A Tanah Makmur Berhad - I3investorJul 07, 2014 · tanah makmur berhad prosperous land. plantations│malaysia july 7, 2014 this research report is not directed to, or intended for

Plantations│Malaysia

July 7, 2014

THIS RESEARCH 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 DOCUMENT HAS BEEN FURNISHED TO YOU SOLELY FOR YOUR INFORMATION AND MAY NOT BE REPRODUCED OR

REDISTRIBUTED TO ANY OTHER PERSON.

IMPORTANT DISCLOSURES, INCLUDING ANY REQUIRED RESEARCH CERTIFICATIONS, ARE PROVIDED AT THE END OF THIS REPORT.

A

Tanah Makmur Berhad

Prosperous land


July 7, 2014




2

THIS RESEARCH 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. CIMB INVESTMENT BANK BERHAD IS THE PRINCIPAL ADVISER, SOLE PLACEMENT AGENT, MANAGING UNDERWRITER AND A JOINT UNDERWRITER IN THE INITIAL PUBLIC OFFERING (“IPO”) OF THE SHARES OF TANAH MAKMUR BERHAD (“COMPANY”). HOWEVER, THIS DOCUMENT IS FOR INFORMATION ONLY AND DOES NOT CONSTITUTE AN OFFER OR INVITATION OR RECOMMENDATION TO SUBSCRIBE FOR OR PURCHASE, OR SOLICITATION OF AN OFFER OR INVITATION TO SUBSCRIBE FOR OR PURCHASE ANY SECURITIES, AND NEITHER THIS DOCUMENT NOR ANYTHING CONTAINED HEREIN SHALL FORM THE BASIS OF OR BE RELIED UPON IN CONNECTION WITH ANY CONTRACT OR COMMITMENT WHATSOEVER. ANY DECISION TO SUBSCRIBE FOR OR PURCHASE SECURITIES TO BE OFFERED IN THE IPO SHOULD BE MADE ONLY ON THE BASIS OF THE INFORMATION CONTAINED IN THE PROSPECTUS ISSUED BY THE COMPANY IN CONNECTION WITH THE IPO AND NO RELIANCE SHOULD BE PLACED ON ANY REPRESENTATION OR INFORMATION WHICH IS NOT CONTAINED IN THE SAID PROSPECTUS. THE INFORMATION CONTAINED HEREIN IS DERIVED FROM PUBLICLY AVAILABLE SOURCES, AND ANY FORWARD-LOOKING STATEMENT, OPINION AND PROJECTION CONTAINED IN THIS DOCUMENT ARE ENTIRELY THOSE OF THE AUTHORS. ANY OPINION, ESTIMATE OR PROJECTION 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 OPINION, ESTIMATE OR PROJECTION. 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 ITS SUBSIDIARIES. CIMB INVESTMENT BANK BERHAD HAS NOT INDEPENDENTLY VERIFIED ALL THE INFORMATION GIVEN IN THIS DOCUMENT. ACCORDINGLY, NO REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, IS MADE AS TO THE ACCURACY, COMPLETENESS OR FAIRNESS OF THE INFORMATION, OPINIONS ESTIMATES, FORECASTS AND PROJECTIONS CONTAINED IN THIS DOCUMENT. NEITHER CIMB INVESTMENT BANK BERHAD, THE COMPANY, THEIR RESPECTIVE DIRECTORS, OFFICERS, AFFILIATES NOR ANY OTHER PERSON ACCEPTS ANY LIABILITY WHATSOEVER FOR ANY LOSS HOWSOEVER ARISING FROM ANY USE OF THIS DOCUMENT OR ITS CONTENTS OR OTHERWISE ARISING IN CONNECTION THEREWITH. THIS DOCUMENT IS CONFIDENTIAL AND HAS BEEN FURNISHED TO YOU SOLELY FOR YOUR INFORMATION, AND MAY NOT BE REPRODUCED OR REDISTRIBUTED TO ANY OTHER PERSON. BY ACCEPTING THIS DOCUMENT YOU AGREE TO BE BOUND BY THE FOREGOING RESTRICTIONS AND LIMITATIONS.


July 7, 2014




3

This page was intentionally left blank.


July 7, 2014




4

TABLE OF CONTENTS

1. BACKGROUND .................................................................................................................................................. 6 1.1 Most assets formerly listed under Kurnia Setia ................................................................................................ 6 1.2 What has changed since the company was taken private ................................................................................. 6 1.3 A palm oil and property player in Pahang .......................................................................................................... 7 1.4 The Crown Prince of Pahang is the largest shareholder ................................................................................... 8 1.5 Shareholding structure post IPO ....................................................................................................................... 8

2. BUSINESS OPERATIONS ................................................................................................................................ 10 2.1 Pahang oil palm player with 13,530ha of planted area .................................................................................... 10 2.2 Its mill processes 34% of its FFB output .......................................................................................................... 11 2.3 Major palm oil customers and sales strategy ................................................................................................... 12 2.4 Property development activities ....................................................................................................................... 13 2.5 Bauxite mining activities ................................................................................................................................... 14

3. OUTLOOK ......................................................................................................................................................... 15 3.1 Beneficiary of strong demand for CPO ............................................................................................................. 15 3.2 Positive on CPO price due to tighter supplies, El Nino.................................................................................... 15 3.3 New planting and new mature areas to drive future growth ........................................................................... 16 3.4 Oil yields achievement above Pahang state's average ...................................................................................... 17 3.5 Leveraging on its strong relationship with LKPP ............................................................................................ 18 3.6 Plans to raise its palm oil landbank to 25,000 ha by 2017/18 ........................................................................ 18 3.7 Plans to launch RM245m worth of properties in 2014 .................................................................................... 19 3.8 Relocation of state administrative complex to KotaSAS could boost its GDV by 67% to RM3bn ................. 19 3.9 Earnings boost from mining business for FY14-16 .......................................................................................... 19

4. SWOT ANALYSIS ............................................................................................................................................. 20

5. RISKS ................................................................................................................................................................. 21 5.1 CPO prices ......................................................................................................................................................... 21 5.2 Unfavourable weather conditions..................................................................................................................... 21 5.3 Dependence on foreign workers ....................................................................................................................... 21 5.4 High palm oil taxes in Malaysia ........................................................................................................................ 21 5.5 Forex fluctuations............................................................................................................................................. 22 5.6 Measures to curb property speculation ........................................................................................................... 22

6. FINANCIALS .................................................................................................................................................... 23 6.1 Plantation and property are the key revenue contributors............................................................................. 23 6.2 FY12 earnings hit by lower selling price and higher costs .............................................................................. 23 6.3 Lower CPO prices hurt FY13 earnings ............................................................................................................. 23

7. FORECASTS ..................................................................................................................................................... 24 7.1 Sales driven by higher CPO prices and property sales .................................................................................... 24 7.2 Strong core net profit growth in FY14 and FY15 ............................................................................................. 24 7.3 Capex plan ........................................................................................................................................................ 24 7.4 Low net gearing level as at end-Dec 2013 ....................................................................................................... 25

8. VALUATION AND RECOMMENDATION ..................................................................................................... 30 8.1 SOP valuation ................................................................................................................................................... 30 8.2 Offers 50% upside to our target price of RM1.88 ........................................................................................... 30 8.3 We expect a dividend payout of 50% ............................................................................................................... 30

9. APPENDICES ................................................................................................................................................... 32 9.1 Board of Directors and key management ........................................................................................................ 32 9.2 Photos from our visit to Tanah Makmur’s estates, property project and mining site ................................... 36


July 7, 2014

THIS RESEARCH 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 DOCUMENT HAS BEEN FURNISHED TO YOU SOLELY FOR YOUR INFORMATION AND MAY NOT BE REPRODUCED OR REDISTRIBUTED TO ANY OTHER PERSON.

5

Prosperous land Tanah Makmur, the soon-to-be listed plantation vehicle of the Pahang royal family, offers strong earnings growth prospects, driven by rising CPO prices, stronger property sales and a new earnings stream from its bauxite mining business. Property earnings could get a boost if it secures the contract to build the state administration complex in its KotaSAS property project.

The contract could potentially boost the GDV of its property project by 67% to RM3bn. We view the company’s strong shareholders and the strategic location of some of its estates as its key strong points. The key disadvantages are the lack of scale and the older age profile of its estates, but it has plans to improve on these areas. We arrive at a SOP-based target price of RM1.88, which implies an upside of 50% from its IPO price.

A planter with royal links Tanah Makmur is a Pahang-based palm oil player, with 13,530 ha of planted oil palm estates and a palm oil mill in Malaysia. It is also involved in property development in Kuantan, mainly through its KotaSAS project, to unlock the value of its landbank. It also recently commenced mining and extraction of bauxite, after it discovered 1.4m bauxite reserves while clearing land for its property project. The Crown Prince of Pahang and his family are the largest shareholders, while one of Pahang’s state agriculture arms, LKPP, is the second-largest shareholder. The plantation assets have a long history and were previously listed under Kurnia Setia Berhad.

"Three arrows" for growth Plantation earnings are set to benefit from better CPO prices. On top of this, the group plans to rejuvenate the average age profile of its estates (15-16 years) through replanting and new planting programmes. There is scope for growth as it has 3,527 ha of landbank reserves. The group is also expanding its milling capacity by 50% and is open to future M&As, targeting to raise its landbank by 39% to 25,000 ha by 2017/18. Property earnings are set to rise as it is stepping up the launches of higher-end property products. The property earnings could get a boost if it is able to secure the project to build the state administrative complex in its township. On top of these, TMB is set to enjoy a new stream of earnings in FY14-16 from bauxite mining.

Potential upside of 50% We used the SOP valuation and arrived at a target price of RM1.88, which implies an upside of 50% to its IPO price. At our target price, the implied FY14 and FY15 P/Es are 11x and 9x, respectively. The implied dividend yield at our target price is 4.5-5.5%, which is higher than the average of its Malaysian peers.

TANAH MAKMUR BERHAD IPO NOTE

TMK MK IPO price

Target

RM1.25 Target price

Target

RM1.88 Conviction| |

Sources: CIMB. COMPANY REPORTS

CIMB Analyst(s)

————————————————————————————————————————

Ivy NG Lee Fang CFA T (60) 3 2261 9073 E [email protected]

Show Style "View Doc Map"

Financial summary

FYE Dec (RM m) 2012 2013 2014F 2015F 2016F

Revenue (RM m) 207.7 243.5 337.3 388.6 386.3

Operating profit (RM m) 87.4 66.3 109.2 132.4 127.1

Operating profit margin 42.1% 27.2% 32.4% 34.1% 32.9%

Core Net Profit (RM m) 58.8 42.9 67.1 81.9 81.3

Core EPS (sen) 14.8 10.8 16.8 20.6 20.4

Core Net Profit Growth -26% -27% 56% 22% -1%

Net Gearing 0% 2% -13% -15% -16%

Recurring ROE 19.2% 13.3% 16.0% 17.8% 16.2%

P/E (x) 8.5 11.6 7.4 6.1 6.1

DPS (sen) na na 8.4 10.3 10.2

Div yield na na 6.7% 8.2% 8.2%

SOURCE: CIMB, COMPANY REPORTS

IPO SUMMARY

Issue size (m) 101.6m new shares Enlarged no of shares (m) 398.2m shares

Offer for sale (m) 49.5m shares Public issue (m) 52.1m shares

Institutional offering (m) 75.2m shares Retail offering (m) 26.4m shares

Issue price RM1.25 CIMB's target price RM1.88 Par value RM0.50

Mkt. cap. (based on issue price) RM498m Free float 25%

Trading commencement date 17 July 2014


July 7, 2014



6

Prosperous land 1. BACKGROUND

1.1 Most assets formerly listed under Kurnia Setia

Tanah Makmur Berhad (TMB) was incorporated on 18 Dec 2008 under the name of Kreatif Selaras Sdn Bhd. It subsequently changed its name to Tanah Makmur Berhad on 29 Nov 2013.

A large majority of its current plantation businesses were previously held by Kurnia Setia Berhad (KSB). KSB was previously listed by Lembaga Kemajuan Perusahaan Pertanian Negeri Pahang (LKPP) on the Malaysian Stock Exchange on 2 Dec 1984. The current management team took over the operations in 2005 when the major shareholder raised its equity stake in the company (Fig 1).

Kurnia Setia was delisted from Bursa Malaysia on 21 Dec 2010 following a takeover offer by the major shareholders of TMB to acquire the shares and warrants they did not already own for RM2.70 per share and RM1.20 per warrant. The offer price valued the stock at a historical P/E of 6.27x and P/BV of 0.82x. The market capitalisation of Kurnia Setia was approximately RM286.4m at that time.

Figure 1: Key milestones

Year Key milestones

2005

The TAS group had increased its equity interest to approximately 26% in Kurnia Setia. It was at this point that the TAS group took over the helm of Kurnia Setia, in

order to unlock the potential value of Kurnia Setia. This led to the expansion of Kurnia Setia’s plantation lands and the improvement of their plantation yield, as well as

Kurnia Setia’s venture into property development in subsequent years.

2008Kurnia Setia ventured into property development by converting Ladang Bukit Goh into building for the purposes of residential and commercial development. The

property development business was initiated by KotaSAS to design, develop and construct the KotaSAS Township.

Tanah Makmur completed the Privatisation.

KotaSAS executed a joint venture agreement with OMNI Holdings Sdn Bhd on 14 January 2010 for the development of Precinct 1 and Precinct 2 of the KotaSAS

Township through KotaSAS OMNI.

Launched Precinct 1 of the KotaSAS Township.

TMB began construction of our palm oil mill and compost plant.

2011 Launched Precinct 2 (Phases 1 and 2) of the KotaSAS Township.

Commenced operations of our palm oil mill and compost plant in July 2012.

Launched Precinct 2 (Phase 3) and Precinct 3 (Phase 1) of the KotaSAS Township.

KotaSAS entered into a shareholders’ agreement with Tanah Makmur Perkasa Sdn Bhd for the combination of effort of the shareholders to develop the remainder

portion of land located in Ladang Bukit Goh that has yet to be developed.

Launched Precinct 3 (Phase 2 and Phase 3) and Precinct Lakeside 1 of the KotaSAS Township.

2014KotaSAS and Tanah Makmur KotaSAS executed the development agreement dated 8 January 2014 which was subsequently substituted by the amended restated

development agreement dated 12 May 2014, to develop and complete the development of the remaining land under the KotaSAS Township.

2010

2012

2013

SOURCES: CIMB, COMPANY REPORTS

1.2 What has changed since the company was taken private

Since the company was taken private, the group has concentrated its efforts and resources on building its reputation in township property development in Kuantan, expand its plantation operations to include a palm oil mill since Jul 2012, and increase its landbank by 24.55% to 17,969 ha from 14,428 ha. On the property front, it has successfully launched and completed various phases of its township (Fig 2).

Due to the anticipated continued growth in the oil-palm based industry, we have put in place plans to expand our group's landbank and milling capacity as well as to improve our crude palm oil and palm kernel yields over the next five years.”

– Tengku Datuk Zubir Tengku Datuk Ubaidillah, TMB’s MD


July 7, 2014



7

Figure 2: Key achievements of the group after it was taken private

Prior to Privatisation As at the LPD

Plantation landbank 14,427.54 ha 17,969.06 ha (an increase of 3,541.52 ha or 24.55%)

Milling Nil Ventured into downstream activities with the completion of a palm oil mill

which has a 30 tph capacity and a compost plant.

