Sie sind auf Seite 1von 13

Analysts: Farjad Siddiqui farjad.siddiqui@bracepl.com Sajid Huq sajid.huq@bracepl.

com

Prime Bank Ltd


DSE: PRIMEBANK Bloomberg: PB:BD Company Summary Ticker PRIMEBANK Sector Bank Date of Incorporation 12-Feb-95 Date of Listing 27-Mar-00 Financial Year End December Number of Shares (mn) 779.8 Current Market Capitalization (BDT bn) 34.7 DSE Market Capitalization (BDT bn) 2,607.3 % of DSE Market Capitalization 1.3% 52 Week High (BDT) 99.4 52 Week Low (BDT) 34.1 YTD Return (%) -36.4% 52 Week Volume Traded (BDT mn) 71.3 Trailing EPS (BDT) 4.6 Trailing P/E ratio (x) 8.8 Revenue BDT MM Net Interest Income Investment Income Commissions etc Other income Total revenue 2010 4,648.3 2,717.5 2,718.2 708.5 10,792.5 2011E 2012E 5,059.8 5,744.1 3,498.2 4,610.4 3,289.0 3,946.8 1,033.1 919.8 12,880.1 15,221.2 2011E 36.0% 83.3% 20.5% 2.3% 3.75% 2012E 36.0% 87.4% 21.6% 2.4% 3.28%

Rating: Outperform Dec-2012 Fair Value Estimate: BDT 58 per share January 3, 2012
For the full year 2011, we forecast 12% growth in PBLs loans and advances, year-on-year (YoY), compared to a 32% 2010 loan growth, YoY. Increased government borrowing from banks and Bangladesh Banks contractionary monetary policy are the reasons behind the reduced loan growth rate. We estimate PBL deposits to grow at 28% YoY in 2011: higher than its 4 -year historical average growth rate. Deposit growth is a result of a slowing stock market, attractive rates on deposit products, and declining sales of national savings certificates. PBL is authorized to lend to the government, being a Primary Dealer (PD). To finance governments borrowing needs, PBLs investment in treasuries increased by 94% in 3Q11: represents 24% of deposits being allocated to treasury investments. PBLs aggregate yield from treasuries (including capital gains) is 11.512.0%. Since PBLs weighted average deposit rate is 8.5-9.0%, it earns a spread of 3% from treasuries. PBLs historical loan-to-deposit interest rate spread (IRS) is around 5.1% and even in 2011 IRS is anticipated to be over 5%. As is evident, the near-doubling treasury investments of PBL will imply significant spread erosion. Moreover, reduced 2011 export growth is expected to undermine PBLs 2011 commission income. We anticipate a 2011 growth in commission income 21% YoY: significantly lower than the 2010 growth of 56% YoY. For 2011, we forecast PBL fully diluted earnings per share (EPS) to be BDT 5.15 and Net Asset Value (NAV) per share to be BDT 27.92. Worth noting that since 2010 EPS growth was high, 2011 EPS growth had to account for a higher base from which to grow government borrowing and monetary tightening notwithstanding. Over the next 3 years, we anticipate higher EPS growth rates of 30%, 21%, and 20%, respectively. Gradual monetary policy easing, funds from International Financial Institutions (IFIs), reduced government borrowing, RMG volume growth and remittance recovery are expected to drive EPS growth in 2012-2014. . Rating: We estimate EPS of BDT 6.65 and BVPS of BDT 33.80 for the year ending in December 2012, and set a target price of BDT 58.0 per share with an OUTPERFORM rating. This implies a 29.0% total return on current share price of BDT 45.20 (as on January 2, 2012).

