John Winsell Davies Suntec City Tower Four 6 Temasek Boulevard 35-03 Singapore 038986

新加坡共和国

சிங்கப்பூர் குடியரசு

Skype: “John Winsell” j.winsell@bloomberg.net +65 6643 5362 direct jwd@devonian.ru

14 August 2015

JWD Weekly Call

Crapped Out – when you build it, they won’t come

Enterprise: Wynn Macau Ticker: (1128 HK) Sector: Entertainment and Leisure Industry: Macau Gaming Action: Short

Like many managers, I have long been of the unoriginal view that the Macau-based casino operators represent a fundamental short. Nothing new and starting with the top-down macro, it has seemed an obvious sector and country-specific call. The Chinese gaming stocks have fallen hard in the TTM, so what’s next? But before we pull down the sheets, the … Old news:

12 months of declining gaming revenues

Beijing anti-corruption crackdown

Beijing demand for non-gaming activities = an unofficial licensing tax = non-profitable expenses

Yesterday’s news – yes but much worse than people thought and not getting better …

Casino revenue run rate is down -46% YoY to today

MERS (first two cases reported), think SARS + Bird flu that kills

Total smoking ban is big, is real, is extended to VIP areas, and it will harpoon some of last of the Chinese Whales. Smoking ban reduced floor gamers by 15%. Estimated reduction of VIP gamers from total smoking ban +/- 30%

The prevailing “worst is over” relief rally is an opium dream

Ex Libris - JWD

You already know all that, who cares - something else? Yes, I suggest that financial models are diametrically wrong about the fundamental relationship between new property openings and profitability. Hence the entire business case is inversed and there remains increasingly powerful profit potential from the short side. Fallacy: property openings will drive profits? Industry investment rational is predicated on the misunderstanding that new casinos will translate into sector earnings, as guest visits rise by degree significant to offset the decline in casino operations (gaming revenues).

‘If you build it, they will come,’ Ray Kinsella, Iowa corn farmer I disagree and attach the math in financial model addendum available my request. My position is that the green wave of splashy venue openings represents a mission-critical business risk, particularly for the highly indebted (leveraged) developers.

o In the simplest terms, new properties mean new capacity o Capacity does not drive new demand, rather it drives increased vacancies o Increased vacancies mean margin compression and eventually operating losses o Greater the supply, the more damaging to profitability

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Of equal importance the high margin plungers have left. The new demand is poor quality, low spending mainland day-trippers with an average drop of $87 USD per person. The whale is gone and is not going back with the opening of new properties. No more cheetah and no more monkey at the baccarat table

And central planning’s pie-in-the-sky transition to family Vegas-styled, middle income, entertainment destination will fail against the backdrop of rider less merry-go-rounds.

Financial Analysis – model hairplane I wanted to look at the math a couple of different ways so completed detailed sensitivity analysis w. model for each of the peer comps (in addendum). To best quantify the impact of supply on EPS, I highlight Wynn Macau (1128 HK) with similar pattern for the group. Imputing the following assumptions and calculations: 1. X = D supply (capacity) and Y - D demand (occupancy)*

*guest headcount not occupancy rate

2. The rate of operating expense is equal to the rate of supply

3. The in revenue is equal to the of guests

4. Calculate for Basic Weighted Average Shares for recent three (3) years. Take average and use it to calculate the BWAS for next three years 5. The modelling EPS = Operating Income / BWAS, i.e. neglect interest, tax, Fx loss or gain etc. We understand that: As supply (room capacity) increases, EPS declines. Even in rising demand (guest headcount increase), EPS grows faster with limited new supply. In the case of Wynn Macau, the supply of new rooms is expected to grow by 168% YoY! This makes sense right? Even in a time of falling wheat prices during the Great Depression, farmers who made a dollar a bushel in profit before the crash now made 25 cents in profit a bushel. So what did they do? They planted 4x more wheat, to try to make a dollar. And then the price fell through the floor. This is the opposite strategy of how De Beers makes money. (DBR SJ) hoards diamonds to control the price. They release diamonds onto the market when prices are high and cut supply when prices are low. But Macau casino operators are desperately trying to grow their way back to profitability by flooding the market. Worse, they are targeting a low margin demographic which represents a margin killer. Each developer believes that regardless of market saturation, his property will operate at capacity like the good old days. Portfolio and fund manager bulls believe this too and are waiting for ‘the bounce.’ Fallacy 2: lost gambling revenues will be replaced with family revenues Beijing wants Macau to transition from gaming to diversified entertainment like Las Vegas. But this is the same as New York City telling its middle class to holiday in Atlantic City. I do not believe it will happen. Anecdotal: Cirque du Soleil ran “Zaia” in Macau for three years at a loss and then closed in 2012. No one wanted to see it. There are eight permanent Cirque du Soleil shows in Las Vegas, most playing to capacity

