1,127

July 31, 2018

PVR (PVRL IN) BUY [Prior:HOLD] Share Price INR 1,127 1Q beat due to F&B 12m Price Target INR 1,450 (+29%)

Previous Price Target INR 1,450

Too cheap to ignore; U/G to BUY; TP/forecasts Company Description unchanged PVR Ltd. is a film entertainment and exhibition company, which operates multiplex cinema halls and 1Q EBITDA was +20% YoY and 18% above our forecast mainly due to a is engaged in film production business. +23% YoY in F&B revenue. We maintain our FY19-21 forecasts as the footfalls per screen remained flat. Hence our TP of INR1,450 remains unchanged, based on 13x FY20E EV/EBITDA; 25% and 1SD below its 5-year Statistics average of 17x. PVRL corrected 18% in the last month and it’s trading at 52w high/low (INR) 1,531/1,103 an attractive 10x FY20E EV/EBITDA on concerns the government will 3m avg turnover (USDm) 9.4 regulate F&B prices in cinemas. Catalyst could come from better content Free float (%) 52.0 Issued shares (m) 47 leading to higher footfall and dismissal of potential F&B regulations in Market capitalisation INR52.7B

ConsumerDiscretionary cinemas. USD767M Flat ticket prices; Need more evidence on footfall Major shareholders: Multiples Alternate Asset Management Pvt 12.3% 1Q ticket sales were 55% of total revenue and the rest was from high- BIJLI AJAY 11.3% margin ads, F&B sales and others. Ticket sales increased 12% YoY due to KUMAR SANJEEV /PVR/ 8.0% an 8% rise in footfalls which was backed by new screen additions. Ticket Price Performance prices were flat YoY. We forecast +12% YoY for FY19E ticket sales backed 1,700 140

India by screen additions and an impressive film-slate, especially 3Q which has four big-budget films. 1,600 130 1,500 120 Ad and F&B drive margin expansion 1,400 110 1Q EBITDA was 28% of our FY19E. 1Q EBITDA margin was 20%, +174bps 1,300 100 YoY, supported by high-margin ad and F&B sales. F&B sales rose 26% YoY 1,200 90 on higher spend per patron (mainly more conversion) whilst ads rose 6% YoY due to higher rate. PVRL stated that it now operates ~22 ad 1,100 80 1,000 70 mins/film/screen and its ad strategy in future is to boost rates and not Aug-16 Nov-16 Feb-17 May-17 Aug-17 Nov-17 Feb-18 May-18 volume. For FY19E, we factored in F&B sales growth of +29% YoY and +18% for ads supporting 18% EBITDA margin (+76bps YoY). PVR - (LHS, INR) PVR / BSE SENSEX 30 Index - (RHS, %) Court verdict on F&B is weighing on sector -1M -3M -12M Absolute (%) (18) (22) (16) In two weeks from now the High Court will rule whether food Relative to index (%) (22) (26) (27) from outside can be consumed during movie viewings. The market is Source: FactSet nervous about any adverse impact on a very high-margin segment of multiplex businesses. We believe an unfavourable outcome is priced in. We do not factor any adverse ruling in our forecasts.

FYE Mar (INR m) FY17A FY18A FY19E FY20E FY21E Revenue 21,194 23,341 27,199 31,571 36,129 EBITDA 3,136 4,018 4,888 5,913 6,985 Core net profit 1,039 1,260 1,691 2,116 2,606 Core EPS (INR) 22 27 36 45 56 Core EPS growth (%) (14.4) 21.2 34.3 25.1 23.2 Net DPS (INR) 2 2 3 3 3 Core P/E (x) 50.1 51.7 31.2 24.9 20.2 P/BV (x) 5.4 6.1 4.3 3.7 3.1 Net dividend yield (%) 0.2 0.1 0.2 0.2 0.2 ROAE (%) 10.8 12.2 14.7 15.9 16.8 ROAA (%) 5.2 5.6 6.9 7.9 8.8 EV/EBITDA (x) 24.0 15.9 12.3 10.1 8.5 Net gearing (%) (incl perps) 78.4 65.7 58.7 50.5 37.8 Consensus net profit - - 1,749 2,189 2,889 MKE vs. Consensus (%) - - (3.3) (3.3) (9.8)

Jigar Shah Vikram Ramalingam [email protected] [email protected] (91) 22 6623 2632 (91) 22 6623 2609

THIS REPORT HAS BEEN PREPARED BY KIM ENG SECURITIES PVT LTD SEE PAGE 9 FOR IMPORTANT DISCLOSURES AND ANALYST CERTIFICATIONS PVR

Fig 1: 1QFY19 results 1Q as a % of 1QFY19 MKE Income statement (INRm) 1QFY19 4QFY18 1QFY18 YoY (%) QoQ (%) Variance (%) FY19E Est. Income from operations 6,963 5,849 6,366 9 19 26 6,483 7 Other income 43 75 164 (74) (44) 11 75 Total income 7,005 5,924 6,530 7 18 25 6,558 7

Film Exhibition cost 1,663 1,271 1,449 15 31 26 1,574 6 Cost of F&B 508 414 413 23 23 25 447 14 Employee cost 742 653 679 9 14 24 679 9 Rent 1,159 1,061 1,085 7 9 25 1,069 8 Other expenses 1,519 1,506 1,596 (5) 1 27 1,554 (2) Total expenses 5,591 4,905 5,222 7 14 5,324

EBITDA 1,372 944 1,144 20 45 28 1,159 18

Depreciation 401 394 399 0 2 406 Finance cost 208 210 208 (0) (1) 214

PBT 805 415 700 15 94 32 614 31 Exceptional expenses - - - - Tax 283 153 258 10 85 184 Minority interest (2) (3) - 1 PAT 520 259 443 18 101 31 431 21

EPS 11 6 10 17 99 31

Revenue Break up (INRm) Net Box office collections 3,849 3,124 3,433 12 23 28 3,578 8 F&B 2,027 1,571 1,646 23 29 26 1,688 20 Advertising 718 720 674 6 (0) 21 780 (8) Others 369 434 613 (40) (15) 34 437 (16)

