aseana properties. 11 06 03 asean… · operationally, aseana should, by the end of 2012, complete...

ASEANA PROPERTIES www.aseanaproperties.com

COMPANY UPDATE 3rd JUNE 2011

Aseana Properties’ Interim Management Statement for Q1 2011 confirms that the Company is making good progress in developing its core assets. These comprise upmarket commercial office space, retail malls and residential condominiums and apartments in Malaysia with other developments in Vietnam. While parts of the Malaysian property market are becoming more competitive, Aseana is focused on higher end opportunities where margins are attractive. Vietnam is on a slower development curve. The fund has an initial but renewable seven year life through 2015 with only one of its projects expected to be completed beyond that date. Aseana hopes to have completed and sold all its other assets in this period.

Q1 unaudited results for the 3 month period showed revenues of US$3.62m, a

loss before tax of US$2.54m and a loss after tax of US$2.82m. These figures

compare with revenues of US$0.79m and losses both before and after tax of

US$4.44m in the corresponding period of 2010. The losses were due to

marketing costs totalling US$1.5m for projects on which no revenues had yet

been booked.

Unaudited net assets at 31st March stood at US$190.4m, US¢89.6 per share,

slightly down on the figures for the 31st December year end of US$192.9m and

US¢90.8 per share, due to the reported loss. The net asset value stands at a

premium of 75% on the current share price.

Unaudited realisable net assets were US$245.4m or US¢115.5 per share

compared with the year-end figures of US$244.6m and US¢115.1 per share. In

local currency terms, the market values of all projects were unchanged.

At the period end, cash held net of debt was US$37.9m, down from US$140.9m

at the 31st December. Net gearing is now 23.1% and Aseana’s strategy is to

conserve cash for its core projects.

Operationally, Aseana should, by the end of 2012, complete the sales of SENI

Mont’ Kiara apartments and Phase 2 retail lots in Sandakan Harbour Square. In

Vietnam, where progress has been slower, new projects are in the pipeline (co-

developments with its Vietnam associate, Nam Long Corporation) but have a

longer time line. Vietnam’s weight in the ex-cash portfolio may then rise from its

current 22%.

House broker, Panmure Gordon, expects Aseana’s progress to accelerate after

2012 as current major schemes now under construction achieve completion and

sale. The broker puts a present value on the shares of US$¢92.0, a premium of

79% to the current share price, and retains a Buy recommendation.

Year end 31 Dec

Revenue (US$m)

Gr. Profit (US$m)

PBT (US$m)

PAT (US$m)

Dil EPS (US¢)

NAV PS (US$)

DPS (US¢)

2010A 179.3 2.2 (15.4) (13.3) -9.51 0.91 0.0

2011E* 326.7 18.4 5.1 3.8 1.80 0.93 0.0

2012E* 139.5 13.2 13.3 10.0 4.47 0.97 0.0

2013E* 251.0 38.0 31.6 23.7 11.14 1.08 0.0

2014E* 30.0 7.5 1.0 0.7 -0.77 1.07 0.0

2015E* 612.4 144.6 136.5 102.3 27.91 135 0.0

* Forecasts from Panmure Gordon, the house broker.

SHARE INFORMATION

Code ASPL.L

Market Full List

Sector Real Estate Investment

Share price US¢51.5

12m high/low US¢57.4 – 40.3

Issued shares 212.525m

Market cap US$109.45m

Broker Panmure Gordon

SHARE PRICE PERFORMANCE

COMPANY DESCRIPTION

Aseana Properties Limited (ASPL) is a property development company which invests in development projects in Malaysia and Vietnam. Ireka Development Management Sdn Bhd (IDM) is a wholly-owned subsidiary of Ireka Corporation Berhad, a Malaysian listed company with over 40 years experience in construction and property development, and is the exclusive Development Manager for ASPL.

FINANCIAL INFORMATION (31/05/2011) (Unaudited)

Net Asset Value (NAV) US$190.4m

NAV per share US¢89.6

Net cash and bank equivalents US$37.85m

Gearing (total debt/total equity) assets) DEBT/NET ASSETSD/

42.6%

Gearing net of cash 23.1%

FINANCIAL DIARY

Next AGM 14 Jun 2011

Next half year end 30 Jun 2011

Next interims announcement Aug 2011 (TBC)

Nest year end 31 Dec 2011

PREVIOUS CITY INSIGHTS RESEARCH

Initiation Profile – 6 May 2010



2

INTRODUCTION

Aseana Properties has issued its Interim Management Statement accompanied by

unaudited results for the Q1 2011 on the 19th

May. The first section of this Update

summarises the key highlights of the Statement. All tables and charts presented in this

Update have incorporated the latest figures. The latest full year audited results, as

presented by Aseana on the 20th

April, with accompanying Income Statement, Balance

Sheet and Cash Flow, are covered in the next section.

Marketing expenses account for Q1 loss

Q1 unaudited results for the 3 month period showed revenues of US$3.62m compared

with revenues of US$0.79m. The revenues were attributable to the sale of completed

properties in Tiffani by i-ZEN (95% now sold) and on Phase 2 units in Sandakan Harbour

Square (93%). The losses reported were due to marketing costs totalling US$1.5m for

projects on which revenues have yet to be booked. Those marketing expenses largely

account for the unaudited pre- and post tax losses of US$2.54m US$2.82m respectively

(US$4.44m for both in the corresponding period of 2010).

…while sales continue with revenues to be booked by year end

In addition, Aseana successfully completed 325 units (Phase1) of SENI Mont’ Kiara

luxury condominiums in Kuala Lumpur and these units are being progressively handed

over to their buyers. It is hoped that the majority of these sales will be booked by the end

of this year. Phase 2 is due for completion in September 2011.

Phuoc Long B project to be co-developed with Nam Long…

No new developments have been undertaken in Q1, the focus being on accelerating the

completion and sale of existing projects. Importantly, however, Aseana has signed a

partnership agreement with Nam Long Corporation in April to co-develop another project

on a 55:45 basis. This project, all residential with a gross development value (GDV) of

c.US$100m, is the Phuoc Long B in District 9 of Ho Chi Minh City (HCMC), Vietnam.

…along with Tan Thuan Dong With uncertainty hanging over the time scale for receiving the necessary planning

consents, Aseana formally withdrew from the acquisition of development land in Mont’

Kiara as was announced in January. Thereafter in May the Company and PRUPIM

Vietnam Property Fund, managed by Prudential Property Investment Management,

mutually agreed to terminate the conditional agreement due to delays in fulfilling the

conditions of the agreement including an Investment License in the Tan Thuan Dong

residential development. Nevertheless, Aseana has affirmed that it will continue with the

project with its partner, Nam Long, on a 80:20 basis.

Minor change in NAV due to announced loss

The Company’s unaudited net asset value at 31st March 2011 was US$190.4m and

US¢89.6 per share compared with audited figures of US$192.9m and US¢90.8 per share

reported at the 31st December 2010. The marginal decline in the NAV is due to the

aforementioned loss after tax. In local currency terms, project values were unchanged.

Cash conservation to be supplemented by a new MTN programme

Aseana’s cash, net of its bank overdraft, declined to US$37.9m compared with

US$140.9m at the 31st December 2010. This was due to the repayment of US$72.9m of

medium term development loans for the of 1 Mont’ Kiara, and cash absorption in other

pipeline projects. The Company is pursuing a policy of cash conservation and arranging a

new MTN programme of up to US$162m, for completion by September 2011. This will

be allocated to the refinancing of Phases 3 and 4 of the Sandakan Harbour Square

project and the financing of the Aloft Kuala Lumpur Sentral Hotel.



