Nam long investment_corporation_report_23042013_mbke
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Transcript of Nam long investment_corporation_report_23042013_mbke
SEE A
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Bu ShareTarge MichaMicha(84) 8 Stock Descrip Ticker: Shares Market 3-mth AVNIndexFree flo Major SASPL (INguyenNam VieTran Th Key InROE – aNet casNTA/shInterest
APPENDIX
w Listing
uy
e price: 16et price: 21
el Kokalari, CFAel.kokalari@ma 38386647
Information ption:
Issued (m): Cap (VND b):
Avg Daily Turnover x: at (%):
Shareholders: (%) reka)
n Xuan Quang et (Goldman Sachs
hanh Phong
dicators
annualised (%) sh ($ m): r (UScts): cover (x):
I FOR IMPO
6,800 1,000
A aybank-kimeng
(VND):
s)
ORTANT DI
.com.vn
NLG 95.5
1,614 n/a 480
44
16.3 14.9
9.1 8.9
8.1 n/a
16,113 4.3
ISCLOSUR
NaViet
VietnaIkea, tclass. costs compemaximlandba
“Ehomhas re60/sqmand lopractic
Blue-cIreka (regard59%. has thwith ov
AffordVietnaestate $700/sNLG hlong-teavailab
Stock NLG sbecausreal esdeliverrecognNLG aNam LFYE DeRevenuEBITDANet ProRecurriEPS GrDPS (V
PER (x)EV/EBIDiv YielP/BV (x
Net geaROE (%ROA (%Source:
ES AND AN
am Lotnam’s “am’s best athe Swedish Both compa(NLG’s co
etitors), and mise consumank which wi
me” brand aesulted in wim apartmentook like theycal designs.
chip investo(a Malaysianded local PE
Those well-he best manver 20 years
dable housinam is sufferin
prices fell 2sqm) nearly whas been sherm outlook bility of mortg
price at c.4sold off aftese of falling state. But pred to custonised. The hacquired landong Group –
ec (VND b)ue A ofit to Shareholdng Basic EPS (rowth (%)
VND)
) TDA (x) ld (%) x)
aring (%) %) %)
Company, May
NALYST CE
ong G“Ikea” offordable re maker of aanies use a nstruction cboth design
mer satisfactll generate re
apartments despread res that cost $
y came out o
ors: Goldman real estateE firm) own 3-known firmsagement an’ experience
ng: stable sng from the a0-30% in 20within reach rinking unit is bright, dr
gages, still in
45% discouer its recent
revenue in profit is set omers, and igh P/B ratio
d at low priceSummary Ea
ders VND)
ybank KE estim
ERTIFICATIO
Groupof Affordeal estate daffordable, st
systematic pcosts are mn their prodtion. Also,evenue for th
and homesecognition of$25,000-60,0of an Ikea c
an, Ireka an developer) 32% of NLGs invested innd corporate
focusing on
short-term, fafter-effects o12, bringing of middle-cl
sizes rather riven by demn their infanc
nt to NAV dt listing on FY12, a higto jump as
revenues o compared es years agoarnings Table
2009 201631 84215 24159 18
1,843 2,02 9
237 35
9.2 87.5 61.6 11.4 2
18.7 335.9 1813.6 7
ates
ONS
V
p dable Ho
eveloper. Ntylish furniturproduction pmore than ducts to min Nam Long
he next 10 ye
s. High custof NLG’s Eho000, take 1-1catalogue, w
d Mekong. and Mekong
G, and found Nam Long governance
affordable h
fantastic lonof a propertyaffordable h
lass office wthan cutting
mographics cy in Vietnam
despite impthe HCMC
gh P/B and ppreviously sfrom those to peers is , increasing e 10 2011 40 734 47 124 87 107 21 1,161 .7 -42.6
56 533
.4 14.6
.5 15.2
.3 1.3
.1 3.2
.9 26.6
.0 8.9
.8 4.0
23 Apri
Vietna
ousing Nam Long isre for the m
process to co20% below
nimise costs g has a 5ears.
omer satisfaome brand o1½ years to
with their ele
Goldman Sag Capital (a ders own anopartly becau
e in the induhousing.
ng-term outly bubble, buthousing (i.e.. workers. Noteg its prices. and the gro
m.
roving revestock excha
pessimism asold products
prior salespartially becits relative P
2012 20462 88 25
258 1-77.8 3
400
65.5 24.3
1.3 2.4
41.3 2.0 0.8
il 2013
am
s like middle ontrol w its
and 67ha
action f 40-build gant,
achs, well-other use it ustry,
look. t real sub-
e that The
owing
enue. ange about s are s are cause /B.
013F779 202 107
1,121 334.7
400
15.1 10.9 1.2 2.4
43.1 8.1 3.4
23 Aprril 2013
Project
WaterpointAquamarinNorth SaigoEast Gate Nam Long The BridgeWest SaigoCaptial TowCasa Oceana / HThe GolfvieCamellia GThe Green
Notes: 1)landbankValuationthe Comp
Land
t Township (inc ne Residences on Residences Residential Are
eview on wer
Ho Tram ew
Garden hill
Total
We have onlyk is 567ha, oven section belowpany Overview
Acquisition
An Thanh Res.
ea I, II, III
y listed the coer 85% of whicw. 3) The MBw section belo
PlanniZon
Key P
City/Provin
) Long An HCMC Binh DuongHCMC Can Tho HCMC HCMC HCMC HCMC Vung TauHCMC HCMC HCMC
mpensated lach is fully com
BKE valuation nw for maps wi
Skille
Nam L
•
•
•
•
•
ing and ning
Projects a
nce District
Ben LucBinh Cha
g Vinh PhuDist 9 Cai RanDist 7 Binh TanDist 7 Dist 9 Xuyen MDist 9 Binh ChaDist 9
and area for eampensated. 2)
numbers abovith the location
ed at the E
Long excels a
Land acqsuburban r
Planning ample amapartment constructio
Product elegant destrategy”).
ConstructLong’s owcosts and
Marketingthan cut prto maintain
More detai
Product D
and Invest
C
c Dist anh Dist u
g Dist
n Dist
Moc
anh Dist
ach of Nam LoDetails about
ve are for NLGns of the abov
Entire Affo
at each phas
uisition: thisreal estate d
and zoningmenities su
buildings mon costs dow
design: Staesigns keep
tion: An in-hwn standardquicker turn
g and salesrices in the an affordability
ils appear in
Design
tment Prop
leared Area (ha)
390 37 13 17 66 2 6
1< 6
17 1 6 1
ong’s projects t Maybank KimG’s ownership ve. All are loc
ordable Ho
se of the affo
s is where mevelopment
g: NLG’s welpport sales
make zoning wn.
andardisationcustomer sa
house team dised unitsaround time
s: the compaaftermath of Vy.
the ‘Compa
Constructio
perties
NLG Own.
100% 100% 100%
40% 100% 100% 100% 100%
45% 100% 100%
45% 100%
above. The cm-Eng valuatio
interest in theated in the so
ousing Va
ordable hous
most of the vain Vietnam.
ll-designed cs. Its 9-sto
approval qu
n keeps coatisfaction hi
experiencedensures low
es.
any shrank Vietnam’s re
ny overview
on
Page 2
Nam Long G
MBKE Val
97,796 22,727 21,704 11,541 10,988 10,255 9,438 6,537 5,179 5,151 4,241 4,090 2,731
212,380Source: Nam
company’s toton appear in the project. 4) Suth of Vietnam
alue Chain
ing value cha
alue is create
communitiesorey (or louicker, and
osts down wgh (i.e. the
at building wer constru
unit sizes raeal estate bu
’ below
Sales and Marketing
2 of 25
Group
. ($k)
6 7 4
8 5 8 7 9
0
0 m Long
tal he
See m.
n
ain:
ed in
with ower) keep
while “Ikea
Nam ction
ather bble,
23 Aprril 2013
Nam L
Nam Lafforda20% bconstrbuildin
The comarginprojectNLG’sweakthose quality
This ahousinscale surroudepresbuildin
We exthe futare on
Low G
Some luxuryhousinas invewould
1)
2)
3)
Note develodevelodeveloprices.
The tybeen aprices
Long’s Strat
Long’s extenable housingbelow thoseuction busin
ng Nam Long
ompany’s sun (of c.20%ts, while pr strategy is markets by savings on
y materials, b
approach mang developmup will win
unding the ression in the ng Vietnam’s
xpect Nam Lture, given t
n.
