September 4, 2014

Marcventures Holdings
COMPANY RESEARCH | Initiation

(MARC PM)

BUY
Share Price: PHP6.69 MCap (USD): 279M Philippines
Target Price: PHP9.42 (+41%) ADTV (USD): 0.8M Metals & Mining (New)

Rewarding venture into nickel Key Data

52w high/low (PHP) 6.85/1.77
§ Initiate at BUY on this under-researched name with TP of 3m avg turnover (USDm) 0.8
PHP9.42.
Free float (%) 39.3
§ MARC, one of the top five nickel miners in the Philippines, is Issued shares (m) 1,821
benefiting from the Indonesian ore ban as it exports all Market capitalization PHP12.2B
production to China. Major shareholders:
§ Long-term supply deficit can support high prices so 2014F -Philippine Business Bank 32.9%
income rises 74% and 2015F more than triples, dividends -DY CHI HING 19.1%
likely to be maintained. -TIU ARTURO L 5.4%

Ample resources support greater shipment volumes Share Price Performance

MARC’s resource-reserve volume of 57m wet metric tons (WMT) is 7.00 280

expected to last until 2019 and likely to increase with further 6.00 240

exploration. Since 2011, when mine operations started, shipment 5.00 200
volume has jumped to 2.8m WMT in 2013 from 0.62m WMT. As a 4.00 160
result, net income soared to PHP1b in 2013 from PHP209m in 2011.
3.00 120

Long-term supply deficit to keep prices, profits high 2.00 80

The nickel supply deficit is expected to last until at least 2018 due 1.00
Sep-12 Jan-13 May-13 Sep-13 Jan-14 May-14
40

to the Indonesian ore ban, and longer if stainless steel demand

Marcventures - (LHS, PHP) Marcventures / PSEi Philippine SE Index - (RHS, %)
continues to grow. Consequently, prices are likely to remain high.
MARC plans to ship out 1.5m WMT of saprolite and 1.5m WMT of 1 Mth 3 Mth 12 Mth
limonite annually. We forecast 2014 income of PHP1.8b (+74%) and
Absolute(%) 32.0 43.9 275.8
to more than triple to PHP6.0b in 2015.
Relative to index (%) 26.2 35.8 217.3
Strong cash flows can sustain dividends
Maybank vs Market
With 2013 profit almost 9x higher YoY, MARC declared its first cash Positive Neutral Negative
dividend last year, at 50% pay-out rate. As it has been net cash
Market Recs 3 0 0
since 2013 and capex needs are not demanding, we expect
Maybank Consensus % +/-
dividend payments to be sustained on strong cash flows.
Target Price (PHP) 9.42 na na
Potential upside of 41%, BUY '14 PATMI (PHPm) 1,766 1,088 62.3
On the expectation nickel prices will remain elevated and based on
'15 PATMI (PHPm) 6,013 988 508.6
the MARC’s current resource-reserve volume, our DCF-based fair
Source: FactSet; Bloomberg; Maybank
value and target price is PHP9.42. With 41% upside potential,
initiate at BUY.

FYE Dec (PHP m) FY12A FY13A FY14E FY15E FY16E

Revenue 697.5 2,516.6 4,047.6 11,146.5 9,234.3
EBITDA 267.0 1,256.7 2,250.4 8,758.2 6,903.4
Core net profit 114.6 1,017.9 1,766.2 6,013.1 4,717.6
Core EPS (PHP) 0.07 0.56 0.97 3.30 2.59
Core EPS growth (%) (45.8) 746.7 73.5 240.5 (21.5)
Net DPS (PHP) 0.00 0.30 0.48 1.65 1.30
Core P/E (x) 101.4 12.0 6.9 2.0 2.6
P/BV (x) 5.5 4.4 3.3 1.8 1.4
Net dividend yield (%) 0.0 4.5 7.2 24.7 19.4
ROAE (%) 5.6 41.6 55.0 116.6 60.2 Ramon Adviento
ROAA (%) 4.4 36.5 52.2 nm 58.4 (63) 2 849 8845
EV/EBITDA (x) 12.8 4.0 4.8 0.9 0.8 Ramon_Adviento@maybank-atrke.com
Net debt/equity (%) 9.5 net cash net cash net cash net cash

SEE PAGE 16 FOR IMPORTANT DISCLOSURES AND ANALYST CERTIFICATIONS

Marcventures Holdings

Investment thesis
Big contract mining area not yet fully exploited
Marcventures Holdings Inc (MARC) is one of the top five nickel miners and
also one of the low-cost producers in the Philippines. A wholly-owned
subsidiary, Marcventures Mining and Development Corp (MMDC), holds a
mineral production sharing agreement on 4,799 hectares located mostly in
the municipality of Cantilan, and extending to the municipality of
Carrascal, both of which are in Surigao del Sur province. Of the claim area,
exploration work has been done on 1,610 hectares, which is the basis for
the current resource-reserve volume of 57m wet metric tons (WMT) that is
expected to last until 2019. Further exploration is likely to result in higher
resource-reserve volume. MARC’s only product for the past three years has
been nickel ore, all of which is exported to China.

Jump in production reflected in rising income

Since mine operations started in 2011, MARC has increased shipment
volume to 2.8m WMT in 2013 from 0.62m WMT. The jump in production
occurred in 2013 when 13.6k WMT in saprolite exports was augmented with
2.78m WMT of limonite exports. As a result, net income soared to PHP1b in
2013 from PHP209m in 2011. This year, even with the four-month
suspension of operations that ended in August, MARC estimates it will be
able to export 3.0m WMT and maintain net income at PHP1b.

Well placed to benefit from soaring nickel prices

Along with other nickel miners in the Philippines, MARC has benefited from
surging nickel prices as a result of the Indonesian ore ban. The supply
deficit in nickel is expected to last until at least 2018, and longer if
stainless steel demand continues to grow, even at a slower pace than the
current 7%. Consequently, prices are likely to remain high. MARC plans to
ship out 1.5m WMT of saprolite and 1.5m WMT of limonite annually starting
in 2015, while 2014 volume split will be similar to 2013’s. With nickel
prices forecast at USD25/WMT for limonite and USD9-15/lb for saprolite,
we forecast 2014 income to rise 74% to PHP1.8b and more than triple to
PHP6.0b in 2015.

Cash dividends likely to be sustained

With 2013 profit up almost 9x YoY, MARC declared a 50% cash dividend pay-
out last year, its first since mine operations began in 2011.When it was
paid out in Dec 2013, the dividend yield was 4.5%. As MARC is in a net cash
position and capex requirements are not overly large, we expect dividend
payments can be sustained on the back of strong cash flows.

Potential upside of 41%

On the expectation nickel prices will remain elevated and based on the
current resource-reserve volume of MARC, our DCF-based fair value and
target price is PHP9.42. With upside potential of 41%, we initiate coverage
of MARC with a BUY rating.

Risks and concerns

Risks to our forecasts are the renewal of the mineral production sharing
agreement in 2016, terms of which are dependent on the revenue-sharing
scheme that still has to be enacted into law, pending bills in Congress that
aim to ban direct shipping of ores similar to the Indonesian ore ban and the
pending application to increase production to 5m WMT annually from 3m.

September 4, 2014 2
Marcventures Holdings

Resources/reserves may last until after 2019

The area covered by the mineral production sharing agreement 016-93-XI
held by Marcventures Mining and Development Corp (100% subsidiary of
MARC) is located in the Diwata mountain range of Surigao del Sur. It spans
an area of 4,799 hectares. The mine is covered by environmental
compliance certificate 0807-022-1093 issued by the Department of
Environment and Natural Resources. The current resource-reserve volume
is based on 1,610 hectares of exploration work. It stands at 57m WMT or
356k tonnes of contained nickel.

