Proposal for Internal Case Competition

Proposal for Internal Case Competition

Spring 2012 Stock Pitch Competition 23 February, 2012 Spring 2012 Stock Pitch Competition Agenda 1 About the Stock Pitch Competition 2 Student Investment Fund update 3 Competitions Judges 4 Stock Pitch Finalists 5 Student Presentations 6 Judges final decision Spring Autumn 2011 Stock Pitch Pitch Competition Competition Stock Competition Spring 2012 2012 Stock Pitch Competition About the Stock Pitch Competition (I) Objectives Select stocks for the Student Investment Fund Allow students to practice a fundamental skill for Investment Management and Investment Management interviews Description Held twice a year (Spring/Autumn)

5 finalists chosen to present their ideas to judges from sponsoring firms Top placed students will represent the School at the inter business school Alpha Challenge held in the US Autumn 2011 StockPitch Pitch Competition Spring Stock Competition Spring 2012 2012 Stock Pitch Competition About the Stock Pitch Competition (II) Rules Participants have to select a stock that represent a good investment opportunity and put together a convincing recommendation All participants have to submit a one-page summary of their recommendation using a predetermined template for review by the judges Company must be listed on one of the following exchanges: USA: NYSE, NASDAQ, AMEX Canada: TSE, Canadian Venture Exchange Europe: LSE, Paris Bourse, Deutsche Bourse, Amsterdam SE, Madrid SE, Brussels SE, Swiss Exchange, Stockholm SE Asia: Australia SE, Hong Kong SE, Singapore SE Market capitalisation must be over $50m Daily Liquidity/Volume: >$250k (3mo avg.) Finalists will be invited to pitch their idea in front of the judges at the final round Spring 2012 Stock Pitch Competition Agenda 1 About the Stock Pitch Competition 2 Student Investment Fund update 3 Competitions Judges 4

Stock Pitch Finalists 5 Student Presentations 6 Judges final decision Spring 2012 Stock Pitch Competition Student Investment Fund update (I) Performance update as of 20th February 2012 SIF MSCI All Country World Index Over/Under-performance Spring 2012 Stock Pitch Competition Since inception 109.5% 86.8% 22.7% 1 Year -2.7% -7.3% 4.7% YTD -0.03% 3.2% -3.2% Student Investment Fund update (II) Portfolio Composition: GBP 276,880 in equities and GBP 3,972 in cash Spring 2012 Stock Pitch Competition Agenda 1 About the Stock Pitch Competition 2 Student Investment Fund update 3

Competitions Judges 4 Stock Pitch Finalists 5 Student Presentations 6 Judges final decision Spring 2012 Stock Pitch Competition Competitions Judges Daniel M. Brocklebank Orbis Mr. Brocklebank joined Orbis in 2002 and is now a Director of the Company. He has primary responsibility for the UKbased team of global sector investment analysts and has previous experience at Arthur Andersen. Master of Arts (Honours) in Politics, Philosophy and Economics (Brasenose College, University of Oxford), Chartered Accountant, CFA. Jon Guinness Fidelity Worldwide Investment Mr. Guinness joined Fidelity in of 2005 as an MBA intern and re-joined Fidelity in Autumn 2006, upon graduating from LBS. He has covered UK Non-Food Retail, UK Housebuilders and Builders, and Large Cap Telecoms, and was a TMT Team Leader..Now Jon covers US Consumer companies for the Global Team and has previous experience at Bain. He has a Masters Degree from LSE and graduated in Economics from Cambridge University. Alexandra Perricone Sanford C. Bernstein Alexandra Perricone joined Sanford C. Bernstein in 2009 as Associate Director of European Research. Ms Perricone started her career in fixed income sales at Nomura and then moved into equity research, first at Dresdner Kleinwort and then at HSBC. In 2006, she joined Lehman Brothers to run the Graduate Training and Development Programme for the Investment Banking Division. Immediately prior to joining Sanford C. Bernstein, Ms Perricone was co-Head of Soft Skills Training for Moody's Analytics. Alexandra graduated in Modern Languages at Oxford University. Spring 2012 Stock Pitch Competition Agenda 1 About the Stock Pitch Competition 2 Student Investment Fund update 3 Competitions Judges

4 Stock Pitch Finalists 5 Student Presentations 6 Judges final decision Spring 2012 Stock Pitch Competition Stock Pitch Finalists JP Monforte MIF 2012 Dell Inc. Samuel Kim MBA 2012 Lifestyle International Holdings Ltd Yabing Wu MiM 2012 Altria Group Inc. Harshita Rawat MBA 2013 SanDisk Corporation Stelios Fragos MBA 2013 Cheniere Energy Inc. Spring 2012 Stock Pitch Competition Agenda 1 About the Stock Pitch Competition 2 Student Investment Fund update 3 Competitions Judges 4 Stock Pitch Finalists 5

Student Presentations 6 Judges final decision Spring 2012 Stock Pitch Competition LBS Stock Pitch 2012 JP Monforte Dell in a nuthsell (i) Founded in 1984 by Michael Dell Market cap of $ 32.6 billion Dell sells desktops, notebooks, servers, storage, services, and software and peripherals to enterprises and consumers across the globe Dell in a nutshell (ii) Revenues by Business Unit Global Consumer; 20.09% Global Large Enterprise; 28.97% Global Small and Medium Business; 23.54% Global Public; 27.40% Revenues by product Servers and Desktop PCs;Networking; 12.37% 23.88% Storage; 3.73% Services; 12.48% Mobility; 30.85% Software & Peripherals; 16.69% Historical Performance Sales

EBITDA 70000 6000 60000 5000 50000 4000 40000 3000 30000 2000 20000 1000 10000 0 0 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Net Income 4000 3500 3000 2500 2000 1500 1000 500 0 Net cash 12000 10000 8000 6000 4000 2000

0 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Market share Annual Share WW Client PCs USA EMEA Asia Pacific Japan Desktop PC Portable PC x86** Consumer SMB1 Public Large Enterprise2 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 13% 15% 16% 17% 18% 16%

14% 14% 13% 13% 24% 9% 4% 6% 29% 9% 5% 7% 32% 10% 6% 9% 35% 11% 6% 11% 36% 12% 7% 12% 33% 12% 7% 14% 29% 11% 7% 14% 29% 11% 9% 14% 24% 9% 8% 12%

23% 10% 10% 10% 12% 14% 19% 15% 15% 22% 17% 16% 25% 18% 17% 25% 17% 18% 26% 16% 17% 26% 15% 14% 25% 15% 14% 27% 13% 12% 27% 14% 12% 28% 6% 12% 20% 30% 10% 12%

19% 30% 12% 13% 15% 30% 13% 14% 17% 31% 12% 15% 21% 32% 11% 14% 17% 25% 8% 14% 19% 29% 9% 14% 20% 31% 9% 12% 21% 32% 9% 13% 18% 29% 3Q11 HP Lenovo Dell Acer Asus Top 5 Worldwide

18% 14% 12% 10% 7% 60% 3Q11 US HP 29% 22% 11% 8% 7% 77% Dell Apple Toshiba Lenovo Top 5 Competitors Global competitors HP, Lenovo, Acer and Asus Dell is number 3 Together they control 60% of the global PC market US market represents 50% of Dells business HP, Apple, Toshiba and Acer Dell is number 2 Together they control 77% of the US PC market Business Strenghs Utility model: computers/servers/data storage have become a necessary tool to run a business, making it a non-discretionary expenditure by companies Leadership: desktops and laptops have become a commodity, making scale a crucial component of profitability. Oligopoly: the global market for desktop is highly concentrated among few players, which makes the market more rational in pricing and supply. The top 5 players have approximately 60% of market share worldwide and 77% in the US. Customer service: unlike its peers Dell has since its birth employed a direct sales process which gives it a competitive edge. Balance sheet flexibility: the large net cash position of Dell provides it with many shareholder value-enhancing opportunities such as share buy-back, dividends or acquisitions. Financial Assesment USD MM