3

2011 prospects look good for further

sales

Expectations for 2011 depend on further sales progress and overseas buyers from other

parts of south east Asia are targeted for both of the following which provide good

prospects:

1) Tiffani by i-ZEN project where to date 95% of the 399 units have been sold;

2) SENI Mont’ Kiara where the level of completed sales achieved to date is 68%.

Properties for Phase 1 are being handed over from April 2011. Phase 2 is due for

completion in September 2011;

3) Sandakan Harbour Square Phase 2 retail lots where to date 93% have been sold.

Phases 3 and 4, comprising a retail mall and resort hotel, though expected to be

completed and open by December 2011, will not be sold for a further two years.

FINAL RESULTS

Loss on disposal plus increased marketing accounted for 2010 loss

Full year results for the year ended 31st December 2010 were announced on 20

th April

2011. The results showed a loss due mainly to two factors, an increase in marketing

expenses (US$10.0m against US$4.8m in 2009) and a loss of US$6.7m (nil in 2009) from

the disposal of 1 Mont’ Kiara retail mall and office tower.

Financial summary

Revenue increase of 55.6% to US$179.3m (2009: US$115.3m);

Net loss before tax US$15.4m (2009: US$4.3m profit);

Net loss after tax attributable to parent equity holders US$20.2m (2009: US$0.84m profit);

Loss per share US¢9.51 (2009: EPS US¢0.37).

Total comprehensive expense (including current and fair value of asset changes) attributable to parent equity holders US$12.2m (2009: Income US$0.9m).

201o was a busy and eventful year… Operational progress

New build: Construction started on first phase of International Hi-Tech Healthcare Park in

Ho Chi Minh City (HCMC).

Acquisition: Four star business hotel acquired in Kuala Lumpur Sentral; development in

progress for completion in 2012 Q4; advanced negotiations under way with Starwood

Asia Pacific Hotel and Resorts Pte. Ltd. to manage the hotel under its ‘Aloft ‘brand.

Disposal: office tower and retail mall at 1 Mont’ Kiara to ARA Asia Dragon Fund for

US103.7m; completed and handed over to buyers.

…with sales revenue boosted by 1

Mont’ Kiara

The Income Statement is shown overleaf. Relating to real estate companies, Aseana has

adopted IFRIC 15 – Agreements for the Construction of Real Estate – which prescribes

that revenue be recognised only when properties are completed and occupancy permits

issued. Thus all Group revenue was derived from developments in Malaysia, none being

completed in Vietnam during the year.



4

Group revenue increased due to the completion of 1 Mont’ Kiara, US$166.3m plus other

completed property sales in i-ZEN@Kiara 1, Tiffani by i-ZEN and Sandakan Harbour

Square (Phase 2) totalling US$12.4m.

Loss on disposal plus rise in

marketing expenses

The net loss before tax of US$15.4m included losses of US$6.7m (nil in 2009) from the

disposal of the retail mall and office tower at 1 Mont’ Kiara with the 25% income tax

charge for early disposal accounting for most of it. In addition, marketing and other

operating expenses increased by 63% to US$12.9m (2009: US$7.9m). Marketing

expenses consists mainly of commission, discounts, rebates and mortgage interest

subsidy. These costs were recognised as and when incurred and are often ahead of the

recognition of corresponding revenue. Management fees totalling US$4m (2009:

US$4.2m) were based on the NAV at the end of each quarter. No performance fee was

triggered. The net loss after tax was US$21.2m (2009: US$0.7m).

The total comprehensive loss for 2010 was reduced to US$13.3m (2009: profit US$0.5m)

as a result of two factors, foreign currency translation gains of US$3.1m and fair value

gains on available for-sale investments totalling US$4.8m. Neither was significant in

2009. The loss per share was US¢ 9.51 cents against earnings per share in 2009 of US¢

0.37.

INCOME STATEMENT

Statement of Comprehensive Income

Year ended 31st December 2009 2010 Change (%)

Figures in US$ (000s)

Revenue 115,256 179,345 55.6

Cost of sales (100,746) (177,184) 75.9

Gross profit/(loss) 14,510 2,161 (85.1)

Other income 248 679 173.8

Administrative expenses (1,064) (1,017) (4.4)

Foreign exchange (loss)/gain 1,827 (670)

Management fees (4,196) (3,994) (4.8)

Marketing and other operating expenses (7,890) (12,852) 62.9

Operating profit/(loss) 3,435 (15,693)

Investment income 2,115 794 (62.5)

Finance costs (595) (534) (10.3)

Share of results of associated company (607)

Profit/(loss) before tax 4,348 (15,433) -

Tax (3,635) (5,795) 59.4

Profit/(loss) after tax 713 (21,228) -

Non-controlling interests 122 1,023

Attributable to equity holders of the parent 835 20,205 2,319.8

Other comprehensive income net of tax:

Foreign currency translation gains/(losses) (209) 3,107 -

Incr. in fair value of available-for-sale investments 4,828 -

Total comprehensive income for the year 504 (13,293) -

Profit/(loss) per share US cents 0.4 (9.5) -



5

BALANCE SHEET

Total assets: US$676.9m, an increase on US$528.8m for 2009, of which the major

constituents were inventories and cash;

Inventories: US$431.5m, an increase on US$399.0m for 2009, of which nearly 89%

was work in progress and the remainder land held for development;

Cash and cash equivalents: US$150.4m (2009: US$62.0m) boosted by proceeds

from the sale of 1 Mont’ Kiara;

Deferred revenue: US$188.5m (2009: US$109.8m) included in total current liabilities.

This represented the excess of progress billings to purchasers of development properties over revenue recognised;

Net asset value: (NAV) was US$197.2m (2009: US$209.4m); on a per share basis,

NAV was US 90.8¢ (2009: US 96.5 ¢);

Total debt: US$162.6m (2009: US$119.9m) and net debt US$12.2m (2009:

US$57.9m);

Cost of debt: interest ranging from 4.85% p.a. to 7.13% p.a. on either Ringgit or US

dollar denominated debt, slightly above the 2009 annual rates of 3.59% - 6.55%.

Gearing: 82.5% and 6.2% net of cash (2009: 57.3% and 27.7% respectively).

Balance Sheet

Year ended 31st December 2009 2010 Change

Figures in US$ (000s) (Restated)

Property, plant and equipment 1,070 4,497 3,427

Available-for-sale investments 17,224 22,052 4,828

Intangible assets 17,174 17,174

Deferred tax assets 7,167 19,400 12,233

Non-current assets 42,635 63,123 20,488

Inventories 399,040 431,473 32,433

Trade and other receivables 24,392 31,499 7,107

Amount due from associate 785 382 (403)

Cash and cash equivalents 61,957 150,385 88,428

Current assets 486,174 613,739 127,5650

Total assets 528,809 676,862 148,0530

Trade and other payables (84,504) (112,940) (28,436)

Bank loans and borrowings (36,976) (68,463) (31,487)

Medium term notes (72,923) (72,923)

Current tax liabilities/deferred revenue (112,120) (201,099) (88,979)

Current liabilities (233,600) (455,425) (221,825)

Bank term loans (20,147) (21,176) (1,029)

Medium term notes (62,737) 62,737

Amount due to non-controlling interests (2,887) (3,048) (161)

Non-current liabilities (85,771) (24,224) 61,5470

Total liabilities (319,371) (479,649) (160,278)0

Net assets 209,438 197,213 (12,225)

Non-controlling interests (4,365) (4,346) 19

Shareholders' Equity 205,073 192,867 (12,206)

NAV per share (US cents) 96.5 90.8 (6.0)



6

CASH FLOW

Deferred revenue a substantial benefit

to working capital

Cash generated from operations improved to US$78.8m against absorption of US$1.0m

in 2009. The major factor, outweighing the loss before tax, was a substantial positive

working capital movement of US$95m (2009: US$2.6m deficit) arising from the increase

in deferred revenue of US$78.7m (2009: US$9.2m reduction).

