February 14, 2017

IJM Corporation (IJM MK) BUY Share Price MYR 3.44 MCKIP, Port: Company Description IJM12m Corp.Price Targetis a conglomerateMYR 3.60 with(+5%) operations in Progress update construction,Previous Price Targetproperty development,MYR 3.60 manufacturing and quarrying, plantation, and infrastructure.

Progressing well Statistics Shariah status Yes We visited Malaysia-China Kuantan Industrial Park (MCKIP) and Kuantan 52w high/low (MYR) 3.64/3.10 Port last week and returned feeling upbeat on their progress. Alliance 3m avg turnover (USDm) 3.2 Steel’s integrated steel mill plant in MCKIP is expected to commence Free float (%) 61.0

operations by end-2017 while Kuantan Port’s New Deepwater Terminal Issued shares (m) 3,607 construction progress stands at 26.7%, with Phase 1A to complete by end- Market capitalisation MYR12.4B 2017 too. The visit reaffirms our view on MCKIP and Kuantan Port being USD2.8B priced assets to IJM. No change to our earnings forecasts and SOP-TP of Major shareholders: MYR3.60 for IJM pending the release of its 3QFY17 results on 23 Feb. Employees Provident Fund 14.6% Lembaga Tabung Haji 5.5% Kumpulan Wang Persaraan 5.0% Construction MCKIP continues to attract investors Price Performance The MYR5.6b integrated steel mill by China-based Alliance Steel is slated to commence operation by end-2017. The plant is expected to hit full 3.80 128 capacity within 6 months. MCKIP has also secured another MYR7.8b of 3.70 124

committed investments and targets another MYR10b in 2017, which will 3.60 120

bring total investments to about MYR23b. Under the public-private 3.50 116 partnership model, the Malaysian government has allocated MYR1.5b for 3.40 112 the development of infrastructure around the MCKIP region. 3.30 108

3.20 104 Malaysia Kuantan Port expansion progressing well 3.10 100 3.00 96 Overall construction progress of the New Deepwater Terminal (NDWT) Feb-15 May-15 Aug-15 Nov-15 Feb-16 May-16 Aug-16 Nov-16 stands at 26.7%. The 4.63km new breakwater is slated for completion in Aug 2017. Phase 1A of the NDWT is also on-track for completion by end- IJM Corp - (LHS, MYR) IJM Corp / Kuala Lumpur Composite Index - (RHS, %) 2017, in-line with the commencement of operations of Alliance Steel’s -1M -3M -12M plant. The 400m long berth (Phase 1A) has been dedicated to Alliance Absolute (%) 2 10 1 Steel with a maximum capacity of 9m-10m tonnes p.a., bringing the total Relative to index (%) (0) 5 (3) capacity of Kuantan Port to 36m tonnes p.a. after Phase 1A. Source: FactSet

Mid-long term positive for IJM We believe the growth of industries within MCKIP is positive for Kuantan Port on the back of rising cargo throughput. Alliance Steel’s 3.5m tonnes p.a. steel plant is expected to contribute 7.0m of cargo throughput annually at full capacity. The East Coast Rail Link (ECRL) should also support throughput growth in the later years as we gather that there may be a spur-line to Kuantan Port.

FYE Mar (MYR m) FY15A FY16A FY17E FY18E FY19E Revenue 5,448 5,128 6,679 7,611 7,755 EBITDA 1,435 1,167 1,222 1,425 1,569 Core net profit 530 509 589 701 769 Core EPS (sen) 16.3 14.3 16.4 19.6 21.4 Core EPS growth (%) (15.0) (12.5) 15.3 19.0 9.6 Net DPS (sen) 7.5 10.0 7.0 7.0 7.0 Core P/E (x) 21.1 24.1 20.9 17.6 16.0 P/BV (x) 1.3 1.4 1.3 1.2 1.2 Net dividend yield (%) 2.2 2.9 2.0 2.0 2.0 ROAE (%) 6.3 9.1 6.4 7.2 7.5 ROAA (%) 2.8 2.6 2.9 3.3 3.6 EV/EBITDA (x) 12.0 15.4 14.8 12.6 11.2 Net gearing (%) (incl perps) 45.2 40.4 41.3 36.9 30.1 Consensus net profit - - 623 679 716 MKE vs. Consensus (%) - - (5.4) 3.3 7.4

Wong Chew Hann Adrian Wong [email protected] [email protected] (603) 2297 8686 (603) 2297 8675

THIS REPORT HAS BEEN PREPARED BY MAYBANK INVESTMENT BANK BERHAD PP16832/01/2013 (031128) SEE PAGE 10 FOR IMPORTANT DISCLOSURES AND ANALYST CERTIFICATIONS IJM Corporation

Project Updates

Malaysia-China Kuantan Industrial Park (MCKIP)

 Key takeaways :

o MCKIP is Malaysia’s 1st national-status industrial park, jointly developed by a consortium of Malaysian (51% stake) and Chinese (49%) players. MCKIP’s equivalent sister park based in China is the China-Malaysia Qinzhou Industrial Park (CMQIP) located in Guangxi, at southern China.

o The Malaysian consortium is made up of IJM (40%), Sime Darby (30%) and the State Government (30%) while the Chinese consortium is led by the state-owned conglomerate, Guangxi Beibu Gulf International Port Group with a 95% stake and the Qinzhou Investment Development Co. holding the remaining 5%. IJM’s effective stake is thus 20.4%.

o MCKIP comprises 3 parcels of land totalling 3,000 acres - MCKIP 1 (1,200 acres), MCKIP 2 (1,000 acres) and MCKIP 3 (800 acres). The first 700 acres of MCKIP 1 have been cleared and has been taken up by Alliance Steel for its USD1.4b/MYR5.6b integrated steel mill plant.

