Company Guide Workpoint Entertainment PCL

Version 3 | Bloomberg: WORK TB | Reuters: WORK.BK Refer to important disclosures at the end of this report

DBS Group Research . Equity 6 Feb 2017

HOLD (Downgrade from BUY) New rating record in Jan 17 Last Traded Price ( 3 Feb 2017): Bt51.75 (SET : 1,582.95) rd Price Target 12-mth: Bt52.00 (0% upside) (Prev Bt45.00) 3 ranking in Thailand’s Digital TV space. WORK has been Potential Catalyst: New hit programmes and improving margins continuously climbing the rating ladder and is now ranked third Where we differ: In line in Thailand’s Digital TV space. Its rating increased to 1.49% in Analyst Jan 17 from 1.33% in 2016 and 0.85% in 2015. WORK is well Nantika WIANGPHOEM +66 26577836 [email protected] recognised by Thai viewers with regard to its creativity and Chanpen SIRITHANARATTANAKUL +662 657 7824 content quality. Many of its programmes, especially variety [email protected] shows, game shows and quiz shows, are very popular. The key What’s New concept of WORK’s programmes revolves around knowledge,  The effects from mourning period will turn 4Q16F wit, fun and entertainment. With its strong position, we believe earnings to loss of Bt85m; cut FY16F earnings by that WORK will continue to gain higher ratings and maintain its 34% to reflect the weak results third position. More diversified audience base. WORK’s programmes are  FY17F outlook and long-term outlook is expected designed to serve all types of audiences, regardless of age, to recover stronger than expected; lift earnings gender and geography. As a result, it seems to have more forecast by 9% in FY17F and 10% in FY18F potential in expanding its audience base vs other channels that  Downgrade from BUY to HOLD with higher TP of focus on only one specific group. Hence, it is likely to fall in the Bt52, based on DCF valuation radar of ad agencies that are interested in purchasing ad time

for reaching out to a generic audience group. Doubling earnings in 2017. We expect WORK’s earnings to Price Relative continuously record new highs in the coming years. The robust Bt Relative Index growth will be driven by i) higher average ad rates, from

63.3 206 c.Bt36,000 per minute in 2015 to Bt50,000 in 2016 and 186 53.3 166 Bt60,000 in 2017 (other top two leaders’ average ad rates range 146 43.3 126 33.3 106 from c.Bt70,000-85,000 per minute), thanks to the increase in 86 23.3 66 WORK’s rating, and ii) better economies of scale, as c.90% of its 13.3 46 Feb-13 Feb-14 Feb-15 Feb-16 Feb-17 costs are fixed (with low variable costs) – which will boost its Workpoint Entertainment PCL (LHS) Relative SET (RHS) margin from 42.5% in 2015 to 45.1% in 2016 and 45.4% in 2017. As a result, we believe WORK will deliver solid earnings Forecasts and Valuation FY Dec (Bt m) 2015A 2016F 2017F 2018F growth of 13% in FY16 and 157% in FY17.

Revenue 2,388 2,253 3,590 3,993 EBITDA 849 886 1,247 1,368 Valuation: Pre-tax Profit 210 235 602 726 Our new target price of Bt52 is based on DCF valuation with a Net Profit 164 185 475 573 WACC of 8.8%. Net Pft (Pre Ex.) 164 185 475 573 Net Pft Gth (Pre-ex) (%) nm 12.8 157.1 20.7 EPS (Bt) 0.39 0.44 1.11 1.32 Key Risks to Our View: EPS Pre Ex. (Bt) 0.39 0.44 1.11 1.32 Intense competition, changes in audience preferences, market- EPS Gth Pre Ex (%) nm 11 154 19 share expansion of other types of media and reliance on key Diluted EPS (Bt) 0.39 0.44 1.11 1.32 personnel. Net DPS (Bt) 0.34 0.31 0.78 0.93 BV Per Share (Bt) 6.77 7.23 7.94 8.70 PE (X) 131.2 118.4 46.6 39.1 At A Glance PE Pre Ex. (X) 131.2 118.4 46.6 39.1 Issued Capital (m shrs) 417 P/Cash Flow (X) 36.6 32.7 22.7 20.3 Mkt. Cap (Btm/US$m) 21,593 / 616 EV/EBITDA (X) 24.7 24.4 17.4 16.0 Major Shareholders (%) Net Div Yield (%) 0.7 0.6 1.5 1.8 Phanya Nirunkul (%) 25.91 P/Book Value (X) 7.6 7.2 6.5 5.9 Prapas Cholsaranon (%) 25.91 Net Debt/Equity (X) CASH CASH CASH CASH Nortrust Nominees Ltd. (%) 10.74 ROAE (%) 7.3 6.3 14.7 16.0 Free Float (%) 33.75 Earnings Rev (%): (34) 9 10 3m Avg. Daily Val (US$m) 1.8 Consensus EPS (Bt): 0.48 1.15 1.65 Other Broker Recs: B: 13 S: 0 H: 1 ICB Industry : Consumer Services / Media Source of all data on this page: Company, DBS Vickers, Bloomberg Finance L.P

