January 12, 2016

Jumbo Group Ltd (JUMBO SP) BUY Share Price SGD 0.43 Early Hong Bao from ? 12m Price Target SGD 0.58 (+36%) Previous Price Target SGD 0.58

Faster turnaround in China suggested Company description F&B retailer in Singapore and China, most famous for Nuggets of information gleaned from our recent meeting suggest a faster

its chilli crabs and JUMBO Seafood brand. Has five

turnaround for its new China outlets. Raffles City ’s start-up other brands in its stable. costs could be lower than expected and IFC Mall could break even sooner, as it will open in time to catch CNY business. 1QFY09/16 should provide insights and potentially, earnings upside. Our BUY call will be Statistics reinforced if current forecasts prove too conservative. We leave them 52w high/low (SGD) na/na unchanged for now. BUY with a blended 25x P/E and DCF TP (WACC 9.2%) 3m avg turnover (USDm) 3.5 of SGD0.58. Free float (%) 24.3 Issued shares (m) 641 Market capitalisation SGD272.6M ConsumerStaples Start-up costs could be lower than expected USD190M Management says the cost of starting up its first outlet already includes Major shareholders: staff costs for subsequent outlets and that only 50% of the second JBO Holdings 57.9% outlet’s staff are new hires; the other half was hired earlier. This Mr Tan Gee Jian 6.6%

suggests that the path to profitability could be shorter than expected for Orchid 1 Investments 6.2%

its newer outlets, as start-up costs for additional outlets should be lower Price Performance

than the first. 0.480 180 0.460 170 Chinese contributions could equal Singapore’s, with 0.440 160

Singapore better margins 0.420 150 0.400 140 In China, Jumbo is tapping growing Chinese wealth and hunger for new 0.380 130 dining concepts. It has three outlets in Shanghai and believes the market 0.360 120 can easily support 10. Assuming SGD10m revenue per outlet pa, China 0.340 110 could eventually be a SGD100m market for Jumbo, equalling Singapore’s 0.320 100 0.300 90 current contribution, with better margins to boot. Nov-15 Nov-15 Dec-15 Dec-15 Jan-16

Room for Singapore to grow faster Jumbo Group Ltd - (LHS, SGD) Jumbo Group Ltd / Straits Times Index - (RHS, %) Jumbo may introduce an innovative lunch menu featuring its signature -1M -3M -12M dishes to increase daytime business. Right now, most of its business is at Absolute (%) 15 na na night. It hopes that its new menu would attract more corporate clients Relative to index (%) 20 na na Source: FactSet during the day. In addition, we believe there is an opportunity to add space at its Riverside outlet by taking over adjacent space. We estimate that 50% more space at this outlet could boost FY17E revenue by 3%.

FYE Sep (SGD m) FY14A FY15A FY16E FY17E FY18E Revenue 112 123 147 169 191 EBITDA 19 18 22 25 31 Core net profit 13 14 15 17 20 Core EPS (cts) 2.1 2.1 2.3 2.6 3.1 Core EPS growth (%) 39.8 3.0 8.6 11.1 20.5 Net DPS (cts) 0.0 8.1 0.7 0.8 0.9 Core P/E (x) 20.4 19.8 18.3 16.4 13.6 P/BV (x) 5.8 4.8 6.3 4.9 3.9 Net dividend yield (%) 0.0 19.0 1.6 1.8 2.2 ROAE (%) 31.8 26.4 29.8 33.7 31.8 ROAA (%) 20.8 17.8 18.5 19.2 19.0 EV/EBITDA (x) na na 10.3 9.1 7.3 Net debt/equity (%) net cash net cash net cash net cash net cash Consensus net profit - - na na na MKE vs. Consensus (%) - - na na na

Gregory Yap [email protected] (65) 6231 5848

SEE PAGE 10 FOR IMPORTANT DISCLOSURES AND ANALYST CERTIFICATIONS Co. Reg No: 198700034E MICA (P) : 099/03/2012 Jumbo Group Ltd

Company Proposition Price Drivers

. A restaurant operator whose greatest value proposition is Revenue breakdown 1 2 3 4 ability to generate high demand for its business with reasonable prices and consistent taste. . Iconic dishes, footprint of outlets in ideal locations, strong brands and effective front- and back-end operations provide high defensible margins. . Branding and identity that hinge on signature seafood such as chilli crab, a national dish. Helps it stand out in crowded markets especially when expanding overseas. 1 . Low-cost cash business financed by suppliers’ credit. High FCF generation supports aggressive expansion plans yet provides future dividend support for shareholders.