Figure 1. MARC’s ore resources and reserves

Class Type Tonnes (Wet) Tonnes (Dry) % Ni % Fe Ni Tonnes
Cabangahan
Measured Saprolite 2,459,446 1,612,098 1.91 12.04 30,830
Limonite 2,158,254 1,512,766 1.16 43.36 17,499
Total/Ave. 4,617,700 3,124,864 1.55 27.20 48,330
Indicated Saprolite 468,289 335,851 1.87 12.10 6,281
Limonite 16,092,900 9,977,598 0.97 44.65 96,325
Total/Ave. 16,561,188 10,313,449 0.99 43.59 102,607
Measured and indicated 21,178,889 13,438,313 1.12 39.78 150,936
Inferred Saprolite 3,304,821 2,167,646 1.72 13.07 37,228
Limonite 0 0 0 0 0
Total/Ave. 3,304,821 2,167,646 1.72 13.07 37,228

Sipangpang
Measured Saprolite 0 0 0 0 0
Limonite 2,367,200 1,467,664 0.75 48.93 10,936
Total/Ave. 2,367,200 1,467,664 0.75 48.93 10,936
Indicated Saprolite 0 0 0 0 0
Limonite 21,495,251 13,327,056 0.70 47.49 92,685
Total/Ave. 21,495,251 13,327,056 0.70 47.49 92,685
Measured and indicated 23,862,451 14,794,720 0.70 47.63 103,620

Pili
Measured Saprolite 0 0 0 0 0
Limonite 4,789,415 3,071,731 0.83 49.79 25,424
Total/Ave. 4,789,415 3,071,731 0.83 49.79 25,424
Indicated Saprolite 0 0 0 0 0
Limonite 4,105,778 2,668,756 0.86 49.42 22,987
Total/Ave. 4,105,778 2,668,756 0.86 49.42 22,987
Measured and indicated 8,895,193 5,740,487 0.84 49.62 48,411

TOTAL
Measured Saprolite 2,459,446 1,612,098 1.91 12.04 30,830
Limonite 9,314,870 6,052,161 0.89 47.97 53,859
Total/Ave. 11,774,315 7,664,259 1.10 40.41 84,689
Indicated Saprolite 468,289 335,851 1.87 12.10 6,281
Limonite 41,693,929 25,973,409 0.82 46.60 211,997
Total/Ave. 42,162,218 26,309,260 0.83 46.16 218,279
Inferred Saprolite 3,304,821 2,167,646 1.72 13.07 37,228
Limonite 0 0 0 0 0
Total/Ave. 3,304,821 2,167,646 1.72 13.07 37,228
Measured, Indicated and
Inferred
Saprolite 6,232,556 4,115,595 1.80 12.07 74,081
Limonite 51,008,799 32,025,570 0.88 46.87 281,825
Total 57,241,355 36,141,165 0.98 43.08 355,906
Source: MARC

In Figure 2 below, the pink areas are the explored portions and the brown
areas are known nickel laterite deposits containing areas for future
exploration. There is still room for the resource–reserve volume to go up.
Currently, mine life is six years or until 2019 for saprolite and 13 years for
limonite or until 2026. Should the results of further exploration indicate
higher resources, the life of the mine under existing market conditions will
be prolonged.

September 4, 2014 3
Marcventures Holdings

Most interesting is the extent of the area still to be explored at the bottom
of Figure 2 as this is where the high-grade saprolite is. With the Indonesian
ore ban creating a deficit scenario at least until 2018, the plan is to focus
on higher-value saprolite in exploration work to ride on the prevailing high
prices that are expected to be around until at least 2018.

Figure 2. Mineral resource map of MARC’s Cantilan mine site*

Source: MARC
* The pink areas are the explored portions, while the brown areas are known nickel laterite deposits containing areas for future
exploration.

Operations resumed after suspension by MGB

The Department of Environment and Natural Resources (DENR), through
the Mines and Geosciences Bureau (MGB), suspended MARC’s operations in
April 2014 in response to complaints it was operating outside the approved
mining area, it failed to implement environmental mitigation measures in
the contract area and it was not following the submitted three-year work
programme. Based on the findings of the monitoring team sent in July to
verify the complaints, MGB requested MARC to address issues raised prior
to review of the suspension order.

September 4, 2014 4
Marcventures Holdings

MARC filed a motion for reconsideration and simultaneously started

addressing the issues pointed out by MGB. An amended declaration of mine
project feasibility (DMPF) to cover both Cantilan and Carrascal portions of
the MPSA contract area was pushed to remedy the complaint of operating
outside the approved mining area. MGB is processing the amended DMPF
while the existing one continues to be valid. MARC is also cleaning up the
silt dams and doing other environmental mitigating measures. The latest
request to clean up the mine site of stockpile is also being addressed by
shipping out the stock, which is equivalent to eight boatloads of limonite
ore. The suspension order was lifted in August.

Shipping out more high-grade ore soon

MARC’s saprolite deposit is considered high grade and their current
reserves and exploration activity are geared towards exploiting this
opportunity. With prices hovering at USD95/WMT and total mining cost of
around USD18/WMT, reserves of over 6m WMT will easily contribute
USD77/WMT annually. At a budgeted volume of 1.5m WMT, this translates
to USD116m in annual profit contribution. Meanwhile, MARC also plans to
ship out 1.5m WMT of high-iron limonite, which carries a contribution
margin of over USD12/WMT or USD18m in annual profit.

For 2014, the effect of the MGB suspension is to increase limonite

production as it is easier to mine while ramping up production of saprolite
to hit the 0.4m WMT budget. In addition to the eight boatloads or 400k
WMT of limonite to clean up the mine site, MARC had earlier shipped out
1.045m WMT of limonite and YTD it is 1.4m WMT. We expect production of
limonite will reach 2.6m WMT because third-party mining contractors are
being used to fast-track production. All told, we think the 3.0m WMT
target volume will be achieved by October, when the shipping window
closes.

From 2015 onwards, the intention is to split 3.0m WMT equally between
limonite and saprolite. Priority is being given to the higher-valued saprolite
deposit while the limonite will be mined until end of life. In effect, total
resource of 6.23m WMT of saprolite will be mined at an annual rate of
1.5m WMT and 51m WMT of limonite will be mined at an annual rate of
1.5m WMT until the saprolite is depleted. Upon saprolite depletion,
limonite production will jump to 3.0m WMT. The limonite found in the
mine is predominantly the low-nickel high-iron type, which is basically
used as feed material for carbon steel mills.

Industry landscape
Indonesian ore ban triggers potential supply deficit
In January 2014, the Indonesian government implemented the ban on
export of raw ore or directly shipping ore. The law was passed in 2009 but
was enforced only this year. The law requires miners to process their ore
with certain purity ratios. This affected copper, nickel and bauxite. Tin
was previously affected by a 2002 order and coal was exempted as it
undergoes no more processing. Indonesia is the largest nickel laterite
exporter in the world with exports containing over 500,000 MT of nickel in
a 2m MT world market. In effect, 25% of global supply was suddenly
removed from the market. The capacity of the Philippines to supply the
1.8% nickel laterite is limited and is less than 15% (9m vs 54m shipped out

September 4, 2014 5
Marcventures Holdings

by Indonesia in 2013) of supply of nickel laterite ore to China. The removal

of the supply from Indonesia has swung the demand-supply situation from
surplus to deficit. From literature available, the deficit is forecast until
2020.

