SINGAPORE

CAPL SP Price (at 06:17, 02 Oct 2015 GMT) Valuation

Outperform S$2.75 S$

5.00

CapitaLand Valuation close to trough Event

- DCF (WACC 8.8%)

12-month target S$ 4.00 Upside/Downside % +45.5 12-month TSR % +48.7 Volatility Index Low GICS sector Real Estate Market cap S$m 11,797 Market cap US$m 8,297 Free float % 30 30-day avg turnover US$m 22.0 Number shares on issue m 4,290 Investment fundamentals Year end 31 Dec Revenue EBIT EBIT growth Reported profit Adjusted profit EPS rep EPS rep growth EPS adj EPS adj growth PER rep PER adj Total DPS Total DPS growth Total div yield ROA ROE EV/EBITDA Net debt/equity P/BV

2014A 2015E 2016E 2017E m 3,924.6 4,300.0 4,510.3 4,489.2 m 1,496.1 1,653.4 1,231.7 1,370.2 % 7.7 10.5 -25.5 11.3 m 1,160.8 1,056.8 889.4 944.8 m 705.3 618.1 867.4 831.4 ¢ 27.3 24.8 20.9 22.2 % 38.0 -8.9 -15.6 6.2 ¢ 16.6 14.5 20.4 19.6 % 40.2 -12.3 40.6 -4.2 x 10.1 11.1 13.1 12.4 x 16.6 18.9 13.5 14.1 ¢ 9.0 10.0 8.4 8.9 % 12.5 10.6 -15.8 6.2 % 3.3 3.6 3.0 3.2 % 3.4 3.7 2.7 2.9 % 7.1 6.2 5.0 5.2 x 9.9 10.7 11.9 11.3 % 57.0 58.7 56.2 54.2 x 0.7 0.7 0.7 0.6

CAPL SP rel SNGPORI performance, & rec history

 Over the last three months, CapitaLand’s (CAPL) shares have corrected by

22%, underperforming the FSSTI by 6 ppts and Chinese developers (under our coverage) by 7ppts. Discount to RNAV has also widened by 15ppt to 46%.  In this in-depth report, we review CAPL’s “One CapitaLand” strategy, refresh

our estimates and assess CAPL’s medium-term ROE target of 8-12%. Post revision, we are still calling for 24% core earnings CAGR (2015-18E).

Impact  “One CapitaLand” strategy. With the divestment of its entire stake in

AustraLand and the privatisation of CapitaMalls Asia in 1H14, CAPL is the only listed developer within the group structure (Fig 9), focusing on largescale integrated developments and shopping malls in Singapore and China. Recurrent income is now 75-80% of its EBIT and 80% of RNAV (Fig 10 & 11).  20% of CAPL’s upside driven by REITs (29% RNAV). CAPL’s 5 REITs

contribute 29% of CAPL’s RNAV and we see 19-43% upside to the 4 REITs that we cover. We like CT for its resilient retail exposure in Singapore and CCT for its long WALE, weathering the huge office supply in 2016.  Investment properties (42%) trading well. CAPL’s Raffles City (RC)

developments and malls in China NPI grew organically by 6%YoY (in RMB) in 1H15 and we expect the trend to persist. Coupled with 7 malls and 4 RCs in China completing in FY15-18E, we see >20% earnings CAGR here. Our asset valuation is ~7% below CAPL’s reported Jun-15 valuation (Fig 1).  A fair 20% discount to RNAV. Since 2010, CAPL’s discount to RNAV has

correlated better with the Chinese developers’ average (Fig 3). Using a 50-50 SG-China weighted 5-year avg. discount of 25% and reducing this by 5ppts (higher recurrent income), we think a 20% discount is fair.  Stub value close to GFC trough. Excluding the value of its investment

properties and listed REITs, CAPL’s resi is trading at an 88% discount to our adjusted RNAV (GFC trough:90% Fig 6). Our China property team maintains its positive view and recent policy relaxation should boost resi sell-through.

Earnings and target price revision Note: Recommendation timeline - if not a continuous line, then there was no Macquarie coverage at the time or there was an embargo period.

Source: FactSet, Macquarie Research, October 2015 (all figures in SGD unless noted)

 FY15-18E EPS: -25%/-18%/-22% due to asset divestments and refinement of

the profit recognition of its residential projects. TP -2.2% to S$4.00/sh.

Price catalyst  12-month price target: S$4.00 based on a RNAV methodology.  Catalyst: Earnings resilience in 3Q15 results.

Analyst(s) Tuck Yin Soong +65 6601 0838 Sam Chan +65 6601 0835

[email protected] [email protected]

5 October 2015

Macquarie Capital Securities (Singapore) Pte. Limited

Action and recommendation  Reiterate Outperform. CAPL is one of our top picks in Macquarie Marquee

Ideas, Singapore Strategy and the Asia Property sector. Trading at 0.67x PBV and at a 46% discount to our RNAV (5-yr avg: 36%), we think shares are undervalued. CAPL is on track to reach 8-10% RoE (Fig 12), with abovesector EPS growth momentum over the next two years.

Please refer to page 14 for important disclosures and analyst certification, or on our website www.macquarie.com/research/disclosures.

Macquarie Research

CapitaLand

Valuation We value CapitaLand’s RNAV based on a sum-of-the-parts (SOTP) methodology (Fig 1), applying appropriate capital values to (i) completed investment properties, target prices for its (ii) listed REITs, an 18x fee income multiple to the (iii) fund management platform and NPV of the residential profits for the (iv) residential businesses (7.5% and 10.0% WACC for Singapore and China residential projects). We apply a 20% discount to RNAV to derive our target price of S$4.00/sh.

Fig 1 Our SOTP approach yields a S$5.00/sh revalued NAV… COMPLETED INVESTMENT PROPERTIES

SINGAPORE (CL SG & CMA) Singapore - Retail The Star Vista Westgate (direct stake) ION Orchard (JV)

Stake

NLA (k sqft)

100% 70% 50%

163 411 628

50%

703

Singapore - Office CapitaGreen (direct stake)

CHINA MALLS (CMA) China - Retail malls (consolidated) Hongkou Plaza Minhang Plaza 5 operational malls

OTHERS - Japan / Ascott Japan - 5 retail malls- Cap rate Ascott (ex REIT) - Target P/B

1,879 2,587 5,112

306 1,064 3,210

2,228

1,566

Reported (Jun-15) Valuation GAV (RMB psm) (RMB m)

MQ estimates Valuation GAV (S$/sqft) (S$m)

Pro-rata GAV (S$m)

Debt (S$m)

RNAV (S$m)

RNAV (S$/sh)

% of total

301 729 1,586

159 417

142 312 1,586

0.03 0.07 0.37

1% 1% 7%

1,850 2,550 5,050

301 1,049 3,171

2,220

1,561

779

449

330

0.08

2%

MQ estimates Valuation GAV Liabilities (RMB psm) (RMB m)

Pro-rata GAV (S$m)

Debt (S$m)

RNAV (S$m)

RNAV (S$/sh)

% of total

905 461 236

336 106 90

0.08 0.02 0.02

2% 0% 0%

783 300 968 407

0.18 0.07 0.23 0.10

4% 1% 5% 2%

RNAV (S$m)

RNAV (S$/sh)

% of total

520 480 283 153 660

0.12 0.11 0.07 0.04 0.16

2% 2% 1% 1% 3%

Stake

NLA (k sqm)

73% 65% 73%

145 112 183

53,125 34,778 11,243

7,718 3,897 2,056

53,000 35,000 11,000

7,700 3,922 2,012

1,241 566 327

45% 30% 45% 50%

603 282 387 105

12,963 16,312 25,665 34,021

7,811 4,593 9,938 3,560

13,000 16,000 25,000 35,000

7,833 4,505 9,681 3,662

783 300 968 407

Stake

NLA (k sqm)