Revenue Distribution (%) Net Box office collections 55 53 54 F&B 29 27 26 Advertising 10 12 11 Others 5 7 10

Key operational Metrics Locations 135 134 128 Screens 630 625 587 7 1 Footfalls in mn 23 19 21 8 19 26 21 8 Occupancy (%) 36% 32% 35% +80bp +440bp ATP (INR) 217 209 214 1 4 220 (2) SPH (INR) 94 87 87 8 8 88 7

Key financial Metrics EBITDA margin (%) 20 16 18 +174bps +357bps PAT margin (%) 7 4 7 +52bps +305bps Tax rate (%) 35 37 37

Source: Company, MKE estimates. ATP=Average Ticket Price, SPH=Spend Per Head on Food & beverages

Top five movies in 1QFY19 were ‘Avengers: Infinity War’, ‘Raazi’, ‘Race 3’, ‘Baaghi 2’ and ‘Jurassic Park: Fallen Kingdom’. Together, they registered 9.2m footfalls – 41% of total. In 1QFY18, ‘Bahubali: The Conclusion’, a mega blockbuster alone had 7.1m footfall last year. Due to the high base in 1QFY18, footfalls per screen are flat YoY. For the same reason the ATP was flat too. F&B revenue rose mainly because of higher SPH and ad revenue increase was contributed by higher rates.

On 13 Jul 2018, a minister in , India raised an issue asking multiplexes to reduce F&B prices and allow outside food on their premises. PVRL clarified that the High Court of India has not passed any order nor has the government passed any legislation on this. A group of multiplex operators have already met the concerned government authority and submitted their suggestions. As per the multiplexes, allowing outside food on the premises is not viable - commercially, legally, and with respect to safety and hygiene. The High Court has granted the government two weeks to present its stance and formulate

July 31, 2018 2

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the policy. Any adverse decision by the government or the court allowing patrons to bring outside food onto the premises will be detrimental to PVRL as: a) F&B forms 25-27% of total revenue and commands 75% gross profit margin; and b) other states in India will follow suit. Currently, we do not factor any adverse ruling in our forecasts. Multiplex operators believe the verdict will be issued in their favour. According to them, a similar verdict was passed by the court in Madhya Pradesh, India stating that the government has no reason to interfere in the F&B business of multiplexes as it is a private transaction between consumers and enterprises.

Fig 2: Peer valuation comparison Mcap PER (x) EV/EBITDA (x) RoE (%) CMP TP Rating Apr to Mar (INR) (USD m) FY19E FY20E FY19E FY20E FY19E FY20E PVR Limited (PVRL IN) INR 1,114 1,450 BUY 757 31 25 12 10 15 16 Inox Leisure Limited (INOL IN) INR 197 305 NUY 277 17 16 8 7 16 15 Cinemark Holdings (CNK US) USD 35.1 NR NR 4,094 16 14 7 7 17 17 Cineworld Group Plc (CINE LN) GBP 270 NR NR 4,858 13 11 10 8 12 13 Major Cineplex Group (MAJOR TB) THB 25.8 NR NR 697 23 20 12 10 16 17 Average 20 17 10 8 Source: MKE, Bloomberg. CNK, CINE and MAJOR follow the calendar year

PVRL has always been expensive as it is India's No.1 multiplex chain. Its brand is the most formidable in this industry, has excellent patronage, and pricing premium. It has the best profitability and operating matrix in the sector. Due to these factors, it trades at a premium to the sector. Its 5-year average is 17x EV/EBITDA, 20-25% premium to its immediate competitor INOL. INOL is the No.2 multiplex in India but it is not as consistent on advertising business and does not have the premium image as PVR.

Fig 3: PVRL 12M FWD EV/EBITDA (x)

Source: Maybank Kim Eng, Bloomberg, company

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Fig 4: Important films in FY19 Film Name Date Studio Star Cast Collections Blackmail 06-Apr-18 T-Series , Kirti Kulhari INR183m

October 13-Apr-18 Rising Sun Films Varun Dhawan, Banita Sandhu INR405m

102 Not Out 04-May-18 Sony Pictures , Rishi Kapoor INR499m

Raazi 11-May-18 Dharma Productions , Alia Bhatt INR1,205m

Parmanu 02-May-18 Kriarj Entertainment JA John Abraham, Diana Penty, Boman Irani INR594m

Race 3 15-Jun-18 Fox Star Studios Salman Khan, Bobby Deol, Jacqueline Fernandez INR1,692m

Sanju 29-Jun-18 Rajkumar Hirani Films Ranbir Kapoor, INR1,850m

Saheb, Biwi Aur Gangster 3 27-Jul-18 Wave Cinemas Sanjay Dutt, Jimmy Sheirgil, lMahi GillChitrangada Singh

Fanney Khan 03-Aug-18 T-Series, AA Films Anil Kapoor, Aishwarya Rai Bachchan, Rajkummar Rao

Mulk 03-Aug-18 Soham Rockstar Entertainment Rishi Kapoor, Prateik Babbar, Rajat Kapoor

Vishwaroopam II 10-Aug-18 Raaj Kamal Films International Kamal Haasan, Rahul Bose, Pooja Kumar

Gold 15-Aug-18 Excel Entertainment Akshay Kumar, Kunal Kapoor, Mouni Roy

Satyameva Jayate 15-Aug-18 T-Series John Abraham,

Happy Phirr Bhag Jayegi 24-Aug-18 Eros International Sonakshi Sinha, Diana Penty, Ali Fazal, Jimmy Shergill

Yamla Pagla Deewana: Phir Se 31-Aug-18 Pen India Films Dharmendra, Sunny Deol, Bobby Deol

