IMAX China Holdings Soft Momentum After Avengers

Home , Detective Chinatown 2, Geostorm, Li Yifeng, Monster Hunt, Monster Hunt 2, Wolf Warrior 2

14 June 2018 Hong Kong

EQUITIES IMAX China Holdings

1970 HK Neutral Soft momentum after Avengers Price (at 06:39, 13 Jun 2018 GMT) HK$27.60

Valuation HK$ 26.00-29.00 Key points - PER  Downgrade to Neutral with TP lowered to HK$27.77 12-month target HK$ 27.77 We expect IMAX China’s BO growth to slow down after Avengers with its Upside/Downside % +0.6  network expansion peaking 12-month TSR % +1.8  We expect earnings to drop by 4% YoY in 2H18, with a 4% 18-20E CAGR Volatility Index High GICS sector Media Market cap HK$m 9,903 Event Market cap US$m 1,246  Downgrade to Neutral. IMAX China’s share price has rallied by 45% from the Free float % 32 trough earlier this year (vs +4% for HSI), on the good box office (BO) 30-day avg turnover US$m 5.1 performance of Avengers and strong 1Q. However, we expect the earnings Number shares on issue m 358.8 growth momentum going forward to inevitably slow down on the expected soft film slate and more importantly, the peaking of network installations. We expect Investment fundamentals its earnings to decline by 4% YoY in 2H18, after a +36% YoY in 1H18E, with a Year end 31 Dec 2017A 2018E 2019E 2020E Revenue m 126.5 138.6 146.9 150.7 4% 18-20E earnings CAGR. Downgrade to Neutral from Outperform. EBIT m 57.3 65.1 68.7 70.4 EBIT growth % 20.7 13.5 5.6 2.4 Impact Reported profit m 43.7 49.0 51.8 53.1  Softer momentum after Avengers. We expect IMAX China’s BO growth Adjusted profit m 45.9 51.3 54.3 55.6 EPS rep ¢ 12.1 13.4 13.9 14.0 momentum to decelerate to 10% YoY in 2Q18 and 14% YoY in 2H18, after EPS rep growth % 21.1 11.2 3.3 0.5 27% in 1Q18. Despite the Rmb2.36bn BO of Avengers, the soft BO EPS adj ¢ 12.7 14.1 14.6 14.6 EPS adj growth % 21.8 10.9 3.4 0.5 performance of other titles such as Solo: A Star Wars Story, and the block of PER rep x 29.1 26.2 25.3 25.2 Deadpool 2 in PRC explains it. Upcoming titles include Jurassic World: Fallen PER adj x 27.7 25.0 24.2 24.1 Total DPS ¢ 4.0 4.2 4.4 4.4 Kingdom (15 June), Incredible 2 (22 June), local film Animal World (29 June), Total div yield % 1.1 1.2 1.2 1.3 and also Mission: Impossible 6, Vanom etc in 2H (Fig 3). Overall, we do not ROA % 19.4 18.3 16.6 14.9 ROE % 21.2 19.0 16.8 14.7 think the upcoming film slate is particularly stronger compared to 2017, while EV/EBITDA x 15.5 13.0 12.8 12.8 local films could bring some upside. Net debt/equity % -47.7 -57.6 -64.5 -69.6 P/BV x 5.1 4.2 3.7 3.2  Installations have peaked. IMAX’s China sales growth in 2016-17 was supported by the installation growth of sales-type systems. However, that figure 1970 HK rel HSI performance, & rec history could show its first decline to 37 this year from 33/41 in 2016/17, and then to 33/25 in 2019/20 per our estimate. That would also adversely impact the company’s earnings further given the high gross margin of sales-type systems.  Expect a 4% earnings CAGR in 2018-20. We continue to like IMAX China’s new film selection strategy that has been implemented since 2H17 to accommodate more local films with higher flexibility to local exhibitors. However, even after factoring that in (we already estimate a 16% 18-20E BO CAGR), we still come out with a lacklustre 4% earnings CAGR for IMAX China, given the expected lower contribution from sales-type installations and flattish PSA. Note: Recommendation timeline - if not a continuous line, then there was no Macquarie coverage at the time or there was an embargo period. Source: FactSet, Macquarie Research, June 2018 Earnings and target price revision (all figures in USD unless noted, TP in HKD)  18E earnings +6% on expected solid 1H18. We trim 19-20E earnings by 1-2%. We Macquarie Governance and Risk Score (MGRS) lower our TP to HK$27.77 (from HK$31.35) on a lower target PER of 26x to reflect On our proprietary Governance and Risk Score IMAX China Holdings scores in the second quartile of our slower growth. Our 18/19/20 earnings estimates are 2%/5%12% below BBG. current universe coverage. Price catalyst Analysts  12-month price target: HK$27.77 based on a PER methodology.

Macquarie Capital Limited  Catalyst: 1H18 results, film BO performance Marcus Yang +86 21 2412 9087 [email protected] Action and recommendation

Wendy Huang, CFA +852 3922 3378  Downgrade to Neutral. The stock trades at a 24x 19E PER or 4x PEG, [email protected] compared to the historical average of 2x PEG. We would need to see a more

Frank Chen +852 3922 1433 structural BO momentum recovery from the industry to turn positive on this [email protected] name. Upside risks to our view: cost reduction, local films’ BO, booking timing

of sales-type systems, and import quota of foreign films.

Please refer to page 12 for important disclosures and analyst certification, or on our website www.macquarie.com/research/disclosures.

Macquarie Research IMAX China Holdings

Downgrade to Neutral with TP of HK$27.77 We downgrade IMAX China to Neutral from Outperform as we:

 1) see slower BO momentum coming after Avengers. We expect IMAX China’s BO growth to slow down to 10% YoY in 2Q18 and 14% YoY in 2H18 from 27% YoY in 1Q18. We are not that positive regarding the film pipeline throughout the rest of the year we see so far, while the Chinese local films would be the key swing factor.

 2) expect the first decline in the sales-type system installations. Those one-off installations supported IMAX China’s financial performance during 2016-17. Based on the company’s guidance, its total installations this year will drop to 105 from 119/120 in 2016/17. Of which, the sales-type installations will drop to 37 from 33/44 in 2016/17. We see the sales-type installations to decline to 33/25 in 2019/20E.

 As such, we expect IMAX China’s earnings growth to stall to 4% in 2018-20E, after we trim our 19- 20E earnings estimates by 1-2%. Our 19/20E earnings estimates are 5% and 12% below consensus.

 The stock is now trading at a 24.3x 19E PER, with a 6% 18-21E earnings CAGR, or 4.0x PEG. Historically, the stock has traded at a 41x PER average (20-58x) with a 20% 2014-17 earnings CAGR, or 2x PEG.

 Our new target price of HK$27.77 is based on a 26x 18-19E average PER (from HK$31.35 based on a 30x 18-19E average PER). We revise down our target PER to reflect the expected slower growth (4% vs 8% prior) and the confidence level regarding the overall China box office growth. We would not turn more positive bullish until we see a clearer sign of box office growth resumption from the industry.

