SMI

S$0.37 - OUTPERFORM

Breakeven in sight

Upgrade recommendation
Tan Xuan, CFA
xuan.tan@clsa.com Closure of existing terminal to improve traffic for SMI’s duty-free stores
+65 6416 7874
Mark Bedingham, CEO of SMI, recently attended CLSA’s Asean forum and
Yew Kiang Wong shared details about its retail and automotive businesses, which should become
+65 6416 7885 profitable earlier than our initial expectations. First, closure of the existing
Yangon international airport terminal by mid-2018 should drive an estimated
40% passenger traffic growth to the new terminal where SMI’s duty-free stores
operate. Second, SMI’s car fleet is likely to grow by more than 50% in FY19 on
robust corporate leasing. Incorporating these estimates into our model, we raise
FY19-20CL revenue 17% and forecast SMI to breakeven by FY19. Upgrade from
15 March 2018 Underperform to Outperform with a higher target of S$0.42 (previously S$0.38).

Singapore SMI at the Asean forum

SMI’s CEO, Mark Bedingham, attended our Asean forum. He presented to a full
Conglomerates
room and also saw good interest in one-on-one meetings. During his
Reuters SINO.SI
presentation, Mark shared how SMI is well positioned to ride on rising household
Bloomberg SMI SP income and tourism in Myanmar.

Priced on 13 March 2018 Closure of airport and increasing car fleet

STI @ 3,539.4 More importantly, Mark shared additional details that imply earlier than expected
12M hi/lo S$0.59/0.33
profitability. First, the existing international terminal will close in mid-2018, which
would drive +40% growth in passenger traffic through the duty-free stores that
12M price target S$0.42 SMI operates. Second, management also expects its car fleet to grow, from 180 as
±% potential +16% per our previous meeting to 280-320 by FY19 on strong corporate leasing, and
Shares in issue 253.4m the business to breakeven by then.
Free float (est.) 40.0%
Lower capex spend to reduce balance sheet pressure
Market cap US$84m Additionally, Mark shared that capex spend for the next five years is estimated to
be only ~US$1m annually. This would reduce pressure on the balance sheet and
3M ADV US$0.0m
the need for dilutive equity fund raising as well, a positive in our view. As a result,
Foreign s'holding 50.0% we have removed equity fund raising over the forecast period and estimate net
gearing to remain at 0.95-1.1x over FY18-20.
Major shareholders
Patrick Ho 53.8% Upgrade from U-PF to O-PF
We upgrade SMI to O-PF, with a SOTP-based target of S$0.42 (was S$0.38). We
switch from average of SOTP/DCF valuation to SOTP, which is a more straight
forward valuation method to reflect the value each segment brings to the
business. We raise FY19-20CL revenue by 17% assuming better retail and auto
contributions. With better margins and lower financing costs given reduced capex
Stock performance (%)
requirements, we now estimate SMI to breakeven in FY19 with US$1m net profit.
1M 3M 12M
Absolute 7.4 (18.0) (34.8) Financials
Relative 3.2 (20.4) (42.1) Year to 31 March 16A 17A 18CL 19CL 20CL
Abs (US$) 7.8 (15.7) (29.5) Revenue (US$m) 7 23 26 31 34
0.7 (S$) (%) 200 Rev forecast change (%) - - 2.4 17.0 17.3
Net profit (US$m) (7) (4) 1 2
0.6 150
NP forecast change (%) - - nm nm nm
0.5 100
EPS (US¢) (0.2) (3.3) (1.6) 0.4 0.8
CL/consensus (2) (EPS%) - - 149 62 (52)
0.4 50 EV/Ebitda (x) (10.5) (69.6) (54.0) 23.2 18.1
PE (x) nm nm nm 62.6 34.7
0.3 0
Dividend yield (%) 0.0 0.0 0.0 0.0 0.0
Mar-16 Sep-16 Mar-17 Sep-17
SMI (LHS) ROE (%) (4.2) (41.3) (18.9) 5.3 8.9
Rel to STI (RHS) Net debt/equity (%) 96.4 73.2 109.6 112.5 94.9
Source: Bloomberg Source: www.clsa.com

Find CLSA research on Bloomberg, Thomson Reuters, Factset and CapitalIQ - and profit from our evalu@tor proprietary database at clsa.com
For important disclosures please refer to page 9.
 
