July 2014

This Research has been prepared and issued by BBY Ltd and remains the property of BBY Ltd. No material contained in this Research may be reproduced or distributed without prior written approval of BBY, except as allowed by the Copyright Act. This Research is current at the date of publishing. For updates or further information regarding this research, please contact your advisor. BBY does or seeks to undertake business with companies covered in its research and therefore, Investors should consider this report as only a single factor in making their investment decisions. For explanations regarding ratings and other important disclosures, please refer to the disclosure section at the end of this document.

In our July edition of STOCKscan, we inform clients about our upcoming Managed Discretionary Accounts (MDA) service, which launched in New Zealand and will soon be launching in Australia. Also covered in this edition is an excerpt about the continuing success of BBY’s Disruptive Technology Lunch Series, which showcases some of the best and brightest of emerging technology companies. Further included in this month’s STOCKscan are insights on why we have confidence in gold, a research update on Health Care front-runner Regeneus Limited (ASX:RGS), as well as key highlights from our Emerging Companies Conference.

Also included in this report: ♦ Performance snapshot of our High Conviction Model Portfolio ♦ BBY’s top calls for June 2014 ♦ Stock profiles of companies mentioned are attached at the end of this document.

Launch of BBY Managed portfolio is to outperform the capital return of the ASX 200 Accumulation Index. Discretionary Accounts Service Quantitative Momentum portfolio: provides exposure to A Managed Discretionary Account (MDA) is a managed 5-10 of the current strongest performing stocks listed on investment solution that is tailored to your investment the Australian Stock Exchange (ASX). Based on the BBY needs. Investment decisions are made at the MDA HomeTrader Quantitative Momentum product, this actively manager’s discretion using the client’s contributions without managed portfolio is focused on providing capital growth. prior reference to the client for each transaction. The objective of this model portfolio is to outperform the BBY’s MDA service takes the weight off the shoulders of capital return of the ASX 200 Accumulation Index. time-poor clients. Instead of being burdened with the day- to-day management of your investment portfolio, BBY can BBY Disruptive Technology Lunch exercise professional management at your discretion. An Series MDA account allows clients to invest in fast-growing In early June, BBY launched its “Disruptive Technology” markets without having to commit the personal time and lunch series at its head office in Sydney. The Disruptive attention required to trade these markets themselves. Technology lunch series showcases the best and brightest Deciding on your MDA investment strategy is entirely of Australia’s emerging technology companies and the dependent on your personal situation. In consultation, series is a demonstration of BBY’s commitment to high BBY’s MDA Operators will assess your risk profile, as well growth companies. as your investment objectives. This will enable us to On Thursday 3 July, BBY held the third lunch of the series provide you with an MDA strategy solution that serves your and yet again, it was a great success attracting a full-house best interests. of Australian fund managers, high net worth advisers and exciting technology entrepreneurs. BBY has already launched an MDA service for New Zealand clients and we are soon to launch another three New technology is constantly being introduced to the MDA services; our MDA Quantitative Momentum portfolio market on a daily basis and there is no better way to service, as well as income and growth portfolio solutions: support tech start-ups than by helping them access financial markets. Income model portfolio: provides exposure to 10-25 blue chip high yield stocks listed on the Australian Stock BBY Executive Chairman, Glenn Rosewall comments, “BBY is working hard to facilitate new investment Exchange (ASX). This portfolio’s strategy is focused on opportunities by showcasing these emerging technology providing a steady source of income with an emphasis on companies. The spectacular turnout at all three lunches franking credits. The objective of this model portfolio is to demonstrates that our efforts are paying off and investors outperform the income return of the ASX 200 Accumulation are moving out of their comfort zones to become a part of Index. the future. This turnout has also in fact prompted us to Growth model portfolio: provides exposure to 10-25 blue expand the lunch series to our Melbourne office.” chip high growth stocks listed on the Australian Stock BBY’s next Disruptive Technology Lunch will be held in Exchange (ASX). This portfolio’s strategy is focused on Sydney on Thursday 17th July 2014 with Digivizer, providing capital growth. The objective of this model Expert360 and Local Fixer.

bby.com.au July 2014

Trade Idea: Buy Gold might ultimately find themselves ‘behind the curve’ in fighting an inflation outbreak. Graham Parlane, Associate Director - Markets, BBY (NZ)

Limited recommended buying gold on 11 June 2014; Tim Sholl, Senior Client Advisor at BBY confirmed ♦ I get the impression that right now Gold is widely Graham’s trade idea by issuing a trade alert on 26 June to unloved. We have large numbers of clients with well Buy XAU/USD. Tim’s recommendation and targets are as documented expectations that Gold can be worth follows; US$3,000-5,000 in time due to the experimental monetary policies of the world’s major central banks (in ♦ The price of Gold has moved from lows at the turn of response to the GFC) ultimately causing inflation. Over the century of around USD$250 to reach record highs the last 6 months we have seen almost no interest to of USD$1920 in 2011 as market experienced the Tech assume long Gold (or Silver) positions despite this Wreck, September 11 attacks, the second invasion of overall sentiment bias. Iraq , the GFC and finally the near breakup of Europe. ♦ Now we can only speculate as to what might drive the ♦ Since 2011, the Gold price has fallen to the USD$1180 precious metals higher. Perhaps the fact that the level twice as hopes for a recovery in the world European Central Bank doesn’t pay interest anymore economy and the US Dollar have increased as central means there is no lost opportunity in owning Gold. banks continue to flood the world with cash in Despite recent selling of Gold, based on the notion continued Quantitative Easing programs. that the U.S. will raise rates in the future making gold ♦ Expected inflation from these huge QE programs has less attractive is wrong? Instead perhaps Gold may not yet emerged which has helped to keep Gold in a rise under rising U.S. interest rate yields because range from US$1180 to US$1430. those yields are responding to new inflation pressures which could be the seeds of an era of rampant ♦ I am expecting the USD to remain weak and for inflation. We cannot know (yet), but various technical inflation to begin to rise as economic growth returns to factors abound to suggest buying interest down at Europe , Japan and the US. these levels is emerging”. ♦ Conflict in the Middle East, Ukraine and the South ♦ As long as I have been studying Gold the contention China Sea could also boost Gold as investors turn to from long standing analysts has always been that safe haven assets. mining stocks rise before the price of spot gold does. ♦ I am looking for Gold to break the 2 year downtrend The suggestion being that the industry insiders line at USD$1320 and move up to USD$1500 , the understand what market forces are apparent and thus 200 week moving average and ultimately for it to test they buy the asset they have most knowledge over; USD$1600 , the long term downtrend line over the their companies. Add to that the fact that Gold miners’ next 12 months. margins increase at an exponential rate compared to the rise in gold itself and you have a tasty recipe. ♦ This trade will be placed in the BBY Online Trading Platform through a ‘Forex Trade’ ticket. Graham provided an update on this view on 20 June following a jump in the metals market on 19 June; For more information, speak to your BBY advisor, or ♦ There are numerous theories as to why the metals call Client Sales & Solutions on 1800 551 212 jumped so strongly overnight. We now know the Silver market had assumed record ‘short’ positioning last month as per official U.S data http://goldnews.bullionvault.com/silver-gold- 060920141 so perhaps it was simply a short covering rally on the Fed inspired weaker USD. ♦ U.S. President Obama last night confirmed that the U.S. won’t be going back in on the ground to Iraq so perhaps the market fears a worsening in conditions over that way. ♦ Neither view can be discounted, but my favoured view is to do with U.S. inflation. Yesterday the market went into the Fed decision expecting the Fed to at least give a nod to the recent higher U.S. inflation readings. They didn’t, instead telling the market rates will stay low for a longer than usual time. I suspect that what we are seeing is now the first expression of fears that the Fed

