John Keells Holdings PLC Equity Research Interim Update Q3 FY 15/16
Group's top line remained flat for 3QFY15 and recorded a 2% growth for 9MFY15. Group's quarterly PBT recorded 1% decline for QoQ while 9M PBT improved by 9% to LKR 13.13 bn. BUY However corresponding periods of the previous year included capital gains and thus the adjusted group PBT for the quarter and first nine months increased by 11% and 19%. LOLC SEC Valuation LKR 211.25 12M Tgt Price (excl.dividend) LKR 188.60 Share Price LKR 155.10 Accordingly JKH has been able to register improved financial performance for the periods Upside/(Downside) 36.20% concerned which was being mainly backed by improved performance of "Consumer Food & Risk Level Medium Retail(CR&R)". Thus we expect CF&R, Financial and Leisure segments to remain as key (refer page 8 for recommendation) growth drivers of JKH while transportation remains to be a cash cow for the group. Warrants Valuation W0023 Investment Considerations LOLC SEC Valuation LKR 7.50 Warrant Price LKR 17.00 Waterfront integrated resort development project (IR): We expect IR project to proceed as planned, despite expected completion time being shifted to end of 2019 due to unexpected Share Details delays in construction. We revised the valuation of IR project taking this completion delay, Bloomberg Ticker JKH SL increased cost of equity and recent share split into account. CSE Sector Diversified GICS Sector Industrials Market Cap (LKR Mn) 184,476 Consumer Food & Retail (CF&R) sector: Being the highest contributor to the group's Issued Quantity (Mn) 1,189 topline, CF&R segment 9MFY16 revenue recorded a growth of 21% to LKR 26 Bn while EBIT 30-day avg T/O (LKR Mn) 111.68 recorded an growth of ~ 85% to LKR 2.9 Bn. The growth is mainly due to improved volumes Beta (6 months) 1.18 of both Ceylon Cold Stores (CCS) and Keells Food Products (KFP) along with the strong Investment Fundementals performance in the retail business based on consumption growth (retail segment revenue of LKR Bn 12M Trail FY 16 (F) FY 17 (F) FY 18 (F) 9M grew by 20% to LKR 16.1 Bn). Revenue 91.1 94.7 101.7 113.8 Net Profit 14.8 12.7 15.3 17.9 We expect CCS and KFP to benefit from the proposed corporate tax reduction for the S/H's Equity 150.1 170.5 198.4 220.3 manufacturing sector from 28% to 15%. We believe that the sector will continue to see a Total Assets 218.1 259.8 314.9 361.8 upside which will be in line with consumption demand despite possible fiscal and monetary ROA(%) 6.6 4.9 4.9 5.0 tightening resulting lower spending and JKH will manage to reap benefits of it through ROE(%) 10.5 8.1 8.3 8.8 aggressive expansion plans. Accordingly we upgrade our revenue growth forecast up to 18% Price Multiples YoY for next three years. PE (X) 12.49 PBV (X) 1.23 Leisure sector: Despite 9M PBT decline of 18%, leisure sector became the highest Price to Sales (X) 2.03 contributor to group's profit. Performance dip in city hotels sector due to room supply glut, Divdend Yield (%) 4.39 low sales volumes from corporate and MICE segments, partial closure of Cinnamon Lakeside and recent political turmoil in Maldives led this profitability decline. However JKH's latest Price Behavior
addition to its city hotel portfolio 'Cinnamon Red' performed well while recording an average 210 LKR occupancy rate of 90% for the period under review. 190
We also expect leisure sector to benefit from rupee depreciation on the foreign currency 170 denominated revenue from Maldivian hotels (which accounts for 27% of the total leisure 150 sector revenue) and the foreign currency denominated revenue emanating within the 02/12/15 05/12/15 08/12/15 11/12/15 02/12/16 country. Further we expect the destination management business to continue its growth JKH Share Price ASI movement (adjusted to JKH base price) momentum in line with the increased tourist arrivals to Sri Lanka. Per Share Details as at 31.12.2015 (LKR) Earnings per share (trailing 12m) 12.42 Net Asset Value per share 126.38 Property sector: Construction of Residential Tower 1 & 2, Office complex and the Shopping Sales per share (trailing 12m) 76.55 mall of IR project are in progress while 90 out of 231 units of residential tower 1 have been Dividend Per Share (trailing 