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Thailand T d Com mpany Guide G CP C A ALL Refer R to impo ortant disclossures at the end of this rep port Ve ersion 4 | Bloom mberg: CPALL TB T | Reuters: CP PALL.BK DB BS Group R Research . Equity E 31 Aug A 2016 BUY B Persistent sttrength La ast Traded Pricee: Bt61.25 (SEET : 1,546.13) Prrice Target 12-mth: Bt75.00 (22% upside) (Prev Bt60.00)) Po otential Catalyst: Healthy SSSG, aggressive a store expansion An nalyst Na amida ARTISPON NG +66 2657 78 833 [email protected] m What’s W New w 2H16 SSSG to remain strrong given itss successful stamp camp paign More aggre essive branch expansion to o reach 12,00 00 stores in the next three years Maintain po ositive view on o CPALL As we roll o over our valu uation window w to FY17F, our TP risess to Bt75.0 Prrice Relative Fo orecasts and Va aluation FY Y Dec (Bt m) 2014 4A 2015A 2016F 201 17F Re evenue 357,766 391,817 436,663 4 492,0 038 EB BITDA 26,8 802 32,554 35,880 41,0 077 Prre-tax Profit 12,589 16,884 19,963 25,0 017 10,200 13,682 16,219 20,0 Ne et Profit 094 9,8 Ne et Pft (Pre Ex.) 823 13,687 16,219 20,0 094 Ne et Pft Gth (Pre-eex) (%) (10 0.7) 39.3 18.5 23 3.9 1.52 EP PS (Bt) 1.13 1.80 2..24 1.52 1.09 1.80 2..24 EP PS Pre Ex. (Bt) 19 24 EP PS Gth Pre Ex (% %) (1 11) 39 1.80 2..24 1.52 Diluted EPS (Bt) 1.13 1.26 1..57 1.07 Ne 0.82 et DPS (Bt) 4.82 5..49 4.16 3.43 BV V Per Share (Bt) PE E (X) 33.9 27 54 4.2 40.2 7.4 PE E Pre Ex. (X) 56 6.0 40.2 33.9 27 7.4 P//Cash Flow (X) 20 0.9 17.5 17.9 16 6.1 EV V/EBITDA (X) 26 6.9 22.2 20.0 17 7.4 Ne et Div Yield (%) 1 1.3 1.7 2.1 2 2.6 P//Book Value (X) 17 7.9 14.7 12.7 11 1.2 Ne et Debt/Equity (X X) 4 4.7 4.0 3.4 3 3.0 RO OAE (%) 34 4.3 40.2 40.2 43 3.4 Ea arnings Rev (%): Co onsensus EPS (Bt): Other Broker Recss: B: 24 0 1.80 S: 1 0 2..16 H H: 3 So ource of all data on this page: Company, Co DBS Vickers, Vi Bloomberrg Fin nance L.P ASSIAN INSIGHTS ed: CK K / sa:CS, PY urable long-term outlook. Wee remain positive on CPALL Favou given its strong grow wth outlook, uunderpinned by improvemen nts in corre operations and a margins, a nd deleveragin ng. CPALL’s opera ations are expected to be resiilient, as food products are itts majorr revenue sourcce while consuumers tend to spend on smallticket items when co onsumption sloows down. CP PALL offers a nt ROE of 40.2% in FY16F. decen Driven n by aggressive e expansion pl an. Despite the slow domesttic econo omic recovery, CPALL continuues to aggressively expand th he numb ber of outlets. It plans to roll out at least 70 00 stores p.a. and a has a target to reach 12,000 storees in the next three t years. Th he s are likelyy to be on a staandalone basiss, with more new stores than half h in provincial regions to ccapture the gro owing demand d. As at end-2Q16, CP PALL has a totaal of 9,252 outtlets nationwid de, 4 in Bang gkok and surbuurban areas an nd the remaining with 44.5% in pro ovincial regionss. We expect C CPALL’s same-sstore-salesgrowtth (SSSG) to be e resilient, as cc.71% of its prroduct mix is generrated from stap ple food produucts. nding margins. Despite press ures for its cassh-and-carry Expan busine ess, consolidatted CPALL’s grross margin is projected p to sttill expan nd by 0.2ppt to o 22% in FY166F, thanks to economies e of scale from a larger network n and inncreasing conttribution from eals and health h higher-margin products such as reeady-to-eat me and beauty b items. Additionally, A CPPALL will bene efit from the declin ne in utilities exxpenses and a smaller cost burden from acquiring MAKRO in n FY13. As CPA ALL has complleted its loan refina ancing by issuin ng debentures to replace hig gh-cost bank loans,, there will be less expenses ffrom advisory fees, refinancing fees, and a hedging fe ees on USD brridging loans. ation: Valua Our TP T of Bt75 is ba ased on DCF vaaluation (WAC CC 10.4%, termin nal growth rate 2%). Key Risks R to Our View: V Key risks are (i) delays in store exppansion, (ii) we eaker-thanexpeccted