September 2, 2016 OUTPERFORM Asia Aviation (AAV TB) Share Price: Bt7.4 Target Price: Bt9.0 (+21.6%) Another fairy tale win for Leicester City owner Resume Coverage

 Hub-to-hub flights should lift margins; CASK is 4% lower than LCC peers’ average due to single-model fleet strategy  Expect earnings to grow at 43% CAGR over FY15-FY18F driven by larger passenger volume, capacity and margins  OUTPERFORM, TP Bt9.0/sh is based on 17x FY17 P/E; AAV will Krungsri Securities Research Team be a top beneficiary of rising Chinese tourist arrivals Teerapol UDOMVEJ Less competition in hub-to-hub flights leads to higher margins 662 - 659 7000 ext 5012 AAV, which owns 55% of Thai Air Asia (TAA), is now the leading low [email protected] cost carrier (LCC) in with 30% market share. It focuses on point-to-point domestic and international routes within 4-hours flight time Kitti PITAKTEERABANDIT from its six hubs: , Phuket, , Krabi, Pattaya and Assistant analyst Hatyai. These hub-to-hub flights command higher margins because it is less competitive than for routes from/to Bangkok. Cost per Available Key Data COMPANY RESEARCH | Seat Kilometer (CASK) is 4% lower than other Southeast Asia LCCs 12-mth High/Low (Bt) 7.80 / 4.24 because it uses one aircraft model (Airbus A320) and utilization is high Market capital (Btm/US$m) 35,890.0 / 1,035.8 (11.8 hours/day). We also believe that TAA can leverage on the strong 3m avg Turnover (Btm/US$m) 763.7 / 22 AirAsia branding and buy new aircraft through AirAsia Group at lower Free Float (%) 50 Issue Shares (m shares) 4,850 prices. The latter will ensure TAA to have higher margins than peers. Major shareholders: - BIJLEVELD PATTAREE 19.0 RPK growth will be driven by fleet expansion - BBL ASSET MGMT CO LT 14.6 We forecast Revenue Passenger Kilometers (RPK) will grow by 16% - BIJLEVELD SIRITORN 12.0 CAGR over FY15-FY18F with 83-84% load factor, driven by i) strong air Share Price Performance travel demand and rising tourist arrivals, especially from China, ii) fleet expansion to 71 aircraft by 2020, iii) a flexible fleet plan due to single aircraft model, and iv) new routes and higher flight frequency. We forecast ancillary revenue to rise by 17% CAGR over this period driven by higher passenger volumes and synergies from King Power group. The low fuel cost should expand net margin to 6% in FY17F from 4% in FY15. These would lead to 43% earnings growth over FY15-18F. 1% increase in load factor would lift earnings by 8.6%.

Offers strongest earnings growth among LCC peers

AAV is now trading at 13.7x FY17F PE, a premium to regional peers’ YTD 1Mth 3Mth 12Mth average of 12.7x. The premium is justified because it offers the Absolute (%) 41.0 12.1 18.4 72.1 strongest earnings growth (43% CAGR) over FY15-FY18F compared to Relative to index (%) 21.4 10.3 9.6 59.1 regional peers’ average of 29%. Rising Chinese tourist arrivals would also benefit AAV the most as it operates 87 flights per week to eleven Krungsri Securities vs Market major cities in China. There is potential upside from synergies with King Positive Neutral Negative Power Group after the latter's owner bought a controlling stake in AAV. Market Recommend 15 5 0 Financial Summary (Btm) Krungsri Market % +/- Year to Dec 2014 2015 2016F 2017F 2018F Target Price (Bt) 9.0 7.6 18.1 Sales (Btm) 26,149 30,464 35,099 41,058 48,878 ’16 Net Profit (Btm) 2,183 2,334 (6.5) Growth (%) 8 16 15 17 19 ’17 Net Profit (Btm) 2,614 2,483 5.3 EBITDA (Btm) 1,340 3,898 6,161 7,208 8,514 Growth (%) (53) 191 58 17 18 Krungsri's earnings revision Recurring profit (Btm) 113 1,283 2,183 2,614 3,126 Growth (%) -87 1,031 70 20 20 2016F 2017F Net profit (Btm) 183 1,078 2,183 2,614 3,126 Earnings revision (%) - - FDEPS (Bt) 0.04 0.22 0.45 0.54 0.64 Source: Bloomberg, Krungsri Securities Growth (%) (82) 489 102 20 20 PE (x) 316.2 28.0 16.4 13.7 11.5 DPS (Bt) 0.00 0.10 0.20 0.24 0.26 Yield (%) 0.0 1.3 2.7 3.2 3.5 BVPS (Bt) 4.03 4.15 4.50 4.84 5.24 P/BV (x) 1.8 1.8 1.6 1.5 1.4

Disclaimer: This publication constitutes information disclosed to the public and believed to be reliable but its accuracy and completeness are not guaranteed. All opinions, suggestions, or projections are for informational purposes only and shall not be construed as an inducement for the sale or purchase of securities. Amendments to this publication may be made without prior notice. Investors are urged to exercise caution in making a decision to invest in any securities. 1

Resume Coverage | AAV September 2, 2016

Background

Asia Aviation Public Company Limited (AAV) was incorporated in 2006 as a holding company to house its stake in Thai AirAsia Company Limited (TAA), a Low Cost Carrier (LCC). In 2012, AAV was listed on the Stock Exchange of Thailand with Bt485m paid-up capital. It used the Bt2.7bn IPO proceeds to subscribe to new shares in TAA, which increased its shareholding in TAA from 51% (pre-IPO) to 55%.

In June 2016, CEO Khun Tassapon Bijleveld sold 39% of his family’s stake in AAV for Bt7.9bn to Vichai Srivaddhanaphraba and his family members, who own King Power Group, Thailand’s leading duty-free retailer, and Leicester City Football Club.

Currently, TAA has a fleet of 49 aircraft and operates 1,019 flights per week to 48 destinations domestically and internationally. In 2015, 88% of TAA’s revenue came from passenger service, baggage handling and other service fees.

AAV : Route Network (as of Mar 2016)

Note: 6 hub cities, 20 domestic destinations, 10 city transfer routes and 11 island transfer routes Source: Company data

Krungsri Securities Research 2

Resume Coverage | AAV September 2, 2016

AAV: Revenue breakdown (2015) AAV: Passenger revenue by nationality (1Q16)

Freight, 0.7% Other , 3.1% In-flight, 1.1%

Baggage Other, 20% handling and other service, Indian, 2% 15.8% German, 2% Malaysian, Charter flight 2% Thai, 47% , 6.8% UK, 2% US, 2% Passenger service , Chinese, 72.5% 23%

Source: Company data, Krungsri Securities Source: Company data, Krungsri Securities

Why we like AAV

We resume coverage of AAV with an OUTPERFORM rating and TP of Bt9.0/sh. We like AAV for the following reasons:

1) Single-model fleet helps to optimize revenues and costs

TAA has a young fleet of 49 Airbus A320s (180 seats) with an average age of 4.6 years, and plans to expand its fleet to 71 aircraft by FY20 (adding 5 aircraft per year). It will take delivery of two new A320 NEO (New Engine Option) aircraft in 4Q16; this model can reduce fuel burn by 15% compared to the current engine option. By operating a single-model fleet, TAA benefits from economies of scale in parts and maintenance costs, pilot training and also from a flexible fleet plan.

