January 10, 2016

Malaysia Property NEGATIVE [Unchanged]

Batu Kawan is shining, again

Embracing the second wave of growth Analyst The completed/soon-to-be completed catalytic projects — Design Village Wong Wei Sum, CFA (end-Nov 2016) and IKEA Penang store (end-2018) — are expected (603) 2297 8679 to bring in the second wave of growth in (BK). These flagship [email protected] projects would create job opportunities and serve as a population catchment, boosting property demand in BK. Beneficiaries include Tambun Indah, Eco World and Paramount. Having said that, demand on BK properties has been dragged by the current slowdown in the local property market due to macro headwinds and buyers credit quality.

RealEstate 2018-2019, the tipping point We expect the second wave of growth in BK to materialize with the completion of a few growth catalytic projects including IKEA Penang store (late 2018), Design Village Penang (soft opening in end-2016) and

KDU Penang University College (2Q 2019). In our view, Batu Kawan (BK)

properties stand a good chance to experience a similar price uptrend as Iskandar after the completion of these few catalytic projects there. Thus far, BK properties have recorded an average price growth of

10-20% from 2013 to 2015. This is despite the slowdown in the domestic Malaysia property market which started in 2014.

Entry of big players is a testament to BK’s prospects The entry of key property players in BK is a testament to BK’s long-term prospects. Paramount (PAR MK; Not Rated) has acquired 44 acres of freehold land in BK in 2014 while Eco World has acquired 76 acres at Simpang Ampat in 2014 and further strengthened its foothold by buying another 374.6 acres of leasehold land in BK in June 2016. These two Klang Valley-based developers have strong followings from previous buyers of their properties. Their investments in BK should help to raise the profile of BK in the domestic front and investing community.

The beneficiaries While we remain NEGATIVE on the property sector due to persisting macro headwinds and continuous stringent lending by the banks in scrutinizing buyers’ credit quality, property prices in BK could be among the early ones to rise when the market recovers. Tambun Indah (TILB MK; initiate coverage with a HOLD) is poised to be the biggest beneficiary from rising commercial activities in BK, followed by Eco World (ECW MK; BUY) and Paramount (PAR MK; Not rated).

Stock Bloomberg Mkt cap Rating Price TP Upside P/E (x) P/B (x) Div yld (%) code (USD'm) (LC) (LC) (%) 16E 17E 16E 17E 16E 17E SP Setia SPSB MK 2,033 Hold 3.19 3.63 14 12.0 9.3 0.7 0.7 4.9 6.0 Sunway SWB MK 1,378 Hold 2.99 3.37 13 10.6 10.0 0.7 0.7 2.8 3.0 UEM Sunrise UEMS MK 1,115 Hold 1.10 1.10 (0) 39.4 23.1 0.7 0.7 0.7 1.2 Eco World Dev ECW MK 843 Buy 1.35 1.56 16 24.8 21.5 0.9 0.8 0.0 0.0 Mah Sing Group MSGB MK 786 Hold 1.46 1.47 0 11.6 10.8 1.1 1.0 3.5 3.7 Tambun Indah TILB MK 134 Hold 1.40 1.53 9 5.9 7.5 1.2 1.1 6.7 5.3 Glomac GLMC MK 113 Hold 0.70 0.82 18 7.1 7.4 0.5 0.4 5.8 4.1

THIS REPORT HAS BEEN PREPARED BY MAYBANK INVESTMENT BANK BERHAD PP16832/01/2013 (031128) SEE PAGE 14 FOR IMPORTANT DISCLOSURES AND ANALYST CERTIFICATIONS Malaysia Property

Batu Kawan, poised for a 2nd wave of growth

Rising land prices in Batu Kawan

We believe Batu Kawan (BK), the third satellite town of George Town, Penang (after and ), is poised for a second wave of growth. The first wave was in 2013-2014 when accessibility and connectivity to BK improved tremendously after the official opening of the Sultan Abdul Halim Muadzam Shah Bridge (Penang second bridge). The Penang second bridge, which connects Batu Maung on Penang island to Batu Kawan on the mainland, has helped to accelerate the development of BK and transform it into a residential/commercial/industrial area, from pure agricultural land previously. The tremendous change is reflected in the land price, which rose at a CAGR of 24% from 1992 to 2016 (source: I&T Properties, companies’ announcements).