2009 2010 Free Cash Flow 61101 4243 6,94% 2478 4,06% 1454 52902 3505 6,63% 1433 2,71% 3539 61599 4686 7,61% 2635 4,28% 3525 62523 4752 7,60% 3655 5,85% 3555 63461 4760 7,50% 3173 5,00% 3596 Mkt Cap Net cash Mkt Cap ex-cash 18833 7294 11539 25323 7075 18248

25686 8393 17293 32625 8393 24232 32625 8393 24232 P/E 7,60 4,66 7,7% 12,6% 17,67 12,73 14,0% 19,4% 9,75 6,56 13,7% 20,4% 8,93 6,63 10,9% 14,7% 10,28 7,64 11,0% 14,8% Sales EBITDA EBITDA margin Net Income NI margin P/E ex-cash FCF Yield FCF Yield ex-cash ke 10%

g 0% FCF 2012E 3.555 Firm value 35.547 Net cash 8.393 43.940 # shares 1.797 Target price 24,46 Current price 18,16 Upside 2013E 2012/11 2013/11 1,5% 1,4% 1,5% 0,8% 38,7% 9,7% 0,8% 1,2% 11,0%

-1,6% 9,5% 24,8% 46,8% 81,4% 12,0% -6,2% 3,6% 16,5% 34,7% 61,9% Sensitivity Analysis Valuation Equity value 2011 2012E 34,7% 34,7% -4,0% -2,0% 0,0% 2,0% 4,0% 8,0% 16,5% 34,7% 61,9% 107,3% 198,1% 9,0% 10,0% 9,5% 3,6% 24,8% 16,5% 46,8% 34,7% 81,4% 61,9% 143,6% 107,3% Peers US MM Qualcomm Cisco Apple Microsoft

Intel Dell HP AMD RIM Market Cap 105088 108592 462642 261456 135905 32589 59382 5220 7957 P/E LTM 21,06 14,23 14,13 11,50 10,76 8,94 7,49 6,81 3,43 Rank 9 8 7 6 5 4 3 2 1 Net Cash 19919 27763 81570 40851 8068 8368

-22591 -102 2121 Net Cash % of Mkt Cap 19% 26% 18% 16% 6% 26% -38% -2% 27% Mkt cap ex-cash 85169 80829 381072 220605 127837 24221 81973 5322 5836 Operational P/E 13,43 8,11 9,62 9,78 10,22 6,31 9,98 12,01 2,64 Rank 9 3 4 5 7 2 6 8

1 Source: Bloomberg Risk and mitigations Risk Large net cash position (~25% of market cap) could prompt the company to invest poorly Dell recently created a new software group, which can be seen as a sign for M&A activity US tax laws affect the companies ability to repatriate excess cash Technological innovations could jeopardize the companys business Weak economic environment could promote greater competition in the market Mitigation Part of the cash is held at overseas subsidiaries which limits the companys hability to misuse it Company has been engaging in share buybacks (target for 2012 is ~700 mio) Current economic scenario is pushing companies to lobby US congress to repatriate the cash The PC market is more mature and less volatile then other tech segments The concentration of the industry should enable players to maintain profitability APPENDIX GDP vs. IT Spending 0.05 0.04 0.03 0.02 GDP 0.01 -0.06 -0.04 -0.02 0

0 0.02 0.04 0.06 0.08 0.1 0.12 -0.01 -0.02 -0.03 World US -0.04 Total IT Spending Source: Bloomberg IMC Stock Pitch Competition Lifestyle International Holdings Ltd Samuel Kim (MBA2012) 23 February 2012 Executive Summary (HK$21, TP HK$26, Rating Buy) My recommendation Buy: Lifestyle International Holdings Limited (HK$34.2 bn MC) TP: HK$26, 31% upside from current (including dividend yield) My target price is based on SOTP and DCF analysis, at an implied 2012E P/E multiple of 18x on my numbers which are 16% above consensus. Currently trading in line with peers with similar ROE In the short-term, Lifestyle is a play on high-end consumption and rise in Chinese tourists spending in HK In the long-term, Lifestyles growth will be driven by the emergence of department stores as one of the key retail formats in China and managements ability to capture the upside. Appreciating value of owned store properties is an added bonus I expect China will replicate the Korea/Japan story - consumption in department stores will enter the accelerated growth phase when Chinas GDP per capita grows from US$10K to 20k (sales growth +10% CAGR over 10 years, market cap 5-10x) I believe the durability of growth potential and margin expansion are not fully reflected in the

current valuation 1 Investment Rationale and Risks Investment Rationale + Rise in disposal income of Chinas affluent middle/upper class will lead to a double digit growth in topline in the foreseeable future (~15% topline / ~20% EPS growth) + Strong franchise with sound retail management and consistent execution (Dominant market position in HK, negative working capital and sound capital allocation) + Operating leverage from asset-heavy model will lead to continued margin expansion (operating margin trending up towards 18-19%) + Stable, prudent expansion strategy with greater reliance on organic growth (strong balance sheet / smaller margin dilution from expansion compare to peers) 2 Investment Risks / Concerns Investment Risks - Susceptibility to deterioration in HK retail environment Risk Mitigant I expect HK will continue to attract Chinese tourists due to its concentrated and high-end retail environment with considerable price difference to mainland (~30%) - Intensifying competition and potential oversupply in China Risk Mitigant Lifestyles management has been prudent in its expansion plan and have careful executed its entry strategies in China (i.e. Shanghai). I believe its management will continue to be patient and opportunistic when expanding in China - Increase in land costs leading to longer payback periods. Risk Mitigant Managements track record of identifying good land and development execution gives some comfort that its new stores will breakeven in a reasonable time frame (2-4 years) - Decrease in value of its commercial properties Risk Mitigant Value in its HK stores will hold. Its Chinese stores were bought much earlier (Shanghai before 2004) and mainly under JV arrangement (50:50) 3 Industry Conclusion and Stock Picking Framework I am positive on the sector however, important to pick stocks based on the business model HK Department Store Sector: - Stable growth story in an established market (9.4% CAGR 2003-2010) - Concentrated market with top 6 names with +75% M/S (Lifestyle with ~22% M/S) - Influx of Chinese tourists (12.6% CAGR 2005-2010) and increasing demand for luxury goods will drive topline and margins - Good environment for incumbents China Department Store Sector: - Strong growth (12.4% CAGR 2003-2010) and fragmented market with top 10 players with ~15% M/S - Government policy directed to promote consumption - Polarized growth in disposable income driver behind luxury retailers +30% y-o-y growth - Expect to follow Korea/Japan department store consumption/growth pattern Stock Picking: I prefer department stores with Asset Heavy over Asset Light models Prudent Expansion over Rapid Expansion strategies Regional Concentration over National Coverage

4 Evidence Behind Durability of Growth - Korea/Japan Case Study Chinas GDP per Capita (2011) is ~$8,400. I expect strong and sustained growth in department stores sector when going from $10k to $20k Top Retailers by Market Cap JAPAN GDP per capita (US$) 39,411 37,664 24,249 8,930 Department stores in a sweet spot as GDP per capita rose from 10k to 20k 1980 1 2 3 4 15 2 6 3 47 58 69 710 Retailers Mitsukoshi Itoyokado Daie Marui Mitsukoshi Mycal Itoyokado H2O Retailing Daie Aeon Marui Uny Mycal Maruzen H2O Retailing Aeon

Seven Eleven 8 Uny 10 Seven Eleven Market Cap (US$) 874 847 726 587 872 525 847 455 726 443 587 384 525 366 455 443 350 9 Maruzen KOREA 1990 Retailers 1 Itoyokado 2 Seven Eleven 3 Matsuzakaya 4 Marui 1 5 Itoyokado Mitsukoshi 2 Seven Eleven 6 Takashimaya 3 Matsuzakaya Isetan 4 7 Marui

Daie 5 8 Mitsukoshi Aeon 6 9 Takashimaya 7 10 Isetan Nagasakiya 8 9 10 384 366 350 Daie Aeon Nagasakiya 3,279 3,107 2,917 1 2 3 4 5 6 7 8 9 10 1832.011352 1990 1 2 3 1 2 3 FamilyMart Isetan Takashimaya Market Cap (US$) 50,220 22,105 11,010 7,514

