PP 7767/09/2010(025354)

3 June 2010

Malaysia Corporate Highlights

RHB Research
Institute Sdn Bhd
A member of the
RHB Banking Group
Company No: 233327 -M

Sector Upda te
3 June 2010
MARKET DATELINE

Gaming Recom : Overweight

(Maintained)
Singapore Gaming Market – Expanding Despite
Competition

Table 1 : Gaming Sector Valuations

Fair EPS * EPS growth PER P/NTA P/CF GDY
FYE Price value (sen) (%) (x) (x) (x) (%) Rec
(RM/s) (RM/s) FY10 FY11 FY10 FY11 FY10 FY11 FY10 FY10 FY10
Genting Dec 6.79 8.95 53.4 56.4 68.8 5.7 12.7 12.0 2.1 13.6 1.4 OP
B-Toto^ Apr 4.24 4.95 32.4 34.0 5.5 5.0 13.1 12.5 n.m 17.2 5.7 OP
Genting S'pore Dec 1.03 1.35 2.7 3.8 290.8 37.9 37.8 27.4 3.9 10.0 0.0 OP
Genting M'sia Dec 2.72 2.90 21.0 22.4 -13.4 6.8 13.0 12.1 1.4 10.2 2.5 MP
Sector Avg 19.8 6.0 12.9 12.1 2.0
^ FY10-11 valuations refer to those of FY11-12 # Formerly known as Resorts *Normalised

♦ Five key highlights of conference call with Las Vegas Sands. We recently
held a conference call with Las Vegas Sands (LVS) with clients to talk about the Chart 1. Casino sales vs consumer
spending growth
Singaporean gaming market and Marina Bay Sands (MBS) casino’s operations 30.0

so far. These are the key highlights from the conference call: (1) Estimated 25.0

market size in Singapore; (2) Update on MBS’ casino operations; (3)

Operational strategy going forward; (4) Expansion strategy; and (5) Regional
20.0

opportunities.
15.0

♦ US$4bn “natural” gaming market for Singapore. LVS expects a gaming 10.0

market size in Singapore of about US$4bn (or S$5.6bn), which is 40% higher 5.0

than our assumption of S$4bn and consensus estimates which range between 0.0
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010F 2011F

US$2-3.5bn (S$3.5-5bn) in 2011, the first full year of operations for both -5.0

casinos. This is based on a 50:50 split for VIP and mass market and on the co nsumer spending gth casino sales gth

“real, natural” market, excluding junket operators’ additional business volumes. Chart 2. NFO ticket sales vs consumer
spending growth
If Genting Singapore succeeds in bringing in junket operators to its casino, LVS
believes the market size could be considerably bigger than its own already
14.0

12.0

bullish (in our view) estimates. LVS’ assumption is also prefaced on Genting 10.0

Singapore’s stellar operating results in 1QFY10, which if annualised, would bring 8.0

annual gaming revenue to S$2.7bn or US$1.9bn, which is only RWS’ share. 6.0

Although these numbers were recorded at a time when MBS had not opened 4.0

yet, LVS believes that having two casinos would actually serve to enlarge the 2.0

market and not reduce the existing market. This is premised on the current 0.0
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010F 2011F

visitor trend it has seen in MBS since opening as well as the still healthy visitor
-2.0

-4.0

trend seen in RWS, despite no longer operating in a monopolistic situation. co nsumer spending gth NFO ticket sales gth

♦ Bullish view on Singapore gaming market confirmed. All in, we believe the
conference call served to confirm our bullish view on the Singapore gaming PER = 12x
market and Genting Singapore. We believe the market is definitely big enough
for two players and that ultimately, both players serve a different target market, PER = 11x
both having carved their own niche in the market. We believe, however, that as
the market becomes more mature, that both players will have to innovate and PER = 10x
creatively rejig the dynamics of its gaming product as well as its other
attractions, in order to keep casino patrons interested and sustain the flow of
visitors.
♦ Risks include: 1) regulatory changes to gaming policies in the country; 2)
increase in illegal gambling activities; 3) luck factor risks; and 4) potential hike
in gaming taxes.
abc
♦ Investment Case. No change to our forecasts for Genting Singapore and our
Overweight on sector. No change to the recommendations of Outperform for
Genting (FV = RM8.95), Genting Singapore (FV = S$1.35) and BToto (FV = Hoe Lee Leng
KLCI
(603) 92802184
RM4.95); and Market Perform for Genting Malaysia (FV = RM2.90).
hoe.lee.leng@rhb.com.my

Please read important disclosures at the end of this report.