Major improvement in operating cash

flow

Below the line, interest paid declined in the period to US$5.0m and tax paid rose to

US$7.4m (2009: US$7.4m and US$5.5m respectively), the latter due to increased

property sales made during the year. Thus net operating cash flow totalled US$66.4m

compared with a negative flow of US$13.9m in 2009.

Limited new investments undertaken Investing activities totalling US$3.6m included a US$2.9m deposit paid for the acquisition

of the Kuala Lumpur Sentral hotel. Most investment was work in progress on existing

projects rather than new starts. In the Financing section, debt repayment totalled

US$44.8m. Debt used of US$72.6m included the drawing down of the medium term

finance to develop 1 Mont’ Kiara. As stated previously, this debt was repaid after the

balance sheet date in January.

Cash flow

Year ended 31st December 2009 2010 Change

Figures in US$ (Restated)

Cash flows from operating activities 4,348 -15,433 -19,781

Net finance income -1,520 -260 1,260

Unrealised foreign exchange gain/(loss) -1,855 -618 1,237

Share of results from associate 607 -607

Depreciation and impairment 52 117 65

Net profit/(loss) before working capital changes 1,632 -16,194 -17,826

Movement in working capital -2,600 94,947 97,547

Cash generated from/(used in) operations -968 78,753 79,721

Interest and tax -12,938 -12,372 566

Net cash generated from/(used in) operations -13,906 66,381 80,287

Acquisition of subsidiaries, net of cash -7,630 -18 7,612

Acquisition of property, plant and equipment (net) -764 -3,556 -2,792

Purchase of available-for-let investments -4,200 4,200

Finance income/repayments net of advances/other 3,558 1,197 -2,361

Net cash flows from investing activities -9,036 -2,377 6,659

Repayment of borrowings -37,838 -44,763 -6,925

Drawdown of borrowings 49,063 72,590 23,527

Repayment of finance lease liabilities -40 40

Share buy back -6,007 6,007

Net cash flows from financing activities 5,178 27,827 22,649

Net increase/(decrease) in cash and cash equivalents -17,764 91,831 109,595

Cash and cash equivalents at beginning of period 62,856 46,996

Effect of changes in exchange rates 1,904 2,102

Cash and cash equivalents at end of period 46,996 140,929



7

DEVELOPMENT REVIEW

Aseana story extended through Q1 to

31st March 2011

A summary of the projects currently in planning or under construction are described below

with Malaysia and Vietnam covered in separate sections. As noted previously (see

Initiation Profile 6th

May 2010), in both countries the focus is on a relatively small number

of urban/city centre markets with high population densities needing a range of facilities,

residential, commercial, retail units and hospitality. This section takes the story and

extends it beyond 2010 through Q1 2011. Thus the table below and the pie charts

overleaf show the portfolio NAV and RNAV disaggregation as at the 31st March 2011.

Conservative NAV treatment Valuations are at cost, although the figures may be based on best estimates pending

account finalisation. Under accounting standards, the disclosure of NAV does not permit

upward revaluation of partially completed developments. However, Aseana also provides

an estimate of the current project valuation through the calculation of RNAV. These

values may be based on either discounted cash flow estimates, or estimates obtained

from residual/comparison method of land value methodology. For reasons of

conservatism, the RNAV figures shown in the right hand column of the table below take

into account an estimate of taxes that may be payable by the Manager.

Project NAV Project RNAV at

cost or market value market value

(US$m) (US$m)

Tiffani by i-ZEN, Kuala Lumpur, Malaysia Luxury condominiums 5.11 5.11

1 Mont’ Kiara by i-ZEN, Kuala Lumpur, Malaysia Office suites, office tower and retail mall 15.61 18.45

Sandakan Harbour Square, Sandakan, Sabah, Malaysia Retail lots, hotel and retail mall 29.82 35.31

SENI Mont’ Kiara, Kuala Lumpur, Malaysia Luxury condominiums 58.30 79.53

Kuala Lumpur Sentral Office Towers & Hotel, Kuala Lumpur, Malaysia Office towers and a business hotel 0.60 6.67

KLCC Kia Peng Residential Project, Kuala Lumpur, Malaysia Luxury residential tower 7.15 7.15

Aloft' Kuala Lumpur Sentral Hotel Business-class hotel 2.89 2.89

Kota Kinabalu seafront resort & residences, Kota Kinabalu, Sabah, Malaysia Resort homes, hotel and villas 13.16 17.39

Total Malaysia 132.64 172.50

Queen’s Place, Ho Chi Minh City, Vietnam Residential, offices and retail mall 0.97 0.97

Equity Investment in Nam Long Investment Corporation in HCMC, Vietnam Private equity investment 22.08 22.08

International Hi-Tech Healthcare Park, Ho Chi Minh City, Vietnam Healthcare themed comm./residential devel. 10.74 25.82

Tan Thuan Dong Project, Ho Chi Minh City, Vietnam Apartments and commercial development 3.61 3.61

Phuoc Long B Project 0.03 0.03

Total Vietnam 37.43 52.51

Total portfolio 170.07 225.01

Market values relate to Aseana's effective interest. They are prepared by international independent valuers using DCF methods and may also be calculated based on

the residual/comparison method of land valuation. The values are adjusted for taxes expected to ber paid by the Manager.

Aseana' Property portfolio and market valuation as at 31st March 2011

Project Type

US$55m (US¢25.90m per share)is the

minimum potential unrealised gain

Based on property alone, with cash and other assets and liabilities excluded, Malaysia

accounted for 78% of assets and Vietnam the balance. With cash and other assets net of

liabilities included, Malaysia’s share falls to 70% (US$132.4m out of US$190.4m). The

difference between the overall NAV of US$190.4m and RNAV of US$245.4m signifies a

potential estimated unrealised gain of US$55m or US¢25.90 per share) In fact, the gain

could easily exceed this by virtue of the fact that, in arriving at the RNAV figure, many of

the projects are valued at cost. As these projects are developed, there is a further

potential uplift in the valuations, though unable to be recognised under accounting rules.



8

The pie charts convey more readily the respective weights of the various projects. Where

market values are quoted, these have been supplied by independent valuers including

Crowe Horwath, CBRE, Colliers and Cheston International.