Fig 1 Earnings revision New estimates YE 31 Dec (USD '000) 2018E 2019E 2020E

Revenue 138,575 146,891 150,651 OP 62,704 66,231 67,819 Net Profit 48,987 51,766 53,012 Non-GAAP net profit 51,342 54,263 55,573 Adjusted EPS 0.14 0.15 0.15

Old estimates YE 31 Dec (USD '000) 2018E 2019E 2020E

Revenue 138,433 148,635 155,620 OP 59,183 66,574 69,467 Net Profit 46,241 52,027 54,279 Non-GAAP net profit 48,594 54,554 56,924 Adjusted EPS 0.13 0.15 0.15

Estimate change YE 31 Dec 2018E 2019E 2020E

Revenue 0.1% -1.2% -3.2% OP 5.9% -0.5% -2.4% Net Profit 5.9% -0.5% -2.3% Non-GAAP net profit 5.7% -0.5% -2.4% Adjusted EPS 5.7% -0.5% -2.4% Source: Macquarie Research, June 2018

Fig 2 Key metric assumptions for IMAX China 2015 2016 2017 2018E 2019E 2020E

IMAX China box office (USD million) 312 296 291 337 391 450 yoy growth 53.8% -5.3% -1.7% 16.0% 15.8% 15.3% Per screen average box office (USD 000) 1,155 809 601 565 562 572 yoy growth 15.7% -29.9% -25.7% -5.9% -0.7% 1.9% Number of theatres 307 424 544 649 742 832 Sales type 130 164 229 266 299 324 Full revenue sharing 131 196 246 301 344 389 Hybrid revenue sharing 46 64 69 82 99 119 Source: Company data, Macquarie Research, June 2018

14 June 2018 2 Macquarie Research IMAX China Holdings

Softer momentum after Avengers  IMAX China registered strong revenue growth of 51% YoY in 1Q18, thanks to the 27% YoY BO growth (driven by CNY performance) and the sales type-installations. IMAX China added 5 new installations during 1Q18, according to IMAX US results, and all 5 of those are sales-type, which is positive to its margin profile in 1Q.

 Even with the Rmb2.36bn BO garnered from Avengers 3, IMAX China’s 2Q18 BO could just come in line with our estimate of US$196m (10% YoY). That points to a weak BO from other slates such as Solo: A Star Wars Story (Rmb105m BO in PRC since launch on 25 May) and the block of Deadpool 2 in PRC. That also reflects the weak PRC BO after 40% YoY growth in 1Q18. QTD PRC BO declined by 12% YoY to Rmb8.6bn (as of 12 June; excluding service fee), according to Maoyan data.

 What adds to our concern is the upcoming slate and the fact that we are entering domestic movie protection month (normally from mid-June to end-July/mid-Aug). We are not particularly positive on the Jurassic World: Fallen Kingdom, after we watched the film (in other markets), even though it is the top-anticipating film in China currently, according to Dianping. Incredible 2 is not on the top 10 anticipated list, and Animal World, a local film loosely adapted from Nobuyuki Fukumoto's manga, starring Li Yifeng, Zhou Dongyu and Michael Douglas, is ranked top 6.

 In 2H18, we think Mission: Impossible 6, Vanom (another superhero film) may have good performance but we do not see this as a strong pipeline overall. In 2H17, there was Dunkirk, Spider-Man: Homecoming, War for the Planet of the Apes, Kingsman: The Golden Circle, Geostorm, Thor: Ragnarok, Justice League etc and two local films The Foreigner (US-China co-production), Never Say Die in the golden week.

 We believe there will be more local films to be announced by IMAX China as part of its new film selection strategy. We think that might include Detective Dee 3 (July 2018) and Dying To Survive (July 2018). The performance of those local films will be a key swing factor to our BO estimate, but this year so far, we do not see a tent pole slate like Wolf Warrior 2 in 2017.

 Overall, we expect IMAX China’s BO growth to slow down to 14% YoY in 2H18, despite relatively easy comps (+7% YoY in 2H17). Going forward, we forecast 16%/15% BO growth for IMAX China in 2019/20E, with similar growth of 16% in 18E. This is more to factor in the company’s film strategy since 2H17 to accommodate for more local films. We consider this a pretty aggressive assumption.

14 June 2018 3 Macquarie Research IMAX China Holdings

Fig 3 IMAX China 2018 pipeline China US releaseMovie name Chinese name Countr Producer YTD China box release date date y office (RMBmn)

26-Jan-18 26-Jan-18Maze Runner: The Death Cure 移动迷宫3：死亡解药 US Twentieth Century-Fox Film 315.2 Corporation 1-Feb-18 20-Dec-17The Greatest Showman 马戏之王 US Twentieth Century-Fox Film 101.2 Corporation 16-Feb-18 Operation Red Sea 红海行动 China Bona Film Group Limited 3,635.0 16-Feb-18 Detective Chinatown 2 唐人街探案2 China Wanda Media Co., Ltd/ Xiaomi 3,397.0 Pictures Co., Ltd. 16-Feb-18 Monster Hunt 2 捉妖记2 China 无锡影都传媒有限公司/Shanghai 2,237.0 Tencent Penguin Pictures Co.,Ltd 9-Mar-18 16-Feb-18Black Panther 黑豹 US Walt Disney Pictures 662.0 16-Mar-18 16-Mar-18Tomb Raider 古墓丽影：源起之战 US Warner Bros. Pictures Co. 496.0 23-Mar-18 23-Mar-18Pacific Rim: Uprising 环太平洋：雷霆再起 US Universal Pictures/Perfect Pictures 632.0 and Media Co.,Ltd.(China) 30-Mar-18 29-Mar-18Ready Player One 头号玩家 US Warner Bros. Pictures Co. 1,396.0 13-Apr-18 13-Apr-18Rampage 狂暴巨兽 US New Line Cinema 1,003.1 28-Apr-18 A or B 幕后玩家 China Hairun Pictures 358.4 11-May-18 27-Apr-18Avengers: Infinity War 复仇者联盟3：无限战争 US Marvel Studios Inc. 2,359.0 2018 18-May-18Deadpool II 死侍2 US 20th Century Fox Film Corporation Blocked 25-May-18 25-May-18Solo: A Star Wars Story 星球大战外传：韩·索罗 US Walt Disney Pictures 105.0 15-Jun-18 22-Jun-18Jurassic World: Fallen Kingdom 侏罗纪世界2 US Universal Pictures 22-Jun-18 15-Jun-18The Incredibles 2 超人总动员2 US Walt Disney Pictures 29-Jun-18 Animal World 动物世界 China Beijing Enlight Pictures Co.,Ltd 6-Jul-18 Dying To Survive 我不是药神 China Dongyang Huaihouzi Entertainment 27-Jul-18 Detective Dee 3: The Four 狄仁杰之四大天王 China Huayi Brothers Media Group Heavenly Kings Co.,Ltd 10-Aug-18 10-Aug-18The Meg 巨齿鲨 US Warner Bros. Pictures/Gravity Pictures (China) 2018 27-Jul-18Mission: Impossible 6 碟中谍6 US Paramount Pictures 2018 7-Sep-18The Nun 鬼修女 US Warner Bros. Pictures 2018 14-Sep-18The Predator 铁血战士 US 20th Century Fox 2018 4-Oct-18Venom 毒液：致命守护者 US Sony Pictures 2018 12-Oct-18First Man 第一人 US Universal Pictures 2018 16-Nov-18Fantastic Beasts: The Crimes of 神奇动物：格林德沃之罪 US Warner Bros. Pictures Grindelwald 2018 21-Nov-18Ralph Breaks the Internet: Wreck- 无敌破坏王2 US Walt Disney Studios It-Ralph 2 2018 21-Dec-18Aquaman 海王 US Warner Bros. Pictures 2018 14-Dec-18Spider -Man: Into the Spider-Verse 蜘蛛侠：新纪元 US Sony Pictures Entertainment/Columbia Pictures *As of 13 June, 2018; Source: IMAX China, IMAX US, Maoyan, Macquarie Research estimate, June 2018

