Malaysia Media NEUTRAL (Unchanged)

Home , Astro (television), Astro AOD, Astro NJOI, Mega TV (Malaysia), MYTV Broadcasting, NTV7

September 27, 2015

The future is in High Definition Analysts Yin Shao Yang . TV digitalisation has kicked off and Malaysia must be ASO (603) 2297 8916

Malaysia ready by 2018 at latest. Viewers can expect HD channels, [email protected]

| more TV channels, interactive services and mobile TV. Jade Tam . Beneficiaries are telcos and related industries, IT companies (603) 2297 8687 specialising in TV, payment and courier service providers, [email protected]

game developers and new FTA TV channel operators. . MPR may be negatively impacted but we believe this is

already reflected in its share price. Maintain BUY on MPR. RESEARCH

Astro may be negatively impacted too but not as severely. What’s New This is our maiden report / special feature on TV digitalisation.

Puncak Semangat (PS; Not Listed) was awarded the concession, in SECTOR 2014, to build, operate and manage the necessary infrastructure for 15 years. Thereafter, PS transferred the concession to MYTV. MYTV has budgeted MYR4.5b to be expended over 15 years (MYR2.5b for opex and MYR2b for capex). The digital terrestrial TV broadcasting (DTTB) rollout commenced in Apr 2015 and Malaysia must be ASO (analogue switch off) ready by 2018 at latest. Viewers can expect HD channels, more TV channels, interactive services (e.g. news, VOD, games, T- commerce) and mobile TV. What’s Our View From the DTTB rollout, we foresee that telcos (Maxis, Digi, Axiata and TM), telco infrastructure fabricators (OCK, Instacom, Weida), IT companies specialising in TV (Digistar), payment service providers (ManagePay, GHL Systems, My E.G. Services), courier service providers (GDEX, Pos Malaysia), game developers (App Asia) and potential new FTA TV channel operators (Star) may benefit. Our estimates, calls and TPs for the newspaper companies (Star, MCIL) are unchanged. For MPR, we foresee that TV digitalisation will have a negative impact due to more competition. That said, we believe that there is little downside risk to its current share price as it is already trading at very close to NTA/share. Maintain earnings estimates, BUY call and MYR1.45 TP on MPR. For Astro, we foresee that TV digitalisation will have a slightly negative impact as the addressable market for it to expand may be cut to only ~500k subscribers. Even in that scenario, the downside risk to our scenario-based TP of MYR2.75 is only 5%. Maintain HOLD and MYR3.15 TP. For thematic investing, investors should focus on the potential beneficiaries from the DTTB rollout.

Stock Mkt cap Rating Price TP Upside P/E (x) P/B (x) Dividend yld (%) (USD'm) (LC) (LC) (%) 15E 16E 15E 16E 15E 16E Astro Malaysia 3,446.7 Hold 2.88 3.15 9 28.8 22.2 21.6 21.6 3.8 4.5 Star Media Group Bhd 411.2 Hold 2.42 2.30 (5) 15.7 15.0 1.6 1.6 6.2 6.6 Media Prima 303.7 Buy 1.19 1.45 22 13.2 12.3 0.8 0.8 6.7 6.7 Media Chinese Int'l 205.7 Buy 0.53 0.65 23 6.2 7.7 1.2 1.0 6.5 5.2

SEE PAGE 33 FOR IMPORTANT DISCLOSURES AND ANALYST CERTIFICATIONS PP16832/01/2013 (031128)

Malaysia Media Contents Page

Executive summary ...... 3

TV digitalisation explained ...... 5

Motivations for TV digitalisation are economical ...... 7

TV landscape will change dramatically The way forward with TV digitalisation ...... 8 Introduction to MYTV Broadcasting ...... 10 Salient details of MYTV business model ...... 12

The DTTB rollout in numbers Salient details of DTTB roadmap ...... 14 2017 ASO a tall order but supportive policies likely ...... 15 DTTB rollout will favour technological innovators ...... 16

Adex and Pay-TV landscape will also change Adex share likely to migrate to FTA TV ...... 17 Pay-TV net subscriber additions likely to slow ...... 20 Potential impact to Media Prima and Astro Malaysia ...... 21

Valuation and recommendation Little downside risk Media Prima share price, in our view ...... 24 Astro Malaysia share price likely to be stable, we opine ...... 26

Appendix 1 - Brief history of Malaysian TV ...... 27

Appendix 2- Current status of Malaysian TV...... 29

Appendix 3 – Glossary of technical terms ...... 31

September 27, 2015 2

Malaysia Media

Executive summary

The Malaysian Communications and Multimedia Commission (MCMC) has acknowledged that the high degree of frequency spectrum usage and inefficiency of analogue terrestrial broadcasting has limited the development of the Malaysian free-to-air (FTA) TV industry. For example, analogue broadcasting:- . only allows linear broadcasting, . does not support multi-channel sound, . is not compatible with mobile phones and other portable devices, . congests the frequency spectrums that could be utilised for other purposes, . requires high infrastructure costs that raises barriers of entry.

The MCMC conceived the National Digitalisation Master Plan in 2004. The plan was to migrate the terrestrial TV broadcasting platform from analogue to digital. Puncak Semangat (PS) was awarded the concession to build, operate and manage the infrastructure for 15 years in 2014 following a tender in 2012. Digital terrestrial TV broadcasting (DTTB):- . supports high-definition (HD) resolution TV channels and multi- channel sound, . frees up frequency spectrums for more TV channels, . supports interactive services (e.g. news, VOD, games, T-commerce), . is compatible with mobile phones and other portable devices, . frees up frequency spectrums for 4G services such as LTE broadband.

PS established MYTV Broadcasting (MYTV) to undertake the role of common integrated infrastructure provider (CIIP). Thereafter, PS transferred the concession to MYTV. MYTV commenced operations on Feb 2014 and has budgeted MYR4.5b to be expended over 15 years (MYR2.5b for opex and MYR2b for capex). The DTTB rollout commenced in Apr 2015 and Malaysia must be ASO (analogue switch off) ready by 2018 at latest. However, MYTV is targeting an earlier timeline for ASO by late 2016/early 2017. The threshold for ASO is 90% of the 7m Malaysian households adopting set-top-boxes (STB) or integrated digital tuner TVs (IDTV). The roadmap comprises:- (i) Phase 1 - Targets to cover 85% of the population, focusing on the East Coast of Peninsular Malaysia such as Kelantan, Terengganu and Pahang. Testing commenced in Apr 2015 with 20,000 set-top-boxes (STB) and the coverage is expected to be achieved by Oct 2015. (ii) Phase 2 – Targets to cover 98% of the population including the remaining states in West Coast of Peninsular Malaysia as well as East Malaysia. Testing commenced in Aug 2015 with 1,500 STBs and the coverage is expected to be achieved by Jul 2016.

