Singapore Company Focus

Singapore Petroleum Co
Bloomberg: SPC SP | Reuters: SPCS.SI

DBS Group Research . Equity 11 Jun 2008

BUY S$6.32 FSSTI : 3,033.05 Opportunity for re-entry

(Upgrade from Hold)
Price Target : 12-month S$ 8.22 (Prev S$ 7.84)
Story: SPC’s share price has fallen 13.2% within two
Reason for Report : Company update
weeks to a 4-month low, and is 22% below this year’s
Potential Catalyst: Strong 2Q08 results, sustained healthy refining
margin
peak. We believe the current share price level offers good
re-entry opportunities with limited downside.
Analyst
Singapore Research Team +65 6533 9688 Point: We raised FY08-09F net profit by 8.4% and 10.1%,
research@dbsvickers.com
respectively, to reflect current strong crude prices, but
maintain our refining margin assumptions. Consequently,
SPC’s sum-of-parts target price is upgraded to S$8.22. At
Price Relative the current price, SPC is attractive for the following
reasons: (i) limited downside risk from current level, i.e.
S$ Relative Index

9 . 50 214
8 . 50 194 cheap valuation, (ii) strong 2Q08 results should be near
7 . 50 174 term share price catalyst, (iii) attractive dividend yield of
6 . 50 154
5 . 50 134
10%, and (iv) 30% upside to our revised target price.
4 . 50 114

3 . 50 94

2 . 50 74
Relevance: The counter is trading at only 6.0x 2008 PE and
2004 2005 2006 2007 2008
4.2x EV/EBITDA vs regional peers’ (ex-Japan) 8.7x 2008 PE
Singapore Petroleum Co ( LHS ) Relative FSSTI INDEX ( RHS )
and 5.7x EV/EBITDA. We upgrade SPC to BUY from Hold.

Forecasts and Valuation Reuters’ Singapore Refining Margin

FY Dec (S$ m) 2006A 2007A 2008F 2009F US$/bbl

14
Turnover 8,574 8,767 14,125 12,935
EBITDA 416 698 842 855 12
Pre-tax Profit 338 581 700 711 10
Net Profit 285 508 546 562
Net Pft (Pre Ex.) 285 508 546 562 8
EPS (S cts) 55.2 98.9 106.0 108.9 6
EPS Pre Ex. (S cts) 55.2 98.9 106.0 108.9
EPS Gth Pre Ex (%) (35) 79 7 3 4
Diluted EPS (S cts) 55.4 98.9 105.9 108.8 2
Net DPS (S cts) 35.0 60.0 63.5 65.3
0
BV Per Share (S cts) 305.6 347.8 392.8 438.1
Mar

Apr

Oct
Jan

Feb

Jun

Aug

Sep

Dec
Jul
May

Nov

PE (X) 11.5 6.4 6.0 5.8

PE Pre Ex. (X) 11.5 6.4 6.0 5.8
P/Cash Flow (X) 9.9 5.5 5.1 4.9
EV/EBITDA (X) 7.9 5.2 4.2 3.8 2004-07 range 2008 2004-07 Avg
Net Div Yield (%) 5.5 9.5 10.0 10.3 Source: Reuters, Company
P/Book Value (X) 2.1 1.8 1.6 1.4
Net Debt/Equity (X) 0.0 0.2 0.1 CASH At A Glance
ROAE (%) 19.0 30.3 28.6 26.2
Issued Capital (m shrs) 516
Earnings Rev (%): 8.4 10.1 Mkt. Cap (S$m/US$m) 3,263 / 2,389
Consensus EPS (S cts): 95.0 102.0 Major Shareholders
Keppel Oil & Gas (%) 45.4
Sector : Oil & Gas Free Float (%) 54.6
Principal Business: Petroleum refining, marketing, distribution and Avg. Daily Vol.(‘000) 2,205
trading of crude oil and petroleum products. Other activities
include E&P.

www.dbsvickers.com
Refer to important disclosures at the end of this report
 Company Focus
Singapore Petroleum Co