Ex Libris - JWD

audiences night after night. Macau has only two (2) two star Michelin restaurants. Next door Hong Kong has fifteen (15). Middle class families that have the money to travel are not interested in Macau either. They prefer nature, animals, theme parks, outdoors, sports and adventure activities. Such a product does not exist in Macau for many reasons including the lack of space.

The SAR is only 30 square kilometres

Approximately 30MM people visit per year

21MM from China and the remaining 9MM from Hong Kong, Singapore, Japan, and Korea

Macau is already uncomfortably crowded at 30MM especially in peak season

In order to replace smaller numbers of big spending gamblers, with large numbers of lower spending families, estimates go as high as 50MM per year to meet profitability targets

But this density would be unpleasant for families, the goals are incompatible, and from personal experience, I can share that Macau is not a particularly attractive little island for these specific aesthetics

The Government of Macau understands that crowding is a problem and that Macau is not seen as a comfortable family destination. Not widely known: Following the Hong Kong model and limited number of visits, the Macau government is planning to submit to Beijing a scheme to cap wants to cap the number of Chinese visitors and increase the diversity of their visitor mix. Those close to the situation who I have spoken with do not believe that a) Beijing will accept this and b) that it would change the relative attractiveness of Macau. (At the time of this publication, Beijing in fact increased the number of daily mainland visas as predicted) The Galaxy Macau 2015 – business in ‘on fire.’ Have you ever been to Macau? I have, when I was managing director of Templeton China (Beijing). Not sure that I would want to take my family there … it is just not a very ‘nice place’

Macau will be unable to diversify its economy from gambling because Chinese families want to replicate Western holiday experience that Macau does not offer. Families do not go to Macau for dining, outdoor activities, sports and entertainment. Even if the plan succeeded it would only cripple margins.

Gaming moving from 96.3% in 2014 to 47.2% in 2017 = EPS decline Street earnings estimates most certainly, need to come down further. Across the board - Not priced in - Long-term trend

Macau's Blended Table Yield (Rev/table/day)2014 2015 2016 2017

96.3 55.2 47.6 47.2

- -42.68% -13.77% -0.84%

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[Source: Tano Singapore Advisors]

Why? Because even if revenues from hotel operations, rooms, F&B, services and entertainment more than double from $1.8B in 2013 to $4.5B in 2017 representing an increase of $2.7B (best case and unrealistic?), this will not remotely offset the $10B decline in gaming $29.5B to $19.7B over the same time period. And the profit margin from table business in 3x higher than from labour intensive and high COGS hotel business.

[Source: Tano Singapore Advisors]

Indeed, operating expenses for the period rise by $5.9B p.a. by 2017. With the opening of the Wynn Palace, EPS likely goes negative by the end 2016 and beyond Not me – the schooling principle It is interesting to note that every single market participant with whom I have spoken has begrudgingly acknowledged that excess capacity constitutes a structural risk in the future. But interestingly, none would accept that over supply was a threat to their property. It is as if some special sparkles would keep the rooms filled at the Wynn Diamond for example, but empty net door at the MGM Macau. There are 33 casinos in Macau. Global peer comps Enterprise Ticker YTD TTM Debt/Equity ‘15 PE PB P/FCF Yield SI M-Cap Sands China 1928 HK -27% -47% 50% 17.26x 4.67x 12.13x 6.89% 8.17% $30.082 B Galaxy Entertain 27 HK -21% -31% 3% 16.79x 3.76x neg 0.00% 20.84% $18.668 B Wynn Macau 1128 HK -34% -51% 264% 16.01x 10.28x neg 5.02% 20.01% $9.343 B MGM China 2282 HK -28% -42% 65% 15.32X 8.43x 23.21x 3.72% 14.83% $6.902 B SJM Holdings 880 HK -23% -51% 7% 14.02% 2.12x 17.89x 9.03% 11.27% $6.786 B Melco Intl 200 HK -34% -48% 10% 12.25x 1.42x 21.73x 1.75% 21.35% $2.234 B

