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SINGAPORE
INITIATION REPORT 9 June 2014
Eurosports Global Limited
Recommendation:
HOLD
Price / Tgt. Price:
SS$0.285 / S$0.30
Mkt. Cap:
S$75.5m
Board / Sector:
Catalist / Consumer Discretionary
Fast and Furious: Singapore Drift
EURO SP
CIMB Research Pte Ltd +(65)-6225-1228
Rising affluence suggests continued demand for luxury products. As an
experienced distributor of Lamborghini products, Eurosports has a strong network of ultra-high net worth and high net worth clients located in Singapore. With a high concentration of ultra-high net worth households in Singapore, Eurosports is in a good position to promote its luxury lifestyle products. Earnings to be positively impacted by the new Lamborghini Huracan. The launch of new automobile models has been the key driver to Eurosports’ revenue. With the introduction of the Lamborghini Huracan model in September, Eurosports could experience huge revenue growth for the next 2 years from the sales of the revamped Lamborghini model. S$6m allocated for market expansion in listing documents not utilized yet. Targets could include distributorships that complement Eurosports as a luxury lifestyle brand and leverage on Eurosports’ existing high net worth customers. No formal dividend policy. Eurosports issued a special dividend of 2.8 Scts/ share for FY 14 following the sales and leaseback of its Teban Gardens Crescent site. With no formal dividend policy, we do not expect the company to issue regular dividends as yet. Initiate with Hold and target price S$0.30. Using discounted cash flow (WACC 6.6%), we derive a target price of S$0.30. We have yet to factor in any expansion plans at this stage.
Financial summary FYE Mar Revenue (S$ m)
FY13A 86.4
FY14A 39.8
FY15F 107.4
FY16F 118.8
FY17F 98.5
yoy growth (%)
-23.6%
-54.0%
170.2%
10.6%
-17.1%
EBITDA (S$ m)
10.5
19.6
13.5
15.2
11.0
12.2%
49.2%
12.6%
12.8%
11.2%
Pretax profit (S$ m)
8.3
17.2
11.8
13.4
7.9
Core Net Profit (S$ m)
7.5
0.7
9.8
11.1
6.6
-0.6%
-90.5%
1271.3%
13.7%
-41.0%
EBITDA margins (%)
yoy growth (%) Core EPS (S cts)
2.8*
0.3*
3.7
4.2
2.5
Dividend yield (%)
0.0%
9.8%
0.0%
0.0%
0.0%
P/NTA (x)
nm
0.9
0.9
0.7
0.6
NTA/sh (S cts)
nm
30.2
30.4
39.1
45.2
Recurring ROE (%)
nm
2.0
25.2
22.3
11.6
Net gearing (%)
nm
Net Cash
Net Cash
Net Cash
Net Cash
12.2
50.8
10.1
7.4
8.1
9.5
2.9
4.2
3.8
5.4
P/CF (x) EV/EBITDA (x)
* Assuming post IPO outstanding shares of 265m shares Source: Company, CIMB Research
Market capitalisation & share price info Market cap 12-mth price range 3-mth av g daily v olume # of shares (m) Est. free float (%) Wrts/ICULS o/s (m) Strike price (S$) Source: Bloomberg
S$75.5m S$0.21/S$0.36 S$0.37m 265.0 30% -
Share price perf. (%) Relativ e Absolute Major shareholders Goh Melv in Goh Andy
1M 5.9 7.5
3M 23.0 29.5
12M na na % held 41.9% 27.9%
Background Listed on the SGX Catalist since Jan 14, Eurosports Global Limited (Eurosports) is a luxury lifestyle company, specializing in the distribution of new and pre-owned ultraluxury and luxury automobiles as well as the provision of after-sales services. Eurosports holds the only authorised dealership for Lamborghini automobiles in Singapore since 2001, and carries other brands including Pagani, Alfa Romeo and customised automobiles by Touring Superleggera. The company has also embarked on the luxury watch distribution and retail business.
