Company Guide Workpoint Entertainment PCL

Version 15 | Bloomberg: WORK TB | Reuters: WORK.BK Refer to important disclosures at the end of this report

DBS Group Research . Equity 14 May 2018

HOLD (Downgrade from BUY) Wait and see Last Traded Price ( 11 May 2018): Bt60.25 (SET : 1,765.93) Price Target 12-mth: Bt66.00 (10% upside) (Prev Bt81.00) Downgrade from BUY to HOLD with lower TP of Bt66. Given Analyst the softer-than-expected 1Q18 earnings, we have cut our Nantika WIANGPHOEM +66 28577836 [email protected] FY18/FY19 forecast by 19%/18% to reflect a more conservative

outlook for revenue and gross margins due to intense What’s New competition in the industry. WORK’s ratings dropped to c.1.06% in 1Q18 from c.1.3-1.4% in 2017, and this started to • 1Q18 net profit came in at Bt166m (-4% y-o-y), fully recover in April 2018, However, we believe although WORK is recovering from last year’s cremation of the former king still able to increase its ad rate, its utilisation rate might not but still disappointed the market reach the 2018 target of 70% vs 67% for last year. Hence, • Revised down earnings forecast by 19%/16% in given the limited upside to our new TP of Bt66 (based on DCF FY18/FY19 to reflect more conservative view valuation) and a more conservative outlook for the industry, we • Downgrade from BUY to HOLD with lower TP of Bt66, downgrade WORK’s rating from BUY to HOLD. However, in the based on DCF valuation longer term, once WORK is able to fully resume its rating,

opportunities to re-rate its share price could arise. Where we differ. As we anticipate a more competitive industry Price Relative going forward, we are now imputing lower revenue growth Bt Relative Index from lower utilisation rates. As the market has a more

105.8 484 95.8 434 aggressive view, our earnings forecast is lower than consensus. 85.8 384 75.8 334 Potential catalysts. WORK’s share price has been mainly driven 65.8 284 55.8 234 45.8 by its strong earnings growth, which can be attributed to its 184 35.8 25.8 134 15.8 84 high TV ratings via the continuous launch of new hit May-14 May-15 May-16 May-17 May-18 programmes. We expect earnings to continuously record new Workpoint Entertainment PCL (LHS) Relative SET (RHS) highs in the coming years, which should act as a key re-rating Forecasts and Valuation catalyst. The robust growth should be driven by i) higher FY Dec (Btm) 2016A 2017A 2018F 2019F average ad rates, and ii) better economies of scale, as c.90% of Revenue 2,634 3,853 4,187 4,657 its cost base is fixed (with low variable costs). EBITDA 917 1,754 1,902 2,104 Pre-tax Profit 255 1,166 1,262 1,483 Valuation: Net Profit 199 904 1,004 1,180 Net Pft (Pre Ex.) 199 904 1,004 1,180 Our TP of Bt66 is based on DCF valuation (WACC of 8.8%). Net Pft Gth (Pre-ex) (%) 21.4 355.2 11.0 17.6 EPS (Bt) 0.48 2.11 2.29 2.69 Key Risks to Our View: EPS Pre Ex. (Bt) 0.48 2.11 2.29 2.69 Fierce competition, audience preference changes, market-share EPS Gth Pre Ex (%) 21 344 8 18 Diluted EPS (Bt) 0.48 2.11 2.29 2.69 expansion of other types of media, and reliance on key staff. Net DPS (Bt) 0.27 1.42 1.49 1.75 BV Per Share (Bt) 7.14 10.4 11.3 12.7 At A Glance PE (X) 126.6 28.5 26.3 22.4 Issued Capital (m shrs) 441 PE Pre Ex. (X) 126.6 28.5 26.3 22.4 Mkt. Cap (Btm/US$m) 26,588 / 833 P/Cash Flow (X) 43.2 18.8 18.3 15.5 Major Shareholders (%) EV/EBITDA (X) 27.0 13.9 13.0 11.5 Phanya Nirunkul (%) 25.91 Net Div Yield (%) 0.4 2.3 2.5 2.9 Prapas Cholsaranon (%) 25.91 P/Book Value (X) 8.4 5.8 5.3 4.7 Net Debt/Equity (X) CASH CASH CASH CASH Nortrust Nominees Ltd. (%) 10.74 ROAE (%) 6.9 24.4 21.3 22.3 Free Float (%) 33.75 Earnings Rev (%): (19) (18) 3m Avg. Daily Val (US$m) 5.8 Consensus EPS (Bt): 2.87 3.45 ICB Industry : Consumer Services / Media Other Broker Recs: B: 14 S: 0 H: 2 Source of all data on this page: Company, DBSVTH, Bloomberg Finance L.P