NPI industry is main market

There are two buyers of nickel laterite and both are preliminary processors
to stainless steel processors. These are the ferronickel producers and the
nickel pig iron (NPI) producers. NPI has a much larger market share as they
produce the 5%-10%-15% nickel iron ingots with ferronickel producers doing
the 15%-20+% nickel. Current capacity of NPI producers stands at 8.0m MT.
Depending on the product (5%-10%-15%), contained nickel demand can be
as low as 400k MT to a high of 1.2m MT. In 2013 NPI producers in China
consumed 502,000 MT of contained nickel but due to the Indonesian ore
ban is projected to drop to 380k MT in 2014 and further to 215k MT before
recovering when the Indonesian NPI plants start producing in 2016.
Current purging of old NPI producers in China which use heavily polluting
furnaces is also part of the reason for the decline in production capacity.

Global nickel production from laterite sources account for 84.8% of the
1.97m-MT market in 2013. Easily 40% of global nickel consumption is China
and the NPI market consumes about 70% of contained nickel. Indonesia
supplied 57% (409k MT) of the 714k MT of nickel used in China with the
Philippines’ 90k MT accounting for 12.6% in 2013. Due to the cost of
shipping, only three countries (Philippines, Indonesia and New Caledonia)
supply nickel laterite to China. The cost of shipping from Brazil and
Guatemala is expensive for Chinese buyers and turnaround time of more
than a month with volatile metal prices make it difficult to lock in
contracts. The turnaround time for the Philippines is 4-6 days, Indonesia is
9-14 days and New Caledonia 24-30 days. New Caledonia producers are
dedicated to processing their ores while some small players are exporting
ores directly. Due to the high cost of shipping, New Caledonia is a small
exporter of nickel laterite to China even if total production is similar to
the Philippines. Both countries account for 5% each of world production.

Due to surging nickel ore prices, there is a change in product mix occurring
with low-grade NPI products growing dramatically. This is favorable for
blast furnace (BF) plants which can treat limonite ores with ease as
compared to the rotary kiln electric furnace plants. Consequently, the
projected drop in NPI production in 2014-2016 may not be so dramatic.
This would be good news for MARC as it produces the feed material for BF
plants.

STS market is final consumer

The stainless steel (STS) market has grown 38% to 38.9m MT in 2013 from
28.2m MT in 2007. During the same period China STS production surged
174% to 19.5m in 2013. In 2013, China constituted 50% of world
production. Its share has been expanding as ex-China production during the
same period shrank 8% to 19.4m MT in 2013 from 21.1m MT in 2007. The
segments of the STS market we are interested in is the 200 and 300 series.
Both have minimum content of 11% chromium but their nickel content
varies. The 200 series would have 1-2% nickel and account for 20% of
world STS production while the 300 series would have 8% nickel and
account for 55%. The STS market is projected to grow with China carrying
bulk of the growth. Any increase in Europe and the US would be a welcome
boost to demand and create a bigger deficit in the future.

September 4, 2014 6
Marcventures Holdings

Repeat of high prices seen in previous supply deficit

Due to the Indonesian ore ban the supply of nickel laterite ore will be
choked and the NPI industry in China will feel the strain. Already, excess
capacity is being reduced and unprofitable operations closed due to the
lack of raw material supply. Meanwhile Chinese NPI producers are already
setting up NPI facilities in Indonesia with production expected by 2016.
The STS industry will continue to grow albeit at a slower pace given the
adjustments in the economy of China and the rest of the world. With
supply bottlenecks and growth in the STS industry, albeit slower, nickel
will likely be in deficit this year and up to 2020 according to studies from
the International Nickel Study Group (Figure 3a). Working from that
scenario, and assuming no growth in the STS industry, we see a small
surplus starting in 2019 (Figure 3b).

Figure 3a. 2013 – 2020F contained nickel demand and supply - STS growing 4.4-6.6%

('000 MT)
2,900 Deficit Deficit
Deficit Deficit 220
Deficit 275 236
Deficit 324
Deficit 377
2,700 506
194

2,500

2,300

2,100 Excess
190

1,900

1,700

1,500
2013 2014F* 2015F 2016F 2017F 2018F 2019F 2020F

Total Nickel Supply Total Nickel Demand

Source: International Nickel Study Group

Note: 2014F includes 305k MT of contained nickel from LME warehouse stocks

September 4, 2014 7
Marcventures Holdings

Figure 3b. 2013 – 2020F contained nickel demand and supply - STS no growth

('000 MT)
2,700 Excess
Excess 104
Deficit Deficit Deficit Deficit Excess 69
74 325 159 64 6
2,500

2,300

2,100 Excess
190

1,900

1,700

1,500
2013 2014F* 2015F 2016F 2017F 2018F 2019F 2020F

Total Nickel Supply Total Nickel Demand

Source: Maybank ATR Kim Eng

Note: 2014F includes 305k MT of contained nickel from LME warehouse stocks

Price behaviour in 2005-2011 when a supply deficit existed had nickel at

USD10/lb and during the big-deficit years averaging USD14/lb with a high of
USD22/lb in 2006. This behaviour is expected to occur again within the
deficit years of 2014 until 2020.

Strong growth in profitability

More shipments of high-margin products

We forecast 2014 net income will grow 74% to PHP1.8b due to higher prices
for limonite and saprolite ores as well as an increase in production of the
higher-priced high-grade saprolite ore to 0.4m WMT from 13.6k WMT in
2013. We expect 2015 to be a banner year with profits and margins
reaching record levels as net income almost triples to PHP6.0b, with
shipments of 1.5m WMT of limonite and 1.5m WMT of saprolite. These will
be on the back of projected mining costs of USD10-12/WMT for high-iron
limonite and USD18-20/WMT for saprolite ores as against current prices of
USD32/WMT and USD105/WMT, respectively.

Strong free cash flows to support dividend payments

We expect MARC’s free cash flows to double to PHP1.9b this year and more
than triple to PHP6.1b by end-2015F. Anchored on the company’s sustained
healthy operations, pre-tax income is expected to post a two-year CAGR of
191% in 2013-15F, while the need for additional working capital would
likely remain minimal. We also believe annual capex to be used mainly for
maintenance will remain steady at PHP82m in 2014F-16F. This supports our
50% annual dividend pay-out assumption, which translates to a 7.2% and
24.7% dividend yield in 2014F and 2015F, respectively.

September 4, 2014 8
Marcventures Holdings

Potential 41% upside, BUY

In our DCF-based valuation model, we took as given the published
resources and planned mining rate of 3.0m WMT annually. We assumed two
price levels: negotiated price for limonite and LME-based for saprolite with
the following projected prices.

Limonite USD25/WMT for 2014-2018

USD20/WMT henceforth

Saprolite USD8.76/lb for 2014

USD15/lb for 2015
USD12/lb in 2016
USD10/lb for 2017 until 2020
USD8/lb henceforth,

With WACC of 9%, the resulting fair value and target price is PHP9.42.

As potential upside is 41%, initiate coverage on MARC with a BUY rating.

Risks and concerns

The life of the mineral production sharing agreement 016-93-XI held by

Marcventures Mining and Development Corp is until 2018. Come 2016, an
application to renew the MPSA contract has to be made. We do not know
what the terms will be as changes to the revenue portions of the Mining
Law (Republic Act 7942) are still being determined.

There are two bills now in Congress proposing that all ores mined in the
country be processed before being exported to increase value added and
attract investments. This is similar to the Indonesian ore ban. Without
going into the merits of the bills, we simply note the Philippine legislative
mill grinds slowly. Proposed laws have to go through the House of
Representatives and the Senate and then the two versions have to be
unified. The bill also has to get support from the government agencies who
will implement it because President Aquino has veto power. Finally, when
a bill is signed into law it cannot be enforced until the implementing rules
and regulations are ready, which can take time. Meanwhile there are 21
months before the next national and local elections in 2016. We believe
the likelihood of any one of these bills getting passed is low.

