April 23, 2014

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SEE PAGE 19 FOR IMPORTANT DISCLOSURES AND ANALYST CERTIFICATIONS

Hongkong Land (HKL SP)

Recentralization theme; initiate BUY Initiate at BUY, TP USD8.16. We're bullish as we expect: i)

‘recentralization’ theme in next 2 years; ii) Grade A office rents in Central to rise 5-6% in 12M; and iii) lack of supply in Central with upside risks on demand and pick-up in leasing enquiries.

In addition, valuations look attractive at 37% discount to NAV of USD10.88/sh and 0.59x 2014 P/B (vs long-term avg of 0.73x forward P/B). Our TP is pegged to 25% discount to NAV, similar to long-term average of 23.5% discount.

Potential catalysts include faster-than-expected take up in Central, especially at Two Exchange Square and Citibank Plaza, which could enhance landlords' rent negotiations.

Proxy to recentralization theme for HK office space The stock fell 15.6% YoY in 2013, partly due to weak Central rents and concerns about negative rental reversions this year. This is due to higher base of rents that will expire or be subject to rental revisions this year at HKD108/sq ft/month for its offices. In 1Q14, rents signed for its office portfolio are not yet in negative territory and we believe the gap between Central and decentralized office sub-markets has narrowed to the point where several years of decentralization is coming to an end.

Lack of supply is certain, so the variable is demand strength. If the cross-border Shanghai-HK stock market pilot programme is successful, there is potential upside for office demand from domestic Chinese financial institutions. Following leasing floor space to UOB, competitor CREIT’s Citibank Plaza (~14% vacancy) also leased space to Kontiki Capital, Donglin, EFMI and Hammer Capital, highlighting the renewed interest in Central. Recently, China Merchants Securities and China Securities Co. (part of CITIC) were reported to take up ~13k sq ft each at the counter’s Two Exchange Square at HKD120-130/sq ft (which looks like face rents to us), which could help bring down HKL’s Two Exchange Square vacancy to an estimated ~5%.

Initiate BUY. Our investment thesis is HK Land is the best proxy to ride the potential recovery in Central Grade A office market, the developer has limited cap rate expansion risks, and it’s increasing its local expertise in China and in several of the ASEAN countries.

Key Data

Share Price Performance

Maybank vs Market

Share Price: USD6.83 MCap (USD): 16.1B Hong Kong

Target Price: USD8.16(+19%) ADTV (USD): 8M Real Estate (New)BUY52w high/low (USD)

3m avg turnover (USDm)

Free float (%)

Issued shares (m)

Market capitalization

Major shareholders:

-Jardine Strategic 50%

-Schroders 2%

-Norges Bank 1%

7.47/5.66

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HK Land - (LHS, USD) HK Land / Hang Seng Index - (RHS, %)

1 Mth 3 Mth 12 Mth

Absolute(%) 11.4 6.7 (7.7)

Relative to index (%) 5.1 8.4 (10.5)

Positive Neutral Negative

Market Recs 10 4 2

Maybank Consensus % +/-

Target Price (USD) 8.16 7.42 10.0

'14 PATMI(USDm) 897 873 2.8

'15 PATMI(USDm) 917 866 5.8

Source: FactSet; Maybank

FYE Dec (USD m) FY12A FY13A FY14E FY15E FY16ERevenue 1,114.8 1,857.1 1,866.5 1,875.2 2,029.8EBITDA 800.3 916.6 941.9 976.5 1,119.9Core net profit 777.0 934.8 897.0 917.0 1,032.9Core EPS (cts) 33.1 39.7 38.1 39.0 43.9Core EPS growth (%) na 19.9 (4.0) 2.2 12.6Net DPS (cts) 17.0 18.0 18.0 19.0 19.0Core P/E (x) 20.6 17.2 17.9 17.5 15.6P/BV (x) 0.6 0.6 0.6 0.6 0.6Net dividend yield (%) 2.5 2.6 2.6 2.8 2.8ROAE (%) na 3.5 3.3 3.3 3.7ROAA (%) na 2.9 2.7 2.7 3.0EV/EBITDA (x) 24.6 18.5 20.7 20.4 18.0Net debt/equity (%) 12.5 11.3 12.4 13.8 14.3

Karen Kwan(852) 2268-0640karenkwan@kimeng.com.hk

Elliott King, CPA(852) 2268-0635elliottking@kimeng.com.hk

Note: Pricing date as of 22 April 2014

April 23, 2014 2

Hongkong Land

Key charts to note

Figure 1: HK Land’s historic discount to NAV: long-term average of 23.5%

Figure 2: Historic forward P/B of HK Land – still below long-term average

Source: Company data, Maybank Kim Eng Source: Bloomberg, Maybank Kim Eng

Figure 3: HK’s Grade A office monthly net effective rent differential in Wanchai and Causeway Bay vs Central

Figure 4: HK’s Grade A office monthly net effective rent differential in Island East vs Central

Note: the series of Central & Admiralty rents was only available from 2010, before which we averaged rents of the Central and Admiralty series. Same for Wanchai and Causeway Bay which were combined only from 2010 onwards, and we use the average of the two separate series for data before that. Source: Colliers, CEIC, Maybank Kim Eng

Note: the series of Central & Admiralty rents was only available from 2010, before which we averaged rents of the Central and Admiralty series. Same for Island East which was available from 2010 onwards, and we use the average of the two separate series for North Point and Quarry Bay data before that. Source: Colliers, CEIC, Maybank Kim Eng

Figure 5: HK’s Grade A office monthly net effective rent differential in Kowloon East vs Central

Figure 6: Grade A office monthly net effective rent for Central & Admiralty

Note: the series of Central & Admiralty rents was only available from 2010, before which we averaged rents of the Central and Admiralty series. Same for Kowloon East which was available from 2010 onwards, and we use the average of the two separate series for Kowloon Bay and Kwun Tong data before that. Source: Colliers, CEIC, Maybank Kim Eng

Note: the series of Central & Admiralty rents was only available from 2010, before which we averaged rents of the Central and Admiralty series. Source: Colliers, CEIC, Maybank Kim Eng

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April 23, 2014 3

Hongkong Land

Decentralization slowing, repatriation expected Initiate BUY and TP of USD8.16, implying 19% upside. We are bullish as: i) we forecast Grade A Central office rents to rise by 5-6% over the next 12 months; ii) the decentralization trend of the past few years is slowing and we expect recentralization to be a theme for the next two years as the gap between decentralized and Central Grade A office rents have narrowed considerably; and iii) increase in leasing enquiries, echoed by other landlords such as CREIT, albeit mostly from potential clients looking for small- to medium-size office space. Recentralization means increased tenant relocation from non-core submarkets to Central.

Given our estimated GAV exposure to HK office at 47% and HK retail at 16%, HK Land’s share price performance is highly sensitive to the performance of Central Grade A office rents, occupancy levels and capital values. With a strong brand name, market leadership, as well as the prime location of its Grade A office assets in Central, we believe the counter is a good proxy to the recentralization theme in Grade A offices.

In this report, we also discuss the Singapore property market, which constitutes 15% of HK Land’s estimated GAV. Our Singapore office REIT analyst Ong Kian Lin forecasts a mild growth in 2014 and 2015 rentals and a slight slide in 2016 due to supply of Singapore office space coming on stream in 2016.

