Strong long-term absolute performance

Aberdeen New Thai Investment Trust 17 December 2018 Review
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Aberdeen New Thai Investment Trust

Strong long-term absolute performance

Investment trusts

17 December 2018

Price

562.0p

Market cap

£93.3m

AUM

£107.5m

629.5

NAV*

631.3p

Discount to NAV

11.0%

NAV**

641.6p

Discount to NAV

12.4%

*Excluding income. **Including income. As at 13 December 2018.

Yield

2.0%

Ordinary shares in issue

16.6m

Code

ANW

Primary exchange

LSE

AIC sector

Country Specialists: Asia Pacific

Benchmark

Stock Exchange of Thailand Index

Share price/discount performance

Three-year performance vs index

52-week high/low

596.0p

521.0p

705.8p

615.5p

**Including income.

Gearing

Gross*

6.5%

Net*

5.1%

*As at 31 October 2018.

Analysts

Helena Coles

+44 (0)20 3681 2522

Gavin Wood

+44 (0)20 3681 2503

Aberdeen New Thai Investment Trust is a research client of Edison Investment Research Limited

Aberdeen New Thai Investment Trust (ANW) was launched in 1989 and is the only Thailand-focused investment trust listed in London. It aims to deliver a high level of long-term capital growth through investing in a relatively concentrated portfolio of quality companies, following a disciplined bottom-up approach. The Thai equity market has been relatively resilient this year compared to MSCI AC Asia ex-Japan and MSCI Emerging Markets, reflecting Thailand’s solid economic fundamentals. The manager believes Thai companies are particularly well-placed to benefit from the fast-growing neighbouring economies of Cambodia, Laos, Myanmar and Vietnam, and ANW offers some indirect exposure to these markets. The trust has delivered strong absolute returns over the past 10 years; an annualised NAV total return of 20.5%. Recent returns, however, have lagged the benchmark and the shares have traded at a persistently wide discount to cum-income NAV. In May 2018, the board announced a package of changes to address these issues which, if successful, should support further narrowing of the discount.

12 months ending

Share price
(%)

NAV
(%)

SET Index
(%)

MSCI AC Asia ex-Japan (%)

MSCI World
(%)

30/11/14

26.3

22.1

22.9

11.0

14.5

30/11/15

(19.7)

(16.1)

(16.1)

(6.8)

3.9

30/11/16

31.6

27.7

39.0

29.5

25.0

30/11/17

18.5

18.1

16.9

25.1

14.8

30/11/18

2.3

3.6

5.0

(3.8)

6.8

Source: Thomson Datastream. Note: All % on a total return basis in GBP.

Investment strategy: Bottom-up, detailed analysis

The manager follows a disciplined bottom-up approach to find high-quality companies that are well-managed with strong balance sheets, yet are attractively valued. The well-resourced Aberdeen Standard Asian team includes four Bangkok-based investment managers to support an intensive approach involving over 1,000 company meetings each year, and detailed fundamental analysis.

Market outlook: Supportive regional growth

The Stock Exchange of Thailand (SET) index peaked in late-January 2018 and has since retreated around 11%, significantly less than the c 23% and c 24% experienced by MSCI AC Asia ex-Japan and MSCI Emerging Markets indices respectively. This reflects Thailand’s relatively resilient economy. Economic growth for Thailand, its neighbouring countries and the other ASEAN-5 countries are expected to be much superior to global growth, which should help underpin long-term performance prospects for Thai equities.

Valuation: Scope for discount

ANW’s current 12.4% discount to cum-income NAV is slightly below its three-year average of 15.6% and at the bottom of the 12.4% to 21.3% over this period. The board recently announced a package of changes aiming to improve returns to shareholders, without affecting the investment process. Should these be successful, there is scope for the discount to tighten further over time.

Exhibit 1: Trust at a glance

Investment objective and fund background

Recent developments

ANW’s investment objective is to provide a high level of long-term, above-average capital growth through investment in Thailand. The trust holds a concentrated portfolio of equities listed on the Stock Exchange of Thailand (SET). Constructed through bottom-up stock selection, ANW’s portfolio is diversified across a broad range of industries, with exposures not linked to SET index allocations.