There is a pending application to expand production to 5m WMT from 3m

per year. If approved, this will further improve the profit outlook for
MARC.

September 4, 2014 9
Marcventures Holdings

Company background

MARC was formerly AJO.net Holdings Inc, a company incorporated in 1957

and which had undergone many transformations, from being originally an
oil exploration company to an IT company. In 2009, MARC, through a share
swap, acquired Marcventures Mining and Development Corp (MMDC),
making it a fully-owned subsidiary of MARC. MMDC is incorporated
primarily to engage in mining, smelting and extracting mineral ores.

Figure 4. MARC’s organizational structure

Marcventures Holdings Inc

(MARC)

100%

Marcventures Mining and

Development Corp
(MMDC)

Source: MARC

Appendix
Figure 5. MARC’s board of directors and officers
Cesar C. Zalamea Elected as president and chairman of Marcventure Holdings Inc in June 2013. He is
also the chairman of MMDC, Starr International Company (Asia) Ltd and Bright Kindle
Chairman and President Resources and Investments Inc. Before being elected as an independent director of
Araneta Properties Inc, Mr. Zalamea sat as director until December 2008. He also
serves as a director of AIA Capital Investment Management Ltd and AIA Capital Inc.
He joined the AIG Companies in 1954 and served as a director in numerous AIG
member and investee companies in Southeast Asia, including American International
Assurance Co Ltd, American International Assurance Capital Corp, Nan Shan Life
Insurance Co Ltd, and Siam Commercial Bank Asset Management Co Ltd (alternately
SCB Asset Management). During his tenure with the AIG Companies, he served as
deputy director general of the Economic Staff to the President of the Philippines. He
served as the president and head of private equity and direct investment of Asia at
AIG Global Investment Group (alternately Pinebridge Investments Asia
Limited/PineBridge Investments LLC) and executive officer of Asia Pacific Region at
APEN AG (alternately AIG Private Equity). He was elected president and managing
director of Pinebridge Investments Asia Ltd, chairman and chief executive officer of
the Development Bank of the Philippines and president and chief executive Officer
of The Philippine American Life and General Insurance Company. He previously
served as chairman of Manila Electric Co, AIG Global Investment Group, Beijing C. V.
Starr Investment Advisors Limited, Philippine American Life, and PineBridge
Investments LLC and General Insurance Company. He was a member of the advisory
board at Campbell Lutyens and Co Ltd. Mr. Zalamea received his MBA from New York
University and BA in Accounting and Banking from Letran College of the Philippines.

Source: MARC

September 4, 2014 10
Marcventures Holdings

Figure 5. MARC’s board of directors and officers (continued)

Macario U. Te Elected as director in June 2013. He also serves as director of Bright Kindle
Resources and Investments Inc. He was the previous president of Macte International
Director Corp and Linkwealth Construction Corp, chairman of Autobus Industries Corp and
chief executive officer of MT Holdings Inc. He previously sat as director in the
following companies: Bulawan Mining Corp, PAL Holdings Inc, Philippine National
Bank, Oriental Petroleum and Minerals Corp, Gotesco Land Inc, PNB Capital and
Investment Corp, PNB General Insurers Co Inc, PNB Holdings Corp, PNB Remittance
Center, PNB Securities Inc, PNB-IFL, PNB Italy SPA, Balabac Resources and Holdings,
Nissan North EDSA, Beneficial-PNB Life and Insurance Co Inc, Waterfront Phils,
Fontana Golf Club Inc, Baguio Gold Holding Corp, Traders Royal Bank, Traders Hotel,
Pacific Rim Oil Resources Corp, Link World Construction Development Corp, Suricon
Resources Corp, Alcorn Petroleum and Minerals Corp, Associated Development Corp
and Palawan Consolidated Mining Corp. Mr. Te obtained his Bachelor of Science in
Commerce from Far Eastern University.

Antonio H. Ozaeta Elected as independent director of the company in August 2013 and is currently the
vice chairman of the board. He also sits as chairman of the board in the following
Vice Chairman and companies/organizations: (1) Philippine Commercial Capital Inc (from July 1989 to
Independent Director present); (2) Alaska Milk Corp (from May 2010 to present); (3) Magellan Capital
Holdings Corp (from June 1992 to present); (4) Magellan Utilities Development Corp
(from June 1992 to present). He is a director of Bright Kindle Resources and
Investments Inc from January 2014 to present, Insular Life Health Care Inc from April
1999 to present and Home Credit Mutual Building and Loan Association from April
1999 to present. He is a founding member of the Makati Business Club. He was
previously the president and chief executive officer of the Philippine Commercial
International Bank (PCI Bank) and president of Philippine Trust Company (Philtrust
Bank). He was also the executive vice president, treasurer and chairman of the
board of Manila Electric Co. He was likewise the previous president of the Bankers
Association of the Philippines and founding member and chairman of the board of
trustees of the Philippine Business for Social Progress. Mr. Ozaeta obtained his BS
Economics degree from Ateneo de Manila, BSBA from De La Salle College graduating
cum laude and MBA from Harvard University.

Carlos Alfonso T. Ocampo Elected as independent director in August 2013. He is also an independent director
of Bright Kindle Resources and Investments Inc. He is the founder of Ocampo and
Vice Chairman and Manalo law firm. He is a member of the board in various corporations including
Independent Director Panalpina Transport Phils Inc, MAA General Assurance Phils Inc, South Forbes City
College Corp, Columbian Autocar Corp, Asian Carmakers Corp, Jam Transit Inc,
Prestige Cars Inc, Autohaus Quezon City Inc, Timebound Trading Corp, and Monpierre
Foods Corp. He is the corporate secretary of PSI Healthcare Development Services
Corp, PSI Prescription Solutions Corp, Adrianse Phils Inc, Bluelion Motors Corp,
Autohaus Quezon City Inc, First Charters and Tours Transport Corp, Brycl Resorts and
International Inc, AVK Philippines Inc, Jam Liner Inc and Manila Golf and Country
Club. He sits as independent director of Marcventures Holdings Inc. He previously
served as vice president and general counsel of Air Philippines Corp. Atty. Ocampo
obtained his Bachelor of Arts in Economics, cum laude, and his Bachelor of Laws
from the University of the Philippines. Upon graduation from college, he was
admitted into the honor societies of Phi Kappa Phi and Pi Gamma Mu. He also
completed an executive management program at the Asian Institute of Management,
and previously taught business law at the College of St. Benilde, De La Salle
University. In 2013, he was named as a leading adviser as well as a commercial law
expert by Acquisition International and Global Law Experts, respectively.

Dy Chi Hing Elected director in March 2010. He has been chairman and CEO of So-Nice
International Corp and has been in the import and trading business since 1968. He is
Director an honorary member and financial consultant of the Filipino-Chinese Chamber of
Commerce and Industry, and is an active member and one of the co-founders of the
Meat Importer Traders Association (MITA).