A comprehensive range of market research reports by award-winning economists and analysts are exclusively Page 1 of 7
available for download from www.rhbinvest.com
 3 June 2010

♦ Five key highlights of conference call with Las Vegas Sands. We recently held a conference call with
Las Vegas Sands (LVS) with clients to talk about the Singaporean gaming market and Marina Bay Sands
(MBS) casino operations so far. These are the key highlights from the conference call: (1) Estimated market
size in Singapore; (2) Update on MBS’ casino operations; (3) Operational strategy going forward; (4)
Expansion strategy; and (5) Regional opportunities.

♦ LVS estimates of Singaporean gaming market size larger than consensus… The first item foremost on
investors’ minds when talking about the Singaporean gaming market is the potential size of the market and
the question of whether the market is large enough to support two players who have spent a significant
amount of money on their Integrated Resorts. LVS believes that this will definitely not be a problem, as it
estimates the market size to be at least US$4bn by 2012, based on a 50:50 split for VIP and mass market,
much higher than consensus estimates of US$2-3.5bn. Management emphasises that this market estimate is
based on the “real, natural” market, excluding junket operators’ additional business volumes. If Genting
Singapore succeeds in bringing junket operators to its casino, LVS’ management believes the market size
could be considerably bigger than its own already bullish (in our view) estimates.

♦ ... with bullish outlook reflected in ROI expectations. This bullish outlook, we believe, is reflected in
LVS’ estimated ROI for MBS of 20% versus Genting Singapore’s (GS) more conservative estimate of 15%.
We have calculated the implied Singapore gaming market size based on LVS’ and MBS’ investment cost and
ROI estimates by making several assumptions: (1) For MBS - that 50% of profit comes from the casino and
for RWS – that 70% of profit comes from the casino; (2) Using a net margin assumption of between 15-20%
(as Genting Singapore’s core net profit margin was 17.8% in 1QFY10, while Genting Malaysia’s core net profit
margin is between 25-30%); and (3) Assuming market share between RWS and MBS is 50:50. Using these
assumptions (see Table 2), we estimate that based on MBS’ investment cost and targeted 20% ROI, this
implies a gaming market size of about US$5.7-7.6bn, or about S$7.8-10.4bn. Even at the low end of
S$7.8bn, we note that this is about 30% higher than our gaming revenue assumption for Singapore of S$6bn
in the fifth year of operations in 2015. Similarly for RWS, based on its investment cost and targeted 15%
ROI, this implies a gaming market size of S$6.8-9.2bn, which may be lower than our calculated revenue
based on MBS’ ROI, but still 13% higher than our revenue assumptions in 2015. Nevertheless, we highlight
that it would take both MBS and RWS time to ramp up to full capacity, and we therefore expect earnings to
grow exponentially as the gaming market develops over time.

Table 2: Gaming Market Calculation Based on ROI targets

MBS RWS
Estimated cost (S$bn) 7.8 6.59
Estimated ROI (%) - mgt estimates 20% 15%
Estimated no. of years to ROI 5.0 6.7
Estimated profit per year (S$'bn) 1.56 0.98
Estimated % of profit from gaming 50% 70%
Estimated profit from gaming (S$'bn) 0.78 0.69
Estimated net profit margin from gaming (%) 15-20% 15-20%
Estimated revenue from gaming (grossing up from net profit) - @ 15% net profit margin 5.20 4.61
- @ 20% net profit margin 3.90 3.46