Total RNAV US$244.6m - constituents in US$m as at 31st March 2011

KK resort & residences,

17.4

Phuoc Long B Project ,

0.01 M ont' Kiara by i-ZEN,

18.5Tan Thuan Dong

Project , 3.6

Queen's Place, 1.0

International Hi-Tech

Healthcare Park , 25.8

Nam Long Equity

Investment , 22.1

KL Sentral o ffice

towers & hotel , 6.7

KL Sentra 'aloft' Hotel ,

2.9

KLCC Kia Peng

Residential , 7.2

SENI M ont Kiara , 79.5

Sandakan Harbour

Square , 35.3

Tiffani by i-ZEN , 5.1Cash/other assets less

liabilities , 20.4

Tiffani by i-ZEN , 5.1

1 Mont' Kiara by i-ZEN, 15.6

Sandakan Harbour Square , 29.8

SENI Mont' Kiara , 58.3

KK resort & residences, 13.2

KLCC Kia Peng Residential , 7.2

KL Sentra 'aloft' Hotel , 2.9

KL Sentral office towers & hotel , 0.6

Nam Long Equity Investment , 22.1

International Hi-Tech Healthcare Park , 10.7

Queen's Place, 1.0

Tan Thuan Dong Project , 3.6

Phuoc Long B Project , 0.0

Cash/other assets less liabilities , 20.4

Total NAV US$192.9m - constituents in US$m as at 31st March 2011



9

STRATEGY IN ACTION

Hurdle rates of 20% ROE in Malaysia and 30% in Vietnam…

Aseana’s initial investment criteria is to invest in projects which are calculated to achieve

above 20% and 30% ROE (these being the hurdle rates) for Malaysian and Vietnamese

projects respectively. The average period of time between acquiring a property asset end

selling it at a profit varies according to the type of property, the development or

construction phase and market conditions. Given protracted time periods for most

projects, and that market conditions may change over their life time, the Company may or

may not meet the minimum ROE required.

Excellent sales progress achieved The table below summarises sales progress achieved through to the end of April 2011

among the different projects. Significant progress has been made in selling the luxury

condominiums and apartments. The i-ZEN brand, developed by Ireka, Aseana’s

development manager, stands for quality in this market and also to prime location, key

factors in this success. Sales of the residential apartments in SENI Mont’ Kiara are also

picking up. Despite a softening in the Kuala Lumpur office market due to an over supply

situation developing, sales have been provisionally completed of both office towers at KL

Sentral.

Sales progress as at 30th April 2011

Project ^ % sold to date Fully sold expected

Tiffani by i-ZEN 95 Q4 2011

1 Mont' Kiara by i-ZEN

Office Suites 100

Office tower 100

Retail mall ( including car parks) 100

Sandakan Harbour Square

Phase 1 retail lots (61 units) 100

Phase 2 retail lots (68 units) # 93 Q4 2011

SENI Mont' Kiara ~ 68 Q4 2012

KL Sentral Office Towers and Hotel

Office Tower 1* 100

Office Tower 2* 100

Hotel > 100 2013

^ Malaysia projects only Those in Vietnam are later in construction.

* Conditional sales agreement; target completion Q4 2012.

# Accompanying hotel and mall to be held for two years before sale.

~ Conservatively assumed that it may take to end 2012 before fully sold.

> Hotel to be held for two years before sale.



10

DEVELOPMENT REVIEW 1. MALAYSIA

Market now favouring buyers as supply

replenished by completed developments

Residential

During 2010, the residential market saw the emergence of strong demand at the top end

of the market although prices remained generally stable over the year. On the supply

side, the number of new launches of high end condominiums was 31% down on 2009,

while upscale landed properties in good locations were sought by primary buyers

attracted to the prime areas of KLCC, Mont Kiara and Bangsar. The potential emergence

of a property bubble led the Central Bank to take action, raising interest rates and

requiring a 70% LTV on loan applications which helped to calm the market, already

softening due to several key developments coming onstream. As a result, a ‘buyers

market’ developed in certain areas producing more competition among developers

offering various incentive schemes to attract would-be purchasers.

‘Soft’ office market temporarily

oversupplied…

Offices

The Kuala Lumpur commercial office market softened during 2010, mainly due to two

factors, first, growth in supply over the past three years and, secondly, business concerns

about the economy which, although showing a strong recovery in 2010, may slow in the

current year. We review later the main drivers of Malaysian economic growth in the

medium to longer term. In the near term, while the take up of new office space has been

slow outside the prime areas, buyers have come in for completed office units with some

achieving gains of between 20% and 40% on their investment.

…while the retail environment is

attracting developers

Retail

Apart from the general commercial sectors, retail developments were also favourable in

2010 on three counts, consumer income growth and low unemployment, buoyant tourist

activity and the entry of new branded retailers. In this generally benign environment, a

good take up of new leases has been seen, particularly in the prime areas. Aseana’s 1

Mont’ Kiara mall has had a good start in attracting retailers both local and regional.

1 Mont' Kiara, Kuala Lumpur (50% owned)

Sale of whole complex in November

2010, but profits yet to be finalised

This mixed project, a joint venture with CapitaLand who own

the other 50%, started in November 2006. The project,

comprising a 20-storey office tower, a 5-storey retail

complex and a 34-storey office suite block with 186 units,

was completed in November 2010.

The office tower and retail mall were sold to the ARA Asia

Dragon Fund for US$103.7m while sales of the office suites

to individual buyers added a further US$62m. Final

distribution of profits between the Aseana and CapitaLand

will be determined when the accounts are finalised by Q3

2011.



11

Kuala Lumpur Sentral (40% owned)

Office towers sold but hotel, to be

managed by Starwood, retained

Originally purchased in August 2007, the two office

towers and a 482 room business class hotel came

under the control of a joint venture with Malaysian

Resources Corporation Berhad (MRCB), the latter

taking a 60% interest. The office towers have been

conditionally sold to an international real estate fund

for US$194m and completion is expected in 2012

Q4. Aseana acquired the hotel, which is in close

proximity to the city centre with excellent transport

links from this prime hub, from Excellent Bonanza

Sdn Bhd for a consideration of 112.5% of its

development cost, expected to be US$66m. A

deposit has been paid and the balance will be due

on completion in 2012 Q4. The hotel is expected to

open for business in 2013.

A valuation has not been given as APSL is in negotiations with Starwood Asia Pacific

Hotel and Resorts Pte. Ltd. to manage it under their ‘Aloft’ brand. The hotel NAV is

carried at a cost of US$2.89m.

Sandakan Harbour Square, Sabah (wholly owned)

This four-phase, mixed-use (low-rise

office, retail and hotel) development has

an estimated gross development value

(GDV) on completion of US$170m. In

Aseana’s Q1 2011 Update, the project

NAV is US$29.8m and market value

US$35.3m. The first two phases

comprise a total of 129 retail units.

Phase 1 was fully sold earlier and 93%

of Phase 2 to date.

Phases 3 and 4 are a retail mall and

hotel development respectively, the latter to be managed by Starwood Hotels under the

‘Four Points by Sheraton’ brand. Both phases 3 and 4 are due for completion by

December 2011 with business commencement expected in 2012. While leasing of the

retail space is already going ahead, Aseana state it will hold the mall and hotel for about

two years, allowing value to grow, before selling them on.



12

Kota Kinabalu, Seafront resort & residences

Aseana paid US$10.35m in August

2009 to buy 79.5 acres of sea front land

on which to build resort homes on an

80:20 joint venture basis with Global

Evergreen Sdn Bhd. The Company

obtained development approvals for Lot

1(a) - boutique resort hotel and Lot 1(b)

– resort villas. The Board has decided to

delay the commencement of this project

until the resort home market recovers.

Tiffani by i-ZEN, Kuala Lumpur (100% owned)

Luxury apartments now 95% sold

This is a luxury condominium development with 399

apartments in two towers. It is marketed under the i-Zen

name, the upmarket property brand created by Ireka. The

towers were completed and handed over in August 2009,

and only 20 apartments (5%) remain to be sold. The

project NAV was stated as US$5.1m in the Q1 2011

valuation, this figure representing the inventory at cost of

the remaining unsold apartment units.

