Stay the Course 12M Price Target SGD 0.66 (+25%) Previous Price Target SGD 0.68

0.53

May 15, 2019

Health Management Int’l (HMI SP) BUY Share Price SGD 0.53 Stay the course 12m Price Target SGD 0.66 (+25%) Previous Price Target SGD 0.68

9MFY19 missed street est. on gestation costs… Company Description HMI owns 2 tertiary care hospitals in Malaysia and an 9MFY19 core PATMI was at the lower end of our estimate, and missed ambulatory care centre in Singapore. consensus. Due to StarMed-related gestation costs, 3QFY19 core PATMI of SGD13.7m fell 14% YoY. However, we believe our thesis that HMI is a beneficiary of aging population, rising affluence and medical tourism

remains intact, as excluding FX, exceptional items and StarMed gestation Statistics costs, PATMI grew 10% YoY. We trimmed FY19-21E EPS by 6-7% to factor in 52w high/low (SGD) 0.67/0.53 adjustments to interest and tax expense assumptions. Maintain BUY with 3m avg turnover (USDm) 0.1 3% lower DCF-based TP of SGD0.66 (WACC: 7.1%, LTG: 1.5%). Free float (%) 32.7 Issued shares (m) 839 … but revenue and operational drivers intact Market capitalisation SGD444.7M

HealthCare 3QFY19 revenue rose 8% YoY, supported by a 1% rise in total patient load, USD325M and 5% uptick in both average inpatient and outpatient bill sizes across Major shareholders: Nam See Investment Pte Ltd. 35.5% both Malaysian hospitals. EBITDA fell 2.2% YoY due to gestation costs Maju Medik Malaysia Sdn. Bhd. 18.4% from StarMed; Excluding that, EBITDA would have risen 5.6%. MMC will be Kabouter Management LLC 6.0% the first hospital south of KL to offer tomotherapy services. This should Price Performance extend the lead of MMC’s Cancer Centre, a key centre of excellence. At RSH, construction of the extension block has begun. Upon commissioning 0.740 135 0.720 130 in 2021E, RSH will be a 380-bed hospital from 218 presently. 0.700 125 0.680 120

Singapore Boosting StarMed awareness 0.660 115 0.640 110 At StarMed, there are now around 30 specialists, and HMI has started 0.620 105 various initiatives to boost awareness of StarMed to the community. HMI 0.600 100 emphasizes that with StarMed’s prices, which will be lower than that of 0.580 95 0.560 90 private hospitals it will be able to offer a stronger proposition for private 0.540 85 patients. The official launch is expected to take place in 2020. Through 0.520 80 May-17 Aug-17 Nov-17 Feb-18 May-18 Aug-18 Nov-18 Feb-19 9MFY19, total debt has increased nearly MYR200m. The StarMed property mortgage accounts for 64% of total debt. Net debt to trailing EBITDA HMI - (LHS, SGD) HMI / Straits Times Index - (RHS, %) stood at 2.3x (FY18: 1.2x), while net gearing was at 1x (FY18: 0.6x). -1M -3M -12M Key risks Absolute (%) (3) (8) (20) Relative to index (%) 0 (7) (12) Key risks include: i) underestimation of StarMed gestation costs; ii) Source: FactSet fluctuations in FX and foreign patients (which account for 20-23% of the total); iii) adverse regulatory changes; and iv) competition.

FYE Jun (MYR m) FY17A FY18A FY19E FY20E FY21E Revenue 436 468 507 544 594 EBITDA 84 114 107 126 143 Core net profit 21 61 51 58 71 Core EPS (sen) 3.2 7.3 6.1 7.0 8.5 Core EPS growth (%) (7.4) 129.2 (16.9) 15.2 22.1 Net DPS (sen) 1.0 2.0 2.0 2.0 2.0 Core P/E (x) 66.1 24.2 26.6 23.1 18.9 P/BV (x) 10.2 5.9 4.8 4.2 3.6 Net dividend yield (%) 0.5 1.1 1.2 1.2 1.2 ROAE (%) 12.1 28.8 17.9 19.2 20.3 ROAA (%) 5.1 12.0 7.7 7.8 8.9 EV/EBITDA (x) 17.2 14.1 14.8 12.7 11.2 Net gearing (%) (incl perps) 51.6 55.9 92.2 88.8 74.9 Consensus net profit - - 57 64 71 MKE vs. Consensus (%) - - (16.1) (8.4) 0.6