consumer confidence, a nd iii) intense competition. At A Glance G Issued Capital (m shrs)) 8,9 983 C (Btm/US$m) 550,215 / 15,9 916 Mkt. Cap Major Shareholders (% %) C.P. Merchandising M (%) 30.5 Charo oen Pokphand Group G (%) 10.2 Thai NDVR (%) 4.8 Free Float (%) 58.3 3m Avvg. Daily Val (US$ $m) 38.4 ICB Ind dustry : Consum mer Services / Foood & Drug Retailers VICKER RS SECURITTIES Company Guide CP ALL WHAT’S NEW Reiterate positive view on CPALL CVS’ SSSG to remain strong in 2H16. Thailand’s economic recovery has been slow, but we expect the recovery to gain traction as farm income has improved given the alleviated drought impact and a rise in agricultural prices such as rubber, palms, fruits, sugar, etc. On top of the improving domestic consumption spending, CPALL’s marketing activities (its stamp campaign runs from 26 July to 25 Nov) will provide another big boost to the SSSG of its convenient store business (CVS). So far, this year’s stamp campaign has done better than last year’s. Management has maintained its CVS’ SSSG of 3-5% in 2016 (vs our assumption of 3%). Favourable long-term outlook. Despite strong competition in the cash-and-carry business, we expect the positive momentum to continue for CPALL in view of its dominance in the CVS market, continuous branch expansion, strong growth outlook from margin expansion and lower interest expense, and decent ROE. Maintain BUY. As we roll over our valuation window to FY17F, our TP rises to Bt75. We reiterate our BUY call on CPALL. CPALL: CVS quarterly SSSG 6.0% 5.0% 4.0% 2.6% More aggressive branch expansion milestone. CPALL plans to open c.700 CVS stores in 2016 and has target to reach 10,000 stores by 2018. In 1H16, CPALL opened 420 outlets and its network stood at 9,252 stores as at end-2Q16. Recently, its management has set a new milestone of 12,000 stores in the next three years. We see this as a positive development as it reflects easing concerns over the market saturation point issue. Management has seen no signs of slowing down in store expansion and believes that opportunities still exist even in Bangkok from the upcoming new mass transit lines. Additionally, as it uses the small-sized CVS store format, we believe its aggressive outlet expansion is achievable. 2.0% 1.1% 0.5% 1.6% 1.2% 0.3% 0.0% 1Q14 -2.0% 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 -1.1% -3.6% -4.0% -4.5% -6.0% Source: Company, DBS Vickers Expect wider margins. We expect strong growth in ready-toeat food, health and beauty products, and drinks at its cafe corner which yield relatively higher margins, to continue given the tilt in consumer lifestyles towards convenience. Meanwhile, SG&A to sales may climb on the back of CVS’s marketing activities but this would be offset by an increase in other income from higher partner participation in promotion campaigns. ASIAN INSIGHTS Page 2 VICKERS SECURITIES Com mpany Guid de CP ALLL CR RITICAL DATA A POINTS TO WATCH Ea arnings Drive ers: Ag ggressive outleet expansion. Ass at end 2Q16, CPALL has a total of 9,252 outlets nation nwide, with 44.5% in B Bangkok and surburban area as, and the re emaining in pro ovincial regionss. Despite the slow domesticc ecconomy recoveery, CPALL will continue to aggressively exp pand itss network. It taargets to add at a least 700 ou utlets p.a. and has a milestone to reaach 12,000 sto ores in the nextt three years. O Of the to otal additional 700 stores p.a., 90% of the new stores wo ould be e on a standalo one basis whilee another 10% % will be at PTTT gas sta ations. Furtherrmore, more th han half of new w outlets woulld be in provincial areas as there is ample a potentia al demand with h much higher population per sttore compared d to Bangkok. Same-sttore-sales (%) Spending g per ticket (Bt) SS SSG in positivee territory. w Am mid weak conssumption pressure, Thai consumers are now more cautious aand are spendin ng on smaller-ticket items an nd making more freequent shopping trips. This trend t is favouraable