12 October 2018: Interim results to 31 August 2018. NAV total return -0.6%; SET index total return -2.2%.Interim dividend of 7.00p declared.

2 June 2018: Results of AGM. All resolutions passed.

2 May 2018: Annual results to 28 February 2018. NAV total return +17.7%; SET index total return +21.6%. The company declared an ordinary dividend of 11.10p per share for FY18.

2 May 2018: Board proposes changes to improve returns for shareholders.

Forthcoming

Capital structure

Fund details

AGM

June 2019

Ongoing charges

1.26%

Group

AAM Asia

Annual results

May2019

Net gearing

5.1%

Manager

Asian Equities Team

Year end

28 February

Annual mgmt fee

0.9%

Address

Bow Bells House, 1 Bread Street, London EC4M 9HH

Dividend paid

Interim and final

Performance fee

None

Launch date

December 1989

Trust life

Indefinite (subject to vote)

Phone

+44 (0)500 000 040

Continuation vote

No – see page 7

Loan facilities

£15m multi-currency facility

Website

www.newthai-trust.co.uk

Dividend policy and history (financial years)

Share buyback policy and history (financial years)

From FY18 the board introduced an interim dividend. Dividends payable June/July and November.

Renewed annually, the trust has authority to repurchase up to 14.99% and allot up to 10% of issued share capital.

Shareholder base (as at 19 November 2018)

Portfolio exposure by sector (excluding cash, as at 31 October 2018)

Top 10 holdings (as at 31 October 2018)

Portfolio weight %

Company

Sector

31 October 2018

31 October 2017*

Advanced Information

Telecoms

4.9

5.4

Central Pattana Public

Property development

4.8

4.4

Home Product Center

Commerce

4.6

5.2

AEON Thana Sinsap

Finance & securities

4.4

3.8

Bangkok Insurance

Insurance

4.3

4.9

Siam Cement

Construction materials

4.0

5.0

Kasikornbank

Banking

3.9

5.4

PTT Exploration and Production

Energy & utilities

3.8

3.5

Land and Houses

Property development

3.5

N/A

Thai Stanley Electric

Automotive

3.4

N/A

Top 10 (% of holdings)

41.6

45.2

Source: Aberdeen New Thai Investment Trust, Edison Investment Research, Bloomberg, Morningstar, Thomson. Note: *N/A where not in October 2017 top 10.

Market outlook: Resilience and growth

Thailand’s equity market peaked in late January-2018 as abundant liquidity conditions and quantitative easing started to reverse. The Stock Exchange of Thailand (SET) index has fallen around 14% in US$ terms since its peak, which is relatively modest compared to the c 22% and c 24% falls experienced by MSCI Asia ex-Japan and MSCI Emerging Markets respectively over the same period (Thailand is a constituent in both indices). This reflects Thailand’s relatively resilient economy, which has a healthy current account surplus, good domestic liquidity and low inflation. Exports and tourism have been the pillars of the Thai economy for some time. Following the end of a one-year official mourning period for the passing of King Bhumibol in the second half of 2017, growth has broadened out to consumption, private and public spending as economic activity normalised. As shown in Exhibit 2 (RHS), the IMF forecasts the ASEAN-5 countries (Thailand, Indonesia, Malaysia, the Philippines and Vietnam) to achieve a compound annual growth of 5.2% pa over 2018-23. This is significantly faster than the 3.6% and 1.8% growth forecasts for the world and advanced economies respectively, which should support the performance of Thai equities over the medium to long term. As shown in Exhibit 2 (LHS), the SET index has significantly outperformed the MSCI AC Asia ex-Japan and MSCI World indices over the past 10 years.

Exhibit 2: Thailand market performance and GDP growth versus world

Thai market performance vs Asia and world over 10 years (rebased)

Average % real GDP growth – ASEAN-5 vs world and advanced economies

Source: Thomson Datastream, IMF October 2018 World Economic Outlook, Edison Investment Research

Fund profile: Thailand specialist, regional exposure

Launched in 1989, ANW is the only LSE-listed investment trust specialising in Thai equities. The trust’s objective is to deliver a high level of long-term, above average capital growth through investing in Thailand. The manager follows a bottom-up and rigorous approach to stock selection. The fund also provides investors with indirect exposure to Thailand’s fast-growing neighbours, including Cambodia, Laos, Myanmar and Vietnam (CLMV) as Thai companies are significant investors, with increasing presence in these countries.