14 June 2018 4 Macquarie Research IMAX China Holdings

Fig 4 Our bullish BO assumption still implies BO Fig 5 We assume a 16% 18-20E CAGR for IMAX China BO, momentum to slow down off the peak in 1Q18 factoring in a better film selection strategy

US$m US$m 27% 120 30% 500 54% 60% 107 450 97 25% 450 45% 100 391 50% 89 17% 20% 400 38% 12% 337 40% 10% 74 15% 350 312 80 70 296 8% 67 291 63 10% 300 60 30% 60 1% 5% 250 6% 203 16% 16% 15% 20% 0% 200 40 147 -5% 150 101 10% -10% 100 -2% 20 -17% -5% 0% -15% 50 0 -20% - -10% 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18E 3Q18E 4Q18E 2012 2013 2014 2015 2016 2017 2018E 2019E 2020E IMAX China Box office YoY IMAX China Box office YoY

Source: Company data, Macquarie Research, June 2018 Source: Company data, Macquarie Research, June 2018

Fig 6 However, IMAX China’s PSA will remain under pressure as well as the gross margin of its revenue-sharing arrangement Fig 7 PSA and margin to be under pressure

USD'000 USD'000 IMAX China PSA and Rev sharing GM 66% IMAX China PSA and Rev sharing GM 1,400 56% 60% 800 62% 70% 700 1,200 47% 47% 60% 50% 722 50% 50% 50% 42% 600 47% 47% 50% 1,000 1,155 36% 35% 36% 33% 40% 500 562 977 998 40% 800 28% 400 492 28% 30% 791 809 22% 30% 600 300 379 20% 20% 20% 345 338 348 601 304 20% 565 562 572 20% 200 400 246 226 226 226 100 10% 200 10% - 0% - 0% 2012 2013 2014 2015 2016 2017 2018E 2019E 2020E PSA Gross margin - revenue sharing PSA Gross margin - revenue sharing

*PSA on half-year average screen numbers (differs from Company’s *PSA on half-year average screen numbers (differs from Company’s definition on monthly screen basis) Source: Company data, Macquarie definition on monthly screen basis) Source: Company data, Macquarie Research, June 2018 Research, June 2018

 We expect IMAX China’s PSA to decline to US$226k in 2H18 from US$246k in 2H17 and to remain under pressure at US$562k-572k in 2019-20E on a full-year basis. The PSA and the incremental depreciation associated with continued growth in the IMAX theatre network under the revenue sharing arrangement will also keep weighing on the gross margin of revenue-sharing arrangement, in our view.

Passed its installation peak  In 2016-17, when the box office softened, sales growth from IMAX China was largely supported by its network expansion, i.e. primarily the expansion in sales-type installations. IMAX China’s sales increased by US$16m in 2016-17 and sales from these one-off installations contributed US$20m. The company newly installed 41 sales-type systems in 2017, increasing from 33 in 2016 and 25 in 2015. The earnings contribution should be higher than that given the higher gross margin of sales-type installations.

14 June 2018 5 Macquarie Research IMAX China Holdings

 However, the announced 2018 installation plan of IMAX China implies that the number of installations has passed its peak for the first time in history. They plan to install 105 IMAX systems in 2018, down from 119/120 in 2016/17. And the sales-type installations would reduce to 37 from 41 in 2017, based on the company’s guidance. That means the gross margin would also be adversely impacted as those one-off installations carry a high gross margin of more than 70% (compared to the company’s average of 55%-60%). And certainly, its financials in that way will be more reliant on its BO performance going forward.

 As the Chairman of IMAX China put it, “China is a big market, and we penetrated a lot of it, but it's not an infinite market”. Going forward, we expect to see sales contribution from its sales-type installations to decline to 23% in 2020 from 45% in 2017.

Fig 8 IMAX China’s installations to register first decline since 2012…. Fig 9 …which could dampen its earnings growth

US$'000 Newly installed IMAX system Sales split and earnings growth 140 180,000 80% 160,000 70% 120 14 140,000 60% 20 50% 100 13 120,000 40% 17 100,000 80 20 30% 65 80,000 21 64 55 20% 60 60,000 15 43 10% 45 40,000 40 3 7 29 0% 27 20,000 21 24 -10% 20 41 33 37 33 - -20% 25 25 16 14 20 2012 2013 2014 2015 2016 2017 2018E 2019E 2020E 0 2012 2013 2014 2015 2016 2017 2018E 2019E 2020E Sales type Revenue share Theatre system maintenance Others Sales type Full revenue sharing Hybrid revenue sharing Film business Earnings YoY

Source: Company data, Macquarie Research, June 2018 Source: Company data, Macquarie Research, June 2018

Fig 10 IMAX China’s earnings growth in 2017 was highly driven by one-off installations and opex reduction Fig 11 …which no longer exists going forward

US$'000 Net profit waterfall charts US$'000 Net profit waterfall charts 50,000 60,000 48,000 2,553 1,781 4,496 3,760 46,000 55,000 59 643 626 119 208 2,364 44,000 4,080 5,391 3,926 50,000 42,000 8,781 40,000 45,000 8,375 4,850 38,000 45,949 40,000 51,342 36,000 45,949 34,000 37,562 35,000 32,000 30,000 30,000

Source: Company data, Macquarie Research, June 2018 Source: Company data, Macquarie Research, June 2018

 Still, the timeline of IMAX China’s sales-type arrangement installations and its opex reduction remains a swing factor and could bring upside risk to our estimate. Namely, the company could book sales- type installations earlier to enhance its financial performance (as the case in 2017), and could continue to manage down SG&A (though it guided +9% YoY in 2H17 earnings call). But that, in our view, is relatively less encouraging compared to quality box office growth. Indeed, the higher sales contribution from sales-type installations could be a double-edge sword, i.e. +ve on near-term financial performance while dampens long-term box-office sharing upside.

