Company Update, 22 November 2013

RH Petrogas (RHP SP)

Oil & Gas - Exploration & Production Market Cap: USD317m

Buy (Maintained)
Target Price: Price:
Macro

SGD1.38 SGD0.54

Market Loses Sight Of Fundamental Value

Risks Growth Value

RH Petrogas (RHP SP)

Price Close Relative to Straits Times Index (RHS)

1.0 0.9 0.8 0.7 0.6 0.5 0.4 0.3 40 35 30 25 20 15 10 5

224 204 184 164 144 124 104 84

0 0 . 3 0 0 RHPs share price fell by almost 20% on news that the Zircon-1 well did . 0 not flow. This is equivalent to a SGD99m loss in market value due to a 0 well costing SGD8m, and whose cost is recoverable. Meanwhile, the 0 stock is trading at a 44% discount to its production assets alone, ascribing zero value to 1,074mmboe of 2C and prospective resources in appraisal, development and exploration assets. Reiterate BUY, with SGD1.38 TP.

2 . 3 0 . 3

Loses SGD99m in market value in relation to recoverable SGD8m well. Fundamentally, apart from having spent SGD8m (recoverable from existing oil & gas production under the PSC terms), little has changed in RH Petrogas (RHP). The entire Zircon prospect is worth only 2.5% of the companys intrinsic value. The rapid loss of market value has given rise to a clear divergence between price and value, with irrational fear overriding reasonable valuation. 44% discount to RHPs production assets value. RHPs enterprise value now stands at USD295m, which is a sharp 44% discount to the USD525m value of its production assets (the producing areas in Basin, Island and near-production Fuyu). Investors are getting the 64.5mmboe of 2C resources and 1.04bn bbls of prospective resources for free. Devon Energy just bought 400mmboe of Eagle Ford oilfields for USD6bn. Yesterday, Devon Energy (DVN US, NR) purchased GeoSouthern Energys 400mmboe of reserves in Eagle Ford for USD6bn in cash, equivalent to USD15 per barrel. Note that Eagle Ford is an unconventional shale field producing light oil, which should have a lower NPV/bbl value compared to RHPs conventional fields. This supports our USD14.6-16.1/bbl NPV valuation for RHPs conventional light-oil assets and our USD10/bbl NPV for the unconventional heavy Fuyu oil. RHPs production assets are worth SGD0.90 per share , based on our conservative assumptions. Panic selling gone too far. The panic selling in the last month has been excessive, and predicated on miscomprehension of the technical terms and operational procedures described in RHPs announcements. We believe that the fundamental value of RHP will be reflected in the share price given wider investor education. Smart money should average down and await the eventual revaluation. Reiterate BUY, with SGD1.38 TP.
Dec-11 89 2.9 2.9 65.0 0.01 67.3 2.7 1.80 6.4 7.7 51.3 Dec-12 86 6.1 6.1 108.2 0.01 36.7 4.2 1.47 11.7 8.2 7.6 Dec-13F 96 (10.8) (10.8) (277.6) (0.02) na (5.3) 1.38 10.3 21.1 net cash 8.4 Dec-14F 124 3.6 3.6 na 0.00 88.0 1.6 1.36 17.6 8.4 2.2 (57.1) Dec-15F 186 15.1 15.1 320.0 0.02 21.0 6.3 1.28 8.9 5.7 9.0 (17.4)

Vol m

May-13

Nov-12

Mar-13

Jul-13

Sep-13

Jan-13

Source: Bloomberg

Avg Turnover (SGD/USD) Cons. Upside (%) Upside (%) 52-wk Price low/high (SGD) Free float (%) Shareholders (%) Tan Sri Datuk Sir Tiong Hiew King

4.81m/3.86m 172.2 156 0.42 - 0.92 35

64.6

Shariah compliant

Forecasts and Valuations Total turnover (USDm) Reported net profit (USDm) Recurring net profit (USDm) Recurring net profit growth (%)

Lee Yue Jer +65 6232 3898

yuejer.lee@sg.oskgroup.com

Core EPS (USD) Core P/E (x) Return on average equity (%) P/B (x) P/CF (x) EV/EBITDA (x) Net debt to equity (%) Our vs consensus EPS (%)

Jason Saw +65 6232 3871

jason.saw@sg.oskgroup.com

Source: Company data, OSK-DMG estimates

See important disclosures at the end of this report

Powered by EFATM Platform

RH Petrogas (RHP SP)