KLCC Kia Peng Residential Project, Kuala Lumpur City Centre (70% owned)

Construction of new residential tower

on plan for 2011 H2

Acquired in April 2010, this 43,559 sq. ft. plot is in the

heart of Kuala Lumpur on Jalan Kia Peng, in close

proximity to the KLCC Convention Centre, KLCC Park and

the Petronas Towers. Aseana is to build an upmarket

residential tower which, subject to completion and

obtaining the necessary approvals, is expected to start in

2011 H2.

The project NAV was US$7.2m at the end of Q1 2011, but

further medium term debt financing will be required once

building commences. The GDV of the development is

estimated of US$90m with completion in 2015. Aseana’s

joint venture partner in this development is Ireka

Corporation Berhad.



13

SENI Mont' Kiara, Kuala Lumpur (wholly owned)

This is a 605-unit upmarket

condominium development

located in Mont’ Kiara on 8.83

acres. Two 46-storey tower

blocks and two 16-storey low

rise blocks are being built, with

a total saleable area of over

1.9m sq. m. Development is in

two phases: Phase 1 was

physically completed in

February 2011 and home buyers will take possession from April. Phase 2 is scheduled for

completion in September 2011.To date, 68% of units have been sold with marketing

extended to other parts of the world. The project NAV as at the end of Q1 2011 was

US$58.3m, with realisable value of US$79.5m. The expected GDV is US$490m.

DEVELOPMENT REVIEW 2. VIETNAM

Accelerating inflation has triggered

tighter official monetary measures…

The economy is recovering slowly from the downturn with a growth rate of 6.8% in 2010

with most sectors enjoying an upturn. However, inflation was running at 12% in 2010 (the

year-on-year rate to May 2011 has accelerated to nearly 20%) mainly due to international

commodity including energy prices. Conditions in the real estate market were, and are,

being affected by government and central bank action to curb the inflationary trend, now

the top priority.

…with borrowing rates now above 20% The prime interest rate was raised from 8% to 9% in November and action also taken to

increase capital ratios among financial institutions. The government now wants the

commercial banks to restrict credit and loan growth to less than 20% year-on-year. The

Central Bank increased the key repurchase interest rate from 7% to 8% in November but

then more sharply in May. It was lifted first to 12% and then, within a few days, to 15% on

the 17th

May, a rise of 800 bps since November. For borrowers from the state-owned

banks, rates charged are now 20%-23% and, from non state-owned banks, in the range

23% - 27%.

…while the DONG has been devalued

twice so far in 2011

Aseana’s results were also affected by the central bank devaluing the Vietnam currency,

the Dong, twice during 2010 and twice again in 2011, in February and May. The rate

Aseana used at the year end 2010 for valuation purposes was US$1 = VND 19487.70

compared with US$1 = VND 18,477 on the 31st December 2009, indicating an

approximate 5% depreciation over the course of 2010. In fact, the Dong devaluations are

largely immaterial for Aseana, both in terms of the balance sheet (capital outlays for

projects are still small being in their infancy) and the Income Statement (none of the

projects has begun operations yet).

Developments within ASPL’s Vietnam property portfolio comprised all these sub-sectors

of the market and we first review the trends affecting each during 2010 and into Q1.



14

2010 recovery especially at the lower

end of the market…

…but tighter monetary conditions may

cast a damper

Residential

The market showed some recovery in the key areas of demand, particularly Ho Chi Min

City (HCMC), where average prices for new apartments increased by 10% year-on-year .

Good demand was also experienced in suburbs of the city. The lower end of the market,

comprising affordable properties are attractive to a major proportion of the 9m Vietnam

population, and this market segment experienced the strongest demand. This sector

could weaken temporarily as a result of the challenging conditions in the economy,

particularly the effect of reduced credit availability and higher interest rates.

25% new space in 2010 in HCMC…

…affecting occupancy rates…

…and putting downward pressure on

rents

Offices

The general background to the commercial office sector is that, despite the economic

recovery, substantial new space has come on the market, now totalling over 1.05m sq. m.

in HCMC at the end of 2010. During the year, a further 208,000 sq. m., or 25%, was

added, including the 68 storey Bitexco Financial Tower. These developments have had

two effects: First, downward pressure on rents and, secondly, an appreciable impact on

average occupancy rates. In HCMC, for Grade A office space, the decline was from 83%

in 2009 Q4 to 68% in 2010. However, given that foreign banks and multinationals will

continue to be attracted to the City’s grade A space, occupancy should again increase in

due course. For Grades B and C, where fewer new developments have come to fruition,

average occupancy rates were still above 80% in HCMC in 2010 Q4 and this may

represent a sustainable level.

Sector buoyant with prime, well located

space at a premium

Retail

This sub-sector has been buoyant in HCMC with rental growth of 11% year-on-year

reaching an average of US$74 per sq. m. while occupancy rates attained 90%. The

demand/supply balance is tilted because of the scarcity of prime locations restricting the

development of large shopping malls, particularly in the central part of the city. In addition,

the availability of relatively small plot sizes is unsuitable for certain types of retail unit

requiring sizable floor plates.

Queen’s Place, Ho Chi Minh City (65% owned)

This mixed use development will

consist of two residential towers, a

strata office tower and a retail mall with

a total area of close to 1m sq ft. It is a

65/35 joint venture with local developer

Binh Duong Corporation, with Aseana

expecting to invest US$11.3m the

project. The site is currently a social

housing area and resettlement

planning now underway is expected to

take eighteen months before

construction can start with completion

not before 2017.



15

The Q1 2011 project NAV for Queen’s Place was just short of US$1m and the expected

GDV has been reduced from US$195m to US$115m following a review of the

projections and feasibility studies to take into account the current market

environment in Vietnam.

International Hi-Tech Healthcare Park, Ho Chi Minh City (51% owned)

Mixed new build health care

project…

This mixed development of 93 acres comprises upmarket hospital, private residential and

mixed used commercial offices, retail units and hospitality. The project will be developed

in five phases over an estimated nine years.

…will be developed in phases with hospital completion in 2012

The first phase, a 250 bed private general hospital commenced construction in May 2010.

It will be managed by Parkway Health, Asia’s largest private healthcare group. Completion

of the hospital is expected in 2012 with business commencement in 2013. Building work

on the residential apartments is scheduled to begin in 2011 Q4. While Aseana will

develop the residential units on its own, the Company is negotiating with several strategic

investors with the aim of participating in the overall development of the park which has an

estimated GDV now of US$670m. The project NAV at Q1 2011 was US$10.7m with

market value of US$25.8m.

Nam Long Investment Corporation (16.4% owned)

Nam Long is a co-investment partner…

Aseana acquired a strategic minority stake in Nam Long in July 2007 for US$17.2m. The

Company is a private Vietnamese developer and a leading player in the Ho Chi Minh City

property market, specialising in affordable housing known as ‘E’ homes. These were a

main driver of its 2010 revenues. It also has an extensive land bank of over 1,200 acres in

and around HCMC while it is also engaged in a new development in Long An Province.



16

…to develop at least three projects

Mekong Capital, a private equity fund, has also taken a stake in Nam Long, diluting

ASPL’s stake to 16.4%. Aseana has signed an exclusive agreement to co-develop at least

three projects with Nam Long in Ho Chi Minh City, the first being the Tan Thuan Dong

project to which has recently been added the Phuoc Long B residential project.