50,2205,899 22,105 4,818 11,010 7,5143,452 5,8992,614 4,8182,484 3,4522,199 2,614 2,484 2,199 1 2 3 4 5 6 7 8 9 10 Market 2009 Retailers Cap (US$) 1 Fast Retailing 19,587 2 7&I 18,175 3 Yamada Denki 6,395 4 Aeon 6,362 Fast5 Retailing 19,587 Lawson 4,316 7&I 18,175 6 Nitori 4,191 Yamada Denki 6,395 7 MisukoshiIten 6,362 3,491

Aeon 8 Shimamura 3,457 Lawson 4,316 9 Family Mart 2,834 Nitori 4,191 MitsukoshiIsetan 3,491 10 McDonalds 2,500 Shimamura FamilyMart Mc Donalds 19,150 3,457 2,834 2,500 19150.20576 9699.788584 6129.850045Market Retailers Cap (US$) Hyundai H&S 280 Shinsegae 196 Daegu Dept Store 55 Hyundai H&S Shinsegae Daegu Dept.Store 2000 Retailers 1 Seven Eleven 2 Itoyokado 3 Fast Retailing 4 Aeon Seven

Eleven 5 Marui Itoyokado 6 Lawson Fast Retailing 7 Skylark Aeon 8 Family Mart Marui 9 Isetan Lawson Skylark 10 Takashimaya 9,700 6,130 1,832 Similar to Japans case in 1980s, department stores are Koreas main retail format as GDP per capita goes from 10k to 20k Market Cap (US$) 10,042 9,643 5,106 4,879 10,042 3,851 9,643 3,355 5,106 3,355 4,879 3,279 3,851 3,107 3,355 3,355 2,917 280 196

55 1 2 3 4 5 6 7 8 9 10 Market 2000 Retailers Cap (US$) 1 Shinsegae 499 2 Hyundai H&S 146 3 GS Home Shopping 137 4 CJ O Shopping 92 Shinsegae 499 5 Daegu Dept Store 261 Hyundai H&S 146 6 Hyundai DFS 182 GS 7Home Interpark Shopping 137 163 CJ O 92 8 Shopping Hanwha Timeworld 104 Daegu Dept.Store 5 26 9

Lotte Midopa 9 Hyundai DSF 6 18 10 Grand Dept Store 7 Interpark 7 16 Market 2009 Retailers Cap (US$) 1 Shinsegae 8,698 2 Lotte Shopping 8,630 3 Hyundai Dept Store2,194 4 CJ O Shopping 733 Shinsegae 8,698 660 5 Lotte Midopa Lotte 6Shopping 8,630 484 GS Homeshopping Hyundai Store H&S 2,194 396 7 Dept Hyundai CJ O8Shopping 733 330 Interpark Lotte Midopa 660 9 Gwangju Shinsegae 175 GS Home Shopping 484 10 Daegu Dept

Store Hyundai H&S 396 111 Hanwha Timeworld Lotte Midopa Grand Dept.Store Interpark Gwangju Shinsegae Daegu Dept.Store 10 9 7 8 9 10 330 175 111 5 Lifestyle International (HK: 1212) (HK$21, TP HK$26, Rating Buy) HK/China Department Store Lifestyle Overview Lifestyle is a HK based department store operator of mid-high to high-end department stores in Hong Kong and China. The group currently operates 2 stores in HK under the SOGO brand and has expanded its stores portfolio to 3 in China under the Jiuguang brand. In 2010, HK contributed to 73% of total group sales and over 85% of group operating profit. Approximately 25-30% of HK sales are generated from crossborder Chinese tourists. Lifestyle adopts an asset-heavy model and focuses on developing 1 flagship store every 2-3 years. CEO owns +70% of the companys shares Valuation Current 22/02/2012 Market Cap $20.5 Target 34,186 EV $26 Upside

33,156 Shares 31% 1,691 FY ending Dec (HK$ mn) Revenue Y/Y Growth 2009 $3,756 6.7% 2010 $4,317 14.9% 2011E $5,260 21.8% 2012E $5,860 11.4% 2013E $6,624 13.0% EBIT Margin 14.9% 16.0% 16.7% 17.4% 17.8% Conversion Ratio 58.8% 63.4% 66.2% 69.5% 71.0%

EPS Y/Y Growth $0.59 27.2% $0.72 22.6% $1.00 39.0% $1.17 16.8% $1.36 16.0% 34.8x 44.1x 28.4x 36.0x 20.4x 25.9x 17.5x 22.1x 15.1x 19.1x P/E - Current P/E - Target Fwd PE Ave: 21.6x Ave (excl.GFC): 23.1x Min: 7.1x Max: 42.8x TP HK$26 (31% upside incl. div) based on: SOTP: HK$28 (implying Fwd 2012E PE of 20.6x) DCF: HK$25 (implying Fwd 2012E PE of 18.4x) Multiple: HK$27 (applying 20x Fwd 2012 PE). Potential Downside 16% downside if Chinese economy slows down below 7.5% 6 Lifestyle International (HK: 1212) (HK$21, TP HK$26, Rating Buy) Stable growth and margin expansion

Lifestyle experienced a stable growth on the back of strong performance of its flagship store and ramp-up of sales in its China stores Margin expansion is expected as: - Movement towards higher ticket item - Sales ramp-up in China stores will have positive contribution to earnings Key drivers of the revenue are growth in ticket size in HK and volume/ticket size growth in China Chinese tourists in HK are trading up to big ticket items (jewelry, watches and luxury brands) and this will continue to contribute growth in HK while China stores will benefit from volume growth, as well as increasing demand for luxury goods Key Revenue Driver (2011) 24.0% 22.0% 20.0% 4.0% 21.4% China Volume 2011 Gross Sales Growth 18.0% 4.3% 16.0% 14.0% 12.0% 13.6% 0.3% 10.0% 8.0% 6.0% 4.0% 2.0% 0.0% HK Ticket Size HK Volume China Ticket

Size 7 Lifestyle International (HK: 1212) (HK$21, TP HK$26, Rating Buy) Industry leading operational efficiency and sound capital allocation Lifestyle outperformed its peers in operational efficiency Lifestyle has low inventory days and has negative working capital due to: Distributes ~30% of FCF from operation as dividend - Strong bargaining power and merchandising skills and share buyback - Smaller number of stores and prudent expansion On 2-3 year cycle, it spends most of FCF from strategy operation for expansion of new stores - Self ownership of operating properties Despite its asset heavy model, Lifestyle has above industry average ROCE (13% vs. 11%) Total Sales Proceeds (2010) per Sqr m (HK$) 25,000 20,000 19,626 10,156 9,014 51.8 51.4 14.5 13.8 49.4 7,432 Golden Eagle Springland Intime Parkson Maoye 16.5 12.1 2006

20% 18% 16% 15% 15% 12% 11% 11% 10% 10% 7% 10% 8% 17% 11% 9% ROE 65.0% 45.0% 35.0% ROA 5.0% 2006 2007 2008 2009 2010 2011E 2009 2010 2011E

Div an Share Buyback 32.9% Capex 35.3% 40.0% 30.2% 26.2% 25.0% 15.0% 5% 2008 63.2% 57.4% 49.8% 55.0% ROCE 13% 11% 2007 Usage of FCF from Operation 75.0% 22% 10.0 0 Return on Capital 25% Inventory Days AP Days 19.2

20 10 0 Lifestyle 51.1 30 8,411 5,000 10% 55.5 40 10,000 20% 56.0 50 13,845 15,000 Working Capital 60 10.7% 2006 20.0% 13.5% 7.3% 2007 2008 2009 33.0% 32.7% 25.2%

15.5% 7.3% 2010 2011E Acquisitio n 8 Lifestyle International (HK: 1212) (HK$21, TP HK$26, Rating Buy) Valuation - SOTP SOTP used to carve out the value attributing to its department store retail operations, and value of its properties and other investments Key Figures HK$ m n HK$/Share Assum ptions HK Retail (CWB + TST) Property (CWB) 25,585 11,742 15.2 7.0 HK Total 37,328 22.1 China Retail (Shanghai, Suzhou) Property (Shanghai) Property (Suzhou) Dalian and other Itokin propoerties 2,062 1,980 3,658 743 1.2 1.2

