CFA Institute Research Challenge Hosted by CFA Society Bangladesh Institute of Business Administration Bangladesh Institute of Business Administration sector, Mobile telecommunication services industry Dhaka Stock Exchange Date: November 14, 2016 Current Price: BDT 279.90 Recommendation: BUY (17.2% of total return) Ticker – DSE: GP Market Capitalization: 376,543.886 (mn) Target Price: BDT 325

Highlights Valuation Summary Weight We initiate coverage on Grameenphone Ltd. (“GP” or “the company”) – the largest mobile telecommunication service provider in Bangladesh – with a Buy Fair Value from FCFF Method 334 0.50 167 Fair Value from Relative recommendation based on a 12-month target price of BDT 325, offering 17.2% Valuation 316 0.50 158 upside from its closing price of BDT 279.90 on November 14, 2016. Our recommendation is driven by the following catalysts and critical risk factors. Intrinsic Value 325 Investment catalysts  Effective corporate governance inspires confidence: GP is one of the most Key Financial Information transparent company of Bangladesh that has committed considerable resources In BDT Million 2,013 2,014 2,015 2016E 2017E 2018E to implement internationally accepted corporte standards to maintain effective Revenue 96,624 102,663 104,754 113,555 123,907 139,143 corporate governance. Revenue Growth 5% 6% 2% 8% 9% 12%  Healthy free cash flow ensures value for the capital providers: GP’s dividend Net Profit 14,702 19,803 19,707 23,780 27,945 32,858 policy is to payout minimum 50% of net profit and the company has consistently EBITDA 48,538 54,553 55,971 61,774 69,016 78,198 paid dividend well above the minimum level since its enlistment into DSE. EBITDA Margin 50% 53% 53% 54% 56% 56%  High stock liquidity mitigates market risks: GP’s high average daily trading Total Assets 135,221 130,673 132,450 147,132 146,628 151,768 volume would allow large investors to both buy the share at close to market price Shareholder's Equity 31,141 31,365 30,625 32,503 32,503 32,503 as well as execute stop-loss orders without creating big ripples in the market.  Robust data service growth to drive solid topline growth momentum: Dividend Declared on Par Value: GP Increased internet penetration, higher utility of internet, cheaper smartphones along with a favorable youth demographic dividend in the population will bring huge boom in data revenue in the coming years. 65%  Well poised to benefit from digital dividend: 98% of the country’s population 65% 50% 50% is under GP’s 3G network coverage, while the nearest competitor has around 50% 80% 140% coverage. This superior position would put GP in prime position to capitalize on 90% 90% 95% 85% 60% the impending digital dividend.

2011 2012 2013 2014 2015 2016  Accelereated revenue and controlled OPEX contributing to EBITDA

Interim Dividend Final Dividend growth: Due to efficient control measures to manage OPEX, GP’s EBITDA margin has continued to rise stably. Critical risk factors  Regulatory environment remains the largest bottleneck: Telecommunication is arguably the most regulated industry in Bangladesh. However, the regulatory environment continues to remain unpredictable and uncertain in the context of unresolved & long pending regulatory issues along with lack of government initiatives to improve the regulatory framework.  Territorial market share could erode after merger of Airtel & : While Airtel and Robi's merger isn't expected to have much impact on overall profitability and market share of GP, in certain areas of the country - particularly the south east region - GP's market share could be challenged.  Contingent liabilities remain a risk: GP is currently involved in a number of legal proceedings, including inquiries from, or discussions with, governmental authorities. Should any of the rulings go against the company, then GP could face a substantial expenditure. Business Description Grameenphone Ltd. is a public limited company incorporated in Bangladesh in 1996 under the Companies Act 1994 and has its registered address at GP House, Bashundhara, Baridhara, Dhaka. GP was initially registered as a private limited company and subsequently converted into a public limited company on 25 June 2007. During November 2009, GP listed its shares with both Dhaka and Stock Exchanges.

 Primary ownership belongs to one of the largest multinational company: The immediate parent of GP is Telenor Mobile Communications AS with 55.8% ownership and the ultimate parent is Telenor ASA; both the companies are incorporated in Norway. The second largest shareholder is Grameen Telecom, is a not-for-profit Company, with 34.2% ownershop of GP. The rest 10% share is owned by general public & other institutions.  Strong network coverage help maintain market leadership despite intense compitition: GP has the highest 2G and 3G network coverage among the mobile operators, backed by the largest spectrum capacity. This quality dimension has helped the company market leadership despite strong challenges from competitors. GP’s subscription base as well as overall market share have increased despite the initial inertia following manadatory biometric registration. We expect GP to maintain market leadership position as well as subscription base in the forecasted time period.  Voice continue to be the primary source of revenue despite slow growth, but Data revenue is growing fast: Despite 10% YoY growth in subscription base and increase in AMPU, GP’s voice revenue decreased by 3.9% in 2015. But voice revenue has rebounded following the implementation of compulsory biometric registration. GP has reported a healthy YoY voice revenue growth of 6.6%. However, the primary revenue growth driver at the moment is voice revenue. GP has reported a robust 72.1% YoY data revenue growth. We project voice revenue to remain dominant in GP’s revenue pie as mobile penetration continue to rise, particularly in the rural area. Data revenue growth will also remain strong in the coming years and become increasingly prominent in GP’s revenue pie.  Strategic commitment towards becoming customers’ favourite partner in digital life: In line with parent company Telenor’s global strategic shift, GP has expressed its ambition to become the foremost digital service provider in Bangladesh. GP has been investing heavily in digital services in the recent years. Its digital services portfolio includes a music streaming app GP Music, a lifestyle content app Wowbox, a video streaming service called Bioscope, three ecommerce and marketplace initiatives called kidorkar, GP shop and ekhanei.com, a digital wallet app called GPAY and a digital health service called Tonic under Telenor health. GP is focussed on adding more one-stop and simplified digital service solutions to its portfolio. GP CFO Dilip Pal outlined GP’s digital vision is to become an integral part of all facets of everyday life apart from "sleeping, eating and praying".  Significant investment in network infrastructure to support strategic transformation: On its transformation journey from a voice communications Company to a digital service provider, Grameenphone has made significant investment for 3G rollout and network capacity enhancement for catering higher volume of data and voice. GP has upgraded almost all of its 10,000 base stations to support 3G services, well ahead of its competitors. Consequently, GP is in prime position to capitalze on increased rural penetration, potential 4G rollout and broader macroeconomic developments from digital dividend. Industry Overview and Competitive Positioning The mobile telecommunications market in Bangladesh will continue to experience modest growth, as Bangladesh has a large population, with steadily increasing disposable income, low fixed- line and low-data penetration rates and consistent GDP growth above the average projected growth of other developing countries.