Segments Eurosports’ business can be classified into 3 main divisions: Automobile Segment. The automobile segment generated an average 90% of revenue for the past 4 years. The automobile division carries ultra-luxury and luxury automobile brands comprising mainly Lamborghini, Pagani, Alfa Romeo, Touring Superleggera and GTA automobiles. The revenue has largely been driven by the sales of new Lamborghini automobiles. However, with the expanded number of brand names carried in recent years, Eurosports is seeing increasing revenue from other brand names. The division’s main business includes provision of sale of new automobiles and sale of pre-owned automobiles.
Figure 1: Brands Eurosports carry Brand Name
Brief Description
Lamborghini
Automobili Lamborghini is headquartered in Sant’Agata Bolognese, in Northeastern Italy, where it manufactures its super sports cars. The brand is owned by Volkswagen Group through its subsidiary brand Audi. Its Gallardo brand was the highest selling model, with almost half of all Lamborghini automobiles ever produced being Gallardos. However, the Gallardo line is at the end of its life cycle, and the Group has recently launched the new Huracan LP610-4 as a replacement. Eurosports carried the brand since 2001.
Alfa Romeo
Alfa Romeo is an Italian car manufacturer involved in car racing with a reputation of building expensive sports car. The car was featured in numerous James Bond films. More recently, the Alfa Romeo 159 Ti cars was featured in the opening scenes of the 2008 Quantum of Solace. The new Alfa Romeo 4C st model is poised for re-entry into US market, and Eurosports expect the 1 model to reach Singapore by July this year. Eurosports carried the brand since 2004.
Pagani
Pagani is an Italian manufacturer of sports cars and carbon fiber. Its recent model, the Huayra, was named "The Hyper car of the Year 2012" by Top Gear magazine. Eurosports carried the brand since 2012.
Touring Supperleggera
Touring Supperleggera is a coachbuilder, well-known for its designs and patented supperleggera construction methods. The company has worked with numerous automobile companies, including Lamborghini, Alfa Romeo, BMW and most recently Bentley. Eurosports carried the brand since 2012.
Source: CIMB Research, Company
[ 2 ]
Profit for this division is substantially derived from sales of new automobiles. In turn, the sales of pre-owned automobiles act as a complement to the sales of new automobiles. After procurement of pre-owned automobiles from existing customers who seek to purchase new automobiles, Eurosports on-sell these vehicles to individuals, traders and exporters, often at a rate commanding a lower profit margin. A more competitive pricing for trade-in is often offered by the company to increase new automobile sales. This is because new automobile sales can fetch a high profit margin as compared to pre-sales automotive. After-sales services. After-sales services offered to customers include maintenance and repair services as well as breakdown assistance services. Eurosports operates the only authorised service centre in Singapore for all the brands that it carries. The service centre is manned by a team of technicians, mechanics and service advisers, who have undergone training, directly or indirectly, by the automobile manufacturers. Luxury Watch. The company has also leveraged on its established pool of high net worth customers to distribute the luxury Swiss brand of deLaCour watches. The deLaCour brand of watches was first unveiled in 2003, and one of its initial collections was selected as a finalist at the Grand Prix de Genève. The division was set up to complement the automobile distribution business by providing more luxury lifestyle product choices. Though the watch was initially sold directly to Eurosports’ network of ultra-high net worth clients, Eurosports has since appointed Sincere Watch Limited and Watches of Switzerland as point of sales in Singapore to retail the deLaCour watches. They also appointed 1 Jakarta local distributor. Figure 2: Eurosports’ revenue breakdown for FY11 to FY14
Source: Company
[ 3 ]