Highlights Brent crude price assumptions of US$115/bbl for 2008 (from

Volatile refining margin
Refining margins (Reuters’ Singapore complex margin)
continue to exhibit high volatility – it touched this year’s low
of US$4/bbl in early Jan 2008 and peaked at US$13.3/bbl in
early Apr 2008. Margins averaged S$6.9/bbl in 1Q08 and
US$8.8/bbl QTD. Current refining margins are hovering at
US$7-9/bbl, supported by exceptionally strong middle
distillate (diesel and jet fuel) crack spreads, but offset by soft
gasoline and fuel oil spreads.
Expect strong earnings in 2Q08
US$90/bbl), US$105/bbl for 2009 (from US$85/bbl), US$95
for 2010 (from US$85/bbl), US$85/bbl for 2011and
US$75/bbl from 2012 onwards (from US$70/bbl). The raised
assumptions will boost earnings contribution from SPC’s E&P
portfolio.
Our FY08-09F net profit is raised by 8.4% and 10.1% to
S$546m and $562m, respectively, in anticipation of stronger
profit contribution from E&P. Consequently, we upgraded
our sum-of-parts target price to S$8.22 from S$7.84.
SPC: Sum-of-Parts Valuation
Division S$/share Valuation method

E&P 1.86 DCF; 10% discount rate, Cue Energy (3-

Given seasonally strong refining margins in 2Q08 and strong month average market price).
crude oil price, SPC’s quarterly results should peak in 2Q08. Refining 6.36 8x 2008 PE.
We expect it to book US$8.5/bbl refining margin, up from Total 8.22
US$7/bbl in 1Q08 but below S$9.5/bbl in 2Q07. E&P Source: DBS Vickers
performance should also be boosted by strong crude price;
Sensitivity Analysis to Target Price
we expect Brent crude to average US$118/bbl in 2Q08, up
Refining margin (US$/bbl)
from US$97/bbl in 1Q08. Net profit should jump 81% q-o-q LT Brent (US$/bbl) 5.3 5.8 6.3 6.8 7.3
(but flat y-o-y) to S$177m. 55 6.83 7.29 7.75 8.22 8.68
65 7.06 7.52 7.99 8.45 8.91
Rising contribution from E&P 75 7.29 7.76 8.22 8.68 9.14
85 7.52 7.99 8.45 8.91 9.38
With higher E&P production volume, SPC is increasingly 95 7.76 8.22 8.68 9.15 9.61
benefiting from rising crude price. As crude price continues to Source: DBS Vickers
break new highs, earnings contribution from E&P will be
rising significantly. E&P contributed to 9% of operating profit Risks
in 2007, but should rise to 34% and 40% in 2008-09 on the
back of higher E&P volume and strong crude price. Key risk to our forecast is a collapse in refining margins. This
could be caused by sharp erosion in oil demand due to high
Softer refining margin in 2H08 but resilient crude price oil prices, and removal of government subsidies in some
countries that could keep refined product prices from
We expect average refining margin to soften in 2H08 relative catching up with rising crude price.
to 1H08 due to seasonality and increasing concerns about the
Opportunity to re-enter, upgrade to Buy
impact of India’s new Reliance refinery. Gasoline spread is
likely to remain weak due to weak demand growth in key
SPC’s share price is currently at a 4-month low, after falling
market such as the US, while middle distillate spreads may
13.2% in the past two weeks vs the FSSTI’s 2.2% decline
revert to norm from the current exceptionally strong levels.
during the period. At the current price, valuations are cheap
However, this should be supported by stronger than
at only 6.0x 2008 PE and 4.2x EV/EBITDA compared to
previously expected contribution from E&P due to sustained
regional peers’ (ex-Japan) average of 8.7x 2008 PE and 5.7x
strong crude price.
EV/EBITDA. The counter is attractive for the following
reasons: (i) limited downside risk from current level, i.e. cheap
Earnings and target price revision
valuations, (ii) strong 2Q08 results should be near term share
We are retaining our refining margin assumptions at price catalyst, (iii) attractive dividend yield of 10%, and (iv)
US$6.3/bbl for 2008 and US$5.5/bbl for 2009. However, to 30% upside to our revised target price. Note that we assume
reflect the current strong crude price, we imputed higher dividend payout of 60% vs 63% and 61% payout in FY06-
07. We upgrade SPC to BUY from Hold.