Gross Margi
of NLG’s dreal estate
ng developmestment as obe. We und
In any prodifferentiatNam Long
The luxurya glut of saffordable Estate Out
According for sale isegment –market is fdemand inflipped the
that our esopment in Vopment refeopment activ.
ypical, reporas high as 4since the tim
tegy: Compa
nsive experieg. The come of its comness; its in-g’s own stand
uperior efficie%) as other roducing higto foster thesaving moto custome
better amenit
akes sense bment is a vol
market shaecent real eaftermath ofsuburbs ove
Long to be ahe trajectory
ns in Afford
etractors podevelopme
ent (c.30% vowning the stderstand that
oduct marketted products
g has chosen
y real estate supply for y
housing matlook” below)
to CBRE, onn HCMC th– but we gufor lower-pricn the luxury e wrong way
stimate of Vietnam of c
r to the grity and not to
rted gross m40-50% in recme the land w
arable Marg
ence has mapany’s cons
mpetitors du-house teamdardised, cos
ency allows idevelopers
gher-quality e sales of itsney on conrs in the forties, etc..
because lonume game.
are over timestate bubblf the bubbleer the next 1
a much largey that both th
dable Housin
oint out that nt are much
vs 20%), so Ntock of an upt argument b
t, there are ts and low man the latter
market in Vyears to comarket is act).
nly about 30%his year areess that 70%ced units. It
and affordaaround !
gross margc.20% vs abross profit o profits attrib
margins of dcent years bwas acquired
gins, but Hig
ade it an effictruction cost
ue to a vertm has yearst-efficient de
t to earn a cs on its affproducts.
s products instruction corm of better
g-term succeThose who
me – especiale subsides ) and the m0 years sets
er company he company
ng
the gross ph higher thaNam Long ispscale develout would poi
two strategieargin, mass-v
ietnam is likeme, while theually quite g
% of the newe in the aff% of the reaseems to us
able markets
gins for affoout 30% or margin for butable to an
developers ibecause of thd.
Page 3
Nam Long G
gher Quality
cient products are more tically integr
rs of experiesigns.
comparable gfordable houIn other wo both strong
osts and pasr designs, h
ess in affordare equippe
ally as the(as well as
undane realin.
at some poy and the co
profit marginan for affords not as attraoper like VICnt out that:
es – high-mavolume prod
ely to suffer e outlook fogood (see “
w apartment fordable houal demand ins that supplys are compl
ordable houmore for luthe real e
n increase in
in Vietnam he run-up in
3 of 25
Group
y
cer of than
rated ence
gross using ords,
g and ssing igher
dable ed to hype s the ity of
int in untry
s for dable active C, etc
argin ucts.
from r the “Real
units using n the y and etely
using uxury state land
have land
23 Aprril 2013
ActuaProjec West SNorth SThe Br An ThaNorth S An ThaNorth SNam LNam L
al & Projectedct
Saigon Ehome Saigon ridgeview
anh ResidenceSaigon
anh ResidenceSaigon
Long ResidentiaLong Residentia
d Sales to Cu ApaEhoEhoEho
Ho
es An Nor
Lan
es An Nor
al Area NL al Area NL
Nam L
In 201Binh Tyear itlaunch
Sales the slosizes sales.day thwhich
We beout, bupick uexpectwhich quarte(in $ ‘0
stomers for 2
artments ome 3 ome 4: North Saome 5: Bridgevi
uses (includinThanh Residenrth Saigon (Binh
nd plots Thanh Residenrth Saigon (BinhResidential AreResidential Are
Total revenu
The safollowidisclosto be t
Actual Units so
ApartmeHouses Land plo
Reven
The corule chand FYdevelo
Long’s Busi
2, Nam LongTan district at will launch h Ehome 8 an
of all real eow market, band excelle For examp
he project wawas launche
elieve sentimut interest ra
up a bit mort both of thoshould help
erly sales res000).
2013, $k
aigon ew
g townhouse &nces h Duong)
nces h Duong) ea I ea I
ue
ales results/ng unit salese unit salestoo commerc
& Projected old
ents (including town
ots (sqm)
nue and Pro
ompany’s FYhange that dY12. The ru
opers to hold
ness Outloo
g launched tand Binh Duthe sales ofnd 9.
state develobut the Nam
ent brand naple: the comas launched ed in August
ment in the afates need to re for a robose conditionsupport Nam
sults/projectio
Q
2,
& Villa)
2,
6,
/projections s estimates
s by individucially sensitiv
Unit Sales to
nhouse & Villa)
ofits Reboun
Y13 and FY1depressed Nle change, wd off recogn
ok – Short te
the sales of iuong provincf Ehome 5, 6
opers in Vietm Long’s highame/reputatipany’s Ehomto the publilast year, is
ffordable houfall a bit fur
bust revival ns to be fulfm Long’s saleons for 2013
Q1 Q2
221 2,730 0
648 72252 2,14
729 93271 33381 57
0 9,52
502 16,96
in the table by product al project as
ve).
o Customers
Q1 55 62
4,325
nd in FY13
14 profits willam Long’s rwhich came nising reven
erm
its Ehome 3 ce, a suburb 6, and 7 and
tnam have bh-quality proon have heme 4 projectc, while its E90% sold.
using segmerther and sein overall milled by the es next year3 appear in
2013 2 Q3
32 3,896
0 2,0620 937
29 1,05744 4,003
37 41631 24371 57124 0
68 13,186
above are type (the co
s it considers
in 2013 2013
Q2 68 57
5,481
l be supporterevenues aninto effect i
ue on hous
Page 4
Nam Long G
and 4 projecof HCMC.
d next year i
been hindereoducts, smalelped suppot sold out onEhome 3 pro
ent has bottontiment need
market sales.end of this y. The compathe tables b
Q4
6 3,8962 2,0627 2,810
7 4893 2,584
6 03 1821 3810 0
6 12,403
Source: Nam L
derived fromompany doess this inform
Q3 Q226
99 2,882
Source: Nam
ed an accoud profits in Fn 2010, reqing units so
4 of 25
Group
cts in This
it will
ed by l unit rt its n the oject,
omed ds to . We year, any’s
below
ong
m the s not ation
Q4 265 63
850 m Long
nting FY11 uired
old to
23 Aprril 2013
RRevenue and
0
500
1000
1500
2000
2500
3000
201
custombelow
Nam Lblockscause assurepurchapaymeconstr
Profit 2010 -
NLG’sabout custom
Again,and FreceiveLookinmore o
Finallyload wfor a refinanciboosts
Busin
NLG h14,000year urbaniafforda
The stto sell for affothe tabfour yefor FYtreatm
0 2011 2
Revenue(V
mers until the“Impact of N
Long believes over 2013-1
revenue aned because ase price, sents and acuction.
2014
revenue forthe revenue
mers, to subs
we would reFY14 shoulded advance ng past FY14of a guess ba
y, we wouldwith a debt/eeal estate deial expensess the profit gr
ess Outlook
has a pipeli0 apartment on averagesation, Saviable housing
trong demanthe units it p
ordable housble below thears. As dis13 and FY14
ment of reven
2012 2013E
VND Billion)
e completed New Regulati
es it will com14, comprisend profits to
customers so it is veryccept delive
recast table es derived frostantiate its c
eiterate that td be very a
customer p4, the revenuased on sale
like to note equity ratio oeveloper. Fas about 40% rowth outlook
k – Long Te
ine of projeunits over t
e. Due tlls estimates
g a year (see
nd makes usproduces – asing market the company scussed in th4 should be qnues in Viet
2014E
5
10
15
20
25
30
35
40
45
50
projects areons on Nam
mplete the coed of about 1o surge. The
have alreay likely that
ery as and
in the next som the delivclaim about i
the companyaccurate, aspayments forue projectiones progress t
that the comof approximaalling interesthis year co
k for this yea
rm
ects which whe next five o demogras that HCM“Affordable
s confident thlthough we dto remain sohas estimat
he section abquite accuranam requirin
0
0
0
0
0
0
0
0
0
0
0
2010 2
Pr
e handed ove Long”).
onstruction o1,400 apartmese revenuedy paid abt they will when NLG
section goesveries of eacncreasing re
y’s revenue fs the compar the producns in the tablthis year and
mpany has ately 0.4x, wst rates are eompared to Far.
will produce years, or ov
phics, cultuC will need Housing Out
hat the compdo expect theoft for the rested its revenbove, the revate because ong that real
2011 2012
rofit(VND Bill
Page 5
Nam Long G
er to buyers
of nine apartments – whiches are fairly out 70% ofmake their
G completes
Source: Nam
s into more dch project to evenues in FY
forecast for Fany has alrcts it will dele below bec
d next.
a moderate well within reexpected to lFY12, which
around 12,ver 2,000 unural trends 70,000 unitlook” below)
pany will be e overall demst of this yeanues for the venue projecof the accouestate reve
2013E 2014
lion)
5 of 25
Group
(see
ment h will well
f the final
s the
m Long
detail final
Y13.
FY13 ready eliver. come
debt ason ower also
,000-nits a
and ts of ).
able mand ar. In
next ctions nting nues
4E
23 Aprril 2013
Actual & Project North SaigThe BridgeThe GolfviThe GreenAquamarinEast Gate Waterpoin
North SaigWaterpoinAquamarinWaterpoinAquamarinOceana An Thanh North SaigNam LongNam LongNam Long Nam LongOceana AquamarinWaterpoinCasa
Projected Re
gon eview iew
nhill ne Residences
nt
gon nt ne
nt ne
Residences gon g Residential Ag Residential Ag Residential A
g Residential A
ne nt
evenues by P ApaEhoEhoEhoEhoEhoEhoEhoEho
Ho (inNorWaAquWaAquOce
LanAn Nor
Area I NL Area III NL Area II NL
TanArea I NL
OceAquWaCasLon
only bcustomoccur f
Revenyear areasonmarkebelow.
