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  • 8/16/2019 JKH CTSA 2016 Q1

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    26-May-15 25-Nov-15 26-May-16

    John Keells Holdings

    JKH-N - Rs.156.0

    CT CLSA SECURITIES (PVT) LIMITED | A Member of the Colombo Stock Exchange

    Yasas Wijethunga Key Highlights Email : [email protected] : +94 77 0532059 4Q16 Results Summary

    4Q16 EPS excluding fair value gains of Rs.3.6 (+3% YoY on a recurring basis), above ourexpectations, primarily due to higher than anticipated performance in Leisure, Consumer Food &Retail (CF&R) and  „Others‟  sectors

      JKH‟s FY17E group recurring NP forecast revised up by +5% to Rs.13,344mn (-3% YoY) largelydue to upward revisions to Leisure and Others sectors. FY18E group NP forecast at Rs.14,631mn(-10% YoY), largely driven by Leisure and CF&R sectors

    Amid recent overall market weakness, the JKH share price has fallen -13% in 2016YTD and -11%YoY (vs. -5% and -9% decline in ASI respectively)

    JKH share trades at forward PER multiples of 13.9X for FY16E and 12.7X for FY17E, on modest

    EPS growth expectations. Trailing PER at 13.0x. The share currently trades at a 9% discount toour estimated Some of The Parts (SOTP) valuation of Rs.170 (excluding 2016 warrant conversionat Rs.171)

    At current prices, JKH warrants seems significantly overvalued, with only less than six months toexpiration and remains as a near term concern

    The success of the US$820mn Waterfront Project remains critical to the group, given that JKH iscontinuing to develop the Integrated Resort (IR) on the same scale, despite the removal ofgaming facilities. The project encountered a delay recently, pushing completion to 2019 (vs.2018 previously), though not expected to materially impact the long term value of the project

    Whilst near term weakness may prevail, stemming from the overall momentum of the market,medium to longer term investors may accumulate the share on current price weakness

    Key Trading Information

    Sri Lanka

    Diversified

    27 May 2016

    Shares in Issue (mn) 1,189.4

    Market Cap (US$ mn) 1,260.5

    Estimated Free Float (%) 98.6

    3M Avg Daily Volume 813,174

    3M Avg Daily Turnover (US$) 850,312

    12M High / Low (Rs) 199.0 / 150.1

    3M / 12M Price Change (%) -1.9 / -11.1

    Relative Share Price Movement (%)

    JKH: Valuation Ratios

    Note: Valuations are based on recurring EPS, Adj. for Capital Issues (if any); Historic Ratios are based on Y/E MPS

    Warrants - FY16 - 50mn warrants to be converted to shares at Rs.171 per warrant on 13 Nov 2016

    *Includes a special dividend of Rs.3.5

    Forecasts not adjusted for proposed 07:08 subdivision (subject to approval)

    Source: CT CLSA

    JKH-NASPI

    Financials - Year to 31 March FY14 FY15 FY16 FY17E FY18E

    Net Revenue (Rs mn) 86,706 91,852 93,282 109,436 120,094

    Net Profit (Rs mn) 11,532 13,037 13,807 13,344 14,631

    Earnings per Share (Rs) 10.6 11.5 11.6 11.2 12.3

    Earnings per Share Growth (%) -1.5 8.5 0.8 -3.4 9.6

    Price / Earnings Ratio (X) 18.8 15.1 12.8 13.9 12.7

    Price / Earnings Growth (X) N/A 1.8 16.0 N/A 1.3

    Gross Dividend per Share (Rs) 3.1 3.1 7.0* 3.5 3.5

    Gross Dividend Yield (%) 1.5 1.8 4.7 2.2 2.2

    Net Book Value per Share (Rs) 108.6 117.0 114.9 122.6 131.4

    Price / Book Value (X) 1.8 1.5 1.3 1.3 1.2

    Return on Equity (%) 10.8 10.2 10.3 9.5 9.7

    Market Price per Share (Rs) 199.1 174.2 149.0 156.0 156.0

  • 8/16/2019 JKH CTSA 2016 Q1

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    EQUITY REPORT TITLE | DateA CT HOLDINGS GROUP AND CLSA GROUP COMPANY 2

    The BusinessJohn Keells Holdings (JKH), Sri Lanka‟s second largest listed company, with ~7% of total marketcapitalisation (excluding warrants), is a leading conglomerate with a significant presence in Leisure,Transportation, Property Development, Financial Services, Consumer Foods and Retail (CF&R) andInformation Technology. Currently, the Leisure sector is the group‟s main contributor to PAT (~28%of total PAT in FY16), with a dominant presence in the Colombo city hotel space, and owning resortsin both Sri Lanka and the Maldives. The group is in the process of developing an Integrated Resort, “Waterfront Project”  at an investment of ~US$820mn, slated for completion in 2019. Given its lackof a controlling shareholder, and ~98% free float, JKH is the local market‟s  most liquid share,contributing ~15% of total market turnover in 2015

    Recent Financial Performance

    JKH posted a 4Q16 recurring net profit of Rs.4,259mn (+8% YoY on a recurring basis), above our

    expectations, primarily due to higher than anticipated performance in Leisure, Consumer Food &Retail (CF&R) and  „Others‟   sectors. Consequently, FY16 recurring NP amounted to Rs.13,807mn(+6% YoY). 4Q16 recurring earnings excluding fair value gains of Rs.263mn. Meanwhile, 4Q15reported earnings included a Rs.1,221mn capital gain on sale of 78% stake in UAL General and fairvalue gains of Rs.49mn. 4Q16 recurring EPS of Rs.3.6 (+3% YoY) resulting in a FY16 recurring EPSof Rs.11.6 (+1% YoY)

    Sectoral Analysis

    John Keells Holdings

    Most liquid company inCSE accounting for

    ~15% of marketturnover

    Sectoral Analysis

    (Rs mn)4Q15 4Q16 % YoY FY15  FY16  % YoY

    Composition (%)

    4Q15 4Q16

    Net Revenue 24,879 24,897 0.1 91,852 93,282 1.6 100 100

    Transportation 3,501 1,924 -45.1 13,340 10,342 -22.5 14.1 7.7

    Leisure 7,437 7,477 0.5 23,307 24,073 3.3 29.9 30.0

    Property 1,936 632 -67.3 5,689 4,342 -23.7 7.8 2.5

    Consumer Foods & Retail 7,966 10,096 26.7 29,757 36,458 22.5 32.0 40.5

    Financial Services 1,451 1,874 29.2 9,077 7,143 -21.3 5.8 7.5

    Information Technology 1,836 2,200 19.8 7,212 8,262 14.5 7.4 8.8

    Others 752 695 -7.6 3,468 2,663 -23.2 3.0 2.8

    Profit After Tax 4,514 4,944 9.5 14,434 15,529 7.6 100.0 100.0

    Transportation 709 704 -0.7 2,335 2,454 5.1 15.7 14.2

    Leisure 2,012 2,036 1.2 4,855 4,367 -10.1 44.6 41.2Property 544 442 -18.8 1,422 1,437 1.0 12.1 8.9