Fundamentals of the HK Central office market look positive

Net take-up becoming more encouraging in Central. Following negative take-up of Grade A office space in January, the Central submarket has seen two consecutive months of net positive take-up. In March, all major Grade A office space submarkets saw a positive net take-up, with the exception of Wanchai/Causeway Bay, per Jones Lang LaSalle’s Hong Kong Property Market Monitor. According to the report, the overall vacancy rate in Central Grade A offices was flat at 4.4% and there were improvements in new lettings, which resulted in a net take-up of ~21.1k sq ft. One of the take-ups last month included the privately-held financial institution Brown Brothers Harriman leasing over 11k sq ft in Man Yee Building. Central’s office vacancy ratio remained relatively stable in March and February.

Lack of supply in Central. Given Central’s lack of new supply of Grade A office space, we believe landlords will hold the upper hand when it comes to rent negotiations after the vacancies in HK Land’s Two Exchange Square (estimated at ~5%) and CREIT’s Citibank Plaza (estimated at 13-14%). Macquarie, which currently occupies ~80,000-sq ft of Grade A office space at One IFC, was rumoured to be shopping around for space in other buildings within Central but reported by some newspapers as likely to stay. Last year, JP Morgan took up an additional 9,000 sq ft in Chater House.

The 20-year historic average supply of Grade A office space in Central is around 430k sq ft, and new supply will remain very low over the next few years. HK Land’s Forum redevelopment, with a net floor area of 40.7k sq ft, was completed and fully pre-leased to Standard Chartered Bank. The Shanghai Commercial Bank redevelopment located at 10-12 Queen’s Road Central (0.09m sq ft), which is planned for completion around 2015, will be owner-occupied. Hence, the supply situation is quite tight. Overall, Central’s Grade A office space vacancy rate was healthy at 4.4% in March, flat MoM after dropping from January’s 4.6%, per JLL data.

April 23, 2014 4

Hongkong Land

Figure 7: Net effective monthly rents (HKD/sq ft) in Central and Wanchai

Note: Yellow dots indicate Feb-14 average rents while the bar indicates historic range Source: CBRE, SCMP, HKET, Singtao, Maybank Kim Eng

Figure 8: Lack of Central Grade A office supply in Hong Kong

Source: JLL, HK R&V Dept, Champion REIT, Maybank Kim Eng

Figure 9: Overall Grade A office vacancy rates (end of month)

(%) Overall Central Wanchai/

Causeway Bay Hong Kong

East Tsim Sha

Tsui Kowloon

East March 4.4 4.4 3.0 1.6 2.3 6.7 Feb 4.1 4.4 3.0 1.8 2.4 7.1 Jan 4.3 4.6 2.9 1.9 2.7 7.3 Source: Jones Lang LaSalle “Hong Kong Property Market Monitor”, Maybank Kim Eng

Figure 10: HK Land’s expiration and interim rent revisions profile for HK office 2014 2015 2016 Total lettable office space subject to expiration/rent revisions (in ‘000 sq ft)

1,155 1,308 885

Portion of area subject to expiration/rent revisions 28% 32% 21% Avg expiring monthly net rent (HKD/sq ft) 108 99 105 Source: Company data, Maybank Kim Eng

Figure 11: HK Land’s Hong Kong office portfolio’s average rents and occupancy 2011 2012 2013 Avg monthly net rent (HKD/sq ft) 87 90 99 Year-end office vacancy 2.0% 3.4% 5.0% Weighted average lease expiry (in years) 4.1 3.7 3.6 Source: Company data, Maybank Kim Eng

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April 23, 2014 5

Hongkong Land

Figure 12: HK Land’s Forum in Central – 100% pre-leased

Source: Company data, Maybank Kim Eng

HK Land has ~47% GAV exposure to the Hong Kong office market, where we expect to see more upside risk in rents and is more defensive than the local residential market. Employment levels remain strong, with unemployment at 3.1% for Mar 2014, flat MoM. We also believe the increase in Central rents should help to partially offset some of the impact from the potential cap rate expansion. The cap rate used to value HK Land’s offices as of Dec 2013 remained unchanged YoY at 4.0%, down 50bps from 4.5% as of end-2011. In comparison to some of the cap rates adopted by valuers on its peers, the rate used looks relatively conservative. A cap rate of 3.30% (compressed by 70bps from 4% as of end-2011) was applied to Citibank Plaza, owned by Champion REIT. Meanwhile, valuers adopted a cap rate of 3.7-3.8% on Prosperity REIT’s Grade A office assets as of end-2013. We believe should there be an expansion of cap rates (we estimate only mild expansion of ~10-40bp over the next two years), the rate used on HK Land’s office assets in Hong Kong should be less volatile.

Figure 13: Hongkong Land's commercial portfolio Figure 14: Hongkong Land's commercial assets in HK

'000 sq. ft net floor area

Office Retail Hotel Total

Hong Kong 4,152 585 143 4,880

Macau - 93 151 244

Singapore 1,652 134 - 1,786

Jakarta 661 68 - 729

Hanoi 105 11 - 116

Bangkok 27 61 - 88

Others 71 - 312 383

TOTAL 6,668 952 606 8,226

All located in Central, Hong Kong One Exchange Square Two Exchange Square Three Exchange Square The Forum Jardine House Chater House Alexandra House Gloucester Tower Edinburgh Tower Landmark Mandarin Oriental York House Landmark Atrium Prince’s Building

Source: Company Presentation as of March 2014 Source: Company data

April 23, 2014 6

Hongkong Land

Figure 15: Historic office cap rate adopted for HK land’s Exchange Square 1 & 2 office portfolios

Source: Company data, Maybank Kim Eng

Rental gap between Central and decentralized office submarkets has narrowed substantially. The de-centralization trend of the past few years should be coming to an end or it should considerably slow down, in our view. Using CEIC figures citing Colliers data, we found that the gap between Grade A office rents in the Central & Admiralty areas vs the various submarkets has significantly narrowed. For instance, the gap vs. the Wanchai and Causeway Bay submarket has narrowed from the most recent peak of HKD55.4/sq ft of monthly net rents in May, 2011 to only ~HKD33.6/sq ft. We believe that the Central submarket still deserves a meaningful premium to the Wan Chai and Causeway Bay submarkets. Colliers’ figures also showed that compared to Island East rents, the gap has narrowed from peaks of over HKD74/sq ft per month in mid-2008 and mid-2011 to the latest figure of under HKD50/sq ft; for the difference with Kowloon East, the difference has dropped to HKD57.7/sq ft from a peak of HKD84.7/sq ft. Furthermore, the latest monthly rental gap is below the historical average of the past eight years.