Focus of the 3 MCKIP areas

Source: MCKIP

o Under the Public-Private Partnership (PPP) model, MYR1.5b will be spent by the government for infrastructure development around MCKIP, which includes i) a new breakwater at Kuantan Port (MYR1.1b), part of the NWDT and ii) a monument, roads, utilities, and other public infrastructures (for a sum of MYR400m).

o Key incentives for investors under the National Industrial Park status would be the 100% corporate income tax exemption for 15 years commencing from the year the company derives statutory income, and just 15% income tax for qualified knowledge workers until Dec 2020.

o MCKIP is targeting MYR10b of additional investments in 2017. We gather that the next investment to hit the ground (after Alliance Steel) will be the MYR2b clay porcelain manufacturing facility, in which the Beibu Group may take a stake in.

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Investments into MCKIP 1 Investment Investor Project (MYR b) Alliance Steel (M) Sdn Bhd Modern integrated steel mill 5.6 Guangxi Zhongli Enterprise Clay porcelain manufacturing 2.0 Group Co Ltd Zkenergy (Yiyang) New Renewable energy application system Resources Science & 0.2 manufacturing and engineering base Technology Co Ltd Guangxi Investment Group Aluminium processing plant 0.6 Co Ltd Production of concrete panels for the LJ Hightech Material Sdn construction of buildings and bridges and 1.0 Bhd activated rubber particles from scrap tires Development of crystalline silicon solar Wuxi Suntech Power Co Ltd 4.0 cells and modules project

Source: MCKIP

Alliance Steel - Integrated Steel Mill Plant

 Background :

o This MYR5.6b modern integrated steel mill is the first project to enter MCKIP and is also the first of its kind in Malaysia and South East Asia. The 700 acres development will also house the administration building blocks and living quarters for Alliance Steel’s employees (e.3,500 pax).

o The plant is situated within MCKIP 1 (12km from Kuantan Port) with a planned annual capacity of 3.5m tonnes over 4 production lines. An estimated 90% of the plant’s production will be exported.

 Key takeaways :

o Majority of the construction work on-site are handled by local contractors from Kuantan except the main steel plant and blast furnaces which require the Chinese expertise.

o The integrated steel mill plant is expected to commence operation by end-2017 with the steel rolling process to start first. Alliance Steel expects the plant to hit full capacity within 6 months.

o The two blast furnaces within the mill are expected to be fired up in March 2018 with a total capacity of 1,800m3. The furnaces are expected to take a month to hit full capacity.

o The plant is expected to give Kuantan Port a sustainable cargo throughput of 7.0m tonnes p.a.

o An additional MYR200m will be invested in a new tubular conveyor belt (12km in length) to link the steel mill straight to its dedicated berth at Kuantan Port’s New Deepwater Terminal Phase 1A, allowing raw materials to be transferred directly to the steel mill. The belt is expected to be operational beginning October 2017.

o 70% of employees are expected to be local (Malaysians) whilst the remaining 30% of expertise will be from China. However, intentions for further localisation have already been mooted as the hiring of Chinese workers is relatively costlier.

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Aerial view of the 3.5m Integrated Steel Plant Tubular Conveyor Belt

Source: Alliance Steel Source: Alliance Steel

Progress of administration buildings and living quarters Road access around Alliance Steel site

Source: Maybank Kim Eng Source: Maybank Kim Eng

Kuantan Port Expansion

 Background :

o The expansion of Kuantan Port began in 2015 with the Kuantan Port Consortium (KPC) as its master developer. The consortium consists of IJM (60%) and Guangxi Beibu Gulf Group (40%).

o The expansion includes the construction of the i) New Deepwater Terminal (NDWT) Phase 1 and Phase 2, each with 1km long berths and ii) 4.63km new breakwater. Upon completion, Kuantan Port’s capacity will double from 26m tonnes p.a. to 52m tonnes p.a.

o The NDWT will have a basin depth of 16m after Phase 1 and 18m after Phase 2 versus 11m at the existing basin, allowing it to cater to vessels up to 150k DWT (current basin depth allows vessels up to 45k DWT only).

o KPC will invest MYR3b over the two phases of the expansion which will include the capital dredging, land reclamation, berth wall construction and port infrastructure and facilities. The MYR1.1b new breakwater is financed by the government.

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 Progress update:

o Overall construction progress is at 26.7%. Construction has been halted since November 2016 due to the North-East monsoon; construction works have kicked off again since February 2017.

o Phase 1A with a berth length of 400m is expected to be completed by end-2017. Phase 1A has been dedicated for Alliance Steel and is expected to have a capacity of 9m-10m tonnes p.a.. Phase 1B is expected to be completed by end-2018.

o The new breakwater uses the ‘Accropode’ technology which is casted on-site by IJM and produced under license. The new breakwater is in the final phases of construction and is expected to be completed by August 2017. IJM was awarded the work package for the last ~1km of the new breakwater after a change in the previous contractor.

New Deepwater and Breakwater layout at Kuantan Port

Source: Company

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Construction progress of the 4.63km New Breakwater Ongoing construction works at Phase 1, NDWT

Source: Maybank Kim Eng Source: Maybank Kim Eng

East Coast Economic Region

 Background :

o We also met up with the East Coast Economic Region Development Council (ECERDC) during our visit to MCKIP and Kuantan Port last week. ECERDC is the statutory body established under an Act of Parliament.

o ECERDC’s role is to drive projects and programme to make ECER a developed region by 2020. It facilitates coordination between the government entities in the promotion of trade, investment, tourism and development activities within the ECER.

o ECER covers an area of 66,736 sq km, making up 51% of the land mass in . It covers four states – , , Pahang and a part of (). There are 15 industrial parks in ECER, including MCKIP.