STOCKSCAN July 2014 2 bby.com.au July 2014

Healthcare Front-Runner Regeneus banks, securities and operators. NNW’s operations extend to value-added applications, data acquisition, data mining, Ltd (ASX:RGS) precision marketing and other areas of expertise. With over BBY successfully floated Regeneus Ltd (ASX:RGS) to the 4.3 billion bank cards on issue in China as at December ASX at $0.25 on 17 September 2013. Less than a year on 2013, NNW is targeting a very large and robust market. from the IPO, RGS is returning over 50% for those NNW has over 50 leading business partners connecting investor’s that took part in the IPO that was led by BBY. over 155 leading merchants and 30 million Registered Despite RGS running an operating loss of $3.6 million in Users. the six months to end 2012, BBY always has the courage ♦ Market cap: ~A$697 million (COB 9 July 2014) to look at stories with a fresh perspective. We firmly belief ♦ Major opportunities: in the growth potential in RGS, and we are proud to have o High barrier to entry market: NNW has access to a fuelled the company’s impressive turnaround. market that has high commercial, regulatory and By responding to unmet medical needs in human and technical barriers to entry. veterinary health, RGS has found a niche in the global o 30 year exclusive partnership with Handpay: market. On 8 July 2014, RGS announced an agreement Handpay is China’s 3rd largest third party mobile with Northern Sydney Local Health District for the exclusive payment gateway service provider. Handpay has worldwide rights for a new personalised therapeutic human given NNW access to over 300 million mobile cancer vaccine. RGS is developing a treatment for cancer banking customers; China’s largest consumer in dogs, Kvax, which uses the same technology, giving “big data” database. them a competitive advantage in developing and commercialising the new human cancer vaccine. As a o Position in China’s growing m-commerce market: result of this breakthrough announcement, BBY’s 12-month NNW provides the dominant B2B2C customer share price target was raised from $0.77 to $0.83, while acquisition model for the Chinese market; a retaining a SPECULATIVE BUY recommendation. group of consumers that are fast adopters of technology. The Internet represents ~47% of total Despite only being founded in 2007, RGS has secured a media consumption time in China versus ~28% in strong foothold in the regenerative medicine and cell technology sector. BBY is proud to have played such a the US. unique and pivotal role in generating local and global IPO interest for a front-runner in the global Healthcare sector. Australian Pharmaceutical Industries Limited (ASX:API) For further information on RGS, please contact BBY Australian Pharmaceutical Industries (API) is a 103-year- Director, Healthcare and Industrials Research, Dennis old company with an innovative retail offering. API is one of Hulme on +612 9226 0083. the leading service providers to the pharmacy industry in Australia and today has a relationship with more than 4000 independent pharmacies. The services include wholesale Emerging Companies Conference product delivery, retail services, marketing programs and Feedback business advisory services. The company has product manufacturing capabilities and it is a niche player in over- BBY’s Annual Emerging Companies Conference offers a the-counter pharmaceuticals and toiletries, which supply unique opportunity for the investment community to interact the Australian and New Zealand markets. with a handful of Australia’s most growth-driven small-cap ♦ Market cap: ~A$286 million (COB 9 July 2014) companies. This Conference kicked off on Tuesday 24th ♦ Major opportunities: June 2014 at BBY’s Sydney Head Office and the presenters then headed down south to close the o More than 100 customers in key brand and Conference at BBY’s Melbourne Office the following day. programs: Priceline Pharmacy, Soul Pattinson, Investors and fund managers heard first-hand from CEO’s Pharmacist Advice and Club Premium. about their business strategies, their business environment o Australia’s leading pharmaceutical distributor by and how investors can seize the small-cap advantage. volume: nine distribution centres nationally o Priceline retail store brand is a compelling The conference notes on each of the presenting companies are as follows. proposition for pharmacists: API owns and operates the Priceline retail stores; Australia’s 99 Wuxian Limited (ASX:NNW) leading health and beauty brand. API’s same 99 Wuxian Limited (NNW) utilises wireless technology to store growth in 3Q14 was second only to act as a secure payment gateway in online transactions Bunnings. undertaken in China. NNW focuses on the provision of o Market share growth: competitive pricing, superior online financial and operational services for domestic service, professional staff programs and the

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Sisters Club are rapidly growing API’s market o Outsourcing trends: Growing market trend to share. outsource non-core services such as energy o Future in New Zealand: API has capacity to management and sustainability. supply broader product and private label offerings o EAX is an unrivalled service offering and a into API aligned channels in NZ. foundation for organic growth: Estimated accessible market is ~75,000 large market sites Affinity Education Group Limited (ASX:AFJ) and ~675,000 small sites. Affinity Education (AFJ) is the second largest listed childcare operation within Australia. Through the ownership Clearview Wealth Limited (ASX:CVW) and management of its child care centres, AFJ focus on ClearView (CVW) has been helping Australians invest their providing the highest standard, localised education money for over 20 years. CVW specialises in providing programs and care solutions for children. AFJ successfully financial advice to help clients grow assets and protect listed on the ASX on 9 December 2013 and operates a their families. Together with providing quality financial geographically diversified portfolio across Australia; centres advice, CVW offers a comprehensive range of investment, are located in QLD, NSW, VIC, WA and NT. superannuation and retirement options, as well as life ♦ Market cap: ~A$191 million (COB 9 July 2014) insurance cover to help ensure people are financially ♦ Major opportunities: prepared for the future. CVW’s growing market, focused o Strong acquisition pipeline: 119 child care centres business, and experienced team has been generating ‐ 90 owned, 11 managed and 18 subject to momentum, increasing sales in life premium by contract (8290 places). AFJ will continue to make approximately $20m and driving an increase in wealth acquisitions at a measured pace and pay no funds under management. more than 5.5 EBIT. ♦ Market cap: ~A$441 million (COB 9 July 2014) o Strong organic growth: Increasing revenue by ♦ Major opportunities: implementing targeted marketing strategies and o Non-bank owned business model: larger reducing costs by lowering and leveraging buying institutions (particularly bank-owned) in the retail power. life insurance market often have legacy issues. As a non-bank owned life insurer with life and Energy Action Limited (ASX:EAX) wealth licences, CVW is a differentiated business Energy Action (EAX) is Australia’s leading energy with limited legacy issues. management company. EAX offers comprehensive buying o Position in a growing market: the life insurance and management services aimed at reducing energy tariffs market has been growing at a 12% compounded and optimising usage. EAX uses the Australian Energy annual growth rate over the past 10 years. This Exchange, a reverse auction platform, that allows energy has meant CVW’s life, wealth, and planning suppliers to competitively bid against one another to supply businesses have all been increasing. an organisation’s energy – with a best fit contract secured in around 15 minutes. This unique service has secured VMob Group Limited (NZX:VML) energy contracts in excess of A$5 billion and delivered VMob (VML) uses mobile technology to drive more foot millions of dollars’ worth of savings for Australian traffic through brick and mortar stores. VML is a leader in organisations. mobile marketing and utilises mobile vouchers to increase ♦ Market cap: ~A$79 million (COB 9 July 2014) customer traffic and mobile loyalty to deepen customer ♦ Major opportunities: relationships. VML has a global award winning cloud o EAX created the market for online reverse software and sells its services using the SaaS model. auctions for electricity: All major energy retailers ♦ Market cap: ~A$16 million (COB 9 July 2014) competitively bid on the platform for customers ♦ Major opportunities: energy needs. o Improved redemption rates: VML added o Broker market is fragmented: Consolidation personalisation to mobile vouchers for a global opportunity – EAX has ~8% market share. ‘quick service restaurant’, increasing redemption o Energy contract renewals: 77% of electricity rates by more than 700%. contracts will be up for renewal between now and o Launch of McDonalds App in Netherlands: within the end of 2015 because uncertainty concerning four weeks of the app launch, there had been the carbon tax has seen contracts not renewed one million downloads. VML’s proven success past 2015. This is an opportunity for EAX to win with international campaigns for retail giants is market share. rapidly aiding its growth.

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Shine Corporate Limited (ASX:SHJ) Shine Corporate Limited (SHJ) is Australia’s third largest plaintiff litigation firm that was founded in 1976. SHJ’s legal services include personal injury litigation and damages- based plaintiff litigation. All services are offered as “no-win- no-fee” services. ♦ Market cap: ~A$402 million (COB 9 July 2014) ♦ Major opportunities: o Strategic business focus on damages litigation. o Acquisition of two damage-based litigation firms: a testament to SHJ’s strategic business focus on damage-based litigation and their growth- orientated business structure. o Tactical outlook: SHJ plans to seize further growth opportunities in the short to medium term including brand execution, acquisitions and potential expansion into the UK.