In May 2018, after consultation with the manager, the board announced, a number of changes to help improve returns for shareholders while maintaining the long-standing investment process:

exposure to small caps to be gradually increased;

introduced permission to invest in unlisted companies ahead of a planned initial public offering;

introduction of an interim dividend, the first paid in November 2018;

more proactive use of gearing; at end-October 2018, ANW had increased net gearing of 5.1% (it was 1.5% at the 28 February 2018 year-end); and

the management fee was reduced to 0.9% (previously 1.0%).

The fund manager: Asian team

The manager’s view: Solid economic and market outlook

The manager believes the Thai economy is well-placed to grow strongly over the medium and long term. While an unwelcome development, the investment team thinks Thailand should be reasonably resilient to the effects of the US-China trade dispute, estimating a potential 0.5–1.0pp reduction in 2019 GDP growth. There may, however, also be positive effects for the economy over time, including more foreign direct investment (FDI) flows into Thailand and its neighbours (which are its fastest growing trading partners). China has been very successful in attracting FDI for some decades, and increased tariffs and geopolitical risks could encourage investors to look for geographical diversification.

The manager is also optimistic that Thai public spending will accelerate, and is forecasting it to grow 6.1% in 2018 and 7.7% in 2019. The government has an ambitious 20-year vision for Thailand’s economy, which includes significant investment in infrastructure, digital technology and healthcare. These plans have been embedded into the constitutional framework, designed to help ensure continued implementation even when the government changes. The team thinks the government’s clear commitment to large-scale infrastructure projects should also boost private investment, which has been weak over the past few years. The manager forecasts this to grow 3.7% in 2018 and 4.5% in 2019.

An election is expected as early as February 2019. The current military government has been in place since 2014, and in the manager’s view, it has provided Thailand with political stability through a period which saw a change in the monarch, as well as the abscondment of Yingluck Shinawatra (the divisive former prime minister). The team thinks the next government will most likely continue the current government’s policies and remain business-friendly. They believe a successful election could provide a boost to Thailand, lifting an overhang from multiple delayed elections that may have curtailed new FDI commitments, as some investors have been reluctant to make commitments under a temporary military regime.

The manager does not find Thai equities valuations to be compelling at a forward 2018 P/E multiple of around 15x, but views them as relatively attractive as this level is towards the lower end of the ASEAN-5 countries’ range. Furthermore, the manager notes that the equity market is well-supported by an increasingly important domestic investor base, driven by growth in Thailand’s mutual fund industry. Meanwhile, foreign participation is now relatively low following heavy selling earlier in the year.

Asset allocation

Investment process: Bottom-up, quality focused

The manager believes the Thai equity market is not always efficient and, through disciplined bottom-up stock selection, it aims to identify companies that are mispriced relative to their long-term fundamental value. Getting to know companies and managements is an important part of the investment process and the Aberdeen Standard Asian team, which includes four Bangkok-based investment managers, conducts over 1,000 company visits a year. The team firstly looks at a firm’s quality of management, business focus, balance sheet strength and corporate governance record. A rigorous assessment of valuation is then undertaken prior to making an investment. The portfolio is not constrained by benchmark weightings, and the c 40 holdings reflect the manager’s highest-conviction ideas. Risk is primarily mitigated through in-depth knowledge of the investee companies, and ensuring the portfolio is sufficiently diversified across sectors. Exposure to any single stock is limited to 10% of net assets and gearing is permitted up to 15% of net assets.