 Key takeaways :

o ECER has made tremendous stride, attracting a total MYR101b of investments to-date, meeting 92% of its MYR110b target by 2020.

o Out of the MYR101b commitments, about 40% have been realised. Three sectors – manufacturing, tourism, bio-economy - cumulatively represent 80% of the total investments. (Source: TheSunDaily, 27 Jan 2017)

o Of the MYR101b commitments, a sizeable 45% are foreign investments while the balance 55% are domestic investments. ECERDC is starting efforts to attract investments from Japan.

o ECERDC will be represented in a new entity to be set up for the implementation of the East Coast Rail Line. Officially, construction of the ECRL will start in 2017, and completion is targeted for 2022.

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FYE 31 Mar FY15A FY16A FY17E FY18E FY19E Key Metrics P/E (reported) (x) 22.6 15.3 20.9 17.6 16.0 Core P/E (x) 21.1 24.1 20.9 17.6 16.0 P/BV (x) 1.3 1.4 1.3 1.2 1.2 P/NTA (x) 0.6 1.4 1.3 1.3 1.2 Net dividend yield (%) 2.2 2.9 2.0 2.0 2.0 FCF yield (%) 2.7 4.6 nm 4.3 6.8 EV/EBITDA (x) 12.0 15.4 14.8 12.6 11.2 EV/EBIT (x) 14.6 19.8 18.9 15.6 13.6

INCOME STATEMENT (MYR m) Revenue 5,448.3 5,128.2 6,679.2 7,610.6 7,754.7 Gross profit 1,176.4 905.0 954.6 1,151.8 1,289.2 EBITDA 1,434.8 1,166.7 1,221.9 1,425.1 1,568.7 Depreciation (109.9) (113.1) (118.8) (124.7) (131.0) Amortisation (148.6) (148.6) (148.6) (148.6) (148.6) EBIT 1,176.4 905.0 954.6 1,151.8 1,289.2 Net interest income /(exp) (77.4) (57.1) (65.0) (73.8) (83.4) Associates & JV (30.3) 23.6 16.3 16.3 16.3 Exceptionals (49.3) 284.3 0.0 0.0 0.0 Other pretax income 0.0 0.0 0.0 0.0 0.0 Pretax profit 1,019.4 1,155.8 905.9 1,094.4 1,222.1 Income tax (306.3) (274.3) (231.3) (280.3) (313.5) Minorities (232.1) (87.9) (85.5) (112.9) (139.9) Perpetual securities 0.0 0.0 0.0 0.0 0.0 Discontinued operations 0.0 0.0 0.0 0.0 0.0 Reported net profit 480.9 793.6 589.1 701.2 768.8 Core net profit 530.2 509.3 589.1 701.2 768.8 Preferred Dividends 0.0 0.0 0.0 0.0 0.0

BALANCE SHEET (MYR m) Cash & Short Term Investments 1,818.7 1,679.5 1,180.1 1,222.6 1,573.9 Accounts receivable 2,424.3 2,256.4 2,938.8 3,348.6 3,412.0 Inventory 783.9 1,092.5 1,505.0 1,705.8 1,706.0 Property, Plant & Equip (net) 1,726.8 1,812.6 1,943.8 2,069.0 2,188.0 Intangible assets 3,372.0 3,003.8 3,003.8 3,003.8 3,003.8 Investment in Associates & JVs 1,268.5 1,550.2 1,566.5 1,582.8 1,599.1 Other assets 8,336.5 8,440.7 8,443.0 8,445.4 8,447.8 Total assets 19,730.7 19,835.5 20,580.9 21,378.0 21,930.6 ST interest bearing debt 1,989.4 1,477.4 1,477.4 1,477.4 1,477.4 Accounts payable 2,014.5 2,258.3 2,720.2 3,091.2 3,120.2 LT interest bearing debt 4,158.1 4,333.8 4,133.8 3,933.8 3,733.8 Other liabilities 1,993.0 1,530.0 1,527.0 1,527.0 1,530.0 Total Liabilities 10,155.2 9,599.1 9,858.1 10,029.4 9,861.5 Shareholders Equity 8,429.6 9,028.4 9,429.3 9,942.2 10,522.8 Minority Interest 1,145.9 1,208.0 1,293.5 1,406.4 1,546.3 Total shareholder equity 9,575.5 10,236.4 10,722.8 11,348.7 12,069.1 Perpetual securities 0.0 0.0 0.0 0.0 0.0 Total liabilities and equity 19,730.7 19,835.5 20,580.9 21,378.0 21,930.6

CASH FLOW (MYR m) Pretax profit 1,019.4 1,155.8 905.9 1,094.4 1,222.1 Depreciation & amortisation 258.4 261.7 267.4 273.3 279.5 Adj net interest (income)/exp 77.4 57.1 65.0 73.8 83.4 Change in working capital (529.1) (418.3) (770.0) (365.1) (162.5) Cash taxes paid (306.3) (274.3) (231.3) (280.3) (313.5) Other operating cash flow 30.3 (23.6) (16.3) (16.3) (16.3) Cash flow from operations 550.1 758.5 220.7 779.7 1,092.7 Capex (246.6) (198.9) (250.0) (250.0) (250.0) Free cash flow 303.5 559.6 (29.3) 529.7 842.7 Dividends paid (165.8) (267.9) (188.2) (188.2) (188.2) Equity raised / (purchased) 76.9 (202.3) 0.0 0.0 0.0 Perpetual securities 0.0 0.0 0.0 0.0 0.0 Change in Debt 542.1 (336.3) (200.0) (200.0) (200.0) Perpetual securities distribution 0.0 0.0 0.0 0.0 0.0 Other invest/financing cash flow (886.8) 21.0 (83.7) (92.5) (102.1) Net cash flow (130.2) (225.8) (501.2) 49.0 352.4

