OPPORTUNITY TO INVEST IN A PORTFOLIO OF

WELL POSITIONED LEISURE ASSETS

PROJECT SAPPHIRE

INVESTOR TEASER

January 2020

STRICTLY CONFIDENTIAL – NOT FOR ONWARD DISTRIBUTION

Any use of this material without specific permission of Asia Securities Advisors Pvt Ltd Sri Lanka is strictly prohibited
Tourist arrivals to Sri Lanka are again being re-positioned to grow rapidly after the Easter Sunday attacks

. . . with the steady growth in tourist arrivals which is set to rebound

There is significant further room to grow…
rapidly post the Easter Sunday terrorist attacks . . .

Millions Millions Tourist Arrivals in Millions

2018 Tourist Arrivals in Regional Peer Countries
50 3.0
38 2.7x
40
2.5
30 26
19 2.0
20 16 16
10 1.5
10 7 4 6
2 2.1 2.3 2.1 2.3
1.0 1.8 2.1 1.9
- 1.5
1.3

Malaysia
Vietnam
India

Cambodia
Philippines

Laos

Thailand
Indonesia
Sri Lanka

Singapore
0.5 0.9 1.0
0.7
-
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020E 2021E

. . . supported by the global recognition as a leading . . . and strengthened by the recently launched post Easter and “So Sri
tourist destination. . . Lanka” campaigns to promote tourism

“Northern Sri Lanka “Sri Lanka selected as “Sri Lanka listed as the ▪ Post Easter campaigns will target key source markets,
listed among the 8 best one of the best places best destination to visit including India & China
regions to explore in to visit in 2020” in 2019” ➢ 32 flights per week from 11 destinations in India
2020” to Sri Lanka
➢ Minimum travel packages starting from $200 per
person for 2 nights
“Sri Lanka tops Nat Geo “Sri Lanka recognized “Sri Lanka receognised
Traveller UK’s Coolest among the 10 Hottest as Asia’s leading ▪ “So Sri Lanka” promotes geographic compactness,
Destinations for 2018” travel destinations of adventure destination locational & cultural diversity
2017” in 2017”
▪ Robust digital marketing strategy will target millennial
travellers
Source: SLTDA, Sri Lanka travel planner and national tourism sites
1
Sapphire has 452 rooms in the 3,3+ star category range in Sri Lanka’s top tourism destinations

A strategic presence. . . . . . in three key cities that accounted for

>40% of total foreign guest nights in 2018

Kandy Total Room Nights Split

122 rooms

Chilaw
14 acres

Colombo
158 rooms
Tangalle
9.5 acres
Kandy Galle Colombo Other

Galle
172 rooms

Source: Company Analysis, Sri Lanka Tourism Development Authority, Asia Securities analysis
2
The strategic positions of operating hotels has enabled the properties to maintain margins >30%

Revenue EBITDA EBITDA Margin Occupancy

Colombo
5.00 100%
4.00 80%

US$ million
▪ Ocean views; right across the beach 3.00 60%
▪ Located <7 km from CBD 2.00 40%
▪ Ranked among the top 3 mid-range hotels in Colombo based on 1.00 20%
TripAdvisor
- 0%
Dec-18 Dec-19

Kandy
4.00 100%

3.00 80%

US$ million
▪ Located in Central Kandy, within walking distance from
60%
main heritage sites 2.00
40%
▪ Lake views 1.00 20%
▪ One of Kandy’s top 10 hotels, based on TripAdvisor
- 0%
Dec-18 Dec-19

Galle
8.00 100%

6.00 80%

US$ million
▪ Located on the beachfront, direct access
60%
▪ Located <6 km from Galle Fort, the main heritage site 4.00
40%
in Galle 2.00 20%
▪ One of Galle’s top 10 hotels, based on TripAdvisor
- 0%
Dec-18 Dec-19

Source: Company Analysis, Asia Securities analysis, Sri Lanka Tourism Development Authority
Note: (1) The decline in revenue, EBITDA and occupancy rates in 2019 is due to the Easter Sunday terrorist attacks 3
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