How Jumbo stacks up on profitability & returns Source: Company, Maybank Kim Eng

Flagship brands: Avg 3Y Net Margin Jumbo - JUMBO SEAFOOD 12.0 Japan Foods - Ajisen Ramen Jumbo Japan Foods ABR - Swensen's, Gloria Jean's Coffees 10.0 Listed just in Nov 2015, trading history is too short to Soup Restaurant - SOUP BreadTalk - Din Tai Fung, Carl's Jr 8.0 identify inflexion points. We believe market will focus on its Sakae Holdings - Sakae Sushi ABR Holdings opening of new outlets in China and/or introduction of new Auric Pacific - Delifrance, Food Junction 6.0 Tung Lok - TungLok, Lao Soup Restaurant dining concepts. 4.0 Sakae Holdings 1. Second China JUMBO SEAFOOD outlet opened in Raffles BreadTalk Auric Pacific 2.0 City Shanghai in Aug 2015. 0.0 2. Third China outlet opening in IFC Mall in Jan 2016. (70.0) (60.0) (50.0) (40.0) (30.0) (20.0) (10.0) 0.0 10.0 20.0 30.0 40.0 (2.0) Avg 3Y ROE 3. Fourth China outlet assumed to open in Oct 2016. (4.0) 4. Fifth China outlet assumed to open in Oct 2017, fourth Tung Lok (6.0) JPOT outlet in Singapore assumed to open in mid-FY17 Source: FactSet estimates, Maybank Kim Eng

Financial Metrics Swing Factors

. Revenue growth. Given two new JUMBO outlets in China, Upside would expect to see increasingly stronger topline growth in next 3-4 quarters, unless other brands underperform. . Better-than-expected Singapore and China sales, . EBIT & net margins. Gross margin (excluding direct costs especially from new outlets. such as food & rental) is controllable. There may be . Lower-than-expected food and staff costs that could lead quarters of higher start-up costs where margins fall below to better-than-expected margins. trend, but generally expect good indirect cost . Expectations of higher dividends or articulation of a management and efficient tax planning. dividend policy. . Watch for deteriorating asset & liability turns. Strong FCF generation comes from AP days far exceeding AR and stock days. Don’t be alarmed if FCF is dragged down by capex. Downside

Strong revenue growth with stable margins expected . Any changes in China’s food safety laws that could affect China’s import of mud crabs. 25.0% . Shortage of critical ingredients for its signature dishes: 19% 20.0% crabs, other seafood. . Epidemics or health scares that can damage its 15% 15.0% 13% reputation or cuisine eg mass food poisoning, salmonella. 9% 10.0%

12.2% 12.3% 12.2% 13.2% 5.0% 10.4% 10.2% 9.8% 10.4%

0.0% FY15 FY16E FY17E FY18E

EBIT margin Net margin Revenue growth Source: Company data, Maybank Kim Eng estimates

[email protected]

January 12, 2016 2

Jumbo Group Ltd

1. Jumbo’s China story gets even better

1.1 Start-up costs could be lower than expected We currently expect Jumbo’s second and third outlets in and IFC Mall to turn profitable only in their second year of operations. We took our cue from its first outlet at iAPM Mall. During our recent company visit, however, management shared that start- up costs for its first outlet already included staff costs for subsequent outlets. Even then, its first outlet broke even in its first year and turned a profit in its second. Some 50% of the staff currently manning the Raffles City outlet were already hired when the iAPM Mall outlet was opened. As such, we think that start-up costs for additional outlets should be lower than the first and their turnaround should be faster. We were expecting staff costs in China to account for 15-20% of revenue, but this could be lower.

Jumbo also expects to open 3 more JUMBO restaurants in China in FY16- 18, taking the number to 6 in Shanghai by FY18. Management believes Shanghai alone is big enough to support 10 JUMBO outlets. With each new outlet, additional staff will have to be trained but a larger revenue base should produce faster scale economies.

1.2 Latest outlets expected to do well Sales at its latest two outlets should be encouraging: Figure 1: IFC Mall location . Raffles City outlet busy. Although this second outlet is located on the sixth floor of the Raffles City mall, it has been “busy”, according to management, since its opening in Aug 2015. The mall is more popular with younger customers and Jumbo has adjusted its menu and pricing to suit the demographic.

. IFC Mall outlet will open in time for CNY. Its IFC Mall outlet has a number of advantages over its iAPM or Raffles City malls. First, it was soft-launched last week and will be fully opened by the third week of Jan 2016. This means it is in time to catch Chinese New Year crowds, which may precipitate a faster-than-expected turnaround. Second, due to its central location in the Pudong financial district near the Ritz Carlton hotel, HSBC headquarters, and Superbrands Mall, Jumbo expects this outlet to serve more business

. clients on corporate expense accounts, typically with higher spending Source: Google Map power.