2.2 0.4 China Total 8,444 5.0 Others Investment in Beirin Net Cash 830 1,372 0.5 0.8 Others Total 2,202 1.3 Total Value implied 2012E PE vs current share price 47,974 85% net profit contribution adjusted for rental expense, 18x 2012 PE 5.5% Cap rate, annual rental charge of HK$1,500/sf 15% of net profit adjusted for rental expense, 20x 2012 PE Value of RMB35,000/sq m Value of RMB17,500/sq m At cost At cost 28.4 20.9x +38.6% 9 Lifestyle International (HK: 1212) (HK$21, TP HK$26, Rating Buy) Valuation - DCF 3 Bear Case 2 Bull Case

1 Base Case HK HK Continued current retail environment Topline growing at CAGR 10% p.a. 20112015 Continued current retail environment Topline growing at CAGR 13% p.a. 20112015 Continued GDP growth at ~10% Topline growing at CAGR 15% p.a. 20112015 41,600 (1,030) 42,630 1,691 HK$ 25 23.0% 18.5x Hard landing (GDP growth at below 7.5%) Topline growing at CAGR 5% p.a. 2011-2015 EBIT contracts to expands to ~15% Case Applied = Bear Case Case Applied = Bull Case Case Applied = Base Case

6.43x 14.84x 20.41x Continued GDP growth at ~10% Topline growing at CAGR 18% p.a. 20112015 EBIT Margin expands to ~20% EBIT Margin expands to ~18% FY End: December (HK$ MM) 2011 Incom e Statem ent Total Gross Sales Proceeds 12,072 Grow th (%) 22.8% EBIT 2,019 EBIT Margin (% of GSP) 16.7% EBITDA 2,281 EBITDA Margin (% of GSP) 18.9% Net Profit 1,699 Prof it margin (%) 14.1% Adjusted Diluted EPS 1.00 Growth (%) 39.0% Average Share Price (HK$) 20.50 Slowdown in 2H2012-2013 Topline growing at CAGR 3% p.a. 2011-2015 China China China Market Multiples EV / Sales EV / EBITDA P/E DFC

Net Present Value Net Debt Equity Value # shares outstanding Value per share Upside / (dow nside) implied 2012E PE HK 2012 2013 2014 2015 13,447 11.4% 2,345 17.4% 2,637 19.6% 1,982 14.7% 1.17 16.8% 20.50 15,218 13.2% 2,704 17.8% 3,033 19.9% 2,295 15.1% 1.36 16.0% 20.50 17,083 12.3% 3,097 18.1% 3,467 20.3% 2,638 15.4% 1.57 15.1% 20.50

19,202 12.4% 3,456 18.0% 3,872 20.2% 2,956 15.4% 1.76 12.2% 20.50 5.71x 12.68x 17.46x 4.97x 10.84x 15.05x 4.34x 9.29x 13.07x 3.76x 8.11x 11.65x FY End: December (HK$ MM) 2011 Incom e Statem ent Total Gross Sales Proceeds 12,096 Grow th (%) 23.0% EBIT 2,089 EBIT Margin (% of GSP) 17.3% EBITDA 2,351 EBITDA Margin (% of GSP) 19.4% Net Profit 1,756 Profit margin (%) 14.5% Adjusted Diluted EPS 1.04 Growth (%) 43.7% Average Share Price (HK$) 20.50

Market Multiples EV / Sales EV / EBITDA P/E DFC Net Present Value Net Debt Equity Value # shares outstanding Value per share Upside / (dow nside) implied 2012E PE 6.41x 14.37x 19.74x 45,481 (1,088) 46,568 1,691 HK$ 28 34.3% 17.5x 2012 2013 2014 2015 14,181 17.2% 2,590 18.3% 2,897 20.4% 2,191 15.4% 1.30 24.9% 20.50 16,424 15.8% 3,123 19.0% 3,479 21.2% 2,653 16.2% 1.57

21.3% 20.50 18,378 11.9% 3,659 19.9% 4,057 22.1% 3,114 16.9% 1.85 17.6% 20.50 20,502 11.6% 4,064 19.8% 4,508 22.0% 3,470 16.9% 2.07 11.6% 20.50 5.38x 11.45x 15.80x 4.54x 9.29x 13.02x 3.92x 7.70x 11.07x 3.38x 6.66x 9.92x FY End: December (HK$ MM) 2011 Incom e Statem ent Total Gross Sales Proceeds 11,877 Grow th (%) 20.8% EBIT 1,997 EBIT Margin (% of GSP) 16.8%

EBITDA 2,254 EBITDA Margin (% of GSP) 19.0% Net Profit 1,678 Profit margin (%) 14.1% Adjusted Diluted EPS 0.99 Growth (%) 37.3% Average Share Price (HK$) 20.50 Market Multiples EV / Sales EV / EBITDA P/E DFC Net Present Value Net Debt Equity Value # shares outstanding Value per share Upside / (dow nside) implied 2012E PE 6.54x 15.03x 20.66x 2012 2013 2014 2015 12,296 3.5% 1,647 13.4% 1,913 15.6% 1,395 11.3% 0.83 -16.7% 20.50 12,463 1.4%

1,691 13.6% 1,961 15.7% 1,433 11.5% 0.85 2.9% 20.50 13,086 5.0% 1,785 13.6% 2,069 15.8% 1,517 11.6% 0.90 6.0% 20.50 13,740 5.0% 2,023 14.7% 2,320 16.9% 1,719 12.5% 1.02 13.5% 20.50 6.54x 17.81x 24.81x 6.47x 17.50x 24.11x 6.19x 16.70x 22.73x 5.90x 14.95x 20.03x 28,166 (1,008) 29,174

1,691 HK$ 17 -15.9% 20.3x 10 Lifestyle International (HK: 1212) (HK$21, TP HK$26, Rating Buy) Valuation Multiple Approach Lifestyle is currently trading at 20.5x/15.7x consensus 2011/12 PE, at discount to its historical Fwd PE range (average 23.1x excl. PE during GFC) Now is a good entry point- on the back of continued EPS growth and should trade between 20-25x Fwd PE range I believe in the durability of growth going beyond the consensus timeframe Department Stores Trading Comps EPS vs Fwd PE 0.60 Market Cap Ave Trading Vol (HK$ mn) (HK$ bn) 40x PE (x) 10-13 2011E 2012E EPS CAGR ROE 35x 0.50 Lifestyle 34.2 55.8 20.5 15.7 24.3% 21.2%

25x Golden Eagle 18.7 36.3 24.6 15.8 21.3% 29.8% 20x Parkson 26.6 33.8 19.0 13.7 18.4% 23.9% 6.3 60.1 12.9 7.7 25.8% 16.5% Springland 12.1 12.7 17.1

11.5 30.7% 14.6% Intime 19.1 73.6 19.0 12.7 25.4% 14.4% Maoye 11.4 39.9 14.7 7.9 33.0% 13.3% 7.9 6.8 12.4 10.1 NA 11.5% Average 17.5 11.9 25.6%

18.1% Median 18.1 12.1 25.4% 15.5% 30x 0.40 0.30 15x 0.20 10x 0.10 EPS Jan-12 Jul-11 Jan-11 Jul-10 Jan-10 Jul-09 Jan-09 Jul-08 Jan-08 Jul-07 Jan-07 Jul-06 Jan-06 5x

Jul-05 0.00 Lifestyle is trading in line with its peers. However, I expect multiple expansion for Lifestyle and the sector as a whole PCD New World 0x 1 yr Fwd PE 11 APPENDIX Sector Analysis HK Department Stores Competition Barrier to Entry Pricing Power Substitutes Trend Chinese Department Stores Medium Established market with top 6 dominating the market Medium-High Fragmented market with fierce competition Tier 1 cities already saturated High Incumbents with well established brands and prime location Lack of new prime location for new entrants Medium Prime location in Tier 1 cities already taken Tier 2-4 cities are currently underserved