ASIAN INSIGHTS VICKERS SECURITIES ed: CK / sa:CS, PY Company Guide

Workpoint Entertainment PCL

WHAT’S NEW Brighter FY17 ahead but stretched valuation is a concern

4Q16F is expected to be soft due to mourning period: WORK is programmes will enable WORK to achieve sustainable growth expected to register a core loss of Bt85m in 4Q16F, taking full- in terms of average ratings and ad rates. WORK targets an year net profit to Bt186m (+13% y-o-y). The 4Q16F core loss average ad rate of Bt62,000 in 2017 vs Bt55,000 previously was due to the suspension of normal TV programmes and (we conservatively assume an ad rate of Bt60,000 in our model advertisements during the one-month mourning period (starting due to the risk of high competition). from 13 October 16). Revenue fell significantly, while fixed costs Revised forecast to reflect the effect of the mourning period in stayed constant in 4Q16F. However, the effect of the mourning FY16 and better-than-expected outlook from FY17 onwards. period was only temporary and its operating environment We cut our FY16 earnings forecast by 34% for the weak returned to normal in Jan 17. performance in 4Q16 arising from the suspension of normal

TV programmes and advertisements during the mourning FY17 performance will be better than expected: After period. On the other hand, we bump up our earnings forecast launching several new popular programmes (such as “The in FY17 and FY18 by 9% and 10%, respectively, for higher- Mask Singer”, “Let me in Thailand 2”, Main Thing Kham than-expected average ad rates. Dek”, Mai Mot Ni”, etc.) in 2H16, WORK’s rating has increased continuously (and reached 1.49% in Jan 17). Its hit Downgrade from BUY to HOLD, with higher TP of Bt52. Our programmes have garnered high ratings, ranging from 5-8%, new TP of Bt52 is based on DCF valuation with a WACC of which allowed WORK to sell advertisements outside the 8.8%. As the market has already priced in the strong growth package rates – thus resulting in higher average ad rates. outlook, we downgrade our call from BUY to HOLD. In 2017, WORK plans to launch new big format programmes, including: “We kids Thailand”, “My Little TV”, “Let me in Thailand 3”, “The Mask Singer 2” and “Bao Young Blood Season 2”. The continuous efforts in launching new hit

Quarterly / Interim Income Statement (Btm) FY Dec (Btm) 4Q15 3Q16 4Q16F Chg y-o-y Chg q-o-q 2015 2016F Chg y-o-y Sales 641 776 128 -80% -83% 2,388 2,253 -6% Cost of Goods Sold (345) (430) (80) -77% -81% (1,372) (1,238) -10% Gross Profit 296 347 48 -84% -86% 1,015 1,015 0% SGA Expenses (251) (201) (167) -33% -17% (754) (746) -1% Operating profit 45 146 (119) -363% -182% 261 269 3% Other Income/expense 44 25 13 -71% -48% 66 63 -6% Share profit / loss 11 1 15 35% 986% 14 14 -6% EBIT 101 172 (92) -191% -153% 342 345 1% Interest expense (72) (28) (20) -73% -30% (132) (110) -17% Pretax profit 29 143 (111) -489% -178% 210 235 12% Income Tax (10) (27) 18 -283% -166% (45) (50) 10% Minority interest (2) (8) 8 -468% -192% (1) (1) 13% Norm. Profit 17 108 (85) -605% -179% 164 186 13% Extra items 0 0 0 n.a. n.a. 0 0 n.a. Net Profit 17 108 (85) -605% -179% 164 186 13% EPS (Bt) 0.04 0.26 (0) -624% -182% 0.39 0.44 11% Nomalised Profit 17 108 (85) -605% -179% 164 186 13% Nomalised EPS (Bt) 0.04 0.26 (0) -624% -182% 0.39 0.44 11%