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1.3 China contributions to equal Singapore’s, with better margins China currently contributes 10% to group revenue and its margins are similar to Singapore’s. However, if Jumbo eventually opens 10 outlets and each contributes SGD10m revenue pa, Jumbo’s China market could equal its Singapore market, with better margins to boot. Its iAPM Mall outlet crossed the SGD10m revenue mark last year. Longer term, we also expect Jumbo’s margins in China to exceed Singapore’s, primarily due to superior table-spend and cost advantages. Management believes that its operating costs and capex in China will remain tightly controlled by the following:

. No central kitchen needed for now. Management does not foresee the need for heavy investment in a central kitchen in China, unlike in Singapore. This will assuage investors’ wariness over cost spikes that could dilute profitability. We said in our initiation report on 4 Jan 2016 that Jumbo is unlikely to open a central kitchen in Shanghai until this can be supported by at least six outlets. During our recent meeting, management suggested that even with 10 outlets, it may not need one, as one of its existing restaurants can double as a central kitchen. This will only be used for preparing fresh ingredients such as cutting and chopping. Its all-important pastes will still be centrally produced in Singapore.

. Good rental rates. Jumbo signs 5-6 year leases with its landlords in China. We understand that its 30% equity partner, Singapore-based BreadTalk (BREAD SP, Not Rated), helped with its initial breakthrough in Shanghai by introducing Jumbo to landlords such as Sun Hung Kai Properties (16 HK, Not Rated) and CapitaLand Mall Asia, a private subsidiary of Capitaland (CT SP, BUY, TP SGD3.88). Management described its rental rates as “good” as Jumbo has substantial bargaining power. Its outlets help to draw retail traffic to the malls. Thus, its rents are mostly fixed with as little pegging to gross turnover as possible, allowing it to maximise profitability. Rental accounts for c.9% of group sales currently.

. Low staff costs. Jumbo does not believe it will trip over staff costs in China due to its plentiful labour supply. It works with local universities to fill its staffing needs. It finds this a better solution than hiring from rivals as students are more trainable. This source of supply is also more sustainable as Jumbo is able to offer employees a prospective career path in Singapore. This serves to kill two birds with one stone as its Shanghai graduate employees can be employed under the S-Pass employment pass scheme in Singapore – relatively unhampered by the restrictive manpower policies here.

1.4 Keeping more profits by going it alone BreadTalk is a 30% partner in Jumbo’s first three restaurants in Shanghai. However, we understand that their agreement only extends to seafood restaurants from Shanghai to Nanjing, essentially Jiangsu province. For non-seafood restaurants such as Ng Ah Sio or JPOT, Jumbo has the freedom to retain 100% ownership. Similarly, if Jumbo opens seafood restaurants outside Jiangsu, say in Beijing, it can own 100% of these outlets, unless it strikes separate agreements. This is advantageous to Jumbo in the long run as BreadTalk’s most important contribution was paving the way for its foray into China in the early days. As its brand takes hold, Jumbo should be able to go it alone and maximise its profits.

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Jumbo Group Ltd

2. Room to grow faster in Singapore

2.1 Growth initiatives Other than opening new outlets and raising prices, which are naturally capped by site availability and competition, Jumbo has identified at least two other ways for it to grow faster in Singapore.

. Expand existing outlets by taking over adjacent space. There may be an opportunity to do this soon with its Riverside outlet which is adjacent to Café Iguana, a Mexican restaurant owned by Brewerks, and Chen Fu Ji Fried Rice occupying the unit above. Eyeball estimates suggest Café Iguana’s space at c.4,500 sf and Chen Fu Ji at c.3,000 sf. The owner of Chen Fu Ji, well-known in Singapore for its expensive Golden Imperial Fried Rice, admitted in a recent interview that the dish is a loss-leader and with rising costs of ingredients, manpower and rent, it will have to be priced at SGD125 per plate instead of SGD25 in order to make money.1

At 5,447 sf or 12% of its total GFA, Riverside is Jumbo’s smallest outlet. Still, thanks to its location in a tourist hot spot, we think Riverside’s table turns are likely to be among the highest of its five outlets. This implies that its revenue contribution could be better than its 12% GFA attribution. Assuming it contributes 18% to Jumbo’s Singapore seafood revenue, we estimate that every 50% increase in Riverside’s space could lift group revenue by 3% in FY17E. Admittedly, this may be optimistic as we do not know how many tables Jumbo can fit into any additional space but the trend should be upwards.

Figure 2: Sensitivity analysis of Riverside expansion Est. FY16E Est. FY16E JUMBO outlets in Singapore GFA (sf) GFA (%) rev ('000) rev (%) - East Coast Seafood Centre 20,484 45% 55,916 48% - Riverside Point 5,447 12% 20,968 18% - The Riverwalk 5,965 13% 17,474 15% - NSRCC 7,309 16% 9,319 8% - Dempsey Hill 6,129 14% 12,814 11% Total 45,334 100% 116,492 100%

(SGD ’000) FY16E FY17E % chg Fig 3: Riverside’s popularity on a Tuesday Singapore JUMBO revenue - old 116,492 122,651 5.3%