AAV: Fleet types AAV: Average fleet age

5.0 4.4 4.5 4.5 4.0 3.7 3.5 3.0 2.5

2.0 1.5 1.0 0.5 0.0 2013 2014 2015

Source: Company data, Krungsri Securities Source: Company data, Krungsri Securities

Krungsri Securities Research 3

Resume Coverage | AAV September 2, 2016

2) Fuel costs should drop in FY16/17F

One of the major cost items for airlines is fuel expense, which accounted for 35% of TAA’s total expenses last year. Jet fuel price has fallen from an average of US$123/bbl in 2013 to US$50/bbl currently. Last year, TAA hedged 50% of its fuel requirement at an estimated price of US$88/bbl. This year, it will benefit from lower fuel prices as it has hedged c.70% of its requirement at c.US$56/bbl. We estimate actual average fuel cost after hedging at US$53/bbl in FY16F (vs. US$80/bbl in FY15). Currently, TAA has hedged 46% of FY17 fuel requirement at an average cost of US$55/bbl.

We assumed Brent crude oil prices would average US$46/bbl in FY16F and US$53/bbl in FY17F. Adding a crack spread of US$14/bbl, our jet fuel price assumptions are US$60/bbl and US$67/bbl for those years.

AAV: Fuel expenses AAV: Non-fuel expenses Btbn US$/bbl Btm (%) 3.5 130 4,000 0.3 3.2 3,779 3,800 3,728 2.9 120 3,654 3.0 21% 0.2 2.6 2.6 2.6 110 3,600 2.4 2.5 14% 2.3 2.5 3,400 3,280 0.2 100 10% 1.9 1.9 3,200 8% 2.0 90 0.1 3,000 5% 2,906 6% 6% 5% 2,808 2,849 1.5 80 0.1 2,800 70 2,600 1.0 -3% 0.0 60 2,330 2,400 2,255 0.5 -0.1 50 2,200 -8% 2,123

0.0 40 2,000 -0.1 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16

Fuel expenses (Bt bn) Average jet fuel price (US$/bbl) (rhs) Non-fuel expenses Operating margin (%)

Source: Company data, Krungsri Securities Source: Company data, Krungsri Securities

3) Most leveraged to rising Chinese tourist arrivals

The Department of Tourism, Thailand (DOT) announced that the number of international tourist arrivals had increased by 19.5% yoy to 17m ytd-July, mainly from China (30%) and Asean (26%). This has exceeded the DOT forecast of 7% yoy growth in 2016. Additionally, air travel penetration in China is still lower than in developed countries (e.g. it is only one-eighth of the US).

Chinese outbound tourism by destination (2015) Thailand Korea 7% 5% Japan 4% Taiwan 4% France 2% USA 2% Singapore 2% Vietnam 1% Malaysia 1% Russia 1% Others 71%

Source: Chinese National Tourism Administration

Krungsri Securities Research 4

Resume Coverage | AAV September 2, 2016

Foreign tourist arrivals growth in Thailand Chinese inbound tourism to Thailand

80% 71.14% Person 66.40% %yoy 70% 61.91% 1,202,000 187% 200% 60% 53.38% 180% 1,002,000 160% 50% 44.34% 121% 140% 802,000 117% 111% 115% 40% 107% 120% 30% 602,000 78% 100% 23.39% 18.76% 20.44% 16.24% 80% 20% 57% 12.82% 14.25% 10.00% 402,000 45% -0.07% 8.00% 8.00% 60% 10% 20.67% 18.74% 25% 29% 29% 15.94% -0.02% 20% 23% 16% 40% -2.98% 12.63% 12.27% 202,000 13% 11% 13% 12% 0% 0.83% 20% -6.54% 2,000 0% -10% -8.87% -5.95% -8.80% -20% Jul-16 Jul-15 Apr-16 Apr-15 Oct-15 Jan-16 Jan-15 Jun-16 Jun-15 Feb-16 Mar-16 Feb-15 Mar-15 Nov-15 Dec-15 Aug-15 Sep-15 May-16 2008 2009 2010 2011 2012 2013 2014 2015 2016F 2017F 2018F May-15 Chinese tourist Foreign tourist arrival Asean tourist Number of Chinese tourist in Thailand yoy growth (rhs)

Source: Krungsri Securities, Department of tourism, Thailand Source: Department of tourism, Thailand

We are confident AAV will meet its target cabin factor of 83% (+2 ppt yoy) in FY16. And passenger yield should remain at Bt1.63/km because it remains competitive and there is strong air travel demand for domestic and international routes. These would lift FY16F passenger revenue by 15% yoy, compared to 25% yoy growth in FY15. Passenger revenue should continue to grow in FY17-FY18F driven by higher Available Seat Kilometers (ASK) with the introduction of new routes, fleet expansion and greater flight frequency.

Passenger yield Cabin Factor RPK & Cabin factor 2.0 88% 4,500 90%

1.9 86% 4,000 87% 85%

83% 83% 83% 3,500 82% 80% 1.8 84% 81% 81% 82% 80% 3,000 78% 75% 1.7 82% 4,336 4,269 3,953 3,694 3,651 1.6 80% 2,500 3,057 2,855 2,957 3,550 3,574 70%

1.5 78% 2,000 65%

1.4 76% 1,500 60% 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 2014 2015 2016 RPKm (lhs) Cabin factor 2014 2015 2016 Source: Company data , Krungsri Securities

AAV: Aircraft utilization rate & ASK AAV: Expenses breakdown (2015)

m Seat (hour/aircraft/day) Depreciation, 10% 6,000 12.0 Aircraft rentals, 5%

5,000 11.5 11.5 11.5 11.5 11.5 11.5 11.5 Other, 5% Fuel and Oil, 34% 4,000 11.2 11.1 11.2 11.0 Marketing, 5% 3,000 10.7 4,967 3,822 4,967 10.5 3,667 4,378 4,436 4,410 4,445 4,826 2,000 3,553 Inventories, 4%

10.0 1,000

0 9.5 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 Available Seat-Kilometers (m) Aircraft Utilization (hour/aircraft/day) (rhs) Flight operations, 19% Salaries, 17% Source: Company data, Krungsri Securities Source: Company data, Krungsri Securities

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Resume Coverage | AAV September 2, 2016

4) Potential synergies between TAA and King Power Group

We see potential synergies which could help to increase TAA’s ancillary income and passenger traffic, especially from China. TAA can offer special discounts on duty-free products (for pick-up on-ground or onboard) exclusively to its passengers to stimulate traffic. TAA does not pay 15% of sales revenue to AOT if customers pick up their purchases onboard, and the savings can be used to subsidize King Power’s marketing cost. However, this remains a touchy, possibly regulatory, issue with AOT. Meanwhile, King Power Group’s strong relationship with Chinese customers could help to increase TAA’s traffic. It is difficult to quantify the synergies at this point but King Power Group should be able to leverage on its duty-free shops to launch promotions to Chinese tourists, which will lead to higher passenger volumes for TAA.