Source: MARC

September 4, 2014 11
Marcventures Holdings
Figure 5. MARC’s board of directors and officers (continued)
Isidro C. Alcantara, Jr.
Director
Augusto C. Serafica, Jr.
Director
Rolando S. Santos
Treasurer/ Vice President for
Finance and Administration
Roberto V. San Jose
Corporate Secretary
Source: MARC
September 4, 2014
Elected director in August 2013 and serves as the company’s executive vice
president. He is also the vice chairman and director of MMDC. Mr. Alcantara is the
president of Financial Risk Resolution Advisory Inc and Bright Kindle Resources and
Investments Inc. He has been a director of Benguet Corp since November 2008. He
served as senior vice president and head of corporate and institutional banking at
Hong Kong and Shanghai Banking Corp (HSBC). He was elected president and chief
executive officer of Philippine Bank of Communications (PBCom), Manila, Philippines
from 2000 to 2004. In addition, he served as executive vice president of corporate
banking group of Equitable PCI Bank (EPCIB) from 1981 to 2000. He served as
director of Bankers Association of the Philippines from 2000 to 2003. Mr. Alcantara
also served at Bancom Finance Corp, PCI Bank and Insular Bank of Asia and America
(a Bank of America Affiliate) from 1975 to 1981. He is a Certified Public Accountant.
He obtained his BSC Accounting and BS Economics degrees from De la Salle
University graduating Magna cum Laude. He also attended the Special Studies in
International Banking at the Wharton School, University of Pennsylvania.
Elected as director in June 2013. He sits as chairman of board in the following
companies: Premiere Horizon Alliance Corp, Digiwave Solutions Inc, AOB
Management Corp, TLC Manna Consulting Inc, Global Idealogy Corp. He is also the
managing director of Asian Alliance Investment Corp and Asian Alliance Holdings and
Development Corp. He is currently the treasurer of Sinag Energy Philippines Inc,
Ardent Property Development Corp. He serves as an independent director of Bright
Kindle Resources and Investments Inc and director of Investment House Association
of the Philippines. He is the chairman of the AIM Alumni Association, treasurer of the
AIM Leadership Foundation Inc and chapter head of the Brotherhood of Christian
Businessmen and Professionals - Makati Chapter. He was previously connected with
Sycip, Gorres, Velayo & Co from 1985-1989. He obtained his Bachelor of Commerce
in Accountancy from San Beda College and Master in Business Management from
Asian Institute of Management. Mr. Serafica is a Certified Public Accountant.
Elected treasurer in March 2014. He has been the company’s vice president for
finance and administration since August 2013. He also serves as treasurer of MMDC
and Prime Media Holdings Inc and Bright Kindle Resources and Investments Inc. He
was previously the branch head/ cluster head for Makati branches of Equitable PCI
Bank which was eventually acquired by BDO from 2001 to 2013. He served as branch
head in Diliman, Quezon City to area head for metro and provincial branches of the
Bank of Commerce from 1984 to 2001. He also served as branch head in West
Avenue, Quezon City and Marikina branches of the Producers Bank of the Philippines
from 1981 to 1984. He worked at the Far East Bank and Trust Co from 1972 to 1981.
He was also employed as a liaison officer of the Malacanang Information and
Assistance Unit from 1970 to 1972. He obtained his degree in Bachelor of Science in
Business Administration from the University of the East.
Corporate secretary of the company and has held the office since 2010. He is
chairman of Mabuhay Holdings Corp; a director of Interport Resources Corp and
Anglo-Philippine Holdings Corp; and corporate secretary of Alsons Consolidated
Resources Inc, Anglo-Philippine Holdings Corp, Beneficial Life Insurance Corp Inc,
FMF Development Corp, Premiere Horizon Alliance Corp, Solid Group Inc, United
Paragon Mining Corp and Vulcan Industrial and Mining Corp. He is also either a
director, corporate secretary, or an officer of various companies which are clients of
the law firm of Castillo Laman Tan Pantaleon & San Jose, of which he is presently a
senior consultant. He is a member of the Integrated Bar of the Philippines.
12
Marcventures Holdings

FYE 31 Dec FY12A FY13A FY14E FY15E FY16E

Key Metrics
P/E (reported) (x) nm 12.0 6.9 2.0 2.6
Core P/E (x) 101.4 12.0 6.9 2.0 2.6
P/BV (x) 5.5 4.4 3.3 1.8 1.4
P/NTA (x) na na na na na
Net dividend yield (%) 0.0 4.5 7.2 24.7 19.4
FCF yield (%) nm 7.9 15.3 50.0 39.4
EV/EBITDA (x) 12.8 4.0 4.8 0.9 0.8
EV/EBIT (x) 26.4 4.8 5.2 0.9 0.8

INCOME STATEMENT (PHP m)

Revenue 697.5 2,516.6 4,047.6 11,146.5 9,234.3
Gross profit 197.7 1,257.6 2,548.9 9,057.8 7,188.1
EBITDA 267.0 1,256.7 2,250.4 8,758.2 6,903.4
Depreciation (137.5) (200.7) (172.4) (168.1) (164.0)
Amortisation 0.0 0.0 0.0 0.0 0.0
EBIT 129.5 1,056.1 2,078.0 8,590.1 6,739.5
Net interest income /(exp) (25.5) (39.8) (0.1) 0.0 0.0
Associates & JV 0.0 0.0 0.0 0.0 0.0
Exceptionals 0.0 0.0 0.0 0.0 0.0
Other pretax income 9.8 0.0 0.0 0.0 0.0
Pretax profit 113.7 1,016.3 2,077.9 8,590.1 6,739.5
Income tax 0.9 1.5 (311.7) (2,577.0) (2,021.8)
Minorities 0.0 0.0 0.0 0.0 0.0
Discontinued operations 0.0 0.0 0.0 0.0 0.0
Reported net profit 114.6 1,017.9 1,766.2 6,013.1 4,717.6
Core net profit 114.6 1,017.9 1,766.2 6,013.1 4,717.6
Distributable Income 114.6 1,017.9 1,766.2 6,013.1 4,717.6

BALANCE SHEET (PHP m)

Cash & Short Term Investments 13.1 303.5 1,277.9 4,365.4 6,810.9
Accounts receivable 12.0 8.3 13.3 36.7 30.4
Inventory 14.9 81.0 96.4 134.3 131.6
Property, Plant & Equip (net) 465.3 356.1 356.1 356.1 356.1
Intangible assets 0.0 0.0 0.0 0.0 0.0
Investment in Associates & JVs 0.0 0.0 0.0 0.0 0.0
Other assets 2,137.8 2,179.7 2,089.6 2,003.7 1,922.0
Total assets 2,643.1 2,928.5 3,833.2 6,896.2 9,251.0
ST interest bearing debt 25.5 1.3 0.0 0.0 0.0
Accounts payable 259.2 120.5 143.4 199.9 195.8
LT interest bearing debt 189.2 0.0 0.0 0.0 0.0
Other liabilities 45.0 37.0 37.0 37.0 37.0
Total Liabilities 519.3 159.3 180.9 237.3 233.3
Shareholders Equity 2,123.8 2,769.2 3,652.3 6,658.9 9,017.7
Minority Interest 0.0 0.0 0.0 0.0 0.0
Total shareholder equity 2,123.8 2,769.2 3,652.3 6,658.9 9,017.7
Total liabilities and equity 2,643.1 2,928.5 3,833.2 6,896.2 9,251.0

CASH FLOW (PHP m)

Pretax profit 113.7 1,016.3 2,077.9 8,590.1 6,739.5
Depreciation & amortisation 137.5 200.7 172.4 168.1 164.0
Adj net interest (income)/exp 25.5 39.8 0.1 0.0 0.0
Change in working capital (103.1) (229.8) 2.5 (4.8) 5.0
Cash taxes paid 0.0 0.0 (311.7) (2,577.0) (2,021.8)
Other operating cash flow 0.0 0.0 0.0 0.0 0.0
Cash flow from operations 148.1 987.3 1,941.1 6,176.3 4,886.5
Capex (224.3) (26.7) (82.2) (82.2) (82.2)
Free cash flow (76.2) 960.5 1,858.8 6,094.1 4,804.3
Dividends paid 0.0 (546.4) (883.1) (3,006.5) (2,358.8)
Equity raised / (purchased) 13.7 38.7 0.0 0.0 0.0
Change in Debt (43.3) (63.6) (1.3) 0.0 0.0
Other invest/financing cash flow (47.0) (98.9) 0.0 0.0 0.0
Effect of exch rate changes 0.0 0.0 0.0 0.0 0.0
Net cash flow (152.8) 290.4 974.4 3,087.5 2,445.5