Group revenue - old 146,704 168,793 15.1%

Assuming 50% more space at Riverside 5,242

Singapore JUMBO revenue – new 116,492 127,893 9.8%

Group revenue - new 146,704 174,035 18.6%

Source: Company, Maybank Kim Eng estimates

. . Improve lunch-time business. Jumbo’s seafood outlets in Singapore Source: Google are open at 12-3pm and 6pm-midnight daily, except for its East Coast outlet which opens at 5pm on weekdays and 11am till midnight on Fig 4: … and on a Friday weekends. However, the bulk of its business is done at night, with minimal lunch-hour crowds. Jumbo is trying to pull in more crowds through changes in its menu and staggering, if possible, its strong demand through the day. To this end, it may introduce an innovative set lunch menu that features its signature dishes which could encourage corporate clients to consider Jumbo as a lunch venue, . especially at its downtown Riverside and Riverwalk outlets. Source: Google

1 http://www.channelnewsasia.com/news/business/singapore-a-third-world-f/2411694.html January 12, 2016 5

Jumbo Group Ltd

2.2 Other opportunities: new JUMBO outlets & catering Jumbo plans to open four new outlets over the next 24 months: three in China and one in Singapore. This is already in our forecasts. And it is already looking for suitable locations. In Singapore, it prefers street-facing shop space over malls as rents will be cheaper: 18% of revenue in malls, <10% for street. Also, non-mall outlets can cater to dining traffic until midnight. Expansion into catering via acquisitions is another avenue that can give immediate scale. It is likely to be keenly exploring this. Catering is an attractive business due to its high margins. But targets should be high-end or corporate caterers, not those serving schools or homes, with sales of at least SGD50 per head.

3. Cash in but no cash-out

3.1 Capex funding the least of Jumbo’s concerns Jumbo wants to consolidate its central kitchen, warehouse and office in Singapore. Though these are currently housed together in a light industrial building, they are in different units. It is quite tight on space and workflows could be improved if operations are centralised instead of being spread over six different units, four owned and two rented. Its central kitchen alone spans three units. Management is looking for a suitable location to lease, though it is in no hurry to commit given a soft industrial leasing market. Funding is not an issue. Of its SGD25m budget, SGD12m will come from IPO proceeds, leaving SGD13m to be funded separately. We estimate that its four owned units can be sold for SGD6-8m. The balance can be comfortably funded internally. Historically, Jumbo generates more than SGD10m in annual FCF. We have factored higher capex for this purpose into our FY17-18 forecasts, though not the sale of its four existing units. Hence, cashflow could be better than projected.

3.2 Founders committed to supporting next-generation management JBO, the holding company of Jumbo’s founding family, owns 58% of Jumbo. CEO Mr Ang Kiam Meng, his wife Jacqueline Tan, his sister Christina Kong and four other employees who are also family members hold c.30% of JBO or 17% of Jumbo’s share capital. We believe this is the core of the second-generation Ang family that has taken over from its original founders. We understand that Jumbo’s China expansion, which has been smoothly executed so far, is the brainchild of the second generation. To support the second generation’s vision for the company, JBO has committed to not selling: 1) any Jumbo shares within the first 24 months of its listing; and 2) any stake in JBO within 12 months of listing. While stake sales in JBO are allowed after 12 months, the stakes can only be sold to other JBO shareholders. This moratorium is stricter than the usual requirement of 100% no-sale in the first 6 months and 50% no-sale in the next 6 months.

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FYE 30 Sep FY14A FY15A FY16E FY17E FY18E Key Metrics P/E (reported) (x) 20.4 21.4 18.3 16.4 13.6 Core P/E (x) 20.4 19.8 18.3 16.4 13.6 P/BV (x) 5.8 4.8 6.3 4.9 3.9 P/NTA (x) 5.9 4.9 6.4 5.0 3.9 Net dividend yield (%) 0.0 19.0 1.6 1.8 2.2 FCF yield (%) 4.7 3.5 8.5 0.9 6.3 EV/EBITDA (x) na na 10.3 9.1 7.3 EV/EBIT (x) na na 12.7 11.2 8.8

INCOME STATEMENT (SGD m) Revenue 112.4 122.8 146.7 168.8 191.2 Gross profit 61.5 66.9 81.3 93.2 105.2 EBITDA 18.6 18.5 22.1 25.3 30.5 Depreciation (3.1) (3.5) (4.1) (4.7) (5.4) Amortisation 0.0 0.0 0.0 0.0 0.0 EBIT 15.5 15.0 18.0 20.6 25.1 Net interest income /(exp) 0.0 0.1 0.1 0.1 0.1 Associates & JV 0.1 0.1 0.1 0.1 0.1 Exceptionals 0.0 0.0 0.0 0.0 0.0 Other pretax income 0.0 0.0 0.0 0.0 0.0 Pretax profit 15.6 15.1 18.1 20.7 25.3 Income tax (1.8) (1.8) (2.2) (2.6) (3.3) Minorities (0.4) (0.6) (1.0) (1.6) (2.0) 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 13.3 12.8 14.9 16.6 20.0 Core net profit 13.3 13.8 14.9 16.6 20.0

