Gaming:Key takeaways from G2E Asia 2009

Please read carefully the important disclosures at the end of this publication.

SECTOR UPDATE

12 June 2009

OVERWEIGHT Maintained

Gaming

Key takeaways from G2E Asia 2009

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GIO

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Soh May Yee +60 (3) 2084 9964 - [email protected]

• A modest G2E Asia 2009. Last week, we attended the Global Gaming Expo (G2E) and conference Asia at the Venetian Macau. This year’s event was on a noticeably smaller scale than the previous two years, probably the effect of poorer economic conditions and travel concerns sparked by the recent outbreak of the A(H1N1) flu. Visitor arrivals and participation at the conference were also less this time around.

• Informative conference. The three-day conference addressed various gaming-related topics ranging from gaming operations within the region to the opportunities and challenges faced by casino operators in the current economic climate. All in all, we found the conference enlightening as the main topics discussed were relevant not only to the Macau and Asian gaming industry but also to the current economic climate. We came away from the conference still upbeat about Macau’s long-term prospects as Asia’s premier gaming hub. But we do acknowledge that short-term concerns such as visa restrictions and the poor economic environment are likely to cast a cloud over the near term.

• An eye-opening expo. We drew three key conclusions from this year’s expo: i) Although the crowd was noticeably smaller, there was still a good mix of representation from global and regional gaming equipment manufacturers. ii) We were pleasantly surprised by the strong emphasis on Asian-related themes and features in most of the machines on display. iii) Electronic gaming machines appear to be the new wave in gaming, going by their increasing presence on both the expo floors and our site visits to several casinos.

• Maintain OVERWEIGHT. Our earnings forecasts for all gaming stocks remain intact. We continue to OVERWEIGHT the regional gaming sector and retain our preference for the Malaysian gaming plays. Our top pick is Resorts World (RWB) but we also like its parent, Genting Bhd. Both stocks remain OUTPERFORMs but with higher target prices as we now remove the discount to their SOP values to reflect the rising risk appetite and expectations of stronger newsflow on potential regional M&As following the group’s subscription to MGM bonds and equity over the past month. While we like Genting Singapore for its unique exposure to the republic’s duopolistic gaming hub, we reiterate our UNDERPERFORM call due to its expensive valuations. We see a cheaper indirect entry into Singapore’s gaming and tourism potential via Genting Bhd. In the regional space, Galaxy remains a NEUTRAL as many of the impending short-term positives have already been priced in and there is still a risk of a medium-term funding gap. Meanwhile, we continue to like B-Toto for the possibility of a bumper dividend. Dreamgate remains an UNDERPERFORM with the potential de-rating catalysts being i) lacklustre sales, ii) slower-than-expected deployment of its machines, iii) further margin compression, and iii) more delays in the take-off of its maiden casino venture.

Sector comparisons

Target Core 3-yr EPS P/BV ROE Div

Bloomberg Price price Mkt cap P/E (x) CAGR (x) (%) yield (%)

ticker Recom. (Local) (Local) (US$ m) CY2009 CY2010 (%) CY2009 CY2009 CY2009

B Toto BST MK O 5.00 5.65 1,925 15.4 15.0 8.7 14.9 107.1 6.7

Dreamgate DCB MK U 0.20 0.11

50 25.2 15.1 10.5 1.0 8.0 0.0

Galaxy 27 HK N 2.21 1.71 1,123 nm 61.9 184.4 1.2 9.8 0.0

Genting GENT MK O 5.90 7.90 6,227 19.8 19.6 (0.2) 1.7 6.9 1.2

Genting Singapore GTGS SP U 0.68 0.51 4,524 nm nm 291.2 2.9 (19.4) 0.0

Resorts World RNB MK O 2.90 3.65 4,877 12.4 12.0 1.1 1.6 14.5 2.5

Simple average

18.2 24.7 82.6 3.9 21.1 1.7

O = Outperform, N = Neutral, U = Underperform, TB = Trading Buy and TS = Trading Sell Source: Company, CIMB/CIMB-GK Research

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G2E Asia 2009

Last week, we attended the Global Gaming Expo (G2E) and conference Asia at the Venetian Macau. This year’s event was on a noticeably smaller scale than the previous two years, probably the effect of poorer economic conditions and travel concerns sparked by the recent outbreak of the A(H1N1) flu. This year’s expo played host to >130 exhibitors from 20 countries compared to the >175 participants featured last year. Notwithstanding that, the expo still showcased a wide range of gaming-related equipment ranging from the latest slot machines to electronic table games, multi-station systems, gaming software solutions and gaming supplies among others. Visitor arrivals and participation at the conference were also less this time around.