12m) 6.81 sold with the receipt of 35% of their value as the first instalment. We expect Crescat to Business Nature maintain our original estimate of 95%-100% occupancy and K-Zone malls to record 75%- JKH is a diversified business operating in Sri Lanka. Its 80% in short to medium term. Final instalment of 7th Sense sales have been received and businesses include food and beverage, transportation, accounted by 3QFY16 as per interim and thus we revised our original estimates of 7th Sense leisure, property development, banking, insurance and other sales receipts in our valuation. LKR 25000-30000 per unit per month is expected to be financial services, IT and tea and rubber plantations. received from apartments (Onthree 20, Crescat Residencies, 7th Sense, Monarch and Top Shareholder Details as at 31.12.2015 Emperor) as management fee. Broga Hill Investments Limited 10.40% Mr S. E Captain 10.10% Paints & General Industries Limited 7.70% Source:CSE, Bloomberg, LOLC SEC Research 12 February 16 Analyst (s): Gayan Rajakaruna|+94 117 880837|[email protected] , Hiruni Perera|+94 117 880809|[email protected] Recommendation Guidance, Important Disclosures and Analyst Certification: Page 08 Initiation Coverage: John Keells Holdings PLC | 12 February 16
Investment Consideration (cont…)
Transportation sector: Transportation segment PBT saw a 32% QoQ drop while recording 10% growth in last 9M concerned. However there is a 8% contribution decline from South Asia Gateway Terminals (SAGT) in last 9 months mainly due to losing out its business to Colombo International Container Terminal (CICT) due to capacity constraints coupled with global slow down of port activities during 2015. SAGT has seen a 16% volume decline during Jan-Aug 2015 &2014 as a result. Thus we slightly revise down SAGT's annual throughput capacity estimates to 85% from 90% while applying 2% medium term growth on its contribution to the Group due to possible business expansion opportunities arising from Hambantota port and East Container Terminal.
Steep reduction in global oil prices has resulted in contracting Lanka Marine Services (LMS) margins and thus JKH experienced a lower contribution from its bunkering business. LMS however maintains its market share and look forwards a capacity led growth in par with port expansion. Colombo port is currently witnessing a 5% YoY volume growth and we estimate LMS to maintain 5% top line growth in short term accordingly. LMS's operating margins are expected to be squeezed in short term based on oil price downturn, however sudden oil price upside due to unexpected geopolitical changes could have a significant positive impact on LMS's earnings. We expect LMS to maintain 4% operating income margin and 10% medium term growth of its revenue considering expected Colombo port expansion (doubling the port capacity by 2020) and possibilities of expanding bunkering business to Hambantota port.
Financial services sector: Operating income derived from Union Assurance PLC (UAL) for last 9 months was down by 20% due to 78% divestment of its general insurance business. However the performance of life insurance business seems to be inline with the expectations, with PBT of financial segment excluding the general insurance business recording 9% growth in Q3FY15. Accordingly we maintain a net premium annual growth of 8% for short to medium term considering low penetration of life insurance segment (0.48%) along with expected per capita income growth of the country. Cash proceeds received from UAL divestment was disbursed as a special dividend during the quarter and sector valuation was adjusted accordingly.
JKH's associate Nation Trust Bank (NTB) recorded a 14% loan book growth and 3% NIM for 9MFY15. However NTB’s NII declined 6% YoY to LKR 2.2bn, largely due to a 7% decline in interest income during 3QFY15 impacting the growth of profitability. The decline in interest income was attributed to the declining yields of the new disbursements, which put pressure on the interest margins. With on going interest rate hikes, we expect NTB to record a lower loan book growth than expected and incur a higher borrowing cost. Thus we slightly revised down our growth estimates of NTB for future years.