Project 2012 -
artments ome 1, 2: East Some 4: North Saome 5: Bridgeviome 6: Golfviewome 7: Greenhiome 8: Aquamaome 9: East Gaome 10: Waterp
uses ncluding townhrth Saigon (Binh
aterpoint (Long Auamarine Townaterpoint (Long Auamarine Villaeana Villa
nd plots Thanh Residenrth Saigon (BinhResidential AreResidential AreResidential Are
n Thuan Dong Residential Are
eana Hotel Lanuamarine Landaterpoint (Long Asa ng Thanh My
Other revenTotal revenu
The lodue tothe comost o
A substo its proximpointeminuterapidlymiddle
One caarea tefootwethe loc
be recognisemer – but thefor units that
nues in the fand next, bunable revenut to improve.
2016
Saigon aigon ew
w ll
arine ate point
house & Villa)h Duong) An) Townhousehouse An) Villa
nces h Duong) ea I ea III ea II
ea I d
An) Villa
ue ue
onger-term ou the strong ompany’s abi
of the compa
stantial portilarge Water
mity to the hid out that t
es’ drive) buy and every e-class worke
aveat, howevends be foc
ear and furnication of NL
ed when the company ht have alread
following yeaut so far thisue picture in e next year,
2012
4,667
1,667 e
86 0
1,700
4,952
3,333 1,952
3,657
22,014
utlook for Naoutlook for aflity to execu
any’s projects
on of the corpoint projecghway to dothis project t our responmajor city iners living in t
ver, is that thused on lowture, while t
LG’s North S
he products as a quite ac
dy been sold
ars will be qs year’s sale
2015, and was discusse
2013
1 1 1 1
9,225 2,189 1
1
2,082 765
1,714
9,524
11,605 237,106 11
am Long is hffordable houute, and becas.
ompany’s futuct in Long Aowntown HC
is far from nse to that is the world hhe suburbs.
he FDI whichwer value-add
he FDI that Saigon Ehom
are deliverccurate viewto customer
uite dependees figures sewe expect saed in “Real E
2014 201
13,883 19,715,611 27,514,269 12,913,313 2,3
23,8 14,2
11,034
0 17,450 17,4
13,2 9,7 1,8
5,044 5,0 9 2,8
5,462 19,0 20,1
22,052 21,718,119 212,6
highly favourausing in the sause of our f
ure revenuesAn (which is
MC). SomeHCMC’s C
s simple – Has a substan
h has flowed ded industriehas flowed
me project, i
Page 6
Nam Long G
red to the w of when thars.
ent on saleseem to suppales of the ovEstate Overv
15 2016
753 19,567506 1,487910 349 829 37,531263 22,464
34,168
450 22,186233 15,218775 4,888
869 2,858
044 943 4,599844 4,841
048 19,048115 40,631
741 17,299673 246,784Source: Nam Lo
able, in our vsouth of Vietfavorable vie
s are attribulocated in c
e detractors CBD (circa 3HCMC is grontial portion
into the Lones like garminto Binh Dus moving up
6 of 25
Group
end-at will
s this ort a verall view”
7 7
1 4 8
6 8 8
8
9 1
8 1
9 4 ong
view, nam, ew of
table close have
35-45 owing of its
ng An ents,
uong, p the
23 Aprril 2013
value earmasophishomespayingHCMC
We haIII projattractnot as
Can TCan Tin comsurrouwant tagricucity asfarm d
The ospecificenterspeculseverathe Nasell alparticuNAV e
Finallybelow,from.
Long-T
EHEH
E
E
EE
Can T
chain. A harked for thsticated mecs in the Norg jobs locallyC for the fore
ave also visitjects in Cantive but the compelling.
Tho city has Tho bridge in mmodity priceunding provinto buy aparltural region)
s students or due to increas
verall picturic area wherr of the citylation in the al (unattractivam Long prol the units i
ular micro-maestimate belo
y, we’ve rep, to give an i
Term Project
Home 3: West SHome 4: North SEHome 5: Bridg
Ehome 6: GoEhome 7: Gre
home 8: AquamEhome 9: Easthome 10: Wateast Gate Reside
Camelia GAquam
Tho Residential AWate
high proporthe manufacchanical comrth Saigon Ey, while Wateseeable futu
ted the compn Tho city. particular ar
been growin2010 slashe
es over the nces more wrtments in C), 3) the childyoung adult
sed mechan
e for the citre Nam Lony, seems tolead-up to
ve) uncomploject. We han its Can Tarket need to
ow.
plicated the dea of wher
Plan
2012 201
SaigonSaigon
eviewolfvieweenhillmarinet Gate
erpointencesarden
marineAreas
erpoint
tion of FDI cture of promponents. WEhome projeerpoint residere.
pany’s Nam The develo
rea where th
ng rapidly foed travel timlast few yea
wealthy (our Can Tho –dren of thoses – and theyisation.
ty continuesg’s project io have beethe Can Thleted develo
ave no doubtho developmo fall more.
company’s e its future s
13 2014 2015
in the Binhoducts like
We guess resect will be aents will nee
Long Residepment is pr
he developm
or a few reases to HCMCars has mad
understandthe capital
e farmers way are no long
s to looks ps located, w
en impactedo bridge ope
opments in ct the companment, but thiWe reflect th
own long-tesales and rev
2016 2017 2
Page 7
Nam Long G
h Duong areelectronics
sidents whoable to find ed to commu
ential Area Iristine and h
ment is locate
sons: 1) the C, 2) the incrde farmers ining is that mof the sout
ant to move toer needed o
romising buwhile close tod by real eening. There
close proximny will be abink prices inhis opinion in
erm project venues will c
Source: Nam
2018 2019 20
7 of 25
Group
ea is and
o buy high-
ute to
, II & highly ed is
new rease n the many thern o the n the
t the o the state e are ity to ble to n this n our
plan come
m Long
020
23 Aprril 2013
MBKE RevProject
Aquamarine Residences Camellia Gar North SaigonEhome Waterpoint Township 22Waterpoint Township 12The Golfview The Greenhil Captial Towe Nam Long Residential ANam Long Residential ANam Long Residential AThe Oceana East Gate Residences The Bridgevie West SaigonEhome An Thanh Residences Casa
valuation of NCity/ Provin
HCMC
rden HCMC
n Binh Duong
2ha Long A
3ha Long A
w HCMC
ll HCMC
er HCMC
Area 1 Can T
Area 2 Can T
Area 3 Can T
Vung T
HCMC
ew HCMC
HCMC
Long A
HCMC
NLG Key Proje
nce District
C Binh Ch
C Binh Ch
g Vinh Ph
An Ben Luc
An Ben Luc
C Dist 9
C Dist 9
C Dist 7
ho Cai Ran
ho Cai Ran
ho Cai Ran
Tau Xuyen M
C Dist 9
C Dist 7
C Binh Ta
An Ben Luc
C Dist 9
NAV E
To estprojectconsidassetslarge b
We alSavillsa yeacomprprojectpresencopy o
ects t To
A
hanh Dist
hanh Dist
hu
c Dist 2
c Dist 1
ng Dist
ng Dist
ng Dist
Moc
an Dist
c Dist
Notes: project,of the layet to b
Estimate
timate Nam ts to the va
dered what ds (an advantbank is that w
so took intos and Cushmar ago. Wrehensive NAt. This is nted below,of that work w
otal Site
Area (ha) C
Ar
37.41
5.97
15.97
222.00 2
127.00 1
1.16
0.86
0.14
6.41
15.42
43.81
16.89
17.83
n/a
6.39
n/a
5.62
1) MBKE Valu, 2) In some cand/sqm doesbe incurred for
Long’s NAVluations of c
distressed invtage of beingwe have acce
o account thman & WakefWe are in AV model baa more ambso investors
when it has b
Comp. rea (ha)
Rato
Ar28.86
5.97
13.13
12.00
12.00
1.16
0.86
0.14 4
6.41
11.95
23.69
16.89
17.83
2.30
6.39
7.21
5.62
uation is the vcases above ts not equate tor the project.
V, we compacomparable vestors woulg a stockbroess to such i
he paid valufield for most
the proceased on our bitious undes should feebeen comple
te/sqm f Site rea ($)
% O
79 10
152 4
165 10
31 10
20 10
366 10
318 10
4,669 10
97 10
33 10
29 10
31 10
208 4
509 10
148 10
146 10
205 4
value of NLG’sthe compensao the MBKE d
red each of real estate ld be willing oker under tinformation).
uation work t of NLG’s kess of deveforecast cas
ertaking thenl free to conted.