Singapore gaming market assuming 50% market share each S$7.8-10.4bn S$6.8-9.2bn

♦ For now, satisfied with US$4bn market size. At this point in time, management of LVS would be
satisfied with a gaming market size of US$4bn (or S$5.6bn) which, we note is about 40% higher than our
assumption of S$4bn in 2011, the first full year of operations for both casinos. LVS’ assumption is also
prefaced on Genting Singapore’s stellar operating results in 1QFY10, which saw revenues of S$334m from its
Singaporean operations. Given that this was only for 45 days of operations (or half of the quarter) and
assuming the revenue was mainly from the casino operations, this translates to S$7.4m/day of gaming
revenue or US$5.3m/day. Annualising these numbers would bring annual gaming revenue to S$2.7bn or
US$1.9bn, which is only RWS’ share. Although these numbers were recorded at a time when MBS had not
opened yet, LVS believes that having two casinos would actually serve to enlarge the market and not reduce
the existing market. This is premised on the current visitor trend it has seen in MBS since opening (although
management did not disclose what these were), as well as the still healthy visitor trend seen in RWS, despite
no longer operating in a monopolistic situation.

A comprehensive range of market research reports by award-winning economists and analysts are exclusively Page 2 of 7
available for download from www.rhbinvest.com
 3 June 2010

♦ Operational rejigging ongoing, more sustainable numbers only in 4Q2010. Despite the strong 1Q
showing in RWS, in order to be conservative, we have maintained our FY10 gaming revenue assumption of
S$2.9bn for the entire Singapore market, as we have assumed a certain level of cannibalisation to occur after
MBS opened. We believe a more sustainable set of numbers would be seen only after the first six months or
so of operations, i.e. only in 4QFY10. This is to take into account the ramping up of capacity and rejigging of
facilities of both RWS and MBS which is to occur over the next few months. MBS currently has about 70 VIP
tables, 452 mass tables and 1,452 slots open, and management noted that this can be maxed out to about
140 VIP tables, 600-700 mass tables and about 1,800 slots. RWS on the other hand, has about 100 VIP
tables, 200 mass tables and about 1,200 slots open now (see Table 3), and it intends to ramp this up to the
maximum of 500 tables and about 1,500 slots by June 2010, or as and when licences for the
dealers/croupiers are obtained. Additionally, LVS will be rejigging the type of games on offer, by increasing
the number of roulette, blackjack and sic bo games and reducing the number of baccarat games, as well as
putting in more electronic table games as part of its slot capacity, as this has proven to be very popular at
RWS.

Table 3: Resorts World @ Sentosa versus Marina Bay Sands

Resorts World @ Sentosa Marina Bay Sands

Size 49 ha 21 ha

Investment cost S$6.59bn S$7.8bn

Casino opening date 14 Feb 2010 27 April 2010

Key attractions Universal Studios MICE facilities - 120,000 sqm

Quest Marine Life Oceanarium Skypark - 1 ha oasis atop hotel

Maritime Xperential Museum Arts and science museum

Waterfront Promenade - outdoor event plaza

Equarius Water Park
10,000 people capacity

Festive Grand Theatre - 1,600 seats Two theatres - 4, 000 seats

Espa Wellness Sanctuary Banyan Tree Spa (in Marina Bay Sands Hotel)

Hotels 6 hotels with 1,800 rooms 3 hotel towers with 2,560 rooms

Retail 330,000 sq ft of GLA 800,000 sq ft of GLA

Casino Not > 15000 sq m and 2,500 machines Not > 15000 sq m and 2,500 machines
- No VIP tables
100 70-100
(current est)
- No mass tables
300 450
(current est)
- No slots
1,100 1,450
(current est)
Source: Companies, RHBRI

