Singapore Company Focus

Ezra Holdings
Bloomberg: EZRA SP | Reuters: EZRA.SI

Refer to important disclosures at the end of this report

DBS Group Research . Equity

15 Jul 2013

FULLY VALUED S$0.955 STI : 3,236.06

Downgrade from BUY Price Target : 12-Month S$ 0.90 (Prev S$ 1.56) Reason for Report : Change in earnings and TP Potential Catalyst: Sustainable recovery in margins, better earnings execution in subsequent quarters DBSV vs Consensus: Lower, more bearish on margins Analyst Suvro SARKAR +65 6398 7973 suvro@dbsvickers.com

Turbulent waters
Disappointing core net loss of US$58m in 3Q13 Write-offs on legacy projects and project delays lead to negative contribution from subsea Order win momentum sustained but execution risks will likely overshadow Low visibility on margin recovery, downgrade to Fully Valued with lower TP of S$0.90

Price Relative
S$ 2.7 2.5 2.3 2.1 1.9 1.7 1.5 1.3 1.1 0.9 0.7 Jul-09 Jul-10 Jul-11 Jul-12 211 191 171 151 131 111 91 71 51 Jul-13 Relative Index

3Q significantly below. Stripping out exceptional gains of about US$65m, including gains on disposal of its remaining stake in Ezion, Ezra would have recorded a core net loss of about US$58m in 3Q-FY13. The underperformance was driven by i) negative contribution from subsea division as a result of project delays in the North Sea, adverse timing of revenue receipts and write-offs related to legacy projects and ii) lower revenue and weaker margins from the offshore chartering division owing to sub-optimal utilisation of fleet. Admin expenses were also higher than normal levels. Order wins continue. The subsea division EMAS AMC reported order wins of about US$400m across North Sea, West Africa and Gulf of Mexico, taking YTD order wins to US$1.4bn. However, with most projects requiring long lead times and stretching from 2014 to 2016, near term impact is not significant. We continue to expect another US$1.5bn worth of new subsea contracts in FY14. But execution is the main concern. Apart from costs associated with certain legacy projects, project delays and other risks associated with offshore EPC contracts will continue to impact Ezras subsea operations, in our view. The integration of AMC has taken longer than expected and we rationalize our margin expectations, going forward. As a result, we now forecast a full year core net loss of US$55m and cut our FY14 net profit forecast by 46% to US$37m. Our SOTP valuation is revised down to S$0.90, based on 0.8x P/BV for Ezras core operations, down from 1.15x P/BV earlier, to account for lower margins and ROEs as well as risks associated with a highly geared balance sheet amidst a potentially rising interest rate environment in future. Downgrade to Full Valued.
At A Glance Issued Capital (m shrs) Mkt. Cap (S$m/US$m) Major Shareholders Lee Chye Tek (%) Aker Solutions AS (%) Mondrian Investment (%) Free Float (%) Avg. Daily Vol.(000) 979 935 / 741 18.9 7.4 7.3 66.4 4,893

Ezra Holdings (LHS)

Relative STI INDEX (RHS)

Forecasts and Valuation

FY Aug (US$ m) 2011A 2012A 2013F 2014F

Revenue EBITDA Pre-tax Profit Net Profit Net Pft (Pre-Ex, Aft Pref Div)* EPS (S cts) EPS Pre Ex, Aft Pref Div (S cts) EPS Gth (%) EPS Gth Pre Ex, Aft pref div (%) Net DPS (S cts) BV Per Share (S cts) PE (X) PE Pre Ex, aft pref div (X) P/Cash Flow (X) EV/EBITDA (X) Net Div Yield (%) P/Book Value (X) Net Debt/Equity (X) ROAE (%) Net Profit Rev (%): Consensus EPS (S cts): Other Broker Recs:

559 78 52 43 16 6.3 2.3 (55) (76) 0.0 123.4 15.2 41.2 nm 19.0 0.0 0.8 1.0 6.0

984 120 87 65 14 8.4 1.8 34 (20) 0.0 130.5 11.4 51.8 nm 15.4 0.0 0.7 1.1 7.0

1,165 58 73 46 (65) 5.9 (8.4) (30) nm 0.0 132.3 16.2 nm 18.4 35.1 0.0 0.7 1.0 3.5 (3.6) 8.1 S: 6

1,296 144 45 37 26 4.7 3.4 (20) nm 0.0 135.6 20.2 28.3 46.5 14.8 0.0 0.7 1.1 2.5 (45.8) 10.1 H: 6

B: 3

ICB Industry : Oil & Gas ICB Sector: Oil Equipment; Services & Dist Principal Business: Ezra is an integrated offshore solutions provider for the oil and gas industry in the Asia Pacific region.