Both have commenced operations since July 2012.

Property

development

Potential venture into property development business in Bukit Goh.

Clearing and infrastructure works, and sample residential units had

commenced for Precinct 1 (Phase 1) of the property development project.

Successfully launched and completed certain phases of the KotaSAS

Township, which comprises the development of approximately 1,500

acres (607.04 ha) of land over 15 years.

Completed the sale of properties in Precinct 1 and Precinct 2 (Phases 1

and 2) of KotaSAS Township.

Launched Precinct 2 (Phase 3), Precinct 3 (Phases 1, 2, and 3) and

Precinct Lakeside 1 (LS1) of KotaSAS Township.

The development sizes of Precinct 1, Precinct 2, Precinct 3 and Lakeside

1 are approximately 44.70 acres, 46.00 acres, 38.00 acres and 16.40

acres, respectively, bringing it to a total development size of

approximately 145.10 acres.

Successfully delivered 555 units out of 1,045 residential units launched

and sold within the KotaSAS Township, between the time of the Offer in

June 2009 until as at the LPD. SOURCES: CIMB, COMPANY REPORTS

1.3 A palm oil and property player in Pahang

Today, TMB is an upstream plantation player and property developer in Malaysia. Through its subsidiaries, it owns or leases 17,969 ha of plantation land. Of this, 13,530 ha (or 75%) of the landbank is planted with oil palm. All of the group's estates and assets are located in Pahang. It operates a palm oil mill with a maximum production capacity of 30 tonnes of FFB per hour. Seven of the group's estates currently supply FFBs to the group's mill, while the remaining estates sell their fruits to third party traders. The palm products from its mills are mainly crude palm oil (CPO) and palm kernel (PK) and are sold to third party refiners and PK crushing plants in the country.

The group ventured into property development in 2010 when it launched the Kota Sultan Ahmad Shah Township (KotaSAS) mainly to maximise the potential value of its land in Ladang Bukit Goh.

It is also involved in the mining of bauxite, after it discovered bauxite while clearing land at its property development project. The group is expected to complete mining activities over the next three years.

The plantation division is the largest contributor, and accounted for 83% of the gross profit in FY13. Property segment accounted for the rest.

Figure 3: Key assets of the group

Plantation land Palm oil mill KotaSAS Township Mining

-Operates 13 plantation

estates in the Pahang

-Aggregate of 17,969ha of

plantation land (11,634ha

owned, 6,336ha leased)

-Operate one palm oil mill

with capacity of 30 tonnes

of FFB per hour

-7 of TMB's estates supply

FFB to its palm oil mill

-Measures approximately

1,500 acres expected to

be developed over the next

15 years

-Discovered bauxite during

the clearing of land within

Ladang Bukit Goh

-Estimated 1.4m tonnes of

bauxite deposits

Plantation business Property development



July 7, 2014



8

Figure 4: 2013 revenue breakdown Figure 5: 2013 gross profit breakdown

Title:

Source:

Please fill in the values above to have them entered in your report

Plantations, RM179.5m, 74%

Property, RM64.0m, 26%

Title:

Source:


Plantations, RM76.0m, 83%

Property, RM15.8m, 17%

SOURCES: CIMB, COMPANY REPORTS SOURCES: CIMB, COMPANY REPORTS

1.4 The Crown Prince of Pahang is the largest shareholder

HRH Tengku Abdullah Ibni Sultan Haji Ahmad Shah, the Crown Prince of Pahang, who currently holds a 43.17% stake in TMB, through direct and indirect interests, is the largest shareholder of the group. He currently has a direct stake of 15.77% and an indirect stake of 27.4% (held through Tastu Bina (8.61%), TAS Industries (16.75%) and Aminvesco (2.04%)). TMB will be the main listed vehicle of the Pahang royal family, post its listing.

The second-largest shareholder is LKPP, which was established in 1969 by the Pahang state government to be a leader in Pahang agriculture development and other fields. LKPP started Kurnia Setia or most of the plantation assets that TMB currently owns. However, the management of these assets was passed on to the current management team in 2005. Nevertheless, LKPP remains a major shareholder with a 30% stake.

LKPP is also directly or through LKPP Corporation (LCSB) involved in the plantation business. LKPP owns approximately 36,931 ha of planted oil palm estates of the group. It also holds stakes in other listed plantation companies, mainly a 26.91% stake in Astral Asia (AAB MK) and 31.14% stake in Far East Holdings (FEH MK).

1.5 Shareholding structure post IPO

TMB is offering to sell 101.59m shares of 50 sen each, priced at RM1.25 per share under its IPO exercise. Its IPO comprises an offer for sale of 49.45m shares and a public issue of 52.14m shares. The institutional tranche of the offering will be 75.18m and the retail offering will have 26.40m shares. After the IPO, the public float will be 25%. (Fig. 6)

Post the IPO offering, HRH Tengku Abdullah Ibni Sultan Haji Ahmad Shah will remain the largest shareholder with a stake of 34.5%, while LKPP will be the second-largest shareholder with a 20% stake. The third largest shareholder is YM Tengku Dato' Uzir bin Tengku Dato' Ubaidillah with a stake of 17.6% through direct and indirect holdings. YM Tengku Dato' Uzir bin Tengku Dato’ Ubaidillah is the brother of the MD of TMB, YM Tengku Dato' Zubir bin Tengku Dato' Ubaidillah. (Fig 7)


July 7, 2014



9

Figure 6: IPO Offering

Categories

No of shares

(in m)

% of enlarged

share capital

No of shares

(in m)

% of enlarged

share capital

No of shares

(in m)

% of enlarged

share capital

Retail offering

Malaysian Public (via balloting) - - 20.0 5.02 20.0 5.02

Eligible Directors, employees and persons who have

contributed to the success of the Group - - 6.4 1.61 6.4 1.61

Sub- total - - 26.4 6.63 26.4 6.63

Institutional Offering:

Malaysian institutional and selected investors 49.5 12.42 25.7 6.46 75.2 18.88

Sub-total 49.5 12.42 25.7 6.46 75.2 18.88

Total 49.5 12.42 52.1 13.09 101.6 25.51

Public issueOffer for sale Total


Figure 7: Pre- and post-IPO shareholding structure

Name

Direct Indirect Direct Indirect

No. of Shares

held (m)%

No. of Shares held

(m)%

No. of Shares held

(m)%

No. of Shares

held (m)%

Tastu Bina 29.8 8.6 - - 27.1 6.8

TAS Industries 58.0 16.7 7.1* 2.0* 49.7 12.5 6.1* 1.5*

Aimvesco 7.1 2.0 - - 6.1 1.5 - -

HRH Tengku Abdullah Ibni Sultan Haji Ahmad Shah 54.6 15.8 94.8** 27.4** 54.6 13.7 82.8** 20.8**

YM Tengku Dato’ Uzir bin Tengku Dato’ Ubaidillah 50.2 14.5 29.8# 8.61# 43.2 10.8 27.1# 6.8#

YM Tengku Dato’ Zubir bin Tengku Dato’ Ubaidillah 3.3 1.0 - - 3.1 0.8 - -

LKPP 103.8 30.0 - - 79.6 20.0 - -

Focus Edge Indices Corp 21.0 6.1 - 18.0 4.5 - -

YM Tengku Dato’ Ahmad Faisal bin Tengku Ibrahim - - 21.0^ 6.1^ 0.2 0.0 18.0^ 4.5^

Others 18.3 5.3 - - 17.0 4.3 - -

Public - - - - 99.6 25.0 - -

Total 346.0 100 - - 398.2 100.0 - -

*Deemed to have interest in Tanah Makmur by virture of its shareholdings in Aimvesco

**Deemed to have interest in Tanah Makmur by virtue of his shareholdings in TAS Industries, Tastu Bina and Aimvesco

#Deemed to have interest in Tanah Makmur by virtue of his shareholdings in Tastu Bina

^Deemed to have interest in Tanah Makmur by virtue of his interest in Focus Edge Indices Corp

Pre-IPO Post-IPO



July 7, 2014



10

2. BUSINESS OPERATIONS

Tanah Makmur Berhad (TMB) is a Pahang-based oil palm and property player. Its key palm oil business spans from estate operations to milling activities. The group is also involved in property development since 2010 through its KotaSAS project and has recently entered in the business of bauxite mining. The group’s operations are all located in the state of Pahang. It currently owns 14 subsidiaries. (Please see Fig 8 for more details).

Figure 8: Corporate structure of TMB

100%

60%

100%

100% 100%

65%

60%

60%

65%

100%

100%

100%

60%

70%

Kreatif Selaras

Mining

100%

Tanah Makmur

Alur Gemilang

100%Plantation

Alur Lestari

Property

development

Kurnia Setia

Engineering

Kurnia Setia

Trading

KotaSAS OMNI

Tanah Makmur

KotaSas

KotaSAS

Kreatif Selaras

Land

Kreatif Sinar

Gabungan

Alur Cemerlang

Kurnia Setia

Alur Seri

SJ Palm Oil Mill

1 The TAS group refers to TAS Industries Sdn Bhd and individuals/corporations that are related to the shareholders of TAS Industries Sdn Bhd


2.1 Pahang oil palm player with 13,530ha of planted area

The group owns 13 plantation estates with a total land area of 17,969ha. It owns 11,633 ha or 65% of the landbank and leases 6,336ha or 35% from LKPP. Currently, 75% or 13,530 ha of its total landbank is planted with oil palms, while 5% is not fit for planting and is reserved for infrastructure, nurseries, buffer zones and other uses. This leaves the group with 3,527 ha (20%) of plantable reserves. The group plans to plant the remaining landbank, and the new land it acquires over the next few years. It bought Ladang Alur Seri (2,023 ha) in 2011 and Ladang Ulu Lepar (1069.7 ha) in 2013. We understand that most of the group’s estates are on mineral soil. Relative to the big-cap plantation players, the group’s estate size is small, measuring only 3% of Sime Darby’s and 4% of Felda Global Venture’s (FGV) total planted areas. Tanah Makmur’s planted oil palm estates make up 2% and 0.3% of the planted oil palm area in Pahang and Malaysia respectively.

Figure 9: Performance metrics of comparable companies with Tanah Makmur

FFB output FFB yield

Mature Immature Total tonnes tonnes/ha

Tanah Makmur 11,388 2,142 13,530 232,605 20.4 20.0% 6.0%

Far East Holdings 16,926 3,143 20,069 339,502 20.1 18.7% 4.9%

Harn Len 11,156 1,327 12,483 189,242 14.1 19.9% 4.7%

Hap Seng Plantations 30,670 4,881 35,551 704,241 23.0 21.3% 4.7%

Kim Loong Resources 12,827 1,523 14,350 280,365 21.8 22.1% 5.1%

Kretam Holdings 16,523 3,319 19,842 367,258 22.2 20.9% 4.7%

Sarawak Plantation 26,728 4,918 31,646 309,218 12.4 20.9% 4.5%

United Malacca 15,614 6,047 21,661 336,734 21.6 20.7% 4.9%

Planted area (ha)Company OER KER

SOURCES: CIMB, INFOBUSINESS RESEARCH


July 7, 2014



11

Figure 10: Breakdown of landbank (17,969 ha) Figure 11: Breakdown of age profile of estates (13,530 ha)

Title:

Source:


Planted area, 13,530ha, 75%

Plantable reserve, 3,527ha, 20%

Unplantable area, 912ha, 5%

Title:

Source:


0-3 yr, 1,801ha, 13%

4-8 yr, 2,718ha, 20%

9-13 yr, 3,312ha, 25%

14-18 yr, 2,183ha, 16%

19-25 yr, 2,235ha, 17%

>25 yr, 1,281ha, 9%


2.2 Its mill processes 34% of its FFB output

The group is a newcomer in the palm oil milling business. It set out to build the mill soon after the company was taken private to achieve higher pricing for its palm products and reduce its dependence on external traders and millers.

Its palm oil mill was completed on Jul 2012, with a milling capacity of 30 FFB tonnes per hour. The mill processes FFB output from its estates as well as FFB purchased from third parties.

TMB channeled FFB production from seven of its estates or 34% of its total FFB production to the mill in 2013. It sells around 66% of total production from its estates to third parties, as it is not economical to transport to its own mill.

The average utilisation rate of its mill was 84% in 2013, which is below the industry average in Pahang. In FY13, its mill produced 31,676 tonnes of crude palm oil (CPO) and 9,465 tonnes of palm kernel (PK).

The group also operates a compost plant which recycles waste such as shredded Empty Fruit Bunches (EFB) and slurry generated from the mill into compost fertilisers by using microbes. The compost plant, which is situated next to its mill, was commissioned in 2012 and has the capacity to produce 40,000 tonnes of compost per annum. The operation of the plant is carried out by its 70%-owned subsidiary, Alur Lestari, and the compost is sold to My Agri Nutribio.


July 7, 2014



12

Figure 12: Operational flow chart of the plantation business

Plantation business

Property development business

External plantation

owner & trader

FFB

FFB Plantation Division

Milling Division

CPO

PK

External millers and traders

Refineries

Kernel crushing plant operators

Compost fertiliser

Farmers and plantation owners

Property development

division

Residential property

Commercial property

Property owners and investors

SOURCES: CIMB, COMPANY REPORTS, MPOB

Figure 13: Capacity and utilisation rates of its mill and compost plant

Maximum capacity* Actual production Utilisation rate (%)

CPO production 37,440 31,676 84.60

PK production 11,232 9,465 84.27

Compost fertiliser production 22,770 22,607 99.28

*30 tonnes of FFB per hour SOURCES: CIMB, COMPANY REPORTS

Figure 14: Historical FFB intakes and output from its mill

Jul 12 to Dec 12 FYE 2013

Intake of FFB (tonnes)

Own estates 58,019.7 77,965.3

Third party purchase 11,801.3 80,567.8

Total 69,821.0 158,533.0

Output of CPO and PK (tonnes)

Production of CPO 14,243.4 31,676.2

Production of PK 3,564.3 9,465.3 SOURCES: CIMB, COMPANY REPORTS

2.3 Major palm oil customers and sales strategy

The group sells its CPO and PK directly to local refiners and palm kernel crushing operators. The FFBs that are not processed by its mill are sold to other millers in the vicinity. The group sells its FFB through a yearly tendering process. Yearly FFB contracts are entered into with those third party traders and millers that are selected, based on their respective bids. Its key customers are Kilang Sawit and Sern Lee Enterprise. In FY13, Kilang Sawit accounted for 12.6% of its total FFB sales while Sern Lee Enterprise accounted for 4.8%.

Figure 15: Major customers of the group

RM m % of revenue RM m % of revenue RM m % of revenue

Kilang Sawit C.P Sdn Bhd FFB - - 1.8 0.88 30.7 12.61

Sern Lee Enterprise Sdn Bhd FFB 82.3 29.14 75.4 36.31 11.7 4.81

TT Max Enterprise Sdn Bhd FFB 61.5 21.79 11.6 5.61 - -

2011 2012 2013Type of

productMajor customers



July 7, 2014



13

2.4 Property development activities

The group ventured into property development in 2010, mainly to unlock the potential value of one of its estates (Ladang Bukit Goh) which is strategically located. The property development project was initiated by its property arm, KOTASAS, and is named the Kota Sultan Ahmad Shah Township (KotaSAS). The township is strategically located near some of the main government offices and is accessible through the East Coast Expressway and Kuantan Bypass (see Fig 16).