Soliton Holding (Unlisted) Soliton Holding Limited was launched in 2012 as a cloud- based, cross-device enabled digital music streaming service. Soliton provides customers with instant access to over 2 million songs and music videos, licensed from record labels. Combined with this is a voice search function as well as a social networking platform on which customers can share songs and follow their friend’s favourites. Furthermore, Soliton provides a live streaming service, which will provide supply to the unfilled demand in streaming live concerts. ♦ Market cap: unlisted ♦ Major opportunities: o Innovative business platform: Soliton has created value through its exclusive self-owned content, changing the usual mode of content licensing to reduce net content costs. o Differentiated business model: Subscription-based digital music models will not work because the music labels take up to 70% of revenue. Soliton intends to create content with an end-to-end solution. o Meeting unfulfilled demand: differentiating itself from other businesses through the streaming of live concerts, eventually producing its own concerts and music related events. o Monetisation is expected to occur by way of advertising and pay per download (for enhanced content without advertising).

STOCKSCAN July 2014 5 bby.com.au July 2014

BBY High Conviction (HC) Model Portfolio has an Annual compound return of 14.1%

Estimates based on the closing price on 10 July 2014

BBY’s HC Model Portfolio is a selection of high-potential stocks that are endorsed by BBY analysts. BBY’s approach to this portfolio is systematic and logical, focussing on opportunities with the highest expected return. HC Model Portfolios often exhibit significant volatility when compared to broad index benchmarks such as the ASX300. However, BBY’s Annual compound return of 14.3% has far exceeded the 5.0% Annual compound return of the ASX300 over the past six financial years. The best performing ASX stock in the HC Model Portfolio during FY14 was G8 Education (ASX:GEM), which achieved a strong growth of 101.1%, mainly due to management’s strong track record in acquiring and integrating centres. The next best performing stock was Slater & Gordon (ASX:SGH) which recorded growth of 84.9%, closely followed by Seek Limited (ASX:SEK) which recorded 84.1% growth.

BBY High Conviction (HC) Model Portfolio Top Five Performers Rank Ticker Top Five Performers FY14 Return (%) 1 GEM G8 Education Limited 101.5 2 SGH Slater & Gordon Limited 84.9 3 SEK Seek Limited 84.1 4 RGS Regeneus Ltd 77.4 5 BCI BC Iron Limited 75.5

STOCKSCAN July 2014 6 bby.com.au July 2014

The following tables consist of the June’s performance of BBY’s top calls Best Bullish Calls

Date of Current Target Current Latest Jun/2014 Ticker Company Name REC Price Price Rating Up/Down Comments XJO S&P/ASX 200 -1.8% The company's key assets are located in the oil prone LNR Lonestar Reso Ltd Buy $ 0.35 $ 0.45 19 May 2014 57.9% w indow of the Eagle Ford w hich is one of the premier US unconventional plays. Value recognition w ill come w ith clearer guidance at Mt SLR Silver Lake Resource Buy $ 0.80 $ 0.51 28 Feb 2014 50.0% Monger, and delivery to it. OMH OM Holdings Limited Buy $ 0.65 $ 0.40 18 Jun 2014 43.6% Upgrade to the asset base underw ay and global recovery.

BCK Brockman Mining Ltd Buy $ 0.15 $ 0.06 10 Apr 2014 27.9% Heading dow n into a critical period in terms of iron ore prices and developments in the Pilbara infrastructure story Harvests substantial value and sw aps a long dated call KAR Karoon Gas Australia Buy $ 6.00 $ 3.07 03 Jun 2014 24.8% option on capex heavy Brow se LNG for nearer term oil monetisation in offshore Brazil. AOK AusTex Oil Limited Buy $ 0.22 $ 0.21 26 Mar 2014 20.6% Forecast production to grow by 85% yoy in 2014. Milling deal w ith Norton Gold Fields w ill see gold production EXG Excelsior Gold Ltd Buy $ 0.14 $ 0.08 27 Jun 2014 13.9% achived for ~A$50-60M less capex than the PFS estimate for a standalone mill. Increased earnings and sensible acquisitions funded w ith SHJ Shine Corporate Buy $ 2.45 $ 2.45 12 Jun 2014 13.3% equity. OEG Orpheus Energy Ltd Buy $ 0.20 $ 0.03 19 Sep 2013 13.3% Company morphs into tading/infrastructure business ROC Roc Oil Company Buy $ 0.73 $ 0.60 01 Jul 2014 12.1% Merger looks accretive for shareholders Best Bearish Calls Date of Target Current Latest Jun/2014 Ticker Company Name Current REC Price Price Rating Up/Down Comments XJO S&P/ASX 200 -1.8% FUN Funtastic Limited Underperform $ 0.06 $ 0.06 03 Jun 2014 -13.0% Profit w arning and departure of CEO Revises FY14 adjusted NPAT guidance dow n due ASL Ausdrill Limited Underperform $ 0.90 $ 0.86 02 Jun 2014 -12.3% to w eaker than expected performance from African Underground Mining Services. 12 month trading update w orse than 9 month GRB Gage Roads Brew ing Underperform $ 0.19 $ 0.15 30 Jun 2014 -12.1% update FXJ Fairfax Media Ltd Underperform $ 0.96 $ 0.91 04 Apr 2014 -11.3% Recent rally in FXJ share price No government debt guarantee and no likelihood of QAN Qantas Airw ays Underperform $ 0.80 $ 1.26 18 Mar 2014 -10.3% the scrapping of the QAN sale act in the near term. KMD Kathmandu Hold Ltd Underperform $ 2.88 $ 2.96 24 Jun 2014 -9.2% Issues a profit w arning Exercises rights to terminate its exclusive online JIN Jumbo Interactive Underperform $ 1.50 $ 1.30 01 Apr 2014 -8.5% lottery reseller agreements in Mexico. RQL Resource Equip Ltd Underperform $ 0.15 $ 0.12 28 Feb 2014 -7.7% 1H14 loss of A$1.54M FY14 results show ed underlying profit after tax MTS Metcash Limited Underperform $ 2.77 $ 2.64 23 Jun 2014 -7.4% declined 10.9%. SEK Seek Limited Underperform $ 17.54 $ 15.85 20 Feb 2014 -6.4% Expensive at current market prices Estimates based on the closing price on 30 June 2014 Source: BBY

STOCKSCAN July 2014 7

BBY Research Year ending December 31

Affinity Education Group Limited

AFJ $1.14 TARGET PRICE $1.70 BUY (1.0X)

GICS Industry Group Consumer Services Analyst

Company Website www.affinityeducation.com.au Swapan Pandya,

Company Profile Price Performance Number of shares 167.6M Market capitalisation 191M 12 month high/low $1.45/$0.91 Average monthly turnover $9.0M Market Weight (%) 0.0 ESG Disclaimer Score (Ranking) (n/a) DDM Ranking 6/560 Affinity Education has been established to be a leading provider in the Australian market of high quality education and care to children aged six weeks to 12 years.

BBY's View Price $1.14 Target Price $1.70 Valuation $1.63 Valuation Methodology DCF Recommendation BUY (1.0X) Source: IRESS

BBY vs Consensus BBY FY1 Cons FY1 % Difference BBY Technical View - as at 9 July 2014 EBITDA ($m) 24.0 Short Term Downtrend Resistance $1.25 NPAT ($m) 15.3 Long Term Downtrend Support $1.15 EPS (¢/sh) 11.3