 GP is the dominant market leader with highest market share: As of August 2016, the total number of mobile subscribers in Bangladesh is 117.8 million. Industry subscriber addition reduced due to initial inertia from orientation of biometric verification. Among the six different telcos operating in Bangladesh, GP tops the market with 46% subscribers. is placed second (24.6%), Robi third (19.8%), followed by Airtel (6.7%), Teletalk (2.5%) and (0.12%). In terms of cumulative revenue (2010-15), GP is at the peak with BDT 539.2 Billion service revenues, whereas Robi has secured BDT 240.9 bn & Banglalink BDT 231.8 bn. GP drove 53.3% of the cumulative industry revenue since 2010, which is higher than Robi & Banglalink combined. We expect GP to continue its dominance as the market leader in the days to come. However, the merger of

Airtel and Robi will make Robi the 2nd largest operator ahead of Banglalink. Citycell is embroiled in legal battle with the regulatory authorities to prolong its existence. As for Teletalk, the state owned operator is expected to maintain its meager growh but unlikely to become a significant player in the market.  GP accounted for 94.4% of the top three players’ cumulative OCF since 2010: GP is the largest and most profitable player in the market. Since 2010, the cumulative EBITDA margin of GP is 52.3% which is far ahead of Robi (35%) & Banglalink (35.6%). In terms of liquidity, GP is far ahead of the other palyers in the market. The cumulative OCF for GP is BDT 212.2 billion whereas Robi & Banglalink has an OCF of -.6 billion and 13.3 billion respectively  Robi to join GP as the second mobile operator in stock market: Recent merger announcement between Robi Ltd. and Ltd. will create the second largest telecom operator in Bangladesh with the resources and capabilities to challenge GP to a greater extent. They are to join the stock market in the next year which will also have a major impact. 11.785 billion BDT is to be raised by their investors as capital before they join the stock market, which will enable them to undertake new projects that will develop their network coverage & strength.

 GP has the highest spectrum and the broadest 3G coverage: GP is leading the 3G frontier of Bangladesh. In terms of frequency, currently GP has 32 MHz (27 per cent), Banglalink 20 MHz (17 per cent), Robi 19.8 MHz (17 per cent), Airtel 20 MHz (17 per cent) and Teletalk has 25.2 MHz (22 per cent). As of September ’16, GP leads the 3G frontier with 7635 cell sites & 98% population under 3G coverage, whereas Banglalink & Robi has 3750 & 3300 sites respectively. They have recently undertaken large infrastructure development projects which is expected to strengthen their foothold to even a greater margin. But a challenge is yet to be faced as the recent merger announcement between Robi Axiata Ltd. and Airtel Bangladesh Ltd. will create the second largest telecom operator in Bangladesh with the largest spectrum capacity which may heighten the competitive dimension.  Network strenght is GP’s USP while others are fighting on different price points: While GP has branded themselves as the elite telco brand with a strong network strength & coverage, Banglalink has the advantage of lower cost. Robi, on the other hand, has a strong network in the remote and rural places and offers value for money services. Airtel offers low prices and attractive deals but lacks in network strength. The main competition GP is to face in the future is from the competitive strength of the soon-to- be merged Robi & Airtel Company.  GP ahead of competitors in the race towards digital transformation: The advent of young population, rising income and growth of MAC population, internet penetration and availability of cheap smartphones will make the digital space more attractive. According to the BCG report, MAC population is more open towards adopting technological tools for engaging in online transactions. GP has a well though strategy of engaging their customers in the digital platforms. Their active digital presence and internet based VAS are testament to that.  Industry wide stable APPM indicates end of the price war: : From the point of view of APPM, the industry has come to a saturated stage. The industry average voice APPM is around 50 paisa and all the different players’ voice APPM is also around the range of 45- 55 paisa.  Bangladesh Bank’s new MFS guideline could benefit the telcos: Mobile financial services (MFS) have become a popular means for sending and receiving money among account holders. MFS continued to experience phenomenal growth in 2015 with average daily transaction of around BDT 430 crore and 1.25 crore of active accounts. Mobile operators are playing an ‘enabler’ role to render the service, lending their distribution network and telecom services towards their banking partners. Bangladesh Bank is currently in the process of furnishing a new MFS guideline, where MNOs are pursuing for a market-oriented partnership model which would maximise customer benefits and welfare  Smarphone penetration boosting data boom: Internet usage has proliferated due to slump in price of smartphones. Entry of local players e.g. Symphony, Walton, Elite and Aamra and cheap Chinese alternatives have made smartphones affordable and accessible to the mass. Although feature phones still retain 80% of the market, smartphone market is growing at a significant pace. Sales of smartphones have almost tripled in the 2Q of 2015 compared to the same period in 2014.  Macroeconomic fundamental impacting Bangladesh’s transformation into digital economy: With steady and consistent growth (+5% GDP Growth) over last one decade, the economy has slowly graduated to the lower-middle income level rung crossing the threshold of USD 1,000 per capita. If the economy can maintain momentum, it will be easy to attain the middle-income threshold within a decade. Some fundamental factors will have major impacts on Bangladesh’s transformation into a digital economy. Bangladesh is the 8th largest country in the world (in terms of population) and 5th most densely populated country in the world. With average population of only 23.4 years and 70% of population below the age of 35 years, the country has potential of experiencing demographic dividend. Investment Summary We issue a BUY Recommendation on GP with a target price of BDT 328 using a Discounted Cash Flow Analysis, a Relative Multiples Valuation based EV/EBITDA. This valuation is supported by numerous merits, as outlined below: Merits  Robust data service growth to drive solid topline growth momentum: Grameenphone has 22.9 million active internet users with each customer using more than 589 MB of data on an average a month, which was less than 100 MB in 2013 just prior to launching 3G. Increased internet penetration, higher utility of internet, cheaper smartphones along with a favorable youth demographic dividend in the population will bring huge boom in data revenue in the coming years. We expect data revenue to be the most significant driver of GP’s revenue growth.  Well poised to benefit from digital dividend due to 3G networ superiority: GP has invested significantly in ints network infrastructure. 98% of the country’s population is under GP’s 3G network coverage, while the nearest competitor has around 50% coverage. This superior position would put GP in prime position to capitalize on the impending digital dividend. Participation in the upcoming specturm auction would allow GP to strenghten its position.  Accelereated revenue & controlled OPEX contributing to EBITDA growth: Due to efficient control measures to manage OPEX, GP’s EBITDA margin has continued to rise stably. Coupled with higher data revenue contribution, EBITDA margin for the companys is expected to hover above 50% in the coming years  Rural mobile penetration growth dominates next phase of subscriber growth: While the market is saturated in the urban areas, there are significant opportunities for growth in the rural areas. With its superior network infrastructure, GP is suitably poised to capture the rural market ahead of the competitors.