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FYE 31 Mar FY15A FY16A FY17E FY18E FY19E Key Ratios Growth ratios (%) Revenue growth (9.3) (5.9) 30.2 13.9 1.9 EBITDA growth (6.9) (18.7) 4.7 16.6 10.1 EBIT growth (12.1) (23.1) 5.5 20.7 11.9 Pretax growth (28.0) 13.4 (21.6) 20.8 11.7 Reported net profit growth (42.0) 65.0 (25.8) 19.0 9.6 Core net profit growth (1.6) (4.0) 15.7 19.0 9.6

Profitability ratios (%) EBITDA margin 26.3 22.8 18.3 18.7 20.2 EBIT margin 21.6 17.6 14.3 15.1 16.6 Pretax profit margin 18.7 22.5 13.6 14.4 15.8 Payout ratio 50.7 45.0 42.6 35.8 32.6

DuPont analysis Net profit margin (%) 8.8 15.5 8.8 9.2 9.9 Revenue/Assets (x) 0.3 0.3 0.3 0.4 0.4 Assets/Equity (x) 2.3 2.2 2.2 2.2 2.1 ROAE (%) 6.3 9.1 6.4 7.2 7.5 ROAA (%) 2.8 2.6 2.9 3.3 3.6

Liquidity & Efficiency Cash conversion cycle 43.9 62.2 65.1 76.2 79.0 Days receivable outstanding 156.7 164.3 140.0 148.7 156.9 Days inventory outstanding 58.0 80.0 81.7 89.5 95.0 Days payables outstanding 170.8 182.1 156.5 162.0 172.9 Dividend cover (x) 2.0 2.2 2.3 2.8 3.1 Current ratio (x) 2.6 3.0 2.8 2.7 2.8

Leverage & Expense Analysis Asset/Liability (x) 1.9 2.1 2.1 2.1 2.2 Net gearing (%) (incl perps) 45.2 40.4 41.3 36.9 30.1 Net gearing (%) (excl. perps) 45.2 40.4 41.3 36.9 30.1 Net interest cover (x) 15.2 15.8 14.7 15.6 15.5 Debt/EBITDA (x) 4.3 5.0 4.6 3.8 3.3 Capex/revenue (%) 4.5 3.9 3.7 3.3 3.2 Net debt/ (net cash) 4,328.9 4,131.8 4,431.2 4,188.6 3,637.4 Source: Company; Maybank