Margin and efficiency (%) Operating efficiency Loan/Deposit ROE ROA Net Interest Margin (%)

2010 34.9% 95.2% 24.9% 2.6% 3.87%

Other Key Indicators (%) 2010 2011E 2012E Loan-Dep Rate Spread % 5.25% 5.30% 5.30% NIM % 3.87% 3.75% 3.28% Cost-to-Income 34.93% 36.00% 36.00% NPL 1.23% 1.15%
Sources: Company Annual Report, BRAC EPL Research

Price performance of PBL in last 12 months


75 800.0

70 65 60
Price, BDT

700.0 600.0 500.0 400.0


Turnover, BDT MM

55 50
45 300.0

40 35 30 Dec-10 Jan-11 Feb-11 Mar-11 Apr-11 May-11 Jun-11 Jul-11 Aug-11 Sep-11 Oct-11 Oct-11 Nov-11 Dec-11

200.0 100.0 .0

Turnover

Price

Sources: Dhaka Stock Exchange

Prime Bank Ltd


(DSE: PRIMEBANK; Bloomberg: PB:BD)

Growth in Loans and Advances (L&A): We expect L&A Growth Rate (GR) of 12% YoY in 2011, lower than 32.12% YoY growth in 2010, and 4-yr CAGR of 26.6% 2007-2010. L&A GR fell on spike in treasury investments as well as M2 contraction by the Bangladesh Bank (BB).
Figure 1: PBL L&A Growth
250,000
L & A (BDT MM)

28% 31%

32%

30% 25%

35% 30% 20%


L & A GR

200,000 150,000
100,000

25%

19% 12%

15% 10%
5%

50,000 0

0%
2011E 2012E
2013E

2007

2008

L & A (BDT MM)

2010

2009

L & A GR (YoY)

Sources: Company Annual Report, BRAC EPL Research

Higher fiscal deficit financing (increased by 36x during the July December 2011 YoY) will curb L&A growth for PDs such as PBL. Meanwhile, BoP pressure and increasing inflation prompted M2 contraction; BB raised repo rates multiple times and allowed large loans very selectively. Mandate to domestic private banks is to enable large loans to agriculture, SME, and exportoriented sectors, but restrict them in case of capital markets, real estate, and retail sectors.
Figure 2: PBL L&A Composition

Staff Loan, Credit Card, 1.13% 0.47%

Retail Loan, 8.36% SME Loan, 5.18%

Corporate Loan, 84.86%


Sources: Company Annual Report (As on 4Q10)

M2 GR fell from 23.5% to 19.6% during March-Sep11, nearing BBs FY12 yearend target of 18%. We anticipate an M2 GR lower than BB-target, as BB tries to mitigate the inflationary effect of a BoP deficit and FX depreciation. Government borrowing is likely to drop in 1H12 with its impact becoming clearer in 2H12on upward revision of energy prices.

Prime Bank Ltd


(DSE: PRIMEBANK; Bloomberg: PB:BD)
Deposit growth and loan-to-deposit ratio (LDR): We anticipate a 28% YoY deposit growth in 2011, higher than 16.6% YoY in 2010, and 20.7% 4-year CAGR. From the demand viewpoint, deposits grew on attractive bank rates, 44% stock market correction, and declining savings certificate sales. From the supply end, deposit mobilization was stepped up to meet PD-mandate of financing government borrowing needs.
Figure 3: PBL Deposits Composition and GR

300,000
Deposits (BDT MM)

35%
29%

250,000 200,000
150,000

22% 17%

15% 10% 5% 0%

100,000
50,000

2007 2008 2009 2010 2011F 2012F 2013F


Current Deposits and other accounts
Savings bank Deposits

Bills payable
Fixed Deposits

Deposit Growth Rate

Sources: Company Annual Report, BRAC EPL Research

Further, we estimate an LDR of 80% in 2011, far lower than 2010 LDR of 95%. This was likely to happen because of 2010s historically high L&A GR; further precipitated by monetary tightening and government borrowing. As sucha projected 80% LDR85% being the LDR upper-limit expected of PDs is testimony to PBLs enduring return on equity (also keeping record deposit mobilization in mind).
Figure 4: PBL Loan-Deposit Ratio (LDR)

