20 NOVEMBER 2013 SECTOR REPORT

SINGAPORE DEVELOPERS

DETERIORATING FROM STABLE

2014: Shift towards home oversupply begins n

The shift towards oversupply has begun We are turning more cautious on the Singapore residential market given oversupply risk. We expect the era of supply shortage to end by 2015, with pent-up demand easing and completed supply set to reach record high levels in the coming two to three years. Unsold inventory has been rising since 3Q13 as developers race to launch products ahead of home price weakness. Home demand growth has been declining since its peak in 2012 due to credit tightening and other restrictions from the seven cooling measures. Looking into 2014-15, we expect demand growth to stay under pressure due to potential interest rate increases and slower economic and population growth.

n

Margin squeeze from higher land cost Near term, developers are facing a margin squeeze from lower home prices and higher land costs. Competition for land is intense, driven by restocking needs, strategic bidding practices (eg, to protect existing sites), and new players entering the land market. Based on our land market analysis, land costs for developers in the sector accounted for 57% of development costs in 2013 on average, up from 46% in 2008. We estimate sector net margins could fall from c24% in 2012 to c10% in 2013/14, assuming launch prices stay flat. The overheated land market is forcing out local developers that are finding it difficult to restock land. Their success rate in winning sites has fallen from 23% in 2010 to 11% in 2013. This could slow developers’ earnings momentum.

n

We expect home prices to fall 15% by 2015; REDUCE CIT, BUY CAPL We expect new home volumes to fall 28% in 2013, and another 7% by 2015. With volumes typically leading prices, we expect home prices to fall 15% by 2015 (we previously forecast a fall of 10%), as unsold inventory rises. To reflect our new home price assumptions, we cut our estimates for FY14-15 EPS by 6-10% and RNAV by 2-6%, and cut our TPs by 9% on average. Stock prices also tend to lead home prices. We believe home prices will peak in 2013 and then fall. We downgrade CIT to REDUCE (from Hold) given its proxy status and large exposure to the Singapore residential market. We downgrade KPLD to HOLD (from Buy) given recent outperformance. We maintain CAPL at BUY, given trough valuations, and FNN at HOLD. We still favour Singapore developers with entrenched and diversified overseas exposure, along with asset recycling opportunities.

BNPP recommendations Company

BBG code

Rating

Share price

Target price

(SGD)

(SGD)

Upside/downside (%)

CapitaLand

CAPL SP

BUY

3.10

3.75

+20.9%

Keppel Land

KPLD SP

HOLD

3.70

3.92

+5.8%

FNN SP

HOLD

5.77

6.02

+4.3%

CIT SP

REDUCE

10.24

8.75

-14.5%

Fraser & Neave City Developments Source: BNP Paribas

Chong Kang Ho, CFA [email protected] +65 6210 1956

Our research is available on Thomson One, Bloomberg, TheMarkets.com, Factset and on http://eqresearch.bnpparibas.com/index. Please contact your salesperson for authorisation. Please see the important notice on the back page.

PREPARED BY NON-US BROKER-DEALER(S): BNP PARIBAS SECURITIES (SINGAPORE) PTE LTD, CO. REG. NO. 199801966C THIS MATERIAL HAS BEEN APPROVED FOR U.S DISTRIBUTION. ANALYST CERTIFICATION AND IMPORTANT DISCLOSURES CAN BE FOUND AT APPENDIX ON PAGE 51

Chong Kang Ho, CFA

Singapore Developers

Investment thesis

Stock implications

We are turning more cautious on the Singapore residential market given oversupply risk. We expect the era of supply shortage to end by 2015, due to a combination of rising completed supply and easing pent-up demand. Unsold inventory has risen since 3Q13 as developers race to launch products ahead of home price weakness. This also reflects declines in demand due to the effects of the seven cooling measures. Looking into 2014/15, demand growth could stay under pressure given potential interest rate increases and slower economic growth, as well as tighter immigration policies.

We expect volumes to fall 28% in 2013 and another 7% by 2015, and home prices to fall 15% (we previously forecast a fall of 10%). Our trend analysis shows volumes typically track ahead of home prices. To reflect our new home price assumptions, we cut our estimates for 2013-15 EPS by 610% and RNAV by 2-6%, and cut out TPs by 9% on average. Stock prices tend to lead home prices. We believe home prices have peaked in 2013 and will fall. We downgrade City Dev to REDUCE (from Hold), given its proxy status and large exposure to the Singapore residential market. We downgrade Keppel Land to HOLD (from Buy) given its recent outperformance. We maintain CapitaLand at BUY, on trough valuation, and FNN at HOLD. We still favour Singapore developers with entrenched and diversified overseas exposure.

Another challenge faced by developers is margin squeeze from higher land costs. The competition for land is intense, driven by restocking needs, strategic bidding practices (eg, to protect existing sites), and new players entering the land market. Land costs for developers in the sector accounted for 57% of development cost in 2013, up from 46% in 2008. We estimate net margins could fall from c24% in 20112 to c10% in 2013/14, assuming launch prices stay flat. One other implication of the overheated land market is local developers being forced out of the market as they find it difficult to restock land. Their success rate at winning sites has fallen from 23% in 2010 to 11% in 2013. This could slow developers’ earnings momentum.

CONTENTS

Risks to our sector view Our cautious view may not materialise in the event that: 1) interest rates stay low for a prolonged period, 2) cooling measures are reversed, 3) pro-immigration policies are renewed, 4) economic recovery turns out stronger than expected, thereby driving up investment sentiment, and 5) completion of supply is delayed due to a shortage of construction workers.

By analysing completed supply with demand, we estimate pent-up demand could be fully met by 2015, with the system tilting to oversupply from 2016

Entering an era of oversupply from 2016E ............................... 3 Demand: cooling measures, rate hikes & slow economic growth ............................................................................................. 5

Cumulative over/ undersupply (RHS) (URA home (excess units) URA Property price index (LHS) Tilting towards px index) oversupply again 80,000 250 Era of cumulative oversupply 60,000 200 40,000

History suggests that volumes lead prices............................... 8

150

We expect home prices to fall 15% by 2015 .......................... 10

100

Record-high land prices are not helping ................................ 12

50

Stock profiles – landbank and unbilled sales ........................ 21

0

Investment summary .................................................................. 27 Company reports ......................................................................... 33

0 (20,000) (40,000) (60,000)

Era of cumulative undersupply

(80,000)

1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013E 2014E 2015E 2016E

How do stock prices react at home price turning points? .. 26

20,000

Sources: URA; HDB; Singapore Department of Statistics; BNP Paribas

Our implied net margin model continues to show aggressive land bids in 2H13, given narrow margins (Expected dev margin buffer) 40% 30%

+1SD=18.0%

20% Mean=12.1%

10% 0%

Aggressive bid Territory

-1SD=6.2%

(10)%

19-Jul-13

31-Mar-13

26-Nov-12

10-Aug-12

21-May-12

13-Feb-12

21-Nov-11

15-Aug-11

31-Dec-10

12-May-11

1-Oct-10

15-Jun-10

9-Sep-09

19-Mar-10

10-Sep-08

8-Jan-08

30-Sep-07

1-Jan-07

(20)%

As of 14 November 2013. Sources: URA; HDB; company data; BNP Paribas NB: Net margins are based on assumptions of winner developers' all-in cost, versus nearby launch prices

2

BNP PARIBAS

20 NOVEMBER 2013

Chong Kang Ho, CFA

Singapore Developers

Entering an era of oversupply from 2016E Supply rising, pent-up demand easing In our Singapore residential supply and demand analysis, we estimate that pent-up demand began in 2007, peaked in 2012 and will ease from 2013. We expect pent up demand to be fully eradicated by 2015. With completed supply set to reach recordhigh levels in the next two to three years, we could enter an era of oversupply from 2016E, leading to a rise in vacancy rates. It took nine years to fully meet pent-up demand from 2007 to 2015, by our estimates. Similarly, we believe it could take a similar number of years for the oversupply cycle to play out and be absorbed by the end-market. This could put pressure on home prices, unless tightening policies reverse or the economy turns stronger than expected.

EXHIBIT 1: By analysing completed supply with demand, we estimate pent-up demand could be fully met by 2015 with the system tilting to oversupply from 2016 (URA home px index)

Cumulative over/ undersupply (RHS) URA Property price index (LHS) Tilting towards

(excess units)

oversupply again

250

Era of cumulative oversupply

80,000 60,000

200

40,000 20,000

150

0 100

(20,000) (40,000)

50

Era of cumulative undersupply

(60,000) (80,000)

1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013E 2014E 2015E 2016E

0

Sources: URA; HDB; Singapore Department of Statistics; BNP Paribas

EXHIBIT 2: Tracking completed supply by year (units)

Net increase in Private stock (incl. EC)

Net increase in Public HDB stock

45,000 40,000 35,000

Total real home demand p.a. at ~25k (14k for public + 11k for private + EC)

Rising completed supply

30,000 25,000 20,000 15,000 10,000 5,000 0 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013E 2014E 2015E 2016E 2017E

(5,000)

Sources: URA; HDB; Singapore Department of Statistics; BNP Paribas; Real home demand of ~25K units is based on assumption of new housing formations or marriages per year

3

BNP PARIBAS

20 NOVEMBER 2013

Chong Kang Ho, CFA

Singapore Developers

EXHIBIT 3: Large-scale shortage of housing completions in 2006-2010, when the population boomed in Singapore, led to significant pent-up demand and surging home prices Period

Public (HDB)

Private

Total

1991-1995

17,310

5,212

22,521

1996-2000

29,446

10,287

39,733

2001-2005

10,284

7,813

18,097

2006-2010

2,129

5,958

8,087

2011-2012

13,314

9,689

23,003

2013-2016E

27,790

23,326

51,115

Sources: URA; HDB; Singapore Department of Statistics; BNP Paribas

Signs of unsold inventory build More developer launches are to be expected given record-high land supply since 2010. We see developers racing to launch projects to avoid being caught in a rising supply and weaker home price environment. Moreover, only projects priced at reasonable levels or discounts are likely to enjoy higher take-up. As a result, we expect unsold inventory of units to rise. After declining for four quarters, unsold inventory has been building up since 3Q13.

EXHIBIT 5: Unsold inventory breakdown – mass market inventory rising

Sources: URA; HDB; BNP Paribas

4

3,000

15

2,000

10

1,000

5

0

0

3Q06

28

3Q13

20

1Q13

4,000

3Q12

25

29

1Q12

5,000

3Q13

2Q12

1Q11

4Q09

3Q08

2Q07

1Q06

4Q04

3Q03

2Q02

1Q01

4Q99

0

6,000

30

3Q11

50

35

1Q11

100

7,000

3Q10

150

43

40

1Q10

200

Mass

45

3Q09

8,000

Mid end

1Q09

9,000

Unsold inventory past the peak

3Q08

250

(units)

High end

50

3Q07

(index)

(%)

1Q07

Unsold inventory units (RHS) Home price index (LHS) 2 per. Mov. Avg. (Unsold inventory units (RHS))

1Q08

EXHIBIT 4: Unsold inventory rising again from 3Q13

Sources: URA; HDB; BNP Paribas

BNP PARIBAS

20 NOVEMBER 2013

Chong Kang Ho, CFA

Singapore Developers

Demand: cooling measures, rate hikes & slow economic growth On the demand side, we identify three sets of demand pressures – cooling measures, prospects of higher interest rates and slower economic growth.

Cooling measures are taking their toll The impacts are being felt from the seven rounds of cooling measures (2009-2013). In our view, the recent January 2013 measure has been effective: §

Additional buyer’s stamp duty (ABSD) of 7% (on top of the basic 3%) was imposed on Singaporeans buying second homes, 10% on permanent residents, and 15% on foreigners.

§

Credit was also tightened, eg, loan-to value ratios were reduced to 50% for Singaporeans applying for a second home loan.

§

The introduction of a total debt servicing ratio (TDSR) by the MAS in June 2013 dampened demand even further. The TDSR required mortgage loan applications to consider all debt obligations (eg, loans for homes, cars, credit cards and renovations) with a maximum ratio of 60%. This has had the effect of restricting potential buyers’ borrowing capacity and driving many to adopt a cautious approach towards making new purchase commitments. Sales volumes declined as a result.

EXHIBIT 6: New sales trend – the seven cooling measures since 2009 led to a downtrend in monthly new sales, since its peak in 1Q12 (units)

Sale in OCR

Sale in RCR

Sale in CCR

EXHIBIT 7: Resales trend – monthly resales or secondary sales have been trending down since 2009 (units) 2,500

3,500 3,000

2,000

2,500 1,500

2,000 1,500

1,000

1,000 500

Sep-07 Jan-08 May-08 Sep-08 Jan-09 May-09 Sep-09 Jan-10 May-10 Sep-10 Jan-11 May-11 Sep-11 2012 Apr-12 Aug-12 Dec-12 Apr-13 Oct-13

0

Sources: URA; HDB; BNP Paribas ; CCR = Core Central Region, or high-end, RCR = Rest of Central Region, or mid-end, OCR = Outside Central Region, or mass market

5

0

Jan-03 Jul-03 Jan-04 Jul-04 Jan-05 Jul-05 Jan-06 Jul-06 Jan-07 Jul-07 Jan-08 Jul-08 Jan-09 Jul-09 Jan-10 Jul-10 Jan-11 Jul-11 Jan-12 Jul-12 Jan-13 Jul-13

500

Sources: URA; HDB; BNP Paribas

BNP PARIBAS

20 NOVEMBER 2013

Chong Kang Ho, CFA

Singapore Developers

Prospects of higher interest rates – the next test Sales volumes could moderate further in 2014-15 if interest rates rise. Higher interest rates increase the cost of borrowing and so lower home affordability.

EXHIBIT 8: Affordability ratio – mortgage loans as a percentage of monthly household income creeping up (for private mass market segment) (mortgage/ income) 90

West region

EXHIBIT 9: Sensitivity analysis in a rising interest rate environment – impact on mortgage to income ratio ------------------------- Home price changes ------------------------

East region Mortgage rate

10%

5%

0%

-5%

-10%

0.30%

41.1

39.3

37.4

35.5

33.7

0.80%

44.4

42.3

40.3

38.3

36.3

1.30%

47.7

45.5

43.4

41.2

39.0

60

1.80%

51.2

48.9

46.5

44.2

41.9

50

2.3%

54.8

52.3

49.8

47.4

44.9

2.8%

58.6

55.9

53.3

50.6

47.9

3.3%

62.5

59.7

56.8

54.0

51.1

Northeast region

North region

80 70

40% level 40 30 20

Sources: URA; HDB; Department of Singapore Statistics; BNP Paribas

Sources: URA; HDB; Department of Singapore Statistics; BNP Paribas

EXHIBIT 10: Ratio of private home prices to household income also creeping up

EXHIBIT 11: Sibor trend and 10-year bond yield trend

(x)

(%)

14

7

13

SG 10Y bond yield (LHS)

3M Sibor (RHS)

6

12

5

11 4

10 3

9

2

8

6

0

Sources: URA; HDB; Department of Singapore Statistics; BNP Paribas

2Q98 1Q99 4Q99 3Q00 2Q01 1Q02 4Q02 3Q03 2Q04 1Q05 4Q05 3Q06 2Q07 1Q08 4Q08 3Q09 2Q10 1Q11 4Q11 3Q12 2Q13

1

1Q95 4Q95 3Q96 2Q97 1Q98 4Q98 3Q99 2Q00 1Q01 4Q01 3Q02 2Q03 1Q04 4Q04 3Q05 2Q06 1Q07 4Q07 3Q08 2Q09 1Q10 4Q10 3Q11 2Q12 1Q13

7

Sources: CEIC; Bloomberg

The authorities are concerned about the high leverage of Singaporean households, and the possible impact from higher interest rates. At the release of MAS’s 2012 annual report in July 2013, MD Ravi Menon highlighted that the central bank estimated 5-10% of households were “over-leveraged”, defined as principal and interest costs on household debt being equivalent to 60% or more of monthly income. He noted that if interest rates were to rise by 300bp, 10-15% of households would be over-leveraged. This partly explains the authorities’ move to introduce the pre-emptive TDSR in June 2013 as an effort to instil further discipline and prudence in household borrowing. Using the MAS definition of TDSR, our Asean economists estimate the average Singapore debt service for resident households was 43% of gross monthly income in 2Q13. They estimate a 100bp rise in mortgage rates would lead to a 45% debt service level, and a 300bp rise would lead to a 50% debt service level. See our Asean economics report “Singapore: uniquely constrained”, 30 Sep 2013. A Bank of Canada study in 2008 found households to be “financially vulnerable” (ie, likely to default on obligations) when debt service exceeds 40% of gross income.

6

BNP PARIBAS

20 NOVEMBER 2013

Chong Kang Ho, CFA

Singapore Developers

EXHIBIT 12: Household debt as percentage of GDP is rising (%) 100

Mortgage loans

EXHIBIT 13: Home prices versus GDP per capita GDP per capita (LHS) House price index (RHS)

(SGD) 70,000

Personal loans

90

(index) 250

60,000

200

80 70

50,000

60

40,000

150

40

30,000

100

30

20,000

50

20

50

10,000

10 0

Sources: URA; HDB; Department of Singapore Statistics; MAS; BNP Paribas

0

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

1Q01 3Q01 1Q02 3Q02 1Q03 3Q03 1Q04 3Q04 1Q05 3Q05 1Q06 3Q06 1Q07 3Q07 1Q08 3Q08 1Q09 3Q09 1Q10 3Q10 1Q11 3Q11 1Q12 3Q12 1Q13

0

Sources: URA; HDB; Department of Singapore Statistics; World Bank; BNP Paribas

Slower economic and population growth The authorities are targeting population growth to slow to 1.1-1.5% pa in order to meet its 6.9m target population by 2030, based on its Population White Paper published in January 2013. This compares with a 2.5% CAGR in 1980-2010. However, the authorities might target even lower population growth if to balance public feedback for a less crowded Singapore against economic growth. Slower population growth could lead to even weaker home demand.

EXHIBIT 14: Population growth could come in lower than the guided CAGR of 1.1-1.5% Historical

(%)

EXHIBIT 15: GDP growth y-y % (y-y %)

Projected

Average = 2.5%

30

3.0

25 2.5

20 15

2.0

10

1.5

2.8 2.3

1.0

1.3 -1.6 2.5

5 1.1 - 1.4

0 (5)

1.5

(10)

0.5

Sources: Department of Singapore Statistics; National Talent and Population Department; Population White Paper (Jan 2013)

2012

2010

2008

2006

2004

2002

2000

1998

1996

1994

1992

1990

1988

2000-30

1986

2010-20

1984

2000-10

1982

1990-00

1980

1980-90

1978

1970-80

1976

(15) 0.0

Sources: Department of Singapore Statistics; BNP Paribas

EXHIBIT 16: Correlation studies - Home prices are more sensitive to GDP growth and 3M Sibor (2002-2012) than other property segments in Singapore GDP (y-y %) : 1995-2012

GDP (y-y %): 2002-2012

Home price (y-y %)

0.67

0.69

Office prices (y-y%)

0.60

0.49

Retail prices (y-y%)

0.60

0.53

Industrial prices (y-y%)

0.47

0.19

3M Sibor (%): 1995-2012

3M Sibor (%): 2002-2012

Home price index

(0.31)

(0.50)

Office price index

0.30

(0.42)

Retail price index Industrial price index

0.21

(0.37)

(0.00)

(0.49)

Sources: URA; HDB; Bloomberg; CEIC; BNP Paribas

7

BNP PARIBAS

20 NOVEMBER 2013

Chong Kang Ho, CFA

Singapore Developers

History suggests that volumes lead prices Our trend analysis suggests residential volumes and values tend to lead home prices by about two quarters.

EXHIBIT 17: Based on past patterns, volume unit sales trend is a leading indicator for home prices (y-y %)

Home px (LHS)

(y-y %)

Vol (RHS)

400 350 300 250 200 150 100 50 0 (50) (100) (150)

40 30 20 10 0 (10) (20) (30)

Home px (LHS)

Transaction Vol (RHS)

(y-y %)

50

500

40

400

30 300

20 10

200

0

100

(10)

0

(20) (100)

(30) (40)

1Q95 1Q96 1Q97 1Q98 1Q99 1Q00 1Q01 1Q02 1Q03 1Q04 1Q05 1Q06 1Q07 1Q08 1Q09 1Q10 1Q11 1Q12 1Q13

(40)

(y-y %)

(200)

1Q95 1Q96 1Q97 1Q98 1Q99 1Q00 1Q01 1Q02 1Q03 1Q04 1Q05 1Q06 1Q07 1Q08 1Q09 1Q10 1Q11 1Q12 1Q13

50

EXHIBIT 18: Transaction value trend is also a leading indicator for home prices

Sources: URA; HDB; BNP Paribas

Sources: URA; HDB; BNP Paribas

On the other hand, rentals tend move in tandem with home prices with little time lag. Thus rentals may not serve as an effective indicator of home prices, in our view. We note further that rentals and home prices decline whenever vacancy rates go above 8%. Vacancy rates are currently at 6%.

EXHIBIT 19: Home price and rental trends move in tandem, with little time lag (q-q %)

Home px (LHS)

Rent (RHS)

(SGD/sqft)

20 15

EXHIBIT 20: Home prices and rentals decline by 20-25% y-y whenever vacancy rates go above 8% (currently at 6%) (%)

Vacancy rate (LHS)

15

12

Home px (RHS)

10

10

Rent (RHS)

(y-y %) 50 40 30

10 5 0 (5)

5

8

0

6

(5)

4

(10)

2

(15)

0

20 10 0 (10)

(10)

1Q95 1Q96 1Q97 1Q98 1Q99 1Q00 1Q01 1Q02 1Q03 1Q04 1Q05 1Q06 1Q07 1Q08 1Q09 1Q10 1Q11 1Q12 1Q13

(20)

Sources: URA; HDB; BNP Paribas

(30) (40)

1Q95 1Q96 1Q97 1Q98 1Q99 1Q00 1Q01 1Q02 1Q03 1Q04 1Q05 1Q06 1Q07 1Q08 1Q09 1Q10 1Q11 1Q12 1Q13

(15)

(20)

Sources: URA; HDB; BNP Paribas

When home prices have fallen by 20% or more Singapore home prices have fallen by 20% or more four times in the past 30 years. The approaching oversupply cycle, in our view, could be similar to the 2Q00-1Q04 oversupply cycle. At that time, notwithstanding the dot.com bubble bursting and SARS, home prices suffered a long drawn effect from oversupply, falling 20% over 15 quarters.