Paltan 7-Sep-18 Zee Studious Jackie Shroff, Suniel Shetty, Arjun Rampal

Batti Gul Meter Chalu 21-Sep-18 T-Series Shahid Kapoor, Shraddha Kapoor,

Manmarziyaan 21-Sep-18 Eros International Abhishek Bachchan, Vicky Kaushal

Sui Dhaaga 28-Sep-18 Yash Raj Films Varun Dhawan, Anushka Sharma Ek Ladki Ko Dekha Toh Aisa Laga 12-Oct-18 Fox Star Studios Anil Kapoor, Sonam Kapoor, Rajkummar Rao

De De Pyar De 19-Oct-18 T-Series Ajay Devgn, Tabu

Thugs of Hindostan 07-Nov-18 Yash Raj Films Amitabh Bachchan, Aamir Khan, Katrina Kaif

2.0 29-Nov-18 Lyca Productions Rajinikanth, Akshay Kumar

Kedarnath 30-Nov-18 RSVP Movies ,

Total Dhamaal 07-Dec-18 Fox Star Studios Madhuri Dixit, Ajay Devgn, Anil Kapoor

Zero 21-Dec-18 Red Chillies Entertainment Shah Rukh Khan, Katrina Kaif, Anushka Sharma

The Accidental Prime Minister 21-Dec-18 Bohra Bos International Anupam KherAkshaye Khanna

Simmba 28-Dec-18 Dharma Productions Ranveer Singh, Sara Ali Khan, Sonu Sood Source: Industry reports

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Value Proposition Price Drivers

. PVRL is the leader in cinema exhibition with 24% market Historical share price trend share. Mostly present in premium locations, PVRL enjoys 1,800 3 4 450 high brand value. 1,600 400 2 . The multiplex cinema industry is relatively nascent. PVRL 1,400 350 leads with 625 screens and plans to stay ahead by adding 1,200 300 1 65 screens per annum. 1,000 250 . Although ticket sales form the bulk of revenue, PVRL has 800 200 been successful in increasing contribution from ancillary 600 150 income to improve margins. 400 100 1 200 50 . High fixed cost: rising cost of employees, increase in Jul-13 Jul-14 Jul-15 Jul-16 Jul-17 entertainment tax, and rent are the key challenges.

. With high operating leverage and footfalls a direct PVR - (LHS, INR) PVR / MSCI AC Asia ex JP - (RHS, %) function of movie content, returns are likely to be volatile on a YoY basis. Source: Company, FactSet, Maybank Kim Eng Revenue and EBITDA margin 40 25 1. PVRL announces plans to acquire DT Cinemas. 35 20 2. Share price falls because of concerns over PVRL’s deal 30 19 19 17 18 with DT Cinemas. 16 25 15 15 3. Approval to acquire DT cinemas by Competition 20 Commission of India 15 10 4. PVRL announces its decision to acquire minority stake in 10 American luxury restaurant-and-theatre company iPic - 5 5 Gold Class Entertainment for USD4m. 18 21 23 27 32 36 - 0 FY16 FY17 FY18 FY19F FY20F FY21F Revenue in INRb EBITDA margin (%) Source: Company, Maybank Kim Eng

Financial Metrics Swing Factors

. Footfall is the key metric in the movie exhibition business. Upside Higher footfalls translate into higher sales of tickets and F&B, which improves the scope for ads. . Expansion in screen count, and more movies with good . We see an impressive pipeline of movies in FY19. FY19 has content. seen good response for movies such as ‘Sanju’, ‘Race3’, . Pick-up in entertainment spending leading to greater ‘Raazi’ and ‘Baaghi 2’ etc. footfall, F&B spending, and increase in ticket price. . We forecast screen additions of 85 in FY18 and 65 pa in . Increase in demand for cinema advertising. FY20-21 leading to capex of INR4.2b each year.

Footfall (m) Downside

120 20 . Government regulation in F&B business. 18 18 . Poor content leading to low box office performance, 100 16 14 reduced occupancy and footfalls. 80 14 12 . Delays in screen openings. 60 10 9 8 8 8 40 6 20 4 2 70 75 76 1 87 95 102 - - FY16 FY17 FY18 FY19F FY20F FY21F Footfalls in Mn % change YoY

Source: Company, Maybank Kim Eng

[email protected]

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FYE 31 Mar FY17A FY18A FY19E FY20E FY21E Key Metrics P/E (reported) (x) 52.2 52.3 31.2 24.9 20.2 Core P/E (x) 50.1 51.7 31.2 24.9 20.2 P/BV (x) 5.4 6.1 4.3 3.7 3.1 P/NTA (x) 9.8 10.2 6.6 5.3 4.2 Net dividend yield (%) 0.2 0.1 0.2 0.2 0.2 FCF yield (%) nm 1.9 0.9 2.1 3.7 EV/EBITDA (x) 24.0 15.9 12.3 10.1 8.5 EV/EBIT (x) 42.9 25.8 20.3 16.7 13.8

INCOME STATEMENT (INR m) Revenue 21,194.3 23,341.1 27,198.9 31,570.9 36,128.6 Gross profit 10,929.1 11,803.6 13,602.1 15,770.4 18,009.3 EBITDA 3,136.2 4,018.3 4,888.0 5,912.6 6,985.1 Depreciation (1,383.8) (1,536.9) (1,942.8) (2,328.0) (2,713.2) Amortisation 0.0 0.0 0.0 0.0 0.0 EBIT 1,752.4 2,481.4 2,945.2 3,584.6 4,271.9 Net interest income /(exp) (805.8) (837.1) (821.0) (826.5) (782.5) Associates & JV 0.0 0.0 0.0 0.0 0.0 Exceptionals 0.0 0.0 0.0 0.0 0.0 Other pretax income 622.5 313.4 400.0 400.0 400.0 Pretax profit 1,569.1 1,957.7 2,524.2 3,158.0 3,889.4 Income tax (570.0) (704.4) (833.0) (1,042.2) (1,283.5) Minorities (0.5) (6.8) 0.0 0.0 0.0 Perpetual securities 0.0 0.0 0.0 0.0 0.0 Discontinued operations 0.0 0.0 0.0 0.0 0.0 Reported net profit 998.6 1,246.5 1,691.2 2,115.9 2,605.9 Core net profit 1,039.3 1,259.6 1,691.2 2,115.9 2,605.9