NLG wns
MBValu($ '
00% 22
45% 4
00% 21
00% 65
00% 21
00% 4
00% 2
00% 6
00% 6
00% 2
00% 2
00% 5
40% 11
00% 10
00% 9
00% 10
45% 5
Totals: 212So
s ownership inted area multi
due to addition
Page 8
Nam Long G
Nam Long’sprojects, andto pay for Nhe umbrella
done by CBey projects neloping a msh flows for n what wentact us to g
BKE uation000)
NLG Val
,727 12,6
,090 1,
,704 6,
,296 33,6
,952 9,6
,241
,731
,537 3,
,205 2,6
,055 3,
,729 2,
,151 4
,541 2,4
,255 3,2
,438 7,
,548 6,
,179 6,4
,380 104,ource: MBKE, Nam
nterest in eachiplied by the v
nal costs and t
8 of 25
Group
s key d we
NLG’s of a
BRE, early more each have get a
Book lue
610
595
326
643
638
562
562
864
675
760
942
409
444
207
120
885
452
694 m Long
h value taxes
23 Aprril 2013
Projec
WaterThanh
Nam L
Aquam
North
West S
East G
Ho Tra
The B
Capita
Casa
Came
The G
The G
ct Name
rpoint Townshh residences)
Long Resident
marine Reside
Saigon
Saigon
Gate Residenc
am/Oceana
ridgeview
al Tower
llia Garden
Golfview
Greenhill
C
ip (inc An
tial Area
ences
ces
MBKE (USD ‘0 MBKE VNLG BoCapital G MinorityNet Pre- Cap GaNet Cap NLG OvMBKE BAdjusted Shares Share PBVPS (VDisc-to-
Nam
Comp Site Are(ha)
390
66
37
13
6
17
17
2
1<
6
6
1
1
NAV Analysi000s)
Valuation of Keyook Value of KeyGain on Project
y Shareholders P-Tax Gains
ins Tax (@ 25%pital Gain on Pro
verall Book ValuBook Value Adjud Book Value
(m)
PriceVND)NAV
Long Com
ea
NLG’s la
Apts, detcenter lo
Apts, det10km fro
Apts, det
14 apart
Detacheschools,
Resort wtargeted
Apt build
Nam Lon
High-clas10km fro
Mid to hi
5 apartm
Apt build
is
y Projects y Projectsts
Portion of Gain
%) ojects
ue per Balance Sustment
mpany Ov
argest townshi
tached and seocated in Can
tached and seom CBD
tached and se
ment buildings
d houses, hig9 km from CB
with hotels, detat the upper-i
ding with 983 u
ng's HQ office
ss detached hom city center
gh-end apartm
ment buildings,
ding with 275 u
Sheet
verview
Project Des
p project, 30k
emi-detached Tho, the 2nd la
emi-detached
emi-detached
s in Binh Tan
h-end apartmBD
tached housesincome marke
units in Dist. 7
e building, 12 s
houses and ap
ments in Binh
, 10km from C
units, 15km fro
212,380 104,694 107,686
6,353
101,333
25,333 75,999
60,604 75,999
136,604
96
16,800 30,039
-44%
cription
km from CBD
houses, hospargest city in t
houses in Bin
houses 19km
Dist., 13 km fr
ents, commer
s and service et
7, 5 km from C
stories, 80% le
partments loca
Chanh Dist.,
CBD
om CBD
Page 9
Nam Long G
pital and rec, the south of VN
nh Chanh Dist.
North of CBD
rom CBD
rcial areas and
apartments
CBD
eased out
ated in Dist. 9,
10 km from C
Source: Nam
9 of 25
Group
N
.,
D
d
,
BD
m Long
23 Aprril 2013
Afford
The pathis realignedhigh-q
The coyears,HCMCprevio
There such command Qfor luxVietnathat dacompa
We unpoor qTo be qualityaffordaan ove
Unfortaffordatiny mhas a
Skilled
In addpreviothemsreal esthe ma
Theseto the the typtypicalscalingcustom
Nam Ldeveloapartmdue towhich typicalare ninand alknow various
dable Housin
arallels we dport are not d its culture uality afforda
ompany has with some m
C’s D7, and lusly sold pro
are other was HAG,
odity/resourcQCG a develoxury automoam’s real estabbled in reaany, and PNJ
nderstand thquality with s
clear, we ay affordable hable housingersupply of h
unately for inable housingarket caps (market cap o
d Developer
dition to theus section, welves towardstate market arket which is
developers drawing boa
pical 80-90sly offered byg back the qmers in order
Long has buiopers cannotment buildingo standardisa
also gives a 36 months ne stories hlso makes itthat taller bus complicatio
ng is in the
drew betweestretched. and busine
able housing
focused on minor side aleases out 8ojects, has on
well-known afwhich see
ces businessoper run by obiles that htate bubble al estate sucJ, a jewelry c
at many affoshoddy constre not sayinhousing, butg units in Vieigh-quality u
nvestors, sog units are eit(one popularof $20m).
r of Affordab
e affordable we are also ds affordableis supporteds more linked
are reorientard to shrink
sqm offeringy NLG. Somquality of ther to lower sel
lt a core comt match. Itsgs are more ation of desia quicker turn
for other deigh, which mt easier to guildings creaons in the zo
Fabric of Na
en Nam LongNam Long m
ess activitiesg.
developmenactivities: it o80% of the flne resort pro
ffordable hoems to havses such as a mother-an
has been halso produch as HPG, acompany.
ordable apartruction, leakg that NLG t while there etnam (morenits.
me of the otther unlistedr affordable
ble Housing
housing deaware of dee housing bd by real demd to real esta
ting their prok the unit sizs of most dme developeeir interiors olling prices.
mpetency in constructionthan 20% bgn and vertinaround time
evelopers. Amakes the bget zoning aate more ecooning process
am Long’s D
g and Ikea inmade a series around the
nt of affordabowns its HQ oors, it man
oject, etc..
using develove switchedrubber, sug
nd-son team it by a ser
ced a streama steel compa
rtment units ky roofs andis the only pcurrently is
e on that bel
ther produce, or are listedhousing stoc
g
evelopers mevelopers whbecause thismand, unlike ate speculati
oduct offeringzes of their
developers, ters are also or delivering
affordable hon costs of celow those ocally integrae of 12-18 m
Also, most ofbuildings simpproval (locaonomic valus).
Page 10
Nam Long G
DNA
n the headlines of choicese developme
ble housing fooffice buildinages some
opers in Vietd its focusar, iron ore, with a penc
ries of scanm of corporaany, KDC, a
in HCMC a uneven flooproducer of an oversupplow), there is
ers of high-qud companiesck is TDH, w
mentioned inho are reorie segment othe upper eon.
gs by going apartments to the 40-60cutting cost
g empty she
ousing that t.$270/sqm foof its compe
ated construcmonths vs a mf NLG’s build
mpler to consal zoning boe, which cre
0 of 25
Group
ne of s that ent of
or 20 ng in of its
tnam s to etc.,
chant dals.
ations food
are of oring. high-ply of s not
uality s with which
n the nting f the nd of
back from
0sqm ts by lls to
these or its titors ction, more dings struct oards eates
23 Aprril 2013
The hibrand in the associtheir q
Focus
Anothethe soduringinitiatethat mdevelomarke
In conpredombelow.
Skilled
Most Vietnaproceslandowand inprotracare resausag
Fund politicaacquiswhich “landocountr
Can 3 projects
igh satisfactithe only othmarket next
iated with theuality).
sed on the S
er decision touth of Vietn the real es
ed projects inmany of thopers that rut.
ntrast, NLG hminantly in t.
d at Land Ac
of the valueam occurs atss by whichwners and thnvolves entancted compeneminded of ges, but no o
managers nal power in sition and co
can take fwners” in V
ry’s land).
Thos (72 ha)
Lo3 proje
ion of Nam her widely rect to industry e affordabilit
South of Viet
the companynam where istate bubblen the then-hohose projectushed in did
has focused he greater H
cquisition
e created int the land ach land is achen re-zonednglements wnsation negothe analogy
one wants to
new to VietnVietnam is
mpensation rom 5-10 y
Vietnam (eve
Binh 1 projec
ong An ects (384ha)
Long’s custocognised affgiant HAG
ty of that com
tnam
y made whict has clear
e, there wasot Danang mts were nonot have a
its efforts oHCMC area,
n suburban cquisition stacquired fromd into use fowith local govotiations withy to sausago know how t
nam should ts more diffuin Vietnam ears becaus
en though th
Duongct (16ha)
HCMC8 projects (78
omers has mfordable hou(whose bran
mpany’s prod
ch we applauexpertise. As a rush of
market. Our ot successfa deep unde
on the south as can be s
real estate age. We und
m farmers anor housing isvernment of all the involes – everyohey are mad
take note thuse than in is a more prse of the she state tech
1 p
8 ha)
Page 11
Nam Long G
made its “Ehosing brand nnd name is mducts rather
ud is to focuA few years
developers understandiul because
erstanding of
of Vietnam,seen in the m
developmederstand thand/or other s intricate, mfficials as welved parties.one likes to
de.
hat the natuChina, so
rotracted prouperior righhnically own
Vung Tauproject (17 ha
of 25
Group
ome” name more than
us on s ago
that ng is
the f that
, and maps
nt in at the local
messy ell as We
o eat
re of land
ocess ts of
ns all
a)
23 Aprril 2013
NLG’smade with atownshand Bgoverncompaprofita
Towns
Townscenterpolitica40ha t
After aas roadevelohousinactual the infis a mu
Since the pomost othe redevelodevelolast seof infrapro qu
Major
AnotheproximtownshCBD a
The cois locafrom da few openeof the road s
Nam LCan Tbetweeagricuprices,(which
Finallyinfrast
long track it one of the
a strong enhip developmCI or real e
nment deparany) have tble township
ship Develo
ship developred aroundal connectioto 500ha (or
acquiring theads, sewersopers or indng; the origi
building of hfrastructure duch easier b
township deortion of the sof the value ieason the opment is opment. All ection have astructure de
uo between th
Infrastructu
er source of mity of its lahip developmare particular
ompany’s larated in Longdowntown HC
years ago d, but that hcity, so the dystem inside
Long’s large ho bridge when HCMC alture area. T, including in
h is not close
y, we would ructure deve
record of ne few private nough land ment. Usuaestate develortments (NBBthe political p developme
opment – a P
pment is higland acquisns to securlarger) direc
e land, the ds, etc. and ividuals. Thnal townshihouses and/odevelopmentusiness than
evelopment suburban reais created, thgovernmentto facilitateof the othe
construction evelopment he township
ure Develop
f value creatandbanks toment and orly geared to
rgest projectAn, 30km f
CMC. This dbefore the r
highway endsdrive time we HCMC is g
Can Tho tohich opened and this keyThat bridge len the areas w to this new
like to mentielopment in
navigating tsector real eacquisition
ally only SOopers like NB came from
connectionsnt projects.