Figure 16: Location of KotaSAS project in Kuantan, Pahang


The township involves the development of 1,500 acres (607 ha) of land over 15 years and focuses on the development of residential, commercial, institutional and government properties. The estimated GDV of this project is RM1.8bn and we estimate that the group has launched around RM300m worth of properties to date. It has completed the launch and sale of properties in three precincts with a total development area of 145.1 acres.

Under the township plan, it will be allocating around 228.5 acres of the land for the development of commercial centres, which include government and private offices, retail malls and office suites. To date, it has launched 1,074 units and sold 97% or 1,045 units (Fig 17). The group is also still generating income from 314 ha of the land from plantation activities.

The land ownership of the property project is held by 100%-owned KotaSAS. However, the development for the early phases of the project (up to precinct 2, Phase 3), with a total development size of 90.7 acres, was carried out by the 65% JV KotaSAS OMNI. The group intends to terminate the JV upon the completion of the developments under precinct 2 and the expiry of the two year defect liability period in 2016.

It has subsequently entered into a JV agreement with 60%-owned subsidiary Tanah Makmur KotaSAS to become the developer for the remaining developments of the project. The group, through its 65%-owned subsidiary, Kreatif Sinar Gabungan, has also proposed to the state government of Pahang for the new state administrative complex of the state government of Pahang to be included in the KotaSAS township. In Sep 2013, the Prime Minister of Malaysia, Dato' Sri Najib bin Tun Haji Abdul Razak, launched the development of the state administrative complex in the KotaSAS township. However, the group has yet to receive the award for the development of the project.


July 7, 2014



14

Its wholly-owned subsidiary Kurnia Setia Engineering also carries out construction activities and is mainly involved in the construction and building of main infrastructure in the KotaSAS township. The group is also involved in the trading of construction materials and leasing of machines to external contractors to construct, build and develop properties in the township. The trading activities are carried out by Kreatif Selaras Trading. These operations will complement its property development activities.

Figure 17: Property launches and take-up rates

Name Type No. of units

developed

No. of units

sold

Date of sales

launch

% of units

sold

Precint 1 (44.7 acres)

Sinaran Single Storey semi-detached 54 54 Jan-10 100%

Embun Double storey semi-detached 24 24 Jan-10 100%

Bayu Double storey semi-detached 74 74 Jan-10 100%

Senja Double storey link 34 34 Jan-10 100%

Suria 1 Double storey link 132 132 Jan-10 100%

Suria 2 Double storey link 7 7 Jan-10 100%

Total 325 325 100%


Fajar 1 Single storey link 87 87 Apr-11 100%

Fajar 2 Single storey link 94 92 Jun-11 98%

Bintang Single storey super-link 36 36 Jun-11 100%

Cahaya Single storey link 70 70 Jun-11 & Apr-12 100%

Pancaran Single Storey semi-detached 16 16 Jun-11 & Apr-12 100%

Senja 2 Double storey link 16 16 Apr-12 100%

Total 319 317 99%


Ceria Double storey link 68 68 Jun-12 100%

Pancaran Single Storey semi-detached 40 40 Jun-12 & Feb-13 100%

Rembulan Double storey link 94 94 Feb-13 100%

Ceria 2 Double storey link 45 42 Sep-13 93%

Pancaran 2 Double storey semi-detached 16 16 Sep-13 100%

Sinaran 2 2.5 storey semi-detached 18 16 Sep-13 89%

Total 281 276 98%

Lakeside 1 (16.4 acres)

Ceria 2 Double storey link 105 96 Nov-13 91%

Pancaran 2 Double storey semi-detached 22 18 Nov-13 82%

Sinaran 2 2.5 storey semi-detached 22 13 Nov-13 59%

Total 149 127 85%

Grand total 1,074 1,045 97% SOURCES: CIMB, COMPANY REPORTS

2.5 Bauxite mining activities

The group discovered the presence of bauxite while clearing parts of the land at Ladang Bukit Goh for its property development activities. It commissioned Aycel Geoservices to conduct an evaluation of the potential bauxite reserves. The survey revealed that the land holds bauxite deposits of around 1,426,500 tonnes.

Given that the mining activity will not interfere with its property development activities, the group commenced mining and extraction of bauxite in Apr 2014, after receiving the Proprietary Mining Licence and the Operational Mining Licence. The mining business is carried out by 60%-owned Kreatif Selaras Mining which in turn has entered into an agreement with SE Satu as the exclusive operator to mine and extract the bauxite on the said land for a fixed cost of US$13.75 per tonne for a period of 36 months.


July 7, 2014



15

3. OUTLOOK

3.1 Beneficiary of strong demand for CPO

As an upstream palm oil operator in Malaysia, we believe that TMB is well-placed to benefit from the bullish long-term demand prospects for palm oil. We are long-term positive on the use of palm oil for food and non-food purposes due to its attractive pricing relative to other edible oils, rising per capita consumption in India, China and Indonesia, as well as higher usage of palm oil for biodiesel purposes in Indonesia and Malaysia due to biodiesel mandates. Indonesia’s plan to raise its biodiesel mandate to 10% in 2014 could potentially boost the country's usage of palm-based biodiesel from approximately 1m tonnes in 2013 to around 1.5m-2m tonnes in 2014. Malaysia is also in the midst of implementing its B5 programme which would boost the palm oil consumption for biodiesel usage in the country to 500,000 tonnes p.a.

Figure 18: Per capita edible oil consumption of India and China is below the global average

Title:

Source:


0

10

20

30

40

50

60

70

EU-27 USA Hong Kong Indonesia Taiwan China Pakistan India Nigeria

(kg)

Global average = 27kg

SOURCES: CIMB, OIL WORLD

3.2 Positive on CPO price due to tighter supplies, El Nino

CPO prices started on a positive note this year due to concerns over the impact of the drought in Peninsular Malaysia, North Sumatra and Riau from Feb-Mar, rising biodiesel mandates in Indonesia and Malaysia, as well as the unfavourable weather conditions in some soybean planting areas in South America. Spot CPO prices climbed to RM2,917 per tonne in Mar 2014, but gave up most of the gains in May and Jun and are currently at RM2,453 per tonne.

We project CPO prices to remain range-bound for now and to rise towards the later part of the year due to weaker supplies caused by the drought in parts of key palm oil region in 1Q and the potential impact of the widely-predicted El Nino event (possible in 3Q14) which could result in lower rainfall in key palm oil producing areas, leading to a potential shortfall in supply.

We project the average CPO prices to rise 14% to RM2,700 per tonne in FY14 and 4% to RM2,800 per tonne in FY15. If an El Nino develops, resulting in lower rainfall in key palm oil producing regions, there could be upside to our current price forecasts and TMB's earnings projections. In 1H14, the average CPO price was RM2,605 per tonne.

We estimate that every RM100 per tonne change in the CPO price could impact our FY14 net profit forecast by 6%, and FY15 net profit forecast by 5%.


July 7, 2014



16

Figure 19: CPO and PK spot prices since 2011

Title:

Source:


-

500

1,000

1,500

2,000

2,500

3,000

3,500

-

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

Jan-11 Jul-11 Jan-12 Jul-12 Jan-13 Jul-13 Jan-14

CPO spot (LHS) PK spot (RHS)(RM/tonne) (RM/tonne)

SOURCES: CIMB, BLOOMBERG

Figure 20: Average CPO selling prices in Malaysia - Actual and forecasts

Title:

Source:


3,219

2,764

2,371

2,700 2,800

1,500

1,700

1,900

2,100

2,300

2,500

2,700

2,900

3,100

3,300

3,500

2011 2012 2013 2014F 2015F

(RM per tonne)

SOURCES: CIMB, MPOB

3.3 New planting and new mature areas to drive future growth

TMB's planted mature areas have risen by 13% over the past two years due to new mature areas coming onstream. However, FFB production during the same period fell 3% due to weaker FFB yields from its newly-matured estates as well as older estates.

The group's estates are not young. We estimate that the average age of TMB's estates is 15-16 years. Approximately 87% of its planted estates are mature and yielding – 41% are considered prime mature (9-18 years), 17% are old (19-25 years) and 9% are due for replanting (over 25 years). The good news is that 20% are young (4-8 years) and 13% are immature. These estates will help to partially offset the declining yields from its older estates.

The group plans to improve the age profile and output growth prospects by planting its landbank reserves as well as replanting its old estates. It plans to replant 2,061 ha of estates between 2014 and 2018, but we expect the new plantings programme of 3,093 ha for 2014-16 to more than offset its replanting plan. TMB has 3,527 ha of plantable reserves (Ladang Alur Seri and Ladang Ulu Lepar) which when fully planted will raise the group's planted area by 26%.


July 7, 2014



17

Figure 21: Oil palm age profile

Title:

Source:


0-3 yr, 1,801ha, 13%

4-8 yr, 2,718ha, 20%

9-13 yr, 3,312ha, 25%

14-18 yr, 2,183ha, 16%

19-25 yr, 2,235ha, 17%

>25 yr, 1,281ha, 9%


We do not expect the near-term FFB output growth to be strong due to the ongoing replanting programme, and the FFB yields of oil palms from its mature estates may decline as they approach the replanting age of 25 years. However, we project stronger output growth from 2017 when some of its new planting initiatives are expected to start to bear fruit. Overall, we estimate the group will raise its FFB output by 1-5% per annum over the next three years through larger mature areas.

Figure 22: New planting and replanting programmes

Plantation Estate Size (ha) Average age of old palmsYear planned for

replanting/new planting

Ladang Charuk Puting 808.7 40 2014 and 2015

Ladang Sungai Sering 145.0 33 2014

Ladang Lembah Klau 974.0 24 2017 and 2018

Ladang Empang Jaleh 133.3 33 2014

Sub-total 2,061.0

New planting programmes

Ladang Alur Seri 2,023.0 - 2014 and 2015

Ladang Ulu Lepar 1,069.7 - 2015 and 2016

Sub-total 3,092.7

Grand total 5,153.6

Replanting programmes


3.4 Oil yields achievement above Pahang state's average

TMB's average FFB yield achievement in 2013 of 20.4 tonnes/ha was above the Pahang's state average of 20.2 tonnes/ha and Malaysia's average of 19 tonnes/ha. We believe that this was due to the good agricultural practices employed by the group at its estates. The OER rate of 19.98% achieved by its mill in 2013 was lower than the country's average of 20.25%, but this was compensated by the higher PK recovery rate of 5.97% against the country's average of 5.12%.

We expect its mill, which is strategically located and employs the latest technology, to register better OER rates over time and lower milling costs due to better economies of scale. Average utilisation rate of the mill was 84% in 2013 and the group plans to expand its palm oil mill capacity by 50% to 45 tonnes of FFB per hour within the next two years.


July 7, 2014



18

Figure 23: Comparing TMB's FFB yield, OER and KER against the Pahang state and the country in 2013

FFB yield OER KER

tonnes per ha % %

TMB 20.43 19.98 5.97

Pahang 20.21 20.02 5.44

Malaysia 19.02 20.25 5.12 SOURCES: CIMB, COMPANY REPORTS

3.5 Leveraging on its strong relationship with LKPP

One of the key advantages that TMB has is its strong relationship with LKPP, which is expected to continue to support the group to acquire and lease plantation lands at competitive prices in Pahang.

The relevant state authority of Pahang has informed TMB that it had decided on 10 Oct 2010 that the state will only approve state land for oil palm plantation purposes to state-linked agencies, such as LKPP. As such, having LKPP as a major shareholder provides TMB access to new plantation projects in Pahang.

As and when TMB discovers plantation potential on certain land in Pahang, it can initiate the process of transferring the land to itself by entering into a sale and purchase or a lease agreement with LKPP. Currently 35% of the group's plantation land is leased from LKPP.

Figure 24: TMB's land lease from LKPP Figure 25: Current landbank and potential land identified

Title:

Source:

Please fill in the values above to have them entered in your reportLKPP-leased land, 6,336 ha,

35%

Ow ned by TMB, 11,633 ha, 65%

Title:

Source:

Please fill in the values above to have them entered in your report17,969

2,650 20,619

-

5,000

10,000

15,000

20,000

25,000

Existing land bank Potential land bank Total landbank afteracquisition

(ha)


3.6 Plans to raise its palm oil landbank to 25,000 ha by 2017/18

Over the next three years, TMB plans to raise its plantation landbank to at least 25,000 ha or 39% from its current landbank of 17,969 ha. The group intends to achieve this by acquiring suitable planted or unplanted land in Malaysia or overseas, though the primary concentration will be on expanding its landbank within Pahang.

Currently, it has identified two potential land plots in Kampong Bongsu (1,214 ha) and Ulu Lepar (1,436 ha). It is working with LKPP to secure the acquisitions from the state government. If these plots are successfully secured, it could boost the group's landbank by 15% to 20,619 ha. The group has estimated that the acquisition of these two land plots will cost it approximately RM10m (RM3,878 per ha). We are of the view that the group would have no issues funding the potential acquisitions as it will be in a net cash position after the IPO.


July 7, 2014



19

3.7 Plans to launch RM245m worth of properties in 2014

Previous launches at its KotaSAS project comprised mainly of residential properties. Going forward, the group plans to launch commercial properties, which will include government and private offices, retail malls and office suites.

In 2014, the group plans to launch 478 residential properties, which include the first introduction of bungalows and 40 units of commercial shop lots valued at approx. RM245m in gross development value (GDV). This is significantly higher than the total property sales of around RM172m recognised over the past three years. If successfully executed, this will significantly boost the group’s future property earnings.

3.8 Relocation of state administrative complex to KotaSAS could boost its GDV by 67% to RM3bn

The group, through 65%-owned Kreatif Sinar Gabungan, is currently waiting to be awarded the project to develop and construct a new state administrative complex and a state assembly hall in Kuantan, which will be located in the KotaSAS township.

In the proposal to the government, the group has estimated the value of the project to be around RM399m, but the value cannot be relied upon until it is able to secure the project. If the contract is awarded, the group expects to start construction of the buildings in 2014. We are positive on this as it could raise the future value and demand for properties in the township, if the project is awarded to the company.

TMB estimated that the future GDV of the project could potentially rise to RM3bn from the current estimated value of RM1.8bn, after taking into consideration the improved property development plans that it has made on the relocation of the new state administrative complex and state assembly hall to the KotaSAS township. The improvements in the proposed plan have been submitted and are pending approval.

3.9 Earnings boost from mining business for FY14-16

We project the group's venture into the mining of bauxite will raise its earnings during FY14-16. According to the bauxite mining works agreement between its 60%-owned mining subsidiary, Kreatif Selaras Mining and SE Satu (the appointed exclusive operator for the mining and extraction of bauxite at its land), the contractor will extract 50,000 tonnes (minimum) of bauxite ore per annum for the duration of three years and will receive US$13.75 per tonne on the actual tonnage of washed bauxite that has been successful sold and paid for in full by the buyers. We estimate that the group could potentially fetch a selling price of US$46 per tonne for the bauxite. Based on this and the estimated reserves of 1,426,500 tonnes, we project the group could derive a pretax profit of RM86.9m from this ancillary business over the next three years.


July 7, 2014



20

4. SWOT ANALYSIS

The group’s main strength is its strong relationship with LKPP, which will allow it to secure more landbank at attractive prices in Pahang to grow and attain better economies of scale for its estates operations. On top of this, the group has been able to maximise the value of its strategically-located land in Ladang Bukit Goh, through the development of KotaSAS township and the mining of bauxite, following the discovery of bauxite in part of its land. The group’s expansion into milling activities allows the group to extract higher value for its palm products and reduce its dependence on third party millers.