8

BNP PARIBAS

20 NOVEMBER 2013

Chong Kang Ho, CFA

Singapore Developers

EXHIBIT 21: Upcoming cycle could mirror that in 2Q00-1Q04 when home prices suffered a long drawn decline spanning 15 quarters Period

Home price declines

Duration

(%)

(Qtr)

(36)

10

Economic slowdown

4Q83 to 2Q86

Comments

2Q96 to 4Q98

(45)

10

Asian financial crisis

2Q00 to 1Q04

(20)

15

Dot.com bust, SARS, long drawn oversupply

2Q08 to 2Q09

(25)

4

Global credit/ Lehman crisis

Sources: URA; HDB; BNP Paribas

EXHIBIT 22: Singapore home price index and rental index, likely to have peaked in 2013, and could fall from 2014 (index)

Resi. price index

Resi. rental index

EXHIBIT 23: Singapore home price index breakdown by mass market, mid-end and high-end (index)

CCR

RCR

OCR

240

240 220

Asian financial crisis

200

Tech bubble, 911, SARS

Lehman crisis

220 200

180 180

160 140

160

120

140

100

120 1Q94 1Q95 1Q96 1Q97 1Q98 1Q99 1Q00 1Q01 1Q02 1Q03 1Q04 1Q05 1Q06 1Q07 1Q08 1Q09 1Q10 1Q11 1Q12 1Q13

80 100 2Q04 2Q05 2Q06 2Q07 2Q08 2Q09 2Q10 2Q11 2Q12 2Q13

Sources: URA; HDB; BNP Paribas

Sources: URA; HDB; BNP Paribas

EXHIBIT 24: Private and HDB resale prices are highly correlated; HDB resales prices fell for the first time in nine quarters in 3Q13 by 0.9% q-q

EXHIBIT 25: Existing stock and vacancy rates

(index)

Private residential

(units)

HDB Resale

250

(%)

Total avaiable units (LHS) Total vacancy (RHS)

350,000

12

300,000

200

10

250,000 150

8

200,000 150,000

100

6.1%

6.5% 4.9%

100,000 50

2

0

0

1Q94 1Q95 1Q96 1Q97 1Q98 1Q99 1Q00 1Q01 1Q02 1Q03 1Q04 1Q05 1Q06 1Q07 1Q08 1Q09 1Q10 1Q11 1Q12 1Q13

1Q90 1Q91 1Q92 1Q93 1Q94 1Q95 1Q96 1Q97 1Q98 1Q99 1Q00 1Q01 1Q02 1Q03 1Q04 1Q05 1Q06 1Q07 1Q08 1Q09 1Q10 1Q11 1Q12 1Q13

9

4

50,000

0

Sources: URA; HDB; BNP Paribas

6

5.7%

Sources: URA; HDB; BNP Paribas

BNP PARIBAS

20 NOVEMBER 2013

Chong Kang Ho, CFA

Singapore Developers

We expect home prices to fall 15% by 2015 We expect new home volumes to fall 28% in 2013, and another 7% by 2015. Buying sentiment could be impacted by a combination of cooling measures, sales fatigue, easing of pent-up demand and the effects of rising inventory. With volumes typically leading prices, we expect home prices to fall 5-7% in 2014 and another 10% in 2015 (a total of 15% by 2015; we previously forecast a fall of 10%), as unsold inventory rises.

EXHIBIT 26: We expect volumes to decline 28% in 2013, followed by 7% by 2015 Subsale

(units)

Resale

New sale

25,000 20,000 15,000 10,000 5,000

2015E

2014E

2013E

2012

2011

2010

2009

2008

2007

2006

2005

2004

2003

2002

2001

2000

1999

1998

1997

1996

1995

0

Sources: URA; HDB; BNP Paribas estimates

EXHIBIT 27: We forecast home prices and rents will fall 15% by 2015, with vacancy rates rising from 5.4% in 2012 to 7.5% in 2015 (SGD/sq ft)

2008

2009

2010

2011

2012

2013E

2014E

2015E

- Luxury

2,000

2,250

2,800

2,780

2,800

2,800

2,604

2,344

- Prime

1,300

1,300

1,600

1,670

1,700

1,700

1,581

1,423

670

720

870

940

1,000

1,035

983

885

- Luxury

13

24

(1)

1

0

(7)

(10)

- Prime

0

23

4

2

0

(7)

(10)

- Mass market

7

21

8

6

4

(5)

(10)

Home prices

- Mass market

Change (y-y %)

Home rents (SGD/sq ft pm)* - Luxury

5.7

5.1

5.3

5.1

5.1

5.1

4.7

4.3

- Prime

4.4

4.0

4.5

4.7

4.8

4.8

4.5

4.0

- Mass market

2.9

2.6

3.0

3.2

3.4

3.4

3.2

2.9

(10)

Change (y-y %) - Luxury

(11)

4

(4)

0

0

(7)

- Prime

(9)

13

4

2

0

(7)

(10)

(10)

15

7

6

0

(5)

(10)

- Mass market

Yield (%) - Luxury

3.4

2.7

2.3

2.2

2.2

2.2

2.2

2.2

- Prime

4.1

3.7

3.4

3.4

3.4

3.4

3.4

3.4

- Mass market

5.2

4.3

4.1

4.1

4.1

3.9

3.9

3.9

Vacancy rate (%)

6.1

5.0

5.0

5.9

5.4

6.5

7.0

7.5

Sources: URA; HDB; CBRE; BNP Paribas estimates

10

BNP PARIBAS

20 NOVEMBER 2013

Chong Kang Ho, CFA

Singapore Developers

EXHIBIT 28: Net supply and demand dynamics, with occupancy rates Net supply (LHS) Occ rate (RHS)

(units)

EXHIBIT 29: Vacancy rates trending at various market segments

Net demand (LHS)

30,000

(%)

(%)

96

12

95

25,000

Resi ave East region North region

Central region West region NE region

10

94 20,000

8

93

15,000

6

92 91

10,000

4

90 5,000

2

89 88

0

3Q 93 3Q 94 3Q 95 3Q 96 3Q 97 3Q 98 3Q 99 3Q 00 3Q 01 3Q 02 3Q 03 3Q 04 3Q 05 3Q 06 3Q07 3Q08 3Q09 3Q10 3Q11 3Q12 3Q13

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013E 2014E 2015E 2016E 2017E

0

Sources: URA; HDB; CBRE; BNP Paribas estimates

Sources: URA; HDB; CBRE; BNP Paribas estimates

Home prices feeling the heat since 2H13 We continue to see slower growth in home prices ytd, reflecting our expectations that home prices could peak in 2013. The URA price index showed a 0.4% q-q rise in 3Q13, slower than 1.1% q-q in 2Q13. We have also seen the HDB resale price index fall 0.9% q-q in 3Q13, its first decline since 2009, stemming from policy measures such as lowering the mortgage service ratio cap to 30%, allowing singles to buy new HDB flats, and requesting permanent residents wait for three years before purchasing HDB resale flats. We note that HDB resale prices have a high correlation with private home prices (corr = 0.9x). Developers’ balance sheets are currently strong, given low borrowing rates and strong reserves arising from robust sales in the past two years. However, their net gearing could come under greater pressure, especially if borrowing costs rise, launch take-up slows and margins soften. Anecdotally, we are seeing developers starting to cut prices in existing and new projects, and being willing to accept lower profit margins. We saw price cuts by Capitaland at D’Leedon and at Sky Vue, its new launch at Bishan, at 10% below neighbouring launch Sky Habitat. We also saw Singland launch its Alex Residences at 10-15% prices lower than at neighbour Echelon.

EXHIBIT 30: Developers’ balance sheets still strong, but likely to be under pressure from 2014 as borrowing cost rises and margins soften (%)

Market cap. weighted net gearing

70 60 50 40 30 20 10 Mar-13

Sep-13

Sep-12

Mar-12

Mar-11

Sep-11

Mar-10

Sep-10

Mar-09

Sep-09

Mar-08

Sep-08

Mar-07

Sep-07

Mar-06

Sep-06

Mar-05

Sep-05

Sep-04

Mar-04

Mar-03

Sep-03

Sep-02

Mar-02

Sep-01

Mar-01

0

Sources: Company data; Bloomberg; BNP Paribas

11

BNP PARIBAS

20 NOVEMBER 2013

Chong Kang Ho, CFA

Singapore Developers

EXHIBIT 31: Our analysis shows that the supply pipeline is rising at a 6% CAGR in 2013-17E, much faster than its historical 1999-2012 rate Supply CAGR

Cumm. Dd CAGR

Supply

Take-up

Occ. rate

(%)

(%)

(units)

(units)

(%)

Average 1999 - 2012

3.2

3.5

7,432

7,485

93.2

Average 2001-2007

2.9

3.3

5,969

5,999

92.5

Average 2008-2012

3.6

3.8

8,562

8,215

94.5

Average 2013-2017E

6.0

5.7

18,189

15,634

92.7

Sources: URA; HDB; CBRE; BNP Paribas estimates

Record-high land prices are not helping What’s driving up land prices? Land prices in the Government Land Sales (GLS) market continue to rise due to increased competition for land. Since 2010, the competition for land has intensified, driven by new players entering the land market (as they find the GLS tender process transparent and relatively easy to participate), the need to replenish land by local developers (which have enjoyed robust home sales in 2010-1012), and low interest rates helping to fund land buying. The Qualifying Certificates (QC) ruling has also driven more developers towards the GLS market. The QC conditions make it difficult for affected developers – many of which are listed companies (with foreign shareholders) – to buy land from the private market via enbloc (ie collective) sales. Non-traditional property developers, especially foreign construction companies, are also entering the market, bidding aggressively to secure land for development while sacrificing profit margins in construction. Many developers are also forming joint ventures or consortiums to bid for land – we believe one side-effect of them bidding as a group is increased risk appetite. Land prices have risen by a CAGR of 18.2% since 2008, according to DTZ. This is higher than URA home price and Singapore household income CAGRs of 6.8% and 5.5% respectively.

Land bids have been aggressive The aggressive bidding patterns in the land market have been captured in our implied margin model in Exhibit 32. For more details on how the implied margin model, or margin buffer model, works, please see our report “The battle for land continues”, 19 June 2013.

12

BNP PARIBAS

20 NOVEMBER 2013

Chong Kang Ho, CFA

Singapore Developers

EXHIBIT 32: Our implied net margin model (or expected margin buffer model) tracks developers’ bidding patterns – Narrow implied net margins imply aggressive bids by developers, as they are willing to sacrifice margins for land restocking; NB: Our implied net margins are calculated by using selling prices of the nearby residential launches (Expected dev margin buffer)

DM

40%

Mean Jan 11: Policy #4

+1 SD

-1 SD Mt Vernon site, won by CDL, when land market was most cautious Jun 13: Policy 7.5 (60% TDSR)

Dec 11: Policy #5

30% +1 SD = 18.0% 20% Mean = 12.1% 10% 0%

Aggressive bid Territory

-1 SD = 6.2%

-10%

Sep 09- Policy #1

Feb 10: Policy #2 Aug 10: Policy #3

May elections 2011

Oct 12: Policy #6

Jan 13: Policy #7 Tampines Ave 10

site, won by MCC Land

1-Jan-07 12-Jun-07 19-Jul-07 3-Oct-07 19-Dec-07 8-Jan-08 1-Apr-08 30-Jun-08 1-Oct-08 1-Apr-09 9-Sep-09 9-Nov-09 5-Mar-10 1-Apr-10 14-May-10 15-Jun-10 1-Jul-10 27-Sep-10 11-Oct-10 25-Nov-10 31-Dec-10 18-Mar-11 11-Apr-11 10-Jun-11 30-Jun-11 15-Aug-11 1-Oct-11 31-Oct-11 8-Dec-11 16-Jan-12 13-Feb-12 1-Apr-12 7-May-12 6-Jun-12 31-Jun-12 10-Aug-12 26-Sep-12 22-Oct-12 10-Dec-12 1-Jan-13 31-Mar-13 13-May-13 14-Jun-13 2-Aug-13

-20%

As of 14 November 2013 Sources: URA; HDB; company data; BNP Paribas

EXHIBIT 33: Rising land competition (I) - The number of bidders that bid for each GLS site has increased from an average of 8 (2010) to 10 (2013 ytd) (nos)

EXHIBIT 34: Rising competition for land (II) – The number of foreign players that bid for each GLS site has also increased from an average of 0.3 (2008) to 2.0 (2013 ytd) (nos)

No. of bidders per GLS land site

13

No. of foreign player bidders per GLS land site

2.5

12

12

2.0 2.0

11

1.6

10

10 9

8 8

8

1.0

0.5

0.4

0.3

2007

2008

6

6

0.0

2007

2008

2009

2010

Sources: URA; HDB; company data; BNP Paribas

13

1.4

1.3

8

7 7

1.5

1.7

2011

2012

2013E

2009

2010

2011

2012

2013E

Sources: URA; HDB; company data; BNP Paribas

BNP PARIBAS

20 NOVEMBER 2013

Chong Kang Ho, CFA

Singapore Developers

EXHIBIT 35: Rising competition for land (III) – Consortiums that are formed to bid for each GLS site have also increased from an average of 0.4 (2008) to 3.0 (2013 ytd), and have unwittingly raised risk appetite when bidding, in our view (nos)

EXHIBIT 36: Turnaround time has reduced from 2008 (from securing land to launching) – developers are trying to launch fast to avoid home price uncertainty (month)

No. of consortium bidders per GLS land site 3.0

3.0

20.4 20

2.5 2.5 2.0

Time to launch (month)

25

3.5

2.2 1.8

15

1.8

13.0 10.8

1.5 1.5

10

8.8

9.2

9.4

2010

2011

2012

1.0 5

0.4

0.5

0

0.0 2007

2008

2009

2010

Sources: URA; HDB; company data; BNP Paribas

14

2011

2012

2007

2013E

2008

2009

Sources: URA; HDB; company data; BNP Paribas

BNP PARIBAS

20 NOVEMBER 2013

Chong Kang Ho, CFA

Singapore Developers

Implication 1: Margin squeeze One implication from a heated land market is high land costs, which could lead to margin squeeze. In light of property cooling measures, the introduction of TDSR framework and potential rate hike in future, higher land prices may not be easily supported by higher home selling prices. Margins could be further squeezed as other cost components rise too, eg, a possible increase in borrowing cost due to rate hikes and labour costs as a result of manpower restrictions in the construction sector. Looking at the land cost impact, land costs for developers in the sector accounted for 57% of development cost in 2013, up from 46% in 2008. We also estimate net margins could fall from c24% in 20112 to c10% in 2013/14, assuming launch prices stay flat.

EXHIBIT 38: Land costs rising faster at prime sites (eg near MRT stations, amenities)

EXHIBIT 37: Land costs have been rising Tender price (SGD psf) 1,400

Mass

Mid

Top Bid - Near MRT Top Bid - Far MRT URA Property Index

(PSF)

High

1,400

(Index) 220 210 200 190 180 170 160 150 140 130 120

1,200

1,200

1,000

1,000

800

800 600

600

400

400

200

200

8-Jan-13

6-Aug-12

22-Oct-12

13-Feb-12

21-May-12

21-Nov-11

15-Aug-11

12-May-11

1-Oct-10

31-Dec-10

15-Jun-10

9-Sep-09

19-Mar-10

8-Jan-08

10-Sep-08

1-Jan-07

Dec-12

Feb-12

Apr-11

Jun-10

Jul-09

Sep-08

Nov-07

Jan-07

0

30-Sep-07

0

Sources: URA; HDB; Company data; BNP Paribas

Sources: URA; HDB; Company data; BNP Paribas

EXHIBIT 39: Sector land costs (from GLS market) have risen as % of breakeven or development costs and may increase the risk of margin pressure

EXHIBIT 40: We estimate net margins, based on actual project launch prices (chronologically by dates of securing the land), could fall from an average of 24-25% in 2010-12, to 10.1% in 2013 (2013 net margin is conservatively based on ASPs of nearby launches)

(%)

(%)

58

56.1

56

57.1

54.8 52.7

30

50.7

25

50 48

24.8

23.0

24.7

24.1

20

46.3

15

46

10.1 10

44

5

42

0

40 2008

2009

2010

Sources: URA; HDB; Company data; BNP Paribas

15

35.7

35

54 52

40

2011

2012

2008

2013E

2009

2010

2011

2012

2013E

Sources: URA; HDB; Company data; BNP Paribas

BNP PARIBAS

20 NOVEMBER 2013

Chong Kang Ho, CFA

Singapore Developers

EXHIBIT 41: Select foreign players that have participated in Singapore GLS land biddings Country

Developer

Recent projects

Region focus

History in Singapore

Parent Group

China

Qingjian Realty

Nin Resi, Riversound Resi, River Isles, Waterbay Punggol (EC)

Mass market (Punggol, Sengkang)

The Group started construction in Singapore in 1999; Ventured into development in 2008, with Natura Loft DBSS in Bishan

Qingjian Group from Qingdao, China (established 1952), with interests in property, construction, hotels and logistics

China

MCC Land

The Canopy (EC), Canberra Resi, One Canberra (EC)

Mass market (Yishun, Sembawang)

The Group started construction in Singapore since 1990s; Started property development in 2010

China govt-linked MCC Group (Metallurgical Corp of China, listed in HK and Shanghai), with interests in mining, trading, steel, engineering, development, construction

China

Hao Yuan

The Nautical, New Woodlands (EC)

Mass market (Woodlands, Sembawang)

Started property development in Singapore in 2011

Private developer from China

China

Kingsford Dev

Peak @ Hillview

Mass market (Upp. Bukit Timah)

Started bidding in 2012

Private developer from China

China

China Vanke

Upper Changi Rd

Mass market (Upp. Changi Rd)

JV with Keppel Land since Apr 2013

Leading China developer

Malaysia

Sunway

Sea Esta, [email protected] Tampines (EC), Miltonia Resi

Mass market (Tampines)

JV with Hoi Hop

Sunway Group, integrated property-construction business with international exposure

Malaysia

IOI Corp

TrinLinq

Mid-end (Clementi)

Less active in GLS bidding

IOI Group, leading property developer and integrated palm oil player

Malaysia

SP Setia

Eco Sanctuary

Mass market (Upp. Bukit Timah)

Less active in GLS bidding

SP Setia Group, leading property developer with global exposure

Japan

Mitsubishi Estate

Sky Habitat, new Bishan site

Mid-end (Bishan)

JV with Capitaland

Mitsubishi Estate Group, real estate developer with strong presence in Japan and overseas

Japan

Sekisui House

Hillsta, Watertown, eCO, Q Bay Resi

Mass market

JV with Fraser, and Far East

Sekisui House is one of Japan's largest home builders, with strong international presence

Japan

Mitsui Fudosan

[email protected] Tanah Merah, The Rainforest

Mass market

JV with Hong Leong Hldgs (via TID)

Mitsui Fudosan Group, leading developer with international exposure across property segments

Sources: HDB; URA; Company websites; BNP Paribas

16

BNP PARIBAS

20 NOVEMBER 2013

Chong Kang Ho, CFA

Singapore Developers

Implication 2: Restock slowdown Rising land competition also impedes developers under our coverage from restocking land bank effectively in Singapore. This has a slowdown effect on land replenishment and earnings momentum.