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Research Offices

REGIONAL HONG KONG / CHINA INDONESIA Surachai PRAMUALCHAROENKIT (66) 2658 6300 ext 1470 Sadiq CURRIMBHOY Howard WONG Head of Research Isnaputra ISKANDAR Head of Research [email protected] Regional Head, Research & Economics (852) 2268 0648 (62) 21 8066 8680 • Auto • Conmat • Contractor • Steel (65) 6231 5836 [email protected] [email protected] [email protected] • Strategy • Strategy • Metals & Mining • Cement WONG Chew Hann, CA Suttatip PEERASUB • Oil & Gas - Regional (66) 2658 6300 ext 1430 Regional Head of Institutional Research Rahmi MARINA Benjamin HO (62) 21 8066 8689 [email protected] (603) 2297 8686 [email protected] • Media • Commerce (852) 2268 0632 [email protected] [email protected] ONG Seng Yeow • Consumer & Auto • Banking & Finance Regional Head of Retail Research Sutthichai KUMWORACHAI (65) 6231 5839 Christopher WONG Aurellia SETIABUDI (66) 2658 6300 ext 1400 [email protected] (852)2268 0652 [email protected] (62) 21 8066 8691 [email protected] • HK & China Properties [email protected] • Energy • Petrochem TAN Sin Mui • Property Jacqueline KO, CFA Director of Research Termporn TANTIVIVAT (852) 2268 0633 [email protected] Pandu ANUGRAH (65) 6231 5849 [email protected] (66) 2658 6300 ext 1520 • Consumer Staples & Durables (62) 21 8066 8688 [email protected] [email protected] ECONOMICS • Property Ka Leong LO, CFA • Infra • Construction • Transport• Telcos Suhaimi ILIAS (852) 2268 0630 [email protected] Chief Economist • Consumer Discretionary & Auto Janni ASMAN Jaroonpan WATTANAWONG (62) 21 8066 8687 (66) 2658 6300 ext 1404 Malaysia | Philippines Mitchell KIM (603) 2297 8682 [email protected] [email protected] [email protected] (852) 2268 0634 [email protected] • Cigarette • Healthcare • Retail • Transportation • Small cap CHUA Hak Bin • Internet & Telcos Regional Thematic Macroeconomist Adhi TASMIN (65) 6231 5830 [email protected] Ning MA (62) 21 8066 8694 VIETNAM (852) 2268 0672 [email protected] [email protected] LEE Ju Ye • Insurance LE Hong Lien, ACCA Singapore • Plantations Head of Institutional Research (65) 6231 5844 [email protected] (84) 8 44 555 888 x 8181 Ricky NG, CFA Anthony LUKMAWIJAYA [email protected] Tim LEELAHAPHAN (852) 2268 0689 [email protected] (62) 21 8066 8690 • Strategy • Consumer • Diversified • Utilities Thailand • Regional Renewables [email protected] (66) 2658 6300 ext 1420 • HK & China Properties • Aviation [email protected] THAI Quang Trung, CFA, Deputy Manager, Sonija LI, CFA, FRM PHILIPPINES Institutional Research Saktiandi SUPAAT (852) 2268 0641 [email protected] (84) 8 44 555 888 x 8180 Head, FX Research • Gaming Michael BENGSON Head of Research [email protected] (65) 6320 1379 [email protected] (63) 2 849 8840 • Real Estate • Construction • Materials Stefan CHANG, CFA [email protected] STRATEGY (852) 2268 0675 [email protected] • Strategy • Utilities • Conglomerates • Telcos Le Nguyen Nhat Chuyen • Technology – Regional (84) 8 44 555 888 x 8082 Sadiq CURRIMBHOY Lovell SARREAL [email protected] Global Strategist INDIA (63) 2 849 8841 • Oil & Gas (65) 6231 5836 [email protected] [email protected] Jigar SHAH Head of Research • Consumer • Media • Cement NGUYEN Thi Ngan Tuyen, Head of Retail Research Willie CHAN (91) 22 6623 2632 [email protected] (84) 8 44 555 888 x 8081 Hong Kong / Regional • Strategy • Oil & Gas • Automobile • Cement Rommel RODRIGO [email protected] (63) 2 849 8839 (852) 2268 0631 [email protected] • Food & Beverage • Oil&Gas • Banking Vishal MODI [email protected] • Conglomerates • Property • Gaming (91) 22 6623 2607 [email protected] MALAYSIA • Ports/ Logistics TRINH Thi Ngoc Diep • Banking & Financials (84) 4 44 555 888 x 8208 WONG Chew Hann, CA Head of Research Katherine TAN [email protected] (603) 2297 8686 [email protected] Neerav DALAL (63) 2 849 8843 • Technology • Utilities • Construction • Strategy (91) 22 6623 2606 [email protected] [email protected] Desmond CH’NG, ACA • Software Technology • Telcos • Banks • Construction PHAM Nhat Bich (603) 2297 8680 (84) 8 44 555 888 x 8083 [email protected] SINGAPORE THAILAND [email protected] • Banking & Finance • Consumer • Manufacturing • Fishery Neel SINHA Head of Research Maria LAPIZ Head of Institutional Research LIAW Thong Jung (65) 6231 5838 [email protected] Dir (66) 2257 0250 | (66) 2658 6300 ext 1399 (603) 2297 8688 [email protected] NGUYEN Thi Sony Tra Mi • Strategy [email protected] • Oil & Gas Services- Regional (84) 8 44 555 888 x 8084 • SMID Caps – Regional • Strategy • Consumer • Materials • Ind. Estates [email protected] ONG Chee Ting, CA Gregory YAP • Port operation • Pharmaceutical (603) 2297 8678 [email protected] Sittichai DUANGRATTANACHAYA (65) 6231 5848 [email protected] • Food & Beverage • Plantations - Regional (66) 2658 6300 ext 1393 • SMID Caps [email protected] Mohshin AZIZ • Technology & Manufacturing • Telcos • Services Sector • Transport TRUONG Quang Binh (603) 2297 8692 [email protected] (84) 4 44 555 888 x 8087 Derrick HENG, CFA • Aviation - Regional • Petrochem Yupapan POLPORNPRASERT [email protected] (65) 6231 5843 [email protected] (66) 2658 6300 ext 1395 • Rubber plantation • Tyres and Tubes • Oil&Gas YIN Shao Yang, CPA • Transport • Property • REITs (Office) (603) 2297 8916 [email protected] [email protected] • Oil & Gas • Gaming – Regional • Media John CHEONG, CFA TAN Chi Wei, CFA (65) 6231 5845 [email protected] • Small & Mid Caps • Healthcare Tanawat RUENBANTERNG (603) 2297 8690 [email protected] (66) 2658 6300 ext 1394 • Power • Telcos Ng Li Hiang [email protected] WONG Wei Sum, CFA (65) 6231 5840 [email protected] • Banks & Diversified Financials (603) 2297 8679 [email protected] • Banks • Property Vorapoj HONGPINYO (66) 2658 6300 ext 1392 LEE Yen Ling [email protected] (603) 2297 8691 [email protected] • Real Estate & Contractors • Building Materials • Glove • Ports • Shipping Ivan YAP Sukit UDOMSIRIKUL Head of Retail Research (603) 2297 8612 [email protected] (66) 2658 6300 ext 5090 • Automotive • Semiconductor • Technology [email protected] Kevin WONG Mayuree CHOWVIKRAN (603) 2082 6824 [email protected] (66) 2658 6300 ext 1440 • REITs • Consumer Discretionary [email protected] LIEW Wei Han • Strategy (603) 2297 8676 [email protected] Padon VANNARAT • Consumer Staples (66) 2658 6300 ext 1450 Tee Sze Chiah Head of Retail Research [email protected] (603) 2297 6858 [email protected] • Strategy

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APPENDIX I: TERMS FOR PROVISION OF REPORT, DISCLAIMERS AND DISCLOSURES