100%

95%
90%
LDR

85%
80% 75%

70% 2007 2008 2009


LDR
Sources: Company Annual Report, BRAC EPL Research

2010 2011E 2012E 2013E

Deposits GR

25%

28%

30% 25% 24% 24% 20%

Prime Bank Ltd


(DSE: PRIMEBANK; Bloomberg: PB:BD)
Net Interest Income (NII) Given L&A estimates and deposit outlookwe project 2011 NII GR of 8.85% YoYdropping from that of 2010s 89.5%, and 4-year CAGR of 21.8%. 2011 NIM should also decline to 3.75% from 3.9% in 2010. This was driven by loan diversion on account of high government borrowing.
Figure 5: PBL Net Interest Margin (NIM) Figure 6: PBL Interest Rate Spread and Inflation

5% 4% 4% 3% 3% 2% 2% 1% 1% 0%

5.4% 5.3% 5.2% 5.1% 5.0% 4.9% 4.8% 4.7% 4.6% 4.5% 4.4%

NIM

7% 7%

9%

NIM
Sources: Company Annual Report, BRAC EPL Research

Interest Rate Spread

Average Inflation Rate

Figure 7: PBL Interest Income & NIM

18,000
Interest Income (BDT MM)

16,000 14,000
12,000 3.2%

3.9% 3.2% 2.5% 2.7% 3.5%

4.5% 4.0% 3.5%


3.0%

10,000 8,000
6,000 4,000

2.5% 2.0%
1.5% 1.0%

2,000 0 2006 2007 2008 2009 2010 2011E NIM

0.5% 0.0%

Interest Income

Sources: Company Annual Report, BRAC EPL Research

Non-Interest Income Non-interest income constitutes 61.6% of PBLs expected 2011 EPS. As per 4year average, its proportion rises to 63.5% of Total Operating Income, with investment income at 30.7% and commissions & fees income at 24.3%. Given that IRS and NIMs decline over time, PBLs earnings drivers are diversified. Estimated 2011 non-interest income comprises 60% of Total Operating Income.

NIM (%)

Avg Inflation Rate

10%

10%

12% 10% 8% 7% 7% 6% 4% 2% 0%

Interest Rate Spread

Prime Bank Ltd


(DSE: PRIMEBANK; Bloomberg: PB:BD)
Figure 8: Comparison of Operating Income Composition

100% 80% 60% 40% 20% 0%

6% 26% 32% 36%


Prime Bank

18% 18% 24%

3% 28% 1% 68%

6% 28%

5% 22% 38%

6% 23% 42%

24%
43%

40%
National Bank

35%

29%
Southeast Bank

Islami Bank Eastern Bank NCC Bank Bangladesh

Net interest Income Fee Income

Investment Income Other Income

Source: BRAC EPL Research (As on 2011 E) Figure 9: PBL Operating Income Composition

Non Interest Income (BDT MM)

20,000 15,000
10,000 5,000

2007 2008 2009 2010 2011E 2012E 2013E

Net Interest Income


Income from investments in securities/Shares

Commission, Exchange & Brokerage


Other Income
Sources: Company Annual Report, BRAC EPL Research

We expect 2011 investment income to grow by 28.7% YoY, vs. -19.4% YoY in 2010. In 9M11, treasury earnings rose on 91% higher treasury investments (equaling 23% of total deposits). For 2011, we estimate 85% higher treasury investments YoY. Meanwhile, 2011 portfolio investments income (mainly dividend income) is expected to grow by 47% YoY from its lower base of 2010. In contrast, portfolio income declined by 75% in 2010 YoY. This is on account of decline in trading profit of portfolio shares.