Competitors Eurosports’ competitors are typically distributors and dealers of automobiles manufactured by European manufacturers focusing on similar class of automobiles. In the luxury watch segment, competitors include distributors and dealers of other luxury brands of watches, particularly Swiss-made brands of watches including Audemars Piguet and Franck Muller. Figure 3: Total Annual New Registration of Automobiles of Eurosports’ brands and competitors Brand Name
2009
Aston Martin
25
Bentley Ferrari Lamborghini
2010
2011
2012
2013
ULTRA LUXURY 34
25
22
18
45
49
60
93
125
32
69
92
80
69
54
53
49
56
23
McLaren
-
-
-
33
25
Porsche
303
448
584
507
363
48
49
17
LUXURY Alfa Romeo
138
105
Citroen
284
375
346
357
172
Peugeot
387
259
460
560
295
Renault Volkswagen
288
166
263
114
121
2530
3486
3204
3567
2874
Source: LTA
Industry Outlook Increasing Affluence of Singaporeans. According to the 2013 global wealth report by Boston Consulting Group, Singapore ranked 5th globally in the density of millionaires with 0.82% of household income and 6th in proportion of ultra-high networth households with 7 per 100,000 household. A large component is due to receipt of offshore wealth. The increase in wealth is further substantiated by an increase in GDP per capita, with the International Monetary Fund projecting a 3.7% GDP per capita growth for the next 4 years. The rising affluence and spending power of Singaporean consumers are likely to lead to more discretionary spending and provide business potential for Eurosports to offer its range of luxury services. Figure 4: Proportion of Ultra high net worth households per 100,000 households (2012) Proportion of Ultra-high-net worth households per 100,000 households (2012)
Rank
Country
1
Hong Kong
13
2
Switzerland
10
3
Austria
9
4
Qatar
8
5
Norway
8
6
Singapore
7
Source: BCG
[ 4 ]
New 2014 Lamborghini model will be the key driver of sales. Management noted in its listing documents that the launch of new automobile models by manufacturers generally command high sales. The launch of the new Lamborghini Huracan LP 6104 should be a strong catalyst for new automotive sales in FY15 and FY 16. Management has guided that the new Lamborghini Huracan LP 610-4 is poised for launch in Singapore in September. The model was designed as a successor and improvement to the hugely popular Gallardo brand, with driver-adjustable magnetic shock absorbers to broaden its appeal as car used on both the track and road. During the global preview tour specially organized for VIP Lamborghini clients, the Huracan LP 610-4 registered 700 pre-orders among global clients. Management has also noted strong interest in the model among existing customers during a private viewing in Singapore held on February, and is confident that the excitement will translate to strong sales among existing automobile owners and prospective buyers. Figure 5: Huracan Model
1
2
3
3 differences of Huracan as compared to previous models The transmission is a 7-speed dual-clutch, not the old jerky automated manual. There will be no full-manual option. The four-wheel-drive torque split is now electronically controlled, rather than by viscous coupling. This means it can be more rear-biased in the track modes, and can be used to balance the car more effectively.
Driver-adjustable magneto rheological dampers at all four corners. In addition, the Lamborghini Dynamic Steering (LDS), an electromechanical setup with variable ratios dependent on the car’s various driving modes, make the car easy to drive day-to-day as it is capable on the track
Source: TopGear
Alfa Romeo 4C and Lamborghini Urus to contribute to higher sales. Apart from the Huracan, Eurosports should also benefit from the launch of Alfa Romeo 4C in FY15. The launch of the Alfa Romeo 4C model in July 2014 is expected to drive sales: the Concept version was voted the 'Most Beautiful Concept Car of the Year' award by the readers of German magazine Auto Build, and won the Auto Build Design Award 2011. With the Alfa Romeo 4C as an alternative selection from the expensive Lamborghini brand, Eurosports can increase its customer base from buyers of ultra-luxury cars to buyers of luxury cars. Alfa Romeo 4C offers buyers a sports car experience at a relatively affordable price of $300,000. In addition, Lamborghini has also signalled its intent to enter the sports utility vehicle (SUV) market with the scheduled launch of Lamborghini Urus by FY18. The launch of the new family friendly car not only acts as a catalyst in boosting sales, it also expands the market pie through a penetration into the affluent household families market. Figure 7: Alfa Romeo 4C and Lamborghini Urus model