DISCLAIMERS This research report is prepared for general circulation and for information purposes only and under no circumstances should it be considered or intended as an offer to sell or a solicitation of an offer to buy the securities referred to herein. Investors should note that values of such securities, if any, may fluctuate and that each security’s price or value may rise or fall. Opinions or recommendations contained herein are in form of technical ratings and fundamental ratings. Technical ratings may differ from fundamental ratings as technical valuations apply different methodologies and are purely based on price and volume-related information extracted from the relevant jurisdiction’s stock exchange in the equity analysis. Accordingly, investors’ returns may be less than the original sum invested. Past performance is not necessarily a guide to future performance. This report is not intended to provide personal investment advice and does not take into account the specific investment objectives, the financial situation and the particular needs of persons who may receive or read this report. Investors should therefore seek financial, legal and other advice regarding the appropriateness of investing in any securities or the investment strategies discussed or recommended in this report. The information contained herein has been obtained from sources believed to be reliable but such sources have not been independently verified by Maybank Investment Bank Berhad, its subsidiary and affiliates (collectively, “MKE”) and consequently no representation is made as to the accuracy or completeness of this report by MKE and it should not be relied upon as such. Accordingly, MKE and its officers, directors, associates, connected parties and/or employees (collectively, “Representatives”) shall not be liable for any direct, indirect or consequential losses or damages that may arise from the use or reliance of this report. Any information, opinions or recommendations contained herein are subject to change at any time, without prior notice. This report may contain forward looking statements which are often but not always identified by the use of words such as “anticipate”, “believe”, “estimate”, “intend”, “plan”, “expect”, “forecast”, “predict” and “project” and statements that an event or result “may”, “will”, “can”, “should”, “could” or “might” occur or be achieved and other similar expressions. Such forward looking statements are based on assumptions made and information currently available to us and are subject to certain risks and uncertainties that could cause the actual results to differ materially from those expressed in any forward looking statements. Readers are cautioned not to place undue relevance on these forward-looking statements. MKE expressly disclaims any obligation to update or revise any such forward looking statements to reflect new information, events or circumstances after the date of this publication or to reflect the occurrence of unanticipated events. MKE and its officers, directors and employees, including persons involved in the preparation or issuance of this report, may, to the extent permitted by law, from time to time participate or invest in financing transactions with the issuer(s) of the securities mentioned in this report, perform services for or solicit business from such issuers, and/or have a position or holding, or other material interest, or effect transactions, in such securities or options thereon, or other investments related thereto. In addition, it may make markets in the securities mentioned in the material presented in this report. One or more directors, officers and/or employees of MKE may be a director of the issuers of the securities mentioned in this report to the extent permitted by law. This report is prepared for the use of MKE’s clients and may not be reproduced, altered in any way, transmitted to, copied or distributed to any other party in whole or in part in any form or manner without the prior express written consent of MKE and MKE and its Representatives accepts no liability whatsoever for the actions of third parties in this respect. This report is not directed to or intended for distribution to or use by any person or entity who is a citizen or resident of or located in any locality, state, country or other jurisdiction where such distribution, publication, availability or use would be contrary to law or regulation. This report is for distribution only under such circumstances as may be permitted by applicable law. The securities described herein may not be eligible for sale in all jurisdictions or to certain categories of investors. Without prejudice to the foregoing, the reader is to note that additional disclaimers, warnings or qualifications may apply based on geographical location of the person or entity receiving this report. Malaysia Opinions or recommendations contained herein are in the form of technical ratings and fundamental ratings. Technical ratings may differ from fundamental ratings as technical valuations apply different methodologies and are purely based on price and volume-related information extracted from Bursa Malaysia Securities Berhad in the equity analysis. Singapore This report has been produced as of the date hereof and the information herein may be subject to change. Maybank Kim Eng Research Pte. Ltd. (“Maybank KERPL”) in Singapore has no obligation to update such information for any recipient. For distribution in Singapore, recipients of this report are to contact Maybank KERPL in Singapore in respect of any matters arising from, or in connection with, this report. If the recipient of this report is not an accredited investor, expert investor or institutional investor (as defined under Section 4A of the Singapore Securities and Futures Act), Maybank KERPL shall be legally liable for the contents of this report, with such liability being limited to the extent (if any) as permitted by law. Thailand Except as specifically permitted, no part of this presentation may be reproduced or distributed in any manner without the prior written permission of Maybank Kim Eng Securities (Thailand) Public Company Limited. Maybank Kim Eng Securities (Thailand) Public Company Limited (“MBKET”) accepts no liability whatsoever for the actions of third parties in this respect. Due to different characteristics, objectives and strategies of institutional and retail investors, the research reports of MBKET Institutional and Retail Research Department may differ in either recommendation or target price, or both. MBKET Retail Research is intended for retail investors (http://kelive.maybank- ke.co.th) while Maybank Kim Eng Institutional Research is intended only for institutional investors based outside Thailand only. The disclosure of the survey result of the Thai Institute of Directors Association (“IOD”) regarding corporate governance is made pursuant to the policy of the Office of the Securities and Exchange Commission. The survey of the IOD is based on the information of a company listed on the Stock Exchange of Thailand and the market for Alternative Investment disclosed to the public and able to be accessed by a general public investor. The result, therefore, is from the perspective of a third party. It is not an evaluation of operation and is not based on inside information. The survey result is as of the date appearing in the Corporate Governance Report of Thai Listed Companies. As a result, the survey may be changed after that date. MBKET does not confirm nor certify the accuracy of such survey result. The disclosure of the Anti-Corruption Progress Indicators of a listed company on the Stock Exchange of Thailand, which is assessed by Thaipat Institute, is made in order to comply with the policy and sustainable development plan for the listed companies of the Office of the Securities and Exchange Commission. Thaipat Institute made this assessment based on the information received from the listed company, as stipulated in the form for the assessment of Anti- corruption which refers to the Annual Registration Statement (Form 56-1), Annual Report (Form 56-2), or other relevant documents or reports of such listed company. The assessment result is therefore made from the perspective of Thaipat Institute that is a third party. It is not an assessment of operation and is not based on any inside information. Since this assessment is only the assessment result as of the date appearing in the assessment result, it may be changed after that date or when there is any change to the relevant information. Nevertheless, MBKET does not confirm, verify, or certify the accuracy and completeness of the assessment result. US This third-party research report is distributed in the United States (“US”) to Major US Institutional Investors (as defined in Rule 15a-6 under the Securities Exchange Act of 1934, as amended) only by Maybank Kim Eng Securities USA Inc (“Maybank KESUSA”), a broker-dealer registered in the US (registered under Section 15 of the Securities Exchange Act of 1934, as amended). All responsibility for the distribution of this report by Maybank KESUSA in the US shall be borne by Maybank KESUSA. This report is not directed at you if MKE is prohibited or restricted by any legislation or regulation in any jurisdiction from making it available to you. You should satisfy yourself before reading it that Maybank KESUSA is permitted to provide research material concerning investments to you under relevant legislation and regulations. All U.S. persons receiving and/or accessing this report and wishing to effect transactions in any security mentioned within must do so with: Maybank Kim Eng Securities USA Inc. 777 Third Avenue 21st Floor New York, New York 1- (212) 688-8886 and not with, the issuer of this report.