Profitable Bu
ghly profitabsition. In shre large swatly from the g
eveloper buthen sells
hose plots ap developeror apartment is not neglign building and
is focused oal estate devhis is a highlyt allows hige suburbanr township dbusinesses
(the whole adevelopers a
pment Benef
tion for Namo major infraother project
infrastructur
t, The Waterrom HCMC rive time is arecently builts currently eill improve evradually imp
ownship devin 2010 and
y city in the ed to a mini-
where Nam Lbridge).
on that we’vHCMC rece
he land acqestate develo
competencOE developerNBB which wm the SOE rs needed t
usiness
ble because hort, the devaths of landgovernment.
ilds basic inplots of la
are ultimatelyr may also t blocks as wgible (c. $50d selling hou
on land acqvelopment vay profitable bgh profitabin and othedevelopers m focused on
arrangementand the gove
fit Nam’s Lo
Long’s projastructure pts). Land prre developme
rpoint townshand about aa vast improt Trung Luonds abruptlyven more in roved.
velopment bed dramatically
heart of th-boom in Caong’s develo
ve noticed a ently. This is
Page 12
Nam Long G
quisition proopers in Vietcy to unders like DIG,
were spun oroad construto secure h
the businesveloper use
d anywhere
frastructure and on to oy developeddo some ofwell. The co-70/sqm) bu
uses/apartme
uisition, whicalue chain wbusiness. Pality in towner infrastrucmentioned in
n various asp is a sort of ernment).
ong’s Projec
jects is the crojects (for
rices outsideent.
hip developma 45-minute ovement fromong highway y at the perip
the future a
enefited fromy cut travel t
he Mekong Dn Tho real eopment is loc
distinct picks something
2 of 25
Group
ocess tnam rtake SJS
out of uction highly
ss is es its
from
such other
d into f the ost of t this ents.
ch is where art of nship cture n the pects quid
cts
close both
e the
ment, drive
m just was
phery s the
m the times Delta state cated
up in g that
23 Aprril 2013
H
W
Highways Van Linh, 1
1
Highway 1A, Tand Vinh Lo
Western Bus S
Nguyen 1A and 50
1) Binh Chan
other also co
One tinfrastway foturn suvia dire
Local effectivdirectlythe pamethocausesmake Hanoi,
A maplabels
Tan Tao c IPs, Station2) Binh Tan
nh
analysts andommented o
theory we hructure boom
or the governupport the baect lending a
real estate pve method oy buying reaast. Infrastrud of suppors high inflatioland and a
, where price
p of Nam Loidentifying n
d fund manan in informal
have heard m because inment to supanks which hand/or via loa
prices benefiof supportingal estate projucture deverting real eson. And thispartment bu
es fell the mo
ng’s projectsnew/impendin
5) CBD
agers basedl discussions
is that Vietnfrastructure
pport the prohave large eans backed b
t from new rg real estatejects, an idelopment woustate prices s method wouildings on tost, more des
s in HCMC ang infrastruct
Thu Thiem East Wes
Road
EasRoad,
4) District
3) D
D
d in HCMC s at social ga
tnam is on e developmeoperty markeexposure to rby real estate
roads, so thise prices thana which hasuld also be than printin
ould be espethe periphersirable.
appears beloture in close
Tunnel, t Ring d
HighwaHCMC H
P
st West Ring Phu My HunBridge
t 7
District 9
Page 13
Nam Long G
and Hanoi atherings, etc
the cusp oent is an effiet, which woureal estate pe collateral.
s is a more n the governs been mootea more targ
ng money, wecially effectivry of HCMC
ow, togetherproximity.
ay Hanoi, High Tech ark,
ng
3 of 25
Group
have c..
of an icient uld in prices
cost-ment ed in geted which ve to and
r with
23 Aprril 2013
Real
Afford
Severathe afftrendsurbanideveloprefereand 5)
As canyoungmean familietownho
Vietnam
Furthecities,year gemergwill live
One tefficienfertilisethe Meongoinand HC
Vietnameansplethophoneof twoattractindustr
A simiestima
0
5
10
15
20
25
30
35
40
45
Estate Ma
dable Housin
al factors mafordable hou will lead tosation and d
opment), 3)ence of Vietn) the growing
n be seen in . A mass ofthat these
es and preouses in the
m Age Profile
ermore, only so the urba
going forwaging Asian coe in its major
thing contribncy of Vietners/pesticideekong Delta ng inflow of CMC.
am’s continus that manyra of high-ts. Binh Duo
o suburbs oting FDI to itsrial parks is D
lar story is hate that the
below20
Tota
arket Over
ng Outlook
ake us verysing market
o a shortagedevelopmen) Vietnam’s namese to h
g availability o
the diagramf young peopcouples no fer instead suburbs.
e
about 30% anisation rateard. If Vietnountries, thar cities 10 ye
buting to unam’s agricues, more me
will need feyoung adult
ued inflow oy of these stech factorie
ong, where soof HCMC thas industrial pDong Nai).
happening incountry wil
20-
al Population
rview
– Long Term
y optimistic ain Vietnam:
e of affordat of the cou
populationhold their savof retail mort
below, the aple are gettinlonger wantto live in
of Vietnam’se is expectenam follows an its likely tears from now
rbanisation ulture (i.e. bechanisation)wer workersts from agric
of FDI into emi-skilled wes assemblome of NLGat have bee
parks (the oth
Hanoi, whicll actually h
-40
(%)
m (5 years)
about the lon1) demogra
ble housinguntry (includin density, vings in goldtgages.
age structureng married, bt to live with their own
s population ed to remain
in the foothat about hw.
is the gradbigger farms). This meas in the futureculture famili
the manufaworkers will ing electron’s projects aren particularher HCMC s
ch has led thhave a 900s
above 45
Page 14
Nam Long G
ng-term futuaphic and cu, 2) the onging infrastruc4) the cu
d and real es
e of the counbut cultural sh their exte apartment
lives in its mn well over 3otsteps of oalf of its citi
dually impro, greater us
ans that farme, reinforcingies into Can
acturing indfind jobs in
nics and mre located, isrly successfsuburb with m
he governmesqm shortag
4 of 25
Group
re of ltural going cture ltural
state,
ntry is shifts nded s or
major 3% a other izens
oving se of ms in g the Tho
ustry n the
mobile s one ful in many
ent to ge of
23 Aprril 2013
housinafforda
Vietna
We wosurprisper cacountrprefereestate
Some that a than ountil thapartmown re
PopulaCountryKorea, SJapan PhilippiVietnamChina IndonesThailanMalaysi
We woFrenchc.8m p
One obulk ofHCMCupper
Growi
The mhome family.producLong.
About buyerspredomAlso, mTheseVietna
The mlending
ng by 2015,able housing
am – a Crow
ould like to msed at how hapita. The firry, as can ence of the , which is a c
visiting fundluxury apar
ne in HCMChey considerments in Thaieal estate.
ation DensitieySouth
ines m
sia d ia
ould also likeh designed population; d
f the criticismf its landban
C will is now end housing
ing Availabi
mortgage marpurchases in. A nascent cts in the p
50% of Nas who get a mminately paidmortgages a figures ind
am.
mortgage mag to SOEs,
, ¾ of whicg the country
wded Countr
make two othhigh real estarst point is thbe seen inVietnamese
cultural artifa
d managers trtment in Ba
C, despite Thr factors like iland and the
es in Asia Population (
49 127 94 88
1,347 242 68 29
e to mention Saigon to bowntown, th
ms some obsnk is far from
too expensg products m
lity of Mortg
rket in Vietnan Vietnam wmortgage m
primary mark
am Long’s amortgage frod for in cashre not availa
dicate the up
arket is alsocorporate
ch will be aneeds.
ry that Love
er points to ate prices in
he relatively hn the table e to hold theact of the cou
to HCMC initangkok is noailand’s mucpopulation d
e cultural pre
(m) Per Ca
one point thbe a much se streets are
servers havem the center
ive for affordake econom
gages
am is still in were financedmarket existsket by recog
affordable apom the bank, h (i.e. with “frable yet for spside poten
o set to takebuccaneers
a shortfall in
es Gold and
investors whVietnam are
high populatibelow. The
eir savings untry’s long h
tially find it st that much
ch higher perdensity, the eference of th
apita Income 23,067 46,407
2,370 1,392 5,439 3,495 5,318 9,977
hat is specificsmaller city e small, quain
e made abouof HCMC. dable housinic sense the
its infancy. d with loans s for purchasgnised deve
partments arbut house p
riends and fasecondary mtial for mort
e off becausand other
Page 15
Nam Long G
n the amoun
Real Estate
ho are somete relative to ion density oe second isin gold and
history of war
surprising to more expen
r capita incogreater supphe Vietname
Pop per sq.486 334 316 267 141 127 135 87
Source: United N
c to HCMC. than the cunt, and packe
ut NLG is thaBut the centng – only mire.