22 November 2013

Additional Notes
Valuation models. Our NPV-and-risking model incorporates a longer term view of the companys valuation, which attaches a conservative 10% risking to the companys exploration-stage resources. We also assume that the Fuyu-1 shallow oil field will commence production by early 2014. Figure 2 provides the current valuation of RHPs assets, ie the conservative estimates of the market value of its assets as of today. Note that Fuyu-1s value is halved as its oil is still classified as 2C contingent resources, while zero value is attributed to the prospective resources. RHP should still trade at a minimum of SGD1.03 today on the back of these marketable assets.

Figure 1: Our NPV-and-risking model

Equity % 60% 33% 49% 2P mmboe 9.0 2.0 11.0 Development / Re-activation / Appraisal Drilling Stage Indonesia Basin - Klalin Indonesia Basin - SE Walio Indonesia Island - TBC Indonesia Island - Koi Indonesia Island - North Sele Indonesia Island - Zircon Indonesia Basin - Klagalo China Fuyu-1 Deep Gas Exploration Stage Indonesia Malaysia Indonesia Indonesia 60% 60% 60% 33% 33% 33% 60% 49% 0.0 West Belida SK331 Basin - Wario & Arar Island - Koi & Sele Strait Total: 94% 80% 60% 33% 0.0 11.0 Value (USDm) 524.5 185.4 97.1 78.0 -77.7 807.3 731.3 0.0 64.5 35.0 35.0 9.5 2.3 7.0 5.0 5.7 14.0 32.4 27.0 73.4 5.0 180.0 399.6 386.0 970.6 1,044.0 0.0 50% 50% 50% 30% 30% 20% 20% 30% 2C mmboe Prospective Resources mmboe Risking % 100% 100% 100% Risked mmboe 9.0 2.0 35.0 46.0 4.8 1.2 3.5 1.5 1.7 2.8 6.5 8.1 30.0 0.5 18.0 40.0 38.6 97.1 173.1 NPV USDm 144.7 29.3 350.6 524.5 38.2 9.4 25.6 11.0 12.5 20.5 52.1 16.2 185.4 0.5 18.0 40.0 38.6 97.1 807.0 NPV USD/boe 16.1 14.6 10.0 11.4 8.0 8.0 7.3 7.3 7.3 7.3 8.0 2.0 6.2 1.0 1.0 1.0 1.0 1.0 4.7

Country Field Production / Near-production Stage Indonesia Basin Indonesia Island China Fuyu-1 Shallow Oil

29.5

10% 10% 10% 10%

Producing / near-production Development / appraisal Exploration Adjust for Group gross cash USDm) Adjust for Group gross debt (USDm) Target equity value (USDm) Shares (m) Forex rate

Per share 0.72 0.25 0.13 0.11 Adjusted for placement. -0.11 Adjusted for expected capex till 3Q14. 1.10 1.25

Equity value per share (SGD/share)

Source: OSK-DMG estimates

1.38

See important disclosures at the end of this report

RH Petrogas (RHP SP)

22 November 2013

Figure 2: Market valuation of reserves and resources as of 21 Nov 2013

Equity Country Field Production / Near-production Indonesia Basin Indonesia Island China Fuyu-1 - Shallow Oil Development / Re-activation / Appraisal Drilling Stage Indonesia Basin - Klalin Indonesia Basin - SE Walio Indonesia Island - TBC Indonesia Island - Koi Indonesia Island - North Sele Indonesia Island - Zircon Indonesia Basin - Klagalo China Fuyu-1 - Deep Gas Exploration Stage Indonesia Malaysia Indonesia Indonesia Total % 60% 33% 49% 2P mmboe 9.0 2.0 11.0 60% 60% 33% 33% 33% 33% 60% 49% 0.0 West Belida SK331 Basin - Walio / Arar Island - Koi & Sele Strait 94% 80% 60% 33% 0.0 11.0 0.0 64.5 35.0 35.0 9.5 2.3 7.0 5.0 5.7 14.0 32.4 27.0 73.4 5.0 180.0 399.6 386.0 970.6 1,044.0 0.0 8.0 8.0 7.3 7.3 7.3 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 173.9 0.0 399.9 224.6 2C mmboe Prospective Resources mmboe 2P Value USDm/ mmboe 16.1 14.6 5.0 173.9 2C Value USDm/ mmboe PR Value USDm/ mmboe 2P Value USDm 144.7 29.3 175.3 175.3 76.4 18.8 51.2 36.6 41.7 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 2C Value USDm PR Value USDm

