jkh ctsa 2016 q1
TRANSCRIPT
-
8/16/2019 JKH CTSA 2016 Q1
1/14
80
90
100
110
120
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
2/14
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
3/14
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
4/14
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
-
8/16/2019 JKH CTSA 2016 Q1
5/14
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
6/14
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
7/14
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
-
8/16/2019 JKH CTSA 2016 Q1
8/14
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
-
8/16/2019 JKH CTSA 2016 Q1
9/14
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
-
8/16/2019 JKH CTSA 2016 Q1
10/14
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
-
8/16/2019 JKH CTSA 2016 Q1
11/14
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
-
8/16/2019 JKH CTSA 2016 Q1
12/14
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
-
8/16/2019 JKH CTSA 2016 Q1
13/14
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
14/14
Trading & Sales
Lasantha Iddamalgoda
[email protected]+94 11 255 2295
+94 77 778 2103
Dyan Morris
+94 11 255 2320
+94 77 722 4951
Manura Hemachandra
+94 77 261 4797
Rosco [email protected]
+94 77 262 7233
Dhammika de Silva
+94 77 356 2699
Arusha Michael
+94 77 395 6765
Nuwan [email protected]
+94 76 858 9722
Shirali Rodrigo
+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
have acted upon or used the information contained in this document, or the research or analysis on which it is based, before its publication. CT CLSASecurities (Pvt) Ltd., its directors, officers or employees may also have a position or be otherwise interested in the investments referred to in this
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
circumstances and, if appropriate, seek your own professional advice, including tax advice.
The markets in which CT CLSA Securities (Pvt) Ltd. operates may not have regulation governing conflict of interest over preparation and publication of
research reports (including but not limited to disclosure of perceived or actual conflict of interest) as may be found in more developed markets. Please
contact your investment advisor / analyst should you require further information over the relevant regulation and particular disclosure over perceived or
actual conflict of interest.
Research
Sanjeewa Fernando
[email protected]+94 77 742 7439
Chayanika Ranasinghe
+94 77 237 9731
Yasas Wijethunga
+94 77 053 2059
Gayana Jayathilake
+94 11 255 2290
Maduranga Hettiarachchi
+94 11 255 2290
Ryan Jansz
+94 11 255 2290
Kavindu Ranasinghe
+94 11 255 2290
Consultant / Sales
Rohan Fernando
[email protected]+94 11 255 2297
+94 76 778 2101