5) Several strategies to boost revenue

Domestic and regional routes from/to five secondary hubs generate high profit margins because there is less competition, and they could be an optional solution to Don Mueang Airport congestion problem. TAA currently encourages passengers to use city transfer service, connectivity service via Fly-thru, and value pack service (checked baggage, seat selection, and low-cost meals) which could boost both ticket and ancillary revenues. We forecast ancillary revenue will grow by 17% CAGR over FY15-FY18F.

AAV: Number of aircraft in each hub AAV: International route breakdown by country India Indonesia Laos 3% 2% 1% Chiang Mai, 4 Singapore Hong Kong 17% 9%

Phuket, 2

Malaysia Pattaya (U-Tapao), 2 10% China Krabi, 1 23% BKK, 39 Macau Hatyai, 1 11%

Myanmar Vietnam 9% Cambodia 7% 8% Source: Company data, Krungsri Securities Source: Company data, Krungsri Securities

6) Healthy balance sheet for future expansion

As of end 2Q16, AAV had low gearing at 0.3x net interest-bearing debt to equity. Most of its debt comprise of financial leases for aircraft. Out of its current fleet of 49 aircraft, 14 are under financial lease. A financial lease requires 10-30% down payment upon delivery, with the balance to be paid over the next 12 years. The installment life of the financial lease is equal to the life of the aircraft under operating lease. The higher portion of operating leases (35 aircraft) helps AAV’s earnings during the early years of new aircraft delivery because they incur lower expenses than financial leases.

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Resume Coverage | AAV September 2, 2016

We forecast AAV would incur Bt19bn capex over FY16-18F mainly for 2-4 new aircraft (c.US$44m/aircraft) each year. This would be funded by internal cash flow. Our forecast EBITDA for FY16F (Bt6.2bn), FY17F (Bt7.2bn) and FY18F (Bt8.5bn) is sufficient to fund this capex plan. We forecast AAV’s net interest-bearing debt to equity will drop gradually to 0.2x by FY18F.

Cashflow vs Capex Debt ratio Btm 1.4 1.2 1.2 1.1 1.1 1.1 9,000 8,514

8,000 7,208 1.0

7,000 6,161 0.8 6,000 5,000 0.6 0.5 3,898 0.4 4,000 7,200 7,381 0.4 0.4 0.4 0.3 3,000 4,610 0.2 0.2 2,000 0.2 0.2 1,000 3,310 0.0 0 2015 2016F 2017F 2018F 2015 2016F 2017F 2018F Capex EBITDA D/E ratio Interest bearing debt/Equity ratio Net D/E

Source: Company data, Krungsri Securities Source: Company data, Krungsri Securities

Passenger market share based on domestic flights during 4M16

35.0% 29.8% 30.0%

25.0% 20.3% 20.0% 18.7%

15.0% 11.1% 10.4% 9.2% 10.0%

5.0% 0.4% 0.1% 0.0% AAV NOK Thai Lion BA THAI Thai Kan Air Orient Smile Thai

Source: Company data, Krungsri Securities

7) TAA is very competitive in Southeast Asia LCC industry

TAA has a larger fleet (49 aircraft) and younger fleet (average 4.6 years) than peers, which means higher efficiency and lower maintenance cost. The single aircraft type strategy also reduces maintenance and inventory costs. As a result, TAA’s Cost per Available Seat Kilometer (CASK) is 4% lower than peers’ and 40% lower than its main competitor, . Having a higher load factor and lower CASK than peers indicates TAA is very competitive and has room to improve margins. These would lead to 27% EBITDAR margin which is higher than peers’ average of 26%.

Krungsri Securities Research 7

Resume Coverage | AAV September 2, 2016

Southeast Asia LCC Industry: Key statistics Fleet size Average Number of CASK (USD) Load Factor EBITDAR Margin (May 2016) Age PAX (m) 2014 2015 2014 2015 2014 2015 2014 2015 AirAsia Group 197 49.6 52.4 Malaysia AirAsia 81 5.8 22.1 24.3 3.94 2.81 78.8% 80.2% 32.2% 48.8% Thai AirAsia 49 4.6 12.2 14.8 5.04 4.20 80.5% 82.1% 19.2% 27.2% Indonesia AirAsia 23 5.7 7.9 6.1 4.85 3.87 78.4% 75.0% 10.2% 7.3% Cebu Pacific Group 49 5.0 17.5 18.6 5.21 4.01 79.1% 79.8% 33.3% 33.3% Citilink 38 4.5 7.6 9.4 5.68 4.78 80.2% 80.2% n.a. n.a. Nok Air 29 6.7 7.6 8.8 6.95 6.77 84.0% 84.0% 16.2% 17.6% Tiger Airways 23 5.1 5.3 5.1 4.58 4.24 83.3% 83.3% 9.7% 20.8% Average (simple) 42 5.4 11.5 12.4 5.18 4.38 80.6% 80.7% 20.1% 25.8% Source: CAPA; compiled by BTMU SRD Singapore

Southeast Asia LCC Industry: FY15 Cost structure (% of Revenue) Malaysia Thai Indonesia Cebu Pacific Nok Air Tiger Airways AirAsia AirAsia AirAsia Group

Total Revenue 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% Total Operating Expense 71.9% 92.7% 118.9% 82.8% 106.1% 97.8% Fuel 31.8% 33.2% 42.1% 31.3% 25.2% 31.5% Staff 12.1% 11.4% 13.4% 10.8% 12.9% 11.8% Aircraft Leasing 5.3% 14.0% 23.0% 7.1% 23.0% 12.8% Airport, Handling & Route Charges 10.9% 16.0% 16.3% 10.3% 10.4% 15.0% MRO 3.1% 7.9% 15.3% 9.3% 26.6% 15.1% Marketing & distribution 0.0% 0.0% 0.0% 4.6% 2.8% 3.7% Depreciation & Amortization 11.2% 3.7% 2.0% 9.0% 0.6% 5.9% Others -2.5% 6.5% 6.8% 0.4% 4.6% 2.0% Source: CAPA; compiled by BTMU SRD Singapore

Expect earnings to grow at 43% CAGR over FY15-FY18F

This would be driven by higher passenger volume, capacity expansion and wider margins. RPK will grow by 16% CAGR over FY15-FY18F with 83-84% load factor, driven by i) strong air travel demand and rising tourist arrivals, especially from China, ii) continuous fleet growth to 71 aircraft by 2020, iii) a flexible fleet plan due to single aircraft model, and iv) new routes and higher flight frequency (In 2013-15, it added 7- 13 new routes and 4-21 flights to existing destinations per year). Ancillary revenue is expected to rise by 17% CAGR driven by higher passenger volumes and synergies from King Power group. Net margin should expand to 6% in FY17F from 4% in FY15 because of lower fuel cost. These would lead to 43% earnings growth over FY15-18F (1% increase in load factor would lift earnings by 8.6%).

