/Cash Flow (X) 7.3 4.3 9.5 9.6 EV/EBITDA (X) 11.9 11.3 10.2 9.7 Net Div Yield (%) 3.2 1.8 1.8 2.0 P/Book Value (X) 0.8 0.7 0.7 0.7 Net Debt/Equity (X) 0.8 0.7 0.7 0.6 ROAE (%) 7.6 6.7 6.7 6.9 Earnings Rev (%): (7.9) (8.9) (8.9) Consensus EPS (S cts): 26.6 29.7 32.0 Income Statement (US$ m) Balance Sheet (US$ m) FY Dec 2014A 2015F 2016F 2017F FY Dec 2014A 2015F 2016F 2017F

Turnover 43,085 39,796 42,469 45,654 Net Fixed Assets 9,477 9,704 9,779 9,730 Cost of Goods Sold (39,268) (36,246) (38,645) (41,582) Invts in Associates & JVs 2,153 2,211 2,278 2,348 Gross Profit 3,817 3,549 3,823 4,072 Other LT Assets 7,412 7,583 6,560 6,646 Other Opng (Exp)/Inc (2,373) (2,163) (2,311) (2,489) Cash & ST Invts 9,139 8,574 9,736 11,137 Operating Profit 1,444 1,386 1,512 1,583 Inventory 6,581 6,370 6,792 7,308 Other Non Opg (Exp)/Inc 0 0 0 0 Debtors 8,040 6,976 7,445 8,003 Associates & JV Inc 81 58 66 71 Other Current Assets 756 756 756 756 Net Interest (Exp)/Inc 77 (23) (104) (74) Total Assets 43,558 42,174 43,345 45,929 Exceptional Gain/(Loss) (65) 0 0 0 Pre-tax Profit 1,538 1,422 1,475 1,579 ST Debt 15,204 15,977 17,051 18,329 Tax (314) (301) (312) (334) Other Current Liab 3,993 3,684 3,889 4,142 Minority Interest (68) (66) (73) (83) LT Debt 7,158 4,480 4,480 4,480 Preference Dividend 0 0 0 0 Other LT Liabilities 792 832 562 590 Net Profit 1,156 1,055 1,090 1,163 Shareholder’s Equity 15,495 16,219 16,309 17,249 Net Profit before Except. 1,221 1,055 1,090 1,163 Minority Interests 916 982 1,055 1,138 EBITDA 2,185 2,181 2,423 2,553 Total Cap. & Liab. 43,558 42,174 43,345 45,929 Sales Gth (%) (2.3) (7.6) 6.7 7.5 Non-Cash Wkg. Capital 11,384 10,418 11,104 11,924 EBITDA Gth (%) (7.8) (0.2) 11.1 5.4 Net Cash/(Debt) (13,224) (11,883) (11,794) (11,672) Opg Profit Gth (%) (13.0) (4.0) 9.1 4.7 Net Profit Gth (%) (12.3) (8.8) 3.3 6.7 Effective Tax Rate (%) 20.4 21.2 21.2 21.2 Cash Flow Statement (US$ m) Segmental Breakdown FY Dec 2014A 2015F 2016F 2017F FY Dec 2014A 2015F 2016F 2017F

Pre-Tax Profit 1,538 1,422 1,475 1,579 Revenues (US$ m) Dep. & Amort. 660 737 844 900 Tropical oils 21,805 17,883 18,514 19,833 Tax Paid (314) (301) (312) (334) Oilseeds & grains 21,417 19,527 21,198 22,966 Assoc. & JV Inc/(loss) (81) (58) (66) (71) Sugar 3,792 4,004 4,332 4,540 Chg in Wkg.Cap. (201) 957 (691) (830) Others 2,377 2,374 2,373 2,373 Other Operating CF 32 (1) (6) (2) Elimination (6,307) (3,992) (3,950) (4,058) Net Operating CF 1,634 2,755 1,244 1,243 Total 43,085 39,796 42,469 45,654 Capital Exp.(net) (1,350) (1,063) (978) (913) EBIT (US$ m) Other Invts.(net) 0 0 0 0 Tropical oils 971 728 758 790 Invts in Assoc. & JV 0 0 0 0 Oilseeds & grains 315 551 637 675 Div from Assoc & JV 0 0 0 0 Sugar 96 97 107 109 Other Investing CF (12) (85) (97) (109) Others 20 25 25 25 Net Investing CF (1,362) (1,148) (1,075) (1,022) Unallocated costs (15) (14) (14) (15) Div Paid (383) (330) (213) (222) Total 1,387 1,386 1,512 1,583 Chg in Gross Debt (3,833) (1,905) 1,073 1,279 EBIT Margins (%) Capital Issues 0 0 0 0 Tropical oils 4.5 4.1 4.1 4.0 Other Financing CF (393) (24) 42 28 Oilseeds & grains 1.5 2.8 3.0 2.9 Net Financing CF (4,609) (2,259) 902 1,085 Sugar 2.5 2.4 2.5 2.4 Net Cashflow (4,336) (652) 1,071 1,305 Others 0.8 1.0 1.0 1.0 Total 3.2 3.5 3.6 3.5 Source: Company, DBS Bank, Bloomberg Finance L.P., Wilmar Annual Report 2014