Other segments: IT sector revenue is largely depending on office automation business and there will be a negative impact on profit margins due to rupee devaluation. However the segment has been able to record a growth in volumes across three main product segments which is likely due to rapid change in consumer patterns together with the growing popularity of social media platforms. Thus we maintain our topline growth forecasts in short and medium term while revising the corporate tax rate of the segment from 22% to 30% as per budget 2016. Operating income of plantation and other businesses saw a 19% decline for last 9 months largely due to the negative performance of the plantation sector. Considering continuous decline of tea prices and increased cost of production we expect plantation sector will continue to generate negative returns for the Group.
Valuation
JKH has performed well in 9MFY16 with 5% earnings growth for its equity holders. JKH has been maintaining market leadership in key growth segments of the economy and we believe that JKH will continue to demonstrate improved performance specially in CF&R, Leisure and Financial segments in short to medium term. However we revised cost of equity to 13.34% considering the increased risk free rate which resulted a decline of our original valuation. We expect "Waterfront Integrated Resort Development Project" to continue as planned and to be completed by end of 2019. However due to completion delay and increased cost of equity, we have slightly revised down our valuation of the project.
We continue to use SOTP approach for our valuation and accordingly we revise down our valuation to LKR 211.25. Counter is trading at a discount to our valuation and thus we continue maintain our recommendation BUY for JKH.
Source:CSE, Bloomberg, LOLC SEC Research
2 | LOLC Securities Limited Initiation Coverage: John Keells Holdings PLC | 12 February 16
Financial snapshot of JKH performance
Graph 01: Quarterly Revenue and Profit Graph 02: Quarterly EBITDA margin
30,000 30 28 26 25,000 24 22 20,000 20 18 16 15,000 % 14
LKR Mn 12 10,000 10 8 6 5,000 4 2 - - 2015-Q4 2016-Q1 2016-Q2 2016-Q3 2015-Q4 2016-Q1 2016-Q2 2016-Q3
Revenue Profit EBITDA Margin
Source: Bloomberg Source: Bloomberg
Graph 03: ROA and ROE Graph 04: Gearing
12.00 18
11.00 17
10.00 16 % 15 % 9.00
8.00 14
7.00 13
6.00 12 2015-Q2 2015-Q3 2015-Q4 2016-Q1 2016-Q2 2016-Q3 2015-Q2 2015-Q3 2015-Q4 2016-Q1 2016-Q2 2016-Q3
ROA ROE Gearing: Total Debt/Equity Source: Bloomberg Source: Bloomberg
Graph 05: Segmental Revenue Breakdown Graph 06: Segmental Operating Income
10,000 2,500 9,000 8,000 2,000 7,000 1,500 6,000 5,000
1,000 LKR Mn LKR
LKR Mn 4,000 3,000 500 2,000 1,000 0 0 2015-Q2 2015-Q3 2015-Q4 2016-Q1 2016-Q2 2016-Q3 2015-Q2 2015-Q3 2015-Q4 2016-Q1 2016-Q2 2016-Q3 -500
Consumer Foods & Retail Leisure Transportation Consumer Foods & Retail Leisure Transportation Financial Services Information Technology Property Financial Services Information Technology Property Others Others
Source: Bloomberg Source: Bloomberg
2 | LOLC Securities Limited 3 | LOLC Securities Limited Initiation Coverage: John Keells Holdings PLC | 12 February 16
Valuation
We have taken into account a cost of equity of 13.34.% assuming a risk free rate of 8.34% and a risk premium of 5%. A risk premium of 5% have been taken due to the majority of shareholders of JKH being foreign shareholders which bears a lower opportunity cost of capital than local shareholders. We have taken different medium term growth rates and terminal growth rates for different sectors considering each sectors' growth potential. Our combined DCF/SOTP model values the counter at LKR 211.25. At the current share price, JKH is trading at forward PE of 12.65X and a forward PBV of 0.97X.