fo or convenience stores and mini-supermarke ets formats. CPPALL ha as been deliverring positive SSSSG, outperforrming other rettailers who have mostly registered neegative growth h. As c.71% off its prroduct mix is g generated from m food (ready-tto-eat meals, prrocessed foodss, bakery, snacks, beverages, etc.) which is a sta aple, we expecct CPALL’s opeerations and SS SSG to be resil ient. We W estimate CPPALL to deliver SSSG of 3% in n FY16F, an im mprovement fro om 0.9% in FY Y15. Custom mers/store/day So olid gross marg gin. We W expect econ nomies of scalee from outlet expansion and larger co ontribution from higher-marg gin products to o support CPA ALL’s margins. With a larger networrk, CPALL will be b leveraging iits high bargaining power on sup pply contracts. The group willl co ontinue to add high-margin product p lines like ready-to-eaat meals and from the health and d beauty categ gory which yielld higher margins tthan other pro oducts. Neew Stores Lo ower financing g expenses. Allthough CPALLL has launched d aggressive promotion camp paigns am mid weak conssumption, an in ncrease in othe er income sho uld more than offseet rising SG&A to total sales. Meanwhile, ele ectricity chargees which accou unt for 10% of o its SG&A exp penses were lower due to the declinee in oil prices. Additionally, A th he exxpenses related d to the acquissition of MAKR RO such as finaancial management fees and forex costs should alsso decline. CPA ALL co ompleted its loan refinancing g in 2Q15 by isssuing debentu ures to re eplace high-cosst bank loans. Total sto ores at year end d Source: Companyy, DBS Vickers A ASIAN INSIG GHTS VICKERS S SECURITIEES Page 3 Company C Gu uide CP C ALL Ba alance Sheet:: Exxpect gearing tto decline. Following the MA AKRO acquisitio on, CP PALL’s net geaaring surged to o 4.9x in FY13. Nonetheless, its net ge earing dropped d to 4.2x as at end 2Q16, thanks to the naature off its business – being cash geenerative and providing p good d levvels of free cassh flow. CPALLL targets to low wer its net deb bt to eq quity ratio to 2 2.5x in FY17F. Sh hare Price Driivers: Re esilient SSSG. D Despite weak domestic d economy, CPALL’s SSSG momentum is exxpected to rem main positive, thanks t to its le ading po osition in the cconvenient storre market and attractive prod ducts an nd sales promo otions. Consum mers tend to sp pend on small--ticket ite ems and makin ng more frequeent shopping trips t which aree favourable for convenience sto ores and mini-supermarkets fo ormats. Going fforward, domeestic consumpttion should im mprove slo owly, supporteed by the goveernment’s stimu ulus packages and pu ublic infrastruccture spending. Leverage & A Asset Turnover (x) Capitall Expenditure Ke ey Risks: Weak W consumerr confidence. CPALL’s C busine ess may suffer if co onsumer confid dence (as meassured by the Consumer C Co onfidence Indeex) in Thailand weakens beca ause of an ecconomic slowd down or domesstic political un nrest. In any caase, CP PALL tends to adjust its prod duct mix in resp ponse to chang ging ecconomic condittions. R ROE (%) Un nfavourable w weather conditions. Customerr traffic at CPA ALL’s sto ores are mostlyy walk-ins. Unfavourable we eather conditio ons co ould deter such h customers. CPALL C normallyy registers softeer sa ales during the rainy season. Co ompany Back kground CP P ALL PCL wass established in n 1988 and is a flagship com pany off Charoen Pokp phand Group’ss marketing an nd distribution bu usiness. It is the leading operrator of conven nience store ch hains (7-Eleven) in Thaailand with thee highest mark ket share. Ad dditionally, it aalso operates other o related businesses such h as bill payment collection service, manufacturin ng and sales off fro ozen foods and bakery, etc. Forwarrd PE Band (x) PB Band (x) Source: Companyy, DBS Vickers A ASIAN INSIG GHTS Pa age 4 VICKERS S SECURITIEES Company Guide CP ALL Key Assumptions FY Dec 2013A 2014A 2015A 2016F 2017F Same-store-sales (%) Spending per ticket (Bt) Customers/store/day New Stores Total stores at year end 5.70 62.0 1,294 607 7,429 (2.6) 63.0 1,252 698 8,127 0.90 63.0 1,261 705 8,832 3.00 64.3 1,267 700 9,532 5.00 65.6 1,274 700 10,232 Income Statement (Btm) FY Dec 2013A 2014A 2015A 2016F 2017F 272,286 (210,657) 61,629 (46,549) 15,079 0.0 0.0 (1,736) (498) 12,845 (2,255) (88.0) 0.0 10,503 11,001 19,780 357,766 (281,443) 76,323 (55,830) 20,493 0.0 0.0 (8,281) 377 12,589 (2,270) (119) 0.0 10,200 9,823 26,802 391,817 (306,519) 85,299 (60,030) 25,269 0.0 0.0 (8,381) (4.2) 16,884 (3,066) (135) 0.0 13,682 13,687 32,554 436,663 (340,760) 95,903 (67,961) 27,942 0.0 0.0 (7,979) 0.0 19,963 (3,593) (151) 0.0 16,219 16,219 35,880 492,038 (383,087) 108,952 (76,582) 32,369 0.0 0.0 (7,352) 0.0 25,017 (4,753) (170) 0.0 20,094 20,094 41,077 44.3 19.2 14.1 (0.1) 31.4 35.5 35.9 (10.7) 9.5 21.5 23.3 39.3 11.4 10.2 10.6 18.5 12.7 14.5 15.8 23.9 22.6 5.5 3.9 37.6 5.6 9.2 73.6 8.7 21.3 5.7 2.9 34.3 3.2 6.8 72.1 2.5 21.8 6.4 3.5 40.2 4.2 8.2 70.0 3.0 22.0 6.4 3.7 40.2 4.9 9.1 70.0 3.5 22.1 6.6 4.1 43.4 5.9 10.6 70.0 4.4 Revenue Cost of Goods Sold Gross Profit Other Opng (Exp)/Inc Operating Profit Other Non Opg (Exp)/Inc Associates & JV Inc Net Interest (Exp)/Inc Exceptional Gain/(Loss) Pre-tax Profit Tax Minority Interest Preference Dividend Net Profit Net Profit before Except. EBITDA Growth Revenue Gth (%) EBITDA Gth (%) Opg Profit Gth (%) Net Profit Gth (Pre-ex) (%) Margins & Ratio Gross Margins (%) Opg Profit Margin (%) Net Profit Margin (%) ROAE (%) ROA (%) ROCE (%) Div Payout Ratio (%) Net Interest Cover (x) Source: Company, DBS Vickers ASIAN INSIGHTS VICKERS SECURITIES Page 5 Company Guide CP ALL Quarterly / Interim Income Statement (Btm) FY Dec 2Q2015 3Q2015 4Q2015 1Q2016 2Q2016 Revenue Cost of Goods Sold Gross Profit Other Oper. (Exp)/Inc Operating Profit Other Non Opg (Exp)/Inc Associates & JV Inc Net Interest (Exp)/Inc Exceptional Gain/(Loss) Pre-tax Profit Tax Minority Interest Net Profit Net profit bef Except. EBITDA 97,292 (76,135) 21,158 (15,121) 6,037 0.0 0.0 (2,116) (36.1) 3,884 (716) (29.0) 3,140 3,176 7,828 96,364 (75,068) 21,296 (15,276) 6,020 0.0 0.0 (2,031) 25.5 4,015 (718) (38.6) 3,258 3,232 7,906 102,608 (80,191) 22,417 (15,710) 6,707 0.0 0.0 (2,035) 25.7 4,697 (790) (30.2) 3,877 3,851 8,410 104,969 (82,253) 22,716 (15,707) 7,009 0.0 0.0 (2,009) 58.6 5,059 (960) (34.5) 4,065 4,006 8,949 109,998 (86,035) 23,962 (16,877) 7,086 0.0 0.0 (2,048) 7.69 5,046 (817) (32.6) 4,196 4,188 9,025 1.8 (4.7) (7.2) (7.4) (1.0) 1.0 (0.3) 1.8 6.5 6.4 11.4 19.1 2.3 6.4 4.5 4.0 4.8 0.9 1.1 4.5 21.7 6.2 3.2 22.1 6.2 3.4 21.8 6.5 3.8 21.6 6.7 3.9 21.8 6.4 3.8 2013A 2014A 2015A 2016F 2017F Net Fixed Assets Invts in Associates & JVs Other LT Assets Cash & ST Invts Inventory Debtors Other Current Assets Total Assets 71,273 0.0 178,773 25,682 19,916 848 7,516 304,008 80,201 0.0 181,525 33,436 22,167 910 8,170 326,410 89,447 0.0 182,663 22,921 25,072 854 8,126 329,083 98,168 0.0 182,678 19,253 28,383 1,365 8,939 338,785 106,053 0.0 182,697 11,114 31,982 1,538 9,832 343,216 ST Debt Creditor Other Current Liab LT Debt Other LT Liabilities Shareholder’s Equity Minority Interests Total Cap. & Liab. 135,171 54,734 10,893 50,166 20,074 28,747 4,223 304,008 19,701 59,312 13,002 178,779 20,558 30,782 4,276 326,410 23,803 62,624 14,705 165,684 20,593 37,349 4,326 329,083 23,995 71,812 16,119 158,570 20,593 43,327 4,370 338,785 23,117 80,732 17,671 147,335 20,593 49,355 4,413 343,216 (37,347) (159,654) 0.9 77.4 25.8 1.4 0.3 0.1 4.8 5.6 6.1 1.6 (41,066) (165,044) 0.9 75.6 27.9 1.1 0.7 0.4 4.7 5.4 8.1 2.2 (43,276) (166,566) 0.8 74.4 28.8 1.2 0.6 0.2 4.0 4.5 9.3 2.3 (49,245) (163,312) 0.9 73.7 29.3 1.3 0.5 0.2 3.4 3.8 9.0 2.5 (55,051) (159,338) 1.1 74.4 29.4 1.4 0.4 0.1 3.0 3.2 9.7 2.6 Growth Revenue Gth (%) EBITDA Gth (%) Opg Profit Gth (%) Net Profit Gth (Pre-ex) (%) Margins Gross Margins (%) Opg Profit Margins (%) Net Profit Margins (%) Balance Sheet (Btm) FY Dec Non-Cash Wkg. Capital Net Cash/(Debt) Debtors Turn (avg days) Creditors Turn (avg days) Inventory Turn (avg days) Asset Turnover (x) Current Ratio (x) Quick Ratio (x) Net Debt/Equity (X) Net Debt/Equity ex MI (X) Capex to Debt (%) Z-Score (X) Source: Company, DBS Vickers ASIAN INSIGHTS Page 6 VICKERS SECURITIES Com mpany Guid de CP ALLL Ca ash Flow Statem ment (Btm) FY Y Dec Prre-Tax Profit Dep. & Amort. ax Paid Ta Assoc. & JV Inc/(lo oss) Chg in Wkg.Cap. CF Other Operating C Net Operating CFF Capital Exp.