The group's landbank of around 18,000 ha is scattered over 13 locations in Pahang. Its largest estate, Ladang Sri Telang, measures only 2,871 ha, which is small compared to the estates of some of its peers, resulting in higher operating costs. Also, some of the group's estates are in hilly terrain which has resulted in lower FFB yields per ha. The estimated average age of its estates is 15-16 years which is higher compared to its peers. The group will need to replant some of its estates which may result in lower output in the near term.

The various measures that the group could undertake to improve its earnings are expanding its planted areas, improving efficiency at its estates, expanding its mill capacities and unlocking the value of its strategic land plots which are ripe for development. If the group is awarded the project to develop and construct the new state administrative complex and state assembly hall in KotaSAS, it will boost the GDV of its property project.

The main threats to the group are weaker CPO prices and external factors that could affect the plantation operations, for instance, weather patterns, a change in labour regulations or taxes, and duties for palm oil.

Figure 26: SWOT Analysis

Strengths Opportunities

Strong relationship with LKPP Cut cost of production by raising yields

Focus on upstream operations Improve its land bank through acquisitions

Ventured into property development to unlock land value Boost GDV of its property project

Maximising value of its land Expanding its milling capacity

Weaknesses Threats

Lacks economies of scale Heavy reliance on foreign workers

Some estates are on hilly terrain Higher minimum wage in Malaysia

Age profile of estates at 15-16 years Unable to pass on GST to property buyers

Limited track record in property venture Lower selling prices for its bauxite SOURCES: CIMB, COMPANY REPORTS


July 7, 2014



21

5. RISKS

5.1 CPO prices

Tanah Makmur derives 83% of its gross profit from the plantation division. As such, the group’s earnings are highly sensitive to changes in CPO prices. Every RM100 per tonne deviation in CPO price from our current assumptions would have an impact of about 6% on our FY14 and 5% on FY15 net profit forecasts. Our current average CPO price assumption for the group is RM2,700 per tonne for 2014 and RM2,800 per tonne for 2015.

5.2 Unfavourable weather conditions

Rainfall deficits or excessive rainfall at the group’s estates may adversely impact FFB yields and production. These may affect its plantation earnings if the decline in production is not fully compensated by higher selling prices. We estimate that every 1% change in FFB production will lead to a 1-2% impact on our earnings forecasts for FY14-15.

5.3 Dependence on foreign workers

The plantation business is labour intensive. In Malaysia, the industry is heavily dependent on foreign workers to remain cost competitive. In Tanah Makmur's case, foreign workers form 74.39% of its total workforce of 1,101 employees. Any shortage of labour due to new immigration rules or labour policies may affect the productivity of its estates.

5.4 High palm oil taxes in Malaysia

The group is subject to a windfall tax on CPO, a cess tax of RM13 per tonne of CPO and an export tax on CPO in Malaysia. Any changes in these taxes could impact the group’s profitability.

Figure 27: Taxation on the palm oil sector

Tax, Cess, Duty Rates

Corporate tax 25% of corporate profit

Cess for MPOB RM13 per tonne of CPO

Windfall profit levy15% above RM2,500 (Peninsular)

7.5% above RM3,000 (Sabah)

Sabah Sales tax 7.5% for CPO RM1,000 per tonne and above

Sarawak Sales tax2.5% for RM1,000-1,500 per tonne

5.0% for above RM1,500 per tonne

SOURCES: CIMB, COMPANY REPORTS, THESTAR

Figure 28: Malaysia's export tax structure Figure 29: Malaysia CPO export duty

CPO price (RM per tonne) CPO export tax rate

2,250-2,400 4.5%

2,400-2,550 5.0%

2,550-2,700 5.5%

2,700-2,850 6.0%

2,850-3,000 6.5%

3,000-3150 7.0%

3,150-3,300 7.5%

3,300-3,450 8.0%

3,450-3,600 8.5%

Title:

Source:


-

20

40

60

80

100

120

140

160

Jan-13 Apr-13 Jul-13 Oct-13 Jan-14 Apr-14

(RM per tonne)

SOURCES: CIMB SOURCES: CIMB, MPOB


July 7, 2014



22

5.5 Forex fluctuations

Local CPO prices are sensitive to the RM/US$ exchange rate as the international CPO price is quoted in US$. A stronger ringgit would be negative for local CPO prices, though the impact would be mitigated by lower fertiliser costs and reduced capex. Our house view is that the ringgit will weaken to RM3.30/US$1 by end-2014. This will be positive for the local spot CPO price.

Figure 30: Ringgit/US$1 since 2009

Title:

Source:


2.80

2.90

3.00

3.10

3.20

3.30

3.40

3.50

3.60

3.70

3.80

Jan-09 Jul-09 Jan-10 Jul-10 Jan-11 Jul-11 Jan-12 Jul-12 Jan-13 Jul-13 Jan-14 Jul-14

(RM/US$)

SOURCES: CIMB, BLOOMBERG

5.6 Measures to curb property speculation

The government has taken a series of measures since last year to curb rising household debt and property speculation. This has resulted in a dampening of sentiment on properties. We continue to believe that the measures to curb speculation will only have a relatively short-term impact on property demand and the buying will normalise by mid-2014, before picking up strongly in 2H as potential buyers realise that the residential property prices may rise ahead of the implementation of 6% GST in Apr 2015.


July 7, 2014



23

6. FINANCIALS

6.1 Plantation and property are the key revenue contributors

The group's principal activities can be divided into two key segments – oil palm plantation and property development.

In FY11-13, it derived 65-74% of its total revenue from the sale of palm products. The property division accounted for 26 -35% of its FY11-13's total revenue.

Its plantation sales are dependent on its estates’ output and the average selling price (ASP) achieved for its palm products. Its FFB production hinges on the size of its mature estates and FFB yields. Its CPO and PK output depends on the oil extraction rate (OER) and kernel oil extraction (KER) achieved by the mills. ASP for its palm products depends largely on the global supply and demand of edible oils. Property sales are dependent on new launches and the take-up rate of its property products as well as the progress of construction of its properties.

6.2 FY12 earnings hit by lower selling price and higher costs

FY12’s core net profit (excluding a gain on disposal of land of RM3.67m) declined 26% due to lower ASP, weak FFB output, higher estates costs and lower property earnings. ASP achieved for FFB fell 21% to RM603 per tonne in FY12. FFB output fell 4% to 229,890 tonnes due to lower FFB yields.

6.3 Lower CPO prices hurt FY13 earnings

Its core net profit fell by 27% in FY13 due mainly to weaker ASPs achieved for its palm products, but this was partially compensated by the higher FFB output (+3%). The group’s achieved ASP dropped 14% to RM2,376 per tonne for CPO in FY13.


July 7, 2014



24

7. FORECASTS

7.1 Sales driven by higher CPO prices and property sales

We expect the group to record revenue increases in FY14-15 due to higher palm product prices, property sales and maiden revenue contribution from its mining business. We project the group’s FFB production to rise 1% in FY14 to 235,796 tonnes, driven by improving yields and new mature areas. For FY15, we estimate the group's FFB output to increase by 4% to due to higher yields from its existing estates and larger mature areas.

In line with our bullish take on CPO prices, we project TMB to achieve a 14% surge in ASP for CPO to RM2,700/tonne in FY14, followed by a 4% rise to RM2,800 in FY15. Our CPO price assumptions have not factored in the potential development of El Nino due to the unpredictable nature of the severity of the weather conditions, even if one does develop. We expect its property revenue to jump by 14-23% for FY14-15, driven mainly by stronger property sales as the group accelerates its new launches. The group will also receive a new stream of revenue from the bauxite mining unit in FY14-16. Overall, we project the group to record a 39% sales increase in FY14, followed by a 15% increase in FY15.

7.2 Strong core net profit growth in FY14 and FY15

Overall, we project TMB to post a 56% jump in its core net profit for FY14, driven mainly by higher CPO prices, stronger property earnings and the additional income stream from its bauxite mining business. The core earnings growth will moderate to 22% in FY15 due partly to the higher earnings base that we expect it to achieve in FY14. Furthermore, we expect CPO prices to increase at a slower rate of 4% in FY15.

7.3 Capex plan

We expect TMB’s capex to be at around RM35m in FY14 and FY15, which will be utilised for its new planting programme, expansion of its palm oil mill capacity from 30 tonnes/hr to 45 tonnes/hr by 2016, as well as working capital and infrastructure works at its property project.

The group indicated that its planned capex for estates development (replanting and new planting) is approximately RM61.27m for FY14-15. It plans to utilise RM28.5m of the IPO proceeds to partly fund the plantation development capex. The expansion cost for its palm oil mill is expected to be around RM5m, which will also be funded through the IPO proceeds. Apart from these, around RM13m of the proceeds will be utilised to fund infrastructure works at the KotaSAS township and another RM13m to repay the bank borrowings.


July 7, 2014



25

Figure 31: Historical and projected capex spend

Title:

Source:


-

5

10

15

20

25

30

35

40

45

50

2011 2012 2013 2014F 2015F

(RM m)


Figure 32: Planned utilisation of IPO proceeds

Details Timeframe Amount (RM m) % of total proceeds

Estate development Within 24 months 28.5 43.7%

Expansion of palm oil mill Within 24 months 5.0 7.7%

Infrastructure work of KotaSAS Township Within 24 months 13.0 20.0%

Repayment of bank borrowings Within 6 months 13.1 20.1%

Listing expenses Within 6 months 5.6 8.6%

Total gross proceeds 65.2 100.0% SOURCES: CIMB, COMPANY REPORTS

7.4 Low net gearing level as at end-Dec 2013

TMB's net gearing level as at end-Dec 2013 of 0.015x was lower than its plantation peers. This was partly due to the strong cashflow from its plantation business over the past few years. The group will raise RM65.2m from its listing exercise. Following this, the group will be in a net cash position of around RM5.6m.


July 7, 2014



26

Figure 33: Income Statement

FY End Dec (RM m) 2011 2012 2013 2014F 2015F 2016F

Revenue 282.4 207.7 243.5 337.3 388.6 386.3

Cost of sales (136.1) (103.2) (151.6) (201.2) (228.0) (229.5)

Gross profit 146.3 104.5 91.8 136.1 160.7 156.8

Other operating income 2.5 5.5 1.8 1.8 1.8 1.8

Other expenses (30.8) (22.6) (27.4) (28.7) (30.1) (31.5)

Estate general expenses (3.0) (2.7) (2.2) (2.3) (2.3) (2.4)

Employee benefits expenses (8.7) (9.0) (10.2) (10.7) (11.2) (11.8)

Depreciation (1.9) (3.0) (3.4) (3.5) (3.7) (3.9)

Selling and distribution expenses 0.0 (0.7) (1.4) (1.5) (1.5) (1.6)

Miscellaneous expenses (17.2) (7.3) (10.2) (10.7) (11.3) (11.9)

Operating profit 117.9 87.4 66.3 109.2 132.4 127.1

Finance costs (6.0) (4.3) (4.6) (2.3) (1.3) (0.9)

Profit before tax 112.0 83.1 61.7 106.9 131.1 126.2

Income tax (26.6) (17.3) (17.0) (26.7) (32.8) (31.5)

Profit after tax 85.4 65.7 44.7 80.2 98.3 94.6

Minority interests (4.8) (3.2) (1.8) (13.1) (16.5) (13.4)

PATMI 80.6 62.5 42.9 67.1 81.9 81.3

Core net profit 79.6 58.8 42.9 67.1 81.9 81.3

yoy growth

Revenue - -26% 17% 39% 15% -1%

Cost of sales - -24% 47% 33% 13% 1%

Gross profit - -29% -12% 48% 18% -2%

Profit before tax - -26% -26% 73% 23% -4%

Income tax - -35% -2% 57% 23% -4%

PAT - -23% -32% 79% 23% -4%

PATMI - -22% -31% 56% 22% -1%

Core net profit - -26% -27% 56% 22% -1%

Others

Gross profit margin - 50% 38% 40% 41% 41%

PBT margin - 40% 25% 32% 34% 33%

PAT margin - 32% 18% 24% 25% 25%

Effective tax rate - 21% 28% 25% 25% 25%

PATMI margin - 30% 18% 20% 21% 21% SOURCES: CIMB, COMPANY REPORTS

Figure 34: Valuation statistics

FY End Dec (RM m) 2011 2012 2013 2014F 2015F 2016F

No of shares (m) 398.2 398.2 398.2 398.2 398.2 398.2

EPS per share (sen) 20.2 15.7 10.8 16.8 20.6 20.4

Core EPS per share (sen) 20.0 14.8 10.8 16.8 20.6 20.4

DPS per share (sen) na na na 8.4 10.3 10.2

Net asset value per share (sen) 50.7 66.7 77.1 81.2 105.4 115.7

IPO price (sen) 125 125 125 125 125 125

P/E (x) @ IPO price 6.2 8.0 11.6 7.4 6.1 6.1

Core P/E (x) 6.3 8.5 11.6 7.4 6.1 6.1

Dividend yield na na na 6.7% 8.2% 8.2%

P/NAV (x) 2.5 1.9 1.6 1.5 1.2 1.1



July 7, 2014



27

Figure 35: Breakdown of revenue, gross profit and gross profit margin

FYE Dec (RM m)