September 27, 2015 3

Malaysia Media

From the DTTB rollout, we foresee the following potential beneficiaries:- . telcos (Maxis, Digi, Axiata and TM), . telco infrastructure fabricators (OCK, Instacom, Weida), . IT companies specialising in broadcasting (Digistar), . payment service providers (ManagePay, GHL Systems, My E.G. Services), . courier service providers (GDEX, Pos Malaysia), . game developers (App Asia) and . potential new FTA TV channel operators (Star).

With wider coverage and more FTA TV channels (seven to 40) as a result of the DTTB rollout, we believe that FTA TV share of adex can only grow at the expense of other mediums especially print. That said, print adex share loss may not necessarily translate into print adex contraction as long as the total adex pie grows, going forward. For Media Prima (MPR), we foresee more competition from up to 33 new FTA TV channels. That said, we believe that there is little downside risk to its current share price as the stock is already trading at very close to NTA/share. We maintain our earnings estimates, BUY call and MYR1.45 TP on MPR. For Astro Malaysia (Astro), we foresee that TV digitalisation will have a slightly negative impact as the addressable market for it to expand may be cut to only ~500k subscribers. Even in that scenario, the downside risk to our scenario-based TP of MYR2.75 is only 5%. We maintain our earnings estimates, HOLD call and MYR3.15 TP on Astro.

September 27, 2015 4

Malaysia Media

TV digitalisation explained

Digital versus analogue signals explained. Digitalisation is the conversion of information: text, sound or picture, into a single binary code. Digital signals exist as either 0s or 1s. These are called bits and the sequences of 0s and 1s are called bytes. Analogue signals are continuously variable, both in the number of possible values and points in the signal in a given period of time.

TV digitalisation explained. DTTB utilises digital compression or distribution. TV digitalisation is the digitalisation of audio and video by using analogue-to-digital conversion processes in which an analogue signal is converted, without altering its content, into a digital signal. Digital TV signals preserves information over longer distances and periods of time compared to analogue TV signals.

Digital TV migration, simulcast and ASO explained. Digital TV migration is the switching over of analogue to digital terrestrial broadcasting. ASO occurs when the former is ceased. Thereafter, viewers will need a STB or integrated digital tuner TV (IDTV) to receive digital TV signals. During digital TV migration but before ASO, FTA TV channels will offer simultaneous broadcast (simulcast) of analogue and digital TV signals.

September 27, 2015 5

Malaysia Media

Figure 1: Differences between digital and analogue terrestrial broadcasting Platform Analogue Digital

Transmission . Via aerial . Via STB or IDTV

Video and audio . SD resolution . HD resolution quality . Aspect ratio 4:3 . Aspect ratio 16:9 . Stereo sound . Multi-channel sound (e.g. Dolby 5.1)

Channels . 1 frequency channel carries . 1 frequency channel carries 1 SD TV channel only 1 HD TV channel with multi-channel sound and Note: 1 SD TV channel consumes data services OR; 2.65Mbps of bandwidth while 1 . 4 SD TV channels with HD TV channel consumes multi-channel sound and 7.85Mbps of bandwidth. data services

Mobile/portable . Not compatible . Compatible device compatible

Frequency . Transmitters use different . Transmitters use the same frequency spectrums to frequency spectrums to carry the same TV carry the same TV channel, channels, requiring more requiring less frequency frequency spectrums spectrums

(i) Better TV quality. Interferences in TV reception are decreased markedly. DTTB provides clearer pictures at lower signal levels compared to analogue. As video and audio signals are received simultaneously, there are no picture-sound synchronisation issues. New Zealand quantified the benefits of digital over analogue terrestrial broadcasting at NZD35m p.a.. (ii) Supports HDTV. DTTB supports HDTV by utilising MPEG standards. MPEG4 is the latest digital compression standard for the generic coding of moving pictures and associated audio and is a more efficient method of encoding compared to MPEG2, translating into 20-30% bandwidth savings. (iii) More channels AND services. DTTB compresses video signals so that they take up less frequency spectrum. This will enable not only more TV channels but also other interactive services (e.g. weather forecast, news, VOD, lite-pay, games, voting and T- commerce). (iv) Supports mobile/portable electronic device reception. TV digitalisation also allows mobile and portable electronic devices to gain wireless access to TV broadcasts as long as they are within coverage. Therefore, viewers will no longer need to be homebound to watch TV.

Source: Various, Maybank KE

September 27, 2015 6

Malaysia Media

Motivations for TV digitalisation are economical

Overriding the aforementioned benefits, the motivations for digital TV migration/ASO is largely driven by the objective of freeing up frequency spectrums in the 700-742MHz range. The FTA TV channels currently occupy the 470-742MHz frequencies. After ASO, they will occupy the 470- 698MHz frequencies. This means that the MCMC can assign and lease the 700-742MHz frequencies to telcos. These low band frequencies penetrate walls easily, making them ideal for 4G services such as LTE broadband.

Figure 2: Malaysian frequency spectrum

Source: MCMC

LTE broadband services currently occupy the 1.8GHz and 2.6GHz frequencies. With these frequencies, we understand that the coverage radius of every transmitter is one kilometer whereas with the 700- 742MHz frequencies, we understand that the coverage radius of every transmitter is two kilometers. With the frequency spectrums within the 700-742MHz range, the MCMC can assign and lease them to the telcos. Upon assignment of a frequency spectrum, telcos will pay MCMC:- (i) MYR55m assignment fees (first tranche of MYR10m and four tranches over four years of MYR11.3m each) OR (ii) MYR50m in assignment fees as one lump sum prior to the assignment of a frequency spectrum AND (iii) Maintenance fee of MYR840 p.a. per transmitter and receiver deployed with the 700-742MHz frequency spectrums. Judging from the above, the MCMC stands to raise at least MYR250m from assigning the five frequency spectrums within the 700-742MHz range. In the long run, the MCMC will also receive recurring frequency spectrum maintenance fees. New Zealand raised NZD254m from the assignment of these frequency spectrums. We also understand that MCMC is likely to assign frequency spectrums within the 700-742MHZ range for intelligence gathering, port navigation and airline navigation.

September 27, 2015 7

Malaysia Media

TV landscape will change dramatically

The way forward with TV digitalisation The MCMC has acknowledged that the high degree of frequency spectrum usage and inefficiency of analogue terrestrial broadcasting has limited the development of the Malaysian FTA TV industry. For example, analogue broadcasting:- (i) only allows linear broadcasting (i.e. scheduled TV programmes), (ii) does not support multi-channel sound (e.g. Dolby 5.1), (iii) is not compatible with mobile phones and other portable devices, (iv) congests the frequency spectrums that could be utilised for other purposes, (v) requires high infrastructure costs that raises barriers of entry.

The MCMC conceived the National Digitalisation Master Plan (NDP) in 2004. The plan was to migrate the terrestrial broadcasting platform of FTA TV channels from analogue to digital. DTTB trials commenced in 2005 and were completed in 2008. The Cabinet decided to implement the NDP as a private sector initiative and set the DTTB standard to DVB-T2 in 2009. PS was awarded the concession to build, operate and manage the infrastructure for 15 years in 2014 following a tender in 2012.

