Kingsmen Creatives Ltd

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July 15, 2009 See important disclosures at the end of this publication 1 OSK Research DMG Research SINGAPORE EQUITY Investment Research Initial Coverage Private Circulation Only INDUSTRIES BUY Initiate Price S$0.56 Lynette Tan +65 6232 3895 [email protected] KINGSMEN CREATIVES Target S$0.71 Terence Wong, CFA +65 6232 3896 [email protected] Strong orders backed by multiple drivers Stock Profile/Statistics Bloomberg Ticker KMEN SP STI 2,310.55 Issued Share Capital (m) 194.18 Market Capitalisation (S$m) 108.74 52 week H | L Price (S$) 0.56 0.29 Average Volume (3m) ‘000 253.76 YTD Returns (%) 67.16 Net gearing (x) Net cash Altman Z-Score 3.56 ROCE/WACC 4.52 Beta (x) 0.54 Book Value/share (S¢) 24.18 Major Shareholders Islanda Pte Ltd 19.57 O-vest Pte Ltd 19.57 Share Performance (%) Month Absolute Relative 1m 34.9 35.2 3m 69.7 47.9 6m 67.2 36.2 12m 40.0 60.4 0.20 0.25 0.30 0.35 0.40 0.45 0.50 0.55 0.60 Jan-09 Feb-09 Mar-09 Apr-09 May-09 Jun-09 S$ 6-month Share Price Performance We are initiating coverage on Kingsmen Creatives, with a BUY recommendation and target price of S$0.71. Prospects look good as the impending opening of the two Integrated Resorts (IR) in Singapore and the revamp of Orchard Road has sparked a makeover drive by several mid- to high-end retail brands, despite the economic recession. The upcoming major events in the region (such as Shanghai World Expo and Youth Olympic Games, both in 2010) also opened up doors of opportunities for Kingsmen. With its capabilities, Kingsmen is positioned to ride on this wave over the next two years and grow its business. As one of the few in the region to venture into thematic and scenic construction, it is likely to lead to new platforms of growth for Kingsmen. Kingsmen has been paying out dividends consistently since listing, and currently boasts a yield of 5.4%. Prospects look good. Retail outlets in Singapore have been carrying out refurbishment plans, in order to be ready for the well-heeled shoppers that are expected, when the IRs open and the economy recovers. Besides Singapore, its customers have also engaged Kingsmen to renovate their outlets in the region. As a provider of interiors and fixtures for commercial space, this is a positive development for Kingsmen. With Kingsmen’s capabilities in providing fixtures for exhibitions, museums and events, it is likely to be involved behind the scenes for the major exhibitions and events that will be taking place over the next two years. Thematic works is another growth area. Kingsmen had secured a contract relating to Universal Studios, for its theme park in Sentosa. With this project, Kingsmen will be well-positioned to bid for future theme-park projects in the region, thereby providing more impetus for growth. Healthy dividend yield and balance sheet. Although it has no fixed dividend policy, Kingsmen has been paying about 40% of earnings. Assuming the same dividends per share in FY09 as in FY08, the potential dividend yield is 5.4%. Balance sheet is also strong with a net cash position of S$26.1m (13.4 S¢ per share) at end 1Q09. Source: Company and DMG Estimates FYE 31 Dec (S$m) FY06 FY07 FY08 FY09F FY10F Turnover 108.9 145.9 190.6 222.5 247.7 Net Profit 4.9 9.4 14.2 14.7 16.9 % chg YoY 125.2% 89.7% 51.4% 3.5% 15.1% EPS (S¢) 4.9 7.9 7.5 7.5 8.2 DPS (S¢) 2.0 3.0 3.0 3.0 3.0 Div Yield 3.6% 5.4% 5.4% 5.4% 5.4% ROE 29.7% 34.5% 36.1% 31.1% 29.6% ROA 9.7% 11.9% 13.6% 12.4% 12.4% P/E (x) 11.5 7.1 7.5 7.4 6.5 P/B (x) 3.0 1.9 2.4 2.0 1.7