31% 55% 55% 55% 43%

109 93 102 66 185

China - Retail malls (JVs & Assoc.) China income fund I - 16 malls China income fund II - 6 malls China income fund III - 7 malls China dev.fund III - 2 op. malls

CHINA RC (CL CHINA) Raffles City Raffles City Shanghai Raffles City Beijing Raffles City Chengdu Raffles City Ningbo Raffles City Changning

Reported (Jun-15) Valuation GAV (S$/sqft) (S$m)

Reported (Jun-15) Valuation GAV (RMB psm) (RMB m) 63,623 41,977 45,195 33,434 39,657 Book Value (S$m)

Stake 100% 100%

1,997

COMPLETED INVESTMENT PROPERTIES (S$m)

6,950 3,909 4,624 2,190 7,323

Stabilised NPI (RMB m) 544 267 162 88 497

GAV (S$m) 606 2,787

MQ estimates NPI Yld

GAV (RMB m)

Pro-rata GAV (S$ m)

7.2% 6.8% 7.0% 7.0% 7.2%

7,553 3,924 2,314 1,254 6,908

520 480 283 153 660

MQ est. NPI Yld 5.0% 0.60

GAV (RMB m) 584 1,988

Pro-rata GAV (S$ m) 584 1,988

Debt (S$m) 309 789

RNAV (S$m) 275 1,198

RNAV (S$/sh) 0.06 0.28

% of total 1% 6%

22,269

12,655

3,726

8,929

2.10

42%

NOSH 3,536 2,949 1,547 840 1,779

Upside (%) 27% 43% 19% 39% N.M.

RNAV (S$m) 2,479 1,779 1,050 434 331 6,073

RNAV (S$/sh) 0.58 0.42 0.25 0.10 0.08 1.43

% of total 12% 8% 5% 2% 2% 29%

RNAV (S$m) 878 802 1,680

RNAV (S$/sh) 0.21 0.19 0.40

% of total 4% 4% 8%

23,887

Debt (S$m)

LISTED REITS

CT CCT ART CRCT CMMT LISTED REITS (S$m)

Stake 29% 32% 47% 27% 36%

Mkt cap (S$m) 6,701 3,892 1,887 1,142 913 14,536

Price (local currency /sh) 1.90 1.32 1.22 1.36 1.42

Target Pr 2.40 1.89 1.45 1.90 -

FUND MANAGEMENT PLATFORM

Listed REITs Private Funds FUND MANAGEMENT PLATFORM (S$m)

AUM (S$bn) 23.0 20.0

Fee income (S$m) 98.0 89.4

Fee inc. as % AUM 0.4% 0.4%

DEVELOPMENTS & INVESTMENT PROPERTIES UNDER CONSTRUCTION Reported NLA GAV Stake (k sqm) (S$ m) Singapore China Residential Developments 3 RC China, 7 China malls & 1 SG project (Jewel), booked at cost PROPERTIES UNDER CONSTRUCTION (S$m)

EBIT Margin (%) 60% 60%

Fee income (net tax & P/E costs) multiple 49 18.0 45 18.0 93 Pro-rata GAV (S$ m) 2,000 6,800 8,800

Surplus (S$ m) 321 517 838

Debt (S$m) 1,390 4,725 6,114

RNAV (S$m) 932 2,593 3,524

RNAV (S$/sh) 0.22 0.61 0.83

% of total 4% 12% 17%

3,380 12,180

838

1,974 8,462

867 4,556

0.20 1.07

4.1% 21%

Revalued NAV (S$m) Revalued NAV (S$/sh) Target discount to RNAV Target price

21,239 5.00 20% 4.00

Source: Company data, Macquarie Research, October 2015. Priced as of 1st Oct 2015

5 October 2015

2

Macquarie Research

CapitaLand

Fig 2 …and S$4.00/sh target price on our base case (20% discount to RNAV)

Fig 3 CAPL’s discount to RNAV correlation vs. sector average

(S$/sh)

(%) 60%

90%

4.10

84%

4.00

84%

85% 4.00

50%

78%

80% 75%

3.90 40% 3.75 30%

65%

25% 3.70

20%

50%

10%

3.50

45%

30%

0%

40%

3.40 MQ base case

50-50 (SG-China)

Discount to RNAV

TSR

61%

55%

3.60 3.50 39%

67%

60%

20%

48%

67%

70%

3.80

30%

78%

75%

SG*

30-70 (SG-China)

China

Target price (RHS)

50-50 (SG-China) 30-70 (SG-China)

2008-Current

2010-Current

Source: Bloomberg, Macquarie Research, October 2015. *For SG sector, we are using market-cap weighted average RNAV discounts from CIT SP, UOL SP, WINGT SP and FCL SP.

Source: Bloomberg, Macquarie Research, October 2015. Priced as of 1st Oct 2015

20% discount to RNAV is fair, we think. Since 2008, CAPL has been trading at a 35% average discount to its RNAV, only reaching the 0-20% discount range post-GFC (May-09 to Dec-09, Fig 4). That said, we continue to believe that a 20% discount is fair given that ~80% of CapitaLand’s EBIT (2015-18E, Fig 11) is recurrent and only ~20% is exposed to trading income, mainly from its residential projects in Singapore and China. Taking a step back, theoretically, a discount to RNAV exists either because the market is pricing in a lower risk-adjusted return on future development projects (beyond current visible pipeline) or cap rate expansion (relative to our assumptions) on its investment properties. We think the risks are low here given CAPL’s focus on recurrent income (evident from CMA’s privatisation) and our conservative RNAV estimates on completed investment properties (7% below CAPL’s reported Jun-end valuation – Fig 1). 30-39% TSR on our bear-case scenarios. Nonetheless, we lay out our bear-case scenarios applying a weighted SG-China sector average discount to RNAVs (SG avg: 20%; China avg: 30%) to CAPL’s RNAV (Fig 2). We also note that in recent years, CAPL’s discount to RNAV has correlated better with China vs. SG (Fig 3 & 4).

Fig 4 In recent years, CAPL’s discount to RNAV correlates better with China sector average discount

20% 10% 0% -10% -20% -30% -40% -50%

Since 2010, CAPL's discount to RNAV correlates better wtih China sector average

-60% -70%

China

Jul-2015

May-2015

Jan-2015

Mar-2015

Nov-2014

Jul-2014

Sep-2014

May-2014

Jan-2014

Mar-2014

Nov-2013

Jul-2013

Sep-2013

May-2013

Jan-2013

Mar-2013

Nov-2012

Jul-2012

Sep-2012

Jan-2012

Mar-2012

Nov-2011

Jul-2011

Sep-2011

May-2011

Jan-2011

Mar-2011

Nov-2010

Jul-2010

Sep-2010

May-2010

Jan-2010

Mar-2010

Nov-2009

Jul-2009

Sep-2009

May-2009

Jan-2009

Mar-2009

Nov-2008

Jul-2008

Sep-2008

May-2008

Jan-2008

Mar-2008

SG*

May-2012

2008-current: CAPL discount average at 35%

-80%

CAPL's discount

Source: Bloomberg, Macquarie Research, October 2015. Data above is a monthly average time series. Priced as of 1st Oct 2015

5 October 2015

3

Macquarie Research

CapitaLand

Fig 5 Target price sensitivity to valuation assumptions (% chg)

0.0%

-6.3%

-1.0%

-1.7%

-1.5%

-1.2%

-1.0%

-0.7%

-2.0% -3.0%

-4.0% -5.0% -6.0%

-7.0% +5 ppt chg to 5% dep in -5% chg in SG -5% chg in -5% chg in SG +0.5ppt in China RNAV discount RMBvs. SGD retail cap. val. China malls cap. office cap. val. mixed-use cap value rate % chg Source: Macquarie Research, October 2015

Deep discounts to RNAVs (45-86%), ex REITs and investment properties. In the past five years since the GFC, CapitaLand reported net revaluation gains from its investment property portfolio. This is due to projects which are under construction moving to completion but not yet stabilised stage and completed projects reaching stabilised stage. At each point of the cycle, independent property consultants will value the asset higher based on higher net property income streams from the operations. We striped out the value of these investment properties (IP) at today’s value (hence not assuming anymore net revaluation gains) and as well CapitaLand’s stake in its listed REITs from our SOTP to ascertain the market implied discount that is placed on the remaining residential business. On this basis, the discount to RNAV ex-IP and REITs is 88%. This is close to the trough ~90% discount on the same methodology during the GFC period. A scenario, which is unlikely to happen, we think.