Penang second bridge which links Batu Maung (island) to Batu Kawan (mainland)

Batu Maung

Batu Kawan

Source: Google

January 10, 2016 2

Malaysia Property

Land transactions in Batu Kawan – land price has risen at 24% CAGR from 1992 to 2016 Year Transacted price (MYR Remarks psf) 1992 0.34 Compulsory acquisition of 5,260 acres by the Penang State Government at MYR15,000 per acre 2002 3.52 Land purchase of 750 acres by Abad Naluri S/B from Penang Development Corp (PDC) 2009/2010 8-10 Land acquisition process began on private lands in the Batu Kawan locality affected by the Second Penang Bridge alignment and road linkages to North South Highway and were awarded compensation at a rate of MYR8-10psf. 2011 30 Announcement of an industrial park catering for SME with 150 acres to be established at the Batu Kawan Industrial Park and 67 acres for SMEs opened for sale as backbone for solar and renewable energy industries. 2012 15.3 The purchase of 87 acres of industrial land by Robert Bosch at MYR58m 2013 37.9 39.5 acres of land deal between PDC and developer PE Land S/B for the construction of a premium retail outlet, hotel, cafes and F&B outlets 2013 35.0 The purchase of 76.5 acres of land in Simpang Ampat by Eco World for MYR116m. 2014 45.3 The sale of 245 acres of land for the purpose of development of an integrated shopping mall, anchored by an IKEA store and mixed development of offices and residences jointly developed by Aspen-Ikano. 2014 40.5 - 55 Paramount bought about 44 acres of land in Batu Kawan. 2016 44 – 56 Eco World has proposed to buy 374.6 acres of leasehold land in Batu Kawan Source: I&T Property, media reports, companies announcements

Completion of flagship projects to boost property demand

We expect the second wave of growth in BK to materialize with the completion of a few growth catalytic projects including IKEA Penang store, Design Village Penang, KDU Penang University College and Columbia Asia Hospital.

The upcoming IKEA Penang store (1.2m sq.ft.; 100%-owned by Ikano; located at the Aspen Vision City project, 80% owned by Aspen Group [unlisted] and 20% by Ikano Pte Ltd, with a GDV of MYR8b-10b) is slated for opening by late 2018 while Design Village Penang (a 400,000 sq.ft. mall which is owned by unlisted PE Land Sdn Bhd) had already conducted a soft opening in end-Nov 2016.

Elsewhere, Columbia Asia Sdn Bhd is investing MYR185m for a new hospital with 150 beds in Batu Kawan. As for KDU Penang University College (10.5-acre flagship campus) by Paramount Corp (PAR MK; Not Rated), the college will be ready by 2Q19. We understand the campus can accommodate up to 5,000 students.

Apart from these, based on the master development plan of BK, future developments could also comprise theme park, golf course and beach resort (no timeline is given on these future developments at this juncture). In our view, these commercial activities, including support industries such as hotels and restaurants in BK, will serve as an immediate population catchment and consequently boost demand for properties in BK.

January 10, 2016 3

Malaysia Property

Developments (future/under constructions) in Batu Kawan

Source: Google, property forum

January 10, 2016 4

Malaysia Property

Hijau E-Komuniti Phase 1 of Hijau E-Komuniti is under construction

Source: Maybank Kim Eng Source: Maybank Kim Eng

The site for Aspen Group’s Aspen Vision City in Batu Kawan The site for IKEA Penang store

Source: Maybank Kim Eng Source: Maybank Kim Eng

Penang Designer Village Soft opening of Penang Designer Village on 23 Nov 2016

Source: Maybank Kim Eng Source: Maybank Kim Eng

January 10, 2016 5

Malaysia Property

Huge long-term growth potentials

Penang island-Batu Kawan akin to Hong Kong-Shenzhen

In our view, Penang island - Batu Kawan (mainland) is a tad similar to the Hong Kong – Shenzhen situation, with a huge disparity in property prices. Unlike the relationship between Iskandar Malaysia (which is in Malaysia) and Singapore, Batu Kawan and Penang island are governed by the same authority, thus allowing for the better synchronization of development plans.