ed: CK / sa: PY, CS Company Guide Workpoint Entertainment PCL

WHAT’S NEW Disappointing 1Q18 results

WORK posted weak 1Q18 net profit of Bt166m (-4% y-o-y): Downgrade from BUY to HOLD: After the earnings revision, WORK’s 1Q18 earnings were soft and missed both our and our DCF-based TP falls from Bt81 to Bt66. Hence, given the consensus estimates by 38% and 26%, respectively. The fierce competition and sluggish recovery in ratings, we deviation was mainly due to only moderate sales growth of downgrade our BUY call to HOLD call. However, we still 10% y-o-y despite the strong growth in ad rate (+ c.30-40% believe that once the company ramps up its ratings back to y-o-y). We believe the lower-than-expected sales could be the previous level, opportunities to re-rate the share price pressured by the low utilisation rate, causing the overall could arise. utilisation rate to not achieve management’s 2018 target rate

of 70%. The soft revenue performed also pulled down its gross margin from 51.3% in 1Q17 to 45.8% in 1Q18. As a result, WORK’s earnings contracted by 4% y-o-y in 1Q18.

Cut earnings forecasts to reflect more conservative outlook: We believe the intense competition in the media industry will persist and WORK could take some time to restore its ratings back to the previous level at 1.3-1.4%. Hence, we lower our revenue growth forecast after cutting WORK’s utilisation rate

from 70% to 69% in 2018, and by 1% throughout our forecast period. Also, we cut our gross margin from 56.2%/56.7% to 51.3%/51.8% to reflect the lower sales.

Quarterly / Interim Income Statement (Btm) FY Dec (Btm) 1Q17 4Q17 1Q18 Chg y-o-y Chg q-o-q Sales 806 769 885 10% 15% Cost of Goods Sold (393) (436) (480) 22% 10% Gross Profit 413 332 405 -2% 22% SGA Expenses (160) (303) (188) 17% -38% Operating profit 253 30 218 -14% 628% Other Income/expense 6 (13) 5 -30% -135% Share profit / loss 2 (4) 0 -89% -105% EBIT 261 13 222 -15% 1582% Interest expense (26) (26) (16) -36% -37% Pretax profit 236 (13) 206 -12% -1700% Income Tax (61) (9) (38) -37% 319% Minority interest (1) (0) (2) 94% 860% Norm. Profit 173 (22) 166 -4% n.m. Extra items 0 0 0 n.m. n.m. Net Profit 173 (22) 166 -4% n.m.

Gross Margin 51.3% 43.2% 45.8% SGA/ Sales 19.9% 39.4% 21.2% Operating Margin 31.4% 3.9% 24.6% Net Margin 21.5% -2.9% 18.7%

Source of all data: Company, DBSVTH

Page 2

Company Guide Workpoint Entertainment PCL

Top 3 highest-rating channels CRITICAL DATA POINTS TO WATCH % 4.5 4.0 Critical Factors 3.5 Higher average ad rates from rising ratings and increase in hit 3.0 2.48 2.5 programmes. Normally, WORK sells ad time to agencies under 2.0 2.29 1.338 1.31 1.5 1.08 1.15 1.19 1.16 1.12 packages where rates will be fixed according to agreements. 0.98 1.55 1.03 1.11 1.00 0.85 0.8 0.74 0.78 1.49 1.44 However, in 4Q15, WORK had some hit programmes whose ad time 1.0 1.31 0.5 were sold separately from the standard packages and based on the 0.0 Cost Per Rating Point (CPRP). The ad rates for these programmes (the prime time) ranged from Bt200,000-240,000 per minute. In 2017, WORK there were some additional programmes that were sold separately – “The Mask Singer” “Mic Thongkam Kids” and “I Can See Your 2017 sales breakdown Voice” – due to their solid ratings. We also expect more Events Others programmes such as “SuperMuM” and “Teng-Nong Witthaya” to be marketing 1% 4% sold separately in the future. Given WORK’s high ratings, we forecast its average ad rate per minute to increase from c.Bt76,000 in 2017 to Concerts 5% Bt82,000 in 2018.