BALANCE SHEET (SGD m) Cash & Short Term Investments 47.4 60.1 55.2 53.2 65.5 Accounts receivable 5.3 6.6 6.8 7.9 8.9 Inventory 1.2 1.0 1.4 1.6 1.8 Property, Plant & Equip (net) 12.0 14.0 12.4 30.1 37.3 Intangible assets 0.8 0.8 0.8 0.8 0.8 Investment in Associates & JVs 0.4 0.4 0.5 0.6 0.7 Other assets 3.9 0.6 0.7 0.7 0.7 Total assets 71.0 83.5 77.7 94.8 115.6 ST interest bearing debt 0.2 0.2 0.3 0.3 0.3 Accounts payable 13.8 14.2 20.1 23.1 26.2 LT interest bearing debt 0.9 0.6 1.0 1.0 1.0 Other liabilities 4.0 3.0 4.0 4.0 5.0 Total Liabilities 19.0 18.3 25.2 28.6 32.4 Shareholders Equity 47.1 56.9 43.2 55.3 70.3 Minority Interest 4.9 8.3 9.3 10.9 12.9 Total shareholder equity 52.0 65.2 52.5 66.2 83.2 Perpetual securities 0.0 0.0 0.0 0.0 0.0 Total liabilities and equity 71.0 83.5 77.7 94.8 115.6

CASH FLOW (SGD m) Pretax profit 15.6 15.1 18.1 20.7 25.3 Depreciation & amortisation 3.1 3.5 4.1 4.7 5.4 Adj net interest (income)/exp 0.0 0.1 0.1 0.1 0.1 Change in working capital (1.6) (1.1) 5.5 1.8 1.8 Cash taxes paid (0.8) (2.5) (1.8) (2.2) (2.6) Other operating cash flow 0.0 0.0 0.0 0.0 0.0 Cash flow from operations 16.3 14.9 25.8 24.9 29.7 Capex (3.6) (5.5) (2.5) (22.5) (12.5) Free cash flow 12.7 9.4 23.3 2.4 17.2 Dividends paid 0.0 0.0 (51.7) (4.5) (5.0) Equity raised / (purchased) 0.0 0.0 23.1 0.0 0.0 Perpetual securities 0.0 0.0 0.0 0.0 0.0 Change in Debt (0.2) (0.3) 0.4 0.0 0.0 Perpetual securities distribution 0.0 0.0 0.0 0.0 0.0 Other invest/financing cash flow (4.2) 3.3 (0.0) (0.0) (0.0) Effect of exch rate changes 1.6 0.1 0.1 0.1 0.1 Net cash flow 10.0 12.6 (4.9) (2.0) 12.3

January 12, 2016 7

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FYE 30 Sep FY14A FY15A FY16E FY17E FY18E Key Ratios Growth ratios (%) Revenue growth 15.1 9.2 19.5 15.1 13.3 EBITDA growth 46.5 (0.8) 19.6 14.6 20.5 EBIT growth 55.7 (3.1) 19.8 14.5 22.1 Pretax growth 55.6 (2.9) 19.7 14.4 22.1 Reported net profit growth 39.8 (4.5) 17.1 11.1 20.5 Core net profit growth 39.8 3.0 8.6 11.1 20.5

Profitability ratios (%) EBITDA margin 16.6 15.0 15.1 15.0 16.0 EBIT margin 13.8 12.2 12.3 12.2 13.1 Pretax profit margin 13.9 12.3 12.4 12.3 13.2 Payout ratio 0.0 nm 30.0 30.0 30.0

DuPont analysis Net profit margin (%) 11.9 10.4 10.2 9.8 10.4 Revenue/Assets (x) 1.6 1.5 1.9 1.8 1.7 Assets/Equity (x) 1.5 1.5 1.8 1.7 1.6 ROAE (%) 31.8 26.4 29.8 33.7 31.8 ROAA (%) 20.8 17.8 18.5 19.2 19.0

Liquidity & Efficiency Cash conversion cycle (75.1) (65.5) (71.1) (80.0) (80.2) Days receivable outstanding 15.9 17.5 16.5 15.7 15.8 Days inventory outstanding 6.2 7.3 6.7 7.2 7.2 Days payables outstanding 97.2 90.2 94.3 102.9 103.2 Dividend cover (x) nm 0.2 3.3 3.3 3.3 Current ratio (x) 3.2 3.9 2.6 2.3 2.4

Leverage & Expense Analysis Asset/Liability (x) 3.7 4.6 3.1 3.3 3.6 Net debt/equity (%) net cash net cash net cash net cash net cash Net interest cover (x) na na na na na Debt/EBITDA (x) 0.1 0.0 0.1 0.0 0.0 Capex/revenue (%) 3.2 4.5 1.7 13.3 6.5 Net debt/ (net cash) (46.3) (59.2) (53.9) (51.9) (64.2) Source: Company; Maybank