Given the high density and land prices on Penang island, BK can well serve a spillover of manufacturing and residential hub from the island. To illustrate the disparity in property values, current asking prices for a newly-launched mid-end apartment on the island range between MYR650-800psf (with a few high-end condominiums hitting MYR1,300-1,500psf [net]), vs MYR330-400psf in the Simpang Ampat - Batu Kawan area (Simpang Ampat is a 15 minute drive from Batu Kawan).

Similar to the initial years of Shenzhen and Iskandar Malaysia, BK has yet to reach its critical mass at the moment due to the lack of commercial activity. But it is just a matter of time before this happens. BK should breakthrough and gain more traction with the completion of the afore-mentioned flagship projects in 2016- 2019 and property prices over there should play catch-up over time.

How high can Batu Kawan’s property prices go?

According to NAPIC statistics, Iskandar Malaysia’s House Price Index (HPI) surged 45% between 2011 and 2013 (before the entry of Chinese developers at end-2013 and the slowdown in property market in 2014) with the completion of a few catalytic projects such as Legoland Malaysia Theme Park, Premium outlet, Newcastle Medical University Malaysia and Puteri Harbour Waterfront Development.

According to Samuel Tan, the director of KGV International Property Consultants S/B, the selling price for an intermediate double-storey link house in Iskandar Malaysia had jumped to about MYR500,000/unit (+>2x) in 2013, from MYR200,000/unit in 2011 while the price of a new bungalow had surged to MYR3m-5m/unit (+>2x) in 2013, from MYR1m/unit.

In our view, BK stands a good chance of seeing a similar price uptrend, though the magnitude of the increase is not known yet. According to PA International’s data, the average price growth of existing housing in Batu Kawan from 2013 to 2015 ranged from 10%-20%. This is despite the slowdown in the domestic property market and before the completion of the aforementioned catalytic projects which have already completed or should be completed by 2018-2019.

January 10, 2016 6

Malaysia Property

Johor House Price Index surged +45% between 2011 and 2013 after the completion of a few catalytic projects in Iskandar Malaysia

260

230

200

170

140

110

80

Malaysia Johor

Source: NAPIC, CEIC, Maybank Kim Eng

Entry of big players is a testament to BK’s long-term prospects

The entry of key property players in BK is a testament to BK’s long-term prospects. Paramount acquired 44 acres of freehold land in BK in 2014 for MYR40.50 psf (for a future KDU College Penang) and MYR55psf (for its mixed development project comprising apartments and shop lots there). Elsewhere, Eco World acquired 76 acres (MYR35psf) of land at Simpang Ampat in 2014 for its Eco Meadows project. It has further strengthened its foothold in BK by acquiring another 374.6 acres of leasehold land for MYR44-56 psf in Jun 2016. These two Klang Valley-based developers have strong followings from previous buyers of their properties. Their investments in BK should help to raise the profile of BK in the domestic front and investing community.

Developers around the Batu Kawan and Simpang Ampat area

GDV Developers Remarks (MYRm)

1) Tambun Indah* (TILB MK) 2,828 Integrated township development 2) Eco World Development (ECW MK) 8,680 Landed properties, shop lots, high-rise 3) Paramount Corp (PAR MK) 1,800 High-rise, shop lots, college Mixed development with office, shop lots, 4) Aspen Group (unlisted) 8,000 landed and high-rise properties 5) PE Land (unlisted) 1,000 Hotel, premium outlet, apartments

*Pearl City project only (remaining GDV) Source: Companies, media reports

January 10, 2016 7

Malaysia Property

Growing population to sustain the long-term growth of Batu Kawan townships

Hijau E-Komuniti to bring in 59,000 residents

Hijau E-Komuniti is the largest affordable housing scheme for residents in Penang. Strategically located in BK, the project is expected to provide 11,800 units of affordable housing for 59,000 residents upon its completion. The project will be implemented in five phases and phase 1 (priced between MYR72,500/unit to MYR220,000/unit for size ranging from 800 sq.ft. to 1,000 sq.ft.), is 91% completed, we understand (source: Hijau E-Komuniti, The Edge Property).