 MNP registration would further intensify competition, but GP would be the ultimate benificary: GP’s subscriber base may initially take some hit following initiation of MNP. However, experience from neighboring countires show, service quality ultimately trumps effect of aggressive price offering. As a result, GP would ultimately benefit from MNP by making inroads into subscriber base of competitors  More pricing space post Airtel-Robi merger: Even though Robi would become the second largest competitor following its merger with Airtel, it is unlinkely to have much affect on GP’s position. In fact, the merger would nullify the threat of Airtel’s price war and overall price competition would weaken following Airtel-Robi merger  Comprehensive digital servie portfolio: GP has the most comprehensive digital service portfolio, compared to its competitors. Coupled with innnovative internet packages, and its partnership with Facebook to get more people aquainted with internet usage, it is likely that GP would be the first teleco to complete its transforation to a digital service provider.  Lower sales, marketing, commission expense: GP has improved the efficiency of its sales and marketing activities. With more focus on the digital marketing landscape, marketing expense is expected to decrease in terms of revenue in the coming years. This will impact the company’s profit margin.  IMEI registration could open up new revenue stream: Should the government go ahead with its planned IMEI registration scheme, low end mobile device vendors would almost go out of busienss. In this environment, GP could use its international connections and relationships with mobile manufactures to introduce more cobranded smartphones in the market. Investment Risks

 Regulatory environment remains the largest bottleneck: Telecommunication is arguably the most regulated industry in Bangladesh. However, the regulatory environment continues to remain unpredictable and uncertain in the context of unresolved & long pending regulatory issues along with lack of government initiatives to improve the regulatory framework. Bangladesh mobile telecoms consumers suffer one of the highest levels of taxation. High taxation, instability and unpredictability in the taxation regime are considered to be major barriers for the expansion of the industry. In FY2015, Government has imposed 3% supplementary duty and further 1% surcharge on call charges. Imposition of additional taxes limiting the GP’s ability to reduce price as well as making them extra cautious for new investments. Any additional tax will impact the financial health of GP.  Territorial market share could erode after merger of Airtel & Robi: While Airtel and Robi's merger isn't expected to have much impact on overall profitability and market share of GP, in certain areas of the country - particularly the south east region - GP's market share could be challenged. Depending on Robi’s strategy, GP could get embroiled in a tarriff war to protect positions in these areas.  Contingent liabilities remain a risk: GP is currently involved in a number of legal proceedings, including inquiries from, or discussions with, governmental authorities. Claim for VAT based on C&AG audit, pending Interest on SIM Tax during 24 August 2006 to 27 March 2007, SIM tax on replacement SIMs are some of the contingencies GP has been dealing with. Besides, the company has been recently with another fine of 30 crore BDT, which the company is likely to contend in court too. Should any of the rulings go against the company, then GP could face a substantial expenditure.

Valuation

Valuation Recommended Price- 325 BDT The valuation methodologies utilized to derive GP’s target price includes an absolute valuation approach (5 year DCF Model) & a relative valuation approach (EV/EBIDTA Multiple). DCF Model This method involves estimating the firm’s value and adjusting it for net debt to arrive at equity value. The base case for this model was formulated using guidance from historical performance, industry outlook, an assessment of GP’s competitive positioning, and company guidance on revenue, and earnings growth. The DCF is most sensitive to the following factors, the derivations of which are explained below: Revenue Revenue of the GP is expected to experience a double digit growth (11%) on an average for the next 3-5 years. The driver of this unprecedented revenue growth will be growing contribution of data by capitalizing its strong network coverage in 3G to reap off the digital dividend coming as a result of favorable macro-economic factors. We have forecasted the total revenue separately for the each broad contributing item. Voice Revenue growth: The growth in voice revenue will be coming from the increasing number of subscriber coming under the umbrella of telecommunication industry due to rural penetration, where GP is expected to hold its market position as a result of its network advantage against its competitors. Though both the voice AMPU & voice APPM will slightly decrease the voice ARPU, the penetration growth in the industry will help GP achieving a CAGR of 2% in the voice revenue. DATA Revenue Growth: In near future DATA revenue will be the core revenue driver while voice revenue will soon be considered as the legacy revenue. Increasing handset penetration, promising macro-economic variables, positive outlook & active initiatives from the Govt. and favorable demographic structure led by a youth majority has already paved the way for a data boom in the futures years. GP with its strong network coverage in 3G is well ahead of its competitors. While making necessary assumption, a look at countries like India, Malaysia and Indonesia was taken to understand how the DATA revenue growth happened in those countries. As a result of price competition in the data segment in the three-player market, per megabyte revenue is expected to experience a decline trend, but the unparalleled growth in data penetration & AMBUPU is estimated to lead the DATA ARPU to 118 BDT by 2021. VAS: VAS includes a wide array of services including Mobile Financial Services, Digital Content, E-health, Video Call, etc. With the huge growth potential of Data Revenue and GP’s own focus to become the best partner of the customers in their digital life, there would be a substantial YOY growth in VAS Revenue. Handset & other revenue: Though revenue from handset & other segments is expected rise in number but they will consist of lesser amount in the overall revenue pie. WACC The cost of consists of three components. Firstly, the Risk Free Rate of Return was considered as the return on 10 year treasury bond as published in the Quarterly Report of Bangladesh Bank. Then country risk premium as added which includes all the macroeconomic variables that impacts cost of equity. This rate was taken from Aswath Damodaran’s open source data on country risk premiums. Finally, an additional 1% of company specific risk premium was added to reach the final Cost of equity of 13.9% The cost of debt was considered about 6% that came from the company’s interest expense over book value of debt. Capital Expenditure Rate In a capital-extensive industry like telecom, CapEx has greater importance in maintaining market position and revenue stream. Since GP has already invested in 3G network extensively for the past couple of years, a regular maintenance CapEx of 15% of the revenue is expected to be enough to keep GP on the front. According to company management’s outlook, GP can move on to 4G network with minimal capital expenditure since the company’s facilities are already operating under 3.9G which translates to the fact that not much CapEx will be needed in base station and network development when 4G takes over. Though has been estimated that a one-time extraordinary expenditure will be needed due to the 4G license and spectrum charges in the forecasted periods. Terminal Growth Terminal Growth Rate is based on the Data and VAS growth rate and expected inflation, since the overall industry will continue to grow even after the forecasted years.