  
 Breakeven in sight SMI - O-PF

Financials at a glance
Year to 31 March 2016A 2017A 2018CL (% YoY) 2019CL 2020CL

Profit & Loss (US$m)

Revenue 7 23 26 10.4 31 34
Cogs (ex-D&A) (6) (18) (21) (20) (23)
Gross Profit (ex-D&A) 1 5 5 (0.4) 10 11
SG&A and other expenses (7) (6) (6) (6) (6)
Op Ebitda (5) (1) (2) 4 5
Depreciation/amortisation (1) (2) (2) (2) (2)
Op Ebit (7) (3) (4) 2 3
Net interest inc/(exp) 0 (1) (1) (1) (2)
Other non-Op items 6 (3) 1 1 1
Profit before tax (1) (7) (4) 1 2
Taxation - - - - -
Profit after tax (1) (7) (4) 1 2
Minority interest 1 0 0 (38.6) 0 0
Net profit 0 (7) (4) 1 2
Adjusted profit (6) (4) (4) 1 2
Cashflow (US$m) 2016A 2017A 2018CL (% YoY) 2019CL 2020CL
Operating profit (7) (3) (4) 2 3
Depreciation/amortisation 1 2 2 (11.5) 2 2
Working capital changes (16) (8) (1) (4) (2)
Other items 13 (2) 1 1 1
Net operating cashflow (9) (12) (2) 1 4
Capital expenditure (17) (17) (1) (1) (1)
Free cashflow (25) (28) (3) 0 3
M&A/Others 3 (1) 0 0 0
Net investing cashflow (14) (18) (1) (1) (1)
Increase in loans 13 8 2 (73.7) 2 -
Dividends 0 0 0 0 0
Net equity raised/other 2 16 (1) (1) (2)
Net financing cashflow 15 24 1 (97.2) 1 (2)
Incr/(decr) in net cash (7) (6) (2) 0 2
Exch rate movements 4 5 0 0 0
Balance sheet (US$m) 2016A 2017A 2018CL (% YoY) 2019CL 2020CL
Cash & equivalents 4 3 1 (60.5) 1 3
Accounts receivable 9 17 18 10.4 22 24
Other current assets 2 23 23 0.7 23 24
Fixed assets 18 15 14 (6.7) 13 12
Investments - 1 1 0 1 1
Intangible assets 0 1 1 0 1 1
Other non-current assets 0 1 1 0 1 1
Total assets 34 59 58 (1.9) 61 64
Short-term debt 5 18 5 (72.4) 5 5
Accounts payable 9 9 10 13.3 10 11
Other current liabs 0 0 0 0 0 0
Long-term debt/CBs 8 3 18 514 20 20
Provisions/other LT liabs 1 5 5 0 5 5
Shareholder funds 10 24 20 (17.3) 21 23
Minorities/other equity 0 0 0 0 0
Total liabs & equity 34 59 58 (1.9) 61 64
Ratio analysis 2016A 2017A 2018CL (% YoY) 2019CL 2020CL
Revenue growth (% YoY) 27.6 211.8 10.4 19.5 11.5
Ebitda margin (%) (72.3) (5.2) (6.4) 12.8 14.5
Ebit margin (%) (88.8) (14.9) (14.1) 6.0 7.9
Net profit growth (%) nm nm nm nm 80.2
Op cashflow growth (% YoY) nm nm nm nm 627.6
Capex/sales (%) 222.5 72.7 3.9 3.3 2.9
Net debt/equity (%) 96.4 73.2 109.6 112.5 94.9
Net debt/Ebitda (x) (1.8) (14.7) (13.3) 6.0 4.4
ROE (%) (4.2) (41.3) (18.9) 5.3 8.9
ROIC (%) (26.2) (10.3) (7.9) 3.9 5.6
Source: www.clsa.com

15 March 2018 xuan.tan@clsa.com 2

 
  
 Breakeven in sight SMI - O-PF

Figure 1

SOTP valuation
EV/Ebitda FY19CL Ebitda EV (US$m) % of GAV
multiple (x) (US$m)
Travel & Fashion Retail 14 5.8 82 77%
Construction Services 8 0.9 7 7%
Auto Services 8 0.2 2 2%
Tower business US$150k/unit 98 units 15 14%
Total GAV 105 100%
Less: Net debt (24)
NAV 82
Total shares O/S (m) 253
NAV/share (US$) 0.32
USD:SGD 1.31
Target price (S$) 0.42
Source: CLSA

Valuation details
Our target price is based on a sum-of-the-parts method, using 14x EV/Ebitda for
SMI's Travel & Fashion Retail segment, 8x for its Construction and Auto Services
segments, and US$150k per telco tower. As there is no listed direct peer, our
target multiples are based on broad regional peers (from Bloomberg consensus
and CLSA), adjusted for SMI’s growth outlook. Telco valuations are guided by
management.

Investment risks
Key risks are execution risk in its Travel & Fashion Retail or F&B stores, which
could take longer than we expect to stabilise. High corporate overheads and the
telco tower business are drags on earnings. Any equity fund raising, when the
company is yet to be profitable, would be even more dilutive for the existing
shareholders.