♦ Good VIP market without junkets possible? Based on the revenue numbers so far, management believes
that MBS’ VIP:mass visitor profile is about 48:52 currently, although management noted that the VIP
business is growing healthily and is likely to end up being about 50:50 in terms of revenue breakdown in the
near future. Management believes that even without the help of junkets, it would be able to develop a decent
VIP market in Singapore. Anecdotally, management mentioned that in the first 10 days of operations, it
received 452 credit applications from VIP customers. Out of the VIP applications received so far, the largest
proportion came from Singaporeans (making up 35-45% of total), followed by Malaysians and Indonesians.
In terms of the mass market, management noted that about 33% were Singapore residents. In total, MBS
had received about 2,000 applications for the annual membership already in the first few weeks of
operations. As for RWS, management noted in the last analysts briefing that the split between mass and VIP
is also about 50:50 currently, which is within our expectations. However, we are unable to gauge if this
dynamic will change once junket operators get licenced to RWS, given that RWS expects a few junket
operators to commence operations in 2QFY10.

♦ LVS focused on margins, not market share. While margins for the junket VIP patrons would be lower due
to the higher commission rate of about 1.5%, versus direct VIPs whose direct rebates are about 0.8-1% on
average, we believe GS’ strategy is to balance the risk of taking on more direct VIPs on its own credit by
sacrificing a little profit margin for market share. LVS, on the other hand, has said that its strategy would be

A comprehensive range of market research reports by award-winning economists and analysts are exclusively Page 3 of 7
available for download from www.rhbinvest.com
 3 June 2010

to focus more on margins than market share. In this respect, LVS’ management has stated that it does not
have any issues with taking up the credit risk involved with direct VIPs and would not even mind if RWS gets
60% of the VIP market share, leaving MBS with 40%, as the margins in the direct VIP market is worth the
sacrifice of market share. All in, we have assumed that in the first year of operations in 2010, MBS will garner
about 52% of market share, versus RWS’ 48%, although we expect this to even out to 50:50 within the next
few years.

♦ Table yields to be maximised gradually. In terms of yield strategy, MBS is of the view that it is not
necessary to have a crowded gaming floor to get good yields. Unlike RWS, MBS has at the very start of
operations, opened up significantly more mass tables (+50%) and slots (+32%) than its main competitor. As
a result, anecdotal evidence suggests that the gaming floor (which is legally supposed to be the same size as
RWS, at 15,000 sqm) seems far less crowded and more spacious than RWS. While both RWS and MBS do not
necessarily open up all 400 and 550 tables, respectively, 24 hours a day, given that this is adjusted according
to demand, RWS generally is less “generous” with its table openings. We understand this is RWS’ strategy to
maximise table yield, and so far, we have seen anecdotal evidence of this working out in terms of much
higher minimum table bets than MBS for the same game. MBS’ strategy, however, is to give its patrons a
more comfortable gaming experience, where all patrons are able to play as and when they wish. However,
MBS admits that while this strategy will not see them maximising yield for a while, it believes table yields will
increase gardually over time, especially as they attract more patrons once its other attractions are up and
running.

♦ Full completion of IR only in 2011. Currently, only 38% of a total 2,560 hotel rooms are opened, although
this is already 70-80% occupied. LVS expects to open up 95% of its total hotel room inventory by the end of
this month, while about 25% of its 800,000 sq ft of retail space and the rest of its MICE facilities are also
targeted to be completed and opened by end-June. By Feb 2011, LVS targets to have opened up 100% of its
retail space. Out of its total cost of US$5.7bn, LVS has another US$1.4bn left to spend, which will be done by
2011. Post-2011, LVS expects to only spend a maximum of about US$100m p.a. on maintenance capex.

♦ Talk of cannibalisation and regional expansion opportunities. When queried if there has been any
cannibalisation of its Macau business with the opening of the Singapore casinos, management believes that
this is very minimal, although it noted that it has seen some direct players coming down to Singapore, while
there have also been some Macau junket operators who have come to Singapore to visit the VIP players
here. Nevertheless, it noted that the overall percentage of Chinese players who have come to MBS so far is
very small, while the percentage of South East Asian casino patrons (MBS’ main target market) who play in
Macau is also relatively small, at 6-9% only. In terms of other regional expansion opportunities available,
LVS would only be interested in countries which are relatively big and with a well developed airport, which
would include places like Tokyo, Osaka, Korea, India or Bangkok. The reason for this is so as to enable LVS to
build not just a casino but an IR with MICE facilities, which it believes is its specialty. Given this criteria, it is
unlikely that LVS will expand in a significant manner to any other country soon, unless Japan finally decides
to make good on its intention to open up the gaming industry there.