Preferred Dividends 0.0 0.0 0.0 0.0 0.0 BALANCE SHEET (INR m) Cash & Short Term Investments 308.6 338.5 284.7 291.5 372.7 Accounts receivable 1,020.8 1,556.1 1,490.4 1,729.9 1,979.7 Inventory 190.4 198.0 223.6 259.5 296.9 Property, Plant & Equip (net) 11,806.0 12,570.7 14,847.9 16,799.9 18,366.7 Intangible assets 4,336.5 4,344.7 4,344.7 4,344.7 4,344.7 Investment in Associates & JVs 0.0 0.0 0.0 0.0 0.0 Other assets 4,162.0 4,324.4 4,289.5 4,950.7 5,639.9 Total assets 21,824.3 23,332.4 25,480.7 28,376.2 31,000.6 ST interest bearing debt 0.0 0.0 0.0 0.0 0.0 Accounts payable 1,976.2 2,511.1 2,831.7 3,286.8 3,761.3 Insurance contract liabilities 0.0 0.0 0.0 0.0 0.0 LT interest bearing debt 8,195.8 7,413.9 7,513.9 7,513.9 6,713.9 Other liabilities 1,597.0 2,646.0 2,819.0 3,280.0 3,761.0 Total Liabilities 11,769.2 12,570.7 13,164.5 14,080.8 14,236.1 Shareholders Equity 9,650.1 10,753.6 12,308.1 14,287.3 16,756.5 Minority Interest 405.0 8.1 8.1 8.1 8.1 Total shareholder equity 10,055.1 10,761.7 12,316.2 14,295.4 16,764.6 Perpetual securities 0.0 0.0 0.0 0.0 0.0 Total liabilities and equity 21,824.3 23,332.4 25,480.7 28,376.2 31,000.6

CASH FLOW (INR m) Pretax profit 1,569.1 1,957.7 2,524.2 3,158.0 3,889.4 Depreciation & amortisation 1,383.8 1,536.9 1,942.8 2,328.0 2,713.2 Adj net interest (income)/exp 805.8 837.1 821.0 826.5 782.5 Change in working capital 219.0 1,137.2 658.8 518.7 540.7 Cash taxes paid (570.0) (704.4) (833.0) (1,042.2) (1,283.5) Other operating cash flow (412.7) (40.0) (400.0) (400.0) (400.0) Cash flow from operations 2,995.0 4,724.5 4,713.9 5,389.1 6,242.3 Capex (3,056.5) (3,461.2) (4,220.0) (4,280.0) (4,280.0) Free cash flow (61.5) 1,263.3 493.9 1,109.1 1,962.3 Dividends paid (116.9) (107.5) (136.7) (136.7) (136.7) Equity raised / (purchased) (3.1) (36.8) 0.0 0.0 0.0 Perpetual securities 0.0 0.0 0.0 0.0 0.0 Change in Debt 1,595.6 (781.9) 100.0 0.0 (800.0) Perpetual securities distribution 0.0 0.0 0.0 0.0 0.0 Other invest/financing cash flow (3,785.3) (314.4) (510.9) (965.5) (944.4) Effect of exch rate changes 0.0 0.0 0.0 0.0 0.0 Net cash flow (2,371.2) 22.7 (53.8) 6.8 81.1

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FYE 31 Mar FY17A FY18A FY19E FY20E FY21E Key Ratios Growth ratios (%) Revenue growth 14.6 10.1 16.5 16.1 14.4 EBITDA growth 7.2 28.1 21.6 21.0 18.1 EBIT growth (1.2) 41.6 18.7 21.7 19.2 Pretax growth 0.0 24.8 28.9 25.1 23.2 Reported net profit growth (8.9) 24.8 35.7 25.1 23.2 Core net profit growth (14.3) 21.2 34.3 25.1 23.2

Profitability ratios (%) EBITDA margin 14.8 17.2 18.0 18.7 19.3 EBIT margin 8.3 10.6 10.8 11.4 11.8 Pretax profit margin 7.4 8.4 9.3 10.0 10.8 Payout ratio 9.7 7.5 6.9 5.5 4.5

DuPont analysis Net profit margin (%) 4.7 5.3 6.2 6.7 7.2 Revenue/Assets (x) 1.0 1.0 1.1 1.1 1.2 Assets/Equity (x) 2.3 2.2 2.1 2.0 1.9 ROAE (%) 10.8 12.2 14.7 15.9 16.8 ROAA (%) 5.2 5.6 6.9 7.9 8.8

Liquidity & Efficiency Cash conversion cycle (50.5) (53.9) (55.8) (56.9) (57.4) Days receivable outstanding 16.3 19.9 20.2 18.4 18.5 Days inventory outstanding 8.0 7.0 6.5 6.5 6.5 Days payables outstanding 74.8 80.8 82.5 81.7 82.3 Dividend cover (x) 10.3 13.3 14.5 18.1 22.3 Current ratio (x) 0.7 0.6 0.5 0.5 0.5

Leverage & Expense Analysis Asset/Liability (x) 1.9 1.9 1.9 2.0 2.2 Net gearing (%) (incl perps) 78.4 65.7 58.7 50.5 37.8 Net gearing (%) (excl. perps) 78.4 65.7 58.7 50.5 37.8 Net interest cover (x) 2.2 3.0 3.6 4.3 5.5 Debt/EBITDA (x) 2.6 1.8 1.5 1.3 1.0 Capex/revenue (%) 14.4 14.8 15.5 13.6 11.8 Net debt/ (net cash) 7,887.2 7,075.4 7,229.2 7,222.4 6,341.2 Source: Company; Maybank