Lai Gene Lih, CFA laigenelih@maybank-ke.com.sg (65) 6231 5832

THIS REPORT HAS BEEN PREPARED BY MAYBANK KIM ENG RESEARCH Co. Reg No: 198700034E MICA (P) : 099/03/2012 SEE PAGE 8 FOR IMPORTANT DISCLOSURES AND ANALYST CERTIFICATIONS Health Management Int'l

Fig 1: Revisions to forecasts

FY19E FY20E FY21E New Old Chg (%) New Old Chg (%) New Old Chg (%) Revenue (MYRm) 507.2 507.2 0.0 543.7 543.7 0.0 593.8 593.8 0.0 Gross profit (MYRm) 180.1 180.1 0.0 195.7 195.7 0.0 213.8 213.8 0.0 EBIT (MYRm) 79.2 73.5 7.6 97.1 93.5 3.8 112.3 112.9 -0.5 EBITDA (MYRm) 107.2 101.5 5.5 126.5 122.9 2.9 143.1 143.7 -0.4 Core net profit (MYRm) 50.8 54.6 -7.1 58.5 62.2 -6.0 71.4 73.1 -2.3 EPS (MYR) 0.06 0.07 -7.1 0.07 0.07 -6.0 0.09 0.09 -2.3 Chg (ppt) Chg (ppt) Chg (ppt)

Gross margin 35.5% 35.5% 0.0 36.0% 36.0% 0.0 36.0% 36.0% 0.0 Admin and distribution cost as a 19.5% 21.0% -1.5 18.7% 18.8% -0.1 17.6% 17.5% 0.1 % of sales

Source: Maybank Kim Eng

We trim FY19-21E EPS by 2-7%, reflecting changes in: i) interest expense assumptions as a result of the increased debt undertaken by HMI; and ii) tweaks in effective tax rate. Our DCF-based TP is reduced by 3% to SGD0.66 (WACC: 7.1%, LTG: 1.5%).

Fig 2: P&L summary 9MFY19 YoY FYE Dec 3QFY19 3QFY18 2QFY19 QoQ Chg FYE as % of Chg FYE (MYR m) (MYR m) (MYR m) (%) (%) MYRm Revenue 124.8 115.4 128.6 8.1 -3.0 507.2 75 COGS (82.7) (74.0) (82.4) 11.7 0.3 (327.2) 75 Gross profit 42.1 41.4 46.2 1.8 -8.8 180.1 74 Other gains - net 2.3 1.9 (1.7) 26.0 -239.8 0.0 nm Dist. & marketing costs (1.9) (1.3) (1.8) 37.7 3.9 (7.6) 71 Admin costs (21.9) (18.5) (24.3) 18.4 -9.9 (98.9) 67 EBIT 20.7 23.4 18.4 -11.5 12.4 73.5 81 EBITDA 28.0 28.6 25.6 -2.2 9.5 101.5 80 Interest inc 0.3 0.2 0.4 62.4 -18.8 1.0 115 Interest exp (3.1) (1.5) (2.5) 99.3 24.4 (11.1) 101 Associates income (0.1) 0.0 0.0 nm nm 0.0 nm Exceptionals (0.3) 0.0 (0.5) nm -42.4 (2.9) 109 Pretax profit 17.9 22.1 16.4 -19.0 9.2 63.5 78 Taxation (6.5) (6.2) (6.8) 5.1 -4.6 (17.8) 112 Net profit 11.4 15.9 9.5 -28.4 19.1 45.7 65 Minority interest 2.1 0.0 1.7 nm 19.7 6.0 nm PATMI 13.4 15.9 11.3 -15.4 19.2 51.7 68 Core PATMI 13.7 15.9 11.7 -13.8 16.8 54.6 70