Fig 6 CapitaLand’s discount to RNAV close to GFC trough

0% -10% -20% -30% -40% -50% -60% -70% -80% -90% -100% Dec-08

Jan-Mar 09 avg.: -90% Today: -88% Average: -53%

Dec-09

Discount to RNAV

Dec-10

Dec-11

Dec-12

Discount to RNAV, ex IP & REITs

Dec-13

Dec-14

Discount to RNAV, ex REITs

Source: Bloomberg, Macquarie Research, October 2015

5 October 2015

4

Macquarie Research

CapitaLand

Fig 7 Singapore property developers Pre/(Disc.) to RNAV

Price to Book Mkt DEVELOPERS & Cap ASSET MANAGERS (US$m) Rec Lcy HKL 15,952 O US$ CAPL 8,094 O S$ GLP 6,882 O S$ CIT 4,926 O S$ UOL 3,321 O S$ FCL 3,019 O S$ WINGT 915 N S$ ARA 778 O S$ Total (MQ) 43,887 FSTREH Index FSSTI Index

44,614 267,804

Pr TP 6.78 9.63 2.71 4.00 2.03 2.97 7.74 10.68 5.96 8.00 1.49 2.24 1.68 1.97 1.32 2.26

Div Yld 3% 4% 3% 2% 3% 6% 2% 4% 3%

Total Ret 45% 51% 49% 40% 37% 56% 19% 76% 46%

Today 0.58 0.67 0.88 0.82 0.60 0.68 0.42 3.05 0.72

10-yr Avg. 0.83 1.24 1.18 1.63 0.79 0.77 0.76 5.08

EPS growth 15E 16E -6% 28% -12% 41% 19% 22% 32% -14% 15% -3% 9% -20% 264% -13% -14% -2% 9% 18%

Today NA -46% NA -42% -44% -41% -49% NA -44%

5-yr RNAV/ Avg. NAV NA 9.63 -36% 5.00 NA 2.97 -9% 13.35 -36% 10.65 -30% 2.54 -38% 3.29 NA 2.26 -29%

Net Debt to Total Equity 10% 57% 12% 27% 28% 72% 9% 14% 27%

Price Pfm 1-mth 3-mth 0% -19% -1% -22% -6% -21% -9% -22% -4% -15% -4% -17% 3% -12% -7% -24% -3% -20%

675 2,802

-3% -3%

-18% -16%

Ytd 0% -17% -18% -25% -15% -12% 2% -21% -11%

ADTV (US$m) 20-day 6-mth 13.9 13.3 24.5 27.6 44.9 32.7 6.4 9.7 5.9 5.9 0.3 0.6 1.1 2.6 1.1 0.8

-10% -17%

Source: Bloomberg, Macquarie Research, October 2015; Priced as of 1st October 2015. *For companies with FY ending Mar/Jun, 2015-16E refers to FY16/17E.

Fig 8 China property developers’ comps

BBG code Company China Developers 688 China Overseas Land 1109 China Res Land 2007 Country Garden 960 Longfor 813 Shimao Property Holdings 3333 Evergrande Real Estate 917 New World China* 3377 Sino-Ocean 410 SOHO China 2777 Guangzhou R&F 1918 Sunac China 817 Franshion Properties 3383 Agile 1813 KWG 272 Shui On Land YLLG Yanlord (SG$) 81 China Overseas Grand Oceans 173 K Wah Int'l 1628 Yuzhou 3900 Greentown Mkt cap weighted average

Mkt Cap (US$m) Rec Lcy 29,772 16,241 8,132 7,338 5,207 8,238 5,146 4,093 2,017 2,919 1,772 2,685 2,037 1,964 1,844 1,405 671 1,108 886 1,548 105,021

O O O O O U N O U O O O N O N O N O O O

HK$ HK$ HK$ HK$ HK$ HK$ HK$ HK$ HK$ HK$ HK$ HK$ HK$ HK$ HK$ S$ HK$ HK$ HK$ HK$

Pr 23.40 18.16 2.79 9.76 11.62 4.40 4.59 4.22 3.01 7.02 4.04 1.95 4.03 5.08 1.78 1.03 2.28 3.08 1.80 5.55

Up (%)

Div Yld

Total Ret

Pre/ (Disc) RNAV

PB (x)

30.72 31% 36.96 104% 4.15 49% 12.69 30% 19.85 71% 2.81 -36% 4.26 -7% 6.15 46% 3.02 0% 12.23 74% 6.82 69% 3.88 99% 3.42 -15% 7.42 46% 2.10 18% 1.22 18% 4.27 87% 4.55 48% 3.13 74% 9.09 64%

1.8% 2.3% 6.6% 3.8% 7.7% 11.5% 1.5% 3.7% 4.3% 11.0% 6.7% 5.0% 5.5% 7.4% 3.5% 1.4% 2.8% 4.9% 10.1% 0.0% 4.2%

33% 106% 55% 34% 79% -25% -6% 49% 5% 85% 76% 104% -10% 53% 22% 20% 90% 53% 84% 64% 47%

1% -31% -37% -39% -59% -38% -20% -53% -28% -57% -74% -60% -69% -41% -44% -34% -71% -70% -61% -69% -30%

1.43 1.13 0.82 0.97 0.71 0.51 0.66 0.60 0.33 0.36 0.69 0.47 0.34 0.60 0.27 0.47 0.42 0.34 0.62 0.37 0.93

TP

ROE (%) 15E 16E

EPS / DPU* growth 15E 16E

16.1 13.1 17.0 13.5 16.3 5.4 6.0 7.7 0.8 11.1 20.1 7.6 8.8 13.6 1.7 5.7 13.8 4.4 16.5 10.6 12.5

12% 17% 5% -2% 3% 48% 43% -8% -82% 10% -3% -18% -16% 14% 73% 96% 45% 55% 40% -11% 14%

13.8 14.8 17.9 12.5 15.1 5.5 5.7 8.6 1.1 12.8 17.3 6.9 7.9 14.7 3.3 8.8 15.5 8.8 18.3 11.2 12.2

1% 22% 20% 6% 8% 3% 1% 21% 44% 18% 5% -5% -2% 24% 108% 67% 29% 99% 29% 21% 13%

Net gearing 2015

1-mth

-24% 61% 46% 32% 108% 84% 39% 80% 23% 89% 53% 61% 84% 35% 83% 30% 5% 32% 70% 82% 37%

13% 5% 7% 6% 20% -8% 0% 13% 2% 4% 6% 13% 11% 13% 8% 2% 2% -6% 10% 3% 7%

Share price pfm. 3-mth 6-mth -9% -22% -16% -22% -19% 1% 3% -24% -37% -23% -49% -26% -20% -17% -17% -8% -37% -22% -9% -40% -15%

-3% -12% -8% -14% -25% 20% -8% -6% -40% -9% -35% -12% -13% -4% -1% 5% -34% -17% -1% -13% -8%

Source: Bloomberg, Macquarie Research, October 2015; Priced as of 1st October 2015. *For companies with FY ending Mar/Jun, 2015-16E refers to FY16/17E.