Transcript of Kingsmen Creatives Ltd

Page 1: Kingsmen Creatives Ltd

July 15, 2009

See important disclosures at the end of this publication 1

OSK Research DMG Research

SINGAPORE EQUITYInvestment Research

Initial Coverage Private Circulation Only

INDUSTRIES

BUY Initiate

Price S$0.56

Lynette Tan +65 6232 3895 [email protected]

KINGSMEN CREATIVES Target S$0.71

Terence Wong, CFA +65 6232 3896 [email protected]

Strong orders backed by multiple drivers

Stock Profile/Statistics

Bloomberg Ticker KMEN SP STI 2,310.55 Issued Share Capital (m) 194.18 Market Capitalisation (S$m) 108.74 52 week H | L Price (S$) 0.56 0.29 Average Volume (3m) ‘000 253.76 YTD Returns (%) 67.16 Net gearing (x) Net cash Altman Z-Score 3.56 ROCE/WACC 4.52 Beta (x) 0.54 Book Value/share (S¢) 24.18 Major Shareholders Islanda Pte Ltd 19.57 O-vest Pte Ltd 19.57 Share Performance (%) Month Absolute Relative 1m 34.9 35.2 3m 69.7 47.9 6m 67.2 36.2 12m 40.0 60.4

0.20

0.25

0.30

0.35

0.40

0.45

0.50

0.55

0.60

Jan-09 Feb-09 Mar-09 Apr-09 May-09 Jun-09

S$

6-month Share Price Performance

We are initiating coverage on Kingsmen Creatives, with a BUY recommendation and target price of S$0.71. Prospects look good as the impending opening of the two Integrated Resorts (IR) in Singapore and the revamp of Orchard Road has sparked a makeover drive by several mid- to high-end retail brands, despite the economic recession. The upcoming major events in the region (such as Shanghai World Expo and Youth Olympic Games, both in 2010) also opened up doors of opportunities for Kingsmen. With its capabilities, Kingsmen is positioned to ride on this wave over the next two years and grow its business. As one of the few in the region to venture into thematic and scenic construction, it is likely to lead to new platforms of growth for Kingsmen. Kingsmen has been paying out dividends consistently since listing, and currently boasts a yield of 5.4%. Prospects look good. Retail outlets in Singapore have been carrying out refurbishment plans, in order to be ready for the well-heeled shoppers that are expected, when the IRs open and the economy recovers. Besides Singapore, its customers have also engaged Kingsmen to renovate their outlets in the region. As a provider of interiors and fixtures for commercial space, this is a positive development for Kingsmen. With Kingsmen’s capabilities in providing fixtures for exhibitions, museums and events, it is likely to be involved behind the scenes for the major exhibitions and events that will be taking place over the next two years. Thematic works is another growth area. Kingsmen had secured a contract relating to Universal Studios, for its theme park in Sentosa. With this project, Kingsmen will be well-positioned to bid for future theme-park projects in the region, thereby providing more impetus for growth. Healthy dividend yield and balance sheet. Although it has no fixed dividend policy, Kingsmen has been paying about 40% of earnings. Assuming the same dividends per share in FY09 as in FY08, the potential dividend yield is 5.4%. Balance sheet is also strong with a net cash position of S$26.1m (13.4 S¢ per share) at end 1Q09.

Source: Company and DMG Estimates

FYE 31 Dec (S$m) FY06 FY07 FY08 FY09F FY10F Turnover 108.9 145.9 190.6 222.5 247.7