Core EPS (MYR sen) 1.63 1.90 1.40 -14.0 16.8 6.52 70

Change

(ppt) Gross margin 33.7% 35.9% 35.9% -2.1 -2.2 EBIT margin 16.6% 20.3% 14.3% -3.7 2.3 Core net margin 11.0% 13.8% 9.1% -2.8 1.9

Source: Company historical data, Maybank Kim Eng estimates

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Fig 3: Peer comparisons EV /EBI Div MKE TDA yield ROE Company BBG MKE TP Price FYE Mcap P/E (x) (x) (%) (%) Code Rec (LC) (LC) mm USDm Act FY1 FY2 FY3 FY1 FY1 FY2 HMI HMI SP BUY 0.66 0.54 06 331 22.0 28.4 23.2 19.0 15.1 3.7 17.9

Singapore listed healthcare peers Raffles Med RFMD SP HOLD 1.05 1.02 12 1,340 25.6 29.4 29.5 25.5 19.5 1.9 - Q&M Dental QNM SP NR - 0.46 12 270 26.0 ------TKMED TalkMed SP NR - 0.53 12 509 24.1 ------ISEC Healthcare ISEC SP NR - 0.29 12 113 17.8 ------SMG SMG SP NR - 0.43 12 151 15.9 15.9 13.4 11.9 - - 9.3 Singapore O&G SOG SP NR - 0.38 12 131 19.5 ------IHH Healthcare IHH MK BUY 6.90 5.46 12 11,501 48.8 42.7 37.7 31.9 16.8 0.5 - Average 43.8 40.7 36.2 30.7 17.0 0.7 0.5 Average ex-IHH 23.9 28.1 27.0 23.2 18.6 2.2 15.2

Asia Pacific (ex- China) healthcare peers KPJ KPJ MK Hold 1.08 0.95 12 1,012 24.4 23.8 22.6 20.2 11.1 2.1 - BDMS BDMS TB Buy 30.00 24.60 12 12,176 41.7 35.7 30.0 26.2 21.7 1.4 - BCH BCH TB NR - 17.30 12 1,363 39.3 34.3 30.1 27.5 18.9 1.6 19.5 Bumrungrad Hosp BH TB Buy 230.00 166.50 12 3,835 29.2 - - - 17.7 - - Chularat Hosp CHG TB NR - 1.91 12 664 31.8 29.3 25.6 23.6 19.7 2.6 19.0 Fortis Healthcare FORH IN NR - 129.70 03 1,388 - - 61.3 32.5 42.6 0.0 -5.4 Apollo Hosp APHS IN NR - 1,173.90 03 2,316 139.1 58.7 39.2 29.8 18.5 0.6 7.8 Ramsay Health RHC AU NR - 64.93 06 9,126 23.2 22.7 20.8 19.4 11.2 2.3 22.4 PT Mitra Keluarga MIKA IJ NR - 2,090.00 12 2,109 49.6 45.0 40.5 35.8 28.4 0.9 9.4 PT Siloam Int'l SILO IJ NR - 4,500.00 12 507 276.7 161.5 137.0 69.3 7.7 0.0 0.7 Average 45.2 35.7 31.5 25.9 18.8 1.6 17.0

China healthcare peers China Resources Med 1515 HK NR - 5.46 12 902 13.7 15.1 14.0 13.2 7.1 1.2 6.8 Harmonicare Med 1509 HK NR - 2.04 12 197 - - 89.3 - 13.6 0.0 0.0 300015 Aier Eye Hosp. CH NR - 35.84 12 12,430 85.0 61.1 46.2 35.7 31.3 0.7 20.9 600763 Topchoice Med CH NR - 78.52 12 3,664 75.8 60.7 48.0 36.9 36.9 0.2 23.8 Average 79.2 58.5 45.4 34.8 31.0 0.6 20.8

Source: FactSet, Bloomberg, Maybank Kim Eng

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Value Proposition Price Drivers