High Incumbents have well established stores and can command high concessionaire rates Medium Most stores are relatively new and due to competition, offer discount to brands Low Department stores have steady market share Shopping malls and outright stores already exist Low-Medium Shopping malls and outright stores may take some pie of the retail sales from department stores Increasing ticket size due to Mainland Chinese tourist trade up on luxury goods Expansion into inland areas and other underserved cities 12 STOCK PITCH - ALTRIA GROUP, INC. YABING WU, MiM2012 2012/02/23 Company overview Date: February 16, 2012 Symbol: MO Exchange(s): NYSE Price: $29.54 Market Cap: $60.14B PE(ttm): 18.07 Avg Daily Liquidity: $13mm Altria Group is a holding company. As of Dec. 31, 2011, Altria Groups wholly owned subsidiaries included: - Philip Morris USA (PM USA) - John Middleton (acquired in 2007) - Ste. Michelle Wine - US Smokeless Tobacco Company (UST, acquired in 2009) - Philip Morris Capital As of December 31, 2011, Altria Group, Inc.s segments included cigarettes, smokeless products, cigars, wine and financial services. Business & Geographic segment Business segment

Geographic segment The company is primarily engaged in the manufacture and sale of cigarettes and other tobacco products, and operates primarily in the US. Source: Thomson Reuters Industry analysis: Defensive and sales growth Cigarette industry has a higher barriers to entry, less competition once it has established monopoly position Barriers to entry Demand growth in cigars and Cigars have become fashion smokeless accessories and are highly popular among the upperincome class. Sales growth in cigarette Relatively resistant to macroecono mics events U.S. Cigarette Consumption Falls 14% Since 2008, but Prices Rise 30% Tobaccos has been perceived as affordable indulgence among smokers Company analysis: business strengths Revenue generators Cost management Capture new trends through innovation and

acquisition Established brand allows Altria to consolidate its current presence and penetrate new market Acquisition of UST and John Middleton resulted in strong performance Strong market position gives tremendous bargaining power Continuously focused on cost reduction and manufacturing optimization program in the recent years. Generated approximately $300 million in UST integration cost savings as of December 2010 Effective cost savings will continue to increase profitability Altria Services will develop new products to capture more consumers Acquisition of UST has led to brand value leverage and market penetration in smokeless tobacco products. Company analysis: financial assessment The companys return on invested capital has averaged 22% over the past five years. Theres a steady earning growth and the company is able to slightly increase margins through effective cost control: Y/E 2008A 2009A 2010A 2011A 2012E Sales 15,957 16,824 16,892 16,619 17,365 EBITDA 5,142 6,234 6,540 6,543 7,537 EBITDA Margin 32% 37% 39% 39% 43% EPS 2.38 1.55 1.87 1.64 1.92 EPS growth -35% 21% -12% 17% Source: Bloomberg

Valuation: Trading comps Company Valuation Share price Shares outstanding Equity value Altria $ 29.65 $ 2,056.42 $ 60,972.85 Net Debt Enterprise value Net income hist projected Value drivers Sales Hist Proj 1 Reynolds American Lorillard Inc Inc $ $ $ (10,419.0) 50,553.9 41.42 582.91 24,144.13 Altria Group is trading at multiples in line with its peers (Reynolds American Inc. and Lorillard, Inc.). The price target for MO is $39.00 at 16x projected 2012 EPS. $ 114.00 $ 135.01 $ 15,391.14 (1,707.0)

22,437.1 (961.0) 14,430.1 3,390.0 4,290.0 $ 16,619.00 $ 17,365.25 $ $ 8,541.00 8,616.00 $ $ EBITDA Hist Proj 1 $ $ 6,543.00 7,537.44 $ $ 2,585.00 3,056.00 $ 1,929.00 2,034.38 EV / EBITDA Hist Proj 1 Diluted EPS Hist Proj 1 $ $ 1.64 1.92

$ $ 2.40 2.50 $ $ P/E Hist Proj 1 Generica valuation Enterprise value Net debt Equity value Shares outstanding Implied share price Source: Bloomberg 4,452.00 4,741.50 M ultiples EV / sales Hist Proj 1 7.99 8.01 EV / Sales Hist 49,359.50 (10,419.0) 59,778.5 2,056.4 29.07 Proj 1 49,541.33 (10,419.0) 59,960.3 2,056.4 29.16 Sector average 3.04 x 2.91 x

2.63 x 2.60 x 3.24 x 3.04 x 2.97 x 2.85 x 7.73 x 6.71 x 8.68 x 7.34 x 7.48 x 7.09 x 7.96 x 7.05 x 18.08 x 15.44 x 17.26 x 16.57 x 16.90 x 16.86 x 17.41 x 16.29 x EV / EBITDA Hist 52,097.06 (10,419.0) 62,516.1 2,056.4 30.40 Proj 1 53,119.27 (10,419.0) 63,538.3 2,056.4 30.90 PE Hist 59,025.52 (10,419.0) 69,444.5

2,056.4 33.77 Proj 1 69,878.22 (10,419.0) 80,297.2 2,056.4 39.05 Risks and Mitigants Key downside risks include: 1) Continued FDA regulations. But MO appears increasingly focused on increasing its agility and preparedness around FDA regulation, a trend which appears to be supported by the selection of Marty Barrington (a former General Counsel at PM USA) as incoming CEO and the companys partnership with Okono A/S. 2) Any large-scale unforeseen adverse tobacco litigation development 3) Potential state tax hikes (owing to large deficits and unfunded pensions). The recent trend has been for minimal state tax hikes with only two states raising taxes and one state actually reducing the cigarette tax in 2011. 4) Little exposure to the global tobacco industry. Primary focus on US market, high single market risk. Conclusion Recommend buying 1) industry advantages - defensive - high entry barriers 2) business strength - strong market position - new market penetration - effective cost management 3) attractive valuation: - high dividend yield (6%) - implied undervalue SanDisk Investment Thesis February 2011

Harshita Rawat | [email protected] Introduction Company Background SanDisk designs, manufactures and packages NAND flash based removable cards, embedded storage, USB drives, SSD and enterprise storage solutions Key statistics: Market cap: USD 11.4 bln Net Cash Balance : USD 3.7 bln Last Close : USD 48, EPS : USD 4.65 PE 10.3, EV/EBIT 6.5 Agenda for Discussion Industry overview Company overview Financial and Operating Performance Key Valuation Drivers Conclusion Industry Poised for Growth Smart Mobile Devices Driving Demand for NAND Source: SanDisk Analyst Presentation Industry Snapshot Will the Overcapacity Continue? Major players are Intel-Micron alliance, Samsung, SanDisk-Toshiba JV and Hynix Industry barriers to entry include complex NAND technology, licensing, patents and contracts with chip set manufacturers. Ability to build controllers for the memory key to shorter lead times for new technologies.

In 2011, amidst fear of supply constraints after the Japan Earthquake, global manufacturers ramped up supply. Supply from Japan, however, came back on track in record time. This led to an overcapacity leading to a worse than expected 34% decline in the Average Selling Price per gigabyte and a tough pricing environment for NAND manufactures. Smart Mobile Devices Leading Growth Leading Industry Growth Source: SanDisk Analyst Presentation Strong Company Powered By Sound Management Competitive Advantage Through Technology Changing Product Mix Through technology leadership, SanDisk defended operating Source: SanDisk Analyst Presentation margins of 25% in the last 2.5 years. Cost per gigabyte improved by 31% despite the strong yen. OEM segment is occupying increasing revenue share The vertically integrated business model enables the technology Owing to its recent acquisitions, SanDisk would derive 25% of its to be on the market at a remarkable pace revenue from SSD in 2014 vs. 3% in 2011. Differentiates through proprietary controllers along with firmware Does Cloud really hurt SanDisks business? While retail suffers, new architecture acquisition will enable caching solution used in servers Is low NAND pricing really bad for SanDisk? Led by Visionary Founder Company has repositioned itself to derive revenues from new product mix and cost effeciency Growing Revenues, Defensible Margins Revenue Growth, Defensible Margins Achieved Through Investments in Technology In FY 2011, revenue and Operating income grew 17% and 4.7%, respectively. Free cash flow yield was 7.58%. Solid balance sheet will allow SanDisk to make more aggressive network investments in the future SanDisk has a solid balance sheet that will allow it to make more aggressive investments in the future. Cost Savings Outperformed price declines by 3.7% 3.3% reduction of Gross Margin vs. 2010 was the result of 3.9% unfavourable movement in Yen Return on assets computed on total assets including cash Strong Operational Performance