Gross Margin 46.2% 44.6% 37.3% 42.5% 45.1% SGA/ Sales 39.2% 25.9% 130.3% 31.6% 33.1% Operating Margin 7.1% 18.8% -93.0% 11.0% 11.9% Net Margin 2.6% 13.9% -66.4% 6.9% 8.2% Normalised Net Margin 2.6% 13.9% -66.4% 6.9% 8.2%

Source of all data: Company, DBS Vickers

ASIAN INSIGHTS VICKERS SECURITIES Page 2 Company Guide Workpoint Entertainment PCL

Top 3 highest-rating channels CRITICAL DATA POINTS TO WATCH % 5.0 Earnings Drivers: 4.5 4.0 Higher average ad rates from rising rating and increase in hit 3.5 2.9 programmes. Normally, WORK sells ad time to agencies under 3.0 2.5 2.13 packages whose rates will be fixed under agreements. However, 2.0 1.14 1.121.2 1.5 0.97 0.96 0.9 0.73 0.75 0.83 0.88 in 4Q15, WORK has some hit programmes whose ad time was 1.0 0.45 0.51 1.42 0.24 0.34 0.5 sold separately from the standard packages and based on the 0.0

Cost Per Rating Point (CPRP). The ad rates for these

Jul-14 Jul-15 Jul-16

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May-15 May-16 programmes (the prime time) ranged from 150,000-200,000 May-14 WORK per minute. In 1Q16, there were two additional programmes that were sold separately – “Mic Thongkam Kids” and “” – due to their solid ratings. We expect more programmes such as “SuperMuM” and “Teng-Nong Witthaya” 2015 sales breakdown to be sold separately in the future. Given WORK’s rating Concerts uptrend, we forecast its average ad rate per minute to increase 7% from c.Bt36,000 in 2015 to Bt50,000 in 2016 and Bt60,000 in 2017 (other top two leaders’ average ad rates range from Movies 1% c.Bt70,000-85,000 per minute). Publication Television 0% programs New programmes coming online continuously. To gain higher 87% Events ratings and audience share, it plans to launch new programmes. 5% The new programmes lined up for 2017 are i) “We kids Animation Thailand (singing show), ii) “My Little TV” (variety show), iii) 0% “Let me in Thailand 3” (reality show), iv) “The Mask Singer 2” (singing show) and v) “Bao Young Blood Season 2” (singing show). Each programme is expected to gain high ratings (above 4%). Hence, its continuous efforts of launching new Gross margins (%) programmes to gain higher ratings will allow the company to 50.0 45.8 charge higher ad rates on a sustainable basis. As a result, the 45.1 45.4 45.0 42.5 company’s revenue will continue growing. 40.0 38.2 Benefits from better economies of scale. c.90% of costs come 35.0 from fixed costs and are relatively revenue independent, 30.2 including amortisation expenses for its digital TV licence, 30.0 broadcast rental fees, production costs and amortisation 25.0 expenses for purchased contents. Thus, we believe that by growing its top-line, WORK will enjoy the benefits of better 20.0 2013A 2014A 2015A 2016F 2017F 2018F economies of scale moving forward. We expect its gross margin Gross margin (%) to improve from 42.5% in 2015 to 45.1% in 2016 and 45.4% in 2017.