. Operates two tertiary hospitals in Malaysia; adoption of Historical share price trend 4 unique Singapore independent practice model has worked 0.800 750 5 well in attracting and retaining top doctors. 0.700 650 3 . Provides private medical services that fill the gap between 0.600 550 public services that are cheap, but slow. Focuses on 0.500 2 450 growing patient volume by maintaining good quality. 0.400 1 350 0.300 250 . Malacca-based MMC is a cash cow that commands c.10% market share of Malaysia’s medical tourists, while Johor- 0.200 150 1 0.100 50 based Regency, which turned around in 2014, is a star. Apr-14 Apr-15 Apr-16 Apr-17 Apr-18 . Second-generation management aims to extract higher growth via both organic and inorganic expansion. HMI - (LHS, SGD) HMI / Straits Times Index - (RHS, %)

. FY19E ROE of 17% > WACC of 7%. Source: Company, FactSet, Maybank Kim Eng

On average, procedures at HMI are 1/3 of Singapore’s prices 1. FY14 earnings grew 115 YoY. Regency achieved profitability for the first time in FY14. HMI hospitals Singapore Procedure and 50th Restructured Private 2. Malaysia news article reported that IHH Healthcare is percentile bill MMC RSH hospitals2 hospitals size(SGD) interested to acquire Mahkota for USD250m. Angioplasty 9,153 7,316 226,178 29,268 3. FY16 core earnings grew 25% YoY. Regency’s revenue

Cataract surgery 1,016 1,437 3,791 5,537 increased by 27% YoY. Announced plan to more than double the capacity of Regency. Delivery (Caesarean) 2,013 3,002 6,007 8,680 4. Announced plan to fully acquire the stakes in both Delivery (Normal) 927 1,500 3,101 5,416 Mahkota and Regency hospitals. Gastroscopy 273 531 816 1,548 5. Announced initial investment of 62.8% stake in StarMed. Total knee 6,330 7,156 17,429 16,790 The stake was subsequently increased to 70% in Oct-18. replacement Based on SGDMYR of 3.15, (1) Based on private non-subsidised rate

Source: Company, Ministry of Health Singapore

Financial Metrics Swing Factors

. FY19-21E earnings CAGR of 6%, led by growth in RSH, but Upside offset by start-up costs at StarMed. . Balance sheet is sound with net gearing of 92% FY19E. We . M&A of synergistic businesses, HMI is actively exploring expect HMI to revert to net-cash position by FY25E. M&A targets to scale up its operations; it is studying . Major capex needed for RSH expansion, to the tune of nearby markets, including Malaysia and Indonesia. MYR150m in FY20-21E. Growth should accelerate after the . Higher-than-expected revenue and earnings growth from expansion. higher patient volume, pricing and operating leverage. . Higher-than-expected revenue from medical tourists, due Core net profit, margin and revenue to weaker MYR relative to other currencies. MYRm % 700 14 600 12 Downside 500 10 400 8 . Competition from nearby hospitals in Johor and Malacca. 300 6 HMI could be competing for good doctors and patients. 200 4 Also, Johor has several new hospitals coming up. . Regulatory changes to cap the medical-related fees and 100 2 relax the practice requirement of foreign doctors could 0 0 FY13 FY14 FY15 FY16 FY17 FY18 FY19E FY20E FY21E impact private hospitals. . Pursuing M&A at unfavourable terms, such as overpaying Revenue Core net profit Core net margin (RHS) and acquisition of value-destroying businesses.

Source: Company, Maybank Kim Eng

[email protected]

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FYE 30 Jun FY17A FY18A FY19E FY20E FY21E Key Metrics P/E (reported) (x) 56.4 27.0 28.3 23.1 18.9 Core P/E (x) 66.1 24.2 26.6 23.1 18.9 P/BV (x) 10.2 5.9 4.8 4.2 3.6 P/NTA (x) 10.2 5.9 4.8 4.2 3.6 Net dividend yield (%) 0.5 1.1 1.2 1.2 1.2 FCF yield (%) nm nm nm nm 1.4 EV/EBITDA (x) 17.2 14.1 14.8 12.7 11.2 EV/EBIT (x) 22.5 17.4 20.0 16.6 14.3