29.5

2P 2C Resources Add cash Less debt Equity value Shares (m) Forex rate

Equity value (SGD)

Source: OSK-DMG estimates

Value (USDm) Per Share 173.9 0.24 399.9 0.55 0.0 0.00 78.0 0.11 Adjusted for placement. -49.2 -0.07 Debt as of 3Q13. No adjustment for future capex as this is liquidation valuation. 602.7 0.82 731.3 1.25 USD/boe 1.03 Implicit EV/(2P+2C) Valuation 8.0

See important disclosures at the end of this report

RH Petrogas (RHP SP)

22 November 2013

Financial Exhibits
Profit & Loss (USDm) Total turnover Cost of sales Gross profit Gen & admin expenses Other operating costs Operating profit Operating EBITDA Depreciation of fixed assets Operating EBIT Other recurring income Interest expense Pre-tax profit Taxation Profit after tax & minorities Reported net profit Recurring net profit
Source: Company data, OSK-DMG estimates

Dec-11 89 (57) 33 (5) (7) 20 33 (13) 20 1 (2) 19 (16) 3 3 3

Dec-12 86 (54) 32 (5) (8) 18 29 (10) 18 0 (2) 16 (10) 6 6 6

Dec-13F 96 (62) 35 (7) (26) 1 12 (11) 1 1 (3) (1) (10) (11) (11) (11)

Dec-14F 124 (81) 42 (8) (10) 25 38 (13) 25 (3) 22 (19) 4 4 4

Dec-15F 186 (125) 61 (8) (10) 43 60 (17) 43 (3) 40 (25) 15 15 15

Cash flow (USDm) Operating profit Depreciation & amortisation Change in working capital Other operating cash flow Operating cash flow Interest received Interest paid Tax paid Cash flow from operations Capex Other investing cash flow Cash flow from investing activities Proceeds from issue of shares Increase in debt Other financing cash flow Cash flow from financing activities Cash at beginning of period Total cash generated Forex effects Implied cash at end of period
Source: Company data, OSK-DMG estimates

Dec-11 20 13 7 3 43 0 (1) (11) 31 (28) (1) (29) 31 (14) 17 6 19 (1) 24

Dec-12 18 10 (6) 5 29 0 (2) (8) 19 (28) (1) (29) 16 (2) 14 24 4 0 28

Dec-13F 1 11 3 25 40 0 (3) (10) 27 (41) (1) (42) 58 6 64 29 49 78

Dec-14F 25 13 1 39 (3) (19) 18 (52) (52) 10 10 77 (24) 53

Dec-15F 43 17 4 63 (3) (25) 36 (53) (53) 10 10 53 (7) 46

See important disclosures at the end of this report

RH Petrogas (RHP SP)

22 November 2013

Financial Exhibits
Balance Sheet (USDm) Total cash and equivalents Inventories Accounts receivable Other current assets Total current assets Tangible fixed assets Intangible assets Total other assets Total non-current assets Total assets Short-term debt Accounts payable Other current liabilities Total current liabilities Total long-term debt Other liabilities Total non-current liabilities Total liabilities Share capital Retained earnings reserve Shareholders' equity Total equity Total liabilities & equity
Source: Company data, OSK-DMG estimates

Dec-11 24 5 6 1 35 65 140 55 259 294 1 49 6 56 79 50 128 184 138 (28) 110 110 294

Dec-12 29 6 9 1 44 68 140 67 275 319 5 49 3 58 37 43 80 138 200 (19) 181 181 319

Dec-13F 77 2 12 1 91 79 140 62 281 372 11 51 4 65 37 41 78 143 258 (29) 229 229 372

Dec-14F 53 2 15 1 71 118 140 62 320 391 21 56 4 80 37 41 78 158 258 (26) 233 233 391

Dec-15F 46 3 23 1 73 154 140 62 356 429 31 68 4 103 37 41 78 181 258 (11) 248 248 429

Key Ratios (USD) Revenue growth (%) Operating profit growth (%) Net profit growth (%) EPS growth (%) Bv per share growth (%) Operating margin (%) Net profit margin (%) Return on average assets (%) Return on average equity (%) Net debt to equity (%) Recurrent cash flow per share
Source: Company data, OSK-DMG estimates