Profit & Loss (A$M) 2013A 2014F 2015F 2016F Investment summary 2013A 2014F 2015F 2016F Total Revenue 3.7 143.7 177.9 216.5 NPAT Reported (8.9) 8.3 22.9 28.1 Growth (%) 3807.3 23.8 21.7 NPAT Underlying (8.9) 15.3 22.9 28.1 EBITDA (9.3) 24.0 35.8 43.4 EPS Reported (9.9) 6.1 13.7 16.7 Growth (%) 357.0 49.4 21.3 EPS Underlying (9.9) 11.3 13.7 16.7 Dep'n and amort'n (0.1) (1.9) (3.0) (3.0) EPS Growth (%) 214.6 20.8 22.3 EBIT (9.4) 22.0 32.8 40.4 P/E Underlying (x) (10.7) 10.1 8.3 6.8 Net interest expense (0.1) (0.2) 0.0 (0.2) Dividend (¢/sh) 0.0 0.0 8.2 10.1 PBT (9.4) 21.8 32.7 40.2 Payout Ratio (%) 0.0 0.0 60.0 60.1 Tax 0.6 (6.6) (9.8) (12.1) Gross Yield (%) 10.3 12.6 NPAT Underlying attrib. (8.9) 15.3 22.9 28.1 Net Yield (%) 7.2 8.8 Growth (%) 272.6 49.9 22.8 Franking (%) 100.0 100.0 100.0 100.0 NPAT Reported (8.9) 8.3 22.9 28.1 Normalised NPAT (8.9) 15.3 22.9 28.1 Key Ratios 2013A 2014F 2015F 2016F Ord Shares 89.5 167.3 167.3 168.6 Profitability (%) Fully Diluted 89.5 167.3 167.3 168.6 EBITDA/Rev (%) (253.5) 16.7 20.1 20.1 EBIT/Rev (%) (255.3) 15.3 18.4 18.7 2013A 2014F 2015F 2016F Cashflow (A$M) NPAT/Rev (%) (240.8) 10.6 12.9 13.0 Customer receipts 2.0 143.7 177.9 216.5 ROE (%) (27.1) 14.3 14.6 16.0 Supplier payments (8.7) (119.7) (142.1) (173.0) ROA (%) (25.1) 18.1 18.2 20.0 Net interest paid 0.0 (0.2) 0.0 (0.2) ROIC (%) (21.1) 14.5 14.4 16.2 Taxes paid 0.0 (6.6) (9.8) (12.1) Net operating cash flow (6.8) 20.7 27.5 32.9 Financial Strength Debt to equity (%) 0.1 0.0 0.0 0.0 Capex (0.1) (1.9) (3.0) (3.0) Net debt ($M) (3.0) 1.7 1.4 (8.4) Net investing cash flow (61.3) (100.4) (21.6) (14.2) Net debt to equity (%) (4.6) 1.2 0.9 (4.5) Dividends paid 0.0 0.0 (5.6) (12.0) Net debt to EBITDA (%) 0.3 0.1 0.0 (0.2) Net financing cash flow 71.1 75.0 (5.6) (8.9) Interest Cover EBIT (x) (156.5) 120.0 1218.0 189.8 Net Change in cash 3.1 (4.7) 0.3 9.8 Current Ratio (x) 0.7 0.4 0.5 0.9 Net cash at end of period 3.1 (1.7) (1.4) 8.4 Quick Ratio (x) 0.7 0.4 0.5 0.9 Balance Sheet (A$M) 2013A 2014F 2015F 2016F Valuation CFPS (¢ - FD) (7.6) 15.4 16.4 19.6 Cash 3.1 (1.7) (1.4) 8.4 Price/CF (14.0) 7.4 6.9 5.8 Receivables 2.2 9.6 11.9 14.4 BV per share ($) 0.7 0.9 1.0 1.1 Inventories 0.0 0.0 0.0 0.0 Price/Book Value (x) 1.4 1.3 1.1 1.0 Current assets 5.9 8.6 11.1 23.5 NTA ($) 3.3 (4.9) (6.1) 2.0 Investments 0.0 0.0 0.0 0.0 NTA per share ($) 0.0 0.0 0.0 0.0 Goodwill 62.1 153.6 172.2 183.3 Price/NTA (x) 28.6 (38.9) (31.1) 97.4 Total assets 74.8 169.0 190.1 213.6 Payables 5.1 16.0 19.8 24.1 EV/Sales (x) 25.8 1.3 1.1 0.8 Current Term debt 0.0 0.0 0.0 0.0 EV/EBITDA (x) (10.2) 8.0 5.4 4.2 Long term debt 0.0 0.0 0.0 0.0 EV/EBIT (x) (10.1) 8.8 5.9 4.5 Total liabilities 9.4 20.3 24.1 28.4 Total Shareholder Equity 65.4 148.7 166.0 185.3

Source: BBY, FactSet, Company Reports. BBY contributes all company estimates to Bloomberg, Thomson Reuters, FactSet and Capital IQ.

BBY Limited 11 Jul 2014 1 Affinity Education Group Limited BBY Research

BBY Highlights 2 June 2014 - Affinity Education Group Limited (AFJ) remains an inexpensive way to gain exposure to an industry where supply is constrained, demand continues to grow ahead of supply, industry fragmentation provides consolidation opportunities and the government provides financial support for the users. Our 12 month target price of A$1.70/sh and our BUY recommendation remain unchanged. Our 12 month target price is underpinned by our DCF of A$1.78/sh. Company Highlights 17 Jun 2014 - Affinity completes the acquisition of 30 centres 14 May 2014 - Results of AGM 8 May 2014 - Completion of Retail Component of Entitlement Offer 2 May 2014 - Affinity Education significantly increases debt facility 11 Apr 2014 - Completion of Institutional Component of Entitlement Offer 8 Apr 2014 - Acquisition of 51 centres and Entitlement Offer 1 Apr 2014 - Affinity completes the acquisition of 2 centres 26 Mar 2014 - Affinity Education acquires 7 child care centres 7 Mar 2014 - S&P DJ Indices Announces March Quarterly Rebalance 28 Feb 2014 - Affinity Education 2013 Full Year Results 20 Dec 2013 - Affinity Education Acquires the Final 3 of 57 New Centres 17 Dec 2013 - Affinity Education Acquires 2 New Centres 16 Dec 2013 - Affinity Education Acquires 9 New Centres 12 Dec 2013 - Affinity Education Acquires 5 New Centres 9 Dec 2013 - Affinity Education Acquires 16 New Centres 5 Dec 2013 - Corporate Governance Statement 5 Dec 2013 - Statement Regarding Acquisition of Child Care Centres 5 Dec 2013 - Top 20 Holders 5 Dec 2013 - Pre-Quotation Disclosure 5 Dec 2013 - Admission to Official List

Source: BBY, IRESS, Company Reports

BBY Limited 11 Jul 2014 2 BBY Research Consensus Mean View Year ending August 31

Australian Pharmaceutical Industries Limited

API $0.59 TARGET PRICE $0.63 BUY GICS Industry Group Health Care Equipment & Services DDM Ranking: 269/560 Company Website www.api.net.au

Company Profile Price Performance Number of shares 488.1M Market capitalisation 286M 12 month high/low $0.67/$0.40 Avg monthly turnover $8.3M % S&P/ASX 200 n/a Market Weight (%) 0.0 ESG Disclaimer Score 10.3 Australian Pharmaceutical Industries Limited is a pharmaceutical support company which provides wholesale distribution of pharmaceutical and related products to pharmacies, hospitals and doctors. The Company also provides various retail support services and financial services to pharmacies along with distributing dental and related products to dental practices .

Source: IRESS

Consensus View BBY Technical View - as at 9 July 2014 Price $0.59 Short Term Uptrend Resistance $0.616 Target Price $0.63 Long Term Uptrend Support $0.569 Recommendation BUY

Investment Summary 2013A 2014F 2015F 2016F 2017F 2018F 5 Yr CAGR Revenue 3,186.0 3,278.0 3,330.0 3,403.0 3,175.0 3,245.0 0.4 EBITDA 74.0 81.0 81.0 84.0 91.0 94.0 4.9 EBIT 56.0 63.0 62.0 64.0 67.0 68.0 4.0 Pre-Tax Profit 35.0 41.0 43.0 45.0 Net Income 24.0 (102.0) 29.0 31.0 Capex 18.0 29.0 21.0 19.0 19.0 33.0 12.9 Enterprise Value 354.0 396.0 381.0 373.0 303.0 300.0 (3.3) Net (Tangible) Asset Value 376.0 308.0 312.0 327.0 Net Debt 117.0 110.0 95.0 87.0 18.0 15.0 (33.7) Per Share Data EPS (¢/ps) 5.0 6.0 6.0 7.0 7.0 8.0 9.9 DPS (¢/ps) 3.0 3.0 4.0 4.0 4.0 5.0 10.8 CFPS (¢/ps) 9.0 11.0 12.0 11.0 12.0 12.0 5.9 BVPS ($/ps) 1.0 1.0 1.0 1.0 1.0 1.0 0.0 Ratios P/E (x) 11.7 9.8 9.8 8.4 8.4 7.3 PEG Ratio (x) (0.7) 0.5 0.5 0.5 Net Yield (%) 5.1 5.1 6.8 6.8 6.8 8.5 Payout Ratio (%) 60.0 50.0 66.7 57.1 57.1 62.5 Gross Profit Margin (%) 2.0 3.0 2.0 3.0 3.0 3.0 NPAT Margin (%) 0.8 (3.1) 0.9 0.9 Return on Equity (%) 4.0 6.0 6.0 6.0 7.0 7.0 Return on Assets (%) 2.0 (8.0) 2.0 3.0 P/BV (x) 0.6 0.6 0.6 0.6 0.6 0.6 P/Sales (x) 0.1 0.1 0.1 0.1 0.1 0.1