44

64

84

104

124

144

164

184

204

2.3

2.8

3.3

3.8

4.3

4.8

5.3

5.8

6.3


Relative IndexS$

Wilmar International (LHS) Relative STI INDEX (RHS)



DBS Bank recommendations are based an Absolute Total Return* Rating system, defined as follows:

STRONG BUY (>20% total return over the next 3 months, with identifiable share price catalysts within this time frame)

BUY (>15% total return over the next 12 months for small caps, >10% for large caps)

HOLD (-10% to +15% total return over the next 12 months for small caps, -10% to +10% for large caps)

FULLY VALUED (negative total return i.e. > -10% over the next 12 months)

SELL (negative total return of > -20% over the next 3 months, with identifiable catalysts within this time frame)

Share price appreciation + dividends GENERAL DISCLOSURE/DISCLAIMER This report is prepared by DBS Bank Ltd. This report is solely intended for the clients of DBS Bank Ltd and DBS Vickers Securities (Singapore) Pte Ltd, its respective connected and associated corporations and affiliates (collectively, the “DBS Vickers Group”) only and no part of this document may be (i) copied, photocopied or duplicated in any form or by any means or (ii) redistributed without the prior written consent of DBS Bank Ltd. The research set out in this report is based on information obtained from sources believed to be reliable, but we (which collectively refers to DBS Bank Ltd., its respective connected and associated corporations, affiliates and their respective directors, officers, employees and agents (collectively, the “DBS Group”)) do not make any representation or warranty as to its accuracy, completeness or correctness. Opinions expressed are subject to change without notice. This document is prepared for general circulation. Any recommendation contained in this document does not have regard to the specific investment objectives, financial situation and the particular needs of any specific addressee. This document is for the information of addressees only and is not to be taken in substitution for the exercise of judgement by addressees, who should obtain separate independent legal or financial advice. The DBS Group accepts no liability whatsoever for any direct, indirect and/or consequential loss (including any claims for loss of profit) arising from any use of and/or reliance upon this document and/or further communication given in relation to this document. This document is not to be construed as an offer or a solicitation of an offer to buy or sell any securities. The DBS Group, along with its affiliates and/or persons associated with any of them may from time to time have interests in the securities mentioned in this document. The DBS Group may have positions in, and may effect transactions in securities mentioned herein and may also perform or seek to perform broking, investment banking and other banking services for these companies. Any valuations, opinions, estimates, forecasts, ratings or risk assessments herein constitutes a judgment as of the date of this report, and there can be no assurance that future results or events will be consistent with any such valuations, opinions, estimates, forecasts, ratings or risk assessments. The information in this document is subject to change without notice, its accuracy is not guaranteed, it may be incomplete or condensed and it may not contain all material information concerning the company (or companies) referred to in this report. The valuations, opinions, estimates, forecasts, ratings or risk assessments described in this report were based upon a number of estimates and assumptions and are inherently subject to significant uncertainties and contingencies. It can be expected that one or more of the estimates on which the valuations, opinions, estimates, forecasts, ratings or risk assessments were based will not materialize or will vary significantly from actual results. Therefore, the inclusion of the valuations, opinions, estimates, forecasts, ratings or risk assessments described herein IS NOT TO BE RELIED UPON as a representation and/or warranty by the DBS Group (and/or any persons associated with the aforesaid entities), that: (a) such valuations, opinions, estimates, forecasts, ratings or risk assessments or their underlying assumptions will be achieved, and (b) there is any assurance that future results or events will be consistent with any such valuations, opinions, estimates, forecasts, ratings or risk

assessments stated therein. Any assumptions made in this report that refers to commodities, are for the purposes of making forecasts for the company (or companies) mentioned herein. They are not to be construed as recommendations to trade in the physical commodity or in the futures contract relating to the commodity referred to in this report. DBS Vickers Securities (USA) Inc ("DBSVUSA")"), a U.S.-registered broker-dealer, does not have its own investment banking or research department, nor has it participated in any investment banking transaction as a manager or co-manager in the past twelve months. ANALYST CERTIFICATION The research analyst primarily responsible for the content of this research report, in part or in whole, certifies that the views about the companies and their securities expressed in this report accurately reflect his/her personal views. The analyst also certifies that no part of his/her compensation was, is, or will be, directly, or indirectly, related to specific recommendations or views expressed in this report. As of the date the report is published,the analyst and his/her spouse and/or relatives who are financially dependent on the analyst, do not hold interests in the securities recommended in this report (“interest” includes direct or indirect ownership of securities). COMPANY-SPECIFIC / REGULATORY DISCLOSURES

1. DBS Bank Ltd., DBS Vickers Securities (Singapore) Pte Ltd (“DBSVS”), their subsidiaries and/or other affiliates do not have a proprietary position in the securities recommended in this report as of 31 Aug 2015 except Indofood Agri Resources, Golden Agri Resources, Wilmar International.

