Business SummaryDonaco International Limited (DNA) operates leisure, entertainment andassociated gaming technology businesses across the Asia Pacific region.

Aristo International Hotel: Aristo International Hotel is a boutique casino innorthern Vietnam, located on the border with Yunnan Province, China.Established in 2002, the hotel has five star resort with 400 hotel rooms.

Lao Cai International Hotel: Lao Cai International Hotel is a boutique casinoin northern Vietnam. DNA owns a 95% interest, in a joint venture with theGovernment of Vietnam. The hotel has 34 rooms, 8 gaming tables andapproval to operate up to 300 electronic gaming machines, including 150 slotmachines and 150 video gaming machines.

Star Vegas Resort & Club: Star Vegas Resort & Club is a casino and hotelcomplex in Poipet, Cambodia, on the border with Thailand. The property hasmore than 100 gaming tables, more than 1400 slot machines, and 385 hotelrooms

Gaming Technology: It comprises of operation and development of gamingtechnology, including mobile payment gateways and interactive media andgambling applications for deployment on television, mobile and internet.

Latest ResearchLess than 6x FY17 PE

DNA has posted a strong FY16 result, meeting group EBITDA guidance,achieving the US$60m EBITDA guarantee at the Star Vegas property,paying down US$25m in debt while declaring a better than expected1.0cps dividend (BPe 0.4cps). In constant currency terms both the Aristoand Star Vegas recorded strong revenue and earnings growth.Management has executed on cost management initiatives which sawoperating costs flat at the Aristo property and up only 5.5% at Star Vegasimproving EBITDA margins at both properties. Growth remains a focus andDNA announced the expansion into the adjacent Star Paradise propertyunder a gaming management agreement with no Capex required fromDNA.

For more information see research 01 Sep 2016.

GICS - Consumer Serv

Donaco International Limited

ASX Code: DNA Price: $0.325 12 Mth Target Price: $1.00 Rating: Buy

Important Disclaimer - This may affect your legal rights: Because this document has been prepared without consideration of any specific client's financial situation, particular needs and investmentobjectives, a Bell Potter Securities Limited investment adviser (or the financial services licensee, or the proper authority of such licensee, who has provided you with this report by arrangement withBell Potter Securities Limited) should be consulted before any investment decision is made. While this document is based on the information from sources which are considered reliable, Bell PotterSecurities Limited, its directors, employees and consultants do not represent, warrant or guarantee, expressly or impliedly, that the information contained in this document is complete or accurate.Nor does Bell Potter Securities Limited accept any responsibility to inform you of any matter that subsequently comes to its notice, which may affect any of the information contained in this document.This document is a private communication to clients and is not intended for public circulation or for the use of any third party, without the prior approval of Bell Potter Securities Limited. This is generalinvestment advice only and does not constitute advice to any person.Disclosure of Interest: Bell Potter Securities Limited receives commission from dealing in securities and its authorised representatives, or introducers of business, may directly share in thiscommission. Bell Potter Securities and its associates may hold shares in the companies recommended.

Snapshot

DateMarket Cap.Shares on issue12 Month High12 Month Low

16 March 2017$270m831.2m$0.61$0.31

RatingRating12 Mth Target Price

Capital GainGross Yield

Implied Total Return

Buy$1.00198.5%15.2%213.7%

Investment FundamentalsFYE 30 Jun 2016A 2017F 2018F 2019F

Profit $m 58.9 69.5 77.2 83.9Profit (norm)* $m 58.9 69.5 77.2 83.9

EPS* ¢ 7.1 8.3 9.2 10.0EPS Growth % 420.1 17.1 11.1 8.6P/E* x 4.7 4.0 3.6 3.4P/E Relative % 0.0 0.0 0.0 0.0

DPS ¢ 1.0 3.4 5.1 6.6Yield % 3.0 10.1 15.2 19.7Franking % 0.0 0.0 0.0 0.0* Adjusted for goodwill and unusual itemsSource: Based on Bell Potter estimates

Share Price Chart

Total Return on $10,000 Investment

Profit & Loss ($M)2012A 2013A 2014A 2015A 2016A

Sales Revenue 1 16 20 17 143Total Revenue ex. Int. 1 18 20 17 201EBITDA -1 11 9 -1 90Depreciation & Amort. -0 -0 -0 -5 -10Goodwill Amortisation -- -- -- -- --EBIT -1 11 9 -6 80Net Interest 0 1 1 0 -20Profit Before Tax -1 12 10 -5 60Income Tax 0 -3 -3 0 -4Outside Equity Int. -- -2 -1 0 -0Profit after Tax -1 7 7 -3 56Significant Items after Tax -- -- -- -- 23Reported Profit after Tax -1 7 7 -3 79Preferred Dividends -- -- -- -- --