Lamborghini Urus
Alfa Romeo 4C Source: Alfa Romeo, Lamborghini
[ 5 ]
Government Regulations. The sales of automobiles may however be affected by measures the government undertake to limit automobile ownerships in Singapore due to limited geographic land area and high population density. The government announced a new additional registration fee (ARF) structure in the Singapore Budget 2013, replacing the original registration fee of a 100% flat rate of open market value (OMV) with a tiered registration fee structure for automobiles. Under the new structure, the additional registration fees for automobile models with open market values of up to S$20,000 will remain at the rate of 100%, the next $30,000 of open market value will attract a rate of 140% and any open market value beyond S$50,000 will attract a rate of 180%. Many of Eurosports automobile products are under the 180% bracket. Although many of the clients for Eurosports are ultra-high net worth clients, the increase in ARF will still have an impact on sales of existing automobiles, especially the old Lamborghini Gallardo model which is already at the end of the brand lifecycle and will register a noticeable hike in price. Figure 6: Example of new structure registration fees (assuming OMV of Gallardo is S$ 400,000) Vehicle OMV ($400,000)
ARF
First S$ 20,000
100%
Next S$ 30,000
140%
Above S$ 50,000
180%
Total ARF Fee paid
ARF Payable 100% x S$ 20,000 = S$ 20,000 140% x S$ 30,000 =S$ 42,000 180% x (S$ 400,000 – S$ 20,000 – S$ 30,000) = S$630, 000 S$ 692,000
Percentage increase in Fees paid
73%
Source: CIMB Research
The authority also tightened financing restrictions on automobile loans granted by financial institutions, in which the maximum loan quantum for automobiles with open market value of more than S$20,000 is 50% of purchase price. Eurosports customers would have to fork out more cash to purchase an automobile, which may have a negative impact on sales.
[ 6 ]
Company Outlook Future expansion into other markets. In its listing documents, Eurosports identified and allocated S$ 6m for expansion of operations locally and in other markets as well as diversification into other luxury lifestyle business as a growth strategy. The company has not utilized the funds and are still searching for new markets to penetrate into. We believe that targets could include distributorships that complement Eurosports as a luxury lifestyle brand and can leverage on Eurosport’s existing pool of high net worth customers. Examples of luxury products and services include jewellery, yacht services or an expansion of the deLaCour brand of watches regionally through appointment of retailers or distributors. The company may also utilize the proceeds to expand operations into overseas markets through an acquisition of local existing distributorship and/or dealerships which are already in the ultra-luxury automobile market. Expansion of distribution and retail network for deLaCour watches. Eurosports has changed its sales model for the deLaCour watches to a distributorship model. Previously, Eurosports sell the watches directly to its existing customers. The company has appointed two (2) Singapore watch retailers, namely Sincere Watch Limited and Watches of Switzerland, to act as points of sales to retail the deLaCour brand of watches in Singapore and also appointed a local distributor in Jakarta, Indonesia. Presently, Eurosports is in discussions with a potential local distributor in Bangkok, Thailand. However, with the recent political event in Thailand, the plans are currently on hold.