Current portfolio positioning

As shown in Exhibit 3, ANW is well-diversified across 14 sectors and over the year to end-October 2018, the exposures changed relatively little. The most significant sector increase is in energy & utilities (+2.4pp), making this the largest exposure in the portfolio at 16.2%. The manager has started to build a position in oil conglomerate PTT, marking a significant change of view on the company. Historically, ANW has not owned PTT, as the company has a complex holding company structure, with a broad mix of businesses, and the manager felt this structure lacked transparency, while the company has also been adversely exposed to regulatory changes (such as fuel price-capping to protect consumers). More recent developments, however, have led the team to reassess PTT’s investment case. These include a potential restructuring and listing of the company’s non-core businesses. The manager believes this could improve the transparency of the group’s operations and unlock considerable value, as investors tend to ascribe higher values to simpler business structures. Furthermore, the team thinks the government is less likely to impose caps on PTT’s product prices in the future, as the state’s Oil Fund is now sufficiently sizeable to be able to subsidise fuel costs directly when necessary. PTT currently trades on a P/E multiple of 10x compared to the SET index multiple of 15x and the manager believes there is scope for a re-rating over time.

Exhibit 3: Portfolio sector exposure vs SET index benchmark (% unless stated)

Portfolio end-
October 2018

Portfolio end-
October 2017

Change
(pp)

Index
weight

Active weight
vs index (pp)

Trust weight/ index weight (x)

Energy & utilities

16.2

13.8

2.4

22.7

(6.5)

0.7

Banking

14.0

16.9

(2.9)

13.3

0.7

1.1

Property development

11.2

9.3

1.9

6.8

4.4

1.6

Construction materials

10.6

10.4

0.2

4.7

5.9

2.3

Insurance

7.3

9.1

(1.8)

0.9

6.4

8.1

Automotive

6.4

4.3

2.1

0.5

5.9

12.8

Commerce

6.4

5.2

1.2

9.0

(2.6)

0.7

Finance & securities

5.7

4.7

1.0

2.5

3.2

2.3

Food & beverages

5.7

3.6

2.1

5.6

0.1

1.0

Info. & comms. technology

4.9

5.4

(0.5)

8.1

(3.2)

0.6

Healthcare services

4.6

4.3

0.3

4.8

(0.2)

1.0

Electronic components

2.4

3.3

(0.9)

1.1

1.3

2.2

Property fund

2.1

1.8

0.3

2.2

(0.1)

1.0

Packaging

1.1

1.8

(0.7)

0.4

0.7

2.8

Chemicals

0.0

2.2

(2.2)

0.0

0.0

N/A

Media & publishing

0.0

2.6

(2.6)

1.2

(1.2)

0.0

Transportation & logistics

0.0

0.0

0.0

8.4

(8.4)

0.0

Other

0.0

0.0

0.0

7.8

(7.8)

0.0

Cash

1.4

1.3

0.1

1.4

100.0

100.0

100.0

Source: Aberdeen New Thai Investment Trust, Edison Investment Research

ANW’s automotive sector exposure has increased by 2.1pp to 6.4%. Auto sales in Thailand have been moribund for several years as the previous government’s first-car policy front-end loaded demand at the time and contributed to high levels of household debt. These schemes have now run off and falling household debt as a percentage of GDP, combined with robust consumer confidence, is supporting new autos purchases. The manager has added two new positions: Krungthai Car Rent & Lease; and Interhides, a manufacturer of leather for car seats, also benefiting from outsourcing from China, where operators may not meet the higher environmental standards attained by the company. The manager also added to the food & beverages sector (+2.1pp), largely through participation as a cornerstone investor in the listing of Osotspa, a long-established manufacturer of energy drinks. A new management team has been brought in from Unilever Thailand to drive a growth strategy that includes expansions in Myanmar, Cambodia and Laos. The manager believes Thailand’s neighbouring countries of Cambodia, Laos, Myanmar and Vietnam (CLMV) offer exciting prospects for Thai companies, which are often already well-known, and can bring experienced management and access to capital.

The manager has trimmed positions in the banking sector (-2.9pp), which is facing pressure on fee income, as the growth in online banking has led to compressed margins and the elimination of transactions fees. The media & publishing sector (-2.6pp) has also suffered from pressures as advertising revenues have shifted to online channels. The manager has used this sector as a source of funds, and as at end-October 2018, ANW had no exposure to media & publishing.