Page 2
 Company Focus
Singapore Petroleum Co

Interim Results – Increasing contribution from E&P

(S$m) 1Q07 2Q07 3Q07 4Q07 1Q08 2Q08F 2007 2008F 2009F
Brent (US$/bbl) 57.6 68.7 74.9 88.7 96.8 116.0 72.6 115.0 105.0
Refining margin (US$/bbl) 7.0 9.0 5.0 7.7 7.0 8.5 7.0 6.3 5.5
E&P capacity (boed)* 2,600 2,600 2,600 10,000 9,000 11,000 3,800 11,000 15,000
Refining capacity (bpd) 145,000 145,000 145,000 145,000 145,000 145,000 145,000 145,000 145,000

Sales 1,925 1,975 2,239 2,629 2,714 3,249 8,767 14,125 12,935
E&P 10 13 18 105 94 153 145 455 501
Refining 1,915 1,962 2,221 2,524 2,620 3,096 8,261.6 13,670 12,434
Operating profit 117 194 106 158 120 225 575 723 732
E&P 5 8 7 32 38 66 52 244 295
Refining 112 186 99 126 82 159 523 479 437
Net profit 112 179 100 117 98 177 508 546 562
Note: *DBS Vickers estimate
Source: Company, DBS Vickers

Peers comparison
Market PE P/BV EV/EBITDA Div Yield ROA ROE
Cap (x) (x) (x) (%) (%) (%)
BB Ticker Name US$m 08F 09F 08F 09F 08F 09F 08F 08F 08F
SPC SP Equity SINGAPORE PETROLEUM CO LTD** 2,385 6.0 5.8 1.6 1.4 4.2 3.8 10.0 12.1 28.6
TOP TB Equity THAI OIL PCL** 3,583 6.5 7.8 1.5 1.4 4.5 4.5 7.8 12.7 25.3
PTTAR TB Equity PTT AROMATICS & REFINING ** 2,266 9.0 6.8 1.2 1.1 6.2 4.7 7.3 6.6 13.0
IRPC TB Equity IRPC PCL 2,776 7.9 8.0 0.9 0.9 6.8 6.9 5.0 9.3 12.5
BCP TB Equity BANGCHAK PETROLEUM PCL 413 14.0 5.4 0.6 0.6 8.5 3.7 2.8 2.8 5.0
SHELL MK Equity SHELL REFINING CO (F.O.M.) 991 10.6 11.3 1.5 1.5 6.8 7.0 5.2 11.6 26.3
CTX AU Equity CALTEX AUSTRALIA LIMITED 3,743 11.1 10.7 1.3 1.2 5.9 5.7 4.6 7.4 13.8
BPCL IN Equity BHARAT PETROLEUM* 2,390 5.8 5.3 0.7 0.7 3.9 35.0 4.7 4.6 12.6
HPCL IN Equity HINDUSTAN PETROLEUM* 1,548 5.4 4.9 0.6 0.6 4.6 4.0 6.2 3.7 12.4
IOCL IN Equity INDIAN OIL CORP* 10,160 6.5 6.5 1.0 1.0 4.7 4.4 4.3 5.7 14.2
010950 KS Equity S-OIL CORPORATION 7,874 10.2 10.3 2.1 1.9 4.9 5.2 7.4 8.6 20.3
096770 KS Equity SK ENERGY CO LTD 10,208 11.1 9.4 1.6 1.4 7.6 7.2 1.7 6.7 15.7
5001 JP Equity NIPPON OIL CORP* 10,142 14.8 13.7 0.8 0.7 7.3 7.3 2.3 2.2 5.3
5002 JP Equity SHOWA SHELL SEKIYU KK 3,959 12.5 16.7 1.2 1.1 8.0 8.7 3.2 2.0 5.4
5007 JP Equity COSMO OIL* 3,495 13.3 15.8 0.8 0.8 9.1 8.2 1.8 4.9 5.5
Regional average 9.6 9.2 1.2 1.1 6.2 7.8 5.0 6.7 14.4
Regional average (ex-Japan) 8.7 7.7 1.2 1.1 5.7 7.7 5.6 7.6 16.6
FTO US Equity FRONTIER OIL 2,846 9.7 7.9 2.4 1.9 5.1 4.5 0.8 16.7 30.6
SUN US Equity SUNOCO 4,835 11.8 8.2 1.8 1.6 5.3 4.2 2.9 2.1 26.5
VLO US Equity VALERO ENERGY 23,968 8.3 6.9 1.2 1.1 4.7 4.2 1.1 4.9 18.1
TSO US Equity TESORO 3,264 13.8 6.9 1.0 0.9 5.8 4.2 1.7 3.0 18.7
U.S. average 10.9 7.5 1.6 1.4 5.2 4.3 1.6 6.7 23.5

Note: *Fiscal year-end March 09-10

Source: Bloomberg, **DBS Vickers

Page 3
 Company Focus
Singapore Petroleum Co

Income Statement (S$ m) Balance Sheet (S$ m)