September 4, 2014 13
Marcventures Holdings

FYE 31 Dec FY12A FY13A FY14E FY15E FY16E

Key Ratios
Growth ratios (%)
Revenue growth (17.3) 260.8 60.8 175.4 (17.2)
EBITDA growth (15.7) 370.7 79.1 289.2 (21.2)
EBIT growth (44.8) 715.8 96.8 313.4 (21.5)
Pretax growth (45.7) 793.8 104.4 313.4 (21.5)
Reported net profit growth (45.3) 788.5 73.5 240.5 (21.5)
Core net profit growth (45.3) 788.5 73.5 240.5 (21.5)

Profitability ratios (%)

EBITDA margin 38.3 49.9 55.6 78.6 74.8
EBIT margin 18.6 42.0 51.3 77.1 73.0
Pretax profit margin 16.3 40.4 51.3 77.1 73.0
Payout ratio 0.0 53.7 50.0 50.0 50.0

DuPont analysis
Net profit margin (%) 16.4 40.4 43.6 53.9 51.1
Revenue/Assets (x) 0.3 0.9 1.1 1.6 1.0
Assets/Equity (x) 1.2 1.1 1.0 1.0 1.0
ROAE (%) 5.6 41.6 55.0 116.6 60.2
ROAA (%) 4.4 36.5 52.2 nm 58.4

Liquidity & Efficiency

Cash conversion cycle (88.0) (39.1) (9.4) (8.9) (10.1)
Days receivable outstanding 8.8 1.5 1.0 0.8 1.3
Days inventory outstanding 89.8 13.7 21.3 19.9 23.4
Days payables outstanding 186.6 54.3 31.7 29.6 34.8
Dividend cover (x) nm 1.9 2.0 2.0 2.0
Current ratio (x) 0.2 3.3 9.4 nm nm

Leverage & Expense Analysis

Asset/Liability (x) 5.1 nm nm nm nm
Net debt/equity (%) 9.5 net cash net cash net cash net cash
Net interest cover (x) 5.1 26.6 nm nm nm
Debt/EBITDA (x) 0.8 0.0 0.0 0.0 0.0
Capex/revenue (%) 32.2 1.1 2.0 0.7 0.9
Net debt/ (net cash) 201.6 (302.1) (1,277.9) (4,365.4) (6,810.9)
Source: Company; Maybank

September 4, 2014 14
Marcventures Holdings

Research Offices
REGIONAL HONG KONG / CHINA INDONESIA Surachai PRAMUALCHAROENKIT
(66) 2658 6300 ext 1470
WONG Chew Hann, CA Howard WONG Head of Research Wilianto IE Head of Research Surachai.p@maybank-ke.co.th
Regional Head of Institutional Research (852) 2268 0648 (62) 21 2557 1125 • Auto • Conmat • Contractor • Steel
(603) 2297 8686 wchewh@maybank-ib.com howardwong@kimeng.com.hk wilianto.ie@maybank-ke.co.id
• Oil & Gas - Regional • Strategy Suttatip PEERASUB
ONG Seng Yeow (66) 2658 6300 ext 1430
Alexander LATZER Rahmi MARINA
Regional Head of Retail Research (852) 2268 0647 (62) 21 2557 1128 suttatip.p@maybank-ke.co.th
(65) 6432 1453 • Media • Commerce
alexanderlatzer@kimeng.com.hk rahmi.marina@maybank-ke.co.id
ongsengyeow@maybank-ke.com.sg • Metals & Mining - Regional • Banking & Finance
Sutthichai KUMWORACHAI
Alexander GARTHOFF Jacqueline KO, CFA Aurellia SETIABUDI (66) 2658 6300 ext 1400
Institutional Product Manager (852) 2268 0633 jacquelineko@kimeng.com.hk (62) 21 2953 0785 sutthichai.k@maybank-ke.co.th
(852) 2268 0638 • Consumer Staples & Durables aurellia.setiabudi@maybank-ke.co.id • Energy • Petrochem
• Property
alexgarthoff@kimeng.com.hk Ka Leong LO, CFA
Termporn TANTIVIVAT
(852) 2268 0630 kllo@kimeng.com.hk Isnaputra ISKANDAR
ECONOMICS (66) 2658 6300 ext 1520
* Consumer Discretionary & Auto (62) 21 2557 1129
termporn.t@maybank-ke.co.th
isnaputra.iskandar@maybank-ke.co.id
Suhaimi ILIAS Karen KWAN • Property
• Metals & Mining • Cement
Chief Economist (852) 2268 0640 karenkwan@kimeng.com.hk
Singapore | Malaysia • Property & REITs Pandu ANUGRAH Woraphon WIROONSRI
(603) 2297 8682 (62) 21 2557 1137 (66) 2658 6300 ext 1560
Osbert TANG, CFA pandu.anugrah@maybank-ke.co.id woraphon.w@maybank-ke.co.th
suhaimi_ilias@maybank-ib.com (86) 21 5096 8370 • Infrastructure • Construction • Transport • Banking & Finance
osberttang@kimeng.com.hk
Luz LORENZO • Transport & Industrials Janni ASMAN
Philippines Jaroonpan WATTANAWONG
(62) 21 2953 0784
Ricky WK NG, CFA (66) 2658 6300 ext 1404
(63) 2 849 8836 janni.asman@maybank-ke.co.id
(852) 2268 0689 rickyng@kimeng.com.hk jaroonpan.w@maybank-ke.co.th
luz_lorenzo@maybank-atrke.com • Cigarette • Healthcare • Retail
• Utilities & Renewable Energy • Transportation • Small cap
Tim LEELAHAPHAN PHILIPPINES
Steven ST CHAN Chatchai JINDARAT
Thailand (852) 2268 0645 stevenchan@kimeng.com.hk Luz LORENZO Head of Research (66) 2658 6300 ext 1401
(662) 658 1420 tim.l@maybank-ke.co.th • Banking & Financials - Regional (63) 2 849 8836 chatchai.j@maybank-ke.co.th
luz_lorenzo@maybank-atrke.com • Electronics
JUNIMAN Warren LAU • Strategy
Chief Economist, BII (852) 2268 0644 • Utilities • Conglomerates • Telcos
warrenlau@kimeng.com.hk
VIETNAM
Indonesia
• Technology – Regional Lovell SARREAL LE Hong Lien, ACCA
(62) 21 29228888 ext 29682 Head of Institutional Research