Conference highlights

An informative conference. Besides the expo, G2E Asia also featured a three-day multi-track conference programme. Two day-long forums brought together industry experts to share their views on various gaming-related topics ranging from gaming operations within the region to the opportunities and challenges faced by casino operators in the current economic climate. A full day was also dedicated to a multi-track conference session, discussing gaming-related topics such as casino design, gaming floor and marketing strategies among others. A highlight of the conference was the opening ceremony which featured a keynote address by MD of Sociedade de Jogos de Macau (SJM), (880 HK, Not Rated) Dr. Stanley Ho.

Key takeaways. All in all, we found the conference enlightening as the main topics discussed were relevant not only to the Macau and Asian gaming industry but also to the current economic climate. We came away from the conference still upbeat about Macau’s long-term prospects as Asia’s premier gaming hub. But we do acknowledge that short-term concerns such as visa restrictions and the poor economic environment are likely to cast a cloud over the near term. We summarise below the highlights from the conference:

• Singapore IRs to welcome the year of the tiger? The Asian gaming industry still holds the most explosive growth potential for new players and markets. Singapore appears next in line to ride on this promising potential with the impending revelation of its two integrated resorts (IR) by year-end and early 2010. While both casino operators have kept mum on their exact opening dates, we gather that these establishments could time their opening to coincide with 2010’s Chinese New Year which incidentally falls on 14 February. The coming Lunar New Year marks the start of the Year of the Tiger which is believed to be an ideal date. Despite increasing regional competition, we concur with the view of the majority of the industry experts that Macau’s gaming potential will not be severely threatened by Singapore’s upcoming IRs given the different appeal and target markets.

• More regional liberalisation to come? The proposed and impending liberalisation of new gaming markets within the Southeast Asia (SEA) region appears to be progressing at different paces. The Philippines has huge potential to grow, thanks to strong domestic demand while Japan, Taiwan and South Korea are touted to be promising upcoming markets. Although casino gaming is illegal in Indonesia, discussions are ongoing with the government on possible casino liberalisation for Bintan island. But given political sensitivities and the current economic downturn, it could be a while before these new markets come onstream.

• Macau – still promising over the longer term. Although the Macau gaming sector appears to be consolidating, industry players still believe that it is a very young market with huge growth potential. From a supply perspective, this year is likely to only see the opening of L’Arc in Sep 09 after the opening of City of Dreams last week. This is a stark contrast to the 8-10 casinos opened during 2006-08. While Galaxy (27 HK, Neutral) has made a conscious decision to slow down the construction of its Mega Resort, other operators appear to have stopped construction works too. This could be a blessing in disguise, allowing the market to digest the new supply (Figure 1).

• Scope to promote non-gaming offerings. Industry experts still see opportunities for Macau to increase its visitor arrivals, largely due to its favourable location. It is believed that more than 1bn people are within a three-hour flight from Macau. As low-cost carrier terminals mushroom within the region, the challenge is keeping the visitors longer. There has been an uptick on this front from under one day to 1½ days over the past four years.

• Mixed outlook on relaxation of visa restriction. On the visa restriction issue, industry players are still hopeful of a gradual relaxation in an attempt to bring in the

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required critical mass over the longer term. Currently, Macau is still largely reliant on mainland Chinese visitors. Visitors from mainland China, Taiwan and Hong Kong are estimated to account for >80% of its annual visitor arrivals. Some panellists believe that the relaxation could take place as soon as this year while others appear less hopeful for a short-term relaxation.

• Economic conditions a more worrying factor. While we agree that visa restriction has been a debilitating factor, we do not think that it is the key force behind the downtrend in Macau’s gaming revenue. Notably, we agree with some quarters who consider the general economic environment to be a bigger culprit.