Figure 7: SWOT analysis Strengths
Opportunities
Established client base Strong working partnership with Lamborghini and well-established
Introduction of Huracan in Sep 2014 Increased affluence in Singapore
automobile brands Established working relationship with automobile manufacturer Net Cash position to pursue inorganic growth
Weaknesses
Threats
Large exposure to Lamborghini cars demand and fluctuations of
Governmental measures to reduce automotive on the road Introduction of new models from competitor brand
automobile life cycle Relatively unproven in new luxury products Lack of experience in overseas markets Source: CIMB Research
[ 7 ]
Risks Governmental Regulations. As mentioned in the Outlook segment, the new registration fee structure may result in decreased automobile sale. However, we believe that the spike in price may not have a significant impact on the Huracan sales, given that there is no basis for comparison for its new Huracan model. Eurosports believes that its ultra-high net worth clients are able to afford the increase in prices, and the launch of a different model with a revamped design and function can be viewed as an upgrade by consumers at a higher price. Though sales of the Gallardo model may be affected, we believe the impact to sales may be minimal given that the product line has already reached the last phase of its automobile model life cycle. Dependence on key personnel. The success and growth of Eurosports' business depends significantly on the expertise and experience of its Executive Directors and key management personnel. The network and experience of Melvin Goh, the CEO, and Andy Goh, the deputy CEO, in connecting to its high net-worth client base and forging strong relationship with Lamborghini is crucial in the running of the operations of Eurosports. Dependence on Lamborghini. Eurosports’ business is dependent on the continuity of its agreement with Lamborghini to distribute its automobiles in Singapore. More than 50% Eurosports revenue has been dependent on sales of Lamborghini for the past 5 years. Either party can terminate the Lamborghini Agreement by giving prior written notice of at least 12 months. However, Eurosports has established firm ties with the management of Lamborghini and routinely performed in sales.
Financials Volatile revenue dependent on market demand for automobiles. Eurosports’ revenue has dipped yoy since FY12 due to a decrease in sales of the Lamborghini Gallardo range as it approached the end of its model life cycle. Sales decreased 54% in FY14, in part due to customers withholding purchases in anticipation of the arrival of the Huracan model in 2014 as well as the tighter regulations imposed by the Singapore government. However, with the launch of the Huracan and Alpha Romeo 4C, we expect a huge spike in revenue for FY15 and continued interest for FY 16. The luxury automobile lifecycle is typically characterized by a high growth period of 2 to 3 years, before sales drop to a normal state. Hence, FY17 may see a drop in revenue as excitement subsides and the Huracan reaches its normal sales state. However, the scheduled introduction of Lamborghini Urus should be a second catalyst for FY18 moving forward, though we expect the impact to be less significant compared to the introduction of Huracan. Figure 8: Revenue (S$ mil) growth trend
Source: Company and CIMB research
[ 8 ]
Normalized margins in the future. Eurosports’ gross margin has been steadily increasing for the past 3 years due to differing sales mix. In general, sales of new automotive command lower margins due to the controlling measures the government put in place, whilst pre-owned sales have the worst margins. For FY12, Eurosports recorded a huge increase in pre-owned automotive order, which resulted in a lower gross margin. The margin increased as pre-order sales drop. Moving forward, we believe that the gross margin will normalise to slightly lower than 20% as sales will still be driven largely by new automotive sales as compared to the higher margin watch and spare parts business. Eurosports registered a huge spike in net profit in FY14 due to an S$16.4m gain from the disposal of its Teban Gardens Crescent building. Stripping out the exceptional gain, Eurosports’ core earnings for FY14 is S$0.7m, which is a 91% yoy decline reflecting the dampened automobile sales market for both new and pre-owned automobiles due to additional vehicle registration fees and loan financing restrictions, as well as the withholding of Gallardo purchases in anticipation of the arrival of the new Huracan model in 2014.The core net profit margin at 2% was the lowest in the past 4 years. Eurosports’ core net profit margin has ranged 2% to 9% over the past 3 years. Moving forward, we expect net profit margin to be around 9% for the next 2 years, with healthy sales from its new automotive segment and contributions from the deferred income following the successful sales and leaseback of its Teban Gardens Crescent facilities. However, FY17 may register lower profit due to higher depreciation from the new Chang Charn showroom and office premises, which is expected to commence construction by 2015 and take approximately 24 months. Figure 9: Core Net Profit (S$ mil) Gross Profit Margin (%)
Source: Company and CIMB research
[ 9 ]
Healthy cash moving forward. The cash position of the group has been positively impacted by the IPO. The company is in a net cash position, and management has also paid off much of its short term debt in FY14. Though the company’s net cash generated from operating activities has decreased from S$8.1m in FY11 to S$1.5m in FY14, we believe that the declining trend will be snapped with the projected increase in profit. Management has guided that they will take on more long term debt to fund the purchase of 7 and 9 Chang Charn Road premise. We believe that the additional capital expenditure will amount to $25m, which is the estimated cost of construction for the Chang Charn Road premise. However, we believe that after factoring this construction cost as mentioned in the listing document, the company would still be in a net cash position, especially with strong profits to be expected the next few years. We expect healthy cash position moving forward. The healthy cash position that Eurosports enjoys could be utilized for near term expansion of business. Figure 10: Cash Flow from Operations (S$mil)
Source: Company and CIMB research
One time special dividend payout. The company paid a one-time special dividend of 2.8 Scts/share for FY14 following the successful disposal of its Teban Gardens Crescent compound. The company does not have a dividend policy, and we expect Eurosports to conserve cash to tide over the trough of the automobile model life cycle.