Figure 16: Hong Kong’s Grade A office monthly net effective rent differential vs Central

Note: the series of Central & Admiralty rents was only available from 2010, before which we averaged rents of the Central and Admiralty series. Same for Wanchai and Causeway Bay which were combined only from 2010 onwards, and we use the average of the two separate series for data before that. Source: Colliers, CEIC, Maybank Kim Eng

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April 23, 2014 7

Hongkong Land

Figure 17: Hong Kong’s Grade A office monthly net effective rent differential vs Central

Note: the series of Central & Admiralty rents was only available from 2010, before which we averaged rents of the Central and Admiralty series. Same for Island East which was available from 2010 onwards, and we use the average of the two separate series for North Point and Quarry Bay data before that. Source: Colliers, CEIC, Maybank Kim Eng

Figure 18: Hong Kong’s Grade A office monthly net effective rent differential vs Central

Note: the series of Central & Admiralty rents was only available from 2010, before which we averaged rents of the Central and Admiralty series. Same for Kowloon East which was available from 2010 onwards, and we use the average of the two separate series for Kowloon Bay and Kwun Tong data before that. Source: Colliers, CEIC, Maybank Kim Eng

According to KPMG’s “Hong Kong IPO Market Update” from April, Hong Kong saw 20 IPOs in 1Q14, raising a total of HKD46b from companies such as HK Electric (HKD24.1b) and Harbin Bank (HKD8.8b). Though the number of IPOs was down QoQ, the volume was double YoY. KPMG forecasts the IPO proceeds to be raised in 2014 to be over HKD200b, higher than last year’s HKD169b. We expect a healthy IPO market for Hong Kong in 2014, which could facilitate some office space take-up.

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April 23, 2014 8

Hongkong Land

Figure 19: Historical IPOs in Hong Kong

Source: Hong Kong Stock Exchange, Reuters, Maybank Kim Eng

Figure 20: Hudson survey of net expected hiring in Hong Kong (% surveyed expecting an increase in permanent headcount minus % expecting a decline)

Source: Hudson Report, Maybank Kim Eng

Overall Hong Kong hiring expectations have improved in 1Q14, according to the Hudson Survey, though the majority of the companies surveyed (57.5%) still expected steady permanent headcount. In the 1Q14 Hudson report survey, 53.6% of those surveyed in the banking and financial services industry expected an increase in headcount, up from the previous quarter’s 44.9%. Other sectors such as the consumer, also posted a QoQ rise in permanent hiring expectations from 37.9% to 38.3% in 1Q14. Overall hiring expectations rose to 38.3%, up vs 4Q’s 35.1%. However, we do not expect a pick-up in intentions from the financial sector in the two quarters ahead, as various large banks have posted lacklustre earnings and Bloomberg reported that some large banks such as Barclays and Citi are looking to trim headcounts. Although most news articles we have seen did not disclose whether or not the Hong Kong offices of these banks would be affected, we expect small lay-offs at these houses, but nothing substantial to influence office space needs.

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April 23, 2014 9

Hongkong Land

On a positive note, we notice that various Mainland brokerages such as Guangfa Securities and Guosen Securities have been selectively adding personnel according to our channel checks. On 10 Apr, the HK Securities and Futures Commission and the China Securities Regulatory Commission jointly announced that they have approved a pilot program of “Shanghai-Hong Kong Stock Connect” which could potentially enhance the competitiveness of both markets. Additionally, it could also persuade some China brokerages to expand and open offices in Hong Kong. We found anecdotal evidence of this with Guangfa Securities recently hiring sales to be based out of Hong Kong for its equities business and potentially enhance its research capabilities in Hong Kong, given its strong A-share franchise and potentially more cooperation between the Mainland and Hong Kong stock exchanges. Should this Shanghai-Hong Kong Stock Connect program be successful, there is potential upside for office demand from Mainland financial players.

HKET recently reported that China Merchants Securities and China Securities Co. (part of CITIC) were reported to take up ~13k sq ft each (the former at level 45 entire floor at a reported HKD130/sq ft while the latter at level 18 entire floor at a reported HKD120/sq ft) at HK Land’s Two Exchange Square. We see this as good news though these rents look like face rent to us as net effective rents around March were still estimated at HKD100-110/sq ft.

Figure 21: Selected leasing transactions in Hong Kong in 2014 Recent Chinese Securities Firms Leasing Transactions

Property Floor Area

(sq ft) Rent

(HKD/sq ft) Tenant

Two Exchange Square Entire 45th floor 13,107 130#

China Merchants Securities 招商银行证券

Two Exchange Square Entire 18th floor 13,107 120#

China Securities Co. (part of CITIC)

中信建投证券

China Construction Bank Tower Entire 22nd floor 7,400 100

Guoyuan Securities Company 国元证券

Two IFC Higher floor 22,000 90

Guosen Securities 国信证券

Q1 2014 Chinese Corporations leasing transactions

Property GFA

(sq ft) Rent

(HKD/sq ft) Tenant

AIA Central Entire 12th floor 12,000 130

China Cinda 中国信达

Bank of America Tower Entire 24th floor 14,000 65

Shanghai Pudong Development Bank 上海浦东发展银行

The Center Approx. half of 77th floor 14,500 60

a China Energy company 中资能源公司

#Note: We believe these HKET reported rents for Two Exchange Square are face rents, not net effective rents. We estimate recent net effective rents for Exchange Square to be HKD100-110/sq ft Source: HKET, Yahoo, Singtao, Maybank Kim Eng

Outside of Hong Kong, HK Land also has operations in Singapore, China, Macau, and various ASEAN counties including Cambodia, Philippines, and Indonesia. However, Hong Kong still constitutes 63% of its gross assets on its balance sheet as of end-2013. We also touch on the Singapore office market below, where HK Land owns part of One Raffles Quay, Marina Bay Financial Center, as well as 100% of One Raffles Link.

April 23, 2014 10

Hongkong Land

Figure 22: HK Land’s gross assets on balance sheet as of Dec 2013 by category

Figure 23: Our estimated GAV breakdown of HK Land by location

Source: Company data Source: Company data, Maybank Kim Eng

Figure 24: HK Land’s operational geographical footprints

Source: Company data, Maybank Kim Eng

Commercial 89%

Residential 11%

Hong Kong office, 47%

Hong Kong retail, 16%

Singapore, 15%

China, 15%

Macau, 1%

ASEAN and others, 6%

April 23, 2014 11

Hongkong Land

Markets outside of Hong Kong

Though the majority of Hongkong Land’s GAV is Hong Kong property, we briefly discuss Singapore and China markets, which account for 15% and 15% of our estimated GAV. The rest is smaller ASEAN exposure as well as holdings of Longfor Properties.

Singapore Grade A office rental outlook

Mild growth expected in Singapore Grade A office rents in 2014 -- Our Singapore REIT analyst Ong Kian Lin (Neutral rating on Singapore office REITs) looks for rental growth of 3% in 2014 and 5% in 2015 in the Singapore Grade A office market and a cap rate of around 4%. In 2016, he forecasts a mild slide of ~2% due to ample supply. He is comfortable with the occupancy rates of the Singapore Grade A office market over 2014 and 2015 but expects vacancy rates to creep up in 2016 due to future abundant supply. Over 3Q13 and 4Q13, both the Central Area and Central Region of Singapore recorded a ~1% YoY increase in rents, according to the Urban Redevelopment Authority’s Office Property Rental Index, translating to an uptick after four consecutive quarters of YoY decline since 3Q12. We factored in slight increases in HK Land’s Singapore office rents over 2014 spot rents and flattish rents in 2015 and 2016. HK Land management also looks for “broadly stable” Hong Kong and Singapore office markets “amidst continued supply constraints.