Valuation

Our TP is pegged to 17x FY17F P/E, higher than regional peers’ average of 12.7x. It also implies 1.9x FY17F P/BV, which is also higher than regional LCCs’ average of 1.6x. However, AAV deserves the premium valuation because it offers 35% ROE in FY16F (excluding gain on fair value of previously held equity interests) compared to only 14% average for regional peers. The key downside risk is higher fuel prices.

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Resume Coverage | AAV September 2, 2016

AAV: Key Assumptions 2015A 2016F 2017F 2018F Number of Aircraft 45 51 56 61

ASK growth (%) 17% 14% 16% 16% Cabin Factor (%) 81% 83% 83% 84% Passenger yield (Bt/km) 1.63 1.63 1.63 1.65

Ancillary revenue growth (%) -8% 15% 18% 19%

Jet fuel price (US$/bbl) 88 61 63 69

Capex (Btbn) 3,310 4,610 7,200 7,381 Source: Krungsri Securities

AAV: Route network expansion in 2016 Add frequencies New route 1Q16 Phuket-Wuhan Bangkok-Luang Prabang 2Q16 Hat Yai-Chiang Mai Hat Yai-Chiang Rai Hat Yai-Johor Bahru Chiang Mai- Khon Kaen-Hat Yai Bangkok-Kochi Bangkok-Shantou Chiang Mai-Changsha 3Q16 Bangkok-Udonthani Bangkok-Vientiane Hat Yai-Kuala Lumper Source: Company data, Krungsri Securities

LCC Peers: Earnings CAGR over FY15-FY18F Low-Cost Carriers CAGR (%) BB Ticker Name 2015-2018 AAV TB ASIA AVIATION PCL 43% NOK TB NOK AIRLINES PCL 33% AIRA MK AIRASIA BHD 25% CEB PM CEBU AIR INC 3% RYA ID RYANAIR HOLDINGS PLC 24% VAH AU VIRGIN AUSTRALIA HOLDINGS LT 45% Average (simple) 29% Source: Bloomberg, Krungsri Securities

P/E Band P/BV Band

Source: Bloomberg, Krungsri Securities Source: Bloomberg, Krungsri Securities

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Peer table Market PE P/BV EPS Div ROE Share Price Cap (x) (x) G% Yield (%) (%) Performance BB Ticker Name US$ 16F 17F 16F 17F 16F 17F 16F 16F 1M 3M 6M YTD Full-Service Carriers THAI TB INTERNATIONAL 1,953 26.1 16.7 1.8 1.6 (119.8) 55.8 0.0 12.6 20.4 81.3 162.7 237.0 BA TB CO LTD 1,509 19.2 16.6 1.7 1.6 50.7 15.7 3.3 8.5 10.2 2.5 6.0 7.8 SIA SP SINGAPORE AIRLINES LTD 9,210 16.1 16.6 0.9 0.9 (4.5) (2.7) 4.2 5.8 (3.9) (0.6) (7.7) (5.2) 293 HK CATHAY PACIFIC AIRWAYS 5,690 12.4 11.9 0.8 0.8 (40.7) 4.1 2.6 7.9 (11.7) (8.3) (12.3) (16.4) 670 HK CHINA EASTERN AIRLINES CO-H 11,957 6.3 6.4 1.1 1.0 55.1 (2.2) 1.9 18.4 (7.0) (5.0) 9.7 (10.0) 1055 HK CHINA SOUTHERN AIRLINES CO-H 9,303 6.0 5.8 1.0 0.9 73.2 2.9 3.7 16.7 (11.5) (1.9) 3.2 (23.9) 2610 TT CHINA AIRLINES LTD 1,592 8.5 9.6 0.8 0.8 2.5 (11.1) 1.5 9.0 (3.1) (11.5) (19.9) (22.9) 2618 TT EVA AIRWAYS CORP 1,893 9.1 10.5 1.1 1.0 1.3 (13.2) 1.2 12.0 0.3 5.7 (12.2) (16.2) 003490 KS KOREAN AIR LINES CO LTD 2, 239 N/A 7.7 1.2 1.0 84.3 459 0.0 (1.7) 19.3 26.6 34.4 24.7 020560 KS ASIANA AIRLINES 962 15.5 15.6 1.2 1.1 150.4 (0.5) 0.0 7.8 13.1 24.6 24.5 19.7 QAN AU QANTAS AIRWAYS LTD 5,069 5.7 5.9 1.6 1.4 17.0 (3.8) 6.6 30.4 3.2 5.5 (15.9) (20.0) Average (simple) 12.5 11.2 1.2 1.1 24.5 45.8 2.3 11.6 Low-Cost Carriers AAV TB ASIA AVIATION PCL 1,036 16.4 13.7 1.6 1.5 102.5 19.7 2.7 10.4 12.1 18.4 48.6 41.0 NOK TB NOK AIRLINES PCL 150 NA 19.6 1.6 1.5 (19.0) 145.1 0.0 (24.6) (6.7) 9.2 21.2 22.1 AIRA MK AIRASIA BHD 2,012 7.1 7.8 1.5 1.3 114.9 (9.1) 3.0 25.3 (1.0) 28.0 89.2 130.2 CEB PM CEBU AIR INC 1,555 7.5 8.6 2.2 1.8 120.5 (12.3) 1.9 30.9 5.5 27.8 47.8 47.3 RYA ID RYANAIR HOLDINGS PLC 17,145 11.4 10.3 3.4 2.6 (7.2) 10.8 0.0 34.0 4.3 (11.9) (13.6) (18.2) VAH AU VIRGIN AUSTRALIA HOLDINGS LT 1,372 20.5 16.1 1.0 1.0 (114.9) 27.3 0.0 7.5 (6.2) (26.2) (49.4) (50.5) Average (simple) 12.6 12.5 1.8 1.5 31.6 32.5 1.4 13.6 Average FSC and LCC 12.5 11.7 1.4 1.3 27.3 40.6 1.9 12.4 Source: Bloomberg, Krungsri Securities

Krungsri Securities Research 10

Resume Coverage | AAV September 2, 2016

P&L (Btm) 2Q15 3Q15 4Q15 1Q16 2Q16 Chg Chg QoQ YoY Sales 7,058 7,455 8,018 9,183 7,939 -14% 12% - Passenger revenue 5,777 6,129 6,352 7,517 6,457 -14% 12% - Other revenue 1,281 1,326 1,665 1,666 1,482 -11% 16% Expense (6,540) (6,969) (7,581) (7,131) (7,168) 1% 10% - Fuel and oil (2,426) (2,338) (2,490) (1,925) (1,935) 1% -20% - Non-fuel operating expenses (4,114) (4,631) (5,090) (5,205) (5,233) 1% 27% Operating Profit 518 486 437 2,052 771 -62% 49% Net other income (1) (0) 2 0 0 N/A -100% Interest income 0 0 0 0 0 N/A N/A Interest expense (128) (65) (37) (127) (109) -14% -15% Pretax profit 389 421 402 1,926 662 -66% 70% Income Tax 67 (21) (2) (90) 76 -184% 14% Associates 0 0 0 0 0 N/A N/A Minority interest (166) (77) (221) (824) (344) -58% 107% Profit after tax (pre-ex) 290 323 179 1,012 394 -61% 36% Extraordinaries (84) (231) 96 (2) 28 -1260% -134% - FX (84) (231) 96 (2) 28 -1260% -134% - Impairment 0 0 0 0 0 N/A N/A - Others 0 0 0 0 0 N/A N/A Reported net profit 206 92 275 1,009 423 -58% 105%