In our view, these affordable housing should not pose a threat to the existing private developers as the private developers are offering a different product segment i.e. landed and/or high-end property products. Instead, the 59,000 population would help to support the commercial activities nearby (and hence, demand on commercial properties). This is reflected in the strong take-ups of 90% and 55% in Aspen Group (unlisted)’s 441 units of shop lots (under the phase 1 namely Verve; priced between MYR1.2m/unit to MYR1.9m/unit) and Paramount’s 161 units of retail units at its Utropolis project (MYR1m/unit ASP; launched in Nov 2016), respectively. Elsewhere, Eco World (ECW MK; BUY) intends to launch the phase 1 of Eco Horizon (right opposite IKEA store) by 2017. Phase 1 of Eco Horizon will comprise landed properties (priced from MYR700,000/unit onwards) and shop units (priced from MYR1.5m/unit onwards), we understand.

Application requirements for Hijau E-Komuniti Requirements 1) Low Medium Cost units are priced at MYR72,500 while Medium Cost units are priced at MYR168,000 & MYR220,000. 2) Affordable housing is priced between MYR200,000-MYR400,000/unit. 3) Penang-born working in Penang and a registered voter in Penang or; residing in Penang for at least 5 years from the date of application and registered voter in Penang. 4) For affordable housing: - Monthly income not exceeding MYR6,000 for affordable homes priced at MYR200,000 (husband and wife). - Monthly income not exceeding MYR8,000 for affordable homes priced at MYR300,000 (husband and wife). - Monthly income not exceeding MYR10,000 for affordable homes priced at MYR400,000 (husband and wife). 5) Subject to approval from Bahagian Perumahan, Low medium cost can be sold after 10 years and Medium Cost units after 5 years upon signing of SPA. 6) Buyers are required to pay their own legal fees. 7) This is a leasehold property with a 99-lease period; all units are allocated through balloting.

Source: Hijau E-Komuniti

January 10, 2016 8

Malaysia Property

More job opportunities to attract the population

The multinational companies which are currently operating in BK include Bose Systems, Haemonetics, SanDisk, VAT, etc. Upcoming plant include Boston Scientific (a medical device manufacturer)’s regional manufacturing hub. The plant, which is slated for completion by 4Q 2017, should further enhance job opportunities in BK.

Due to limited industrial land available in the Batu Kawan Industrial Park, Penang Development Corporation (PDC; the property arm of Penang State Government) has entered into a MOU with Sime Darby to jointly develop Changkat and Byram in , an extension from the existing Batu Kawan Industrial Park, we were told. Under the JV, Sime Darby will develop the 926.8 acre land for SME industries while the PDC will develop heavy, moderate, light industry, small and medium industry and mixed development on 4,017.4 acres (source: The Edge Property). The new industrial park, which is expected to materialize by 2023, is expected to have a positive spill-over effect on Batu Kawan in terms of job opportunities and housing demand, we believe.

Boston Scientific’s factory under construction in Batu Kawan SanDisk factory in Batu Kawan Industrial Park Industrial Park

Source: Maybank Kim Eng Source: Maybank Kim Eng

Haemonetics factory in Batu Kawan Industrial Park VAT (Swiss semiconductor firm) in Batu Kawan Industrial Park

Source: Maybank Kim Eng Source: Maybank Kim Eng

January 10, 2016 9

Malaysia Property

Conclusion

2018-2019, the tipping point

A few flagship projects, which are expected to be completed by 2018-2019, will accelerate growth at Batu Kawan and should boost population there (and hence, housing demand). These include the IKEA Penang store and KDU Penang University College. While the current macro headwinds and weak buyers’ credit quality may slow down the speed of transformation of BK, BK could be one of the first few areas to transform when the property market recovers supported by rising commercial activities there.

In our view, Tambun Indah (TILB MK; initiate coverage with a HOLD with MYR1.53 TP) is posed to be the biggest beneficiary from the second wave of growth in BK, followed by Eco World (ECW MK; BUY) and Paramount (PAR MK; Not Rated).