Breakdown of revenue 2011 2012 2013 2014F 2015F 2016F

Plantation 183.5 144.2 179.5 193.1 209.0 219.6

Property 99.0 63.4 64.0 76.9 89.9 105.4

Mining - - - 67.3 89.7 61.3

Total 282.4 207.7 243.5 337.3 388.6 386.3

Breakdown of gross profit 2011 2012 2013 2014F 2015F 2016F

Plantation 127.9 90.3 76.0 86.8 96.1 99.5

Property 18.5 14.2 15.8 17.9 22.7 28.6

Mining - - - 31.4 41.9 28.6

Total 146.3 104.5 91.8 136.1 160.7 156.8

Gross profit margin 2011 2012 2013 2014F 2015F 2016F

Plantation 70% 63% 42% 45% 46% 45%

Property 19% 22% 25% 23% 25% 27%

Mining - - - 47% 47% 47%

Total 52% 50% 38% 40% 41% 41% SOURCES: CIMB, COMPANY REPORTS

Figure 36: Key assumptions

FYE Dec (RM m) 2011 2012 2013 2014F 2015F 2016F

Avg mature area (ha) 10,109 10,416 11,385 11,446 11,697 12,409

FFB yield per ha (tonnes) 23.8 22.1 20.4 20.6 21.0 20.8

Oil extraction rate na 20.6% 20.0% 20.0% 20.0% 20.0%

Kernel extraction rate na 5.1% 6.0% 6.0% 6.0% 6.0%

FFB production (tonnes) 240,184 229,890 232,605 235,796 245,644 258,102

FFB processed (tonnes) na 69,821 158,533 164,767 172,345 181,022

CPO production (tonnes) na 14,243 31,676 32,920 34,435 36,168

PK production (tonnes) na 3,564 9,465 9,837 10,289 10,807

FFB selling price (RM per tonne) 764 603 520 567 588 588

CPO selling price (RM per tonne) 3,230 2,777 2,376 2,700 2,800 2,800

PK selling price (RM per tonne) 2,194 1,539 1,353 1,620 1,680 1,680

FFB output growth na -4% 1% 1% 4% 5%

Change in FFB selling price na -14% -14% 14% 4% 0%

Change in CPO selling price na -14% -14% 14% 4% 0%

Change in PK selling price na -30% -12% 20% 4% 0% SOURCES: CIMB, COMPANY REPORTS


July 7, 2014



28

Figure 37: Balance sheet

FYE Dec (RM m) 2011 2012 2013 2014F 2015F 2016F

Assets

Non-current assets

Property, plant and equipment 117.1 140.9 149.0 157.5 165.5 173.0

Biological assets 57.6 69.8 79.1 96.2 113.2 130.3

Goodwill - - - - - -

Land use rights 41.0 40.5 39.9 39.3 38.7 38.2

Land held for property development 29.7 29.2 28.6 28.6 28.6 28.6

Other investments 0.0 0.0 0.0 0.0 0.0 0.0

Total 245.5 280.3 296.6 321.6 346.1 370.1

Current assets

Property development costs 63.7 67.8 73.2 88.0 102.9 120.6

Inventories 3.0 10.5 12.9 17.8 20.5 20.4

Trade and other receivables 38.3 28.5 32.8 45.5 52.4 52.1

Other current assets 15.3 5.9 6.4 6.4 6.4 6.4

Investment securities 0.0 4.6 4.6 5.2 5.9 6.6

Tax recoverable - 0.4 0.6 0.6 0.6 0.6

Cash and bank balances 61.4 69.0 46.9 86.6 91.5 93.2

Total 181.6 186.7 177.4 250.2 280.2 299.9

Total assets 427.2 467.0 473.9 571.8 626.3 670.0

Liabilities

Current liabilities

Loans and borrowings 23.1 29.1 12.4 12.4 12.4 12.4

Trade and other payables 27.2 33.4 33.6 46.6 53.7 53.3

Other current liabilities 0.9 4.5 7.5 7.5 7.5 7.5

Income tax payable 1.5 2.5 2.7 2.7 2.7 2.7

Total 52.8 69.6 56.2 69.1 76.2 75.9

Net current assets 128.9 117.1 121.2 181.1 204.0 224.0

Non-current liabilities

Loans and borrowings 65.3 43.8 44.5 20.0 10.0 -

Retirement benefit obligations 2.5 3.9 4.1 4.1 4.1 4.1

Deferred tax liabilities 34.3 28.8 29.5 29.5 29.5 29.5

Total 102.1 76.5 78.1 53.6 43.6 33.6

Total liabilities 154.9 146.0 134.3 122.8 119.9 109.6

Net assets 272.3 320.9 339.6 449.0 506.4 560.4

Equity

Share capital 170.0 173.0 173.0 199.1 199.1 199.1

Share premium - - - 36.6 36.6 36.6

Other reserve 3.5 3.5 3.5 3.5 3.5 3.5

Capital redemption reserve 0.4 0.7 1.1 1.1 1.1 1.1

Retained earnings 91.5 129.5 145.9 179.4 220.4 261.0

Total shareholders' funds 265.4 306.8 323.5 419.7 460.7 501.3

Non-controlling interests 6.9 14.2 16.2 29.3 45.7 59.1

Total equity 272.3 320.9 339.6 449.0 506.4 560.4

Total equity and liabilities 427.2 467.0 473.9 571.8 626.3 670.0 SOURCES: CIMB, COMPANY REPORTS


July 7, 2014



29

Figure 38: Cashflow statement

FYE Dec (RM m) 2011 2012 2013 2014F 2015F 2016F

Profit before tax 112.0 83.0 61.7 106.9 131.1 126.2

Adjustments for

Depreciation of property, plant and equipment 2.3 4.2 5.8 6.4 7.0 7.5

Amortisation of plantation development expenditure 2.1 2.6 2.9 2.9 2.9 2.9

Amortisation of land use rights 0.6 0.6 0.6 0.6 0.6 0.6

Property. plant and equipment written off 0.0 0.3 0.0 - - -

Inventories written down - 0.9 0.2 - - -

Loss on sale of livestocks 0.1 - 0.0 - - -

Gain on sale of livestocks - (0.1) - - - -

Bad debts written off 0.5 0.6 - - - -

Pension costs - defined benefit plan 0.3 0.3 0.5 - - -

Gain on disposal of property, plant and equipment (0.0) (3.7) - - - -

Interest expense 6.0 4.3 3.1 - - -

Profit on investments in Islamic funds (1.3) (0.9) (0.7) (0.7) (0.7) (0.7)

Interest income (0.6) (0.4) (0.5) - - -

Negative goodwill on acquisition recognised in profit or loss - - - - - -

Impairment of goodwill 8.9 - (0.1) - - -

Unwinding discounts of the RPS - - 1.5 - - -

Operating cash flows before changes in working capital carried forward 130.8 91.8 75.1 116.2 140.9 136.5

- - -

Decrease/(increase) in trade and other receivables (26.6) 18.7 (4.8) (12.6) (6.9) 0.3

Increase in property development costs (1.2) (3.5) (4.7) (14.8) (14.9) (17.7)

Decrease/(increase) in inventories (0.9) (8.3) (2.5) (5.0) (2.7) 0.1

Increasel(decrease) in trade and other payables (8.1) 9.3 2.9 12.9 7.1 (0.3)

Cash flows from operations 93.9 108.0 66.0 96.7 123.5 119.0

Income taxes refund - - 0.2 - - -

Income taxes paid (28.8) (22.2) (16.4) (26.7) (32.8) (31.5)

Net cash flows from operating activities 65.2 85.7 49.7 70.0 90.7 87.4

Investing activities

Proceeds from sales of livestock 0.3 0.3 0.3 - - -

Proceeds from disposal of property, plant and equipment 0.0 4.0 - - - -

Purchase of property, plant and equipment (25.8) (27.6) (13.9) (25.0) (25.0) (25.0)

Purchase of biological assets (8.9) (11.1) (12.3) (10.0) (10.0) (10.0)

Purchase of livestock (0.3) (0.2) (0.2) - - -

Purchase of investment in marketable securities - (4.6) - - - -

Net cash outflow on acquisition of an estate - (4.0) - - - -

Profit on investments in Islamic funds 1.3 0.9 0.7 - - -

Interest received 0.6 0.4 0.5 - - -

Net cash flows used in investing activities (32.7) (41.8) (25.0) (35.0) (35.0) (35.0)

Financing activities

Repayment of hire purchase financing (0.3) (0.4) (0.5) - - -

Repayment of term loans (60.9) (18.1) (22.8) (24.5) (10.0) (10.0)

Drawdown of term loans 26.5 8.8 9.2 - - -

Cost of financing paid (6.0) (4.3) (3.1) - - -

Dividends paid to equity holders of the Company (17.0) (17.3) (26.0) (33.5) (40.9) (40.6)

Dividend paid to non-controlling interests (4.0) (1.9) (1.0) - - -

Proceeds from issuance of ordinary shares by subsidiaries to non-controlling interests 0.0 0.5 0.9 - - -

Proceeds from issuance of ordinary shares - - - 62.7 - -

Repayment of RPS (3.5) (3.5) (3.5) - - -

Release/(placement) of restricted cash 0.4 - - - - -

Net cash flows (used in)/from financing activities (64.8) (36.3) (46.8) 4.7 (50.9) (50.6)

Net (decrease)/increase in cash and cash equivalents (32.3) 7.6 (22.1) 39.7 4.8 1.8

Cash and cash equivalents at 1 January 90.9 58.5 66.1 44.1 83.8 88.6

Cash and cash equivalents at 31 December 58.5 66.1 44.1 83.8 88.6 90.4 SOURCES: CIMB, COMPANY REPORTS


July 7, 2014



30

8. VALUATION AND RECOMMENDATION

8.1 SOP valuation

We have used the sum of parts (SOP) valuation methodology to arrive at our target price for Tanah Makmur Berhad, as we believe that this method allows us to apply the appropriate valuation methods to its various business segments.

8.2 Offers 50% upside to our target price of RM1.88

The group's plantation assets are the most valuable assets for the group and will benefit from higher CPO prices. We value these assets at 12.6x forward P/E, which represents a 30% discount to the 18x P/E we apply to large-cap Malaysian planters that own more than 100,000 ha of planted estates. Based on this, we arrived at a market valuation of RM505m for its plantation division.

For the property business, we assigned market value estimates to its 1,355 acres of property landbank. We value its Kuantan landbank at RM7 per sq ft, which is similar to the price that IJM Land had proposed to pay for the residential land near Kuantan Port in a transaction announced in Dec 2013. We arrived at a RNAV value of RM413m for the property assets. After applying a 50% discount to its RNAV given that it is relatively new in the property market, we arrived at a market valuation of RM207m for its property assets.

We used the discounted cashflow method to value the mining business as it allows us to capture the short-term cashflow of this project. We discounted our estimated cashflow from this at a discount rate of 13% and arrived at RM30m as its share of the profit. In our mining cashflow projections, we have assumed that the group will be able to sell its bauxite at US$46 per tonne.

We stripped out the group's net debt following the IPO from the total value of the group's assets to arrive at its target price of RM1.88 per share. This represents a 50% upside from its IPO price of RM1.25 per share. At our target price, the implied forward P/E of the stock is 11.1x for FY14 and 9.1x for FY15. This is at a discount to the average P/E of 17x for the Malaysian planters under coverage, mainly to reflect the smaller market cap base of the stock. At our target price, the implied EV/planted ha of TMB works out to be RM54.8k per ha, which is conservative but takes into consideration the older age profile of its estates.

Figure 39: SOP Valuation

Segments Stake Valuation method Value (RMm)

Plantations 100% FY15 P/E of 12.6x 504.8

Property 100% 50% discount to RNAV 206.6

Mining business 60% DCF @ 13% discount rate 29.8

Cash 44.5

Debt (38.8)

Sum of parts 746.8

No of shares (m) 398.2

Sum of parts (RM per share) 1.88

IPO price (RM per share) 1.25

Upside to our SOP valuation 50% SOURCES: CIMB, COMPANY REPORTS

8.3 We expect a dividend payout of 50%

TMB plans to pay at least 30% of its net profit, excluding non-recurring income, as dividends. We are projecting a higher dividend payout ratio of 50%, in view of its strong cashflow from operations and balance sheet. This suggests a net dividend yield of 4.5-5.5% at our target price.


July 7, 2014

THIS RESEARCH 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 DOCUMENT HAS BEEN FURNISHED TO YOU SOLELY FOR YOUR INFORMATION AND MAY NOT BE REPRODUCED OR


31

Figure 40: Sector Comparisons

Price Target Price

(local curr) (local curr) CY2014 CY2015 CY2014 CY2015 CY2014 CY2015 CY2014 CY2015 CY2014 CY2015

Sime Darby Bhd SIME MK Hold 9.66 9.85 18,280 18.0 16.0 5.9% 1.93 1.82 11.1% 11.8% 10.3 9.1 2.8% 3.1%

IOI Corporation IOI MK Reduce 5.23 4.49 10,372 22.3 23.2 -3.8% 5.02 4.53 18.1% 20.5% 16.4 16.9 2.2% 2.2%

Kuala Lumpur Kepong KLK MK Reduce 24.26 22.50 8,062 22.4 19.8 7.1% 3.24 3.04 14.7% 15.9% 14.0 12.4 3.0% 3.0%

Felda Global Ventures FGV MK Hold 4.21 4.72 4,793 22.3 18.7 11.0% 2.22 2.10 10.1% 11.5% 10.8 9.5 2.2% 2.7%

Genting Plantations GENP MK Hold 11.62 11.10 2,775 23.0 20.6 16.1% 2.26 2.08 10.4% 10.6% 17.0 15.0 1.0% 1.0%

Hap Seng Plantations HAPL MK Hold 2.74 2.85 684 14.0 12.9 20.1% 1.09 1.05 7.8% 8.3% 8.5 7.5 4.3% 4.6%

Jaya Tiasa Holdings JT MK Reduce 2.64 2.40 797 17.8 12.6 33.3% 1.36 1.25 8.0% 10.3% 10.1 7.7 1.1% 1.6%

Ta Ann TAH MK Add 4.34 4.68 502 14.3 11.5 52.2% 1.47 1.38 10.6% 12.4% 7.2 5.6 3.7% 2.4%

Malaysia Average 19.3 16.9 17.7% 2.3 2.2 11.4% 12.6% 11.8 10.5 2.5% 2.6%

Wilmar International WIL SP Hold 3.20 3.47 16,422 14.9 12.9 3.4% 1.03 0.97 7.1% 7.7% 13.7 12.0 1.3% 1.5%

Golden Agri-Resources GGR SP Hold 0.55 0.60 5,663 15.2 13.0 14.7% 0.63 0.61 4.4% 5.0% 9.3 8.6 2.1% 2.4%

First Resources Ltd FR SP Add 2.36 2.75 2,998 14.7 10.6 14.5% 2.64 2.25 19.1% 22.9% 10.0 7.3 2.0% 2.8%

Indofood Agri Resources IFAR SP Hold 1.00 1.15 1,131 16.1 15.0 13.5% 0.93 0.87 5.8% 6.0% 8.3 8.6 0.0% 0.0%

Singapore Average 16.0 13.9 11.5% 1.2 1.1 8.2% 9.3% 10.6 9.6 1.3% 1.6%

Astra Agro Lestari AALI IJ Add 27,600 32,300 3,648 13.2 13.7 6.0% 3.51 3.09 29.6% 24.0% 8.1 8.5 1.4% 2.6%

Salim Invomas Pratama SIMP IJ Add 930 1,180 1,235 17.3 15.8 8.6% 1.03 0.97 5.9% 6.3% 7.5 8.2 1.2% 1.3%

London Sumatra LSIP IJ Hold 2,250 2,530 1,289 12.0 11.4 20.6% 2.00 1.80 18.5% 14.4% 7.0 5.9 2.0% 3.6%

Sampoerna Agro SGRO IJ Add 2,265 2,680 359 13.9 10.9 44.3% 1.44 1.30 10.9% 12.5% 7.0 5.8 0.5% 1.4%

BW Plantation BWPT IJ Add 1,205 1,520 456 13.6 9.9 54.7% 2.09 1.74 16.1% 19.1% 10.9 7.9 0.1% 0.3%

Indonesia Average 14.0 12.3 26.9% 2.0 1.8 16.2% 15.3% 8.1 7.3 1.0% 1.8%

Average (all) 16.9 14.8 18.5% 1.9 1.8 11.8% 12.4% 10.4 9.3 1.8% 2.1%

EV/EBITDA (x) Dividend Yield (%)Core P/E (x) 3-year EPS

CAGR (%)Company

Bloomberg

TickerRecom.

Market Cap

(US$ m)

P/BV (x) Recurring ROE (%)

SOURCES: CIMB, COMPANY REPORTS, BLOOMBERG


July 7, 2014




32

9. APPENDICES

9.1 Board of Directors and key management

Figure 41: Director profiles

Name Designation Age Profile

YAM Tengku Tan Sri (Dr)

Hajjah Meriam binti Sultan

Haji Ahmad Shah

Chairman and Non-

Independent Non-

Executive Director

59 She was conferred a honorary doctorate in social development from Lim Kok Wing University in 2013. She

started her career as the executive vice chairman of TAS Industries on 1 September 1990. She then joined

Kurnia Setia on 27 June 2005 when she was appointed as a director of Kurnia Setia. Subsequent to the

Privatisation, YAM Tengku Tan Sri (Dr) Hajjah Meriam binti Sultan Haji Ahmad Shah assumed the positions of

Deputy Chairman of Tanah Makmur on 31 January 2011 and thereafter as the Chairman on 24 September 2013.