January 12, 2016 8

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REGIONAL HONG KONG / CHINA INDONESIA Suttatip PEERASUB (66) 2658 6300 ext 1430 Sadiq CURRIMBHOY Howard WONG Head of Research Isnaputra ISKANDAR Head of Research [email protected] Regional Head, Research & Economics (852) 2268 0648 (62) 21 2557 1129 • Media • Commerce (65) 6231 5836 [email protected] [email protected] [email protected] • Oil & Gas - Regional • Strategy • Metals & Mining • Cement WONG Chew Hann, CA Sutthichai KUMWORACHAI (66) 2658 6300 ext 1400 Regional Head of Institutional Research Benjamin HO Rahmi MARINA (852) 2268 0632 [email protected] (62) 21 2557 1128 [email protected] (603) 2297 8686 [email protected] • Energy • Petrochem • Consumer & Auto [email protected] ONG Seng Yeow • Banking & Finance Regional Head of Retail Research Jacqueline KO, CFA Termporn TANTIVIVAT (65) 6231 5839 (852) 2268 0633 [email protected] Aurellia SETIABUDI (66) 2658 6300 ext 1520 [email protected] • Consumer Staples & Durables (62) 21 2953 0785 [email protected] [email protected] • Property TAN Sin Mui Ka Leong LO, CFA • Property (852) 2268 0630 [email protected] Director of Research Jaroonpan WATTANAWONG • Consumer Discretionary & Auto Pandu ANUGRAH (65) 6231 5849 [email protected] (66) 2658 6300 ext 1404 (62) 21 2557 1137 [email protected] Mitchell KIM [email protected] ECONOMICS • Transportation • Small cap (852) 2268 0634 [email protected] • Infra • Construction • Transport• Telcos Suhaimi ILIAS • Internet & Telcos Chief Economist Janni ASMAN VIETNAM Osbert TANG, CFA Singapore | Malaysia (62) 21 2953 0784 (86) 21 5096 8370 LE Hong Lien, ACCA (603) 2297 8682 [email protected] [email protected] [email protected] • Cigarette • Healthcare • Retail Head of Institutional Research Luz LORENZO • Transport & Industrials (84) 8 44 555 888 x 8181 Philippines Adhi TASMIN [email protected] (63) 2 849 8836 Stefan CHANG, CFA (62) 21 2557 1209 • Strategy • Consumer • Diversified • Utilities [email protected] (852) 2268 0675 [email protected] [email protected] • Plantations THAI Quang Trung, CFA, Deputy Manager, Tim LEELAHAPHAN • Technology Institutional Research Thailand Anthony LUKMAWIJAYA (84) 8 44 555 888 x 8180 (66) 2658 6300 ext 1420 Steven ST CHAN (62) 21 2557 1126 [email protected] [email protected] (852) 2268 0645 [email protected] [email protected] • Real Estate • Construction • Materials • Banking & Financials - Regional JUNIMAN • Aviation Chief Economist, BII Le Nguyen Nhat Chuyen Warren LAU PHILIPPINES Indonesia (852) 2268 0644 (84) 8 44 555 888 x 8082 (62) 21 29228888 ext 29682 [email protected] [email protected] Luz LORENZO Head of Research • Oil & Gas [email protected] • Technology – Regional (63) 2 849 8836 [email protected] NGUYEN Thi Ngan Tuyen, Head of Retail Research STRATEGY INDIA • Strategy (84) 8 44 555 888 x 8081 • Utilities • Conglomerates • Telcos Sadiq CURRIMBHOY Jigar SHAH Head of Research [email protected] Global Strategist (91) 22 6623 2632 [email protected] Lovell SARREAL • Food & Beverage • Oil&Gas • Banking (65) 6231 5836 [email protected] • Oil & Gas • Automobile • Cement (63) 2 849 8841 [email protected] TRINH Thi Ngoc Diep Willie CHAN Anubhav GUPTA • Consumer • Media • Cement (84) 4 44 555 888 x 8208 Hong Kong / Regional (91) 22 6623 2605 [email protected] [email protected] Rommel RODRIGO • Technology • Utilities • Construction (852) 2268 0631 [email protected] • Metal & Mining • Capital Goods • Property (63) 2 849 8839 MALAYSIA Vishal MODI [email protected] PHAM Nhat Bich • Conglomerates • Property • Gaming (91) 22 6623 2607 [email protected] (84) 8 44 555 888 x 8083 WONG Chew Hann, CA Head of Research • Ports/ Logistics • Banking & Financials [email protected] (603) 2297 8686 [email protected] • Consumer • Manufacturing • Fishery • Strategy Katherine TAN Abhijeet KUNDU (63) 2 849 8843 Desmond CH’NG, ACA (91) 22 6623 2628 [email protected] [email protected] NGUYEN Thi Sony Tra Mi (603) 2297 8680 • Consumer • Banks • Construction (84) 8 44 555 888 x 8084 [email protected] [email protected] • Banking & Finance Neerav DALAL Michael BENGSON • Port operation • Pharmaceutical (63) 2 849 8840 LIAW Thong Jung (91) 22 6623 2606 [email protected] • Food & Beverage [email protected] (603) 2297 8688 [email protected] • Software Technology • Telcos • Oil & Gas Services- Regional • Conglomerates TRUONG Quang Binh (84) 4 44 555 888 x 8087 ONG Chee Ting, CA SINGAPORE Jaclyn JIMENEZ [email protected] (603) 2297 8678 [email protected] (63) 2 849 8842 Gregory YAP • Rubber plantation • Tyres and Tubes • Oil&Gas • Plantations - Regional [email protected] (65) 6231 5848 [email protected] • Consumer Mohshin AZIZ • SMID Caps (603) 2297 8692 [email protected] • Technology & Manufacturing • Telcos Arabelle MAGHIRANG • Aviation - Regional • Petrochem (63) 2 849 8838 YEAK Chee Keong, CFA YIN Shao Yang, CPA [email protected] (65) 6231 5842 • Banks (603) 2297 8916 [email protected] [email protected] • Gaming – Regional • Media • Offshore & Marine THAILAND TAN Chi Wei, CFA (603) 2297 8690 [email protected] Derrick HENG, CFA Maria LAPIZ Head of Institutional Research • Power • Telcos (65) 6231 5843 [email protected] Dir (66) 2257 0250 | (66) 2658 6300 ext 1399 • Transport • Property • REITs (Office) [email protected] WONG Wei Sum, CFA • Consumer • Materials • Ind. Estates (603) 2297 8679 [email protected] Joshua TAN • Property (65) 6231 5850 [email protected] Sittichai DUANGRATTANACHAYA • REITs (Retail, Industrial) LEE Yen Ling (66) 2658 6300 ext 1393 [email protected] (603) 2297 8691 [email protected] John CHEONG, CFA • Building Materials • Glove • Ports • Shipping (65) 6231 5845 [email protected] • Services Sector • Transport CHAI Li Shin, CFA • Small & Mid Caps • Healthcare Yupapan POLPORNPRASERT (603) 2297 8684 [email protected] (66) 2658 6300 ext 1395 • Plantation • Construction & Infrastructure TRUONG Thanh Hang (65) 6231 5847 [email protected] [email protected] Ivan YAP • Small & Mid Caps • Oil & Gas (603) 2297 8612 [email protected] • Automotive • Semiconductor • Technology Sukit UDOMSIRIKUL Head of Retail Research (66) 2658 6300 ext 5090 Kevin WONG [email protected] (603) 2082 6824 [email protected] • REITs • Consumer Discretionary Mayuree CHOWVIKRAN LIEW Wei Han (66) 2658 6300 ext 1440 (603) 2297 8676 [email protected] [email protected] • Consumer Staples • Strategy LEE Cheng Hooi Regional Chartist Padon VANNARAT (603) 2297 8694 (66) 2658 6300 ext 1450 [email protected] [email protected] Tee Sze Chiah Head of Retail Research • Strategy (603) 2297 6858 [email protected] Surachai PRAMUALCHAROENKIT Cheah Chong Ling (66) 2658 6300 ext 1470 (603) 2297 8767 [email protected] [email protected] • Auto • Conmat • Contractor • Steel