Shares out (end Q, m) 4,850 4,850 4,850 4,850 4,850 0% 0% Adjusted shares (m) 4,850 4,850 4,850 4,850 4,850 0% 0%

Pre-ex EPS 0.06 0.07 0.04 0.21 0.08 -61% 36% EPS 0.04 0.02 0.06 0.21 0.09 -58% 105%

Depreciation (281) (278) (293) (285) (287) 1% 2% EBITDA 800 764 729 2,338 1,058 -55% 32%

Key Ratios Operating profit margin (%) 7% 7% 5% 22% 10% EBITDA margin (%) 11% 10% 9% 25% 13% Net profit margin (%) 3% 1% 3% 11% 5% Source: Krungsri Securities

Krungsri Securities Research 11

Resume Coverage | AAV September 2, 2016

INCOME STATEMENT (Btm) 2014 2015 2016 F 201 7F 201 8F Turnover 26,149 30,464 35,099 41,058 48,878 Cost of sales (COGS) (22,884) (24,188) (26,200) (30,647) (36,550) Depreciation & amortization (824) (1,127) (1,365) (1,579) (1,873) Gross profit 2,442 5,149 7,535 8,833 10,456 S&A expense (1,925) (2,377) (2,739) (3,204) (3,814) Operating profit 517 2,771 4,795 5,629 6,641 Other operating income 0 0 0 0 0 EBIT 517 2,771 4,795 5,629 6,641 Interest expense (313) (457) (480) (464) (464) Interest income 0 0 0 0 0 Other income 0 0 0 0 0 Goodwill amortization 0 0 0 0 0 Pre-tax profit 204 2,314 4,315 5,165 6,177 Income tax on company & subsidiaries 1 (151) (345) (413) (494) Profit after tax 205 2,163 3,970 4,752 5,683 Minority interests (92) (880) (1,786) (2,138) (2,557) Share of associate net income 0 0 0 0 0 Preferred dividends 0 0 0 0 0 Recurring attributable net profit 113 1,283 2,183 2,614 3,126 Extraordinary items 70 (205) 0 0 0 Reported net profit 183 1,078 2,183 2,614 3,126

Shares in issue (Y/E, m) 4,850 4,850 4,850 4,850 4,850 Shares in issue (weighted avg. m) 4,850 4,850 4,850 4,850 4,850 EPS (before extraordinary items, Bt) 0.02 0.26 0.45 0.54 0.64 DPS (Bt) 0.00 0.10 0.20 0.24 0.26 DPS/EPS (%) 0 45 45 44 40

CASH FLOW (Btm) 2014 2015 2016F 2017F 2018F Operating profit 517 2,771 4,795 5,629 6,641 Other operating income 0 0 0 0 0 EBIT 517 2,771 4,795 5,629 6,641 Depreciation & amortization 824 1,127 1,365 1,579 1,873 EBITDA 1,340 3,898 6,161 7,208 8,514 Notional cash taxes on ungeared operations (71) (256) (441) (506) (587) Net change in working capital 489 (203) (403) 1,484 1,949 CAPEX (5,901) (3,310) (4,610) (7,200) (7,381) Operating free cashflow (OpFCF) (4,142) 129 706 985 2,496 Net interest income adjusted for tax impact (241) (352) (384) (371) (371) Net free cashflow (NetFCF) (4,383) (223) 322 614 2,125 Non-operating income (net of tax) 0 0 0 0 0 Equity income from associates 0 0 0 0 0 Investments 0 0 0 0 0 Net change in other assets/liabilities 210 207 0 0 0 Other items 1 (1) 0 0 0 Residual cashflow (RCF) (4,172) (17) 322 614 2,125

Dividends 0 (483) (483) (979) (1,151) Equity capital raised 0 0 0 0 0 Other items 130 (625) 0 (0) 0 Cashflow from financing 130 (1,108) (483) (979) (1,151)

Net change in cash (4,042) (1,125) (161) (365) 973 Net cash/(debt) at YS (2,214) (6,256) (7,382) (7,543) (7,908) Ending net cash /(debt) (6,256) (7,382) (7,543) (7,908) (6,935)

Increase/(decrease) in cash & equivalents (155) 1,292 (1,179) (365) 973 (Increase)/decrease in debt (3,882) (2,405) 1,000 0 0 NOPLAT (net op profit less adjusted tax) 446 2,515 4,354 5,123 6,054 Normalised OpFCF (est. maintenance CAPEX) 1,759 3,439 5,316 8,186 9,876 FCFE (free cashflow to equity) (290) 2,388 (678) 614 2,125

Krungsri Securities Research 12

Resume Coverage | AAV September 2, 2016

BALANCE SHEET (Btm) 2014 2015 2016F 2017F 2018F Cash & equivalents 6,298 7,591 6,412 6,047 7,020 A/C receivable 699 765 765 765 765 Inventory 97 94 102 119 142 Others 398 379 437 511 608 Total Current Assets 7,493 8,829 7,716 7,442 8,536 Property and equipment 16,033 18,216 21,461 27,083 32,590 Investments & associates 0 0 0 0 0 Other assets 2,283 2,088 2,088 2,088 2,088 Goodwill 23,693 23,693 23,693 23,693 23,693 Total Assets 49,502 52,827 54,958 60,306 66,907

Short-term debt 959 1,261 1,261 1,261 1,261 A/C payable 367 530 574 672 801 Other current liabilities 9,411 9,089 8,707 10,186 12,126 Total Current Liabilities 10,738 10,881 10,543 12,119 14,188 Long-term debt 11,591 13,693 12,693 12,693 12,693 Other liabilities 158 169 169 169 169 Total Liabilities 22,486 24,743 23,406 24,981 27,051

Share capital 485 485 485 485 485 Share premium 2,600 2,600 2,600 2,600 2,600 Revaluation surplus 0 0 0 0 0 Translation adjustment 0 0 0 0 0 Retained earnings 16,449 17,058 18,740 20,374 22,349 Total ordinary equity 19,534 20,143 21,825 23,459 25,434 Preferred equity 0 0 0 0 0 Minorities 7,482 7,941 9,727 11,866 14,423 Total equity & minorities 27,016 28,083 31,552 35,325 39,857

Accumulated depreciation 1,859 2,961 4,326 5,905 7,778 BV per ordinary share (Y/E, Bt) 4.03 4.15 4.50 4.84 5.24 Adjusted book value ps (Y/E, Bt) 4.03 4.15 4.50 4.84 5.24