In the past,from friends
ses of real eelopers like
re purchasepurchases areamily” financ
market purchatgage lendin
se after yeaspeculators
5 of 25
Group
nt of
e
times GDP
of the s the real rs.
learn nsive me – ply of se to
. km
Nations
The urrent ed.
at the ter of id-to-
most s and state Nam
ed by e still cing). ases. ng in
rs of who
23 Aprril 2013
createcome third oproducthe fuincludi
Past eeasterwhen m
Afford
We besufficieprobabto cleathe gobrokerthe unproduc
(Note CBREcentra
We extheir cagain. affordaofficer year, 2stabilismeasusome
We exhousinbumpiworst i
Is the
The rewe expa glut vacancfall fro
The rereal, itenantand atrobustindustr
We dosegme
d an NPL disto recognise
of Vietnamescts are signifture for theng mortgage
experiences rn Europe smortgage fin
dable Housin
elieve that pently such tbly take up toar. Estimates
overnment anrs are arounnsold real escts.
that the job and Savillslised official
xpect prices current levels
The reasonable housing
workers, wi2) we see pased, and theures will act areal support
xpect the resng market anng along theis over for th
Office Mark
ecent stabilispect to happof office spacy rate in HCm $80/sqm t
ecent stabilisntrinsic dem
ts moving out the same tit interest in tries has caus
o not expect ent this year
saster for thee the huge ose hold a baficantly highee banking ines.
in the housinshow that pnancing beco
ng Outlook
prices in thehat the maro 2-3 years fs of the ovend professiond $4-5b, althtate inventor
of professioin Vietnam iland registry
in the affords, then stay ns we expecg is nearly with falling intarallels betwee affordable as a catalystto the marke
st of 2013 tond for Vietnae bottom bute low end of
ket a Preview
ation of the open in the afface came ontCMC to shooto about $30/
ation of the Gmand for offut of inferior me, the contthe country bsed the take
the same thbecause inte
e banking indopportunity ofank account,er than on condustry in V
ng markets oroperty price
omes widely a
– Short Ter
affordable hrket is near for the curre
erall real estnal real estahough our ury in Vietnam
onal real estis complicatey).
dable housinfirm for the
ct price stabwithin reachterest rates seen the offichousing mat to improve et.
o be slow aam’s economt with a cleaf the real esta
w of the Affo
office leasingfordable housto the markeot up to 25%/sqm.
Grade A & Bfice space.office space
tinued inflowby multinatio-up rate for n
hing to happerest rates n
dustry, Vietnf retail banki and NIMs o
orporate and Vietnam is in
of countries es are signavailable.
rm (1 year)
housing segmequilibrium
ent supply-detate inventorte research
understandinm is compris
tate researched by the fac
ng segment next 2-3 ye
ility in the neh of a massset to close
ce market, wrket, 3) govesentiment a
and steady fomy as a whor upward biaate market.
ordable Hou
g market is asing market.
et, causing th% and Grade
B office leasinThere has
e into better w of FDI into onal compannew office sp
pen in the afeed to fall a
Page 16
Nam Long G
am’s banks ing. Less thon retail banSOE lendin
n retail ban
like Brazil anificantly boo
ment have f, although it
emand imbalry overhang firms/commeg is that mo
sed of higher
hers at firmsct that there
to stabilise ears before rear future ars of middle-c
the gap withhich has recernment stimnd may also
or the affordole, which isas. We think
using Marke
a preview of Two years
he Grade A oe A office ren
ng rates is dbeen a rusquality buildVietnam andies in a rang
pace to soar.
ffordable houbit more to r
6 of 25
Group
have han a nking g, so
nking,
nd in osted
fallen t will ance from
ercial ost of r-end
s like is no
near rising re: 1) class hin a
cently mulus give
dable s still k the
et?
what ago,
office nts to
ue to sh of dings d the ge of .
using reach
23 Aprril 2013
the afftheir ahousin
Falling
We exlendingup thedeman
We beOur vicentralike to
Inflatiohorizocorrec
Inflatio
Afford
The fowithin understhat thgross
We hamanagwho hand in like thefor inc35%.specia
0%
5%
10%
15%
20%
25%
30%
fordability crappetite for ng is probably
g Interest R
xpect interesg again by their NPL‘s. nd.
elieve lendiniew is predicl bank, inclusee lending
on is currentln that cloud
ction in the pr
on Under Con
dable Housin
ollowing tabreach of a m
standing, thehe monthly mmonthly inco
ave identifiedger in a Vietnas a wife windustries li
e “Big Four”comes in this Note that t
al loan progra
%
%
%
%
%
%
%
2006 2007
riteria we outlending (als
y not quite a
ates
st rates fall he end of theThis should
g rates shoucated on rep
uding SBV gorates fall to
y running at ds the inflatrices of oil an
ntrol
ng is Almos
le illustratesmass of emee standard temortgage paome.
d what we thnamese com
working as a ke finance o” audit firms,s bracket is the 6% inteamme descri
7 2008
Y/Y CPI
tlined belowso, the pen
as strong as t
a bit more te year as thed trigger a
uld fall to c.peated comovernor Binh10% if inflatio
6.6% and wtion picture, nd other com
st… Afforda
s that afforderging middleest of affordaayment shou
hink a realistmpany with fiv
secretary (sr for workers etc.). Notec.20%; the rest rate in ibed in the ne
2009 20
, and banks nt-up demanthat for qualit
this year aney make prosurge in aff
10% by the ments from h, that the goon remains b
we do not seeespecially g
mmodities.
ble
dable housine-class officeability by mould be no m
tic salary forve years’ wosalaries are s in professioe that the taxmaximum inthe table a
ext section.
010 2011
Page 17
Nam Long G
need to resnd for affordty office spac
nd banks to gress in cleafordable hou
end of the ymembers o
overnment wbelow 7%.
e anything ogiven the re
ng is now ne workers. Inortgage officeore than 30
r a typical mrking experiehigher at M
onal service x rate in Vietncome tax rabove refers
2012 2
7 of 25
Group
sume dable ce).
start aning using
year. of the would
n the ecent
early n our ers is % of
middle ence,
MNCs firms tnam
ate is to a
2013
23 Aprril 2013
AffordaProfessSecreta
ApartmDown P Loan PrTerm (y InterestLoan PmLoan Pm
Gover
The goend ofearmaborrow
The pfixed fpropersmallemarke
We arehave ofeatureborrowfor theloans, only fixproper
Also, wgovernmarkepurchathings distant
New R
The finmarkeimpactbubblethe lon
Thesefinanciwho hunders
ability Analyssional Salaryary Salary
ent/Home CosPayment
rinciple yrs)
t Ratemt mt / Gross Inco
rnment Supp
overnment hf the real estarked $1.4bwers of low-c
rogramme wfor the first trties must coer than 70 st.
e not clear hon the marke of the prowers’ intereste first three
linked to baxed for six mrties, given th
we believe tnment annout. We do ases of real
like minor tt) future.
Regulations
nal topic to t are a fewted the mare, helped defnger term.
measures ing needs, shave recentlstand how th
sis, in USD
t
ome
port Measur
has come outate market, in soft loan
cost housing.
will provide three years
ost below VNsqm – which
how much imket vis-à-vis ogramme, int rates (and tyears. Most
anks’ depositmonths at mohe wide swin
that this andunced should
not expect estate signi
tax cuts and
Decrease R
cover in thisw key regularket. The mflate prices b
impacted rso it is partiy started lo
hese changes
1,000400
50,00010,000
40,00015
6%338
24%
res
t with some the most ims to provide
subsidised lof the mort
ND15m/$715 h is exactly
mpact this suthe supply
n addition totheir monthlyt mortgages t rates, so b
ost. That incngs in interes
d the other sd help suppo
the other mificantly – thd REITs at
Revenues, In
s discussion atory changemeasures, ebut will also l
real estate icularly impoooking at Vis have affect
104
31
measures toportant of whe cheap mo
loans at a 6gage’s 15-yeper sqm, anNam Long’s
bsidised loanoverhang, b
o a low intey loan payme
in Vietnam orrowers’ loa
creases their st rates in rec
support meart sentiment measures to
hose other insome point
ncrease Fina
about Vietnes in 2010 enacted in tlead to a hea
firms’ finanortant for ovietnam’s proted local rea
Page 18
Nam Long G
0% 30
1%
o support thehich is that it
ortgages for
6% interest ear life. Eli
nd have unit ss segment o
n programmebut one attrarest rate, is ents) will be are floating
an paymentshesitancy to
cent years.
asures whichin the real e
o support ancentives incin the (prob
ancing Need
nam’s real ethat signific
the wake ofalthier indust
cial results verseas inveoperty markel estate firms
8 of 25
Group
15% 560
40%
e low t has end-
rate, igible sizes
of the
e will active
that fixed rate s are o buy
h the state
actual clude bably
ds
state cantly f the try in
and stors et to s.