    Consumer Foods & Retail 656 1,053 60.5 1,795 3,212 78.9 14.5 21.3

    Financial Services 315 278 -11.6 1,798 1,718 -4.4 7.0 5.6

    Information Technology 90 -39 >-100.0 239 96 -59.9 2.0 -0.8

    Others 188 470 >+100.0 1,990 2,245 12.8 4.2 9.5

    *Note: Valuations and ratios on a recurring basis

    4Q16 EPS +3% YoY – above our expectations

    Key Figures & Ratios 4Q15 4Q16 % YoY FY15 FY16 % YoY

    Net Revenue (Rs mn) 24,879 24,897 0.1 91,852 93,282 1.6

    Gross Profit (Rs mn) 7,715 8,479 9.9 26,146 28,225 7.9

    Net Finance Income (Rs mn) 1,334 1,627 22.0 7,454 7,017 -5.9

    Profit Before Tax (Rs mn) 6,973 6,482 -7.0 18,557 19,198 3.5

    Reported Net Profit (Rs mn) 5,222 4,522 -13.4 14,348 14,070 -1.9

    Recurring Net Profit (Rs mn)* 3,952 4,259 7.8 13,037 13,807 5.9

    Earnings per Share (Rs) 3.5 3.6 2.6 11.5 11.6 0.8

    Net Cash Position (Rs mn) 48,117 57,013 18.5 48,117 57,013 18.5

    Net Cash Per Share (Rs) 42.5 47.9 12.8 42.5 47.9 12.8

    Capex (Rs mn) 766 1,360 77.5 2,999 4,582 52.8

    Note: Valuations and ratios on a recurring basis; Adjusted for capital issues (if any)

    Per share growth numbers vary from total values due to added shares from conversion of Warrants and ESOPs

    *4Q16 NP adjusted for fair value gains of Rs.263mn, 4Q15 NP adjusted for fair value gains of Rs.49mn and included Rs.1,221mn capital gain

    on sale of 78% stake in UAL General

    2Q15 NP adjusted for non-recurring gain of Rs.41mn on the sale of hotel reservation software

    Source: Company Interims

    Source: Company Interims

    Sharp increase in CF&Rand Others profitability

  • 8/16/2019 JKH CTSA 2016 Q1

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    EQUITY REPORT TITLE | DateCT CLSA SECURITIES (PVT) LIMITED | A Member of the Colombo Stock Exchange 3

    Transportation Sector

    4Q16 PAT of Rs.704mn (-1% YoY; 14% of group PAT); in line with our expectations.Mediocre performance likely due to weak earnings from 100% owned oil bunkering arm,Lanka Marine Services (LMS) whilst 42% owned associate, South Asia Gateway Terminal(SAGT) earnings expected to have declined marginally; FY16 PAT +5% YoY to Rs.2,454mn 

    According to JKH, LMS earnings have declined due to costs relating to an engine failure of one ofthe oil barges during the quarter. Meanwhile, LMS margins believed to have increased due tolower global oil prices (NYMEX -31% YoY and -20% QoQ), though to a limited degree as part ofthe benefit expected to have passed through to an extent, amid considerable bargaining powerof customers and high competition within the industry

    o Competition in the bunkering space remains high, from players including state-owned SriLanka Ports Authority (SLPA) starting bunkering operations at its newly built US$95mn shipfueling unit in the Hambantota Port in Jun 2014. However, it is assumed that a more even

    playing field has been generated for all the players, where earlier, some players hadagreements with state-owned Ceylon Petroleum Corporation (CPC) which allowed sourcingbunker oil at lower prices

    SAGT earnings impacted lower margin transshipment volume gaining significance (domestic :transshipment mix was at 20 : 80 in 4Q16 vs. 25 : 75 in 4Q15), offsetting the estimatedvolumes increase of +8% YoY (vs. 10-12% YoY volume growth in port of Colombo).Consequently, SAGT‟s market share is estimated to have fallen marginally to 27% in 4Q16 from28% in 4Q15 (however increased from 25% in 3Q16)

    o The new player within the Colombo port, Colombo International Container Terminal (CICT),continues to increase its presence, which is also believed to be at the expense of otherplayers. CICT‟s  ability to cater to larger container vessels has enabled it to attract shipswhich were previously not calling at the Colombo Port. CICT would continue to pose athreat to SAGT’s business in the near term. Government of Sri Lanka‟s  (GoSL) plans toadd more capacity in the medium term in port of Colombo is also expected to add morepressure. However, the network creation in Colombo port would attract more ships whichwould benefit all the players in the long term

    Meanwhile, according to JKH, DHL Keells has performed well increasing its contribution to sectorbottom-line during 4Q16 and FY16

    Sectoral PAT forecasts revised up by +7% to Rs.2,412mn for FY17E (-2% YoY, 16% oftotal PAT), due to anticipated increased performance in DHL Keells and pickup in volumes atSAGT. Meanwhile, we forecast FY18E sector PAT at Rs.2,557mn for (+6% YoY, 16% oftotal PAT), with growth anticipated from steady performance in SAGT coupled with expectedrecovery in LMS amid the pickup in oil prices from current lows

    o Shipping agency Maersk is expected to continue to provide relatively stable returns, thoughcontribution to sector bottom-line is believed to be immaterial

    o JKH may possibly bid for the management of container handling services of the new Eastterminal of the Colombo port, with a capacity of 2.4mn TEUs. The bidding is expected tocommence in 2H2016. However, the operations in the East terminal are not anticipated to

    commence until the newly opened CICT reaches a relatively sufficient level of capacityutilization (recent newspaper articles suggested CICT handled 1.6mn TEUs in 2015; 65%utilization). Therefore, given the uncertainty in the timelines and lack of information currentlydisclosed, we have not factored such into our forecasts

    John Keells Holdings

    Source: CBSL, JKHOthers include Jaya Container Terminal (JCT) and CICT volumes

    Oil bunkering impactedby drop in revenue

    SAGT market share at~27% in 4Q16

    May possibly bid for East

    container terminal

    Transportation Sector : PAT (Rs bn)Colombo Port Volumes (TEUs mn) & SAGT Mkt

    Share (%)