Figure 3: History of TV digitalisation Year Event 2004 National Digitalisation Master Plan conceived 2005 DTTB trials commence 2008 DTTB trials completed 2009 DTTB standards set at DBV-T2 2012 MCMC issued RFP for DTTB CIIP tender 2014 Puncak Semangat appointed DTTB CIIP Source: MCMC

Currently, the FTA TV channels aggregate both TV and advertisement content to create their respective channels. They are also individually responsible for the broadcast of their channels to the public. In comparison, the model adopted by the MCMC for DTTB adoption establishes a common integrated infrastructure provider (CIIP). PS established MYTV to undertake that role. As a monopoly, the CIIP functions as both the network service provider and network facility provider. (i) First, the FTA TV channels (content, advertisements, applications) lease access and bandwidth from MYTV to the multiplexer, (ii) Second, MYTV will manage, monitor and control the incoming signals at its Digital Multimedia Broadcasting Hub in Cyberjaya, (iii) MYTV will then transmit the digital TV signals via its network of transmitters, (iv) End-users will receive the digital TV signals via STBs or IDTVs.

September 27, 2015 8

Malaysia Media

Figure 4: Proposed DTTB model

Source: MYTV

September 27, 2015 9

Malaysia Media

Introduction to MYTV Broadcasting MYTV commenced operations on Feb 2014 and as a subsidiary of PS, holds the 15-year DTTB CIIP concession which commences from 16 Apr 2014. Although it will act as the DTTB CIIP, MYTV itself will not be allowed to operate a FTA TV channel. MYTV has budgeted MYR4.5b to be expended over 15 years (MYR2.5b for opex and MYR2b for capex) and targets to realise returns on investments of 7-8%. It targets to break-even in the seventh to eighth year.

Figure 5: Corporate structure of the Puncak Semangat group

Tan Sri Syed Mokhtar

Puncak Semangat

Altel Holdings

MYTV Broadcasting Altel Communications Net2One

Source: Puncak Semangat

The breakdown of the MYR2b capex budget is as below:- (i) ~MYR1b for 60 transmitters and 40 gap fillers. MYTV has awarded the contract to supply 60 transmitters to Huawei and Rohde & Schwartz. (ii) ~MYR400m for 2m STBs to be supplied to low income households. They are broadband enabled to provide interactive services (Hbb TV). (iii) ~MYR500m for construction of a Digital Multimedia Hub in Cyberjaya and eight call centres nationwide.

September 27, 2015 10

Malaysia Media

MYTV STB and IDTVs The digital compression standard for the MYTV STB is MPEG4. There are USB ports to insert (i) thumb drives that will serve as PVRs; and/or (ii) mobile dongles that will receive wireless broadband. The accompanying remote control unit has directional buttons and alphanumeric keypads.

Alternatively, viewers may opt to purchase IDTVs. We observe that only selected Sony IDTVs in Malaysia have digital tuners installed in them currently. For viewers with IDTVs, they do not require the MYTV STB. IDTVs also come with USB ports to insert thumb drives and mobile dongles.

Source: MYTV, Maybank KE

September 27, 2015 11

Malaysia Media

Salient details of MYTV business model MYTV’s major business model revolves around five major pillars, namely TV services, radio services, connected services, tablet commerce (T- commerce) as well as soft services. Furthermore, we understand that MYTV will monopolise the sale of its STBs for five years. We elaborate on the five major pillars below:- (i) TV services - MYTV plans to lease out channels on an annual basis or on an ad hoc basis. The annual rental fee for a 24-hour channel is expected to be MYR12m for SD and MYR25m for HD. Ad hoc packages will cost >MYR2,400/hour for a minimum six hour slot. Unlike analogue FTA TV channels, the digital ones will feature multi- lingual audio and subtitles and electronic programming guides (EPG). (ii) Radio services - Radio channels utilise a relatively small frequency spectrum compared to TV channels. Therefore, MYTV does not plan to limit the number of radio channels. The annual rental fee for a 24-hour channel is MYR0.5m for audio only and MYR3m for audio and video. MYTV plans to lease radio channels to subscription based radio broadcasters and support podcasting of radio channels via broadband. (iii) Connected services – The STBs that MYTV will deploy are broadband enabled, facilitating interactivity between broadcasters and viewers. This will allow broadcasters to offer viewers VOD where viewers can select content for a fee and view it any time they prefer. Other services such as catch-up TV, enhanced EPG and online games may also be offered. (iv) T-commerce and application services – With broadband, T- commerce is made possible as viewers can purchase goods and services shown on TV utilising their TV remote control. It is envisaged that online payment gateways, delivery tracking applications and more sophisticated placement of advertisements can be integrated into TV channels to yield a complete home shopping experience. We understand that MYTV will charge 2.5% of sales as commission. (v) Soft services – MYTV can also perform other non-core activities to generate revenue. For example, it is able to lease its playout centre for content producers. It is also able to obtain information on TV viewership patterns, viewership ratings and consumer behaviour through STBs connected to broadband. This information can assist advertisers in their advertising and promotional decisions.

September 27, 2015 12

Malaysia Media

Figure 6: MYTV 5 pillar services

Source: MYTV

September 27, 2015 13

Malaysia Media

The DTTB rollout in numbers

Salient details of DTTB roadmap The DTTB rollout commenced in Apr 2015 and Malaysia must be ASO ready by 2018 at latest, in tandem with its ASEAN neighbours. However, MYTV is targeting an earlier timeline for ASO by late 2016/early 2017. The threshold for ASO is 90% of the 7m Malaysian households adopting STBs or IDTVs. The roadmap comprises:- (i) Phase 1 - Targets to cover 85% of the population, focusing on the East Coast of Peninsular Malaysia such as Kelantan, Terengganu and Pahang. Testing commenced in Apr 2015 with 20,000 STBs and the coverage is expected to be achieved by Oct 2015. (ii) Phase 2 – Targets to cover 98% of the population including the remaining states in West Coast of Peninsular Malaysia as well as East Malaysia. Testing commenced in Aug 2015 with 1,500 STBs and the coverage is expected to be achieved by Jul 2016. Figure 7: DTTB roll-out phase 1 (85% coverage) Figure 8: DTTB roll-out phase 2 (98% coverage)

Source: MCMC Source: MCMC

40 FTA TV channels in the pipeline but… MYTV will have the capacity to launch 30 FTA TV channels by end-2016, another 30 by end-2017 and targets to reach a total of 80 by end of 2019. Of the 80 FTA TV channels, 70% will be in SD and 30% will be in HD. According to MYTV, they have received interest for 40 FTA TV channels (SD: 29, HD: 11). The incumbents (RTM, Media Prima and Al-Hijrah Media) have expressed interest in 13 channels. Content on the 40 FTA TV channels will be a combination of foreign, local and archived. That said, we understand that the final number of channels may be lower because the interested parties still have to apply for Content Applications Service Provider licenses from the MCMC. The latter is not obliged to approve all applications from the former. Those that are approved may not last for long, we opine. We estimate that they will need to incur MYR50m-MYR60m p.a. to operate a FTA TV channel (either SD or HD). To break even, they will need to command >5% net TV adex share and this is not easy. On their own, Metrovision and Ch. 9 survived for four and two years. ntv7 survived for seven years before being acquired by MPR in 2005 but by then, it was heavily in debt. Worldview Broadcasting Channel did not even last a year.