Currently, she also sits on the board of directors of various private limited companies.

YM Tengku Dato’ Zubir bin

Tengku Dato’ Ubaidillah

Managing Director 52 He graduated with a Bachelor of Science (Computer Science) from California State University, Chico, USA in

1986. He started his career with Petroliam Nasional Berhad (“PETRONAS”) as an information system executive

in 1986. He was then promoted to the position of head of computer operation in PETRONAS. In 1988, he joined

the Road Builder (M) Holdings Berhad’s group of companies as the corporate affairs manager and was

appointed as their group general manager, property division in 1994. He subsequently resigned in 1998. From

1998 to 2004, he was involved in his own private businesses which include the construction of East Coast

Expressway, trading in construction materials and quarrying. He joined Kurnia Setia in 2005 as the general

manager of corporate development and on 1 January 2006 he was appointed as the chief operating officer. On 8

November 2008, he was promoted to the position of managing director of Kurnia Setia. Subsequent to the

Privatisation, YM Tengku Dato’ Zubir bin Tengku Dato' Ubaidillah was transferred to our Company and assumed

the current position of Managing Director of Tanah Makmur. Currently, he also sits on the board of directors of

various private limited companies.

YM Tengku Dato’ Ahmad

Faisal bin Tengku Ibrahim

Non-Independent Non-

Executive Director

48 He graduated with a Bachelor of Science (Hons) Degree from the London School of Economics, United

Kingdom in 1988. He began his career in 1988 as a dealers’ representative with RHB Securities Berhad until

1990 and thereafter with PB Securities Berhad from 1991 to 1995. He assumed the position of the chief

executive officer in Kitaran Ventures Sdn Bhd from 1997 to 2000. He also held directorships in ING Bhd from

1994 to 2012, Ekovest Berhad from 1995 to 1998, Nanyang Press Holdings Berhad from 1996 to 2001,

Putrajaya Perdana Berhad from 2008 to 2009, and EON Capital Bhd from 2010 to 2011. On 31 January 2011,

he joined Tanah Makmur as a Non-Independent Non-Executive Director. Currently, he also sits on the board of

directors of various private limited companies

YH Dato’ Wan Bakri bin

Wan Ismail

Non-Independent Non-

Executive Director

60 He graduated with a Bachelor of Social Science from Universiti Sains Malaysia in 1994. He started his career

as the supervisor of LKPP in 1980 and was promoted to the position of executive officer of administration of

LKPP in 1994. He was appointed as manager of administration in 2002 and as manager of finance in 2010. He

assumed the position of deputy general manager of LKPP in 2011 until his promotion to the position of general

manager in 2014. Currently, he also sits on the board of directors of various subsidiaries of LKPP.

YBhg Tan Sri Dato’ Sri

Abdul Aziz bin Abdul

Rahman

Independent Non-

Executive Director

68 He graduated with a Bachelor of Commerce in Accountancy from University of New South Wales Sydney,

Australia in 1970. He holds a professional certificate from the Malaysian Institute of Certified Public

Accountants and is a member of the Malaysian Institute of Accountants. He was a consultant with Price

Waterhouse & Co (Sydney) Australia from 1969 and 1972. He then joined Malaysian Airlines System Berhad

as manager of finance from 1972 to 1981. Soon after that, he assumed the position of managing director of

Bank Kerjasama Rakyat Malaysia Berhad from 1981 to 1982. He sat on the board of directors of various private

and public listed companies such as Federal Land Development Authority (FELDA) from 1986 to 1991. He was

also the chairman of Mentiga Corporation Berhad from 1989 to 1993, and the chairman of Far East Holdings

Berhad from 1991 to 1994. Currently, he sits on the board of directors of various private and public listed

companies.

YH Dato’ Cheong Keap Tai Independent Non-

Executive Director

66 He graduated with a Bachelor of Accountancy from the National University of Singapore in 1973. He is a

Chartered Accountant of Malaysian Institute of Accountants and a member of the Malaysian Institute of

Certified Public Accountants, a member of the Malaysian Institute of Taxation and Licensed Tax Agent and

also a member of the Institute of Chartered Secretaries and Administrators. He was also the executive director

and partner of Coopers & Lybrand, and upon its merger with Price Waterhouse, he was the executive director,

partner and chairman of the governance board of PricewaterhouseCoopers until his retirement in 2003. He

assumed the position of non-independent non-executive director of Cement Industries of Malaysia Berhad from

2001 to 2009, Opus Group Berhad from 2007 to 2009, Opus International Group Plc from 2001 to 2007, and

was formerly the non-executive director of Kualiti Alam Sdn Bhd from 2001 to 2010 and Commerce Assets

Venture Sdn Bhd from 2005 to 2011. Currently, he is a partner of Ash’ari Cheong and he sits on the board of

directors of various public listed companies. SOURCES: CIMB, COMPANY REPORTS


July 7, 2014




33

Figure 42: Director profiles (continued)


YH Dato’ Thavalingam A/L

C. Thavarajah

Independent Non-

Executive Director

49 He graduated with a Bachelor of Law from Liverpool Polytechnic United Kingdom in 1988. He was admitted as a

Barrister-at-Law, Gray’s Inn United Kingdom in 1989. He was then called to the Malaysian Bar in 1990. He

commenced his legal practice in Messrs Shearn Delamore & Co after he was called to the Malaysian Bar. He

became a partner at Messrs Zaid Ibrahim & Co from 2000 to 2010. He is currently a partner with Messrs Lee

Hishammuddin Allen & Gledhill. He also assumed the position of director of Gading Sari Aviation Services Sdn

Bhd from 2010 to 2013. YH Dato’ Thavalingam had been appointed in 2008 by the Government to serve on the

National Labour Advisory Council for a two-year term. He was also the honorary secretary of the Malaysian

Employers Federation from 2006 to 2011. He currently sits on the editorial advisory board of the Industrial Law

Reports.

YH Dato’ Dr Zaha Rina

binti Zahari

Independent Non-

Executive Director

53 She obtained her Bachelor of Accounting and Finance from the Leeds Metropolitan University, United Kingdom

in 1984 and a Master of Business Administration from the University of Hull, United Kingdom in 1991. She also

obtained a Doctorate in Business Administration in 2002, focusing on capital markets research and

specialising in derivatives. She started her career as a finance executive in Sri Communication Engineering Sdn

Bhd between 1984 and 1987. From 1987 to 1988, she joined Sri Communication Turnkey Sdn Bhd as a

financial controller. She then assumed the position of director of finance and administration in Sri

Communication Group, which is inclusive of Sri Communications Sdn Bhd, Sri Communication Travel Sdn Bhd,

Sri Communications Options and Futures Sdn Bhd and Sri Communication Engineering Sdn Bhd from 1988 to

2000. She also has previous board appointments at the Commodity and Monetary Exchange of Malaysia, from

1993 to 1996 and subsequently assumed the position of chief operating officer of Kuala Lumpur and Financial

Exchange and Malaysian Derivatives Exchange (“MDEX”) in 2001. She was then appointed as the head of

exchanges, managing the operations of KLSE (now known as Bursa Securities), Malaysian Exchange of

Securities Dealings and Automated Quotation (MESDAQ), MDEX and Labuan International Financial

Exchanges in September 2003, prior to KLSE’s demutualisation. In 2004 until 2006, she assumed the position

of chief executive officer of RHB Securities Sdn Bhd. She was the consultant for the RHB Group in Singapore

from 2007 to 2008. She was also the consultant to Financial Technologies Middle East in the setting up of

Bahrain Financial Exchange which was launched in January 2009. She joined MAA Takaful Bhd as an

independent director and chairman of the audit and risk committee from 2007 to 2012, and was appointed as an

independent director and member of the audit committee of EON Capital Bhd and EON Bank Bhd from 2010 to

2011. She also assumed the positions of independent director and member of the audit committee of MIMB

Investment Bank Berhad from 2011 to 2013. She was also an independent director of Zurich Insurance

Malaysia Berhad from 2012 to 2013. Currently, she sits on the board of directors of various private and public

listed companies.

Darawati Hussain binti

Dato’ Seri Abdul Latiff

Independent Non-

Executive Director

45 She graduated with a Bachelors’ Degree in Economics and Accountancy from Durham University, United

Kingdom in 1991 and a Masters in Business Administration from London Business School, United Kingdom in

1998. She had also obtained the Chartered Financial Analyst (CFA) qualification in 2001. She started her

career in 1991 as an executive of corporate finance/advisory with Commerce International Merchant Bankers

Berhad and subsequently left as a manager in 1996. She then spent five years from 1997 to 2001 in London

where she was a European equities portfolio manager in Mondrian Investment Partners Limited, a fund

management company. In September 2001, she re-joined CIMB group to set up and develop the private equity

arm, where she was the head of Private Equity and Venture Capital of CIMB until August 2012, overseeing a

private equity portfolio of more than 50 companies that operate in different sectors and in various stages of

business maturity. Subsequently, she was made head of Co-investor and Fund Relations of CIMB Group

Strategy and Strategic Investments (CIMB GSSI) until April 2014. In April 2014, she left CIMB group to become

the executive director of Syalin Sdn Bhd, a family run company involved in property investment and investment

holding activities. Currently, she also sits on the board of directors of various private companies.

YM Tengku Dato’ Uzir bin


(Alternate Director to

Tengku Dato’ Ahmad

Faisal bin Tengku Ibrahim)

Alternate Director to YM

Tengku Dato’ Ahmad

Faisal bin Tengku

Ibrahim

55 He graduated with a Bachelor of Science (Hons) Degree in Civil Engineering from the University of London,

United Kingdom in 1983. He started his career in Jabatan Kerja Raya as the design and research section

geotechnical engineer in 1983. He was then promoted to the position of assistant resident engineer under Felda

Unit of Jabatan Kerja Raya in 1984 until 1985. He joined Road Builder (M) Sdn Bhd as a director from 1988 to

1999 and he also held the position of director of Road Builder (M) Holdings Berhad between 1992 and 2005. He

was also the director cum group chief executive officer of Malaysian Investment Corporation Berhad from 1990

to 1993. Currently, he is a director of Kumpulan Unik BBP Sdn Bhd, a position he holds since 1997. He joined

Kurnia Setia on 19 November 2004 as a non-executive director as a nominee of HRH Tengku Abdullah Ibni

Sultan Haji Ahmad Shah. Subsequent to the Privatisation, YM Tengku Dato’ Uzir bin Tengku Dato' Ubaidillah

was transferred to our Company and assumed the position of Executive Director of Tanah Makmur on 1 January

2011. He resigned on 3 December 2013 from his position of Executive Director of Tanah Makmur and on the

same day was appointed as the Alternate Director to YM Tengku Dato’ Ahmad Faisal bin Tengku Ibrahim.

Currently, he is the executive chairman of WZ Satu Berhad and he also sits on the board of directors of various

private limited companies. SOURCES: CIMB, COMPANY REPORTS


July 7, 2014




34

Figure 43: Key Management


YM Tengku Dato’ Zubir bin


Managing Director 52 Refer to Board of Directors' profile

Teh Foo Hock Chief Financial Officer 49 He is a member of the Malaysian Institute of Certified Public Accountants and a chartered accountant with the

Malaysian Institute of Accountants since 1996. He is also an associate member of the Malaysian Institute of

Taxation since 1997 and the Institute of Internal Auditors of Malaysia since 1999. He began his career with

Messrs. Coopers & Lybrand (now known as PricewaterhouseCoopers) (“PwC”) in 1985 as an article clerk. He

held a few positions in PwC, including audit senior and audit supervisor. In 1996, he was then promoted to audit

and assurance manager. He left PwC in April 1997 to join Kinsteel Berhad (a public listed company on the Main

Market of Bursa Securities) in May 1997 as group accountant. In 2002, his job responsibility was expanded to

include head of treasury. He had held the position of group accountant/head of treasury in Kinsteel Berhad until

his resignation in April 2014. He also held the role as joint company secretary of Kinsteel Berhad from August

2012 to September 2013. During his tenure in Kinsteel Berhad group, he was responsible for the preparation of

various financial projections, budgets, product costing reports and monthly management reports. He also

managed Kinsteel Berhad group’s financial and accounting policies and monitored foreign exchange exposure.

Suzilah binti Haji Wahid Company Secretary 53 She pursued the professional course of Institute of Chartered Secretaries and Administrators (ICSA) in

University Teknologi MARA and later furthered the said professional course in London School of Accountancy,

United Kingdom from 1985 to 1987. She started her career in 1987 with LKPP as the group company secretary

until 1995. She was the company secretary of Kurnia Setia since 7 November 1995 when it was still listed.

Subsequent to the Privatisation, she was transferred to TMB and assumed the same position until present.

Abdul Razak bin Md Yusof General Manager,

Finance and Accounts

56 He graduated with a Diploma in Accountancy from University Teknologi Mara in 1991. He subsequently obtained

a Bachelor of Accountancy (Honours) from the same university in 2000. He is a member of the Malaysian

Institute of Accountants since April 2001. He started his career in 1978 with Syarikat Ladang LKPP Sdn Bhd

until 1984. He later joined Kurnia Setia in 1984 as a special grade accounts clerk and in 1992 he was promoted

to account executive. In 1995, he was appointed as assistant account manager and subsequently as finance

manager in 2005. In 2008, he was then promoted to senior finance manager. Subsequent to the Privatisation,

Abdul Razak bin Md Yusof was transferred to the Company and assumed the position of General Manager,

Finance and Accounts of Tanah Makmur on 1 July 2011.

Alias bin Awang General Manager,

Plantation

52 He graduated with a Master of Business Administration from University Utara Malaysia in 2012. He started his

career in 1990 with Golden Hope Berhad as cadet assistant manager until 1991. From 1991 to 1999, he was the

assistant manager of Austral Enterprises Berhad. After that, he held the post of manager of Kosma Plantation

Berhad from 1999 to 2002. Soon after that, he assumed the position of manager of IOI Corporation Berhad from

2002 to 2006 and he joined Kurnia Setia as the head of plantation development in 2006. Subsequent to the

Privatisation, Alias bin Awang was transferred to the Company and assumed the position of General Manager,

Plantation of Tanah Makmur on 1 July 2011.

Azlan Shah bin Haji Mohd

Yusoh

Senior Project Manager 40 He graduated with a Bachelor of Science in Land Surveying and Mapping Science from University of Newcastle-

upon-Tyne, United Kingdom in 1997. He started his career in 1997 in Highway Development Corporation Sdn

Bhd. In 2002 he joined Tastu Bina as administration and safety manager. From 2002 to 2005, he was the head

of plant, machinery and equipment of BBP Bina Sdn Bhd. He joined Kurnia Setia as the project manager in

2006 and was promoted to the position of senior project manager on 1 April 2010. Subsequent to the

Privatisation, Azlan Shah bin Haji Mohd Yusoh was transferred to the Company and assumed the same position

until present.