EXHIBIT 42: “Non-traditional” developers such as foreign players, construction firms and niche developers, have increased in terms of land bid market share in GLS market, from 18.3% in 2009 to 67.9 in 2013 ytd

EXHIBIT 43: Using City Dev and FNN as proxies, we observe the trend of lower success rates of securing land by traditional developers, from 23% (2010), down to 11% (2013) City Dev Frsaer&Neaves Average winning bid rate per year

(%) 35

(%) 80 67.9

70

30

57.8

60

23.0

25

50

44.8

20

16.8

40 30

23.6

27.6

15

27.5 18.3

20

12.6

11.0

10 5

10 0

0 2007

2008

2009

2010

2011

2012

2013E

Sources: URA; HDB; Company data; BNP Paribas

2010

2011

2012

2013

Sources: URA; HDB; Company data; BNP Paribas

EXHIBIT 44: Bidding preference of developers under our coverage, since 2007 Bids made since 2007 (may not be wins) - Mid to high end

Capitaland

Keppel Land

City Dev

F&N

Farrer, Bishan, Serangoon, Alexandra

Region

7

10

19

28

- Mass (East)

P. Ris, Changi, Flora Dr, Bedok, T. Merah

3

3

12

22

- Mass (West)

Choa Chu Kang, Bukit Panjang, Petir Rd

0

0

7

9

- Mass (Southwest)

West Coast Link, Jurong, Boon Lay

2

1

6

8

- Mass (North)

Yishun, Seletar, Woodlands

0

0

6

12

- Mass (Northeast)

Punggol, Seng Kang, Hougang

2

3

19

30

Mixed development (resi, retail)

Bedok, Petir Rd, Yishun

3

3

5

7

White sites (comm, hotel, resi)

Jurong Gateway, Peck Seah St

4

3

1

3

21

23

75

119

Total bids made Total bids awarded

4

4

13

15

Number of bids on EC sites

0

0

21

24

Sources: URA; HDB; Company data; BNP Paribas

17

BNP PARIBAS

20 NOVEMBER 2013

Chong Kang Ho, CFA

Singapore Developers

EXHIBIT 45: Recent winning bids, from the GLS market Win Award date

Location

Segment

# of

Winning

bids

bidder

bid

Market

Prem.over

Nearby launch Implied net

expectation median bid Breakeven (%) (SGD/sq ft)

ASP

margins*

(SGD/sq ft)

(%)

Comments

(SGD/sq ft)

(SGD/sq ft)

1,157

Above exp

22

1,726

1900

9.1

Aggressive

2H13 12-Sep-13

Mount Sophia

High

9

HoiHup,SW

02-Aug-13

Yuan Ching Rd

Mass, EC

16

Evia

419

Above exp

14

765

800

4.4

V. aggressive

02-Aug-13

Punggol Drive

Mass, EC

6

Kheng Leong

355

Above exp

5

694

750

7.5

V. aggressive

02-Aug-13

Punggol Central

Mass, EC

8

Master Cont

356

Above exp

4

695

750

7.4

V. aggressive

19-Jul-13

Tampines Ave 10 (B)

Mass

10

MCC Land

562

400 - 470

35

987

1050

6.0

20-Jun-13

Faber Walk

Mass

18

Aspial

687

430 - 500

16

1,191

1350

11.8

Aggressive

1H13 V. aggressive

14-Jun-13

Fernvale Close

Mass

9

Fraser

533

500 - 520

12

955

1,050

9.0

Aggressive

31-May-13

Anchorvale Crescent

Mass, EC

6

Qingjian

331

300 - 350

6

666

740

10.0

Aggressive

13-May-13

Woodlands Ave 5/6

Mass, EC

7

Qingjian

341

300 - 340

18

679

760

10.7

Aggressive

12-Apr-13

Sengkang West (A)

Mass

8

UOL

23-Apr-13

Kim Tian Road

High

11 3

Keppel Land

489

400 - 450

26

907

1050

13.6

Aggressive

1,163

850 - 950

22

1,765

2020

12.6

Aggressive

07-Feb-13

Commonwealth Ave

Mid

City Dev

883

700 - 1100

2

1,406

1650

14.8

Cautious

31-Jan-13

Jurong W. St 41 (A)

Mass

12

MCL Land

651

540 - 600

14

1,093

1250

12.6

Aggressive

09-Jan-13

Ang Mo Kio Ave 2

Mass

12

Wheelock

790

560 - 650

12

1,274

1,450

12.1

Aggressive

17-Dec-12

Alexandra View (B)

High

6

Singland

970

820 - 960

20

1,457

1,650

11.7

Aggressive

17-Dec-12

Sembawang Cres

Mass, EC

8

JBE

324

Above exp

3

658

730

9.8

Aggressive

10-Dec-12

Punggol Field Walk

Mass, EC

7

Sing Hldgs

351

270 - 329

13

688

730

5.7

V. aggressive

03-Dec-12

Bishan Street 14

Mid

9

Capitaland

853 Above/in line

11

1,334

1,500

11.1

26-Nov-12

Pasir Ris Drive 3

Mass, EC

10

Hao Yuan

331

Above exp

8

666

720

7.5

23

Aspial

482

Above exp

95

864

1,000

13.6

30-60 yr option

City Dev

296

270 - 330

3

628

720

12.8

Moderate

Keppel Land

791

630 - 680

24

1,226

1,300

5.7

Fraser

302

300 - 350

9

634

720

11.9

2H12

22-Nov-12

Jln Jur. Kechil

Mass

12-Nov-12

Sengkang West (B)

Mass, EC

22-Oct-12

New Upp.Changi (A)

Mass

16-Oct-12

Woodlands Ave 6

Mass, EC

22-Oct-12

New Upp. Changi Rd

Mass

11

Keppel Land

791

630 - 680

24

1,226

1,300

5.7

16-Oct-12

Woodlands Ave 6

Mass, EC

5

F&N, LumC

302

300 - 350

8.8

634

720

11.9

25-Sep-12

Prince Charles Cres

High

8

Wing Tai, UE

960

950

7.9

1,500

1600

6.3

25-Sep-12

Dairy Farm

Mass

9

HLS & TA

616

Beat est.

21.5

1,054

1250

15.7

03-Sep-12

Farrer Road

High

15

1108

NA

20

1,693

1,850

8.5

6 11 5

Far East

Aggressive V. aggressive

V. aggressive Moderate Aggressive Moderate Aggressive Moderate V. aggressive

Sources: URA; HDB; Company data; BNP Paribas; * Implied net margins are based on our assumptions of developers’ all-in cost, and neighbouring launch prices of projects at time of bidding

18

BNP PARIBAS

20 NOVEMBER 2013

Chong Kang Ho, CFA

Singapore Developers

EXHIBIT 46: Winning bids and their subsequent project launches, from the GLS market Award date

Launch dates

Developer

Project names

Location

Actual ASP

Breakeven

Actual net margins*

Land cost

(SGD/sqft)

(SGD/sqft)

(%)

(%)

Dec-12

Nov-13

Singland

Alex Residences

High

1,650

1,516

9

64

Dec-12

Sep-13

Capitaland

Sky Vue

Mid

1,401

1,334

5

64

Nov-12

Sep-13

Hao Yuan

Sea Horizon

Mass

818

666

23

50

Nov-12

Aug-13

City Dev

Lush Acres

Mass

790

628

26

47

Oct-12

Sep-13

Keppel Land / Vanke

Glades

Mass

1,518

1,228

24

64

Oct-12

May-13

Fraser/ Lum Chang

Twin Fountains

Mass

741

634

17

48

Sep-12

Sep-13

HLS/ TA

The Skywoods

Mass

1,290

1,054

22

58

Sep-12

Jun-13

Qingjian

Ecopolitan

Mass

793

669

18

47 65

Sep-12

May-13

Far East

Siena

High

2,297

1,693

36

Aug-12

Sep-13

Singland/ UOL

Thomson Three

Mid

1,362

1,197

14

60

Aug-12

Feb-13

Fragrance/ Aspial

Urban Vista

Mass

1,400

1,122

25

60

Jul-12

Apr-13

Santarli

Sant Ritz

Mid

1,500

1,122

34

56

Jun-12

Jun-13

City Dev

Jewel @ Buangkok

Mass

1,150

872

32

58

Jun-12

Jul-13

Private consortium

Vue 8

Mass

1,000

769

30

54

Jun-12

Jan-13

EL Dev

La Fiesta

Mass

1,150

905

27

58

May-12

Jun-13

MCL Land

J Gateway

Mass

1,486

1,109

34

64

May-12

Jan-13

Fraser/ Far East

Q Bay Resi

Mass

1,020

768

33

54 52

May-12

Dec-12

SingXpress

CityLife

Mass

810

716

13

May-12

Jun-13

Hao Yuan

Forestville

Mass

730

651

12

49

Apr-12

May-13

SSL Dev

The Stratum

Mass

900

827

9

57 47

Apr-12

Nov-12

Kheng Long

Topiary

Mass

735

627

17

Apr-12

Oct-12

Qingjian

Waterbay Punggol

Mass

730

654

12

49

Mar-12

Mar-13

Kingsford

Hillview Peak

Mass

1,400

1,045

34

61 48

Mar-12

Sep-12

Ho Lee

Heron Bay

Mass

720

635

13

Feb-12

Sep-12

Fraser/ Far East

eCo

Mass

1,400

927

51

58

Feb-12

Apr-13

Singapore Land

Mon Jervois

High

2,000

1,417

41

62

Jan-12

Oct-12

Hoi Hup

Kovan Regency

Mass

1,300

928

40

55

Jan-12

Feb-13

IOI Corp

TriLinQ

Mass

1,400

952

47

58

Jan-12

Mar-13

City Dev

Bartley Ridge

Mid

1,250

922

36

54

Dec-11

Jul-12

Wee Hur

Parc Centros

Mass

950

706

35

50

Dec-11

Dec-12

City Dev

Echelon

Mid

1,750

1,254

40

60

Nov-11

Nov-12

SP Setia

Eco Sanctuary

Mass

1,100

848

30

50

Nov-11

Oct-12

Tong Garden

Skies Miltonia

Mass

890

731

22

50

Nov-11

Jun-12

Qingjian

River Isles

Mass

830

690

20

48

Oct-11

May-12

MCC

One Canberra

Mass

700

623

12

47

Oct-11

Jul-12

Koh Bro

Parc Olympia

Mass

840

716

17

50

Oct-11

Jun-12

United Engin

Watercolour

Mass

730

621

17

47

Oct-11

Jun-12

Hoi Hup/ Sunway

Sea Esta

Mass

920

716

28

50

Sep-11

Sep-12

Allgreen

Riversails

Mass

830

652

27

45

850

685

24

47

1,300

950

37

60

Sep-11

May-12

Capital Dev

FLO Residences

Mass

Aug-11

Jul-12

Tuan Sing

Sennett Residences

Mid

Jul-11

Feb-12

Fraser/Far East

Twin Waterfalls

Mass

730

598

22

45

Jul-11

Mar-12

Far East

Hillsta

Mass

1,100

772

43

53

Jun-11

Apr-12

Far East

Seahill

Mass

1,250

828

51

56

Jun-11

Mar-12

Fraser

Palm Isles

Mass

870

677

28

48

Jun-11

Jan-12

Qingjian

Riversound Residences

Mass

860

759

13

52

Jun-11

Feb-12

Fragrance

Parc Rosewood

Mass

990

723

37

51

May-11

Dec-11

Hao Yuan

The Nautical

Mass

880

798

10

58

May-11

Mar-12

MCL Land

Ripplebay

Mass

880

759

16

53

Apr-11

Feb-12

Sim Lian

Tampines Trilliant

Mass

800

723

11

54

Apr-11

May-12

United Engin

8 Riversuites

Mid

1,375

1,198

15

65

Apr-11

Feb-12

City Dev

Bartley Residences

Mid

1,260

1,057

19

59

Mar-11

Jan-12

City Dev

The Rainforest

Mass

750

654

15

49

Mar-11

Aug-11

Keppel Land

The Luxurie

Mass

1,053

886

19

57

Mar-11

Dec-11

UOL

Archipelago

Mass

1,100

833

32

56

(Continued to the next page)

19

BNP PARIBAS

20 NOVEMBER 2013

Chong Kang Ho, CFA

Singapore Developers

EXHIBIT 46: Winning bids and their subsequent project launches, from the GLS market (Cont’d) Award date

Launch dates

Developer

Project names

Location

Actual ASP

Breakeven

Actual net margins*

Land cost

(SGD/sqft)

(SGD/sqft)

(%)

(%)

Feb-11

May-12

Capitaland

Sky Habitat

Mid

1,700

1,341

27

65

Dec-10

Mar-12

Tuan Sing

Seletar Park Resi

Mass

1,160

853

36

55

Dec-10

Sep-11

Sim Lian

A Treasure Trove

Mass

900

740

22

55

Dec-10

Jul-11

City Dev

Blossom Residences

Mass

702

599

17

45

Nov-10

Sep-11

Hoi Hup/Sunway

Arc at Tampines

Mass

734

634

16

48

Nov-10

Aug-11

Fraser/Far East

Boathouse Residences

Mass

900

681

32

47

Nov-10

Jul-11

Far East

Woodhaven

Mass

981

693

42

48

Oct-10

May-11

NTUC, Chip Eng Seng

Belysa

Mass

700

588

19

45 50

Oct-10

May-11

Wing Tai

Foresque Residences

Mass

1,100

695

58

Oct-10

Jul-11

Fraser/Far East

Seastrand

Mass

900

695

29

48

Sep-10

Jul-11

Qingjian

RiverParc Residence

Mass

685

560

22

42 50

Sep-10

Oct-11

Sim Lian

Parc Vera

Mass

840

677

24

Sep-10

Aug-11

Far East

EuHabitat

Mass

1,100

772

42

54

Sep-10

Jun-11

Hoi Hup/Sunway

The Miltonia Residences

Mass

877

743

18

55

Jun-10

Apr-11

Fraser/Far East

Eight Courtyards

Mass

789

665

19

48

Jun-10

Dec-10

NTUC, Chip Eng Seng

Prive

Mass

704

638

10

48

Jun-10

Dec-10

Qingjian

Nin Residence

Mass

1,220

993

23

61

Jun-10

Jan-11

MCC

Canberra Residences

Mass

831

753

10

51

May-10

Jan-11

United Engin

Austville Residences

Mass

719

654

10

49

May-10

Jun-11

MCL Land

Terrasse

Mass

1,000

821

22

56

May-10

Feb-11

Chip Eng Seng

My Manhattan

Mass

1,200

896

34

58

May-10

Oct-10

Fragrance

Kovan Grandeur

Mass

1,086

780

39

52

May-10

Nov-10

Keppel Land

Lakefront Residences

Mass

1,070

868

23

57

Dec-11

Jul-12

Wee Hur

Parc Centros

Mass

950

706

35

50

Mar-10

Dec-10

Sim Lian

Waterview ($900)

Mass

900

768

17

55

Mar-10

Oct-10

MCC

The Canopy

Mass

657

609

8

46

Mar-10

Oct-10

Fraser/ Lum Chang

Esparina Residences

Mass

750

646

16

49

Feb-10

Mar-11

City Dev

H2O Residences

Mass

950

729

30

50

Nov-09

Jul-11

Cheung Kong

Thomson Grand

Mid

1,350

907

49

59

Oct-09

Jul-10

Hong Leong

The Scala

Mid

1,180

906

30

58

Sep-09

Apr-10

UOL

Waterbank at Dakota

Mass

1,150

882

30

58

Aug-09

Apr-10

City Dev

Tree House

Mass

840

630

33

44

Sep-08

Jul-09

Hong Leong

Optimah @ Tenah Merah

Mass

822

627

31

45

Jun-08

Jun-09

Fraser

8 @ Woodleigh

Mass

800

615

30

44

May-08

Mar-09

Far East

Mi Casa

Mass

617

535

15

38

Apr-08

Aug-09

NTUC

Trevista

Mass

943

838

13

55

Mar-08

Feb-10

MCL Land

The Estuary

Mass

757

710

7

49

Mar-08

Mar-10

Cheung Kong

The Vision

Mass

1,050

650

62

47

Jan-08

Mar-09

UOL

Double Bay Resi

Mass

660

639

3

46 59

Dec-07

Jul-09

Wing Tai/ United Eng

Ascentia Sky

Mass

1,230

1,083

14

Dec-07

Jun-09

Chip Eng Seng

Oasis @Elias

Mass

660

572

15

40

Dec-07

Feb-09

Fraser

Caspian

Mass

603

598

1

41

Nov-07

Mar-11

Allgreen

Sky Suites @ Anson

High

2,100

1,248

68

57

Nov-07

Feb-10

Far East

Altez

High

1,800

1,393

29

61

Oct-07

Jan-00

Duke Dev

Kovan Residences

Mass

887

796

11

55

Sep-07

Jul-09

Far East

Centro Residences

Mid

1,174

999

18

60

Jul-07

Jul-08

Fraser

Woodsville 28

Mass

900

793

14

55

Jun-07

Jun-08

Ho Bee

Dakota Residences

Mid

978

914

7

57

Jun-07

Jun-08

Sim Lian

Clover by the Park

Mid

765

716

7

52

Source: Company data, URA, HDB, BNP Paribas; * Actual net margins are based on our assumptions of developers’ all-in cost, and the respective projects’ actual launch prices when they sell

20

BNP PARIBAS

20 NOVEMBER 2013

Chong Kang Ho, CFA

Singapore Developers

Stock profiles – landbank and unbilled sales The composition of land bank of developers has shifted towards high-end from mass market. The key reason is that many developers have depleted their mass market land bank which has sold well in the past two years. On the other hand, high-end launches have been tepid, thus resulting in their current land bank skew towards the high-end segment. Unbilled sales have been relatively stable, but may decline if developers do not restock land bank sufficiently. Unbilled sales are sales that have been made as a result of launches but are recognised on the P&L only later, eg, at various progressive levels of construction.

EXHIBIT 47: Capitaland – outstanding residential land bank in Singapore Project

Region

Location

Latitude

High end

Jalan Mutiara

Wharf Residences

High end

Tong Watt Road

The Interlace

Mid end

Depot Road

Urban Resort Condo

High end

Cairnhill Rd

D'Leedon

High end

Leedon Heights

Tenure

Stake

GFA attri,

Attri. unsold GFA

Attri. unsold

Selling price

Breakeven

Dev margins

(%)

(‘000 sqft)

(sqft)

(units)

(SGD/sqft)

(SGD/sqft)

(%)

FH

100

262.779

10,346

5

2,150

1,059

50.8

999-yr

100

292.433

0

0

1,550

863

44.3

99-yr

60

1095

215,841

123

1,100

682

38.0

FH

100

160

62,500

25

2,700

1,647

39.0

99-yr

35

822

150,943

110

1,600

1,073

33.0

The Nassim

High end

Nassim Hill

FH

100

172

172,000

55

3,300

1,343

59.3

Marine Point Site

Mid end

Marine Parade Rd

FH

100

107

107,000

124

1,800

1,408

21.8

Bedok Residences

Mass

Bedok N. Drive

99-yr

82.7

466

18,368

19

1,350

1,007

25.4

Sky Habitat

Mid end

Bishan St 14

99-yr

65

411

269,562

217

1,500

1,319

12.1

Yio Chu Kang Site

Mass

Yio Chu Kang Rd

FH

100

208

208,066

80

1,000

435

56.5

Cairnhill Residences

High end

Cairnhill Rd

99-yr

100

268

267,827

225

2,500

1,726

31.0

Sky Vue

Mid end

Bishan St 14

99-yr

75

592

222,645

196

1,400

1,297

7.3

Coronation Road

High end

Coronation Road

99-yr

100

403

403,000

140

2,000

1,513

24.3

2,108,099

1,319

Sources: URA; HDB; Company data; BNP Paribas

EXHIBIT 48: Capitaland – Residential land bank in Singapore, breakdown by segment value

EXHIBIT 49: Capitaland – Residential land bank in Singapore, breakdown by segment sq ft

Mass (% by val) 6%

Mass (% by sqft) 11%

Mid (% by val) 30%

High (% by sq ft) 50%

High (% by val) 64%

Sources: URA; HDB; Company data; BNP Paribas

21

Mid (% by sqft) 39%

Sources: URA; HDB; Company data; BNP Paribas

BNP PARIBAS

20 NOVEMBER 2013

Chong Kang Ho, CFA

Singapore Developers

EXHIBIT 50: Capitaland – unbilled residential sales in Singapore (SGD m)

Est. Attri. Unbilled Sales (LHS)

(%)

Uncompleted (RHS)

600

120

500

100

400

80

300

60

200

40

100

20

0

0 D Leedon

Urban Resort Condo

Bedok Residences

Sky Habitat

Sky Vue

Sources: URA; HDB; Company data; BNP Paribas

EXHIBIT 51: Keppel Land – outstanding residential land bank in Singapore Site

Region

Location

Tenure

99-yr

Stake

Attri. unsold GFA

Attri. unsold

Selling price

Breakeven

Dev margin

(%)

(sqft)

(units)

(SGD/sqft)

(SGD/sqft)

(%)

30

121,711

66

2,000

848

58

Reflections at Keppel Bay

Mid end

Keppel Bay

Marina Bay Suites

High end

Marina Bay

99-yr

33

16,254

8

2,800

1,033

63

The Luxurie

Mass

Sengkang Square

99-yr

100

0

0

1,020

837

18

FH

100

477,706

590

2,800

1,563

44

99-yr

30

86,950

62

2,100

797

62

Keppel & GE Tower

High end

Tanjong Pagar Rd

Corals at Keppel Bay

Mid end

Keppel Bay

Keppel Bay Plot 4

Mid end

Keppel Bay

99-yr

12

40,300

27

2,000

793

60

Keppel Bay Plot 6

Mid end

Keppel Bay

99-yr

30

67,813

26

2,000

793

60

The Glades

Mass

Tanah Merah

99-yr

70

337,236

446

1,450

1,231

15

Kim Tian Rd Site

High end

Tiong Bahru

99-yr

100

473,200

500

2,000

1,765

12

1,621,170

1,725

Sources: URA; HDB; Company data; BNP Paribas

EXHIBIT 52: Keppel Land – Residential land bank in Singapore, breakdown by segment value

EXHIBIT 53: Keppel Land – Residential land bank in Singapore, breakdown by segment sq ft

Mass (% by val) 14%

Mid (% by val) 19% High (% by val) 67%

Sources: URA; HDB; Company data; BNP Paribas

22

Mass (% by sqft) 21%

High (% by sqft) 60%

Mid (% by sqft) 19%

Sources: URA; HDB; Company data; BNP Paribas

BNP PARIBAS

20 NOVEMBER 2013

Chong Kang Ho, CFA

Singapore Developers

EXHIBIT 54: Keppel Land – Unbilled residential sales in Singapore (SGD m)

Estimated Attributable Unbilled Sales (LHS)

(%)

500

Uncompleted (RHS)

100

450

90

400

80

350

70

300

60

250

50

200

40

150

30

100

20

50

10

0

0 Lakefront Residences

Marina Bay Suites

The Luxurie

Corals @ Keppel Bay

Sources: URA; HDB; Company data; BNP Paribas

EXHIBIT 55: City Development – Outstanding residential land bank in Singapore Site

Region

Location

Tenure

Stake

H2O Residences

Mass

Hedges park

GFA attri. Attri. unsold GFA

Attri. unsold Selling price

Breakeven

Dev margin

(%)

(‘000 sqft)

(sqft)

(units)

Sengkang West

99-yr

100

604

23,179

20

(SGD/sqft)

(SGD/sqft)

(%)