Tambun Indah (TILB MK; Initiate coverage with HOLD; MYR1.53 TP)

Tambun Indah is a property developer with pure exposure to the mainland of Penang. It has 381 acres of remaining landbank in Simpang Ampat (15 min drive to BK) and it should benefit from greater housing demand following the completion of flagship projects in 2016-2019. We initiate coverage of TI with a HOLD and MYR1.53 RNAV-TP (on 0.5x P/RNAV). TI is a defensive play with attractive yields of 5.3% (2017) (see separate report for Tambun Indah initiation dated 10 Jan 2017).

Eco World Development (ECW MK; BUY; MYR1.56 TP)

Eco World Development is a relatively young real estate company led by the former SP Setia executives with experience in township, commercial to high-rise integrated mixed developments in Malaysia and overseas. After the successful launch of its Eco Meadows project (39.4 acres; MYR633m) in Simpang Ampat, ECW has further strengthen its foothold in the mainland of Penang by acquiring another 375 acres of land in Batu Kawan and intends to develop the land into a mixed development (majority landed properties) namely Eco Horizon and Eco Sun worth MYR7.8b in total GDV. ECW’s Penang projects account for 11.5%/3.9% of ECW’s total GDV/total sales in FY10/16.

Paramount (PAR MK; Not Rated)

Paramount is principally involved in property development and education (Sri KDU primary and secondary schools, KDU College and KDU University College). It has property projects in the Klang Valley (Shah Alam, Petaling Jaya, Kota Damansara and Cyberjaya), Penang (Batu Kawan) and (). Paramount has remaining GDV of MYR8.5b and unbilled sales of MYR415m as at Sep 2016.

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Malaysia Property

Latest 3Q16 NAPIC statistics - property market outlook remains weak

M’sia: Property sales down by -7% QoQ and -12% YoY in 3Q16 Penang: Property sales declined by -6% QoQ and -5% YoY

MYRm MYRm Change in property sales 8,000 25,000 100% 7,000 80% 20,000 6,000 60% 5,000 15,000 40% 4,000 20% 3,000 10,000 0% 2,000 5,000 -20% 1,000

0 0 -40% QoQ YoY Mar-10 Mar-11 Mar-12 Mar-13 Mar-14 Mar-15 Mar-16 -60% KL Johor Penang Malaysia

Source: CEIC, NAPIC, Maybank KE (chart) Source: CEIC, NAPIC, Maybank KE (chart)

Penang: House Price Index was up +1% QoQ, +3% YoY M’sia: Unsold stocks under construction +4% QoQ, -12% YoY

HPI 2000 = 100 350 25,000 80,000

300 70,000 20,000 60,000 250 15,000 50,000 200 40,000 150 10,000 30,000 100 20,000 5,000 50 10,000

0 0 0

Jul-07 Jul-14

Apr-09 Apr-16

Jan-11

Oct-05 Oct-12

Jun-10

Sep-15 Sep-08

Mar-05 Mar-12

Feb-08 Feb-15

Aug-11

Dec-06 Dec-13

Nov-09

May-06 May-13

Sep-16 Sep-08 Sep-09 Sep-10 Sep-11 Sep-12 Sep-13 Sep-14 Sep-15

Mar-08 Mar-09 Mar-10 Mar-11 Mar-12 Mar-13 Mar-14 Mar-15 Mar-16

Penang KL Selangor Johor Malaysia Penang Terraces High-rise Detached Semi-detached

Source: CEIC, NAPIC, Maybank KE (chart) Source: CEIC, NAPIC, Maybank KE (chart)

Penang’s unsold stocks under construction was rising faster Penang’s unsold stocks under construction was still rising +8% QoQ than the country average +4% QoQ +53% YoY compared to the country average’s -12% YoY

100% 200%

80% 150% 60% 100% 40%

20% 50%

0% 0%

-20%

Sep-10 Sep-05 Sep-06 Sep-07 Sep-08 Sep-09 Sep-11 Sep-12 Sep-13 Sep-14 Sep-15 Sep-16

Mar-11 Mar-05 Mar-06 Mar-07 Mar-08 Mar-09 Mar-10 Mar-12 Mar-13 Mar-14 Mar-15 Mar-16