July 31, 2018 7

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REGIONAL MALAYSIA HONG KONG / CHINA THAILAND

Sadiq CURRIMBHOY WONG Chew Hann, CA Head of Research Mitchell KIM Head of Research Maria LAPIZ Head of Institutional Research Regional Head, Research & Economics (603) 2297 8686 [email protected] (852) 2268 0634 [email protected] Dir (66) 2257 0250 | (66) 2658 6300 ext 1399 (65) 6231 5836 • Strategy • Internet & Telcos [email protected] [email protected] • Strategy • Consumer • Materials • Services Desmond CH’NG, ACA Christopher WONG Amornrat CHEEVAVICHAWALKUL WONG Chew Hann, CA (603) 2297 8680 (852) 2268 0652 (66) 2658 6300 ext 1393 Regional Head of Institutional Research [email protected] [email protected] [email protected] (603) 2297 8686 • Banking & Finance • HK & China Properties • Oil & Gas [email protected] LIAW Thong Jung Jacqueline KO, CFA Tanawat RUENBANTERNG (852) 2268 0633 [email protected] (66) 2658 6300 ext 1394 ONG Seng Yeow (603) 2297 8688 [email protected] • Oil & Gas Services- Regional • Consumer Staples & Durables [email protected] Regional Head of Retail Research • Banks & Diversified Financials (65) 6231 5839 Ricky NG, CFA ONG Chee Ting, CA Ornmongkol TANTITANATORN [email protected] (852) 2268 0689 [email protected] (603) 2297 8678 [email protected] (66) 2658 6300 ext 1395 • Regional Renewables • Plantations - Regional [email protected] TAN Sin Mui • HK & China Properties • Power & Utilities • Infrastructure Director of Research Mohshin AZIZ Stefan CHANG, CFA Surachai PRAMUALCHAROENKIT (65) 6231 5849 (603) 2297 8692 [email protected] (852) 2268 0675 [email protected] Head of Retail Research [email protected] • Aviation - Regional • Petrochem • Technology – Regional (66) 2658 5000 ext 1470 [email protected] YIN Shao Yang, CPA ECONOMICS Tony REN, CFA • Auto • Conmat • Contractor • Steel (603) 2297 8916 [email protected] (852) 2268 0640 [email protected] Suhaimi ILIAS Ekachai TARAPORNTIP Deputy Head • Gaming – Regional • Media • Healthcare & Pharmaceutical Chief Economist 66) 2658 5000 ext 1530 Malaysia | Philippines | China TAN Chi Wei, CFA Wendy LI [email protected] (603) 2297 8682 (603) 2297 8690 [email protected] (852) 2268 0647 [email protected] Sutthichai KUMWORACHAI Deputy Head [email protected] • Power • Telcos • Consumer & Auto (66) 2658 5000 ext 1400 [email protected] CHUA Hak Bin WONG Wei Sum, CFA INDIA • Energy • Petrochem Regional Thematic Macroeconomist (603) 2297 8679 [email protected] Suttatip PEERASUB (65) 6231 5830 • Property Jigar SHAH Head of Research (66) 2658 5000 ext 1430 [email protected] (91) 22 6623 2632 [email protected] [email protected] LEE Yen Ling • Strategy • Oil & Gas • Automobile • Cement • Media • Commerce LEE Ju Ye (603) 2297 8691 [email protected] Singapore Termporn TANTIVIVAT • Building Materials • Glove • Ports • Shipping Vishal MODI (65) 6231 5844 (66) 2658 5000 ext 1520 [email protected] Ivan YAP (91) 22 6623 2607 [email protected] [email protected] (603) 2297 8612 [email protected] • Banking & Financials • Property Dr Zamros DZULKAFLI • Automotive • Semiconductor • Technology Jaroonpan WATTANAWONG (603) 2082 6818 Neerav DALAL (66) 2658 5000 ext 1404 [email protected] Kevin WONG (91) 22 6623 2606 [email protected] [email protected] (603) 2082 6824 [email protected] • Software Technology • Telcos • Transportation • Small cap Ramesh LANKANATHAN • REITs • Consumer Discretionary Sorrabhol VIRAMETEEKUL (603) 2297 8685 Vishal PERIWAL Head of Digital Research [email protected] LIEW Wei Han (91) 22 6623 2605 vishalperiwa@maybank- (66) 2658 5000 ext 1550 (603) 2297 8676 [email protected] ke.co.in FX [email protected] • Consumer Staples • Infrastructure • Food, Transportation Saktiandi SUPAAT Wijit ARAYAPISIT Adrian WONG INDONESIA Head, FX Research (603) 2297 8675 [email protected] (66) 2658 5000 ext 1450 (65) 6320 1379 • Constructions • Healthcare Isnaputra ISKANDAR Head of Research [email protected] [email protected] (62) 21 8066 8680 • Strategist Jade TAM [email protected] Christopher WONG (603) 2297 8687 [email protected] • Strategy • Metals & Mining • Cement VIETNAM (65) 6320 1347 [email protected] • Media • Building Materials Rahmi MARINA LE Hong Lien, ACCA (62) 21 8066 8689 Head of Institutional Research Mohd Hafiz Hassan Leslie TANG [email protected] (84 28) 44 555 888 x 8181 (603) 2082 6819 [email protected] (65) 6320 1378 • Banking & Finance [email protected] • Small & Mid Caps [email protected] • Strategy • Consumer • Diversified Aurellia SETIABUDI TEE Sze Chiah Head of Retail Research (62) 21 8066 8691 Fiona LIM THAI Quang Trung, CFA, (603) 2082 6858 [email protected] [email protected] (65) 6320 1374 Deputy Head, Institutional Research • Property [email protected] (84 28) 44 555 888 x 8180 Nik Ihsan Raja Abdullah, MSTA, CFTe Janni ASMAN [email protected] (603) 2297 8694 (62) 21 8066 8687 • Real Estate • Construction • Materials STRATEGY [email protected] [email protected] Sadiq CURRIMBHOY • Cigarette • Healthcare • Retail LE Nguyen Nhat Chuyen Global Strategist SINGAPORE (84 28) 44 555 888 x 8082 (65) 6231 5836 Neel SINHA Head of Research PHILIPPINES [email protected] [email protected] (65) 6231 5838 [email protected] • Oil & Gas Minda OLONAN Head of Research • Strategy • Industrials (63) 2 849 8840 NGUYEN Thi Ngan Tuyen, Willie CHAN • SMID Caps – Regional Hong Kong / Regional [email protected] Head of Retail Research (852) 2268 0631 CHUA Su Tye • Strategy (84 28) 44 555 888 x 8081 [email protected] (65) 6231 5842 [email protected] Katherine TAN [email protected] • REITs (63) 2 849 8843 • Food & Beverage • Oil&Gas • Banking FIXED INCOME [email protected] TRUONG Quang Binh, Derrick HENG, CFA • Banks • Conglomerates • Ports Winson Phoon, ACA (65) 6231 5843 [email protected] Deputy Head, Retail Research (65) 6231 5831 • Property • REITs (Office) Luis HILADO (84 28) 44 555 888 x 8087 [email protected] (65) 6231 5848 [email protected] [email protected] Luis HILADO • Telcos • Rubber Plantation • Tyres & Tubes • Oil & Gas Se Tho Mun Yi (65) 6231 5848 [email protected] (603) 2074 7606 • Telcos Romel LIBO-ON TRINH Thi Ngoc Diep [email protected] (63) 2 849 8844 (84 28) 44 555 888 x 8208 LAI Gene Lih [email protected] [email protected] (65) 6231 5832 [email protected] • Property • Technology • Utilities • Construction • Technology Kayzer Llanda NGUYEN Thi Sony Tra Mi