(net) Other Invts.(net) nvts in Assoc. & JJV In Div from Assoc & JV Other Investing CF Net Investing CF Div Paid bt Chg in Gross Deb Capital Issues CF Other Financing C Net Financing CF ments Currency Adjustm Chg in Cash Opg CFPS (Bt) Frree CFPS (Bt) 2013A 2014A 20 015A 2016F 2017F F 12,845 4,700 (2,255) 0.0 8,675 0.0 21,624 (11,272) (180,136) 0.0 0.0 (1.0) (191,410) (8,084) 181,000 0.0 (1,739) 171,177 155 1,546 1.44 1.15 12,589 1 6,310 (2,270) ( 0.0 3,850 0.0 26,371 2 (16,019) (182) 0.0 0.0 242 (15,958) (8,085) ( 12,798 1 0.0 (7,543) ( (2,830) ( (10.6) 7,572 2.51 1.15 16 ,884 7 ,285 (3, 066) 0.0 5 ,065 0.0 31 ,419 (17, 549) 68.3) (6 0.0 0.0 208 (17, 409) (7, 186) (9, 177) 0.0 (8, 416) (24, 780) 83.9 (10, 686) 2.93 1.54 19,963 7,939 92) (3,59 0.0 0 2,232 0.0 0 30,705 (16,45 50) 0.0 0 0.0 0 0.0 0 212 (16,23 38) (11,35 53) (6,92 21) 0.0 0 0.0 0 (18,27 75) 0.0 0 (3,80 08) 3.17 1.59 25,017 7 8,708 8 (4,752)) 0.0 0 2,715 5 0.0 0 34,119 9 (16,450)) 0.0 0 0.0 0 0.0 0 216 6 (16,234)) (14,066)) (12,113)) 0.0 0 0.0 0 (26,179)) 0.0 0 (8,294)) 3.49 9 1.97 7 So ource: Company, y, DBS Vickers Ta arget Price & Ra atings History So ource: DBS Vickeers Analyst: An Namidaa ARTISPONG Co orporate Govern nance CG Rating g 2015 An nti-corruption Prrogress Indicatorr Co orporate Govern nance CG Rating g Score 90-100 Declared Certiffied Range Number of Logo o 80-89 Description Excellent Very Good 70-79 Good 60-69 Satisfactory 50-59 <50 A ASIAN INSIG GHTS No o logo given Pass N/A VICKERS S SECURITIEES Page 7 Company Guide CP ALL DBS Vickers recommendations are based an Absolute Total Return* Rating system, defined as follows: STRONG BUY (>20% total return over the next 3 months, with identifiable share price catalysts within this time frame) BUY (>15% total return over the next 12 months for small caps, >10% for large caps) HOLD (-10% to +15% total return over the next 12 months for small caps, -10% to +10% for large caps) FULLY VALUED (negative total return i.e. > -10% over the next 12 months) SELL (negative total return of > -20% over the next 3 months, with identifiable catalysts within this time frame) Share price appreciation + dividends Completed Date: 31 Aug 2016 06:08:18 Dissemination Date: 31 Aug 2016 06:35:28 GENERAL DISCLOSURE/DISCLAIMER This report is prepared by DBS Vickers Securities (Thailand) Co, Ltd. This report is solely intended for the clients of DBS Bank Ltd, DBS Vickers Securities (Singapore) Pte Ltd, its respective connected and associated corporations and affiliates only and no part of this document may be (i) copied, photocopied or duplicated in any form or by any means or (ii) redistributed without the prior written consent of DBS Vickers Securities (Thailand) Co, Ltd. The research set out in this report is based on information obtained from sources believed to be reliable, but we (which collectively refers to DBS Bank Ltd, its respective connected and associated corporations, affiliates and their respective directors, officers, employees and agents (collectively, the “DBS Group”)) do not make any representation or warranty as to its accuracy, completeness or correctness. Opinions expressed are subject to change without notice. This document is prepared for general circulation. Any recommendation contained in this document does not have regard to the specific investment objectives, financial situation and the particular needs of any specific addressee. This document is for the information of addressees only and is not to be taken in