Performance: Strong long-term absolute gains

As shown in Exhibit 4 (RHS), ANW has delivered strong absolute gains over the long-term; a 20.5% annualised NAV total return over 10 years. Although this lags the SET index, it significantly outperforms the MSCI AC Asia ex-Japan and MSCI World index returns (see Exhibit 5). ANW aims to generate capital growth through investing in a relatively concentrated portfolio of high-quality companies. This means its performance can differ considerably from the index, while its risk profile has tended to be lower. Over three years to end-September 2018, ANW has been less volatile than the SET index (as measured by its beta of 0.87, where the index beta is 1.00).

Exhibit 4: Investment trust performance to 30 November 2018

Price, NAV and benchmark total return performance, one-year rebased

Price, NAV and benchmark total return performance (%)

Source: Thomson Datastream, Edison Investment Research. Note: Three, five and 10-year performance figures annualised.

Exhibit 5: Share price and NAV total return performance, relative to indices (%)

 

One month

Three months

Six months

One year

Three years

Five years

10 years

Price relative to SET Index

(0.1)

(2.2)

0.2

(2.5)

(6.5)

(8.0)

(16.1)

NAV relative to SET Index

(0.2)

(0.5)

1.3

(1.3)

(8.4)

(9.0)

(13.8)

Price relative to MSCI AC Asia ex-Japan

(5.9)

0.7

6.3

6.4

2.4

0.4

76.3

NAV relative to MSCI AC Asia ex-Japan

(6.0)

2.4

7.5

7.8

0.3

(0.7)

81.2

Price relative to MSCI World

(2.0)

(1.2)

(5.0)

(4.2)

4.1

(11.2)

80.0

NAV relative to MSCI World

(2.2)

0.5

(3.9)

(3.0)

1.9

(12.2)

84.9

Source: Thomson Datastream, Edison Investment Research. Note: Data to end-November 2018. Geometric calculation.

Exhibit 6: NAV total return performance relative to benchmark over three years

Source: Thomson Datastream, Edison Investment Research

Discount: Recent changes may help narrow discount

ANW’s current discount to cum-income NAV of 12.4% is narrower than the three-year average of 15.6% and at the bottom of the 12.4% to 21.3% range over that period. The trust does not have a fixed life; however, under its Articles of Association, a special resolution to wind up the company will be proposed at the following AGM if the shares have traded at an average discount to cum-income NAV in excess of 15% for the 12 weeks preceding the financial year-end. The board is mindful of the discount and the changes proposed in May 2018, all of which were approved by shareholders at the AGM in June 2018, are designed to help tighten the trust’s discount.

Exhibit 7: Share price discount to NAV (including income) over three years (%)

Source: Thomson Datastream, Edison Investment Research

Capital structure and fees

ANW is a conventional investment trust with one class of shares; 16.6m ordinary shares are currently in issue. During the six months ended 31 August 2018, the company repurchased and cancelled 0.3m shares (2017: 0.5m shares) at a total cost of £1.4m (2017: £2.8m). ANW had a £10m revolving credit facility with Scotiabank Ireland, which was repaid in October 2018 and replaced with a larger £15m three-year multi-currency facility with Industrial Bank of China. As at end-October 2018, £5.65m was drawn down, representing gross gearing of 6.5%.

As part of the recent changes implemented by the board, the annual management fee payable to AAM Asia, a wholly owned subsidiary of Standard Life Aberdeen, has been reduced to 0.9% (previously 1.0%). The fee and interest charges are allocated in the proportion of 75:25 to capital and revenue accounts, respectively (previously 100% allocated to the revenue account). The fee reduction was backdated to 1 March 2018, and for the six months to end-August 2018 the ongoing charges declined to 1.26%, from 1.35% in the 12 months to end-February 2018.

Dividend policy and record

Historically, ANW paid an annual dividend in June/July. The recent changes announced by the board to allocate 75% of management fees and interest costs to the capital account helps increase the earnings available to pay dividends, and an interim dividend has been introduced, payable in November. For the six months to end-August 2018, ANW’s revenue return was 15.10p per share, which partly reflects the board’s decision to charge 75% of management and interest fees to capital. A maiden interim dividend of 7.00p per share was declared. In FY18, ANW’s revenue return was 11.12p per share and an annual dividend of 11.10p per share was paid.