15 March 2018 xuan.tan@clsa.com 3

 
  
 Breakeven in sight SMI - O-PF

Figure 2

Peer comps
Company Ticker Price Mkt cap PE (x) PB (x) EV/Ebitda (x) Net debt/Equity Target Rec
(LCY) (US$m) (%) (LCY)
FY18 FY18 FY18
Singapore Myanmar Investco SMI SP 0.37 84 (16.2) 3.4 (54.0) 109.6 0.42 O-PF

Myanmar Pure Play

Yoma Strategic Holdings Ltd YOMA SP 0.43 621 31.7 1.1 39.3 25.2 0.53 BUY
Memories Group Ltd MEGL SP 0.25 67 N/A N/A N/A (100.4) na na
Myanmar Investments Intn’l MIL LN 1.28 48 N/A N/A N/A (9.2) na na
Weighted average 736 31.7 1.1 39.3 11.5

Travel and Fashion Retail

Beijing Capital International 694 HK 11.18 6,174 12.1 1.7 6.9 32.4 na na
Malaysia Airports Holdings Bhd MAHB MK 8.84 3,742 35.3 1.8 8.9 32.7 10.60 BUY
Hotel Shilla Co Ltd 008770 KS 89,900 3,316 19.5 3.9 12.7 66.5 127,000 BUY
Lotte Tour Development Co Ltd 032350 KS 15,000 640 N/A N/A N/A (62.1) na na
Duty Free International Ltd DFIL SP 0.26 242 N/A N/A N/A (48.0) na na
Southern Airports Services JSC SAS VN 30,000 176 N/A N/A N/A (30.2) na na
Sona Topas Tourism Industry Tb SONA IJ 3,570 86 N/A N/A N/A (31.8) na na
Weighted average 14,376 20.5 2.3 8.9 33.6

Auto Services
Synergetic Auto Performance Co ASAP TB 11.20 261 44.4 5.6 12.1 508.9 na na
AJ Rent A Car Co Ltd 068400 KS 12,200 254 N/A N/A N/A 317.6 na na
Krungthai Car Rent and Lease P KCAR TB 15.50 124 N/A N/A N/A 131.9 na na
Adi Sarana Armada Tbk PT ASSA IJ 270 67 7.4 0.9 N/A 197.9 na na
Autoriders International Ltd ASHA IN 20.05 0 N/A N/A N/A N/A na na
Weighted average 706 36.9 4.6 12.1 344.3

Construction Services
United Tractors Tbk PT UNTR IJ 33,725 9,148 14.1 2.5 7.2 (21.0) 39,000 BUY
Hexindo Adiperkasa Tbk PT HEXA IJ 3,020 184 11.0 1.3 5.0 (10.4) na na
Intraco Penta Tbk PT INTA IJ 426 103 N/A N/A N/A 672.0 na na
Weighted average 9,436 14.0 2.4 7.1 (13.2)

Food and Beverage

Westlife Development Ltd WLDL IN 338.10 811 260.6 9.6 60.7 (1.2) 450.00 BUY
Fast Food Indonesia Tbk PT FAST IJ 1,430 207 14.6 N/A N/A (48.2) na na
Japan Foods Holding Ltd JFOOD SP 0.50 66 21.5 N/A N/A (63.9) na na
Food Capitals PCL FC TB 0.45 31 N/A N/A N/A 188.6 na na
Chaswood Resources Holdings CWR SP 0.01 2 N/A N/A N/A 468.6 na na
Weighted average 3,174 87.0 6.1 27.0 13.5
Source: CLSA (for the rated stocks), Bloomberg (for the others)

15 March 2018 xuan.tan@clsa.com 4

 
  
 Breakeven in sight SMI - O-PF

Detailed financials
Profit & Loss (US$m)
Year to 31 March 2015A 2016A 2017A 2018CL 2019CL 2020CL
Revenue 6 7 23 26 31 34
Cogs (ex-D&A) (5) (6) (18) (21) (20) (23)
Gross Profit (ex-D&A) 1 1 5 5 10 11
Research & development costs - - - - - -
Selling & marketing expenses 0 (1) (1) (1) (1) (1)
Other SG&A - (7) (7) (8) (8) (8)
Other Op Expenses ex-D&A 0 1 3 2 2 2
Op Ebitda 1 (5) (1) (2) 4 5
Depreciation/amortisation (1) (1) (2) (2) (2) (2)
Op Ebit 0 (7) (3) (4) 2 3
Interest income 0 0 0 0 0 0
Interest expense 0 0 (1) (1) (1) (2)
Net interest inc/(exp) 0 0 (1) (1) (1) (2)
Associates/investments - - 0 - - -
Forex/other income - - - - - -
Asset sales/other cash items (4) 0 0 1 1 1
Provisions/other non-cash items - - - - - -
Asset revaluation/Exceptional items (2) 6 (3) - - -
Profit before tax (6) (1) (7) (4) 1 2
Taxation - - - - - -
Profit after tax (6) (1) (7) (4) 1 2
Preference dividends - - - - - -
Profit for period (6) (1) (7) (4) 1 2
Minority interest 0 1 0 0 0 0
Net profit (6) 0 (7) (4) 1 2
Extraordinaries/others 0 0 0 0 0 0
Profit avail to ordinary shares (6) 0 (7) (4) 1 2
Dividends 0 - - - - -
Retained profit (6) 0 (7) (4) 1 2
Adjusted profit (4) (6) (4) (4) 1 2
EPS (US¢) (4.3) (0.2) (3.3) (1.6) 0.4 0.8
Adj EPS [pre excep] (US¢) (2.9) (3.9) (1.9) (1.6) 0.4 0.8
Core EPS (US¢) (4.3) (0.2) (3.3) (1.6) 0.4 0.8
DPS (US¢) 0.0 0.0 0.0 0.0 0.0 0.0