Financial Analysis

Revenue Revenue of the GP is expected to experience a double digit growth (11%) on an average for the next 3-5 years. The driver of this unprecedented revenue growth will be growing contribution of data by capitalizing its strong network coverage in 3G to reap off the digital dividend coming as a result of favorable macro-economic factors. We have forecasted the total revenue separately for the each broad contributing item.

Voice Revenue is expected to grow at a moderate rate: The growth in voice revenue will be coming from the increasing number of subscriber coming under the umbrella of telecommunication industry due to rural penetration, where GP is expected to hold its market position as a result of its network advantage against its competitors. Though both the voice AMPU & voice APPM will slightly decrease the voice ARPU, the penetration growth in the industry will help GP achieving a CAGR of 2% in the voice revenue.

DATA Revenue Growth is expected to be in a high rate: In near future DATA revenue will be the core revenue driver while voice revenue will soon be considered as the legacy revenue. Increasing handset penetration, promising macro-economic variables, positive outlook & active initiatives from the Govt. and favorable demographic structure led by a youth majority has already paved the way for a data boom in the futures years. GP with its strong network coverage in 3G is well ahead of its competitors. While making necessary assumption, a look at countries like India, Malaysia and Indonesia was taken to understand how the DATA revenue growth happened in those countries. As a result of price competition in the data segment in the three-player market, per megabyte revenue is expected to experience a decline trend, but the unparalleled growth in data penetration & AMBUPU is estimated to lead the DATA ARPU to 118 BDT by 2021.

EBITDA margin is expected to remain close, although EBITDA level is expected to rise

Revenue is expected to rise at an average rate of 11.03% over the next five years. As the company is very alert on its operating costs, the EBITDA margin (which was 51.16% on average over the last 5 years) is expected to increase and reach almost 56% in the year 2021.

Capital Expenditures are not expected to rise

GP, from its inception, was very much interested on increasing its network coverage in the country and already has 96% people under its coverage. They are concerned about their 3G coverage and will spare no expense in order to strengthen it more. Therefore, CAPEX is expected to be almost similar over the next 5 years. The average CAPEX% of revenue was 15% over the last 5 years. A license purchase of 4G technology and additional CAPEX is expected in the year 2019, therefore the CAPEX is expected to be increased at that time.

Operating performance is very good

GP management is known for their management and operating efficiency and their OPEX has been one of the benchmarks for the industry. With an average of 35% OPEX over the last 5 quarters, GP is expected to keep the OPEX at that level over the years. The followed depreciation method is straight line, so the expense is not expected to increase there.

Profitability is expected to be high

Return on sales was on a slightly decreasing trend (from 21.21% in 2011 to 17.99% in 2015) due to some sudden increase in the fuel and energy cost increase in the operating expense segment, which is out of hand of the management. However, with the current global stability, the price fluctuation is expected to settle down. With the increased revenue growth, tight OPEX and reduction in tax expenses, the return on sales is expected to increase in the next years gradually increasing to 25%.

Asset turnover ratio is expected to increase as there will be less CAPEX in the future and revenue is expected to grow.

GP has a high leverage ratio in the last 3 years, as they have taken an international loan equivalent of US$345 million, repayable in 5 years at LIBOR +3.5%. The ratio will remain almost same, up to 2019, when for purchasing 4G license they will have to take an approximate 20 billion taka as loan, repayable in expectedly 5 years. Therefore, the leverage ratio will rise to approximately 5.5. The GP management has a principle of giving out dividends in a high level, and they have average dividend payout ratio of 118%. It is expected that with the high forecasted profitability, they will keep the dividend payout to at least 100%. Therefore, their retained earnings are not expected to increase

The return on equity, as a product of these three, is expected to highly increase. The rationale is that as the loan amount and revenue is expected to increase highly, and the equity amount is expected to be the same, the overall return will rise, and is expected to rise upto 150% over the next 5 years.

Corporate Governance

Investors consider GP to be reliable due to its strict adherence to international corporate governance standards. The board of directors have diverse skills, are proficient in their business sector, and adequately represents the shareholding companies. The management team has successfully capitalized opportunities in the recent years, expanded market base through incorporating constant innovation. GP’s new interim CEO Petter-B Furberg previous experience as senior vice president for Telenor Digital Businesses will help the company facilitate its digital transformation. The markets trust in GP is exemplified by Credit Rating Agency of Bangladesh (CRAB) assigning GP the highest rating, AAA. GP has a very good shareholding structure, which actually negates all threats of hostile takeover, as two of the investors have over 80% of the shareholdings. To protect the interests of the minority shareholders, Grameenphone Board of Directors have employed 2 independent directors (as per SEC rule). The trading shares in the market represents only 8-10% of the total shares. Grameenphone has one of the best levels of transparency in audit and disclosures. The audits are done by the top tier audit firms, and Grameenphone has won “Best Presented Annual Report” in 2010, and from 2012 to 2014 at a stretch. They also have the best credit ratings in the market (AAA for Long term, ST-1 for short term). Other things include:  Audit committee: GP’s Audit committee consists of 3 members of the board. they follow 3 distinct audit schemes: Finance, Technology and General Business Processes  Risk Mitigation Processes: The Company has well defined risk management manual and processes to mitigate enterprise level risks.  Compensation Management: GP use performance based compensation management for its top management.  Code of Ethics: In addition to the other legal guidelines, the GP Board has also adopted “Governance Guidelines for the Board” for ensuring better governance in the work and the administration of the Board.