Source: MYTV, Maybank KE

September 27, 2015 14

Malaysia Media

2017 ASO a tall order but supportive policies likely With 2017 less than two years away, it seems like a tall order for Malaysia to be ASO ready by then. We understand that the fastest country to be ASO ready in the Asia Pacific region is New Zealand at six and a half years. We understand that the main reason why many countries missed their initial ASO deadlines is because most households are reluctant to purchase STBs or IDTVs to receive digital TV signals when they used to receive analogue signals for free. This meant that it took much longer to cross the 90% threshold for ASO.

Figure 9: Installation of a MYTV STB in Beserah, Kuantan

Source: MYTV

In Malaysia, there are ~7m households. MYTV will supply 2m low income households with STBs. This means ~5m households will have to buy STBs or IDTVs to receive digital TV signals going forward. That said, we understand that MYTV is mulling innovative policies such as the Customer Premise Equipment Industry Initiative (CPE) to hasten the adoption of STBs by the populace. We understand that, under CPE:- (i) government-linked companies that purchase STBs for their lower income staff may be entitled to claim the cost as tax rebates, (ii) private companies may be encouraged to purchase STBs for entire towns and be entitled to claim the cost as tax rebates.

Alternatively, we understand that not all of the remaining ~5m households may even need to purchase STBs or IDTVs. FTA TV channels are currently carried on Astro. If all new FTA TV channels are carried on Astro, only 0.5m households need to purchase STBs or IDTVs. Even if they do not, the 90% threshold for ASO will have been crossed. In fact, the Netherlands adopted this ‘overnight’ approach in 2006 as >80% of its households were already digital cable TV subscribers.

Figure 10: Households that may actually need to buy STBs or IDTVs (‘000) Number of households 7,061 (Astro DTH subscribers) (3,520) (Astro NJOI subscribers) (1,071) (MYTV STBs to low income households) (2,000) Balance 470 Source: Department of Statistics, Astro, Maybank KE

September 27, 2015 15

Malaysia Media

DTTB rollout will favour technological innovators Although there are 2m STBs to be supplied to low income households, we are unable to identify any listed Malaysian company that manufactures neither STBs nor IDTVs. Notwithstanding, we identify the following listed Malaysian companies that may benefit from the DTTB rollout. Figure 11: Potential beneficiaries of DTT Participant Listed beneficiary Reason Timeline

Government N/A The MCMC will raise >MYR250m from After ASO which is scheduled by 2018 at assigning the five frequency spectrums latest (MYTV target: late-2016/early- within the 700-742MHz range. The 2017). government will also receive recurring frequency spectrum maintenance fees of MYR840 p.a. per transmitter and receiver deployed with the 700-742MHz frequency spectrums.

Telcos Maxis With the 700-742MHz frequency spectrums, After ASO which is scheduled by 2018 at Digi the mobile telcos will be able to offer 4G latest (MYTV target: late-2016/early- Axiata services to previously unreachable 2017). customers at a lower cost.

TM TM has already signed a MYR1.1b contract to provide infrastructure, network facilities, The contract has already commenced. operations and maintenance services to MYTV for 15-years.

Maxis With Hbb TV, we foresee that demand for Digi broadband services will grow. They are As and when the broadband enabled STBs Axiata required for interactive services (e.g. are deployed. TM weather forecast, news, VOD, lite-pay, games, voting and T-commerce).

Telco infrastructure OCK MYTV has awarded the contract to supply 60 The contracts for 40 gap fillers are fabricators Instacom transmitters to Huawei and Rohde & expected to be awarded before year end. Weida Schwartz but has not awarded any contract to supply 40 gap fillers.

Local telco infrastructure fabricators may The contracts for 40 gap fillers are participate as sub-contractors. They can also expected to be awarded before year end. bid to supply 40 gap fillers. Transmitters and gap fillers are required to raise coverage to 98% of the population.

IT companies Digistar Broadcasting systems will have to be The DMBH is expected to be operational specialising in designed, supplied and installed at the by Oct 2015. broadcasting Digital Multimedia Broadcasting Hub (DMBH).

Payment service ManagePay With home shopping, payment gateways will As and when home shopping channels are providers GHL Systems need to be developed to effect transactions. introduced. My E.G. Services

Courier service GDEX With home shopping, courier service As and when home shopping channels are providers Pos Malaysia providers will be required to deliver goods. introduced.

Game developers App Asia With Hbb TV, we foresee that there will be As and when on-line and interactive demand for on-line and interactive games. games are introduced.

New FTA TV channel Star Media Group Star is interested in venturing into FTA TV By end-2016 operators via Li TV. That said, it opines that the annual rental fee of MYR12m for SD and MYR25m for HD is too high for it to create a viable FTA TV channel and would like them reduced.

Source: Maybank KE

September 27, 2015 16

Malaysia Media

Adex and Pay-TV landscape will also change

Adex share likely to migrate to FTA TV Malaysian love to watch TV. According to Nielsen Media Research, Malaysians watch an average of 3.7 hours of TV every day which is more than any other medium. Moreover, this trend is rising gradually. The same cannot be said for the other major mediums like newspapers (print) and radio. In terms of viewership, FTA TV channels are more popular than Pay-TV channels. MPR’s TV3 is far and away the most popular TV channel in Malaysia with a whopping 23% viewership share.

Figure 12: Average hours spent on medium per day Figure 13: Top 10 TV channels by viewership share in 2014

TV Radio Newspapers Internet 25% 23% 5 20% 3.9 4 3.7 3.7 3.6 3.7 15% 3.5 3.5 3.6 3.3 3 3.4 10% 8% 2.6 2.3 6% 5% 5% 2 2.4 2.4 2.5 4% 5% 3% 3% 3% 2%

1 0% 0.6 0.5 0.5 0.5

0.5

TV3 TV9 TV2 8TV TV1 Ria

NTV7 Ceria

0 Prima Sun-TV 2010 2011 2012 2013 2014 * Orange denotes FTA TV channel, grey denotes Pay TV channel Source: Nielsen Media Research Source: Nielsen Media Research

With more FTA TV channels as a result of the DTTB rollout, we believe that FTA TV share of adex can only grow at the expense of other mediums especially print. In fact, history proves this. Examining Figure 14, we make the following observations:- (i) When Metrovision was closed in 1999, FTA TV share of adex fell from 32% in 1998 to 30% in 2000. (ii) When Ch.9 was launched in 2003, FTA TV share of adex grew from 27% in 2002 to 29% in 2004. (iii) The gain in FTA TV’s share of adex in 2004 was aided by the return of Metrovision as 8TV then. (iv) That said, the gain was stalled in 2005 due to the closure of Ch. 9 then. FTA TV share of adex in 2005 was flat YoY at 29%. (v) When Ch. 9 returned as TV9 in 2006, FTA TV’s share of adex grew from 29% in 2005 to 33% in 2007. (vi) The exception was Al-Hijrah. When it was launched in 2010, FTA TV share of adex eased from 37% in 2009 to 36% in 2011.