Sep-06 Sep-07 Sep-08 Sep-09 Sep-10 Sep-11 Sep-12 Sep-13 Sep-14 Sep-15 Sep-16

Mar-10 Mar-11 Mar-07 Mar-08 Mar-09 Mar-12 Mar-13 Mar-14 Mar-15 Mar-16 -50% Mar-06 -40%

-60% Malaysia QoQ Penang QoQ -100% Malaysia YoY Penang YoY

Source: CEIC, NAPIC, Maybank KE (chart) Source: CEIC, NAPIC, Maybank KE (chart)

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Malaysia Property

Penang: Unsold stocks and incoming supply were on the rise Penang: Unsold stocks and incoming supply were on the rise +4% QoQ and +5% QoQ, respectively +70% YoY and +14% YoY, respectively 80% 150%

60% 100% 40%

50% 20%

0% 0%

-20%

Jun-10 Jun-05 Jun-06 Jun-07 Jun-08 Jun-09 Jun-11 Jun-12 Jun-13 Jun-14 Jun-15 Jun-16

Dec-06 Dec-14 Dec-05 Dec-07 Dec-08 Dec-09 Dec-10 Dec-11 Dec-12 Dec-13 Dec-15

Jun-11 Jun-05 Jun-06 Jun-07 Jun-08 Jun-09 Jun-10 Jun-12 Jun-13 Jun-14 Jun-15 Jun-16

Dec-11 Dec-06 Dec-07 Dec-08 Dec-09 Dec-10 Dec-12 Dec-13 Dec-14 Dec-15 -50% Dec-05 -40% Unsold (% QoQ) Incoming supply (% QoQ) Unsold (% YoY) Incoming supply (% YoY) -60% -100%

Source: CEIC, NAPIC, Maybank KE (chart) Source: CEIC, NAPIC, Maybank KE (chart)

Penang: Most of the unsold stocks under construction are from the high-rise segment (mostly located in the Penang island)

(unit) 5,500 Low cost 5,000 properties 4,500 Flat 4,000 3,500 Condominium/S A/SOHO 3,000 Single/double/3 2,500 -storey terraced 2,000 Semi-D 1,500 1,000 Detached 500 0 Cluster/

Townhouse

Jun-13 Jun-07 Jun-10 Jun-16

Sep-06 Sep-09 Sep-12 Sep-15

Mar-05 Mar-08 Mar-11 Mar-14

Dec-14 Dec-05 Dec-08 Dec-11

Source: CEIC, NAPIC, Maybank KE (chart)