Source: FactSet Consensus Estimates

Company Highlights 5 Jun 2014 - Market Update - Renewal of API Banking Facilities 30 Apr 2014 - API HY14 Results ASX Release 30 Apr 2014 - Half Yearly Report and Accounts 24 Apr 2014 - Half year 2014 announcement details 17 Apr 2014 - Reinstatement to Official Quotation 17 Apr 2014 - Market Update - Carrying value of assets 16 Apr 2014 - Suspension from Official Quotation 30 Jan 2014 - 2013 AGM Results of Meeting 28 Jan 2014 - AGM update 13 Dec 2013 - Annual Report 2013

BBY Limited 11 Jul 2014 1 Australian Pharmaceutical Industries Limited BBY Research

9 Dec 2013 - Media Release - Retail Update 24 Oct 2013 - FY13 Results - Media release 2 Oct 2013 - Market Update - Long term customer loans 6 Sep 2013 - S&P DJ Indices Announces September Quarterly Rebalance

Source: BBY, IRESS, Company Reports

BBY Limited 11 Jul 2014 2 BBY Research Consensus Mean View Year ending June 30

Clearview Wealth Limited

CVW $0.81 TARGET PRICE $0.97 BUY GICS Industry Group Insurance DDM Ranking: 159/560 Company Website www.clearview.com.au

Company Profile Price Performance Number of shares 544.4M Market capitalisation 441M 12 month high/low $0.83/$0.58 Avg monthly turnover $1.1M % S&P/ASX 200 n/a Market Weight (%) 0.0 Clearview Wealth Ltd (CVW) offers life insurance and financial planning services. The Company offers term life, accidental death, funeral, income protection, and accidental cash benefit insurance, and manages wholesale and retail investment funds.

Source: IRESS

Consensus View BBY Technical View - as at 9 July 2014 Price $0.81 Short Term Uptrend Resistance $0.84 Target Price $0.97 Long Term Uptrend Support $0.731 Recommendation BUY

Investment Summary 2013A 2014F 2015F 2016F 2017F 2018F 5 Yr CAGR Total Operating Income 55.0 119.0 138.0 159.0 186.0 Pre-Tax Profit 12.0 18.0 26.0 36.0 51.0 Net Income 2.0 11.0 19.0 25.0 Net (Tangible) Asset Value Per Share Data EPS (¢/ps) 4.0 4.0 4.0 5.0 7.0 DPS (¢/ps) 2.0 2.0 2.0 2.0 BVPS ($/ps) 1.0 1.0 1.0 1.0 Ratios P/E (x) 20.3 20.3 20.3 16.2 11.6 PEG Ratio (x) (1.0) 0.6 0.3 Net Yield (%) 2.5 2.5 2.5 2.5 Payout Ratio (%) 50.0 50.0 50.0 40.0 Return on Equity (%) 1.0 5.0 7.0 8.0 10.0 Return on Assets (%) 0.0 1.0 1.0 1.0 P/BV (x) 0.8 0.8 0.8 0.8

Source: FactSet Consensus Estimates

Company Highlights 15 May 2014 - Recommencement of share buy-back 27 Mar 2014 - Issue of shares under Retail Entitlement Offer 24 Mar 2014 - ClearView successfully completes Retail Entitlement Offer 6 Mar 2014 - Market Release - Issue of Shares 6 Mar 2014 - ClearView Retail Entitlement Offer 26 Feb 2014 - Successful completion of placement and institutional offer 26 Feb 2014 - Part 4 Market Release - 1H FY14 Results and Equity Raising 26 Feb 2014 - Part 2 Half Year Condensed Consolidated Financial Report 19 Dec 2013 - 1H14 Business Update and Buy-Back Announcement 3 Dec 2013 - Changes to ClearView Board 6 Nov 2013 - Results of 2013 Annual General Meeting 27 Aug 2013 - FY2013 results - Part 3 Market Release Correction 27 Aug 2013 - FY2013 results - Part 3 Market Release 27 Aug 2013 - FY2013 results - Part 2 2013 Annual Report Source: BBY, IRESS, Company Reports BBY Limited 11 Jul 2014 1

BBY Research Year ending June 30

Energy Action Limited

EAX $3.06 TARGET PRICE $4.00 BUY (1.0X)

GICS Industry Group Commercial & Professional Services Analyst

Company Website www.energyaction.com.au Swapan Pandya,

Company Profile Price Performance Number of shares 25.8M Market capitalisation 79M 12 month high/low $4.35/$2.80 Average monthly turnover $3.7M Market Weight (%) 0.0 ESG Disclaimer Score (Ranking) (n/a) DDM Ranking 128/560 Energy Action Limited (EAX) is an operator of an energy procurement platform which allows energy suppliers to competitively bid against one another to supply energy. EAX holds a portfolio of products and services that complement the Australian Energy Exchange and will allow companies to monitor and manage energy usage and carbon emissions.

BBY's View Price $3.06

Target Price $4.00 Valuation $4.43 Source: IRESS

Valuation Methodology DCF Recommendation BUY (1.0X)

BBY vs Consensus BBY FY1 Cons FY1 % Difference BBY Technical View - as at 9 July 2014 EBITDA ($m) 7.1 Short Term Downtrend Resistance $3.37 NPAT ($m) 4.7 Long Term Downtrend Support $2.83 EPS (¢/sh) 18.1

Profit & Loss (A$M) 2013A 2014F 2015F 2016F Investment summary 2013A 2014F 2015F 2016F Total Revenue 22.0 25.3 29.3 32.9 NPAT Reported 4.4 4.7 6.3 7.9 Growth (%) 27.8 15.2 15.8 12.2 NPAT Underlying 4.9 4.7 6.3 7.9 EBITDA 7.4 7.1 9.8 12.4 EPS Reported 17.0 18.1 23.8 29.7 Growth (%) 22.8 (3.8) 37.6 27.2 EPS Underlying 18.9 18.1 23.8 29.7 Dep'n and amort'n (0.8) (0.5) (0.8) (1.2) EPS Growth (%) 9.6 (4.3) 32.0 24.5 EBIT 6.6 6.6 9.0 11.2 P/E Underlying (x) 15.9 16.9 12.8 10.3 Net interest expense 0.2 0.2 0.1 0.0 Dividend (¢/sh) 8.7 9.1 12.0 14.9 PBT 6.8 6.8 9.0 11.3 Payout Ratio (%) 45.8 50.2 50.0 50.0 Tax (1.9) (2.1) (2.7) (3.4) Gross Yield (%) 4.1 4.3 5.6 7.0 NPAT Underlying attrib. 4.9 4.7 6.3 7.9 Net Yield (%) 2.9 3.0 3.9 4.9 Growth (%) 17.7 (2.5) 33.5 24.5 Franking (%) 100.0 100.0 100.0 100.0 NPAT Reported 4.4 4.7 6.3 7.9 Normalised NPAT 4.9 4.7 6.3 7.9 Key Ratios 2013A 2014F 2015F 2016F Ord Shares 25.3 26.4 26.4 26.4 Profitability (%) Fully Diluted 25.4 26.6 26.6 26.6 EBITDA/Rev (%) 33.6 28.0 33.3 37.8 EBIT/Rev (%) 30.0 26.1 30.7 34.2 2013A 2014F 2015F 2016F Cashflow (A$M) NPAT/Rev (%) 22.1 18.7 21.6 24.0 Customer receipts 23.3 26.4 29.3 32.9 ROE (%) 41.2 30.8 32.8 34.0 Supplier payments (17.8) (21.1) (20.2) (21.0) ROA (%) 42.2 30.6 35.9 39.6 Net interest paid 0.2 0.2 0.1 0.0 ROIC (%) 88.5 40.9 34.7 34.7 Taxes paid (1.2) (2.1) (2.7) (3.4) Net operating cash flow 4.0 3.3 6.5 8.5 Financial Strength Debt to equity (%) 0.0 0.0 0.0 0.0 Capex (2.3) (3.0) (2.8) (4.4) Net debt ($M) (6.4) (1.8) (0.6) (1.2) Net investing cash flow (2.7) (5.7) (4.8) (4.4) Net debt to equity (%) (48.6) (10.1) (2.7) (4.8) Dividends paid (1.8) (2.3) (2.9) (3.5) Net debt to EBITDA (%) (0.9) (0.3) (0.1) (0.1) Net financing cash flow (1.6) (2.3) (2.9) (3.5) Interest Cover EBIT (x) na na na na Net Change in cash (0.3) (4.7) (1.2) 0.7 Current Ratio (x) 2.3 2.6 2.3 2.4 Net cash at end of period 6.4 1.8 0.6 1.2 Quick Ratio (x) 2.3 2.4 2.1 2.2 Balance Sheet (A$M) 2013A 2014F 2015F 2016F Valuation CFPS (¢ - FD) 15.5 12.7 24.4 32.0 Cash 6.4 1.8 0.6 1.2 Price/CF 19.4 24.0 12.6 9.6 Receivables 3.5 6.7 7.8 8.8 BV per share ($) 0.5 0.7 0.8 1.0 Inventories 0.0 0.9 0.9 0.9 Price/Book Value (x) 5.7 4.6 3.8 3.2 Current assets 10.9 9.4 9.3 10.9 NTA ($) 6.9 7.4 10.8 15.2 Investments 0.0 0.0 0.0 0.0 NTA per share ($) 0.3 0.3 0.4 0.6 Goodwill 0.0 4.0 4.0 4.0 Price/NTA (x) 11.0 11.0 7.5 5.3 Total assets 19.1 24.1 26.0 30.8 Payables 4.1 4.8 3.2 3.6 EV/Sales (x) 3.5 3.1 2.7 2.4 Current Term debt 0.0 0.0 0.0 0.0 EV/EBITDA (x) 10.3 10.9 8.0 6.3 Long term debt 0.0 0.0 0.0 0.0 EV/EBIT (x) 11.5 11.7 8.7 6.9 Total liabilities 5.9 6.5 4.9 5.3 Total Shareholder Equity 13.3 17.6 21.0 25.4