Figure 25: Singapore: Downtown core annual net supply and absorption vs occupancy rate

Figure 26: Singapore: 84% correlation between Median Cat 1 signed rents and downtown core occupancy

Source: Singapore URA, CBRE, Maybank Kim Eng Source: Singapore URA

Figure 27: Singapore office property price index Figure 28: Singapore office property rental index

Source: Singapore URA Source: Singapore URA

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April 23, 2014 12

Hongkong Land

Figure 29: HK Land’s expiration and interim rent revisions profile for Singapore office 2014 2015 2016 HK Land’s share of lettable office space subject to expiration/rent revisions (in ‘000 sq ft)

197 394 320

Portion of area subject to expiration/rent revisions

12% 24% 19%

Avg expiring monthly net rent (SGD/sq ft) 7.0 9.5 11.0 Source: Company data, Maybank Kim Eng

Figure 30: HK Land’s Singapore office portfolio’s average rents and occupancy 2012 2013 Avg monthly gross rent (SGD/sq ft) 8.7 9.1 Year-end office vacancy 5.6% 1.7% Weighted average lease expiry (in years) 6.6 5.9 Source: Company data, Maybank Kim Eng

China property capability rising

China property constitutes 15% of our estimated GAV of Hongkong Land and we have seen increased capability of its execution there. In 2013, Hongkong Land’s attributable contract sales in China aggregated to USD632m, up 47% YoY vs 2012’s USD429m. Originally, Hongkong Land forayed into China residential market with partners such as Longfor in its Chongqing Bamboo Grove project which turned out to be quite successful. Other China developers such as KWG and China Merchants Property also have project partnerships with the counter. Hongkong Land currently has some 100% stake projects such as its Yorkville South residential and Yorkville North mixed-used projects in Chongqing. We have visited several of Hongkong Land’s projects before and feel quite comfortable with them, with the exception of the Shenyang project which we find mediocre.

Figure 31: Chengdu Skyville Project (HK Land and KWG’s JV project in China)

Source: Company data, Maybank Kim Eng

Financial health of HK Land – HK Land’s net gearing was very healthy at 11% as of end-2013 and we expect its net gearing to remain below 15% over the next few years. The average cost of borrowing was also low at 2.7% last year. We highlight the weighted average interest rates for its various currencies’ borrowings in the table that follows.

April 23, 2014 13

Hongkong Land

Figure 32: HK Land’s borrowings profile

By currency

Weighted average interest rates %

Weighted average period

outstanding years USD m

Floating rate borrowings

USD m Total

USD m 2013 Hong Kong dollar 3.0 11.1 1,828.7 1,371.7 3,200.4 Singapore dollar 2.2 3.4 508.5 722.3 1,230.8 United States dollar 5.3 - - 0.3 0.3 2,337.2 2,094.3 4,431.5 2012 Hong Kong dollar 3.0 11.3 1,655.1 1,309.9 2,964.8 Singapore dollar 2.4 4.0 603.3 687.1 1,290.4 United States dollar 5.3 - - 0.3 0.3 2,258.40 1,997.10 4,255.50 Source: Company data, Maybank Kim Eng

Valuation

HK Land’s stock valuations look constructive to us at 37% discount to our NAV of USD10.88/sh and 0.59x 2014 P/B (vs long-term historic avg of 0.73x forward P/B). We pegged our TP of USD8.16 to 25% discount to NAV, similar to the long-term average of 23.5% discount. We believe HK Land deserves to trade at par to the long-term historic average discount and forward P/BV as Central Grade A office rents are coming out of a trough and have shown a slight recovery, and we believe rents are on a mild uptrend (forecast +5-6% over the next 12 months).

On a PE basis, HK Land trades at 17.9x our 2014F underlying EPS of USD0.381. The PE multiple is lower than Swire Properties’ 2014 PER, but roughly in line with Hysan’s and Hang Lung Prop’s. Having said that, we believe HK Land’s share price is more sensitive to Hong Kong office spot rents and cap rates rather than PE multiples.

Figure 33: HK Land’s historic discount to NAV: long-term average of 23.5%

Source: Company data, Maybank Kim Eng

-70%

-60%

-50%

-40%

-30%

-20%

-10%

0%

10%

20%

Jan-

94

Jan-

95

Jan-

96

Jan-

97

Jan-

98

Jan-

99

Jan-

00

Jan-

01

Jan-

02

Jan-

03

Jan-

04

Jan-

05

Jan-

06

Jan-

07

Jan-

08

Jan-

09

Jan-

10

Jan-

11

Jan-

12

Jan-

13

Jan-

14

Avg: 23.5%

April 23, 2014 14

Hongkong Land

Figure 34: Historic forward P/B of HK Land – still below long-term average

Source: Bloomberg, Maybank Kim Eng

Figure 35: Historic forward P/E of HK Land

Source: Bloomberg, Maybank Kim Eng

Figure 36: HK landlords valuations

Share Price Mkt

2014 Est / Dis to PE P/B Div Yield

4/22/2014 Year End Rating

(in Local Curr)#

Cap (USDb)

3M ATV (USDm)

Ytd Perf.*

NAV share

NAV Est 2014E 2015E 2016E 2014E 2015E 2016E 2014E 2015E 2016E

HK-Listed (simple avg) -29% 17.0 16.0 15.2 0.58 0.58 0.56 3.5% 3.5% 3.7% Swire Prop Dec-13 NR 23.60 17.8 7 20.4% 34.5 -32% 21.8 20.2 19.3 0.68 0.67 0.65 2.5% 2.5% 2.7% Hang Lung Prop Dec-13 NR 23.85 13.5 15 -2.7% 32.4 -26% 18.6 16.6 16.1 0.84 0.82 0.78 3.2% 3.2% 3.3% Hysan Dec-13 NR 34.90 4.7 5 4.5% 57.6 -39% 17.1 16.3 15.3 0.59 0.57 0.55 3.5% 3.7% 3.9% Great Eagle Dec-13 NR 28.90 2.4 2 8.9% 60.8 -52% 11.4 10.6 9.6 0.36 0.35 0.34 2.3% 2.3% 2.5% Champion REIT Dec-13 HOLD 3.59 2.7 2 4.7% 3.5 4% 16.0 16.2 15.8 0.46 0.47 0.48 5.8% 5.6% 5.9% SG-listed

HK Land Dec-13 BUY 6.83 16.0 8 15.8% 10.9 -37% 17.9 17.5 15.6 0.59 0.58 0.57 2.6% 2.8% 2.8% #Share price in HKD for HK-listed stocks and in USD for SG-listed HK Land *Not adjusting for dividends Consensus numbers are used for non-covered companies Source: Company data, Bloomberg, T1, Maybank Kim Eng

0.0

10.0

20.0

30.0

40.0

50.0

Apr-

99

Apr-

00

Apr-

01

Apr-

02

Apr-

03

Apr-

04

Apr-

05

Apr-

06

Apr-

07

Apr-

08

Apr-

09

Apr-

10

Apr-

11

Apr-

12

Apr-

13

Apr-

14

April: 18x forward PE

Avg

-1 SD

+1 SD

13.9

27.1

20.5

April 23, 2014 15

Hongkong Land

Downside Risks

Downside risks to our bullish call include faster and/or more than expected QE tapering, softer Grade A office demand in Central, unfavorable economy in HK and Singapore, and serious shocks in ASEAN.