substitution for the exercise of judgement by addressees, who should obtain separate independent legal or financial advice. The DBS Group accepts no liability whatsoever for any direct, indirect and/or consequential loss (including any claims for loss of profit) arising from any use of and/or reliance upon this document and/or further communication given in relation to this document. This document is not to be construed as an offer or a solicitation of an offer to buy or sell any securities. The DBS Group, along with its affiliates and/or persons associated with any of them may from time to time have interests in the securities mentioned in this document. The DBS Group may have positions in, and may effect transactions in securities mentioned herein and may also perform or seek to perform broking, investment banking and other banking services for these companies. Any valuations, opinions, estimates, forecasts, ratings or risk assessments herein constitutes a judgment as of the date of this report, and there can be no assurance that future results or events will be consistent with any such valuations, opinions, estimates, forecasts, ratings or risk assessments. The information in this document is subject to change without notice, its accuracy is not guaranteed, it may be incomplete or condensed and it may not contain all material information concerning the company (or companies) referred to in this report and the DBS Group is under no obligation to update the information in this report. This publication has not been reviewed or authorized by any regulatory authority in Singapore, Hong Kong or elsewhere. There is no planned schedule or frequency for updating research publication relating to any issuer. The valuations, opinions, estimates, forecasts, ratings or risk assessments described in this report were based upon a number of estimates and assumptions and are inherently subject to significant uncertainties and contingencies. It can be expected that one or more of the estimates on which the valuations, opinions, estimates, forecasts, ratings or risk assessments were based will not materialize or will vary significantly from actual results. Therefore, the inclusion of the valuations, opinions, estimates, forecasts, ratings or risk assessments described herein IS NOT TO BE RELIED UPON as a representation and/or warranty by the DBS Group (and/or any persons associated with the aforesaid entities), that: (a) (b) such valuations, opinions, estimates, forecasts, ratings or risk assessments or their underlying assumptions will be achieved, and there is any assurance that future results or events will be consistent with any such valuations, opinions, estimates, forecasts, ratings or risk assessments stated therein. Please contact the primary analyst for valuation methodologies and assumptions associated with the covered companies or price targets. Any assumptions made in this report that refers to commodities, are for the purposes of making forecasts for the company (or companies) mentioned herein. They are not to be construed as recommendations to trade in the physical commodity or in the futures contract relating to the commodity referred to in this report. DBS Vickers Securities (USA) Inc ("DBSVUSA")"), a U.S.-registered broker-dealer, does not have its own investment banking or research department, has not participated in any public offering of securities as a manager or co-manager or in any other investment banking transaction in the past twelve months and does not engage in market-making. ASIAN INSIGHTS Page 8 VICKERS SECURITIES Company Guide CP ALL ANALYST CERTIFICATION The research analyst(s) primarily responsible for the content of this research report, in part or in whole, certifies that the views about the companies and their securities expressed in this report accurately reflect his/her personal views. The analyst(s) also certifies that no part of his/her compensation was, is, or will be, directly, or indirectly, related