FY Dec 2006A 2007A 2008F 2009F FY Dec 2006A 2007A 2008F 2009F

Turnover 8,574 8,767 14,125 12,935 Net Fixed Assets 958 1,334 1,377 1,417
Cost of Goods Sold (8,072) (8,020) (13,244) (12,039) Invts in Associates & JVs 141 127 139 151
Gross Profit 502 747 881 896 Other LT Assets 60 83 83 83
Other Opng (Exp)/Inc (152) (172) (158) (163) Cash & ST Invts 429 483 592 852
Operating Profit 349 575 723 732 Other Current Assets 1,552 2,281 2,559 2,345
Other Non Opg (Exp)/Inc 0 18 0 0 Total Assets 3,140 4,308 4,750 4,848
Associates & JV Inc 11 14 12 12
Net Interest (Exp)/Inc (22) (25) (35) (33) ST Debt 444 837 837 837
Exceptional Gain/(Loss) 0 0 0 0 Other Current Liab 1,015 1,522 1,727 1,591
Pre-tax Profit 338 581 700 711 LT Debt 0 0 0 0
Tax (54) (73) (154) (149) Other LT Liabilities 111 159 159 159
Minority Interest 0 0 0 0 Shareholder’s Equity 1,570 1,790 2,027 2,261
Net Profit 285 508 546 562 Total Cap. & Liab. 3,140 4,308 4,750 4,848
Net Profit before Except. 285 508 546 562
EBITDA 416 698 842 855 Non-Cash Wkg. Capital 537 759 832 755
Net Cash/(Debt) (15) (354) (245) 15
Sales Gth (%) 14.7 2.2 61.1 (8.4)
EBITDA Gth (%) (17.2) 67.6 20.6 1.5
Opg Profit Gth (%) (21.7) 64.7 25.7 1.3
Net Profit Gth (%) (29.5) 78.7 7.4 2.9
Effective Tax Rate (%) 15.9 12.6 22.0 21.0
Cash Flow Statement (S$ m) Rates & Ratio
FY Dec 2006A 2007A 2008F 2009F FY Dec 2006A 2007A 2008F 2009F

Pre-Tax Profit 338 581 700 711 Gross Margins (%) 5.9 8.5 6.2 6.9
Dep. & Amort. 56 91 107 110 Opg Profit Margin (%) 4.1 6.6 5.1 5.7
Tax Paid (20) (42) (80) (154) Net Profit Margin (%) 3.3 5.8 3.9 4.3
Assoc. & JV Inc/(loss) (11) (14) (12) (12) ROAE (%) 19.0 30.3 28.6 26.2
Chg in Wkg.Cap. (52) (273) (147) 82 ROA (%) 9.3 13.7 12.1 11.7
Other Operating CF 64 22 0 0 ROCE (%) 18.6 27.0 25.5 25.5
Net Operating CF 375 365 568 738 Div Payout Ratio (%) 63.2 60.8 60.0 60.0
Capital Exp.(net) (66) (408) (150) (150) Net Interest Cover (x) 15.8 22.8 20.8 22.1
Other Invts.(net) 0 (15) 0 0 Asset Turnover (x) 2.8 2.4 3.1 2.7
Invts in Assoc. & JV 0 35 0 0 Debtors Turn (avg days) 37.2 49.0 35.8 38.2
Div from Assoc & JV 9 11 0 0 Creditors Turn (avg days) 40.3 54.2 41.0 45.1
Other Investing CF (4) 7 0 0 Inventory Turn (avg days) 25.5 32.7 27.9 32.6
Net Investing CF (62) (369) (150) (150) Current Ratio (x) 1.4 1.2 1.2 1.3
Div Paid (165) (284) (309) (328) Quick Ratio (x) 1.0 0.8 0.8 0.9
Chg in Gross Debt 51 393 0 0 Net Debt/Equity (X) 0.0 0.2 0.1 CASH
Capital Issues 5 1 0 0 Capex to Debt (%) 14.9 48.7 17.9 17.9
Other Financing CF (37) (52) 0 0 N. Cash/(Debt)PS (S cts) (2.9) (68.8) (47.4) 3.0
Net Financing CF (147) 58 (309) (328) Opg CFPS (S cts) 82.9 124.2 138.8 127.0
Net Cashflow 166 54 109 260 Free CFPS (S cts) 59.8 (8.2) 81.1 113.9
Quarterly / Interim Income Statement (S$ m) Segmental Breakdown
FY Dec 2Q2007 3Q2007 4Q2007 1Q2008 FY Dec 2006A 2007A 2008F 2009F