Profit & loss ratios

Year to 31 March 2015A 2016A 2017A 2018CL 2019CL 2020CL
Growth (%)
Revenue growth (% YoY) - 27.6 211.8 10.4 19.5 11.5
Ebitda growth (% YoY) - (585.7) nm nm nm 25.5
Ebit growth (% YoY) - nm nm nm nm 48.3
Net profit growth (%) - nm nm nm nm 80.2
EPS growth (% YoY) nm nm nm nm nm 80.2
Adj EPS growth (% YoY) nm nm nm nm nm 80.2
DPS growth (% YoY) - - - - - -
Core EPS growth (% YoY) nm nm nm nm nm 80.2
Margins (%)
Ebitda margin (%) 19.0 (72.3) (5.2) (6.4) 12.8 14.5
Ebit margin (%) (6.3) (88.8) (14.9) (14.1) 6.0 7.9
Net profit margin (%) (107.2) (4.3) (30.3) (16.2) 3.6 5.8
Core profit margin (107.2) (4.3) (30.3) (16.2) 3.6 5.8
Op cashflow margin (28.2) (115.1) (49.4) (6.6) 1.9 12.4
Returns (%)
ROE (%) (123.0) (4.2) (41.3) (18.9) 5.3 8.9
ROA (%) (0.9) (18.2) (7.5) (6.2) 3.1 4.3
ROIC (%) (1.2) (26.2) (10.3) (7.9) 3.9 5.6
ROCE (%) (39.9) (63.2) (11.2) (8.7) 4.3 6.1
Other key ratios (%)
Effective tax rate (%) 0.0 0.0 0.0 0.0 0.0 0.0
Ebitda/net int exp (x) - (17.2) (1.3) (1.2) 2.7 3.3
Exceptional or extraord. inc/PBT (%) - - - - - -
Dividend payout (%) - - - - 0.0 0.0
Source: www.clsa.com

15 March 2018 xuan.tan@clsa.com 5

 
  
 Breakeven in sight SMI - O-PF

Balance sheet (US$m)

Year to 31 March 2015A 2016A 2017A 2018CL 2019CL 2020CL
Cash & equivalents 6 4 3 1 1 3
Accounts receivable 2 9 17 18 22 24
Inventories 0 0 2 2 2 2
Other current assets 30 2 21 21 21 21
Current assets 38 15 43 43 47 51
Fixed assets 1 18 15 14 13 12
Investments - - 1 1 1 1
Goodwill 0 0 1 1 1 1
Other intangible assets 0 0 0 0 0 0
Other non-current assets 1 0 1 1 1 1
Total assets 40 34 59 58 61 64
Short term loans/OD - 5 18 5 5 5
Accounts payable 3 9 9 10 10 11
Accrued expenses - - - - - -
Taxes payable 0 0 0 0 0 0
Other current liabs 1 0 - 0 - 0
Current liabilities 4 14 28 16 15 17
Long-term debt/leases/other - 8 3 18 20 20
Convertible bonds - - - - - -
Provisions/other LT liabs 29 1 5 5 5 5
Total liabilities 32 23 35 38 40 41
Share capital 14 22 43 43 43 43
Retained earnings (12) (12) (19) (23) (22) (20)
Reserves/others 3 0 0 0 0 0
Shareholder funds 5 10 24 20 21 23
Minorities/other equity 2 0 0 0 0 0
Total equity 7 10 24 20 21 23
Total liabs & equity 40 34 59 58 61 64
Total debt 0 13 21 23 25 25
Net debt (6) 10 18 22 24 22
Adjusted EV 37 56 84 88 91 90
BVPS (US¢) 3.5 5.7 9.5 7.9 8.3 9.1