Table 1: Valuation Sensitivity Matrix
Risk Free Rate Share price in LKR 7.34% 7.84% 8.34% 8.84% 9.34% 3% 335 293 268 250 234 4% 268 250 234 222 211 5% 234 222 211 202 194 Risk 6% 211 202 194 187 181 Premium 7% 194 187 181 176 171
Source:CSE, Bloomberg, LOLC SEC Research Table 2: Contribution by segment to JKH's value per share
Equity Value (LKR Mn) LKR per share Contribution Mix Leisure 47,249 39.73 19% CF&R 45,339 38.12 18% Transportation 19,835 16.68 8% Property 17,732 14.91 7% Financial 16,876 14.19 7% IT 1,927 1.62 1% Other 11,604 9.76 5% Cash 31,830 26.76 13% Waterfront 58,868 49.49 23% Total NPV 251,259 211.25 Source:LOLC SEC Estimates Table 3: Peer Comparison Name Market Cap (USD Mn) PE (x) PBV (X) Dividend ROE %
John Keells Holdings Plc (Sri Lanka) 1281 12.33 1.23 4.39 10.50 Aitken Spence Plc (Sri Lanka) 233 11.04 0.95 2.42 8.94 Hemas Holdings Plc (Sri Lanka) 318 19.01 2.25 1.38 11.91 Hayleys Plc (Sri Lanka) 149 8.32 0.71 2.10 9.35 Beijing Enterprises Hldgs (Hong Kong) 5386 8.20 0.71 2.81 8.91 Yakult Honsha Co Ltd (Japan) 8210 27.27 2.56 0.57 9.89
Source:CSE, Bloomberg, LOLC SEC Research
Table 4: Valuation of JKH warrants in 2016 (using Black Scholes Pricing Model based on current trading price of JKH) Warrant 023 LOSEC Valuation - LKR 7.56
Current Trading Price - LKR 17.00
Expiration Date 12-Nov-16
Underlining parameters: - Exercise price of the options: W023 - LKR 170.62 - No. of periods to exercise in years: W0236 - 0.76 Yrs - Compounded risk free interest rate: 8.34% - Standard Deviation (annualised): 18%
Source:LOLC SEC Estimates
3 | LOLC Securities Limited 4 | LOLC Securities Limited Initiation Coverage: John Keells Holdings PLC | 12 February 16
Appendices
Table 5: Return comparison S&P SL 20 JKH ASI Index SPEN % Index 3 months -15.71 -10.32 -13.12 -10.80 6 months -19.68 -15.91 -20.85 -15.71 YTD -12.91 -8.87 -9.34 -14.58 1 year -18.58 -14.30 -20.14 -23.52 Source:CSE, Bloomberg Graph 07: Share Price Movement
40,000,000 Volume Price 300 SMAVG (50) SMAVG (100) 250 30,000,000 200
20,000,000 Rs
150 Volume 10,000,000 100
- 50
100 RSI (14) 75 50 25 0 2/12/13 8/12/13 2/12/14 8/12/14 2/12/15 8/12/15 2/12/16 Source:CSE, Bloomberg
Graph 08: PE Chart Graph 09: PBV Chart
25 3 2.5 20 2 15 1.5 10 1 5 0.5
0 0 2/12/13 8/12/13 2/12/14 8/12/14 2/12/15 8/12/15 2/12/16 02/12/13 08/12/13 02/12/14 08/12/14 02/12/15 08/12/15 02/12/16 PE ratio Highest Average Lowest PBV ratio Highest Average Lowest Source:LOLC SEC Estimates Source:CSE, Bloomberg Source:CSE, Bloomberg
Graph 10: Price per Sales Graph 11: Dividend Yield
3.5 5 3 4 2.5 3 2 2 1.5 1 1 Source:CSE, Bloomberg, LOLC SEC Research 0.5 0 2/12/13 8/12/13 2/12/14 8/12/14 2/12/15 8/12/15 2/12/16 0 2/12/13 8/12/13 2/12/14 8/12/14 2/12/15 8/12/15 2/12/16 JKH dividend yield Highest Average Lowest Price to Sales ratio Highest Average Lowest