RATIOS (%) 2014 2015 2016F 2017F 2018F Growth Turnover 8.3 16.5 15.2 17.0 19.0 EBITDA (53.4) 190.8 58.0 17.0 18.1 EBIT (79.1) 436.3 73.0 17.4 18.0 Net profit (82.4) 488.8 102.5 19.7 19.6 EPS pre extraordinary items (87.4) 1,030.7 70.1 19.7 19.6 EPS (diluted) (87.4) 1,030.7 70.1 19.7 19.6 DPS n/a n/a 102.7 17.6 9.4

Accounting ratios Cash profit margin 12.5 20.6 25.4 25.4 25.2 Gross profit margin 9.3 16.9 21.5 21.5 21.4 Operating profit margin 2.0 9.1 13.7 13.7 13.6 Net profit margin 0.7 3.5 6.2 6.4 6.4 Turnover/avg total assets (x) 0.6 0.6 0.7 0.7 0.8 ROA 0.4 2.1 4.1 4.5 4.9 ROE 0.9 5.4 10.4 11.5 12.8 S&A/turnover 7.4 7.8 7.8 7.8 7.8 Effective tax rate (0.6) 6.5 8.0 8.0 8.0

Operating performance EBITDA margin 5.1 12.8 17.6 17.6 17.4 EBIT margin 2.0 9.1 13.7 13.7 13.6 NOPLAT margin (NOPLAT/Turnover) 1.7 8.3 12.4 12.5 12.4 Asset turnover (Turnover/avg Op assets) 3.5 2.9 2.6 2.4 2.3 ROCE (NOPLAT/avg Op assets) 6.0 23.6 32.1 29.3 28.4 ROCE inc capitalised goodwill 1.4 11.2 17.1 12.4 13.5

Krungsri Securities Research 13

Resume Coverage | AAV September 2, 2016

EQUITY VALUATIONS (Bt) 2014 2015 2016F 2017F 2018F EPS 0.02 0.26 0.45 0.54 0.64 FDEPS 0.02 0.26 0.45 0.54 0.64 FDEPS growth (%) -87 1,031 70 20 20 DPS 0.00 0.10 0.20 0.24 0.26 BVPS 4.03 4.15 4.50 4.84 5.24 Adjusted BVPS 4.03 4.15 4.50 4.84 5.24 Free cashflow to equity (FCFE) per share (0.06) 0.49 (0.14) 0.13 0.44 Share price (Bt) – 7.40 PE (x) 316.2 28.0 16.4 13.7 11.5 PE (fully diluted, x) 316.2 28.0 16.4 13.7 11.5 PE/FDEPS growth (x) (3.6) 0.0 0.2 0.7 0.6 Yield (%) 0.0 1.3 2.7 3.2 3.5 P/BV (x) 1.84 1.78 1.64 1.53 1.41 P/ABV (x) 1.84 1.78 1.64 1.53 1.41 P/FCFE (x) (123.7) 15.0 (52.9) 58.4 16.9

ENTERPRISE VALUATIONS (Btm) 2014 2015 2016F 2017F 2018F Ordinary shares (m) 4,850 4,850 4,850 4,850 4,850 Share price (Bt) 4.30 5.25 7.40 7.40 7.40 Ordinary equity MV 20,855 25,463 35,890 35,890 35,890 MI & deferred taxes 7,482 7,941 9,727 11,866 14,423 Equity MV (adjusted ord) 28,337 33,403 45,617 47,756 50,313 Preferred equity 0 0 0 0 0 Debt 12,550 14,955 13,955 13,955 13,955 Enterprise Value 40,886 48,358 59,572 61,710 64,268 Net noncore assets 29,991 31,284 30,105 29,740 30,713 Core Enterprise Value (EV) 10,895 17,074 29,467 31,970 33,554

Turnover 26,149 30,464 35,099 41,058 48,878 EBITDA 1,340 3,898 6,161 7,208 8,514 EBIT 517 2,771 4,795 5,629 6,641 NOPLAT 446 2,515 4,354 5,123 6,054 OpFCF (4,142) 129 706 985 2,496 OpFCF (normalized) 1,759 3,439 5,316 8,186 9,876 Op (core) capital employed (CE) 9,574 11,754 15,402 19,539 23,098 Avg. core capital employed 7,385 10,664 13,578 17,470 21,319

Core EV Multiples EV/Turnover (x) 0.4 0.6 0.8 0.8 0.7 EV/EBITDA (x) 8.1 4.4 4.8 4.4 3.9 EV/EBIT (x) 21.1 6.2 6.1 5.7 5.1 EV/NOPLAT (x) 24.4 6.8 6.8 6.2 5.5 EV/OpFCF (x) (2.6) 132.4 41.7 32.4 13.4 EV/OpFCFnormalised (x) 6.2 5.0 5.5 3.9 3.4 EV/capital employed (YE, x) 1.1 1.5 1.9 1.6 1.5 EV/avg capital employed (x) 1.5 1.6 2.2 1.8 1.6

RISK MEASURES 2014 2015 2016F 2017F 2018F Equity multiplier (avg. total assets/avg. equity) 2.4 2.6 2.6 2.5 2.6 Net debt/equity & MI 0.2 0.3 0.2 0.2 0.2 Interest cover (x) Interest cover (EBIT & int.incl/int. expense) 1.7 6.1 10.0 12.1 14.3 NOPLAT/interest paid 1.4 5.5 9.1 11.0 13.1 Debt service (OpFCF/net interest paid) (13) 0 1 2 5 Short-Term Ratios (x) Current assets/current liabilities 0.7 0.8 0.7 0.6 0.6 Current assets less inventory/current liabilities 0.7 0.8 0.7 0.6 0.6 A/C receivable, days turnover 9.8 9.2 8.0 6.8 5.7 Inventory, days COGS 1.5 1.4 1.4 1.4 1.4 A/C payable, days COGS 5.9 8.0 8.0 8.0 8.0

Krungsri Securities Research 14

CG Rating 2015 Companies with CG Rating

ADVANC BAFS BCP BIGC BTS CK CPN DRT DTAC DTC EASTW EGCO GRAMMY HANA HMPRO INTUCH IRPC IVL KBANK KCE KKP KTB LHBANK LPN MCOT MINT MONO NKI PHOL PPS PS PSL PTT PTTEP PTTGC QTC RATCH ROBINS SAMART SAMTEL SAT SC SCB SCC SE-ED SIM SNC SPALI THCOM TISCO TKT TMB TOP VGI WACOAL