Figure 37: HK Land’s income statement: 2010-2016E Year ending in Dec (in USD m) 2010 2011 2012 2013 2014E 2015E 2016E Rental Income 681.8 700.3 745.5 811.3 812.7 840.1 946.7 Service and Management Charges 102.2 110.9 117.2 119.7 123.3 128.2 133.4 Income from Property Trading 556.6 412.5 252.1 926.1 930.5 906.9 949.8 Revenue 1,340.6 1,223.7 1,114.8 1,857.1 1,866.5 1,875.2 2,029.8 Contribution to Profit Rental Income 649.0 673.1 719.9 775.9 768.0 796.2 897.2 Property Trading 287.1 209.1 140.2 201.1 252.4 260.9 314.1 Corporate, net financing charges and tax Admin and other operating expenses (54.7) (50.5) (59.8) (60.4) (78.4) (80.6) (91.3) Operating Profit 881.4 831.7 800.3 916.6 941.9 976.5 1,119.9 Associates & JCEs 173.9 76.3 165.8 235.2 217.7 223.9 221.0 Other Income 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Net interest expense (77.1) (66.5) (60.9) (64.0) (68.0) (76.6) (79.6) Profit Before Tax 978.2 841.5 905.2 1,087.8 1,091.6 1,123.8 1,261.3 Taxes (122.8) (133.6) (124.4) (149.0) (190.5) (202.6) (223.7) Minorities (45.2) (4.5) (3.8) (4.0) (4.1) (4.2) (4.6) Estimated underlying net profit 810.2 703.4 777.0 934.8 897.0 917.0 1,032.9 Exceptionals 3,929.2 4,603.5 661.5 254.8 0.0 0.0 0.0 Net Revaluation Adjustment 0.0 0.0 0.0 0.0 0.0 Net Profit 4,739.4 5,306.9 1,438.5 1,189.6 897.0 917.0 1,032.9 Core EPS (US cents) 36.02 30.29 33.14 39.73 38.12 38.98 43.90 EPS (US cents) 210.70 228.50 61.36 50.56 38.12 38.98 43.90 DPS (US cents) 16.00 16.00 17.00 18.00 18.00 19.00 19.00 Source: Company data, Maybank Kim Eng Estimates

April 23, 2014 16

Hongkong Land

*Note that the item contribution to profit is before administrative and other operating expenses. Already deducted sales and marketing expenses.

FYE 31 Dec FY12A FY13A FY14E FY15E FY16EKey MetricsP/E (reported) (x) 11.1 13.5 17.9 17.5 15.6Core P/E (x) 20.6 17.2 17.9 17.5 15.6P/BV (x) 0.6 0.6 0.6 0.6 0.6P/NTA (x) 0.6 0.6 0.6 0.6 0.6Net dividend yield (%) 2.5 2.6 2.6 2.8 2.8FCF yield (%) nm 4.6 3.1 3.0 3.6EV/EBITDA (x) 24.6 18.5 20.7 20.4 18.0EV/EBIT (x) 24.6 18.5 20.7 20.4 18.0

INCOME STATEMENT (USD m)Revenue 1,114.8 1,857.1 1,866.5 1,875.2 2,029.8Contribution to Profit 860.1 977.0 1,020.3 1,057.1 1,211.EBITDA 800.3 916.6 941.9 976.5 1,119.Depreciation 0.0 0.0 0.0 0.0 0.0Amortisation 0.0 0.0 0.0 0.0 0.0EBIT 800.3 916.6 941.9 976.5 1,119.Net interest income /(exp) (60.9) (64.0) (68.0) (76.6) (79.6)Associates & JV 165.8 235.2 217.7 223.9 221.0Exceptionals 661.5 254.8 0.0 0.0 0.0Other pretax income 0.0 0.0 0.0 0.0 0.0Pretax profit 1,566.7 1,342.6 1,091.6 1,123.8 1,261.3Income tax (124.4) (149.0) (190.5) (202.6) (223.7)Minorities (3.8) (4.0) (4.1) (4.2) (4.6)Reported net profit 1,438.5 1,189.6 897.0 917.0 1,032.9Core net profit 777.0 934.8 897.0 917.0 1,032.9

BALANCE SHEET (USD m)Cash & Short Term Investments 982.1 1,406.3 1,716.9 1,489.8 1,349.4Accounts receivable 358.1 290.6 292.1 293.4 317.6Inventory 2,513.4 2,670.2 2,803.7 2,943.9 3,091.1Property, Plant & Equip (net) 0.0 0.0 0.0 0.0 0.0Intangible assets 0.0 0.0 0.0 0.0 0.0Investment in Associates & JVs 4,270.4 4,930.4 5,348.1 5,772.0 6,193.0Other assets 23,661.0 23,698.4 23,888.4 24,138.5 24,408.8Total assets 31,785.0 32,995.9 34,049.2 34,637.7 35,359.9ST interest bearing debt 364.5 712.1 1,066.8 1,125.0 766.6Accounts payable 1,142.6 1,408.9 1,390.4 1,396.6 1,435.4LT interest bearing debt 3,891.0 3,719.4 4,017.3 4,179.8 4,631.0Other liabilities 202.5 256.4 256.4 256.4 256.4Total Liabilities 5,600.6 6,096.8 6,730.8 6,957.8 7,089.4Shareholders Equity 26,147.7 26,857.0 27,159.6 27,629.6 28,215.5Minority Interest 36.7 42.1 46.2 50.3 55.0Total shareholder equity 26,184.4 26,899.1 27,205.7 27,679.9 28,270.4

CASH FLOW (USD m)Pretax profit 1,566.7 1,342.6 1,091.6 1,123.8 1,261.3Depreciation & amortisation 0.0 0.0 0.0 0.0 0.0Adj net interest (income)/exp (34.3) (77.0) (82.1) (95.3) (100.6)Change in working capital (455.8) 66.3 (153.5) (135.3) (132.6)Cash taxes paid (147.4) (139.1) (190.5) (202.6) (223.7)Other operating cash flow (313.9) 69.5 0.0 0.0 0.0Cash flow from operations 298.7 907.9 735.8 769.6 886.4Capex (562.8) (174.2) (240.2) (290.2) (310.2)Free cash flow (264.1) 733.7 495.6 479.4 576.2Dividends paid (374.9) (397.4) (423.5) (447.0) (447.0)Equity raised / (purchased) 0.0 0.0 0.0 0.0 0.0Change in Debt 914.2 286.8 652.6 220.7 92.9Other invest/financing cash flow (260.7) (209.4) (410.1) (426.5) (423.6)Effect of exch rate changes (0.2) 10.5 (4.0) (53.7) 61.2Net cash flow 14.3 424.2 310.6 (227.1) (140.4)

April 23, 2014 17

Hongkong Land

FYE 31 Dec FY12A FY13A FY14E FY15E FY16EKey RatiosGrowth ratios (%)Revenue growth na 66.6 0.5 0.5 8.2EBITDA growth na 14.5 2.8 3.7 14.7EBIT growth na 14.5 2.8 3.7 14.7Pretax growth na (14.3) (18.7) 3.0 12.2Reported net profit growth na (17.3) (24.6) 2.2 12.6Core net profit growth na 20.3 (4.0) 2.2 12.6