Net Profit 4.9 9.4 14.2 14.7 16.9

% chg YoY 125.2% 89.7% 51.4% 3.5% 15.1%

EPS (S¢) 4.9 7.9 7.5 7.5 8.2

DPS (S¢) 2.0 3.0 3.0 3.0 3.0

Div Yield 3.6% 5.4% 5.4% 5.4% 5.4%

ROE 29.7% 34.5% 36.1% 31.1% 29.6%

ROA 9.7% 11.9% 13.6% 12.4% 12.4%

P/E (x) 11.5 7.1 7.5 7.4 6.5

P/B (x) 3.0 1.9 2.4 2.0 1.7

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OSK Research DMG Research

TABLE OF CONTENTS

About the Company 3

Investment Merits 5

Earnings Forecast 7

Valuation / Recommendation 8

Financial Tables 9

Appendix 1: List of customers 10

Appendix 2: Kingsmen’s works 11

Disclaimer 14

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About the Company

Background Kingsmen Creatives is a communications design and production group in Asia Pacific. It was established in 1976 and has since then been a leading provider of integrated marketing solutions with 16 offices in the Asia Pacific and Middle East. The group covers four activities, Exhibitions & Museums, Interiors, Integrated Marketing Communications, and Research & Design. Kingsmen’s total solutions approach today is supported by associates worldwide and more than 1,000 staff. Business segments Exhibitions & Museums - Produces exhibition displays for trade shows and promotional events, as well as interiors and displays for museums and visitor centres Kingsmen offers a comprehensive range of services including Design, Project Management and Construction of single and double-storey stands, national pavilions, custom-built modular booths, thematic exhibitions, hospitality suites and special events like roadshows, conferences and sporting events. Together with its affiliates, it provides temporary installations and displays for trade shows, promotional events and festivities throughout Asia Pacific and the Middle East regions. Interiors - Provides interiors fitting-out services to commercial and retail properties (corporate offices, department stores, eateries / restaurants, retail environment, specialty stores). Kingsmen has carved a niche in the mid- and high-end of the retail industry by providing turnkey solutions in Design, Project Management, Roll-out Management, Custom Fixture Manufacturing, General Contracting, Outsourcing & Fulfillment, Warehousing and Logistics Management. This is supported by its large production facilities (one of the largest in Asia). Some of its client relationships have continued for over 10 years. It also offers corporate office and showroom design and fit-out services to large MNCs. Integrated Marketing Communication - Provides event management and branding consultancy services. This complements its business in exhibitions and interiors and provides value-added services. Kingsmen also provides electrical engineering and graphic design services; and advertising and marketing communication services, as well as operates as a sign board contractor. It provides Out-of-Home (OOH) Media services, which focuses on delivering integrated OOH advertising & media solutions, including market analysis, planning, recommendation and campaign monitoring in both local and foreign markets. It aims to help its clients and advertising agencies determine optimal outdoor advertising platforms complete with research and analytical support. Research and Design - Supporting the Exhibitions & Museums and Interiors divisions. Its design capabilities cover up-market specialty stores, eateries, museums, corporate offices, trade shows and promotional events.