    0.4

    0.5

    0.6

    0.7

    0.8

    4Q14 2Q15 4Q15 2Q16 4Q16

    25

    30

    35

    40

    45

    50

    0.5

    1.5

    2.5

    3.5

    4.5

    5.5

    FY11 FY12 FY13 FY14 FY15 FY16

    Others

    SAGT

    SAGT Market Share - RHS

  • 8/16/2019 JKH CTSA 2016 Q1

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    EQUITY REPORT TITLE | DateA CT HOLDINGS GROUP AND CLSA GROUP COMPANY 4

    Leisure Sector

    4Q16 PAT +1% YoY to Rs.2,036mn, (41% of group PAT), above our expectations, amid arecovery in city hotels after three consecutive quarterly declines; FY16 PAT -10% YoY toRs.4,367mn

    City hotels : Comprise five star city hotels Cinnamon Grand (CG : 541 rooms) and CinnamonLakeside (CL : 300 rooms Trans Asia Hotels - TRAN) through 79% owned listed subsidiary, AsianHotels & Properties (AHPL), which recorded a NP of Rs.705mn in 4Q16 (+40% YoY)

    o As per JKH, city hotel earnings, which have been under pressure recently, rebounded withincreased occupancy levels, somewhat benefited from increased tourist arrivals. Touristarrivals to Sri Lanka increased +22% YoY to 584,818 persons in 4Q16 - business relatedtravel believed to have increased during the quarter reversing the mediocre trend witnessedfor the most part in 2015 due to higher level of macro policy uncertainty. Further, thequarterly earnings also benefited by the depreciation of LKR

    • As indicated by JKH, segmental occupancy estimated to have increased to 70-80% (vs. 65-70% in 4Q15), whilst ARRs are estimated to have remainedrelatively flat in the range of US$130-135

    • Meanwhile, average LKR depreciated -1% QoQ (-7% YoY) in 4Q16 after depreciating -5%QoQ in 3Q16

    • 240 room three star hotel in Colombo, Cinnamon Red, a ~20% owned joint venture withSanken Construction continued to perform well during the quarter (Share of results ofequity accounted investees for the Leisure sector increased +56% YoY Rs.12mn)

    • Resort hotels : Exposure through 80% owned listed subsidiary, John Keells Hotels (KHL), whichowns hotel properties in Sri Lanka (996 rooms) and Maldives (340 rooms). KHL is yet to release4Q16 results

    o Sri Lanka resorts : As indicated by JKH, occupancy remained within the range of 85-90%, whilst ARRs increased in the range of US$105-115. According to JKH, the

    segment results were impacted by exchange revaluations relating to debt coupled withemployee costs incurred in line with a specific employee benefit requirement of the GoSL

    o Maldives resorts : the segment was impacted by slowdown in tourist arrivals of +4% YoYto 344,160 persons in 4Q16. As indicated by JKH, occupancy declined YoY to 80-85%in 4Q16 (vs. ~90% in 4Q15), whilst ARRs also dropped to ~US$380-385 (vs.~US$400-410 in 4Q15)

    The Sri Lankan Hotel Management and Destination Management businesses are believed to havecontributed steadily in 4Q16, driven by a significant growth in overall tourist arrivals

    Sectoral PAT forecast revised up by +7% for FY17E to Rs.4,644mn (+6% YoY, 31% oftotal PAT), given improved performance in city hotels, offsetting the weak performance in theresorts segment. FY18E PAT forecast at Rs.5,322mn (+15% YoY, 34% of total PAT),primarily driven by rebound in resorts sector given growth in tourist arrivals coupled withcontinued increased performance of Hotel Management and Destination Management businesses.Contribution from these sectors would offset the pressure on City hotels which would seeincreased competition from expected new properties set to enter Colombo in the medium term

    o The city hotel space would however witness a recovery over the long term with continuedrise in tourist arrivals and Colombo growing in recognition amongst Meetings, Incentives,Conferences, and Exhibitions (MICE) travelers

    o The tourism industry would face some additional near term pressure following the corporateincome tax revision to 17.5% (previously at lower concessionary rate of 12% - however newrate not yet implemented) and Value Added Taxes (VAT) revision to 15% (from 11% - w.e.f02 May 2016) as per amendments to National Budget 2016

    o Some relief however is expected to be provided to the city hotel segment as per theproposed 50% tax deduction which would be granted for companies engaging inMICE tourism for five years 

    o The mandatory registration requirement of all hotels under Sri Lanka TourismDevelopment Authority (SLTDA) by 01 Jun 2016 is expected to be a beneficiary for resort

    hotels as unregistered hotels are believed to be charging a lower rate with lower serviceofferings. Subsequent to registration, we expect the establishments to incur higher servicerelated costs due to firmer regulation, leading to higher prices charged, reducing the pricedisparity compared to registered establishments

    Leisure Sector PAT (Rs mn)

    Sri Lanka :

    Tourist Arrivals (persons 000’s) 

    John Keells Holdings

    Maldives :

    Tourist Arrivals (persons 000’s) 

    Source: Maldives Tourist Authority

    Source: Sri Lanka Tourism Development Authority

    (SLTDA)

     Increase in taxesapplicable to tourism

    industry

    250

    750

    1,250

    1,750

    2,250

    1Q 2Q 3Q 4Q  

    FY14 FY15

    FY16

    50

    90

    130

    170

    210

    Jan Mar May Jul Sep Nov

     

    2013 20142015 2016

    75

    100

    125

    Jan Mar May Jul Sep Nov

     

    2013 20142015 2016

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    EQUITY REPORT TITLE | DateCT CLSA SECURITIES (PVT) LIMITED | A Member of the Colombo Stock Exchange 5

    Consumer Food and Retail (CF&R) Sector

    4Q16 PAT Rs.1,053mn excluding fair value gains of Rs.17mn (+61% YoY; 21% ofgroup PAT), above our expectations, driven by robust growth in 81% owned, CeylonCold Stores (CCS); FY16 PAT excluding fair value gains +79% YoY to 3,212mn

    CCS reported a 4Q16 NP of Rs.967mn (+61% YoY), led by strong performance in both itsmanufacturing and retail segments

    o Manufacturing segment : NP of Rs.972mn (vs. Rs.433mn in 4Q15); attributable tohigher volumes in both the key ice cream and soft drinks businesses. According to JKH, bothice cream and soft drinks volumes grew significantly – whilst improved consumer sentimentis expected to have continued with increase in disposable income subsequent to sweepingconsumer relief measures offered by the GoSL in early-2015, the warm weather witnessedduring the quarter likely to have boosted volumes. Profit margins also expanded due to thesoft global prices of key commodities, negating higher import related costs due to the

    depreciation of LKR during 3Q16

    o Retail segment : NP of Rs.304mn (vs. Rs.148mn in 4Q15); attributable to increase insame store sales with expected increase in footfall coupled with added contribution fromnewly opened stores. As per JKH, six supermarkets were opened in FY16 - subsequentlyopened another supermarket in Apr 2016 bringing the total number of supermarkets to 51.Further, retail segment likely benefited from the removal of deemed VAT from 01 Jan 2016.As per the prior implementation of deemed-VAT, retailers had to pay VAT on 75% of revenueirrespective of the composition of VAT liable products being sold