September 27, 2015 17

Malaysia Media

Figure 14: Share of gross adex by medium Newspapers TV Radio Magazines Outdoor POS Cinema Video/Internet 100% 90% 80% 30% 27% 26% 32% 31% 28% 29% 29% 31% 33% 70% 35% 37% 38% 36% 38% 37% 37% 60% 50% 40% 63% 30% 58% 59% 61% 61% 63% 60% 61% 58% 56% 54% 51% 51% 53% 51% 53% 54% 20% 10% 0% 19981999200020012002200320042005200620072008200920102011201220132014

Source: Nielsen Media Research

Another reason why we believe adex share will likely migrate to FTA TV is because all FTA TV channels will have 98% coverage under the DTTB platform. Currently, we understand that only TV1 and TV2 have 98% coverage. We understand that even TV3 has only 80% coverage. Worse still, we understand that Al-Hijrah has only 29% coverage. With a higher percentage of the population covered under the DTTB platform, we believe that FTA TV share of adex can only grow. That said, the growth is contingent on the number and quality of new FTA TV channels.

New Zealand and Australian experience with TV digitalisation on adex In New Zealand, digital TV migration commenced in Sep 2012 and ASO occurred in Dec 2013. During that period, digital radio gained adex share at the expense of print. To our surprise, TV did not gain adex share at all. In fact, TV lost adex share in 2014.

Figure 15: New Zealand gross adex Gross adex (NZDm) 2010 2011 2012 2013 2014 TV 1,550.2 1,598.7 1,700.5 1,798.8 1,715.9 Newspapers 694.0 722.0 776.0 724.0 736.4 Radio 313.8 320.5 378.0 448.8 469.9 Cinema 15.9 15.0 18.6 19.1 21.5 Outdoor 119.7 155.4 163.8 174.6 198.8 Internet 64.3 72.0 73.1 80.3 96.3 Total 2,758.0 2,883.6 3,110.0 3,245.7 3,238.8 Adex share 2010 2011 2012 2013 2014 TV 56% 55% 55% 55% 53% Newspapers 25% 25% 25% 22% 23% Radio 11% 11% 12% 14% 15% Cinema 1% 1% 1% 1% 1% Outdoor 4% 5% 5% 5% 6% Internet 2% 2% 2% 2% 3% Total 100% 100% 100% 100% 100% Gross adex chg YoY 2010 2011 2012 2013 2014 TV N/A 3% 6% 6% -5% Newspapers N/A 4% 7% -7% 2% Radio N/A 2% 18% 19% 5% Cinema N/A -6% 24% 3% 12% Outdoor N/A 30% 5% 7% 14% Internet N/A 12% 1% 10% 20% Total N/A 5% 8% 4% 0% Source: Nielsen Media Research

September 27, 2015 18

Malaysia Media

In Australia, digital TV migration commenced in Jun 2010 and ASO occurred in Dec 2013. During that period, TV gained adex share at the expense of print. That said, TV adex in absolute terms was unchanged at AUD3.9b-AUD4b. In fact, total gross adex was in recession from 2010 to 2013. With print losing adex share, print adex in absolute terms contracted.

Figure 16: Australian gross adex Gross adex (AUDm) 2010 2011 2012 2013 2014 TV 3,928.6 3,978.7 3,939.9 3,939.0 4,083.4 Newspapers 4,239.2 3,977.0 3,441.4 3,316.0 3,524.8 Radio 672.8 687.9 696.7 707.2 738.2 Cinema 76.9 84.9 91.7 97.8 100.0 Outdoor 507.3 545.2 555.9 570.7 667.7 Internet 510.9 571.8 647.1 603.2 422.6 Total 9,935.7 9,845.5 9,372.7 9,233.8 9,536.6 Adex share 2010 2011 2012 2013 2014 TV 40% 40% 42% 43% 43% Newspapers 43% 40% 37% 36% 37% Radio 7% 7% 7% 8% 8% Cinema 1% 1% 1% 1% 1% Outdoor 5% 6% 6% 6% 7% Internet 5% 6% 7% 7% 4% Total 100% 100% 100% 100% 100% Gross adex chg YoY 2010 2011 2012 2013 2014 TV N/A 1% -1% 0% 4% Newspapers N/A -6% -13% -4% 6% Radio N/A 2% 1% 2% 4% Cinema N/A 10% 8% 7% 2% Outdoor N/A 7% 2% 3% 17% Internet N/A 12% 13% -7% -30% Total N/A -1% -5% -1% 3% Source: Nielsen Media Research

Source: Nielsen Media Research, Maybank KE

Drawing from the above, investors may be wary that print adex may contract going forward. That said, we note that total adex growth in the two countries above was weak with print adex share loss translating into print adex contractions. Despite growing TV adex share in Malaysia, print adex contracted only in 1998 (recession), 2006 (World Cup, fuel price and electricity tariff hikes), 2009 (recession), and 2012 (online competition). As long as the total adex pie grows going forward, we opine that print adex share loss may still translate into print adex growth.

Figure 17: Print adex versus real GDP change YoY

Print adex Real GDP growth 30.0%

20.0%

10.0%

0.0%

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 -10.0% 1998

-20.0%

-30.0%

Source: Nielsen Media Research, Bank Negara Malaysia

September 27, 2015 19

Malaysia Media

Pay-TV net subscriber additions likely to slow We observe that Pay-TV operators, namely Astro, have largely penetrated the higher and middle income households. Going forward, its growth will be driven by penetration into lower income households. Recall that 2m MYTV STBs will be supplied to low income households. If the content on the additional FTA TV channels are good, it may not compel these households to subscribe to Astro and/or upgrade to HD products (basic HD and Super Pack). Returning to Figure 10, the addressable market for Astro to expand may be cut to only ~500k subscribers.

New Zealand and Australian experience with TV digitalisation on Pay- TV In New Zealand, digital TV migration commenced in Sep 2012 and ASO occurred in Dec 2013. During that period, the number of FTA TV channels surged from six to 37 and subscriber growth at Sky New Zealand, the largest Pay-TV operator in New Zealand, slowed to only 1% p.a.

Sky NZ subscribers Sky NZ subscribers chg YoY 880,000 4.5% 860,000 4.0% 840,000 3.5% 820,000 3.0% 800,000 2.5% 780,000 2.0% 760,000 1.5% 740,000 720,000 1.0% 700,000 0.5% 680,000 0.0% FY6/08 FY6/09 FY6/10 FY6/11 FY6/12 FY6/13 FY6/14

In Australia, digital TV migration commenced in Jun 2010 and ASO occurred in Dec 2013. During that period, the number of FTA TV channels surged from five to 29. Subscriber growth at Foxtel, the largest Pay-TV operator in Australia, was still decent (FY6/14: +6% YoY) but it was driven by lowering prices or ARPUs. Please note that the pre-FY6/12 number of subscribers have been adjusted upwards to account for the acquisition of Austar.