Source of all data: Company, DBS Vickers, Bloomberg Finance L.P

www.dbsvickers.com sa: YM

Company Focus Ezra Holdings

3Q-FY13 results summary and comments

FY Aug (US$ m) Segmental revenue Offshore Support Services Marine Services Subsea Services Total Revenue Gross Profit Other op income Admin exp 65.2 38.1 162.3 265.6 44.4 1.1 (34.0) 70.8 41.4 135.0 247.1 42.3 1.3 (35.1) 64.5 51.0 201.6 317.1 2.2 4.5 (44.1) -1% 34% 24% 19% -95% 293% 30% -9% 23% 49% 28% -95% 251% 26% Higher personnel and administrative cost incurred as Subsea division human infrastructure is built up in preparation of new projects and vessels; higher than normalised level in this quarter 7 vessels were off-hire for the quarter owing to change in deployment strategy Work ongoing on 3 SEUs Increase in line with higher orderbook 2Q12 1Q13 2Q13 chg y-o-y chg q-o-q Comments

Operating Income Non-op Inc/(Exp) Net Interest Inc/(Exp) Assocs' / JV Income Exceptionals Pretax Profit Tax Minority Interests Net Profit Recurring Net Profit Margins (%) Gross Margin EBIT Margin Recurring Net Margin

11.5 7.7 (8.9) 0.4 17.6 28.2 (5.8) 0.0 22.4 4.8

8.5 1.1 (9.3) 8.2 32.0 40.4 (7.4) (3.3) 29.7 (2.4)

(37.4) (5.9) (11.0) 5.8 64.9 16.4 (6.7) (2.5) 7.2 (57.7)

-425% -177% 24% 1551% 269% -42% 15% NM -68% NM

-541% -659% 18% -29% 102% -59% -9% NM -76% NM Better performance and turnaround at associates y-o-y Disposal gain on Ezion shares

16.7% 4.3% 1.8%

17.1% 3.4% -1.0%

0.7% -11.8% -18.2%

Source: Ezra, DBS Vickers

Order wins continue at subsea division. The subsea division EMAS AMC reported order wins of about US$400m across North Sea, West Africa and Gulf of Mexico, including LOIs and options. This takes YTD order wins to about US$1.4bn, above our expectations. Current orderbook stands at about US$1.5bn. However, with most projects requiring long lead times and stretching from 2014 to 2016, near term impact is not significant. We continue to expect another US$1.5bn worth of new subsea contracts in FY14, including projects for its state-of-the-art construction & pipelay vessel, Lewek Constellation.

Total orderbook should stand at about US$2.5bn today. Apart from the order wins secured by EMAS AMC, the offshore chartering division EMAS Marine also announced charter contracts of about US$102m (including options) for 1 PSV and 4 AHTS vessels. Along with the order backlog of about US$265m at Triyards, total orderbook for the Group should be close to US$2.5bn, which implies a decent bookto-bill ratio of about 2.0x. However, despite good revenue visibility on most fronts, the key for Ezra management would be to deliver on the execution front

Page 2

Company Focus Ezra Holdings

Ezra is not alone in this predicament, as other major subsea players like Saipem, Subsea 7 and Aker Solutions have also spoken about rising costs, project delays and challenging operating environment in the North Sea and elsewhere. Recent comments on the back of profit warnings by some of these industry players are outlined below.