    • Addition of Segment NP is higher than CCS NP due to eliminations (-Rs.296mn) andShare of results of equity accounted investments of (-Rs.13mn)

    Total capex for CCS increased to Rs.974mn in 4Q16 (vs. Rs.208mn in 4Q15) with the mixbetween manufacturing : retail standing at 38 : 62

    90% owned Keells Food Products (KFP) reported a 4Q16 NP of Rs.71mn (-11% YoY)  -

    the growth have slowed down due to higher promotional expenses undertaken during 4Q16 FY17E sectoral PAT forecasts broadly maintained at Rs.3,959mn (+23% YoY, 26% of

    total PAT). FY18E sectoral PAT forecast at Rs.4,452mn (+13% YoY, 28% of total PAT)

    o Sector is anticipated to benefit from the decrease in corporate tax rates in manufacturingsegment to 17.5% (from 28% previously), as proposed by the Prime Minister asamendments to National Budget 2016 – yet to be implemented

    o The removal of deemed VAT  w.e.f. 01 Jan 2016 will further benefit the retailsegment – PBT impact from  “deemed”  VAT for FY16 was Rs.286mn (vs. Rs.339mn in FY15),more than offsetting the increase of VAT rate to 15%

    o Whilst the local consumer sentiment may face a slowdown in 2H16E, with rise in interestrates and fiscal tightening policies, impact on CCS is expected to be limited with productsbeing offered considered to be relatively underpenetrated. The sector continues to be a keybeneficiary of soft global commodity prices, though the benefit would partly be offsetted byLKR depreciation. The increase in local farm gate milk prices (from Rs.60-70 w.e.f 2Q16) isonly expected to marginally impact CCS‟   profitability due to its ability to switch betweeninput sources

    o The retail segment is expected to continue its positive performance amid the growth infootfall and improved efficiencies coupled with further expansion of its supermarket network

    o Whilst benefiting from overall increase in consumer demand, KFP is expected to slow down inthe near term with lower demand projected from HORECA customers; HORECA customerscurrently assumed to be contributing to ~25% of KFP revenue

    We expect JKH to increase its presence in CF&R by seeking opportunities in sectors such asdairy, to complement its ice cream business, with entries into milk and yogurt via the ElephantHouse brand being possible options. However, the contribution from recent ventures into sugarfree and isotonic drinks are believed to be marginal at the moment

    John Keells Holdings

     Improved consumer sentiment and adverse

    weather supportinghigher volumes

    Key beneficiary from soft commodity prices

    Major beneficiary fromthe tax changes

    *Excluding fair value adjustments*Excluding fair value adjustments

    CCS: Manufacturing - Recurring

    Net Profit (Rs mn)*CCS: Retail - Recurring Net Profit (Rs mn)CF&R - Recurring PAT (Rs mn)*

    100

    300

    500

    700

    900

    1,100

    1Q 2Q 3Q 4Q  

    FY14 FY15 FY16

    0

    250

    500

    750

    1,000

    1Q 2Q 3Q 4Q  

    FY14 FY15 FY16

    -500

    50100150200250300350

    1Q 2Q 3Q 4Q  

    FY14 FY15 FY16

  • 8/16/2019 JKH CTSA 2016 Q1

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    EQUITY REPORT TITLE | DateA CT HOLDINGS GROUP AND CLSA GROUP COMPANY 6

    Property Sector

    4Q16 PAT of Rs.442mn, excluding fair value gains (-19% YoY; 9% of group PAT),slightly above our expectations. Decrease in profits is due to lower revenuerecognition from “7th Sense” apartment project. FY16 PAT, excluding fair value gains+1% YoY to Rs.1,437mn

    Units in both the apartment complexes  “OnThree20”   and  “7th Sense”   were sold in 2Q16.According to JKH, 100% of revenue has been recognized from  “OnThree20”  by 3Q16 and 95% ofrevenue recognition was completed from  “7th Sense”  as at 31 Mar 2016

    Meanwhile, upmarket shopping mall in Colombo, Crescat Boulevard, is anticipated to havecontributed positively albeit modestly with increased rental income. Crescat currently operates at~100% occupancy. Property sector earnings also include rental income from the K-Zone malls,franchise outlets in key suburbs, Moratuwa and Ja-Ela, both of which are expected to beenjoying ~70-85% occupancy levels

    FY17E PAT forecast marginally revised up to Rs.221mn (-85% YoY, 1% of total PAT);  significant YoY decline is due to FY17E only comprising marginal revenue recognition from  “7thSense” . Meanwhile, FY18E PAT forecast at Rs.201mn (-9% YoY, 1% of total PAT),  justcomprising of rental income from investment properties

    JKH has a significant land bank, of nearly seven acres in Colombo and suburbs, available forfuture developments. The Groups current main focus on large scale development remains theWaterfront Project. Meanwhile, JKH mentioned that it is evaluating a few other options at themoment and would venture into further property developments if any opportunities arise

    National Budget 2016 removed restrictions on transfer of land for certain identified investmentsand upfront tax on leasing of lands (current standard rate at 15% and concessionary rate at7.5%) w.e.f 01 Jan 2016

    o   JKH‟s ongoing projects such as Waterfront Project were anyway not expected to be impactedas it falls under the Strategic Development Act, where exemptions are provided. Impact for

    future developments anticipated to be limited, with projects likely to receive exemptions on acase by case basis. Meanwhile, the new ruling provides more certainty on foreign holdingrestrictions and taxation regarding future property developments by JKH

    Further, relaxation on granting residential visa is considered as a positive step for the localproperty sector; however the near term benefits are expected to be marginal as the costsassociated with obtaining visas are considered to be relatively high

    John Keells Holdings

    Final phases of revenuerecognition

    Significant underutilizedland bank available for

    future developments

    JKH Property Sector: Development Properties

    Saleable

    Area

    (sq ft)

    Revenue

    (Rs bn) 

    Profit

    (Rs bn) 

    Profit

    Margin

    (%) 

    No. of

    Units 

    Start

    /Complete % Sold 

    Avg Selling

    Price (US$

    per sq ft) 

    Previous ProjectsEmperor 294,000 8.4 2.5 29.2 164 Jun-06 /Feb-12 100 245

    Monarch 274,000 4.6 1.3 28.3 195 Jan-05 /Jan-08 100 185

    Current Projects

    OnThree20 519,000 13.3 3.3 25.0 475 Apr-11 /Dec-14 100 175

    7th Sense* 130,000 5.5 0.8 15.1 66 Apr-13 /Sep-15 100 380

    Future Project

    Waterfront 358,000 16.4 3.1 19.0 231 Mar-14 /2019 360

    JKH : Unused and Underutilised Land

    Owning companyArea

    (acres)