Dec-11 76.2 214.2 65.0 64.8 0.5 22.4 3.3 1.0 2.7 51.3 0.07

Dec-12 (3.4) (8.0) 108.2 83.5 22.6 21.3 7.1 2.0 4.2 7.6 0.04

Dec-13F 11.5 (92.7) (277.6) (242.6) 6.0 1.4 (11.3) (3.1) (5.3) (12.8) 0.04

Dec-14F 28.4 1761.2 0.0 0.0 1.6 20.1 2.9 0.9 1.6 2.2 0.02

Dec-15F 50.6 71.8 320.0 320.0 6.5 23.0 8.1 3.7 6.3 9.0 0.05

See important disclosures at the end of this report

RH Petrogas (RHP SP)

22 November 2013

SWOT Analysis
A higher probability of discoveries in its oilfields that have existing production Strong pipeline of drilling plans to move resources to reserves Senior management has over 35 years of relevant experience Rising oil prices would make future acquisitions more expensive, while increasing the value of its existing assets. Falling oil prices have the opposite impact.

Has a network within the industry to expand further into Myanmar and other Asean countries

Exploration plans could be delayed by political events in regional countries

P/E (x) vs EPS growth

200
180 160 140 120 100 80 60 40 20 0

P/BV (x) vs ROAE

5,000%
4,400% 3,800% 3,200% 2,600% 2,000% 1,400% 800% 200% -400% -1,000%

2.0
1.8 1.6 1.4 1.2 1.0 0.8 0.6 0.4 0.2 0.0

8%
7% 5% 4% 2% 1% 0% -2% -3% -5% -6%

Jan-11

Jan-12

Jan-13

Jan-14

Jan-15

Jan-11

Jan-12

Jan-13

Jan-14

P/E (x) (lhs)

EPS growth (rhs)

P/B (x) (lhs)

Return on average equity (rhs)

Source: Company data, OSK-DMG estimates

Source: Company data, OSK-DMG estimates

Company Profile
RH Petrogas is an exploration & production company with oil & gas concessions in Indonesia, Malaysia and China. It has two producing fields in Indonesia and is currently developing the Chinese concession for production. Exploration and appraisal wells are planned for concessions in Malaysia and Indonesia.

See important disclosures at the end of this report

Jan-15

RH Petrogas (RHP SP)

22 November 2013

Recommendation Chart
Price Close
1.1 1.0
Recommendations & Target Price

0.9
0.8 0.7 0.6 0.5 0.4
Buy 0.3 Nov-08 Neutral Sell Trading Buy Take Profit

Not Rated

Mar-10

Jun-11

Sep-12

Source: OSK-DMG estimates, Bloomberg

Date 2013-11-18 2013-11-11 2013-10-31 2013-10-03 2013-10-01 Recommendation Buy Buy Buy Buy Buy Target Price Price 1.38 1.33 1.33 1.33 1.47 0.58 0.69 0.67 0.90 0.71