But execution is the main concern. Apart from costs associated with certain legacy projects, project delays and other risks associated with offshore EPC contracts will continue to impact Ezras subsea operations in our view. The integration of AMC has taken longer than expected and we rationalize our margin expectations, going forward. Slew of profit warnings from global subsea players this year
Company Saipem Date 14-Jun-2013 Comments

Second profit warning in less than 5 months Expects a net loss of Eur300-350m because of problems in contracts in Algeria, Mexico and Canada

Subsea 7

27-Jun-2013

Warned of missing its 2013 earnings forecast due to cost overruns at Brazil project Forced to rethink Brazil business strategy owing to difficult operating environment

Aker Solutions

29-Apr-2013

Profit warning owing to delays and increased costs on several projects Mostly facing issues in Norway this time Warned that its troubles this year reflected both increased market uncertainty and portfolio sensitivities and order intake in coming quarters was at risk due to recent project cancellations and postponements

Source: Company websites, DBS Vickers

Rising interest rate scenario will also weigh on earnings. Ezra currently has a net gearing ratio of about 1.1x, with more than US$1bn worth of borrowings on its balance sheet, excluding the perpetual securities issue. About 60% of these loans are on a floating rate basis, and while there is no significant refinancing for the fixed rate bonds in issue, we reckon a rising interest rate environment could hurt Ezra significantly, given the narrow operating margins it is likely to enjoy in the near to medium term.

Downgrade to Fully Valued, TP S$0.90. Factoring in low margin visibility and higher interest costs, we now forecast a full year core net loss of US$55m and cut our FY14 net profit forecast by 46% to US$37m. Our SOTP valuation is revised down to S$0.90, based on 0.8x P/BV for Ezras core operations, down from 1.15x P/BV earlier, to account for lower margins and ROEs as well as risks associated with a highly geared balance sheet amidst a potentially rising interest rate environment in future. Downgrade to Full Valued.

Revised SOTP valuation for Ezra

SOTP Valuation Ezra's core businesses (ex Triyards and assocs) Triyards Holdings EOC Ltd Perisai Petroleum Stake 100.0% 67.0% 46.5% 15.0% Value (S$ m) 676.1 145.3 60.2 83.5 965.1 Value per share (S$) 0.63 0.14 0.06 0.08 0.90 % of valuation 70% 6% 15% 9% 100% Basis 0.8x adjusted P/BV Market price 14x recurring FY13F EPS Market price Fully diluted TP

Source: Bloomberg, DBS Vickers

Page 3

Company Focus Ezra Holdings

Key Assumptions
FY Aug 2010A 2011A 2012A 2013F 2014F

Offshore fleet utilisation Day rate (US$/ bhp/ New orders - Yard (US$ New orders - Subsea

94.0 2.0 130.0 N/A

93.0 1.9 121.0 640.0

90.0 1.8 76.5 613.0

93.0 1.8 200.0 1,500.0

95.0 1.8 200.0 1,500.0

Segmental Breakdown
FY Aug 2010A 2011A 2012A 2013F 2014F

Revenues (US$ m) Offshore Support Marine Services Subsea Services

199 134 21

219 160 180

275 157 552

292 175 698

327 185 784

Continued execution of enlarged subsea orderbook

Total Gross Profit (US$ m) Offshore Support Marine Services Subsea Services

354 70 34 1

559 70 38 6

984 52 45 89

1,165 60 38 53

1,296 76 36 132

Total Gross Profit Margins Offshore Support Marine Services Subsea Services

104 35.1 25.0 3.0

114 32.0 24.0 3.1

186 18.9 28.6 16.2

152 20.7 22.0 7.6

244 23.1 19.7 16.8 Operational issues

Total Income Statement (US$ m)

FY Aug

29.4

20.4

18.9

13.1

18.8 Margins Trend

2010A

2011A

2012A

2013F

2014F

Revenue Cost of Goods Sold Gross Profit Other Opng (Exp)/Inc Operating Profit Other Non Opg (Exp)/Inc Associates & JV Inc Net Interest (Exp)/Inc Exceptional Gain/(Loss) Pre-tax Profit Tax Minority Interest Net Profit Net Profit before Except. Preference Dividend Net Pft Pre-Ex, Aft Pref Div EBITDA Growth Revenue Gth (%) EBITDA Gth (%) Opg Profit Gth (%) Net Profit Gth (%) Net Pft Pre-Ex Aft Perf Div Gth (%) Margins & Ratio Gross Margins (%) Opg Profit Margin (%) Net Profit Margin (%) ROAE (%) ROA (%) ROCE (%) Div Payout Ratio (%) Net Interest Cover (x)

354 (250) 104 (46) 58 (1) 13 (12) 22 80 (3) 0 77 54 0 54 81 7.3 (9.5) (26.1) 9.4 (22.3) 29.4 16.3 21.7 13.6 6.4 5.2 12.0 4.9