    Ahungalla Holiday Resort

    Ahungalla6.5

    Facets (Pvt) LtdAhungalla

    6.3

    John Keells PLC

    Ja-Ela3.8

    Sentinel Reality (Pvt) Ltd

    Vakarai8.4

    Trinco Walk Inn Ltd

    Trincomalee14.6

    Whittall Boustead (Pvt)

    Ltd. Colombo 023.2

    Wirawila Walk Inn Ltd

    Wirawila25.2

    Source: JKH & CT CLSA Estimates*JKH holds a 51% stake in the 7th Sense project through British Overseas (Pvt) LtdSource: JKH

    Removal of taxes andrestrictions on transferof land

  • 8/16/2019 JKH CTSA 2016 Q1

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    EQUITY REPORT TITLE | DateCT CLSA SECURITIES (PVT) LIMITED | A Member of the Colombo Stock Exchange 7

    CINS –   Ceylinco Insurance, SLIC - Sri Lanka Insurance

    Corporation, AIA –   subsidiary of AIA Group Limited, JINS –  

     Janashakthi Insurance

    Financial Services Sector

    4Q16 PAT of Rs.278mn (-12% YoY on a recurring basis; 6% of group PAT); slightlybelow our expectations, largely due to decline in performance of 96% owned UnionAssurance (UAL); FY16 PAT -4% YoY on a recurring basis to Rs.1,718mn. 4Q15 includeda Rs.1,221mn capital gain on sale of 78% stake in UAL General

    UAL reported a net profit of Rs.61mn for 1Q2016/4Q16 (-56% YoY). The decline wasamid trading and fair value losses, stemming from weak equity market performance in 4Q16(All share index declined -12% in 4Q16) coupled with the increase in interest rates (treasury billyields increased 334bps during the quarter to reach 10.6% as at 31 Mar 2016). Meanwhile,Gross Written Premium (GWP) increased +23% YoY Rs.1,933mn

    o UAL continues to hold a 22% stake in the general insurance business and full control of thelife insurance business. The general insurance business is expected to be listed withinthe stipulated timeline (at the discretion of new owner Fairfax Asia), but the reduction

    of the stake for listing purposes by UAL or Fairfax is yet to be announced, as per the minimum10% free float requirements for new listings

    Meanwhile, 30% owned banking associate Nations Trust Bank (NTB) contributed with increasedearnings, largely due to lower impairment charges; NTB reported a net profit of Rs.592mnfor 1Q2016/4Q16 (+20% YoY)

    o The YoY lower provisions were off a high base - 1Q2015 recorded high impairment provisionswith a one off Rs.365mn charge being provided against overdue loans, to some customerswhich has been apparently made against security that has been fraudulently provided

    o The National Budget 2016 proposal to restrict Banks from granting leases w.e.f 01 Jun 2016would pressure on NTB as ~25% of its loan book consists of leasing. However, the GoSL is yetto come up with final regulations restricting leases and commercial banks are believed to becontinually engaging with the government regarding the rule. Further, regulations on thepossibility of forming a subsidiary to grant leases is yet unclear. However there would likely besome upper limit for LCBs in granting leases as indicated by the Finance Minister

    o JKH continues to retain its 30% stake in NTB, after requesting the CBSL to extend the April2012 deadline to comply with the mandatory reduction in NTB to 15%. JKH may also beinterested in exploring possible opportunities for acquisitions or mergers within the financialservices sector in order to increase scale and contribution

    Sectoral PAT forecast maintained at Rs.1,789mn for FY17E (+4% YoY on a recurringbasis, 12% of total PAT). FY18E PAT forecast at Rs.1,801mn (+1% YoY, 11% of totalPAT), as weaker contribution expected from NTB which is anticipated to be impacted from theslowdown in vehicle leasing (on account of the tightening measures implemented on vehicleimports) and rising rates expected to lower the interest margins

    o UAL earnings in the near term would be susceptible to movements in interest rates affectingits fixed income portfolio. However, this is likely to be offset by continued growth in coreoperations and rebound and anticipated lower volatility in its equity portfolio (ASI increased+8% through 1Q17)

    o   UAL‟s  life segment is expected to be a beneficiary of potential increase in local insurancepenetration in the longer term. Sri Lanka’s total industry GWP as % of GDP was 1.0% in2014, which is relatively lower compared to regional peers. Meanwhile, short termbenefits are expected to be minimal with lack of awareness of insurance, especially in ruralareas as per the Insurance Board of Sri Lanka (IBSL). Further opportunities are expected toarise in life insurance space in the medium to long term with possible consolidation in theinsurance industry

    o Meanwhile, contribution from the stock brokering arm, John Keells Stock Brokers (JKSB)would continue to be relatively immaterial to sector bottom line

    John Keells Holdings

    UAL earnings impactedby trading and fair value

    losses

    Near term slowdown inthe vehicle leasing 

     Insurance industry isunderpenetrated in Sri

    Lanka 

    General insurancebusiness will be listed  

    Source: IBSL

    Sector PAT in 3Q is high due to premiums recognised in life fund

    within the year

    25%

    28%19%

    11%

    16%

    16%

    27%

    18%

    13%

    25%

    AIA

    Ceylinco

    SLIC

    UAL

    Other

    2008

    2014

    Life Insurance Industry Market Share (%) Financial Services Sector PAT (Rs mn)

    0

    200

    400

    600

    800

    1,000

    1Q 2Q 3Q 4Q  

    FY14 FY15 FY16

     Issue over grantingleases by LCBs under

    discussion 

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    EQUITY REPORT TITLE | DateA CT HOLDINGS GROUP AND CLSA GROUP COMPANY 8

    Information Technology Sector

    4Q16 loss after tax of -Rs.39mn (vs. a PAT Rs.90mn in 4Q15), below our expectations,stemming from BPO operations due to a one off bad debt provision. FY16 PAT ofRs.96mn (-60% YoY on a recurring basis). 2Q15 included a Rs.41mn non recurringgain on sale of hotel reservation software 

    The sector consists of Office Automation, Samsung mobile phone distribution business, Toshibacopier business, Software Services business and Business Process Outsourcing (BPO) operations.JKH also launched ZTE mobile phones in Sri Lanka in Nov 2014

    Sectoral PAT forecasts revised down by -45% to Rs.157mn for FY17E (+64% YoY off alow base) and forecast at Rs.172mn for FY18E (+10% YoY). A recovery is expected inFY18E amid expansion of the product portfolio, led by increased smart phone sales anddistribution, under the Office Automation segment