WYNN MACAU FY 2013 FY 2014 FY 2015 EST FY 2016 EST FY 2017 EST

12/31/2013 12/31/2014 31/12/2015 31/12/2016 31/12/2017

Revenue 31,340.85 29,444.86 17,585.19 24,412.66 24,245.37

revenue form gaming 29,536.05 27,787.97 15,928.31 19,908.44 19,741.14

Revenue from hotel and others 1,804.80 1,656.89 1,656.89 4,504.23 4,504.23

WYNN MACAU FY 2013 FY 2014 FY 2015 EST FY 2016 EST FY 2017 EST

12/31/2013 12/31/2014 31/12/2015 31/12/2016 31/12/2017

  Operating Expenses 23639.42 22479.02 16553.01 29308.24 29211.29

Special exp. On gaming 15143.67 13885.03 7959.02 11536.11058 11439.16848

Exp. On hotel and others 8495.75 8593.98 8593.98 17772.1254 17772.1254

Operating Income 7701.44 6965.84 1032.19 (4895.57) (4965.93)

EPS (Modelling) 1.48 1.34 0.20 (0.94) (0.96)

percentage of change 14.99% -9.55% -85.18% -574.28% -1.44%

EPS Dropping Percentage (compared to 2014) -85.18% -170.28% -171.29%

  Basic Weighted Avg Shares 5187.55 5187.75 5187.83 5187.90 5187.98

Increasing rate of BWAS 0.000% 0.004% 0.001% 0.001% 0.001%

Ex Libris - JWD

More:

Anti-corruption efforts do not just impact casinos

Luxury brand retailers from Burberrys to LVMH revise business models

Top end restaurants do not open

This impacts real-estate and all other tangents Labour shortage and wage inflation Macau wages are rising, zero unemployment, worker shortage. Not just low skill construction jobs, in order to meet aggressive property expansion targets. Where will the Macau SAR get proportionately higher levels of trained hospitality and service industry workers? Where will they live? Macau SAR GDP falling by 30% YoY as average earnings of full-time casino employees in June, excluding bonuses and allowances, rose by 6.7% YoY. And the SAR has entered into recession Q1 2015 with GDP expected to contract +/- (15%) this year. Enterprise Specific - Why Wynn Macau (1128 HK)? Wynn is building a $4.1B ‘Wynn Palace’ resort on Macau’s Cotai Strip originally scheduled to be finished in time for the February 2016 Lunar New Year. Bulls cling to this event as the silver bullet to return share price to February 2014 high of 37.40 and beyond. A retracement to last year’s peak would represent a 170% advance. Hope springs eternal but this is unlikely to happen. Industry trends and fundamental data support are consistent with my model, in suggesting that the project will cannibalise on existing operations. Errrrrr!

Wynn Palace will increase gaming capacity (table supply) by 1,008 = 45% next year (2016)

Wynn Palace will increase hotel capacity (room supply) by 1,700 = 169% next year (2016)

Wynn Macau is the highest indebted of the peer comps w. 264% total debt to equity

Wynn Macau has highest financial leverage of peer comps 4.0x

Wynn Macau generates negative free cash flow - $0.55 per share

This makes the 5% dividend unsustainable

The company maintains that the dividend will be financed from operating cash flow, so a dividend cut has not been priced by the market

Wynn Macau trades at the highest M-Cap to Assets valuation of peer comps (10.28x P/B) – see peer comp table

Why? Because the ‘Street’ has assigned massive capex for goodwill – superior brand, service, trained personnel, F&B, appointments, concierge services, artwork, décor, and entertainment. But the Chinese consumer has not shown a willingness to pay a price premium for any of these ‘superior’ details which are

Ex Libris - JWD

expensive to build and maintain; more difficult to sustain related to HR. Wynn has an expensive product which the consumer does not (yet) value