New programmes coming onstream continuously. To gain higher ratings and audience share, it plans to launch new programmes. The new programmes lined up for 2018 are The Show (music show), The Television programs Rapper (music show), Diva Makeover (variety show), etc. Each 90% programme is expected to gain high ratings (above 4%). Hence, its continuous efforts in launching new programmes to gain higher ratings will allow the company to charge higher ad rates on a Gross margins (%) sustainable basis. As a result, revenue will continue to expand. 60.0 54.8 55.0 51.3 51.8 Benefits from better economies of scale. WORK has c.90% of costs 50.0 as fixed costs and relatively independent of revenue, including 43.2 45.0 42.5 amortisation expenses for its digital TV licence, broadcast rental fees, 38.2 production costs and amortisation expenses for purchased contents. 40.0 Thus, we believe top-line growth will enable WORK to enjoy the 35.0 30.2 benefits of better economies of scale. We expect gross margins to 30.0 improve from 43.2% in 2016 to 54.8% in 2017 and 51.3% in 2018. 25.0 20.0 Expansion into social media. As more media companies make a foray 2013A 2014A 2015A 2016A 2017A 2018F 2019F into the social networks due to their popularity (in view of the Gross margin (%) increase in the number of users), WORK has also expanded its on-air Revenue and net margins channels via social networks such as Youtube, Facebook and Line TV, Bt m to take advantage of opportunities that might arise in the social 5,000 4,657 55.0 network arena. However, due to the limited target groups for social 4,500 4,187 3,853 45.0 networks, most agencies still prefer to use TV as the first choice to 4,000 3,500 35.0 promote their products and services. Hence, the company believes 3,000 2,634 25.1 2,388 23.3 23.6 that social media will grow in Thailand, though not rapidly in the 2,500 2,167 2,053 25.0 next few years. 2,000 10.9 15.0 1,500 6.7 7.4 1,000 -0.8 5.0 500 0 -5.0 2013A 2014A 2015A 2016A 2017A 2018F 2019F

Sales Net margin (%)

Source: Company, DBSVTH

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Company Guide Workpoint Entertainment PCL

Appendix 1: WORK’s critical factor WORK’s share price vs WORK’s TV rating Remarks

120 1.8 WORK’s share price tends to move in tandem with its TV ratings that has a direct impact on its ad rates. Hence, if 1.6 100 WORK continues to gain market share (which implies a 1.4 higher rating), WORK’s share price should improve in line 80 1.2 with any rating improvement. 1 60 0.8 40 0.6 0.4 20 0.2

0 0

Jul-14 Jul-15 Jul-16 Jul-17

Jan-15 Jan-16 Jan-17 Jan-18

Oct-14 Oct-15 Oct-16 Oct-17

Apr-14 Apr-15 Apr-16 Apr-17

Share price Rating

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

WORK’s share price vs annual revenue Remarks

90 4500 WORK’s share price tends to move along with annual revenue. Thus, if it can gain higher ratings on a 80 4000 continuous basis, WORK should continue to register 70 3500 strong revenue growth, which will act as a key re-rating catalyst for the share price. 60 3000

50 2500

40 2000 30 1500 20 1000 10 500 0 0 2010 2011 2012 2013 2014 2015 2016 2017

Share price Revenue

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

WORK’s share price vs net profit Remarks

50 450 WORK’s share price tends to move in tandem with its net profit. A sustained rise in net profit going forward 45 400 should serve as a positive catalyst for the share price. 40 350

35 300

30 250 25 200 20 150 15 100 10 50 5 - 0 (50) 2010 2011 2012 2013 2014 2015 2016

Share price Net profit

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

Page 4

Company Guide Workpoint Entertainment PCL

Leverage & Asset Turnover (x) Balance Sheet: 0.35 0.8

Despite a net cash balance of Bt549m as of end-Mar 2018, WORK 0.30 0.8 0.7 has Digital TV Licence Payable of Bt739m which can be considered to 0.25 be a major liability. Repayments for the Digital TV Licence Payable are 0.7 0.20 c.Bt200-370m per annum until 2020. The company expects to use 0.6 0.15 internal cashflow from operations and cash proceeds from its 0.6 0.10 warrants issuance to support its day-to-day operations, capex, and 0.5 repayments of Digital TV License Payable and bank loans. We expect 0.05 0.5 0.00 0.4 Bt1.49 DPS in 2018 and Bt1.75 DPS in 2019, assuming a 70% 2015A 2016A 2017A 2018F 2019F dividend payout ratio. Gross Debt to Equity (LHS) Asset Turnover (RHS)

Capital Expenditure Share Price Drivers: Btm Launch of new hit programmes. WORK expects to continuously 1,200.0 launch new programmes to gain higher ratings. This allows the 1,000.0 company to charge higher ad rates which will help boost the 800.0 company’s top line and earnings. 600.0

Major events awarded. WORK plans to maintain its other businesses 400.0 (besides its television programme business) to deliver constant 200.0 growth. If WORK manages to clinch the organising contract for any 0.0 unexpected major event, this could act as a catalyst for its share 2015A 2016A 2017A 2018F 2019F price. Capital Expenditure (-) Rising margins. WORK’s margins will continue improving due to ROE (%) better economies of scale, as most of its costs are fixed (with low variable costs). As a result, WORK’s earnings will improve over time 20.0% and this can help re-rate the share price.