Tumaran bin Wongso Head of Human

Resources and

Administration

54 He graduated with Bachelor of Applied Science from University Sains Malaysia in 1984. He started his career on

1 June 1985 with LKPP as plant operating officer until 1993. He was the manager, human resources and

administration of Kurnia Setia since 1 January 1993. Subsequent to the Privatisation, he was transferred to the

group and assumed the current position. SOURCES: CIMB, COMPANY REPORTS


July 7, 2014




35

Figure 44: Key Management (continued)


Ashraf bin Abbas Head of Corporate

Development

51 He graduated with a Bachelor of Science in Business Administration from California State University,

Sacramento, USA in 1987. He started his career in 1991 with Kewangan Usaha Bersatu Berhad as credit and

marketing officer until 1993. From 1993 to 2002, he was the branch manager of Malaysia Building Society

Berhad. Soon after that, he assumed the position of audit executive of Kurnia Setia from 2002 to 2005. From

2006 to 2009, he was the assistant manager of corporate development and was promoted to corporate

development manager on 1 April 2010. Subsequent to the Privatisation, Ashraf bin Abbas was transferred to the

Company and assumed the current position of Head of Corporate Development.

Mohd Farizan bin Md

Dalimi

Head of KotaSAS (in

charge of technical

aspects and projects)

34 He graduated with a Bachelor of Civil Engineering from Universiti Teknologi Malaysia in 2002. He started his

career in 2002 with Kumpulan Unik BBP Sdn Bhd as a project engineer until 2010. During his employment with

Kumpulan Unik BBP Sdn Bhd, he was involved in several projects in relation to PLUS expressways, East

Coast expressway and project work under Jabatan Kerja Raya Malaysia. In July 2011, he joined Tanah Makmur

as the Project Manager and was subsequently promoted to the position of Head of KotaSAS (in charge of

technical aspects and projects) in August 2011.

YM Tengku Amir Nasser

Ibni Tengku Ibrahim

Head of KotaSAS (in

charge of administration

and finance)

28 He graduated with a Bachelor in Business and Marketing Management from Oxford Brookes University, United

Kingdom in 2008. He interned with ING Funds in 2007 and was involved in promoting financial products. He was

a trainee in a private equity firm, Parish Capital Advisors Europe LLP in 2010. In January 2012, he joined Tanah

Makmur as the Project Manager. He was subsequently promoted as the Head of KotaSAS (in charge of

administration and finance) in January 2013.

Hishamuddin bin Mohd

Yunus

Head of Palm Oil Mill

Operations

36 He graduated with a Diploma in Mechanical Manufacturing from Universiti Teknologi MARA in 1998 and a

Diploma in Palm Oil Milling Technology and Management from Malaysia Palm Oil Board in 2003. He also

obtained a professional certificate of second grade Steam Engineer Certification from the Department of Safety

and Health of Malaysia in 2005. He started his career in 2002 with Kumpulan Guthrie Berhad as an assistant

manager until 2006 and was promoted to the position of mill manager in 2006 under the same company. He

was also the mill manager of Prosper Group of Companies between 2012 and 2013. In May 2013, he joined

Tanah Makmur to head the palm oil operations of TMB.

Mohamed Azmaili bin

Ismail

Head of Internal Audit 57 He graduated with a Bachelor of Management (Honours) from Open University, Kuala Lumpur in 2006. He

started his career in 1984 until 1992 with Syarikat Ladang LKPP Sdn Bhd. He joined Kurnia Setia in 1992 as a

special grade accounts clerk and was appointed as an internal audit executive in 1995. In 2004, he was

promoted to assistant manager, internal audit. Subsequent to the Privatisation, Mohd Azmaili bin Ismail was

transferred to the Company and promoted to the post of Head of Internal Audit of Tanah Makmur in July 2011.

He is also an associate member of the Institute of Internal Auditors Malaysia since September 1994.



July 7, 2014




36

9.2 Photos from our visit to Tanah Makmur’s estates, property project and mining site

Figure 45: Entrance to Tanah Makmur’s estate Figure 46: Inter-planting at estates due for replanting


Figure 47: Tanah Makmur’s CPO mill Figure 48: Tanah Makmur’s property project


Figure 49: Bauxite mining site Figure 50: Bauxite extracted



July 7, 2014




37

Notes:


July 7, 2014




38

Notes:


July 7, 2014




39

DISCLAIMER

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.

By accepting this report, the recipient hereof represents and warrants that he is entitled to receive such report in accordance with the restrictions set forth below and agrees to be bound by the limitations contained herein (including the “Restrictions on Distributions” set out below). Any failure to comply with these limitations may constitute a violation of law. This publication is being supplied to you strictly on the basis that it will remain confidential. No part of this report may be (i) copied, photocopied, duplicated, stored or reproduced in any form by any means or (ii) redistributed or passed on, directly or indirectly, to any other person in whole or in part, for any purpose without the prior written consent of CIMB.

Unless otherwise specified, this report is based upon sources which CIMB considers to be reasonable. Such sources will, unless otherwise specified, for market data, be market data and prices available from the main stock exchange or market where the relevant security is listed, or, where appropriate, any other market. Information on the accounts and business of company(ies) will generally be based on published statements of the company(ies), information disseminated by regulatory information services, other publicly available information

and information resulting from our research.

Whilst every effort is made to ensure that statements of facts made in this report are accurate, all estimates, projections, forecasts, expressions of opinion and other subjective judgments contained in this report are based on assumptions considered to be reasonable as of the date of the document in which they are contained and must not be construed as a

representation that the matters referred to therein will occur. Past performance is not a reliable indicator of future performance. The value of investments may go down as well as up and those investing may, depending on the investments in question, lose more than the initial investment. No report shall constitute an offer or an invitation by or on behalf of CIMB or its affiliates to any person to buy or sell any investments.

CIMB, its affiliates and related companies, their directors, associates, connected parties and/or employees may own or have positions in securities of the company(ies) covered in this

research report or any securities related thereto and may from time to time add to or dispose of, or may be materially interested in, any such securities. Further, CIMB, its affiliates and its related companies do and seek to do business with the company(ies) covered in this research report and may from time to time act as market maker or have assumed an underwriting commitment in securities of such company(ies), may sell them to or buy them from customers on a principal basis and may also perform or seek to perform significant investment banking, advisory, underwriting or placement services for or relating to such company(ies) as well as solicit such investment, advisory or other services from any entity mentioned in

this report.

CIMB or its affiliates may enter into an agreement with the company(ies) covered in this report relating to the production of research reports. CIMB may disclose the contents of this report to the company(ies) covered by it and may have amended the contents of this report following such disclosure.

The analyst responsible for the production of this report hereby certifies that the views expressed herein accurately and exclusively reflect his or her personal views and opinions about any and all of the issuers or securities analysed in this report and were prepared independently and autonomously. No part of the compensation of the analyst(s) was, is, or will be directly or indirectly related to the inclusion of specific recommendations(s) or view(s) in this report. CIMB prohibits the analyst(s) who prepared this research report from receiving any compensation, incentive or bonus based on specific investment banking transactions or for providing a specific recommendation for, or view of, a particular company. Information

barriers and other arrangements may be established where necessary to prevent conflicts of interests arising. However, the analyst(s) may receive compensation that is based on his/their coverage of company(ies) in the performance of his/their duties or the performance of his/their recommendations and the research personnel involved in the preparation of this report may also participate in the solicitation of the businesses as described above. In reviewing this research report, an investor should be aware that any or all of the foregoing, among other things, may give rise to real or potential conflicts of interest. Additional information is, subject to the duties of confidentiality, available on request.

Reports relating to a specific geographical area are produced by the corresponding CIMB entity as listed in the table below. The term “CIMB” shall denote, where appropriate, the relevant entity distributing or disseminating the report in the particular jurisdiction referenced below, or, in every other case, CIMB Group Holdings Berhad ("CIMBGH") and its affiliates, subsidiaries and related companies.

Country CIMB Entity Regulated by

Australia CIMB Securities (Australia) Limited Australian Securities & Investments Commission

Hong Kong CIMB Securities Limited Securities and Futures Commission Hong Kong

Indonesia PT CIMB Securities Indonesia Financial Services Authority of Indonesia

India CIMB Securities (India) Private Limited Securities and Exchange Board of India (SEBI)

Malaysia CIMB Investment Bank Berhad Securities Commission Malaysia

Singapore CIMB Research Pte. Ltd. Monetary Authority of Singapore

South Korea CIMB Securities Limited, Korea Branch Financial Services Commission and Financial Supervisory Service

Taiwan CIMB Securities Limited, Taiwan Branch Financial Supervisory Commission

Thailand CIMB Securities (Thailand) Co. Ltd. Securities and Exchange Commission Thailand

(i) As of July 4, 2014, CIMB has a proprietary position in the securities (which may include but not limited to shares, warrants, call warrants and/or any other derivatives) in the following

company or companies covered or recommended in this report:

(a) Felda Global Ventures, First Resources Ltd, Golden Agri-Resources, Indofood Agri Resources, IOI Corporation, Kuala Lumpur Kepong, Sime Darby Bhd, Wilmar International

(ii) As of July 7, 2014, the analyst(s) who prepared this report, has / have an interest in the securities (which may include but not limited to shares, warrants, call warrants and/or any

other derivatives) in the following company or companies covered or recommended in this report:

(a) -

The information contained in this research report is prepared from data believed to be correct and reliable at the time of issue of this report. CIMB may or may not issue regular reports on the subject matter of this report at any frequency and may cease to do so or change the periodicity of reports at any time. CIMB is under no obligation to update this report in the event of a material change to the information contained in this report. This report does not purport to contain all the information that a prospective investor may require. CIMB or any of its affiliates does not make any guarantee, representation or warranty, express or implied, as to the adequacy, accuracy, completeness, reliability or fairness of any such information and

opinion contained in this report. Neither CIMB nor any of its affiliates nor its related persons shall be liable in any manner whatsoever for any consequences (including but not limited to any direct, indirect or consequential losses, loss of profits and damages) of any reliance thereon or usage thereof.

This report is general in nature and has been prepared for information purposes only. It is intended for circulation amongst CIMB and its aff iliates’ clients generally and does not have

regard to the specific investment objectives, financial situation and the particular needs of any specific person who may receive this report. The information and opinions in this report are not and should not be construed or considered as an offer, recommendation or solicitation to buy or sell the subject securities, related investments or other financial instruments thereof.

Investors are advised to make their own independent evaluation of the information contained in this research report, consider their own individual investment objectives, financial situation and particular needs and consult their own professional and financial advisers as to the legal, business, financial, tax and other aspects before participating in any transaction

in respect of the securities of company(ies) covered in this research report. The securities of such company(ies) may not be eligible for sale in all jurisdictions or to all categories of investors.

Australia: Despite anything in this report to the contrary, this research is provided in Australia by CIMB Securities (Australia) Limited (“CSAL”) (ABN 84 002 768 701, AFS Licence

number 240 530). CSAL is a Market Participant of ASX Ltd, a Clearing Participant of ASX Clear Pty Ltd, a Settlement Participant of ASX Settlement Pty Ltd, and, a participant of Chi X Australia Pty Ltd. This research is only available in Australia to persons who are “wholesale clients” (within the meaning of the Corporations Act 2001 (Cth)) and is supplied sole ly for the use of such wholesale clients and shall not be distributed or passed on to any other person. This research has been prepared without taking into account the objectives, financial situation or needs of the individual recipient.

France: Only qualified investors within the meaning of French law shall have access to this report. This report shall not be considered as an offer to subscribe to, or used in connection


July 7, 2014




40

with, any offer for subscription or sale or marketing or direct or indirect distribution of financial instruments and it is not intended as a solicitation for the purchase of any financial instrument.

Hong Kong: This report is issued and distributed in Hong Kong by CIMB Securities Limited (“CHK”) which is licensed in Hong Kong by the Securities and Futures Commission for Type 1 (dealing in securities), Type 4 (advising on securities) and Type 6 (advising on corporate finance) activities. Any investors wishing to purchase or otherwise deal in the securities covered in this report should contact the Head of Sales at CIMB Securities Limited. The views and opinions in this research report are our own as of the date hereof and are subject to change. If the Financial Services and Markets Act of the United Kingdom or the rules of the Financial Conduct Authority apply to a recipient, our obligations owed to such recipient

therein are unaffected. CHK has no obligation to update its opinion or the information in this research report.

This publication is strictly confidential and is for private circulation only to clients of CHK. This publication is being supplied to you strictly on the basis that it will remain confidential. No part of this material may be (i) copied, photocopied, duplicated, stored or reproduced in any form by any means or (ii) redistributed or passed on, directly or indirectly, to any other person

in whole or in part, for any purpose without the prior written consent of CHK. Unless permitted to do so by the securities laws of Hong Kong, no person may issue or have in its possession for the purposes of issue, whether in Hong Kong or elsewhere, any advertisement, invitation or document relating to the securities covered in this report, which is directed at, or the contents of which are likely to be accessed or read by, the public in Hong Kong (except if permitted to do so under the securities laws of Hong Kong).

India: This report is issued and distributed in India by CIMB Securities (India) Private Limited (“CIMB India”) which is registered with SEBI as a stock-broker under the Securities and Exchange Board of India (Stock Brokers and Sub-Brokers) Regulations, 1992 and in accordance with the provisions of Regulation 4 (g) of the Securities and Exchange Board of India (Investment Advisers) Regulations, 2013, CIMB India is not required to seek registration with SEBI as an Investment Adviser.

The research analysts, strategists or economists principally responsible for the preparation of this research report are segregated from the other activities of CIMB India and they have

received compensation based upon various factors, including quality, accuracy and value of research, firm profitability or revenues, client feedback and competitive factors. Research analysts', strategists' or economists' compensation is not linked to investment banking or capital markets transactions performed or proposed to be performed by CIMB India or its affiliates.

Indonesia: This report is issued and distributed by PT CIMB Securities Indonesia (“CIMBI”). The views and opinions in this research report are our own as of the date hereof and are subject to change. If the Financial Services and Markets Act of the United Kingdom or the rules of the Financial Conduct Authority apply to a recipient, our obligations owed to such recipient therein are unaffected. CIMBI has no obligation to update its opinion or the information in this research report.

This publication is strictly confidential and is for private circulation only to clients of CIMBI. This publication is being supplied to you strictly on the basis that it will remain confidential. No part of this material may be (i) copied, photocopied, duplicated, stored or reproduced in any form by any means or (ii) redistributed or passed on, directly or indirectly, to any other person in whole or in part, for any purpose without the prior written consent of CIMBI. Neither this report nor any copy hereof may be distributed in Indonesia or to any Indonesian citizens wherever they are domiciled or to Indonesia residents except in compliance with applicable Indonesian capital market laws and regulations.

Malaysia: This report is issued and distributed by CIMB Investment Bank Berhad (“CIMB”). The views and opinions in this research report are our own as of the date hereof and are subject to change. If the Financial Services and Markets Act of the United Kingdom or the rules of the Financial Conduct Authority apply to a recipient, our obligations owed to such recipient therein are unaffected. CIMB has no obligation to update its opinion or the information in this research report.

This publication is strictly confidential and is for private circulation only to clients of CIMB. This publication is being supplied to you strictly on the basis that it will remain confidential. No part of this material may be (i) copied, photocopied, duplicated, stored or reproduced in any form by any means or (ii) redistributed or passed on, directly or indirectly, to any other person in whole or in part, for any purpose without the prior written consent of CIMB.

New Zealand: In New Zealand, this report is for distribution only to persons whose principal business is the investment of money or who, in the course of, and for the purposes of their business, habitually invest money pursuant to Section 3(2)(a)(ii) of the Securities Act 1978.