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Global network

Figure 1: International network

Source: Company

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INVESTMENT MERITS

Strong orderbooks in FY09, despite economic downturn. Kingsmen’s revenue largely comes from Exhibitions & Museums and Interiors (corporate offices or retail outlets). As at end May 09, its orderbooks stood at S$167m. Of this, S$147m is expected to be delivered in FY09. Included in this orderbook are high-end interior fit out projects at ION Orchard and 313 @ Somerset, thematic and scenic construction works for Universal Studios and the second year of the F1 Singapore Grand Prix. If we include other fit-outs or maintenance works from its regular retailer customers (such as Tiffany & Co, Chanel, Burberry, Tag Heuer), FY09 revenue is likely to grow by over 16.8% YoY to S$222.5m. Orchard Road revamp opens up potential for Interiors segment. Orchard Road has been undergoing a revamp, with several malls under renovation or construction. Along with the renovations of the malls, retail outlets inside the malls will also be doing their own refurbishment to match the exterior renovations. New shopping malls will bring along new retail outlets. This presents many opportunities for Kingsmen to secure contracts from retail brands to do the interior fit outs for their retail outlets. While Kingsmen has already secured some of such contracts, there is still good potential for more contracts as retail outlets renovate to attract more shoppers. Demand for prime retail space in Singapore is still relatively healthy. This could be bolstered by the impending opening of the IR, which is expected to bring in high-rollers and more tourists. Global brands would be looking to set up shop in the revamped Orchard Road shopping belt. This would be a positive for Kingsmen, as it provides interior fitting-out services to commercial and retail properties. Expects to secure contracts from its regular customers, when they set up retail shops at the Marina Bay Sands IR, which is expected to open in early FY10. With its expertise in handling major exhibition events and its close working relationship with its high-end retail customers, Kingsmen is optimistic in securing these projects. It not only carries out interior fit-outs for its customers with shop fronts in Singapore, but also across Asia. This would not only boost Kingsmen’s relationship with its customers, but also its regional footprint. Successful foray into Theme Park business opens up opportunities for other similar projects. Kingsmen had secured contracts worth over S$80m, relating to Universal Studios, for its theme park in Sentosa. The bulk of these contracts would be completed in 2009, giving FY09 revenue a boost. It will embark on Phase 2 of the Universal Studios project in FY10. With the Universal Studios project, Kingsmen will become the first in the region with the capability to carry out thematic and scenic construction for theme parks. This places Kingsmen in a good position to bid for future theme park projects in the region. Potential projects include the Universal Studios theme parks in Dubai, Beijing and South Korea. Major events in 2010 would help drive revenue growth in FY10. Kingsmen is in talks to secure projects with some participants of the Shanghai World Expo 2010. The inaugural 2010 Youth Olympic Games to be held in Singapore also provides opportunities for Kingsmen to secure more projects to grow its exhibitions and museums business. Other projects would include the third year of the F1 Singapore Grand Prix and Phase 2 of the Universal Studios project. Kingsmen had secured a $25m contract for the F1 Singapore Grand Prix, to cover the five years that the F1 race will be held in Singapore. Rising outsourcing trend from the US and Europe. Kingsmen secured orders from retail customers in the US and Europe (such as Aldo, Apple, Coach, Tag Heuer), to provide fixtures for their shops in the US and Europe. Kingsmen will produce these fixtures, pack and send to customers in the US and Europe. Customers will install the fixtures. As the outsourcing trend for such fixtures continues to grow, in light of the need to lower costs, the fixtures export business would provide Kingsmen with a steady and growing revenue stream.

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Revenue stream is not all lumpy. With its capabilities and expertise, Kingsmen has managed to secure repeat customers for its interior fit-out business. About 70% of revenue from the Interiors segment is recurring (about 30% of Group revenue). This provides some stability in Kingsmen’s revenue stream.

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EARNINGS FORECAST

Good growth in FY09 revenue, despite the gloomy economic climate. We are assuming revenue growth of 25% from the Exhibitions & Museum segment, boosted by the Universal Studios project. The refurbishment of Orchard Road and the opening of the new malls are expected to boost revenue growth from the Interiors segment by 10%. We estimate Kingsmen to achieve revenue of S$222.5m in FY09. However, margins in FY09 are likely to be lower than previous year (net margin: 6.6% in FY09 vs 7.4% in FY08), dragged down by the relatively lower margins from a big project this year. We are estimating earnings of S$14.7m (EPS: 7.5 S¢) for FY09. Pipeline of major events to provide support for continued revenue growth. On the back of a pipeline of major exhibitions coming up in 2010, we are estimating revenue to reach S$247.7m in FY10. Assuming stable margins, we estimate net profit of S$16.9m (EPS: 8.7 S¢) in FY10.

Relatively stable margins. About two-thirds of the Groups business is expected to come from outside Singapore. Greater China is expected to be the largest, where Kingsmen does interior fit-outs for global brands such as Burberry and Ralph Lauren. With its presence in China, Kingsmen is also involved in smaller trade shows that are held in China. Margins from projects in Greater China are generally higher than projects in Singapore. Hence, with a growing proportion of business coming from Greater China, we can expect margins to be relatively stable. RISKS TO FORECAST Kingsmen’s business is largely event driven. While it can still secure interior fit-out projects from its regular mid- to high-end retail customers through maintenance works, the lack of a major exhibition event could dampen revenue growth. Customer defaults or delays in payment can adversely affect operations. Delays in payment by customers can have a negative impact on Kingsmen’s cash flows and its operations.