2. DBS Bank Ltd., DBSVS, DBSVUSA, their subsidiaries and/or other affiliates may beneficially own a total of 1% of any class of common equity securities of the company mentioned as of 31 Aug 2015

3.

Compensation for investment banking services: DBS Bank Ltd., DBSVS, DBSVUSA, their subsidiaries and/or other affiliates may have received compensation, within the past 12 months, and within the next 3 months may receive or intends to seek compensation for investment banking services from the company mentioned.



DBSVUSA does not have its own investment banking or research department, nor has it participated in any investment banking transaction as a manager or co-manager in the past twelve months. Any US persons wishing to obtain further information, including any clarification on disclosures in this disclaimer, or to effect a transaction in any security discussed in this document should contact DBSVUSA exclusively.

RESTRICTIONS ON DISTRIBUTION General 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.

Australia This report is being distributed in Australia by DBS Bank Ltd. (“DBS”) or DBS Vickers Securities (Singapore) Pte Ltd (“DBSVS”), both of which are exempted from the requirement to hold an Australian Financial Services Licence under the Corporation Act 2001 (“CA”) in respect of financial services provided to the recipients. Both DBS and DBSVS are regulated by the Monetary Authority of Singapore under the laws of Singapore, which differ from Australian laws. Distribution of this report is intended only for “wholesale investors” within the meaning of the CA.

Hong Kong This report is being distributed in Hong Kong by DBS Vickers (Hong Kong) Limited which is licensed and regulated by the Hong Kong Securities and Futures Commission.

Indonesia This report is being distributed in Indonesia by PT DBS Vickers Securities Indonesia.

Malaysia This report is distributed in Malaysia by AllianceDBS Research Sdn Bhd ("ADBSR") (formerly known as HwangDBS Vickers Research Sdn Bhd). Recipients of this report, received from ADBSR are to contact the undersigned at 603-2604 3333 in respect of any matters arising from or in connection with this report. In addition to the General Disclosure/Disclaimer found at the preceding page, recipients of this report are advised that ADBSR (the preparer of this report), its holding company Alliance Investment Bank Berhad, their respective connected and associated corporations, affiliates, their directors, officers, employees, agents and parties related or associated with any of them may have positions in, and may effect transactions in the securities mentioned herein and may also perform or seek to perform broking, investment banking/corporate advisory and other services for the subject companies. They may also have received compensation and/or seek to obtain compensation for broking, investment banking/corporate advisory and other services from the subject companies.

Wong Ming Tek, Executive Director, ADBSR

Singapore This report is distributed in Singapore by DBS Bank Ltd (Company Regn. No. 196800306E) or DBSVS (Company Regn No. 198600294G), both of which are Exempt Financial Advisers as defined in the Financial Advisers Act and regulated by the Monetary Authority of Singapore. DBS Bank Ltd and/or DBSVS, may distribute reports produced by its respective foreign entities, affiliates or other foreign research houses pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the report is distributed in Singapore to a person who is not an Accredited Investor, Expert Investor or an Institutional Investor, DBS Bank Ltd accepts legal responsibility for the contents of the report to such persons only to the extent required by law. Singapore recipients should contact DBS Bank Ltd at 6327 2288 for matters arising from, or in connection with the report.

Thailand This report is being distributed in Thailand by DBS Vickers Securities (Thailand) Co Ltd. Research reports distributed are only intended for institutional clients only and no other person may act upon it.

United Kingdom

This report is being distributed in the UK by DBS Vickers Securities (UK) Ltd, who is an authorised person in the meaning of the Financial Services and Markets Act and is regulated by The Financial Conduct Authority. Research distributed in the UK is intended only for institutional clients.

Dubai

This research report is being distributed in The Dubai International Financial Centre (“DIFC”) by DBS Bank Ltd., (DIFC Branch) having its office at PO Box 506538, 3rd Floor, Building 3, East Wing, Gate Precinct, Dubai International Financial Centre (DIFC), Dubai, United Arab Emirates. DBS Bank Ltd., (DIFC Branch) is regulated by The Dubai Financial Services Authority. This research report is intended only for professional clients (as defined in the DFSA rulebook) and no other person may act upon it.

United States

Neither this report nor any copy hereof may be taken or distributed into the United States or to any U.S. person except in compliance with any applicable U.S. laws and regulations. It is being distributed in the United States by DBSVUSA, which accepts responsibility for its contents. Any U.S. person receiving this report who wishes to effect transactions in any securities referred to herein should contact DBSVUSA directly and not its affiliate.

Other jurisdictions

In any other jurisdictions, except if otherwise restricted by laws or regulations, this report is intended only for qualified, professional, institutional or sophisticated investors as defined in the laws and regulations of such jurisdictions.

DBS Bank Ltd.

12 Marina Boulevard, Marina Bay Financial Centre Tower 3 Singapore 018982 Tel. 65-6878 8888

Company Regn. No. 196800306E

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