Balance sheet ratios

Year to 31 March 2015A 2016A 2017A 2018CL 2019CL 2020CL
Key ratios
Current ratio (x) 10.6 1.1 1.6 2.7 3.0 3.1
Growth in total assets (% YoY) - (15.3) 76.9 (1.9) 5.0 5.4
Growth in capital employed (% YoY) - 2,080.2 108.5 (0.7) 7.2 0.7
Net debt to operating cashflow (x) - (1.1) (1.5) (12.7) 40.5 5.2
Gross debt to operating cashflow (x) - (1.6) (1.8) (13.5) 43.0 5.9
Gross debt to Ebitda (x) - (2.5) (17.5) (14.1) 6.3 5.1
Net debt/Ebitda (x) - (1.8) (14.7) (13.3) 6.0 4.4
Gearing
Net debt/equity (%) (87.4) 96.4 73.2 109.6 112.5 94.9
Gross debt/equity (%) 0.0 131.7 87.1 116.3 119.5 108.8
Interest cover (x) (6.2) (21.1) (3.8) (2.7) 1.3 1.8
Debt Cover (x) 0.0 (0.6) (0.5) (0.1) 0.0 0.2
Working capital analysis
Inventory days 0.0 6.8 16.9 29.3 34.5 35.4
Debtor days 110.8 273.3 203.4 247.1 238.2 245.9
Creditor days 197.2 334.6 176.5 169.9 182.5 170.9
Working capital/Sales (%) 483.4 38.9 128.7 119.2 113.2 106.0
Capital employed analysis
Sales/Capital employed (%) 635.4 37.2 55.6 61.9 68.9 76.3
EV/Capital employed (%) 4,060.1 281.0 200.4 212.4 205.0 199.8
Working capital/Capital employed (%) 3,071.6 14.5 71.5 73.7 78.0 80.9
Fixed capital/Capital employed (%) 70.1 88.4 35.5 33.4 28.6 25.7
Other ratios (%)
EV/OCF (x) (22.7) (6.6) (7.3) (51.7) 156.7 21.1
EV/FCF (x) (11.6) (2.2) (3.0) (32.6) (219.6) 27.7
EV/Sales (x) 6.4 7.6 3.6 3.4 3.0 2.6
Capex/depreciation (%) 106.4 1,342.4 750.9 50.1 47.3 44.7
Source: www.clsa.com

15 March 2018 xuan.tan@clsa.com 6

 
  
 Breakeven in sight SMI - O-PF

Cashflow (US$m)
Year to 31 March 2015A 2016A 2017A 2018CL 2019CL 2020CL
Operating profit 0 (7) (3) (4) 2 3
Operating adjustments (4) 9 0 0 0 0
Depreciation/amortisation 1 1 2 2 2 2
Working capital changes 4 (16) (8) (1) (4) (2)
Interest paid / other financial expenses - - - - - -
Tax paid 0 0 0 0 0 0
Other non-cash operating items (3) 4 (2) 1 1 1
Net operating cashflow (2) (9) (12) (2) 1 4
Capital expenditure (2) (17) (17) (1) (1) (1)
Free cashflow (3) (25) (28) (3) 0 3
Acq/inv/disposals 7 0 19 - - -
Int, invt & associate div (4) 3 (20) 0 0 0
Net investing cashflow 2 (14) (18) (1) (1) (1)
Increase in loans (2) 13 8 2 2 -
Dividends 0 0 0 0 0 0
Net equity raised/(buybacks) 3 2 16 (1) (1) (2)
Net financing cashflow 1 15 24 1 1 (2)
Incr/(decr) in net cash 1 (7) (6) (2) 0 2
Exch rate movements (4) 4 5 0 0 0
Opening cash 10 6 4 3 1 1
Closing cash 6 4 3 1 1 3
OCF PS (US¢) (1.1) (5.3) (5.4) (0.7) 0.2 1.7
FCF PS (US¢) (2.2) (15.6) (13.3) (1.1) (0.2) 1.3

Cashflow ratio analysis

Year to 31 March 2015A 2016A 2017A 2018CL 2019CL 2020CL
Growth (%)
Op cashflow growth (% YoY) - nm nm nm nm 627.6
FCF growth (% YoY) - - - - - -
Capex growth (%) - 956.0 1.8 (94.1) 0.0 0.0
Other key ratios (%)
Capex/sales (%) 26.9 222.5 72.7 3.9 3.3 2.9
Capex/op cashflow (%) (95.5) (193.3) (147.0) (58.5) 171.4 23.6
Operating cashflow payout ratio (%) - - - - 0.0 0.0
Cashflow payout ratio (%) - - - - - -
Free cashflow payout ratio (%) - - - - - -

DuPont analysis
Year to 31 March 2015A 2016A 2017A 2018CL 2019CL 2020CL
Ebit margin (%) (6.3) (88.8) (14.9) (14.1) 6.0 7.9
Asset turnover (x) 0.1 0.2 0.5 0.4 0.5 0.5
Interest burden (x) 16.3 0.1 2.1 1.2 0.6 0.8
Tax burden (x) 1.0 1.0 1.0 1.0 1.0 1.0
Return on assets (%) (0.9) (18.2) (7.5) (6.2) 3.1 4.3
Leverage (x) 5.4 4.2 2.7 2.7 2.9 2.8
ROE (%) (81.6) (9.4) (42.5) (19.7) 5.6 9.3