Turnover 1,975 2,239 2,629 2,714 Revenues (S$ m)

Cost of Goods Sold (1,737) (2,087) (2,424) (2,560) Upstream 49 145 455 501
Gross Profit 237 152 205 154 Downstream 8,525 8,622 13,670 12,434
Other Oper. (Exp)/Inc (29) (46) (44) (34)
Operating Profit 208 106 161 120 Total 8,574 8,767 14,125 12,935
Other Non Opg (Exp)/Inc 0 0 0 0
Associates & JV Inc 3 4 2 3
Net Interest (Exp)/Inc (6) (2) (14) (2) Operating profit (S$ m)
Exceptional Gain/(Loss) 0 0 0 0 Upstream 15 52 244 295
Pre-tax Profit 205 109 150 121 Downstream 338 523 479 437
Tax (26) (9) (33) (22)
Minority Interest 0 0 0 0 Total 353 576 723 732
Net Profit 179 100 117 98
Net profit bef Except. 179 100 117 98
EBITDA 224 124 216 165 Operating profit Margins
Upstream 29.7 36.1 53.7 58.9
Sales Gth (%) 2.6 13.4 17.4 3.2 Downstream 4.0 6.1 3.5 3.5
EBITDA Gth (%) 67.5 (44.7) 74.5 (23.7)
Opg Profit Gth (%) 77.3 (49.0) 51.7 (25.6) Total 4.1 6.6 5.1 5.7
Net Profit Gth (%) 59.9 (44.3) 17.5 (16.1)
Gross Margins (%) 12.0 6.8 7.8 5.7
Opg Profit Margins (%) 10.5 4.7 6.1 4.4
Net Profit Margins (%) 9.1 4.5 4.5 3.6
Source: Company, DBS Vickers

Page 4
 Company Focus
Singapore Petroleum Co

DBSV recommendations are based an Absolute Total Return* Rating system, defined as follows:
STRONG BUY (>20% total return over the next 3 months, with identifiable share price catalysts within this time frame)
BUY (>15% total return over the next 12 months for small caps, >10% for large caps)
HOLD (0-15% total return over the next 12 months for small caps, 0-10% for large caps)
FULLY VALUED (negative total return i.e. > -10% over the next 12 months)
SELL (negative total return of > -20% over the next 3 months, with identifiable catalysts within this time frame)

Share price appreciation + dividends

DBS Vickers Research is available on the following electronic platforms: DBS Vickers (www.dbsvresearch.com); Thomson
(www.thomson.com/financial); Factset (www.factset.com); Reuters (www.rbr.reuters.com); Capital IQ (www.capitaliq.com) and Bloomberg
(DBSR GO). For access, please contact your DBSV salesperson.

GENERAL DISCLOSURE/DISCLAIMER
This document is published by DBS Vickers Research (Singapore) Pte Ltd ("DBSVR"), a direct wholly-owned subsidiary of DBS Vickers Securities
(Singapore) Pte Ltd ("DBSVS") and an indirect wholly-owned subsidiary of DBS Vickers Securities Holdings Pte Ltd ("DBSVH"). [This report is intended
for clients of DBSV Group only and no part of this document may be (i) copied, photocopied or duplicated in any form by any means or (ii)
redistributed without the prior written consent of DBSVR.]

The research is based on information obtained from sources believed to be reliable, but we do not make any representation or warranty as to its
accuracy, completeness or correctness. Opinions expressed are subject to change without notice. This document is prepared for general circulation.
Any recommendation contained in this document does not have regard to the specific investment objectives, financial situation and the particular
needs of any specific addressee. This document is for the information of addressees only and is not to be taken in substitution for the exercise of
judgement by addressees, who should obtain separate legal or financial advice. DBSVR accepts no liability whatsoever for any direct or consequential
loss arising from any use of this document or further communication given in relation to this document. This document is not to be construed as an
offer or a solicitation of an offer to buy or sell any securities. DBSVH is a wholly-owned subsidiary of DBS Bank Ltd. DBS Bank Ltd along with its
affiliates and/or persons associated with any of them may from time to time have interests in the securities mentioned in this document. DBSVR,
DBSVS, DBS Bank Ltd and their associates, their directors, and/or employees may have positions in, and may effect transactions in securities
mentioned herein and may also perform or seek to perform broking, investment banking and other banking services for these companies.
DBSVUSA does not have its own investment banking or research department, nor has it participated in any investment banking transaction as a
manager or co-manager in the past twelve months. Any US persons wishing to obtain further information, including any clarification on disclosures in
this disclaimer, or to effect a transaction in any security discussed in this document should contact DBSVUSA exclusively.