Figure 2: Revenue by segment

YE 31 Dec (S$m) 2007 2008 2009F 2010F

Exhibitions and Museums 50.3 90.2 112.7 129.6 Interiors 87.9 88.7 97.6 104.9

Research and Design 4.3 5.9 6.2 6.6 Integrated Marketing Communications 3.4 5.8 6.1 6.6

145.9 190.6 222.5 247.7 Source: Bloomberg, Company and DMG Estimates

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VALUATION / RECOMMENDATION

Healthy dividend yield. While it has no fixed dividend policy, management has indicated that it would be able to pay out the same dividend in FY09 as it did in FY08 (3.0 S¢ per share). This translates into a healthy dividend yield of 5.4%. Kingsmen’s balance sheet is also healthy, with a net cash position of S$26.1m (13.4 S¢ per share) at end 1Q09. We are expecting that Kingsmen continues to remain in a healthy net cash position, going forward. Valuation appears attractive. We compare Kingsmen with listed companies in similar business, namely HK-listed Pico Far East Holdings (Pico) and SGX-listed Cityneon Holdings. Pico is currently trading at 10x P/E, while Cityneon (currently suspended, pending a takeover) has historically traded at a range of between 8x and 12x P/E. It was acquired by Malaysia-based Star Publications at S$0.61, pricing it at 12.8x P/E. Hence, we think that Kingsmen should be trading at a P/E closer to that of its peers, given its better operating margin and ROE. We note that Pico’s business includes organising exhibitions, conferences and providing hall management services, which Kingsmen is not involved in. Ascribing a P/E of 9x, we arrive at a 12-month target price of S$0.71, based on blended FY09/10 earnings. This presents a potential upside of 27%. We initiate coverage with a BUY recommendation.

Figure 3: Peer comparison

Price Op Margin ROE

Company (S$) 2008 2009F 2010F (%) (%)

Pico Far East HK$1.07 7.9 10.1 8.2 7.7 20.6

Cityneon* N.A. N.A. N.A. N.A. 6.4 11.8Kingsmen 0.505 6.9 6.7 6.1 9.8 36.1

P/E (x)

* Trading in Cityneon has been suspended since Nov 08, pending a takeover of the company. Source: Bloomberg, Company and DMG Estimates

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Year End 31 Dec (S$m)

Income Statement Cash Flow 2007 2008 2009F 2010F 2007 2008 2009F 2010F

Revenue 145.9 190.6 222.5 247.7 Profit Before Taxation 12.5 19.0 19.5 22.2 Cost of sales (106.2) (132.0) (156.5) (173.6) Non-cash items 1.5 5.2 4.1 4.1 Other Operating Income 2.5 2.7 3.3 3.7 Changes in Working Capital 0.4 3.8 (8.7) (2.4) Depreciation (1.7) (2.1) (2.4) (2.7) Income Tax Paid (1.9) (2.2) (4.9) (3.5) Salaries and related costs (20.5) (29.9) (35.6) (39.6) Interest Paid (0.1) (0.2) (0.1) (0.1) Other operating expenses (7.8) (10.5) (12.2) (13.6) Interest Received 0.3 0.1 0.2 0.2 Financial income, net 0.2 (0.0) 0.0 0.1 Net cash from operations 12.7 25.7 10.0 20.5 Share of Associates 0.2 0.3 0.3 0.3 Profit Before Taxes 12.5 19.0 19.5 22.2 Purchase of Fixed Assets (0.8) (11.2) (2.0) (4.0) Income Tax Expense (2.3) (3.5) (3.5) (4.0) Proceeds from Sale of Assets 0.0 0.7 - - Minority Interest (0.9) (1.3) (1.3) (1.3) Others (8.0) (0.7) 1.1 - Net Income 9.4 14.2 14.7 16.9 Dividends Received - 0.1 - - Net cash from investments (8.7) (11.1) (0.9) (4.0)

Balance Sheet Dividends Paid (2.5) (6.9) (5.8) (5.8) 2007 2008 2009F 2010F Proceeds from Issue of Shares 8.8 1.6 - -

Proceeds from/(Repayment of) Loan (2.3) (0.7) (0.1) (0.1)

Fixed Assets 4.6 12.2 10.6 11.0 Others 0.3 (1.9) 0.0 0.0 Intangibles 8.4 6.8 6.9 6.7 Net cash from financing 4.2 (7.9) (5.9) (5.9)