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Jumbo Group Ltd

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. MKE may, to the extent permitted by law, act upon or use the information presented herein, or the research or analysis on which they are based, before the material is published. One or more directors, officers and/or employees of MKE may be a director of the issuers of the securities mentioned in this report. 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 The disclosure of the survey result of the Thai Institute of Directors Association (“IOD”) regarding corporate governance is made pursuant to the policy of the Office of the Securities and Exchange Commission. The survey of the IOD is based on the information of a company listed on the Stock Exchange of Thailand and the market for Alternative Investment disclosed to the public and able to be accessed by a general public investor. The result, therefore, is from the perspective of a third party. It is not an evaluation of operation and is not based on inside information. The survey result is as of the date appearing in the Corporate Governance Report of Thai Listed Companies. As a result, the survey may be changed after that date. Maybank Kim Eng Securities (Thailand) Public Company Limited (“MBKET”) does not confirm nor certify the accuracy of such survey result. Except as specifically permitted, no part of this presentation may be reproduced or distributed in any manner without the prior written permission of MBKET. MBKET accepts no liability whatsoever for the actions of third parties in this respect. US This research report prepared by MKE is distributed in the United States (“US”) to Major US Institutional Investors (as defined in Rule 15a-6 under the Securities Exchange Act of 1934, as amended) only by Maybank Kim Eng Securities USA Inc (“Maybank KESUSA”), a broker-dealer registered in the US (registered under Section 15 of the Securities Exchange Act of 1934, as amended). All responsibility for the distribution of this report by Maybank KESUSA in the US shall be borne by Maybank KESUSA. All resulting transactions by a US person or entity should be effected through a registered broker-dealer in the US. This report is not directed at you if MKE is prohibited or restricted by any legislation or regulation in any jurisdiction from making it available to you. You should satisfy yourself before reading it that Maybank KESUSA is permitted to provide research material concerning investments to you under relevant legislation and regulations. UK This document is being distributed by Maybank Kim Eng Securities (London) Ltd (“Maybank KESL”) which is authorized and regulated, by the Financial Services Authority and is for Informational Purposes only. This document is not intended for distribution to anyone defined as a Retail Client under the Financial Services and Markets Act 2000 within the UK. Any inclusion of a third party link is for the recipients convenience only, and that the firm does not take any responsibility for its comments or accuracy, and that access to such links is at the individuals own risk. Nothing in this report should be considered as constituting legal, accounting or tax advice, and that for accurate guidance recipients should consult with their own independent tax advisers.