Source: BBY, FactSet, Company Reports. BBY contributes all company estimates to Bloomberg, Thomson Reuters, FactSet and Capital IQ.

BBY Limited 11 Jul 2014 1 Energy Action Limited BBY Research

BBY Highlights 4 June 2014 - Energy Action Limited (EAX) is an energy broker with a difference. It runs reverse auctions and uses technology to interrogate ‘big data’ that is used to provide consulting services to its clients. Technology and data are EAX’s key competitive advantages. EAX is setting itself up for a big FY15 following the super auctions held in April 2014 and the super auction planned for the 3rd week of June 2014. We maintain our BUY recommendation and our 12 month target price of A$4.00/sh (implies a FY15 EV/EBIT of 11.3x and FY15 PE of 16.8x supported by our DCF of A$4.43/sh). Company Highlights 21 May 2014 - Senior Sales Appointments & FY14 Market Guidance Update 13 Mar 2014 - Acquisition of leading energy efficiency consultancy 7 Mar 2014 - S&P DJ Indices Announces March Quarterly Rebalance 18 Feb 2014 - Half year results 18 Feb 2014 - Half Year Accounts 28 Jan 2014 - Half year results timetable 19 Dec 2013 - Trading Update and Revised Earnings Guidance 1 Nov 2013 - Results of Annual General Meeting 8 Oct 2013 - Annual Report to shareholders 9 Sep 2013 - CEO Appointment 20 Aug 2013 - EAX Full Year Statutory Results Media Release 20 Aug 2013 - Preliminary Final Report and Full Year Statutory Accounts 24 Jul 2013 - Annual results timetable

Source: BBY, IRESS, Company Reports

BBY Limited 11 Jul 2014 2 BBY Research Company Report

99 Wuxian Limited

NNW $0.68 A stock not covered by BBY, with no consensus view

GICS Industry Group Retailing

Company Website www.99wuxian.com

Company Profile Price Performance Number of shares 104.6M Market capitalisation 71M 12 month high/low $0.73/$0.30 Avg monthly turnover $2.6M Market Weight (%) 0.0 99 Wuxian Limited provides online financial and operational services for domestic banks, securities and operators with cooperation covering value- added applications, data mining, precision marketing and other areas of expertise. The Company provides data acquisition and mining, and setting up of intermediate business platform.

BBY Technical View - as at 18 June 2014 Short Term Uptrend Resistance $0.599 Long Term Uptrend Support $0.378

No Estimates Data is available for 99 Wuxian Limited

Source: IRESS

Company Highlights 18 Jun 2014 - Price Query 12 Jun 2014 - Analyst Pack June 2014 11 Jun 2014 - Results of Annual General Meeting 6 Jun 2014 - 99wuxian New Marketing Alliance and Business Partner Growth 5 Jun 2014 - Broker Research Report 20 May 2014 - 99wuxian Joint Marketing Initiative and New Product Launches 2 May 2014 - March Quarterly Trading Update 30 Apr 2014 - Annual Report 2013 15 Apr 2014 - 99WUXIAN EXPANDS REACH 21 Mar 2014 - Audited Annual Financial Accounts 21 Mar 2014 - Annual Financial Report for period ended 31 December 2013 18 Mar 2014 - 99wuxian to benefit from PBOC Move 7 Mar 2014 - 99Wuxian to Launch Mobile Game Platform 25 Feb 2014 - Analyst Pack February 2014 25 Feb 2014 - 99 WUXIAN REPORTS MAIDEN PROFIT 25 Feb 2014 - Preliminary Final Report 14 Feb 2014 - Interview on Finance News Network 31 Jan 2014 - Commentary on December quarter figures 29 Jan 2014 - December Business Partner and Merchant Growth 23 Jan 2014 - December quarter financial highlights 13 Dec 2013 - SIGNIFICANT BUSINESS PARTNER AND MERCHANT GROWTH IN NOVEMBER 20 Nov 2013 - Strong Business Partner and Merchant Growth in October 15 Oct 2013 - Strong quarterly growth 8 Oct 2013 - Registered user, business partner and merchant growth 4 Oct 2013 - Confirmation of final payment & details provided by Handpay 4 Oct 2013 - Statement of Commitments 4 Oct 2013 - Unaudited Accounts for period from 7 May 2013 to 31 May 2013

BBY Limited 11 Jul 2014 1 99 Wuxian Limited BBY Research

4 Oct 2013 - Replacement Prospectus 4 Oct 2013 - Top 20 Holders 4 Oct 2013 - Pre-Quotation Disclosure

Source: BBY, IRESS, Company Reports

BBY Limited 11 Jul 2014 2

BBY Research Year ending June 30

Regeneus Ltd

RGS $0.36 TARGET PRICE $0.83 SPECULATIVE BUY (0.0X)

GICS Industry Group Pharmaceuticals, Biotechnology & Life Sciences Analyst

Company Website regeneus.com.au Dr Dennis Hulme

Company Profile Price Performance Number of shares 136.3M Market capitalisation 49M 12 month high/low $0.66/$0.24 Average monthly turnover $2.0M Market Weight (%) 0.0 ESG Disclaimer Score (Ranking) (n/a) Regeneus Ltd is a regenerative medicine company that is commercialising cell-based therapies for treating conditions such as arthritis, in humans and animals.