Source:CSE, Bloomberg Source:CSE, Bloomberg
Graph 12: CSE PE Chart Graph 13: CSE PBV Chart
16 1.8 15 1.7 14 1.6 13 1.5 12 1.4 11 1.3 10 1.2 9 1.1 8 1 02/12/13 08/12/13 02/12/14 08/12/14 02/12/15 08/12/15 02/12/16 2/12/13 8/12/13 2/12/14 8/12/14 2/12/15 8/12/15 2/12/16
Source:LOLC SEC Estimates ASI PE ratio Highest Average Lowest ASI PBV ratio Highest Average Lowest
Source:CSE, Bloomberg Source:CSE, Bloomberg
4 | LOLC Securities Limited 5 | LOLC Securities Limited Initiation Coverage: John Keells Holdings PLC | 12 February 16
Table 6: Financial Summary Forecast Figures in LKR Mn (31st March) FY 14 FY 15 FY 16 (9M) FY 16 (E) FY 17 (F) FY 18 (F) Income Statement Revenue 89,256 91,582 68,384 94,724 101,750 113,836 Cost of Revenue -64,652 -66,191 -48,726 -68,798 -75,551 -84,587 Gross Profit 24,604 25,391 19,659 25,926 26,199 29,250 Operating Expenses -13,119 -12,678 -10,453 -13,938 -14,085 -15,759 Operating Income 10,438 12,075 7,885 12,048 12,434 14,030 Net Non-Operating Gains (Losses) 4,960 7,000 5,249 6,998 7,768 9,368 Pretax Income 15,399 19,075 13,134 19,047 20,202 23,398 Net Profit att. to shareholders 11,719 14,348 9,548 12,731 15,292 17,930
Balance Sheet Cash & Near Cash Items 5,955 4,511 4,756 5,211 8,670 10,456 Short term investments 54,553 67,541 70,765 75,854 84,283 101,139 Accounts & Notes Receivable 10,389 10,270 8,920 15,162 12,977 14,147 Inventories 6,966 5,589 4,792 8,002 5,703 6,490 Total Current Assets 83,188 90,493 92,025 107,021 115,541 137,704 Total Long-Term Assets 119,286 127,593 75,982 152,785 199,379 224,070 Total Assets 202,474 218,086 232,966 259,806 314,920 361,774 Accounts Payable 10,346 11,267 10,705 13,093 13,325 14,882 Other Short-Term Liabilities 24,024 23,905 12,659 31,589 37,073 37,253 Total Current Liabilities 34,369 35,172 23,363 44,682 50,397 52,136 Total Long-Term Liabilities 33,594 32,837 45,984 44,580 66,164 89,328 Total Liabilities 67,963 68,009 69,347 89,263 116,561 141,464 Share Capital 49,749 50,703 58,700 58,673 67,252 67,252 Retained Earnings & Other Equity 84,761 99,374 104,920 111,871 131,108 153,059 Total Equity 134,510 150,077 163,619 170,543 198,359 220,310 Total Liabilities & Equity 202,474 218,086 232,966 259,806 314,920 361,774
Figures in LKR Mn FY 14 FY 15 FY 16 (9M) FY 16 (E) FY 17 (F) FY 18 (F) Cashflow Statement Net Income 11,719 14,348 9,548 12,731 15,292 17,930 Depreciation & Amortization 3,533 3,715 2,881 3,325 3,403 3,557 Changes in Non-Cash Capital (6,889) (1,169) 2,321 (12,552) 2,129 1,354 Cash From Operations 8,363 20,855 12,962 3,503 20,824 22,841