Increasing R&D Spending Captive Supply Growth YoY Source: SanDisks Annual Report Source:SanDisks Annual Report 14% of R&D expense went to investment in new technologies vs. 8% for 2010. Cash conversion cycle improved from 85 days to 72 days in the last 2 yrs. To minimized operational risks, SanDisk has also been increasing captive supply and reducing dependence on third party foundries Strong Revenue Growth Accompanied by Defensible Margins 5 DCF Suggests 30% Price Upside Valuation Drivers Valuation DCF implies a fair value of $62 vs. the current price of $48 CAGR (2011-2015) revenue growth rate of 12% is less than the CAGR projected for industry as I modelled the fact that SanDisk will not maintain its current market share in the growing industry Changing product mix and technology invested in cost reductions will help the company defend around 25% EBITDA margin. Terminal Value is estimated using FCF growth of 2.5%. Terminal Values implies exit EV/EBITDA multiple of 5.5x A meeting with management should provide more guidance to accurately forecast Capex Lowest PEG vs. Semiconductor Companies Risks Cash conversion cycle improved from 85 days to 72 days in the last 2 yrs. Inability to perform cost reductions compared to decline in NAND pricing Increasing reliance on non captive supply A new technology/natural disaster that can disrupt the demand for NAND flash; Stronger Yen Underpriced Relative to Intrinsic Value of $62 Attractive Investment Opportunity Conclusions

Despite the attractive growth prospects, SanDisks stock is down 7.5% in the last one year due to fears that it cannot defend margins amidst declining NAND prices. Investors are underplaying the growth prospects of SanDisks core markets and the companys ability to deliver cost reductions through technology leadership. Run by strong management, SanDisk has repositioned itself to capture the growing Smartphone, SSD and Tablet market. Overall I believe that at a price of $48, the stock is undervalued relative to its intrinsic value of $62. Appendix 1: Revenue Mix and Bit Data Revenue Mix 2011 Unit sales of 760 million iNand qualified for 50% tablets and 60% android Cheniere Energy, Inc. Stock Pitch Competition by Stelios Fragos February 23rd, 2012 Cheniere - Business Overview Sabine Pass LNG Sabine Pass with Liquefaction Expansion Cheniere Energy, Inc. (NYSE AMEX:LNG1 is looking to export Liquefied Natural Gas ("LNG") from the US Gulf region. Initially, the company planned on importing LNG but subsequently changed its business plan and is developing a liquefaction facility at Sabine Pass, in Louisiana. 4 LNG trains: 18 mtpa capacity;

6 Capitalization Number of Shares (m) Share Price ($) Market Cap ($) Received all major regulatory approvals except for FERC. Key Financials (CQP) (in $m) All 4 trains are contracted: 20 year contracts; 2011A 2012E Revenues $290.5 $259.0 $2,812.6 $2,995.3 EBITDA $147.5 $214.2 $2,647.8 $2,830.5 2017E 2018E Common Unit Distribution ($) $1.70 $1.70 $3.00 $3.25 Key Financials (Cheniere) (in $m) 2011F $20.5 $0.0

$20.5 2012E $20.3 $0.0 $20.3 2017E $35.9 $406.2 $442.0 2018E $38.9 $440.0 $478.9 $0.0 $5.6 $692.8 $840.9 EBITDA -$27.6 -$18.0 $692.8 $840.9 Cash Flow / Share -$0.70 -$0.45 $5.19 $6.37 Reputable investment-grade counterparties; CQP Common Units Distributions CQP Subordinated Unit Distributions Total Cash Flow to Cheniere

Take-or-pay contracts. GP Cash Flow Note(1): Cheniere and Company to be used interchangeably throughout the presentation. 126.0 $13.78 $1,736.89 57 Yes, investors have been burned before, but the business has been significantly de-risked Company share price collapsed following the decrease in US natural gas prices. Cheniere refocused its strategy to take advantage of new global natural gas pricing dynamics Stock has been building momentum on the back of the following catalysts: DoE Approval in May 2011 Secured contracts for all 4 trains (2011-Q1 2012) Initiation of coverage (CS in Jan 12) Growth interest in LNG market globally could drive M&A activity Cheniere is an attractive M&A target 58 3-pillar Investment Approach

Assessing the Business Risks / Concerns Valuation Dynamics and attractiveness of LNG exports from the US Gulf Region Identify Chenieres competitive advantages Identify inherent risks to the business and downside potential Assess mitigating factors Deconstruct complicated corporate structure Overcome valuation challenges (i.e. lack of peers) and identify best valuation method Quantify upside / downside 59 Investment Thesis - Strengths Exposure to the LNG Market without the underlying commodity risk. Project viability defined & business has been de-risked. Long-term cash flow visibility from signed contracts. First mover advantage following DoE approval. Low cost positioning compared to peers. Access to vast low cost supply source. Location provides optionality. 60 Key Business Plan Milestones Reached

61 Investment Thesis - Risks & Concerns Secure financing for Phases I & II. Pending FERC approval. Project execution. North America as a sustainable source of LNG exports. Competing projects in North America. 62 Significant Financing Requirements 63 Sources of Funds Phase I Trains 1&2 Debt - Project Finance Market: c. $3b at Libor + 300bps (swapped) c. $1.2b of EBITDA for coverage Equity Options: c. $2bn CQP common units CQP subordinated units LNG shares Phase II Trains 3&4 Debt Term Loans/Bonds: c. $1.4b of EBITDA for coverage Equity c. $2bn

Trains 1-4 total expected EBITDA c. $2.7b 64 Valuation Valuation Challenges: Capture true valuation impact in the outer years: Contracted revenue increases by c. $330m per year once all trains come online; EBITDA of $2.7bn after 2018. No peers for multiples valuation. Bottom-up model Liquefaction module; Financial module w/ sensitivity analysis; Financing module w/ scenario analysis; Valuation based on: Dividend yield analysis; Sum-of-the-parts of Chenieres holdings. 65 Valuation (Contd) LNG cash flow per share (2018 onwards) is $6.4 using PIK financing More conservative, as cash flow per share drops from $7.7 and compensates CQP unit holders for near term dividend dilution Given steady nature of cash flows per share, applying a dividend-yield of 8% to its 2018 dividend of $6.40,yields $45 per share with a discount factor of 10%. Conservative approach given energy/midstream MLPs with similarly stable cash flows trade on dividend yields of 4-7%.

Sum-of the-parts of Chenieres was also used as an alternative methodology returning a range of $40-$55 Includes valuation of Common Units and Subordinated Units Distributions 66 So, why does this trade exist? Valuation / Investment Risk Investors are having trouble valuing Cheniere: Lack of peers; C-Corp/MLP complicated structure - market not properly valuing the GP. Significant downside if: FERC blocks application; or Cheniere does not succeed in securing financing. Lack of Coverage Only Citi and Credit Suisse covering stock: CS initiated coverage on January 18th. Issues with valuation approach of both analysts: CS is using DCF and is overly conservative in its financing assumptions. Citi analyst does not cover MLPs. 67 Concluding Remarks Despite Cheniere's complicated corporate structure and inherent challenge in valuation, the Company represents a

great long-term trade with significant upside (at least 2-3x its current share price) Its take-or-pay contracts provide strong visibility and cash flow visibility without the underlying commodity risk Scarcity value as a direct play on theme of increasing global LNG demand and low cost US LNG Lastly, it is an attractive takeover target with clear competitive advantages for well-funded US midstream strategic players. 68 Appendix 69 Drag picture to placeholder or click icon to add Valuation Sensitivity Analysis 70 Sensitivity Analysis - Operational Sensitivity table below outlines various operational scenarios: $4.5-$5.50 dividend per share range reflecting the unlikely event 1 of the 4 contracting parties does not honour their contract) $6.37-$7.75 per share, reflecting financing scenarios Sensitivity analysis vs. dividend yield (range reflecting upper part of dividend yields of MLPs 4$-7%) 71 Sensitivity Analysis - Dividend Yield / Discount Rate YIELD ANALYSIS LNG Dividend Assumed Yield ($0.45) 8.0% ($0.44) 8.0% ($0.44)