Juniman@bankbii.com (63) 2 849 8841
William YANG lovell_sarreal@maybank-atrke.com (84) 8 44 555 888 x 8181
(852) 2268 0675 • Consumer • Media • Cement lien.le@maybank-kimeng.com.vn
Josua PARDEDE williamyang@kimeng.com.hk • Strategy • Consumer • Diversified • Utilities
Economist / Industry Analyst, BII • Technology – Regional Rommel RODRIGO
Indonesia (63) 2 849 8839 THAI Quang Trung, CFA, Deputy Manager,
(62) 21 29228888 ext 29695 INDIA rommel_rodrigo@maybank-atrke.com Institutional Research
JPardede@bankbii.com • Conglomerates • Property • Gaming (84) 8 44 555 888 x 8180
Jigar SHAH Head of Research • Ports/ Logistics trung.thai@maybank-kimeng.com.vn
(91) 22 6632 2632 • Real Estate • Construction • Materials
MALAYSIA Katherine TAN
jigar@maybank-ke.co.in
WONG Chew Hann, CA Head of Research • Oil & Gas • Automobile • Cement (63) 2 849 8843 Le Nguyen Nhat Chuyen
(603) 2297 8686 wchewh@maybank-ib.com kat_tan@maybank-atrke.com (84) 8 44 555 888 x 8082
• Strategy • Construction & Infrastructure Anubhav GUPTA • Banks • Construction chuyen.le@maybank-kimeng.com.vn
(91) 22 6623 2605 • Oil & Gas
Desmond CH’NG, ACA Ramon ADVIENTO
anubhav@maybank-ke.co.in (63) 2 849 8845
(603) 2297 8680 NGUYEN Thi Ngan Tuyen, Head of Retail Research
• Metal & Mining • Capital Goods • Property ramon_adviento@maybank-atrke.com (84) 8 44 555 888 x 8081
desmond.chng@maybank-ib.com
• Mining tuyen.nguyen@maybank-kimeng.com.vn
• Banking & Finance Urmil SHAH
• Food & Beverage • Oil&Gas • Banking
LIAW Thong Jung
(91) 22 6623 2606 urmil@maybank-ke.co.in THAILAND
(603) 2297 8688 tjliaw@maybank-ib.com • Technology • Media
Maria LAPIZ Head of Institutional Research TRINH Thi Ngoc Diep
• Oil & Gas - Regional • Shipping Dir (66) 2257 0250 | (66) 2658 6300 ext 1399 (84) 4 44 555 888 x 8208
Vishal MODI
Maria.L@maybank-ke.co.th diep.trinh@maybank-kimeng.com.vn
ONG Chee Ting, CA (91) 22 6623 2607 vishal@maybank-ke.co.in • Technology • Utilities • Construction
• Consumer / Materials
(603) 2297 8678 ct.ong@maybank-ib.com • Banking & Financials
• Plantations - Regional TRUONG Quang Binh
SINGAPORE Jesada TECHAHUSDIN, CFA
(66) 2658 6300 ext 1394 (84) 4 44 555 888 x 8087
Mohshin AZIZ
NG Wee Siang Head of Research Jesada.T@maybank-ke.co.th binh.truong@maybank-kimeng.com.vn
(603) 2297 8692 mohshin.aziz@maybank-ib.com
(65) 6432 1467 ngweesiang@maybank-ke.com.sg • Financial Services • Rubber plantation • Tyres and Tubes • Oil&Gas
• Aviation - Regional • Petrochem
• Banking & Finance
YIN Shao Yang, CPA Kittisorn PRUITIPAT, CFA, FRM PHAM Nhat Bich
(603) 2297 8916 samuel.y@maybank-ib.com Gregory YAP (66) 2658 6300 ext 1395 (84) 8 44 555 888 x 8083
• Gaming – Regional • Media (65) 6432 1450 gyap@maybank-ke.com.sg Kittisorn.P@maybank-ke.co.th bich.pham@maybank-kimeng.com.vn
• SMID Caps – Regional • Real Estate • Consumer • Manufacturing • Fishery
TAN Chi Wei, CFA • Technology & Manufacturing • Telcos
(603) 2297 8690 chiwei.t@maybank-ib.com Sittichai DUANGRATTANACHAYA NGUYEN Thi Sony Tra Mi
YEAK Chee Keong, CFA
• Power • Telcos (66) 2658 6300 ext 1393 (84) 8 44 555 888 x 8084
(65) 6432 1460
yeakcheekeong@maybank-ke.com.sg Sittichai.D@maybank-ke.co.th mi.nguyen@maybank-kimeng.com.vn
WONG Wei Sum, CFA • Services Sector • Port operation • Pharmaceutical
• Offshore & Marine
(603) 2297 8679 weisum@maybank-ib.com • Food & Beverage
• Property & REITs Derrick HENG Sukit UDOMSIRIKUL Head of Retail Research
(65) 6432 1446 derrickheng@maybank-ke.com.sg (66) 2658 6300 ext 5090
LEE Yen Ling • Transport (Land, Shipping & Aviation)
(603) 2297 8691 lee.yl@maybank-ib.com Sukit.u@maybank-ke.co.th
• Building Materials • Glove Producers WEI Bin
(65) 6432 1455 weibin@maybank-ke.com.sg Mayuree CHOWVIKRAN
CHAI Li Shin • Commodity • Logistics • S-chips (66) 2658 6300 ext 1440
(603) 2297 8684 lishin.c@maybank-ib.com mayuree.c@maybank-ke.co.th
• Plantation • Construction & Infrastructure John CHEONG • Strategy
(65) 6432 1461 johncheong@maybank-ke.com.sg
Ivan YAP • Small & Mid Caps • Healthcare
(603) 2297 8612 ivan.yap@maybank-ib.com Padon VANNARAT
• Automotive (66) 2658 6300 ext 1450
TRUONG Thanh Hang Padon.v@maybank-ke.co.th
(65) 6432 1451 hang.truong@maybank-ke.com.sg • Strategy
LEE Cheng Hooi Regional Chartist • Small & Mid Caps
(603) 2297 8694
chenghooi.lee@maybank-ib.com
Tee Sze Chiah Head of Retail Research
(603) 2297 6858 szechiah.t@maybank-ib.com