INCOME STATEMENT (MYR m) Revenue 435.8 467.6 507.2 543.7 593.8 Gross profit 143.8 165.8 180.1 195.7 213.8 EBITDA 84.4 113.5 107.2 126.5 143.1 Depreciation (19.8) (22.0) (28.0) (29.4) (30.9) Amortisation 0.0 0.0 0.0 0.0 0.0 EBIT 64.5 91.5 79.2 97.1 112.3 Net interest income /(exp) (3.8) (7.7) (12.3) (15.3) (15.3) Associates & JV 1.3 (0.0) (0.4) (0.4) (0.4) Exceptionals 0.0 0.0 (2.9) 0.0 0.0 Other pretax income 0.0 0.0 0.0 0.0 0.0 Pretax profit 62.1 83.9 66.4 81.3 96.5 Income tax (19.8) (23.8) (26.6) (26.8) (25.1) Minorities (21.6) 0.6 8.0 4.0 0.0 Discontinued operations 0.0 0.0 0.0 0.0 0.0 Reported net profit 20.6 60.6 47.8 58.5 71.4 Core net profit 20.6 60.6 50.8 58.5 71.4

BALANCE SHEET (MYR m) Cash & Short Term Investments 76.8 58.9 78.8 54.2 56.1 Accounts receivable 44.9 48.8 53.4 57.6 63.4 Inventory 13.6 14.0 18.9 19.4 20.0 Property, Plant & Equip (net) 278.6 459.6 581.6 642.2 691.3 Intangible assets 0.0 0.0 0.0 0.0 0.0 Investment in Associates & JVs 0.0 0.0 (12.6) (13.0) (13.0) Other assets 3.7 7.9 8.9 8.9 8.9 Total assets 417.5 589.2 729.0 769.4 826.8 ST interest bearing debt 71.9 89.2 27.5 27.5 27.5 Accounts payable 67.7 109.1 95.4 98.0 100.8 LT interest bearing debt 91.9 107.1 299.3 299.3 299.3 Other liabilities 17.0 38.0 38.0 38.0 38.0 Total Liabilities 248.9 343.2 459.9 462.6 465.3 Shareholders Equity 168.6 252.1 283.2 324.9 379.6 Minority Interest 0.0 (6.1) (14.1) (18.1) (18.1) Total shareholder equity 168.6 246.0 269.1 306.8 361.5 Total liabilities and equity 417.5 589.2 729.0 769.4 826.8

CASH FLOW (MYR m) Pretax profit 62.1 83.9 66.4 81.3 96.5 Depreciation & amortisation 19.8 22.0 28.0 29.4 30.9 Adj net interest (income)/exp 0.0 0.0 0.0 0.0 0.0 Change in working capital 2.9 32.2 (23.9) (2.1) (3.7) Cash taxes paid (11.2) (24.0) (26.6) (26.8) (25.1) Other operating cash flow 0.0 0.0 0.0 0.0 0.0 Cash flow from operations 72.3 114.0 44.4 82.1 99.0 Capex (120.5) (203.0) (150.0) (90.0) (80.0) Free cash flow (48.2) (89.0) (105.6) (7.9) 19.0 Dividends paid (4.5) (16.8) (16.8) (16.8) (16.8) Equity raised / (purchased) 466.7 33.6 0.0 0.0 0.0 Change in Debt 121.9 32.6 130.4 0.0 0.0 Other invest/financing cash flow (538.1) 21.7 11.8 0.0 (0.4) Effect of exch rate changes 0.0 0.0 0.0 0.0 0.0 Net cash flow (2.2) (17.9) 19.9 (24.6) 1.8

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FYE 30 Jun FY17A FY18A FY19E FY20E FY21E Key Ratios Growth ratios (%) Revenue growth 9.5 7.3 8.5 7.2 9.2 EBITDA growth 3.4 34.6 (5.6) 18.0 13.2 EBIT growth 2.0 41.8 (13.5) 22.6 15.7 Pretax growth (2.1) 35.1 (20.8) 22.4 18.7 Reported net profit growth 3.5 194.3 (21.0) 22.2 22.1 Core net profit growth 3.5 194.3 (16.2) 15.2 22.1