15.0% Key Risks: Intense competition. Around 91% of 2016's total revenue came 10.0% from the TV media business which is considered highly competitive. 5.0% However, WORK has done well to gain higher ratings and expects to continue doing so. 0.0% 2015A 2016A 2017A 2018F 2019F Changes in audience preferences. The business faces the risk of rapid changes in audience preference and fashion from time to time. Forward PE Band (x)

Hence, it might face lower ratings if it fails to keep up. 171.6 (x)

Expansion into other media. Recently, social media has been gaining 151.6

131.6 popularity and a higher share of the overall media market. The +2sd: 126.6x increase in social media market share will negatively affect the TV 111.6 media business. Thus, WORK has started to invest in social media via 91.6 +1sd: 92.6x 71.6 Youtube, Facebook and Line to cope with the changes. Avg: 58.6x 51.6 Reliance on key personnel. The company’s TV business is driven by its 31.6 -1sd: 24.6x key personnel, including MCs, and production and creative teams. 11.6

Thus, the departure of such key personnel might negatively affect -8.4May-14 May-15 May-16 May-17 WORK’s ratings. PB Band (x) Company Background (x) Workpoint Entertainment Pcl. (WORK) is engaged in the 13.0 entertainment and media businesses. Its offers a wide range of products and services including digital TV channel, TV content 11.0 +2sd: 9.46x production, movies, publishing, event organisation, show business, 9.0 animation and computer graphics. +1sd: 8.04x 7.0 Avg: 6.62x 5.0 -1sd: 5.2x -2sd: 3.78x 3.0 May-14 May-15 May-16 May-17

Source: Company, DBSVTH

Page 5

Company Guide Workpoint Entertainment PCL

Key Assumptions FY Dec 2015A 2016A 2017A 2018F 2019F

Sales growth (%) 2,388 2,634 3,853 4,187 4,657 Gross margin (%) 16.3 10.3 46.3 8.7 11.2 SGA/Sales (%) 42.5 43.2 54.8 51.3 51.8 Net profit margin (%) 31.6 31.2 22.3 21.6 20.6 Sales growth (%) 6.7 7.4 23.3 23.6 25.1

Income Statement (Btm) FY Dec 2015A 2016A 2017A 2018F 2019F

Revenue 2,388 2,634 3,853 4,187 4,657 Cost of Goods Sold (1,372) (1,496) (1,741) (2,038) (2,244) Gross Profit 1,015 1,137 2,111 2,149 2,412 Other Opng (Exp)/Inc (754) (822) (860) (905) (960) Operating Profit 261 315 1,252 1,244 1,453 Other Non Opg (Exp)/Inc 66.4 50.6 25.0 69.3 45.0 Associates & JV Inc 14.4 2.14 (12.8) 4.19 4.66 Net Interest (Exp)/Inc (132) (113) (97.6) (55.5) (18.9) Exceptional Gain/(Loss) 0.0 0.0 0.0 0.0 0.0 Pre-tax Profit 210 255 1,166 1,262 1,483 Tax (45.4) (52.1) (258) (253) (298) Minority Interest (0.8) (4.4) (4.4) (4.9) (5.8) Preference Dividend 0.0 0.0 0.0 0.0 0.0 Net Profit 164 199 904 1,004 1,180 Net Profit before Except. 164 199 904 1,004 1,180 EBITDA 849 917 1,754 1,902 2,104 Growth Revenue Gth (%) 16.3 10.3 46.3 8.7 11.2 EBITDA Gth (%) 85.2 8.1 91.2 8.4 10.7 Opg Profit Gth (%) (719.9) 20.5 297.3 (0.6) 16.8 Net Profit Gth (Pre-ex) (%) nm 21.4 355.2 11.0 17.6 Margins & Ratio Gross Margins (%) 42.5 43.2 54.8 51.3 51.8 Opg Profit Margin (%) 11.0 12.0 32.5 29.7 31.2 Net Profit Margin (%) 6.9 7.5 23.5 24.0 25.3 ROAE (%) 7.4 6.9 24.4 21.3 22.3 ROA (%) 3.1 3.6 15.2 15.5 18.0 ROCE (%) 4.5 5.3 19.2 17.8 20.1 Div Payout Ratio (%) 86.7 56.9 67.0 65.0 65.0 Net Interest Cover (x) 2.0 2.8 12.8 22.4 77.1 Source: Company, DBSVTH