(63) 2 849 8838 (84 28) 44 555 888 x 8084 [email protected] [email protected] • Utilities • Port Operation • Pharmaceutical • Food & Beverage

NGUYEN Thanh Lam (84 28) 44 555 888 x 8086 [email protected] • Technical Analysis

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APPENDIX I: TERMS FOR PROVISION OF REPORT, DISCLAIMERS AND DISCLOSURES

DISCLAIMERS This research report is prepared for general circulation and for information purposes only and under no circumstances should it be considered or intended as an offer to sell or a solicitation of an offer to buy the securities referred to herein. Investors should note that values of such securities, if any, may fluct uate and that each security’s price or value may rise or fall. Opinions or recommendations contained herein are in form of technical ratings and fundamental ratings. Technical ratings may differ from fundamental ratings as technical valuations apply different methodologies and are purely based on price and volume-related information extracted from the relevant jurisdiction’s stock exchange in the equity analysis. Accordingly, investors’ returns may be less than the original sum invested. Past performance is not necessarily a guide to future performance. This report is not intended to provide personal investment advice and does not take into account the specific investment objectives, the financial situation and the particular needs of persons who may receive or read this report. Investors should therefore seek financial, legal and other advice regarding the appropriateness of investing in any securities or the investment strategies discussed or recommended in this report. The information contained herein has been obtained from sources believed to be reliable but such sources have not been independently verified by Maybank Investment Bank Berhad, its subsidiary and affiliates (collectively, “MKE”) and consequently no representation is made as to the accuracy or completeness of this report by MKE and it should not be relied upon as such. Accordingly, MKE and its officers, directors, associates, connected parties and/or employees (collectively, “Representatives”) shall not be liable for any direct, indirect or consequential losses or damages that may arise from the use or reliance of this report. Any information, opinions or recommendations contained herein are subject to change at any time, without prior notice. This report may contain forward looking statements which are often but not always identified by the use of words such as “anticipate”, “believe”, “estimate”, “intend”, “plan”, “expect”, “forecast”, “predict” and “project” and statements that an event or result “may”, “will”, “can”, “should”, “could” or “might” occur or be achieved and other similar expressions. Such forward looking statements are based on assumptions made and information currently available to us and are subject to certain risks and uncertainties that could cause the a ctual results to differ materially from those expressed in any forward looking statements. Readers are cautioned not to place undue relevance on these forward-looking statements. MKE expressly disclaims any obligation to update or revise any such forward looking statements to reflect new information, events or circumstances af ter the date of this publication or to reflect the occurrence of unanticipated events. MKE and its officers, directors and employees, including persons involved in the preparation or issuance of this report, may, to the extent permitted by law, from time to time participate or invest in financing transactions with the issuer(s) of the securities mentioned in this report, perform services for or solicit business from such issuers, and/or have a position or holding, or other material interest, or effect transactions, in such securities or options thereon, or other investments related thereto. In addition, it may make markets in the securities mentioned in the material presented in this report. One or more directors, officers and/or employees of MKE may be a director of the issue rs of the securities mentioned in this report to the extent permitted by law. This report is prepared for the use of MKE’s clients and may not be reproduced, altered in any way, transmitted to, copied or distributed to any other party in whole or in part in any form or manner without the prior express written consent of MKE and MKE and its Representatives accepts no liability whatsoever for the actions of third parties in this respect. This report is not directed to or intended for distribution to or use by any person or entity who is a citizen or resident of or located in any locality, state, country or other jurisdiction where such distribution, publication, availability or use would be contrary to law or regulation. This report is for distribution only under such circumstances as may be permitted by applicable law. The securities described herein may not be eligible for sale in all jurisdictions or to certain categories of investors. With out prejudice to the foregoing, the reader is to note that additional disclaimers, warnings or qualifications may apply based on geographical location of the person or entity receiving this report. Malaysia Opinions or recommendations contained herein are in the form of technical ratings and fundamental ratings. Technical ratings may differ from fundamental ratings as technical valuations apply different methodologies and are purely based on price and volume-related information extracted from Bursa Malaysia Securities Berhad in the equity analysis. Singapore This report has been produced as of the date hereof and the information herein may be subject to change. Maybank Kim Eng Research Pte. Ltd. (“Maybank KERPL”) in Singapore has no obligation to update such information for any recipient. For distribution in Singapore, recipients of this report are to cont act Maybank KERPL in Singapore in respect of any matters arising from, or in connection with, this report. If the recipient of this report is not an accredited investor, expert investor or i nstitutional investor (as defined under Section 4A of the Singapore Securities and Futures Act), Maybank KERPL shall be legally liable for the contents of this report, with such liability being l imited to the extent (if any) as permitted by law. Thailand Except as specifically permitted, no part of this presentation may be reproduced or distributed in any manner without the prior written permission of Maybank Kim Eng Securities (Thailand) Public Company Limited. Maybank Kim Eng Securities (Thailand) Public Company Limited (“MBKET”) accepts no liability whatsoeve r for the actions of third parties in this respect. Due to different characteristics, objectives and strategies of institutional and retail investors, the research reports of MB KET Institutional and Retail Research Department may differ in either recommendation or target price, or both. MBKET Retail Research is intended for retail investors (http://kelive.maybank-ke.co.th) while Maybank Kim Eng Institutional Research is intended only for institutional investors based outside Thailand only. 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 evaluation 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 may be changed after that date. MBKET does not confirm nor certify the accuracy of such survey result. 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 In stitute 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 a ppearing in the assessment result, it may be changed after that date or when there is any change to the relevant information. Nevertheless, MBKET does not confirm, verify, or certify the accuracy and completen ess of the assessment result. US This third-party research report is distributed in the United States (“US”) to Major US Institutional Investors (as defined in Rule 15a-6 under the Securities Exchange Act of 1934, as amended) only by Maybank Kim Eng Securities USA Inc (“Maybank KESUSA”), a broker-dealer registered in the US (registered under Section 15 of the Securities Exchange Act of 1934, as amended). All responsibility for the distribution of this report by Maybank KESUSA in the US shall be borne by Maybank KESUSA. This report is not directed at you if MKE is prohibited or restricted by any legislation or regulation in any jurisdiction from making it available to you. You should satisfy yourself before reading it that Maybank KESUSA is permitted to provide research material concerning investments to you under relevant legislation and regulations. All U.S. persons receiving and/or accessing this report and wishing to effect transactions in any security mentioned within must do so with: Maybank Kim Eng Securities USA Inc. 400 Park Avenue, 11th Floor, New York, New York 10022, 1-(212) 688-8886 and not with, the issuer of this report.