Interests in Associates 6.0 6.2 6.2 6.2 Net increase / (decrease) in cash 8.3 6.7 3.2 10.6

Others 1.4 1.9 0.8 0.8 Cash (beginning) 12.9 21.1 27.9 31.1 Non-Current Assets 20.3 27.1 24.5 24.6 Cash (end) 21.1 27.9 31.1 41.7 Inventories 0.1 0.0 0.0 0.1

Contracts Work-in Progress 2.9 7.6 11.1 14.9 Receivables 54.3 46.3 60.0 63.4 Ratios

Cash and Cash Equivalents 21.5 28.2 31.1 41.7 2007 2008 2009F 2010F Current Assets 78.8 82.2 102.2 120.0 Growth & Margin (%) Revenue Growth 33.9 30.6 16.8 11.3 Total Assets 99.1 109.3 126.7 144.6 EBIT Growth 108.0 54.2 2.2 13.9 EBIT Margin 8.3 9.8 8.6 8.8 Share Capital 21.6 23.3 23.3 23.4 Pretax Profit Growth 105.3 51.3 2.6 14.0 Treasury Shares - (1.9) (1.9) (1.9) Pretax Profit Margin 8.6 10.0 8.7 9.0 Reserves 14.2 21.3 30.1 41.2 Tax rate 18.3 18.6 18.0 18.0 Shareholders Fund 35.8 42.7 51.6 62.7 Net Income Growth 89.7 51.4 3.5 15.1 Minority Interest 1.6 2.7 2.8 2.8

Shareholders Equity 37.4 45.4 54.4 65.5 *Including exceptional items Loan and Borrowings 0.8 0.6 0.5 0.5 Others - 0.1 - - Deferred Tax Liabilities 0.8 0.9 0.7 0.9

Non-Current Liabilities 1.6 1.6 1.2 1.4 Payables 46.7 50.4 60.4 65.7 Revenue Breakdown

Interest-bearing Borrowings 0.9 0.8 0.8 0.8 2007 2008 2009F 2010F Contracts Work-in Progress 6.0 2.9 4.5 5.0 Exhibitions and Museums 50.3 90.2 112.7 129.6 Income Taxes Payable 3.7 4.9 3.5 4.0 Interiors 87.9 88.7 97.6 104.9 Deferred income 2.9 3.2 2.0 2.3 Research and Design 4.3 5.9 6.2 6.6

Current Liabilities 60.1 62.3 71.1 77.7 Integrated Marketing Communications 3.4 5.8 6.1 6.6

Total 145.9 190.6 222.5 247.7

Total Liabilities 61.7 63.8 72.4 79.1

Total Equity and Liabilities 99.1 109.3 126.7 144.6 Source: Company and DMG estimates

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Appendix 1: List of customers

Source: Company

Exhibitions

Tradeshows

ABN Amro Nokia National Day Parade

ADC Telecommunications Nortel Networks NikeAgilent Technologies NTT Group PGA Golf

Apple Computer Olympus Rotary InternationalBell Helicopter Asia Opel SIA

Bloomberg LP Osim Sunshine BakeriesBoeing Panasonic The Hour Glass

British Aerospace Peugeot Walt Disney RoadshowCarlsberg Pfizer Yamaha

Chevrolet SamsungCISCO Shell Chemicals Museum & Visitor Centres

DSTA Singapore Technologies Aviation GalleryEDB Singapore Tourism Board August 1st Film Studio Heritage Gallery

Ericsson Singtel Changi Chapel & Museum, SingaporeEurocopter Sony China National Film Museum

Ford Suzuki Faces of Malaysia GalleryFuji Xerox Tax Free World Association iSpace, Singapore Science Centre

GE Digital Volvo Truck Corp Malay Heritage CentreHeidelberg Asia Webzen National Museum of Singapore

Hewlett Packard JTC Visitor CentreHumax Petrosains Discovery Centre

IBM Singapore Events Reflections at Bukit ChanduIDA Bang & Olufsen Singapore Discovery Centre