14 June 2018 6 Macquarie Research IMAX China Holdings

Fig 12 Revenue segments - IMAX China US$ 000 2015 2016 2017 2018E 2019E 2020E

Revenues 110,591 118,532 126,474 138,575 146,891 150,651 Theatre Business 82,119 91,722 99,038 106,643 109,907 108,009 Sales type 37,038 47,869 56,650 51,800 46,200 35,000 Revenue share 34,498 30,927 25,536 33,911 39,274 45,169 Theatre system maintenance 9,346 11,702 15,082 18,896 22,093 25,148 Others 1,237 1,224 1,770 2,036 2,341 2,692 Film business 28,472 26,810 27,436 31,932 36,984 42,642

Revenue Mix Theatre Business 74.3% 77.4% 78.3% 77.0% 74.8% 71.7% Sales type 33.5% 40.4% 44.8% 37.4% 31.5% 23.2% Revenue share 31.2% 26.1% 20.2% 24.5% 26.7% 30.0% Theatre system maintenance 8.5% 9.9% 11.9% 13.6% 15.0% 16.7% Others 1.1% 1.0% 1.4% 1.5% 1.6% 1.8% Film business 25.7% 22.6% 21.7% 23.0% 25.2% 28.3%

YoY growth Total Revenue 41% 7% 7% 10% 6% 3% Theatre Business 37.7% 11.7% 8.0% 7.7% 3.1% -1.7% Sales type 29.2% 29.2% 18.3% -8.6% -10.8% -24.2% Revenue share 51.6% -10.4% -17.4% 32.8% 15.8% 15.0% Theatre system maintenance 29.6% 25.2% 28.9% 25.3% 16.9% 13.8% Others 24.2% -1.1% 44.6% 15.0% 15.0% 15.0% Film business 53.1% -5.8% 2.3% 16.4% 15.8% 18.6% Source: Company data, Macquarie Research, June 2018

14 June 2018 7 Macquarie Research IMAX China Holdings

Fig 13 Ratios YE 31 December 2015 2016 2017 2018E 2019E 2020E 17A-18E 18E-19E 17E-20E

Per Share EPS (diluted) (USD) (0.62) 0.10 0.12 0.13 0.14 0.14 11% 3% 5% Non-GAAP EPS (diluted) (USD) 0.15 0.10 0.13 0.14 0.15 0.15 11% 3% 5% EBITDA 0.18 0.16 0.20 0.23 0.24 0.24 17% 3% 6% BVPS (USD) 0.55 0.55 0.68 0.82 0.94 1.08 20% 16% 17% Cash per share (USD) 0.31 0.29 0.32 0.47 0.61 0.75 45% 30% 32% Basic shares 000 292,780 361,985 356,584 356,584 363,716 367,353 0% 2% 1% Diluted shares 000 292,780 361,985 361,925 364,644 372,864 376,593 1% 2% 1% Value EV/Revenue x 10.7 x 9.9 x 9.3 x 8.5 x 8.0 x 7.8 x ------EV/EBITDA x 22.4 x 19.9 x 16.3 x 13.8 x 13.2 x 13.1 x ------EV/FCF x -199.7 x 41.9 x 59.4 x 22.7 x 22.0 x 21.8 x ------Non-GAAP P/E x 24.0 x 34.2 x 27.8 x 25.1 x 24.3 x 23.9 x ------Non-GAAP P/E (ex x Cash) 21.9 x 31.4 x 25.3 x 21.7 x 20.1 x 18.8 x ------Price/ Sales x 11.6 x 10.8 x 10.1 x 9.2 x 8.7 x 8.5 x ------Price/ Book x 6.5 x 6.5 x 5.2 x 4.3 x 3.7 x 3.3 x ------Profitability Gross Margin % 65% 58% 61% 62% 61% 61% 68 bps (52 bps) (24 bps) EBITDA Margin % 48% 50% 57% 61% 61% 60% 434 bps (62 bps) 269 bps Operating Margin % 38% 39% 44% 45% 45% 45% 118 bps (16 bps) 94 bps Net Margin % -164% 30% 35% 35% 35% 35% 79 bps (11 bps) 63 bps Cash Flow Operating Cash Flow (USD 000) (156) 46,723 35,338 82,791 77,795 77,809 134% -6% 30% Free Cash Flow : (USD 000) (5,901) 28,129 19,722 51,739 53,183 53,674 162% 3% 40% Yield Dividend Yield % 0% 0% 0% 0% 0% 0% ------FCF Yield % -0.6% 2.2% 1.5% 4.0% 4.0% 4.0% 248 bps 2 bps 249 bps Earnings Yield % 4.2% 2.9% 3.6% 4.0% 4.1% 4.2% 39 bps 13 bps 58 bps Balance Sheet Net debt (Cash) (USD 000) (90,689) (105,903) (116,678) (170,536) (226,106) (282,366) ------Net debt/ equity % Cash Cash Cash Cash Cash Cash ------Shareholders Equity (USD 000) 160,217 199,040 246,424 297,766 352,030 407,603 21% 18% 18% Efficiency ROE (average) % -194.7% 20.7% 20.1% 18.1% 16.0% 14.0% (203 bps) (210 bps) (613 bps) ROA (average) % -97.4% 14.8% 14.8% 13.8% 12.5% 11.2% (101 bps) (131 bps) (360 bps) ROIC (average) % -132.1% 18.2% 18.3% 16.6% 14.8% 13.1% (168 bps) (180 bps) (521 bps) Source: Company data, Macquarie Research, June 2018

14 June 2018 8 Macquarie Research IMAX China Holdings

Fig 14 Financial analysis YE 31 December US$ 000 2015 2016 2017 2018E 2019E 2020E 17A-18E 18E-19E 17E-20E Consolidated Income Statement

Total Revenue 110,591 118,532 126,474 138,575 146,891 150,651 10% 6% 6% Cost of revenues 38,311 49,235 49,116 52,876 56,808 58,873 8% 7% 6% Gross Profit 72,280 69,297 77,358 85,699 90,083 91,777 11% 5% 6% GP Margin 65% 58% 61% 62% 61% 61% 68 bps (52 bps) (24 bps) SG&A 23,859 17,083 14,530 15,173 16,508 16,426 4% 9% 4% Others 6,050 6,363 7,087 7,822 7,345 7,533 10% -6% 2% Operating Profit 42,371 45,851 55,741 62,704 66,231 67,819 12% 6% 7% OP Margin 38% 39% 44% 45% 45% 45% 118 bps (16 bps) 94 bps Non-Operating, Net -213,238 573 89 764 840 880 758% 10% 115% PBT -170,867 46,424 55,830 63,468 67,071 68,699 14% 6% 7% Income Taxes (Credit) -10,998 -10,336 -12,117 -14,481 -15,305 -15,687 20% 6% 9% Net Income -181,865 36,088 43,713 48,987 51,766 53,012 12% 6% 7% NP Margin -164% 30% 35% 35% 35% 35% 79 bps (11 bps) 63 bps Non-GAAP net Income 43,353 37,562 45,949 51,342 54,263 55,573 12% 6% 7% EBITDA 52,600 59,293 71,956 84,859 89,035 89,759 18% 5% 8% EBITDA Margin 47.6% 50.0% 56.9% 61.2% 60.6% 59.6% 434 bps (62 bps) 269 bps