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UK This document is being distributed by Maybank Kim Eng Securities (London) Ltd (“Maybank KESL”) which is authorized and regula ted, by the Financial Conduct Authority and is for Informational Purposes only. This document is not intended for distribution to anyone defined as a Retail Client under the Financial Services and Markets Act 2000 within the UK. Any inclusion of a third party link is for the recipients convenience only, and that the firm does not take any responsibility fo r its comments or accuracy, and that access to such links is at the individuals own risk. Nothing in this report should be considered as constituting legal, accounting or tax advice, and that f or accurate guidance recipients should consult with their own independent tax advisers. DISCLOSURES

Legal Entities Disclosures Malaysia: This report is issued and distributed in Malaysia by Maybank Investment Bank Berhad (15938- H) which is a Participating Organization of Bursa Malaysia Berhad and a holder of Capital Markets and Services License issued by the Securities Commission in Malaysia. Singapore: This report is distributed in Singapore by Maybank KERPL (Co. Reg No 198700034E) which is regulated by the Monetary Authority of Singapore. Indonesia: PT Maybank Kim Eng Securities (“PTMKES”) (Reg. No. KEP-251/PM/1992) is a member of the Indonesia Stock Exchange and is regulated by the Financial Services Authority (Indonesia). Thailand: MBKET (Reg. No.0107545000314) is a member of the Stock Exchange of Thailand and is regulated by the Ministry of Finance and the Securities and Exchange Commission. Philippines: Maybank ATRKES (Reg. No.01-2004-00019) is a member of the Philippines Stock Exchange and is regulated by the Securities and Exchange Commission. Vietnam: Maybank Kim Eng Securities Limited (License Number: 117/GP-UBCK) is licensed under the State Securities Commission of Vietnam. Hong Kong: KESHK (Central Entity No AAD284) is regulated by the Securities and Futures Commission. India: Kim Eng Securities India Private Limited (“KESI”) is a participant of the National Stock Exchange of India Limited and the Bombay Stock Exchange and is regulated by Securities and Exchange Board of India (“SEBI”) (Reg. No. INZ000010 538). KESI is also registered with SEBI as Category 1 Merchant Banker (Reg. No. INM 000011708) and as Research Analyst (Reg No: INH000000057) US: Maybank KESUSA is a member of/ and is authorized and regulated by the FINRA – Broker ID 27861. UK: Maybank KESL (Reg No 2377538) is authorized and regulated by the Financial Conduct Authority.

Disclosure of Interest Malaysia: MKE and its Representatives may from time to time have positions or be materially interested in the securities referred to he rein and may further act as market maker or may have assumed an underwriting commitment or deal with such securities and may also perform or seek to perform investment banking services, advisory and other services for or relating to those companies.

Singapore: As of 31 July 2018, Maybank KERPL and the covering analyst do not have any interest in any companies recommended in this research report.

Thailand: MBKET may have a business relationship with or may possibly be an issuer of derivative warrants on the securities /companies mentioned in the research report. Therefore, Investors should exercise their own judgment before making any investment decisions. MBKET, its associates, directors, connected parties and/or employees may from time to time have interests and/or underwriting commitments in the securities mentioned in this report.

Hong Kong: As of 31 July 2018, KESHK and the authoring analyst do not have any interest in any companies recommended in this research report.

India: As of 31 July 2018, and at the end of the month immediately preceding the date of publication of the research report, KESI, authoring analyst o r their associate / relative does not hold any financial interest or any actual or beneficial ownership in any shares or having any conflict of interest in the subject companies except as otherwise disclosed in the research report. In the past twelve months KESI and authoring analyst or their associate did not receive any compensation or other benefits fr om the subject companies or third party in connection with the research report on any account what so ever except as otherwise disclosed in the research report.