EVA® analysis
Year to 31 March 2015A 2016A 2017A 2018CL 2019CL 2020CL
Ebit adj for tax 0 (7) (3) (4) 2 3
Average invested capital 30 25 34 46 47 49
ROIC (%) (1.2) (26.2) (10.3) (7.9) 3.9 5.6
Cost of equity (%) 10.2 10.2 10.2 10.2 10.2 10.2
Cost of debt (adj for tax) 6.0 6.0 6.0 6.0 6.0 6.0
Weighted average cost of capital (%) 8.5 8.5 8.5 8.5 8.5 8.5
EVA/IC (%) (9.7) (34.6) (18.8) (16.4) (4.6) (2.9)
EVA (US$m) (3) (9) (6) (8) (2) (1)
Source: www.clsa.com

15 March 2018 xuan.tan@clsa.com 7

 
  
 Important disclosures SMI - O-PF

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Companies mentioned
SMI (SMI SP - S$0.37 - OUTPERFORM)
Adi Sarana (N-R)
AJ Rent A Car (N-R)
Autoriders International (N-R)
BCIA (N-R)
Chaswood Resources Holdings (N-R)
Duty Free International (N-R)
Fastfood Indonesia (N-R)
Food Capitals (N-R)
Hexindo Adiperkasa (N-R)
Hotel Shilla (008770 KS - ₩89,900 - BUY)
Intraco Penta (N-R)
Japan Foods Holding (N-R)
Krungthai Car Rent and Lease (N-R)
Lotte Tour Dev (N-R)
Malaysia Airports (MAHB MK - RM8.82 - BUY)
Memories (N-R)
Myanmar Investments International (N-R)
Sona Topas Tourism (N-R)
Southern Airports Services (N-R)
Synergetic Auto Performance (N-R)
United Tractors (UNTR IJ - RP33,700 - BUY)
Westlife (WLDL IN - RS337.6 - BUY)
Yoma (YOMA SP - S$0.44 - BUY)

Analyst certification
The analyst(s) of this report hereby certify that the views expressed in this research report accurately reflect
my/our own personal views about the securities and/or the issuers and that no part of my/our compensation was,
is, or will be directly or indirectly related to the specific recommendation or views contained in this research
report.

15 March 2018 xuan.tan@clsa.com 8

 