Tan Thuan Dong, Ho Chi Minh City, Vietnam (80.0% owned)

…the first awaiting planning approval

with construction to start in 2011 Q4

This development is an up market

residential project in HCMC comprising

two towers with supporting commercial

and retail facilities totalling c.66,000 sq.

m. It has an expected GDV of US$91m.

Development planning is advanced and

approval from the authorities expected

in Q3 2011 after which construction can

start. Aseana signed an agreement in

November 2009 under which it will take

an 80% stake in this development for

US$9.6m. The Q1 2011 NAV was

US$3.6m. A conditional agreement to

sell a 39.2% stake in this development to PRUPIM Vietnam Property Fund was ended

due to delays in receiving approval from the relevant authoriites.

Phuoc Long B Project

…and another agreement has recently been signed for the second

A conditional agreement with Nam Long was signed in May 2011 for the development of a

residential project of 37 villas and c.460 apartment units. Site preparation work has

commenced; sales launch and construction should start late this year with completion in

2014. The project NAV at the end of March 2011 was US$0.03m.

ECONOMIC UPDATE 1. Malaysia

Slower growth expected in 2011… The backdrop to the real estate market is mixed. The GDP growth rate is expected to fall

back to 5.2% in 2011 after the 7.2% achieved last year. Sustained employment has been

accompanied by higher inflation, mainly imported due to rising oil and other commodity

prices. To counter this, Bank Negara Malaysia, the Central Bank, in association with the

Monetary Policy Committee, increased interest rates three times by a total of 75 bps pts

to 2.75%, but does not want to cause a setback to the economy which would run counter

to government’s objectives as set out in the Tenth Economic Plan, 2011-15.

…albeit with further monetary tightening

to combat a rise in inflation

That said, further monetary tightening has been required. With inflation continuing to rise,

to 3.2% in April 2011, the Central Bank has raised the key interest rate a further 25 bps to

3.0%. At the same time, the GDP growth rate is slowing, 4.6% in Q1, substantially lower

than the 10.1% in the same quarter of 2010 and also below the 4.8% achieved in Q4.

These fluctuations show considerable seasonal variation although the Central Bank, in

announcing the latest figure, indicated that the slower growth rate was largely attributable

to a weak performance in the manufacturing sector.



17

…but Government aims to stimulate the

economy via the services sector

For the longer term, The TEP incorporates an Economic Transformation Programme

(ETP) aiming to create a high value added, high income economy, in which the services

sector will be the key driver, contributing over 61% of GDP by 2015 (2010 58%). The

government’s annual growth target for GDP is 6%, but the key aim of the ETP is to raise

income per head from US$6,700 to US$15,000 in nine years. In fact, this would require a

compound annual growth rate in excess of 9%.

the ETP should be beneficial to the

property sector…

As part of the ETP, the government is using private sector investment projects in the

transport and infrastructure fields to act as catalysts to stimulate activity, attract investors

particularly from overseas and to encourage multinationals to set up in the country.

Projects such as the extension of rail transport links from the capital to other cities and

suburban areas will benefit the property sector. On another level, there are regulation,

licensing and tax measures to stimulate the property sector, including:

1. Individuals and corporations pay no capital gains tax if assets are held for over five

years;

2. Property transactions below RM20m now require no Foreign Investment Committee

(FIC ) approval;

3. Purchasers can obtain loans with 95% LTV repayable over 40 years, a significant

relaxation on normal rules.

…despite a potential over-supply of

office space emerging

While these measures are beneficial, on the commercial side, there has been a potential

over-supply of office space during the last three years with a further 13m sq. ft. in the

pipeline between 2011 and 2013. The majority of this is scheduled for completion in 2012.

The consequences of this have been threefold:

1. some planned developments have been deferred;

2. occupancy rates in Kuala Lumpur offices have slipped;

3. rents are facing some downward pressure.

ECONOMIC REVIEW 2. Vietnam

Economy affected by surging inflation

inflation …

Vietnam is a less advanced and generally poorer economy than Malaysia though with

good potential for growth in the longer term. The country had an estimated per capita

income of US$1,200 in 2010 against Malaysia’s per capita income of US$6,700. Based

on the government’s development plans, the figure could rise to US$1,300 in 2011. The

attractions for Aseana’s real estate activity are the capital, HCMC, and two other cities,

Hanoi and Hai Phong, which alone have urban area populations exceeding one million.

Vietnam’s GDP growth rate in 2010 was 6.8%, marginally exceeding the government’s

targeted 6.5%. The planned rate for 2011 was originally set at 7.0% - 7.5% but was

reduced to 6.5% in May as a result of the perceived problems in coping with surging

inflation. The economy’s high inflation rate of 11.75% in 2010 has accelerated to nearly

20% year-on-year in May 2011.



18

…and a devalued currency Combined with a substantial trade deficit, inflation resulted in successive devaluations of

the Dong as previously mentioned. International investor confidence has also suffered as

a result of a dollar bond default by a state-owned enterprise. While the Central Bank kept

the key open market (repurchase) rate at 7% through most of 2010 in order not to

jeopardise the progress of the wider economy, it has been compelled to raise it

substantially during the current year, and enforce cutbacks on bank lending and credit

growth to 20% for 2011.

Bank lending to property sector

reduced…

To keep lending growth within that level, banks have to gradually reduce loans to the non-

manufacturing sector from more than 26.8 per cent to 22 per cent by June and 16 per

cent by year-end. It is reported that many banks have already changed their lending

strategies, especially on property loans, to ensure that they remain within the limit. This

combined with higher borrowing rates - borrowers must now pay in excess of 20% for

loans – is likely to cause a setback in the property sector in 2011.

…but other measures will help in the

longer term

While this counter-inflationary stance has negative implications for the property sector,

other measures may be more useful in the medium and longer terms. Investment in the

property sector has been encouraged via regulation, including allowing foreigners to

purchase land and property and, on the banking side, through some relaxation in the

terms of lending to private individuals, such as lending at LTV levels of 70% and on

longer 15 year repayment terms.

Foreign direct investment (FDI) is also

important but slowing

Vietnam has benefited from a substantial amount of foreign direct investment (FDI), with

actual disbursements totalling US$11bn. FDI tends to require both commercial office

space as well as residential development which is important for the property sector. For

2011 the government has set a target of US$20bn with US$11.0m – US$ 11.5m expected

to be disbursed, and hopes also to raise its quality. That means targeting key areas,

branches, sectors and regions, while focusing on infrastructure and technology, helpful

indirectly to the progress of the broader economy. A shortfall for the first five months,

which has so far brought in US$4.7bn, 23% of the target, suggests that the government

may be too optimistic.



19

SUMMARY AND CONCLUSIONS

The investment case for Aseana rests on the following:

Attractive growing economies… Target investments are primarily high end developments in the commercial, residential

and hospitality sectors of the principal cities of Malaysia and Vietnam. Both countries

have sound potential economic attractions in the longer term – rising living standards,

urbanisation, supportive governments encouraging growth and high levels of FDI.

…well exploited by the Development

Manager

The real estate opportunities are well exploited by Aseana’s experienced,

knowledgeable hands-on Development Manager, part of Ireka Corporation Berhad.

Ireka has a proven track record in property development and investment, and

established relationships throughout south east Asia.

Significant unrealised value gains On Q1 2011 valuations, the unaudited NAV was US$190.4m and on a per share basis

US¢89.6. The estimated unaudited realisable RNAV was US$245.4, US¢115.5 per

share, indicating a total potential gain of US$55m. That amounts to US¢25.9.