AAV ACAP AGE AHC AKP AMATA ANAN AOT APCS ARIP ASIMAR ASK ASP BANPU BAY BBL BDMS BKI BLA BOL BROOK BWG CENTEL CFRESH CHO CIMBT CM CNT COL CPF CPI CSL DCC DELTA DEMCO ECF EE ERW GBX GC GFPT GLOBAL GUNKUL HOTPOT HYDRO ICC ICHI INET IRC KSL KTC LANNA LH LOXLEY LRH MACO MBK MC MEGA MFEC NBC NCH NINE NSI NTV OCC OGC OISHI OTO PAP PDI PE PG PJW PM PPP PR PRANDA PREB PT PTG Q-CON QH RS S & J SABINA SAMCO SCG SEAFCO SFP SIAM SINGER SIS SITHAI SMK SMPC SMT SNP SPI SSF SSI SSSC SST STA STEC SVI SWC SYMC SYNTEC TASCO TBSP TCAP TF TGCI THAI THANA THANI THIP THRE THREL TICON TIP TIPCO TK TKS TMI TMILL TMT TNDT TNITY TNL TOG TPC TPCORP TRC TRU TRUE TSC TSTE TSTH TTA TTCL TTW TU TVD TVO UAC UT UV VNT WAVE WINNER YUASA ZMICO

2S AEC AEONTS AF AH AIRA AIT AJ AKR AMANAH AMARIN AP APCO AQUA AS ASIA AUCT AYUD BA BEAUTY BEC BFIT BH BIG BJC BJCHI BKD BTNC CBG CGD CHG CHOW CI CITY CKP CNS CPALL CPL CSC CSP CSS CTW DNA EARTH EASON ECL EFORL ESSO FE FIRE FOCUS FORTH FPI FSMART FSS FVC GCAP GENCO GL GLAND GLOW GOLD GYT HTC HTECH IEC IFEC IFS IHL IRCP ITD JSP JTS JUBILE KASET KBS KCAR KGI KKC KTIS KWC KYE L&E LALIN LHK LIT LST M MAJOR MAKRO MATCH MATI MBKET M-CHAI MFC MILL MJD MK MODERN MOONG MPG MSC MTI MTLS NC NOK NUSA NWR NYT OCEAN PACE PATO PB PCA PCSGH PDG PF PICO PL PLANB PLAT PPM PRG PRIN PSTC PTL PYLON QLT RCI RCL RICHY RML RPC S SALEE SAPPE SAWAD SCCC SCN SCP SEAOIL SIRI SKR SMG SOLAR SORKON SPA SPC SPCG SPPT SPVI SRICHA SSC STANLY STPI SUC SUSCO SUTHA SYNEX TAE TAKUNI TCC TCCC TCJ TEAM TFD TFI TIC TIW TLUXE TMC TMD TOPP TPCH TPIPL TRT TSE TSR TT UMI UP UPF UPOIC UREKA UWC VIBHA VIH VPO WHA WIN XO

Disclaimer The disclosure of the survey result of the Thai Institute of Directors Association ("IOD") regarding corporate governance is made pursuant to the policy of the Office of the Securities and Exchange Commission. The survey of the IOD is based on the information of a company listed on the Stock Exchange of Thailand and the Market for Alternative Investment disclosed to the public and able to be accessed by a general public investor. The result, therefore, is from the perspective of a third party. It is not an assessment of operation and is not based on inside information. The survey result is as of the date appearing in the Corporate Governance Report of Thai Listed Companies. As a result, the survey result may be changed after that date or when there is any change to the relevant information. Nevertheless, Krungsri Securities Public Company Limited does not confirm, verify, or certify the accuracy and completeness of such survey result.

Anti-corruption Progress Indicator 2015

Level 5: Extended BCP CPN GYT PE PM PPP PT PTT PTTGC SAT SCC THANI TOP

Level 4: Certified ADVANCAMANAH ASP AYUD BAFS BANPU BAY BBL BKI BLA BTS CFRESH CIMBT CNS CSL DCC DRT DTC EASTW ECL EGCO ERW FSS GCAP HANA HTC IFEC INTUCH IRPC IVL KBANK KCE KGI KKP KTB LANNA LHBANK MBKET MFC MINT MTI NKI PPS PSL PTG PTTEP SABINA SCB SINGER SIS SNC SNP SSF SSI SSSC SVI TCAP THCOM THRE THREL TISCO TMB TMD TNITY TOG TSTH

Level 3B: Established by Commitment and Polic y AAV AHC AIT AKR ARROW ASK BA BDMS BEC BJCHI CGH CHG CHOW CIG CITY CK CKP COLOR CWT EARTH EASON EPG F&D FANCY FIRE FMT FORTH GENCO GL GOLD GPSC GRAMMY HYDRO IRCP IT JCT KCM KWC LH LIT LOXLEY MACO MANRIN MATI MODERN MSC NOBLE NOK NPK NUSA OISHI OTO PAF PAP PATO PF PJW PLANB PLE POLAR PRG PTL Q-CON QTC RCI S11 SALEE SAM SAMART SAMTEL SAPPE SC SCP SFP SIM SLP SMT SPA SPORT SSC SST STEC STPI SUC SUTHA T TAE TBSP TCC TFD TGCI TGPRO THANA THIP TIW TK TMW TNDT TOPP TPC TPCH TPIPL TSR TT TYCN UAC UBIS UEC UMI UP UPF UT UV VPO WAVE WINNER YUASA

Level 3A: Established by declaration of intent ABC ACAP AGE AH ANAN AP APCS APURE AS ASIA ASIAN ASIMAR BIGC BROOK BWG CEN CENTEL CHARAN CHO CHOTI CM CNT COL CPF CPI CPL DELTA DEMCO DIMET DNA DTAC EA ECF EE EVER FPI GBX GC GFPT GLOW HMPRO HOTPOT ICC ICHI INOX INSURE IRC JAS JTS JUBILE KC KTC KYE LHK LPN LRH MAKRO MC MCOT MFEC MJD MONO MOONG NBC NDR NINE NMG NSI NTV OGC PACE PCSGH PDI PG PHOL PLAT PR PRANDA PREB PS QLT RATCH RML ROBINS ROJNA RWI SAMCO SCCC SCG SEAOIL SE-ED SENA SITHAI SMK SMPC SPALI SPC SPCG SPI SRICHA STANLY SUPER SYMC SYNEX SYNTEC TASCO TCMC TFI THAI TICON TKT TLUXE TMILL TMT TNL TPCORP TSTE TTCL TU TVI UOBKH UREKA VGI VNT WACOAL WHA ZMICO

Level 2 : Declared 2S ABICO AF AIRA AKP ALUCON AMARIN AMATA AOT APCO BEAUTY BFIT BH BKD BLAND BROCK BRR BSBM BTNC CCP CI CSC CSR CSS EFORL EPCO ESTAR FE FER FNS FVC GEL GLOBAL GUNKUL IEC IFS ILINK INET J JMT JUTHA K KASET KBS KCAR KKC KSL KTECH L&E LALIN LTX M MALEE MBAX MBK MEGA MILL MK MPG MTLS NCH NCL NNCL NPP OCC OCEAN PB PCA PDG PRINC PSTC PYLON QH ROCK ROH RP RPC S & J SGP SIAM SKR SMG SMIT SORKON SPACK SPPT SR SUSCO TAKUNI TEAM TF TIC TIP TIPCO TMC TMI TPA TPP TRT TRU TRUE TSC TSI TTW TVD TVO TVT U UKEM UNIQ UWC VIBHA VNG WIIK WIN XO