ANALYST CERTIFICATION
The research analyst primarily responsible for the content of this research report, in part or in whole, certifies that the views about the companies
and their securities expressed in this report accurately reflect his/her personal views. The analyst also certifies that no part of his/her compensation
was, is, or will be, directly, or indirectly, related to specific recommendations or views expressed in this report. As of 11 Jun 2008, the analyst and
his / her spouse and/or relatives who are financially dependent on the analyst, do not hold interests in the securities recommended in this report
(“interest” includes direct or indirect ownership of securities, directorships and trustee positions).

COMPANY-SPECIFIC / REGULATORY DISCLOSURES

1. DBS Vickers Securities (Singapore) Pte Ltd and its subsidiaries do not have a proprietary position in the securities
recommended in this report as of 9 Jun 2008.
2. DBSVR, DBSVS, DBS Bank Ltd and/or other affiliates of DBS Vickers Securities (USA) Inc ("DBSVUSA"), a U.S.-registered
broker-dealer, may beneficially own a total of 1% or more of any class of common equity securities of the subject
company as of 11 Jun 2008.

3. Compensation for investment banking services:

DBSVR, DBSVS, DBS Bank Ltd and/or other affiliates of DBSVUSA may have received compensation, within the
past 12 months, and within the next 3 months may receive or intends to seek compensation for investment
banking services from the subject company.
DBSVUSA does not have its own investment banking or research department, nor has it participated in any
investment banking transaction as a manager or co-manager in the past twelve months. Any US persons wishing
to obtain further information, including any clarification on disclosures in this disclaimer, or to effect a transaction
in any security discussed in this document should contact DBSVUSA exclusively.

4. There are no company-specific disclosures for Singapore Petroleum Co.

Page 5
 Company Focus
Singapore Petroleum Co

RESTRICTIONS ON DISTRIBUTION
General This report is not directed to, or intended for distribution to or use by, any person or entity who 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.

Australia This report is being distributed in Australia by DBSVR and DBSVS, which are exempted from the requirement to
hold an Australian financial services licence under the Corporation Act 2001 [“CA] in respect of financial
services provided to the recipients. DBSVR and DBSVS are regulated by the Monetary Authority of Singapore
[“MAS”] under the laws of Singapore, which differ from Australian laws. Distribution of this report is intended
only for “wholesale investors” within the meaning of the CA.

Hong Kong This report is being distributed in Hong Kong by DBS Vickers (Hong Kong) Limited which is licensed and
regulated by the Hong Kong Securities and Futures Commission.

Singapore This report is being distributed in Singapore by DBSVR, which holds a Financial Adviser’s licence and is
regulated by the MAS. This report may additionally be distributed in Singapore by DBSVS (Company Regn. No.
198600294G), which is an Exempt Financial Adviser as defined under the Financial Advisers Act. Any research
report published by any foreign DBS Vickers entities is distributed in Singapore only to “institutional investors”
as defined under the Securities and Futures Act. Distribution of research reports published by a foreign-related
corporation of DBSVR/DBSVS to “Accredited Investors” as defined under the Financial Advisers Regulations is
provided pursuant to the approval by MAS of research distribution arrangements under Paragraph 11 of the
First Schedule to the FAA.

United Kingdom This report is being distributed in the UK by DBS Vickers Securities (UK) Ltd, who is an authorised person in the
meaning of the Financial Services and Markets Act and is regulated by The Financial Services Authority.
Research distributed in the UK is intended only for institutional clients.

rd
United Arab This report is being distributed in United Arab Emirates by DBS Bank Ltd, Dubai (PO Box 506538, 3 Floor,
Emirates Building 3, Gate Precinct, DIFC, Dubai, United Arab Emirates) and is intended only for wholesale clients. DBS
Bank Ltd, Dubai is regulated by the Dubai Financial Services Authority.

United States Neither this report nor any copy hereof may be taken or distributed into the United States or to any U.S.
person except in compliance with any applicable U.S. laws and regulations.

Other In any other jurisdictions, except if otherwise restricted by laws or regulations, this report is intended only for
jurisdictions professional, institutional or sophisticated investors as defined in the laws and regulations of such jurisdictions.

DBS Vickers Research (Singapore) Pte Ltd – 8 Cross Street, #02-01 PWC Building, Singapore 048424
Tel. 65-6533 9688, Fax: 65-6226 8048
Company Regn. No. 198600295W

Page 6