5 October 2015

5

Macquarie Research

CapitaLand

“One CapitaLand” Strategy President and Group CEO Lim Ming Yan assumed the CEO role in January 2013. In his maiden briefing, he announced a realignment of the organisation structure to focus on four key business units (CAPL Singapore, CAPL China, CMA and Ascott). The aim was to have a simple and nimble structure given the changing market dynamics, with a sharper focus on key markets in Singapore and China (Strategy from new CEO). In over two and a half years, the management team has indeed simplified the group structure with the tagline “One CapitaLand” as the developer of all asset classes with five listed REITs for asset recycling whenever appropriate. The main corporate actions undertaken to arrive at the One CapitaLand structure was the divestment of its entire stake in AustraLand Property Group, in two tranches in Nov 2013 and Feb 2014. This was soon followed by the privatisation of CapitaMalls Asia, its shopping mall SBU, in July 2014.

Fig 9 CapitaLand group structure

Source: Company presentation slides, October 2015. 1 Include StorHub and development businesses in Vietnam, Indonesia, Japan and others. 2 Includes portfolio in Malaysia

Fig 10 RNAV split: REITs & Fund Management ~37% of total Ascott (ex ART) 6%

CL SG (ex CCT) CCT (32%) 6% 2%

Fund mgmt 8%

10% SG malls

CT (29%) 12%

ART (47%) 5%

CMA (ex REITs) 28%

16% China malls

CMMT (36%) 1%

CL China 24%

Source: Macquarie Research, October 2015

5 October 2015

CRCT (27%) 8%

REITs: 29%

Fig 11

100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0%

EBIT split: Resi component ~22-31% of total

29%

34%

14%

28%

31%

15%

16%

18% 20% 11%

25% 25%

14%

0% 8%

12%

14%

FY14

FY15

0% 9% 22% FY16E

26% 13%

32% 0% 12% 10% FY17E

China resi

SG resi

Asset sale

China malls & RC

SG malls & offices (ex REITs)

REITs & Fund mgmt

35%

0% 8% 18% FY18E

Source: Macquarie Research, October 2015

6

Macquarie Research

CapitaLand

Focus on Integrated projects CapitaLand’s focus is to develop more mixed-used integrated projects in Asia, riding on the track record of the development of the “Raffles City” brand in Singapore and China. Raffles City Singapore commenced operations in 1985. CapitaLand exported this concept to China and the first Raffles City in China was opened in Shanghai in 2003. Since then CapitaLand invested in seven more Raffles City projects in China, making a total of eight. Currently four are operational and four are slated to open, one each from this year. Outside of China, the group is undertaking a mixed used development in Jakarta. The plan is to have another 12 Integrated Developments across Asia with about half from China and the balanced across key Asian cities.

Embracing technology in real estate solutions CapitaLand has also been looking at revamping its I.T. systems and processes to enhance efficiency and productivity across its real estate value chain. The goal is to be the most tech savvy real estate company in Asia, leveraging technology in real estate. For example, data-mining customer shopping patterns across its 86 malls in Asia or smart building systems that optimises energy consumption, maintenance and operations. Recently, The Ascott Group invested in Tujia.com, China’s largest online apartment sharing platform. This could lead to Ascott operating and franchising serviced apartments in China, which could augment the core strength of Ascott, which already has 14,000 units in China out of the global footprint of 40,000 units.

The longer-term target – RoE target of 8% to 12% So far so good. In 2014, the group articulated an RoE target of 8-12% within three to five years. CapitaLand achieved a 7.1% and 7.4% in FY14 and 1H15 (annualised). That said, quality of earnings deteriorated with core earnings contribution falling from ~60% of total PATMI to ~40% in 1H15, similar to 2010-12 average (Fig 12). Longer term, our expectation is for core net profit to account for ~50-60% of group net profit.

Fig 12 We think low-mid range of CAPL’s ROE target is within reach (S$m) 11.1%

1,600 10.2% 1,400 1,200

10.9% 9.7%

7.3%

1,000

9.5%

7.1% 6.2%

10.0% 7.0%

8.0%

6.2% 5.4%

800

12.0%

5.0%

5.2%

6.0%

600

4.0%

400 200

2.0% 712

352

360

2010 2011 2012 MQ core op. PATMI

503

705

618

867

831

1,167

0.0% 2013 2014 2015E* 2016E 2017E 2018E PATMI ROE (RHS) ROE (with reval, RHS)*

Source: Company data, Macquarie Research, October 2015. *Dip in 2015E MQ core PATMI due to lower asset sale and residential profits (see Fig 15 & 17). Stripping this impact, we estimate growth at 17%

We think only low to mid range of ROE target (8-10%) is within reach through core and… Going forward, we are forecasting 24% core earnings CAGR (15-18E) to be driven by (i) higher China residential profit, (ii) completion of 4 Raffles City projects and 7 retail malls in China and (iii) organic rent growth from existing investment properties. Putting our core earnings and asset revaluation (we only forecast revaluation gains from completion of investment properties) estimates, we see ROE only at 5-7% over the next three years. …revaluation profit, … Based on our back-of-the-envelope calculation, in order to reach the 10% ROE mark, CAPL would have to see its value of investment properties (effective stake: ~S$28bn) growing by 3% per year (~S$850m/year), which can easily be achieved through organic rent growth. 5 October 2015

7

Macquarie Research

CapitaLand

…which would be crystallised through asset recycling in the future. This year, the group sold its 30% stake in PWC office building in Singapore for S$150m and divested Bedok Mall to CapitaLand Mall Trust for S$783m. We think over the medium term, CAPL can consider selling its 50% stake in CapitaGreen (office), Star Vista (retail), Westgate (retail) and ION Orchard (retail). The Ascott Group also is active is divestment of properties to Ascott Residence Trust. Over the longer term as its various Raffles City China projects are operational, the group could also consider an IPO.

Fig 13

Fig 14 CAPL’s estimated PATMI split

CAPL’s EBIT split

(S$M)

(S$ m) 2,500

63 324

+14% CAGR

2,000

57 231 48 183

1,500

309 1,000

492

54 199

60 277

+24% CAGR

1,200

149

1,000

87

739 593

74 117

800

436

351 410

1,400

469

507

115 201

454

193

130

328 119

407

386

411

440

504

(85)

(95)

(78)

(75)

(72)

2014

2015E

2016E

2017E

2018E

600 521

81 117

150

131

400 200

500 684

716

626

667

2015E

2016E

804

-

2014 CMA

CAPL SG

CAPL China

Ascott

2017E

Corporate & Others

Source: Company data, Macquarie Research, October 2015

5 October 2015

2018E

(200) CMA

CAPL SG

CAPL China

Ascott

Corporate & Others

Source: Company data, Macquarie Research, October 2015. * We forecast lower minority interest contribution as CAPL has majority stakes in most of its newly completed RC and China mall projects.

8

Macquarie Research

CL SG – 8% RNAV; 16% of core PATMI  





CL SG is CAPL’s residential business and office investment properties (mostly held under CCT) in Singapore.

CapitaLand

Fig 15 CL SG earnings outlook to remain weak (S$m)

350

Weak earnings growth in 2015E was mainly due to lower residential profits and asset disposal (recognised as core earnings). We expect core earnings to remain weak in 2016, given that Bedok Mall and PWC building were divested in 2H15.

300

2017-18E earnings recovery dependent on 3 high-end, unlaunched, residential projects – The Nassim, Cairnhill and Coronation sites. We forecast ~20% EBT margin here.