Risks

♦ Risks. The risks for the industry include: 1) regulatory changes to gaming policies in the country; 2) increase in
illegal gambling activities; 3) luck factor risks; and 4) potential hike in gaming taxes.

Forecasts

♦ Forecasts. No change to our forecasts for Genting Singapore.

Investment case

♦ Conference call sustains bullish view on Singapore gaming market. All in, we believe the conference call
served to confirm our bullish view on the Singapore gaming market and Genting Singapore. We believe the
market is definitely big enough for two players and that ultimately, both players serve a different target market,
both having carved their own niche in the market. We believe, however, that as the market becomes more
mature, both players will have to innovate and creatively rejig the dynamics of its gaming product as well as its

A comprehensive range of market research reports by award-winning economists and analysts are exclusively Page 4 of 7
available for download from www.rhbinvest.com
 3 June 2010

other attractions, in order to keep casino patrons interested and sustain the flow of visitors. We continue to be
positive on GS’ prospects as we believe the strength of the whole package that RWS is offering will drive visitor
numbers and casino patronage strongly at least for the first few years, especially in view of it being a “family”
destination and the novelty factor, while riding on Singapore’s anticipated tourism-led economic recovery. We
maintain our Outperform recommendation on Genting Singapore and our fair value of S$1.35 based on an
unchanged blended average of EV/EBITDA (12x FY11 based on regional average) and DCF methodologies.

♦ Malaysia – slight cannibalisation expected, but no significant impact. In Malaysia, we continue to project
a decline in visitor arrivals in FY10 of -4% yoy, coming from some cannibalisation caused by the Singaporean
IRs, although we expect this impact to be minimal and short term in nature, given the fact that 73% of visitors
to Genting Malaysia (GM) are local Malaysians and daytrippers. We expect FY11 and FY12 to recover to record a
2% p.a. yoy increase in visitor arrivals. In FY10, some cannibalisation has already been seen in the months of
April and May - management noted in the last analysts briefing that there was a slight dip in the grind market
since mid-April (which, incidentally, is when Marina Bay Sands opened), although there was a growth seen in the
VIP market during the same period. Going forward, management expects the VIP business to continue growing
at a faster pace than the grind market in FY10, as we understand MBS is aggressively fighting for grind market
share from Malaysians. We continue to apply a 15% holding company discount to GM’s SOP valuation to obtain
our fair value of RM2.90, taking into the weak investor sentiment surrounding the stock due to corporate
governance risk and the lack of additional capital management from its abundant cash hoard. Maintain Market
Perform for Genting Malaysia.

♦ Prefer Genting to Genting Malaysia. We prefer Genting over Genting Malaysia, as we expect potential
earnings contribution from the Singaporean IR’s to continue to be the kicker, while any slowdown in domestic
casino earnings would be buffered by its plantations and power divisions. Genting’s earnings growth in 2010
would be mainly spearheaded by its Malaysian casino (Genting Malaysia – 40-45% contribution); Singaporean
casino (Genting Singapore – 30-35% contribution); power and oil and gas divisions (5-10% contribution); and
plantations and property divisions (Genting Plantations - 10-15% contribution). We maintain our Outperform
recommendation and our SOP-based fair value of RM8.95/share on Genting.

♦ Maintain Overweight on sector. No change to our Overweight stance on the sector.