Singapore: This report is issued and distributed by CIMB Research Pte Ltd (“CIMBR”). Recipients of this report are to contact CIMBR in Singapore in respect of any matters arising from, or in connection with, this report. The views and opinions in this research report are our own as of the date hereof and are subject to change. If the Financial Services and Markets

Act of the United Kingdom or the rules of the Financial Conduct Authority apply to a recipient, our obligations owed to such recipient therein are unaffected. CIMBR has no obligation to update its opinion or the information in this research report.

This publication is strictly confidential and is for private circulation only. If the recipient of this research report is not an accredited investor, expert investor or institutional investor,

CIMBR accepts legal responsibility for the contents of the report without any disclaimer limiting or otherwise curtailing such legal responsibility. This publication is being supplied to you strictly on the basis that it will remain confidential. No part of this material may be (i) copied, photocopied, duplicated, stored or reproduced in any form by any means or (ii) redistributed or passed on, directly or indirectly, to any other person in whole or in part, for any purpose without the prior written consent of CIMBR..

As of July 3, 2014, CIMBR does not have a proprietary position in the recommended securities in this report.

South Korea: This report is issued and distributed in South Korea by CIMB Securities Limited, Korea Branch ("CIMB Korea") which is licensed as a cash equity broker, and regulated by the Financial Services Commission and Financial Supervisory Service of Korea.

The views and opinions in this research report are our own as of the date hereof and are subject to change, and this report shall not be considered as an offer to subscribe to, or used in connection with, any offer for subscription or sale or marketing or direct or indirect distribution of financial investment instruments and it is not intended as a solicitation for the purchase of any financial investment instrument.

This publication is strictly confidential and is for private circulation only, and no part of this material may be (i) copied, photocopied, duplicated, stored or reproduced in any form by any means or (ii) redistributed or passed on, directly or indirectly, to any other person in whole or in part, for any purpose without the prior written consent of CIMB Korea.

Sweden: This report contains only marketing information and has not been approved by the Swedish Financial Supervisory Authority. The distribution of this report is not an offer to sell

to any person in Sweden or a solicitation to any person in Sweden to buy any instruments described herein and may not be forwarded to the public in Sweden.

Taiwan: This research report is not an offer or marketing of foreign securities in Taiwan. The securities as referred to in this research report have not been and will not be registered with the Financial Supervisory Commission of the Republic of China pursuant to relevant securities laws and regulations and may not be offered or sold within the Republic of China through a public offering or in circumstances which constitutes an offer or a placement within the meaning of the Securities and Exchange Law of the Republic of China that requires a

registration or approval of the Financial Supervisory Commission of the Republic of China.

Thailand: This report is issued and distributed by CIMB Securities (Thailand) Company Limited (CIMBS). The views and opinions in this research report are our own as of the date hereof and are subject to change. If the Financial Services and Markets Act of the United Kingdom or the rules of the Financial Conduct Authority apply to a recipient, our obligations

owed to such recipient therein are unaffected. CIMBS has no obligation to update its opinion or the information in this research report.

This publication is strictly confidential and is for private circulation only to clients of CIMBS. This publication is being supplied to you strictly on the basis that it will remain confidential. No part of this material may be (i) copied, photocopied, duplicated, stored or reproduced in any form by any means or (ii) redistributed or passed on, directly or indirectly, to any other person

in whole or in part, for any purpose without the prior written consent of CIMBS.

Corporate Governance Report:

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 result may be changed after that date. CIMBS does not confirm nor certify the accuracy of such survey result.

Score Range: 90 – 100 80 – 89 70 – 79 Below 70 or No Survey Result Description: Excellent Very Good Good N/A


July 7, 2014




41

United Arab Emirates: The distributor of this report has not been approved or licensed by the UAE Central Bank or any other relevant licensing authorities or governmental agencies in the United Arab Emirates. This report is strictly private and confidential and has not been reviewed by, deposited or registered with UAE Central Bank or any other licensing authority

or governmental agencies in the United Arab Emirates. This report is being issued outside the United Arab Emirates to a limited number of institutional investors and must not be provided to any person other than the original recipient and may not be reproduced or used for any other purpose. Further, the information contained in this report is not intended to lead to the sale of investments under any subscription agreement or the conclusion of any other contract of whatsoever nature within the territory of the United Arab Emirates.

United Kingdom and Europe: In the United Kingdom and European Economic Area, this report is being disseminated by CIMB Securities (UK) Limited (“CIMB UK”). CIMB UK is

authorised and regulated by the Financial Conduct Authority and its registered office is at 27 Knightsbridge, London, SW1X 7YB. This report is for distribution only to, and is solely directed at, selected persons on the basis that those persons: (a) are persons that are eligible counterparties and professional clients of CIMB UK; (b) have professional experience in matters relating to investments falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (as amended, the “Order”); (c) are persons falling within Article 49 (2) (a) to (d) (“high net worth companies, unincorporated associations etc”) of the Order; (d) are outside the United Kingdom; or (e) are persons to whom an

invitation or inducement to engage in investment activity (within the meaning of section 21 of the Financial Services and Markets Act 2000) in connection with any investments to which this report relates may otherwise lawfully be communicated or caused to be communicated (all such persons together being referred to as “relevant persons”). This report is directed only at relevant persons and must not be acted on or relied on by persons who are not relevant persons. Any investment or investment activity to which this report relates is available only to relevant persons and will be engaged in only with relevant persons.

Only where this report is labelled as non-independent, it does not provide an impartial or objective assessment of the subject matter and does not constitute independent "investment research" under the applicable rules of the Financial Conduct Authority in the UK. Consequently, any such non-independent report will not have been prepared in accordance with legal requirements designed to promote the independence of investment research and will not subject to any prohibition on dealing ahead of the dissemination of investment research.

United States: This research report is distributed in the United States of America by CIMB Securities (USA) Inc, a U.S.-registered broker-dealer and a related company of CIMB Research Pte Ltd, CIMB Investment Bank Berhad, PT CIMB Securities Indonesia, CIMB Securities (Thailand) Co. Ltd, CIMB Securit ies Limited, CIMB Securities (Australia) Limited, CIMB Securities (India) Private Limited, and is distributed solely to persons who qualify as "U.S. Institutional Investors" as defined in Rule 15a-6 under the Securities and Exchange Act

of 1934. This communication is only for Institutional Investors whose ordinary business activities involve investing in shares, bonds and associated securities and/or derivative securities and who have professional experience in such investments. Any person who is not a U.S. Institutional Investor or Major Institutional Investor must not rely on this communication. The delivery of this research report to any person in the United States of America is not a recommendation to effect any transact ions in the securities discussed herein, or an endorsement of any opinion expressed herein. CIMB Securities (USA) Inc, is a FINRA/SIPC member and takes responsibility for the content of this report. For further information or to place an order

in any of the above-mentioned securities please contact a registered representative of CIMB Securities (USA) Inc.

Other jurisdictions: In any other jurisdictions, except if otherwise restricted by laws or regulations, this report is only for distribution to professional, institutional or sophisticated investors as defined in the laws and regulations of such jurisdictions.

Rating Distribution (%) Investment Banking clients (%)

Outperform/Buy/Trading Buy/Add 56.2% 4.6%

Neutral/Hold 28.0% 2.7%

Underperform/Sell/Trading Sell/Reduce 15.8% 1.0%

Distribution of stock ratings and investment banking clients for quarter ended on 31 March 2014

1416 companies under coverage for quarter ended on 31 March 2014

As at the time of publishing this report CIMB is phasing in an absolute recommendation structure for stocks (Framework #1). Please refer to all frameworks for a definition of any recommendations stated in this report.

CIMB Recommendation Framework #1 Stock Ratings Definition Add The stock’s total return is expected to exceed 10% over the next 12 months. Hold The stock’s total return is expected to be between 0% and positive 10% over the next 12 months. Reduce The stock’s total return is expected to fall below 0% or more over the next 12 months.

The total expected return of a stock is defined as the sum of the: (i) percentage difference between the target price and the current price and (ii) the forward net dividend yields of the stock. Stock price targets have an investment horizon of 12 months.

Sector Ratings Definition Overweight An Overweight rating means stocks in the sector have, on a market cap-weighted basis, a positive absolute recommendation. Neutral A Neutral rating means stocks in the sector have, on a market cap-weighted basis, a neutral absolute recommendation.

Underweight An Underweight rating means stocks in the sector have, on a market cap-weighted basis, a negative absolute recommendation. Country Ratings Definition Overweight An Overweight rating means investors should be positioned with an above-market weight in this country relative to benchmark.

Neutral A Neutral rating means investors should be positioned with a neutral weight in this country relative to benchmark. Underweight An Underweight rating means investors should be positioned with a below-market weight in this country relative to benchmark.

CIMB Stock Recommendation Framework #2 * Outperform The stock's total return is expected to exceed a relevant benchmark's total return by 5% or more over the next 12 months.

Neutral The stock's total return is expected to be within +/-5% of a relevant benchmark's total return. Underperform The stock's total return is expected to be below a relevant benchmark's total return by 5% or more over the next 12 months. Trading Buy The stock's total return is expected to exceed a relevant benchmark's total return by 3% or more over the next 3 months. Trading Sell The stock's total return is expected to be below a relevant benchmark's total return by 3% or more over the next 3 months.

* This framework only applies to stocks listed on the Singapore Stock Exchange, Bursa Malaysia, Stock Exchange of Thailand, Jakarta Stock Exchange, Australian Securities Exchange, Taiwan Stock Exchange and National Stock Exchange of India/Bombay Stock Exchange. Occasionally, it is permitted for the total expected returns to be temporarily outside the prescribed ranges due to extreme market volatility or other justifiable company or industry-specific reasons.

CIMB Research Pte Ltd (Co. Reg. No. 198701620M)


July 7, 2014




42

CIMB Stock Recommendation Framework #3 ** Outperform Expected positive total returns of 10% or more over the next 12 months. Neutral Expected total returns of between -10% and +10% over the next 12 months.

Underperform Expected negative total returns of 10% or more over the next 12 months. Trading Buy Expected positive total returns of 10% or more over the next 3 months. Trading Sell Expected negative total returns of 10% or more over the next 3 months.

** This framework only applies to stocks listed on the Korea Exchange, Hong Kong Stock Exchange and China listings on the Singapore Stock Exchange. Occasionally, it is permitted for the total expected returns to be temporarily outside the prescribed ranges due to extreme market volatility or other justifiable company or industry-specific reasons.

Corporate Governance Report of Thai Listed Companies (CGR). CG Rating by the Thai Institute of Directors Association (IOD) in 2013.

AAV – Good, ADVANC - Excellent, AMATA - Very Good, ANAN – Good, AOT - Excellent, AP - Very Good, BANPU - Excellent , BAY - Excellent , BBL - Excellent, BCH – Good,

BCP - Excellent, BEC - Very Good, BGH - not available, BJC – Very Good, BH - Very Good, BIGC - Very Good, BTS - Excellent, CCET – Very Good, CENTEL – Very Good, CK - Excellent, CPALL - Very Good, CPF – Excellent, CPN - Excellent, DELTA - Very Good, DTAC - Excellent, EGCO – Excellent, GLOBAL - Good, GLOW - Very Good, GRAMMY – Excellent, HANA - Excellent, HEMRAJ - Excellent, HMPRO - Very Good, INTUCH – Excellent, ITD – Very Good, IVL - Excellent, JAS – Very Good, KAMART – not available, KBANK - Excellent, KKP – Excellent, KTB - Excellent, LH - Very Good, LPN - Excellent, MAJOR – Very Good, MAKRO – Very Good, MCOT - Excellent, MEGA – not available, MINT - Excellent, PS - Excellent, PSL - Excellent, PTT - Excellent, PTTGC - Excellent, PTTEP - Excellent, QH - Excellent, RATCH - Excellent, ROBINS - Excellent, RS – Excellent,

SAMART – Excellent, SC – Excellent, SCB - Excellent, SCC - Excellent, SCCC - Very Good, SIRI – Very Good, SPALI - Excellent, STA - Good, STEC - Very Good, TCAP - Excellent, THAI - Excellent, THCOM – Excellent, TICON – Very Good, TISCO - Excellent, TMB - Excellent, TOP - Excellent, TRUE - Excellent, TTW – Excellent, TUF - Very Good, VGI – Excellent, WORK – Good.


July 7, 2014




43

Asia

Malaysia Level 17, Menara CIMB Jalan Stesen Sentral 2

Kuala Lumpur Sentral 50470 Kuala Lumpur. T: +60 (3) 2261 8888 F: +60 (3) 2261 8899

Singapore 50 Raffles Place #19-00

Singapore Land Tower (S048623) T: +65 6225-1228 F: +65 6224-6906

Indonesia The Indonesia Stock Exchange Building Tower II, 20th Floor

Jl. Jend. Sudirman, Kav. 52-53 Jakarta 12190 T: +62 (21) 515-1330 F: +62 (21) 515-1335

Thailand 132 Sindhorn Tower 3, 12th Floor

Wireless Road, Lumpini, Pathumwan Bangkok 10330 T: +66 (2) 841-9000 F: +66 (2) 657-9240

Hong Kong Units 7706-08, Level 77

International Commerce Centre 1 Austin Road West Kowloon T: +852 2868-0380 F: +852 2537-1928

China Unit 802 AZIA Center

1233 Lujiazui Ring Road Pudong New District Shanghai 200120 T: +86 (21) 6194-0212 / +86 (21) 6194-0218

Sri Lanka Sri Lanka Philippines Level 33, West Tower World Trade Center

Echelon Square Colombo 01

John Keells Stock Brokers (Pvt) Ltd (a strategic partner with CIMB Securities)

130 Glennie Street Colombo 00200 T: +94 (0) 11 230 6271 F: +94 (0) 11 234 2068

SB Equities, Inc. (a strategic partner with CIMB Securities)

18F Security Bank Centre 6776 Ayala Ave. Makati 0719 T: +63 (2) 891-1243 / +63 (2) 891-1258

F: +63 (2) 813-3349

Taiwan South Korea India

CIMB Securities Limited, Taiwan Branch 76F, No. 7, Xin-Yi Road Sec. 5 Taipei City T: +886 (2) 8729-8388

F: +886 (2) 8729-8391

CIMB Securities Limited, Korea Branch 15F, S-Tower, 116 Shinmun-ro 1-ga Jongro-gu, Seoul 110-700 T: +82 (2) 6730-6000

F: +82 (2) 6730-6183

CIMB Securities (India) Pvt. Ltd. Equinox Business Park, Tower III LBS Marq, Off BKC, Kurla (W) Mumbai 400070

T: +91 (22) 4263-0203

Vietnam CIMB Securities International Ltd.

90 Pasteur Street District 1, HCMC Vietnam T: +84 839146925

F: +84 839 146924

Europe Americas

United Kingdom

(2719607) 27 Knightsbridge London, SW1X 7YB T: +44 (20) 7201-2199

F: +44 (20) 7201-2191

USA

(52-1971703) 540 Madison Avenue 11th Floor, New York, N.Y. 10022 T: +1 (212) 616 8600

F: +1 (212) 616 8639

Australia

Sydney

Level 29, Aurora Place 88 Phillip Street Sydney, NSW 2000 +61 2 9694 5000

Melbourne

Level 32, 101 Collins St Melbourne, VIC 3000 +61 3 9631 1000


July 7, 2014




44

Documents

A Tanah Makmur Berhad - I3investorJul 07, 2014 · tanah makmur berhad prosperous land. plantations│malaysia july 7, 2014 this research report is not directed to, or intended for