Appendix

Valuation Summary

Valuation Summary Weight

Fair Value from FCFF Method 334 0.50 167

Fair Value from Relative Valuation 316 0.50 158 Intrinsic Value 325

FCFF

Free Cash Flow Valuation

Company Name Grameenphone Ltd. Valuation Date November 14, 2016 Market Price ( January 22, 2015) BDT 279.60 Number of Shares Outstanding 1350 Method Terminal Growth Rate Terminal Growth Rate 4% Free Cash Flow to Firm (FCFF) in BDT Millions 2017E 2019E 2020E EBIT 48,496 64,913 72,850 NOPAT (Net Operating Profit After Tax) 29,097.59 38,947.81 43,710.10 Depreciation and Amortization 20,520.3 22,056.5 23,973.8 CAPEX (18,586.1) (22,806.7) (25,390.9) Changes in working capital 3,834.6 5,316.6 6,219.9 Free Cash Flow to Firm (FCFF) 34,866.4 43,514.2 48,512.9 Cash Flow Timing 1.0 3.0 4.0 Present Value of Cash Flow 30,875.2 30,216.0 29,830.8 DCF Valuation EV 480,469 Net Debt (Net Cash) 29,419 Equity Value 451,050 Fair Value 334

No. of Shares Issued (millions) 1350

WACC Calculations

Cost of Capital 10 Year Treasury Bond (Risk Free Rate) 7.29% Plus: Equity Risk Premium 6.6% Cost of Equity 13.9% Cost of Debt 6%

Market Value of Equity (Million) 377,544 Book Value of Debt (Million) 36,978 Total Capital (Million) 414,521.5 Weight of Equity 91.1% Weight of Debt 8.9% Tax Rate 40.0% Discount Rate 12.93%

Risk Components Premium/Discount Country Risk Premium 5.6% Adjustments: Company Specific Risk 1.0%

Equity Risk Premium 6.6%

Relative Valuation

Listed Peer Company Comparison (Valuation Ratio) 2015 (in millions) Market Value of Equity 341626 Peer Company EV/EBITDA

Debt (Net) 29,994 Maxis (malaysia) 12.1 EV 311632 Airtel (India) 6.3 Ebitda Margin 53.40% Dialogue (Sri Lanka) 6.0 Ebitda 55939 Digi (Malaysia) 13.6 Median 9.2 EV/EBITDA EV/EBITDA APPROACH EBITDA Weight EV (x) Grameenphone LTD 5.6 Historical (Company Specific) 61,774.19 5.57 0.50 172070.24 Peer Company 61,774.19 9.20 0.50 284161.25

Relative EV 456,231

Net Debt (Net Cash) 29,419

Equity Value 426,813 Fair Value 316

Forecasted and Historical Income Statement

Years 2014 2015 2016E 2017E 2018E 2019E 2020E 2021E

113,55 123,90 139,14 152,04 169,27 191,67 Total Revenue 102,663 104,754 5 7 3 5 3 8

Operating Expense Cost of material and traffic charges (9,592) (10,694)

Traffic charges (5,268) (5,706) (5,678) (6,195) (6,957) (7,602) (8,464) (9,584)

Cost of materials and services (4,324) (4,988) (5,110) (5,576) (6,261) (6,842) (7,617) (8,626)

Salaries and personnel cost (6,455) (6,373) (7,381) (7,434) (8,349) (8,362) (9,310) (9,584)

Operation and maintenance (5,071) (4,419) (5,110) (5,204) (5,844) (6,386) (7,109) (8,050) Sales, marketing & commissions Sales, marketing & representation (3,264) (3,036) (2,839) (2,478) (2,783) (3,041) (3,385) (3,834)

Advertisement & promotional (2,468) (1,934) (2,271) (2,478) (2,783) (3,041) (3,385) (3,834)

Commissions (7,468) (7,943) (8,517) (9,293) (9,740) (10,643) (11,849) (13,417) Sim Tax Subsidy Revenue sharing, spectrum charges and licence fees (8,082) (8,256) (8,517) (9,293) (10,436) (10,643) (11,849) (13,417) Other operating (expenses)/income, net (5,710) (6,128) (6,359) (6,939) (7,792) (8,514) (9,479) (10,734)

EBITDA 54,553 55,971 61,774 69,016 78,198 86,969 96,824 110,598

Depreciation of property, plant and equipment (13,748) (14,907) (15,507) (15,957) (15,677) (15,953) (17,751) (19,812)

Amortisation of intangible assets (3,908) (4,100) (4,475) (4,563) (5,330) (6,104) (6,223) (6,353)

EBIT 41,792 48,496 57,191 64,913 72,850 84,434

Finance (expense)/income, net 2,182 1,926 (2,159) (1,921) (2,428) (2,609) (2,550) (2,476)

Earnings Before Tax 39,633 46,575 54,764 62,304 70,301 81,958

Income tax expenses for the year (15,052) (15,215) 15,853 18,630 21,905 24,921 28,120 32,783

Profit After Tax 19,803 19,707 23,780 27,945 32,858 37,382 42,180 49,175 34.9% 37.6% 39.4% 41.0% 41.5% 42.8%

Earning Per Share (EPS) 14.67 14.59 17.61 20.70 24.33 27.68 31.24 36.42 Weighted average number of shares (millions) 1350 1350 1350 1350 1350 1350 1350 1350

Voice Assumptions 2014 2015 2016 2017 2018 2019 2020 2021

Voice Revenue (millions) 76,582 73,559 78,029.27 77,102.29 80,171.30 80,116.95 80,696.88 81,595.29

Voice ARPU (monthly) 129 114 115 110 109 103 99 96 AMPU (Average Minutes Per User) 238 241 255.46 252.91 256.70 249.00 244.02 240.36 YOY % Change in AMPU -0.8% 1.3% 6% -1% 1.5% -3% -2.0% -1.5% APPM (Average Price Per Minute in Taka) 0.54 0.47 0.45 0.44 0.42 0.41 0.41 0.40 - YOY % Change in APPM -9.33% 12.73% -5% -3% -3% -2% -2% -2%

Data Assumptions 2014 2015 2016 2017 2018 2019 2020 2021 Data Revenue (millions) 5,133 8,380 11,678.5 20,706.9 30,021.7 40,369.5 53,763.9 71,072.4 Data Subscriber % of Total Sub 21% 28% 43% 51% 56% 61% 66% 71% % change in Data subscribers base 11% 7% 15% 8.00% 5% 5% 5% 5% Data Subscriber (in millions) 10.82 15.87 24.34 30.58 35.36 40.43 45.84 51.63

AMBPU(monthly)- in megabytes 126 360 630 882 1147 1491 1938 2519 YOY % Change in AMBPU 40.0% 185.7% 75.0% 40.0% 30.0% 30.0% 30.0% 30.0%