559 (445) 114 (67) 48 (10) 11 (24) 27 52 (9) 0 43 16 0 16 78 58.1 (4.7) (17.6) (43.8) (70.7) 20.4 8.5 7.7 6.0 2.4 2.6 0.0 2.0

984 (798) 186 (131) 56 10 5 (35) 51 87 (22) 0 65 14 0 14 120 76.0 54.5 17.2 50.7 (10.3) 18.9 5.7 6.6 7.0 2.7 2.0 0.0 1.6

1,165 (1,013) 152 (148) 4 (5) 13 (40) 101 73 (20) (7) 46 (55) (10) (65) 58 18.3 (51.7) (93.2) (29.9) nm 13.1 0.3 3.9 3.5 1.2 0.1 0.0 0.1

1,296 (1,052) 244 (164) 80 0 15 (50) 0 45 (7) (2) 37 37 (11) 26 144 11.3 148.6 2,018.9 (19.5) nm 18.8 6.2 2.8 2.5 0.8 2.5 0.0 1.6

20.0% 15.0% 10.0% 5.0% 0.0% 2010A 2011A 2012A 2013F 2014F
Operating Margin % Net Income Margin %

Relates to disposal of Ezion shares, fair value changes on derivatives, gain on sales on vessels (sale-and-leaseback) and gain on dilution of stake in associates Accrual of dividends on perpetual securities

Source: Company, DBS Vickers

Page 4

Company Focus Ezra Holdings

Quarterly / Interim Income Statement (US$ m)
FY Aug 3Q2012 4Q2012 1Q2013 2Q2013 3Q2013

Revenue Trend
350 300 80% 70% 60% 50% 40% 200 150 100 50 0
1Q2012 2Q2012 3Q2012 4Q2012 1Q2013 2Q2013 3Q2013 2Q2011 3Q2011 4Q2011

Revenue Cost of Goods Sold Gross Profit Other Oper. (Exp)/Inc Operating Profit Other Non Opg (Exp)/Inc Associates & JV Inc Net Interest (Exp)/Inc Exceptional Gain/(Loss) Pre-tax Profit Tax Minority Interest Net Profit Net profit bef Except. Preference Dividend Net Pft (Pre-Ex, Aft Pref Div) EBITDA Growth Revenue Gth (%) EBITDA Gth (%) Opg Profit Gth (%) Net Profit Gth (%) Margins Gross Margins (%) Opg Profit Margins (%) Net Profit Margins (%)

266 (221) 44 (33) 12 8 0 (9) 18 28 (6) 0 22 5 0 5 32

326 (253) 73 (41) 31 (6) 0 (10) 2 18 (11) 0 7 5 0 5 42

279 (229) 50 (33) 17 0 2 (9) 4 14 (6) (1) 7 3 0 3 33

247 (205) 42 (34) 8 1 8 (9) 32 40 (7) (3) 30 (2) 0 (2) 18

317 (315) 2 (40) (37) (6) 6 (11) 65 16 (7) (2) 7 (58) 0 (58) (24)

250

30% 20% 10% 0% -10% -20% -30%

Revenue

Revenue Growth % (QoQ)

Includes US$67m gain on sale of remaining stake in Ezion

25.4 322.4 229.6 1.4 16.7 4.3 8.4

22.9 28.6 172.5 (67.6) 22.3 9.6 2.2

(14.6) (20.0) (46.2) (6.8) 17.9 6.1 2.4

(11.3) (47.0) (49.8) 338.6 17.1 3.4 12.0

28.3 nm nm (75.8) 0.7 (11.8) 2.3

Balance Sheet (US$ m)

FY Aug 2010A 2011A 2012A 2013F 2014F

Asset Breakdown (2012)

Debtors 22.3% Net Fixed Assets 59.1%

Net Fixed Assets Invts in Associates & JVs Other LT Assets Cash & ST Invts Inventory Debtors Other Current Assets Total Assets ST Debt Creditor Other Current Liab LT Debt Other LT Liabilities Shareholders Equity Minority Interests Total Cap. & Liab. Non-Cash Wkg. Capital Net Cash/(Debt) Debtors Turn (avg days) Creditors Turn (avg days) Inventory Turn (avg days) Asset Turnover (x) Current Ratio (x) Quick Ratio (x) Net Debt/Equity (X) Net Debt/Equity ex MI (X) Capex to Debt (%) Z-Score (X)