Capital Expenditures (3,605) (2,734) (3,035) (19,722) (19,579) (2,527) Increase/Decrease in Investments (16,357) 1,479 (6,372) (6,722) (27,045) (39,021) Cash From Investing Activities (19,962) (1,255) (9,407) (26,444) (46,625) (41,548)
Dividends Paid (3,267) (4,269) (6,848) (3,241) (3,893) (4,565) Change in Short-Term Borrowings 7,898 2,871 (1,467) 7,536 7,511 7,135 Change in long term borrowings (1,571) (4,390) (3,855) 11,376 17,064 17,923 Change in Capital Stocks 23,041 951 7,929 7,970 8,579 - Change in other finance activities (722) - (967) - - - Cash from Financing Activities 25,378 (4,838) (5,209) 23,641 29,260 20,493 Net Changes in Cash 13,779 14,762 (1,653) 700 3,459 1,786
Opening Cash Balance 3,555 5,955 4,964 4,511 5,211 8,670 Closing Cash Balance 5,955 4,511 4,756 5,211 8,670 10,456
Source:CSE, Bloomberg, LOLC SEC Research
5 | LOLC Securities Limited 6 | LOLC Securities Limited Initiation Coverage: John Keells Holdings PLC | 12 February 16
Table 7: Forecast Ratios FY 14 FY 15 FY 16 (9M) FY 16 (E) FY 17 (F) FY 18 (F) Profitability Ratios GP Margin (%) 28% 28% 29% 27% 26% 26% NP Margin (%) 13% 16% 14% 13% 15% 16% ROE (%) 10% 10% 6% 8% 8% 9% ROA (%) 6% 7% 4% 5% 5% 5% Earnings per share (LKR) 12.66 14.44 8.03 10.70 12.34 14.46 Dividend per Share (LKR) 3.50 3.50 5.76 2.73 3.27 3.84
Credit Ratios Debt/Equity Ratio (%) 25% 22% 28% 26% 33% 41% Interest Coverage (X) 9 18 26 30 25 27 Total Assets/Equity (X) 1.5 1.5 1.4 1.5 1.6 1.6 Net Debt/EBIT (X) -4.1 -5.3 -7.1 -5.1 -4.5 -4.0
Liquidity Ratios Current Ratio (X) 2.4 2.6 3.9 2.4 2.3 2.6 Quick Ratio (X) 2.2 2.4 3.7 2.2 2.2 2.5 Asset Turnover Ratio (X) 0.4 0.4 0.3 0.4 0.3 0.3 Net Asset Value per share (LKR) 123.2 138.2 126.4 143.4 160.0 177.7
Growth Ratios Revenue Growth YOY% 5% 3% 2% 3% 7% 12% Earnings growth YOY% -3% 21% 5% -10% 18% 16% Total Assets YOY% 27% 8% 8% 19% 21% 15% Total Debt YOY% 17% 0% 22% 131% 131% 121%
Investment Ratios PE Ratio (X) 18.02 13.81 19.32 14.49 12.57 10.72 Price to Book Value (X) 1.83 1.44 1.23 1.08 0.97 0.87 Dividend Yield (%) 1.47% 1.49% 3.71% 1.76% 2.11% 2.47%
Source:CSE, Bloomberg, LOLC SEC Research
Source:CSE, Bloomberg, LOLC SEC Research
6 | LOLC Securities Limited 7 | LOLC Securities Limited Initiation Coverage: John Keells Holdings PLC | 12 February 16
Recommendation Guidance
BUY – expected return > 10% in excess of benchmark return SELL – expected return less than benchmark return HOLD – expected return between 0% and 10% in excess of benchmark return Investment Horizon: 3 years
12 months target price (12M Tgt Price) is based on the expected capital appreciation of the share excluding dividend.
Benchmark Interest Rate: Average Weighted Fixed Deposit Rate (AWFDR) published by Central Bank of Sri Lanka.