• Mass market – where the growth potential lies. Although Macau gaming is currently dominated by the VIP segment, many see tremendous growth potential for the mass market segment. Notably, the large-scale IRs along the Cotai strip, to a certain extent, aim to capture a slice of this promising pie. This revelation is not entirely a surprise given the less volatile nature and higher margins associated with the grind segment. But with an influx of new supply expected over the next few years, the challenge is capturing a loyal customer base. Marketing experts believe in maintaining a quality database campaign but acknowledge the associated challenges resulting largely from tracking deficiencies. Notwithstanding this, almost all casino operators have invested in their own loyalty card programmes.

• Slot machines still in second place. The slot machine segment has been growing encouragingly, particularly in the smaller gaming destinations like Vietnam and Cambodia. While the market can continue to expect growth in this segment, the exponential growth seen in the past is unlikely to be repeated. Having said that, many see promising growth potential in the electronic gaming variants.

Figure 1: Ongoing construction progress

L’Arc at Peninsula Encore @ Wynn

Source: CIMB/CIMB-GK Research

Galaxy Mega Resort Las Vegas Sands’ almost completed works at site 5 and 6


Observations from expo

A more modest scale… The third edition of the G2E Asia brought together 136 global manufacturers and equipment suppliers from 20 different countries. More than 30% were new participants. Despite the smaller scale of this year’s expo, the event

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still showcased a wide range of gaming-related equipment, ranging from the latest slot machines to electronic table games, multi-station systems, gaming software solutions and gaming supplies among others.

… and turnout as well. During our numerous visits to the exhibition floor in between the conference sessions, we saw pockets of visitors at the various booths being briefed on the exhibitors’ latest products while a handful were trying out some of the slot machines on display. Our checks with several exhibitors revealed that this year’s turnout was noticeably poorer. This is not entirely surprising given that most casino operators are likely to delay capex plans in view of the uncertain economic conditions. The flu outbreak could have also disrupted travelling plans.

Slot machines with Asian flavours. Even at the booths of the western-based equipment manufacturers, we were pleasantly surprised by the strong emphasis on Asian-related themes and features in most of the slot machines on display. Similar to previous years, this year’s show saw good representation from Asian-based players, particularly those from Macau, Taiwan and Japan.

Figure 2: A glimpse of the expo floor

VIP delegates being taken on a tour Attendees listening in


Figure 3: Key slot machine suppliers well represented

Aristocrat of Australia IGT of USA

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Bally Technologies of USA WMS of USA


Electronic games increasingly popular. We also noticed that there was a good display of electronic gaming machines during our stroll around the exhibition floors (Figure 4). During our site visits around several casinos in Macau, we also saw a noticeable number of electronic gaming variants. Such anecdotal evidence appears to point towards the fast-growing popularity of the electronic gaming variants. It appears that RWB (RNB MK, Outperform) may have placed its bets on the right spot when it took a 10% stake in gaming patent company, Walker Digital.

Figure 4: The increasing emphasis on electronic gaming machines

Electronic blackjack Electronic sicbo


Dreamgate showing its range of product offerings. Dreamgate (DCB MK, Underperform) was well represented at the expo as it took one of the largest individual spaces available. This time around, it largely showcased its own proprietary games under its in-house machine brands of RGBGames and Elaut. Some of these machines, notably the Shanghai Night and The Legend of Sparta, were winners in the Asia’s GEM Expo Manila in Apr 09. Under RGB Abbiati, Dreamgate also displayed its range of gaming chips and table top solutions and high-end roulette wheels. Having been a participant of this expo over the past four years, Dreamgate concurred that this year’s event did draw a slightly smaller crowd. But the quality of the crowd was largely intact as there was good representation by the top decision-making executives from casino operators in Macau and the Philippines.

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Figure 5: Dreamgate’s presence

A display of its slot machines Casino equipment under RGB Abbiati


Valuation and recommendation

An informative event ... All in all, we found the conference enlightening as the main topics discussed were relevant not only to the Macau and Asian gaming industry but also to the current economic climate. We came away from the conference still upbeat about Macau’s long-term prospects as Asia’s premier gaming hub. But we do acknowledge that short-term concerns such as visa restrictions and the poor economic environment are likely to cast a cloud over the near term.