Profitability ratios (%)EBITDA margin 71.8 49.4 50.5 52.1 55.2EBIT margin 71.8 49.4 50.5 52.1 55.2Pretax profit margin nm 72.3 58.5 59.9 62.1Payout ratio 27.7 35.6 47.2 48.7 43.3

DuPont analysisNet profit margin (%) nm 64.1 48.1 48.9 50.9Revenue/Assets (x) 0.0 0.1 0.1 0.1 0.1Assets/Equity (x) 1.2 1.2 1.3 1.3 1.3ROAE (%) na 3.5 3.3 3.3 3.7ROAA (%) na 2.9 2.7 2.7 3.0

Liquidity & EfficiencyCash conversion cycle na nm nm nm nmDays receivable outstanding na 62.9 56.2 56.2 54.2Days inventory outstanding na nm nm nm nmDays payables outstanding na nm nm nm nmDividend cover (x) 3.6 2.8 2.1 2.1 2.3Current ratio (x) 2.5 2.0 1.9 1.8 2.1

Leverage & Expense AnalysisAsset/Liability (x) 5.7 5.4 5.1 5.0 5.0Net debt/equity (%) 12.5 11.3 12.4 13.8 14.3Net interest cover (x) 13.1 14.3 13.8 12.8 14.1Debt/EBITDA (x) 5.3 4.8 5.4 5.4 4.8Capex/revenue (%) 50.5 9.4 12.9 15.5 15.3Net debt/ (net cash) 3,273.4 3,025.2 3,367.2 3,815.0 4,048.2

April 23, 2014 18

Hongkong Land

Research Offices

REGIONAL WONG Chew Hann, CA Regional Head of Institutional Research (603) 2297 8686 wchewh@maybank-ib.com ONG Seng Yeow Regional Head of Retail Research (65) 6432 1453 ongsengyeow@maybank-ke.com.sg Alexander GARTHOFF Institutional Product Manager (852) 2268 0638 alexgarthoff@kimeng.com.hk ECONOMICS Suhaimi ILIAS Chief Economist Singapore | Malaysia (603) 2297 8682 suhaimi_ilias@maybank-ib.com Luz LORENZO Philippines (63) 2 849 8836 luz_lorenzo@maybank-atrke.com Tim LEELAHAPHAN Thailand (662) 658 1420 tim.l@maybank-ke.co.th JUNIMAN Chief Economist, BII Indonesia (62) 21 29228888 ext 29682 Juniman@bankbii.com Josua PARDEDE Economist / Industry Analyst, BII Indonesia (62) 21 29228888 ext 29695 JPardede@bankbii.com MALAYSIA WONG Chew Hann, CA Head of Research (603) 2297 8686 wchewh@maybank-ib.com • Strategy • Construction & Infrastructure Desmond CH’NG, ACA (603) 2297 8680 desmond.chng@maybank-ib.com • Banking & Finance LIAW Thong Jung (603) 2297 8688 tjliaw@maybank-ib.com • Oil & Gas - Regional • Shipping ONG Chee Ting, CA (603) 2297 8678 ct.ong@maybank-ib.com • Plantations - Regional Mohshin AZIZ (603) 2297 8692 mohshin.aziz@maybank-ib.com • Aviation - Regional • Petrochem YIN Shao Yang, CPA (603) 2297 8916 samuel.y@maybank-ib.com • Gaming – Regional • Media TAN Chi Wei, CFA (603) 2297 8690 chiwei.t@maybank-ib.com • Power • Telcos WONG Wei Sum, CFA (603) 2297 8679 weisum@maybank-ib.com • Property & REITs LEE Yen Ling (603) 2297 8691 lee.yl@maybank-ib.com • Building Materials • Glove Producers CHAI Li Shin (603) 2297 8684 lishin.c@maybank-ib.com • Plantation • Construction & Infrastructure KANG Chun Ee (603) 2297 8675 chunee@maybank-ib.com • Consumer Ivan YAP (603) 2297 8612 ivan.yap@maybank-ib.com • Automotive LEE Cheng Hooi Regional Chartist (603) 2297 8694 chenghooi.lee@maybank-ib.com Tee Sze Chiah Head of Retail Research (603) 2297 6858 szechiah.t@maybank-ib.com

HONG KONG / CHINA Howard WONG Head of Research (852) 2268 0648 howardwong@kimeng.com.hk • Oil & Gas - Regional Alexander LATZER (852) 2268 0647 alexanderlatzer@kimeng.com.hk • Metals & Mining - Regional Jacqueline KO, CFA (852) 2268 0633 jacquelineko@kimeng.com.hk • Consumer Karen KWAN (852) 2268 0640 karenkwan@kimeng.com.hk • Property & REITs Osbert TK TANG, CFA (86) 21 5096 8370 osberttang@kimeng.com.hk • Transport & Industrials Ricky WK NG, CFA (852) 2268 0689 rickyng@kimeng.com.hk • Utilities & Renewable Energy Simon QIAN, CFA (852) 2268 0634 simonqian@kimeng.com.hk • Telecom & Internet Steven ST CHAN (852) 2268 0645 stevenchan@kimeng.com.hk • Banking & Financials – Regional Warren LAU (852) 2268 0644 warrenlau@kimeng.com.hk • Technology – Regional William YANG (852) 2268 0675 williamyang@kimeng.com.hk • Technology – Regional INDIA Jigar SHAH Head of Research (91) 22 6623 2601 jigar@maybank-ke.co.in • Oil & Gas • Automobile • Cement Anubhav GUPTA (91) 22 6623 2605 anubhav@maybank-ke.co.in • Metal & Mining • Capital Goods • Property Urmil SHAH (91) 22 6623 2606 urmil@maybank-ke.co.in • Technology • Media SINGAPORE NG Wee Siang Head of Research (65) 6432 1467 ngweesiang@maybank-ke.com.sg • Banking & Finance Gregory YAP (65) 6432 1450 gyap@maybank-ke.com.sg • SMID Caps – Regional • Technology & Manufacturing • Telcos Wilson LIEW (65) 6432 1454 wilsonliew@maybank-ke.com.sg • Property Developers ONG Kian Lin (65) 6432 1470 ongkianlin@maybank-ke.com.sg • S-REITs James KOH (65) 6432 1431 jameskoh@maybank-ke.com.sg • Consumer - Regional YEAK Chee Keong, CFA (65) 6432 1460 yeakcheekeong@maybank-ke.com.sg • Offshore & Marine Derrick HENG (65) 6432 1446 derrickheng@maybank-ke.com.sg • Transport (Land, Shipping & Aviation) WEI Bin (65) 6432 1455 weibin@maybank-ke.com.sg • Commodity • Logistics • S-chips John CHEONG (65) 6432 1461 johncheong@maybank-ke.com.sg • Small & Mid Caps • Healthcare