Peer group comparison

Exhibit 8 shows a peer group of closed-end Asia Pacific country specialist funds with a market capitalisation above £50m. The group has a broad range of country mandates and therefore direct comparisons may be less relevant. ANW is the smallest trust within this group. In terms of NAV total return performance, the trust ranks first over 10 years and absolute returns are substantially higher than the peer average. The trust ranks third over one year, fourth over three years, and ninth over five years. ANW’s historic dividend yield ranks second and its discount to cum-fair NAV ranks third.

Exhibit 8: AIC country specialists: Asia Pacific peer group as at 14 December 2018*

% unless stated

Market cap £m

NAV TR
1 year

NAV TR
3 year

NAV TR
5 year

NAV TR
10 year

Discount (cum-fair)

Ongoing charge

Perf.
fee

Net gearing

Dividend yield (%)

Aberdeen New Thai

93.3

3.6

56.2

60.1

561.4

(12.6)

1.26

No

105

2.0

Aberdeen New India

263.5

4.7

56.5

126.2

329.2

(14.4)

1.20

No

104

0.8

Fidelity China Special Situations

1,087.1

(12.2)

47.1

110.3

(12.1)

1.11

No

128

1.8

India Capital Growth

94.4

(20.6)

34.7

120.5

156.6

(14.1)

2.21

No

100

0.0

JPMorgan Chinese

173.8

(16.4)

47.3

62.2

253.0

(13.6)

1.34

No

119

1.5

JPMorgan Indian

702.7

(3.1)

43.5

109.9

246.2

(14.4)

1.20

No

100

0.5

Vietnam Enterprise

1,010.1

1.2

114.3

170.6

235.4

(12.8)

2.23

No

100

0.0

VietNam Holding

129.7

(1.5)

50.0

109.0

252.9

(13.0)

2.19

Yes

100

0.0

VinaCapital Vietnam Opp Fund

634.8

4.2

91.4

122.9

229.6

(16.0)

2.34

Yes

100

1.5

Weiss Korea Opportunity

124.9

(17.1)

15.4

51.5

(1.3)

1.89

No

100

2.3

Simple average

431.4

(5.7)

55.6

104.3

283.0

(12.4)

1.70

106

1.0

Rank

10

3

4

9

1

3

7

3

2

Source: Morningstar, Edison Investment Research. Note: *performance data to 30 November 2018. TR = total return. Net gearing is total assets less cash and equivalents as a percentage of net assets.

The board

The board consists of four independent non-executive directors. Chairman Nicolas Smith was appointed director in March 2013 and assumed his current role in June 2013. The other directors are Clare Dobie (appointed December 2013 – senior independent director June 2016), Andy Pomfret (appointed September 2014) and Sarah MacAulay (appointed December 2016).

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This report has been commissioned by Aberdeen New Thai Investment Trust and prepared and issued by Edison, in consideration of a fee payable by Aberdeen New Thai Investment Trust. Edison Investment Research standard fees are £49,500 pa for the production and broad dissemination of a detailed note (Outlook) following by regular (typically quarterly) update notes. Fees are paid upfront in cash without recourse. Edison may seek additional fees for the provision of roadshows and related IR services for the client but does not get remunerated for any investment banking services. We never take payment in stock, options or warrants for any of our services.

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Neither this document and associated email (together, the "Communication") constitutes or form part of any offer for sale or subscription of, or solicitation of any offer to buy or subscribe for, any securities, nor shall it or any part of it form the basis of, or be relied on in connection with, any contract or commitment whatsoever. Any decision to purchase shares in the Company in the proposed placing should be made solely on the basis of the information to be contained in the admission document to be published in connection therewith.

This Communication is being distributed in the United Kingdom and is directed only at (i) persons having professional experience in matters relating to investments, i.e. investment professionals within the meaning of Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the "FPO") (ii) high net-worth companies, unincorporated associations or other bodies within the meaning of Article 49 of the FPO and (iii) persons to whom it is otherwise lawful to distribute it. The investment or investment activity to which this document relates is available only to such persons. It is not intended that this document be distributed or passed on, directly or indirectly, to any other class of persons and in any event and under no circumstances should persons of any other description rely on or act upon the contents of this document (nor will such persons be able to purchase shares in the placing).