Valuation and recommendation We derive a target price of S$ 0.30 based on DCF with a WACC of 6.6%. Our target price implies a P/E ratio of 7.4x and P/B ratio of 1.4x. Due to a lack of publicly listed peers, we used overseas based automotive distributors as a proxy, with the target price implying a 12% P/E premium and 21% P/BV premium over peers. We believe that Eurosports is a Hold for the moment given its smaller size and relatively short trading history. Catalysts include better than expected earnings from Huracan sales and clarity on expansion plans. Figure 11: Valuation Comparison with Peers Ratio
Forecasted Earnings/ Book Value for CY 15
Peer’s Ratio
Ratio implied by Target Price
Premium to peers
P/E
CY15 EPS: 4.1 Scts
6.6x
7.4x
12%
P/B
CY15 BVPS: 17.7 Scts
1.4x
1.7x
21%
Source: Company and CIMB research
[ 10 ]
Figure 12: Discounted Cash Flow of Eurosports FYE Mar- S$ m
FY15
EBIT EBIT(1-T)
FY16
FY17
FY18
FY19
FY20
11.9
13.7
8.6
8.2
7.0
7.0
9.9
11.4
7.2
6.8
5.8
5.8
1.6
1.5
2.4
3.3
3.1
2.9
Add: Depreciation Less: Change in Working Capital
(0.1)
1.2
Change in Capex
(0.6)
(13.1)
FCFF
1.0
3.6
(1.6)
(3.5)
(1.4)
(13.1)
(0.5)
(0.5)
(0.5)
0.0
7.9
4.8
Average FCFF (FY18, FY19, FY20)*
6.8 3.2
Terminal Value
60.4
Discounted Value at Mar FY14 Net Debt
0.9
0.0
6.5
3.7
48.8
(18.6)
Equity Value at Jun FY14
78.6
Number of Shares
265.0
Share Price
WACC:
6.6%
Cost of Equity:
8.0%
0.30
*Deferred income of S$ 3 m from sales and leaseback arrangement is removed from average FCFF calculation for FY 18, FY 19 and FY 20. Source: Bloomberg, CIMB Research
Figure 13: Peer Comparison
Company Eurosports Global Ltd Nextage Co Ltd Union Auction PCL Hotman Co Ltd Baoxin Auto Group Ltd Indomobil Sukses Int'l China ZhengTong Auto Services
Bloomberg Ticker
Recom.