Revenue and net margins Expansion into social media. As more media companies foray Bt m 4,500 55.0 into the social networks due to their popularity (in view of the 3,993 4,000 increase in the number of users), WORK has also expanded its 3,590 45.0 on-air channels via social networks such as Youtube, Facebook 3,500 3,000 35.0 and Line TV to take advantage of opportunities that might arise 2,388 2,500 2,167 2,253 in the social network arena. However, due to the limited target 2,053 25.0 2,000 12.9 14.0 groups for social networks, most agencies still prefer to use TV 1,500 10.9 15.0 6.7 8.0 as the first choice to promote their services and products. 1,000 -0.8 5.0 Hence, the company believes that social media will grow in 500 Thailand, though not rapidly in the next few years. 0 -5.0 2013A 2014A 2015A 2016F 2017F 2018F Sales Net margin (%)

Source: Company, DBS Vickers

ASIAN INSIGHTS VICKERS SECURITIES Page 3 Company Guide

Workpoint Entertainment PCL

Leverage & Asset Turnover (x) Balance Sheet: 0.8 0.60 Despite a net cash balance of Bt326m as of end-Dec 16, WORK 0.8 has Digital TV Licence Payable of Bt1,515.6m which could be 0.50 0.7 considered a major liability. The Digital TV Licence Payable will 0.40 0.7 be repaid by c.Bt200-370m per annum until 2020. The 0.6 0.30 company expects to use internal cashflow from operations and 0.6 cash proceeds from its warrants issue (20,861,107 shares at an 0.20 0.5 exercise price of Bt38.1) to support its day-to-day operations, 0.10 0.5 capex, and repayments of Digital TV License Payable and bank 0.00 0.4 loans. WORK paid a dividend of Bt0.34 per share in 2015. We 2014A 2015A 2016F 2017F 2018F expect THB0.31 DPS in 2016 and THB0.78 DPS in 2017, Gross Debt to Equity (LHS) Asset Turnover (RHS) assuming 70% dividend payout ratio and implying dividend Capital Expenditure yields of 0.6% in 2016 and 1.5% in 2017. Btm 1,200.0 Share Price Drivers: 1,000.0

Launch of new hit programmes. WORK expects to continuously 800.0 launch new programmes to gain higher ratings. This allows the 600.0 company to charge higher ad rates which will help boost the 400.0 company’s top-line and earnings. 200.0 Major events awarded. WORK plans to maintain its other 0.0 businesses (besides its television programme business) to deliver 2014A 2015A 2016F 2017F 2018F constant growth. If WORK manages to clinch the organising Capital Expenditure (-) contract for any unexpected major event, this could act as a ROE (%) catalyst for its share price. 16.0% Rising margins. WORK’s margins will continue improving due to 14.0% better economies of scale, as most of its costs are fixed (with 12.0% low variable costs). As a result, WORK’s earnings will improve 10.0% over time and this can help re-rate the share price. 8.0%

6.0%

Key Risks: 4.0%

Intense competition. C.87% of 2015 total revenue comes from 2.0% the TV media business which is considered highly competitive. 0.0% 2014A 2015A 2016F 2017F 2018F However, WORK has done well to gain higher ratings and expects to continue gaining higher ratings. PB Band (x) Change in audience preferences. The business faces the risk of (x) rapid changes in audience preference and fashion from time to 14.2 time. Hence, it might face lower ratings if it fails to keep up. 12.2

Expansion into other media. Recently, social media has gained 10.2 popularity and a higher share of the overall media market. The +2sd: 8.8x 8.2 increase in social media market share will negatively affect the +1sd: 7.23x 6.2 TV media business. Thus, WORK has started to invest in social Avg: 5.66x media via Youtube, Facebook and Line to cope with the 4.2 -1sd: 4.09x changes. 2.2 -2sd: 2.52x Feb-13 Feb-14 Feb-15 Feb-16 Reliance on key personnel. The company’s TV business is driven by its key personnel, including MCs, and production and Source: Company, DBS Vickers creative teams. Thus, the departure of such key personnel might negatively affect WORK’s rating.

Company Background Workpoint Entertainment Pcl. is engaged in the entertainment and media businesses. Its offers a wide range of products and services including digital TV channel, TV content production, movies, publishing, event organisation, show business, animation and computer graphics.