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Research Offices

REGIONAL HONG KONG / CHINA INDONESIA Surachai PRAMUALCHAROENKIT (66) 2658 6300 ext 1470 Sadiq CURRIMBHOY Howard WONG Head of Research Isnaputra ISKANDAR Head of Research [email protected] Regional Head, Research & Economics (852) 2268 0648 (62) 21 8066 8680 • Auto • Conmat • Contractor • Steel (65) 6231 5836 [email protected] [email protected] [email protected] • Strategy • Strategy • Metals & Mining • Cement WONG Chew Hann, CA Suttatip PEERASUB • Oil & Gas - Regional (66) 2658 6300 ext 1430 Regional Head of Institutional Research Rahmi MARINA Benjamin HO (62) 21 8066 8689 [email protected] (603) 2297 8686 [email protected] • Media • Commerce (852) 2268 0632 [email protected] [email protected] ONG Seng Yeow • Consumer & Auto • Banking & Finance Regional Head of Retail Research Sutthichai KUMWORACHAI (65) 6231 5839 Jacqueline KO, CFA Aurellia SETIABUDI (66) 2658 6300 ext 1400 [email protected] (852) 2268 0633 [email protected] (62) 21 8066 8691 [email protected] • Consumer Staples & Durables [email protected] • Energy • Petrochem TAN Sin Mui • Property Ka Leong LO, CFA Director of Research Termporn TANTIVIVAT (852) 2268 0630 [email protected] Pandu ANUGRAH (65) 6231 5849 [email protected] (66) 2658 6300 ext 1520 • Consumer Discretionary & Auto (62) 21 8066 8688 [email protected] [email protected] ECONOMICS • Property Mitchell KIM • Infra • Construction • Transport• Telcos Suhaimi ILIAS (852) 2268 0634 [email protected] Chief Economist • Internet & Telcos Janni ASMAN Jaroonpan WATTANAWONG (62) 21 8066 8687 (66) 2658 6300 ext 1404 Singapore | Malaysia Ning MA (603) 2297 8682 [email protected] [email protected] [email protected] (852) 2268 0672 [email protected] • Cigarette • Healthcare • Retail • Transportation • Small cap Tim LEELAHAPHAN • Insurance Thailand Adhi TASMIN (66) 2658 6300 ext 1420 Sonija LI, CFA, FRM (62) 21 8066 8694 VIETNAM (852) 2268 0641 [email protected] [email protected] [email protected] LE Hong Lien, ACCA • Gaming • Plantations JUNIMAN Head of Institutional Research (84) 8 44 555 888 x 8181 Chief Economist, BII Stefan CHANG, CFA Anthony LUKMAWIJAYA [email protected] Indonesia (852) 2268 0675 [email protected] (62) 21 8066 8690 • Strategy • Consumer • Diversified • Utilities (62) 21 29228888 ext 29682 • Technology – Regional [email protected] [email protected] • Aviation INDIA THAI Quang Trung, CFA, Deputy Manager, STRATEGY PHILIPPINES Institutional Research Jigar SHAH Head of Research (84) 8 44 555 888 x 8180 Michael BENGSON Head of Research Sadiq CURRIMBHOY (91) 22 6623 2632 [email protected] [email protected] (63) 2 849 8840 • Strategy • Oil & Gas • Automobile • Cement • Real Estate • Construction • Materials Global Strategist [email protected] (65) 6231 5836 [email protected] • Strategy • Utilities • Conglomerates • Telcos Vishal MODI Le Nguyen Nhat Chuyen

Willie CHAN (91) 22 6623 2607 [email protected] (84) 8 44 555 888 x 8082 Lovell SARREAL [email protected] Hong Kong / Regional • Banking & Financials (63) 2 849 8841 • Oil & Gas (852) 2268 0631 [email protected] [email protected] Neerav DALAL • Consumer • Media • Cement NGUYEN Thi Ngan Tuyen, Head of Retail Research MALAYSIA (91) 22 6623 2606 [email protected] (84) 8 44 555 888 x 8081 • Software Technology • Telcos Rommel RODRIGO [email protected] WONG Chew Hann, CA Head of Research (63) 2 849 8839 (603) 2297 8686 [email protected] • Food & Beverage • Oil&Gas • Banking SINGAPORE [email protected] • Strategy • Conglomerates • Property • Gaming TRINH Thi Ngoc Diep Neel SINHA Head of Research • Ports/ Logistics Desmond CH’NG, ACA (84) 4 44 555 888 x 8208 (603) 2297 8680 (65) 6231 5838 [email protected] Katherine TAN [email protected] [email protected] • Strategy (63) 2 849 8843 • Technology • Utilities • Construction • Banking & Finance • SMID Caps – Regional [email protected] LIAW Thong Jung Gregory YAP • Banks • Construction PHAM Nhat Bich (603) 2297 8688 [email protected] (65) 6231 5848 [email protected] (84) 8 44 555 888 x 8083 • Oil & Gas Services- Regional • SMID Caps THAILAND [email protected] • Technology & Manufacturing • Telcos • Consumer • Manufacturing • Fishery ONG Chee Ting, CA Maria LAPIZ Head of Institutional Research (603) 2297 8678 [email protected] Derrick HENG, CFA Dir (66) 2257 0250 | (66) 2658 6300 ext 1399 • Plantations - Regional (65) 6231 5843 [email protected] [email protected] NGUYEN Thi Sony Tra Mi (84) 8 44 555 888 x 8084 Mohshin AZIZ • Transport • Property • REITs (Office) • Strategy • Consumer • Materials • Ind. Estates [email protected] (603) 2297 8692 [email protected] John CHEONG, CFA • Port operation • Pharmaceutical • Aviation - Regional • Petrochem Sittichai DUANGRATTANACHAYA (65) 6231 5845 [email protected] (66) 2658 6300 ext 1393 • Food & Beverage YIN Shao Yang, CPA • Small & Mid Caps • Healthcare [email protected] (603) 2297 8916 [email protected] • Services Sector • Transport TRUONG Quang Binh Ng Li Hiang • Gaming – Regional • Media (84) 4 44 555 888 x 8087 (65) 6231 5840 [email protected] Yupapan POLPORNPRASERT [email protected] TAN Chi Wei, CFA • Banks (603) 2297 8690 [email protected] (66) 2658 6300 ext 1395 • Rubber plantation • Tyres and Tubes • Oil&Gas • Power • Telcos [email protected] • Oil & Gas WONG Wei Sum, CFA (603) 2297 8679 [email protected] Tanawat RUENBANTERNG • Property (66) 2658 6300 ext 1394 LEE Yen Ling [email protected] (603) 2297 8691 [email protected] • Banks & Diversified Financials • Building Materials • Glove • Ports • Shipping Vorapoj Hongpinyo Ivan YAP (66) 2658 6300 ext 1392 (603) 2297 8612 [email protected] [email protected] • Automotive • Semiconductor • Technology • Real Estate & Contractors Kevin WONG (603) 2082 6824 [email protected] Sukit UDOMSIRIKUL Head of Retail Research • REITs • Consumer Discretionary (66) 2658 6300 ext 5090 [email protected] LIEW Wei Han (603) 2297 8676 [email protected] Mayuree CHOWVIKRAN • Consumer Staples (66) 2658 6300 ext 1440 [email protected] Tee Sze Chiah Head of Retail Research • Strategy (603) 2297 6858 [email protected] Padon VANNARAT (66) 2658 6300 ext 1450 [email protected] • Strategy