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IJM Corporation

UK This document is being distributed by Maybank Kim Eng Securities (London) Ltd (“Maybank KESL”) which is authorized and regulated, by the Financial Conduct Authority and is for Informational Purposes only. This document is not intended for distribution to anyone defined as a Retail Client under the Financial Services and Markets Act 2000 within the UK. Any inclusion of a third party link is for the recipients convenience only, and that the firm does not take any responsibility for its comments or accuracy, and that access to such links is at the individuals own risk. Nothing in this report should be considered as constituting legal, accounting or tax advice, and that for accurate guidance recipients should consult with their own independent tax advisers.

DISCLOSURES

Legal Entities Disclosures Malaysia: This report is issued and distributed in Malaysia by Maybank Investment Bank Berhad (15938- H) which is a Participating Organization of Bursa Malaysia Berhad and a holder of Capital Markets and Services License issued by the Securities Commission in Malaysia. Singapore: This report is distributed in Singapore by Maybank KERPL (Co. Reg No 198700034E) which is regulated by the Monetary Authority of Singapore. Indonesia: PT Maybank Kim Eng Securities (“PTMKES”) (Reg. No. KEP-251/PM/1992) is a member of the Indonesia Stock Exchange and is regulated by the Financial Services Authority (Indonesia). Thailand: MBKET (Reg. No.0107545000314) is a member of the Stock Exchange of Thailand and is regulated by the Ministry of Finance and the Securities and Exchange Commission. Philippines: Maybank ATRKES (Reg. No.01-2004-00019) is a member of the Philippines Stock Exchange and is regulated by the Securities and Exchange Commission. Vietnam: Maybank Kim Eng Securities Limited (License Number: 117/GP-UBCK) is licensed under the State Securities Commission of Vietnam. Hong Kong: KESHK (Central Entity No AAD284) is regulated by the Securities and Futures Commission. India: Kim Eng Securities India Private Limited (“KESI”) is a participant of the National Stock Exchange of India Limited and the Bombay Stock Exchange and is regulated by Securities and Exchange Board of India (“SEBI”) (Reg. No. INZ000010538). KESI is also registered with SEBI as Category 1 Merchant Banker (Reg. No. INM 000011708) and as Research Analyst (Reg No: INH000000057) US: Maybank KESUSA is a member of/ and is authorized and regulated by the FINRA – Broker ID 27861. UK: Maybank KESL (Reg No 2377538) is authorized and regulated by the Financial Services Authority.

Disclosure of Interest Malaysia: MKE and its Representatives may from time to time have positions or be materially interested in the securities referred to herein and may further act as market maker or may have assumed an underwriting commitment or deal with such securities and may also perform or seek to perform investment banking services, advisory and other services for or relating to those companies.

Singapore: As of 14 February 2017, Maybank KERPL and the covering analyst do not have any interest in any companies recommended in this research report.

Thailand: MBKET may have a business relationship with or may possibly be an issuer of derivative warrants on the securities /companies mentioned in the research report. Therefore, Investors should exercise their own judgment before making any investment decisions. MBKET, its associates, directors, connected parties and/or employees may from time to time have interests and/or underwriting commitments in the securities mentioned in this report.

Hong Kong: As of 14 February 2017, KESHK and the authoring analyst do not have any interest in any companies recommended in this research report.

India: As of 14 February 2017, and at the end of the month immediately preceding the date of publication of the research report, KESI, authoring analyst or their associate / relative does not hold any financial interest or any actual or beneficial ownership in any shares or having any conflict of interest in the subject companies except as otherwise disclosed in the research report.

In the past twelve months KESI and authoring analyst or their associate did not receive any compensation or other benefits from the subject companies or third party in connection with the research report on any account what so ever except as otherwise disclosed in the research report.

MKE may have, within the last three years, served as manager or co-manager of a public offering of securities for, or currently may make a primary market in issues of, any or all of the entities mentioned in this report or may be providing, or have provided within the previous 12 months, significant advice or investment services in relation to the investment concerned or a related investment and may receive compensation for the services provided from the companies covered in this report.

OTHERS Analyst Certification of Independence The views expressed in this research report accurately reflect the analyst’s personal views about any and all of the subject securities or issuers; and no part of the research analyst’s compensation was, is or will be, directly or indirectly, related to the specific recommendations or views expressed in the report.