950

745

22

Mass

Flora Drive

99-yr

33

153

0

0

850

660

22

The Residences at W

High end

Sentosa Cove

99-yr

100

400

Buckley Classique

High end

Buckley Road

FH

100

100

356,140

203

2,400

901

62

1,563

1

2,050

1,116

46

Nouvel 18

High end

Anderson Road

FH

50

157

156,938

78

3,500

2,190

37

Blossom Residences EC

Mass

Segar Road

99-yr

100

713

0

0

720

599

17

Pasir Ris Parcel 3 + Stateland

Mass

Pasir Ris Grove

99-yr

51

479

478,568

459

900

390

57

D'Nest

Mass

Pasir Ris Grove

99-yr

51

476

38,087

37

900

390

57

The Palette

Mass

Pasir Ris Grove

Tampines Rd/ Upp. Changi site

Mass

Upper Changi Rd

99-yr

51

494

0

0

900

390

57

99-yr/ FH

33

290

177,409

207

900

429

52

Bartley Residences

Mid end

Bartley Road

99-yr

30

220

0

0

1,250

1,004

20

Former Futura site Former Lucky Tower site

High end

Leonie Road

FH

100

122

121,852

82

2,800

1,668

40

High end

Grange Road

FH

100

355

355,295

174

2,800

1,676

40

South Beach Residences

Mid end

Beach Road

Boulevard Hotel site

High end

Cusaden Road

99-yr

50

200

200,000

95

3,000

1,673

44

FH

40

241

241,327

80

2,800

1,186

58

Haus at Serangoon Gdns

Mid end

Echelon

Mid end

Serg Gdn Way

99-yr

70

306

0

0

1,500

798

47

Alexandra Road

99-yr

50

262

1,550

2

1,600

1,274

20

Bartley Ridges UP at Robertson Quay

Mid end

Mt Vernon Road

99-yr

30

235

43,627

48

1,200

975

19

High end

Robertson Quay

99-yr

100

136

31,125

16

2,800

1,524

46

Jewel at Buangkok

Mass

Sengkang Central

99-yr

100

592

266,326

277

1,020

872

15

The Venue

Mid end

Thong Tai Crescent

99-yr

60

309

232,331

120

1,400

1,199

14

Lush Acres EC

Mass

SengKang W. Way

99-yr

100

455

56,319

47

800

653

18

Commonwealth Ave

Mid end

Commonwealth Ave

99-yr

33

213

212,500

231

1,650

1,362

17

2,994,134

2,177

Sources: URA; HDB; Company data; BNP Paribas

23

BNP PARIBAS

20 NOVEMBER 2013

Chong Kang Ho, CFA

Singapore Developers

EXHIBIT 56: City Development – Residential land bank in Singapore, breakdown by segment value

EXHIBIT 57: City Development – Residential land bank in Singapore, breakdown by segment sq ft

Mass (% by val) 17%

High (% by val) 60%

Mass (% by sqft) 34%

High (% by sqft) 43%

Mid (% by val) 23%

Mid (% by sqft) 23%

Sources: URA; HDB; Company data; BNP Paribas

Sources: URA; HDB; Company data; BNP Paribas

EXHIBIT 58: City Development – unbilled residential sales in Singapore (%) 120

Estimated Attributable Unbilled Sales (LHS) % uncompleted (RHS)

100 80 60 40 20 Lush Acres

The Venue

Inflora

South Beach Residences

D'Nest

Jewel @ Buangkok

Bartley Ridges

Echelon

[email protected] Serangoon Gdns [email protected] Robertson Quay

Bartley Residences

The Rainforest

The Palette

Blossom Residences

Buckley Classique

0 Hedges Park

H2O Residences

(SGD m) 400 350 300 250 200 150 100 50 0

Sources: URA; HDB; Company data; BNP Paribas

EXHIBIT 59: Fraser & Neave – outstanding residential land bank in Singapore Stake

Attri. unsold GFA

Attri. unsold

Selling price

Breakeven

Dev margin

Tenor

(%)

(sqft)

(units)

(SGD/sqft)

(SGD/sqft)

(%)

FH

100

22,704

19

1,300

834

36

Bedok Reservoir Rd

99-yr LH

50

2,007

2

1,100

605

45

Mass Market

Yishun Ave 2

99-yr LH

50

0

0

820

660

20

Mass Market

Pasir Ris Link

99-yr LH

50

2,746

3

1,050

705

33

Boathouse Residences

Mass Market

Upper Serangoon

99-yr LH

50

0

0

900

683

24

Twin Waterfalls

Mass Market

Punggol Way

99-yr LH

80

0

0

720

599

17

Palm Isles

Mass Market

Flora Drive

99-yr LH

100

19,645

21

860

687

20

Watertown

Mass Market

Punggol Central

99-yr LH

33

2,185

3

1,350

1,153

15

Starhub Centre

High end

Cuppage Road

FH

100

333,000

249

2,800

1,745

38

eCo

Mass Market

Bedok South

99-yr LH

33

26,161

30

1,350

935

31

Q Bay Residences

Mass Market

Tampnes Ave 10

99-yr LH

33

24,543

26

1,100

776

29 14

Project

Region

Location

Flamingo Valley

Mass Market

Siglap Rd

Waterfront Isle

Mass Market

Eight Courtyard Seastrand

Twin Fountains

Mass Market

Woodlands Ave 6

99-yr LH

70

60,813

51

740

635

Fernvale Close

Mass Market

Fernvale Close

99-yr LH

40

192,852

198

1,000

920

8

Yishun Central

Mass Market

Yishun Ave 2 / Central 1

99-yr LH

100

530,680

890

1,100

976

11

1,217,338

1,492

Sources: URA; HDB; company data; BNP Paribas

24

BNP PARIBAS

20 NOVEMBER 2013

Chong Kang Ho, CFA

Singapore Developers

EXHIBIT 60: Fraser & Neave – Residential land bank in Singapore, breakdown by segment value

EXHIBIT 61: Fraser & Neave – Residential land bank in Singapore, breakdown by segment sq ft

High (% by sqft) 27%

Mass (% by val) 50%

High (% by val) 50%

Mid (% by sqft) 0%

Mid (% by val) 0% Sources: URA; HDB; Company data; BNP Paribas

Mass (% by sqft) 73%

Sources: URA; HDB; Company data; BNP Paribas

EXHIBIT 62: Fraser & Neave – unbilled residential sales in Singapore (SGD m)

Estimated Attributable Unbilled Sales (LHS)

(%)

300

% uncompleted (1-% completion) (RHS)

100 90 80 70 60 50 40 30 20 10 0

250 200 150 100 50

Twin Fountains

Q Bay Residences

eCo

Watertown

Palm Isles

Twin Waterfalls

Boathouse Resi.

Seastrand

Eight Courtyard

Waterfront Isle

Esparina Resi.

Waterfront Gold

Flamingo Valley

0

Sources: URA; HDB; Company data; BNP Paribas

25

BNP PARIBAS

20 NOVEMBER 2013

Chong Kang Ho, CFA

Singapore Developers

How do stock prices react at home price turning points? Developer stock prices typically react ahead of home price corrections. Our basket of developer stock price index fell by an average of 33% before home prices peaked in our analysis of three cases: 2Q96, 2Q00 and 3Q08. Based on our findings, after home prices start to fall, developer stock prices tend to remain under pressure through the trough cycle, with discounts to RNAV staying relatively wide, but would be first to react ahead of home price recovery.

EXHIBIT 63: Based on past patterns, our basket of developer stock prices reacted ahead of home price corrections (y-y %)

Sector stock price (RHS) (SGD) 30

Home px (LHS)

50

EXHIBIT 64: Based on past patterns, developers’ discounts to RNAV widened ahead of home price corrections, and typically remained wide until home price recovery (y-y %)

Home px (RHS)

Disc. To RNAV CAPL

50

60

40

40

25

30 20

20

40

30 20

20

10

15 10

Sources: URA; HDB; Bloomberg; BNP Paribas

1Q13

3Q11

1Q10

3Q08

1Q07

(60)

1Q95

(40)

1Q13

3Q11

1Q10

3Q08

1Q07

3Q05

1Q04

3Q02

1Q01

3Q99

1Q98

3Q96

1Q95

0

3Q05

(40)

(40)

(30)

1Q04

(30)

(20)

3Q02

5

(20)

1Q01

(20)

(10)

3Q99

(10)

0

0

1Q98

0

3Q96

10

(%)

Sources: URA; HDB; Bloomberg; BNP Paribas

EXHIBIT 65: Tracking developer stock price performances through the cycle (index) 400

BNP Property Index (LHS)

Home index (LHS)

Rising bond yields

350 300 250

(%) 14

3M SIBOR (RHS)

1996 cooling measures, followed by Asian crisis

200 150

2008 GFC 2000 Tech bubble

Concerns over EU crisis

12 10 8 6

2003 SARS

4

100 50

2

0

0

Jan-95 Jan-96 Jan-97 Jan-98 Jan-99 Jan-00 Jan-01 Jan-02 Jan-03 Jan-04 Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12 Jan-13 Sources: URA; HDB; Bloomberg; BNP Paribas

26

BNP PARIBAS

20 NOVEMBER 2013

Chong Kang Ho, CFA

Singapore Developers

Investment summary To reflect our new home price assumptions, we cut our estimates for 2013-15 EPS by 6-10% and RNAV by 2-6%, and TPs by 9% on average. Stock prices tend to lead home prices, which we expect to peak in 2013 then fall. As such, we downgrade City Dev to REDUCE (from Hold) given its proxy status and large exposure to the Singapore residential market. Our target price of SGD8.75 is pegged at a 34% discount to its RNAV, which is -1x standard deviation to its mean reflecting its proxy status and Singapore residential exposure. We downgrade Keppel Land to HOLD (from Buy) given its recent outperformance. Our target price of SGD3.92 is pegged to a 32% discount to its RNAV, which is -0.5x standard deviation to its mean. This is narrower than peers to factor in possible monetising of office assets in Singapore generating special dividends. See our accompanying company reports on City Dev “Growth downdraft” and Keppel Land “Positives mostly priced in”. We still favour Singapore developers with entrenched and diversified overseas exposure, along with asset recycling opportunities. We maintain Capitaland at BUY, given its trough valuation. To reflect our new home price assumptions, we have lowered our 2013-15E EPS by 6-9% and RNAV by 2.5%. Accordingly, we have lowered our TP by 9.6%. Our new TP of SGD3.75 is pegged at a 32% discount to RNAV, or the mid-point between -0.5x to -1x standard deviation to its mean. Upside catalysts could come from better than expected economic recovery in Singapore and China, as well as asset recycling opportunities. Capitaland announced on 20 November 2013 that it has entered into a secondary placement agreement to sell an aggregate of 115.66m shares of its listed subsidiary Australand (ALZ AU), representing about 20% of Australand, with allocation and pricing due to take place on 21 November 2013. As reference, Capitaland has an interest of about 341.9m shares in Australand (about 59.1% of Australand). We maintain FNN at HOLD. We have raised our 2013E EPS by 16.2% to reflect better than expected 3Q13 results, but lowered our 2014-15E EPS by 7-16% and RNAV by 2.5% to factor in our new home price assumptions. Accordingly, we have lowered our TP by 2.4%. Our new TP of SGD6.02 is pegged at a 15% discount to RNAV, which is narrower than its developer peers given its exposure to resilient F&B business, as well as the proposed spin-off or demerger of its property arm (Fraser Centrepoint Limited).

EXHIBIT 66: RNAV exposures (%) 120

SG Resi

SG Comm

Overseas

100 80 60 40 44

20 0

10

13

CAPL

KPLD

CIT

Sources: Company data; HDB; URA; BNP Paribas; NB: Resi = Residential, Comm = Commercial assets e.g. retail, offices

27

BNP PARIBAS

20 NOVEMBER 2013

Chong Kang Ho, CFA

Singapore Developers

EXHIBIT 67: Changes to our EPS forecasts -------------------------- 2013E ------------------------------

-------------------------- 2014E --------------------------

-------------------------- 2015E ----------------------------

New

Old

Change

New

Old

Change

New

Old

Change

(SGD)

(SGD)

(%)

(SGD)

(SGD)

(%)

(SGD)

(SGD)

(%)

Capitaland

0.164

0.181

(9.4)

0.195

0.214

(8.9)

0.209

0.223

(6.3)

Keppel Land

0.263

0.252

4.4

0.289

0.305

(5.2)

0.321

0.358

(10.3)

City Dev

0.641

0.671

(4.5)

0.724

0.767

(5.6)

0.746

0.827

(9.8)

FNN

0.459

0.395

16.2

0.425

0.457

(7.0)

0.431

0.511

(15.7)

Sources: Company data; BNP Paribas

EXHIBIT 68: Changes to our stock recommendations and target prices ---------- Rec ---------New

Capitaland

Old

Upside to

New

Old

Change

New

Old

Change

new TP

TP peg*

(SGD)

(SGD)

(%)

(SGD)

(SGD)

(%)

(%)

(%)

Comments

Buy

Buy

3.75

4.15

(9.6)

5.51

5.65

(2.5)

21

(32)

Midpoint of -0.5x and -1x SD

Hold

Buy

3.92

4.47

(12.3)

5.76

6.14

(6.2)

6

(32)

-0.5x SD, on recycling prospects

Reduce

Hold

8.75

9.95

(12.0)

13.32

14.21

(6.3)

(14)

(34)

-1x SD, on proxy to matured SG resi

(15)

Narrower, on potential property spinoff

Keppel Land City Dev

-------------------- TP -------------------- ------------------ RNAV ------------------

FNN

Hold

Hold

6.02

6.17

7.08

(2.4)

7.26

4

(2.5)

* TP pegged to percentage discount to RNAV Sources: Bloomberg; Company data; BNP Paribas

EXHIBIT 69: Capitaland discount to RNAV

EXHIBIT 70: Capitaland P/BV vs ROE

% Premium/(discount) to RNAV (LHS) Home price (RHS)

(%) 40

(index)

(x)

250

2.5

200

2.0

150

1.5

100

1.0

20 +1 SD = 6.1%

P/BV (LHS)

30 % 25 % 20 %

0 Mean = -16.1%

(20) -0.5 SD = -27.3%

(40)

15 % 10 %

-1 SD = -38.4%

Sources: URA; HDB; Bloomberg; BNP Paribas

Sources: URA; HDB; Bloomberg; BNP Paribas

EXHIBIT 71: Keppel Land discount to RNAV

EXHIBIT 72: Keppel Land P/BV vs ROE

% Premium/(discount) to RNAV (LHS) Home price index (RHS)

(%) 60 40

Jan 13

Jan 12

Jan 11

Jan 10

Jan 09

Jan 04

0 %

Jan 08

0.0

Jan 07

0

5 %

Jan 06

0.5

Apr-13

Feb-12

Oct-09

Dec-10

Jul-07

Aug-08

Mar-05

May-06

Jan-04

Oct-01

Nov-02

Jun-99

Aug-00

Apr-98

Feb-97

Jan-96

(80)

50

Jan 05

(60)

(index)

(x)

250

3.5

50

3.0

40

P/BV (x)

ROE (RHS)

(%)

200

30

2.5

20 +1 SD = 2%

0

150 100

-0.5 SD = -32% -1 SD = -43.4%

Jan-13

Jan-11

Jan-09

Jan-07

Jan-05

Jan-03

(30) Jan-01

0.0 Jan-99

(20) Jan-97

0.5 Jan-95

Apr-13

Jun-12

Jul-11

Sep-10

0

Nov-09

(80)

(10)

Jan-93

(60)

Jan-09

0

1.0 50

Sources: URA; HDB; Bloomberg; BNP Paribas

1.5

Jan-91

(40)

20

2.0

10

Mean = -20.7%

(20)

28

(%)

ROE (RHS)

Sources: URA; HDB; Bloomberg; BNP Paribas

BNP PARIBAS

20 NOVEMBER 2013

Chong Kang Ho, CFA

Singapore Developers

EXHIBIT 73: City Dev discount to RNAV (%)

EXHIBIT 74: City Dev P/BV vs ROE

% Premium/(discount) to RNAV (LHS) Home price index (RHS)

60

(index)

(x)

250

4.0

P/BV (LHS)

(%)

ROE (RHS)

25

3.5

40

200

20

+1 SD = 5.4%

0

150

Mean = -14.3%

(20)

-0.5 SD = -24.1% -1 SD = -33.9%

2.5

15

2.0 100

(40) 50

(60)

20

3.0

10

1.5 1.0

5

0.5 0

Sources: URA; HDB; Bloomberg; BNP Paribas

Sources: URA; HDB; Bloomberg; BNP Paribas

EXHIBIT 75: FNN discount to RNAV

EXHIBIT 76: FNN P/BV vs ROE

% Premium/(discount) to RNAV (LHS) Home price (RHS)

(%)

(index) 250

20 10

200

(x) 3.0

P/BV (LHS)

Jan-13

Jan-11

Jan-09

Jan-07

Jan-05

Jan-03

Jan-01

Jan-99

Jan-97

Jan-95

Jan-91

0

Jan-93

0.0

Jan-96 Oct-96 Jul-97 Apr-98 Jan-99 Nov-99 Aug-00 May-01 Feb-02 Nov-02 Sep-03 Jun-04 Mar-05 Dec-05 Sep-06 Jul-07 Apr-08 Jan-09 Oct-09 Jul-10 May-11 Feb-12 Nov-12 Aug-13

(80)

(%) 25

ROE (RHS)

2.5

20

0 (10)

+1 SD = -11.2%

(20)

Mean = -22.5% -0.5 SD = -28.1% -1 SD = -33.8%

1.0

50

(60)

Sources: URA; HDB; Bloomberg; BNP Paribas

Oct 13

Oct 11

Oct 09

Oct 07

Oct 05

Oct 03

Oct 91

0

Oct 01

0.0

Nov-13

Jun-13

Feb-13

Sep-12

Dec-11

May-12

Jul-11

Mar-11

Oct-10

Jun-10

Jan-10

Aug-09

Apr-09

Nov-08

0

Oct 99

(70)

5

0.5

Oct 97

(50)

Jul-08

10

100

Oct 95

(40)

15 1.5

Oct 93

(30)

2.0

150

Sources: URA; HDB; Bloomberg; BNP Paribas

EXHIBIT 77: City Dev - RNAV derivation Attrib. value

Surplus

RNAV

(SGD m)

(SGD m)

(SGD m)

Investment properties Estimated market value

5,567

Less: Book value

(3,004)

Surplus/ (deficit to book value)

2,562

Development properties NPV of future resi development profits Listed entities

1,773 Stake (%)

Millennium & Copthorne (MLC LN)

57.0

City e-Solutions Ltd (557 HK )

49.8

Surplus/ (deficit to book value)

935

Book value of shareholder equity as of FY2012

7,445

RNAV

12,715

Fully-diluted share base (m)

954

RNAV per share

13.3

Applied discount to RNAV (%)

(34)

Target price

8.75

Sources: Company data; Bloomberg; BNP Paribas estimates

29

BNP PARIBAS

20 NOVEMBER 2013

Chong Kang Ho, CFA

Singapore Developers

EXHIBIT 78: Keppel Land - RNAV derivation Attrib. value

Surplus

RNAV

(SGD m)

(SGD m)

(SGD m)

Investment properties Estimated market value

1,708

Less: Book value

(1,302)

Surplus/ (deficit to book value)

406

Development properties NPV of future resi development profits Listed entities

1,828 Stake (%)

K-REIT Asia (KREIT SP)

44.7

Surplus/ (deficit to book value) Other business segments

153 Stake (%)

P/E

FY13E PATMI

100

8

44

Fund management business

370

Total shareholders' Equity as at FY12E

6,169

Total equity value for 2013E

8,927

RNAV per share

5.76

Fully-diluted share base (m)

1,550

Applied discount to RNAV (%)

(32)

Target price

3.92

Sources: Company data; Bloomberg; BNP Paribas estimates

30

BNP PARIBAS

20 NOVEMBER 2013

Chong Kang Ho, CFA

Singapore Developers

EXHIBIT 79: Capitaland - RNAV derivation Attrib. value

Surplus

RNAV

(SGD m)

(SGD m)

(SGD m)

Investment properties Singapore commercial

1,210

Overseas commercial

364

Raffles City China

2,338

The Ascott Limited

1,814

Less: Book value

(2,092)

Surplus/ (deficit) to book value

3,833

Development properties NPV of future resi development profits Listed entities Ascott Residence Trust

2,089 Stake (%) 37.7

123

Australand Holdings

59.1

505

CapitaCommercial Trust

31.5

(80)

CapitaMalls Asia

65.4

1,146

Central China Real Estate

27.1

119

Lai Fung

20.0

(149)

Surplus/ (deficit) to book value

1,665

Other business segments Fund management business

784

Book value of shareholder equity as of 3Q12E

15,080

RNAV

23,451

Fully-diluted share base (m)

4,255

RNAV per share

5.51

Applied discount to RNAV (%)

(32)

Target price

3.75

Sources: Company data; Bloomberg; BNP Paribas

31

BNP PARIBAS

20 NOVEMBER 2013

Chong Kang Ho, CFA

Singapore Developers

EXHIBIT 80: Fraser & Neave - RNAV derivation FNN : RNAV

Valuation

Surplus or valn

Investment Properties

(SGD m)

(SGD m)

Retail

1046.9

Serviced apartments

1015.5

Office

500.4

Business parks

92.6 11.671

Others Less: Book value

(2617.7)

Surplus/(deficit) to book value (A)

51.5

Development Properties Singapore

712.4

China

527.4

Australia

683.1

Others

51.0

NPV of future development profits/(losses) (B) Real estate investment trusts

1,973.9 Stake

Fair value

Valuation

(%)

(SGD/shs)

(SGD m)

Fraser Centrepoint Trust

40.8

1.82

611

260.5

Frasers Commercial REIT (Formerly Allco REIT)

27.1

1.27

220

(46.0)

Surplus/(Deficit) from REITs (C) Other business segments

214.5 Valuation (SGD m)

Soft drinks

1055.9

Dairies

1233.8

Printing & publishing

222.6

REIT & serviced apartments management

314.7

Valuation based on multiples of FY13 P/E (D)

2827.0

Shareholders' equity in property business as of FY12 (E)

4175.3

Others (F)

872.0

Total RNAV (A+B+C+D+E+F)

10114.2

Issued shares(m)

1429.0

RNAV per share (SGD)

7.08

Discount ascribed to RNAV

(15)

Target Price @ discount to RNAV (SGD)

6.02

Sources: Company data; Bloomberg; BNP Paribas

32

BNP PARIBAS

20 NOVEMBER 2013

20 NOVEMBER 2013 CHANGE IN /NUMBERS SINGAPORE REAL ESTATE

8

CITY DEVELOPMENTS

REDUCE FROM HOLD

CIT SP

TARGET PRICE

SGD8.75

CLOSE

SGD10.24

UP/DOWNSIDE

HOW WE DIFFER FROM CONSENSUS

MARKET RECS

TARGET PRICE (%)

-16.2

POSITIVE

2

EPS 2013 (%)

-2.9

NEUTRAL

13

EPS 2014 (%)

-2.7

NEGATIVE

10

-14.5%

PRIOR TP

SGD9.95

CHANGE IN TP

-12.03%

KEY STOCK DATA

Growth downdraft n

n

n

n

YE Dec (SGD m)

Downgrade to REDUCE, from Hold We are turning more cautious on the Singapore residential property market as we head into 2014 as we expect pent-up demand to ease further amid rising supply, dragging down home prices. We downgrade City Dev to REDUCE, from Hold.