Price per Megabyte 0.31 0.12 0.10 0.08 0.07 0.07 0.06 0.05 YOY % Change in Price per Megabyte -44.9% -61.1% -20% -15% -10% -10% -10% -10% DATA ARPU 39 45 61.61 73.31 85.78 100.36 117.42 137.38

For the Year 2014-2021

VAS Revenue 6,109.83 7,846.65 8631 9494 10444 11488 12637 13901 VAS Revenue YOY Change 21.1% 28.4% 10% 10% 10% 10% 10% 10%

Interconnection 10,640. 10,623. Revenue 04 83 11,128.44 12,142.91 13,496.86 14,596.28 16,080.90 18,209.44 As a % of Total Revenue 10.36% 10.14% 9.80% 9.80% 9.70% 9.60% 9.50% 9.50%

Customer Equipment 2,095.3 2,050.3 Revenue 8 2 2,044.00 2,230.33 2,504.57 2,736.80 3,046.91 3,450.21 As a % of Total Revenue 2.04% 1.96% 1.80% 1.80% 1.80% 1.80% 1.80% 1.80%

2,103.4 2,294.4 Other Revenue 0 6 2,044.00 2,230.33 2,504.57 2,736.80 3,046.91 3,450.21 As a % of Total Revenue 2.05% 2.19% 1.80% 1.80% 1.80% 1.80% 1.80% 1.80%

Cost Components

AS % of Sales 2016 2017 2018 2019 2020 2021

Traffic charges 5% 5% 5% 5% 5% 5%

Cost of materials and services 4.5% 4.5% 4.5% 4.5% 4.5% 4.5%

Salaries and personnel cost 6.5% 6.0% 6.00% 5.50% 5.50% 5.00%

Operation and maintenance 4.50% 4.20% 4.20% 4.20% 4.20% 4.20%

Sales, marketing & commissions

Sales, marketing & representation 2.50% 2.00% 2.00% 2.00% 2.00% 2.00%

Advertisement & promotional 2% 2% 2% 2% 2% 2%

Commissions 7.50% 7.50% 7.00% 7.00% 7.00% 7.00%

Sim Tax Subsidy

Revenue sharing, spectrum charges and licence fees 7.50% 7.50% 7.50% 7.00% 7.00% 7.00%

Other operating (expenses)/income, net 5.60% 5.60% 5.60% 5.60% 5.60% 5.60%

Balance Sheet (Historical and Forecasted)

Balance Sheet 2014 2015 2016E 2017E 2018E 2019E 2020E 2021E 106,70 Property Plant & Equipment 70,307 74,205 79,004 78,140 75,516 87,942 97,342 5 Intangible Assets 44,774 41,046 42,655 38,751 54,165 48,869 43,533 38,152

Investments in Associates 736 733 759 848 859 896 696 711

Other non-current assets 4,561 3844 3844 3844 3844 3844 3844 32 126,23 121,46 134,28 141,50 145,57 149,59 Total Non Current Assets 115,808 120,522 8 7 3 2 8 7

Inventory 477 520 584 639 711 805 387 435 Trade & other receivables 9,718 7,339 7,801 8,720 9,833 10,440 12,130 13,427

Short term investments - - Cash & cash equivalents 4,760 4,153 12,616 15,921 7,068 17,064 13,435 15,427

Deferred cost of connection revenue - -

Advance, deposits & prepayments - - Total Current Assets 14,865 11,928 20,894 25,161 17,485 28,142 26,276 29,659 147,13 146,62 151,76 169,64 171,85 179,25 Total Assets 130,673 132,450 2 8 8 5 4 6 Share Capital 13,503 13,503 13,503 13,503 13,503 13,503 13,503 13,503 Share Premium 7,840 7,840 7,840 7,840 7,840 7,840 7,840 7,840

Capital reserve 14 14 14 14 14 14 14 14 Retained Earnings 10,005 9,266 9,266 9,266 9,266 9,266 9,266 9,266

Deposit from shareholders 1,880 1,880 1,880 1,880 1,880 1,880 2 2 Shareholders' funds 31,365 30,625 32,503 32,503 32,503 32,503 32,503 32,503 Total Equity 31,365 30,625 32,503 32,503 32,503 32,503 32,503 32,503 Non Current Liabilities Loans and borrowings, net of current 24,004 18,964 19052 13617 8182 18746 12000 8000 portion Defferred Tax Liabilities 7,993 7,911 9,084 9,913 11,131 12,164 13,542 15,334

Reirement Benefit Obligations 1,202 1,202 1,202 1,202 1,202 1,202 - - Finance Lease Obligation 5,278 5,207 5,057 4,907 4,705 4,593 4,463 4,333

Other non-current liabilities 2,117 2,123 2229 2341 2458 2581 2710 631 Total Non Current Liabilities 37,906 34,199 36,519 31,867 27,561 39,162 33,787 31,579 Trade & other payables 35,085 36,653 36,338 39,650 44,526 48,654 54,167 57,504 Current Tax & VAT payable 19,629 19,786 21,576 23,542 26,437 28,888 32,162 36,419 Other current liabilities 2,541 1,211 2,271 2,478 2,783 3,041 3,385 3,834 Short Term bank loan/loans and 4,148 9,976 17,926 16,587 17,958 17,396 15,849 17,417 borrowings 105,56 115,17 Total Current Liabilities 61,402 67,625 78,110 82,257 91,703 97,979 4 3 147,13 146,62 151,76 169,64 171,85 179,25 Total Owners Equity & Liabilities 130,673 132,450 2 8 8 4 4 6

Dividend Paid

For the Years 2014-2021

Net Profit (Year End) 19,803 19,707 23,780 27,945 32,858 37,382 42,180 49,175 Dividend Payout Ratio 109% 96% 100% 100% 100% 100% 100% 100% Dividend Paid (millions) 21,586 18,919 23,780 27,945 32,858 37,382 42,180 49,175

Retained Earnings 2016 2017 2018 2019 2020 2021 Opening Balance 9266 9266 9266 9266 9266 9266

Net Profit 23,780 27,945 32,858 37,382 42,180 49,175

Dividend Paid (23,780) (27,945) (32,858) (37,382) (42,180) (49,175) Closing Balance 9266 9266 9266 9266 9266 9266

Fixed Asset Schedule

2015 2016E 2017E 2018E 2019 2020E 2021E Tangible Assets: Depreciable Assets CWIP

Opening Balance 52,714 56,390 57,525 59,692 55,470 61,711 68,659 Addition (Regular capex) 18,139 16,445 17,927 11,259 21,999 24,504 27,780