23 Aprril 2013
The m
•
•
•
Impac
The acLong’sand prafter tstop rewere c
This cbooke(remema proje
There customrevenualreadhando
Thosebalancleveracompapaymerevenu
most importan
Decree 71projects wbubble, sdownpaympayments was compcompletion
Real estatavoid havinot been mthe post-bleveraged advance c
Decree 69land earmcompensadid not afflandbank came intosuch as BC New Revein Vietnamrecognitionrevenues are now owere prevare comple
ct of New Re
ccounting rus profits dipprofits will shohe revenue ecognising rcompleted.
caused revend now thamber that NLect).
is little chamers becausue recognitioy paid 70-8ver.
advance pace sheet, givged than it
anies). It aents on Namue.
nt rule chang
: This rule lwith advance
peculators bments of c
when constrleted), with t
n.
te developerng to borrowmore distressubble years due to their
customer pay
9: This rule rmarked for ation processfect Nam Lonhad already effect, but CI.
enue Recognm previouslyn accountingas they colleonly able toviously sold eted and han
egulations o
ule change mped 43% in Foot up this yrecognition
revenues on
nues and proat some of LG has a tur
ance that the the paymeon policy ch80% of the
ayments are ving the firm
really is (aalso means
m Long’s bala
es are:
imited real ecustomer pa
bought mult.20%, and ruction startethe hope of
rs used advw from the bsed real estais that many
r previous abyments.
aised taxes acquisition
s had not beng much bec
y been fully Decree 69
nition Treatmy had a widg. Many fected payme
o recognise to customernded over to
on Nam Long
mentioned abFY11 and 78year and nexpolicy was newly sold
ofits to plungthe produ
rnaround tim
he products ent schedulesange. This cost of the
sitting on ththe superficia commonthat the c.$
ance sheet is
estate firms’ ayments. Atiple apartm
then maked (but befor“flipping” the
vance customanks. One rate activity iny developersbility to fund
that developn but for een completecause a highcompensatedid affect s
ment: Real ede latitude firms previoents from curevenues fro
rs at the timthe custome
g
bove helps e8% FY12, anxt. In the yechanged, deprojects un
ge, but the ructs cominge of about 1
will not be s never chanmeans that
e apartment
e liability sidial appearanproblem for
$15m of ads all nearly g
Page 19
Nam Long G
ability to finAt the peak oments by pu
ing even mre the founde properties
mer paymenreason theren Vietnam ds were not hthemselves
pers must pawhich the
ed yet. Thish proportion ed when thesome develo
estate develoin their reve
ously recognustomers. Fom projects
me those proer.
explain why nd why reveears immedievelopers hatil those pro
revenues cag to compl2-18 to com
handed ovenged, despitecustomers by the tim
de of Nam Loce that it is mr all real e
dvance custoguaranteed fu
9 of 25
Group
ance of the utting more ation upon
nts to e has uring
highly with
ay on full
s rule of its rule
opers
opers enue nised Firms
that ojects
Nam nues ately
ad to ojects
an be etion plete
er to e the have
me of
ong’s more state omer uture
23 Aprril 2013
Finallymost rlongerThis hmarkefinanciWe woin a se
y, we note threal estate cr able to fundelps explain t; we expecting within theould encouraecondary issu
hat Decree 7companies i
d themselveswhy Nam Lo
t that the firme next year age any clienue to contact
71 has increin Vietnam
s with advancong recently m will need in the form onts that may t us.
eased the finbecause thoced customelisted its shato raise ano
of CBs and/obe intereste
Page 20
Nam Long G
nancing needose firms arer payments.ares on the sother $10-20or straight eqed in particip
0 of 25
Group
ds of re no
stock 0m of quity. ating
23 Apr
PROFIFYE D Sales COGSGross OperatEBIT Net finNet IncNet exPBT IncomeMinoritNet prEBITDEPS
CASH FYE D Opera
Net DepChaOthe
InvestNet ChaCha
Cash fFinanc
ChaNet OtheDiv
Net ca
Sourc
ril 2013
IT AND LOSS (VND bec
profit ting exp.
ancial incomes (loss) come (loss) fr. jv traodinaries
e tax ty interest ofit A
FLOW (VND b) ec
ting cash flow profit
preciation ange in working capitaers ment cash flow capex
ange in investment ange in other assets flow after Investment cing cash flow ange in share capital change in debt ers paid
ash flow
ce: Company, M
b) 2009
630.6
-330.2 300.4 -90.6 209.9
6.9 6.8 3.3
226.9 -37.4 -30.8 158.6 215.1
1,842.6
2009
31.7 158.6
5.3 al -714.3
582.1 -197.2 -59.1
-151.1 13.0
-165.5 180.9 120.0 73.3 -0.0
-12.4 15.3
Maybank KE est
2010
839.8 7
-490.4 -4349.4 2
-112.6 -1236.8 1
-9.0 10.3 7.8
245.9 1-64.2
4.9 186.6 1246.7 1
2,020.8 1,1
2010
-13.4 -1186.6 1
9.9 -182.7 -4-27.2 1-4.5 -2.1
-20.6 18.3
-17.9 -2102.8 1167.9 -58.8 1
- -6.3 84.9
timates
2011 2012
734.0 461.7 459.4 -260.0 274.6 201.7 159.9 -126.1 114.7 75.7 -11.2 -68.8
1.8 0.4 87.9 52.4
193.3 59.6 -56.1 -29.0 -30.0 -5.9 107.2 24.6 124.4 88.0 160.7 258.0
2011 2012E
198.5 -202.7 107.2 24.6
9.7 12.3 476.7 -280.7 161.3 41.0 -29.2 2.2 -3.6 -10.5
-51.6 5.8 26.1 6.9
227.7 -200.6 163.1 172.4
- 6.5 175.1 172.7
- 0.0 -12.0 -6.8 -64.6 -28.1
BA2013F FY
779.2 To
-449.3 Cu330.0 Ca
-139.9 ST190.1 Inv-28.4 Tra
- Ot- Ot
161.7 LT-37.4 Ne-17.2 Ot107.1 To202.1 Cu
1,121.5 Tra Ad
STOt
Lo Lo Ot Sh Pa Re Mi KE
2013F FY
79.9 Gr107.1 Sa12.0 Op11.5 EB
(50.6) Ne-202.0 EP-14.6 Pr
-180.2 Gr-7.2 Op
-122.1 EB121.4 Ne12.4 RO68.3 RO2.4 St
38.2 Gr-0.7 Ne
Int Int Ca Ca Cu Qu Ne Pe EP CF BV SP EB DP
ALANCE SHEET (VNYE Dec
otal assets urrent assets ash T investment ventories ade receivable thers ther assets T Investment et fix assets thers otal liabilities urrent liabilities ade payable dvance from customerT borrowings thers ong-term liabilities ong-term debts thers hareholders' equity aid in capital eserve nority interests
EY RATIOS YE Dec
rowth (% YoY) ales perating profit BITDA et profit PS rofitability (%) ross margin perating margin BITDA margin et margin OA OE ability ross debt/equity (%) et debt/equity (%) t. coverage (X) t. & ST debt coverageash flow int. coverageash flow int. & ST deburrent ratio (X) uick ratio (X) et cash/(debt) (VND ber share data (VND ) PS FPS VPS PS BITDA/share PS
ND b) 200
2,3301,781
1215
1,342303
9548500
938
1,2451,160
68
rs 585219288857212
1,084649233200
200
nnnnn
473334251335
331833
e (X) 1
(X) 5
bt (X) 010
b) -165
1,84
1710,26
7,322,49
23
09 2010
0.0 2,470.3 2.8 1,925.6 2.3 206.2
5.0 2.7 1,411.0 23.6 289.4 9.2 19.0 8.2 544.7 0.7 453.9 9.5 49.1 8.0 41.7 5.7 1,100.9 10.7 1,018.2 18.1 91.9 5.1 501.6 9.5 195.8 8.0 228.9 5.0 82.7 2.4 56.4 2.6 26.3 4.3 1,369.4 19.7 945.2 13.8 244.6 0.8 179.6
09 2010
n/a 33.2 n/a 12.8 n/a 14.7 n/a 17.7 n/a 9.7
7.6 41.6 3.3 28.2 4.1 29.4 5.2 22.2 3.6 7.8 5.9 18.0
3.0 21.2 8.7 3.9 3.5 13.9 .8 1.1
5.1 -0.8 0.3 -0.1 .5 1.9
0.4 0.5 5.6 -46.0
43 2,021 78 919 62 12,882 125 9,093 99 2,671 37 356
Page 21
Nam Long G
2011 2012
2,894.7 3,069.8 2,403.7 2,604.5
141.6 113.5 1.8
2,059.0 2,197.8 179.2 264.9 23.9 26.5
491.0 465.2 352.7 328.7 53.3 60.1 85.0 76.4
1,382.2 1,514.5 ,183.8 1,357.6
72.9 100.8 369.8 306.8 295.4 518.1 445.7 431.9 198.4 156.9 172.7 122.7 25.7 34.2
1,512.5 1,555.2 ,029.4 1,078.4 200.2 194.3 282.9 282.5
2011 2012E
-12.6 -37.1 -51.6 -34.0 -49.6 -29.2 -42.6 -77.0 -42.6 -77.8
37.4 43.7 15.6 16.4 16.9 19.1 14.6 5.3 4.0 0.8 8.9 2.0
38.1 50.4 26.6 41.3 5.2 1.0 0.4 0.2
-9.0 -2.7 -0.7 -0.4 2.0 1.9 0.3 0.3
-326.5 -525.6
1,161 258 -699 -294
13,314 13,325 7,947 4,834 1,347 922
533 400
of 25
Group
2013F
68.8 151.2 129.6 334.7 334.7
42.3 24.4 25.9 13.7 3.4 8.1
51.4 43.1 4.3 0.4 1.8 0.2 2.1 0.3
-594.5
1,121 -7
14,446 8,158 2,116
400
23 Apr
P K BARegion(65) 64
WONG Acting (603) 2
ONG SRegion(65) 64
WONG C(603) 2 Stra Co
Desmo(603) 2 Ban
LIAW T(603) 2 Oil Aut Shi
ONG Ch(603) 2 Pla
Mohsh(603) 2 Avi Pet Pow
YIN Sha(603) 2 Ga Me Pow
TAN CH(603) 2 Co Pow
WONG W(603) 2 Pro
LEE Ye(603) 2 Bui Ma Tec
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Edward(852) 2 Co
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Ganesh(91) 22 Tel Co
ril 2013
ASU nal Head, Research &432 1821 pk.basu@mChew Hann, CA Regional Head of In
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MChew Hann, CA Head297 8686 wchewh@mategy nstruction & Infrastruct
ond CH’NG, ACA 297 8680 desmond.chnking - Regional hong Jung 297 8688 tjliaw@mayb& Gas tomotive ipping hee Ting, CA 297 8678 ct.ong@may
antations hin AZIZ 297 8692 mohshin.aziation trochem wer ao Yang, CPA 297 8916 samuel.y@mming – Regional dia wer
HI WEI, CFA 297 8690 chiwei.t@manstruction & Infrastructwer Wei Sum, CFA 297 8679 weisum@ma