    The sector remains immaterial to overall JKH group earnings and we would not rule out apossible divestiture of sector operations in the longer term

    Others Sector

    4Q16 PAT of Rs.470mn, excluding fair value gains of Rs.98mn (vs. Rs.188mn in 4Q15;10% of group PAT), above our expectations, driven by higher interest income amid the rise ininterest rates coupled with the added cash from conversion of warrants in Nov 2015 and exercise ofshare options in 4Q16. FY16 PAT +13% YoY on a recurring basis to Rs.2,245mn excludingfair value gains 

    o Overall net finance income increased to Rs.1,261mn (+84% YoY and +11% QoQ)

    Meanwhile, plantations services segment was negatively impacted as tea prices continued toremain at low levels. Continued challenging conditions for the local tea segment is expected tocontinually hamper contribution from the plantations services segment

    Sectoral PAT forecast revised up by +18% to Rs.1,924mn for FY17E (-14% YoY onrecurring basis), amid higher than anticipated increase in interest rates. FY18E PAT forecastat Rs.1,367mn (-29% YoY) 

    o Interest income is expected to witness a decline over the coming years as cash will be utilizedfor the IR project construction. Meanwhile, the inflow of cash from pre-sales of apartments atthe Waterfront project would partially compensate the cash position

    John Keells Holdings

    Sector yet to makemeaningful contribution

    to JKH group profit  

    Would not rule out a

     possible divestiture of sector operations

    Recent Significant Capital Gains Realised by JKH

    Divestment Period Capital Gain (Rs mn)

    UAL General 4Q15 1,221

    Access Engineering (AEL) 3Q15 610

    ExpoLanka Holdings (EXPO) 1Q15 389

    Central Hospitals 4Q14 665

    AHPL and KHL 2Q11 1,800

    KHL - Rights 4Q10 751

    Source: CT CLSA, Company interims, CSE announcements

    Significant boost in netfinance income due to

    rise in interest rates andadded cash 

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    EQUITY REPORT TITLE | DateCT CLSA SECURITIES (PVT) LIMITED | A Member of the Colombo Stock Exchange 9

    Integrated Resort (IR) – Waterfront Project

      JKH‟s luxury IR  “Waterfront Development Project”, at an investment of ~US$820mn comprising800 room five star+ hotel, convention center, entertainment facilities, shopping complex,apartments, luxury condominiums and office space, is progressing with construction. The projectis located at the former JKH head office premises of approximately 11 acres (land valued atUS$65mn). Construction commenced in Mar 2014 and currently JKH is expected to haveincurred ~30% of the total project cost with piling work already being completed andexcavation and foundation processes being initiated 

    In Jan 2016, JKH stated that that there were some unforeseen delays in the projectdue to adverse weather conditions. Consequently, the project is anticipated to becompleted in 2019 (vs. 2018 previously). The project contract is believed to have agreedupon for a pre-determined fixed price and there are no significant changes expected to the totalcost of the project. The delay is expected to only marginally lower the overall value of the

    project with cash being tied up for an additional year

    The change in the local political landscape in Jan 2015 prevented large-scale gaming facilities tobe operated within integrated resorts such as Waterfront. Nevertheless, Waterfront appears tobe continuing with the same scale, though returns from same are expected to besignificantly lower 

    The space earlier dedicated for casinos, of 150,000 sq ft is set to be used for an alternatepurpose, such as to expand conference or retail space or bring in other indoor entertainmentfacilities. JKH would likely tap into the growing MICE market, primarily from India.Supply for MICE market is currently limited in Sri Lanka and Waterfront will be a potentialbeneficiary of the increase of the same. Further, the GoSL‟s interest in increasing MICE marketand daily revenue from a tourist, as also highlighted in National Budget 2016 would help theestablishment in the long run

    The pre-sales of apartments in the two residential towers, comprising 431 units, is under waywith management noting that level of interest has been encouraging so far. Competition has

    however ramped up with more high end residential complexes set to enter Colombo inthe next few years.  JKH has a proven track record in the Colombo residential propertydevelopment space and increased promotion of Sri Lanka by other international propertydevelopers are expected to bode relatively well for Waterfront

    The pre-sales for the 30-storey standalone office complex is also anticipated to be receivingpositive interest. Demand for office space is likely to be positive, amid the anticipatedgrowth in investments and business environment in the next few years. Despite the newadditions of office space, demand would likely outweigh supply, presenting potential furtherdevelopment opportunities for JKH and other industry dominant players

    o Apartment and office space sales from the Waterfront Project are not expected to be visiblein the Property sector within the next two to three years, with management noting thatrevenue recognition would be done only after completion of the project

    The overall success of the Waterfront project will be dependent on new initiatives taken by JKHto attract tourists. The project success will also depend on the level of support from and

    engagement with the GoSL

    Select Upcoming Residential Projects in Colombo Area

    Project Name  Location  Developer Completion

    Year Total Units 

    Quoted rate

    (USD/sqft) 

    Waterfront Colombo 02 JKH 2019 431 ~360

    Destiny Residency Colombo 02 Imperial Builder 2017 205 > 231

    The Elements Rajagiriya Fairway Holdings 2016 132 > 154

    Altair Beira Lake South City Projects 2017 224 > 326

    Astoria Duplication Road AVIC 2018 350 > 260

    Colombo City Centre Beira Lake Silver Needle - Abans 2018 182 > 315

    ITC Colombo One Galle Face ITC 2018 130 TBA

    One Galle Face Galle Face Shangri La 2019 198 >400

    Source: Jones Lang LaSalle Lanka, CT CLSA

    John Keells Holdings

    Waterfront Project at aninvestment of

    US$820mn 

    Waterfront appears tobe continuing with the

     same scale 

    Tap into MICE market, primarily from India 

     Increased competitionexpected in high end

    residential complexes 

    Revenue recognition tobe carried out only after

    completion of project  

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    EQUITY REPORT TITLE | DateA CT HOLDINGS GROUP AND CLSA GROUP COMPANY 10

    Group Financial Performance

    JKH posted a net cash position of Rs.57.0bn at group level as at 31 Mar 2016 (vs.Rs.54.9bn as at 31 Dec 2015 and Rs.48.1bn as at 31 Mar 2015)

    o Group gross finance income increased +59% YoY Rs.1,559mn in 4Q16

    o JKH declared a FY16 Final Dividend of Rs.1.50 per share; XD: - 02.Jun.2016, PD: -13.Jun.2016. FY16 total DPS of Rs.7.00 (including special dividend of Rs.3.50 declared in 18Nov 2015)

    o Whilst major future capex will be for the Waterfront Project, JKH is able to leverage itsstrong balance sheet for expansion in other key sectors as well