… with some new findings. We took away several interesting snippets i) The upcoming Singapore IRs could time their opening to coincide with 2010’s Chinese New Year which incidentally falls on 14 February. The coming Lunar New Year marks the start of the Year of the Tiger which is believed to be an ideal date. ii) Mixed views were presented on the expected timing of the relaxation of visa restrictions, from as early as mid-year to it being an unlikely near-term event. iii) While we agree that visa restriction was a cause for the downtrend in Macau’s gaming revenue, we do not think that it is the key force. We agree with some views that the general economic conditions were a bigger culprit.

An eye-opening expo. We drew three key conclusions from this year’s expo: i) Although the crowd was noticeably smaller, there was still a good mix of representation from global and regional gaming equipment manufacturers. ii) We were pleasantly surprised by the strong emphasis on Asian-related themes and features in most of the machines on display. iii) Electronic gaming machines appear to be the new wave in gaming, going by their increasing presence on both the expo floors and our site visits to several casinos.

Maintain OVERWEIGHT. Our earnings forecasts for all gaming stocks remain intact. We continue to OVERWEIGHT the regional gaming sector and retain our preference for the Malaysian gaming plays.

RWB – top gaming pick. Taking our cue from our recent market upgrade and the rising risk appetite, we are raising our target price for RWB from RM3.30 to RM3.65 as we now remove the discount (10% previously) to its SOP value. RWB remains an OUTPERFORM and our top pick in our gaming universe for its i) resilient and defensive domestic gaming exposure, ii) huge cash hoard in excess of RM4.8bn that could mean higher dividends and/or regional M&A opportunities. Share price triggers remain its solid gaming operations, huge cash pile, higher dividends potential regional M&A activities and maiden inclusion into the FBM KLCI benchmark come 6 July.

Genting remains an OUTPERFORM. Following the upgrade in our target price for RWB together with the removal of its SOP discount to reflect the rising risk appetite and expectations of stronger newsflow on potential regional M&As following the group’s subscription to MGM bonds and equity over the past month, our end-CY09 target price for Genting Bhd (GENT MK, Outperform) is bumped up to RM7.90 from RM7.20. We continue to rate Genting an OUTPERFORM, with potential share price catalysts being i) potential M&As, ii) a possible strong opening for the Sentosa IR, and iii) a higher weighting in the market benchmark after the migration from KLCI to the FBM KLCI on 6 July.

Genting Singapore remains an UNDERPERFORM. Genting Singapore remains an UNDERPERFORM based on an unchanged sum-of-parts RNAV-based target price of

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S$0.51. Although we like the stock’s unique exposure to Singapore’s duopolistic gaming hub, valuations remain expensive. Potential de-rating catalysts include i) prolonged weakness over in the UK and ii) weaker-than-expected regional tourism activities. Investors seeking for a cheaper, indirect entry into Singapore gaming and tourism potential should consider its parent, Genting Bhd.

Galaxy remains a NEUTRAL. Galaxy Entertainment (27 HK, Neutral) remains a NEUTRAL with an unchanged target price of HK$1.71 as we believe that the market has priced in many of the impending re-rating catalysts, i.e. relaxation of visa restrictions and commission caps. Furthermore, there is still a risk of a medium-term funding gap.

Also like NFO player, B-Toto. In the NFO sub-gaming sector, we continue to like B-Toto (BST MK, Outperform) as the likelihood of bumper dividends makes the stock a worthwhile short-term bet. Our end-CY09 target price remains intact at RM5.65, still based on a 5% discount to its DDM value. We reiterate our OUTPERFORM call, premised on the potential share price catalysts of i) a bumper dividend, ii) normalisation of luck factor, and iii) market share gains.

Dreamgate remains an UNDERPERFORM. We continue to rate this small-cap gaming player an UNDERPERFORM with an unchanged end-CY09 target price of RM0.11, which we continue to peg to a 50% discount to its larger-cap peers. Potential key de-rating catalysts are i) lacklustre sales, ii) slower-than-expected deployment of its machines, ii) further margin compression, and iii) more delays in the take-off of its maiden casino venture.