3,473

3,704

3,664

611

691

713

Recurring EPS (SGD)

0.75

0.67

0.76

0.78

Prior rec. EPS (SGD)

0.75

0.70

0.80

0.87

Chg. In EPS est. (%)

0.0

(4.5)

(5.6)

(9.8)

(15.1)

(9.9)

13.0

3.2

13.7

15.2

13.5

13.1

Searching overseas for growth City Dev is proactively looking overseas for growth given a matured property cycle in Singapore. China projects are in excavation stage and could be launched in 2014/15. City Dev recently entered the London market by securing a high-end Knightsbridge site. We are concerned it will take time for overseas projects to contribute to P&L.

60

(index) 250

+1 SD = 5.4%

(20)

-0.5 SD = -24.1% -1 SD = -33.9%

(40) (80)

0.6

0.6

0.6

13.5

11.2

10.4

1.3

1.2

1.1

1.0

24.2

4.1

(3.0)

(6.4)

9.5

7.9

8.3

8.0

ROE (%) Nov-12

Feb-13

May-13

Aug-13

Nov-13

14

17 7

12

(3) 10 (13) 8 (SGD)

City Developments

Share price performance

Rel to Straits Times Index

1 Month

3 Month

12 Month

(2.2)

(3.8)

(5.8)

Relative to country (%)

(2.2)

(4.4)

(14.0)

February 2014

Jan-96 Oct-96 Jul-97 Apr-98 Jan-99 Nov-99 Aug-00 May-01 Feb-02 Nov-02 Sep-03 Jun-04 Mar-05 Dec-05 Sep-06 Jul-07 Apr-08 Jan-09 Oct-09 Jul-10 May-11 Feb-12 Nov-12 Aug-13

7,487

3m avg daily turnover (USD m)

5.1

Free float (%)

51

150 100

(23) (%)

Absolute (%)

12m high/low (SGD)

Hong Leong Group (34%)

3m historic vol. (%) ADR ticker

0

[email protected] +65 6210 1956

0.6 13.2

Price/book (x)

Major shareholder

50

Chong Kang Ho, CFA

EV/EBITDA (x)

200 Mean = -14.3%

(60)

Sources: Bloomberg; BNP Paribas estimates

Dividend yield (%)

Mkt cap (USD m)

40 0

Recurring P/E (x)

Next results

% Premium/(discount) to RNAV (LHS) Home price index (RHS)

20

2015E

678

Net debt/Equity (%)

(%)

2014E

3,354

EPS growth (%)

TP pegged to a 34% discount to RNAV We cut our TP to SGD8.75 as we lower our 2013-15 EPS estimates 4.5-9.8% and RNAV by about 6.3% to partly reflect our new home price assumptions for 2014-15.Our new TP is pegged to a 34% discount to 2013E RNAV, or -1x SD, partly to reflect its proxy status and greater exposure to a potential Singapore residential slowdown.

2013E

Rec. net profit

Depleting land bank, momentum to slow City Dev has been crowded out of the land market given rising land competition. This could slow its restocking efforts. Along with the company’s depleting legacy land bank in the North (Pasir Ris, Changi), we are concerned about its future earnings momentum.

City Dev’s discount to RNAV trend

33

Revenue

2012A

13.20/9.76 15.0 CDEVY US

ADR closing price (USD; 19 Nov 2013)

8.14

Issued shares (m)

909

Sources: Bloomberg consensus; BNP Paribas estimates

City Developments

CIT SP

Chong Kang Ho, CFA

Investment thesis

Catalyst

We are turning more cautious on the Singapore residential market given the oversupply risk (see our accompanying sector report, 2014 – Shift towards home oversupply begins). We expect the era of supply shortage to end by 2015, due to the combination of rising completed supply and easing of pent-up demand. Unsold inventory has also risen, with demand hit by effects of the seven cooling measures, tighter immigration policies, and prospects of higher interest rates. We expect new sales volumes to fall 28% in 2013 and another 7% by 2015 and home prices to fall 15% by 2015.

Downside catalysts are worse-than-expected economic slowdown, a sharper-than-expected rise in interest rates, and failure to restock sufficient land bank at reasonable prices in Singapore, and slower-than-expected profit contribution from overseas projects.

Singapore developers also face potential margin squeeze arising from higher land costs and from the “crowding out” process as they find it difficult to restock land. This could slow earnings momentum.

Risks to our call Key upside risks to our REDUCE call are: 1) interest rates staying low for a prolonged period, 2) a reversal of cooling measures, 3) renewal of pro-immigration policies, 4) stronger-than-expected economic recovery, and 5) completion of supply is delayed, due to the shortage of construction workers.

As such, we cut our 2013-15 EPS estimates by 4.5-9.8% and RNAV by 6.3% to reflect our new home price assumptions. Accordingly, we cut our TP for City Dev by 11.6% to SGD8.75, from SGD9.95. Our new TP is pegged to a 34% discount to RNAV, or -1x SD, partly to reflect the company’s proxy status and greater exposure to the Singapore residential market.

Company background

Key assumptions

City Developments Limited (CDL) is engaged in property development, ownership and investment holding. The company’s subsidiaries are engaged in property development and ownership, hotel ownership and operations, a club operation and ownership, investment in properties and in shares, property management, project management and provision of consultancy services, and hospitality-related information technology and procurement services. CDL operates in four business segments: property development, hotel operations, rental properties and others.

Singapore home price growth Singapore office cap value

2013E

2014E

(%)

(%)

0

(5)

4.50

4.50

Source: BNP Paribas estimates

Principal activities, revenue (2012) Rental income 9.1%

Earnings sensitivity

Others 3.0% Base case

Property development 42.2% Hotel operations 45.8%

Key executives

RNAV

Change

(SGD)

(%)

13.3

10% drop in SG home prices

12.8

(4.2)

China home prices

13.3

(0.2)

SG office cap value

13.0

(2.5)

Listed entities

13.3

(0.5)

Source: BNP Paribas estimates Since

Title

Mr. Kwek Leng Beng

01/01/69

CEO

Ms.Ann Nee Goh

01/01/05

CFO

Mr. Seng Chee Tan

01/01/00

CIO

City Dev’s key operations include property development, and rental income from investment properties. As such , key drivers to RNAV include home prices, cap rates and rental incomes.

http://www.cdl.com.sg

34

BNP PARIBAS

20 NOVEMBER 2013

City Developments

CIT SP

Chong Kang Ho, CFA

EXHIBIT 1: City Development – outstanding residential land bank in Singapore as of September 2013 Site

Region

Location

Tenure

Stake

Breakeven

Dev margin

(%)

(‘000 sqft)

GFA attri, Attri. unsold GFA

(sqft)

Attri. unsold Selling price

(units)

(SGD/sqft)

(SGD/sqft)

(%)

H2O Residences

Mass

Sengkang West

99-yr

100

604

23,179

20

950

745

22

Hedges park

Mass

Flora Drive

99-yr

33

153

0

0

850

660

22

The Residences at W

High end

Sentosa Cove

99-yr

100

400

356,140

203

2,400

901

62

Buckley Classique

High end

Buckley Road

FH

100

100

1,563

1

2,050

1,116

46

Nouvel 18

High end

Anderson Road

FH

50

157

156,938

78

3,500

2,190

37

Blossom Residences EC

Mass

Segar Road

99-yr

100

713

0

0

720

599

17

Pasir Ris Parcel 3 + Stateland

Mass

Pasir Ris Grove

99-yr

51

479

478,568

459

900

390

57

D'Nest

Mass

Pasir Ris Grove

99-yr

51

476

38,087

37

900

390

57

The Palette

Mass

Pasir Ris Grove

Tampines Rd/ Upp. Changi site

Mass

Upper Changi Rd

99-yr

51

494

0

0

900

390

57

99-yr/ FH

33

290

177,409

207

900

429

52

Bartley Residences

Mid end

Bartley Road

99-yr

30

220

0

0

1,250

1,004

20

Former Futura site

High end

Leonie Road

FH

100

122

121,852

82

2,800

1,668

40

Former Lucky Tower site

High end

Grange Road

FH

100

355

355,295

174

2,800

1,676

40

South Beach Residences

Mid end

Beach Road

99-yr

50

200

200,000

95

3,000

1,673

44

Boulevard Hotel site

High end

Cusaden Road

FH

40

241

241,327

80

2,800

1,186

58

Haus at Serangoon Gdns

Mid end

Serg Gdn Way

99-yr

70

306

0

0

1,500

798

47

Echelon

Mid end

Alexandra Road

99-yr

50

262

1,550

2

1,600

1,274

20

Bartley Ridges

Mid end

Mt Vernon Road

99-yr

30

235

43,627

48

1,200

975

19

UP at Robertson Quay

High end

Robertson Quay

99-yr

100

136

31,125

16

2,800

1,524

46

Jewel at Buangkok

Mass

Sengkang Central

99-yr

100

592

266,326

277

1,020

872

15

The Venue

Mid end

Thong Tai Crescent

99-yr

60

309

232,331

120

1,400

1,199

14

Lush Acres EC

Mass

SengKang W. Way

99-yr

100

455

56,319

47

800

653

18

Commonwealth Ave

Mid end

Commonwealth Ave

99-yr

33

213

212,500

231

1,650

1,362

17

2,994,134

2,177

Total Sources: URA; HDB; company data; BNP Paribas

EXHIBIT 2: City Development – Residential land bank in Singapore, breakdown by segment value as of September 2013

EXHIBIT 3: City Development – Residential land bank in Singapore, breakdown by segment sq ft as of September 2013

Mass (% by val) 16.6%

Mass (% by sqft) 34% High (% by sqft) 43%

High (% by val) 60.4%

Mid (% by val) 22.9%

Mid (% by sqft) 23% Sources: URA; HDB; company data; BNP Paribas

35

Sources: URA; HDB; company data; BNP Paribas

BNP PARIBAS

20 NOVEMBER 2013

City Developments

CIT SP

Chong Kang Ho, CFA

EXHIBIT 4: City Development – Unbilled residential sales in Singapore as September 2013 (SGD3.18b) (%) 120

Estimated Attributable Unbilled Sales (LHS) % uncompleted (RHS)

100 80 60 40 20 Lush Acres

The Venue

Inflora

South Beach Residences

D'Nest

Jewel @ Buangkok

Bartley Ridges

Echelon

[email protected] Serangoon Gdns [email protected] Robertson Quay

Bartley Residences

The Rainforest

The Palette

Blossom Residences

Buckley Classique

0 Hedges Park

H2O Residences

(SGD m) 400 350 300 250 200 150 100 50 0

Sources: URA; HDB; company data; BNP Paribas

EXHIBIT 5: Discount to RNAV – our TP is pegged to 34% discount to RNAV, or -1x SD to mean (index)

(x)

250

4.0

P/BV (LHS)

(%)

ROE (RHS)

25

3.5

40

200

20

+1 SD = 5.4%

150

0 Mean = -14.3% (20)

-0.5 SD = -24.1% -1 SD = -33.9%

2.5

15

2.0 100

(40) 50

(60)

20

3.0

10

1.5 1.0

5

0.5

Sources: Bloomberg; BNP Paribas

0.0 Jan-13

Jan-11

Jan-09

Jan-07

Jan-05

Jan-03

Jan-01

Jan-99

0 Jan-97

Jan-96 Oct-96 Jul-97 Apr-98 Jan-99 Nov-99 Aug-00 May-01 Feb-02 Nov-02 Sep-03 Jun-04 Mar-05 Dec-05 Sep-06 Jul-07 Apr-08 Jan-09 Oct-09 Jul-10 May-11 Feb-12 Nov-12 Aug-13

0

Jan-95

(80)

Jan-93

60

% Premium/(discount) to RNAV (LHS) Home price index (RHS)

Jan-91

(%)

EXHIBIT 6: Forward P/BV and ROE

Sources: Bloomberg; BNP Paribas estimates

We lower our 2013-15 EPS estimates for City Dev by 4.5-9.8% to partly factor in our new Singapore home price assumptions (we now assume prices will fall 15% by 2015, vs our previous estimate of a 10% decline). We also lower our RNAV per share estimate by 6.3% to SGD13.3, partly to factor in our new Singapore home price assumptions and changes in stock prices in listed entities. Accordingly, we lower our TP by 12% to SGD8.75, offering 14% downside potential. Our new TP is pegged to a 34% discount to 2013E RNAV, or -1x standard deviation to the mean of its discount to RNAV. This is the widest discount in our developer coverage universe given City Dev’s higher exposure to the Singapore residential market, which we are cautious on. Overall, we downgrade City Dev to REDUCE, from Hold.

36

BNP PARIBAS

20 NOVEMBER 2013

City Developments

CIT SP

Chong Kang Ho, CFA

EXHIBIT 7: City Dev – RNAV derivation (SGD m)

Attrib. value

Surplus

RNAV

Investment properties Estimated market value

5,567

Less: Book value

(3,004)

Surplus/ (deficit to book value)

2,562

Development properties NPV of future resi development profits

Listed entities

1,773

Stake (%)

Millenium & Copthorne (MLC LN)

57.0

City e-Solutions Ltd (557 HK )

49.8

Surplus/ (deficit to book value)

935

Book value of shareholder equity as of FY2012

7,445 12,715

RNAV Fully-diluted share base (m)

954

RNAV per share

13.3

Applied discount to RNAV (%)

(34)

Target price

8.8

Sources: Company data; Bloomberg; BNP Paribas

37

BNP PARIBAS

20 NOVEMBER 2013

City Developments

CIT SP

Chong Kang Ho, CFA

Financial statements City Developments Profit and Loss (SGD m) Year Ending Dec

2011A

2012A

2013E

2014E

3,280

3,354

3,473

3,704

3,664

(1,507)

(1,693)

(1,722)

(1,947)

(1,902)

1,773

1,661

1,751

1,757

1,762

254

149

78

170

183

Operating costs

(900)

(889)

(919)

(962)

(959)

Operating EBITDA

1,127

920

910

965

986

0

0

(20)

(30)

(26)

Revenue Cost of sales ex depreciation Gross profit ex depreciation Other operating income

Depreciation Goodwill amortisation

2015E

0

0

0

0

0

1,127

920

890

935

961

(53)

(40)

(40)

(27)

(22)

62

80

28

57

71

Recurring non operating income

0

0

0

0

0

Non recurring items

0

0

0

0

0

Profit before tax

1,136

960

877

966

1,009

Tax

(175)

(100)

(113)

(112)

(124)

962

860

764

853

886

(163)

(182)

(153)

(162)

(172)

Preferred dividends

0

0

0

0

0

Other items

0

0

0

0

0

799

678

611

691

713

Operating EBIT Net financing costs Associates

Profit after tax Minority interests

Reported net profit Non recurring items & goodwill (net)

0

0

0

0

0

799

678

611

691

713

Recurring EPS *

0.88

0.75

0.67

0.76

0.78

Reported EPS

0.88

0.75

0.67

0.76

0.78

DPS

0.24

0.07

0.07

0.07

0.07

Recurring net profit Per share (SGD)

Growth Revenue (%)

5.7

2.2

3.5

6.6

(1.1)

Operating EBITDA (%)

13.9

(18.4)

(1.2)

6.1

2.2

Operating EBIT (%)

13.9

(18.4)

(3.3)

5.1

2.7

Recurring EPS (%)

1.8

(15.1)

(9.9)

13.0

3.2

Reported EPS (%)

1.8

(15.1)

(9.9)

13.0

3.2

Gross margin inc depreciation (%)

54.0

49.5

49.8

46.6

47.4

Operating EBITDA margin (%)

34.4

27.4

26.2

26.1

26.9

Operating EBIT margin (%)

34.4

27.4

25.6

25.3

26.2

Net margin (%)

24.3

20.2

17.6

18.7

19.5

Effective tax rate (%)

15.4

10.4

12.9

11.6

12.3

Dividend payout on recurring profit (%)

27.4

8.8

9.8

8.6

8.4

Interest cover (x)

22.5

24.8

22.9

37.1

46.5

Operating performance

Inventory days

0.0

0.0

0.0

0.0

0.0

Debtor days

115.6

129.7

125.2

120.2

123.8

Creditor days

256.8

247.1

256.8

243.4

260.3

14.6

10.9

10.6

12.3

12.3

ROIC (%)

9.0

7.2

6.6

7.5

7.5

ROE (%)

12.2

9.5

7.9

8.3

8.0

ROA (%)

6.9

5.8

5.2

5.7

5.8

Operating ROIC (%)

*Pre exceptional, pre-goodwill and fully diluted

Revenue By Division (SGD m)

2011A

2012A

2013E

2014E

2015E

Property development

1,344

1,415

1,482

1,707

1,661

Hotel operations

1,563

1,536

1,581

1,581

1,581

10

0

0

0

0

281

304

310

316

322

82

99

99

99

99

Gross dividends from investments Rental and car park income Others

Sources: City Developments; BNP Paribas estimates

38

BNP PARIBAS

20 NOVEMBER 2013

City Developments

CIT SP

Chong Kang Ho, CFA

Financial statements City Developments Cash Flow (SGD m) Year Ending Dec

2011A

2012A

2013E

2014E

2015E

799

678

611

691

713

0

0

20

30

26

101

102

125

105

102

Other non-cash items

154

162

(3)

2

(2)

Recurring cash flow

1,054

942

753

828

839

Recurring net profit Depreciation Associates & minorities

Change in working capital

(71)

(877)

(84)

(18)

(171)

Capex - maintenance

(199)

(209)

(172)

(158)

(165)

Capex - new investment

(195)

(48)

(48)

(48)

(48)

Free cash flow to equity

589

(192)

449

605

454

Net acquisitions & disposals

(70)

(420)

(73)

(242)

(158)

Dividends paid

(247)

(182)

(60)

(60)

(60)

Non recurring cash flows

517

324

152

443

382

Net cash flow

788

(469)

468

746

619

Equity finance

0

0

0

0

0

(172)

122

(734)

(613)

(666)

616

(347)

(266)

133

(47)

0.92

Debt finance Movement in cash Per share (SGD) Recurring cash flow per share

1.16

1.04

0.83

0.91

FCF to equity per share

0.65

(0.21)

0.49

0.67

0.50

2011A

2012A

2013E

2014E

2015E

Balance Sheet (SGD m) Year Ending Dec Working capital assets

4,456

5,608

4,421

4,409

4,556

(1,457)

(1,497)

(1,588)

(1,730)

(1,703)

Net working capital

2,999

4,112

2,832

2,679

2,854

Tangible fixed assets

3,313

3,405

3,404

3,515

3,620

Operating invested capital

6,312

7,517

6,236

6,194

6,474

Goodwill

0

0

0

0

0

Other intangible assets

0

0

0

0

0

1,095

1,225

1,101

1,101

1,101

Working capital liabilities

Investments Other assets

3,469

3,180

3,566

3,614

3,676

Invested capital

10,876

11,922

10,903

10,910

11,251

Cash & equivalents

(2,693)

(2,629)

(2,189)

(2,634)

(2,688)

Short term debt

1,477

998

765

623

546

Long term debt *

2,929

3,469

2,280

1,741

1,402

Net debt

1,777

2,278

411

(324)

(745)

0

0

0

0

0

403

387

417

423

420

Total equity

6,827

7,445

7,997

8,629

9,282

Minority interests

1,869

1,953

2,078

2,182

2,295

Invested capital

10,876

12,064

10,903

10,910

11,252

Deferred tax Other liabilities

* includes convertibles and preferred stock which is being treated as debt

Per share (SGD) Book value per share

7.51

8.19

8.79

9.49

10.21

Tangible book value per share

7.51

8.19

8.79

9.49

10.21

Net debt/equity (%)

20.4

24.2

4.1

(3.0)

(6.4)

Net debt/total assets (%)

11.9

14.6

2.7

(2.1)

(4.8)

2.4

3.1

3.0

3.0

3.2

15.8

(2.6)

13.4

25.4

23.7

Financial strength

Current ratio (x) CF interest cover (x) Valuation

2011A

2012A

2013E

2014E

2015E

Recurring P/E (x) *

11.7

13.7

15.2

13.5

13.1

Recurring P/E @ target price (x) *

10.0

11.7

13.0

11.5

11.2

Reported P/E (x)

11.7

13.7

15.2

13.5

13.1

Dividend yield (%)

2.3

0.6

0.6

0.6

0.6

P/CF (x)

8.8

9.9

12.4

11.2

11.1

P/FCF (x)

15.8

(48.5)

20.7

15.4

20.5

Price/book (x)

1.4

1.3

1.2

1.1

1.0

Price/tangible book (x)

1.4

1.3

1.2

1.1

1.0

11.0

13.2

13.5

11.2

10.4

EV/EBITDA @ target price (x) **

9.9

11.9

12.1

9.9

9.1

EV/invested capital (x)

1.2

1.1

1.1

1.0

1.0

EV/EBITDA (x) **

* Pre exceptional, pre-goodwill and fully diluted

** EBITDA includes associate income and recurring non-operating income

Sources: City Developments; BNP Paribas estimates

39

BNP PARIBAS

20 NOVEMBER 2013

20 NOVEMBER 2013 CHANGE IN NUMBERS SINGAPORE / REAL ESTATE

8

KEPPEL LAND

HOLD

KPLD SP

TARGET PRICE

SGD3.92

CLOSE

SGD3.70

UP/DOWNSIDE

FROM BUY

HOW WE DIFFER FROM CONSENSUS

MARKET RECS

TARGET PRICE (%)

-7.1

POSITIVE

16

EPS 2013 (%)

-3.2

NEUTRAL

6

EPS 2014 (%)

-2.9

NEGATIVE

2

+5.8%

PRIOR TP

SGD4.47

CHANGE IN TP

-12.5%

KEY STOCK DATA

Positives mostly priced in n

n

n

n

YE Dec (SGD m)

2012A

2013E

2014E

2015E

Revenue

939

1,180

1,729

2,170

Rec. net profit

465

408

448

498

Recurring EPS (SGD)

0.32

0.28

0.31

0.34

Prior rec. EPS (SGD)

0.32

0.27

0.33

0.38

Chg. In EPS est. (%)

0.0

2.5

(6.8)

(11.1)

EPS growth (%)

74.6

(12.2)

9.9

11.0

Facing slower sell-through in Singapore launches KPLD is seeing slower sales momentum. Sales from May’s mid-end launch Corals at Keppel Bay are so far moderate (158 units sold, out of 366), with Glades facing a harder sell (89 units sold, out of 726) as of September. Prime Kim Tian Rd is slated to launch in 1H14.