Profitability ratios (%) EBITDA margin 19.4 24.3 21.1 23.3 24.1 EBIT margin 14.8 19.6 15.6 17.9 18.9 Pretax profit margin 14.2 17.9 13.1 15.0 16.3 Payout ratio 31.4 27.4 35.0 28.6 23.5

DuPont analysis Net profit margin (%) 4.7 13.0 9.4 10.8 12.0 Revenue/Assets (x) 1.0 0.8 0.7 0.7 0.7 Assets/Equity (x) 2.5 2.3 2.6 2.4 2.2 ROAE (%) 12.1 28.8 17.9 19.2 20.3 ROAA (%) 5.1 12.0 7.7 7.8 8.9

Liquidity & Efficiency Cash conversion cycle (31.3) (53.0) (58.1) (43.5) (38.8) Days receivable outstanding 42.3 36.1 36.3 36.7 36.7 Days inventory outstanding 17.0 16.4 18.1 19.8 18.7 Days payables outstanding 90.6 105.5 112.5 100.0 94.1 Dividend cover (x) 3.2 3.6 2.9 3.5 4.3 Current ratio (x) 0.9 0.6 1.2 1.0 1.1

Leverage & Expense Analysis Asset/Liability (x) 1.7 1.7 1.6 1.7 1.8 Net gearing (%) (incl perps) 51.6 55.9 92.2 88.8 74.9 Net gearing (%) (excl. perps) 51.6 55.9 92.2 88.8 74.9 Net interest cover (x) 16.9 11.9 6.4 6.3 7.3 Debt/EBITDA (x) 1.9 1.7 3.1 2.6 2.3 Capex/revenue (%) 27.7 43.4 29.6 16.6 13.5 Net debt/ (net cash) 87.0 137.5 248.0 272.6 270.8 Source: Company; Maybank