Level 1: Committed AEONTS AFC AJ AMC AQUA ARIP AUCT BAT-3K BIG BJC BOL CBG CCET CCN CGD CMR CPH CSP CTW DCON DRACO DSGT DTCI E EMC ESSO FOCUS FSMART GIFT GLAND GRAND GREEN HFT HTECH IHL ITD JSP KDH KTIS KTP LEE LST MAJOR MATCH MAX M-CHAI MDX MIDA ML MPIC NC NEP NWR OHTL PICO PK PL PPM PRAKIT PRECHA PRIN RAM RICH RS SANKO SAUCE SAWAD SAWANG SCN SEAFCO SF SHANG SIRI SMART SMM SOLAR SPG SPVI STA STAR SVH SVOA SWC TAPAC TC TCCC TCJ TCOAT TH TKS TNH TNPC TPAC TPOLY TRC TRUBB TSE TTA TTI TTL TTTM TWP TWZ UMS UPA UPOIC UTP UVAN VARO VI VIH VTE WG Disclaimer The disclosure of the Anti-Corruption Progress Indicators of a listed company on the Stock Exchange of Thailand, which is assessed by Thaipat Institute, is made in order to comply with the policy and sustainable development plan for the listed companies of the Office of the Securities and Exchange Commission. Thaipat Institute made this assessment based on the information received from the listed company, as stipulated in the form for the assessment of Anti-corruption which refers to the Annual Registration Statement (Form 56-1), Annual Report (Form 56-2), or other relevant documents or reports of such listed company . The assessment result is therefore made from the perspective of Thaipat Institute that is a third party. It is not an assessment of operation and is not based on any inside information. Since this assessment is only the assessment result as of the date appearing in the assessment result, it may be changed after that date or when there is any change to the relevant information. Nevertheless, Krungsri Securities Public Company Limited does not confirm, verify, or certify the accuracy and completeness of the assessment result."

Reference Level 5: Extended – Extension of the anti-corruption policy to business partners in the supply chain, and disclosure of any current investigations, prosecutions or closed cases Level 4: Certified – Audit engagement by audit committee or auditors approved by the office of SEC, and receiving certification or assurance by independent external assurance providers (CAC etc.) Level 3: Established – Carrying out preventive measures, risk assessment, communication and training for all employees, including consistent monitoring and review processes Level 3A: Established by declaration of intent, Level 3B: Established by Commitment and Policy Level 2: Declared – Public declaration statement to participate in Thailand's private sector Collective Action Coalition Against Corruption (CAC) or equivalent initiatives Level 1: Committed – Organization’s statement or board's resolution to work against corruption and to be in compliance with all relevant laws

Krungsri Securities Public Company Limited

Headquarters 898 Ploenchit Tower, 3rd Floor, Ploenchit Road, Lumpini Pathumwan, Bangkok 10330 Tel: 0-2659-7000 Fax: 0-2658-5699 Internet Trading: 0-2659-7777 Branches Emporium Nakhon Pathom 662 Emporium Tower, Fl. 10, Sukhumvit 24 Road 67/1 Ratchadamnoen Road, Tambol Phra Pathom Jaedee, Klongton, Klongtoey, Bangkok 10110 Amphur Muang, Nakhon Pathom 73000 Tel: 0-2695-4500 Fax: 0-2695-4599 Tel: 0-3427-5500-7 Fax: 0-3421-8989

Central Bangna Suphanburi 589/151 Central City Tower 1 Office, Fl. 27 249/171-172 Moo 5 Tambol Ta Rahad, Bangna-Trad Road, Bangna, Bangkok 10260 Amphur Muang, Suphanburi, 72000 Tel: 0-2763-2000 Fax: 0-2399-1448 Tel: 0-3550-1234 Fax: 0-3552-2449

Rama II Nakhon Ratchasima 111/917-919 Rama II Road, Smaedum, 168 Chomphon Road, Tambol Nai Muang, Bangkhuntien, Bangkok 10150 Amphur Muang Nakhon Ratchasima, Tel: 0-2895-9575 Fax: 0-2895-9557 Nakhon Ratchasima 30000 Tel: 0-4425-1211-4 Fax: 0-4425-1215 Vibhavadi-rangsit Bank of Ayudhya Public Company Limited Khon Kaen 123 Suntowers (B) Building, Vibhavadirangsit Road, 114 Sri Chan Road, Tambol Nai Muang, Jompol, Jatujak, Bangkok 10900 Amphur Muang, Khon Kaen 40000 Tel: 0-2273-8388 Fax: 0-2273-8399 Tel: 0-4322-6120 Fax: 0-4322-6180

Chonburi Chiang Mai 64/17 Sukhumvit Road, Tambol Bang Plasoi, 70 Chang Phuak Road, Tambol Sri Phum Amphur Muang, Chonburi 20000 Amphur Muang, Chiang Mai 50200 Tel: 0-3879-0430 Fax: 0-3879-0425 Tel: 0-5321-9234 Fax: 0-5321-9247

Hat Yai Branch Chiang Rai 90-92-94 Nipat U Tit Nueng Road,Tambol Hat Yai, 231-232 Thamalai Road, Tambol Wiang, Amphur Hat Yai, Songkhla 90110 Amphur Muang, Chiang Rai 57000 Tel: 0-7422-1229 Fax: 0-7422-1411 Tel: 0-5371-6489 Fax: 0-5371-6490

Phitsanulok 275/1 Phichaisongkram Road, Tambol Nai Muang, Amphur Muang, 65000 Tel: 0-5530-3360 Fax: 0-5530-2580

Central line: Analyst Team Sector Coverage 662-659-7000 E-mail Naphat Chantaraserekul, Head of Research Energy, Petrochemical, Strategy ext. 5000 [email protected] Kittisorn Pruitipat, CFA, FRM PropertyConstruction, ICT Materials, Contrator ext. 5019 [email protected] Jesada Techahusdin, CFA Banking, Consumer Finance, Insurance ext. 5004 [email protected] Sunthorn Thongthip Food,Insurance Transportation, Insurance Strategy ext. 5009 s [email protected] Worrapong Tuntiwutthipong Electronic, Automotive, Commerce ext. 5016 [email protected] Karun Intrachai RenewableMedia Energy ext. 5010 [email protected] Teerapol Udomvej Healthcare, Tourism ext. 5012 [email protected] Kitti Pitakteerabandit, Assistant Analyst Songklod Wongchai Investment Strategy ext. 5003 [email protected] Artit Jansawang Mid - Small cap, MAI ext. 5005 [email protected] Nalinee Praman, Assistant Analyst Mid - Small cap, MAI Apisak Limthumrongkul Technical ext. 5007 [email protected] Definition of Ratings Fax 662-658-5643

OUTPERFORM - Stocks with an expected capital gain above 10% in the next 12 months for small-caps, above 5% for big-caps NEUTRAL - Stocks with an expected capital gain between -10% and +10% in the next 12 months for small-caps, -5% to +5% for big-caps UNDERPERFORM - Stocks with an expected capital gain below 10% in the next 12 months for small-caps, below 5% for big-caps www.krungsrisecurities.com