…particularly in Malaysia The largest potential gains may be measured by taking the project RNAV, as a guide

to market value, and relating it to the NAV or cost, whichever applies. Based on this

approach, the highest mark-ups were shown by the KL Sentral office towers and

hotel, SENI Mont’ Kiara and, in Vietnam, the International Hi-Tech Healthcare Park.

…now accounting for 78% of the

portfolio

Excluding cash and other assets and liabilities, the portfolio NAV stood at

US$170.07m (US¢80.02 per share) with a split of 78% Malayasia, 22% Vietnam.

There are currently 6 ‘active’ projects in Malaysia and 4 in Vietnam. Current anti-

inflation measures being taken by the Vietnam government and Central Bank could

slow the growth of the property sector in the short term.

Sound moderately geared balance

sheet

Operationally and financially, the Company is in good shape with low gearing and no

pressing financial commitments although another MTN package will be assembled to

finance the pipeline of existing projects. It is not envisaged that Aseana will

undertake more projects in the near term, the focus being on the completion and sale

of existing works, though it has headroom for further investments.

Sales revenues will rise through 2011 Progress on the sales of both residential and commercial properties in Malaysia

should continue through the year. Sales revenues in 2011 will be generated by units

in SENI Mont’ Kiara and the Phase 2 retail lots of the Sandakan Harbour project.

Broker estimates a cash return to

shareholders of US¢135 in 2015

The house broker, Panmure Gordon, expects an acceleration of progress after 2012,

with rising gross margins and returns to shareholders. It forecasts a cash return of

US¢135 in 2015 when Aseana, reaching the end of its seven year life, sells off all

projects except Queen’s Place (expected completion 2017). Some return of capital

may be contemplated by management before 2015.

…equating to a present discounted

value of US¢92

At US¢135, the discounted present value equates to US¢92.0, a premium to the

current market price (US¢51.5) of 79%. On a worst case scenario, with all projects in

Vietnam either shelved or cancelled, the broker estimates Aseana would still be

worth US¢85 per share, a 65% premium to the current level.



20

COMPANY HISTORY & OVERVIEW

Main market listing in April 2007

Aseana Properties Limited (‘ASPL’)

was incorporated in Jersey in early

2007 to invest in property

development projects in Malaysia

and Vietnam. It was listed on the

Main Market of the London Stock

Exchange in April 2007, having

raised US$152.3 million (net) via a

placing of 162 million shares at

US$1 per share.

Target properties are residential,

commercial and hospitality

Aseana’s business model is to

acquire, develop and redevelop

upscale residential, commercial

and hospitality projects, usually at

the pre-construction stage. It will

also selectively invest in projects

under construction and completed

projects. It invests both as the sole

principal and, where appropriate, in

joint arrangements with third

parties with relevant experience or

local knowledge, usually retaining

management control.

Manager is part of Malaysian listed Ireka

Group

Ireka Development Management Sdn Bhd (IDM), which has day-to-day management

responsibility, is a wholly-owned subsidiary of Ireka Corporation Berhad (ICB), a

company listed on the Bursa Malaysia (formerly the Kuala Lumpur Stock Exchange)

since 1993 and which has over 40 years of construction and property development

experience. ICB acquired 48.9 million shares or 19.56% in Aseana in exchange for the

Company’s first five properties at listing. This stake was subsequently increased to

23.02% following the cancellation of shares.

Management fee 2% of NAV

...plus performance fee, yet to be paid

In addition to managing the property portfolio, IDM has responsibility for the introduction

and facilitation of new investment opportunities, and it may also be a co-investor with

Aseana on certain projects, such as KLCC Kia Peng. For these activities, It receives (i)

a quarterly management fee in advance equivalent to 2% pa of Aseana’s NAV, and (ii)

a performance fee equivalent to 20% of the extent to which the NAV per share exceeds

a benchmark. If the relevant NAV per share does not increase from one period to

another, no performance fee is paid, which has been the case since Aseana’s IPO.

Initial seven year fund life Aseana was set up with an initial life span of seven years, though it can be continued

on a vote by shareholders, the first occasion for which will occur at the AGM in 2015.

Given the protracted development time of some projects, it is essential for the fund to

continue.



21

DIRECTORS ASEANA PROPERTIES

NON-EXECUTIVE CHAIRMAN Mohammed Azlan bin Hashim 1 2

Azlan was appointed NEC in March 2007. He is also Chairman of Westcomb Financial Group Limited

and Asiasons Capital Limited, and a director of Parkway Holdings Limited which are public listed

companies on the Singapore Exchange. In Malaysia, he is Chairman of several public listed entities,

listed on Bursa Malaysia, including D&O Ventures Berhad and SILK Holdings Berhad. He has served

as Chief Executive of Bumiputra Merchant Bankers Berhad, Group Managing Director of Amanah

Capital Malaysia Berhad and Executive Chairman of Bursa Malaysia Berhad Group.

NON-EXECUTIVE DIRECTOR Christopher Henry Lovell 1

Mr Lovell is lawyer who has practised in Jersey since 1979. He was a partner in Theodore Goddard

between 1983 and 1993 before setting up his own legal practice in Jersey. In 2000 he was one of the

founding principals of Channel House Trustees Limited, a Jersey regulated trust company, which

was acquired by Capita Group plc in 2005, when he became a director of Capita’s Jersey regulated

trust company. He joined Governance Partners LP, an independent corporate governance practice,

on his retirement from Capita in January 2010. His other current NED positions include Treveria Plc,

NR Nordic & Russia Properties Limited and Public Service Properties Investments Limited

NON-EXECUTIVE DIRECTOR David Harris 2 3

Mr Harris is currently Chief Executive of InvaTrust Consultancy Ltd, a company that specialises in the

provision of investment marketing services to the Financial Services Industry in both the UK and

Europe. He was formerly Managing Director of Chantrey Financial Management Ltd, a successful

investment and fund management company linked to Chartered Accountants, Chantrey Vellacott.

From 1995 to 2000 he was Director of the Association of Investment Companies overseeing

marketing and technical training. He is currently a non-executive director of a number of quoted

companies in the UK including Character Group plc, COBRA Holdings plc, Small Companies

Dividend Trust plc, F&C Managed Portfolio Trust plc and Manchester & London Investment Trust plc.

NON-EXECUTIVE DIRECTOR Ismail Shahudin 1 3

Ismail was appointed to the Board of Aseana in March 2007. He is chairman of SMPC Corporation

Berhad and also serves as Independent Non-Executive board member of several Malaysia public

listed entities, among others, Malayan Banking Berhad which is Malaysia’s largest bank, Plus

Express Berhad, Mutiara Goodyear Development Berhad, EP Manufacturing Berhad, and UEM

Group Berhad, is a non-listed wholly owned subsidiary of Khazanah Nasional Berhad, one of the

Malaysia government’s investment arms.

NON-EXECUTIVE DIRECTOR John Lynton Jones 2 3

John is chairman of Bourse Consult, a consultancy that advises clients on initiatives relating to

exchange trading, regulation, clearing and settlement. He has an extensive background as a chief

executive of several exchanges in London, including the International Petroleum Exchange, the OM

London Exchange, and Nasdaq International (whose operations he set up in Europe in the late

1980s). John serves on the panel of City experts created by the Corporation of the City of London,

was the founding chairman of the Dubai International Financial Exchange from 2003 until 2006, and

is on the board of Kenetics Group Limited, an AIM-listed company.