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Research Offices

REGIONAL MALAYSIA SINGAPORE THAILAND

Sadiq CURRIMBHOY WONG Chew Hann, CA Head of Research Neel SINHA Head of Research Maria LAPIZ Head of Institutional Research Regional Head of Research & Economics (603) 2297 8686 [email protected] (65) 6231 5838 [email protected] Dir (66) 2257 0250 | (66) 2658 6300 ext 1399 (65) 6231 5836 • Strategy • Strategy • Industrials [email protected] [email protected] • SMID Caps – Regional • Strategy • Consumer • Materials • Services Desmond CH’NG, ACA Teerapol Udomvej, CFA (603) 2297 8680 CHUA Su Tye WONG Chew Hann, CA (66) 2658 6300 ext 1394 [email protected] (65) 6231 5842 [email protected] Regional Head of Institutional Research [email protected] • Banking & Finance • REITs (603) 2297 8686 • Healthcare [email protected] LIAW Thong Jung Luis HILADO Ekachai TARAPORNTIP Head of Retail Research (65) 6231 5848 [email protected] ONG Seng Yeow (603) 2297 8688 [email protected] (66) 2658 5000 ext 1530 • Oil & Gas Services- Regional • Telcos • Transport [email protected] Regional Head of Retail Research LAI Gene Lih, CFA Sutthichai KUMWORACHAI Deputy Head (65) 6231 5839 ONG Chee Ting, CA (65) 6231 5832 [email protected] (66) 2658 5000 ext 1400 [email protected] (603) 2297 8678 [email protected] • Technology • Healthcare [email protected] • Plantations - Regional ECONOMICS • Energy • Petrochem Thilan WICKRAMASINGHE Surachai PRAMUALCHAROENKIT Mohshin AZIZ (65) 6231 5840 [email protected] Suhaimi ILIAS (603) 2297 8692 [email protected] (66) 2658 5000 ext 1470 Chief Economist • Banks • Aviation - Regional • Petrochem [email protected] Malaysia | Philippines | China • Auto • Conmat • Contractor • Steel (603) 2297 8682 SZE Jia Min YIN Shao Yang, CPA (65) 6231 5845 [email protected] Suttatip PEERASUB [email protected] (603) 2297 8916 [email protected] • Consumer (66) 2658 5000 ext 1430 • Gaming – Regional • Media [email protected] CHUA Hak Bin • Media • Commerce Regional Thematic Macroeconomist INDIA TAN Chi Wei, CFA Termporn TANTIVIVAT (65) 6231 5830 (603) 2297 8690 [email protected] Jigar SHAH Head of Research (66) 2658 5000 ext 1520 [email protected] • Power • Telcos (91) 22 6623 2632 [email protected] [email protected] • Strategy • Oil & Gas • Automobile • Cement • Property LEE Ju Ye WONG Wei Sum, CFA Jaroonpan WATTANAWONG Singapore | Thailand (603) 2297 8679 [email protected] Neerav DALAL (66) 2658 5000 ext 1404 (65) 6231 5844 • Property [email protected] (91) 22 6623 2606 [email protected] [email protected] LEE Yen Ling • Software Technology • Telcos • Transportation • Small cap Linda LIU (603) 2297 8691 [email protected] Thanatphat SUKSRICHAVALIT Singapore | Vietnam • Glove • Ports • Shipping • Healthcare Vishal PERIWAL (66) 2658 5000 ext 1401 (65) 6231 5847 (91) 22 6623 2605 [email protected] [email protected] Ivan YAP [email protected] • Media • Electronics (603) 2297 8612 [email protected] • Infrastructure Sorrabhol VIRAMETEEKUL Dr Zamros DZULKAFLI • Automotive • Semiconductor • Technology (603) 2082 6818 Head of Digital Research [email protected] INDONESIA (66) 2658 5000 ext 1550 Kevin WONG [email protected] (603) 2082 6824 [email protected] Isnaputra ISKANDAR Head of Research • Food, Transportation Ramesh LANKANATHAN • REITs • Consumer Discretionary (62) 21 8066 8680 (603) 2297 8685 [email protected] Wijit ARAYAPISIT [email protected] Adrian WONG, CFA • Strategy • Metals & Mining • Cement (66) 2658 5000 ext 1450 (603) 2297 8675 [email protected] [email protected] FX Rahmi MARINA • Strategist • Constructions (62) 21 8066 8689 Kritsapong PATAN Saktiandi SUPAAT [email protected] (66) 2658 5000 ext 1310 Head of FX Research Jade TAM • Banking & Finance [email protected] (65) 6320 1379 (603) 2297 8687 [email protected] Aurellia SETIABUDI • Chartist [email protected] • Consumer Staples (62) 21 8066 8691 Apisit PATTARASAKOLKIAT [email protected] Christopher WONG Mohd Hafiz HASSAN (66) 2658 5000 ext 1405 • Property (65) 6320 1347 (603) 2082 6819 [email protected] [email protected] [email protected] • Building Materials • Small & Mid Caps Janni ASMAN • Chartist (62) 21 8066 8687 Leslie TANG Amirah AZMI [email protected] VIETNAM (65) 6320 1378 (603) 2082 8769 [email protected] • Cigarette • Healthcare • Retail LE Hong Lien, ACCA [email protected] • Media • Plantations Luthfi RIDHO Head of Institutional Research (84 28) 44 555 888 x 8181 Fiona LIM TEE Sze Chiah Head of Retail Research (62) 21 8066 8690 [email protected] (65) 6320 1374 (603) 2082 6858 [email protected] [email protected] • Strategy • Consumer • Diversified [email protected] • Economics Nik Ihsan RAJA ABDULLAH, MSTA, CFTe THAI Quang Trung, CFA (603) 2297 8694 PHILIPPINES STRATEGY Deputy Head of Institutional Research [email protected] (84 28) 44 555 888 x 8180 Sadiq CURRIMBHOY Minda OLONAN Head of Research (63) 2 849 8840 [email protected] Global Strategist [email protected] • Real Estate • Construction • Materials (65) 6231 5836 • Strategy • Conglomerates [email protected] LE Nguyen Nhat Chuyen Katherine TAN (84 28) 44 555 888 x 8082 Willie CHAN (63) 2 849 8843 [email protected] Hong Kong | Regional [email protected] • Oil & Gas • Banks • Conglomerates • Ports (852) 2268 0631 QUAN Trong Thanh [email protected] Luis HILADO (84 28) 44 555 888 x 8184 [email protected] FIXED INCOME (65) 6231 5848 [email protected] • Telcos • Banks Winson PHOON, ACA Romel LIBO-ON NGUYEN Thi Ngan Tuyen (65) 6812 8807 (63) 2 849 8844 Head of Retail Research [email protected] [email protected] (84 28) 44 555 888 x 8081 • Property [email protected] Se Tho Mun Yi • Food & Beverage • Oil&Gas • Banking (603) 2074 7606 Kayzer LLANDA TRUONG Quang Binh [email protected] (63) 2 849 8839 Deputy Head of Retail Research [email protected] (84 28) 44 555 888 x 8087 • Utilities [email protected] • Rubber Plantation • Tyres & Tubes • Oil & Gas