Reminder Structured securities are complex instruments, typically involve a high degree of risk and are intended for sale only to sophisticated investors who are capable of understanding and assuming the risks involved. The market value of any structured security may be affected by changes in economic, financial and political factors (including, but not limited to, spot and forward interest and exchange rates), time to maturity, market conditions and volatility and the credit quality of any issuer or reference issuer. Any investor interested in purchasing a structured product should conduct its own analysis of the product and consult with its own professional advisers as to the risks involved in making such a purchase.

No part of this material may be copied, photocopied or duplicated in any form by any means or redistributed without the prior consent of MKE.

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IJM Corporation

Historical recommendations and target price: IJM Corporation (IJM MK)

14 Ogos 22 Sept 25 Feb 29 Nov Buy : RM3.9 Buy : RM3.7 Hold : RM3.6 Buy : RM3.6 3.8

3.6

3.4

3.2

3.0

2.8 Ogos-15 Nov-15 Feb-16 Mei-16 Ogos-16 Nov-16 Feb-17

IJM Corporation

Definition of Ratings Maybank Kim Eng Research uses the following rating system BUY Return is expected to be above 10% in the next 12 months (excluding dividends) HOLD Return is expected to be between - 10% to +10% in the next 12 months (excluding dividends) SELL Return is expected to be below -10% in the next 12 months (excluding dividends)

Applicability of Ratings The respective analyst maintains a coverage universe of stocks, the list of which may be adjusted according to needs. Investment ratings are only applicable to the stocks which form part of the coverage universe. Reports on companies which are not part of the coverage do not carry investment ratings as we do not actively follow developments in these companies.

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IJM Corporation

 Malaysia  Singapore  London  New York Maybank Investment Bank Berhad Maybank Kim Eng Securities Pte Ltd Maybank Kim Eng Securities Maybank Kim Eng Securities USA (A Participating Organisation of Maybank Kim Eng Research Pte Ltd (London) Ltd Inc Bursa Malaysia Securities Berhad) 50 North Canal Road PNB House 777 Third Avenue, 21st Floor 33rd Floor, Menara Maybank, Singapore 059304 77 Queen Victoria Street New York, NY 10017, U.S.A. 100 Jalan Tun Perak, London EC4V 4AY, UK 50050 Kuala Lumpur Tel: (65) 6336 9090 Tel: (212) 688 8886 Tel: (603) 2059 1888; Tel: (44) 20 7332 0221 Fax: (212) 688 3500 Fax: (603) 2078 4194 Fax: (44) 20 7332 0302

Stockbroking Business:  Hong Kong  Indonesia  India Level 8, Tower C, Dataran Maybank, Kim Eng Securities (HK) Ltd PT Maybank Kim Eng Securities Kim Eng Securities India Pvt Ltd No.1, Jalan Maarof Level 30, Sentral Senayan III, 22nd Floor 2nd Floor, The International, 59000 Kuala Lumpur Three Pacific Place, Jl. Asia Afrika No. 8 16, Maharishi Karve Road, Tel: (603) 2297 8888 1 Queen’s Road East, Gelora Bung Karno, Senayan Churchgate Station, Fax: (603) 2282 5136 Hong Kong Jakarta 10270, Indonesia Mumbai City - 400 020, India

Tel: (852) 2268 0800 Tel: (62) 21 2557 1188 Tel: (91) 22 6623 2600 Fax: (852) 2877 0104 Fax: (62) 21 2557 1189 Fax: (91) 22 6623 2604

 Philippines  Thailand  Vietnam  Saudi Arabia Maybank ATR Kim Eng Securities Inc. Maybank Kim Eng Securities Maybank Kim Eng Securities Limited In association with 17/F, Tower One & Exchange Plaza (Thailand) Public Company Limited 4A-15+16 Floor Vincom Center Dong Anfaal Capital Ayala Triangle, Ayala Avenue 999/9 The Offices at Central World, Khoi, 72 Le Thanh Ton St. District 1 Villa 47, Tujjar Jeddah Makati City, Philippines 1200 20th - 21st Floor, Ho Chi Minh City, Vietnam Prince Mohammed bin Abdulaziz Rama 1 Road Pathumwan, Street P.O. Box 126575 Tel: (63) 2 849 8888 Bangkok 10330, Thailand Tel : (84) 844 555 888 Jeddah 21352 Fax: (63) 2 848 5738 Fax : (84) 8 38 271 030 Tel: (66) 2 658 6817 (sales) Tel: (966) 2 6068686 Tel: (66) 2 658 6801 (research) Fax: (966) 26068787

 South Asia Sales Trading  North Asia Sales Trading Kevin Foy Andrew Lee Regional Head Sales Trading [email protected] [email protected] Tel: (852) 2268 0283 Tel: (65) 6636-3620 US Toll Free: 1 877 837 7635 US Toll Free: 1-866-406-7447

Malaysia Thailand Joann Lim Tanasak Krishnasreni [email protected] [email protected] Tel: (603) 2717 5166 Tel: (66)2 658 6820

Indonesia London Harianto Liong Scott Kinnear-Nock [email protected] [email protected] Tel: (62) 21 2557 1177 Tel: (44) 207-332-0221

New York India Andrew Dacey Manish Modi [email protected] [email protected] Tel: (212) 688 2956 Tel: (91)-22-6623-2601

Vietnam Philippines Patrick Mitchell Keith Roy [email protected] [email protected] Tel: (84)-8-44-555-888 x8080 Tel: (63) 2 848-5288 www.maybank-ke.com | www.maybank-keresearch.com

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