This Communication is being supplied to you solely for your information and may not be reproduced by, further distributed to or published in whole or in part by, any other person.

United States

The Investment Research is a publication distributed in the United States by Edison Investment Research, Inc. Edison Investment Research, Inc. is registered as an investment adviser with the Securities and Exchange Commission. Edison relies upon the "publishers' exclusion" from the definition of investment adviser under Section 202(a) (11) of the Investment Advisers Act of 1940 and corresponding state securities laws. This report is a bona fide publication of general and regular circulation offering impersonal investment-related advice, not tailored to a specific investment portfolio or the needs of current and/or prospective subscribers. As such, Edison does not offer or provide personal advice and the research provided is for informational purposes only. No mention of a particular security in this report constitutes a recommendation to buy, sell or hold that or any security, or that any particular security, portfolio of securities, transaction or investment strategy is suitable for any specific person.

Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

295 Madison Avenue, 18th Floor

10017, New York

US

Sydney +61 (0)2 8249 8342

Level 4, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

295 Madison Avenue, 18th Floor

10017, New York

US

Sydney +61 (0)2 8249 8342

Level 4, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

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Australia

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New Zealand

The research in this document is intended for New Zealand resident professional financial advisers or brokers (for use in their roles as financial advisers or brokers) and habitual investors who are “wholesale clients” for the purpose of the Financial Advisers Act 2008 (FAA) (as described in sections 5(c) (1)(a), (b) and (c) of the FAA). This is not a solicitation or inducement to buy, sell, subscribe, or underwrite any securities mentioned or in the topic of this document. For the purpose of the FAA, the content of this report is of a general nature, is intended as a source of general information only and is not intended to constitute a recommendation or opinion in relation to acquiring or disposing (including refraining from acquiring or disposing) of securities. The distribution of this document is not a “personalised service” and, to the extent that it contains any financial advice, is intended only as a “class service” provided by Edison within the meaning of the FAA (i.e. without taking into account the particular financial situation or goals of any person). As such, it should not be relied upon in making an investment decision.

United Kingdom

Neither this document and associated email (together, the "Communication") constitutes or form part of any offer for sale or subscription of, or solicitation of any offer to buy or subscribe for, any securities, nor shall it or any part of it form the basis of, or be relied on in connection with, any contract or commitment whatsoever. Any decision to purchase shares in the Company in the proposed placing should be made solely on the basis of the information to be contained in the admission document to be published in connection therewith.

This Communication is being distributed in the United Kingdom and is directed only at (i) persons having professional experience in matters relating to investments, i.e. investment professionals within the meaning of Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the "FPO") (ii) high net-worth companies, unincorporated associations or other bodies within the meaning of Article 49 of the FPO and (iii) persons to whom it is otherwise lawful to distribute it. The investment or investment activity to which this document relates is available only to such persons. It is not intended that this document be distributed or passed on, directly or indirectly, to any other class of persons and in any event and under no circumstances should persons of any other description rely on or act upon the contents of this document (nor will such persons be able to purchase shares in the placing).

This Communication is being supplied to you solely for your information and may not be reproduced by, further distributed to or published in whole or in part by, any other person.

United States

The Investment Research is a publication distributed in the United States by Edison Investment Research, Inc. Edison Investment Research, Inc. is registered as an investment adviser with the Securities and Exchange Commission. Edison relies upon the "publishers' exclusion" from the definition of investment adviser under Section 202(a) (11) of the Investment Advisers Act of 1940 and corresponding state securities laws. This report is a bona fide publication of general and regular circulation offering impersonal investment-related advice, not tailored to a specific investment portfolio or the needs of current and/or prospective subscribers. As such, Edison does not offer or provide personal advice and the research provided is for informational purposes only. No mention of a particular security in this report constitutes a recommendation to buy, sell or hold that or any security, or that any particular security, portfolio of securities, transaction or investment strategy is suitable for any specific person.

Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

295 Madison Avenue, 18th Floor

10017, New York

US

Sydney +61 (0)2 8249 8342

Level 4, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

295 Madison Avenue, 18th Floor

10017, New York

US

Sydney +61 (0)2 8249 8342

Level 4, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

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