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COMPANY BRIEFS…

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QUICK TAKES

12 June 2009

CIMB Research Report

OUTPERFORM Maintained Genting Bhd

RM5.90 Target: RM7.90

A regional giant in the making Mkt.Cap: RM21,853m/US$6,227m

Gaming

MA

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GENT MK / GENT.KL Soh May Yee +60 (3) 2084 9964 – [email protected]

Still anchored by Resorts, for now

For Genting Bhd, the operational resilience seen at its subsidiary, Resorts World (RWB) (RNB MK, Outperform) will continue to spearhead the group’s near-term earnings prospects. Given that i) Genting Highlands is still one of the cheapest regional holiday destinations, and ii) RWB continues to emphasise yield management, its sustained patronage even in a weak economic climate is not overly surprising. Meanwhile, its UK operations will remain unexciting. The focus for Genting Singapore (GS) (GTGS SP, Underperform) will, therefore, be on the soft opening of its Sentosa integrated resort (IR), slated for 1Q2010. S$425m of a secured loan facility was drawn down recently for the project, adding to the S$4.67bn GS has committed to the project as at end-Mar 09. Plantation earnings should pick up in the coming quarters due to stronger FFB production and higher CPO prices. Power earnings are also expected to improve after 2008’s record coal prices and one-off windfall tax payment.


Genting remains an OUTPERFORM with a higher target price. We make no change to our FY09-11 earnings forecasts. However, we are removing our SOP discount to reflect the rising risk appetite and expectations of stronger newsflow on potential regional M&As following the group’s subscription to MGM bonds and equity over the past month. This together with the upgrade in our target price for RWB, bumps up our end-CY09 target price for Genting from RM7.20 to RM7.90. We continue to rate Genting an OUTPERFORM, with the potential share price catalysts being i) potential M&As, ii) a possible strong opening for the Sentosa IR, and iii) a higher weighting in the market benchmark after the migration from KLCI to the FBM KLCI on 6 July.

Financial summary

Price chart

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3.5

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Volume 10m (R.H.Scale) Genting Bhd

FYE Dec 2007 2008 2009F 2010F 2011F

Revenue (RM m) 8,483.8 9,082.5 8,257.8 10,640.7 12,557.8

EBITDA (RM m) 3,714.0 3,471.8 3,379.1 3,631.0 4,694.8

EBITDA margins (%) 43.8% 38.2% 40.9% 34.1% 37.4%

Pretax profit (RM m) 3,224.5 1,734.8 2,292.4 2,698.3 3,679.2

Net profit (RM m) 1,988.9 569.3 888.4 1,112.3 1,693.0

EPS (sen) 53.7 15.4 24.0 30.0 45.7

EPS growth (%) 32.2% (71.4%) 56.0% 25.2% 52.2%

P/E (x) 11.0 38.4 24.6 19.6 12.9

Core EPS (sen) 43.1 46.0 29.8 30.0 45.7

Core EPS growth (%) 29.5% 6.5% (35.2%) 0.8% 52.2%

Core P/E (x) 13.7 12.8 19.8 19.6 12.9

Gross DPS (sen) 37.0 7.0 7.2 7.2 7.2

Dividend yield (%) 6.3% 1.2% 1.2% 1.2% 1.2%

P/BV (x) 1.8 1.8 1.7 1.6 1.4

ROE (%) 16.8% 4.6% 6.9% 8.2% 11.4%

Net cash per share (RM) 1.15 0.97 1.01 1.06 1.39

P/FCFE (x) 26.2 38.0 8.8 8.7 19.5

EV/EBITDA (x) 7.1 7.7 8.0 7.6 5.9

% change in EPS estimates - - -

CIMB/Consensus (x) 0.94 0.79 1.01

Source: Bloomberg Source: Company, CIMB Research, Bloomberg

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Figure 1: Genting’s sum-of-parts computation

RNAV

(RM)

Listed Assets

Resorts World 10,310.1

Asia tic Deve lopment 2,319.9

Genting Singapore 5,967.4

18,597.4

Book value of listed assets 1,418.7

Excess from listed assets 17,178.7

NPV of Other Assets

Management fees 3,112.3

Genting Sanyen Power 1,589.9 Oil and gas 3,137.2

Wisma Genting 240.0

8,079.4

Book value of other assets 1,800.0

Excess from other assets 6,279.4

FY09E company book value 5,729.6

Net Asset Value (RMm) 29,187.6

Total no. o f shares (m) 3,703.8NAV per share (RM) 7.90

Source: Company, CIMB Research

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QUICK TAKES

12 June 2009

CIMB Research Report

OUTPERFORM Maintained Resorts World Bhd

RM2.90 Target: RM3.65

A safer bet Mkt.Cap: RM17,116m/US$4,877m

Gaming

MA

LA

YS

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RNB MK / RWBW.KL Soh May Yee +60 (3) 2084 9964 – [email protected]