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Company Guide Workpoint Entertainment PCL

Quarterly / Interim Income Statement (Btm) FY Dec 1Q2017 2Q2017 3Q2017 4Q2017 1Q2018

Revenue 806 1,114 1,163 769 885 Cost of Goods Sold (393) (448) (464) (436) (480) Gross Profit 413 666 700 332 405 Other Oper. (Exp)/Inc (160) (200) (197) (303) (188) Operating Profit 253 466 503 29.9 218 Other Non Opg (Exp)/Inc 6.46 25.7 5.95 (13.1) 4.53 Associates & JV Inc 1.75 (5.4) (5.6) (3.6) 0.19 Net Interest (Exp)/Inc (25.6) (22.9) (22.9) (26.1) (16.4) Exceptional Gain/(Loss) 0.0 0.0 0.0 0.0 0.0 Pre-tax Profit 236 463 480 (12.9) 206 Tax (60.9) (89.4) (98.3) (9.1) (38.1) Minority Interest (1.3) (1.2) (1.8) (0.3) (2.4) Net Profit 173 373 380 (22.2) 166 Net profit bef Except. 173 373 380 (22.2) 166 EBITDA 376 608 627 159 359

Growth Revenue Gth (%) 58.5 38.3 4.4 (33.9) 15.1 EBITDA Gth (%) 405.5 61.5 3.2 (74.7) 126.8 Opg Profit Gth (%) (444.6) 84.3 7.8 (94.1) 628.3 Net Profit Gth (Pre-ex) (%) (340.8) 115.1 1.9 (105.8) (845.1) Margins Gross Margins (%) 51.3 59.8 60.1 43.2 45.8 Opg Profit Margins (%) 31.4 41.8 43.2 3.9 24.6 Net Profit Margins (%) 21.5 33.5 32.7 (2.9) 18.7

Balance Sheet (Btm) FY Dec 2015A 2016A 2017A 2018F 2019F

Net Fixed Assets 997 1,009 1,100 992 896 Invts in Associates & JVs 75.0 36.1 23.3 23.4 23.4 Other LT Assets 2,755 2,597 2,648 2,566 2,387 Cash & ST Invts 1,277 1,241 1,894 2,047 2,388 Inventory 46.7 84.8 170 198 219 Debtors 437 454 520 565 628 Other Current Assets 0.0 0.0 93.6 94.1 96.3 Total Assets 5,588 5,422 6,448 6,485 6,638

ST Debt 341 237 221 237 26.5 Creditor 391 331 476 557 613 Other Current Liab 370 389 539 201 201 LT Debt 406 579 245 159 39.2 Other LT Liabilities 1,294 900 524 338 152 Shareholder’s Equity 2,769 2,980 4,435 4,980 5,586 Minority Interests 18.1 6.28 8.52 13.4 19.2 Total Cap. & Liab. 5,588 5,422 6,448 6,485 6,638

Non-Cash Wkg. Capital (277) (181) (232) 99.5 129 Net Cash/(Debt) 530 425 1,428 1,651 2,322 Debtors Turn (avg days) 62.1 61.8 46.1 47.3 46.7 Creditors Turn (avg days) 184.7 139.1 117.6 129.6 130.0 Inventory Turn (avg days) 26.3 25.3 37.1 46.2 46.3 Asset Turnover (x) 0.4 0.5 0.6 0.6 0.7 Current Ratio (x) 1.6 1.9 2.2 2.9 4.0 Quick Ratio (x) 1.6 1.8 2.0 2.6 3.6 Net Debt/Equity (X) CASH CASH CASH CASH CASH Net Debt/Equity ex MI (X) CASH CASH CASH CASH CASH Capex to Debt (%) 134.1 94.8 170.1 196.9 789.7 Z-Score (X) 7.2 8.3 11.1 11.1 15.7