Prime Bank Ltd


(DSE: PRIMEBANK; Bloomberg: PB:BD)
Figure 10: PBL Investment in Treasury

Investment in Treasury (BDT MM)

40,000

26% 18% 19% 16%

23%

25%
20% 20% 18% 15% 10% 5% 0%

30,000
20,000 10,000 0

2007 2008 2009 2010 2011E 2012E 2013E Investment in Treasury (BDT MM) Ratio of Investment to Total Deposit

Sources: Company Annual Report, BRAC EPL Research

Moreover, we estimate 2011 commission income GR of 21% YoY, compared to 2010 GR of 51.67% YoY. The slower growth can be attributable to crowding out effect of government borrowing which reduces trade financing, slower export GR YoY, and dried up income from Merchant Bank Subsidiary.
Figure 11: PBL Commission & Fees Income Growth

5,000 4,500 4,000 3,500 3,000 2,500 2,000 1,500 1,000 500 -

60%
52%

Fees Income (BDT MM)

40%

30% 21% 22% 20% 21% 20% 20% 10%


0%

21%

2007 2008 2009 2010 2011E 2012E 2013E


Commission and Fees income (BDT MM) GR

Sources: Company Annual Report, BRAC EPL Research

Higher cost-to-income ratio in comparison to historical average PBL has maintained an average cost-to-income ratio of 34% in 2007-2010. We expect the cost-to-income ratio to reach 36% by 2013-end. Higher costs are expected to emerge from an increased focus on human capital development, e.g. training, increments in salary and benefits, etc.

Fees Income GR (%)

50%

Investment to Total Deposit

50,000

30%

Prime Bank Ltd


(DSE: PRIMEBANK; Bloomberg: PB:BD)
Figure 12: PBL Operating Efficiency Ratio

37% 36%
Cost to Income (%)

2.8% 2.7% 2.6% 2.5% 2.4% 2.3% 2.2% 2.1% 2.0% 2007 2008 2009 2010 2011E 2012E 2013E Cost to Income Cost to Assets
Cost to Assets (%)

35%
34% 33%

32% 31% 30%

Sources: Company Annual Report, BRAC EPL Research

Projected EPS growth amid macro shocks We estimate EPS of BDT5.15 for the full financial year of 2011, 10.3% higher YoY, against 24.5% YoY EPS GR in 2010. Four-year average EPS GR is 45.4% as of 2010. Year 2011 has been severe on the bank sector. High inflation and government borrowing cut spread income, whereas a 44% stock market correction eroded 2010 portfolio gains. Moreover, trade finance commissions are expected to fall on slowdown in Euro-zone demand. PBLs projected EPS on a three-year horizon is as follows:
Figure 13: PBL EPS (Fully Diluted)

10
EPS (BDT)

8.05 6.65 3.75 4.67 5.15

8 6 4

2 0

1.79

1.60

2007

2008

2009

2010

2011E

2012E

2013E

EPS (BDT)
Sources: Company Annual Report, BRAC EPL Research

A relatively lower 2011 EPS should enable a higher 2012 EPS growth rate. Moreover, macroeconomic fundamentals such as inflation rate and currency risks are expected to ease in 2012, on energy price revisions, lower government borrowing, and BoP support from the IMF. We forecast a 30% YoY growth rate for EPS by end of 2012.

Prime Bank Ltd


(DSE: PRIMEBANK; Bloomberg: PB:BD)
Diverse Earnings Drivers to limit downside on Macro Shocks Below graphs indicate treasury investments GR to NII correlation coefficient (CC) of -0.7 vs. inflation to NII correlation of -0.02. Government borrowing more than inflation cut NII in 4Q11. Meanwhile, inflation to non-interest income CC is 0.17 vs. treasury to non-interest income CC of 0.03. The low CC between treasury investments GR and non-interest income bears out our thesis that PBLs diversified earnings drivers protected their potential downside on high government borrowing.
Figure 14: Inflation and PBL Net Interest Income & Non Interest Income GR

10%
5%

90% 80%
70% 60%

NII GR & Non Interest Income GR NII GR & Non Interest Income GR

100%

Inflation (YoY)

0%
-5%

2007

2008

2009

2010

2011

50% 40%
30% 20%

-10%
-15%

10% 0% Inflation (YoY)


GR in Non Interest Income

-20%

GR in Net Interest Income

Sources: Company Annual Report, BRAC EPL Research Figure 15: PBL Treasury Investment, Net Interest Income & Non Interest Income GR