Recurring P/E (x)

11.7

13.3

12.1

10.9

Adjusting our EPS estimates We raise our 2013E EPS by 2.5% to factor in better-than-expected 3Q13 results, but cut 2014E/15E EPS by 6.8-11.1% to reflect our new home price assumptions. We are turning more cautious on the Singapore property sector as pent-up demand is easing amid rising supply, potentially dragging down home prices.

ROE (%)

Recent outperformance prices in positives: downgrade to HOLD KPLD has outperformed peers under our coverage recently, partly due to strong 3Q13 results, especially fund management growth and robust China unit sales ytd (up 216% y-y). The market has priced in most positives, in our view, and upside potential could be capped by oversupply risks in Singapore. Downgrade to HOLD, from Buy.

New TP pegged to a 32% discount to RNAV We lower our TP to SGD3.92 to reflect cuts to our EPS and RNAV estimates. Our new TP is pegged at a 32% discount to 2013E RNAV, or -0.5x SD. Our discount for KLPD is narrower than that for covered peers, to reflect potential monetising of its office assets (eg MBFC T3), which could result in special dividends, likely in 2014E.

Dividend yield (%) EV/EBITDA (x)

2.2

2.2

2.2

2.2

10.4

12.7

9.9

6.6

Price/book (x) Net debt/Equity (%)

Nov-12

Feb-13

0.9

0.9

0.9

0.8

22.2

1.0

(4.6)

(17.2)

8.0

6.6

7.2

7.6

May-13

Aug-13

Nov-13

4.51

21

4.01

11

3.51

1

3.01 (SGD)

Keppel Land

Share price performance

Rel to Straits Times Index

1 Month

3 Month

12 Month

Absolute (%)

0.3

2.5

13.2

Relative to country (%)

0.3

1.9

5.0

Next results

January 2014

Mkt cap (USD m)

KPLD’s discount to RNAV

Chong Kang Ho, CFA [email protected] +65 6210 1956

Aug-13

May-13

Feb-13

Nov-12

Jul-12

Jan-12

Sep-11

Jun-11

Mar-11

Dec-10

Aug-10

May-10

Oct-09

Feb-10

Jul-09

Apr-09

Jan-09

-0.5 SD = -32% -1 SD = -43.4%

Sources: URA; HDB; Bloomberg; BNP Paribas estimates

40

(index) 250 200 150 100 50 0

+1 SD = 2% Mean = -20.7%

Apr-12

(%) 60 40 20 0 (20) (40) (60) (80)

(9) (%)

4,433

3m avg daily turnover (USD m)

6.5

Free float (%)

48

Major shareholder

Keppel Corporation (54%)

12m high/low (SGD) 3m historic vol. (%) ADR ticker ADR closing price (USD) Issued shares (m)

Sources: Bloomberg consensus; BNP Paribas estimates

4.31/3.27 20.1 1,490

Keppel Land

KPLD SP

Chong Kang Ho, CFA

Investment thesis

Catalyst

We are turning more cautious on Singapore residential given oversupply risk. See our accompanying sector report, 2014 – Shift towards home oversupply begins. We expect the period of supply shortages to end by 2015, on rising completed supply and easing pent-up demand. Unsold inventory has risen, with demand hit by the effects of the seven cooling measures, tighter immigration policies and prospects of higher interest rates. We expect new sales volumes to fall 28% in 2013 and another 7% by 2015 and home prices to fall 15% by 2015.

Potential catalysts include changes in economic conditions, movements in home volumes and prices, and corporate announcements of asset recycling.

For China, after a strong year of volume and price rises in 2013, we expect property sales to moderate in 2014, due to a higher base, potential measures such as property tax, and supply risks, especially in Tier 3/4 cities.

Risks to our call Downside risks include worse-than-expected economic slowdown, a sharper-than-expected rise in interest rates, and a failure to restock sufficient land bank at reasonable prices in Singapore and China. Upside risks include resilient home prices, better-thanexpected economic recovery, low interest rates for a prolonged period, reversal of cooling measures, and delay of completion of supply, due to a shortage of construction workers.

We raise 2013E EPS by 2.5% on better-than-expected 3Q results, but cut 2014-15E EPS 6.8-11.1% and RNAV by 6.2% to reflect our new home price assumptions. Thus, we cut our TP 12% to SGD3.92. Our new TP is pegged at a 32% discount to 2013E RNAV, or -0.5x SD. Our discount for KLPD is narrower than that for covered peers, to reflect potential monetising of its office assets (eg MBFC T3), which could result in special dividends.

Company background

Key assumptions

Keppel Land is the property arm of the Keppel Group, one of Singapore's largest mutinational conglomerates. Keppel Land focuses on two core businesses - property development and property fund management. It has major projects in Singapore, China, Vietnam, India and Indonesia, with total gross assets of more than SGD6b. The group has more than 100m sqft of land across Asia and the Middle East, which could yield a total of 60,000 homes.

2013E

2014E

(%)

(%)

SG ASP growth

0

(5)

SG Comm rental growth

0

5

Source: BNP Paribas estimates

Principal activities, revenue split FY12

Earnings sensitivity

Rental from invested properties 6.0%

Fund management 9.2%

Change in SG ASP (%) RNAV (SGD)

RNAV (SGD)

Property development 77.1%

Key executives

(15)

(10)

(5)

5.76

5.53

5.61

5.68

(4)

(3)

(1)

Change from base (%) Change in rental (%)

Hotel and resorts operations 7.7%

Base

Change from base (%)

Base

(15)

(10)

(5)

5.76

5.58

5.64

5.69

(3)

(2)

(1)

Source: BNP Paribas estimates Age

Since

Title

Chiau Beng Choo

65

01/21/85

Chairman of the Board

Wee Gee Ang

51

01/01/13

CEO, ED

Kei Hin Lim

55

07/09/07

CFO

Keppel Land’s major revenue sources are property development and rental income from investment properties. As such, key earnings drivers are home selling prices and rental rates.

http://www.keppelland.com.sg

41

BNP PARIBAS

20 NOVEMBER 2013

Keppel Land

KPLD SP

Chong Kang Ho, CFA

EXHIBIT 1: Keppel Land – outstanding residential land bank in Singapore as of September 2013 Site

Reflections at Keppel Bay Marina Bay Suites The Luxurie

Region

Location

Tenure

Mid end

Keppel Bay

99-yr

High end

Marina Bay

Stake

Attri. unsold GFA

Attri. unsold

Selling price

Breakeven

Dev margin

(%)

(sqft)

(units)

(SGD/sqft)

(SGD/sqft)

(%)

30

121,711

66

2000

848

58

99-yr

33

16,254

8

2800

1,033

63

Mass

Sengkang Square

99-yr

100

0

0

1020

837

18

Keppel & GE Tower

High end

Tanjong Pagar Rd

FH

100

477,706

590

2800

1,563

44

Corals at Keppel Bay

Mid end

Keppel Bay

99-yr

30

86,950

62

2100

797

62

Keppel Bay Plot 4

Mid end

Keppel Bay

99-yr

12

40,300

27

2000

793

60

Keppel Bay Plot 6

Mid end

Keppel Bay

99-yr

30

67,813

26

2000

793

60

Mass

Tanah Merah

99-yr

70

337,236

446

1450

1,231

15

High end

Tiong Bahru

99-yr

100

473,200

500

2000

1,765

12

1,621,170

1,725

The Glades Kim Tian Rd Site

Sources: URA; HDB; Company data; BNP Paribas

EXHIBIT 2: Keppel Land – Residential land bank in Singapore, breakdown by segment value as of September 2013

EXHIBIT 3: Keppel Land – Residential land bank in Singapore, breakdown by segment sq ft as of September 2013

Mass (% by val) 14%

Mass (% by sqft) 21%

Mid (% by val) 19%

High (% by sqft) 60%

High (% by val) 67%

Sources: URA; HDB; Company data; BNP Paribas

Mid (% by sqft) 19%

Sources: URA; HDB; Company data; BNP Paribas

EXHIBIT 4: Keppel Land – unbilled residential sales in Singapore as of September 2013 (SGD703m) (SGD m)

Estimated attributable unbilled sales (LHS)

(%)

500

Uncompleted (RHS)

100

450

90

400

80

350

70

300

60

250

50

200

40

150

30

100

20

50

10

0

0 Lakefront Residences

Marina Bay Suites

The Luxurie

Corals @ Keppel Bay

Sources: URA; HDB; Company data; BNP Paribas estimates

42

BNP PARIBAS

20 NOVEMBER 2013

Keppel Land

KPLD SP

Chong Kang Ho, CFA

EXHIBIT 5: Discount to RNAV – our TP is pegged to 32% discount to RNAV, or -0.5x SD from mean % Premium/(discount) to RNAV (LHS) Home price index (RHS)

(%) 60 40

EXHIBIT 6: Forward P/BV and ROE

(index)

(x)

250

3.5

50

3.0

40

P/BV (x)

ROE (RHS)

(%)

200

30

2.5

20 +1 SD = 2%

0

150

10

Mean = -20.7% 100

-0.5 SD = -32% -1 SD = -43.4%

Jan-13

Jan-11

Jan-09

Jan-07

Jan-05

Jan-03

(30) Jan-01

0.0 Jan-99

(20) Jan-91

Apr-13

Jun-12

Jul-11

Sep-10

Nov-09

0

Jan-09

(80)

(10)

0.5 Jan-97

50

(60)

Sources: URA; HDB; Bloomberg; BNP Paribas

0

1.0

Jan-95

(40)

1.5

Jan-93

(20)

20

2.0

Sources: Bloomberg; BNP Paribas

We raise our 2013E EPS for KLPD by 2.5% on better-than-expected 3Q13 results. But, we lower our 2014E/15E EPS by 6.8-11.1% to partly factor in our new Singapore home price assumptions (we now assume prices will fall 15% by 2015, vs our previous estimate of a 10% decline). We also lower our RNAV estimate by 6.2% to SGD5.76/share, partly to factor in our new Singapore home price assumptions and changes in stock prices of the listed entities. Accordingly, we trim our TP by 12% to SGD3.92, offering upside potential of 6%. Our new TP is pegged to a 32% discount to RNAV, or -0.5x standard deviation to the mean of its discount to RNAV. This discount is slightly lower that what we have assigned to its peers, to reflect potential monetising of its office assets (eg MBFC T3), which may result in special dividends, likely in 2014E. Our new TP of SGD3.92 offers limited upside potential from current levels, hence we downgrade KPLD to HOLD, from Buy.

43

BNP PARIBAS

20 NOVEMBER 2013

Keppel Land

KPLD SP

Chong Kang Ho, CFA

EXHIBIT 7: Keppel Land - RNAV derivation (SGD m)

Attrib. value

Surplus

RNAV

Investment properties Estimated market value

1,708

Less: Book value

(1,302)

Surplus/ (deficit to book value)

406

Development properties NPV of future resi development profits Listed entities K-REIT Asia (KREIT SP)

1,828 Stake (%) 44.7

Surplus/ (deficit to book value)

Other business segments Fund management business

153

Stake (%)

P/E

FY13E PATMI

100

8

44

370

Total shareholders' equity as at FY12E

6,169

Total equity value for 2013E

8,927

RNAV per share

5.76

Fully-diluted share base (m)

1,550

Applied discount to RNAV (%)

(32)

Target price

3.92

Sources: Company data; URA; Bloomberg; BNP Paribas estimates

44

BNP PARIBAS

20 NOVEMBER 2013

Keppel Land

KPLD SP

Chong Kang Ho, CFA

Financial statements Keppel Land Profit and Loss (SGD m) Year Ending Dec Revenue Cost of sales ex depreciation Gross profit ex depreciation Other operating income Operating costs Operating EBITDA

2011A

2012A

2013A

2014E

949

939

1,180

1,729

2015E 2,170

(636)

(625)

(685)

(1,089)

(1,411)

313

314

496

640

760

99

100

84

76

80

(140)

(123)

(157)

(234)

(273)

273

291

423

482

567

(9)

(11)

(10)

(10)

(9)

0

0

0

0

0

Operating EBIT

264

280

413

473

558

Net financing costs

(35)

(40)

(38)

(33)

(33)

Associates

175

374

99

83

185

0

0

0

0

0

Non recurring items

591

373

0

0

0

Profit before tax

996

987

475

523

710 (58)

Depreciation Goodwill amortisation

Recurring non operating income

Tax

(108)

(122)

(38)

(43)

Profit after tax

888

865

437

479

653

Minority interests

(30)

(27)

(29)

(31)

(155)

Preferred dividends

0

0

0

0

0

Other items

0

0

0

0

0

858

838

408

448

498

(591)

(373)

0

0

0

266

465

408

448

498

Recurring EPS *

0.18

0.32

0.28

0.31

0.34

Reported EPS

0.59

0.57

0.28

0.31

0.34

DPS

0.18

0.08

0.08

0.08

0.08

Revenue (%)

38.5

(1.1)

25.7

46.5

25.5

Operating EBITDA (%)

15.0

6.6

45.3

14.0

17.6

Operating EBIT (%)

15.7

6.0

47.5

14.3

18.0

Recurring EPS (%)

(0.7)

74.6

(12.2)

9.9

11.0

Reported EPS (%)

22.1

(2.2)

(51.3)

9.9

11.0

Gross margin inc depreciation (%)

32.1

32.3

41.2

36.4

34.6

Operating EBITDA margin (%)

28.8

31.0

35.8

27.9

26.1

Operating EBIT margin (%)

27.9

29.8

35.0

27.3

25.7

Net margin (%)

28.1

49.5

34.6

25.9

22.9

Effective tax rate (%)

10.9

12.4

7.9

8.3

8.1

Dividend payout on recurring profit (%)

96.5

25.2

28.7

26.1

23.5

Reported net profit Non recurring items & goodwill (net) Recurring net profit Per share (SGD)

Growth

Operating performance

Interest cover (x) Inventory days

12.6

16.2

13.6

17.0

22.6

1,787.7

2,524.8

2,284.1

1,246.1

962.0

Debtor days

232.6

233.8

117.1

46.1

21.8

Creditor days

558.7

733.4

701.7

514.7

561.2

Operating ROIC (%)

5.1

4.6

7.0

10.2

14.0

ROIC (%)

6.0

7.2

5.6

7.0

9.7

ROE (%)

5.6

8.0

6.6

7.2

7.6

ROA (%)

3.7

5.0

4.4

4.9

6.0

2011A

2012A

2013E

2014E

2015E

708

724

942

1,490

1,921

Hotel and resorts operations

78

72

78

79

80

Fund management

82

86

88

90

99

Rental income from investment properties

80

56

71

71

71

0

0

0

0

0

*Pre exceptional, pre-goodwill and fully diluted

Revenue By Division (SGD m) Property development

Others

Sources: Keppel Land; BNP Paribas estimates

45

BNP PARIBAS

20 NOVEMBER 2013

Keppel Land

KPLD SP

Chong Kang Ho, CFA

Financial statements Keppel Land Cash Flow (SGD m) Year Ending Dec

2011A

2012A

2013E

2014E

2015E

266

465

408

448

498

Depreciation

9

11

10

10

9

Associates & minorities

0

(374)

(411)

(452)

(498) (105)

Recurring net profit

Other non-cash items

(112)

82

(168)

(68)

Recurring cash flow

163

184

(161)

(62)

(96)

(1,101)

(831)

(1,041)

(446)

(407)

Change in working capital Capex - maintenance Capex - new investment Free cash flow to equity Net acquisitions & disposals Dividends paid Non recurring cash flows Net cash flow Equity finance

(676)

(42)

(34)

(27)

(29)

0

(350)

(261)

(479)

(400)

(1,614)

(1,039)

(1,497)

(1,015)

(931)

1,578

44

811

186

274

0

0

0

0

0

15

0

8

8

5

(21)

(994)

(679)

(821)

(652)

3

2

150

150

150

Debt finance

365

672

1,063

1,085

1,394

Movement in cash

347

(320)

535

414

892

(0.07)

Per share (SGD) Recurring cash flow per share FCF to equity per share Balance Sheet (SGD m) Year Ending Dec Working capital assets

0.11

0.13

(0.11)

(0.04)

(1.10)

(0.71)

(1.02)

(0.69)

(0.64)

2011A

2012A

2013E

2014E

2015E

4,579

5,564

4,054

4,125

3,874

(1,051)

(1,459)

(1,173)

(1,899)

(2,438)

Net working capital

3,528

4,105

2,881

2,225

1,435

Tangible fixed assets

838

1,591

1,163

1,326

1,481

4,366

5,696

4,045

3,551

2,916

Goodwill

0

0

0

0

0

Other intangible assets

0

0

0

0

0

2,118

2,709

2,563

2,820

3,102

Working capital liabilities

Operating invested capital

Investments Other assets Invested capital Cash & equivalents Short term debt Long term debt * Net debt Deferred tax Other liabilities Total equity

0

0

0

0

0

6,484

8,405

6,608

6,371

6,018

(1,942)

(1,597)

(2,125)

(2,558)

(3,470)

208

723

204

224

217

2,336

2,349

1,985

2,039

2,045

602

1,475

65

(296)

(1,207)

45

151

59

67

63

0

0

0

0

0

5,419

6,169

6,125

6,292

6,821

Minority interests

294

477

235

185

217

Invested capital

6,484

8,405

6,608

6,371

6,018

* includes convertibles and preferred stock which is being treated as debt

Per share (SGD) Book value per share

3.64

4.14

4.11

4.22

4.58

Tangible book value per share

3.64

4.14

4.11

4.22

4.58

Financial strength Net debt/equity (%)

10.5

22.2

1.0

(4.6)

(17.2)

Net debt/total assets (%)

6.3

12.9

0.7

(2.7)

(10.1)

Current ratio (x)

5.2

3.3

4.5

3.1

2.8

(45.4)

(16.1)

(31.8)

(15.4)

(15.2)

CF interest cover (x) Valuation

2011A

2012A

2013E

2014E

2015E

Recurring P/E (x) *

20.4

11.7

13.3

12.1

10.9

Recurring P/E @ target price (x) *

21.5

12.3

14.1

12.8

11.5

Reported P/E (x)

6.3

6.5

13.3

12.1

10.9

Dividend yield (%)

4.7

2.2

2.2

2.2

2.2

P/CF (x)

33.3

29.5

(33.7)

(86.8)

(56.7)

P/FCF (x)

(3.4)

(5.2)

(3.6)

(5.3)

(5.8)

Price/book (x)

1.0

0.9

0.9

0.9

0.8

Price/tangible book (x)

1.0

0.9

0.9

0.9

0.8

EV/EBITDA (x) **

14.5

10.4

12.7

9.9

6.6

EV/EBITDA @ target price (x) **

15.2

10.9

13.3

10.5

7.0

1.0

0.9

0.9

0.8

0.8

EV/invested capital (x) * Pre exceptional, pre-goodwill and fully diluted

** EBITDA includes associate income and recurring non-operating income

Sources: Keppel Land; BNP Paribas estimates

46

BNP PARIBAS

20 NOVEMBER 2013

Chong Kang Ho, CFA

Singapore Developers

Financial statements CapitaLand Profit and Loss (SGD m) Year Ending Dec

2011A

2012A

2013E

2014E

3,020

3,301

3,967

4,625

5,084

(1,947)

(2,073)

(2,499)

(2,867)

(3,076)

1,073

1,228

1,468

1,757

2,008

714

587

653

639

683

Operating costs

(619)

(681)

(842)

(877)

(1,030)

Operating EBITDA

1,168

1,134

1,279

1,519

1,662

(39)

(45)

(29)

(30)

(34)

0

0

0

0

0

Operating EBIT

1,129

1,089

1,250

1,489

1,628

Net financing costs

(392)

(405)

(399)

(418)

(385)

877

835

269

221

133

(285)

(155)

(75)

(75)

(75)

Revenue Cost of sales ex depreciation Gross profit ex depreciation Other operating income

Depreciation Goodwill amortisation

Associates Recurring non operating income Non recurring items Profit before tax

2015E

285

155

75

75

75

1,614

1,518

1,119

1,292

1,376

Tax

(191)

(202)

(138)

(145)

(155)

Profit after tax

1,423

1,317

981

1,147

1,221

Minority interests

(366)

(386)

(202)

(235)

(251)

Preferred dividends

0

0

0

0

0

Other items

0

0

0

0

0

Reported net profit

1,057

930

779

911

970

Non recurring items & goodwill (net)

(285)

(155)

(75)

(75)

(75)

772

775

704

836

895

Recurring EPS *

0.18

0.18

0.16

0.20

0.21

Reported EPS

0.25

0.22

0.18

0.21

0.23

DPS

0.06

0.08

0.06

0.06

0.06

Recurring net profit Per share (SGD)

Growth Revenue (%)

(10.8)

9.3

20.2

16.6

9.9

Operating EBITDA (%)

(27.0)

(2.9)

12.8

18.8

9.4

Operating EBIT (%)

(26.8)

(3.6)

14.8

19.2

9.3

Recurring EPS (%)

(18.8)

(0.1)

(9.2)

18.7

7.1

Reported EPS (%)

(25.9)

(11.8)

(16.2)

16.9

6.5

Gross margin inc depreciation (%)