TRINH Thi Ngoc Diep (84 28) 44 555 888 x 8208 [email protected] • Technology • Utilities • Construction NGUYEN Thi Sony Tra Mi (84 28) 44 555 888 x 8084 [email protected] • Port Operation • Pharmaceutical • Food & Beverage NGUYEN Thanh Lam (84 28) 44 555 888 x 8086 [email protected] • Technical Analysis

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Health Management Int'l

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 fluct uate 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 fr om 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 Ban k 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 contai ned 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 f orward-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 solic it 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 t he 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 la w. The securities described herein may not be eligible for sale in all jurisdictions or to certain categories of investors. With out 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 repor t. 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 val uations 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 Rese arch 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 Singapo re 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 eva luation 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. Tha ipat 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 ac curacy 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 a nd wishing to effect transactions in any security mentioned within must do so with: Maybank Kim Eng Securities USA Inc. 400 Park Avenue, 11th Floor, New York, New York 10022, 1-(212) 688-8886 and not with, the issuer of this report.

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UK This document is being distributed by Maybank Kim Eng Securities (London) Ltd (“Maybank KESL”) which is authorized and regula ted, 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 t o 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. INZ000010 538). 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 Conduct 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 he rein 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 15 May 2019, 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 15 May 2019, KESHK and the authoring analyst do not have any interest in any companies recommended in this research report.

India: As of 15 May 2019, 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 soph isticated 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 an d 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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Historical recommendations and target price: Health Management Int'l (HMI SP)

15 Nov 13 May 14 May Buy : SGD0.8 Buy : SGD0.7 Buy : SGD0.7 0.7

0.7

0.6

0.5 Nov-17 Feb-18 May-18 Aug-18 Nov-18 Feb-19 May-19

Health Management Int'l

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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 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 400 Park Avenue, 11th Floor 33rd Floor, Menara Maybank, Singapore 059304 77 Queen Victoria Street New York, New York 10022, 100 Jalan Tun Perak, London EC4V 4AY, UK U.S.A. 50050 Kuala Lumpur Tel: (65) 6336 9090 Tel: (603) 2059 1888; Tel: (44) 20 7332 0221 Tel: (212) 688 8886 Fax: (603) 2078 4194 Fax: (44) 20 7332 0302 Fax: (212) 688 3500

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 28/F, Lee Garden Three, Sentral Senayan III, 22nd Floor 2nd Floor, The International, 59000 Kuala Lumpur 1 Sunning Road, Causeway Bay, Jl. Asia Afrika No. 8 16, Maharishi Karve Road, Tel: (603) 2297 8888 Hong Kong Gelora Bung Karno, Senayan Churchgate Station, Fax: (603) 2282 5136 Jakarta 10270, Indonesia Mumbai City - 400 020, India Tel: (852) 2268 0800 Fax: (852) 2877 0104 Tel: (62) 21 2557 1188 Tel: (91) 22 6623 2600 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

Indonesia London Iwan Atmadjaja Greg Smith [email protected] [email protected] (62) 21 8066 8555 Tel: (44) 207-332-0221

New York India James Lynch Sanjay Makhija [email protected] [email protected] Tel: (212) 688 8886 Tel: (91)-22-6623-2629

Philippines Keith Roy [email protected] Tel: (63) 2 848-5288

www.maybank-ke.com | www.maybank-keresearch.com

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