Source : OSK-DMG estimates, Bloomberg

See important disclosures at the end of this report

1.33

1.47

NR

RHB Guide to Investment Ratings DMG & Partners Research Guide to Investment Ratings Buy: Share price may exceed 10% over the next 12 months Trading Buy: Share price may10% exceed 15% over 12 themonths next 3 months, however longer-term outlook remains uncertain Buy: Share price may exceed over the next Neutral: Buy: Share price price may fall within the 15% range of +/10% the next 12 months Trading Share may exceed over the nextover 3 months, however longer-term outlook remains uncertain Take Profit: Target price been attained. Look to10% accumulate lower Neutral: Share price may has fall within the range of +/over theat next 12 levels months Sell: may fall has by more 10% Look over the next 12 months Take Share Profit:price Target price beenthan attained. to accumulate at lower levels Not Rated: is not within regular research coverage Sell: Share Stock price may fall by more than 10% over the next 12 months Not Rated: Stock is not within regular research coverage Disclosure & Disclaimer DISCLAIMERS All research is based on material compiled from data considered to be reliable at the time of writing, but RHB does not make any representation or warranty, express or implied, as to its accuracy, completeness or correctness. No distribution part of this report is to be construed as an offer solicitation of an offer This research is issued by DMG & Partners Research Pte Ltd and it is for general only. It does not have any regard to or the specific investment to transact any securities or financial instruments referred to herein otherwise. report is general in nature andevaluate has been prepared for objectives, financial situation and particular needswhether of any specific recipient ofor this researchThis report. You should independently particular information purposes only. is intended for circulation to the clients of RHB and its relatedor companies. Any recommendation contained in this report does investments and consult anItindependent financial adviser before making any investments entering into any transaction in relation to any securities or not have regard to the specific investment objectives, financial situation and the particular needs of any specific addressee. This report is for the investment instruments mentioned in this report. information of addressees only and is not to be taken in substitution for the exercise of judgment by addressees, who should obtain separate legal or financial advice to independently the particular investments and strategies. The information contained herein evaluate has been obtained from sources we believed to be reliable but we do not make any representation or warranty nor accept any responsibility or liability as to its accuracy, completeness or correctness. Opinions and views expressed in this report are subject to change RHB, its affiliates and related companies, their respective directors, associates, connected parties and/or employees may own or have positions in without notice. securities of the company(ies) covered in this research report or any securities related thereto, and may from time to time add to, or dispose off, or may be materially interested in any such Further, RHB, its affiliatesof and related companies and seek to do business with the company(ies) covered This report does not constitute orsecurities. form part of any offer or solicitation any offer to buy or selldo any securities. in this research report and may from time to time act as market maker or have assumed an underwriting commitment in securities of such company(ies), may sell them or Research buy them from customers on a principal basis and may also perform or seek to perform investment advisoryBank or DMG & Partners Pte Ltd is a wholly-owned subsidiary of DMG & Partners Securities Pte Ltd, a significant joint venture between banking, OSK Investment underwriting services forhave or relating such company(ies), as well Bank as solicit such investment, advisory or other services fromwhich any entity mentioned in Berhad, Malaysia which since to merged into RHB Investment Berhad (the merged entity is referred to as RHBIB in turn is a wholly - this research report. of RHB Capital Berhad) and Deutsche Asia Pacific Holdings Pte Ltd (a subsidiary of Deutsche Bank Group). DMG & Partners Securities owned subsidiary Pte Ltd is a Member of the Singapore Exchange Securities Trading Limited. RHB and its employees and/or agents do not accept any liability, be it directly, indirectly or consequential losses, loss of profits or damages that may arise from relianceSecurities based onPte thisLtd report further communication given in relation to this report, such loss of profits damages DMGany & Partners andor their associates, directors, and/or employees may haveincluding positionswhere in, and maylosses, effect transactions inor the securities are alleged to have arisen due to the contents such or broking communication being perceived as defamatory in nature. covered in the report, and may also perform orof seek toreport perform and other corporate finance related services for the corporations whose securities are covered in the report. This report is therefore classified as a non-independent report. The term RHB shall denote where applicable, the relevant entity distributing the report in the particular jurisdiction mentioned specifically herein below and shall refer to RHB Research Institute Sdn Bhd, its Pte holding company, affiliates, including subsidiaries and companies. As of 21 November 2013, DMG & Partners Securities Ltd and its subsidiaries, DMG & related Partners Research Pte Ltd, do not have proprietary positions in the subject companies, except for: a) All Rights Reserved. This report is for the use of intended recipients only and may not be reproduced, distributed or published for any purpose without prior consent RHB and2013, RHB accepts no liability whatsoever for the stock actions third parties this respect. As of 21 of November none of the analysts who covered in of this report has in an interest in the subject companies covered in this report, except for: Malaysia a) This report is published and distributed in Malaysia by RHB Research Institute Sdn Bhd (233327-M), Level 11, Tower One, RHB Centre, Jalan Tun Razak, DMG & Partners Research Pte. Ltd. (Reg. No. 200808705N) 50400 Kuala Lumpur, a wholly-owned subsidiary of RHB Investment Bank Berhad (RHBIB), which in turn is a wholly-owned subsidiary of RHB Capital Berhad. Singapore
Kuala Lumpur Malaysia Research Office Hong Kong RHB OSK Securities Hong Kong Ltd. Singapore DMG & Partners