34.2

35.8

36.3

37.3

38.8

Operating EBITDA margin (%)

38.7

34.3

32.2

32.8

32.7

Operating EBIT margin (%)

37.4

33.0

31.5

32.2

32.0

Net margin (%)

25.6

23.5

17.8

18.1

17.6

Effective tax rate (%)

11.8

13.3

12.3

11.3

11.3

Dividend payout on recurring profit (%)

33.3

44.5

36.5

30.7

28.7

Interest cover (x)

4.4

4.4

3.6

3.9

4.4

Inventory days

0.0

0.0

0.0

0.0

0.0

Debtor days

235.9

179.9

159.3

170.1

175.2

Creditor days

405.1

407.6

365.4

351.6

359.0

13.5

12.0

12.1

13.2

14.1

ROIC (%)

5.8

5.2

3.8

4.2

4.3

ROE (%)

5.3

5.2

4.6

5.2

5.4

ROA (%)

4.3

4.1

3.2

3.5

3.5

Operating performance

Operating ROIC (%)

*Pre exceptional, pre-goodwill and fully diluted

Revenue By Division (SGD m)

2011A

2012A

2013E

2014E

2015E

Residential

774

854

2,054

2,672

3,090

Commercial

97

87

106

106

106

Retail

246

354

338

372

391

Financial services

103

114

107

110

112

The Ascott Group & ART

377

382

341

324

324

0

0

0

0

0

1,422

1,511

1,020

1,040

1,061

RHL Group & RCH Others and consolidation adjustments

Sources: CapitaLand; BNP Paribas estimates

47

BNP PARIBAS

20 NOVEMBER 2013

Chong Kang Ho, CFA

Singapore Developers

Financial statements CapitaLand Cash Flow (SGD m) Year Ending Dec

2011A

2012A

2013E

2014E

2015E

772

775

704

836

895

39

45

29

30

34

(511)

(449)

(67)

15

118

Other non-cash items

414

506

407

449

418

Recurring cash flow

714

878

1,074

1,330

1,465

(1,328)

(476)

(1,527)

(106)

71

(135)

(146)

(500)

(306)

(403)

Capex - new investment

(1,981)

(916)

(1,448)

(1,182)

(1,315)

Free cash flow to equity

(2,730)

(660)

(2,401)

(264)

(182)

321

(1,490)

(919)

(1,153)

(1,036)

(402)

(493)

(403)

(405)

(404)

(6)

(39)

2,806

1,396

1,366

Net cash flow

(2,817)

(2,681)

(917)

(425)

(256)

Equity finance

(61)

1

12

7

9

Debt finance

1,941

2,000

2,626

(681)

(688)

Movement in cash

(937)

(680)

1,721

(1,100)

(935)

Recurring net profit Depreciation Associates & minorities

Change in working capital Capex - maintenance

Net acquisitions & disposals Dividends paid Non recurring cash flows

Per share (SGD) Recurring cash flow per share FCF to equity per share Balance Sheet (SGD m) Year Ending Dec Working capital assets Working capital liabilities

0.17

0.21

0.25

0.31

0.34

(0.64)

(0.16)

(0.57)

(0.06)

(0.04)

2011A

2012A

2013E

2014E

2015E

8,869

9,196

11,164

11,574

11,859

(2,712)

(2,792)

(3,238)

(3,569)

(3,931)

Net working capital

6,158

6,404

7,926

8,005

7,928

Tangible fixed assets

1,076

1,264

1,175

1,220

1,359

Operating invested capital

7,233

7,668

9,100

9,225

9,286

0

0

0

0

0

459

462

459

459

459

Investments

10,685

12,511

13,685

13,685

13,685

Other assets

7,966

8,857

8,054

8,069

8,087

Invested capital

26,343

29,498

31,298

31,438

31,517

Cash & equivalents

(6,264)

(5,498)

(5,146)

(6,081)

(7,432)

860

782

959

959

959

11,330

13,398

14,669

14,669

14,669

5,926

8,682

10,482

9,548

8,197

0

0

0

0

0

1,178

1,372

670

1,056

1,751 16,984

Goodwill Other intangible assets

Short term debt Long term debt * Net debt Deferred tax Other liabilities Total equity

14,902

15,080

15,610

16,266

Minority interests

4,338

4,363

4,536

4,569

4,585

Invested capital

26,343

29,498

31,298

31,438

31,517

* includes convertibles and preferred stock which is being treated as debt

Per share (SGD) Book value per share

3.51

3.57

3.69

3.85

4.02

Tangible book value per share

3.40

3.46

3.59

3.74

3.91

Net debt/equity (%)

30.8

44.7

52.0

45.8

38.0

Net debt/total assets (%)

16.8

23.0

26.4

23.2

19.1

4.2

4.1

3.9

3.9

3.9

(0.9)

1.6

(1.4)

3.2

3.9

2011A

2012A

2013E

2014E

2015E 14.8

Financial strength

Current ratio (x) CF interest cover (x) Valuation Recurring P/E (x) *

17.1

17.1

18.9

15.9

Recurring P/E @ target price (x) *

20.7

20.7

22.8

19.2

17.9

Reported P/E (x)

12.5

14.2

16.9

14.5

13.6

Dividend yield (%)

1.9

2.6

1.9

1.9

1.9

P/CF (x)

18.5

15.0

12.3

9.9

9.0

P/FCF (x)

(4.8)

(20.0)

(5.5)

(49.9)

(72.3)

Price/book (x)

0.9

0.9

0.8

0.8

0.8

Price/tangible book (x)

0.9

0.9

0.9

0.8

0.8

EV/EBITDA (x) **

12.4

13.7

18.4

16.6

15.4

EV/EBITDA @ target price (x) **

14.0

15.2

20.3

18.3

17.0

0.9

0.9

0.9

0.9

0.8

EV/invested capital (x) * Pre exceptional, pre-goodwill and fully diluted

** EBITDA includes associate income and recurring non-operating income

Sources: CapitaLand; BNP Paribas estimates

48

BNP PARIBAS

20 NOVEMBER 2013

Chong Kang Ho, CFA

Singapore Developers

Financial statements Fraser & Neave Profit and Loss (SGD m) Year Ending Sep

2011A

2012A

2013E

2014E

6,274

3,596

4,394

4,994

5,873

(4,162)

(2,412)

(2,724)

(3,321)

(3,994)

2,112

1,184

1,670

1,673

1,879

191

374

44

41

43

Operating costs

(961)

(655)

(722)

(822)

(973)

Operating EBITDA

1,342

903

992

892

949

Depreciation

(120)

(81)

(95)

(108)

(120)

Revenue Cost of sales ex depreciation Gross profit ex depreciation Other operating income

Goodwill amortisation Operating EBIT Net financing costs

2015E

0

0

0

0

0

1,222

822

897

785

829

(54)

(84)

(62)

(59)

(47)

Associates

69

60

247

289

241

Recurring non operating income

33

(48)

0

0

0

142

360

0

0

0

1,413

1,111

1,082

1,015

1,023 (222)

Non recurring items Profit before tax Tax

(299)

(100)

(234)

(222)

Profit after tax

1,114

1,010

848

793

801

Minority interests

(239)

(175)

(193)

(186)

(185)

Preferred dividends

0

0

0

0

0

Other items

0

0

0

0

0

875

836

655

607

616

(142)

(360)

0

0

0

733

476

655

607

616

Recurring EPS *

0.51

0.33

0.45

0.41

0.41

Reported EPS

0.62

0.59

0.45

0.42

0.42

DPS

0.18

0.18

0.18

0.29

0.27

Reported net profit Non recurring items & goodwill (net) Recurring net profit Per share (SGD)

Growth Revenue (%)

10.1

(42.7)

22.2

13.7

17.6

Operating EBITDA (%)

7.9

(32.7)

9.8

(10.0)

6.4

Operating EBIT (%)

8.3

(32.8)

9.1

(12.5)

5.7

Recurring EPS (%)

40.4

(35.2)

36.1

(8.4)

0.3

Reported EPS (%)

6.1

(5.7)

(22.5)

(8.4)

0.3

Gross margin inc depreciation (%)

31.8

30.7

35.8

31.3

30.0

Operating EBITDA margin (%)

21.4

25.1

22.6

17.9

16.2

Operating EBIT margin (%)

19.5

22.9

20.4

15.7

14.1

Net margin (%)

11.7

13.2

14.9

12.2

10.5

Effective tax rate (%)

21.1

9.0

21.6

21.9

21.7

Dividend payout on recurring profit (%)

35.4

54.6

40.0

69.5

64.7

Interest cover (x)

24.6

10.0

18.5

18.3

22.6

Inventory days

33.6

48.4

36.5

31.5

27.5

Debtor days

74.2

99.6

63.6

66.2

65.2

Creditor days

127.6

216.2

181.6

167.1

171.9

Operating ROIC (%)

18.2

13.7

13.5

13.8

17.0

ROIC (%)

10.2

7.2

8.1

7.6

7.9

ROE (%)

11.3

6.6

8.4

7.4

7.2

ROA (%)

7.4

5.1

6.0

5.5

5.5

Operating performance

*Pre exceptional, pre-goodwill and fully diluted

Revenue By Division (SGD m)

2011A

2012A

2013E

2014E

2015E

Sale of properties

1,831

1,033

1,498

1,846

2,502

Sale of goods

3,909

1,985

2,401

2,634

2,841

Sale of services

244

273

208

221

233

Gross rental income

267

280

263

269

273

23

25

24

25

24

Others

Sources: Fraser & Neave; BNP Paribas estimates

49

BNP PARIBAS

20 NOVEMBER 2013

Chong Kang Ho, CFA

Singapore Developers

Financial statements Fraser & Neave Cash Flow (SGD m) Year Ending Sep

2011A

2012A

2013E

2014E

2015E

Recurring net profit

733

476

655

607

616

Depreciation

120

81

95

108

120

Associates & minorities

170

114

(54)

(103)

(56)

Other non-cash items

(183)

(339)

466

592

(63)

Recurring cash flow

839

332

1,162

1,204

617

Change in working capital

311

1,285

(419)

(79)

(240)

Capex - maintenance

0

0

0

0

0

(233)

(53)

(143)

(98)

(121)

917

1,564

600

1,026

257

55

(80)

74

66

69

Dividends paid

(460)

(419)

(445)

(593)

(575)

Non recurring cash flows

Capex - new investment Free cash flow to equity Net acquisitions & disposals

(311)

(269)

(254)

(241)

(247)

Net cash flow

200

797

(25)

259

(496)

Equity finance

56

87

62

72

68

Debt finance

(410)

324

90

(358)

(659)

Movement in cash

(155)

1,207

127

(27)

(1,087)

Recurring cash flow per share

0.59

0.23

0.80

0.82

0.42

FCF to equity per share

0.65

1.10

0.42

0.70

0.17

2011A

2012A

2013E

2014E

2015E

Per share (SGD)

Balance Sheet (SGD m) Year Ending Sep Working capital assets

5,898

7,187

5,813

5,558

5,110

(1,795)

(2,304)

(1,897)

(2,510)

(2,680)

Net working capital

4,103

4,884

3,917

3,048

2,430

Tangible fixed assets

1,187

747

899

1,023

1,138

Operating invested capital

5,290

5,631

4,815

4,071

3,568

0

0

0

0

0

571

163

172

180

189

Investments

1,847

1,870

1,900

1,931

1,962

Other assets

2,598

3,003

4,396

4,564

4,733

Invested capital

10,378

10,698

11,314

10,776

10,483

Cash & equivalents

(1,600)

(1,649)

(2,153)

(1,966)

(1,804)

748

936

1,567

1,271

1,027

Long term debt *

3,216

2,972

2,755

2,208

1,794

Net debt

2,364

2,259

2,170

1,514

1,017

Deferred tax

176

129

185

190

196

Other liabilities

117

56

86

72

79

6,882

7,591

8,087

8,348

8,635

Working capital liabilities

Goodwill Other intangible assets

Short term debt

Total equity Minority interests

839

663

785

654

556

Invested capital

10,378

10,698

11,314

10,777

10,483

* includes convertibles and preferred stock which is being treated as debt

Per share (SGD) Book value per share

4.88

5.32

5.60

5.71

5.84

Tangible book value per share

4.42

5.18

5.46

5.57

5.70

Net debt/equity (%)

30.6

27.4

24.5

16.8

11.1

Net debt/total assets (%)

17.2

15.4

14.1

9.9

6.8

2.9

2.7

2.3

2.0

1.9

22.4

20.3

13.0

20.2

9.0

Financial strength

Current ratio (x) CF interest cover (x) Valuation

2011A

2012A

2013E

2014E

2015E

Recurring P/E (x) *

11.3

17.5

12.8

14.0

14.0

Recurring P/E @ target price (x) *

11.8

18.2

13.4

14.6

14.5

Reported P/E (x)

9.3

9.9

12.7

13.9

13.8

Dividend yield (%)

3.1

3.1

3.1

5.0

4.6

P/CF (x)

9.7

24.8

7.2

7.0

13.8

P/FCF (x)

8.9

5.3

13.9

8.2

33.2

Price/book (x)

1.2

1.1

1.0

1.0

1.0

Price/tangible book (x)

1.3

1.1

1.1

1.0

1.0

EV/EBITDA (x) **

8.0

12.3

9.1

9.3

8.7

EV/EBITDA @ target price (x) **

8.2

12.7

9.3

9.6

9.0

EV/invested capital (x)

1.1

1.0

1.0

1.0

1.0

* Pre exceptional, pre-goodwill and fully diluted

** EBITDA includes associate income and recurring non-operating income

Sources: Fraser & Neave; BNP Paribas estimates

50

BNP PARIBAS

20 NOVEMBER 2013

Chong Kang Ho, CFA

Singapore Developers

Disclaimers and Disclosures APPENDIX DISCLAIMERS AND DISCLOSURES APPLICABLE TO NON-US BROKER-DEALER(S) (BNP Paribas Securities (Singapore) Pte Ltd, Co. Reg. No. 199801966C) ANALYST(S) CERTIFICATION Chong Kang Ho, CFA, BNP Paribas Securities (Singapore) Pte Ltd, Co. Reg. No. 199801966C, +65 6210 1956, [email protected] The analyst(s) or strategist(s) herein each referred to as analyst(s) named in this report certify(ies) that (i) all views expressed in this report accurately reflect the personal view of the analyst(s) with regard to any and all of the subject securities, companies or issuers mentioned in this report; and (ii) no part of the compensation of the analyst(s) was, is, or will be, directly or indirectly, related to the specific recommendations or views expressed by the research analyst herein. Analysts mentioned in this disclaimer are employed by a non-US affiliate of BNP Paribas Securities Corp., and are not registered/ qualified pursuant to NYSE and/or FINRA regulations.

IMPORTANT DISCLOSURES REQUIRED IN THE UNITED STATES BY FINRA RULES AND OTHER JURISDICTIONS

"BNP Paribas” is the marketing name for the global banking and markets business of BNP Paribas Group. No portion of this report was prepared by BNP Paribas Securities Corp (US) personnel, and it is considered Third-Party Affiliate research under NASD Rule 2711. The following disclosures relate to relationships between companies covered in this research report and the BNP entity identified on the cover of this report, BNP Securities Corp., and other entities within the BNP Paribas Group (collectively, "BNP Paribas"). The disclosure column in the following table lists the important disclosures applicable to each company that has been rated and/or recommended in this report: Company

Ticker

CapitaLand

CAPL SP

Disclosure (as applicable) 6

BNP Paribas represents that: 1. Within the past year, it has managed or co-managed a public offering for this company, for which it received fees. 2. It had an investment banking relationship with this company in the last 12 months. 3. It received compensation for investment banking services from this company in the last 12 months. 4. It expects to receive or intends to seek compensation for investment banking services from the subject company/ies in the next 3 months. 5. It beneficially owns 1% or more of any class of common equity securities of the subject company. 6. It makes a market in securities in respect of this company. 7. The analyst(s) or an individual who assisted in the preparation of this report (or a member of his/her household) has a financial interest position in securities issued by this company. The financial interest is in the common stock of the subject company, unless otherwise noted. 8. The analyst (or a member of his/her household) is an officer, director, or advisory board member of this company or has received compensation from the company.

IMPORTANT DISCLOSURES REQUIRED IN KOREA

The disclosure column in the following table lists the important disclosures applicable to each Korea listed company that has been rated and/or recommended in this report:

Company CapitaLand Keppel Land City Developments Fraser & Neave

1. 2. 3. 4. 5. 6. 7. 8. 9.

51

Ticker CAPL SP KPLD SP CIT SP FNN SP

Price (as of 19-Nov-2013 closing price) SGD3.10 SGD3.70 SGD10.24 SGD5.77

Interest NA NA NA NA

The performance of obligations of the Company is directly or indirectly guaranteed by BNP Paribas Securities Korea Co. Ltd (“BNPPSK”) by means of payment guarantees, endorsements, and provision of collaterals and/or taking over the obligations. BNPPSK owns 1/100 or more of the total outstanding shares issued by the Company. The Company is an affiliate of BNPPSK as prescribed by Item 3, Article 2 of the Monopoly Regulation and Fair Trade Act. BNPPSK is the financial advisory agent of the Company for the Merger and Acquisition transaction or of the Target Company whereby the size of the transaction does not exceed 5/100 of the total asset of the Company or the total number of outstanding shares. BNPPSK has taken financial advisory service regarding listing to the Company within the past 1 year. With regards to the tender offer initiated by the Company based on Item 2, Article 133 of the Financial Investment Services and Capital Market Act, BNPPSK acts in the capacity of the agent for the tender offer designated either by the Company or by the target company, provided that this provision shall apply only where tender offer has not expired. the listed company which issued the stocks in question in case where 40 days has not passed since the new shares were listed from the date of entering into arrangement for public offering or underwriting-related agreement for issuance of stocks The Company is recognized as having considerable interests with BNPPSK. The analyst or his/her spouse owns (including delivery claims of marketable securities based on legal regulations and trading and misc. contracts) the following securities or rights (hereinafter referred to as “Securities, etc.” in this Article) regardless of whose name is used in the trading. 1) Stocks, bond with stock certificate, and certificate of pre-emptive rights issued by the Company whose securities dealings are being solicited. 2) Stock options of the Company whose securities dealings are being solicited. 3) Individual stock future, stock option, and warrants that use the stocks specified in Item 1) as underlying.

BNP PARIBAS

20 NOVEMBER 2013

Chong Kang Ho, CFA

Singapore Developers History of change in investment rating and/or target price

CapitaLand (CAPL SP) Nov-09 May-10 Nov-10 May-11 Nov-11 May-12 Nov-12 May-13 Nov-13

Date 18-Nov-09

4.48

7-Dec-09 5-Jul-11

3.98

Reco

TP

REDUCE

3.14

HOLD

4.02

BUY

3.40

3.48 2.98 2.48 1.98 (SGD)

CapitaLand

Target Price

Chong Kang Ho started covering this stock from 05-Jul-2011 Price and TP are in local currency Valuation and risks: Key downside risks to our RNAV-based TP are more servere than expected cooling measures in Singapore and China, and failure to maximise value from recycling of non-core assets. Sources: Bloomberg; BNP Paribas

Keppel Land (KPLD SP) Nov-09 May-10 Nov-10 May-11 Nov-11 May-12 Nov-12 May-13 Nov-13

Date 18-Nov-09

5.20

26-Jan-10

4.70

5-Jul-11

4.20

Reco

TP

REDUCE

1.90

HOLD

3.40

BUY

4.60

3.70 3.20 2.70 2.20 1.70 (SGD)

Keppel Land

Target Price

Chong Kang Ho started covering this stock from 05-Jul-2011 Price and TP are in local currency Valuation and risks: Key downside risks to our RNAV-based TP are more severe than expected cooling measures in Singapore and China, and failure to miximise value from potential divestment of its office assets in Singapore. Upside risks include better than expected economic recovery. Sources: Bloomberg; BNP Paribas

52

BNP PARIBAS

20 NOVEMBER 2013

Chong Kang Ho, CFA

Singapore Developers

City Developments (CIT SP) Nov-09 May-10 Nov-10 May-11 Nov-11 May-12 Nov-12 May-13 Nov-13

Reco

TP

18-Nov-09

BUY

10.83

17-Nov-11

HOLD

10.06

12.88

28-Feb-12

REDUCE

9.59

11.88

19-Jun-13

HOLD

9.95

14.88 13.88

Date

10.88 9.88 8.88 7.88 (SGD)

City Developments

Target Price

Chong Kang Ho started covering this stock from 05-Jul-2011 Price and TP are in local currency Valuation and risks: Key upside risks to our RNAV-based TP are better than expected economic recovery, less punitive or reversal in cooling measures, and better than expected performance from the hotel operations. Sources: Bloomberg; BNP Paribas

Fraser & Neave (FNN SP) Nov-09 May-10 Nov-10 May-11 Nov-11 May-12 Nov-12 May-13 Nov-13 10.25

Date 18-Nov-09 19-Jul-12

9.25

Reco

TP

BUY

4.42

HOLD

7.60

8.25 7.25 6.25 5.25 4.25 3.25 (SGD)

Fraser & Neave

Target Price

Chong Kang Ho started covering this stock from 05-Jun-2012 Price and TP are in local currency Valuation and risks: Key downside risks to our RNAV-based TP are failure to maximise synergies with Thai Bev on F&B operations, more severe than expected cooling measures in Singapore and China, and rising raw material costs. Upside risks include better than expected economic recovery. Sources: Bloomberg; BNP Paribas