Wynn Macau – 50% TTM vs MGM China, Sands China, MSCI EM, Hang Seng, and MSCI ACW

Extraneous Wynn Macau’s casino concession expires 7 June 2022. It is not automatic. Rather it is like a Russian oil company. The firm receives an operating license. Then spends the money for upstream E&P (risk capital) Finds oil. Then the government can get them to do its bidding (usually pay bribes 90% and pay for social projects 10%). Or lose the license Wynn Macau initial concession was free. May not be free this time. Think of it like a 3G license. What is it worth? Once you have invested in the infrastructure, towers, and the network, it is worth whatever your business is worth. Without it your business is worthless. Do you think China is above exploiting that dynamic? Was Switzerland or Holland? No. $1B - $5B onetime fee, or for another five years, … Or increase revenue tax of 39% to … ? 41-45% Then there is the 25 year land lease initiated in 2008, good for another 17 years. What will that be worth? Effective tax income tax rate of 0% ends five years. Will it be renewed? Some believe that it may rise to a 12% income tax, similar with other non-gaming Macau businesses in the service sector Short interest ratio 20.01%

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This does not impair the short rational and again, suggest this supports a fundamental conclusion. Consider that SinoForest (TRE CN) and other mind dwarfing shorts were sky high at the time of implosion. Conclusion My starting position is that by definition, the consensus is generally correct as easily proven by the relationship between buyers and sellers on asset price. Investment rationale has not changed by that fact that Macau casino operators have fallen hard. I do not believe that new shorts have ‘missing the trade’. Rather I believe that the decline in share price is a validation of the deteriorating fundamental investment case. New openings will not provide a much needed bounce in stocks; instead they will open the flume chute to the next 50% down slide. Above and beyond all profoundly negative fundamentals weighing on the sector: Wynn Macau (1128 HK) is increasing room supply by 169% next years, with the highest leverage, 264% debt to equity, negative free cash flow, an unsustainable divided, and trades at the highest multiple of market capitalisation to assets (P/B >10x). Recommended action Short Wynn Macau (1128 HK) In Play

Initiating investment methodology with the top down global macro, I generate standalone equity shorts by first:

a) Searching for unfavourable themes and deteriorating fundamentals within sub-sectors of larger industry groups then,

b) Identifying economic trends within a space that may result in ‘opportunity’ characterised by 1) systemic flaws in core business model, 2) inability to adapt/evolve to changing marketplace and new technologies/entrants, and especially 3) meaningful risk to earnings expectations and finally,

c) Conducting research and analysis to detail unique securities; those within a peer group which best demonstrate essential elements of the bear case, the theme, the short story

Ultimately I am trying to produce one name, ‘the best constituent’ which displays the most attractive risk-reward profile for asset price depreciation of the comps. Visible patterns are developing and we can identify recurring tendencies delivered by this investment process. What’s on the menu?

Television (network broadcasting and cable)

Traditional American television and cable has entered into a period of irreversible structural decline

Channel bundling, timetable line-ups and the advertising-driven revenue model are unsustainable

Aggregators and distributors of content (middlemen) will be marginalised in the age of internet streaming media and ‘New TV’

The broadcasters are not capable of competing with the technology giants who are redefining the industry, and carving up the business landscape in the new age in television

Margin compression, negative revisions, and earnings decline will accelerate, leading to industry rerating’s, and perhaps even obsolescence

CBS Corp (CBS US) quantified with financial analysis and enterprise-specific short rationale

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Publishing (print media)

The publishing industry in long-term and irreversible state of terminal contraction

Newspapers the next ‘Yellow Pages’, magazines become ‘adzines‘, books devolve to ‘special purpose’ usage

Old economy publishers unable to evolve in the digital media world

New economy of digital media is being shaped by entrants with superior technology and innovation capabilities

Margin compression, negative revisions, and earnings decline will accelerate, leading to rerating and ultimately operating losses

News Corp (NWSA US) quantified with financial analysis and enterprise-specific short rationale Technology (File Sharing Platform)

Box Inc. (BOX US) is a second-tier entrant in the fundamentally unattractive and largely unprofitable technology niche of cloud-based file sharing (software architecture). The company does not appear to have any competitive advantages over the competition and has of yet been unable to distinguish itself in the largely commoditised cloud storage industry

With just 37MM users and only 47K paying customers, Box is a tethered goat in a forest of industry apex predators including Microsoft OneDrive, Google Drive, Amazon Zocalo, Citrix XenMobile, IBM and a phalanx of independents including Dropbox

The tech giants use file sharing as a loss leader to support well developed ecosystems, and thus crush the margins of participants like Box, whose core business is file sharing. Quite literally dozens of privately held start-ups offer file sharing technologies for free