January 10, 2016 13

Malaysia Property

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 fluctuate 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 actual 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 after 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 issuers 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. Without 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 contact 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 institutional 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 limited 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 whatsoever 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 MBKET 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 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, MBKET does not confirm, verify, or certify the accuracy and completeness 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. 777 Third Avenue 21st Floor New York, New York 1- (212) 688-8886 and not with, the issuer of this report.

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Malaysia Property

UK This document is being distributed by Maybank Kim Eng Securities (London) Ltd (“Maybank KESL”) which is authorized and regulated, 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 for 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 for 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. INZ000010538). 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 Services 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 herein 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 10 January 2017, 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 10 January 2017, KESHK and the authoring analyst do not have any interest in any companies recommended in this research report.

India: As of 10 January 2017, and at the end of the month immediately preceding the date of publication of the research report, KESI, authoring analyst or 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 from 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 report.

Reminder Structured securities are complex instruments, typically involve a high degree of risk and are intended for sale only to sophisticated investors who 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.

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 777 Third Avenue, 21st Floor 33rd Floor, Menara Maybank, Singapore 059304 77 Queen Victoria Street New York, NY 10017, U.S.A. 100 Jalan Tun Perak, London EC4V 4AY, UK 50050 Tel: (65) 6336 9090 Tel: (212) 688 8886 Tel: (603) 2059 1888; Tel: (44) 20 7332 0221 Fax: (212) 688 3500 Fax: (603) 2078 4194 Fax: (44) 20 7332 0302

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 Level 30, Sentral Senayan III, 22nd Floor 2nd Floor, The International, 59000 Kuala Lumpur Three Pacific Place, Jl. Asia Afrika No. 8 16, Maharishi Karve Road, Tel: (603) 2297 8888 1 Queen’s Road East, Gelora Bung Karno, Senayan Churchgate Station, Fax: (603) 2282 5136 Hong Kong Jakarta 10270, Indonesia Mumbai City - 400 020, India

Tel: (852) 2268 0800 Tel: (62) 21 8066 8500 Tel: (91) 22 6623 2600 Fax: (852) 2877 0104 Fax: (62) 21 8066 8501 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 Scott Kinnear-Nock [email protected] [email protected] Tel: (62) 21 2557 1177 Tel: (44) 207-332-0221

New York India Andrew Dacey Manish Modi [email protected] [email protected] Tel: (212) 688 2956 Tel: (91)-22-6623-2601

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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