INDONESIA Wilianto IE Head of Research (62) 21 2557 1125 willianto.ie@maybank-ke.co.id • Strategy Rahmi MARINA (62) 21 2557 1128 rahmi.marina@maybank-ke.co.id • Banking & Finance Aurellia SETIABUDI (62) 21 2953 0785 aurellia.setiabudi@maybank-ke.co.id • Property Anthony YUNUS (62) 21 2557 1136 anthony.yunus@maybank-ke.co.id • Consumer • Poultry Isnaputra ISKANDAR (62) 21 2557 1129 isnaputra.iskandar@maybank-ke.co.id • Metals & Mining • Cement Pandu ANUGRAH (62) 21 2557 1137 pandu.anugrah@maybank-ke.co.id • Infrastructure • Construction • Transport Janni ASMAN (62) 21 2953 0784 janni.asman@maybank-ke.co.id • Cigarette • Healthcare • Retail PHILIPPINES Luz LORENZO Head of Research (63) 2 849 8836 luz_lorenzo@maybank-atrke.com • Strategy Laura DY-LIACCO (63) 2 849 8840 laura_dyliacco@maybank-atrke.com • Utilities • Conglomerates • Telcos Lovell SARREAL (63) 2 849 8841 lovell_sarreal@maybank-atrke.com • Consumer • Media • Cement Rommel RODRIGO (63) 2 849 8839 rommel_rodrigo@maybank-atrke.com • Conglomerates • Property • Gaming • Ports/ Logistics Katherine TAN (63) 2 849 8843 kat_tan@maybank-atrke.com • Banks • Construction Ramon ADVIENTO (63) 2 849 8845 ramon_adviento@maybank-atrke.com • Mining THAILAND Maria LAPIZ Head of Institutional Research Dir (66) 2257 0250 | (66) 2658 6300 ext 1399 Maria.L@maybank-ke.co.th • Consumer / Materials Jesada TECHAHUSDIN, CFA (66) 2658 6300 ext 1394 Jesada.T@maybank-ke.co.th • Financial Services Kittisorn PRUITIPAT, CFA, FRM (66) 2658 6300 ext 1395 Kittisorn.P@maybank-ke.co.th • Real Estate Sittichai DUANGRATTANACHAYA (66) 2658 6300 ext 1393 Sittichai.D@maybank-ke.co.th • Services Sector Sukit UDOMSIRIKUL Head of Retail Research (66) 2658 6300 ext 5090 Sukit.u@maybank-ke.co.th Mayuree CHOWVIKRAN (66) 2658 6300 ext 1440 mayuree.c@maybank-ke.co.th • Strategy Padon VANNARAT (66) 2658 6300 ext 1450 Padon.v@maybank-ke.co.th • Strategy

Surachai PRAMUALCHAROENKIT (66) 2658 6300 ext 1470 Surachai.p@maybank-ke.co.th • Auto • Conmat • Contractor • Steel Suttatip PEERASUB (66) 2658 6300 ext 1430 suttatip.p@maybank-ke.co.th • Media • Commerce Sutthichai KUMWORACHAI (66) 2658 6300 ext 1400 sutthichai.k@maybank-ke.co.th • Energy • Petrochem Termporn TANTIVIVAT (66) 2658 6300 ext 1520 termporn.t@maybank-ke.co.th • Property Woraphon WIROONSRI (66) 2658 6300 ext 1560 woraphon.w@maybank-ke.co.th • Banking & Finance Jaroonpan WATTANAWONG (66) 2658 6300 ext 1404 jaroonpan.w@maybank-ke.co.th • Transportation • Small cap Chatchai JINDARAT (66) 2658 6300 ext 1401 chatchai.j@maybank-ke.co.th • Electronics VIETNAM LE Hong Lien, ACCA Head of Institutional Research (84) 844 55 58 88 x 8181 lien.le@maybank-kimeng.com.vn • Strategy • Consumer • Diversified • Utilities THAI Quang Trung, CFA, Deputy Manager, Institutional Research (84) 844 55 58 88 x 8180 trung.thai@maybank-kimeng.com.vn • Real Estate • Construction • Materials TRUONG Thanh Hang (84) 844 55 58 88 x 8085 hang.truong@maybank-kimeng.com.vn • Consumer Le Nguyen Nhat Chuyen (84) 844 55 58 88 x 8082 chuyen.le@maybank-kimeng.com.vn • Oil & Gas NGUYEN Thi Ngan Tuyen, Head of Retail Research (84) 8 44 555 888 x 8081 tuyen.nguyen@maybank-kimeng.com.vn • Food & Beverage • Oil&Gas • Banking NGUYEN Trung Hoa, Dy Head of Retail Research (84) 8 44 555 888 x 8088 hoa.nguyen@maybank-kimeng.com.vn • Macro • Steel • Real estate TRINH Thi Ngoc Diep (84) 4 44 555 888 x 8208 diep.trinh@maybank-kimeng.com.vn • Technology • Utilities • Construction TRUONG Quang Binh (84) 4 44 555 888 x 8087 binh.truong@maybank-kimeng.com.vn • Rubber plantation • Tyres and Tubes • Oil&Gas PHAM Nhat Bich (84) 8 44 555 888 x 8083 bich.pham@maybank-kimeng.com.vn • Consumer • Manufacturing • Fishery NGUYEN Thi Sony Tra Mi (84) 8 44 555 888 x 8084 mi.nguyen@maybank-kimeng.com.vn • Port operation • Pharmaceutical • Food & Beverage

April 23, 2014 19

Hongkong Land

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

DISCLAIMERS

This research report is prepared for general circulation and for information purposes only and under no circumstances should it be considered or intended as an offer to sell or a solicitation of an offer to buy the securities referred to herein. Investors should note that values of such securities, if any, may fluctuate and that each security’s price or value may rise or fall. Opinions or recommendations contained herein are in form of technical ratings and fundamental ratings. Technical ratings may differ from fundamental ratings as technical valuations apply different methodologies and are purely based on price and volume-related information extracted from the relevant jurisdiction’s stock exchange in the equity analysis. Accordingly, investors’ returns may be less than the original sum invested. Past performance is not necessarily a guide to future performance. This report is not intended to provide personal investment advice and does not take into account the specific investment objectives, the financial situation and the particular needs of persons who may receive or read this report. Investors should therefore seek financial, legal and other advice regarding the appropriateness of investing in any securities or the investment strategies discussed or recommended in this report.

The information contained herein has been obtained from sources believed to be reliable but such sources have not been independently verified by Maybank Investment Bank Berhad, its subsidiary and affiliates (collectively, “MKE”) and consequently no representation is made as to the accuracy or completeness of this report by MKE and it should not be relied upon as such. Accordingly, MKE and its officers, directors, associates, connected parties and/or employees (collectively, “Representatives”) shall not be liable for any direct, indirect or consequential losses or damages that may arise from the use or reliance of this report. Any information, opinions or recommendations contained herein are subject to change at any time, without prior notice.

This report may contain forward looking statements which are often but not always identified by the use of words such as “anticipate”, “believe”, “estimate”, “intend”, “plan”, “expect”, “forecast”, “predict” and “project” and statements that an event or result “may”, “will”, “can”, “should”, “could” or “might” occur or be achieved and other similar expressions. Such forward looking statements are based on assumptions made and information currently available to us and are subject to certain risks and uncertainties that could cause the actual results to differ materially from those expressed in any forward looking statements. Readers are cautioned not to place undue relevance on these forward-looking statements. MKE expressly disclaims any obligation to update or revise any such forward looking statements to reflect new information, events or circumstances after the date of this publication or to reflect the occurrence of unanticipated events.