The firm was unable to capitalise on initial first mover advantage during ten years of operations and with the arrival of powerful new market players, thus future profitability seems improbable (even to company IR colourists)

Following a much hyped public listing, Box shares have fallen 30% in six months and are making post-IPO lows. Lock up and quiet period ended 22 July and I would expect insider selling

The firm has been significantly lossmaking since founding ten years ago and has no viable path to positive cash flow, much less earnings in the next three years

SGA + Capex +78% YoY, are greater than revenues. High revenue growth is slowing demonstrably, but cost structures are such that higher sales do nothing to improve the profitability results, rather they equate to greater losses

The company is running a 2015 operating margin of -81.25% and is expected to remain profoundly negative until 2018; after which date, in such an evolving, rapidly transforming industry, even the most astute industry expert would be loath to provide estimates

Box generated $100 MM in losses on the bottom line 2013 and the company in expected to lose more than that ($101 MM) in 2018. And between now and then, the forecast is even worse with -$179 MM 2015, -$182 MM in 2016, and -$147 MM in 2017

ROIC is >100% meaning the company burns $1.00 for every dollar invested … annually

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Q1 2015 cash flows from operations delivered a >100% YoY loss of -$32.2M vs. -$15.6M Q1 2014 … with just $284MM in cash vs $40MM in debt, it appears that without a secondary offering (fool’s gold), bond issuance (sucker born every day), or strategic sale (of what?), Box may be insolvent by mid-2017

M&A buyout risk seems low as the only reported offer of $550MM represents a near -75% discount to current market cap

Wildcard: share price is significantly leveraged to ‘street’ perceptions and credibility of charismatic Chairman, CEO and co-founder. Post-IPO disappointment and losses for virtually anyone who bought since the first trade, suggests that the believers are losing their conviction. My expectation is that investors and backers will look back on this meteoric rise with twinges of embarrassment

Telecommunications Carriers and Mobile Wireless Operators

The Tribble with Telco’s ‘Your phone’s of the hook, but your not,’ X - Los Angeles

Incumbent telecom carriers and wireless operators should consider a future of increasingly declining profitability, and shrinking market capitalisation

Like the traditional television broadcasting and cable companies, traditional telecom carriers and wireless mobile operators have already entered a period of long-term structural decline

Technology is irreversibly changing consumer preferences, buying habits, behaviours and choice. Innovators will not only benefit from the new economy in telecommunications, but will also likely determine the way that consumers communicate, what devices they use to communicate, who and how they will pay, for both the hardware and connectivity

Removed from value chain, the telecom carriers are ‘Data Mules’ (coined here) servicing dumb pipes. Google’s Project Fi latest example, fail to innovate, they remained indentured workers, tasked with oiling, cleaning and upgrading the profitless network

Core businesses under siege: o Wireless - price wars, consumer no longer needs to pay to make a wireless call. Voice over IP

(VoIP) technology built into iOS, Android, Windows, and Blackberry smart phone aps, by players like Apple Facetime, Viber Media

o Long distance - Long distance profitability is threatened by Voice over IP (VoIP) technologies allowing for free long distance communications with or without video. Mainstream acceptance was pioneered by Skype (acquired by Microsoft). In addition to Google Meetup and many others, free long distance is available on virtually any operating system Windows, Mac, Linux, Android, iOS, Windows Phone, BlackBerry, Nokia X, Fire OS, Xbox One, PlayStation Vita and PlayStation

o Data packet transmission - Data packet transmission revenues are being shorn by social media platforms like WhatsApp and Facebook Messenger who offer free messaging on far better platforms

The cavalry is not coming, FCC voted to retain net neutrality rules February 2015 and any future ‘save’ will likely be in the form of a regulated utility-type price setting arrangement such that one of four business units (data packet transmission) will be permitted to deliver utility-type returns in order to keep the pipe open. The patient survives but is not able to leave the hospital bed. Network might be spun off and the other three units are left on their own

Long-term industry profitability has been marginalised by commodity pricing, which has ushered in a new era of value destructive, cash burning, price wars. (Cloud hosting analogy)

Verizon (VZ US) quantified w. financial analysis and enterprise-specific short rationale

Verizon is one bad quarter away from a house of cards. Investors are buying a 4% corporate bond with no maturity date, no return of principal and the real possibility of the dividend cut

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On an asset basis the shares are grossly overvalued with P/B of 21x. The books are dangerously overleveraged, with total debt to common equity stands at 921% and $113 billion in debt

Erste Bank discontinued research and dropped the name based on inadequate coverage ratios

The primary business is haemorrhaging mobile subscribers and there is no credible growth strategy

Management is managing the company by walking tightrope, able to service $131B debt on $127B revenues. Razor’s edge, able to finance dividend with 90% pay out on $9.6 B in net income with $8.6 B paid out.