Foxtel subscribers (m) Foxtel ARPU (AUD) 2.7 105

2.6 100

2.5 95

2.4 90 2.3 85 2.2

2.1 80

2.0 75 FY6/08 FY6/09 FY6/10 FY6/11 FY6/12 FY6/13 FY6/14

Source: Sky New Zealand, Foxtel, Screen Australia, Maybank KE

September 27, 2015 20

Malaysia Media

Potential impact to Media Prima and Astro Malaysia

. Media Prima – competition likely to intensify Before we address the risk that new FTA TV channels may pose to MPR, we examine the impact that the annual rental fee of MYR12m for SD channels, MYR25m for HD channels and MYR0.5m for radio channels may have on its earnings. MPR operates four FTA TV channels and three radio channels and therefore, stands to incur annual rental fees of MYR49.5m (assuming all FTA TV channels continue to be broadcast in SD). MPR incurred MYR42.2m in transmission and rental expenses in 2014.

Figure 18: Potential dilution to MPR EBITDA (MYRm) Annual rental fee Channels Total

A B C=AXB FTA TV channel 12.0 4 48.0 Radio 0.5 3 1.5 Total (C) 49.5 Existing transmission fees (D) 42.2 Additional expense (E=C-D) 7.3 Source: MPR, Maybank KE

At first glance, it appears that MPR’s EBITDA may be diluted by MYR7m. That said, MYTV represents that the annual rental fee is inclusive of maintenance services, spare parts and site rentals. Therefore, the EBITDA dilution may be narrower. In any case, MYR7m accounts for only 2% of MPR’s 2014 EBITDA. That said, the high annual rental fee for HD channels will preclude MPR from broadcasting its FTA TV channels in HD. We understand that MPR will not be compelled to broadcast in HD. The more difficult question is how much net TV adex share the new FTA TV channels may wrest from MPR. MPR commands ~80% of net TV adex share. Before Al-Hijrah was introduced in 2010, MPR commanded ~85% of net TV adex. The entry of Al-Hijrah caused MPR to yield 5ppts of net TV adex share (RTM: -1 ppt). To be fair, any new FTA TV channel will not only eat into MPR’s net adex share but that of RTM, Al-Hijrah and each other. Figure 19: Net TV adex share by operator Channel 2007 2008 2009 2010 2011 2012 2013 2014 TV3 55.2% 56.6% 54.5% 53.5% 54.3% 55.1% 54.7% 50.2% 8TV 13.4% 12.2% 11.3% 11.7% 12.5% 10.9% 11.2% 10.7% ntv7 13.3% 14.1% 11.1% 11.5% 11.7% 9.8% 9.9% 8.6% TV9 6.3% 6.6% 8.0% 7.8% 7.0% 8.0% 9.0% 9.6% TV1 3.3% 3.2% 3.1% 3.2% 3.4% 4.2% 3.4% 4.4% TV2 8.5% 7.2% 11.9% 12.3% 11.1% 12.0% 9.4% 10.0% Al-Hijrah 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 2.4% 6.5% Total 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% * Yellow denotes MPR group, grey denotes RTM group Source: MPR

We estimate that every 1ppt of net TV adex share that MPR yields will trim its core net profit by MYR7m or 7%. That said, there are mitigating factors: (i) MPR can earn revenue by introducing home shopping, (ii) MPR can license archived content to new FTA TV channels. It is already licensing archived content to HyppTV and ABNXcess. It also recently licensed Malay content to iflix. All in all, it is difficult to quantify the impact that TV digitalisation will have on MPR as it will

September 27, 2015 21

Malaysia Media likely lose net TV adex share but total TV adex pie itself will likely grow. . Astro Malaysia – addressable market may shrink As explained on page 20, we are concerned that the addressable market for Astro to expand may be cut to only ~500k subscribers. That said, we believe that Astro Pay-TV and NJOI subscriptions from the aforementioned ~500k households may surge before ASO. TV viewers who do not want to purchase the MYTV STBs may want to subscribe to Astro Pay-TV or NJOI to continue watching FTA and Pay-TV channels after ASO, albeit, there is a monthly subscription fee for Astro Pay-TV (multiple packages) and a one-time payment of MYR428 for Astro NJOI.

Figure 20: Astro Pay-TV and NJOI subscribers Figure 21: Astro Super Pack subscribers (‘000)

Pay-TV ('000) NJOI ('000) Superpack ('000) Superpack takeup rate

5,000 1,200 30.0%

28%

27%

26%

1,000 25.0%

26%

4,000 25%

920 920

24%

813 813

1,071

678 678

1,016

526 526

442 442

22%

382 382

314 314

264 264

800 20.0%

209 209

91 91

20%

132 132

14 14

3,000

600 15.0%

14%

2,000 13%

967 967

962 962

961 961

960 960

958 958

918 918

902 902

875 875

11%

400 836 10.0%

794 794

3,520

3,510

3,505

3,486

3,479

3,470

3,442

727 727

3,402

3,359

3,316

3,276

3,213

3,166

3,108

650

3,067

1,000

200 452 5.0%

404 404

348 348

- - 0.0%

4QFY… 1QFY… 2QFY… 3QFY… 4QFY… 1QFY… 2QFY… 3QFY… 4QFY… 1QFY… 2QFY… 3QFY… 4QFY… 1QFY… 2QFY…

1QFY13 2QFY13 3QFY13 4QFY13 1QFY14 2QFY14 3QFY14 4QFY14 1QFY15 2QFY15 3QFY15 4QFY15 1QFY16 2QFY16 4QFY12 Source: Astro Source: Astro

Figure 22: Astro HD subscribers (‘000) Figure 23: Astro Pay-TV ARPU (MYR)

HD ('000) HD takeup rate 100.0

97.1 98.0 98.5 99.0 99.0 99.1

2,500 60.0%

96.0

98.0

95.6

94.9

55%

94.2

54%

96.0

50.0%

51%

2,000 93.2

49%

47%

92.3

91.8

45% 94.0

42% 40.0%

90.3

39%

1,500 92.0

36%

89.0

34%

30.0%

90.0

30%

1,000

25% 88.0

1,939

1,917

1,915 20.0%

1,888

1,877

1,780

1,675

1,611

1,518

86.0

1,397

500 1,264

1,151

926 926

1,081 10.0%

772 772

84.0

- 0.0% 82.0

1QFY13 2QFY13 3QFY13 4QFY13 1QFY14 2QFY14 3QFY14 4QFY14 1QFY15 2QFY15 3QFY15 4QFY15 1QFY16 2QFY16 4QFY12 1QFY13 2QFY13 3QFY13 4QFY13 1QFY14 2QFY14 3QFY14 4QFY14 1QFY15 2QFY15 3QFY15 4QFY15 1QFY16 2QFY16 4QFY12 Source: Astro Source: Astro

We estimate that if Astro’s Pay-TV and NJOI subscribership growth slows from our current estimate of 4-6% p.a. to 1-1.5% p.a. (in tandem with household formation) after CY17 (when most of the 2m STBs would have been supplied to low income households), our DCF-based TP will be cut from MYR3.15 to MYR2.75. Curiously, our FY1/18 (CY17) net profit estimate will actually grow marginally due to less customer acquisition cost in the near term but our net profit estimates further into the future will be cut by up to 15%.