Source: Company, DBSVTH

Page 7

Company Guide Workpoint Entertainment PCL

Cash Flow Statement (Btm) FY Dec 2015A 2016A 2017A 2018F 2019F

Pre-Tax Profit 210 255 1,166 1,262 1,483 Dep. & Amort. 506 549 490 584 602 Tax Paid (45.4) (52.1) (258) (253) (298) Assoc. & JV Inc/(loss) 0.0 0.0 0.0 0.0 0.0 Chg in Wkg.Cap. (379) (144) 41.5 (150) (32.6) Other Operating CF 105 (26.7) (70.9) (0.7) (44.8) Net Operating CF 397 582 1,369 1,443 1,710 Capital Exp.(net) (1,001) (774) (793) (779) (519) Other Invts.(net) (193) 16.1 (142) (3.3) (13.3) Invts in Assoc. & JV 0.0 0.0 0.0 0.0 0.0 Div from Assoc & JV 15.0 0.0 0.0 0.0 0.0 Other Investing CF 100 (2.6) (1.8) 0.0 0.0 Net Investing CF (1,079) (760) (937) (783) (533) Div Paid (92.5) (113) (606) (652) (767) Chg in Gross Debt 585 (4.8) (9.0) 9.04 0.0 Capital Issues 1,073 199 199 199 199 Other Financing CF (864) (96.7) (275) (73.0) (290) Net Financing CF 702 (15.8) (691) (518) (858) Currency Adjustments 0.0 0.0 0.0 0.0 0.0 Chg in Cash 19.8 (194) (260) 142 320 Opg CFPS (Bt) 1.87 1.74 3.10 3.63 3.97 Free CFPS (Bt) (1.5) (0.5) 1.34 1.51 2.71 Source: Company, DBSVTH

Target Price & Ratings History

Bt 12-mth Date of Closing 102.00 S.No. T arget Rating Report Price Price 1: 19 May 17 59.75 65.00 BUY 92.00 2: 20 Jul 17 63.25 65.00 HOLD

3: 11 Aug 17 63.50 73.00 BUY 82.00 4: 20 Sep 17 82.25 78.00 HOLD

5: 03 Oct 17 84.00 81.00 HOLD 6: 10 Nov 17 98.50 97.00 HOLD 72.00 7: 29 Nov 17 84.50 97.00 HOLD 8: 19 Dec 17 85.00 97.00 BUY 62.00 9: 02 May 18 61.75 81.00 BUY

52.00 May-17 Jul-17 Sep-17 Nov-17 Jan-18 Mar-18

Note : Share price and Target price are adjusted for corporate actions. Source: DBSVTH Analyst: Nantika WIANGPHOEM

THAI-CAC n/a Corporate Governance CG Rating (as of Feb 2018) n/a

THAI-CAC is Companies participating in Thailand's Private Sector Score Description Collective Action Coalition Against Corruption programme (Thai Declared Companies that have declared their intention to join CAC CAC) under Thai Institute of Directors (as of Feb 2018) are Certified Companies certified by CAC. categorised into: Score Range Number of Logo Description Corporate Governance CG Rating is based on Thai Institute of 90-100 Excellent Directors (IOD)’s annual assessment of corporate governance 80-89 Very Good practices of listed companies. The assessment covers 235 criteria in five categories including board responsibilities (35% weighting), 70-79 Good disclosure and transparency (20%), role of stakeholders (20%), 60-69 Satisfactory equitable treatment of shareholders (10%) and rights of shareholders (15%). The IOD then assigns numbers of logos to 50-59 Pass each company based on their scoring as follows: <50 No logo given N/A

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Company Guide Workpoint Entertainment PCL

DBSVTH recommendations are based an Absolute Total Return* Rating system, defined as follows: STRONG BUY (>20% total return over the next 3 months, with identifiable share price catalysts within this time frame) BUY (>15% total return over the next 12 months for small caps, >10% for large caps) HOLD (-10% to +15% total return over the next 12 months for small caps, -10% to +10% for large caps) FULLY VALUED (negative total return i.e. > -10% over the next 12 months) SELL (negative total return of > -20% over the next 3 months, with identifiable catalysts within this time frame) Share price appreciation + dividends

Completed Date: 14 May 2018 06:41:14 (THA) Dissemination Date: 14 May 2018 07:01:02 (THA)

Sources for all charts and tables are DBSVTH unless otherwise specified.

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Company Guide Workpoint Entertainment PCL

DBSVUSA, a US-registered broker-dealer, does not have its own investment banking or research department, has not participated in any public offering of securities as a manager or co-manager or in any other investment banking transaction in the past twelve months and does not engage in market-making.