operty & REITs en Ling 297 8691 lee.yl@maybilding Materials nufacturing chnology heng Hooi Head of [email protected]
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THAILANDL Head of Research 5090 ke.co.th of Institutional Researc| (66) 2658 6300 ext 1-ke.co.th Caps
rategist 5091 -ke.co.th
RAN 1440 mayuree.c@ma
B 1430 suttatip.p@mayb
RACHAI 1400 sutthichai.k@ma
VAT 1520 termporn.t@may
NSRI 1560 woraphon.w@m
ance ANAWONG
1404 jaroonpan.w@m
AT 1401 chatchai.j@may
AVANANANDA 1398 pongrat.R@mayl Caps
VIETNAM , CFA Head of Researmichael.kokalari@may
Tuyen x 8081 tuyen.nguyen@erage
x 8084 van.ngo@mayb
ep x 8242 diep.trinh@may
oa x 8083 thoa.dang@ma
a x 8088 hoa.nguyen@m
Page 22
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APPE DISCLAThis resoffer to each seTechnicinformainvestedtake intshould recomm
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AIMERS search report is psell or a solicitatecurity’s price ocal ratings may dation extracted frd. Past performato account the sptherefore seek f
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port may contain”, “plan”, “expected and other sim
to certain risksrs are cautioned d looking stateme
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port is prepared or in part in any foof third parties in
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as specifically pT accepts no liab
search report pies Exchange Ac
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MS FOR PROV
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or value may risdiffer from fundarom the relevant ance is not necepecific investmenfinancial, legal aeport. ned herein has bad, its subsidiary d it should not bntatives”) shall no opinions or reco
n forward lookingt”, “forecast”, “pr
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dations containeluations apply de equity analysis.
roduced as of thhas no obligatiogapore in respec
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urvey result of thand Exchange C
ernative Investmparty. It is not an
Report of Thai d (“MBKET”) doe
permitted, no parility whatsoever f
repared by MKEct of 1934, as aon 15 of the Secby Maybank KESdirected at you if
before reading ons.
g distributed by is for InformationAct 2000 within
omments or accuunting or tax adv
VISION OF R
neral circulation ao buy the securite or fall. Opiniomental ratings ajurisdiction’s sto
essarily a guide tnt objectives, thend other advice
been obtained froand affiliates (co
be relied upon asot be liable for aommendations co
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loyees, includingancing transactioon or holding, or e markets in the ed herein, or thebe a director of t
MKE’s clients andwithout the prior e
d for distribution ton, publication, aapplicable law. T
egoing, the readg this report.
ed herein are in ifferent methodo.
he date hereof anon to update succt of any mattersas defined undery being limited to
he Thai Institute Commission. The
ment disclosed ton evaluation of oListed Compani
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E is distributed amended) only bcurities ExchangeSUSA. All resultf MKE is prohibitit that Maybank
Maybank Kim Enal Purposes onlythe UK. Any incuracy, and that ice, and that for a
REPORT, DISC
and for informatioies referred to he
ons or recommes technical valua
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events or circum
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d may not be repexpress written c
to or use by any availability or useThe securities deer is to note tha
the form of techologies and are
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of Directors Asse survey of the IOo the public andoperation and isies. As a result, or certify the accu
tation may be ref third parties in t
in the United Stby Maybank Kime Act of 1934, asting transactionsted or restricted k KESUSA is pe
Eng Securities (y. This documen
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CLAIMERS A
on purposes onlyerein. Investors sendations containations apply diffethe equity analy
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eved to be reliabE”) and consequengly, MKE and ict or consequenare subject to ch
ut not always ideents that an evennts are based onresults to differ
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alysis on which the securities ment
produced, alteredconsent of MKE a
person or entity e would be contrescribed herein mat additional disc
hnical ratings anpurely based on
on herein may bor any recipient.in connection wi
he Singapore Sey) as permitted b
sociation (“IOD”) OD is based on t able to be accnot based on inthe survey may
uracy of such sur
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tates (“US”) to M Eng Securities s amended). All
s by a US personby any legislatioermitted to prov
(London) Ltd (“Mnt is not intended party link is forlinks is at the
ce recipients sho
ND DISCLOS
y and under no cshould note that ned herein are erent methodologysis. Accordinglyort is not intendeicular needs of pof investing in an
ble but such sourently no represets officers, direc
ntial losses or daange at any time
entified by the usnt or result “mayn assumptions mr materially fromts. MKE expresshe date of this p
ation or issuance urities mentionedtransactions, in serial presented inhey are based, bioned in this repo
d in any way, traand MKE and its
who is a citizen orary to law or regmay not be eligibclaimers, warning
nd fundamental rn price and volu
e subject to cha. For distributionth, this report. If curities and Futu
by law.
regarding corpothe information oessed by a gennside informationy be changed afrvey result.
tributed in any m
Major US InstituUSA Inc (“Maybresponsibility for
n or entity shouldon or regulation vide research m
Maybank KESL”) for distribution t
r the recipients cindividuals own
ould consult with
SURES
ircumstances shvalues of such sin form of techngies and are pury, investors’ retued to provide perpersons who many securities or t
rces have not bentation is made
ctors, associatesamages that maye, without prior no
se of words sucy”, “will”, “can”, “made and inform
m those expressely disclaims any ublication or to r
of this report, md in this report, psuch securities on this report. MKbefore the materiort.
ansmitted to, cop Representatives
or resident of or gulation. This reble for sale in all gs or qualificatio
ratings. Technicame-related inform
nge. Maybank Kn in Singapore, rthe recipient of t
ures Act), Mayba
orate governanceof a company listeral public invesn.The survey resfter that date. M
manner without t
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pied or distributes accepts no liab
located in any loeport is for distrib
jurisdictions or tons may apply b
al ratings may dmation extracted
Kim Eng Researcrecipients of thisthis report is not ank KERPL shall
e is made pursuated on the Stockstor. The result, sult is as of the aybank Kim Eng
he prior written
(as defined in , a broker-dealeof this report by
rough a registereon from making itng investments
orized and reguld as a Retail Cliey, and that the fn this report shoendent tax advise
Page 23
Nam Long G
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strategies discus
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”, “believe”, “estior “might” occur
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rest s Representativesy have assumedother services fopril 2013, Maybay have a businesore, Investors shes may from time
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ny companies rewarrants on the s
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a Participating sia. Singapore: ority of Singaporated by the BAPtry of Finance ange and is regul71/UBCK-GP) iss and Futures CoINF/INB 231452
lso registered wiby the FINRA –
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commended in tsecurities /compaET, its associatened in this reportd by the requirem
mission. esearch report. urrently may ma
months, significan provided from th
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Page 24
Nam Long G
Organization of This material is re. Indonesia: PPEPAM LK. Thaand the Securitielated by the Secs licensed undeommission. India2435) and the Both SEBI as CateBroker ID 2786
ein and may furthrm investment b
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onsent of MKE.
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Page 25
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