IE Singapore BMW Singapore Philatelic MuseumIntel Group BP Stories of the Sea, Sentosa

ITT Industries British American Tobacco Urban Planning Exhibition Centre, ChinaLexus Canon

Lintec Technologies CartierLockheed Martin Chanel

Mercedes-Benz Coca ColaMerck Vaccines Daimler ChryslerMicrosoft Esplanade

Nakheel IDA ConferenceNissan Louis Vuitton Launch

Interiors

Retail

Adidas La Senza Hot Stones

Apple Louis Quatorze Patara Thai CuisineA Testoni Manchester United Popeye's

Bally Marks & Spencer Soup RestaurantBanana Republic Nine West Swensen's

Bausch & Lomb Nokia The Coffee ConnectionBottega Veneta Nuance WatsonBrooks Brothers OCBC Bank Offices & Showrooms

Bruno Magli Osim Bausch & LombBurberry Phillip Wain Binney & Smith (Asia Pacific)

Calvin Klein Polo Ralph Lauren BMWCartier Raoul Cemex Asia

Celine River Island Deutsche TelekomChanel Robinsons Dept Store Eli Lily Asia Pacific

Charles & Keith Samsonite Embassy of IrelandCharles Jourdan Sentosa FJ Benjamin

Clarins Shiseido FordCoach Shu Uemura Giorgio Armani Asia

DBS SK-II Hrnet OneDFS Singapore Starhub Centre Infocredit D&B

Dickson Watch ST Dupont InvensysEscada The Hour Glass Land Rover

Eu Yan Sang The Body Shop MTVFord Showroom Tiffany & Co. People Search

G2000 Tommy Hilfiger PeugeotGant Topman Reed Business Asia

Gap Topshop SamsungGuess UOB Siemens Medical Instrument

Gucci Singapore Cable VisionJohn Little Eateries Singapore Technologies

Kate Spade Coffee Club Singtel Demo CentreKenneth Cole Delifrance TNT Office

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Appendix 2: Kinsgmen’s works

Standard Chartered Bank, Vietnam Esprit, Singapore Chanel Watch & Fine Jewellery, Singapore

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Sephora, Singapore 2008 F1 Singapore Singtel Grand Prix

GE Imagination Center at Beijing 2008 Olympic Games, China

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Hyundai, Asia Pacific

Casa Italia at Beijing 2008 Olympic Games, China Source: Company

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OSK Research DMG Research

DMG & Partners Research Guide to Investment Ratings Buy: Share price may exceed 10% over the next 12 months

Trading Buy: Share price may exceed 15% over the next 3 months, however longer-term outlook remains uncertain

Neutral: Share price may fall within the range of +/- 10% over the next 12 months

Take Profit: Target price has been attained. Look to accumulate at lower levels

Sell: Share price may fall by more than 10% over the next 12 months

Not Rated: Stock is not within regular research coverage This research is for general distribution. It does not have any regard to the specific investment objectives, financial situation and particular needs of any specific recipient of this research report. You should independently evaluate particular investments and consult an independent financial adviser before making any investments or entering into any transaction in relation to any securities or investment instruments mentioned in this report. The information contained herein has been obtained from sources we believed to be reliable but we do not make any representation or warranty nor accept any responsibility or liability as to its accuracy, completeness or correctness. Opinions and views expressed in this report are subject to change without notice. This report does not constitute or form part of any offer or solicitation of any offer to buy or sell any securities, DMGAPS and its affiliates, their directors, connected person and employees may from time to time have interest and/or underwriting commitment in the securities mentioned in this report. DMG & Partners Securities Pte Ltd is a participant in the SGX Research Incentive Scheme and receives a compensation of S$7,500 per stock per annum covered under the Scheme. DMG & Partners Securities Pte Ltd is a joint venture between OSK Securities Berhad (a subsidiary of OSK Investment Bank Berhad) and Deutsche Asia Pacific Holdings Pte Ltd (a subsidiary of Deutsche Bank Group). DMG & Partners Securities Pte Ltd is a Member of the Singapore Exchange Securities Trading Limited. DMG & Partners Securities Pte. Ltd. (RCB Reg. No. 198701140E)

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