Consolidated Balance Sheet Current Assets 139,231 158,339 189,666 241,623 301,546 359,807 27% 25% 24% Cash 90,689 105,903 116,678 170,536 226,106 282,366 46% 33% 34% Trade receivables 35,640 37,975 53,995 50,385 53,409 54,775 -7% 6% 0% Financing receivables 3,783 5,831 8,450 9,258 9,814 10,065 10% 6% 6% Inventory 6,364 5,731 5,612 6,042 6,491 6,727 8% 7% 6% Others 2,755 2,899 4,931 5,403 5,727 5,874 10% 6% 6% Fixed Assets 82,931 106,631 135,633 142,726 142,364 142,071 5% 0% 2% PPE 51,990 69,751 88,620 91,215 87,761 86,071 3% -4% -1% Deferred Taxes 1,309 1,830 3,291 3,606 3,822 3,920 10% 6% 6% Financing receivables 25,270 30,309 39,319 43,081 45,666 46,835 10% 6% 6% Other Fixed Assets 4,362 4,741 4,403 4,824 5,114 5,245 10% 6% 6% Total Assets 222,162 264,970 325,299 384,349 443,910 501,878 18% 15% 16% Current Liabilities 35,303 54,750 56,686 62,110 65,837 67,522 10% 6% 6% Deferred revenue 12,762 13,025 23,545 25,798 27,346 28,046 10% 6% 6% Trade payables 12,172 28,459 18,522 20,294 21,512 22,063 10% 6% 6% Other Current Liabilities 10,369 13,266 14,619 16,018 16,979 17,414 10% 6% 6% Class C shares 0 0 0 0 0 0 Deferred revenue 29,137 21,067 23,876 26,160 27,730 28,440 Others 0 LT Liabilities 29,137 21,067 23,876 26,160 27,730 28,440 10% 6% 6% Total Liabilities 64,440 75,817 80,562 88,270 93,567 95,962 10% 6% 6% Shareholders Equity 157,722 189,153 244,737 296,079 350,343 405,916 21% 18% 18% Capital 35 35 36 36.0 36.0 36.0 0% 0% 0% Share premium 369,864 372,131 375,296 375,296 375,296 375,296 Capital reserve -30,794 -30,326 -29,821 -29,821 -29,821 -29,821 Retained Earnings -178,888 -142,800 -99,087 -47,745 6,519 62,092 -52% -- -- Accum.CI -2,495 -9,887 -1,687 -1,687 -1,687 -1,687 0% 0% 0% Total Sh. Equity + Liabilities 222,162 264,970 325,299 384,349 443,910 501,878 18% 15% 16%

Consolidated Cash Flow Operating Cash Flow -156 46,723 35,338 82,791 77,795 77,809 134% -6% 30% Net Income 43,353 37,562 45,949 51,342 54,263 55,573 12% 6% 7% Depreciation/Amortization 10,229 13,442 16,215 22,155 22,804 21,940 37% 3% 11% Change in Working Capital -34,270 7,483 -15,807 9,608 944 394 -- -90% -- Others -19,468 -11,764 -11,019 -315 -216 -98 -97% -31% -79% Investing Cash Flow -14,062 -28,838 -27,452 -28,933 -22,225 -21,550 5% -23% -8% Purchase of PPE -581 -4,600 -206 -4,183 -2,875 -1,300 1931% -31% 85% Investment in joint revenue sharing equipment -13,481 -24,238 -24,588 -24,750 -19,350 -20,250 -83% -88% 362% Other (non-recurring) 0 -2,658 0 0 0 ------Financing Cash Flow 56,602 837 936 0 0 0 ------Shares issued (redeemed) 40,000 1,700 2,017 0 0 0 ------Share issuance costs -2,000 0 0 0 0 0 ------IPO proceeds 71,291 0 0 0 0 0 ------Others -52,689 -863 -1,081 0 0 0 Net Change in Cash 42,384 18,722 8,822 53,858 55,570 56,260 510% 3% 85% FX impact -15 -3,508 1,953 0.0 0.0 0.0 ------Cash at beginning of period 48,320 90,689 105,903 116,678 170,536 226,106 10% 46% 29% Cash at end of period 90,689 105,903 116,678 170,536 226,106 282,366 46% 33% 34% Source: Company data, Macquarie Research, June 2018

14 June 2018 9 Macquarie Research IMAX China Holdings Macquarie Quant View

The quant model currently holds a reasonably negative view on IMAX China Attractive Displays where the Holdings. The strongest style exposure is Profitability, indicating this stock is company’s ranked based on efficiently converting investments to earnings; proxied by ratios like ROE or s l the fundamental consensus

ROA. The weakest style exposure is Quality, indicating this stock is likely to t

n Price Target and have a weaker and less stable underlying earnings stream. e Macquarie’s Quantitative

a Alpha model. 263/336 d

u Two rankings: Local market Global rank in F (Hong Kong) and Global Media sector (Media) % of BUY recommendations 56% (5/9) Quant Local market rank Global sector rank Number of Price Target downgrades 1 Number of Price Target upgrades 1

Macquarie Alpha Model ranking Factors driving the Alpha Model A list of comparable companies and their Macquarie Alpha model score For the comparable firms this chart shows the key underlying styles and their (higher is better). contribution to the current overall Alpha score.

IMAX 0.7 IMAX

Television Broadcasts Ltd… -0.1 Television Broadcasts Ltd…

IMAX China Holdings -0.9 IMAX China Holdings

Alibaba Pictures Group -1.2 Alibaba Pictures Group

-100% -80% -60% -40% -20% 0% 20% 40% 60% 80% 100% -3.0 -2.0 -1.0 0.0 1.0 2.0 3.0 Valuations Growth Profitability Earnings Price Quality Momentum Momentum

Macquarie Earnings Sentiment Indicator Drivers of Stock Return The Macquarie Sentiment Indicator is an enhanced earnings revisions Breakdown of 1 year total return (local currency) into returns from dividends, changes signal that favours analysts who have more timely and higher conviction in forward earnings estimates and the resulting change in earnings multiple. revisions. Current score shown below.