Price (lcl curr)
Target Price (lcl curr)
Market Cap (US$ m)
EURO SP 3186 JP AUCT TB 3190 JP 1293 HK IMAS IJ 1728 HK
Hold Not rated Not rated Not rated Not rated Outperform Not rated
0.29 643.0 4.76 524.0 6.54 4,790 4.20
0.30 na na na na 6,400 na
60 63 81 37 2,157 1,122 1,197
Simple average
Source: Bloomberg, CIMB Research
[ 11 ]
Core P/E (x) CY2014 CY2015
3-year EPS CAGR (%)
P/BV (x) CY2014 CY2015
Recurring ROE (%) CY2014
Dividend Yield (%) CY2014
10.0 10.8 na 5.6 9.4 8.5 7.0
7.0 na na na 7.0 na 5.7
47.1% na na na 34.3% na 22.9%
1.98 na na na 2.26 1.67 0.87
1.60 na na na 1.75 na 0.75
19.7% na na na 27.2% 21.7% 13.1%
na 0.9% na na 2.6% 1.4% 1.8%
8.5
6.6
34.7%
1.60
1.37
20.4%
1.7%
Appendix 1 Board of Directors - Executive Melvin Goh Executive Chairman and CEO Melvin Goh is the Executive Chairman and CEO of Eurosports. He is responsible for the Group’s overall management, formulating the Group’s strategic focus and direction, developing and maintaining relationships with the suppliers and customers as well as overseeing the Group’s general operations. He is one of the co-founders and has been the executive director of the Group since the establishment of EuroSports Auto in 1998. Prior to the establishment of EuroSports Auto, he was already engaged in the automobile industry, working as the managing director in Gay Hin Enterprise, the family-owned business of pre-owned automobile sales. He has substantial senior management experience and more than 30 years of experience and industry knowledge of the automobile industry. Over the years, he has been instrumental in the expansion of the Group’s operations and constantly looking for investment opportunities to grow the Group’s business. Andy Goh Executive Director and Deputy CEO Andy Goh is the Executive Director and Deputy CEO. He assists the CEO in all matters in relation to the Group’s general management and administration. He is the other co-founder of the Group and has been the executive director of the Group since the establishment of EuroSports Auto in 1998. Prior to the establishment of EuroSports Auto, he was already engaged in the automobile industry, working as the executive director in Gay Hin Enterprise, the family-owned business of pre-owned automobile sales. He has more than 28 years of experience and industry knowledge of the automobile industry. Over the years, he has been instrumental in the expansion of the Group’s operations and constantly looking for investment opportunities to grow the Group’s business.
[ 12 ]
Appendix 2 Board of Directors – Non-Executive Ng Tiak Soon Lead Independent Director Ng Tiak Soon was appointed as the Lead Independent Director on 29 November 2013. He has more than 30 years of experience in the audit, commercial and industrial sectors. He retired as a senior partner from Ernst & Young LLP in June 2005. During his employment with Ernst & Young LLP, he held various positions which include head of banking, head of an audit group, partner in-charge of audit quality review and chief financial officer. He is a non-practicing member of the Institute of Singapore Chartered Accountants (formerly the Institute of Certified Public Accountants of Singapore), a member of the Association of Chartered Certified Accountants, United Kingdom as well as a member of the Singapore Institute of Directors. He is currently a director of three (3) companies listed on the SGX-ST, namely Cordlife Group Limited, St. James Holdings Limited and 800 Super Holdings Limited. Tan Siok Sing (Calvin) Independent Director Tan Siok Sing (Calvin) was appointed as the Independent Director on 29 November 2013. He has more than 18 years of experience in the financial industry. He started his career in July 1980 with City Developments Limited, a property development company, as a project and marketing trainee. Thereafter, he went to The University of Tennessee, USA and graduated with a Masters in Business Administration in 1984. In October 1985, he joined the then Tsang and Ong Stockbrokers Pte Ltd (later restructured as Sun Yuan Holdings Pte Ltd) as its executive director and was responsible for establishing in-house training courses for dealers and remisiers, supervising the research department, and providing advisory work in merger and acquisition transactions, initial public offerings and corporate finance related works to various clients and business entities. Subsequently in November 2003, he joined EiNets Ltd (subsequently known as E3 Holdings Ltd), an information technologies company then listed on the SGXST, as its executive director for two (2) years and was responsible for the company’s corporate finance development and licensing of patented information