Operational resilience + cash

The outlook for Resorts World’s (RWB) core operations appears robust and relatively detached from the weak macro environment. Its continuous emphasis on yield management appears to be the key driving force behind the still-strong domestic punting interest. Despite the weak economic climate, we continue to believe that visitor arrivals to Genting Highlands will remain strong as it is one of the cheapest regional holiday destinations. RWB’s cash hoard has expanded to RM4.86bn (RM0.82/share) as at end-Mar 09, which positions it well for regional M&As. Its subscription to MGM Mirage’s (MGM US, Not Rated) notes last month and the Genting group’s recent investment in a direct 3.2% equity stake in MGM could, in our opinion, signal the start of a working relationship that may pave way for a potential JV or alliance over the longer term. Also, there is room for RWB to step up its capital management initiatives given its solid cash coffers.


Maintain OUTPERFORM with a higher TP. We retain our FY09-11 earnings forecasts. Taking our cue from our recent market upgrade and the rising risk appetite, we are raising our target price for RWB from RM3.30 to RM3.65 as we now remove the discount (10% previously) to its SOP value. RWB remains an OUTPERFORM and our top pick in our gaming universe for its i) resilient and defensive domestic gaming exposure, ii) huge cash hoard that could mean higher dividends and/or regional M&A opportunities. Potential share price triggers remain its solid gaming operations, its cash pile, higher dividends, potential regional M&A activities and maiden inclusion in the FBM KLCI benchmark come 6 July.

Financial summary

Price chart

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Volume 100m (R.H.Scale) Resorts World Bhd

FYE Dec 2007 2008 2009F 2010F 2011F

Revenue (RM m) 4,352.3 4,886.7 4,798.2 4,858.8 4,931.3

EBITDA (RM m) 1,759.6 2,036.2 1,969.0 1,981.3 2,003.6

EBITDA margins (%) 40.4% 41.7% 41.0% 40.8% 40.6%

Pretax profit (RM m) 1,912.1 1,127.0 1,810.4 1,894.4 1,924.3

Net profit (RM m) 1,555.7 634.4 1,358.2 1,421.2 1,443.6

EPS (sen) 26.7 10.8 23.0 24.1 24.5

EPS growth (%) 64.5% (59.5%) 112.8% 4.6% 1.6%

P/E (x) 10.9 26.8 12.6 12.0 11.9

Core EPS (sen) 19.5 23.8 23.4 24.1 24.5

Core EPS growth (%) 20.3% 22.0% (1.7%) 2.9% 1.6%

Core P/E (x) 14.9 12.2 12.4 12.0 11.9

FD core EPS (sen) 19.5 23.6 23.3 23.9 24.5

FD core P/E (x) 14.9 12.3 12.5 12.1 11.9

Gross DPS (sen) 6.4 7.0 7.2 7.6 7.6

Dividend yield (%) 2.2% 2.4% 2.5% 2.6% 2.6%

P/BV (x) 2.1 2.1 1.6 1.5 1.4

ROE (%) 21.5% 7.7% 14.5% 12.9% 12.0%

Net cash per share (RM) 0.49 0.77 1.10 1.25 1.41

P/FCFE (x) 9.5 9.5 7.6 14.0 13.6

EV/EBITDA (x) 8.0 6.1 5.4 4.9 4.4

% change in EPS estimates - - -

CIMB/Consensus (x) 1.13 1.16 1.13

Source: Bloomberg Source: Company, CIMB Research, Bloomberg

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Figure 1: Resorts World’s SOP computations

No. shares Interest RM (m)

NPV of core gaming operations 13,850.5

Star Cruises (S$) 7,294.4 19.9% 365.6

Estimated net cash @ end FY09 6,488.6

Other non-operating assets 963.5

Total RNAV 21,668.1

Enlarged no. of shares 5,901.8

Target price 3.65

Source: Company, CIMB Research

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The term “CIMB” shall denote where applicable the relevant entity distributing the report in that particular jurisdiction where mentioned specifically below shall be a CIMB Group Sdn Bhd’s affiliates, subsidiaries and related companies.