MKE and its officers, directors and employees, including persons involved in the preparation or issuance of this report, may, to the extent permitted by law, from time to time participate or invest in financing transactions with the issuer(s) of the securities mentioned in this report, perform services for or solicit business from such issuers, and/or have a position or holding, or other material interest, or effect transactions, in such securities or options thereon, or other investments related thereto. In addition, it may make markets in the securities mentioned in the material presented in this report. MKE may, to the extent permitted by law, act upon or use the information presented herein, or the research or analysis on which they are based, before the material is published. One or more directors, officers and/or employees of MKE may be a director of the issuers of the securities mentioned in this report.

This report is prepared for the use of MKE’s clients and may not be reproduced, altered in any way, transmitted to, copied or distributed to any other party in whole or in part in any form or manner without the prior express written consent of MKE and MKE and its Representatives accepts no liability whatsoever for the actions of third parties in this respect.

This report is not directed to or intended for distribution to or use by any person or entity who is a citizen or resident of or located in any locality, state, country or other jurisdiction where such distribution, publication, availability or use would be contrary to law or regulation. This report is for distribution only under such circumstances as may be permitted by applicable law. The securities described herein may not be eligible for sale in all jurisdictions or to certain categories of investors. Without prejudice to the foregoing, the reader is to note that additional disclaimers, warnings or qualifications may apply based on geographical location of the person or entity receiving this report.

Malaysia

Opinions or recommendations contained herein are in the form of technical ratings and fundamental ratings. Technical ratings may differ from fundamental ratings as technical valuations apply different methodologies and are purely based on price and volume-related information extracted from Bursa Malaysia Securities Berhad in the equity analysis.

Singapore

This report has been produced as of the date hereof and the information herein may be subject to change. Maybank Kim Eng Research Pte. Ltd. (“Maybank KERPL”) in Singapore has no obligation to update such information for any recipient. For distribution in Singapore, recipients of this report are to contact Maybank KERPL in Singapore in respect of any matters arising from, or in connection with, this report. If the recipient of this report is not an accredited investor, expert investor or institutional investor (as defined under Section 4A of the Singapore Securities and Futures Act), Maybank KERPL shall be legally liable for the contents of this report, with such liability being limited to the extent (if any) as permitted by law.

Thailand

The disclosure of the survey result of the Thai Institute of Directors Association (“IOD”) regarding corporate governance is made pursuant to the policy of the Office of the Securities and Exchange Commission. The survey of the IOD is based on the information of a company listed on the Stock Exchange of Thailand and the market for Alternative Investment disclosed to the public and able to be accessed by a general public investor. The result, therefore, is from the perspective of a third party. It is not an evaluation of operation and is not based on inside information. The survey result is as of the date appearing in the Corporate Governance Report of Thai Listed Companies. As a result, the survey may be changed after that date. Maybank Kim Eng Securities (Thailand) Public Company Limited (“MBKET”) does not confirm nor certify the accuracy of such survey result.

Except as specifically permitted, no part of this presentation may be reproduced or distributed in any manner without the prior written permission of MBKET. MBKET accepts no liability whatsoever for the actions of third parties in this respect.

US

This research report prepared by MKE is distributed in the United States (“US”) to Major US Institutional Investors (as defined in Rule 15a-6 under the Securities Exchange Act of 1934, as amended) only by Maybank Kim Eng Securities USA Inc (“Maybank KESUSA”), a broker-dealer registered in the US (registered under Section 15 of the Securities Exchange Act of 1934, as amended). All responsibility for the distribution of this report by Maybank KESUSA in the US shall be borne by Maybank KESUSA. All resulting transactions by a US person or entity should be effected through a registered broker-dealer in the US. This report is not directed at you if MKE is prohibited or restricted by any legislation or regulation in any jurisdiction from making it available to you. You should satisfy yourself before reading it that Maybank KESUSA is permitted to provide research material concerning investments to you under relevant legislation and regulations.

UK

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

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

Singapore: As of 24 April 2014, Maybank KERPL and the covering analyst do not have any interest in any companies recommended in this research report.

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

Hong Kong: KESHK may have financial interests in relation to an issuer or a new listing applicant referred to as defined by the requirements under Paragraph 16.5(a) of the Hong Kong Code of Conduct for Persons Licensed by or Registered with the Securities and Futures Commission.

As of 24 April 2014, KESHK and the authoring analyst do not have any interest in any companies recommended in this research report.

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

OTHERS Analyst Certification of Independence The views expressed in this research report accurately reflect the analyst’s personal views about any and all of the subject securities or issuers; and no part of the research analyst’s compensation was, is or will be, directly or indirectly, related to the specific recommendations or views expressed in the report.

Reminder Structured securities are complex instruments, typically involve a high degree of risk and are intended for sale only to sophisticated investors who are capable of understanding and assuming the risks involved. The market value of any structured security may be affected by changes in economic, financial and political factors (including, but not limited to, spot and forward interest and exchange rates), time to maturity, market conditions and volatility and the credit quality of any issuer or reference issuer. Any investor interested in purchasing a structured product should conduct its own analysis of the product and consult with its own professional advisers as to the risks involved in making such a purchase.

No part of this material may be copied, photocopied or duplicated in any form by any means or redistributed without the prior consent of MKE.

Definition of Ratings

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

Applicability of Ratings

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

DISCLOSURES Legal Entities Disclosures Malaysia: This report is issued and distributed in Malaysia by Maybank Investment Bank Berhad (15938-H) which is a Participating Organization of Bursa Malaysia Berhad and a holder of Capital Markets and Services License issued by the Securities Commission in Malaysia. Singapore: This material is issued and distributed in Singapore by Maybank KERPL (Co. Reg No 197201256N) which is regulated by the Monetary Authority of Singapore. Indonesia: PT Kim Eng Securities (“PTKES”) (Reg. No. KEP-251/PM/1992) is a member of the Indonesia Stock Exchange and is regulated by the BAPEPAM LK. Thailand: MBKET (Reg. No.0107545000314) is a member of the Stock Exchange of Thailand and is regulated by the Ministry of Finance and the Securities and Exchange Commission. Philippines: Maybank ATRKES (Reg. No.01-2004-00019) is a member of the Philippines Stock Exchange and is regulated by the Securities and Exchange Commission. Vietnam: Maybank Kim Eng Securities JSC (License Number: 71/UBCK-GP) is licensed under the State Securities Commission of Vietnam.Hong Kong: KESHK (Central Entity No AAD284) is regulated by the Securities and Futures Commission. India: Kim Eng Securities India Private Limited (“KESI”) is a participant of the National Stock Exchange of India Limited (Reg No: INF/INB 231452435) and the Bombay Stock Exchange (Reg. No. INF/INB 011452431) and is regulated by Securities and Exchange Board of India. KESI is also registered with SEBI as Category 1 Merchant Banker (Reg. No. INM 000011708) US: Maybank KESUSA is a member of/ and is authorized and regulated by the FINRA – Broker ID 27861. UK: Maybank KESL (Reg No 2377538) is authorized and regulated by the Financial Services Authority.

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South Asia Sales Trading Kevin FOY kevinfoy@maybank-ke.com.sg Tel: (65) 6336-5157 US Toll Free: 1-866-406-7447

North Asia Sales Trading Alex TSUN alextsun@kimeng.com.hk Tel: (852) 2268 0228 US Toll Free: 1 877 837 7635

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