GENERAL DISCLAIMER

This report was produced by BNP Paribas Securities (Singapore) Pte Ltd, Co. Reg. No. 199801966C, member company(ies) of the BNP Paribas Group. This report is for the use of intended recipients only and may not be reproduced (in whole or in part) or delivered or transmitted to any other person without our prior written consent. By accepting this report, the recipient agrees to be bound by the terms and limitations set forth herein. This report does not constitute a personal recommendation or take into account the particular investment objectives, financial situations, or needs of individual clients. Customers are advised to use the information contained herein as just one of many inputs and considerations prior to engaging in any trading activity. This report does not constitute a prospectus or other offering document or an offer or solicitation to buy or sell any securities or other investments. This report is not intended to provide the sole basis of any evaluation of the subject securities and companies mentioned in this report. Information and opinions contained in this report are published for reference of the recipients and are not to be relied upon as authoritative or without the recipient’s own independent verification, or taken in substitution for the exercise of judgment by the recipient. Additionally, the products mentioned in this report may not be available for sale in certain jurisdictions. As an investment bank with a wide range of activities, BNP Paribas may face conflicts of interest, which are resolved under applicable legal provisions and internal guidelines. You should be aware, however, that BNP Paribas may engage in transactions in a manner inconsistent with the views expressed in this document, either for its own account or for the account of its clients. Australia: This report is being distributed in Australia by BNP Paribas Sydney Branch, registered in Australia as ABN 23 000 000 117 at 60 Castlereagh Street Sydney NSW 2000. BNP Paribas Sydney Branch is licensed under the Banking Act 1959 and the holder of Australian Financial Services Licence no. 238043 and therefore subject to regulation by the Australian Securities & Investments Commission in relation to delivery of financial services. By accepting this document you agree to be bound by the foregoing limitations, and acknowledge that information and opinions in this document relate to financial products or financial services which are delivered solely to wholesale clients (in terms of the Corporations Act 2001, sections 761G and 761GA; Corporations Regulations 2001, division 2, reg. 7.1.18 & 7.1.19) and/or professional investors (as defined in section 9 of the Corporations Act 2001). Canada: The information contained herein is not, and under no circumstances is to be construed as, a prospectus, an advertisement, a public offering, an offer to sell securities described herein, or solicitation of an offer to buy securities described herein, in Canada or any province or territory thereof. Any offer or sale of the securities described herein in Canada will be made only under an exemption from the requirements to file a prospectus with the relevant Canadian securities regulators and only by a dealer properly registered under applicable securities laws or, alternatively, pursuant to an exemption from the dealer registration requirement in the relevant province or territory of Canada in which such offer or sale is made. The information contained herein is under no circumstances to be construed as investment advice in any province or territory of Canada and is not tailored to the needs of the recipient. To the extent

53

BNP PARIBAS

20 NOVEMBER 2013

Chong Kang Ho, CFA

Singapore Developers

that the information contained herein references securities of an issuer incorporated, formed or created under the laws of Canada or a province or territory of Canada, any trades in such securities must be conducted through a dealer registered in Canada. No securities commission or similar regulatory authority in Canada has reviewed or in any way passed judgment upon these materials, the information contained herein or the merits of the securities described herein, and any representation to the contrary is an offence. Hong Kong: This report is prepared for professional investors and is being distributed in Hong Kong by BNP Paribas Securities (Asia) Limited to persons whose business involves the acquisition, disposal or holding of securities, whether as principal or agent. BNP Paribas Securities (Asia) Limited, a subsidiary of BNP Paribas, is regulated by the Securities and Futures Commission for the conduct of dealing in securities, advising on securities, providing automated trading services, dealing in futures contacts and advising on corporate finance. For professional investors in Hong Kong, please contact BNP Paribas Securities (Asia) Limited for all matters and queries relating to this report. India: In India, this document is being distributed by BNP Paribas Securities India Pvt. Ltd. ("BNPPSIPL"), having its registered office at 5th floor, BNP Paribas House, 1 North Avenue, Maker Maxity, Bandra Kurla Complex, Bandra (East), Mumbai 400 051 (Tel. no. +91 22 3370 4000 / 6196 4000). BNPPSIPL is registered with the Securities and Exchange Board of India (“SEBI”) as a stockbroker in the Equities and the Futures & Options segments of National Stock Exchange of India Ltd. and Bombay Stock Exchange Ltd. (SEBI regn. nos. INB/INF231474835, INB/INF011474831). Indonesia: This report is being distributed by PT BNP Paribas Securities Indonesia and is delivered by licensed employee(s) to its clients. PT BNP Paribas Securities Indonesia, having its registered office at Menara BCA, 35th Floor, Grand Indonesia, Jl. M.H.Thamrin No.1, Jakarta, 10310, Indonesia, is a fully subsidiaries company of BNP Paribas SA and is licensed under Capital Market Law No. 8 of 1995 and the holder of broker-dealer and underwriter licenses issued by the Capital Market and Financial Institutions Supervisory Agency (BAPEPAM-LK). PT BNP Paribas Securities Indonesia is also a member of Indonesia Stock Exchange. Neither this research publication nor any copy hereof may be distributed in Indonesia or to any Indonesian citizens except in compliance with applicable Indonesian capital market laws and regulations. This research publication is not an offer of securities in Indonesia. Some of the securities referred to in this research publication have not been registered with the Capital Market and Financial Institutions Supervisory Agency (BAPEPAM-LK) pursuant to relevant capital market laws and regulations, and may not be offered or sold within the territory of the Republic of Indonesia or to Indonesian citizens through a public offering or in circumstance which constitute an offer within the meaning of Indonesian capital market laws and regulations. Japan: This report is being distributed to Japanese based firms by BNP Paribas Securities (Japan) Limited or by a subsidiary or affiliate of BNP Paribas not registered as a financial instruments firm in Japan, to certain financial institutions defined by article 17-3, item 1 of the Financial Instruments and Exchange Law Enforcement Order. BNP Paribas Securities (Japan) Limited is a financial instruments firm registered according to the Financial Instruments and Exchange Law of Japan and a member of the Japan Securities Dealers Association, the Financial Futures Association of Japan and the Type II Financial Instruments Firms Association. BNP Paribas Securities (Japan) Limited accepts responsibility for the content of a report prepared by another non-Japan affiliate only when distributed to Japanese based firms by BNP Paribas Securities (Japan) Limited. Some of the foreign securities stated on this report are not disclosed according to the Financial Instruments and Exchange Law of Japan. Malaysia: This report is issued and distributed by BNP Paribas Capital (Malaysia) Sdn Bhd. The views and opinions in this research report are our own as of the date hereof and are subject to change. BNP Paribas Capital (Malaysia) Sdn Bhd has no obligation to update its opinion or the information in this research report. This publication is strictly confidential and is for private circulation only to clients of BNP Paribas Capital (Malaysia) Sdn Bhd. This publication is being provided to you strictly on the basis that it will remain confidential. No part of this material may be (i) copied, photocopied, duplicated, stored or reproduced in any form by any means or (ii) redistributed or passed on, directly or indirectly, to any other person in whole or in part, for any purpose without the prior written consent of BNP Paribas Capital (Malaysia) Sdn Bhd. Philippines: This report is being distributed in the Philippines by BNP Paribas Manila Branch, an Offshore Banking Unit (OBU) of BNP Paribas whose head office is in Paris, France. BNP Paribas Manila OBU is registered as an offshore banking unit under Presidential Decree No. 1034 (PD 1034), and regulated by the Bangko Sentral ng Pilipinas. This report is being distributed in the Philippines to qualified clients of OBUs as allowed under PD 1034, and is qualified in its entirety to the products and services allowed under PD 1034. Singapore: This report is distributed in Singapore by BNP Paribas Securities (Singapore) Pte Ltd ("BNPPSSL") and may be distributed in Singapore only to an Accredited or Institutional Investor, each as defined under the Financial Advisers Regulations ("FAR") and the Securities and Futures Act (Chapter 289) of Singapore, as amended from time to time. In relation to the distribution to such categories of investors, BNPPSSL and its representatives are exempted under Regulation 35 of the FAR from the requirements in Section 36 of the Financial Advisers Act of Singapore, regarding the disclosure of certain interests in, or certain interests in the acquisition or disposal of, securities referred to in this report. For Institutional and Accredited Investors in Singapore, please contact BNP Paribas Securities (Singapore) Ptd Ltd for all matters and queries relating to this report. South Africa: In South Africa, BNP Paribas Cadiz Securities (Pty) Ltd and BNP Paribas Cadiz Stock Broking (Pty) Ltd (hereinafter referred to as “BNPP Cadiz”) are licensed members of Johannesburg Stock Exchange and are authorised Financial Services Providers and subject to regulation by the Financial Services Board. BNPP Cadiz does not expressly or by implication represent, recommend or propose that the financial products referred to in this report are appropriate to the particular investment objectives, financial situation or particular needs of the recipient. Switzerland: This report is intended solely for customers who are “Qualified Investors” as defined in article 10 paragraphs 3 and 4 of the Swiss Federal Act on Collective Investment Schemes of 23 June 2006 (CISA) and the relevant provisions of the Swiss Federal Ordinance on Collective Investment Schemes of 22 November 2006 (CISO). “Qualified Investors” includes, among others, regulated financial intermediaries such as banks, securities dealers, fund management companies and asset managers of collective investment schemes, regulated insurance companies as well as pension funds and companies with professional treasury operations. This document may not be suitable for customers who are not Qualified Investors and should only be used and passed on to Qualified Investors. For specification purposes, a “Swiss Corporate Customer” is a Client which is a corporate entity, incorporated and existing under the laws of Switzerland and which qualifies as “Qualified Investor” as defined above." BNP Paribas (Suisse) SA is authorised as bank and as securities dealer by the Swiss Federal Market Supervisory Authority FINMA. BNP Paribas (Suisse) SA is registered at the Geneva commercial register under No. CH-270-3000542-1. BNP Paribas (Suisse) SA is incorporated in Switzerland with limited liability. Registered Office: 2 place de Hollande, CH-1204 Geneva. Taiwan: Information on securities that trade in Taiwan is distributed by BNP Paribas Securities (Taiwan) Co., Ltd. Such information is for your reference only. The reader should independently evaluate the investment risks and is solely responsible for their investment decision. Information on securities that do not trade in Taiwan is for informational purposes only and is not to be construed as a recommendation or a solicitation to trade in such securities. BNP Paribas Securities (Taiwan) Co., Ltd. may not execute transactions for clients in these securities. This publication may not be distributed to the public media or quoted or used by the public media without the express written consent of BNP Paribas. Thailand: Research relating to Thailand and Thailand based issuers is produced pursuant to an arrangement between BNP PARIBAS (“BNPP”) and Finansia Syrus Securities Public Company Limited (“FSS”). The International Investment Advisory Team at FSS prepares and distributes research under the brand name “BNP PARIBAS/FSS”. FSS is not an affiliate of BNPP. FSS also publishes a different research product under the brand name “FINANSIA SYRUS,” which is prepared by research analysts who are not part of the International Investment Advisory Team and who may cover the same securities, issuers, or industries that are the subject of this report. The ratings, recommendations, and views expressed in this report may differ from the ratings, recommendations, and views expressed by other research analysts or research teams employed by FSS. This report is being distributed outside Thailand by members of BNP Paribas. Turkey: This report is being distributed in Turkey by TEB Investment and outside Turkey jointly by TEB Investment and BNP Paribas. Notice Published in accordance with “Communiqué Regarding the Principles on Investment Consultancy Activities and the Investment Consultancy Institutions” Series: V, No: 55 issued by the Capital Markets Board. The investment related information, commentary and recommendations contained herein do not constitute investment consultancy services. Investment consultancy services are provided in accordance with investment consultancy agreements executed between investors and brokerage companies or portfolio management companies or non-deposit accepting banks. The commentary and recommendations contained herein are based on the personal views of the persons who have made such commentary and recommendations. These views may not conform to your financial standing or to your risk and return preferences. Therefore, investment decisions based solely on the information provided herein may fail to produce results in accordance with your expectations. United States: This report may be distributed in the United States only to U.S. Persons who are “major U.S. institutional investors” (as such term is defined in Rule 15a-6 under the Securities Exchange Act of 1934, as amended) and is not intended for the use of any person or entity that is not a “major U.S.

54

BNP PARIBAS

20 NOVEMBER 2013

Chong Kang Ho, CFA

Singapore Developers

institutional investor”. U.S persons who wish to effect transactions in securities discussed herein must do so through BNP Paribas Securities Corp., a USregistered broker dealer and member of FINRA, SIPC, NFA, NYSE and other principal exchanges. Certain countries within the European Economic Area: This document may only be distributed in the United Kingdom to eligible counterparties and professional clients and is not intended for, and should not be circulated to, retail clients (as such terms are defined in the Markets in Financial Instruments Directive 2004/39/EC (“MiFID”)). This document will have been approved for publication and distribution in the United Kingdom by BNP Paribas London Branch, a branch of BNP Paribas SA whose head office is in Paris, France. BNP Paribas SA is incorporated in France with limited liability with its registered office at 16 boulevard des Italiens, 75009 Paris. BNP Paribas London Branch (registered office: 10 Harewood Avenue, London NW1 6AA; tel: [44 20] 7595 2000; fax: [44 20] 7595 2555) is authorised by the Autorité de Contrôle Prudentiel and the Prudential Regulation Authority and subject to limited regulation by the Financial Conduct Authority and Prudential Regulation Authority. Details about the extent of our authorisation and regulation by the Prudential Regulation Authority, and regulation by the Financial Conduct Authority are available from us on request.This report has been approved for publication in France by BNP Paribas, a credit institution licensed as an investment services provider by the Autorité de Contrôle Prudentiel whose head office is 16, Boulevard des Italiens 75009 Paris, France. This report is being distributed in Germany either by BNP Paribas London Branch or by BNP Paribas Niederlassung Frankfurt am Main, regulated by the Bundesanstalt für Finanzdienstleistungsaufsicht (BaFin). Other Jurisdictions: The distribution of this report in other jurisdictions or to residents of other jurisdictions may also be restricted by law, and persons into whose possession this report comes should inform themselves about, and observe, any such restrictions. By accepting this report you agree to be bound by the foregoing instructions. This report is not directed to, or intended for distribution to or use by, any person or entity that is a citizen or resident of or located in any locality, state, country, or other jurisdiction where such distribution, publication, availability or use would be contrary to law or regulation. All research reports are disseminated and available to all clients simultaneously through our internal client websites. For all research available on a particular stock, please contact the relevant BNP Paribas research team or the author(s) of this report. Additional Disclosures Target price history, stock price charts, valuation and risk details, and equity rating histories applicable to each company rated in this report is available in our most recently published reports available on our website: http://eqresearch.bnpparibas.com, or you can contact the analyst named on the front of this note or your BNP Paribas representative. All share prices are as at market close on 19 November 2013 unless otherwise stated.

RECOMMENDATION STRUCTURE Stock Ratings Stock ratings are based on absolute upside or downside, which we define as (target price* - current price) / current price. BUY (B). The upside is 10% or more. HOLD (H). The upside or downside is less than 10%. REDUCE (R). The downside is 10% or more. Unless otherwise specified, these recommendations are set with a 12-month horizon. Thus, it is possible that future price volatility may cause a temporary mismatch between upside/downside for a stock based on market price and the formal recommendation. * In most cases, the target price will equal the analyst's assessment of the current fair value of the stock. However, if the analyst doesn't think the market will reassess the stock over the specified time horizon due to a lack of events or catalysts, then the target price may differ from fair value. In most cases, therefore, our recommendation is an assessment of the mismatch between current market price and our assessment of current fair value.

Industry Recommendations Improving (é): The analyst expects the fundamental conditions of the sector to be positive over the next 12 months. Stable (previously known as Neutral) (çè): The analyst expects the fundamental conditions of the sector to be maintained over the next 12 months. Deteriorating (ê): The analyst expects the fundamental conditions of the sector to be negative over the next 12 months. Country (Strategy) Recommendations Overweight (O). Over the next 12 months, the analyst expects the market to score positively on two or more of the criteria used to determine market recommendations: index returns relative to the regional benchmark, index sharpe ratio relative to the regional benchmark and index returns relative to the market cost of equity. Neutral (N). Over the next 12 months, the analyst expects the market to score positively on one of the criteria used to determine market recommendations: index returns relative to the regional benchmark, index sharpe ratio relative to the regional benchmark and index returns relative to the market cost of equity. Underweight (U). Over the next 12 months, the analyst does not expect the market to score positively on any of the criteria used to determine market recommendations: index returns relative to the regional benchmark, index sharpe ratio relative to the regional benchmark and index returns relative to the market cost of equity.

RATING DISTRIBUTION (as at 20 November 2013) Total BNP Paribas coverage universe

642

Investment Banking Relationship

(%)

Buy Hold

326

Buy

5.2

194

Hold

1.6

Reduce

122

Reduce

3.2

Should you require additional information concerning this report please contact the relevant BNP Paribas research team or the author(s) of this report. © 2013 BNP Paribas Group

55

BNP PARIBAS

20 NOVEMBER 2013

HONG KONG

BEIJING

BANGKOK

BNP Paribas (China) Ltd Beijing Branch Room 2001, 20/F China World Tower 1 Jianguomenwai Avenue Beijing, China Tel: +86-10-6535 0888 Fax: +86-10-6535 0883

BNP Paribas Equities (Asia) Ltd Shanghai Representative Office Room 2630, 26/F Shanghai World Financial Center 100 Century Avenue Shanghai 200120, China Tel (86 21) 6096 9000 Fax (86 21) 6096 9018

JAKARTA

BNP Paribas Securities (Asia) Ltd 63/F, Two International Finance Centre 8 Finance Street, Central Hong Kong SAR China Tel (852) 2825 1888 Fax (852) 2845 9411

(In cooperation with BNP Paribas) FSS International Investment Advisory Securities Co., Ltd 990 Abdulrahim Place, 12/F, Room 1210 Rama IV Road, Bangrak Bangkok 10500 Thailand Tel (66 2) 611 3500 Fax (66 2) 611 3551

PT BNP Paribas Securities Indonesia Grand Indonesia, Menara BCA, 35/F JI. M.H. Thamrin No. 1 Jakarta 10310 Indonesia Tel (62 21) 2358 6586 Fax (62 21) 2358 7587

KUALA LUMPUR

MUMBAI

SEOUL

SINGAPORE

TAIPEI

BNP Paribas Securities Korea Co Ltd 22/F, Taepyeongno Building 310 Taepyeongno 2-ga Jung-gu, Seoul 100-767 Korea Tel (82 2) 2125 0500 Fax (82 2) 2125 0593

BNP Paribas Securities (Singapore) Pte Ltd (Co. Reg. No. 199801966C) 10 Collyer Quay 34/F Ocean Financial Centre Singapore 049315 Tel (65) 6210 1288 Fax (65) 6210 1980

BNP Paribas Securities (Taiwan) Co Ltd 72/ F, Taipei 101 No. 7 Xin Yi Road, Sec. 5 Taipei, Taiwan Tel (886 2) 8729 7000 Fax (886 2) 8101 2168

ISTANBUL

NEW YORK

BASEL

TEB Investment (A JV between TEB Bank and BNP Paribas) TEB Kampus D7 Saray Mahallesi Sokullu Sok No 7 Umraniye 34768 Istanbul Turkey Tel: (90 216) 636 44 44 Fax: (90 216) 631 44 00

BNP Paribas The Equitable Tower 787 Seventh Avenue New York NY 10019, USA Tel (1 212) 841 3800 Fax (1 212) 841 3810

BNP Paribas Aeschengraben 26 CH 4002 Basel Switzerland Tel (41 61) 276 5555 Fax (41 61) 276 5514

BNP Paribas Capital (Malaysia) Sdn Bhd Vista Tower, Level 48C The Intermark, 182 Jalan Tun Razak 50400 Kuala Lumpur Malaysia Tel (60 3) 2179 6222 Fax (60 3) 2179 6226

TOKYO

BNP Paribas Securities India Pvt Ltd BNP Paribas House 1 North Avenue, Maker Maxity Bandra Kurla Complex Bandra East Mumbai 400 051 Tel (91 22) 3370 4000 Fax (91 22) 3370 4386

CAPE TOWN

SHANGHAI

BNP Paribas Securities (Japan) Ltd GranTokyo North Tower 1-9-1 Marunouchi, Chiyoda-Ku Tokyo 100-6740 Japan Tel (81 3) 6377 2000 Fax (81 3) 5218 5970

BNP Paribas Cadiz Securities (Pty) Ltd Ground floor, Fernwood House The Oval, 1 Oakdale Road, Newlands Cape Town South Africa 7700 Tel (27 21) 657 8300 Fax (27 21) 657 8301

FRANKFURT

GENEVA

LONDON

MADRID

BNP Paribas Mainzer Landstrasse 16 60325 Frankfurt Germany Tel (49 69) 7193 6637 Fax (49 69) 7193 2520

BNP Paribas 2 Place de Hollande 1211 Geneva 11 Switzerland Tel (41 22) 787 7377 Fax (41 22) 787 8020

BNP Paribas 10 Harewood Avenue London NW1 6AA UK Tel (44 20) 7595 2000 Fax (44 20) 7595 2555

MILAN

BNP Paribas SA, sucursal en Espana Hermanos Becquer 3 PO Box 50784 28006 Madrid Spain Tel (34 91) 745 9000 Fax (34 91) 745 8888

BNP Paribas Equities Italia SIM SpA Piazza San Fedele, 2 20121 Milan Italy Tel (39 02) 72 47 1 Fax (39 02) 72 47 6562

PARIS

ZURICH

MANAMA

BNP Paribas Equities France Société de Bourse 20 boulevard des Italiens 75009 Paris France Tel (33 1) 4014 9673 Fax (33 1) 4014 0066

BNP Paribas Talstrasse 41 8022 Zurich Switzerland Tel (41 1) 229 6891 Fax (41 1) 267 6813

BNP Paribas Bahrain PO Box 5253 Manama Bahrain Tel (973) 53 3978 Fax (973) 53 1237

https://eqresearch.bnpparibas.com

M.I.C.A. (P) NO. 038/

Head of Research .

Singapore Developers

2013E. 2014E. 2015E. Home prices. - Luxury. 2,000. 2,250. 2,800. 2,780. 2,800. 2,800. 2,604. 2,344. - Prime. 1,300. 1,300. 1,600. 1,670. 1,700. 1,700. 1,581. 1,423 ...... SSL Dev. The Stratum. Mass. 900. 827. 9. 57. Apr-12. Nov-12. Kheng Long. Topiary. Mass. 735. 627. 17. 47. Apr-12. Oct-12. Qingjian. Waterbay Punggol.

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