100

8.0%

8.2%

9.0% 7.6% 7.1%

8.0%

7.0%

7.0% 250

6.0%

200

5.0%

150

4.0% 3.0% 2.0%

50 326 193

153 130

119 119

150 150

131 131

2014

2015E

2016E

2017E

2018E

1.0%

-

We also note that CAPL has ~1,300units left to be sold (~3.5yrs, assuming a run rate of 370 units/yr)

0.0% PATMI (LHS)

MQ core PATMI (LHS, est.)

ROE

ROE (with reval)*

Source: Macquarie Research, October 2015

Source: Company data, Macquarie Research, October 2015. *We do not forecast revaluation gain (Except post-completion of investment properties). We assume a 3% reval gains on pro-rata GAV of S$6bn.

CL China – 24% RNAV; 25% of core PATMI

Fig 16 CL China boosted by higher resi recognition and completion of Raffles City projects







CL China is CAPL’s residential business and integrated projects in China. It is the key driver of CAPL’s core earnings 24% CAGR (15-18E). 2015E core earnings should be flat largely due to lower resi units handover (profits only recognised upon completion). ~2K units were handed over in 1H15 vs.~ 5K in 1H14. 2016 will see higher profit recognition from 9 completed projects vs. 5 in 2015. Raffles City (RC) profit contribution should accelerate in 2017-18E from completion of RC Shenzhen and Chongqing, which CL China has >60% stake.

700

9.0%

10.0% 9.0%

600

7.3%

8.0% 6.2%

500

7.0% 5.3%

6.0%

400

5.0% 300

4.0%

2.8%

3.0%

200

2.0% 100 192 117

398 117

328 328

273 201

597 454

2014

2015E

2016E

2017E

2018E

-

1.0% 0.0%

PATMI (LHS)

MQ core PATMI (LHS, est.)

ROE

ROE (with reval)*

Source: Macquarie Research, October 2015

Source: Company data, Macquarie Research, October 2015. *We do not forecast revaluation gain (Except post-completion of investment properties). We assume a 4% asset growth on pro-rata GAV of S$3.8bn

CMA – 49% RNAV; 48% of core PATMI

Fig 17 CMA steady operating profit growth





CMA is CAPL’s retail mall business in China and Singapore. It has 48 operational malls (excluding RC) in China. Most of which are CMA associates & JVs (30-45% stake). 2015E core earnings could dip due to asset disposal in 2014 (Westgate office tower in Singapore). Going forward, we see steady 10% earnings CAGR from organic rent growth and the completion of 7 malls over the next 3 years.

700

10.8%

10.9%

12% 9.9%

10.0%

10.0%

600

10%

500

8%

400 6% 300 4%

200

2%

100 635 407

485 386

434 411

482 440

523 504

2014

2015E

2016E

2017E

2018E

-

Source: Macquarie Research, October 2015

5 October 2015

0% PATMI (LHS)

MQ core PATMI (LHS, est.)

ROE

ROE (with reval)*

Source: Company data, Macquarie Research, October 2015. We do not forecast revaluation gain (Except post-completion of investment properties). We assume a 4% asset growth on pro-rata GAV of S$12bn.

9

CAPL residential project pipeline

10

CapitaLand

Source: Company data, URA and Macquarie Research, October 2015

Macquarie Research

5 October 2015

Fig 18

Macquarie Research

CapitaLand

Other stocks mentioned in the report: CapitaLand Mall Trust (CT SP, S$1.91, Outperform, TP: S$2.40) CapitaLand Commercial Trust (CCT SP, S$1.33, Outperform, TP: S$1.86) CapitaLand Retail China Trust (CRCT SP, S$1.37, Outperform, TP: S$1.90) Ascott Residence Trust (ART SP, S$1.19, Outperform, TP: S$1.45)

5 October 2015

11

Macquarie Research

CapitaLand

Macquarie Quant View

219/898 Global rank in Real Estate % of BUY recommendations Number of Price Target downgrades Number of Price Target upgrades

Attractive

Displays where the company’s ranked based on the fundamental consensus Price Target and Macquarie’s Quantitative Alpha model. Two rankings: Local market (Singapore) and Global sector (Real Estate)

Fundamentals

The quant model currently holds a reasonably positive view on CapitaLand. The strongest style exposure is Earnings Momentum, indicating this stock has received earnings upgrades and is well liked by sell side analysts. The weakest style exposure is Profitability, indicating this stock is not efficiently converting its investments to earnings as proxied by ratios such as ROE, ROA etc.

Quant Local market rank

89% (16/18) 3 0

Global sector rank

Macquarie Alpha Model ranking

Factors driving the Alpha Model

A list of comparable companies and their Macquarie Alpha model score (higher is better).

For the comparable firms this chart shows the key underlying styles and their contribution to the current overall Alpha score.

China Resources Land China Overseas Land

1.2

China Resources Land

1.2

China Overseas Land CapitaLand

CapitaLand

0.6

UOL Group

0.5

UOL Group

Country Garden

0.5

Country Garden

City Developments

0.4

City Developments

-3.0

-2.0

-1.0

0.0

1.0

2.0

3.0

-100% Valuations

-80%

-60%

Growth

-40%

-20%

Profitability

0%

Earnings Momentum

20%

40%

60%

Price Momentum

80%

100%

Quality

Macquarie Earnings Sentiment Indicator

Drivers of Stock Return

The Macquarie Sentiment Indicator is an enhanced earnings revisions signal that favours analysts who have more timely and higher conviction revisions. Current score shown below.

Breakdown of 1 year total return (local currency) into returns from dividends, changes in forward earnings estimates and the resulting change in earnings multiple.

China Resources Land

China Resources Land

0.0

China Overseas Land

China Overseas Land

0.0

CapitaLand

CapitaLand

-1.0

UOL Group

UOL Group

-0.1

Country Garden

-0.2

Country Garden

City Developments

-0.2

City Developments

-3.0

-2.0

-1.0

0.0

1.0

2.0

3.0

-20%

Dividend Return

-10%

0%

Multiple Return

10%

Earnings Outlook

20%

1Yr Total Return

What drove this Company in the last 5 years

How it looks on the Alpha model

Which factor score has had the greatest correlation with the company’s returns over the last 5 years.

A more granular view of the underlying style scores that drive the alpha (higher is better) and the percentile rank relative to the sector and market.

⇐ Negatives Positives ⇒

EV/EBITDA (NTM) Price to Book FY0

23%

Price to Book LTM

22%

IRR Dividend Disc. Model

21%

Turnover(USD) 125 Day CFROI Number of Shares Increase… Interest Cover -40%

Normalized Score

25%

-31% -33% -34% -37% -20%

0%

20%

40%

Alpha Model Score Valuation Growth Profitability Earnings Momentum Price Momentum Quality Capital & Funding Liquidity Risk Technicals & Trading

0

Percentile relative to sector(/898)

Percentile relative to market(/164)

0.56 -0.13 -0.03 -0.21 0.30 -0.12 -0.06 -0.02 -0.21 -0.13 -0.07

0

0

1

50

100 0

50

1

100

Source (all charts): FactSet, Thomson Reuters, and Macquarie Research. For more details on the Macquarie Alpha model or for more customised analysis and screens, please contact the Macquarie Global Quantitative/Custom Products Group ([email protected])