BBY's View Price $0.36 Target Price $0.83 Valuation $0.83 Valuation Methodology DCF Recommendation SPECULATIVE BUY (0.0X) Source: IRESS

BBY vs Consensus BBY FY1 Cons FY1 % Difference BBY Technical View - as at 9 July 2014 EBITDA ($m) (8.6) Short Term Downtrend Resistance $0.428 NPAT ($m) (6.2) Long Term Downtrend Support $0.318 EPS (¢/sh) (3.4)

Profit & Loss (A$M) 2013A 2014F 2015F 2016F Investment summary 2013A 2014F 2015F 2016F Total Revenue 2.0 2.5 3.7 6.1 NPAT Reported (5.2) (6.2) (6.3) (6.7) Growth (%) 58.6 24.3 47.7 64.3 NPAT Underlying (5.2) (6.2) (6.3) (6.7) EBITDA (7.0) (8.6) (9.0) (9.4) EPS Reported (5.0) (3.4) (3.4) (3.6) Growth (%) (43.9) (21.6) (4.4) (4.5) EPS Underlying (5.0) (3.4) (3.4) (3.6) Dep'n and amort'n (0.2) (0.2) (0.2) (0.2) EPS Growth (%) (85.7) 33.4 (1.0) (6.9) EBIT (7.2) (8.8) (9.1) (9.6) P/E Underlying (x) (10.7) (10.6) (9.9) Net interest expense (0.3) (0.1) 0.2 0.0 Dividend (¢/sh) 0.0 0.0 0.0 0.0 PBT (7.5) (8.8) (8.9) (9.6) Payout Ratio (%) 0.0 0.0 0.0 0.0 Tax 2.3 2.7 2.7 2.9 Gross Yield (%) NPAT Underlying attrib. (5.2) (6.2) (6.3) (6.7) Net Yield (%) Growth (%) (59.4) (19.2) (1.0) (6.9) Franking (%) 0.0 0.0 0.0 0.0 NPAT Reported (5.2) (6.2) (6.3) (6.7) Normalised NPAT (5.2) (6.2) (6.3) (6.7) Key Ratios 2013A 2014F 2015F 2016F Ord Shares 102.9 184.4 184.4 184.4 Profitability (%) Fully Diluted 123.7 199.9 200.5 201.1 EBITDA/Rev (%) (349.0) (341.6) (241.5) (153.7) EBIT/Rev (%) (358.7) (349.4) (246.9) (157.0) 2013A 2014F 2015F 2016F Cashflow (A$M) NPAT/Rev (%) (257.2) (246.7) (168.8) (109.9) Customer receipts 2.3 2.0 3.5 5.6 ROE (%) 1129.2 (431.6) (217.8) 218.5 Supplier payments (8.7) (10.9) (12.2) (14.2) ROA (%) (197.9) (147.3) (166.8) (864.7) Net interest paid 0.1 (0.1) 0.2 0.0 ROIC (%) (333.5) (350.1) (385.3) (816.1) Taxes paid 1.7 3.2 3.4 3.9 Net operating cash flow (4.6) (5.8) (5.1) (4.7) Financial Strength Debt to equity (%) (170.8) 0.0 0.0 0.0 Capex (0.3) (0.2) (0.2) (0.2) Net debt ($M) 4.5 (3.9) 1.4 6.3 Net investing cash flow (0.4) (0.2) (0.2) (0.2) Net debt to equity (%) (156.5) (67.1) 20237.9 (103.3) Dividends paid 0.0 0.0 0.0 0.0 Net debt to EBITDA (%) (0.6) 0.4 (0.2) (0.7) Net financing cash flow 4.9 9.4 0.0 0.0 Interest Cover EBIT (x) (22.0) (87.7) na na Net Change in cash (0.1) 3.4 (5.3) (4.9) Current Ratio (x) 0.5 5.2 1.8 (1.0) Net cash at end of period 0.4 3.9 (1.4) (6.3) Quick Ratio (x) 0.5 5.0 1.6 (1.2) Balance Sheet (A$M) 2013A 2014F 2015F 2016F Valuation CFPS (¢ - FD) (4.5) (3.1) (2.8) (2.5) Cash 0.4 3.9 (1.4) (6.3) Price/CF (11.5) (13.1) (14.1) Receivables 0.0 0.5 0.7 1.2 BV per share ($) 0.0 0.0 0.0 0.0 Inventories 0.2 0.2 0.3 0.5 Price/Book Value (x) 11.6 9382.9 (10.8) Current assets 3.4 7.2 2.3 (1.9) NTA ($) (2.9) 5.7 0.0 (6.1) Investments 0.0 0.0 0.0 0.0 NTA per share ($) 0.0 0.0 0.0 0.0 Goodwill 0.0 0.0 0.0 0.0 Price/NTA (x) 11.6 (4479.1) (10.8) Total assets 4.0 7.9 3.1 (0.9) Payables 1.8 1.3 1.1 1.8 EV/Sales (x) 18.0 13.6 9.1 Current Term debt 4.9 0.0 0.0 0.0 EV/EBITDA (x) (5.3) (5.6) (5.9) Long term debt 0.0 0.0 0.0 0.0 EV/EBIT (x) (5.2) (5.5) (5.8) Total liabilities 6.9 2.1 3.1 5.3 Total Shareholder Equity (2.9) 5.7 0.0 (6.1)

Source: BBY, FactSet, Company Reports. BBY contributes all company estimates to Bloomberg, Thomson Reuters, FactSet and Capital IQ.

BBY Limited 11 Jul 2014 1 Regeneus Ltd BBY Research

BBY Highlights 8 Jul 2014 - Regeneus Ltd (RGS) has signed an agreement with Northern Sydney Local Health District for the exclusive worldwide rights for a new personalised therapeutic human cancer vaccine. The human cancer vaccine uses the same technology as Kvax, which RGS is developing for the treatment of cancer in dogs. RGS will fund a first-in-man safety trial of the human vaccine in 1Q CY15, and we also expect it to initiate a US-based trial of Kvax in dogs in the next few months. We lift our price target to A$0.83/sh (prev A$0.77) in line with our risked DCF valuation, which now includes the human cancer vaccine with a 10% probability of success. We retain our SPECULATIVE BUY recommendation. Company Highlights 8 Jul 2014 - Exclusive global rights for human cancer vaccine-Amended hdr 30 Jun 2014 - RGS enters into agreement for US marketing trial for Kvax 14 May 2014 - New treatment option for chronic neuropathic pain patients 8 Apr 2014 - Ethics approval for procurement for off-the-shelf treatment 4 Apr 2014 - Regeneus partners with Hennessy Research for Kvax 26 Mar 2014 - HiQCell Joint Registry Results 21 Mar 2014 - RGS to present at Regenerative Medicine Investor Day 6 Mar 2014 - Kvax cancer vaccine paper shows safety and efficacy 27 Feb 2014 - Half Yearly Report and Accounts 22 Jan 2014 - Regeneus partners with Lonza for Canine CryoShot 27 Nov 2013 - Regeneus (RGS) results of AGM - 27 November 2013 25 Nov 2013 - Regeneus to fast-track human cells under new Japanese laws 14 Nov 2013 - Press Release re Novel canine cancer vaccine 30 Oct 2013 - HiQCell stem cell therapy now available in Melbourne 29 Oct 2013 - Annual Report to shareholders 8 Oct 2013 - Progress Report 30 Sep 2013 - Full Year Statutory Accounts 18 Sep 2013 - Corporate Governance Statement 18 Sep 2013 - Share Option Plan 18 Sep 2013 - Option Share Trust Plan

Source: BBY, IRESS, Company Reports

BBY Limited 11 Jul 2014 2

BBY Research Year ending June 30

Shine Corporate Ltd

SHJ $2.36 TARGET PRICE $2.45 BUY (0.0X)

GICS Industry Group Consumer Services Analyst

Company Website www.shine.com.au Swapan Pandya,

Company Profile Price Performance Number of shares 171.9M Market capitalisation 369M 12 month high/low $2.51/$1.52 Average monthly turnover $4.6M Market Weight (%) 0.0 ESG Disclaimer Score (Ranking) (n/a) DDM Ranking 483/560 Shine Corporate (SHJ) is an Australian legal services firm established in 1976. SHJ specialises in personal injuries litigation on a 'no-win no-fee' basis.