to specific recommendations or views expressed in the report. The DBS Group has procedures in place to eliminate, avoid and manage any potential conflicts of interests that may arise in connection with the production of research reports. As of 31 Aug 2016, the analyst(s) and his/her spouse and/or relatives who are financially dependent on the analyst(s), do not hold interests in the securities recommended in this report (“interest” includes direct or indirect ownership of securities). The research analyst(s) responsible for this report operates as part of a separate and independent team to the investment banking function of the DBS Group and procedures are in place to ensure that confidential information held by either the research or investment banking function is handled appropriately. COMPANY-SPECIFIC / REGULATORY DISCLOSURES 1. DBS Vickers Securities (Thailand) Co, Ltd and its subsidiaries do not have a proprietary position in the securities recommended in this report as of 30 Aug 2016. Compensation for investment banking services: 2. DBSVUSA does not have its own investment banking or research department, nor has it participated in any public offering of securities as a manager or co-manager or in any other investment banking transaction in the past twelve months. Any US persons wishing to obtain further information, including any clarification on disclosures in this disclaimer, or to effect a transaction in any security discussed in this document should contact DBSVUSA exclusively. RESTRICTIONS ON DISTRIBUTION General 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. 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Wong Ming Tek, Executive Director, ADBSR Singapore This report is distributed in Singapore by DBS Bank Ltd (Company Regn. No. 196800306E) or DBSVS (Company Regn No. 198600294G), both of which are Exempt Financial Advisers as defined in the Financial Advisers Act and regulated by the Monetary Authority of Singapore. DBS Bank Ltd and/or DBSVS, may distribute reports produced by its respective foreign entities, affiliates or other foreign research houses pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the report is distributed in Singapore to a person who is not an Accredited Investor, Expert Investor or an Institutional Investor, DBS Bank Ltd accepts legal responsibility for the contents of the report to such persons only to the extent required by law. Singapore recipients should contact DBS Bank Ltd at 6327 2288 for matters arising from, ASIAN INSIGHTS VICKERS SECURITIES Page 9 Company Guide CP ALL or in connection with the report. 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The research analyst(s) named on this report are not registered as research analysts with FINRA and are not associated persons of DBSVUSA. The research analyst(s) are not subject to FINRA Rule 2241 restrictions on analyst compensation, communications with a subject company, public appearances and trading securities held by a research analyst. This report is being distributed in the United States by DBSVUSA, which accepts responsibility for its contents. This report may only be distributed to Major U.S. Institutional Investors (as defined in SEC Rule 15a-6) and to such other institutional investors and qualified persons as DBSVUSA may authorize. Any U.S. person receiving this report who wishes to effect transactions in any securities referred to herein should contact DBSVUSA directly and not its affiliate. Other jurisdictions In any other jurisdictions, except if otherwise restricted by laws or regulations, this report is intended only for qualified, professional, institutional or sophisticated investors as defined in the laws and regulations of such jurisdictions. DBS Vickers Securities (Thailand) Co, Ltd 989 Siam Tower, 9th, 14th-15th Floor, Rama 1 Road, Pathumwan, Bangkok Thailand 10330 Tel. 66 2 657 7831, Fax: 66 2 658 1269 Securities and Exchange Commission, Thailand. ASIAN INSIGHTS Page 10 VICKERS SECURITIES