5 October 2015

12

Macquarie Research

CapitaLand

CapitaLand (CAPL SP, Outperform, Target Price: S$4.00) Interim Results

1H/15A

2H/15E

1H/16E

2H/16E

Net Property Income Development Income Other Revenue Total Revenue Management Fees Other Expenses EBITDA Dep & Amortisation EBIT Net Interest Income Associates Exceptionals Other Pre-Tax Income Pre-Tax Profit Tax Expense Net Profit Minority Interests

m m m m m m m m m m m m m m m m m

1,946 0 0 1,946 0 -1,051 895 0 895 -240 362 0 0 1,017 -194 822 -197

2,354 0 0 2,354 0 -1,595 758 0 758 -208 274 0 0 825 -113 712 -280

2,255 0 0 2,255 0 -1,639 616 0 616 -225 407 0 0 798 -104 694 -249

2,255 0 0 2,255 0 -1,639 616 0 616 -225 407 0 0 798 -104 694 -249

Reported Earnings Adjusted Earnings

m m

625 241

432 377

445 434

EPS (rep) EPS (adj) EPS Growth yoy (adj)

¢ ¢ %

14.7 5.6 -17.8

10.2 8.9 -8.4

EBITDA Margins EBIT Margins Earnings Split Revenue Growth EBIT Growth

% % % % %

46.0 46.0 38.9 30.8 21.0

Profit & Loss Ratios

2014A

2015E

2016E

2017E

Net Property Income Development Income Other Revenue Total Revenue Management Fees Other Expenses EBITDA Dep & Amortisation EBIT Net Interest Income Associates Exceptionals Other Pre-Tax Income Pre-Tax Profit Tax Expense Net Profit Minority Interests

m m m m m m m m m m m m m m m m m

3,925 0 0 3,925 0 -2,428 1,496 0 1,496 -439 970 0 0 2,027 -267 1,760 -599

4,300 0 0 4,300 0 -2,647 1,653 0 1,653 -448 636 0 0 1,842 -307 1,534 -477

4,510 0 0 4,510 0 -3,279 1,232 0 1,232 -450 814 0 0 1,595 -208 1,388 -498

4,489 0 0 4,489 0 -3,119 1,370 0 1,370 -451 788 0 0 1,707 -236 1,471 -526

445 434

Reported Earnings Adjusted Earnings

m m

1,161 705

1,057 618

889 867

945 831

10.5 10.2 81.0

10.5 10.2 14.9

EPS (rep) EPS (adj) EPS Growth (adj) PE (rep) PE (adj)

¢ ¢ % x x

27.3 16.6 40.2 10.2 16.8

24.8 14.5 -12.3 11.2 19.1

20.9 20.4 40.6 13.3 13.6

22.2 19.6 -4.2 12.5 14.2

32.2 32.2 61.1 -3.4 0.2

27.3 27.3 50.0 15.9 -31.2

27.3 27.3 50.0 -4.2 -18.8

Total DPS Total Div Yield Basic Shares Outstanding Diluted Shares Outstanding

¢ % m m

9.0 3.2 4,259 4,258

10.0 3.6 4,248 4,258

8.4 3.0 4,248 4,248

8.9 3.2 4,248 4,248

2014A

2015E

2016E

2017E

2014A

2015E

2016E

2017E

1,232 -208 0 -450 2,143 2,717 0 -1,879 0 0 -1,879 -356 0 0 -450 -805

1,370 -236 0 -451 1,939 2,621 0 -1,879 0 0 -1,879 -378 0 0 -451 -829

Revenue Growth EBITDA Growth EBIT Growth EBITDA Margins EBIT Margins Net Profit Margins Payout Ratio EV/EBITDA EV/EBIT

% % % % % % % x x

11.8 7.7 7.7 38.1 38.1 18.0 54.3 10.0 10.0

9.6 10.5 10.5 38.5 38.5 14.4 68.5 10.7 10.7

4.9 -25.5 -25.5 27.3 27.3 19.2 41.0 12.0 12.0

-0.5 11.3 11.3 30.5 30.5 18.5 45.5 11.4 11.4

Balance Sheet Ratios ROE ROA ROIC Net Debt/Equity Interest Cover Price/Book Book Value per Share

% % % % x x

7.1 3.4 3.8 57.0 3.4 0.7 3.9

6.2 3.7 3.8 58.7 3.7 0.7 4.1

5.0 2.7 2.8 56.2 2.7 0.7 4.2

5.2 2.9 3.0 54.2 3.0 0.6 4.4

Profit & Loss

Cashflow Analysis EBITDA Tax Paid Chg in Working Capital Net Interest Paid Other Operating Cashflow Acquisitions Capex Asset Sales Other Investing Cashflow Dividend (Ordinary) Equity Raised Debt Movements Other Financing Cashflow

m m m m m m m m m m m m m m m m

1,496 -256 0 -439 198 999 0 -1,431 1,208 -116 -339 -341 0 50 -3,981 -4,272

1,653 -307 0 -448 820 1,718 0 -1,879 0 0 -1,879 -423 0 300 -448 -570

Net Chg in Cash/Debt

m

-3,612

-732

33

-87

Free Cashflow

m

-432

-161

838

742

2014A

2015E

2016E

2017E

2,749 963 7,674 17,149 1,047 0 14,530 44,113 3,070 3,469 12,517 1,849 0 20,905 16,758 6,451 23,209 44,113

2,018 963 6,653 19,597 1,127 0 15,167 45,525 3,070 3,000 13,286 1,849 0 21,205 17,392 6,928 24,320 45,525

2,051 963 4,931 21,425 1,207 0 15,980 46,557 3,070 3,000 13,286 1,849 0 21,205 17,926 7,426 25,352 46,557

1,964 963 3,294 23,373 1,287 0 16,768 47,650 3,070 3,000 13,286 1,849 0 21,205 18,493 7,952 26,445 47,650

Balance Sheet Cash Receivables Inventories Investments Fixed Assets Intangibles Other Assets Total Assets Payables Short Term Debt Long Term Debt Provisions Other Liabilities Total Liabilities Shareholders' Funds Minority Interests Total S/H Equity Total Liab & S/H Funds

m m m m m m m m m m m m m m m m m m

All figures in SGD unless noted. Source: Company data, Macquarie Research, October 2015

5 October 2015

13

Macquarie Research

CapitaLand

Important disclosures: Recommendation definitions

Volatility index definition*

Financial definitions

Macquarie - Australia/New Zealand Outperform – return >3% in excess of benchmark return Neutral – return within 3% of benchmark return Underperform – return >3% below benchmark return

This is calculated from the volatility of historical price movements.

All "Adjusted" data items have had the following adjustments made: Added back: goodwill amortisation, provision for catastrophe reserves, IFRS derivatives & hedging, IFRS impairments & IFRS interest expense Excluded: non recurring items, asset revals, property revals, appraisal value uplift, preference dividends & minority interests

Benchmark return is determined by long term nominal GDP growth plus 12 month forward market dividend yield Macquarie – Asia/Europe Outperform – expected return >+10% Neutral – expected return from -10% to +10% Underperform – expected return <-10% Macquarie First South - South Africa Outperform – expected return >+10% Neutral – expected return from -10% to +10% Underperform – expected return <-10% Macquarie - Canada Outperform – return >5% in excess of benchmark return Neutral – return within 5% of benchmark return Underperform – return >5% below benchmark return Macquarie - USA Outperform (Buy) – return >5% in excess of Russell 3000 index return Neutral (Hold) – return within 5% of Russell 3000 index return Underperform (Sell)– return >5% below Russell 3000 index return

Very high–highest risk – Stock should be expected to move up or down 60–100% in a year – investors should be aware this stock is highly speculative. High – stock should be expected to move up or down at least 40–60% in a year – investors should be aware this stock could be speculative. Medium – stock should be expected to move up or down at least 30–40% in a year. Low–medium – stock should be expected to move up or down at least 25–30% in a year. Low – stock should be expected to move up or down at least 15–25% in a year. * Applicable to Asia/Australian/NZ/Canada stocks only

EPS = adjusted net profit / efpowa* ROA = adjusted ebit / average total assets ROA Banks/Insurance = adjusted net profit /average total assets ROE = adjusted net profit / average shareholders funds Gross cashflow = adjusted net profit + depreciation *equivalent fully paid ordinary weighted average number of shares All Reported numbers for Australian/NZ listed stocks are modelled under IFRS (International Financial Reporting Standards).