    Total group capex increased +78% YoY in 4Q16 to Rs.1,360mn, with CF&R and Leisure sectorsbeing the key beneficiaries accounting for 47% and 41% of spending respectively. FY16 capex at

    Rs.4,582mn (+53% YoY) - with spending for Leisure and CF&R accounting for 60% and 32%o Further capex maybe incurred for CG in the near future for renovations in preparation to face

    future competition

    Outlook & Valuations

      JKH’s  FY17E group recurring NP forecast revised up by +5% to Rs.13,344mn (-3%YoY) largely due to upward revisions to Leisure and Others sectors. FY18E group NPforecast at Rs.14,631mn (+10% YoY), largely driven by Leisure and CF&R sectors

    The Leisure sector would be the main contributor to group earnings (~31-34% of group PAT)followed by CF&R sector (~26-28% of group PAT) and Transportation sector (~16% of groupPAT). Lower contribution forecast from the Property sector, given that revenue from Waterfrontapartment pre-sales being recognised after project completion

    Amid recent overall market weakness, the JKH share price has fallen -13% in 2016YTD and-11% YoY (vs. -5% and -9% decline in ASI respectively)

    JKH share trades at forward PER multiples of 13.9X for FY16E and 12.7X for FY17E, onmodest EPS growth expectations. Trailing PER at 13.0x

    John Keells Holdings

    * Excluding capital gains

    Net cash positionincreased to Rs.57.0bn 

    Major capex targeted atCF&R and Leisure

     sectors 

    JKH: Recurring Quarterly EPS (Rs) JKH: Sectoral Contribution to PAT (%) JKH: Capex (Rs bn)

    Gross Fin. Income & Contribution to Group PAT Net Cash (Rs bn) and Net Cash : Equity (%) JKH Sectoral PAT (Rs mn)

    1.5

    2.5

    3.5

    4.5

    1Q 2Q 3Q 4Q  

    FY14 FY15 FY16

    16%

    45%0.4%

    14%7%

    6%14%

    41%9%

    21%

    6%9%

    Transportation

     Leisure

     Property

     Consumer Foods &

    Retail Financial Services

    Others*

    4Q15

    4Q16

    * Others include Information Technology and Others sectors

    1.0

    2.0

    3.0

    4.0

    5.0

    6.0

    FY11 FY12 FY13 FY14 FY15 FY16

    30

    40

    50

    60

    24

    28

    32

    36

    40

    4Q14 2Q15 4Q15 2Q16 4Q16

    Net Cash - RHS Net Cash : Equity

    -100

    450

    1,000

    1,550

    2,100

    Tran. Leis. Prop. CF&R Fin.

    Serv.

    IT Others

    4Q15 4Q16

    Share underperformedin recent periods 

    400

    900

    1,400

    1,900

    0

    16

    32

    48

    4Q14 2Q15 4Q15 2Q16 4Q16

    Finance Income (Rs mn) - RHS*

    % of PBT

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    EQUITY REPORT TITLE | DateCT CLSA SECURITIES (PVT) LIMITED | A Member of the Colombo Stock Exchange 11

    Outlook & Valuations The share currently trades at a 9% discount to our estimated Some of The Parts

    (SOTP) valuation of Rs.170 (excluding 2016 warrant conversion at Rs.171)

    On 24 May 2016, JKH announced that its Board of Directors recommended a 07 : 08Sub Division of Shares (Subject to Approval)

    o Consequently, the number of shares would increase from 1,189mn to 1,359mn - the subdivision would not increase the stated capital of the company

    o   JKH‟s Nov 2016 number of warrants and respective purchase price would also be adjusted -number of warrants to be increase to 57.5mn from 50.3mn, purchase price adjusted toRs.149.29 (from Rs.170.62)

    Further, JKH announced that its Board of Directors resolved to issue share options under anEmployee Share Option Plan (Subject to Approval)

    o The number of options to be issued amount to 26mn, exercisable over a period of threeyears (2.25% of current total stated capital) – not more than 9mn shares would be issuedper year (0.75% of current total stated capital). If the proposed subdivision is approved bythe shareholders, the options will be granted based on the number of shares post subdivision

    At current prices, JKH warrants seem significantly overvalued, with only less than six months toexpiration. The JKH share price needs to increase at least over 10% for the warrant conversionto be worthwhile, which remains a near term concern

    Potential catalyst to re-rate the share in the medium term would hinge upon new developmentson Waterfront Project, especially the casino aspect. Considering JKH‟s strong balance sheet andtrack record in M&A activity, there is a possibility of the group undertaking other big ticketprojects in the near to medium term

    Whilst near term weakness may prevail, stemming from the overall momentum of the market,medium to longer term investors may accumulate the share on current price weakness

    John Keells Holdings

    Estimated break up NAVof Rs.170 

    JKH: Sum-of-the-parts (SOTP) Valuation

    Sector Fair Value (Rs mn) Main Valuation Basis

    Transportation 23,393 10x FY17E NP

    Leisure 50,042 12x FY17E NP

    CF&R 47,248 MV adjusted for stake in IR Project

    Property 1,784 DCF with cost of capital of 15%

    Finance 15,080 MV of UAL and NTB

    IT 861 6x FY17E NP

    Others excluding interest income 413 5x FY17E NP

    Unutilised Land 1,078 From JKH FY15 Annual Report

    Net cash position 55,441 Company net cash as at 31 Mar 2016

    IR project 7,175 DCF with cost of capital of 18%

    Total Value 202,514

    No of Shares (mn) 1,189

    Value per share (Rs.) 170

    Source: CT CLSA

    Source: CT CLSA

    Time %

    28 Jul 2014 +4

    05 Nov 2014 +20

    30 Jan 2015 +12

    29 May 2015 +1

    30 Jul 2015 +14

    05 Nov 2015 +3

    29 Jan 2016 -7

    27 May 2016 -9

    JKH Share Price – Premium /

    (Discount) to SOTP

    Source: CSE, CT CLSA

    JKH: Trailing Twelve Month PER (X) : 2013 – 2016YTD

    11.0

    15.0

    19.0

    23.0

    27.0

    02-Jan-13 10-Sep-14 20-May-16

    Share trade belowwarrant conversion price 

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    EQUITY REPORT TITLE | DateA CT HOLDINGS GROUP AND CLSA GROUP COMPANY 12

    Sector VAT Corporate Income Tax Other Overall Impact

    Transportation N/A

    15% from previous low rates – 

    Effective Tax Rate was ~7% inFY16

    Development of maritime hub Negative

    Leisure 11% to 15% 12% to 17.5% Tax concessions to MICE tourismNeutral to

    Negative

    Register all establishments under SLTDA

    Remove TDL of 1%

    CF&R11% to 15%

    (Deemed VAT removed)