September 4, 2014 15
Marcventures Holdings

APPENDIX I: TERMS FOR PROVISION OF REPORT, DISCLAIMERS AND DISCLOSURES

DISCLAIMERS
This research report is prepared for general circulation and for information purposes only and under no circumstances should it be considered or intended as
an offer to sell or a solicitation of an offer to buy the securities referred to herein. Investors should note that values of such securities, if any, may fluctuate
and that each security’s price or value may rise or fall. Opinions or recommendations contained herein are in form of technical ratings and fundamental
ratings. Technical ratings may differ from fundamental ratings as technical valuations apply different methodologies and are purely based on price and
volume-related information extracted from the relevant jurisdiction’s stock exchange in the equity analysis. Accordingly, investors’ returns may be less than
the original sum invested. Past performance is not necessarily a guide to future performance. This report is not intended to provide personal investment
advice and does not take into account the specific investment objectives, the financial situation and the particular needs of persons who may receive or read
this report. Investors should therefore seek financial, legal and other advice regarding the appropriateness of investing in any securities or the investment
strategies discussed or recommended in this report.
The information contained herein has been obtained from sources believed to be reliable but such sources have not been independently verified by Maybank
Investment Bank Berhad, its subsidiary and affiliates (collectively, “MKE”) and consequently no representation is made as to the accuracy or completeness of
this report by MKE and it should not be relied upon as such. Accordingly, MKE and its officers, directors, associates, connected parties and/or employees
(collectively, “Representatives”) shall not be liable for any direct, indirect or consequential losses or damages that may arise from the use or reliance of this
report. Any information, opinions or recommendations contained herein are subject to change at any time, without prior notice.
This report may contain forward looking statements which are often but not always identified by the use of words such as “anticipate”, “believe”, “estimate”,
“intend”, “plan”, “expect”, “forecast”, “predict” and “project” and statements that an event or result “may”, “will”, “can”, “should”, “could” or “might”
occur or be achieved and other similar expressions. Such forward looking statements are based on assumptions made and information currently available to us
and are subject to certain risks and uncertainties that could cause the actual results to differ materially from those expressed in any forward looking
statements. Readers are cautioned not to place undue relevance on these forward-looking statements. MKE expressly disclaims any obligation to update or
revise any such forward looking statements to reflect new information, events or circumstances after the date of this publication or to reflect the occurrence
of unanticipated events.
MKE and its officers, directors and employees, including persons involved in the preparation or issuance of this report, may, to the extent permitted by law,
from time to time participate or invest in financing transactions with the issuer(s) of the securities mentioned in this report, perform services for or solicit
business from such issuers, and/or have a position or holding, or other material interest, or effect transactions, in such securities or options thereon, or other
investments related thereto. In addition, it may make markets in the securities mentioned in the material presented in this report. MKE may, to the extent
permitted by law, act upon or use the information presented herein, or the research or analysis on which they are based, before the material is published.
One or more directors, officers and/or employees of MKE may be a director of the issuers of the securities mentioned in this report.
This report is prepared for the use of MKE’s clients and may not be reproduced, altered in any way, transmitted to, copied or distributed to any other party in
whole or in part in any form or manner without the prior express written consent of MKE and MKE and its Representatives accepts no liability whatsoever for
the actions of third parties in this respect.
This report is not directed to or intended for distribution to or use by any person or entity who is a citizen or resident of or located in any locality, state,
country or other jurisdiction where such distribution, publication, availability or use would be contrary to law or regulation. This report is for distribution only
under such circumstances as may be permitted by applicable law. The securities described herein may not be eligible for sale in all jurisdictions or to certain
categories of investors. Without prejudice to the foregoing, the reader is to note that additional disclaimers, warnings or qualifications may apply based on
geographical location of the person or entity receiving this report.
Malaysia
Opinions or recommendations contained herein are in the form of technical ratings and fundamental ratings. Technical ratings may differ from fundamental
ratings as technical valuations apply different methodologies and are purely based on price and volume-related information extracted from Bursa Malaysia
Securities Berhad in the equity analysis.
Singapore
This report has been produced as of the date hereof and the information herein may be subject to change. Maybank Kim Eng Research Pte. Ltd. (“Maybank
KERPL”) in Singapore has no obligation to update such information for any recipient. For distribution in Singapore, recipients of this report are to contact
Maybank KERPL in Singapore in respect of any matters arising from, or in connection with, this report. If the recipient of this report is not an accredited
investor, expert investor or institutional investor (as defined under Section 4A of the Singapore Securities and Futures Act), Maybank KERPL shall be legally
liable for the contents of this report, with such liability being limited to the extent (if any) as permitted by law.
Thailand
The disclosure of the survey result of the Thai Institute of Directors Association (“IOD”) regarding corporate governance is made pursuant to the policy of the
Office of the Securities and Exchange Commission. The survey of the IOD is based on the information of a company listed on the Stock Exchange of Thailand
and the market for Alternative Investment disclosed to the public and able to be accessed by a general public investor. The result, therefore, is from the
perspective of a third party. It is not an evaluation of operation and is not based on inside information. The survey result is as of the date appearing in the
Corporate Governance Report of Thai Listed Companies. As a result, the survey may be changed after that date. Maybank Kim Eng Securities (Thailand) Public
Company Limited (“MBKET”) does not confirm nor certify the accuracy of such survey result.
Except as specifically permitted, no part of this presentation may be reproduced or distributed in any manner without the prior written permission of MBKET.
MBKET accepts no liability whatsoever for the actions of third parties in this respect.
US
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Authority and is for Informational Purposes only. This document is not intended for distribution to anyone defined as a Retail Client under the Financial
Services and Markets Act 2000 within the UK. Any inclusion of a third party link is for the recipients convenience only, and that the firm does not take any
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September 4, 2014 16
Marcventures Holdings

DISCLOSURES
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Malaysia: This report is issued and distributed in Malaysia by Maybank Investment Bank Berhad (15938-H) which is a Participating Organization of Bursa
Malaysia Berhad and a holder of Capital Markets and Services License issued by the Securities Commission in Malaysia. Singapore: This material is issued and
distributed in Singapore by Maybank KERPL (Co. Reg No 197201256N) which is regulated by the Monetary Authority of Singapore. Indonesia: PT Kim Eng
Securities (“PTKES”) (Reg. No. KEP-251/PM/1992) is a member of the Indonesia Stock Exchange and is regulated by the BAPEPAM LK. Thailand: MBKET (Reg.
No.0107545000314) is a member of the Stock Exchange of Thailand and is regulated by the Ministry of Finance and the Securities and Exchange Commission.
Philippines: Maybank ATRKES (Reg. No.01-2004-00019) is a member of the Philippines Stock Exchange and is regulated by the Securities and Exchange
Commission. Vietnam: Maybank Kim Eng Securities JSC (License Number: 71/UBCK-GP) is licensed under the State Securities Commission of Vietnam.Hong
Kong: KESHK (Central Entity No AAD284) is regulated by the Securities and Futures Commission. India: Kim Eng Securities India Private Limited (“KESI”) is a
participant of the National Stock Exchange of India Limited (Reg No: INF/INB 231452435) and the Bombay Stock Exchange (Reg. No. INF/INB 011452431) and is
regulated by Securities and Exchange Board of India. KESI is also registered with SEBI as Category 1 Merchant Banker (Reg. No. INM 000011708) US: Maybank
KESUSA is a member of/ and is authorized and regulated by the FINRA – Broker ID 27861. UK: Maybank KESL (Reg No 2377538) is authorized and regulated by
the Financial Services Authority.

Disclosure of Interest
Malaysia: MKE and its Representatives may from time to time have positions or be materially interested in the securities referred to herein and may further
act as market maker or may have assumed an underwriting commitment or deal with such securities and may also perform or seek to perform investment
banking services, advisory and other services for or relating to those companies.
Singapore: As of 4 September 2014, Maybank KERPL and the covering analyst do not have any interest in any companies recommended in this research report.
Thailand: MBKET may have a business relationship with or may possibly be an issuer of derivative warrants on the securities /companies mentioned in the
research report. Therefore, Investors should exercise their own judgment before making any investment decisions. MBKET, its associates, directors, connected
parties and/or employees may from time to time have interests and/or underwriting commitments in the securities mentioned in this report.
Hong Kong: KESHK may have financial interests in relation to an issuer or a new listing applicant referred to as defined by the requirements under Paragraph
16.5(a) of the Hong Kong Code of Conduct for Persons Licensed by or Registered with the Securities and Futures Commission.
As of 4 September 2014, KESHK and the authoring analyst do not have any interest in any companies recommended in this research report.
MKE may have, within the last three years, served as manager or co-manager of a public offering of securities for, or currently may make a primary market in
issues of, any or all of the entities mentioned in this report or may be providing, or have provided within the previous 12 months, significant advice or
investment services in relation to the investment concerned or a related investment and may receive compensation for the services provided from the
companies covered in this report.

OTHERS
Analyst Certification of Independence
The views expressed in this research report accurately reflect the analyst’s personal views about any and all of the subject securities or issuers; and no part of
the research analyst’s compensation was, is or will be, directly or indirectly, related to the specific recommendations or views expressed in the report.

Reminder
Structured securities are complex instruments, typically involve a high degree of risk and are intended for sale only to sophisticated investors who are capable
of understanding and assuming the risks involved. The market value of any structured security may be affected by changes in economic, financial and political
factors (including, but not limited to, spot and forward interest and exchange rates), time to maturity, market conditions and volatility and the credit quality
of any issuer or reference issuer. Any investor interested in purchasing a structured product should conduct its own analysis of the product and consult with its
own professional advisers as to the risks involved in making such a purchase.

No part of this material may be copied, photocopied or duplicated in any form by any means or redistributed without the prior consent of MKE.

Definition of Ratings
Maybank Kim Eng Research uses the following rating system
BUY Return is expected to be above 10% in the next 12 months (excluding dividends)
HOLD Return is expected to be between - 10% to +10% in the next 12 months (excluding dividends)
SELL Return is expected to be below -10% in the next 12 months (excluding dividends)

Applicability of Ratings
The respective analyst maintains a coverage universe of stocks, the list of which may be adjusted according to needs. Investment ratings are only
applicable to the stocks which form part of the coverage universe. Reports on companies which are not part of the coverage do not carry investment
ratings as we do not actively follow developments in these companies.

September 4, 2014 17
Marcventures Holdings
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