(i) As of 11 June 2009, CIMB has a proprietary position in the following securities in this report:

(a) Genting Bhd, Genting CW, Resorts World, Resorts World CW, Genting Singapore, Berjaya Sports Toto, Berjaya Sports Toto Warrant.

(ii) As of 12 June 2009, the analyst, Soh May Yee who prepared this report, has an interest in the securities in the following company or companies covered or recommended in this report:

(a) -.

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This publication is strictly confidential and is for private circulation only to clients of CIMB. This publication is being supplied to you strictly on the basis that it will remain confidential. No part of this material may be (i) copied, photocopied, duplicated, stored or reproduced in any form by any means or (ii) redistributed or passed on, directly or indirectly, to any other person in whole or in part, for any purpose without the prior written consent of CIMB.

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RECOMMENDATION FRAMEWORK #1*

STOCK RECOMMENDATIONS SECTOR RECOMMENDATIONS

OUTPERFORM: The stock's total return is expected to exceed a relevant benchmark's total return by 5% or more over the next 12 months.

OVERWEIGHT: The industry, as defined by the analyst's coverage universe, is expected to outperform the relevant primary market index over the next 12 months.

NEUTRAL: The stock's total return is expected to be within +/-5% of a relevant benchmark's total return.

NEUTRAL: The industry, as defined by the analyst's coverage universe, is expected to perform in line with the relevant primary market index over the next 12 months.

UNDERPERFORM: The stock's total return is expected to be below a relevant benchmark's total return by 5% or more over the next 12 months.

UNDERWEIGHT: The industry, as defined by the analyst's coverage universe, is expected to underperform the relevant primary market index over the next 12 months.

TRADING BUY: The stock's total return is expected to exceed a relevant benchmark's total return by 5% or more over the next 3 months.

TRADING BUY: The industry, as defined by the analyst's coverage universe, is expected to outperform the relevant primary market index over the next 3 months.

TRADING SELL: The stock's total return is expected to be below a relevant benchmark's total return by 5% or more over the next 3 months.

TRADING SELL: The industry, as defined by the analyst's coverage universe, is expected to underperform the relevant primary market index over the next 3 months.

* This framework only applies to stocks listed on the Singapore Stock Exchange, Bursa Malaysia, Stock Exchange of Thailand and Jakarta Stock Exchange. Occasionally, it is permitted for the total expected returns to be temporarily outside the prescribed ranges due to extreme market volatility or other justifiable company or industry-specific reasons.

CIMB-GK Research Pte Ltd (Co. Reg. No. 198701620M)

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RECOMMENDATION FRAMEWORK #2 **

STOCK RECOMMENDATIONS SECTOR RECOMMENDATIONS

OUTPERFORM: Expected positive total returns of 15% or more over the next 12 months.

OVERWEIGHT: The industry, as defined by the analyst's coverage universe, has a high number of stocks that are expected to have total returns of +15% or better over the next 12 months.

NEUTRAL: Expected total returns of between -15% and +15% over the next 12 months.

NEUTRAL: The industry, as defined by the analyst's coverage universe, has either (i) an equal number of stocks that are expected to have total returns of +15% (or better) or -15% (or worse), or (ii) stocks that are predominantly expected to have total returns that will range from +15% to -15%; both over the next 12 months.

UNDERPERFORM: Expected negative total returns of 15% or more over the next 12 months.

UNDERWEIGHT: The industry, as defined by the analyst's coverage universe, has a high number of stocks that are expected to have total returns of -15% or worse over the next 12 months.

TRADING BUY: Expected positive total returns of 15% or more over the next 3 months.

TRADING BUY: The industry, as defined by the analyst's coverage universe, has a high number of stocks that are expected to have total returns of +15% or better over the next 3 months.

TRADING SELL: Expected negative total returns of 15% or more over the next 3 months.

TRADING SELL: The industry, as defined by the analyst's coverage universe, has a high number of stocks that are expected to have total returns of -15% or worse over the next 3 months.

** This framework only applies to stocks listed on the Hong Kong Stock Exchange and China listings on the Singapore Stock Exchange. Occasionally, it is permitted for the total expected returns to be temporarily outside the prescribed ranges due to extreme market volatility or other justifiable company or industry-specific reasons.

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