This report RHB is published and distributed in Singapore by DMG & Partners Research PteHong Ltd (Reg. 200808705N), a wholly-owned subsidiary of DMG & (formerly known as OSK Securities Kong No. Ltd.) Securities Pte. Ltd. Research Institute Sdn Bhd Partners Securities Pte Ltd, a joint venture between Deutsche Asia Pacific Holdings and OSK Investment Level 11, Tower One, RHB Centre 12th Floor Pte Ltd (a subsidiary of Deutsche Bank 10Group) Collyer Quay Bank Berhad, Malaysia which have since merged into RHB Investment Bank Berhad (the merged entity is referred to as RHBIB, w hich in turn is a whollyJalan Tun Razak World-Wide House #09-08 Ocean Financial Centre 19 Pte Des Ltd Voeux Road Singapore Trading 049315 Limited. DMG & owned subsidiary ofKuala RHBLumpur Capital Berhad). DMG & Partners Securities is a Member of the Singapore Exchange Securities Malaysia Central, Hongcovered Kong Tel : +(65) 6533 1818 activities; this Partners Securities Pte Ltd may have received compensation from the company in this report for its corporate finance or its dealing Tel classified : +(60) 3 9280 2185 Tel : +(852) 2525 1118 Fax : +(65) 6532 6211 report is therefore as a non-independent report.
Fax : +(60) 3 9284 8693 Fax : +(852) 2810 0908 Jakarta Shanghai including DMG & Partners Research Pte Phnom As of 21 November 2013, DMG & Partners Securities Pte Ltd and its subsidiaries, Ltd, doPenh not have proprietary positions in the securities covered in this report, except for: a) - PT RHB OSK Securities Indonesia RHB OSK (China) Investment Advisory Co. Ltd. RHB OSK Indochina Securities Limited (formerly known as PT OSK Nusadana Securities (formerly known as OSK (China) Investment (formerly known as OSK Indochina Securities Limited) Indonesia) Advisory Co. report Ltd.) has an interest in such securities, No. 1-3, Street As of 21 November 2013, none of the analysts who covered the securities in this except for: 271 Plaza CIMB Niaga Suite 4005, CITIC Square Sangkat Toeuk Thla, Khan Sen Sok a) 14th Floor Jl. Jend. Sudirman Kav.25 Jakarta Selatan 12920, Indonesia Special Distribution by RHB Tel : +(6221) 2598 6888 Fax : +(6221) 2598 6777 1168 Nanjing West Road Shanghai 20041 China Tel : +(8621) 6288 9611 Fax : +(8621) 6288 9633 Phnom Penh Cambodia Tel: +(855) 23 969 161 Fax: +(855) 23 969 171

Where the research report is produced by an RHB entity (excluding DMGBangkok & Partners Research Pte Ltd) and distributed in Singapore, it is only distributed to "Institutional Investors", "Expert Investors" or "Accredited Investors" as defined in the Securities and Futures Act, CAP. 289 of Singapore. If you are not an "Institutional Investor", "Expert Investor" or "Accredited Investor", this research report is not intended for you and you should disregard this research RHB OSK Securities (Thailand) PCL report in its entirety. In respect of any matters arising (formerly from, or in connection with this research report, you are to contact our Singapore Office, DMG & known as OSK Securities (Thailand) PCL) Partners Securities Pte Ltd. 10th Floor, Sathorn Square Office Tower
98, North Sathorn Road,Silom Bangrak, Bangkok 10500 Thailand Tel: +(66) 862 9999 This report is published and distributed in Hong Kong by RHB OSK Securities Hong Kong Limited (RHBSHK) (formerly known as O SK Securities Hong Faxwhich : +(66) have 108 0999 Kong Limited), a subsidiary of OSK Investment Bank Berhad, Malaysia since merged into RHB Investment Bank Berhad (the merged entity is

Hong Kong

referred to as RHBIB), which in turn is a wholly-owned subsidiary of RHB Capital Berhad. RHBSHK, RHBIB and/or other affiliates may beneficially own a total of 1% or more of any class of common equity securities of the subject company. RHBSHK, RHBIB and/or other affiliates may, within the past 12 months, have received compensation and/or within the next 3 months seek to obtain compensation for investment banking services from the subject company. Risk Disclosure Statements 8 The prices of securities fluctuate, sometimes dramatically. The price of a security may move up or down, and may become valueless. It is as likely that losses will be incurred rather than profit made as a result of buying and selling securities. Past performance is not a guide to future performance. RHBSHK does not maintain a predetermined schedule for publication of research and will not necessarily update this report