ANALYST CERTIFICATION The research analyst(s) primarily responsible for the content of this research report, in part or in whole, certifies that the views about the companies and their securities expressed in this report accurately reflect his/her personal views. The analyst(s) also certifies that no part of his/her compensation was, is, or will be, directly or indirectly, related to specific recommendations or views expressed in the report. The research analyst (s) primarily responsible for the content of this research report, in part or in whole, certifies that he or his associate1 does not serve as an officer of the issuer or the new listing applicant (which includes in the case of a real estate investment trust, an officer of the management company of the real estate investment trust; and in the case of any other entity, an officer or its equivalent counterparty of the entity who is responsible for the management of the issuer or the new listing applicant) and the research analyst(s) primarily responsible for the content of this research report or his associate does not have financial interests2 in relation to an issuer or a new listing applicant that the analyst reviews. DBS Group has procedures in place to eliminate, avoid and manage any potential conflicts of interests that may arise in connection with the production of research reports. The research analyst(s) responsible for this report operates as part of a separate and independent team to the investment banking function of the DBS Group and procedures are in place to ensure that confidential information held by either the research or investment banking function is handled appropriately. There is no direct link of DBS Group's compensation to any specific investment banking function of the DBS Group.

COMPANY-SPECIFIC / REGULATORY DISCLOSURES 1. DBS Bank Ltd, DBS HK, DBS Vickers Securities (Singapore) Pte Ltd (''DBSVS''), DBSV HK or their subsidiaries and/or other affiliates do not have a proprietary position in the securities recommended in this report as of 30 Apr 2018. 2. Neither DBS Bank Ltd, DBS HK nor DBSV HK market makes in equity securities of the issuer(s) or company(ies) mentioned in this Research Report.

Compensation for investment banking services: 3. DBSVUSA does not have its own investment banking or research department, nor has it participated in any public offering of securities as a manager or co-manager or in any other investment banking transaction in the past twelve months. Any US persons wishing to obtain further information, including any clarification on disclosures in this disclaimer, or to effect a transaction in any security discussed in this document should contact DBSVUSA exclusively. Disclosure of previous investment recommendation produced: 4. DBS Bank Ltd, DBS Vickers Securities (Singapore) Pte Ltd (''DBSVS''), their subsidiaries and/or other affiliates may have published other investment recommendations in respect of the same securities / instruments recommended in this research report during the preceding 12 months. Please contact the primary analyst listed in the first page of this report to view previous investment recommendations published by DBS Bank Ltd, DBS Vickers Securities (Singapore) Pte Ltd (''DBSVS''), their subsidiaries and/or other affiliates in the preceding 12 months.

1 An associate is defined as (i) the spouse, or any minor child (natural or adopted) or minor step-child, of the analyst; (ii) the trustee of a trust of which the analyst, his spouse, minor child (natural or adopted) or minor step-child, is a beneficiary or discretionary object; or (iii) another person accustomed or obliged to act in accordance with the directions or instructions of the analyst. 2 Financial interest is defined as interests that are commonly known financial interest, such as investment in the securities in respect of an issuer or a new listing applicant, or financial accommodation arrangement between the issuer or the new listing applicant and the firm or analysis. This term does not include commercial lending conducted at arm's length, or investments in any collective investment scheme other than an issuer or new listing applicant notwithstanding the fact that the scheme has investments in securities in respect of an issuer or a new listing applicant.

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Company Guide Workpoint Entertainment PCL

RESTRICTIONS ON DISTRIBUTION General This report is not directed to, or intended for distribution to or use by, any person or entity who is a citizen or resident of or located in any locality, state, country or other jurisdiction where such distribution, publication, availability or use would be contrary to law or regulation.

Australia This report is being distributed in Australia by DBS Bank Ltd. (“DBS”) or DBS Vickers Securities (Singapore) Pte Ltd (“DBSVS”). DBS holds Australian Financial Services Licence no. 475946.

DBSVS is exempted from the requirement to hold an Australian Financial Services Licence under the Corporation Act 2001 (“CA”) in respect of financial services provided to the recipients. DBSVS is regulated by the Monetary Authority of Singapore under the laws of Singapore, which differ from Australian laws.

Distribution of this report is intended only for “wholesale investors” within the meaning of the CA.

Hong Kong This report has been prepared by an entity(ies) which is not licensed by the Hong Kong Securities and Futures Commission to carry on the regulated activity of advising on securities pursuant to the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong). This report is being distributed in Hong Kong and is attributable to DBS Vickers Hong Kong Limited, a licensed corporation licensed by the Hong Kong Securities and Futures Commission to carry on the regulated activity of advising on securities pursuant to the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong).