ASIAN INSIGHTS VICKERS SECURITIES Page 4 Company Guide Workpoint Entertainment PCL

Key Assumptions FY Dec 2014A 2015A 2016F 2017F 2018F

Sales (Bt m) 2,053 2,388 2,253 3,590 3,993 Sales growth (%) -5.3 16.3 -5.6 59.3 11.2 Gross margin (%) 30.2 42.5 45.1 45.4 45.8 SGA/Sales (%) 32.2 31.6 30.0 29.8 29.6 Net profit margin (%) -0.8 6.7 8.0 12.9 14.0

Income Statement (Btm) FY Dec 2014A 2015A 2016F 2017F 2018F

Revenue 2,053 2,388 2,253 3,590 3,993 Cost of Goods Sold (1,434) (1,372) (1,238) (1,961) (2,163) Gross Profit 619 1,015 1,015 1,629 1,830 Other Opng (Exp)/Inc (661) (754) (746) (1,070) (1,182) Operating Profit (42.2) 261 269 559 648 Other Non Opg (Exp)/Inc 57.1 66.4 62.6 99.8 111 Associates & JV Inc 52.0 14.4 13.6 21.7 24.1 Net Interest (Exp)/Inc (101) (132) (110) (79.0) (57.8) Exceptional Gain/(Loss) 0.0 0.0 0.0 0.0 0.0 Pre-tax Profit (33.8) 210 235 602 726 Tax 19.1 (45.4) (49.8) (125) (150) Minority Interest (1.4) (0.8) (0.9) (2.3) (2.7) Preference Dividend 0.0 0.0 0.0 0.0 0.0 Net Profit (16.0) 164 185 475 573 Net Profit before Except. (16.0) 164 185 475 573 EBITDA 458 849 886 1,247 1,368 Growth Revenue Gth (%) (5.3) 16.3 (5.6) 59.3 11.2 EBITDA Gth (%) (14.6) 85.2 4.4 40.8 9.6 Opg Profit Gth (%) nm nm 3.0 107.7 16.0 Net Profit Gth (Pre-ex) (%) nm nm 12.8 157.1 20.7 Margins & Ratio Gross Margins (%) 30.2 42.5 45.1 45.4 45.8 Opg Profit Margin (%) (2.1) 11.0 11.9 15.6 16.2 Net Profit Margin (%) (0.8) 6.9 8.2 13.2 14.3 ROAE (%) (1.0) 7.3 6.3 14.7 16.0 ROA (%) (0.4) 3.1 3.4 8.8 10.5 ROCE (%) (1.3) 4.5 4.5 9.8 11.4 Div Payout Ratio (%) N/A 86.7 70.0 70.0 70.0 Net Interest Cover (x) (0.4) 2.0 2.4 7.1 11.2 Source: Company, DBS Vickers

ASIAN INSIGHTS VICKERS SECURITIES Page 5 Company Guide

Workpoint Entertainment PCL

Quarterly / Interim Income Statement (Btm) FY Dec 3Q2015 4Q2015 1Q2016 2Q2016 3Q2016

Revenue 641 641 547 802 776 Cost of Goods Sold (366) (345) (319) (409) (430) Gross Profit 274 296 228 392 347 Other Oper. (Exp)/Inc (187) (251) (181) (197) (201) Operating Profit 86.7 45.4 47.2 196 146 Other Non Opg (Exp)/Inc (3.8) 44.4 22.3 2.86 24.7 Associates & JV Inc 4.52 10.9 (1.9) (0.6) 1.36 Net Interest (Exp)/Inc (14.4) (72.0) (31.8) (30.3) (28.2) Exceptional Gain/(Loss) 0.0 0.0 0.0 0.0 0.0 Pre-tax Profit 73.0 28.7 35.7 168 143 Tax (13.9) (9.7) (6.3) (34.2) (27.1) Minority Interest (0.6) (2.1) (0.7) 0.47 (8.4) Net Profit 58.5 16.9 28.7 134 108 Net profit bef Except. 58.5 16.9 28.7 134 108 EBITDA 255 232 199 343 316

Growth Revenue Gth (%) (5.7) 0.1 (14.7) 46.6 (3.1) EBITDA Gth (%) 7.9 (9.3) (14.3) 72.5 (7.7) Opg Profit Gth (%) (34.7) (47.6) 4.0 314.2 (25.6) Net Profit Gth (Pre-ex) (%) (48.4) (71.2) 70.5 366.0 (19.3) Margins Gross Margins (%) 42.8 46.2 41.7 48.9 44.6 Opg Profit Margins (%) 13.5 7.1 8.6 24.4 18.8 Net Profit Margins (%) 9.1 2.6 5.3 16.7 13.9