613 153 149 187 23 206 100 1,431 207 17 142 448 23 593 1 1,431 169 (467) 200.5 21.7 21.1 0.3 1.4 1.1 0.8 0.8 44.1 NA

996 222 281 116 60 302 177 2,152 294 71 260 637 41 848 1 2,152 207 (815) 165.6 38.5 36.4 0.3 1.0 0.7 1.0 1.0 29.9 0.9

1,167 145 368 133 89 439 392 2,734 607 120 300 639 57 1,011 0 2,734 500 (1,112) 137.4 46.6 36.4 0.4 1.0 0.6 1.1 1.1 21.2 0.9

1,304 159 368 368 107 496 392 3,194 437 149 301 1,099 57 1,145 7 3,194 546 (1,167) 146.5 50.8 37.1 0.4 1.5 1.0 1.0 1.0 11.9 1.1

1,361 174 368 293 111 540 392 3,239 437 154 287 1,124 57 1,171 9 3,239 602 (1,267) 145.8 55.1 39.8 0.4 1.5 0.9 1.1 1.1 6.3 1.1

Assocs'/JVs 7.4% Inventory 4.5%

Bank, Cash and Liquid Assets 6.8%

Refinancing short term debt to longer term debt

Includes perpetual securities issued in Sep 2012

Source: Company, DBS Vickers

Page 5

Company Focus Ezra Holdings

Cash Flow Statement (US$ m)

FY Aug 2010A 2011A 2012A 2013F 2014F

Capital Expenditure
350

Pre-Tax Profit Dep. & Amort. Tax Paid Assoc. & JV Inc/(loss) Chg in Wkg.Cap. Other Operating CF Net Operating CF Capital Exp.(net) Other Invts.(net) Invts in Assoc. & JV Div from Assoc & JV Other Investing CF Net Investing CF Div Paid Chg in Gross Debt Capital Issues Other Financing CF Net Financing CF Currency Adjustments Chg in Cash Opg CFPS (US cts.) Free CFPS (US cts.)

80 12 (5) (13) (52) (8) 14 (289) 22 (20) 11 (45) (321) (7) 347 (3) 0 336 (3) 26 9.4 (39.2)

52 29 (12) (11) (88) (13) (44) (278) 9 (17) 0 (49) (335) (9) 200 115 (1) 305 3 (71) 5.1 (37.1)

87 50 (12) (5) (137) (44) (61) (264) 42 (2) 1 (43) (266) 0 251 95 (2) 344 0 17 7.8 (33.2)

73 46 (19) (13) (46) 0 40 (182) 0 0 0 (6) (188) 0 270 0 113 383 0 235 8.8 (14.5)

45 49 (20) (15) (43) 0 16 (99) 0 0 0 (6) (105) 0 25 0 (11) 15 0 (75) 6.0 (8.5)

300 250 200 150 100 50 0 2010A 2011A 2012A 2013F 2014F

Capital Expenditure (-)

Remaining portion of Lewek Constellation plus buyback of some vessels

Perpetual securities

Source: Company, DBS Vickers

Target Price & Ratings History

S$ 1.35 S.No .

2
1.25 1.15 1.05 0.95 0.85 Jul-12

1: 2:

Cl o s i n g Ta rg e t Pri c e Pri c e 06 Dec 12 1.08 1.30 08 Jan 13 1.28 1.30 Da te 15 Jan 13 21 Jan 13 15 Apr 13 1.21 1.17 1.05 1.58 1.58 1.56

R a ti n g Buy Buy Buy Buy Buy

4 3

3: 4: 5:

Nov-12

Mar-13

Not e : Share price and Target price are adjusted for corporate actions.

Source: DBS Vickers

Page 6

Company Focus Ezra Holdings

DBSV recommendations are based an Absolute Total Return* Rating system, defined as follows: STRONG BUY (>20% total return over the next 3 months, with identifiable share price catalysts within this time frame) BUY (>15% total return over the next 12 months for small caps, >10% for large caps) HOLD (-10% to +15% total return over the next 12 months for small caps, -10% to +10% for large caps) FULLY VALUED (negative total return i.e. > -10% over the next 12 months) SELL (negative total return of > -20% over the next 3 months, with identifiable catalysts within this time frame)

Share price appreciation + dividends

DBS Vickers Research is available on the following electronic platforms: DBS Vickers (www.dbsvresearch.com); Thomson (www.thomson.com/financial); Factset (www.factset.com); Reuters (www.rbr.reuters.com); Capital IQ (www.capitaliq.com) and Bloomberg (DBSR GO). For access, please contact your DBSV salesperson.