IMAX IMAX -0.1

Television Broadcasts Ltd… Television Broadcasts Ltd… -1.5

IMAX China Holdings IMAX China Holdings 0.3

Alibaba Pictures Group NaN Alibaba Pictures Group

-3.0 -2.0 -1.0 0.0 1.0 2.0 3.0 -40% -30% -20% -10% 0% 10% 20% 30% 40% Dividend Return Multiple Return Earnings Outlook 1Yr Total Return

What drove this Company in the last 5 years How it looks on the Alpha model Which factor score has had the greatest correlation with the company’s A more granular view of the underlying style scores that drive the alpha (higher is returns over the last 5 years. better) and the percentile rank relative to the sector and market. ⇐ Negatives Positives ⇒ Normalized Percentile relative Percentile relative Price to Cash FY1 36% Score to sector(/336) to market(/587) Alpha Model Score -0.86 Price to Book LTM 34% Valuation -0.43 FCF Yield FY0 34% Growth -0.31 Price to Cash FY0 33% Profitability 0.25 Earnings Momentum -0.32 Operating Leverage NTM -28% Price Momentum -0.41 ROIC 12m Fwd -31% Quality -0.67 Capital & Funding 0.45 Sales Growth FY1 -33% Liquidity -1.27 Return on Assets NTM -35% Risk -0.79 Technicals & Trading -1.17 -40% -20% 0% 20% 40% 0 50 100 0 50 100 0 0 1 1

Source (all charts): FactSet, Thomson Reuters, and Macquarie Research. For more details on the Macquarie Alpha model or for more customised analysis and screens, please contact the Macquarie Global Quantitative/Custom Products Group ([email protected])

14 June 2018 10 Macquarie Research IMAX China Holdings

IMAX China Holdings (1970 HK, Neutral, Target Price: HK$27.77) Interim Results 2H/17A 1H/18E 2H/18E 1H/19E Profit & Loss 2017A 2018E 2019E 2020E

Revenue m 75 62 76 67 Revenue m 126 139 147 151 Gross Profit m 45 41 45 44 Gross Profit m 77 86 90 92 Cost of Goods Sold m 30 22 31 23 Cost of Goods Sold m 49 53 57 59 EBITDA m 43 42 46 44 EBITDA m 74 87 91 93 Depreciation m 8 11 11 11 Depreciation m 16 22 22 22 Amortisation of Goodwill m 0 0 0 0 Amortisation of Goodwill m 0 0 0 0 Other Amortisation m 0 0 0 0 Other Amortisation m 0 0 0 0 EBIT m 35 31 35 33 EBIT m 57 65 69 70 Net Interest Income m 0 0 0 0 Net Interest Income m 1 1 1 1 Associates m 0 0 0 0 Associates m 0 0 0 0 Exceptionals m -1 -1 -1 -1 Exceptionals m -2 -2 -2 -3 Forex Gains / Losses m 0 0 0 0 Forex Gains / Losses m 0 0 0 0 Other Pre-Tax Income m 0 0 0 0 Other Pre-Tax Income m 0 0 0 0 Pre-Tax Profit m 35 30 34 33 Pre-Tax Profit m 56 63 67 69 Tax Expense m -7 -7 -8 -7 Tax Expense m -12 -14 -15 -16 Net Profit m 27 23 26 25 Net Profit m 44 49 52 53 Minority Interests m 0 0 0 0 Minority Interests m 0 0 0 0

Reported Earnings m 27 23 26 25 Reported Earnings m 44 49 52 53 Adjusted Earnings m 28 24 27 26 Adjusted Earnings m 46 51 54 56

EPS (rep) 0.08 0.06 0.07 0.07 EPS (rep) 0.12 0.13 0.14 0.14 EPS (adj) 0.08 0.07 0.07 0.07 EPS (adj) 0.13 0.14 0.15 0.15 EPS Growth yoy (adj) % 47.6 35.6 -4.6 6.6 EPS Growth (adj) % 21.8 10.9 3.4 0.5 PE (rep) x 29.1 26.2 25.3 25.2 PE (adj) x 27.7 25.0 24.2 24.1

EBITDA Margin % 57.8 66.8 59.8 66.4 Total DPS 0.04 0.04 0.04 0.04 EBIT Margin % 46.9 49.0 45.2 49.8 Total Div Yield % 1.1 1.2 1.2 1.3 Earnings Split % 61.5 47.0 53.0 48.5 Basic Shares Outstanding m 357 357 364 371 Revenue Growth % 18.0 20.8 1.8 7.5 Diluted Shares Outstanding m 362 365 373 380 EBIT Growth % 44.8 37.7 -1.8 9.2

Profit and Loss Ratios 2017A 2018E 2019E 2020E Cashflow Analysis 2017A 2018E 2019E 2020E

Revenue Growth % 6.7 9.6 6.0 2.6 EBITDA m 74 87 91 93 EBITDA Growth % 20.7 18.6 4.2 1.8 Tax Paid m 0 0 0 0 EBIT Growth % 20.7 13.5 5.6 2.4 Chgs in Working Cap m -16 10 1 0 Gross Profit Margin % 61.2 61.8 61.3 60.9 Net Interest Paid m 0 0 0 0 EBITDA Margin % 58.2 62.9 61.9 61.4 Other m -22 -14 -14 -15 EBIT Margin % 45.3 46.9 46.8 46.7 Operating Cashflow m 35 83 78 78 Net Profit Margin % 36.3 37.1 36.9 36.9 Acquisitions m -0 -25 -19 -20 Payout Ratio % 31.5 30.0 30.0 30.3 Capex m -2 -4 -3 -1 EV/EBITDA x 15.5 13.0 12.8 12.8 Asset Sales m 0 0 0 0 EV/EBIT x 19.8 17.5 16.9 16.9 Other m -25 0 0 0 Investing Cashflow m -27 -29 -22 -22 Balance Sheet Ratios Dividend (Ordinary) m 0 0 0 0 ROE % 21.2 19.0 16.8 14.7 Equity Raised m 0 0 0 0 ROA % 19.4 18.3 16.6 14.9 Debt Movements m 0 0 0 0 ROIC % 53.9 39.2 42.3 43.7 Other m -1 0 0 0 Net Debt/Equity % -47.7 -57.6 -64.5 -69.6 Financing Cashflow m -1 0 0 0 Interest Cover x nmf nmf nmf nmf Price/Book x 5.1 4.2 3.7 3.2 Net Chg in Cash/Debt m 7 54 56 56 Book Value per Share 0.7 0.8 1.0 1.1 Free Cashflow m 33 79 75 77

Balance Sheet 2017A 2018E 2019E 2020E

Cash m 117 171 226 282 Receivables m 54 50 53 55 Inventories m 0 0 0 0 Investments m 0 0 0 0 Fixed Assets m 89 91 88 86 Intangibles m 0 0 0 0 Other Assets m 66 72 77 79 Total Assets m 325 384 444 502 Payables m 19 20 22 22 Short Term Debt m 0 0 0 0 Long Term Debt m 0 0 0 0 Provisions m 0 0 0 0 Other Liabilities m 62 68 72 74 Total Liabilities m 81 88 94 96 Shareholders' Funds m -129 -78 -23 32 Minority Interests m 0 0 0 0 Other m 374 374 374 374 Total S/H Equity m 245 296 350 406 Total Liab & S/H Funds m 325 384 444 502

All figures in USD unless noted. Source: Company data, Macquarie Research, June 2018