100%
Treasury Income GR
80%

60% 40%
20% 0%

-20% 2007 2008 2009 2010 2011

100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0%

GR in Treasury Investments
GR in Non Interest Income

GR in Net Interest Income

Sources: Company Annual Report, BRAC EPL Research

Prime Bank Ltd


(DSE: PRIMEBANK; Bloomberg: PB:BD)
Comfortable capital adequacy ratio and relatively high asset quality The table below shows the capital adequacy positions of Prime Bank in 2009 and 2010.
Table 1: Capital Position BDT MM Capital Adequacy Ratio (CAR) Tier I Tier II Total Capital Total Assets including Off Bal Sheet Total Risk Weighted Assets Required Ratio Required Capital Surplus CAR Source: Company Annual Report

2009 9,057 3,112 12,169 169,910 82,710 10% 8,271 3,898 9.81%

2010 15,793 5,692 21,485 242,832 183,747 10% 18,375 3,110 11.69%

The minimum capital adequacy ratio prescribed by Bangladesh Bank is 5% for Tier-I and 10% for total capital. As on 4Q10, PBL exceeds these minimum ratio thresholds with a Tier-I capital ratio of 8.6% and total capital ratio of 11.7%.
Figure 16: PBL Tier I & Tier II Capital

16%
Tier I & Tier II Capital

14% 12%
10%

3.76%

2.00%

2.21%

3.09%

8% 6% 4% 2%
0% 9.50%

8.67%

10.95%

8.60%

2007

2008 Tier I Tier II

2009

2010

Source: Company Annual Report

One of PBLs key managerial strengths lies in its capacity to maintain below industry-average NPL ratios. In 2010, NPL ratio was 1.23% in comparison to 1.29% in 2009. In 2010, aggregate loans and advances increased 32.1%, while classified loans and advances decreased by 19%. We forecast an NPL ratio of 1.15% for 2011, a 6.5% decrease YoY.

Prime Bank Ltd


(DSE: PRIMEBANK; Bloomberg: PB:BD)
Table 2: Asset Quality Asset Quality NPLs to Total Loans and Advances Provision for Classified Loans, BDT MM Source: Company Annual Report 2009 1.29% 631 2010 1.23% 642

Relatively lower profitability We estimate PBLs Return on Equity (ROE) and Return on Assets (ROA) at 20.5% and 2.3%, respectively, for 2011. Corresponding ratios for 2010 are 24.3% and 2.5%. Declining profitability is a result of the squeezed LDR, interest rate spread & NIM, relatively lower net yield from treasury investments, a stock market correction, and relatively lower commission income growth. However, we expect both ROE and ROA to improve in 2012.
Figure 17: PBL ROE & ROA

35% 30.7% 30%


ROE & ROA

31.6% 24.9% 20.9% 20.5% 21.6% 21.4%

25% 20% 15% 10% 5% 0% 2007 2.0%

1.3% 2008

2.5% 2009 ROE

2.6% 2010 ROA

2.3% 2011E

2.3% 2012E

2.3% 2013E

Sources: Company Annual Report, BRAC EPL Research

PBL in comparison to leading frontier market banks A quick look at the largest listed banks in frontier markets such as Vietnam, Sri Lanka, and Nigeria indicates how PBL fares in relation to its frontier market peers.
Table 3: Comparative Analysis of Frontier Market Banks Frontier Market Banks Prime Bank Ltd Vietcom Bank Vietnam Joint Stock Commercial Bank For Industry And Trade Commercial Bank of Ceylon PLC Hatton National Bank PLC First Bank of Nigeria PLC Country Bangladesh Vietnam Vietnam Sri Lanka Sri Lanka Nigeria MCAP (USD MM) P/E P/B ROE ROA

414.89 10.20x 1,930.90 9.95x 1,387.79 9.83x

1.80x 19.17% 2.13% 1.71x 22.20% 1.50% 1.87x 16.80% 1.10% 2.07x 21.00% 2.00% 1.89x 17.20% 1.70% 0.90x 12.90% 1.50%

705.04 11.66x 469.07 12.55x 1,648.18 10.30x

Sources: BRAC EPL Research, Capital IQ (As on Dec 31, 2011)