Balance Sheet (Btm) FY Dec 2014A 2015A 2016F 2017F 2018F

Net Fixed Assets 761 984 997 995 992 Invts in Associates & JVs 74.7 74.4 74.5 74.5 74.6 Other LT Assets 2,881 2,783 2,865 2,706 2,535 Cash & ST Invts 857 1,272 938 938 997 Inventory 78.2 63.3 57.1 90.4 99.7 Debtors 376 438 413 659 733 Other Current Assets 0.0 0.0 0.0 0.0 0.0 Total Assets 5,028 5,614 5,345 5,463 5,430

ST Debt 288 141 141 141 141 Creditor 485 433 391 619 682 Other Current Liab 233 370 374 375 210 LT Debt 694 606 497 388 279 Other LT Liabilities 1,614 1,237 866 522 326 Shareholder’s Equity 1,658 2,808 3,056 3,397 3,768 Minority Interests 55.8 19.2 20.0 22.3 25.0 Total Cap. & Liab. 5,028 5,614 5,345 5,463 5,430

Non-Cash Wkg. Capital (264) (301) (295) (244) (59.9) Net Cash/(Debt) (126) 525 301 410 578 Debtors Turn (avg days) 97.4 62.2 69.0 54.5 63.6 Creditors Turn (avg days) 135.4 193.5 215.6 132.2 150.5 Inventory Turn (avg days) 27.9 29.8 31.5 19.3 22.0 Asset Turnover (x) 0.6 0.4 0.4 0.7 0.7 Current Ratio (x) 1.3 1.9 1.6 1.5 1.8 Quick Ratio (x) 1.2 1.8 1.5 1.4 1.7 Net Debt/Equity (X) 0.1 CASH CASH CASH CASH Net Debt/Equity ex MI (X) 0.1 CASH CASH CASH CASH Capex to Debt (%) 67.1 134.1 121.4 146.5 185.9 Z-Score (X) 3.3 4.4 5.1 6.2 7.6

Source: Company, DBS Vickers

ASIAN INSIGHTS VICKERS SECURITIES Page 6 Company Guide Workpoint Entertainment PCL

Cash Flow Statement (Btm) FY Dec 2014A 2015A 2016F 2017F 2018F

Pre-Tax Profit (33.8) 210 235 602 726 Dep. & Amort. 391 506 541 567 584 Tax Paid 19.1 (45.4) (49.8) (125) (150) Assoc. & JV Inc/(loss) 0.0 0.0 0.0 0.0 0.0 Chg in Wkg.Cap. 326 (190) (13.2) (55.9) (25.4) Other Operating CF (81.5) 105 (45.0) (13.9) (30.2) Net Operating CF 621 586 668 974 1,104 Capital Exp.(net) (659) (1,001) (774) (774) (779) Other Invts.(net) (24.6) (193) 8.66 (3.9) 1.00 Invts in Assoc. & JV 0.0 0.0 0.0 0.0 0.0 Div from Assoc & JV 0.0 15.0 0.0 0.0 0.0 Other Investing CF 5.41 100 0.0 0.0 0.0 Net Investing CF (678) (1,079) (765) (778) (778) Div Paid 0.0 (92.5) (129) (332) (401) Chg in Gross Debt 1,120 585 0.0 0.0 0.0 Capital Issues 200 1,073 199 199 199 Other Financing CF (694) (864) (307) (74.1) (71.9) Net Financing CF 626 702 (237) (208) (274) Currency Adjustments 0.0 0.0 0.0 0.0 0.0 Chg in Cash 568 209 (335) (11.7) 52.1 Opg CFPS (Bt) 0.77 1.87 1.61 2.41 2.61 Free CFPS (Bt) (0.1) (1.0) (0.3) 0.47 0.75 Source: Company, DBS Vickers

Target Price & Ratings History

Bt 12-mth Date of Closing 52.07 S.No. T arget Rating Report Price Price 1: 05 Jul 16 38.75 45.00 BUY 47.07 2: 11 Jul 16 39.00 45.00 BUY 3: 12 Jul 16 38.25 45.00 BUY 42.07 4: 04 Oct 16 35.00 45.00 BUY 2 6 5: 17 Oct 16 35.25 45.00 BUY 6: 11 Nov 16 38.00 45.00 BUY 37.07 4 13

5 32.07

27.07 Feb-16 Apr-16 Jun-16 Aug-16 Oct-16 Dec-16

Note : Share price and Target price are adjusted for corporate actions.