Depreciation (14,463) (15,507) (15,957) (15,677) (15,953) (17,751) (19,812) Depreciation Adjustment 49 197 197 196 195 195 194

Closing Balance 56,390 57,525 59,692 55,470 61,711 68,659 76,821

CWIP 17,292 17,186 14,593 16,629 23,251 26,142 27,780

FIbre Optic Cable 4,731 4,293 3,855 3,417 2,980 2,542 2,104

Total Tangible Assets 78,413 79,004 78,140 75,516 87,942 97,342 106,705 Intangible Assets:

Opening Balance 46,541 42,655 38,751 54,165 48,869 43,533

Addition 508 588 659 20,744 808 887 972

Amortization (4,475) (4,563) (5,330) (6,104) (6,223) (6,353)

Closing Balance 42,655 38,751 54,165 48,869 43,533 38,152

Depreciation and Amortization (19,982) (20,520) (21,007) (22,056) (23,974) (26,164)

Total Capex 17,033 18,586 32,003 22,807 25,391 28,752

Depreciation Rate (General) 15% 24% 24% 24% 24% 24% 24% Dep rate (Half Year) 8% 12% 12% 12% 12% 12% 12%

CAPEX 17,033 18,586 32,003 22,807 25,391 28,752

Working Capital Assumptions

1. Inventory Turnover as ratio of sales: 0.42% of Sales

2. Sales to AR turnover: 15 .

3. Current Tax & VAT payable: 19% of Sales (15% vat, and 3.45% Supplementary Duty)

4. Other current liabilities : 2% of Sales

5. Short term loan and borrowings: 11% of Sales in 2016, 9% of Sales in 2017,2018 and 7% of Sales from 2019 onwards.

IFC Loan Amortization

Periods per Years Year 5 2 Forecasted Date Period PMT Interest Principle Balance Interest Rate LIBOR

-

Apr-16 2,702,730 21,774,538

Oct-16 1 3,240,033 522,589 2,717,444 19,057,094 4.80% 1.30%

Apr-17 2 3,174,814 457,370 2,717,444 16,339,650 4.80% 1.30%

Oct-17 3 3,109,596 392,152 2,717,444 13,622,206 4.80% 1.30%

Apr-18 4 3,044,377 326,933 2,717,444 10,904,762 4.80% 1.30%

Oct-18 5 2,979,158 261,714 2,717,444 8,187,318 4.80% 1.30%

Apr-19 6 2,913,940 196,496 2,717,444 5,469,874 4.80% 1.30%

Oct-19 7 2,848,721 131,277 2,717,444 2,752,430 4.80% 1.30%

Apr-20 8 2,818,488 66,058 2,752,430 - 4.80% 1.30%

Recommendation Interpretation

Buy: Stock Expected to give a return of 0-10% or above in one year horizon Hold: Current Stock Price reasonably reflects fundamental value Sell: Stock price is expected to fall up to 10% or even more. Corporate Governance: The Standard & Poor corporate governance rating methodology was used to evaluate the corporate governance of GP. The methodology ideally contains two broad criteria, the company governance score (CGS), and the Country Governance Review. For our analysis, we’ve did the CGS. Before going to the CGS scoring, let us take a brief overview of the corporate governance practices set in place by GP.

Ownership Structure:

3.06% Shareholding in 2015 2.81% 4.13%

34.20% 55.80%

Telenor Mobile Communications AS Grameen Telecom Ltd. Other Institutes Foreign Institutions General Public

The Majority shareholders, Telenor Mobile Communications and Grameen Telecom have held their shares since the beginning of the acquisition, and only the public shares have been broadly exchanged in the capital market. It is notable that the directors of the board do not have shares with the company, and are consistent from 2015 to 2012. In 2011, the some of the board members had a number of shares, but the company have reduced it in the recent years Shareholder Rights and Shareholder Relations GP arranges regular AGMs in the month of April following an operating year from January-December. GP sends the annual report to the shareholders by courier. In the AGM, the shareholders can exercise the right to vote, have the option to proxy. The shareholders are provided quarterly operational and financial data on a regular basis in the company website and other public domain. And also, as a proof of their financial gains, GP issues regular interim and final dividend to the investors. Transparency, Disclosure and Audit: 1. Disclosure of operational data

GP incorporates high level of disclosure in their financial statements. Their annual reports have separate section and detail info for investors and analysts about current market scenario, share price, dividend information and other related info. Along with that, the reports include detail financial, risk and contingencies data, and a separate section for compliance to corporate governance. 2. Accounting standards

GP follows strict maintenance to the IFRS/BFRS model. Also, they have incorporated an Oracle ERP system for their internal control. Quarterly audited financial statements are disclosed in the public domain. Formal reporting to the Telenor are also done quarterly. Statutory Audits are done by the top tier accounting firms such as Rahman Rahman Huq, ACNABIN over the last five years, who are renowned for their transparency, strict auditing practices and affiliation with big global audit firms. The Grameenphone annual reports have won “Best Presented Annual Report-2010, 2011, 2013 and 2014 by ICAB, ICSB and ICMAB. They also won “Best presented annual report-2014” by South Asian Federation of Accountants (SAFA) and ICSB and ICMAB. They also have the top credit ratings. These are AAA (long term), ST-1 (short term). 3. Internal Audit structure

Audit committee was established in 2008 and has 3 members in the board. The chairman of the committee is an independent director. GP has an internal audit charter available, which is approved by the board. the audit charter has three distinct audit streams: Finance, Technology and General Business processes. A risk-based annual audit plan is also in place, which takes into consideration the strategic imperatives and major risks surrounding GP, while considering pervasive audit needs. Certified by Chartered Secretaries firm Al-Muqtadir Associates. Board Structure and Effectiveness: 10 directors, 5 from Telenor, 3 from Grameen Telecom and 2 independent directors, which is in line with the regulations of independent directors by the SEC. the non-independent directors represent the current shareholding scenario in the board, that is 5:3 as in line with their shareholdings (55%: 35%), so the executive decisions are duly weighted to portray the intentions of the investors. The board of directors is split on four committees, each one having at least 1 non-independent director and 1 independent director/management team member. The Standard & Poor corporate governance rating methodology was used to evaluate the corporate governance of GP. The methodology ideally contains two broad criteria, the company governance score (CGS), and the Country Governance Review. For our analysis, we’ve did the CGS, as shown below.