For any query regarding the materials herein, please contact Paul Yong (CE. No. ASE988) at [email protected].

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

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

Wong Ming Tek, Executive Director, ADBSR

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

Thailand This report is being distributed in Thailand by DBS Vickers Securities (Thailand) Co Ltd.

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Company Guide Workpoint Entertainment PCL

United This report is produced by DBS Vickers Securities (Thailand) Co Ltd which is regulated by the Securities and Exchange Kingdom Commission, Thailand.

This report is disseminated in the by DBS Vickers Securities (UK) Ltd, ("DBSVUK"). DBSVUK is authorised and regulated by the Financial Conduct Authority in the United Kingdom.

In respect of the United Kingdom, this report is solely intended for the clients of DBSVUK, its respective connected and associated corporations and affiliates only and no part of this document may be (i) copied, photocopied or duplicated in any form or by any means or (ii) redistributed without the prior written consent of DBSVUK. This communication is directed at persons having professional experience in matters relating to investments. Any investment activity following from this communication will only be engaged in with such persons. Persons who do not have professional experience in matters relating to investments should not rely on this communication.

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

United Arab This report is provided by DBS Bank Ltd (Company Regn. No. 196800306E) which is an Exempt Financial Adviser as defined Emirates in the Financial Advisers Act and regulated by the Monetary Authority of Singapore. This report is for information purposes only and should not be relied upon or acted on by the recipient or considered as a solicitation or inducement to buy or sell any financial product. It does not constitute a personal recommendation or take into account the particular investment objectives, financial situation, or needs of individual clients. You should contact your relationship manager or investment adviser if you need advice on the merits of buying, selling or holding a particular investment. You should note that the information in this report may be out of date and it is not represented or warranted to be accurate, timely or complete. This report or any portion thereof may not be reprinted, sold or redistributed without our written consent.

United States This report was prepared by DBS Vickers Securities (Thailand) Co Ltd (''DBSVTH''). DBSVUSA did not participate in its preparation. The research analyst(s) named on this report are not registered as research analysts with FINRA and are not associated persons of DBSVUSA. The research analyst(s) are not subject to FINRA Rule 2241 restrictions on analyst compensation, communications with a subject company, public appearances and trading securities held by a research analyst. This report is being distributed in the United States by DBSVUSA, which accepts responsibility for its contents. This report may only be distributed to Major U.S. Institutional Investors (as defined in SEC Rule 15a-6) and to such other institutional investors and qualified persons as DBSVUSA may authorize. Any U.S. person receiving this report who wishes to effect transactions in any securities referred to herein should contact DBSVUSA directly and not its affiliate.

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

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Company Guide Workpoint Entertainment PCL

DBS Regional Research Offices

HONG KONG MALAYSIA SINGAPORE DBS Vickers (Hong Kong) Ltd AllianceDBS Research Sdn Bhd DBS Bank Ltd Contact: Paul Yong Contact: Wong Ming Tek (128540 U) Contact: Janice Chua 18th Floor Man Yee Building 19th Floor, Menara Multi-Purpose, 12 Marina Boulevard, 68 Des Voeux Road Central Capital Square, Marina Bay Financial Centre Tower 3 Central, Hong Kong 8 Jalan Munshi Abdullah 50100 Singapore 018982 Tel: 65 6878 8888 Kuala Lumpur, Malaysia. Tel: 65 6878 8888 Fax: 65 65353 418 Tel.: 603 2604 3333 Fax: 65 65353 418 e-mail: [email protected] Fax: 603 2604 3921 e-mail: [email protected] Participant of the Stock Exchange of Hong Kong e-mail: [email protected] Company Regn. No. 196800306E

INDONESIA THAILAND PT DBS Vickers Sekuritas (Indonesia) DBS Vickers Securities (Thailand) Co Ltd Contact: Maynard Priajaya Arif Contact: Chanpen Sirithanarattanakul DBS Bank Tower 989 Siam Piwat Tower Building, Ciputra World 1, 32/F 9th, 14th-15th Floor Jl. Prof. Dr. Satrio Kav. 3-5 Rama 1 Road, Pathumwan, Jakarta 12940, Indonesia Bangkok Thailand 10330 Tel: 62 21 3003 4900 Tel. 66 2 857 7831 Fax: 6221 3003 4943 Fax: 66 2 658 1269 e-mail: [email protected] e-mail: [email protected] Company Regn. No 0105539127012 Securities and Exchange Commission, Thailand

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