GENERAL DISCLOSURE/DISCLAIMER This report is prepared by DBS Vickers Research (Singapore) Pte Ltd ("DBSVR"), a direct wholly-owned subsidiary of DBS Vickers Securities (Singapore) Pte Ltd ("DBSVS") and an indirect wholly-owned subsidiary of DBS Vickers Securities Holdings Pte Ltd ("DBSVH"). This report is intended for clients of DBSV Group only and no part of this document may be (i) copied, photocopied or duplicated in any form or by any means or (ii) redistributed without the prior written consent of DBSVR. It is being distributed in the United States by DBSV US, which accepts responsibility for its contents. Any U.S. person receiving this report who wishes to effect transactions in any securities referred to herein should contact DBS Vickers Securities (USA) Inc (DBSVUSA) directly and not its affiliate. The research set out in this report is based on information obtained from sources believed to be reliable, but we (which collectively refers to DBSVR, DBSVS, and/or DBSVH) do not make any representation or warranty as to its accuracy, completeness or correctness. Opinions expressed are subject to change without notice. This document is prepared for general circulation. Any recommendation contained in this document does not have regard to the specific investment objectives, financial situation and the particular needs of any specific addressee. This document is for the information of addressees only and is not to be taken in substitution for the exercise of judgement by addressees, who should obtain separate independent legal or financial advice. DBSVR accepts no liability whatsoever for any direct, indirect and/or consequential loss (including any claims for loss of profit) arising from any use of and/or reliance upon this document and/or further communication given in relation to this document. This document is not to be construed as an offer or a solicitation of an offer to buy or sell any securities. DBSVH is a wholly-owned subsidiary of DBS Bank Ltd. DBS Bank Ltd along with its affiliates and/or persons associated with any of them may from time to time have interests in the securities mentioned in this document. DBSVR, DBSVS, DBS Bank Ltd and their associates, their directors, and/or employees may have positions in, and may effect transactions in securities mentioned herein and may also perform or seek to perform broking, investment banking and other banking services for these companies. Any valuations, opinions, estimates, forecasts, ratings or risk assessments herein constitutes a judgment as of the date of this report, and there can be no assurance that future results or events will be consistent with any such valuations, opinions, estimates, forecasts, ratings or risk assessments. The information in this document is subject to change without notice, its accuracy is not guaranteed, it may be incomplete or condensed and it may not contain all material information concerning the company (or companies) referred to in this report. The valuations, opinions, estimates, forecasts, ratings or risk assessments described in this report were based upon a number of estimates and assumptions and are inherently subject to significant uncertainties and contingencies. It can be expected that one or more of the estimates on which the valuations, opinions, estimates, forecasts, ratings or risk assessments were based will not materialize or will vary significantly from actual results. Therefore, the inclusion of the valuations, opinions, estimates, forecasts, ratings or risk assessments described herein IS NOT TO BE RELIED UPON as a representation and/or warranty by DBSVR, DBSVS and/or DBSVH (and/or any persons associated with the aforesaid entities), that: (a) (b) such valuations, opinions, estimates, forecasts, ratings or risk assessments or their underlying assumptions will be achieved, and there is any assurance that future results or events will be consistent with any such valuations, opinions, estimates, forecasts, ratings or risk assessments stated therein.

Any assumptions made in this report that refers to commodities, are for the purposes of making forecasts for the company (or companies) mentioned herein. They are not to be construed as recommendations to trade in the physical commodity or in the futures contract relating to the commodity referred to in this report. DBS Vickers Securities (USA) Inc ("DBSVUSA")"), a U.S.-registered broker-dealer, does not have its own investment banking or research department, nor has it participated in any investment banking transaction as a manager or co-manager in the past twelve months. Any US persons wishing to obtain further information, including any clarification on disclosures in this disclaimer, or to effect a transaction in any security discussed in this document should contact DBSVUSA exclusively.