14 June 2018 11 Macquarie Research IMAX China Holdings Important disclosures: Recommendation definitions Volatility index definition* Financial definitions Macquarie - Australia/New Zealand This is calculated from the volatility of historical All "Adjusted" data items have had the following Outperform – return >3% in excess of benchmark return price movements. adjustments made: Neutral – return within 3% of benchmark return Added back: goodwill amortisation, provision for Underperform – return >3% below benchmark return Very high–highest risk – Stock should be catastrophe reserves, IFRS derivatives & hedging, expected to move up or down 60–100% in a year IFRS impairments & IFRS interest expense Benchmark return is determined by long term nominal – investors should be aware this stock is highly Excluded: non recurring items, asset revals, property GDP growth plus 12 month forward market dividend speculative. revals, appraisal value uplift, preference dividends & yield minority interests Macquarie – Asia/Europe High – stock should be expected to move up or Outperform – expected return >+10% down at least 40–60% in a year – investors should EPS = adjusted net profit / efpowa* Neutral – expected return from -10% to +10% be aware this stock could be speculative. ROA = adjusted ebit / average total assets Underperform – expected return <-10% ROA Banks/Insurance = adjusted net profit /average Medium – stock should be expected to move up total assets Macquarie – South Africa or down at least 30–40% in a year. ROE = adjusted net profit / average shareholders funds Outperform – expected return >+10% Gross cashflow = adjusted net profit + depreciation Neutral – expected return from -10% to +10% Low–medium – stock should be expected to *equivalent fully paid ordinary weighted average Underperform – expected return <-10% move up or down at least 25–30% in a year. number of shares Macquarie - Canada Outperform – return >5% in excess of benchmark return Low – stock should be expected to move up or All Reported numbers for Australian/NZ listed stocks Neutral – return within 5% of benchmark return down at least 15–25% in a year. are modelled under IFRS (International Financial Underperform – return >5% below benchmark return * Applicable to Asia/Australian/NZ/Canada stocks Reporting Standards). only Macquarie - USA Outperform (Buy) – return >5% in excess of Russell Recommendations – 12 months 3000 index return Note: Quant recommendations may differ from Neutral (Hold) – return within 5% of Russell 3000 index Fundamental Analyst recommendations return Underperform (Sell)– return >5% below Russell 3000 index return

Recommendation proportions – For quarter ending 31 March 2018 AU/NZ Asia RSA USA CA EUR Outperform 54.38% 58.90% 48.35% 43.91% 69.03% 45.26% (for global coverage by Macquarie, 3.69% of stocks followed are investment banking clients) Neutral 32.48% 27.88% 34.07% 48.73% 21.29% 38.95% (for global coverage by Macquarie, 3.07% of stocks followed are investment banking clients) Underperform 13.14% 13.21% 17.58% 7.37% 9.68% 15.79% (for global coverage by Macquarie, 0.39% of stocks followed are investment banking clients)

1970 HK vs HSI, & rec history

(all figures in HKD currency unless noted)

Note: Recommendation timeline – if not a continuous line, then there was no Macquarie coverage at the time or there was an embargo period. Source: FactSet, Macquarie Research, June 2018

12-month target price methodology 1970 HK: HK$27.77 based on a PER methodology Company-specific disclosures:

Important disclosure information regarding the subject companies covered in this report is available at www.macquarie.com/research/disclosures.

Date Stock Code (BBG code) Recommendation Target Price 20-Apr-2018 1970 HK Outperform HK$31.35 28-Feb-2018 1970 HK Outperform HK$28.60 21-Feb-2018 1970 HK Outperform HK$27.70 13-Oct-2017 1970 HK Outperform HK$30.00 04-Feb-2017 1970 HK Outperform HK$42.00

Target price risk disclosures: 1970 HK: Any inability to compete successfully in their markets may harm the business. This could be a result of many factors which may include geographic mix and introduction of improved products or service offerings by competitors. The results of operations may be materially affected by global economic conditions generally, including conditions in financial markets. The company is exposed to market risks, such as changes in interest rates, foreign exchange rates and input prices. From time to time, the company will enter into transactions, including transactions in derivative instruments, to manage certain of these exposures.

Analyst certification: We hereby certify that all of the views expressed in this report accurately reflect our personal views about the subject company or companies and its or their securities. We also certify that no part of our compensation was, is or will be, directly or indirectly, related to the specific recommendations or views expressed in this report. The Analysts responsible for preparing this report receive compensation from Macquarie that is based upon various factors including Macquarie Group Ltd total revenues, a portion of which are generated by Macquarie Group’s Investment Banking activities. General disclaimers: Macquarie Securities (Australia) Ltd; Macquarie Capital (Europe) Ltd; Macquarie Capital Markets Canada Ltd; Macquarie Capital Markets North America Ltd; Macquarie Capital (USA) Inc; Macquarie Capital Limited, Taiwan Securities Branch; Macquarie Capital Securities (Singapore) Pte Ltd; Macquarie Securities (NZ) Ltd; Macquarie Equities South Africa (Pty) Ltd; Macquarie Capital Securities (India) Pvt Ltd; Macquarie Capital Securities (Malaysia) Sdn Bhd; Macquarie Securities Korea Limited and Macquarie Securities (Thailand) Ltd are not authorized deposit-taking institutions for the purposes of the Banking Act 1959 (Commonwealth of Australia), and their obligations do not represent deposits or other liabilities of Macquarie Bank Limited ABN 46