8.0% ($0.42) 8.0% $4.70 8.0% $5.19 8.0% $6.37 8.0% $6.37 8.0% $6.37 8.0% Value per Share $0.00 $0.00 $0.00 $0.00 $58.76 $64.89 $79.57 $79.57 $79.57 Discount Rate NPV per share 10% $0.00 10% $0.00 10% $0.00 10%

$0.00 10% $40.13 10% $40.29 10% $44.92 10% $40.83 10% $37.12 Current Share price Upside / (downside) $13.78 -100% $13.78 -100% $13.78 -100% $13.78 -100% $13.78 191% $13.78 192% $13.78 226% $13.78 196% $13.78 169% 72 Financing Scenarios: Sensitivity Analysis

Scenarios: Base case (2015/2017, no PIK) PIK scenario (2012, 2014) Sensitivity Analysis: 1=Base case (2015/ 2017, no PIK) 2 =PIK scenario (2012, 2014) Discount to Current CQP Unit Price ($20.99) $44.9 15% 20% 25% 30% 1 $54.1 $54.7 $55.3 $56.1 2 $44.9 $44.9 $44.9 $44.9 73 Operations Overview 74 Contracted Capacity at SPL Contracted Capacity at SPL Sale and Purchase Sale and Purchase Agreements (SPAs) Agreements (SPAs) Long-term, take-or-pay style commercial contracts equating to ~16 mtpa BG Gulf Coast LNG (1) Gas Natural Fenosa (1)

286,500,000 182,500,000 182,500,000 182,500,000 ~$723 MM ~$454 MM ~$548 MM ~$548 MM $2.25 - $3.00 $2.49 $3.00 $3.00 20 years 20 years 20 years 20 years BG Energy Holdings Ltd. Gas Natural SDG S.A. Guarantor Credit Rating (3) A2/A Baa2/BBB A / A1 Baa2/NR/BBB- Fee During Force Majeure Up to 24 months Up to 24 months

N/A N/A Train 1 + additional volumes with Trains 2,3,4 Train 2 Train 3 Train 4 Annual Contract Quantity (MMBtu) Annual Revenue Revenue $/MMBtu (2) Term (4) Guarantor Contract Start Date Korea Gas Corporation Korea Gas Corporation GAIL (India) Limited (1) N/A (1) Conditions precedent must be satisfied by December 31, 2012 for Gas Natural Fenosa and by June 30, 2013 for BG Group, KOGAS and GAIL (India) Ltd. or either party can terminate. CPs include financing, regulatory approvals, positive final investment decision, issuance of notice to proceed and entering into common facilities agreements (other than GAIL (India) Limited). (2) A portion of the fee is subject to inflation, approximately 15% for BG Group, 13.6% for Gas Natural Fenosa and 15% for Korea Gas Co. and GAIL (India) Ltd. (3) Ratings may be changed, suspended or withdrawn at anytime and are not a recommendation to buy, hold or sell any security. (4) SPAs have a 20 year term with the right to extend up to an additional 10 years. Gas Natural Fenosa has an extension right up to an additional 12 years in certain circumstances. 10 75 Sabine Pass LNG Exports Will Provide Global LNG Buyers Attractive & Sustainable Transportation Costs With an Attractive, Long-term, Alternative Source of Supply Worldwide LNG prices predominantly based on oil prices = $11 - $23 / MMBtu LNG Contract Price

Indexation % at $100/bbl at $150/bbl 11% $ 11.00 $ 16.50 15% $ 15.00 $ 22.50 Cost of delivered gas from Sabine Pass to Europe/Americas & Asia =$8 - $10 / MMBtu ($/MMBtu) Asia Henry Hub Capacity Charge Shipping Fuel/Basis $ 4.00 2.50 1.00 0.60 $ 4.00 2.50 2.80 0.60 Delivered Cost $ 8.10 $ 9.90 Current LNG Market Growth Market Europe/Americas

30 40 Bcf/d 100 Bcf/d LNG contracts indexed to oil prices rule of thumb 11% to 15% of crude oil prices Power generators switching from oil to gas paying $13 to $19 / MMBtu for fuel oil and diesel Source: Waterborne, GIIGNL, PIRA Energy Group, Cheniere Research 11 76 Sabine Liquefaction Gas Sources Asset Map 77 Sabine Pass LNG Terminal Expansion Plan 78 O r g a& n i Debt z a t i o nBreakdown a l S tr u c tu r e Group Structure N Y S E A m ex U S : L N G $ 2 0 5 m m 2 . 2 5 % C o n v e r t i b le S e n io r U n s e c u r e d N o t e s d u e 2 0 1 2 1 0 0 % O w n e r s h ip I n t e r e s t C r e o le T r a il P ip e l in e O t h e r P ip e lin e P r o je c ts C h e n ie r e L N G , In c . 1 0 0 % O w n e r s h ip I n t e r e s t C h e n ie r e L N G H o ld in g , L L C 8 6 .8 % th ru L P In te re s t 2 % th ru G P In te re s t $ 2 8 2 m m 1 2 .0 % S e n io r S e c u r e d L o a n s d u e 2 0 1 8 N Y S E A m ex U S : C Q P C h e n ie r e E n e r g y P a r tn e r s , L .P . 1 1 .2 % L P In te r e s t P u b lic U n ith o ld e r s 1 0 0 % O w n e r s h ip I n t e r e s t

C h e n ie r e E n e r g y I n v e s t m e n t s , L L C (In v e s tm e n ts ) 1 0 0 % O w n e r s h ip I n te r e s t S a b in e P a s s L iq u e fa c tio n , L L C C B G G u s to m e r G G u lf C o a s t L N G a s N a tu ra l F e n o s a A IL ( In d ia ) L td . A nnual $411 $454 $548 S M M M 1 0 0 % O w n e r s h ip In te r e s t S a b i n e P a s s L N G , L .P . P A P m t M M M C u s to m e r T o ta l C h e v ro n In v e s tm e n ts $ 5 5 0 m m 7 .2 5 % S e n io r S e c u r e d N o te s d u e 2 0 1 3 $ 1 ,6 6 6 m m 7 .5 0 % S e n io r S e c u re d N o te s d u e 2 0 1 6 A nnual TU A P m t $124M M $129M M $252M M N o t e : A b r id g e d v e r s io n o f o r g a n iz a t io n s tr u c t u r e . B a la n c e s a s o f J a n u a r y 6 , 2 0 1 2 . 16 79

Complicated Incentive Structure at GP Level Cheniere owns the GP and the LP of CQP (86.8%). Cheniere owns 12.0mm common units in CQP,135.4mm subordinated units and 3.4mm general partner units. Currently CQP only pays the MQD to common unit holders. Subordinated unit holders are not receiving distributions. The general partner manages CQPs businesses, and through its ownership of incentive distribution rights, is incented to grow CQPs distributions. Distribution target levels were set at CQPs formation: 80 Market Dynamics 81 US Natural Gas Market 82 Global Petroleum Demand - Stationary Sources Global Petroleum Demand Stationary Sources US US & &Canada Canada 2.2 2.2MM MMb/d b/d ~ ~13 13Bcf/d Bcf/d Europe Europe 2.9

2.9MM MMb/d b/d ~ ~17 17Bcf/d Bcf/d Mid MidEast East 2.8 2.8MM MMb/d b/d ~ ~17 17Bcf/d Bcf/d Latin LatinAmerica America 2.3 2.3MM MMb/d b/d ~ ~14 14Bcf/d Bcf/d FSU FSU 0.9 0.9MM MMb/d b/d ~ ~5 5Bcf/d Bcf/d Asia Asia 6.9 6.9MM MMb/d b/d ~ ~41 41Bcf/d Bcf/d