Table 4. Valuation Bases

Target Price
Company Valuation Methodology
(RM/share)
Genting 2.90 SOP calculation comprising:
Malaysia o DCF value for gaming operations (WACC 9.9%, terminal growth rate 3%)
o market price for stake in Star Cruise; and
o net cash (end-1Q10)

Genting 8.95 20% discount for holding company status and corporate governance risk applied to SOP calculation
comprising:
o fair value of RM2.90/share for stake in Genting Malaysia;
o fair value of RM6.65/share for stake in Genting Plantations;
o fair value of S$1.35/share for stake in Genting Singapore;
o DCF value for management fees (WACC 10.1%, terminal growth rate 3%);
o 30% discount (to factor difference in concession period) to US$0.94 EV per effective MW
(price paid for Meizhou) for power division;
o 20% discount to sector average PER of 15x CY10 for oil & gas division;
o Genting’s share of profit for Tangguh concession;
o market price for stake in Landmarks; and
o net cash/(debt) ex-Genting Malaysia and Genting Singapore (end-1QFY10)

Genting S$1.35 Blended average of EV/EBITDA (12x FY11 based on regional average) and SOP methodologies.
Singapore SOP comprises:
o DCF value for gaming operations in UK (WACC 8.7%, terminal growth rate 2%);
o DCF value for gaming operations in Singapore (WACC of 8.4%, terminal growth 2%);
o Sales & Marketing & IT operations at average PER of 12x CY10
o Market price for stake in Rank Plc; and
o net cash/(debt) at end-1Q10

BToto 4.95 DCF valuation based on WACC of 9.8% and terminal growth rate of 3%

Source: RHBRI

A comprehensive range of market research reports by award-winning economists and analysts are exclusively Page 5 of 7
available for download from www.rhbinvest.com
 3 June 2010

Table 5 : Global Peer Comparison

Company FYE Price * Currency PER (x) # EV/EBITDA (x) P/NTA (x)
FY10f FY11f FY10f FY11f FY10f FY11f
Genting Singapore Dec 1.03 SG$ 37.8 27.4 19.6 13.8 3.9 3.4

MGM Mirage Dec 12.17 US$ n/a n/a 15.2 12.3 1.6 1.8
Las Vegas Sands Dec 23.02 US$ 65.8 32.4 14.6 11.3 3.3 2.5
Wynn Resorts Dec 81.53 US$ 74.8 48.0 12.1 10.3 2.4 2.1
Melco Crown Dec 4.43 US$ n/a n/a 11.7 10.3 0.9 1.0
US Average 70.3 40.2 13.4 11.0 2.0 1.8

Crown Ltd Jun 7.83 A$ 21.2 16.3 10.1 9.1 1.7 1.7
Tabcorp Jun 6.65 A$ 8.3 8.3 5.8 5.6 1.2 1.1
Aust Average 14.7 12.3 7.9 7.4 1.5 1.4

Melco Int Dec 3.10 HK$ n/a 18.2 29.3 29.1 0.5 0.6
SJM Dec 5.56 HK$ 12.9 10.9 6.8 5.6 2.9 2.5
Galaxy Dec 3.62 HK$ 32.9 19.1 14.8 8.8 1.7 1.5
Wynn Macau Dec 12.48 HK$ 20.8 18.1 14.7 12.2 11.6 7.2
Sands China Dec 11.04 HK$ 28.5 28.5 14.3 12.7 2.9 2.6
Macau Average 23.8 18.9 16.0 13.7 3.9 2.9

Simple Average
- US, Aust & Macau ^ 33.1 22.2 13.6 11.6 3.0 2.5

Resorts Dec 2.72 RM 13.1 12.5 5.7 4.9 1.4 1.3

Genting Dec 6.79 RM 12.7 12.0 4.7 3.7 2.1 1.8
Malaysia average 12.9 12.3 5.2 4.3 1.8 1.6