10

Prime Bank Ltd


(DSE: PRIMEBANK; Bloomberg: PB:BD)

PBL has lower P/E and P/B ratios than the median P/E and P/B ratios for the above six banks. PBL P/E (10.20x) is lower than the median P/E (10.25x), while PBL P/B (1.80x) is lower than the median P/B (1.84x). Profitability ratios RoE and RoA however are lower PBL than the median of the above group. Lower valuation multiples than the median but lower profitability ratios as well indicates markets consensus to reward higher profitability with higher price multiples and vice versa.
Figure 18: Comparative Analysis of Volume to MCAP

26% 24%
22%

Vietcom Bank (Vietnam)

Commercial Bank of Ceylon (Sri Lanka)

ROE (%)

20%
18%

16% 14%
12%

Prime Bank (Bangladesh)


Vietnam Joint Stock Bank (Vietnam)

First Bank of Nigeria (Nigeria) 5.0 6.0 7.0

10% 0.0 1.0 2.0

3.0

4.0

ROA (%) (Size of bubble represents Volume/MCAP)

Sources: BRAC EPL Research, Capital IQ (As on Dec 31, 2011)

Our rating and target price Considering the estimated EPS of BDT 6.65 and BVPS of BDT 33.80 for the year ending December 2012, we set a target price of BDT 58.0 per share with an OUTPERFORM rating. This implies 29% total return on the current share price of BDT 45.20 (as on 2nd January 2012).

11

Prime Bank Ltd


(DSE: PRIMEBANK; Bloomberg: PB:BD)
Balance Sheet, MM BDT Property & Assets: Cash Balance with Other Banks & F.I Money at call Investment Loan & Advance Fixed Assets Other Assets Total Assets Liabilities & Equities: Liabilities: Borrowing from other banks, F.I Deposits Other Liability Total Liabilities Shareholder's Equity: Total Liabilities & Equities 11,397.9 88,083.1 4,327.4 103,808.4 6,708.2 110,516.6 86.5 107,077.3 6,024.2 113,188.0 11,796.7 124,984.7 5,214.5 124,799.3 8,052.4 138,066.2 17,466.6 155,532.8 6,778.8 159,743.1 9,662.9 176,184.8 21,775.7 197,960.5 7,456.7 198,081.5 11,595.4 217,133.6 26,289.7 243,423.3 7,829.6 245,621.0 13,914.5 267,365.1 32,371.6 299,736.7 7,199.9 2,042.6 .0 23,103.1 75,602.5 1,380.1 1,188.5 110,516.6 10,252.3 833.9 .0 19,933.9 89,946.0 1,577.9 2,440.8 124,984.7 9,576.9 1,397.0 .0 22,198.5 118,837.3 1,743.7 1,779.5 155,532.8 16,746.2 1,746.2 .0 39,779.6 133,097.8 4,010.4 2,580.2 197,960.5 17,447.0 1,833.5 .0 41,888.9 173,027.1 5,614.6 3,612.3 243,423.3 25,184.2 1,925.2 .0 46,013.2 216,283.9 6,176.0 4,154.1 299,736.7 2008 2009 2010 2011E 2012E 2013E

Income Statement, MM BDT Interest/Investment Income Interest/profit paid on deposit Net Interest Income Income from investments Commission, Excng & Brok Other Income Total Operating Income Operating Expense Profit Before Provision Provision Pre-Tax Profit Tax Profit After Tax

2008 9,107.9 7,129.6 1,978.3 1,743.7 1,469.0 628.3 5,819.2 1,954.9 3,864.4 1,383.5 2,480.9 1,231.9 1,249.0

2009 10,881.2 8,428.7 2,452.5 3,372.5 1,792.2 673.8 8,290.9 2,934.1 5,356.8 624.0 4,732.8 1,805.8 2,927.0

2010 12,695.4 8,047.1 4,648.3 2,717.5 2,718.2 708.5 10,792.5 3,769.7 7,022.8 551.0 6,471.7 2,829.1 3,642.7