BBY's View Price $2.36 Target Price $2.45 Valuation $2.26 Valuation Methodology PE relative Recommendation BUY (0.0X) Source: IRESS

BBY vs Consensus BBY FY1 Cons FY1 % Difference BBY Technical View - as at 9 July 2014 EBITDA ($m) 35.9 Short Term Uptrend Resistance $2.68 NPAT ($m) 23.1 Long Term Uptrend Support $2.08 EPS (¢/sh) 14.9

Profit & Loss (A$M) 2013A 2014F 2015F 2016F Investment summary 2013A 2014F 2015F 2016F Total Revenue 105.2 115.1 150.9 160.1 NPAT Reported 17.5 23.1 27.8 31.0 Growth (%) 23.1 9.4 31.1 6.1 NPAT Underlying 17.5 23.1 27.8 31.0 EBITDA 28.1 35.9 42.8 47.3 EPS Reported 12.3 14.9 16.3 18.2 Growth (%) 19.1 27.8 19.2 10.5 EPS Underlying 12.3 14.9 16.3 18.2 Dep'n and amort'n (1.5) (1.8) (1.9) (2.0) EPS Growth (%) 20.5 9.7 11.4 EBIT 26.6 34.1 40.9 45.3 P/E Underlying (x) 11.9 15.9 14.5 13.0 Net interest expense (0.9) (1.0) (1.1) (1.0) Dividend (¢/sh) 1.8 3.5 4.1 4.5 PBT 25.3 33.0 39.7 44.3 Payout Ratio (%) 14.2 23.5 25.0 25.0 Tax (7.8) (10.0) (11.9) (13.3) Gross Yield (%) 1.2 1.5 2.5 2.8 NPAT Underlying attrib. 17.5 23.1 27.8 31.0 Net Yield (%) 1.2 1.5 1.7 1.9 Growth (%) 13.2 31.8 20.6 11.4 Franking (%) 0.0 0.0 100.0 100.0 NPAT Reported 17.5 23.1 27.8 31.0 Normalised NPAT 17.5 23.1 27.8 31.0 Key Ratios 2013A 2014F 2015F 2016F Ord Shares 155.0 155.0 170.5 170.5 Profitability (%) Fully Diluted 155.0 155.0 170.5 170.5 EBITDA/Rev (%) 26.7 31.2 28.4 29.5 EBIT/Rev (%) 25.3 29.6 27.1 28.3 2013A 2014F 2015F 2016F Cashflow (A$M) NPAT/Rev (%) 16.6 20.0 18.4 19.4 Customer receipts 92.9 102.4 125.3 132.7 ROE (%) 19.6 20.6 18.8 16.6 Supplier payments (84.2) (86.6) (108.1) (112.8) ROA (%) 16.4 17.3 16.9 15.6 Net interest paid (0.9) (1.0) (1.1) (1.0) ROIC (%) 19.6 19.9 17.9 15.9 Taxes paid (2.9) (3.2) (5.0) (5.3) Net operating cash flow 5.0 8.4 13.7 14.3 Financial Strength Debt to equity (%) 18.7 15.2 10.5 9.2 Capex (2.9) (3.2) (4.2) (2.3) Net debt ($M) 3.3 12.3 11.8 7.3 Net investing cash flow (15.1) (12.0) (39.7) (2.3) Net debt to equity (%) 3.2 10.2 6.8 3.7 Dividends paid (1.5) (5.4) (6.0) (7.5) Net debt to EBITDA (%) 0.1 0.3 0.3 0.2 Net financing cash flow 16.8 (6.4) 26.4 (7.5) Interest Cover EBIT (x) 23.9 32.8 36.1 44.4 Net Change in cash 6.7 (9.9) 0.4 4.6 Current Ratio (x) 5.3 5.2 5.3 6.2 Net cash at end of period 16.0 6.1 6.5 11.1 Quick Ratio (x) 1.0 0.6 0.6 0.7 Balance Sheet (A$M) 2013A 2014F 2015F 2016F Valuation CFPS (¢ - FD) 3.5 5.4 8.0 8.4 Cash 16.0 6.1 6.5 11.1 Price/CF 42.1 43.6 29.4 28.1 Receivables 8.6 7.0 9.1 9.7 BV per share ($) 0.7 0.8 1.0 1.2 Inventories 109.6 116.3 141.9 169.3 Price/Book Value (x) 2.2 3.0 2.3 2.0 Current assets 136.5 131.5 159.7 192.2 NTA ($) 94.0 109.9 126.7 150.1 Investments 0.0 0.0 0.0 0.0 NTA per share ($) 0.6 0.7 0.7 0.9 Goodwill 0.0 0.0 35.5 35.5 Price/NTA (x) 2.4 3.3 3.2 2.7 Total assets 184.8 208.6 274.6 307.3 Payables 15.2 15.5 20.3 21.5 EV/Sales (x) 2.2 3.3 2.5 2.4 Current Term debt 2.4 2.8 2.8 2.8 EV/EBITDA (x) 8.1 10.6 8.9 8.0 Long term debt 16.8 15.5 15.5 15.5 EV/EBIT (x) 8.6 11.2 9.3 8.3 Total liabilities 81.7 87.9 99.6 108.8 Total Shareholder Equity 103.1 120.8 175.0 198.5

Source: BBY, FactSet, Company Reports. BBY contributes all company estimates to Bloomberg, Thomson Reuters, FactSet and Capital IQ.

BBY Limited 11 Jul 2014 1 Shine Corporate Ltd BBY Research

BBY Highlights 12 Jun 2014 - Shine Corporate Ltd (SHJ) has always told the market that its first priority has been to meet its prospectus forecasts for FY14 and not to muddy the waters with acquisitions. Today SHJ told us that: (1) FY14 earnings are in the bag (EBITDA in the range of A$34M-A$37M) albeit at the lower end of the range; and (2) that it will use a A$29.45M capital raise (underwritten 1 for 10 renounceable rights issue at A$1.90/sh) and some cash to acquire two legal businesses. One is a leading Personal Injury (PI) practice in WA (SHJ’s first WA venture) and the other is a Queensland based legal practice specialising in land access rights. The price is right at 4-5x EBITDA, the deal includes earn-outs and the key personnel are taking some equity and staying on. It looks like ticks in all boxes. The increased earnings and sensible acquisitions funded with equity have caused us to change our recommendation from UNDERPERFORM to BUY and to increase our 12 month target price from A$2.10/sh to A$2.45/sh. (FY15 PE of 15x, FY15 EV/EBIT 10.5x).. Company Highlights 9 Jul 2014 - Entitlement Offer closed 12 Jun 2014 - Renounceable Issue 7 Mar 2014 - S&P DJ Indices Announces March Quarterly Rebalance 26 Feb 2014 - Market Announcement - Shine Corporate Ltd FY14H1 Results 26 Feb 2014 - Interim Financial Report - Shine Corporate Ltd FY14H1 23 Oct 2013 - Annual Report to shareholders 23 Oct 2013 - Results of Meeting 23 Oct 2013 - Profit Guidance 15 Oct 2013 - Proposed Changes to Queensland Workers Compensation Scheme 28 Aug 2013 - Advice of 2013 AGM Location 28 Aug 2013 - Shine Corporate Limited FY 13 Financial Results

Source: BBY, IRESS, Company Reports

BBY Limited 11 Jul 2014 2 BBY Research Company Report

VMob Group Limited

VML $0.01 A stock not covered by BBY, with no consensus view

GICS Industry Group Media

Company Website www.vmob.co

Company Profile Price Performance Number of shares 1,263.3M Market capitalisation 15M 12 month high/low $0.05/$0.01 Avg monthly turnover $0.6M Market Weight (%) 0.0 VMob Group Limited, formerly Velo Capital Ltd, is a New Zealand-based company. The Company is engaged in the provision of digital media, replication, design, packaging and online fulfillment services. It has three segments: Marketing services, including the design of brand, point of sale and collateral material; Print production, and Compact disc and digital versatile disc replication, and duplication and associated printing and packaging. The Company has operations in New Zealand and Australia. In August 2012, the Company acquired VMob Limited. In June 13, 2011 the Company sold its subsidiary Media Technology Group Limited to shareholders of the Company including Cadre Investments Limited.

BBY Technical View - as at 18 June 2014 Source: IRESS Short Term Downtrend Resistance $0.028 Long Term Downtrend Support $0.01 No Estimates Data is available for VMob Group Limited Company Highlights 13 Jun 2014 - Financial Results Announced for the Year Ended 31 March 2014 19 May 2014 - Won the Best Innovative Hi-Tech Mobile Product and Best Innovative Hi-Tech Service Product at the 2014 NZ Hi-Tech Awards 13 May 2014 - Signs a commercial agreement with Loyalty NZ 7 Apr 2014 - Wins the Emerging Market award at the I-COM Big Data Venture Challenge in Seville, Spain 18 Feb 2014 - Issues over 50 million ordinary shares at NZD 1.25 cents 16 Jan 2014 - Signs a commercial agreement with McDonald’s Sweden

Source: BBY, IRESS, Company Reports

BBY Limited 11 Jul 2014 1

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Technical Analysis

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