Africa Africa 1.2 1.2MM MMb/d b/d ~ ~7 7Bcf/d Bcf/d Global oil such as as industrial, power andand Global oil use usetotals totals19 19million millionb/d b/d(~22%) (~22%)ininstationary stationarysources, sources, such industrial, power heating, that could beswitched switchedto tonatural naturalgas: gas:equivalent equivalent 100+ Bcf/d natural gas demand heating, that could be toto 100+ Bcf/d natural gas demand Source: PIRA Energy Group, The Potential for Natural Gas Substitution of Stationary Petroleum Demand, J anuary 2010

13 Source: PIRA Energy Group, The Potential for Natural Gas Substitution of Stationary Petroleum Demand, January 2010 83 G lo b a l L N G M a r k e t Global LNG Market L N G Im p o r te r s P r ic e In d e x a tio n O il P r o d u c t s 2 0 1 0 T o t a l G lo b a l L N G L iq u e fa c t io n C a p a c ity ~ 3 7 B c f/ d N a tu ra l G a s A l g e r ia - 2 .7 N o r w a y - 0 .6 JC C 2 0 1 0 R e g io n a l L N G D e m a n d 3 0 B c f/d Eg y p t - 1 .6 Q a t a r - 9 .3 U S A - 0 .2 R u s s ia - 1 .3 18 8 .6 1 .8 Eu r o p e A s ia N o rth A m eric a M a la y s i a - 3 .0 In d o n e s ia - 4 .6 B r u n e i - 1 .0 1 .3 S o u th A m e r ic a S o u r c e : W a te r b o r n e , C h e n ie r e R e s e a r c h 18 O m a n - 1 .4 U A E - 0 .8

Y e m e n - 1 .0 E q u a t o r ia l G u in e a 0 .5 N ig er ia - 2 .9 A u s tr a lia - 3 .1 Tr in id a d & T o b a g o - 2 .0 P e r u - 0 .6 84 F ir m L iq u e fa c tio n C a p a c ity A d d itio n s Firm Liquefaction Capacity Additions N a m e p la te L iq u e fa c t io n C a p a c ity ~ 3 7 B c f/d a s o f Y E 2 0 1 0 ~ 4 4 B c f/d b y Y E 2 0 1 5 B c f /d 3 .0 M id d le E a s t G u lf 2 .5 A s i a P a c i fi c G o rg o n T 1 & G a s s i T o u il A tla n ti c B a s in P a p u a N e w G u in e a 2 .0 G o r g o n T 2 & C u r ti s T 1 G o rg o n T 3 & C u r tis T 2 1 .5 W h e a ts to n e T 1 P lu to G la d s to n e T 1 A n g o la L N G 1 .0 G la d s to n e T 2 S k ik d a A u s tr a lia P a c ific T 2 *

P r e lu d e 0 .5 Q1 Q2 Q 3 Q 4 Q 1 Q2 Q 3 Q 4 Q1 Q 2 Q 3 Q 4 Q1 Q 2 Q 3 Q 4 Q 1 Q2 Q 3 Q 4 Q 1 Q 2 Q 3 Q 4 Q 1 Q 2 Q 3 Q 4 2011 S o u r c e : C h e n ie r e R e s e a r c h 2012 2013 2014 2015 2016 2017 * F ID p e n d in g 19 85 N o r t hAmerica A m e r i c Onshore a O n s h o Receiving r e R e c e i v i nTerminals g T e r m in a ls North DD oo uu gg l laa ss I Iss l laa nn dd T e r m in a l C a p a c ity H o ld e r PP rri inn cc ee RR uu pp ee rrtt IsI s l laa nn dd KK i itti imm aa tt CC aa nn aa pp oo rrtt TT ee xx aa dd aa IIss l laa nn dd B a s e lo a d S endout (M M c f/d ) C a n a p o rt R epsol E v e r e tt - S u e z

EE vv ee rree tttt JJ oo rrdd aa nn CC oo vv ee CC oo vv ee PP oo iinn tt EE l lbb aa IIss l laa nn dd CC oo ss ttaa AA zz l l GG oo l ldd ee nn PP aa ss ss GG uu l lff LL NN GG FF rree ee pp oo rrtt LL aakk ee CC hh aa rrl leess CC aa mm ee rroo nn SS aa bb i inn ee PP aass ss 700 C o v e P o in t B P , S ta to il, S h e ll 1 ,8 0 0 E lb a Is la n d B G , M a r a th o n , S h e ll 1 ,8 0 0 G u lf L N G A n g o la L N G , E N I 1 ,3 0 0 L a k e C h a r le s - B G 1 ,8 0 0 F re e p o rt C o n o c o P h i lli p s , D o w , M i ts u i 1 ,5 0 0 S a b in e P a s s T o ta l, C h e v r o n , C h e n ie r e 4 ,0 0 0 C a m e ro n S e m p ra , E N I

1 ,5 0 0 G o ld e n P a s s E x x o n M o b il, C o n o c o P h illip s , Q P 2 ,0 0 0 A lta m ir a S h e ll, T o ta l AA l lttaa mm i irraa 1 ,0 0 0 C o s ta A z u l S h e ll, S e m p r a , G a z p r o m T o ta l 700 1 ,0 0 0 1 9 ,1 0 0 E x is tin g te r m in a ls E x is tin g te r m in a ls w ith p r o p o s e d liq u e fa c tio n p ro je c ts S o u r c e : W e b s i t e s o f T e r m i n a l O w n e r s , D O E fil i n g s 20 P r o p o s e d liq u e fa c tio n p r o je c ts 86 Agenda 1 About the Stock Pitch Competition 2 Student Investment Fund update 3 Competitions Judges 4 Stock Pitch Finalists 5 Student Presentations 6

Judges final decision Spring 2012 Stock Pitch Competition Judges final decision And the winner is Spring 2012 Stock Pitch Competition Thanks for participating! Next Stock Pitch Competition Autumn 2012 Please, join us at Sainsburys lower ground floor to celebrate Spring 2012 Stock Pitch Competition

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    Chapter 7: Regions of the US Section 1 - The Northeast

    Chapter 7: Regions of the USSection 1 - The Northeast. Titan Blaster #1: List from memory the nine states that form the Northeast. ... The area from Boston to Washington DC is considered a megalopolis of over 40 million people....
  • 159.234 Lecture 10 - Massey University

    159.234 Lecture 10 - Massey University

    Therefore, we need to perform a deep copy to copy what the pointers are pointing to. * Operator Overloading When we assign an object to another: str a, b; a = b; NO copy constructor is involved. It is an...
  • Desert Adaptations - Utah State University

    Desert Adaptations - Utah State University

    Desert Adaptations. Welcome Aboard! Today you will get a chance to look at some adaptations of plants and animals that live in the desert. Because the desert is SO hot and dry, these plants and animals have to adapt in...
  • Looking Into The Funny Figurative language uses FIGURES

    Looking Into The Funny Figurative language uses FIGURES

    is an overused, trite expressions or idea. Many cliches are idioms, but not all idioms are necessarily cliches. To say something is a cliche is a negative comment, whereas idioms usually are not. Sometimes cliches are used to be ironic...
  • Needles don't have to hurt

    Needles don't have to hurt

    poke or a sting, and some pushing. Perception of pain is . very variable . among individuals. Children often perceive needles to be more painful . than adults and describe any procedure related to needles to be one of the...
  • Greek Drama

    Greek Drama

    Greek Drama: The Tragedy. Tragedy is meant to reaffirm that life is worth living, regardless of suffering or pain. Conflict between people and the universe. The Tragic Hero asks the first and last of all questions: What does it mean...
  • Destinations - University of Reading

    Destinations - University of Reading

    Blackboard, WebCT, Moodle The course leader creates the links to the material and between the material It is also possible to link to other materials or websites, encouraging access to a variety of sources of career information Destinations can be...
  • Mathematical modelling and computer animation

    Mathematical modelling and computer animation

    Mesh behaves as normal object Flow simulation computation is very expensive Import via next limit plugin Lighting and camera Camera path is ellipsoid spiral spline Rendered with VRay render, Indirect illumination calcualtion Lighting made via HDRI map of interior Rendering...