 
 Important disclosures
Important disclosures
Recommendation history of Singapore Myanmar Investco Ltd SMI SP
Tan Xuan, CFA BUY O-PF
0.7
Stock price (S$)
Other analysts U-PF SELL
No coverage N-R
0.6
0.5
0.4
0.3
May 15 Sep 15 Jan 16 May 16 Sep 16 Jan 17 May 17 Sep 17 Jan 18
Date Rec Target Date
LATEST O-PF 0.42 02 Mar 2018
Source: CLSA
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to. Investors are strongly encouraged to review this disclaimer
before investing.
Neither analysts nor their household members/associates/may
have a financial interest in, or be an officer, director or advisory
board member of companies covered by the analyst unless disclosed
herein. In circumstances where an analyst has a pre-existing holding
in any securities under coverage, those holdings are grandfathered
and the analyst is prohibited from trading such securities.
Unless specified otherwise, CLSA/CLST or its respective
affiliates, did not receive investment banking/non-investment
banking income from, and did not manage/co-manage a public
offering for, the listed company during the past 12 months, and it
does not expect to receive investment banking compensation from
the listed company within the coming three months. Unless
mentioned otherwise, CLSA/CLST does not own 1% or more of any
class of securities of the subject company, and does not make a
market, in the securities.
The analysts included herein hereby confirm that they have not
been placed under any undue influence, intervention or pressure by
any person/s in compiling this research report. In addition, the
analysts attest that they were not in possession of any material,
non-public information regarding the subject company at the time of
publication of the report. Save from the disclosure below (if any),
the analyst(s) is/are not aware of any material conflict of interest.
As analyst(s) of this report, I/we hereby certify that the views
expressed in this research report accurately reflect my/our own
personal views about the securities and/or the issuers and that no
part of my/our compensation was, is, or will be directly or indirectly
related to the specific recommendation or views contained in this
report or to any investment banking relationship with the subject
company covered in this report (for the past one year) or otherwise
any other relationship with such company which leads to receipt of
fees from the company except in ordinary course of business of the
company. The analyst/s also state/s and confirm/s that he/she/they
15 March 2018 xuan.tan@clsa.com
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Rec Target
U-PF 0.38
has/have not been placed under any undue influence, intervention
or pressure by any person/s in compiling this research report. In
addition, the analysts included herein attest that they were not in
possession of any material, nonpublic information regarding the
subject company at the time of publication of the report. Save from
the disclosure below (if any), the analyst(s) is/are not aware of any
material conflict of interest.
CLSA or CLST (and/or their respective affiliates) participated in a
public offering of Singapore Myanmar Investco Ltd's securities or
received compensation for investment banking services from
Singapore Myanmar Investco Ltd in the past 12 months.
Key to CLSA/CLST investment rankings: BUY: Total stock return
(including dividends) expected to exceed 20%; O-PF: Total expected
return below 20% but exceeding market return; U-PF: Total
expected return positive but below market return; SELL: Total return
expected to be negative. For relative performance, we benchmark
the 12-month total forecast return (including dividends) for the
stock against the 12-month forecast return (including dividends) for
the market on which the stock trades.
We define as “Double Baggers” stocks we expect to yield 100%
or more (including dividends) within three years at the time the
stocks are introduced to our “Double Bagger” list. "High Conviction"
Ideas are not necessarily stocks with the most upside/downside, but
those where the Research Head/Strategist believes there is the
highest likelihood of positive/negative returns. The list for each
market is monitored weekly.
Overall rating distribution for CLSA/CLST only Universe: Overall
rating distribution: BUY / Outperform - CLSA: 64.69%; CLST only:
61.43%, Underperform / SELL - CLSA: 35.31%; CLST only: 38.57%,
Restricted - CLSA: 0.00%; CLST only: 0.00%. Data as of 31
December 2017. Investment banking clients as a % of rating
category: BUY / Outperform - CLSA: 2.61%; CLST only: 0.00%,
Underperform / SELL - CLSA: 1.76%; CLST only: 0.00%, Restricted -
CLSA: 0.00%; CLST only: 0.00%. Data for 12-month period ending
31 December 2017.
There are no numbers for Hold/Neutral as CLSA/CLST do not
have such investment rankings. For a history of the
recommendation, price targets and disclosure information for
companies mentioned in this report please write to: CLSA Group
Compliance, 18/F, One Pacific Place, 88 Queensway, Hong Kong
and/or; (c) CLST Compliance (27/F, 95, Section 2 Dun Hua South
Road, Taipei 10682, Taiwan, telephone (886) 2 2326 8188). EVA® is
a registered trademark of Stern, Stewart & Co. "CL" in charts and
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 Important disclosures
tables stands for CLSA, “CT” stands for CLST estimates and “CS” for
Citic Securities estimates unless otherwise noted in the source.
This publication/communication is subject to and incorporates
the terms and conditions of use set out on the www.clsa.com
website (https://www.clsa.com/disclaimer.html). Neither the
publication/communication nor any portion hereof may be reprinted,
sold, resold, copied, reproduced, distributed, redistributed,
published, republished, displayed, posted or transmitted in any form
or media or by any means without the written consent of CLSA
and/or CLST. CLSA and/or CLST has/have produced this
publication/communication for private circulation to professional,
institutional and/or wholesale clients only, and may not be
distributed to retail investors. The information, opinions and
estimates herein are not directed at, or intended for distribution to
or use by, any person or entity in any jurisdiction where doing so
would be contrary to law or regulation or which would subject CLSA,
and/or CLST to any additional registration or licensing requirement
within such jurisdiction. The information and statistical data herein
have been obtained from sources we believe to be reliable. Such
information has not been independently verified and we make no
representation or warranty as to its accuracy, completeness or
correctness. Any opinions or estimates herein reflect the judgment
of CLSA and/or CLST at the date of this publication/communication
and are subject to change at any time without notice. Where any
part of the information, opinions or estimates contained herein
reflects the views and opinions of a sales person or a non-analyst,
such views and opinions may not correspond to the published view
of CLSA and/or CLST. Any price target given in the report may be
projected from one or more valuation models and hence any price
target may be subject to the inherent risk of the selected model as
well as other external risk factors. Where the publication does not
contain ratings, the material should not be construed as research but
is offered as factual commentary. It is not intended to, nor should it
be used to form an investment opinion about the non-rated
companies.
This publication/communication is for information purposes only
and it does not constitute or contain, and should not be considered
as an offer or invitation to sell, or any solicitation or invitation of any