    Retail : 28%

    Manufacturing: 28% to 17.5%Positive

    Financial Services 11% to 15% 28%Cessation of leasing by banks *

    Encourage SME lendingNegative

    JKH Group - - - Negative

    FY16 Var

    % YoY  FY17E 

    Var %

    YoY  FY18E 

    Var %

    YoY  

    Transportation 2,454 5.1 2,412 -1.7 2,557 6.0

    Leisure 4,367 -10.1 4,644 6.3 5,322 14.6

    Property 1,437 1.0 221 -84.6 201 -9.2

    Consumer Foods & Retail 3,212 78.9 3,959 23.2 4,452 12.5

    Financial Services 1,718 -4.4 1,789 4.1 1,801 0.7

    Information Technology 95.726 -59.9 157 63.7 172 9.8

    Others 2,245 12.8 1,924 -14.3 1,367 -28.9

    Group PAT 15,529 7.6 15,105 -2.7 15,871 5.1

    Minority Interest -1,722 23.2 -1,761 2.3 -1,240 -29.6

    Group Net Profit 13,807 5.9 13,344 -3.4 14,631 9.6

    John Keells Holdings

    Outlook & Valuations

    JKH: Sectoral PAT (Rs mn)

    FY16 Net Profit adjusted fair value gains of Rs.263mn

    JKH SPEN DIST HHL

    MPS (Rs) 156.0 80.1 217.5 91.3

    Earnings per Share (Rs) 11.2 7.4 26.3 6.2

    EPS Growth (%) -3.4 25.5 14.9 33.3

    Price / Earnings Ratio (X) 13.9 10.8 8.3 14.8

    Price / Earnings Growth (X) -4.1 0.4 0.6 0.5

    Return on Equity (%) 9.5 7.9 11.5 15.9

    Key Sector Contr. to Group PAT (%) 28.0 69.6 86.8 54.4

    3M Avg Daily Turnover (US$) 850,312 59,587 171,140 66,305

    Peer Conglomerate Analysis – FY17E Relative Valuations

    DIST: Distilleries Company Of Sri Lanka, SPEN: Aitken Spence, HHL: Hemas Holdings,

    ~Key Sector Contribution to Group PBT

    Source: CT CLSA

    JKH: Key sector impact from Fiscal Policy changes

    Source: Ministry of Finance, CT CLSA* Currently under discussion

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    EQUITY REPORT TITLE | DateCT CLSA SECURITIES (PVT) LIMITED | A Member of the Colombo Stock Exchange 13

    Major Shareholder Movements 

    Major Shareholder Movements as at 31 March 2016

    Name No. of Shares %Change

    (Shares)*Comment

    1. Broga Hill Investments Ltd 124,122,878 10.4 -Part of Malaysia’s

    Khazanah National Bhd

    2. Mr. S E Captain 119,937,442 10.1 -

    3. Paints & General Industries Ltd 92,726,824 7.8 649,630Related party of Mr. S E

    Captain

    4. Melstacorp (Pvt) Ltd 43,616,626 3.7 -Subsidiary of Distilleries

    Co. of Sri Lanka (DIST)

    5. Schroder International Selection Fund 38,491,960 3.2 -114,270

    6. Deutsche Bank AG – London 35,868,199 3.0 -

    7.Aberdeen Global-Asian Smaller Companies

    Fund28,979,913 2.4 -1,700,000

    8. Aberdeen Global Asia Pacific Equity Fund 26,234,282 2.2 -

    9. HWIC Asia Fund ^ 25,519,159 2.1 +2,533,381

    10.Aberdeen Institutional Commingled Funds,

    LLC23,772,318 2.0 +3,634,000

    11.Aberdeen Global-Emerging Markets Smaller

    Companies fund19,932,286 1.7 +1,000,000

    12. Mr.K Balendra 18,111,218 1.5 -

    13. Employees Trust Fund 16,438,392 1.4 +1,549,329 GoSL related party

    14. London - Edinburgh Dragon Trust PLC 15,062,970 1.3 -

    15. Aberdeen Asia Pacific Equity Fund 12,497,857 1.1 -

    16.Aberdeen Global Frontier Markets EquityFund

    11,316,145 1.0 -

    17. Mrs. C S De Fonseka 11,282,940 0.9 -

    18. Mrs. S A J De Fonseka 11,069,333 0.9 -

    19. Mr. R S Captain 10,675,183 0.9 -3,671,883Related party of Mr. S E

    Captain

    20.Somerset Small Mid Cap Em All Country

    Fund LLC10,558,280 0.9 - New Entrant to Top 20

    696,214,205 58.5

    John Keells Holdings

    *Change since 31 Dec 2015;

    Exited top 20: Caravel Fund (International) Ltd 11.6mn shares

    ^ Also a shareholder of associate companies NTB and Union Assurance General

  • 8/16/2019 JKH CTSA 2016 Q1

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    Trading & Sales 

    Lasantha Iddamalgoda

    [email protected]+94 11 255 2295

    +94 77 778 2103

    Dyan Morris

    [email protected]

    +94 11 255 2320

    +94 77 722 4951

    Manura Hemachandra

    [email protected]

    +94 77 261 4797

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    +94 77 262 7233

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    +94 77 356 2699 

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    [email protected]

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    Shirali Rodrigo

    [email protected]

    +94 11 255 2290

    CT CLSA SECURITIES (PVT) LTDA Member of the Colombo Stock Exchange

    4-14 Majestic City, 10 Station Road, Colombo 4, Sri LankaGeneral: +94 11 255 2290 to 2294 Facsimile: +94 11 255 2289

    Email: info@ctclsa lk Web: www ctclsa lk

    Disclaimer : This document has been prepared and issued by CT CLSA Securities (Pvt) Ltd. on the basis of publicly available information, internally

    developed data and other sources, believed to be reliable. Whilst all reasonable care has been taken to ensure that the facts stated are accurate and the

    opinions given are fair and reasonable, neither CT CLSA Securities (Pvt) Ltd. nor any director, officer or employee, shall in any way be responsible for the

    contents. CT CLSA Securities (Pvt) Ltd. may act as a Broker in the investments which are the subject of this document or in related investments and may

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    document. This is not an offer to buy or sell the investments referred to in this document. It is not intended to provide professional, investment or any

    other type of advice or recommendation and does not take into account the particular investment objectives, financial situation or needs of individual

    recipients. Before acting on any information in this publication/communication, you should consider whether it is suitable for your particular

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    The markets in which CT CLSA Securities (Pvt) Ltd. operates may not have regulation governing conflict of interest over preparation and publication of

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    contact your investment advisor / analyst should you require further information over the relevant regulation and particular disclosure over perceived or

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    Research

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