September 27, 2015 22

Malaysia Media

Figure 24: Astro assumptions and estimates FY1/16 FY1/17 FY1/18 Current (TP: 3.15) Pay-TV net adds (‘000) 52.7 150.1 150.9 NJOI net adds (‘000) 318.4 146.3 149.2 Pay-TV ARPU (MYR) 100.5 101.2 102.4 Revenue (MYRm) 5,496.6 5,762.8 6,164.6 Net profit (MYRm) 675.5 753.0 900.2

Scenario (TP: 2.75) Pay-TV net adds (‘000) 52.7 150.1 50.4 NJOI net adds (‘000) 318.4 146.3 18.8 Pay-TV ARPU (MYR) 100.5 101.2 102.3 Revenue (MYRm) 5,496.6 5,762.8 6,054.7 Net profit (MYRm) 675.5 753.0 921.2

Source: Maybank KE

Notwithstanding, Astro can also license archived content to new FTA TV channels. It can also focus its efforts on upgrading its subscription-free NJOI customers into subscription Pay-TV ones. We would rate the impact of TV digitalisation on Astro as ‘slightly’ negative as even in the worst case scenario (i.e. addressable market to expand cut to only ~500k households), the downside risk to our scenario-based TP of MYR2.75 is only 5%.

September 27, 2015 23

Malaysia Media

Valuation and recommendation

. Little downside to Media Prima’s share price, we opine In assessing the potential impact TV digitalisation may have on MPR and Astro’s share price, we look to New Zealand and Australia again. For MPR, we look to Australia as they have three listed FTA TV companies that went through TV digitalisation (New Zealand has no listed FTA TV companies). They are Seven West Media, Nine Entertainment Co., Ten Network Holdings. All three had their share prices fall dramatically from digital TV migration in Jun 2010 until ASO in Dec 2013. Currently, they are trading at 1.0x, 1.3x, 1.0x (average: 1.1x) FY6/16 P/BV respectively.

Figure 25: Seven West Media share price (AUD) Figure 26: Nine Entertainment Co. share price (AUD)

6.00 2.50

5.00 2.00 4.00 1.50 3.00 1.00 2.00

1.00 0.50

0.00 0.00 Jan-10 Jan-11 Jan-12 Jan-13 Jan-14 Jan-15 Dec-13 Mar-14 Jun-14 Sep-14 Dec-14 Mar-15 Jun-15 Source: Bloomberg Source: Bloomberg

Figure 27: Ten Network Holdings share price (AUD) Figure 28: Media Prima share price (MYR)

1.40 3.00

1.20 2.50 1.00 2.00 0.80 1.50 0.60 1.00 0.40

0.20 0.50

0.00 0.00 Jan-10 Jan-11 Jan-12 Jan-13 Jan-14 Jan-15 Jan-10 Jan-11 Jan-12 Jan-13 Jan-14 Jan-15 Source: Bloomberg Source: Bloomberg

For MPR, its share price has already fallen from a high of MYR3.15 to a low of MYR1.02 in late Aug 2015 before recovering to MYR1.19 currently. At current levels, MPR is trading at only 0.8x FY15 P/BV which is BELOW the Australian FTA TV companies which have ALREADY undergone TV digitalisation. Therefore, it suggests to us that MPR has not only reflected the currently weak adex sentiment but also the risk of more competition due to TV digitalisation. In fact, 0.8x FY15 P/BV is even below its Global Financial Crisis trough of 0.9x. Therefore, we opine that there is limited downside risk to MPR’s share price.

September 27, 2015 24

Malaysia Media

Figure 29: MPR rolling 12M forward P/BV (x)

5.0 4.5 4.0 3.5 +1 SD: 2.8x 3.0 2.5 Mean: 1.8x 2.0 1.5 -1 SD: 0.7x 1.0 0.5

Jul-08 Jul-13

Apr-07 Apr-12

Jan-06 Jan-11

Oct-09 Oct-14

Jun-06 Jun-11

Sep-07 Sep-12

Mar-10 Mar-15

Feb-08 Feb-13

Aug-10 Aug-15

Dec-08 Dec-13

Nov-06 Nov-11

May-09 May-14

Source: MPR, Maybank KE, Bloomberg

We were encouraged by its recent stellar 2Q15 results that withstood the negative impact that the 6% GST has had on adex sentiment. 2Q15 snapped six successive quarters of YoY earnings contraction. We like MPR as it is currently trading at only 0.8x FY15 P/BV coupled with the prospect of 6.7% dividend yield p.a. and cessation of YoY earnings contractions going forward. We maintain our way below consensus earnings estimates, MYR1.45 TP based on 1.0x FY15 P/BV and BUY call on MPR.

September 27, 2015 25

Malaysia Media

. Astro Malaysia’s share price likely to be stable, we opine In assessing the potential impact TV digitalisation may have on Astro’s share price, we look to Sky Network Television (Sky) which owns Sky New Zealand (Sky NZ). Unfortunately, Foxtel is not listed as it is a 50%:50% JV between NewsCorp and Telstra. Interestingly, Sky’s share price actually appreciated 15% from digital TV migration in Sep 2012 until ASO in Dec 2013. This somewhat jives with our earlier observation that TV digitalisation caused Sky NZ’s subscriber growth to slow but not contract.

Figure 30: Sky Network Television share price (NZD)

7.00

6.00

5.00

4.00

3.00

2.00

1.00

0.00 Jan-10 Jan-11 Jan-12 Jan-13 Jan-14 Jan-15

Source: Bloomberg

Utilising Sky as a reference point, we can expect Astro’s share price to remain at least stable going forward. As explained on page 23, we would rate the impact of TV digitalisation on Astro as ‘slightly’ negative as even in the worst case scenario (i.e. addressable market to expand cut to only ~500k households), the downside risk to our scenario-based TP of MYR2.75 is only 5%. Therefore, we maintain our earnings estimates, HOLD call and MYR3.15 DCF-based TP on Astro for now.

September 27, 2015 26

Malaysia Media

Appendix 1 - Brief history of Malaysian TV

The Malaysian TV industry commenced in 1963 with the launch of RTM1 (now known as TV1) which was broadcasted via analogue terrestrial and in black and white. RTM2 (now known as TV2) was subsequently launched in 1969. With the advancement of technology, both RTM1 and RTM2 were broadcast in colour from 1978 onwards. RTM1 and RTM2 are public FTA TV channels as they are largely funded by the government. Malaysia’s first commercial FTA TV channel, TV3, was launched in 1984.