offer to subscribe for or purchase any securities in any jurisdiction
and neither this publication/communication nor anything contained
herein shall form the basis of any investment decision, contract or
commitment whatsoever. This is not intended to provide
professional, investment or any other type of advice or
recommendation and does not take into account the particular
investment objectives, financial situation or needs of individual
recipients. Before acting on any information in this
publication/communication, you should consider whether it is
suitable for your particular circumstances and, if appropriate, seek
professional advice, including tax advice. Investments involve risks,
and investors should exercise prudence and their own judgment in
making their investment decisions. The value of any investment or
income my go down as well as up, and investors may not get back
the full (or any) amount invested. Past performance is not
necessarily a guide to future performance. CLSA and/or CLST
do/does not accept any responsibility and cannot be held liable for
any person’s use of or reliance on the information and opinions
contained herein. To the extent permitted by applicable securities
laws and regulations, CLSA and/or CLST accept(s) no liability
whatsoever for any direct or consequential loss arising from the use
of this publication/communication or its contents.
To maintain the independence and integrity of our research, our
Corporate Finance, Sales Trading, Asset Management and Research
business lines are distinct from one another. This means that CLSA’s
Research department is not part of and does not report to CLSA
Corporate Finance department or CLSA’s Sales and Trading business.
Accordingly, neither the Corporate Finance nor the Sales and
Trading department supervises or controls the activities of CLSA’s
research analysts. CLSA’s research analysts report to the
management of the Research department, who in turn report to
CLSA’s senior management. CLSA has put in place a number of
internal controls designed to manage conflicts of interest that may
arise as a result of CLSA engaging in Corporate Finance, Sales and
Trading, Asset Management and Research activities. Some examples
of these controls include: the use of information barriers and other
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controls designed to ensure that confidential information is only
shared on a “need to know” basis and in compliance with CLSA’s
Chinese Wall policies and procedures; measures designed to ensure
that interactions that may occur among CLSA’s Research personnel,
Corporate Finance, Asset Management, and Sales and Trading
personnel, CLSA’s financial product issuers and CLSA’s research
analysts do not compromise the integrity and independence of
CLSA’s research.
Subject to any applicable laws and regulations at any given time,
CLSA, CLST, their respective affiliates, officers, directors or
employees may have used the information contained herein before
publication and may have positions in, or may from time to time
purchase or sell or have a material interest in any of the securities
mentioned or related securities, or may currently or in future have or
have had a business or financial relationship with, or may provide or
have provided corporate finance/capital markets and/or other
services to, the entities referred to herein, their advisors and/or any
other connected parties. As a result, you should be aware that CLSA
and/or CLST and/or their respective affiliates, officers, directors or
employees may have one or more conflicts of interest. Regulations
or market practice of some jurisdictions/markets prescribe certain
disclosures to be made for certain actual, potential or perceived
conflicts of interests relating to research reports. Details of the
disclosable interest can be found in certain reports as required by
the relevant rules and regulation and the full details are available at
http://www.clsa.com/member/research_disclosures/. Disclosures
therein include the position of CLSA and CLST only. Unless specified
otherwise, CLSA did not receive any compensation or other benefits
from the subject company, covered in this
publication/communication, or from any third party. If investors
have any difficulty accessing this website, please contact
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compliance_hk@clsa.com.
This publication/communication is distributed for and on behalf
of CLSA Limited (for research compiled by non-US and non-Taiwan
analyst(s)), and/or CLST (for research compiled by Taiwan analyst(s))
in Australia by CLSA Australia Pty Ltd; in Hong Kong by CLSA
Limited; in India by CLSA India Private Limited, (Address: 8/F,
Dalamal House, Nariman Point, Mumbai 400021. Tel No: +91-22-
66505050. Fax No: +91-22-22840271; CIN:
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as Stock Broker, INM000010619 as Merchant Banker and
INH000001113 as Research Analyst,; in Indonesia by PT CLSA
Sekuritas Indonesia; in Japan by CLSA Securities Japan Co., Ltd; in
Korea by CLSA Securities Korea Ltd; in Malaysia by CLSA Securities
Malaysia Sdn Bhd; in the Philippines by CLSA Philippines Inc (a
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to persons who qualify as an institutional investor, accredited
investor or expert investor; in Thailand by CLSA Securities (Thailand)
Limited; in Taiwan by CLST and in United Kingdom by CLSA (UK).
United States of America: Where any section is compiled by
non-US analyst(s), it is distributed into the United States by CLSA
solely to persons who qualify as "Major US Institutional Investors" as
defined in Rule 15a-6 under the Securities and Exchange Act of
1934 and who deal with CLSA Americas. However, the delivery of
this research report to any person in the United States shall not be
deemed a recommendation to effect any transactions in the
securities discussed herein or an endorsement of any opinion
expressed herein. Any recipient of this research in the United States
wishing to effect a transaction in any security mentioned herein
should do so by contacting CLSA Americas.
United Kingdom: In the United Kingdom, this research is a
marketing communication. It has not been prepared in accordance
with the legal requirements designed to promote the independence
of investment research, and is not subject to any prohibition on
dealing ahead of the dissemination of investment research. The
research is disseminated in the EU by CLSA (UK), which is authorised
and regulated by the Financial Conduct Authority. This document is
directed at persons having professional experience in matters
relating to investments as defined in Article 19 of the FSMA 2000
(Financial Promotion) Order 2005. Any investment activity to which
it relates is only available to such persons. If you do not have
10
 

 
 Important disclosures
professional experience in matters relating to investments you
should not rely on this document. Where the research material is
compiled by the UK analyst(s), it is produced and disseminated by
CLSA (UK). For the purposes of the Financial Conduct Rules this
research is prepared and intended as substantive research material.
For all other jurisdiction-specific disclaimers please refer to
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SMI - O-PF
https://www.clsa.com/disclaimer.html. The analysts/contributors to
this publication/communication may be employed by any relevant
CLSA entity or CLST, which is different from the entity that
distributes the publication/communication in the respective
jurisdictions.© 2018 CLSA Limited and/or CL Securities Taiwan Co.,
Ltd. (“CLST”).
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