Risk Level Evaluation
High: Maximum price volatility to be up or down more than 50% monthly Medium: Maximum price volatility to be up or down between 25% - 50% monthly. Low: Maximum price volatility to be up or down less than 25% monthly. Risk Level is calculated taking the historical standard deviation measures.
Financial Glossary
EPS = Earnings per Share ROA = Return on Assets (adjusted net profit/average total assets) ROE = Return on Equity (adjusted net profit/average total equity) CAGR = Compound Annual Growth Rate ((End Value/Start Value) ^ (1/number of years) -1) GP= Gross Profit EBITDA= Earnings before interest, tax, depreciation and amortization PBT= Profit before tax PAT= Profit after tax NP= Net Profit PBV= Price to book value ratio PE= Price to earnings ratio T/O = Turnover Source:CSE, Bloomberg, LOLC SEC Research Analyst certification: The Analyst(s) who is/are responsible for compiling or co-compiling this research and whose names appear as the analyst(s) of the research certify that the views expressed in this research accurately reflect the personal view of the analyst(s) about the subject securities and issuers and/or other subject matter as appropriate and has taken reasonable care to achieve and maintain independence and objectivity in making any recommendations. No part of the compensation received by the analyst(s) was, is or will be directly or indirectly related to specific inclusion of specific recommendation or views in this research. On a general basis analyst’s performance appraisal may be influenced by quality of the content and efficacy of the research. The analyst(s) who is/are responsible for compiling or co-compiling this research and whose names appear as the analyst(s) receive compensation based on overall revenues of LOLC Securities Limited and its holding company (Lanka ORIX Company PLC – LOLC Group), which may include brokerage revenue from transactions involved with the securities mentioned in this research.
General Disclaimer: LOLC Securities Limited is a company incorporated in Sri Lanka and licensed by the Securities and Exchange Commission of Sri Lanka to operate as a stockbroker/stock dealer in Sri Lanka. LOLC Securities Limited is a trading member of Colombo Stock Exchange. This research is based on information from sources that LOLC Securities Limited believes to be reliable. Whilst reasonable care has been taken to ensure accuracy of the information presented in the research, LOLC Securities Limited does not give a guarantee on the accuracy of the information presented in the paper nor will take the responsibility on investment decisions taken based on the information provided by the research and hence LOLC Securities Limited nor its employees accepts any liability whatsoever for any loss arising from investments decisions taken using the information provided in this paper. The reader also should note this paper does not give recommendations to any particular category of investors and investor should consult investment advisors for further clarifications regarding risks involved in investing in equity market. Investing in securities has inherent risks with no guaranteed return and price may be subjected to significant volatilities. No part of this report should be considered as a solicitation to buy or sell any security or product or to engage in or refrain from engaging in any transaction. LOLC Securities Limited or its employees may or may not hold positions in the securities discussed in the research and the information provided in the research should not be construed as a buy or sell instruction for any securities mentioned in the research, Unless otherwise specifically mentioned. This research is intended for general use for clients of LOLC Securities Limited and must not be copied in whole or in part or distributed to any third party for commercial use without permission from LOLC Securities Limited. If the reader is not the intended recipient please inform LOLC Securities Limited immediately by return email to [email protected]. LOLC Securities Limited’s other staff including sales people, traders and other professionals may provide oral or written market commentaries or trading strategies to our clients which reflect opinions which are contrary to the opinions expressed in this research which may be influenced by different circumstances.
7 | LOLC Securities Limited 8 | LOLC Securities Limited Initiation Coverage: John Keells Holdings PLC | 12 February 16
LOLC Securities Limited
LOLC Securities Limited, a trading member of the Colombo Stock Exchange (CSE), is engaged in facilitating stock trading transactions at Colombo Stock Exchange, providing investment research on Sri Lankan equity, providing investment planning advices with services such as portfolio construction & formulation of IPS (Investment Policy Statement) and facilitating other investment opportunities in the country including private equity.