Our rating scale was from 1 to 10, which expresses the following compliance notions  1-2: very low level of compliance  3-4: low to moderate level of compliance  5: Moderate level of compliance  6-7: Moderate to high level of compliance  8-10: Very high level of Compliance

Corporate Governance Scoring Criteria Scores Average score per criteria

1. Ownership Structure and External Influences

a. Transparency of Ownership 9

b. Concentration and Influence of Ownership and External 8 Stakeholders 8.5

2. Shareholder Rights and Stakeholder Relations

a. Shareholder Meeting and Voting Procedures 7

b. Ownership Rights and Takeover Defenses 9

c. Stakeholder Relations 8

8

3. Transparency, Disclosure and Audit

a. Content of Public Disclosure 8

b. Timing of, and Access to, Public Disclosure 8

c. The Audit Process 8

8

4. Board Structure and Effectiveness

a. Board Structure and Independence 8

b. Role and effectiveness of the Board 8

c. Senior Executive and Director Compensation 7

7.67

Final Score (Done by calculating the average) 8.0

The Final Corporate Governance score according to the S&P corporate governance rating is 8, which signifies that GP has a very high level of compliance. For more clarification of the rating process, visit http://www.eneiset.gr/files/info/CRITERIA%20PUBLIC%2020January04.pdf Assumptions

Market Share Movement GP will not lose market share because it already has strong subscriber base. There will be more penetration from rural areas. In 2018 and onwards there would be three big market players with a quite matured market

Out of the old customers GP lost 0.69 crore users due to biometric. http://www.thedailystar.net/backpage/carriers-start-blocking-25-crore-connections-1232434

Price Per Megabyte Assumptions

When there will be 4G then there will be increased volume of data usage and low price per megabyte.

AMBPU Growth Rate

2016: We have already seen 63% growth till Q3. Hence we put 70%

2017: 3G penetration (98%) along with the increasing habit of using Data would lead to higher growth

2019: Due to 4G roll out the usage of DATA would increase further.

Interconnection Revenues:

After biometric registration effect GP has held most of its old users and its on net voice usage has comparatively increased.

4G Assumptions http://www.thedailystar.net/roll-out-of-4g-unlikely-this-year-62623 http://www.thefinancialexpress-bd.com/2016/01/02/8876

Bangladesh Bank Quarterly Report https://www.bb.org.bd/pub/quaterly/bbquarterly/apr-junr2016/overview.pdf

Page 8

Description 2011 2012 2013 2014 2015 2016E 2017E 2018E 2019E 2020E 2021E

Liquidity Ratios

Current Ratio 0.64 0.22 0.22 0.24 0.18 0.25 0.28 0.16 0.21 0.21 0.23 Net Sales to Net Fixed Assets 1.17 0.89 0.82 0.89 0.87 0.89 1.00 1.01 1.02 1.12 1.25

Net Sales to Total Assets 0.82 0.78 0.71 0.79 0.79 0.77 0.85 0.92 0.89 0.98 1.06

Net Sales to Net Worth 2.29 2.59 3.10 3.27 3.42 3.49 3.81 4.28 4.68 5.21 5.90 Profitability Ratios (Dupont) Return on Sales 23.48 24.28 (Profitability) 21.21% 19.04% 15.22% 19.29% 17.99% 20.90% 22.44% % % 24.47% 25.31% Multiply: Asset Turnover 91.58 89.48 106.43 (Efficiency) 82.01% 78.12% 71.46% 78.57% 79.09% 77.27% 84.62% % % 98.15% % 21.51 21.72 Return on Assets 17.40% 14.88% 10.87% 15.15% 14.22% 16.15% 18.99% % % 24.02% 26.94% Multiply: Financial Leverage (Leverage) 2.79 3.32 4.34 4.17 4.32 4.52 4.51 4.67 5.23 5.31 5.54 100.53 113.57 127.46 149.26 Return on Equity 48.54% 49.37% 47.21% 63.14% 61.52% 73.03% 85.56% % % % %

Coverage Ratios

Times Interest Earned (34.01) 9.19 11.79 14.99 17.60 19.32 25.13 23.43 24.58 28.08 33.66 Total Liabilities to Net Worth 1.79 2.32 3.34 3.17 3.32 1.12 0.97 0.85 1.21 1.06 1.00

Debt To Equity 0.13 0.16 0.55 0.95 0.80 1.14 0.93 0.80 1.11 0.86 0.78

Dupont Analysis

Other Ratios 53.98 54.78 EBITDA Margin 51.48% 51.15% 49.87% 49.36% 53.95% 49.84% 52.06% % % 54.90% 56.08% Retained Earning to Net Income 82% 68% 67% 51% 49% 100% 100% 100% 100% 100% 100%

Interest Coverage Ratio (34.01) 9.19 11.79 14.99 17.60 19.32 25.13 23.43 24.58 28.08 33.66

EPS 13.99 12.96 10.89 14.67 14.59 17.58 20.60 24.20 27.34 30.68 35.93

Dividend per share 20.50 14.00 14.00 16.00 14.00 17.58 20.60 24.20 27.34 30.68 35.93

Dividend Payout Ratio 1.47 1.08 1.29 1.09 0.96 1.00 1.00 1.00 1.00 1.00 1.00

Price 151.60 153.10 182.50 344.80 238.80 ------

Dividend Yield 13.52% 9.14% 7.67% 4.64% 5.86% ------

P/E Ratio 10.84 11.81 16.76 23.51 16.36 ------

Disclosures: Ownership and material conflicts of interest: The author(s), or a member of their household, of this report does not hold a financial interest in the securities of this company. The author(s), or a member of their household, of this report does not know of the existence of any conflicts of interest that might bias the content or publication of this report. Receipt of compensation: Compensation of the author(s) of this report is not based on investment banking revenue. Position as a officer or director: The author(s), or a member of their household, does not serve as an officer, director or advisory board member of the subject company. Market making: The author(s) does not act as a market maker in the subject company’s securities. Disclaimer: The information set forth herein has been obtained or derived from sources generally available to the public and believed by the author(s) to be reliable, but the author(s) does not make any representation or warranty, express or implied, as to its accuracy or completeness. The information is not intended to be used as the basis of any investment decisions by any person or entity. This information does not constitute investment advice, nor is it an offer or a solicitation of an offer to buy or sell any security. This report should not be considered to be a recommendation by any individual affiliated with CFA Society Bangladesh, CFA Institute or the CFA Institute Research Challenge with regard to this company’s stock.

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