Recommendations – 12 months Note: Quant recommendations may differ from Fundamental Analyst recommendations

Recommendation proportions – For quarter ending 30 June 2015 Outperform Neutral Underperform

AU/NZ 46.23% 37.67% 16.10%

Asia 58.36% 25.65% 15.99%

RSA 47.27% 29.09% 23.64%

USA 44.20% 49.29% 6.52%

CA 60.65% 34.19% 5.16%

EUR 43.01% (for US coverage by MCUSA, 9.68% of stocks followed are investment banking clients) 40.93% (for US coverage by MCUSA, 5.53% of stocks followed are investment banking clients) 16.06% (for US coverage by MCUSA, 1.38% of stocks followed are investment banking clients)

Company-specific disclosures: Important disclosure information regarding the subject companies covered in this report is available at www.macquarie.com/disclosures. Date 19-Feb-2014 13-Nov-2013 25-Jul-2013 21-Feb-2013 03-Jan-2013 09-Nov-2012

Stock Code (BBG code) CAPL SP CAPL SP CAPL SP CAPL SP CAPL SP CAPL SP

Recommendation Outperform Outperform Outperform Neutral Neutral Outperform

Target Price S$4.09 S$4.11 S$4.16 S$4.09 S$3.90 S$3.89

Analyst certification: We hereby certify that all of the views expressed in this report accurately reflect our personal views about the subject company or companies and its or their securities. We also certify that no part of our compensation was, is or will be, directly or indirectly, related to the specific recommendations or views expressed in this report. The Analysts responsible for preparing this report receive compensation from Macquarie that is based upon various factors including Macquarie Group Ltd total revenues, a portion of which are generated by Macquarie Group’s Investment Banking activities. General disclaimers: Macquarie Securities (Australia) Ltd; Macquarie Capital (Europe) Ltd; Macquarie Capital Markets Canada Ltd; Macquarie Capital Markets North America Ltd; Macquarie Capital (USA) Inc; Macquarie Capital Securities Ltd and its Taiwan branch; Macquarie Capital Securities (Singapore) Pte Ltd; Macquarie Securities (NZ) Ltd; Macquarie First South Securities (Pty) Limited; Macquarie Capital Securities (India) Pvt Ltd; Macquarie Capital Securities (Malaysia) Sdn Bhd; Macquarie Securities Korea Limited and Macquarie Securities (Thailand) Ltd are not authorized deposit-taking institutions for the purposes of the Banking Act 1959 (Commonwealth of Australia), and their obligations do not represent deposits or other liabilities of Macquarie Bank Limited ABN 46 008 583 542 (MBL) or MGL. MBL does not guarantee or otherwise provide assurance in respect of the obligations of any of the above mentioned entities. MGL provides a guarantee to the Monetary Authority of Singapore in respect of the obligations and liabilities of Macquarie Capital Securities (Singapore) Pte Ltd for up to SGD 35 million. This research has been prepared for the general use of the wholesale clients of the Macquarie Group and must not be copied, either in whole or in part, or distributed to any other person. If you are not the intended recipient you must not use or disclose the information in this research in any way. If you received it in error, please tell us immediately by return e-mail and delete the document. We do not guarantee the integrity of any e-mails or attached files and are not responsible for any changes made to them by any other person. MGL has established and implemented a conflicts policy at group level (which may be revised and updated from time to time) (the "Conflicts Policy") pursuant to regulatory requirements (including the FCA Rules) which sets out how we must seek to identify and manage all material conflicts of interest. Nothing in this research shall be construed as a solicitation to buy or sell any security or product, or to engage in or refrain from engaging in any transaction. In preparing this research, we did not take into account your investment objectives, financial situation or particular needs. Macquarie salespeople, traders and other professionals may provide oral or written market commentary or trading strategies to our clients that reflect opinions which are contrary to the opinions expressed in this research. Macquarie Research produces a variety of research products including, but not limited to, fundamental analysis, macro-economic analysis, quantitative analysis, and trade ideas. Recommendations contained in one type of research product may differ from recommendations contained in other types of research, whether as a result of differing time horizons, methodologies, or otherwise. Before making an investment decision on the basis of this research, you need to consider, with or without the assistance of an adviser, whether the advice is appropriate in light of your particular investment needs, objectives and financial circumstances. There are risks involved in securities trading. The price of securities can and does fluctuate, and an individual security may even become valueless. International investors are reminded of the additional risks inherent in international investments, such as currency fluctuations and international stock market or economic conditions, which may adversely affect the value of the investment. This research is based on information obtained from sources believed to be reliable but we do not make any representation or warranty that it is accurate, complete or up to date. We accept no obligation to correct or update the information or opinions in it. Opinions expressed are subject to change without notice. No member of the Macquarie Group accepts any liability whatsoever for any direct, indirect, consequential or other loss arising from any use of this research and/or further communication in relation to this research. Clients should contact analysts at, and execute transactions

5 October 2015

14

Macquarie Research

CapitaLand

through, a Macquarie Group entity in their home jurisdiction unless governing law permits otherwise. The date and timestamp for above share price and market cap is the closed price of the price date. #CLOSE is the final price at which the security is traded in the relevant exchange on the date indicated. Country-specific disclaimers: Australia: In Australia, research is issued and distributed by Macquarie Securities (Australia) Ltd (AFSL No. 238947), a participating organisation of the Australian Securities Exchange. New Zealand: In New Zealand, research is issued and distributed by Macquarie Securities (NZ) Ltd, a NZX Firm. Canada: In Canada, research is prepared, approved and distributed by Macquarie Capital Markets Canada Ltd, a participating organisation of the Toronto Stock Exchange, TSX Venture Exchange & Montréal Exchange. 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5 October 2015

15

Asia Research Head of Equity Research Peter Redhead (Global – Head) Matt Nacard (Asia – Head)

Software and Internet (852) 3922 4836 (852) 3922 1362

Automobiles/Auto Parts Janet Lewis (China) Zhixuan Lin (China) Amit Mishra (India) Lyall Taylor (Indonesia) Takuo Katayama (Japan) James Hong (Korea)

(852) 3922 5417 (8621) 2412 9006 (9122) 6720 4084 (6221) 2598 8489 (813) 3512 7856 (822) 3705 8661

Banks and Non-Bank Financials Matthew Smith (China) Suresh Ganapathy (India) Lyall Taylor (Indonesia) Alastair Macdonald (Japan) Chan Hwang (Korea) Gilbert Lopez (Philippines) Thomas Stoegner (Singapore) Dexter Hsu (Taiwan) Passakorn Linmaneechote (Thailand)

(8621) 2412 9022 (9122) 6720 4078 (6221) 2598 8489 (813) 3512 7476 (822) 3705 8643 (632) 857 0892 (65) 6601 0854 (8862) 2734 7530 (662) 694 7728

Conglomerates Gilbert Lopez (Philippines)

(632) 857 0892

Consumer and Gaming Linda Huang (China, Hong Kong) Kai Tan (China) Zibo Chen (Hong Kong) Amit Mishra (India) Fransisca Widjaja (Indonesia) Hendy Soegiarto (Indonesia) Toby Williams (Japan) HongSuk Na (Korea) Karisa Magpayo (Philippines) Somesh Agarwal (Singapore) Best Waiyanont (Thailand)