General Line: +94 11 7880880 General Email: info@ lolcsecurities.com Research Email: research@ lolcsecurities.com Website: www.lolcsecurities.com
SALES Head Office Sriyan Gurusinghe Managing Director / CEO 011 7880888 / 077 7891871 sriyang@ lolcsecurities.com Manjula Kumarainghe COO - Sales & Marketing 011 7880808/077 7874310 [email protected] Maniesh Rodrigo Sales Assistant General Manager 011 7880805 / 077 7896064 manieshr@ lolcsecurities.com Samadhi Jayasinghe Manager Institutional Sales 011 7880806 / 077 3954993 samadhij@ lolcsecurities.com Imesh Fernando Assistant Manager Sales 011 7880814 / 077 3954992 imeshf@ lolcsecurities.com Balendiran Janegan Senior Investment Advisor 011 7880811 / 077 5619827 janeganb@ lolcsecurities.com Naleen Sadeesh Investment Advisor 011 7880839 / 077 2383209 naleensa@ lolcsecurities.com Damith Chaminda Investment Advisor 011 7880819 / 077 3367313 damithc@ lolcsecurities.com Dushan Rajaguru Investment Advisor 011 7880834 / 077 9090511 dushanr@ lolcsecurities.com Asendra Wijesiri Investment Advisor 011 7880833 / 077 3410627 asendraw@ lolcsecurities.com Dinuka Niwantha Investment Advisor 011 7880838 / 077 3367313 dinukan@ lolcsecurities.com Niraj Jayamanne Investment Advisor 011 7880813 / 0775 965645 nirajj@ lolcsecurities.com Rehan Ariyaratne Business Development Associate 011 7880831 / 076 5446255 rehana@ lolcsecurities.com
Kurunegala Branch Rohana Chandrasiri Assistant General Manager 037 7201221 / 077 3623001 rohanac@ lolcsecurities.com Anurudda Rajakaruna Investment Advisor 037 7201221 / 077 3409464 anuruddhar@ lolcsecurities.com Nuwan Fernando Investment Advisor 037 7201221 / 077 8365921 nuwanfe@ lolcsecurities.com Bandula Senarathne Investment Advisor 037 7201221 / 076 8743157 [email protected]
Galle Branch Bimal Malinda Branch Head 091 7200852/ 077 3409243 bimalm@ lolcsecurities.com Ushan De Silva Investment Advisor 091 7200852/ 077 1927998 [email protected] Thilina Sameera Investment Advisor 091 7200852/ 077 8894698 [email protected]
Matara Branch Lalinda Liyanapathirana Investment Advisor 041 4936079/ 077 3692257 lalindal@ lolcsecurities.com Ahamed Aadil Investment Advisor 041 4936079/ 077 7538986 aadila@ lolcsecurities.com Malith Jayawardane Investment Advisor 041 4936079/ 076 6843569 [email protected]
RESEARCH Shehan Bartholomeuz Head of Research 011 7880835 / 077 7699148 shehanb@ lolcsecurities.com Gayan Rajakaruna Senior Research Analyst 011 7880837 / 077 4469070 gayanraj@ lolcsecurities.com Hiruni Perera Associate Research Analyst 011 7880809 / 077 0652797 hirunipe@ lolcsecurities.com
Head Office Kurunegala Branch Galle Branch Matara Branch LOLC Securities Limited No 06, 1st Floor, No 18, 1st floor, Level 18, West Tower, Union Assurance Building, Sri Dewamitta Mawatha, E.H. Cooray Towers, World Trade Center Rajapilla Mawatha Galle No 24, Anagarika Dharmapala Mw. Colombo 01 Kurunegala, Sri Lanka Matara Sri Lanka Sri Lanka Tel : +94 773 409243 Sri Lanka Tel: +94 11 7880880 Tel: +94 377 201221 Tel: +94 414 936079 Fax: +94 11 2434771 Fax: +94 372 225511
LOLC SEC Research Reports are also available at Bloomberg LOLC
8 | LOLC Securities Limited 9 | LOLC Securities Limited