Source: DBS Vickers Analyst: Nantika WIANGPHOEM Chanpen SIRITHANARATTANAKUL

THAI-CAC Certified Corporate Governance CG Rating 2016

THAI-CAC is Companies participating in Thailand's Private Sector Score Description Collective Action Coalition Against Corruption programme (Thai Declared Companies that have declared their intention to join CAC CAC) under Thai Institute of Directors (as of October 28, 2016) are Certified Companies certified by CAC. categorised into: Score Range Number of Logo Description Corporate Governance CG Rating is based on Thai Institute of Directors (IOD)’s annual assessment of corporate governance 90-100 Excellent practices of listed companies. The assessment covers 235 criteria 80-89 Very Good in five categories including board responsibilities (35% weighting), 70-79 Good disclosure and transparency (20%), role of stakeholders (20%), equitable treatment of shareholders (10%) and rights of 60-69 Satisfactory shareholders (15%). The IOD then assigns numbers of logos to 50-59 Pass each company based on their scoring as follows: <50 No logo given N/A

ASIAN INSIGHTS VICKERS SECURITIES Page 7 Company Guide

Workpoint Entertainment PCL

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

Completed Date: 6 Feb 2017 06:28:26 (THA) Dissemination Date: 6 Feb 2017 06:32:08 (THA)

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DBS Vickers Securities (USA) Inc ("DBSVUSA")"), a U.S.-registered broker-dealer, does not have its own investment banking or research department, has not participated in any public offering of securities as a manager or co-manager or in any other investment banking transaction in the past twelve months and does not engage in market-making.

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ANALYST CERTIFICATION The research analyst(s) primarily responsible for the content of this research report, in part or in whole, certifies that the views about the companies and their securities expressed in this report accurately reflect his/her personal views. The analyst(s) also certifies that no part of his/her compensation was, is, or will be, directly, or indirectly, related to specific recommendations or views expressed in the report. The DBS Group has procedures in place to eliminate, avoid and manage any potential conflicts of interests that may arise in connection with the production of research reports. As of 6 Feb 2017, the analyst(s) and his/her spouse and/or relatives who are financially dependent on the analyst(s), do not hold interests in the securities recommended in this report (“interest” includes direct or indirect ownership of securities). The research analyst(s) responsible for this report operates as part of a separate and independent team to the investment banking function of the DBS Group and procedures are in place to ensure that confidential information held by either the research or investment banking function is handled appropriately.

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Compensation for investment banking services: 2. DBSVUSA does not have its own investment banking or research department, nor has it participated in any public offering of securities as a manager or co-manager or in any other investment banking transaction in the past twelve months. Any US persons wishing to obtain further information, including any clarification on disclosures in this disclaimer, or to effect a transaction in any security discussed in this document should contact DBSVUSA exclusively. Disclosure of previous investment recommendation produced: 3. DBS Bank Ltd, DBS Vickers Securities (Singapore) Pte Ltd (''DBSVS''), their subsidiaries and/or other affiliates may have published other investment recommendations in respect of the same securities / instruments recommended in this research report during the preceding 12 months. Please contact the primary analyst listed in the first page of this report to view previous investment recommendations published by DBS Bank Ltd, DBS Vickers Securities (Singapore) Pte Ltd (''DBSVS''), their subsidiaries and/or other affiliates in the preceding 12 months.

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

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Wong Ming Tek, Executive Director, ADBSR

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Workpoint Entertainment PCL

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

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

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

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

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

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

DBS Vickers Securities (Thailand) Co, Ltd 989 Siam Piwat Tower Building, 9th, 14th-15th Floor Rama 1 Road, Pathumwan, Bangkok Thailand 10330 Tel. 66 2 657 7831, Fax: 66 2 658 1269 Company Regn. No 0105539127012 Securities and Exchange Commission, Thailand.

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