Cash Flow ($M)2012A 2013A 2014A 2015A 2016A

Receipts from Customers 1 28 34 27 447Funds from Operations -1 12 18 11 71Net Operating Cashflow -1 4 10 9 49Capex -0 -10 -41 -26 -2Acquisitions & Investments -- -- -- -6 -328Sale of Invest. & Subsid. -- 1 0 0 --Net Investing Cashflow -0 -8 -41 -32 -330Proceeds from Issues 2 25 101 133 --Dividends Paid -- -1 -1 -- --Net Financing Cashflow 1 22 102 127 144Net Increase Cash 0 18 71 104 -137Cash at Beginning 0 10 29 99 210Exchange Rate Adjust. -- 1 -1 7 5Cash at End 0 29 99 210 78

Ratios and Substantial Shareholders2012A 2013A 2014A 2015A 2016A

Profitability RatiosEBITDA Margin % -108.93 70.37 44.22 -4.10 63.09EBIT Margin % -110.45 69.14 42.88 -32.55 56.15Net Profit Margin % -95.44 44.83 25.90 -30.05 38.96Return on Equity % -224.92 14.52 3.53 -1.86 11.68Return on Assets % -129.10 10.71 2.89 -1.28 10.30

Debt/Safety RatiosNet Debt/Equity % -74.47 -56.54 -57.61 -69.94 15.35Interest Cover x 113.08 -12.38 -9.15 15.68 3.93

Top 5 Substantial ShareholdersLim, Keong Yew 31.8%Lim Keong Hoe 17.4%Perpetual Limited and subsidiaries 14.5%Lee Bug Huy 8.9%Lee Bug Tong 8.9%

Balance Sheet ($M)2012A 2013A 2014A 2015A 2016A

Cash & Equivalent 0 29 98 210 78Receivables 0 3 1 2 24Inventories -- 0 1 1 1Other Current Assets 0 12 21 12 3Current Assets 1 45 127 225 107Prop. Plant & Equipment 0 14 44 82 173Intangibles -- 10 10 2 403Other Non-Current Assets 0 12 21 12 3Non-Current Assets 0 24 55 85 576Total Assets 1 69 182 310 683Interest Bearing Debt -- -- 12 16 152Other Liabilities 0 17 21 17 52Total Liabilities 0 17 33 33 203Net Assets 1 52 149 277 479Share Capital 58 35 130 247 361Reserves -7 1 -0 16 25Retained Earnings -50 13 19 14 93Outside Equity Int. -- 4 1 1 1Total Shareholders Equity 1 52 149 277 479

Price vs. EPS Principals & DirectorsPrincipals

Company Secretary Mr Benedict Paul Reichel

Directors

Mr Robert Andrew Hines(Non-Executive Director)Mr Stuart James McGregor(Non-Executive Director,Non-ExecutiveChairman)Mr Benedict Paul Reichel(Company Secretary,Executive Director)Mr Benjamin Keong Hoe Lim(Non-Executive Director)Mr Keong Yew (Joey) Lim(Managing Director,Chief Executive Officer)Mr Paul Porntat Amatavivadhana(Non-Executive Director)Mr Ham Techatut Sukjaroenkaisri(Executive Director)

To access further Research or for information regarding our recommendations and ratings please seewww.bellpotter.com.au

© 2017 Morningstar, Inc. All rights reserved. Neither Morningstar, its affiliates, nor the content providers guarantee the data or content contained herein to be accurate, complete or timely nor will they have any liabilityfor its use or distribution. Any general advice or 'class service' have been prepared by Morningstar Australasia Pty Ltd (ABN: 95 090 665 544, AFSL: 240892) and/or Morningstar Research Ltd, subsidiaries ofMorningstar, Inc, without reference to your objectives, financial situation or needs. Refer to our Financial Services Guide (FSG) for more information at www.morningstar.com.au/s/fsg.pdf. You should consider theadvice in light of these matters and if applicable, the relevant Product Disclosure Statement (Australian products) or Investment Statement (New Zealand products) before making any decision to invest. Ourpublications, ratings and products should be viewed as an additional investment resource, not as your sole source of information. Past performance does not necessarily indicate a financial product's futureperformance. To obtain advice tailored to your situation, contact a professional financial adviser. Some material is copyright and published under licence from ASX Operations Pty Ltd ACN 004 523 782 ("ASXO").

Donaco International Limited

Bell Potter Securities Research

AFS Licence No. 243480 ABN 25 006 390 772

Email info@bellpotter.com.au

Website www.bellpotter.com.au