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Jumbo Group Ltd

DISCLOSURES Legal Entities Disclosures Malaysia: This report is issued and distributed in Malaysia by Maybank Investment Bank Berhad (15938-H) which is a Participating Organization of Bursa Malaysia Berhad and a holder of Capital Markets and Services License issued by the Securities Commission in Malaysia. Singapore: This material is issued and distributed in Singapore by Maybank KERPL (Co. Reg No 197201256N) which is regulated by the Monetary Authority of Singapore. Indonesia: PT Kim Eng Securities (“PTKES”) (Reg. No. KEP-251/PM/1992) is a member of the Indonesia Stock Exchange and is regulated by the BAPEPAM LK. Thailand: MBKET (Reg. No.0107545000314) is a member of the Stock Exchange of Thailand and is regulated by the Ministry of Finance and the Securities and Exchange Commission. Philippines: Maybank ATRKES (Reg. No.01-2004-00019) is a member of the Philippines Stock Exchange and is regulated by the Securities and Exchange Commission. Vietnam: Maybank Kim Eng Securities JSC (License Number: 71/UBCK-GP) is licensed under the State Securities Commission of Vietnam.Hong Kong: KESHK (Central Entity No AAD284) is regulated by the Securities and Futures Commission. India: Kim Eng Securities India Private Limited (“KESI”) is a participant of the National Stock Exchange of India Limited (Reg No: INF/INB 231452435) and the Bombay Stock Exchange (Reg. No. INF/INB 011452431) and is regulated by Securities and Exchange Board of India. KESI is also registered with SEBI as Category 1 Merchant Banker (Reg. No. INM 000011708) US: Maybank KESUSA is a member of/ and is authorized and regulated by the FINRA – Broker ID 27861. UK: Maybank KESL (Reg No 2377538) is authorized and regulated by the Financial Services Authority.

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 12 January 2016, Maybank KERPL and the covering analyst do not have any interest in any companies recommended in this research report.

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

Hong Kong: KESHK may have financial interests in relation to an issuer or a new listing applicant referred to as defined by the requirements under Paragraph 16.5(a) of the Hong Kong Code of Conduct for Persons Licensed by or Registered with the Securities and Futures Commission.

As of 12 January 2016, KESHK and the authoring analyst do not have any interest in any companies recommended in this research report.

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

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

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

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

Ong Seng Yeow | Executive Director, Maybank Kim Eng Research

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Jumbo Group Ltd

Historical recommendations and target price: Jumbo Group Ltd (JUMBO SP)

4 Jan Buy : SGD0.6 0.5

0.4

0.4

0.4

0.3

0.3 Oct-15

Jumbo Group Ltd

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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Jumbo Group Ltd

 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 5th Floor, Aldermary House 777 Third Avenue, 21st Floor 33rd Floor, Menara Maybank, Singapore 059304 10-15 Queen Street New York, NY 10017, U.S.A. 100 Jalan Tun Perak, London EC4N 1TX, 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, Plaza Bapindo 2nd Floor, The International 16, 59000 Kuala Lumpur th Three Pacific Place, Citibank Tower 17 Floor Maharishi Karve Road, Tel: (603) 2297 8888 1 Queen’s Road East, Jl Jend. Sudirman Kav. 54-55 Churchgate Station, Fax: (603) 2282 5136 Hong Kong Jakarta 12190, 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 Alex Tsun Regional Head Sales Trading [email protected] [email protected] Tel: (852) 2268 0228 Tel: (65) 6336-5157 US Toll Free: 1 877 837 7635 US Toll Free: 1-866-406-7447

Malaysia Thailand Rommel Jacob Tanasak Krishnasreni [email protected] [email protected] Tel: (603) 2717 5152 Tel: (66)2 658 6820

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

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

Vietnam Philippines Tien Nguyen Keith Roy [email protected] [email protected] Tel: (84) 44 555 888 x8079 Tel: (63) 2 848-5288 www.maybank-ke.com | www.maybank-keresearch.com

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