# Cells with n/a indicate the company is projected to record losses

* In respective currencies @ 1 June 2010
^ Simple averages exclude outliers

Source: IBES Consensus & RHBRI

IMPORTANT DISCLOSURES

This report has been prepared by RHB Research Institute Sdn Bhd (RHBRI) and is for private circulation only to clients of RHBRI and RHB Investment Bank Berhad
(previously known as RHB Sakura Merchant Bankers Berhad). It is for distribution only under such circumstances as may be permitted by applicable law. The
opinions and information contained herein are based on generally available data believed to be reliable and are subject to change without notice, and may differ or be
contrary to opinions expressed by other business units within the RHB Group as a result of using different assumptions and criteria. This report is not to be
construed as an offer, invitation or solicitation to buy or sell the securities covered herein. RHBRI does not warrant the accuracy of anything stated herein in any
manner whatsoever and no reliance upon such statement by anyone shall give rise to any claim whatsoever against RHBRI. RHBRI and/or its associated persons may
from time to time have an interest in the securities mentioned by this report.

This report does not provide individually tailored investment advice. It has been prepared without regard to the individual financial circumstances and objectives of
persons who receive it. The securities discussed in this report may not be suitable for all investors. RHBRI recommends that investors independently evaluate
particular investments and strategies, and encourages investors to seek the advice of a financial adviser. The appropriateness of a particular investment or strategy
will depend on an investor’s individual circumstances and objectives. Neither RHBRI, RHB Group nor any of its affiliates, employees or agents accepts any liability for
any loss or damage arising out of the use of all or any part of this report.

RHBRI and the Connected Persons (the “RHB Group”) are engaged in securities trading, securities brokerage, banking and financing activities as well as providing
investment banking and financial advisory services. In the ordinary course of its trading, brokerage, banking and financing activities, any member of the RHB Group
may at any time hold positions, and may trade or otherwise effect transactions, for its own account or the accounts of customers, in debt or equity securities or loans
of any company that may be involved in this transaction.

“Connected Persons” means any holding company of RHBRI, the subsidiaries and subsidiary undertaking of such a holding company and the respective directors,
officers, employees and agents of each of them. Investors should assume that the “Connected Persons” are seeking or will seek investment banking or other
services from the companies in which the securities have been discussed/covered by RHBRI in this report or in RHBRI’s previous reports.

This report has been prepared by the research personnel of RHBRI. Facts and views presented in this report have not been reviewed by, and may not reflect
information known to, professionals in other business areas of the “Connected Persons,” including investment banking personnel.

The research analysts, economists or research associates principally responsible for the preparation of this research report have received compensation based upon
various factors, including quality of research, investor client feedback, stock picking, competitive factors and firm revenues.

The recommendation framework for stocks and sectors are as follows : -

Stock Ratings

Outperform = The stock return is expected to exceed the FBM KLCI benchmark by greater than five percentage points over the next 6-12 months.

Trading Buy = Short-term positive development on the stock that could lead to a re-rating in the share price and translate into an absolute return of 15% or more
over a period of three months, but fundamentals are not strong enough to warrant an Outperform call. It is generally for investors who are willing to take on higher
risks.

Market Perform = The stock return is expected to be in line with the FBM KLCI benchmark (+/- five percentage points) over the next 6-12 months.

Underperform = The stock return is expected to underperform the FBM KLCI benchmark by more than five percentage points over the next 6-12 months.

Industry/Sector Ratings

Overweight = Industry expected to outperform the FBM KLCI benchmark, weighted by market capitalisation, over the next 6-12 months.

Neutral = Industry expected to perform in line with the FBM KLCI benchmark, weighted by market capitalisation, over the next 6-12 months.

A comprehensive range of market research reports by award-winning economists and analysts are exclusively Page 6 of 7
available for download from www.rhbinvest.com
 3 June 2010

Underweight = Industry expected to underperform the FBM KLCI benchmark, weighted by market capitalisation, over the next 6-12 months.

RHBRI is a participant of the CMDF-Bursa Research Scheme and will receive compensation for the participation. Additional information on recommended securities,
subject to the duties of confidentiality, will be made available upon request.

This report may not be reproduced or redistributed, in whole or in part, without the written permission of RHBRI and RHBRI accepts no liability whatsoever for the
actions of third parties in this respect.

A comprehensive range of market research reports by award-winning economists and analysts are exclusively Page 7 of 7
available for download from www.rhbinvest.com