MKE may have, within the last three years, served as manager or co-manager of a public offering of securities for, or currently may make a primary market in issues of, any or all of the entities mentioned in this report or may be providing, or have provided within the previous 12 months, significant advice or investment services in relation to the investment concerned or a related investment and may receive compensation for the services provided from the companies covered in this report.

OTHERS Analyst Certification of Independence The views expressed in this research report accurately reflect the analyst’s personal views about any and all of the subject securities or issuers; and no part of the research analyst’s compensation was, is or will be, directly or indirectly, related to the specific recommendations or views expressed in the re port. Reminder Structured securities are complex instruments, typically involve a high degree of risk and are intended for sale only to sophisticated investors wh o are capable of understanding and assuming the risks involved. The market value of any structured security may be affected by changes in economic, financial and political factors (including, but not limited to, spot and forward interest and exchange rates), time to maturity, market conditions and volatility and the credit quality of any issuer or reference issuer. Any investor interested in purchasing a structured product should conduct its own analysis of the product and consult with its own professional advisers as to the risks involved in making such a purchase. No part of this material may be copied, photocopied or duplicated in any form by any means or redistributed without the prior consent of MKE.

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Historical recommendations and target price: PVR (PVRL IN)

31 Jan 8 Feb 18 Aug 7 Feb 14 May 30 Jul Hold : INR1,290 Hold : INR1,300 Sell : INR1,120 Hold : INR1,200 Hold : INR1,450 Buy : INR1,450 1,800.0

1,600.0

1,400.0

1,200.0

1,000.0 Jan-17 Apr-17 Jul-17 Oct-17 Jan-18 Apr-18 Jul-18

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Definition of Ratings Maybank Kim Eng Research uses the following rating system BUY Return is expected to be above 10% in the next 12 months (excluding dividends) HOLD Return is expected to be between - 10% to +10% in the next 12 months (excluding dividends) SELL Return is expected to be below -10% in the next 12 months (excluding dividends)

Applicability of Ratings The respective analyst maintains a coverage universe of stocks, the list of which may be adjusted according to needs. Investment ratings are only applicable to the stocks which form part of the coverage universe. Reports on companies which are not part of the coverage do not carry investment ratings as we do not actively follow developments in these companies.

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 Malaysia  Singapore  London  New York Maybank Investment Bank Berhad Maybank Kim Eng Securities Pte Ltd Maybank Kim Eng Securities Maybank Kim Eng Securities USA (A Participating Organisation of Maybank Kim Eng Research Pte Ltd (London) Ltd Inc Bursa Malaysia Securities Berhad) 50 North Canal Road PNB House 400 Park Avenue, 11th Floor 33rd Floor, Menara Maybank, Singapore 059304 77 Queen Victoria Street New York, New York 10022, 100 Jalan Tun Perak, London EC4V 4AY, UK U.S.A. 50050 Kuala Lumpur Tel: (65) 6336 9090 Tel: (603) 2059 1888; Tel: (44) 20 7332 0221 Tel: (212) 688 8886 Fax: (603) 2078 4194 Fax: (44) 20 7332 0302 Fax: (212) 688 3500

Stockbroking Business:  Hong Kong  Indonesia  India Level 8, Tower C, Dataran Maybank, Kim Eng Securities (HK) Ltd PT Maybank Kim Eng Securities Kim Eng Securities India Pvt Ltd No.1, Jalan Maarof 28/F, Lee Garden Three, Sentral Senayan III, 22nd Floor 2nd Floor, The International, 59000 Kuala Lumpur 1 Sunning Road, Causeway Bay, Jl. Asia Afrika No. 8 16, Maharishi Karve Road, Tel: (603) 2297 8888 Hong Kong Gelora Bung Karno, Senayan Churchgate Station, Fax: (603) 2282 5136 Jakarta 10270, Indonesia Mumbai City - 400 020, India Tel: (852) 2268 0800 Fax: (852) 2877 0104 Tel: (62) 21 2557 1188 Tel: (91) 22 6623 2600 Fax: (62) 21 2557 1189 Fax: (91) 22 6623 2604

 Philippines  Thailand  Vietnam  Saudi Arabia Maybank ATR Kim Eng Securities Inc. Maybank Kim Eng Securities Maybank Kim Eng Securities Limited In association with 17/F, Tower One & Exchange Plaza (Thailand) Public Company Limited 4A-15+16 Floor Vincom Center Dong Anfaal Capital Ayala Triangle, Ayala Avenue 999/9 The Offices at Central World, Khoi, 72 Le Thanh Ton St. District 1 Villa 47, Tujjar Jeddah Makati City, Philippines 1200 20th - 21st Floor, Ho Chi Minh City, Vietnam Prince Mohammed bin Abdulaziz Rama 1 Road Pathumwan, Street P.O. Box 126575 Tel: (63) 2 849 8888 Bangkok 10330, Thailand Tel : (84) 844 555 888 Jeddah 21352 Fax: (63) 2 848 5738 Fax : (84) 8 38 271 030 Tel: (66) 2 658 6817 (sales) Tel: (966) 2 6068686 Tel: (66) 2 658 6801 (research) Fax: (966) 26068787

 South Asia Sales Trading  North Asia Sales Trading Kevin Foy Andrew Lee Regional Head Sales Trading [email protected] [email protected] Tel: (852) 2268 0283 Tel: (65) 6636-3620 US Toll Free: 1 877 837 7635 US Toll Free: 1-866-406-7447

Malaysia Thailand Joann Lim Tanasak Krishnasreni [email protected] [email protected] Tel: (603) 2717 5166 Tel: (66)2 658 6820

Indonesia London Harianto Liong Mark Howe [email protected] [email protected] Tel: (62) 21 2557 1177 Tel: (44) 207-332-0221

New York India James Lynch Sanjay Makhija [email protected] [email protected] Tel: (212) 688 8886 Tel: (91)-22-6623-2629

Vietnam Philippines Patrick Mitchell Keith Roy [email protected] [email protected] Tel: (84)-8-44-555-888 x8080 Tel: (63) 2 848-5288 www.maybank-ke.com | www.maybank-keresearch.com

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