Once the dividend is cut, income funds, value funds, and retail investors will run Technology (Pioneer Harvest, early niche entrants subsumed) – two parts Infrastructure Architecture (Cloud hosting) – part 1

Dark Clouds, ‘Tut tut, it looks like rain’ Chicken Little

Core business increasingly uneconomical as technology leaders compress margins

Leasers of cloud real-estate removed from value chain

Cloud hosting requires heavy capex and m-cap to build occupancy

But occupancy as standalone business niche is not profitable

Parallels with internet backbone network builders and Vegas hotel room operator without a casino

Margin compression, negative revisions, and earnings decline will accelerate, leading to rerating perhaps marooned or eaten

Rackspace Hosting (RAX US) quantified w. financial analysis and enterprise-specific short rationale Internet Media (Streaming Music) – part 2

Highly developed technology ecosystems have added or are adding proprietary streaming music services to their existing platforms

Streaming music is literally being given away for free (ad based radio model) or to attract users to larger environments (door prize)

Similar to niche operators like online gaming, online dinner reservations, online travel, and online messengers, the standalone online music pioneers are too small to survive with their singular product offering

But at the same time, high R&D is required to compete with the massive scale of Apple (AAPL), Google (GOOG) and others; accelerating losses and leading to rerating, obsolescence

Reminds of a mini-Netscape or mini-RealNetworks (Explorer or MediaPlayer bundled in Windows, Adobe gives away Flash for free … who is going to go out and buy Navigator or RealPlayer)?

Pandora Media (P US) quantified with financial analysis and enterprise-specific short rationale

Perhaps a takeout candidate for proprietary content or existing customer base? More work required to move forward, indicating high risk

Internet (Chinese niche freebies)

Deluge of unprofitable niche entrants, in high-flying Chinese internet space, unable monetise site users

Chit chat, video games, streaming music, photo share and friend making services given away for free

No mobile cash payment platforms

Unable to compete with large and highly developed ecosystems Alibaba (Baba), Baidu (BIDU) and Tencent (700 HK)

No earnings, untenable valuations, in the absence of white knights possibly left orphaned to die

Changyou.com (CYOU US) quantified with financial analysis and enterprise-specific short rationale

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Entertainment and Leisure (Macau Casino Operators)

‘If you build it, they will come’ Ray Kinsella, Iowa corn Farmer

Casino run rate already down -46% YoY to date

Flood of new capacity (rooms) does not equal to revenue expansion; rather it foretells of impending operating losses

Declining occupancy rates will free-fall on the surge on new property openings

Vacancies will further rise against the backdrop Beijing driven anti-corruption crackdown, smoking ban and heightened scrutiny

Transition to family-oriented sports, leisure and entertainment destination is doomed to fail impressively

Profitability outlook darkened by deteriorating demographics, falling real-estate, recession on the SAR, and significantly higher COGS driven by pay role inflation due to systematic labour shortage

Our model and sensitivity analysis of peer comps to headcount and occupancy assumption scenarios points to operating losses. Supply does not drive demand

Wynn Macau (1128 HK) quantified with financial analysis and enterprise-specific short rationale including possible dividend cut and delayed launch to miss 2016 Chinese Lunar New Year

9 July HSBC raised to buy, 6 July Credit Suisse “worst is over” relief rally wishful thinking; filling rooms with lower quality, non-gaming ‘overnighters’ and increasing guest visits by enabling visa-free travel for mainland ‘day trippers’ is not a solution, it is a validation of short analysis

John Winsell Davies is the Chief Investment Officer of Tano Singapore Advisors Pte Ltd. This is an original opinion piece which may not reflect the views of the Firm The opinions expressed here are his own Linked-In format does not allow for my charts, graphs, tables and illustrations. As such clarity and impact of original report has been marginalised. Original report available by e-mail Questions and comments; please write to me in Singapore j.winsell@bloomberg.net Skype ‘johnwinsell’