NON-EXECUTIVE DIRECTOR Gerald Ong Chong Keng

Gerald is the CEO of Singapore based PrimePartners Corporate Finance Group and has over 20

years of corporate finance related experience at various financial institutions providing a wide variety

of services such as advisory, M&A activities and fund raising exercises. He has been the Chairman

of the Singapore Investment Banks Association Corporate Finance Committee since 2007.

1 – Audit Committee 2 – Nomination Committee 3 – Remuneration Committee



22

MANAGEMENT TEAM IREKA DEVELOPMENT MANAGEMENT

CHIEF EXECUTIVE OFFICER Lai Voon Hon

He is the CEO of IDM and Executive Director of Ireka Corporation which he joined in 1994 as the

Group General Manager. He was appointed to the Board of Directors in 1996 and is also a Director

of several subsidiaries within the Ireka Group. An architect by profession, he has practiced in

London, Hong Kong and Malaysia prior to joining Ireka. He is a registered Professional Architect with

the Board of Architects, Malaysia.

CHIEF FINANCIAL OFFICER Monica Lai Voon Huey

She is the CFO of IDM and Executive Director of Ireka Corporation which she joined as the Group

Financial Controller in 1993. She was appointed to the Board of Directors in 1999 and is also a

Director of several subsidiaries within the Ireka Group. She worked for Ernst & Young in England and

KPMG in Hong Kong prior to joining Ireka. She is a fellow member of several institutes that include

the Institute of Chartered Accountants, England and Wales; Chartered Accountants, Malaysia; and

the Malaysian Institute of Taxation.

CHIEF INVESTMENT OFFICER Chan Chee Kian

He is the CIO of IDM. He was previously a management and strategy consultant with Accenture in

Singapore, Bangkok and Kuala Lumpur where he advised a broad range of clients including large

multi-national companies, Government-linked agencies and local enterprises throughout the Asia

Pacific region on strategic and operational issues. He graduated from the University of Bristol in

England with First Class Honours in Civil Engineering.

CHIEF OPERATING OFFICER Lim Ech Chan

He is the COO of IDM and previously worked as the Assistant Director of Planning for City Hall of

Kuala Lumpur, as a general manager of a publicly listed property development company, and as a

Director of GDP Planners, a premier architectural firm in Kuala Lumpur. He is a registered

Professional Town Planner in Malaysia and a member of the Royal Town Planning Institute, London.



23

ASEANA INFORMATION

Registered 12 Castle Street

Address St Helier

Jersey JE2 3RT

Channel Islands

Website www.aseanaproperties.com

IDM INFORMATION

Head office Level 18, Wisma Mont’ Kiara

No 1 Jalan Kiara, Mont’ Kiara

50480 Kuala Lumpur

Malaysia

Telephone +603 6411 6388

LEADING SHAREHOLDERS

As at 16th March 2011 %

Ireka Corporation Berhad 23.02

Legacy Essence Limited 18.39

Henderson New Star 12.35

European Clearing 12.31

Standard Life Investments 7.06

Dr Thong Kok Cheong 4.99

Funds managed by Cayenne Asset Mgt 4.51

City Insights contacts: Chris Munden [email protected]

Tony Cooper [email protected] City Insights Limited 131 Finsbury Pavement, London EC2A 1NT Tel: 44 (0) 20 7920 3190

Fax: 44 (0) 20 7920 3151

Income Statement

Year ended 31st December 2008 2009 2010

Figures in US$000

Revenue 38,369 115,256 179,345

Cost of sales -36,112 -100,746 -177,184

Gross profit/(loss) 2,258 14,510 2,161

Other income 82 248 679

Administrative expenses -1,382 -1,064 -1,017

Foreign exchange (loss)/gain -10,171 1,827 -670

Management fees -4,744 -4,196 -3,994

Other operating expenses -15,671 -7,890 -2,816

Operating profit/(loss) -29,628 3,435 -15,693

Investment income 4,534 2,115 794

Finance costs -357 -595 -534

Impairment of investment in associate -1,957 0 0

Share of results of associated company -4 -607 0

Profit/(loss) before tax -27,412 4,348 -15,433

Tax -1,143 -3,635 -5,795

Profit/(loss) after tax -28,555 713 -21,228

Balance Sheet


Figures in US$000

Property, plant and equipment 348 1,070 4,497

Available-for-sale investments 13,024 17,224 22,052

Intangible assets 10,694 17,174 17,174

Land held for property development 17,419

Others 12,760 7,167 19,400

Non-current assets 54,243 42,635 63,123

Inventories 0 399,040 431,473

Property development costs 322,291

Trade and other receivables 16,939 24,392 31,499

Amount due from associate 0 785 382

Cash and cash equivalents 67,252 61,957 150,385

Current assets 406,482 486,174 613,739

Total assets 460,726 528,809 676,862

Trade and other payables -143,626 -84,504 -112,940

Bank loans and borrowings -3,063 -36,976 -68,463

Medium term notes

-72,923

Current tax liabilities/deferred revenue -1,926 -112,120 -201,099

Current liabilities -148,614 -233,600 -455,425

Bank term loans -45,801 -20,147 -21,176

Long term loans -47,326 0

Medium term notes 0 -62,737

Amount due to non-controlling interest -2,892 -2,887 -3,048

Non-current liabilities -96,019 -85,771 -24,224

Total liabilities -244,633 -319,371 -479,649

Net assets 216,093 209,438 197,213

Cash Flow


Figures in US$000

Net cash flows (used in)/from op. activities -45,713 -13,906 66,381

Acquisition of subsidiaries, net of cash -4,832 -7,630 -18

Fixed assets acquired net of disposals -1,382 -764 -3,556

Purchase of available-for-let investments -13,024 -4,200

Fin. income/advances/repayments/other 57 3,558 1,197

Net cash flows from investing activities -19,180 -9,036 -2,377

Repayment of borrowings -14,065 -37,838 -44,763

Drawdown of borrowings 32,093 49,063 72,590

Repayment of finance lease liabilities -26 -40

Share buy back 0 -6,007

Net cash flows from financing activities 18,002 5,178 27,827

Cash and cash equivalents at beginning of period 120,121 62,856 46,996

Effect of changes in exchange rates -10,375 1,904 2,102

Net increase/(decrease) in cash and cash equivalents -46,890 -17,764 91,831

Cash and cash equivalents at end of period 62,856 46,996 140,929

This document is designed to 'inform and educate' and is intended for professional advisers. The information contained in this document has been compiled from sources believed to

be reliable, but no warranty, expressed or implied, is given that the information is complete or accurate or that it is fit for a particular purpose. All such warranties are expressly disclaimed and excluded. Any opinions, recommendations and forecasts referred to may have been superseded and thus not necessarily be the current opinions, recommendations

and forecasts of the relevant analyst/broker.

This document is not an offer to buy or sell, or a solicitation of an offer to buy or sell, the securities mentioned. Any recommendations referred to do not necessarily imply the suitability of particular securities for individual situations. The value of securities and the income from them may fluctuate. It should be remembered that past performance is not

necessarily a guide to future performance and that some companies may be pre-profits and/or pre-revenues, and therefore are high risk situations. You are strongly advised to have a professional adviser and to contact him/her before entering into any contract to buy or sell any security.

By reading this document, I confirm that I have read and understand the above, that I am a professional investment adviser, and that I shall not hold City Insights or any of its members and connected companies liable for any loss that I may sustain should I decide to buy or sell any of the mentioned securities.

http://www.aseanaproperties.com/

mailto:[email protected]

aseana properties. 11 06 03 asean… · operationally, aseana should, by the end of 2012, complete...

Documents