2011E 17,217.8 12,158.0 5,059.8 3,498.2 3,289.0 1,033.1 12,880.1 4,636.8 8,243.3 1,184.6 7,058.7 3,042.3 4,016.4

2012E 20,440.5 14,696.4 5,744.1 4,610.4 3,946.8 919.8 15,221.2 5,479.6 9,741.6 951.6 8,789.9 3,603.9 5,186.0

2013E 25,549.5 18,121.7 7,427.8 4,961.3 4,736.2 957.9 18,083.2 6,510.0 11,573.3 937.2 10,636.1 4,355.5 6,280.6

2008 Total Assets Growth L & A Growth Deposit Growth EPS GR 48.95% 30.84% 24.86% -10.71%

2009 13.09% 18.97% 21.56% 134.35%

2010 24.44% 32.12% 16.55% 24.45%

2011E 48.95% 12.00% 28.00% 10.26%

2012E 48.95% 30.00% 24.00% 29.12%

2013E 48.95% 25.00% 24.00% 21.11%

12

Beximco Pharmaceuticals
(DSE: BXPHARMA; Bloomberg: BXPHAR:BD)

IMPORTANT DISCLOSURES
Analyst Certification: Each research analyst and research associate who authored this document and whose name appears herein certifies that the recommendations and opinions expressed in the research report accurately reflect their personal views about any and all of the securities or issuers discussed therein that are within the coverage universe. Disclaimer: Estimates and projections herein are our own and are based on assumptions that we believe to be reasonable. Information presented herein, while obtained from sources we believe to be reliable, is not guaranteed either as to accuracy or completeness. Neither the information nor any opinion expressed herein constitutes a solicitation of the purchase or sale of any security. As it acts for public companies from time to time, BRAC-EPL may have a relationship with the above mentioned company(s). This report is intended for distribution in only those jurisdictions in which BRAC-EPL is registered and any distribution outside those jurisdictions is strictly prohibited. Compensation of Analysts: The compensation of research analysts is intended to reflect the value of the services they provide to the clients of BRAC-EPL. As with most other employees, the compensation of research analysts is impacted by the overall profitability of the firm, which may include revenues from corporate finance activities of the firm's Corporate Finance department. However, Research analysts' compensation is not directly related to specific corporate finance transaction. General Risk Factors: BRAC-EPL will conduct a comprehensive risk assessment for each company under coverage at the time of initiating research coverage and also revisit this assessment when subsequent update reports are published or material company events occur. Following are some general risks that can impact future operational and financial performance: (1) Industry fundamentals with respect to customer demand or product / service pricing could change expected revenues and earnings; (2) Issues relating to major competitors or market shares or new product expectations could change investor attitudes; (3) Unforeseen developments with respect to the management, financial condition or accounting policies alter the prospective valuation; or (4) Interest rates, currency or major segments of the economy could alter investor confidence and investment prospects.

BRAC EPL Stock Brokerage Capital Markets Group


Sajid Huq Amit Parvez Morshed Chowdhury Ali Imam Khandakar Safwan Saad Aasim Tajwaar Matin M M Shahnewaz Kabir Shawon Farjad Siddiqui Senior Research Analyst Research Analyst Investment Analyst Research Associate Research Associate Research Associate Research Associate sajid.huq@bracepl.com parvez@bracepl.com imam@bracepl.com safwan@bracepl.com tajwaar.matin@bracepl.com shahnewaz@bracepl.com farjad.siddiqui@bracepl.com 01755 541 254 01730 357 154 01730 357 153 01730 357 779 01730 727 913 01730 727 918 01730 727 924

Institutional Sales and Trading


Delwar Hussain (Del) Head of Institutional Sales and Trading del.hussain@bracepl.com 01755 541 252

BRAC EPL Research www.bracepl.com 121/B Gulshan Avenue Gulshan-2, Dhaka-1212 Tel: +88 02 881 9421-5 Fax: +88 02 881 9426 E-Mail: research@bracepl.com