ANALYST CERTIFICATION The research analyst primarily responsible for the content of this research report, in part or in whole, certifies that the views about the companies and their securities expressed in this report accurately reflect his/her personal views. The analyst also certifies that no part of his/her compensation was, is, or will be, directly, or indirectly, related to specific recommendations or views expressed in this report. As of 15 Jul 2013, the analyst and his / her spouse and/or relatives who are financially dependent on the analyst, do not hold interests in the securities recommended in this report (interest includes direct or indirect ownership of securities, directorships and trustee positions).

Page 7

Company Focus Ezra Holdings

COMPANY-SPECIFIC / REGULATORY DISCLOSURES DBS Vickers Securities (Singapore) Pte Ltd and its subsidiaries do not have a proprietary position in the company mentioned as 1. of 11 Jul 2013. 2. DBSVR, DBSVS, DBS Bank Ltd and/or other affiliates of DBS Vickers Securities (USA) Inc ("DBSVUSA"), a U.S.-registered brokerdealer, may beneficially own a total of 1% or more of any class of common equity securities of the company mentioned as of 15 Jul 2013. Compensation for investment banking services: i. DBSVR, DBSVS, DBS Bank Ltd and/or other affiliates of DBSVUSA have received compensation, within the past 12 months, and within the next 3 months receive or intends to seek compensation for investment banking services from Ezra Holdings. DBSVUSA does not have its own investment banking or research department, nor has it participated in any investment banking transaction as a manager or co-manager in the past twelve months. Any US persons wishing to obtain further information, including any clarification on disclosures in this disclaimer, or to effect a transaction in any security discussed in this document should contact DBSVUSA exclusively.

3.

ii.

RESTRICTIONS ON DISTRIBUTION General This report is not directed to, or intended for distribution to or use by, any person or entity who is a citizen or resident of or located in any locality, state, country or other jurisdiction where such distribution, publication, availability or use would be contrary to law or regulation. Australia This report is being distributed in Australia by DBSVR and DBSVS, which are exempted from the requirement to hold an Australian financial services licence under the Corporation Act 2001 [CA] in respect of financial services provided to the recipients. DBSVR and DBSVS are regulated by the Monetary Authority of Singapore [MAS] under the laws of Singapore, which differ from Australian laws. Distribution of this report is intended only for wholesale investors within the meaning of the CA. This report is being distributed in Hong Kong by DBS Vickers (Hong Kong) Limited which is licensed and regulated by the Hong Kong Securities and Futures Commission. This report is being distributed in Singapore by DBSVR, which holds a Financial Advisers licence and is regulated by the MAS. This report may additionally be distributed in Singapore by DBSVS (Company Regn. No. 198600294G), which is an Exempt Financial Adviser as defined under the Financial Advisers Act. Any research report produced by a foreign DBS Vickers entity, analyst or affiliate is distributed in Singapore only to Institutional Investors, Expert Investors or Accredited Investors as defined in the Securities and Futures Act, Chap. 289 of Singapore. Any distribution of research reports published by a foreign-related corporation of DBSVR/DBSVS to Accredited Investors is provided pursuant to the approval by MAS of research distribution arrangements under Paragraph 11 of the First Schedule to the FAA. This report is being distributed in the UK by DBS Vickers Securities (UK) Ltd, who is an authorised person in the meaning of the Financial Services and Markets Act and is regulated by The Financial Services Authority. Research distributed in the UK is intended only for institutional clients. This report is being distributed in Dubai/United Arab Emirates by DBS Bank Ltd, Dubai (PO Box 506538, 3 Floor, Building 3, Gate Precinct, DIFC, Dubai, United Arab Emirates) and is intended only for clients who meet the DFSA regulatory criteria to be a Professional Client. It should not be relied upon by or distributed to Retail Clients. DBS Bank Ltd, Dubai is regulated by the Dubai Financial Services Authority. Neither this report nor any copy hereof may be taken or distributed into the United States or to any U.S. person except in compliance with any applicable U.S. laws and regulations. In any other jurisdictions, except if otherwise restricted by laws or regulations, this report is intended only for qualified, professional, institutional or sophisticated investors as defined in the laws and regulations of such jurisdictions. DBS Vickers Research (Singapore) Pte Ltd 12 Marina Boulevard, Level 40, Marina Bay Financial Central Tower 3, Singapore 018982 Tel. 65-6327 2288 Company Regn. No. 198600295W
rd

Hong Kong

Singapore

United Kingdom

Dubai/ United Arab Emirates United States

Other jurisdictions

Page 8