Figure 31: History of the Malaysian TV industry until 2005

Source: Various

Malaysia’s first Pay-TV operator (via cable), Mega TV, was launched in 1995 but closed in 2001. The second commercial FTA TV channel, Metrovision, was launched in 1995. In 1998 and 2003, the third and fourth commercial FTA TV channels, ntv7 and Ch.9, were launched. That said, they were closed in 1999 and 2005 respectively. MPR acquired 80% of Metrovision in 2003 (20% acquired in 2007) and 100% of ntv7 and Ch.9 in 2005. Metrovision returned as 8TV in 2004 and Ch.9 returned as TV9 in 2006.

Figure 32: History of the Malaysian TV industry after 2005

Source: Various

September 27, 2015 27

Malaysia Media

Malaysia’s second Pay TV operator (via satellite DTH), Astro, was introduced in 1996 and is now the largest Pay TV operator in Malaysia. Other TV channels/products have been introduced since 2005:- . IPTV:- – mitv in 2005 – Fine TV in 2005 – eTV in 2010 – TIME-Astro IPTV in 2011 – Maxis-Astro IPTV in 2013 – HyppTV in 2013 . public FTA TV channel – Al-Hijrah in 2010 . commercial FTA TV channel - Worldview Broadcasting Channel in 2012 . non-subscription satellite DTH TV – Astro NJOI in 2012 . cable TV – ABNXcess in 2012. mitv closed in 2006 and we understand that Fine TV and eTV are now dormant. Worldview Broadcasting Channel did not even last a year, launching and shutting within 2012.

September 27, 2015 28

Malaysia Media

Appendix 2 - Current status of Malaysian TV

The MCMC is the regulatory body that regulates the Malaysian TV industry. It was formed pursuant to the enactment of the Malaysian Communications and Multimedia Commission Act 1998. The MCMC acts as (i) regulator and (ii) developer for the convergence of the communications and multimedia sectors which includes telecommunication, broadcasting, internet services, postal, courier services and digital certification by recommending policies.

Figure 33: Regulatory framework of the Malaysian TV industry

Source: MCMC

As of 31 Dec 2014, there are 7 FTA TV channels broadcasted on analogue terrestrial, 1 satellite DTH operator (Astro provides subscription – Pay-TV; and non-subscription services - NJOI), 3 IPTV operators (two are JVs with Astro) and 1 cable TV operator in operation. The current FTA TV channels are adopting the analogue terrestrial mode of broadcasting which requires them to broadcast via Telekom Malaysia-owned transmission towers. Their main sources of revenue are adex and government funding (for RTM1, RTM2 and Al-Hijrah only).

September 27, 2015 29

Malaysia Media

Figure 34: Overview of the Malaysian TV industry

Malaysian TV industry

FTA with one- FTA Pay-TV time fee

Analogue Cable TV terrestrial Satellite Satellite IPTV

Al-Hijrah RTM Media Prima Astro NJOI ABNXcess Media Astro DTH

TV1 TV3 Al-Hijrah TV2 NTV7 Maxis-Astro TIME-Astro TM-Hypp TV 8TV TV9

Source: Various

Astro, the satellite DTH operator broadcasts signals from MEASAT satellites orbiting the earth. Maxis-Astro IPTV and Hypp TV rely on the high speed broadband infrastructure owned by Telekom Malaysia for content transmission while TIME-Astro IPTV rely on the fibre optic network owned by TIME dotCom for content transmission. ABNxcess relies on the hybrid fibre coaxial network owned by Fibrecomm (50%:50% JV between Telekom Malaysia and Tenaga Nasional) for content transmission. Their main sources of revenue are subscription fees and to a lesser extent, adex.

September 27, 2015 30

Malaysia Media

Appendix 3 – Glossary of technical terms

Figure 35: Glossary of technical terms

Adex Advertising expenditure. Generally used to refer to the total advertising expenditure in the market as a whole. Sometimes used to refer to “advertising revenue” in a company

Cable This technology requires a direct cable connection to the location or home from an underground cable network. It was developed in response to growing preference for VOD.

DTH Direct-To -Home; this technology requires a satellite commonly flown in geostationary orbit and use frequencies in the Ku-band at high power which permits direct reception using a satellite dish.

DVB-T2 Digital Video Broadcasting – Second Generation Terrestrial; refers to a technical standard that specifies the framing structure, channel coding and modulation for DTTB.

Fibre broadband Broadband delivered via a fibre optic network, with practical current limits at up to 1,000 Mbps, but typically used to deliver broadband below 30 to 40 Mbps

Fibre optic A means of providing high speed data transmission using pulses of light to send signals through glass fibres

FTA Free-To -Air

HD High-Definition; commonly refers to TV or video at a resolution of either 720p, 1080i or 1080p

HD TV HD TV referring to either a TV capable of receiving and properly displaying an HD resolution TV signal, or referring to high definition television services in general

IPTV Internet protocol TV; refers to multi-channel digital TV distributed over a managed internet protocol network with a managed quality of service and dedicated bandwidth

Linear content Content that progresses without navigational control for the viewer (e.g. movies)

LTE Long-Term-Evolution; refers to a standard for wireless communication of high-speed broadband for mobile phones and data terminals

Ku-band Microwave frequency spectrum in the range of 10.7 GHz to 14.8 GHz, typically reserved and used for satellite based communications and broadcast services, such as satellite DTH TV services

Mobile This technology involves the reception of terrestrial TV signals with mobile and portable devices. 4G technologies such as LTE enables viewers to stream TV content online.

MPEG2 Digital compression standard for the generic coding of moving pictures and associated audio information. This is the earliest generation digital coding standard capable of supporting HD TV.

MPEG4 A later generation follow-on standard to MPEG2, MPEG4 is a more efficient method of encoding, resulting in 20.0% to 30.0% bandwidth savings versus an MPEG2 encoding of the same signal

Multiplexer Device that combines several analogue or digital TV signals and forwards the combined inputs into a single frequency. It can accommodate up to 13-15 SD TV channels or 4-6 HD channels.

OTT Over-The-Top; refers to the ability to deliver a service to an end user over someone else’s network or the open Internet, usually in reference to video services

PVR Personal Video Recorder; refers to a STB with a hard disk drive installed inside it, on which recordings of broadcast TV signals passing through it can be saved and viewed at a later time

SD Standard definition

Terrestrial The oldest and most commonly used technology for TV broadcasting. This technology involves transmitting analogue signals utilising the ultrahigh frequency (UHF) band.

Transponder(s) A device mounted on a satellite that receives, converts and retransmits radio frequency signals

TV Households Households with at least one TV set. In the Malaysian context, we only consider Malaysian citizens as part of TV households and exclude non-citizens.

VOD Video-On-Demand; a service where the viewer can choose a programme from a menu or list, and instantly begin watching it from the start. Source: Various

September 27, 2015 31

Malaysia Media

Research Offices

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

September 27, 2015 32

Malaysia Media

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.

September 27, 2015 33

Malaysia Media

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 27 September 2015, 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 27 September 2015, 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.

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.

September 27, 2015 34

Malaysia Media

 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 Andrew Lee Regional Head Sales Trading [email protected] [email protected] Tel: (852) 2268 0283 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

September 27, 2015 35