technology in PRC. From November 2005 to August 2008, he was an executive director of Regalindo Resources Pte Ltd, an energy resources and minerals trading company, and spearheaded the trading of Indonesian coal and minerals in the southern PRC’s regional market. Since August 2008, he has been the managing director of Ironman Minerals & Ores Pte Ltd, an energy resources and minerals trading company, and he is responsible for the sourcing and trading of coal and minerals in Indonesia to PRC regional market. He is currently a director of four (4) companies listed on the SGX-ST, namely Changtian Plastic & Chemical Limited, Li Heng Chemical Fibre Technologies Limited, Dukang Distillers Holdings Limited and QingMei Group Holdings Limited. Lim Kim Quee Independent Director Lim Kim Quee was appointed as the Independent Director on 29 November 2013. He has more than 30 years of experience in the corporate banking industry. He started his career in DBS Group as a project analyst. Since then, he had held various positions in DBS Group, including vice president of corporate banking division, general manager of New York Agency, general manager of the Tokyo branch, the managing director of international department and the CEO of DBS Bank Philippines Inc. He left DBS Group and retired as the managing director of corporate credit division in December 2008. He was a director of two (2) companies listed on the SGXST, namely Engro Corporation Limited and NatSteel Ltd (now known as NSL Ltd.). He obtained a Bachelor of Social Science (Honours) from the National University of Singapore in 1976.
[ 13 ]
Appendix 3 Lamborghini Models Gallardo LP 560-4 Old car model near end of life cycle
Aventador LP700-4 Launch: Feb 2011
Huracan 610-4 Global Launch: Jul 2014 Singapore Launch: Sep 2014
Source: Company
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United States: This research report is distributed in the United States of America by CIMB Securities (USA) Inc, a U.S.-registered broker-dealer and a related company of CIMB Research Pte Ltd, CIMB Investment Bank Berhad, PT CIMB Securities Indonesia, CIMB Securities (Thailand) Co. Ltd, CIMB Securities Limited, CIMB Securities (Australia) Limited, CIMB Securities (India) Private Limited and is distributed solely to persons who qualify as "U.S. Institutional Investors" as defined in Rule 15a-6 under the Securities and Exchange Act of 1934. This [ 16 ]
communication is only for Institutional Investors whose ordinary business activities involve investing in shares, bonds and associated securities and/or derivative securities and who have professional experience in such investments. Any person who is not a U.S. Institutional Investor or Major Institutional Investor must not rely on this communication. The delivery of this research report to any person in the United States of America is not a recommendation to effect any transactions in the securities discussed herein, or an endorsement of any opinion expressed herein. CIMB Securities (USA) Inc, is a FINRA/SIPC member and takes responsibility for the content of this report. For further information or to place an order in any of the above-mentioned securities please contact a registered representative of CIMB Securities (USA) Inc. Other jurisdictions: In any other jurisdictions, except if otherwise restricted by laws or regulations, this report is only for distribution to professional, institutional or sophisticated investors as defined in the laws and regulations of such jurisdictions.
RETAIL RESEARCH RECOMMENDATION FRAMEWORK* STOCK RECOMMENDATIONS
SECTOR RECOMMENDATIONS
BUY: The stock's total return is expected to be +15% or better over the next three months.
OVERWEIGHT: The industry, as defined by the analyst's coverage universe, has a high number of stocks that are expected to have total returns of +15% or better over the next three months.
HOLD: The stock's total return is expected to range between +15% and -15% over the next three months.
NEUTRAL: The industry, as defined by the analyst's coverage universe, has either (i) an equal number of stocks that are expected to have total returns of +15% (or better) or 15% (or worse), or (ii) stocks that are predominantly expected to have total returns that will range from +15% to -15%; both over the next three months.
SELL: The stock's total return is expected to be -15% or worse over the next three months.
UNDERWEIGHT: The industry, as defined by the analyst's coverage universe, has a high number of stocks that are expected to have total returns of -15% or worse over the next three months.
CIMB Research Pte Ltd (Co. Reg. No. 198701620M)
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