(852) 3922 4068 (852) 3922 3720 (852) 3922 1130 (9122) 6720 4084 (6221) 2598 8368 (6221) 2598 8369 (813) 3512 7392 (822) 3705 8678 (632) 857 0899 (65) 6601 0840 (662) 694 7993

Emerging Leaders Jake Lynch (China, Asia) Neel Sinha (ASEAN) Timothy Lam (Hong Kong) Kwang Cho (Korea)

(8621) 2412 9007 (65) 6601 0562 (852) 3922 1086 (822) 3705 4953

Industrials Janet Lewis (Asia) Patrick Dai (China) Inderjeetsingh Bhatia (India) Andy Lesmana (Indonesia) Lyall Taylor (Indonesia) Kenjin Hotta (Japan) James Hong (Korea) Somesh Agarwal (Singapore)

(852) 3922 5417 (8621) 2412 9082 (9122) 6720 4087 (6221) 2598 8398 (6221) 2598 8489 (813) 3512 7871 (822) 3705 8661 (65) 6601 0840

Wendy Huang (Asia) David Gibson (Asia) Hillman Chan (China, Hong Kong) Nitin Mohta (India) Nathan Ramler (Japan) Prem Jearajasingam (Malaysia)

Transport & Infrastructure (852) 3922 3378 (813) 3512 7880 (852) 3922 3716 (9122) 6720 4090 (813) 3512 7875 (603) 2059 8989

Oil, Gas and Petrochemicals James Hubbard (Asia) Aditya Suresh (Asia) Abhishek Agarwal (India) Polina Diyachkina (Japan) Anna Park (Korea) Trevor Buchinski (Thailand)

(852) 3922 1226 (852) 3922 1265 (9122) 6720 4079 (813) 3512 7886 (822) 3705 8669 (662) 694 7829

Pharmaceuticals and Healthcare Abhishek Singhal (India)

(9122) 6720 4086

Property Tuck Yin Soong (Asia, Singapore) David Ng (China, Hong Kong) Raymond Liu (China, Hong Kong) Kai Tan (China) Abhishek Bhandari (India) Andy Lesmana (Indonesia) William Montgomery (Japan) Sam Chan (Singapore) Corinne Jian (Taiwan) Patti Tomaitrichitr (Thailand)

Janet Lewis (Asia) Andrew Lee (Asia) Azita Nazrene (ASEAN) Corinne Jian (Taiwan)

Utilities & Renewables Gary Chiu (Asia) Alan Hon (Hong Kong) Inderjeetsingh Bhatia (India) Prem Jearajasingam (Malaysia) Karisa Magpayo (Philippines)

Colin Hamilton (Global) Jim Lennon Matthew Turner Rakesh Arora

(4420) 3037 4061 (4420) 3037 4271 (4420) 3037 4340 (9122) 6720 4093

Economics (65) 6601 0838 (852) 3922 1291 (852) 3922 3629 (852) 3922 3720 (9122) 6720 4088 (6221) 2598 8398 (813) 3512 7864 (65) 6601 0835 (8862) 2734 7522 (662) 694 7727

Peter Eadon-Clarke (Global) PK Basu (ASEAN) Larry Hu (China, Hong Kong) Tanvee Gupta Jain (India)

Gurvinder Brar (Global) Woei Chan (Asia) Anthony Ng (Asia) Jason Zhang (Asia)

Strategy/Country Viktor Shvets (Asia) Chetan Seth (Asia) Peter Eadon-Clarke (Japan) David Ng (China, Hong Kong) Erwin Sanft (China, Hong Kong) Rakesh Arora (India) Lyall Taylor (Indonesia) Chan Hwang (Korea) PK Basu (Malaysia) Gilbert Lopez (Philippines) Conrad Werner (Singapore) Jeffrey Ohlweiler (Taiwan)

(9122) 6720 4093 (6221) 2598 8381 (813) 3512 7886 (822) 3705 8669

Technology (813) 3512 7877 (852) 3922 4674 (9122) 6720 4090 (813) 3512 7880 (813) 3512 7854 (822) 3705 8641 (822) 3705 8659 (8862) 2734 7525

Telecoms (813) 3512 7875 (852) 3922 4762 (822) 3705 8686 (603) 2059 8989

(813) 3512 7850 (603) 2059 8993 (852) 3922 3778 (9122) 6720 4355

Quantitative / CPG

Rakesh Arora (India) Stanley Liong (Indonesia) Polina Diyachkina (Japan) Anna Park (Korea)

Nathan Ramler (Asia, Japan) Danny Chu (China, Hong Kong, Taiwan) David Lee (Korea) Prem Jearajasingam (Malaysia, Singapore)

(852) 3922 1435 (852) 3922 3589 (9122) 6720 4087 (603) 2059 8989 (632) 857 0899

Commodities

Resources / Metals and Mining

Damian Thong (Asia, Japan) Jason Sun (China, Hong Kong) Nitin Mohta (India) David Gibson (Japan) George Chang (Japan) Daniel Kim (Korea) Soyun Shin (Korea) Tammy Lai (Taiwan)

(852) 3922 5417 (852) 3922 1167 (603) 2059 8980 (8862) 2734 7522

(4420) 3037 4036 (852) 3922 1421 (852) 3922 1561 (852) 3922 1168

(852) 3922 3883 (852) 3922 4769 (813) 3512 7850 (852) 3922 1291 (852) 3922 1516 (9122) 6720 4093 (6221) 2598 8489 (822) 3705 8643 (603) 2059 8993 (632) 857 0892 (65) 6601 0182 (8862) 2734 7512

Find our research at Macquarie: www.macquarie.com.au/research Thomson: www.thomson.com/financial Reuters: www.knowledge.reuters.com Bloomberg: MAC GO Factset: http://www.factset.com/home.aspx CapitalIQ www.capitaliq.com Email [email protected] for access

Insurance Scott Russell (Asia, Japan) Leo Nakada (Japan) Chan Hwang (Korea)

(852) 3922 3567 (813) 3512 6050 (822) 3705 8643

Asia Sales Regional Heads of Sales Miki Edelman (Asia) Jeff Evans (Boston) Jeffrey Shiu (China & Hong Kong) Thomas Renz (Geneva) Bharat Rawla (India) Riaz Hyder (Indonesia) Mark Chadwick (Japan) John Jay Lee (Korea) Nik Hadi (Malaysia) Eric Roles (New York) Gino C Rojas (Philippines)

(813) 3512 7857 (1 617) 598 2508 (852) 3922 2061 (41) 22 818 7712 (9122) 6720 4100 (6221) 2598 8486 (813) 3512 7827 (822) 3705 9988 (603) 2059 8888 (1 212) 231 2559 (632) 857 0861

Regional Heads of Sales cont’d

Sales Trading cont’d

Paul Colaco (San Francisco) Ruben Boopalan (Singapore) Erica Wang (Taiwan) Angus Kent (Thailand) Ben Musgrave (UK/Europe) Julien Roux (UK/Europe)

Suhaida Samsudin (Malaysia) Michael Santos (Philippines) Chris Reale (New York) Marc Rosa (New York) Justin Morrison (Singapore) Isaac Huang (Taiwan) Dominic Shore (Thailand) Mike Keen (UK/Europe)

(1 415) 762 5003 (603) 2059 8888 (8862) 2734 7586 (662) 694 7601 (44) 20 3037 4882 (44) 20 3037 4867

Sales Trading Adam Zaki (Asia) Stanley Dunda (Indonesia)

(852) 3922 2002 (6221) 515 1555

(603) 2059 8888 (632) 857 0813 (1 212) 231 2555 (1 212) 231 2555 (65) 6601 0288 (8862) 2734 7582 (662) 694 7707 (44) 20 3037 4905