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14 June 2018 13

Equities

Asia Research Head of Equity Research Emerging Leaders Technology Jake Lynch (Asia – Head) (852) 3922 3583 Jake Lynch (Asia) (852) 3922 3583 Damian Thong (Asia, Japan) (813) 3512 7877 David Gibson (Japan – Head) (813) 3512 7880 Kwang Cho (Korea) (822) 3705 4953 Allen Chang (Greater China) (852) 3922 1136 Conrad Werner (ASEAN – Head) (65) 6601 0182 Corinne Jian (Greater China) (8862) 2734 7522 Jeffrey Ohlweiler (Greater China) (8862) 2734 7512 Conrad Werner (ASEAN) (65) 6601 0182 Chris Yu (Greater China) (8621) 2412 9024 Automobiles, Auto Parts Bo Denworalak (Thailand) (662) 694 7774 Kaylin Tsai (Greater China) (8862) 2734 7523 Lynn Luo (Greater China) (8862) 2734 7534 Janet Lewis (China, Japan) (813) 3512 7856 Infrastructure, Industrials, Transportation Allen Yuan (China) (8621) 2412 9009 Patrick Liao (Greater China) (8862) 2734 7515 James Hong (Korea) (822) 3705 8661 Patrick Dai (China) (8621) 2412 9082 Verena Jeng (Greater China) (852) 3922 3766 Amit Mishra (India) (9122) 6720 4084 Eric Zong (China, Hong Kong) (852) 3922 4749 Daniel Kim (Korea) (822) 3705 8641 Kunio Sakaida (Japan) (813) 3512 7873 Abhishek Bhandari (India) (9122) 6720 4088 Banks and Financials James Hong (Korea) (822) 3705 8661 Farrah Aqlima (Malaysia) (603) 2059 8987 Scott Russell (Asia) (852) 3922 3567 Corinne Jian (Taiwan) (8862) 2734 7522 Telecoms Dexter Hsu (China, Taiwan) (8862) 2734 7530 Inderjeetsingh Bhatia (India) (9122) 6720 4087 Keisuke Moriyama (Japan) (813) 3512 7476 Azita Nazrene (ASEAN) (65) 6601 0560 Allen Chang (Greater China) (852) 3922 1136 Soyun Shin (Korea) (822) 3705 8659 Chan Hwang (Korea) (822) 3705 8643 Internet, Media and Software Suresh Ganapathy (India) (9122) 6720 4078 Prem Jearajasingam (ASEAN) (603) 2059 8989 Jayden Vantarakis (Indonesia) (6221) 2598 8310 Wendy Huang (Asia) (852) 3922 3378 Kervin Sisayan (Philippines) (632) 857 0893 Anand Pathmakanthan (Malaysia) (603) 2059 8833 Marcus Yang (Greater China) (8862) 2734 7532 Nathania Nurhalim (Indonesia) (6221) 2598 8365 Gilbert Lopez (Philippines) (632) 857 0892 David Gibson (Japan) (813) 3512 7880 Utilities, Renewables Ken Ang (Singapore) (65) 6601 0836 Soyun Shin (Korea) (822) 3705 8659 Alankar Garude (India) (9122) 6720 4134 Hiroyuki Sakaida (Japan) (813) 3512 6695 Basic Materials Patrick Dai (China) (8621) 2412 9082 Oil, Gas and Petrochemicals Polina Diyachkina (Asia, Japan) (813) 3512 7886 Inderjeetsingh Bhatia (India) (9122) 6720 4087 Yasuhiro Nakada (Japan) (813) 3512 7862 Aditya Suresh (Asia) (852) 3922 1265 Karisa Magpayo (Philippines) (632) 857 0899 Anna Park (Korea) (822) 3705 8669 Anna Park (Asia) (822) 3705 8669 Quantitative, CPG Sumangal Nevatia (India) (9122) 6720 4093 Polina Diyachkina (Japan) (813) 3512 7886 Jayden Vantarakis (Indonesia) (6221) 2598 8310 Yasuhiro Nakada (Japan) (813) 3512 7862 Gurvinder Brar (Global) (44 20) 3037 4036 Farrah Aqlima (Malaysia) (603) 2059 8987 Corinne Jian (Taiwan) (8862) 2734 7522 John Conomos (Asia) (612) 8232 5157 Ben Shane Lim (Malaysia) (603) 2059 8868 Alvin Chao (Asia) (852) 3922 1108 Conglomerates Yupapan Polpornprasert (Thailand) (662) 694 7729 Tracy Chow (Asia) (852) 3922 4285 YingYing Hou (Asia) (852) 3922 5422 David Ng (China, Hong Kong) (852) 3922 1291 Pharmaceuticals and Healthcare Conrad Werner (Singapore) (65) 6601 0182 Strategy, Country Gilbert Lopez (Philippines) (632) 857 0892 Corinne Jian (China) (8862) 2734 7522 Alankar Garude (India) (9122) 6720 4134 Viktor Shvets (Asia, Global) (852) 3922 3883 Consumer, Gaming Richardo Walujo (Indonesia) (6221) 259 88 369 David Ng (China, Hong Kong) (852) 3922 1291 David Gibson (Japan) (813) 3512 7880 Linda Huang (Asia) (852) 3922 4068 Property, REIT Zibo Chen (China, Hong Kong) (852) 3922 1130 Chan Hwang (Korea) (822) 3705 8643 Terence Chang (China, Hong Kong) (852) 3922 3581 Tuck Yin Soong (Asia, Singapore) (65) 6601 0838 Jeffrey Ohlweiler (Taiwan) (8862) 2734 7512 Sunny Chow (China, Hong Kong) (852) 3922 3768 David Ng (China, Hong Kong) (852) 3922 1291 Inderjeetsingh Bhatia (India) (9122) 6720 4087 Stella Li (China, Taiwan) (8862) 2734 7514 Kelvin Tam (China) (852) 3922 1181 Jayden Vantarakis (Indonesia) (6221) 2598 8310 Leon Rapp (Japan) (813) 3512 7879 Catherine Li (Hong Kong) (852) 3922 1161 Anand Pathmakanthan (Malaysia) (603) 2059 8833 Kwang Cho (Korea) (822) 3705 4953 Keisuke Moriyama (Japan) (813) 3512 7476 Gilbert Lopez (Philippines) (632) 857 0892 Amit Sinha (India) (9122) 6720 4085 Tomoyoshi Omuro (Japan) (813) 3512 7474 Conrad Werner (ASEAN, Singapore) (65) 6601 0182 Karisa Magpayo (Philippines) (632) 857 0899 Abhishek Bhandari (India) (9122) 6720 4088 Chalinee Congmuang (Thailand) (662) 694 7993 Aiman Mohamad (Malaysia) (603) 2059 8986 Find our research at Robert Pranata (Indonesia) (6221) 2598 8366 Kervin Sisayan (Philippines) (632) 857 0893 Macquarie: www.macquarieresearch.com Richardo Walujo (Indonesia) (6221) 2598 8369 Roy Chen (Singapore) (65) 6601 0760 Thomson: www.thomson.com/financial Denise Soon (Malaysia) (603) 2059 8845 Reuters: www.knowledge.reuters.com Bloomberg: MAC GO Factset: http://www.factset.com/home.aspx CapitalIQ www.capitaliq.com Email [email protected] for access

Asia Sales Regional Heads of Sales Regional Heads of Sales cont’d Sales Trading cont’d Miki Edelman (Global) (1 212) 231 6121 Paul Colaco (San Francisco) (1 415) 762 5003 Suhaida Samsudin (Malaysia) (603) 2059 8888 Amelia Mehta (Asia) (65) 6601 0211 Angus Kent (Thailand) (662) 694 7601 Michael Santos (Philippines) (632) 857 0813 Jeff Evans (Boston) (1 617) 598 2508 Ben Musgrave (UK/Europe) (44 20) 3037 4882 Chris Reale (New York) (1 212) 231 2555 Jeffrey Shiu (China, Hong Kong) (852) 3922 2061 Christina Lee (UK/Europe) (44 20) 3037 4873 Marc Rosa (New York) (1 212) 231 2555 Sandeep Bhatia (India) (9122) 6720 4101 Justin Morrison (Singapore) (65) 6601 0288 Thomas Renz (Geneva) (41 22) 818 7712 Sales Trading Daniel Clarke (Taiwan) (8862) 2734 7580 Tomohiro Takahashi (Japan) (813) 3512 7823 Adam Zaki (Asia) (852) 3922 2002 Brendan Rake (Thailand) (662) 694 7707 John Jay Lee (Korea) (822) 3705 9988 Stanley Dunda (Indonesia) (6221) 515 1555 Mike Keen (UK/Europe) (44 20) 3037 4905 Nik Hadi (Malaysia) (603) 2059 8888 Gino C Rojas (Philippines) (632) 857 0861

This publication was disseminated on 13 June 2018 at 16:06 UTC.